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08-02-2019, Topgrain Management, Section 131, 147, 271(1)(c), Tribunal Kolkata

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6 months 1 week ago #8620 by amit
Section - 131, 147, 271(1)(c)
Order Date - 08-02-2019
Favouring - Allowed for statistical purposes
Court - Tribunal Kolkata
Appellant - DCIT
Respondent - Topgrain Management Pvt. Limited
Justice - P.M. Jagtap VP & S.S. Viswanethra Ravi JM
Citation - 219Taxpundit110
Appeal No. - I.T.A. No. 1866/KOL/2013
Asstt. Year - 2007-2008

Order

PER : P.M. Jagtap

These three appeals are preferred by the Revenue against three separate orders passed by the ld. Commissioner of Income Tax (Appeals), Central-I, Kolkata dated 22.01.2014, 22.01.2014 and 28.03.2013 for A.Y. 2005-06, 2006-07 and 2007-08 respectively and since the issues involved therein are common, the same have been heard together and are being disposed of by a single consolidated order.

2. The assessee in the present case is a Company. The investigation carried out by the Department of Income Tax (Investigation), Kolkata revealed that some entities were involved in providing accommodation entries to various companies based in Mumbai, which in turn had used the said funds for payments to Madhipura Mercantile Cooperative Bank at Mumbai, which was controlled by Shri Ketan Parekh. Since the assesseecompany was one of such entities, the statement of its Director Shri Pramod Sharma was recorded under section 131 by the DDIT(Investigation), Kolkata on 15.12.2006. In the said statement given on oath, Shri Pramod Sharma accepted that he had got cash of equivalent amount from the Mumbai based Companies belonging to Shri Ketan Parekh Group and after depositing the said cash into the Bank account of the assessee-company, cheques were issued to the said Companies. He also furnished a list of cheques so issued against cash that had been received by him. Although Shri Pramod Sharma subsequently filed an affidavit retracting his statement, the Assessing Officer did not accept the same on the basis of the enquiries conducted by the Investigation Wing on a test-check basis, which revealed that cash was deposited in various Bank accounts in different stages. According to the Assessing Officer, this factual position substantiated the statement of Shri Pramod Sharma, Director of the assessee-company that cash was indeed received by the assessee-company in lieu of cheques given to various companies belonging to Ketan Parekh Group. He accordingly held that accommodation entries were given by the assessee-company to various Mumbai based companies belonging to Ketan Parekh Group and since the accommodation entries so given during the previous year relevant to A.Y. 2007-08 aggregated to Rs.23,48,45,847/-, he added the commission income @ 2% amounting to Rs.46,96,907/- to the total income of the assessee in the assessment completed for A.Y. 2007-08 under section 143(3) vide an order dated 29.12.2009. In the assessment so made, he also made an addition of Rs.23,48,45,847/- in the hands of the assessee on protective basis observing that the unexplained income to that extent in the form of cash given by the Mumbai based companies was assessable on substantive basis in the hands of the said companies. The Assessing Officer also reopened the assessments for A.Ys. 2005-06 and 2006-07 and in the assessments made under section 143(3)/147 vide orders dated 31.12.2008, he made similar addition on account of commission income at the rate of 2% amounting to Rs.83,74,760/- and Rs.37,43,840/- to the total income of the assessee for A.Y. 2005-06 and 2007-08 respectively.

He also made additions of Rs.41,87,38,000/- and Rs.18,71,92,000/- similarly on protective basis in the assessments completed under section 143(3)/147 for A.Ys. 2005-06 and 2006-07 respectively for the total amount of accommodation entries provided by the assessee-company to the Mumbai based Companies belonging to Ketan Parekh Group observing that unexplained income to that extent was liable to be assessed on substantive basis in the hands of the said companies for the cash given to the assessee-company. The Assessing Officer made further additions of Rs.3,06,62,000/- and Rs.32,85,000/- to the total income of the assessee for A.Y. 2005-06 and 2006-07 respectively on account of unexplained cash deposits found to be made in the Bank accounts of the assessee.

3. Against the orders passed by the Assessing Officer under section 143(3)/147 for A.Y 2005-06 and 2006-07 and under section 143(3) for A.Y. 2007-08, appeals were preferred by the assesee-company before the ld. CIT(Appeals) and after considering the submissions made by the assessee as well as the material available on record, the ld. CIT(Appeals) deleted the addition made by the Assessing Officer to the total income of the assessee for A.Y. 2005-06 on account of the alleged accommodation entries given to the Mumbai based Companies in the form of commission income at the rate of 2% as well as further addition on account of protective basis for the following reasons given in paragraph no. 6 of his impugned order:-

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