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TMI Blog2013 (5) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... law, the Ld. CIT (A) was incorrect and unjustified in dismissing the appeal of the assessee. (2) On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and unjustified in holding that the penalty u/s 271(1)(c) has been rightly levied by the AO. (3) On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and unjustified in holding that explanation (1) to section 271(1)(c) is applicable in the case of the assessee. (4) On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and unjustified in holding that once an assessment has been done by estimating the income or otherwise the assessed income must be held to be the income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case are as under. The assessee is a Chartered Accountant. A survey operation u/s 133A(1) was carried out at the premises of the assessee where incriminating documents were found showing that assessee was engaged in giving bogus/accommodation entries. These accommodation/bogus entries were provided through various concerns run and controlled by assessee. The income of the assessee was reassessed and commission income on the bogus/accommodation entries computed @ 0.50% on the value of bogus transactions was added. The addition was partly sustained by the CIT (A) @ 0.40% of the value of bogus entries. The addition was finally upheld by the ITAT @ 0.50% of the total value of bogus entries given by the various concerns run for this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorporate companies with the Registrar of Companies. These companies were enjoying separate independent status as per the Income-tax Act, 1961. The Directors of these companies were also different and were not related to the assessee. These companies were separately assessed and the assessee was also assessed for the commission income derived by giving the bogus accommodation entries. Thus, there was assessment of the income in two hands - one in the hands of the assessee and the other in the hands of the companies which were separate legal entities. The companies are artificial jurisdictional persons, therefore, assessee cannot be held to be responsible for the all wrong-doings by these companies and penalty cannot be levied on the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Shyaam Samvida Ltd. - 111 TTJ 540 for the proposition that merely books of account rejected then it cannot be a case for levy of penalty. 4. On the other hand, the ld. DR relied on the orders of the authorities below and submitted that the order of the Assessing Officer clearly records the satisfaction for initiation of penalty u/s 271(1)(c). From the order itself, the satisfaction for initiation of penalty is discernible. The reading of the whole order itself shows that satisfaction was existed and was recorded while making the assessment. Ld. DR also submitted that as per provisions of section 271(1B) even when the order contains direction for initiation of penalty proceedings under clause (c) of sub-section (1) of section 271, such an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the order of the CIT (A). 5. We have heard both the sides on the issue and also considered the facts of the case and the case laws relied upon. The assessee is a chartered accountant and it has been conclusively established that he was running various concerns/companies for providing bogus/accommodation entries. This fact has also been admitted by the assessee himself in the statement recorded. The various companies floated by the assessee were used for providing accommodation entries. It is established beyond any doubt that he was engaged in providing bogus/accommodation entries. The ITAT in its order dated 12.11.2008 has conclusively added the income @ 0.50% on the value of the bogus/accommodation entries in the hands of assessee. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as any other assessment. Hon'ble Allahabad High Court in the case of ITO vs. R.K. Bros. reported in 87 ITD 649 (All.) has held that levy of penalty u/s 271(1)(c) depends upon the facts and circumstances of each case and penalty can be levied where the income has been estimated. In this case, the Department has proved beyond any doubt that assessee was engaged in providing bogus/accommodation entry, was earning the income by way of commission on these transactions and such income has not been disclosed in the return of income in the relevant Assessment Years. The assessee has admitted this fact before the income-tax authorities in the statements. Therefore, in our considered view, the department has proved that assessee has not disclosed al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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