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TMI Blog2017 (11) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... t for which he was also getting certain commission from Shri Sanjay Kumar Garg and since rate of commission for accommodation entry has been determined and estimated @ 0.20% in the case of Shri Sanjay Kumar Garg, then same rate of commission will be applied in the case of the assessee also and therefore we do not find any infirmity in the order of the Ld. CIT(A) while confirming the rate of commission of 0.20% on the total deposits and accordingly ground No.1 as raised by the assessee is dismissed. Separate addition on account of commission which has been partly allowed by the Ld. CIT(A) - No reason to sustain the further commission income, because, once we have held that assessee’s commission on the entire cash deposits which is part of total turnover is to be taken @ 0.20%, then there is no requirement for making separate addition again on commission for giving accommodation entry. Accordingly, we delete the entire addition of commission of ₹ 15,07,884/-. Ground No. 2 of the revenue is dismissed. No penalty u/s 271(1)(c) is leviable, because in the quantum proceedings, we have directed that the addition of cash deposits on protective basis cannot be added and only add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The brief facts qua the issue raised in both the appeals are that, assessee is an individual and is proprietor of M/s. GRS Co. The nature of business shown as per the audit report is, trading and commission agent of food grains and has shown income from Arhat and interest from bank. The net profit shown in the return of income filed on 1.11.2004 from the business was ₹ 75,727/-. A survey action u/s 133A was conducted on 12.7.2004, in the case of Shri Sanjay Kumar Garg, wherein it was found by the Investigation Wing of the department that Shri Sanjay Kumar Garg through his various dummy entities and individuals was carrying out accommodation entry activities to various food grain merchant on mass scale. The modus-operandi which was unearthed was that, cash was received from food grain merchant which was deposited in the bank accounts of his bogus concerns and dubious individuals against which cheques/ pay orders/ demand drafts were issued in favour of such beneficiaries. The assessee s proprietorship concern, M/s GRS Co. was part of such dubious entities pertaining to Shri Sanjay Kumar Garg. The name of such entities used by Shri Sanjay Kumar Garg for his accommo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 133A in his case, as elaborately discussed above, and followed by the local enquiries made, the cash deposits totalling ₹ 5,56,85,000/- during F.Y. 2003-04 pertaining to Asstt. year 2004- 05 under consideration is treated as unexplained income. The assessee has failed to adduce any evidence regarding the nature source of cash entries totalling ₹ 5,56,85,0000/- in his bank account ad detailed in Question No. 18. As such these are liable to be treated as his unexplained income from undisclosed sources. However, in view of the fact that Shri Sanjay Kumar Garg, being the actual account operator in the back ground, this income shall be considered in his hands on substantive basis and on protective basis in the hands of the assessee. As assessee has failed to disclose this income of ₹ 5,56,85,0000/- for taxation, the same is treated as un explained income and as such there is sufficient reason to believe that assessee has concealed particulars of this income, thereby attracting to penalty provisions u/s 271(1)(c) of I.T. Act 1961, which is being initiated. ( Addition : ₹ 5,56,85,000/-) 6. Apart from that A.O. has further added amount of ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of providing accommodation entries and, therefore, the amounts deposited in the account of dummy concerns was to be treated as total receipts on which commission was to be determined. Therefore, we are in agreement with the view of the Ld. CIT commission was to be determined. Therefore, we are in agreement with the view of the Ld. CIT (A) that only commission can be determined on the deposits made in the bank accounts of the dummy concerns. Therefore, we do not find any infirmity in the order passed by the Ld. CIT (A) that the amount deposited in the account of dummy concerns cannot be treated as income of the assessee. Therefore, the Ld. CIT (A), in our considered opinion, is justified in treating the cash deposited in various bank accounts controlled and operated by the assessee as the turnover of the accommodation entry business and commission income has to be estimated thereon. Respectfully following the Hon ble ITAT order, I hold that only commission can be determined on the deposits made in the bank accounts of the appellant. There is no dispute that no commission would be charged on such dealings as the appellant would not have done it free or on charity basis wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed. 10. So far as the issue relating to applicability of 0.20% as contested by the assessee, the Ld. Counsel for the assessee contended that if the entire deposits have been considered by the department in the hands of Shri Sanjay Kumar Gang, wherein for the entire deposits income @ 0.20% s commission has been applied, then no separate addition should be made in the hands of the assessee. However we are unable to appreciate such contention, because the assessee was provided the accommodation entry through his bank account for which he was also getting certain commission from Shri Sanjay Kumar Garg and since rate of commission for accommodation entry has been determined and estimated @ 0.20% in the case of Shri Sanjay Kumar Garg, then same rate of commission will be applied in the case of the assessee also and therefore we do not find any infirmity in the order of the Ld. CIT(A) while confirming the rate of commission of 0.20% on the total deposits and accordingly ground No.1 as raised by the assessee is dismissed. 11. So far as the separate addition on account of commission of ₹ 15,07,884/- which has been partly allowed by the Ld. CIT(A), we do not find any reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... protective basis and part of the commission deleted by the Ld. CIT(A). 15. So far as the revenue s appeal is concerned same in view of our finding given above are to be dismissed, as no penalty u/s 271(1)(c) is leviable, because in the quantum proceedings, we have directed that the addition of cash deposits on protective basis cannot be added and only addition sustained is with regard to 0.20% by way of commission on such cash deposits in the hands of the both assessees. Accordingly, the revenue s appeals are dismissed. 16. Now so far as the levy of penalty on the addition sustained by us on account of commission income estimated @ 0.20%, we hold that no penalty u/s 271(1)(c) is leviable for the reason that, admittedly the entire deposits have been considered in the hands of Shri Sanjay Kumar Garg and 0.20% has been applied in his case on the deposits which also includes the deposits in the case of these two assessees also. Addition has been sustained by us on the ground that these assessees were paid some commission by Shri Sanjay Kumar Garg and such commission too should be estimated @ 0.20%. Under these facts and circumstances, where addition has been made purely on estima ..... X X X X Extracts X X X X X X X X Extracts X X X X
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