TMI Blog2015 (6) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... DR ORDER Per C. M. Garg, JM. This appeal has been has been preferred by the assessee against the order of CIT (Appeals)-XXXI- New Delhi, vide dated 30.11.2011 in Appeal No.172/2010-11 for Assessment Year 2008-09. 2. The assessee has raised following grounds in this appeal: 1. That the Ld CIT(A) has erred in law while confirming the addition to the extent of ₹ 25,54,150/- out of the total addition of ₹ 50,13,750/- made by the ld. AO u/s 69 of the Income Tax Act, 1961 in the hands of assessee under the contention that the accounts to which the money is credited are the alleged benami accounts of the assessee, without considering the evidences filed during assessment proceedings and once again referred during appellate proceedings, and therefore, addition confirmed to the extent of ₹ 25,54,150/- may please be deleted. 2. That the Ld CIT(A) has erred in law and on facts while confirming the addition made by the Ld AO, where such addition is made under predetermined mind set about material documents seized during the course of search proceedings relevant to AY 2001-2002 to AY 2007-08 and not the period under consideration i.e. 2008-09, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the ld. CIT(A) was right in directing the AO to delete addition of ₹ 24,59,600/- and in directing the AO to follow the order of the Income Tax Settlement Commission. Supporting the orders of the authorities below, the ld. DR further contended that the ld. CIT(A) was quite justified in confirming the addition of ₹ 25,54,150/-. The ld. DR further drawn our attention in Para 3.7 of the assessment order and submitted that the AO has made it clear that his conclusion a subject to the decision of Income Tax Settlement Commission , and if, Income Tax Settlement Commission takes a decision otherwise and such unexplained income is divided in the hands of three persons therefore, the AO also kept a space for consideration of prospective order of the Settlement Commission and approach and action of the AO is quite justified. 7. On careful consideration of above submissions and contention of both the parties we are of the considered view that in Para 3.7 at page 8 of the assessment order the AO has made it clear that since the assessee Shri Rakesh Kumar Arora has owned the deposits and bank account as his benami during search and before Income Tax Settlement Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24,59,600/- assessed in its hands are deleted. 9. From further reading of the impugned order we also note that the CIT(A) confirmed the remaining part of impugned deposits in the hands of assessee and also directed the AO to follow the order of the settlement commission in respect of other alleged 10 accounts (other than account of M/s Samar Organics Pvt. Ltd.). The relevant operative part of impugned order read thus: Therefore the peak calculation of ₹ 4,95,000/- in the Para 5.16 is without basis and cannot be verified. In view of above facts it is concluded that the appellant is in some way having a relation with the bank accounts operated in the names of these entities. I therefore confirm the addition of ₹ 25,54,150/-. The AO was not sure while making the assessment as to whether the addition should have been made in the hands of the appellant. The AO in Para 3.7 of the assessment order mentioned that if subsequently, Hon ble Income Tax Settlement Commission takes a decision otherwise and such unexplained income is divided in the hands Sh. Virendra Kumar Arora, Shri Rajesh Kumar Arora and Sh. Rakesh Kumar Arora, its effect will be given in this assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemicals Sl. No. 1,2,5,2 and 16 of the 16 entities. The assessing officer summoned the said person u/s 131 of IT Act and he has acknowledged the ownership of the bank account operated by him on behalf of his proprietorship concerns Punjab Solvent Chemicals, Amrita Thinners Chemicals, Shree Ganesh Enterprises and Hari Om Chemicals. It has been reported by the CIT that the said person is filling regular return of income and notice under section 148 has also been issued for assessment year 2007- 08 on 20.3.2014 it is also reported that the transaction which is Rakesh Arora were joint business transaction for purchase and sale. (Para 9 (9.1)(2) at page 30 of this Synopsis). 3. Harish Kumar Mahindru - He is a proprietor M/s. Mahaveer Chemicals, Sunshine paints and Chemicals, Shri Ram Enterprises (Sl. No.9, 11 13 of the page 16 entities) The assessing officer summoned the said person u/s 131 of IT Act and he has acknowledged the ownership of the bank account operated by him on behalf of his proprietorship concerns Mahaveer Chemicals, Sunshine Paints and Chemicals, Shri Ram Enterprises. It has been reported by the CIT that the said persons is filling regular return of income and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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