Ram Prakash Bhatia, New Delhi V. ACIT Central Circle -05, Delhi

ITA 651/DEL/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 4406 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: F
• Next Hearing Date: 01-01-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 09-03-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI Before Shri Challa Nagendra Prasad, Judicial Member & Dr. B. R. R. Kumar, Accountant Member ITA No. 651/Del/2023 : Asstt. Year: 2012-13 Ram Prakash Bhatia, WZ-77, Srinagar, Shakur Basti, New Delhi 110034 Vs The ACIT, Central Circle-05, New Delhi 110005 (ASSESSEE) (RESPONDENT) PAN No. AERPB 1045 D Assessee by : Sh. Amol Sinha, Adv. Revenue by : Sh. P.N Barnwal, CIT-DR Date of Hearing: 02.01.2024 Date of Pronouncement: 04.01.2024 ORDER Per Dr. B. R. R. Kumar:- The present appeal has been filed by the assessee against the order of ld.CIT(A)-24 dated 11.01.2023 for the A.Y. 2012- 13. 2. The assessee has raised the following grounds of appeal are as under:- 1. Th e Ld . CI T ( A) ha s err ed in u ph old in g t h e a dd it i on of Rs.32 ,40, 621/ - m a de b y th e Ld. A s s essi ng O f fi c er on ac c oun t of bei ng c omm i s si on i nc om e earned b y t h e a s s ess ee at th e rat e o f R s . 150 p er Rs . 1 ,00 ,0 0 0/- , on c red it s ot h er t han ca sh c red i ts . 2. T h e Ld . C IT ( A ) ; h as erred in u ph ol d in g t h e a ddi ti on of R s . 1,60, 10 ,097 /- m ad e by t h e Ld. A ss essin g Of fi c er, b ein g c as h cred it a s as s ess ee c oul d n ot exp la i n s ou rc e o f c a sh d ep osit . 3. Th e Ld . CI T ( A ) h a s erred in u p h old in g t h e add it i on of Rs . 2,20, 82 ,091 /- m ad e by t h e Ld . A ss essin g Of fi c er, b ein g u n exp la in ed ca sh c red i t in th e b ank ac cou n t of M/ s Ch aud h a ry an d C o. ITA No. 651/Del/2023 Ram Prakash Bhatia 2 4. Th e Ld . CIT (A ) h a s erred i n up h ol d in g t h e a ddi ti on of Rs.7 ,68,3 21/ - m ad e by th e Ld . A s sess in g Of fi c er on a c c ou nt of b ei ng c om m is si on i n com e ea rn ed b y th e a s s ess ee f rom t ran sa ct i on s on ac c oun t of M/ s Ch au dh a ry an d C o. 5. Th e Ld . CI T ( A) h a s er red in n ot c on sid erin g th a t t h e Ld . As s es si n g O ffi cer h as n ot gi v en th e b enefi t of c ont ra ent rie s to th e ext en t of 6 ,95 ,1 2, 0 00/- . 6. Th e ord er of t h e CI T ( A) is c on f irm in g t h e ord er of t h e Ld . As s es si n g Off ic er i s bad in l a w and con t ra ry to t h e fa ct s on recor d. 3. A survey u/s 133(A) was carried out on Sh. Ram Prakash Bhatia on 08.08.2014. During the course of survey his statement was recorded u/s 131(lA) of Income Tax Act wherein he mentioned that he had been carried out the work of billing and was earning commission income. He stated that he has been doing the work of providing accommodation entries and bogus bills. As per his statement, the assessee categorically admitted that the concerns mentioned by him, registered at premises C-48/3A, 2d floor, Lawrence Road Industrial Area were either his proprietorship concerns or in the proprietorship of his family members but the work is being managed/operated by the assessee only. He further stated that he used to provide bills to various persons against the goods supplied by some other traders. As per the Assessing Officer, the allegations that Sh. Ram Prakash Bhatia is an entry provider have been clearly established by his statement. For the purpose of providing entries he was managing a number of concerns through his family members. ITA No. 651/Del/2023 Ram Prakash Bhatia 3 4. The Assessing Officer noticed that the details of the assessee's undisclosed bank account is as under: Name of entity Account No. Total entries Cash deposited Punjab Foods 1539002100052152 in PNB 582902757 2088112 Prakash Food 1539002100050233n in PNB 813116375 9472985 Jai Bharat Food 066010200045650 in Axis Bank 528477672 4354000 Shiva Stores 43101000012050 in Axis Bank 251927682 95000 Total 2176424486 16010097 5. The assessee did not submit the details regarding source of cash credit nor submitted any satisfactory explanation regarding the cash