DCIT,CC-VII, KOLKATA, Kolkata V. M/s Topgrain Management Pvt. Ltd., Kolkata

ITA 524/KOL/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4728 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 25-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Initiation of penalty proceedings; Accommodation entries; Retraction
• Section: 143(3); 131

Judgement Text

I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NOS. 524 & 525/KOL/2014 ASSESSMENT YEARS: 2005-2006 & 2006-2007 & I.T.A. NO. 1866/KOL/2013 ASSESSMENT YEAR: 2007-2008 DEPUTY COMMISSIONER OF INCOME TAX,...... .........APPELLANT CENTRAL CIRCLE-VII, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700 107 -VS.- M/S. TOPGRAIN MANAGEMENT PVT. LIMITED,.... ........RESPONDENT 27A, METCALF STREET, KOLKATA-700 001 APPEARANCES BY: DR. P.K. SRIHARI, CIT (D.R.), FOR THE APPELLANT N O N E, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JANUARY 28, 2019 DATE OF PRONOUNCING THE ORDER : FEBRUARY 08, 2019 O R D E R PER BENCH:- THESE THREE APPEALS ARE PREFERRED BY THE REVENUE A GAINST THREE SEPARATE ORDERS PASSED BY THE LD. COMMISSIONER OF I NCOME TAX (APPEALS), CENTRAL-I, KOLKATA DATED 22.01.2014, 22.01.2014 AND 28.03.2013 FOR A.Y. 2005-06, 2006-07 AND 2007-08 RESPECTIVELY AND SINCE THE ISSUES INVOLVED THEREIN ARE COMMON, THE SAME HAVE BEEN HEARD TOGETH ER AND ARE BEING DISPOSED OF BY A SINGLE CONSOLIDATED ORDER. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY. T HE INVESTIGATION CARRIED OUT BY THE DEPARTMENT OF INCOME TAX (INVEST IGATION), KOLKATA I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 2 REVEALED THAT SOME ENTITIES WERE INVOLVED IN PROVID ING ACCOMMODATION ENTRIES TO VARIOUS COMPANIES BASED IN MUMBAI, WHICH IN TURN HAD USED THE SAID FUNDS FOR PAYMENTS TO MADHIPURA MERCANTILE COOPERATIVE BANK AT MUMBAI, WHICH WAS CONTROLLED BY SHRI KETAN 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(INVESTIGATION), KOLKATA ON 15.12.2006. IN THE SAID STATEMENT GIVEN ON OATH, SHRI PRAMOD SHARMA ACCEPTED THAT HE HAD GO T CASH OF EQUIVALENT AMOUNT FROM THE MUMBAI BASED COMPANIES BELONGING TO SHRI KETAN PAREKH GROUP AND AFTER DEPOSITING THE SAID CASH INT O THE BANK ACCOUNT OF THE ASSESSEE-COMPANY, CHEQUES WERE ISSUED TO THE SA ID COMPANIES. HE ALSO FURNISHED A LIST OF CHEQUES SO ISSUED AGAINST CASH THAT HAD BEEN RECEIVED BY HIM. ALTHOUGH SHRI PRAMOD SHARMA SUBSEQ UENTLY FILED AN AFFIDAVIT RETRACTING HIS STATEMENT, THE ASSESSING O FFICER 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 ACCOUNTS IN DIFFERENT STAGES. ACCORDING TO THE ASSESSING OFFICER, THIS FACTUAL POSITION SUBSTANTIATED THE STATEMENT OF SHR I PRAMOD SHARMA, DIRECTOR OF THE ASSESSEE-COMPANY THAT CASH WAS INDE ED RECEIVED BY THE ASSESSEE-COMPANY IN LIEU OF CHEQUES GIVEN TO VARIOU S COMPANIES BELONGING TO KETAN PAREKH GROUP. HE ACCORDINGLY HEL D THAT ACCOMMODATION