DCIT, New Delhi V. Sh. Himanshu Verma, Delhi

ITA 1753/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1148 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 27-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Document seized; Principle of natural justice; Source of fund; Corroborative evidences; Accommodation entries; Assessment record; Documents seized; Set aside
• Section: 250; 68; 37; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1627 TO 1629/DEL/2015 ASSESSMENT YEARS: 2010-11 TO 2012-13 HIMANSHU VERMA, FLAT NO. H-104, FRIENDS CGHS LTD., PLOT NO. 49, I.P. EXTENSION, PATPARGANJ, DELHI 110 092 (PAN: AFBPV8131K) VS. DCIT, CENTRAL CIRCLE - 20, (ERSTWHILE CC-16) 3 RD FLOOR, ROOM NO. 360, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI (APPELLANT) (RESPONDENT) AND ITA NO. 1752 TO 1754/DEL/2015 ASSESSMENT YEARS: 2010-11 TO 2012-13 DCIT, CENTRAL CIRCLE - 20, (ERSTWHILE CC-16) 3 RD FLOOR, ROOM NO. 360, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. HIMANSHU VERMA, FLAT NO. H-104, FRIENDS CGHS LTD., PLOT NO. 49, I.P. EXTENSION, PATPARGANJ, DELHI 110 092 (PAN: AFBPV8131K) (APPELLANT) (RESPONDENT) ORDER PER H.S. SIHU, JM THESE CROSS APPEALS ARE FILED BY THE ASSESSEE AND R EVENUE AGAINST THE RESPECTIVE ORDERS PASSED BY THE LD. CIT(A)-XXVII, N EW DELHI RELATING TO ASSESSMENT YEARS 2010-11 TO 2012-13. SINCE THE ISS UES INVOLVED IN THESE DEPARTMENT BY MS. PUJA JINDAL, CIT(DR) ASSESSEE BY SH. VIVEK BANSAL, ADV OCATE 2 APPEALS ARE COMMON AND IDENTICAL, HENCE, THE APPEAL S WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE, BY FIRST DEALING WITH THE FACTS OF REVENUES ITA NO. 1752/DE L/2015 (AY 2010-11) AND THE DECISION THEREOF WILL APPLY MUTATIS MUTANDIS IN OTHER REVENUE APPEALS I.E. IN ITA NO. 1753 & 1754/DEL/2015 (AY 2011-12 & 2012-13) BEING IDENTICAL FACTS AND CIRCUMSTANCES. HOWEVER, GROUNDS OF ALL THE RE VENUE APPEALS AND ASSESSEE APPEALS ARE REPRODUCED HEREUNDER:- ITA NO. 1627/DEL/2015 (AY 2010-11) (ASSESSEES APPE AL) 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ES TIMATING THE COMMISSION INCOME OF THE APPELLANT @0.80% OF THE A MOUNT OF RS. 83,71,29,511/- AMOUNTING TO RS. 66,97,036/-. 2. THE APPELLANT CRAVES FOR LIBERTY TO ADD FRESH GRO UND(S) OF APPEAL AND ALSO TO AMEND, ALTER, MODIFY ANY OF THE GROUNDS OF APPEAL. ITA NO. 1628/DEL/2015 (AY 2011-12) (ASSESSEES APPE AL) 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ES TIMATING THE COMMISSION INCOME OF THE APPELLANT @0.80% OF THE A MOUNT OF RS. 213,01,14,122/- AMOUNTING TO RS. 1,70,40,912/-. 2. THE APPELLANT CRAVES FOR LIBERTY TO ADD FRESH GRO UND(S) OF APPEAL AND ALSO TO AMEND, ALTER, MODIFY ANY OF THE GROUNDS OF APPEAL. ITA NO. 1629/DEL/2015 (AY 2012-13) (ASSESSEES APPE AL) 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ES TIMATING THE COMMISSION INCOME OF THE APPELLANT @0.80% OF THE A MOUNT OF RS. 632,73,87,632/- AMOUNTING TO RS. 9,49,10,815/-. 2. THE LD. CIT(A) HAS ERRED ON FACTS IN LAW IN CONFIRM ING ADDITION OF RS. 3,16,45,606/- OUT OF THE SEIZED CASH / PAY ORDE RS AND HAS FURTHER ERRED IN NOT SETTING OFF THIS INCOME ASSESS ED ON THE BASIS OF SEIZED ASSETS AGAINST THE ESTIMATED COMMISSION INCO ME OF RS. 9,49,10,815/-. 3. THE APPELLANT CRAVES FOR LIBERTY TO ADD FRESH GRO UND(S) OF APPEAL AND ALSO TO AMEND, ALTER, MODIFY ANY OF THE GROUNDS OF APPEAL. ITA NO. 1752/DEL/2015 (AY 2010-11) (REVENUES APPEA L) 3 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN DELETING THE ADDITION OF RS. 83,71,29,511/- OUT OF TOTAL ADD ITION OF RS. 213,01,14,122/- ON ACCOUNT OF UNEXPLAINED CREDITS A ND ENTRIES WITHOUT EXAMINING AND ADJUDICATING UPON ON MERITS O F THE CASES. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN ALLOWING RELIEF TO THE ASSESSEE AMOUNTING TO RS. 83,71,29,51 1/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS OF EXPLAINING THE CASH CREDITS FOUND RECOR DED IN HIS BOOKS / BANKS ACCOUNTS. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN DELETING THE ADDITION OF RS. 35,29,485/- OUT OF TOTAL ADDITI ON OF RS. 1,02,26,521/- ON ACCOUNT OF COMMISSION INCOME @1.5% WITHOUT EXAMINING AND ADJUDICATING UPON ON MERITS OF THE CA SES. 4. A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TEN ABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. ITA NO. 1753/DEL/2015 (AY 2010-11) (REVENUES APPEA L) 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN DELETING THE ADDITION OF RS. 195,01,14,122/- OUT OF TOTAL A DDITION OF RS. 213,01,14,122/- ON ACCOUNT OF UNEXPLAINED CREDITS A ND ENTRIES WITHOUT EXAMINING AND ADJUDICATING UPON ON MERITS O F THE CASES. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN ALLOWING RELIEF TO THE ASSESSEE AMOUNTING TO RS. 195,01,14,1 22/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS OF EXPLAINING THE CASH CREDITS FOUND RECOR DED IN HIS BOOKS / BANKS ACCOUNTS. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN DELETING THE ADDITION OF RS. 1,49,10,798/- OUT OF TOTAL ADDI TION OF RS. 3,19,51,711/- ON ACCOUNT OF COMMISSION INCOME @1.5% WITHOUT EXAMINING AND ADJUDICATING UPON ON MERITS OF THE CA SES. 4. A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TEN ABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. ITA NO. 1754/DEL/2015 (AY 2010-11) (REVENUES APPEA L) 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN DELETING THE ADDITION OF RS. 599,94,54,170/- OUT OF TOTAL A DDITION OF RS. 632,73,87,632/- ON ACCOUNT OF UNEXPLAINED CREDITS A ND ENTRIES WITHOUT EXAMINING AND ADJUDICATING UPON ON MERITS O F THE CASES. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN ALLOWING RELIEF TO THE ASSESSEE AMOUNTING TO RS. 5,99,94,54, 170/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO 4 DISCHARGE HIS ONUS OF EXPLAINING THE CASH CREDITS F OUND RECORDED IN HIS BOOKS / BANKS ACCOUNTS. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN DELETING THE ADDITION OF RS. 25,95,11,221/- OUT OF TOTAL ADD ITION OF RS. 29,11,56,727/- UNEXPLAINED DEPOSITS IN BANK ENTRIES AND CASH FOUND WITHOUT EXAMINING AND ADJUDICATING UPON MERIT S OF THE CASES. 4. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AS WEL L IN DELETING THE ADDITION OF RS. 4,42,91,715/- OUT OF TOTAL ADDI TION OF RS. 9,49,10,815/- ON ACCOUNT OF COMMISSION INCOME @1.5% WITHOUT EXAMINING AND ADJUDICATING UPON ON MERITS OF THE CA SES. 5. A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TEN ABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH OP ERATION U/S. 132 OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 29- 03-2012. FROM THE DOCUMENTS FOUND AND SEIZED, AO NO TICED THAT THE ASSESSEE WAS INVOLVED IN PROVIDING BOGUS ENTRIES. ACCORDING TO T HE AO, IT WAS ADMITTED BY THE ASSESSEE IN THE STATEMENTS RECORDED ON OATH DURING THE COURSE OF SEARCH ON 29-03- 2012 AND POST SEARCH ON 14-04-2012 THAT HE IS ENGAG ED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES. THE ASSESSEE IN THE STATEMEN TS RECORDED ON 29-03-2012 HAS ADMITTED THAT HE HAS RECEIVED BROKERAGE/COMMISSION. DURING THE COURSE OF SEARCH A LAPTOP WAS ALSO SEIZED. IT WAS NOTICED BY THE AO T HAT THE ASSESSEE WAS CARRYING ON THE ACTIVITY OF PROVIDING BOGUS ENTRIES THROUGH VAR IOUS ENTITIES WHICH WERE ADMITTED TO BE CONTROLLED AND MANAGED BY THE ASSESSEE. AT PAGES 5 TO 10 OF THE ASSESSMENT ORDER, THE AO HAS LISTED SUCH 88 ENTITIES THEIR PAN NOS AND ADDRESSES ARE ALSO GIVEN. THE AO HAS ALSO RE-PRODUCED THE DETAILS OF 203 BANK ACCOUNTS OF SUCH ENTITIES AT PAGES 10 TO 17 OF THE ASSESSMENT ORDER. 2.1 THE ADMISSION ON THE PART OF THE ASSESSEE THAT HE IS ENGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES AND THAT SEVERAL EN TITIES ARE BEING CONTROLLED AND MANAGED BY HIM, AS RECORDED IN THE STATEMENT MADE O N 29-03-2012, IS THROUGH 5 QUESTIONS NO. 8 AND 14 WHICH HAVE BEEN REPRODUCED A T PAGES 18 TO 20 OF THE ASSESSMENT ORDER. THE AO HAS ALSO REPRODUCED THE TE LE-SCREEN-SHOTS OF THE LIST OF THESE ENTITIES ON PAGES 21 TO 30 OF THE ASSESSMENT ORDER. THE AO HAS ALSO TAKEN NOTE OF THE SIGNED AND UNSIGNED CHEQUES AT PAGES 31 TO 4 5 OF THE ASSESSMENT ORDER AND ALSO THE BANK STATEMENTS OF THESE ENTITIES AT PAGES 45 TO 51 OF THE ASSESSMENT ORDER. THE AO HAS ALSO REFERRED TO THE STATEMENTS OF 15 PE RSONS RECORDED IN PURSUANCE OF COMMISSION ISSUED TO THEM U/S 131(A) AND AFTER REFE RRING TO ALL THESE DOCUMENTS, THE AO HAS CULLED OUT FOLLOWING CONCLUSIONS:- I) BOOKS OF ACCOUNTS OF VARIOUS COMPANIES WAS FOUND IN TALLY PROGRAM IN THE LAPTOP OF SHRI HIMANSHU VERMA, LYING IN THIS PREMIS E; II) SIGNED/UNSIGNED/BLANK CHEQUES OF DIFFERENT COMPANIE S MANAGED AND CONTROLLED BY SHRI HIMANSHU VERMA WERE FOUND FROM THIS PREMISE (LIST OF SUCH CHEQUES IS FURNISHED IN PAGE NO. 80 TO 96 OF THIS REPORT); III) DOCUMENTS MENTIONING RECEIPT OF CASH FROM VARIOUS P ERSONS AND ARRANGEMENT OF ROUTING THE SAME THROUGH VARIOUS GROUP ENTITIES OF SHRI HIMANSHU VERMA WERE FOUND AND SEIZED FROM THIS PREMISE, AS DISCUSS ED IN SUBSEQUENT PARA, IV) LAPTOP OF SHRI VERMA FOUND FROM THIS PREMISE ALSO C ONTAINED ID AND OTHER DETAILS OF VARIOUS DUMMY DIRECTORS/PARTNERS/PROPRIE TORS. V) DETAILS OF BANK ACCOUNTS MAINTAINED BY VARIOUS ENTI TIES OF SHRI VERMA WERE FOUND MENTIONED IN A DIARY, AS DISCUSSED IN SUBSEQU ENT PARA, VI) HIMANSHU VERMA HIMSELF USED TO SIGN FOR THE BENAMI/ DUMMY DIRECTORS/PARTNERS/PROPRIETORS ON CHEQUES ETC . 2.2 THEREAFTER, THE AO HAS REFERRED TO THE DETAILS OF SEIZED DOCUMENTS AND ALSO THE SEIZURE OF A SUM OF RS. 28,59,79,727/- AND ALSO CAS H FOUND OF A SUM OF RS. 51,77,000/- AND IN THIS MANNER THE AO DETERMINED TH E TOTAL OF ACCOMMODATION ENTRIES PROVIDED BY THE ASSESSEE IN THESE THREE FIN ANCIAL YEARS AS FOLLOW;- FINANCIAL YEAR 2009 - 10 2010 - 11 2011 - 12 RS. 68.17 CRORE RS. 213 CRORE RS. 632.47 CRORE 6 2.3 THE AO FURTHER NOTICED THAT THERE WERE CASH DEP OSITS IN THE BANK ACCOUNTS AGGREGATING TO RS. 235,96,03,074/-. THE FINANCIAL Y EAR WISE BIFURCATION IS AS UNDER:- FINANCIAL YEAR 2009 - 10 2010 - 11 2011 - 12 RS. 83,71,29,511 RS. 85,38,93,689 RS. 66,85,79,874 TOTAL RS. 235,96,03,074/ - 2.4 THE AO HAS ALSO RECORDED THE STATEMENT OF THE ASSESSEE WHICH HAS ALSO BEEN RE- PRODUCED IN THE ASSESSMENT ORDER AT PAGES 65 TO 74 AND LIST OF THE COMPANIES IS GIVEN IN THE STATEMENT AT PAGES 75 TO 76 AND LIST OF PART NERSHIP FIRMS AT PAGES 77 TO 79. THE AO ALSO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE SE EKING EXPLANATION AS TO WHY THE CASH MENTIONED ABOVE SHOULD NOT BE ADDED TO THE INC OME OF THE ASSESSEE U/S 68 OF THE ACT. THE ASSESSEE FURNISHED REPLY DATED 28-03-2 014 WHICH IS ALSO RE-PRODUCED IN THE ASSESSMENT ORDER AT PAGES 90 TO 97. THE ASSESSE E CLAIMED EXPENSES INCURRED BY HIM FOR FORMATION OF COMPANIES, LEGAL FILING DOCUME NTS, AUDIT CHARGES, BANK CHARGES TOTALING TO RS. 43,30,402/- IN RESPECT OF 68 COMPA NIES INCORPORATED BY HIM. THE AO AFTER REJECTING THE SUBMISSION OF THE ASSESSEE, HAS MADE THE ADDITION IN A.Y. 2010-11 AT A SUM OF RS. 83,71,29,511/- ON ACCOUNT OF UNEXPL AINED CREDITS AND COMMISSION INCOME OF RS. 1,02,26,521/- @1.5% OF THE CASH ELEM ENT OF RS. 68,17,68,100/- AND THUS, THE INCOME OF THE ASSESSEE HAS BEEN ASSESSED AT A SUM OF RS. 847,33,56,030/-. IN A.Y. 2011-12 SIMILAR ADDITIONS HAVE BEEN MADE B Y THE AO AT A SUM OF RS. 198,20,65,830/-(ACCOMMODATION ENTRIES OF RS. 213,01 ,14,122/- PLUS COMMISSION OF RS. 3,19,51,711/- (-) AMOUNT OWNED UP BY THE PERSON S TO WHOM THESE ENTRIES WERE PROVIDED OF A SUM OF RS. 18,00,00,000/-) AND IN A.Y . 