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TMI Blog2021 (12) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... venue is liable to be dismissed. - ITA No. 2365/del/2016 - - - Dated:- 27-12-2021 - SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER And SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER Assessee by : Ms. Hasneeta Matta Revenue by : Sh. such Satpal Gulati, CIT-DR ORDER PER K. NARASIMHA CHARY, JM Aggrieved by the order dated 5/2/2016 passed by the learned Commissioner of Income Tax (Appeals)-17, New Delhi ( Ld. CIT(A) ) in the case of Sh. Rakesh Relan ( the assessee ), for the assessment year 2002- 03, assessee preferred this appeal. 2. Brief facts of the case, necessary for disposal of this appeal, are that the assessee is a stock and share broker and member of Delhi stock exchange. For the assessment year 2002-03, by order dated 31/3/2002 passed under section 147/143(3) of the Income Tax Act, 1961 (for short the Act ), the learned Assessing Officer found that the assessee was providing accommodation entries to the tune of ₹ 19,86,06,566/-to various persons during the financial year 2001-02. Before the assessing officer, assessee submitted that he was earning brokerage at the rate of ₹ 0.25 percent on the said amount and offered a sum of ₹ 5 Lacs fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % orfor the Ld. CIT(A) to say for 0.75%, the order of the Tribunal remitting the case back to the file of the learned Assessing Officer for a fresh determination of the rate of commission after examining the parties, is without any blemish and does not call for any interference. Hon ble High Court called upon the assessee to examine the parties to whom the accommodation entries were given for ascertaining the exact rate of commission which was received by the assessee from such parties, and if the assessee fails to prove that he had received 0.25% only as a commission from various parties, adverse inference could always be drawn against him. 6. Pursuant to the orders of remand, learned Assessing Officer issued notice under section 143(2) of the Act and called upon the assessee to produce evidence to support the claim of the assessee that the rate of commission was only 0.25% and also to prove the identity/creditworthiness/genuineness of the deposits, failing which the entire unexplained cash credit will be added to the income of the assessee. Assessee pleaded that the time for reopening of the case under section 147 of the Act was barred by limitation and that the evidence is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing officer could not bring on record any material to establish the fact that those are not accommodation entries but the deposits in the assessee s account representing his own unaccounted money, it has to be concluded that the assessee was engaged only in giving accommodation entries to various parties and there is no justification for adding the entire deposits to the income of the assessee under section 68 of the Act. Ld. CIT(A), on the question of rate of commission, observed that going by the decision of the Tribunal in the case of JRD stockbrokers private limited vs. ACIT 124 TTJ (del) 566, rate of commission at 0.60% would be reasonable and on that remise he restricted the addition to ₹ 11,93,559/-. 10. Revenue is, therefore, before us in this appeal contending that the direction of the Tribunal to the learned Assessing Officer was to make addition under section 68 of the Act the rate of commission at 0.25%, subject to the restriction of the addition to ₹ 59.70 Lacs, and therefore the Ld. CIT(A) is not justified in holding that the assessee was receiving only brokerage/commission are that the entire deposits in his account or not to be added to the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys be drawn against him. 13. It is, therefore, clear that in the 1st round of litigation, it has been the case of both the parties that the assessee was an accommodation entry provider receiving commission. Only dispute was in respect of the quantum of commission. Tribunal, while remaining the matter, directed the assessing officer to have a fresh look at this issue after examining the parties, and if the assessee fails to prove the rate of commission, let there be addition under section 68 of the Act, but subject to the restriction of ₹ 59.7 Lacs. 14. It is argued by the Ld. AR, and according to us rightly so, that the order of the Tribunal merges with the order of the Hon ble High Court wherein the Hon ble High Court directed the assessee to examine the parties to whom the accommodation entries were given for ascertaining the exact rate of commission which was received by the assessee from such parties, and if the assessee was unable to prove that he had received 0.25% only as commission from various parties, adverse inference can always be drawn against him. In the light of the directions of the Hon ble High Court, is not open for the Revenue to contend that the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im should not have been understood by the learned Assessing Officer to mean that instead of adverse inference in respect of rate of commission, on the failure of assessee to prove the aspect of commission, adverse inference as to the treatment of entire deposits should be drawn. As a matter of fact, there was no material before the learned Assessing Officer to treat so. Context provides the meaning, purpose and aspect of adverse inference. 18. Hon ble High Court took cognizance of the fact that the entire dispute in this matter revolves around the question of rate of commission and directed the assessee to examine the parties to whom the accommodation entries were given for ascertaining the exact rate of commission, which was received by the assessee, and in case of any failure of the assessee to prove that he received only 0.25%, as commission from various parties, adverse inference can always be drawn against him. In these circumstances, we are of the considered opinion that after the order of the Hon ble High Court, the entire dispute in this matter is confined to the rate of commission only and on that aspect, we are of the considered opinion that the Ld. CIT(A) is right in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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