9911796707
TMI Blog2018 (4) TMI 1120X X X X Extracts X X X X X X X X Extracts X X X X ..... were provided. ii. Ld CIT(A) has wrongly confirmed that appellant has failed to file evidence that VAT charged @4% from the beneficiaries on accommodation bills were actually refunded to the beneficiaries or deposited with the trade tax department. iii. Ld CIT(A) fell in error in confirming the upscaling the rate of commission artificially from 1.5% to 2%. iv. Ld CIT(A) omitted too consider that actual rate of commission, based upon seized documents, workout to 1.26% and after reducing the expenses, it works out to 0.76%. 3. That the ld CIT(A) in confirming addition of Rs. 100000/- on account of unexplained investment." 3. The assessee has raised the following grounds of appeal in ITA No. 3771/Del/2014 for the Assessment Year 2007-08:- "1. That the order passed by the ld CIT(A)-XXXII is bad in law and on facts. 2. That the ld CIT(A) has grossly earned in confirming the addition of Rs. 186766002/- because. i. Ld CIT(A) has wrongly held appellate failed to furnish any documentary evidence to show that infra transactions between the firms were not business transactions through which accommodation entries were provided. ii. Ld CIT(A) has wrongly confirmed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly refunded to the beneficiaries or deposited with the trade tax department. iii. Ld CIT(A) fell in error in confirming the upscaling the rate of commission artificially from 1.5% to 2%. iv. Ld CIT(A) omitted too consider that actual rate of commission, based upon seized documents, workout to 1.26% and after reducing the expenses, it works out to 0.76%. 3. That the ld CIT(A) in confirming addition of Rs. 7300200/- on account of unexplained investment." 6. The assessee has raised the following grounds of appeal in ITA No. 3774/Del/2014 for the Assessment Year 2010-11:- "1. That the order passed by the ld CIT(A)-XXXII is bad in law and on facts. 2. That the ld CIT(A) has grossly earned in confirming the addition of Rs. 45280273/- because. i. Ld CIT(A) has wrongly held appellate failed to furnish any documentary evidence to show that infra transactions between the firms were not business transactions through which accommodation entries were provided. ii. Ld CIT(A) has wrongly confirmed that appellant has failed to file evidence that VAT charged @4% from the beneficiaries on accommodation bills were actually refunded to the beneficiaries or deposited with the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that assessee is engaged in the business of providing accommodation entries through bogus purchase bills from the various firms and entities owned and controlled by the assessee. The statement of the assessee was recorded during the search u/s 132, post search proceedings and in assessment proceedings wherein they confirmed that they are providing accommodation entries through bogus purchase bills issued from various entities. The ld Assessing Officer recorded the whole modus operandi of the assessee in paragraph no. 3.2 onwards which is important to understand the facts of the case:- "3.2 Modus operandi of the entry operators was as follows Sh. Vaibhav Jain and Sh.Navneet Jain were operating this business in close association with other operators. Vaibhav Jain and Navneet Jam were operating number of proprietary concerns in name of family members and poor employees for issuing paper sales bills f without delivery of goods to end users through many brokers. Entry Operators opened various bank accounts in the name of several proprietary concerns for this purpose. They issued bogus/paper bills of various items against cheques received from the beneficiaries/end users. Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 36 Saraswati Trading Co Poonam Sharma 37 Vee Kay International Vaibhav Jain 3.4 Admission of Shri Vaibhav Jain, Sh Navneet Kumar Jain and other proprietors: During research proceeding search proceeding, post-search proceeding the statement of various persons were recorded, in whose names the paper entities i.e. proprietorship firms were opened. During the assessment proceeding also the statements of key person i.e. Sh Vaibhav Jain , Shri Najvneet Kumar Jain controlling the entire business of bogus accommodation entry were again recorded. All the proprietors and key persons i.e. Sh Vaibhav Jain, Sh Navneet Kumar Jain .controlling the entire business of bogus accommodation entry have time and again confirmed and re-confirmed categorically that they are providing only bogus accommodation entry bills and no goods are ever supplied on the sale invoices raised by them in favour of beneficiaries of accommodation entries. 3.5 The relevant portion of the statements of key person i.e Sh Vaibhav Jain , Sh Navneet Kumar Jain .controlling the entire business of bogus accommodation entry and other proprietors are re-produce as under: Statement dated 22.05.09 of Shri Vaibhav Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper bills/ bogus bills, whether any sales tax or other duties have lived by you at the time of issuing bogus bills. Ans. As desired by the purchasers, of the paper bills whish one in the nature of accommodation entries for purchases for the purchasers, the sales tax is included in the sales invoices however the amount of sales tax is return to the purchaser as and when the payment/cheque were received from the purchaser, similarly levy of VAT was also included on the bills when ever desired by the purchase and returned to the purchaser as in the case of sales tax. Q8. I am showing you the bank statement of M/s Vee Kay International of Bank accounts in ABN Amro, Karur Vysya bank and PNB New Rohtak, New Delhi. Please carefully go through the statement and explain about the nature of the transfer entries and also provide the details of persons/ concerns with whom and for what purpose these entries have been made? Ans. I wish to place in record that besides M/s Vee Kay International, These were same other people also who were carrying similar activities under their respective proprietorship concern. Each of such persons has interest in his/ her concern. The above mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerns mentioned in your answer to question no.9 of the statement, of the banks accounts mentioned in ABN Amro Bank, Rajouri Garden, New Delhi, Karur Vysya bank Lawrence Road, New Delhi and Punjab National Bank, new Rohtak Road, JTew Delhi. In these bank accounts There are transaction of approximately 600/- crore (Six Hundred Crores). Please explain the nature of transaction and the person with whom these transaction have been made as you have admitted that these concerns were actually controlled by you and the transactions have been made under your supervision and direction. Ans. Most of the transaction in the bank accounts of the above mentioned concern are in nature of transfer entries among themselves. The deposit entries are the deposit of cheques received in lieu of sale of paper bills/ accommodation entries for purchase from the beneficiaries. There have been also frequent instances of substantial cash withdrawal which 'were used To return back to the beneficiaries after deducting a fraction of it as profit margin. Q11. I am showing you the bank account opening form received from ABN AMri, and Karur Vysya Bank and PAB New Rohtak Road, New Delhi. In whish the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nternational Vaibhav Jain 1453954 ABN Amro bank 38 Navneet Kumar Jain & Sons Navneet . Kumar hain 1005460 ' ABN Amro bank 39 Vardhman Enterprises Renu Sharma 1340811 -. * ABN Amro bank 40 Vardhman Enterprises -Renu Sharma 1428772' ABN Amro bank 41 Heer International Renu Sharma 1339902 ABN Amro bank 42 Metal & Steel Raj Kumar 1453956 ABN Amro bank 43 Vee Kay International Vaibhav Jain 941803 ABN Amro bank 44 Metal and Steel (India) Raj Kumar 1328671 ABN Amro bank 45 Ess mart Enterprises Raj Kumar 1328671 ABN Amro bank 46 Mayur Enterprises Tarun Puri 1440031 . ABN Amro bank 4-7 Shree Jee Traders Tarun Puri 1439997 ABN Amro bank 48 M/s Supremo Girdhari Lai 4102-1 15-15291 Karur 49 M/s. Heer International Himashi Arora 4102-128-308 50. M/s. Heer International HImanshi Arora 4102-128-34 You are requested, go through carefully the above list of concerns and their account Opening form and confirm that these accounts were operated by you or the proprietor mentioned against the respective concern under your consideration your discussion and supervision. You are also requested that all *he above ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harma ! i) Renu Sharma (iii) Tarun Puri in his statement admitted that the accounts of the above said firms of which they are proprietors are controlled by you. Sh. Girdhari Lai Puri in his statement admitted that he firms of which he is proprietors are controlled by Sh. Navneet Kumar Jain B-8/15-16, Sec-11, Rohini. Do you want to say any thing in this regard. Ans. As I have already stated' that these persons were operating their respective bank accounts under my supervision and direction Sh. Girdhari Lai Puri has name My Father Sh. Navneet KUmar Jain although he also operated his bank account under my supervision and direction. Statement dated 26.04.2010 of Sh. Vaibhav Jain Ql. Please identify yourself? Ans. I am Vaibhav Jain S/o Sh. Navneet Jain R/o B-8/15-16, llnd Floor, Sector-l 1, Rohini, Delhi-110085. I arn 'showing my driving license issued by the transport department Delhi having no.P0811200653362. Q2. Please give the details of your business or one other source of income? Ans. I am a commission agent, my main activity is. to provide entries to the different parties. Currently, l am trading in utensils of steels. Q8. Kindly explain in brief the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y me on the above transaction. 