ACIT, Central Circle - 4(3), Kolkata , Kolkata V. Shri Girdhari Lal Goenka , Kolkata

ITSSA 84/KOL/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6601 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 03-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Document seized; Peak credit; Accommodation entries; Retraction; Documents seized
• Section: 132; 153A

Judgement Text

1 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA (सम ) ी पी. एम.जगताप,उपा एवं ी ए.टी. वक , ाियक सद ) [Before Shri P.M. Jagtap, Vice President (KZ) &Shri A. T. Varkey, JM] I.T(SS).A. No. 69/Kol/2018 Assessment Year: 2010-11 Shri Giridhari Lal Goenka (PAN: ADZPG1962B) Vs. Deputy Commissioner of Income-tax, Central Circle-4(3), Kolkata Appellant Respondent & I.T(SS).A. No. 84/Kol/2018 Assessment Year: 2010-11 Assistant Commissioner of Income-tax, Central Circle-4(3), Kolkata Vs. Shri Giridhari Lal Goenka Appellant Respondent Date of Hearing 16.11.2021 Date of Pronouncement 10.12.2021 Appeared for the Assessee Shri Miraj D. Shah, A.R Appeared for the Revenue Shri Sudipto Guha, CIT, DR ORDER Per Shri A.T.Varkey, JM These are cross-appeals preferred by the assessee and the revenue respectively against the order of the Ld. CIT(A) – 21, Kolkata, dated 28/06/2018, for the Assessment Year 2010-11. 2. Grounds of appeal raised by the assessee are as under:- “1. The learned Commissioner of Income-tax (Appeals)-21, Kolkata has erred in law as well as on facts by applying a rate of 4% on estimate basis, on the sum total of the trail balances each year, to determine undisclosed commission income, as against the 0.2% applied by the Assessing Officer. 2. The appellant crave leave to alter, amend, add or delete one or all the Grounds of Appeals mentioned above.” 3. The grounds of appeal raised by the revenue is as under:- 2 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 2 “1. That on the facts and in the circumstances of the case Ld. CIT(A) erred in deleting the addition of Rs.86,16,82,452/- being the peak in adopting 4% of loan advanced & received in the financial year. 2. That on the facts and in the circumstances of the case Ld. CIT(A) erred in estimating the income on the basis of closing balance without actually quantifying the amount of loan advance taken and loan advance given or brokered by the assessee during the financial year which were evident in the seized materials. 3. In case the Ld. Tribunal considers that peak of 86,16,82,452/- cannot be added in the year under consideration, department may be allowed to reserve the addition of respective amount as per balances of different A.Ys. 4. That on the facts and in the circumstances of the case Ld. CIT(A) erred in not giving a finding for the other A. Y.s involved, although, the amount deleted represented peak amount considered for four A.Y.s 2010-11,2013-14,2014-15 & 2015-16. 5. That the Revenue reserves its right to substantiate, modify, delete, supplement and/or alter the grounds at the time of hearing.” 4. Brief facts as noted by the Assessing Officer is that a search operation u/s 132 of the Income Tax Act, 1961 (hereinafter ‘the Act’) was completed on 17/03/2015 i.e, Assessment Year 2015-16 (in short AY 2015-16) at the residential as well as official premises of the assessee belonging to the Golden Goenka Group and according to the Assessing Officer (in short ‘AO’), business premises of the Group was also covered under the survey operation u/s 133A of the Act. According to the Assessing Officer, this Group was engaged in the business of financing, trading and investment in commodities and shares, mutual fund, real estate and beverages. 5. The Assessing Officer noted that the assessee had filed original return on 19/02/2011 u/s 139 of the Act, declaring total income of Rs.3,53,228/- and after the search the jurisdiction of the assessee was transferred to the Central Circle and pursuant to the notice issued u/s 153A of the Act calling for the returns of income for the Assessment Years 2009- 10 to 2014-15, the assessee filed ITR on 22/04/2016 for Assessment Year 2010-11 declaring total income of Rs.3,14,560/-. After issuing the statutory notices and calling for details 3 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 3 through questionnaires on various dates and after receiving the replies from the assessee, the Assessing Officer noted in his assessment order that during the search on 17/03/2015, the assessee had surrendered a sum of Rs.40 Crores as additional undisclosed income u/s 132(4) of the Act and according to the Assessing Officer the seized documents were marked SKB- LG which were trial balances found from the pen drive kept in the premises of the assessee. According to the Assessing Officer, the documents pertaining to SKB contained unaccounted cash transaction and the assessee had admitted that SKB was fictitious and code name for trial balances. The Assessing Officer noted that the additional undisclosed income surrendered by the assessee u/s 132(4) of the Act was for the Assessment Year 2013- 14 to Assessment Year 2015-16 to the tune of Rs.40 Crores. The chart showing the surrenders made for AY 2013-14 are respectively given at page 3 of the assessment order. The AO on perusal of the ITRs filed in response to notices u/s 153A for Assessment Year 2009-10 to 2015-16, noted that disclosure of additional income is only to the tune of Rs.50 Lakhs/- and that too only in the respect of Assessment Year 2015-16. Thus, according to the Assessing Officer, the assessee has retracted from the surrender made by disclosure u/s 132(4) of the Act. On this regard the Assessing Officer also took notice that the assessee has stated in letter dt. 08/11/2017 that during the search due to threat and coercion he has admitted the undisclosed income to the tune of Rs.40 Crores and the Assessing Officer reproduced certain portion of the statement as under:- “In view of the facts of the case as narrated in the preceding paragraphs, it is submitted that the admission of undisclosed income of Rs.40 Crore and disclosure thereof in the petition dated 20.04.2015 u/s 132(4) of the Act filed before the DDIT (Inv.), Unit-3(1)/Kol was not voluntarily made but was made under coercion, with the seized material. As such, the disclosure of the undisclosed income of Rs.40.00 Crores was not true and correct. (emphasis given)” 6. Thereafter the AO reproduced certain portion of the statement recorded u/s 132(4) of the Act, which is found reproduced at page 4 & 5 of the assessment order. Thereafter the Assessing Officer did not accept the retraction made by the assessee for the following reasons: 4 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 4 (i) Since the documents SKB which are in the form of trial balances/cash book were found in a pen drive from the assessee’s premise; and (ii) since the assessee had made a disclosure of Rs.39.30 Crores on the basis of these documents; (iii) and the trial balances pertain to the period from 01/01/2010 to 18/01/2010 (18 days) and that the assessee has admitted that at the time of making disclosure that 20% of the income shown in SKB documents were accounted and 80% of the income were not shown in regular books of account. Therefore, the AO treated the entire transaction contained in SKB as assessee’s undisclosed income and having noted that the closing balance for Assessment Year 2010-11 was to the tune of Rs.86,16,82,452/-, show caused to the assessee as to why this amount should not be treated as undisclosed income of the assessee. The assessee’s reply in respect of Assessment Year 2010-11 to this show cause notice (in short ‘SCN’) has been reproduced by the Assessing Officer from page 11 of the assessment order, which is extracted for ready reference:- "During the course of search a pen drive was found in the possession of one. of my employees Mr, Pradip Kumar Parasramka which inter- alia contained purported Balance Sheet in the name of SKB for the FY 2002-03 to FY 2004-05 (Id mark : GG/10 Page-27-28 & GG/2 Page- 70) & also a purported Balance Sheet in the name of SKB-LG for the FY 2004-05 (Id mark ; GG/7 Page-43-45). The Acronym SKB & SKB-LG don't represent me, my family members or my business concerns as submitted in our previous submission. That we rely upon the contents of the seized documents which you have also admitted in your quarry and have proposed the addition as under: A Y Amount proposed to be added Our Explanation 2010-11 86,16,82,452 The amount has been taken from the trial balance for the period from 1.1.10 to 18.1.2010 in the name of the firm ‘SKB’ taken out from the seized pen drive. It has been proposed to add the entire current liabilities outstanding balance as per the trial balance. First of all the seized paper is a trial balance of current liabilities and current assets which tallies at Rs 86,16,82,452 (assuming that figures are in hundred Rupees) which means the Current liabilities and Current Assets are of equal amount If we see the contents of both current liabilities and assets we find that amounts as mentioned against the names 5 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 5 mentioned in abbreviated/short form and none of name appearing on credit side bears the initials of any family member of the assessee. Nor to any of its companies. Thus to attribute the same to the assessee is uncalled for when there is no evidence to support the same. Further the trial balance has to be taken as a whole against current liability there are corresponding current assets. The contents of the seized paper are presumed to be true and correct so if the contents are true. And the current liabilities/assets can by no way be taken income of the assessee. There is no relation with the figures mentioned in the trial balance and the income. You have not mentioned anything in your notice to substantiate that the total of trail balance will be the income of the assessee. How can the current liabilities./assets could be income. 7. The Assessing Officer did not agree with the aforesaid contention of the assessee and made the addition of Rs. 86,16,82,452/- by taking note that the peak of closing trial balance as on 18/01/2010 is Rs. 86,16,82,452/-, which is the first year where the SKB documents are found. Therefore, he added the entire amount as the undisclosed income of the assessee. 8. Aggrieved by the aforesaid action of the Assessing Officer, the assessee preferred an appeal before the Ld. CIT(A) who was pleased to delete the same. However, he made an addition of commission @ 4% in respect of the undisclosed income. Aggrieved by the action of the Ld. CIT(A) in deleting the addition of Rs. 86,16,82,452/-, the revenue is in appeal and not satisfied with the Ld. CIT(A)’s action of restricting the addition of commission @ 4%, assessee is before us preferring the cross-appeal and the assessee’s contention regarding this is that for the other Assessment Years i.e., Assessment Year 2011-12 to 2015-16, the Assessing Officer had made only addition of 0.20% of the respective turnover as commission of the assessee for the respective Assessment Years. However, according to assessee, the Ld. CIT(A) has erred in enhancing