M/s. Tarun Goyal, New Delhi v. ACIT, New Delhi

ITA 4636/DEL/2012 | 2003-2004
Pronouncement Date: 18-10-2013 | Result: Allowed

Appeal Details

RSA Number 463620114 RSA 2012
Assessee PAN AAPPG1505R
Bench Delhi
Appeal Number ITA 4636/DEL/2012
Duration Of Justice 1 year(s) 1 month(s) 19 day(s)
Appellant M/s. Tarun Goyal, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 18-10-2013
Date Of Final Hearing 30-09-2013
Next Hearing Date 30-09-2013
Assessment Year 2003-2004
Appeal Filed On 29-08-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R. P. TOLANI JUDICIAL MEMBER AND SHRI J. S. REDDY ACCOUNTANT MEMBER I.T.A. NOS. 4636 & 4637/DEL/2012 ASSESSMENT YEARS: 2003-04 & 2004-05 TARUN GOYAL VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI-110005 NEW DELHI. PAN: AAPPG1505R (APPELLANT) (RESPONDENT) I.T.A. NOS. 4527 TO 4531/DEL/2012 ASSESSMENT YEARS: 2004-05 TO 2008-09 M/S APARNA CREDITS PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AADCA8334K (APPELLANT) (RESPONDENT) I.T.A. NOS. 4613 & 4543- 4544 /DEL/2012 ASSESSMENT YEARS: 2007-08 TO 2009-10 M/S AQUARIUS SECURITIES PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AAECA5016F (APPELLANT) (RESPONDENT) I.T.A. NOS. 4538 TO 4540 /DEL/2012 ASSESSMENT YEARS: 2005-06 2006-07 & 2008-09 M/S ARIES CRAFTS PVT. LTD. VS. ACIT 2 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AADCA5439P (APPELLANT) (RESPONDENT) I.T.A. NO. 4614/DEL/2012 ASSESSMENT YEARS: 2004-05 M/S BHAVANI PORTFOLIO PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AADCA5439P (APPELLANT) (RESPONDENT) I.T.A. NOS. 4588-4590 & 4638/DEL/2012 ASSESSMENT YEARS: 2004-05 TO 2006-07 & 200 7-08 M/S CAMPARI FISCAL SERVICES PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AACCC1903B (APPELLANT) (RESPONDENT) I.T.A. NO. 4607/DEL/2012 ASSESSMENT YEARS: 2008-09 M/S CHEQUER MARKETING PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AACCC8709M (APPELLANT) (RESPONDENT) I.T.A. NOS. 4596-4599/DEL/2012 ASSESSMENT YEARS: 2005-06 TO 200 8-09 M/S COUNTRYWIDE CREDIT & SECURITIES VS. ACIT PVT. LTD. 4 TH FLOOR CENTRAL CIRCLE-4 13/34 W.E.A. KAROL BAGH NEW DELHI. 3 NEW DELHI.-110005 PAN: AABCC9595Q (APPELLANT) (RESPONDENT) I.T.A. NOS. 4608-4610 & 4646/DEL/2012 ASSESSMENT YEARS: 2005-06 TO 2007-08 & 2008-09 M/S DEEPSEA DRILLING PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AABCD6380N (APPELLANT) (RESPONDENT) I.T.A. NOS. 4591-4595/DEL/2012 ASSESSMENT YEARS: 2004-05 TO 2008- 09 M/S DELHI SHARE SHOPPE. LTD. VS. ACIT 4 TH FLOOR 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AABCD5060F (APPELLANT) (RESPONDENT) I.T.A. NOS. 4600 & 4601/DEL/2012 ASSESSMENT YEARS: 2003-04 & 2004-05 M/S DU SECURITIES PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AACCD0002E (APPELLANT) (RESPONDENT) I.T.A. NOS. 4602 TO 4606/DEL/2012 ASSESSMENT YEARS: 2004-05 TO 20 08-09 M/S DWARKA IMPEX PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. 4 PAN: AABCD6381P (APPELLANT) (RESPONDENT) I.T.A. NOS. 4533 TO 4537 4639-4640/DEL/2012 ASSESSMENT YEARS: 2004-05 TO 2007-08 & 2009-10 & 2003-04 & 2008-09 M/S KAROL BAGH TRADING LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AAACK0511D (APPELLANT) (RESPONDENT) I.T.A. NO. 4612/DEL/2012 ASSESSMENT YEARS: 2007-08 M/S MAHANIVESH PRATIBHUTI PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AADCM2286N (APPELLANT) (RESPONDENT) I.T.A. NOS. 4583 TO 4586/DEL/2012 ASSESSMENT YEARS: 2004-05 TO 20 07-08 M/S NEW DELHI ELECTRONICS PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AAACN0676L (APPELLANT) (RESPONDENT) I.T.A. NOS. 4541 4542 & 4611/DEL/2012 ASSESSMENT YEARS: 2007-08 TO 20 09-10 M/S RISHABH SHOES PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. 5 PAN: AAACCR2358D (APPELLANT) (RESPONDENT) I.T.A. NOS. 4629 TO 4634/DEL/2012 ASSESSMENT YEARS: 2003-04 TO 20 08-09 M/S SADGURU FINMAN PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AABCS4800J (APPELLANT) (RESPONDENT) I.T.A. NOS. 4643 & 4642/DEL/2012 ASSESSMENT YEARS: 2007-08 & 200 8-09 M/S SAI BABA FINVEST PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AAHCD6789E (APPELLANT) (RESPONDENT) I.T.A. NO. 4641/DEL/2012 ASSESSMENT YEARS: 2004-05 M/S TARUS IRON & STEEL CO.PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AABCT7170N (APPELLANT) (RESPONDENT) I.T.A. NOS. 4645 & 4644/DEL/2012 ASSESSMENT YEARS: 2003-04 & 200 4-05 M/S THAR STEEL PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. 6 PAN: AABCT5923D (APPELLANT) (RESPONDENT) I.T.A. NO. 4635/DEL/2012 ASSESSMENT YEARS: 2009-10 M/S VERTEX DRUGS PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AAACK0511D (APPELLANT) (RESPONDENT) I.T.A. NOS. 2522 & 2523/DEL/2012 ASSESSMENT YEARS: 2008-09 & 200 9-10 M/S CAMPARI FISCAL SERVICES PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AACCC1903B (APPELLANT) (RESPONDENT) I.T.A. NO. 2521/DEL/2012 ASSESSMENT YEARS: 2009-10 M/S KANHA FATS & OILS PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AACK2400M (APPELLANT) (RESPONDENT) I.T.A. NO. 2520/DEL/2012 ASSESSMENT YEARS: 2009-10 M/S ORDINARY FINANCIAL SERVICES VS. ACIT PVT. LTD. 13/34 W.E.A. KAROL BAGH CENTRAL CIRCL E-4 NEW DELHI.-110005 NEW DELHI. PAN: AAACO3637K 7 (APPELLANT) (RESPONDENT) I.T.A. NOS. 2527 TO 2533/DEL/2012 ASSESSMENT YEARS: 2003-04 TO 20 09-10 M/S MAHANIVESH (INDIA) LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AAACM1750C (APPELLANT) (RESPONDENT) I.T.A. NOS. 2524 TO 2526/DEL/2012 ASSESSMENT YEARS: 2006-07 2007-08 & 2009-10 M/S TEJASVI INVESTMENTS PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AABCT3249G (APPELLANT) (RESPONDENT) I.T.A. NOS. 3739 TO 3741/DEL/2012 ASSESSMENT YEARS: 2004-05 2005-06 & 200 8-09 M/S TEJASVI INVESTMENTS PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AABCT3249G (APPELLANT) (RESPONDENT) I.T.A. NOS. 3745 TO 3749/DEL/2012 ASSESSMENT YEARS: 2003-04 TO 2007-08 M/S ADONIS FINANCIAL SERVICES VS. ACIT PVT. LTD. 13/34 W.E.A. KAROL BAGH CENTRAL CIRCL E-4 NEW DELHI.-110005 NEW DELHI. PAN: AADCA5949G (APPELLANT) (RESPONDENT) I.T.A. NOS. 3750 TO 3753/DEL/2012 ASSESSMENT YEARS: 2005-06 TO 2008-09 8 M/S UNIQUE CAPITAL PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AAACU5693G (APPELLANT) (RESPONDENT) I.T.A. NOS. 3737 & 3738/DEL/2012 ASSESSMENT YEARS: 2005-06 & 2006-07 M/S VIVEK PLANTATIONS PVT. LTD. VS. ACIT 13/34 W.E.A. KAROL BAGH CENTRAL CIRCLE-4 NEW DELHI.-110005 NEW DELHI. PAN: AAACV2617D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. V. P. GUPTA ADV. REVENUE BY : DR. SUDHA KUMARI CIT. DR. ORDER PER BENCH : THESE ARE 94 APPEALS AND PERTAIN TO SHRI TARUN GOY AL GROUP. 2. THEY PERTAIN TO DIFFERENT ASSESSEE AND ARE DIREC TED AGAINST THE RESPECTIVE ORDER OF THE CIT (A) XXXIII NEW DELHI . AS COMMON ISSUES ARE INVOLVED AND AS THE PARTIES SOUGHT CLUBBING OF THE APPEALS WE HEARED THE APPEALS TOGETHER AND DISPOSE OFF THE SAME BY WAY OF THIS COMMON ORDER. 3. FACTS IN BRIEF: A SEARCH AND SEIZURE OPERATION W AS CARRIED OUT U/S 132 OF THE IT ACT 1961 ON TARUN GOYAL GROUP OF COMPANI ES ON 15.9.2008. MR. TARUN GOYAL IS A TAX CONSULTANT. HE WAS RUNNING A R ACKET OF PROVIDING 9 ACCOMMODATION ENTRIES. WE EXTRACT PARA 4 OF THE ASS ESSMENT ORDER OF SHRI TARUN GOYAL FOR AY 2004-05 DATED 24/12/2010 FOR REA DY REFERENCE AS THIS WOULD GIVE A GLIMPSE OF THE MODUS OPERANDI FOLLOWED BY THE ASSESSEE. 4. AT THE OUTSET IT WOULD BE PERTINENT TO MENTION THE MODUS OPERANDI OF THE ASSESSEE AND SH. TARUN GOYAL WHO WA S MANAGING THE COMPANY. (I) SH. TARUN GOYAL CREATED A NUMBER OF PRIVATE LTD . COMPANIES AND FIRMS FOR PROVIDING ACCOMMODATION ENTRIES. MORE THAN 90 COMPANIES WERE REGISTERED FRO M THE OFFICE PREMISES OF SH.TARUN GOYAL I.E. 13/34 W .E.A. ARYA SAMAJ ROAD KAROL BAGH NEW DELHI. THE DIRECTO RS OF THESE COMPANIES WERE HIS EMPLOYEES WHO WORKED I N HIS OFFICE AS PEONS CLERKS RECEPTIONIST ETC. ALL THE DOCUMENTS INCLUDING BLANK CHEQUES WERE GOT SIGNED F ROM THESE EMPLOYEES. A NUMBER OF BANK ACCOUNTS WERE GOT OPENED IN THE NAMES OF THESE COMPANIES AND HIS EMPLOYEES. (II) THE GENERAL MODUS OPERANDI WAS TO ACCEPT CASH FROM THE BENEFICIARY. THE CASH WAS DEPOSITED IN BANK ACCOUNT AND CHEQUES WERE ISSUED TO THE BENEFICIARIES. THE ASSES SEE IN ORDER TO DISGUISE HIS TRANSACTIONS AS GENUINE HAS B EEN FOLLOWING LAYERING OF ACCOUNTS WHERE IN CASH WAS INTRODUCED IN VARIOUS BANK ACCOUNTS OF THE ASSESSEE AND THROUGH MULTIPLE CHEQUE TRANSACTIONS PASSED FROM HI S 10 VARIOUS COMPANIES CHEQUES WERE ISSUED TO THE BENEFICIARIES FROM ONE OF HIS COMPANIES. (III) THE CHEQUES ISSUED WERE USUALLY SHOWN FOR THE FOLLOWING PURPOSES:- (A) SHARE CAPITAL INTRODUCTION. (B) INTRODUCTION OF CAPITAL AS ADVANCE THROUGH BOOKING OF FLATS ETC. THESE WERE LATER CANCELLED / TRANSFERRED ON ACCOUNT OF PAYMENT OF DEFAULT THERE BY REVERSING THE ENTRY. THIS IS CLEAR FROM THE PAPERS SEIZED DURING THE SEARCH. ONE OF THEM PAGE 120 OF ANNEXUR E-6 IS ATTACHED WITH THE ORDER FOR READY REFERENCE (ANN EXURE A-1 OF THIS ASSESSMENT ORDER). ALL COMPANIES OF TARUN GOYAL ARE HAVING COMMON ADDRESS I.E. 13/34 WEA ARYA SAMAJ ROAD KAROL BAG H NEW DELHI OR 203 DHAKA CHAMBER 2069/39 NAIWALA KAROL BAGH NEW DELHI. THE OFFICE SPACE AT 13/34 W EA ARYA SAMAJ ROAD 4 TH FLOOR KAROL BAGH NEW DELHI