10. Statement on oath of Shri Vaibhav jain, recorded u/s 131 of the Act during the proceedings u/s 153A in his case on this date of 13.02.2013 by the ld AO where also he confirmed that he is engaged in providing accommodation entries of bogus bills. In answer to Question no. 4 he confirmed that during the FY 2004-05 to 2010-11 he has provided bogus purchase bills of Rs. 650 to Rs. 700 crores. He further gave the name of 38 concerns from which he has provided these entries. 11. Further the ld AO on 26.04.2010 recorded the statement of Shri Navneet Kumar Jain on 26.04.2010 who is father of the assessee, wherein he submitted that there are 27 other firms which are in the name of different persons to whom salary of Rs. 2000 to Rs. 3000/- is given for their name. 12. The ld AO further recorded statement of Shri Navneet Kumar Jain, father of the assesse, on 16.06.2010 which is as under:- "Statement dated 16.06.2010 of Sh. Navneet Kumar Jain Q 11. Please state the nature of business activity of these concerns. Ans. As I have already stated in my statement these concerns are run by my son Shri Vaibhav Jain for issuing bogus bill without actual del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s employee with M/s. Sakshi Metal, having office At A-72, monthly salary at Rs. 6000/- per month. Q.8 Please give the details of firm/ proprietorship concern/ company in which you are interested since 2002. Ans. I don't run any firm/proprietorship concern/ company since 01.04.2002. Q9. I am showing you the account opening form of ac of a/c; no. 4102-115- 15291 in the name of M/s Supremo Trading Company with karur Vysya Bank Lawrence Road, .Delhi. In your photo is posted and your driving license copy and copy of PAN is attached. Please go through the documents and confirm whether this account was opened and operated by you. Ans. I have gone through the account opening form and annexure A confirm that the photo posted, signature, copy of driving license are of mine only. However the copy of PAN card which is annexure to it has and been issued to me as I have never applied for any PAN card. I want to clear that this account v/as opened by Sh. Navneet Kumar Jain S/o Recti Saram Jain r/o B-8/15-16 sector-11, Rohini New Delhi. Having office at A.94/2, Wazirpur Industrial Area New Delhi, by taking my signature and identify documents. Q10. Please state if you have not opened ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s he used to operate several banks accounts and firms in the name of his 'employees and other known person. His made opendie is to take signature on bank cheques from the person in whose name the bank account: are opened and use it as and when required. Same of the concerns controlled by Sh. Navneet Kumar Jain for the purpose of issuing bogus bills and accommodation entries are: 1. M/s Supremo Trading Co. 2. M/s Heer International 3. M/s Metal and Steel Inida 4. M/s Ramji Traders Statement dated 13.05.2009 of Sh. Girdhari Lai Puri Q3. How and why Sh. Navneet Jain opened the account mentioned in Q no.2. Ans. Shri Navneet Kumar Kumar Jain used to provide accommodation entries and bogus bills for sales. For this purpose he opened several bank accounts in the name of his employees and other known, person like; met-and my son Sh. Tarun Kumar in good faith I had signed certain documents but how Sh. Navneet Kumar Jain used it. I don't know I also have no knowledge or nay interest in the bank a/c operator by Sh. Navneet Kumar Jain in my name. Q4.' Please state whether you are aware that Sh. Navneet Kumar Jain is operating the above mentioned or any other bank ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wise bank transaction done by the assessee, which has been found credited in the respect of accounts is enclosed as per Annexure-A. The credit entries of the bank accounts have been taken to the accommodation entry Vide show cause dated 12.03.2013 the assessee was confronted with the specific query as to why the quantum of credit entries as determined from the bank accounts of the above firms may not be taken as total of accommodation entries provided during the FY 2004-05 to 2010-11, which was earlier confronted vide office notice u/s 142(1) dated 06.03.2013 also. In reply filed on 11.03.2013 assessee has stated that the turnover of 925.05 crores involved inter transfer among the 37 firms. He stated that after excluding the turnover of inter firms transfer and transaction of saving bank accounts the total turnover of all the firms is Rs. 662.13 crores. He was requested to justify his submission with evidence that the inter unit transfer between the firms as claimed by him is not part of turnover. For deciding the income of the assessee on account of business of bogus entry operation by the 37 firms, three key factus which are to be decided are as under:- The ownership and cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of Search and after that have been arrived at by applying a net commission rate of 0.102% to the earlier turnover of the accommodation firms which was at that time taken at Rs. 6,63,85,86,645/-.