ITA No.2631/Del/2023

Parties Involved

Facts Summary

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals)-27, New Delhi, which deleted an addition of Rs. 3,73,23,412/- on account of commission charged @ 2% on bogus sales. The assessee, Sh. Parmod Kumar, claimed to be engaged in the business of trading food grains on a commission basis. During the assessment, the assessee could not produce books of accounts, and admitted that he provided bills only and did not maintain a stock register or physical stock. The Assessing Officer (AO) concluded that the assessee was not engaged in any trading business of grains. The CIT(A) observed that the AO had not made any effort to differentiate between genuine and fake sales and had relied solely on the assessee's statement to conclude that all sales were bogus. The CIT(A) deleted the addition made by the AO and assessed the commission income at Rs. 1.5 per quintal.…

Legal Issues

• 1. Whether the CIT(A) is right in deleting the addition of Rs. 3,73,23,412/- on account of commission charged @ 2% on bogus sales.
• 2. Whether the CIT(A) is correct in allowing the appeal of the assessee by applying the rate of commission at Rs. 1.5/quintal on the total quantity of food grains.
• 3. Whether the CIT(A) is correct in calculating the commission at Rs. 1.5 per quintal ignoring the fact that accommodation entries are provided on the amount of transaction rather than the quantity of goods for which bogus billing is done.
• 4. Whether the CIT(A) is correct in allowing the appeal of the assessee by applying the rate of commission at Rs. 1.5/quintal on the total quantity of food grains, ignoring the fact that the assessee himself claimed to have engaged in variety of grains such as wheat, pulses, rice etc.
• 5. Whether the CIT(A) is correct in allowing the appeal of the assessee ignoring the fact that appellant in his statement recorded himself accepted that no stock details are maintained by him as no physical stock was kept in godown thereby establishing that assessee was earning commission income on quantum of fake bills provided.
• 6. Whether the CIT(A) is correct in allowing the returned income of the assessee as his commission income and not enhancing the income of the assessee due to unaccounted commission income which the assessee has admitted to have earned during the course of survey proceedings in his statement recorded.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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