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Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI KULDIP SINGH & SHRI OM PRAKASH KANT
PER BENCH These captioned appeals by the These captioned appeals by the respective respective assessee(s) are directed against separate orders passed by the Ld. Commissioner of directed against separate orders passed by the Ld. Commissioner of directed against separate orders passed by the Ld. Commissioner of Income Tax (Appeals) Income Tax (Appeals)-47, Mumbai [in short ‘the Ld. CIT(A)’] 47, Mumbai [in short ‘the Ld. CIT(A)’] for relevant assessment year relevant assessment year. As common grounds have been raised in . As common grounds have been raised in these appeals, same were heard together and disposed off these appeals, same were heard together and disposed off these appeals, same were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of this consolidated order for convenience and avoid repetition of this consolidated order for convenience and avoid repetition of facts. In view of identically worded In view of identically worded grounds raised in these appeals grounds raised in these appeals, for brevity, grounds of appeal in the case of grounds of appeal in the case of ITA No. 312/Mum/2022 (Abhiman Gems Pvt. Ltd. Abhiman Gems Pvt. Ltd.) are only reproduced as under: as under:
On the facts and in the circumstances of the case and in law 1. On the facts and in the circumstances of the case and in law On the facts and in the circumstances of the case and in law the Ld. CIT (A) erred in not considering that the assumption of the Ld. CIT (A) erred in not considering that the assumption of the Ld. CIT (A) erred in not considering that the assumption of Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 3 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors. jurisdiction by the Ld. Assessing Officer is bad in law as the jurisdiction by the Ld. Assessing Officer is bad in law as the jurisdiction by the Ld. Assessing Officer is bad in law as the conditions laid down under the Act for initiating reassessment conditions laid down under the Act for initiating reasses conditions laid down under the Act for initiating reasses proceeding u/s 147 of the Act have not been fulfilled. proceeding u/s 147 of the Act have not been fulfilled. proceeding u/s 147 of the Act have not been fulfilled.
2. On the fact and circumstances of the case and in law the Ld. On the fact and circumstances of the case and in law the Ld. On the fact and circumstances of the case and in law the Ld. CIT (A) erred in confirming the addition of alleged CIT (A) erred in confirming the addition of alleged CIT (A) erred in confirming the addition of alleged commission income arising out of alleged bogus unsecured commission income arising out of alleged bogus unsecured commission income arising out of alleged bogus unsecured loans, bogus purchases loans, bogus purchases and bogus sales amounting to Rs. and bogus sales amounting to Rs. 17,52,678/ 17,52,678/- on protective basis without appreciating the fact on protective basis without appreciating the fact that the same amount has been susbstantively added in the that the same amount has been susbstantively added in the that the same amount has been susbstantively added in the case of Shri Bhanwarlal Jain, thereby making the same case of Shri Bhanwarlal Jain, thereby making the same case of Shri Bhanwarlal Jain, thereby making the same addition in the hands of two assessees leading to double addition in the hands of two assessees leading to addition in the hands of two assessees leading to taxation. taxation.
3. On the facsts and circumstances of the case and in law the Ld. On the facsts and circumstances of the case and in law the Ld. On the facsts and circumstances of the case and in law the Ld. CIT(A) erred in confirming addition of Rs. 47,88,101/- (being CIT(A) erred in confirming addition of Rs. 47,88,101/ CIT(A) erred in confirming addition of Rs. 47,88,101/ 7.40% of Rs. 6,47,04,070/ 7.40% of Rs. 6,47,04,070/-), on estimation basis, by treating ), on estimation basis, by treating genuine turnover of the appellant as bogus sales. genuine turnover of the appellant as bogus sales.
4. On the facts and circumstances of the case and in law the Ld. On the facts and circumstances of the case and in law the Ld. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in confirming the addition of alleged commission CIT(A) erred in confirming the addition of alleged commission CIT(A) erred in confirming the addition of alleged commission income arising out of alleged bogus unsecured loans, bogus income arising out of alleged bogus unsecured loans, bogus income arising out of alleged bogus unsecured loans, bogus sales and bogus purchases and also confirming the addition of sales and bogus purchases and also confirming the addition of sales and bogus purchases and also confirming the addition of gross profi gross profit, on estimation basis, of a percentage of the total t, on estimation basis, of a percentage of the total turnover, without appreciating the fact that both such turnover, without appreciating the fact that both such turnover, without appreciating the fact that both such additions cannot co exist togehter. additions cannot co exist togehter.
5. On the facts and circumstances of the case and in law the Ld. On the facts and circumstances of the case and in law the Ld. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in confirming addition of alleged commission CIT(A) erred in confirming addition of alleged com CIT(A) erred in confirming addition of alleged com income arising out of alleged bogus unsecured loans, bogus income arising out of alleged bogus unsecured loans, bogus income arising out of alleged bogus unsecured loans, bogus sales and bogus purchases, without appreciating the fact that sales and bogus purchases, without appreciating the fact that sales and bogus purchases, without appreciating the fact that for the very same assessee for previous assessment years, for the very same assessee for previous assessment years, for the very same assessee for previous assessment years, being A.Y. 2012 being A.Y. 2012-13 to A.Y. 2014-15, the Ld. CIT(A) has deleted 15, the Ld. CIT(A) has deleted
Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 4 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors. the protective addition of alleged commission income, thereby otective addition of alleged commission income, thereby otective addition of alleged commission income, thereby not following the principal of consistency. not following the principal of consistency.
6. On the facts and in the circumstances of the case and in law, On the facts and in the circumstances of the case and in law, On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in changing protective addition of the Ld. CIT(A) erred in changing protective addition of the Ld. CIT(A) erred in changing protective addition of commission income on alleged bogus sal commission income on alleged bogus sales to substantive es to substantive addition on the incorrect presumption that the same was not addition on the incorrect presumption that the same was not addition on the incorrect presumption that the same was not considered in the order of the Hon'ble ITAT in the case of Shri considered in the order of the Hon'ble ITAT in the case of Shri considered in the order of the Hon'ble ITAT in the case of Shri Bhanwarlal Jain. Bhanwarlal Jain.
7. On the facts and in the circumstances of the case and in law, On the facts and in the circumstances of the case and in law, On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in changing pr the Ld. CIT(A) erred in changing protective addition to otective addition to substantive addition without issuing any show cause notice or substantive addition without issuing any show cause notice or substantive addition without issuing any show cause notice or opportunity of being heard to the appellant, which is in opportunity of being heard to the appellant, which is in opportunity of being heard to the appellant, which is in violation of section 251(2) of the Income Tax Act, 1961 and in violation of section 251(2) of the Income Tax Act, 1961 and in violation of section 251(2) of the Income Tax Act, 1961 and in violation of the principles of natural justice. violation of the principles of natural justice.
On the facts and in the circumstances of the case and in law, e facts and in the circumstances of the case and in law, e facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in confirming the addition made by Id. the Ld. CIT (A) erred in confirming the addition made by Id. the Ld. CIT (A) erred in confirming the addition made by Id. AO, without providing any opportunity of cross examination, AO, without providing any opportunity of cross examination, AO, without providing any opportunity of cross examination, without any corroborative evidence and without providing without any corroborative evidence and without providing without any corroborative evidence and without providing copy of statements re copy of statements relied upon.
Before us, the Ld. Counsel of the assessee Before us, the Ld. Counsel of the assessee a filed tabular chart filed tabular chart of the summary of the additions made by the Assessing Officer and of the summary of the additions made by the Assessing Officer and of the summary of the additions made by the Assessing Officer and income enhanced by the Ld. CIT(A) income enhanced by the Ld. CIT(A) in all the captioned appeals in all the captioned appeals. For ready reference, the said chart is reproduc ready reference, the said chart is reproduced as under: ed as under:
Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 5 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors.
We have heard rival submissions of the parties. The Ld. We have heard rival submissions of the parties. The Ld. We have heard rival submissions of the parties. The Ld. Counsel submitted that all the issues raised in grounds are covered Counsel submitted that all the issues raised in grounds are covered Counsel submitted that all the issues raised in grounds are covered by the decision of the Tribunal in the case of another concern and by the decision of the Tribunal in the case of another concern and by the decision of the Tribunal in the case of another concern and Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 6 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors.
M/s Rare Diamonds P. Ltd., which is also a co M/s Rare Diamonds P. Ltd., which is also a concern controlled by Sh. ncern controlled by Sh. Bhanwarlal Jain. The Ld. DR fairly agreed that issue are covered in Bhanwarlal Jain. The Ld. DR fairly agreed that issue are covered in Bhanwarlal Jain. The Ld. DR fairly agreed that issue are covered in favour of the assessee. favour of the assessee. In the grounds raised three In the grounds raised three additions have been agitated by the assessee. been agitated by the assessee.
3.1 The first addition agitated, addition agitated, is in respect of estimation of t is in respect of estimation of the commission income on issuing bogus accommodation entry bills. commission income on issuing bogus accommodation entry bills. commission income on issuing bogus accommodation entry bills. This addition has been made by the Assessing Officer on This addition has been made by the Assessing Officer on This addition has been made by the Assessing Officer on protective basis holding that assessee basis holding that assessee concerned was operated by Shri concerned was operated by Shri Bhanwarlal Jain for issuing accommodation entry bills and Bhanwarlal Jain for issuing accommodation entry bills and Bhanwarlal Jain for issuing accommodation entry bills and substantive addition has been made tive addition has been made in the case of Sh. Bhanwarlal of Sh. Bhanwarlal Jain. The Ld. CIT(A) however, has upheld the protective nature of . The Ld. CIT(A) however, has upheld the protective nature of . The Ld. CIT(A) however, has upheld the protective nature of the addition. Before us, the Ld. Counsel of the assessee submitted the addition. Before us, the Ld. Counsel of the assessee submitted the addition. Before us, the Ld. Counsel of the assessee submitted that Tribunal has upheld the substantive addition in the case of that Tribunal has upheld the substantive addition in the case of that Tribunal has upheld the substantive addition in the case of Shri Bhanwarlal Jain and therefore protective addition in the case of the Bhanwarlal Jain and therefore protective addition in the case of the Bhanwarlal Jain and therefore protective addition in the case of the assessee cannot survive. assessee cannot survive.
Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 7 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors.
3.1 The Ld. Counsel relied on the decision of the Tribunal in the The Ld. Counsel relied on the decision of the Tribunal in the The Ld. Counsel relied on the decision of the Tribunal in the case of Rare Diamonds Pvt. Ltd. in Rare Diamonds Pvt. Ltd. in ITA No. 313/Mum/2022 Rare Diamonds Pvt. Ltd. in ITA No. 313/Mum/2022 wherein the assessee wherein the assessee was also one of the concerned controlled by f the concerned controlled by Shri Bhanwarlal Jain and used for issuing accommodation entry Shri Bhanwarlal Jain and used for issuing accommodation entry Shri Bhanwarlal Jain and used for issuing accommodation entry bills. The Tribunal (supra) (supra) in said case has deleted the protective in said case has deleted the protective addition observing as under : addition observing as under :
“12. The Ld. CIT(A) has summarized the factual conclusions in para 8.3 of 12. The Ld. CIT(A) has summarized the factual conclusions in para 8.3 of 12. The Ld. CIT(A) has summarized the factual conclusions in para 8.3 of the impugned order. Ld. CIT(A) has also noted that for the commission the impugned order. Ld. CIT(A) has also noted that for the commission the impugned order. Ld. CIT(A) has also noted that for the commission income added on protective basis in the case of the assessee for such income added on protective basis in the case of the assessee for such income added on protective basis in the case of the assessee for such 15 has been deleted by period from Assessment Year 2007 period from Assessment Year 2007-08 to AY 2014-15 has been deleted by the concerned first appellate authority following the decision of the the concerned first appellate authority following the decision of the the concerned first appellate authority following the decision of the Tribunal in the case of Sh. Bhanwarlal Jain. Despite fully aware of the Tribunal in the case of Sh. Bhanwarlal Jain. Despite fully aware of the Tribunal in the case of Sh. Bhanwarlal Jain. Despite fully aware of the fact, the Ld. CIT(A) in the instant case has upheld the addition on the fact, the Ld. CIT(A) in the instant case has upheld the addition on the fact, the Ld. CIT(A) in the instant case has upheld the addition on the reasoning that reasoning that the Income-tax department has not accepted the tax department has not accepted the percentage estimated by the Tribunal in the case of Sh. Bhanwarlal Jain, percentage estimated by the Tribunal in the case of Sh. Bhanwarlal Jain, percentage estimated by the Tribunal in the case of Sh. Bhanwarlal Jain, and further appeal has been preferred. The Ld. CIT(A) has ignored that and further