DCIT, Cen. Cir-VII, Kolkata, Kolkata V. M/s Pentex Expro Pvt. Ltd., Kolkata

ITA 366/KOL/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9850 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 03-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADIP KR MAJUMDER
• Assessee Lawyers: N O N E
• Keywords: Accommodation entries; Retraction; Set aside
• Section: 143(3); 131

Judgement Text

1 ITA NO. 366/KOL/2014 M/S. PENTEX EXPRO PVT. LTD., A Y- 2008-09 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 366/KOL/2014 ASSESSMENT YEAR: 2008-09 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-VII, KOLKATA. VS. M/S. PENTEX EXPRO PVT. LTD. (PAN: AABCP4861E) APPELLANT RESPONDENT DATE OF HEARING 30.07.2019 DATE OF PRONOUNCEMENT 25.09.2019 FOR THE APPELLANT SHRI PRADIP KR. MAJUMDER, ADDL. C IT, DR FOR THE RESPONDENT N O N E ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE REVENUE IS AGAINST THE ORDER OF THE LD. CIT(A), CENTRAL- 1, KOLKATA DATED 11.12.2013 FOR AY 2008-09. 2. THE MAIN GROUND INVOLVED IN THIS APPEAL OF REVEN UE IS AGAINST THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.99,65,891/- O N ACCOUNT OF UNEXPLAINED INCOME (PROTECTIVE BASIS) AND DELETING THE ADDITION OF RS. 1,99,418/- ON ACCOUNT OF COMMISSION @ 2%. 3. THE BRIEF FACTS OF THE CASE ARE THAT CERTAIN INV ESTIGATION WAS CARRIED OUT BY THE DIRECTORATE OF INCOME TAX (INVESTIGATION), KOLKATA. THE DIRECTOR OF THE ASSESSEE COMPANY APPEARED BEFORE THE DDIT (INV) AND HIS STATEMENT WA S RECORDED U/S 131 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). T HE SAID DIRECTOR ADMITTED IN HIS STATEMENT BEFORE THE DDIT (INV) THAT THE ASSESSEE COMPANY HAD ISSUED CHEQUES TO DIFFERENT MUMBAI- BASED COMPANIES IN LIEU OF EQUAL AMOUNT OF CASH REC EIVED FROM THEM. HOWEVER, THE SAID DIRECTOR LATER RETRACTED THE ADMISSION BY FILING A SWORN AFFIDAVIT WHICH HAS BEEN 2 ITA NO. 366/KOL/2014 M/S. PENTEX EXPRO PVT. LTD., A Y- 2008-09 ACKNOWLEDGED BY THE AO IN HIS ASSESSMENT ORDER. THE AO REJECTED THE RETRACTION, AND THEN, PROCEEDED ON THE BASIS OF THE EARLIER ADMISSION THA T CHEQUES WERE ISSUED IN LIEU OF CASH. THE AO FOUND THAT THE ASSESSEE COMPANY HAD ISSUED CHEQU ES TOTALLING TO RS. 99,65,891/ - DURING THE RELEVANT YEAR TO DIFFERENT MUMBAI-BASED COMPANI ES. THE AO HELD THAT THE CASH RECEIVED BY THE ASSESSEE FROM SUCH COMPANIES WAS ASSESSABLE IN THEIR HANDS. HOWEVER, THE AO ADDED THE ENTIRE AMOUNT OF RS.99,65,891/- ON PROTECTIVE B ASIS IN THE HANDS OF THE ASSESSEE COMPANY AS UNEXPLAINED INCOME. THE AO ALSO HELD THA T THE ASSESSEE COMPANY HAD EARNED COMMISSION @ 2% ON THE ACCOMMODATION ENTRIES PROVID ED TO THE MUMBAI BASED COMPANIES THEREBY MAKING ADDITION OF RS.1,99,318/ -. AGGRIEVE D, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO DELETED BOTH THE ADDITIONS STAT ING THAT THE ISSUES INVOLVED IN THIS APPEAL ARE COVERED BY THE ORDERS OF HIS PREDECESSOR LD. CI T(A), CENTRAL-1, KOLKATA AND THE ORDER OF JURISDICTIONAL ITAT, KOLKATA IN THE CASE OF M/S. STAR TRAFIN PVT. LTD. (I.T.A.NO.59- 60/KOL/2011, M/S. PNR HOLDING PVT. LTD (I.T.A. NO.6 1-62/(KOL/2011, M/S. AMIT GOODS SUPPLIES PVT. LTD. (I.T.A.NO. 63-64 / KOL/20 11, M/ S. LITON CONSULTANCY PVT. LTD. (I.T.A. NO. 71-72 /KOL/2011, M/S. GLAMAR VANIJYA PVT LTD. ( I. T.A.NO. 308/309 /KOL/2011, M/S. CUBE TRAFIN PVT LTD., (I.T.A.NO. 312-13 /KOL/2011) M/S. IRIS COMMERCIAL PVT. LTD., (I.T.A. NO. 394-95 /KOL/2011 ON IDENTICAL ADDITIONS MADE BY THE A.O. CONSIDERING IDENTICAL FACTS. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ISSUE ON HAND IS SQUARELY CO VERED BY THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT VS. TOPOGRAIN MANAGEMENT PVT. LTD. IN ITA NOS. 524 & 525/KOL/2014 FOR AYS 2005-06 AND 2006-07 AND ITA NO. 1866/KOL/2013 FOR AY 2007- 08 DATED 08.02.2019 WHEREIN THE TRIBUNAL HAS HELD A S UNDER: 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY. THE 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 COO PERATIVE BANK AT MUMBAI, WHICH WAS CONTROLLED BY SHRI KETAN PAREKH. SINCE THE ASSESSEE- COMPANY WAS ONE OF SUCH ENTITIES, THE STATEMENT OF ITS DIRECTOR SHRI PRAMOD SHARMA WAS RECORDED UNDER SECTION 131 BY THE DDIT(I NVESTIGATION), KOLKATA ON 15.12.2006. IN THE SAID STATEMENT GIVEN ON OATH, SHRI PRAMOD 3 ITA NO. 366/KOL/2014 M/S. PENTEX EXPRO PVT. LTD., A Y- 2008-09 SHARMA ACCEPTED THAT HE HAD GOT CASH OF EQUIVALENT AMOUNT FROM THE MUMBAI BASED COMPANIES BELONGING TO SHRI KETAN PARE KH GROUP AND AFTER DEPOSITING THE SAID CASH INTO THE BANK ACCOUNT OF T HE ASSESSEE-COMPANY, CHEQUES WERE ISSUED TO THE SAID COMPANIES. HE ALSO FURNISHED A LIST OF CHEQUES SO ISSUED AGAINST CASH THAT HAD BEEN RECEIV ED BY HIM. ALTHOUGH SHRI PRAMOD SHARMA SUBSEQUENTLY FILED AN AFFIDAVIT RETRACTING HIS STATEMENT, 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 COMPANIES BELON GING TO KETAN PAREKH GROUP. HE ACCORDINGLY HELD THAT ACCOMMODATION ENTRI ES WERE GIVEN BY THE ASSESSEE-COMPANY TO VARIOUS MUMBAI 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 T O RS.23,48,45,847/-, HE ADDED THE COMMISSION INCOME @ 2% AMOUNTING TO RS.46 ,96,907/- TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMP LETED 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 OBSERVING THAT THE UNE XPLAINED INCOME TO THAT EXTENT IN THE FORM OF CASH GIVEN BY THE MUMBAI BASE D COMPANIES WAS ASSESSABLE ON SUBSTANTIVE 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 THE ASSESSMENTS MADE UNDER SECTION 1 43(3)/147 VIDE ORDERS DATED 31.12.2008, HE MADE SIMILAR ADDITION ON ACCOU NT OF COMMISSION INCOME AT THE RATE OF 2% AMOUNTING TO RS.83,74,760/ - AND RS.37,43,840/- TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2005-06 A ND 2007-08 RESPECTIVELY. HE ALSO MADE ADDITIONS OF RS.41,87,38,000/- AND RS. 18,71,92,000/- SIMILARLY ON PROTECTIVE BASIS IN THE ASSESSMENTS CO MPLETED UNDER SECTION 143(3)/147 FOR A.YS. 2005-06 AND 2006-07 RESPECTIVE LY FOR THE TOTAL AMOUNT OF ACCOMMODATION ENTRIES PROVIDED BY THE ASSESSEE-C OMPANY TO THE MUMBAI BASED COMPANIES BELONGING TO KETAN PAREKH GROUP OBS ERVING THAT UNEXPLAINED INCOME TO THAT EXTENT WAS LIABLE TO BE ASSESSED ON SUBSTANTIVE BASIS IN THE HANDS OF THE SAID COMPANIES FOR THE CA SH GIVEN TO THE ASSESSEE- COMPANY. THE ASSESSING OFFICER MADE FURTHER ADDITIO NS OF RS.3,06,62,000/- AND RS.32,85,000/- TO THE TOTAL INCOME OF THE ASSES SEE FOR A.Y. 2005-06 AND 2006-07 RESPECTIVELY ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS FOUND TO BE MADE 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 ASSESEE -COMPANY BEFORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD . CIT(APPEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2005-06 ON ACCOUNT OF THE ALLEGED ACCOMMOD ATION ENTRIES GIVEN TO THE MUMBAI BASED COMPANIES IN THE FORM OF COMMISSIO N INCOME AT THE RATE OF 2% AS WELL AS FURTHER ADDITION ON ACCOUNT OF PRO TECTIVE BASIS FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 6 OF HIS I MPUGNED ORDER:- 4 ITA NO. 366/KOL/2014 M/S. PENTEX EXPRO PVT. LTD., A Y- 2008-09 6. I HAVE PERUSED THE RELEVANT ORDERS AND CONSIDER ED THE MATERIAL PLACED ON RECORD. I FIND FROM THE APPEAL FOLDER THAT IN CO URSE OF THE APPELLATE PROCEEDINGS, MY LEARNED PREDECESSOR TRIED TO ASCERT AIN ABOUT THE CASES WHERE SUBSTANTIVE ADDITIONS WERE MADE CORRESPONDING TO THE PROTECTIVE ADDITION IN THE PRESENT CASE; AND ALSO, ABOUT THE F ATE OF THE APPEALS IN THOSE CASES. THE LD CIT(A) CALLED FOR THE REPORT VI DE HIS LETTER DATED 23-07- 2009 WHICH WAS FOLLOWED BY REMINDERS DATED 17-08-20 10, 13-07-2011, 30- 10-2013 AND 19-11-2013. HOWEVER, THOUGH A SUBSTANTI AL PERIOD OF 4 & 1/2 YEARS HAS ELAPSED, NOTHING HAS BEEN HEARD IN THIS R EGARD FROM THE AO. IN THIS FACTUAL BACKGROUND; GIVEN THE FACTS OF THE CAS E AND THE FINDINGS OF THE AO IN HIS ASSESSMENT ORDER;' AND ALSO, THE DECISION S OF THE HON'BLE BENCHES OF THE JURISDICTIONAL ITAT IN SIMILAR CASES INVOLVI NG IDENTICAL FACTS AND CIRCUMSTANCES, THE PRESENT APPEALS NOW BEING DECIDE D ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. I FIND THAT THE AO HA S MADE THE ADDITIONS ON THE BASIS OF THE ADMISSION MADE BY THE DIRECTOR BEF ORE THE DDIT(INV) WHICH WAS LATER RETRACTED. IT IS A SETTLED LEGAL PROPOSIT ION THAT A MERE ADMISSION WHICH IS LATER RETRACTED AND WHICH IS NOT CORROBORA TED OR SUPPORTED BY ANY INDEPENDENT MATERIAL CANNOT BE MADE THE BASIS .FOR' ADDITION. ONCE THE ADMISSION MADE BY THE DIRECTOR WAS RETRACTED, THE O NUS WAS ON THE AO TO BRING POSITIVE MATERIAL ON RECORD WHICH COULD CORR OBORATE OR SUPPORT THE ADMISSION. BUT, IN THE PRESENT CASE, NO SUCH MATERI AL HAS BEEN BROUGHT ON RECORD BY THE AO. ON THE CONTRARY, THE AO HAS SIMPL Y REJECTED THE RETRACTION WITHOUT ASSIGNING ANY REASON. THE AO HAS NOT EVEN DISCUSSED IN HIS ASSESSMENT ORDER AS TO WHY THE RETRACTION MADE- BY THE DIRECTOR THROUGH A SWORN AFFIDAVIT WAS NOT ACCEPTABLE TO HIM. MOREOV ER, THE AO HAS BROUGHT ON RECORD NO INDEPENDENT MATERIAL WHICH COULD POSSI BLY CORROBORATE OR SUPPORT THE ADMISSION MADE EARLIER BY THE DIRECTOR OF THE ASSESSEE COMPANY. IN THIS FACTUAL BACKGROUND, I AM OF THE CO NSIDERED VIEW THAT THE AO HAS ERRED IN LAW AS WELL AS ON FACTS IN RESTING HIS ASSESSMENT ON THE ADMISSION OF THE DIRECTOR WHICH WAS LATER RETRACTED AND WHICH WAS NOT CORROBORATED OR SUPPORTED BY ANY INDEPENDENT MATERI AL 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 FINDING IN HIS ASSESSMENT ORDER THAT THE ASSESSEE C OMPANY HAD ISSUED CHEQUES BY TAKING EQUAL AMOUNT OF CASH FROM VARIOUS COMPANIES; AND THAT, SUCH CASH WAS ASSESSABLE AS UNEXPLAINED INCOME IN T HE HANDS OF THOSE COMPANIES. THE AO HAS THEN ADDED THE SAME CASH ON P ROTECTIVE BASIS AS UNEXPLAINED INCOME OF THE ASSESSEE COMPANY WITHOUT ASSIGNING ANY CONCRETE REASONS. I FIND NO BASIS OR JUSTIFICATION FOR THE AO TO CONSIDER ON PROTECTIVE BASIS 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 A CCOMMODATION ENTRIES. THE ADDITION ON PROTECTIVE BASIS ON ACCOUN T OF UNEXPLAINED CASH BY THE AO CONTRADICTS HIS OWN FINDINGS THAT SUCH CASH WAS ASSESSABLE AS UNEXPLAINED INCOME IN THE 'HANDS OF THE VARIOUS COM PANIES WHO HAD ALLEGEDLY PURCHASED ACCOMMODATION ENTRIES. ABOVE AL L, IDENTICAL ADDITIONS MADE BY THE AO IN SIMILAR CASES WERE DELETED BY MY LEARNED PREDECESSOR AS WELL AS BY THE HON'BLE BENCHES OF THE JURISDICTIONA L ITAT. IN OTHER WORDS, SIMILAR ADDITIONS BASED ON THE ADMISSION OF THE DIR ECTOR OF THE COMPANY WHICH WAS LATER RETRACTED WAS DELETED BY THE JURISD ICTIONAL ITAT IN THE ASSESSMENT OF SUCH COMPANY. IN THESE CASES, THE DIR ECTOR OF THE COMPANY 5 ITA NO. 366/KOL/2014 M/S. PENTEX EXPRO PVT. LTD., A Y- 2008-09 MADE ADMISSION REGARDING PROVIDING ACCOMMODATION EN TRY IN LIEU OF CASH WHICH WAS LATER RETRACTED. THOUGH THE AO MADE SIMIL AR ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH AND COMMISSION INCOME I N THE CASE OF THE COMPANY, THE SAME WAS DELETED BY THE LD CIT(A) AS W ELL AS BY THE JURISDICTIONAL ITAT. THE ISSUES IN THE PRESENT APPE AL ARE THUS COVERED BY THE ORDERS OF THE HON'BLE BENCHES OF THE .JURISDICT IONAL ITAT WHEREIN SIMILAR ADDITIONS, MADE UNDER IDENTICAL FACTS AND C IRCUMSTANCES, WERE DELETED. RESPECTFULLY FOLLOWING THE DECISIONS OF TH E JURISDICTIONAL ITAT, IT IS TO BE HELD THAT THE ADDITIONS MADE BY THE AO ON ACC OUNT OF UNEXPLAINED CASH AND COMMISSION INCOME IS NEITHER SUSTAINABLE I N LAW NOR ON FACTS. THE ADDITIONS OF RS.41,87,38,000/- AND RS.83,74,760/- I S 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 SIMILAR A DDITIONS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESS EE FOR A.Y. 2006-07 AND 2007-08 ON ACCOUNT OF THE ALLEGED ACCOMMODATION ENT RIES GIVEN TO THE MUMBAI BASED COMPANIES IN THE FORM OF COMMISSION IN COME AND FURTHER ADDITION ON ACCOUNT OF PROTECTIVE 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 MADE IN THE B ANK ACCOUNTS, THE LD. CIT(APPEALS) DID NOT FIND THE SAME TO BE SUSTAINABL E FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 8 OF HIS IMPUGNED OR DER:- 8. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE REMAND REPORTS OF THE AO. IT WAS CONTENDED BEFORE ME THAT THE CASH DEPOSI TS IN THE BANK ACCOUNT WAS VERIFIABLE FROM THE CASH BOOK OF THE ASSESSEE C OMPANY. IT WAS FURTHER CONTENDED THAT THE CASH BALANCES AVAILABLE IN THE C ASH BOOK WERE DUE TO CASH WITHDRAWALS MADE EARLIER FROM THE BANK ACCOUNT (WHICH WAS VERIFIABLE FROM THE BANK STATEMENT) AND THE SALE PROCEEDS OF S HARES (WHICH WAS DULY SUPPORTED BY SALES INVOICES). THE AO HAS ADMITTED I N HIS REMAND REPORTS THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WERE VER IFIABLE FROM THE CASH BOOK WHICH WAS PRODUCED BEFORE HIM IN COURSE OF THE REMAND PROCEEDINGS. THE AO HAS FURTHER ADMITTED THAT THE SALE PROCEEDS OF SHARES REFLECTED IN THE CASH BOOK ARE DULY SUPPORTED BY SALES INVOICES WHICH WERE ALSO PRODUCED BEFORE HIM. THE AO HAS FOUND NO DEFECT IN THE CASH BOOK OF THE ASSESSEE COMPANY. THE AO HAS NOT POINTED OUT ANY RE CEIPTS RECORDED IN THE CASH BOOK WHOSE SOURCE WAS HOT EXPLAINED. .THE REMA ND REPORTS OF THE AO CONTAIN NO ADVERSE FINDING OR REMARK ABOUT THE CASH BOOK. IN THIS FACTUAL BACKGROUND, THE ONLY CONCLUSION THAT CAN POSSIBLY B E DRAWN IS THAT THE CASH DEPOSITS IN THE BANK ACCOUNT ARE EXPLAINED WITH REF ERENCE TO THE CASH BOOK OF THE ASSESSEE COMPANY. THE AO HAS NOTED IN HIS RE MAND REPORTS THAT APART FROM THE BANK STATEMENT, CASH 'BOOK AND THE SALES I NVOICES, THE ASSESSEE COULD PRODUCE NO OTHER EVIDENCE FOR VERIFICATION. B UT THEN, IT HAS NOT BEEN CLARIFIED BY THE AO AS TO WHAT MORE EVIDENCE HE REQ UIRED THE ASSESSEE TO PRODUCE FOR VERIFICATION. THE AO HAS OBSERVED THAT THE TRANSACTIONS IN SHARES WERE MADE IN CASH. BUT THEN, THE SALES INVOI CES ALONGWITH THE PAN OF THE BUYERS WAS PRODUCED BEFORE THE AO IN COURSE OF THE REMAND PROCEEDINGS AND THE REMAND REPORTS CONTAIN NO ADVER SE FINDINGS IN THIS 6 ITA NO. 366/KOL/2014 M/S. PENTEX EXPRO PVT. LTD., A Y- 2008-09 REGARD. I THEREFORE AGREE WITH THE LD AR THAT THERE IS NO ADVERSE FINDING IN THE REMAND REPORTS OF THE AO. THE AO HAS CATEGORICA LLY ADMITTED THAT THE BANK STATEMENT, CASH BOOK AND SALES INVOICES WERE P RODUCED BEFORE HIM AND THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WERE VER IFIABLE FROM THE CASH BOOK. I AM THEREFORE OF THE CONSIDERED VIEW THAT SU CH CASH DEPOSITS IN THE BANK ACCOUNT WHICH WERE DULY VERIFIABLE FROM THE CA SH BOOK OF THE ASSESSEE COMPANY COULD NOT BE TREATED AS ITS UNDISCLOSED INC OME. THE ADDITION OF RS.3,06,62,000/- IS DELETED. GROUND NO 4 IS ALLOWED . GROUND NO 5 IS DIRECTED AGAINST THE INITIATION OF PENALTY PROCEEDI NGS U/S.271(1)(C) WHICH IS PREMATURE FOR ADJUDICATION AT THIS STAGE. HENCE, GR OUND 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 SIMILAR ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DE POSITS FOUND TO BE MADE IN THE BANK ACCOUNTS OF THE ASSESSEE FOR A.Y. 2006-07 WAS NOT SUSTAINABLE. ACCORDINGLY HE DELETED THESE ADDITIONS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y S. 2005-06 AND 2006-07. AGGRIEVED BY THE ORDERS OF THE LD. CIT(APPEALS) GIV ING RELIEF TO THE ASSESSEE FOR ALL THE THREE YEARS UNDER CONSIDERATIO N, THE REVENUE HAS PREFERRED THESE APPEALS 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 APPEALS A RE, THEREFORE, BEING DISPOSED OF EX-PARTE QUA THE RESPONDENT-ASSESSEE AFTER HEARING THE ARGUMENTS OF THE LD. D.R. AND PERUSING THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE TWO COMMON ISSUES INVOLVED IN ALL THESE THREE APPEALS RELATE TO THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITIO NS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED ACCOMMODATION ENTRIES GIVEN TO THE MUMBAI BASED COMPANIES ON PROTECTIVE BASIS AND THE DELETIO N BY THE LD. CIT(APPEALS) OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF COMMISSION INCOME ALLEGEDLY RECEIVED BY THE ASSESSE E FOR GIVING ACCOMMODATION ENTRIES. IT IS OBSERVED THAT THE SIMI LAR ISSUES WERE INVOLVED IN SOME OTHER CASES AND ALL THESE CASES WERE ADJOUR NED IN THE PAST AND ALSO BLOCKED FOR 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 HAVE FAILED TO FURNISH THE SAID INFORMATION. IT IS WELL SETTLED THAT PROTECTIVE ASSESSMENT IS PERMISSIBLE IN LAW AND IN CASE A DOUBT OR AMBIGU ITY ABOUT REAL ENTITY IN WHOSE HANDS A PARTICULAR INCOME IS TO BE ASSESSED, THE ASSESSING AUTHORITY IS ENTITLED TO HAVE RECOURSE TO MAKE A PROTECTIVE ASSE SSMENT. AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF LALJI HARIDAS VS.- ITO (43 ITR 387), THE OFFICER MAY, WHEN IN DOUBT, TO SAFEGUARD THE IN TEREST OF THE REVENUE CAN ASSESS IT IN MORE THAN ONE HAND BUT THIS PROCEDURE CAN BE PERMITTED ONLY AT THE STAGE OF ASSESSMENT. PROTECTIVE ASSESSMENT BECO MES REDUNDANT WHEN THE SUBSTANTIVE ASSESSMENT BECOMES FINAL AND IF THE SUB STANTIVE ASSESSMENT FAILS, IT IS PROTECTIVE ASSESSMENT WHICH IS TO BE T REATED AS SUBSTANTIVE. KEEPING IN VIEW THIS COROLLARY BETWEEN THE SUBSTANT IVE ASSESSMENT AND PROTECTIVE ASSESSMENT, AN APPEAL AGAINST THE PROTEC TIVE ASSESSMENT SHOULD ORDINARILY AWAIT THE OUTCOME OF THE SUBSTANTIVE ASS ESSMENT SO THAT THE PROTECTIVE ASSESSMENT CAN BE INCONFORMITY WITH THE SUBSTANTIVE ASSESSMENT. 7 ITA NO. 366/KOL/2014 M/S. PENTEX EXPRO PVT. LTD., A Y- 2008-09 IN THE CASE OF CIT VS.- SURENDRA GULAB CHAND MODI (140 ITR 517), THE APPEAL ARISING OUT OF THE PROTECTIVE ASSESSMENT WAS DISPOSED OF BY THE APPELLATE AUTHORITY I.E. TRIBUNAL VACATING THE PROT ECTIVE ASSESSMENT WITHOUT WAITING FOR THE FINAL OUTCOME OF THE PROCEEDINGS AR ISING FROM THE SUBSTANTIVE ASSESSMENT, WHICH MATTER WAS PENDING IN THE HONBLE SUPREME COURT. THE HONBLE GUJARAT HIGH COURT HELD THAT THE TRIBUNAL WAS NOT JUSTIFIED IN PROCEEDING WITH THE MATTER AND IN DISP OSING OF IT INSTEAD OF BLOCKING IT TILL THE DISPOSAL OF THE MATTER PENDING IN THE HONBLE SUPREME COURT IN ORDER TO BRING IT INCONFORMITY WITH THE VI EW OF THE HONBLE SUPREME COURT. THE HONBLE GUJARAT HIGH COURT ACCOR DINGLY DIRECTED THE TRIBUNAL TO KEEP THE MATTER ALIVE AND PENDING AWAIT ING THE DECISION OF THE HONBLE SUPREME COURT IN THE PROCEEDINGS ARISING FR OM 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 ASSESS MENT AND SINCE THE SAID INFORMATION WAS NOT FORTHCOMING EVEN AFTER A CONSID ERABLE PERIOD FROM THE CONCERNED ASSESSING OFFICER, HE PROCEEDED TO DISPOS E OF THE APPEALS ARISING FROM THE PROTECTIVE ASSESSMENTS BY HIS IMPUGNED ORD ERS AND DELETED THE ADDITION MADE ON PROTECTIVE BASIS WITHOUT AWAITING THE FINAL OUTCOME OF THE PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASSESSMENT . KEEPING IN VIEW THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS.- SURENDRA GULAB CHAND MODI (SUPRA), WE HOLD THAT THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON PROTECTIVE BASIS IN ALL THE THREE YEARS UNDER CONSI DERATION WITHOUT AWAITING FOR THE FINAL OUTCOME OF THE PROCEEDINGS ARISING FR OM THIS 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 THE PROCEEDIN GS 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 BASIS O N ACCOUNT OF ACCOMMODATION ENTRIES ALLEGEDLY GIVEN BY THE ASSESS EE-COMPANY TO THE MUMBAI BASED COMPANIES. SINCE THE SAID ISSUE IS REM ITTED BACK BY US TO THE LD. CIT(APPEALS), WE ALSO REMIT THE CONSEQUENTIAL I SSUE RELATING TO ADDITION ON ACCOUNT OF COMMISSION INCOME 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 CONSIDERATION ARE ACCORDINGLY TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. AS REGARDS THE REMAINING THIRD ISSUE RELATING TO THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS FOUND TO BE MADE IN THE B ANK ACCOUNT OF THE ASSESSEE, WHICH IS INVOLVED IN A.Y. 2005-06 AND 200 6-07, WE FIND THAT THE IMPUGNED CASH DEPOSITS WERE CLAIMED TO BE MADE BY T HE ASSESSEE OUT OF CASH BALANCES AVAILABLE IN THE CASH BOOK ON THE RES PECTIVE DATES AS WELL AS THE SALE PROCEEDS OF SHARES AND IN HIS REMAND REPOR T SUBMITTED TO THE LD. CIT(APPEALS), THIS CLAIM OF THE ASSESSEE WAS ACCEPT ED BY THE ASSESSING 8 ITA NO. 366/KOL/2014 M/S. PENTEX EXPRO PVT. LTD., A Y- 2008-09 OFFICER HIMSELF BY STATING THAT THE CASH DEPOSITS I N THE BANK ACCOUNT WERE VERIFIABLE FROM THE CASH BOOK WHICH WAS PRODUCED BE FORE HIM AND EVEN THE SALE PROCEEDS OF SHARES REFLECTED IN THE CASH BOOK WERE DULY SUPPORTED BY SALES INVOICES WHICH WERE ALSO PRODUCED BEFORE HIM. KEEPING IN VIEW THIS REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER AC CEPTING THE CLAIM OF THE ASSESSEE REGARDING THE AVAILABILITY OF CASH FOR DEP OSITS MADE IN THE BANK ACCOUNT AFTER VERIFICATION, THE LD. CIT(APPEALS) DE LETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE ALLEGED UNEXPLAINED CASH DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNT OF TH E ASSESSEE AND WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDERS OF TH E LD. CIT(APPEALS) GIVING RELIEF TO THE ASSESSEE ON THIS ISSUE FOR A.Y . 2005-06 AND 2006-07. EVEN THE LD. D.R. HAS NOT RAISED ANY MATERIAL CONTE NTION IN THIS REGARD. WE ACCORDINGLY UPHOLD THE IMPUGNED ORDER OF THE LD. CI T(APPEALS) ON THIS ISSUE AND DISMISS GROUND NO. 3 OF THE REVENUES APP EALS 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 STATISTIC AL PURPOSES, WHILE THE APPEAL OF THE REVENUE FOR A.Y. 2007-08 IS TREATED A S ALLOWED FOR STATISTICAL PURPOSES. 5. WE NOTE THAT THERE ARE TWO ISSUES INVOLVED IN TH E APPEAL BEFORE US AND ARE IDENTICAL I.E. ONE ISSUE RELATES TO THE ACTION OF THE LD. CIT(A) DELETING THE ADDITION OF RS.99,65,891/- MADE BY THE AO ON ACCOUNT OF ALLEGED ACCOMMODATION ENTRIES GIVEN TO MUMBAI BASED COMPANIES AS PROTECTIVE BASIS; AND THE OTHER ISSUE RELATES TO THE ADDITION MADE BY THE AO ON ACCOUNT OF COMMISSION IN COME ALLEGEDLY RECEIVED BY THE ASSESSEE FOR GIVING ACCOMMODATION ENTRIES WHICH ALS O HAS BEEN DELETED BY THE LD. CIT(A) ON BOTH THE ISSUES. WE RESPECTFULLY FOLLOWIN G THE ORDER OF THE TRIBUNAL CITED SUPRA SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT( APPEALS) ON THESE ISSUES. AS REGARDS THE FIRST ISSUE I.E. ADDITION M ADE BY AO ON PROTECTIVE BASIS, WE REMIT THE MATTER BACK TO HIM FOR KEEPING IT ALIVE AND PENDING TILL THE OUTCOME OF THE PROCEEDINGS ARISING FROM TH E SUBSTANTIVE ASSESSMENT. AS REGARDS THE ISSUE RELATING TO THE AD DITIONS MADE ON ACCOUNT OF COMMISSION INCOME ALLEGEDLY RECEIVED BY THE ASSESSEE FOR GIVING ACCOMMODATION ENTRIES, WE FIND THAT THIS ISS UE IS CONSEQUENTIAL TO THE ISSUE RELATING TO THE ADDITION MADE ON PROTECTI VE BASIS ON ACCOUNT OF ACCOMMODATION ENTRIES ALLEGEDLY GIVEN BY THE ASSESS EE-COMPANY TO THE MUMBAI BASED COMPANIES. SINCE THE SAID ISSUE IS REM ITTED BACK BY US TO 9 ITA NO. 366/KOL/2014 M/S. PENTEX EXPRO PVT. LTD., A Y- 2008-09 THE LD. CIT(APPEALS), WE ALSO REMIT THE CONSEQUENTI AL ISSUE RELATING TO ADDITION ON ACCOUNT OF COMMISSION INCOME BACK TO TH E LD. CIT(APPEALS) FOR DECIDING THE SAME AFRESH. THEREFORE, REVENUES APPEAL FOR THE YEAR UNDER CONSIDERATION IS ACCORDINGLY TREATED AS ALLOW ED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 25TH SEPT EMBER, 2019. SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25TH SEPTEMBER, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT DCIT, CENTRAL CIRCLE-VII, KOLKATA. 2 RESPONDENT M/S. PENTEX EXPRO PVT. LTD., 1, R. N . MUKHERJEE ROAD, KOLKATA-700 001. . 3. 4. CIT(A)-1, KOLKATA CIT-, , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) /TRUE COPY, BY ORDER, ASSISTANT REGISTRAR