Case Law Details
Arrow Manpower Services (P) Ltd. Vs ACIT (ITAT Delhi)
ITAT Delhi held that depreciation under section 32 of the Income Tax Act not available as the assessee is not carrying on any business activity.
Facts- The assessee filed its return of income for the AY 2013-14 on 02.12.2014 declaring the total income at Rs.1,48,380/-. The assessee pleaded before AO that it is carrying on business activity. But, no evidence whatsoever was furnished by the assessee before AO to justify the fact that the assessee was indeed carrying on any business. Accordingly, AO rejected the plea of the assessee that it is conducting any business. Further, AO proceeded to examine the bank statements of the assessee from which he found that there were total credits to the tune of Rs.20,42,44,469/- in Axis Bank and the same figure was represented in the debit side also during the year. Accordingly, AO concluded that since monies were credited in the bank account of the assessee and immediately thereafter, the same were paid to some parties, which goes to prove that the assessee is merely an entry operator doing transactions of receipt of monies and issuance of monies on behalf of third parties. No details of persons from whom monies were received and no details of persons to whom payments were made were furnished by the assessee.
Accordingly, AO concluded that the entire transactions reflected in the said bank statement are mere transactions carried out by the assessee in the capacity of an entry operator. Hence, he proceeded to charge only the commission income on those accommodation entries in the hands of the assessee. This commission income was estimated at 0.60% by the ld. AO and an addition of Rs.12,25,467/- was made in the assessment.
Conclusion- The assessee was not able to buttress his arguments by filing cogent documentary evidences even to prove that it is engaged in some business activity and that the credits and debits in the aforesaid bank account are business transactions. In these facts and circumstances, we do not deem it fit to interfere in the order of the ld. CIT(A) upholding the estimation of commission income @ 0.60% on total bank transactions. Accordingly, the addition of Rs.12,25,467/- made by the ld. AO is hereby upheld.
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