#accommodation entries

The ITAT Delhi held that commission income from accommodation entries must be taxed at a reasonable rate of 0.15% of total credits, rejecting the arbitrary 3% estimate. It also ruled that a reassessment notice under Section 148 is invalid without prior approval from the specified authority under Section 151(ii), protecting assessees from procedural lapses.

ITAT Delhi upholds addition of Rs. 16.5 lakh as unexplained expenditure under Section 69C, ruling the assessee failed to discharge the burden of proving the legitimacy of purchases from a hawala operator. The judgment reinforces that mere book entries without corroborative evidence are insufficient to avoid tax additions.

The ITAT Ahmedabad has ruled that donations to political parties accompanied by cash-back arrangements constitute accommodation entries with no genuine economic substance, rendering them ineligible for tax deduction under Section 80GGC. This sets a critical precedent for the Income Tax Department to scrutinize politically linked donations and crack down on shell transactions disguised as electoral funding.

The ITAT Delhi has ruled that tax authorities cannot impose additions for accommodation entries based on mere suspicion or circumstantial links to search-seized entities. Concrete, verifiable proof of fictitious transactions is mandatory, protecting businesses from arbitrary assessments grounded in procedural shortcuts rather than substantive evidence.

ITAT Delhi ruled that donations to political parties engaged in accommodation entries do not qualify for tax deduction under Section 80GGC of the Income Tax Act. The tribunal upheld the disallowance of Rs. 3 lakhs claimed by the assessee, emphasizing that genuine political contributions must be free from fraudulent financial practices. This sets a precedent for scrutinizing political donations linked to money laundering schemes.

ITAT Delhi quashed Rs. 49.5L and Rs. 54.5L additions under Section 68, ruling that additions cannot stand without incriminating material or opportunity for cross-examination. The decision reinforces natural justice principles in income tax assessments, impacting taxpayers facing similar allegations of accommodation entries.

ITAT Ahmedabad quashed a reassessment notice under Section 147/148 of the Income Tax Act, ruling that the Assessing Officer’s satisfaction must be based on independent application of mind and tangible evidence linking the assessee to escaped income. The Tribunal emphasized that borrowed satisfaction or conjectural reasoning violates natural justice and renders the reassessment void.

ITAT Agra holds that under Section 145(3) of the Income-tax Act, the Assessing Officer cannot partially reject books of accounts; if rejected, net profit must be estimated on the entire turnover. This ruling reinforces the strict interpretation of the provision, impacting taxpayers whose books are scrutinized for defects.

ITAT Ahmedabad rules that unexplained cash deposits under Section 69 IT Act cannot be taxed in full without evidence linking the assessee to beneficial ownership. The tribunal directed reassessment based on peak balance and permissible commission income, narrowing the scope of tax additions for accommodation entries.

ITAT Mumbai rules that additions under Section 68 of the Income Tax Act cannot rely solely on bank-routed transactions or third-party allegations. The assessee must independently establish the creditworthiness of lenders and the genuineness of transactions to avoid additions, reinforcing the burden of proof on taxpayers in accommodation entry cases.

ITAT Mumbai rules that repayment of an unsecured loan before assessment, supported by documentary evidence, fulfills the assessee's burden under Section 68 of the Income Tax Act. The ruling clarifies that mere banking transactions or incorporation documents are insufficient if repayment and evidence negate allegations of unexplained cash credit, offering relief to taxpayers facing similar scrutiny.

ITAT Delhi holds that payments to paper entities for bogus purchases are taxable as unexplained expenditure under Section 69C in the year of payment, not the year of original purchase.

Delhi ITAT holds that repayment of unsecured loans with interest, supported by MCA records and bank statements, discharges assessee's burden under Section 68; no addition permissible without concrete evidence of accommodation entries.