2018 (9) TMI 2008 - AT - Income Tax

Estimation of income - commission income of the assessee was estimated @4% on aggregate receipts reflected in the bank account of the assessee - CIT-A reduced it 0.15% of the aggregate value of the accommodation entries provided by failing to appreciate that the assessee, when accorded an opportunity to do so, failed in providing sufficient details about the margins it earned on providing accommodation entries - HELD THAT - We find that a view has already been taken by the Tribunal for AY 2009-10 2011-12 wherein the stand of Ld. CIT(A) has been upheld. The impugned order is common order for all the three AYs. Therefore, following the same, we dismiss the revenue s appeal.

Summary

Issues:
1. Appeal by revenue contesting the order of the Ld. Commissioner of Income-Tax (Appeals) reducing the estimation of income.
2. Assessment for AY 2010-11 framed by Ld. Deputy Commissioner of Income Tax, Central Circle-44, Mumbai.
3. Providing accommodation sales bill to M/s JIK Industries Private Limited and its associates.
4. Estimation of commission income at 4% leading to additions in the hands of the assessee.
5. Reduction of estimated rate to 0.15% by Ld. CIT(A).
6. Appeal by revenue against the order of Ld. CIT(A).
7. Tribunal's consideration of previous judgments for AY 2009-10 & 2011-12.
8. Dismissal of revenue's appeal based on previous Tribunal decisions.

Analysis:
1. The appeal by the revenue for AY 2010-11 contested the order of the Ld. Commissioner of Income-Tax (Appeals) dated 31/03/2016, specifically challenging the reduction of the estimation of income of the assessee related to providing accommodation entries. The revenue argued that the CIT(A) erred in reducing the estimation from 4% to 0.15% without sufficient details on the margins earned by the assessee. The appellant sought to set aside the CIT(A)'s order and restore that of the Assessing Officer.

2. The assessment for AY 2010-11 was conducted by the Ld. Deputy Commissioner of Income Tax, Central Circle-44, Mumbai, under sections 144/142(1) read with section 153C of the Income Tax Act, 1961. The income of the assessee was assessed at ?157.88 Lacs.

3. Following search operations on M/s JIK Industries Private Limited and its associates, it was discovered that the assessee provided accommodation sales bills to the said entity. Subsequently, notices were issued under section 153C and 142(1) to the assessee, who failed to file a return of income or provide the required documents. The commission income of the assessee was estimated at 4% of aggregate receipts, leading to additions of ?157.88 Lacs in the assessee's hands.

4. The assessee appealed the assessment, resulting in a partial success before the Ld. CIT(A), who reduced the estimated rate from 4% to 0.15%. The revenue, aggrieved by this decision, further appealed to the Tribunal.

5. During the appeal hearing, the Ld. Authorized Representative for the Assessee highlighted that the CIT(A)'s order was common for AYs 2009-10 to 2011-12, and similar appeals by the revenue for other years were unsuccessful before the Tribunal. The revenue, represented by Ld. CIT DR, argued that the additions had not yet achieved finality.

6. After careful consideration, the Tribunal noted that similar stands taken by the CIT(A) for AYs 2009-10 & 2011-12 were upheld by the Tribunal in previous judgments. As the impugned order was common for all three AYs, the Tribunal dismissed the revenue's appeal based on consistency with previous decisions.

7. Consequently, the revenue's appeal was dismissed, and the order was pronounced in open court on 5th September 2018.