The A.C.I.T Vs. Index Securities & Research Pvt Ltd

Parties Involved

Facts Summary

During the course of assessment proceedings, the Assessing Officer noticed that the assessee company is involved in providing accommodation entries to various beneficiaries and for this service, it has charged commission. The Assessing Officer found that the assessee had provided accommodation entries amounting to Rs. 527.28 crores on which the assessee had earned 2% as commission. Accordingly, the Assessing Officer made an addition of Rs. 10,54,57,820/- as undisclosed income of the assessee and added the same to the total income of the assessee company. When the aggrieved assessee went in appeal before the ld. CIT(A), the ld. CIT(A) came to the conclusion that the assessee is a NBFC company and not a paper company providing accommodation entries and deleted the addition. Now the Revenue is in appeal before the Tribunal against the deletion of 2% commission income whereas the assessee has filed additional grounds contesting that the Assessing Officer has not properly assumed jurisdiction u/s 147 of the Act.…

Legal Issues

• 1. Whether the ld. CIT(A) has erred in deleting the addition made by the Assessing Officer as the commission income at 2% without appreciating that the material found during the course of search, post search investigation and investment and assessment clearly established that the assessee is just into the business of providing accommodation entries in lieu of commission?
• 2. Whether the learned Commissioner of Income Tax (Appeals) has grossly erred in law and on facts in sustaining the initiation of proceedings under section 147/148 of the Act and, further completion of assessment under section 147 r.w.s. 143(3) of the Act without satisfying the statutory pre-conditions for initiation of the proceedings and, completion of assessment under the Act?
• 3. Whether the learned Commissioner of Income Tax (Appeals) has failed to appreciate the fact that no addition whatsoever was made by the learned assessing officer on the basis of reasons recorded, as such, the instant proceedings, so initiated are bad in law and without jurisdiction?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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