2012-13 INCOME HAS BEEN ASSESSED AT RS. 599,94,55,170/- I.E. (RS. 632,73,87 ,632/- ON ACCOUNT OF UNEXPLAINED CREDITS AND ENTRIES PLUS UNEXPLAINED DEPOSITS IN BA NK ACCOUNT RS.29,11,56,727/- PLUS COMMISSION INCOME RS.9,49,10,815/- MINUS AMOUNT OWN ED UP RS. 71,40,00,000/-) THUS TOTAL ADDITIONS AGGREGATING TO RS. 599,94,55, 174/-. AGAINST THE AFORESAID ADDITIONS, THE ASSESSEE APPEALED BEFORE THE LD. CIT (A) IN RESPECT OF ALL THE THREE 7 YEARS, WHO VIDE HIS RESPECTIVE IMPUGNED ORDERS HAS DELETED THE ADDITIONS IN RESPECT OF ACCOMMODATION ENTRIES PROVIDED BY THE ASSESSEE A ND ALSO PARTLY DELETED THE COMMISSION WHICH WAS DETERMINED BY THE AO @1.5% AND WHICH HAS BEEN REDUCED TO 0.80% IN RESPECT OF ASSESSMENT YEARS 2010-11 & 2011-12. HOWEVER, IN RESPECT OF A.Y. 2012-13 WITH RESPECT TO ADDITION OF RS. 29,11, 56,727/-, LD. CIT(A) HAS GIVEN A RELIEF OF 25,95,11,221/- AND ADDITION OF RS.3,16,45 ,506/- HAS BEEN SUSTAINED AND AO WAS DIRECTED TO RE-COMPUTE THE COMMISSION INCOME OF THE ASSESSEE AT RS. 5,06,19,100/- AS AGAINST RS. 9,49,10,815/-. IT IS GERMANE TO MENTION HERE THAT LD. CIT(A) WHILE DECIDING THE APPEAL OF THE ASSESSEE FO R THE ASSESSMENT YEAR 2010-11, HAS TAKEN IN TO CONSIDERATION THE SUBMISSION OF THE ASSESSEE REGARDING NON-PROVIDING SUFFICIENT OPPORTUNITY BY THE AO AND THIS ISSUE HAS BEEN DECIDED BY LD. CIT(A) HAS PER OBSERVATION IN PARA 7 AS FOLLOW:- 7. I HAVE GONE THROUGH THE ASSESSMENT ORDER CAREFULLY AND ALSO THE WRITTEN SUBMISSIONS AND CASE LAWS RELIED UPON BY TH E APPELLANT AND CONSIDERED THEM. I HAVE ALSO CALLED FOR THE ASSESSM ENT RECORD AND PERUSED IT WHEREVER NECESSARY. ON PERUSAL OF THE ASSESSMENT ORDER IT IS SEEN THAT THERE WAS SUFFICIENT CORRESPONDENCE PERTAINING TO T HE QUERIES RAISED BY THE ASSESSING OFFICER AND REPLIES FURNISHED BY THE APPE LLANT. HOWEVER, I FIND THAT IN THE ENTIRE ASSESSMENT ORDER THE ASSESSING O FFICER RELIED ON THE MATERIAL FOUND AND SEIZED AND ALSO ON THE STATEMENT S OF THE APPELLANT AND STATEMENTS OF THE DUMMY DIRECTORS AND PROPRIETORS A ND MADE OUT A CASE THAT THE APPELLANT IS AN ACCOMMODATION ENTRY OPERAT OR. THIS FACT HAS ALSO BEEN ADMITTED BY THE APPELLANT HIMSELF THAT HE PROV IDED ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES THROUGH THE ENTITI ES CONTROLLED AND MANAGED BY HIM. THEREFORE, THE FACT THAT THE APPELL ANT IS AN ACCOMMODATION ENTRY OPERATOR IS NOT IN DISPUTE. THE APPELLANT ALSO DID NOT DISPUTE THIS CONCLUSION OF THE ASSESSING OFFICER AS MOST OF THE STATEMENTS OF THE APPELLANT WHICH WERE QUOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER UNAMBIGUOUSLY INDICATE THAT THE AP PELLANT WAS AN ACCOMMODATION ENTRY PROVIDER. THE APPELLANT ALSO DI D NOT FURNISH ANY 8 EVIDENCE CONTRARY TO THIS UNDERSTANDING AND CONCLUS ION DURING THE APPEAL PROCEEDINGS. I THEREFORE, HAVE NO HESITATION IN HOL DING THE APPELLANT TO BE AN ACCOMMODATION ENTRY OPERATOR. HOWEVER, IN THE LA TER PART OF THE ASSESSMENT ORDER, WITHOUT GIVING ANY REASONS OR WIT HOUT AFFORDING AN OPPORTUNITY TO THE APPELLANT TO PUT FORTH HIS CASE THE ASSESSING OFFICER MADE AN ADDITION TO THE INCOME OF THE APPELLANT AS UNEXPLAINED CREDITS AND ENTRIES WITHOUT QUOTING ANY SPECIFIC PROVISION OF LAW UNDER WHICH SUCH ADDITION WAS MADE. THE ASSESSING OFFICER ALSO DID N OT ISSUE ANY SHOW CAUSE NOTICE ENUMERATING THE REASONS WITH CORROBORA TIVE AND SUPPORTING EVIDENCE IN HIS POSSESSION AS TO WHY HE PROPOSED TO MAKE AN ADDITION OF RS.84 73,56,032/-. NATURAL JUSTICE IS A TECHNICAL T ERMINOLOGY FOR RULE AGAINST BIAS AND THE RIGHT TO A FAIR HEARING, AND A 'DUTY TO ACT FAIRLY'. THE PRINCIPLES OF NATURAL JUSTICE CONCERN PROCEDURAL FA IRNESS AND ENSURE A FAIR DECISION IS REACHED BY AN OBJECTIVE DECISION MAKER REFERENCE IS MADE THE THREE COMMON LAW RULES IN RELATION TO NATURAL JUSTI CE OR PROCEDURAL FAIRNESS WHICH ARE A) THE HEARING RULE B) THE BIAS RULE C) T HE EVIDENCE RULE. THE THIRD RULE IS THAT AN ADMINISTRATIVE DECISION MUST BE BASED UPON LOGICAL PROD OR EVIDENCE MATERIAL. THE ASSESSING OFFICER AS AN INVESTIGATOR AND DECISION MAKER DID NOT BASE THIS ADDITION OF RS.84, 73,56,032/- CLEARLY POINTING OUT TO THE EVIDENCE ON WHICH THE INFERENCE OR DETERMINATION IS BASED. IN THE WRITTEN SUBMISSIONS, THE APPELLANT RE LIED ON VARIOUS JUDICIAL PRONOUNCEMENTS IN SUPPORT OF THIS GROUND THAT THE A PPELLANT WAS NOT GIVEN A FAIR AND JUST OPPORTUNITY. THE OPPORTUNITY OF BEI NG HEARD PROVIDED BY THE ASSESSING OFFICER WAS INCONSISTENT AS IN THE LATER PART OF THE ASSESSMENT ORDER, I FIND THAT THE ASSESSING OFFICER CONCLUDED THE ASSESSMENT TOTALLY TAKING A DIFFERENT VIEW CONTRARY TO THE ADMISSION A ND MATERIAL ON RECORD. NO CORROBORATIVE OR SUPPORTING EVIDENCE IS BROUGHT ON RECORD BY THE ASSESSING OFFICER INDICATING THAT THE DEPOSITS MADE IN THE INTERMEDIARY COMPANIES, MANAGED AND CONTROLLED BY THE APPELLANT AND WHICH WERE PROVIDED TO THE BENEFICIARIES ACTUALLY BELONGED TO THE APPELLANT ONLY FOR TREATING THE SAME AS INCOME OF THE APPELLANT. THE A PPELLANT WAS COOPERATIVE AND PROVIDED ALL THE INFORMATION PERTAI NING TO HIS BUSINESS OPERATION, PAPER ENTITIES, DETAILS OF THE BENEFICIA RIES, COMMISSION RECEIVED ETC. HOWEVER, HAVING ACCEPTED THAT THE APPELLANT IS AN ENTRY OPERATOR, THE ASSESSING OFFICER WAS UNREASONABLE AND UNJUSTIFIED TO MAKE AN ADDITION OF 9 RS.84,73,56,032/- AS INCOME OF THE APPELLANT. THERE FORE, THERE IS MERIT IN THE GROUND RAISED BY THE APPELLANT FOR NOT PROVIDIN G SUFFICIENT OPPORTUNITY TO EXPLAIN HIS VERSION TO IMPEACH OR NEGATE THE OPI NION/VIEW HARNESSED BY THE ASSESSING OFFICER. 2.5 WHILE DELETING THE ADDITION IN RESPECT OF ACCOM MODATION ENTRIES THE OBSERVATION OF CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE A SSESSEE ARE REPRODUCED AS UNDER:- 10. I HAVE GONE THROUGH THE ASSESSMENT ORDER CAR EFULLY, WRITTEN SUBMISSIONS OF THE APPELLANT AND CITATIONS OF THE C ASE LAWS RELIED UPON BY THE ASSESSING OFFICER IN SUPPORT OF THE ADDITION MA DE, AND BY THE APPELLANT IN SUPPORT OF HIS CONTENTIONS, AS WELL, A ND CONSIDERED THEM. THESE GROUNDS OF APPEAL ARE A MIX OF ARGUMENTS AND GROUNDS LEADING TO THE MAIN GROUND OR GRIEVANCE THAT THE APPELLANT SHO ULD NOT OR CANNOT BE HELD TO BE ASSESSABLE TO THE ENTIRE ESTIMATED TURNO VER OF RS.84,73,56,032/- OF THE ENTRY BUSINESS. ON PERUSAL OF THE ASSESSMENT ORDER AND MATERIAL ON RECORD, I AGREE WITH THE APPE LLANT'S CONTENTION IN THIS ASPECT FOR THE FOLLOWING REASONS MENTIONED IN THE PARA BELOW: 10.1 ON THE BASIS OF THE MATERIAL FOUND AND SEIZED, DETAILS PROVIDED AND ENQUIRIES MADE DURING THE POST SEARCH AND ASSES SMENT PROCEEDINGS, THE ASSESSING OFFICER CONCLUDED THAT T HE APPELLANT WAS DOING THE BUSINESS OF PROVIDING BOGUS ACCOMMODATION ENTRIES IN THE SHAPE OF SHARE APPLICATION MONEY, LOANS, CAPITA L GAIN AND THAT HE WAS MANAGING AND CONTROLLING A NUMBER OF COMPANI ES/FIRMS/SOLE PROPRIETORSHIP CONCERNS AND A NUMBER OF BANK ACCOUN TS IN THE NAME OF THESE ENTITIES IN DIFFERENT BANKS. THE ASSE SSING OFFICER IN THE ASSESSMENT ORDER HAD DETAILED THE MODUS OPERAND I OF THE APPELLANT ADOPTED FOR PROVIDING ACCOMMODATION ENTRI ES AND HELD HIM TO BE AN ACCOMMODATION ENTRY OPERATOR. IN SUPPO RT OF THIS FACT, THE ASSESSING OFFICER INCORPORATED THE RELEVANT POR TION OF THE STATEMENT RECORDED OF THE APPELLANT IN THE COURSE O F THE SEARCH PROCEEDINGS, POST SEARCH PROCEEDINGS AND ALSO DURIN G THE ASSESSMENT PROCEEDINGS. BASED ON THE FACTS, THE ASS ESSING OFFICER MADE THE FOLLOWING OBSERVATIONS IN THE ASSESSMENT O RDER: 10 A) IT WAS ALSO STATED BY THE ASSESSING OFFICER THAT TH E APPELLANT RECEIVED A BROKERAGE/COMMISSION FROM THE BENEFICIARIES FROM 1 TO 1.50% FOR PROVIDING SUCH ACCOMMODATION ENTRIES. B) DURING THE SEARCH OPERATION ON 29.3.2012, THE LAPTO P OF THE APPELLANT WAS SEIZED AND MARKED AS ANNEXURE A-37. A CLONE COPY OF THE HARD DISK WAS MADE AND ON VERIF ICATION OF THE SAME, IT REVEALED THAT THE APPELLANT RECEIVE D A BROKERAGE/COMMISSION AT 1 TO 1.50%. C) THE ASSESSING OFFICER INCORPORATED THE LIST OF ALL SUCH ENTITIES WHICH WERE ACCEPTED AS CONTROLLED AND MANA GED BY THE APPELLANT AT PAGE NOS. 5,6,7,8,9 AND 10 OF T HE ASSESSMENT ORDER. D) THE ASSESSING OFFICER ALSO INCORPORATED A TABLE CONTAINING 203 BANK ACCOUNTS WITH THE DETAILS OF TH E BANK ACCOUNT, BANK BRANCH AND THE NAME OF THE ENTITY HOL DING THOSE BANK ACCOUNTS WHICH WERE UTILIZED FOR PROVIDI NG ACCOMMODATION ENTRIES. E) IN THE ASSESSMENT ORDER THE ASSESSING OFFICER ALSO ELABORATED IN DETAIL THE MANAGEMENT AND CONTROL EXE RCISED BY THE APPELLANT AND HIS PARTNER IN THE NAME OF DIR ECTORS, PARTNERS, AND SOLE PROPRIETORS. IN SUPPORT OF THE S AME, A NUMBER OF CHEQUE BOOKS CONTAINING BLANK AND SIGNED AND UNSIGNED CHEQUES OF VARIOUS ENTITIES, COPIES OF BAN K STATEMENT OF VARIOUS BANKS, DETAILS OF BANK TRANSAC TIONS RELATED TO DIFFERENT ENTITIES WERE FOUND AND SEIZED AND INCORPORATED SUCH INFORMATION IN THE ASSESSMENT ORD ER. F) THE ASSESSING OFFICER LISTED THE NAMES OF 15 PERSON S WHO WERE DUMMY DIRECTORS, PARTNERS, PROPRIETORS OF VARIOUS ENTITIES MANAGED AND CONTROLLED BY THE APPE LLANT. THE STATEMENTS OF 15 PERSONS WAS ALSO RECORDED U/S 131(1A) OF THE I T ACT. TO DRIVE HOME A POINT, THE 11 ASSESSING OFFICER ALSO INCORPORATED THE RELEVANT PO RTION OF THE STATEMENT RECORDED OF ONE OF THE PERSONS MENTIO NED HERE. IT WAS ACCEPTED BY ALL OF THEM THAT DOCUMENTS WERE ENDORSED AT THE INSTANCE OF THE APPELLANT FOR WHICH THEY WERE PAID A SMALL AMOUNT. G) THE ASSESSING OFFICER ALSO RELIED ON SOME IMPORTANT DOCUMENTS FOUND AND SEIZED FROM THE APPELLANT'S PRE MISES LIKE ANNEXURE A-27 WHICH A 2011 DIARY, ANNEXURE A-3 0, A DIARY TITLED 'CELEBRATE PURPLE', ANNEXURE A-32, A D IARY DEPICTING THE DETAILS OF THE BANK ACCOUNT OF VARIOU S ENTITIES MANAGED BY THE APPELLANT IN AXIS BANK, DCB BANK ETC . H) SURRENDER OF RS. 18 CRORES MADE BY 7 BENEFICIARIES IN CHANDIGARH, OUT OF THE TOTAL TURNOVER OF RS.213,01,14,122/- AND ACCEPTED BY THEASSESSING OFF ICER WHILE COMPUTING THE INCOME OF THE APPELLANT FOR THE YEAR 2011-12. 10.1.1 FROM THE ABOVE IT IS EVIDENT THAT ON THE BAS IS OF THE SEIZED MATERIAL AND DETAILS PROVIDED BY THE APPELLANT, THE ASSESSING OFFICER CONCLUDED THE APPELLANT TO BE AN 'ACCOMMODATION ENT RY OPERATOR'. THE APPELLANT ALSO DID NOT FURNISH ANY MATERIAL CONTRAR Y TO THE ABOVE, EITHER IN THE ASSESSMENT PROCEEDINGS OR DURING THE APPEAL PROCEEDINGS TO IMPEACH THE FINDING GIVEN BY THE ASSESSING OFFICER. WHEN THERE IS NO DISPUTE FROM THE ASSESSING OFFICER OR FROM THE APPE LLANT THAT THE APPELLANT IS INVOLVED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES TO BENEFICIARIES, THE VOLUME OR TURNOVER OF SUCH EN TITIES CANNOT BE HELD TO BE THE INCOME OF THE OPERATOR. AS A NECESSARY COROL LARY TO IT, THE SOURCE OF CASH DEPOSITED IN VARIOUS BANK ACCOUNTS HAS TO B E FROM THE BENEFICIARIES. 10.1.2 IN THE ASSESSMENT ORDER, THE ASSESSING OFFIC ER REPEATEDLY STATED THAT THE MONEY ACTUALLY BELONGED TO THE BENEFICIARI ES. ON THE CONTRARY, THE ASSESSING OFFICER IN THE ENTIRE ASSESSMENT ORDE R NEVER SAID OR EVEN 12 INTENDED TO SAY THAT THE AMOUNT OF RS.83,71,29,511/ - ACTUALLY BELONGED TO THE APPELLANT NOR THERE WAS ANY EVIDENCE TO THIS EFFECT WITH HIM. 10.1.3 ON PERUSAL OF THE ASSESSMENT ORDER, I ALSO F IND THAT THE ASSESSING OFFICER GAVE REFERENCE TO THE AMOUNT OF RS. 18 CROR ES AND RS. 71.40 CRORES SURRENDERED BY THE SEVEN BENEFICIARIES DURIN G THE ASSESSMENT YEARS 2011-12 AND 2012-13, WHERE IN SUCH AMOUNTS WE RE REDUCED FROM THE TOTAL ENTRIES IN THEIR FINAL COMPUTATION, MEANI NG THEREBY THAT HE ACCEPTED THAT SUCH CREDITS/DEPOSITS IN HIS INTERMED IARIES/CONDUITS PER BELONGED TO THE BENEFICIARIES. ON THE BASIS OF THE SAME, LOGICAL ANALOGY AND PRINCIPLES APPLIED THE APPELLANT IS NOT ASSESSA BLE TO THE SUM OF RS. 83,71,29,511/-. 10.1.4 THERE IS NO PROVISION IN THE INCOME TAX ACT WHERE THE TURNOVER CAN BE CONSIDERED AS THE INCOME OF THE APPELLANT. T HE ASSESSING OFFICER'S EFFORT TO TAX IT U/S 68 IS DEVOID OF ANY MERIT AS T HE SUM OF RS.83,71,29,511/- IS NOT A CASH CREDIT IN THE BOOKS OF ACCOUNT OF THE APPELLANT OR THE BOOKS OF THE ENTITIES CONTROLLED O R MANAGED BY THE APPELLANT AS PER THE OBSERVATION OF THE ASSESSING O FFICER HIMSELF. 10.1.5 THE PROVISION RELATING TO CASH CREDIT WAS PR OVIDED FOR THE FIRST TIME IN THE I T ACT, 1961 AS THERE WAS NO CORRESPON DING PROVISION IN THE I T ACT, 1922. FOR THE PURPOSE OF BETTER COMPREHENSIO N, THE SECTION MAY BE DIVIDED INTO THE FOLLOWING PARTS: 'I) WHERE ANY SUM IS CREDITED IN THE BOOKS OF ACCOUNT OF THE APPELLANT/ASSESSEE II) MAINTAINED FOR ANY PREVIOUS YEAR III) ASSESSEE OFFERS NO EXPLANATION ABOUT A) THE SOURCE AND B) THE NATURE IV) THE EXPLANATION OFFERED BY HIM IS NOT IN THE OP INION OF THE ASSESSING OFFICER SATISFACTORY 13 V) THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX VI) AS THE INCOME OF THE ASSESSEE OF THAT YEAR, IN RELATION TO WHICH IS SO FOUND TO HAVE CREDITED.' THE CATCH WORDS IN THIS SECTION ARE 'ANY SUM FOUND CREDITED' AND 'IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE'. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER STATED THAT THE APPELLANT DID NOT PRODUCE THE CASH BOOK TO EXPLAIN THE SOURCE AND AVAILABILITY OF CASH DEPOSITED ON VARIOUS DATES IN THE BANK. THE ASSESSING OFFICER AL SO OBSERVED THAT THE ONUS IN ON THE APPELLANT TO PROVE SATISFACTORIL Y THE SOURCE AND NATURE OF THE CASH RECEIVED WHICH THE APPELLANT DID NOT DISCHARGE, IN PROVING THE CASH DEPOSITS IN ITS BANK ACCOUNT. 10.1.6 FROM THE ABOVE OBSERVATION AND DISCUSSION OF THE ASSESSING OFFICER TWO ASPECTS ARE EVIDENT REGARDING THE FACTS OF THE CASE. ONE, THAT CASH BOOK IS A PART OF THE BOOKS OF ACCOUNTS M AINTAINED BY THE APPELLANT WHICH WAS NOT PRODUCED BY THE APPELLANT. THEREFORE, THE ASSESSING OFFICER DID NOT GET A CHANCE FIND ANY SUM CREDITED IN THE BOOKS OF ACCOUNT OF THE APPELLANT AND IT WAS A PROB ABILITY OR A SURMISE. SECONDLY, THE APPELLANT DID NOT PROVE SATI SFACTORILY THE SOURCE AND NATURE OF CASH RECEIVED AND DEPOSITED IN BANK ACCOUNT. NOW, IN THESE CIRCUMSTANCES WHAT IS TO BE SEEN IS W HETHER THE PROVISIONS OF SECTION 68 OF THE I.T. ACT, 1961 IS W HETHER APPLICABLE IN THE CASE OF THE APPELLANT WHO IS IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES TO BENEFICIARIES. 10.1.7 SECTION 34 OF EVIDENCE ACT, 1872 PROVIDES TH AT ENTRIES IN THE BOOKS OF ACCOUNT, REGULARLY KEPT IN COURSE OF BUSIN ESS ARE RELEVANT WHENEVER THEY REFER TO A MATTER INTO WHICH THE COUR T HAS TO ENQUIRE, BUT SUCH STATEMENTS SHALL NOT BE SUFFICIENT EVIDENC E TO CHARGE ANY PERSON WITH LIABILITY. THE ENTRIES TOTALING TO RS.8 3,71,29,511/- WAS FOUND ON THE BASIS OF THE SEIZED MATERIAL, DETAILS PROVIDED BY THE APPELLANT, BUT NOT FOUND RECORDED IN THE BOOKS OF A CCOUNTS OF THE APPELLANT. IN THE ASSESSMENT ORDER THE ASSESSING OF FICER CATEGORICALLY STATED THAT THE APPELLANT DID NOT MAINTAIN BOOKS OF ACCOUNTS OF SUCH 14 ENTITIES AND THEREFORE NO BILLS, VOUCHERS OR ANY OT HER DOCUMENTS RELATING TO SUCH ACCOUNTS WERE PRODUCED. AS PER SEC TION 2(12A) OF THE I T ACT, 1961 BOOKS INCLUDES LEDGERS, DAY BOOK, OR WRITTEN DATA, DISC TAPE, ELECTRONIC MAGNETITE DATA STORAGE DEVICE . IN THE INSTANT CASE, ON THE BASIS OF THE FACTS BROUGHT ON RECORD B Y THE ASSESSING OFFICER, THERE ARE NO BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT BUT SOME DIARIES WERE FOUND AND SEIZED WHERE INFORM ATION PERTAINING TO DIFFERENT BANK ACCOUNTS WAS MAINTAINED BY THE AP PELLANT FOR ROUTING FUNDS THROUGH VARIOUS ENTITIES CONTROLLED A ND MANAGED BY HIM. THEREFORE, THERE IS NO QUESTION OF RS.83,71,29 ,511/- FOUND CREDITED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT. 10.1.8 SECTION 68, WHEN IS APPLICABLE? SECTION 68 I S APPLICABLE WHEN THE APPELLANT'S EXPLANATION WITH RESPECT TO THE CAS H CREDIT IS REJECTED AS BEING UNSATISFACTORY AND ALSO WHERE THE APPELLAN T DOES NOT RENDER ANY EXPLANATION. THE ASSESSING OFFICER WHILE ACCEPT ING THE FACT THAT THE APPELLANT IS AN ENTRY OPERATOR IN THE ASSESSMEN T ORDER, SUDDENLY MADE A U-TURN TOWARDS THE END OF THE ASSESSMENT ORD ER WITHOUT CITING ANY REASON, OR WITHOUT GIVING ANY OPPORTUNIT Y OR QUOTING A SPECIFIC PROVISION OF LAW REJECTED THE CLAIM OF THE APPELLANT THAT CASH WAS RECEIVED FROM THE BENEFICIARY COMPANIES IN LIEU OF LOAN/CAPITAL GAIN MONEY ON THE GROUND THAT HE DID NOT DISCLOSE T HE NAME, ADDRESSES, PAN OF THE ALLEGED BENEFICIARIES. IT MAY NOT BE OUT OF PLACE TO MENTION THAT IN THE ASSESSMENT ORDER ITSEL F, THE ASSESSING OFFICER BASED ON THE PERUSAL OF SEIZED MATERIAL, DE TAILS PROVIDED AND BANK STATEMENTS, TABULATED A DETAILED ACCOUNT OF EN TIRE OPERATION GIVING THE NAMES OF COMPLETE INTERMEDIARIES UTILIZE D BY HIM FOR PROVIDING ACCOMMODATION ENTRIES, LIST OF THE BENEFI CIARIES TO WHOM HE PROVIDED SUCH ENTRIES, NAMES OF THESE BENEFICIARIES WHO SURRENDERED THE ENTRY AMOUNT SOUGHT FROM THE APPELLANT, NAMES O F THE ENTITIES OF THE APPELLANT'S GROUP FROM BENEFICIARIES SOUGHT ENT RIES ALONG WITH AMOUNT AND FINANCIAL YEAR ETC. WHEN THE ASSESSING O FFICER HIMSELF BROUGHT ON RECORD THE NAMES OF THE BENEFICIARIES WH O SOUGHT ENTRIES FROM THE ENTITIES CONTROLLED AND MANAGED BY THE APP ELLANT, THERE IS NO QUESTION OF TAXING THE APPELLANT REGARDING SUCH AMOUNTS TAKEN BY THE BENEFICIARIES AS UNEXPLAINED CASH CREDITS IN HI S HANDS. IT IS FAIR 15 AND THE ASSESSING OFFICER IS DUTY BOUND TO STATE OR BRING ON RECORD SOME MATERIAL CONTRARY AS TO HOW HE FORMED HIS OPIN ION THAT THE EXPLANATION OF THE APPELLANT WAS UNSATISFACTORY. WH ERE THE APPELLANT IS TAXED FOR SOMETHING THAT DOES NOT BELONG TO HIM, THE RESPONSIBILITY OF THE ASSESSING OFFICER ASSUMES MORE A CAUTIOUS SE RIOUSNESS AS HIS FINDINGS, FACTS, MATERIAL ON RECORD MUST BE SUCH TH AT IT SUPPORT THE CLAIM OF THE DEPARTMENT. THERE SHOULD BE NEXUS BETW EEN CONCLUSION OF FACTS ARRIVED BY HIM AND PRIMARY FACTS UPON WHIC H SUCH CONCLUSION IS BASED. IN THE INSTANT CASE, NO ADVERSE MATERIAL WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER TO STATE THAT THE T OTAL CREDITS TRANSFERRED FROM THE ENTITIES TO THE BENEFICIARIES ENUMERATED IN THE TABULAR FORM AND INCORPORATED IN THE ORDER DATED 31 .03.2014 BELONGED TO THE APPELLANT. THE APPELLANT DID NOT DE CLARE INCOME UNDER THE HEAD BUSINESS BUT HAD SHOWN INCOME FROM O THER SOURCES. IT IS ALSO ILLOGICAL TO MAKE AN ADDITION OF THE ENT IRE TURNOVER IN THE HANDS OF THE APPELLANT AS THE ASSESSING OFFICER HIM SELF ADMITTED IN THE ORDER ITSELF THAT RS.83,71,29,511/- WAS NOT A C ASH CREDIT FOUND RECORDED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT OR THE BOOKS OF THE ENTITIES CONTROLLED OR MANAGED BY THE APPELLANT BUT IT WAS THE TURNOVER. 10.1.9 THERE IS A DEFINITE CONTRADICTION IN THE ACT ION OF THE ASSESSING OFFICER. ON ONE HAND HE ADMITTED OR ACCEPTED THAT T HE APPELLANT IS AN ACCOMMODATION ENTRY OPERATOR AND CHARGED COMMISSION AT THE RATE OF 1% TO 1.50% ON PROVIDING SUCH ENTRIES, AND TO BR ING TO TAX THE AMOUNT SO TAKEN BY THE BENEFICIARIES IN THEIR RESPE CTIVE HANDS, AND ON THE OTHER HAND HE MADE THE ADDITION OF RS.83,71, 29,511/- IN THE HANDS OF THE APPELLANT. HAVING ACCEPTED THE APPELLA NT TO BE AN ENTRY PROVIDER, THE ASSESSING OFFICER WAS WITHOUT REASON TO PRESUME ILLOGICALLY THAT THE APPELLANT HAD DEPOSITED HIS OW N CASH TO THE TUNE OF RS. 83,71,29,511/- WHICH WAS USED TO ISSUE CHEQU ES TO THE BENEFICIARIES. FURTHER, THE DISCLOSURE/SURRENDER MA DE BY THE CHANDIGARH BASED SEVEN BENEFICIARY COMPANIES AGAINS T THE CHEQUES RECEIVED FROM THE APPELLANT FURTHER STRENGTHENS THE CASE OF THE APPELLANT AS AN ENTRY PROVIDER AND CASH DEPOSITED I N THE BANK ACCOUNTS OF DIFFERENT ENTITIES (WHICH THE ASSESSING OFFICER TABULATED 16 ON PAGE 64 OF THE ASSESSMENT ORDER AMOUNTING TO RS. 235,96,03,074) FOR DIFFERENT YEARS FOR ISSUING CHEQUES DO NOT BELO NG TO HIM, BUT MONEYS OF THE BENEFICIARIES TO WHOM CHEQUES WERE IS SUED (LIST OF BENEFICIARIES TABULATED BY THE ASSESSING OFFICER ON PAGES 107-- 20 OF THE ORDER WHO RECEIVED CHEQUES FROM THE APPELLANT'S GROUP ENTITIES). THEREFORE, TAXATION OF THIS SUM AMOUNTING TO RS. 83 ,71,29,511/- SHOULD BE MADE IN THE HANDS OF THE BENEFICIARIES, A S IT OCCURRED IN THE CASE OF DISCLOSURE MADE BY SEVEN BENEFICIARY CO MPANIES WHICH WAS CORRECT AND CONSISTENT WITH THE FACTS AND CIRCU MSTANCES OF THE CASE. THE EFFORT OF THE ASSESSING OFFICER TO TAX TH IS SUM OF RS. 83,71,29,511/- IN THE HANDS OF THE APPELLANT IS NOT ONLY DETRIMENTAL BUT AGAINST THE INTEREST OF THE REVENUE AS THE BENE FICIARIES MAY TRY TO TAKE THE BENEFIT OF THIS CONTRADICTORY APPROACH OF THE ASSESSING OFFICER. IF THE CONTRADICTION IS ESTIMATED, THERE I S POSSIBILITY IN SUCCEEDING TO BRING TO TAX THE BENEFICIARIES WHO AR E IDENTIFIED AND LISTED OUT IN THE ASSESSMENT ORDER. 10.1.10 FACTS EMERGING FROM THE ASSESSMENT ORDER UN DISPUTEDLY INDICATE THAT IT IS INCORRECT ON THE PART OF THE AS SESSING OFFICER TO ALLEGE THAT THE APPELLANT DID NOT PROVIDE HIM WITH THE TRAIL OF EVENTS LEADING TO BENEFICIARIES. IT IS VERY OBVIOUS THAT T HE ASSESSING OFFICER WAS IN POSSESSION OF ENTIRE INFORMATION INCLUDING T ALLY ACCOUNTS, BANK STATEMENTS, NAMES OF ENTITIES USED AS INTERMEDIARIE S, NAMES OF THE BENEFICIARIES ETC WHICH HE HIMSELF CULLED OUT EVERY SPECIFIC AND PRECISE INFORMATION AND INCORPORATED THE SCANNED CO PIES IN THE ASSESSMENT ORDER. THE APPELLANT RELIED ON THE FOLLO WING CASES OF IN SUPPORT OF HIS CLAIM AS AN ENTRY OPERATOR: I) SH. SANJAY KUMAR GARG II) SH. S. K. GUPTA 10.1.11 HOWEVER, THE ASSESSING OFFICER REJECTED THE AFORESAID SUBMISSION MADE BY THE APPELLANT ON THE GROUND THAT HE DID NOT FURNISH THE NAME, ADDRESS, PANS OF THE BENEFICIARIE S SIMILAR TO THE CASE OF SH. S. K. GUPTA WHERE COMPLETE TRAIL OF EVE NTS LEADING TO BENEFICIARIES WAS GIVEN TO THE HON'BLE SETTLEMENT C OMMISSION. I 17 HAVE PERUSED THE ORDER OF THE HON'BLE SETTLEMENT CO MMISSION, AND FOUND THAT EVEN IN THE CASE OF THE SH. S.K. GUPTA A LSO, IT WAS STATED THAT HE DEALT WITH THE MEDIATORS AND NOT DIR ECTLY WITH THE BENEFICIARIES AND HENCE THEIR PANS AND ADDRESSES WE RE NOT KNOWN TO HIM. IN THE CASE OF THE APPELLANT, ALSO A SIMILA R EXERCISE WAS MADE AND THE ASSESSING OFFICER WAS IN POSSESSION OF THE LIST OF BENEFICIARIES ALONG WITH THE AMOUNT TRANSFERRED AS ENTRIES AND THE HE WAS DUTY BOUND TO TAX THE BENEFICIARIES IN ACCOR DANCE WITH LAW IN ALL FAIRNESS TO THE FACTS ON RECORD. 10.1.12 THE AR OF APPELLANT IN HIS SUBMISSIONS RELI ED ON THE JUDICIAL RATIO OF VARIOUS CASE LAWS WHERE A PERSON WAS HELD TO BE AN ACCOMMODATION ENTRY OPERATOR ON SIMILAR AND IDENTIC AL FACTS LIKE IN THE CASE OF THE APPELLANT AND INCOME WAS ASSESSED T HAT REPRESENTED PREMIUM/BROKERAGE/COMMISSION WHICH WAS CHARGED ON PROVIDING SUCH ENTRIES BUT NOT ON THE CASH DEPOSITS MADE IN DIFFERENT ENTITIES UTILIZED BY INTERMEDIARIES/CONDU ITS TO THE FINAL DESTINATION OF THE BENEFICIARY ACCOUNTS. REFERENCE IS MADE TO THE CASE OF MANOJ AGGARWAL VS DCIT (2008) 117 (DEL) (SB ) 145 AND HON'BLE SPECIAL BENCH OF ITAT MUMBAI IN THE CASE O F M/S GOLD STAR FINVEST (P) LTD. VS ITO ITA NO. 4625/MUM/2005 FOR PREPOSITION THAT IN THE CASE OF THE ENTRY PROVIDERS THE INCOME TO BE ASSESSED WOULD BE ONLY THE PREMIUM/BROKERAGE/COMMISSION RECE IVED BY THEM AND NOT THE CASH DEPOSITS IN THEIR HANDS REFER ENCE IS ALSO MADE TO THE CASE OF SH. ABHAY CHAND BARDIA AND SH. SK JAIN SETTLED BY THE HON'BLE INCOME TAX SETTLEMENT COMMIS SION, PRINCIPAL BENCH, NEW DELHI WHERE ALSO ONLY THE BROK ERAGE INCOME WAS ASSESSED AND NOT THE CASH DEPOSIT APPEARING IN THEIR HANDSINTERESTINGLY, BOTH THE APPELLANT AND THE ASSE SSING OFFICER REFERRED TO THE CASE OF SH. S. K. GUPTA. EVEN THOUG H THE FACTS OF THE APPELLANT'S CASE ARE IDENTICAL TO THAT OF THE F ACTS OF THE CASE RELIED UPON BY THE ASSESSING OFFICER, YET HE REJECT ED THE APPELLANT'S SUBMISSIONS. 10.1.13 THE CASES REFERRED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS NO RELEVANCE HERE AS THE FACTS OF THE 18 PRESENT CASE DO NOT FIT INTO THE PROVISIONS LAID DO WN IN SECTION 68 OF THE I T ACT, 1961. 10.1.14 IN VIEW OF THE AFORESAID DETAILED DISCUSSIO N, I DO NOT AGREE WITH THE DECISION OF THE ASSESSING OFFICER REGARDIN G TAXING THE TOTAL TURNOVER OF ENTRIES AMOUNTING TO RS.83,71,29,511/- AS UNEXPLAINED CASH CREDIT AFTER ACCEPTING THE APPELLA NT TO BE THE ENTRY OPERATOR. SINCE THE BENEFICIARIES ARE IDENTIF IED, THE AMOUNTS OF RS. 83,71,29,511/-SHOULD BE BROUGHT TO TAX IN TH EIR RESPECTIVE HANDS. ACCORDINGLY, THE ADDITION OF RS.83,71,29,511 /- MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CASH CREDITS IS HE REBY DELETED. 2.6 FURTHER, WHILE DELETING THE ADDITION PARTLY IN RESPECT OF COMMISSION, THE OBSERVATIONS OF LD. CIT(A) READ AS UNDER:- 13. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND W RITTEN SUBMISSIONS AND CONSIDERED TO THEM. I HAVE ALSO PERUSED THE CIT ATIONS OF THE CASE LAWS REFERRED BY THE AR. FROM THE MATERIAL ON RECOR D, THERE IS NO DISPUTE REGARDING THE APPELLANT BEING AN ENTRY OPERATOR WHO PROVIDED ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES THRO UGH VARIOUS INTERMEDIARY COMPANIES ACTING AS CONDUITS TO TRANSF ER MONEY TO THE BENEFICIARIES BY WAY OF CHEQUE IN LIEU OF CASH. THE APPELLANT ALSO BROUGHT ON RECORD THE MODUS OPERANDI EXECUTED BY HIM THROUG H THESE INTERMEDIARIES CONTROLLED AND MANAGED BY HIM. IN TH E TRAIL, FROM BEGINNING TO THE END, THE TRANSACTIONS HAD MANY VAR IANTS AND AMOUNTS WERE PAID FOR SERVICES RENDERED. THIS ASPECT FINDS STRENGTH FROM THE FACT THAT 23 PERSONS WHO ARE DUMMY DIRECTORS, PROPRIETOR S ETC. ACCEPTED THAT SMALL AMOUNTS WERE PAID BY THE APPELLANT FOR EXECUT ING THE TRANSACTIONS AND ENDORSING THE DOCUMENTS. 13.1 IN THE WRITTEN SUBMISSIONS, THE AR OF THE APPE LLANT STATED THAT HUGE COST WAS INCURRED TO CARRY OUT THE TRANSACTIONS, AN D THAT TRANSACTIONS WHICH WERE IN THE NATURE OF VOLUME AND WHERE NO CAS H WAS INVOLVED COMMISSION PAID WAS EVEN LESS THAN 0.01% IN MANY CA SES. HE ALSO CONTENDED THAT THE VOLUME OF THE BUSINESS WORKED OU T BY THE ASSESSING 19 OFFICER AND THE ESTIMATION OF COMMISSION INCOME AT 1.50% BY THE ASSESSING OFFICER WAS ON HIGHER SIDE. 13.1.2 THE ASSESSING OFFICER DID NOT ALLOW EXPENDIT URE INCURRED BY THE APPELLANT TOWARDS THE ENTIRE OPERATION AND MADE AN ADDITION OF 1.50% ON SUCH ENTRIES PROVIDED. HOWEVER, IT IS A FACT THAT T HE APPELLANT WOULD HAVE INCURRED EXPENSES ON ACCOUNT OF AUDIT FEE, ROC AND OTHER STATUTORY OBLIGATIONS TO BE FULFILLED WITH REGARD TO INTERMED IARIES WHICH ARE CONTROLLED AND MANAGED BY HIM, APART FROM THE PAYME NTS MADE TO DUMMY DIRECTORS, PROPRIETORS, INDIVIDUALS ETC AS ME NTIONED IN ABOVE PARA. THE ASSESSING OFFICER DID NOT TAKE INTO ACCOU NT THESE EXPENSES AND APPLIED 1.5% ON AN ESTIMATE BASIS AS COMMISSION INC OME AND MADE AN ADDITION TO THE INCOME OF THE APPELLANT. AN ESTIMAT ION HAS TO BE BASED ON SOME CONCRETE MATERIAL IN HAND OR ON THE BASIS OF A NY COMPARABLE CASE HAVING IDENTICAL FACTS. 13.1.3 THE AR OF THE APPELLANT ALSO RELIED ON THE R ATIO OF THE FOLLOWING JUDICIAL DECISIONS WHERE COMMISSION INCOME WAS DETE RMINED ON SIMILAR FACTS OF THE CASE: A) MANOJ AGGARWAL (2008) 113 ITD 377 (DEL) B) SH. S. K. GUPTA U/S 245D(4) OF THE I T ACT, 1961 BY THE HON'BLE SETTLEMENT COMMISSION. C) SANJAY KUMAR GARG VS ACIT (2011) 12 TAXMAN.COM 294 (DELHI) D) SANJAY RASTOGI VS ACIT ITA NO. 164 TO 168/DE1/2010. IN ALL THE ABOVE CASES ONLY COMMISSION INCOME NET O F EXPENSES HAVE BEEN ASSESSED. THE AR OF THE APPELLANT ALSO TABULAT ED THE ESTIMATED RATE OF COMMISSION ON THE BASIS OF THE ABOVE JUDICIAL DE CISIONS AS UNDER:- AUTHORITY DECIDING THE MATTER NAME OF THE ASSESSEE RATE OF COMMISSION SPECIAL BENCH OF ITAT, NEW DELHI. SH. MANOJ AGGARWAL 0.35 % INCOME TAX SETTLEMENT COMMISSION, PRINCIPLE BENCH, NEW DELHI SH. S.K. GUPTA 0.80 % 20 ITAT, NEW DELHI SH. SANJAY KUMAR GARG 0.20% ITAT, NEW DELHI SH SANJAY RASTOGI 0.50% 13.1.4 ON PERUSAL OF THIS ISSUE, I FIND THAT THERE WAS NO EVIDENCE IN THE SEIZED MATERIAL TO ASSESS THE INCOME OF THE APPELLA NT AT 1.5% OF THE TOTAL ENTRIES AS COMMISSION INCOME. AS THE AR OF THE APPE LLANT ADMITTED THAT SUCH KIND OF TRANSACTIONS ARE COMPLEX AND INVOLVES HUGE AMOUNTS FOR LAYERING THE INTERMEDIARIES, EXPENDITURE, COMMISSIO N INCOME AT THE RATE OF 1.5% NET IS ON THE HIGHER SIDE. IT IS ALSO AN AD MITTED FACT IN SUCH BUSINESS THAT THE COMMISSION ON ENTRIES VARIES AND IS NOT CONSISTENT OR SAME TO ALL OF THEM. KEEPING IN VIEW, THE NATURE OF THE BUSINESS OF AN ENTRY OPERATION AND RELYING ON THE VARIOUS JUDICIAL PRONOUNCEMENTS IN THE SIMILAR CASES AS THAT OF THE APPELLANT, I ESTIMATE THE NET COMMISSION INCOME AT 0.80% NET. THE COMMISSION INCOME OF THE A PPELLANT THEREFORE IS CALCULATED AT 0.80% ON RS. 83,71,29,511/- WHICH COMES TO RS.66,97,036/-. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTED THE INCOME OF THE APPELLANT AT RS.66,97, 036/- AS AGAINST RS.1,02,26,521/- DETERMINED BY THE ASSESSING OFFICE R. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 2.7 FURTHER WHILE DELETING THE ADDITION IN RESPECT OF DEPOSITS IN A.Y 2012-13, THE OBSERVATIONS OF LD.CIT(A) IN ORDER FOR A.Y. 2012-13 ARE AS UNDER:- 13. I HAVE GONE THROUGH THE WRITTEN SUBMISSIONS, ASSESSMENT ORDER, APPRAISAL REPORT PREPARED BY THE INVESTIGATION WING WITH REGARD TO THE SEIZURE MADE AND CONSIDERED THE MATERIAL ON RECORD. I HAVE ALSO CALLED FOR THE ASSESSMENT RECORD AND PERUSED THE SAME. IN THE INSTANT CASE, IT IS SEEN THAT A SEARCH WAS CONDUCTED U/S 132 OF THE I.T. ACT, ON 29.3.2012 AND IN THE COURSE OF THE SEARCH PROCEEDIN GS, THE AUTHORIZED OFFICERS FOUND OUT ABOUT THE VARIOUS BANK ACCOUNTS MAINTAINED IN THE NAME OF VARIOUS ENTITIES ALLEGEDLY CONTROLLED FROM THE PREMISES THAT WAS SEARCHED. A RESTRAINT ORDER WAS ISSUED IN THE NAME OF THE BANK ACCOUNTS OF VARIOUS ENTITIES AND AN AMOUNT OF RS.29,11,56,72 7/- WAS FOUND, AND OUT OF THE SAME AN AMOUNT OF RS.29,09,62,065/- WAS SEIZED. THIS AMOUNT ALSO INCLUDED AN AMOUNT OF RS.50,00,000/- CA SH SEIZED FROM THE 21 PREMISES OF C-44, 1ST FLOOR SHARDAPURI, RAMESH NAGA R, NEW DELHI MADE IN THE HANDS OF THE APPELLANT. THE BREAKUP OF SEIZU RE AMOUNTING TO RS.29,09,62,065/- MADE BY WAY OF PAY ORDERS FROM VA RIOUS BANK ACCOUNTS ARE GIVEN AS UNDER (FROM THE APPRAISAL REP ORT): S. NO. ACTION U/S 132 ADDRESS OF THE PREMISES CASH FOUND/RS. CASH SEIZED/RS JEWELLERY FOUND JEWELLERY SEIZED 1 . 132 IN THE HANDS OF SH. HIMANSHU VERMA, C- 44, 1ST FLOOR, SHARDAPURI, RAMESH NAGAR, NEW DELHI 51,77,000/ - 50,00,000/ - NIL NIL 2 . 132 BANK A/C NO. 911020011758447, OF M/S VERITABLE TOWNSHIP PVT. LTD., AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 65,987/ - 65,987/ - NIL NIL 3. 132 BANK A/C NO.911020012187169 OF M/S OMEXPRO ENTERPRISES PVT. LTD., AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 5,22,380/- 5,22,380/- NIL NIL 4. 132 BANK A/C NO.911020013042788, OF M/S SNG SECURITIES PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 1,49,52,528/- 1,49,52,528/- NIL NIL 5 . 132 BANK A/C NO. 911020003420334, OF M/S CORNELIUS M A R K E T I N G A N D RESEARCH PVT. LTD, AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 7,38,374/ - 7,38,374/ - NIL NIL 22 6 . 132 BANK A/C NO.910020038244933, OF M/S MOO AMBEY CLOTHING CO. PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 1,00,25,504/ - 1,00,25,504/ - NIL NIL 7. 132 BANK A/C NO.91002003853562 4, O F M / S S O F F P R O TECHNOLOGIES PVT. LTD., AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 81,616/- 81, 616/- NIL NIL 8. 