Manish Mansukhlal Maradiya Vs CIT (ITAT Mumbai)
Mumbai ITAT partly allowed the assessee’s appeal, holding that commission income from accommodation entries must be restricted to actual transactions and reasonable rate.
The Tribunal observed:
- AO estimated commission @ 5% on ₹4.60 crore, assuming involvement in 8 entities
- However, from the statement recorded u/s 131 (page 4–5):
- Assessee admitted involvement only in 3 entities
- Accepted accommodation entries of ₹1.20 crore only
- No material was brought to link assessee with remaining 5 entities
The ITAT held:
- Addition cannot be made on assumptions without evidence of involvement
- In similar cases, Tribunal consistently estimates commission between 0.2% to 1%
- Recent coordinate bench rulings support 0.5% as reasonable rate
Accordingly:
- AO directed to:
- Consider only ₹1.20 crore (actual admitted transactions)
- Apply 0.5% commission rate instead of 5%
Result:
- Addition substantially reduced
- Appeal partly allowed
The ruling reinforces:
In accommodation entry cases, both volume and rate must be backed by evidence-not arbitrary estimation.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. This appeal by assessee is directed against the order of Ld. CIT(A)- 51, Mumbai, dated 28.08.2025 for assessment year (A.Y.) 2011-12. The assessee has raised following grounds of appeal;
i. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in dismissing the appeal without actually going into the merits of the case.
ii. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding the Assessment Order passed under section 144 r. w. section 147 of the Act on the basis of unsigned Notice u/s 148 dated 28/03/2018 i.e. neither signed physically nor signed digitally by the Learned Assessing Officer in accordance with section 282A(1) of the Income Tax Ac., 1961 and therefore the impugned Assessment Order is liable to be quashed as invalid, wholly without jurisdiction and bad in law being completed on the basis of such invalid notice issued u/s 148 of the IT Act., 1961.
iii. Without prejudice to our other contentions, on the facts and circumstances of the case and in law, the Learned CIT(A) has failed to appreciate that since the Learned Assessing Officer has failed to provide to the Appellant. Copy of sanction received from the CIT for reopening the Assessment, the Asst. done under 144/147 is null and void.
iv. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming the addition of Rs.23,02,517/- computed at 5% of Rs.4,60,50,345/- being the sum of the accommodation entries provided by the Appellant.
2. Perusal of record shows that there is a delay of 4 days in filing the appeal before the Tribunal. The learned authorised representative ( ld. AR) of the assessee submits that delay is due to miscalculation of time period for filing appeal. The delay is not intentional and may be condoned. The Ld. Senior departmental representative (Sr. DR) for the revenue not opposed such plea. Considering the submission of both the parties, the delay in filing the appeal is condoned.
