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TMI Blog2023 (11) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot blow hot and cold at the same time and assert that the sum to the extent of Rs. 87,00,000/- identified by the Investigating authorities be treated as tainted and the rest of the transactions be accepted at its face value to be sacrosanct. Since assessee failed to produce any material to prove the genuiness of un-secured loan (other than entries in financials), I am unable to subscribe to the contention of the assessee that it had received genuine unsecured loans out of which investments were made/purchased and therefore these transactions should be overlooked. Having held that the assessee was never engaged in business of trading in shares but providing accommodation entries in guise of the same, all the alleged purchase sale transactions conducted by the assessee was rightly regarded as accommodation entries by the AO. Estimation of commission income - As we find prima facie merit in the plea of the Ld. AR that in the facts of the case, both inward and outward remittances may not be considered as accommodation entries provided to ultimate beneficiaries which yielded commission income. Rather, the payments made/cheques issued by the assessee company would represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Based on report of the Investigation Wing, Kolkata, the AO had gathered that the assessee had availed accommodation entries to the tune of Rs. 87,00,000/- from M/s Moonlink Dealcomm Pvt Ltd and M/s Lucky Prime Commercial Pvt Ltd which represented income escaping assessment, and for which the assessment of the assessee was reopened u/s 147 of the Income Tax Act 1961 (herein after the Act). Before the AO, the assessee initially contended that it was engaged in the business of trading in shares investments and that the transactions with M/s Moonlink Dealcomm Pvt Ltd and M/s Lucky Prime Commercial Pvt Ltd represented sale of unlisted shares in the course of such business. The assessee, alternatively contended that, the transactions conducted by it may be considered as accommodation entries/circular-trading/ layering of funds and therefore suo-moto offered commission income in the range of 0.5% to 1% of the funds circulated by the company as its income. Since no details were furnished by the assessee in support of its primary and alternate contention, the AO issued notice u/s 142(1) of the Act dated 14.12.2019 requiring the assessee to provide the details of the purported shares pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) who confirmed the action of the AO. Now, the assessee is in appeal before this Tribunal. 5. The Ld. AR has filed a written synopsis in which he has primarily reiterated the submissions which were put forth before the lower authorities. The Ld. AR in his written note has submitted that, evidences were furnished in support of sale and purchase of shares and despite the same the AO had treated the assessee to be engaged in circular trading and treated 1% of total debit and credit entries in the bank statement as income of the assessee. It has been submitted that the AO ought to have enquired into the source of funds utilized to acquire the shares during the year and that the manner in which he computed the sums involved in circular trading, which action of AO according to him, was not correct. The Ld. AR, at the time of hearing however did not seriously pursue the aforesaid line of submissions. Rather he argued that, as per the report of the DGIT(Inv), Kolkata, the tainted sums were only to the extent of Rs. 87 lacs and that all other receipts/payments were not tainted and therefore he urged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase bill, sale invoice, bank statement etc. Even now, the assessee has not been able to furnish any of the aforementioned details or documentary evidences in support of the purported transactions with the two entities. Accordingly the submission of the Ld. AR that complete details were furnished before the AO is found to be untenable without there being any iota of evidence to support the same. Even the assertion made by the Ld. AR that the AO had accepted the transactions as purchase sale of shares is found to be incorrect in light of the categorical finding recorded by the AO at Para 5.5 of the order viz., From the above it is crystal clear that the assessee company is not in the business of share trading of unlisted shares but is indulged only in providing accommodation entries to ultimate beneficiaries. The Ld. AR has been unable to dislodge these findings of the AO and therefore the same stands affirmed. I therefore in principle uphold the order of the lower authorities treating the assessee to be an accommodation entry provider engaged in assisting in circular trading/ layering of funds for the ultimate beneficiaries. 8. Moreover, I find that it was the assessee who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise would remain academic in absence of the bank statement of the assessee. Hence, in the fitness of the matters, the limited issue regarding quantification of commission income is set aside back to the file of the AO with direction to the assessee to produce/furnish its bank statement for verification and quantification of debit entries for estimation of commission income. The AO shall allow sufficient opportunity and time to the assessee in this regard. In case the commission income estimated comes to a figure higher than the sum originally added or the assessee fails to provide or furnish the bank statement, then the commission income as originally estimated by the AO would stand confirmed. Needless to say, under no circumstances, the AO would enhance the income as originally assessed by him. 10. With the above directions, the appeal for AY 2012-13 stands partly allowed for statistical purposes. 11. Since except variation in figures, the facts and circumstances in the lead case under consideration, being ITA No. 617/Mum/2023, for A.Y. 2012-13 is identical to the other AYs 2013-14 2017-18 in ITA Nos. 618/Mum/2023 616/Mum/2023 respectively, my decision in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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