INCOMETAX OFFICER, MUMBAI V. SHIRISH J BHATT, MUMBAI

ITA 2889/MUM/2025

AI Insights

The case involves two appeals by the revenue against the orders of the CIT(A) concerning the assessee, Shirish J Bhatt, for the assessment years 2010-11 and 2013-14. The primary issue in both appeals was the percentage of commission added to the total transactions deemed as accommodation entries. The revenue contested the CIT(A)'s decision to restrict the addition to 1.00% of the total transactions, advocating for a 2.00% addition based on similar cases. The Tribunal, referencing decisions from the Mumbai Tribunal in similar cases, modified the CIT(A)'s order to enhance the addition to 2.00%. The Tribunal also noted the absence of the assessee at the hearings despite multiple notices, leading to the decision being made based on the submissions of the Senior Departmental Representative and the materials on record.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775914 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 25-04-2025
• Other Referred Cases: ITO vs Kanubhai Purshotam Raval, ITO vs Amisha Sudhir Bhatt
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NAGNATH PASSALE
• Keywords: Unexplained cash credit; Rule of consistency; Tax effect; Bogus

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL“SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 2888/MUM/2025 (AY: 2010-11) ITA No. 2889/MUM/2025 (AY: 2013-14) (Physical hearing) ITO, Ward – 42(1)(5), Mumbai Room No. 745, Kautilya Bhawan, BKC, Bandra East, Mumbai – 400051. Vs Shirish J Bhatt BA 10 Kavita APTS II RD FNATAK WALA LANW, S.V. Road, Borivali West, Mumbai-400092. [PAN: ALGPB0489D] Appellant / Revenue Respondent / Assessee Assessee by None Revenue by Shri Nagnath Passale, Sr. DR Date of Institution 25.04.2025 Date of hearing 09.09.2025 Date of pronouncement 09.09.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JM: 1. These two appeals by revenue are directed against the separate orders of ld. CIT(A) dated 21.02.2025 & 14.02.2025 for A.Y. 2010-11 & 2013-14 respectively. In both the appeals, the revenue has raised similar ground of appeal except variation of additions on account of alleged commission payment. Therefore, both the appeals were clubbed and are decided by common order to avoid the conflicting decision. For appreciation of fact, appeal for A.Y. 2010-11 is treated as lead case. The revenue has raised following grounds of appeal: “1. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in restricting the addition of commission @ 1% of total transactions at Rs. 1,35,65,115/- representing accommodation entry, against the addition of commission @2% of total transaction at Rs. 1,35,65,115/- Printed from counselvise.com ITA Nos. 2888 & 2889/Mum/2025 Shirish J Bhatt 2 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has considered that while calculating commission on accommodation entry, the AO has duly worked out the commission on accommodation transactions (@1% to 4% as per the statement recorded u/s 132(4) of the Act, of Shri VipulVidhur Bhatt. 3. On the facts and in the circumstances of the case, the Hon'ble ITAT is requested to entertain this appeal, though, the tax effect is below the monetary limit prescribed in the CBDT Circular No.5/2024 Dt. 15.03.2024 but the case falls within the exceptions laid down in clause (h) of Para 3.1 of the Board's Circular No.5/2024 Dt. 15.03.2024. 4. The appellant craves leave to amend or alter or add a new ground which may be necessary.\" 2. None, appeared on behalf of the assessee despite sending repeated notices on the address given on Form 36. The learned Senior Departmental Representative (ld. Sr. DR) for the revenue was also directed to serve the assessee through field staff/inspector. The ld. Sr. DR has furnished report of inspector that assessee is not available on the given address. However, the assessee were served through email as per latest email available in return of income for A.Y. 2023-24. On perusal of Form 35, copy of which is filed by assessing officer/revenue while filing first appellate is also bear the same email address, which is mentioned on report of Inspector, who has served the notice of present appeal i.e. [e-mail]. Notice is also sent on email address provided on Form 36 i.e. at [e-mail]. In the above circumstances, I decided to hear the submission of ld. Sr. DR for the revenue and to decide the appeal on the basis of material available on record. 3. The ld. Sr. DR for the revenue submits that a search action was carried out in case of Vipul Vidhur Bhatt who was a leading entry provider in Mumbai. Printed from counselvise.com ITA Nos. 2888 & 2889/Mum/2025 Shirish J Bhatt 3 His statement was recorded under section 132(4) of Income Tax Act (Act). Vipul Vidhur Bhatt provided accommodation entry to various beneficiaries on commission through various benami entities/concerns. On the basis of information gathered in the search action and subsequent investigation, the assessee was found to be associated of Vipul Vidhur Bhatt and also provided entry to various persons. The assessing officer found that assessee is one of the bogus entities out of 347 entities. The assessing officer accordingly made addition of unexplained cash credit as well as unexplained money aggregating of Rs. 5,12,560/-. The ld. CIT(A) restricted the addition to the extent of 1.00% of accommodation entry on debit side. The ld. Sr. DR for the revenue submits that in a similar case, Tribunal has directed/enhanced similar entry to 2.00 to 5.00% on debit transaction. To support his submission, the ld. Sr. DR relied upon the decision of Mumbai Tribunal in ITO vs Kanubhai PurshotamRaval (ITA Nos. 3052 & 3053/Mum/2023 dated 10.05.2024. In other decision, SMC Bench enhanced the similar addition on commission based to 5.00% in the case of ITO vs Amisha Sudhir Bhatt in ITA No. 6314 & 6313/Mum/2024 dated 10.06.2025. 4. I have considered the submission of ld. Sr. DR for the revenue and perused the order of lower authorities carefully. On perusal of assessment order, I find that assessing officer in para 6 of assessment order has accepted that assessee is one person who was also used by Vipul Vidhur Bhatt out of 347 bogus entities for providing accommodation entry. The assessing officer added entire amount of debit entry. The ld. CIT(A) restricted the Printed from counselvise.com ITA Nos. 2888 & 2889/Mum/2025 Shirish J Bhatt 4 addition to the extent of 1.00% of the impugned debit entry. The ld. CIT(A) relied on the decision of ld. CIT(A) in case of Jay Vidhya M. Bhatt dated 28.11.2022 wherein similar addition was restricted to 1.00% of the accommodation entry. I find that division bench of Mumbai Tribunal in ITO vs Kanubhai Purshotam Raval (supra) in case of similar entry provider who was also associate/conduit of Vipul Vidhur Bhatt restricted/enhanced the addition to 2.00% of debit entry. Therefore, respectfully following the decision of division bench, the order of ld. CIT(A) is modified and the ld. AO is directed to treat 2.00% of debit entry as income of assessee. Thereby, the appeal of revenue is partly allowed. ITA No. 2889/Mum/2025 (A.Y. 2013-14) 5. In appeal for A.Y. 2013-14, the revenue has raised similar ground of appeal has raised in appeal for A.Y. 2010-11 which have partly allowed, thus, following the principle of consistency, the appeal for A.Y. 2013-14 is also allowed with similar direction. 6. In the result, both the appeals of the revenue are partly allowed. Order was pronounced in the open Court on 09 /09/2025. Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated: 09/09/2025 Biswajit Printed from counselvise.com ITA Nos. 2888 & 2889/Mum/2025 Shirish J Bhatt 5 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "