| The Tax Publishers2019 TaxPub(DT) 7091 (Ahd-Trib) INCOME TAX ACT, 1961
Section 69
As assessee had taken accommodation bills and supplied such bills by initiating bogus sales and earned some commission income on such transaction, it transpires that the assessee had given name, address, PAN, copy of return, copy of audit report in support of his claim of purchases. Hence, purchases could not be termed as unverifiable. Moreover, CIT(A) following his findings in Dineshkumar Chandmal Jain v. ITO [I.T.A. No. 2635 & 2636/Ahd/2009, assessment years 2005-06 and 2006-07, dated 5-4-2013], had directed the AO to compute the income from such accommodation entries @ 0.25%. Thus, the same was affirmed.
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Income from undisclosed sources - Addition under section 69 - Alleged unverifiable purchases -
AO noted that the notice issued to purchaser parties was returned unserved. Further, in view of the Report of the DDIT(Inv), wherein it had been stated that tha assessee was engaged in hawala transaction of providing accomodation entries. The AO had disallowed 25% of purchases. However, CIT(A) had restricted the addition to the extent of 0.25% of such unverifiable purchases. Held: It was an admitted fact that assessee had taken accommodation bills from erstwhile concerns and supplied such bills by initiating bogus sales and earned some commission income on such transaction. It transpires that the assessee had given name, address, PAN, copy of return, copy of audit report in support of his claim of purchases. Hence, purchases could not be termed as unverifiable. However, as the Gross Profit and NP disclosed by assessee was on higher side, same was not disturbed by CIT(A). However, CIT(A) following his findings in Dineshkumar Chandmal Jain v. ITO [I.T.A. No. 2635 & 2636/Ahd/2009, assessment years 2005-06 and 2006-07, dated 5-4-2013], had directed the AO to compute the income from such accommodation entries @ 0.25%. Thus, the decision of CIT(A) was confirmed.
REFERRED : Poona Electric Supply Company Ltd. v. CIT (1965) 57 ITR 521 (SC) : 1965 TaxPub(DT) 0316 (SC),Mayank Diamonds Pvt. Ltd. v. ITO [Tax Appeal No. 200 of 2003], dated 17-11-2014, M/s. Arman Fashion Pvt. Ltd. v. ITO [I.T.A. No. 2400 & 2407/Ahd, dated 10-5-2013 : 2013 TaxPub(DT) 2931 (Ahd-Trib), Manoj Aggarwal & Ors. v. Dy. CIT (2008) 113 ITD 377 (Del) : 2009 TaxPub(DT) 0672 (Del-Trib), Dineshkumar Chandmal Jain v. ITO [I.T.A. No. 2635 & 2636/Ahd/2009, assessment years 2005-06 & 2006-07, dated 5-4-2013]
FAVOUR : In assessee's favour
A.Y. : 2007-08
INCOME TAX ACT, 1961
Section 68
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