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TMI Blog2019 (11) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... y provider wherein the assessee therein had requested for adoption of peak credit theory in a situation where he could not explain the source of various deposits made in the bank account. In that context, the Hon ble Delhi High Court rejected the peak credit theory and directed to tax the total deposits as unexplained cash credit u/s.68 of the Act. We hold that such decision is factually distinguishable with the instant case. It is not in dispute that in the instant case, the Director of the assessee company had indeed given statement before the Maharashtra Sales Tax authorities during the course of sales tax search and had also categorically stated that it is only engaged in providing accommodation entries and no actual purchase and sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25/09/2009 declaring total income of ₹ 14,45,050/- under normal provisions of the Act and ₹ 14,33,547/- u/s.115JB of the Act. This return was processed u/s.143(1) of the Act. Later the assessment was sought to be reopened by issuance of notice u/s.148 of the Act. In the re-assessment proceedings, the ld. AO observed that the Sales Tax authorities, Maharashtra had conducted search operation in the case of assessee company and other group concerns wherein Shri Abhishek Morarka, Director of assessee company had given a statement on 06/01/2010 u/s.14 of the Maharashtra Value Added Tax Act, 2002. In the said statement, the said Director had categorically stated that no purchase or sales activities were actually carried out by his co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al quantity of fabrics purchased or sold and its value alone were mentioned and other information like description of goods traded, place of delivery and other requisite details were not provided therein. None of the parties had even filed copies of transport receipts, octroi receipts, warehousing receipts etc., In these peculiar facts and circumstances, the ld. AO had no other option but to reject the books of accounts of the assessee and the book results of the assessee company u/s.145(3) and also considering the behaviour of the assessee in the past as well as in subsequent years and also by giving due credence to the statement recorded by the Maharashtra Sales Tax Authorities wherein it had been categorically stated that the assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dation entry provider in the facts and circumstances of the instant case. For this purpose, the ld. AO had also placed reliance on the behavior of the assessee in the past as well as in the subsequent years as narrated hereinabove. We also find that the ld. CIT(A) for the A.Yrs 2006-07 and 2007-08 vide its order dated 25/01/2017 had recorded a categorical finding that assessee is indeed an accommodation entry provider and had processed to estimate net profit i.e. commission income at 0.15% of the total turnover as against 1% adopted by the ld. AO. Since a categorical finding is recorded by the ld. CIT(A) in assessee s own case in earlier years that assessee is merely an accommodation entry provider and that situation had admittedly not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be taxed ultimately is only the real income of the assessee company. Considering the totality of facts and circumstances of the instant case and considering the behavior of the assessee in earlier and subsequent years which had also been approved by the ld. CIT(A) in certain years, we hold that commission income alone could be assessed as the real income of the assessee and not the value of transactions. We also find that under exactly similar circumstances, this Tribunal in the case of City base Multitrade Pvt. Ltd., vs. ITO in ITA No.3374/mum/2016 and 4131/Mum/2016 dated 21/10/2016 had treated the assessee to be an accommodation entry provider and only 0.10% profit on the entire turnover was sought to be added as income of that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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