TMI Blog2022 (8) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... hould be quashed. Since the satisfaction note is recorded on 13.01.2015, which pertains to assessment year 2015-16. Therefore, six previous assessment years for the purpose of assessment under section 153C of the Act, would be assessment years: 2014-15, 2013-14, 2012-13, 2011-12, 2010-11 and 2009-10. Therefore, assessment year 2008-09 should be excluded from the ambit of section 153C of the Act. We find merit in the submission of ld Counsel that period of six years should be reckoned with respect to the date of recording of satisfaction note and not the date of search. Respectfully following the judgment of Hon`ble High Court of Delhi in the case of RRJ Securities Limited [ 2015 (11) TMI 19 - DELHI HIGH COURT] and in the case of Sarwar Agency (P) Limited [ 2017 (8) TMI 733 - DELHI HIGH COURT] we quash the assessment order framed by the Assessing Officer under section 144 r.w.s. 153C - Decided in favour of assessee. Allowability of expenditure - We note that assessee is not doing actual business and earned only commission income on sales, import and loan entry. Hence, the books of account maintained by the assessee is not reliable and rejected u/s 145(3) of the Act by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und during the course of search. 2. On the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in confirming order passed by Ld. AO u/s 144. 3. On the facts and in the circumstances of the case and law, the Ld. CIT(A) erred in confirming the rejection of books of account without pointing out any defect in books of accounts. 4. On the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in not appreciating the fact that assessment order was framed without providing opportunity to cross examine and without furnishing the material and evidences to the appellant inspite of the appellants request, in gross violation of principal of natural justice. 5. On the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in confirming action of AO of making addition of Rs.5,04,425/- by treating appellants business as fictitious and holding that appellants business as being commission agent and accommodation entry provider only . 6. On the facts and in the circumstances of the case and law, the Ld. CIT(A) erred in confirming disallowance of genuine expenditure and allowed only 25% of commission income as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of ld DR for the Revenue to the effect that assessee cannot raise this legal issue first time before the Tribunal. Since the additional ground raised by the assessee challenging the validity of reassessment proceedings is a legal issue which goes to the root of the matter and no further inquiry is needed for deciding the said legal issue as all facts are already on record, hence we admit the said additional ground of appeal of the assessee for adjudication. 8. The facts necessary for disposal of these appeals are stated in brief. The assessee (M/s Dharam Impex), is a partnership firm. A search action u/s 132 of the Act was carried out at the premises of the Rajendra Jain and other group on 03.10.21013. The assessee filed return of income (ROI) u/s 139(1) on 22.09.2008, declaring total income of Rs.1,70,064/-. The assessee`s case was selected for scrutiny and Assessing Officer passed assessment order under section 143(3) of the Act on 24.09.2010, by assessing at Rs.2,43,530/-. Later on, notice under section 153C of the Act was issued on assessee on 13.01.2015 and then assessment was framed u/s 144 r.w.s 153C of the Act on 29.01.2016. During the course of search action in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Engaged in merely paper transaction ; ii) Engaged in import of rough cut polished diamonds for other clients (who do not want to show in there books), whose physical delivery is taken by actual importers, immediately after the clearance of consignment by CHA. iii) These concerns of Rajendra Jain, Sanjay Choudhary Dharmichand Jain are left with stock on paper zero stock in actual. These are basis of issuing bills giving accommodation entries on commission basis, to various parties, who either purchases from cash, or want to inflate the cost. iv) In addition to these, these concern provides entries of unsecured loans against cash. The business premises as well as residential premises were covered during search and survey proceedings. During the search and survey proceedings, Shri Dharmichand Jain, partner of the firm was asked to explain the nature of business functions, day-to-day affairs, role of their business activity details of persons who were contacted for purchase / import / sale. Shri Dharmichand Jain was not able to explain these things and admitted and explained the entire modus operandi. Most importantly, no single piece of diamond was found fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere handed over to real beneficiaries after the clearance from customs officials. Other Government authorities has not done any physical verification as the I.T. department has done. Issuance of sales tax/ VAT registration, payment of trade tax (in certain cases) are done by State- Authorities. There is no evidence brought before the department whether any spot verification or any physical verification is carried out by such authorities, on other hand proceedings u/s 132, collection of evidences and information's during the course of such proceedings as well as corroborative verification with parties, transactions undertaken by this assessee prove that no real business was being carried out by this assessee. Such finding of the department is past the event of any verification or issuance of VAT/ sales tax numbers, registration etc, by State Government or any other Authorities. The Assessing Officer further noted that the statement which are recorded by administering oath are presumed to be carrying truth in view of provisions of section 181 and 193 of the Indian Penal Code, which provides for imprisonment if the false statement is given. When it is so, no one like to be pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Param Anand Builders (P.) Ltd. v. ITO [1996] 59 ITD 29, has held that allegations of torture and harassment were unacceptable when independent witnesses were present at the time of search. Mere filing of a letter retracting the statement was not held to be rebuttal of the presumption that what is admitted is true. The Tribunal's observations were also based on the fact that the 'Panchas' had not brought any harassment to the notice of the higher authorities. In the present case assessee failed to prove by any legally acceptable evidence that statement of the partners given during search was involuntary or was tender under coercion or duress or was under misconception of facts. 14. Based on the above facts, assessing officer held that assessee is not doing actual business and earned only commission income on sales, import and loan entry. Hence, the books of account maintained by the assessee is not reliable and rejected u/s 145(3) of the Income Tax Act, 1961 and order was passed by assessing officer u/s 144 of I.T. Act, on best judged assessment basis. It was also held by the assessing officer that when assessee is doing import on behalf of client who is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 132(4), his subsequent statement u/s 131 on 13.01.2014, the assessment orders, the contentions of the appellant and the case law on the issue including that relied upon by the appellant. The basic objection of the appellant is that the reopening of the case; is not based on incriminating documents/evidence unearthed during search. As discussed subsequently in detail in this order; Shri Dharmichand Jain through the businesses in the style of firms and companies where he is partner/director as a group (i) businesses were found with no physical stock of diamond at all, (ii) correspondence or orders, were found not placed by the assessee and his group to the foreign concern from which imports were shown in the books. All this prove that his admission was given when corroborative evidence was unearthed during the course of search. The above observations/evidences are being discussed in detail later in the order. In the light of above, where such evidences pertaining to the appellant was recovered during the course of search at the premises of Shri Dharmichand Jain and other group cases and there was clear admission (even confirmed after 3 months) that the nature of business of Shri Dh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he search as discussed above) and pertinent observations are culled out from the facts and circumstances of the case: a) Not a single piece of diamond was found from the different premises of the appellant and group concerns although there was substantial stock as per books of account. The evidence was confronted to Shri Dharmichand Jain (partner of the appellant firm); and only after two days of search starting and on the 2nd day of statement being recorded did he admit (Q. No. 30) that they were only doing paper transactions in various companies and firms where he was partner/director. b) Shri Dharmichand Jain himself, as discussed above; has admitted the entire modus operandi of how he runs the businesses in various concerns controlled by him to show bogus transactions of imports of rough diamonds and sales and actually through these entities helps actual importers to remain benami, provide bogus bills and bogus credits etc, without actually not at all trading in the diamonds as shown in regular account books and income tax returns. c) Shri Dharmichand Jain has admitted it not only during search on 5th Oct. 2013 but has reiterated it again in the statement r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhanwarlal Jain where also searches were undertaken and similar modus operandi was found the rates accepted by him are substantially higher. In light of this, where for similar businesses including that of providing of accommodation entries, the rates of commission should generally be similar due to market forces. Even otherwise, the rates applied are already too low, looking to the risk of the appellant where credit purchases (imports) are in its name and the banks would first catch him in case of default. The appellant who is