IS APPROX 440 SQFT AND MANY GROUP COMPANIES ARE REGISTERED AT THIS ADDRESS. THE EMPLOYEES WHO ARE A LSO DIRECTORS IN THESE COMPANIES ALSO DENIED TO HAVE AN Y KNOWLEDGE REGARDING CAPITAL AND ACTUAL WORKING OF T HESE COMPANIES AND ADMITTED THAT THEY ARE SERVANT / EMPLOYEES IN THIS GROUP OF COMPANIES AND GETTING SA LARY FROM SHRI TARUN GOYAL AND SIGN THE PAPERS AS PER HI S DIRECTION. THESE COMPANIES ARE REGISTERED WITH ROC AND MAIN BUSINESS OF MOST OF THE COMPANIES WAS REFLECTE D AS 11 SHARE TRADING AND INVESTMENTS. THERE WERE NO PHYSIC AL ASSETS OF THESE COMPANIES. IN FACT THESE ARE PAPER COMPANIES RUN BY SHRI TARUN GOYAL FOR PROVIDING ACCOMMODATION ENTRIES TO THE BENEFICIARIES BY TAKIN G CASH AND IN ORDER TO DISGUISE HIS TRANSACTION AS GE NUINE HAVE BEEN FOLLOWING LAYERING OF ACCOUNTS THROUGH TH ESE COMPANIES. 4. STATEMENTS WERE RECORDED FROM SHRI TARUN GOYAL A S WELL AS SOME OF THE DIRECTORS OF TARUN GOYAL GROUP OF COMPANIES. 5. MR. TARUN GOYAL CONFESSED AND ADMITTED TO THE CH ARGE OF PROVIDING ACCOMMODATION ENTRIES BY FLOATING NUMEROUS COMPANIE S AND FOLLOWING LAYERING OF ACCOUNTS AFTER CASH WAS INTRODUCED IN VARIOUS COMPANIES. 6. LETTER DATED 14.12.2010 GIVEN BY MR. TARUN GOYAL AS GIVEN BY THE AO IS EXTRACTED FOR READY REFERENCE: 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED VIDE LETTER DATED 14-12-2010 IT IS RESPECTFULLY SUBMITTED: 1. THAT THE INVESTIGATION WING OF THE DEPARTMENT DURING THE SEARCH PROCEEDINGS AND DURING THE POST SEARCH INVESTIGATIONS FRAMED THE CASE AGAINST THE UNDERSIGNED AND ITS GROUP OF COMPANIES THAT IT COLLECTED CASH FROM VARIOUS COMPANIES AND ISSUED CHEQUES IN LIEU THEREOF KNOWN AS ACCOMMODATION ENTRY. AND THAT THE UNDERSIGNED AND ITS 12 COMPANIES EARNED A COMMISSION ON THE SAID ACCOMMODATION ENTRY. IN ORDER TO HAVE A PEACE OF MIND AND TO SETTLE THE MATTER FOR ALL TIMES TO COME THE UNDERSIGNED AGREED TO THE COMMISSION INCOME AND ACCORDINGLY SURRENDERED THE COMMISSION INCOME ON ACCOMMODATION ENTRY OF RS.40 CRORES WITH A COMMISSION INCOME OF RS.10 LACS WHICH HAS BEEN ACCOUNTED FOR AS INCOME IN THE PERSONAL INCOME TAX RETURN OF THE UNDERSIGNED MR.TARUN GOYAL DURING THE YEAR OF THE SEARCH VIZ. A.Y. 2009- 10. 2. THAT A DETAIL OF ALL THE CASH DEPOSITS IN VARIOU S ACCOUNTS HAS ALREADY BEEN SUBMITTED BEFORE YOUR HONOR. 3. THAT THE COMMISSION CAN BE TAXED EITHER AT THE TIME OF CASH RECEIPT AND DEPOSIT IN THE BANK OR AT THE TIME OF ISSUE OF THE CHEQUES. THE SAME INCOME CAN NOT BE TAXED TWICE. 4. IT IS NOW REQUESTED THAT COMMISSION INCOME BE TAXED ONLY AT THE POINT OF CASH DEPOSIT BECAUSE ONLY THE TRANSACTIONS ORIGINATED WITH THE CASH DEPOSITS ARE THE ACCOMMODATION ENTRY TRANSACTIONS. OTHER TRANSACTIONS ARE THE GENUINE AND BONA FIDE BUSINESS TRANSACTIONS ON WHICH INCOME HAS ACCRUED AND ACCOUNTED FOR IN THE 13 BOOKS OF ACCOUNT OF EACH INDIVIDUAL COMPANY AND DULY EXPLAINED IN EACH CASH ACCORDINGLY. 5. THAT SINCE THE COMMISSION HAS ALREADY BEEN SURRENDERED AND OFFERED FOR TAX AT THE ENTRY POINT IT SHOULD NOT BE TAXED TWICE (AGAINST AT THE EXIT POINT). 6. THAT THE UNDERSIGNED AGREED AND OFFERED TO REVENUE IN THE VOLUNTARY DISCLOSURE AN ADDITION INCOME BY TREATING A COMMISSION @ RS.2.50 PER THOUSAND ON RS.40 CRORES OF ACCOMMODATION ENTRY WHEREBY A TOTAL ADDITIONAL INCOME OF RS.10 LACS WAS OFFERED FOR TAX IN THE VOLUNTARY DISCLOSURE. AN Y ADDITION BEYOND THIS WILL PUT AN UNDUE HARDSHIP ON THE UNDERSIGNED AND ITS GROUP OF COMPANIES AND WILL LEAD UNNECESSARY LITIGATION WASTE OF PRECIOUS TIME MONEY AND ENTRY. 7. NOTICES WERE ISSUED U/S 153A TO EACH OF THE ABOV E COMPANIES IN THE GROUP. IN RESPONSE THE ASSESSEES HAD FILED RETURNS OF INCOME U/S 139(1) R.W.S. 153A. THE AO COMPLETED ASSESSMENTS IN ALL THE CASES BY MAKING ADDITIONS ON ACCOUNT OF; A) UNDISCLOSED COMMISSION EARNED AND ; B) UNEXPLAINED CREDIT BEING CASH DEPOSITS ETC. U/S 68. 8. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APP EAL. 9. THE FIRST APPELLATE AUTHORITY DISMISSED ALL THE APPEALS. 10. AGGRIEVED THE ASSESSEES IS BEFORE US ON THE FOL LOWING GROUNDS: 14 1. THAT THE CIT (A) ERRED IN UPHOLDING THE ADDITIO N OF RS.50 84 400/- BEING THE CASH DEPOSITED IN THE BANK ACCOUNTS OF THE APPELLANT WITHOUT APPRECIATING THAT ADMITTEDLY THE APPELLANT WAS CARRYING ON THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES THROUGH BANK ACCOUNTS OF VARIOUS ENTITIES AS WELL AS HIS OWN BANK ACCOUNTS AND THE CASH WAS DEPOSITED IN THE BANK ACCOUNTS OF THE APPELLANT DURING THE COURSE OF THE ABOVE BUSINESS FOR PROVIDING ACCOMMODATION ENTRIES IN RESPECT OF WHICH COMMISSION INCOME HAD ALSO BEEN DECLARED IN HIS INCOME TAX RETURN FOR A.Y. 2009-10 AND THEREFORE CASH DEPOSITED COULD NOT BE ADDED UNDER SECTION 68 OF THE INCOME TAX ACT. 2. IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO GROU ND NO. 1 ONLY THE COMMISSION INCOME COULD BE CONSIDERED IN THE CASE OF THE APPELLANT FOR THE YEA R UNDER APPEAL NOTWITHSTANDING THAT THE APPELLANT HAD ALREADY VOLUNTARILY SURRENDERED INCOME ON ACCOUNT OF COMMISSION IN HIS INCOME TAX RETURN FOR A.Y. 2009-10 CALCULATED @ RS.2.50 PER THOUSAND. 3. THAT THE APPELLANT PRAYS FOR ADDITION / MODIFICATION OF ANY OF THE GROUNDS AT THAT TIME OF HEARING OF THE APPEAL. 11. WE HAVE HEARD MR. V.P. GUPTA THE LD. COUNSEL FO R THE ASSESSEE AT LENGTH. PAPERS BOOKS ARE FILED BY THE ASSESSEE IN S UPPORT OF HIS CONTENTIONS. 15 12. THE APPEALS HAVE BEEN CATEGORIZED INTO 5 GROUPS . THE COMMON GROUND IN ALL THE APPEALS IS THAT ADDITION CAN BE M ADE ONLY IN THE CASE OF TARUN GOYAL. IN 9 APPEALS ADDITION MADE ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT AND COMMISSION INCOME ARE DISPUTED. IN 80 APPEALS GROUNDS RELATE TO ADDITION ON ACCOUNT OF COMMISSION. 2 APPE ALS INVOLVE GROUNDS DISPUTING ADDITION OF CASH DEPOSIT. ONE APPEAL INVO LVE GROUNDS FOR ADDITION MADE ON ACCOUNT OF COMMISSION AND ENTRY GIVEN FOR P URCHASE OF FLATS. TWO APPEALS ARE OF MR. TARUN GOYAL. 13. SUBMISSIONS OF MR. V.P. GUPTA ARE AS FOLLOWS: 1. THAT ASSESSMENT HAS TO BE MADE AS A GROUP CONSIDERING THE FACTS IN TOTALITY AND NOT SEPARATEL Y FOR EACH OF THE ENTITIES; 2. THAT DEPOSITING OF CASH IN BANK ACCOUNTS FOR GRO UP ENTITIES IS PART OF BUSINESS OF PROVIDING ACCOMMODATION ENTRIES AND ACCORDINGLY NO ADDITION CAN BE MADE FOR THE CASH DEPOSITED; 3. THAT COMMISSION INCOME IS TO BE ADDED ONLY IN TH E CASE OF MR. TARUN GOYAL AND HE HAS ALREADY SURRENDERED INCOME ON ACCOUNT OF COMMISSION IN HIS RETURN OF INCOME FOR A.Y. 2009-10 AND ACCORDINGLY NO ADDITION IS CALLED FOR IN OTHER CASES; 16 4. COMMISSION INCOME IS TO BE DETERMINED ON THE BASIS OF QUANTUM OF CASH RECEIVED AND DEPOSITED IN DIFFERENT ENTITIES AS SAME REPRESENT THE AMOUNT OF ACCOMMODATION ENTRIES; AND 5. THAT THE RATE OF COMMISSION OF 2.25% IS EXCESSIV E AND UNREASONABLE AND THE PREVAILING RATE OF COMMISSION WAS 0.25% AS STATED BY MR. TARUN GOYAL IN HIS STATEMENT DURING THE COURSE OF SEARCH (PAGE 52 OF THE PAPER BOOK) AND ALSO DURING THE COURSE OF ASSESSMENT PROCEEDINGS PARA 1 AND 6 OF LETTER DATED 14.12.2010 (ASSESSMENT ORDER PAGE 7 PARA 5). 14. HE PRAYED AS FOLLOWS: A. THERE IS NO RATIONAL IN CONSIDERING EACH OF THE CASE INDEPENDENTLY AND ACCORDINGLY THIS HONBLE BENCH MAY BE PLEASED TO SET ASIDE THE ORDERS OF ASSESSMENTS UNDER APPEALS WITH THE DIRECTION THAT ASSESSMENT SHOULD BE MADE IN THE HANDS OF MR. TARUN GOYAL ONLY. IN SIMILAR CIRCUMSTANCES THE DEPARTMENT HAS MADE ASSESSMENTS ONLY IN THE HANDS OF THE PERSON CARRYING ON THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES [REFER DECISION IN THE CASE OF MANOJ AGGARWAL (SPECIAL BENCH OF 5 MEMBERS) AND DECISIONS OF ITAT DELHI IN THE CASES OF SANJAY KUMAR GARG AND SANJAY KUMAR RASTOGI- COPIES GIVEN IN THE CASE LAW COMPILATION]. 17 B. NO ADDITION ON ACCOUNT OF CASH DEPOSITED IN BANK ACCOUNTS CAN BE MADE U/S 68 OF THE ACT AS DEPOSITING OF CASH IS PART OF BUSINESS OF PROVIDING ACCOMMODATION ENTRIES (REFER DECISIONS REFERRED ABOVE). C. RATE OF COMMISSION PREVAILING IN THE TRADE WAS O F 25 PAISA PER HUNDRED AND THIS FACT IS CORROBORATED BY THE DECISION IN THE CASE OF MANOJ AGGARWAL AND SANJAY KUMAR GARG AND ALSO FROM THE FACTS STATED IN THE CASES OF MONEY GROWTH INVESTMENT (DELHI HIGH COURT) AND ANCHAL INFRASTRUCTURE (ASSESSMENT ORDER). D. THE AMOUNT OF COMMISSION SHOULD BE DETERMINED WITH REFERENCE TO AMOUNT OF CASH RECEIVED AND DEPOSITED IN BANK ACCOUNTS OF GROUP ENTITIES. 15. HE RELIED ON THE ASSESSMENT ORDER IN THE CASE O F MR. TARUN GOYAL FOR THE AY 2007-08 AND 2008-09 PASSED U/S 143(3) OF THE ACT AND POINTED OUT THAT THE AO HAS ACCEPTED COMMISSION INCOME AT THE R ATE OF DECLARED BY THE ASSESSEE AND PLEADED THAT THE SAME SHOULD BE ACCEPT ED IN EARLIER YEAR. 16. DR. SUDHA KUMARI LD. CIT DR ON THE OTHER HAND VEHEMENTLY OPPOSED THE CONTENTIONS OF THE ASSESSEE. SHE SUBMITTED THAT EACH ASSESSEE IS AN ARTIFICIAL JURISTIC PERSON IN LAW OR AN INDIVIDUAL AND THE REQUEST OF THE ASSESSEE TO FRAME A SINGLE ASSESSMENT IN ALL THE CA SES WOULD BE AGAINST LAW. SHE SUBMITTED THAT EACH ASSESSEE HAS TO NECESSARILY EXPLAIN EACH CREDITS IN 18 THE BOOKS OF ACCOUNT AND IN ABSENCE OF PROVING THE IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE CREDITOR; THE CREDIT IN QUE STIONED HAS TO BE ADDED AS INCOME U/S 68 OF THE ACT IN THE HANDS OF THE ASSES SEE IN WHOSE BOOKS THE ENTRY IS FOUND. SHE SUBMITTED THAT THE AO HAS CORRE CTLY DONE SUCH AN EXERCISE AND MADE ADDITIONS AND THE LD. CIT (A) HAS RIGHTLY UPHELD THE SAME. SHE COUNTERED EACH AND EVERY CONTENTION OF THE ASSE SSEE. 17. ON COMMISSION INCOME SHE SUBMITTED THAT THE PER CENTAGE ADOPTED BY THE AO WAS REASONABLE AND BASED ON MATERIAL AND TH AT THE ASSESSMENT ORDER OF SHRI TARUN GOYAL FOR THE ASSESSMENT YEAR 2007-08 AND 2008-09 WHERE COMMISSION @ 0.25% WAS NOT QUESTIONED OR INVESTIGA TED UPON BY THE AO CANNOT FORM THE BASIS FOR CLAIMING RELIEF IN THE EA RLIER ASSESSMENT YEARS. SHE SUBMITTED THAT THESE ASSESSMENT ORDERS DATED 30.3.2 013 FOR THE AY 2007-08 2008-09 AND 2009-10 ARE NOT SPEAKING ORDER ON THIS ISSUE AND THAT THE ACIT CENTRAL CIRCLE NOIDA PASSED THESE ORDER WITHOUT A PPLICATION OF MIND AND WITHOUT CONSIDERING THE MATERIAL ON RECORD OR FINDI NGS IN THE PREVIOUS ASSESSMENT YEARS AS CONFIRMED BY THE FIRST APPELLAT E AUTHORITY. SHE CONTENDED THAT SUCH NEGLIGENT ACTS OF A AO CANNOT B E RELIED AS A PRECEDENT. THOUGH NOT LEAVING HER GROUND ON A QUERY FOR THE B ENCH SHE SUBMITTED THAT IN CASE OF CIRCULAR TRANSACTION OR TRANSACTIONS WHE RE LAYERING OF THE SAME AMOUNT IS MADE MULTIPLE TIMES THE TRANSACTION IS T O BE TAXED ONLY AT THE FIRST 19 POINT AND THAT THE SUBSEQUENT TRANSFERS OF THE VERY SAME AMOUNT FROM ONE COMPANY TO ANOTHER BY WAY OF LAYERING CANNOT BE TA XED AT EACH POINT AS IT WOULD AMOUNT TO MULTIPLE TAXATION OF THE SAME AMOUN T. 18. IN REPLY THE LD. COUNSEL FOR THE ASSESSEE POINT ED OUT THE ASSESSMENT IN THE CASE OF TARUN GOYAL FOR SOME OF THE ASSESSMENT YEARS HAS NOT ATTAINED FINALITY AND THAT IT WOULD BE APPROPRIATE AND LEGAL LY CORRECT TO PASS ASSESSMENT ORDERS IN ALL THE GROUP CASES SIMULTANEO USLY BY CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES AND BY BRIN G TO TAX ONLY THE PEAK AMOUNT OF CREDIT AND BY ELIMINATING CIRCULAR TRANSA CTIONS. HE SUBMITTED THAT AS MR. TARUN GOYAL OFFERED THE ENTIRE INCOME TO TAX IN HIS HANDS NO SEPARATE ADDITION IS CALLED FOR IN ANY OF THE OTHER COMPANIE S AS THE CREDITS IN THOSE CASES STAND EXPLAINED. ON COMMISSION EARNED ON ISS UE OF ACCOMMODATION ENTRIES THE LD. COUNSEL REITERATED IN HIS CONTENTI ON. 19. RIVAL CONTENTION HEARD. ON A CAREFUL CONSIDERAT ION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND PERUSAL OF THE PAPERS ON RECORD IN THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE LAWS CITE D WE HOLD AS FOLLOWS. 20. THE UNDISPUTED FACT ACCEPTED BY THE ASSESSEE IS THAT MR. TARUN GOYAL WAS RUNNING A RACKET OF PROVIDING ACCOMMODATION ENT RIES BY FLOATING NUMEROUS COMPANIES. THE MODUS OPERANDI BROUGHT OUT BY THE AO IN THE ASSESSMENT ORDER IS NOT DISPUTED BY THE ASSESSEE. THE ONLY ISSUE BEFORE US IS 20 THE QUANTIFICATION OF THE INCOME IN THE HANDS OF MR . TARUN GOYAL AND EACH OF THE ENTITIES FORMED BY HIM. EACH COMPANY IS AN ASSE SSEE AND AN ASSESSMENT ORDER HAS TO BE PASSED SEPARATELY IN EACH CASE. THE CREDITS APPEARING IN THE BOOKS OF EACH ASSESSEE HAVE TO BE EXPLAINED BY THAT ASSESSEE. THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE CREDITOR HA S TO BE PROVED BY THAT PARTICULAR ASSESSEE AND IF THE SAME IS NOT PROVED ADDITION MAY BE MADE U/S 68. THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSE E THAT ALL THE ADDITIONS HAVE TO BE MADE ONLY IN THE HANDS OF MR. TARUN GOYA L IS NOT CORRECT AND HENCE CANNOT BE ACCEPTED. 21. THE CONTENTION THAT THE TOTALITY OF THE CIRCUMS TANCES HAVE TO BE CONSIDERED BY ARRIVING AT THE ASSESSABLE INCOME AND THAT WHEN THE FINDING IS THAT THE ASSESSEE HAS INDULGED IN CIRCULAR AND MULT IPLE TRANSACTIONS BY LAYERING WHAT CAN BE TAXED IS THE PEAK CREDIT AND THAT TOO AT THE FIRST POINT IS ACCEPTABLE AND SHOULD BE THE MANNER OF DETERMINING THE CORRECT INCOME. IF EACH OF THE LAYER IS BROUGHT OUT TAX THEN IT WOULD BE CASE OF LEVY OF INCOME TAX MULTIPLE NO. OF TIMES ON THE SAME AMOUNT. SUC H LEVY OF DOUBLE OR MULTIPLE TAXES IS AGAINST LAW AND IT WOULD NOT BE T HE RIGHT METHOD OF ARRIVING AT THE CORRECT AMOUNT OF INCOME. IF INCOME IS TAXED IN THE HANDS OF MR. TARUN GOYAL THE TAXED AMOUNT WHEN TRANSFERRED TO ANOTHER COMPANY SHOULD 21 BE TREATED AS EXPLAINED CREDIT. THE MULTIPLE TRANSF ER OF THIS AMOUNT SHOULD ALSO BE TREATED AS EXPLAINED. BUT THE BURDEN OF PRO OF LIES ON THE ASSESSEE. 22. ADMITTEDLY CERTAIN ASSESSMENT OF SHRI TARUN GOY AL THE KIN PIN ARE AT VARIOUS STAGES AND HAVE NOT REACHED THE TRIBUNAL. U NDER THESE CIRCUMSTANCES IT WOULD NOT BE POSSIBLE TO HAVE IN OVER ALL VIEW OF THE MATTER AND ELIMINATE CHAIN / MULTIPLE TRANSACTION FOR ARR IVING AT THE CORRECT ASSESSABLE AMOUNT. THUS WE HAVE NO OTHER ALTERNATIV E BUT TO SET ASIDE ALL THESE APPEALS TO THE FILE OF THE AO FOR FRESH ADJUD ICATION IN ACCORDANCE WITH LAW. 23. THE AO SHALL AFTER EXAMINING THE EVIDENCE SUBMI TTED BY THE ASSESSEE CONSIDER ALL THE CASES TOGETHER AND; A) RESTRICT THE ADDITION U/S 68 TO ONLY THE PEAK UN EXPLAINED CREDIT IN EACH CASE AFTER ELIMINATION CIRCULAR TRANSACTION. B) TO ELIMINATE TAXATION OF THE SAME AMOUNT MULTIPL E TIMES DUE TO THE CHAIN TRANSACTIONS WHICH RESULTED DUE TO LAYERING INDULGE D BY THE ASSESSEE. C) CONSIDERE THE MATERIAL ON RECORD AND THE PRECEDE NCE AVAILABLE ON THE ISSUE AND DETERMINE THE PERCENTAGE OF COMMISSION W HICH THE ASSESSEES WOULD HAVE EARNED AND BRING THE SAME TO TAX. 24. BEFORE PARTING WE MAKE IT CLEAR THAT THE BURDEN OF PROOF LAY ON THE ASSESSEE. IT IS FOR THE ASSESSEE TO DEMONSTRATE THE CHAIN OF TRANSACTION THE 22 LAYERING INDULGED BY HIM THE CALCULATION OF PEAK U NEXPLAINED CREDIT ETC. AND TO PROVE EACH CREDIT IN THE BOOKS OF EACH ASSESSEE. IN THE RESULT ALL THESE APPEALS ARE SET ASIDE TO THE FILE OF THE AO FOR FRE SH ADJUDICATION IN ACCORDANCE WITH LAW. 25. IN THE RESULT ALL THE APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/10/2013. SD/- SD/- ( R. P. TOLANI ) (J. S. REDDY) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: 18/10/2013 *AK VERMA* COPY FORWARDED TO: 1. ASSESSEE 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR