TaxTMI 
TaxTMI 
2021 (3) TMI 106
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....s have been confirmed by the Ld. CIT (A):- AY ITA No. Quantum of Addition (Rs.) Addition on a/c of commission 2011-12 9215/Del/2019 19,46,054/- @ 2% on Rs. 9,73,02,862/- 2012-13 9216/Del/2019 18,31,396/- @ 2% on Rs. 9,15,69,783/- 2013-14 9217/Del/2019 8,89,278/- @ 2% on Rs. 44,4,63,915/- 2014-15 9218/Del2019 60,15,1857- @ 2% on Rs. 30,07,59,258/- 2015-16 9219/Del/2019 26,28,215/- @ 2% on Rs. 13,14,10,732/- 2016-17 9220/Del/2019 34,48,800/- @ 2% on Rs. 17,24,39,987/- 2017-18 9221/Del/2019 22,22,900/- @ 2% on Rs. 11,11,44,981/- 2. The facts in brief are that the assessee-company, M/s. Amarjeet Motor Finance Limited was incorporated on 4.4.1981 initially situated in Jalandhar, Punjab up to 12.11.2010 and thereafter the office was shifted to Delhi in Sector-15, Rohini; and later on w.e.f. 27.04.2017 its registered office again shifted to Pitampura, Delhi and still running at the same address as per information given to the ROC. The company is also registered as NBFC Company vide Registration No.B.06.00513 dated 27.08.2001 with Reserve Bank of India and has been filing its annual return, i....
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....entries to Shri Sanjay Bhandari and his group companies, however, again his premise for drawing this conclusion is not based on any material or information discussed in the assessment order. He called for the bank statements of the assessee-company and KYC documents from Bank of India, DCB bank, Yes bank and Indus Ind bank, New Delhi u/s. 133(6) and on the verification of the same he found that total deposits were as under:- A.Y. Union. Bank Of India, A/c. No. 307801010917938 DCB Bank, A/e. No. 04822700000578 Yes Bank,. A/c. No. 000283900 0 00341 Indusind Bank, A/c, No. 0169- FTO886-050 Total Deposits. 2011-12 3,19,22,182 6,53,80,68 9,73,02,862 2012-13 4.60,41,583 1,10,000 4,54,18,200 9,15,69,783 2013-14 40,36,435 1,10,75,816 29,3 51 44463915 2014-15 30,07,13,987 45,271 30 07,59258 2015-16 13,14,10,732 1735,81 4,10,732 2016-17 17,24,39,987 17,24,39,987 2017-18 11,11,44,981 11,11,44,981 5. From the verification of the bank statement, A....
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....n entries. The prevailing market .rate of commission is 2% to 2.25% on the. total credits in bank account of the assessee. Therefore, an addition of unaccounted commission of Rs. 19,46,054/- in cash is being made @ 2% of total deposits in bank of Rs. 9J3,02,862/- as proposed vide show cause notice dated 17.12.2018. Addition on account of accommodation entries taken by Sh. Sanjay Bhandari and his group companies i.e. M/s. Avaana Software & Services Pvt Ltd., M/s. Saniech IT Services Pvt Ltd., M/s. Santech Investments Pvt Ltd., M/s. OIS Aerospace Pvt Ltd., M/s. OIS Advanced Technology Pvt Ltd.. M/s, Micromet ATI India Pvt Ltd., M/s. Offest India Solutions Pvt Ltd., M/s. Himalayan Helicorp Pvt. Ltd., M/s. S B Hospitality & Services Pvt Ltd and M/s. Santech Energy System & Services Pvt Ltd. will be made. Since the assessee has filed inaccurate particulars of income. I am satisfied that the provision of Section 271(1)(c) of the IT Act, are attracted on the issue and therefore, penalty proceedings u/s.271(1)(c) of the Act will be initiated separately. (Addition of Rs. 19,46,054/-)" 8. The Ld. CIT (A) after incorporating the entire legal and various submissions on merits of the asse....
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....ing accommodation entries. Therefore, I hold that this vital information is an incriminating material to initiate the assessment proceedings u/s. 153A and making consequential addition, Undisputedly, various blank receipts duly signed by the- appellant, company were found at the premises of 8h, Sanjay Bhandari and his group companies for receipt of sale proceeds of shares and repayment of loan. These documents also established that the appellant had already discharged its claim on the share capital/loans given through accommodation entries since, the consideration in cash for the same had already been received by the entry providers. Under these facts and circumstances, the decisions relied upon by the Ld. AR become distinguishable on facts because in those cases particularly in the case of Kabul Chawla (Supra), there was no incriminating material found as a result of search. Accordingly, I uphold the basis of addition, made u/s 153A, Hence additional ground no. 1 and 2 being without any basis are dismissed. 4.2. Other grounds of appeal from. 1 to 4 raised in Form No. 35 are general, in nature regarding validity of assessment and In view of the decision regarding additiona....
