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2019 (6) TMI 48 - AT - Income TaxRejection of books of accounts u/s 145 - Trading addition based on GP estimation - taxability of paper concern involved in bullion business and providing the accommodation entries - disallowance of salary expenses - HELD THAT:- CIT(A) has held one of the assessee’s concern to be a paper concern, however, going by the submission of the assessee, we find that he has no objection where even the second concern is held to be a paper concern. Therefore, in absence of any objection by the assessee, we proceed with the fact that the findings of th CIT(A) are equally applicable to both of the assessee’s concerns which are held to be paper concerns which are involved in providing the accommodation entries and are not involved in actual bullion business. Commission income which can be brought to tax in hands of the assessee in relation to its two paper concerns which are involved in providing the accommodation entries, it may be true that the margins in gemstones business may vary with that of the bullion business but the same cannot be a basis to hold that an entry provider in gemstones and an entry provider in bullion business is to be treated differently so far as determination of their commission income is concerned. No empirical data has been submitted to support the aforesaid contention and in absence thereof and given the fact that in both businesses, the role of the entry provider is largely similar in terms of providing accommodation entries in lieu of commission, we are unable to accept the aforesaid contention of the ld AR regarding scaling down or determining the commission income differently. In the instant case, if we look at the net income so determined by the AO after making trading addition and disallowance of salary expense, it comes to ₹ 66,31,966 which gives a net profit rate of 0.12% which is comparable to another case of the entry provider, Mahesh Khandelwal wherein the Co-ordinate Bench has upheld estimate of net profit @ 0.10%. Besides, there is other income of ₹ 127,776 which has to be brought to tax separately. No infirmity in the order of the lower authorities and the same are hereby confirmed and the grounds of appeal are accordingly dismissed.
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