TMI Blog2015 (7) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the modus simply accepting the version of the assessee without at least calling for the bank statement of the two companies wherein he is the Director to verify whether the contention of the assessee saying that he is only an accommodation entry provider is correct or not; or by calling for remand report and find out to whom accommodation entries were given etc. In the said scenario, we set aside the order of the CIT (A) and remand the matter back to the file of the AO for de novo assessment. - Decided in favour of revenue for statistical purposes. - ITA No.142/Del./2012 - - - Dated:- 22-7-2015 - Shri J.S. Reddy and Shri A.T. Varkey, JJ. For the Petitioner : Shri Adhir Samal, CA For the Respondent : Shri T. Vashantan, Senior DR ORDER PER A.T. VARKEY, JUDICIAL MEMBER : This appeal, at the instance of the revenue, is directed against the order of the Commissioner of Income-tax (Appeals)-XXX, New Delhi dated 28.10.2011. The relevant assessment year is 2008-09. 2. The effective grounds of appeal taken by the revenue read as under : On the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in:- 1. Reducing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash deposit of ₹ 3,86,62,391/- and other deposits amounting to ₹ 43,36,170/-) was deposited in cash during the year. The AO has reproduced the bank statement in his order. The AO observed that from a perusal of the bank statement, it revealed that nominal balance was being maintained throughout the year and every deposit entry was followed by withdrawal of identical amounts. On 22.11.2010 when the statement u/s 131 of the assessee was resumed, the AO again asked the assessee to provide the details of transactions and source and nature of deposits in the said account maintained with Punjab National Bank and the assessee accepted that he was proprietor of M/s. Om Weighting India and Director of two companies i.e. M/s. Prolon Marketing Pvt. Ltd. and M/s. Ja Gang Plastics (India) Private Limited. However, the assessee stated that no business was being carried out by M/s. Om Weighing India and the other two companies. But, the AO observed that when the assessee was asked to provide the nature and source of huge amounts of cash/fund inflow, the assessee showed ignorance about the source of the funds and did not provide any explanation. The assessee s statement was recorded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, in view of the above mentioned facts, observed that the assessee did not come forward to give any explanation regarding the nature and source of cash and other deposits to the tune of ₹ 4,29,98,561/- in his bank account with PNB and held that this amount stood unexplained and, therefore, deemed it as income of the assessee for the year under consideration as per the provisions of section 68 of the Act. Accordingly, the AO made the assessment by passing order u/s 144 of the Act by adding unexplained cash deposits u/s 68 of the Act in Bank of ₹ 4,29,98,561/- as assesse s income. 3. Aggrieved, the assessee preferred an appeal before the first appellate authority. The CIT (A) after going through the written submissions filed by the assessee, which has been reproduced by the CIT (A) in his order was pleased to partly allow the appeal of the assessee and directed the AO to estimate the assessee s income as commission business for providing entries to parties @ ₹ 1/per ₹ 100/- and thus calculated assessee s income as ₹ 4,39,985/- in addition to his other income returned by him. . The relevant finding of the CIT (A) is reproduced as under :- 3. I h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 4,29,98,561 as cash deposit in appellant's PNB a/c. Since the appellant had disclosed a higher figure of ₹ 4,39,98,561/-, the A.O. is directed to verify the appellant's figure with that obtained by A.O. from bank and reconcile the total cash credit in appellant's a/c, on which cheques have been issued. Since the appellant admits bonafidely to have given such cheques to parties through two of his companies, I estimate appellant's income from commission business on providing entries to parties @ Re.1/- per ₹ 100/- and calculate his income at ₹ 4,39,98,561 x 1/100 = ₹ 4,39,985/- in addition to his other incomes returned and assessed by A.O. The A.O. is directed to recompute his total income and charge interests u/s 234-A, 234-B, 234-C, 234-D accordingly, which are mandatory in law. 4. The revenue, being aggrieved, is in appeal before us. 5. Ld. DR relied on the order of the AO and submitted that the CIT (A) has wrongly reduced the addition on account of unexplained cash credits in assessee s bank account and also erred in directing the AO to compute the income of the assessee as commission income without substantiating evidences a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted upon by the AO because he passed the order on 16.12.2010, so the assessee wanted the said letter to be admitted as evidence as per Rule 46A of the Income-tax Rules, 1962. In the aforesaid back-ground, we find that the following facts emerge from the proceedings before the AO : (a) The assessee had a proprietary concern and was the Director of two companies. The assessee does not know who the other Directors in the said companies are, namely, M/s. Prolon Marketing Pvt. Ltd. and M/s. Ja Gang Plastics (India) Pvt. Ltd.; (b) He does not know who deposited the amounts in his account in Punjab National Bank; and (c) He does not divulge anything about providing accommodation entries etc before the AO till the assessment order is passed. So, we find that the AO felt helpless because assessee did not disclose anything before him, so he resorted to section 144 assessment, without resorting to any investigation as to where the money deposited in assesse s bank account is being transferred and where the money trail ends. Whereas, we find that CIT(A) after going through the written submissions of the assessee, without seeking a remand report from AO, comes to the conclusion th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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