TMI Blog2016 (2) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 3575/Del/2013 - - - Dated:- 2-2-2016 - Shri S. V. Mehrotra , Accountant Member And Ms. Suchitra Kamble, Judicial Member For the Appellant : Shri V. Raja Kumar Adv For the Respondent : Shri Amrit Lal Sr. DR ORDER Per S. V. Mehrotra, A. M This is assessee s appeal against the order dated 20.03.2013, passed by the ld. CIT(A)-XXXIII, New Delhi in appeal no. 393/10-11/365, relating to A.Y. 2008-09. The assessee has taken following grounds: That on the facts in the circumstances of the case and in law, the CIT(A) erred in: 1) Confirming additions and even venturing to make an enhancement of the income returned, without confronting any of the following material to the assessee: c) Material seized from the laptop and otherwise during the survey operation dated 20.11.2007, upon Shri S.K. Gupta; d) statement of Shri S.K. Gupta; 2) Returning an incorrect finding that the details of beneficiaries to whom payments were made by the assessee were not appearing in the seized material, though this had been clearly demonstrated through bank particulars themselves; 3) Not appreciating that the assessee company was only a conduit for funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings Shri S.K. Gupta admitted that he had been providing accommodation entries to various persons through a large number of concerns effectively controlled by him.In course of survey it was noticed that Shri S.K. Gupta operated a number of accounts in the same bank/ branch or in different branches in the names of companies/ firms/proprietary concerns and individuals. The assessee had filed return declaring total income at ₹ 10,724/-. The AO has observed that assessee was maintaining following bank accounts during the FY 2007-08 showing total deposits as under: S. No. Name of the Bank Account no. Deposits Deposits from Group concerns 1 Axis Bank (Defence Colony) 357010200002813 9,10,000 2,50,000-(Giriashe Co.) 65,00,000-(Namrata Mar) 10,00,000- (Simo Credits business) 2 Syndicate Bank (Barakhamba Road) 90361010006747 3,22,81,937 3 Bank of Baroda 13830200000336 12,55,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons recorded by the A. O. for issue of notice under section 148 for the A. Y. 2006-07 (the facts are same for A. Y. 2008-09 which is under consideration) that the A.O. has stated that the applicant has provided accommodation entry and charged premium varying from 4% to 8%. After discussing various facts, the A:a. has stated that the applicant has been providing the accommodation entries to different parties by issuing the cheques after obtaining the cash and the amount of premium charged on giving such entry has not been reflected as income by the applicant. It is further seen that the applicant has given list of mediators and beneficiaries with address and telephone numbers. It is noted that the ClT in Rule 9 report or during the hearing has not produced any material/evidence to rebut the presumption u/s. 292C in respect of correctness of the material impounded during the survey. It is further noted that there are overwhelming evidence in the impounded material as enclosed by the applicant in the paper book Which show that the applicant is only entry provider and 'he had issued cheques after receiving cash from mediators-and deposited the same in the bank account con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Gupta. It is clear that cash has been received by S.K. Gupta in different years under consideration . and none of the creditors / beneficiary have come forward to own this cash. As to the case laws cited by assessee, they are not directly applicable to the facts of the case and are . distinguishable .. None of the cases cited by assessee deal with a clear evidence impounded during the course of survey operation u/s 133A, detailing receipt f cash on a day to day basis. The receipt of cash is not a conjecture. or figment of imagination on the part of Assessing Officer. In view of this, it shall be most appropriate that cash is brought to tax in the hands of Sh. S.K. Gupta. Addition has also been made on account of premium income received by assessee on account of these transactions for AY 2008-09. Assessee's contention that he should be allowed certain expenditure from the premium received by it, also cannot be entertained as assessee has brought nothing on record to prove that expenses were paid to other persons and neither there is anything on record to show that these other persons have acknowledged this income in this regard. Certain additions were made u/s 68 for credit e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of M/s Omni Farms Pvt. Ltd. instead of all the nine companies. 12. In the case of M/s Omni Farms Pvt. Ltd., the Assessing Officer, at paragraph 2, has recorded the following finding:- 2. A survey operation was conducted in the 5 K Gupta group of cases on 20/11/2007 at 308, Arunachal Building, 19, Barakhamba Road, New Delhi - 110001 . and 1007-1008, Arunachal Building, 19, Barakhamba Road, New Delhi - 110001. The assessee company is one of the group concerns of 5 K Gupta Group. During the course of survey proceedings Enid assessment proceedings, Sh SK Gupta edmitted that he had been providing accommodation entries to various persons through a large no. of concerns effectively controlled by him. Further, it was seen that Sh. S./( Gupta operates a number of accounts in the same bank/branch or in different branches in the names of companies/firms/proprietary concerns and individuals. For the operation of these bank accounts, persons who are filing income tax returns are roped in. Like any other business it does require man power according to the scale of operations. Except for two or three persons . who are required regularly to visit banks and do other work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lming evidence in the impounded material as enclosed by the applicant in the paper book which show that the applicant is only entry provider and he had issued cheques after receiving cash from mediators and deposited the same in the bank account controlled by him . Thereafter, the Settlement Commission noted Further, the report of the A.D. that the beneficiaries 'disclosed Rs.l06.33 crores against the cheques received by them from lie applicant, further strengthen applicant's case that he was only entry provider arid cash deposited in the bank accounts for issuing cheques are not his money but moneys . of the beneficiaries to whom cheques were issued'. Thus, the Settlement Commission has recorded the clear cut finding that Shrl S.K. Gupta was only entry provider and for the purpose of providing entries, he utilized. the various group companies which included the companies under appeal before us. He used to receive the cash from the beneficiaries who wanted to avail the accommodation entries and after depositing the same in the bank account of various companies, he issued the cheques to the beneficiaries. In view of this finding, the cash deposited in the bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion before us are for AY 2008-09. The C1T(A) denied to follow the order of the Settlement Commission remarking that all the relevant facts might not have been produced before the Settlement Commission. However, learned CIT(A) has not pointed out any specific facts which were not placed before the Settlement Commission. On the other hand, reading of the order of the Settlement Commission shows that all the relevant material including the seized material were duly considered by the Settlement Commission. Moreover, Hon'ble Jurisdictional High Court has held that even if some material has been suppressed from the Settlement Commission, the only course available to the Revenue is to approach the Settlement Commission for declaring its order as nullity. In the case under appeal before us, the - order of the Settlement Commission is of 2010. It has not been pointed out by the Revenue that it has approached the Settlement Commission for declaring its order as nullity. Therefore, respectfully following the decision of Hon'ble Jurisdictional High Court, in' our opinion, the order of the Settlement Commission is binding on the Income Tax Department and all the logical consequenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 8. The Hon ble Delhi High Court has also confirmed the findings of the Tribunal. We, therefore, respectfully following the decision of the Tribunal in the case of M/s Omni Farms Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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