RAHUL L. SINGHVI, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 13, MUMBAI

MA 382/MUM/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6315 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 10-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Accommodation entries; Onus to prove
• Section: 131; 132

Judgement Text

H IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI C N PRASAD , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654 /MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 ( / ASSESSMENT YEAR : 2009 - 10, 2010 - 11 & 2011 - 12) SHRI. RAHUL L. SINGHVI, C/O SHRI PRAKASH JHUNJHUNWALA, CHARTE RE D ACCOUNTANT, 5, JOLLY BHAVAN NO. 2, GROUND FLOOR , 7 NEW MARINE LINES, CHURCHGATE, MUMBAI, 400020 / V. ACIT - CENTRAL CIRVLE - 13, MUMBAI ./ PAN :ABAPS8698F ( / APPLICANT ) .. ( / RESPONDENT ) APPLICANT BY : SHRI PRAKASH G. JHUNJHUNWALA RESPONDENT BY: SHRI. M.C. OMI NINGSHEN ( SR. DR) / DATE OF HEARING : 16 - 02 - 2018 / DATE OF PRONOUNCEMENT : 19 - 02 - 2018 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THESE THREE MISCELLANEOUS APPLICATION S FILED BY THE ASSESSEE, BEING MA NO. 382 TO 384/MUM/2017 ARISING OUT OF APPEAL S BEARING ITA NO. 3654 MUM/2016, ITA NO. 3 6 53/MUM/2016 AND 3655/MUM/2016 FOR ASSESSMENT YEAR (S) 2009 - 10, 2010 - 11 & 2011 - 12 RESPECTIVELY , WHEREIN THE ASSESSEE HAS CLAIMED THAT THERE HAS BEEN A MISTAKE APPARENT FROM RECORD IN THE COMMON ORDER PASSED BY THE INCOME - TAX APPELLATE TRIBUNAL, MUMBAI DATED 11 - 05 - 2017 FOR THE AY 2009 - 10, 2010 - 11 & 2011 - 12 IN. ITA NO. 3654 MUM/2016, ITA NO. 3 6 53/MUM/2016 AND MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 2 3655/MUM/2016. WE WILL FIRST TAKE UP MA FOR AY 2009 - 10. THE ASSESSEE HAS RAISED IN ITS MISCELLANEOUS APPLICATION FOR AY 2009 - 10 FOLLOWING ALLEGED MISTAKES A PPARENT FROM RECORD IN THE TRIBUNALS ORDER DATED 11 - 05 - 2017, AS UNDER - 3. 0 MISTAKE APPARENT FROM THE RECORD A) THE HON'BLE ITAT FOLLOWING PRESUMPTION U/S.132{4A) R.W.S. 292C HELD THAT SEIZED PAGE NO.101 BELONG TO THE APPELLANT. THE HON'BLE ITAT DID NOT CONSIDER THE SETTLED LAW THAT SEC.132{4A) IS A REBUTTABLE PRESUMPTION AND THE APPELLANT, DURING COURSE OF INVESTIGATI ON AND ASSESSMENT, HAD PROVED THAT SUCH DOCUMENT BELONG TO SHRI TEJAS SHAH WHO HAD OWNED THE ENTIRE TRANSACTIONS AND CLARIFIED THAT THE APPELLANT WAS A MERE MIDDLEMAN AND COMMISSION IN SUCH TRANSACTION RANGES FROM 0.30% TO 0.40%; B) THE HON'BLE ITAT CONFIRMED THE ENTIRE ADDITION IN HANDS OF THE APPELLANT UNDER THE REASON THAT THE APPELLANT HAD NOT DEMONSTRATED THAT THE COMMISSION INCOME REFLECTED IN SEIZED PAGE NO.101 HAD BEEN BROUGHT TO TAX IN HANDS OF SHRI TEJAS SHAH. THE HON'BLE IT AT DID NOT CONSIDER THE STATEMENT RECORDED U/S.131 OF SHRI TEJAS SHAH (ACCOMMODATION ENTRY PROVIDER) WHO HAD ACCEPTED OF HAVING FLOATED VARIOUS COMPANIES UNDER THE SCHEME 'CONVERSION OF CASH INTO CHEQUE' AND ALSO HAD ACCEPTED THAT SUCH ACCOMMODATION ENTRIE S WERE PROVIDED BY HIM (TEJAS SHAH) AND THE APPELLANT (RAHUL SINGHVI) WAS A MERE MIDDLEMAN IN THE TRANSACTION. THE INCOME BELONGING TO MR. TEJAS SHAH CANNOT BE TAXED IN HANDS