Suresh Kumar Vs ACIT (ITAT Delhi)
Bogus Sales/Accommodation Entries- ITAT Confirms 5% Estimation for Entry Operator: Both Assessee & Revenue Appeals Dismissed
Tribunal decided four cross appeals involving additions on account of alleged bogus sales & accommodation entry business. AO had treated entire bank credits as unexplained & assessed income at Rs.8.14 crore for AY 2012-13 as against returned income of Rs.4.41 lakh, based on Investigation Wing findings that
Assessee was engaged in providing accommodation entries without any actual delivery of goods. CIT(A)/NFAC examined past assessment history & noted that for AY 2011-12, on identical facts, AO had estimated income @8% of credit entries, which CIT(A) later reduced to 5%. CIT(A) held that Assessee deposited Rs.19.43 crore as bank credits against “turnover” of Rs.11.36 crore, operated dummy entities & failed to substantiate genuineness of claimed low commission. Applying consistency & nature of business, CIT(A) estimated income @5% of undisclosed turnover instead of taxing entire credits. Both Assessee & Revenue appealed—Revenue sought taxation of full credits while Assessee claimed 5% was excessive.
Tribunal held that CIT(A) had given a well-reasoned finding based on past accepted pattern, nature of entry-providing business & absence of evidence from Assessee’s side. Tribunal agreed that estimation @5% was fair & reasonable. For AY 2013-14, identical facts existed; therefore decision for AY 2012-13 applied mutatis mutandis. Consequently, all four appeals—Assessee’s & Revenue’s—were dismissed.