(See page 01 of reply dated 01/03/7013). 317.1.5 It is submitted Sir, that in fact a perusal of the overall reconciliation of the alleged turnover as confronted By your goodself and as reconciled by the assessee assessee would reveal that the earlier turnover was incorrectly token at Rs. 68586645/- instead of actual one at Rs. 6,62,13,21,866/- (refer page 01 & 02 of re ply dated 11/03/2013), which was thus earlier excess by Rs. 1,5742,840/-. It is further submitted that the revised lower turnover is not being disputed qua the earlier turnover, based on which, additional income was returned even prior to the date of search. 3.7.1.6 Reply dated 21.03.201 In this regard it is submitted that the above observation is based on factual submission and has been borne & brought out 'n' number of times before the investigation wing, prior to the search, during the course of search, during the post search investigations and also during the course of assessment proceedings, including but not l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t total turnover of accommodation-entries provided has been taken at Rs. 6,63,8586645/- instead of actual one at Rs. 6,62,13,21,866/- has been shown in return of income. This clearly shows that the assessee accepts the ownership and control of all the thirty-seven firms as given in para-3.3 above. 3.7.2.6 In view of the aforesaid discussion it is clear that Sh V;.'' h. Jain was not only the master mind behind the entire operations of providing accommodations entries through a maze of thirty-seven paper entities, but is being have that Sh. Vaibhav jain was the sole owner of all these benamy proprietorship firms which he had used for providing accommodation entries. 3.7.2.7 This maze of thirty seven firms used because the assessee cannot withdraw more than the specified limit in particular day from bank secondly this layering and maze of thirty seven firm were used to hide the VAT collected from the beneficiaries without depositing with the appropriate VAT authorities. There by the assessee were earning extra money on account of VAT collected from the beneficiaries which was neither deposited with the appropriate statutory VAT authorities nor it was refunded to the bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of each debit and credit entries:- In this report!, it is submitted that during the captioned assessment year, the assessee had operated through various concerns in providing accommodation bills/ paper-bills, it is submitted that the bank statements of various firms operated by the assessee are in the name of the proprietary concerns/ firms and the respective, proprietor/ owner thereof, except M/s Navneet Kumar jain & Sons {HUFj, could at best possibly refer/ explain the nature of each entry-, since no books of accounts were being maintained. 3.8.1.6 Reply dated 21.03.2013 That the herculious task of typing, identifying and lastly reconciling the credits of 37 firms, that is of 7 different years involving 100 bank accounts were completed by the assessee within a short span of 5 days i.e. between 03/2013 to 10/03/2013. It is submitted that the reconciliation of firm-wise, bank account wise and year wise reconciliation between the turnover as per revenue and as per assessee was submitted as part of reply dated 1 1/03/2013 only to find out that the assessee is being show cause again as to why the reconciled turnover as per the assessee version be not disregarded. Sir in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e should be excluded from the total accommodation entries quantum of the assessee. The submission of the assessee is accepted as the accounts belongs' to' Vishesh Gupta group therefore the turnover of 6.06 crore is being excluded from here. 3.8.2.4 The assessee has also claim that the turnover included in respect to saving bank accounts should be excluded as the transaction relate to the respective parties. The details of accounts are as under: Ms. Anjali Sharma 4102155000082000 Ms. Anjali Sharma 4102155000083951 Ms. Himanshi Arora 4102155000081685 Ms. Himanshi Arora 4102155000083937 Ms. Neha Rani 4102155000088221 Ms. Neha Rani 4102155000082138 Sh. Pitamhor Jhn ' 4102155000083994 Ms. Poonam Sharma 4102155000082254 Ms. Renu Sharma 4102155000082621 Sh. Santosh 4102155000083982 Shree Shyam Traders 4102135000000185 Shree Balaji Trading Co. 1295020 The submission of the assessee was duly considered and is not acceptable. The aforesaid persons in their statements have categorically denied stating that all the transaction in the aforesaid accounts were controlled an operated by Sh. Vaibhav jain. In view of the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission In this regard, it is submitted that assessee had already admitted vide statement on oath dated 26.01.2010 the fact that he is an entry provider and used to earn am d Yon from this business. It is submitted that, as informed to us, and as per the business practice followed by assessee, lie used to receive commission at the time when the entire bill amount was paid back to the entry receiver and as such at the time of final payment wrt the bill, payment was made after deducting due commission. It is further submitted that rate of commission varies with concerns and was between 50 paisa to 100 paisa per hundred rupee, as already a nit: b before search during search, post search investigation and also in assessment proceedings u/s 153A of the Act consistently. 3.9.1.3 It is submitted, and as staled in above Para also, wrt the entries specifically asked for justification by your goodself, commission was received only after full settlement of accommodation bill amount and as such commission shown as received on a particular page of Annexure A-3 represents commission received on total amount of entry provided to that respective concern instead of treating it as commission rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn seized material, the assessee has charged commission up to 3.85%. 3.9.2.2 As per the assessee own submission he destroys its books of account after work is over. In this circumstances the department will have to estimate the commission on the basis of material available with the department. 3.9.2.3 The seized accommodation bills indicates that the assessee has charged VAT @4% from the beneficiaries. The assessee has been unable to prove that the VAT charged on accommodation bills , have been refunded to the beneficiaries. 3.9.2.4 The assessee is using its tactics to route ns transactions through short duration firms so that trade tax department is unable to trace out the defaulters. 3.9.2.5 The assessee has not given any evidence regarding deposit of VAT charged on the accommodation entry bills with the trade tax departments. Therefore, it is be being held that the VAT charged on the accommodation entry bills has been retained by the assessee. 3.9.2.6 In view of the aforesaid facts and discussion the average rate of commission charge on the basis of annexure A-3 has been done which is reproduced as under: A B C D E F G H 1 P‟arty No Ann No Pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encies 1.87 E/ A-4 12 05.04.2010 3357 Sen Traders 223808 Sen Traders 1.50 E-3 A-4 12 05.04.2010 7952 Garg Traders 530145 Garg Traders 1.50 E-3 ' A-4 , 12 05.04.2010 10001 Bharat Agencies 533450 Bharat Agencies 1.87 E-3 A-4 11 06.04.2010 7928 Jain Metal Ind 528242 Jain Metal Ind 1.50 E-3 A-4 9 08.04.2010 48478 Ashna Overseas 3231881 Ashna Overseas 1.50 E-3 A-4 4 865 Homex India Pvt ltd 57628 Homex India Pvt ltd 1.50 281687 18527596 The assessee has not maintained its books of accounts, and details of very limited period is available with the department. Since the assessee has been charging commission @ 1.5% to 3.85% and the average of commission charge on the basis of said documents commission to 1.52%. Therefore it is being held that the assessee has charged commission @ 2% on the total quantum of accommodation entries provided by the assessee. 3.9.2.7 It is also being held that besides commission the assessee has also retained 4%-VAT charged on the invoices, as the assessee has faile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ummary of the Balance sheet of each "As rightly stated by your goods elf the assessee it -as a Director and/or shareholder in the above named concerns/firms Regarding the investment by the assessee in these firms, it is submitted that the same was very nominal. It is submitted Sir, that a summary of the Balance sheet of each of the above Company is attached. It is further submitted that, the Animal Financial statements (i.e., Audi ted Balance Sheet, PL A/c, etc.), JTR Computation of each of above concern/ company since inception/ incorporation, till assessment year 2011-12 is being attached. Regarding the other detail of the Companies, as desired by your goodself, it is submitted that the same are beyond the scope / keen of Search assessment proceedings as held by the Mumbai ITAT Special Bench in case of All Cargo Global Login 'at vs. DC If (ITAT Mumbai Special Bench), ITA 5018/Mumbai/2010 dated 00.07.2012 Sir, it is submitted that it seems that your goodself while calling the copies of bank statements, bank books etc. of this company intends to make out an assessment of these companies, which it is submitted even at the cost of repetitions outside the scope of instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umirshed inaccurate particulars of income, penalty u/s 271 (l)(c.) is being initiated. 5. Considering the above discussion, income of the assessee is computed as under:- Income declared by the assessee Rs. 482642/- Add: 1. Profit from accommodation entries as discussed in para 3 above Rs. 59074719/- 2. Addition on account of unexplained investment as discussed in Para 5 above Rs. 100000/- Net Taxable income Rs. 59657361/- P/o Rs. 59657360/-" 17. The assessee aggrieved with the order of the ld AO preferred an appeal before the ld CIT (A) . The ld CIT(A) gives his finding after considering the submissions of the assessee in para No. 8 as under:- "8. I have considered the facts of the case and the written submissions of the appellant. During the course of search & seizure operation the appellant admitted that he was engaged in the business / activities of providing accommodation entries by issuing bogus bills needy to parties by routing the entries through bank accounts of his own concern and also the bank accounts of the concerns operated in the names of other persons which were controlled by him. The appellant was using all these firms for the purpose of providing b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged from the beneficiaries on the bogus bills to the beneficiaries or deposited the same with the trade tax department, the Assessing Officer also added 4% VAT charged from the beneficiaries on the bogus bills to the commission income of 2% and accordingly calculated the total income earned by the appellant by applying rate of 6% on the total accommodation entries provided by the appellant during the year under consideration and calculated the net profit at Rs. 5,90,74,719/- after allowing expenses of 0.5% of the gross receipt of Rs. 1,07,40,85,796/-. Here also I do not find any reason to interfere in the order of the Assessing Officer as the appellant did not furnish any material to controvert the findings of the Assessing Officer. Accordingly, considering the facts and circumstances of the case and also the instances of the rate of the commission cited by the Assessing Officer in the chart incorporated in the order, in my view a rate of 2% commission charged by the Assessing Officer is very reasonable. Further, the Assessing Officer was also justified in adding 4% VAT charged from the beneficiaries in the absence of any evidence to show that either the same was refunded back ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplete details of share holding of the aforesaid companies for the period i.e. F.Y. 2004-05 to 2010-11, alongwith the details of capital introduced in respective years. Please furnish the complete details about source of investment alongwith copy of bank statement and confirmations and copy of ITR's etc. Please furnish the present postal address of share applicants." 4.1 The assessee in his reply has submitted as under: "As rightly stated by your goodself the assessee was a Director and/ or shareholder in the above named concerns/ firms Regarding the investment by the assessee in these firms, it is submitted that the same was very nominal. It is submitted Sir, that a summary of the Balance sheet of each of the above Company is attached. It is further submitted that, the Annual Financial statements (i.e., Audited Balance Sheet, P/L A/c, etc.], ITR & Computation of each of above concern/ company since inception/ incorporation, till assessment year 2011-12 is being attached Regarding the other detail of the Companies, as desired by your goodself, it is submitted that the same are beyond the scope / keen of Search assessment proceedings as held by the Mumbai ITAT Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to the income of the assessee as unexplained investment made in M/sAnsh Exim Pvt. Ltd., in the name of different bogus identities." In the course of assessment proceedings, the AR of the appellant filed the owing written submissions: "AO has discussed the issue vide para 4 (Page 52] of the Assessment order. AO has made an addition of Rs. One lakh as unexplained investment in the share capital of Ansh Exim (P) Ltd. in the name of Bogus identities. It is submitted that list of shareholders of the company was submitted in the Assessmentproceedings. The Ld. AO without appreciating the fact that Assessee has offered income of Rs. 4.83 lakhs and further income by applying 0.76% rate of commission comes to Rs. 33.95 Lacs the investment of Rs. 1 Lakh is thus covered by the Income so offered as stated above." 12. I have considered the facts of the case and the written submissions of the appellant. The appellant did not give any satisfactory explanation either in the course of search proceedings, assessment proceedings or during the appeal proceedings before me with regard to investment made in the company M/s Ansh Exim Pvt. Ltd. during the year under consideration. Therefore, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Assessee's father, Sh. Navneet Kumar Jain 5 16.06.2010 Assessee's father, Sh. Navneet Kumar Jain 6 22.02.2013 Assessee's father, Sh. Navneet Kumar Jain 7 08.05.2009 Neha Sharma, sister of Renu Sharma, Neha Sharma is shown as proprietor of Ess Mart Enterprises at Sr.No.33 on page 3 of the assessment order for A.Y. 2006- 07. Renu Sharma is proprietor of M/s Heer International and Shree Krishna International appearing at Sr. No. 16 & 17 on page 3 of the assessment order for A.Y. 2006-07. 8 06.05.2009 Girdhari Lai Puri 9 15.05.2009 Neha Sharma 10 08.05.2009 Renu Sharma 11 18.05.2009 Tarun Puri 12 18.05.2009 Girdhari Lai Puri 13 27.08.2009 Poonam Sharma 4. Since the activity of accommodation entries stood established even during pre search statements of the beneficiaries, proprietors of various concerns, assessee and his father, the only issue that remained was the determination to turnover of the business of giving accommodation entries and the corresponding commission. The AO has dealt with the issue from page 40 onwards. In his statement of 26.04.2010 (page 13 of assessment order for A.Y.2006-07) commission was stated to be from 0.5% to 1% and all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s should be taken as common submissions for all the years from A.Y.2006-07 to A.Y. 2011-12. 7. Apart from above addition, there are also additions for undisclosed investments in all the above years. The appeal No. wise submission in respect of the said additions is being made here as under: 1. ITA NO.3770/D/2014 - A.Y. 2006-07 Ground No.3 In respect of ground No.3 the AO has dealt with the issue from para 4 onwards while the CIT(A) has dealt with it in para 12. The issue involved pertains to the addition for share capital of one of the paper companies through which the assessee gave accommodation entries. The summon u/s 131 to one of the shareholders resulted in denial of application for shares. The corresponding reference is in para 4.2 of the assessment order and on page 18 of the order of CIT(A). Since the issue of accommodation entry through paper companies stand established and the assessee failed to establish the source of share application in the said company the addition of the same is justified. The Revenue also relies on the decision of the Apex Court in the case of Mukundray K Shah reported in 290 ITR 433 as the corresponding addition is consequent to an enqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f VAT on it which is collected by assessee but not paid to Govt) has been determined by the ld Assessing Officer as his income and further, the ld Assessing Officer allowed 0.5% towards the expenditure incurred by the assessee. Therefore, the ld Assessing Officer computed the income of the assessee of Rs. 64445148/- and granted expenditure deduction of Rs. 5370429/- and computed the net income at Rs. 59074719/-. While adding the sum the ld Assessing Officer has not granted the assessee the relief of Rs. 582642/- as income offered by the assessee. The ld CIT (A) reduced the addition by the above sum. During the course of assessment, proceedings the assessee was examined who repeatedly confirmed about the business. Further, some of the persons who were used as the benami of the assessee were also examined and they confirmed that they do not know anything about the accommodation entries provided by the assessee. As the case of the revenue conclusively proves which is confessed by assessee and his father in various statements as well as statements of the other persons that assessee is providing bogus bills to beneficiaries, it is correctly held that commission income is chargeable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no reason to reduce the commission income from 2%. With respect to the claim of the assessee that there is an expenditure also involved in these business and therefore, the commission income is required to be computed only at 0.76% also deserves to be rejected. The assessee has not shown any proof of such expenditure and no such proof were found in search proceedings. It was also not shown that what kind of expenditure assessee was incurring and to whom he was paying such expenditure. In view of this we confirm the order of the ld CIT(A) in confirming the addition of Rs. 58492077/- on account of commission income on providing accommodation entries. In view of this, we reject ground No. 2 of the appeal of the assessee. 23. Ground No. 3 of the appeal of the assessee is regarding addition of Rs. 1 lac as unexplained investment in the various entities operated by the assessee. We also do not find any reason to disagree with the order of the lower authorities and the order of the ld CIT(A) where the reasons given were adequate to confirm this addition. in the result ground No. 3 of the appeal of the assessee is dismissed. 24. Ground No. 1 is general in nature and therefore, same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the addition of Rs. 45280273/- on account of commission from accommodation entries. For reasons given by us in appeal of the assessee for Assessment Year 2006-07 we confirm the finding of the ld CIT(A) in confirming the above addition. Therefore, ground No. 2 of the appeal is dismissed. 38. Ground No. 3 of the appeal is with respect to addition on account of unexplained investment in various concerns of Rs. 5456000/-. For the reason given by us in assessee appeal for Assessment Year 2006-07 in ground no. 3 we dismiss this ground of appeal. 39. Ground No. 1 is general in nature and therefore, same is dismissed. 40. Ground No. 4 the assessee challenged the addition of Rs. 4860000/- on account of unexplained investment in the immovable properties and further investment of Rs. 3771000/- on account of unexplained investment in the properties. 41. The brief facts of the case shows that various seized documents were found during the course of search. In seized documents E-3/A-3, 9, 70 & 77 shows the cash payment receipt Rs. 5654000/- against sale of property No. 298, Manesar, Gurgaon. The assessee tried to explain the above document stating that it is difficult for him to explain th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dismissed. 48. In ITA No. 3775/Del/2014 for the Assessment Year 2011-12 vide ground No. 2 assessee has challenged the confirmation of the addition of Rs. 7342022/- on account of commission from accommodation entries. For reasons given by us in appeal of the assessee for Assessment Year 2006-07 we confirm the finding of the ld CIT(A) in confirming the above addition. Therefore, ground No. 2 of the appeal is dismissed. 49. Ground No. 3 of the appeal is with respect to addition on account of unexplained investment in various concerns of Rs. 240000/-. For the reason given by us in assessee appeal for Assessment Year 2006-07 in ground no. 3 we dismiss this ground of appeal. 50. Ground No. 1 is general in nature and therefore, same is dismissed. 51. In the result, appeal of the assessee is dismissed. 52. In the end before parting, we note that the ld Assessing Officer should not have stopped merely at making the addition in the hands of the assessee but should have alerted this scam to various authorities. Because looking to the magnitude of the fraud, it is impossible that it can be carried out if the bankers, VAT authorities, Income Tax Officers and Auditors of those entities ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by these bogus entities the revenue can reach to the other conduit persons in whose bank account the money ultimately travelled before its withdrawal in cash. Therefore, it is not merely these 37 concerns only but many more parties and entities from whose bank accounts the money are withdrawn. It may also be possible that bank balances on that bank account are not converted into cash by withdrawal but may also further be used by the assessee and his group of accommodation entry providers by further providing accommodation entries to the other parties. It may also happen that cash is never paid to the parties to whom the bogus bills are issued by the mode of withdrawal of cash from those bank accounts. It may also be possible that the bank balance generated in the other parties account are used for further providing accommodation entries who need the share capital, bogus loans and other credits. The revenue has made only part enquiry and unearthed the bogus billing scam of Rs. 650 to 700 crores on search on this assessee. However, if the enquiry is further conducted then it may possibly also show another scam of converting „black money‟ into so called „white ..... X X X X Extracts X X X X X X X X Extracts X X X X
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