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2019 (11) TMI 458

..... 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 dep .....

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..... (in short the ld. CIT) was justified in invoking revisionary jurisdiction u/s.263 of the Act in the facts and circumstances of the case. 3. We have heard rival submissions and perused the materials available on record. We find that return of income for the A.Y.2009-10 was filed by the assessee company on 25/09/2009 declaring total income of ₹ 14,45,050/- under normal provisions of the Act and ₹ 14,33,547/- u/s.115JB of the Act. This return was processed u/s.143(1) of the Act. Later the assessment was sought to be reopened by issuance of notice u/s.148 of the Act. In the re-assessment proceedings, the ld. AO observed that the Sales Tax authorities, Maharashtra had conducted search operation in the case of assessee company and oth .....

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..... ion u/s.133(6) of the Act from various suppliers and customers as detailed by the assessee, which got returned unserved by the postal authorities. The ld. AO also observed that even in the case of certain documents filed by the assessee such as tax invoice cum delivery challan, the total quantity of fabrics purchased or sold and its value alone were mentioned and other information like description of goods traded, place of delivery and other requisite details were not provided therein. None of the parties had even filed copies of transport receipts, octroi receipts, warehousing receipts etc., In these peculiar facts and circumstances, the ld. AO had no other option but to reject the books of accounts of the assessee and the book results of .....

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..... ion of the issue relating to bogus purchases, thereby causing revenue loss to the department. 3.3. We find that the ld. AO had made proper enquiry with regard to the status of the assessee to be an accommodation entry provider in the facts and circumstances of the instant case. For this purpose, the ld. AO had also placed reliance on the behavior of the assessee in the past as well as in the subsequent years as narrated hereinabove. We also find that the ld. 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 .....

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..... d 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. We also find that under exactly similar circumstances, this Tribunal in the case of City base Multitrade Pvt. Ltd., vs. ITO in ITA .....

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