ACIT, New Delhi V. Sh. Anil Aggarwal, Ghaziabad

ITA 1139/DEL/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0559 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 03-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RESPECTIVELY
• Assessee Lawyers: J K MISHRA SHRI VED JAIN
• Keywords: Accommodation entries
• Section: 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1138/DEL/2016 ASSESSMENT YEAR: 2009-10 ITA NO.1139/DEL/2016 ASSESSMENT YEAR: 2010-11 ITA NO.1141/DEL/2016 ASSESSMENT YEAR: 2012-13 ACIT, CENTRAL CIRCLE-9, NEW DELHI VS. SHRI ANIL AGGARWAL, H. NO. 67, SECTOR-1,VAISHALI, GHAZIABAD PAN : AFGPA3349M (APPELLANT) (RESPONDENT) ORDER PER DR.B.R.R. KUMAR, A.M: THESE THREE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE SEPARATE ORDERS OF LEARNED COMMISSIONER OF INCO ME TAX (APPEALS)-24, EACH DATED 09.12.2015, PERTAINING TO ASSESSMENT YEARS 2009-10, 2010-11 AND 2012-13 RESPECTIVELY. APPELLANT BY SHRI J.K. MISHRA, CIT(DR) RESPONDENT BY SHRI VED JAIN, ADV. DATE OF HEARING 21.10.2019 DATE OF PRONOUNCEMENT 20 .12.2019 2 ITA NOS.1138, 1139 & 1141/DEL/2016 2. SINCE COMMON GROUNDS, EXCEPT DIFFERENCE IN AMOUN T, ARE RAISED IN ALL THE APPEAL, WE PROCEEDED TO DECIDE AL L THE THREE APPEALS BY PASSING A CONSOLIDATED ORDER. THE GROUND S OF APPEAL RAISED IN ITA NO.1138/DEL/2016 IN ASSESSMENT YEAR 2 009-10 ARE AS UNDER: 1. THE ORDER OF LD. CIT(A) IS NOT CORRECT IN LAW AN D ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN RESTRICTING THE ADDITION AMOUNTING TO RS.9,91,000/- OUT OF TOTAL ADDITION OF RS.11,59,200 /- MADE BY THE AO ON ACCOUNT OF COMMISSION. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.19,32,0 0,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDI T. 3. BRIEF FACTS OF CASE ARE THAT A SEARCH AND SEIZUR E ACTION U/S 132 OF THE INCOME TAX ACT 1961 WAS CARRIED OUT ON T HE ROCKLAND GROUP OF CASES ON 06.09.2011. A CONSEQUENTIAL SEARC H ACTION U/S 132 WAS CONDUCTED ON ASSESSEE, SH. ANIL AGGARWAL ON 21.10.2011. THE ASSESSEE IS ADMITTEDLY AN ENTRY OPE RATOR BASED IN NEW DELHI. THE ASSESSING OFFICER COMPUTED THE AS SESSMENT U/S 153A FOR THIS ASSESSMENT YEAR ON 28.03.2014 WHE REIN HE MADE TWO ADDITIONS: I. ON ACCOUNT OF COMMISSION INCOME @ 60 PAISA PER RS.100 OF ACCOMMODATION ENTRY PROVIDED - RS.11,59,200/-. II. CREDITS APPEARING IN THE BANK ACCOUNT OF THE AP PELLANT RS.19,32,00,000/-. 4. GROUND NO. 2: DURING THE COURSE OF SEARCH ACTION, IT WAS OBSERVED THAT CERTAIN CONCERNS OF THE ROCKLAND GROU P HAVE CREDITED SHARE CAPITAL AND SHARE CAPITAL PREMIUM TO THEIR BOOKS. THESE ARE ADMITTEDLY BOGUS ACCOMMODATION ENTRIES, I N WHICH 3 ITA NOS.1138, 1139 & 1141/DEL/2016 MONIES WERE TRANSFERRED TO THE ROCKLAND GROUP THOUG H THE BANK ACCOUNTS OF CERTAIN COMPANIES CONTROLLED BY THE ASS ESSEE CHEQUES, FOR WHICH THE ASSESSEE RECEIVED COMMISSION . THE STATEMENT OF THE ASSESSEE, SH. ANIL AGGARWAL HAD BE EN RECORDED U/S 132(4), WHEREIN HE HAS UNEQUIVOCALLY ADMITTED T HAT HE HAS SET UP SOME PAPER COMPANIES WHICH DO NOT CARRY OUT ANY BUSINESS ACTIVITY, BUT ONLY INDULGE IN ROUTING OF A CCOMMODATION ENTRIES. THE STATEMENT OF SH. ANIL AGGARWAL HAS BEE N REPRODUCED IN THE ASSESSMENT ORDER AT PAGES 2, 3, 4 & 5. THE A SSESSEE HAS ADMITTED THAT HE HAS PROVIDED ACCOMMODATION ENTRIES TOTALING RS. 289.79 CRORES TO VARIOUS CLIENTS THROUGH HIS COMPAN IES. HE HAS STATED THAT HE HAS RECEIVED COMMISSION @ 0.1% OF TH E TOTAL ACCOMMODATION ENTRIES. THE TOTAL OF SUCH ACCOMMODAT ION ENTRIES IS RS.19,32,00,000/- FOR THIS YEAR. THE A.O. OBSERV ED THAT VARIOUS OTHER INVESTIGATIONS HAD BEEN CARRIED OUT ON OTHER SIMILAR ENTRY PROVIDERS NAMELY, SH. MAHAVIR JAIN. IN THE STATEMEN T RECORDED OF SH. MAHAVIR JAIN, A ENTRY OPERATOR AND SH. VIPUL JA IN, DIRECTOR OF SOME OTHER COMPANIES LIKE BRAIN SOFT INFRA CONSULTA NTS PVT. LTD., M/S KAY BUILDWELL P. LTD., M/S VAISHNO DEVI LAND & BUILDING DEVELOPERS PVT. LTD., M/S CHINT PUMI BUILDERS PVT. LTD. AND M/S KELA DEVI BUILDERS PVT. LTD., WHO ALSO PROVIDE ACCO MMODATION ENTRIES ON COMMISSION BASIS, FOR WHICH THEY HAVE AD MITTED THAT THE COMMISSION CHARGE IS 0.6% FOR PROVIDING SUCH EN TRIES. THE A.O. REJECTED THE PLEA OF THE ASSESSEE THAT HIS CAS E IS DIFFERENT FROM MAHAVIR JAIN/ANIL JAIN INASMUCH AS HE HAS PROVIDED ONLY EXPENDITURE ENTRIES AND NOT SHARE APPLICATION ENTRIES. THE A.O. ADOPTED THE RATE OF 0.6% COMMISSION ON ENTRIES. ACC ORDINGLY, IN VIEW OF THE TOTAL ACCOMMODATION ENTRIES OF RS.19,32 ,00,000/- FOR 4 ITA NOS.1138, 1139 & 1141/DEL/2016 THE YEAR THE A.O. ARRIVED AT THE UNDISCLOSED COMMIS SION AT RS.11,59,200/- (RS. 19,32,00,000/- * 0.6%) FOR THIS YEAR. 5. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE ORDER OF THE LD. CIT (A). THE RELEVANT OPERATIVE PO RTION IS AS UNDER: I. FIND THAT IT IS AN UNDISPUTED FACT THAT THE AP PELLANT HAS PROVIDED ACCOMMODATION ENTRIES TOTAL RS. 19,32,00,000/- FOR THE A.Y. 2009-10. THIS IS ALSO REFLECTED IN THE STATEMENTS OF FACTS FILED ALONG WITH THE APPEAL APPLICATION. THE APPELLANT HAS ADMITTED PROV IDING ACCOMMODATION ENTRIES FOR A COMMISSION, AND THIS ADMISSION IS INCRIMINATING MATERIAL UNEARTHED DURIN G THE SEARCH ACTION. THE NEXT POINT IS REGARDING THE RATE OF COMMISSION. THE APPELLANT HAS OFFERED ONLY 0.1% AS COMMISSION. HOWEVER, THE A.O. HAS CLEARLY BROUGHT OUT EVIDENCE THAT ADMITTED MARKET RATE FOR PROVIDING SIMILAR ACCOMMODATION ENTRIES IS 0.6% AND NOT 0.1% AS CLAIM ED BY THE APPELLANT. I AM OF THE VIEW THAT THE ACTION OF THE A.O. IN ADOPTING 0.6% COMMISSION RATE IS NOT ARBITR ARY, BUT BASED ON EVIDENCE UNEARTHED DURING THE SEARCH ACTION AT THE ROCKLAND GROUP AND CLEARLY ESTABLISHE S THE MARKET RATE FOR SUCH ACCOMMODATION ENTRIES. I THERE FORE CONFIRM THE ADOPTION OF 0.6% COMMISSION RATE BY THE A.O. HOWEVER, I NOTE THAT THE A.O. HAS ADDED THE ENTIRE 0.6% COMMISSION AS UNDISCLOSED INCOME, INSTEAD OF THE EX CESS OF 0.6% OVER THE ADMITTED COMMISSION RATE OF 0.1%. THEREFORE THE ADDITION HAS TO BE RESTRICTED TO THE DIFFERENCE OF 0.5% ON RS.19,32,00,000/-. IN OTHER W ORDS, THE ADDITION IS UPHELD TO THE EXTENT OF RS.9,91,000 /- ONLY FOR THE A.Y. 2009-10. 6. HAVING GONE THROUGH THE ORDER OF THE LD. CIT (A) , WE FIND THAT THE ORDER IS ONLY RECTIFICATION OF THE COMPUTATION OF THE COMMISSION AND EFFECTIVELY NO AMOUNT HAS BEEN DELET ED BY THE LD. CIT (A). THE APPEAL OF THE REVENUE IS ON THE VERGE OF BEING TREATED 5 ITA NOS.1138, 1139 & 1141/DEL/2016 AS INFRUCTUOUS. HENCE, THIS GROUND OF APPEAL OF THE REVENUE IS HEREBY DISMISSED. GROUND NO. 3: 7. HEARD THE ARGUMENTS OF BOTH THE PARTIES WHO RELI ED ON THE RESPECTIVE ORDER OF THE AUTHORITIES BELOW AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. 8. THE A.O. HAS CONSIDERED THE SUM OF RS.19,32,00,0 00/- CREDITED TO THE BANK STATEMENT OF THE ASSESSEE AS U NDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT ON PROTECTIVE BASIS. HOWEVER, IN ANY CASE, SINCE THE ASSESSEE HAS SUBMITTED THAT THE MODUS OPERANDI OF THE ASSESSEE W AS THAT HE WAS INTERMEDIARY IN THE ACCOMMODATION ENTRY BUSINES S WHEREIN HE HAS RECEIVED CHEQUES WHICH WAS ORGANIZED BY ONE SH. H.P. AGGARWAL FROM KOLKATA AND THEN PASSED ACCOMMODATION ENTRY CHEQUES TO THE ROCKLAND GROUP (FOR WHICH RECEIVED T HE COMMISSION ONLY) AND WHICH THE ASSESSING OFFICER DO ES NOT DISPUTE, IT WOULD NATURALLY FOLLOW THAT THE SUM OF RS. 19,32,00,000/- CANNOT BE THE UNDISCLOSED INCOME OF THE ASSESSEE. IT IS ADMITTED POSITION OF THE REVENUE TH AT THE ASSESSEE IS ONLY PASSING ON THE AMOUNTS RECEIVED IN HIS ACCO UNT FOR WHICH HE GETS COMMISSION. THE A.O. HAS NOT BROUGHT OUT TH E RESULTS OF ANY ENQUIRIES MADE ABOUT THE SOURCE OF THE CHEQUES THAT HAS BEEN RECEIVED, TO SHOW IF INDEED THE SUMS CREDITED TO THE BANK ACCOUNT IS INDEED THE ASSETS OF THE ASSESSEE. FROM THE RECORDS, IT IS GATHERED THAT THE SUBSTANTIVE ADDITION HAS TO BE MADE IN THE CASE OF ROCKLAND GROUP FOR WHICH THE ASSESSEE HAS P ROVIDED THE 6 ITA NOS.1138, 1139 & 1141/DEL/2016 ENTRIES AS PER THE INFORMATION AVAILABLE IN THE ASS ESSMENT ORDER. HENCE, WE DECLINE TO INTERFERE WITH THE ORDER OF TH E LD. CIT (A) AS THE PROTECTIVE ADDITION IS LIABLE TO BE DELETED. 9. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20/12/20 19. SD/- SD/- (BHAVNESH SAINI) (DR.B.R.R KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20/12/2019 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSISTANT REGISTRAR