9911796707
TMI Blog2020 (1) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... has been added, and give relief in the case of this assessee for the AY 2007-08. Appeals of the assessee are allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2001-02 assessment year are being extracted for ready-reference:- "A search & seizure action was conducted on 12-12-2006 at business and residential premises of Shri. S.K. Gupta alongwith various concerns in which he and his family members were interested. Similarly action u/s 132 of IT Act, 1961 was conducted in the case of various companies owned or controlled by him and also in the case of different individuals connected with the said companies. This is one of such cases covered under search & seizure action. Consequent to search action the case was centralized with this office and as such notice u/s 153A of IT Act 1961 was issued to the assessee on 25-2-2008. 1.1.Background of the case . While conducting discreet inquiries, the investigation wing gathered that Shri S.K.Gupta a Chartered Account by profession, is running various companies from a premises of "Trump and Gates" situated at H-108, 2 floor, New Asiatic Building. Connaught Place, New Delhi and also from the premises of his firm namely M/s Gupta & Rakesh Associates at 231, Gulmohar Enclave, New Delhi. In the course of the search operation, it was reported by the investigation wing that a large numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious entities for the sake of tax evasion. Such biils and invoices were found and seized from the premises covered u/s 132 of the Act. (iv). No other evidence was found during search indicating any such actual services rendered by the appellant or other companies as claimed. (v). Shri S.K. Gupta in various statements recorded on different dates between December, 2006 to December, 2008 both before the officers of Investigation Wing and in post search inquiries and before the Assessing Officer, admitted in detail his modus operandi of providing accommodation bills through the appellant company and other companies in lieu of cheques received and cash returned to the beneficiaries. (vi). Evidence of duplicate set of books of accounts, hand written cash books and ledger accounts, various cheque books and blank cheques signed by various authorized signatories/Directors of the appellant company and other companies were found and seized from Shri. S.K. Gupta's premises. Some of these Directors/Authorized Signatories were found to be employees, relatives or friends of Sh. S.K.Gupta. (vii) The Assessing Officer has given elaborate and adequate opportunities to the appellant com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases a general agreement, without any supporting evidences of software development. Even assessee had no supporting documents of purchase or outsourcing, where from it could issue sale bills to these corporates or other desirous companies/concerns. (i) The assessee has failed to correlate its surrender income in different assessment years, with the actual deficiencies of the business relevant to accommodation entry business on account of providing accommodation sale bills, expenses bills in the form of job work charges, advertisement charges. web designing charges-and providing investment entries. (ii) The assessee has intact indulged in accommodation enteries business and has not done any genuine business. So the income of the assessee from the accommodation entry business is computed @ 2% net rate on sale turnover and investment turnover in view of the assessee's statement coupled with prevalent market condition for such entries. No further expenses are to be allowed, as this is the net rate. 5. With these remarks, the total income is computed as under: With these remarks income of the assessee is computed as under: (i) Total income as per 153 A return ₹ 19,060 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f"Trump and Gates" situated at H-108, 2nd floor, New Asiatic Building, Connaught Place, New Delhi and also from the premises of his firm namely M/s Gupta & Rakesh Associates at 231, Gulmohar Enclave, New Delhi, which were both covered during search and seizure operation u/s. 132 of the Act by the Investigation Wing of the Income Tax Department. In the various statements of Sh. SK Gupta recorded on various dates both before the Officers of the Investigation Wing and in post search enquiries before the AO, he admitted in detail, his modus operandi of providing accommodation bills through the assessee company and another companies in lieu of cheque received and cash return to the beneficiaries. There was also seizure of duplicate set of books of accounts, cheques signed by various authorised signatories / Directors of the assessee company and other companies (which were found to be employees, relatives or friends of Sh. SK Gupta) from Shri S.K. Gupta's premises. From the above, AO observed that it became abundantly clear that the assessee company, in fact, indulged in accommodation entries business and did not do any genuine business. All the sale and purchases etc. booked in these co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe of accommodation entries was to the tune of 1.5% to 2.0% out of which I have to incur our normal expense on a/c of salary, rent, bank charges, conveyers, telephone, water and electricity." 9. On the basis of statements as well as prevalent market condition, the AO has estimated the income @ 2% without allowing any amount for the expenditure. Ld. CIT(A) has affirmed the said. 10. In this regard Ld. Counsel of the assessee has pleaded for allowance of expenditure incurred to earn the income. We find that when addition is being made on the basis of statement, the statement has to be relied in full . Revenue cannot choose to rely on one part of the statement and ignore the rest of the statement in the absence of any cogent material. This is supported by the common law maxim of approbate and reprobate. 11. In this case the assessee company's Director has agreed that the commission was to the tune of 1.5% to 2%. Hence, estimation of commission income @ 2% cannot be disputed. However, at the same time it has also been submitted in the same statement that the assessee has to incur the expenditure on account of salary, rent bank charges, conveyers, telephone, water and electricity. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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