AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (11) TMI 803
X X X X Extracts X X X X
X X X X Extracts X X X X
....f by way of this consolidated order. 2. As a lead case, we are taking up the cross appeals in the case of Prashant Aggarwal for the assessment year 2004-05, being ITA No. 590/D/2014 and 886/D/2014. In assessee's appeal, following grounds have been raised:- i. "On the facts and circumstances of the case, the Ld. CIT(A) erred in treating commission @ 0.20% on cash deposits of Rs. 5,56,85,000/- i.e. Rs. 1,11,370/- against the facts of ITAT Order passed in the case of Sanjay Kumar Garg - [2012] 134 ITD 0082 (Delhi) on which basis assessment is made. ii. On the facts and circumstance of the Ld. CIT(A) erred in sustaining commission of Rs. 6,03,153/- against the facts of ITAT Order passed in the case of Sanjay Kumar Garg - [2012] 134 ITD 0082 (Delhi) on which basis assessment is made." 3. Whereas the revenue in its appeal has raised the following grounds:- i. "The Commissioner of Income Tax, (Appeals) has erred in law and on facts in deleting the addition of Rs. 5,56,85,000/- on account of unexplained income from undisclosed sources. ii. The Commissioner of Income Tax (Appeals) has erred in law and on facts in deleting the addition of Rs. 9,04,73....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g bank account with State Bank of Bikaner & Jaipur at Khari Baoli, New Delhi, wherein the cash to the tune of Rs. 5,56,85,000/- was deposited during the financial year 2003-04. The details of which are appearing at pages 8 to 10 of the assessment order. The Ld. A.O. has added the entire deposits of Rs. 5,56,85,000/- on protective basis in the hands of the assessee and held that same shall be added on substantive basis in the hands of Shri Sanjay Kumar Garg. The relevant observation and conclusion of the AO is as under :- "7. In view of the information in the possession of the department in the form of statement of M/s. Sanjay Kumar Garg, recorded at the time of survey u/s 133A in his case, as elaborately discussed above, and followed by the local enquiries made, the cash deposits totalling Rs. 5,56,85,000/- during F.Y. 2003-04 pertaining to Asstt. year 2004- 05 under consideration is treated as unexplained income. The assessee has failed to adduce any evidence regarding the nature & source of cash entries totalling Rs. 5,56,85,0000/- in his bank account ad detailed in Question No. 18. As such these are liable to be treated as his unexplained income from undisclosed sources....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sing the firms for the purpose of providing sale bills for which he was collecting commission. The assessee was depositing cash in the bank accounts of the dummy firms as well as his own firms through which he was carrying out accommodation entry business. At the time of survey no evidence was found to suggest that the assessee was engaged in real commission business. No other source of income was also found. It is also the case of assessing officer that the assessee was carrying on business of entry provider. The assessments were reopened for this purpose only. The Ld. CIT(A) has given a finding of fact that the assessee was engaged in the business of providing accommodation entries and, therefore, the amounts deposited in the account of dummy concerns was to be treated as total receipts on which commission was to be determined. Therefore, we are in agreement with the view of the Ld. CIT commission was to be determined. Therefore, we are in agreement with the view of the Ld. CIT (A) that only commission can be determined on the deposits made in the bank accounts of the dummy concerns. Therefore, we do not find any infirmity in the order passed by the Ld. CIT (A) that the amount de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arg. We find that the Tribunal in the case of Shri Sanjay Kumar Garg had applied 0.20% on total deposits appearing in all the bank accounts of all the bogus entities including that of the assessee also. Once in the case of Shri Sanjay Kumar Garg, where substantive addition was made by estimating the commission income from the accommodation entry @ 0.20%, then there is no basis for sustaining the protective addition of entire cash deposits of Rs. 5,56,85,000/- in the hands of the assessee. Therefore, following the Tribunal order, we do not find any merit in the ground No. 1 raised by the revenue and the same is dismissed. 10. So far as the issue relating to applicability of 0.20% as contested by the assessee, the Ld. Counsel for the assessee contended that if the entire deposits have been considered by the department in the hands of Shri Sanjay Kumar Gang, wherein for the entire deposits income @ 0.20% s commission has been applied, then no separate addition should be made in the hands of the assessee. However we are unable to appreciate such contention, because the assessee was provided the accommodation entry through his bank account for which he was also getting certain commis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....so the protective addition of entire cash deposits made by the A.O. Thus, the appeal of the revenue is dismissed, whereas, the appeal of the assessee is allowed. 14. There are cross separate appeals filed by the revenue as well as by the assessee for the levy of penalty u/s 271(1)(c); both in the cases of Shri Prashant Aggarwal and Shri Ram Chander Garg. The Ld. CIT(A) has directed the A.O. to levy the penalty of 0.20% sustained by him, against which assessee is in appeal; whereas the revenue has challenged the order of Ld. CIT(A) on the levy of penalty on the entire cash deposits made on protective basis and part of the commission deleted by the Ld. CIT(A). 15. So far as the revenue's appeal is concerned same in view of our finding given above are to be dismissed, as no penalty u/s 271(1)(c) is leviable, because in the quantum proceedings, we have directed that the addition of cash deposits on protective basis cannot be added and only addition sustained is with regard to 0.20% by way of commission on such cash deposits in the hands of the both assessees. Accordingly, the revenue's appeals are dismissed. 16. Now so far as the levy of penalty on the addition sustained by us....