engaged in helping others suppress taxable income etc. does not merit any further relief, looking to the entirety of facts and circumstances discussed above. Once, the gross profits are estimated on the basis of commission rates, the net profit has to be determined. The expenses shown in the books are obviously bogus. For instance, the appellant has been claiming expenses and incomes like exchange rates difference and expenses/commission on sales etc. When the actual business is importing for others and in books credits in the name of exporters stand for months together, naturally the exchange rate difference is not payable by the appellant. In fact, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limit for issue of notice u/s 143(2) had already expired. Therefore, for all the assessment years except for A.Y. 2014-15, the assessment has to be treated as completed/unabated. The assessee has given the chart giving the details of date of filing of return of income, issue of notice u/s 153C and expiry of time limit u/s 143(2) and date of assessment made u/s 143(3) if made. 3. For A.Y. 2008-09, in case of Maniprabha Impex Pvt. Ltd. and Dharam Impex, assessee raised additional ground to the effect that issue of notice u/s 153C for this year is not valid. For A.Y. 2014-15, in case of all the assessees viz, Maniprabha Impex Pvt. Ltd., Dharam Impex and Kangan Jewels Pvt. Ltd., assessee took additional ground to the effect that assessment should have been made u/s 153C. All the ground including the additional grounds are discussed as under: Additional Ground regarding validity of assessment made u/s. 153C for A.Y. 2008-09: 4. For A.Y. 2008-09 in the case of Maniprabha Impex Pvt. Ltd. [IT(SS)A No. 306/AHD/2017] and Dharam Impex [IT(SS)A No. 312/AHD/2017] the following additional ground was raised: On the facts and circumstances of the case as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment was made u/s 144 only. ARGUMENTS: 9. As discussed above, the date of search is to be regarded as 13.01.2015 and action u/s 153C can be taken for preceding sex years A.Y. 2009-10 to 2014-15. Accordingly, the assessment made for A.Y. 2014-15 u/s 144 without issuing notice u/s 153C is invalid, particularly when assessing officer made addition on the basis of statement recorded u/s 132(4) and alleged so called materials collected at the time of search. Validity of assessment u/s 153C for A.Y. 2008-09 to 2013-14: 10. For all the assessment years, all the three assessees [IT(SS)A No. 288-293, 306-317/AHD/2017 ITA No. 1579-1580/AHD/2017] challenged validity of assessment u/s. 153C vide ground no. 1 as under: On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the proceeding u/s. 153C without appreciating the fact that no incriminating material was found during the course of search. FACTS: 11. The assessing officer has supplied the satisfaction note only in case of Maniprabha Impex Pvt. Ltd. and Dharam Impex. The satisfaction note was not supplied in case of Kangan Jewels Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s . In the satisfaction note recorded u/s. 153C it was also mentioned that the proceedings u/s 153C were initiated on the basis of statement of Shri Dharmichand Jain without mentioning any incriminating material except loose papers and pendrive. The assessing officer didn t describe any incriminating material either in the satisfaction note or in the assessment order. The statement cannot be standalone basis without reference to any material discovered during search and seizure operations can empower the assessing officer to frame block assessment u/s 153C. The statement recorded u/s 132(4) can only be basis for block assessment only if such statement relates to any incriminating evidence of undisclosed income unearthed during search and seizure. Merely because a satisfaction note was recorded, same could not lead to reach a conclusion that notice under section 153C was justified. 16. Prior to 01.06.2015, the proceedings u/s 153C can be taken only when the books of accounts seized in the course of search of third person belongs to assessee. However, with effect from 01.06.2015, the amendment was made and even when the books of accounts seized do not belong to the assessee, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. IBC Knowledge Park Pvt. Ltd. [ 69 taxmann.com 108 ](Kar. HC) CIT vs. Shri Ramdas Motor Transport [ 238 ITR 0177 ](A.P. HC) CIT vs. Naresh Kumar Agarwal [ 369 ITR 0171 ](A.P. HC) PCIT vs. Best Infrastructure (India) (P.) Ltd - [2017] 84 taxmann.com 287 (Delhi) Sree Lakshmi Venkateshwara Minerals vs. DCIT - [2021] 123 taxmann.com 255 Trishul Hi-Tech Industries vs. DCIT [IT(SS) No. 84-86/KOL/2011] 18. The Ld. CIT(A) confirmed the validity of assessment made u/s 153C also on the ground that the statement u/s 132(4) constituted material on record for purposes of section 153C. He relied on the judgment of Delhi High Court in case of PCIT vs. Nau Nidh Overseas (P.) Ltd. [2017] 88 taxmann.com 665 (Delhi). However, the decision is distinguishable as in that case cash was seized in the course of search and the director admitted that the cash belonged to assessee company and therefore it was held that it was sufficient material to initiate proceedings u/s. 153C. However, in case of assessee no such asset or incriminating material was found belonging to the assessee representing any income. Against, the assessee has already relied on j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case and law, the Ld. CIT(A) erred in confirming disallowance of genuine expenditure and allowed only 25% of commission income as expenditure on ad-hoc basis. 