Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (2) TMI 454 - ITAT DELHIProtective addition on account of unexplained credit entries appearing in the bank account - assessee company is a conduit - addition on account of unaccounted commission @ 0.25 % of total unexplained credit entries HELD THAT:- As credits received by the appellant cannot be treated as unexplained credit in its hands since, the said transactions are mere arrangement of funds/routing of unaccounted income of the beneficiaries to whom the said funds were transferred through the bank of the appellant company in lieu of commission. In this regard, on perusal of the bank statement and ledger of the appellant company it is evident that the funds have flown, as the appellant company has received funds from various concerns as mentioned above and thereafter amounts were transferred to the above mentioned companies/ concerns immediately, the appellant company is not beneficiary company. The 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 protective basis in the case of the assessee. Appeal of revenue dismissed.
|