2025 (5) TMI 2037 - AT - Income Tax

Taxpayer Wins Partial Relief: Unexplained Cash Credits Reduced from 2% to 0.5% in Income Tax Assessment

M/s. Genesis Developers and Holdings Ltd., Versus Income Tax Officer, Ward-12 (1), New Delhi

ITAT Delhi partially allowed an appeal concerning assessment year 2012-13. The tribunal reduced unexplained cash credits from 2% to 0.5% commission on ... Unexplained cash credits u/s 68 - commission component of various accommodation entries - HELD THAT:- As we hereby adopt judicial consistency and conclude that the assessment of the assessee’s above accommodation entries @ 0.5% only would be just and proper in the given facts and circumstances. Assessee’s appeal is partly allowed. The Appellate Tribunal (ITAT Delhi) adjudicated an appeal concerning assessment year 2012-13 under section 147 r.w.s. 143(3) of the Income-tax Act, 1961. The assessee did not press earlier grounds challenging the reopening's validity and alleged violation of natural justice. The primary issue was the addition under section 68 of unexplained cash credits amounting to Rs. 62.06 lakhs, representing a 2% commission on accommodation entries totaling Rs. 31.03 crores.The tribunal noted that the addition was based on information from a 2010 search and seizure operation on related entities uncovering accommodation entries. The assessee relied on a connected case (ITA No. 953/Del/2020, Mekaster Finlease Limited Vs. DCIT, decided 06.02.2023), where the Assessing Officer was directed to assess such commission at 0.5% only. The Revenue did not rebut this precedent.Applying judicial consistency, the tribunal held that the commission on accommodation entries should be assessed at 0.5% instead of 2%, stating: 'we hereby adopt judicial consistency and conclude that the assessment of the assessee's above accommodation entries @ 0.5% only would be just and proper.' The appeal was thus partly allowed.