AI Drafter 
TaxTMI 
TaxTMI 
2018 (4) TMI 1120
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....not business transactions through which accommodation entries were provided. ii. Ld CIT(A) has wrongly confirmed that appellant has failed to file evidence that VAT charged @4% from the beneficiaries on accommodation bills were actually refunded to the beneficiaries or deposited with the trade tax department. iii. Ld CIT(A) fell in error in confirming the upscaling the rate of commission artificially from 1.5% to 2%. iv. Ld CIT(A) omitted too consider that actual rate of commission, based upon seized documents, workout to 1.26% and after reducing the expenses, it works out to 0.76%. 3. That the ld CIT(A) in confirming addition of Rs. 100000/- on account of unexplained investment." 3. The assessee has raised the following grounds of appeal in ITA No. 3771/Del/2014 for the Assessment Year 2007-08:- "1. That the order passed by the ld CIT(A)-XXXII is bad in law and on facts. 2. That the ld CIT(A) has grossly earned in confirming the addition of Rs. 186766002/- because. i. Ld CIT(A) has wrongly held appellate failed to furnish any documentary evidence to show that infra transactions between the firms were not business tr....
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....ommodation entries were provided. ii. Ld CIT(A) has wrongly confirmed that appellant has failed to file evidence that VAT charged @4% from the beneficiaries on accommodation bills were actually refunded to the beneficiaries or deposited with the trade tax department. iii. Ld CIT(A) fell in error in confirming the upscaling the rate of commission artificially from 1.5% to 2%. iv. Ld CIT(A) omitted too consider that actual rate of commission, based upon seized documents, workout to 1.26% and after reducing the expenses, it works out to 0.76%. 3. That the ld CIT(A) in confirming addition of Rs. 7300200/- on account of unexplained investment." 6. The assessee has raised the following grounds of appeal in ITA No. 3774/Del/2014 for the Assessment Year 2010-11:- "1. That the order passed by the ld CIT(A)-XXXII is bad in law and on facts. 2. That the ld CIT(A) has grossly earned in confirming the addition of Rs. 45280273/- because. i. Ld CIT(A) has wrongly held appellate failed to furnish any documentary evidence to show that infra transactions between the firms were not business transactions through which accommodation entr....
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.... AY 2006-07 to the appeals of the assessee for other years. 9. Search u/s 132 was conducted on 26.04.2010 in case of M/s. Vaibhav Jain and Navneet Kumar Jain group of cases. The notice u/s 153A of the Act was issued on 11.04.2011 and return was filed on 25.10.2012 at Rs. 482642/-. During the course of search it was found that assessee is engaged in the business of providing accommodation entries through bogus purchase bills from the various firms and entities owned and controlled by the assessee. The statement of the assessee was recorded during the search u/s 132, post search proceedings and in assessment proceedings wherein they confirmed that they are providing accommodation entries through bogus purchase bills issued from various entities. The ld Assessing Officer recorded the whole modus operandi of the assessee in paragraph no. 3.2 onwards which is important to understand the facts of the case:- "3.2 Modus operandi of the entry operators was as follows Sh. Vaibhav Jain and Sh.Navneet Jain were operating this business in close association with other operators. Vaibhav Jain and Navneet Jam were operating number of proprietary concerns in name of family memb....
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....Trade INC Sanjay Gupta 25 Shubham Enterprises Sanjay Gupta 26 Vee Vee Enterprises Girdhari Lai Puri 27 My Fair International - Girdhari Lai Puri 28 Supremo Trading Co. Girdhari Lai Puri 29 Mayur Enterprises Tarun Puri 30 Shree Jee Traders Tarun Puri 31 Ansh Impex Vandana Jam 32 Arihant International Rinki Sharma 33 Ess Mart Enterprises Neha- Sharma 34 Meted & Steel Ind. Llilf ' Raj Kumar Arora 35 Navneet Kumar Jain & Sons Navneet Kumar Jain 36 Saraswati Trading Co Poonam Sharma 37 Vee Kay International Vaibhav Jain 3.4 Admission of Shri Vaibhav Jain, Sh Navneet Kumar Jain and other proprietors: During research proceeding search proceeding, post-search proceeding the statement of various persons were recorded, in whose names the paper entities i.e. proprietorship firms were opened. During the assessment proceeding also the statements of key person i.e. Sh Vaibhav Jain , Shri Najvneet Kumar Jain controlling the entire business of bogus accommodation entry were again recorded. All the proprietors and key persons i.e. Sh Vaibhav Jain, Sh Navneet Kum....
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....per/accommodation sale bills and therefore cash was withdrawn from the bank to return the amount so received by cheque to the parties from whom the cheque was received. Apart from the above mentioned these accounts with ABN Amro bank, these are some other bank in the name of M/s Vee Kay International in Karur Vysya Bank, Lawrence Road, New Delhi and Punjab National Bank, New Rohtak Road branch New Delhi. These accounts have been used for some purpose as already stated by one above. Q6. Please state as you have admitted in the answer to Q.No. 5 that you as proprietor of M/s Vee Kay International have been issuing paper bills/ bogus bills, whether any sales tax or other duties have lived by you at the time of issuing bogus bills. Ans. As desired by the purchasers, of the paper bills whish one in the nature of accommodation entries for purchases for the purchasers, the sales tax is included in the sales invoices however the amount of sales tax is return to the purchaser as and when the payment/cheque were received from the purchaser, similarly levy of VAT was also included on the bills when ever desired by the purchase and returned to the purchaser as in the case of ....
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....oncern/firms are concerned, all the transactions in these firms have also been controlled by me. In the transaction in these firms have also been controlled by me. Intact all the transaction in the above mentioned concerns have been made by me. My role was to interact with the beneficiaries and to direct the proprietor to issue the paper bills. The cheques received by me for the paper bills issued by the above mentioned concerns where deposited in the bank and cash was withdrawn and return to the beneficiaries from discussion and control only the proprietor of the above mentioned concern were also receiving part of profit so generated in the transaction of sale of paper bills/accommodation entries done by the above mentioned concerns. Q10. I am showing you the copies of statement of the proprietorship concerns mentioned in your answer to question no.9 of the statement, of the banks accounts mentioned in ABN Amro Bank, Rajouri Garden, New Delhi, Karur Vysya bank Lawrence Road, New Delhi and Punjab National Bank, new Rohtak Road, JTew Delhi. In these bank accounts There are transaction of approximately 600/- crore (Six Hundred Crores). Please explain the nature of transaction and the....
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....pta 4102-115-15516 21. Shree Jee Traders Tarun Puri 4102-115-15573 22. Mayor Enterprise Tarun Puri 4102-115-15585 23. Heer International Himashi Arora 4102-128-22 24. Shri Balaji International Himashi Arora 4102-127-270 25. M/s. Metal and Steel Raj Kumar 4102-127-270 26. M/s. Samayak Trade Inc Sanjay Gupta 4102-115-16854 27. M/s. Subham Enterprises Sanjay Gupta 4102-135-268 28. Vee Vee Enterprise Girdhari lal Puri 1445459 29. M/s. Vee Vee Enterprise Girdhari lal Puri 1300390 30 Ess Mart Enterprises Raj Kumar 142868T ABN.. Amro bank 31 Shree Balaji Traders Himashi Arora 1291794 ABN Amro bank 32 Navneet Kumar Jain & Sons Navneet Kumar Jain 1313320 ABN Amro bank 33 Vee Kay International Vaibhav Jain 1313318 ABN Amro bank 34 Samayak Trade INC * Sanjay 1429368 ABN Amro bank 35 Navneet " Kumar Jain & Sons, Navneet Kumar Jain 1457153 ABN Amro bank 36 Gopal TradingCo. Sanjay 1458704 ABN Amro bank 37 Vee Kay International Vaibhav Jain 1453954 ABN Amro ba....
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....ation entries or paper bill issued to various beneficiaries, Ans. The copies of the sale bills issued by the above mentioned concern were discarded as soon as he transaction related to the respective bills are over. Further no books of accounts of any of the concern have been maintained. However the details of all the sales transaction are reflected in the statement of respective bank accounts in which cheques received from beneficiaries were deposited. I commit and ensure that the complete details of beneficiaries from whom cheques have been received and cash amount have been repaid on account of accommodation entries for purchases provided through the above mentioned concern will be submitted by me shortly. Statement dated 04.06.2009 of Sh Vaibhav Jain Q3. I am showing the following statement received on oath of the person. 1. Neha Sharma Prop. Ess Pee Enterprises, Hanurnan Trading Co. vansh Impex, statement dated 08.05.2009 and 15.05.2009. 2. Renu Sharma Prop. Pleer International, vardhman Enterprises dated 08.05.2009 3. Sh. Tarun Puri Prop. Mayur Enterprises, M/s Shree Jee Traders statement dated 25.05.2009. 4. Sh. ....
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....India) 6. Heer International 7. Mayur Enterprises 8. My Fair International 9. Navneet Kumar Jain & Sons 10. Rajasthan.Metal 11. Om Sai International 12. Rarhji Traders 13. Sarnayak Trade Inc. 14. Saraswati Traning Co. 15. Shivan Metal & Steel Traders 16. Shree Balaji International 17. Shree Balaji Trading Co. 18. Shree Jee Traders 19. ShTee Krishna International 20. Shree Krishna Traders 21. Subham Enterprises 22. Supremo Trading Co. 23. Vansh Impex 24. Vardbma a Enterprises 25. Vee Kay International 26. Veejty.ee Enterprises 27. Vishnu Labricators The above firms having various addresses for which details of the same will be submitted to your office af Jhandewalan later on, Since all the firms have been closed except office at A-94/2 Wazirpur Industrial Area, Delhi is running currently^ have stopped the work of giving accommodation entries for the last two years. Ans. The total quantum of accommodation entries provided by our all I concerns has already Q14. Wh....
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....n and sons buy this concerns is controlled by Shu Vaibhav jain. Please state who operated the bank account and bank account transaction of this concerns. Ans. I signed the cheques of the concerns but Sh. Vaibhav Jain used the cheques and controlled the transaction of the bank account. Q15. You have stated that the firm M/s Navneet Kumar Jain and Sens is controlled by Shri Vaibhav Jain but the documents related to this concerns like bank documents, sales tax returns are signed by you. On what you have stated that this firms is controlled by Sh. Vaibhav Jain. 13. Further statement of Navneet Kumar Jain was also recorded u/s 131 of the Act on 22.02.2013 wherein, he once again confirmed the facts of the case as stated by him earlier. Further, the statement of Mrs. Neha Sharma was also recorded on 08.05.2009 who is the so called proprietor of Ms/ Hari International which is used by these two persons as a conduced firm for providing the bills. She denied having any source of income and stated that she is a house wife. She also denied having open any bank account. in fact according to her statement she does not know anything about the transactions entered into Hari In....
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....ted of account opening form, how Sh. Navneet Kumar Jain make transaction in this account. Ans. Initially, Sh. Navneet Kumar jain had taken my signature on around of 50 blank cheques of above mentioned acenil, through which he had done initially transactions. All the later transaction (if any) must have been done Sh. Navneet Kumar Jain using fake signature. Q12. I am showing you the bank statement of account no. 4102-115-15291 from 17.01.2007 to 21.04.2009 in the name of Suproma Trading Co. maintain karur Vysya bank Lawrence Road Deli, please go through it carefully and state about nature of transaction and the name and complete address of the parties with whom these transaction were mode. Ans. As I already said that through the account is in my name it was never opened by me. Therefore I cant say anything about the nature of transaction and the parties with whom these transaction moan It is submit led that Sh. Navneet Kumar Jain may be able to explain these transaction as he has been opening this bank account from the-beginning. Q16. In answer of question no. 2, you have stated that no PAN is allotted you, However in the account opening form copy....
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....ening form of the above mentioned bank accounts. Ans. As I have already stated that Sh, Navneet Kumar Jain had taken my documents, photocopies and signature on several papers in to the opening of bank accounts in the name of M/s Supremo Trading Co. in Lawrence Road, New Delhi. He may have used these accounts for opening of the other bank accounts. Q6.' Please state whether Sh. Navneet Kumar Jain has operated any other bank account in the name of any of your family members. Ans. Sh. Navneet Kumar Jain has been operating same bank account in the name of two concerns namely (i) M/s Mayur Enterprises (ii) M/s Shree Jee Traders in which my son has been shown as proprietor. The number of bank accounts in the name of the controlled by Sh. Navneet Kumar Jain in the name of my son or . alleged proprietorship concems is not known to me. Q.7 Please state above the nature of business of your son. Ans. My son is petty technical and do some small job of transformer. He is neither income tax payer nor has any PAN his income is below taxable limit. 15. Further, the statement of Shri Sanjay Gupta was recorded on 26.08.2009 who also denied having a....
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.... of these firms lies with Sh. Vaibhav Jain, the assessee was confronted on the issue. The assessee's submission on the issue are reproduced as under:- 3.7.1.1 Reply Dated 08.03.2013 That the turnover of all concerns belong to the respective owner/proprietor (except the firm, controlled by Sh. Navneet Kumar Jain, that is M/s Navneet Kumar Jain & Sons, which firm and transactions are being owned by the assessee. The turnover of other firm/concerns is solely being admitted by the assessee only for the fact that the paper business was being referred to the firms by the assessee. 3.7.1.2 Reply dated 11.03.2013 It is submitted that the details of these paper concerns, whose proprietors were not only as such in name, but also in risk, reward, benefits and liabilities, and the turnover whereof have been offered merely for the limited purpose of facilitating the cause of revenue such that the beneficiaries/accommodation bill seekers could be identified, have already been stated yearwise and concern-wise vide our earlier replies dated 01.03.2013 (page 01) and also vide reply dated 08.03.2012 (page 14). 3.7.1.3 Reply dated 21.03.2013 In this regard, it is submitted ....
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....that the assessee has merely contended that the turnover is being determined for the limited and sole purpose of determining the actual turnover of business which the assessee referred to these 37 (but 1) firms in lieu/want of commission. It is submitted that it can't and should not be thus held out that the assessee was controlling or managing the alleged firm/ entities. 3.7.2 The submission of the assessee were duly considered and are not acceptable. The reason for not accepting the submission of the assessee regarding limited liability of the paper entities are discussed as under: 3.7.2.1 The assessee Sh Vaibhav Jain in his statement which have been reproduced above para-3.5 Have clearly and categorically admitted that he had complete control and subserviced the transactions of all the firms. 3.7.2.2 The proprietors of paper entities in their statements recorded during search proceeding and pre-search proceeding have admitted that they are petty employees of Sh Vaibhav Jain drawing a salary of Rs. 3000/ - to Rs. 5000/- . They have also submitted that these account was opened in their respective names on the pretext of depositing salaries. Subsequently,....
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....e aggregate credits of the aggregate bank accounts of each of the accommodation firm. b) That the aggregate credits can't be said to be the turnover of the assessee, since the transfer entries/mutual entries i.e. transfer of amounts between one firm and another firm have not been reduced by your goodself. c) That there are instances of cheque bouncing (returned/unpaid) and as such single credit has been considered for more, than once. d) That apart from this, the instances of cash deposit, attributable to deposition of same and which also deserves to be reduced from the aggregate turnover estimated by your goodself. That accordingly, after carrying out the above adjustment, the aggregate turnover for the limited purpose of the being considered for applicability of commission rate, Sir, it is submitted that a comprehensive chart showing the name of the paper concerns, name of proprietors, PANs, Bank A/c's wise, assessment year wise reconciliation showing the turnover as determined by your goodself and as for the assessee calculation is being attached as per page 11 to 13. 3.8.1.3 Reply dated 11.03.2013 -In this regard it is submitted ....
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.... 3.8.1.7 Sir, while the above facts can be verified even from proprietors exercise the powers relating to summons, discovery and production availed would be appreciated that around 99.99% of these inter-parties transfer are multiples of ten thousands or lacks i.e. have '0000' or '00000' as the la: fact clearly indicate that transaction does not pertains to sale/purchase la from one bank account of accommodating firm to another account of located in the same branch. 3.8.2 The submission of the assessee regarding total turnover were duly acceptable. The reason for not accepting the submission of the assessee are not acceptable. The reason for not accepting the submission of the assessee are discussed as under:- 3.8.2.1 The details of the year wise turnover of the thirty seven firms in the bank accounts was given confirmed to the assessee to show cause dated 12.03.2013. 3.8.2.2 The assessee in his statements have admitted that the books of account are neither maintained nor is available with the assessee. In absence of books of accounts the trim over has been-taken as the amount which was credited in the respective bank accounts. The assesses bas also....
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.... the facts these accounts also belongs to Vaibhav Jain therefore the transaction of the said banks are also included in the quantum of total accommodation entry provided. In view of the aforesaid fact and discussion the total of accommodation entries provided by the assessee through its 37 firms, in eluding its own firms and other paper firms which were controlled and directed b him. is being determined at Rs. 980,47,33,249/-. for the F.Y. 2004-05 to 2010-11 (Annexure A enclosed) 3.8.2.4 The total of accommodation entries provided during the FY 2005-06 relevant to A.Y. 2006-07 are Rs. 107,40,85,796/- 3.9 Rate of commission to be applied 3.9.1 The assessee was confronted on the issue. The assessee submission on the issue are reproduce as under 3.9.1.1 Sir. it is also submitted that the assessee has been continuously consistently stating, even prior to the search that he has been providing accommodation bills, by charging commission (gross not exceeding 50 paisa) and his net share is somewhere between 10 to 15 paisa. Your goodself .the assessee was able to achieve such a tremendous turnover because of the following facts:- a. Very low rate....
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.... assessee was able to attain such huge turnover only because of meager rate of commission charged by him or the bill. 3.9.1.4 Apart from this, it is submitted that complete Annexure A-3, contains details maintained by a man for this record purpose and represents period only from January 2010 to March 2010 and would not be stated with perfection the total amount of accommodation entry provided wrt commission entry found due to a matter of lone, time back, limitation of human brain and absence of relevant documents. It is further submitted that it was tried at the best by the assessee tu recall the required details and as per the recalling power above chart is prepared : 'towing rate of commission earned. 3.9.1.5 It is submitted that this was the gross commission and was subjected to be shared between the assessee and respective proprietor (around 70-75% would be paid to the proprietor), BCTT expenses, salary of staff, convenience expenses, rent and thus the net commission rate of 10-15 paisa per hundred rupee of paper Bill is duly justified 3.9.1.6 Sir, the list of 37 accommodating firm would reveal that after omitting two firms (i.e. M/s Vee Kay Inter....
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....e % E-3 A-3 138 27.03.2010 37500 Ashna Overseas 2500000 Ashna Overseas 1.50 E-3 A-3- -137 26.03.2010 6000- Jain-Metal-Ind- 400000 Jain-Metal-Ind --------- . ---- 1-50- E-3 A-3 131 22.03.2010 6000 Jain Metal Ind 400000 Jain Metal Ind 1.50 E-3 A-3 131 22.03.2010 1600 Munna Plastic 41600 Munna Plastic 3.85 E-3 A-3 127 19.03.2010 460 Bhagwati Enterprises 23878 Bhagwati Enterprises 1.93 E-3 A-3 127 19.03.2010 6750 Ashna Overseas 450000 Ashna Overseas 1.50 E-3 A-3 127 19.03.2010 ‟ 9558 Bharat Barthan Bhandar 637245 Bharat Barthan Bhandar 1.50 E-3 A-3 127 19.03.2010 1969 Ashna Overseas 131250 Ashna Overseas 1.50 E-3 ' A-3 125 18.03.2010 3662 Jain Metal Ind 244080 Jain'Metal Ind 1.50- E-3 A-3 113 11.03.2010 13460 Global Overseas 1000000 Global Overseas 1.35 E A-3 113 11.03.2010 488 ....
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....bsp; The assessee has not maintained its books of accounts, and details of very limited period is available with the department. Since the assessee has been charging commission @ 1.5% to 3.85% and the average of commission charge on the basis of said documents commission to 1.52%. Therefore it is being held that the assessee has charged commission @ 2% on the total quantum of accommodation entries provided by the assessee. 3.9.2.7 It is also being held that besides commission the assessee has also retained 4%-VAT charged on the invoices, as the assessee has failed to give any evidence regarding refund of VAT to the ultimate-beneficiaries. 3.9.2.8 Thus the total income earned on the accommodation entries provided by the assessee would be calculated @ 6% of the total of accommodation entries provided during the respective years. In the F.Y. 2005-06 relevant to A.Y. 2006-07 the assessee has provided accommodation entries of Rs. 1074085796/-. Profit on accommodation entries provided @ 6.% of Rs. 104085796/- comes to Rs. 64445148/- 3.9.2.9 The assessee must have incurred some establishment expenses for earning of the said income therefore in absence o....
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.... incorporation, till assessment year 2011-12 is being attached. Regarding the other detail of the Companies, as desired by your goodself, it is submitted that the same are beyond the scope / keen of Search assessment proceedings as held by the Mumbai ITAT Special Bench in case of All Cargo Global Login 'at vs. DC If (ITAT Mumbai Special Bench), ITA 5018/Mumbai/2010 dated 00.07.2012 Sir, it is submitted that it seems that your goodself while calling the copies of bank statements, bank books etc. of this company intends to make out an assessment of these companies, which it is submitted even at the cost of repetitions outside the scope of instant assessment proceedings u/s 153 A of the Act." 4.2 The submission of the assessee was duly considered and are not acceptable. In this regard the assessee had filed the details of share capital invested vide letter dated 28.03.2013, without any confirmation or other supporting evidences. In this regard it is submitted that earlier a summon u/s 131 was issued form the investigation wing to Sh. Vinnet Arora a share holder in Ms/ Ans Exim Pvt. Ltd Sh. Vineet Arora in its letter dated 13.08.2010 has denied and submitted ....
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.... with the order of the ld AO preferred an appeal before the ld CIT (A) . The ld CIT(A) gives his finding after considering the submissions of the assessee in para No. 8 as under:- "8. I have considered the facts of the case and the written submissions of the appellant. During the course of search & seizure operation the appellant admitted that he was engaged in the business / activities of providing accommodation entries by issuing bogus bills needy to parties by routing the entries through bank accounts of his own concern and also the bank accounts of the concerns operated in the names of other persons which were controlled by him. The appellant was using all these firms for the purpose of providing bogus sale bills for which he was earning commission. In the statement recorded u/s 131 of the IT Act, 1961 during the course of proceedings u/s 153A on 13.2.2013, the appellant in answer to question no. 2 conclusively readmitted his stand that he was engaged in the business / activity of providing accommodation entries by way of bogus purchase bills. The proprietors of the paper entities in their statement recorded during the search proceedings and pre search proceedings also....
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....s. 5,90,74,719/- after allowing expenses of 0.5% of the gross receipt of Rs. 1,07,40,85,796/-. Here also I do not find any reason to interfere in the order of the Assessing Officer as the appellant did not furnish any material to controvert the findings of the Assessing Officer. Accordingly, considering the facts and circumstances of the case and also the instances of the rate of the commission cited by the Assessing Officer in the chart incorporated in the order, in my view a rate of 2% commission charged by the Assessing Officer is very reasonable. Further, the Assessing Officer was also justified in adding 4% VAT charged from the beneficiaries in the absence of any evidence to show that either the same was refunded back to the beneficiaries or deposited with the trade tax department. 8.3 However, on perusal of the assessment record, I find that the appellant, in his return of income filed for assessment year under consideration, had declared an income of Rs. 5,82,642/- being the profit margin from the transactions of providing accommodation entries under the head income from other sources. The Assessing Officer, as discussed above, worked out the profit from providing a....
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.... submitted as under: "As rightly stated by your goodself the assessee was a Director and/ or shareholder in the above named concerns/ firms Regarding the investment by the assessee in these firms, it is submitted that the same was very nominal. It is submitted Sir, that a summary of the Balance sheet of each of the above Company is attached. It is further submitted that, the Annual Financial statements (i.e., Audited Balance Sheet, P/L A/c, etc.], ITR & Computation of each of above concern/ company since inception/ incorporation, till assessment year 2011-12 is being attached Regarding the other detail of the Companies, as desired by your goodself, it is submitted that the same are beyond the scope / keen of Search assessment proceedings as held by the Mumbai ITAT Special Bench in case of All Cargo Global Logistics Ltd vs. DCIT (ITAT Mumbai Special Bench), ITA 5018/Mumbai/2010 dated 06.07.2012 Sir, it is submitted that it seems that your goodself, while calling the copies of bank statements, bank books etc. of this company intends to make out an assessment of these companies, which it is submitted even at the cost of repetitions is outsi....
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....kh as unexplained investment in the share capital of Ansh Exim (P) Ltd. in the name of Bogus identities. It is submitted that list of shareholders of the company was submitted in the Assessmentproceedings. The Ld. AO without appreciating the fact that Assessee has offered income of Rs. 4.83 lakhs and further income by applying 0.76% rate of commission comes to Rs. 33.95 Lacs the investment of Rs. 1 Lakh is thus covered by the Income so offered as stated above." 12. I have considered the facts of the case and the written submissions of the appellant. The appellant did not give any satisfactory explanation either in the course of search proceedings, assessment proceedings or during the appeal proceedings before me with regard to investment made in the company M/s Ansh Exim Pvt. Ltd. during the year under consideration. Therefore, since the appellant did not controvert the findings of the Assessing Officer, I see no justification to interfere in the order of the Assessing Officer on this issue. Accordingly, the action of the Assessing Officer the making the impugned addition is upheld and the addition made is confirmed." 20. As we have already noted that despite notice of ....
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....e 3 of the assessment order for A.Y. 2006- 07. Renu Sharma is proprietor of M/s Heer International and Shree Krishna International appearing at Sr. No. 16 & 17 on page 3 of the assessment order for A.Y. 2006-07. 8 06.05.2009 Girdhari Lai Puri 9 15.05.2009 Neha Sharma 10 08.05.2009 Renu Sharma 11 18.05.2009 Tarun Puri 12 18.05.2009 Girdhari Lai Puri 13 27.08.2009 Poonam Sharma 4. Since the activity of accommodation entries stood established even during pre search statements of the beneficiaries, proprietors of various concerns, assessee and his father, the only issue that remained was the determination to turnover of the business of giving accommodation entries and the corresponding commission. The AO has dealt with the issue from page 40 onwards. In his statement of 26.04.2010 (page 13 of assessment order for A.Y.2006-07) commission was stated to be from 0.5% to 1% and all the 37 concerns mentioned on page 3 of the order were started to be under the control and management of the assessee. The proprietors of these nnnrprns were nersons of meaere resources and ex-employees, employees, representation by the assessee. As di....
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.... respect of the said additions is being made here as under: 1. ITA NO.3770/D/2014 - A.Y. 2006-07 Ground No.3 In respect of ground No.3 the AO has dealt with the issue from para 4 onwards while the CIT(A) has dealt with it in para 12. The issue involved pertains to the addition for share capital of one of the paper companies through which the assessee gave accommodation entries. The summon u/s 131 to one of the shareholders resulted in denial of application for shares. The corresponding reference is in para 4.2 of the assessment order and on page 18 of the order of CIT(A). Since the issue of accommodation entry through paper companies stand established and the assessee failed to establish the source of share application in the said company the addition of the same is justified. The Revenue also relies on the decision of the Apex Court in the case of Mukundray K Shah reported in 290 ITR 433 as the corresponding addition is consequent to an enquiry related to the evidence found during the search. The Revenue also relies on the decision of the Apex Court in the following two cases on merits of the case. 1. Rick Lunsford Trade & Investment Ltd. v CIT ....
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....llowed 0.5% towards the expenditure incurred by the assessee. Therefore, the ld Assessing Officer computed the income of the assessee of Rs. 64445148/- and granted expenditure deduction of Rs. 5370429/- and computed the net income at Rs. 59074719/-. While adding the sum the ld Assessing Officer has not granted the assessee the relief of Rs. 582642/- as income offered by the assessee. The ld CIT (A) reduced the addition by the above sum. During the course of assessment, proceedings the assessee was examined who repeatedly confirmed about the business. Further, some of the persons who were used as the benami of the assessee were also examined and they confirmed that they do not know anything about the accommodation entries provided by the assessee. As the case of the revenue conclusively proves which is confessed by assessee and his father in various statements as well as statements of the other persons that assessee is providing bogus bills to beneficiaries, it is correctly held that commission income is chargeable to tax in the hands of the assessee. The only dispute is with respect to rates of commission charges. It is apparent that assessee is found to be engaged in issuing bogus....
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....ore, the commission income is required to be computed only at 0.76% also deserves to be rejected. The assessee has not shown any proof of such expenditure and no such proof were found in search proceedings. It was also not shown that what kind of expenditure assessee was incurring and to whom he was paying such expenditure. In view of this we confirm the order of the ld CIT(A) in confirming the addition of Rs. 58492077/- on account of commission income on providing accommodation entries. In view of this, we reject ground No. 2 of the appeal of the assessee. 23. Ground No. 3 of the appeal of the assessee is regarding addition of Rs. 1 lac as unexplained investment in the various entities operated by the assessee. We also do not find any reason to disagree with the order of the lower authorities and the order of the ld CIT(A) where the reasons given were adequate to confirm this addition. in the result ground No. 3 of the appeal of the assessee is dismissed. 24. Ground No. 1 is general in nature and therefore, same is dismissed. 25. In the result ITA No. 3770/Del/2014 for AY 2006-07 of the assessee is dismissed. ITA No. 3771/Del/23014 26. In ITA No. 3771/Del/23014 for ....
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.... for Assessment Year 2006-07 we confirm the finding of the ld CIT(A) in confirming the above addition. Therefore, ground No. 2 of the appeal is dismissed. 38. Ground No. 3 of the appeal is with respect to addition on account of unexplained investment in various concerns of Rs. 5456000/-. For the reason given by us in assessee appeal for Assessment Year 2006-07 in ground no. 3 we dismiss this ground of appeal. 39. Ground No. 1 is general in nature and therefore, same is dismissed. 40. Ground No. 4 the assessee challenged the addition of Rs. 4860000/- on account of unexplained investment in the immovable properties and further investment of Rs. 3771000/- on account of unexplained investment in the properties. 41. The brief facts of the case shows that various seized documents were found during the course of search. In seized documents E-3/A-3, 9, 70 & 77 shows the cash payment receipt Rs. 5654000/- against sale of property No. 298, Manesar, Gurgaon. The assessee tried to explain the above document stating that it is difficult for him to explain this paper. He submitted that beneficiary party Sunbeam Hitech Medicare was coded by the assessee and from that party Rs. 565400/....
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....ged the confirmation of the addition of Rs. 7342022/- on account of commission from accommodation entries. For reasons given by us in appeal of the assessee for Assessment Year 2006-07 we confirm the finding of the ld CIT(A) in confirming the above addition. Therefore, ground No. 2 of the appeal is dismissed. 49. Ground No. 3 of the appeal is with respect to addition on account of unexplained investment in various concerns of Rs. 240000/-. For the reason given by us in assessee appeal for Assessment Year 2006-07 in ground no. 3 we dismiss this ground of appeal. 50. Ground No. 1 is general in nature and therefore, same is dismissed. 51. In the result, appeal of the assessee is dismissed. 52. In the end before parting, we note that the ld Assessing Officer should not have stopped merely at making the addition in the hands of the assessee but should have alerted this scam to various authorities. Because looking to the magnitude of the fraud, it is impossible that it can be carried out if the bankers, VAT authorities, Income Tax Officers and Auditors of those entities have exercised due care in the performance of their duties. There are several bank accounts opened which we....
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....e money ultimately travelled before its withdrawal in cash. Therefore, it is not merely these 37 concerns only but many more parties and entities from whose bank accounts the money are withdrawn. It may also be possible that bank balances on that bank account are not converted into cash by withdrawal but may also further be used by the assessee and his group of accommodation entry providers by further providing accommodation entries to the other parties. It may also happen that cash is never paid to the parties to whom the bogus bills are issued by the mode of withdrawal of cash from those bank accounts. It may also be possible that the bank balance generated in the other parties account are used for further providing accommodation entries who need the share capital, bogus loans and other credits. The revenue has made only part enquiry and unearthed the bogus billing scam of Rs. 650 to 700 crores on search on this assessee. However, if the enquiry is further conducted then it may possibly also show another scam of converting „black money‟ into so called „white money‟. 53. Further, the various state governments have also lost the huge sum of 4% VAT collect....