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2026 (2) TMI 873
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....it Society Ltd. From the analysis of ITR and ITS details / 360 degree profile of the assessee, the Assessing Officer noted that the assessee in his return of income has not declared true and correct picture of income and the sources of cash deposits are not explainable. Accordingly, the Assessing Officer, after recording reasons, reopened the assessment as per provisions of section 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') and issued notice u/s 148 of the Act. 3. During the course of assessment proceedings, on being questioned by the Assessing Officer, the assessee submitted that the cash has been deposited out of sale proceeds of agriculture equipment. The assessee also furnished a copy of Profit and Loss Account and Balance Sheet. However, the assessee did not furnish any documentary evidence to prove that the sale proceeds have been deposited in the bank account. In absence of sale bills or purchase bills, the Assessing Officer rejected the plea of the assessee and treated cash deposit of Rs. 32,25,000/- as undisclosed income of the assessee for assessment year 2013-14. He accordingly determined the total income of the assessee at Rs. 45,97,420/- ....
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....uing a notice u/s 250 requesting him to file any such submission along with documentary evidence. The appellant was given another opportunity by issuing a notice u/s 250 asking Copy of ITRS, PAN No. of parties, Copy of ledger A/c and written documentary proof of such purchased order or any other documents related to contract for purchase entered between you and the vendors. But appellant was failed to provide the comprehensive documents of proof documents to prove his claim. In the submission made the appellant has in addition to ITR. The appellant has not provided for furnished copy of contract agreement entered with Maharashtra Agro-Industries Development Corporation for supply of krushivator to him in his capacity of dealer as claimed for the relevant A.Y. 2013-14, nor has he provided list of krushivator supply to the customers. In conclusion the appellant has failed to provide crucial details about the nature source and party wise details of deposits made in to his account number. The ledger account copy of Latur division and its head office division do not help to give tectonic evidence with regard to persons from whom he has received the payment including cash. The onus was o....
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....ble. 4. The Learned AO erred in law and on facts in initiating reassessment proceedings u/s 147 of the ITA,1961, when the foundation of such proceedings was a search and seizure action conducted u/s 132 of the ITA, 1961 at the premises of M/s. Renuka Mata Multi State Urban Co-Operative Society Credit Ltd. The assessment, if any, ought to have been initiated u/s 153C of the ITA, 1961. As such, the impugned notice issued u/s 148 is without jurisdiction, bad in law, and liable to be quashed. 5. The Appellant contends that he is entitled to get the benefit of peak credit of additions u/s 69, worked out on item-to-item basis of each of cash withdrawals and cash deposit transactions and accumulated on a chronological basis. Appellant further contends that the benefits of principles of telescoping and peak credit addition ought to be extended to the Appellant. 6. Appellant craves leave to add, alter, clarify, explain, modify, delete any or all of the grounds of appeal, and to seek any just and fair relief. 6. Identical grounds have been raised by the assessee in the remaining 2 appeals. 7. The Ld. Counsel for the assessee at the outset did not press ground....
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.... ii) M/s. Laukik Paper Industries Pvt Ltd. vs. DCIT vide ITA Nos.507 to 510/PUN/2020 and 301 to 303/PUN/2021, order dated 24.04.2023 iii) Geetaben Dineshchandra Gupta vs. ITO reported in (2022) 441 ITR 698 (Guj) iv) M/s. Goldstar Finvest Pvt Ltd vs DCIT vide ITA No.7564 to 7570/MUM/2014 order dated 24.08.2016 v) PCIT vs. Alag Securities Pvt Ltd reported in (2020) 425 ITR 658 (Bom) 10. He accordingly submitted that a reasonable rate of profit may be adopted instead of making the entire deposits as income of the assessee. 11. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. He submitted that the assessee was unable to explain the nature and source of the cash deposits made in the bank account. The assessee did not file copy of the ITRs, PAN numbers of the parties or any documentary evidence towards purchase and sale of the equipment as claimed by the assessee. Therefore, under the facts and circumstances of the case, the entire amount of Rs. 32,25,000/- should be added to the total income of the assessee. 12. We have heard the rival arguments made by both the sides, perused the orde....
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....ata Society to open the bank account in the name of the assessee, since the assessee was approached by the Manager of Bhavnagar Branch of Renumata Society Bank, who had told the assessee that if the assessee allowed the Renukamata Society to open / operate a bank account in the name of the assessee with Renukamata Society, this would entitle the assessee to avail financial assistance in the form of loans for future as and when the same is required and applied for. Further, the assessee was assured that the assessee would also be suitably compensated for such assistance provided to the Renukamata Bank. Accordingly, it was on the basis of these assurances that the assessee kept on signing blank forms, cheques, other documents, papers etc. which were produced before him from time to time. Accordingly, the Counsel for the assessee submitted that though the assessee allowed the Renukamata Bank to open and operate bank account in his name, the assessee has not deposited any money in the bank accounts maintained with Renukamata Society and neither has the assessee withdrawn any amount from these banks. Further, the Counsel for the assessee submitted that the assessee also did not have any....
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....h income. Further the Counsel for the assessee placed reliance on the case of Chintan Niketan Bhandari vs. DCIT (in IT(SS)A Nos. 495 to 500 & 1604/Ahd/2019) in support of the contention that only a reasonable percentage, if any, should be added in the hands of the assessee and the entire amount cannot be added as the income of the assessee. 10. Further, the Counsel for the assessee drew our attention to Page 11 of the Paper Book and submitted that even the list of beneficiaries to these accommodation entries is within the knowledge of the Department and accordingly, it would be wholly erroneous to tax the entire income in the hands of the assessee, when it is known to the Department, that the assessee is only a name lender and the real beneficiaries of such transactions are other people, who are behind the entire racket, by using the name of various innocent people, including the assessee. 11. During the course of arguments, we had requested the Department to furnish a copy of the Investigation Report, on the basis of which the reassessment proceedings were initiated against the assessee so as to facilitate the Bench in adjudicating the issue, which is before the ....
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....961was carried out in case of the assessee M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. (in short Society/SRMSCS) (PAN: AADAS7782D) on 26.05.2017 and subsequently the case was centralized with this charge. During the search, it was found that the huge money was deposited in the bank accounts maintained in the society and during the course of assessment proceedings the society could not explain the source for the same. The main allegations against the society leading to search action are as under: i. The society has allowed huge cash deposits in the account of its account holders whose creditworthiness is doubtful. ii. Pre-search, post search and assessment stage inquiry in respect of account holders, in whose accounts substantial cash deposits were made, most were either untraceable or person of very no/low means. Modus Operandi found during the Search & Assessment proceedings: As per the enquiries conducted by the Investigation Wing and by this office, the modus operandi is that various accounts were opened in the co-operative society. Huge cash deposits were made at home branch of the customer of SRMUCS as w....
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....sed excel sheet contains Name (surname first) and PAN of the assessee's along with their account numbers of account held by them in the Society. Financial Year-wise credits have been provided in lakh rupees. It may kindly be noted that majority of the deposits are in cash only. 5. As per the ITBA based PAN query, the PAN jurisdiction of the assessee lies with your charge and accordingly the information is shared with a request to make further investigation to verify the credit-worthiness in the above-mentioned account along with source of credit entries and to take necessary remedial action at your end. Provisions under Prohibition of Benami Property Transactions Act, 1988 may also be kept in mind while taking suitable action. 6. While taking remedial actions, kindly take note of following points: (i) Most of the depositors are Non-filers. (ii) Even in cases where ITRs are filed, these amounts of deposits are not reflected in the ITRs." 13. Further, it would also be useful to reproduce the relevant extracts of another report dated 13.10.2017, which would throw useful light in respect of the issue under consideration before us:- ....
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....nuine business activity. These bank accounts were operated by persons whose identity is yet not established. The, details of these shell entities along with amount transferred from the society are being tabulated as under: Name of entity Amount transferred from accounts with Mumbai branch of society Azure Enterprise Prop. Neeraj Rajkumar Singh 139.63 Cr. Fine Touch Impex Prop. Dhannanjay Nikam 73.6 Cr. Iconic Enterprises Prop. Siddharth Keshav Gaikwad 54.2 Cr. Seabird Enterprises Prop. Vinayak Ranjan Thakre 53.52 Cr. Zillion Enterprises Prop. Shaikh Mukaram Iqbal 16.27 Cr. Om Enterprises Prop. Ravi Ashok Prajapati 9.7 Cr. Grafik Traders Prop. Saniket C. Nanavare 4.16 Cr. Sai Impex Prop. Harkut Harinarayan Dhanjay 9.38 Cr. Jolly Collections Prop. N. N. Raut 5.18 Cr. Nishica Impex Pvt. Ltd. 15.2 Cr. Globus Corporation Prop. Harkut Harinarayan Dhanjay 3.12 Cr. Irfan Trading Company Prop. Irfan Shaikh 2.54 Cr. R C International Prop. Chetan Vinod Thakkar 6.33 Cr. Riya Enterprises Prop. Nitin Pradeep Gaurav 1.85 Cr. e) At Ahmadabad branches of society, specific instances of non-proper main....
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....his tax return and accordingly revised his return of income and paid taxes thereon. On these facts, we are unable to countenance the action of Ld. CIT(A) seeking to justify the additions by way of unexplained monies being made u/s 68 of the Act in the hands of the assessee society, based on this spot verification report which does not incriminate the assessee qua the cash deposits made by these depositors qua these relevant AYs in these appeals. 48. It is further noted that, the Ld. DDIT(I&CI) was of the view that the assessee was flouting the norms of prudent financial irregularities by accepting such high value cash deposits without first verifying the source of funds and creditworthiness of the account holders. To this, the Ld. AR submitted that these observations were their own subjective inferences of the DDIT(I&CI) and were not based on any tangible material or cogent evidence against the assessee. The Ld. AR explained that, the assessee being a cooperative credit society was providing banking & credit facilities to its members. In terms of the Multi State Cooperative Societies Act, 2002 read with Part V of the Banking Regulation Act, 1949, the assessee society was o....
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.... Ltd. (supra), we are of the considered view that the assessee was not the real beneficiary of substantial cash deposits / credits which were made in his bank account held with Renukamata Society. From the above facts placed on record, it is observed that these bank accounts were being operated in the name of the assessee by the real beneficiaries / depositors, in collusion with Renukamata Society and the assessee, cannot be saddled with the ownership of the entire income deposited / credited in his bank account with Renukamata Society. 16. This brings to the next question as to what could be the reasonable amount which could be held to be taxable in the hands of the assessee, for allowing the Renukamata Society / real beneficiaries to operate the bank accounts, held in the name of the assessee. In the case of Geetaben Dineshchandra Gupta v. ITO 129 taxmann.com 346 (Gujarat), the Gujarat High Court made the following observations: "Thus, considering the totality of facts and the circumstances of the instant case visa-vis considering the settled legal position, it appears that there is direct nexus/live link between the material coming to the notice of the Assessin....
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....ated 22.05.2020 has adjudicated on both the issues. The addition being protective in nature has been deleted by the order of the Tribunal. The commission charged @3% has been brought down to 0.5%. 6. Since, the issues stands squarely covered by the earlier order of the Tribunal in the absence of any material change and the facts of the case except the amount involved, we hereby hold as under: a) The addition made on protective basis is directed to be deleted b) The commission to be charged @0.5%" 19. In the case of Chintan Niketan Bhandari v. DCIT IT(SS)A Nos. 495, 496, 497, 498, 499, 500 & 1604/Ahd/2019, the jurisdictional Ahmedabad ITAT vide order dated 29-11-2022 held that since the assessee failed to provide complete details regarding the commission income, the commission income may be computed @ 0.25% in the hands of the assessee. While passing the order, the ITAT made the following observations: "8.2 Now coming to the instant facts, we observe that the assessee has been running several concerns in the name of himself and in the name of other persons who are engaged in the activities of taking cheques and cash and deposited the same....
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....ted that it has earned commission income, however, no details regarding the commission income earned by the assessee was furnished to the Department during the course of assessment or appellate proceedings. As held in the judicial precedents highlighted above, if the assessee is submitting that he is liable to be taxed only on the commission income so earned, then the onus is on the assessee to provide the basis as to how such commission income has been arrived at and also to provide list of beneficiaries and other details so that whether the correct amount of "commission income" has been offered to tax may be verified by the Department. However, the assessee has not maintained any books of accounts, has not maintained cash book and bank book, he has not submitted any details of parties from whom the commission income has been earned, the assessee has not given any supporting documents to corroborate the correct rate at which commission income may be computed and the assessee has also not provided details/ list of parties who have made deposits to the tune of Rs. 158 crores in the bank accounts held by the assessee. The assessee has not come up with any details to substantiate its ....