ENTRIES WERE GIVEN BY THE ASSESSEE-CO MPANY TO VARIOUS MUMBAI BASED COMPANIES BELONGING TO KETAN PAREKH GR OUP AND SINCE THE ACCOMMODATION ENTRIES SO GIVEN DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2007-08 AGGREGATED TO RS.23,48,45,847/-, HE ADDED T HE COMMISSION INCOME @ 2% AMOUNTING TO RS.46,96,907/- TO THE TOTA L INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED FOR A.Y. 2007- 08 UNDER SECTION 143(3) VIDE AN ORDER DATED 29.12.2009. IN THE ASSES SMENT SO MADE, HE ALSO MADE AN ADDITION OF RS.23,48,45,847/- IN THE H ANDS OF THE ASSESSEE ON PROTECTIVE BASIS OBSERVING THAT THE UNEXPLAINED INCOME TO THAT EXTENT IN THE FORM OF CASH GIVEN BY THE MUMBAI BASED COMPA NIES WAS ASSESSABLE I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 3 ON SUBSTANTIVE BASIS IN THE HANDS OF THE SAID COMPA NIES. THE ASSESSING OFFICER ALSO REOPENED THE ASSESSMENTS FOR A.YS. 200 5-06 AND 2006-07 AND IN THE ASSESSMENTS MADE UNDER SECTION 143(3)/147 VI DE ORDERS DATED 31.12.2008, HE MADE SIMILAR ADDITION ON ACCOUNT OF COMMISSION INCOME AT THE RATE OF 2% AMOUNTING TO RS.83,74,760/- AND RS.3 7,43,840/- TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2005-06 AND 2 007-08 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 ASS ESSEE-COMPANY TO THE MUMBAI BASED COMPANIES BELONGING TO KETAN PAREK H GROUP OBSERVING THAT UNEXPLAINED INCOME TO THAT EXTENT WAS LIABLE T O BE ASSESSED ON SUBSTANTIVE BASIS IN THE HANDS OF THE SAID COMPANIE S FOR THE CASH GIVEN TO THE ASSESSEE-COMPANY. THE ASSESSING OFFICER MADE FU RTHER ADDITIONS OF RS.3,06,62,000/- AND RS.32,85,000/- TO THE TOTAL IN COME OF THE ASSESSEE FOR A.Y. 2005-06 AND 2006-07 RESPECTIVELY ON ACCOUN T 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 SUBMISSI ONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECOR D, 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 ALL EGED ACCOMMODATION ENTRIES GIVEN TO THE MUMBAI BASED COMPANIES IN THE FORM OF COMMISSION INCOME AT THE RATE OF 2% AS WELL AS FURTHER ADDITIO N ON ACCOUNT OF PROTECTIVE BASIS FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 6 OF HIS IMPUGNED ORDER:- 6. I HAVE PERUSED THE RELEVANT ORDERS AND CONSIDER ED THE MATERIAL PLACED ON RECORD. I FIND FROM THE APPEAL F OLDER THAT IN COURSE OF THE APPELLATE PROCEEDINGS, MY LEARNED I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 4 PREDECESSOR TRIED TO ASCERTAIN ABOUT THE CASES WHER E SUBSTANTIVE ADDITIONS WERE MADE CORRESPONDING TO TH E PROTECTIVE ADDITION IN THE PRESENT CASE; AND ALSO, ABOUT THE FATE OF THE APPEALS IN THOSE CASES. THE LD CIT(A) C ALLED FOR THE REPORT VIDE HIS LETTER DATED 23-07-2009 WHICH W AS FOLLOWED BY REMINDERS DATED 17-08-2010, 13-07-2011, 30-10- 2013 AND 19-11-2013. HOWEVER, THOUGH A SUBSTANTIAL PERIOD OF 4 & 1/2 YEARS HAS ELAPSED, NOTHING HAS BEEN HEAR D IN THIS REGARD FROM THE AO. IN THIS FACTUAL