TMI Blog2016 (7) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. Before these appeals are taken up for consideration it is seen that the Registry has pointed out a delay of 30 days in the filing of these two appeals. Addressing the delay the Ld. AR inviting attention to the condonation of delay petition in filing each of these appeals submitted that the impugned order had been received by the assessee when the father of Sh. S.K.Gupta who is the controlling person of the assessee was critically ill; confined to bed and finally passed away. On account of remaining pre-occupied with the above tragedy the appeals it was stated could not be filed on time. Inviting attention to the copy of the order dated 14.02.2014 in ITA Nos.-3213, 3214 3856/Del/2012 1080/Del/2013 in the case of Konichiva Builders Ltd. it was submitted that on identical facts delay of 43 days had been condoned by the Co-ordinate Bench. Relying on the same it was submitted that the delay may be condoned. The Ld. DR considering the order of the Tribunal and the petition of the assessee had no objection if the appeal is decided on merits by condoning the delay in each of the appeals. 3. Considering the facts on record and the submission of the parties we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also from the premises of his firm namely M/s Gupta Rakesh Associates at 231, Gulmohar Enclave, New Delhi. In the course of the search operation, it was reported by the investigation wing that a large number of companies were being operated and controlled by Shri S. K Gupta from his main office premises at H-108, Connaught Place. The list of these Companies is as under:- 1. Konichiva Builders Ltd. 2. B.T.Technet Ltd. 3. Swen Television Ltd. 4. T G Quality management consultants Ltd. 5. Hitech Computech Pvt. Ltd. 6. Centenary software pvt. Ltd 7. Trump and Gates 8. T G Quality Servrces 9. GTM Konichiva Builders 10. Gupta Rakesh Associates 11. Era Advertising and Marketing Coy Pvt Ltd 12. PG Travels Hindustan Com 13. Shark Communication Pvt Ltd 14. Spg Finvest Pvt Ltd. 15. Krishna Informedia 16. Bolni Exim India Ltd 17. Bharti Properties Pvt Ltd 18. Marketing Insurance Brokers Pvt Ltd 19. Cam Soft (lndia) Pvt Ltd 20. Ours Trading Pvt. Ltd 21. Pawar Estates Pvt Ltd 22. Rajdhani Leasing Ltd 23.DMC Vaults Ltd 24. Sigma Farms Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blank cheques signed by various authorized signatories/Directors of the appellant company and other companies were found and seized from Shri. S.K. Gupta's premises. Some of these Directors/Authorized Signatories were found to be employees, relatives or friends of Sh. S.K.Gupta. (vii) The Assessing Officer has given elaborate and adequate opportunities to the appellant company to explain their matter during the assessment proceedings and to counter the findings of the Assessing Officer. (viii) The Assessing Officer himself has repeatedly recorded statements of Shri S.K.Gupta and has confronted him in detail about the findings. 6.2. On the basis of the above facts the AO arrived at the following conclusions. These are extracted from the assessment order:- 4. Inferences:- i. It is proved beyond doubt on the basis of documentary evidences, confessional statement of Shri. S.K.Gupta, the main person controlling the state of affairs of the assessee. Husband of Smt. Saroj Gupta, director of the assessee company and results of the assessment that assessee is engaged in the accommodation entry business and not doing any genuine sale purchase as claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try business is computed @ 2% net rate on sale turnover and investment turnover in view of the assessee's statement coupled with prevalent market condition for such entries. No further expenses are to be allowed, as this is the net rate. 5. With these remarks, the total income is computed as under: With these remarks income of the assessee is computed as under: (i) Total income as per 153 A return ₹ 3396/- Add:- Income earned from Accommodation entry Business (a) On the Accommodation Sale Bills/Turnover @ 2% of ₹ 1501913/- Rs.30038/- (b) On account of bogus fresh investment entries @2% of ₹ 83,95,000/- ₹ 167900 ₹ 201334 6.3. In appeal before the First Appellate Authority the CIT(A) held as under:- 2.3.5. Taking into consideration the totality of facts and circumstances of the case as discussed hereinabove, it is held that the addition made by the AO on account of net income earned from accommodation entry bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on various dates both before the Officers of the Investigation Wing and in post search enquiries before the AO, he admitted in detail, his modus operandi of providing accommodation bills through the assessee company and another companies in lieu of cheque received and cash return to the beneficiaries. There was also seizure of duplicate set of books of accounts, cheques signed by various authorised signatories / Directors of the assessee company and other companies (which were found to be employees, relatives or friends of Sh. SK Gupta) from Shri S.K. Gupta s premises. From the above, AO observed that it became abundantly clear that the assessee company, in fact, indulged in accommodation entries business and did not do any genuine business. All the sale and purchases etc. booked in these companies were found to be bogus. Proper books of accounts were not found to have been maintained. In these circumstances, the books of accounts of the assessee were rejected and additions were made on estimate basis, the same were affirmed by the Ld. CIT(A) in appeal. 8.1. The issue pertaining to books of accounts etc. was considered by the Coordinate Bench in the following manner:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said. 10. In this regard Ld. Counsel of the assessee has pleaded for allowance of expenditure incurred to earn the income. We find that when addition is being made on the basis of statement, the statement has to be relied in full . Revenue cannot choose to rely on one part of the statement and ignore the rest of the statement in the absence of any cogent material. This is supported by the common law maxim of approbate and reprobate. 11. In this case the assessee company s Director has agreed that the commission was to the tune of 1.5% to 2%. Hence, estimation of commission income @ 2% cannot be disputed. However, at the same time it has also been submitted in the same statement that the assessee has to incur the expenditure on account of salary, rent bank charges, conveyers, telephone, water and electricity. However, it is also settled that mere submission that expenditure has been incurred cannot lead to allowance of expenditure. Assessee has to prove with cogent material that the expenditure has been incurred to earn the income. In these circumstances we remit the issue to the file of the AO. The Assessing Officer shall examine the aspect of allowance of expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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