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....e, first of all no incriminating material whatsoever was found from the possession of the assessee-company and nothing was recovered from the registered office of the company. Even the additions which have been made are not based on any incriminating material found from assessee's possession which can be said to be relating to result of any search. In so far as the allegation made by the AO that the assessee-company was found to be non-existent at the address given, is incorrect. The registered office of the company as per records was duly shown and disclosed in the statutory records. And all the communications have been received by the company at the said address only. Later on, the address of Rohini was shifted to unit number 205, second floor, Aggarwal city Mall, Road No.44 Pitampura, Delhi. It has been filing the return of income with Income Tax Department, ROC and RBI from its registered office since beginning, and therefore, such an allegation of the AO is completely baseless. One very important fact, here in this case, is that which is also evident from the assessment order that, neither the search was conducted on the directors of the company nor on any official or authoriz....
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....ng to the assessee was not covered in the search and it has no relation with the Sanjay Bhandari Group (searched group) in any manner. In response to this, the Hon'ble member raised certain queries with the department to be requisitioned from the concerned Assessing Officer. The AO has submitted response to the queries raised by the Hon'ble Member. The same is as under:- S.No. Query Clarification 1. Whether the assessee /premises belonging to the assessee was covered during the search operation on the Sanjay Bhandari Group Yes the case of the assessee was covered during the search operation u/s 132 of the Income Tax Act of 1961. on 27.04.2016 along with other cases of Sanjay Bhandari Group 2. If the assessee premises belonging to the assessee was covered in the Search operation of Sanjay Bhandari Group? What was the basis of search and the finding there upon of that search? The department was in possession of information that group companies of Sanjay Bhandari (namely SB Hospitality & Services Pvt Ltd, Avaana Software & Services Pvt Ltd, Micromet ATI India Pvt Ltd etc.) have taken bogus entries of share capital along with huge premium. Shri Sanjay....
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.... Amount (Rs.) 2015-16 26,28,215/- 2016-17 34,48,800/- 2017-18 22,22,900/- 5. In case the assessee/ premises belonging to the assessee were covered in the search of Sanjay Bhandari Group the relevant copy of Panchanama drawn, copy of authorization / warrant etc. may be provided to the Hon'ble Bench. Copy of warrant of authorization u/s.132 No.5516 dated 27.04.2016 is enclosed. 2. Further, it is submitted that the facts of the present case are peculiar. It is a case where search & seizure action took place at the given address of the appellant company. However, during search action, it was found that no such company was running at the given address. Finding of a fact during search action that the said company is only on paper further gets corroborated from the fact that this company was managed by accommodation entry provider Sh. Deepak Aggarwal. Going by the principle laid down by Hon'ble Delhi High Court in the case of Kabul Chawla (ITA No. 707/2014) regarding finding of incriminating evidence, it is to highlight that the fact of non-existent company is an incriminating information gathered during the search & seizure action. The s....
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....nd his group companies for which list of 10 companies have been given will be made in their hands, however what has been the fate of the assessments or additions made in hands of these companies has not been brought on record before us nor there is any whisper in the impugned appellate order or in the report submitted by the Assessing Officer, before us. 16. From the perusal of the records, it is seen that, firstly the assessee-company is very old company incorporated way back on 4th April, 1991 and has been duly registered as NBFC with RBI. Since then Assessee Company has been regularly filing its return with Income Tax Department, under the Income Tax Act, Returns with ROC under the Companies Act and also before RBI, being NBFC. It has been regularly filing its return of income along with audited accounts. The balance-sheet as on 31st March, 2011 reflects share capital reserve and surplus of more than Rs. 20.65 crores. It has investments of more than Rs. 18.27 crores and loans and advances given for the business purpose was at Rs. 2.43 crore and cash and bank balance of approximately Rs. 10 lakhs. The interest income has been shown at Rs. 19.65 lakhs. Same is the position in a....
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....of all, the Department has to establish that assessee-company was providing accommodation entry especially when during the course of search in the case of assessee nothing has been found that assessee was indulged in any kind of accommodation entry. If at all there was any information of third-party case then without bringing on record as to what inference has been drawn against the assessee in those cases or any substantive addition have been made in those cases, notional addition cannot be made in the hands of the assessee. 18. The contention of ld. CIT-DR is that the assessee-company was not found at the given address during the search, and itself constitutes an incriminating evidence cannot be upheld, because when an action has been taken under section 153A then the basic premise is that the addition has to be based on something found or unearth during the course of search in the case of the assessee for a particular assessment year especially in the case of unabated assessment. Here, in this case, the assessment for the Assessment Year 2011-12 to 2015-16 had attained finality. The period for the assessment year 2015-16 and 2016-17 nothing has been found from any enquiry or ....