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TMI Blog2022 (7) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee on protective basis. Commission income at the rate of 2.5% of the accommodation entry - CIT-A deleted the addition - HELD THAT:- We do not find any reason to not to reverse the finding of the learned CIT (A) in deleting the commission income at the rate of 2.5% of the accommodation entry. Assessee is undisputedly an accommodation entry provider and therefore, the commission income requires to be added in the hands of the assessee. Accordingly, ground no. 3 of the appeal is allowed. - ITA No. 2120/Mum/2019 And ITA No. 1877/Mum/2019 - - - Dated:- 26-7-2022 - Shri Prashant Maharishi, AM And Shri Pavan Kumar Gadale, JM For the Assessee : None For the Revenue : Shri Manoj Kumar, CIT DR ORDER PER PRASHANT MAHARISHI, AM: 01. These are the two appeals of different assessee but involving common issue , therefore same is decided by this common order. 02. ITA No. 2120/Mum/2019 in case of Vishnu Textile Trade P. Ltd. is field by the Dy. Commissioner of Income Tax, Central Circle 3(2), (the learned Assessing Officer) Mumbai for A.Y. 2011-12 against the order of learned Commissioner of Income-tax (Appeals)-51, Mumbai [the learned CIT (A)]. The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rikosh Fashions Pvt. Ltd. 1,85,00,000/- 2. Bhagwat Textiles Pvt. Ltd. 1,00,00,000/- 3. First winner Textiles (India) Pvt. Ltd. 1,75,00,000/- 4. Solitaire Texfab Traders Textiles Pvt. Ltd. 25,00,000/- 5. Starwood Exports Pvt. Ltd. 25,00,000/- Total 5,10,00,000/- 04. The amount invested was ₹5.10 crores. As per the statements this was a bogus share capital issued to various companies. Accordingly, the learned Assessing Officer made an addition on the above sum and further, added commission at the rate of 2.5%. Accordingly, total income of the assessee was assessed at ₹5,28,50,650/-. 05. Assessee approached the learned CIT (A). The learned CIT (A) analyze all the five recipients of the benefit and deleted the addition of ₹5.10 crores as well as commission thereon. The reasons given by the learned CIT (A) are as under:- 5.3 The contentions of the assessee have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought to the notice that as per the Annual accounts of the assessee, the investment made by the assessee in M/s Starwood Exports P Ltd is of only Rs Nil. Thus, the assessee has contended that as against the substantive and corresponding protective additions of Rs. 25,00,000/-, the AO should have made substantive and protective additions of Rs Nil. The AO is also directed to verify this claim of the assessee and adopt the correct figure in respect of the protective addition in respect of M/s Starwood Exports P Ltd and also take appropriate action if required in the hands of M/s Starwood Exports P Ltd. wherein the substantive addition has been made. 5.3.5 Similarly, the substantive addition of Rs. 1,85,00,000/- in M/s Rikosh Fashions Ltd., the same has been adjudicated vide my order in appeal No. CIT(A)-51/IT-355/16-17 dated 20.11.2018. The operative part of the said order is from Para 6.3.1 to 6.3.26 at pages 13 to 25. In the said appellate order, the substantive additions u/s 68 made of Rs 4,75,00,000/- have been confirmed which includes the addition related to our assessee of Rs 50,00,000/-. However, the AO has made protective addition u/s 68 of Rs 1,85,00,000/- in the hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) 51/IT-354/16-17 dated 20.11.2018, Appeal No. CIT(A)-51/IT-328/16-17 dated 03.11.2017, Appeal No.CIT(A)-51/IT-330/16-17 dated 03.11.2017, Appeal No.CIT(A)-51/IT-355/16-17 dated 20.11.2018 and Appeal No.CIT(A)-51/IT 352/16-17 dated 03.11.2017. Therefore, in principle, the action of the AO in making the said protective addition u/s 68 cannot be sustained. 5.3.7 Similarly, the protective addition made by the AO u/s 69C of Rs 12,75,000/- being the unaccounted estimated commission @ 2.5% on the accommodation entry of the said investment of Rs 5,10,00,000/- also cannot be sustained in principle considering that the protective addition of unexplained investment itself has in principle been deleted and also because the corresponding substantive additions made u/s 69C by the AO in the hands of M/s Solitaire Texfab Traders Textiles P Ltd, M/s Bhagwat Textiles P Ltd., M/s Starwood Exports P Ltd., M/s Rikosh Fashions P Ltd and M/s First Winner Textiles (India) P Ltd on substantive basis have been confirmed vide my orders in Appeal No CIT(A)-51/IT-354/16-17 dated 20.11.2018, Appeal No. CIT(A) 51/IT-328/16-17 dated 03.11.2017, Appeal No.CIT(A)-51/IT-330/16-17 dated 03.11.2017, Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion income requires to be added in the hands of the assessee. Accordingly, ground no. 3 of the appeal is allowed. 012. Accordingly, appeal filed by the learned Assessing Officer is partly allowed. ITA No. 1877/Mum/2019 Assessment Year: 2012-13 In the case of DCIT Vs. VARAD Vinayak Textiles Pvt. Ltd. 013. This appeal is by the learned Assessing Officer against the order of the learned CIT (A)-15, Mumbai dated 29th January, 2019, wherein the appeal filed by the assessee against the order passed by learned Assessing Officer under Section 143(3) of the Act read with section 153 of the Act dated 29th December, 2016 wherein assessee was found to be an accommodation entry provider and therefore, the addition of ₹7 crores as well as commission income at the rate of 2.5% amounting to ₹17,50,000/- were added in the hands of the assessee. The original return filed by the assessee at ₹3,48,130/- on 28th September, 2012. 014. The facts of this case are identical to the facts in ITA No. 2120/Mum/2019. 015. Before the learned CIT (A), the addition in the hands of the assessee with respect to the accommodation entry, made on protective basis stood delet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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