ITAT Delhi Upholds CIT(A) Order; Dismisses Revenue Appeal in Entry Operator Anil Aggarwal’s Case on Commission and Protective Addition.

Headnote

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has dismissed the appeal filed by the Revenue challenging the order of the CIT(A)-24, New Delhi, which had restricted the addition on account of commission income and deleted the protective addition made under Section 68 of the Income Tax Act, 1961.

Key Facts

• A search and seizure operation under Section 132 was conducted on the Rockland Group and related persons, including Anil Aggarwal, an alleged entry operator.

• The Assessing Officer (AO) added ₹11,50,800/- as commission income at 0.6% of the total accommodation entries of ₹19.18 crore, and further made a protective addition of ₹19.18 crore under Section 68.

• The CIT(A) upheld the commission rate of 0.6% but restricted the addition to the difference between the AO’s rate and the declared 0.1%, i.e., ₹9.59 lakh, and deleted the protective addition.

Tribunal’s Findings

• The Tribunal observed that the assessee’s role as an accommodation entry provider earning only commission was accepted by the AO himself.

• The AO had not indicated any substantive addition in another case to justify a protective addition in the assessee’s hands.

• In the absence of such findings, the ITAT held that the protective addition under Section 68 was unjustified.

• The order of the CIT(A) was found to be reasoned and factually supported, requiring no interference.

Outcome

The ITAT dismissed the Revenue’s appeal and upheld the CIT(A)’s order in full.

Result: Revenue’s appeal dismissed.