order : August 28 th , 2019 Per J. Sudhakar Reddy, AM :- Both these appeals filed by the revenue is directed against separate but identical orders of the Learned Commissioner of Income Tax (Appeals) Central I, Kolkata, (hereinafter the ld. CIT(A)), dt. 14/01/2014 & 24/01/2014 for the Assessment Years 2005-06 & 2006-07; respectively. Since the issues involved therein are common, the same have been heard together and are being disposed of by a single consolidated order.

2. None appeared on behalf of the assessee despite service of notice. There is no petition for adjournment. On earlier occasions also, none appeared for the assessee. Under these circumstances, we dispose off this appeal ex-parte qua the assessee, after hearing the ld. D/R.

3. The assessee is a company. It filed its return of income on 31/10/2005, declaring total income of Rs.910/-. The Assessing Officer completed the assessment u/s 143(3) of the on 31/12/2007 assessing the total income at Rs.7,21,95,910/- interalia making an addition of Rs.6,92,54,818/- being bank transactions, Rs.13,85,096/- being commission income and Rs.15,56,000/- being cash deposits in banks as unexplained. I.T.A. No. 788/Kol/2014 Assessment Year: 2005-06 & I.T.A. No. 789/Kol/2014 Assessment Year: 2006-07 M/s. Mrigya Electronics Industries (P) Ltd The assessee carried the matter in appeal. The ld. CIT(A) passed an ex-parte order and granted part relief. Similarly for the Assessment Year 2006-07, the assessment order was passed u/s 143(3) on 31/02/2008, interalia making additions of undisclosed income of Rs.21,25,00,000/- on protective basis and commission thereon @ 2% amounting to Rs.42,51,000/-. Further an addition of Rs.86,10,000/- has been made as unexplained cash deposits. On appeal, the ld. CIT(A) deleted the addition made on account of unexplained cash deposit and granted part relief.

4. Aggrieved the revenue is in appeal before us for both the Assessment Years.

5. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:-

6. We find that Ground Nos. 2 & 3 are common for both the Assessment Years. On Ground Nos. 1 & 2, the addition has been made on protective basis. The addition in question was of unexplained income.

7. We find that this Bench of the Tribunal in the case of Deputy Commissioner of Income Tax -Vs.- M/s. Apsara Fintrade Pvt. Limited in I.T.A. Nos. 404 & 405/KOL/2011 Assessment Years: 2006-2007 & 2007-2008 & I.T.A. No. 489/KOL/2013Assessment Year: 2008-2009, order dt. March 25, 2019, under identical facts and circumstances held as follows:-

5. We have heard the arguments of both the sides and also perused the relevant material available on record. The two common issues involved in all these three appeals relate to the deletion by the ld. CIT(Appeals) of the additions made by the Assessing Officer on account of alleged accommodation entries given to the Mumbai based Companies on protective basis and the deletion by the ld. CIT(Appeals) of the addition made by the Assessing Officer on account of commission income allegedly received by the assessee for giving accommodation entries. It is observed that the similar issues were involved in some other cases and all these cases were adjourned in the past and also blocked for some period for getting the information about the status or outcome of the cases where the similar amounts were added on substantive basis. Inspite of I.T.A. No. 788/Kol/2014 Assessment Year: 2005-06 & I.T.A. No. 789/Kol/2014 Assessment Year: 2006-07 M/s. Mrigya Electronics Industries (P) Ltd sufficient time given to both the parties, they have failed to furnish the said information. It is well settled that protective assessment is permissible in law and in case a doubt or ambiguity about real entity in whose hands a particular income is to be assessed, the assessing authority is entitled to have recourse to make a protective assessment. As held by the Honble Supreme Court in the case of Lalji Haridas vs.- ITO (43 ITR 387) , the Officer may, when in doubt, to safeguard the interest of the revenue can assess it in more than one hand but this procedure can be permitted only at the stage of assessment. Protective assessment becomes redundant when the substantive assessment becomes final and if the substantive assessment fails, it is protective assessment which is to be treated as substantive. Keeping in view this corollary between the substantive assessment and protective assessment, an appeal against the protective assessment should ordinarily await the outcome of the substantive assessment so that the protective assessment can be inconformity with the substantive assessment. In the case of CIT vs.- Surendra Gulab Chand Modi (140 ITR 517), the appeal arising out of the protective assessment was disposed of by the appellate authority i.e. Tribunal vacating the protective assessment without waiting for the final outcome of the proceedings arising from the substantive assessment, which matter was pending in the Honble Supreme Court. The Honble Gujarat High Court held that the Tribunal was not justified in proceeding with the matter and in disposing of it instead of blocking it till the disposal of the matter pending in the Honble Supreme Court in order to bring it inconformity with the view of the Honble Supreme Court. The Honble Gujarat High Court accordingly directed the Tribunal to keep the matter alive and pending awaiting the decision of the Honble Supreme Court in the proceedings arising from the substantive assessment.