the same to 4% of the turnover. It was also brought to our notice that he Ld. CIT(A) in the assessee’s appeal for Assessment Years 2011-12 to 2015-16 had enhanced the commission income from 0.20% to 4%. Further it was also brought to our notice that for the Assessment Year 2011-12 to 2013-14, the Department had preferred an appeal before this Tribunal, which was dismissed since it was hit by the tax 6 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 6 effect; and the assessee’s appeal for Assessment Years 2012-13 to 2015-16 in IT(SS)A No. 70, 71 & 72/Kol/2018, was decided by the Tribunal wherein, the Tribunal was pleased to give partial relief to the assessee by restricting the addition to 0.25% instead of 4% as done by the Ld. CIT(A). Therefore, the assessee’s plea is that the Ld. CIT(A)’s decision to levy a commission @4% of the turnover for the Assessment Year 2010-11 should be restricted to 0.25% where as the revenue is against the action of the Ld. CIT(A) in deleting the entire addition of Rs. 86,16,82,452/-. 9. We have heard the arguments of both the sides and perused the material available on record. After going carefully through the impugned order of Ld. CIT(A), we find that the Ld. CIT(A) has gone in depth in respect of this case (AY 2010-11) as well as that of other Assessment Years i.e., AY’s 2011-12 to 2015-16 by passing the impugned order which is running into 63 pages. It is noted that the Ld. CIT(A) after going through the assessment record and after conducting enquiries by calling relevant documents and after raising relevant questionnaires and after considering the replies from the assessee has given a show cause notice to the assessee wherein he expressed his desire for enhancement of income u/s 251(1)(a) of the Act for the Assessment Years 2010-11, 2013-14 & 2015-16, which is reproduced by him at page 26 to 27, which reproduced for ready reference:- NOTICE Sub : Notice of enhancement of income under Section 251(1)(a) of the Income-tax Act, 1961 In the case of Shri Girdhari Lal Goenka - A.Ys. 2010-11, 2013-14 & 2015-16 - PAN - ADZPG1962B - Regarding :- During the course of on-going appellate proceedings for the AY 2010-11 in Appeal No.10424, the following has come to the notice of the undersigned: 02. In the course of search operations carried out u/s 132 on 17.03.2015, a pen drive was found from the possession of the assessee's employee, whose contents were explained in the statement recorded u/s 132(4) of the Act. It is observed that the Ld. Assessing Officer had found two set of balance sheet/ trial balances under the title "SKB" and "SKB (LG"). The trial balance "SKB" was found in respect of Financial Years 2009-10, 2012-13, 2013-14 & 2014-15. Whereas the trial balance "SKB (LG)" was found in respect of Financial Years 2011-12 & 2014-15. With reference to document "SKB (LG)", the Ld. Assessing Officer accepted your offer that the transactions reported therein were carried out by the assessee on behalf of others and hence assessed unexplained commission income embedded therein which was computed at the rate of 0.2%. However with regard to document titled "SKB", the sum total of trial balance for FY 2009-10 which worked out to Rs. 86,16,82,452/- was assessed to tax and allowing the benefit of telescoping since the sum total of trial balances for subsequent years did not exceed the peak balance of Rs.86,16,82,452/- worked out in FY 2009-10, no further sum was assessed to tax in subsequent years. 7 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 7 03. In view of the above facts, in the appellate proceedings, the assessee has proposed that when the profit element/commission embedded in the transactions found in similar document "SKB (LG)" has been assessed to tax by the Ld. AO in AYS 2012-13 & 2015-16, then the same analogy be followed in respect of trial balance "SKB" as well. On examination of assessment records, the undersigned finds force in this alternate plea of the appellant. From the contents of the document "SKB', it appears that the appellant is a loan broker and acting as a commission agent for various parties outside the regular books of accounts. The undersigned is therefore of the considered view that only a profit/commission can at the best be estimated thereon and assessed as appellant's undisclosed income. 04. In view of the above and in particular of the suo moto plea raised by the appellant and the above understanding of the document 'SKB', the consequent theory of peak balance and benefit of telescoping followed by the Ld. AO for AYS 2010-11, 2013-14 & 2015-16 can no longer he applied. Going by the theory of assessing unexplained commission income, the profit element embedded in the trial balances will have to estimated and worked out for each of the aforesaid assessment years. 05. In my considered view however the offer to estimate commission income at the rate of 0.2% is on a very low side. From the judgments of Hon'ble Courts and ITAT Benches available in public domain, the consistent view which emerges is that 2% is a reasonable commission derived from providing accommodation entries. The undersigned is therefore of the view that the assessee would have derived 2% commission for providing accommodation and managing monies on behalf of the lenders, reflected by way of current liabilities and similar commission at the rate of 2% would have been derived from the persons to whom such cash was advanced or accommodated in their books. Therefore in view of the foregoing and in order to prevent any revenue leakage and render substantive justice to the Revenue as well, commission at the rate of 5% is considered to be reasonable. 