TaxTMI 
TaxTMI 
2016 (8) TMI 72
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....0 and 2010- 11 raised by the assessee are not pressed. The same is taken as the statement from the Bar and accordingly, ground nos. 1, 2 and 4 for both the years are dismissed as not pressed. 4. The assessee has raised the following grounds for AY 2009-10: "3.Without prejudice to the above, the Ld. AO erred in not restricting the additions under 'peak credit theory' to the extent to appellant's own funds and not examining the explanation with respect to the same filed at the assessment stage. The action of the AO was wholly unreasonable, uncalled for and bad in law. The Ld. CIT(A) was unjustified in disregarding the explanation without passing any speaking order. 5. Without prejudice to the above, in the facts and circumstances of the case, the Ld. AO erred in taxing income both under 'peak credit theory' and the 'undisclosed commission income'. The action of the AO was wholly unreasonable uncalled for and bad in law. He should have considered higher of the above two income and not aggregate them. 6. For that in the facts and circumstances of the case, the Ld. AO erred in charging interest u/s. 234A, 234B and 234C and/or incorrectly calculating the same. The action of t....
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....iding accommodation entries to various people who were also parallelly covered in the aforesaid search operation. In the said disclosure statement, the assessee explained that these bank accounts were used for the purpose of providing accommodation entries for which the assessee had earned commission to the tune of 25p. to 50p. and accordingly, came forward to offer the aforesaid sums towards commission income for both the assessment years. The assessee also requested the Ld. DDIT (Inv.) to adjust the balance lying with the bank amounting to Rs. 2,02,200/- which were attached towards the tax liabilities and interest for the aforesaid income. The assessee owned up the following bank accounts as undisclosed : S. No. Name of account holder Name of bank and branch Bank a/c. no. 1 Alankita Traders ICICI Bank 20, R.N.Mukherjee Road 605019206 2 Raghupati Enterprises Standard Chartered Bank, N. S. Road Branch 33105144977 3 Moto Enterprises Standard Chartered Bank, N.S. Road branch 33105139973 Dhanlaxmi Bank 15, Portugese Church 0206062000000546 6. The basis for arriving at the undisclosed income by the assessee is....
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....d who have made disclosures u/s. 132(4) of Income Tax Act simultaneously. Cash represent amount received from the beneficiaries from where I used to get commission. No commission was received from contra cheques or clearing cheques who were working in conduits. The commission income at 0.50% has thus been calculated only on cash deposits in my undisclosed bank accounts." 7. Further, during the course of assessment proceedings, summons was issued on assessee. The extracts of statements recorded u/ s 131 of the Act on 26-07-2011 are reproduced below : "Q.3. During the course of search at 46, B.B.Ganguly Street, 1st floor Room no. 4, Kolkata 700 012 on 08.12.2009, bank account no 33105139973 and 0206062000000546 with Standard Chartered Bank and Dhanlaxmi Bank respectively in the name of Moto Enterprise and bank account no 605019206 with ICICI Bank in the name of Alankita Traders were found. Please explain the nature and source of the transactions in these bank accounts? A.3. This bank accounts were undisclosed and does not form part of my regular income and were used for the purpose of providing book entries and earning commission thereon. Other than initial cash deposit for ....
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.... provisions of section 68 of the Act should not be invoked while completing the assessment, the assessee replied that as stated above, that he was earning commission for converting cash into cheques which was my main source of livelihood. The assessee stated that he had not maintained any books of accounts. The assessee stated that both cash deposits and cheques issued were transactions of trading nature and do not represent his own investments/drawings in any manner. His business was to deposit cash and issue cheques from the bank accounts and earn commission thereon. The question of applicability of section 68 of the Act for the transactions in the aforesaid bank accounts do not arise. It was further stated that without prejudice, looking at different angle, the aforesaid bank accounts were undisclosed and the debits/withdrawals have not been used for any investment or any expenditure by him, which means that the money deposited into the bank accounts were regularly routed back for the issue of cheques. It is evident from search/survey operations, seized records, and the statements recorded during the investigation proceedings that he was involved in providing accommodation en....
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....urce for deposit made in the next year i.e. AY 2010-11. In effect, the total addition of Rs. 40,00,000/- was confirmed in both the assessment years put together by the Ld. CIT(A). Aggrieved, assessee is in appeal before us. 10. The Ld. AR vehemently argued for adoption of Rs. 5,02,000/- as undisclosed income of the assessee for both the AYs 2009-10 and 2010-11 put together. Alternatively, he came forward for adoption of peak credit worked out taking into account all the transactions in the undisclosed bank accounts and determined the undisclosed income accordingly. In response to this, the Ld. DR vehemently relied on the orders of the lower authorities. 11. We have heard rival submissions and gone through facts and circumstances of the case. Admittedly, the bank accounts found during the course of search were undisclosed by the assessee. We find that the assessee had from the date of search stated that he was engaged in the business of selling cheques and main business was to convert cash into cheques and earned commission income in the range of .25% to .50% and accordingly, even made a disclosure petition u/s. 132(4) of the Act by giving a detailed working of the commission ....