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TMI Blog2023 (6) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... osed of by this common order for the sake of convenience and brevity. 2. The grievances of the Revenue read as under: "(1) That the Ld. CIT(A) has erred in law and facts of the case in deleting the addition of Rs. 2,32,36,150/- made by the Assessing Officer on account of unexplained deposits/loans. (2) That the commissioner of Income Tax (Appeals) has erred in law and on facts in relying on the submissions filed by the assessee which were inadequate, incomplete, not genuine, not reliable and already rejected by AO during the assessment stage. (3) That the commissioner of Income Tax (Appeals) has erred in law and on facts by neither conducting her own independent and effective inquiry nor giving a direction as per subsection 4 of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were furnished. After considering the submissions, the CIT(A) was convinced that the credit entries appearing in the bank statement to the extent of Rs. 1,79,50,000/- is explained. In respect of the balance amount of Rs. 52,86,152/-, the CIT(A) observed that since the assessee is an entry provider the only addition that could be made is the commission charged by the assessee on providing accommodation entries and accordingly sustained the addition of Rs. 2,32,361.00 and deleted the balance. 5. Before us, the DR strongly supported the findings of AO. It is the say of the DR that the assessee has grossly failed in explaining the credit entries in the Bank account. Strong reliance was placed on the decision of the Hon'ble High Court of Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions? 2. Whether on the facts and in the circumstances of the case and in law, Tribunal erred in restricting the addition made by the Assessing Officer to the commission income at 0.15% without considering that the material found during the course of search clearly established that the net commission charged by the assessee varied between 1.5% to 3.6% and that the decision in Ms. Mihir Agencies (P) Ltd. relied upon by the First Appellate Authority was clearly distinguishable" 9. The Hon'ble High Court held as under: "5. Respondent is an assessee under the Act having the status of resident company thence also referred to as assessee). Assessee is engaged in the business of providing accommodation entries to entry seekers. A searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the books of the assessee and the assessee offers no explanation about the nature and source thereof or the explanation offered by the assessee is not in the opinion of the Assessing Officer satisfactory. In such a situation the sum so credited may be charged to income tax as the income of the assessee of the relevant previous year. Bus that not the position here. It has been the consistent stand of the assessee which has been accepted by the Firs Appellate Authority and affirmed by the Tribunal that the business of the assessee centered around customers beneficiaries making deposits in cash amounts and in lieu thereof taking cheques from the assessee for amounts slightly lesser than the quantum of deposits, the difference representing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held that the assessee had failed to discharge the onus which lay on it to establish the identity of the investor companies and the credit worthiness of the investor companies. In such circumstances, the entire transaction was found to be bogus. But as already discussed in the preceding paragraphs, assessee never claimed the cash credits as its income. It admitted its business was to provide accommodation entries. In return for the cash credits it used to issue cheques to the customers/beneficiaries for slightly lesser amounts, the balance being its commission. Moreover, the cash credits had been accounted for in the respective assessment of the beneficiaries. Therefore, the decision in NRA Iron and Steel (P) Ltd. (supra) is clearly disti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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