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ITA No. 1137/Del/2016: Revenue vs. Sh. Anil Aggarwal – ITAT Delhi Bench upholds CIT(A) order on commission income and protective addition under IT Act

Update / Judgement Date

24 Oct 2025

Source

WCP News Bulletin

Author

Sakshi Bhardwaj — WCP Legal Desk

Reading Time

2 min read

Financial ManagementOther Legal Matters
ITA No. 1137/Del/2016: Revenue vs. Sh. Anil Aggarwal – ITAT Delhi Bench upholds CIT(A) order on commission income and protective addition under IT Act
WCP News Bulletin

Headnote:

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, dismissed the appeal filed by the Revenue against the order of the Ld. CIT(A) for Assessment Year 2008-09. The Tribunal upheld:

  1. The restriction of commission income addition to Rs. 9,59,000/- (from Rs. 11,50,800/-) based on excess commission rate over the admitted rate.
  2. The deletion of Rs. 19,18,00,000/- added on a ‘protective basis’ under Section 68 of the Income Tax Act, 1961, as the assessee had only acted as a commission agent and the AO failed to show that the funds belonged to the assessee.


Background:

  1. A search & seizure operation under Section 132 of the IT Act was conducted at the business and residential premises of the Rockland Group and its directors on 06 September 2011.
  2. A consequential search was conducted at Sh. Anil Aggarwal’s residence on 21 October 2011.
  3. Notice under Section 153A was issued on 14 February 2014. Assessee filed return declaring income of Rs. 2,41,260/- on 06 March 2014.
  4. During the search, the assessee admitted that the companies he managed were not carrying out real business; the transactions were accommodation entries, and he earned commission income.


Court’s Observations:

  1. Commission Income Addition:
  2. AO added commission @ 0.6% on accommodation entries totaling Rs. 19,18,00,000/- amounting to Rs. 11,50,800/-.
  3. Assessee had disclosed only 0.1% commission.
  4. CIT(A) upheld AO’s adoption of 0.6% rate but restricted addition to excess of 0.5% over disclosed 0.1%, resulting in Rs. 9,59,000/- addition.
  5. Addition under Section 68 (Protective Basis):
  6. AO made a protective addition of Rs. 19,18,00,000/- under Section 68.
  7. CIT(A) deleted the addition since the assessee acted as a commission agent and the AO did not prove that the credited amounts belonged to him.
  8. Tribunal’s Decision:

No infirmity found in CIT(A)’s order.

Revenue’s appeal on both grounds was dismissed.


Legal Provisions Discussed:

  1. Section 132, Income Tax Act, 1961 – Search & seizure provisions.
  2. Section 153A, Income Tax Act, 1961 – Assessment following search.
  3. Section 68, Income Tax Act, 1961 – Cash credit and unexplained credits.