BACKGROUND; GIV EN THE FACTS OF THE CASE AND THE FINDINGS OF THE AO IN HIS ASSESSMENT ORDER;' AND ALSO, THE DECISIONS OF THE HON'BLE BENC HES OF THE JURISDICTIONAL ITAT IN SIMILAR CASES INVOLVING IDEN TICAL FACTS AND CIRCUMSTANCES, THE PRESENT APPEALS NOW BEING DE CIDED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. I FI ND THAT THE AO HAS MADE THE ADDITIONS ON THE BASIS OF THE ADMIS SION MADE BY THE DIRECTOR BEFORE THE DDIT(INV) WHICH WAS LATER RETRACTED. IT IS A SETTLED LEGAL PROPOSITION THAT A MERE ADMISSION WHICH IS LATER RETRACTED AND WHICH IS NOT CORROBORATED OR SUPPORTED BY ANY INDEPENDENT MATERI AL CANNOT BE MADE THE BASIS .FOR' ADDITION. ONCE THE A DMISSION MADE BY THE DIRECTOR WAS RETRACTED, THE ONUS WAS ON THE AO TO BRING POSITIVE MATERIAL ON RECORD WHICH COULD CORROBORATE OR SUPPORT THE ADMISSION. BUT, IN THE P RESENT CASE, NO SUCH MATERIAL HAS BEEN BROUGHT ON RECORD B Y THE AO. ON THE CONTRARY, THE AO HAS SIMPLY REJECTED THE RET RACTION WITHOUT ASSIGNING ANY REASON. THE AO HAS NOT EVEN D ISCUSSED IN HIS ASSESSMENT ORDER AS TO WHY THE RETRACTION MA DE-BY THE DIRECTOR THROUGH A SWORN AFFIDAVIT WAS NOT ACCEPTAB LE TO HIM. MOREOVER, THE AO HAS BROUGHT ON RECORD NO INDE PENDENT MATERIAL WHICH COULD POSSIBLY CORROBORATE OR SUPPOR T THE ADMISSION MADE EARLIER BY THE DIRECTOR OF THE ASSES SEE COMPANY. IN THIS FACTUAL BACKGROUND, I AM OF THE CO NSIDERED VIEW THAT THE AO HAS ERRED IN LAW AS WELL AS ON FAC TS IN RESTING HIS ASSESSMENT ON THE ADMISSION OF THE DIRE CTOR WHICH WAS LATER RETRACTED AND WHICH WAS NOT CORROBORATED OR SUPPORTED BY ANY INDEPENDENT MATERIAL ON RECORD. I ALSO FIND FROM THE ASSESSMENT ORDER THAT THE ADDITION ON ACCO UNT OF UNEXPLAINED CASH WAS MADE BY THE AO ON PROTECTIVE B ASIS. THE AO HAS HIMSELF GIVEN THE FINDING IN HIS ASSESSM ENT ORDER THAT THE ASSESSEE COMPANY HAD ISSUED CHEQUES BY TAK ING EQUAL AMOUNT OF CASH FROM VARIOUS COMPANIES; AND TH AT, SUCH CASH WAS ASSESSABLE AS UNEXPLAINED INCOME IN THE HA NDS OF THOSE COMPANIES. THE AO HAS THEN ADDED THE SAME CAS H ON PROTECTIVE BASIS AS UNEXPLAINED INCOME OF THE ASSES SEE COMPANY WITHOUT ASSIGNING ANY CONCRETE REASONS. I F IND NO BASIS OR JUSTIFICATION FOR THE AO TO CONSIDER ON PR OTECTIVE BASIS SUCH CASH AS UNEXPLAINED INCOME OF THE ASSESS EE COMPANY WHICH HE HIMSELF HELD WAS ASSESSABLE AS UNEXPLAINED INCOME IN THE HANDS OF THE VARIOUS COMP ANIES WHO HAD ALLEGEDLY PURCHASED ACCOMMODATION ENTRIES. THE I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 5 ADDITION ON PROTECTIVE BASIS ON ACCOUNT OF UNEXPLAI NED CASH BY THE AO CONTRADICTS HIS OWN FINDINGS THAT SUCH CA SH WAS ASSESSABLE AS UNEXPLAINED INCOME IN THE 'HANDS OF T HE VARIOUS COMPANIES WHO HAD ALLEGEDLY PURCHASED ACCOMMODATION ENTRIES. ABOVE ALL, IDENTICAL ADDITIO NS MADE BY THE AO IN SIMILAR CASES WERE DELETED BY MY LEARN ED PREDECESSOR AS WELL AS BY THE HON'BLE BENCHES OF TH E JURISDICTIONAL ITAT. IN OTHER WORDS, SIMILAR ADDITI ONS BASED ON THE ADMISSION OF THE DIRECTOR OF THE COMPANY WHI CH WAS LATER RETRACTED WAS DELETED BY THE JURISDICTIONAL I TAT IN THE ASSESSMENT OF SUCH COMPANY. IN THESE CASES, THE DIR ECTOR OF THE COMPANY MADE ADMISSION REGARDING PROVIDING ACCOMMODATION ENTRY IN LIEU OF CASH WHICH WAS LATER RETRACTED. THOUGH THE AO MADE SIMILAR ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH AND COMMISSION INCOME IN THE CA SE OF THE COMPANY, THE SAME WAS DELETED BY THE LD CIT(A) AS WELL AS BY THE JURISDICTIONAL ITAT. THE ISSUES IN THE PR ESENT APPEAL ARE THUS COVERED BY THE ORDERS OF THE HON'BL E BENCHES OF THE .JURISDICTIONAL ITAT WHEREIN SIMILAR ADDITIO NS, MADE UNDER IDENTICAL FACTS AND CIRCUMSTANCES, WERE DELET ED. RESPECTFULLY FOLLOWING THE DECISIONS OF THE JURISDI CTIONAL ITAT, IT IS TO BE HELD THAT THE ADDITIONS MADE BY T HE AO ON ACCOUNT OF UNEXPLAINED CASH AND COMMISSION INCOME I S NEITHER SUSTAINABLE IN LAW NOR ON FACTS. THE ADDITI ONS OF RS.41,87,38,000/- AND RS.83,74,760/- IS DIRECTED TO BE DELETED. GROUND NO 2 & 3 ARE ALLOWED . FOR ALMOST IDENTICAL REASONS AS GIVEN IN HIS IMPUGN ED ORDER FOR A.Y. 2005-06, THE LD. CIT(APPEALS) ALSO DELETED THE SIMI LAR ADDITIONS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE AS SESSEE FOR A.Y. 2006-07 AND 2007-08 ON ACCOUNT OF THE ALLEGED ACCOMMODATION ENTRIES GIVEN TO THE MUMBAI BASED COMPANIES IN THE FORM OF COMMISSIO N INCOME 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 M E THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WAS VERIFIABL E FROM THE I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 6 CASH BOOK OF THE ASSESSEE COMPANY. IT WAS FURTHER C ONTENDED THAT THE CASH BALANCES AVAILABLE IN THE CASH BOOK W ERE DUE TO CASH WITHDRAWALS MADE EARLIER FROM THE BANK ACCO UNT (WHICH WAS VERIFIABLE FROM THE BANK STATEMENT) AND THE SALE PROCEEDS OF SHARES (WHICH WAS DULY SUPPORTED BY SAL ES INVOICES). THE AO HAS ADMITTED IN HIS REMAND REPORT S THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WERE VERIFIAB LE FROM THE CASH BOOK WHICH WAS PRODUCED BEFORE HIM IN COUR SE OF THE REMAND PROCEEDINGS. THE AO HAS FURTHER ADMITTED THAT THE SALE PROCEEDS OF SHARES REFLECTED IN THE CASH B OOK ARE DULY SUPPORTED BY SALES INVOICES WHICH WERE ALSO PR ODUCED BEFORE HIM. THE AO HAS FOUND NO DEFECT IN THE CASH BOOK OF THE ASSESSEE COMPANY. THE AO HAS NOT POINTED OUT AN Y RECEIPTS RECORDED IN THE CASH BOOK WHOSE SOURCE WAS HOT EXPLAINED. .THE REMAND REPORTS OF THE AO CONTAIN NO ADVERSE FINDING OR REMARK ABOUT THE CASH BOOK. IN THIS FACT UAL BACKGROUND, THE ONLY CONCLUSION THAT CAN POSSIBLY B E DRAWN IS THAT THE CASH DEPOSITS IN THE BANK ACCOUNT ARE E XPLAINED WITH REFERENCE TO THE CASH BOOK OF THE ASSESSEE COM PANY. THE AO HAS NOTED IN HIS REMAND REPORTS THAT APART FROM THE BANK STATEMENT, CASH 'BOOK AND THE SALES INVOICES, THE A SSESSEE COULD PRODUCE NO OTHER EVIDENCE FOR VERIFICATION. B UT THEN, IT HAS NOT BEEN CLARIFIED BY THE AO AS TO WHAT MORE EV IDENCE HE REQUIRED THE ASSESSEE TO PRODUCE FOR VERIFICATION. THE AO HAS OBSERVED THAT THE TRANSACTIONS IN SHARES WERE MADE IN CASH. BUT THEN, THE SALES INVOICES ALONGWITH THE PAN OF T HE BUYERS WAS PRODUCED BEFORE THE AO IN COURSE OF THE REMAND PROCEEDINGS AND THE REMAND REPORTS CONTAIN NO ADVER SE FINDINGS IN THIS REGARD. I THEREFORE AGREE WITH THE LD AR THAT THERE IS NO ADVERSE FINDING IN THE REMAND REPORTS O F THE AO. THE AO HAS CATEGORICALLY ADMITTED THAT THE BANK STA TEMENT, CASH BOOK AND SALES INVOICES WERE PRODUCED BEFORE H IM AND THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WERE VER IFIABLE FROM THE CASH BOOK. I AM THEREFORE OF THE CONSIDERE D VIEW THAT SUCH CASH DEPOSITS IN THE BANK ACCOUNT WHICH W ERE DULY VERIFIABLE FROM THE CASH BOOK OF THE ASSESSEE COMPA NY COULD NOT BE TREATED AS ITS UNDISCLOSED INCOME. THE ADDIT ION OF RS.3,06,62,000/- IS DELETED. GROUND NO 4 IS ALLOWED . GROUND NO 5 IS DIRECTED AGAINST THE INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C) WHICH IS PREMATURE FOR ADJUDICATION A T THIS STAGE. HENCE, GROUND NO 5 IS DISMISSED. GROUND NO 6 IS GENERAL IN NATURE. FOR ALMOST IDENTICAL REASONS AS GIVEN IN HIS IMPUGN ED ORDER FOR A.Y. 2005-06, THE LD. CIT(APPEALS) ALSO HELD THAT THE SI MILAR ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAS H DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNTS OF THE ASSESSEE FOR A.Y. 2006-07 WAS NOT I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 7 SUSTAINABLE. ACCORDINGLY HE DELETED THESE ADDITIONS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESS EE FOR A.YS. 2005-06 AND 2006-07. AGGRIEVED BY THE ORDERS OF THE LD. CIT (APPEALS) GIVING RELIEF TO THE ASSESSEE FOR ALL THE THREE YEARS UNDER CONSI DERATION, 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 APPEA LS ARE, 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 ADDI TIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED ACCOMMODATI ON ENTRIES GIVEN TO THE MUMBAI BASED COMPANIES ON PROTECTIVE BASIS AND THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITION MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF COMMISSION INCOME ALLEGEDLY RECEIVED BY THE ASSE SSEE FOR GIVING ACCOMMODATION ENTRIES. IT IS OBSERVED THAT THE SIMI LAR ISSUES WERE INVOLVED IN SOME OTHER CASES AND ALL THESE CASES WE RE ADJOURNED IN THE PAST AND ALSO BLOCKED FOR SOME PERIOD FOR GETTING T HE INFORMATION ABOUT THE STATUS OR OUTCOME OF THE CASES WHERE THE SIMILA R AMOUNTS WERE ADDED ON SUBSTANTIVE BASIS. INSPITE OF SUFFICIENT TIME GI VEN TO BOTH THE PARTIES, THEY HAVE FAILED TO FURNISH THE SAID INFORMATION. I T IS WELL SETTLED THAT PROTECTIVE ASSESSMENT IS PERMISSIBLE IN LAW AND IN CASE A DOUBT OR AMBIGUITY ABOUT REAL ENTITY IN WHOSE HANDS A PARTIC ULAR INCOME IS TO BE ASSESSED, THE ASSESSING AUTHORITY IS ENTITLED TO HA VE RECOURSE TO MAKE A PROTECTIVE ASSESSMENT. AS HELD BY THE HONBLE SUPRE ME COURT IN THE CASE OF LALJI HARIDAS VS.- ITO (43 ITR 387), THE OFFICE R MAY, WHEN IN DOUBT, TO SAFEGUARD THE INTEREST OF THE REVENUE CAN ASSESS IT IN MORE THAN ONE HAND BUT THIS PROCEDURE CAN BE PERMITTED ONLY AT THE STA GE OF ASSESSMENT. PROTECTIVE ASSESSMENT BECOMES REDUNDANT WHEN THE SU BSTANTIVE ASSESSMENT BECOMES FINAL AND IF THE SUBSTANTIVE ASS ESSMENT FAILS, IT IS I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 8 PROTECTIVE ASSESSMENT WHICH IS TO BE TREATED AS SUB STANTIVE. KEEPING IN VIEW THIS COROLLARY BETWEEN THE SUBSTANTIVE ASSESSM ENT AND PROTECTIVE ASSESSMENT, AN APPEAL AGAINST THE PROTECTIVE ASSESS MENT SHOULD ORDINARILY AWAIT THE OUTCOME OF THE SUBSTANTIVE ASS ESSMENT SO THAT THE PROTECTIVE ASSESSMENT CAN BE INCONFORMITY WITH THE SUBSTANTIVE ASSESSMENT. IN THE CASE OF CIT VS.- SURENDRA GULAB CHAND MODI (140 ITR 517), THE APPEAL ARISING OUT OF THE PROTECTIVE ASSE SSMENT WAS DISPOSED OF BY THE APPELLATE AUTHORITY I.E. TRIBUNAL VACATING T HE PROTECTIVE ASSESSMENT WITHOUT WAITING FOR THE FINAL OUTCOME OF THE PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASSESSMENT, WHICH MATT ER WAS PENDING IN THE HONBLE SUPREME COURT. THE HONBLE GUJARAT HIGH COU RT HELD THAT THE TRIBUNAL WAS NOT JUSTIFIED IN PROCEEDING WITH THE M ATTER AND IN DISPOSING OF IT INSTEAD OF BLOCKING IT TILL THE DISPOSAL OF T HE MATTER PENDING IN THE HONBLE SUPREME COURT IN ORDER TO BRING IT INCONFOR MITY WITH THE VIEW OF THE HONBLE SUPREME COURT. THE HONBLE GUJARAT HIGH COURT ACCORDINGLY DIRECTED THE TRIBUNAL TO KEEP THE MATTER ALIVE AND PENDING AWAITING THE DECISION OF THE HONBLE SUPREME COURT IN THE PROCEE DINGS ARISING FROM THE SUBSTANTIVE ASSESSMENT. 6. IN THE PRESENT CASE, THE LD. CIT(APPEALS) DID NO T AWAIT THE OUTCOME OF THE PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASS ESSMENT AND SINCE THE SAID INFORMATION WAS NOT FORTHCOMING EVEN AFTER A C ONSIDERABLE PERIOD FROM THE CONCERNED ASSESSING OFFICER, HE PROCEEDED TO DISPOSE OF THE APPEALS ARISING FROM THE PROTECTIVE ASSESSMENTS BY HIS IMPUGNED ORDERS AND DELETED THE ADDITION MADE ON PROTECTIVE BASIS W ITHOUT AWAITING THE FINAL OUTCOME OF THE PROCEEDINGS ARISING FROM THE S UBSTANTIVE ASSESSMENT. KEEPING IN VIEW THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS.- SURENDRA GULAB CHAND MODI (SUPRA), WE HOLD THAT THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN DELETING THE ADDI TIONS MADE BY THE ASSESSING OFFICER ON PROTECTIVE BASIS IN ALL THE TH REE YEARS UNDER CONSIDERATION WITHOUT AWAITING FOR THE FINAL OUTCOM E OF THE PROCEEDINGS I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 9 ARISING FROM THIS SUBSTANTIVE ASSESSMENT. WE, THERE FORE, SET ASIDE THE IMPUGNED ORDERS OF THE LD. CIT(APPEALS) ON THIS ISS UE AND REMIT THE MATTER BACK TO HIM FOR KEEPING IT ALIVE AND PENDING TILL THE OUTCOME OF THE PROCEEDINGS ARISING FROM THE SUBSTANTIVE ASSESSMENT . 