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2024 (4) TMI 352 - ITAT AHMEDABADAccrual of income - Addition made to the income of the assessee received by the assessee from “JDS” and its associates, treated as own income of the assessee - HELD THAT:- We fail to understand, how the funds received by the assessee from JDS can be treated as its own funds when the money trail unravelled by the Department itself clearly revealed the ultimate beneficiary to be VMS Industries. There can be no other conclusion drawn from the facts before the department but that of VMS Industries being the ultimate beneficiary of the transactions, and the assessee only being intermediary in the entire process. AO of VMS Industries and the AO “SCMPL” have also admitted to this fact. Even the AO of VMS Industries agreed with the same while taxing the entire share capital received in it , in its hands. Thus there appears to be clear unanimity between the AO’s of all the three entities that the money brought into assessee and SCMPL was only as intermediary, with M/s VMS being the ultimate beneficiary of the same. Coming to the fact that the addition made in the hands of the VMS Industries of these funds stood deleted by the ld.CIT(A), we have been informed that the Department had gone in appeal against the order of the ld.CIT(A), but during the pendency of the appeal, the assessee settled the dispute under VSVS scheme. Therefore, no benefit can be derived from the appellate order passed in the case of VMS industries. Ignoring thus the appellate order passed in the case of M/s VMS Industries and considering the entire facts and circumstances of the case, which had been extracted from the inquiry from the Department itself, by conducting survey on all the persons concerned in the money trail including the ultimate beneficiary and intermediary i.e. the assessee and the “SCMPL”, the preponderance of probability is to the effect that the money introduced to the assessee-company from JDS Industries was not its own income. For this proposition, we heavily rely on the decision of Sumati Dayal [1995 (3) TMI 3 - SUPREME COURT] The addition made in the present case is held to be not sustainable and is directed to be deleted. Decided in favour of assessee.
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