132 BANK A/C NO. 910020044140742, OF M/S SMR ESTATE PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 49,79,952/- 49,79,952/- NIL NIL 9 . 132 BANK A/C NO. 911020007182975, OF M / S S U P E R S I N E TECHNOLOGIES PVT. LTD., AXIS BANK BRANCH ASHOK VIHAR, NEW DELHI 5,49,80,925/ - 5,49,80,925/ - NIL NIL 10 . 132 BANK A/C NO. 911020040774470, OF M/S LAKSHMI NARAYAN FABRICS PVT LTD., AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 2,16,65,277/ - 2,16,65,277/ - NIL NIL 11. 132 BANK A/C NO. 911020049466305, OF M/S SHUBH PROBUILD PVT. LTD, AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 1,27,843/- 1,27,843/- NIL NIL 23 12 . 132 BANK A/C NO. 9110200043198746 , OF M/S MITHELIANCHAL I N V E S T ME N T A N D FINANCE PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 49,79,952/ - 49,79,952/ - NIL NIL 13. 132 BANK A/C NO. 911020001786685, OF M/S WHITE COLLAR MANAGEMENT PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 2,45,640/- 2,45,640/- NIL NIL 14. 132 BANK A/C NO. 910020037798983, OF M/S TRANSMISSION MERCHANDISE PVT. LTD, AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 1,49,75,853/- 1,49,75,853/ - NIL NIL 15 . 132 BANK A/C NO910020037795214 , OF M/S ROYAL MIRAGE FINANCIAL CONSULTANTS PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 1,99,53,930/ - 1,99,53,930/ - NIL NIL 16 . 132 BANK A/C NO. 910020027729096, OF M/S SHRI HARI CLOTHING PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 9,17,340/ - 9,17,340/ - NIL NIL 17. 132 BANK A/C NO. 910020037604833, OF A/S SILCO FABRICS, AXIS BANK BRANCH, ASHOK VIHAR NEW DELHI 81,596/- 81,596/- NIL NIL 24 18 . 132 BANK A/C NO. 911020022894064, OF M/S SO! EXIM PVT LTD, AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 31,88,315/ - 31,88,315/ - NIL NIL 19. 132 BANK A/C NO. 911020032217130, OF M/S AVON TRADEX PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 2,33,437/- 2,33,437/- NIL NIL 20. 132 BANK A/C NO. 911020040743447, OF M/S RADHEY KRISHNA CLOTHING CO. PVT. LTD., AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 3,08,71,258/- 3,08,71,258/- NIL NIL 21 . 132 BANK A/C NO. 910020038229194, OF M /S RIDHI S IDHI CLOTHING PVT. LTD., AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 5,99,77,932/ - 5,99,77,932/ - NIL NIL 22 . 132 BANK A/C NO. 910020038535284, OF M/S NEW MILLENIUM CONSULTANTS PVT. LTD, AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 9,10,088/ - 9,10,088/ - NIL NIL 23. 132 BANK A/C NO. 911020064172810, OF M/S FUSION PORTFOLIO PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 1,10,000/- 1,10,000/- NIL NIL 25 24 . 132 BANK A/C NO. 912020004013914, OF M/S S V ENTERPRISES AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 9,48,000/ - 9,48,000/ - NIL NIL 25. 132 BANK A/C NO. 912020004427481, OF M / S P U S H K A R ENTERPRISES AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 35,45,000/- 35,45,000/- NIL NIL 26. 132 BANK A/C NO. 912020004677615, OF M/S A V TRADING CO., AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 93,49,000/- 93,49,000/- NIL NIL 27 . 132 BANK A/C NO. 909020045782521, OF M/S GREEN VISION CONSTRUCTION PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 1,00,07,000/ - 1,00,07,000/ - NIL NIL 28 . 132 BANK A/C NO. 910020029852596, OF M/S GULMOHAR FABRICS AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 3,01,000/ - 3,01,000/ - NIL NIL 29. 132 BANK A/C NO. 911020003787336, OF M/S CITYLIFE PROMOTERS PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 2,31,000/- 2,31,000/- NIL NIL 26 30 . 132 BANK A/C NO. 911020014449830, OF M/S CAREWELL PROJECT AND DEVELOPMENT PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 40,09,000/ - 40,09,000/ - NIL NIL 31. 132 BANK A/C NO. 911020014450241, OF M/S HOPE REALTECH PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 5,05,000/- 5,05,000/- NIL NIL 32. 132 BANK A/C NO..91102001488241 5, OF M/S POPULAR REALTECH PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 1,47,000/- 1,47,000/- NIL NIL 33 . 132 BANK A/C NO. 911020015137000, OF M/S BLISS BUILDCON PVT. LTD. AXIS BANK BRANCH, ASHOK VIHAR, NEW DELHI 1, 03,000/ - 1, 03,000/ - NIL NIL 34. 132 BANK A/C NO. 09320200000444, OF M/S LOTUS TRADING CO. DEVELOPMENT CREDIT BANK, KONDLI BRANCH, NEW DELHI 15,30,400/- 15,31,000/- NIL NIL 27 35. 132 BANK A/C NO. 09320200000417, OF M / S G I R D H A R I INDUSTRIES DEVELOPMENT CREDIT BANK, KONDLI BRANCH, NEW DELHI 15,36,000/- 15,36,000/- NIL NIL 36. 132 BANK A/C NO. 09320200000453, OF M/S NEW STYLE FABRICS DEVELOPMENT CREDIT BANK, KONDLI BRANCH, NEW DELHI 15,32,974/- 15,32,000/- NIL NIL 37. 132 BANK A/C NO.093202500000435 , OF M/S WONDER ENTERPRISES DEVELOPMENT CREDIT BANK, KONDLI BRANCH, NEW DELHI 15,30,723/- 15,30,000/- NIL NIL 38. 132 BANK A/C NO. 09320200000392, OF M/S JAI VAISHNO REAL ESTATEDEVELOPMENT CREDIT BRANCH, NEW DELHI 15,25,515/- 15,25,000/- NIL NIL 39. 132 BANK A/C NO. 09320200000462, OF M/S SARSWATI FABRICS DEVELOPMENT CREDIT BANK, KONDLI BRANCH, NEW DELHI 15,28,500/- 15,28,000/- NIL NIL 40. 132 BANK A/C NO. 09320200000408, OF M/S STAR CITY ENTERPRISES DEVELOPMENT CREDIT BANK, KONDLI BRANCH, NEW DELHI 15,31,992/- 15,31,000/- NIL NIL 28 41. 132 BANK A/C NO. 09320200000471, OF M/S LIFE TIME TRADING CO. DEVELOPMENT CREDIT BANK, KONDLI BRANCH, NEW DELHI 15,31,100/- 15,31,000/- NIL NIL TOTAL 29,11,56,727 29,09,62,065 NIL NIL 13.1 ON PERUSAL OF THE ASSESSMENT ORDER AND RECORD, I FIND THAT THE ASSESSING OFFICER DID NOT DISCUSS ANYTHING WITH REGARD TO THE ADDITION MADE AMOUNTING TO RS.29,11,56,727/-. I ALSO FIND THAT IN THE COURSE O F THE ASSESSMENT PROCEEDINGS, THE APPELLANT SUBMITTED THE AUDITED BA LANCE SHEET OF VARIOUS ENTITIES FROM WHOSE BANK ACCOUNTS THE SEIZURE WAS M ADE AND ALSO THE RETURN OF INCOME FILED BY THEM RESPECTIVELY. ON PERUSAL OF TH E SAME, I FIND THAT THE AMOUNT OF SEIZURE MADE BY THE DEPARTMENT WAS SHOWN IN THEIR RESPECTIVE FINANCIAL STATEMENTS, BUT THE ASSESSING OFFICER DID NOT VERIFY OR EVEN ENQUIRE THE SOURCE OF SUCH DEPOSITS FOUND IN THEIR BANK ACC OUNTS. IT IS PERTINENT TO MENTION HERE THAT A LARGE PART OF THE SEIZURE WAS M ADE FROM THE BANK ACCOUNTS OF VARIOUS ENTITIES AND ACCORDING TO THE ASSESSING OFFICER NO CASH DEPOSIT WAS FOUND IN THESE ACCOUNTS. FROM THE SEIZURE MADE, IT IS EVIDENT THAT THE DEPOSITS IN HIS ACCOUNTS DID NOT ORIGINATE FROM THE CASH DEP OSITS. 13.1.2 IN THE COURSE OF THE APPEAL PROCEEDINGS, THE AR OF THE APPELLANT CONTENDED THAT A LARGE VOLUME OF TRANSACTIONS WAS O N ACCOUNT OF ROTATION/TURNOVER ETC. IT WAS ALSO STATED THAT IN S EVERAL OF THESE CASES, THE MONEY BELONGED TO THE EXTERNAL PARTIES WHO GOT TRAP PED IN THE ACTION CONDUCTED BY THE DEPARTMENT ON THESE BANK ACCOUNTS. TO DEMONSTRATE THE SAME, THE APPELLANT ILLUSTRATED THE TRANSACTIONS OF M/S COMMERCIAL ENGINEERS & BODY BUILDERS CO. LTD. (CEEBCO) WHERE AN AMOUNT OF RS.10 CRORES WAS RECEIVED FROM THE ABOVE CONCERN TO BE RETURNED BACK AFTER UN DERTAKING CERTAIN CIRCULAR TRANSACTIONS BUT COULD NOT BE SO RETURNED ON ACCOUN T OF SEIZURE OF THE SAME BY THE DEPARTMENT. TO SUBSTANTIATE THE SAME, THE APPEL LANT PLACED ON RECORD A CORRESPONDENCE BETWEEN THE SAID CONCERN AND THE ASS ESSING OFFICER REGARDING THE CLAIM OF THE AMOUNT ABOVE MENTIONED BY COMPANIE S. SIMILARLY, IT WAS STATED THAT IN THE CASE OF M/S UJJAWAL MICRO FINANC E (P) LTD. AN AMOUNT OF RS. 29 13 CRORES WAS CIRCULATED BETWEEN 17.3.2012, 29.3.20 12. FOR M/S UJJAWAL RURAL SERVICES LTD., ROTATIONAL ENTRIES AS MUCH AS RS. 10 CRORES WERE STATED TO BE CARRIED OUT ON 28.3.2012 AND 29.3.2012. FOR M/S DHA MPUR ENGINEERING LTD. ROTATIONAL ENTRIES OF RS. 2 CRORES WERE STATED TO B E MADE BETWEEN 26.3.2012 AND 27.03.2012. TO SUBSTANTIATE SUCH TRANSACTIONS, A DETAILED COMPILATION WITH RESPECT TO THESE SAMPLES OF CIRCULAR TRANSACTIONS W AS SUBMITTED BY THE AR OF THE APPELLANT WITH HIS SUBMISSIONS AS ANNEXURE NO. 3. FROM THESE EXAMPLES SUBMITTED BY THE APPELLANT IT IS EVIDENT THAT THE M ONEYS SEIZED BY THE DEPARTMENT FROM VARIOUS BANK ACCOUNTS WAS NOT ON AC COUNT OF CASH DEPOSITS BUT WERE PROPERLY ACCOUNTED FOR IN THE BOOKS OF THE ENTITIES, WHOSE AUDITED FINANCIAL STATEMENTS LIKE BALANCE SHEET, PROFIT AND LOSS ACCOUNT, ETC. WERE ALSO SUBMITTED TO THE ASSESSING OFFICER. 13.1.3 A FACT THAT EMERGED FROM THE MATERIAL ON REC ORD IS THAT THE ASSESSING OFFICER NEITHER PROVIDED A REASONABLE OPPORTUNITY TO THE APPELLANT TO EXPLAIN THE SOURCE OF FUNDS FOUND IN THE BANK ACCOUNTS OF VARIOUS ENTITIES NOR CARRIED OUT ANY DUE DILIGENCE HIMSELF BEFORE CONCLUDING THA T THE SUMS DEPOSITED IN THE BANK ACCOUNT WERE UNEXPLAINED. AFTER EXAMINING THE AUDITED FINANCIAL STATEMENTS SUBMITTED BY THE APPELLANT, HE DID NOT G IVE ANY ADVERSE FINDING THAT THE AMOUNTS SEIZED FROM THE RESPECTIVE BANK ACCOUNT S WHICH WERE SHOWN ON THE ASSETS SIDE OF THE BALANCE SHEET WAS UNEXPLAINE D. HE ALSO DID NOT BRING ANY MATERIAL ON RECORD TO GIVE A FINDING THAT THE AMOUN T ACTUALLY BELONGED TO THE APPELLANT. HAVING ACCEPTED THE APPELLANT TO BE AN E NTRY OPERATOR, THE ASSESSING OFFICER SHOULD HAVE EXAMINED AND VERIFIED THESE BAN K ACCOUNTS OF VARIOUS ENTITIES TO ESTABLISH THE NAME OF THE BENEFICIARY O F SUCH AMOUNT AND CORRELATE THE SAME WITH THE LIST OF BENEFICIARIES IDENTIFIED OR TO BRING ON RECORD NEW BENEFICIARIES. IN ALL, THE AMOUNTS FOUND AND SEIZED FROM THE BANK ACCOUNTS REPRESENTED THE PART OF THE ENTRIES OR TURNOVER, AS IS EVIDENT FROM THE TALLY ACCOUNTS FOUND IN THE LAPTOP OF THE APPELLANT, A SN AP SHOT OF WHICH THE ASSESSING OFFICER INCORPORATED IN THE ORDER. THE AS SESSING OFFICER ALSO INCORPORATED A TABLE IN THE ASSESSMENT ORDER GIVING THE NAME OF THE ENTITY, ACCOUNT NUMBER, BANK BRANCH WERE CASH WAS DEPOSITED . THEREFORE, IN MY OPINION IN VIEW OF THE ABOVE DISCUSSION THEY SAID S EIZURE AMOUNTING TO RS.28,59,62,065/- (RS.29,09,62,065 RS. 50,00,000/ -) CANNOT BE ASSESSED AS 30 INCOME OF THE APPELLANT ON ACCOUNT OF UNEXPLAINED C ASH DEPOSITS BUT TURNOVER/ENTRIES. 