| Question And Answer | |
|---|---|
| Subject: | Estimation of income in the hands of accommodation entry provider under Income tax Act. |
| Category: | Income-Tax |
| Querist: | Pratham |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Accommodation entries, estimation of income |
| Date: | December 27, 2022 |
Assesseee is trader of goods and duly register under GST Act. During the course of search of other party , cheque book of the assessee has been found and even accountant of the assessee has accepted that the sales effected to party are only accommodation entry. Ao during the course of assessement of assesssee has rejected books of accounts of the assessee and proposed to tax 5% of total transcation with the party where search conducted as estimated income in the hands of assessee . Is action of the AO is justified and whether assessee can submit that the 5% taxing the income at higher side . Any decisions to support the contention for lower amount to be taxed .
Was the statement of the accountant retracted? Was there any incriminating evidence found in the course of search? Was the assessment of the assessee made under section 148 of the Income-tax Act, 1961(Act) or section 153C of the Act? These questions will have to be answered to understand the case better.
Further, the Assessee can prepare a working of computation of income demonstrating that the addition of 5 per cent is on the higher side.