2015 (6) TMI 790 - AT - Income Tax

Computation of income - applying net rate of 2.24% on the gross receipts by CIT(A) - CIT(A) deleting the addition made on account of 4% commission on debit and credit entries regarding providing accommodation entries - CIT(A) deleting the addition made in respect of TDS amount claimed from M/s PACL India Ltd - Held that - In almost similar facts identical issues have been decided by the Tribunal in favour of the present assessee. In the present year, also in the case of the assessee, the Assessing Officer has made additions of ₹ 4,28,501/- and ₹ 16,99,945/- on account of TDS amount claimed from PACL India Ltd. and 4% commission on the credit entries in the bank account. Since, the issues raised in the grounds are covered by earlier decision of the Tribunal in the group case of the assessee as well as the recent order of the Tribunal for the similar assessment year 2008-09 we do not find infirmity in the first appellate order. In that case also the Tribunal has upheld the first appellate order on identical issues. Addition made by the AO on account of TDS treating the amount claimed from PACL India Ltd. and PGF India Ltd. as real income of the assessee deleted by the Ld. CIT(A) has been upheld. The Tribunal has also upheld the action of the 1st appellate authority in restricting the addition made on account of 4% commission on debit and credit entries regarding providing of accommodation entries to the said companies to 2.4% of the gross receipt shown in the profit and loss account from the above companies. - Decided against revenue,

Summary

Issues Involved:
- Dispute over computation of income by applying net rate on gross receipts
- Deletion of addition made on account of commission on debit and credit entries
- Deletion of addition made in respect of TDS amount claimed

Analysis:
1. Computation of Income: The appeal by the revenue challenged the CIT(A)'s direction to compute the assessee's income by applying a net rate on gross receipts. The AO had added amounts on account of TDS and commission. The CIT(A) considered the assessment order and submissions, concluding that the work done for a specific company was genuine. The CIT(A) directed the AO to disallow 2.24% of the gross receipts from that company, following similar precedents in other cases. The Tribunal found that the issues were covered by previous decisions in favor of the assessee group, upholding the CIT(A)'s decision to delete the additions made by the AO.

2. Commission on Debit and Credit Entries: The AO had added an amount as commission on debit and credit entries in the bank account, alleging they were accommodation entries. The CIT(A) reviewed the submissions and past orders of related group companies, determining that the addition could not be sustained. The AO was directed to delete the addition and disallow 2.24% of the gross receipts instead. The Tribunal upheld the CIT(A)'s decision, citing similar outcomes in previous cases involving the group companies.

3. TDS Amount Claimed: Another issue was the addition made in respect of the TDS amount claimed from a specific company. The CIT(A) analyzed the submissions and past orders, concluding that the income shown by the appellant was genuine. The Tribunal upheld the CIT(A)'s decision to delete the addition made by the AO, as it was found to be covered by earlier decisions and consistent with the treatment of similar cases.

In conclusion, the Tribunal dismissed the appeal by the revenue, upholding the CIT(A)'s order to delete the additions made by the AO and to disallow a percentage of the gross receipts instead. The decision was based on the findings that the income shown by the appellant was genuine and in line with precedents set in similar cases involving group companies.