ITAT Mumbai Upholds Deletion of ₹1.04 Crore Addition in Alleged Accommodation Entry Case

The “D” Bench of the Income Tax Appellate Tribunal, Mumbai, delivered its order on 23 February 2026 in the appeal fi led by the Income Tax Department against Mahesh K. Joshi for Assessment Year 2011–12. The appeal challenged the decision of the National Faceless Appeal Centre which had deleted an addition of ₹1,04,16,232 made by the Assessing Officer on allegations of non-genuine transactions.

Background of the Reassessment and Addition The assessee had originally fi led his return declaring income of ₹2,78,810. Based on information received from the Investigation Wing following a search on entities linked to Vipul Vidur Bhatt, the Assessing Officer reopened the assessment under Section 147 of the Income Tax Act. The department alleged that the assessee was a beneficiary of accommodation entries routed through a Bank of Baroda account using his PAN. Relying on seized material and statements recorded during search proceedings, the Assessing Officer treated ₹1.04 crore as unexplained and added it to income.

Tribunal’s Findings and Final Ruling

On appeal, the first appellate authority examined the seized material and statements and concluded that the assessee was not a beneficiary of accommodation entries. Instead, he was found to be an entry provider who earned commission income. Accordingly, the addition was restricted to commission at 1 percent of bank transactions. The ITAT agreed with this factual finding and noted that the department failed to bring any contrary evidence. Since the record supported that the assessee acted as a provider rather than a recipient of accommodation entries, the Tribunal refused to interfere with the appellate order.

The departmental appeal was dismissed, confirming deletion of the ₹1.04 crore addition.