TaxTMI 
TaxTMI 
2026 (3) TMI 1735
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....ucted in the case of the assessee on 29.07.2017 based on information received from the Central Bureau of Investigation regarding seizure of cash from the assessee. During the course of search conducted at the residential premises of the assessee, cash amounting to Rs.28,00,000/- was found and seized. Consequent to the search, proceedings under section 153A were initiated and the case was centralized with the Central Circle. 3. During the course of assessment proceedings, the Assessing Officer examined bank transactions of several entities allegedly connected with the assessee. The Assessing Officer observed that in earlier proceedings the assessee was found to be engaged in providing accommodation entries through various conduit entities and that similar modus operandi continued during the years under consideration. On the basis of analysis of banking transactions of such entities, the Assessing Officer concluded that the assessee was engaged in providing accommodation entries and earning commission income therefrom. The Assessing Officer therefore estimated commission income at 1.75% of the banking turnover of the entities considered as conduit concerns. Apart from the commissi....
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....ed in law and in facts of the case in assessing bank payments of Rs. 1,83,4291- as unexplained expenditure under Section 69C of the Act. 10. That Ld. AO grossly erred in law and in facts of the case in making addition of Rs. 1,18,52,0001-being cash found by Recovery Officer, SEBI in January 2015, i.e., during FY 2014-15 pertaining to AY 2015- 16 in locker jointly held by assessee with his family members. 11. That Ld. AO grossly erred in law and in facts of the case in making addition of Rs. 1,18,52,000/- to income of assessee despite substantiated fact that the lockers were jointly held by assessee and his family members and cash therein pertained to family members and not to assessee. 12. That the appellant seeks leave to amend, alter, change any grounds of appeal or take any further ground at any time even during the course of hearing of instant appeal." 5. Ground No.1 is general in nature and therefore, requires no adjudication. 6. Ground No.2 is regarding validity of approval u/s 153D of the Act. The assessee has challenged the validity of the assessments on the ground that the approval granted under section 153D was mechanical. The Ld. Authoris....
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....own to establish absence of application of mind. It is settled law that each case must be decided on its own factual matrix and the assessee cannot derive automatic benefit merely by citing decisions rendered in different factual contexts. Accordingly, the ground challenging the validity of approval under section 153D is dismissed for all the years under appeal. 9. Ground No.3 is regarding additions made without incriminating material. The assessee has contended that no incriminating material was found during the course of search. We have examined the orders of the authorities below. The Assessing Officer has proceeded on the basis of seized material including the cash seizure, banking analysis and the continuing modus operandi noted in earlier proceedings. In the facts of the present case, the assessee has not demonstrated that the additions were made in complete absence of incriminating material so as to warrant interference. This ground is therefore rejected. 10. Ground Nos. 4 to 7 are regarding additions of commission income. The Assessing Officer treated the assessee as an accommodation entry provider and estimated commission income at the rate of 1.75% on the total bank....
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.... that rate. 14. Ground No.8 is regarding denying telescoping of assessed income of group entities. The assessee has claimed the benefit of telescoping of income assessed in group entities. It was submitted that in the case of the group concern M/s Empower India Ltd. (ITA No. 3646/Mum/2019 dated 18.12.2020) the Tribunal allowed telescoping of income. Since the issue relating to determination of turnover itself is restored to the file of the Assessing Officer, the claim of telescoping is also restored to the file of the Assessing Officer for examination in accordance with law. 15. Ground No.9 is regarding bank payments assessed as unexplained expenditure under section 69C. The Assessing Officer has made additions under section 69C on account of alleged unexplained expenditure. The Ld. AR submitted that these payments were personal in nature and were made out of drawings and disclosed bank balances, and merely because they were not debited to the Profit & Loss account they cannot be treated as unexplained. We find merit in this contention. The payments were routed through disclosed bank accounts and the Revenue has not established absence of source. The mere non-claim in the Pro....
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.... It is an undisputed fact that the cash of Rs.1,18,52,000/- was found by the Recovery Officer of SEBI in January 2015. Therefore, the money was found in the financial year 2014-15 relevant to A.Y. 2015-16 and therefore should be considered in A.Y. 2015-16. In such circumstances, the addition cannot be sustained in A.Y. 2016-17. 21. The Ld AR has however has argued that the Tribunal does not have power to enhance income by directing assessment in another year .In our considered view, while it is correct that the Tribunal cannot enhance the assessment in an appeal filed by the assessee, it is equally well settled that the Tribunal has the power to direct that an income be assessed in the correct assessment year and in the correct hands, particularly when such year is also the subject matter of appeal before the Tribunal. In the present case, A.Y. 2015-16 is also before us in the present set of appeals. Therefore, directing examination of the issue in the correct assessment year would not amount to enhancement but would merely ensure that the income, if any, is assessed in the correct year in accordance with law. 22. The assessee has contended that the locker was jointly held wi....
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....t holders of the locker and no recovery proceedings were pending against him. It was further explained that the cash found during the course of search was part of the amount released to the father. 28. The Assessing Officer rejected the explanation of the assessee on the ground that the cash was allegedly released in February 2016 whereas the search took place in July 2017 and therefore it was improbable that the father of the assessee would retain the said cash for such a long period. The Assessing Officer further observed that the seized cash consisted of new currency notes and therefore concluded that the explanation of the assessee was not acceptable. The addition of Rs.28,00,000 was therefore made under section 69A of the Act. The Ld. CIT(A) confirmed the action of the Assessing Officer. 29. Before us, the Ld. AR reiterated that the cash belonged to the father of the assessee and was part of the amount released by the SEBI authorities. It was further submitted that the locker in which the original cash was found was jointly held by the assessee along with his father, mother and wife and therefore the assessee could not be treated as the sole owner of the entire amount. I....