21. It is submitted that Shri Dharmichand Jain retracted his statement recorded at the time of search. The retraction statement was filed on 20.01.2014 which was not rebutted till the passing of assessment order. In the course of assessment proceedings, assessee filed ample evidence that his business of trading in goods was genuine which are as under: Import Invoices verified by Customs department House Air Waybills showing movement of goods Bill of entry furnished before Customs department Details of customs duty paid on imports Export documents verified by Customs department Documents showing movement of goods from India to overseas Insurance documents for goods in transit Kimberley process certificate issued after physical inspection of good Registration certificate issued by Maharashtra and Gujarat Sale Tax Department VAT Audit report along with VAT Challans Import-Export Certificate issued by Director General of Foreign Trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould be assessed as per the net profit disclosed as per the Profit and Loss A/c. When no unexplained expenditure or unexplained investment was found in the course of search, the income should be estimated by adopting net profit ratio and not gross profit ratio. 25. Further it is submitted that the lower authorities have observed that the assessee group has declared less commission income in providing accommodation entries as compared to Bhanwarlal Jain. However, the story is other way round as assessee declared more commission income as compared to Bhanwarlal Jain. The main difference is of commission on import which assessee declared at 0.2% while Bhanwarlal Jain declared commission income at 0.02%. Accordingly, assessee declared the commission income ten times than Bhanwarlal Jain and this fact is considerable as assessee s volume is much on imports compared to other items i.e. other items viz. loan. In case of Bhanwarlal Jain, the commission was estimated @ 1% for loan and in case of assessee it was taken @ 0.5% but this is having negligible effect as the loan outstanding in the case of the assessee is very less. Accordingly, Shri Bhanwarlal Jain declared commission on i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that search was conducted on 03.10.2013 for which the relevant assessment year is, assessment year 2014-15 and the previous assessment year is 2013-14 would be applicable to the assessee for the year under consideration, therefore prior to assessment year 2013-14, the six assessment years extended up to the assessment year 2008-09. Therefore, assessment year 2008-09 is also covered within the ambit of six previous years. Hence, Ld DR pointed out that assessment year 2008-09 should not be excluded from the purview of the preceding six assessment years. The ld DR also pointed out that satisfaction note recorded by the assessing officer under section 153C is a common satisfaction note and this satisfaction note is in accordance with law, therefore additional ground raised by the assessee may be dismissed. 19. On merits, Ld. CIT-DR argued that during the assessment proceedings loose papers, data contains in pen drive etc. were incriminating material and the entry recorded in these incriminating material has not been explained by the assessee. The Ld. CIT-DR for the Revenue also pointed out that assessee also did not co-operate during the assessment proceedings, therefore a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Description of the seized material (c) Address of premise/place from where such material was seized C-301, Shefield Apartment, Anand Nagar, Opp.Jarimari Garden, C S Road, Dahisar(E ), Mumbai-400 068 (d) Date of seizure of such material 04.10.2013 (e) Particulars of the relevant panchanama Panchnama Dated 05.10.2013 (f) Annexure/Sr.No./Page no. etc.,(particulars to be specified) Anneexure-A Annex.-A-I 6. Relationship of the person referred in S.No.4 with the person referred to in S.No.2 As stated in point 7 below 7. Satisfaction of the Assessing Officer of the person referred to in section 153A that the seized material referred to in S.No. 5 belong to the person referred to in S.No.4 During the course of search action in the case of Dharmichand Jain Group, it is revealed that group of companies has indulged as the groups in gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012-13, 2011-12, 2010-11 and 2009-10. Therefore, assessment year 2008-09 should be excluded from the ambit of section 153C of the Act. We find merit in the submission of ld Counsel that period of six years should be reckoned with respect to the date of recording of satisfaction note and not the date of search. For that reliance can be placed on the Judgment of Hon`ble High Court of Delhi in the case of RRJ Securities Limited 62 taxmann.com 391(Delhi), wherein the Hon`ble Court held as follows: 21. As discussed hereinbefore, once the AO of the searched person is satisfied that the seized assets/documents belong to another person and the said assets/documents have been transferred to the AO of such other person, the proceedings for assessment/reassessment of income of the other person has to proceed in accordance with provisions of Section 153A of the Act. Section 153A requires that where a search has been initiated under Section 132 of the Act, the AO is required to issue notice requiring the noticee to furnish returns of income in respect of six assessment years relevant to the six previous years preceding the previous year in which the search is conducted. As discussed her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . iv Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments to the AO of the Assessee. In this case, it would be the date of the recording of satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessment years 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, assessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, the period for which the assessments could be reopened would be much beyond the period of six years. This is so because the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to the date of the search. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of initiation of search in the second proviso to Section 153 A(1) shall be construed as reference to the date of receiving the books of accounts or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. 5. In terms of Section 153 A(1)(b) of the Act, the AO shall assess or re- assess the total income of six AYs immediately preceding the AY relevant to the previous year in which the search was conducted. The second proviso to sub-section (1) of Section 153 A of the Act, states that assessment or re- assessment relating to any AY falling within the period of six AYs referred to in the said sub-section pending on the date of initiation of the search under Section 132, would abate. 6. The case of the Revenue is that the first proviso to Section 153C refers only to the second proviso to Section 153A(1) of the Act, which only indicates that any assessment relating to any AY falling within the period of six AYs which is pending as of the initiation of search shall abate. Therefore, the second proviso to Section 153C is also concerned only with the aspect of abatement of pending assessments. According to the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Section 153C of the Act, the reference to the date of initiation of the search in the second proviso to Section 153A has to be construed as the date on which the AO receives the documents or assets from the AO of the searched person. Thus, by virtue of second proviso to Section 153A of the Act as it applies to proceedings under Section 153C of the Act, the assessment/reassessment pending on the date on which the assets/documents are received by the AO would abate. In respect of such assessments which have abated, the AO would have the jurisdiction to proceed and make an assessment. However, in respect of concluded assessments, the AO would assume jurisdiction to reassess provided that the assets/documents received by the AO represent or indicate any undisclosed income or possibility of any income that may have remained undisclosed in the relevant assessment years 24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in case of M/s Dharam Impex. 25. In the result, appeal filed by the assessee for assessment year 2008-09, in IT(SS)A No.306/Ahd/2017 in case of M/s Maniprabha Impex Pvt. Ltd. and in IT(SS)A No.312/Ahd/2017 in case of M/s Dharam Impex, are allowed. 26. Other arguments made by ld Counsel based on the satisfaction- note, such as satisfaction- note, is recorded by AO after Fifteen Months and Thirteen days, combined satisfaction -note is invalid, and there is no incriminating material found during the search etc. are hereby rejected. As we have noted that during the course of search action in the case of Dharmichand Jain Group, it is revealed that group of companies has indulged in giving accommodation entries. The seizure made at place of Dharmichand Jain, C-301, Shefield Apartment, Anand Nagar, Opp. Jarimari Garden, C S Road, Dahisar (E), Mumbai-400 068 comprises of loose paper folder one Pen drive which contains details of group companies including details belonging to M/s Maniprabha Impex, Kangan Jewels Pvt. Ltd. and M/s Dharam Impex. Looking at the nature of the transactions, the seized materials carry a clear implication over the income of the assessee. We note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not identified by the assessee therefore it was held by the Assessing Officer that all expenses like exchange loss, VAT payment, octroi payment, custom duties and all statutory expenses are also met by such client on whose behalf the goods are imported. Finally, the Assessing Officer made addition on account of commission on total imports, local sales, loan entries, as follows: Sales Amount Rate of commission Commission income