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PRO COMMISSIONER OFINCOME TAX Appellant
Through: Mr.Kamal Sawhney,Senior Standing Counsel,Mr.Raghvendra Singh,Junior Standing counsel with Mr.Shikhar Dhawan,Advoeate
2015:DHC:11768-DB And
Through:Mr.Kamal Sawhney,Senior Standing
HON'BLE MR.JUSTICE VIBHU BAKHRU
29.09.2015 CM AFP No.18260 of2015(exeniptionl in ITA No.683 of2015
CM AFP No.18268 of2015(exemptionl in ITA No.684 of2015
CM AFP No.18271 of2015(exemDtionl in ITA No.685 of2015
CM APP No.18289 of2015rexeniptionl in ITA No.686 of2015
1.Allowed,subjectto alljust exceptions.
2.The applications stand disposed of.
ITA No.683 of2015 ITA No.684 of2015 ITA No.685 of2015
ITA No.686 of2015
ORDER
3. These appeals by the Revenue are directed against a common order dated 28^ January 2015 passed by the Income Tax Appellate Tribunal(TTAT') ITA Nos.683,684,685&686/2015 Page2of[5] for the Assessment Year('AY')2008-09.
4. The common issue in all the appeals issues concerns the additions made under Section 68 ofthe Income Tax Act('Act') which was directed to be deleted by theITAT.
5. A survey was conducted by the investigation wing of the Department under Section 133A ofthe Act in the office premises ofone Mr.S.K. Gupta who was in the business of providing accommodation entries to various persons. During the survey, several documents, papers, laptops containing the accounts ofseveral parties were impounded.An application was filed by Mr. Gupta before the Settlement Commission in which he admitted to carrying on the business of providing accommodation entries on which commission/brokerage wasreceived by him.
6. The ITAT referred to the order dated 28^ December 2010 of the Settlement Commission which records inter alia that Mr. Gupta was an entry provider and that in his case only the amount ofpremium/commission received by him after reducing expenses incurred would be his additional income. The order of the Settlement Commission also gave a list of the concerns controlled by Mr. Gupta which included the present Assessees. ITA Nos.683,684,685&686/2015 Page3of[5] These companies/entities were used by Mr. Gupta as conduit for issue of cheques to the beneficiaries.
7. The Assessing Officer(AO)gave effect to the order of the Settlement Commission and determined the income ofMr. S.K. Gupta without making any addition for unexplained cash credit. During the course ofassessment Proceedings of the intermediary companies, including the Respondent Assessees,the AO sought directions from the Additional Commissioner of Income Tax under Section 144-A. The Additional CIT passed an order in which after discussing the facts he inter alia directed that it would be in the best interest of the Revenue to tax these transactions in the hands of beneficiaries and Mr. S.K. Gupta "without making any additions on this account in the hands ofconduit entities". The said orders ofthe Settlement Commission or ofthe Additional CIT were binding on the AO.
8. It is not in dispute that the Respondent Assessees are the conduit entities and not the beneficiaries. Consequently, the order ofthe ITAT deleting the addition under Section 68 ofthe Actin their hands does not suffer from any legal infirmity. ITA Nos.683,684,685&686/2015 Page4of[5]
9. No substantial question oflaw arises for consideration.
10. The appeals are dismissed.
S.MURALIDHAR,J SEPTEMBER 29,2015 mg VIBHU BAKHRU,J