TMI Blog2021 (12) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... of search. Even otherwise, the Hon'ble Delhi High Court in the case of M/s. Nau Nidh Overseas Pvt. Ltd. [ 2017 (3) TMI 108 - DELHI HIGH COURT] has held that statement of a third party recorded during course of search proceedings u/s 132(4), constitutes 'material on record' for purposes of section 153C of the Act. This way, ld DR reiterated the findings of ld CIT(A). We note that issue under consideration is squarely covered against the assessee by the judgment of Division Bench in 1, in the case of Shri Rajendra Sohan Lal Jain [ 2021 (12) TMI 867 - ITAT SURAT] whereby the issue relating to Commission @ 0.02%, Commission on import @0.20% and Commission on loan @ 0.50% were adjudicated by upholding the order of ld CIT(A) as held no evidence is filed by the assessee on record to prove the fact that the assessee entered into hedging contract with the Banker, the evidence found in the form of e-mail and other evidences show the facts otherwise. Therefore, the submissions made by the assessee do not inspire confidence. None of the case laws relied by the ld AR for the assessee is helpful to the assessee as there was sufficient incriminating material seized during the sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O of searched person and the appellant was not recorded as per provisions of sec 153C of the Act, and no books of accounts were found belonging to the appellant, on the day of search at third party since it was brought from out side the searched premises/neither examined seized back up of audited accounts by the AO of searched person i.e. Rajendra Jain, before issue of notice u/s 153C. Therefore, the impugned assessment order is bad in law and invalid. 3. The Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts confirming the imitation of proceeding u/s 153C without appreciating the fact that statement u/s 132(4) of searched person i.e. Mr. Rajendra Jain does not indicate undisclosed income which has bearing over income of the appellant. Hence assessment order is bad in law and invalid. 4. The learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in upholding the addition made in the impugned assessment order without appreciating the fact that only pending assessment abate and not the completed assessment, thereby no addition can be confirmed if no incriminating materials found during search action and hence the impugned assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-Tax (Appeals) has erred in law and in facts in confirming the disallowance of expenses including foreign exchange fluctuation loss on account of import/export business of the appellant as claimed in the return of income. 11. The appellant craves leave of Your Honour to add to, alter amend and/or delete all or any of the foregoing grounds of appeal. 4. Brief facts as discernable from the orders of lower authorities are that a search action u/s 132 of the Income-Tax Act, 1961 was carried out at the premises of the Rajendra Jain others Group on 03.10.2013. The assessee filed return of income (ROI) u/s 139(1) on 19.09.2009 declaring total income of Rs. 3,82,260/. Assessment order u/s 143(3) has been passed by the assessing officer, on 29.12.2010, assessing total income at Rs.5,02,780/-. During the course of search action in the case of Rajendra Jain Group, it is revealed that group of companies has indulged in giving accommodation entries. The seizure made at place of Rajendra Jain, C-805, Oberoi Splendor Building, JVL Road, Andheri (E), Mumbai comprises of -back up of Computer, Mobile and Two Pen drives which contains details of group companies including details be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learance of consignment by CHA, (iii) These concerns of Rajendra Jain, Sanjay Choudhary Dharmichand Jain are left with 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. Shri Rajendra Jain in his statement u/s 132(4) of the Income Tax Act, 1961 has explained the nature of his business and also identified its beneficiaries. He categorically admitted that his main source of income is from commission for providing accommodation by bogus bills bogus loans . Shri Rajendra Jain has explained modus operandi of his business operation, which is mentioned by the assessing officer on page no.5 of assessment order. During the course of post search enquiries also, the above modus operandi followed by the above groups has been accepted by the key persons of the Groups. Statements of Shri Rajendra S. Jain, Shri Sanjay Choudhary and Shri Dharmichand Jain were recorded during the course of post search enquiries. All of them inter-alia admitted the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such business, the income of assessee is generated by commission on the Bills, loans commission on import. Assessee has given statement that he receives following commission: i) On import = 0.20% on Billed import ii) On loan = 0.50 % on the bogus loan entry. iii) On local bills = No details (Considered 0.02% on the local sales bills after deducting imports group turnover from turnover) 8. The assessing officer observed that Shri Sachin Pareek is the employee of Shri Rajendra Jain and doing business through proprietorship firm M/s Arihant Export. Since the business is not done by the assessee in actual which is shown and same is proved with evidence as well as confessed in statement u/s 132(4), in such circumstances, Books of accounts maintained by the assessee are not found correct and complete. Therefore, as per the provision of section 145(3) of the I.T. Act, a show cause notice for rejection of books of account of the assessee was issued on 22.12.2015 and served on 22.12.2015. The relevant portion of show cause notice is reproduced as under: 1. A search and seizure action in the case of Shri Rajendra Jain Group, Shri Sanjay Chaudhary Group and Shri Dharmicha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur honour's show cause notice as to why books of accounts of the assessee should not be rejected, I would like to state as under:- 1.1 The assessee follows Mercantile system of accounting as permitted by I.T. Act 1961. All the accounting standards, policies concepts and principles are followed appropriately. No Material discrepancies in the accounts have been noticed. The assessee maintains regular books of accounts comprising of day to day stock register, purchase, sales register and day books of cash and banking transaction. The same have been verified by the Investigation wing of Mumbai on the day of search itself. The accounts have been duly audited by chartered Accountant U/s 44AB of the Act. C.A. has never issued any qualified report in the case of assessee. Audit report with all the annexures have been submitted to your good office. In earlier submission, all the details of sales, import, purchase, stock and expenses have been furnished before your honour. Therefore no doubt should arise about correctness and completeness of the books of accounts of the assessee. 1.2 It is believed that you have surmised that books of accounts are not reliable merely on the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completeness of the accounts of the assessee, or where the method of accounting employed by the assessee have not been regularly by the assessee. It is further submitted that till date, your honour has not found any particular defect in the books of the assessee company and therefore your honour's proposal for rejection of books of accounts of the assessee is against the basic principal of natural justice and also against law. 1.5 Your honour have alleged that there was no physical stock found on the day of search, therefore it was presumed that no real business activity was undertaken by us. However considering the above referred submission along with documentary evidence with regard to payment of VAT to sales tax authority, payment of Custom duty to custom authority for import of polished diamonds, civil suit for recovery filed by overseas supplied against us, sales/ purchases transactions being accepted by sales tax authority, sales made by government public undertaking to us, and host of other evidences makes it clear that we are engaged in to genuine business activity. Merely not finding physical stock on the day of search cannot be ground to hold that we are en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerns only on paper) of the assessee were accepted that they work as an accountant only for assessee and all the concerns in which they are proprietor/ partner/ director floated by the assessee in their names. They all have explained the modus operandi of the assessee and his group concerns. The assessee himself was not able to explain these things and admitted and explained the entire modus operandi. Learned assessing officer noted that no single piece of diamond was found from any of business or residential premises of Shri Rajendra Jain, Shri Surendra Jain group concerns. Upon being confronted, the assessee has stated that he doesn't do any real purchase/sale of diamond and further explained modus operandi of his business.In response to show cause notice dated 22.12.2015 for rejection of books the assessee has submitted that- we do not have locker in our premises and keeping diamonds at premise is not safe. Further in most of our concerns, we do not have stock in our books of account on the day of search/ survey proceedings. Even whenever we have stock, the same are given on jangad (approval memo) to various brokers/parties for their approval for business requiremen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Karnavat Impex Pvt Ltd .(Director Rajendra S Jain) Nil 26.92 9. Mouliamani Impex Pvt Ltd. (Director Rajendra S Jain) Nil Nil 10. Rajendra S Jain (Prop. Avi Export) Nil 170.59 In order to validate the above modus operandi and to cross check the findings of the above search action, few beneficiaries were covered u/s 132 of the I.T. Act, 1961 on 05.05.2014, who had taken accommodation entries in the nature of bogus unsecured loans and bogus purchases from the group concerns of the assessee. (i) M/s R. Kantilal Co. (R. Kantilal Co. Group) (ii) M/s. A.S. Export (A.S. Export Group) (iii) M/s. S. Jogani Exports Pvt. Ltd. (S. Jogani Group) (iv) M/s. Decent Dia Jewels Pvt. Ltd. (Decent Diamond Group) The assessing officer observed that findings of the above search actions were very well corroborates the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, than the facts on the basis of which admission was made were incorrect. In the case of ACIT v/s Hukum Chand Jain [2010] 191 Taxman 319 (Chhattisgarh) Hon'ble High Court held that burden of proving that statement under section 132(4) was obtained by coercion or intimidation lies upon assessee. Proof of threat or coercion is necessary for valid retraction. The allegation that the assessee was tortured and harassed by the search team and was forced to make an admission is not enough [Manharlal Kasturchand Chokshi v. Asstt. CIT [1997] 61 ITD 55 (And.)]. The Mumbai Tribunal, in the 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 given during search was invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '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. In the light of all foregoing discussion, the assessing officer held that assessee is not doing actual business and earned only commission income on sales, import and loan entry on direction of Shri Rajendra S. Jain. Hence, based on these facts, the assessing officer held that books of account maintained by the assessee is not reliable and therefore rejected u/s 145(3) of the Income Tax Act, 1961 and order was being passed by assessing officer u/s 144 of I.T. Act on best judged assessment basis. It was also held by assessing officer that when assessee is doing import on behalf of client who is not identified by the assessee it is held 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. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt occupation /business of yours. Ans. I am engaged in the business of import, export as well as local trading of rough and polished diamonds. Q12. It has come to the notice that your employees are also running their independent proprietorship concerns of their own. Do you know? If yes, please explain as to how they do justice with the roles and responsibilities assigned to them by you. Ans. Sir, in fact, the proprietory concerns in the names of our employees are not independent business activity of their own. When I was working for Shri Ratanlal Jain, besides other concerns, he had been also operating through M/s Minar Gems, a proprietory concern in my name. So, after quitting the job, I took the idea of operating through various concerns including several proprietorship concerns in the names of our employees. In such a case. the effective control of business remains with us and the business income of such proprietorship concern get adjusted against the overall salary payable to such employee on annual basis. Q.26. Please gives the details of movable properties held by you or in the name of your family members. Ans. Sir. I have one Honda City car and one s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... davit before the assessing officer. In the course of assessment proceedings, assessee filed submission vide letters dated 11.10.2015, 26.12.2015 and 28.12.2015 in response to notice issued u/s 142(1) and show cause notice. 3. The notice u/s 153C was issued on 02.02.2015 and accordingly the date of the search is to be treated as 02.02.2015. In all the cases, the returns of income were filed before 02.02.2015 and time limit for issue of notice u/s 143(2) had already expired for all the years. So, for all the 4 years, the assessment has to be treated as completed assessment or unabated assessment. The assessee has given the separate chart giving the details of date of filing of return of income and issue of notice u/s 153C. Validity of assessment u/s 153C : 4. In ground no. 1, 2 and 3, assessee challenged the validity of the assessment made u/s 153C. The proceedings u/s 153C are initiated on the basis of the seizure of backup of the computer, mobile and 2 pen -drives in case of Rajendra Jain as narrated in satisfaction note. However, actually no such evidence was found in the course of search conducted in the case of Rajendra Jain belonging to assessee. This i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring 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. 6. 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, the proceedings u/s 153C can be taken if such books of accounts relates or pertains to assessee. It has been held by the courts that the amendment made u/s 153C w.e.f 01.06.2015, cannot be applied retrospectively. With effect from 01.10.2014, section 153C was amended and Assessing Officer should also be satisfied that the document seized have bearing on the total income of the assessee. In assessee s case the satisfaction note was recorded on 02.12.2014 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has to be referred in the satisfaction note. It was stated by Rajendra Jain in reply to question no. 38 that income declared in the return of income represent the net commission income earned. So even the statement of Shri Rajendra Jain is not incriminating having bearing on undisclosed income. CIT vs. Singhad Technical Education Society [84 taxmann.com 290] (SC) CIT vs. Calcutta Knitwears [362 ITR 673] (SC) PCIT vs. Munisuvrat Corporation [115 taxmann.com 265] (SC) PCIT vs. Himanshu Chandulal Patel [108 CCH 0019] (SC) PCIT vs. Himanshu Chandulal Patel [419 ITR 132] (Guj. HC) Anilkumar Gopikishan Agrawal vs. ACIT [106 taxmann.com 137 ](Guj. HC) CIT vs. Shardaben K. Modi [365 ITR 0169]( Guj. HC ) PCIT vs. Anand Kumar Jain [432 ITR 0384] (Del. HC) CIT vs. Renu Constructions Pvt. Ltd. [99 taxmann.com 426] (Del. HC) CIT vs. Harjeev Aggarwal [70 taxmann.com 95] (Del. HC) PCIT vs. Allied Perfumes Pvt. Ltd. [124 taxmann.com 358] (Del. HC) PCIT vs. Meeta Gutgutia [82 taxmann.com 287] (Del. HC) PCIT vs. Index Securities Pvt. Ltd. [157 DTR 0020] (Del. HC) Pepsico In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus, it is date of search that has been considered to be relevant date for purpose of applying amended provisions of section 153C(1). Consequently, in relation to searches carried out till 31-5-2015, it is not permissible for Assessing Officer to assume jurisdiction under section 153C. CIT vs. Shardaben K. Modi [365 ITR 0169] (Guj HC) The sole basis for issuance of notice was statement made during course of survey by son of Assessee. The reasons did not give any further details regarding amount which had been accepted by son of the assessee and how it would blind assessee. In absence of any independent material, record did not reveal how statement of son of Assessee. Any notice of reopening issued u/s 148 would be required to be tasted at touchstone of reasons recorded by assessing officer. PCIT vs. Anand Kumar Jain [432 ITR 0384](Del. HC) - Assessment framed under section 153A on basis of a standalone statement recorded under 132(4) without reference to any other material discovered during search and seizure operations is not sustainable. CIT vs. Renu Constructions Pvt. Ltd. [99 taxmann.com 426](Del. HC) - Prior to 1-6-2015, at stage of initiation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Holdings Pvt. Ltd. vs ACIT [50 taxmann.com 299](Del. HC) - Unless it is established that documents seized, whether they be photocopies or originals, do not belong to searched person, question of invoking Section 153C does not arise and mere finding of photocopies in the possession of a searched person does not necessarily mean and imply that they belong to the person who holds the originals. Pepsi Co. India Holding (P.). Ltd. v. ACIT [370 ITR 295] : In the instant case, it is nobody's case that Jaipuria Group had disclaimed those documents as belonging to them. Unless and until it is established that the documents as belonging to them. Unless and until it is established that the documents do not belong to the searched person, the provisions of section 153C do not get attracted because the very expression used in section 153C is that where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A... . In view of this phrase, it is necessary that before the provisions of section 153C can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny undisclosed income of the assessee (i.e., a person other than the one in respect of whom search conducted) for the relevant assessment years. If the seized money, bullion, jewellery or other valuable article or thing seized as handed over to the Assessing Officer of the assessee, are duly disclosed and reflected in the returns filed by the assessee, no further interference would be called for. Similarly, if the books of account/documents seized do not reflect any undisclosed income, the assessments already made cannot be interfered with. Merely because valuable articles and/or documents belonging to the assessee have been seized and handed over to the Assessing Officer of the assessee that would not necessarily require the Assessing Officer to reopen the concluded assessments and reassess the income of the assessee. Addition on account of alleged commission income : 10. Regarding ground no. 4, it is submitted that the addition is not made on the basis of incriminating documents but on the basis of the statement of Rajendra Jain. The materials indicated in the satisfaction note u/s 153C cannot be correlated with the addition made by the assessing officer. The em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails 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 Civil Suit against Rajendra Jain for non-payment on account of import made by 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 Invoices for purchase made from a government sponsored enterprise Sample Bank Statement showing non-existance of any substantial cash 13. In the following cases, the purchases were held to be genuine even when the statement was given by the entry provider that he has given the accommodation entries. The reliance is placed on the following decision of tribunals : DCIT vs. Shri Sourabh Navalkishore Garg [ITA No. 4130/Mum/2017] Shantivijay Jewels Ltd. [ITA No. 1045/Mum/2016] Prabhat Gupta vs. ITO [ITA No. 277/M/2017 797/M/2017] Manoj Beg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the regular return of income filed by firms/companies after taking into consideration commission on such imports. The import expenses are reflected in the Audited Books of Accounts and are supported by documents. Accordingly, without prejudice it is submitted that the commission should be assessed as per the net profit disclosed as per the Profit and Loss A/c. In fact, in the satisfaction note recorded u/s 153C also the audited accounts were considered to be incriminating materials. The assessing officer has made the addition on the basis of the statement of Shri Rajendra Jain where he disclosed the percentage of commission earned on providing of accommodation entries however, he also stated after allowing the commission, the net profit that was reflected in the regular books of accounts has been earned by way of commission on providing accommodation entry. 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. 15. Further it is submitted that the lower authorities have observed that the assessee group has declared less commission income in providi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idering the decision of Rajendra P. Jain vs. DCIT cited supra. 18. In view of the above submission, the assessment framed u/s 153C may please be quashed and/or addition in excess of declared income may please be deleted. 16. On the other hand, Learned DR for the Revenue submitted that Shri Rajendra Jain and Surendra Jain as a group, the appellant, the companies where Shri Rajendra Jain is director, the businesses in the style of firms and proprietorships in the name of the appellant and his other employees/persons controlled by him and Surendra Jain as a group were: (i) found with no physical stock of diamond at all, (ii) there were numerous e-mails including copies of some found and seized during the search and some apparently recovered from the computer during the search which clearly proved that the real beneficiaries of import of diamonds were different than in the books, (iii) there were also e-mails which proved that persons wanting accommodation entries were approaching the appellant and other group concerns (iv) 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. (v) B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by the aforesaid order of the Tribunal. We see no reasons to take any other view of the matter than the view so taken by the Division Bench of this Tribunal in assessee s own group case, vide order dated 26.11.2021. In this order, the Tribunal has inter alia observed as follows: 10. We have heard the submissions of the learned authorised representative (ld AR) of the assessee and the learned Commissioner of Income Taxdepartmental representative (ld CIT-DR) for the revenue and have gone through the entire record carefully. The Ld. AR for the assessee submits that investigation team was recorded the statement of assessee by pressurizing him. The assessee has already retracted the statement by filing retraction statement dated 21.10.2013 and 09.01.2014, before the assessing officer on 31.03.2014. When search was conducted the assessment for 2008-09 to 2012-13 were not pending and were already concluded either under section 143(3) or 143(1) and hence no income can be assessed unless there is incriminating material found during the course of search action. The A.O. merely relied on the fact that no stock of the diamonds was found at the time of search. The goods were giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 936/Kol/2017), M B Jewellwrs sons (ITA No. 1/Kol/2017). 11. On the other hand the Ld. CIT-DR for the revenue supported the order of the Ld. CIT(A). The ld CIT-DR for the revenue submits that during search action sufficient incriminating evidence was unearthed. The statement of assessee and his associates were recorded under section 132(4). The assessee in his statement disclosed the modus operandi of the operation of accommodation entry. During the search action the assessee confessed in his statement recorded under oath that he along with his other associate, employees and family members are operating through a number of business concern of three natures i.e. Proprietorship firm, partnership firm as well as companies in the name of various persons including his employees. For all practical purposes, he himself ensures the chain of entire business network on profit sharing basis. During the search on business premises as well as residential premises and survey on their employee it was admitted by all the person and family members and relatives that they were working for the assessee. Not a single piece of diamond was found from any of the business or residentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the corresponding ground No.1 of appeal is treated as not pressed and dismissed as such. 13. Now adverting to the Ground No. 2 to 5 which relates to the additions of commission income that such additions are not based on incriminating evidence. A search action was carried out by the revenue at the assessee group on 03.10.2013, during the search action the statement of Rajinder Jain, Dharmi Chand Jain and Sanjay Chowdhary was recorded. Consequent on the search action and evidences gathered during search and post search action, notice under section 153A was served on the assessee to file return of income. The assessee filed return in response to the said notice, but no additional income was offered. The assessing officer after serving statutory notices proceeded for assessment. During the assessment the assessing 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 Karn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount Rate of commission, Commission income Total turnover 2,43,23,94,646/- Total Import 86,88,19,534/- Total turn over (Excluding import group turnover) 1,47,37,83,599/- @0.02% 2,94,757/- Import made 89,88,19,534/- @0.20% 17,37,639/- Loan outstanding at year end 8,43,48,087/- @0.50% 4,21,740/- Total commission income earned 24,54,136/- Deduction of expenses of 25% is given for paper transactions related cost as the such 6,13,534/- Income Assessed 18,40,602/- 14. Though, the AO also made various protective additions of income assessed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by actual beneficiary and e-mail found to actual beneficiary, the ld CIT(A) concluded that assessee and his group was providing accommodation entry. The ld CIT(A) further concluded that once the business as per books is proved fictitious and bogus, the action of AO in rejecting the books is obvious. On the ground/ grievance of the assessee on additions of commission and allowance of 25% expenses the ld CIT(A) concluded that the addition made by AO is on lower side comparative to the addition in case of Bhanwar Lal Jain, who was also providing similar accommodation entry with similar modus operandi. The ld CIT(A) further held that once books are rejected, the profit is to be estimated on the basis of commission rates and net profit is to be determined. On the grievance of assessee of exchange rate difference, the ld CIT(A) held that when the actual business is importing for others and in the books credit in the name of exporters (other beneficiary), the exchange rate difference is not payable by the assessee and rejected the ground raised by the assessee. 16. Before us, the ld AR for the assessee basically made two fold submissions that no incriminating material/ evidence wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the fact that the assessee entered into hedging contract with the Banker, the evidence found in the form of e-mail and other evidences show the facts otherwise. Therefore, the submissions made by the assessee do not inspire confidence. None of the case laws relied by the ld AR for the assessee is helpful to the assessee as there was sufficient incriminating material seized during the search action on the assessee on the basis of which it is clearly proved that the assessee is in the business of entry provider. Therefore, we do not find any merit in the grounds No. 2 to 5 raised by the assessee, which we dismissed. 17. Ground No. 6 relates to alternative and without prejudice ground that the alleged commissions has already included by the assessee in his sales transaction. Considering the facts that the lower authority have categorically held that the assessee was not doing any genuine business transactions and was engaged in providing accommodation entry, books of the assessee was rejected and only very meager rate of commission income was added to the total income of the assessee, which we have already affirmed. If for the sake of assuming it is considered that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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