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TMI Blog2024 (9) TMI 1702X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 at the residential premises of Sh. Kaushal Kumar, employee of Sh. Anand Kumar Jain and Sh. Naresh Kumar Jain (Jain Brothers), H. No. 151, Pocket-13, Sector-20, Rohini, Delhi. In course of search and seizure operation, certain documents and hard disks were seized. In the said seized material, a ledger mentioning the name of the assessee, was found. Based on such information, the Assessing Officer of the searched persons recorded a satisfaction note in terms of section 153C of the Act implicating the assessee. After receiving the satisfaction note from the Assessing Officer of the searched persons, the Assessing Officer of the assessee initiated proceedings under section 153C read with section 153A/143(3) of the Income-tax Act, 1961 (in short 'the Act'). In course of the assessment proceeding, the Assessing Officer verified the seized materials and was of the view that Jain Brothers were controlling/managing various shell/paper-companies through which they provide accommodation entries to large number of beneficiaries. He observed that the assessee is one of such companies. Alleging that various credit entries appearing in the books are merely in the nature of accommodation en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have upheld the decision of learned first appellate authority. In this context, she placed on record the following decisions of the Tribunal: 1. ACIT Vs. M/s. ZED Enterprises (P) Ltd., ITA No. 208 to 2012/Del/2022, order dated 09.01.2024. 2. DCIT Vs. M/s. Shivji Garments Pvt. Ltd., ITA No. 9639 to 9642/Del/2019, order dated 06.02.2024 6. Further, she submitted, in respect of some of the beneficiaries also substantive addition made by the Assessing Officer, has been confirmed by the Tribunal. She submitted, even substantive addition of commission income made at the hands of the Jain Brothers, has been confirmed by the Tribunal. 7. We have considered rival submissions and perused the materials on record. While deleting the addition, learned first appellate authority has observed as under: "9. Ground Nos. 7, 8, 11 & 14: AO had made an addition of Rs. 9,54,01,729/- on a protective basis and also noted that the information of the beneficiaries has already been disseminated by the Investigation Wing to the respective AOs for appropriate action by the AO in the hands of beneficiaries. AO has also noted that he is also further informing the Assessing Officers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But as far as changing of commission is concerned in the case of the appellant, it has been held by the AO in the assessment order that Sh. Anand Jain and Sh. Naresh Jain were entry operators who were managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission. Accordingly, taking that logic there is no question of charging of commission income in the hands of the appellant company, since nothing has been earned by the company in this regard being the shell concern. Therefore, I am of the view that no further addition can be made in the hands of appellant company under the facts as discussed above. Under these circumstances, the protective addition made by the AO of Rs. 2,96,83,752/-is directed to be deleted. The appellant gets relief on these grounds of appeal. 10. Ground No. 12: The appellant has challenged the addition made by the AO of Rs. 74,209/- The AO in the assessment order has made an addition on account of commission income of Rs. 74,209/-0.25% on the total credits of Rs. 2,96,83,752/-received from various partes 10.1 As discussed in para 9.4 above, Sh. Anand Jain and Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies have already been identified. Accordingly, when the beneficiaries were identified, the addition in such cases can at best be that of commission earned on such accommodation entries. But as far as charging of commission is concerned, it has been held in the case of Sh. Anand Jain and Sh. Naresh Jain that they were entry operators who were managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission. Accordingly, taking that logic there is no question of charging of commission income in the hands of the appellant company, since nothing has been earned by the company in this regard. Therefore, I am of the view that no further addition can be made in the hands of appellant company under the facts as discussed above as additions on account of commission has already been made in the cases of Sh. Anand Kumar Jain and Naresh Kumar Jain. 6.5. Under these circumstances, the protective addition made by the AO of Rs. 79,92,000/- is directed to be deleted. 7. In ground nos. 12 and 13, the appellant has challenged the addition made by the AO of Rs. 19,980/ The AO in the assessment order has made an addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as mentioned in the assessment or der as well as the remand report. 14. Having observed so, the Id. CIT (A) held that as far as charging of commission is concerned in the case of the assessee, it has been held by the AO in the assessment order that Sh. Anand Jain and Sh. Naresh Join were entry operators who were managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission and taking that logic there is no question of charging of commission income in the hands of the appellant company arises, since nothing has been earned by the company, being the shell concern. 15. Since, the commission already stands taxed in the hands of the entry operators in their individual capacity, no separate commission can be charged in the hands of the pass through/companies floated by the entry operators. As the assessee is found to be one of such pass-through entity, we decline to interfere with the or der of the ld. CITA) in deleting the commission charged. 16. Cross Objections are not pressed. 17. In the result, the appeals of the Revenue as well as the Cross Objections of the assessee are dismissed." 9.6 Since the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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