OF THE APPELLANT AND CONCEPT OF REAL INCOME OUGHT TO HAVE BEEN FOLLOWED. C) THE HON'BLE ITAT DID NOT CONSIDER THE DIRECT JUDICIAL DECISIONS RELIED BY THE APPELLANT OF HON'BLE DELHI ITAT SPECIAL BENCH AND I TAT, MUMBAI THOUGH THE FACTS OF RELIED APPELLANT'S CASE. 2. THE MAIN BONE OF CONTENTION OF THE ASSESSEE IS THAT THE TRIBUNAL HA S UPHELD THE APPELLATE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) , WHEREIN COMMISSION INCOME OF 1% ON THE ACCOMMODATION ENTRY BY WAY OF SHARE CAPITAL/SHARE PREMIUM TO THE TUNE OF RS. 8,70,80,000/ - ADMITTEDLY ARRANGED BY THE ASSESSEE WAS UPHE LD BY THE TRIBUNAL AS INCOME ASSESSABLE IN THE HANDS OF THE ASSESSEE, WHILE THE ASSESSEE IS ARGUING THAT INCOME SHOULD BE ASSESSED AT THE RATE OF 0 .10% INSTEAD OF 1% AS WAS UPHELD BY THE TRIBUNAL . THE ASSESSEE HAS BROUGHT TO THE NOTICE OF THE BENCH ORDER O F THE MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 3 TRIBUNAL DATED 11 - 05 - 2017 , WHEREIN THE APPEAL OF THE ASSESSEE WAS DISMISSED AND ORDER OF THE LEARNED CIT - A WAS CONFIRMED. IT IS THE SAY OF THE LD. COUNSEL FOR THE ASSESSEE THAT PRESUMPTION U/S. 132(4 A ) IS REBUTTABLE PRESUMPTION WHICH IS SUPPORTED BY THE HONBLE SUPREME COURT DE CISION IN THE CASE OF P.R. METRANI V. CIT (2006) 157 TAXMAN 325 (SC) , AND HONBLE BOMBAY HIGH COURT DECISION IN THE CASE OF CIT V . TIPS INDUSTRIES PRIVATE LIMITED (2010) 190 TAXMAN 6 5 (BOM) . THUS IN NUTSHELL THE LD. COUNSEL FOR THE ASSESSEE HAS ARGUED THAT THE INCOME TO BE ASSESSED IN THE HAND OF THE ASSESSEE SHOULD BE BROUGHT DOWN TO 0. 10 % OF THE ACCOMMODATION ENTRIES ARRANGED BY THE ASSESSEE FROM THE PRESENT 1% AS UPHELD BY THE TRIBUNAL. 3. ON THE OTHER HAND LD. DR HAS CONTENDED THAT THERE IS NO MISTAKE APPARENT FROM RECORD AS THE TRIBUNAL HAS TAKEN C OGNIZANCE OF ALL FACTS AND ARGUMENTS ADVANCED DURING THE COURSE OF HEARING AND THEREAFTER SPEAKING AND REASONED ORDER HAS BEEN PASSED BY THE TRIBUNAL AND IT IS NOT PERMISSIBLE FOR THE TRIBUNAL TO REVIEW ITS OWN ORDER WITHIN LIMITED MANDATE OF SECTION 254 OF THE INCOME - TAX ACT, 1961 AS THE CONSCIOUS DECISION WAS TAKEN BY THE TRIBUNAL WHILE PASSING THE ORDER DATED 11.05.2017. 4. WE HAVE CONSIDER ED RIVAL CONTENTIONS AND HAVE PERUSED THE MATERIAL ON RECORD INCLUDING THE ORDER OF THE TRIBUNAL AND ALSO ORDERS OF THE AUTHORITIES BELOW INCLUDING CITED CASE LAWS. BEFORE PROCEEDING FURTHER , I T IS IMPORTANT TO UNDERSTAND THE BRIEF FACTS OF THE CASE . T HE ASSESSEE IS A CHARTE RE D ACCOUNTANT BY PROFESSION AND HAVING INCOME FROM PROFESSION AND OTHER SOURCES. THE ASSESSEE WAS SEARCHED U/S. 132 OF THE 1961 ACT, ON 17.02.2012 BY DDIT (INV.) , BHAVNAGAR ALONG WITH SHIP BREAKERS GROUP OF BHAVNAGAR VIZ . BANSAL SUB - GROUP AND L E ELA SUB - GROUP. DURING THE COURSE OF AFORESAID SEARCH , INCRIMINATING DOCUMENTS WERE SEIZED WHICH SHOW ED THAT THE ASSESSEE HAD RECEIVED COMMISSION INCOME RANGING FROM 1.5% TO 2.45% FROM ARRANGING MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 4 BOGUS ACCOMMODATION ENTRIES BY WAY OF SHARE CAPIT AL /SHARE PREMIUM FOR LE E L A GROUP AND BANSAL GROUP. THE ASSESSEE HAS ADMITTED THAT IT WAS ENGAGED IN FACILITATING