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TMI Blog2024 (11) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... under: "1. That the CIT(A) erred in upholding the addition of Rs. 4,60,99,500/- being the cash deposits in the bank account of the appellant company without appreciating that admittedly the appellant company was being controlled by Mr. Tarun Goyal and he was carrying on the business of providing accommodation entries through various entities, including the appellant company and the cash was deposited in the bank account of the appellant for the purpose of layering the transactions and entries have been transferred to other group entities from where accommodation entries have been provided and therefore, cash deposited could not be added under Section 68 of the Income Tax Act in the case of the Appellant. 2. That the CIT(A) also failed to appreciate that considering totality of the circumstance cash deposited in the bank account of Rs. 4,60,99,500/- could not be added u/s 68 of the Act as the Assessing Officer has already considered commission income on the amount of accommodation entries given to outside parties from other group entities to which entities entries had been transferred from the account of the Appellant and transactions of deposits and of giving entries are two si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing the directions of Hon'ble ITAT vide its order dated 18.10.2013. 2. That the CIT(A) erred in upholding the commission income @2% disregarding the directions of Hon'ble ITAT to apply the rate considering the precedence available in this regard, for which necessary evidence had been duly submitted before the CIT(A). 3. That the CIT(A) erred in taking a view that precedence available in the form of appellate/assessment orders in other cases could not be considered for the purpose of taking the rate of commission inspite of the fact that the Hon'ble Tribunal had directed to determine the rate of commission taking into consideration the precedence available in this regard. 4. That the CIT(A) also erred in upholding the order of Assessing Officer determining commission @ 2% on the basis of rough notings in seized papers without appreciating that the notings under reference could not be relied upon as neither same were specifically in regard to rate of commission nor details were corroborated with other material and in any case the rates mentioned therein for a small amount could not be applied in all the cases of the Group for determining the rate of commission on total amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bagh, New Delhi. The Directors of such companies were his employees, who worked in his office as peons, clerks, receptionist etc. All the documents including blank cheques were got signed from these employees. A number of bank accounts were opened in the names of these companies and his employees. For providing accommodation entries this Group used to accept cash from the beneficiaries. The cash was deposited in bank account of any of the business concerns of this Group. Later, the said sums were transferred from one concern to another within the Group before returning/providing the said sums to the beneficiaries through banking channels. Transferring the money from one concern to another was to camouflage the true nature of money and to avoid investigations by the Tax Authorities. The accommodation entries were provided in the garb of Share capital, etc. Mr. Tarun Goyal admitted the above-mentioned facts during the course of initial assessment proceedings, under section 153A, 153C and 148 of the Act, of this Group cases. 5. The AO taxed the entire accommodation entries/unexplained credits in each assessee of this Group and also the commission income @ 2,00% thereon, as required, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it would not be possible to have in overall view of the matter and eliminate chain / multiple transaction, for arriving at the correct assessable amount. Thus, we have no other alternative but to set aside all these appeals to the file of the AO for fresh adjudication in accordance with law. 23. The AO shall after examining the evidence submitted by the assessee, consider all the cases together and; a) restrict the addition u/s 68 to only the peak unexplained credit in each case after elimination circular transaction. b) To eliminate taxation of the same amount multiple times, due to the chain transactions which resulted due to layering indulged by the assessee. c) Considerer the material on record and the precedence available on the issue and determine the percentage of commission, which the assessees would have earned and bring the same to tax. 24. Before parting we make it clear that the burden of proof lay on the assessee. It is for the assessee to demonstrate the chain of transaction, the layering indulged by him, the calculation of peak unexplained credit etc. and to prove each credit in the books of each assessee. In the result all these appeals are set aside to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Hon'ble Delhi High Court in of the case of this Group; namely, Bhawani Portfolio Pvt. Ltd. (ITA No. 158/2020& CM APPL. 7946/2020) and Tribunal order in the cases of Ordinary Financial Services Pvt. Ltd. (ITA No. 6719/Del/2016) wherein the rate of 0.50% of commission income. The Ld. Counsel drew our attention to para 9 of the Hon'ble High Court order in the case of M/s. Bhawani portfolio Pvt. Ltd. (supra), order dated 12th July, 2021. The finding of the Hon'ble High Court in para 9 is extracted as under:- "9. This court is of the view that none of the aforesaid findings are so perverse that they warrant an interference in appeal jurisdiction under Section 260A of the Income Tax Act, 1961. This Court is also of the view that the Tribunal, being the last fact-finding authority, was entitled to guess work and arrive at a ballpark rate of commission. Consequently, no substantial question of law arises in the present appeals. Accordingly, the appeals along with pending applications are dismissed." 9. The Ld. Counsel, emphasizing the fact that Tejaswi Investment Pvt. Ltd. provided accommodation entries in the garb of investment/through booking of flats. So, it had to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same as accommodation entries. 12. We have heard both the parties and have perused the material available on the record. We also perused the above referred case laws. 13. The dispute before us is limited only with the determination of quantum of peak credits appearing in books of accounts/bank accounts of various assessees. Undisputedly, the appellants/assessees were involved in providing accommodation entries to various beneficiaries. The appellants/assessees used to receive cash and thereafter they deposited the said sums in their bank account(s). To launder such black money, they used to transfer the said sums to their sister concerns for camouflaging. After siphoning of such money from one concern to another, the same were refunded back to the beneficiaries in the garb of some make shift transactions. As per para 23 of the Tribunal order dated 18.10.2013, the AO was directed to (i) examine the evidence submitted by the assessees, (ii) consider all the cases together and (iii) restrict the addition under section 68 of the Act to only the peak unexplained credit in each case after elimination of circular transaction(s) within the sister concerns. The said direction of Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in of the case of Bhawani Portfolio Pvt. Ltd. (ITA No. 158/2020 & CM APPL. 7946/2020) and Tribunal order in the cases of Ordinary Financial Services Pvt. Ltd. (ITA No. 6719/Del/2016), we direct the AO to work out the commission income @ 0.50% of accommodation entries provided by the concerned assessees and to allow the consequential relief.
17. In case of M/s. Tejasvi Investment P. Ltd., we find merit in the arguments of the Ld. CIT-DR. M Tech Developers Pvt. Ltd. had never come forward to own the transaction that it took accommodation entry of Rs. 48,59,333/- from M/s. Tejasvi Investment P. Ltd. Further, we have taken note of the fact that the investment documents were seized from the possession of the appellant/assessee and it has to be explained by the appellant/assessee. The appellant/assessee failed to bring any material on the record to contradict the finding of the lower authorities. We therefore, do not find any fault in the finding of the Ld. CIT(A) on this score. Thus, the same is upheld accordingly.
18. In the result the appeals of the assessees are allowed partially as above.
Order pronounced in open Court on 27th November, 2024 X X X X Extracts X X X X X X X X Extracts X X X X
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