TaxTMI 
TaxTMI 
2016 (3) TMI 1449
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....n behalf of assessee & submitted the necessary details & clarifications as placed on record. The.details submitted were discussed with him. 2. A survey operation was conducted in the S.K. Gupta group of cases on 20.11.2007 at 308, Arunachal Building, 19, Barakhamba Road, New Delhi - 110001 and 1007-1008, Arunachal Building, 19, Barakhamba Road, New Delhi - 110001. The assessee company is one of the group concerns of S.K. Gupta Group. During the course of survey proceedings and assessment proceedings. Sh. S .K. Gupta admitted that he had been providing accommodation entries to various persons through a large no. of concerns effectively controlled by him. Further, it was seen that Sh. S.K. Gupta operates a number of accounts in the same bank/branch or in different branches, in the names of companies/firms/proprietary concerns and individuals. For the operation of these bank accounts, persons who are filing income tax returns are roped in. Like any other business it does require man power according to the scale of operations. Except for two or three persons who are required regularly to visit banks and do other work like collection of cash etc. most of the other persons invol....
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....income or the copy of the bank statement of the creditor, from which the amount has been advanced to the assessee i.e. the assessee could not establish the identity of the creditorf (s) creditworthiness of the creditor(s) &. the genuineness of the transaction(s) as required u/s 68 of the I.T.' Act in respect of any of the sum credited in its books of accounts during the FY 2007-08. 3.2 The assessee is maintaining following bank account during the F.Y. 2007-08, showing total deposits as under.- Sl. No. Name of the Bank Account No. Deposits (in Rs.) 1. OBS 05621011001579 19,24,09,627 2. HDFC 024 O.B. 3. PNB 2100064026 3,98,40,213 4. PNB 3342002100024473 45,46,20,608 Grand total 68,68,70,448 3.3 Further, vide questionnaire dated 2.12.2010 the assessee was asked to explain the source of all deposits in its bank accounts including by cash, cheques, transfer (intra bank) etc. Indicating the names and address of the depositor/ creditor & also to prove the creditworthiness of the creditors) & the genuineness of the transactions u/s 68 of the IT Act & asked to show cause why in absenc....
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.... New Delhi for A.Y. 2004-05 where he has directed the Assessing officer not to make any addition in respect of these conduit companies and he has directed the Assessing Officer to make addition in the hands of Sh. S .K. Gupta for entire cash received and in the hands of beneficiaries from whom alleged cash has been received. The direction of the additional commission of income tax, Central Range V, New Delhi have been complied by the Assessing Officer for the said assessment year. I have examined the merits of the direction u/s 144A issued by Addl. ClT, Central Range-V, New Delhi dt.23.11.2011.Additional CIT, Central Range-V, New Delhi has nowhere in his findings has stated that the name of the beneficiary are' contained in the seized material. He has given an instance of the mediator who has brought cash to Sh.S.K. Gupta for conversion from cash to cheque. Therefore, the claim of Ld. AR that the detail of beneficiaries was contained in the seized material does not appear to be truth. In absence of mention of the beneficiaries who has brought cash in impounded document, the source of cash cannot be explained on the basis of impounded materials. Further, nowhere, the be....
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....books of accounts and closed the books of account and filed its return of Income for A.Y.2008-09 much after the survey action. In fact, it is surprising that as additional evidence, Ld.AR has given confirmation from the beneficiaries for money received for such beneficiaries to explain the source of credit in the books of accounts. Therefore, tile appellant company at one hand is pretending that it is a conduit, therefore, even though there are credits in its books of account, section 68 does not' apply and on other hand, it is trying to prove entries contained in the books of accounts. These stands in my view are contradictory to each other. Second main argument of Ld. AR in support of proving itself as conduit, the Ld.AR is relying on the order of the: settlement commission. I have perused the order of Hon'ble settlement commission. The hon'ble settlement commission has quantified the income of Sh. S.K. Gupta as some percentage of total turnovers, Of course, in its order, hon'ble commission has mentioned that various companies including appellant company is used as conduit for routing the entries. However, before settlement commission, entire fac....
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....sh credit through this has been declared as income in the Return of Income. Therefore, the said sum has been taxed twice. The Ld. assessing officer has reported that exact bifurcation of interest income earned has not been provided by the appellant. In my view as the books of accounts of the appellant is not reliable as the appellant itself claims. Therefore, authority of its books of accounts is not reliable. Hence, in my view such relief cannot be given. (v) Transfer for one bank accounts to other bank account : Ld. AR argued that certain amount has been transferred from one bank account to another bank account of the appellant. This amount has been twice in both the account separately u1s 68 of IT Act. In my view in this case also, as the appellant itself claiming that the Books of account is not reliable, no relief can be granted for such transfer. (vi) Similarly, ld.AR claimed that certain FDR amount has been matured and credited in the books of account. The Ld.AO has treated those amount also u/s 68. As I have held earlier that the books of account of the assessee is not reliable. Therefore, such claim is not entertainable. In view of the above, add....
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....e times; 6) That without prejudice to the other grounds the authorities below erred both on facts and in law in making an allowance of only Rs. 5,21,35,000/- pursuant to transfer of funds from one account to another without appreciating the fact that a much larger amount of funds had been transferred from one bank account to another; 7. That without prejudice to the other grounds of appeal the CIT (A) erred both on facts and in law in confirming the protective addition of Rs. 19,55,41,190/- as made by the Assessing Officer; 8). That the CIT(A) erred in not allowing relief in respect of: a) Rs.l ,50,87,000/-on account of transfer of FDR to Bank account; b) Rs. 12,64,797/-on account of interest received on FDR; 9) The appellant craves leave to add, alter, amend, substitute, delete and modify any or all the grounds of appeal, which are without prejudice to one another, before or at the time of hearing of the appeal." 4. We have heard Shri K.Sampath, the Ld.Counsel for the assessee and Shri Ravi Jain, CIT, D.R. on behalf of the Revenue. On a careful consideration of the facts and circumstances of the case, perusal of material on ....