Case Law Details
Arydeep Developers Pvt. Ltd.Vs ITO (ITAT Ahmedabad)
The issue under consideration is whether for assessee engaged in providing accommodation entries only commission amount to be added on estimation basis or entire amount of accommodation entry to be added?
ITAT states that the CIT(A) is unjustified in treating the entire contract receipt as a taxable income of the assessee without disproving the material fact that assessee was indulged in facilitating accommodation entries. The assessee has not carried out any development work for the PACL Ltd. and provided accommodation entries to PACL Ltd. and on similar basis accommodation entries were provided by the subcontractor to the assessee. The assessee has failed to furnish the description of the land and other details where the land development work was carried out and the subcontractors have also admitted in their statements and the affidavits they have only provided accommodation entries. In the light of the above facts and finding that assessee have not executed any work except providing accommodation entries, ITAT consider that looking to the meager income shown by the assessee it will be reasonable to estimate the commission income earned by the assessee @ 4% of contract price. Therefore, the appeal of the assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
This assessee’s appeal for A.Y. 2012-13, arises from order of the CIT(A)-1, Ahmedabad dated 27-02-2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
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