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TMI Blog2020 (1) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... o restore this issue to the ld. CIT(A) for deciding afresh after verification of documentary evidence, if any, which shall be produced by the assessee to substantiate its claim that it has rotated money of the beneficiaries and provided accommodation entries to the beneficiaries against certain commission only. The assessee should produce those beneficiaries before the Assessing Officer in support of its claim of having engaged only in providing accommodation entries to the beneficiaries. It is needless to mention that both the parties, i.e., the assessee and Assessing Officer shall be provided adequate opportunity of being heard. - Decided in favour of revenue for statistical purposes. - ITA No.2449/Del/2015 - - - Dated:- 21-1-2020 - Shri Bhavnesh Saini, Judicial Member And Shri O.P. Kant, Accountant Member For the Appellant : Ms. Rakhi Vimal, Sr. DR For the Respondent : None ORDER PER O.P. KANT, AM: This appeal has been preferred by the Revenue against the order dated 12/02/2015 passed by the Ld. Commissioner of Income-tax (Appeals)-5, New Delhi [in short the Ld. CIT(A) ] f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice under section 148 of the Act on 01/04/2005, which was served at the last known address by way of registered post. The assessee did not respond to the notice. The subsequent notices were issued under section 143(2) and 142(1) of the Act were also remained non-complied. The Assessing Officer in the assessment order has given details of the notices sent along with the remark of non-compliance. In view of non-compliance, the Assessing Officer made addition for unexplained cash deposited in bank, unexplained advances to Akariti International Inc. and unexplained investment in shares and assessed the total income at ₹ 4,61,64,660/-, observing as under: From the above facts of the case, it is noted that the assessee is avoiding compliance of statutory notices, therefore penalty proceedings u/s 271(1)(b) are separately initiated in this case. In this case, information regarding loan advanced by the assessee was received from Add!. CIT, Range-20, New Delhi. In the letter of the Addl. CIT, Range-20, New Delhi, it is mentioned that on 6.1.2004 a survey operation u/s 133A was conducted in the case of M/s Aakriti International Inc, 4/5, Double S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cash amount deposited in the above account comes at ₹ 27493000/-. Similarly, a cash amounting to ₹ 14859500/- was also deposited in account no. 24624 held with State Bank of Bikaner and Jaipur, New Rohtak Road, New Delhi. Thus, the total of above cash amount deposited in both the accounts comes at ₹ 42352500/-. In this case, no one has attended to the assessment proceedings explain the source of above cash amount credited in these bank accounts, therefore in absence of any supporting evidence, it is considered that the cash deposited in these accounts belongs to the assessee and it is the income of the assessee earned during the year from its undisclosed sources of income which is not declared in its return of income therefore this amount of ₹ 42352500/- is added back in the taxable income of the assessee u/s 68 of the IT Act, 1961. Thus, an addition of ₹ 42352500/- is made in the taxable income of the assessee. In addition to the above, an information was also received from the DCIT, Circle 15(1), New Delhi that during the course of assessment proceedings of M/s Rim.zim Valley Products (P) L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal taxable income ₹ 4,61,64,660/- 4. Before the Ld. CIT(A), no compliance was made by the assessee except relying on the other case of M/s. Tarun Goel (ITA No.4636 4637/Del/2001 for assessment year 2003-04 and 2004-05) wherein the Tribunal restored the matter back for deciding the peak credit for addition. The Ld. CIT(A) has reproduced the direction of the Tribunal in said case and thereafter, keeping in view the statement of Sh. Mahesh Garg (the person who operated the assessee-company for providing entries) and the Director, Sh. Anil Sharma, he estimated 1% of the turnover as commission income. 5. The Ld. Departmental Representative submitted that the Ld. CIT(A) has estimated 1% income of the transactions, without any evidence on record to substantiate that all the transactions were carried out by the assessee against commission income. She submitted that in the case of Tarun Goyal (supra), the Tribunal laid the burden of proof to demonstrate the chain of transaction, the layering indulged by him, and to prove each credit in the books of each assessee. According to her, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal. Under these circumstances, it would not be possible to have in over all view of the matter and eliminate chain /multiple transaction, for arriving at the correct assessable amount. Thus we have no other alternative but to set aside all these appeals to the file of the AO for fresh adjudication in accordance with law. 23. The AO shall after examining the evidence submitted by the assessee, consider all the cases together and; a) Restrict the addition u/s 68 to only the peak unexplained credit in each case, after elimination circular transaction. b) To eliminate taxation of the same amount multiple times, due to the chain transaction which resulted due to layering indulged by the assessee. c) Consider the material on record and the precedence available on the issue and determine the percentage of commission, which the assessee would have earned and bring the same to tax. 24. Before parting we make it clear that the burden of proof lay on the assessee. It is for the assessee to demonstrate the chain of transaction, the layering indulged by him, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us Cash Credits/Entry Provider activities. Considering the overall circumstances, and business of appellant company. I estimate net income of the company @ 1% of ₹ 4,23,52,500/- (which includes share application money of ₹ 15,00,000/- and loans and advances of ₹ 23,02,268/- = ₹ 4,23,525/- for this A.Y. 2003-04. 6.1 Though, the Ld. CIT(A) has relied on the statement of persons before the Investigation Wing but the assessee has not produced any evidences before the ld. CIT(A) or before the Assessing Officer to corroborate those statements that the assessee company was engaged in providing only accommodation entries. The assessee-company has not provided any affidavits from the beneficiary companies to support its claim of being engaged in providing accommodation entries. The primary onus under section 68 of the Act is on the assessee to discharge and explain the nature and source of the entries in books of account. In our opinion, estimating the income at the rate of 1% presuming that the assessee was engaged in providing only accommodation entries against commission by the Ld. CIT(A) is not just ..... X X X X Extracts X X X X X X X X Extracts X X X X
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