TaxTMI 
TaxTMI 
2018 (6) TMI 1091
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....assessee company is engaged in business of trading in food grain and pulses. For the assessment year under dispute, the assessee filed its return of income on 14th October 2010, declaring total income of Rs. 63,080. During the assessment proceedings, the Assessing Officer on verifying the details available before him found that the assessee had a paid-up capital of Rs. 1,00,000. Whereas, in the relevant previous year it has shown purchases of Rs. 81.64 crore and sales of Rs. 81.65 crore. He found that there are neither any sundry debtors / creditors nor any trade advances received. The total expenses claimed were Rs. 22,586. From the party-wise details of purchases and sales furnished by the assessee he found that the assessee has effected ....
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....nto the alleged purchase and sale transaction by showing a huge turnover of Rs. 81.65 crore. The Assessing Officer concluded that the assessee has not carried out any business activity and has only earned commission income through accommodation entries. Accordingly, he proceeded to estimate commission received @ 1% on the total purchase and sale turnover shown by the assessee which worked out to Rs. 1,63,29,680. Being aggrieved with the aforesaid addition, the assessee preferred appeal before the first appellate authority. 4. The learned Commissioner (Appeals) after considering the submissions of the assessee and perusing the material on record, however, was not convinced with the claim of the assessee that it has actually entered into p....
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....arties were relied upon for making the addition of commission income, no opportunity of cross-examination was allowed to the assessee. He submitted, even the Assessing Officer has not provided any basis for estimating the commission income. Thus, it was submitted, the addition made should be deleted. 6. The learned Departmental Representative strongly relying upon the observations of the Departmental Authorities submitted that the business of assessee is doubtful as the purchasers and sellers are not only the same parties but are also related parties. He submitted, the assessee has also failed to prove that it has actually carried out actual sale and purchase transaction. Thus, he submitted, the addition made is justified. 7. We have ....
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....uld produce any delivery challan or transport charges. The assessee has not maintained even a stock register. In course of remand also the assessee was unable to produce any further evidence. However, in our view, before making any addition of commission income on the ground that the assessee is merely providing accommodation entries, it is necessary to make deeper probe and enquiry to ascertain the true nature of transactions between the assessee and concerned parties. The assessee's grievance that it was not given opportunity to cross-examine the third parties whose statements were relied upon also needs to be dealt with in accordance with law. In view of the above, we restore the issue to the Assessing Officer for de novo adjudication af....