THE BOGUS ACCOMMODATION ENTRIES TOWARDS SHARE CAPITAL/SHARE PREMIUM TO THE TUNE OF RS. 8,70,80,000/ - FOR BANSAL GROUP AND LEELA GROUP . T HERE WAS ALSO STATEMENT RECORDED U/S. 131 OF SHRI. TEJAS J. SHAH, WHEREIN HE ALSO ADMITTED THAT THE ASSESSEE WAS FACILITATOR IN ALL THE TRANSACTIONS INVOLVING PROVIDING BOGUS ACCOMMODATION ENTRIES TOWARDS SHARE CAPITAL/SHARE PREMIUM AND HE ALSO STATED TH AT BROKERS WERE PAID COMMISSION OF 0.30 - 0.40% . THE AO ASSESSED COMMISSION INCOME IN THE HAND OF THE ASSESSEE TO THE TUNE OF 2% OF THE BOGUS ACCOMMODATION ENTRIES ADMITTEDLY ARRANGED BY THE ASSESSEE BAS ED ON INCRIMINATING MATERIAL SEIZED FROM POSSESSION OF THE ASSESSEE WHICH SHOWED COMMISSION INCOME RANGING FROM 1.5 TO 2.45% ON ACCOMMODATION ENTRIES, WHICH WAS LATER REDUCED TO 1% BY LD. CIT - A KEEPING IN VIEW FACTOR ING OF EXPENSES INVOLVED IN THESE ACTIVITIES . THE REVENUE HAS NOT COME IN AN APPEAL BEFORE THE TRIBUNAL AGAINST THE RELIEF GRANTED BY LEARNED CIT(A) AS BOTH THE PARTIES COULD NOT POINT OUT DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL WHEN ORIGINAL HEARING IN APPEALS TOOK PLACE IN ITA NO. 3654 MUM/2016, ITA NO. 3653/MUM/2016 AND 3655/MUM/2016, TH E TRIBUNAL AFTER HEARING BOTH THE PARTIES , CONSIDERING AND APPRECIATING THE ENTIRE MATERIAL ON RECORD AS WELL AS KEEPING IN VIEW THAT THE R EVENUE HAS NOT COME IN AN APPEAL BEFORE THE TRIBUNAL PASSED A REASONED AND SPEAKING ORDER DATED 11 - 05 - 2017 WHEREIN CONSCIOUS DECISION WAS TAKEN BY THE TRIBUNAL BY UPHOLDING NET INCOME TO THE TUNE OF 1% TO BE ASSESSED IN THE HAND OF THE ASSESSEE WHEREIN APPELLATE ORDER OF LEARNED CIT(A) WAS CONFIRMED BY THE TRIBUNAL BY HOLDING AS UND ER: - 13. WE HAVE CONSIDERED RIVAL CONTENTIONS AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING CASE LAWS RELIED UPON BY THE RIVAL PARTIES. WE HAVE OBSERVED THAT ASSESSEE IS A CHARTERED ACCOUNTANT BY PROFESSION AND HAVING INCOME FROM PROFESSION AND OT HER SOURCES. MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 5 THE ASSESSEE WAS SEARCHED U/S 132 OF THE ACT ON 17TH FEBRUARY, 2012 BY THE DDIT (INV.), BHAVNAGAR ALONG WITH SHIP BREAKERS GROUP OF BHAVNAGAR VIZ. BANSAL SUB - GROUP AND LELEA SUB - GROUP. THE DDIT (INV.), BHAVNAGAR RECORDED THE STATEMENT OF THE ASSESSEE U/S 131 OF THE ACT AND THEREAFTER ON VARIOUS DATES , WHEREBY THE ASSESSEE HAD ADMITTED THAT HE USED TO RECEIVE CASH FROM KOMALKANT SHARMA AND IN TURN PROVIDE RTGS/CHEQUE ENTRIES TO LEELA SUBGROUP AND BANSAL GROUP IN THE GUISE OF SHARE CAPITAL AND SHARE PREMIUM FROM FICTITIOUS COMPANIES. IN HIS STATEMENT , THE ASSESSEE ALSO STATED THAT MR TEJAS J. SHAH RAN THE FICTITIOUS COMPANIES AND ENGAGED FEW PERSONS OF NO MEANS AS DIRECTORS OF THESE FICTITIOUS CONDUIT COMPANIES. THE ASSESSEE FURTHER ADMITTED TH AT HE RECEIVED 0.1% AS COMMISSION FOR ARRANGING BOGUS ENTRIES BY WAY OF CHEQUE AGAINST THE CASH FOR BANSAL GROUP AND LEELA GROUP. IN HIS STATEMENT RECORDED ON OATH U/S 131 OF THE ACT ON 13TH MARCH, 2012, SH TEJASH J SHAH HAD ADMITTED THAT HE HAD FLOATED VA RIOUS COMPANIES FOR THIS SCHEME OF CONVERSION OF CASH INTO CHEQUE THROUGH THESE BOGUS COMPANIES AND INTRODUCTION OF UNACCOUNTED INCOME INTO THE REGULAR BOOKS OF ACCOUNT. IT WAS ALSO STATED BY SHRI TEJASH J SHAH THAT THE ASSESSEE WAS THE FACILITATOR FOR HAN DLING THE CASH FROM SHIP BREAKERS THROUGH ANGDIAS AND ARRANGING CHEQUE FOR TEJASH J SHAH GROUP COMPANIES AND CHEQUES WERE INTRODUCED IN THE BANSAL GROUP AND LEELA GROUP OF COMPANIES AS SHARE CAPITAL AND SHARE PREMIUM. THE EXTRACT OF THE STATEMENT RECORDED OF SHRI TEJASH J SHAH ON 13TH MARCH, 2012 BY THE DDIT (INV.) BHAVNAGAR IS REPRODUCED HEREUNDER: - I DO HEREBY ACKNOWLEDGE AND CONFIRM THAT AFTER RECEIVING CASH FROM BANSAL OR LEELA GROUP OF BHAVNAGAR , THE SAME WAS CONVERTED IN TO CHEQUES IN FAVOUR OF ANY OF MY MANAGED COMPANY FROM DIFFERENT SHROFFS SITUATED AT KALBADEVI, MUMBAI. LATER ON, AFTER ROTATING SAID CHEQUE IN MY OWNED MANAGED COMPANIES, I USED TO ISSUE EITHER CHEQUE OR MAKE RTGS IN FAVOUR OF THE DESIRED CONCERN OF BANSAL OR LEELA GROUP OF BHAVNAGA R. MR. RAHUL SINGHVI IS THE MIDDLEMAN IN ALL THE TRANSACTIONS WHICH I HAVE MADE WITH MR. VIJAY BANSAL AND KOMALKANT SHARMA. IN FACT, SHRI. RAHUL SINGHVI IS THE PERSONS WHO ASKS ME TO ARRANGE CHEQUE OF CERTAIN AMOUNT TO BANSAL OR LEELA GROUP OF BHAVNAGAR AN D HE ONLY DISCUSS WITH SHRI. VIJAY BANSAL OR SHRI. KOMALKANT SHARMA ABOUT THE QUANTUM OF SHARE CAPITAL OR PREMIUM REQUIRED AND LATER ON THROUGH ANGADIA ARRANGES CASH. THIS CASH IS ACTUALLY BEING SENT BY SHRI.VIJAY BANSAL AND KOMALKANT SHARMA FOR WANT OF DE SIRED ENTRIES. WHEN THE BANK ACCOUNTS OF MR. VIJAY BANSAL AND KOMALKANT SHARMA GOT CREDITED, SHRI. RAHUL SINGHVI USED TO CONFIRM THIS DEPOSITION OF CHEQUES TO MR. VIJAY BANSAL ON TELEPHONE. SIR HERE I WANT TO MENTION THAT THIS PRACTICE OF PROVIDING CHEQUES - IN EXCHANGE - OF CASH AMOUNT IS PREVALENT ACROSS MUMBAI AND THE PLACE KALBADEVI IN MUMBAI IS HUB OF SUCH FINANCIAL TRANSACTIONS. SEVERAL PERSONS BASED IN KALBADEVI AREA OF MUMBAI ARE DOING BUSINESS OF PROVIDING CHEQUES IN EXCHANGE OF CASH AMOUNT. IT IS ALSO SUBMITTED THAT THIS IS A VOLUMINOUS NATURE OF CHEQUE - CASH TRANSFER BUSINESS DONE ON DAILY BASIS AND SEVERAL PARTIES BANK ACCOUNTS/CHEQUES/SHARE TRANSFER FORMS/STAMP PADS/SIGNATURES ARE USED FOR MULTI - LAYERING. SIR IN THIS BUSINESS BROKERAGE/COMMISSION INC OME @0.30 - 0.40 PAISA PER HUNDRED RUPEES (RS. 30,000 RS. 40,000 PER CRORE) IS EARNED/GIVEN ON EVERY TRANSFER OF CASH/CHEQUE AMOUNT. THE MODUS OPERANDI FOR THIS ARRANGEMENT OF MOVEMENT OF UNACCOUNTED CASH AS ADMITTED BY SHRI TEJASH J SHAH AND ASSESSEE IS IN THE FOLLOWING STYLE: - MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 6 GENERATION OF UNACCOUNTED CASH INCOME FROM SALE OF SHIP - BREAKING MATERIAL AT ALANG SHIP BREAKING YARD COLLECTION AND DEPOSITION OF CASH AT OFFICE PREMISES AT BHAVNAGAR IT WAS ALSO ADMITTED BY THE ASSESSEE AND SHRI TEJASH J SHAH THAT THE CASH RECEIVED FROM LEELA AND BANSAL GROUP WAS REINVESTED IN THEIR GROUP COMPANIES AS SHARE CAPITAL AFTER ROUTING THE SAME THROUGH FICTITIOUS COMPANIES OF SHRI TEJASH J SHAH AND IN MANY CA SES THE CASH WAS DEPOSITED IN SOME INDIVIDUAL SHROFFS ACCOUNT AND THE SAME WAS ROUTED THROUGH FEW LAYERS OF OTHER BANK ACCOUNTS AND ULTIMATELY