06. For the reasons set out above, the assessee is therefore put to notice for the Assessment Years 2010-11, 2013-14 & 2015-16 as to why unexplained commission income (as offered by the appellant) should not be assessed at the rate of 5% on the sum total of the trial balances, which was as follows: SI. No. Assessment year Total of balance 'SKB' Unexplained Commission @ 5% proposed to be added in each year 1 2010-11 86,16,82,452 4,30,84,122 2 2013-14 28,82,08,822 1,44,10,441 3 2015-16 49,76,28,283 2,48,81,414 TOTAL 8,23,75,977 11. Pursuant to the aforesaid show-cause notice the assessee’s reply has also been reproduced by the Ld. CIT(A) from Page no. 27 to 30 of the impugned order. The relevant portions are reproduced as under:- 8 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 8 07. You are therefore requested to attend the office of the undersigned on 10.05.2018, and furnish your reply/rebuttable to the above enhancement notice and/or any other submissions/details, which is deemed necessary. In the above referred case we are in receipt of your notice for enhancement dated 5.2.2018 and as required we submit here under for your kind consideration: 1.That during the course of search a pen drive was found & seized from the possession of one of the employee of the assessee Mr. Pradip Kumar Parasramka which inter-alia contained purported Balance Sheet in the name of "SKB" for the FY 2002-03 to FY 2004-05 (Id mark : GG/10 Page-27-28 & GG/2 Page-70) & also a purported Balance Sheet in the name of "SKB- LG" for the FY 2004-05 (Id mark : GG/7 Page-43-45). The Acronym "SKB" & SKB-LG don't represent me, my family members or my business concerns. However, the authorised officer alleged that those so called balance sheets are related to assessee's state of affairs. It was further alleged that the entries in the said pen-drive were deliberately shown to be pertaining to FY 2002-03, 2003-04 & 2004-05 in place of FY 2012-13, 2013-14 & 2014-15. It was also alleged that there was suppression of two zero in each of the figures mention therein. 2. It is further submitted that the authorities didn’t provide the print-outs of the Balance Sheet of “SKB” (Id mark : GG/10 Page-27-28 & GG/2 Page-70) for the FY 2002-03 to FY 2004-05 & Balance Sheet of SKB LG (Id mark: GG/7 Page-43-45) for the FY 2004-05 which were allegedly found from the pen-drive seized from assessee’s employee Mr. Pradip kumar Parasramka. 3. The assessment for AY 2010-11 was completed on an income of Rs 86,16,82,452 The Additions were on account of transaction as per trial balance of "SKB" for the period form 1.1.2010 to 18.1.2010. The entire amount at which the trail balance tallied was added as the income of the assessee without appreciating the contents of the trial balance and working out the component of real income of the assessee. 4. In the show cause notice dated 16.11.17 the Ld AO has stated that during the course of analysis of the document GG/PD/1 seized pen drive from the office premises of M/s Golden Goenka Fincorp at 18, British India Street, Kolkata, SKB(LG). trial balance for the period 01.10.2001 to 31.03.2002 [path;/pendrive-2/DATA-LG/] was found and the total turnover has been shown at 1,97,60,401.21. in this case, the actual period should be read as 01.01.2011 to 31.03.2012 and the total turnover should be read as 197,60,40,121/-. It is apparent that this document was not considered at the time of making disclosure u/s 132(4) of the I.T. Act '61 by the assessee and proposed the following addition: SI.NO Documents referred Assessment year Quantum of Remarks undisclosed commission income (in Rs.) Remarks 1. SKB(LG) Balance sheet 2015-16 (01.01.2004 to 30.09.2004) contained GG/7 (Page 43- 45) 35,68,690 The undisclosed commission income has been taken @0.20% of total turnover of Rs. 178,43,44,951/- 9 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 9 2. SKB(LG) Balance sheet 2012-13 (01.10.2002 to 31.03.2002) contained GG/PD/1 39,52,080 The undisclosed commission income has been taken @0.20% of total turnover of Rs. 197,60,40,121/- 5. Similarly, in case of seized paper placed at page no 30 to 38 and 50 to 58 placed at Annexure GG/2 is a ledger account of one Mr Kishan -18 for the period from 1.4.14 to 29.8.14 and on an amount of Rs 876,00,000 undisclosed income @ 0.20% has been worked out at Rs. 175,200 and added in AY 2015-16 was also proposed in the show cause notice. 6. In both the above cases based upon the seized material of identical nature the Ld AO has proposed the profit rate of 0.20% to be taken as unaccounted income. The assessee in order to put qujets to the issue did not replied and accepted the commission as proposed in the notice dated 16.11.17 with respect to trial balance SKB LG to be taken as unaccounted income of the assessee. Since the Ld AO has proposed the same, so in the light of consistency the assessee offered that the proposed ratio addition based upon the documents identified to "SKB LG“ be also applied for trial balance identified as "SKB" as both documents are of identical in nature and have been retrieved from the same pen drive bearing same heading SKB. It may be seen that both set of documents have been part of the same pen drive and under the same company name "SKB" so they have to be dealt identically and same ratio to determine the unaccounted income be applied as they are part of same file. However the Ld AO did not accepted the contention of the assessee and held that the entire amount at which the trial balance tallied was taken as unaccounted income. Without appreciating the Rule of Consistency for the year 2010-11. 