7. AS REGARDS THE ISSUE RELATING TO THE ADDITIONS M ADE ON ACCOUNT OF COMMISSION INCOME ALLEGEDLY RECEIVED BY THE ASSESSE E FOR GIVING ACCOMMODATION ENTRIES, WE FIND THAT THIS ISSUE IS C ONSEQUENTIAL TO THE ISSUE RELATING TO THE ADDITION MADE ON PROTECTIVE B ASIS ON ACCOUNT OF ACCOMMODATION ENTRIES ALLEGEDLY GIVEN BY THE ASSESS EE-COMPANY TO THE MUMBAI BASED COMPANIES. SINCE THE SAID ISSUE IS REM ITTED BACK BY US TO 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. GROUNDS NO. 1 & 2 OF THE REVENUES APPEALS FOR ALL THE THREE YEARS UNDER CONSIDERATION ARE ACC ORDINGLY TREATED 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 ASSESS ING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS FOUND TO BE MADE IN TH E BANK 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 RE PORT SUBMITTED TO THE LD. CIT(APPEALS), THIS CLAIM OF THE ASSESSEE WAS AC CEPTED BY THE ASSESSING 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 B OOK WERE DULY SUPPORTED BY SALES INVOICES WHICH WERE ALSO PRODUCE D BEFORE HIM. KEEPING IN VIEW THIS REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER ACCEPTING THE CLAIM OF THE ASSESSEE REGARDING THE A VAILABILITY OF CASH FOR I.T.A. NOS. 524, 525/KOL/2014 ASSESSMENT YEAR: 2005-06 & 2006-07 & I .T.A. NO. 1866/KOL/2013 AS SESSMENT YEAR: 2007-08 M/S. TOPGRAIN MANAGEMENT PVT. LIMITED 10 DEPOSITS MADE IN THE BANK ACCOUNT AFTER VERIFICATIO N, THE LD. CIT(APPEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE ALLEGED UNEXPLAINED CASH DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSEE AND WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDERS OF THE LD. CIT(APPEALS) GIVING RELIEF TO THE ASSESS EE ON THIS ISSUE FOR A.Y. 2005-06 AND 2006-07. EVEN THE LD. D.R. HAS NOT RAIS ED ANY MATERIAL CONTENTION IN THIS REGARD. WE ACCORDINGLY UPHOLD TH E IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND DISMISS GROU ND NO. 3 OF THE REVENUES APPEALS FOR A.Y. 2005-06 AND 2006-07. 9. IN THE RESULT, THE APPEALS OF THE REVENUE FOR A. Y. 2005-06 AND 2006-07 ARE TREATED AS PARTLY ALLOWED FOR STATISTIC AL PURPOSES, WHILE THE APPEAL OF THE REVENUE FOR A.Y. 2007-08 IS TREAT ED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 08, 2019. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 8 TH DAY OF FEBRUARY, 2019 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-VII, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700 107 (2) M/S. TOPGRAIN MANAGEMENT PVT. LIMITED, 27A, METCALF STREET, KOLKATA-700 001 (3) COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-1 , KOLKATA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.