Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (8) TMI 371 - AT - Income TaxBenefit of telescoping the commission income with the income declared in the return - assessee is only an accommodation entry provider - HELD THAT:- There is absolutely no dispute that assessee is only an accommodation entry provider and that all the entries reflected in the books are merely accommodation entries and not real transactions of the assessee - AO had rejected the book results and had resorted to determining the income of the assessee on an estimated basis by estimating commission @1%. Hence, the income returned by the assessee cannot be brought to tax. Similarly, the loss returned by the assessee cannot be allowed to be set off with estimated commission income. We find that assessee is seeking telescoping benefit of commission income with the income returned by the assessee because, the ld. AO had started the computation of income from the figure of “income / loss” as per the return of income. We hold that (a) in the A.Y.2008-09 to 2011-12, only estimated commission @1% on investments and sales to outside companies / parties should be considered and the same should be telescoped with the income returned by the assessee for the respective assessment years. (b) in the A.Y₹ 2012-13, 2013-14 & 2014-15 only estimated commission @1% and investments and sales to outside companies / parties should be considered without disturbing the set off as given by the ld. AO in his assessment order as this Tribunal does not have power of enhancement. The ground Nos. 5 & 6 are disposed of in the above mentioned terms. Addition of income @1% on the value of increase in investments - HELD THAT:- We deem it fit and appropriate that the aforesaid chart on investments filed by the assessee requires to be re-visited by the ld. AO and we deem it fit to remand this issue to the file of the ld. AO for denovo adjudication on this aspect of the issue in accordance with law. Accordingly, ground No.7 raised by the assessee for A.Y₹ 2012-13, 2013-14 and 2014-15 is allowed for statistical purposes. Addition u/s 68 - HELD THAT:- No finding has been given by the ld. AO with regard to the fact of receipt of monies by issuance of convertible equity warrants; its treatment given by assessee in the books; prevailing law on the impugned issue; whether the same was done in accordance with SEBI Guidelines as pointed out by the assessee in its annual report etc. We find that the ld. AO directly concludes the issue that the amount forfeited represents unaccounted income of the assessee. We find that the ld. AO had also not brought on record, under what provisions of the Act, the amount forfeited becomes income of the assessee. Hence, in the interest of justice and fair play, we deem it fit and appropriate, to remand this issue to the file of ld. AO for denovo adjudication in accordance with law. Since, the entire issue is sent back to the file of the ld. AO for denovo adjudication in accordance with law, the reliance placed on the decision in the case of Alag Securities [2020 (6) TMI 304 - BOMBAY HIGH COURT] would be premature at this stage. The assessee is at liberty to quote the said decision before the ld. AO while adjudicating this issue in the denovo proceedings. The ld. AO is hereby directed to determine its applicability to the facts of the case. Appeals of the assessee for all the years are partly allowed for statistical purposes.
|