TaxTMI 
TaxTMI 
2023 (5) TMI 1186
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....eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the order passed by the learned AO u/s 153A is bad and liable to be quashed as the same has been framed consequent to a search which itself was unlawful and invalid in the eyes of law. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the assessment framed under Section 153A/143(3) are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the assessment order passed by the AO is barred by limitation having been passed beyond the statutory period prescribed in the Act. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the....
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....im an opportunity to rebut same. 14. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of AO despite the fact that the addition has been made by drawing adverse inference against the assessee on the basis of statement recorded without giving assessee an opportunity to cross examine the same. 15. Without prejudice to the above and in the alternative, the rate of commission applied by Ld. CIT(A) is too high and without any basis." 3. Since, the issue involved in ITA Nos. 1319, 1320 & 1321/Del/2019 are similar, they were heard together and being adjudicated by a common order. In ITA No. 1319/Del/2019, the following grounds have been raised by the assessee: "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals)[CIT(A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the order passed by the learned AO u/s 153A is bad and liable to be quashed as the same has been framed c....
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....the basis of extraneous considerations grossly indulging into surmises and conjectures. 11. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of AO despite the fact that the addition has been made by misinterpreting the statement of the assessee recorded on the oath. 12. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of AO despite the fact that the addition has been made by drawing adverse inference, without taking the investigation, initiated by AO, to a logical end. 13. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of AO despite the fact that the addition has been made on the basis of material collected at the back of assessee without giving him an opportunity to rebut same. 14. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of AO despite the fact that the addition has been made by drawing adverse inference against the assessee on the basis....
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....pite the fact that the addition has been made on the basis of material collected at the back of assessee without giving him an opportunity to rebut same. 8. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of AO despite the fact that the addition has been made by drawing adverse inference against the assessee on the basis of statement recorded without giving assessee an opportunity to cross examine the same. 9. Without prejudice to the above and in the alternative, the rate of commission applied by Ld. CIT(A) is too high and without any basis. 10. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the addition of Rs. 3,22,950/- made by the AO on account of gift received from Uncle. (ii) That the addition has been confirmed rejecting the submissions and explanations made by the assessee in this regard." 5. Since, the issue involved in ITA Nos. 2888/Del/2019 to 2893/Del/2019 are similar, they were heard together and being adjudicated by a common order. In ITA No. 2889/Del/2019, the following grounds have ....
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....ase, the Id.CIT (A) has erred in restricting the protective addition at Rs. 2,50,000/- as against the addition of Rs. 2,62,50,000/- made by the AO on account of cash receipts u/s 68 of the Act without considering the fact that the key of car was found in the residence of the assessee and the owner of the car has stated that cash of Rs.22,50,000/- brought to give the assessee but assessee failed to explain the reason as to why he received cash from Sh. Arvind Jain. Also, the assessee has failed to explain why he has received cash of Rs.1,00,00,000/- and Rs.1,37,50,000/- plus Rs.2,50,000/- to D-Mall which refers to Sh. Anand Kumar Jain as he has office in D Mall. 3. On the facts and in the circumstances of the case, the Id.CIT (A) has erred in deleting the protective addition of Rs. 5,00,000/- made by the AO on account of unexplained cash credits without- considering the fact that the assessee has failed to produce directors of the shell concern to verify the identity of the company, genuineness of the transactions and creditworthiness of the concern." 7. The moot issue involved in this case pertain to determination of the commission income of the proven accommodation ent....
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....e alleged shell concerns should be taken instead of both debit and credit. iii. Circular transactions among the concerns have not been eliminated by the AO while computing income iv. Turnover with respect to M/s Ambarnuj Finance Investment Pvt. Ltd. should be eliminated as no adverse inference can be drawn on the transactions of the entities. v. Ad-hoc rate of 2% should be rejected and average rate of commission as coming out of seized material should be applied. vi. The AO has ignored the 'short and excess account' in the Tally Data which represents the total actual commission earned by the assessee and Sh. Naresh Kumar Jain and also the correct amount of accommodation entries given by the assessee and Sh. Naresh Kumar Jain. vii. The short and excess a/c clearly depicts the consolidated commission income earned on the accommodation entries by the assessee and Sh. Naresh Kumar Jain and the expenditure incurred with the respect to the earning of said income. Accordingly, actual commission can be computed based on the data appearing in short and excess account and the same may at best be charged in the hands of the assessee as commission i....
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.... Investments Ltd. 9.7 Further on going through the replies filed before the AO during the course of assessment proceedings under section 153A, it is noticed that the company has submitted the details of loans given, repayment of the same and interest income shown on the same during the year under consideration. The AO has not drawn any adverse inference in this regard in the assessment order. From the above facts, it is evident that in year under consideration, the company was engaged in the business of financing and investment activities which are not doubted by the AO in the assessment order. Further, the returned loss of the company has been accepted and there is no adverse inference/finding of the AO that the company was involved in providing any accommodation entry. In view of these facts, I am of the view that since the business operations of M/s Ambarnuj Finance & Investments Pvt. Ltd. are not in doubt in the year under consideration, therefore, it was not justified on the part of the AO to include Rs. 4,64,29,476/- being the aggregate of debit and credit bank transactions of M/s Ambarnuj Finance & Investments Pvt. Ltd. in the working of the commission income, hence....
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....r) 523,137,544 1,463,935,931 2,694,686,090 3,681,193,690 5,303,052,720 6,030,122,251 - 19,696,128,227 Less: Circular transactions among the shell company 83,550,600 453,336,100 913,688,481 799,494,446 985,521,370 1,606,886,770 - 4,842,477,767 Net Turnover as per Tally Data 439,586,944 1,010,599,831 1,780,997,609 2,881,699,244 4,317,531,350 4,423,235,481 - 14,853,650,460 The above table shows that the appellant has received commission of Rs. 22,06,16,047/- and made payments of Rs. 15,13,2,004/- in short and excess a/c over the period of six years for the total turnover of the six years for the total turnover of the six years of Rs. 1485,36,50,460/- The average rate of commission received on total turnover herein above comes to 1.49% (Rs. 22,06,16,047 / 1485,36,50,460*100). Whereas the average rate of commission paid comes to 1.02% (Rs. 15,13,52,004 / 1485,36,50,460*100). Thus, the net commission rate in the tally data seized is search comes to 0.47%. The appellant in this regard, submitted that receipts net off of paymen....
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....ion. Accordingly, the AO is directed to restrict the addition at Rs. 12,02,355/-." 16. Aggrieved by the order of the CIT(A), the assessee and the Revenue filed an appeals before the Tribunal. 17. Heard the arguments of both the parties and perused the material available on record. 18. We find that the AO himself has given a finding that circular transactions should be eliminated while computing the turnover of accommodation entries. However, while arriving at the turnover of accommodation entries given by the assessee such elimination of circular transactions was left out to be made. The ld. CIT(A) has accepted the working of turnover furnished by the assessee after eliminating circular transactions or transactions on which income had already been offered. The ld. CIT(A) has rightly held that the turnover with respect to M/s Ambarnuj Finance Investment Pvt. Ltd. should be eliminated as the assessment proceedings of M/s Ambarnuj Finance Investment Pvt. Ltd. have been completed and no adverse inference has been drawn against the said company. The ld. CIT(A) has accepted the gross commission income as appearing in short & excess A/c in Tally Data of Jain Folder. However, what....
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....al turnover AY 2010-11 27,66,87,335 115,610,968 55,33,746 12,02,355 5,43,372 AY 2011-12 618,05,53,386 160,105,451 12,36,11,068 16,65,096 7,52,496 AY 2012-13 105,04,22,587 114,700,597 2,10,08,452 11,92,886 5,39,093 AY 2013-14 187,86,43,617 262,717,480 3,75,72,872 27,32,262 12,34,772 AY 2014-15 696,49,99,924 245,616,875 13,92,99,999 25,54,416 11,54,399 AY 2015-16 109,26,08,571 260,228,180 2,18,52,171 27,06,373 12,23,072 AY 2016-17 180,12,05,658 717,246,284 3,60,24,113 74,59,361 33,71,058 Total 1924,51,21,078 187,62,25,835 38,49,02,421 1,95,12,749 88,18,262 20. Reliance is being placed on the judgment of Hon'ble Supreme Court in the case of Reliance Industries Limited Vs. SEBI, 2022 (8) TMI 423 - dated August 5, 2022 wherein it was held that, "57. Before we part with the present appeal, another disconcerting aspect of this case that comes to the fore is SEBI's attempt to cherrypick the documents it proposes to disclose. There is a dispute about the fact that certain excerpts of the opinion of Justice (Retd.) B. N. Srikrishna, were ....
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....directed to give effect to this order accordingly. Before parting we would like to clarify that the determination of expenses and the commission earned is based on the incriminating material specifically found and seized during the courses of search and hence the percentage of commission earned cannot be considered to be the same in other similar cases. ITA No. 2889/Del/2019 Ground No. 2 Protective Addition of Rs.37,95,000/-: 23. The ld. CIT(A) categorically held that out of the amount of Rs.37,95,000/-, the amount of Rs.15,95,000/- from M/s Ambarnuj Finance & Investments Pvt. Ltd. and Rs.8,00,000/- from M/s Star Lifestyles Pvt. Ltd. has been received on account of repayment of advances given by him earlier. Hence, the issue calls for no interference. The ld. CIT(A) held that the remaining Rs.14,00,000/- received from VKS Properties forms part of the turnover of the accommodation entries, the AO may verify the same. ITA No. 2889, 2890 & 2891/Del/2019 Ground No. 3 DVO Report: 24. During the course of search and post search investigation, it was found that the assessee had purchased immovable property being Municipal No. C-9/46, Sector 8, Rohini, New Delhi vid....