TaxTMI 
TaxTMI 
2016 (10) TMI 596
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....3. Further, assessee vide its submission dated 23.03.2013, the relevant extract is reproduced hereunder: "The above assessee has filed return for A. Y 2010-11 on 14/10/2010 declaring loss of 16,12.371/-. The facts of the assessee are similar to the facts of Nexus Software Ltd. which /s also assessed in your circle The assessment of Nexus Software Ltd. for A Y. 2009-W was passed u/s. 144 on 20/12/2011 in this circle and the income was determined on estimated basis at Rs. 26,35,726/- by assuming commission @ 0.5 % on the bank withdrawals transactions during the year treating the said transactions as accommodation entries . The total of withdrawals from various bank account as per Para 4.2 of the said order was put at Rs. 52,71,45,160/- for A Y. 2009-10 on which income was computed @ 0.5% which came to Rs. 26,35,726/-. As per profit and loss account of the assessee for this year there is loss of Rs. 41,00,291 /-During the year the assessee has shown sales of Rs. 10,30,67,375/- which includes amounts received on land transactions and shares and securities treated by the department as accommodation entries determining income @ 0.5 % on the gross amount of transactions as per bank ....
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.... "The books of the accounts of the assessee are audited and in the Audited account no discrepancy have been found, the assessee is engaged in the business of sale and purchase of securities. In order to buy peace and avoid protracted litigation the assessee has accepted the estimated income which cannot be construed furnishing of inaccurate particulars of income. The assessee has discharged its onus in support of return of income filed. Estimated income cannot be as basis for levy of penalty. Simply on the basis of confession in the statement, no addition can be made if there is no corroborating evidence to prove the allegation. The parties, with whom dealings of sales and purchases have taken place, have not accepted that the said dealings are accommodating entries only. In view of these facts the penalty proceedings may kindly be dropped." 3.2 The Assessing Officer was not satisfied with the reply and imposed the penalty by following observations:- "5. The contention of the assessee is carefully considered. On perusal of the bank statement it is clear that the deposits and withdrawals made by assessee-company during the year are same. In all the bank accounts the opening and ....
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....another entity on the very same day or next day in the form of accommodation entry. The appellant could not submit any explanation or material in support of the genuineness of the transaction but only submitted that the addition was on estimate basis and its not liable for penalty . 6.2 The contention of the appellant that it disclosed the commission income suo moto to buy peace is misleading and not supported with evidence and without any basis. It is seen that after show cause, the appellant admitted before the AO that it was involved in providing the accommodation entry along with the other company of the group i.e. nexus software Ltd. The other company Nexus Software was assessed u/s 144 of the Act in AY 2009-10 and income was estimated at 0.5% of the accommodation entries as commission by the Department. After confrontation the appellant agreed to offer commission income @ 0.5% and disclosed/ admitted 0.5% commission on the similar line and offer Rs. 26,35,485/- on bank transaction of Rs. 52,70,97,148/- for taxation. Thus the contention of the appellant is not acceptable being false and the mandatory disclosure falls under the concealment of the income category. 6.3 It is ....
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....03.2013 during the course of assessment proceedings, offered the accommodation entry income @ 0.5%, coming at Rs. 26,35,485/-. The assessee has cited the case of Nexus Software Ltd for AY 2008-09. Thus, the assessment has been framed not on any estimate but assessee's own definitive admission of being entry operator and percentage calculation on accommodation entries. 5.1 The assessee has not disputed that it was an instrumentality in accommodation entry racket; therefore, the penalty has been rightly levied. 5.2 The assessee's contention that the admission was to buy peace has no legs to stand as plethora of evidence was found and assessee voluntarily agreed that its declared business was a ruse in fact and all the entries were accommodation entries and offered the % income thereon. The assessee who indulges in accommodation entries and ruin the economic strength of the country does not deserve any with leniency qua the penalty. Besides, the AO and the ld. CIT(A) were reasonable in imposing the penalty @ 100% of the tax sought to be evaded as against the power of imposing a penalty of 300% of the tax sought to be evaded. 5.3 ITAT, Nagpur Bench judgment in the case of Malu Elect....