8. 8. Now your Honour have proposed to apply the same ratio of commission income on all the trial balances found under the company name "SKB" as done by the Ld AO for SKB-LG. And have proposed to apply a higher ratio of 5% on the amount at which the trial balances tally. Sir you have taken an element of profit ratio of 2% on both debit balance as well as credit balance as against 0.2% taken by the Ld AO only on the amount at which the trail balance sheet tallies. It is to inform that the ratio of 0.2% taken and applied by the Ld AO was based upon the seized material where in the working of 0.2% have been made and additions have been made in subsequent years. Since the ratio of 0.20% was taken and based upon the seized working sheets found during the course of search for this very reason we accepted and stated in our submissions before the Ld AO in response to his show cause notice dated 16.11.17 that the ratio of 0.20% of income be applied on the amount at with the trial balance "SKB LG" as well as SKB tallies. 9. So based upon the principal of consistency without prejudice to our basic stand that there is no element of income in the seized document, we propose that the same ratio of income as applied as made by the Ld AO in the case of SKB-LG be applied on similar documents under the company Name SKB. The ratio of 0.2% as applied to determine the income is based upon the working of income in the seized paper so in order of putting end to the issue and dispute we suggest that the ratio of 0.2% may also be applied upon the amount at with the trial balance "SKB" for the year 2015-16 which tallies at Rs 49,13,85,165 and Rs 28,82,08,822 for AY 13-14just to put quiets to the issue. As proposed in the case of documents under the name of "SKB-LG”. However the proposed rate of 5% is very high and without any basis. In the trade of financing the percentage of margins are very low and the amounts appearing in the trial balances are fluctuating and not fixed and have been carried forward to subsequent years. So the income on the same amount is being taxed multiple times as the 10 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 10 balances are being carried forward to subsequent years and in case of SKB the amount was at peak in Assessment Year 2010-11 at Rs 86,16,82,452 while in subsequent trial balances it was reduced so in the ratio of telescoping no additions should be made as the income has already been worked out at maximum amount. There are debit balances which are sourced out of equal amount of credits received which cannot be equated with entry operator but with a financing broker who gets very small percentage of commission on the transactions as also mentioned in some seized papers. It would be highly unreasonable to apply the ratio of 5% on all the trial balances found. 10. That in the case of the assessee can be equated with a finance broker which is also borne out of the seized trial balance where in funds are coming from various parties and is being given to other parties. So an estimate of 0.2% applied was justified. And should be applied on the amount at which the trial balances tally for AY 2013-14 and 2015-16. 11. That without prejudice to above it is prayed that estimation has to be made at a reasonable rate and looking to the nature of the business. We hope that above will be found in order and shall be considered favorably while estimating the income of the assessee based upon the SKB trial balances found." 12. Thereafter, it is taken note that the Ld. CIT(A) after analyzing the statement given by the assessee u/s 132(4) as well as the retraction made by the assessee after an year, the Ld. CIT(A) was of the opinion that retraction was an afterthought to wriggle out of the tax liability consequent to search. However, the Ld. CIT(A) has noted that the “Ad-hoc sum of Rs.40 Crores” disclosed by the appellant/assessee cannot be assessed solely relying on the statement u/s 132(4) of the Act but the same is required to be corroborated and assessed with reference to the incriminating documents and materials unearthed and found during the course of search and relied on the CBDT Instruction F. No. 286/2/2003-IT (Inv. II) dt. 10 th March, 2003, wherein the Board has laid down the guidelines for assessment of the undisclosed/additional income offered/confessed by the assessee during the course of search. The Ld. CIT(A) noted that in the said Instruction the Board has directed the field officers not to assess additional income by solely relying on the disclosure/confession made by them. Instead board advised that the additions in search assessments should be made with reference to the credible evidences and/or incriminating material gathered in the course of search and thereafter the Ld. CIT(A) extracted the relevant portions of the CBDT Instruction at Page 39 of his order. Thereafter, the Ld. CIT(A) considered the last contention of the assessee with reference to the similar documents SKB-LG found from the pen drive for other AYs and the action of Assessing Officer who has assessed undisclosed commission @ 0.2% thereon and therefore, according to assessee, the same methodology should have been followed in the case of the document SKB in this Assessment Year (AY 2010-11) as well. 11 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 11 This contention has been dealt with by the Ld. CIT(A) at para 17 to 19 of his order, which is reproduced as under:- “17. The last contention of the appellant is that when with reference to similar document 'SKB (LG)' found from the pen drive, the Ld. AO had assessed undisclosed commission income @ 0.2% thereon then same analogy should have been followed with reference to this document 'SKB' as well. The appellant thus suo moto offered that undisclosed commission income @ 0.2% may be assessed with reference to document 'SKB'. In support thereof, the Ld. AR furnished the assessment orders for AY 2012-13 & 2015-16 to show that the Ld. AO had assessed only 0.2% by way of commission income. This contention of the appellant and the apparent contradictory stands of the Ld. AO warranted verification and therefore the assessment records were called for to understand the true nature & content of the document 'SKB' & 'SKB (LG'). On perusal of the assessment records, it is observed that the Ld. AO had found 'SKB' trial balances for all the AYs 2010-11 to 2015-16 from the pen drive and had accordingly show caused the appellant to explain as to why the sum total of the trial balance in each year should be assessed as his undisclosed income. The details of proposed addition is as follows: SI. No. Documents referred Assessment Year Quantum of undisclosed income (in Rs.) Remarks 1 SKB Trial Balance (01.01.2010 - 18.01.2010) 2010-11 86,16,82,452 The closing balance as on 18.01.2010 has been taken as undisclosed income. 2 SKB Trial Balance (01.04.2012- 31.03.2013) 2013-14 33,01,15,104 The difference in total credit and the total debit for the year is taken as the undisclosed income. 1257219006 - 12197103902 = 330115104 3 SKB Trial Balance (01.04.2013- 31.03.2014) 2014-15 15,39,03,700 The difference in total credit and the total debit for the year is taken as the undisclosed income. 5381993810 - 5228090110 = 153903700 12 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 12 4 SKB Trial Balance (01.04.2014 - 16.03.2015) 2015-16 13,91,94,608 The difference in total credit and the total debit for the year is taken as the undisclosed income. 7903559284 - 7764364676 = 139194608 Total 148,48,95,864 18. The appellant in response had denied the ownership of these documents and contents thereof and submitted that no addition was warranted. Alternatively the appellant claimed benefit of telescoping and submitted that if Rs. 86,16,82,452/- is assessed in AY 2010-11, then the same be considered as opening balance in the subsequent AY 2011-12 and accordingly be telescoped against the closing balance and that the same be followed for subsequent years. The Ld. AO had rejected the primary contention of the appellant but found merit in the alternate contention and therefore sum of Rs.86,16,82,452/- was added in the relevant Assessment Year 2010-11 and no further sums were added in subsequent years and hence the benefit of telescoping the peak balance was allowed to the appellant. The appellant in the appellate proceedings however completely changed the tact and advanced a new theory of assessing undisclosed commission income on the closing balances of the trial balance. In my considered view, this change of tact and proposal to assess undisclosed commission Income is justified in view of the identical methodology followed by the Ld. AO in respect of similar document 'SKB (LG)'in AYs 2012-13 & 2015-16. 19. On perusal of the trial balance 'SKB, I find that it comprises of current liabilities of Rs.86,16,82,452/- (considering two zeros suppression) and corresponding current assets of the same amount. From the contents of the documents it appears that the appellant receives undisclosed monies in form of cash or cheque which is utilized to grant advances in form of loans/capital etc, either out of books or through accommodation entry route. The contents of the documents gives an impression that the appellant is a cash handler or commonly known as loan broker. He appears to be managing monies for different persons, pooling in their undisclosed resources and giving it by way of loans/advances/capital to persons in need of funds. On these facts & circumstances, I find merit in the Ld. AR's claim that the appellant is essentially a commission agent / broker and that the trial balance 'SKB' represents his unaccounted transactions outside the books. Accordingly the sum total of the transactions does not represent his income but only a profit/commission can at the best be estimated thereon and assessed as his undisclosed income. This same analogy appears to have been followed by the Ld. AO while decoding the document 'SKB (LG)' and assessing undisclosed commission income thereon. If the AO's logic that the sum total of the trial balance i.e. Rs.86.16 crores represented appellant's undisclosed monies is held to be true, then some undisclosed/unexplained assets ought to have been found in the course of search to justify such addition of such a humongous sum. It is however noted that the Investigating Officers did not find any unexplained assets in the course of search which would even remotely justify the impugned addition. Overall therefore and considering the surrounding circumstances, I therefore hold that the document 'SKB', as also accepted by the appellant, represented his undisclosed business of commission agent/loan broker who manages cash and therefore only commission income at the best could be assessed with reference to such trial balances. 