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TMI Blog2017 (11) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... 68 is required to me made in the hands of conduit companies which were merely used for providing accommodation entries - Decided in favour of assessee. - ITA No. 3422/Del/2014 - - - Dated:- 9-11-2017 - SH.N.K.SAINI, ACCOUNTANT MEMBER AND SH. K.N.CHARY, JUDICIAL MEMBER For The Appellant : Sh. R.S.Singhvi Sh. Satyajit Goyal, CA For The Respondent : Sh. Sampurnanand, Sr.DR ORDER PER K.N.CHARY, JUDICIAL MEMBER Aggrieved by the order dated 29.01.2014 in Appeal No.380/10-11/352 passing by the Commissioner of Income Tax (Appeal) [in short CIT(A) ]-XXXIII, New Delhi for 2008-09 Assessment Year, the assessee filed this appeal. 2. Briefly stated facts are that the assessee is a company and one of the group concerns of Sh. S.K.Gupta Group. For 2008-09 AY, they have filed return of income on 18.09.2008 declaring total income of ₹ 8,104/-. There was a survey operation on 20.11.2007 in Sh. S.K. Gupta Group of cases. During the survey and assessment proceedings one Sh. S.K.Gupta admitted that he had been providing accommodation entries to various persons through a large number of concerns effectively controlled by him. From perusal of the ledger accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvey was conducted in the Sh. S.K.Gupta Group of cases on 20.11.2007, during that time and also during the assessment proceedings, Sh. S.K.Gupta admitted that he had been providing accommodation entries to various persons including the assessee. It is also not in dispute that pursuant to the application of Sh. S.K.Gupta before the Income Tax Settlement Commission (in short ITSC ), ITSC was pleased to direct computation of this income in the case of Sh. S.K.Gupta. It is further submitted that out of 34 companies in respect of which the AO made addition u/s 68 of the Act, nine companies were granted relief by a Co-ordinate Bench of this Tribunal in the above batch of cases and page No.7 of the order of the Tribunal reads the names of all the 34 companies wherein vide Entry No.31, the assessee is also to be found. According to the Ld. AR in view of the finding of the Tribunal - to the effect that since credit entries in the case of conduit companies has been considered in the hands of Sh.S.K.Gupta by the order of Income tax Settlement Commission, no separate addition u/s 68 is required to me made in the hands of conduit companies which were merely used for providing accommodation ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt time employees are called as and when required to sign documents, cheque books etc. Sh. S.K. Gupta has also roped in his own relatives for operation of various bank accounts and for filing the income tax returns. It was seen that Sh. S.K. Gupta was controlling more than 35 companies from a small office premises without sufficient infrastructure or employees to carry out meaningful business activity in so many companies. Further, from the perusal of ledger accounts maintained in one of the laptops impounded during survey, it is noticed that a large amount of cash is deposited and cheques are issued on the same day/within few days to various parties from the accounts of the company controlled by him. As per enquiries carried out by the Investigation wing the assessee was found to have been using the bank accounts opened in different banks to route the entries through two to four accounts to vie the color of genuineness to these transactions. 13. Thus, the Assessing Officer himself has recorded the finding that the assessee company is one of the group concerns of S.K. Gupta group and Shri S.K. Gupta admitted that he had been providing accommodation entries to various p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is from the beneficiary who wanted to avail the accommodation entry and to whom cheques for accommodation entries were issued almost of the similar amount. The order of the Settlement Commission has become final because the Revenue has not challenged the order of the Settlement Commission before the Hon'ble Jurisdictional High Court. 14. That Hon'ble Jurisdictional High Court has considered the binding nature of the decision of the Settlement Commission in the case of Omaxe Ltd. Anr. (supra) and held as under:- Orders of Settlement Commission are final and conclusive as to matters stated therein. The matters necessarily could comprehend disputed questions, items or heads of income, disallowance, etc. or variants of it, but always with reference to a particular assessment year. In this case, the Settlement Commission was seized of asst. yr. 2006-07. Whilst exercising its authority over the application, the Commission concededly exercised the vast plenitude of its power or jurisdiction. The petitioner had made a disclosure in its application as it was duty-bound to. What is in controversy today is that the subsequent event of search and seizure operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard. The Assessing Officer had asked for the specific direction of the Additional CIT in respect of the group companies which has been mentioned by the Additional CIT in paragraph 2 of his order under Section 144A. After considering all the facts, the Additional Commissioner held it would be in the best interest of revenue to tax these transactions in the hands of beneficiaries and also Sh. S.K. Gupta, individual without making any additions on this account in the hands of conduit entities . We may point out that the direction of the Additional CIT is for various years running from AY 2004-05 to 2007-08. However, the ratio of the said direction would continue to be applicable for AY 2008-09 also because the facts remain the same. The Additional CIT has discussed in detail that when the Revenue is taking action in the hands of the beneficiaries, if the addition is made in the case of conduit entities, it will dilute the case of the Department against the beneficiaries. The order of the Additional CIT under Section 144A is binding on the Assessing Officer which is evident from Section 144A which reads as under:- 144A. A Joint Commissioner may, on his own motion or on a re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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