The Income Tax Appellate Tribunal Delhi Bench ‘F’ adjudicated the case numbered ITA 1327/DEL/2019, involving appellant Naresh Kumar Jain and the respondent DCIT, Central Circle-26, New Delhi. This case pertains to the assessment year 2012-13, with proceedings initiated on February 18, 2019. The final order was pronounced on May 24, 2023.
Naresh Kumar Jain faced allegations from the Income Tax Department regarding his involvement in operating several shell companies purportedly used for providing accommodation entries, thereby manipulating income statements for commission benefits.
Extensive investigations followed by the search and seizure operations conducted on December 17, 2015, under section 132 of the Income-tax Act, 1961, unearthed substantial evidence, including financial documents and statements from various associates. The assessing officer initially imposed a commission income rate of 2% on the turnover from accommodation entries which was later contested by the appellant.
The Tribunal, considering the submissions and evidences, particularly the seized records suggesting different commission rates, decided to consolidate the appeals and issues for several assessment years from 2010-11 to 2016-17 for simplicity. The CIT(A) revised the commission rate to 1.04%, acknowledging that while the appellant did act as an accommodation entry provider, the previous rate imposed was excessively high without substantial justification.
The Tribunal noted the critical need to address circular transactions and the reliability of seized documents presenting the turnover and commission income. It emphasized the importance of fair adjudication without reliance on presumptions, thereby setting the commission rate at 0.47% following a thorough analysis of the available data.
The resolution of this case highlights the complexities of tax assessments involving alleged shell companies and the necessity for meticulous examination of all evidences by judicial authorities. The Tribunal’s decision underscores the need for fairness in tax proceedings and the impact of authoritative investigations on the final determinations.
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