2023 (10) TMI 1025 - ITAT DELHI

Assessment u/s 153A - Income from Trading - difference between the receipts and payments as the undisclosed income of the assessee - AO has also determined the unaccounted investment - HELD THAT:- AO having determined the unaccounted investment has also held that since the unaccounted receipts was the source of making above investments has already been brought to tax, no separate addition is required to be made, thus interpolating the unaccounted income with unaccounted expenditure.

Income from Commission - AO held that the assessee has acted as a facilitator for providing accommodation entries and commission as per prevailing market rate @ 2% of the amount has been determined as the undisclosed income of the assessee - CIT(A has confirmed the addition made by the AO to the tune of the peak credits and deleted the addition equivalent to the amount which is the rotation of the monies - addition made of the difference between the receipts and payments was re-determined by the ld. CIT(A) resorting to the peak theory and determined the undisclosed amount to Rs. 19.86 Cr. - HELD THAT:- We find that the ld. CIT(A) has made addition of expenditure incurred by the assessee reflected in the same excel sheets wherein the receipts and payments have been found out. The excel sheets reflect receipts, payments and expenditure. The expenditure as found in the excel sheets as determined by the Assessing Officer and allowed by the Assessing Officer

We find that the investment in E-24 has been made in the name of Sh. Sanjay Gupta and the property has been duly registered in his name. The investment in property cannot be said to be a part of the expenditure incurred for earning of the income. Since, Sh. Sanjay Gupta is the owner of the property and all the documents are in the position of the revenue authorities, the same should have been rightly taxed in the hands of Sh. Sanjay Gupta. We make it clear that this amount of investment in E-24 cannot be considered as application of income or expenditure incurred for earning the unaccounted income.

Also been informed by the ld. AR that the amounts allegedly earned by different clients has also been taxed in the hands of different assessees.

Expenditure incurred at serial no. 2 & 3 as depicted in the table above pertains to Renovation of Flat at Common Wealth Games Village which is an asset of the assessee company and Expenses made in Mumbai & Kolkata Offices are can be considered as unaccounted expenses made out of the unaccounted income earned and determined. Similarly, the payments made to Omega Securities, OFT/Option Fintech, miscellaneous office and personal, salary payments and payments made to Sh. Vinay Jain which are the part of receipts of Rs. 157,48,09,680/- and payment of Rs. 144,00,97,270/- stands interpolated in the determination of unaccounted income of Rs. 19,86,12,311/-.

No separate addition on account of expenditure such as office maintenance, software expenses, salary payments made for earning of unaccounted income of Rs. 19,86,12,311/- is required to be made on account of expenditure. The order of the Assessing Officer is affirmed on this issue.

All assessee arguments are found to be against the facts on record and the panchnama drawn. The panchnama drawn on the date of search clearly establish the seizure of material. This issue cannot be raised at this point in time before us. Hence, the technical grounds raised by the assessee are hereby dismissed.

Commission Income earned by the assessee for facilitating normal accommodation entries - We find that these are the entries given by the assessee to various parties by utilizing the services of different broker as mentioned in the seized material on account of short term capital gains which do not form part of the receipts and payments mentioned above which have been already considered separately. Hence, we hold that the commission charged by the Assessing Officer is not on ad-hoc basis but taking into consideration the prevailing market trend in providing such accommodation entries. Keeping in view the facts, we hereby affirm the order of the ld. CIT(A).