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TMI Blog2024 (9) TMI 1702X X X X Extracts X X X X X X X X Extracts X X X X ..... ue Grounds are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the beneficiaries has already been disseminated by Investigation Wing to the respective AO's for appropriate actions by the AO's of the beneficiaries. 4. Thus, he held that when the beneficiaries have been identified and the undisclosed income have to be added at their hands on substantive basis, the additions made on protective basis at the hands of the assessee cannot be sustained. He further held that since the commission income has been added on substantive basis at the hands of Jain Brothers, the main entry provider, the same cannot be added at the hands of the assessee. While coming to such conclusion, learned first appellate authority relied upon the decisions taken in case of other similarly situated companies. 5. While learned Departmental Representative relied upon the observations of the Assessing Officer, learned counsel appearing for the assessee submitted that while deciding Revenue's appeal in respect of other similarly situated companies, the Coordinate Benches have upheld the decision of learned first appellate authority. In this context, she placed on record the following decisions of the Tribunal: 1. ACIT Vs. M/s. ZED Enterprises (P) Ltd., ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erseas Pvt. Ltd. (A.Y. 2012-13) vide appeal no. Appeal No. CIT(A), Delhi 29/10300/2018-19 dated 24.11.2021, it was held by the then CIT(A)-29, New Delhi as under: "9.3 in the above decision it was held by the Honorable Tribunal that when there is clear finding on record that the capital did not belong to the assessee and belonged to some other person whose existence is not in doubt then there cannot be a question of addition on protective basis in the hands of the assessee. In the present case of the appellant, there are clear observations of the AO in the assessment order that the credits in the bank account of the appellant belongs to some other persons who have been identified and department has already taken steps to appropriate actions in the cases of those persons. Accordingly, the appellant cannot be charged with protective addition of credits/deposits in its hands. 9.4 The addition in such cases can at best be that of commission earned on such accommodation entries. But as far as changing of commission is concerned in the case of the appellant, it has been held by the AO in the assessment order that Sh. Anand Jain and Sh. Naresh Jain were entry operators who were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unaccounted income of the beneficiaries to whom the said funds were transferred through the bank of the appellant company in lieu of commission. In this regard, on perusal of the bank statement and ledger of the appellant company it is evident that the funds have flown in following manner... 6.4. From the above transactions, it is noticed that the appellant company has received funds from various concerns as mentioned above and thereafter amounts were transferred to the above mentioned companies/concerns immediately, the appellant company is not beneficiary company. The above arrangement of funds is nothing but part of modus operandi of the accommodation entry provider to introduce the unaccounted funds of the beneficiaries in their respective bank accounts. Further, the AO also in the assessment order has observed that the appellant company was a conduit company operated by Sh. Naresh Jain and Anand Jain to provide accommodation entries to various beneficiaries and said beneficiaries have already been identified. Accordingly, when the beneficiaries were identified, the addition in such cases can at best be that of commission earned on such accommodation entries. But as far as c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. The operative part of order is reproduced as under: "13. From the above, the ld. CIT(A) held that the assessee company has received funds from various concerns as mentioned above and thereafter amounts were transferred to the above-mentioned companies/concerns immediately, thus the appellant company is not beneficiary company. The Id. CIT(A) also obtained the remand report from the AO and held that the AO has verified the fund flow statement depicting the source of funds and utilization of the same for payments to beneficiaries submitted by the assessee. The Id. CITA) held that it was found which established that the Sh. Anand Jain and Sh. Naresh Kumar Jain were operating bank accounts in the names of various concerns/companies through which accommodation entries were being provided and the appellant company was one of such shell concerns. Further the beneficiaries of such accommodation entries were also identified and information to their respective AOs was also disseminated as mentioned in the assessment or der as well as the remand report. 14. Having observed so, the Id. CIT (A) held that as far as charging of commission is concerned in the case of the assessee, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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