Accommodation entries and bogus purchase bills: ITAT upheld estimated commission addition where primary evidence was not produced.

Seized material, including a finance executive's statement and WhatsApp chats, was treated as incriminating evidence of an accommodation-entry and cash-and-banking channel arrangement through brokers, and the commission addition was sustained. The assessee's failure to produce primary evidence such as purchase bills, delivery challans, weighbridge receipts, transport records, or a reliable link between the alleged purchases and sales and the impugned transactions supported the finding that the purchases were bogus. The objection on denial of cross-examination was rejected because no timely request was shown during assessment. An estimated 1% commission on the alleged entries was held reasonable, and the additions were upheld for both years.

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Issues: Whether the addition made on account of commission income arising from alleged accommodation entries and bogus purchase bills to M/s. BVG India Ltd. for Assessment Years 2018-19 and 2019-20 was sustainable.

Analysis: The search material, including the statement of the concerned finance executive and the seized WhatsApp chats, was treated as incriminating material showing a cash-and-banking channel arrangement through brokers. The assessee did not produce the primary supporting documents such as purchase bills, delivery challans, weighbridge receipts, transport records, or reliable linkage of the claimed purchases and sales to the impugned transactions. The plea regarding denial of cross-examination was rejected as no timely request for such cross-examination was shown to have been made during the assessment proceedings. The factual findings for both years were held to be identical, and the estimate of commission at 1% of the alleged accommodation entries was found reasonable.

Conclusion: The commission addition based on bogus purchase bills and accommodation entries was upheld for both years and the assessee's challenge failed.

Ratio Decidendi: Where seized material and corroborative statements establish accommodation entries, and the assessee fails to substantiate the genuineness of the underlying transactions with primary evidence, an estimated commission addition on such bogus entries is sustainable.

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