AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 429
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.... the above we first deem it appropriate to reproduce the grounds raised in ITA 1269/Del/2013: "1. The order of the Ld.CIT(Appeals) is not correct in law and facts. 2. On the facts and in circumstances of the case the Ld.CIT(Appeals) has erred in deleting the addition of Rs. 1,17,12,111/- on account of credits against nonexistent sales without appreciating the fact that assessee has shown sales to M/s R.V.Traders proprietary concern of Shri Ravinder Yadav has provided accommodation entries and has not done any genuine business. 3. On the facts and in circumstances of the case the Ld.CIT(Appeals) has erred in deleting the addition of Rs. 2,82,92,872/- on account of credits against nonexistent/non genuine sales to M/s Swastik Packaging without5 appreciating the fact that assesseee could not furnish any evidence in order to prove the genuineness of sales. 4. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal." 3. A perusal of the above grounds shows that ground no.1 is general as such requires no adjudication, qua ground no.4 which was a residual ground the same is dismissed as no arguments were advanced in....
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....aving the following Bank accounts in which huge cash was found and have been deposited in different dates and withdrawn in the shape of drafts and pay orders in the name of different parties Mr. Yadav was confronted with the same: Name of the Bank Account Number ICICI Bank 015505004043 ICICI Bank 015505004182 ICICI Bank 08805002694 HSBC 140003757001 Standard Chartered 5451038013 4.4 Accordingly summons u/s 131 of the Act were issued to Shri Ravinder Yadav again on 28.01.2008 who was confronted with the information obtained and his statement was recorded on 08.05.2008. Shri Ravinder Yadav after initial denial admitted opening these accounts. He accepted to have charged minor commissioning for the same, however, he stated that he could not recollect the names of the parties to whom the drafts or pay orders were issued, except, he specifically named the assessee as one of the beneficiaries of drafts/pay orders. These facts are found recorded in para 3.4 of the assessment order. It would be appropriate at this stage to extract also para 3.5 from the assessment order hereunder: "3.5 Details were called for from the ICICI Bank, Punjabi Bagh Branch, in respect of d....
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....u with them for carrying out this business providing accommodation entries? Ans. I am doing this business with the same group of companies for the period starting early 2006 and ending 2007. I did business with this group for about two years. I am introduced by one sh. CP Aggarwal who used to be one tenant at WZ-245 Madipur village, New Delhi with one Mr. Mohan Kumar, the employee of one of the group companies. This business of providing entries was discontinued as soon as I received summons from Income tax department with regard to querries on my business activities in the month of December, 2007. Q.4 How much was the gross profit from the said business during which it was operational? Ans. The gross receipts of commission of the same business were Rs. 50,000/- approx. per quarter. After meeting my expenses, I used to file income tax return for the net profit earned. Q.5 What was the channel of receipt of cash for which you were providing the bank draft/demand draft/pay orders to said group cos. Ans. I used to receive cash from the employees namely Sanjay, Trishul, abhay, Ghanshyam and Mohan Kumar or said group of com panes which was deposited in the ICICI Bank Punjabi Bagh, H....
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....ich party by the said companies. Q.13 Do you maintain regular books of accounts? Ans. I have never maintained proper/regular books of accounts for the said entry business as well as my other business. I am filing my return on estimated basis. Q.14 Under which name and style you are carrying your business of providing accommodation entries for any other business? Ans. I am doing business under the name & style of A1Is Ravinder & Co. and R. V Traders having bother office at 4- A, LIG flats, Madhuban Enclave, Rohtak road, New Delhi. Q.15 Could you state the amount for which you have made pay order/bank draft for the above said companies after receiving cash from them during the year 2006 & 2007. Ans. As far I remember the amount for which 1 made pay order/demand draft could be Rs. 20 Crores (Approx) for two years i.e. 2006 & 2007. Q.19 It is seen from the papers available in your premises that a residential plot no.A-60 (measuring 200 Sq. yards) Shankar Garden New Delhi also belongs to you but you have failed to disclosed the same when asked in the said statement above? Ans. This property was purchased about 18 years back for Rs. 6500/- on power of attorney but the papers have....
