Consistency in accommodation-entry cases supports applying the same net profit rate when identical facts are unchallenged.

Accommodation-entry additions were restricted on consistency grounds where identical transactions in the preceding year had been assessed by applying a 3% net profit rate and the Revenue did not distinguish the later year on material facts. The Tribunal held that the same rate should be adopted for the year under appeal, so the addition was not sustained in full and was directed to be recomputed at 3% in favour of the assessee. Consequential recomputation by the Assessing Officer was required.

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Issues: (i) Whether the addition made on account of alleged accommodation entries was to be sustained in full or restricted by adopting the profit rate applied in an earlier assessment year.

Analysis: The appeal was confined to the addition arising from transactions treated as accommodation entries. The Tribunal noted that in the assessee's identical transactions for the preceding assessment year, the income had been assessed by applying a net profit rate of 3%, and that position was not rebutted by the Revenue. On that footing, it found that the same approach should be followed for the year under appeal in the interest of consistency.

Conclusion: The addition was not sustained in full and was directed to be recomputed by applying a 3% net profit rate, in favour of the assessee.

Final Conclusion: The assessment was modified only to the extent of the impugned addition, and the matter was left to consequential recomputation by the Assessing Officer.

Ratio Decidendi: Where an identical transaction has already been accepted in an earlier year by applying a particular net profit rate and the Revenue does not distinguish the later year on material facts, consistency warrants adoption of the same rate for the year under appeal.

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