9911796707
TMI Blog2022 (7) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion u/s 69C without considering the fact that the said entry is merely an accommodation entry and the assessee was a conduit for introducing unaccounted funds which has been proved beyond doubt. 2. On the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the protective addition of Rs 5,10,00,000/- on account of unaccounted investment by observing that the investment reflected in the balance sheet is out of corresponding liabilities as the assessee company is not carrying any business actually and the said entry is unexplained. 3. On the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the protective addition of Rs 5,10,00,000/- on account of unaccounted investment and of Rs 12,75,000/-on account of unaccounted commission u/s 69C without considering the fact that the addition made on substantive basis has not reached its finality" 03. Brief facts of the case shows that assessee is a company allegedly engaged in manufacturing in textiles. Originally, the return of income was filed on 23rd September, 2011. Further, search on 11th August, 2014 was conducted on First Winner Group including the assessee. Notice under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Para 6.3.1 to 6.3.26 at pages 13 to 25. In the said appellate order, the substantive additions u/s 68 made of Rs 1,60,00,000/- have been confirmed which includes the addition related to our assessee of Rs 25,00,000/-. 5.3.2 Also, M/s Bhagwat Textiles P Ltd the AO has made the substantive u/s 68 of Rs 1,00,00,000/- and the same has been adjudicated vide my order in appeal No CIT(A)-51/IT-328/16-17 dated 03.11.2017. The operative part of the said order is from Para 6.3.1 to 6.3.26 at pages 13 to 25. In the said appellate order, the substantive additions u/s 68 made of Rs 13,05,00,000/- have been confirmed which includes the addition related to our assessee of Rs 1,00,00,000/-. 5.3.3 As regards M/s First Winner Textiles (India) P Ltd, the AO has made the substantive addition u/s 68 of Rs 1,75,00,000/- and the same has been adjudicated vide my order in appeal No CIT(A)-51/IT-352/16-17 dated 03.11.2017. The operative part of the said order is from Para 6.3.1 to 6.3.26 at pages 13 to 25. In the said appellate order, the substantive additions u/s 68 made of Rs 14,00,00,000/- have been confirmed which includes the addition related to our assessee of Rs 1,75,00,000/-. 5.3.4 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has made the said additions of Rs. 5,10,00,000/- in the hands of our assessee on protective basis by holding that the said investments in M/s Solitaire Texfab Traders & Textiles P Ltd. (Rs 25,00,000/-), M/s Bhagwat Textiles P Ltd. (Rs. 1,00,00,000/-), M/s Starwood Exports P Ltd. (Rs. 25,00,000/-), M/s Rikosh Fashions P Ltd (Rs 1,85,00,000/-) and M/s First Winner Textiles (India) P Ltd (Rs 1,75,00,000/-) are unexplained. It is noted that the provisions of section 69 can be invoked if (i) the said investment is not recorded in the regular books and (ii) the assessee offers no explanation about the source or the explanation offered is not satisfactory. It is relevant to note that both these conditions are to be cumulatively satisfied. The Hon'ble Orissa High Court in the case of Aurobindo Sanitary Stores (276 ITR 549) has held that the primary condition to be satisfied before invoking the provisions of section 69 is that there should be a finding of the AO that the investments are not recorded in the regular books. In the instant case, there is no dispute that the said amount of investment is duly recorded in the regular books of accounts. The source of an investment which is ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merits of the case as per information available on record. 08. The learned Departmental Representative vehemently supported the order of the learned Assessing Officer. 09. We have carefully considered the learned Departmental Representative. In this case, the assessee is found to be a conduit company providing accommodation entries to various parties. Names of entry operators are also mentioned in the assessment order and the statements are also recorded wherein they have categorically stated that all these entries are accommodation entries. During the year, this company invested in five different companies as share capital amounting to Rs.5,10,00,000/-. The learned Assessing Officer made an addition of the accommodation entry amount as well as the concerned commission in the hands of the assessee on productive basis. The learned CIT (A) deleted the addition on protective basis for the reason that on substantive basis these incomes have been taxed in the hands of all the beneficiaries. Naturally when the substantive addition is confirmed by the appellate authorities, we do not find any reason to dislodge the finding of the learned CIT (A) in deleting the addition in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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