Delhi ITAT upheld addition towards bogus accommodation entry & unexplained commission expenditure thereon


Delhi ITAT upheld addition towards bogus accommodation entry & unexplained commission expenditure thereon


Let us have a short overview of the case before ITAT on bogus accommodation entry and commission paid thereon. The case details is as under:




ITA No. 307/Del/2018

Dated.- October 12, 2023

In this case, during assessment proceeding, AO has made two additions to the income of assessee, viz. first under section 68 of the Act amounting to Rs. 60, 00,000 as Share application money and second addition of Rs 1,80,000 on account of Commission @ 3% for arranging bogus accommodation entry of Rs. 60,00,000 and assessed the same as undisclosed expenditure under section 69C of the Act.

The assessee carried the matter before Learned CIT(A), the Learned CIT(A) reduced the additions of Rs. 60,00,000 and second addition of Rs. 90,000 to 50% by observing that there was no credit entry Rs. 30,00,000/- under vide instrument no.028744 dated 24.09.2008.

The assessee is before this Tribunal mainly with the two grievances, first upholding part addition of Rs. 30,00,000/- under section 68 of the Act and upholding of part unexplained commission expenditure of Rs. 90,000/- under section 69C of the Act.

CIT (A) observed as under:


Averting to the facts in the appellant’s case, it is obvious that only documentary evidence by way of confirmation, bank statement, copy of acknowledgement of return is filed to explain the source of the impugned credit. Despite repeated opportunities, the onus was not discharged before the AO. Copy of bank accounts of the company also reveals simultaneous deposits and withdrawals leading credence to the modus operandi employed by such companies to provide accommodation entries.

These facts only show that a paper trail is sought to be created to camouflage the entire transaction to introduce unaccounted Income by way of share capital

On appeal before ITAT, it has held as under:
“On careful consideration of basis taken by the AO, explanation filed by the assessee before the authorities below, both the remand reports of the AO and material available on record, we are of the considered view that the Learned CIT(A) was right in restricting the addition under Section 68 of the Act to Rs. 30,00,000/- and the second addition u/s 69C of the Act to Rs. 90,000/- as the remand report was clearly revolving the fact that the alleged entry dated 24.09.2008 was not found credited to the Bank account of the assessee. The assessee failed to discharge onus lay on him as per section 68 of the Act regarding entry dated 01.10.2008 hence, AO rightly made addition. Therefore, we reach a logical conclusion that the Ld. CIT(A) has rightly evaluated factual position of the case and thereafter, granted part relief to the assessee reducing the addition u/s 68 of the Act to Rs. 30,00,000/- and second addition of Rs. 90,000/- under section 69C of the Act. We are unable to see any ambiguity or any other valid reason to interfere with the findings recorded by the Learned CIT(A). Therefore, we uphold the same. Accordingly, the grounds of assessee are dismissed.”


The copy of the order is as under:


1697092665-ITA No.307-Del-2018-A and R Buildmart Pvt. Ltd. vs. ITO