Tribunal allows appeals due to father's illness, remits expenses for substantiation, upholds rejection of accounts.

The Tribunal allowed the appeals for statistical purposes, condoning the delays in filing appeals due to the father's illness and subsequent death. The income from accommodation entries was assessed at 2% of turnover, with expenses remitted for substantiation. The rejection of books of accounts was upheld, considering the lack of genuine business activities. The Tribunal directed a re-examination of expenses based on evidence provided by the assessee, following the Konichiva Builders Ltd. precedent. Other grounds raised by the assessee were dismissed.

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Issues Involved:
1. Condonation of delay in filing appeals.
2. Assessment of income from accommodation entries.
3. Rejection of books of accounts.
4. Estimation of income and allowance of expenses.

Detailed Analysis:

1. Condonation of Delay in Filing Appeals:
The appeals were filed with delays of 36, 26, 26, 26, and 29 days respectively. The delay was attributed to the critical illness and subsequent death of the father of the controlling person of the assessee. The Tribunal noted that the Coordinate Bench had condoned a similar delay of 43 days in another case (Konichiva Builders Ltd.). The Ld. CIT DR had no objection to condoning the delay. Consequently, the Tribunal condoned the delays, allowing the appeals to be heard on merits.

2. Assessment of Income from Accommodation Entries:
The assessee was part of a group of companies controlled by an individual who admitted to providing accommodation entries (bogus bills) for a commission. The AO made additions based on this admission, estimating the income from such activities at 2% of the turnover. The CIT(A) upheld this addition, stating that the assessee was only involved in accommodation entries and had no genuine business activities.

3. Rejection of Books of Accounts:
The AO rejected the books of accounts under section 145(3) of the Income Tax Act, 1961, due to the failure of the assessee to produce regular books of account, sale, purchase, and expense vouchers. The AO concluded that the assessee was engaged in accommodation entry business and not genuine business activities. This conclusion was based on documentary evidence, confessional statements, and the absence of necessary infrastructure to support genuine business activities.

4. Estimation of Income and Allowance of Expenses:
The Tribunal noted that the estimation of income at 2% was based on the statement of the controlling person, who admitted that the commission earned was between 1.5% to 2%. The Tribunal also observed that the same statement mentioned the incurrence of expenses for earning this income. The Tribunal held that the Revenue cannot rely selectively on parts of the statement. Therefore, the issue of allowance of expenses was remitted to the AO, directing the assessee to provide cogent material to substantiate the expenses incurred.

Conclusion:
The Tribunal, following the precedent set in Konichiva Builders Ltd., restored the issue of allowance of expenses to the AO for re-examination based on evidence provided by the assessee. The appeals were partly allowed for statistical purposes, with identical directions for the remaining assessment years. The Tribunal dismissed other grounds raised by the assessee, as they were not argued. The order was pronounced in the open court on January 28, 2015.

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