INCOME TAX ACT, 1961

Section 69

Income from undisclosed sources - Addition under section 69 - Commission income for providing accommodation entries -

Assessee was a proprietor of two proprietary concerns. AO received information regarding deposit of certain amount in bank account of the assessee during the year. Assessee accepted the fact of deposit of cash in his bank account, however, he claimed that he did not carry out any transaction of purchase or sale but provided bogus accommodation entries to various persons, who deposited cash in his bank account. Further, the assessee also accepted the income on account of commission for providing those accommodation entries. Accordingly, the AO made addition @ 10% of the total deposit, which was further confirmed by CIT(A). Aggrieved, assessee was in appeal. Held: Assessee had not disputed the fact of deposit of alleged amount in his bank account. Further, the assessee was also having two proprietorship concerns from where the assessee admitted to have issued bills regarding bogus accommodation entries of sale. Revenue also accepted the said explanation of the assessee that the amount deposited in the bank account of the assessee was on account of bogus accommodation sale entries provided by the assessee to various parties and the assessee earned only commission income on such deposits. Therefore, the AO as well as the CIT (A) was justified in considering 10% of the total cash deposits as commission income of the assessee and in absence of any contrary material, the order of the CIT (A) was upheld.

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2011-12

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