TMI Blog2024 (2) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... e above arrangement of funds is nothing but part of modus operandi of the accommodation entry provider to introduce the unaccounted funds of the beneficiaries in their respective bank accounts. AO also in the assessment order has observed that the appellant company was a conduit company operated by Sh. Naresh Jain and Anand Jain to provide accommodation entries to various beneficiaries and said beneficiaries have already been identified. Accordingly, when the beneficiaries were identified, the addition in such cases can at best be that of commission earned on such accommodation entries. As far as charging of commission is concerned, it has been held in the case of Sh. Anand Jain and Sh. Naresh Jain that they were entry operators who were managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission. Hence, no addition on account commission is called for in this case. Since the assessee company is a conduit, the substantive addition has to be made in the name of the parties mentioned above as per the list given by the ld. AR. Hence, we hold that the ld. CIT(A) has rightly deleted the addition made on protect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) has erred both on facts and in law in rejecting the explanations brought on record by the assessee to explain the nature of credit of the transactions. (ii) That the abovesaid addition has been confirmed ignoring the fact that the addition has been made by the AO based on suspicion only. 6. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in holding that the assessee is involved in providing and taking accommodation entries in the form of share application money or unsecured loans. 4. For the sake of ready reference and completeness the order of the CIT(A) consisting of facts of the case and the adjudication thereof is reproduced below: 5. In Ground nos. 1, 2, 3, 4, 5, 6 and 7, the appellant has challenged the validity of the proceedings initiated and assessment order passed under section 153C of the Act. In this regard, it is noticed that there has been a search action in the case of Sh. Anand Kumar Jain and Sh. Naresh kumar Jain under section 132 of the Act. In the assessment proceedings of the searched person, the AO of the searched person noticed that some documents also relates to the appellant company and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espective cases. 6.1. The appellant in its written submission has tried to substantiate the genuineness of the credit transactions on the basis of documentary evidences submitted before the assessing officer. The appellant submitted that during the course of assessment proceedings it has discharged its onus u/s 68 of the Act by submitting documentary evidences in the form of confirmation, ITR acknowledgement, bank statements, Company master data of the companies, from whom funds were received during the year, in order to prove the identity and credit worthiness of the lender company and genuineness of the transaction. 6.2. In alternative, the appellant also submitted that even if the allegations and observations of the AO in the assessment order is assumed to be true then also there cannot be any addition in the hands of the appellant. The appellant in this regard has also submitted a fund flow statement depicting the source of funds and utilization of the same for payments to alleged beneficiaries. Accordingly, the appellant submitted that when the alleged beneficiaries are identified then no addition can be made in its hands since it has only acted as a conduit as has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount(Rs.) Name of the party Date of payment Amount (rs.) 25.10.2012 Shubh Laxmi 1446934.00 Anush Finlease Construction 26.10.2012 1400000 25.10.2012 Shubh Laxmi Director remuneration 05.12.2012 15000 25.10.2012 Shubh Laxmi Richa portfolio pvt Ltd 18.12.2012 25000 25.10.2012 Shubh Laxmi Deepali Impex Pvt Ltd. 12.03.2013 1150 25.10.2012 Shubh Laxmi Other expenses 31.01.2013 2074 25.10.2012 Shubh Laxmi S. Udit securities Pvt Ltd 29.03.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.01.2013 NEELAM AGGARWAL 500000.00 Diverse Infotech P Lted 24.01.2013 50000 30.01.2013 Shubh Labh Traders 1750000.00 Rimpy Bansal 31.01.2013 500000 30.01.2013 Shubh Labh Traders Dinesh Modi 31.01.2013 1250000 22.02.2013 Kumar Brothers co. 2500000.00 Jemini trading 22.02.2013 2500000 08.03.2013 HDFC Bank 21000.00 Deepali impex pvt ltd 12.03.2013 2304300 09.03.2013 Shubh Labh Traders 1000000.00 Anand goyal 09.03.2013 1000000 12.03.2013 Shubh Labh Traders 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of modus operandi of the accommodation entry provider to introduce the unaccounted funds of the beneficiaries in their respective bank accounts. Further, the AO also in the assessment order has observed that the appellant company was a conduit company operated by Sh. Naresh Jain and Anand Jain to provide accommodation entries to various beneficiaries and said beneficiaries have already been identified. Accordingly, when the beneficiaries were identified, the addition in such cases can at best be that of commission earned on such accommodation entries. But as far as charging of commission is concerned, it has been held in the case of Sh. Anand Jain and Sh. Naresh Jain that they were entry operators who were managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission. Accordingly, taking that logic there is no question of charging of commission income in the hands of the appellant company, since nothing has been earned by the company in this regard. Therefore, I am of the view that no further addition can be made in the hands of appellant company under the facts as discussed above. 6.5. Under these circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Associates 800000 P K gupta 21.7.2012 800000 20-07-2012 Technosoft Infosystem Pvt. Ltd. 200000 P K gupta 21.7.2012 200000 06-08-2012 K G TRADES 300000 Ram kumar 30.8.2012 300000 Total 2517589.00 2517589 b.) IDBI Bank Date of Receipt Receipt/ Credits from Amount (Rs.) Name of the party Date of payment Amount (Rs.) 25.10.2012 Shubh Laxmi 1446934.00 Anush finlease construction 26.10.2012 1400000 25.10.2012 Shubh Laxmi Director remuneration 05.12.2012 15000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.03.2013 50000 08.01.2013 Income Tax Refund (2008-09) 57540.00 Deepali impex pvt ltd 14.03.2013 14540 08.01.2013 Income Tax Refund (2008-09) S.Udit securities pvt ltd 29.03.2013 43000 23.01.2013 NEELAM AGGARWAL 500000.00 Diverse infotech pvt ltd 24.01.2013 500000 30.01.2013 Shubh Labh Traders 1750000.00 Rimpy bansal 31.01.2013 500000 30.01.2013 Shubh Labh Traders Dinesh modi 31.01.2013 1250000 22.02.2013 Kumar Brothers co. 2500000.00 Jemini trading 22.02.2013 2500000 08.03.2013 HDFCBANK 21000.00 Deepali impex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000.00 Anup arvind raja 18.4.2013 100000 04-05-2013 K G TRADES 170240.00 Deepali impex pvt ltd 31.5.2013 148140 04-05-2013 K G TRADES Shubh labh traders 11.7.2013 22100 17-05-2013 Kumar Brothers co. 3500000.00 Jemini trading 17.5.2013 3492500 17-05-2013 Kumar Brothers co. Shubh labh traders 11.7.2013 4037 17-05-2013 Kumar Brothers co. Other expenses 12.8.2013 3463 28-05-2013 Deepali impex pvt ltd 230540.00 Deepali impex pvt ltd 230540 31-05-2013 Amit Jain 1500000.00 Deepali impex pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100000 10-07-2013 Anand Goyal Saphire polyvinyl (P) ltd 23.10.2013 26137 10-07-2013 Anand Goyal Other expenses 26.10.2013 2567 10-07-2013 Anand Goyal H J book agency 28.10.2013 21382 12-07-2013 MAHADEV INVESTMENTS 500000.00 Rmp holdings pvt ltd 12.7.2013 500000 27-07-2013 KVRao 17206.00 Rmp holdings pvt ltd 7.8.2013 17206 07-08-2013 MAHADEV INVESTMENTS 1200000.00 Rmp holdings pvt ltd 7.8.2013 1200000 10-08-2013 MAHADEV INVESTMENTS 1000000.00 MAHADEV INVESTMENTS 10.8.2013 1000000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.1.2014 50000 26-12-2013 Income Tax Refund (A.Y. 2011-12) 9760.00 Cash withdrawl 24.3.2014 9760 27-01-2014 Rmp Holding Pvt. Ltd. 1038466.00 Golden villas 29.1.2014 912858 27-01-2014 Rmp Holding Pvt. Ltd. Cash withdrawl 24.3.2014 87142 27-01-2014 Rmp Holding Pvt. Ltd. Sai Infoweb Pvt. Ltd. 19.5.2014 38466 21-02-2014 Rmp Holding Pvt. Ltd. 1350775.00 Sai infoweb pvt ltd 22.2.2014 1300000 21-02-2014 Rmp Holding Pvt. Ltd. Sai Infoweb Pvt. Ltd. 19.5.2014 50775 21-02-2014 KVRao 8877.00 Cash withdrawl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany Trading BRR securities pvt ltd 11.9.2014 241957 08-09-2014 Keshav Company Trading JINDAL SAXENA FINANCIAL SERVICES PVT 15.10.2014 4892 08-09-2014 Keshav Company Trading BRR securities pvt ltd 10.12.2014 27710 08-09-2014 Satpal Bansal 1000000.00 BRR securities pvt ltd 11.9.2014 1000000 17-09-2014 Aastha Infra Projects (P) Ltd 543567.00 JINDAL SAXENA FINANCIAL SERVICES PVT 17.9.2014 500000 17-09-2014 Aastha Infra Projects (P) Ltd JINDAL SAXENA FINANCIAL SERVICES PVT 15.10.2014 17601 17-09-2014 Aastha Infra Projects (P) Ltd JINDAL SAXENA FINANCIAL SERVICE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 BRR securities pvt ltd 1.1.2015 500000 02-01-2015 NYK ENTERPRISES. Pvt. Ltd 223640.00 JINDAL SAXENA FINANCIAL SERVICES PVT 4.1.2015 200000 02-01-2015 NYK ENTERPRISES. Pvt. Ltd Rajendra kumar 2.3.2015 18840 02-01-2015 NYK ENTERPRISES. Pvt. Ltd Other expenses 2.3.2015 4800 12-01-2015 Royal India 198740.00 Phuspa khatana 26.2.2015 198740 19-01-2015 Royal India 198840.00 Phuspa khatana 26.2.2015 198840 19-01-2015 Sapphire Polyvinyl (P) Ltd 29740.00 Phuspa khatana 26.2.2015 2420 19-01-2015 Sapphire Polyvinyl (P) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brr securities pvt ltd 8.09.2015 35016 13-08-2015 Royal India 499216.00 Jemini trading co 13.08.2015 499216 13-08-2015 Narula Surgical 495230.00 Jemini trading co 13.08.2015 495230 14-08-2015 Dinesh Modi 1250000.00 Jemini trading co 16.08.2015 1000000 14-08-2015 Dinesh Modi Shubh labh traders 16.08.2015 250000 14-08-2015 Rimpy Bansal 500000.00 Shubh labh traders 16.08.2015 500000 18-08-2015 Golden Villas 1018049.00 Shubh labh traders 18.08.2015 1000000 18-08-2015 Golden Villas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BRR Securities Pvt Ltd 669801.00 Himalaya international 20.01.2016 669801 20-01-2016 Jindal Saxena Financial Services Pvt. Ltd. 312919.00 Himalaya international 20.01.2016 269334 20-01-2016 Jindal Saxena Financial Services Pvt. Ltd. Other expenses 20.01.2016 2100 20-01-2016 Jindal Saxena Financial Services Pvt. Ltd. Balance in bank account 31.03.2016 41485 11-03-2016 Income Tax Refund AY 2014-15 64840.00 Balance in bank account 31.03.2016 64840 Total 2,49,71,350.0 0 2,49,71,350.0 0 6. As far as charging of commission is concerned, it has been held in the case of Sh. Anand Jain and Sh. Naresh J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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