TMI Blog2020 (2) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. These were recorded by some other authorities during some other investigations. This can be used only as an information for initiating action against the assessee. They cannot be treated as gospel truth against the assessee. Therefore, if these statements are excluded on the strength of Hon ble Supreme Court judgment cited in the case of Andaman Timber Industries Vs. Comm. Of Central Excise, Kolkata, [ 2015 (10) TMI 442 - SUPREME COURT ] then nothing remained against the assessee to doubt the alleged commission expenses. Therefore, in view of the above facts and circumstances, we allow this ground of appeal, and delete addition. - Decided in favour of assessee. - ITA No.62/Ahd/2018 - - - Dated:- 12-2-2020 - Shri Rajpal Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of entry. According to the AO, the assessee was found to be one of the beneficiaries whereby it has taken entries in the form of bogus commission expenditure from such paper company viz. M/s.Sunlight Agency P.Ltd. On the strength of this information, reasons were recorded and notice under section 148 dated 22.3.2016 was issued to the assessee. In response to the notice received under section 148, the assessee has filed a letter contending therein that return filed originally be treated as filed in response to this notice. Notice under section 143(2) was issued, and thereafter the ld.AO has passed reassessment order dated 23.12.2016 under section 143(3) r.w.s. 147 of the Act. The ld.AO has made an addition of ₹ 28,03,000/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged to be, typically function, and then compare these characteristics with the facts of the case and in the light of well settled legal principles. A shell entity is generally an entity without any significant trading, manufacturing or service activity, or with high volume low margin transactions - to give it colour of a normal business entity used as a vehicle for various financial manoeuvers. A shell entity, by itself, it not an illegal entity but it is their act of abatement, of, and being part of, financial manoeuvring to legitimize illicit monies and evade taxes, that takes it actions beyond what is legally permissible. These entities have every semblance of a genuine business - its legal ownership by persons in existence, statutory do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found to be correct and justified and hence the same is confirmed. 4. A perusal of the record would indicate that stand of the AO is that Shri Rahul Jhunjhunwala was found to be indulged in providing only accommodation entries, and not in carrying any business. This fact revealed during the search carried out at the premises of Shri Rahul Jhunjhunwala. He has admitted this fact before search party. Thus, the AO on the strength of entries found in the books of accounts of Rahul Jhunjhunwala assumed that commission paid by the assessee to M/s.Sunlight Agency P.Ltd on account of sale facilitated by this concern to Sajjan India Ltd. is bogus commission, and it deserves to be disallowed as expenditure of the assessee. The case of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that crossexamination of the said dealers c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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