Tribunal Partially Allows Appeal, Directs AO to Recalculate Net Commission

The Tribunal partially allowed the appeal, specifically addressing the issue of disallowance of purchases and directing the AO to calculate net commission for providing accommodation entry.

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Issues involved:
The appeal challenging an order passed under section 250 of the Income Tax Act, 1961 for the assessment year 2009-10.

Issue 1: Validity of assessment order under section 153C of the Act
The appellant contended that the assessment order passed under section 153C of the Act was not tenable as no search was conducted or requisition made in their case. The learned AR did not press this ground during the hearing.

Issue 2: Disallowance of purchases
The main issue raised in the appeal was the disallowance of purchases worth Rs. 6,87,64,162. The AO concluded that the assessee was involved in providing accommodation entries with another party. The CIT(A) upheld this decision, stating that the purchases were inflated through bogus accommodation entries. The appellant argued that they had proper documentation for the purchases and had sold the material purchased, but failed to provide confirmations from the parties involved. The Tribunal partially allowed the appeal, directing the AO to consider 1% of total sales as net commission for providing accommodation entry.

In conclusion, the Tribunal partially allowed the appeal, specifically addressing the issue of disallowance of purchases and directing the AO to calculate net commission for providing accommodation entry.

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