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Judgment
ORDER
PER KRINWANT SAHAY A.M.
Appeal in this case has been filed by the assessee vide order dated 04.12.2025 passed by the ADDL/JCIT(A) Madurai for the A.Y. 2020-21. Grounds of appeal are as under :-
1.That the Ld. CIT(A) as well as Ld. AO has completed disregarded the documentary evidences submitted during the course of appellate and assessment proceedings and addition of Rs. 2,23,95,981 is entirely based on the findings of investigation wing. Further, such addition was made with preset of mind, violating principles of fair adjudication, hence, unsustainable, and liable to be dropped.
2.That the Ld. CIT(A) is not justified in confirming the addition of Rs. 2,23,95,981 on account of unexplained income under section 69A of the Income Tax Act, 1961, this addition being arbitrary and contrary to the facts and provisions of law.
3.That the Ld. CIT(A) erred in not considering the appellant plea that the sale transactions were duly recorded in books of accounts and the profit clement thereon was already offered for taxation, thereby resulting in double taxation which is against established principles of tax law.
4.Without prejudice to the above, if any addition is to be sustained, it should be restricted to the profit margin only and not the entire sale proceeds.
5.That Ld. CIT(A) erred in not ensuring consistency in the appellant assessments across year, the same precedents accepted in earlier assessments year were departed from without any change in facts OR discovery of new material, violating the principles of uniformity.
6.That the Ld. AO failed to provide the opportunity of cross examination of evidences used against the appellant and subsequently Ld. CIT(A) erred in holding there is no violation of principles of natural justice.
7.That the appellant craves right to amend, add, DLEETE OR withdrawing any of the ground of appeal either before OR at the time of hearing of this appeal.
Although the assessee has raised seven grounds of appeal but the only issue involved in this case is the addition of Rs.22395981/- on account of unexplained income u/s.69A of the Act, 1961 by the AO and its confirmation made by the Ld. CIT(A). The Ld. CIT(A) in his appellate order has given the findings that the assessee have made sale transaction of Rs.22395981/- with M/s. Baan Ganga Impex a bogus entity.
The Ld. Counsel for the assessee argued that the Ld. CIT(A) has not considered the plea of the assessee that sale transactions were duly recorded in books of accounts and the profit statement there were already offered for taxation, therefore, the addition of the entire sale to M/s. Bana Ganga Impex could result in double taxation which is established against the principle tax law.
Per contra the ld. DR relied on the order of the ld. CIT(A).
We have considered the findings given by the Ld. AO in the assessment order and by the Ld. CIT(A) in the appellate order. We have also considered the arguments of both the parties during the proceedings before us. We find that in the similar situation the coordinate Bench of ITAT Delhi in the case of OPG Securities Private Limited Vs. DCIT vide order dated 17.10.2023 had mentioned that commission @ 2% of accommodation entries are as per prevailing market rate and accordingly sustained the addition of 2% of the entire such bogus entries.
In our considered view the order written by the coordinate Bench in the case of OPG Securities Private Limited in similar situation is fully applicable in this case also accordingly we hold that @2% of the entire sale proceeds made by the assessee to M/s. Baan Ganga Impex may be added accepting the view of the AO and confirmed by the ld. CIT(A) that the sales made by the assessee to M/s. Baan Ganga Impex as a bogus firm. In the result 2 % of the entire sale proceeds of the assessee made to M/s. Baan Ganga Impex is hereby confirmed and it may be added in assessee’s taxable income.
In the result, the appeal of the assessee is partly allowed.