Total turnover 60,27,08,000/- Total import 13,63,50,150/- Total turnover (excluding import group turnover) 44,63,30,059/- @ 0.02% 89,266/- Import made 13,63,50,150/- @ 0.20% 2,72,700/- Loan outstanding at year end 2,84,91,894/- @ 0.50% 1,42,459/- Total commission income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing officer referred relevant part of the statement of assessee and diagram of modus operandi of business operation which was prepared during the search action, as followed by assessee and his group while making the business of accommodation entry. The assessing officer further noted that the statement of Sachin Pariekh proprietor of Arihant Export, director of Karnawat Impex Pvt Ltd Moulimani Impex, Manish Jain (prop of Kalash Enterprises, Director of Kriya Impex Pvt Ltd and Karnawat Impex Pvt Ltd.) and Anoop Jain (Prop of Adi Impex) was recorded during search. The Assessing Officer (AO) on the basis of statement of Sachin Parikh, Manish Jain and Anoop Jain in wherein they admitted that all they were working on remuneration with Rajinder Kumar Jain (assessee). The AO also held that during recording statement of assessee, in Question No. 15, the assessee was asked to explain the modus operandi of his business. The AO prepared the diagram of modus operandi disclosed by the assessee. The AO on the basis of incriminating material gathered during the search action and on the basis of statement of Rajendra Jain and his associates held that all the business concerns of the assessee wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the such 6,13,534/- Income Assessed 18,40,602/- 14.Though, the AO also made various protective additions of income assessed in assessee s group concern, however, all those protective additions were deleted by the ld CIT(A). No further appeal is filed by revenue against such order in deleting the protective additions. 15.The Ld. CIT(A) confirmed the additions of commission income on export as well as on unsecured loan. The ld CIT(A) while confirming the order of the assessing officer recorded that that the basic objection of the assessee that his admissions of doing only paper business of trading of diamonds, in providing accommodation entry; is not correct and not based on incriminating document recovered in search action. The ld CIT(A) noted that assessee is Director in various companies/partners in various firms and also proprietor of a firm, the business of all firms and companies are controlled by the assessee. During the search no physical stock of diamonds was found, there were numerous e-mails including some e-mail found and seized during search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee basically made two fold submissions that no incriminating material/ evidence was recovered during the course of search and that the assessee retracted from his statement recorded by the search party and the assessee was doing real business and not engaged in providing accommodation entry. We find that during the search action more than sufficient incriminating evidence was found, which is also supported with the corroborative evidence found in the form of e-mails and other evidence in the form of books of account recovered from the pen drive, which itself is incriminating evidence against the assessee. We further noted the assessee in his retraction statement has not explained the material evidence found in the form of e-mail, from his e-mail account, his background history as to how he entered in the this particular business of providing entry, which he himself disclosed during the search action that he learnt all this business module of providing accommodation entry from his ex-employer namely Ratanlal Jain. The said retraction is filed for the first time before AO after gap of 12 months period. The reliance in case Manoj Begani Vs ACIT (supra), passed by Kolkata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ume of transactions in his bank account, the income of assessee would be estimated many fold comparative to the commission income added by the AO. Thus, the alternative ground of appeal is also rejected. 18.Ground No. 7 relates to rejection of books of accounts and ground No. 8 relates to expenses including foreign exchanges expenses, we find that the grievances of the assessee raised in these grounds of appeal has already been discussed in ground No. 3 to 5, therefore, needs no further adjudication. In the result all the grounds of appeal raised by the assessee are rejected. 19.In the result, the appeal of the assessee for AY 2008-09 in ITA No. 294/SRT/2021 is dismissed. Considering the fact that we have dismissed the appeal for AY 2008-09, the remaining appeals for AY 2009-10 to 2014-15, are also dismissed with similar observation. No order as to cost. 33. Respectfully following the judgment of the Coordinate Bench in the case of Sh Rajendra Sohan Lal Jain (supra), we dismiss appeal of the assessee. 34. We have adjudicated the issue on mertits taking into account the facts narrated in IT(SS)A No.312/AHD/2017. The facts are identical and similar, o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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