TaxTMI 
TaxTMI 
2017 (6) TMI 1078
X X X X Extracts X X X X
X X X X Extracts X X X X
....on to condone the delay, we condone the delay and admit the appeal for hearing. 3. In all appeals, the assessee has raised the 1st, 2nd and 3rd grounds against the legal validity of proceedings initiated u/s. 153C of the Act which has not been pressed before us, therefore, we dismiss the same as not pressed. 4. The ground no. 4 of assessee's appeal is against the addition of Rs. 38,64,870/- as peak credit in AY 2008-09; whereas the revenue's appeal (ground no. 1) for both AYs 2009-10 and 2010-11 is against the action of the Ld. CIT(A) in allowing set off of the said amount ( peak credit confirmed for AY 2008-09) while calculating peak credit for AYs 2009-10 and 2010-11, that is the Revenue is assailing the telescoping of peak credit confirmed by him in AY 2008-09 while computing the peak credit for AYs 2009-10 and 2010-11. And the CO of the assessee is against the peak credit addition sustained by the Ld. CIT(A) and in support of the relief given to him by Ld. CIT(A). The second ground raised by the revenue in both the AYs. 2009-10 and 2010-11 is against the action of Ld. CIT(A) deleting the commission income of Rs. 9,56,825/- for AY 2009-10 and Rs. 28,84,292/- for AY 2010-11. Si....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efit of telescoping of income assessed in the AY 2008-09 to the peak credits for AY 2009-10 and 2010-11. Thus, the Ld. CIT(A) confirmed the addition on account of peak credit arrived at by the AO at Rs. 1,29,97,972/- for AY 2009-10 which was reduced by giving set off of Rs. 34,64,870/- so, the Ld. CIT(A) confirmed Rs. 95,33,102/-. Similarly, in AY 2010-11 the peak credit addition was confirmed to the extent of Rs. 1,30,24,616/- i.e. (Rs.2,60,22,588 - Rs. 1,29,97,972). Aggrieved by the said addition confirmed for AY 2008-09, assessee is in appeal whereas the revenue is in appeal against the partial relief granted to the assessee for AY 2009-10 and 2010-11. The COs of the assessee are against the peak credit addition sustained for AYs 2009-10 and 2010-11 and in support of the order passed by the Ld. CIT(A) for AYs 2009-10 and 2010-11. 7. The AO after making the additions of peak credit deposit in the bank account as aforestated, estimated the commission based on different statements of the assessee, at 0.25% the deposit in the bank account and made an addition of Rs. 19,036/- for AY 2008-09; Rs. 9,56,825/- for AY 2009-10; and Rs. 28,84,292/- for AY 2010-11. Aggrieved, the assessee p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....commission derived by the assessee from his name lending activity and such commission income has been worked out with reference to cash deposit in the bank accounts operated by the assessee. So, according to the Ld. AR, from the very fact that the AO has computed the commission with reference to the cash deposited in the bank accounts indicates that the AO has accepted in principle that the monies belonged to the third parties from whom the assessee earned commission. It was argued by the Ld. AR that had it been the case that the cash deposited in the bank accounts belonged to the assessee then there would have been no question of assessee earning any commission income from his own cash deposited in the bank accounts. Therefore, the Ld. AR urged before us that the AO erred in treating the peak cash credit in AY 2008-09 at Rs. 34,64,870/- was illegal and the Ld. CIT(A) confirming the same was also not correct in the eyes of law and thereafter he pointed out that the only solace assessee got from Ld. CIT(A) was that he allowed the said amount confirmed to be set off in next two AYs against which revenue is before us. 9. We note that during the search on 16.02.2010 at the Fortune Isp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot be termed as undisclosed income of the assessee unless there is a finding of fact that the money deposited in the accounts belong to assessee and not of other beneficiaries. We note that the assessee has floated 6 proprietorship concerns under one Shri Goutam Sarkar, 10 concerns under the proprietorship of one Shri Nirmal Sharma, 4 concerns under the proprietorship of one Shri Bipul Kr. Pandey and 13 companies/firms and total 38 bank accounts were controlled by the assessee. Affidavits have been filed by Shri Goutam Sarkar, Shri Nirmal Sharma and Shri Bipul Kr. Pandey wherein they confirmed that the concerns were actually belonging to the assessee and they were only name lenders. We note that during the statement record u/s. 132(4) of the Act on 30.03.2010 the assessee stated that he has been providing accommodation entry through the firms and companies. The AO after appreciating the fact that the assessee is only a name lender and is in the business of accommodation entries has made an addition of commission income @ 0.25% out of the total cash deposits by holding as under: "VII. The assessee was asked to give details of the rate of commission earned by him. Accordingly, in h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t and only thereafter the question of peak credit can be raised. We take note that there is no factual finding of the AO that the assessee is the owner of the entire deposit made in the bank account or even the amount considered as peak credit amount, rather we note that the AO himself acknowledges the fact in page 2 of the assessment order that the assessee is engaged in the business of giving accommodation entries, so question of money belonging to the assessee does not arise and, therefore, applying peak credit fails. However, the Ld. CIT(A) has confirmed the addition only on the basis that the assessee did not provide the details of the third parties from whom monies were supposed to have been received and paid. We do not agree to the said reason of the Ld. CIT(A) for confirming the addition on the basis of peak credit. It is an admitted fact that the search happened on 16.02.2010 and the documents and books of the assessee has been seized by the revenue authorities and they were all in their custody. All the details were with the department. Thereafter, neither the AO nor the Ld. CIT(A) made any attempt to find out the veracity of the statement given by the assessee that he wa....