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2019 (11) TMI 458

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..... rovider 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 sal .....

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..... ct. 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 other group concerns wherein Shri Abhishek Morarka, Director of assessee company had given a statement on 06/01/2010 u/s.14 of the Maharashtra Value Added Tax Act, 2002. In the said statement, the said Director had categorically stated that no purchase or sales activities were actually carried out by his concern and that they are merely accommodation entries provided to various persons. The ld. AO based on the conduct of the assessee in th .....

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..... 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 the assessee company u/s.145(3) and also considering the behaviour of the assessee in the past as well as in subsequent years and also by giving due credence to the statement recorded by the Maharashtra Sales Tax Authorities wherein it had been categorically stated that the assessee company was only involved in providing accommodation entries in the form of receiving and supplying bogus bills for purchase and sales, proceeded to treat t .....

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..... 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 ld. AO. Since a categorical finding is recorded by the ld. CIT(A) in assessee s own case in earlier years that assessee is merely an accommodation entry provider and that situation had admittedly not been changed during the year under consideration before us, we hold that there is absolutely no need for the ld. CIT to take a divergent stand by directing the ld. AO to examine the veracity of bogus purchases alone. We also find that the .....

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..... lso 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 No.3374/mum/2016 and 4131/Mum/2016 dated 21/10/2016 had treated the assessee to be an accommodation entry provider and only 0.10% profit on the entire turnover was sought to be added as income of that assessee. Hence, we find that the version of the ld. AO had also been subsequently approved by this Tribunal in another case falling under exactly similar circumstances as stated supra. In these circumstances, it cannot be said that the or .....

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