GENESIS DEVELOPERS AND HOLDINGS LIMITED,NEW DELHI V. ITO,WARD 12(1), NEW DELHI

ITA 3662/DEL/2023

AI Insights

The case involves M/s. Genesis Developers and Holdings Ltd., the appellant, contesting an addition of Rs.62.06 lakhs to their income, categorized as unexplained cash credits under section 68 of the Income-tax Act, 1961. This addition was based on information from a search and seizure operation related to accommodation entries through shell entities. The primary legal contention was the rate of commission applied to these entries, which the Tribunal found inconsistent with a similar case, leading to a reduction in the assessed rate from 2% to 0.5%. The Tribunal's decision was influenced by the need for judicial consistency and the lack of rebuttal from the Revenue side regarding the reduced rate in the connected case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315797 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Other Referred Cases: Mekaster Finlease Limited Vs. DCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: AMOL SINHA
• Keywords: Unexplained cash credit; Principle of natural justice; Search and seizure; Accommodation entries
• Section: 147; 143(3); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘B’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.3662/Del/2023 Assessment Year: 2012-13 M/s. Genesis Developers and Holdings Ltd., R-815, New Rajinder Nagar, North East Delhi, New Delhi Vs. Income Tax Officer, Ward-12(1), New Delhi PAN:AAACG2591H (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2012-13, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1056303801 (1), dated 20.09.2023 involving proceedings under section 147 r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Assessee by Sh. Amol Sinha, Adv. Sh. Ankit Kumar, Adv. Department by Sh. Rajesh Kumar Dhanesta, Sr. DR Ms. Neha Chaudhary, CIT(DR) Date of hearing 24.04.2025 Date of pronouncement 16.05.2025 ITA No.3662/Del/2023 2 | P a g e 2. Heard both the parties. Case files perused. 3. Learned counsel submits at the outset that the assessee does not wish to press its former three substantive grounds raising the legal/technical issues of validity of the impugned reopening u/s 147 and violation of principles of natural justice. Rejected in very terms. 4. Next comes the assessee’s fourth substantive ground challenging both the learned lower authorities’ action adding section 68 unexplained cash credits amounting to Rs.62.06 lakhs alleging the same as representing commission component of various accommodation entries totaling to Rs. 31,03,00,000/- in the relevant previous year, in the course of assessment framed on 20.12.2019 and upheld in the lower appellate discussion. 5. We next note with the able assistance coming from both the parties that the learned lower authorities had received an information/letter dated 18.03.2019 to the effect that a search and seizure operation had been carried out in Sh. Virendra Kumar Jain and Sh. Surendra Kumar Jain group of companies on 14.09.2010 unearthing alleged accommodation entries through various shell entities. And that it is on the basis of the said information and ITA No.3662/Del/2023 3 | P a g e seized materials that the impugned commission @ 2% has been assessed in the assessee’s hands resulting in addition of Rs.62.06 lakhs. 6. Faced with this situation, learned counsel’s sole substantive argument that the tribunal in the connected case ITA No. 953/Del/2020, Mekaster Finlease Limited Vs. DCIT decided on 06.02.2023, pertaining to the very search, has directed the Assessing Officer concerned to assess identical commission from accommodation entries @ 0.5% only. All these intervening developments have gone un-rebutted from the Revenue side. 7. That being the case, we hereby adopt judicial consistency and conclude that the assessment of the assessee’s above accommodation entries @ 0.5% only would be just and proper in the given facts and circumstances. Ordered accordingly. No other ground or argument has been pressed before us. 8. This assessee’s appeal is partly allowed in very terms. Order pronounced in the open court on 16th May, 2025 Sd/- Sd/- (MANISH AGARWAL) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 16th May, 2025. RK/- Copy forwarded to: 1. Appellant ITA No.3662/Del/2023 4 | P a g e 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "