DCIT, Central Circle - VII, Kolkata, Kolkata V. M/s. Banshidhar Vyapaar (P) Ltd., Kolkata

ITA 1896/KOL/2010

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6564 (ITAT-KOLKATA)
• Duration Of Justice: 8 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 08-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI; SHRIROBIN CHOUDHURY ADD
• Keywords: Accommodation entries; Retraction; Set aside
• Section: 143(3); 131

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 189 4 - 1899 / KOL / 20 10 ASSESSMENT YEARS :2006-07 & 2007-08 DCIT, CENTRAL CIRCLE-VII, KOLKATA V/S . M/S BAKLIWAL FINVEST (P) LTD.,3, MALLICK STREET, KOLKATA-700007 [ PAN NO.AABCB 3321 R ] M/S BANSHIDHAR VYAPAAR (P) LTD.,10, HOSPITAL STREET, KOLKATA-700072 [ PAN NO.AABCB 4390 G ] M/S ANKIT FINVEST (P) LTD.,1R.N. MUKHERJEE ROAD, KOLKATA-700001 [ PAN NO.AACCA 1414 D ] /APPELLANT .. / RESPONDENT(S) /BY ASSESSEE NONE /BY REVENUE DR. P.K.SRIHARI, CIT-DR & SHRIROBIN CHOUDHURY, ADDL. CIT-DR /DATE OF HEARING 05-02-2019 /DATE OF PRONOUNCEMENT 20-02-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THESE SIX REVENUES APPEAL(S) FOR ASSESSMENT YEAR(S ) 2006-07 & 2007- 08 ARISE AGAINST THE COMMISSIONER OF INCOME TAX (AP PEALS), CENTRAL-1, KOLKATAS SEPARATE ORDERS ALL DATED 29.07.2010 & 30 .07.2019 PASSED IN CASE NO.401/CIT(A),C-1/CC-VII/80-09/246/CIT(A),C-1/CC-VI I/09-10, 388/CIT(A),C- ITA NO.1894-99/KOL/2010 A.YS 06-07 & -07-08 DCIT, CC-VII KOL. VS. M/S BAKLIWAL FINVEST , M/S BANSHIIDHAR VYAPAAR & M/S ANKIT F INVEST (P) LTD. PAG E 2 1/CC-VII/08-09, 269/CIT(A),C-1/CC-VII/09-10, 399/CI T(A),C-1/CC-VII/08-09 & 258/CIT(A),C-1/CC-VII/09-10 DELETING THE ASSESSING OFFICERS IDENTICAL ACTION MADE ON PROTECTIVE BASIS AND ERRED IN DELETING @ 2% COMMISSION APPEAL-WISE IN SERIATIM, INVOLVING PROCEEDINGS U/S 143(3) OF TH E INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. A.Y PROTECTIVE BASIS ADDITION(S)(RS) COMMISSION INCOME (RS) 1894/K/10 06-07 13,08,63,000 26,17,260 1895/K/10 07-08 14,64,11,741 29,28,235 1896/K/10 06-07 13,80,83,000 27,61,660 1897/K/10 07-08 19,13,74,926 38,27,499 1898/K/10 06-07 10,31,74,000 20,63,480 1899/K/10 07-08 2,54,77,000 5,09,540 CASE(S) CALLED TWICE. NONE APPEARS AT ASSESSEE BEHE ST. IT IS ACCORDINGLY PROCEEDED EX PARTE. WE TAKE UP ALL THE INSTANT APPEAL(S) ON MERITS. 2. IT APPEARS AT THE OUTSET AFTER A COMBINED PERUSA L OF ALL THESE FILES THAT THE CIT(A) HAS DECIDED THE ISSUE OF IMPU GNED PROTECTIVE ASSESSMENT FRAMED IN INSTANT BATCH OF THESE CASES F OR THE REASON THAT THE DEPARTMENT COULD NOT FILE ON RECORD ALL TH E RELEVANT DETAILS OF SUBSTANTIVE ASSESSMENT(S) FRAMED IN SHRI KETAN P AREKH GROUP OF CASES. WE NOTICE IN THIS BACKDROP OF FACTS THAT THIS TRIBUNALS CO- ORDINATE BENCHS DECISION IN DCIT VS. M/S TOPGRAIN MANAGEMENT PVT. LTD. IN ITA NO.524-525/KOL/2014 & 1866/KOL/2013 DECIDED ON 08.02.2019 ARISING OUT FOR THE SAME SEARCH HAS REST ORED BACK TO THE CIT(A)S FILE VIDE AS ITS FOLLOWING DETAILED DI SCUSSION:- 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY. T HE INVESTIGATION CARRIED OUT BY THE DEPARTMENT OF INCOME TAX (INVEST IGATION), KOLKATA REVEALED THAT SOME ENTITIES WERE INVOLVED IN PROVID ING ACCOMMODATION ENTRIES TO VARIOUS COMPANIES BASED IN MUMBAI, WHICH IN TURN HAD USED THE SAID FUNDS FOR PAYMENTS TO MADHIPURA MERCANTILE COOPERATIVE BANK AT MUMBAI, WHICH WAS CONTROLLED BY SHRI KETAN PAREK H. SINCE THE ASSESSEE-COMPANY WAS ONE OF SUCH ENTITIES, THE STAT EMENT OF ITS DIRECTOR SHRI PRAMOD SHARMA WAS RECORDED UNDER SECT ION 131 BY THE ITA NO.1894-99/KOL/2010 A.YS 06-07 & -07-08 DCIT, CC-VII KOL. VS. M/S BAKLIWAL FINVEST , M/S BANSHIIDHAR VYAPAAR & M/S ANKIT F INVEST (P) LTD. PAG E 3 DDIT(INVESTIGATION), KOLKATA ON 15.12.2006. IN THE SAID STATEMENT GIVEN ON OATH, SHRI PRAMOD SHARMA ACCEPTED THAT HE HAD GOT CASH OF EQUIVALENT AMOUNT FROM THE MUMBAI BASED COMPANIES B ELONGING TO SHRI KETAN PAREKH GROUP AND AFTER DEPOSITING THE SA ID CASH INTO THE BANK ACCOUNT OF THE ASSESSEE-COMPANY, CHEQUES WERE ISSUED TO THE SAID COMPANIES. HE ALSO FURNISHED A LIST OF CHEQUES SO ISSUED AGAINST CASH THAT HAD BEEN RECEIVED BY HIM. ALTHOUGH SHRI P RAMOD SHARMA SUBSEQUENTLY FILED AN AFFIDAVIT RETRACTING HIS STAT EMENT, THE ASSESSING OFFICER DID NOT ACCEPT THE SAME ON THE BASIS OF THE ENQUIRIES CONDUCTED BY THE INVESTIGATION WING ON A TEST-CHECK BASIS, WHICH REVEALED THAT CASH WAS DEPOSITED IN VARIOUS BANK AC COUNTS IN DIFFERENT STAGES. ACCORDING TO THE ASSESSING OFFICER, THIS FA CTUAL POSITION SUBSTANTIATED THE STATEMENT OF SHRI PRAMOD SHARMA, DIRECTOR OF THE ASSESSEE-COMPANY THAT CASH WAS INDEED RECEIVED BY T HE ASSESSEE- COMPANY IN LIEU OF CHEQUES GIVEN TO VARIOUS COMPANI ES BELONGING TO KETAN PAREKH GROUP. HE ACCORDINGLY HELD THAT ACCOMM ODATION ENTRIES WERE GIVEN BY THE ASSESSEE-COMPANY TO VARIOUS MUMBA I BASED COMPANIES BELONGING TO KETAN PAREKH GROUP AND SINCE THE ACCOMMODATION ENTRIES SO GIVEN DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2007-08 AGGREGATED TO RS.23,48,45,847/-, HE AD DED THE COMMISSION INCOME @ 2% AMOUNTING TO RS.46,96,907/- TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED FOR A.Y. 2007-08 UNDER SECTION 143(3) VIDE AN ORDER DATED 29.12.2009 . IN THE ASSESSMENT SO MADE, HE ALSO MADE AN ADDITION OF RS. 23,48,45,847/- IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS OBSER VING THAT THE UNEXPLAINED INCOME TO THAT EXTENT IN THE FORM OF CA SH GIVEN BY THE MUMBAI BASED COMPANIES WAS ASSESSABLE ON SUBSTANTIV E BASIS IN THE HANDS OF THE SAID COMPANIES. THE ASSESSING OFFICER ALSO REOPENED THE ASSESSMENTS FOR A.YS. 2005-06 AND 2006-07 AND IN TH E ASSESSMENTS MADE UNDER SECTION 143(3)/147 VIDE ORDERS DATED 31. 12.2008, HE MADE SIMILAR ADDITION ON ACCOUNT OF COMMISSION INCOME AT THE RATE OF 2% AMOUNTING TO RS.83,74,760/- AND RS.37,43,840/- TO T HE TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2005-06 AND 2007-08 RESPECTIV ELY. HE ALSO MADE ADDITIONS OF RS.41,87,38,000/- AND RS.18,71,92 ,000/- SIMILARLY ON PROTECTIVE BASIS IN THE ASSESSMENTS COMPLETED UN DER SECTION 143(3)/147 FOR A.YS. 2005-06 AND 2006-07 RESPECTIVE LY FOR THE TOTAL AMOUNT OF ACCOMMODATION ENTRIES PROVIDED BY THE ASS ESSEE-COMPANY TO THE MUMBAI BASED COMPANIES BELONGING TO KETAN PA REKH GROUP OBSERVING THAT UNEXPLAINED INCOME TO THAT EXTENT WA S LIABLE TO BE ASSESSED ON SUBSTANTIVE BASIS IN THE HANDS OF THE S AID COMPANIES FOR THE CASH GIVEN TO THE ASSESSEE-COMPANY. THE ASSESSI NG OFFICER MADE FURTHER ADDITIONS OF RS.3,06,62,000/- AND RS.32,85, 000/- TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2005-06 AND 2006-07 RESPECTIVELY ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS FOUND TO BE MA DE IN THE BANK ACCOUNTS OF THE ASSESSEE. 3. AGAINST THE ORDERS PASSED BY THE ASSESSING OFFIC ER UNDER SECTION 143(3)/147 FOR A.Y. 2005-06 AND 2006-07 AND UNDER S ECTION 143(3) FOR A.Y. 2007-08, APPEALS WERE PREFERRED BY THE ASSESSE E-COMPANY BEFORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING T HE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILA BLE ON RECORD, THE LD. CIT(APPEALS) DELETED THE ADDITION MADE BY THE A SSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2005-06 O N ACCOUNT OF THE ALLEGED ACCOMMODATION ENTRIES GIVEN TO THE MUMBAI B ASED COMPANIES ITA NO.1894-99/KOL/2010 A.YS 06-07 & -07-08 DCIT, CC-VII KOL. VS. M/S BAKLIWAL FINVEST , M/S BANSHIIDHAR VYAPAAR & M/S ANKIT F INVEST (P) LTD. PAG E 4 IN THE FORM OF COMMISSION INCOME AT THE RATE OF 2% AS WELL AS FURTHER ADDITION ON ACCOUNT OF PROTECTIVE BASIS FOR THE FOL LOWING REASONS GIVEN IN PARAGRAPH NO. 6 OF HIS IMPUGNED ORDER:- 6. I HAVE PERUSED THE RELEVANT ORDERS AND CONSIDER ED THE MATERIAL PLACED ON RECORD. I FIND FROM THE APPEAL F OLDER THAT IN COURSE OF THE APPELLATE PROCEEDINGS, MY LEA RNED PREDECESSOR TRIED TO ASCERTAIN ABOUT THE CASES WHER E SUBSTANTIVE ADDITIONS WERE MADE CORRESPONDING TO TH E PROTECTIVE ADDITION IN THE PRESENT CASE; AND ALSO, ABOUT THE FATE OF THE APPEALS IN THOSE CASES. THE LD CIT( A) CALLED FOR THE REPORT VIDE HIS LETTER DATED 23-07-2 009 WHICH WAS FOLLOWED BY REMINDERS DATED 17-08-2010, 1 3- 07-2011, 30-10-2013 AND 19-11-2013. HOWEVER, THOUGH A SUBSTANTIAL PERIOD OF 4 & 1/2 YEARS HAS ELAPSED, NO THING HAS BEEN HEARD IN THIS REGARD FROM THE AO. IN THIS FACTUAL BACKGROUND; GIVEN THE FACTS OF THE CASE AND THE FIN DINGS OF THE AO IN HIS ASSESSMENT ORDER;' AND ALSO, THE DECISIONS OF THE HON'BLE BENCHES OF THE JURISDICTIO NAL ITAT IN SIMILAR CASES INVOLVING IDENTICAL FACTS AND CIRCUMSTANCES, THE PRESENT APPEALS NOW BEING DECIDE D ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. I FI ND THAT THE AO HAS MADE THE ADDITIONS ON THE BASIS OF THE ADMISSION MADE BY THE DIRECTOR BEFORE THE DDIT(INV) WHICH WAS LATER RETRACTED. IT IS A SETTLED LEGAL PR OPOSITION THAT A MERE ADMISSION WHICH IS LATER RETRACTED AND WHICH IS NOT CORROBORATED OR SUPPORTED BY ANY INDEPENDENT MATERIAL CANNOT BE MADE THE BASIS .FOR' ADDITION. O NCE THE ADMISSION MADE BY THE DIRECTOR WAS RETRACTED, T HE ONUS WAS ON THE AO TO BRING POSITIVE MATERIAL ON RE CORD WHICH COULD CORROBORATE OR SUPPORT THE ADMISSION. BUT, IN THE PRESENT CASE, NO SUCH MATERIAL HAS BEEN BROU GHT ON RECORD BY THE AO. ON THE CONTRARY, THE AO HAS SI MPLY REJECTED THE RETRACTION WITHOUT ASSIGNING ANY REASO N. THE AO HAS NOT EVEN DISCUSSED IN HIS ASSESSMENT ORDER A S TO WHY THE RETRACTION MADE-BY THE DIRECTOR THROUGH A S WORN AFFIDAVIT WAS NOT ACCEPTABLE TO HIM. MOREOVER, THE AO HAS BROUGHT ON RECORD NO INDEPENDENT MATERIAL WHICH COU LD POSSIBLY CORROBORATE OR SUPPORT THE ADMISSION MADE EARLIER BY THE DIRECTOR OF THE ASSESSEE COMPANY. IN THIS FACTUAL BACKGROUND, I AM OF THE CONSIDERED VIEW THA T THE AO HAS ERRED IN LAW AS WELL AS ON FACTS IN RESTING HIS ASSESSMENT ON THE ADMISSION OF THE DIRECTOR WHICH W AS LATER RETRACTED AND WHICH WAS NOT CORROBORATED OR SUPPORTED BY ANY INDEPENDENT MATERIAL ON RECORD. I ALSO FIND FROM THE ASSESSMENT ORDER THAT THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH WAS MADE BY THE AO ON PROTECTIVE BASIS. THE AO HAS HIMSELF GIVEN THE FIND ING IN HIS ASSESSMENT ORDER THAT THE ASSESSEE COMPANY HAD ISSUED CHEQUES BY TAKING EQUAL AMOUNT OF CASH FROM VARIOUS COMPANIES; AND THAT, SUCH CASH WAS ASSESSAB LE AS UNEXPLAINED INCOME IN THE HANDS OF THOSE COMPANI ES. THE AO HAS THEN ADDED THE SAME CASH ON PROTECTIVE BASIS AS UNEXPLAINED INCOME OF THE ASSESSEE COMPANY WITHOUT ASSIGNING ANY CONCRETE REASONS. I FIND NO B ASIS OR JUSTIFICATION FOR THE AO TO CONSIDER ON PROTECTIVE BASIS ITA NO.1894-99/KOL/2010 A.YS 06-07 & -07-08 DCIT, CC-VII KOL. VS. M/S BAKLIWAL FINVEST , M/S BANSHIIDHAR VYAPAAR & M/S ANKIT F INVEST (P) LTD. PAG E 5 SUCH CASH AS UNEXPLAINED INCOME OF THE ASSESSEE COMPANY WHICH HE HIMSELF HELD WAS ASSESSABLE AS UNEXPLAINED INCOME IN THE HANDS OF THE VARIOUS COMPANIES WHO HAD ALLEGEDLY PURCHASED ACCOMMODATION ENTRIES. THE ADDITION ON PROTECTIVE BASIS ON ACCOUN T OF UNEXPLAINED CASH BY THE AO CONTRADICTS HIS OWN FIND INGS THAT SUCH CASH WAS ASSESSABLE AS UNEXPLAINED INCOME IN THE 'HANDS OF THE VARIOUS COMPANIES WHO HAD ALLEGED LY PURCHASED ACCOMMODATION ENTRIES. ABOVE ALL, IDENTIC AL ADDITIONS MADE BY THE AO IN SIMILAR CASES WERE DELE TED BY MY LEARNED PREDECESSOR AS WELL AS BY THE HON'BLE BENCHES OF THE JURISDICTIONAL ITAT. IN OTHER WORDS, SIMILAR ADDITIONS BASED ON THE ADMISSION OF THE DIRECTOR OF THE COMPANY WHICH WAS LATER RETRACTED WAS DELETED BY TH E JURISDICTIONAL ITAT IN THE ASSESSMENT OF SUCH COMPA NY. IN THESE CASES, THE DIRECTOR OF THE COMPANY MADE ADMIS SION REGARDING PROVIDING ACCOMMODATION ENTRY IN LIEU OF CASH WHICH WAS LATER RETRACTED. THOUGH THE AO MADE SIMIL AR ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH AND COMMISSION INCOME IN THE CASE OF THE COMPANY, THE S AME WAS DELETED BY THE LD CIT(A) AS WELL AS BY THE JURISDICTIONAL ITAT. THE ISSUES IN THE PRESENT APPE AL ARE THUS COVERED BY THE ORDERS OF THE HON'BLE BENCHES O F THE .JURISDICTIONAL ITAT WHEREIN SIMILAR ADDITIONS, MAD E UNDER IDENTICAL FACTS AND CIRCUMSTANCES, WERE DELETED. RESPECTFULLY FOLLOWING THE DECISIONS OF THE JURISDI CTIONAL ITAT, IT IS TO BE HELD THAT THE ADDITIONS MADE BY T HE AO ON ACCOUNT OF UNEXPLAINED CASH AND COMMISSION INCOM E IS NEITHER SUSTAINABLE IN LAW NOR ON FACTS. THE ADD ITIONS OF RS.41,87,38,000/- AND RS.83,74,760/- IS DIRECTED TO BE DELETED. GROUND NO 2 & 3 ARE ALLOWED. FOR ALMOST IDENTICAL REASONS AS GIVEN IN HIS IMPUGN ED ORDER FOR A.Y. 2005-06, THE LD. CIT(APPEALS) ALSO DELETED THE SIMI LAR ADDITIONS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2006-07 AND 2007-08 ON ACCOUNT OF THE ALLEGED ACCOM MODATION ENTRIES GIVEN TO THE MUMBAI BASED COMPANIES IN THE FORM OF COMMISSION INCOME AND FURTHER ADDITION ON ACCOUNT OF PROTECTIV E BASIS. 4. AS REGARDS THE ADDITION OF RS.3,06,62,000/- MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y . 2005-06 ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS FOUND TO BE MA DE IN THE BANK ACCOUNTS, THE LD. CIT(APPEALS) DID NOT FIND THE SAM E TO BE SUSTAINABLE FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 8 OF HIS IMPUGNED ORDER:- 8. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE REMAND REPORTS OF THE AO. IT WAS CONTENDED BEFORE M E THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WAS VERI FIABLE FROM THE CASH BOOK OF THE ASSESSEE COMPANY. IT WAS FURTHER CONTENDED THAT THE CASH BALANCES AVAILABLE IN THE CASH BOOK WERE DUE TO CASH WITHDRAWALS MADE EARLIER FROM THE BANK ACCOUNT (WHICH WAS VERIFIABLE FROM TH E BANK STATEMENT) AND THE SALE PROCEEDS OF SHARES (WH ICH WAS DULY SUPPORTED BY SALES INVOICES). THE AO HAS ITA NO.1894-99/KOL/2010 A.YS 06-07 & -07-08 DCIT, CC-VII KOL. VS. M/S BAKLIWAL FINVEST , M/S BANSHIIDHAR VYAPAAR & M/S ANKIT F INVEST (P) LTD. PAG E 6 ADMITTED IN HIS REMAND REPORTS THAT THE CASH DEPOSI TS IN THE BANK ACCOUNT WERE VERIFIABLE FROM THE CASH BOOK WHICH WAS PRODUCED BEFORE HIM IN COURSE OF THE REMA ND PROCEEDINGS. THE AO HAS FURTHER ADMITTED THAT THE S ALE PROCEEDS OF SHARES REFLECTED IN THE CASH BOOK ARE D ULY SUPPORTED BY SALES INVOICES WHICH WERE ALSO PRODUCE D BEFORE HIM. THE AO HAS FOUND NO DEFECT IN THE CASH BOOK OF THE ASSESSEE COMPANY. THE AO HAS NOT POINTED OUT ANY RECEIPTS RECORDED IN THE CASH BOOK WHOSE SOURCE WAS HOT EXPLAINED. .THE REMAND REPORTS OF THE AO CONTAI N NO ADVERSE FINDING OR REMARK ABOUT THE CASH BOOK. IN T HIS FACTUAL BACKGROUND, THE ONLY CONCLUSION THAT CAN PO SSIBLY BE DRAWN IS THAT THE CASH DEPOSITS IN THE BANK ACCO UNT ARE EXPLAINED WITH REFERENCE TO THE CASH BOOK OF TH E ASSESSEE COMPANY. THE AO HAS NOTED IN HIS REMAND REPORTS THAT APART FROM THE BANK STATEMENT, CASH 'B OOK AND THE SALES INVOICES, THE ASSESSEE COULD PRODUCE NO OTHER EVIDENCE FOR VERIFICATION. BUT THEN, IT HAS N OT BEEN CLARIFIED BY THE AO AS TO WHAT MORE EVIDENCE HE REQ UIRED THE ASSESSEE TO PRODUCE FOR VERIFICATION. THE AO HA S OBSERVED THAT THE TRANSACTIONS IN SHARES WERE MADE IN CASH. BUT THEN, THE SALES INVOICES ALONGWITH THE PA N OF THE BUYERS WAS PRODUCED BEFORE THE AO IN COURSE OF THE REMAND PROCEEDINGS AND THE REMAND REPORTS CONTAIN N O ADVERSE FINDINGS IN THIS REGARD. I THEREFORE AGREE WITH THE LD AR THAT THERE IS NO ADVERSE FINDING IN THE REMAN D REPORTS OF THE AO. THE AO HAS CATEGORICALLY ADMITTE D THAT THE BANK STATEMENT, CASH BOOK AND SALES INVOICES WE RE PRODUCED BEFORE HIM AND THAT THE CASH DEPOSITS IN T HE BANK ACCOUNT WERE VERIFIABLE FROM THE CASH BOOK. I AM THEREFORE OF THE CONSIDERED VIEW THAT SUCH CASH DEP OSITS IN THE BANK ACCOUNT WHICH WERE DULY VERIFIABLE FROM THE CASH BOOK OF THE ASSESSEE COMPANY COULD NOT BE TREA TED AS ITS UNDISCLOSED INCOME. THE ADDITION OF RS.3,06,62,000/- IS DELETED. GROUND NO 4 IS ALLOWED . GROUND NO 5 IS DIRECTED AGAINST THE INITIATION OF P ENALTY PROCEEDINGS U/S.271(1)(C) WHICH IS PREMATURE FOR ADJUDICATION AT THIS STAGE. HENCE, GROUND NO 5 IS DISMISSED. GROUND NO 6 IS GENERAL IN NATURE. FOR ALMOST IDENTICAL REASONS AS GIVEN IN HIS IMPUGN ED ORDER FOR A.Y. 2005-06, THE LD. CIT(APPEALS) ALSO HELD THAT THE SI MILAR ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNTS OF THE ASSESS EE FOR A.Y. 2006- 07 WAS NOT SUSTAINABLE. ACCORDINGLY HE DELETED THES E ADDITIONS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE FOR A.YS. 2005-06 AND 2006-07. AGGRIEVED BY THE ORDERS OF THE LD. CIT(APPEALS) GIVING RELIEF TO THE ASSESSEE FOR ALL THE THREE YEA RS UNDER CONSIDERATION, THE REVENUE HAS PREFERRED THESE APPE ALS BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING OF THESE APPEALS FIXED ON 28.01.2009, NONE HAS APPEARED ON BEHALF OF THE ASSESSEE. THESE APPEA LS ARE, THEREFORE, BEING DISPOSED OF EX-PARTE QUA THE RESPONDENT-ASSES SEE AFTER HEARING ITA NO.1894-99/KOL/2010 A.YS 06-07 & -07-08 DCIT, CC-VII KOL. VS. M/S BAKLIWAL FINVEST , M/S BANSHIIDHAR VYAPAAR & M/S ANKIT F INVEST (P) LTD. PAG E 7 THE ARGUMENTS OF THE LD. D.R. AND PERUSING THE RELE VANT MATERIAL AVAILABLE ON RECORD. THE TWO COMMON ISSUES INVOLVED IN ALL THESE THREE APPEALS RELATE TO THE DELETION BY THE LD. CIT(APPEA LS) OF THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED ACCOMMODATION ENTRIES GIVEN TO THE MUMBAI BASED COMPANIES ON PROT ECTIVE BASIS AND THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITIO N MADE BY THE ASSESSING OFFICER ON ACCOUNT OF COMMISSION INCOME A LLEGEDLY RECEIVED BY THE ASSESSEE FOR GIVING ACCOMMODATION ENTRIES. I T IS OBSERVED THAT THE SIMILAR ISSUES WERE INVOLVED IN SOME OTHER CASE S AND ALL THESE CASES WERE ADJOURNED IN THE PAST AND ALSO BLOCKED F OR SOME PERIOD FOR GETTING THE INFORMATION ABOUT THE STATUS OR OUTCOME OF THE CASES WHERE THE SIMILAR AMOUNTS WERE ADDED ON SUBSTANTIVE BASIS . INSPITE OF SUFFICIENT TIME GIVEN TO BOTH THE PARTIES, THEY HAV E FAILED TO FURNISH THE SAID INFORMATION. IT IS WELL SETTLED THAT PROTECTIV E ASSESSMENT IS PERMISSIBLE IN LAW AND IN CASE A DOUBT OR AMBIGUITY ABOUT REAL ENTITY IN WHOSE HANDS A PARTICULAR INCOME IS TO BE ASSESSED, THE ASSESSING AUTHORITY IS ENTITLED TO HAVE RECOURSE TO MAKE A PR OTECTIVE ASSESSMENT. AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF LALJI HARIDAS VS.- ITO (43 ITR 387), THE OFFICER MAY, WHEN IN DOU BT, TO SAFEGUARD THE INTEREST OF THE REVENUE CAN ASSESS IT IN MORE T HAN ONE HAND BUT THIS PROCEDURE CAN BE PERMITTED ONLY AT THE STAGE O F ASSESSMENT. PROTECTIVE ASSESSMENT BECOMES REDUNDANT WHEN THE SU BSTANTIVE ASSESSMENT BECOMES FINAL AND IF THE SUBSTANTIVE ASS ESSMENT FAILS, IT IS PROTECTIVE ASSESSMENT WHICH IS TO BE TREATED AS SUB STANTIVE. KEEPING IN VIEW THIS COROLLARY BETWEEN THE SUBSTANTIVE ASSE SSMENT AND PROTECTIVE ASSESSMENT, AN APPEAL AGAINST THE PROTEC TIVE ASSESSMENT SHOULD ORDINARILY AWAIT THE OUTCOME OF THE SUBSTANT IVE ASSESSMENT SO THAT THE PROTECTIVE ASSESSMENT CAN BE INCONFORMITY WITH THE SUBSTANTIVE ASSESSMENT. IN THE CASE OF CIT VS.- SU RENDRA GULAB CHAND MODI (140 ITR 517), THE APPEAL ARISING OUT OF THE PROTECTIVE ASSESSMENT WAS DISPOSED OF BY THE APPELLATE AUTHORI TY I.E. TRIBUNAL VACATING THE PROTECTIVE ASSESSMENT WITHOUT WAITING FOR THE FINAL OUTCOME OF THE PROCEEDINGS ARISING FROM THE SUBSTAN TIVE ASSESSMENT, WHICH MATTER WAS PENDING IN THE HONBLE SUPREME COU RT. THE HONBLE GUJARAT HIGH COURT HELD THAT THE TRIBUNAL WAS NOT J USTIFIED IN PROCEEDING WITH THE MATTER AND IN DISPOSING OF IT I NSTEAD OF BLOCKING IT TILL THE DISPOSAL OF THE MATTER PENDING IN THE HON BLE SUPREME COURT IN ORDER TO BRING IT INCONFORMITY WITH THE VIEW OF THE HONBLE SUPREME COURT. THE HONBLE GUJARAT HIGH COURT ACCORDINGLY D IRECTED THE TRIBUNAL TO KEEP THE MATTER ALIVE AND PENDING AWAIT ING THE DECISION OF THE HONBLE SUPREME COURT IN THE PROCEEDINGS ARISIN G FROM THE SUBSTANTIVE ASSESSMENT. 6. IN THE PRESENT CASE, THE LD. CIT(APPEALS) DID NO T AWAIT THE OUTCOME OF THE PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASS ESSMENT AND SINCE THE SAID INFORMATION WAS NOT FORTHCOMING EVEN AFTER A CONSIDERABLE PERIOD FROM THE CONCERNED ASSESSING OFFICER, HE PRO CEEDED TO DISPOSE OF THE APPEALS ARISING FROM THE PROTECTIVE ASSESSME NTS BY HIS IMPUGNED ORDERS AND DELETED THE ADDITION MADE ON PR OTECTIVE BASIS WITHOUT AWAITING THE FINAL OUTCOME OF THE PROCEEDIN GS ARISING FROM THE SUBSTANTIVE ASSESSMENT. KEEPING IN VIEW THE DECISIO N OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS.- SURENDR A GULAB CHAND MODI (SUPRA), WE HOLD THAT THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICE R ON PROTECTIVE ITA NO.1894-99/KOL/2010 A.YS 06-07 & -07-08 DCIT, CC-VII KOL. VS. M/S BAKLIWAL FINVEST , M/S BANSHIIDHAR VYAPAAR & M/S ANKIT F INVEST (P) LTD. PAG E 8 BASIS IN ALL THE THREE YEARS UNDER CONSIDERATION WI THOUT AWAITING FOR THE FINAL OUTCOME OF THE PROCEEDINGS ARISING FROM T HIS SUBSTANTIVE ASSESSMENT. WE, THEREFORE, SET ASIDE THE IMPUGNED O RDERS OF THE LD. CIT(APPEALS) ON THIS ISSUE AND REMIT THE MATTER BAC K TO HIM FOR KEEPING IT ALIVE AND PENDING TILL THE OUTCOME OF TH E PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASSESSMENT. 7. AS REGARDS THE ISSUE RELATING TO THE ADDITIONS M ADE ON ACCOUNT OF COMMISSION INCOME ALLEGEDLY RECEIVED BY THE ASSESSE E FOR GIVING ACCOMMODATION ENTRIES, WE FIND THAT THIS ISSUE IS C ONSEQUENTIAL TO THE ISSUE RELATING TO THE ADDITION MADE ON PROTECTIVE B ASIS ON ACCOUNT OF ACCOMMODATION ENTRIES ALLEGEDLY GIVEN BY THE ASSESS EE-COMPANY TO THE MUMBAI BASED COMPANIES. SINCE THE SAID ISSUE IS REMITTED BACK BY US TO THE LD. CIT(APPEALS), WE ALSO REMIT THE CONSE QUENTIAL ISSUE RELATING TO ADDITION ON ACCOUNT OF COMMISSION INCOM E BACK TO THE LD. CIT(APPEALS) FOR DECIDING THE SAME AFRESH. GROUNDS NO. 1 & 2 OF THE REVENUES APPEALS FOR ALL THE THREE YEARS UNDER CON SIDERATION ARE ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURP OSES. 8. AS REGARDS THE REMAINING THIRD ISSUE RELATING TO THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITION MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS FOUND TO BE MA DE IN THE BANK ACCOUNT OF THE ASSESSEE, WHICH IS INVOLVED IN A.Y. 2005-06 AND 2006- 07, WE FIND THAT THE IMPUGNED CASH DEPOSITS WERE CL AIMED TO BE MADE BY THE ASSESSEE OUT OF CASH BALANCES AVAILABLE IN T HE CASH BOOK ON THE RESPECTIVE DATES AS WELL AS THE SALE PROCEEDS O F SHARES AND IN HIS REMAND REPORT SUBMITTED TO THE LD. CIT(APPEALS), TH IS CLAIM OF THE ASSESSEE WAS ACCEPTED BY THE ASSESSING OFFICER HIMS ELF BY STATING THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WERE VER IFIABLE FROM THE CASH BOOK WHICH WAS PRODUCED BEFORE HIM AND EVEN TH E SALE PROCEEDS OF SHARES REFLECTED IN THE CASH BOOK WERE DULY SUPP ORTED BY SALES INVOICES WHICH WERE ALSO PRODUCED BEFORE HIM. KEEPI NG IN VIEW THIS REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER AC CEPTING THE CLAIM OF THE ASSESSEE REGARDING THE AVAILABILITY OF CASH FOR DEPOSITS MADE IN THE BANK ACCOUNT AFTER VERIFICATION, THE LD. CIT(AP PEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F THE ALLEGED UNEXPLAINED CASH DEPOSITS FOUND TO BE MADE IN THE B ANK ACCOUNT OF THE ASSESSEE AND WE DO NOT FIND ANY INFIRMITY IN TH E IMPUGNED ORDERS OF THE LD. CIT(APPEALS) GIVING RELIEF TO THE ASSESS EE ON THIS ISSUE FOR A.Y. 2005-06 AND 2006-07. EVEN THE LD. D.R. HAS NOT RAISED ANY MATERIAL CONTENTION IN THIS REGARD. WE ACCORDINGLY UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSU E AND DISMISS GROUND NO. 3 OF THE REVENUES APPEALS FOR A.Y. 2005 -06 AND 2006-07. 9. IN THE RESULT, THE APPEALS OF THE REVENUE FOR A. Y. 2005-06 AND 2006-07 ARE TREATED AS PARTLY ALLOWED FOR STATI STICAL PURPOSES, WHILE THE APPEAL OF THE REVENUE FOR A.Y. 2007-08 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1894-99/KOL/2010 A.YS 06-07 & -07-08 DCIT, CC-VII KOL. VS. M/S BAKLIWAL FINVEST , M/S BANSHIIDHAR VYAPAAR & M/S ANKIT F INVEST (P) LTD. PAG E 9 3. WE ADOPT THE DETAILED REASONING MUTATIS MUTANDIS TO RESTORE THE INSTANT APPEALS BACK TO CIT(A) WITH THE SAME DI RECTIONS. HE SHALL PROCEED AFRESH IN LOWER APPELLATE PROCEEDINGS AS PER LAW. 4. THESE REVENUES APPEALS ARE ALLOWED FOR STATISTI CAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT 20 /02/2019 SD/- SD/- ( ) (( ) (DR.A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S )- 20 / 02 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-M/S BAKLIWAL FINVEST (P) LTD.3, MALLICK S TREET, KOLKATA-700007/M/S BANSHIDHAR VYAPAA R (P) LTD. 10, HOSPITAL STREET, KOLKAKTA-72 M/S ANKITA FINVEST (P) LTD. `1, R.N. MUKHERJEE ROAD, KOLKATA-001 2. /REVENUE-DCIT, CENTRAL CIRCLE-VII, KOLKATA 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. 8 ((4, 4, / DR, ITAT, KOLKATA 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ / 4,