Surendra Kumar Jain, Delhi V. ACIT, New Delhi

ITA 6998/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7089 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 08-01-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 26-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Keywords: Unexplained cash credit; Principle of natural justice; Accommodation entries; Onus to prove
• Section: 143(3); 153A; 68; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E : NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI SUDHANSHU SRIVASTAVA, JM ITA NOS.6991 TO 6997/DEL/2014 ASSESSMENT YEARS : 2005-06 TO 2011-12 VIRENDRA JAIN, C/O KAPIL GOEL, ADVOCATE, F-26/124, SECTOR-7, ROHINI, DELHI. PAN: AAGPJ3319P VS. ACIT, CENTRAL CIRCLE-23, NEW DELHI. ITA NOS.6998 TO 7004/DEL/2014 ASSESSMENT YEARS : 2005-06 TO 2011-12 SURENDRA KUMAR JAIN, C/O KAPIL GOEL, ADVOCATE, F-26/124, SECTOR-7, ROHINI, DELHI. PAN: AAHPJ8940K VS. ACIT, CENTRAL CIRCLE-23, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAPIL GOEL, ADVOCATE DEPARTMENT BY : MS NIRUPAMA KOTRU, CIT, DR DATE OF HEARING : 08.01.2016 DATE OF PRONOUNCEMENT : 03.02.2016 ITA NO.6991 TO 7004/DEL/2014 2 ORDER PER J. SUDHAKAR REDDY, AM: ALL THESE APPEALS FILED BY THE ASSESSEES ARE DIREC TED AGAINST THE COMMON ORDER PASSED BY THE CIT(A)-XXXIII, NEW DELHI , DATED 14.8.2014 FOR THE ASSESSMENT YEARS 2005-06 TO 2011- 12. 2. THE FACTS OF THE CASE ARE BROUGHT OUT AT PARA 3. 1 OF THE LD.CIT(A)S ORDER. FOR THE SAKE OF BREVITY, WE DO NOT EXTRACT T HE SAME. SUFFICE TO SAY THAT SHRI SURENDRA KUMAR JAIN AND SHRI VIRENDRA JAI N WERE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES. A SEARCH AND SEIZ URE ACTION WAS CARRIED OUT AT THE RESIDENCE-CUM-OFFICE OF SHRI SUR ENDERA KUMAR JAIN AND SHRI VIRENDRA JAIN AND THEIR GROUP CONCERNS ON 20.11.2010. DURING THE COURSE OF SEARCH, A NUMBER OF DOCUMENTS, LOOSE SHEETS, NOTE BOOKS, REGISTERS AND DIARY BELONGING TO THESE PERSONS AND THEIR GROUP CONCERNS WERE SEIZED. 3. NOTICES U/S 153A OF THE IT ACT, 1961 WAS ISSUED. THE ASSESSEES FILED A LETTER STATING THAT THE RETURN FILED U/S 13 9 MAY BE TREATED AS THE RETURN FILED U/S 153A OF THE INCOME-TAX ACT. THE A O FRAMED ITA NO.6991 TO 7004/DEL/2014 3 ASSESSMENTS ON 28.3.2013 U/S 143(3) READ WITH SECTI ON 153A OF THE ACT. HE BRIEFLY DISCUSSED THE MODUS OPERANDI OF JAIN BROTHERS. THE MODUS OPERANDI AS BROUGHT OUT BY THE LD.CIT(A) AT PAGE 4, LAST PARA IS EXTRACTED FOR READY REFERENCE:- THEY RECEIVE CASH FROM BENEFICIARY COMPANIES WHO H AS UNACCOUNTED CASH. THEY INTRODUCE THESE CASH IN THE BANK ACCOUNTS OF VARIOUS FIRMS/COMPANIES AND ROTATES THESE AMOUNT THROUGH BANK ACCOUNTS OF VARIOUS COMPANIES/CONCERN SO THAT THE I DENTITY OF SUCH CASH RECEIVED FROM PARTICULAR BENEFICIARY IS LOST A ND FINALLY THE BENEFICIARY COMPANY GETS THESE AMOUNT BY CHEQUES IN FORM OF SHARE CAPITAL/SHARE APPLICATION, SHARE PREMIUM, BOGUS CAP ITAL GAIN OR FOR INFLATION OF EXPENSES. FOR THIS OPERATION JAIN BRO THERS HAS CREATED HUNDREDS OF PAPER ENTRIES AND OPERATES NUMEROUS BAN K ACCOUNTS FOR THIS PURPOSES. 