DILIP SHAH, MUMBAI V. DCIT CEN CIR 11, MUMBAI

ITA 5739/MUM/2012

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9278 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-01-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 13-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Keywords: Bogus purchase; Unexplained cash credit; Business income; Income from undisclosed sources; Search and seizure; Document seized; Validity of assessment; Accommodation entries; Onus to prove; Documents seized
• Section: 143(3); 142(1); 133A; 153A; 68; 27; 263; 132

Judgement Text

1 DILIP SHAH / ATUL SANGHVI IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI BEFORE D.T.GARASIA, JM AND SHRI G.MANJUNATHA, AM ./ I.T.A. NO. 5739 TO 5745/MUM/2012 ( / ASSESSMENT YEAR: 2001-02 TO 2007-08) SHRI DILIP SHAH 401, SPENTA TOWERS, 55/57 FORGETT STREET, GOWALIA TANK MUMBAI 400036. / VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-11 MUMBAI ./ ./ PAN/GIR NO. ACWPS4146B ( / APPELLANT) : ( /RESPONDENT ) ./ I.T.A. NO. 5713 TO 5719/MUM/2012 ( / ASSESSMENT YEAR: 2001-02 TO 2007-08) SHRI ATUL SANGHVI B, 1607, SHANKER SETH, PALACE, 16 TH FLOOR, NANA CHOWK, MUMBAI 400007 / VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-11 MUMBAI ./ ./ PAN/GIR NO. AHZPS2788P ( / APPELLANT) : ( /RESPONDENT ) / APPELLANT BY : SHRI RAKESH JOSHI, A.R / RESPONDENT BY : SHRI R.P. MEENA, D.R / DATE OF HEARING : 02/08/2017 / DATE OF : 25 /09/2017 2 DILIP SHAH / ATUL SANGHVI PRONOUNCEMENT / O R D E R PER G. MANJUNATHA, AM: THESE BUNCH OF APPEALS FILED BY TWO DIFFERENT ASSES SEES ARE DIRECTED AGAINST TWO COMMON ORDERS PASSED BY THE CIT(A)-37, MUMBAI DATED 24.07.2012 FOR THE ASSESSMENT YEARS 2001-02 TO 2007 -08. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THESE APPEALS WERE CLUBBED, HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE O F CONVENIENCE. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE, SHRI DILI P SHAH ARE AS FOLLOWS: 1. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL A S IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN PASSING A CONSOLIDATED ORDER F OR ALL SEVEN ASSESSMENT YEARS FROM 2001-02 TO 2007-08, IGNORING THE STATUTORY PROVISIONS AND REQUIREMENT. 2. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL A S IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN LAW AND ON FACTS FOR NOT PASSI NG SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SEVEN ASSESSMENT YEARS FROM 2001-02 TO 2007-08, IGNORING THE STATUTORY PROVISIO NS AND REQUIREMENT. 3. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL A S IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN LAW AND ON FACTS IN INFERRING AND HOLDING THAT THE APPELLANT WAS INDULGED IN THE BUSINESS OF ISSUA NCE OF BOGUS BILLS. 4. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL A S IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN MAKING AN ADDITION OF RS.35,46 ,36,038/- ON ACCOUNT OF ALLEGED SALES ON PROTECTIVE BASIS, WITHO UT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3 DILIP SHAH / ATUL SANGHVI 5. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL A S IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN INFERRING AND HOLDING THAT THE APPELLANT EARNED COMMISSION @ 2% ON ACCOUNT OF SERVICES RENDE RED BY HIM, IGNORING THE PREVAILING COMMISSION RATE IN THE STEE L MARKET RANGING BETWEEN 0.02% - 0.05%, ESPECIALLY HAVING RE GARD TO THE FACT THAT THE APPELLANT IS A REGISTERED BROKER IN T HE MARKET. 6. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL A S IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN MAKING AN ADDITION OF RS.70,92 ,721/- TO THE INCOME OF THE APPELLANT, BEING COMMISSION EARNED @ 2% ON THE BOGUS SALES BILLS ISSUED DURING THE YEAR TO VARIOUS PARTIES. 7. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL A S IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN HOLDING THAT THE CASH DEPOSITS IN THE BANK ACCOUNTS OF THE PERSONS OTHER THAN ASSESSEE (THIRD PARTIES) AS UNDISCLOSED INCOME OF THE APPELLANT. 8. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL A S IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN MAKING AN ADDITION OF RS.7,01, 650/- TO THE INCOME OF THE APPELLANT ON THE BASIS OF THE CASH DEPOSITS IN THE VARIOUS BANK ACCOUNTS OF THE PERSONS OTHER THAN ASSESSEE (THIRD PARTIES), IGNORING THE FACT THAT THE APPELLANT WAS MERELY A COMMISSION AGENT OF THOSE PERSONS. 9. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ALTER OR D ELETE THE SAID GROUND OF APPEAL. 2. BRIEF FACTS OF THE CASE EXTRACTED FROM ITA NO. 5739 /MUM/2012 IN THE CASE OF SHRI DILIP C. SHAH FOR THE ASSESSMENT YEAR 2001-02 ARE THAT SEARCH AND SEIZURE U/S 132 OF THE INCOME TAX ACT, 1961 WAS CAR RIED OUT IN THE CASE OF SHRI DILIP C. SHAH AND SHRI ATUL SANGHVI ON 05.02.2007. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION INCRIMINATING MATERIALS WERE FOUND WHICH REVEALED THAT 4 DILIP SHAH / ATUL SANGHVI THE ASSESSEE ALONG WITH SHRI ATUL SHANGHVI INVOLVED IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES. THE INCRIMINATING DOCUMENTS FOUND FURTHER REVEALED THAT THE ASSESSEE HAS OPERAT ED MORE THAN 100 BANK ACCOUNTS IN VARIOUS NAMES AND ALSO TAMPERED DOCUMEN TS LIKE PAN CARD AND OTHER EVIDENCE IN SUPPORT OF ADDRESS PROOF TO OPEN AND OPERATE BANK ACCOUNTS IN THE NAME OF VARIOUS PERSONS. EARLIER A SURVEY AC TION WAS CARRIED OUT AT THE OFFICE PREMISES AT 78/80, MOTOR GARAGE BLDG. MOTA C OMPOUND, GAUSHALA, C.P. TANK, MUMBAI-4. DURING THE COURSE OF SURVEY KEYS OF THREE BANK LOCKERS WERE FOUND IN THE POSSESSION OF THE ASSESSEE AND SHRI AT UL A. SANGHVI. ACCORDINGLY, A WARRANT BY U/S. 132 WAS EXECUTED AND TOTAL CASH OF RS.47.30 LACKS ALONG WITH SOME INCRIMINATING DOCUMENTS WERE FOUND. DURIN G THE COURSE OF SEARCH U/S 132, STATEMENT U/S 132(4) OF THE INCOME TAX ACT WAS RECORDED FROM THE ASSESSEE AND CONFRONTED THE INCRIMINATING MATERIALS FOUND LIKE BANK ACCOUNT, AND SIGNED CHEQUE BOOKS AND ALSO BILL BOOKS OF VARI OUS CONCERNS. THE ASSESSEE WHILE RECORDING STATEMENT U/S 132(4) ADMITTED THAT HE ALONG WITH ATUL SANGHVI WERE ENGAGED IN THE BUSINESS OF COMMISSION AGENTS I N STEEL MARKET ARRANGING BUSINESS BETWEEN THE SELLERS OF GOODS AND BUYERS OF GOODS FOR WHICH THEY CHARGED COMMISSION RANGING BETWEEN 0.02% TO 0.05%. THE ASSESSEE FURTHER ADMITTED THAT HE AND SHRI ATUL SANGHVI OPERATED THI S BUSINESS JOINTLY, HOWEVER THERE IS NO WRITTEN AGREEMENT ENTERED INTO BETWEEN THEM. THE ASSESSEE 5 DILIP SHAH / ATUL SANGHVI FURTHER SUBMITTED THAT HE IS A REPUTED COMMISSION A GENT IN THE MARKET AND THE PROSPECTIVE SELLERS OF GOODS APPROACH HIM AT HIS OF FICE WITH VARIOUS OFFER TO SELL THEIR GOODS. HE IDENTIFIES THE BUYER FOR THE GOODS FOR WHICH HE TAKES NECESSARY PRECAUTIONS TO PROTECT THE BUSINESS ACCORDINGLY COL LECTS VARIOUS INFORMATION FROM THE BUYERS AS WELL AS SELLERS IN THE FORM OF R ATION CARD, PAN CARD, VAT REGISTRATION PAPERS, BANK ACCOUNT DETAILS, AS ALSO THE CHEQUE BOOKS AS WELL AS LETTER HEADS, BILLS, VOUCHERS ETC OF SUCH PERSONS. IT IS ONLY AFTER SUBMITTING THE DOCUMENTS AS MENTIONED, HE ENTERTAINED THE PARTIES. THIS IS THE REASON WHY DURING THE SEARCH PROCEEDINGS, THE DEPARTMENT CAME ACROSS WITH THESE DOCUMENTS IN THE PREMISES. THE ASSESSEE FURTHER SUB MITTED THAT THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH WAS BEL ONGING TO THE VARIOUS SUPPLIERS OF GOODS WHO KEPT THE DOCUMENTS IN HIS PO SSESSION TO FACILITATE THE TRANSACTION EXPEDITIOUSLY. THEREFORE, THESE DOCUMEN TS CANNOT BE CONSIDERED AS HIS DOCUMENTS TO HOLD THAT HE FLOATED DUMMY CONC ERNS IN THE NAME OF FICTITIOUS/EXISTING PERSONS SO AS TO ISSUE BOGUS BI LLS. 3. CONSEQUENT TO SEARCH PROCEEDINGS NOTICE U/S. 153A O F THE INCOME TAX ACT 1961, WAS ISSUED DIRECTING THE ASSESSEE TO FILE THE RETURN OF INCOME FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSE SSMENT YEARS IN WHICH THE SEARCH TOOK PLACE. IN RESPONSE TO NOTICE, THE ASSES SEE HAS FILED RETURNS OF INCOME FOR THE ASSESSMENT YEARS 2001-02 TO 2007-08 ON 15.02.2008. THE CASE 6 DILIP SHAH / ATUL SANGHVI HAS BEEN SELECTED FOR SCRUTINY AND ACCORDINGLY NOTI CE U/S 143(2) AND 142(1) ALONG WITH DETAILED QUESTIONNAIRE WERE ISSUED TO TH E ASSESSEE. IN RESPONSE TO THE NOTICES AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE APPEARED FROM TIME TO TIME AND FURNISHED VARIOUS DETAILS, AS CALLED FOR. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A .O NOTICED THAT THE ASSESSEE IS OPERATING MORE THAN 100 BANK ACCOUNTS I N VARIOUS ENTITIES NAME IN DIFFERENT BANK ACCOUNTS AND THE TOTAL SUM FOUND CRE DITED IN THESE BANK ACCOUNTS WAS WORKED OUT AT RS.21,22,27,57,495/-. TH E A.O FURTHER OBSERVED THAT THE ASSESSEE HAD ISSUED SALES BILLS IN THE NAM E OF 51 ENTITIES FOR AN AMOUNT OF RS.8,59,99,06,373/-. THE A.O HAS SUMMARIS ED THE DETAILS OF COMPANIES/FIRMS OPERATED BY THE ASSESSEE ALONG WITH SHRI ATUL SANGHVI AND THE NAMES OF PERSONS OF CONCERNS ARE LISTED IN THE ASSE SSMENT ORDER DATED 31.12.2008 AT PARAGRAPH 5.1. SIMILARLY, THE A.O HA S LISTED THE TOTAL SALES BILLS ISSUED BY THE ASSESSEE IN THE NAME OF VARIOUS CONCE RNS AT PARAGRAPH 5.2 OF ASSESSMENT ORDER DATED 31.12.2008. THE A.O ALSO LIS TED THE NAMES OF COMPANIES/FIRMS AND CORRESPONDING BANK ACCOUNTS OPE RATED IN VARIOUS BANKS AT PARAGRAPH 5.3 OF HIS ORDER DATED 31.12.2008. AS PER THE INFORMATION GATHERED DURING THE COURSE OF SEARCH COUPLED WITH F URTHER INQUIRIES CONDUCTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A. O CAME TO THE CONCLUSION THAT THE ASSESSEE ALONG WITH SHRI ATUL SANGHVI IS I NVOLVED IN PROVIDING 7 DILIP SHAH / ATUL SANGHVI ACCOMMODATION ENTRIES OF BOGUS PURCHASE BILLS TO VA RIOUS ENTITIES. THE INFORMATION GATHERED DURING THE COURSE OF SEARCH AN D ASSESSMENT PROCEEDINGS REVEALED THAT THE ASSESSEE HAS ISSUED SALE BILLS WO RTH RS.856,64,49,533/- IN THE NAME OF M/S VARUN INDUSTRIES LTD. 13, SANKESHWAR DA RSHAN, A.G. PAWAR CROSS LANE, BYCULLA/MUMBAI. THE TOTAL SALE BILLS ISSUED F ROM VARIOUS CONCERNS NAME TO M/S VARUN INDUSTRIES PVT. LTD., WERE SEIZED AT T HE TIME OF SEARCH ARE MARKED AS ANNEXURE A1 TO ANNEXURE A19 WHICH ARE REFLECTED IN THE ASSESSMENT ORDER AT PARAGRAPH 5.1. 5. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, TH E A.O CALLED UPON THE ASSESSEE TO EXPLAIN CREDITS FOUND IN THE BANK A CCOUNT AND SALES BILLS ISSUED TO M/S VARUN INDUSTRIES LTD. IN RESPONSE TO SHOW CA USE NOTICE, THE ASSESSEE SUBMITTED THAT HE IS A REGISTERED COMMISSION AGENT IN THE STEEL MARKET. HE ALONG WITH SHRI ATUL SANGHVI ARE ENGAGED IN THE BUS INESS OF COMMISSION AGENT FACILITATING SALE AND PURCHASE BETWEEN THE PERSONS MANUFACTURING STEEL GOODS AND PERSONS BUYING STEEL GOODS. THE ASSESSEE FURTHE R SUBMITTED THAT HE CHARGED COMMISSION RANGING FROM 0.05% TO 0.15% DEPE NDING UPON THE SIZE OF THE BUSINESS FOR WHICH HE COLLECTED VARIOUS DETAILS FROM THE PROSPECTIVE SELLERS OF GOODS INCLUDING THEIR PAN CARD, SALES BILLS, BAN K ACCOUNT DETAILS, ADDRESS PROOF ETC. THE ASSESSEE FURTHER SUBMITTED THAT THE BANK ACCOUNT FOUND DURING THE COURSE OF SEARCH AND SALE BILLS FOUND IN VARIOU S NAMES DO NOT BELONG TO 8 DILIP SHAH / ATUL SANGHVI HIM, BUT THE SAME WERE BELONGING TO THE ENTITIES MA NUFACTURING GOODS WHICH ARE KEPT IN OUR IN CUSTODY FOR EASY FACILITATION OF BUSINESS, THEREFORE, THE SAME CANNOT BE CONSTRUED AS DUMMY ENTITIES FLOATED BY ME FOR FACILITATING ISSUE OF BOGUS BILLS. 6. THE A.O, AFTER CONSIDERING THE SUBMISSIONS OF THE A SSESSEE AND ALSO TAKING INTO ACCOUNT THE SEIZED MATERIAL FOUND DURI NG THE COURSE OF SEARCH, CAME TO THE CONCLUSION THAT THE ASSESSEE ALONG WITH SHRI ATUL SANGHVI WAS ENGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES OF BOGUS PURCHASE BILLS TO VARIOUS BENEFICIARIES. THE A.O FURTHER OBS ERVED THAT THE MODUS OPERANDI OF THE ASSESSEE IS THAT HE OPENS BANK ACCOUNTS IN V ARIOUS FICTITIOUS / EXISTING PERSONS NAME BY FABRICATING ADDRESS PROOF AND PAN CARD, WHICH IS EVIDENT FROM THE FACT THAT HE HAS OPENED BANK ACCOU NTS IN ONE PERSONS NAME IN DIFFERENT BANK ACCOUNTS BY FIXING HIS PHOTOGRAPH ON THE FABRICATD ADDRESS PROOF AND PAN NO. THE A.O FURTHER OBSERVED THAT THE STATEMENT RECORDED DURING THE COURSE OF SEARCH FROM ONE MR. YASHWANT P ANDYA WHO CLAIMED TO BE THE ACCOUNTANT OF THE ASSESSEE INDICATES THAT THE A SSESSEE IS ISSUING SALES BILLS IN VARIOUS NAMES. SHRI YASHWANT PANDYA ACCOUNTANT O F THE ASSESSEE WHO HAS CLEARLY STATED IN HIS STATEMENT THAT HE HAD UNDER I NSTRUCTION FROM SHRI ATUL SANGHVI AND SHRI DILIP C. SHAH, BILLS IN RESPECT OF THE VARIOUS COMPANIES WERE PREPARED IN THE OFFICE OF THE ASSESSEE. THE BILLS WERE PREPARED IN THE NAME OF 9 DILIP SHAH / ATUL SANGHVI VARIOUS CONCERNS WHOSE BLANK CHEQUES WERE FOUND DUR ING THE COURSE OF SEARCH. THE A.O FURTHER RELIED UPON THE STATEMENT O F SHRI PRADIP M JABALIA WHO HAD GIVEN HIS ADDRESS FOR CORRESPONDENCE FOR SOME O F THE BANK ACCOUNTS OPERATED BY SHRI ATUL SANGHVI AND SHRI DILIP C. SHA H. IN THE STATEMENT HE HAS CONFIRMED THAT THE LETTERS FROM THE BANK WERE COLLE CTED BY SHRI ATUL AND DILIP SANGHVI. THE SUM AND SUBSTANCE OF THE STATEMENT GIV EN BY THE SHRI PRADIP M JABALIA IS THAT SHRI ATUL SANGHVI AND SHRI DILIP SA NGHVI FLOATED VARIOUS DUMMY CONCERNS AT THE ADDRESS OF SHRI PRADIP M JABALIA. T HE A.O ALSO RELIED UPON THE STATEMENT OF SHRI VINOD KUMAR UTTAMLAL SHAH WHO IS THE PERSON RESPONSIBLE FOR INTRODUCING THE ACCOUNT IN THE NAME OF SHRI SAN DEEP P. SHAH IN BANK OF MAHARASHTRA, JHAVERY BAZAR BRANCH. SHRI VINOD KUMAR SHAH HAS STATED THAT HE HAS SEEN SHRI DILIP SHAH ONLY ONES IN HIS LIFE. SH RI SANDEEP P. SHAH CAME TO HIS OFFICE WITH ACCOUNT OPENING FORM. HE DID NOT KNOW W HO HE WAS, BUT SHRI ATUL SANGHVI WHO WAS RELATIVE STATED THAT HE KNOWS SHRI SANDEEP P. SHAH VERY WELL AND WAS FROM HIS VILLAGE. THE A.O FURTHER GATHERED INFORMATION WHICH REVEALED THAT THE PHOTO APPEARING IN THE ACCOUNT OPENING FOR M OF SHRI SANDEEP P SHAH IS APPEARING IN THREE DIFFERENT ACCOUNTS IN THE THR EE DIFFERENT NAMES AND ALL THE CHEQUES BOOKS FOUND IN THE POSSESSION SHRI ATUL SAN GHVI AND DILIP SHAH. THE A.O FURTHER REFERRED TO THE STATEMENT RECORDED FROM SHRI N. V. NEELAKANTAN WHO IS THE PERSON RESPONSIBLE FOR OPENING ACCOUNTS OF CONCERNS RUN BY SHRI 10 DILIP SHAH / ATUL SANGHVI ATUL SANGHVI AND P. SHAH ON THE NATIONAL COOPERATIV E BANK, FORT BRANCH. IN QUESTION NO. 3 HE HAS STATED THAT THE DUO SHRI ATUL SANGHVI AND SHRI DILIP SHAH APPROACHED THE BANK FOR OPENING ACCOUNT OF THE CONC ERN IN THEIR GROUP. FURTHER IT HAS BEEN STATED THAT THE PERSON IN WHOSE NAME ACCOUNTS WERE OPENED NEVER CAME FORWARD TO OPERATE THE ACCOUNT WH ICH WAS IN FACT DONE BY SHRI ATUL SANGHVI AND SHRI DILIP SHAH. THE A.O FURT HER NOTED THAT EVEN THE SUMMONS ISSUED TO ALL THESE ADDRESSES WHERE RETURNE D UNSERVED; HOWEVER THE LETTER SENT BY THE DRI WERE RECEIVED AND HAD BEEN F OUND IN THE POSSESSION OF THE ASSESSEE INDICATING THAT THESE TWO PERSONS ARE MANAGING THE AFFAIRS OF ALL THE COMPANIES WHOSE LETTERHEADS AND BANK ACCOUNTS H AVE BEEN FOUND FROM THE ASSESSEES POSSESSION. 7. FROM THE ABOVE INQUIRIES AND EVIDENCES GATHERED DUR ING THE SEARCH AND POST SEARCH ENQUIRIES, THE A.O CAME TO THE CONCLUSI ON THAT SHRI ATUL SANGHVI AND SHRI DILIP SHAH WHERE THE PERSONS, WHO HAD OPER ATED 100 BANK ACCOUNTS IN DIFFERENT ENTITIES NAME TO FACILITATE THE ISSUE OF BOGUS BILLS TO VARIOUS BENEFICIARIES. THE A.O FURTHER OBSERVED THAT THE SE IZED DOCUMENTS FOUND DURING THE COURSE OF THE SEARCH UNDOUBTEDLY PROVED THAT THE DUO WERE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES OF BOGU S PURCHASE BILLS IN THE NAME OF DUMMY CONCERNS. THE A.O FURTHER OBSERVED TH AT THE DUO HAVE FABRICATED DOCUMENTS LIKE PAN CARD, SIGNATURE ETC, TO OPEN BANK ACCOUNTS IN 11 DILIP SHAH / ATUL SANGHVI THE NAME OF DIFFERENT PERSONS WHO HAD NOTHING TO DO WITH THOSE TRANSACTIONS. THE ASSESSEE AND SHRI A. SANGHVI HAVE OPERATED BANK ACCOUNTS IN DIFFERENT PERSONS NAMES, HOWEVER THE REAL TRANSACTIONS HAVE BEEN CARRIED OUT BY THE ASSESSEE ALONG WITH SHRI ATUL SANGHVI. ALL THESE SE QUENCE OF EVENTS AND EVIDENCES CLEARLY INDICATES THAT THE ASSESSEE IS EN GAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES THEREFORE, HE OPINE D THAT THE TOTAL SUM FOUND CREDITED IN THESE BANK ACCOUNTS IS THE GROSS TURNOVER OF THE ASSESSEE FROM THE ACTIVITY OF ISSUING BOGUS BILLS. THE A.O H AS CONCLUDED ASSESSMENT IN THE FOLLOWING MANNER:- (I) COMMISSION ON BOGUS BILLING :- THE A.O HAS WORKED OUT COMMISSION ON BOGUS BILLING ISSUED IN THE NAME OF DIFFERENT ENTITIES TO THE TUNE OF RS.856,64 ,69,533/- AT THE RATE OF 2% ON TOTAL BILL AMOUNT AND DIVIDED FOR A P ERIOD OF 7 YEARS FROM ASSESSMENT YEAR 2001-02 TO 2007-08 AND ADDED 5 0% ON TOTAL COMMISSION IN THE HANDS OF THE ASSESSEE AND 50% IN THE HANDS OF SHRI ATUL SANGHVI. (II) ADDITIONS TOWARDS BANK CREDIT:- DURING THE YEARS THERE ARE BANK CREDITS TO THE TUNE OF RS. RS.21,22,27,57,495/. THE A.O HAS TAKEN TOTAL BANK CREDITS AND REDUCED THE VALUE OF BOGUS SALES BILL ISSUED TO M/S VARUN INDUSTRIES LTD. AND OTHERS TO THE EXTENT OF RS.856,64,49,533/- AND THE BALANCE AMOUNT OF RS.1388.09 CRORES BANK CREDITS HAS BEEN T REATED AS UNEXPLAINED CREDITS FOR THE ASSESSMENT YEAR 2001-02 TO 2007-08 AND MADE ADDITIONS ON PROTECTIVE BASIS. (III) THE A.O ALSO ESTIMATED COMMISSION @2% ON TOTA L UNEXPLAINED BANK CREDIT AND ADDED 50% IN THE HANDS OF THE ASSES SEE FOR THE ASSESSMENT YEAR 2001-02 TO 2007-08 AND REMAINING 50 % IN THE HANDS OF THE SHRI ATUL SANGHVI. 12 DILIP SHAH / ATUL SANGHVI (IV) UNEXPLAINED CASH DEPOSIT IN BANK ACCOUNTS :- THE A.O MADE ADDITIONS OF RS.17,73,36,779/-TOWARDS UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNTS FOR THE ASSESSMENT Y EAR 2001-02 TO 2007-08 AND ADDED 50% IN THE HANDS OF THE ASSESSEE AND REMAINING IN THE HANDS OF SHRI DILIP SHAH. (V)ADDITIONS TOWARDS CASH FOUND DURING THE COURSE O F SEARCH: DURING THE COURSE OF SEARCH CASH AMOUNTING TO RS.47 ,30,000/- HAS BEEN FOUND AND SEIZED. THE ASSESSEE HAS ADMITTED TH AT THE AMOUNT FOUND SEIZED AND DURING THE COURSE OF SEARCH REPRES ENTING HIS UNEXPLAINED BUSINESS INCOME. IN THIS FACT, THE SUM OF RS.47,30,000/- HAS BEEN TREATED AS UNEXPLAINED INCOME OF THE ASSES SEE FOR THE ASSESSMENT YEAR 2007-08 AND ADDED 50% IN THE NAME O F THE ASSESSEE AND REMAINING 50% HAS BEEN ADDED IN THE HANDS OF TH E SHRI DILIP SANGHVI. 8. AGGRIEVED BY THE ASSESSMENT ORDER THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE CIT(A). WHEN THE APPEALS FILED BY THE AS SESSEE WERE PENDING BEFORE THE CIT(A) FOR ADJUDICATION, THE CIT [CENTRAL CIRCL E(1)], MUMBAI HAD ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT, AND ON THE GR OUND THAT THE ASSESSMENT ORDER PASSED BY THE A.O U/S 143(3) R.W.S. 153A WAS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS THE A.O HAS NOT CONSIDERED THE ISSUE OF BOGUS SALES BILLS ISSUED IN THE NAME OF M/ S VARUN INDUSTRIES LTD. AND ALSO UNEXPLAINED CREDITS FOUND IN THE BANK ACCOUNTS OPERATED BY THE ASSESSEE. THE CIT MUMBAI, AFTER CONSIDERING THE EXPLANATIONS OF THE ASSESSEE, SET ASIDE THE ORDER PASSED BY THE A.O U/S 153A R.W.S. 143(3) AND DIRECTED THE A.O TO REDO ASSESSMENT WITH THE FOLLOWING DIRECTIONS: 13 DILIP SHAH / ATUL SANGHVI 4.2.1 THE TOTAL AMOUNT INCLUDED IN THE BILLS RAISE D IN THE NAME OF M/S. VARUN INDUSTRIES LIMITED SHOULD BE ASS ESSED PROTECTIVELY IN THE HANDS OF THE ASSESSEE TO THE EX TENT OF HIS SHARE IN THE BUSINESS, TO SAFE GUARD THE INTERE ST OF THE REVENUE. THE COMMISSION INCOME ON THE SAID TRANSACT IONS SHOULD BE ASSESSED PROPORTIONATELY ON SUBSTANTIVE B ASIS IN THE HANDS OF THE ASSESSEE, AS ALREADY DONE IN THE O RIGINAL ASSESSMENT. 4.2.2 REGARDING THE DEPOSITS AGGREGATING TO RS.1.388.09 CRORES IN THE ASSESSMENT YEARS COMPRISE D IN THE BLOCK PERIOD FOR WHICH THE ASSESSEE HAS NOT BEE N ABLE TO FURNISH PROPER EXPLANATION, THIS AMOUNT SHOULD B E TAXED IN THE HANDS OF THE ASSESSEE PROPORTIONATELY TO THE EXTENT OF HIS SHARE IN THE BUSINESS ON SUBSTANTIVE BASIS A S HIS OWN UNEXPLAINED OR UNACCOUNTED INCOME. 4.2.3 ASSESSEE SHOULD BE ALLOWED OPPORTUNITY TO PRO VE THAT THE DEPOSITS ARE ACCOUNTED FOR OR/ARE NO THE ASSESS EE'S OWN INCOME BUT INCOME OF SOME OTHER PERSON, BY SUBMITTI NG PROOF OF IDENTITY OF SUCH OTHER PERSON, CREDITWORTH INESS OF SUCH PERSON, BUSINESS OPERATION CARRIED OUT AND THA T THE TRANSACTION IS GENUINELY CARRIED OUT BY SUCH OTHER PERSON, IN WHICH. CASE, THE SAID AMOUNT OR AMOUNTS WOULD BE RE DUCED FROM THE AGGREGATE AMOUNT OF UNEXPLAINED BANK DEPOS ITS AND TAXED ONLY ON PROTECTIVE BASIS IN THE RESPECTIVE YE AR OR YEARS. THE REMAINING AMOUNT THAT REMAINS UNEXPLAINED, WOUL D BE TAXED IN THE RESPECTIVE YEARS IN THE HANDS OF THE A SSESSEE PROPORTIONATELY, ON SUBSTANTIVE BASIS AS MENTIONED IN THE FOREGOING PARA. 9. THE CIT, [CENTRAL CIRCLE(1)] IN HIS ORDER U/S 263 D ATED 29.03.2011, DIRECTED THE A.O TO MAKE ADDITIONS TOWARDS SALES BI LLS RAISED IN THE NAME OF M/S VARUN INDUSTRIES LTD. ON PROTECTIVE BASIS IN TH E HANDS OF THE ASSESSEE TO THE EXTENT OF HIS SHARE OF BUSINESS TO SAFEGUARD TH E INTEREST OF THE REVENUE AND THAT THE COMMISSION INCOME ON THE SAID TRANSACTION S SHOULD BE ADDED PROPORTIONATELY ON SUBSTANTIVE BASIS IN THE HANDS O F THE ASSESSEE AS ALREADY 14 DILIP SHAH / ATUL SANGHVI DONE IN THE ORIGINAL ASSESSMENT ORDER. REGARDING C ASH DEPOSITS AGGREGATING TO RS.1388.09 CRORE IN THE ASSESSMENT YEARS COMPRISED IN THE PERIOD FOR WHICH THE ASSESSEE HAS NOT BEEN ABLE TO FURNISH PROPER EX PLANATION, THE SAME SHOULD BE TAXED IN THE HANDS OF THE ASSESSEE PROPORTIONATE LY TO THE EXTENT OF HIS SHARE IN THE BUSINESS ON SUBSTANTIVE BASIS AS HIS OWN UNE XPLAINED AND UNACCOUNTED INCOME. THE CIT(A) FURTHER DIRECTED THE A.O TO ALLO W OPPORTUNITY TO THE ASSESSEE TO PROVE THAT THE DEPOSITS ARE ACCOUNTED F OR AND DECLARED AS THE ASSESSEES OWN INCOME OR INCOME OF SOME OTHER PERSON S BY SUBMITTING PROOF OF IDENTITY OF SUCH OTHER PERSONS, CREDITWORTHINESS OF THE SUCH PERSONS, BUSINESS OPERATION CARRIED OUT AND THAT THE TRANSACTION IS G ENUINELY CARRIED OUT BY SUCH OTHER PERSON. IN THE CASE THE SAID AMOUNTS EXPLAINED, THE SAME WO ULD BE ARE AMOUNTS WOULD BE REDUCED FROM THE AGGREGATE AMOUNT OF UNEXPLAINED BANK DEPOSITS AND TAXED ON PROTECTIVE BASIS IN RESPECTIV E YEAR OR YEARS. 10. THE ASSESSEE HAS CHALLENGED 263 ORDERS PASSED BY TH E CIT, FOR ALL THE ASSESSMENT YEARS BEFORE THE ITAT. THE ITAT MUMBAI A BENCH IN IT(SS)A NO. 30/MUM/2011 FOR THE ASSESSMENT YEARS 2001-02 TO 200 7-08 UPHELD THE REVISION ORDER PASSED BY THE CIT(A) AND DISMISSED A PPEALS FILED BY THE ASSESSEE. THE RELEVANT PORTION OF THE ORDER OF THE ITAT, IS REPRODUCED AS UNDER:- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE AO HAD GIVEN A CA TEGORICAL FINDING THAT THE TOTAL CREDIT IN THE ASSESSEE'S VARIOUS BANK ACCOUNT S WAS AMOUNTING TO RS.2122,27,57,495/OUT OF THIS A SUM OF RS.856,64,49 ,533/- HAD BEEN 15 DILIP SHAH / ATUL SANGHVI TREATED AS BOGUS SALES FOR WHICH SALES BILLS WERE F OUND AND WERE DULY IMPOUNDED. HOWEVER, THE REMAINING SUM OF RS.1388,09 ,01,411/- HAD REMAINED UNEXPLAINED IN SPITE OF VARIOUS OPPORTUNIT IES GIVEN TO THE ASSESSEE. THE AO HAD TREATED THE SAME AS UNEXPLAINE D INCOME OF THE A.SSESSEE AND DECIDED TO BRING IT INTO TAX IN VARIO US ASSESSMENT YEARS. HE ALSO WORKED OUT THE ADDITIONS FOR DIFFERENT ASSESSMENT Y EARS. HOWEVER, HE MADE THE SAID ADDITIONS ON PROTECTIVE BASIS OBSERVING TH AT THE ASSESSEE HAD NOT BEEN ABLE TO ESTABLISH THE SOURCE OF THESE CREDITS. HE, HOWEVER, MADE THE ADDITION OF 2% OF THE SAID AMOUNT AS COMMISSION IN COME OF THE ASSESSEE ON SUBSTANTIVE BASIS A PERUSAL OF THE ABOVE FINDING S ITSELF REVEALS THAT THE ORDER OF THE AO WAS ERRONEOUS. IN THE ABSENCE OF AN Y EVIDENCE, ON THE FILE-IS TO SOURCE OF THE CREDITS OF THE AMOUNT IN QUESTION IN THE VARIOUS BANK ACCOUNTS OF THE ASSESSEE, THE AO HAD TREATED THE SAID AMOUNT AS UNEXPLAINED INCOME OF THE ASSESSEE. ONCE THE AO HAD TREATED SO, THE AO WAS REQUIRED TO MAKE THE ADDITION OF THIS AMOUNT ON SUBSTANTIVE BAS IS. EVEN WITHOUT MAKING THE ADDITION OF THE AMOUNT IN QUESTION ON SU BSTANTIVE BASIS IN ANY OTHER PERSONS' ACCOUNT, THE AO COULD NOT HAVE MADE THE ADDITION OF THE AMOUNT ON PROTECTIVE BASIS IN THE ASSESSEE'S ACCOUN T. FROM THE ABOVE FACTS, THE LD.CIT WAS JUSTIFIED IN HOLDING THAT THE ORDER OF THE AO WAS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF T HE REVENUE. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT WHILE INVOKING PROVISIONS OF SECTION 263 OF THE ACT AND THEREBY REVISING THE ORDER OF TH E AO. THE SAME IS THEREFORE, UPHELD. 11. IN THE MEANTIME, THE APPEAL FILED BY THE ASSESSEE A GAINST THE ORDER PASSED BY THE A.O U/S 143(3) R.W.S. 153A HAS BEEN D ISMISSED BY THE CIT(A). THE ASSESSEE CARRIED THE MATTER IN FURTHER APPEAL BEFOR E THE ITAT. THE ITAT MUMBAI A BENCH IN ITA NO. 4721 TO 4726/MUM/2011 F OR ASSESSMENT YEAR 2001-02 TO 2007-08 HAD DISMISSED THE APPEALS FILED BY THE ASSESSEE BY OBSERVING AS UNDER:- 3.WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. 3.1 THE PRIMARY AND RELEVANT FACTS, WHICH ARE THE S AME AS IN THE CASE OF DILIP SHAH V. A 'IT (SUPRA), WITH REFERENCE TO WHICH THE ID. AR ARGUES THE INSTANT CASE, ARE NOT IN DISPUTE. AS WOULD BE 16 DILIP SHAH / ATUL SANGHVI APPARENT FROM THE OPERATIVE PART OF THE SAID ORDER, REPRODUCED HEREINABOVE, THE TRIBUNAL DECIDED IN THE MANNER IT DID ON THE PREMISE THAT PENDING A DECISION ON THE MERITS OF TH E REVISION ORDER CANCELLING THE ASSESSMENTS, CONSIDERING THE ASSESSE E'S APPEALS THEREAGAINST AS NOT MAINTAINABLE, AS HELD BY THE FI RST APPELLATE AUTHORITY, WOULD OPERATE TO THE PREJUDICE THE ASSES SEE IF IT WERE TO SUCCEED IN ITS CHALLENGE TO THE REVISION ORDER I NASMUCH AS THE ASSESSMENTS, SINCE CANCELLED, WOULD STAND TO BE RES TORED, WHILE THE ASSESSEE'S ACTION IN APPEALING THERE AGAINST ON MERITS WOULD STAND BARRED BY TIME. WE ARE IN FULL AGREEMENT WITH THE SAID PREMISES, WHICH CAN BE SAID TO REPRESENT THE RATIO DECENDI OF THE SAID DECISION. THE PROPER COURSE UNDER THE CIRCUMST ANCES WOULD BE TO PREVENT SUCH A PREJUDICE WERE SUCH AN EVENTUALIT Y TO ARISE IN FUTURE. HOWEVER, THAT MAY NOT NECESSARILY IMPLY A R EQUIREMENT TO DECIDE THE ASSESSEE'S APPEALS ON MERITS BY THE FIRS T APPELLATE AUTHORITY, NEED OR OCCASION FOR WHICH WOULD ARISE O NLY WHERE THE ASSESSEE'S IMPUGNED ASSESSMENT/S, SINCE SET ASIDE, STAND RESTORED BY ACCEPTING HIS CHALLENGE TO THE REVISION ORDER, AND WHICH IS NOT CERTAIN, SO THAT IT MAY NEVER ARISE, R ESULTING IN HIS DECISION ON MERITS BECOMING FUTILE OR UNFRUCTUOUS. RESERVING THE ASSESSEE'S STATUTORY RIGHT TO CONTEST ITS ASSESSMEN T/S UNDER THE APPELLATE PROCEDURE, WHICH IS WHAT WE UNDERSTAND, A S ALSO AFORE- STATED, TO HE THE ALSO INTENT AND PURPORT OF THE TR IBUNAL'S ORDER IN DI/IP SHAH V. ACIT (SUPRA), WOULD IN OUR VIEW PRESE NT A REASONABLE AND EQUITABLE COURSE UNDER THE CIRCUMSTANCES. 3.2 THE ABOVE COURSE, BESIDES BEING IN CONFORMITY W ITH THAT BY THE TRIBUNAL IN THE CITED CASE, I.E., IN PRINCIPLE, WOULD ALSO BE IN CONSONANCE WITH LAW INASMUCH AS THE ASSESSMENTS IMP UGNED IN THE INSTANT APPEALS STAND SINCE SET ASIDE BY THE RE VISION ORDER, WHICH HOLDS AS ON DATE, SO THAT THE ACTION OF THE I D. CIT(A) IN DISMISSING THE SAME AS NOT MAINTAINABLE CANNOT BE F AULTED WITH. THE EXCLUSION OF THE JURISDICTION OF THE ADMINISTRA TIVE COMMISSIONER QUA AN ASSESSMENT, IT NEEDS TO BE BORN E IN MIND, IS ONLY WHERE THE SAME STANDS MODIFIED IN APPEAL, SO T HAT IT STANDS MERGED WITH THE APPELLATE ORDER, AND THEN, AGAIN, O NLY TO THAT EXTENT (REFER EXPLANATION (C) TO S. 263(1)). NO APP ELLATE ORDER HAD ADMITTEDLY BEEN PASSED BY 13/1/2011, I.E., ON WHICH DATE THE REVISIONARY AUTHORITY ISSUED THE SHOW CAUSE TO THE ASSESSEE IN THE INSTANT CASE. 17 DILIP SHAH / ATUL SANGHVI 3.3 UNDER THE CIRCUMSTANCES, WE ONLY CONSIDER IT FI T AND PROPER TO DISMISS THE INSTANT BY THE ASSESSEE, SUBJECT TO THE CONDITION THAT IN CASE THE APPELLANT, WHO HAS ADMITTEDLY ALSO CHALLENGED THE SECTION 263 ORDERS/S BEFORE THE TRIB UNAL, IS SUCCESSFUL IN HIS CHALLENGE, SO THAT THE IMPUGNED ASSESSMENT/S ST ANDS RESTORED/REVIVED, HE SHALL BE AT LIBERTY TO PURSUE HIS APPEAL/S BEFORE THE FIRST APPELLATE AUTHORITY, AND WHO SHALL, IN TH AT CASE, DECIDE THE SAME ON MERITS, I.E., IN ACCORDANCE WITH LAW, AND AFTER AFFORDING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. THAT IS, THE ASSESSEE'S APPEALS BEFORE THE FIRST APPELLATE AUTHORITY CONTES TING ITS SAID ASSESSMENTS WOULD ALSO STAND CONSEQUENTIALLY REVIVE D WHERE THE ASSESSEE INTENDS TO PROSECUTE THE SAME. FURTHER, TH E SAME HAVING BEEN FILED BEFORE THE FIRST APPELLATE AUTHORITY IN THE FIRST INSTANCE IN TIME, NO QUESTION OR ISSUE WITH REGARD TO THE SAME BEING DELAYED, WOULD, IN THAT CASE, ENSUE OR ARISE. SUBJECT TO THE FOREGOING WE CONFIRM THE IMPUGNED ORDER. 12. IN PURSUANCE OF THE ORDER OF THE CIT U/S 263 OF THE ACT, THE A.O ISSUED NOTICE U/S 143(2) CALLING FOR VARIOUS DETAILS FROM THE ASSESSEE. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEES AUTHORIZED REPRES ENTATIVE APPEARED AND SUBMITTED THE DETAILS, AS CALLED FOR. THE ASSESSEE MORE OR LESS REITERATED ITS SUBMISSIONS MADE BEFORE THE A.O AT THE TIME OF ORIG INAL ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT. THE ASSESSEE ALSO FILED CO NFIRMATION FROM CERTAIN PERSONS STATING THAT SOME OF THE CONCERNS BANK ACCO UNTS CONSIDERED AS DUMMY CONCERNS OPERATED BY THE ASSESSEE IN HIS OWN NAME ARE IN FACT OPERATED AND CONTROLLED BY THEM AND THE BANK ACCOUN TS WERE CONSIDERED IN THEIR INCOME-TAX RETURNS FILED FOR THE RESPECTIVE A SSESSMENT YEARS. THE ASSESSEE ALSO FILED COPIES OF I.T. RETURNS OF FEW P ERSONS AND CLAIMED THAT THOSE 18 DILIP SHAH / ATUL SANGHVI ASSESSEES HAVE CONSIDERED THE BANK ACCOUNTS IN THEI R INCOME TAX RETURNS FOR THE RESPECTIVE ASSESSMENT YEARS. 13. THE A.O, AFTER CONSIDERING THE EXPLANATION OF THE A SSESSEE, OBSERVED THAT THE ASSESSEE HAS NOT DISCHARGED HIS ONUS OF PR OVING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF ANY OF THESE TR ANSACTIONS PERTAINING TO SUM TOTAL FOUND CREDITED IN THE BANK ACCOUNTS OPERA TED IN VARIOUS ENTITIES NAME OF RS.1388.09 CRORES. THOUGH THE ASSESSEE HAS SIMPLY RELIED ON THE STAND THAT SOME PARTIES WERE PRODUCED DURING THE ORIGINAL ASSESSMENT PROCEEDINGS OR THAT CERTAIN ANNUAL ACCOUNT AND COPIES OF I.T. R ETURNS HAVE BEEN SUBMITTED IN SOME CASES, IT HOWEVER DOES NOT DISCHARGE THE ON US OF PROVING THE CREDITS FOUND IN THE BANK ACCOUNTS. THE A.O FURTHER OBSERVE D THAT THE ASSESSEE HAS MERELY MADE HIS SUBMISSIONS WHICH WERE MADE EVEN AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS AND HAVE BEEN REJECTED THERE ITSELF WITHOUT ANY FURTHER CORROBORATIVE EVIDENCE TO EXPLAIN THE CREDI TS FOUND IN THE BANK ACCOUNTS. THE A.O FURTHER OBSERVED THAT THE PURPOSE OF THE PRESENT PROCEEDINGS IS MERELY TO MAKE FRESH ASSESSMENT ONLY WITH RESPECT TO THE DEPOSIT IN THE BANK ACCOUNTS AND HENCE, THE ASSESSE E IS HAVING AN OBLIGATION TO DISCHARGE HIS ONUS BY FURNISHING IDENTITY, GENUINEN ESS, AND CREDITWORTHINESS OF THE TRANSACTIONS. SINCE, THE ASSESSEE HAS FAILED TO FILE ANY EVIDENCE TO EXPLAIN THE CREDITS FOUND IN THE BANK ACCOUNTS, THE AO COMP LETED THE ASSESSMENT BY 19 DILIP SHAH / ATUL SANGHVI TREATING 50% OF TOTAL UNEXPLAINED BANK CREDITS OF R S.1388.09 CRORES AND DIVIDED IT AMONGST THE ASSESSMENT YEARS 2001-02 TO 2007-08, AS PER THE ACTUAL CREDITS FOUND IN THE RESPECTIVE YEARS AND ADDED IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED CASH DEPOSIT U/S 68 OF THE ACT. 14. IN SO FAR AS SALE BILLS ISSUED IN THE NAME OF M/S V ARUN INDUSTRIES LTD. AMOUNTING TO RS. 856,64,49,533/- THE A.O ADDED TOTA L AMOUNT OF SALES BILLS ISSUED IN THE NAME OF M/S VARUN INDUSTRIES LTD AS U NEXPLAINED INCOME OF THE ASSESSEE ON PROTECTIVE BASIS. FURTHER 50% OF THE CO MMISSION INCOME @2% OF TOTAL SALES BILLS ISSUED IN THE NAME OF M/S VARUN I NDUSTRIES LTD HAS BEEN ADDED IN THE HANDS OF THE ASSESSEE. INSOFAR AS COMMISSIO N ON TOTAL BANK CREDITS, THE A.O HAS ADDED 2% COMMISSION AND TOTAL BANK CREDITS OF RS.1388.09 CRORE AND DIVIDED EQUALLY AMONG THE ASSESSEE AND SHRI ATUL SA NGHVI AND SPREAD IT OVER THE ASSESSMENT YEAR 2001-02 TO 2007-08 ON THE BASIS OF UNEXPLAINED BANK CREDITS FOUND FOR THE RESPECTIVE ASSESSMENT YEARS. HOWEVER, FURTHER OBSERVED THAT IN CASE THE ASSESSEE IS TO BE GRANTED RELIEF I N THE APPELLATE STAGES ON THE UNEXPLAINED BANK CREDITS, THE ASSESSEE WOULD STILL HAVE TO BE TREATED AS BOGUS BILL PROVIDER AND INCOME AT 2% OF THE SAID BANK DEP OSITS NEED TO BE TREATED AS EARNED FOR PROVIDING AND FACILITATING THE SAID BILL S, WOULD SURVIVE. THE OTHER ADDITIONS MADE IN THE COURSE OF REGULAR ASSESSMENT REMAIN UNTOUCHED IN TOTO AND ADDED UNDER SAME HEADS OF INCOME. 20 DILIP SHAH / ATUL SANGHVI 15. AGGRIEVED BY THE ASSESSMENT ORDERS, THE ASSESSEE HA S PREFERRED APPEALS BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE HAS TAKEN A LEGAL PLEA BY RAISING THE GROUND CHALLENGING THE COMMON ORDER PAS SED BY THE A.O FOR THE ASSESSMENT YEARS 2001-02 TO 2007-08, BY STATING THA T THE ASSESSING OFFICER WAS ERRED IN PASSING A CONSOLIDATE ASSESSMENT ORDER FOR ALL SEVEN ASSESSMENT YEARS, IGNORING THE STATUTORY PROVISIONS AND THE REQUIREME NT THEREOF. THE ASSESSEE ALSO CHALLENGED EACH AND EVERY ADDITIONS MADE BY TH E A.O. THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS AND CONTENDED THAT THE A. O WAS ERRED IN TREATING HIM AS HAWALA OPERATOR INVOLVED IN PROVIDING ACCOMMODA TION ENTRIES IGNORING ALL THE EVIDENCES FILED BY HIM TO PROVE THAT HE IS REGI STERED COMMISSION AGENT IN THE MARKET INVOLVED IN THE BUSINESS TO FACILITATE S ALES AND PURCHASE OF VARIOUS ENTITIES BY SELLING GOODS. THE ASSESSEE ALSO CHALLE NGED ADDITIONS MADE BY THE A.O TOWARDS TOTAL SUM FOUND CREDITED IN THE BANK AC COUNTS OF VARIOUS INDIVIDUALS. THE ASSESSEE SUBMITTED THAT THE BANK A CCOUNTS FOUND AND SEIZED DURING THE COURSE OF SEARCH ARE IN FACT BELONG TO E NTITIES MANUFACTURING GOODS WHICH ARE KEPT IN HIS CUSTODY FOR EASY FACILITATION S AND BUSINESS THEREFORE, THE SAME CANNOT BE CONSIDERED AS HIS OWN DOCUMENTS USED FOR ISSUING BOGUS BILLS. THE ASSESSEE FURTHER SUBMITTED THAT INSOFAR AS ESTI MATION OF COMMISSION OF TOTAL SALES BILLS IN THE NAME OF M/S VARUN INDUSTRI ES LTD AND OTHERS AND ALSO ADDITIONS MADE TOWARDS TOTAL SALES BILLS ON PROTECT IVE BASIS, ONCE HE WAS 21 DILIP SHAH / ATUL SANGHVI TREATED AS BOGUS BILLS PROVIDER, AND COMMISSION INC OME IS ESTIMATED ON TOTAL SALES, ADDITIONS CANNOT BE MADE TOWARDS TOTAL SALES BILLS ON PROTECTIVE BASIS WHEN SUBSTANTIAL ADDITIONS HAS BEEN MADE IN THE HAN DS OF PERSONS RECEIVING THE BILLS. THE ASSESSEE FURTHER SUBMITTED THAT A SU BSTANTIAL ADDITION HAS BEEN MADE TOWARDS TOTAL VALUE OF SALE BILLS FOUND IN THE NAME OF M/S VARUN INDUSTRIES LTD; HENCE, AND PROTECTIVE ADDITION MADE IN ITS HANDS, SHOULD BE DELETED. AS REGARDS ADDITION MADE TOWARDS BANK CRED ITS, THE ASSESSEE SUBMITTED THAT THE BANK ACCOUNTS FOUND DURING THE C OURSE OF SEARCH ARE, IN FACT, BELONG TO SOME OTHER PERSONS AND FURTHER, THE Y HAVE CATEGORICALLY ADMITTED BEFORE THE A.O BY FILING CONFIRMATION LETT ER AND THEIR I.T. RETURNS, THEREFORE THE A.O WAS ERRED IN TREATING TOTAL SUM F OUND CREDITED IN THE BANK ACCOUNT AS HIS UNEXPLAINED INCOME. 16. THE CIT(A) AFTER CONSIDERING THE ASSESSEES SUBMISS IONS AND ALSO TAKING INTO ACCOUNT THE FACTS OF THE CASE HAS OBSERVED THA T THERE IS NO MERIT IN THE LEGAL GROUND RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF ASSESSMENTS, AS THOUGH THE A.O HAS PASSED A CONSOLIDATE ORDER, THE ORDER PASSED BY THE A.O IS NOTICEABLY SEPARATE INSOFAR AS THE ADDITIONS / COM PUTATION OF TOTAL INCOME ARE CONCERNED. THE CIT(A) REFERRING TO THE PERSONS OF S ECTION 292B OF THE ACT, OBSERVED THAT NO ASSESSMENT MADE IN PURSUANCE OF AN Y OF THE PROVISIONS I.T. ACT, SHALL BE INVALID OR SHALL BE DEEMED TO BE INVA LID MERELY BECAUSE ON ANY 22 DILIP SHAH / ATUL SANGHVI MISTAKE, DEFECT OR OMISSION IN SUCH ASSESSMENT, IF THE SAID ASSESSMENT IN SUBSTANCE AND IN EFFECT IS IN CONFORMITY WITH OR A CCORDING TO THE INTENT AND PURPOSE OF THE INCOME-TAX ACT. ADMITTEDLY, THE LD A.O HAD ISSUED SEPARATE NOTICE U/S 153A FOR ALL THE YEARS AND IT WAS ONLY F OR THE SAKE OF BREVITY AND CONSOLIDATION OF THE FACT THAT ONE SINGLE ORDER WAS PASSED, THOUGH MANIFESTLY ADDITIONS FOR ALL THE ASSESSMENT YEARS HAVE BEEN MA DE SEPARATELY AND COMPUTATION OF INCOME FOR EACH YEAR HAS BEEN DONE S EPARATELY. THEREFORE, THERE IS NO DOUBT THAT THE INTENT AND PURPOSE OF PA SSING OF SUCH AN ORDER IS, IN SUBSTANCE AND EFFECT, IN CONFORMITY WITH THE INTENT OF THE I.T. ACT AND SQUARELY COVERED U/S 292B OF THE I.T. ACT, EVEN IF A HYPER T ECHNICAL PLEA HAS ARISEN THAT THERE SHOULD BE A SEPARATE ORDER FOR EACH YEAR ON I NDIVIDUAL SHEETS OF PAPER. ACCORDINGLY THE LEGAL GROUND RAISED BY THE ASSESSEE HAS BEEN DISMISSED. 17. INSOFAR AS OTHER GROUND OF APPEAL CHALLENGING ADDIT IONS MADE BY THE A.O TOWARDS SALES BILLS RAISED IN THE NAME OF M/S VARUN INDUSTRIES LTD. AND ESTIMATION OF COMMISSION ON SALES BILLS, ADDITIONS TOWARDS UNEXPLAINED BANK CREDITS, THE CIT(A) FOR THE DETAILED REASONS RECORD ED IN THIS ORDER DATED 24-07- 2012OBSERVED AS UNDER:- 2.6.1 VIDE GROUND NO.3 THE APPELLANT HAS RAISED AN ISSUE REGARDING AN INFERENCE DRAWN BY THE LD. A. O. THAT HE INDULGED IN THE BUSINESS OF ISSUANCE OF BOG US BILLS. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT APP ELLANT WAS FOUND IN POSSESSION OF SEVERAL BANK ACCOUNTS AND OT HER 23 DILIP SHAH / ATUL SANGHVI RELATED DOCUMENTS OF FICTITIOUS PERSONS AND A LARGE NUMBER OF SALE BILLS ISSUED TO VARIOUS CONCERNS INCLUDING THOSE OF M/S.VARUN IND. LTD. WERE FOUND ALONGWITH A NUMBER O F CHEQUE BOOKS AND BANK LIPS. EVIDENCE WAS ALSO FOUND OF TAMPERING OF DOCUMENTS SUCH AS PAN CARDS BY SUBSTIT UTION OF NAMES AND PHOTOGRAPHS. IN ONE OF SUCH CASE, SAME PERSON'S PHOTO WAS USED IN THREE DIFFERENT BANK ACCOUNTS IN THREE DIFFERENT NAMES. THUS, IT CANNOT BE SAID THAT APPELLANT WAS NOT INDULGED IN THE BUSINESS OF ISSUA NCE OF BOQUS BILLS. BY MAKING A MERE AVERMENT THAT HE WAS NOT INVOLVED IN SUCH ACTIVITY IN SPITE OF A HOST OF SUCH EVIDENCE FOUND IN HIS POSSE SSION WOULD NOT CUT MUCH ICE AND CANNOT LEAD TO AN INFERENCE WHICH THE APPELLANT WANTS THE REVENUE AUTHORITIES TO HOLD. IN VIEW OF T HE ABOVE FACTS THERE IS NOT EVEN OF IOTA OF TRUTH IN THE PLE ADINGS MADE BY THE APPELLANT AND HENCE GROUND NO 3 IS DISMISSED . 2.7.1 GROUND NO.4 RELATES TO MAKING OF PROTECTIVE A SSESSMENT OF PS.35,46,36,038/- ON ACCOUNT OF SALES MADE TO M/S. VARUN INDS. LTD. THE ONLY PLEA WHICH HAS BEEN MADE BY THE APPELLANT IS THAT BECAUSE A SUBSTANTIVE ADDITION HAS BEEN MADE IN THE HANDS OF M/S. VARUN IND. LTD., THE PROTECTIVE ASSESSMENT IN THE H ANDS OF THE APPELLANT, WOULD NOT SURVIVE. IT IS TRUE THAT A SUB STANTIVE ADDITION HAS NOW BEEN MADE IN THE HANDS M/S VARUN IND. LTD., BUT AS LONG AS THE ISSUE HAS NOT ATTAINED FINALITY, ON FACTS AND I N LAW, IT CANNOT BE SAID THAT THE PROTECTIVE ASSESSMENT IN TH E HANDS OF THE APPELLANT IS WRONG BECAUSE THE VERY BASIS OF MA KING A PROTECTIVE ASSESSMENT IS TO PROTECT THE INTEREST OF REVENUE WHICH EVEN THE APPELLANT HAS NOT DENIED. ONLY IF THE SUBS TANTIVE ADDITION MADE IN THE HANDS OF M/S. VARUN IND. LTD. SURVIVES ALL POSSIBLE ROUNDS OF LITIGATION AND ATTAINS A FINALITY, WOULD THE APP ELLANT BE DOCUMENTS RELIEVED OF ITS LIABILITY. IT IS A STATED POSITION THAT- DOCUMENTS RELATING TO VARIOUS BOGUS BANK ACCOUNTS AND DUMMY A CCOUNTS ALONGWITH PAN CARDS AND OTHER DOCUMENTS WERE SEIZED FROM THE APPELLANTS PREMISES SUGGESTING THAT HE WAS ENGAGED IN A SCAM OF MAMMOTH PROPORTION IN THE STEEL MARKET AND THEREFOR E, 1 DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. A.O. IN MAKINQ A PROTECTIVE ASSESSMENT IN THE HANDS OF APPELLANT'S H ANDS. HENCE, FOR THE PURPOSE OF DECIDING THIS APPEAL, ADDITION MADE BY THE LD. A.O. IS CONFIRMED. NEVERTHELESS, THE APPELLANT SHAL L BE ENTITLED TO A RELIEF IF THE SUBSTANTIVE ADDITION MA DE IN THE 24 DILIP SHAH / ATUL SANGHVI HANDS OF M/S.VARUN INDS. LTD. IS CONFIRMED AFTER AL L ROUNDS OF LITIGATION. 2.8.1 GROUND NOS. 5 & 6 RELATE TO ADDITION ON ACCOU NT OF COMMISSION 2% ON BOGUS SALES MADE. DURING THE COURS E OF SEARCH, IT WAS FOUND THAT THE APPELLANT WAS IN POSS ESSION OF SIGNED CHEQUE BOOKS AND OTHER RELATED DOCUMENTS SUC H AS PAN CARD ETC. OF VARIOUS ENTITIES AND WHEN HE WAS ASKED TO PRODUCE THE PERSONS, THE APPELLANT WAS UNABLE TO PRODUCE TH EM. ALTHOUGH, THE APPELLANT IS STATED TO HAVE FILED CER TAIN CONFIRMATIONS, THE LD. A.O. WAS NOT SATISFIED WITH THE SAME AND HE INFORMED THE APPELLANT TO PRODUCE THE PARTIES FO R VERIFICATION OF THEIR EXISTENCE AS WELL AS FOR CARR YING ON OF BUSINESS RELATING TO THE SALE BILLS FOUND FROM THE APPELLANT 'S POSSESSION. AS PER THE ORIGINAL ASSESSMENT ORDER FR AMED BY THE LD. AC. AND WHICH APPEARS AS AN ATTACHMENT T O THE IMPUGNED ASSESSMENT ORDER PENDING ADJUDICATION BEFO RE ME, LD. A.O. HAS POINTED OUT THAT NONE OF THE PARTIES E XCEPT ONE HAD FILED HIS/ITS RETURN OF INCOME AND THEREFORE NOTHIN G TURNS ON THE FACT THAT SOME OF THE PARTIES WERE PRODUCED BEF ORE HIM DURING THE COURSE OF ORIGINAL ASSESSMENT. LD. A.O. HAS FURTHER POINTED OUT THAT THE PARTIES HAD NOT BEEN ABLE TO E STABLISH WITH ANY DOCUMENTARY EVIDENCE REGARDING DELIVERY OF MANUFACT URED GOODS TO DIFFERENT PARTIES AND NO BOOKS OF ACCOUNTS WERE PRODUCED BEFORE HIM FOR VERIFICATION. ACCORDING TO THE LD. A.O., ENTRIES IN VARIOUS BOOKS OF ACCOUNTS REMAINED UNEXPLAINED AND THEREFORE APPELLANT'S VERSION THAT THE VARIOUS ENTITIES/PERSONS WERE CARRYING OUT GENU INE BUSINESS ACTIVITIES REMAINED UNSUBSTANTIATED. 2.8.2 THE SAME FACTS HAVE BEEN REITERATED BY THE L D. A.O. DURING THE ASSESSMENT FRAMED WHICH HAS BEEN APPEALED AGAIN ST BEFORE ME. 2.8.3 THE LD. A.R. IN HIS SUBMISSION HAS DEALT WITH GROUND NOS. 5 TO 8 TOGETHER, AS ACCORDING TO HIM, T HE SOME ARE INTERLINKED. ACCORDING TO HIM, THE APPELLANT IS .A COMMISSION AGENT IN THE METAL MARKET WHERE THE RATE OF COMMISSION IS NOT FIXED AND VARIES BETWEEN 0.02% TO 0.05 %. HOWEVER, THERE IS NO WRITTEN AGREEMENT ENTERED I NTO 25 DILIP SHAH / ATUL SANGHVI BETWEEN COMMISSION AGENT AND THE CLIENTS. EVEN IN T HE GROUNDS OF APPEAL, THE APPELLANT HAS MENTIONED THAT THE PREVAILING COMMISSION RATE IN THE STEEL MARKET RANG ES BETWEEN 0.02% TO 0.05%. THUS, THERE IS NO DENYING T HE FACT THAT THE APPELLANT EARNS COMMISSION AND THE SERVICE S RENDERED BY HIM. IT IS ALSO A MATTER OF FACT THAT D URING THE COURSE OF SEARCH, THE APPELLANT WAS FOUND IN TH E POSSESSION OF SIGNED BLANK CHEQUES, SALE BILLS ISSU ED BY VARIOUS DUMMY COMPANIES WHICH WENT ON TO PROVE THAT THE APPELLANT WAS ENGAGED IN ISSUING BOGUS BILLS AND TH EREFORE IT IS OBVIOUS THAT THE NORMAL RATE OF COMMISSION WO ULD NOT BE CHARGED BY HIM TO THE PERSPECTIVE BILL SEEKERS. THE PERSONS USING THESE BILLS WOULD BE SAVING SUBSTANTIAL AMOUN T OF TAX BY CLAIMING BOGUS DEDUCTION. THEY WOULD BE HAPPY TO PA RT WITH AT LEAST 2%, AN ESTIMATION WHICH CANNOT BE STATED TO B E OUT OF SYNC WITH THE BENEFIT EARNED BY THE BILL SEEKERS. THEREF ORE, AS FAR AS COMMISSION OF 2% ESTIMATED BY THE LD. A.O. IS CONCE RNED NOT FIND ANY FAULT WITH THE SAME AND ACCORDINGLY GROUND NOS. 5&6 ARE CONFIRMED. 2.9.1 AS REGARDS GROUND NOS.7 & 8 THEY ARE IN RESPECT OF ADDITIONS MADE ON ACCOUNT OF CASH DEPOSI TS IN THE BANK ACCOUNT OF THE PERSONS OTHER THAN THE APPELLAN T WHICH WERE FOUND FROM THE POSSESSION OF THE APPELLANT DURING T HE COURSE OF SEARCH ALONG WITH SIGNED BANK CHEQUES, SALE BILL S, PAN CARDS ETC. AND WHICH REMAINED UNEXPLAINED BY THE APPELLAN T DESPITE GIVING SUBSTANTIAL OPPORTUNITIES. LD.A.0., ON THE B ASIS OF DIRECTIONS ISSUED TO HIM U/S.263 HAS FRAMED DENOVO ASSESSMENT AND IN DOING SO HE PROVIDED ADEQUATE OPPORTUNITIES TO THE APPELLANT FOR SUBMITTING PROOF OF IDENTITY, CREDITW ORTHINESS OF SUCH PERSONS AND THE BUSINESS OPERATIONS CLAIMED TO HAVE BEEN CARRIED OUT BY THEM ALONGWITH GENUINENESS OF THE SA ME. DURING THE YEARS UNDER APPEAL, THE BANK CREDITS TOTAL TO RS.13,88,09,01,411/-, THE SOURCE OF WHICH WAS TO BE EXPLAINED BY THE APPELLANT ALONGWITH NECESSARY DOCU MENTS. THE APPELLANT SUBMITTED BEFORE THE LD. A.O THAT THESE C REDITS WERE FOUND IN THE BANK ACCOUNT OF PERSONS OTHER THAN THE APPELLANT AND HENCE THE CREDITS APPEARING IN THOSE ACCOUNTS COULD NOT BE ATTRIBUTED TO THE APPELLANT'S BUSINESS OR PROFESSION. HE FURTHER ASSERTED BEFORE THE LD. A.O. THAT THE APPELLANT 26 DILIP SHAH / ATUL SANGHVI WORKED AS AGENTS FOR PURCHASES IN RESPECT OF SOME O F THEIR SELLER PRINCIPALS AND IN ORDER TO FACILITATE THE TRANSACTI ONS FOR SUCH PRINCIPALS, ESPECIALLY PURCHASE TRANSACTIONS W HERE PROMPT AND IN TIME PAYMENTS WERE OF UTMOST SIGNIFICANCE, SIGNED CHEQUE BOOKS DULY SIGNED BY TH IRD PARTIES WERE KEPT WITH THE APPELLANT IN CONFIDENCE. IN VIEW OF THE ABOVE FACTS, IT WAS PLEADED THAT THE BANK AC COUNTS FOUND DURING THE COURSE OF SEARCH AT THE APPELLANT' S PREMISES WERE NOT BENAMI ACCOUNTS AND THE SIGNED CHEQUE BOOK S WERE KEPT ONLY TO FACILITATE SMOOTH TRADE. 2.9.2 LD. A.O. WAS NOT SATISFIED WITH THE SUBMISSIO NS MADE AND FOR THE FOLLOWING REASONS HE MADE THE ADDI TION IN THE VARIOUS ASSESSMENT YEARS PERTAINING TO THE SEAR CH: '1. THE ASSESSEE HAS NOT DISCHARGED HIS ONUS OF PRO VING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF ANY OF THESE TR ANSACTIONS PERTAINING TO RS.1388. 09 CRORES. 1. ASSESSEE REPRESENTATIVE HAS SIMPLY RE//ED ON THE FACT THAT S OME PARTIES WERE PRODUCED DURING THE ORIGINAL ASSESSMEN T PROCEEDINGS OR THAT CERTAIN AUDITED ANNUAL ACCOUNTS AND COP/ES OF IT RETURNS HAVE BEEN SUBMITTED IN SOME CASES. TH IS TOO HOWEVER, DOES NOT DISCHARGE HIS ONUS. 2. HAS MERELY MADE HIS SUBMISSIONS WHICH WERE MADE EV EN AT THE TIME OF THE ORIGINAL ASSESSMENT PROCEEDINGS AND HAV E BEEN REJECTED THERE ITSELF. 3. THE PURPOSE OF THE PRESENT PROCEEDINGS IS MERELY TO MAKE FRESH ASSESSMENT ONLY WITH RESPECT TO THE DEPOSITS IN THE BANK ACCOUNTS AND IT IS BEYOND BY JURISDICTION TO C OMMENT OR DELVE ON THE OTHER ISSUES WHICH HAVE ALREADY ACHIEV ED FINALITY SO FAR AS THIS OFFICE IS CONCERNED. 4. THE DELHI HIGH COURT IN THE CASE OF CTT VS. OASIS H OSPITAL PVT. LTD. (REPORTED IN ITATONLIN.ORG ) HAS WHILE DECIDING ON AN ISSUE OF ADDITION U/S. 68 OF THE I T ACT HAS CATEGORICALLY H ELD THAT S. 68 27 DILIP SHAH / ATUL SANGHVI PROVIDES THAT IF THE ASSESSEE IS NOTABLE TO GIVE SATISFACTORY EXPLANATION AS TO THE NATURE AND SOURCE' OF A SUM F OUND CREIA TED IN HIS BOOKS, THE SUM MAY BE TREATED AS THE UND ISCLOSED INCOME' OF THE ASSESSEE. THE INITIAL BURDEN IS ON THE ASSES SEE TO EXPLAIN THE SOURCE' OF THE CREDIT AND TO DO SO, THE ASSESSEE IS REQUIRED TO PROVE (A) IDENTITY OF THE SHAREHOLDER; (B) GENUINEN ESS OF TRANSACTION; AND (C) CREDIT WORTHINESS OF SHAREHOLD ER...' 5. ONCE IT HAS BEEN PROVEN THAT THE ASSESSEE IS INDULG ING IN PROVIDING BOGUS BILK AND MORE SO HE HAS NOT DISCHAR GED HIS ONUS OF NEITHER PROVING THE IDENTITY, GENUINENESS AND CR EDITWORTHINESS OF THESE TRANSACTIONS NOR DISCLOSED THE NAMES OF THE B ENEFICIARIES HIS CONDUCT, HE IS NOT PROVIDING THE DETAILS OF THE PER SONS IN WHOSE HANDS THE TRANSACTIONS MAY BE EXAMINED OR ADDED SUB STANTIVELY. 6. UNDER THE GIVEN CIRCUMSTANCES, THE ONLY RECOURSE L EFT TO THIS OFFICE IS TO PROCEED ON MAKING THE ASSESSMENT ON THE BASIS OF THE INSTRUCTIONS OF THE HONBLE CIT AS MENTIONED IN THE ORDER PASSED U/S. 263 OF THE I.T ACT I.E. BY ADDING THE SAID BANK DEPOSITS AMOUNTING TO PS. 1,388.09 CRORES SUBSTANTIVELY IN T HE HANDS OF THE TWO PERSONS TO DIVIDE PROPORTIONATELY AS PER, H E SHARE OF HIS PROFITS IN THE SAID BUSINESS. 7. IT WOULD BE PERTINENT TO MENTION HERE THAT SINCE T HE SAID DEPOSITS ARE BEING ADDED SUBSTANTIVELY, THE COMMISS ION INCOME 2% SHALL NOT BE ADDED FURTHER ON THESE DEPOSITS. HOWEV ER IN CASE THE ASSESSEE IS TO BE GRANTED RELIEF IN THE APPELLATE S TAGES ON THIS ADDITION, HE WOULD STILL HAVE TO BE TREATED AS A BI LLER AND INCOME @ 2% OF THE SAID BANK DEPOSITS BEING COMMISSION EARNE D FOR PROVIDING AND FACILITATING THE SAID BILLS WOULD BE ELIGIBLE T O BE ADDED IN HIS HANDS PROPORTIONATELY AS PER THE SHARE OF IS PROFIT S IN THE SAID BUSINESS. 2.9.3 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AFLER PERUSING THE RECORD, I AM COMPLETELY IN AGREEMENT W ITH THE VIEW TAKEN BY THE LD. A.O. THAT THE APPELLANT WAS ENGAGE D IN ISSUING BOGUS BILLS AND FOR THAT PURPOSE HE WAS MAINTAINING BENAM I BANK ACCOUNTS IN THE NAMES OF DIFFERENT PERSONS, DUMMY OR EXISTIN G. FURTHER, THE APPELLANT WAS ENGAGED IN SUCH TRANSACTIONS AND EARNED SUBSTANTIAL COMMISSION ON THE SAME. TO ME IT APPEAR S TO BE A PURE CASE OF MONEY LAUNDERING AND NOTHING ELSE AS THE AP PELLANT DESPITE BEING GIVEN A NUMBER OF OPPORTUNITIES FAILE D TO PRODUCE 28 DILIP SHAH / ATUL SANGHVI ALL THE PARTIES IN WHOSE NAMES THE BANK ACCOUNTS WE RE BEING MAINTAINED AND THE LETTERS ISSUED BY THE LD. A.O. F ROM TIME TO TIME TO THESE PARTIES AT THE ADDRESSES MENTIONED WE RE RETURNED BACK UNSERVED. EVEN THE PARTIES WHO WERE PRODUCED B EFORE THE LD. AG. DID NOT FILE ANY RETURN OF INCOME EXCEPT IN ONE SOLITARY INSTANCE AND NO BOOKS OF ACCOUNTS OR OTHER DOCUMENT S WERE PRODUCED TO SUBSTANTIATE THE CLAIM MADE BY THE APPE LLANT AND HIS WITNESSES THAT THEY CARRIED OUT INDEPENDENT IDENTIF IABLE GENUINE BUSINESS. THAT BEING THE CASE, IT CAN BE SAFELY PRE SUMED THAT THE ONUS WHICH WAS CAST ON THE APPELLANT TO SUBSTANTIAT E THE CLAIM MADE WAS NOT DISCHARGED AND THEREFORE NO FAULT CAN BE FO UND WITH THE ACTION TOKEN BY THE LD. A.O. IN BRINGING TO TAX THE AMOUNTS AS IN THE ASSESSMENT ORDER. THE CASE LAWS CITED BY ID. A. 1. ARE DISTINGUISHABLE ON FACTS AS NONE OF THEM DEAL WITH HAWALA RACKET. 2.9.4 EVEN AS PER THE STATEMENT OF SHRI PRADEEP M. JOBALIA RECORDED ON 8.3.2007 HAVING OFFICE AT PODAR CHAMBERS, GROUND FLR PARSI BAZAR ST., FORT, MUMBAI 400001, IT IS APPARENT THAT HIS OFFICE ADDRESS WAS BEING USED BY THE APPEL LANT FOR RECEIVING CORRESPONDENCE FROM BANK SHRI JOBAHA IN R EPLY TO QUESTION NO .2 CLEARLY MENTIONED THAT HE DID NOT KN OW ANY OF THE PARTIES AND IT WAS ONLY SHRI DILIP CHUNHAL SHAH AND SHRI ATUL AMRUTLAL SANGHVI WHO WERE COLLECTING THE CORRESPOND ENCE APART FROM HIS OFFICE. EVEN IN THE CROSS EXAMINATIO N OF SHRI JOBALIA DONE BY SHRI ATUL SANGHVI AND HIS AUTHORIZE D REPRESENTATIVE IT WAS CLEAR THAT NONE OF THE PERSON S WHOSE CORRESPONDENCE ADDRESS WAS GIVEN AS THAT OF SHRI JO BALIAS OFFICE HAD MET SHRI JOBALIA AND IT WAS ONLY SHRI ATUL SANG HVI WHO USED TO VISIT SHRI JOBALIA'S OFFICE WITH SHRI DILIP C.SHAH FOR COLLECTING THE CORRESPONDENCE. FURTHER, A SUM OF RS .300/- WAS GIVEN BY SHRI ATUL A. SANGHVI TO SHRI JOBALIA FOR E ACH SUCH CONCERN. THUS, ITIS C1&IR FROM THE SEQUENCE OF EVEN TS THAT SHRI ATUL A. SANGHVI AND SHRI DILIP C. SHAH WERE MASTER MIND BEHIND MAINTAINING OF THE FICTITIOUS BANK ACCOUNTS FOR WHI CH DIFFERENT ADDRESS WERE GIVEN. SIMILAR STATEMENTS WERE ALSO RE CORDED OF SHRI VINODUMAR UTTAMIAL SHAH ON 21.3.2007, AND SHRI N.V. NEELAKANTAN ON 26.02.2007 WHERE IT WAS CONFIRMED TH AT VARIOUS ACCOUNTS WERE OPERATED/HANDLED BY SHRI ATUL A. SANG HVI AND SHRI DILIP C. SHAH FORMER INTRODUCED ONE SHRI 5ANDEEP PO ONAMCHAND 29 DILIP SHAH / ATUL SANGHVI SHAH AT THE BEHEST OFSHRLATFAT3NGH . VI FOR OENINA BANK ACCOUNT. IT IS IMPORTANT TO NOTE THAT THE PHOTOGRAP H APPEARING IN THE ACCOUNT OPENING FORM OF SHRI SANDEEP POONAMC HAND SHAH WITH BANK OF MAHARASHTRA JHAVERI BRANCH WAS ALSO AP PEARING IN THREE DIFFERENT NAMES AND ALL THE CHEQUE BOOKS PERTAININ G TO THE SAME HAVE BEEN FOUND FROM THE POSSESSION OF SHRI AT UL SANGHVI AND SHRI DILIP C. SHAH. SHRI NEELKANTAN WAS WORKING WITH NATIONAL CO-OPERATIVE BANK, FORT BRANCH AND HE STAT ED THAT A NUMBER OF ACCOUNTS WERE BEING OPERATED BY SHRI ATUL A. SANGHVI AND SHRI BILIP C. SHAH IN VARIOUS BRANCHES INCLUDING HIS BRANCH AND THAT THESE ACCOUNTS WERE NEVER OPERA TED BY ANY PERSON OTHER THAN SHRI ATUL A. SANGHVI AND SHRI DILIP C. SHAH. ALL THE CHEQUES IN THESE ACCOUNTS WERE DEPOSITED BY THEM AND THE CHEQUES FOR WITHDRAWAL OR TRANSFER WERE ALSO SU BMITTED BY THEM FURTHER CONFIRMED THAT ACCOUNTS WERE NEVER OPERATED OR HANDLED B Y THE ACTUAL ACCOUNT HOLDERS. THIS STATEMENT WAS ALS O SHOWN TO SHRI ATUL A. SANGHVI AND SHRI DILIP C. SHA H WHO CONFIRMED, DURING THE COURSE OF CROSS EXAMINATION, THAT THE STATEMENT WAS CORRECT. LD. A.Q. HAD DISCUSSED AT LE NGTH IN THE ORIGINAL ASSESSMENT THE SEIZED DOCUMENTS AT PARA 11 THEREOF TO COME TO THE FOLLOWING CONCLUSION: '1. THAT IN FACT SH. ATUL SANGHVI AND SH. DILIP 5HA H WERE THE PERSONS WHO HAD OPERATED THE OVER HUNDRED BANK ACCO UNTS AND DIFFERENT ENTITIES. 2. THAT SHRI DILIP SHAH AND SHRI ATUL SANGHVI WERE IN FACT INVOLVED IN ISSUING MERE BILLS IN THE NAME OF DIFFE RENT ENTITIES. 3. SHRI B/LIP SHAH AND SHRI ATUL SANGHVI (DUO) WAS FAB RICATING DOCUMENTS LIKE PAN CARDS SIGNATURES ETC. TO OPEN BA NK ACCOUNTS IN THE NAME OF DIFFERENT PERSONS, WHO HAD NOTHING TO D O WITH THOSE TRANSACTIONS, IN FACT THEY WERE MERE NAME LENDERS O R DUMMIES. 4. THE DUO WERE HANDLING ALL THE CORRESPONDENCE OF THE DIFFERENT CONCERNS. 5 THE DUO WERE OPERATING THE BANK ACCOUNTS AND CASH WITHDRAWAL AND OTHER TRANSACTIONS WERE CARRIED OUT BY THE ASSESSEE.' DISMISSED THE APPEAL FILED BY THE ASSESSEE. THE SUM AND SUBSTANCE OF THE OBSERVATIONS OF THE CIT(A), THE EVIDENCES COLLE CTED DURING THE 30 DILIP SHAH / ATUL SANGHVI COURSE OF SEARCH, AND INQUIRY CONDUCTED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS UNDOUBTEDLY PROVE THE FACT T HAT THE ASSESSEE ALONG WITH SHRI ATUL SANGHVI ARE INVOLVED IN PROVI DING ACCOMMODATION ENTRIES IN THE FORM OF BOGUS BILLS TO VARIOUS PERSONS. THE CIT(A) FURTHER OBSERVED THAT THE STATEMENT RECO RDED FROM THE ASSESSEE AND OTHER ASSOCIATE AND THE STATEMENTS SHR I P.M. JOBALIA, SHRI N.V. NEELAKANTAN, AND SHRI VINOD KUMAR UTTAMAL SHAH FURTHER SUPPORTED THE FINDINGS OF THE A.O THAT THE ASSESSEE IS A HAWALA OPERATOR ISSUED BOGUS BILLS IN THE NAME OF DUMMY/FI CTITIOUS CONCERNS AND OPERATED MORE THAN 100 BANK ACCOUNTS VARIOUS NA MES BY FABRICATING DOCUMENTS LIKE RATION CARD, PAN CARD, A ND PHOTOGRAPH ON INDIVIDUAL OF THESE EVIDENCE LEADS TO A CONCLUSION THAT THE ASSESSEE IS A HAWALA OPERATOR ISSUED BOGUS BILLS TO VARIOUS BEN EFICIARIES AND ASSESSMENT ORDER PASSED BY THE A.O TREATING THE TOT AL ACTIVITY AS A HAWALA OPERATOR AND ADDITIONS MADE BY THE A.O TOWAR DS ESTIMATION OF COMMISSION ON TOTAL SALES BILLS, ADDITIONS TOWAR DS TOTAL SALES ON PROTECTIVE BASIS, ADDITIONS TOWARDS UNEXPLAINED BAN K CREDITS, ADDITIONS TOWARDS 2% COMMISSION ON PROTECTIVE BASIS ON TOTAL BANK CREDITS AND ADDITIONS TOWARDS UNEXPLAINED CASH DEPO SITS TO BANK ACCOUNT HAS BEEN CONFIRMED. 18. THE CIT(A), FOR THE DETAILED REASONS IN HIS ORDER V IDE PARAA 2.6.1 TO 2.9.4 UPHELD ADDITIONS MADE BY THE AO AND DISMISSED APPEA L FILED BY THE ASSESSEE FOR ALL ASSESSMENT YEARS FROM 2001-02 TO 2007-08.AG GRIEVED BY THE CIT(A) ORDER THE ASSESSEE IS IN APPEAL BEFORE US. 19. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATION IS LEGALITY OF CONSOLIDATED ORDER PASSED BY THE A.O FOR ALL SEVEN ASSESSMENT YEARS FROM 2001-02 TO 2007-08. THE LD. A.R FOR THE ASSESSEE TH OUGH RAISED THE GROUND CHALLENGING VALIDITY OF CONSOLIDATED ORDER FOR ALL SEVEN ASSESSMENT YEARS, SUBMITTED THAT HE DO NOT WANT TO FRESH GROUND NO. 1 AND 2 CHALLENGING THE 31 DILIP SHAH / ATUL SANGHVI CONSOLIDATED ORDER PASSED BY THE A.O; HENCE GROUNDS NO. 1 OR 2 RAISED BY THE ASSESSEE ARE DISMISSED, AS NOT PRESSED. 20. EVEN ON MERITS, WE FIND THAT THOUGH THE A.O HAD PAS SED CONSOLIDATED ORDER, INSOFAR AS ADDITIONS AND COMPUTATION OF TOTA L INCOME ARE CONCERNED NOTICEABLY SEPARATE ORDER HAS BEEN PASSED FOR EACH ASSESSMENT YEAR WHICH CAN BE ASCERTAINED INDEPENDENTLY FROM THE ORDER OF THE A.O. THE LD. CIT(A) AFTER CONSIDERING THE FACT AND ALSO PROVISIONS OF SECTION 292B, OBSERVED THAT NO ASSESSMENT MADE IN PURSUANCE OF ANY OF THE PROVISIO NS OF I.T. ACT SHALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH ASSESSMENT, IF SUCH ASSE SSMENT IS IN SUBSTANCE AND EFFECT IS IN CONFORMITY WITH THE INTENT AND PURPOSE OF THE I.T. ACT, 1961. IN THIS CASE, ADMITTEDLY, THE A.O HAD ISSUED SEPARATE NOTIC E U/S 153A FOR ALL THE YEARS AND IT WAS ONLY FOR THE SAKE OF BREVITY AND CONSOLI DATION OF THE FACT THAT ONE SINGLE ORDER WAS PASSED THOUGH MANIFESTLY ADDITIONS FOR ALL THE ASSESSMENT YEARS HAVE BEEN MADE SEPARATELY AND COMPUTATION OF INCOME OF EACH YEAR IN THE BLOCK PERIOD HAS BEEN DONE SEPARATELY. THERE IS NO ERROR IN THE ORDER OF THE CIT(A). THEREFORE, WE ARE INCLINED TO UPHOLD THE F INDINGS OF THE CIT(A) AND DISMISS THE GROUNDS RAISED BY THE ASSESSEE. 21. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATION F ROM GROUNDS NO. 3 TO 7 REVOLVES AROUND ONE COMMON ISSUE OF ACTIVITY OF T HE ASSESSEE AND 32 DILIP SHAH / ATUL SANGHVI COMPUTATION OF INCOME FROM SUCH ACTIVITY. THE LOWER AUTHORITIES CAME TO THE CONCLUSION THAT THE ASSESSEE IS A HAWALA OPERATOR I NVOLVED IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS PARTIES BY ISSUING BOGUS PURCHASE BILLS AND ENGAGED IN MONEY LAUNDERING ACTIVITIES, THEREFORE C ONCLUDED THAT THE ASSESSEE IS A HAWALA OPERATOR AND INCOME FROM SUCH ACTIVITIE S HAS TO BE COMPUTED BY TAKING INTO ACCOUNT OF TOTAL SUM FOUND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE AND ALSO INCOME FROM ESTIMATION OF INCOME FROM SUCH TOTAL RECEIPTS. THE FACUAL MATRIX OF THE CASE WHICH LEAD TO THE DIS PUTE ARE THAT INITIALLY A SURVEY OPERATION U/S 133A OF THE INCOME TAX ACT, 19 61 WAS CARRIED OUT IN THE OFFICE PREMISES OF THE ASSESSEE, WHEREIN INFORMATIO N ABOUT THREE BANK LOCKERS WERE FOUND. SUBSEQUENTLY, THE CASE HAS BEEN CONVER TED INTO SEARCH BY ISSUING WARRANT U/S 132 AND CONDUCTED SEARCH IN THE PREMISE S OF THE ASSESSEE. DURING THE COURSE OF SEARCH INCRIMINATING DOCUMENTS IN THE FORM OF MORE THAN 100 BANK ACCOUNTS AND ALSO INFORMATION ABOUT MORE THAN 130 DUMMY/FICTITIOUS CONCERNS INCORPORATED/OPERATED BY THE ASSESSEE TO F ACILITATE ISSUE OF BOGUS BILLS WERE FOUND. THE DEPARTMENT ALSO SEIZED SALES BILLS ISSUED TO M/S VARUN INDUSTRIES LTD. IN THE NAME OF VARIOUS CONCERNS. BA SED ON ALL THESE EVIDENCES, COUPLED WITH FURTHER INQUIRIES CONDUCTED DURING THE COURSE OF SEARCH AND DURING ASSESSMENT PROCEEDINGS THE AO DRAWN AN UNDIS PUTED CONCLUSION THAT THE ASSESSEE IS A HAWALA OPERATOR INVOLVED IN PROVI DING ACCOMMODATION 33 DILIP SHAH / ATUL SANGHVI ENTRIES. THEREFORE THE A.O HAS CONCLUDED THE ISSUE BY DETERMINING THE INCOME FROM SUCH ACTIVITY BY ESTIMATING THE COMMISSION AT 2% ON TOTAL SALES BILLS ISSUED IN THE NAME OF M/S VARUN INDUSTRIES LTD. AND ADDED 50% OF THE SAME IN THE HANDS OF THE ASSESSEE AND REMAINING 50% IN THE HANDS OF SHRI ATUL SANGHVI. THE A.O ALSO ADDED TOTAL VALUE OF SALES WHICH WAS A MOUNTING TO RS.856,64,49,533/- ON PROTECTIVE BASIS TO PROTECT T HE INTEREST OF THE REVENUE. INSOFAR AS THE TOTAL CREDITS APPEARING IN THE BANK ACCOUNTS, THE A.O HAS MADE ADDITIONS TOWARDS TOTAL CREDITS FOUND IN THE BANK A CCOUNT AFTER REDUCING SALES BILLS ISSUED IN THE NAME OF M/S VARUN INDUSTRIES LT D. IN THE HANDS OF THE ASSESSEE AND HIS PARTNER SHRI ATUL SANGHVI IN THE R ATIO OF 50% EACH. 22. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE LD.AO WAS ERRED IN ESTIMATING COMMISSION ON TOTAL SALE BILLS ISSUED IN THE NAME OF M/S VARUN INDUSTRIES LTD @2% IGNORING THE FACT THAT THE PREVA ILING COMMON RATE IN THE STEEL MARKET RANGING BETWEEN 0.2% TO 0.5% SHALL BE HAVING REGARD TO THE FACT THAT THE ASSESSEE IS A REGISTERED BROKER IN THE MAR KET. THE LD.AR REFERRING TO THE PAPER BOOK FILED, SUBMITTED THAT THE ASSESSEE I S A REGISTERED BROKER IN THE STEEL MARKET INVOLVED IN FACILITATING BUSINESS OF P ROSPECTIVE MANUFACTURER OF STEEL GOODS TO THE BUYERS IN THE MARKET FOR WHICH H E CHARGES COMMISSION. THE AO IGNORING THE FACT HAS CONCLUDED THAT THE ASSESSE E IS A HAWALA OPERATOR ENGAGED IN PROVIDING ACCOMMODATION ENTRIES AND ESTI MATED COMMISSION 34 DILIP SHAH / ATUL SANGHVI INCOME @2% WITHOUT ANY BASIS. INSOFAR AS ADDITION MADE BY THE AO TOWARDS TOTAL SALE BILLS ISSUED IN THE NAME OF M/S VARUN IN DUSTRIES LTD ON PROTECTIVE BASIS, WHEN A SUBSTANTIVE ADDITION MADE IN THE HAND S OF M/S VARUN INDUSTRIES LTD, MAKING AN ADDITION ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE IS INCORRECT, MORE SO, WHEN THE ASSESSEE IS TREATED AS AN HAWALA OPERATOR AND INCOME FROM SUCH ACTIVITY HAS BEEN ESTIMATED AT 2% ON TOTAL SALE BILLS ISSUED. IN THIS REGARD, HE RELIED UPON THE DECISION OF ITAT , CHENNAI BENCH IN THE CASE OF PARASMAL DANGI ALIAS PARASMAL JAIN 100 TTJ 508. 23. THE LD.DR, ON THE OTHER HAND, STRONGLY SUPPORTING T HE ORDER OF THE CIT(A) SUBMITTED THAT EVIDENCES GATHERED DURING THE COURSE OF SEARCH AND POST SEARCH INVESTIGATION CONDUCTED DURING THE COURSE OF ASSESS MENT PROCEEDINGS CLEARLY ESTABLISH THE FACT THAT THE ASSESSEE, A HAWALA OPER ATOR, ISSUED BOGUS PURCHASE BILLS IN THE NAME OF VARIOUS DUMMY / FICTITIOUS CON CERNS AND OPERATED MORE THAN 100 BANK ACCOUNTS IN THE NAMES OF VARIOUS PERS ONS WHETHER EXISTING OR FICTITIOUS, THEREFORE, THE AO HAS RIGHTLY TREATED T HE ASSESSEE AS A HAWALA OPERATOR AND ESTIMATED INCOME FROM SUCH ACTIVITY AN D HIS ORDER SHOULD BE UPHELD. 24. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. IT IS AN UNDISPUTED FACT THAT INCRIMINATIN G MATERIALS FOUND AND SEIZED 35 DILIP SHAH / ATUL SANGHVI DURING THE COURSE OF SEARCH CLEARLY INDICATES THAT THE ASSESSEE IS ENGAGED IN ISSUING BOGUS BILLS IN THE NAME OF VARIOUS DUMMY / FICTITIOUS CONCERNS / COMPANIES AND OPERATED MORE THAN 100 BANK ACCOUNTS IN DIFFERENT BANKS IN THE NAME OF VARIOUS COMPANIES / FIRMS AND THIS FACT HAS NOT BEEN REBUTTED BY THE ASSESSEE WITH ANY EVIDENCES. THOUGH THE ASSESS EE CLAIMS TO HAVE INVOLVED IN THE BUSINESS OF COMMISSION AGENT IN STEEL MARKET , THE EVIDENCES COLLECTED DURING THE COURSE OF SEARCH UNDISPUTEDLY PROVES THE CASE OF THE REVENUE THAT IT IS A CASE OF HAWALA ENTRY OPERATOR AND ISSUED BOGUS BILLS IN VARIOUS ENTITIES NAME. THE AO HAS RECORDED CLEAR FACT TO THE EFFECT THAT THE ASSESSEE HAS ISSUED BOGUS PURCHASE BILLS IN THE NAME OF M/S VARU N INDUSTRIES LTD AND THIS FACT HAS BEEN ACCEPTED BY THE DIRECTORS OF M/S VARU N INDUSTRIES LTD IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH AND ACCORDINGLY A SUBSTANTIVE ADDITION HAS BEEN MADE IN THE HANDS OF M/S VARUN IN DUSTRIES LTD. THIS FACT WAS ALSO FURTHER SUPPORTED BY THE FACT THAT THE DEP ARTMENT HAD RECORDED STATEMENTS FROM VARIOUS PERSONS, WHO HAD ACCEPTED T HAT SHRI DILIP SHAH AND SHRI ATUL SANGHVI HAVE ISSUED BILLS IN THE NAME OF VARIOUS CONCERNS AND OPERATED BANK ACCOUNTS. THE STATEMENT GIVEN BY SHR I YASHWANT PANDYA, WHO IS AN ACCOUNTANT OF THE ASSESSEE HAS CLEARLY STATED IN HIS STATEMENT THAT UNDER INSTRUCTION FROM SHRI ATUL SANGHVI AND SHRI DILIP S HAH, THE BILLS IN RESPECT OF VARIOUS COMPANIES WERE PREPARED IN THE OFFICE OF TH E ASSESSEE AND THOSE BILLS 36 DILIP SHAH / ATUL SANGHVI WERE PREPARED IN THE NAME OF VARIOUS CONCERNS, WHOS E BLANK CHEQUES HAVE BEEN FOUND WITH THE ASSESSEE DURING THE COURSE OF S EARCH. THE STATEMENT OF SHRI PRADIP M JABALIA RECORDED DURING THE COURSE OF SURVEY ON 05-02-2007 ALSO LEADS TO AN UNDISPUTED CONCLUSION THAT SHRI PRADIP M JABALIA HAD GIVEN HIS ADDRESS FOR CORRESPONDENCE FOR SOME OF THE ACCOUNTS BEING OPERATED BY THE DUO, SHRI ATUL SANGHVI AND SHRI DILIP SHAH. IN HIS STATEMENT, SHRI PRADIP M JABALIA HAS CONFIRMED THAT THE LETTERS FROM THE BAN KS WERE COLLECTED BY SHRI ATUL SANGHVI AND SHRI DILIP SHAH. FURTHER, STATEME NT OF SHRI N.V. NEELAKANTAN RECORDED ON 26-02-2007 THROWS LIGHT ON THE MODUS OP ERANDI OF THE ASSESSEE THAT HE FABRICATED VARIOUS DOCUMENTS INCLUDING ADDR ESS PROOF, PAN CARDS AND ID PROOF OF VARIOUS INDIVIDUALS TO OPEN BANK ACCOUN TS IN DIFFERENT NAMES BY FABRICATING THE DOCUMENTS. THIS FACT WAS CONFIRMED BY SHRI N.V. NEELAKANTAN, WHO CATEGORICALLY ADMITTED THAT THE ASSESSEE HAS OP ERATED NUMBER OF BANK ACCOUNTS IN THE NATIONAL CO-OPERATIVE BANK. ALL TH ESE FACTS LEAD TO A CONCLUSION THAT THE ASSESSEE HAS FLOATED VARIOUS DU MMY COMPANIES / FIRMS TO FACILITATE ISSUING OF BOGUS PURCHASE BILLS AND OPER ATED BANK ACCOUNTS BY FABRICATING DOCUMENTS. THE ASSESSEE HAS NOT BEEN A BLE TO REBUT ANY OF THE FINDINGS RECORDED BY THE AO, THOUGH HE CLAIMS THAT HE IS A REGISTERED BROKER IN THE STEEL MARKET. THEREFORE, WE ARE OF THE CONSIDE RED VIEW THAT THE LOWER AUTHORITIES WERE RIGHT IN CONCLUDING THAT THE ASSES SEE IS ENGAGED IN THE ACTIVITY 37 DILIP SHAH / ATUL SANGHVI OF PROVIDING ACCOMMODATION ENTRIES. HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF CIT(A) AND DISMISS THE GROUND RAISED BY THE ASSESSEE. 25. COMING TO THE ADDITIONS MADE BY THE AO TOWARDS ESTI MATION OF COMMISSION @2% ON TOTAL SALE BILLS ISSUED IN THE NA ME OF M/S VARUN INDUSTRIES LTD ON SUBSTANTIVE BASIS AND ADDITION MADE TOWARDS TOTAL SALE VALUE ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE, THE AO HAS ESTIMATED COMMISSION @2% ON TOTAL SALE BILLS ISSUED IN THE NA ME OF M/S VARUN INDUSTRIES LTD AND MADE ADDITIONS IN THE HANDS OF ASSESSEE AND HIS PARTNER, SHRI ATUL SANGHAVI @50% EACH. THE AO HAS ESTIMATED 2% COMMIS SION BY TAKING INTO ACCOUNT THE FACT THAT THE ASSESSEE HAS EARNED SUBST ANTIAL INCOME IN THE FORM OF COMMISSION WHICH IS EVIDENT FROM THE FACT THAT T HE ASSESSEE HAS WITHDRAWN SUBSTANTIAL AMOUNT OF CASH FROM THE BANK. THOUGH A SSESSEE CLAIMS THAT COMMISSION IN THE STEEL MARKET IS RANGING FROM 0.02 % TO 0.05%, BUT FAILED TO JUSTIFY THE RATE OF COMMISSION WITH ANY CORROBORATI VE EVIDENCE IN THE FORM OF SOME COMPARABLE CASES OR IN THE FORM OF WRITTEN AGR EEMENTS BETWEEN THE PARTIES FOR CHARGING COMMISSION. UNDER THESE CIRCU MSTANCES, THE LOWER AUTHORITIES CAME TO THE CONCLUSION THT IT IS FAIR A ND REASONABLE TO ESTIMATE COMMISSION AT 2% AS ASSESSEES INCOME FROM THE ACTI VITY OF ISSUING BOGUS BILLS. BEFORE US, THE ASSESSEE HAS NOT BEEN ABLE TO REBUT THE FACTS RECORDED BY THE AO AS WELL AS THE CIT(A). THOUGH THE ASSESSEE HAS RELIED UPON CERTAIN 38 DILIP SHAH / ATUL SANGHVI DECISIONS OF CO-ORDINATE BENCH, ON GOING THROUGH TH E CASE LAWS RELIED UPON BY THE ASSESSE,E WE CAME TO THE CONCLUSION THAT THE FA CT OF THOSE CASES ARE ENTIRELY DIFFERENT FROM FACTS OF THE CASE OF THE AS SESSEE; HENCE, CANNOT BE APPLIED TO THIS CASE. THEREFORE, WE ARE OF THE VIE W THAT THE AO WAS RIGHT IN ESTIMATING COMMISSION @2% ON TOTAL SALE BILLS ISSU ED IN THE NAME OF M/S VARUN INDUSTRIES LTD. THE CIT(A) AFTER CONSIDERING THE FACTS HAS RIGHTLY UPHELD THE ORDER OF THE AO. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). HENCE, WE ARE INCLINED TO UPHOLD THE ORDER OF THE C IT(A) AND DISMISS THE GROUND RAISED BY THE ASSESSEE. 26. COMING TO ADDITION MADE TOWARDS TOTAL SALE BILLS IS SUED IN THE NAME OF M/S VARUN INDUSTRIES LTD ON PROTECTIVE BASIS. THE A O HAS MADE ADDITIONS TOWARDS SALE BILLS ISSUED IN THE NAME OF M/S VARUN INDUSTRIES LTD ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE TO PROTECT THE I NTEREST OF THE REVENUE. ASSESSEE CLAIMS THAT ONCE SUBSTANTIAL ADDITION HAS BEEN MADE IN THE HANDS OF M/S VARUN INDUSTRIES LTD, PROTECTIVE ADDITION MADE IN THE HANDS OF THE ASSESSEE CANNOT SURVIVE IN THE EYES OF LAW. WE DO NOT FIND ANY MERITS IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT THOUG H SUBSTANTIAL ADDITION HAS BEEN MADE IN THE HANDS OF M/S VARUN INDUSTRIES LTD, THE OUTCOME OF ADDITION MADE BY THE REVENUE AUTHORITIES WILL ONLY BE CLEAR ONCE IT HAS BEEN DECIDED IN APPELLATE FORUMS. THE ASSESSEE HAS NOT BEEN ABLE T O FURNISH ANY EVIDENCES 39 DILIP SHAH / ATUL SANGHVI WITH REGARD TO ADDITIONS MADE IN THE HANDS OF M/S V ARUN INDUSTRIES LTD EXCEPT FURNISHING AN ASSESSMENT ORDER COPY. THE FACT WITH REGARD TO NATURE OF DISPUTE AND THE STAGES OF OUTCOME IN APPELLATE FORUMS IS NO T ASCERTAINABLE AT PRESENT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THOUG H THE ACT, DOES NOT PROVIDE FOR PROTECTIVE ASSESSMENTS, IN THE INTEREST OF REVENUE, THE AO CAN MAKE PROTECTIVE ADDITIONS TO PROTECT THE INTEREST O F THE REVENUE. THEREFORE, WE ARE OF THE VIEW THAT THE AO WAS RIGHT IN MAKING PROTECTIVE ADDITIONS TOWARDS SALE BILLS ISSUED IN THE NAME OF M/S VARUN INDUSTRIES LTD. NEVERTHELESS, THE ASSESSEE SHALL BE ENTITLED TO REL IEF AS AND WHEN THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF M/S VARUN INDUSTRIES LTD IS CONFIRMED ONCE ALL ROUNDS OF LITIGATION ENDS. THE CIT(A) AFTER CONSIDERING THE RELEVANT FACTS HAS RIGHTLY UPHELD ADDITIONS MADE BY THE AO. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE CIT(A); HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE CIT(A) AND REJECT GROUND RAISED BY THE ASSESSEE. 27. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATION I S ADDITION MADE ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT OF THE PERS ONS OTHER THAN THE ASSESSEE WHICH WERE FOUND FROM THE POSSESSION OF THE ASSESSE E DURING THE COURSE OF SEARCH ALONG WITH SIGNED BLANK CHEQUES, SALE BILLS, PAN CARDS, ETC. WHICH WERE REMAINED UNEXPLAINED BY THE ASSESSEE. THE AO MADE ADDITIONS TOWARDS CREDITS FOUND IN THE BANK ACCOUNT FOR RS.1388,09,01 ,411 ON THE GROUND THAT 40 DILIP SHAH / ATUL SANGHVI THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCES OF C REDITS FOUND IN THE BANK ACCOUNT WITH NECESSARY EVIDENCE. 28. THE FACTS WHICH LEAD TO THE IMPUGNED ADDITION ARE T HAT THE ASSESSEE ALONG WITH SHRI ATUL SANGHVI ARE FOUND IN POSSESSION OF V ARIOUS DOCUMENTS LIKE BLANK CHEQUES, SALE BILLS, PAN CARDS, RATION CARDS, ETC. DURING THE COURSE OF SEARCH, THESE DOCUMENTS WERE FOUND AND SEIZED. WHEN THESE DOCUMENTS WERE CONFRONTED TO THE ASSESSEE, THE ASSESSEE CLAIMED TH AT THE DOCUMENTS BELONG TO THE FIRMS / COMPANIES, WHO MANUFACTURE GOODS AND TRADED THROUGH HIM. THE ASSESSEE FURTHER CONTENDED THAT THE PROSPECTIVE SELLERS OF THE GOODS HAVE KEPT THOSE DOCUMENTS WITH THE ASSESSEE TO FACILITAT E EASY MOVEMENT OF SALES OF THEIR GOODS WHICH CANNOT BE CONSIDERED AS FABRIC ATED DOCUMENTS TO OPERATE DUMMY / FICTITIOUS CONCERNS AND OPEN BANK ACCOUNTS IN VARIOUS FIRMS / COMPANIES NAME. THE AO MADE ADDITION ON THE GROUN D THAT THE ASSESSEE HAS NOT DISCHARGED HIS ONUS OF PROVING THE IDENTITY AND GENUINENESS AND CREDITWORTHINESS OF ANY OF THESE TRANSACTIONS PERTA INING TO RS.1388.09 CRORES. THE ASSESSEE CLAIMS THAT THE CREDITS FOUND IN THE B ANK ACCOUNTS OF VARIOUS PERSONS ARE IN FACT NOT BELONGING TO HIM AS SOME OF THE PARTIES HAVE APPEARED BEFORE THE AO AND ACCEPTED THAT THE BANK ACCOUNTS A RE OPERATED BY THEMSELVES AND CONSIDERED IN THEIR INCOME-TAX RETUR NS FILED FOR THE RESPECTIVE ASSESSMENT YEARS. THE ASSESSEE FURTHER CONTENDED T HAT THE AO HAS ACCEPTED 41 DILIP SHAH / ATUL SANGHVI THE FACT IN THE ORIGINAL ASSESSMENT ORDER PASSED U/ S 143(3) R.W.S. 153A DATED 28-12-2011 WHEREIN HE HAS CATEGORICALLY ACCEPTED TH AT CERTAIN PARTIES HAVE APPEARED BEFORE HIM AND FILED CONFIRMATION WITH REG ARD TO THE BANK ACCOUNT FOUND IN THE POSSESSION OF THE ASSESSEE. 29. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS NOT BEEN ABLE TO DISCHARGE ON US BY FILING NECESSARY EVIDENCE TO PROVE THE CREDITS FOUND IN THE BANK ACC OUNT. IT IS INCUMBENT UPON THE ASSESSEE TO EXPLAIN EACH AND EVERY CREDIT FOUND IN THE BANK ACCOUNTS AND SOURCES OF SUCH CREDITS. IN THIS CASE, THE ASSESSE E HAS FAILED TO FURNISH ANY EVIDENCES TO IDENTIFY CREDITS, GENUINENESS OF SUCH CREDITS AND CREDITWORTHINESS OF ANY OF THE CREDITS FOUND IN THE BANK ACCOUNT. T HEREFORE, WE ARE OF THE VIEW THAT THE AO WAS RIGHT IN TREATING THE SUMS FOUND CR EDITED IN THE BANK ACCOUNTS AS UNEXPLAINED CREDITS IN THE HANDS OF THE ASSESSEE . AS REGARDS THE CLAIM OF THE ASSESSEE THAT SOME OF THE PARTIES HAVE APPEARED BEFORE THE AO AND FILED THEIR INCOME-TAX RETURNS EXPLAINING BANK ACCOUNTS F OUND IN THE POSSESSION OF THE ASSESSEE AND HENCE THOSE BANK ACCOUNTS, SHOULD BE EXCLUDED. WE DO NOT FIND ANY MERITS IN THE ARGUMENT OF THE ASSESSEE FOR THE REASON THAT THE EVIDENCES GATHERED DURING THE COURSE OF SEARCH AND FURTHER ENQUIRIES CONDUCTED IN THE COURSE OF POST SEARCH INVESTIGATI ON CLEARLY ESTABLISHES THE FACT THAT THE ASSESSEE HAS OPERATED MORE THAN 100 B ANK ACCOUNTS IN DIFFERENT 42 DILIP SHAH / ATUL SANGHVI BANKS. ALL EVIDENCES GATHERED DURING THE COURSE OF SEARCH CLEARLY INDICATES FABRICATION OF VARIOUS DOCUMENTS LIKE PAN CARD, RAT ION CARD, ETC. AND PHOTOGRAPHS OF CERTAIN INDIVIDUALS TO OPEN BANK ACC OUNTS IN DIFFERENT BANKS WITH THE HELP OF ONE, SHRI PRADIP M JABALIA, WHO HA D CATEGORICALLY ADMITTED IN HIS STATEMENT RECORDED ON 08-03-2007 THT CORRESPOND ENCE WITH REGARD TO BANK ACCOUNTS ARE MADE BY SHRI DILIP SHAH AND SHRI ATUL SANGHVI. SHRI JABALIA, IN REPLY TO QUESTION NO.2 CLEARLY MENTIONED THAT HE DI D NOT KNOW ANY OF THE PARTIES AND IT IS ONLY SHRI DILIP SHAH AND SHRI ATU L SANGHVI, WHO WERE COLLECTING THE CORRESPONDENCE FROM HIS OFFICE. SIMILAR STATEM ENTS WERE ALSO RECORDED FROM SHRI VINOD KUMAR SHAH AND SHRI N.V. NEELAKANTA N ON 26-02-2007 AD 21- 03-2007 WHEREIN IT WAS CONFIRMED THAT VARIOUS ACCO UNTS WERE OPERATED / AVAILED BY THE ASSESSEE. ALL THESE FACTS LEAD TO A N UNDISPUTED FACT THAT THE ASSESSEE IS INDULGING IN PROVIDING BOGUS BILLS AND MORE SO, OPERATED ALL BANK ACCOUNTS. THEREFORE, IT IS ON THE ASSESSEE TO EXPL AIN THE CREDITS FOUND IN THOSE BANK ACCOUNTS. FURTHER, THE ASSESSEE HAS FILED DET AILS OF CONFIRMATION FILED BY SOME PARTIES ALONG WITH THEIR I.T. RETURNS FILED FO R THE RESPECTIVE ASSESSMENT YEARS. ON PERUSAL OF THE DETAILS, WE FIND THAT CER TAIN PARTIES HAVE FILED THEIR INCOME-TAX RETURNS AFTER THE DATE OF SEARCH AND THE INCOME DECLARED IN SAID RETURNS IS MEAGER. THEREFORE, WE ARE OF THE VIEW T HAT BY FILING SOME I.T. RETURNS OF CERTAIN PARTIES, THE ASSESSEE CANNOT PRO VE THE GENUINENESS OF 43 DILIP SHAH / ATUL SANGHVI CREDITS FOUND IN THE BANK ACCOUNTS. THEREFORE, WE ARE OF THE VIEW THAT THE AO WAS RIGHT IN TREATING CREDITS FOUND IN THE BANK ACC OUNTS AS UNEXPLAINED INCOME OF THE ASSESSEE. 30. THE CIT(A) AFTER CONSIDERING RELEVANT FACTS AND ALS O RELYING UPON A PLETHORA OF JUDGEMENTS INCLUDING THE DECISION OF AP EX COURT IN THE CASE OF CIT VS DURGAPRASAD MORE 82 ITR 540 (SC) AND SUMATI DAYA L VS CIT 214 ITR 801 (SC) WHEREIN IT WAS HELD THAT APPARENT MUST BE CONSIDERE D REAL UNLESS IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT REAL AND THAT TAXING AUTHORITIES ARE ENTITLED TO LOOK INTO SURROUNDING C IRCUMSTANCES TO FIND OUT THE REALITY AND THE MATTER HAS TO BE CONSIDERED BY APPL YING THE TEST OF HUMAN PROBABILITIES. THE HONBLE COURT ALSO HELD THAT IT IS NO DOUBT TRUE THAT IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS I NCOME, THE BURDEN LIES ON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PR OVISION AND IF A RECEIPT IS IN THE NATURE OF INCOME, THE BURDEN TO PROVE THAT IT I S NOT TAXABLE BECAUSE IT FALLS WITHIN THE EXEMPTION PROVIDED BY THE ACT LIES ON TH E ASSESSEE. FURTHER, THE PROVISIONS OF SECTION 68 OF THE ACT, IS CLEAR INASM UCH THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSES SEE FOR ANY PREVIOUS YEAR, THE SAME MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASS ESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE AO, IS NOT SATISFACTORY. THE ASSESSEE 44 DILIP SHAH / ATUL SANGHVI COULD NOT PROVE CREDITS FOUND IN THE BANK ACCOUNTS. THEREFORE, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY UPHELD THE ADDITIO NS MADE BY THE AO TOWARDS TOTAL CREDITS FOUND IN THE BANK ACCOUNT AMOUNTING T O RS.1388.09 CRORES AS UNEXPLAINED CREDITS IN THE HANDS OF THE ASSESSEE. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE CIT(A). HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE CIT(A) AND REJECT THE GROUND RAISED BY THE ASSESSEE . 31. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATION I S ADDITION TOWARDS CASH DEPOSITS TO THE BANK ACCOUNTS. THE AO MADE AD DITIONS TOWARDS TOTAL CASH DEPOSITS IN THE BANK ACCOUNT AMOUNTING TO RS.7,01,6 50 BEING 50% SHARE OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT F ILED ANY EVIDENCES TO PROVE THE IDENTITY, GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS OF THE CREDITORS. THE AO HAS TAKEN TOTAL CASH DEPOSITS FOR THE YEAR A ND DIVIDED INTO 50% IN THE HANDS OF THE ASSESSEE AND 50% IN THE HANDS OF SHRI ATUL SANGHVI AND MADE ADDITIONS U/S 68 OF THE ACT. THE ASSESSEE CLAIMS T HAT HE HAS SOURCE OF INCOME TO EXPLAIN CREDITS FOUND IN THE BANK ACCOUNTS. THE REFORE, THE AO WAS NOT CORRECT IN MAKING ADDITIONS TOWARDS CASH DEPOSIT U/ S 68 OF THE ACT. 32. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATERIAL ON RECORD, WE FIND FORCE IN THE ARGUMENT OF THE ASSESSEE FOR THE REASO N THAT, THE AO HAS MADE SUBSTANTIAL ADDITIONS TOWARDS COMMISSION INCOME ON TOTAL SALES MADE AND THE 45 DILIP SHAH / ATUL SANGHVI SOURCE OF INCOME IN THE FORM OF COMMISSION IS AVAIL ABLE TO EXPLAIN CASH DEPOSITS TO THE BANK ACCOUNT. THE AO MADE ADDITION S TOWARDS COMMISSION ON ONE HAND AND ADDITION TOWARDS CASH DEPOSIT ON THE O THER HAND WITHOUT TELESCOPING THE SOURCE AVAILABLE IN THE FORM OF EST IMATION OF INCOME TOWARDS COMMISSION. THEREFORE, WE ARE OF THE VIEW THAT THE RE IS A MERIT IN THE CLAIM OF THE ASSESSEE THAT TELESCOPING HAS TO BE ALLOWED TOW ARDS CASH DEPOSITS TO THE INCOME ESTIMATED FOR THE RELEVANT ASSESSMENT YEARS. HENCE, WE ARE OF THE VIEW THAT THE ISSUE NEEDS TO BE EXAMINED BY THE AO IN THE LIGHT OF THE EXPLANATION OF THE ASSESSEE AND HENCE, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR THE LIMITED PURPOSE OF EXAMINING WHETHER THE INCOME ESTIMATED FOR THE YEAR IS IN EXCESS OF CASH DEPOSITS FOUND IN THE BAN K ACCOUNTS. IF THE INCOME IS MORE THAN THE CASH DEPOSIT, THEN THE AO IS DIRECTED TO TELESCOPE THE SOURCES AVAILABLE IN THE FORM OF INCOME TO THE CASH DEPOSIT S AND ALLOW RELIEF ACCORDINGLY TOWARDS ADDITION TO CASH DEPOSITS. 33. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATION F OR THE ASSESSMENT YEAR 2007-08 IS ADDITIONS TOWARDS CASH FOUND AT THE TIME OF SEARCH. DURING THE COURSE OF SEARCH CASH TO THE EXTENT OF RS.47,30,000 HAS BEEN FOUND AND SEIZED. THE AO MADE ADDITIONS TOWARDS CASH FOUND AT THE TIM E OF SEARCH ON THE GROUND THAT THE ASSESSEE HAS AGREED FOR ADDITION AN D ALSO FAILED TO EXPLAIN SOURCE OF CASH FOUND AT THE TIME OF SEARCH. THE AS SESSEE CLAIMS THAT THE AO 46 DILIP SHAH / ATUL SANGHVI HAS MADE ADDITION TOWARDS INCOME ON ESTIMATION BASI S AND ALSO MADE ADDITION TOWARDS CASH FOUND WITHOUT ALLOWING TELESCOPING THE SOURCES AVAILABLE IN THE FORM OF INCOME. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT IF THE SOURCE AVAILABLE IN THE FORM OF INCOME, THE AO IS BOUND TO TELESCOPE THE SOURCES WITH CASH FOUND AT THE TIME OF SEARCH. THEREFORE, WE ARE OF THE VIEW THAT THE ISSUE NEEDS TO BE EXAMINED BY THE AO IN THE LIGHT OF THE CLAIM OF THE ASSESSEE AND HENCE, WE SET ASIDE THE ISSUE FOR THE LIMITED PURPOSE OF VERIFICATION OF SOURCES AVAILABLE IN THE FORM OF ES TIMATION OF INCOME WITH CASH FOUND AT THE TIME OF SEARCH. IF THE SOURCE IS IN E XCESS OF CASH FOUND DURING THE COURSE OF SEARCH AND IF IT IS NOT FLOATED TO ANY OT HER ASSETS OR NOT EXPENDED ELSEWHERE, THEN THE AO IS DIRECTED TO ALLOW TELESCO PING TOWARDS INCOME TO THE CASH FOUND AT THE TIME OF SEARCH AND ALLOW RELIEF A CCORDINGLY. 34. THE FACTS AND CIRCUMSTANCES NARRATED ABOVE ARE IDEN TICAL TO ALL OTHER APPEALS UNDER CONSIDERATION, THEREFORE, THE DECISIO N ARRIVED AT ABOVE APPLIES MUTATIS MUTANDIS TO ALL OTHER APPEALS IN THIS CONSO LIDATED ORDER. 35. ITA NOS 5713 TO 5719/MUM/2012 AYS 2001-02 TO 2007-08 THE FACTS AND CIRCUMSTANCES NARRATED ABOVE ARE IDEN TICAL TO ALL OTHER APPEALS UNDER CONSIDERATION, THEREFORE, THE DECISIO N ARRIVED AT ABOVE APPLIES MUTATIS MUTANDIS TO ALL OTHER APPEALS IN THIS CONSO LIDATED ORDER. 47 DILIP SHAH / ATUL SANGHVI 36. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSE E ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH SEPTEMBER , 2017. SD/- SD/- (D.T. GARASIA) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 25 TH SEPTEMBER, 2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI