TaxTMI 
TaxTMI 
2014 (11) TMI 285
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....tive basis even without issuing notice for enhancement as required u/s 251(2) of the Income-tax Act, 1961 or any opportunity to the assessee. (ii) That even otherwise, there is no factual or legal basis or proper enquiry or investigation or any material so as to presume any undisclosed income in respect of various entries flowing from the bank account. (iii) That whole basis of initiation of reassessment proceeding is on alleged ground about accommodation entries and as such finding and conclusion of CIT(A) that same represent undisclosed income of the appellant is self contradictory and against the basis of initiation of proceedings u/s 148. (iv) That there is no evidence or source in support of alleged undisclosed income and as such impugned addition is without any factual or legal basis. (v) That in any case, the said addition is highly arbitrary, excessive and without allowing the benefit of telescoping or peak credit." 2. The grounds of appeal raised by the Revenue in I.T.A.No. 2776/Del/2010 consists of 3 grievances with the action of Ld. CIT(A) by which he had deleted the addition of Rs. 5,71,244/- on account of share capital and share application money which was made by....
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....roduced as under: "The Assessing Officer has rightly given opportunity to the appellant company to explain the source of deposits through cash and clearing during the course of assessment proceedings as well as during the course of remand proceedings but the appellant has failed to explain the source of credit entries with any plausible explanation. In view of this, I hold that the Assessing Officer is fully justified in making addition in the hands of the appellant company. But it is not understandable as to why the Assessing Officer has made the addition on protective basis as the failure to corroborate the credit entries in the bank account must necessarily result with the addition on substantive basis. This fact has found mention in the remand report of the Assessing Officer on which no rejoinder has been filed by the appellant. The onus is on the appellant to prove the source of the money deposited in its bank account and when no books of accounts are produced, no confirmations are filed and/or no explanation is rendered with regard to source of amount deposited with the bank account, the addition u/s 68 is required to be made on substantive basis in the hands of the appellan....
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.... can be said to have earned only a small commission of about 0.35% of entries instead of 2.5% worked out by the A.O. Reliance in this respect was placed on the decision of Special Bench in the case of Manoj Aggarwal where special bench had decided the income in such cases to be computed @ 0.35 paisa. Ld. A.R. further argued that commission at the rate of 0.35 paisa should have been calculated on the amount of Rs. 10 lacs only which formed part of the reasons recorded. Ld. A.R. further submitted that Hon'ble Tribunal has already decided this issue vide its order dated 23.07.2010 which was recalled only because Revenue had filed Miscellaneous Application and ground of Miscellaneous Application was that the appeal should have been heard along with Revenue's appeal and no ground was taken on merits therefore, it was submitted that Tribunal order was recalled only for technical reasons. 7. Ld. D.R. on the other hand argued that addition was rightly made by the Assessing Officer on protective basis as the substantive addition was to be made in the case of beneficiaries only. He argued that transactions of cash deposit and withdrawal of the same amount on the same date clearly establ....
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....w of the above ground No.1 of Revenue's appeal is dismissed. 10.1 The A.O. had calculated the alleged income by applying a notional rate of 2.5% on the amount of deposits in the bank account. Other than deposits in the bank account there is no proof with the A.O. to arrive at the conclusion that assessee was earning commission income. Ld. CIT(A) has rightly deleted the same. In view of above, ground No.2 is also dismissed. 10.2 As regards ground No.3, we find that in the present case, from the reasons recorded, the Assessing Officer was of the view that income of Rs. 10,00,000/- had escaped assessment. There is no material on record to show or establish that the assessee was engaged in providing accommodation entries in respect of all credits made in the bank account except two entries as reported by investigation wing and as referred to in the reason recorded u/s 148 of the Act. We have already taken a view that there was no evidence available on record to prove /establish that the assessee was engaged in providing accommodation entries and we have upheld the action of Ld. CIT(A) in deleting the addition on account of alleged commission. Now, when there is no material in place t....