DCIT CENTRAL CIRCLE 5, DELHI vs. VINOD KUMAR, DELHI

Heard rival submissions, perused the orders of the authorities below. The Assessing Officer completed the assessment u/s 144/147 1 of the Act dated 18.12.2019 bringing to tax Rs.4,19,09,065/- being 10% of Rs.41,90,90,650/- as commission income holding that the assessee was one of the beneficiaries of accommodation entries from various parties referred to in the assessment order in the absence of any details, explanations furnished by the assessee before the Assessing Officer.

On appeal the Ld. CIT(Appeals) restricted the addition to Rs.83,818/- after considering the submissions and evidences furnished by the assessee observing as under:

I have considered facts of the case as well as written submissions of the appellant. It is observed that income of the appellant has been assessed by accepting ‘commission income @Rs.2,000/- per crore’ as admitted by appellant in his statement (for assessment orders u/s 153A for AY 2013-14, 2016-17, 2017-18, and 2018-19). It is observed that there is no material change in facts and circumstances in the present case. Accordingly, commission income of appellant for AY 2012-13 is restricted @ Rs.2,000/- per crore as considered by AO during assessment proceedings for AY 2013-14 and 2016-17 to 2018-19.

The Assessing Officer has held that appellant has given accommodation entry amounting to Rs.41,90,90,650/- during the year under consideration. The income earned by the appellant on account of accommodation entries given @Rs.2,000/- per crore comes to Rs.83,818/-. The addition made by the Assessing Officer is restricted Rs.83,818/-. Accordingly, the appellant get relief of Rs.4,18,25,247/-.

In view of the above discussion, the appeal of the appellant in respect of Ground No.7 is partly allowed.”

As could be seen from the above, the Ld. CIT(A) restricted the commission income to Rs.83,818/- as against Rs.4,19,09,065/- observing that in the assessments made u/s 153A of the Act in the case of the assessee for assessment years 2013-14 to 2018-19 the commission income was assessed @ 2,000 per crore. In the circumstances, since in the assessments made u/s 153A the commission income was assessed at 2,000 per crore, we see no reason not to adopt the same percentage for the assessment year under consideration and thus, we hold that the Ld. CIT(A) has rightly adopted the said percentage. Hence, we sustain the order of the Ld. CIT(A) and reject the grounds raised by the Revenue.

In the result, appeal of the Revenue is dismissed.