DCIT Vs Sh. Vinay Sharma (ITAT Delhi)
ITAT Delhi held that only the estimation profit element has to form subject matter of addition in case of bogus accommodation entries. Accordingly, CIT(A) order directing @2.5% on total bogus accommodation entry upheld.
Facts- Vide the present appeal, CIT(DR) vehemently argues that the Assessing Officer’s section 153A r.w.s. 144 assessment had rightly disallowed the assessee’s various claims inter alia including bogus purchases of Rs.6,32,86,276/-, negating cash credits of Rs.6,31,87,950/-, added unexplained cash credits of Rs.14,21,22,719/- as well as protective addition of Rs.9,76,050/-with last head of section 37(1) business expenses disallowance of Rs.3,87,142/-; respectively as against the CIT(A)’s lower appellate discussion directing him to restrict the same @ 2.5% thereof since representing accommodation entries provided to M/s. NKG Infrastructure Limited in the form of sales.
Conclusion- Held that we hardly see any reason to express our agreement with the learned Assessing Officer’s assessment findings treating all these bogus entries as liable to be added in entirety; be it credit side representing sales or debit side indicating purchases along with the other alleged business expenses. We wish to reiterate here at the cost of repetition that once this assessee as well as all the remaining taxpayers are found as bogus accommodation entries providers, all what will follow is that only the estimation profit element therein has to form subject matter of addition. We accordingly find merit in the learned CIT(A)’s action in principle directing the Assessing Officer to assess the assessee @ 2.5% on all these bogus accommodation entry transactions. The Revenue fails in its instant sole substantive ground.
