PCIT Vs Third Generation Traders Pvt. Ltd (Delhi High Court)
Delhi High Court held that addition towards unexplained credits against companies used as a conduit for routing accommodation entries is not justified since they are not ultimate beneficiaries. Accordingly, appeal of revenue dismissed.
Facts- The respondent [Assessee] filed its income tax returns for the respective assessment years declaring the income as noted above. On 17.12.2015, search and seizure operations were conducted at the residential premises of Sh. Kaushal Kumar. It is stated that during the course of the search, incriminating papers and documents were found pertaining to the Assessee. Based on the same, on 29.12.2017, the Assessing Officer [AO] of the searched person recorded his satisfaction that the documents found during the course of the search belonged to or contained information relating to the Assessee. Pursuant to the same, the AO issued a notice dated 30.12.2017 u/s. 153C of the Act.
AO an addition of the credits of the amounts received by the Assessee during the previous years relevant to AYs 2012-13 to AY 2017-18 u/s. 68 of the Act on protective basis and also an addition in regard to commission income on substantive basis. The AO concluded that the Assessee was used as a conduit for routing accommodation entries.
