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| The Tax Publishers2020 TaxPub(DT) 0586 (Del-Trib) INCOME TAX ACT, 1961
Section 68 Section 69A Section 69B
As assessee did not discharge burden of proof before lower authorities regarding allegation of providing accommodation entries, estimating the income at the rate of 1% of turnover by CIT(A) presuming that the assessee was engaged in providing only acommodation entries against commission, was not justified, as such, issue was therefore, remitted back to CIT(A).
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Income from undisclosed sources - Addition under section 68 - Burden of proof on alleged accommodation entries provided by assessee -
AO made addition for unexplained cash deposited in bank, unexplained advances to Akariti International Inc. and unexplained investment in shares and assessed the total income. In absence of any supporting evidence, it was considered that the cash deposited in bank accounts belongs to the assessee and it was the income of the assessee earned during the year from its undisclosed sources of income which was not declared in its return of income, therefore, same was added back in the taxable income of the assessee under section 68. Further, on the basis of information from DDIT the alleged amount involved in accommodation entries was also added to total income as undisclosed income. CIT(A) estimated 1% of the turnover as commission income on accommodation entries.Held: Though, the CIT(A) had relied on the statement of persons before the Investigation Wing but the assessee had not produced any evidences before the CIT(A) or before the AO to corroborate those statements that the assessee-company was engaged in providing only accommodation entries. The assessee-company had not provided any affidavits from the beneficiary companies to support its claim of being engaged in providing accommodation entries. The primary onus under section 68 is on the assessee to discharge and explain the nature and source of the entries in books of account. Estimating the income at the rate of 1% of turnover presuming that the assessee was engaged in providing only accommodation entries against commission by the CIT(A) was not justified. This issue was remitted back to the CIT(A) for deciding afresh after verification of documentary evidence, if any, which shall be produced by the assessee to substantiate its claim that it had rotated money of the beneficiaries and provided accommodation entries to the beneficiaries against certain commission only.
REFERRED :
FAVOUR : Matter remanded.
A.Y. : 2003-04
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