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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SRI SANJAY GARG & SRI RAJESH KUMAR
order
: February 9th, 2022 ORDER
Per Sanjay Garg, Judicial Member:
The present appeal was instituted by the assessee against the order of the Commissioner of Income Tax (Appeals)-11, Kolkata [hereinafter referred to as ld. ‘CIT(A)’] dated 28.03.2019 passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’) for AY 2010-11.
No one has put in appearance on behalf of the assessee despite notice. We, therefore, proceed to decide the appeal of the assessee after hearing the ld. D/R. 3. The relevant grounds of the appeal are as follows: “1. That the ld. CIT(A) erred in determining commission income of the assessee at the rate of 0.5% of the total deposits of Rs. 1,33,22,17,440/- in his bank accounts. The commission income so determined is unjustified and need to be deleted. 2. That the assessee craves leave to add, alter, amend or withdraw any ground or grounds of appeal
before or at the time of hearing.”
4. During the assessment proceedings, the assessing authority found that huge cash was deposited in the bank account of the assessee of Rs. 1,33,22,17,440/-. The information was received by the AO from ITO(Inv), Unit-4, Kolkata. Observation of the assessing authority is as follows:
Assessment Year: 2010-11 Shyam Sundar Sharma. “9. In view of the investigation report and non-compliance by the assessee to explain the sources and nature of transaction as regards to huge cash deposits and credits in his bank accounts even after sufficient opportunities allowed to the assessee, the entire amount deposited in assessee’s bank accounts remained unexplained. Therefore, it is logically concluded that the entire amount deposited and credited in assessee’s bank accounts are nothing but the unexplained income of the assessee from undisclosed sources. Consequently, the entire amount of Rs. 1,33,22,17,440/- deposited in assessee’s bank accounts are considered as undisclosed income of the assessee from undisclosed sources and taxed accordingly. Penalty proceedings u/s 271(1)(C) of the Income Tax Act, 1961 is initiated for concealment of particulars of income.
In view of the above facts, findings and observations, the total income of the assessee is computed as under: Total income as declared by the assessee Rs. 1,53,170/- Add: Income from Rs. 1,33,22,17,440/- Rs. 1,33,22,17,440/- undisclosed sources Assessed income Rs. 1,33,23,70,610/- Assessed u/s 143(3)/147 of the Income Tax Act, 1961. Tax calculated as per separate sheet. Credit of prepaid taxes allowed. Penalty proceedings u/s 271(1)(c) is initiated separately for concealment of particulars of income. Penalty proceedings u/s 271(1)(b) initiated for non- compliance to statutory notice. Interest charged as applicable. A copy of the Assessment Order with calculation sheet, penalty notice u/s 271(1)(c), 271(1)(b) and demand notice is issued to the assessee.”
In first appeal, the ld. CIT(A) deleted the addition of total cash deposit, rather held the assessee as accommodation entry provider and assessed the commission income at the rate of 0.5% of the total cash deposits. The observation of the ld. CIT(A) is as follows:
10. The assessment order referred to you in the previous paragraphs makes it amply clear that the issue of the appellant being an entry provider working for a Commission in lieu of the deposits made in his bank accounts by certain unscrupulous persons has been looked into by the assessing officer. Since the facts of the case for the assessment year 2010-11 and 2011-12, therefore, there should be uniformity in the approach of the assessing officer. In any case adding back the entire amount of deposits to the taxable income of the opulent is an incorrect way approaching the situation. When there are frequent deposit and withdrawal rules in a bank in which has been held to be not genuine, the courts have help that taking the peak credits should be the best way. However, is the appellant has stated that he has worked as an accommodation entry provider and since this fact has been looked into and accepted by the assessing officer in the subsequent assessment year, I find no reason not to accept the appellants plea that he has just allowed is bank account to be used by other persons in return ascertain amount of commission. Therefore, appellant has earned commission at 05% the total amount deposited in his bank accounts. The Id. AO is directed to give effect to this order accordingly, and computer income of the appellant at 0.5% of the total deposits of Rs. 1,33,22,17,440.
The ld. CIT(A) in this case, in fact, has accepted the contention of the assessee that the entire cash deposited in his account did not belong to him, rather he was an accommodation entry provider. The ld. CIT(A) accordingly has assessed only commission income at the rate of 0.5% of the total cash deposits. Now, the assessee has Assessment Year: 2010-11 Shyam Sundar Sharma. contested the addition of commission income also. However, we do not find any reason to interfere with the order of the ld. CIT(A) and the same is upheld.
In the result, the appeal filed by the assessee is dismissed. Order is pronounced in the open court on 09.02.2022. Sd/- Sd/- [Rajesh Kumar] [Sanjay Garg] Accountant Member Judicial Member Dated: 09.02.2022 Bidhan (P.S.) Copy of the order forwarded to:
1. 1. Shyam Sundar Sharma, 4, Munshi Para Lane, Kolkata-700 006. 2. Income Tax Officer, Ward-37(4), Kolkata. 3. CIT(A)-11, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata.