TaxTMI 
TaxTMI 
2019 (3) TMI 227
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....ppellant ? c. Does not the impugned order passed by the ITAT suffers from patent and fatal internal inconsistency and patent error of law in as much as the appellant cannot possibly be considered to be both a money launderer and also the owner of the money laundered ? d. Whether the impugned order passed by the ITAT is perverse, arbitrary and wholly unreasonable and unjustified inasmuch as in the case of the other person Surendran Kumar against whom identical allegations of money laundering were made, commission only @1% of the money received was added to his assessed income but not the amount of the money transacted ? e. Is the impugned order of the ITAT perverse, arbitrary, discriminatory and wholly unreasonable and unjustified because in the case of Surendran Kumar the rate of hawala commission was taken as @1% whereas in the matter of appellant same was taken @ 2% without any warrant or justification whatsoever ? 2. The assessee who is the appellant herein had been carrying on a lodge and had also filed returns of income for the assessment years involved in the above case; 2002-03 to 2005-06. An action under Section 147 was initiated on information....
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....ted the position that the assessee was carrying on hawala proceedings, there could be no assessment of the amounts which came into the accounts, and withdrawn immediately, as an unexplained cash credit or unexplained investment. The very allegation of hawala transaction would indicate that the money which came into the accounts did not belong to the assessee; but to those persons to whom it was distributed. In the teeth of the very allegation, there could not have been any addition made on the basis of the peak credit and even the incremental peak credit for an year as directed by the Tribunal is flawed. 6. As to the Commission applied it is argued that one of the other agents who had been implicated in the case by the ED was assessed by another officer in Coimbatore at 1% commission without any addition made under Sections 68, 69 and 69A. In fact, the said assessment orders produced along with the records clearly indicate that the officer had conducted enquiries and found that there was no evidence of assets acquired by the said agent; using the amounts that came into similar accounts maintained by that assessee. In the present case, the Assessing Officer had not attempted any ....
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....hich deposit a loan was sanctioned to one of the partnership firms. The Branch Manager, who opened the account also deposed that, considering the quantum of the loan availed, the bank had insisted for additional security which was provided by the assessee's son. This is another clinching factor in linking the assessee to the bank accounts. It was also the Managers deposition that the assessee was instrumental in opening the deposit account in the name of his son. It has also come out in evidence that eventually the loan account was settled with the 50,00,000/- deposited in the name of the assessee's son. Considering all these evidences, the lower authorities including the Tribunal found that the accounts were opened on behalf of the assessee and the transactions were also regulated by the assessee. We do not find any infirmity in the appreciation of the facts as revealed on enquiry and we refuse to interfere with that in this appeal, where substantial questions of law are to be considered. We do not find any perversity in the fact finding of the lower authorities and no question of law arise. 12. The questions raised are on the additions made as against the assessee; whi....
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....fied. The peak credit as determined in the subject year represented the funds available with the assessee; was the finding of the Tribunal. The Tribunal also held that the deduction could have been made for an outgoing in the form of expenses and investments and the balance amounts should be considered as funds available in the hands of the assessee as income taxable under the Act. We cannot but observe that since there is no explanation offered as to the source or destination of the amounts which came into the bank account there is no illegality in making addition of the peak credit. Of course the same has to be confined to the peak credit in the respective years and not on each of the accounts. This is the only concession possible on the assertion of the Department that the deposits were for money laundering. The destination of the amounts which were deposited and later withdrawn having not been disclosed or substantiated; it is not reasonable to assume that the entire amounts would have been disbursed, with only the commission appropriated. Virtue among thieves is an adage which cannot be imported, as a principle, to statutory assessment of income to tax. 16. Money laundering....