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TMI Blog2019 (2) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... ill the outcome of the proceedings arising from the substantive assessment. Additions made on account of commission income allegedly received by the assessee for giving accommodation entries - Held that:- We find that this issue is consequential to the issue relating to the addition made on protective basis on account of accommodation entries allegedly given by the assessee-company to the Mumbai based companies. Since the said issue is remitted back by us to the ld. CIT(Appeals), we also remit the consequential issue relating to addition on account of commission income back to the CIT(Appeals) for deciding the same afresh. Grounds No. 1 & 2 of the Revenue’s appeals for all the three years under consideration are accordingly treated as allowed for statistical purposes. Addition made on account of unexplained cash deposits found to be made in the Bank account of the assessee, which is involved in A.Y. 2005-06 and 2006-07 - Held that:- We find that the impugned cash deposits were claimed to be made by the assessee out of cash balances available in the cash book on the respective dates as well as the sale proceeds of shares and in his remand report submitted to the ld. CIT(Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted that he had got cash of equivalent amount from the Mumbai based Companies belonging to Shri Ketan Parekh Group and after depositing the said cash into the Bank account of the assessee-company, cheques were issued to the said Companies. He also furnished a list of cheques so issued against cash that had been received by him. Although Shri Pramod Sharma subsequently filed an affidavit retracting his statement, the Assessing Officer did not accept the same on the basis of the enquiries conducted by the Investigation Wing on a test-check basis, which revealed that cash was deposited in various Bank accounts in different stages. According to the Assessing Officer, this factual position substantiated the statement of Shri Pramod Sharma, Director of the assessee-company that cash was indeed received by the assessee-company in lieu of cheques given to various companies belonging to Ketan Parekh Group. He accordingly held that accommodation entries were given by the assessee-company to various Mumbai based companies belonging to Ketan Parekh Group and since the accommodation entries so given during the previous year relevant to A.Y. 2007-08 aggregated to ₹ 23,48,45,847/-, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. I have perused the relevant orders and considered the material placed on record. I find from the appeal folder that in course of the appellate proceedings, my learned predecessor tried to ascertain about the cases where substantive additions were made corresponding to the protective addition in the present case; and also, about the fate of the appeals in those cases. The Ld CIT(A) called for the report vide his letter dated 23-07-2009 which was followed by reminders dated 17-08-2010, 13-07-2011, 30-102013 and 19-11-2013. However, though a substantial period of 4 1/2 years has elapsed, nothing has been heard in this regard from the AO. In this factual background; given the facts of the case and the findings of the AO in his assessment order;' and also, the decisions of the Hon'ble Benches of the jurisdictional ITAT in similar cases involving identical facts and circumstances, the present appeals now being decided on the basis of the material available on record. I find that the AO has made the additions on the basis of the admission made by the director before the DDIT(Inv) which was later retracted. It is a settled legal proposition that a mere admission which is l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etracted was deleted by the jurisdictional ITAT in the assessment of such company. In these cases, the director of the company made admission regarding providing accommodation entry in lieu of cash which was later retracted. Though the AO made similar additions on account of unexplained cash and commission income in the case of the company, the same was deleted by the Ld CIT(A) as well as by the jurisdictional ITAT. The issues in the present appeal are thus covered by the orders of the Hon'ble Benches of the .jurisdictional ITAT wherein similar additions, made under identical facts and circumstances, were deleted. Respectfully following the decisions of the jurisdictional ITAT, it is to be held that the additions made by the AO on account of unexplained cash and commission income is neither sustainable in law nor on facts. The additions of ₹ 41,87,38,000/- and ₹ 83,74,760/- is directed to be deleted. Ground no 2 3 are allowed . For almost identical reasons as given in his impugned order for A.Y. 2005-06, the ld. CIT(Appeals) also deleted the similar additions made by the Assessing Officer to the total income of the assessee for A.Y. 2006-07 and 2007-08 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no adverse finding in the remand reports of the AO. The AO has categorically admitted that the bank statement, cash book and sales invoices were produced before him and that the cash deposits in the bank account were verifiable from the cash book. I am therefore of the considered view that such cash deposits in the bank account which were duly verifiable from the cash book of the assessee company could not be treated as its undisclosed income. The addition of ₹ 3,06,62,000/- is deleted. Ground no 4 is allowed. Ground no 5 is directed against the initiation of penalty proceedings u/s.271(1)(c) which is premature for adjudication at this stage. Hence, ground no 5 is dismissed. Ground no 6 is general in nature . For almost identical reasons as given in his impugned order for A.Y. 2005-06, the ld. CIT(Appeals) also held that the similar addition made by the Assessing Officer on account of unexplained cash deposits found to be made in the Bank accounts of the assessee for A.Y. 2006-07 was not sustainable. Accordingly he deleted these additions made by the Assessing Officer to the total income of the assessee for A.Ys. 2005-06 and 2006-07. Aggrieved by the orders of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment was disposed of by the appellate authority i.e. Tribunal vacating the protective assessment without waiting for the final outcome of the proceedings arising from the substantive assessment, which matter was pending in the Hon ble Supreme Court. The Hon ble Gujarat High Court held that the Tribunal was not justified in proceeding with the matter and in disposing of it instead of blocking it till the disposal of the matter pending in the Hon ble Supreme Court in order to bring it inconformity with the view of the Hon ble Supreme Court. The Hon ble Gujarat High Court accordingly directed the Tribunal to keep the matter alive and pending awaiting the decision of the Hon ble Supreme Court in the proceedings arising from the substantive assessment. 6. In the present case, the ld. CIT(Appeals) did not await the outcome of the proceedings arising from the substantive assessment and since the said information was not forthcoming even after a considerable period from the concerned assessing officer, he proceeded to dispose of the appeals arising from the protective assessments by his impugned orders and deleted the addition made on protective basis without awaiting the final outcome ..... X X X X Extracts X X X X X X X X Extracts X X X X
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