13.1.4 HOWEVER, IN THE COURSE OF THE APPEAL PROCEED INGS, IN RESPONSE TO A QUERY RAISED THE AR OF THE APPELLANT ADMITTED THAT IN THE FOLLOWING CASES THE AUDITED ACCOUNTS WERE NOT PRODUCED BEFORE THE ASSES SING OFFICER. S. NO. NAME AMOUNT 1 SILKO FABRICS RS. 81,506.93/- 2 GULMOHAR FABRICS RS.301,000/- 3 A V TRADING CO. RS. 9,349,000.00/- 4 PUSHKAR ENTERPRISES RS.3,545,000.00/- 5 NEW STYLE FABRICS RS. 1,532,000.00/- 6 SARASWATI FABRICS RS.1,528,000.00/- 7 S V ENTERPRISES RS.948,000.00/- 8 JAI VAISHNO REAL ESTATE RS.1,525,000.00/- 9 STAR CITY ENTERPRISES RS.1,531,000.00/- 10 WONDER ENTERPRISES RS.1,530,000.00/- 11 LIFE TIME TRADING CO. RS.1,531,000.00/- 12 GIRDHARI INDUSTRIES RS.1,536,000.00/- 13 LOTUS TRADING CO. RS.1,531,000.00/- 14 TOTAL RS.2,64,68,506/- FROM THE ABOVE, IT IS EVIDENT THAT THE SUM OF RS.29 ,11,56,727/- (ACTUAL SEIZURE MADE OF RS.29,09,62,065/-) IS THE ONE AGAIN ST WHICH THERE IS NO CASH DEPOSIT IN THE RELEVANT ENTITY'S ACCOUNTS AND WHERE AUDITED ACCOUNTS WERE SUBMITTED. THEREFORE, OUT OF THE SUM OF RS.29, 09,62,065/- WHICH WAS SEIZED BY THE DEPARTMENT AND BROUGHT TO TAX BY THE ASSESSING OFFICER AS UNEXPLAINED CASH, AN AMOUNT OF RS.50,00,000/- SEIZE D IN CASH IN THE HANDS OF THE APPELLANT AND A TOTAL SUM OF RS.2,64,6 8,506/- DEPOSITED IN THE BANK ACCOUNTS OF THE ENTITIES LISTED ABOVE FROM WHERE SEIZURE BY WAY OF PAY ORDERS WAS MADE IS CONSIDERED AS UNEXPLAINED . THEREFORE, THE ADDITION OF RS.3,16,45,506/- (RS.50,00,000 + RS.2,6 4,68,506/-) IS CONFIRMED OUT OF RS.29,11,56,727/- (ACTUAL SEIZURE MADE OF RS.29,09,62,065/-) AND DIRECT THE ASSESSING OFFICER TO PASS A CONSEQUENTIAL ORDER ACCORDINGLY. THIS GROUND IS PAR TLY ALLOWED. 3. LD. CIT(DR), MS. PUJA JINDAL, HAS SUBMITTED THAT LD. CIT(A) HAS ERRED IN LAW AS MUCH IN FACT IN DELETING THE ADDITION IN RESPECT OF ACCOMMODATION ENTRIES PROVIDED BY 31 THE ASSESSEE THROUGH VARIOUS ENTITIES, THE DETAILS OF WHICH WERE FOUND DURING THE COURSE OF SEARCH CONDUCTED ON THE ASSESSEE. SHE SU BMITTED THAT THE ASSESSEE HAS BEEN FOUND TO BE ENGAGED IN PROVIDING THE ACCOMMODA TION ENTRIES AND THIS FACT HAS BEEN ADMITTED BY THE ASSESSEE IN THE STATEMENTS REC ORDED ON 29-03-2012 AT THE TIME OF SEARCH AND ALSO POST SEARCH ON 14-04-2012. REFER RING TO THE ASSESSMENT ORDER SHE POINTED OUT THAT THE AO HAS LISTED 88 ENTITIES WHIC H WERE BEING MANAGED AND CONTROLLED BY THE HIMANSHU VERMA ONLY. SHE ALSO POI NTED OUT TO THE LIST OF BANK ACCOUNTS OF SUCH ENTITIES WHICH ARE 203 BANK ACCOUN TS. SHE SUBMITTED THAT THESE ENTITIES WERE MANAGED AND CONTROLLED IN THE NAME OF DUMMY DIRECTORS/PARTNERS/PROPRIETORS BY HIMANSHU VERMAN O NLY WHICH FACT WAS ADMITTED BY HIMANSHU VERMA IN HIS STATEMENT RECORDED ON 29-03-2 012 AT THE TIME OF SEARCH. SHE POINTED OUT TO THE SEVERAL QUESTIONS AND ANSWERS OU T OF STATEMENTS DESCRIBED BY THE AO IN THE ASSESSMENT ORDER. SHE ALSO SUBMITTED THAT THE LAPTOP ALSO CONTAINED ALL THE DETAILS OF THE ENTITIES WHICH WERE BEING MANAGED A ND CONTROLLED BY THE ASSESSEE, THEIR BANK ACCOUNTS ETC. SHE ALSO POINTED OUT TO TH E SEARCH MATERIAL WHICH WAS IN THE SHAPE OF UNSIGNED AND UNDATED CHEQUES ETC. WHICH HA VE ALSO BEEN LISTED OUT IN THE ASSESSMENT ORDER. SHE ALSO POINTED TO SEVERAL BANK STATEMENTS IMPOUNDED DURING THE COURSE OF SEARCH. SHE ALSO POINTED TO THE EXAMINATI ON OF 15 OF SUCH DUMMY DIRECTORS/PARTNERS/PROPRIETORS WHICH WERE RECORDED U/S 143(1)A. REFERRING TO ALL THESE MATERIAL SHE SUBMITTED THAT IT HAS BEEN BROUGHT ON RECORD THAT ASSESSEE HAD ACTED AS ENTRY PROVIDER. SHE THEREFORE, SUBMITTED THAT THE A O WAS CORRECT IN TAKING THE GROSS AMOUNT OF ENTRIES PROVIDED BY THE ASSESSEE AS THE INCOME OF THE ASSESSEE. SHE ALSO SUBMITTED THAT THERE WAS EVIDENCE ON RECORD, ACCORD ING TO WHICH THE ASSESSEE HAS EARNED THE COMMISSION FROM 1% TO 1.50%. THEREFORE, SHE CONTENDED THAT THE AO WAS RIGHT IN ASSESSING THE COMMISSION AT THE RATE OF 1. 5%. SHE SUBMITTED THAT CIT(A) HAS COMMITTED A WRONG IN REDUCING THE QUANTUM OF COMMIS SION FROM 1.50% TO 0.80%. 32 SHE SUBMITTED THAT THE ISSUE OF COMMISSION IS SUBJE CT MATTER OF APPEAL IN RESPECT OF ALL THE 3 YEARS IMPUGNED IN THE PRESENT APPEAL. APA RT FROM THESE 2 ISSUE ONE MORE ISSUE IS INVOLVED IN A.Y. 2012-13 THAT ON THE BASIS OF IMPOUNDED DOCUMENTS THE AO HAS ADDED A SUM OF RS. 29,11,56,727/- AS UNEXPLAINE D DEPOSITS IN BANK ACCOUNTS AND CASH FOUND DURING THE SEARCH. IN THIS REGARD SHE PO INTED OUT TO THE OBSERVATION OF AO FROM PAGES 54 TO 63 WHEREIN THE AO HAS ADDED S SUM OF RS. 28,59,79,727/- ON ACCOUNT OF SUM DEPOSITED IN THE BANK ACCOUNTS WHIC H WAS ALSO SIEZED AND CASH OF RS. 51.77 LAKH FOUND AT THE PREMISES OF THE ASSESSEE OU T OF WHICH RS. 50,00,000/- WAS SEIZED AND THUS THE ADDITION WAS MADE BY THE AO OF A SUM OF RS. 29,11,56,727/-. SHE FURTHER SUBMITTED THAT LD. CIT(A) HAS WRONGLY G RANTED THE RELIEF TO THE EXTENT OF RS. 25,95,11,221/- ON THE GROUND THAT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE CASH DEPOSIT TO THIS EXTENT. THUS, SHE SUBMITTED TH AT IN ALL THE THREE APPEALS THE DEPARTMENT IS AGITATING THE DELETION OF ADDITION MA DE ON ACCOUNT OF PROVIDING THE ACCOMMODATION ENTRIES AND DELETION OF THE COMMISSIO N TO THE EXTENT OF @0.70% AND IN ADDITION OF THAT IN RESPECT OF A.Y. 2012-13 THE DEPARTMENT IS AGITATING THE DELETION OF RS. 25,95,11,221/- OUT OF TOTAL ADDITION ON THIS ACCOUNT OF RS. 29,11,56,727/-. THUS, SHE PLEADED THAT THE RELIEF GRANTED BY CIT(A) ON ALL THESE ISSUES SHOULD BE SET ASIDE AND THE ADDITIONS MADE BY THE AO SHOULD BE R ESTORED. 4. ON THE OTHER HAND, SH. VIVEK BANSAL, LD. COUN SEL FOR THE ASSESSEE STATED THAT THE ASSESSEE ADMITTEDLY IS AN ACCOMMODATION ENTRY P ROVIDER. HE SUBMITTED THAT LD. CIT(A), ON THE BASIS OF SEVERAL OBSERVATIONS OF TH E AO IN THE ASSESSMENT ORDER AND FROM THE MATERIAL IMPOUNDED DURING THE SEARCH HAS D RAWN A CONCLUSION THAT IT IS ESTABLISHED THAT THE ASSESSEE IS AN ACCOMMODATION E NTRY PROVIDER AND AO HIMSELF HAS ADMITTED SUCH FACT. LD. COUNSEL SUBMITTED THAT IN T HE CASE OF ACCOMMODATION ENTRY PROVIDER, ONLY COMMISSION CAN BE ASSESSED AND THIS HAS SO BEEN HELD IN SEVERAL 33 DECISIONS WHICH HAVE BEEN RELIED UPON BY THE ASSESS EE BEFORE CIT(A) WHICH ARE REPRODUCED AS UNDER:- DECISION OF INCOME TAX SETTLEMENT COMMISSION IN THE CASE OF SHRI. S.K. GUPTA VS ACIT ORDER US/ 245 D (4) OF THE ACT. COPY OF THIS ORDER HAS BEEN FILED IN THE PAPER BOOK AT PAGES 226 TO 255. THE RE LEVANT OBSERVATIONS WERE POINTED OUT ON PARA 27 AND 28 AT PAGES 250 TO 251. 27. AFTER EXAMINING THE FACTS OF THE CASE, WE ARE O F THE CONSIDERED VIEW THAT THE APPLICANT IS AN ENTRY PROVIDER. THEREFORE, IN HIS CASE, ONLY, THE AMOUNT OF PREMIUM/COMMISSION RECEIVED BY THE APPLIC ANT AFTER REDUCING EXPENSES INCURRED WILL BE HIS ADDITIONAL INCOME. TH E APPLICANTS CLAIM THAT THE LOSS OF RS. 1,20,64,400 ON SHARES HAD BEEN ADDE D IN THE PREMIUM ACCOUNT, INSTEAD OF REDUCING THE SAME IN PREMIUM AC COUNT IS EXAMINED. IT IS SEEN FROM THE LEDGER OF PREMIUM ACCOUNT THAT THE LOSS FROM SHARES TOTALING TO RS. 1.20,64,400/- WERE CREDITED IN THE PREMIUM ACCOUNT FROM 01-04-2007 TO 26-10-2007 INSTEAD OF DEBITING THE SA ME IN THE PREMIUM ACCOUNT. THEREFORE, WE ACCEPT APPLICANTS CLAIM THA T AT THE TIME OF WORKING OUT GROSS FIGURE OF PREMIUM/COMMISSION, THIS AMOUNT IS TO BE REDUCED, HOWEVER, THE APPLICANT WILL NOT GET DEDUCTION OF RS . 1,20,64,400/- AT THE TIME OF COMPUTATION OF INCOME AS HE HAS NOT SUBSTAN TIATED THAT LOSS WITH NECESSARY DETAILS. THE APPLICANTS CONTENTION THAT PREMIUM ACCOUNT INCLUDED DIVIDEND OF RS. 1,14,746/- AND THIS AMOUNT IS ALSO REQUIRED TO BE REDUCED AS THE DIVIDEND INCOME IS EXEMPT IS CONSIDE RED AND ACCEPTED. THE APPLICANTS CLAIM OF DEDUCTION OF EXPENDITURE IS RS . 90,60,767/- FROM THE PREMIUM ACCOUNT ON ACCOUNT OF EXPENSES OF ROC, OFFI CER EXPENSES, MEDIATOR EXPENSES, ETC., IS EXAMINED. IT IS SEEN FR OM THE LEDGER ACCOUNTS THAT THE NATURE OF THE EXPENSES CLAIMED UNDER THE H EAD OFFICER EXPENSES OF RS. 35.81 LAKHS AND MEDIATOR EXPENSES FOF RS. 47 .86 LAKHS CANNOT BE VERIFIED. IN BOTH THE HEAD A LUMP SUM AMOUNT IS DEB ITED WITH THE DESCRIPTION OF EXP AND SKG. THE AMOUNT DEBITED IN T HESE ACCOUNT SOMETIMES WAS AN HIGH AS RS. 3,00,000 OR RS. 5,00,0 00. THE APPLICANT HAS NOT GIVEN MEDIATOR-WISE DETAILS OF PAYMENT. THERE I S NO EVIDENCE IN RECORD TO SHOW THAT THE PAYMENTS AS CLAIMED BY THE APPLICA NT WERE MADE TO THE MEDIATORS. IT IS LIKELY THAT MEDIATOR WHO ARE WELL KNOWN TO THE BENEFICIARIES MIGHT HAD RECEIVED COMMISSION FROM TH EM ALSO. IN THE 34 ABSENCE OF ANY VERIFICATION OF NATURE OF EXPENSES, AND THEIR ALLOWABILITY THE EXPENSES INCURRED BY THE APPLICANT IN EARNING THE COMMISSION HAS TO BE ESTIMATED. 28. ON THE BASIS OF FACTS ON RECORD, WE ESTIMATE TH E EXPENSES INCURRED BY THE APPLICANT IN EARNING COMMISSION @20% OF THE GRO SS COMMISSION RECEIVED. ON THE BASIS THE EXPENDITURE IS WORKING O UT TO RS. 27,50,682 ON COMMISSION OF RS. 1,37,56,410. AFTER REDUCING THE S AID EXPENDITURE INCURRED FROM THE GROSS COMMISSION , THE INCOME OF THE APPLICANT IS SETTLED AT RS. 1,10,02,728/- 4.1 LD. COUNSEL FOR THE ASSESSEE FURTHER MADE A REF ERENCE TO THE DECISION OF ITAT IN THE CASE OF SH. SANJAY KUMAR GARG VS ACIT WHICH IS DATED 28-01-2011 IN ITA NO. 1501/DEL/2009 AND OTHER APPEALS. COPY OF THIS ORDER HAS BEEN FURNISHED AT PAGES 256 TO 294 OF THE PAPER BOOK AND THE RELEVANT OBSERVATI ON POINTED OUT FROM THIS DECISION ARE RE-PRODUCED BELOW:- 62. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF SURVEY OP ERATIONS, STATEMENT OF THE ASSESSEE WAS RECORDED WHEREIN IT HAS BEEN CATEG ORICALLY ADMITTED THAT NO PURCHASE AND SALE ACTIVITIES ARE UNDERTAKEN IN THE NAMES OF FIRMS. THE ASSESSEE WAS USING THE FIRMS FOR THE PUR POSE OF PROVIDING SALE BILLS FOR WHICH HE WAS COLLECTING COMMISSION. THE A SSESSEE WAS DEPOSITING CASH IN THE BANK ACCOUNTS OF THE DUMMY F IRMS AS WELL AS HIS OWN FIRMS THROUGH WHICH HE WAS CARRYING OUT ACCOMMO DATION ENTRY BUSINESS. AT THE TIME OF SURVEY NO EVIDENCE WAS FOU ND TO SUGGEST THAT THE ASSESSEE WAS ENGAGED IN REAL COMMISSION BUSINES S. NO OTHER SOURCE OF INCOME WAS ALSO FOUND. IT IS ALSO THE CASE OF AS SESSING OFFICER THAT THE ASSESSEE WAS CARRYING ON BUSINESS OF ENTRY PROVIDER . THE ASSESSMENTS WERE REOPENED FOR THIS PURPOSE ONLY. THE LD. CIT (A PPEALS) HAS GIVEN A FINDING OF FACT THAT THE ASSESSEE WAS ENGAGED IN TH E BUSINESS OF PROVIDING ACCOMMODATION ENTRIES AND, THEREFORE, THE AMOUNTS DEPOSITED IN THE ACCOUNT OF DUMMY CONCERNS WAS TO BE TREATED AS TOTAL RECEIPTS ON WHICH COMMISSION WAS TO BE DETERMINED. THEREFORE, W E ARE IN AGREEMENT WITH THE VIEW OF THE LD. CIT (A) THAT ONLY COMMISSI ON CAN BE DETERMINED 35 ON THE DEPOSITS MADE IN THE BANK ACCOUNTS OF THE DU MMY CONCERNS. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R PASSED BY THE LD. CIT (A) THAT THE AMOUNT DEPOSITED IN THE ACCOUNT OF DUM MY CONCERNS CANNOT BE TREATED AS INCOME OF THE ASSESSEE. THEREFORE, TH E LD. CIT (A), IN OUR CONSIDERED OPINION, IS JUSTIFIED IN TREATING THE CA SH 38 I.T.A. NOS. 1501, 1502 & 3531 TO 3534 (DEL) OF 2009 AND I.T.A. NOS. 1 797, 1798 & 3707 TO 3710 (DEL) OF 2009 DEPOSITED IN VARIOUS BANK ACC OUNTS CONTROLLED AND OPERATED BY THE ASSESSEE AS THE TURNOVER OF THE ACC OMMODATION ENTRY BUSINESS AND COMMISSION INCOME HAS TO BE ESTIMATED THEREON. 4.2 LD. COUNSEL FOR THE ASSESSEE ALSO REFERRED TO T HE DECISION OF ITAT IN THE CASE OF SANJAY RASTOGI VS ACIT IN ITA NO. 164 TO 168/DEL/20 10, COPY OF THIS ORDER IS PLACED AS ANNEXURE-8 FROM PAGES 296 TO 300, RELEVANT OBSER VATION IN PARA 2 ARE RE- PRODUCED BELOW:- 2. THE BRIEF FACTS OF THE CASE ARE AS UNDER. THE ASSESSEE IS A CHARTERED ACCOUNTANT. A SURVEY OP ERATION U/S 133A(1) WAS CARRIED OUT AT THE PREMISES OF THE ASSE SSEE WHERE INCRIMINATING DOCUMENTS WERE FOUND SHOWING THAT ASS ESSEE WAS ENGAGED IN GIVING BOGUS/ACCOMMODATION ENTRIES. THES E ACCOMMODATION/BOGUS ENTRIES WERE PROVIDED THROUGH V ARIOUS CONCERNS RUN AND CONTROLLED BY ASSESSEE. THE INCOME OF THE ASSESSEE WAS REASSESSED AND COMMISSION INCOME ON TH E BOGUS/ACCOMMODATION ENTRIES COMPUTED @ 0.50% ON THE VALUE OF BOGUS TRANSACTIONS WAS ADDED. THE ADDITION WAS PART LY SUSTAINED BY THE CIT (A) @ 0.40% OF THE VALUE OF BOGUS ENTRIE S. THE ADDITION WAS FINALLY UPHELD BY THE ITAT @ 0.50% OF THE TOTAL VALUE OF BOGUS ENTRIES GIVEN BY THE VARIOUS CONCERNS RUN FOR THIS BY THE ASSESSEE. THE ITAT IN ITS ORDER DATED 12.11.2008 HA S SUSTAINED THE ADDITION IN THE HANDS OF THE ASSESSEE BY HOLDIN G AS UNDER :- '8. WE HAVE HEARD BOTH THE SIDES. AS THE FACTS EMER GE THE TRANSACTION IN QUESTION HAVE NOT BEEN DENIED BY THE ASSESSEE. AT THE SAME TIME, A VALID ARGUMENT IS MADE THAT THE DE PARTMENT IS TAXING THE SAME COMMISSION IN THE HANDS OF THE ASSE SSEE AS WELL AS IN THE HANDS OF RESPECTIVE COMPANIES. WE FIND TH E PROPOSITION 36 OF LD. COUNSEL OF THE ASSESSEE AS REASONABLE IN NAT URE INASMUCH AS THE INCOME AS A MATTER OF PRINCIPLE HAS TO BE TA XED IN ONE HAND. IN VIEW THEREOF, WE FIND MERIT IN THE ASSESSEE'S PR OPOSITION AND HELD THAT THE RATE OF 0.50% SHOULD BE APPLIED IN TH E HANDS OF THE ASSESSEE FOR ESTIMATING INCOME AS DONE BY THE AO AN D WE GIVE A DIRECTION THAT THE TURNOVER FOR WHICH THE ASSESSEE IS ASSESSED THE SAME AMOUNT OF COMMISSION SHALL NOT BE ASSESSED IN THE HANDS OF ANY OF THE COMPANY FLOATED BY THE ASSESSEE. LD. DR HAS EXPRESSED HIS NO OBJECTION TO THIS PROPOSITION. IN VIEW THERE OF, WE DISPOSE OF THE CROSS APPEALS ON THESE DIRECTIONS.' 4.3 IN ADDITION TO THE ABOVE CASES RELIED UPON BEFO RE CIT(A), LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE FOLLOWING DECISIONS. DECISION OF E BENCH OF ITAT, NEW DELHI IN THE CASE OF M/S OMNI FARMS PVT.LTD., VS. DEPUTY COMMISSIONER OF DEPUTY COMMISS IONER OF INCOME TAX IN ITA NO.3477/DEL/2013 DATED 28-01-2015, WHERE IN REFERRING TO THE DECISION OF SETTLEMENT COMMISSION REFERRED TO A S ABOVE THE ITAT HAS DELETED THE ADDITION IN THE CASE OF CONDUIT COMPANY WHICH WAS FOUND TO BE AN ACCOMMODATION ENTRY PROVIDER. 17. THUS, THERE IS AN ORDER OF THE SETTLEMENT COMM ISSION AS WELL AS THE ADDITIONAL COMMISSIONER OF INCOME TAX UNDER SECTION 144A HOLDING THAT SHRI S.K. GUPTA WAS PROVIDING ACCOMMOD ATION ENTRIES, HE USED VARIOUS COMPANIES AS CONDUIT FOR P ROVIDING THE ACCOMMODATION ENTRIES, CASH WAS RECEIVED THROUGH ME DIATORS FROM THE PERSONS WHO WANTED TO AVAIL THE ACCOMMODATION E NTRIES, SUCH CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE CONDU IT COMPANIES AND THEREAFTER, CHEQUE OF THE SIMILAR AMOUNT WAS BE ING ISSUED TO THE BENEFICIARIES (I.E. THE PERSON WHO WANTED TO AV AIL THE ACCOMMODATION ENTRY) WITHIN A DAY OR SO. THE ASSESS ING OFFICER HIMSELF IN THE ASSESSMENT ORDER HAS ACCEPTED THESE FACTS. CONSIDERING THE TOTALITY OF THESE FACTS AND THE LOG ICAL CONSEQUENCES OF THE ORDER OF THE SETTLEMENT COMMISSION AS WELL A S OF ADDITIONAL CIT UNDER SECTION 144A, WE HAVE NO HESITATION TO IT A- 3477/D/2013 & 8 OTHERS 19 HOLD THAT THE ADDITION UN DER SECTION 37 68 CANNOT BE MADE IN THE CASE OF THE CONDUIT COMPAN IES. THEREFORE, WE DELETE THE ADDITION MADE UNDER SECTIO N 68 IN THE CASE OF ALL THE NINE COMPANIES, WHICH ARE ADMITTEDL Y CONDUIT COMPANIES OF SHRI S.K. GUPTA. 18. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 28TH JANUA RY, 2015 4.4 LD. COUNSEL FOR THE ASSESSEE ALSO RELIED UPON T HE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF PR COMMISSIONER OF INCOME TAX VS VIJAY CONDUCTORS INDIA PVT. LTD IN ITA 683/2015DECISION DATED 29-09-2015 WHEREI N THE OBSERVATION OF HONBLE DELHI HIGH COURT IN PRARA 8 ARE AS UNDER:- 8. IT IS NOT IN DISPUTE THAT THE RESPONDENT ASSESSE ES ARE THE CONDUIT ENTITIES AND NOT THE BENEFICIARIES. CONSEQUENTLY, T HE ORDER OF THE ITAT DELETING THE ADDITION UNDER SECTION 68 OF THE ACT I N THEIR HANDS DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. 4.5 THUS, IT WAS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT NO ADDITION CAN BE MADE IN THE HANDS OF ACCOMMODATION ENTRY PRO VIDER OF THE VALUE OF THE ACCOMMODATION ENTRY PROVIDED BY HIM. SO FAR AS IT R ELATES TO ASSESSABILITY OF 0.80% OF COMMISSION AND ITS EXCESSIVENESS, LD. COUNSEL FO R THE ASSESSEE PLACED RELIANCE ON THE SUBMISSIONS MADE BEFORE LD. CIT(A) WHICH HAVE B EEN REPRODUCED IN THE ABOVE PART OF THIS ORDER. REFERRING TO THE SUBMISSIONS, I T WAS FURTHER CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE QUANTUM OF COMMIS SION ASSESSED SHOULD BE FURTHER REDUCED. SO FAR AS IT RELATES TO SET OFF OF THE SUS TENANCE OF PART ADDITION OF RS. 3,16,45,506/- UPHELD ON ACCOUNT OF UNEXPLAINED DEPO SITS IN THE BANK ACCOUNT OF THE ASSESSEE, OUT OF TOTAL ADDITION OF RS. 29,11,56,727 /- MADE IN RESPECT OF A.Y. 2012-13, IT WAS SUBMITTED BY LD. COUNSEL OF THE ASSESSEE THA T THE SAID ADDITION MAY BE SET OFF AGAINST THE ADDITION OF COMMISSION UPHELD BY CIT(A) . 38 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF MA TERIAL PLACED BEFORE US. WE FIND THAT LD. CIT(A) WHILE DEC IDING THE APPEALS HAS ALSO CALLED FOR THE ASSESSMENT RECORDS AND HAS RENDERED A FINDI NG THAT THE ASSESSEE IN RESPONSE TO SEVERAL QUARRIES RAISED BY THE AO HAD FURNISHED THE REPLIES. REFERRING TO THE OBSERVATION OF AO IN THE ASSESSMENT ORDER, IT IS OB SERVED BY LD. CIT(A) THAT THE ENTIRE CASE OF AO IS THAT THE ASSESSEE IS AN ACCOMMODATION ENTRY OPERATOR AND SUCH FACT WAS ALSO ADMITTED BY THE ASSESSEE HIMSELF. THE ASSESSEE HAS ADMITTED THAT HE IS ENGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES THROUGH THE ENTITIES CONTROLLED AND MANAGED BY HIM. THUS, LD. C IT(A) HAS CONCLUDED THAT THE ASSESSEE IS AN ENTRY OPERATOR WHICH CANNOT BE DISPU TED. LD. CIT(A) HAS ALSO REFERRED TO THE RELEVANT PORTION OF THE STATEMENTS OF THE AS SESSEE TO CONCLUDE THAT THE ASSESSEE IS AN ACCOMMODATION ENTRY PROVIDER. IT IS IN THIS VIEW OF THE SITUATION SHE HAS HELD THAT THE ASSESSEE IS AN ACCOMMODATION ENTR Y OPERATOR. THE AO HAS ALSO RE- PRODUCED POST SEARCH STATEMENT OF THE ASSESSEE WHIC H IS RECORDED ON 14-04-2012 WHEREIN THE ASSESSEE IN ANSWERING TO QUESTION NO. 9 HAS STATED THAT HE WAS RECEIVING CHEQUES AND RTGS FROM THE COMPANY IN THE SHAPE OF L OANS ETC. WHICH WERE DEPOSITED IN DIFFERENT COMPANIES ACCOUNT WHICH WERE MAINTAINE D BY HIM. HE ALSO STATED THAT THE CASH WAS ALSO BEING RECEIVED WHICH WAS DEPOSITED IN THE BANK ACCOUNT OF FIRMS, PROPRIETARY CONCERNS MANAGED AND CONTROLLED BY HIM. SIMILARLY, HE HAS ALSO STATED THAT HE WAS RECEIVING CHEQUES AND RTGS FROM COMPANI ES AGAINST THE SALE, WHICH WERE BEING DEPOSITED IN DIFFERENT BANK ACCOUNTS OF THE F IRMS AND COMPANIES MANAGED AND CONTROLLED BY HIM. FURTHER, THE AO HAS ALSO REFERRE D TO THE STATEMENT OF THE ASSESSEE RECORDED ON 29-03-2012, WHEREIN IN RESPONSE TO QUES TION NO. 10, IT WAS STATED BY THE ASSESSEE THAT WHENEVER ANY COMPANY/CONCERN WISHES T O TAKE ACCOMMODATION ENTRIES FROM HIM THROUGH VARIOUS CAS OPERATING IN THIS FIEL D, THE CASH WAS RECEIVED FROM THEM TO GIVE THE ENTRIES THROUGH CHEQUES FROM ANY OF THE ENTITIES CONTROLLED BY HIM ON 39 WHICH COMMISSION IS RECEIVED IN THE RANGE OF 0.75% TO 1.75%. IN ANSWER TO QUESTION NO. 12, IT WAS ALSO STATED THAT HE WAS RECEIVING SU CH COMMISSION IN CASH. FURTHER, THE FACT OF RECEIVING COMMISSION HAS ALSO BEEN CONFIRME D THROUGH THE EVIDENCE FOUND IN THE SHAPE OF LAPTOP OF THE ASSESSEE WHICH WAS SEIZE D AND MARKED AS ANNEXURE A-37, WHICH ACCORDING TO AO AS PER OBSERVATION IN HIS ASS ESSMENT ORDER, HAS REVEALED THAT ASSESSEE WAS RECEIVING BROKERAGE/COMMISSION AT THE RATE OF 1% TO 1.50%. THE AO HAS ALSO LISTED OUT 88 ENTITIES IN THE ASSESSMENT O RDER WHICH ARE MANAGED AND CONTROLLED BY THE ASSESSEE. THE AO HAS ALSO LISTED OUT 203 BANK ACCOUNTS OF THESE ENTITIES THROUGH WHICH SUCH ACCOMMODATION ENTRIES H AVE BEEN PROVIDED BY THE ASSESSEE. ALL THESE FACT ESTABLISH BEYOND DOUBT THA T THE ASSESSEE HAS BEEN ACTING ONLY AS A CONDUIT TO PROVIDE ACCOMMODATION ENTRIES TO TH E BENEFICIARIES WHICH ARE IDENTIFIABLE THROUGH THE BANK ACCOUNTS OF THE ENTIT IES CONTROLLED AND MANAGED BY THE ASSESSEE FOR PROVIDING ACCOMMODATION ENTRIES. NO MA TERIAL HAS BEEN BROUGHT ON RECORD BY THE AO TO SHOW THAT ANY MONEY OWNED BY TH E ASSESSEE WAS UTILIZED TO PROVIDE THE ACCOMMODATION ENTRIES. IN THIS VIEW OF THE SITUATION WE ARE OF THE CONSIDERED OPINION THAT LD. CIT(A) DID NOT COMMIT A NY ERROR WHILE RENDERING THE FINDINGS THAT THE ASSESSEE WAS AN ACCOMMODATION ENT RY OPERATOR. FURTHER, LD. CIT(A) HAS ALSO RECORDED A CONTRADICTION IN THE ACTION OF THE AO ON THE GROUND THAT WHILE THE AO IS MAKING ADDITION OF COMMISSION IN THE HANDS OF THE ASSESSEE FOR PROVIDING SUCH ENTRIES THEN, AGAIN HE IS ADDING THE ENTIRE ENTRIES IN THE CASE OF THE ASSESSEE AND BY MAKING SUCH ADDITION THE AO HAS ILLOGICALLY PRESUME D THAT THE ASSESSEE HAD DEPOSITED HIS OWN CASH WHILE PROVIDING THE ENTRIES TO THE BEN EFICIARIES. IN RESPECT OF THE DISCLOSURE/SURRENDER MADE BY SEVEN CHANDIGARH BASED BENEFICIARIES, THE AO HIMSELF HAS GRANTED THE BENEFIT. FURTHER, LD. CIT(A), WHILE ARRIVING AT THE CONCLUSION THAT THE ASSESSEE IS AN ENTRY PROVIDER AND THE CASH DEPOSITE D IN BANK ACCOUNTS OF DIFFERENT ENTITIES (WHICH THE AO HAS TABULATED ON PAGE 64 OF THE ASSESSMENT ORDER AMOUNTING 40 TO RS. 235,96,03,074) FOR DIFFERENT YEARS FOR ISSUE ING CHEQUES DO NOT BELONG TO THE ASSESSEE BUT MONEYS OF THE BENEFICIARIES TO WHOM CH EQUES WERE ISSUED (LIST OF SUCH BENEFICIARIES IS TABULATED BY THE AO ON PAGES 107-1 20 OF THE ASSESSMENT ORDER) WHO RECEIVED THE CHEQUES FROM THE ASSESSEES GROUP ENTI TIES. LD. CIT(A) HAS ALSO OBSERVED THAT IT IS INCORRECT ON THE PART OF AO TO ALLEGE T HAT THE ASSESSEE DID NOT PROVIDE HIM WITH THE TRAIL OF EVENTS LEADING TO THE BENEFICIARI ES AS THE AO WAS IN POSSESSION OF ENTIRE INFORMATION INCLUDING TALLY ACCOUNTS, BANK S TATEMENTS, NAMES OF ENTITIES USED AS INTERMEDIARIES, NAMES OF THE BENEFICIARIES ETC. FROM WHICH THE AO HIMSELF HAS CULLED OUT EVERY SPECIFIC AND PRECISE INFORMATION A ND INCORPORATED THE SCANNED COPIES IN THE ASSESSMENT ORDER. LD. CIT(A) HAS ALSO FOUND THAT THE CASE LAW RELIED UPON BY ASSESSEE IN THE CASES OF SANJAY KUMAR GARG VS. ACI T (2011) 12 TAXMANN.COM 294 (DEL) AND S.K. GUPTA ORDER U/S 245D(4) OF THE ACT, MANOJ AGGARWAL VS DCIT (2008) 113 ITD 377 (DEL)(SB) AND M/S GOLDSTAR FINVEST (P) LTD. VS. ITO ITA NO. 4625/MUM/2005 VS ITO SUPPORTS THE CASE OF THE ASSE SSEE THAT IN THE CASE OF ENTRY PROVIDER THE INCOME TO BE ASSESSED WOULD BE ONLY TH E PREMIUM/ BROKERAGE/ COMMISSION RECEIVED BY HIM AND NOT THE CASH DEPOSIT ED IN THEIR HANDS. WE HAVE ALSO GONE THROUGH THESE DECISIONS RELIED UPON BY LD. CIT (A) IN HIS IMPUGNED ORDER, WHEREIN IT WAS HELD THAT IN THE CASE OF ASSESSEE WH O IS THE ENTRY PROVIDER, ADDITION COULD NOT BE MADE IN RESPECT OF ENTRIES BUT ONLY OF COMMISSION. IN ADDITION TO THE DECISION RELIED UPON BEFORE CIT(A) LD. AR HAS ALSO PLACED RELIANCE UPON FOLLOWING DECISIONS WHICH ALSO CONFIRM THE AFOREMENTIONED VIE W:- A. M/S OMNI FARMS PVT.LTD., VS. DEPUTY COMMISSIONE R OF DEPUTY COMMISSIONER OF INCOME TAX IN ITA NO.3477/DEL/2013 DATED 28-01- 2015 THIS IS CONSOLIDATED ORDER OF ITAT DATED 28-01-2015 IN RESPECT OF NINE ASSESSEES. THE ISSUE BEFORE TRIBUNAL WAS THAT WHETH ER ADDITION EQUAL TO ENTRY PROVIDED BY AN ENTRY PROVIDER CAN BE MADE IN THE HA NDS OF SUCH ENTITIES. THE 41 ITAT AFTER REFERRING TO SEVERAL DECISIONS HAS COME TO THE CONCLUSION THAT NO SUCH ADDITION CAN BE SUSTAINED IN THE HANDS OF THE ENTRY PROVIDER. THE RELEVANT PARAS ARE RE-PRODUCED BELOW:- 17. THUS, THERE IS AN ORDER OF THE SETTLEMENT COMM ISSION AS WELL AS THE ADDITIONAL COMMISSIONER OF INCOME TAX UNDER SECTION 144A HOLDING THAT SHRI S.K. GUPTA WAS PROVIDING ACCOMMODATION ENTRIES , HE USED VARIOUS COMPANIES AS CONDUIT FOR PROVIDING THE ACCOMMODATIO N ENTRIES, CASH WAS RECEIVED THROUGH MEDIATORS FROM THE PERSONS WHO WAN TED TO AVAIL THE ACCOMMODATION ENTRIES, SUCH CASH WAS DEPOSITED IN T HE BANK ACCOUNT OF THE CONDUIT COMPANIES AND THEREAFTER, CHEQUE OF THE SIMILAR AMOUNT WAS BEING ISSUED TO THE BENEFICIARIES (I.E. THE PERSON WHO WANTED TO AVAIL THE ACCOMMODATION ENTRY) WITHIN A DAY OR SO. THE ASSESS ING OFFICER HIMSELF IN THE ASSESSMENT ORDER HAS ACCEPTED THESE FACTS. C ONSIDERING THE TOTALITY OF THESE FACTS AND THE LOGICAL CONSEQUENCE S OF THE ORDER OF THE SETTLEMENT COMMISSION AS WELL AS OF ADDITIONAL CIT UNDER SECTION 144A, WE HAVE NO HESITATION TO ITA-3477/D/2013 & 8 OTHERS 19 HOLD THAT THE ADDITION UNDER SECTION 68 CANNOT BE MADE IN THE CAS E OF THE CONDUIT COMPANIES. THEREFORE, WE DELETE THE ADDITION MADE U NDER SECTION 68 IN THE CASE OF ALL THE NINE COMPANIES, WHICH ARE ADMIT TEDLY CONDUIT COMPANIES OF SHRI S.K. GUPTA. 18. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 28TH JANUARY, 2015 B. PR COMMISSIONER OF INCOME TAX VS VIJAY CONDUCTO RS INDIA PVT. LTD IN ITA 683/2015 DATED 29-09-2015 HONBLE DELHI HIGH COURT IN THE CASE OF PR. COMMIS SIONER OF INCOME TAX VS VIJAY CONDUCTORS INDIA PVT. LTD VIDE ORDER DATED 29 -09-2016 HAS HELD THE ORDER OF ITAT OB OBSERVATION IN PARA 8 AS UNDER:- 8. IT IS NOT IN DISPUTE THAT THE RESPONDENT ASSESSE ES ARE THE CONDUIT ENTITIES AND NOT THE BENEFICIARIES. CONSEQUENTLY, T HE ORDER OF THE ITAT DELETING THE ADDITION UNDER SECTION 68 OF THE ACT I N THEIR HANDS DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. 42 5.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENTS, AS AFORESAID, WE ARE OF THE CONSIDER ED VIEW THAT LD. CIT(A) DID NOT COMMIT ANY ERROR IN HOLDING THAT ASSESSING OFFICER WAS NOT RIGHT IN TAXING THE TOTAL TURNOVER OF THE ENTRIES AS AN UNEXPLAINED CASH CRED IT IN THE HANDS OF THE ASSESSEE, WHO IS AN ENTRY PROVIDER AND SINCE THE BENEFICIARIE S ARE IDENTIFIED, THE ENTIRE AMOUNT SHOULD BE BROUGHT TO TAX IN THE RESPECTIVE HANDS OF THE BENEFICIARIES. HENCE, THE ORDER OF THE LD. CIT(A) IS A WELL REASONED ORDER AND, TH EREFORE, WE AFFIRM THE FINDINGS OF THE LD. CIT(A) ON THE DELETION OF ADDITION OF RS. 8 3,71,29,511/-, RS. 195,01,14,122/- AND RS. 599,94,54,170/- IN RESPECT OF ASSESSMENT YE ARS 2010-11, 2011-12 AND 2012- 13 RESPECTIVELY AND ACCORDINGLY THE GROUNDS PERTAIN ING TO THIS ADDITION IN ALL THESE ASSESSMENT YEARS IN ALL THE 03 APPEALS FILED BY TH E REVENUE ARE DISMISSED. 6. AS REGARDS OTHER ISSUE RELATING TO RATE OF COMM ISSION IN THE HANDS OF THE ASSESSEE WHICH HAS BEEN HELD TO BE AN ENTRY OPERATOR. WE FIN D THAT THE AO HAS ESTIMATED SUCH COMMISSION 1.5% OF THE ENTRIES PROVIDED BY THE ASSE SSEE TO DIFFERENT ENTITIES. THE ASSESSEE HAS AGITATED THIS ADDITION BEFORE CIT(A) A ND RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS TO CONTEND THAT THE ADDITION TO THE EXTENT OF 1.5% AS COMMISSION IS EXCESSIVE:- AUTHORITY DECIDING THE MATTER NAME OF THE ASSESSEE RATE OF COMMISSION SPECIAL BENCH OF ITAT, NEW DELHI SH. MANOJ AGGARWAL 0.35% INCOME TAX SETTLEMENT COMMISSION, PRINCIPLE BENCH, NEW DELHI SH. S.K. GUPTA 0.80% ITAT, NEW DELHI SH. SANJAY KUMAR GARG 0.20% ITAT, NEW DELHI SH. SANJAY RASTOGI 0.50% 6.1 LD. CIT(A) AFTER CONSIDERING SUBMISSIONS OF THE ASSESSEE, HAS CONCLUDED THAT ADDITION OF COMMISSION TO THE EXTENT OF 0.80% IS JU STIFIED AND ACCORDINGLY SHE HAS 43 SUSTAINED THE ADDITION TO THE EXTENT OF 0.80%. THE ASSESSEE IN HIS APPEALS IS AGITATING THE ASSESSMENT OF COMMISSION AT 0.80% AND AGAINST T HAT THE DEPARTMENT IN ITS APPEAL IS AGITATING THE DELETION REMAINING PART OF THE COM MISSION I.E. 0.70%. 6.2 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. WE NOTE THAT THE ENTRIES PROVIDED BY THE ASSESSEE ARE MIX-MATCH OF T HREE TYPES OF ENTRIES AS DISCLOSED BY THE ASSESSEE IN HIS STATEMENT RECORDED ON 14-04- 2012(POST SEARCH). THE RATE OF COMMISSION IS NOT UNIFORM IN RESPECT OF THESE THREE TYPES OF ENTRIES. THEREFORE, TO UPHELD THE ADDITION TO THE EXTENT OF 1.50% IS NOT J USTIFIED ON THE FACTS OF THE CASE MORE PARTICULARLY WHEN AO HAS NOT BROUGHT ANY MATER IAL ON RECORD TO JUSTIFY THE ADDITION TO THIS EXTENT. IN OUR OPINION, LOOKING IN TO THE FACTS OF THE CASE AND THE DECISIONS RELIED UPON, LD. CIT(A) IS JUSTIFIED IN T AKING COMMISSION RATE 0.80%. THEREFORE, WE DECLINE TO INTERFERE IN A SUCH WELL R EASONED FINDING OF LD. CIT(A), HENCE, WE UPHOLD THE FINDINGS OF THE LD. CIT(A) ON THE ISS UE IN DISPUTE AND ACCORDINGLY THESE GROUNDS RELATING TO THE DETERMINATION OF RATE OF COMMISSION BY THE ASSESSEE AS WELL AS BY THE DEPARTMENT ARE DISMISSED. 6.3 IN VIEW OF ABOVE OBSERVATIONS, THE GROUND-3 I N RESPECT OF A.Y. 2010-11 AND 2011-12 AND GROUND-4 OF APPEAL FOR A.Y. 2012-13 IN REVENUES APPEALS ARE DISMISSED AND GROUND-1 OF ASSESSEES APPEAL FOR ALL THE THREE YEARS ARE DISMISSED. 7. AS REGARDS GROUND-3 OF DEPARTMENTAL APPEAL IN R ESPECT OF A.Y. 2012-13, WE HAVE NOTICED THAT LD. CIT(A) HAS DISCUSSED THESE IS SUES IN PARAS 11 TO 13 OF THE IMPUGNED ORDER. LD. CIT(A) HAS REPRODUCED THE SUBM ISSION MADE BY THE ASSESSEE BEFORE HER WHICH CAN BEEN SEEN IN PARA 12 AND THES E SUBMISSION ARE ALSO REPRODUCED IN THE ABOVE PART OF THIS ORDER. LD. CIT(A) HAS REN DERED THE DECISION IN PARA 13. SHE HAS NOTED THE FACT THAT THE SUBJECT MATTER OF BALAN CE IN THE BANK ACCOUNT WAS ON ACCOUNT OF PAY-ORDERS, THE DETAILS OF WHICH HAVE BE EN GIVEN IN THE TABLE DESCRIBED IN 44 PARA 13 OF THE IMPUGNED ORDER. THE ASSESSEE ALSO FU RNISHED THE COPY OF RETURNS FILED BY SUCH CONCERNS ALONG WITH BALANCE SHEETS ETC., WH ICH ARE PART OF THE REPLIES SUBMITTED BY THE ASSESSEE BEFORE LD. CIT(A) AND DOC UMENTS IN THIS REGARD ARE FILED AT PAGES 50 TO 130. THE BASIS OF RELIEF GRANTED BY THE LD. CIT(A) IS THAT THE ASSESSEE HAS BEEN ABLE TO PRODUCE NOT ONLY THE COPY OF ACKNOWLED GMENT OF RETURN FILED BY THOSE CONCERN BUT ALSO THE AUDITED BALANCE SHEET OF THESE CONCERN. IT WAS ALSO NOTICED BY LD. CIT(A) THAT THE DEPOSIT IN THOSE ACCOUNTS ALSO BELONG TO EXTERNAL PARTIES AND THE BALANCE WERE ALSO CLAIMED BY THEM FOR EXAMPLE THE R EFERENCE IS MADE TO THE CEEBCO, UJJWAL MICRO FINANCE PVT. LTD., M/S UJJWAL RRAL SE RVICES LTD. AND M/S DHANPUR ENGINEERING LTD. FROM WHERE IT WAS NOTICED THAT SEV ERAL CRORES OF RUPEES WERE CIRCULAR TRANSACTION AND THESE WERE NOT CASH DEPOSIT BUT WER E PROPERLY ACCOUNTED FOR IN THE ACCOUNTS OF THOSE ENTITIES FOR WHICH THE AUDITED FI NANCIAL STATEMENTS WERE ALSO SUBMITTED TO THE ASSESSING OFFICER. THE DETAILS OF THESE ENTRIES HAVE BEEN CULLED OUT IN ANNEXURE-3 SUBMITTED BEFORE LD. CIT(A) AT PAGES 138 OF THE PAPER BOOK AND THE DETAILS THAT THESE ENTRIES WERE PROPERLY ACCOUNTED FOR WAS ALSO SUBMITTED. REFERENCE IN THIS REGARD CAN BE MADE TO THE DOCUMENTS ENCLOSE D IN THE PAPER BOOKS FROM PAGES 131 TO 141. FURTHER, LD. CIT(A) HAS ALSO LISTED OUT THE SEIZED AMOUNT OF RS. 29,09,62,065/- WHICH IS SEIZED FROM BANK ACCOUNTS A ND HAS OBSERVED THAT THIS CANNOT BE ASSESSED AS INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS AS THE SAME WAS TURNOVER/ENTRIES. THE BALANCE AMOUNT REMAI NING FOR WHICH THE ASSESSEE COULD NOT SUBMIT THE AUDIT REPORTS AND DETAILS WHIC H ARE LISTED OUT IN PARA 13.1.4 IS TOTAL TO RS. 2,64,68,506/- + RS. 50,00,000/- CASH H AS BEEN SUSTAINED TO A SUM OF RS. 3,16,45,506/-. THE DEPARTMENT IN ITS APPEAL IS AGIT ATING THE DELETION OF A SUM OF RS. 25,952,11,221/- AND ASSESSEE IN HIS APPEAL IS SEEKI NG SET OFF OF THE SAID AMOUNT OF RS. 3,16,45,506/- AGAINST THE COMMISSION INCOME. 45 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL REFERRED TO BEFORE US AND ALSO SUBMITTED THE PAPER BOOK WHICH CONSISTS SU BMISSIONS MADE BEFORE CIT(A). THROUGH THE SUBMISSIONS MADE BEFORE AO AND CIT(A), THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THAT THE AMOUNT ADDED BY THE AO OF A SUM OF RS. 29,11,56,727/- WAS NOT ON ACCOUNT OF UNEXPLAINED CREDIT IN THE BANK ACCOUNTS. LD. CIT(A) HAS LISTED OUT THE AMOUNT FROM VARIOUS BANK ACCOUNTS IN PARA 13 WHICH ARE FOUND TO BE THE TURNOVER OF ACCOMMODATION ENTRIES RELATING TO THE ENTITIES WHO HAVE FURNISHED THE RETURN OF INCOME AS WELL AS AUDITED ACCOUNTS WHICH ARE RELIED UPON AND LD. CIT(A) HAS OBSERVED THAT THE SAME CANNOT BE TREATED AS UNEXPLA INED DEPOSITS IN THE HANDS OF THE ASSESSEE. AFTER PERUSING THE FINDINGS OF THE LD. CI T(A), WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF LD. CIT(A), THEREFORE WE DECLINE T O INTERFERE IN THE DELETION OF AMOUNT OF RS. 25,95,11,221/- AND HENCE, UPHOLD THE ORDER O F THE LD. CIT(A) ON THE ISSUE IN DISPUTE. 9. AS REGARDS THE CLAIM OF THE ASSESSEE REGARDING SET OFF OF THE REMAINING ADDITION OF RS. 3,16,45,506/- AGAINST THE COMMISSIO N INCOME, WE FIND NO MERITS IN SUCH CLAIM OF THE ASSESSEE. THEREFORE. THIS GROUND OF THE ASSESSEE IS ALSO DISMISSED. 10. IN THE RESULT ALL THE APPEALS FILED BY THE R EVENUE AND ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 15/03/2019. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL M EMBER DATED:15/03/2019 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR