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TMI Blog2011 (1) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... same transactions, the question formulated is being answered by this singular judgment. 3. The facts of the matter do not need a wide canvass and briefly stated herein below. A search and seizure operation under Section 132 of the Income Tax Act (hereinafter referred to as „the Act‟) was conducted on 20.06.2000 at the residential and business premises of Shri P.K. Sood who is the Director in the assessee companies. During the said operation, certain documents were found in his possession wherein it was recorded that during the block assessment period, Shri Sood was indulging in giving accommodation entries to various parties on commission basis. Some of such accommodation entries were represented under the head i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash available with me for these unaccounted transactions was advanced to Sh. S.K. Jain for obtaining cheques of equal amount in the form of share capital introduction in the companies as under: M/s Mahindra Finance Pvt. Ltd. - Receipt amount of Rs. 31,00,000/- shares allotted for Rs. 21,00,000/- balance Rs. 10,00,000/- refunded. M/s Mahindra Finance Pvt. Ltd. - Receipt of Rs. 23,00,000/- share allotted of Rs. 22,50,000/- Refunded - Rs. 50,000/-. M/s Mahindra Traders - Receipt of Rs. 10,00,000/- share allotment of Rs. 10,00,000/-. xxx xxx xxx The Share of capital amount of Rs. 66,00,000/- are also accommodation entries and no actual transaction of share capital introduction took place. The cash available with me for these unaccounted transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Assessment Year 2000-01. 7. The assessees went in appeals before the CIT (A) challenging the assessment order passed by the AO making additions on protective basis as aforesaid. The appeals were allowed and additions were deleted by the CIT (A). 8. The Revenue feeling aggrieved by the order of the CIT (A) preferred appeals before the Income Tax Appellate Tribunal (hereinafter referred to as „the Tribunal‟). The Tribunal has maintained the deletion on the ground that there cannot be protective assessment under Section 158BD of the Act. The entire discussion of the Tribunal on this aspect is located in para 4 of the impugned orders dated 26.10.2007, which reads as under: "4. We have heard the argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the basis of which the AO made the addition, Mr. Sood was engaged in providing accommodation entries in commission with Shri S.K. Jain in his own companies through loans, advance, gifts etc. Therefore, the issue was in respect of quantification of commission charges for such accommodation entries. The AO had estimated the commission @ 3%, but brought no basis and material in support of the same. On the contrary, the claim of Sh. P.K. Sood that commission charges to the extent of 0.5% to 0.75% was supported and corroborated from the seized records. The correctness of which was not in dispute. It was, thus, opined that when there was seized record with the AO and the same was used for computing undisclosed income, as per that record the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income may have been received either by A or B or by both together, it would be open to the relevant income-tax authorities to determine the said question by taking appropriate proceedings both against A and B. That being so, we do not think that Mr. Nambiar would be justified in resisting the enquiry which is proposed to be held by respondent No. 1 in pursuance of the impugned notice issued by him against the appellant." 13. Following the aforesaid judgment, Gauhati High Court in the case of Jagannath Bawri and Others Vs. Commissioner of Income Tax and Others [234 ITR 464] has explained the concept of protective assessment in the following manner: "As regards the contention of Ms. Hazarika, learned counsel for the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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