TMI Blog2019 (2) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... e is merit in the findings of the CIT(A) that no income could be earned without expenditure, but it is for the assessee to prove expenditure debited to the P&L Account with necessary evidence and also to prove that such expenditure has been incurred wholly and exclusively for the purpose of business. We, therefore, are of the opinion that the findings of the Ld.CIT(A) are not supported by any evidence and are contrary to assessee’s own admission. The issue needs to go back to the AO for further verification in the light of the fact that the assessee is involved in providing similar accommodation entries to another 47 entities for the purpose of ascertaining the true and correct nature of transactions carried out by the assessee. Hence, we set aside the issue to the file of the AO and direct him to redo the assessment after affording reasonable opportunity of hearing to the assessee.- Appeal filed by the revenue allowed for statistical purpose. - ITA No. 6373/Mum/2016 - - - Dated:- 13-2-2019 - Shri C.N. Prasad (Judicial Member) And Shri G Manjunatha (Accountant Member) For the Appellant : Shri Awungshi Gimson For the Respondent : Shri Nishit Gandhi ORDER P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not furnished. The AO further observed that on verification of information received u/s 133(6) of the Act from M/s Arshiya International Ltd it was seen from the bank statement of Axis Bank Ltd that there were payments made to the assessee by M/s Arshiya International Ltd. In order to verify the details of transactions, notice u/s 133(6) was issued to Axis Bank Ltd, for which the bank has filed complete details of transactions. The AO also issued notices to YES Bank Ltd calling for various details for which YES Bank Ltd has furnished necessary details. From the information collected from banks, the AO noticed that fund has been transferred from M/s Arshiya International Ltd s bank account to assessee s bank accounts from where cheques were issaued to various companies. The AO further observed that the assessee company s name was appearing in the website of sales-tax department in the list of suspicious dealers, who issued bogus bills without delivery of goods. Hence, notice u/s 133(6) was served on the sales-tax authorities. In response to notices, the sales-tax authorities have filed necessary details sought by the AO including copies of deposition statement dated 27-02-2008 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion that once the assessee has proved itself to be accommodation entry provider, there is no reason to make addition towards total purchases u/s 69C / 40A(3) of the Act. Accordingly, the AO was directed to delete addition made towards total purchases. However, the Ld.CIT(A) further observed that since the assessee itself has admitted that it is involved in providing cheque discounting business with 47 companies alongwith M/s Arshiya International Ltd, directed the AO to verify whether any such commission is offered by the assessee from other 47 companies. Insofar as disallowance of expenditure, the Ld.CIT(A) observed that the assessee has claimed total expenditure of ₹ 6,95,103, but the AO has disallowed total expenditure. It is an admitted fact that without expenditure, no business could be carried out. Therefore, considering the nature of income, the Ld.CIT(A) allowed 25% of gross commission income earned by the assessee as expenditure incurred in relation to such commission income and the balance disallowance made by the AO has been upheld. Aggrieved by the order of Ld.CIT(A), the revenue is in appeal before us. 4. The Ld.DR submitted that the Ld.CIT(A) was erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for necessary details. It is also an admitted fact that the AO has gathered various information from all the corners including banks and the beneficiaries of accommodation entries issued by the assessee, in order to ascertain true character of transactions recorded in assessee s books of account. The investigation carried out during the course of assessment proceedings coupled with information available in sales-tax website categorically proves that the assessee is involved in providing accommodation entries for a commission ranging from 1 to 1.5%. The AO has made addition towards total purchases when the assessee has not produced details including primary evidences like purchase bills to justify purchases. The AO has made addition towards whole purchases as unexplained expenditure u/s 69C of the Act. When the matter tranvelled to first appellate authority, the assessee has admitted that it is involved in providing accommodation entries to various parties including M/s Arshiya International Ltd. Although the Ld.CIT(A) has taken note of the fact that the assessee was involved in providing accommodation entries to 47 parties, but while arriving at final conclusion to delete addit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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