2017 (12) TMI 1861 - AT - Income Tax

Accommodation entries estimation - Estimation @0.15% of the accommodation entries against which 50% expenses were allowable to the assessee - HELD THAT - Upon perusal of Tribunal s order for various years as placed on record we find that the Tribunal in the case of the assessee as well as his associated concerns has estimated the additions @0.15% of the accommodation entries and the same rate have been adopted by the lower authorities. The assessee has claimed expenditure of Rs.59, 334/- which has been allowed to the extent of 20% by Ld. CIT(A). Since the Tribunal has allowed expenses to the extent of 50% taking the same stand we hold that the assessee shall be eligible for expenses to the extent of 50%.

Summary

Issues:
1. Appeal against order of first appellate authority for AY 2003-04 to 2005-06.
2. Confirmation of certain additions.
3. Withdrawal of appeals for AY 2005-06 & 2004-05.
4. Contesting order of CIT(A) for AY 2003-04.
5. Estimated additions against accommodation entries.
6. Assessment framed by AO u/s 143(3) read with Section 153C.
7. Estimation of additions @0.15% of accommodation entries.
8. Allowability of expenses to the assessee.
9. Tribunal's decision on expenses.
10. Dismissal and partial allowance of appeals.

Analysis:
The Appellate Tribunal ITAT Mumbai addressed appeals by the assessee against the order of the first appellate authority for Assessment Year (AY) 2003-04 to 2005-06 concerning the confirmation of certain additions. The appellant expressed willingness to withdraw appeals for AY 2005-06 & 2004-05 as adequate relief had been granted in other appeals, which were dismissed with no objection from the Ld. DR.

For the remaining appeal for AY 2003-04, contesting the CIT(A)'s order, the matter involved estimated additions against accommodation entries. The assessment for the AY in question was conducted by the Assistant Commissioner of Income Tax (OSD-1) Central Range-7, Mumbai. The appellant highlighted that previous Tribunal orders favored the assessee, allowing expenses to the extent of 50% against the estimated additions of 0.15%, a fact not contested by the Ld. DR.

Upon reviewing the contentions and evidence, the Tribunal noted that previous decisions had estimated additions at 0.15% of accommodation entries for the assessee and associated concerns. The lower authorities had also adopted this rate. The appellant claimed expenses of Rs.59,334, of which the CIT(A) allowed 20%. Following the Tribunal's precedent of allowing expenses to the extent of 50%, the appellant was deemed eligible for expenses amounting to Rs.29,667.

Consequently, appeals for AY 2005-06 & 2004-05 were dismissed, while the appeal for AY 2003-04 was partly allowed. The order was pronounced on 13th December 2017 by Shri Manoj Kumar Aggarwal, AM.