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....ties vide order sheet entry dt. 9.10.2010. In response to the said query the assessee filed its detailed reply vide letter dt. 10.12.2010 which has been extracted in the assessment order at pages 9 and 10, which is extracted for ready reference. "4.2 ................. "1. With reference to your query with regard to particulars towards delivery challan, octroi receipt in respect of the sales made, we have to submit that when ever the sale is made FOR basis the complete particulars with regard to RR / MR is being kept by the assessee. However, in case the goods are being sold EX Factory/ Ex Office the delivery of the goods is being taken by the customers themselves from the business premises and as such the seller does not have any record of dispatch. Since, it is up to the customers in which manner he transport the goods. In view of the above facts the assessee have maintained the complete record of delivery particulars when the goods are sold on FOR basis and the same could be verified. 2. Moreover, the assessee is maintaining complete quantitative record of the goods purchased as well as sold as is being reflected in the tax audit report as well as in the annual accounts bei....
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....ing the above, the Assessing Officer proceeded to make an addition of Rs. 1,17,12,101/- on the following reasons. "4.3 In this context, it is also relevant to notice the conduct of the assessee during the post search proceedings. The search in the case of the assessee was conducted on the basis of the information that the assessee company and the associated concerns have been taking accommodation entries from Sh. Ravinder Yadav. In order to verify, these allegations the ADIT(Inv.), Unit-IH(3), New Delhi had issued detailed questionnaire to the assessee company vide letter dated 11.11.2008. Further, opportunity letters were sent on 17.11.2008. Another questionnaire dated 28.11.2008 was sent to the assessee by AD IT (Inv), Unit-HI (3), New Delhi. However, the assessee did not respond to any of the queries in order to prevent any further investigation by the Income Tax Department. 4.4 The assessee has been unable to furnish any proof to establish the physical sales of goods to the parties concerned. No, details regarding the transportation and delivery challans have been filed. The claim of the assessee that some its customers might have arranged the drafts and pay orders from Sh. R....
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....he notice the appellant filed return or income declaring total income or Rs. 68.60.683/- on 28.1.2010. Notice u/s 143(2) was issued on 10.2.2010 calling for details. Notice u/s 142( I) along with questionnaire was issued on 12.8.2010. These notices were duly complied with and necessary details filed. The case was assessed at an income of Rs. 5,07,08,428/- after making certain additions and disallowances including unexplained credits amounting to Rs. 1,17,12,111/- & Rs. 2,82,92,872/- and unreconciled purchases amounting to Rs. 37,56,398/-. The appellant is in appeal against this order. 3.1 . Facts of the case arc that Sh Ravinder Yadav gave a statement u/s 132(4) that he was earlier working for Swastik Pipes Group and mainly providing accommodation entries in the form of demand drafts/ pay orders against cash and receiving commission of Rs. 250 per lakh thereon. 'The beneficiaries of these demand drafts / pay orders purchased by Sh Ravinder Yadav were the appellant M/s Northern Strips Ltd., M/s Super Plastic Coats Pvt. Ltd. and a concern by the name and style of M/s Swastik Packaging whose proprietor was one Sh Lalit B. Sharma, an employee or Swastik Pipes Group. In the same s....
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....re sent to the Assessing Officer for comments on 3.1.2012 and in response thereto the Assessing Officer vide his report dt. 5.3.2012 stated that there was nothing new in the submissions of the assessee as they had already been considered at the time of the assessment proceedings. 5.2 The CIT(A) considering the remand report and the reply of the assessee dismissed ground nos. 1 to 7 raised whereby the validity of the proceedings before the Ld.CIT(Appeals) were challenged in appeal. However considering the submissions advanced on behalf of the assessee qua ground no. 9 the CIT(A) deleted the addition made on merit and accepted the explanation of the assessee. 6. Aggrieved by which the Revenue is in appeal before us. 7. Shri Gunjan Prasad, Ld.CIT, D.R. vehemently relying upon the assessment order and the statement recorded of Shri Ravinder Yadav contended that in the peculiar facts and circumstances where the Assessing Officer made the addition the same deserves to be upheld and the impugned order accordingly be set aside as Shri Ravinder Yadav has specifically named the assessee company as a beneficiary for whose benefit he was depositing and getting demand drafts/bank drafts for ....
