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Facts
The Revenue appealed against the deletion of an addition of commission income of Rs.822.67 Lacs made by the AO. The reopening was based on the allegation that the assessee purchased goods from a sham entity engaged in bogus sales. The AO estimated commission income on accommodation entries.
Held
The Tribunal held that the assessee had successfully explained each of the bank credits by demonstrating that the transactions were duly reported in audited books and offered to taxation where applicable. The findings of the CIT(A) were not controverted.
Key Issues
Whether the addition of commission income based on alleged bogus purchases and accommodation entries is sustainable.
Sections Cited
147, 144B
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Income Tax Appellate Tribunal, “DB” BENCH, AGRA
Before: HON’BLE SHRI SATBEER SINGH GODARA, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रणवष� / Assessment Year:2013-14) DCIT- 1(1), Dairyman Producer Company Limited बनाम/ 3rd Floor, F-28, Sanjay Complex Gwalior. Vs. Jayendra Ganj, Gwalior. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AACCD-7106-M (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Sukesh Kumar Jain – Ld. CIT-DR ��थ�कीओरसे/Respondent by : Sh. Sanjay Kumar, CA – Ld. AR सुनवाईकीतारीख/Date of Hearing : 21-02-2025 घोषणाकीतारीख /Date of Pronouncement : 23-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2013-14 arises out of an order passed by learned Commissioner of Income Tax (Appeals), NFAC, Delhi [CIT(A)] on 21-10-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s. 144B of the Act on 30-03-2022. The sole grievance of the revenue is deletion of addition of commission income of Rs.822.67 Lacs as made by Ld. AO in the assessment order. Having heard rival submissions, the appeal is disposed-off as under.
The case for this year was reopened on the ground that the assessee made purchases of Rs.15.35 Crores from M/s Nandan Dairy Products which was termed as sham entity by the investigation wing. It was alleged that this entity indulged in carrying out bogus sales. The assessee, in support of purchases, furnished ledger extracts, purchase bills and its bank statement. The assessee claimed to have purchased skimmed milk from that entity. The assessee made purchases of Rs.8.08 Crores from that entity and made payment of Rs.15.35 Crores. Such huge transactions were made within a span of two months. The assessee received funds from M/s Sterling Agro Industries Ltd. and the same were, in turn, transferred to M/s Nandan Dairy Products. The same was further transferred by M/s Nandan Dairy Products to M/s Sterling Agro Industries Ltd. The Ld. AO estimated alleged commission income on accommodation entry @3% and added the same to the income of the assessee.
During first appeal, the assessee duly summarized the bank credits which are extracted on Page Nos. 38 & 39 of the impugned order. The assessee received loans from M/s Acme Resources Ltd and M/s Vinay Real Estate which were considered to be accommodation entries. However, it was demonstrated that the assessee advanced loans to these entities and earned interest income. With respect to M/s Upma Dairy, it was shown that the amount was received as chilling charges which was offered for taxation. With respect to M/s Abhishek Milk, it was demonstrated that the assessee received loan from this entity. The assessee received advance from M/s Sai Milk Chilling Center which was subsequently returned by the assessee. It was similarly demonstrated that the assessee sold milk to M/s Sterling Agro Industries Ltd. In other words, the assessee successfully explained each of the bank credit. Concurring with the same, Ld. CIT(A) deleted the impugned addition against which the revenue is in further appeal before us.
The aforesaid findings in the Impugned order remain uncontroverted before us. It could be seen that learned AO estimated commission on total bank credits. However, the assessee successfully explained each of the bank credit and established the fact that all the transactions were duly been reported in the audited books of accounts and offered to taxation wherever the receipts were in the nature of income. Under these circumstances, no fault could be found in the adjudication of Ld. CIT(A).
The appeal stand dismissed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.