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TMI Blog2020 (5) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... d owing to the Explanation III to Section 148 of the Income Tax Act, 1961 introduce w.e.f. 01.04.1989 by the Finance Act, 2009 empowers the Assessing Officer to make addition of any other escaped income for the assessment year which may have come to his notice during the assessment proceedings. He strongly relied on the orders of the authorities below. 5. Heard the arguments of both the parties and perused the material available on record. 6. The reasons recorded by the Assessing Officer are as under: "The Directorate of Income Tax (Investigation), New Delhi has carried out investigation in the cases of certain group of persons who were providing accommodation entries. These enquiries were initiated to probe into some bank accounts which were used to issue cheques to entry seekers or beneficiaries against cash paid by them to the entry operators. Such a camouflaged transaction came to light during the course of Survey in the case of M/s. Gurcharan Jewellers whose proprietor Shri Ashok Kumar Chauhan had admitted to have taken cheques under the garb of gifts after giving cash to the entry operator. Probe was initiated into the accounts which were used to provide these entries. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n blank gift deeds, cheque books, share application money etc. In fact these persons signed all types of papers they were asked to sign. They were made directors of companies, partners of firms and proprietor of different concerns solely for operation of these accounts. Actually, many of them were not even aware of the tax implications etc. Their only concern was with the few thousand rupees given to them by the entry operators. 3. Summing up, the report as a result of these extensive enquiries carried out by the D.I.T. (Inv.), New Delhi has assailed genuineness of transactions, whether shown by beneficiaries as inflow of Share Capital/ loan or receipt of Gifts or consideration for sale- purchase. It has also dealt a body blow to the creditworthiness of the persons/persons controlling the concerns who have given these credit entries/share capital/gifts/sale consideration as they have been seen to be men of no means. 4. In the instant case of the assessee, M/S Hopewin Admark & Consultancy Services Pvt. Ltd. the following credits have been shown in the bank account: Bank of the Assessee Branch of the Bank Instrument No. Amount Date Credit entry coming from the account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the accommodation entries to the tune of Rs. 35,50,000/-. On perusal of the return filed by the assessee it has been observed that the assessee has received fresh share application money of Rs. 10.5 Lacs and made a fresh investment of Rs. 10 lacs and shown service charges received of Rs. 6.3 Lacs and sales of Rs. 9.83 Lacs and claimed expenditure of Rs. 16.66 Lacs.. The assessee has also reduced its current liabilities by Rs. 7.09 Lacs. The assessee has thus helps various beneficiaries in providing accommodation entries in relation to capital & expenses. Since all these transactions are sham transaction and has been done for providing accommodation entries on which the assessee has earned the commission but has not reflected the same it its books of account. The lenders in these cases have been proved to be men/parties of no creditworthiness. I therefore have reasons to believe that this amount of Rs. 95.88 Lacs represents income of the assessee chargeable to tax and the commission on this amount which has escaped assessment for A.Y. 04-05. The necessary approval u/s 151(2) may kindly be accorded for issue u/s 148 of the income Tax Act, 1961 for A.Y. 04-05." 7. From the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, the addition made by the AO on account of the share capital of Rs. 10,50,000/- received from various individuals namely, Harish Aggarwal, Parmanand Bhardwaj, Suvan Agro Enterprises Pvt. Ltd. and Topchem India Pvt. Ltd. 9. The AO has calculated an amount of Rs. 95.88 lakhs as representing the income of the assessee chargeable to tax and the commission on this amount has escaped assessment (last line of para 4.2 of reasons). This clearly proves that the mind of the Assessing Officer revolved only on the commission income. Even if, it is assumed that the AO has considered an amount of Rs. 95.88 lakhs as income escaped, we find that this has been derived by the AO by adding up amount of the entry provided, amount of the share application received, amount of the fresh investment, service charges received, sales, expenditure and reduction of liabilities. With great pain, we have to hold at this point that the Assessing Officer has taken the debits, credits income expenditure, the liabilities expenses altogether added up and considered it as an escapement of income. The initial assumption of the AO that the assessee has not accounted the commission income being a conduit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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