The Tax Publishers2021 TaxPub(DT) 0563 (Mum-Trib)

INCOME TAX ACT, 1961

Section 68

Where perusal of various Tribunal and High Court orders and more so in the case of certain sister concerns of assessee which was also covered as an offshoot of the same search operation of JIK, as in the case of assessee herein, only commission income @0.15% could be added in the hands of the assessee on the total accommodation entries provided by it on the total credits available in the bank account being the accommodation entries for the respective assessment years, accordingly, ground raised by assessee was partly allowed.

Income from undisclosed source - Addition under section 68 - Unexplained cash credit -

Assessee was issued notice under section 153C as an offshoot of the said search action. Assessee company had transactions with JIK and Mr. J had mentioned in his statement that, he being an accommodation entry provider, had resorted to issue various bogus bills to various parties through his various entities and one such entity was assessee. It was not in dispute that assessee-company was engaged in the business of providing accommodation entries. There were credits in the bank account of the assessee company, on which only commission income @4% was originally added by AO in assessment framed under section 153C. AO accordingly had added the entire sum credited in the bank account as unexplained cash credit under section 68 in the hands of assessee company, which was upheld by CIT(A). Held: From the perusal of various Tribunal and High Court orders and more so in the case of certain sister concerns of the assessee which was also covered as an offshoot of the same search operation of JIK, as in case of assessee herein, only commission income @0.15% could be added in the hands of assessee on the total accommodation entries provided by it on the total credits available in bank account being the accommodation entries for respective assessment years. Accordingly, ground raised by assessee was partly allowed.

Followed:Pr. CIT v. Alag Securities Pvt. Ltd. (Formerly known as Mahasagar Securities and Richmond Securities Pvt. Ltd.) ITA No.1512 of 2017 dated 12-6-2020 : 2020 TaxPub(DT) 2493 (Bom-HC), Pr. CIT v. Goldstar Finvest Pvt. Ltd. [ITA No.1729 of 2016 dated 1-4-2019], Pr. CIT v. Mihir Agencies Pvt. Ltd. [ITA Nos. 71,74,94,100,119 and 133 of 2017 dated 25-3-2019], Khyati Sales Agency Pvt. Ltd. v. Dy. CIT [M.A. Nos.22 to 25/M/2020 [Arising out of ITA Nos. 7105/Mum/2017, 7106/M/2017, 7107/M/2017 & 7108/M/2017), dt. 24-7-2020], Khyati Sales Agency Pvt. Ltd. v. Dy. CIT 2019 TaxPub(DT) 4060 (Mum-Trib) and Dy. CIT v. Chaitali Sales Agency Private Limited ITA No.4909/Mum/2016 for assessment year 2010-11 dated 5-9-2018.

REFERRED :

FAVOUR : Partly in assessee's favour .

A.Y. : 2009-10



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