13 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 13 13. Thereafter, the Ld. CIT(A) has discussed about his notice of enhancement given to the assessee based on the assessee’s statement offered during the course of search as well as according to the Ld. CIT(A), the undisclosed commission @ 0.20% is very low and, therefore, according to him 2% is reasonable as held by the Tribunal in the case of Praveen Kumar Agarwal in IT(SS)A No. 74/Kol/2003 dated 28/09/2007, and relying on the said decision he took a view that 2% is a reasonable commission derived from providing accommodation entries. Then the Ld. CIT(A) also observed an additional fact that the assessee while doing the role of accommodation provider might have also derived 2% commission for providing accommodation and managing monies on behalf of the lenders, which was reflected by way of current liabilities and thus, according to Ld. CIT(A), similar commission at the rate of 2% would have been derived from the persons to whom such cash was advanced or accommodate in their books. Therefore, presuming the aforesaid action on the part of assessee, the Ld. CIT(A) in order to prevent any revenue leakage as well proposed commission @5% as reasonable and gave notice to assessee for enhancement of estimated commission by AO from 0.20% to 5%. Even though the assessee objected to the same and was of the opinion that the Assessing Officer’s computation of 0.2% as unexplained commission income for Assessment Year 2013-14 and to Assessment Year 2015-16 was reasonable, however, the Ld. CIT(A) did not agree to the same and ordered that the unexplained commission income should be computed @ 4% on the sum total of trial balance of each year which according to him, was the profit derived from the undisclosed business activities and in that process, he was pleased to delete Rs. 86,16,82,452/- as added by the Assessing Officer for this Assessment Year 2010-11and computed the unexplained commission @4% [4/100 x 86,16,82,452 = Rs.3,44,67,298/-]. 14. Aggrieved the revenue as well as the assessee is in appeal before us and the Ld. AR for assessee Shri Miraj D. Shah has drawn out attention to the decision of this Tribunal in the assessee’s own case for AYs 2012-13 to 2015-16 in ITA No. 70, 71 & 72/Kol/2018 (supra), wherein the Tribunal vide order dt. 16/03/2020 has followed the decision of the Hon’ble Calcutta High Court in ITAT No. 32 of 2019, order dt. 07/03/2019, wherein it was pleased to hold that commission on accommodation entries at the rate of Rs.250 per lakh 14 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 14 which comes to 0.25% is justifiable. The finding of the Hon’ble Jurisdictional High Court has been extracted in the Tribunal order, which is as under:- "RE: ITAT No. 32 of 2019, GA No. 276 of 2019: No question of law is involved in this matter, let alone any substantial question of law. The questions which have been raised by the revenue are questions of fact. After adducing some intelligible reasons the Tribunal has come to its findings as follows. "Heard both the parties and perused the record. We find that the Revenue has accepted the submission of assessee in the case of M/s. Mercantile Pvt. Ltd. in an identical situation that the commission of accommodation entries was Rs.250 per lakh rupees and determined the tax @ 0.25%. Whereas in the present case the assessee itself offered profit rate at 0.26%, accepted by the revenue for the A.Y. 2011-12 and which is more than in the case of M/s. Mercantile Pvt. Ltd., which was also related to Badalia Group of cases. In view of the same, we find that the CIT-A was correct in directing the AO to reduce the addition to Rs.5,67,964/-. We find no infirmity in the impugned order of the CIT-A and is it is justified. Therefore, the grounds raised by the revenue are dismissed. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 03-11-2017." For the reasons above, we find no reason to admit the appeal. The appeal (ITAT No. 32 of 2019) and the connected application (GA No.276 of 2019) are dismissed." 15. The assessee’s prayer is that the estimation of income which has been order by the Ld. CIT(A) @4% should be restricted to 0.25% and the revenue’s contentions is that the entire addition made by the Assessing Officer should be restored. First of all, we cannot agree with the contentions raised by the Ld. CIT D/R that the entire addition should be restored. In this regard, we note that the Assessing Officer himself has accepted that the assessee is transacting using the paper companies controlled by him and their associates, which findings can be seen at page 16 and 17 of the assessment order; and the Assessing Officer has made addition on the strength of the trial balance sheet of Assessment Year 2010-11 which is pertaining to transaction of 18 days which fact is discernible from page 9 of the assessment order, wherein the Assessing Officer mentions that the period mentioned from 01/01/2010 to 18/01/2010 and the document which is supposed to be incriminating i.e. SKB is trial balance; and the Assessing Officer has made the entire closing balance as on 18/01/2010 as undisclosed income. Whereas the Ld. CIT(A) has found that the trial balance reflected by SKB comprises of current liabilities of Rs. 86,16,82,452/- (without considering suppression of last two digits) and corresponding current assets of the same amount. The Ld. 15 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 15 CIT(A) has found from the contents of the said document that the assessee had received in this case monies in the form of cash or cheque which the assessee has utilised to grant advances in forms of loans, grants etc. either out of books or through accommodation entry route. Thus, from the contents of the documents, the Ld. CIT(A) has drawn an inference that the assessee was a cash handler or commonly known as loan broker. Thus, according to the Ld. CIT(A) the assessee appears to be managing monies on behalf of different persons and he pools their undisclosed reserves and thereafter giving it by way of advances/loans/capital to persons in need. Thus, taking into consideration the entire facts and circumstances the Ld. CIT(A) made a finding of fact that the assessee is a commission agent/broker and that the trial balances SKB, represents unaccounted transaction outside the books and therefore, according to the Ld. CIT(A), the sum total of the transactions does not represent assessee’s income but for managing the money as discussed and in that process, the assessee receives only a profit/commission which can at best be estimated thereon and was assessed as his undisclosed income; and the Ld. CIT(A) took note of the fact that the Assessing Officer has also applied the same logic while decoding the documents ‘SKB-(LG)’for other AY’s. So, according to the Ld. CIT(A) the action of the Assessing Officer to add the total sum shown in the trial balance i.e., Rs.86.16 Crores as the assessee’s undisclosed income cannot be accepted. Not only that, the Ld CIT(A) reasoned that if it is held to be true,[ i.e, AO’s addition of Rs 86.16 Crores] then some undisclosed/unexplained assets of assessee ought to have been found in the course of search which then would have justified such an addition of the huge amount. Thus the Ld. CIT(A) further made a finding of fact that the investigation officers did not find any unexplained assets of the assessee during the course of search which would even remotely justify the entire addition of Rs.86.16 Crores. Considering the whole case and the overall circumstances, the Ld. CIT(A) held that the document SKB which was found in the pen drive represents undisclosed business of a commission agent/loan broker who manages cash and therefore only commission income can be assessed with reference to such trial balance and that the entire addition as done by the AO was not warranted. 16 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 16 16. We take note from the perusal of the contents of the purported incriminating document found in pen drive named as SKB is nothing but trial balance which comprises of current liabilities of Rs.86.16 Crores (without considering suppression of last two digits) and corresponding assets of the same amount. So, therefore, even if the presumption u/s 292C of the Act is drawn and the contents of such documents is considered to be true, then according to us, the Assessing Officer erred in only taking into account the amount of money shown in one side of the Trial balance as the income of the assessee which is nothing but liability of the assessee which falls on the left side of the balance sheet and the Assessing Officer erred ignoring the corresponding loans/advances shown to have been given by the assessee of the same amount. So, even if the presumption u/s 292C of the Act is applied taking the contents of the documents as true, then the Assessing Officer being a quasi judicial authority has to be fair in his action and could not do cherry picking which is favorable to only the revenue. He is bound to act fairly and should have considered both the incoming money as well as the outgoing money, i.e. the liability and corresponding loans/advances given by the assessee as shown in the trial balances/documents seized during the search. According to us, in the facts and circumstances discussed the Ld. CIT(A) has correctly appreciated the facts of the case and analysed the contents of the document SKB as well as SKB (LG) and has correctly taken a reasonable and plausible view after considering the entire matter before him. The Ld. CIT(A)’s view that the assessee is engaged in managing the monies of other persons for commission is a view that is probable to that of a prudent man instructed in facts as well as of law and has therefore, acted upon the supposition that it exists. Therefore, we fully agree with the reasons given by the Ld. CIT(A) in deleting the addition of Rs.86,16,82,452/- and for the sake of brevity we are not repeating the same and for doing so we rely on the decision of Hon’ble Supreme Court in the case of CIT vs. K.Y. Pilliah Sons reported in 1967 63 ITR 411 SC, consequently we dismiss the appeal of the revenue. 17. Coming to the commission estimated by the Ld. CIT(A) @4%, we note that this Tribunal in the assessee’s own case has accepted that the assessee being a commission agent indulged in giving accommodation entries and therefore, following the decision of the 17 IT(SS)A No. 69 & 84/Kol/2018 Sri Giridhari Lal Goenka, AY 2010-11 17 Hon’ble Jurisdictional High Court in ITAT No. 32 of 2019, we restrict the commission income in this case @ 0.25% as done by this Tribunal for AY 2012-13 to 2015-16. 18. In the result, appeal of the assessee is partly allowed and appeal of the revenue is dismissed. Order is pronounced in the open court on 10 th December, 2021. Sd/- Sd/- [P.M. Jagtap] (Aby T. Varkey] Vice President Judicial Member Dated: 10.12.2021 {SC SPS} Copy of the order forwarded to: 1. Shri Giridhari Lal Goenka, 3 rd Floor, 18, British India Street, Esplanade Kolkata – 700 069 2. Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata 3. Asstt. Commissioner of Income Tax, Central Circle-4(3), Kolkata 4. CIT(A)-21, Kolkata (Sent through e-mail) 5. CIT- , 6. CIT(DR), Kolkata Benches, Kolkata. (Sent through e-mail) True Copy By Order Senior Private Secretary/DDO ITAT, Kolkata Benches, Kolkata