The key points are: The Assessing Officer (AO) erroneously...

The key points are: The Assessing Officer (AO) erroneously applied Section 69C of the Income Tax Act, which deals with unexplained expenditure, to transactions involving sales to SINPL. The Income Tax Appellate Tribunal (ITAT) held that since the assessee provided accommodation entries, only the profit element on the sales should be added to the income. The assessee admitted that a higher commission rate of 5% could be treated as profit on the accommodation entry transactions of Rs. 34,59,840/-. The ITAT directed the AO to apply the 5% profit rate, amounting to Rs. 1,73,000/-, and add it to the assessee's disclosed income, instead of the addition made u/s 69C.

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