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....counts of the assessee was obtained. The assessee was asked to furnish the details of treatment of the receipts in his regular books of accounts. The assessee vide its letters dt. 9.12.2010 and 14.12.2010 submitted that the amounts received from the bank accounts of Shri Ravinder Yadav have been adjusted against the sales to various parties." (emphasis ours). 8.1 The explanation offered to the Assessing Officer vide letter dated 9.12.2010 and 14.12.2010 referred to by the assessee which has been extracted in para 4 of the assessment order when juxtaposed with the explanation offered in letter dt. 10.12.2010 also extracted by the Assessing Officer in para 4.2 of his order it was submitted fully met the objections of the AO. It was his submission that despite recording these the AO has ignored them while drawing a conclusion against the assessee. Heavily relying upon the submissions advanced before the AO and the CIT(Appeals) it was submitted that the impugned order deserves to be upheld. Referring to the same it was submitted that the AO has extracted certain portions in the impugned order and the complete facts and evidences which were relied upon before the AO and the evidences w....
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....et of M/s R.V.Traders, was brought to tax in his hands. In the appeal for Assessment Year 2004-05 in the case of Shri Ravinder Yadav (Appeal no.130/11-12), the CIT(Appeals) has issued directions to the Assessing Officer to reopen the assessment and tax the closing balance of the balance sheet at Rs. 33,71,710/- as on 31.3.2003 and profit at Rs. 1,48,257/- of M/s R.V.Traders in Assessment Year 2003-04 as this was not disclosed by Shri Yadav in the return of income. Thus, the entire transactions relating to the demand drafts/pay orders and transactions of M/s R.V.Traders with the appellant company as well as other group concerns stands fully taxed in the hands of Shri Ravinder Yadav. It was not proper for the same Assessing Officer to tax the same amounts in the hands of Shri Ravinder Yadav as well as other group concerns. The sales to different parties pertaining to the demand drafts/pay orders, as also to M/s R.V.Traders, are undisputedly already recorded in the books of account and credited to the P&L account duly audited and filed with IT returns for the respective years in the case of the appellant. The undisclosed income and assets generated from these transactions stands alrea....
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....ade substantial transactions with M/s Swastik Packaging and huge amounts were transferred from the bank accounts of M/s Swastik Packaging to the accounts of the assessee and taking into consideration that the Director of the assessee Sh. P.V. Bansal had given an evasive and noncommittal reply qua the said concern despite the fact that his company had benefited to the extent of crores of rupees from the transactions with Swastik Packaging juxtaposed with the statement of extracted in the impugned order that M/s Swastik Packaging was also one of the group concern of the promoters of M/s Northern Strips Ltd. group. Accordingly taking into consideration the various facts on record the AO was of the belief that M/s Swastik Packaging is a non existent entity floated for the benefit of the assessee and the Northern Group. The reasons for coming to such a conclusion are set out in para 5.3 of the order of ld. CIT(Appeals) which is extracted hereunder for ready reference: "5.3. In view of the above details of transactions of the appellant company with M/s Jindal Poly Films Ltd., the disallowance during the present Assessment Year 2006-07 on account of unreconciled purchases works out to Rs....
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.... that the ADIT(Inv.), Nasik had reported that no return of income could be traced in the case of Sh. Lalit B. Sharma. Since, the date of filing of this return is not legible, it is quite likely that the return would have been filed after the date of search i.e. 28.08.2008 as is the case for assessment year 2007-08. 5.12 In view of the discussion above, it is clear that the sales to M/s Swastik Packaging by the assessee company of Rs. 2,82,92,872/- are not genuine. Hence the receipts from M/s. Swastik Packaging are treated as credit against non existent sales. The receipts are Rs. 2,82,92,872/- unexplained credits into the books of the company and added to the income from other sources'. Penalty proceedings u/s 271(1)(c ) of the Income Tax Act, 1961 are separately initiated." 11. In appeal before the First Appellate Authority the addition was assailed by way of ground no.10 and the action of the Assessing Officer was assailed, the argument taken into consideration by the Ld.CIT(Appeals) is extracted for ready reference. "During the year under consideration the appellant made sales of Rs. 2,82,92,872/- to M/s Swastik Packaging. The said amount was duly recorded in the sales and wa....