The ITO, Ward-4(1)(1), Ahmedabad V. M/s. Sarvagya Builders Pvt. Ltd., Ahmedabad

ITA 513/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8055 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 01-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Accommodation entries
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ITO, WARD - 4(1)(1), AHMEDABAD (APPELLANT) VS SARVAGYA BUILDERS PVT. LTD., 22, HARSIDDH COMPLEX, NR. INCOME TAX CROSS ROAD, ASHRAM ROAD, AHMEDABAD PAN: AAICS8701P (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 19 - 06 - 2 018 DATE OF PRONOUNCEMENT : 28 - 06 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEM BER : - THIS REVENUE S APPEAL FOR A.Y. 2011 - 12 , ARIS ES FROM ORDER OF THE CIT(A) - 8 , AHM EDABAD DATED 22 - 12 - 2016 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUND OF AP PEAL: - 1) 'WHETHER THE LD. CIT(APPEAL) IS RIGHT IN LAW AND ON FACTS IN ESTIMATING THE UNDISCLOSED COMMISSION INCOME @ 0.5% INSTEAD OF 1% OF TOTAL SUM OF RS. 74,96,94,654/ - , ROUTED AS ACCOMMODATION ENTRY.' I T A NO . 51 3 / A HD/20 17 A SSESSMENT YEAR 2011 - 12 I.T.A NO. 513 /AHD/20 17 A.Y. 2011 - 12 PAGE NO ITO VS. SARVAGYA BUILDERS PVT. LTD. 2 3. THE BRIEF FACT OF THE CASE IS THAT THE A SSESSEE HAS FILED RETURN OF INCOME DECLARING INCOME OF RS. 3 , 21 , 330/ - ON 25 TH SEPTEMBER, 2011. THE ASSESSMENT WAS REOPENED ON THE GROUND THAT ASSESSEE HAD SO ME TRANSACTIONS WITH DP REALITY PVT. LTD. WHICH WAS NOT REPORTED IN THE FINANCIAL STATEMENT OF THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSE WAS ENGAGED IN THE PROVIDING ACCOMMODATIVE ENTRIES AND WAS OPERATING A NUMBER OF BANK ACCOUNTS. THROUGH THESE BANK ACCOUNTS, THE ASSESSEE COMPANY HAS R OUTED A SUM OF RS. 74 , 96 , 94 , 654/ - . THE S TATEMENT OF SHRI PURVESH NARESHBH A I ONE OF T HE DIRECTORS OF THE ASSESSEE COMPANY WAS RECORDED U/S. 131 OF THE ACT VIDE WHICH HE HA D ADMITTED THAT ASSESSEE COMPANY WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES TO DI FFERENT PARTIES. CONSEQUENTLY AFTER FOLLOWING THE ASSESSMENT IN THE ASSESSMENT YEAR 2012 - 13 THE ASSESSING OFFICER HAS COMPUTED THE UNDISCLOSED INCOME @ 1% ON TOTAL ACCOMMODATION ENTRIES PROVIDE D BY THE ASSESSSEE. 4. AGGRIEVED A SSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY RESTRICTING INCOME ESTIMATION @ 0.5% AS AGAINST INCOME ESTIMATION @ 1% MADE BY THE ASSESSING OFFICER. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. DEPA RTMENTAL REPRESENTATIVE HAS CONTENDED THAT LD. CIT(A) HAS REDUCED THE INCOME ESTIMATION 0.5% FROM 1% WITHOUT SPECIFYING ANY VALID REASON IN SPITE OF MATERIAL FACTS ESTABLISHED BY THE ASSESSING OFFICER OF PROVIDING ACCOMMODATION ENTRI E S AND NOT SUBMITTING A NY EVIDENCE BY THE ASSESSEE THAT IT HAS CHARGED COMMISSION @ 0.5%. ON THE OTHER HAND, NOBODY HAS ATTENDED AT THE TIME OF APPELLATE PROCEEDINGS FROM THE SIDE OF THE ASSESSEE. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIA L ON RECORD CAREFULLY. O N SCRUTINY OF DETAILS FILED IT WAS DISCERNED TO THE ASSESSING OFFICER THAT THE ASSESSEE HAS BEEN INDULGED IN PROVIDING I.T.A NO. 513 /AHD/20 17 A.Y. 2011 - 12 PAGE NO ITO VS. SARVAGYA BUILDERS PVT. LTD. 3 ACCOMMODATION ENTRIES AND OPERATED VARIOUS BANKS. CONSEQUENTLY THE ASSESSING OFFICER HAS ESTIMATED UNDISCLOSED INCOME @ 1% OF TOTAL ACCOMMODATION ENTRIES AND MADE ADDITION OF RS. 74,96,946/ - . THE LD. CIT(A) HAS STATED THAT ESTIMATION @ 0.5% TO BE REASONABLE AFTER REFERRING VIEW POINTS OF JUDICIAL AUTHORITIES. WE OBSERVE THAT THE LD. CIT(A) HAS NOT SPECIFIED ANY RELEVANT REASONS FOR REDUC ING THE IMPUGNED UNDISCLOSED INCOME DETERMINED BY THYE AO. WE HAVE GONE THROUGH THE MATERIAL ON RECORD AND FIND THAT IT I S UNDISPUTED FACT THA T THE ASSESSSEE WAS INDULGED IN PROVIDING ACCOMMODATION ENTRIES ON THE BASIS OF COMMISS ION. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY HAS ROUTE D A SUM F RS. 74,96,94,654/ - THROUGH VARIOUS BAN K ACCOUNTS OPERATED BY T H E ASSESSEE COMPANY. ONE OF THE DIRECTOR S OF THE ASSESSEE COMPANY SHR. PURVESH NARESHBHAI CHAUHAN HAS ADMITTE D IN THE STATEMENT RECORDED U/S. 131 OF THE ACT THAT THE ASSESSEE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES BY CHARGING COMMISSION FROM THE PARTIES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS , T HE ASSE S SEE HAS FAILED TO SUB STANTIATE THAT IT HAS RECEIVED @ 0 .5% COMMISSION FOR PROVIDING ACCOMMODATION ENTRIES AS AGAINST DETERMINATION OF COMMISSION @ 1% BY THE ASSESSING OFFICER. IN VIEW OF THE ABOVE FACTS AND FINDINGS, WE OBSERVE THAT ASSESSING OFFICER HAS MADE REASONABLE ESTIM ATION OF COMMISSION EARNED BY THE ASSESSEE ON PROVI DI NG ACCOMMODATION ENTRIES THEREFORE, WE ARE NOT INCLINED TO CONCUR WITH THE DECISION OF THE LD. CIT(A) . ACCORDINGLY, THE APPEAL OF T HE REVENUE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D. ORDER PR ONOUNCED IN THE OPEN C OURT ON 28 - 06 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 28 /06 /2018 I.T.A NO. 513 /AHD/20 17 A.Y. 2011 - 12 PAGE NO ITO VS. SARVAGYA BUILDERS PVT. LTD. 4 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,