9911796707
TMI Blog2025 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... mate real/actual beneficiaries.
Respectfully following the decision in the cases of Zed Enterprises (P) Ltd [2024 (1) TMI 1442 - ITAT DELHI], Shivij Garments (P) Ltd [2024 (2) TMI 454 - ITAT DELHI], Zen Tradex (P) Ltd [2024 (9) TMI 1701 - ITAT DELHI], M/s Round Square Exim Pvt Ltd [2025 (1) TMI 1521 - ITAT DELHI] we hold that the protective addition made in the instant case deserves to be deleted.
Addition on account of commission income is also deleted as the same has been considered in the hands of the main entry operators Sh Anand Jain and Naresh Jain. Accordingly, the ground no 1 and 2 are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, from different Residential and Business Premises through dummy directors for the purposes of providing accommodation entries. In the course of search, on the basis of seized materials, it was established that the assessee was a conduit company belonging to the entry operator Sh. Anand Jain and Sh. Naresh Jain who were managing and controlling various shell concerns for providing accommodation entries in lieu of commission. 8. The Assessing Officer passes an order u/s 153C r.w.s. 153A of the Act considering the assessee company as a conduit company and made the addition of entire credit entries of Kotak Mahindra Bank totaling to Rs. 6,93,50,000/- and treating it as unexplained entries u/s 68 of the Act on protective basis. The AO also made substantive addition of Rs. 1,73,375/- on account of unaccounted commission, earned in the process of providing accommodation entries, in the hands of the assessee company. 9. Aggrieved, the assessee went in appeal before the ld. CIT (A) who deleted the protective addition of Rs 6.93 crore as well as the commission income of Rs. 1,73,375/-. 10. Aggrieved by the above action of the ld. CIT(A), the Revenue is in appeal bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to transfer funds to various other conduit companies of the entry operator for the use of ultimate end beneficiaries. We also note that the AO has made protective assessment in the hands of the assessee of the entire credit entries in its bank account. The AO mentions in his assessment order that information to the assessing officer of the beneficiaries have already been disseminated by the Investigation Wing for appropriate action. The AO himself is informing the AOs of the concerned beneficiaries for appropriate action in their respective cases. We find that the ld. CIT(A), referring to several decisions of jurisdictional High Court and Tribunals in his appellate order, has held as under: "9.1 In the above judicial pronouncements, it has been categorically held by various courts including Honorable Jurisdictional High Court that where the assessee is found to be engaged in the activity of accommodation entries on commission basis to various beneficiaries and there is nо finding/observation of the AO alleging the assessee to be actual owner of the money/credits/deposits in its bank account and beneficiaries being identified there cannot be any addition of credit/funds depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 charging 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 managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission. Accordingly, taking that logic there is no question of charging of commission income in the hands of the appellant company, since nothing has been earned by the company in this regard being the shell concern. (Income Tax Therefore, I am of the view that no further addition can be made in the hands of the appellant company under the facts as discussed above. Under these circumstances, the protective addition made by the AO of Rs. 6,61,50,000/- is directed to be deleted. The appellant gets relief on these grounds of appeal. 10. Ground No. 12: The appellant has challenged the addition made by the AO of Rs. 1,65,375/-. The AO in the assessment order has made an addition on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has acted only as a conduit entity therefore, we do not see any reason to disturb the findings of ld. CIT (A) in this regard. Accordingly, the ground raised by the Revenue is dismissed. 6. With regard to commission income which was made on substantive basis in the hands of the assessee, however it is brought to our notice that Anand Kumar Jain who is the provider of accommodation entries, who is the main person, has established these dummy and conduit entities and he has earned the commission income and the same was offered to tax and also confirmed by the coordinate Bench in the case of Anand Kumar Jain (supra) which is placed on record, therefore, the same income cannot be subject to tax twice. Therefore, even on the issue of commission, we are not inclined to disturb the findings of the ld. CIT (A). Accordingly, this ground of appeal is also dismissed." 16. In the case of Zen Tradex [supra], the co-ordinate bench has held as under: 7. We have heard both the parties at length. We find merit in the submission of the Ld. AR. The Tribunal, in the case of Zed Enterprises (P) Ltd., ITA No. 208 to 212/Del/2022 for AY 2012- 13 to 2016-17, has held as under: "12. We have exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of the entry operators in their individual capacity, no separate commission can be charged in the hands of the pass through/ companies floated by the entry operators. As the assessee is found to be one of such pass-through entity, we decline to interfere with the order of the ld. CIT (A) in deleting the commission charged." 8. We are of the considered view that the case of the assessee for all AYs is squarely covered by the decision in the Tribunal in the case of Zed Enterprises (P) Ltd., ITA No. 208 to 212/Del/2022 for AY 2012-13 to 2016-17. We are therefore, in agreement with the above extracted observations/ findings in para-7 as the facts of the present case are squarely covered by this case. In view of the decision & following the reasoning in the case of Zed Enterprises (P) Ltd. (supra) and considering the facts and circumstances of the instant case, all four appeals of the Revenue deserve no consideration and are accordingly dismissed." 17. After careful perusal of the orders of the authorities below and the judicial pronouncements relied upon by the representatives of the assessee as well as the order of the ld. CIT(A), we find no reason to interfere with the find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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