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TMI Blog2016 (2) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... hese persons and their group concerns were seized. 3. Notices u/s 153A of the IT Act, 1961 was issued. The assessees filed a letter stating that the return filed u/s 139 may be treated as the return filed u/s 153A of the Income-tax Act. The AO framed assessments on 28.3.2013 u/s 143(3) read with section 153A of the Act. He briefly discussed the modus operandi of Jain brothers. The modus operandi as brought out by the ld.CIT(A) at page 4, last para is extracted for ready reference:- "They receive cash from beneficiary companies who has unaccounted cash. They introduce these cash in the bank accounts of various firms/companies and rotates these amount through bank accounts of various companies/concern so that the identity of such cash received from particular beneficiary is lost and finally the beneficiary company gets these amount by cheques in form of share capital/share application, share premium, bogus capital gain or for inflation of expenses. For this operation Jain brothers has created hundreds of paper entries and operates numerous bank accounts for this purposes." 4. After examining the evidences and the statements, the AO determined the total income of the assessees. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er can't be treated to be beneficiary also." 6. We have heard Shri Kapil Goel, the ld. counsel for the assessee and Ms Nirupama Kotru, the ld. DR on behalf of the Revenue. The sum and substance of the submissions of Shri Kapil Goel is that there is a violation of principles of natural justice. Further, it was submitted that the assessments were not properly framed and that the same amount has been taxed multiple times as there were circuitous and chain transactions which were not eliminated or netted out. He submitted that the AO relied on an apprisal report and on some other material, but has not confronted the assessee with the same. He further argues that section 68 does not apply to these assessees and that these cases are covered by the decision of the jurisdictional High Court in the case of Principal Commissioner of Income-tax vs. Vijaya Conductors Pvt. Ltd. and other cases, ITA No.683/2015, judgment dated 29.9.2015 and the decision of the 'B' Bench of the Tribunal in the case of Tarun Goyal in ITA Nos.4636 & 4637/Del/2012, vide order dated 18.10.2013. He pleaded that all these appeals should be restored to the file of AO for fresh adjudication and that the assessee sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s report to the assessee on the ground of confidentiality, then, no addition whatsoever can be made in the hands of the assessee based on this report. A statement was recorded from one Shri Rajesh Aggarwal. A copy of the statement was also not furnished to the assessee, though the AO relied on this statement for making certain additions. 9. Evidence was gathered during the search of Jagat Group and these evidences were also not confronted to the assessee. We also find that the assessment order was framed in a hurry, possibly due to constraint of time. Though the notice u/s 153A was given on 1.5.2012, show cause notices were issued only on 5.2.2013, 8.2.2013 and 14.2.2013. The assessee gave a reply on 8.3.2013 and the assessments were framed on 28.3.2013. Though the AO had written a very detailed order, we find that the contention of the assessee that, material relied upon by the AO in his orders were not confronted to the assessee is correct. The contents of the show cause notices does not conform to the reasoning in the assessment order. Similarly, the first appellate authority has converted the protective addition made by the AO into a substantive addition without specifically c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - "17. Thus, there is an order of the Settlement Commission as well as the Additional Commissioner of Income Tax under Section 144A holding that Shri S.K. Gupta was providing accommodation entries, he used various companies as conduit for providing the accommodation entries, cash was received through mediators from the persons who wanted to avail the accommodation entries, such cash was deposited in the bank account of the conduit companies and thereafter, cheque of the similar amount was being issued to the beneficiaries (i.e. the person who wanted to avail the accommodation entry) within a day or so. The Assessing Officer himself in the assessment order has accepted these facts. Considering the totality of these facts and the logical consequences of the order of the Settlement Commission as well as of Additional CIT under Section 144A, we have no hesitation to hold that the addition under Section 68 cannot be made in the case of the conduit companies. Therefore, we delete the addition made under Section 68 in the case of all the nine companies, which are admittedly conduit companies of Shri S.K. Gupta." 12. The Hon'ble Delhi High Court in the case of Vijay Conductors India Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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