BHANWARLAL M. JAIN, MUMBAI V. DCIT- CC- 1(3), MUMBAI

ITA 2669/MUM/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3009 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 01-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SUCHEK ANCHALIYA LD AR S
• Keywords: Bogus purchase; Income from undisclosed sources; Loose papers; Document seized; Principle of natural justice; Opportunity of cross examination; Tangible material; Corroborative evidences; Valuation report; Accommodation entries; Retraction; Documents seized; Reassessment proceedings; TDS; Set aside
• Section: 143(3); 133A; 153A; 43; 13; 22; 148; 132

Judgement Text

SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 1 IN THE INCOME TA X APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUM AR AGGARWAL, AM 1. ./ I.T.A. NO. 2669/MUM/2018 ( / ASSESSMENT YEAR : 2007 - 08 ) & 2. TO 8. ./ I.T.A. NO S . 108 TO 114/MUM/2018 ( / ASSESSMENT YEAR S : 2008 - 09 TO 2014 - 15 ) BHANWARLAL M. JAIN 171, 17 TH FLOOR SILVER AR CH B UILDING PATIT HALL COMPOUND NAPEAN S EA ROAD MUMBAI - 400 006. / VS. D CIT - CENTRAL CIRCLE - 1(3) OLD CGO BLDG. 9 TH FLOOR, ROOM NO.905 PRATISHTHA BHAVAN MUMBAI - 400 020. ./ ./ PAN/GIR NO . AAFPJ - 1924 - R ( / APPELLANT ) : ( / RESPONDENT ) & 9. ./ I.T.A. NO. 3509/MUM/2018 ( / ASSESSMENT YEAR : 2007 - 08 ) & 10. TO 16. ./ I.T.A. NO S . 98 TO 104/MUM/2018 ( / ASSESSMENT YEAR S : 2008 - 09 TO 2014 - 15 ) DCIT - CENTRAL CIRCLE - 1(3) OLD CGO BLDG. 9 TH FLOOR, ROOM NO.905 PRATISHTHA BHAVAN MUMBAI - 400 020. / VS. BHANWARLAL M. JAIN 171, 17 TH FLOOR SILVER ARCH BUILDING PATIT HALL COMPOUND NAPEAN SEA ROAD MUMBAI - 400 006. ./ ./ PAN/GIR NO . AAFPJ - 1924 - R ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI MADHUR AGARWAL , SHRI FENIL BHATT AND SHRI SUCHEK ANCHALIYA - LD.AR S REVENUE BY : SHRI P.C. CHHOTARAY - LD. SPL. COUNSEL SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 2 DATE OF FINAL HEARING : 04/08/2021 DATE OF PRONOUNCEMENT : 06/08/2021 / O R D E R PE R BENCH 1. 1 AFORESAID C ROSS APPEAL S FOR ASSESSMENT YEAR S (AY) 2008 - 09 TO 2 014 - 15 ARISES OUT OF COMMON ORDER DATED 30/10/201 7 PASSED BY LD. COMMISSIONER OF INCOME - TAX (APPEALS) - 47 , MUMBAI, [CIT(A)], APPEAL NO S .CIT(A) - 47 / 314 TO 320 /15 - 16 . THE CROSS - APPEAL FOR AY 2007 - 08 ARISES OUT OF ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX , APPEAL NO, CIT(A) - 47/129/15 - 16 ON 26/03/2018. THE APPEAL FOR AY 2007 - 08 HAS CERTAIN ADDITIONAL GROUNDS OF APPEAL AND THIS APPEAL IS TAKEN UP AT THE END. 1.2 THE ASSESSMENT FOR A Y 2007 - 08 HAS BEEN FRAMED BY LEARNED ASSESSING OFFICER (AO) U/S 143(3) R.W.S. 147 VIDE ORDER DATED 30/03/2015 WHEREAS THE ASSESSMENT FOR AYS 2008 - 09 TO 2013 - 14 HAVE BEEN FRAMED U/S 153A R.W.S. 143(3) VIDE SEPARATE ORDERS, ALL DATED 21/03/2016. THE ASSESSME NT FOR AY 2014 - 15 HAS BEEN FRAMED U/S 143(3) VIDE ORDER DATED 21/03/2016. HOWEVER, THE APPELLATE ORDER IS COMMON ORDER FOR AYS 2008 - 09 TO AY 2004 - 15 AND THE SAME HAS BEEN PASSED ON 30/10/2017. THE APPELLATE ORDER FOR AY 2007 - 08 HAS BEEN PASSED ON 26/03/201 8. THE DATE OF SEARCH ON ASSESSEES GROUP IS 03/10/2013. FOR EASE OF REFERENCE, THE DETAILS OF ASSESSMENT FRAMED BY LOWER AUTHORITIES AND ADJUDICATION THERETO BY LEARNED FIRST APPELLATE AUTHORITY COULD BE TABULATED IN THE FOLLOWING MANNER: - SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 3 NO. ASSESSME NT YEAR (AY) SECTION UNDER WHICH ASSESSMENT FRAMED DATE OF APPELLATE ORDER 1. 2007 - 08 143(3) R.W.S 147 DATED 30/03/2015 26/03/2018 2. 2008 - 09 143(3) R.W.S. 153A DATED 21/03/2016 30/10/2017 3. 2009 - 10 143(3) R.W.S. 153A DATED 21/03/2016 30/10/2017 4. 20 10 - 11 143(3) R.W.S. 153A DATED 21/03/2016 30/10/2017 5. 2011 - 12 143(3) R.W.S. 153A DATED 21/03/2016 30/10/2017 6. 2012 - 13 143(3) R.W.S. 153A DATED 21/03/2016 30/10/2017 7. 2013 - 14 143(3) R.W.S. 153A DATED 21/03/2016 30/10/2017 8. 2014 - 15 143(3) DATED 2 1/03/2016 30/10/2017 1.3 FACTS ARE STATED TO BE PARI - MATERIA THE SAME IN ALL THE YEARS AND IT IS ADMITTED POSITION THAT ADJUDICATION IN ANY ONE YEAR SHALL EQUALLY APPLY TO OTHER YEARS ALSO. FOR THE PURPOSE OF ADJUDICATION, AY 2008 - 09 IS TAKEN AS THE LEAD YEAR. 1.4 WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS, ORAL AS WELL AS WRITTEN, AS ADVANCED DURING THE COURSE OF HEARING BEFORE US. THE ORDERS OF LOWER AUTHORITIES HAVE BEEN GONE THROUGH AND THE RATIO OF VARIOUS JUDICIAL PRONOUCNMEENTS AS CITED DURING TH E COURSE OF HEARING HAS DULY BEEN DELIBERATED UPON. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEALS WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. THE LD. SPL. COUNSEL FOR REVENUE DREW ATTENTION TO THE ORDER OF THIS TRIBUNAL IN RAJENDRA P. JAIN V/S DCIT (IT A NOS.298/MUM/2018 & ORS. DATED 03/05/2019) PASSED BY THIS VERY BENCH TO SUBMIT THAT FACTS ARE IDENTICAL AND THEREFORE, THE SAID DECISION MAY BE FOLLOWED FOR ADJUDICATION OF ALL THESE APPEALS. THE CLARIFICATIONS WERE SOUGHT FROM TIME TO TIME IN THE COURSE OF HEARING WHICH WERE DULY RESPONDED TO BY BOTH THE SIDES. SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 4 1.5 THE GROUNDS TAKEN BY THE ASSESSEE READ AS UNDER: - 1. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICE R U/S. 153A R.W .S. 143(3) OF THE ACT WAS BAD IN LAW AND WAS ALSO IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE INCOME ARISING OUT OF THE SALES AND PURCHASES TRANSACTIONS OF 70 ENTITIES, LISTED O N PAGES 80 TO 83 OF THE IMPUGNED ORDER OF THE C I T(A) [HEREINAFTER REFERRED TO AS 'THE SAID 70 ENTITIES'], BELONG TO AND SHOULD BE ASSESSED IN THE HANDS OF THE APPELLANT. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DETERMINING UNACCOUNTED COM MISSION INCOME OF THE APPELLANT AT RS.4,44,66,591 AS FOLLOWS: SR.NO. PARTICULARS AMOUNT (RS.) 1. ALLEGED COMMISSION @0.02% ON ACCOUNT IMPORT PURCHASES 18,87,809 2. ALLEGED COMMISSION @0.02% ON ACCOUNT LOCAL PURCHASES 27,63,571 3. ALLEGED COMMI SSION INCOME @2.4% OF ALLEGED ACCOMMODATION ENTRIES OF LOANS AND ADVANCES. 2,26,23,851 4. ALLEGED COMMISSION INCOME @ 0.075% ON ALLEGED BOGUS SALES BILLS 1,71,91,360 GROSS UNACCOUNTED COMMISSION 4,44,66,591 4. ON THE FACTS AND CI RCUMSTANCES OF THE CASE AS WELL AS IN L AW, THE LEARNED CIT (A) HAS ERRED IN ENHANCING THE APPELLANT INCOME ON ACCOUNT OF ALLEGED COMMISSION INCOME ON LOCAL PURCHASE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE . 5. THE LEARNED CIT (A) HA S ERRED IN L AW AND ON FACTS IN HOLDING THAT THE DATA FOUND IN THE 4 GB WHITE COLOUR SONY PEN DRIVE, ALLEGEDLY SEIZED BY THE INCOME TAX DEPARTMENT, BELONG TO THE APPELLANT. 6. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN RELYING ON THE CONFESSIO NAL STATEMENTS OF VARIOUS PERSONS WITHOUT GRANTING ANY OPPORTUNITY TO THE APPELLANT TO CROSS EXAMINE THEM. 7. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE RETRACTIONS MADE BY THE APPELLANT AND THE OTHER PERSONS ARE MERELY 'AFTER THOUGHT' WITHOUT APPRECIATING THE TRUE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS BY ESTIMATING THE INCOME OF THE APPELLANT WITHOUT REJECTING THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT. 9. THE L EARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING DEDUCTION MEAGERLY @ 25% TOWARDS EXPENSES AGAINST GROSS UNACCOUNTED COMMISSION INCOME COMPUTED AS PER THE APPELLATE ORDER. 10. THE LEARNED CIT(A) HAS ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO GIVE CREDIT TO THE APPELLANT FOR THE INCOME DISCLOSED IN THE RETURNS OF THE INCOME OF THE SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 5 SAID 70 ENTITIES AND TO GRANT CREDIT FOR TDS/TAXES PAID BY THE SAID 70 ENTITIES WHILE COMPUTING THE INCOME AND TAX LIABILITY OF THE APPELLANT. 11. THE LEARNED C I T(A) HAS ERRED IN LAW AND ON FACTS IN NOT DIRECTING THE ASSESSING OFFICER TO IGNORE THE INCOME DISCLOSED IN THE RETURN OF THE INCOME OF THE APPELLANT. 12. THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD IN LAW AND IS IN VIOLATION OF THE PRINCIPLES OF NATURAL JUST ICE. 1.6 THE GROUNDS TAKEN BY THE REVENUE READ AS UNDER: - 1. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C I T (A), HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ADOPT 0.02% OF THE TRANSACTIONS/ENTRIES AS UNACCOUNTED COMMISSIO N, AS AGAINST 0.275% ADOPTED BY THE ASSESSING OFFICER, WHICH IS BASED ON THE ADMISSION AND AVERMENT BY THE ASSESSEE AND HIS ASSOCIATES IN THEIR STATEMENTS DURING THE COURSE OF ACTION U/S. 132(1) OF THE INCOME TAX ACT, 1961.' 2. 'ON THE FACTS AND CIR CUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A), MUMBAI, HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO TAKE A PERCENTAGE OF 0.02% ON IMPORT PURCHASES, EQUATING IT WITH LOCAL PURCHASES; WITHOUT APPRECIATING THE FACT THAT IMPORT PURCHASES INVOLVE LOT OF DOCUMENTATION AND VETTING BY GOVERNMENT AUTHORITIES, FOR WHICH THE PERCENTAGE OF COMMISSION WOULD BE MUCH HIGHER THAN THE LOCAL PURCHASES.' 3. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A), MUMBAI, HAS ERRED IN DIRECTING TH AT THE EXPENDITURE ON EARNING SUCH COMMISSION FROM ACCOMMODATION TRANSACTIONS BE TAKEN @ 25% OF SUCH COMMISSION AMOUNT, AS AGAINST 10% HELD BY THE ASSESSING OFFICER, WITHOUT RECORDING ANY FAULT IN THE FINDING OF THE ASSESSING OFFICER, AND WITHOUT BRINGING ANY MATERIAL EVIDENCE TO SUPPORT SUCH ADDITIONAL RELIEF GIVEN.' 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(APPEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. AS EVIDENT, THE SOLE SUBJECT MATTER OF CROSS - APPEALS IS ESTIM ATED COMMISSION INCOME. THE ASSESSEE HAS ALSO TAKEN LEGAL GROUNDS. PROCEEDINGS BEFORE LD. ASSESSING OFFICER 2.1 FACTS AS EMANATING FROM CASE RECORD OF AY 2008 - 09 ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL IS STATED TO BE ENGAGED IN THE BUSINESS OF IM PORT, EXPORT AND TRADING OF CUT & POLISHED AND ROUGH DIAMONDS. IT FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AT RS.3.89 LACS. HOWEVER, THE ASSESSEE GROUP WAS SUBJECTED TO SEARCH & SEIZURE ACTION U/S 132 ON 03/10/2013. THE WARRANT NO. 9646 COVERED THE CASE OF THE ASSESSEE & HIS TWO SONS NAMELY SHRI RAJESH B. JAIN AND SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 6 SHRI MANISH B. JAIN. BASED ON THE FINDINGS OF SEARCH ACTION, ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 153A WHEREIN THE ASSESSEE WAS SADDLED WITH ADDITIONS OF RS.591.95 LACS VIDE ORDER DATED 21/03/2016. THIS ADDITION IS THE SOLE SUBJECT MATTER OF DISPUTE BEFORE US. 2.2 DURING ASSESSMENT PROCEEDINGS, IN THE BACKGROUND OF SEARCH ACTION , A FINAL - S HOW CAUSE NOTICE WAS ISSUED BY LD. AO TO THE ASSESSEE ON 16/02/2016 IN WHICH IT WAS ALLE GED THAT THE ASSESSEE ALONG WITH HIS SON WAS OPERATING AND MANAGING 70 BENAM I CONCERNS INCLUDING BENAMI CONCERNS IN THE NAME OF ITS VARIOUS EMPLOYEES AND ASSOCIATES. THROUGH TH E SE ENTITIES, T HE ASSESSEE GROUP IMPO RTED DIAMOND ON BEHALF OF OTHERS AND PROVID ED ACCOMMODATION ENTRIES OF UNSECURED LOANS, BOGUS PURCHASE TO VARIOUS BENEFI CIARIES . THE ATTENTION WAS DRAWN TO NUMEROUS LOOSE PAPERS ( REFERRED TO AS ESTIMATE SHEETS ) CONTAINING HAND WRITTEN ACCOUNTS AS FOUND DURING SEARCH OPERATIONS. THESE SHEETS WERE SEIZED AS PER VARIOUS ANNEXURES AND STATED TO BE ALREADY CONFRONTED TO THE ASSESSEE DURING SEARCH AS WELL AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SIMILAR HAND WRITTEN SHEETS CONTAINING CASH ACCOUNTS WERE STATED TO BE FOUND F ROM ASSESSEES PREMISES. FURTHER, A WHI TE COLOR 4GB P EN DRIVE (PEN DRIVE) CONTAINING NAMES OF THE BENEFICIARIES W H O AVAILED SUCH ACCOMMODATION ENTRIES WAS ALSO FOUND / SEIZED FROM THE ASSESSEES RESIDEN CE. THE PEN DRIVE CONTAINED CALENDAR - YEAR WISE NAMES OF THE BENEFI CIARIES , THE AMOUNT OF CASH, THE DETAILS OF BROKERAG E / COMMISSION ETC. THE PASSWORD OF THE PEN DRIVE WAS STATED TO BE CRACKED WITH THE HELP OF SOFTWARE PROGRAMMERS WHICH ENABLED THE DEPARTMENT TO VIEW THE CONTENTS OF THE SAME. THE PEN DRIVE ALSO CONTAINED COMPLETE DE TAILS OF ANGADIYA ACCOUNT MAINTAINED SINCE 2004 IN ELECTRONIC FORM. SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 7 THE PARALLEL ACCOUNT MAINTAINED ON THE PEN DRIVE PERTAINED TO VARIOUS CONCERNS BEING MANAGED AND CONTROLLED BY THE ASSESSEE GROUP. UPON COMPARISON OF PRINT - OUTS GENERATED AFTER DECRYPTION OF D ATA ON PEN - DRIVE AND CORRELATING THE SAME WITH OTHER DATA GATHERED DURING QUESTION ING OF ASSESSEES VARIOUS EMPLOYEES NAMELY LUNK ARAN K OTHARI, ANIL KICHA, R ITES H SIROYA, ROHIT BIRAWAT & BASANT D . JAIN, IT WAS NOTED THAT THE DATA WAS IDENTICAL. ALL EMPL OYEES ADMITTED IN THEIR RESPECTIVE STATEMENTS THAT PARALLEL CASH ACCOUNTS WERE MAINTAINED WHEREIN THE CHEQUES ENTERED WERE TALLIED WITH CASH RECEIPTS TO OFFER ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES. ON COMPARISON OF HAND WRITTEN SHEETS AS WELL AS A CCOUNTS MAINTAINED ON THE PEN - DRIVE , THE SAME WERE NOTED TO BE IDENTICAL. THE SHEETS WERE IN THE HANDWRITING OF ASSESSEES BROTHE R - IN - LAW AS WELL AS HIS SON AS ADMITTED DURING THE COURSE OF SEARCH. ALL THESE FACTS CONCLUSIVELY PROVED THAT DAILY ACCOUNTS WE RE FIRST WRITTEN MANUALLY ON ESTIMATE SHEETS AND SUBSEQUENTLY THE DATA WAS ENTERED INTO THE PEN - DRIVE. SINCE THE ASSESSEE, IN STATEMENT ON OATH U /S 132(4), ADMITTED COMMISSION OF 2 PAISA PER RS.100 TRANSACTION, IT WAS PROPOSED TO BRING THE SAME TO TAX. 2.3 HOWEVER, THE ASSESSEE SUBMITTED THAT HE WAS OPERATING AND MANAGING ONLY 9 ENTITIES AND NOT THE OTHER ENTITIES AS ALLEGED IN THE NOTICE . THE ASSESSEE ASSERTED THAT THE STATEMENT GIVEN U/S 132(4) WAS WITHOUT CONSENT, NOT VOLUNTARY & TAKEN BY INVESTIGATI ON W ING BY USING THREAT AND COERCION . THE STATEMENTS WERE STATED TO BE GIVEN IN CONFUSED STATE OF MIND. ACCORDINGLY, RETRACTION WAS FILED VIDE AFFIDAVIT DATED 15/03/2014. THE ASSESSEE DENIED HAVING ANY BUSINESS CONNECTION WITH ANY OF THE SO - CALLED EMPLOYEE S / ASSOCIATES. THE ASSESSEE ALSO DENIED SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 8 THE OWNERSHIP OF PEN - DRIVE BY SUBMITTING THAT THE SAME WAS NOT FOUND FROM RESIDENTIAL PREMISES BUT PLANTED FROM OUTSIDE. THE S TATED F ACT W ERE SOUGHT TO BE FORTIFIED BY SUBMITTING THAT THE SEIZURE OF THE PEN - DRI V E WA S SHOWN AFTER ALMOST 6 DAYS I.E. ON 08/10/2013 W HICH COULD HA V E BEEN SEIZED OR INVENTORIZED ON 04/10/2013 ALONG WITH THE INVENTORY MADE FOR CREDIT CARDS, BANK ACCOUNT AND JEWEL LERY ETC. FURTHER , THE SEIZURE OF PEN DRIVE WAS NOT MADE THE PART OF P ANCHNAMA A NNEXURE, OFFICIALLY DRAWN ON 04/10/2013 AND THE ADMISSION ABOUT THE SAME FROM HIS SON SHRI RAJESH JAIN WAS RECORDED FORCIBLY. IN THE ABOVE BACKG ROUND, THE ASSESSEE DENIED INDULGING IN THE ACTIVITY OF PROVIDING ANY ACCOMMODATION BILLS, L OANS ENTRIES TO OTHE R PARTIES AND OPPOSED THE PROPOSED ADDITIONS. 2.4 HOWEVER, EACH AND EVERY OBJECTION AS WELL AS ALLEGATIONS LEVELED BY THE ASSESSEE IN ITS REPLY DATED 24/02/2016 WAS SPECIFICALLY DEALT WITH BY LD. AO IN THE ASSESSMENT ORDER . IT WAS OBSERVED THAT T HE S TATEM ENTS WERE RECORDED IN THE PRESENCE OF INDEPENDENT WITNESSES; THE ASSESSEE HAD GONE THROUGH THE STATEMENTS A ND UNDERSTOOD THE CONTENTS OF THE SAME AS EXPLAINED TO HIM BY HIS SON S HRI MANISH JAIN AS WELL AS HIS EMPLOYEE SHRI BAS A N T JAIN WHO WERE PRESENT AT T H AT TIME OF POINT. THE COPIES OF ALL THE SEIZED MATERIAL W ERE SUPPLIED TO THE ASSESSEE BY THE INVESTIGATION WING IMMEDIATELY AFTER THE SEARCH BUT THE ASSESSEE DELIBERATELY DID NOT FURNISH ANY EXPLANATION ON THE INCRIMINATING MATERIAL PERTAINING TO PARALLEL BOOKS OF ACCOUNTS MAINTAINED ON THE PEN DRIVE AS WELL AS ON HAND WRITTEN CASH SHEETS. IN FACT, THE ASSESSEE REMAINED ABSENT DURING SEARCH PROCEEDINGS FOR FIRST 3 DAYS OF THE SEARCH AND THE ATTITUDE OF THE ASSESSEE WAS COMPLETE NON - COOPERATION. THE SUMMONS WAS NOT COMPLIED WITH AND NO EXPLANATION WAS FURNISHED ON INCRIMINATING SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 9 MATERIAL FOUND DURING THE SEARCH. THE STAND OF THE ASSESSEE WAS FOUND TO BE MISLEADING AS WELL AS CONTRADICTORY SINCE THE ASSESSEE WAS AWARE OF THE ACTIVITIES OF ALL THE DUMMY DIRECTO RS / PARTNERS BUT ON THE OTHER HAND, HE WAS DEMANDING COPIES OF THEIR STATEMENTS AND OPPORTUNITY OF CROSS EXAMINATION. THE DETAILS OF OWNERS OF THE RESIDENTIAL PREMISES IN WHICH THE DUMMY DIRECTORS / PARTNERS / PROPRIETORS OF BENAMI CONCERNS WERE RESIDING HAVE BEEN EXTRACTED ON PAGE 11 OF THE ASSESSMENT ORDER. THE PERUSAL OF THE SAME WOULD REVEAL THAT THE SE RESIDENTIAL PREMISES WERE OWNED PRIMARILY BY THE ASSESSEE GROUP IN DIFFERENT NAMES / ENTITIES. IN REPLY TO QUESTION NOS.31 & 32 OF THE STATEMENT, SHRI R AJESH B. JAIN CA TEGORICALLY ADMITTED ABOUT FINDING AND CONSE QUENT SEIZURE OF THE PEN - DRIVE. NO SUCH COMMENTS WERE MADE BY THE PANCHAS THAT THE SAID INCRIMINATING MATERIAL WAS NOT FOUND FROM THE RESIDENTIAL PREMISES. IMPORTANTLY, IF THE PEN DRIVE WAS PLANTE D BY THE SEARCH TEAM, THEN HOW COME THE IDENTICAL DATA WAS FOUND IN THE OTHER PEN DRIVE SEIZED FROM ONE OF HIS EMPLOYEE SHRI ROHIT BIRAWAT WHO WAS APPREHENDED WHILE ATTEMPTING TO FLEE TO RAJASTHAN WITH THE CRUCIAL DATA ON PEN - DRIVE ? 2.5 SO FAR AS THE FACT UAL MATRIX WA S CONCERNED, MARKET INFORMATION AS AVAILABLE WITH INVESTIGATION WING, MUMBAI REVEALED THAT SHRI BHANWARLAL J AIN AND HIS SON SHRI RAJESH B. JAIN MANAGED , CONTROLLED AND OPERATED NUMEROUS CONCERNS IN THE NAMES OF VARIOUS PERSONS WHO WERE SHOWN A S NAME - SAKE DIRECTORS, PARTNERS AND PROPRIETORS OF THESE ENTITIES. THROUGH THESE ENTITIES, THE GROUP PRO V IDED ACCOMMODATION ENTRIES OF LOANS AND ADVANCES AND SALES TO VARIOUS PARTIES / BENEFICIARIES AGAINST CERTAIN COMMISSION . THE INQUIRY REVEALED COMMON F EATURES O F THESE CONCERNS HAVING SIMILAR BUSINESS TRAITS LIKE SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 10 HIGH TURNOVER, ASSETS IN THE SHAPE OF LOANS & ADVANCES, DEBTORS WITH MATCHING CREDITORS AND NO PAYMENT OF TAXES. AFTER C OLLATING THE DATA FROM DIFFERENT AGENCIES LIKE CUSTOMS DEPARTMENT , BHARAT DIAMONDS BOURSES, THESE ENTITIES WERE IDENTIFIED AND ARRANGED IN A GROUP BASED ON SIMILAR PARAMETER LIKE COMMON ADDRESS, DIRECTORS ETC. THE VARIOUS ENTITIES OF SHRI BHANWARLAL JAIN WERE FOUND TO BE H AVING SIMILAR CHARACT ERISTICS / FEATURES AS NOTED ABOVE. THE SAME LED TO SEARCH PROCEEDINGS ON THE ASSESSEE O N 03 /10/2013 WHEREIN INCRIMINATING DOCUMENTS LIKE HAND WRITTEN SHEETS CONTAINING PA RALLEL ACCOUNTS, IDENTICAL DATA IN VARIOUS COMPUTER SYSTEMS AT UNDISCLOSED OFFICES OF THE ASSESSEE WITH SIMILAR DATA ON P EN DRIVES OF THE EMPLOYEES WHO WERE CAUGHT AND APPREHENDED BY THE INVESTIGATING TEAM AND A WHITE COLOR PEN - DRIVE CONTAINING CALENDAR YEAR - WISE PARALLEL ACCOUNTS IN FINANCIAL ACCOUNTING SOFTWARE SEIZED AT ASSESSEES RESIDENCE , WAS FOUND AND SEIZED. 2.6 SHR I BHANWARLAL JAIN, IN STATEMENT ON OATH U/S 132(4), CATEGORICALLY ADMITTED ABOUT HIS ENGAGEMENT IN PROVIDING ACCOMMODATION ENTRIES TH R OUGH 70 BENAMI CONCERNS. SIMILAR STATEMENTS WERE RECORDED FROM ALL EMPLOYEES WHEREIN THEY ADMITTED THAT THEY ASSISTED / AB ETTED SHRI BHANWARLAL JAIN IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. THEY ALSO ADMITTED THAT ALL THESE CONCERNS WERE ACTUALLY CONTROLLED AND MANAGED BY SHRI BHANWARLAL JAIN AND HIS SON SHRI RAJESH BHANWARLAL JAIN AND THEY WERE MERE DUMMY DIRECTOR S / PARTNERS / PROPRIETORS IN VARIOUS CONCERNS. 2.7 IT WAS FURTHER NOTED THAT THE PEN - DRIVE AS WELL AS LOOSE SHEETS WERE FOUND AND SEIZED FROM ASSESSEES RESIDENTIAL PREMISES AND THIS FACT WAS DULY ADMITTED BY THE ASSESSEE AS WELL AS HIS SON IN STATEMENT SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 11 ON OATH U/S 132(4). THE COMPLETE CORRELATION WAS ESTABLISHED BETWEEN THE PARALLEL BOOKS OF ACCOUNTS FOUND ON THE WHITE COLOR 4GB PEN DRIVE WITH THE REGULAR BOOKS OF ACCOUNTS OF THE 70 CONCERNS MANAGED AND OPERATED BY THE ASSESSEE. 2.8 PROCEEDING FURTHER , DURING THE COURSE OF SEARCH ON THE BASIS OF ENQUIRIES CONDUCTED ON EMPLOYEES OF SHRI BHANWARLAL JAIN AND FAMILY, NEW PREMISES WERE DISCOVERED AT (I) 16, MOHAN BUILDING, JSS ROAD, GIRGAUM, MUMBAI; (II) PLOT NO.233, GF, NAVKAR HOUSE, VI T THAL BHAI PATEL ROA D, GIRGA ON , MUMBAI; (III) 210, JSS ROAD, KALEWADI CORNER, GIRGAON , MUMBAI . THESE PREMISES WERE SECRET PREMISES WHICH WERE NOT DISCLOSED TO ANY GOVERNMENT AGENCIES WITH A VIEW TO CARRY OUT THE AFORESAID SUSPICIOUS ACTIVITIES. THE BOOKS OF HALF OF THE CONCER N S WERE STATED TO BE MAINTAINED AT PREMISES NO. (I) WHEREAS THE BOOKS OF THE OTHER HALF CONCERNS WERE STATED TO BE MAINTAINED AT PREMISES NO. (II). NUMEROUS DOCUMENTS IN THE SHAPE OF PAN AND OTHER IDENTIFICATION PROOF OF NAME - SAKE DIRECTORS / PARTNERS / PR OPRIETORS ALONG WITH OLD STAMP PAPERS, BLANK SIGNED CHEQUE BOOKS WERE FOUND AND SEIZED FROM THESE PREMISES. 2.9 SHRI BASANT D JAIN, A MOST TRUSTED EMPLOYEE OF THE ASSESSEE, WHO WORKED IN THESE BACK - OFFICE S , W AS EXAMINED ON OATH IN WHICH HE ADMITTED THAT BANK TRANSACTIONS OF ALL THE COMPANIES WAS BEING DONE FROM THESE OFFICES AND THE DIRECTORS ETC. OF THE CONCERNS WOULD COME AND SIGN THE CHEQUE BOOKS AS PER THE DIRECTION OF SHRI BHANWARLAL JAIN. ANOTHER SIGNIFICANT FEATURE NOTED BY LD. AO WAS THAT THE BOOK S OF ACCOUNT OF ALL THESE CONCERNS WERE BEING MAINTAINED IN ONE REGISTER AND SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 12 ON ONE COMPUTER ONLY. THE BOOKS OF ACCOUNTS OF MOST OF THE CONCERNS WERE AUDITED BY COMMON AUDITOR. 2.10 DURING THE COURSE OF SEARCH, MANY INSTANCES WERE REPORTED BY THE SEARCH TEAM WHICH INDICATED THAT THERE WAS AN ATTEMPT BY THE ASSESSEE TO DESTROY THE PARALLEL ACCOUNTS / INCRIMINATING MATERIAL. IN ONE SUCH INSTANCES, THE SEARCH TEAM APPREHENDED AN EMPLOYEE NAMELY ROHIT BIRAWAT AT CST TERMINUS, MUMBAI WHEN HE WAS ATTEMPTING TO FLEE FROM MUMBAI TO RAJASTHAN WITH INCRIMINATING MATERIAL. THREE PEN DRIVES WERE FOUND FROM HIS POSSESSION. THE DATA IN PEN DRIVE WAS FOUND TO BE SIMILAR TO DATA FOUND IN THE PEN DRIVE FOUND AND SEIZED FROM ASSESSEES PREMISES. 2.11 PROCEEDING FURTHER, MO DUS OPERANDI O F PROVIDING ACCOMMODATION ENTRIES WAS ELABORATELY DISCUSSED BY LD. AO IN PARA 4.6 . THE SAID MODUS OPERANDI WAS DULY ADMITTED BY THE EMPLOYEE - CUM - NAMESAKE DIRECTORS / PARTNERS / PROPRIETORS OF SHRI BHANWARLAL JAIN GROUP IN THE IR RESPECTIVE STA TEMENTS. THE RELEVANT EXTRACT OF THE SAME HAS ALREADY BEEN REPRODUCED AS WELL AS NOTED BY LD.AO IN THE ASSESSMENT ORDER. ALL THESE PERSONS MADE CATEGORICAL ADMISSION OF THE FACT THAT ALL THE ENTITIES WERE BEING MANAGED AND CONTROLLED BY SHRI BHANWARLAL JAI N GROUP AND THEY WERE MERELY ACTING AS NAME - SAKE OR DUMMY DIRECTORS / PARTNERS / PROPRIETORS IN THESE ENTITIES AGAINST SALARY. 2.12 IN FACT, THE ASSESSEE, HIMSELF, IN STATEMENT RECORDED U/ S 132(4) ON 11/10/2013 AT 16, MOHAN BU ILDING, JSS ROAD, GIRGAUM , M UMBAI CATEGORICALLY ADMITTED THAT HE WAS CONTROLLING THE OVERALL BUSINESS OF ALL SUCH CONCERNS. THE DETAILS OF ALL THESE ENTITIES HAVE SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 13 ALREADY BEEN ENUMERATED IN THE STATEMENT AND THE SAME HAS ALSO BEEN EXTRACTED IN THE ASSESSMENT ORDER . 2.13 A SURVEY U/S 133A WAS ALSO CONDUCTED AT DC - 3060/DC - 3050, BHARAT DIAMOND HOUSE, BKC BANDRA, (E), MUMBAI IN THE CASE OF M/S RATAN & CO. AND M/S MAMTA GEMS. THE STATEMENT OF SHRI RAJESH BHANWARLAL JAIN WAS RECORDED THEREIN . IT TRANSPIRED THAT THESE TWO ENTITIES WERE RUN BY SHRI RAJESH B. JAIN AND HER MOTHER. SEVERAL RUBBER STAMPS AND DECLARATION PAPERS READY FOR DELIVERY OF IMPORT PARCEL OF ABOUT 30 DIFFERENT CONCERNS WERE FOUND. SIMILARLY, BLANK LETTER HEADS OF 31 DIFFERENT CONCERNS WERE FOUND AT THE TIME OF SURVEY. IT W AS ADMITTED THAT THE BLANK LETTER HEADS WERE UTILIZED FOR EARLY RELEASE OF PARCEL FROM CUSTOMS RELATING TO THESE 30 CONCERNS WHICH LED TO CONCLUSION THAT THESE CONCERNS WERE OPERATING FROM SAME PREMISES. 2.14 A WHITE COLORED 4 GB PEN DRIVE WAS FOUND FROM ASSESSEES PREMISES. IT CONTAINED CALENDAR YEAR - WISE ACCOUNTS ON FINANCIAL ACCOUNTING SOFTWARE. SHRI RAJESH BHANWARLAL JAIN MADE ADMISSION OF THE FACT THAT THE PEN DRIVE WAS FOUND FROM THE RESIDENTIAL PREMISES AT 171, SILVER ARCH APARTMENT, PETIT HALL COMP OUND, NEPEAN SEA ROAD, MUMBAI. THE SAID FACT WAS ALSO ADMITTED BY SHRI BHANWARLAL JAIN IN STATEMENT ON OATH U/S 132(4) ON 11/10/2013. IT WAS ALSO ADMITTED THAT THE ENTRIES IN THE ESTIMATE SHEETS WERE SAME / IDENTICAL TO THOSE FOUND IN THE WHITE COLORED SON Y 4GB PEN DRIVE. THE ESTIMATE SHEE TS WERE IN THE NATURE OF SQUARE - OFF TRANSACTIONS WHEREIN CASH RECEIVED FROM ONE PARTY WAS PAID BACK TO ANOTHER PARTY THROUGH ANGARIA ACCOUNT AS PER THE MARKET PRACTICE AGAINST ISSUE OF CHEQUE IN THE NAME OF THE SAID PARTY. SUCH TRANSACTIONS WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 14 BENAMI CONCERNS BEING MANAGED AND CONTROLLED BY HIM. IN RESPONSE TO QUESTION NO. 34, SHRI BHANWARLAL JAIN CONFIRMED OF GOING THROUGH THE ENTIRE EXCEL PRINT OUTS OF PARALLEL ACCOUNTS MAINT AINED IN THE ABOVE - MENTIONED PEN - DRIVE. HE ALSO CONFIRMED THAT THE TRANSACTIONS RECORDED IN THE SAID DOCUMENT PERTAINED TO BUSINESS ACTIVITIES OF BENAMI CONCERNS MANAGED AND CONTROLLED BY HIM. 2.15 AT PARA 4.13 OF THE ORDER, IT WAS NOTED BY LD. AO THAT THE CONDUCT OF THE ASSESSEE WAS IMMENSELY NON - COOPERATIVE AND HE TRIED TO DERAIL THE PROCESS OF INVESTIGATION. SO MUCH SO, THE ASSESSEE REMAINED ABSENT FROM HIS RESIDENCE IN THE FIRST 3 DAYS SINCE THE COMMENCEMENT OF SEARCH ON 03/10/2013 AND DELIBERATELY A VOIDED COMING BACK TO HIS RESIDENTIAL PREMIS ES THEREBY SHOWING COMPLETE NON - COOPERATION WITH THE INCOME TAX AUTHORITIES. EVEN AFTER COMING BACK, HE DID NOT COOPERATE AND KEPT EVADING THE QUESTIONS. 2.16 ON THE BASIS OF AFORESAID FACTS, FOLLOWING CONCLUSI ONS WERE DRAWN BY LD. AO IN PARA 4.14 OF THE ORDER: - LUNKARAN PARASMAL KOTHARI, ANIL KHICHA, RAJESH CHOPRA, RITESH SFROYA, ROHIT BIRAWAT, BASANT D JAIN, SHREYANSH L JAIN, VIVEK NORATMAL JAIN,MAHAVIR MANGALCHAND JAIN, RAMNIWAS CHOYAL, GAUTAM KUMOT, RAJESH CHOPRA F ATUL LADDHA ARE DUMMY DIRECTORS, PARTNERS AND PROPRIETORS. THEY HAVE BEEN MADE NAME SAKE DIRECTOR, PARTNER AND PROPRIETOR AT THE DIRECTION AND INSTRUCTION OF BHANWARLAL JAIN, RAJESH B, JAIN ARE MERELY THEIR EMPLOYEES WHO RECEIVE SALARY MOSTLY IN CA SH FROM THEM WHICH IS MORE OR LESS EQUIVALENT TO THE PROFIT SHOWN IN THE CONCERNS IN WHICH THEY ARE DUMMY DIRECTOR/PARTNER/PROPRIETOR. ALL SUCH DUMMY DIRECTORS, PARTNERS AND PROPRIETORS BELONG TO RAJASTHAN AND HAVE BEEN KNOWN TO AND WORKING FOR BHANWARLAL JAIN FOR MANY YEARS AND THEY RESIDE IN RESIDENCES WHICH ARE IN THE NAMES OF BHANWARLAL JAIN, RAJESH JAIN AND THEIR FAMILY MEMBERS OR THE CONCERNS IN WHICH BHANWARLAL JAIN, RAJESH .JAIN AND THEIR FAMILY MEMBERS ARE DIRECTORS, PARTNERS AND PROPRIETORS. ALL S UCH CONCERNS IN WHICH THESE PERSONS ARE SHOWN AS DIRECTORS, PARTNERS AND PROPRIETORS OPERATE FROM THE PREMISES OWNED BY BHANWARLAL JAIN AND HIS FAMILY MEMBERS OR THE CONCERNS IN WHICH BHANWARLAL JAIN, RAJESH B. JAIN AND THEIR FAMILY MEMBERS ARE DIRECTORS, PARTNERS AND PROPRIETORS. SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 15 SINCE THEY ARE EMPLOYEE OF BHANWARLAL JAIN , THEY HAVE SUPERFICIAL KNOWLEDGE ABOUT BUSINESS ACTIVITY OF THE CONCERNS BUT NO IN - IN - DEPTH KNOWLEDGE OF THE SAME. IN MANY OF THE CASES, THEIR WIVES ARE ALSO SHOWN AS EMPLOYEES OF BHANWA RLAL JAIN AND RAJESH JAIN AND DRAW SALARY FROM VARIOUS CONCERNS MANAGED AND CONTROLLED BY BHANWARLAL JAIN & HIS FAMILY WITHOUT RENDERING ANY SERVICE. ALL THE DUMMY DIRECTORS/PARTNERS/PROPRIETORS SIGN BLANK CHEQUES AND HAND THEM OVER TO BHANWARLAL JAIN AND RAJESH B.JAIN. THE BOOKS OF ACCOUNTS AND BANK ACCOUNTS OF ALL SUCH CONCERNS ARE MAINTAINED AT THE DIRECTION OF BHANWARLAL JAIN AND RAJESH B JAIN. THE BOOKS OF ACCOUNTS OF ALL THE CONCERNS, BLANK SIGNED CHEQUES, OLD STAMP PAPERS ETC WERE FOUND TOGETHER AT O NE PLACE - PLOT NO 233, GROUND FLOOR, NAVKAR HOUSE, VITTHAL BHAI PATEL ROAD, GIRGAUM (NEAR PRARTHANA SAMAJ, VP ROAD), MUMBAI - O4 AND 16 MOHAN BUILDING, JSS ROAD, KHANDAWADI POLICE STATION, GIRGAUM, MUMBAI - THE 2 BACK OFFICES DISCOVERED DURING SEARCH. DOCUME NTS WERE FOUND CONTAINING THE NAME OF VARIOUS SUCH CONCERNS INCLUDING THOSE WHO ARE SHOWN AS THEIR DIRECTORS, PARTNERS AND PROPRIETORS, THEIR PANS, BANK NOS OF THE SAID CONCERNS AND THE OPENING BALANCES IN THE SAME. IT PROVES THAT THE NAMES OF THE CONCERNS AND PERSONS APPEARING IN SUCH SHEETS ARE MANAGED AND CONTROLLED BY ONE PERSON/ FAMILY. ANIL MANDAWAT WHO AUDITS 44 OF THESE CONCERNS HAS STATED THAT THE BOOKS OF ACCOUNTS OF THE SAID CONCERNS ARE AUDITED ON THE DIRECTION OF LUNKARAN PARASMAL KOTHARI WHO I S AN EMPLOYEE OF BHANWARLAL JAIN. CA HAS ADMITTED THAT HE MERELY PUTS HIS SIGNATURES ON THE AUDIT REPORTS OF THESE CONCERNS WITHOUT VERIFYING THEIR BOOKS OF ACCOUNTS. THIS FURTHER PROVES THAT THE AFFAIRS OF THESE CONCERNS ARE MANAGED AND CONTROLLED BY BHAN WARLAL JAIN. BHANWARLAL JAIN HAS ALSO ADMITTED THAT ALL THE CONCERNS (TOTALING TO 70) IN THE NAMES OF VARIOUS PERSONS ARE ACTUALLY CONTROLLED AND MANAGED BY HIM. 2.17 THE AFFIDAVIT OF RETRACTION AS FILED BY THE ASSESSEE ON 27/05/2014 I.E., ALMOST AFTER 8 MONTHS OF THE COMMENCEMENT OF SEARCH WAS HELD TO BE MERE AFTER - THOUGHT AND A TUTORED STATEMENT. SIMILAR RETRACTION AFFIDAVITS AS FILED BY OTHER ASSOCIATES - CUM - EMPLOYEES WERE HELD TO BE NOTHING BUT PLANNED MOVE IN TANDEM TO THWART THE PROCESS OF INVESTIGAT ION. GLARING CONTRADICTIONS AS WELL AS SIMILARITIES WERE FOUND IN THE RETRACTION AFFIDAVITS. THE SAID RETRACTION, IN THE LIGHT OF OVERWHELMING / CLINCHING EVIDENCES AS FOUND DURING THE COURSE OF SEARCH ACTION AS WELL AS IN THE LIGHT OF VARIOUS JUDICIAL PRE CEDENTS, WAS REJECTED SINCE THE SAME WAS TERMED AS NOTHING BUT WELL - PLANNED DEVICE TO FRUSTRATE THE EFFORTS OF THE DEPARTMENT TO UNEARTH UNACCOUNTED INCOME. SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 16 2.18 AFTER DECIPHERING THE ACCOUNTS OF THESE CONCERNS, IT TRANSPIRED THAT THE ASSESSEE MADE IMPO RT IN THE NAME OF BENAMI CONCERNS ON BEHALF OF REAL IMPORTERS. THE IMPORT ED GOODS W ERE HANDED OVER TO THE REAL IMPORTERS AGAINST CASH. THE FICTITIOUS STOCK STANDING IN THE BOOKS WAS TRANSFERRED BY ISSUING BOGUS PURCHASE BILLS AGAINST RECEIPT OF CHEQUE / RT GS. THIS CHEQUE TRANSACTION WOULD BE REFLECTED IN THE REGULAR BOOKS. THE CHEQUE / RTGS WOULD BE USED TO MAKE PAYMENT TO THE PARTIES FROM WHOM IMPORTS WERE MADE. AGAINST THE CHEQUE SO RECEIVED AGAINST ISSUANCE OF PURCHASE BILLS, THE PARTIES WOULD BE RETURNE D EQUIVALENT CASH WHICH WOULD BE RECEIVED FROM REAL IMPORTERS. IT WOULD ALSO BE SOURCED FROM BUILDERS WHO GENERATE CASH ON ACCOUNT OF RECEIPT OF ON - MONEY ON SALE OF FLATS. THE CHEQUE RECEIVED BY THE BENAMI ENTITIES WOULD ALSO BE USED TO ADVANCE ACCOMMODATI ON ENTRY OF LOANS/ ADVANCES TO BUILDERS OR OTHER PERSONS DESIROUS OF TAKING SUCH CHEQUE ENTRY. REVERSAL OF LOAN ENTRY TAKES PLACE WHEN CHEQUE IS RETURNED BACK BY THE BENEFICIARY AGAINST RECEIPT OF CASH. IN EFFECT, THE ASSESSEE GROUP PROVIDED THREE TYPES OF ACCOMMODATION ENTRIES VIZ. (I) ACCOMMODATION ENTRY FOR LOANS AND ADVANCES; (II) ACCOMMODATION ENTRY FOR BOGUS PURCHASES; (III) IMPORTS MADE ON BEHALF OF REAL IMPORTERS. 2.19 FINALLY, IN THE BACKDROP OF AFORESAID FACTS, THE FOLLOWING CONCLUSIONS WERE DRAW N AT PARA - 6 OF THE ORDER: - * T HAT THE ASSESSEE IS OPERATING AND MANAGING 70 CONCERNS IN THE NAMES OF DUMMY DIRECTORS, PARTNERS AND PROPRIETORS. ALL SUCH DUMMY DIRECTORS, PARTNERS AND PROPRIETORS HAVE ADMITTED IN THEIR RESPECTIVE STATEMENTS THAT THEY ARE A CTUALLY E MPLOYEES OF THE ASSESSEE AND THE LATER MANAGES AND CONTROLS THE BUSINESS OF THE RESPECTIVE CONCERNS. * THAT THE BOOKS OF ACCOUNT OF ALL THE CONCERNS IN WHICH THE ASSESSEE IS ADMITTEDLY A DIRECTOR, PARTNER AND PROPRIETOR WERE FOUND FROM 16 MOHAN BU ILDING, JSS ROAD, GIRGAUM MUMBAI, ALONG WITH THE BOOKS OF ACCOUNTS OF OTHER CONCERNS WHICH ARE MANAGED AND CONTROLLED BY THE ASSESSEE. SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 17 * THAT IT HAS ALSO BEEN ACCEPTED BY THE ASSESSEE IN HIS STATEMENT RECORDED UNDER SECTION 132 THAT THE BOOKS OF ACCOUNTS A RE MAINTAINED IN 16 MOHAN BUILDING, 3SS ROAD, AND 210 JSS ROAD, GIRGAUM, MUMBAI. SINCE THE ENTIRE BUSINESS IS LOOKED AFTER BY THE ASSESSEE ASSISTED BY HIS SON RAJESH B JAIN, THEREFORE THE ASSESSEE WAS TAKEN TO THE ACTUAL BUSINESS PREMISE WHERE THE BOOKS OF ACCOUNT WERE FOUND SO THAT THE SAME COULD BE CONFRONTED TO HIM. * THAT THE PEN DRIVE AND THE LOOSE SHEET CONTAIN THE PARALLEL BOOKS OF ACCOUNTS OF THE ASSESSEE. THE PEN DRIVE CONTAINS DETAILS OF THE CONCERNS IN WHICH THE ASSESSEE IS ADMITTEDLY A PARTNER D IRECTOR AND PROPRIETOR. * THAT THE DEPARTMENT HAS ALSO ESTABLISHED CORRELATION BETWEEN THE PARALLEL ACCOUNTS MAINTAINED ON THE PEN DRIVE AND THE REGULAR BOOKS OF ACCOUNTS OF CONCERNS MANAGED AND CONTROLLED BY THE ASSESSEE. * THAT THE MANNER IN WHICH THE AC COMMODATION ENTRY IS PROVIDED BY THE ASSESSEE I.E THE MOVEMENT OF CASH AGAINST CHEQUE AND VICE VERSA. * THAT THE DEPARTMENT MAINTAINS THAT THE ASSESSEE THROUGH HIS VARIOUS CONCERNS GENUINELY IMPORTS DIAMONDS BUT THEY ARE ISSUED TO THE REAL IMPORTERS OUT OF BOOKS AND ACCOMMODATION ENTRIES OF BOGUS PURCHASES AND LOANS AND ADVANCES ARE ISSUED THROUGH A COMPLEX WEB OF TRANSACTIONS INCLUDING BANKS AND ANGARIAS AGAINST THIS BOGUS STOCK STANDING IN THE BOOKS OF THE CONCERNS MANAGED AND CONTROLLED BY THE ASSESSEE. * THAT DURING SEARCH FROM THE BACK OFFICE OF THE ASSESSEE REGISTERS WERE SEIZED WHICH MAINTAIN THE DETAILS PERTAINING TO REAL IMPORTERS TO WHOM IMPORTED DIAMONDS ARE ISSUED OUT OF BOOKS. * THAT THE ENTIRE MODUS OPERANDI EMPLOYED BY THE ASSESSEE OF PROVIDIN G ACCOMMODATION ENTRY WAS ADMITTED BY THE IMPORTANT EMPLOYEES OF THE ASSESSEE INCLUDING LUNKARAN PARASMAL KOTHARI. IN VIEW OF THE FACTS DISCUSSED ABOVE AND THE CIRCUMSTANCES AND OTHER OVERWHELMING CORROBORATIVE EVIDENCES, IT IS CONCLUSIVELY ESTABLISHED AND PROVED BEYOND DOUBT THAT THE ASSESSEE IS MANAGING AND CONTROLLING THESE 70 BENAMI ENTITIES AS ALSO ADMITTED BY HIM IN THE STATEMENTS RECORDED U/S.132(4) DURING THE COURSE OF SEARCH. 2.20 ARMED WITH THESE FINDINGS, LD. AO PROCEEDED TO ESTIMATE THE COMMIS SION E ARNED BY THE ASSESSEE THROUGH ALL THESE ENTITIES BY CARRYING OUT THESE TRANSACTIONS. AFTER CONSIDERING MATERIAL ON RECORD, ESTIMATE SHEETS AND STATEMENTS MADE DURING THE COURSE OF SEARCH PROCEEDINGS, THE SAID ESTIMATION WAS MADE IN THE FOLLOWING MANN ER: - NO. NATURE OF TRANSACTION ESTIMATED RATE 1. IMPORT TRANSACTIONS BY ASSESSEE ON BEHALF OF OTHERS 27.5 PAISA PER RUPEES 100 OR 0.275 % 2. ACCOMMODATION ENTRIES OF BOGUS PURCHASES PROVIDED BY ASSESSEE 7.5 PAISA PER RUPEES 100 OR 0 .075% SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 18 3. BOGUS UNSECU RED LOANS PROVIDED BY ASSE SSEE 20 PAISA PER RUPEES 100 PER MONTH OR 0 .20% PER MONTH OR 2.40% PER ANNUM THE COMMISSION SO EARNED WAS TO BE REDUCED BY 10% SINCE THE ASSESSEE WOULD HAVE INCURRED CERTAIN EXPENSES LIKE STATIONERY, CONVEYANCE, OFFICE EXPENSES , RENT ETC. WHILE EARNING THE AFORESAID UNDISCLOSED INCOME. THE ADDITION SO ESTIMATED FOR THE YEAR UNDER CONSIDERATION AGGREGATED TO RS.657.72 LACS. AFTER PROVIDING ALLOWANCE OF 10%, THE NET COMMISSION THUS WORKED OUT TO BE RS.591.95 LACS WHICH WAS ADDED T O THE RETURNED INCOME OF RS.3.89 LACS TO ARRIVE AT TOTAL INCOME OF RS.595.84 LACS. APPELLATE PROCEEDINGS BEFORE LD. CIT(A) 3.1 AGGRIEVED, T HE ASSESSEE CONTESTED THE STAND OF LD.AO BY WAY OF WRITTEN SUBMISSIONS WHICH HAVE ALREADY BEEN EXTRACTED IN PARA N O.12 OF THE IMPUGNED ORDER. IN THE SAID SUBMISSIONS, THE ASSESSEE, INTER - ALIA , DENIED THE OWNERSHIP OF THE PEN - DRIVE AND ALLEGED THAT IT WAS BROUGHT FROM OUTSIDE AND PLANTED AT ASSESSEES PREMISES AT THE FAG - END OF INORDINATELY EXTENDED SEARCH OPERATION. T HE ASSESSEE ALSO CONTROVERTED THE CONFESSIONAL STATEMENTS MADE DURING THE COURSE OF SEARCH PROCEEDINGS. THE ADDITIONS MADE BY LD.AO WERE ASSAILED FROM DIFFERENT ANGLES. 3.2 KEEPING IN VIEW THE ASSESSEES SUBMISSIONS, A REMAND REPORT WAS SOUGHT FROM LD. AO DURING THE COURSE OF APPELLATE PROCEEDINGS . IT WAS REITERATED BY LD. AO THAT INNUMERABLE PAPERS IN THE SHAPE OF ESTIMATE SHEETS CONTAINING HAND WRITTEN ACCOUNTS WERE FOUND AND SEIZED. A WHITE COLOR 4GB SONY PEN DRIVE CONTAINING THE NAME OF THE SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 19 BENEFICIARI ES WHO AVAILED ACCOMMODATION ENTRIES WAS FOUND / SEIZED FROM ASSESSEES RESIDENCE CONTAINING CALENDAR YEAR - WISE NAME OF THE BENEFICIARIES, THE AMOUNT OF CASH, T HE D ETAIL OF BROKERAG E / COMMISSION ETC. THE PEN DRIVE WAS PASSWORD PROTECTED WHICH WAS CRACKED WITH THE HELP OF PROFESSIONAL SOFTWARE PROGRAMMERS WHICH ENABLED THE DEPARTMENT TO VIEW THE CONTENTS THEREIN. THE PEN DRIVE CONTAINED COMPLETE DETAILS OF ANGARIA ACCOUNT MAINTAINED BY THE ASSESSEE AND HIS FAMILY SINCE 2004 IN ELECTRONIC FORM. THE PRINT - OUT S OF THE CASH ACCOUNT WERE ALSO SUBMITTED A LONG WITH THE REMAND REPORT. AFTER CORRELATING THE PRINT OUT WITH HAND WRITTEN SHEETS , IT WAS FOUND THAT THE DATA WAS IDENTICAL. THESE SHEE T S WERE IN THE HANDWRITING OF SHRI LUNKARAN KOTHARI AND SHRI RAJESH JAIN A S ADMITTED BY THEM IN STATEMENT U/S 132(4). THESE FACTS WOULD CONCLUSIVELY PROVE THAT THE ESTIMATES SHEETS WERE FIRST WRITTEN MANUALLY AND SUBSEQUENTLY ENTERED INTO THE PEN DRIVE. THE PERCENTAGE AS ESTIMATED WAS STATED TO BE BASED O N A DMISSION MADE IN THE STATEMENT U/S 132(4) AS WELL AS ON THE BASIS OF HAND WRITTEN ESTIMATION SHEETS FOUND AND SEIZED. THE REMAND REPORT WAS DULY CONFRONTED TO THE ASSESSEE WHICH WAS AGAIN DISPUTED BY THE ASSESSEE. FINALLY, ALL THIS MATERIAL WAS DULY CONSIDERED BY LD. CIT(A) DU RING THE APPELLATE PROCEEDINGS. THE INCRIMINATING MATERIAL INCLUDING HAND WRITTEN ESTIMATION SHEETS AS WELL AS PRINT OUTS TAKEN FROM THE PEN - DRIVE WAS ALSO APPRECIATED. 3.3 THE VARIOUS FACETS OF THE CASE AS ELABORATED BY LD. AO INCLUDING STATEMENTS MADE DURING THE COURSE OF SEARCH ACTION WERE TAKEN NOTE - OF IN PARAS 18 TO 43 OF THE IMPUGNED ORDER AND FOLLOWING CONCLUSIONS WERE ULTIMATELY DRAWN IN THE IMPUGNED ORDER : - SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 20 1. THE 70 GROUP CONCERNS MANAGED AND CONTROLLED BY THE APPELLANT ARE NOT ENGAGED IN ANY GENUINE BUSINESS OF DIAMOND TRADING. 2. THE 70 GROUP CONCERNS OF THE APPELLANT ARE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES IN A SYSTEMATIC AND ORGANIZED MANNER. 3. THE VARIOUS GROUP CONCERNS ARE BEING USED BY THE APPELLANT FOR THE ENTR Y OPERATOR'S BUSINESS. FURTHER, THE APPELLANT HAS CHARGED COMMISSION / BROKERAGE ON SUCH ACCOMMODATION ENTRIES FROM THE THIRD PARTIES, WHICH HAS BEEN COLLECTED BY THE APPELLANT IN CASH. 4. THE COMMISSION INCOME CHARGED FROM THE BENEFICIARIES OF THE ACCOMM ODATION ENTRIES IS NEITHER RECORDED IN THE BOOKS OF THE GROUP CONCERN NOR OF THE APPELLANT. 5. THE EFFECTIVE MANAGEMENT AND CONTROL OF THE BUSINESS OF ALL THE GROUP CONCERNS IS IN THE HANDS OF THE APPELLANT. THE DUMMY PERSONS SHOWN AS DIRECTORS, PARTNERS AND PROPRIETORS HAVE EITHER NO KNOWLEDGE OF THE VARIOUS ACTIVITIES CARRIED ON BY THE APPELLANT OR HAVE SUPERFICIAL KNOWLEDGE ABOUT THE BUSINESS OF ACCOMMODATION ENTRIES. 6. THE DUMMY DIRECTORS/PARTNERS/PROPRIETORS USUALLY SIGN BLANK CHEQUES AND OTHER DOCU MENTS, WHICH ARE HANDED OVER TO THE APPELLANT OR HIS KEY EMPLOYEES. SUCH DOCUMENTS / CHEQUES ARE USED BY THE APPELLANT FOR THE EFFICIENT RUNNING OF THE ENTRY OPERATOR'S BUSINESS. 7. THE BOOKS OF ACCOUNTS AND BANK ACCOUNTS OF ALL SUCH CONCERNS ARE MAINTAIN ED ON THE DIRECTION OF THE APPELLANT IN A CENTRALIZED MANNER. 8. THE BOOKS OF ACCOUNTS OF THE GROUP CONCERNS, BLANK SIGNED CHEQUES , OLD STAMP PAPERS ETC. WERE FOUND AT THE SECRET PREMISES FOUND DURING T HE COURSE OF SEARCH OPERATION, WHICH WER E NOT DISCL OSED TO ANY GOVT. DEPARTMENT . 9. SHRI ANIL MANDAWAT, C.A. HAS AUDITED 44 OF THE GROUP CONCERNS. HE HAS ADMITTED THAT THE BOOKS OF ACCOUNTS OF THE SAID CONCERNS ARE AUDITED ON THE DIRECTION OF LUNKARAN PARASMAL KOTHARI. FURTHER, HE HAS ADMITTED THAT H E MER ELY PUTS HIS SIGNATURES ON THE AUDIT REPORTS OF THESE CONCERNS, WITHOUT VERIFYING THEIR BOOKS OF ACCOUNTS. 10. THERE IS A CONFESSIONAL STATEMENT OF THE APPELLANT THAT ALL THE 70 GROUP CONCERNS IN THE NAME OF VARIOUS PERSONS, ARE ACTUALLY CONTROLLED AND MAN AGED BY HIM. 11. THE VARIOUS EMPLOYEES / ASSOCIATES / DIRECTORS / PARTNERS LIKE SHRI LUNKARAN PARASMAL KOTHARI, SHRI ANIL KHICHA, SHRI RAJESH CHOPRA, SHRI RITESH SIROYA, SHRI ROHIT BIRAWAT, SHRI BASANT D JAIN, SHRI SHREYANSH L JAIN, SHRI VIVEK NORATMAL JA IN, SHRI MAHAVIR MANGALCHAND JAIN, SHRI RAMNIWAS CHOYAL, SHRI GAUTAM KUMOT, SHRI RAJESH CHOPRA, SHRI ATUL LADDHA HAS MADE CONFESSIONAL STATEMENTS THAT THEY ARE JUST DUMMY AND THE VARIOUS GROUP CONCERNS ARE ACTUALLY RUN BY THE APPELLANT. THEY HAVE CLEARLY STATED THAT THEY WORK AS PER THE DIRECTION AND INSTRUCTIONS OF THE APPELLANT AND HAVE NO SAY IN THE ACTUAL WORKING OF THE VARIOUS GROUP CONCERNS. 12. THESE DUMMY DIRECTORS /PARTNERS /PROPRIETORS GETS REMUNERATED BY THE APPELLANT FOR THE SERVICES RENDERED. ALMOST ALL OF THEM BELONG TO RAJASTHAN AND ARE WELL KNOWN TO THE APPELLANT. FURTHER, THEY RESIDE IN RESIDENCES, WHOSE OWNERSHIP IS WITH THE APPELLANT OR HIS FAMILY MEMBERS. 13. ALL THE GROUP CONCERNS OPERATE FROM THE PREMISES OWNED BY THE APPELLANT OR, HIS FAMILY MEMBERS OR HIS FAMILY CONCERNS. 14. THE ID PROOFS OF THE DUMMY DIRECTORS, PARTNERS AND PROPRIETORS LIKE PAN CARDS, ADDRESS PROOFS ETC. WERE FOUND AT ONE PLACE. 15. THE APPELLANT HAS CONTENDED THAT THE LOOSE PAPERS AND 4GB PENDRIVE SEIZED FROM HI S RESIDENCE WAS SHOWN TO HIM FOR THE FIRST TIME ONLY ON 08/10/2013 AND HE WAS SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 21 FORCIBLY ASKED TO SIGN THE INVENTORY OF THE SAME. THIS CONTENTION IS FACTUALLY INCORRECT DUE TO THE FACT THAT THE APPELLANT HIMSELF HAS ADMITTED IN THE STATEMENT RECORDED U/S 132 (4) ON 08/10/2013 THAT HE HAS DELIBERATELY STAYED AWAY FROM THE INCOME TAX PROCEEDINGS AGAINST HIM. 16. SHRI RAJESH B. JAIN, SON OF THE APPELLANT HAS VERY CATEGORICALLY CONFIRMED IN HIS STATEMENT U/S 132 (4) ON 07/10/2015 AT HIS RESIDENCE AT 171 SILVER ARC H, NEPEAN SEA ROAD, ABOUT THE FINDING AND CONSEQUENT SEIZURE OF THE SAID PEN DRIVE 17. THE OVERWHELMING INCRIMINATING DATA LIKE REGISTER OF REAL IMPORTER WERE ALSO FOUND AND SEIZED DURING THE COURSE OF THE SEARCH OPERATION. 18. DURING THE COURSE OF THE SEA RCH OPERATION, CLINCHING EVIDENCE WERE FOUND IN THE FORM OF 'ESTIMATE SHEETS' & PEN DRIVE DATA. BOTH THESE SEIZED DOCUMENTS / ELECTRONIC DATA CONTAINS DETAILS OF THE ACCOMMODATION ENTRIES, COMMISSION CHARGED, MOVEMENT OF CASH, ANGADIA ACCOUNTS, ACCOUNTED B ANKING ENTRIES AGAINST WHICH CASH HAS BEEN TRANSACTED ETC. 3.4 IN THE ABOVE BACKGROUND, LD. CIT(A) PROCEEDED TO EXAMINE AND VERIFY THE QUANTIFICATION OF UNACCOUNTED COMMISSION. THE SAME WAS FINALLY DONE AS UNDER: - (I) COMMISSION INCOME ON IMPORTED PURCHA SES THE LD. AO HAS ESTIMATED THIS COMMISSION AS 27.5 PAISA PER RUPEES 100 TRANSACTION OF IMPORT. THE SAME WAS AS PER THE STATEMENT OF SHRI LUNKARAN PARASMAL KOTHARI WHO STATED T HAT THE REAL IMPORTERS PAY UP COMMISSION VARYING BETWEEN 25 - 30 PAISA PER RUPEES 100 OF THE TOTAL IMPORT. HOWEVER, THIS ESTIMATE WAS ON THE BASIS OF STATEMENTS OF JUST FEW PARTIES WHEREAS THE OTHER PARTIES WERE NOT EXAMINED OR IF EXAMINED, THEY HAD NOTHING TO SAY A B OUT THE PERCENTAGE OF COMMISSION. ON THE CONTRARY, THE ASSESSEE HIMSEL F HAD ADMITTED TO BE CHARGING COMMISSION @0.02% ON THE TRANSACTIONS DONE IN 70 CONCERNS. THEREFORE, DUE WEIGHTAGE WAS TO BE GIVEN TO CONFESSIONAL STATEMENT OF THE ASSESSEE OVER THE OTHER STATEMENTS MADE BY DUMMY DIRECTORS / PARTNERS /PROPRIETORS. THE SAME ALSO STOOD CORROBORATED BY RELEVANT ENTRIES MADE IN THE ESTIMATION SHEETS WHICH HAVE ALSO BEEN ILLUSTRATED IN THE IMPUGNED ORDER. ACCORDINGLY, LD. AO WAS DIRECTED TO APPLY RATE OF 2 PAISA PER RUPEES 1 00 SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 22 OR 0.02% ON IMPORTED PURCHASES. ACCORDINGLY, PARTIAL RELIEF WAS GRANTED TO THE ASSESSEE UNDER THIS HEAD . (II) COMMISSION INCOME ON BOGUS UNSECURED LOANS THE LD. AO HAS ESTIMATED THIS COMMISSION AS 2.4% PER ANNUM. THE COMPUTATIONS MADE FROM THE DATA EXTRACTED FROM PEN DRIVE CORROBORATED THE SAME AND ACCORDIN GLY, THIS ESTIMATION MADE BY LD. AO WAS HELD TO BE JUSTIFIED. (III) COMMISSION INCOME ON ACCOMMODATION ENTRIES OF LOCAL PURCHASES THE AO HAD NOT MADE ANY SUCH ADDITION ON ACCOUNT OF LOCAL PURCHASES MADE BY THE ASSESSEE FROM REGISTERED DEALERS. HOWEVER, LD. CIT(A) OPINED THAT AS PER THE FINDINGS THAT ASSESSEE EARNED COMMISSION ON ALL DEALINGS, THE COMMISSION ON THESE TRANSACTIONS WAS ALSO TO BE ESTIMATED AND ADDED TO THE INCOME OF THE ASSESSEE. ACCORDINGLY, E NHANCEMENT NOTICE WAS ISSUED TO THE ASSESSEE WHICH WAS DI SPUTED BY THE ASSESSEE. FINALLY, R EJECTING ASSESSEES SUBMISSIONS, IT WAS OBSERVED THAT IF ALL THE SALES OF THE GROUP WERE HELD AS ACCOMMODATION ENTRIES, THEN THE LOCAL PURCHASES COULD NOT BE HELD TO BE GENUINE. THEREFORE, THE ESTIMATION WAS MADE @0 .02% ON LOCAL PURCHASES AND INCOME WAS ENHANCED TO THAT EXTENT. (IV) COMMISSION INCOME ON ACCOMMODATION ENTRIES FOR BOGUS PURCHASE BILLS SUPPLIED BY THE ASSESSEE THE LD. AO HAS ESTIMATED THIS COMMISSION A T 7. 5 PAISA PER RS.100 TRANSACTION WHICH WAS BASED ON STATEMENT GIVEN BY SHRI LUNKARAN PARASMAL KOTHARI. THE SAID RATE WAS CONFIRMED BY LD. CIT(A) . 3.5 ANOTHER RELIEF PROVIDED TO THE ASSESS EE WAS ON ACCOUNT OF EXPENSE ALLOWANCE. THE LD. AO HAD ESTIMATED THE SAME @10%. SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 23 HOWEVER, VIEWING THAT TAXING 90% OF T HE GROSS UNACCOUNTED COMMISSION INCOME WOULD BE GROSSLY UNFAIR AND UNJUST, LD. CIT(A) ESTIMATED THE SAME @25% WHICH PROVIDED PARTIAL RELIEF TO THE ASSESSEE. THE SA ID ESTIMATION WAS JUSTIFIED IN VIEW OF THE FACT THAT UNDISCLOSED INCOME WHICH WAS BEING TAXED WAS OVER AND ABOVE T HE REGULAR INCOME RETURNED BY THE GROUP CONCERNS. FURTHER , CERTAIN EXPENDITURE WOULD BE REQUIRED T O MAINTAIN AND RUN VAST NETWORK OF ENTRY OPERATION BUSINESS. 3.6 THE ENTITY - WISE QUANTIFICATION OF COMMISSION FOR THE YEAR UNDER EACH H EAD WAS ACCORDINGLY REVISED BY LD. CIT(A) WHICH HAS BEEN TABULATED IN P ARA - 51 OF THE IMPUGNED ORDER. THE GROSS COMMISSION INCOME FOR THIS YEAR HAS BEEN WORKED OUT TO BE RS. 444.66 LACS AND AFTER PROVIDING FOR EXPENSES ALLOWANCE OF 25%, NET ADDITION THUS SU S TAINED BY L D. CIT(A) C AME TO RS. 333.49 LACS AS AGAINST RS.591.95 LACS AS ESTIMATED BY LD. AO. SIMILAR COMPUTATIONS HAVE BEEN MADE IN THE IMPUGNED ORDER F OR ALL THE OTHER ASSESS MENTS YEARS. THE SUMMARY OF THE SAME HAS BEEN EXTRACTED IN PARA - 52 O F THE ORDER WH EREIN TOTAL ADDITIONS FROM AYS 2008 - 09 TO 2014 - 15 HAS BEEN ESTIMATED @ RS.6145.86 LACS AS AGAINST ESTIMATION OF RS.9031.32 LACS AS MADE BY LD. AO FOR ALL THE YEARS. IN NUTSHELL, A NET RELIEF OF RS.2885.45 LACS HAS BEEN PROVIDED TO THE ASSESSEE. FOR EASE OF REFERENCE, THE QUANTUM ADDITIONS AS CONFIRMED B Y LD. CIT(A) COULD BE TABULATED IN THE FOLLOWING MANNER: - NO. PARTICULARS % A.Y - 2008 - 09 A.Y. 2009 - 10 A.V. 2010 - 11 A. Y. 2011 - 12 A.Y. 2012 - 13 A.Y. 20 13 - 14 A.Y. 2014 - 15 TOTAL 1 COMMISSION ON L OAN 2 .40 % 22623851 33129586 40746221 56203703 89025203 119485664 81958142 443172370 2 COMMISSION ON SALES 0.075% 17191360 21285148 25911567 63514274 63400243 69864476 32927532 294094600 SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 24 3 COMMISSION ON IMPORT 0.02% 1887809 177384 5 1962158 5678628 4596293 2353696 1106610 19359039 4 COMMISSION OF LOCAL PURCHASE 0.02% 2763572 3739859 4864857 11190156 12697381 15848884 11718444 62823153 5 GROSS UNACCOUNTED COMMISSION 44466591 59928438 73484803 136586761 169 719120 207552720 127710729 819449162 6 LESS : 25% EXPENSES 11116648 14982110 18371201 34146690 42429780 51888180 31927682 204862291 7 NET UNACCOUNTED COMMISSION 33349944 44946329 55113602 102440070 127289340 155664540 95783046 614586872 THE NET RELIEF AS SUMMED UP BY LD. CIT(A), WAS AS FOLLOWS: - ASSESSMENT YEAR 2008 - 09 2009 - 10 2010 - 11 2011 - 12 2012 - 13 2013 - 14 2014 - 15 TOTAL NET UNACCOUNTED COMMISSION INCOME, AS PER THE ASSESSMENT ORDER (IN RS.) 59195321 70924593 84273714 178019195 194062033 199566306 117091409 903132572 NET UNACCOUNTED COMM I SSION INCOME, AS PER THE APPELLATE ORDER (IN RS.) 33349944 44946329 55113602 102440070 127289340 155664540 95783046 614586872 NET RELIEF TO THE APPELLANT (IN R S.) 25845378 25978264 29160112 75579125 66772693 43901766 21308363 288545700 3.7 ALL THE OTHER GROUNDS RAISED BY THE ASSESSEE WERE DISMISSED IN THE APPELLATE ORDER AND THE APPEAL WAS PARTIALLY ALLOWED. THE AFORESAID ADJUDICATION HAS GIVEN RISE T O CROSS - APPEALS BEFORE US. O UR FINDINGS AND ADJUDICATION 4. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS, ORAL AS WELL AS WRITTEN. WE HAVE DULY APPRECIATED THE FACTUAL MATRIX AS ENUMERATED BY US IN THE PRECEDING PARAGRAPHS. THE JUDICIAL PRONOUNCEMENTS INC LUDING OUR OWN ORDER IN RAJENDRA P. JAIN V/S DCIT (ITA NOS.298/MUM/2018 & ORS.; ORDER DATED 03/05/2019) , AS CITED BEFORE US DURING THE COURSE OF SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 25 HEARING HAS BEEN DELIBERATED UPON. WE PROCEED TO DEAL WITH THE ISSUES IN THE FOLLOWING MANNER. 5. THE FIRST AND FOREMOST ARGUMENT TAKEN BEFORE US IS THAT THE PEN - DRIVE AS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS WAS PLANTED FROM OUTSIDE AND THE ADMISSION THEREOF WAS TAKEN FORCIBLY IN STATEMENT OF ASSESSEE U/S 132(4). THE LD. AR HAS IMPRESSED UPON THE IDEA THAT THE SEARCH TOOK PLACE ON 03/10/2013 WHEREAS THE SAID PEN DRIVE WAS NOT INVENT ORIZED FOR 6 DAYS. IT HAS BEEN SUBMITTED THAT THE SAME COULD HAVE BEEN SEIZED OR INVENTORIZED ON 04/10/2013 ALONG WITH THE INVENTORY MADE FOR CREDIT CARDS, BANK ACCOUNT AND JEWEL L ERY ETC. FURTHER, THE SEIZURE OF THE PEN DRIVE WAS NOT MADE PART OF PANCHNAMA ANNEXURE, OFFICIALLY DRAWN ON 04/10/2013 AND THE ADMISSION ABOUT THE SAME FROM HIS SON SHRI RAJESH JAIN WAS EXTRACTED FORCIBLY. 6. G OING BY THE FACTUAL MATRIX AS ENUMERATED IN PRECEDING PARAGRAPHS , WE FIND THAT THE ATTITUDE OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS TOTALLY NON - COOPERATIVE. IN FACT, THE ASSESSEE REMAINED ABSENT DURING SEARCH PROCEEDINGS FOR 3 DAYS. THE SUMMONS W ERE NOT COMPLIED WITH AND NO E XPLANATION WAS FURNISHED ON INCRIMINATING MATERIAL. PERTINENTLY, VOLUMINOUS HAND WRITTEN ESTIMATION SHEETS HAVE BEEN FOUND AT VARIOUS PREMISES OF THE ASSESSEE. THE SHEETS HAVE BEEN ADMITTED TO BE IN THE HAND WRITING OF ASSESSEES SON AS WELL AS AN EMPLOYEE OF THE ASSESSEE. THESE SHEETS CONTAIN PARALLEL CASH ACCOUNTS. THE ENTRIES IN THE ESTIMATED SHEETS WERE IN THE NATURE OF SQUARE - OFF TRANSACTION WHEREIN CASH RECEIVED FROM ONE PARTY W AS PAID BACK TO ANOTHER PARTY THROUGH ANGADIYA ACCOUNT. THE PEN DRIVE CONT AINED CALENDAR YEAR - WISE NAMES OF BENEFICIARIES, THE AMOUNT OF SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 26 CASH, DETAILS OF BROKERAGE AND COMMISSION ETC. IT ALSO CONTAINED COMPLETE DETAILS OF ANGADIYA ACCOUNT SINCE 2004 IN ELECTRONIC FORM. THE PARALLEL ACCOUNT MAINTAINED ON THE PEN - DRIVE PERTAINED T O VARIOUS CONCERNS, 70 TO BE PRECISE, BEING MANAGED AND CONTROLLED BY ASSESSEE GROUP. THE PASSWORD OF THE PEN DRIVE WAS CRACKED WITH THE HELP OF SOFTWARE PROGRAMMERS. AFTER DECRYPTING THE DATA, PRINT OUTS WERE TAKEN AND MATCHED WITH THE ESTIMATION SHEETS A S WELL AS OTHER DATA GATHERED DURING THE COURSE OF SEARCH ACTION FROM VARIOUS PREMISES, DISCLOSED AS WELL AS SECRET. THE DATA WAS FOUND TO BE IDENTICAL. THE COMPLETE CORRELATION WAS ESTABLISHED BETWEEN THE PARALLEL BOOKS OF ACCOUNTS FOUND ON THE PEN DRIVE WITH BOOKS OF 70 CONCERNS BEING MANAGED AND CONTROLLED BY THE ASSESSEE. IT TRANSPIRED THAT THE DAILY ACCOUNTS WERE FIRST WRITTEN MANUALLY ON ESTIMATION SHEETS AND THEREAFTER ENTERED INTO PEN - DRIVE ELECTRONICALLY. SO MUCH SO, IDENTICAL PEN DRIVE WAS FOUND F ROM THE POSSESSION OF SHRI ROHIT BIRAWAT AT CST TERMINUS WHO WAS APPREHENDED BY THE SEARCH TEAM WHILE ATTEMPTING TO FLEE FROM MUMBAI TO RAJASTHAN WITH INCRIMINATING MATERIAL. 7. ALL THESE FACTS HAVE BEEN ADMITTED NOT ONLY BY THE ASSESSEE BUT ALSO BY HIS S ON AS WELL AS TRUSTED EMPLOYEES IN VARIOUS STATEMENTS AS RECORDED ON OATH U/S 132(4) AT VARIOUS POINTS OF TIME. THE STATEMENTS WERE RECORDED IN THE PRESENCE OF INDEPENDENT WITNESSES. THE CONTENTS OF THE STATEMENT WERE SAID TO BE DULY EXPLAINED TO THE ASSES SEE AT THE TIME OF RECORDING THEREOF . 8. IN THE BACKDROP OF SUCH CLINCHING AND OVERWHELMING E VIDENCES, NO SUBSTANCE COULD BE FOUND IN THE PLEA THAT THE PEN - DRIVE DID NOT BELONG TO THE ASSESSEE OR THE SAME WAS NOT FOUND FROM ASSESSEES PREMISES SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 27 PARTICULARL Y WHEN THE CONTENTS OF THE PEN DRIVE COMPLETELY MATCHED WITH INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIONS. THE SEIZURE OF THE SAME WAS DULY RECORDED IN THE PANCHNAMA WHICH WAS VOUCHED BY INDEPENDENT PANCHAS . THE VITAL LINK WAS ESTABL ISHED BETWEEN THE PEN DRIVE AND THE ESTIMATE SHEETS AS WELL AS THE REGULAR BOOKS OF BENAMI CONCERNS BEING RUN BY THE ASSESSEE . THEREFORE, WE DO NOT FIND ANY SUBSTANCE IN THIS PLEA AS RAISED BY LD. AR BEFORE US AND THEREFORE, WE REJECT THE SAME. 9. SO FAR AS THE OTHER ARGUMENTS ARE CONCERNED, WE FIND THAT THAT THE ASSESSEE WAS RUNN ING MORE THAN 70 BENAMI CONCERN UNDER N AME - SAKE DIRECTORS / PARTNERS /PROPRIETORS. THESE PERSONS WERE ACTING AS PER THE DIRECTION OF THE ASSESSEE AGAINST REMUNERATION. MOST OF TH EM, IN THEIR STATEMENT U/S 132(4), MADE ADMISSION OF THOSE FACTS. THEY ALSO MADE ADMISSION THAT THEY ASSISTED / ABETTED THE ASSESSEE IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. THEIR PAN CARDS, IDS , BLANK SIGNED CHEQUE BOOKS ETC WERE FOUND AT CENT RALIZED PREMISES. THEY WERE VISITING THE CENTRALIZED PREMISES TO SIGN THE BLANK CHEQUE BOOKS AS PER THE DIRECTIONS OF THE ASSESSEE. ALL THESE PERSONS HAD SUPERFICIAL KNOWLEDGE ABOUT NATURE OF BUSINESS BEING CONDUCTED BY THEIR RESPECTIVE CONCERNS. FURTHER, MOST OF THESE PERSONS WERE RESIDING AT PREMISES OWNED BY THE ASSESSEE GROUP. THE BOOKS OF ACCOUNTS OF ALL THESE ENTITIES WERE BEING MAINTAINED AT TWO PREMISES IN A CENTRALIZED MANNER. THE BOOKS WERE FOUND IN THE SAME COMPUTER AND AUDITED BY COMMON AUDITOR. THE AUDITOR ADMITTED TO HAVE SIGNED THE FINANCIAL STATEMENTS AS PER THE DIRECTIONS OF SHRI LUNKARAN PARASMAL KOTHARI WITHOUT VERIFYING THE BOOKS OF ACCOUNTS. THIS IS FURTHER FORTIFIED BY SURVEY ACTION AT BKC, MUMBAI SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 28 WHEREI N MORE THAN 3 0 FIRMS WERE FOUND T O BE OPERATING FROM COMMON PREMISES. ALL THE 70 ENTITIES WERE FOUND TO HAVE COMMON FEATURES IN THEIR RESPECTIVE FINANCIAL STATEMENTS. ALL THESE FACTORS STRONGLY PROVE THE ALLEGATIONS OF THE DEPARTMENT THAT ALL THE CONCERNS WERE BEING RUN BY THE GROUP IN A COMBINED MANNER WITH A VIEW TO PROVIDE ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES AGAINST COMMISSION. 10. SO FAR AS THE RETRACTION OF THE STATEMENT MADE BY THE ASSESSEE IS CONCERNED, WE FIND THAT THE RETRACTION WAS MADE AFTER MORE THAN 8 MONTHS AND THE SAME WAS DEVOID OF ANY MATERIAL EVIDENCE. THE STATEMENTS WERE MADE ON OATH U/S 132(4) AND HEAVY ONUS WAS ON ASSESSEE TO REBUT THE SAME WITH COGENT MATERIAL WHILE RETRACTING THE SAME. HOWEVER, NOTHING OF THAT SORT AS DONE BY THE ASSESSEE, HAS BEEN SHOWN BE FORE US. GLARING CONTRADICTIONS AS WELL AS SIMILARITIES HAS BEEN FOUND IN THE RETRACTION AFFIDAVITS. AS RIGHTLY HELD BY LOWER AUTHORITIES, THE RETRACTION WAS NOTHING BUT MERE AFTER - THOUGHT AND TUTORED STATEMENT TO THWART THE PROCESS OF INVESTIGATION. THE R ETRACTION WAS B EREFT OF ANY MATERIAL EVIDENCE AND THEREFORE, THE SAME WAS TO BE COMPLETELY IGNORED. 11. THE AFORESAID FACTUAL MATRIX AS WELL AS FINDINGS WOULD LEAD TO INESCAPABLE CONCLUSION THAT ALL THE 70 ENTITIES UNDER CONSIDERATION WERE BEING MANAGED AN D CONTROLLED BY THE ASSESSEE GROUP AND THEREFORE, LOWER AUTHORITIES WERE QUITE JUSTIFIED IN ESTIMAT ING COMMISSION INCOME EARNED BY THE ASSESSEE GROUP FROM ALL THESE BENAMI CONCERNS. 12. ACCORDINGLY, GROUND NOS.1,2,5,6,7 & 8 OF THE ASSESSEES APPEAL STANDS DISMISSED. GROUND NO.12 STAND DISMISSED SINCE WE DO NOT FIND ANY VIOLATION OF PRINCIPLE OF NATURAL JUSTICE DURING APPELLATE PROCEEDINGS. SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 29 ESTIMATION OF QUANTUM ADDITIONS 13. THE SUBJECT MATTER OF REVENUES APPEAL AS WELL AS REMAINING GROUND OF ASSESSEES APPEAL IS RELATED TO ESTIMATION OF QUANTUM ADDITIONS. FOR EASE OF REFERENCE, THE COMPARATIVE CHART OF ESTIMATION MADE BY LOWER AUTHORITIES IN ASSESSEES CASE AS WELL AS RATES ESTIMATED BY US IN THE CASE OF SIMILARLY PLACED ASSESSEE NAMELY SHRI RAJENDRA P. JAIN COULD BE TABULATED IN THE FOLLOWING MANNER: - NO. NATURE OF TRANSACTION ESTIMATION OF LD. AO ESTIMATION OF LD. CIT(A) OUR ESTIMATION IN SHRI RAJENDRA P. JAIN 1. IMPORT TRANSACTIONS BY ASSESSEE ON BEHALF OF OTHERS 27.5 PAISA PER RUPEES 100 OR 0.275% 2 PAISA PER RUPEES 100 OR 0.02% 2 PAISA PER RUPEES 100 OR 0.02% 2. ACCOMMODATION ENTRIES OF BOGUS PURCHASES PROVIDED BY ASSESSEE 7.5 PAISA PER RUPEES 100 OR 0.075% CONFIRMED 5 PAISA PER RUPEES 100 OR 0.0 5% 3. BOGUS UNSECURED LOANS PROVIDED BY ASSESSEE 20 PAISA PER RUPEES 100 PER MONTH OR 0.20% PER MONTH OR 2.40% PER ANNUM CONFIRMED 0.50% PER ANNUM 4. COMMISSION ON LOCAL PURCHASES MADE BY THE ASSESSEE NIL 2 PAISA PER RUPEES 100 OR 0.02% F ULLY DELETED 5. EXPENSE ALLOWANCE 10% OF GROSS COMMISSION 25% OF GROSS COMMISSION 50% OF GROSS COMMISSION SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 30 WE ARE INCLINED TO MAKE ESTIMATION ON SIMILAR LINES KEEPING IN VIEW THE FACTUAL MATRIX OF THE CASE, INCRIMINATING MATERIAL ON RECORD & ADMISSION MADE BY THE ASSESSEE. C ONSIDERING THE PECULIAR FACTS OF THE CASE AND KEEPING IN VIEW THE MAGNITUDE OF TRANSACTIONS CARRIED OUT BY THE ASSESSEE VIS - - VIS THE FACTUAL MATRIX IN SHRI RAJENDRA P. JAIN , WE ARE INCLINED TO ESTIMATE THE ASSESSEES INCOME IN THE FOLLOWING MANNER: - NO. NATURE OF TRANSACTION OUR ESTIMATION IN THE P RESENT CASE 1. IMPORT TRANSACTIONS BY ASSESSEE ON BEHALF OF OTHERS WE CONFIRM THE STAND OF LD. CIT(A) I.E. THE ESTIMATION WOULD BE @2 PAISA PER RUPEES 100 OR 0.02% 2. ACCOMMODATION ENTRIES OF BOGUS PURCHASES PROVIDED BY ASSESSEE 5 PAISA PER RUPEES 100 O R 0.0 5% INSTEAD OF 7.5 PAISA PER RUPEES 100 OR 0.075% AS ESTIMATED BY LD. AO AND CONFIRMED BY L D. CIT(A) 3. BOGUS UNSECURED LOANS PROVIDED BY ASSESSEE 1% P ER ANNUM INSTEAD OF 2.40% PER ANNUM AS ESTIMATED BY LD. AO AND CONFIRMED BY LD. CIT(A) 4. COMMISSIO N ON LOCAL PURCHASES MADE BY THE ASSESSEE FULLY DELETED AS AGAINST 2 PAISA PER RUPEES 100 OR 0.02% AS ENHANCED BY LD. CIT(A) 5. EXPENSE ALLOWANCE 25% OF GROSS COMMISSION I.E. THE STAND OF LD. CIT(A) IS CONFIRMED 14. THE ESTIMATION OF 0.02% ON IMPORT PURC HASES AS MADE BY LD. CIT(A) IS BASED ON CONFESSIONAL STATEMENT OF THE ASSESSEE AND THE SAME IS ALSO CORROBORATE D BY RELEVANT ENTRIES MADE IN THE ESTIMATION SHEETS WHICH IS ILLUSTRATED IN THE IMPUGNED ORDER. THEREFORE, WE CONFIRM THIS ESTIMATION. THE ESTIMA TION OF COMMISSION ON LOCAL PURCHASE IS BASED PRIMARILY ON THE ASSUMPTION THAT THE ASSESSEE WOULD HAVE EARNED COMMISSION ON ALL THE TRANSACTIONS. HOWEVER, THERE IS NO REFERENCE TO ANY INCRIMINATING MATERIAL WHILE MAKING THIS ENHANCEMENT. THE ASSESSEE HAS A LSO NOT SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 31 ADMITTED TO HAVE EARNED SUCH COMMISSION. THUS, THE SAME IS BASED ON MERE PRESUMPTION AND HENCE, WE ARE INCLINED TO DELETE THE SAME. THE ESTIMATION OF 0.05% ON A CCOMMODATION ENTRIES OF BOGUS PURCHASES PROVIDED BY ASSESSEE IS BASED ON OUR ESTIMATION IN THE CASE OF SHRI RAJENDRA P. JAIN. OUR ESTIMATION WITH RESPECT TO BOGUS UNSECURED LOANS PROVIDED BY ASSESSEE DRAW STRENGTH FROM THE FACT THAT THE ASSESSEE HAS CARRIED OUT MAXIMUM TRANSACTIONS OF THIS NATURE. THE RATE OF COMMISSION MAY NOT BE CONSTANT IN ALL THE TRANSACTIONS. THEREFORE, ESTIMATING THE SAME MERELY ON THE BASIS OF FEW ILLUSTRATIONS ONLY MAY NOT BE A CORRECT APPROACH. KEEPING IN VIEW THE NOTIONS OF EQUITY AND REASONABLENESS, WE HAVE ESTIMATED THE SAME @1% PER ANNUM WHICH IS MUCH MORE THAN OU R ESTIMATION IN THE CASE OF SHRI RAJENDRA P. JAIN. THE EXPENSES ALLOWANCE OF 25% , IN OUR CONSIDERED OPINION, WOULD BE MORE THAN ENOUGH TO TAKE CARE OF THE ESTIMATED EXPENSES BEING INCURRED BY THE ASSESSEE TO CARRY OUT ITS OPERATIONS UNDER ALL THESE CONCERN S KEEPING IN VIEW THE MAGNITUDE OF THE TRANSACTIONS. THE ASSESSEE WAS MAINTAINING ALL THE CONCERNS IN A CENTRALIZED MANNER . EVIDENTLY, THE ASSESSEE WAS EMPLOYING ONLY A LIMITED NUMBER OF TRUSTED EMPLOYEES ONLY AND THE EXPENDITURE WOULD REMAIN, MORE OR LESS , CONSTANT EVEN IF THE NUMBER OF CONCERNS WOULD HAVE BECOME MORE. THE EXPENDITURE COULD NOT BE ASSUMED TO HAVE INCREASED IN DIRECT PROPORTION TO THE INCREASE IN TURNOVER. THEREFORE, THE ESTIMATION AS MADE BY LD. CIT(A) IS REASONED ONE AND NO FURTHER RELIEF COULD BE PROVIDED TO THE ASSESSEE, ON THIS ACCOUNT. SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 32 HAVING SAID SO, NO OTHER BENEFIT / CREDIT OF RETURNED INCOME ETC. WOULD BE AVAILABLE TO THE ASSESSEE. NO CREDIT OF TAXED PAID BY VARIOUS ENTITIES WOULD BE AVAILABLE SINCE TDS REFUND HAS BEEN CLAIMED BY M ANY OF THESE ENTITIES. IN OTHER WORDS, THE ADDITION IN THE HANDS OF THE ASSESSEE WOULD BE OVER AND ABOVE RESPECTIVE RET URNED INCOME OF THESE CONCERNS AND ALSO WITHOUT ANY BENEFIT OF TAXES PAID BY THESE CONCERNS. 1 5. GROUND NOS.3 OF ASSESSEES APPEAL STAND PARTLY ALLOWED. GROUND NO.4 STAND ALLOWED. GROUND NO.9 TO 11 STANDS DISMISSED. THE REVENUE S APPEAL STAND S DISMISSED. 16. OUR ADJUDICATION AS WELL AS ESTIMATION AS MADE IN THIS YEAR WOULD EQUALLY APPLY TO ALL THE OTHER YEARS ALSO. ALL THE SIMILAR GROUNDS IN AYS 2009 - 10 TO 2014 - 15 STAND DISPOSED - OFF ACCORDINGLY. THE LEARNED AO IS DIRECTED TO RECOMPUTE ASSESSEES INCOME FOR ALL THE YEARS IN TERMS OF OUR ESTIMATION. ISSUE OF UNEXPLAINED JEWEL L ERY IN ASSESSMENT YEAR 2014 - 15 1 7 . WHILE FRAMING ASSESSMENT FOR T HIS YEAR, L D. AO HAS MADE AN ADDITION OF RS.14.01 LACS ON ACCOUNT OF UNEXPLAINED JEWEL L ERY. THE FACTS OF THE SAME ARE THAT D URING SEARCH ACTION, UNEXPLAINED GOLD JEWEL L ERY, DIAMOND JEWEL L ERY AND SILVER UTENSILS WERE FOUND. THE ASSESSEE FAILED TO RECONCILE JEWEL L ERY OF RS.14.01 LACS BUT SUBMITTED THAT THE JEW ELLERY AS DECLARED BY THE ASSESSEE WAS HIGHER THAN JEWELLERY ACTUALLY FOUND. HOWEVER, R EJECTING THE SUBMISSIONS, THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. 1 8 . DURING APPELLATE PROCEEDINGS, THE ASSESSEE FILED DETAILED RECONCILIATION STATEMENT OF THE JEWEL L ERY FOUND DURING THE COURSE OF SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 33 SEARCH VIS - - VIS JEWEL L ERY AS DECLARED IN VARIOUS WEALTH TAX RETURNS. IN SUPPORT THEREOF, THE ASSESSEE FILED COPIES OF WEALTH TAX RETURNS, STATEMENT OF NET WE ALTH AND VALUATION REPORT ETC . A PERUSAL OF THE RECONCILIATION STATEMENT REVEALED THAT THE DECLARED JEWEL L ERY IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS WELL AS HIS FAMILY MEMBERS WAS FAR MORE THAN JEWEL LE RY ACTUALLY FOUND DURING THE COURSE OF SEARCH ACTI ON. ACCORDINGLY, THE ADDITION WAS DELETED. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 1 9 . FROM THE FACTUAL MATRIX, IT IS QUITE EVIDENT THAT DURING APPELLATE PROCEEDINGS, THE ASSESSEE WAS ABLE TO RECONCILE THE JEWEL L ERY AS FOUND DURING THE COURS E OF SEARCH OPERATIONS VIS - - VIS JEWELLERY DECLARED IN THE WEALTH TAX RETURN. IT IS UNDISPUTED FACT THAT DECLARED JEWELLERY WAS MORE THAN ACTUAL JEWELLERY FOUND DURING SEARCH OPERATIONS. THE FINDINGS OF LD. CIT(A) REMAIN UNDISTURBED BEFORE US. THEREFORE, O UR INTERFERENCE IN THE MATTER IS UNWARRANTED. THIS GROUND OF REVENUES APPEAL STANDS DISMISSED. CROSS APPEALS FOR AY 2007 - 08 20 . IN THIS YEAR, THE ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 ON 30/03/2015. THE ORIGINAL RETURN AS FILED BY THE ASSESSEE AT R S.2.53 LACS ON 31/07/2007 WAS PROCESSED U/S 143(1). HOWEVER, BASED ON SEARCH ACTION ON THE ASSESSEE , THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW VIDE NOTICE U/S 148 DATED 27/03/2014. THE REASONS OF REOPENING WERE SUPPLIED TO THE ASSESSEE AND THE ASSESS EES OBJECTIONS THERETO WERE DULY D ISPOSED - OFF IN THE ASSESSMENT ORDER. FINALLY, THE ASSESSMENT HAS BEEN FRAMED ON SIMILAR LINES AS FRAMED FOR OTHER YEARS AND THE SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 34 ASSESSEE WAS SADDLED WITH ADDITION OF ESTIMATED COMMISSION INCOME OF RS.410.28 LACS IN THE AS SESSMENT ORDER . 2 1. T HE ASSESSEE CHALLENGED THE ACTION OF LD. AO ON LEGAL GROUNDS AS WELL AS ON MERITS. THE LEGAL GROUNDS WERE DISMISSED BY LD. CIT(A) BY OBSERVING THAT THE REOPENING NOTICE U/S 148 WAS ISSUED AS PER LAW A FTER TAKING RE QUISITE APPROVALS. TH E REASONS FOR REOPENING WERE DULY SUPPLIED TO T HE ASSESSEE AND THERE WAS NO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AS ALLEGED BY THE ASSESSEE . THE LD. AO FOLLOWED THE DUE PROCEDURE AND THERE WAS NO TECHNICAL LAPSE ON THE PART OF LD.AO TO UNDERTAKE REAS SESSMENT PROCEEDINGS. THERE WAS NEW TANGIBLE MATERIAL ON RECORD. AT THE TIME OF REOPENING, THE ONLY QUESTION WAS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED THE REQUISITE BELIEF OF ESCAPEMENT OF INCOME AS HELD BY HON BLE SUPREME COURT IN ITO V/S SELECTED DALURBAND COAL CO. P VT. LTD. ( 1996 217 ITR 597 ) AS WELL AS IN RAYMOND WOOL L EN MILLS LTD V/S ITO ( 1999 236 I T R 34 ) . ACCORDINGLY, THE REOPENING WAS HELD TO BE VALID. 22. ON MERITS, LD. CIT (A) GRANTED PARTIAL RELIEF TO T HE ASSESSEE AS GRANTED IN COMMON ORDER DATED 30/10/2017 WHICH REDUCED THE IMPUGNED ADDITIONS TO RS.215.83 LACS. AGGRIEVED, THE ASSESSEE AS WELL AS REVENUE IS IN FURTHER APPEAL BEFORE US WITH SIMILAR GROUNDS OF APPEAL. 23. SO FAR AS THE LEGAL GROUND OF VALI DITY OF REASSESSMENT PROCEEDINGS IS CONCERNED, WE CONCUR WITH THE VIEW TAKEN BY LD. CIT(A). THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1). IT COULD BE NOTED THAT THE LD. AO WAS CLINCHED WITH TANGIBLE MATERIAL UPON WHICH A REA SONABLE BELIEF OF ESCAPEMENT OF INCOME COULD HAVE BEEN FORMED. THE NEW TANGIBLE MATERIAL SHOWED POSSIBLE ESCAPEMENT OF SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 35 INCOME IN THE HANDS OF THE ASSESSEE. AT THIS STAGE, NOTHING MORE, IN OUR OPINION, WAS REQUIRED TO REOPEN THE CASE OF THE ASSESSEE IN TERM S OF DECISION OF HONBLE SUPREME COURT IN RAYMOND WOOLLEN MILLS LTD V/S ITO (1999 ; 236 ITR 34). FURTHER, THE REOPENING WAS INITIATED AS PER DUE PROCESS OF LAW AND THERE WAS NO VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. THE PLEA, THUS RAISED BY LD. AR, STAN DS DISMISSED. 2 4 . THE LD. AR HAS RAISED ANOTHER LEGAL PLEA T HAT REOPENING PROVISIONS COULD NOT BE RESORTED TO BY THE REVENUE ONCE SEARCH WA S INITIATED U/S 132. THIS WOULD BE SO SINCE THE N ON - OBSTANTE CLAUSE OF SEC.153A PRECLUDES LD. AO FROM ISSUING NOTICE U/S 148 OF THE ACT. THE LD. AR IMPRESSED UPON THE IDEA THAT THE PHRASE NOTWIT H STANDING ANY THING CONTAINED AS USED IN OPENING LINE OF SEC.153A AS OPPOSED TO PHRASE NOTWIT H STANDING ANY THING TO THE CONTRARY CONTAINED AS USED IN CERTAIN OTHER PROVISIONS WOULD PRECLUDE THE APPLICABILITY OF OTHER SECTION S OF THE ACT WHETHER CONTRARY OR NOT. IT WAS SUBMITTED THAT L D. AO COULD INITIATE PROCEEDINGS U/S 153A WITH RESPECT TO ASSESSMENT YEARS BEYOND THE PERIOD OF 6 YEARS, PROVIDED THAT REQUIREMENTS OF FOURTH PROVISO W ERE SATISFIED. THEREFORE , NO PROCEEDINGS EXCEPT FOR PROCEEDINGS UNDER SECTION 153A COULD BE INITIATE D ONCE SEARCH OPERATION U/S 132 WAS CARRIED OUT. THEREFORE, NOTICE U / S 148 WAS WITHOUT JURISDICTION. ON THE OTHER HAND, LD. COUNSEL FOR REVENUE PLEADED THA T THE PROVISIONS OF SECTION 153A MAKES IT MANDATORY TO ASSESS / REASSESS THE INCOME OF PAST ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED. THIS SIMPLY MEANS THAT FETTERS PUT ON REOPENING THE ASSESSME NT W ERE TAKEN AWAY AND THESE PROVISIONS ENLARGES THE POWER OF LD. AO TO ASSESS OR REASSESS THE SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 36 INCOME OF PAST 6 YEARS WI THOUT AN OBLIGATION TO SATISFY THE PRE - CONDITION STIPULATED IN S EC. 147. 25. AFTER GOING THROUGH STATUTORY PROVISIONS, WE ARE UNABLE TO ACCEPT THE PLEA OF LD. AR. IT COULD BE SEEN THAT SEARCH ACTION TOOK PLACE ON THE ASSESSEE ON 03/10/2013 FOR WHICH RELEVANT ASSESSMENT YEAR WOULD BE 2014 - 15. THE PROVISIONS OF SEC.153A MANDATE LD. AO TO ISSUE NOTICE FOR PAST 6 ASSESSMENT YEARS IMMEDIATELY P RECEDING THE ASSESSMENT YEAR RELEVANT TO PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED. THIS PERIOD OF 6 YEARS, IN ASSESSEES CASE, IS AYS 2008 - 09 TO 2013 - 14. THEREFORE, AY 2007 - 08 IS NOT COVERED UNDER THESE PROVISIONS. ACCORDINGLY, THERE WAS NO BAR TO REOPE N THE ASSESSMENT OF AY 2007 - 08 PROVIDED THE MANDATORY CONDITIONS OF REOPENING WERE SATISFIED. IN PARA - 23, WE HAVE ALREADY UPHELD THE VALIDITY OF REASSESSMENT PROCEEDINGS. THEREFORE, THIS PLEA OF THE ASSESSEE IS TO BE REJECTED. WE ORDER SO. 26. SO FAR AS THE ESTIMATION OF COMMISSION INCOME IS CONCERNED, LD. AO IS DIRECTED TO APPLY OUR ESTIMATIONS AS MADE IN PRECEDING PARA - 13 TO THIS YEAR AS WELL. THE ASSESSEES GROUND STAND PARTLY ALLOWED WHEREAS THE REVENUES APPEAL STAND DISMISSED. CONCLUSI ON 27. ALL THE APPEALS BY ASSESSEE STAND PARTLY ALLOWED WHEREAS THE APPEALS OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON 06 TH AUGUST, 2021. SD/ - SD/ - (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 06/08/2021 SR.PS, DHANANJAY SHRI BHANWAR LAL M. JAIN ASSESSMENT YEARS: 2007 - 08 TO 2014 - 15 37 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELL ANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGIST RAR) , / ITAT, MUMBAI.