Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 458 - AT - Income TaxRevision u/s 263 - estimation of profit - accommodation entry provider - CIT(A) for the A.Yrs 2006-07 and 2007-08 vide its order dated 25/01/2017 had recorded a categorical finding that assessee is indeed an accommodation entry provider and had processed to estimate net profit i.e. commission income at 0.15% of the total turnover as against 1% adopted by the ld. AO - HELD THAT:- We hold that assessee herein is an accommodation entry provider. We find that the Hon’ble Delhi High Court decision relied upon by the ld. CIT in the case of CIT vs. D.K.Garg [2017 (8) TMI 450 - DELHI HIGH COURT was in the case of an accommodation entry provider wherein the assessee therein had requested for adoption of peak credit theory in a situation where he could not explain the source of various deposits made in the bank account. In that context, the Hon’ble Delhi High Court rejected the peak credit theory and directed to tax the total deposits as unexplained cash credit u/s.68 of the Act. We hold that such decision is factually distinguishable with the instant case. It is not in dispute that in the instant case, the Director of the assessee company had indeed given statement before the Maharashtra Sales Tax authorities during the course of sales tax search and had also categorically stated that it is only engaged in providing accommodation entries and no actual purchase and sale activities were carried out by the assessee company. It is well settled that what is to be taxed ultimately is only the real income of the assessee company. Considering the totality of facts and circumstances of the instant case and considering the behavior of the assessee in earlier and subsequent years which had also been approved by the ld. CIT(A) in certain years, we hold that commission income alone could be assessed as the real income of the assessee and not the value of transactions. Appeal of the assessee is allowed.
|