BLUERAY TRADING PVT. LIMITED,THANE V. THE DY. CIT, CENTRAL CIRCLE-1(1), AHMEDABAD

ITA 496/AHD/2024

AI Insights

The case involves Blueray Trading Pvt. Ltd., which appealed against the order of the CIT(A) confirming the addition of Rs. 33,50,000 to its income as commission expenses related to alleged accommodation entries. The original assessment included a much larger amount of Rs. 6.70 crores, which was later deleted. The Principal CIT had earlier set aside the reassessment order, directing a fresh assessment that included the commission expenses. The Tribunal's decision to allow the appeal was influenced by its previous rulings on related issues, emphasizing the need for a holistic reconsideration of all evidence and statements involved.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793030 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 19-03-2024
• Other Referred Cases: Blueray Trading Pvt Ltd Vs. PCIT (Central) for the AY 2010-11, ITA No. 2212/Ahd/2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: MEHUL K. PATEL
• Keywords: Accommodation entries; Revision of order; Bogus
• Section: 148; 143(3); 263; 68; 69C; 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No. 496/Ahd/2024 (Assessment Year: 2010-11) Blueray Trading Pvt. Ltd., 306, Snehadisha, Parawadi, Highway Road, Thane-400601 [PAN : AAFCM 8859 D] Vs. The Dy. Commissioner of Income-tax, Central Circle-1(1), Ahmedabad (Appellant) .. (Respondent) Appellant by : Shri Mehul K. Patel, Advocate Respondent by: Shri Abhijit, Sr. DR Date of Hearing 16.09.2025 Date of Pronouncement 25.09.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- Delay Condoned. This appeal has been filed by the Assessee against the order dated 30.08.2023 passed by the Ld. Commissioner of Income-Tax (Appeals)-11, Ahmedabad (‘Ld. CIT(A)’ in short), under Section 250 of the Income-tax Act, 1961 (‘the Act’ in short), relating to the Assessment Year 2010-11. 2. The assessee has raised following grounds:- “1. The Ld. AO erred in law and on facts in making addition of Rs. 33,50,000/- treating the same as commission expenses paid by the Appellant for availing the alleged accommodation entries to the tune of Rs.6.70 crores. 2. The Ld. AO erred in law and on facts in not appreciating that the subject matter of paying the alleged commission expenses have been deleted by the CIT(A) and hence, the same could not be added to the total income of the Appellant. 3. The Ld. AO erred in law and on facts in not appreciating that the order of the AO got merged with the order of the CIT(A) and hence, no addition could be made on account of alleged commission expenses paid by the Appellant. Printed from counselvise.com ITA No. 496/Ahd/2024 Blueray Trading Pvt Ltd Vs. DCIT Asst. Year : 2010-11 - 2– 4 The Ld. AO erred in law in not appreciating the judicial dictum that what cannot be done directly under the law, cannot be done indirectly by taking recourse to any other section of the Act.” 3. The brief facts of the case are that the assessee had originally filed its return of income u/s 139 of the Act on 29.09.2010, declaring a total income of Rs.1,03,630/-. The case was reopened by issuing notice u/s 148 on 29.03.2017, and reassessment was completed u/s 143(3) r.w.s. 147 on 27.11.2017, wherein an addition of Rs.6,70,00,000/- was made under section 68 of the Act, on account of share capital and premium received from companies alleged to be controlled by one Shri Shirish Chandrakant Shah, an accommodation entry provider. Subsequently, the Pri. CIT (Central), Ahmedabad passed an order u/s 263 of the Act on 30.03.2021, setting aside the reassessment order on the ground that the Assessing Officer failed to examine commission expenses allegedly paid for availing the accommodation entries. The Pr. CIT directed the Assessing Officer to examine and add commission expenses @5% of Rs.6,70,00,000/-, i.e. Rs.33,50,000/-, not disclosed by the assessee. Pursuant to the 263 order, the Assessing Officer passed a fresh assessment order u/s 143(3) r.w.s. 263 dated 20.12.2021, making the impugned addition of Rs.33,50,000/-. 4. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A), relying on subsequent findings in AYs 2013- 14 and 2015-16 and the conduct of the assessee in availing accommodation entries, confirmed the addition of Rs.33,50,000/-. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 6. The Ld. AR submitted that the addition of Rs.33.50 lakhs under Section 69C is based solely on estimated commission, without any evidence of actual payment by the assessee. The Ld. AR also submitted that there is no entry in the books, no cash flow, and no corroborative material to support the allegation. The Ld. AR argued that estimating commission at 5% without any transactional evidence is Printed from counselvise.com ITA No. 496/Ahd/2024 Blueray Trading Pvt Ltd Vs. DCIT Asst. Year : 2010-11 - 3– arbitrary and not stainable u/s 69C of the Act and no enquiry or investigation was done to establish incurrence of such expenditure. 