4. AFTER EXAMINING THE EVIDENCES AND THE STATEMENTS , THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSEES. FOR A SSESSMENT YEAR 2005-06 SUCH TOTAL INCOME HAS BEEN DETERMINED AS FO LLOWS WHICH IS EXTRACTED FOR READY REFERENCE:- SHRI VIRENDRA JAIN OWNED UP THE DOCUMENTS, THE AM OUNT OF COMMISSION OF RS.12375395/- RECEIVED AT THE RATE OF 1.8% ASSESSED IN THE HANDS OF ASSESSEE ON SUBSTANTIVE BASIS AND T HE AMOUNT OF RS.68,75,21,969/- BEING THE TOTAL AMOUNT CREDITED B UT NOT EXPLAINED ON PROTECTIVE BASIS. ITA NO.6991 TO 7004/DEL/2014 4 5. SIMILARLY, FOR ALL THE ASSESSMENT YEARS, THE AO MADE ADDITION OF COMMISSION ON SUBSTANTIVE BASIS AND CASH CREDITS ON PROTECTIVE BASIS. THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE LD. CIT(A) IN THE IMPUGNED COMMON ORDER CONVERTED THE PROTECTIVE ASSE SSMENT MADE BY THE AO U/S 68 INTO A SUBSTANTIVE ADDITION WHILE UPH OLDING THE INCOME ASSESSED ON COMMISSION. HE DISMISSED THE APPEALS O F THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS BEFORE US IN ALL THESE A PPEALS ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW LD AO ERRED IN PASSING IMPUGNED ASSESSMENT ORDER IN STRANGULATION OF PRINCIPLES OF NATURAL JUSTICE AND WITHOUT GIVING AD EQUATE OPPORTUNITY TO ASSESSEE TO PLEAD HIS CASE AND WITHOUT MAKING RE QUISITE INDEPENDENT ENQUIRY AND WITHOUT CONFRONTING BACK MATERIAL UTILI ZED AGAINST THE ASSESSEE AND IN MAKING AN ARBITRARY AND HIGH PITCHE D ASSESSMENT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, LD CIT-A ERRED IN PASSING IMPUGNED NON SPEAKING ORD ER WHERE NOT ONLY ORDER PASSED BY LD AO IS SUSTAINED IN ADHOC MA NNER BUT VARIOUS SUBMISSIONS MADE BY APPELLANT ARE SUITABLY IGNORED AND WITHOUT ANY NATURAL JUSTICE ENHANCEMENT AND MODIFICATION IS MA DE BY CONVERTING WRONGFUL PROTECTIVE ADDITIONS TO SUBSTANTIVE ADDITI ONS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, ID AO AND ID CIT-A ERRED IN PASSING IMPUGNED ORDERS IN VIOLATION OF PRINCIPLE OF AUDI ALTREM PARTEM WHICH IS WRIT LARGE ON THE FACE OF THE PROCEEDINGS AND ACCORDINGLY THE ORDERS PASSED ARE N ULLITY AND DESERVES TO BE SET ASIDE IN TOTO. ITA NO.6991 TO 7004/DEL/2014 5 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, ID AO AND ID CIT-A I) ERRED IN ASSESSING COMMISSION INCOME @ 1.8% WHICH IS NOT AS PER SIMILAR DECIDED CASES/PRECEDENT S AND II) FURTHER ERRED IN APPLYING AND INVOKING SECTION 68 OF THE AC T IN PRESENT CASE OF ASSESSEE TO ENTRIES ON WHICH COMMISSION IS ALREADY ADDED, WHERE PRESENT ASSESSEE WHO IS ALLEGED TO BE MERE ENTRY P ROVIDER CAN'T BE TREATED TO BE BENEFICIARY ALSO. 6. WE HAVE HEARD SHRI KAPIL GOEL, THE LD. COUNSEL F OR THE ASSESSEE AND MS NIRUPAMA KOTRU, THE LD. DR ON BEHALF OF THE REVENUE. THE SUM AND SUBSTANCE OF THE SUBMISSIONS OF SHRI KAPIL GOEL IS THAT THERE IS A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. FURTHE R, IT WAS SUBMITTED THAT THE ASSESSMENTS WERE NOT PROPERLY FRAMED AND THAT T HE SAME AMOUNT HAS BEEN TAXED MULTIPLE TIMES AS THERE WERE CIRCUITOUS AND CHAIN TRANSACTIONS WHICH WERE NOT ELIMINATED OR NETTED OUT. HE SUBMIT TED THAT THE AO RELIED ON AN APPRISAL REPORT AND ON SOME OTHER MATE RIAL, BUT HAS NOT CONFRONTED THE ASSESSEE WITH THE SAME. HE FURTHER ARGUES THAT SECTION 68 DOES NOT APPLY TO THESE ASSESSEES AND THAT THESE CA SES ARE COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF PRINCIPAL COMMISSIONER OF INCOME-TAX VS. VIJAYA CONDUCTORS PV T. LTD. AND OTHER CASES , ITA NO.683/2015, JUDGMENT DATED 29.9.2015 AND THE DECISION OF THE B BENCH OF THE TRIBUNAL IN THE CASE OF TARUN GOYAL IN ITA ITA NO.6991 TO 7004/DEL/2014 6 NOS.4636 & 4637/DEL/2012, VIDE ORDER DATED 18.10.20 13. HE PLEADED THAT ALL THESE APPEALS SHOULD BE RESTORED TO THE FI LE OF AO FOR FRESH ADJUDICATION AND THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY. HE FURTHER PRAYED THAT THE AO SHOULD APPLY THE PRO POSITIONS LAID DOWN BY THE TRIBUNAL IN THE CASE OF TARUN GOYAL (SUPRA) AND BY THE HONBLE DELHI HIGH COURT IN THE CASE OF VIJAYA CONDUCTORS P VT. LTD. AND OTHERS (SUPRA) AND COMPLETE THE RE-ASSESSMENT PROCEEDINGS. 7. THE LD. DR MS NIRUPAMA KOTRU, ON THE OTHER HAND, STRONGLY OPPOSED THE CONTENTIONS OF THE ASSESSEE. SHE SUBMI TTED THAT ADEQUATE OPPORTUNITY HAS BEEN GRANTED TO THE ASSESSEE. SHE SUBMITTED THAT THE AO HAS ONLY MADE AN ADDITION OF COMMISSION INCOME EARN ED BY THESE PEOPLE BY PROVIDING ACCOMMODATION ENTRIES AND HAD MADE A P ROTECTIVE ADDITION OF THE CASH CREDITS. SHE FURTHER POINTED OUT THAT THE LD.CIT(A) AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE HAD CON VERTED THE PROTECTIVE ADDITION U/S 68 AS A SUBSTANTIVE ADDITION. SHE STR ONGLY SUPPORTED THE ORDER OF THE FIRST APPELLATE AUTHORITY. ON A QUERY FROM THE BENCH AS TO WHETHER THE SAME AMOUNT HAS BEEN TAXED MORE THAN ON CE, WHEREVER ITA NO.6991 TO 7004/DEL/2014 7 THERE WERE CHAIN AND CIRCUITOUS TRANSACTIONS BETWEE N INTERMEDIARY COMPANIES, SHE SUBMITTED THAT IT WAS FOR THE ASSESS EE TO LEAD EVIDENCE AND IN THE ABSENCE OF THE SAME THESE AMOUNTS CAN BE ADDED IN THE HANDS OF THESE COMPANIES. ON THE ISSUE WHETHER THE ASSES SEE WAS PROVIDED WITH THE MATERIAL BASED ON WHICH ADDITIONS WERE MAD E BY THE AO, THE LD.CIT, DR SUBMITTED THAT THE APPRAISAL REPORT WAS A CONFIDENTIAL DOCUMENT AND IT CANNOT BE GIVEN TO THE ASSESSEE. T HOUGH NOT LEAVING HER GROUND, ULTIMATELY THE LD.CIT, DR WAS FAIR ENOUGH T O SUBMIT THAT CIRCUITOUS TRANSACTIONS BETWEEN INTERMEDIATE COMPAN IES HAVE TO BE TAXED ONLY ONCE IF THE ASSESSEE CONCLUSIVELY PURSUES THE SAME. SHE RELIED ON THE ORDER OF THE AO AS WELL AS THE LD.CIT(A) AND SU PPORTED THE SAME. 8. AFTER HEARING RIVAL SUBMISSIONS AND PERUSING THE PAPERS ON RECORD AS WELL AS THE ORDERS OF THE AUTHORITIES BELOW, WE HOLD AS FOLLOWS. IN OUR CONSIDERED VIEW, IN THE CASE ON HAND, THERE WAS VIO LATION OF PRINCIPLES OF NATURAL JUSTICE. NO PROPER OPPORTUNITY WAS GIVEN T O THE ASSESSEE. THE AO EXTENSIVELY RELIED ON A REPORT CALLED APPRAISAL REPORT. THIS FINDS MENTION ON PAGES 24, 26, 49 AND 56 OF THE ASSESSMEN T ORDER. IN CASE THE ITA NO.6991 TO 7004/DEL/2014 8 AO RELIES ON A REPORT OF ANY AUTHORITY, NATURAL JUS TICE DEMANDS THAT, A COPY OF THAT REPORT BE MADE AVAILABLE TO THE ASSESS EE, SO AS TO ENABLE HIM TO PLACE HIS CONTENTIONS ON THE SAME. IF THE REVEN UE CANNOT FURNISH THIS REPORT TO THE ASSESSEE ON THE GROUND OF CONFIDENTIA LITY, THEN, NO ADDITION WHATSOEVER CAN BE MADE IN THE HANDS OF THE ASSESSEE BASED ON THIS REPORT. A STATEMENT WAS RECORDED FROM ONE SHRI RAJE SH AGGARWAL. A COPY OF THE STATEMENT WAS ALSO NOT FURNISHED TO THE ASSESSEE, THOUGH THE AO RELIED ON THIS STATEMENT FOR MAKING CERTAIN ADDI TIONS. 9. EVIDENCE WAS GATHERED DURING THE SEARCH OF JAGAT GROUP AND THESE EVIDENCES WERE ALSO NOT CONFRONTED TO THE ASSESSEE. WE ALSO FIND THAT THE ASSESSMENT ORDER WAS FRAMED IN A HURRY, POSSIBL Y DUE TO CONSTRAINT OF TIME. THOUGH THE NOTICE U/S 153A WAS GIVEN ON 1.5. 2012, SHOW CAUSE NOTICES WERE ISSUED ONLY ON 5.2.2013, 8.2.2013 AND 14.2.2013. THE ASSESSEE GAVE A REPLY ON 8.3.2013 AND THE ASSESSMEN TS WERE FRAMED ON 28.3.2013. THOUGH THE AO HAD WRITTEN A VERY DETAIL ED ORDER, WE FIND THAT THE CONTENTION OF THE ASSESSEE THAT, MATERIAL RELIED UPON BY THE AO IN HIS ORDERS WERE NOT CONFRONTED TO THE ASSESSEE I S CORRECT. THE CONTENTS ITA NO.6991 TO 7004/DEL/2014 9 OF THE SHOW CAUSE NOTICES DOES NOT CONFORM TO THE R EASONING IN THE ASSESSMENT ORDER. SIMILARLY, THE FIRST APPELLATE A UTHORITY HAS CONVERTED THE PROTECTIVE ADDITION MADE BY THE AO INTO A SUBST ANTIVE ADDITION WITHOUT SPECIFICALLY CONFRONTING THE ASSESSEE WITH SUCH A PROPOSAL. THE COMMISSION INCOME WAS ALSO BIFURCATED ON AD HOC BASIS BY THE LD.CIT(A) WITHOUT GIVING ANY OPPORTUNITY TO THE ASS ESSEE. THOUGH THE ASSESSEE HAS PLEADED VIOLATION OF PRINCIPLES OF NAT URAL JUSTICE, THE LD.CIT(A) DID NOT ADDRESS THE OBJECTION BY PROVIDIN G ADEQUATE OPPORTUNITY BY FURNISHING THE EVIDENCES AND BY CALL ING FOR THE REMAND REPORT ON THESE ISSUES FROM THE AO. 10. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THERE IS VIOLATION OF PRINCIPLES OF NATURAL JU STICE IN THIS CASE AND, HENCE, ALL THESE APPEALS SHOULD BE SET ASIDE TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. NEEDLESS TO S AY, THE AO SHALL GIVE ADEQUATE OPPORTUNITY TO THE ASSESSEE. THE AO SHALL CONFRONT THE ASSESSEE WITH ALL THE MATERIAL/EVIDENCES/STATEMENTS , ETC. THAT HE CHOOSES TO RELY UPON WHILE MAKING THE ASSESSMENT. THE AO IS ALSO DIRECTED TO ITA NO.6991 TO 7004/DEL/2014 10 TAKE INTO CONSIDERATION THE PRINCIPLES LAID DOWN BY THE JURISDICTIONAL HIGH COURT AND THE TRIBUNAL IN VARIOUS CASES AND DI SPOSE OFF THE CASE BY APPLYING THESE PRINCIPLES SOME WHICH WE EXTRACT IN THIS ORDER FOR READY REFERENCE. THE DELHI BENCH OF ITAT IN THE CASE OF TARUN GOYAL (SUPRA) AT PARA 23 AND 24 HAS HELD AS FOLLOWS:- '23. THE AO SHALL AFTER EXAMINING THE EVIDENCE SUBM ITTED BY THE ASSESSEE, CONSIDER ALL THE CASES TOGETHER AND; A) RESTRICT THE ADDITION U/S 68 TO ONLY THE PEAK UN EXPLAINED CREDIT IN EACH CASE AFTER ELIMINATION CIRCULAR TRANSACTION. B) TO ELIMINATE TAXATION OF THE SAME AMOUNT MULTIPL E TIMES, DUE TO THE CHAIN TRANSACTIONS WHICH RESULTED DUE TO LAYERI NG INDULGED BY THE ASSESSEE. C) CONSIDERE THE MATERIAL ON RECORD AND THE PRECEDE NCE AVAILABLE ON THE ISSUE AND DETERMINE THE PERCENTAGE OF COMMISSIO N, WHICH THE ASSESSEES WOULD HAVE EARNED AND BRING THE SAME TO T AX. 24. BEFORE PARTING WE MAKE IT CLEAR THAT THE BURDEN OF PROOF LAY ON THE ASSESSEE. IT IS FOR THE ASSESSEE TO DEMONSTRATE THE CHAIN OF TRANSACTION, THE LAYERING INDULGED BY HIM, THE CALC ULATION OF PEAK UNEXPLAINED CREDIT ETC. AND TO PROVE EACH CREDIT IN THE BOOKS OF EACH ASSESSEE. IN THE RESULT ALL THESE APPEALS ARE SET A SIDE TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. ' 11. THE DELHI BENCH OF THE ITAT IN THE CASE OF M/S VIJAY CONDUCTORS INDIA PVT. LTD., ITA NO.3484/DEL/2013, ASSESSMENT Y EAR 2008-09, ORDER DATED 28.1.2015 AT PARA 17 HELD AS FOLLOWS:- ITA NO.6991 TO 7004/DEL/2014 11 17. THUS, THERE IS AN ORDER OF THE SETTLEMENT COMM ISSION AS WELL AS THE ADDITIONAL COMMISSIONER OF INCOME TAX UNDER SECTION 144A HOLDING THAT SHRI S.K. GUPTA WAS PROVIDING ACCOMMOD ATION ENTRIES, HE USED VARIOUS COMPANIES AS CONDUIT FOR PROVIDING THE ACCOMMODATION ENTRIES, CASH WAS RECEIVED THROUGH ME DIATORS FROM THE PERSONS WHO WANTED TO AVAIL THE ACCOMMODATION E NTRIES, SUCH CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE CONDU IT COMPANIES AND THEREAFTER, CHEQUE OF THE SIMILAR AMOUNT WAS BE ING ISSUED TO THE BENEFICIARIES (I.E. THE PERSON WHO WANTED TO AVAIL THE ACCOMMODATION ENTRY) WITHIN A DAY OR SO. THE ASSESS ING OFFICER HIMSELF IN THE ASSESSMENT ORDER HAS ACCEPTED THESE FACTS. CONSIDERING THE TOTALITY OF THESE FACTS AND THE LOG ICAL CONSEQUENCES OF THE ORDER OF THE SETTLEMENT COMMISSION AS WELL A S OF ADDITIONAL CIT UNDER SECTION 144A, WE HAVE NO HESITATION TO HO LD THAT THE ADDITION UNDER SECTION 68 CANNOT BE MADE IN THE CAS E OF THE CONDUIT COMPANIES. THEREFORE, WE DELETE THE ADDITION MADE U NDER SECTION 68 IN THE CASE OF ALL THE NINE COMPANIES, WHICH ARE ADMITTEDLY CONDUIT COMPANIES OF SHRI S.K. GUPTA. 12. THE HONBLE DELHI HIGH COURT IN THE CASE OF VIJ AY CONDUCTORS INDIA PVT. LTD. IN ITA NO.683/2015 VIDE JUDGMENT D ATED 29.9.2015 UPHELD THIS ORDER IN THE CASE OF M/S VIJAY CONDUCTO RS INDIA PVT. LTD. AND OTHERS IN THE FOLLOWING WORDS:- THE COMMON ISSUE IN ALL THE APPEALS ISSUES CONCERN S THE ADDITIONS MADE UNDER SECTION 68 OF THE INCOME TAX ACT ('ACT') WHICH WAS DIRECTED TO BE DELETED BY THE ITAT. THE ITAT REFERR ED TO THE ORDER DATED 28TH DECEMBER 2010 OF THE SETTLEMENT COMMISSI ON WHICH RECORDS INTER ALIA THAT MR. GUPTA WAS AN ENTRY PROV IDER AND THAT IN HIS CASE ONLY THE AMOUNT OF PREMIUM /COMMISSION REC EIVED BY HIM AFTER REDUCING EXPENSES INCURRED WOULD BE HIS ADDIT IONAL INCOME. ITA NO.6991 TO 7004/DEL/2014 12 THE ASSESSING OFFICER (AO) GAVE EFFECT TO THE ORDER OF THE SETTLEMENT COMMISSION AND DETERMINED THE INCOME OF MR. S.K. GUPTA WITHOUT MAKING ANY ADDITION FOR UNEXPLAINED C ASH CREDIT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF THE INTERMEDIARY COMPANIES, INCLUDING THE RESPONDENT ASSESSEES, THE AO SOUGHT DIRECTIONS FROM THE ADDITIONAL COMMISSIONER OF INCO ME TAX UNDER SECTION 144-A. THE ADDITIONAL CIT PASSED AN ORDER I N WHICH AFTER DISCUSSING THE FACTS HE INTER ALIA DIRECTED THAT IT WOULD BE IN THE BEST INTEREST OF THE REVENUE TO TAX THESE TRANSACTIONS I N THE HANDS OF BENEFICIARIES AND MR. S.K. GUPTA 'WITHOUT MAKING AN Y ADDITIONS ON THIS ACCOUNT IN THE HANDS OF CONDUIT ENTITIES'. THE SAID ORDERS OF THE SETTLEMENT COMMISSION OR OF THE ADDITIONAL CIT WERE BINDING ON THE AO. IT IS NOT IN DISPUTE THAT THE RESPONDENT AS SESSEES ARE THE CONDUIT ENTITIES AND NOT THE BENEFICIARIES. CONSEQU ENTLY. THE ORDER OF THE ITAT DELETING THE ADDITION UNDER SECTION 68 OF THE ACT IN THEIR HANDS DOES NOT SUFFER FROM ANY LEGAL INFIRMIT Y.' 13. THE AO IS DIRECTED TO FOLLOW THE PROPOSITIONS L AID DOWN IN THESE CASE LAWS. 14. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 03.02.201 6. SD/- SD/- [SUDHANSHU SRIVASTAV] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 03 RD FEBRUARY, 2016. ITA NO.6991 TO 7004/DEL/2014 13 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.