appeal has been preferred. The Ld. CIT(A) has ignored that and further appeal has been preferred. The Ld. CIT(A) has ignored that he, being a appellate authority, is required to follow the decisi he, being a appellate authority, is required to follow the decisi he, being a appellate authority, is required to follow the decision of the higher appellate forum irrespective whether the department has higher appellate forum irrespective whether the department has higher appellate forum irrespective whether the department has preferred appeal again the same, unless the decision of that appellate preferred appeal again the same, unless the decision of that appellate preferred appeal again the same, unless the decision of that appellate forum has been stayed by the higher appellate forum. The Ld CIT(A) forum has been stayed by the higher appellate forum. The Ld CIT(A) forum has been stayed by the higher appellate forum. The Ld CIT(A) cannot confirm an addition on protective basi cannot confirm an addition on protective basis. He is required to decided s. He is required to decided the issue either way and cannot proceed with keeping an addition on the issue either way and cannot proceed with keeping an addition on the issue either way and cannot proceed with keeping an addition on substantive in one case and protective in other case that too even after a substantive in one case and protective in other case that too even after a substantive in one case and protective in other case that too even after a finding of the higher appellate forum i.e. ITAT. We accordingly, reject this finding of the higher appellate forum i.e. ITAT. We accordingly, reject this finding of the higher appellate forum i.e. ITAT. We accordingly, reject this Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 8 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors. approach of the Ld CIT(A) and set aside his finding on the issue on h of the Ld CIT(A) and set aside his finding on the issue on h of the Ld CIT(A) and set aside his finding on the issue on dispute. Respectfully following the finding of the ITAT in the case of Sh. dispute. Respectfully following the finding of the ITAT in the case of Sh. dispute. Respectfully following the finding of the ITAT in the case of Sh. Bhanwarlal Jain (Which has been extracted above), the protective Bhanwarlal Jain (Which has been extracted above), the protective Bhanwarlal Jain (Which has been extracted above), the protective addition made in the case of the assessee in respect of addition made in the case of the assessee in respect of commission income commission income from accommodation entries is deleted. The relevant grounds of the from accommodation entries is deleted. The relevant grounds of the from accommodation entries is deleted. The relevant grounds of the Appeal are accordingly allowed. Appeal are accordingly allowed.” 3.2 The issue-in-dispute being identical, respectfully following the dispute being identical, respectfully following the dispute being identical, respectfully following the finding of the Tribunal (supra), the addition for estimation of the finding of the Tribunal (supra), the addition for estimation of the finding of the Tribunal (supra), the addition for estimation of the income of the commission on protective basis is deleted in all the income of the commission on protective basis is deleted in all the income of the commission on protective basis is deleted in all the appeals before us.
The second addition agitated by the assessee(s) in the The second addition agitated by the assessee The second addition agitated by the assessee appeal(s) is in respect of estimation of the gross profit on total is in respect of estimation of the gross profit on total is in respect of estimation of the gross profit on total turnover of the assessee. The facts qua the turnover of the assessee. The facts qua the issue-in-dispute are that dispute are that the Assessing Officer on one hand held the Assessing Officer on one hand held that the assessee i that the assessee is bogus concern of Shri Bhanwarlal Jain utilized for issuing accommodation concern of Shri Bhanwarlal Jain utilized for issuing accommodation concern of Shri Bhanwarlal Jain utilized for issuing accommodation entry bills and therefore entry bills and therefore he added the commission income on added the commission income on protective basis for issuing such acc protective basis for issuing such accommodation entry bills. ommodation entry bills. Whereas, on the other hand, the Assessing Officer has made addition on the other hand, the Assessing Officer has made addition on the other hand, the Assessing Officer has made addition for the gross profit on the basis of the transactions of for the gross profit on the basis of the transactions of for the gross profit on the basis of the transactions of purchase and Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 9 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors.
sales recorded in books of account in books of account, treating the same as real trading , treating the same as real trading activity. The assesee ha activity. The assesee has contested that the Assessing Officer is not s contested that the Assessing Officer is not justified in simultaneously making addition for the commission justified in simultaneously making addition for the commission justified in simultaneously making addition for the commission income on protective basis as well as estimating gross profit on the income on protective basis as well as estimating gross profit on the income on protective basis as well as estimating gross profit on the transaction of purchase and sales recorded in the books of account. transaction of purchase and sales recorded in the books of account. transaction of purchase and sales recorded in the books of account. The Ld. Counsel relied on the decision of the Tribunal in the case of unsel relied on the decision of the Tribunal in the case of unsel relied on the decision of the Tribunal in the case of Rare Diamonds Pvt. L Rare Diamonds Pvt. Ltd. (supra) where such addition td. (supra) where such addition on the gross profit rate has been deleted. The relevant finding of the Tribunal been deleted. The relevant finding of the Tribunal been deleted. The relevant finding of the Tribunal (supra) is reproduced as under: is reproduced as under:
“17. From the impugned order of 17. From the impugned order of the Ld. CIT(A), we find that in one para the Ld. CIT(A), we find that in one para he is treating the books of accounts and other details of quantitative tally he is treating the books of accounts and other details of quantitative tally he is treating the books of accounts and other details of quantitative tally in respect of trading activity as self in respect of trading activity as self-serving documents, devoid of truth serving documents, devoid of truth and genuineness and therefore cannot be relied upon. On the othe and genuineness and therefore cannot be relied upon. On the othe and genuineness and therefore cannot be relied upon. On the other hand, he is confirming the gross profit rate addition made by the Assessing he is confirming the gross profit rate addition made by the Assessing he is confirming the gross profit rate addition made by the Assessing Officer for the said trading activity. The Ld. CIT(A) cannot give both the Officer for the said trading activity. The Ld. CIT(A) cannot give both the Officer for the said trading activity. The Ld. CIT(A) cannot give both the finding that assessee was engaged in providing accommodation entry and finding that assessee was engaged in providing accommodation entry and finding that assessee was engaged in providing accommodation entry and being simultaneously was engaged being simultaneously was engaged in trading activity. We find that in trading activity. We find that tribunal in the case of Sh. Bhawarlal Jain (supra) has given a specific tribunal in the case of Sh. Bhawarlal Jain (supra) has given a specific tribunal in the case of Sh. Bhawarlal Jain (supra) has given a specific finding that 70 associate concerns of Sh. Bhanwarlal Jain were engaged finding that 70 associate concerns of Sh. Bhanwarlal Jain were engaged finding that 70 associate concerns of Sh. Bhanwarlal Jain were engaged in providing only accommodation entry and no real business was carried, in providing only accommodation entry and no real business was carried, in providing only accommodation entry and no real business was carried, which was recorded in their books of accounts. The assessee also being was recorded in their books of accounts. The assessee also being was recorded in their books of accounts. The assessee also being one of the concern out of those 70 concerns, the Ld. CIT(A) has correctly one of the concern out of those 70 concerns, the Ld. CIT(A) has correctly one of the concern out of those 70 concerns, the Ld. CIT(A) has correctly
Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 10 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors. rejected the claim of the assessee in para 11.1 that it was engaged in any rejected the claim of the assessee in para 11.1 that it was engaged in any rejected the claim of the assessee in para 11.1 that it was engaged in any trading activity. Once it is held, that as trading activity. Once it is held, that assessee was not engaged in any sessee was not engaged in any trading activity, there is no justification for making any addition for low trading activity, there is no justification for making any addition for low trading activity, there is no justification for making any addition for low gross profit rate in such trading activity. The finding of the Ld. CIT(A) in gross profit rate in such trading activity. The finding of the Ld. CIT(A) in gross profit rate in such trading activity. The finding of the Ld. CIT(A) in para 11.3 are accordingly set aside. The ground No. 3 and 4 (partly), of para 11.3 are accordingly set aside. The ground No. 3 and 4 (partly), of para 11.3 are accordingly set aside. The ground No. 3 and 4 (partly), of the appeal of the assessee are accordingly allowed. the appeal of the assessee are accordingly allowed.” 4.1 The facts of cases before us before us being identical to the The facts of cases before us before us being identical to the The facts of cases before us before us being identical to the facts of the case of Rare Diamonds Pvt. Ltd. (supra) facts of the case of Rare Diamonds Pvt. Ltd. (supra) facts of the case of Rare Diamonds Pvt. Ltd. (supra), therefore, respectfully following the finding of the Tribunal, the addition made respectfully following the finding of the Tribunal, the addition made respectfully following the finding of the Tribunal, the addition made on the basis of the estimation of the gross profit in the appeals on the basis of the estimation of the gross profit in the appeals on the basis of the estimation of the gross profit in the appeals before us are deleted. before us are deleted.
The third addition agitated by the assessee The third addition agitated by the assessee(s) in the appeal(s) (s) in the appeal(s) is in respect of enhancement is in respect of enhancement made by the Ld. CIT(A) in commission made by the Ld. CIT(A) in commission on sales that too on substantive basis. Before us, the Ld. Counsel of on sales that too on substantive basis. Before us, the Ld. Counsel of on sales that too on substantive basis. Before us, the Ld. Counsel of the assessee submitted that the Ld. CIT(A) has made this addition on the assessee submitted that the Ld. CIT(A) has made this addition on the assessee submitted that the Ld. CIT(A) has made this addition on the wrong presumption that such addition was left by the Assessing the wrong presumption that such addition was left by the Assessing the wrong presumption that such addition was left by the Assessing Officer while estimating the commission income on protective basis. estimating the commission income on protective basis. estimating the commission income on protective basis. The Ld. Counsel submitted that the Assessing Officer has The Ld. Counsel submitted that the Assessing Officer has The Ld. Counsel submitted that the Assessing Officer has duly considered the said estimation of commission on protective basis. considered the said estimation of commission on protective basis. considered the said estimation of commission on protective basis.
Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 11 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors.
The Ld. Counsel further submitted that identical issue has been The Ld. Counsel further submitted that identical issue has been The Ld. Counsel further submitted that identical issue has been deleted by the Tribunal in the case of Rare Diamonds Pvt. Ltd. y the Tribunal in the case of Rare Diamonds Pvt. Ltd. y the Tribunal in the case of Rare Diamonds Pvt. Ltd. (supra). The relevant finding of the (supra). The relevant finding of the Tribunal is reproduced as under Tribunal is reproduced as under:
“20. We are of the opinion that when the Tribunal in the case of Sh.
We are of the opinion that when the Tribunal in the case of Sh.
20. We are of the opinion that when the Tribunal in the case of Sh. Bhanwar Lal Jain (supra) has considered the commission from Bhanwar Lal Jain (supra) has considered the commission from Bhanwar Lal Jain (supra) has considered the commission from accommodation entry on substantive basis, any addition if not considered accommodation entry on substantive basis, any addition if not considered accommodation entry on substantive basis, any addition if not considered in respect of such commission entry, same can only be made in the hand in respect of such commission entry, same can only be made in the hand in respect of such commission entry, same can only be made in the hand of Sh. Bhanwarlal Jain. When it is evident that after the finding of the of Sh. Bhanwarlal Jain. When it is evident that after the finding of the of Sh. Bhanwarlal Jain. When it is evident that after the finding of the Tribunal in the case of Sh. Bhanwarlal Tribunal in the case of Sh. Bhanwarlal Jian, no addition can be made on Jian, no addition can be made on protective basis in the case of the assessee, there is no question of further protective basis in the case of the assessee, there is no question of further protective basis in the case of the assessee, there is no question of further enhancement of said commission income from accommodation entry and enhancement of said commission income from accommodation entry and enhancement of said commission income from accommodation entry and that too on substantive basis. The enhancing of such commission income that too on substantive basis. The enhancing of such commission income that too on substantive basis. The enhancing of such commission income from accommodation entries of bogus sales is without any reasoning and commodation entries of bogus sales is without any reasoning and commodation entries of bogus sales is without any reasoning and totally unjustified. We reject this action of Ld. CIT(A). totally unjustified. We reject this action of Ld. CIT(A).”
Further, the Ld. Counsel has also challenged enhancement of Further, the Ld. Counsel has also challenged enhancement of Further, the Ld. Counsel has also challenged enhancement of income by the Ld. CIT(A) on the ground that income by the Ld. CIT(A) on the ground that no show cause notice no show cause notice was issued to the assessee ssued to the assessee(s) before enhancing the said income, efore enhancing the said income, which is in violation of provisions of section 251(2) of the Act. This violation of provisions of section 251(2) of the Act. This violation of provisions of section 251(2) of the Act. This issue has already been adjudicated by the Tribunal in the case of issue has already been adjudicated by the Tribunal in the case of issue has already been adjudicated by the Tribunal in the case of Rare Diamond Pvt. Ltd. (supra). The relevant finding of the Rare Diamond Pvt. Ltd. (supra). The relevant finding of the Rare Diamond Pvt. Ltd. (supra). The relevant finding of the Tribunal is reproduced as under: is reproduced as under:
Abhiman Gems Pvt. Ltd. & Six Ors Abhiman Gems Pvt. Ltd. & Six Ors 12 & 6 Ors. ITA Nos. 312/M/2022 & 6 Ors.
“22. The Ld. Counsel further submitted that Ld. CIT(A) has enhanced the 22. The Ld. Counsel further submitted that Ld. CIT(A) has enhanced the 22. The Ld. Counsel further submitted that Ld. CIT(A) has enhanced the commission income without providing any show cause notice to the commission income without providing any show cause notice to the commission income without providing any show cause notice to the assessee, which is in violation of the section 251(2) of the Act. The assessee, which is in violation of the section 251(2) of the Act. The assessee, which is in violation of the section 251(2) of the Act. The relevant part of relevant part of the provision is reproduced as under: 251(2). The [Commissioner (Appeals) shall not enhanced an assessment 251(2). The [Commissioner (Appeals) shall not enhanced an assessment 251(2). The [Commissioner (Appeals) shall not enhanced an assessment or a penalty or reduce the amount of refund unless the appellant has had or a penalty or reduce the amount of refund unless the appellant has had or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or a reasonable opportunity of showing cause against such enhancement or a reasonable opportunity of showing cause against such enhancement or reduction.
In the impugned order there is no mention of any opportunity 23. In the impugned order there is no mention of any opportunity 23. In the impugned order there is no mention of any opportunity provided to the assessee by way of issue show cause notice, before making provided to the assessee by way of issue show cause notice, before making provided to the assessee by way of issue show cause notice, before making the addition and therefore this addition is unsustainable on the ground of the addition and therefore this addition is unsustainable on the ground of the addition and therefore this addition is unsustainable on the ground of violation provision of section 251 violation provision of section 251(2) of the Act also.
24. Accordingly the ground No. 6 and 7 of the appeal are also allowed.
Accordingly the ground No. 6 and 7 of the appeal are also allowed.
24. Accordingly the ground No. 6 and 7 of the appeal are also allowed.” 6.1 In view of the above In view of the above, additions made by the Assessing Officer additions made by the Assessing Officer as well as income enhanced by the Ld. CIT(A) are deleted. The as well as income enhanced by the Ld. CIT(A) are deleted. The as well as income enhanced by the Ld. CIT(A) are deleted. The relevant grounds raised by the asse relevant grounds raised by the assessee in the respective appeals ssee in the respective appeals are accordingly allowed. allowed.
In the result, these appeals of the assessee are allowed. In the result, these appeals of the assessee are allowed. In the result, these appeals of the assessee are allowed.