6. In the present case, the ld. CIT(Appeals) did not await the outcome of the proceedings arising from the substantive assessment and since the said information was not forthcoming even after a considerable period from the concerned assessing officer, he proceeded to dispose of the appeals arising from the protective assessments by his impugned orders and deleted the addition made on protective basis without awaiting the final outcome of the proceedings arising from the substantive assessment. Keeping in view the decision of the Honble Gujarat High Court in the case of CIT vs.- Surendra Gulab Chand Modi (supra), we hold that the ld. CIT(Appeals) was not justified in deleting the additions made by the Assessing Officer on protective basis in all the three years under consideration without awaiting for the final outcome of the proceedings arising from this substantive assessment. We, therefore, set aside the impugned orders of the ld. CIT(Appeals) on this issue and remit the matter back to him for keeping it alive and pending till the outcome of the proceedings arising from the substantive assessment. I.T.A. No. 788/Kol/2014 Assessment Year: 2005-06 & I.T.A. No. 789/Kol/2014 Assessment Year: 2006-07 M/s. Mrigya Electronics Industries (P) Ltd

7. As regards the issue relating to the additions made on account of commission income allegedly received by the assessee for giving accommodation entries, we find that this issue is consequential to the issue relating to the addition made on protective basis on account of accommodation entries allegedly given by the assessee-company to the Mumbai based companies. Since the said issue is remitted back by us to the ld. CIT(Appeals), we also remit the consequential issue relating to addition on account of commission income back to the ld. CIT(Appeals) for deciding the same afresh. Grounds No. 1 & 2 of the Revenues appeals for all the three years under consideration are accordingly treated as allowed for statistical purposes.

8. As regards the remaining third issue relating to the deletion by the ld. CIT(Appeals) of the addition of Rs.4,80,000/- made by the Assessing Officer on account of unexplained cash deposits found to be made in the Bank account of the assessee, which is involved in A.Y. 2006-07, we find that the impugned cash deposits were claimed to be made by the assessee out of cash balances available in the cash book on the respective dates. The said cash book was also produced by the assessee before the Assessing Officer for verification. The Assessing Officer, however, still did not accept this explanation of the assessee and proceeded to treat the cash deposits found to be made in the bank account of the assessee as unexplained. It is observed that the ld. CIT(Appeals), however, found that sufficient cash balance was available with the assessee as per the cash book on the respective dates to make the deposits in the bank account and accordingly deleted the addition made by the Assessing Officer on this issue. At the time of hearing before the Tribunal, nothing has been brought on record to rebut or controvert the finding of fact recorded by the ld. CIT(Appeals) on verification of relevant cash book. We, therefore, find no infirmity in the impugned order of the ld. CIT(Appeals) deleting the addition made by the Assessing Officer on this issue.

9. In the result, the appeal of the Revenue for A.Y. 2006-07 is partly allowed for statistical purposes, while the appeals of the Revenue for A.Ys. 2007-08 & 2008-09 are treated as allowed for statistical purposes.

8. As the facts of this case is identical to the facts of the case on hand, we apply the propositions of law laid down in the order of the Tribunal while setting aside Ground Nos. 1 and 2 of the revenues appeal for both the Assessment Year to the file of the ld. CIT(A) for deciding the same afresh, by applying the order of the Tribunal in the case of Deputy Commissioner of Income Tax -Vs.- M/s. Apsara Fintrade Pvt. Limited (supra). I.T.A. No. 788/Kol/2014 Assessment Year: 2005-06 & I.T.A. No. 789/Kol/2014 Assessment Year: 2006-07 M/s. Mrigya Electronics Industries (P) Ltd

9. Ground No. 3, is against the deletion of addition made by the Assessing Officer, on account of unexplained cash deposits found to be made in the Bank account of the assessee for both the Assessment Years. The ld. CIT(A) deleted the addition by holding that the assessee has produced all the required evidence such as bank statements, cash book as well as invoices etc., in support of its contentions and the Assessing Officer has not adverse material to support the addition. It was also pointed out that there was not adverse finding or comment by the Assessing Officer in the remand report. The cash deposits in question was verifiable from the cash book. These factual findings could not be controverted by the ld. D/R. Hence we uphold the order of the ld. CIT(A) and dismiss this ground of the revenue for both the Assessment Years.

10. Ground No. 4 is general in nature.

11. In the result, both the appeals of the revenue are allowed for statistical purposes. Kolkata, the 28 th day of August, 2019. Sd/- Sd/- [S.S. Viswanethra Ravi] [J. Sudhakar Reddy] Judicial Member Accountant Member Dated : 28.08.2019 {SC SPS} I.T.A. No. 788/Kol/2014 Assessment Year: 2005-06 & I.T.A. No. 789/Kol/2014 Assessment Year: 2006-07 M/s. Mrigya Electronics Industries (P) Ltd Copy of the order forwarded to:

1. M/s. Mrigya Electronics Industries (P) Ltd P-41, Princep Street Kolkata 700 001

2. Deputy Commissioner of Income Tax, Central Circle--X, Kolkata

3. CIT(A)-

4. CIT- ,

5. CIT(DR), Kolkata Benches, Kolkata. True copy By order Assistant Registrar ITAT, Kolkata Benches