THE MONEY WAS TRANSFERRED TO VARIOUS BENEFICIARY COMPANIES IN THE FORM OF SHARE CAPITAL/PREMIUM. THE A.O. NOTED THAT BANSAL AND LEELA GROUP APPROACHED THE SETTLEMENT COMMISSION AND HAD OFFERED THE INVESTMENT MADE IN THE SHARE CAPITAL AS WELL AS COMMISSION PAID/EXPENDITURE INCURRED FOR PROCURING THE ACCOMMODATION ENTRIES AS ADDITIONAL INCOME. FURTHER THE AO OBSERVED FROM THE PERUSAL OF PAGE NO. 101 (PB/PAGE1) OF THE SEIZED MATERIAL FROM THE ASSESSEE DURING SEARCH U/S 132 OF THE 1961 ACT THAT THE ASSESSEE HAD RECEIVED COMMISSION RANGING FROM 1.5 TO 2.45% FOR ARRANGING THE BOGUS ENTRIES BY WAY OF SHARE CAPITAL/SHARE PR EMIUM FOR LEELA GROUP AND BANSAL GROUP. THE ASSESSEE ADMITTED TO BE PART OF THE CHAIN BEING FACILITATOR OF THE ACCOMMODATION ENTRIES BEING PROVIDED TO BANSAL GROUP AND LEELA GROUP. THE QUANTUM OF ACCOMMODATION ENTRIES IS ALSO ADMITTED BY THE ASSESSEE TO BE RS. 8,70,80,000/ - WHICH WAS ARRANGED BY THE ASSESSEE FOR BANSAL AND LEELA GROUP AS FACILITATOR. THE AO BASED ON THE MATERIAL SEIZED , STATEMENT RECORDED OF THE ASSESSEE DEPOSITING THE CASH AT ANAGDIA OFFICE AT BHAVNAGAR TRANSFER OF CASH TO ANAGDIA OFFICE AT MUMBAI PROVIDING CASH AMOUNT TO RAHUL SINGHVI/TEJASH SHAH AT MUMBAI FOR CONVERSION OF CASH INTO CHEQUE IN THE GUISE OF SHARE CAPITAL/SHARE PREMIUM DEPOSITION OF CHEQUES THROUGH FICTITIOUS COMPANIES IN THE BANK A CCOUNT OF LEELA SUB - GROUP CONCERNS. MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 7 AND MR TEJASH J SHAH BROUGHT TO TAX COMMISSION INCOME WHICH WAS WORKED OUT AT 2% OF TH E TRANSACTION AMOUNT OF RS.8,70,80,000/ - BASED ON AVERAGE COMMISSION OF 1.5% AND 2.45% OF TRANSACTION AMOUNT AS WAS RECORDED IN SEIZED MATERIAL MARKED AS 101(PB/PAGE 1). THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE REDUCED THE ADDITI ONS ON ACCOUNT OF COMMISSION INCOME TO 1% OF TRANSACTION AMOUNT AS THE LEARNED CIT(A) ALLOWED THE BENEFIT OF EXPENSES INCURRED IN CONNECTION WITH EARNING OF THESE COMMISSION INCOME FROM ARRANGING ACCOMMODATION ENTRIES AS ALSO TREND OF GENERATION OF INCOME IN THESE ACTIVITIES , WHICH ASPECTS WERE CONSIDERED BY THE LEARNED CIT(A) WHILE PARTLY ALLOWING THE RELIEF TO THE ASSESSEE . THUS, THE ASSESSEE WAS GRANTED PART RELIEF BY THE LEARNED CIT(A) . IT IS NOT BROUGHT ON RECORD BY BOTH THE RIVAL PARTIES THAT REVEN UE HAS FILED ANY APPEAL AGAINST THE ORDERS OF LEARNED CIT(A) GRANTING PART RELIEF TO THE ASSESSEE. THE ACTIVITIES OF ARRANGING ACCOMMODATION ENTRIES WHICH ARE HAWALA TRANSACTIONS IN VARIOUS MODES AND FORMS TO GENERATE OR CONVERT BLACK MONEY AND/OR EVASION OF TAXES IS RAMPANT IN INDIAN ECONOMY WHICH IS DESTROYING THE ECONOMIC FABRIC OF THE COUNTRY BY CREATING A PARALLEL ECONOMY . SEVERAL LAUDABLE MEASURES ARE TAKEN BY GOVERNMENT OF INDIA TO CURB THIS MENACE WHICH INCLUDED THE LATEST MOVE OF THE GOI TO DEMONE TIZE CURRENCY NOTES OF RS. 500 AND RS 1000 ON 8TH NOVEMBER 2016. SUCH TYPES OF CLANDESTINE ACTIVITIES OF ENGAGING IN HAWALA/ACCOMMODATION ENTRIES ARE HAMPERING NATIONAL GROWTH AND PROSPERITY AND NEEDS TO BE DISCOURAGED AT ALL LEVELS. CONSPIRACIES ARE HATCH ED IN SECRECY AND EXECUTED IN DARK. SEVERAL PERSONS FORM A CHAIN IN THE RING OF CONSPIRACY TO CONVERT OR GENERATE BLACK MONEY THROUGH ACCOMMODATION ENTRIES WITH OBJECTIVE TO DEFRAUD REVENUE TO EVADE TAXES WHICH ARE OTHERWISE LEGITIMATELY DUE TO GOVERNMENT. INCOME GENERATED OUT OF SUCH ACTIVITIES ARE NOT DECLARED IN NORMAL COURSE TO THE STATE AND IT IS ONLY THROUGH THE EXTRA - ORDINARY MEASURES EXECUTED BY STATE SUCH AS SEARCHES AND SURVEYS, THESE CLANDESTINE ACTIVITIES ARE DISCOVERED. COMING BACK TO THE INSTA NT CASE, THE REVENUE HAS SEIZED DOCUMENT MARKED 101 (PB/ PAGE 101) FROM THE POSSESSION OF THE ASSESSEE DURING THE COURSE OF SEARCH OPERATIONS U/S 132(1) OF THE ACT. THE SAID DOCUMENT MARKED 101 (PB/PAGE1)REVEALS THAT COMMISSION TO THE EXTENT OF 1.5% TO 2.4 5% ON TRANSACTION VALUE OF THESE ACCOMMODATION ENTRIES HAS CHANGED HAND FACILITATED BY OR THROUGH ASSESSEE IN A CHAIN OF CONSPIRACY TO CONCLUDE THESE ACCOMMODATION ENTRIES TO DEFRAUD REVENUE. THIS IS AN ADMITTED POSITION BY THE ASSESSEE HIMSELF THAT THE AS SESSEE IS PART OF THE CHAIN OF ACTIVITIES LEADING TO FACILITATING ACCOMMODATION ENTRIES TOWARDS FICTITIOUS SHARE CAPITAL AND SHARE PREMIUM FOR COMPANIES OF BANSAL GROUP AND LEELA GROUP OF BHAVNAGAR. IT IS ALSO BROUGHT ON RECORD THAT THE BANSAL GROUP AND LE ELA GROUP APPROACHED SETTLEMENT COMMISSION TO DECLARE THESE INCOME REPRESENTING BY FICTITIOUS SHARE CAPITAL/ SHARE PREMIUM AND COMMISSION / EXPENSES PAID THERETO. THE PRESUMPTION U/S 132(4A) R.W.S. 292C SHALL APPLY AND CONTENT OF THE DOCUMENT BEING SEIZED BY REVENUE MARKED AS PAGE 10 WILL BE PRESUMED TO BE TRUE AND CORRECT. THE ONUS AS WELL BURDEN OF PROOF IS SQUARELY ON THE ASSESSEE TO BRING ON COGENT MATERIAL AND EVIDENCES ON RECORD TO PROVE THAT ALL THE INCOME AS REFLECTED IN THE SEIZED MATERIAL IS DULY ACCOUNTED FOR AND DUES TAXES PAID TO REVENUE. THE AO HAS ALLOWED AN AVERAGE OF 2% OF TRANSACTION AMOUNT TO BE BROUGHT TO TAX AS COMMISSION KEEPING IN VIEW AVERAGE OF RECORDED COMMISSION OF 1.5% TO 2.45% MENTIONED IN THE SEIZED DOCUMENT MARKED AS 101(PB/10 1). THE LEARNED CIT(A) AFTER CONSIDERING THE MARKET TRENDS IN THESE TYPE OF CLANDESTINE ACTIVITIES AND ALSO KEEPING IN VIEW THAT EXPENSES ARE ALSO INCURRED IN THE COURSE OF SUCH CLANDESTINE ACTIVITIES DEEM IT FIT TO BRING TO TAX COMMISSION INCOME @1% OF TR ANSACTION AMOUNT. THE QUANTUM OF TRANSACTION IS NOT DISPUTED BY THE MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 8 ASSESSEE NOR INVOLVEMENT/PARTICIPATION IN THESE ACCOMMODATION ENTRIES ARE DISPUTED BY THE ASSESSEE . THE REVENUE IS NOT IN APPEAL AGAINST PART - RELIEF GRANTED BY LEARNED CIT(A) . THE ASSESS EE HAS PLACED RELIANCE ON OTHER CASE LAWS AS MENTIONED IN PRECEDING PARAS WHICH WE HAVE GONE THROUGH AND WE ARE AFRAID THAT SAID CASE LAWS CANNOT COME TO RESCUE OF THE ASSESSEE AS IT IS PURELY A FACTUAL MATTER AND EVERY CASE IS TO BE DECIDED ON FACTS AND CIRCUMSTANCES OF THE SAID CASE. IN THE INSTANT CASE THERE IS A FINDING SUPPORTED BY DOCUMENT SEIZED DURING THE SEARCHES CONDUCTED BY REVENUE U/S 132(1) WHEREIN IT IS MENTIONED THAT COMMISSION RANGING FROM 1.5% - 2.45% ON TRANSACTION VALUE IS PAID ON ACCOMMO DATION ENTRIES . THE ASSESSEE HAS ADMITTED TO BE INVOLVED IN THESE CLANDESTINE ACTIVITIES. THE ASSESSEE MAY BE A PART OF THE CHAIN OF PERSONS WHO ARE BENEFICIARY OF THESE CLANDESTINE ACTIVITIES BUT SINCE THE DOCUMENT IS SEIZED FROM THE ASSESSEE , THE ASSES SEE HAS TO DEMONSTRATE THAT THE ENTIRE INCOME AS IS REFLECTED IN THE SEIZED DOCUMENT MARKED AS 101 ( PB/PAGE 1) IS BROUGHT TO TAX ALBEIT IN THE HANDS OF OTHER PERSONS WHO WERE PART OF COMMON CONSPIRACY IN THESE CLANDESTINE ACTIVITIES AND THE ENTIRE INCOME SUFFERED TAXATION. NO SUCH COGENT MATERIAL AND EVIDENCES HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE. MERE STATEMENT RECORDED OF SH. TEJAS J SHAH U/S 131 IS NOT SUFFICIENT AS IT IS MERELY MATERIAL OBTAINED DURING SEARCH, WHILE THE DOCUMENT SEIZED DURING THE SEARCH SPEAKS LOUDLY OF COMMISSION TO THE TUNE OF 1.5% TO 2.45% BEING PAID ON THESE ACCOMMODATION ENTRIES. IN - ANY CASE , LEARNED CIT(A) HAS FACTORED FOR EXPENSES TO BE ALLOWED FOR MEETING VARIOUS EXPENSES WHICH ARE LIKELY TO HAD BEEN INCURRED BY THE ASSE SSEE IN UNDERTAKING THESE CLANDESTINE ACTIVITIES OF BEING FACILITATOR OF ACCOMMODATION ENTRIES. WE DONOT FIND ANY INFIRMITY IN THE APPELLATE ORDER OF THE LEARNED CIT(A) WHICH WE ARE INCLINED TO AFFIRM/SUSTAIN. THE ASSESSEE FAILS IN THIS APPEAL. WE ORDER AC CORDINGLY. 14. IN THE RESULT , APPEAL OF THE ASSESSEE IN ITA NO.3654/MUM/2016 FOR ASSESSMENT YEAR 2009 - 10 IS DISMISSED. WE ORDER ACCORDINGLY. 15. OUR ABOVE DECISION IN ITA NO. 3654/MUM/2016 FOR ASSESSMENT YEAR 2009 - 10 SHALL APPLY MUTATIS MUTANDIS TO TH E ASSESSEES OTHER APPEALS IN ITA NO. 3653/MUM/2016 ASSESSMENT YEAR 2010 - 11 AND ITA NO. 3655/MUM/ 2016 FOR ASSESSMENT YEAR 2011 - 1 , WHEREIN THE FACTS ARE IDENTICAL.WE ORDER ACCORDINGLY. 16. IN THE RESULT, APPEALS FILED BY THE ASSESSEE IN ITA NO. 3653/MUM/2016 FOR ASSESSMENT YEAR 2010 - 11, ITA NO. 3654/MUM/2016 FOR ASSESSMENT YEAR 2009 - 10 AND ITA NO. 3655/MUM./2016 FOR ASSESSMENT YEAR 2011 - 12 ARE DISMISSED. WE ORDER ACCORDINGLY . NOW THE ASSESSEE HAS FILED THIS MA FOR AY 2009 - 10 AND HAS STATED THAT THE INCOME TO BE ASSESSED IN THE HAND OF THE ASSESSEE SHOULD BE REDUCED TO 0.1% OF THE ADMITTED ACCOMMODATION ENTRIES TO THE TUNE OF RS. 8,70,80,000/ - FACILITATED BY THE ASSESSEE. IT IS THE SAY OF THE ASSESSEE THAT SH TEJAS J. SHAH IN HIS STATEMENT RECORDE D U/ S. 131 HAS ADMITTED THAT HE FLOA TED COMPANIES FOR PROVIDING ACCOMMODATION ENTRY AND IN WHICH BROKERS ARE PAID 0.3% TO 0.4%. THE ASSESSEE IS MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 9 ADMITTING TO BE INVOLVED IN CLANDESTINE ACTIVITIES OF FACILITATING ACCOMMODATION ENTRIES TOWARDS SHARE CAPITAL/ SHARE PREMIUM AND DOCUMENTS WERE SEIZED FROM THE ASSESSEE WHICH CLEARLY REVEALED THAT COMMISSION RANGING FROM 1.5% TO 2.4 5 % WAS RECEIVED BY THE ASSESSEE FOR AR RANGING BOGUS ACCOMMODATION ENTRIES FOR SHARE CAPITAL/SHARE PREMIUM FOR BANSAL GROUP AND LE E L A GR OUP. PRESUMPTION U/S 132(4A) WILL APPLY AND NO DOUBT IT IS REBUTTABLE AS CONTENDED BY THE ASSESSEE SUPPORTED BY DECISIONS OF THE HONBLE COURTS, BUT THE ONUS IS ON THE ASSESSEE TO PROVIDE COGENT EVIDENCE IN HIS SUPPORT TO REBUT THAT PRESUMPTION . NO SUCH COGENT EVIDENCE TO REBUT THE PRESUMPTION U/S 132(4A) HAS BEEN BROUGHT ON RECORD. MERELY BECAUSE ONE SH. TEJAS J SHAH HAS GIVEN STATEMENT U/S 131 STATING COMMISSION IN THESE DEALS IS 0.3 - 0.4% IS NOT SUFFICIENT AS DOCUMENT SPEAKS LOUDLY OF COMMISSION OF 1 . 5% TO 2.45% RECEIVED BY THE ASSESSEE AND THE ASSESSEE HAS TO PROVE THAT THE AMOUNT STATED IN THE INCRIMINATING DOCUMENTS HAD SUFFERED TAXATION ALBEIT IN DIFFERENT HANDS WHICH THE ASESSEE COULD NOT PROVE BY ANY EVIDENCE. NOR THE ASSESSEE BROUGHT ON RECORD A NY DOCUMENT TO PROVE THAT THE CONTENT OF THESE INCRIMINATING DOCUMENTS ARE FALSE. THE AO AFTER CONSIDERING ENTIRE MATERIAL ON RECORD HAS COME TO THE CONCLUSION THAT AVERAGE INCOME OF 2% OF THE ACCOMMODATION ENTRIES ARRANGED BY THE ASSESSEE BE BROUGHT TO T AX WHICH WAS REDUCED TO 1% BY LD. CIT - A AFTER FACTORING EXPENSES . THE REVENUE DID NOT CAME IN APPEAL BEFORE THE TRIBUNAL AGAINST THE RELIEF GRANTED BY THE LEARNED CIT - A. THE TRIBUNAL AFTER CONSIDERING THE ENTIRE MATERIAL ON RECORD TOOK A CONSCIOUS DECISION AFTER APPLICATION OF MIND AND PASSED WELL REASONED AND SPEAKING ORDER DATED 11 - 05 - 2017 BY AFFIRM ING COMMISSION INCOME AT THE RATE OF 1% OF THE ACCOMMODATION ENTRIES ARRANGE D BY THE ASSESSEE TO THE TUNE OF RS. 8,70,80,000/ - , TO BE ASSESSED IN THE HANDS OF THE ASSESSEE . THE FACTUM AND QUANTUM OF ARRANGING ACCOMMODATION ENTRIES BY WAY OF SHARE CAPITAL/SHARE PREMIUM BY THE ASSESSEE IS NOT IN MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 10 DISPUTE. THERE IS NO MISTAKE APPARENT FROM RECORD WHICH CAN BE CORRECTED WITHIN LIMITED MANDA TE U/S. 254(2) OF THE 1961 ACT AS THE SCOPE OF CORRECTION OF MISTAKE U/S. 254(2) IS VERY LIMITED TO A MISTAKE APPARENT FROM RECORD AND TRIBUNAL CANNOT REVIEW ITS OWN DECISION WITHIN LIMITED MANDATE OF SECTION 254(2). IN THE RESULT MA NO. 282/MUM/2017 ARISI NG OUT OF APPEAL IN ITA NO. 3654/MUM/2016 FOR AY 2009 - 10 FILED BY THE ASSESSEE STOOD DISMISSED. WE ORDER ACCORDINGLY. 5. IN THE RESULT MA NO. 382/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 FOR AY 2009 - 10 STOOD DISMISSED. 6. SINCE THE OTHER TWO MAS FOR AY 2010 - 11 AND 2011 - 10 ALSO INVOLVE SIMILAR GROUNDS , OUR AFORESAID DECISION IN MA FOR AY 2009 - 10 SHALL APPLY MUTATIS MUTANDIS TO THESE TWO MAS FOR AY 2010 - 11 AND 2011 - 12. THUS, BOTH THE MAS FOR AY 2010 - 11 AND 2011 - 12 STOOD DISMISSED. WE ORDER ACCORDING LY. 7.IN THE RESULT BOTH THE MAS BEARING MA NO. 383/MUM/2017 ARISING OUT OF ITA NO. 3653/MUM/2016 FOR AY 2010 - 11 AND MA NO.384/MUM/2017 ARISING OUT OF ITA NO. 3655/MUM/2016 FOR AY 2011 - 12 STOOD DISMISSED. 8. IN THE RESULT ALL THREE MAS STOOD DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9 .02.2018 1 9 .02.2018 SD / - S D / - ( C N PRA S AD ) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 1 9 .02.2018 NISHANT VERMA SR. PRIVATE SECRETARY MA NO. 382 TO 384/MUM/2017 ARISING OUT OF ITA NO. 3654/MUM/2016 ARISING OUT OF ITA NO. 3653/MUM/2016 ARISING OUT OF ITA NO. 3655/MUM/2016 11 COPY TO 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, 6 . MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI