Manish Kantilal Kapadia Vs ACIT (ITAT Mumbai)
Search action u/s 132 on the “One World Group” & the residential premises of Assessee & her husband revealed that the textile concerns M/s RM Textiles, M/s RK Traders & M/s RK Impex had no real business activity. Statements u/s 132(4) of Shri Manish Kapadia, Shri Hemendra Kapadia & Shri Urvil Jani confirmed that all sales & purchases were only paper transactions without any stock, delivery, transportation or supporting documents, & were accommodation entries used for inflating turnover.
Assessee failed to file complete details such as party-wise purchases, sales, delivery challans, transport proofs, or any contemporaneous record. Books were therefore held incorrect & unreliable, & rightly rejected u/s 145(3).
AO estimated 5% commission on total turnover of ₹51.78 crore (Rekha) & ₹69.49 crore (Manish). CIT(A) held that entire turnover represented accommodation entries & applied 3% following Anil Kumar Vs ITO (ITAT Delhi).
Tribunal found no infirmity in rejection of books or in applying 3% commission, holding that no genuine trading was proved at any stage.
Interest income disclosed by Assessee was also correctly assessed as such.
On addition u/s 68 (Rekha: ₹2.75 lakh; Manish: ₹53.28 lakh), Assessee claimed it was a loan from husband credited prior to 01.04.2013; however, no bank statements or corroborating evidence were furnished. Tribunal restored this issue to AO for verification, directing Assessee to file complete evidence.