7. On the other hand, the Ld. DR relied upon the orders of the authorities below and submitted that the addition of Rs.33.50 lakhs is justified based on the statement of Shri Shirish Shah regarding commission payments, the assessee’s history of receiving accommodation entries, and failure to provide any evidence to the contrary. 8. We have heard the rival contentions and perused the material available on record. We find that the matter has been a subject matter of adjudication by this Tribunal in ITA No. 219/Ahd/2021 in Blueray Trading Pvt Ltd. Vs. PCIT (Central) for the AY 2010-11 with regard to the same issue. The relevant part of the order of the Tribunal is as under:- “6. During the course of 263 proceedings, the assessee submitted that the impugned additions made by the Assessing Officer amounting to Rs. 6.70 crores as bogus / accommodation entries have been deleted by Ld. CIT(A) in the appellate order. Accordingly, it was submitted that since the subject matter of alleged accommodation entries were considered by both the Assessing Officer and Ld. CIT(A) and the assessment order made by the Assessing Officer got merged with the order of Ld. CIT(A), then the question of PCIT exercising revisional jurisdiction under Section 263 of the Act to once again examine the very same issue and disallow the corresponding alleged out of books expenses, does not arise at all. However, PCIT did not agree with the contention of the assessee that since Ld. CIT(A) has deleted the addition of Rs. 6.70 crores made by the Assessing Officer and therefore, the question of paying alleged out of books commission expenses on accommodation entries does not arise in the instant case. The PCIT was of the view that the Ld. CIT(A) while passing the appellate order and allowing the relief to the assessee has not appreciated the nature of transaction of share capital received by the assessee from paper / shell companies by way of accommodation entries and did not comprehend the situation in light of the statements of Shri Shirish Chandrakant Shah and Directors of the companies from whom the share capital was claimed to have been received. Further, the PCIT noted that since the Department has filed appeal before the Tribunal in the matter, which is pending adjudication therefore, there is no restriction on the PCIT in initiating 263 proceedings, in the instant facts. Accordingly, the PCIT set-aside the assessment order as being erroneous, in so far as prejudicial to the interest of the Revenue. Printed from counselvise.com ITA No. 496/Ahd/2024 Blueray Trading Pvt Ltd Vs. DCIT Asst. Year : 2010-11 - 4– …… …… 14. Accordingly, in light of our observations in the preceding paragraphs and in view of the assessee’s set of facts, we are of the considered view that this is not a fit case for initiating proceedings under Section 263 of the Act since assessment order in the instant facts merged with the order of Ld. Commissioner (Appeals) and accordingly, the PCIT has erred in facts and in law in initiating proceedings under Section 263 of the Act.” 9. Further, we also find that in ITA No. 2212/Ahd/2018, the issue of accommodation entry of the same Rs.6.70 crores has been adjudicated by the Tribunal, wherein the Tribunal restored the matter to the Ld. CIT(A). The relevant part of the order is as under:- “19. The approach of the ld. CIT(A) in singularly dismissing each piece of evidence, we find, is totally incorrect, and we are of the view that the matter needs to be reconsidered by the ld. CIT(A) after giving a holistic consideration to tall the evidences and statements relied upon by the Assessing Officer for holding the share application and share premium received by the assessee during the year to be bogus accommodation entry. For the said purpose, we restore the issue back to the ld. CIT(A) to adjudicate it afresh. …. ” 10. Keeping in view both the orders of the Tribunal in the quantum proceedings as well as the 263 proceedings, we hold that the issue of commission would be a subject matter of proceedings before the Ld. CIT(A) as he/she deems fit. 11. In the result, the appeal of the assessee before us stands allowed. The order is pronounced in the open Court on 25.09.2025. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 25.09.2025 **btk Printed from counselvise.com ITA No. 496/Ahd/2024 Blueray Trading Pvt Ltd Vs. DCIT Asst. Year : 2010-11 - 5– आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, , , , अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation ….words processed by Hon’ble VP on his PC on 24.09.2025 2. Date on which the typed draft is placed before the Dictating Member …..24.09.2025 3. Other Member ….24.09.2025 4. Date on which the approved draft comes to the Sr.P.S./P.S …...2409.2025 5. Date on which the fair order is ed before the Dictating Member for pronouncement …...25.09.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S …...25.09.2025 7. Date on which the file goes to the Bench Clerk …...25.09.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "