DY. COMMISSIONER OF INCOME TAX v. M/S BHAWANI PORTFOLIO PVT. LTD.

1. The appeals have been heard by way of video conferencing.

2. Present appeals have been filed challenging the orders dated 23rd January, 2019 passed by the Income Tax Appellate Tribunal [ITAT] in ITA No. 6351 of 2016 and ITA No. 6350 of 2016. 2021:DHC:2030-DB ITA 158/2020AND 163/2020 Page[2] of 3

3. Learned counsel for the Appellant statesthat the Assessment orders established that the credit in the bankaccounts of the respondent-Assessee were treated as accommodation entrytransactions since the Assessee had failed to produce any satisfactory reply and confirmations for the said transactions.

4. He states that the Assessment Orders were upheld by the CIT(A) holdingthat the respondent-Assessee had failed to discharge his onus to establish the nature and source of each credit entry appearing in the bank accounts and therefore for want of necessary details and supporting evidence, theAssessing Officer was justified in treating all thecredit entries appearing in the bank accounts as income for the purpose of estimating commission incomeat the rate of 2.25%.

5. He states that the ITAT vide the impugned orders dated23rd January 2019 partially allowed the respondent-Assessee's appeals and set-aside the assessment orders and CIT(A) orders on the basis that in such illegal activities, noprecedenceof rate could be applied and further held that there cannot be any profit element in inter-grouptransactions.

6. He emphasises that the ITAT had overlooked the fact that the respondent-Assessee hadadmitted to providingaccommodation entries. He adds that the error in the impugned order is that ITAT had failed to recognize that therespondent-Assessee had in fact failed to discharge his onus to establish thenature and source of each credit entry appearing in the bank accounts.He states that theAssessing Officer was therefore justified in treatingall the credit entries including inter-group transactions appearing in the bank accounts as income for the purpose of estimating commission income and in applying the rate of 2.25%. ITA 158/2020AND 163/2020 Page[3] of 3

7. Having perusedthe paper book, this Court findsthat the Tribunal in the impugned orders has upheld the appellant’s contention that the respondent used to provide accommodation entries upon charging commission.However, the Tribunal has heldthat just because some loose sheets hadbeen found stating that percentage of commission was 1.69% to 2.5% in some transactions,it cannot be presumed that for all transactions the respondent hadearneda similar rate of commission.

8. Further relying upon past decisions by a number of Coordinate Benches of the Tribunal adopting a commission rate ranging from 0.15% to 0.50%, in similar matters, the Tribunal passed the impugnedorder.

9. This Court is of the view that none of the aforesaid findings are so perverse that they warrant an interference in appeal jurisdiction under Section 260A of the IncomeTax Act, 1961. This Court is also of the view that the Tribunal,beingthe last fact finding authority, was entitled to guess work and arrive at a ballpark rate of commission. Consequently, no substantial question of law arises in the present appeals. Accordingly, the appeals along with pending applications are dismissed.

10. The order be uploaded on the websiteforthwith.Copy of the order be also forwarded to the learned counsel through e-mail. MANMOHAN,J NAVIN CHAWLA, J JULY 12, 2021 AS