TaxTMI 
TaxTMI 
2017 (10) TMI 1094
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....did not object to this proposal. 2.2 Accordingly, first we take up the appeal having ITA No. 591/Del/2017 for assessment year 2012-13, grounds of which are reproduced as under: 1. That in view of the facts and circumstances of the case the order passed by the CIT(A) and the assessment order is illegal, bad in law and without jurisdiction. 2. That the order of the CIT(A) is being assailed of being perverse, as the same is passed without considering the submissions of the Appellant, taking a holistic view of the matter and the ratio's of various case laws which have been relied by the Appellant. 3. That the CIT (A) has erred in law and on facts in confirming the addition of Rs. 1,26,28,85,990/- on account of entries allegedly appearing in Annexure A-l, treating the same to be unexplained income of the Appellant. 4. That the CIT (A) has erred in law and on facts in confirming the addition of 30,00,000/- on account of entries allegedly appearing in Annexure A-4, treating the same to be unexplained income of the Appellant. 5. The Appellant craves leaves to add, alter or modify the aforesaid ground and craves leaves to file additi....
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....on and submitted that explanation would be submitted on next date because copies of those documents were missing. The assessee did not furnish any explanation for almost 11 months, then the Assessing Officer issued one more notice under section 142(1) dated 27/11/2014, asking, queries similar to what were asked in notice dated 08/01/2014. The assessee responded that no such pages exits for which explanation could be given. The Assessing Officer followed the principle of natural Justice and allowed a final opportunity vide notice under section 142(1) dated 11/03/2015 requesting the assessee to furnish the requisite information. In the notice, the Assessing Officer mentioned the aggregate of the entries appearing in the diaries at Rs. 126,28,55,990/-. This notice was served upon the assessee on 12/03/2015, however, according to the Assessing Officer, no compliance was made. In view of the non-compliance, the Assessing Officer taking into consideration the statement of the assessee dated 20/05/2011 held the amount of Rs. 126,28,85,900/- as entries/transactions appearing in the impounded diaries A1 to A-3, as unexplained income of the assessee. 2.6 Further, the Assessing Officer ref....
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.... the appellant the total unrecorded entries come to Rs. 9,62,03,619/-." 2.8 The Ld. CIT-(A) summarized the facts of the case and after analyzing the submission of the assessee, dismissed the grounds of the appeal. The relevant finding of the Ld. CIT-(A) is reproduced as under: "From the above, following facts emerged: * The appellant is a Chartered Accountant and in the Return of Income for any of the assessment year, including A.Y. 2012-13, or subsequently, no commission income has been disclosed, on account of providing alleged accommodation entries on commission basis, * The transactions in the diaries relating to cash received and paid, are in the name of different persons, * Cash transactions of Rs. 30,00,000/-, as per Annexure-A4, relating to 3 persons remained unexplained. On perusal of loose paper, it is clear that cash has been received/paid by the appellant against some sale/purchase of property, which is not recorded in the regular books of account of the appellant. In either case of purchase or sale of property, the transactions remained unexplained, which is the unexplained income of the appellant, * In the diary, all the....
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....lso failed to substantiate that the payments have been made from the cash receipts on a particular date, therefore, there is no question of exclusion of such alleged payments from the total additions made by the A.O. It is also clear that the transactions in the diaries relating to cash credits, remained unexplained as per provision of Sec.68 of the Act. Further, the transactions in the diaries relating to payments also remained unexplained as per provision of Sec.69 of the Act and also failed to substantiate that these payments are made, out of the receipts of cash. The expenses noted in the diary for house construction, are not proved that same have been incurred out of the income, which has already suffered tax and therefore, all these transactions are unexplained expenses u/s 69C of the Act. In view of the above, I am of the considered opinion that the objections raised by the appellant through above submissions, are not correct and therefore, arguments of the appellant, are hereby rejected. In these facts and circumstances, I do not find any infirmity in the findings of the A.O. and therefore, both the additions made by the A.O., are confirmed. Accor....
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.... income on the entries/transactions appearing in diaries/loose papers. 3.4 Learned CIT(DR), on the other hand, vehemently opposed restoring the matter to the file of the Assessing Officer due to following reasons : (i) that the assessee during his statement before the DDIT only submitted part explanation in respect of the entries/transactions recorded in the pocket diaries and loose papers impounded during the course of survey action and did not provide detail name and address of the parties whose name were recorded in coded form, (ii) that the assessee did not declare any commission income from the undisclosed activity admitted by him during the course of survey, (iii) that the assessee did not comply with the notices issued by the Assessing Officer, (iv) that the assessee did not submit any affidavit of the parties in support of the claim of incoming fund and outgoing fund, (v) that the entire submission before the Ld. CIT -A consisting of flow chart and diagram was a presentation without any supporting document documentary evidences like affidavit of any person who took accommodation entry from the assessee. 3.5 In view of the s....
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....ed as under: "Q. 21 Please give the addresses of above persons? A. 21 I don't know as the client never gives the exact name of the person who is coming in our office for giving or taking the fund. They only talk in the terms of the codes given to the person who is visiting office." (ii) the Assessing Officer issued notice under section 142 (1) of the Act on 08/01/2014, in which he asked the assessee to explain the entries/transactions appearing on pages 78, 67 and 18 of small pocket diaries (Annexure A-1 to A-3), pages 109, 199 and 159 of loose papers annexed as Annexure A-4 to A-6 and Annexure A-7 (hard disc). This notice under section 142(1) of the Act is available on page 95 to 97 of the assessee's paper book. The Assessing Officer has noted in the assessment order the response of the assessee, according to which, the assessee explained that all these pages of the relevant annexure and hard disk would be explained on the next date because copies of those documents were missing then. The assessee has not shown any documentary evidences that subsequently, he explained those documents to the Assessing Officer. (iii) Pages 98 of the paper book is ....
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....y acknowledgement by the Assessing Officer of the said letter, the contention that the assessee explained the entries before the Assessing Officer is rejected. 3.10 In view of the above conduct of the assessee of avoiding various notices and summons issued by the Assessing Officer, clearly establish that there was no failure on the part of the Assessing Officer in providing the opportunity of explaining the entries/transactions appearing in pages impounded from the premises of the assessee. Had the assessee cooperated the proceedings and provided the name and addresses of the persons claimed to have availed accommodation entry through him, the Revenue would have got opportunity and taken action against those persons within the limitation period of six years provided in the Act, by way of reopening their assessments. 3.11 Before the learned CIT-(A), the assessee made part efforts as far as quantum of addition is concerned. The assessee contended that he was engaged in arranging accommodation entry through other accommodation entry providers and earning only commission on the services provided and, therefore, only commission at the rate of 0.1% should only be taxed in its hand.....
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.... funds received and to whom the funds given, additions cannot be sustained both for incoming of funds and outgoing of the funds. The contention of the assessee that cheque numbers and daily opening balances appearing in the diaries/lose papers have also been added, need to be examined thoroughly. In the interest of substantial Justice, we feel it appropriate to restore the matter to the file of the Assessing Officer for quantification of the additions in the case of the assessee in view of our observations made above. The assessee shall be afforded reasonable opportunity of being heard. Accordingly, grounds related to the addition of Rs. 126,28,85,990/- are allowed partly for statistical purposes. 4. On the issue of addition of Rs. 30 lakh, the assessee has not discharged its onus laid down under section 68 of the Act of explaining the nature and source of the entries either before the lower authorities or before us. The assessee has not furnished any confirmation from the parties as well as not provided there complete addresses. In view of the failure of the assessee to discharge its onus, we do not find any error in the finding of the learned CIT-(A) in confirming the addition....