credit of Rs. 1,60,10,097/-. The Assessing Officer has noted that there is a total cash deposit of Rs. 1,60,10,097/- in all the four accounts for which the assessee could not explain the source and hence it remained unexplained. Since the assessee could not substantiate the source of cash deposit of Rs. 1,60,10,097/- the same was added to the income of the assessee being unexplained cash credit u/s 68 of Income Tax Act. 6. The ld. CIT(A) held that during the course of assessment proceedings, the assessee did not provide any proceedings. The assessee argued that the assessee has only earned commission income on the entries provided by him whether in cash or by in any other mode. Further, the assessee argued that he has ITA No. 651/Del/2023 Ram Prakash Bhatia 4 withdrawn around Rs. 6 Crores in cash from one account and hence the amount of cash credit should not be treated as unaccounted money being part of business of accommodation entry. 7. The ld. CIT(A) held as under: As p er t h e record s, th ere a re ca sh d ep osit s in t h e u nd is cl o sed ban k ac c oun t s of th e a ss ess ee. Th es e th ree ac c oun t s ca m e t o t h e kn owl edg e o f As s es si n g Offi c er f rom i n f o rm a t i on f rom In v est ig ati on Wi n g and th e f ou rt h in th e su b seq u en t s u bm i ss i on s m a d e b y t h e a s s essee. Th e a s s ess ee cou l d n ot off er an y s ati sfact ory exp l an a ti on rega rd in g t h e sou rc e of t hi s m on ey dep osi t ed i n b ank . E v en th e expl an a ti on of f ered d u rin g th e c ou rs e of app ell at e p roc edi ng s i s n ei th er su f fi ci en t n or sat is fa ct ory. Th e a s ses s ee d i d n ot su bm it an y d o cu m ent a ry ev id en ce exp la i n in g t h e lin ka g es of a m oun t s wit hd rawn f rom on e b ank a ccou n t an d su b s equ en t d ep osit s in ot h er b ank ac c oun t/ s . T h ere is a ppa ren t ly n o j u st i fi cat i on f or wi th d rawi ng fr om on e ac c oun t an d dep os it ion i n ot h er ban k a ccou nt s . It i s al s o n ot kn own a s t o wh et h er t h e sa m e ca sh wh i ch w as wit h drawn fr om on e b an k a c c ou nt ha s been d ep osi t ed i n ot her b a n k a cc oun t /s or wa s h an d ed ov er t o s om e oth er pa rty a s p a rt of h is ac c om m odat i on en t ry bu s in es s. Th e a s sess ee c oul d n ot pr ovid e th e n a m es an d a dd ress es of th e en ti ti es w ho se ca sh wa s app a ren t l y d ep osit ed i n th e ban k a c c ou nt s . I f t h is ca sh d ep osi t ed p ert ai n s to an y ot h er c on c ern ot h er th an t h e a s s ess ee th en t hei r n am es an d add ress es sh ou ld h av e b een mad e av ai lab l e t o t h e A s ses sin g Offi c er or sub s eq u en t ly d u rin g th e ap p el lat e p roc eedin g s. Th e a s s ess ee a t an y stag e c oul d n ot p rovid e t h e sou rc e of th es e ca sh d ep osi t s in hi s b an k a cc oun ts . Si n ce th e v ery s our ce of su ch c a sh w h ic h wa s d eposi t ed in t h e ban k ac c oun t s i s n o t kn ow n , it w ou ld b e app rop ria t e t o p resu m e th at it i s as s ess ee's o wn m on ey d ep osit ed b y h i m o r t h r oug h h i s s ou r ces i n hi s b an k ac c oun t s. In m y c on sid ered opi n i on t h e A ss essin g Offi c er d id n ot c om mi t an y error in c on sid eri n g t h e c ash d ep osi t ed i n th e b an k a c c oun t a mo un ti n g ITA No. 651/Del/2023 Ram Prakash Bhatia 5 to Rs. 1, 60 ,10,0 97/ - a s u n exp l ai n ed c a sh c redi t u/ s 6 8 of In c om e Ta x A ct an d th eref ore th ere i s n o n eed t o i nt erf ere wi th t h e ord er of t h e A s s ess in g Offi c er. A c c ordi ng l y , th e ac t i on of th e As s ess in g Offi c er c ons id erin g th e ca sh d ep osit ed i n th e b an k a cc ou n t am ou nt in g t o R s . 1,6 0, 10 ,097 / - a s u nexp l ai n ed ca sh c red i t u /s 6 8 of In c ome Ta x A ct an d ad d in g t h e sa m e t o th e t ot al in co m e of th e a s ses s ee i s u p h el d . 8. Aggrieved, the assessee filed appeal before the ITAT. 9. We find that the similar issue has been adjudicated by this Tribunal in the assessee’s own case for the earlier and subsequent assessment years in ITA Nos. 185 to 189/Del/2020 wherein the Tribunal having treated the assessee as a Entry Operator determined commission @0.15%, hence keeping in view the said order, we direct the AO charge commission @0.15% on the amount of Rs. 160,10,097/-. 10. The appeal of the assessee on this ground is partly allowed. 11. During the course of assessment proceedings, the assessee had admitted that the following bank account No. 9352320000547 of M/s Chaudhary & Co. registered in the name of his wife Smt. Saroj Bhatia was also operated by him for providing accommodation entries: Account Number Cash deposit (Rs.) Total Total Debit 09352320000547 with HDFC Bank 22082091 534295846 534271324 ITA No. 651/Del/2023 Ram Prakash Bhatia 6 12. An amount of Rs. 2,20,82,091/- was deposited in cash in the above bank account of M/s. Chaudhary & Co. The same was treated as unexplained cash credit and addition of the same was made in the hands of the assessee on substantive basis and in the name of his wife Smt. Saroj Bhatia on protective basis. The ld. CIT(A) held that, there is apparently no justification for withdrawing from one account and deposition in other bank account. The ld. CIT(A) held that, it is also not known as to whether the same cash which was withdrawn from one bank account has been deposited in other bank account or was handed over to some other party as part of accommodation entry business. 13. In the statement recorded u/s 131(lA) of Income Tax Act during the survey on 08.08.2014 the assessee had specifically mentioned that M/s Chaudhary & Co. is a concern of his wife but all these firms are being operated by the assessee only. Since the assessee has specifically admitted during the survey that the particular proprietorship firm is being operated by him only the credit of the cash deposited in M/s Chaudhary & Co.'s bank account should belong to the assessee. Therefore, it would be appropriate to consider that the cash deposited in this particular bank account of M/s. Chaudhary & Co. actually pertains to the assessee and utilized for giving entries to various people. Since the assessee has been already treated as an Entry Operator, we direct the AO charge commission @0.15% on the amount of Rs. 2,20,82,091/-. ITA No. 651/Del/2023 Ram Prakash Bhatia 7 14. The appeal of the assessee on this ground is partly allowed. 15. The assessee is in the business of providing accommodation entries. The Assessing Officer calculated the total commission on the credit entries for these four accounts other than the cash credits and the commission is computed at Rs. 32,40,621/-. The Assessing Officer has added this amount of commission of Rs. 32,40,621/- to the income of the assessee. The ld. CIT(A) held that, the Assessing Officer did not commit any error in computing the commission income on credit entries in the bank and adding a commission income of Rs. 32,40,621/- and therefore there is no need to interfere with the order of the Assessing Officer. Owing through the orders of the earlier years and facts of this case we hold that the ld. CIT(A) has rightly confirmed the addition. 16. The appeal of the assessee on this ground is dismissed. 17. The assessee is in the business of providing accommodation entries. The Assessing Officer calculated the total commission on the credit entries for the account in the name of M/s. Chaudhary & Co. other than the cash credits and the commission is computed at Rs. 7,68,321/. The Assessing Officer has added this amount of commission of Rs. 7,68,321/- to the income of the assessee. We hold that the Assessing Officer did not commit any error in computing the commission income on credit entries in the bank and adding a commission ITA No. 651/Del/2023 Ram Prakash Bhatia 8 income of Rs. 7,68,321/- . The order of the ld. CIT(A) is affirmed. 18. Ground no. 5: Not pressed. 19. In the result, the appeal of the assessee is partly allowed. Order Pronounced in the Open Court on 04/01/2024. Sd/- Sd/- (C.N Prasad) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 04/01/2024 *NV, Sr. PS* Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, DELHI