SAANVI DEVELOPERS & REALTORS PRIVATE LIMITED. ,KOLKATA V. ITO, WARD-1(1), KOLKATA, KOLKATA

ITA 1331/KOL/2023

AI Insights

The case involves appeals by Saanvi Developers & Realtors Private Limited against the orders of the National Faceless Appeal Centre, Delhi, which confirmed the additions made by the Assessing Officer (AO) regarding undisclosed commission income. The primary contention was the rate of commission applied on the total turnover for providing accommodation entries, which was initially set at 1% by the AO. The assessee argued for a reduction to 0.10% to 0.15%, citing a previous decision in their favor for a similar issue. The Tribunal, referencing a co-ordinate bench decision and a relevant High Court judgment, ruled in favor of the assessee, setting the commission rate at 0.15%. This decision was applied mutatis mutandis to both appeals filed by the assessee for different assessment years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25410 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Other Referred Cases: PCIT vs Alag Securities Pvt. Ltd
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMA CHOUDHARY
• Assessee Lawyers: ARVIND AGARWAL; FILING
• Keywords: Set aside; Unexplained cash credit; Accommodation entries
• Section: 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI SONJOY SARMA, JM ITA Nos. 1331/KOL/2023 & 1034/KOL/2024 (Assessment Year: 2012-13) Saanvi Developers & Realtors Private Limited. 6B, Bentick Street, Asha Chambers, Kolkata-700001 West Bengal Vs. ITO, Ward-1(1), Aaykar Bhavan, P-7, Chowringhee Square, Kolkata-700001, West Bengal (Appellant) (Respondent) PAN No. AALCS4233R Assessee by : Shri Arvind Agarwal, AR Revenue by : Shri Rama Choudhary, DR Date of hearing: 13.01.2025 Date of pronouncement : 13.02.2025 O R D E R Per Rajesh Kumar, AM: These are appeals preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 26.07.2023 for the AY 2012-13. 1034/KOL/2024 02. The only issue raised by the assessee in ground nos. 2 to 5, is against the confirmation of addition by the ld. CIT (A) as made by the ld. AO on account of commission at the rate of 1% on the total turnover which ought to have been made / reduced by the ld. CIT (A) to 0.10% to 0.15% of the total turnover. Page | 2 ITA Nos. 1331/KOL/2023 & 1034/KOL/2024 Saanvi Developers & Realtors Private Limited; A.Y. 2012-13 03. At the outset, the ld. Counsel for the assessee submitted that the issue is squarely covered in favour of the assessee by the decision of the co-ordinate Bench in assessee’s own case in ITA No. 1330/KOL/2023 for A.Y. 2010-11 vide order dated 31.12.2024, wherein identical issue has been decided in favour of the assessee The ld. AR therefore, prayed that the issue may kindly be decided in favour of the assessee following the decision of the co-ordinate Bench (supra). 04. The ld. DR on the other hand relied on the order of the authorities below, however, fairly conceded the point that the Tribunal has passed an order in assessee’s own case in A.Y. 2010-11 with the same facts. 05. After hearing the rival contentions and perusing the materials available on record, we find that admittedly the assessee was engaged in providing accommodation entries on commission basis. The assessee filed the return of income on 20.03.2013 by declaring total income at ₹1,13,730/-. Thereafter, the case of the assessee was selected for scrutiny and assessment was completed on 31.03.2015, assessing the total income at ₹23,96,493/- after making an addition of ₹22,93,619/- on account of undisclosed commission at the rate of 1% for providing accommodation entries. Thereafter, notice u/s 148 of the Act was issued which was complied with by the assessee by filing the return of income on 15.06.2017 with a total income of ₹3,59,470/-. The ld. AO completed the assessment on an income of ₹27,55,969/- by making an addition of ₹23,96,493/- as in respect of undisclosed income. According to the ld. AO, the assessee has provided the accommodation entries totaling to ₹23,96,49,307/- and accordingly, the addition at the rate of 1% was made which worked out to 23,96,493/-. The said order was challenged before the ld. CIT (A), however, the ld. CIT (A) confirmed the finding of the ld. Assessing Page | 3 ITA Nos. 1331/KOL/2023 & 1034/KOL/2024 Saanvi Developers & Realtors Private Limited; A.Y. 2012-13 Officer. After perusal of the decision of the co-ordinate Bench in assessee’s own case for A.Y. 2010-11, we find that the co-ordinate bench in ITA No. 1330/KOL/2023 for A.Y. 2010-11 vide order dated 31.12.2024, under similar facts has decided the appeal by directing the ld. AO to applying the profit rate of 0.15% as against 1% made by the ld. Assessing Officer. The operative part of the co-ordinate bench decision is reproduced as under:- “8. I have also gone through the judgment passed by the Hon’ble Bombay High court in the case of PCIT vs Alag Securities Pvt. Ltd placed by the assessee where in the order passed by the ITAT Mumbai Bench “A” was upheld by observing thus-“Tribunal held that the action of the Assessing Officer in treating the entire deposits as unexplained cash credits could not be accepted in the light of the assessement orders in the case of the beneficiaries and also in the light of the facts that the assessee was only concerned with the commission earned on providing accommodation entries. Therefore, the tribunal took the view that since the assessee had itself declared the commission on turnover at 0.15% which was more than percentage considered to be reasonable by the tribunal, the same should be accepted. 9. In the present case Mr. Sumit Sharma, Director of the appellant company has admitted to have been providing accommodation entries in lieu of admitted commission@ 0.10% to 0.15% of the turnover. The statement given by the Director has been accepted by the A.O. 10. Going over the facts of the case, order passed by the CIT (A) in the A.Y.11- 12, we are in this view that rate of commission should be 0.15% and not @ 1%., Accordingly the case of assessee is allowed and the AO is directed to compute the rate the commission @0.15% and not 1%. In the result, the appeal of the assessee is allowed.” 06. We therefore, respectfully following the order of the co-ordinate Bench, set aside the order of the ld. CIT (A) and direct the ld. AO to make the addition at the rate of 0.15%. The appeal of the assessee is allowed. 1331/KOL/2023 07. The issue raised in this appeal is similar to one as decided by us in ITA No. 1034/KOL/2024. Accordingly, our decision would apply mutatis Page | 4 ITA Nos. 1331/KOL/2023 & 1034/KOL/2024 Saanvi Developers & Realtors Private Limited; A.Y. 2012-13 mutandis to this appeal of the assessee in ITA No.1331/KOL/2024. Hence, the appeal of assessee in ITA No.1331/KOL/2024 is allowed. 08. In the result, both the appeals of the assessee are allowed. Order pronounced in the open court on 13.02.2025. Sd/- Sd/- (SONJOY SARMA) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 13.02.2025. Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "