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2021 (3) TMI 106 - AT - Income TaxAssessment u/s 153A - Assessee is providing accommodation entries, for which assessee might have earned commission as per the prevailing market rate of 2% to 2.25% on the total credits on the bank account of the assessee - basis of the additions which has been made in the impugned appeals are that the assessee was found to be non-existing company at the time of search and assessee-company has indulged in taking accommodation entry in lieu of cash from various paper/ shell company - HELD THAT:- Assessee-company is very old company incorporated way back on 4th April, 1991 and has been duly registered as NBFC with RBI. Since then Assessee Company has been regularly filing its return with Income Tax Department, under the Income Tax Act, Returns with ROC under the Companies Act and also before RBI, being NBFC. It has been regularly filing its return of income along with audited accounts. The balance-sheet as on 31st March, 2011 reflects share capital reserve and surplus of more than ₹ 20.65 crores. It has investments of more than ₹ 18.27 crores and loans and advances given for the business purpose was at ₹ 2.43 crore and cash and bank balance of approximately ₹ 10 lakhs. The interest income has been shown at ₹ 19.65 lakhs. Same is the position in all the subsequent years’ balance-sheets. Thus, it cannot be held that it is non-existing company having no real business. Admittedly, during the course of search nothing incriminating or any iota of document has been found or seized from the possession of the assessee company - as per the assessment order itself nothing was found from the possession of assessee as no one was present at the premises. The entire premise has been drawn on the basis of certain information in possession with the Department from the search and seizure of group companies of Shri Sanjay Bhandari and from there it has been gathered that the assessee-company was engaged in some accommodation entry. If that is the case, then what information or material pertaining to the Assessee Company was found or unearthed which was handed over the Assessing Officer. Assessee has clarified that neither Shri Deepak Agarwal nor Shri Vishnu Agrawal are related to the assessee-company nor they were directors. Further, the document which has been referred in the assessment order has neither been found from the possession of the assessee nor it has been confronted to assessee nor any person was examined wherein the name of the assesseecompany has been implicated. This material itself cannot be held to be found from the search conducted in the case of the assessee. In case, if such a material found from the search of a different person, then the same should have been considered there in that case or satisfaction should have been recorded in terms of 153C against the assessee. In so far as this matter is concerned it cannot be reckoned as an incriminating material to make assessment under section 153A. Moreover, this paper has been recovered from a third party and is purely a blank paper without any mention of year or any amount so this cannot be basis for any inference or addition. The assessment for the Assessment Year 2011–12 to 2015–16 had attained finality. The period for the assessment year 2015-16 and 2016-17 nothing has been found from any enquiry or carried out in the case of the assessee that assessee was providing any accommodation entry and the business carry on by the assessee is sham or paper transaction, hence the addition cannot be made on the basis of any hypothesis presumption albeit it has to be based on evidences or material or enquiry conducted. The addition here in this case has purely been made on surmises and presumption that assessee might have earned 2% commission on accommodation entry. This approach is unsustainable in law and on facts. At least, there has to be a concrete finding with material that assessee was found to be carrying out shady accommodation entry transaction. Accordingly, we do not find any reason to uphold the alleged commission income in all the years. It cannot be held that assessee is paper company or was earning income was on the basis of alleged commission on accommodation entry. - Decided in favour of assessee.
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