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TMI Blog2022 (10) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation letters did not have details of name, PAN, etc of the persons, who have signed them. We further observe that some signature in the said confirmation letters were found to be identical with that of others. On this note, we direct the Assessing Officer to make a thorough enquiry pertaining to the said additional evidences to be furnished by the assessee and also to examine the genuineness of the persons furnishing the confirmation letters. With these observations, we remand this issue to the file of the Assessing Officer for admitting additional evidences and for considering this issue on merits based on the submission of the assessee. We also direct the Assessing Officer to consider on merits as to how 2% commission on the estimated sales has been arrived at by the Assessing Officer, in case the submission of the assessee on additional evidence is not to the satisfaction of the Assessing Officer. This ground of appeal is allowed, for statistical purpose. Disallowance of deduction claimed under Chapter VIA - AR contended that the donation made to charitable trust was disallowed for want of documentary evidence by the Assessing Officer - HELD THAT:- In the circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61,58,90,510 5. It was observed by the Assessing Officer that the said purchases made by the assessee pertaining to the parties referred to above are bogus parties as per the enquiries conducted by the Sales-tax Department, Maharashtra. The same sellers were appearing in the official website of the Sales-tax Department as hawala dealers, who were in the business of providing bogus bills. The notices under section 133(6) sent to the concerned persons were also returned unserved in some cases. Upon enquiry at the premises of M/s KRC Trading Pvt Ltd, the Assessing Officer observed that there was no such party existing at the given address. The Assessing Officer also stated that on verification of the bank statements of these parties, it is evidenced that there has been layering of amounts in various accounts resulting in cash withdrawals in one or the other account. From the said transactions, the Assessing Officer concluded that there was no actual business transaction carried out in these companies. The Assessing Officer has gone further in making independent enquiries related to 16 parties including M/s KRC Trading Co. Pvt Ltd in which the assessee has shown huge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchases and sale and due to lack of maintenance of proper records, the Assessing Officer rejected the assessee s books of account as per the provisions of section 145(3) of the I.T. Act. The Assessing Officer further estimated 2% on the accommodation entries provided by the assessee by rejecting the claim of Shri Rajesh Mehta, director of the assessee company, who stated that commission @1% was only received for such accommodation entries. The Assessing Officer rejected the claim of 1% commission on the ground that the assessee company has failed to furnish details as to the commission estimated on the total turnover on such bogus / accommodation entries. The Assessing Officer added Rs.2,38,22,923/-being 2% as commission income on the bogus transaction of Rs.119,11,46,132/- which included all the expenses of the assessee company including the commission paid by the assessee to other hawala dealers. On an appeal before the Ld.CIT(A) on the addition made by the Assessing Officer, the Ld.CIT(A) confirmed the addition made by the Assessing Officer alongwith 2% commission on the bogus transactions on the ground that the assessee has failed to prove that the commission received by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry, has not been retracted till date. 12. Having heard the rival submissions and perused the materials on record, we proceed to decide grounds 2 3 where ground 1 is of general nature and needs no adjudication. Grounds 2 3 raised by the assessee pertains to the rejection of books of account as per the provisions of section 145(3) and on the addition of the impugned amount @2% of the sales as net income of the assessee. With regard to the issue pertaining to the rejection of books of account of the assessee company, the Ld.AR has placed his reliance on the decision of Punjab Haryana High Court in the case of Commissioner of Income-tax, Patiala vs Dhulla Ram, Labour Contractor (2014) 42 taxmann.com 349 wherein it was held that in the case of cash credit under section 68 of the I.T. Act and where the Assessing Officer has rejected the books of account of the assessee in its entirety, the Assessing Officer cannot rely on any entries pertaining to the books of account of the assessee rejected by the Assessing Officer for making an addition under section 68 of the Act. The Ld.AR also relied on the decision of the Hon ble High Court of Rajasthan in the case of G.K. Contractor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer. This ground of appeal is allowed, for statistical purpose. 15. Ground 4 pertains to the disallowance of deduction claimed under Chapter VIA of Rs.7,04,737/- made by the Assessing Officer and thereafter confirmed by the Ld.CIT(A). 16. The Ld.AR contended that the donation made to charitable trust was disallowed for want of documentary evidence by the Assessing Officer. When confronted with, the Ld.AR stated that only ledger account pertaining to the said transaction was available with the assessee. In the circumstances, we are inclined to dismiss this ground of appeal for lack of evidence to substantiate the claim of the assessee. In the result, ground 4 filed by the assessee is dismissed. 17. In the result, appeal of the assessee is partly allowed for statistical purpose. ITAs No. 2580/Mum/2019 A.Y. 2009-10 18. Grounds 1 to 3 of this appeal are identical to that of ITA No.2579/Mum/2019 and the decision arrived at therein will apply mutatis mutandis to these grounds. 19. Ground 4 pertains to addition of unsecured loan of Rs.6,72,32,000/- as unexplained cash credit under section 68 of the I.T. Act made by the Assessing Officer and confirmed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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