IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K(SMC)”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER I.T.A No.6284/Mum/2024 (Assessment Year: 2011-12)

Revenue by : Shri Bhagirath Ramawat (SR DR)

Date of hearing : 05/01/2026 Date of pronouncement : 13/01/2026 O R D E R Per: Anikesh Banerjee (JM):

The instant appeal of the revenue filed against the order of theLd.

Commissioner of Income-tax-(Appeals) Addl/JCIT-A3-Delhi [for brevity, ‘Ld.CIT(A)’] under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act) for the Assessment Year 2011-12, date of order 01/10/2024. The impugned order was emanated from the order of the Learned Income-tax Officer 20(2)(1), Mumbai (for brevity, ‘the Ld.AO’) order passed u/s143(3) r.w.s. 147 of the Act, date of order 27/12/2016.

2. The revenue has taken following grounds:

1. "On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition of Rs. 8,51,329/- being 1% of bogus sales of Rs. 8,51,32,913/-, as nothing but an accommodation entry duly admitted by the assessee."

2. "On the facts and circumstances of the case and in law, the Ld.CIT(A) has failed to appreciate the fact that during the enquiry conducted by the DDIT(Inv.), statement of the assessee was recorded u/s. 131 of the Income Tax Act, 1961, wherein the assessee, himself, admitted that he was indulged in providing accommodation entries of sale and purchase."

3. "On the facts and circumstances of the case, the Hon'ble ITAT is requested to entertain this appeal, though, the tax effect is below the monetary limit prescribed in the CBDT Circular No. 5/2024 dated 15.03.2024 but the case falls within the exceptions laid down in clause (h) of Para

3.1 of the Board's Circular no. 5/2024 dated 15.03.2024."

4. "The appellant crave leave to amend or alter or add a new ground which may be necessary."

3. The brief facts of the case are that the assessee filed the return and declaring total income Rs.6,69,040/-. As per the report of the DDIT (INV) the statement of the assessee was recorded under section 131 and assessee stated the the assessee has two types of business that is the actual business of trading of iron and steel and another business providing accommodation bills to parties in which bills are received and issued through broker without any actual delivery of the goods. The assessee also conceded that the commission was charged @.5% to @1% for providing the accommodation entries. The Ld. AO determined the purchase to the extent of Rs.8,31,92,582/- and calculated commission at the rate of 1% on the purchase which comes to Rs.8,31,925/- and also the sale to the extent of Rs.8,51,32,913/- and calculated commission at the rate of 1% of the bogus sale which comes to Rs.8,51,329/-. Both the commission amounts of Rs.8,31,925/- and Rs.8,51,329/- were added back with the total income the assessee. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) relying on the order of Coordinate Bench of ITAT, Mumbai in the assessees’ own case for assessment year 2010-11 bearing ITA No.4578 & 4885/Mum/2017 restricted the addition to the extent of 1% on alleged purchase. But related to addition of commission on sale was duly deleted by the Ld. CIT(A). Being aggrieved revenue filed an appeal before us.

3. Ld. DR argued and stated that the assessee is already conceded in recorded statement U/s 131 of the Act for providing accommodation entry to the parties. So both the purchase and sales entries are considered as a bogus. The Ld. AO in correct understanding calculated the commission @1% both on purchase and sale of the assessee re