2017 (11) TMI 2088

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....ition made on account of unexplained cash credit u/s. 68 of the Act in the facts and circumstances of the case. 3. Brief facts of the case are that the assessee is a private limited company and dealing with share trading and contractors. The assessee filed its return of income showing total income of Rs. 97,36,280/-. Notices u/s. 143(2) and 142(1) of the Act were issued. In response to said notices, the assessee appeared and filed details. Prior to filing of this return a search and seizure operation was conducted on 10-10-2009 in Badalia Group of cases, wherein huge amount of money was found. Number of bank accounts belonging to Sri M.M. Daga, who is concerned person of the assessee were found. In the 131 proceedings Sri M.M.Daga admitt....

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....s been stated by him in reply to question no.25, that the transactions of cloth trading were to accommodate the entities from whom purchases were shown and commission was earned on the same, which was shown under the head 'provision for expenses'. Thus, it transpires, that the appellant company used to receive cash from beneficiaries and after depositing of cash in bank, account payee cheques were issued as if it was payment against purchase of cloth. Though the assessing officer has observed that this was merely a claim by Shri Chirimar, the same is found to in conformity with the facts and surrounding circumstances as discussed earlier. As mentioned earlier, the assessing officer has not found any genuine cloth business and the ba....

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.... 1961 in the case of M/s. Ashiyana Mercantile (P) Ltd. A.Y.2010-11, which was also related to Badalia group of cases, it was held that rate of commission for accommodation entries was Rs. 250/- per lakh of rupees deposited which comes to 0.25%. The assessment in I the appellant's own case for the subsequent year, i.e. A.Y. 2011-12 had also been completed u/s 143(3) of the Income Tax Act, 1961 on 27.03.2014. In this also income offered at 0.26% had been accepted in respect of accommodation entries. 3.6. Considering all the above mentioned facts, I am of the view that it is not justified to consider the entire cash deposits in the bank account, which were claimed to be out of cloth trading, as income of the appellant. All the fac....