2018 (2) TMI 1591

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....ition of Rs. 56,63,987/- by confirming an estimation of profit on accommodation turnover @ 3% as against 0.57% declared by the assessee 2. Under the facts and circumstances of the case and in law CIT(A) has erred in not appreciating the fact that while estimating 3% of T/o AO has not brought on record any evidence, material or comparable case to justify such addition or without finding any fault in actual income offered by the assessee." 3. The brief facts of the case are that the assessee filed his return of income for A.Y. 2010-11 on 18.09.2010 declaring total income of Rs. 12,96,335/- and the same was duly processed under Section 143(1) of the Income Tax Act, 1961 (hereinafter "the Act"). Subsequently on receipt of informatio....

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....usly entered into several circular transactions in order of provide benefit of fictitious/bogus entries to the ultimate beneficiaries i.e. M/s. Shree Ram Urban Infrastructure Ltd. and M/s. Raghuveer Construction Company Pvt. Ltd., even though there is no mention of cash commission in the survey report. The AO further observed that in these kind of modus operandi it is quite clear that the assessee has worked with an intent to derive some benefit by providing accommodation entries as per beneficiaries' requirements. Therefore, he estimated 3% commission on total accommodation entries of Rs. 18,87,99,551/- provided during A.Y. 2010-11 and added back Rs. 56,63,987/- to the total income of the assessee. 4. Aggrieved by the assessment order t....

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....ieved by the order of the CIT(A) assessee is in appeal before us. 5. The learned A.R. for the assessee submitted that the learned AO was erred in estimating 3% commission on total accommodation entries without appreciating the fact that the assessee has derived gross profit of less than 1% in his business. The learned A.R. referring to the decision of the ITAT, Mumbai in the case of Readymade Steel India P. Ltd. in ITA No. 7426/Mum/2014, submitted that under similar identical facts the ITAT has estimated 1% commission on accommodation entries. He, therefore, requested to scale down the estimation made by the AO from 3% to 1% of the total accommodation entries. 6. The learned D.R., on the other hand, strongly supported the order of the....