HAREN PRAMODKUMAR PARIKH,MUMBAI vs. ACIT CIRLCE 19(1), MUMBAI

Ground No. 1 raised by the assessee relates to challenging the order of the Ld. CIT(A) in confirming the addition of Rs. 5,21,54,075/- made under Section 69A of the Act read with Section 115BBE of the Act. In this regard, the Ld. AR appearing on behalf of the assessee reiterated the same arguments as were raised before the Revenue Authorities and also relied upon the written submissions filed before us and the same is reproduced herein below:

On the other hand, the Ld. DR relied upon the orders passed by the Revenue Authorities.

We have heard counsel for both the parties, perused the material placed on record, the judgments cited before us, and also the orders passed by the Revenue Authorities. From the records, we noticed that the addition of Rs. 5,21,54,075 was made by the AO on the ground that the assessee had deposited cash amounting to Rs. 5,21,54,075 in its bank account during the demonetisation period and, since no reply was filed by the assessee, the AO added the said amount as unexplained money under Section 69A of the Act.

Whereas, on the contrary, the assessee specifically stated that he had withdrawn the cash as he was in the business of providing accommodation entries. As soon as the amount was realised from the client, the same was used to deposit the cash back into the account.

However, the said plea was negated by the Revenue Authorities on the ground that the assessee had failed to produce any cash flow statement. The plea of the assessee that he used to deposit the same cash back into the bank accounts to carry out the business of accommodation entries was not found acceptable, as the assessee was expected to maintain a proper cash book since he himself admitted to being in the business of providing accommodation entries. Since the assessee had not submitted any documentary evidence in support thereof, the stand of the assessee was not accepted.

However, the assessee has now placed on record a chart explaining the source of cash deposits in three bank accounts, which is at PB Pages 26 and 26A and which, according to the assessee, was not available before any of the Revenue Authorities.

Since these papers contained at PB Pages 26 and 26A were not placed before the Revenue Authorities, they need to be verified so as to reach to a logical and legal conclusion. Accordingly, we set aside the findings of Ld. CIT(A) on this ground and restore the matter to the file of the AO for afresh adjudication after verification. Needless to say AO shall provide adequate opportunity of hearing to the parties before deciding the issue.

Ground No. 2 raised by the assessee relates to challenging the order of the Ld. CIT(A) in upholding the addition of Rs. 2,24,12,730 by determining the brokerage at the rate of 12 per cent as against 0.15 per cent.

In this regard, the Ld. AR appearing on behalf of the assessee reiterated the same arguments as were raised before the Revenue Authorities and also relied upon the written submissions filed before us and the same is reproduced herein below:

Whereas, the Ld. DR relied upon the orders passed by the Revenue Authorities.

We have heard counsel for both the parties, perused the material placed on record, the judgments cited before us, and also the orders passed by the Revenue Authorities. From the records, we noticed that the point to be determined before us is whether the commission received/charged by the assessee was at the rate of 0.15 per cent or 12 per cent as estimated by the Revenue Authorities, as has been specifically mentioned in the assessment order and the order of the Ld. CIT(A).

During the proceedings, the assessee contended that he was an accommodation entry provider but had failed to provide details of the actual beneficiaries of these accommodation entries to the AO. In this regard, several notices were issued to the assessee from time to time, however, he could not place on record any documentary evidence to substantiate the grounds raised by him. Accordingly, the Ld. CIT(A) decided the said ground against the assessee, and the operative portion of the same is contained in Para 6.3.2 of the order of the Ld. CIT(A) and the same is reproduced herein below:

After considering the orders passed by the Revenue Authorities and the facts of the present case, we find that nothing has been placed on record by the assessee to substantiate its case except reliance upon the decision in the case of Ramesh Kumar Jain vs. ACIT in ITA Nos. 3512 and 3513/Mum/2013. However, we find that the facts of that case are different, and estimation in any case would depend upon the facts of that particular case. As far as the facts of the present case are concerned, although the assessee has averred that he is engaged in providing accommodation entries, no documents have been placed on record to substantiate his case. Therefore, the Ld. CIT(A) has rightly adjudicated this ground.

Even otherwise, no new facts, circumstances, or documents have been placed on record by the Ld. AR in order to controvert or rebut the lawful findings recorded by the Ld. CIT(A). Therefore, we see no reason to interfere with or deviate from the findings so recorded by the Ld. CIT(A). Accordingly, we dismiss this ground raised by the assessee and uphold the order of the Ld. CIT(A).

Ground No. 3 raised by the assessee relates to challenging the order of the Ld. CIT(A) in not reducing the returned income from the additions made. Since this ground also requires factual verification, the same is remitted back to the file of the AO with a direction to reduce the returned income from the additions in accordance with law. Accordingly, this ground also stands allowed for statistical purposes.

Ground No. 4 raised by the assessee relates to challenging the order of the Ld. CIT(A) in not considering the decisions relied upon by the assessee. From the facts of the present case, we notice that the Ld. CIT(A) has discussed in detail the facts of the present case as well as the legal propositions. The Ld. CIT(A), as well as this Bench, has considered all the decisions relied upon by the assessee before us and, after considering the same, we have adjudicated the grounds of appeal accordingly. Therefore, this ground raised by the assessee stands rejected.

Before parting, we make it clear that our decision to restore the matter to the file of the AO in respect of Ground No. 1 and 3, shall in no way be construed as having any bearing upon or expressing any opinion on the merits of the dispute, which shall be adjudicated independently by the AO in accordance with law.

In the result appeal filed by the assessee stands partly allowed