Appeal Details
Counselvise Citation
[2019] 118 COUNSELVISE.COM (IT) 6245 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
29-01-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2011-2012
Appeal Filed On
05-11-2018
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S A, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 1024/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 M/S MULTIMETALS LIMITED, PLOT NO. 6 AND 7, HEAVY INDUSTRIAL AREA, KANSUA ROAD, KOTA. CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1100/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S MULTIMETALS LIMITED, PLOT NO. 6/7, C-BLOCK, HEAVY INDUSTRIAL AREA, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1101/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S MULTIMETALS LIMITED, PLOT NO. 6/7, C-BLOCK, HEAVY INDUSTRIAL AREA, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 2 IZR;K{KSI.K @ C.O. NO. 38/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 1101/JP/2018) FU/KZKJ.K O'K Z @ ASSESSMENT YEARS 2011-12 M/S MULTIMETALS LIMITED, PLOT NO. 6 AND 7, HEAVY INDUSTRIAL AREA, KANSUA ROAD, KOTA. CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1102/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2012-13 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S MULTIMETALS LIMITED, PLOT NO. 6/7, C-BLOCK, HEAVY INDUSTRIAL AREA, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT IZR;K{KSI.K @ C.O. NO. 39/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 1102/JP/2018) FU/KZKJ.K O'K Z @ ASSESSMENT YEARS 2012-13 M/S MULTIMETALS LIMITED, PLOT NO. 6 AND 7, HEAVY INDUSTRIAL AREA, KANSUA ROAD, KOTA. CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1025/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 M/S MULTIMETALS LIMITED, PLOT NO. 6 AND 7, HEAVY INDUSTRIAL AREA, KANSUA ROAD, KOTA. CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 3 VK;DJ VIHY LA-@ ITA NO. 1103/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S MULTIMETALS LIMITED, PLOT NO. 6/7, C-BLOCK, HEAVY INDUSTRIAL AREA, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1026/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2015-16 M/S MULTIMETALS LIMITED, PLOT NO. 6 AND 7, HEAVY INDUSTRIAL AREA, KANSUA ROAD, KOTA. CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1104/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2015-16 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S MULTIMETALS LIMITED, PLOT NO. 6/7, C-BLOCK, HEAVY INDUSTRIAL AREA, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1230/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2016-17 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S MULTIMETALS LIMITED, PLOT NO. 6/7, C-BLOCK, HEAVY INDUSTRIAL AREA, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 4 FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) & SHRI GULSHAN AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17/01/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 29/01/2019 VKNS'K@ ORDER PER: BENCH THESE ARE SIX APPEALS BY THE REVENUE FOR THE A.YS. 2010-11 TO 2013- 14, 2015-16 AND 2016-17, THREE CROSS APPEALS BY THE ASSESSEE FOR THE A.Y. 2010-11, 2013-14 AND 2015-16 AND TWO CROSS OBJECTION S BY THE ASSESSEE FOR THE A.Y. 2011-12 AND 2012-13 RESPECTIVELY ARISI NG FROM THE ASSESSMENT FRAMED IN PURSUANT TO THE SEARCH AND SEIZURE ACTION U/S 132 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSMENT FOR THE A.Y. 2010-11 TO 2013-14 AND 2015-16 WERE FRAMED U/S 153A OF THE ACT WHEREAS THE ASSESSMENT FOR THE A.Y. 2016-17 WAS PASSED U/S 143(3 ) READ WITH SECTION 153B(1)(B) OF THE ACT. 2. ALL THE APPEALS AS WELL AS THE CROSS OBJECTIONS A RE BEING HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, A COMPOSI TE ORDER IS BEING PASSED. 3. THE ASSESSEE IS A GROUP CONCERN OF KOTA DALL MILL (KDM) GROUP AND SUBJECTED TO THE SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT CARRIED OUT ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 5 ON 02/5/2017. THE ASSESSING OFFICER INITIATED THE PR OCEEDINGS U/S 153A OF THE ACT IN PURSUANT TO THE SEARCH FOR THE A.Y. 2010 -11 TO 2013-14 AND 2015-16 AND MADE VARIOUS ADDITIONS U/S 68 OF THE AC T ON ACCOUNT OF UNSECURED LOANS, SPECIAL DEPOSITS AGAINST THE ISSUE OF PREFERENTIAL EQUITY SHARES TREATING THE SAME AS ACCOMMODATION ENTRIES A VAILED BY THE ASSESSEE FROM THE ENTRY PROVIDERS. THE ASSESSEE CHAL LENGED THE ORDERS PASSED BY THE ASSESSING OFFICER BEFORE THE LD. CIT( A) AND CONTENDED THAT THE ASSESSING OFFICER HAS MADE THE ADDITION MERELY ON THE BASIS OF THE STATEMENTS RECORDED BY THE INVESTIGATION WING, KOLK ATA AND WITHOUT ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE S EARCH AND SEIZURE ACTION IN THE CASE OF THE ASSESSEE. THE ASSESSEE ALSO RAISE D OBJECTION AGAINST THE ADDITIONS MADE BY THE ASSESSING OFFICER ON THE GROU ND THAT THE ASSESSEE WAS NOT GIVEN AN OPPORTUNITY OF CROSS EXAMINATION OF THE WITNESSES WHOSE STATEMENT WAS RELIED UPON BY THE ASSESSING OFFICER W HILE PASSING THE ASSESSMENTS. THE LD. CIT(A) DID NOT ACCEPT THESE OBJ ECTIONS RAISED BY THE ASSESSEE, HOWEVER, ON MERITS OF THE ADDITION, THE LD . CIT(A) HAS DELETED THE MAJOR PART OF THE ADDITION FOR WHICH THE ASSESSI NG OFFICER WAS NOT HAVING ANY MATERIAL IN HIS POSSESSION BUT CONFIRMED THE ADDITION IN RESPECT OF WHICH THE STATEMENT OF THE ALLEGED ENTRY PROVIDE R WAS WITH THE ASSESSING OFFICER. THUS, BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE AGGRIEVED BY THE IMPUGNED ORDERS OF THE LD. CIT(A) A ND FILED THE CROSS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 6 APPEALS AS WELL AS THE CROSS OBJECTIONS FOR THE RESP ECTIVE ASSESSMENT YEARS. 4. ASSESSMENTS FOR THE A.Y. 2010-11 TO 2012-13 WERE COMPLETED AND NOT PENDING ON THE DATE OF SEARCH AND THEREFORE, CO MMON GROUND ARE RAISED BY THE ASSESSEE IN RESPECT OF THESE THREE AS SESSMENT YEARS AGAINST THE ADDITIONS MADE BY THE ASSESSING OFFICER FOR WANT OF ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE SEARCH AND SEIZ URE ACTION. 5. FIRST WE TAKE UP THE ASSESSEES APPEALS AS WELL AS CROSS APPEAL OF THE REVENUE WHEREIN THE ASSESSEE HAS RAISED COMMON GROUNDS EXCEPT THE ADDITION SUSTAINED BY THE LD. CIT(A) VARIES FROM YEA R TO YEAR. IN THE APPEAL FOR THE A.Y. 2010-11, THE ASSESSEE HAS RAISED FOLLO WING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ORDER PASSED U/S 153 A READ WITH SECTION 143(3) OF THE IN COME TAX ACT 1961 IS BAD IN LAW, VOID AB-INITIO, AND DESERVES TO BE ANNU LLED AS THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS NOT ABATED AS ON THE DATE OF SEARCH AND CIT (A) ERRED IN HOLDING THAT THE CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED IN VIEW OF SLPS ADMITTED IN VARIOUS CAS ES. THE ID. CIT (A) FURTHER ERRED IN HOLDING THAT THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PER RELEVANT GROUND OF APPEAL HENCE THE I SSUE REMAINS FOR ACADEMIC DISCUSSION ONLY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT (A) ERRED IN NOT DECLARING THE ASSESSMENT ORDER AS BAD IN LAW AND VOID AB INITIO. THE FINDINGS OF ID CIT(A) IN THIS REGARD AR E PERVERSE AND ERRONEOUS. IT IS CONTENDED THAT THE ID. AO PASSED THE ASSESSME NT ORDER AGAINST THE DOCTRINE OF AUDI ALTERM PARTEM, VIOLATING THE PRI NCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPPORTUNITY OF CROSS EXA MINATION OF THE ALLEGED ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 7 ACCOMMODATION ENTRY PROVIDERS, THEREFORE THE ASSESS MENT ORDER OUGHT TO HELD AS BAD IN LAW AND DESERVES TO BE ANNULLED. 3. THAT THE ORDER OF THE ID CIT (A), CONFIRMING THE ADDITION MADE BY THE AO IS ARBITRARY, WHIMSICAL, CAPRICIOUS, PERVERSE, BASE D ON NO EVIDENCE OR IRRELEVANT MATERIAL OR IRRELEVANT EVIDENCE, AND AGA INST THE LAW AND FACTS OF THE CASE. THE ADDITION CONFIRMED BY ID. CIT (A) DESERVES TO BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT (A) ERRED IN CONFIRMING THE ADDITIONS MADE U/S 68 O F THE INCOME TAX ACT, 1961 BY: - (A) SOLELY RELYING ON THE STATEMENTS OF SOME ALLEGE D ACCOMMODATION ENTRY PROVIDERS RECORDED BY SOME OTHER AUTHORITIES IN SOME OTHER CASES/ACTIONS AND THE OPPORTUNITY TO CROSS EXAMINAT ION WAS ALSO NOT PROVIDED TO ASSESSEE. (B) GIVING A CONTRADICTORY FINDING THAT A DOUBT IS RAISED ON THE IDENTITY AND GENUINENESS OF THE COMPANY WHOSE NAME IS MENTIO NED IN THE STATEMENT OF ACCOMMODATION ENTRY PROVIDERS AS WELL AS REPORTS OF DDIT (INV.)-KOLKATTA. (C) HOLDING THAT THE ASSESSEE HAS NOT ADDUCED ANY E VIDENCE TO REBUT THE ADVERSE FACTUAL FINDING MADE BY THE AO IN THE A SSESSMENT ORDER THOUGH DETAILED PAPER BOOK FOR RELEVANT AY AND COMM ON PAPER BOOKS HAVE BEEN SUBMITTED, AND (D) HOLDING THAT INCRIMINATING MATERIAL HAD BEEN FO UND DURING THE COURSE OF SEARCH OF ACCOMMODATION ENTRY PROVIDER. F URTHER INCRIMINATING MATERIAL HAD BEEN GATHERED BY ISSUING COMMISSION TO DDIT (INV.) KOLKATTA. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(A) ERRED IN CONFIRMATION THE ADDITION OF RS. 25 ,71,25,000/- MADE BY ID. AO U/S 68 OF INCOME TAX ACT, 1961 ON ACCOUNT OF UNSECURED LOANS TAKEN FROM FOLLOWING PARTIES AND ERRONEOUSLY HELD T HAT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE UNDER MENTI ONED COMPANY IS DOUBTFUL: - ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 8 NAME OF THE COMPANY FROM WHOM LOAN RECEIVED AMOUNT NAME OF ALLEGED ENTRY OPERATOR WHOSE STATEMENT WERE RELIED JALSAGAR COMMERCE PVT. LTD 25,71,25,000 SHRI ANAND SHARMA 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(A) ERRED IN REJECTING THE THEORY OF PEAK CREDIT AND ERRED IN NOT ALLOWING THE BENEFIT OF TELESCOPING, RECYCLING AND ROTATION OF FUNDS. 7. THE ASSESSEE PRAYS FOR LEAVE TO ADD, TO AMEND, T O DELETE, OR MODIFY THE ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE THE HEARI NG OF APPEAL. 6. GROUND NO. 1 OF THE APPEAL IS REGARDING THE VALI DITY OF REASSESSMENT OF INCOME OF THE ASSESSEE U/S 153A OF THE ACT FOR WA NT OF INCRIMINATING MATERIAL. THIS ISSUE IS COMMON FOR THE A.Y. 2010-11 TO 2013-14. THE ASSESSEE IS A PUBLIC LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MANUFACTURING OF NONFERROUS METAL TUBES RODS AND SE CTIONS. THE ASSESSEE FILED ITS RETURN OF INCOME U/S 139(1) OF THE ACT ON 26/9/2010 WHICH WAS SUBJECTED TO SCRUTINY ASSESSMENT U/S 143(3) ON 08/3 /2013. SIMILARLY THE ASSESSMENT FOR THE A.Y. 2011-12 WAS ALSO COMPLETED U /S 143(3) OF THE ACT ON 30/3/2014 AND FOR THE A.Y. 2012-13 ON 21/3/2015. THUS IT IS CLEAR THAT ON THE DATE OF SEARCH I.E. 02/07/2015, THE ASSESSME NT FOR ALL THE THREE YEARS WERE COMPLETED U/S 143(3) OF THE ACT AND WERE N OT PENDING AND CONSEQUENTLY THE ASSESSMENT FOR THESE THREE YEARS WE RE NOT GOT ABATED BY VIRTUE OF SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT. THE LD. CIT(A) THOUGH ACCEPTED THE FACT THAT THERE WAS NO INCRIMINA TING MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTI ON TO SUPPORT THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 9 ADDITIONS IN QUESTION. HOWEVER, THE LD. CIT(A) HAS RE JECTED THE OBJECTION OF THE ASSESSEE ON THE GROUND THAT THE SLP FILED BY THE REVENUE AGAINST THE DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. KABUL CHAWLA 380 ITR 573 IS PENDING BEFORE THE HON'BLE SUPR EME COURT. 7. BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITT ED THAT IN COMPLIANCE TO THE NOTICE U/S 153A OF THE ACT, THE A SSESSEE SUBMITTED ITS RETURN OF INCOME AND DECLARED THE TOTAL INCOME AS I T WAS DECLARED IN THE ORIGINAL RETURN OF INCOME. THE ASSESSING OFFICER HAS MADE THE ADDITION U/S 68 OF THE ACT ON THE BASIS OF THE STATEMENT OF SHRI ANAND SHARMA AND IN SOME CASES ON THE BASIS OF STATEMENT OF SHRI ANKIT BAGRI WITHOUT ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE C OURSE OF SEARCH AND SEIZURE ACTION. THUS, THE LD AR HAS CONTENDED THAT T HE ASSESSING OFFICER IS NOT EMPOWERED TO MAKE ANY ADDITION IN THE TOTAL INCO ME OF THE ASSESSEE WHICH WAS ASSESSED WHILE PASSING THE ASSESSMENT ORDER U/S 143(3) OF THE ACT. HE HAS CONTENDED THAT IT IS SETTLED PRINCIPLES OF LAW THAT THERE CANNOT BE A REVIEW UNDER THE GARB OF REASSESSMENT PROCEEDIN GS U/S 153A OF THE ACT AND THEREFORE, THE PROPOSED REASSESSMENT PROCEE DINGS ARE ABSOLUTELY IN ABUSE OF PROCESS OF LAW, ILLEGAL AND INVALID. THE PROVISIONS OF SECTION 153A OF THE ACT CANNOT BE APPLIED IN RESPECT OF ASS ESSMENT WHICH HAS ALREADY BEEN COMPLETED UNLESS SOME INCRIMINATING MA TERIAL/INFORMATION COMES TO THE POSSESSION/KNOWLEDGE OF THE ASSESSING O FFICER DURING THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 10 COURSE OF SEARCH PROCEEDINGS. SINCE THE ASSESSMENT FOR THESE THREE ASSESSMENT YEARS WERE NOT PENDING AS ON THE DATE OF SEARCH AND SEIZURE AND THERE IS NO INCRIMINATING MATERIAL FOUND OR SEI ZED DURING THE COURSE OF SEARCH THEN THE ASSESSING OFFICER IS BOUND TO REASS ESS THE TOTAL INCOME AS IT WAS ASSESSED ON THE ORIGINAL RETURN OF INCOME. THO UGH THE ASSESSING OFFICER IS LEGALLY BOUND TO ASSESS OR REASSESS THE TOTAL INCOME OF SIX YEARS IMMEDIATELY PRECEDING TO THE YEAR OF SEARCH, HOWEVER , THE ASSESSMENTS WHICH ARE PENDING ON THE DATE OF SEARCH GETS ABATED AND THE ASSESSMENTS WHICH WERE NOT PENDING ON THE DATE OF SEARCH HAD ATTA INED THE FINALITY AND, THEREFORE, THE ADDITION OVER AND ABOVE THE ASS ESSED INCOME CANNOT BE MADE DE HORS THE INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH WHILE COMPLETING THE ASSESSMENT UNDER SECTION 153A O F THE ACT. IF THERE IS NO INCRIMINATING MATERIAL THEN THE ORIGINAL ASSESSM ENT MADE CAN BE REITERATED AND NO FURTHER ADDITION IS CALLED FOR OT HERWISE ADDITION CAN ONLY BE MADE ON THE BASIS OF UNDISCLOSED INCOME DERIVED FROM MATERIAL/DOCUMENTS SEIZED AS A RESULT OF SEARCH. T HE COMPLETED ASSESSMENT CAN BE INTERFERED OR DISTURBED BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND REQUISITION OF INCOME DISCLOSING UNDISCLOSED INCOME NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. THEREFORE, IN THE ABS ENCE OF ANY ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 11 INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE C OURSE OF SEARCH AND SEIZURE PROCEEDINGS, THE ADDITIONS MADE BY THE AO D URING THE COURSE OF REASSESSMENT UNDER SECTION 153A OF THE ACT ARE WITHO UT JURISDICTION AND LIABLE TO BE DELETED. IN SUPPORT OF HIS CONTENTION THE LD. A/R HAS RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN CA SE OF KABUL CHAWLA, 380 ITR 573 (DELHI) AND SUBMITTED THAT HONBLE HIGH COUR T HAS HELD THAT IN CASE OF COMPLETED ASSESSMENT NOT ABATED BY VIRTUE O F SEARCH UNDER SECTION 132 OF THE ACT IN THE ABSENCE OF ANY INCRIM INATING MATERIAL, THE SAME CAN BE REITERATED AND, THEREFORE, NO ADDITION COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. THE LD. A/R HAS ALS O RELIED UPON THE FOLLOWING DECISIONS :- 1. PRINCIPAL CIT VS. KURELE PAPER MILLS PVT. LTD. (2016) 380 ITR 571 (DELHI) SLP FILED BEFORE THE HONBLE SUPREME COURT WAS D ISMISSED VIDE ORDER DATED 07.12.2015. 2. PRINCIPAL CIT VS. MEETA GUTGUTIA (2017) 395 ITR 526 (DELHI) SLP FILED BEFORE THE HONBLE SUPREME COURT WAS D ISMISSED VIDE ORDER DATED 2 ND JULY, 2018. 3. JAI STEEL (INDIA) VS. ACIT (2013) 219 TAXMAN 223 (RAJ.) THUS THE LD. A/R HAS SUBMITTED THAT THE HONBLE JURI SDICTIONAL HIGH COURT HAS HELD THAT THE REQUIREMENT OF ASSESSMENT OR REAS SESSMENT UNDER SECTION 153A HAS TO BE READ IN THE CONTEXT OF SECTI ON 132 OR 132A OF THE IT ACT, IN AS MUCH AS IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 12 SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF RE ASSESSMENT OF CONCLUDED ASSESSMENT DOES NOT ARISE, WHICH WOULD REQUIRE MERE REITERATION AND IT IS ONLY IN THE CONTEXT OF ABATED ASSESSMENT UNDER SECO ND PROVISO WHICH IS REQUIRED TO BE ASSESSED. THE UNDERLINED PURPOSE OF MAKING ASSESSMENT OF TOTAL INCOME UNDER SECTION 153A OF THE ACT IS, THER EFORE, TO ASSESS INCOME WHICH WAS NOT DISCLOSED OR WOULD NOT HAVE BEEN DISCLOS ED. THE ASSESSMENT OR REASSESSMENT PROCEEDINGS WHICH HAVE AL READY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DE TERMINING THE ASSESSEES TOTAL INCOME AND, SUCH ORDERS ARE SUBSIS TING AT THE TIME WHEN SEARCH OR REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATED ASSESSMENT SINCE NO PROCEEDINGS WERE PENDING AND, TH EREFORE, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESS ED WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL. IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATE D AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THUS THE LD. A/R HAS SUBMITTED THAT THE AO HAS MADE THE ADDITIONS IN THE ASSESSMEN T UNDER SECTION 153A WHEREBY THE COMPLETED ASSESSMENTS HAVE BEEN DISTURBE D WITHOUT EVEN REFERRING TO ANY INCRIMINATING MATERIAL FOUND OR SE IZED DURING THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE ACT. THE ONLY BASIS OF ADDITION IS THE STATEMENT OF THIRD PARTY RECORDED IN THE SEA RCH OF THE THIRD PARTY THAT HAS NO CONNECTION WITH THE SEARCH PROCEEDINGS O F THE ASSESSEE AND, ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 13 THEREFORE, IN THE ABSENCE OF ANY INCRIMINATING MATE RIAL FOUND OR SEIZED DURING THE SEARCH OF THE ASSESSEE, NO ADDITION CAN BE MADE IN THE ASSESSMENT FRAMED UNDER SECTION 153A OF THE ACT. 8. ON THE OTHER HAND, THE LD. D/R SUBMITTED THAT TH E ADDITIONS MADE TO THE TOTAL INCOME OF THE ASSESSEE RELATE TO THE UNEX PLAINED CASH CREDIT IN THE BOOKS OF ACCOUNT INTRODUCED IN THE GARB OF UNSE CURED LOANS, PARTNERS CAPITAL WHICH IN FACT IS THE RE-ROUTING OF THE ASSES SEES UNDISCLOSED INCOME. IT IS CLEARLY EVIDENT FROM THE INNUMERABLE EVIDENCE S WHICH CAME TO THE FORE IN THE NUMEROUS INVESTIGATIONS, ENQUIRIES, SEA RCH AND SURVEY ACTIONS CARRIED OUT BY THE INVESTIGATION WING OF THE DEPART MENT THAT THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE INV ESTIGATION WING KOLKATA REGARDING THE INVOLVEMENT OF KBM GROUP (ASSESSEE) I N OBTAINING ENTRIES OF BOGUS UNSECURED LOANS, PARTNERS CAPITAL, SPECIAL D EPOSITS ETC. DETECTED IN THE INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING KOLKATA. SUCH INFORMATION WAS RECEIVED PRIOR TO THE INITIATION OF PROCEEDINGS UNDER SECTION 153A AND ALSO DURING THE PENDENCY OF PROCEE DINGS UNDER SECTION 153A. ACCORDINGLY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SECTION 153A, THE ASSESSING OFFICER CONDUCTED FURTH ER ENQUIRY ABOUT THE GENUINENESS OF THE TRANSACTION OF UNSECURED LOANS, PARTNERS CAPITAL, SPECIAL DEPOSITS ETC. THE ASSESSEE WAS DULY CONFRONTE D WITH THE RESULTS OF ALL THESE ENQUIRIES AND INFORMATION SHARED BY THE I NVESTIGATION WING. IN ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 14 THESE CIRCUMSTANCES IT CANNOT BE A CASE OF ADDITION MADE WITHOUT ANY INCRIMINATING MATERIAL BUT THE ASSESSING OFFICER WAS HAVING SUFFICIENT MATERIAL DISCLOSING THE UNDISCLOSED AND UNEXPLAINED CASH CREDIT INTRODUCED BY THE ASSESSEE IN THE GARB OF UNSECURED LOANS AND PARTNERS CAPITAL. ONCE THE INSURMOUNTABLE EVIDENCES UNEARTHED BY THE INVESTIGATION WING KOLKATA WHICH IS THE BASIS OF THE ADDITIONS MADE BY THE ASSESSING OFFICER, THE ASSESSEE WAS REQUIRED TO DISCHARGE ITS ONUS BY P RODUCING THE CONTRARY EVIDENCE OR BY PRODUCING ALLEGED CREDITORS FOR VERI FICATION. THE LD. CIT D/R HAS FURTHER SUBMITTED THAT THE INFORMATION RECEIVED FROM THE INVESTIGATION WING KOLKATA IS ALSO THE INCRIMINATING MATERIAL FOU ND DURING THE SEARCH AND PERTAINS TO THE ASSESSEE DISCLOSING UNDISCLOSED INCOME. THEREFORE, IT IS NOT A CASE OF REASSESSMENT FRAMED BY THE ASSESSI NG OFFICER UNDER SECTION 153A WITHOUT ANY INCRIMINATING MATERIAL. THE ASSESSING OFFICER EVEN CONDUCTED FURTHER INVESTIGATION DURING THE COU RSE OF ASSESSMENT PROCEEDINGS THROUGH THE INVESTIGATION WING KOLKATA AND, THEREFORE, THE ADDITION IS FULLY BASED ON THE EVIDENCE IN THE POSS ESSION OF THE ASSESSING OFFICER. AS PER THE PROVISIONS OF SECTION 132 READ WITH SECTION 153A OF THE IT ACT, THE ASSESSING OFFICER HAS TO ASSESS OR REASS ESS THE INCOME OF LAST SIX YEARS AND TOTAL INCOME REFERS TO THE SUM TOTAL OF INCOME IN RESPECT OF WHICH A PERSON IS ASSESSABLE. THE TOTAL INCOME WILL TH EREFORE COVER NOT ONLY THE INCOME EMANATING FROM THE DECLARED SOURCE OR ANY MATERIAL ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 15 OMISSION BEFORE ASSESSING OFFICER BUT FROM ALL SOUR CES INCLUDING UNDISCLOSED ONES OR BASED ON UNPLACED MATERIAL BEFO RE THE ASSESSING OFFICER. THE LD. CIT D/R HAS THUS SUBMITTED THAT THE DECISIONS IN THE CASE OF M/S. ALL CARGO GLOBAL LOGISTICS LTD. AS WELL AS K ABUL CHAWLA (SUPRA) WERE CHALLENGED BEFORE THE HONBLE SUPREME COURT AND THE HONBLE SUPREME COURT HAS ADMITTED THE SLP FOR EXAMINATION OF THE ISSUE. HENCE THE ISSUE IS STILL PENDING ADJUDICATION BEFORE THE HONBLE SUPREME COURT. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BE LOW. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. UNDISPUTEDLY THE ASSESSMENT FOR THE A.Y. 2010-11 TO 2012-13 WERE NOT PENDING ON THE DATE OF SEARCH ON 02 /7/2015 AS THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT WERE ALSO COMPLETED PRIOR TO THE DATE OF SEARCH. THUS, THE ASSESSMENT FOR THESE THREE ASSESSMENT YEARS WERE NOT GOT ABATED BY VIRTUE OF SEARCH U/S 132 OF T HE ACT ON 02/7/2015 AND THEREFORE THE ASSESSING OFFICER WOULD ASSESS THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 153A OF T HE ACT IN RESPECT OF THESE THREE ASSESSMENT YEARS HAVING REGARD TO THE F ACT THAT WHETHER ANY INCRIMINATING MATERIAL WAS FOUND OR CAME TO THE KNOWL EDGE OF THE ASSESSING OFFICER DURING THE SEARCH AND SEIZURE PRO CEEDINGS. SINCE THESE ASSESSMENT YEARS WERE NOT PENDING AS ON THE DATE OF SEARCH, THEREFORE, THE PROCEEDINGS U/S 153A OF THE ACT IN RESPECT OF T HESE THREE ASSESSMENT ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 16 YEARS WOULD BE IN THE NATURE OF REASSESSMENT AND NOT IN THE NATURE OF ASSESSMENT AS IN THE CASE OF THE REMAINING ASSESSME NT YEARS IN THE A.Y. 2014-15 AND 2015-16 WHICH WERE GOT ABATED BY VIRTUE OF SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT ON 02/7/2015. AT THE OUTSET WE NOTE THAT THE ASSESSMENTS FRAMED BY THE ASSESSING OFFICER U/S 153A OF THE ACT IN THE CASE OF THE ASSESSEE BEFORE US IS SOLELY ON THE BASIS OF THE INFORMATION RECEIVED FROM THE KOLKATA INVESTIGATION WING WHICH C ONTAINS THE STATEMENT OF ONE SHRI ANAND SHARMA IN RESPECT OF SOME ASSESSM ENTS AND THE STATEMENT OF SHRI ANKIT BAGRI IN RESPECT OF SOME OT HER ASSESSMENTS. THUS, UNDISPUTEDLY THE ASSESSING OFFICER HAS MADE THE ADD ITION WHILE COMPLETING THE ASSESSMENT U/S 153A OF THE ACT FOR ALL THE ASSE SSMENT YEARS ON THE BASIS OF THE INFORMATION RECEIVED FROM THE INVESTIG ATION WING, KOLKATA AND NOT ON THE BASIS OF ANY MATERIAL OR INFORMATION GAT HERED DURING THE COURSE OF SEARCH AND SEIZURE ACTION IN THE CASE OF THE ASS ESSEE. WE FIND THAT THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER AS WELL A S THE ORDERS PASSED BY THE LD. CIT(A) IN THE CASE OF THE ASSESSEE ARE ID ENTICAL AND BASED ON SIMILAR FACTS AND CIRCUMSTANCES AS IN THE CASE OF M /S KOLA DALL MILL PURSUANT TO THE SAME SEARCH AND SEIZURE ACTION CARR IED OUT ON 02/7/2015. THIS TRIBUNAL IN THE CASE OF KOTA DALL MILL VS DCIT VI DE ORDER DATED 31/12/2018 IN ITA NOS. 997 TO 1002/JP/2018, 1119/JP /2018, 1057 TO ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 17 1062/JP/2018 AND 1210/JP/2018 HAS CONSIDERED AND D ECIDED THIS ISSUE IN PARA 6 AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSMENTS FOR THE AS SESSMENT YEARS 2010- 11 TO 13-14 WERE NOT PENDING ON THE DATE OF SEARCH ON 2 ND JULY, 2015. EVEN IN SOME OF THE ASSESSMENT YEARS ORDERS UNDER S ECTION 143(3) WERE PASSED AND IN OTHER CASES THE ASSESSMENT WAS COMPLE TED UNDER SECTION 143(1) OF THE ACT. THUS THE ASSESSMENTS FOR THE AS SESSMENT YEARS 2010-11 TO 13-14 WERE NOT GOT ABATED BY VIRTUE OF SEARCH UN DER SECTION 132 ON 2 ND JULY, 2015 AND THE AO WOULD REASSESS THE TOTAL INCO ME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 153A IN RESPECT OF TH ESE FOUR ASSESSMENT YEARS I.E. 2010-11 TO 13-14. THE PROCEEDINGS UNDER SECTION 153A IN RESPECT OF THESE FOUR ASSESSMENT YEARS WOULD BE IN THE NATURE OF REASSESSMENT AND NOT IN THE NATURE OF ASSESSMENT AS IN THE CASES OF THE REMAINING TWO ASSESSMENT YEARS I.E. 2014-15 AND 15- 16 THOSE WERE GOT ABATED BY VIRTUE OF SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT ON 2 ND JULY, 2015. IT IS A SETTLED PROPOSITION OF LAW TH AT THE ASSESSMENT OR REASSESSMENT UNDER SECTION 153A IN RESPECT OF THE A SSESSMENT YEARS WHICH HAVE ALREADY BEEN COMPLETED AND ASSESSMENT OR DERS HAVE BEEN PASSED DETERMINING THE ASSESSEES TOTAL INCOME, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED CAN BE MADE O NLY ON THE BASIS OF INCRIMINATING MATERIAL. IN THE ABSENCE OF ANY INCR IMINATING MATERIAL THE COMPLETED ASSESSMENT CAN ONLY BE REITERATED. THE P ROVISIONS OF SECTION 132 READ WITH SECTION 153A OF THE ACT STIPULATE TWO TYPES OF SITUATIONS ONE WHERE THE ASSESSMENT OF ANY ASSESSMENT YEAR FAL LING WITHIN SIX ASSESSMENT YEARS IS PENDING ON THE DATE OF INITIATI ON OF SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A OF THE ACT. THEREFORE, THE ASSESSMENT UNDER SECTION 153A IN RES PECT OF THOSE ASSESSMENT YEARS WHICH STAND ABATED DUE TO THE REAS ON OF PENDING ON THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 18 DATE OF INITIATION OF SEARCH OR REQUISITION SHALL B E THE ORIGINAL/FIRST ASSESSMENT. IN THE SECOND CATEGORY WHERE THE ASSESS MENT OR REASSESSMENT HAS ALREADY BEEN COMPLETED ON THE DATE OF INITIATION OF SEARCH OR MAKING OF REQUISITION AS THE CASE MAY BE, THE ASSESSMENT UNDER SECTION 153A WOULD BE IN THE NATURE OF REASSESSMENT . THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA WHIL E ANALYZING THE PROVISIONS OF SECTION 153A READ WITH SECTION 132 OF THE ACT HAS OBSERVED IN PARA 37 AND 38 AS UNDER :- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, REA D WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLA INED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: I . ONC E A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT , NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERS ON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II . ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPU TED BY THE AOS AS A FRESH EXERCISE. III . THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT O F THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEAR S. IN OTHER WORDS THERE WILL B E ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUG HT TO TAX'. IV . ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SE ARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMEN T 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATE R IAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' V . IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMP LETED ASSESSMENT PROCEEDINGS. VI . INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EA CH AY ON THE BASIS OF THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 19 FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXIST ING OR BROUGHT ON THE RECORD OF THE AO. VII . COMPLETED ASS ESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAK ING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURS E OF ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005-06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD CO MPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. THUS THE HONBLE HIGH COURT HAS HELD THAT IN THE AB SENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CA N BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE HONBLE HIGH COURT HAS ALSO REFERRED THE TERM USED IN SECTION 15 3A AS ASSESS WHICH IS RELATABLE TO ABATED PROCEEDINGS AND THE WORD REASS ESS RELATED TO COMPLETED ASSESSMENT PROCEEDINGS. THEREFORE, THE C OMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENT OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. THE HONBLE DELHI HI GH COURT HAS REITERATED ITS VIEW IN CASE OF PRINCIPAL CIT VS. KURELE PAPER MILLS (SUPRA) IN PARA 1 TO 3 AS UNDER :- 1. THE REVENUE HAS FILED THE APPEAL AGAINST AN ORDER D ATED 14.11.2014 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN 3761/DEL/2011 PERTAINING TO THE ASSESSMENT YEAR 2002-03. THE QUES TION WAS WHETHER THE LEARNED CIT (APPEALS) HAD ERRED IN LAW AND ON THE F ACTS IN DELETING THE ADDITION OF RS. 89 LACS MADE BY THE ASSESSING OFFIC ER UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ('ACT') ON BOGUS SHARE CAP ITAL. BUT, THE ISSUE WAS WHETHER THERE WAS ANY INCRIMINATING MATERIAL WH ATSOEVER FOUND DURING THE SEARCH TO JUSTIFY INITIATION OF PROCEEDI NGS UNDER SECTION 153A OF THE ACT. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 20 2. THE COURT FINDS THAT THE ORDER OF THE CIT(APPEALS) REVEALS THAT THERE IS A FACTUAL FINDING THAT 'NO INCRIMINATING EVIDENCE REL ATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AS IS MANIFEST FROM THE ORDER OF THE AO.' CONSEQUENTLY, IT WAS HELD THAT THE AO W AS NOT JUSTIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSES OF MAKING ADDITIONS ON ACCOUNT OF SHARE CAPITAL. 3. AS FAR AS THE ABOVE FACTS ARE CONCERNED, THERE IS N OTHING SHOWN TO THE COURT TO PERSUADE AND HOLD THAT THE ABOVE FACTUAL D ETERMINATION IS PERVERSE. CONSEQUENTLY, AFTER CONSIDERING ALL THE F ACTS AND CIRCUMSTANCES OF THE CASE, THE COURT IS OF THE OPINION THAT NO SU BSTANTIAL QUESTION OF LAW ARISES IN THE IMPUGNED ORDER OF THE ITAT WHICH REQU IRES EXAMINATION. THE SLP FILED BY THE REVENUE AGAINST THE SAID DECIS ION OF HONBLE DELHI HIGH COURT WAS DISMISSED BY THE HONBLE SUPREME COU RT VIDE ORDER DATED 7 TH DECEMBER, 2015. IN A SUBSEQUENT DECISION, THE HON BLE DELHI HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. MEETA GUTGUT IA HAS AGAIN ANALYZED THIS ISSUE IN PARA 55 TO 71 AS UNDER :- 55. ON THE LEGAL ASPECT OF INVOCATION OF SECTION 153A IN RELATION TO AYS 2000-01 TO 2003-04, THE CENTRAL PLANK OF THE REVENUE'S SUBM ISSION IS THE DECISION OF THIS COURT IN SMT. DAYAWANTI GUPTA ( SUPRA ). BEFORE BEGINNING TO EXAMINE THE SAID DECISION, IT IS NECESSARY TO REVISIT THE LEGAL LAND SCAPE IN LIGHT OF THE ELABORATE ARGUMENTS ADVANCED BY THE REVENUE. 56. SECTION 153A OF THE ACT IS TITLED 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS CONNECTED TO SECTION 132 WHICH DEALS WITH 'SE ARCH AND SEIZURE'. BOTH THESE PROVISIONS, THEREFORE, HAVE TO BE READ TOGETHER. SE CTION 153A IS INDEED AN EXTREMELY POTENT POWER WHICH ENABLES THE REVENUE TO RE-OPEN AT LEAST SIX YEARS OF ASSESSMENTS EARLIER TO THE YEAR OF SEARCH. IT IS NO T TO BE EXERCISED LIGHTLY. IT IS ONLY IF DURING THE COURSE OF SEARCH UNDER SECTION 132 IN CRIMINATING MATERIAL JUSTIFYING THE RE-OPENING OF THE ASSESSMENTS FOR SIX PREVIOUS YEARS IS FOUND THAT THE INVOCATION OF SECTION 153A QUA EACH OF THE AYS WOULD BE JUSTIFIED. 57. THE QUESTION WHETHER UNEARTHING OF INCRIMINATING M ATERIAL RELATING TO ANY ONE OF THE AYS COULD JUSTIFY THE RE-OPENING OF THE ASSESSM ENT FOR ALL THE EARLIER AYS WAS CONSIDERED BOTH IN ANIL KUMAR BHATIA ( SUPRA ) AND CHETAN DAS LACHMAN DAS ( SUPRA ). INCIDENTALLY, BOTH THESE DECISIONS WERE DISCUSSE D THREADBARE IN THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS ANIL KUMAR BHATIA ( SUPRA ) WAS CONCERNED, THE COURT IN PARAGRAPH 24 OF THAT DE CISION NOTED THAT 'WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERI AL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE THEREFOR E EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN UNDER SUCH SITUATION'. THAT QUESTION WAS, THEREFORE, LEFT OPEN. AS FAR AS CHETAN DAS LACHMAN DAS ( SUPRA ) IS CONCERNED, IN PARA 11 OF THE DECISION IT WAS OBSERVED: ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 21 '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSME NT OR REASSESSMENT OF THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMMEDI ATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH TOOK PLACE. TO REPEAT, THERE IS NO CONDITION IN THIS SEC TION THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILA BLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND. THIS, HOWEVER, DOES NOT MEAN THAT THE ASSESSMENT UNDER SECTION 153A CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATE RIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' 58. IN KABUL CHAWLA ( SUPRA ), THE COURT DISCUSSED THE DECISION IN FILATEX INDIA LTD. ( SUPRA ) AS WELL AS THE ABOVE TWO DECISIONS AND OBSERVED A S UNDER: '31. WHAT DISTINGUISHES THE DECISIONS BOTH IN CIT V. CHETAN DAS LACHMAN DAS ( SUPRA ), AND FILATEX INDIA LTD. V. CIT-IV ( SUPRA ) IN THEIR APPLICATION TO THE PRESENT CASE IS THAT IN BOTH THE SAID CASES THERE WAS SOME MATERIAL UNEARTHED DURING THE SEARCH, WHEREAS IN THE PRESENT CASE THERE ADMITTEDLY WAS NONE. SECONDLY, IT IS PLAIN FROM A CAREFUL READ ING OF THE SAID TWO . DECISIONS THAT THEY DO NOT HOLD THAT ADDITIONS CAN BE VALIDLY MADE TO INCOME FORMING THE SUBJECT MATTER OF COMPLETED ASSE SSMENTS PRIOR TO THE SEARCH EVEN IF NO INCRIMINATING MATERIAL WHATSOEVER WAS UNEARTHED DURING THE SEARCH. 32. RECENTLY BY ITS ORDER DATED 6TH JULY 2015 IN IT A NO. 369 OF 2015 ( PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD. ), THIS COURT DECLINED TO FRAME A QUESTION OF LAW IN A CASE WHERE , IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARC H UNDER SECTION 132 OF THE ACT, THE REVENUE SOUGHT TO JUSTIFY INITIATION O F PROCEEDINGS UNDER SECTION 153A OF THE ACT AND MAKE AN ADDITION UNDER SECTION 68 OF THE ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE CIT ( A), AFFIRMED BY THE ITAT, DELETING THE ADDITION, WAS NOT INTERFERED WIT H.' 59. IN KABUL CHAWLA ( SUPRA ), THE COURT REFERRED TO THE DECISION OF THE RAJAST HAN HIGH COURT IN JAI STEEL (INDIA) V. ASSTT. CIT [2013] 36 TAXMANN.COM 523/219 TAXMAN 223 . THE SAID PART OF THE DECISION IN KABUL CHAWLA ( SUPRA ) IN PARAS 33 AND 34 READS AS UNDER: '33. THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA), JODHPUR V. ACIT ( SUPRA ) INVOLVED A CASE WHERE CERTAIN BOOKS OF ACCOUNTS AND OTHER DOCUMENTS THAT HAD NOT BEEN PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT W AS HELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE T AKEN INTO CONSIDERATION WHILE COMPUTING THE TOTAL INCOME UNDE R SECTION 153A OF THE ACT. THE COURT THEN EXPLAINED AS UNDER: '22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROV ISION, WHICH IS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 22 INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDE R SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATE D IN TERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JUR ISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARD ING OTHER CASES, THE ADDITION TO THE INCOME THAT HA S ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATI NG MATERIAL; AND ( C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MA DE.' 34. THE ARGUMENT OF THE REVENUE THAT THE AO WAS FRE E TO DISTURB INCOME DE HORS THE INCRIMINATING MATERIAL WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT WAS SPECIFICALLY REJECTED B Y THE COURT ON THE GROUND THAT IT WAS 'NOT BORNE OUT FROM THE SCHEME O F THE SAID PROVISION' WHICH WAS IN THE CONTEXT OF SEARCH AND/OR REQUISITI ON. THE COURT ALSO EXPLAINED THE PURPORT OF THE WORDS 'ASSESS' AND 'RE ASSESS', WHICH HAVE BEEN FOUND AT MORE THAN ONE PLACE IN SECTION 153A O F THE ACT AS UNDER: '26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTA L INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSM ENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS'-HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE W ORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSES S HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT A BATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETA TION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONL Y BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH OR REQUISITION OF DOCUMENTS.'' 60. IN KABUL CHAWLA ( SUPRA ), THE COURT ALSO TOOK NOTE OF THE DECISION OF THE BOMBAY HIGH COURT IN CIT V. CONTINENTAL WAREHOUSING CORPN (NHAVA SHEVA) LTD. [2015] 58 TAXMANN.COM 78/232 TAXMAN 270/374 ITR 645 (BOM.) WHICH ACCEPTED THE PLEA THAT IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF AN ISSUE, THEN NO ADDITIONS IN RESPECT OF ANY ISSUE CAN BE MADE TO THE ASSESSMENT UNDER SECTION 153A AND 153C OF TH E ACT. THE LEGAL POSITION WAS THEREAFTER SUMMARIZED IN KABUL CHAWLA ( SUPRA ) AS UNDER: ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 23 '37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SE ARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS I N RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. TH E AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE. AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH TH E DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR O THER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELA TED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR M ADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MA DE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOS E PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEED INGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT O N THE RECORD OF THE AO. VII. C OMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRI MINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCO VERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUC ED OR NOT ALREADY DISCLOSED OR ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 24 MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 61. IT APPEARS THAT A NUMBER OF HIGH COURTS HAVE CONCU RRED WITH THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) BEGINNING WITH THE GUJARAT HIGH COURT IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ). THERE, A SEARCH AND SEIZURE OPERATION WAS CARRIE D OUT ON 7TH OCTOBER, 2009 AND AN ASSESSMENT CAME TO BE F RAMED UNDER SECTION 143(3) READ WITH SECTION 153A(1)(B) IN DETERMINING THE TOT AL INCOME OF THE ASSESSEE OF RS. 14.5 CRORES AGAINST DECLARED INCOME OF RS. 3.44 CRO RES. THE ITAT DELETED THE ADDITIONS ON THE GROUND THAT IT WAS NOT BASED ON AN Y INCRIMINATING MATERIAL FOUND DURING THE COURSE OF THE SEARCH IN RESPECT OF AYS U NDER CONSIDERATION I.E., AY 2006- 07. THE GUJARAT HIGH COURT REFERRED TO THE DECISION IN KABUL CHAWLA ( SUPRA ), OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) ( SUPRA ) AND ONE EARLIER DECISION OF THE GUJARAT HIGH COURT ITSELF. IT EXPLAINED IN PARA 15 AND 16 AS UNDER: '15. ON A PLAIN READING OF SECTION 153A OF THE ACT, IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWERS THEREUNDER IS A SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 132A OF THE ACT. ONCE A S EARCH OR REQUISITION IS MADE, A MANDATE IS CAST UPON THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 153A OF THE ACT TO THE PERSON, REQUIRING HI M TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MA DE AND ASSESS OR REASSESS THE SAME. SINCE THE ASSESSMENT UNDER SECTION 153A O F THE ACT IS LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS EVIDENT THAT THE OBJECT OF THE SECTION IS TO BRING TO TAX THE UN DISCLOSED INCOME WHICH IS FOUND DURING THE COURSE OF OR PURSUANT TO THE SEARC H OR REQUISITION. HOWEVER, INSTEAD OF THE EARLIER REGIME OF BLOCK ASSESSMENT W HEREBY, IT WAS ONLY THE UNDISCLOSED INCOME OF THE BLOCK PERIOD THAT WAS ASS ESSED, SECTION 153A OF THE ACT SEEKS TO ASSESS THE TOTAL INCOME FOR THE ASSESS MENT YEAR, WHICH IS CLEAR FROM THE FIRST PROVISO THERETO WHICH PROVIDES THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF E ACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECOND PROVIS O MAKES THE INTENTION OF THE LEGISLATURE CLEAR AS THE SAME PROVIDES THAT ASS ESSMENT OR REASSESSMENT, IF ANY, RELATING TO THE SIX ASSESSMENT YEARS REFERRED TO IN THE SUB-SECTION PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 1 32 OR REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. SUB-SECTION (2) OF SECTION 153A OF THE ACT PROVIDES THAT IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, THEN THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAD ABATED UNDER THE SECOND PROVISO WOULD STAND REVIVED . THE PROVISO THERETO SAYS THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT IF SUC H ORDER OF ANNULMENT IS SET ASIDE. THUS, ANY PROCEEDING OF ASSESSMENT OR REASSE SSMENT FALLING WITHIN THE SIX ASSESSMENT YEARS PRIOR TO THE SEARCH OR REQUISI TION STANDS ABATED AND THE TOTAL INCOME OF THE ASSESSEE IS REQUIRED TO BE DETE RMINED UNDER SECTION 153A OF THE ACT. SIMILARLY, SUB-SECTION (2) PROVIDES FOR RE VIVAL OF ANY ASSESSMENT OR REASSESSMENT WHICH STOOD ABATED, IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 25 OR REASSESSMENT MADE UNDER SECTION 153A OF THE ACT IS ANNULLED IN APPEAL OR ANY OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS 'WELL SETTLED AS HELD BY THE SU PREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OR THE SECTION CAN BE RE GARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE PORTION OF THE SECT ION AND IF THERE IS NO AMBIGUITY IN THE LANGUAGE OR IF IT IS PLAIN AND CLE AR, THEN THE HEADING USED IN THE SECTION STRENGTHENS THAT MEANING. FROM THE HEAD ING OF SECTION 153. THE INTENTION OF THE LEGISLATURE IS CLEAR, VIZ., TO PRO VIDE FOR ASSESSMENT IN CASE OF SEARCH AND REQUISITION. WHEN THE VERY PURPOSE OF TH E PROVISION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION, IT GOE S WITHOUT SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEARCH OR RE QUISITION, IN OTHER WORDS, THE ASSESSMENT SHOULD CONNECTED WITH SOMETHING ROUND DU RING THE SEARCH OR REQUISITION VIZ., INCRIMINATING MATERIAL WHICH REVE ALS UNDISCLOSED INCOME. THUS, WHILE IN VIEW OF THE MANDATE OF SUB-SECTION ( 1) OF SECTION 153A OF THE ACT, IN EVERY CASE WHERE THERE IS A SEARCH OR REQUI SITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUCH PERSON TO FURNIS H RETURNS OF INCOME FOR THE SIX YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE, ANY ADD ITION' OR DISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATERIAL COLLECTED DURING THE SEARCH OR REQUISITION, IN CASE NO INCRIMINATING MATERIAL IS FOUND, AS HELD BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED, IN CASE WHERE PENDING ASSESS MENTS HAVE ABATED, THE ASSESSING OFFICER CAN PASS ASSESSMENT ORDERS FOR EA CH OF THE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME DECLARED IN THE RETURNS, IF ANY, FURNISHED BY THE A SSESSEE AS WELL AS UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQU ISITION. IN CASE WHERE A PENDING REASSESSMENT UNDER SECTION 147 OF THE ACT H AS ABATED, NEEDLESS TO STATE THAT THE SCOPE AND AMBIT OF THE ASSESSMENT WOULD IN CLUDE ANY ORDER WHICH THE ASSESSING OFFICER COULD HAVE PASSED UNDER SECTION 1 47 OF THE ACT AS WELL AS UNDER SECTION 153A OF THE ACT. ** ** ** 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING THAT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATERIAL IS FOUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN RESPECT OF AN TH E SIX ASSESSMENT YEARS. IN THE OPINION OF THIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INASMUCH AS. THE ASSESSMENT IN RESPECT OF EACH OF T HE SIX ASSESSMENT YEARS IS A SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 153 A OF THE ACT, ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEARCH OR REQUISI TION, NAMELY, IN RELATION TO MATERIAL DISCLOSED DURING THE SEARCH OR REQUISITION . IF IN RELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL IS FOUND , NO ADDITION OR DISALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESS MENT YEAR IN EXERCISE OF POWERS UNDER SECTION 153A OF THE ACT AND THE EARLIE R ASSESSMENT SHALL HAVE TO ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 26 BE REITERATED. IN THIS REGARD, THIS COURT IS IN COM PLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED C OUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVED IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN THE CASE OF CIT V. JAYABEN RATILAL SORATHIA ( SUPRA ) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DI SPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS ; HOWEVE R, THERE MUST BE SOME INCRIMINATING MATERIAL AVAILABLE WITH THE ASSESSING OFFICER WITH RESPECT TO THE SALE TRANSACTIONS IN THE PARTICULAR ASSESSMENT YEAR .' 62. SUBSEQUENTLY, IN DEVANGI ALIAS RUPA ( SUPRA ), ANOTHER BENCH OF THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLLOWING ITS EARLIER DECISION IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ) AND OF THIS COURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS KARNATAKA HIGH COURT IS CONCERNED, IT HAS IN IBC KNOWLEDGE PARK (P.) LTD. ( SUPRA ) FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) AND HELD THAT THERE HAD TO BE INCRIMINATING MATERIAL QUA EACH OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO BE MADE PURSUANT TO SEARCH AND SEIZURE OPERATION. T HE CALCUTTA HIGH COURT IN SALASAR STOCK BROKING LTD. ( SUPRA ), TOO, FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ). IN GURINDER SINGH BAWA ( SUPRA ), THE BOMBAY HIGH COURT HELD THAT: '6. . . . . . ONCE AN ASSESSMENT HAS ATTAINED FINAL ITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE SAME CANNOT BE SUBJECT TO TAX IN PROCEEDINGS UNDER SECTION 153A OF THE ACT. THIS OF COURSE WOULD NOT A PPLY IF INCRIMINATING MATERIALS ARE GATHERED IN THE COURSE OF SEARCH OR D URING PROCEEDINGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/O R NOT DISCLOSED DURING THE REGULAR ASSESSMENT PROCEEDINGS.' 63. EVEN THIS COURT HAS IN MAHESH KUMAR GUPTA ( SUPRA ) AND RAM AVTAR VERMA ( SUPRA ) FOLLOWED THE DECISION IN KABUL CHAWLA ( SUPRA ). THE DECISION OF THIS COURT IN KURELE PAPER MILLS (P.) LTD. ( SUPRA ) WHICH WAS REFERRED TO IN KABUL CHAWLA ( SUPRA ) HAS BEEN AFFIRMED BY THE SUPREME COURT BY THE DIS MISSAL OF THE REVENUE'S SLP ON 7TH DECEMBER, 2015. THE DECISION IN DAYAWANTI GUPTA 64. THAT BRINGS US TO THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ). AS RIGHTLY POINTED OUT BY MR. KAUSHIK, LEARNED COUNSEL APPEARI NG FOR THE RESPONDENT, THAT THERE ARE SEVERAL DISTINGUISHING FEATURES IN THAT CASE WH ICH MAKES ITS RATIO INAPPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE FIRST PLACE, THE ASSESSEES THERE WERE ENGAGED IN THE BUSINESS OF PAN MASALA AND GUTKHA ETC. THE ANSW ERS GIVEN TO QUESTIONS POSED TO THE ASSESSEE IN THE COURSE OF SEARCH AND SURVEY PRO CEEDINGS IN THAT CASE BRING OUT THE POINTS OF DISTINCTION. IN THE FIRST PLACE, IT WAS S TATED THAT THE STATEMENT RECORDED WAS UNDER SECTION 132(4) AND NOT UNDER SECTION 133A. IT WAS A STATEMENT BY THE ASSESSEE HIMSELF. IN RESPONSE TO QUESTION NO. 7 WHETHER ALL THE PURCHASES MADE BY THE FAMILY FIRMS, WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNT , THE ANSWER WAS: 'WE AND OUR FAMILY FIRMS NAMELY M/S. ASSAM SUPARI T RADERS AND M/S. BALAJI PERFUMES GENERALLY TRY TO RECORD THE TRANSAC TIONS MADE IN RESPECT OF ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 27 PURCHASE, MANUFACTURING AND SALES IN OUR REGULAR BO OKS OF ACCOUNTS BUT IT IS ALSO FACT THAT SOME TIME DUE TO SOME FACTORS LIK E INABILITY OF ACCOUNTANT, OUR BUSY SCHEDULE AND SOME FAMILY PROBLEMS, VARIOUS PURCHASES AND SALES OF SUPARI, GUTKA AND OTHER ITEMS DEALT BY OUR FIRMS IS NOT ENTERED AND SHOWN IN THE REGULAR BOOKS OF ACCOUNTS MAINTAINED B Y OUR FIRMS.' 65. THEREFORE, THERE WAS A CLEAR ADMISSION BY THE ASSE SSEES IN SMT. DAYAWANTI GUPTA ( SUPRA ) THERE THAT THEY WERE NOT MAINTAINING REGULAR BOOK S OF ACCOUNTS AND THE TRANSACTIONS WERE NOT RECORDED THEREIN. 66. FURTHER, IN ANSWER TO QUESTION NO. 11, THE ASSESSE E IN SMT. DAYAWANTI GUPTA ( SUPRA ) WAS CONFRONTED WITH CERTAIN DOCUMENTS SEIZED DURI NG THE SEARCH. THE ANSWER WAS CATEGORICAL AND READS THUS: 'ANS:- I HEREBY ADMIT THAT THESE PAPERS ALSO CONTEN D DETAILS OF VARIOUS TRANSACTIONS INCLUDE PURCHASE/SALES/MANUFACTURING T RADING OF GUTKHA, SUPARI MADE IN CASH OUTSIDE BOOKS OF ACCOUNTS AND T HESE ARE ACTUALLY UNACCOUNTED TRANSACTIONS MADE BY OUR TWO FIRMS NAME LY M/S. ASOM TRADING AND M/S. BALAJI PERFUMES.' 67. BY CONTRAST, THERE IS NO SUCH STATEMENT IN THE PRE SENT CASE WHICH CAN BE SAID TO CONSTITUTE AN ADMISSION BY THE ASSESSEE OF A FAILUR E TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUESTIO N. ON THE CONTRARY, THE ASSESSEE HEREIN STATED THAT, HE IS REGULARLY MAINTA INING THE BOOKS OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM OF RS. 1.10 CRORES WAS O NLY FOR THE YEAR OF SEARCH AND NOT FOR THE EARLIER YEARS. AS ALREADY NOTICED, THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE PRESENT CASE HAVE BEEN ACCEPTED BY THE AO. IN RESPONSE TO QUESTION NO. 16 POSED TO MR. PAWAN GADIA, HE STATED THAT THERE WAS NO POSSIBILITY OF MANIPULATION OF THE ACCOUNTS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMING THAT THERE HA D BEEN A YEAR-WISE NON- RECORDING OF TRANSACTIONS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), ON THE BASIS OF MATERIAL RECOVERED DURING SEARCH, THE ADDITIONS WHI CH WERE MADE FOR ALL THE YEARS WHEREAS ADDITIONS IN THE PRESENT CASE WERE MADE BY THE AO ONLY FOR AY 2004-05 AND NOT ANY OF THE OTHER YEARS. EVEN THE ADDITIONS MADE FOR AYS 2004-05 WERE SUBSEQUENTLY DELETED BY THE CIT (A), WHICH ORDER WA S AFFIRMED BY THE ITAT. EVEN THE REVENUE HAS CHALLENGED ONLY TWO OF SUCH DE LETIONS IN ITA NO. 306/2017. 68. IN PARA 23 OF THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ), IT WAS OBSERVED AS UNDER: '23. THIS COURT IS OF OPINION THAT THE ITAT'S FINDI NGS DO NOT REVEAL ANY FUNDAMENTAL ERROR, CALLING FOR CORRECTION. THE INFE RENCES DRAWN IN RESPECT OF UNDECLARED INCOME WERE PREMISED ON THE MATERIALS FOUND AS WELL AS THE STATEMENTS RECORDED BY THE ASSESSEES. THESE ADDITIO NS THEREFORE WERE NOT BASELESS. GIVEN THAT THE ASSESSING AUTHORITIES IN S UCH CASES HAVE TO DRAW INFERENCES, BECAUSE OF THE NATURE OF THE MATERIALS - SINCE THEY COULD BE SCANTY (AS ONE HABITUALLY CONCEALING INCOME OR INDU LGING IN CLANDESTINE OPERATIONS CAN HARDLY BE EXPECTED TO MAINTAIN METIC ULOUS BOOKS OR RECORDS FOR LONG AND IN ALL PROBABILITY BE ANXIOUS TO DO AW AY WITH SUCH EVIDENCE AT ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 28 THE SHORTEST POSSIBILITY) THE ELEMENT OF GUESS WORK IS TO HAVE SOME REASONABLE NEXUS WITH THE STATEMENTS RECORDED AND D OCUMENTS SEIZED. IN TILLS CASE, THE DIFFERENCES OF OPINION BETWEEN THE CIT (A) ON THE ONE HAND AND THE AO AND ITAT ON THE OTHER CANNOT BE THE SOLE BASIS FOR DISAGREEING WITH WHAT IS ESSENTIALLY A FACTUAL SURMISE THAT IS LOGICAL AND PLAUSIBLE. THESE FINDINGS DO NOT CALL FOR INTERFERENCE. THE SE COND QUESTION OF LAW IS ANSWERED AGAIN IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DECISION WAS THE 'HABITUAL CONCEALING OF INCOME AND INDULGING IN CLANDESTINE O PERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTE D TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTORS ARE ABSENT IN T HE PRESENT CASE. THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON SURMI SES AND ESTIMATES WITHOUT THERE BEING ANY INCRIMINATING MATERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRANCHISEE COMMISSION. 70. THE ABOVE DISTINGUISHING FACTORS IN SMT. DAYAWANTI GUPTA ( SUPRA ), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL POSITION IN KABUL CHAWLA ( SUPRA ) WHICH HAS BEEN FOLLOWED NOT ONLY BY THIS COURT IN ITS SUBSEQU ENT DECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COURT I S OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INVOCATION OF SEC TION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BA SIS AS THERE WAS NO INCRIMINATING MATERIAL QUA EACH OF THOSE AYS. THE HONBLE DELHI HIGH COURT HAS CONCURRED WITH THE VIEW AS TAKEN IN CASE OF KABUL CHAWLA (SUPRA) AS WELL AS THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. JAI STEEL INDIA LTD. VS. ACIT (SUPRA). EVEN ON THE ISSUE OF ADDITION MADE BY THE AO IN THE PROCEED INGS UNDER SECTION 153A IN RESPECT OF THE ASSESSMENT YEAR WHICH WAS AL READY COMPLETED ON THE DATE OF SEARCH, THE HONBLE HIGH COURT HAS HELD THAT IN THE ABSENCE OF ANY MATERIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURIN G THE SEARCH AND WAS NOT ALREADY AVAILABLE TO THE AO, THE ADDITIONS MADE BY THE AO ON ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED B Y THE LD. CIT (A). THE RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA (SUPRA) ARE IN PARA 53 AS UNDER :- 53. AT THIS STAGE, IT IS ALSO TO BE NOTICED THAT AN EL ABORATE ARGUMENT WAS MADE BY MR. MANCHANDA ON THE ASPECT OF THE SECURITY DEPO SITS ACCEPTED BY THE ASSESSEE. THESE WERE OF TWO KINDS - ONE WAS OF REFU NDABLE SECURITY DEPOSITS AND THE OTHER FOR NON-REFUNDABLE SECURITY DEPOSITS. AS FAR AS THE REFUNDABLE SECURITY ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 29 DEPOSITS WERE CONCERNED, THE AO HIMSELF IN HIS REMA ND REPORT ACCEPTED THEM AS HAVING BEEN DISCLOSED. THIS HAS BEEN NOTICED BY THE CIT (A) IN PARA 7.2.1 OF HIS ORDER FOR AY 2004-05. AS REGARDS NON-REFUNDABLE SEC URITY DEPOSIT, THE CIT (A) ACCEPTED THE AO'S FINDINGS THAT TREATING THE SUM AS 'GOODWILL WRITTEN OFF ON DEFERRED BASIS' WAS NOT CORRECT, HENCE THE ADDITION OF RS. 5,09,343 WAS HELD TO BE JUSTIFIED AND CORRECT. IT WAS DULY ACCOUNTED FOR UNDER 'LIABILITIES' AND TRANSFERRED TO INCOME IN A PHASED MANNER. THIS WAS NOT DONE BY MANIPULATING THE ACCOUNT BOOKS OF THE ASSESSEE AS ALLEGED BY THE REVENUE. THIS WOULD HAVE BEEN EVIDENT HAD THE RETURN BEEN PICKED UP FOR SCRU TINY UNDER SECTION 143(3) OF THE ACT. THIS, THEREFORE, WAS NOT MATERIAL WHICH WA S SUBSEQUENTLY UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY AVAILABLE T O THE AO. CONSEQUENTLY, THE ADDITIONS SOUGHT TO BE MADE BY THE AO ON ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED BY THE CIT (A). THUS THE ESSENTIAL COROLLARY OF THESE DECISIONS IS THAT NO ADDITION CAN BE MADE IN THE PROCEEDINGS UNDER SECTION 153A IN RESPE CT OF THE ASSESSMENTS WHICH WERE COMPLETED PRIOR TO THE DATE OF SEARCH EX CEPT BASED ON SOME INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY AVAILABLE TO THE AO. IT IS PERTINENT TO NOTE THAT THE SLP FILED BY THE REVENUE AGAINST THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA WAS DISMISSED VIDE ORDER DATED 2 ND JULY, 2018. THERE ARE SERIES OF DECISIONS ON THIS ISSUE INCLUDING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF M/S. J AI STEEL INDIA VS. ACIT (SUPRA) WHEREIN THE HONBLE HIGH COURT HAS HELD IN PARA 23 TO 30 AS UNDER:- 23. THE RELIANCE PLACED BY THE COUNSEL FOR THE APPELLA NT ON THE CASE OF ANIL KUMAR BHATIA ( SUPRA ) ALSO DOES NOT HELP THE CASE OF THE ASSESSEE. THE RELEVANT EXTRACT OF THE SAID JUDGMENT READS AS UNDER: '19. UNDER THE PROVISIONS OF SECTION 153A, AS WE HA VE ALREADY NOTICED, THE ASSESSING OFFICER IS BOUND TO ISSUE NO TICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEA R FALLING WITHIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEA RCH OR REQUISITION WAS MADE. ANOTHER SIGNIFICANT FEATURE OF THIS SECTI ON IS THAT THE ASSESSING OFFICER IS EMPOWERED TO ASSESS OR REASSES S THE 'TOTAL INCOME' OF THE AFORESAID YEARS. THIS IS A SIGNIFICA NT DEPARTURE FROM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BL OCK ASSESSMENT ROPED IN ONLY THE UNDISCLOSED INCOME AND THE REGULA R ASSESSMENT PROCEEDINGS WERE PRESERVED, RESULTING IN MULTIPLE A SSESSMENTS. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 30 UNDER SECTION 153A, HOWEVER, THE ASSESSING OFFICER HAS BEEN GIVEN THE POWER TO ASSESS OR REASSESS THE 'TOTAL IN COME' OF THE SIX ASSESSMENT YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEANS THAT THERE CAN BE ONLY ONE ASSESSMENT ORDER I N RESPECT OF EACH OF THE SIX ASSESSMENT YEARS, IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. 20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT T O BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED I N RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UN DER SECTION 143(1)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INC OME, TAKING NOTE TO THE UNDISCLOSED INCOME, IF ANY, UNEARTHED D URING THE SEARCH. FOR THIS PURPOSE, THE FETTERS IMPOSED UPON THE ASS ESSING OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICT ION TO REOPEN THE ASSESSMENT UNDER SECTIONS 147 AND 148, HAVE BEEN RE MOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB-SECTION (1) OF S ECTION 153A OPENS. THE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE ISSUED, AS PROVIDED IN SECTION 149 HAS ALSO BEEN MADE INAPPLICABLE BY THE NON OBSTANTE CLAUSE. SECTION 15 1 WHICH REQUIRES SANCTION TO BE OBTAINED BY THE ASSESSING O FFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT UNDER SECTION 14 8 HAS ALSO BEEN EXCLUDED IN A CASE COVERED BY SECTION 153A. THE TIM E-LIMIT PRESCRIBED FOR COMPLETION OF AN ASSESSMENT OR REASS ESSMENT BY SECTION 153 HAS ALSO BEEN DONE AWAY WITH IN A CASE COVERED BY SECTION 153A. WITH ALL THE STOPS HAVING BEEN PULLED OUT, THE ASSESSING OFFICER UNDER SECTION 153A HAS BEEN ENTRU STED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSE SSEE WHOSE CASE IS COVERED BY SECTION 153A, BY EVEN MAKING REASSESS MENTS WITHOUT ANY FETTERS, IF NEED BE. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN T HE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PENDING. IN SUCH A CASE, THE SECOND PROVISO TO SUB- SECTION (1) OF SECTION 153A SAYS THAT SUCH PROCEEDINGS 'SHALL ABAT E'. THE REASON IS NOT FAR TO SEEK. UNDER SECTION 153A, THERE IS NO ROOM FOR MULTIPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION. THAT IS BECAUSE THE ASSE SSING OFFICER HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL INCOME' OF THE ASSESS EE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CANNOT BE SEVERAL ORDERS FOR THE SAME ASSESSMENT YEAR DETERMI NING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE THIS STA TE OF AFFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 31 ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE S EARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION OF THE TOTAL INCOME , IT HAS BEEN PROVIDED IN THE SECOND PROVISO OF SUB-SECTION (1) O F SECTION 153A THAT ANY PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT OF THE ASSESSEE WHICH ARE PENDING ON THE DATE OF INITIATIO N OF THE SEARCH OR MAKING REQUISITION 'SHALL ABATE'. ONCE THOSE PROCEE DINGS ABATE, THE DECKS ARE CLEARED, FOR THE ASSESSING OFFICER TO PAS S ASSESSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE BOTH THE INCOME DE CLARED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQU ISITION. THE POSITION THUS EMERGING IS THAT THE SEARCH IS INITIA TED OR REQUISITION IS MADE, THEY WILL ABATE MAKING WAY FOR THE ASSESSI NG OFFICER TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED, BUT IN CASE WHERE TH E ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPL ETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SI TUATION, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS OR RE ASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASSED UNDER SECTION 15 3A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSESSMENT, W HERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHEN THE SEARCH WAS INITIATED OR THE REQUISI TION WAS MADE.' (EMPHASIS SUPPLIED) 24. THE SAID JUDGMENT ALSO IN NO UNCERTAIN TERMS HOLDS THAT THE REASSESSMENT OF THE TOTAL INCOME OF THE COMPLETED A SSESSMENTS HAVE TO BE MADE TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH AND THE INCOME THAT ESCAPED ASSESSMENTS ARE REQUIRED TO BE CLUBBED TOGETHER WITH THE TOTAL INCOME DETERMINED IN THE OR IGINAL ASSESSMENT AND ASSESSED AS THE TOTAL INCOME. THE OBSERVATIONS MADE IN THE JUDGMENT CONTRASTING THE PROVISIONS OF DETERMINATION OF UNDI SCLOSED INCOME UNDER CHAPTER XIVB WITH DETERMINATION OF TOTAL INCOME UND ER SECTIONS 153A TO 153C OF THE ACT HAVE TO BE READ IN THE CONTEXT OF S ECOND PROVISO ONLY, WHICH DEALS WITH THE PENDING ASSESSMENT/REASSESSMEN T PROCEEDINGS. THE FURTHER OBSERVATIONS MADE IN THE CONTEXT OF DE NOVO ASSESSMENT PROCEEDINGS ALSO HAVE TO BE READ IN CONTEXT THAT IR RESPECTIVE OF THE FACT WHETHER ANY INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH, ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 32 THE NOTICE AND CONSEQUENTIAL ASSESSMENT UNDER SECTI ON 153A HAVE TO BE UNDERTAKEN. 25. THE ARGUMENT OF THE LEARNED COUNSEL THAT THE AO IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS THE INCRIM INATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION WHICH AS NOTI CED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH AND/OR REQUISITION . THE PROVISIONS OF SECTIONS 153A TO 153C CANNOT BE INTERPRETED TO BE A FURTHER INNINGS FOR THE AO AND/OR ASSESSEE BEYOND PROVISIONS OF SECTIONS 13 9 (RETURN OF INCOME), 139(5) (REVISED RETURN OF INCOME), 147 (INCOME ESCA PING ASSESSMENT) AND 263 (REVISION OF ORDERS) OF THE ACT. 26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTA L INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSM ENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE W ORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND RE ASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD N OT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERP RETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONL Y BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH OR REQUISITION OF DOCUMENTS. 27. THE ALLAHABAD HIGH COURT IN SMT. SHAILA AGARWAL'S ( SUPRA ) HAS HELD AS UNDER: '19. THE SECOND PROVISO TO SECTION 153A OF THE ACT, REFERS TO ABATEMENT OF THE PENDING ASSESSMENT OR RE-ASSESSMEN T PROCEEDINGS. THE WORD 'PENDING' DOES NOT OPERATE AN Y SUCH INTERPRETATION, THAT WHEREVER THE APPEAL AGAINST SU CH ASSESSMENT OR REASSESSMENT IS PENDING, THE SAME ALONG WITH ASSESS MENT OR REASSESSMENT PROCEEDINGS IS LIABLE TO BE ABATED. TH E PRINCIPLES OF INTERPRETATION OF TAXING STATUTES DO NOT PERMIT THE COURT TO INTERPRET THE SECOND PROVISO TO SECTION 153A IN A MANNER THAT WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE COMPLETE , AND THE MATTER IS PENDING IN APPEAL IN THE TRIBUNAL, THE EN TIRE PROCEEDINGS WILL ABATE. 20. THERE IS ANOTHER ASPECT TO THE MATTER, NAMELY T HAT THE ABATEMENT OF ANY PROCEEDINGS HAS SERIOUS CAUSES AND EFFECT IN AS MUCH AS THE ABATEMENT OF THE PROCEEDINGS, TAKES AWA Y ALL THE CONSEQUENCES THAT ARISE THEREAFTER. IN THE PRESENT CASE AFTER DEDUCTING BOGUS GIFTS IN THE REGULAR ASSESSMENT PRO CEEDINGS, THE PROCEEDINGS FOR PENALTY WERE DRAWN UNDER SECTION 27 1(1)(C) OF THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 33 ACT. THE MATERIAL FOUND IN THE SEARCH MAY BE A GROUND FO R NOTICE AND ASSESSMENT UNDER SECTION 153A OF THE ACT BUT TH AT WOULD NOT EFFACE OR TERMINATE ALL THE CONSEQUENCE, WHICH HAS ARISEN OUT OF THE REGULAR ASSESSMENT OR REASSESSMENT RESULTING IN TO THE DEMAND OR PROCEEDINGS OF PENALTY. ' (EMPHASIS SUPPLIED) THE SAID JUDGMENT WHICH ESSENTIALLY DEALS WITH SECO ND PROVISO TO SECTION 153A OF THE ACT ALSO SUPPORTS THE CONCLUSION, WHICH WE HAVE REACHED HEREINBEFORE. 28. IT HAS BEEN OBSERVED BY THE HON'BLE SUPREME COURT IN K.P. VARGHESE V. ITO [1981] 131 ITR 597/7 TAXMAN 13 THAT 'IT IS WELL RECOGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PR OVISION MUST BE SO CONSTRUED, IF POSSIBLE THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED.' 29. THE ARGUMENT OF THE COUNSEL FOR THE APPELLANT IF T AKEN TO ITS LOGICAL END WOULD MEAN THAT EVEN IN CASES WHERE THE APPEAL ARIS ING OUT OF THE COMPLETED ASSESSMENT HAS BEEN DECIDED BY THE CIT(A) , ITAT AND THE HIGH COURT, ON A NOTICE ISSUED UNDER SECTION 153A O F THE ACT, THE AO WOULD HAVE POWER TO UNDO WHAT HAS BEEN CONCLUDED UP TO THE HIGH COURT. ANY INTERPRETATION WHICH LEADS TO SUCH CONCLUSION H AS TO BE REPELLED AND/OR AVOIDED AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF K.P. VARGHESE ( SUPRA ). 30. CONSEQUENTLY, IT IS HELD THAT IT IS NOT OPEN FOR T HE ASSESSEE TO SEEK DEDUCTION OR CLAIM EXPENDITURE WHICH HAS NOT BEEN C LAIMED IN THE ORIGINAL ASSESSMENT, WHICH ASSESSMENT ALREADY STANDS COMPLET ED, ONLY BECAUSE A ASSESSMENT UNDER SECTION 153A OF THE ACT IN PURSUAN CE OF SEARCH OR REQUISITION IS REQUIRED TO BE MADE. IN THE CASE IN HAND, THE TRANSACTIONS OF UNSECURED LOANS AS WELL AS INTRODUCTION OF CAPITAL BY THE PARTNERS WERE DULY R ECORDED IN THE BOOKS OF ACCOUNT AND AVAILABLE WITH THE AO. FURTHER, DURING THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT ON 2 ND JULY 2015 NO MATERIAL MUCH LESS INCRIMINATING MATERIAL WAS EITHER FOUND OR SEIZED T O DISCLOSE ANY UNDISCLOSED INCOME ON ACCOUNT OF UNSECURED LOANS OR PARTNERS CAPITAL RECEIVED BY THE ASSESSEE FIRM. THE AO HAS PROPOSED TO MAKE THE ADDITION ON ACCOUNT OF UNSECURED LOANS AND PARTNERS CAPITAL UNDER SECTION 68 BEING UNEXPLAINED CASH CREDIT SOLELY ON THE BASIS O F THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKATA. IT IS P ERTINENT TO NOTE THAT THE SAID INFORMATION WAS AVAILABLE WITH THE AO PRIOR TO THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT IN CASE OF THE ASSESSE E ON 2 ND JULY, 2015. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 34 THEREFORE, EVEN THE SOLE BASIS OF ASSESSMENTS FRAME D UNDER SECTION 153A OF THE ACT IS THE INFORMATION RECEIVED FROM INVESTI GATION WING KOLKATA AND STATEMENT OF ONE SHRI ANAND SHARMA, WHO IS STATED T O BE AN ENTRY OPERATOR AND MANAGED VARIOUS CONCERNS/COMPANIES INC LUDING M/S.ROYAL CRYSTAL DEALERS, ONE OF THE LOAN CREDITORS OF THE A SSESSEE. EXCEPT THE SAID STATEMENT AND REPORT OF THE INVESTIGATION WING KOLK ATA, THE AO HAS NEITHER REFERRED TO OR WAS HAVING IN POSSESSION OF ANY MATERIAL TO INDICATE THAT THE UNSECURED LOANS SHOWN IN THE BOOKS OF ACCO UNTS AS WELL AS PARTNERS CAPITAL RECEIVED BY THE ASSESSEE ARE NOTH ING BUT ASSESSEES OWN UNACCOUNTED AND UNDISCLOSED INCOME ROUTED BACK IN T HE GARB OF UNSECURED LOANS AND PARTNERS CAPITAL. THERE IS NO DISPUTE THAT THESE TRANSACTIONS OF UNSECURED LOANS AND PARTNERS CAPIT AL CONTRIBUTION ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND DISCLOSED IN THE RETURN OF INCOME WHICH WERE ALREADY COMPLETED AS THE ASSESSMENTS FOR THESE FOUR ASSESSMENT YEARS WERE NOT PENDING ON THE DATE OF SE ARCH, THEREFORE, IT IS MANIFEST FROM THE RECORD THAT DURING THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE ACT IN THE CASE OF THE ASS ESSEE NO MATERIAL MUCH LESS THE INCRIMINATING MATERIAL WAS UNEARTHED OR AN Y UNDISCLOSED INCOME WHICH WAS NOT DISCLOSED IN THE BOOKS OF ACCOUNTS WA S DETECTED OR FOUND. THE ONLY INCRIMINATING MATERIAL WHICH WAS REFERRED BY THE AO IS PAGES 21 TO 26 OF ANNEXURE AS-1 IN RESPECT OF LONG TERM CAPI TAL GAIN EARNED BY SHRI RAJENDRA AGARWAL AND HIS FAMILY MEMBERS. THE SAID LONG TERM CAPITAL GAIN WAS DISCLOSED BY SHRI RAJENDRA AGARWAL IN HIS STATE MENT UNDER SECTION 132(4) AND, THEREFORE, IT WAS SURRENDERED AND OFFER ED TO TAX BY SHRI RAJENDRA AGARWAL AND HIS FAMILY MEMBERS IN THE YEAR OF SEARCH. THE AO HIMSELF HAS NOT MADE ANY ADDITION IN THE HAND OF TH E ASSESSEE ON ACCOUNT OF LONG TERM CAPITAL GAIN WHICH WAS FOUND DURING TH E COURSE OF SEARCH AND SEIZURE. THUS, EXCEPT THE MATERIAL DISCLOSING THE LONG TERM CAPITAL GAIN IN THE HAND OF SHRI RAJENDRA AGARWAL, NO OTHER INCRIMI NATING MATERIAL EITHER FOUND OR REFERRED OR IS THE BASIS OF THE ADDITION M ADE BY THE AO WHILE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 35 FRAMING THE ASSESSMENT UNDER SECTION 153A OF THE AC T FOR THE ASSESSMENT YEARS 2010-11 TO 13-14. IT IS APPROPRIATE TO REFER RELEVANT PART OF THE ASSESSMENT ORDER IN PARA 12 PAGES 48 TO 50, PARA 19 PAGE 83 AND PARA 22 PAGE 86 AS UNDER :- 12. SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE FI RM HAVE BEEN DULY CONSIDERED. HOWEVER, EVEN THE VERY ELABORATE AND CA SE LAWS LOADED SUBMISSIONS OF THE ASSESSEE ARE TOTALLY OFF THE MAR K. AGAINST THE SELF- SPEAKING FACTS OF THE VERY NATURE OF THE ACTIVITIES OF THE SO CALLED PARTNERS PROVIDING HUGE PARTNERS CAPITAL IN THE M OST UNINTERESTED MANNER AND PROVIDING HUGE UNSECURED LOANS WITHOUT A NY COLLATERAL OR OTHER SECURITY, THE EMPHASIS OF THE ASSESSEE FIRM I N ITS SUBMISSIONS HAS BEEN ON SEEKING PROTECTION UNDER VARIOUS JUDICIAL D ECISIONS EVEN WITHOUT HAVING ANY FACT COHERENCE. THE SUBMISSIONS MADE BY THE ASSESSEE ARE COMPLETELY DEVOID OF MERIT IN THE LIGHT OF THE FOLL OWING FACTS AND CIRCUMSTANCES; A. THE DEPARTMENT HAS VERY SOUND BASIS TO TREAT, THE R ECEIPTS OF UNSECURED LOAN AND PARTNERS CAPITAL FROM THE ABOVE MENTIONED COMPANIES AS BOGUS AND IN GENUINE. THE FINDINGS OF THIS OFFICE AND INVESTIGATION REPORT OF THE INVESTIGATION DIRECTORA TE KOLKATA ARE NOT BASED ON ANY PRESUMPTION, ASSUMPTION, GUESS OR BARE SUSPICION. WHERE THE NATURE AND SOURCE OF A RECEIPT, WHETHER I T BE OF MONEY OR OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPEN FOR THE REVENUE TO HOLD THAT IT IS THE INCO ME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVENUE TO SHOW T HAT THE INCOME IS FROM ANY PARTICULAR SOURCE AS ENUMERATED THE HONBL E SUPREME COURT IN THE CASE OF ROSHAN DI HATTI V. CIT (1977) 107 IT R 938 (SC) AND KALE KHAN MOHAMMAD HANIF V. CIT (1963) 50 ITR 1 (SC ). PRIMA FACIE ONUS IS ALWAYS ON THE ASSESSEE TO PROVE THE CASH CREDIT ENTRY FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IN LAND MARK CASES LIKE KALE KHAN MOHAMM AD HANIF V CIT (1963) 50 ITR 1 (SC), ROSHAN DI HATTI V CIT (1977) 107 ITR (SC) IT HAS BEEN HELD THAT THE LAW I S WELL SETTLED THAT THE ONUS OF PROVING THE SOURCE OF A SU M OF MONEY FOUND TO HAVE BEEN RECEIVED BY AN ASSESSEE, I S ON HIM. WHERE THE NATURE AND SOURCE THEREOF CANNOT BE EXPLAINED SATISFACTORILY, IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHE R BURDEN IS ON THE REVENUE TO SHOW THAT THE INCOME IS FROM A NY PARTICULAR SOURCE. IT MAY ALSO BE POINTED OUT THAT THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 36 BURDEN OF PROOF IS FLUID FOR THE PURPOSES OF SECTIO N 68. ONCE ASSESSEE HAS SUBMITTED BASIC DOCUMENTS RELATIN G TO IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORT HINESS THEN AO MUST DO SOME INQUIRY TO CALL FOR MORE DETAI LS TO INVOKE SECTION 68. B. THE ASSESSEE FIRM HAS FILED CONFIRMATION LETTERS AN D THIS OFFICE HAS CARRIED OUT FURTHER ENQUIRY TO EXAMINE THE REALITY OF THE TRANSACTIONS. AN ENQUIRY WAS SENT TO THE INVESTIGATION DIRECTORAT E KOLKATA AND IT HAS BEEN ESTABLISHED THAT THESE INVESTOR OR LENDER COMPANIES ARE CONTROLLED BY THE ENTRY OPERATORS. THE STATEMENTS OF VARIOUS ENTRY OPERATORS ARE SUFFICIENT EVIDE4NCES TO SHOW THAT TH E UNSECURED LOAN AND PARTNERS CAPITAL ARE ASSESSEES OWN UNDISCLOSE D INCOME BROUGHT INTO THE BOOKS OF THE ASSESSEE UNDER THE GARB OF UN SECURED LOAN AND PARTNERS CAPITAL. C. THE DEPARTMENT HAS CARRIED OUT SEARCH OVER THE ASSE SSEE GROUP AND DURING THE COURSE OF SEARCH ACTION U/S 132 OF THE I .T. ACT, 1961, THE INCRIMINATING DOCUMENTS SEIZED DURING SEARCH PROCEE DINGS VIDE PG NO. 21 TO 26 OF ANNEXURE AS-1 OF PARTY B-1, WHEREIN THE DETAILS OF YEAR- WISE LTCG EARNED BY SHRI RAJENDRA AGRAWAL AND HIS F AMILY MEMBERS, IS MAINTAINED, WHICH DURING SEARCH ACTION HAS BEEN ACCEPTED TO BE BOGUS BY ALL FAMILY MEMBERS IN THEIR RESPECTIVE STA TEMENTS. 19. IN VIEW OF ABOVE FACTS OF THE CASE AND IN THE LIGHT OF ABOVE JUDICIAL DECISION, IT IS ESTABLISHED THAT GENUINENESS OF THE TRANSACTION HAS NOT BEEN PROVED. SECTION 68 OF THE I.T. ACT PROVIDES FO R CHARGING TO INCOME TAX ON ANY SUM CREDITED IN THE BOOKS OF THE ASSESSE E MAINTAINED FOR ANY PREVIOUS YEAR IF THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED IS NOT, I N THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY. IT PLACES NO DUTY UPON THE ASSESSING OFFICER TO POINT TO THE SOURCE FROM WHICH THE MONEY WAS RECEIVED BY THE ASSESSEE. WHERE AN ASSESSEE FAILS TO PROVE SATISFA CTORILY THE SOURCE AND THE NATURE OF CERTAIN AMOUNT OF CREDIT DURING THE A CCOUNTING YEAR, THE INCOME-TAX OFFICER IS ENTITLED TO DRAW THE INFERENC E THAT THE RECEIPT ARE OF AN ASSESSABLE NATURE. THUS, THE ASSESSEE IS UNABLE TO DISCHARGE ITS BURDEN OF PROOF BY FAILING TO ESTABLISH LENDERS ID ENTITY, FORGET THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE LENDER. HENCE, THE UNSECURED LOANS AND PARTNERS CAPITAL SHOWN TO HAVE BEEN RECEIVED FROM VARIOUS KOLKATA BASED COMPANIES AND OTHER COMP ANIES REMAINED UNEXPLAINED. IN THE CIRCUMSTANCES, I AM LEFT WITH N O OPTION THAN TO TAX THE ENTIRE UNEXPLAINED CREDITS BY WAY OF PARTNERS CAPITAL AND UNSECURED LOANS RECEIVED FROM THE PERSONS MENTIONED IN PARA 5 ABOVE AS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 37 UNEXPLAINED CASH CREDITS U/S 68 OF THE INCOME TAX A CT, CHARGEABLE TO TAX AS INCOME OF THE ASSESSEE FIRM FOR THE RESPECTIVE A SSESSMENT YEARS. 22. AFTER EXAMINATION OF THE INFORMATION AND DETA ILS PLACED ON RECORD AND DISCUSSION WITH THE ASSESSEE, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER :- RETURNED INCOME AS P ER ITR U/S 153A OF THE ACT. RS. 2,82,83,460/ - ADDITIONS| UNEXPLAINED CASH CREDITS U/S |68 OF THE ACT IN THE FORM OF |UNSECURED LOAN AND PARTNERS |CAPITAL RS. 67,20,14,999/ - ASSESSED INCOME RS. 70,02,98,459/ - R/O RS. 70,02,98,459/ - THE TOTAL INCOME OF THE ASSESSEE IN THE STATUS OF F IRM FOR ASSESSMENT YEAR 2010-11 RELEVANT TO PREVIOUS YEAR 2009-10 IS A SSESSED AT RS. 70,02,98,459/- U/S 153A READ WITH SECTION 143(3) OF I.T. ACT, 1961. THE FORM ITNS-150 SHOWING CALCULATION OF TAX AND INTERE ST CHARGEABLE, IF ANY, IS ATTACHED HEREWITH AND FORMS A PART OF THIS ORDER . A NOTICE OF DEMAND U/S 156 OF THE ACT AND CHALLAN FOR PAYMENT OF TAX, IF PAYABLE, IS HEREBY ISSUED. PENALTY NOTICE U/S 274 RWS 271(1)(C) IS ISS UED SEPARATELY. THE ENTIRE FINDING OF THE AO IS BASED ON THE INFORM ATION RECEIVED FROM THE INVESTIGATION WING KOLKATA AND STATEMENT OF SHRI AN AND SHARMA. THE LD. CIT (A) THOUGH HAS NOT DISPUTED THE LEGAL PROPOSITI ON ON THIS ISSUE, HOWEVER, THE CONTENTION OF THE ASSESSEE WAS TURNED DOWN MERELY ON THE GROUND THAT THE SLPS FILED BY THE REVENUE IN THE CA SES OF KABUL CHAWLA (SUPRA) AND M/S. ALL CARGO GLOBAL LOGISTICS (SUPRA) ETC. HAVE BEEN ADMITTED FOR DECISION BY THE HONBLE SUPREME COURT. THE REL EVANT PART OF THE FINDING OF THE LD. CIT (A) IN PARA 3.2.2 AND 3.2.4 AT PAGES 35 AND 36 ARE AS UNDER :- 3.2.2 AS PER THE PROVISIONS OF THIS SECTION WHERE A SEARCH IS INITIATED U/S 132 OF THE ACT, THE A.O SHALL ISSUE A NOTICE REQUIR ING THE PERSON SEARCHED TO FURNISH HIS RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. ONCE SUCH RETURNS ARE FILED, T HE AO HAS TO ASSESS OR ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 38 REASSESS THE TOTAL INCOME OF SUCH SIX ASSESSMENT YE ARS.(EMPHASIS SUPPLIED BY ME). (THE DECISIVE WORDS USED IN THE PROVISIONS ARE TO ' ASSESSEE OR REASSESS THE TOTAL INCOME' ). THE A.O. IS THUS DUTY BOUND TO DETERMINE THE 'TOTAL INCOME' OF THE ASSESSEE FOR SUCH SIX ASSESSM ENT YEARS AND IT IS OBVIOUS THAT 'TOTAL INCOME' REFERS TO THE SUM TOTAL OF INCOME IN RESPECT OF WHICH A PERSON IS ASSESSABLE. THE TOTAL INCOME THER EFORE WILL COVER NOT ONLY THE INCOME EMANATING FROM DECLARED SOURCES OR ANY MATERIAL PLACED BEFORE THE ASSESSING OFFICER BUT FROM ALL SOURCES I NCLUDING THE UNDISCLOSED ONES, OR BASED ON THE UNPLACED MATERIAL BEFORE THE AO. 3.2.3 THE CONCEPT OF ASSESS OR REASSESS AND SHALL ABATE AS CONTEMPLATED U/S 153A IS UNDER HOT JUDICIAL DEBATE. I FIND THAT LEGALLY, THIS ISSUE IS VERY CONTENTIOUS IN VIEW OF THE DIVERGENT VIEWS OF THE VARIOUS AUTHORITIES. THE APPELLANT HAS TRIED TO HIGHLIGHT M OST OF THEM. HOWEVER, IT IS EQUALLY PERTINENT TO MENTION HERE THAT THE DEPAR TMENT HAS NOT ACCEPTED THE DECISIONS OF HON'BLE MUMBAI HIGH COURT IN THE C ASE OF M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENTAL WAREHOUSING (NHAVA SHEVA) LTD., AND SLP HAS BEEN FILED BEFORE THE HON'BLE SUPREME C OURT. THE HON'BLE SUPREME COURT HAS GRANTED LEAVE VIDE ORDER DATED 12 .10.2015 AS REPORTED IN 64 TAXMANN.COM 34 (S.C.). SIMILARLY, IN THE CASE OF KABUL CHAWLA SLP HAS ALSO BEEN FILED. 3.2.4 IN VIEW OF SLPS ADMITTED IN CASE OF KABUL CHAWLA, M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENTAL WAREHOUSING (NHAVA SHEVA) LTD., (SUPRA), ASSESSEES CONTENTION CANNOT BE ACCEPTED. MOREOVER, IN ANY CASE, THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PE R RELEVANT GROUND OF APPEAL, THE ISSUE RAISED IN THIS GROUND FOR PRESENT REMAINS FOR ACADEMIC DISCUSSION ONLY. ACCORDINGLY, ISSUE RAISED IN GROUN D NO. 12 IS DISMISSED. THEREFORE, NEITHER IN THE ASSESSMENT ORDER NOR IN T HE ORDER OF THE LD. CIT (A) THERE IS ANY MENTION OR FINDING THAT THE ADDITI ONS HAVE BEEN MADE BY THE AO ON THE BASIS OF ANY INCRIMINATING MATERIAL F OUND DURING THE COURSE OF SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. THE AO HAS SOLELY RELIED UPON THE REPORT OF THE INVESTIGATION WING KOLKATA A ND STATEMENT OF ONE SHRI ANAND SHARMA RECORDED BY THE INVESTIGATION WIN G DURING THE SURVEY UNDER SECTION 133A OF THE ACT. THEREFORE, EVEN IF T HE INFORMATION/REPORT OF THE INVESTIGATION WING KOLKATA IS CONSIDERED AS A RELEVANT EVIDENCE, THE SAME CANNOT BE REGARDED AS INCRIMINATING MATERI AL UNEARTHED DURING ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 39 THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE IT ACT IN CASE OF THE ASSESSEE. THE REQUIREMENT FOR MAKING THE ADDITI ON UNDER SECTION 153A IN THE ASSESSMENT YEARS WHERE THE ASSESSMENT W AS NOT PENDING ON THE DATE OF SEARCH AND THE PROCEEDINGS ARE IN THE N ATURE OF REASSESSMENT IS ESSENTIALLY THE INCRIMINATING MATERIAL DISCLOSIN G UNDISCLOSED INCOME WHICH WAS NOT DISCLOSED BY THE ASSESSEE. IN THE CAS E IN HAND, THE AO HIMSELF HAS NOT CLAIMED ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. AC CORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE BI NDING PRECEDENTS ON THIS ISSUE IN WHICH THE SLP FILED BY THE REVENUE WA S ALSO DISMISSED BY THE HONBLE SUPREME COURT, THE ADDITIONS MADE BY THE AO WHILE PASSING THE ASSESSMENT ORDERS UNDER SECTION 153A FOR THE ASSESS MENT YEARS 2010-11 TO 13-14 ARE NOT SUSTAINABLE AND ACCORDINGLY THE SA ME ARE LIABLE TO BE DELETED. WE ORDER ACCORDINGLY. THE FOUNDATION OF THE ASSESSMENT ORDER IS THE INFORM ATION RECEIVED FROM THE INVESTIGATION WING, KOLKATA AND STATEMENT OF SH RI ANAND SHARMA AND SHRI ANKIT BAGRI IN RESPECT OF THE DIFFERENT TRANSA CTIONS OF UNSECURED LOAN/SPECIAL DEPOSITS FOR ISSUING SPECIAL PREFERENT IAL EQUITY SHARES. THE LD. CIT(A) THOUGH HAS NOT DISPUTED THE LEGAL PROPOSITION ON THIS ISSUE, HOWEVER, THE GROUND RAISED BY THE ASSESSEE WAS DISMIS SED MERELY ON THE REASON THAT THE SLP FILED BY THE REVENUE IN THE CAS E OF CIT VS. KABUL CHAWLA (SUPRA) AND M/S ALL CARGO GLOBAL LOGISTICS LT D. (SUPRA) HAVE BEEN ADMITTED FOR DECISION BY THE HON'BLE SUPREME COURT. THE RELEVANT FINDINGS OF LD. CIT(A) IN THE CASE OF KOTA DALL MILL HAS BEEN REPRODUCED BY THE TRIBUNAL IN THE ORDER CITED (SUPRA) AND WE FIND THAT AN IDENTICAL FINDING HAS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 40 BEEN GIVEN BY THE LD. CIT(A) IN THE CASE OF ASSESSEE . THEREFORE, NEITHER IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS REF ERRED OR RELIED UPON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE ACTION IN THE CASE OF ASSESSEE NOR THE LD. CIT(A) HA S DISPUTED THIS FACT THAT THE ASSESSING OFFICER WAS NOT HAVING ANY INCRIMINATI NG MATERIAL IN HIS POSSESSION FOUND AND SEIZED DURING THE COURSE OF SE ARCH AND SEIZURE ACTION IN THE CASE OF THE ASSESSEE WHICH HAS DISCLOS ED ANY UNACCOUNTED OR UNDISCLOSED INCOME OF THE ASSESSEE. THE INFORMATION RECEIVED FROM THE INVESTIGATION WING, KOLKATA AS WELL AS THE STATEMENT OF SHRI ANAND SHARMA AND SHRI ANKIT BAGRI CANNOT BE REGARDED AS INCRIMIN ATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND SEIZURE U /S 132 OF THE ACT IN THE CASE OF THE ASSESSEE. HENCE, IN VIEW OF THE DECI SIONS/BINDING PRECEDENTS AS RELIED UPON BY THE LD AR AND ALSO CON SIDERED BY THIS TRIBUNAL IN THE CASE OF KOTA DALL MILL (SUPRA), WE HA VE NO REASON TO TAKE A DIFFERENT VIEW ON THIS ISSUE. ACCORDINGLY, BY FOLLOWI NG THE EARLIER DECISION OF THIS TRIBUNAL IN THE CASE OF GROUP CONCERN M/S KO TA DALL MILL WE HOLD THAT THE ADDITION MADE BY THE ASSESSING OFFICER WHIL E PASSING THE ASSESSMENT ORDERS FOR THE A.Y. 2010-11 TO 2012-13 U /S 153A OF THE ACT ARE NOT SUSTAINABLE AND LIABLE TO BE DELETED. HENCE , THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 41 10. GROUND NO. 2 OF THE APPEAL IS REGARDING THE ADD ITION MADE BY THE ASSESSING OFFICER WITHOUT GIVING THE OPPORTUNITY OF CROSS EXAMINATION OF THE WITNESSES AND CONSEQUENTLY THERE IS A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 11. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE SOLE BASIS OF THE ADDITION IS THE STATEMENT OF SHRI ANAND SHARMA IN S OME OF THE ASSESSMENT YEARS AND THE STATEMENT OF SHRI ANKIT BAGRI IN SOME OTHER ASSESSMENT YEARS WHEREAS THE ASSESSEE WAS NOT GIVEN THE OPPORTUN ITY OF CROSS EXAMINATION DESPITE REPEATED REQUESTS AND DEMANDS. THE ASSESSING OFFICER HAS VIOLATED THE PRINCIPLES OF NATURAL JUST ICE BY NOT PROVIDING THE COPIES OF MATERIAL USED AGAINST THE ASSESSEE AT TH E ASSESSMENT STAGE AND FURTHER NOT PROVIDING THE OPPORTUNITY OF CROSS EXAM INATION OF THE WITNESS DURING THE REMAND PROCEEDINGS AT APPELLATE STAGE. THOUGH THE LD. CIT(A) CALLED FOR A REMAND REPORT AND ASKED THE ASSESSING OFFICER TO PROVIDE OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE, H OWEVER, AFTER THE REMAND PROCEEDINGS THE ASSESSING OFFICER DID NOT AF FORD AN OPPORTUNITY OF CROSS EXAMINATION RATHER THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO PRODUCE THE WITNESS INSTEAD OF ALLOWING THE ASSESSEE TO CROSS EXAMINE THE WITNESS. IN SUPPORT OF HIS CONTENTION, THE LD. A/R HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF ANDAMA N TIMBER INDUSTRIES VS. COMMISSIONER OF CENTRAL EXCISE (2016) 15 SCC 78 5 (SC). HE HAS ALSO ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 42 RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ASHWANI GUPTA, 322 ITR 396 (DELHI) AND SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT ONCE THERE IS A VIOLATION OF PR INCIPLES OF NATURAL JUSTICE INASMUCH AS SEIZED MATERIAL IS NOT PROVIDED TO THE ASSESSEE NOR WAS PERMITTED TO CROSS EXAMINE A PERSON ON WHOSE STATEME NT THE ASSESSING OFFICER RELIED UPON, IT WOULD AMOUNT TO DEFICIENCY A ND DENIAL OF NATURAL JUSTICE. THE LD. A/R HAS THEN REFERRED TO THE DECIS ION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF H.R. MEHTA VS. ACIT, 387 I TR 561 (BOMBAY). THUS THE LD. A/R HAS SUBMITTED THAT ONCE THE ASSESSE E HAS ALREADY DISCHARGED ITS PRIMARY ONUS TO PROVE THE CASH CREDI T BY FURNISHING RELEVANT DOCUMENTS, SUBSTANTIATED IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION, THEN THE BURDEN IS SHIFTED ON THE ASSESSING OFFICER TO DISPROVE THE DOCUMENTS PRODUCED BY THE ASSESSEE IN SUPPORT OF THE CLAIM. THE ASSESSING OFFICER HAS RELIED UPON THE STATEMENT OF SHRI ANAND SHARMA AND NO MATERIAL WAS BROUGHT ON RECORD TO CONTROVERT THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE. THUS THE LD. A.R HA S STATED THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINE D BY THE LD. CIT (A) BE DELETED. 12. ON THE OTHER HAND, THE LD CIT-DR HAS SUBMITTED THAT THE LD. CIT(A) HAS DULY CONSIDERED THE OBJECTION OF THE ASSESSEE F OR ALLOWING THE CROSS EXAMINATION OF SHRI ANAND SHARMA AND SHRI ANKIT BAG RI, HOWEVER, SINCE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 43 THE WITNESSES BELONGED TO KOLKATA AND STATEMENTS WERE ALSO RECORDED AT KOLKATA BY THE INVESTIGATION WING, THEREFORE, IT WAS NOT POSSIBLE FOR THE ASSESSING OFFICER TO MAKE THEM AVAILABLE AT KOTA FO R CROSS EXAMINATION OF THE ASSESSEE. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 13. IN REBUTTAL, THE LD AR OF THE ASSESSEE HAS SUBM ITTED THAT THE ASSESSEE AGREED TO BEAR THE COST OF CROSS EXAMINATI ON OF THE WITNESSES, HOWEVER AFTER ACCEPTING THE OBJECTIONS INITIALLY BY THE LD. CIT(A), THE ASSESSEE WAS FINALLY NOT GRANTED THE OPPORTUNITY OF CROSS EXAMINATION, THEREFORE, THERE IS A VIOLATION OF PRINCIPLES OF NA TURAL JUSTICE. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASS ESSEE DEMANDED THE CROSS EXAMINATION OF THE WITNESSES, THEREFORE, STATE MENTS HAVE BEEN RELIED UPON BY THE ASSESSING OFFICER WHILE FRAMING THE ASSE SSMENTS UNDER CONSIDERATION. THE LD. CIT(A) THOUGH WHILE CALLING THE REMAND REPORT OF THE ASSESSING OFFICER DIRECTED TO ALLOW THE CROSS EXAMIN ATION TO THE ASSESSEE, HOWEVER, WHEN THE ASSESSING OFFICER HAS EXPRESSED HIS INABILITY TO PRODUCE THE WITNESSES FOR CROSS EXAMINATION, THE LD. CIT(A) H AS FINALLY REJECTED THE OBJECTION RAISED BY THE ASSESSING OFFICER. AN IDENT ICAL ISSUE HAS BEEN CONSIDERED BY US IN THE CASE OF KOTA DALL MILL (SUP RA) VIDE ORDER DATED 31/12/2018 IN PARA 11.1 AS UNDER: ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 44 11.1. EVEN OTHERWISE, THE ASSESSMENT ORDER IS SOLE LY BASED ON THE REPORT OF THE INVESTIGATION WING KOLKATA WHICH IN TURN IS NOTHING BUT THE NARRATION OF THE STATEMENTS RECORDED DURING THE INVESTIGATION AN D THE AO WAS HAVING IN POSSESSION THE STATEMENT OF ONLY SHRI ANAND SHAR MA. THEREFORE, ALL THESE PROCEEDINGS CONDUCTED BY THE INVESTIGATION WI NG KOLKATA WERE AT THE BACK OF THE ASSESSEE AND HENCE THE STATEMENT WH ICH IS THE FOUNDATION OF THE REPORT OF THE INVESTIGATION WING KOLKATA AS WELL AS THE ASSESSMENT ORDER CANNOT BE ACCEPTED IN THE ABSENCE OF GIVING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. W E FIND THAT THE ASSESSEE HAS INSISTED FOR CROSS EXAMINATION DURING THE ASSESSMENT PROCEEDINGS AND FURTHER DURING THE APPELLATE PROCEE DINGS. THE LD.CIT(A) EVEN CALLED FOR A REMAND REPORT AND DIRECTED THE AO TO ALLOW CROSS EXAMINATION TO THE ASSESSEE. HOWEVER, THE AO HAS EX PRESSED HIS INABILITY TO ALLOW THE ASSESSEE FOR CROSS EXAMINATION OF THE WITNESSES DUE TO THE REASON THAT THE WITNESSES BELONG TO KOLKATA AND IT IS NOT POSSIBLE FOR AO TO MAKE SUCH ARRANGEMENT. THE LD. CIT(A) HAS FINALL Y DENIED THE CROSS EXAMINATION TO THE ASSESSEE BY GIVING HIS FINDING I N PARA 5.11 AT PAGE 188 ALREADY REPRODUCED IN THE EARLIER PART OF THIS ORDE R AND, THEREFORE, THE ONLY REASON FOR DENIAL OF CROSS EXAMINATION BY THE LD.CIT(A) IS THAT THE STATEMENTS ARE SO VOCAL AND UNDENIABLE THAT CROSS E XAMINATION OF SUCH ACCOMMODATION ENTRY PROVIDED BY THOUSANDS OF BENEFI CIARIES ACROSS INDIA IS NEITHER PRACTICABLE NOR VIABLE AND THEREFORE UNC ALLED FOR. WE FIND THAT THE ASSESSEE HAS DEMANDED THE CROSS EXAMINATION ONL Y IN RESPECT OF THE ALLEGED TRANSACTIONS OF LOANS AND NOT FOR THE ENTIR E BUSINESS OF THE ENTRY PROVIDERS PROVIDING THE BOGUS ENTRIES. UNDISPUTEDLY , THE STATEMENT OF SHRI ANAND SHARMA WAS RECORDED BY THE INVESTIGATION WING KOLKATA AT THE BACK OF THE ASSESSEE, EVEN THE PROCEEDINGS BY THE I NVESTIGATION WERE CONDUCTED AT THE BACK OF THE ASSESSEE, THEREFORE, T HE SAID STATEMENT OF SHRI ANAND SHARMA CANNOT BE THE SOLE BASIS OF ASSES SMENT WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE . THE HONBLE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 45 SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTR IES VS. CCE (SUPRA) WHILE DEALING WITH THE ISSUE OF VIOLATION OF PRINCI PLES OF NATURAL JUSTICE FOR NOT PROVIDING THE OPPORTUNITY OF CROSS EXAMINATION OF THE WITNESSES WHOSE STATEMENTS WERE RELIED ON BY THE AO HAS HELD IN PARA 6 TO 9 AS UNDER :- 6. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROSS -EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNT ED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TW O WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE S TATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NO T GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY TH E ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID P LEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE T RIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTE NABLE. THE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DE ALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSS ESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX- FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS W ORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOS E DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. 7. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR TESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS- EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS WERE, IN FACT, SOLD TO THE SAID DEALERS WITNESSES AT THE PRICE WHICH IS MENTIONED I N THE PRICE LIST ITSELF COULD BE THE SUBJECT-MATTER OF CROSS-EXAMINATION. T HEREFORE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUBJECT- MATTER OF THE CROSS-EXAMINATION AND MAKE THE REMARK S AS MENTIONED ABOVE. WE MAY ALSO POINT OUT THAT ON AN EARLIER OCC ASION WHEN THE MATTER CAME UP BEFORE THIS COURT IN CCE V. ANDAMAN TIMBER INDUSTRIES LTD., ORDER DATED 17.3.2005 WAS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 46 8. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT IF THE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MA TERIAL WITH THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY I TS ACTION, AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WAS THE ON LY BASIS OF ISSUING THE SHOW-CAUSE NOTICE. 9. WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED BY THE TRIBUNAL AND ALLOW THIS APPEAL. NO COSTS. ONCE THE ASSESSEE HAS DISPUTED THE CORRECTNESS OF T HE STATEMENT AND WANTED TO CROSS EXAMINE THE WITNESS WHICH WAS NOT G IVEN BY THE AO AS WELL AS LD. CIT (A), THEN THE ORDERS PASSED BASED O N SUCH STATEMENT ARE NOT SUSTAINABLE IN LAW. THE HONBLE DELHI HIGH COUR T IN CASE OF CIT VS. ASHWANI GUPTA, 322 ITR 396 (DELHI) WHILE DEALING WI TH THE ISSUE OF NOT PROVIDING THE OPPORTUNITY TO CROSS EXAMINE THE WITN ESSES HAS HELD IN PARA 5 TO 7 AS UNDER :- 5. SECONDLY, IN FACT, A RECTIFICATION APPLICATION BEI NG MA 264/DELHI/2008 UNDER SECTION 254(2) OF THE INCOME-TAX ACT, 1961 HA D BEEN FILED BY THE REVENUE BEFORE THE SAID TRIBUNAL. IN THAT ALSO, IN PARAGRAPH ( G ) OF THE MISCELLANEOUS APPLICATION, THE REVENUE HAD SUBMITTE D AS UNDER: '( G )BECAUSE, ALTHOUGH FINDINGS OF THE TRIBUNAL ARE FACTUALLY CORRECT BUT THE DECISION OF THE TRIBUNAL IS NOT ACC EPTABLE BECAUSE VIOLATION OF THE CANONS OF NATURAL JUSTICE IN ITSEL F IS NOT FATAL ENOUGH SO AS TO JEOPARDIZE THE ENTIRE PROCEEDINGS. IN THE INTEREST OF JUSTICE, THE TRIBUNAL COULD HAVE SET ASIDE THE ASSE SSMENT ORDER WITH THE LIMITED PURPOSE OF OFFERING ASSESSEE AN OPPORTU NITY TO CROSS- EXAMINE SHRI MANOJ AGGARWAL BEFORE COMPLETING THE PROCEEDINGS.' [EMPHASIS SUPPLIED] 6. A READING OF THE SAID PARAGRAPH ( G ) MAKES IT CLEAR THAT THE REVENUE HAD ACCEPTED THE FINDINGS OF THE TRIBUNAL ON FACTS AS A LSO THE POSITION THAT THERE HAD BEEN A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. HOWEVER, THE REVENUE'S PLEA WAS THAT THE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE WAS NOT FATAL SO AS TO JEOPARDIZE THE ENTIRE PROCEEDING S. THE SAID MISCELLANEOUS APPLICATION WAS ALSO REJECTED BY THE TRIBUNAL BY IT S ORDER DATED 28-11- 2008. 7. IN VIEW OF THE FOREGOING CIRCUMSTANCES, WE FEEL TH AT NO INTERFERENCE WITH THE IMPUGNED ORDER IS CALLED FOR. THE TRIBUNAL HAS CORRECTLY UNDERSTOOD THE LAW AND APPLIED IT TO THE FACTS OF T HE CASE. ONCE THERE IS A VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE INAS MUCH AS SEIZED MATERIAL IS NOT PROVIDED TO AN ASSESSEE NOR IS CROSS-EXAMINATIO N OF THE PERSON ON ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 47 WHOSE STATEMENT THE ASSESSING OFFICER RELIES UPON, GRANTED, THEN, SUCH DEFICIENCIES WOULD AMOUNT TO A DENIAL OF OPPORTUNIT Y AND, CONSEQUENTLY, WOULD BE FATAL TO THE PROCEEDINGS. FOLLOWING APPROA CH ADOPTED BY US IN SMC SHARE BROKERS LTD.'S CASE ( SUPRA ), WE SEE NO REASON TO INTERFERE WITH THE IMPUGNED ORDER. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. THUS THE HONBLE HIGH COURT HAS HELD THAT ONCE THER E IS A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE INASMUCH AS SEIZED MA TERIAL IS NOT PROVIDED TO THE ASSESSEE NOR IS CROSS EXAMINATION OF THE PER SON ON WHOSE STATEMENT THE AO RELIED UPON, GRANTED, THEN, SUCH D EFICIENCIES WOULD AMOUNT TO DENIAL OF OPPORTUNITY AND CONSEQUENTLY WO ULD BE FATAL TO THE PROCEEDINGS. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF H.R. MEHTA VS. ACIT, 387 ITR 561 (BOMBAY) HAS ALSO CONSIDERED THE ISSUE OF NOT PROVIDING OPPORTUNITY OF CROSS EXAMINATION IN PARA 11 TO 17 AS UNDER :- 11. WE HAVE THEREFORE PROCEEDED TO HEAR AND DECIDE THE MATTER UNASSISTED BY THE REVENUE. IN THE COURSE OF HIS SUBMISSIONS MR . TRALSHAWALA HAD PRESSED INTO SERVICE INTER ALIA THE DECISION OF THE CALCUTTA HIGH COURT IN MATHER & PLATT (INDIA) LTD. ( SUPRA ) AND SUBMITTED THAT MERELY BECAUSE A PERSON IS NOT FOUND AT AN ADDRESS AFTER SEVERAL YEA RS IT CANNOT BE HELD THAT HE IS NON EXISTENT AND THAT THE ASSESSEE HAD DISCHA RGED HIS PRIMARY ONUS BY IDENTIFYING THE SOURCE OF THE AMOUNT PAID. THE COUR T OBSERVED THAT ONCE THE PRIMARY ONUS IS DISCHARGED, THE ONUS SHIFTED TO THE REVENUE TO VERIFY GENUINENESS OF THE TRANSACTION. IN THE PRESENT CASE NO SUCH EFFORT WAS MADE BY THE REVENUE. WE FIND THAT IN S. HASTIMAL ( SUPRA ) THE MADRAS HIGH COURT OBSERVED THAT AFTER A LAPSE OF SEVERAL YEARS THE ASSESSEE SHOULD NOT BE PLACED UPON THE RACK AND CALLED UPON TO EXPLAIN NOT ONLY MERELY, THE ORIGIN AND SOURCE OF HIS CAPITAL CONTRIBUTION BUT T HE ORIGIN OF ORIGIN AND THE SOURCE OF SOURCE AS WELL. IN YET ANOTHER CASE O F BAHRI BROTHERS (P) LTD. ( SUPRA ) THE DIVISION BENCH OF PATNA HIGH COURT OBSERVED T HAT WHERE THE ASSESSEE UPON WHOM THE INITIAL BURDEN LIES, PRO DUCES BANK CERTIFICATE TO ESTABLISH THAT THE TRANSACTION WAS CARRIED OUT T HROUGH ACCOUNT PAYEE CHEQUES THUS DISCLOSING THE IDENTITY OF THE CREDITO RS AS ALSO THE SOURCE OF INCOME, THE BURDEN SHIFTS ON TO THE DEPARTMENT AND THE DEPARTMENT CANNOT ADD THE CASH CREDITS TO HIS INCOME FROM UNDISCLOSED SOURCE. 12. THE HON'BLE SUPREME COURT IN NEMI CHAND KOTHARI ( SUPRA ) OBSERVED THAT IN ORDER TO ESTABLISH THE RECEIPT OF A CASH CR EDIT, THE ASSESSEE MUST SATISFY THREE CONDITIONS I.E. IDENTITY OF THE CREDI TOR, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR. I N THE INSTANT CASE BY VIRTUE OF THE FACT THAT THE TRANSACTION WAS COMPLET ED BY CHEQUE PAYMENTS, THE APPELLANT HAS CONTENDED THAT IT HAD SATISFIED A LL THE THREE TESTS. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 48 13. IN KISHANCHAND CHELLARAM ( SUPRA ) WHEREIN THE SUPREME COURT OBSERVED THAT THE REVENUE AUTHORITIES HAD NOT RECOR DED THE STATEMENT OF THE MANAGER OF THE BANK AND IT WAS DIFFICULT TO APPRECI ATE AS TO WHY IT WAS NOT DONE AND WHY THE MATTER WAS NOT PROBED FURTHER BY T HE REVENUE. 14. THE DELHI HIGH COURT IN ASHWANI GUPTA ( SUPRA )HELD THAT ONCE THERE IS A VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE IN ASMUCH AS WHEN ITS SEIZED MATERIAL WAS NOT PROVIDED TO AN ASSESSEE NOR WAS HE PERMITTED TO CROSS EXAMINE A PERSON ON WHOSE STATEMENT THE ASSESSING O FFICER RELIED, IT WOULD AMOUNT TO DEFICIENCY, AMOUNTING TO A DENIAL O F OPPORTUNITY AND THEREFORE VIOLATION OF PRINCIPLES OF NATURAL JUSTIC E. IN THAT CASE CIT (A) HAD DELETED ADDITION MADE BY THE ASSESSING OFFICER NEIT HER SINCE THE ASSESSING OFFICER HAD FAILED TO PROVIDE COPIES OF SEIZED MATE RIAL TO THE ASSESSEE NOR HAD HE ALLOWED THE ASSESSEE TO CROSS-EXAMINE THE PA RTY CONCERNED. THE DIVISION BENCH HELD THAT ONCE THERE IS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE INASMUCH AS SEIZED MATERIAL WAS NOT PROVIDE D TO THE ASSESSEE NOR WAS GIVEN OPPORTUNITY OF CROSS EXAMINING THE PERSON WHOSE STATEMENT WAS BEING USED AGAINST THE ASSESSEE THE ORDER COULD NOT BE SUSTAINED. 15. IN ANDAMAN TIMBER INDUSTRIES ( SUPRA ) THE SUPREME COURT FOUND THAT THE ADJUDICATING AUTHORITY HAD NOT GRANTED AN OPPOR TUNITY TO THE ASSESSEE TO CROSS EXAMINE THE WITNESSES AND THE TRIBUNAL MER ELY OBSERVED THAT THE CROSS EXAMINATION OF THE DEALERS IN THAT CASE, COUL D NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT OTHERWISE BE IN POSSES SION OF THE APPELLANT- ASSESSEE. THE SUPREME COURT SET ASIDE THE IMPUGNED ORDER AND OBSERVED THAT IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO P RESUPPOSE AS TO WHAT COULD BE THE SUBJECT MATTER OF THE CROSS EXAMINATIO N AND MAKE THE REMARKS SUCH AS WAS DONE IN THAT CASE. 16. IN THE INSTANT CASE ALTHOUGH THE APPELLANT ASSESSE E HAS CALLED UPON US TO DRAW AN INFERENCE THAT THE BURDEN SHIFTED TO THE REVENUE IN THE PRESENT CASE ONCE IT WAS ESTABLISHED THAT THE PAYMENTS WERE MADE AND REPAID BY CHEQUE WE NEED NOT HASTEN AND ADOPT THAT VIEW AFTER HAVING GIVEN OUR THOUGHT TO VARIOUS ISSUES RAISED AND THE DECISIONS CITED BY MR.TRALSHAWALLA AND FINDING THAT ON A VERY FUNDAMEN TAL ASPECT, THE REVENUE WAS NOT JUSTIFIED IN MAKING ADDITION AT THE TIME OF REASSESSMENT WITHOUT HAVING FIRST GIVEN THE ASSESSEE AN OPPORTUN ITY TO CROSS EXAMINE THE DEPONENT ON THE STATEMENTS RELIED UPON BY THE ACIT. QUITE APART FROM DENIAL OF AN OPPORTUNITY OF CROSS EXAMINATION, THE REVENUE DID NOT EVEN PROVIDE THE MATERIAL ON THE BASIS OF WHICH THE DEPA RTMENT SOUGHT TO CONCLUDE THAT THE LOAN WAS A BOGUS TRANSACTION. 17. IN OUR VIEW IN THE LIGHT OF THE FACT THAT THE MONI ES WERE ADVANCED APPARENTLY BY THE ACCOUNT PAYEE CHEQUE AND WAS REPA ID VIDE ACCOUNT PAYEE CHEQUE THE LEAST THAT THE REVENUE SHOULD HAVE DONE WAS TO GRANT AN OPPORTUNITY TO THE ASSESSEE TO MEET THE CASE AGAINS T HIM BY PROVIDING THE MATERIAL SOUGHT TO BE USED AGAINST ASSESSEE IN ARRI VING BEFORE PASSING THE ORDER OF REASSESSMENT. THIS NOT HAVING BEEN DONE, T HE DENIAL OF SUCH OPPORTUNITY GOES TO ROOT OF THE MATTER AND STRIKES AT THE VERY FOUNDATION OF ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 49 THE REASSESSMENT AND THEREFORE RENDERS THE ORDERS P ASSED BY THE CIT (A) AND THE TRIBUNAL VULNERABLE. IN OUR VIEW THE ASSESS EE WAS BOUND TO BE PROVIDED WITH THE MATERIAL USED AGAINST HIM APART F ROM BEING PERMITTING HIM TO CROSS EXAMINE THE DEPONENTS. DESPITE THE REQ UEST DATED 15TH FEBRUARY, 1996 SEEKING AN OPPORTUNITY TO CROSS EXAM INE THE DEPONENT AND FURNISH THE ASSESSEE WITH COPIES OF STATEMENT AND D ISCLOSE MATERIAL, THESE WERE DENIED TO HIM. IN THIS VIEW OF THE MATTER WE A RE INCLINED TO ALLOW THE APPEAL ON THIS VERY ISSUE. THUS THE DENIAL OF OPPORTUNITY TO CROSS EXAMINE WAS CONSIDERED BY THE HONBLE HIGH COURT WHICH GOES TO THE ROOT OF THE MA TTER AND STRIKES AT THE VERY FOUNDATION OF THE ASSESSMENT AND, THEREFOR E, RENDERS THE ASSESSMENT ORDER PASSED BY THE AO NOT SUSTAINABLE. THE LD. A/R HAS SUBMITTED THAT COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT VS. SHRI PRATEEK KOTHARI VIDE ORDER DATED 16 TH DECEMBER, 2012 IN ITA NO. 159/JP/2016 HAS CONSIDERED THIS ISSUE IN PARA 2.8 T O 2.11 AS UNDER :- 2.8 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE TRANSACTION UNDER QUESTION RELATES TO UNSECURED LOANS TAKEN BY THE ASSESSEE AMOUNTING TO RS 1 CRORES FROM M/S MEHUL GEMS PVT LTD DURING THE IMPUGNED ASS ESSMENT YEAR AND NOT ACCEPTING THE SAID LOAN TRANSACTION AS A GENUINE TRANSACTION BY THE ASSESSING OFFICER AND THE RESULT ANT ADDITION MADE UNDER SECTION 68 OF THE ACT. UNDISPUTEDLY, THE PRIMARY ONUS TO ESTABLISH GENUINENESS OF THE LOAN TRANSACTI ON IS ON THE ASSESSEE. IN THE INSTANT CASE, THE ASSESSEE HAS PRO VIDED THE NECESSARY EXPLANATION, FURNISHED DOCUMENTARY EVIDEN CE IN TERMS OF TAX FILINGS, AFFIDAVITS AND CONFIRMATION O F THE DIRECTORS, BANK STATEMENTS OF THE LENDER, BALANCE SHEET OF THE LENDER COMPANY, AND AN INDEPENDENT CONFIRMATION HAS ALSO B EEN OBTAINED BY THE ASSESSING OFFICER TO SATISFY THE CA RDINAL TEST OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE L OAN TRANSACTION. HOWEVER, THE ASSESSING OFFICER HAS NOT GIVEN ANY FINDING IN RESPECT OF SUCH EXPLANATION, DOCUMENTARY EVIDENCE AS WELL AS INDEPENDENT CONFIRMATION. APPARENTLY, THE R EASON FOR NOT ACCEPTING THE SAME IS THAT THE ASSESSING OFFICE R WAS IN RECEIPT OF CERTAIN INFORMATION FROM THE INVESTIGATI ON WING OF THE TAX DEPARTMENT AS PER WHICH THE TRANSACTION UNDER CONSIDERATION IS A BOGUS LOAN TRANSACTION. THE SAID INFORMATION RECEIVED FROM THE INVESTIGATION WING THUS OVERWEIGH ED THE MIND OF THE ASSESSING OFFICER. THE ASSESSING OFFICER STA TED THAT THE PRIMARY ONUS IS ON THE ASSESSEE TO ESTABLISH THE GE NUINENESS OF THE TRANSACTION CLAIMED BY IT AND IF THE INVESTIGAT ION DONE BY THE DEPARTMENT LEADS TO DOUBT REGARDING THE GENUINENESS OF THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 50 TRANSACTIONS, IT IS INCUMBENT ON THE ASSESSEE TO PR ODUCE THE PARTIES ALONGWITH NECESSARY DOCUMENTS TO ESTABLISH THE GENUINENESS OF THE TRANSACTION. IN RESPONSE, THE AS SESSEE SUBMITTED THAT SHRI BHANWARLAL JAIN IS NOT KNOWN TO HIM AND REGARDING VARIOUS INCRIMINATING DOCUMENTARY EVIDENC ES SEIZED DURING THE COURSE OF SEARCH AND STATEMENTS RECORDED OF SHRI BHANWARLAL JAIN AND OTHER PERSONS, HE SPECIFICALLY REQUESTED THE AO TO PROVIDE COPIES OF SUCH INCRIMINATING DOCU MENTS AND STATEMENT OF ALL VARIOUS PERSONS RECORDED IN THIS R EGARD AND PROVIDE AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXA MINE SUCH PERSONS. HOWEVER, THE AO DIDNT PROVIDE TO THE ASSE SSEE COPIES OF SUCH INCRIMINATING DOCUMENTS AND STATEMENTS OF V ARIOUS PERSONS RECORDED AND ALLOW THE CROSS-EXAMINATION OF ANY OF THESE PERSONS. WHILE DOING SO, THE AO STATED THAT IN HIS STATEMENTS, BHANWARLAL JAIN HAD DESCRIBED THAT THEY ARE INDULGED IN PROVIDING ACCOMMODATION ENTRIES OF BOGU S UNSECURED LOANS AND ADVANCES THROUGH VARIOUS BENAMI CONCERNS (70) OPERATED AND MANAGED BY THEM. THIS AD MISSION AUTOMATICALLY MAKES ALL THE TRANSACTIONS DONE BY TH EM AS MERE PAPER TRANSACTIONS AND IN THESE CIRCUMSTANCES, FURT HER AS PER THE INFORMATION NAME AND ADDRESS OF ASSESSEE AND TH E BENAMI CONCERN THROUGH WHICH ACCOMMODATION ENTRY OF UNSECU RED LOANS WAS PROVIDED IS APPEARING IN THE LIST OF BENE FICIARIES TO WHOM THE SAID GROUP HAS PROVIDED. THIS ADMISSION IS SUFFICIENT TO REJECT THE CONTENTIONS OF THE ASSESSEE. FURTHER , REGARDING CROSS EXAMINATION, THE AO STATED THAT THE RIGHT OF CROSS EXAMINATION IS NOT AN ABSOLUTE RIGHT AND IT DEPENDS UPON THE CIRCUMSTANCES OF EACH CASE AND ALSO ON THE STATUTE CONCERNED. IN THE PRESENT CASE, NO SUCH CIRCUMSTANCES ARE WARR ANTED AS IN THE LIST OF BENEFICIARIES TO WHOM ACCOMMODATION ENT RIES WERE PROVIDED BY THE SAID GROUP CATEGORICALLY CONTAINS T HE NAME AND ADDRESS OF THE ASSESSEE. FURTHER THE GROUP HAS CATE GORICALLY ADMITTED TO PROVIDING OF ACCOMMODATION ENTRIES OF U NSECURED LOANS THROUGH VARIOUS BENAMI CONCERNS. THE AO FURT HER RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE C ASE OF C. VASANTLAL & CO. VS. CIT 45 ITR 206(SC) AND HONBLE RAJASTHAN HIGH COURT IN CASE OF RAMESHWARLAL MALI V S. CIT 256 ITR 536(RAJ.) AMONG OTHERS. IN THIS REGARD, IT WAS SUBMITTED BY THE ASSESSEE THAT IF THE ENTRIES AND M ATERIAL ARE GATHERED BEHIND THE BACK OF THE ASSESSEE AND IF THE AO PROPOSES TO ACT ON SUCH MATERIAL AS HE MIGHT HAVE GATHERED A S A RESULT OF HIS PRIVATE ENQUIRIES, HE MUST DISCLOSE ALL SUCH MA TERIAL TO THE ASSESSEE AND ALSO ALLOW THE CROSS EXAMINATION AND I F THIS IS NOT DONE, THE PRINCIPLES OF NATURAL JUSTICE STAND VIOLA TED. 2.9 IN LIGHT OF ABOVE DISCUSSIONS, IN OUR VIEW, TH E CRUX OF THE ISSUE AT HAND IS THAT WHETHER THE PRINCIPLE OF NATURAL JU STICE STAND ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 51 VIOLATED IN THE INSTANT CASE. IN OTHER WORDS, WHERE THE AO DOESNT WANT TO ACCEPT THE EXPLANATION OF THE ASSES SEE AND THE DOCUMENTATION FURNISHED REGARDING THE GENUINENESS O F THE LOAN TRANSACTION AND INSTEAD WANTS TO RELY UPON THE INFO RMATION INDEPENDENTLY RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT IN RESPECT OF INVESTIGATION CARRIED OUT AT A THIRD PARTY, CAN THE SAID INFORMATION BE USED AGAINST THE ASSESSEE WITHOUT SHARING SUCH INFORMATION WITH THE ASSESSEE AND ALLOWING AN OPPORTUNITY TO THE ASSESSEE TO EXAMINE SUCH INFORMATION AND EXPLAIN ITS POSITION ESPECIALLY WHE N THE ASSESSEE HAS REQUESTED THE SAME TO THE ASSESSING OF FICER. 2.10 IN THIS REGARD, THE HONBLE SUPREME COURT IN THE CASE OF DHAKESWARI COTTON MILLS LTD. V. CIT (1954) 26 ITR 7 75 (SC) (COPY AT CASE LAW PB 812-818) HAS HELD THAT THE RULE OF LAW ON THIS SUBJECT HAS BEEN FAIRLY AND RIGHTLY STA TED BY THE LAHORE HIGH COURT IN THE CASE OF SETH GURMUKH SINQH WHERE IT WAS STATED THAT WHILE PROCEEDING UNDER SUB-SECTION (3) OF SECTION 23, THE INCOME-TAX OFFICER, THOUGH NOT BOUN D TO RELY ON EVIDENCE PRODUCED BY THE ASSESSEE AS HE CONSIDERS T O BE FALSE, YET IF HE PROPOSES TO MAKE AN ESTIMATE IN DISREGARD OF THAT EVIDENCE, HE SHOULD IN FAIRNESS DISCLOSE TO THE ASS ESSEE THE MATERIAL ON WHICH HE IS GOING TO FIND THAT ESTIMATE ; AND THAT IN CASE HE PROPOSES TO USE AGAINST THE ASSESSEE THE RE SULT OF ANY PRIVATE INQUIRIES MADE BY HIM, HE MUST COMMUNICATE TO THE ASSESSEE THE SUBSTANCE OF THE INFORMATION SO PROPOS ED TO BE UTILIZED TO SUCH AN EXTENT AS TO PUT THE ASSESSEE I N POSSESSION OF FULL PARTICULARS OF THE CASE HE IS EXPECTED TO MEET AND THAT HE SHOULD FURTHER GIVE HIM AMPLE OPPORTUNITY TO MEET I T. IT WAS HELD IN THAT CASE THAT IN THIS CASE WE ARE OF THE OPINION THAT THE TRIBUNAL VIOLATED CERTAIN FUNDAMENTAL RULES OF JUST ICE IN REACHING ITS CONCLUSIONS. FIRSTLY, IT DID NOT DISCL OSE TO THE ASSESSEE WHAT INFORMATION HAD BEEN SUPPLIED TO IT B Y THE DEPARTMENTAL REPRESENTATIVE. NEXT, IT DID NOT GIVE ANY OPPORTUNITY TO THE COMPANY TO REBUT THE MATERIAL FU RNISHED TO IT BY HIM, AND LASTLY, IT DECLINED TO TAKE ALL THE MAT ERIAL THAT THE ASSESSEE WANTED TO PRODUCE IN SUPPORT OF ITS CASE. THE RESULT IS THAT THE ASSESSEE HAD NOT HAD A FAIR HEARING. THE HONBLE SUPREME COURT IN CASE OF C. VASANTLAL & CO. VS. CIT 45 ITR 206 (SC) HAS HELD THAT THE ITO IS NOT B OUND BY ANY TECHNICAL RULES OF THE LAW OF EVIDENCE. IT IS O PEN TO HIM TO COLLECT MATERIAL TO FACILITATE ASSESSMENT EVEN BY P RIVATE ENQUIRY. BUT, IF HE DESIRES TO USE THE MATERIAL SO COLLECTED, THE ASSESSEE MUST BE INFORMED ABOUT THE MATERIAL AND GI VEN ADEQUATE OPPORTUNITY TO EXPLAIN IT. THE STATEMENTS MADE BY PRAVEEN JAIN AND GROUP WERE MATERIAL ON WHICH THE I T ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 52 AUTHORITIES COULD ACT PROVIDED THE MATERIAL WAS DIS CLOSED AND THE ASSESSEE HAD AN OPPORTUNITY TO RENDER THEIR EXP LANATION IN THAT REGARD. THE HONBLE SUPREME COURT IN CASE OF KISHINCHAND CHELLARAM V. CIT (1980) 125 ITR 713 (SC) (COPY AT CASE LAW PB 585-591) HAS HELD THAT WHETHER THERE WAS ANY MATERIAL EVIDENCE TO JUSTIFY THE FINDINGS OF THE TR IBUNAL THAT THE AMOUNT OF RS. 1,07,350 SAID TO HAVE BEEN REMITT ED BY TILOKCHAND FROM MADRAS REPRESENTED THE UNDISCLOSED INCOME OF THE ASSESSEE. THE ONLY EVIDENCE ON WHICH THE TRI BUNAL COULD RELY FOR THE PURPOSE OF ARRIVING AT THIS FIND ING WAS THE LETTER, DATED 18-2-1955 SAID TO HAVE BEEN ADDRESSED BY THE MANAGER OF THE BANK TO THE ITO. NOW IT IS DIFFICULT TO SEE HOW THIS LETTER COULD AT ALL BE RELIED UPON BY THE TRIB UNAL AS A MATERIAL PIECE OF EVIDENCE SUPPORTIVE OF ITS FINDIN G. IN THE FIRST PLACE, THIS LETTER WAS NOT DISCLOSED TO THE ASSESSE E BY THE ITO AND EVEN THOUGH THE AAC REPRODUCED AN EXTRACT FROM IT IN HIS ORDER, HE DID NOT CARE TO PRODUCE IT BEFORE THE ASS ESSEE OR GIVE A COPY OF IT TO THE ASSESSEE. THE SAME POSITION OBT AINED ALSO BEFORE THE TRIBUNAL AND THE HIGH COURT AND IT WAS O NLY WHEN A SUPPLEMENTAL STATEMENT OF THE CASE WAS CALLED FOR BY THIS COURT BY ITS ORDER, DATED 16-8-1979 THAT, ACCORDING TO THE ITO, THIS LETTER WAS TRACED BY HIM AND EVEN THEN IT WAS NOT SHOWN BY HIM TO THE ASSESSEE BUT IT WAS FORWARDED T O THE TRIBUNAL AND IT WAS FOR THE FIRST TIME AT THE HEARI NG BEFORE THE TRIBUNAL IN REGARD TO THE PREPARATION OF THE SUPPLE MENTAL STATEMENT OF THE CASE THAT THIS LETTER WAS SHOWN TO THE ASSESSEE. IT WILL, THEREFORE, BE SEEN THAT, EVEN IF WE ASSUME THAT THIS LETTER WAS IN FACT ADDRESSED BY THE MANAG ER OF THE BANK TO THE ITO, NO RELIANCE COULD BE PLACED UPON I T, SINCE IT WAS NOT SHOWN TO THE ASSESSEE UNTIL AT THE STAGE OF PREPARATION OF THE SUPPLEMENTAL STATEMENT OF THE CASE AND NO OP PORTUNITY TO CROSS EXAMINE THE MANAGER OF THE BANK COULD IN T HE CIRCUMSTANCES BE SOUGHT OR AVAILED OF BY THE ASSESS EE. IT IS TRUE THAT THE PROCEEDINGS UNDER THE INCOME-TAX LAW ARE NOT GOVERNED BY THE STRICT RULES OF EVIDENCE AND, THERE FORE, IT MIGHT BE SAID THAT EVEN WITHOUT CALLING THE MANAGER OF THE BANK IN EVIDENCE TO PROVE THIS LETTER, IT COULD BE TAKEN INTO ACCOUNT AS EVIDENCE. BUT BEFORE THE INCOME-TAX AUTH ORITIES COULD RELY UPON IT, THEY WERE BOUND TO PRODUCE IT B EFORE THE ASSESSEE SO THAT THE ASSESSEE COULD CONTROVERT THE STATEMENTS CONTAINED IN IT BY ASKING FOR AN OPPORTUNITY TO CRO SS EXAMINE THE MANAGER OF THE BANK WITH REFERENCE TO THE STATE MENTS MADE BY HIM. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 53 2.11 IN LIGHT OF ABOVE PROPOSITION IN LAW AND ESPE CIALLY TAKING INTO CONSIDERATION THE DECISION OF THE HONBLE SUPREME C OURT IN CASE OF C. VASANTLAL & CO. (SUPRA) RELIED UPON BY T HE REVENUE AND WHICH ACTUALLY SUPPORTS THE CASE OF THE ASSESSE E, IN THE INSTANT CASE, THE ASSESSMENT WAS COMPLETED BY THE A O RELYING SOLELY ON THE INFORMATION RECEIVED FROM THE INVESTI GATION WING, STATEMENT RECORDED U/S 132(4) OF SHRI BHANWARLAL JA IN AND OTHERS, AND VARIOUS INCRIMINATING DOCUMENTARY EVIDE NCE FOUND FROM THE SEARCH AND SEIZURE CARRIED OUT BY INVESTIG ATION WING, MUMBAI ON THE SHRI BHANWARLAL JAIN GROUP ON 03.10.2 013. IT REMAINS UNDISPUTED THAT THE ASSESSEE WAS NEVER PROV IDED COPIES OF SUCH INCRIMINATING DOCUMENTS AND STATEMENTS OF S HRI BHANWARLAL JAIN AND VARIOUS PERSONS AND AN OPPORTUN ITY TO CROSS EXAMINE SUCH PERSONS THOUGH HE SPECIFICALLY A SKED FOR SUCH DOCUMENTS AND CROSS EXAMINATION. ON THE OTHER HAND, THE BURDEN WAS SOUGHT TO BE SHIFTED ON THE ITA NO. 159/ JP/16 THE ACIT, CENTRAL -2, JAIPUR VS. M/S PRATEEK KOTHARI, J AIPUR 21 ASSESSEE BY THE A.O. IT IS CLEAR CASE WHERE THE PRI NCIPLE OF NATURAL JUSTICE STAND VIOLATED AND THE ADDITIONS MA DE UNDER SECTION 68 THEREFORE ARE UNSUSTAINABLE IN THE EYE O F LAW AND WE HEREBY DELETE THE SAME. THE ORDER OF THE LD CIT(A) IS ACCORDINGLY CONFIRMED AND THE GROUND OF THE REVENUE IS DISMISSED. THUS WHEN THE ASSESSEE HAS SPECIFICALLY ASKED FOR C ROSS EXAMINATION OF THE WITNESSES WHOSE STATEMENTS WERE RELIED UPON BY THE AO, THEN THE DENIAL OF THE OPPORTUNITY TO CROSS EXAMINE WOULD CE RTAINLY IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY REND ERS THE ASSESSMENT ORDER BASED ON SUCH STATEMENT AS NOT SUSTAINABLE IN LAW. HENCE IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHERE TH E ASSESSEE HAS REPEATEDLY REQUESTED AND DEMANDED THE CROSS EXAMINA TION OF THE WITNESSES WHOSE STATEMENTS WERE RELIED UPON BY THE AO IN THE ASSESSMENT ORDER AND FURTHER THE REPORT OF THE DDIT INVESTIGATION KOLKATA IS ALSO BASED ON THE STATEMENT OF SUCH PERSON THEN THE DENIAL OF CROSS EXAMINATION BY THE AO AS WELL AS LD. CIT (A) DESPIT E THE FACT THAT THE ASSESSEE WAS READY TO BEAR THE COST OF THE CROSS EX AMINATION OF THE WITNESSES IS A GROSS VIOLATION OF PRINCIPLES OF NAT URAL JUSTICE. THUS THE ADDITIONS MADE BY THE AO ON THE BASIS OF SUCH STATE MENT WITHOUT ANY TANGIBLE MATERIAL IS NOT SUSTAINABLE IN LAW AND LIA BLE TO BE DELETED. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 54 ACCORDINGLY THE ADDITION MADE BY THE AO IS ALSO DEL ETED ON MERITS APART FROM THE LEGAL ISSUE DECIDED IN FAVOUR OF THE ASSES SEE. THE FACTS AND CIRCUMSTANCES IN BOTH THE CASES ARE ID ENTICAL AND THEREFORE, FOLLOWING THE EARLIER ORDER OF THIS TRIBUNAL IN CASE OF KOTA DALL MILL, WE HOLD THAT THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE INFORMATION/REPORT OF THE DDIT (INVESTIGATION), KOLK ATA AS WELL AS THE STATEMENTS OF SHRI ANAND SHARMA AND SHRI ANKIT BAGR I WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATION IS NOT SUSTAINABLE AS THE ADDITION IS SOLELY BASED ON THE STATEMENT AND INFORMATION WHICH IS NOTH ING BUT SUMMARY OF STATEMENTS RECORDED BY THE DDIT(INV), KOLKATA. HENC E, THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. GROUND NO. 2 O F THE APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. 15. GROUNDS NO. 3 TO 5 OF THE APPEAL ARE REGARDING THE MERITS OF THE ADDITION MADE BY THE ASSESSING OFFICER, PART OF WHI CH WAS SUSTAINED BY THE LD. CIT(A). THE ASSESSEE HAS SHOWN UNSECURED LOANS FR OM TWO PARTIES NAMELY M/S JALSAGAR COMMERCE PVT. LTD. OF RS. 25,71 ,25,000/- AND M/S TEAC CONSULTANTS PVT. LTD. OF RS, 2,02,50,000/- TOTA L AMOUNTING TO RS. 27,73,75,000/-. THE ASSESSING OFFICER MADE THE ADDI TION OF THE ENTIRE LOAN AMOUNT OF RS. 27,73,75,000/- BY TREATING THE SAME A S ACCOMMODATION ENTRIES RECEIVED BY THE ASSESSEE AND CONSEQUENTLY U NEXPLAINED CASH CREDITS U/S 68 OF THE ACT. THE ASSESSEE CHALLENGED T HE ACTION OF THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 55 ASSESSING OFFICER BEFORE THE LD. CIT(A). THE LD. CIT( A) CONFIRMED THE ADDITION IN RESPECT OF M/S JALSAGAR COMMERCE PVT. L TD. BUT DELETED THE ADDITION IN RESPECT OF M/S TEAC CONSULTANTS PVT. LTD . ON THE GROUND THAT THE ASSESSING OFFICER WAS NOT HAVING ANY MATERIAL OR EVEN STATEMENT OF THE ALLEGED ENTER OPERATOR IN RESPECT OF M/S TEAC CO NSULTANTS PVT. LTD.. 16. BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMIT TED THAT THE ASSESSING OFFICER HAS RELIED UPON THE STATEMENT OF SHRI ANAND SHARMA FOR MAKING THE ADDITION OF THESE LOANS, HOWEVER, SHRI AN AND SHARMA HAS NOT STATED THAT HE EITHER CONTROLLED M/S JALSAGAR COMME RCE PVT. LTD. OR HAS GIVEN ANY ACCOMMODATION ENTRY TO THE ASSESSEE. THE S TATEMENT OF SHRI ANAND SHARMA NOWHERE DISCLOSED ANY ACCOMMODATION ENT RY IN RESPECT OF THE LOAN TAKEN BY THE ASSESSEE FROM M/S JALSAGAR CO MMERCE PVT. LTD.. AS REGARDS M/S TEAC CONSULTANTS PVT. LTD., IT IS ALSO N OT THE CASE OF THE ASSESSEE THAT THE SAID COMPANY WAS OWNED OR CONTROLL ED BY SHRI ANAND SHARMA, THEREFORE, IN ABSENCE OF ANY MATERIAL IN TH E POSSESSION OF THE ASSESSING OFFICER, THE ADDITION MADE BY THE ASSESSI NG OFFICER IS NOT SUSTAINABLE. HE HAS REFERRED TO THE SHOW CAUSE NOTIC E ISSUED BY THE ASSESSING OFFICER WHEREIN THE LIST OF ENTRY OPERATOR S IS GIVEN BUT THE NAME OF M/S JALSAGAR COMMERCE PVT. LTD. IS NOT MENTIONED IN THE SAID LIST, THEREFORE, WHEN THE ASSESSING OFFICER HIMSELF HAS NO T GIVEN THE NAME OF M/S JALSAGAR COMMERCE PVT. LTD. AS A COMPANY/ENTITY OWNED BY SHRI ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 56 ANAND SHARMA THEN THE ADDITION SUSTAINED BY THE LD. CIT(A) IS NOT JUSTIFIED. THE LD AR HAS THEN REFERRED TO THE FOUR R EPORTS OF THE INVESTIGATION WING, KOLKATA DATED 30/3/2016 AND 24/ 3/2017 AND SO ON BUT NONE OF THE REPORT OF THE INVESTIGATION WING SHOWS THAT THE TRANSACTION OF LOAN FROM M/S JALSAGAR COMMERCE PVT. LTD.. IS PART OF ANY ACCOMMODATION ENTRY. ALL THE DETAILS GIVEN IN THE REPORTS HAVE NO WHERE ALLEGED THE NAME OF M/S JALSAGAR COMMERCE PVT. LTD. EVEN OTHERWISE WH EN M/S JALSAGAR COMMERCE PVT. LTD. IS NEITHER OWNED OR CONTROLLED BY SHRI ANAND SHARMA THEN THE TRANSACTION OF LOAN TAKEN FROM M/S JALSAGA R COMMERCE PVT. LTD.. TREATED AS BOGUS ACCOMMODATION ENTRY IS DEVOID OF A NY SUBSTANCE. THE LD AR HAS POINTED OUT THAT THE ASSESSEE HAS ALREADY RE PAID THE AMOUNT ON 01/09/2015. THE INTEREST ON THE SAID LOAN WAS ALSO PA ID AFTER TDS AND THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF INTEREST EXPENDITURE ON THESE LOANS WITHOUT ANY QUESTION. HE HAS ALSO REFERRED THE VARIOUS DOCUMENTS PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFIC ER IN SUPPORT OF THE CLAIM WHICH INCLUDES THE AVAILABILITY OF THE FUNDS I N THE SHAPE OF SHARE CAPITAL, RESERVE AND SURPLUS WITH THE LOAN CREDITOR. THE ASSESSMENT ORDERS FRAMED U/S 143(3) OF THE ACT FOR THE A.Y. 2005-06 A ND 2011-12 TO 2014-15 WHEREIN THE ASSESSING OFFICER HAS ACCEPTED THE TRANS ACTIONS WITHOUT ANY QUESTION. THE LD AR HAS FURTHER POINTED OUT THAT THE LOAN CREDITORS HAVE ISSUED SHARE CAPITAL DURING ALL THESE YEARS AND THE REFORE, THERE WAS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 57 SUFFICIENT FUNDS AVAILABLE WITH THE LOAN CREDITOR. TH E ASSESSING OFFICER HAS NOT POINTED OUT ANY DISCREPANCY IN THE BOOKS OF ACC OUNT OR IN THE BANK STATEMENT TO INDICATE THAT THE ASSESSEES OWN UNACCO UNTED MONEY HAS ROUTED BACK IN THE GARB OF UNSECURED LOANS. ONCE TH E ASSESSEE HAS ALREADY REPAID THE ENTIRE LOAN AND SUPPORTED THE CLAIM WITH DOCUMENTARY EVIDENCE THEN IN ABSENCE OF ANY CONTRARY MATERIAL, THE ADDIT ION MADE BY THE ASSESSING OFFICER MERELY ON THE BASIS OF STATEMENT AND REPORT OF INVESTIGATION WING, KOLKATA IS NOT SUSTAINABLE. HE HAS POINTED OUT THAT THE ASSESSING OFFICER HAD ALREADY PASSED THE ASSESSMENT ORDER U/S 143(3) OF THE ACT FOR THE A.Y. 2010-11 TO 2012-13 AND ACCEPTE D THESE TRANSACTIONS AS GENUINE, THEREFORE, IN THE PROCEEDINGS U/S 153A, THE SAME CANNOT BE TREATED AS UNEXPLAINED CASH CREDIT IN ABSENCE OF AN Y MATERIAL OR EVIDENCE TO JUSTIFY THE REVIEW OF HIS OWN DECISION. THE ASSESSE E HAS DULY DISCHARGED ITS BURDEN CAST U/S 68 OF THE ACT BY PROVING THE ID ENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. ALL THE LOAN CR EDITORS COMPLIED WITH THE NOTICES/SUMMONS ISSUED BY THE ASSESSING OFFICER /DEPARTMENT AND ALSO REPLIED TO THE QUERIES RAISED BY THE DEPARTMENT. TH E EXISTENCE OF THESE COMPANIES WAS ESTABLISHED WHEN THEY HAVE RESPONDED TO THE NOTICES ISSUED BY THE DEPARTMENT. EVEN OTHERWISE ONCE ALL TH E CREDITORS WERE SUBJECTED TO SCRUTINY ASSESSMENT THEN THE IDENTITY AND CREDITWORTHINESS OF THEM CANNOT BE DISPUTED. THE LD AR HAS REFERRED TO T HE ROC RECORD KEPT IN ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 58 MASTER DATA AND SUBMITTED THAT THE COMPANY STATUS I S SHOWN AS ACTIVE AND THEREFORE IT CANNOT BE TREATED AS A SHELL COMPANY. THE ASSESSEE PRODUCED ALL THE DOCUMENTS PERTAINING TO THE CREDITORS WHICH INCLUDES ITR, COPIES OF BALANCE SHEET AND ANNEXURE OF LOAN AND ADVANCES, CO PY OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO THE ASSESSEE, C ONFIRMATION OF THE LOAN GIVEN TO THE ASSESSEE FROM THE BOOKS OF ACCOUN T OF THE PARTIES, CONFIRMATION OF THE LOAN ACCOUNT IN THE BOOKS OF AC COUNT OF THE CREDITOR, AFFIDAVIT OF THE DIRECTOR OF THE COMPANY, BALANCE S HEET AS ON 31/3/2010 TO 31/3/2016, ASSESSMENT ORDERS PASSED U/S 143(3) ETC. . ALL THE LOANS WERE RECEIVED TROUGH BANK ACCOUNT AND VERIFIABLE FROM TH E BANK STATEMENT OF THE ASSESSEE AS WELL AS LOAN CREDITORS. THE ONUS U/S 68 OF THE ACT IS TO PROVE THE IDENTITY, CAPACITY AND GENUINENESS OF THE TRANSACTION WHICH HAS BEEN DISCHARGED BY THE ASSESSEE BY PRODUCING THE DO CUMENTARY EVIDENCE AS WELL AS THE RESPONSE OF THE LOAN CREDITORS TO THE NOTICES ISSUED BY THE ASSESSING OFFICER. THE TRANSACTIONS OF LOAN WERE ACC EPTED BY THE ASSESSING OFFICER WHILE THE ASSESSMENT FRAMED U/S 143(3) OF TH E ACT IN THE HAND OF THE LOAN CREDITORS. IN SUPPORT OF HIS CONTENTION, H E HAS RELIED UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF ARAVALI TRADING CO. VS. ITO (2008) 8 DTR 199 (RAJ) AND SUBMITTED THAT THE HON'BLE HIGH COURT HAS HELD THAT ONCE THE EXISTENCE OF THE CREDI TOR IS PROVED AND SUCH PERSONS OWN THE CREDITS, THE ASSESSEES ONUS STANDS DISCHARGED AND THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 59 ASSESSEE IS NOT REQUIRED TO PROVE THE SOURCE FROM WH ICH THE CREDITOR COULD HAVE ACQUIRED THE MONEY DEPOSITED WITH HIM. EVEN OTH ERWISE WHEN THE LOAN CREDITORS WERE SUBJECTED TO SCRUTINY ASSESSMEN T U/S 143(3) OF THE ACT WHEREIN THE TRANSACTION OF LOAN WERE ACCEPTED BY THE ASSESSING OFFICER THEN THE CREDITWORTHINESS OF THE LOAN CREDIT ORS WERE ALSO ACCEPTED. THE ASSESSEE PRODUCED THE FINANCIAL STATEMENTS OF TH E LOAN CREDITORS TO PROVE THE AVAILABILITY OF FUNDS BEING SHARE CAPITAL AND RESERVE AND SURPLUS WHICH ARE MUCH MORE THAN THE LOAN GIVEN TO THE ASSES SEE. THE ASSESSING OFFICER HAS NOT FOUND ANY DISCREPANCY IN THE ACCOUN TS OF LOAN CREDITOR AND PARTICULARLY THE BANK STATEMENT OF LOAN CREDITOR. TH EREFORE, TREATING THE TRANSACTION AS BOGUS AND IN THE NATURE OF ENTRY PRO VIDED AGAINST THE CASH IS NOT SUSTAINABLE IN LAW. THE ASSESSEE HAS PAID INTE REST AFTER DEDUCTION OF TDS AND THE INTEREST EXPENDITURE IS ALLOWED BY THE AS SESSING OFFICER AS GENUINE CLAIM IN THE ASSESSMENTS FRAMED U/S 143(3) AS WELL AS IN THE ASSESSMENTS FRAMED U/S 153A OF THE ACT. THEREFORE, T HE FINDING OF THE ASSESSING OFFICER TREATING THE LOAN AS ACCOMMODATIO N ENTRY IS WITHOUT ANY BASIS, MATERIAL EVIDENCE BUT THE SAME IS BASED PURE LY ON SURMISES, CONJECTURES AND IRRELEVANT MATERIAL. NO POSITIVE MA TERIAL WAS BROUGHT ON RECORD BY THE A.O TO SHOW THAT THE LOAN CREDITOR COM PANY IS A SHELL COMPANY WHEREAS THE ASSESSEE PRODUCED ALL THE RELEVA NT DOCUMENTS TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINE NESS OF THE TRANSACTION ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 60 AS WELL AS LOAN CREDITORS. HE HAS ALSO SUBMITTED THA T AN IDENTICAL ISSUE HAS ALSO BEEN CONSIDERED BY THIS TRIBUNAL IN THE CASE OF KOTA DALL MILL (SUPRA). 17. ON THE OTHER HAND, THE LD. CIT D/R HAS SUBMITTED THAT THE ASSESSING OFFICER HAS RECEIVED THE INFORMATION FROM INVESTIGA TION DIRECTORATE, KOLKATA REGARDING INVOLVEMENT OF THE ASSESSEE GROUP IN OBTAINING ENTRIES OF BOGUS UNSECURED LOANS, SHARE CAPITAL, SPECIAL DE POSITS ETC. DETECTED IN THE INVESTIGATION CARRIED OUT BY THE DIT KOLKATA. SUCH INFORMATION WAS RECEIVED EVEN PRIOR TO INITIATION OF PROCEEDINGS UN DER SECTION 153A AND ALSO DURING THE PENDENCY OF PROCEEDINGS UNDER SECTI ON 153A. ONCE THE ASSESSING OFFICER HAS CONFRONTED THE ASSESSEE WITH T HE REPORT OF THE INVESTIGATION WING, KOLKATA AS WELL AS THE STATEMENT OF SHRI ANAND SHARMA AND OTHER PERSONS WHO HAVE ADMITTED TO HAVE PROVIDED ACCOMMODATION ENTRIES OF BOGUS UNSECURED LOANS, SHARE CAPITAL, SP ECIAL DEPOSITS ETC. TO THE VARIOUS PARTIES THROUGH THEIR COMPANIES AND CONCERN S AND ASSESSEE HAS SHOWN THE UNSECURED LOANS AS WELL AS DEPOSITS FROM TH OSE CONCERNS, THEN ONUS WAS SHIFTED ON THE ASSESSEE TO ESTABLISH THE GE NUINENESS OF THE TRANSACTIONS OF UNSECURED LOANS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER AGAIN CONDUCTED ENQUIRIES THROUGH INVESTIGATION WING KOLKATA REGARDING THE GENUINENES S OF THE TRANSACTION AND THE ASSESSEE WAS DULY CONFRONTED WITH THE RESULTS OF ALL THESE ENQUIRIES AND INFORMATION SHARED BY THE INVESTIGATI ON WING, KOLKATA. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 61 IN THESE CIRCUMSTANCES AND IN THE INTEREST OF NATUR AL JUSTICE, THE ASSESSEE WAS REQUIRED TO PRODUCE THE ALLEGED CREDITORS FOR EX AMINATION SO THAT GENUINENESS OF CASH CREDIT COULD BE VERIFIED BY THE ASSESSING OFFICER. DESPITE PROVIDING SEVERAL OPPORTUNITIES, THE ASSESS EE MISERABLY FAILED TO PRODUCE ANY CREDITOR. THE ASSESSEE NEVER EXPRESSED I TS INABILITY TO PRODUCE THE ALLEGED CREDITOR NOR THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO ISSUE SUMMON TO THE ALLEGED CREDITOR FOR VERIFICATI ON OF THE GENUINENESS OF THE CASH CREDIT IN THE FORM OF UNSECURED LOAN. IT I S EVIDENT THAT THE ASSESSEE NEVER INTENDED TO PRODUCE THE ALLEGED CRED ITOR. THE LD. CIT-D/R HAS FURTHER SUBMITTED THAT THE PRESENT CASE IS NOT ONE WHERE ASSESSEE OBTAINED SMALL LOANS OR INSIGNIFICANT SHARE CAPITAL SO THAT THE ASSESSEE COULD TAKE THE PLEA THAT IT IS NOT IN A POSITION TO ENSURE PRESENCE OF ALLEGED CREDITORS. THE SIZE OF THE TRANSACTIONS WHICH ARE TA INTED UNSECURED LOANS CONSTITUTE THE MAJOR PORTION OF ENTIRE CAPITAL OF T HE ASSESSEE AND OTHER GROUP COMPANIES. EVEN THE ASSESSEE DID NOT PRODUCE THE PARTNERS WHO INTRODUCED THE CAPITAL FOR EXAMINATION. THUS THE AS SESSEE HAS FAILED TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THE CRED ITOR AND GENUINENESS OF THE TRANSACTION. THE ADDITION IS NOT MADE MERELY ON THE BASIS OF REPORT OF THE INVESTIGATION WING KOLKATA BUT THE ASSESSING OF FICER CONDUCTED ENQUIRY THROUGH INVESTIGATION WING AND STATEMENTS O F ENTRY OPERATORS WERE ALSO RECORDED, THEREFORE, OVERWHELMING EVIDENCES IN THE POSSESSION ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 62 OF THE ASSESSING OFFICER INDICATE BOGUS NATURE OF T RANSACTION OF LOAN AND UNSECURED LOAN WHICH HAS BEEN EXTENSIVELY DISCUSSED IN THE ASSESSMENT ORDER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE WAS PROVIDED A NUMBER OF OPPORTUNITIES FOR PRODUCING TH E ALLEGED CREDITORS FOR VERIFICATION AND FAILURE OF THE ASSESSEE IN PRODUCI NG THE CREDITORS IN THE LIGHT OF THE EVIDENCES WAS ENOUGH TO INVOKE THE PROV ISIONS OF SECTION 68 OF THE IT ACT. THE LD. D/R HAS FURTHER SUBMITTED THAT T HE REPAYMENT OF LOAN FOR CREDIT ENTRIES ALSO DOES NOT IN ITSELF PROVE TH E TRANSACTIONS TO BE GENUINE. SHELL COMPANIES ARE USED TO PROVIDE ACCOM MODATION ENTRIES AND EVEN REVERSAL OF AN ENTRY DOES NOT IPSO FACTO PROVE THE GENUINENESS OF THE INITIAL CREDIT ENTRY. IN SUPPORT OF HIS CONTENTION , HE HAS RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NAVODAYA CASTLES PVT. LTD., 226 TAXMAN 190 (MAG.) AND SUBMITT ED THAT THE SLP FILED BY THE ASSESSEE WAS DISMISSED BY THE HONBLE SUPREME COURT REPORTED IN 230 TAXMAN 268 (SC). THUS IT IS EVIDENT THAT THE ASS ESSEE HAS FAILED TO DISCHARGE ITS ONUS TO REBUT THE EVIDENCE UNEARTHED BY THE INVESTIGATION WING, KOLKATA WHICH SHOWS THAT THE TRANSACTIONS OF U NSECURED LOANS ARE NOTHING BUT BOGUS ACCOMMODATION ENTRIES WHEREIN THE ASSESSEES OWN UNDISCLOSED INCOME HAS BEEN ROUTED IN THE GARB OF U NSECURED LOAN. AS REGARDS CROSS EXAMINATION OF THE WITNESSES, SINCE TH E WITNESSES BELONG TO KOLKATA AND STATEMENTS WERE ALSO RECORDED AT KOLKATA BY THE INVESTIGATION ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 63 WING, THEREFORE, IT WAS NOT POSSIBLE FOR THE ASSESSI NG OFFICER TO ISSUE SUMMON TO THE WITNESSES FOR CROSS EXAMINATION AT THE OFFICE OF THE ASSESSING OFFICER AT KOTA. THE LD. CIT D/R HAS RELIE D UPON THE ORDER OF THE ASSESSING OFFICER. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER HAS MADE T HE ADDITIONS IN RESPECT OF THE UNSECURED LOAN FROM M/S JALSAGAR COM MERCE PVT. LTD. AS WELL AS M/S TEAC CONSULTANTS PVT. LTD. BY TREATING TH E SAME AS ACCOMMODATION ENTRIES. THE ASSESSING OFFICER FOR THE A.Y. 2010-11 HAS RELIED UPON THE STATEMENT OF SHRI ANAND SHAMA WHICH WAS RECORDED BY THE KOLKATA INVESTIGATION WING AND THEN FORWARDED TO THE ASSESSING OFFICER. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION IN RE SPECT OF M/S TEAC CONSULTANTS PVT. LTD. BY NOTING THE FACT THAT THE A SSESSING OFFICER WAS NOT EVEN HAVING ANY STATEMENT OF ALLEGED ENTRY OPERATOR CONTROLLING M/S TEAC CONSULTANTS PVT. LTD.. THE LD. CIT(A) CONFIRMED THE ADDITION OF UNSECURED LOAN FROM M/S JALSAGAR COMMERCE PVT. LTD. BECAUSE T HE ASSESSING OFFICER WAS HAVING THE STATEMENT OF SHRI ANAND SHARMA AND AC CEPTED THAT M/S JALSAGAR COMMERCE PVT. LTD. IS BENEFICIARY OF ACCOM MODATION ENTRIES. AT THE OUTSET WE NOTE THAT THAT THE IDENTICAL ISSUE OF UNSECURED LOAN TAKEN FROM THE M/S JALSAGAR COMMERCE PVT. LTD. WAS CONSIDE RED BY US IN CASE OF KOTA DALL MILL (SUPRA) IN PARA 11 AS UNDER: ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 64 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. FOR THE ASSESSMENT YEAR 2010-11, THE AS SESSEE HAS CHALLENGED THE ADDITION SUSTAINED BY LD. CIT (A) IN RESPECT OF UNSECURED LOAN FROM M/S. JALSAGAR COMMERCE PVT. LTD. THE OTHER ADDITIO NS MADE BY THE AO ON ACCOUNT OF UNSECURED LOANS AS WELL AS PARTNERS CAP ITAL FOR THE ASSESSMENT YEAR 2010-11 WERE DELETED BY THE LD. CIT (A) ON THE GROUND THAT THE AO WAS NOT HAVING IN HIS POSSESSION EVEN T HE STATEMENT OF THE CONCERNED PERSONS IN SUPPORT OF HIS FINDING THAT TH E ALLEGED LOAN AND PARTNERS CAPITAL IS NOTHING BUT BOGUS ACCOMMODATIO N ENTRIES. THEREFORE, THE REVENUE HAS CHALLENGED THAT PART OF THE ORDER I N THE CROSS APPEAL. THE LD. A/R OF THE ASSESSEE HAS POINTED OUT THAT FO R THE ASSESSMENT YEAR 2010-11 THERE WAS NO LOAN FROM THE COMPANY CONTROLL ED BY SHRI ANAND SHARMA, M/S. ROYAL CRYSTAL DEALERS PVT. LTD. BUT TH E ASSESSEE TOOK THE LOAN FROM M/S. JALSAGAR COMMERCE PVT. LTD. WHICH IS NOT THE COMPANY OWNED OR CONTROLLED BY SHRI ANAND SHARMA. THE LD. CIT (A) HAS SUSTAINED THE ADDITION IN RESPECT OF LOAN FROM M/S. JALSAGAR COMMERCE PVT. LTD. IN PARA 5.1 TO 5.12 AS UNDER :- 5.1 IN THIS RESPECT, I FIND THAT SHRI ANAND SHARMA WHOSE STATEMENT IS REPRODUCED AT PAGE 56 OF THE ASSESSMENT ORDER HAS C LEARLY ACCEPTED THAT M/S JALSAGAR COMMERCE PVT. LTD. IS BENEFICIARY COMP ANY LIKE KOTA DAL MILL AND BOTH OF THESE WERE PROVIDED BOGUS LOANS/AD VANCES BY ROYAL CRYSTAL DEALER PVT. LTD WHICH IS A PAPER COMPANY CO NTROLLED BY HIM. HE FURTHER STATED THAT THE BENEFICIARY PARTY SUCH I.E. M/S JALSAGAR COMMERCE PVT. LTD. GAVE HIM CASH IN LIEU OF WHICH CHEQUES WA S GIVEN BY HIM FOR SOME COMMISSION INCOME. HE ALSO ADMITTED THAT SOME PAPER COMPANIES HAVE SOLD TO BENEFICIARY PARTIES. THOUGH, IN THE IN ITIAL REPORT DATED 28.11.2017, M/S JALSAGAR COMMERCE PVT. LTD. WAS TRE ATED A PARTY IN RAJASTHAN, IN LATER REPORT DATED 06.12.2017 THE ENT RY OPERATOR SHRI ANAND SHARMA WAS LINKED WITH M/S JALSAGAR COMMERCE PVT. L TD. AS PER THE DATA BASE PREPARED BY DIRECTORATE OF INVESTIGATIONKOLKAT A THE RELEVANT PART OF ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 65 THE SAID STATEMENT AS REPRODUCED ON PAGE NO.57 OF T HE ASSESSMENT ORDER IS AS UNDER: - 5.2 HOWEVER, IT IS THE SUBMISSION OF THE APPELLANT THAT NO NOTICE UNDER SECTION 131 OR 133(6) OF THE ACT WAS ISSUED TO THIS COMPANY, EITHER BY THE LD. AO OR BY THE CONCERNED AO OR BY THE DDIT (INV.) KOLKAT A. ALSO, ON BARE PERUSAL OF THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE NAME O F THE SAID COMPANIES DOES NOT APPEAR IN THE STATEMENT OF ANY OF THE ENTRY OPERATO RS AS REPRODUCED BY THE AO IN THE ASSESSMENT ORDER. HOWEVER, THE RELEVANT DOCUMEN TS INCLUDING THE LEDGER A/C ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 66 SHOWING THE TRANSACTIONS WITH APPELLANT COMPANY, SO URCE SHEET OF FUNDS OF TRANSACTIONS MADE WITH THE APPELLANT, COPY OF BANK STATEMENT SHOWING THE TRANSACTIONS, ETC. STAND SUBMITTED FOR CONFIRMATION OF THE TRANSACTION OF LOAN WITH THE APPELLANT. 5.3 IN MY CONSIDERED VIEW, AS THE NAME OF M/S JALSA GAR COMMERCE PVT. LTD. IS CLEARLY MENTIONED AS BENEFICIARY COMPANY IN THE STA TEMENT OF SHRI ANAND SHARMA, AND SHRI ANAND SHARMA IS MENTIONED THAT SOME OF SUC H PAPER COMPANY ARE SOLD TO BENEFICIARY PARTY, IN VIEW OF FACT THAT NAME OF M/S JALSAGAR COMMERCE PVT. LTD. IS MENTIONED IN THE REPORTS AS DISCUSSED IN PA RA 4.4.7 ABOVE, A GENUINE DOUBT IS RAISED ON THE IDENTITY AND GENUINENESS OF COMPAN Y. FURTHER, THE ADVERSE FACTS POINTED OUT IN THE REPORTS AS DISCUSSED IN PARA 4.4 .7 ABOVE FOR ESTABLISHED BACKGROUND OF ALL THESE SHARE HOLDERS / DEPOSITORS BEING THE PUPPET IN THE HAND OF ONE OR OTHER ACCOMMODATION ENTRY PROVIDERS, LAYERIN G THE TRANSACTION BY CHEQUE DEPOSIT ON THE SAME DAY OR PRECEDING DAY OF SHARE A PPLICATION / DEPOSITS, THE ASSERTIONS OF THE AO FOR NO-CREDITWORTHINESS OR IN- ADEQUATE CREDITWORTHINESS OF THE SO-CALLED SHAREHOLDERS / DEPOSITORS HOLDS FIELD S. DURING THE APPELLATE PROCEEDING BEFORE ME, THOUGH PAPER BOOKS FOR RELEVA NT AY AND COMMON PAPER BOOKS HAVE BEEN SUBMITTED, THE SAME DOES NOT ADDUCE ANY EVIDENCE TO REBUT THE ADVERSE FACTUAL FINDING MADE BY THE AO IN THE ASSES SMENT ORDER AS MENTIONED BY ME IN PARA 4.1 ABOVE AND CATEGORICALLY MENTIONED IN THE REPORTS AS DISCUSSED IN PARA 4.4.7 ABOVE. UNDER THESE ADVERSE BACKGROUND OF APPELLANT EMPLOYING MODUS- OPERENDI OF RESORTING ACCOMMODATION ENTRY PROVIDER TO BUILD-UP SHARE CAPITAL / UNSECURED LOANS BY FOUL MEANS, WHAT THE AO IS VEHEMENTLY MAKING TH E CASE FOR IS THE LAW ON THE ISSUE-SECTION 68 OF INCOME-TAX ACT H AS TO BE APPLIED BY EVOLVING PERCEPTIONS FOR THE LAW ON THE ISSUE AND NOT ON THE BASIS OF ROUTINE PERCEPTIONS ON THE LAW ON THE ISSUE THAT IS LOSING THEIR RELEVANCE . 5.4 WITH ALL DUE RESPECT TO AUTHORITIES CITED BY TH E APPELLANT FOR CANVASSING HIS STAND POINT, I AM NOT ABLE TO PERSUADE MY CONSCIENC E TO AGREE WITH APPELLANTS ARGUMENTS. IN MY CONSIDERED OPINION, UNDER THE ADVE RSE BACKGROUND OF APPELLANT EMPLOYING MODUS-OPERENDI OF RESORTING ACCOMMODATION ENTRY PROVIDER TO BUILD- ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 67 UP UNSECURED LOANS AS ESTABLISHED IN THE ASSESSMENT ORDER AS BRIEFLY HIGHLIGHTED IN PARA 4.1 ABOVE, AND ARMED WITH SEVERAL AUTHORITIES ON THE ISSUE CITED BY THE AO, I FULLY AGREE WITH THE VIEW TAKEN BY AO. HOWEVER, TO FORTIFY THE FINDING OF THE AO AND TO HIGHLIGHT THE GUIDING PRINCIPLE ON ADJUDICAT ING NON-GENUINE UNSECURED LOANS RAISED THROUGH ACCOMMODATION ENTRY PROVIERS, I PLACE FURTHER RELIANCE ON FEW MORE CASE LAWS WITH UNDERLINING THE SIMILARITY OF ADVERSE FACTS PREVAILING IN THE PRESENT CASE AS FOLLOWS:- 5.5 IN CASE OF SUMAN GUPTA V/S. INCOME TAX OFFICER ITAT, AGRA BENCH (2012) 138 ITD 0153 HELD AS UNDER:- THE AO DISCUSSED EACH AND EVERY CREDITOR IN THE ASS ESSMENT ORDER AND THE CRUX OF THE FINDINGS OF THE AO HAD BEEN THAT THERE WERE VER Y SMALL BANK BALANCES IN THE BANK ACCOUNTS OF THE CREDITORS AND THEY WERE HAVING MEAGER INCOME AND AS SUCH, THEY WERE NOT MEN OF MEANS TO ADVANCE ANY LOAN TO T HE ASSESSEE. IT IS WELL SETTLED LAW THAT BURDEN IS UPON THE ASSESSEE TO PROVE INGRE DIENTS OF SECTION 68 OF THE ACT BY PROVING IDENTITY AND CREDITWORTHINESS OF THE CRE DITORS AND GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE HAS, HOWEVER, FAILED TO PROVE THE CREDITWORTHINESS OF THE CREDITORS WHO WERE HAVING ONLY MEAGER INCOME. N O DETAILS OF THEIR SAVINGS HAVE BEEN FILED. THE ASSESSEE HAS NEVER SHOWN HIS W ILLINGNESS TO PRODUCE THE REMAINING CREDITORS FOR EXAMINATION BEFORE THE AO. THEREFORE, THE GENUINENESS OF THE TRANSACTION COULD NOT HAVE BEEN EXAMINED BY THE AO. THE SMALLNESS OF THE BANK BALANCE IN THE BANK ACCOUNTS OF THE CREDITORS PRIOR TO ISSUE OF CHEQUES WOULD CLEARLY REVEAL THAT THEY WERE NOT HAVING ANY SOURCE AND IT WAS THE MONEY OF THE ASSESSEE WHICH WAS ROUTED THROUGH THE BANK ACCOUNTS OF THE CREDITORS FOR THE PURPOSE OF GIVING CREDITS TO THE ASSESSEE. THESE WE RE, THEREFORE, ACCOMMODATION ENTRIES ONLY AND AS SUCH, COULD NOT BE CONSIDERED A S GENUINE TRANSACTIONS. MERELY BECAUSE THE LOANS HAVE BEEN RECEIVED THROUGH BANKIN G CHANNEL, IS NOT SACROSANCT TO MAKE A NON-GENUINE TRANSACTION AS GENUINE TRANSA CTION. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LI GHT OF ABOVE DISCUSSION AND DECISION, THERE IS NO JUSTIFICATION TO INTERFERE WI TH THE ORDER OF THE LD. CIT(A). THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS O F ALL THE CREDITORS AND NO ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 68 SOURCE OF THEIR INCOME HAS BEEN FILED. AT THE BEST THE ASSESSEE IS ABLE TO PROVE IDENTITY OF THE CREDITORS, BUT THE ASSESSEE FAILED TO PROVE THE GENUINE CREDIT IN THE MATTER. ALL THE CREDITORS HAVE BEEN RIGHTLY FOUND T O BE MEN OF MEAGER MEANS AND NO SOURCE OF INCOME HAVE BEEN FILED TO PROVE THAT THEY WERE HAVING SUFFICIENT FUNDS OR SAVINGS IN ORDER TO GIVE LOANS TO THE ASSE SSEE. ON VERIFICATION OF THE BANK ACCOUNT OF THE DEPOSITORS, IT WAS SPECIFICALLY FOUN D THAT THERE WERE NO SUFFICIENT FUNDS AVAILABLE IN THEIR BANK ACCOUNT AND THEY WERE HAVING ONLY SMALL BANK BALANCE, WHICH WAS EVEN NOT SUFFICIENT TO MEET OUT THEIR HOUSEHOLD EXPENSES OR DAY-TO-DAY REQUIREMENTS. THEREFORE, IT IS UNBELIEVA BLE TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT SAID PERSONS WERE HAVING CREDITWO RTHINESS TO ADVANCE ANY LOAN TO THE ASSESSEE. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION U/S. 68 OF THE IT ACT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT ADDU CED ANY SUFFICIENT EVIDENCE BEFORE THE AUTHORITIES BELOW TO PROVE THE CREDITWOR THINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER. THER EFORE, THE ASSESSEE HAS NOT SATISFIED THE ESSENTIAL INGREDIENTS OF SECTION 68 O F THE IT ACT. CONCLUSION: MERELY BECAUSE THE LOANS HAVE BEEN RECEIVED THROUGH BANKING CHANNEL, IS NOT SACROSANCT TO MAKE A NON-GENUINE TRANSACTION AS GEN UINE TRANSACTION. THE ABOVE DECISION IS CONFIRMED BY HONBLE ALLAHABA D HIGH COURT VIDE THEIR JUDGMENT IN ITA NO.680/12 VIDE JUDGMENT DATED 07.08 .2012 AND SLP OF ASSESSEE WAS DISMISSED BEFORE THE HONBLE APEX COURT AS REPO RTED IN 2013-LL-0122-69 5.6 HONBLE HIGH COURT OF DELHI IN CASE OF COMMISSI ONER OF INCOME TAX V/S. NAVODAYA CASTLES PVT. LTD. REPORTED AT (2014) 367 I TR 0306 INVOLVING EXACTLY SIMILAR FACTS OBSERVED IN PARA 2, 3 THEN PARA 2 AS UNDER:- 2. THE APPEAL ARISES OUT OF THE IMPUGNED ORDER DATE D 31 ST OCTOBER, 2011, PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, UPHOLDING THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) DELETING ADDIT ION OF RS.54,00,000/- MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 (ACT, FOR SHORT), BY T HE ASSESSING OFFICER ON ACCOUNT OF SHARE APPLICATION. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 69 3. THE ASSESSEE, A COMPANY, HAD FILED THEIR RETURN OF INCOME FOR THE ASSESSMENT YEAR 2002-03 DECLARING LOSS OF RS.1,58,035/- ON 20 TH OCTOBER, 2002, WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUE NTLY, ON THE BASIS OF A REPORT SUBMITTED BY THE INVESTIGATION WING THAT THE ASSESS EE WAS A RECIPIENT OF ACCOMMODATION ENTRIES IN FORM OF SHARE APPLICATION MONEY/SHARE CAPITAL/SHARE PREMIUM, NOTICE UNDER SECTION 147 READ WITH SECTION 148 OF THE ACT WAS ISSUED AND SERVED ON 25 TH MARCH, 2009 .. 7. SUMMONS UNDER SECTION 131 OF THE ACT WERE SENT T O THE ALLEGED SHAREHOLDERS AND THEY WERE ASKED TO FURNISH DETAILS ON 10 TH DECEMBER, 2009. DIRECTORS/PRINCIPAL OFFICERS WERE REQUIRED TO PERSO NALLY COME AND DEPOSE. THE SUMMONSES, AS PER THE ASSESSMENT ORDER, WERE RECEIV ED BACK UNSERVED. AT THE SAME TIME, THE ASSESSEE FILED DETAILS AND CONFIRMAT IONS OF THE ALLEGED SHARE CAPITAL. EARLIER ON 8 TH DECEMBER, 2009, A DETAILED SHOW CAUSE NOTICE WAS I SSUED, FIXING THE HEARING ON 14 TH DECEMBER, 2009. THE ASSESSEE WAS ASKED TO PRODUCE THE SHAREHOLDERS ALONG WITH THEIR BOOKS OF ACCOUNTS TO SUBSTANTIATE ITS CLAIM OF GENUINENESS OF THE CASH CREDITS. IN FACT ON 10 TH DECEMBER, 2009, AUTHORIZED REPRESENTATIVE HAD APPEARED AND HE WAS APPRISED THA T THE SUMMONS ISSUED TO THE SHAREHOLDERS UNDER SECTION 131 HAD BEEN RECEIVED BA CK UNSERVED IN FIVE CASES AND HE WAS REQUESTED TO PROVIDE THE PRESENT POSTAL ADDRESS OF THE PARTIES. INTHEMEANWHILE, THE ASSESSING OFFICER MANAGED TO GE T HOLD OF THE BANK STATEMENTS OF THE SHAREHOLDERS, WHO HAD ALLEGEDLY MADE DEPOSIT S BY WAY OF CHEQUES AND PAY ORDERS. THE ASSESSMENT ORDER SPECIFICALLY RECORDS T HAT HUGE CASH DEPOSITS IN LACS WERE BEING REGULARLY DEPOSITED IN THE SAID ACCOUNTS AND THEN PAY ORDERS/CHEQUES WERE ISSUED TO THE RESPONDENT ASSESSEE. 8. ON 14 TH DECEMBER, 2009, AUTHORIZED REPRESENTATIVE APPEARED AND STATED THAT THE ASSESSEE WAS UNABLE TO PRODUCE DIRECTORS OR PRI NCIPAL OFFICERS OF THE SIX SHAREHOLDER COMPANIES PLEADING THAT THEY WERE NOT S HAREHOLDERS NOW AND SEVEN YEARS HAD PASSED SINCE THE TRANSACTIONS TOOK PLACE. THE ASSESSMENT ORDER RECORDS AND MENTIONS ABOUT THE TRANSACTIONS RECORDED IN THE BANK ACCOUNTS OF THE SHAREHOLDER/ENTRY OPERATOR COMPANIES TO SHOW AND ES TABLISH THAT THERE WAS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 70 IMMEDIATE DEPOSIT OF CASH AND THEN ISSUE OF CHEQUES . IT WAS FURTHER MENTIONED THAT THESE COMPANIES WERE UNDER CONTROL OF ONE MAHE SH GARG AND HIS GROUP, WHO WERE OPERATING VARIOUS ACCOUNTS. THE ASSESSING OFFI CER MADE ADDITION OF RS.54,00,000/- UNDER SECTION 68 OF THE ACT AND RS.1 ,08,000/- AS COMMISSION PAID FOR PROCURING THE SAID SHARES BEING 2% OF RS.54,00, 000/-. ................................................... ................................................... .............. .. 11. WE HAVE HEARD THE SENIOR STANDING COUNSEL FOR T HE REVENUE, WHO HAS RELIED UPON DECISIONS OF THE DELHI HIGH COURT IN COMMISSIO NER OF INCOME TAX VS. NOVA PROMOTERS AND FINLEASE (P) LTD. [2012] 342 ITR 169 (DELHI), COMMISSIONER OF INCOME TAX VS. N.R. PORTFOLIO PVT. LTD., 206 (2014) DLT 97 (DB) (DEL) AND COMMISSIONER OF INCOME TAX-II VS. MAF ACADEMY P. LT D., 206 (2014) DLT 277 (DB) (DEL). THE AFORESAID DECISIONS MENTIONED ABOVE REFER TO THE EARLIER DECISIONS OF DELHI HIGH COURT IN COMMISSIONER OF IN COME TAX VS. SOPHIA FINANCE LTD., [1994] 205 ITR 98 (FB)(DELHI), CIT VS . DIVINE LEASING AND FINANCE LIMITED [2008] 299 ITR 268 (DELHI) AND OBSE RVATIONS OF THE SUPREME COURT IN CIT VS. LOVELY EXPORTS P. LTD. [2008] 319 ITR (ST.) 5 (SC). 12. THE MAIN SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT ONCE THE ASSESSEE HAD BEEN ABLE TO SHOW THAT THE SHARE HOLDE R COMPANIES WERE DULY INCORPORATED BY THE REGISTRAR OF COMPANIES, THEIR I DENTITY STOOD ESTABLISHED, GENUINENESS OF THE TRANSACTIONS STOOD ESTABLISHED A S PAYMENTS WERE MADE THROUGH ACCOUNTS PAYEE CHEQUES/BANK ACCOUNT; AND MERE DEPOS IT OF CASH IN THE BANK ACCOUNTS PRIOR TO ISSUE OF CHEQUE/PAY ORDERS ETC. W OULD ONLY RAISE SUSPICION AND, IT WAS FOR THE ASSESSING OFFICER TO CONDUCT FURTHER INVESTIGATION, BUT IT DID NOT FOLLOW THAT THE MONEY BELONGED TO THE ASSESSEE AND WAS THEIR UNACCOUNTED MONEY, WHICH HAD BEEN CHANNELIZED. 13. AS WE PERCEIVE, THERE ARE TWO SETS OF JUDGMENTS AND CASES, BUT THESE JUDGMENTS AND CASES PROCEED ON THEIR OWN FACTS. IN ONE SET OF CASES, THE ASSESSEE PRODUCED NECESSARY DOCUMENTS/EVIDENCE TO SHOW AND E STABLISH IDENTITY OF THE SHAREHOLDERS, BANK ACCOUNT FROM WHICH PAYMENT WAS M ADE, THE FACT THAT PAYMENTS WERE RECEIVED THOROUGH BANKING CHANNELS, F ILED NECESSARY AFFIDAVITS OF ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 71 THE SHAREHOLDERS OR CONFIRMATIONS OF THE DIRECTORS OF THE SHAREHOLDER COMPANIES, BUT THEREAFTER NO FURTHER INQUIRIES WERE CONDUCTED. THE SECOND SET OF CASES ARE THOSE WHERE THERE WAS EVIDENCE AND MATERIAL TO SHOW THAT THE SHAREHOLDER COMPANY WAS ONLY A PAPER COMPANY HAVING NO SOURCE O F INCOME, BUT HAD MADE SUBSTANTIAL AND HUGE INVESTMENTS IN THE FORM OF SHA RE APPLICATION MONEY. THE ASSESSING OFFICER HAS REFERRED TO THE BANK STATEMEN T, FINANCIAL POSITION OF THE RECIPIENT AND BENEFICIARY ASSESSEE AND SURROUNDING CIRCUMSTANCES. THE PRIMARY REQUIREMENTS, WHICH SHOULD BE SATISFIED IN SUCH CAS ES IS, IDENTIFICATION OF THE CREDITORS/SHAREHOLDER, CREDITWORTHINESS OF CREDITOR S/SHAREHOLDER AND GENUINENESS OF THE TRANSACTION. THESE THREE REQUIREMENTS HAVE T O BE TESTED NOT SUPERFICIALLY BUT IN DEPTH HAVING REGARD TO THE HUMAN PROBABILITIES A ND NORMAL COURSE OF HUMAN CONDUCT. 14. CERTIFICATE OF INCORPORATION, PAN NUMBER ETC. A RE RELEVANT FOR PURCHASE OF IDENTIFICATION, BUT HAVE THEIR LIMITATION WHEN THER E IS EVIDENCE AND MATERIAL TO SHOW THAT THE SUBSCRIBER WAS A PAPER COMPANY AND NO T A GENUINE INVESTOR. IT IS IN THIS CONTEXT, THE SUPREME COURT IN CIT VS. DURGA PR ASAD MORE [1971] 82 ITR 540 (SC) HAD OBSERVED:- NOW WE SHALL PROCEED TO EXAMINE THE VALIDITY OF TH OSE GROUNDS THAT APPEALED TO THE LEARNED JUDGES. IT IS TRUE THAT THE APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE RE ASONS TO BELIEVE THAT THE APPARENT IS NOT THE REAL. IN A CASE OF THE PRESENT KIND A PARTY WHO RELIES ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF T HOSE RECITALS, OTHERWISE IT WILL BE VERY EASY TO MAKE SELF-SERVING STATEMENTS I N DOCUMENTS EITHER EXECUTED OR TAKEN BY A PARTY AND RELY ON THOSE RECI TALS. IF ALL THAT AN ASSESSEE WHO WANTS TO EVADE TAX IS TO HAVE SOME REC ITALS MADE IN A DOCUMENT EITHER EXECUTED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEFT WIDE OPEN TO EVADE TAX. A LITTLE PROBI NG WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. THE TAXING AUTHORITIES WERE NOT REQUIRED TO PUT ON BLINKERS WH ILE LOOKING AT THE DOCUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY O F THE RECITALS MADE IN THOSE DOCUMENTS. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 72 15. SUMMARIZING THE LEGAL POSITION IN NOVA PROMOTER S AND FINLEASE (P) LTD.(SUPRA), AND HIGHLIGHTING THE LEGAL EFFECT OF S ECTION 68 OF THE ACT, THE DIVISION BENCH HAS HELD AS UNDER:- 32. THE TRIBUNAL ALSO ERRED IN LAW IN HOLDING ASSE SSING OFFICER OUGHT TO HAVE PROVED THAT THE MONIES EMANATED FROM THE COFFE RS OF THE ASSESSEE- COMPANY AND CAME BACK AS SHARE CAPITAL. SECTION 68 PERMITS THE ASSESSING OFFICER TO ADD THE CREDIT APPEARING IN TH E BOOKS OF ACCOUNT OF THE ASSESSEE IF THE LATTER OFFERS NO EXPLANATION RE GARDING THE NATURE AND SOURCE OF THE CREDIT OR THE EXPLANATION OFFERED IS NOT SATISFACTORY. IT PLACES NO DUTY UPON HIM TO POINT TO THE SOURCE FROM WHICH THE MONEY WAS RECEIVED BY THE ASSESSEE. IN A. GOVINDARAJULU MUDAL IAR V CIT, (1958) 34 ITR 807, THIS ARGUMENT ADVANCED BY THE ASSESSEE WAS REJECTED BY THE SUPREME COURT. VENKATARAMA IYER, J., SPEAKING FOR THE COURT OBSER VED AS UNDER (@ PAGE 810):- NOW THE CONTENTION OF THE APPELLANT IS THAT ASSUMI NG THAT HE HAD FAILED TO ESTABLISH THE CASE PUT FORWARD BY HIM, IT DOES NOT FOLLOW AS A MATTER OF LAW THAT THE AMOUNTS IN QUESTION WERE INCOME RECEIVED O R ACCRUED DURING THE PREVIOUS YEAR, THAT IT WAS THE DUTY OF THE DEPARTME NT TO ADDUCE EVIDENCE TO SHOW FROM WHAT SOURCE THE INCOME WAS DERIVED AND WHY IT SHOULD BE TREATED AS CONCEALED INCOME. IN THE ABSENCE OF SUCH EVIDENCE, IT IS ARGUED, THE FINDING IS ERRONEOUS. WE ARE UNABLE TO AGREE. W HETHER A RECEIPT IS TO BE TREATED AS INCOME OR NOT, MUST DEPEND VERY LARGE LY ON THE FACTS AND CIRCUMSTANCES OF EACH CASE. IN THE PRESENT CASE THE RECEIPTS ARE SHOWN IN THE ACCOUNT BOOKS OF A FIRM OF WHICH THE APPELLANT AND GOVINDASWAMY MUDALIAR WERE PARTNERS. WHEN HE WAS CALLED UPON TO GIVE EXPLANATION HE PUT FORWARD TWO EXPLANATIONS, ONE BEING A GIFT OF R S. 80,000 AND THE OTHER BEING RECEIPT OF RS. 42,000 FROM BUSINESS OF WHICH HE CLAIMED TO BE THE REAL OWNER. WHEN BOTH THESE EXPLANATIONS WERE REJEC TED, AS THEY HAVE BEEN IT WAS CLEARLY UPON TO THE INCOME-TAX OFFICER TO HOLD THAT THE INCOME ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 73 MUST BE CONCEALED INCOME. THERE IS AMPLE AUTHORITY FOR THE POSITION THAT WHERE AN ASSESSEE FAILS TO PROVE SATISFACTORILY THE SOURCE AND NATURE OF CERTAIN AMOUNT OF CASH RECEIVED DURING THE ACCOUNTI NG YEAR, THE INCOME- TAX OFFICER IS ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPT ARE OF AN ASSESSABLE NATURE. THE CONCLUSION TO WHICH THE APPELLATE TRIBUNAL CAM E APPEARS TO US TO BE AMPLY WARRANTED BY THE FACTS OF THE CASE. THERE IS NO GROUND FOR INTERFERING WITH THAT FINDING, AND THESE APPEALS ARE ACCORDINGLY DISMISSED WITH COSTS.(EMPHASIS SUPPLIED) SECTION 68 RECOGNIZES THE AFORESAID LEGAL POSITION. THE VIEW TAKEN BY THE TRIBUNAL ON THE DUTY CAST ON THE ASSESSING OFFICER BY SECTIO N 68 IS CONTRARY TO THE LAW LAID DOWN BY THE SUPREME COURT IN THE JUDGMENT CITED ABO VE. EVEN IF ONE WERE TO HOLD, ALBEIT ERRONEOUSLY AND WITHOUT BEING AWARE OF THE L EGAL POSITION ADUMBRATED ABOVE, THAT THE ASSESSING OFFICER IS BOUND TO SHOW THAT THE SOURCE OF THE UNACCOUNTED MONIES WAS THE COFFERS OF THE ASSESSEE, WE ARE INCLINED TO THINK THAT IN THE FACTS OF THE PRESENT CASE SUCH PROOF HAS BEE N BROUGHT OUT BY THE ASSESSING OFFICER. THE STATEMENTS OF MUKESH GUPTA AND RAJANJASSAL, TH E ENTRY PROVIDERS, EXPLAINING THEIR MODUS OPERANDI TO HELP ASSESSEES HAVING UNACCOUNTED MONIES CONVERT THE SAME INTO ACCOUNTED MONIES AFFORDS SUFF ICIENT MATERIAL ON THE BASIS OF WHICH THE ASSESSING OFFICER CAN BE SAID TO HAVE DIS CHARGED THE DUTY. THE STATEMENTS REFER TO THE PRACTICE OF TAKING CASH AND ISSUING CHEQUES IN THE GUISE OF SUBSCRIPTION TO SHARE CAPITAL, FOR A CONSIDERATION IN THE FORM OF COMMISSION. AS ALREADY POINTED OUT, NAMES OF SEVERAL COMPANIES WHI CH FIGURED IN THE STATEMENTS GIVEN BY THE ABOVE PERSONS TO THE INVESTIGATION WIN G ALSO FIGURED AS SHARE- APPLICANTS SUBSCRIBING TO THE SHARES OF THE ASSESSE E-COMPANY. THESE CONSTITUTE MATERIALS UPON WHICH ONE COULD REASONABLY COME TO T HE CONCLUSION THAT THE MONIES EMANATED FROM THE COFFERS OF THE ASSESSEE-CO MPANY. THE TRIBUNAL, APART FROM ADOPTING AN ERRONEOUS LEGAL APPROACH, ALSO FAI LED TO KEEP IN VIEW THE MATERIAL THAT WAS RELIED UPON BY THE ASSESSING OFFI CER. THE CIT (APPEALS) ALSO FELL INTO THE SAME ERROR. IF SUCH MATERIAL HAD BEEN KEPT IN VIEW, THE TRIBUNAL COULD NOT HAVE FAILED TO DRAW THE APPROPRIATE INFERENCE. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 74 16. IN THE SAID CASE, THE DIVISION BENCH HAD ALSO E XAMINED THE DECISION OF THE SUPREME COURT IN LOVELY EXPORTS P. LTD. (SUPRA) AND OTHER CASES IN WHICH THE ASSESSEE HAD SUCCEEDED. IT WAS NOTICED THAT IN THE CASE OF LOVELY EXPORTS P. LTD. AFFIDAVITS/CONFIRMATIONS OF SHAREHOLDERS WERE FILED AND INCOME TAX RECORD NUMBERS OF THE SHAREHOLDERS WERE MADE AVAILABLE, BU T THE ASSESSING OFFICER, WHO HAD SUFFICIENT TIME, FAILED TO CARRY OUT INQUIRY AN D EXAMINATION. REFERENCE WAS MADE TO THE OBSERVATIONS IN DIVINE LEASING (SUPRA) TO THE EFFECT THAT THERE CANNOT BE TWO OPINIONS ON THE ASPECT THAT THE PERNICIOUS P RACTICE OF CONVERSION OF UNACCOUNTED MONEY THROUGH THE MASQUERADE OR CHANNEL OF INVESTMENT AS SHARE CAPITAL MUST BE FIRMLY EXCORIATED BY THE REVENUE, B UT WHEN THERE IS PREPONDERANCE OF EVIDENCE TO SHOW ABSENCE OF CULPAB ILITY, THE ASSESSEE SHOULD NOT BE HARASSED BY THE REVENUE. A DELICATE BALANCE MUST BE MAINTAINED BETWEEN THE TWO INTERESTS. IN DIVINE LEASING (SUPRA), THE FOLLO WING PROPOSITION WAS ELUCIDATED:- IN THIS ANALYSIS, A DISTILLATION OF THE PRECEDENTS YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN THE CONTEXT OF SECTION 68 OF THE IT ACT. THE ASSESSED HAS TO PRIMA FACIE PROVE (1) THE IDENTITY OF THE CREDITOR/SUBSCRIBER; (2) THE GENUINENESS OF THE TRANSACTION, NAMELY, WHETHER IT HAS BEEN TRANSMITTE D THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDIT WORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER. (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONG WITH COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHA RE TRANSFER REGISTER ETC. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXP LANATION BY THE ASSESSED. (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/SUBSCRIBER FAILS OR NEGLECTS T O RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR/SUB SCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSED NOR SHOULD T HE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT, WITHOUT MORE, AGAINST T HE ASSESSED. (7) THE ASSESSING OFFICER IS DUTY-BOUND TO INVESTIGATE THE CREDITWORT HINESS OF THE CREDITOR/SUBSCRIBER THE GENUINENESS OF THE TRANSACT ION AND THE VERACITY OF THE REPUDIATION. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 75 17. NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) AF TER REFERRING TO THE DISMISSAL OF SLP AGAINST DIVINE LEASING CASE (SUPRA) OBSERVED AS UNDER:- SO UNDERSTOOD, IT WILL BE SEEN THAT WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICANTS SUCH AS THEIR NAMES AND ADDRES SES, INCOME TAX FILE NUMBERS, THEIR CREDITWORTHINESS, SHARE APPLICATION FORMS AND SHARE HOLDERS REGISTER, SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO THE ASSESSI NG OFFICER AND THE ASSESSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY UNDER SEC.68 AND THE REMEDY OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE WITH LAW. WE ARE AFRAID THAT WE CANNOT APPLY THE RATIO TO A CASE, SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSSESSION O F MATERIAL THAT DISCREDITS AND IMPEACHES THE PARTICULARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF-CONFESSED ACCOMMODATION ENTRY PROVIDE RS, WHOSE BUSINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT TH EIR UNACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION, AND THE A SSESSEE. THE RATIO IS INAPPLICABLE TO A CASE, AGAIN SUCH AS THE PRESENT O NE, WHERE THE INVOLVEMENT OF THE ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDI CATED BY VALID MATERIAL MADE AVAILABLE TO THE ASSESSING OFFICER AS A RESULT OF I NVESTIGATIONS CARRIED OUT BY THE REVENUE AUTHORITIES INTO THE ACTIVITIES OF SUCH EN TRY PROVIDERS. THE EXISTENCE WITH THE ASSESSING OFFICER OF MATERIAL SHOWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE-MEDITATED PLAN A SMOKE SCREEN CONCEIVED AND EXECUTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABILITY OF THE RATIO. IN OUR UNDERSTANDING, THE RATIO IS ATTRACTED TO A C ASE WHERE IT IS A SIMPLE QUESTION OF WHETHER THE ASSESS EE HAS DISCHARGED THE BURDEN PLACED UPON HIM UNDER SEC.68 TO PROVE AND ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GEN UINENESS OF THE TRANSACTION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE ORMATERIAL IN HI S POSSESSION AND THEN COME FORWARD TO MERELY REJECT THE SAME, WITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY INTO THE MATERIAL PLACED BEFORE HIM. THE CA SE BEFORE US DOES NOT FALL ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 76 UNDER THIS CATEGORY AND IT WOULD BE A TRAVESTY OF T RUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY. 18. LOVELY EXPORTS PVT. LTD.(SUPRA) WAS ALSO CONSID ERED AND DISTINGUISHED IN N.R. PORTFOLIO PVT. LTD. (SUPRA) AND IT WAS HELD THAT TH E ENTIRE EVIDENCE AVAILABLE ON RECORD HAS TO BE CONSIDERED, AFTER RELYING UPON CIT VS. NIPUN BUILDERS AND DEVELOPERS, [2013] 350 ITR 407 (DELHI), WHEREIN IT HAS BEEN HELD THAT A REASONABLE APPROACH HAS TO BE ADOPTED AND WHETHER I NITIAL ONUS STANDS DISCHARGED WOULD DEPEND UPON FACTS AND CIRCUMSTANCE S OF EACH CASE. IN CASE OF PRIVATE LIMITED COMPANIES, GENERALLY PERSONS KNOWN TO DIRECTORS OR SHAREHOLDERS, DIRECTLY OR INDIRECTLY, BUY OR SUBSCRIBE TO SHARES. UPON RECEIPT OF MONEY, THE SHARE SUBSCRIBERS DO NOT LOSE TOUCH AND BECOME INCO MMUNICADO. CALL MONEY, DIVIDENDS, WARRANTS, ETC. HAVE TO BE SENT AND THE R ELATIONSHIP REMAINS A CONTINUING ONE. THEREFORE, AN ASSESSEE CANNOT SIMPL Y FURNISH SOME DETAILS AND REMAIN QUIET WHEN SUMMONS ISSUED TO SHAREHOLDERS RE MAIN UN-SERVED AND UNCOMPLIED. AS A GENERAL PROPOSITION, IT WOULD BE I MPROPER TO UNIVERSALLY HOLD THAT THE ASSESSEE CANNOT PLEAD THAT THEY HAD RECEIV ED MONEY, BUT COULD DO NOTHING MORE AND IT WAS FOR THE ASSESSING OFFICER TO ENFORC E SHAREHOLDERS ATTENDANCE IN SPITE OF THE FACT THAT THE SHAREHOLDERS WERE MISSIN G AND NOT AVAILABLE. THEIR RELUCTANCE AND HIDING MAY REFLECT ON THE GENUINENES S OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR. IT WOULD BE ALSO INCORRECT TO UNIVERSALLY STATE THAT AN INSPECTOR MUST BE SENT TO VERIFY THE SHAREH OLDERS/SUBSCRIBERS AT THE AVAILABLE ADDRESSES, THOUGH THIS MIGHT BE REQUIRED IN SOME CASES. SIMILARLY, IT WOULD BE INCORRECT TO STATE THAT THE ASSESSING OFFI CER SHOULD ASCERTAIN AND GET ADDRESSES FROM THE REGISTRAR OF COMPANIES WEBSITE OR SEARCH FOR THE ADDRESSES OF SHAREHOLDERS THEMSELVES. CREDITWORTHINESS IS NOT PROVED BY SHOWING ISSUE AND RECEIPT OF A CHEQUE OR BY FURNISHING A COPY OF STAT EMENT OF BANK ACCOUNT, WHEN CIRCUMSTANCES REQUIRES THAT THERE SHOULD BE SOME MO RE EVIDENCE OF POSITIVE NATURE TO SHOW THAT THE SUBSCRIBERS HAD MADE GENUIN E INVESTMENT OR HAD, ACTED AS ANGEL INVESTORS AFTER DUE DILIGENCE OR FOR PERSONAL REASONS. THE FINAL CONCLUSION MUST BE PRAGMATIC AND PRACTICAL, WHICH TAKES INTO A CCOUNT HOLISTIC VIEW OF THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 77 ENTIRE EVIDENCE INCLUDING THE DIFFICULTIES, WHICH T HE ASSESSEE MAY FACE TO UNIMPEACHABLY ESTABLISH CREDITWORTHINESS OF THE SHA REHOLDERS. 19. IN N.R. PORTFOLIO PVT. LTD. (SUPRA), IT HAS BEE N HELD AS UNDER:- 18. IN THE REMAND REPORT, THE ASSESSING OFFICER RE FERRED TO THE PROVISIONS OF SECTION 68 OF THE ACT AND THEIR APPLICABILITY. T HE WORD IDENTITY AS DEFINED, IT WAS OBSERVED MEANT THE CONDITION OR FAC T OF A PERSON OR THING BEING THAT SPECIFIED UNIQUE PERSON OR THING. THE ID ENTIFICATION OF THE PERSON WOULD INCLUDE THE PLACE OF WORK, THE STAFF, THE FACT THAT IT WAS ACTUALLY CARRYING ON BUSINESS AND RECOGNITION OF TH E SAID COMPANY IN THE EYES OF PUBLIC. MERELY PRODUCING PAN NUMBER OR ASSE SSMENT PARTICULARS DID NOT ESTABLISH THE IDENTITY OF THE PERSON. THE ACTUAL AND TRUE IDENTITY OF THE PERSON OR A COMPANY WAS THE BUSINESS UNDERTAKEN BY THEM. THIS ACCORDING TO US IS THE CORRECT AND TRUE LEGAL POSIT ION, AS IDENTITY, CREDITWORTHINESS AND GENUINENESS HAVE TO BE ESTABLI SHED. PAN NUMBERS ARE ALLOTTED ON THE BASIS OF APPLICATIONS WITHOUT A CTUAL DE FACTO VERIFICATION OF THE IDENTITY OR ASCERTAINING ACTIVE NATURE OF BUSINESS ACTIVITY. PAN IS A NUMBER WHICH IS ALLOTTED AND HEL PS THE REVENUE KEEP TRACK OF THE TRANSACTIONS. PAN NUMBER IS RELEVANT B UT CANNOT BE BLINDLY AND WITHOUT CONSIDERING SURROUNDING CIRCUMSTANCES T REATED AS SUFFICIENT TO DISCHARGE THE ONUS, EVEN WHEN PAYMENT IS THROUGH BANK ACCOUNT. 19. ON THE QUESTION OF CREDIT WORTHINESS AND GENUIN ENESS, IT WAS HIGHLIGHTED THAT THE MONEY NO DOUBT WAS RECEIVED TH ROUGH BANKING CHANNELS, BUT DID NOT REFLECT ACTUAL GENUINE BUSINE SS ACTIVITY. THE SHARE SUBSCRIBERS DID NOT HAVE THEIR OWN PROFIT MAKING AP PARATUS AND WERE NOT INVOLVED IN BUSINESS ACTIVITY. THEY MERELY ROTATED MONEY, WHICH WAS COMING THROUGH THE BANK ACCOUNTS, WHICH MEANS DEPOS ITS BY WAY OF CASH AND ISSUE OF CHEQUES. THE BANK ACCOUNTS, THEREFORE, DID NOT REFLECT THEIR CREDITWORTHINESS OR EVEN GENUINENESS OF THE TRANSAC TION. THE BENEFICIARIES, INCLUDING THE RESPONDENT-ASSESSEE, DID NOT GIVE ANY SHARE-DIVIDEND OR ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 78 INTEREST TO THE SAID ENTRY OPERATORS/SUBSCRIBERS. T HE PROFIT MOTIVE NORMAL IN CASE OF INVESTMENT WAS ENTIRELY ABSENT. IN THE P RESENT CASE, NO PROFIT OR DIVIDEND WAS DECLARED ON THE SHARES. ANY PERSON, WH O WOULD INVEST MONEY OR GIVE LOAN, WOULD CERTAINLY SEEK RETURN OR INCOME AS CONSIDERATION. THESE FACTS ARE NOT ADVERTED TO AND AS NOTICED BELO W ARE TRUE AND CORRECT. THEY ARE UNDOUBTEDLY RELEVANT AND MATERIAL FACTS FO R ASCERTAINING CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S. 30. WHAT WE PERCEIVE AND REGARD AS CORRECT POSITION OF LAW IS THAT THE COURT OR TRIBUNAL SHOULD BE CONVINCED ABOUT THE IDE NTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE ONUS TO PROVE THE THREE FACTUM IS ON THE ASSESSEE AS THE FACTS ARE WITHIN THE ASSESSE ES KNOWLEDGE. MERE PRODUCTION OF INCORPORATION DETAILS, PAN NOS. OR TH E FACT THAT THIRD PERSONS OR COMPANY HAD FILED INCOME TAX DETAILS INC ASE OF A PRIVATE LIMITED COMPANY MAY NOT BE SUFFICIENT WHEN SURROUND ING AND ATTENDING FACTS PREDICATE A COVER UP. THESE FACTS INDICATE AND REFLECT PROPER PAPER WORK OR DOCUMENTATION BUT GENUINENESS, CREDITWORTHI NESS, IDENTITY ARE DEEPER AND OBTRUSIVE. COMPANIES NO DOUBT ARE ARTIFI CIAL OR JURISTIC PERSONS BUT THEY ARE SOULLESS AND ARE DEPENDENT UPO N THE INDIVIDUALS BEHIND THEM WHO RUN AND MANAGE THE SAID COMPANIES. IT IS THE PERSONS BEHIND THE COMPANY WHO TAKE THE DECISIONS, CONTROLS AND MANAGE THEM. 20. NOW, WHEN WE GO TO THE ORDER OF THE TRIBUNAL IN THE PRESENT CASE, WE NOTICE THAT THE TRIBUNAL HAS MERELY REPRODUCED THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS) AND UPHELD THE DELETION OF THE ADDITI ON. IN FACT, THEY SUBSTANTIALLY RELIED UPON AND QUOTED THE DECISION OF ITS COORDINA TE BENCH IN THE CASE OF MAF ACADEMY P. LTD., A DECISION WHICH HAS BEEN OVERTURN ED BY THE DELHI HIGH COURT VIDE ITS JUDGMENT IN C.I.T VS. MAF ACADEMY P.LTD [ (2014) 206 DLT 277). IN THE IMPUGNED ORDER IT IS ACCEPTED THAT THE ASSESSEE WAS UNABLE TO PRODUCE DIRECTORS AND PRINCIPAL OFFICERS OF THE SIX SHAREHOLDER COMPA NIES AND ALSO THE FACT THAT AS PER THE INFORMATION AND DETAILS COLLECTED BY THE AS SESSING OFFICER FROM THE CONCERNED BANK, THE ASSESSING OFFICER HAS OBSERVED THAT THERE WERE GENUINE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 79 CONCERNS ABOUT IDENTITY, CREDITWORTHINESS OF SHAREH OLDERS AS WELL AS GENUINENESS OF THE TRANSACTIONS. 21. IN VIEW OF THE AFORESAID DISCUSSION, WE FEEL TH AT THE MATTER REQUIRES AN ORDER OF REMIT TO THE TRIBUNAL FOR FRESH ADJUDICATION KEE PING IN VIEW THE AFORESAID CASE LAW. THE QUESTION OF LAW IS, THEREFORE, ANSWERED IN FAVOUR OF THE REVENUE AND AGAINST THE RESPONDENT-ASSESSEE, BUT WITH AN ORDER OF REMIT TO THE TRIBUNAL TO DECIDE THE WHOLE ISSUE AFRESH. AS REPORTED AT 2015-TIOL-314-SC-IT, IN THE ABOVE CA SE, THE HONBLE SUPREME COURT OBSERVED TO EFFECT THAT MERELY BECAUSE THE A SSESSEE HAS BEEN ABLE TO SHOW THAT THE SHAREHOLDER COMPANIES WERE DULY INCORPORAT ED AND THEIR IDENTITY & GENUINENESS STANDS ESTABLISHED, THERE WERE DEPOSITS OF CASH IN THE BANK ACCOUNTS PRIOR TO ISSUE OF CHEQUE OR PAY ORDERS, THE SAME WO ULD RAISE SUSPICION AND ADDITION CAN BE MADE ON SUCH ACCOUNT 5.7 IT MAY BE MENTIONED THAT AS REPORTED AT 2016-TI OL-207-SC-IT, THE HONBLE SUPREME COURT DISMISSED SLP BY RICK LUNSFOR D TRADE & INVESTMENT LTD IN CASE OF RICK LUNSFORD TRADE & INVESTMENT LTD VS CIT UPHOLDING THAT IT IS OPEN TO THE REVENUE DEPARTMENT TO MAKE ADDITION ON ACCOUNT OF ALLEGED SHARE CAPITAL U/S 68, WHERE THE ASSESSEE COMPANY HAS FAIL ED TO SHOW GENUINENESS OF ITS SHAREHOLDERS. 5.8 HONBLE DELHI HIGH COURT IN CASE OF COMMISSIONE R OF INCOME TAX-II V/S MAF ACADEMY PVT. LTD. INVOLVING EXACTLY SIMILAR FAC TS IN ITA 341/2012 DATED 28 TH NOVEMBER, 2013 OBSERVED IN PARA 33 TO 36 AS UNDER: 33. THE ASSESSEE COMPANY IS A PRIVATE LIMITED COMPA NY AND HAD NOT COME OUT WITH ANY PUBLIC ISSUE NOR MADE ANY ADVERTISEMENT FO R ISSUANCE OF SHARE CAPITAL. HOWEVER, IN ONE YEAR THERE IS INFUSION OF SHARE CAP ITAL INCLUDING PREMIUM OF RS.4,35,00,000/-, OUT OF WHICH ONLY RS.92,00,000/- WAS INFUSED FROM THE DIRECTORS/FAMILY MEMBERS OF THE DIRECTORS. THE REMA INING SHARE CAPITAL HAD BEEN INFUSED FROM PARTIES WHICH WERE COMPLETELY UNRELATE D EITHER TO THE ASSESSEE OR TO ANY OF ITS DIRECTORS. IN A PRIVATE LIMITED COMPANY, NORMALLY THE INVESTMENT OF ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 80 SHARES IS FROM PARTIES OR PERSONS WHO ARE FRIENDS O R RELATIVES OF PROMOTERS/DIRECTORS. 34. IT IS NOTICED THAT THE SHARES HAD FACE VALUE OF RS.100 /- AND WERE ALLOTTED AT A PREMIUM OF RS.100 /- TO RS.200/- AND WERE THEN SUBS EQUENTLY PURCHASED BY THE PROMOTERS/DIRECTORS, WHO HAD ORIGINALLY TRANSFERRED THESE SHARES AT RS.35 /- PER SHARE. 35. IT IS REALLY SURPRISING THAT A PERSON WHO HAD P URCHASED SHARES AT A PREMIUM OF RS.100 /- TO RS.200/- PER SHARE I.E. AT A PRICE OF RS.200 /- TO RS.300/- PER SHARE, SOLD THE SHARES AT RS.35 /- PER SHARE I.E AT A SUBS TANTIAL LOSS. ANOTHER SURPRISING FACTOR IS THAT THE ENTIRE INVESTMENT HAPPENED DURIN G A SHORT SPAN OF TIME AND RE- TRANSFER OF THE SHARES TO THE FOUR PROMOTERS/DIRECT ORS OF THE COMPANY AT RS.35 /- PER SHARE BY DIFFERENT PARTIES ALSO HAPPENED DURING A SHORT SPAN OF FEW DAYS. THE MODUS OPERANDI AND THE MANNER IN WHICH CASH IS DEPO SITED IN A BANK AND THEN UTILIZED BY WAY OF AN ACCOUNT PAYEE CHEQUE FOR PURC HASE OF SHARES FOR A PREMIUM OF RS.100 /- TO RS.200/- PER SHARE AND THEN THE SAL E OF SHARES AT A LOSS CLEARLY ESTABLISHES THAT THE SAID TRANSACTION WAS A CAMOUFL AGE TRANSACTION. THE ASSESSEE HAS CLEARLY ATTEMPTED TO CAMOUFLAGE THE ACCOMMODATI ON ENTRIES AND TRIED TO GIVE IT A COLOUR OF PURCHASE OF SHARE CAPITAL AND THEN S ALE OF THE SAME AT A LOSS. THUS THE ASSESSEE'S CAPITAL INCREASED OR WAS ENHANCED BY A SUBSTANTIAL FIGURE THROUGH THESE DUBIOUS TRANSACTIONS. THIS SHOULD BE AND HAS TO BE CHECKED. 36. OUT OF RS.4.35 CRORES RECEIVED AS SHARE CAPITAL INCLUDING PREMIUM, ONLY RS.92 LACS HAS BEEN RECEIVED FROM THE DIRECTORS OR THEIR FAMILY MEMBERS AND THE REMAINING AMOUNT HAS BEEN RECEIVED FROM PARTIES TOT ALLY UNRELATED TO THE ASSESSEE. NOTICES TO SOME OF THE INVESTORS COULD NO T BE SERVED AND EVEN THE INSPECTOR WHO WAS DEPUTED TO SERVE THE SUMMONS STAT ED THAT NONE OF THE ADDRESSES COULD BE FOUND. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE REFU SED TO PRODUCE THE PARTIES WHO HAD INVESTED IN THE SHAR E CAPITAL ON THE GROUND THAT THEY WERE NOT IN A POSITION TO PRODUCE THEM. THE FA CT THAT THE ASSESSEE FAILED TO PRODUCE THE PERSONS WHO HAD INVESTED TOWARDS SHARE CAPITAL SHOWS THAT THESE WERE PEOPLE WHO WERE COMPLETELY UNRELATED TO THE AS SESSEE AND AS SUCH, ALL THE ENTRIES WERE MERELY ACCOMMODATION ENTRIES. OTHERWISE, IN A PRIVATE LIMITED COMPANY, IT WOULD NOT HAVE BEEN DIFFICULT ON THE PA RT OF THE ASSESSEE TO PRODUCE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 81 PERSONS WHO WERE INVESTING SUBSTANTIAL AMOUNT OF MO NEY IN THE COMPANY TOWARDS SHARE CAPITAL. 37. THE ASSESSING OFFICER IN HIS ORDER HAS AS A SAM PLE REFERRED TO THE ENTRIES IN THE ACCOUNT OF SOME OF THE SHARE HOLDERS NOTICING T HAT THERE ARE CASH DEPOSITS OF THE EXACT AMOUNT FOR WHICH CHEQUE IS SUBSEQUENTLY I SSUED TO THE ASSESSEE. PERUSAL OF THE BANK STATEMENTS CLEARLY ESTABLISHES THAT THE SE PARTIES WERE DEPOSITING CASH AND IMMEDIATELY EITHER ON THE SAME DAY OR IN THE NE AR FUTURE WITHDRAWING THE SAME THROUGH A CHEQUE WHICH WAS ISSUED IN FAVOUR OF THE ASSESSEE. THEN HONBLE DELHI HIGH COURT HELD IN PARA 53 TO 5 4 AS UNDER:- 53. IN CONTRAST TO THE ABOVE JUDGMENTS, IN THE PRES ENT CASE, THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IN THE FACTUAL MATRIX, WE HAVE HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO DISCHARGE THE INITIAL ONUS AND HAS NOT BEEN ABLE TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THE SHARE APPLICA NTS AND THE GENUINENESS OF THE TRANSACTION. THOUGH, IN OUR CONSIDERED OPINION, NONE OF THE ABO VE JUDGMENTS, REFERRED TO BY THE ASSESSEE RESPONDENT, ARE APPLICA BLE IN THE FACTS OF THE PRESENT CASE AND IN VIEW OF THE FINDINGS RECORDED BY US HER EINABOVE. 54. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT T HE ASSESSEE HAS NOT DISCHARGED THE ONUS SATISFACTORILY AND THE ADDITIONS MADE BY T HE ASSESSING OFFICER WERE JUSTIFIED AND SUSTAINABLE . 5.9 HONBLE INCOME TAX APPELLATE TRIBUNAL DELHI BEN CH: 'B IN CASE OF M/S. AMTRAC AUTOMOTIVE INDIA PVT. LTD. VERSUS ACIT, CIRC LE 1(1), INVOLVING EXACTLY SIMILAR FACTS IN THEIR APPELLATE ORDER ITA NO.2920/ DEL/09 FOR A.Y. 2005-06 DATED 31.12.2009 OBSERVED IN PARA 3 & THEN PARA 2 AS UNDE R:- 3. THE ASSESSEE COMPANY IS ENGAGED IN SHARE TRADING IN THE YEAR UNDER CONSIDERATION. IN THE COURSE OF SCRUTINY, THE ASSES SING OFFICER NOTED THAT THE APPELLANT HAS INTRODUCED FRESH SHARE CAPITAL TO THE TUNE OF RS. 15,00,000/- AT A SHARE PREMIUM OF RS. 1,35,00,000/-......... ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 82 2.1 THE AO ASKED THE APPELLANT TO FURNISH DETAIL S OF SUCH SHARE HOLDERS MENTIONING THEIR IDENTITY, GENUINENESS OF TRANSACTI ON AND CREDIT-WORTHINESS. APPELLANT PRODUCED CONFIRMATION OF DEPOSIT FROM DIR ECTORS OF THE RESPECTIVE COMPANY, COPIES OF INCOME TAX RETURN FILED AND COPI ES OF BANK STATEMENT REFLECTING THE ABOVE TRANSACTIONS. IN ORDER TO VERI FY THE ENTIRE TRANSACTIONS IN THE ASSTT. YEAR 2005-06 LIGHT OF GENUINENESS AND CR EDITWORTHINESS, HE ISSUED SUMMONS U/S 131 OF THE ACT TO ALL THE ABOVE 15 PERS ONS. THEY WERE ASKED TO PRODUCE THE COPIES OF RETURN FOR AY. 2005-06 AND TH EIR LEDGER ACCOUNTS FROM WHICH THE SOURCE OF ABOVE SHARE APPLICATION MONEY C OULD HAVE BEEN VERIFIED. ALL THE ABOVE SUMMONS WERE RETURNED UNSERVED WITH THE C OMMENTS FROM THE POSTAL AUTHORITIES AS 'NO SUCH PERSON IN THE ABOVE ADDRESS '. THE AO ACCORDINGLY BROUGHT THIS FACT TO THE NOTICE OF THE COUNSEL OF T HE ASSESSEE VIDE ORDER SHEET ENTRY DATED 18.12.2007 AND HE WAS GIVEN AN OPPORTUNITY TO PRODUCE THE FUNCTIONAL DIRECTORS OF THE ABOVE COMPANIES FOR VERIFICATION. AS MENTIONED IN THE ASSESSMENT ORDER, AFTER CERTAIN ADJOURNMENTS, A LETTER WAS FIN ALLY FILED FROM THE APPELLANT MENTIONING THAT IT IS NO IN TOUCH OF THE ABOVE SHAR E HOLDERS AND THEIR PRESENT WHEREABOUTS ARE NOT KNOWN TO IT. THE APPELLANT, HOW EVER, RELYING UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SOPHIA FINANCE LTD. IN WHICH THE POWERS OF THE ASSESSING OFFICER WAS NOT PRECLUDED FROM MAKING ENQUIRIES IN SHARE APPLICATION MONEY, SUBMITTED THA T NO ADDITION CAN BE MADE. 2.1.1 THE AO HOWEVER WAS NOT CONVINCED WITH THE SUB MISSION OF THE APPELLANT. HE OBSERVED THAT THAT IT WAS ONLY IN THE COURSE OF ENQ UIRY THAT HE TRIED TO EXAMINE THE ABOVE SHARE APPLICANTS. SINCE THE SUMMONS ISSUED TO SUCH PERSONS REMAINED UNSERVED, IT BECAME THE DUTY OF THE APPELLANT EITHE R TO PRODUCE THEM FOR VERIFICATION OR TO STATE THEIR CORRECT ADDRESSES. IT APPEARS TO BE HIGHLY IMPROPER THAT IN A PRIVATE LTD. COMPANY, THE ASSESSEE IS NOT IN A POSITION TO STATE THE EXACT WHEREABOUTS OR FAIL TO PRODUCE THE PERSONS WHO COLL ECTIVELY HOLD MORE THAN 25% OF ITS TOTAL SHARE HOLDING. HE ALSO OBSERVED THAT M ERE FILING OF ASSTT. YEAR 2005-06 CONFIRMATION LETTERS DO NOT ABSOLVE THE APPELLANT F ROM ITS ONUS TO PROVE THE CREDIT ENTRIES REFLECTED IN ITS BOOKS OF ACCOUNTS AS HAS BEEN HELD BY HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. UNITED COMMERCIAL & INDUSTRIAL CO. (P) LTD .[1991] 187 ITR 596. HE FURTHER OBSERVED THAT THE F ACTS THAT THE AMOUNT WERE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 83 PAID BY ACCOUNT PAYEE CHEQUES DO NOT MAKE IT SATISF ACTORY AS HELD IN CIT VS. PRECISION FINANCE PVT. LTD. 208 ITR 465 (CAL.). EVEN INCOME -TAX FILE PARTICULARS, WHERE THE SHARE HOLDER IS ASSESSED TO TAX IS NOT SU FFICIENT AS FOUND IN CIT VS. KORLAY TRADING CO. LTD . 232 ITR 820 (CAL.) 2.1.2 THE AO ALSO REFERRED THE ENQUIRY INITIATED BY INVESTIGATION WING OF THE DEPARTMENT IN AUGUST 2003 WHICH CULMINATED INTO DET ECTION OF MANY ENTRY OPERATORS WHO ARE OPERATING NUMBER OF ACCOUNTS IN T HE SAME BANK/BRANCH OR IN DIFFERENT BRANCHES, IN THE NAMES OF COMPANIES, FIRM S, PROPRIETARY CONCERNS AND INDIVIDUALS. FOR THE OPERATIONS OF THESE BANK ACCOUNTS, FILING INCOME TAX RETURNS ETC. PERSONS ARE HIRED. LIKE ANY OTHER BUSINESS IT DOES REQUIRES MANPOWER ACCORDING TO THE SCALE OF OPERATION. EXCEPT FOR TWO OR THREE PERSONS WHO ARE REQUIRED REGULARLY TO VISIT BANKS AND DO OTHER SPAD E WORK LIKE COLLECTION OF CASH ETC., MOST OF THE OTHER PERSONS INVOLVED ARE ON PAR T TIME BASIS. THE PART TIME EMPLOYEES ARE CALLED AS AND WHEN REQUIRED TO SIGN D OCUMENTS, CHEQUE BOOKS ETC. SOME OF THE ENTRY OPERATORS HAVE ALSO ROPED IN THEI R OWN RELATIVES FOR OPERATION OF ENTRY ACCOUNTS AND FILING THE INCOME TAX RETURNS . INTERESTINGLY MOST OF THESE CONCERNS / INDIVIDUALS HAVE OBTAINED PAN FROM THE D EPARTMENT AND ARE FILING RETURNS AS WELL. WHAT IS SHOWN IN THE RETURNS IS NOT THE ACTUAL STA TE OF AFFAIRS. FOR EXAMPLE WITH ONE PAN SEVERAL BANK ACCOUNTS ARE SIMU LTANEOUSLY ASSTT. YEAR 2005-06 OPERATED AND ONLY ONE ACCOUNT MIGHT BE SHOW N FOR THE PURPOSE OF AUDIT AND FILING INCOME TAX RETURNS. THE ENTRY OPERATORS PROVIDE ENTRY IN THE GARB OF SHARE APPLICATION MONEY , GIFTS, LOANS ETC. THROUGH THESE ACCOUNTS, IN LIEU OF CASH, TO ANY PERSON WHO IS HAVING UNACCOUNTED MONEY. 2.1.2.1 THE AO OBSERVED THAT SOME OF THE COMPANIES SHOW ABOVE BY THE APPELLANT AS ITS SHARE HOLDERS WERE FOUND TO HAVE STATED BEFO RE INVESTIGATION WING THAT THEY WERE MERE NAME LENDER FOR ADVANCING MONEY. TO QUOTE SOME OF THEM, SHRI RAJESH BANSAL, DIRECTOR OF M/S. RUBICON ASSOCIATES PVT. LT D., SHRI MAHESH GARG, DIRECTOR OF M/S. S.J. HOSIERY PVT. LTD. ETC. HAVE C ATEGORICALLY STATED BEFORE THE INVESTIGATION WING, IN THEIR STATEMENT TAKEN ON OAT H, THAT THEY USED TO TAKE THE AMOUNT IN CASH AND GIVE ENTRIES TO DIFFERENT CONCER NS AS GIFT, LOAN OR SHARE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 84 APPLICATION MONEY. ACCORDING TO AO, TO ENQUIRE INTO THIS ASPECT ALSO, THE APPELLANT WAS ASKED TO PRODUCE THE FUNCTIONAL DIREC TORS OF SUCH SHARE HOLDERS. 2.1.3. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, TH E ASSESSING OFFICER CONCLUDED THAT THE CREDIT IN THE NAME OF THESE SHAREHOLDERS A RE NOT GENUINE AND REPRESENTS UNEXPLAINED CASH CREDITS. ACCORDINGLY HE MADE ADDIT ION OF RS. 1.50 LAKHS TO THE RETURNED INCOME. THEN HONBLE INCOME TAX APPELLATE TRIBUNAL DELHI BE NCH: 'B HELD IN PARA 6 AS UNDER: 6. AS REGARDS GROUND NO. 2, WE FIND THAT THE ASSESS EE HAS STATED TO HAVE RECEIVED FRESH SHARE CAPITAL TO THE TUNE OF RS. 15 LACS AND SHARE PREMIUM OF RS.1,00,35,000/- I.E. A SHARE OF FACE VALUE OF RS. 10/- EACH ISSUED AT A PREMIUM OF RS. 90/- TOTALING TO RS. 100/-. WHEN THE AO ASKED T HE APPELLANT TO FURNISH THE DETAILS THE ASSESSEE PRODUCED SHARE APPLICATION FOR MS AND OTHER DETAILS LIKE BANK STATEMENT, COPY OF ACKNOWLEDGMENT OF RETURN ETC. HO WEVER WHEN THE AO CONDUCTED INQUIRY AT THE STATED ADDRESS, SUMMONS WE RE RECEIVED BACK UNSERVED WITH THE POSTAL REMARK 'NO SUCH PERSON IN THE ABOVE ADDRESS'. THIS FACT WAS ASSTT. YEAR 2005-06 BROUGHT TO THE NOTICE OF ASSESSEE ALSO . THEREAFTER THE ASSESSEE EXCEPT PRODUCING THE PAPERS COULD NOT PROVE EXISTEN CE OR AVAILABILITY OF THE RESPECTIVE SHARE APPLICANTS. WHEN THE IDENTITY OF T HE PERSON IS REQUIRED TO BE PROVED SO AS TO EXAMINE WHETHER IN FACT THEY HAVE A PPLIED FOR ALLOTMENT OF SHARES, THE EXISTENCE ITSELF IS NOT PROVED. THE EXISTENCE O F A PERSON IS NOT MERELY ON PAPER. PARTICULARLY WHEN THE AO REQUIRED THE ASSESSEE TO P RODUCE THE SHARE APPLICANTS AND PARTICULARLY WHEN AT THE STATED ADDRESS THE SHA RE APPLICANTS DO NOT FOUND TO BE EXISTING, IT CANNOT BE SAID THAT THE AMOUNT RECE IVED BY ASSESSEE IS PROVED TO BE TOWARDS SHARE CAPITAL. THE TRANSACTION CANNOT BE PR OVED MERELY ON PAPER. NEITHER BEFORE AO NOR BEFORE LD. CIT (A) THE ASSESS EE COULD MAKE THE SHARE APPLICANTS AVAILABLE. THEREFORE WHEN THE IDENTITY OF THE PERSON ITSELF I S NOT PROVED, THE AMOUNT RECEIVED BY ASSESSEE CANNOT BE C ONSIDERED TO BE GENUINELY RECEIVED. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 85 6.1. IT IS ALSO TO BE NOTED THAT THE ASSESSEE COMPA NY IS STATED TO HAVE ISSUED SHARES AT PREMIUM 9 TIMES ITS FACE VALUE. THE ASSESSEE IS A PRIVATE LIMITED COMPANY. IT HAS NOT ISSUED PROSPECTUS FOR ISSUE OF SHARES NOR U NDER THE COMPANIES ACT 1956, IT CAN INVITE THE PUBLIC TO APPLY FOR AND ALLOT THE SHARES. THE COMPANY IS PROHIBITED FROM MAKING ANY INVITATION FOR ALLOTMENT OF SHARES. HOW THE PREMIUM WAS FIXED IS NOT FORTH COMING. LOOKING TO THE BALAN CE SHEET OR PAST HISTORY OF ASSESSEE, THE ASSESSEE COMPANY HAS NEVER DECLARED D IVIDEND IN THE PAST. THE COMPANY HAS NO BUSINESS PLANS WHICH CAN RAISE ITS P ROFITABILITY IN THE NEAR FUTURE. THE INCOME DECLARED BY THE ASSESSEE IS ONLY BY WAY OF SHORT TERM CAPITAL GAIN AND THE ASSESSEE DO NOT SEEM TO HAVE CARRIED ON ANY BUS INESS. ASSTT. YEAR 2005-06 IN SUCH CIRCUMSTANCES THE SHARE PREMIUM IS NOT FOUND TO BE JUSTIFIED BY ANY OF THE ACT ON THE PART OF ASSESSEE . THESE FACTS ARE REVEALING MORE THAN THE APPARENT SHOWN ON THE PAPER. ALL THESE FAC TS PUT TOGETHER REVEAL THAT NEITHER THE IDENTITY OF THE SHARE APPLICANTS ARE PR OVED NOR JUSTIFICATION FOR SHARE PREMIUM HAS BEEN PROVED. IN SUCH CIRCUMSTANCES THE COURT CANNOT PUT BLINKER ON THE EYE AND LOOK ONLY AT THE PAPERS PRESENTED BEFOR E IT. THERE IS SOMETHING MORE THAN THAT MEETS THE EYE. AS RIGHTLY CONTENDED BY LD . DR IN SUCH SITUATION THE OBSERVATION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 ITR 540 AND IN THE CASE OF SUMATI DAYAL VS. CIT 214 ITR 801 ARE APT FOR APPLICATION. WE THEREFORE DO NOT FIND ANY REASON TO HOLD THAT THE SHARE CAPITAL RECEIPTS BY ASSESSEE WERE FROM PERSONS WHOSE IDENTI TY IS ESTABLISHED AND THE AMOUNT IS GENUINELY RECEIVED TOWARDS SHARE CAPITAL. 5.10 IN A RECENT DECISION IN CASE OF PRINCIPAL COMM ISSIONER OF INCOME VS BIKRAM SINGH IN ITA 55/2017, THE HONBLE HIGH COUR T OF DELHI HELD ON 25 AUGUST, 2017 AS UNDER:- 25. THE LAW APPLICABLE TO TRANSACTIONS OF THIS NATU RE IS WELL SETTLED BY THIS COURT IN DIVINE LEASING (SUPRA). BOTH PARTIES HAVE REFERR ED TO AND RELIED UPON THIS JUDGMENT. THIS COURT, AFTER ANALYZING THE ENTIRE LA W ON THE SUBJECT IN THE CONTEXT OF SECTION 68 OF THE ACT, HELD AS UNDER: ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 86 '...16. IN THIS ANALYSIS, A DISTILLATION OF THE PRE CEDENTS YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN THE CONTEXT OF SECTION 68 OF THE IT ACT. THE ASSESSEE HAS TO PRIMA FACIE PROVE (1) THE IDENTITY OF THE CREDITOR/ SUBSCRIBER; (2) THE GENUINENESS OF THE TRANSACTION, NAMELY, WHETHER IT HAS BEEN TRA NSMITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDITWORTHINE SS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER. (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONG WITH COPIES OF THE SHAREHOLDERS REGISTER, SHARED APPLICATION FORMS, SH ARE TRANSFER REGISTER ETC. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXP LANATION BY THE ASSESSEE. (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/SUBSCRIBER FAILS OR NEGLECTS T O RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR/SUB SCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE NOR SHOULD T HE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT, WITHOUT MORE, AGAINST T HE ASSESSEE. (7) THE ASSESSING OFFICER IS DUTY-BOUND TO INVESTIGATE THE CREDITWORT HINESS OF THE CREDITOR /SUBSCRIBER THE GENUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIATION....' 26. IN DIVINE LEASING (SUPRA), ON THE QUESTION OF B URDEN OF PROOF, THE COURT RELIED UPON CIT V. MUSADDILAL RAM BHAROSE , (1987) 165 ITR 14, TO HOLD THAT THE INITIAL BURDEN IS UPON THE ASSESSEE TO SHOW THE ABSENCE OF FRAUD AND THIS IS NOT DISCHARGED BY THE ASSESSEE TENDERING AN INCREDIBLE AND FANTASTIC EXPLANATION. THE COURT ALSO HELD THAT EVERY EXPLANATION GIVEN BY THE ASSESSEE NEED NOT BE ACCEPTED. 27. IN KAMDHENU (SUPRA), THIS COURT CATEGORICALLY H ELD THAT THE INITIAL BURDEN LIES ON THE ASSESSEE TO ESTABLISH THE IDENTITY OF THE SH AREHOLDERS, THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE SHA REHOLDERS. IT IS ONLY AFTER THE INITIAL BURDEN IS DISCHARGED THAT THE ONUS SHIFTS T O THE REVENUE. THIS COURT IN KAMDHENU (SUPRA) REFERRED TO CIT V. SOPHIA FINANCE , 205 ITR 98 WHICH HAD HELD TO THE SAME EFFECT. THE DIVINE LEASING (SUPRA) AND SOPHIA FINANCE (SUPRA) JUDGMENTS WERE REITERATED BY THIS COURT IN DWARKADH ISH (SUPRA). THUS, THE LAW IN RELATION TO SECTION 68 IS WELL SETTLED. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 87 ................................................... ................................................... ......................... 43. THE TRANSACTIONS IN THE PRESENT APPEAL ARE YET ANOTHER EXAMPLE OF THE CONSTANT USE OF THE DECEPTION OF LOAN ENTRIES TO BRING UNACC OUNTED MONEY INTO BANKING CHANNELS. THIS DEVICE OF LOAN ENTRIES CONTINUES TO PLAGUE THE LEGITIMATE ECONOMY OF OUR COUNTRY. AS SEEN FROM THE FACTS NARRATED ABO VE, THE TRANSACTIONS HEREIN CLEARLY DO NOT INSPIRE CONFIDENCE AS BEING GENUINE AND ARE SHROUDED IN MYSTERY, AS TO WHY THE SO-CALLED CREDITORS WOULD LEND SUCH H UGE UNSECURED, INTEREST FREE LOANS - THAT TOO WITHOUT ANY AGREEMENT. IN THE ABSE NCE OF THE SAME, THE CREDITORS FAIL THE TEST OF CREDITWORTHINESS AND THE TRANSACTI ONS FAIL THE TEST OF GENUINENESS. 5.11 IN MY CONSIDERED VIEW, THE TECHNICAL OBJECTION S RAISED BY THE APPELLANT IN RESPECT OF LOAN FROM M/S JALSAGAR COMMERCE PVT. LTD . ARE OF NO AVAIL TO THE APPELLANT DUE TO FOLLOWING UNDISPUTED FACTS:- I. IT IS UNDISPUTED FACT THAT THE INCOME TAX DEPART MENT HAS MADE TREMENDOUS INVESTIGATIONS IN SUCH SHELL COMPANIES O F KOLKATA, MUMBAI AND DELHI PROVIDING ACCOMMODATION ENTRY AND STATEMENTS MADE B Y SEVERAL ACCOMMODATION ENTRY PROVIDERS HAVE BECOME VIRTUALLY IN PUBLIC DOM AIN. IT IS NO ARGUMENT THAT THE AO DID NOT PROVIDE SUCH STATEMENT BEFORE THE AS SESSEMENT OR IN ANY OF THE NOTICES. THESE FACTS WERE WELL KNOWN TO THE APPELLA NT GROUP AND IGNORANCE IS MERE PRETENCE. II. MOREOVER, SUCH STATEMENTS ARE SO VOCAL AND UNDE NIABLE THAT AS MENTIONED IN SOME OF THE CASE LAWS ABOVE, CROSS-EXAMINATION O F SUCH ACCOMMODATION ENTRY PROVIDES BY THOUSANDS OF BENEFICIARIES ACROSS INDIA IS NEITHER PRACTICABLE NOR VIABLE AND THEREFORE UNCALLED FOR. III. IT IS UNDISPUTED FACT THAT IN THE STATEMENT DA TED 06.02.2014 SHRI ANAND SHARMA HAD ADMITTED TO BE ONE OF SUCH ACCOMMODATION ENTRY PROVIDERS. THE SUM AND SUBSTANCE OF THE SAID STATEMENT IS THAT THE CON CERN M/S JALSAGAR COMMERCE PVT. LTD. WAS ENGAGED IN THE ACTIVITIES OF PROVIDI NG ACCOMMODATION ENTRIES AND THE APPELLANT HAPPENED TO BE ONE OF SUCH BENEFICIAR Y OF SUCH CONCERN. IT IS ALSO ADMITTED FACT THAT SHRI ANAND SHARMA HAD BEEN RUNNI NG THE AFFAIR OF THE SAID COMPANY. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 88 V. THE STATEMENT OF SHRI ANAND SHARMA IN WHICH NAM E OF M/S JALSAGAR COMMERCE PVT. LTD. CANNOT BE COMPLETELY IGNORED SO LELY ON THE LEGAL GROUNDS RAISED BY THE APPELLANT. 5.12 IN VIEW OF ABOVE DISCUSSION, IT IS CLEAR THAT THE INCRIMINATING MATERIAL HAD BEEN FOUND DURING THE COURSE OF SEARCH OF ACCOMMODA TION ENTRY PROVIDER. FURTHER INCRIMINATING MATERIAL HAD BEEN GATHERED BY ISSUING COMMISSION TO DDIT (INV.) KOLKATA, DURING THE ASSESSMENT PROCEEDINGS AND ALL SUCH MATERIAL HAVE BEEN SHARED WITH THE APPELLANT AT LEAST DURING THE REMAN D REPORT PROCEEDING. IN VIEW OF NATION-WIDE KNOWN SCAM BY THE ACCOMMODATION ENTRY P ROVIDERS OF KOLKATA AND ELSEWHERE BURST BY THE INCOME TAX DEPARTMENT, THERE WAS NO NEED TO PROVIDE OPPORTUNITY FOR CROSS-EXAMINATION OF SAME ACCOMMODA TION ENTRY PROVIDERS. ANY WAY IN THE REJOINDER SUBMISSION TO REMAND REPORT TH E APPELLANT IS ABSOLUTELY SILIENT ON CROSS-EXAMINATION AND BY SUCH CONDUCT HE HAS FORGONE HIS RIGHT TO CROSS-EXAMINE. THEREFORE, THE PRINCIPLES OF NATURAL JUSTICE HAVE BEEN FOLLOWED. AS DISCUSSED IN PRECEDING PARAS, UNDER THE FACTS AND C IRCUMSTANCE OF THE CASE, IT COULD NOT BE SAID THAT AO DID NOT FOLLOWED THE BIND ING DECISION OF THE HONBLE SUPREME COURT AND THE HONBLE JURISDICTION COURT. T HEREFORE, IN VIEW OF ABOVE FACTS DISCUSSED IN PARA 4.1 & 4.4.7, 5.1 TO 5.3 AND LEGAL POSITION APPRISED IN PARA 5.5 TO 5.11 ABOVE, IT IS HELD THAT THE ADDITION MAD E BY THE AO ON ACCOUNT OF UNSECURED LOANS AMOUNTING TO RS. 12,36,49,999/- FRO M M/S JALSAGAR COMMERCE PVT. LTD. SUSTAINABLE AND THE SAME IS CONFIRMED. THUS THE ADDITION WAS CONFIRMED BASED ON THE REPORT OF THE DDIT (INV.) KOLKATA. WE FIND THAT THE REPORT OF THE DDIT (INV. ) KOLKATA IS ALSO BASED ON THE STATEMENTS OF VARIOUS PERSONS RECORDED DURING T HEIR INVESTIGATION AND THE STATEMENT OF SHRI ANAND SHARMA WAS ALSO SENT AL ONG WITH THE REPORT OF THE AO. THE LD. CIT (A) HAS CONFIRMED THE ADDITION BECAUSE OF THE REASON THAT THE STATEMENT OF SHRI ANAND SHARMA WAS VERY MU CH IN THE POSSESSION OF THE AO WHO HAS ADMITTED IN HIS STATEMENT THAT M/S. JALSAGAR COMMERCE PVT. LTD. WAS ENGAGED IN THE ACTIVITY OF PROVIDING ACCOM MODATION ENTRY. HOWEVER, WE FIND THAT M/S. JALSAGAR COMMERCE PVT. L TD IS NOT MANAGED OR ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 89 CONTROLLED BY SHRI ANAND SHARMA, RATHER THE COMPANY M/S. ROYAL CRYSTAL DEALERS PVT. LTD. WAS STATED TO HAVE BEEN OWNED BY SHRI ANAND SHARMA AND IN HIS STATEMENT DATED 6 TH FEBRUARY, 2014 SHRI ANAND SHARMA HAS STATED TO HAVE BEEN PROVIDING ENTRIES FROM M/S. ROYAL CRYSTAL DEALERS PVT. LTD. TO M/S. JALSAGAR COMMERCE PVT. LTD. THEREFORE, THERE IS NO ALLEGATION OR ANY ADMISSION IN THE STATEMENT OF SHRI ANAND SHARMA THA T HE HAS PROVIDED BOGUS LOAN ENTRY TO THE ASSESSEE OR ANY GROUP CONCERNS OF THE ASSESSEE. SINCE THE NAME OF M/S. JALSAGAR COMMERCE WAS CREPTED IN HIS S TATEMENT, THE AO HAS PRESUMED THAT THE LOAN PROVIDED BY M/S. JALSAGAR CO MMERCE PVT LTD IS NOTHING BUT THE BOGUS ACCOMMODATION ENTRY PROVIDED BY SHRI ANAND SHARMA THROUGH M/S. ROYAL CRYSTAL DEALERS PVT. LTD. THE A O HAS TRIED TO ESTABLISH THE NEXUS OF THE LOAN RECEIVED BY THE ASSESSEE THROUGH THE STATEMENT OF SHRI ANAND SHARMA WHERE HE HAS PURPORTED TO HAVE PROVIDE D THE ALLEGED ENTRY. SINCE THERE IS NO DIRECT ALLEGATION OR ADMISSION OF PROVIDING LOAN BY SHRI ANAND SHARMA TO THE ASSESSEE THROUGH M/S.ROYAL CRYS TAL DEALERS PVT. LTD., THEN EVEN IF THERE IS A POSSIBILITY OF BOGUS ACCOMM ODATION ENTRY ROUTED THROUGH ANOTHER INTERMEDIARY COMPANY M/S.JALSAGAR C OMMERCE PVT. LTD., IT REQUIRES A DEFINITE LINK OF THE TRANSACTIONS FROM M /S.ROYAL CRYSTAL DEALERS PVT. LTD. TO M/S.JALSAGAR COMMERCE PVT. LTD. AND TH EN THE LOAN TO THE ASSESSEE. ONCE THE CHAIN OF TRANSACTIONS AND FLOW OF MONEY FROM ONE ENTITY TO ANOTHER ENTITY AND FINALLY TO THE ASSESSEE HAS N OT BEEN ESTABLISHED, THEN THE ADDITION MADE MERELY ON SUSPICION, HOW SO STRON G IT MAY BE, IS NOT SUSTAINABLE. ON THE CONTRARY, WHEN THE ASSESSEE PR ODUCED ALL THE RELEVANT RECORD WHICH CONTAINS THEIR FINANCIAL STATEMENTS, B ANK ACCOUNTS STATEMENT OF LOAN CREDITOR, RETURN OF INCOME, ASSESSMENT ORDERS FRAMED UNDER SECTION 143(3), CONFIRMATION OF THE LOAN CREDITOR, THEN A P ROPER EXAMINATION COULD HAVE VERY WELL ESTABLISHED THE LINK, IF ANY, IN PRO VIDING THE ACCOMMODATION ENTRY FROM ONE ENTITY TO ANOTHER AND FINALLY TO THE ASSESSEE. HOWEVER, NO SUCH LINK WAS FOUND IN THE DOCUMENTS AND FINANCIAL STATEMENTS OF THESE COMPANIES, RATHER IN THE BANK ACCOUNT STATEMENT OF LOAN CREDITOR M/S. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 90 JALSAGAR COMMERCE PVT. LTD. THERE WAS NO SUSPICIOUS TRANSACTION OF RECEIVING ANY ENTRY OR ANY DEPOSIT OF AN EQUAL AMOUNT PRIOR T O GIVING THE LOAN TO THE ASSESSEE. THE ASSESSEE HAS PAID INTEREST TO THE CR EDITOR, WHICH WAS DULY ACCEPTED BY THE AO AS BUSINESS EXPENDITURE. UNDISP UTEDLY, THE ASSESSEE HAS PRODUCED THE INCOME-TAX RECORD OF THE LOAN CREDITOR , BANK STATEMENT, FINANCIAL STATEMENTS INCLUDING BALANCE SHEET, COPY OF ROC MASTER DATA SHOWING THE STATUS OF LOAN CREDITOR COMPANY AS ACT IVE, CONFIRMATION OF LOAN GIVEN TO THE ASSESSEE. FURTHER, THE AO ISSUED SUMM ONS AND ALSO GOT THE SUMMONS SERVED THROUGH DDIT KOLKATA UNDER SECTION 1 31 OF THE IT ACT WHICH WERE DULY RESPONDED BY THE LOAN CREDITOR. EXCEPT TH E STATEMENT OF SHRI ANAND SHARMA AND THE REPORT OF THE INVESTIGATION WI NG KOLKATA, THE AO HAS NOT BROUGHT ON RECORD ANY OTHER MATERIAL TO CONTROV ERT OR DISPROVE THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE LOAN CREDITOR WAS ASSESSED TO TAX AND THE AO CO MPLETED THE ASSESSMENT UNDER SECTION 143 (3) FOR VARIOUS ASSESSMENT YEARS WHICH ARE RELEVANT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE AO IN CASE OF LOAN CREDITOR HAS NOT DISTURBED THE TRANSACTIONS OF LOAN GIVEN BY THIS CO MPANY TO THE ASSESSEE. FROM THE FINANCIAL STATEMENTS OF THE LOAN CREDITOR IT IS APPARENT THAT THE LOAN CREDITOR WAS HAVING SUFFICIENT FUNDS TO ADVANCE THE LOAN AMOUNT TO THE ASSESSEE AND ONCE THE SAID FINANCIAL STATEMENTS WER E NOT DISTURBED, THEN THE CREDITWORTHINESS OF THE LOAN CREDITOR CANNOT BE DOU BTED WHEN IT WAS ACCEPTED IN THE ASSESSMENT ORDER PASSED UNDER SECTI ON 143(3) OF THE IT ACT. WE FURTHER NOTE THAT THE AO INSISTED THE ASSESSEE T O PRODUCE THE DIRECTORS OF THE LOAN PROVIDER COMPANY. THE ASSESSEE PRODUCED TH E AFFIDAVIT, AND THE NOTICES ISSUED BY THE AO UNDER SECTION 131 AND 133( 6) OF THE ACT WERE DULY COMPLIED WITH BY THE CREDITOR. THE STATEMENT OF TH E DIRECTOR OF M/S. ROYAL CRYSTAL DEALERS PVT. LTD. WAS ALSO RECORDED BY THE AO WHEREIN THE DIRECTOR HAS CONFIRMED THE TRANSACTION OF LOAN. THERE ARE V ARIOUS REPORTS OF THE DDIT KOLKATA WHICH ARE PLACED AT PAGES 406 TO 422 OF THE PAPER BOOK. WE FIND THAT ALL THESE REPORTS ARE BASED ON THE STATEMENTS RECORDED DURING THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 91 INVESTIGATION BUT NO DOCUMENTARY EVIDENCE WAS EITHE R GATHERED OR HAS BEEN REFERRED IN THESE REPORTS. THEREFORE, EVEN IF THES E REPORTS ARE TO BE TAKEN INTO CONSIDERATION, THESE ARE NOTHING BUT NARRATION OF THE STATEMENTS OF VARIOUS PERSONS TAKEN DURING THE INVESTIGATION. IT IS WELL SETTLED PRINCIPLE AS WELL AS THE DIRECTIONS OF THE CBDT ISSUED UNDER THE CIRCULARS THAT DURING THE COURSE OF INVESTIGATION, THE DEPARTMENT SHOULD CONC ENTRATE AND FOCUS ON COLLECTING DOCUMENTARY EVIDENCE DISCLOSING UNDISCLO SED INCOME INSTEAD OF OBTAINING THE STATEMENT AND THEN SUPPORT OF THEIR C LAIM MERELY ON THE BASIS OF THE STATEMENT. THEREFORE, THE STATEMENTS RECORD ED BY THE DDIT KOLKATA ARE ALSO NOT BASED ON ANY DOCUMENTARY EVIDENCE SO A S TO HAVE AN EVIDENTIARY VALUE FOR SUSTAINING THE ADDITIONS MADE BY THE AO. THE ENTIRE REPORT OF THE INVESTIGATION WING IS BASED ON STATEMENTS RECORDED DURING SURVEY AND SEARCH. ONCE THE ASSESSEE HAS PRODUCED THE DOCUMEN TARY EVIDENCE AND PARTICULARLY THE FINANCIAL STATEMENTS OF THE LOAN C REDITORS, THEIR BANK ACCOUNT STATEMENT, THEN IN THE ABSENCE OF ANY DISCREPANCY O R FAULT IN THESE FINANCIAL STATEMENTS OR IN THE BANK ACCOUNT STATEMENT TO REFL ECT THAT THE TRANSACTIONS IN QUESTION ARE NOTHING BUT BOGUS ACCOMMODATION ENT RIES, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE AS IT IS MERELY O N THE BASIS OF SURMISES AND CONJECTURES AND NOT ON ANY TANGIBLE MATERIAL DISCLO SING THE NON-GENUINENESS OF THE TRANSACTIONS. THE AO HAS NOT DISPUTED THE TR ANSACTIONS ROUTED THROUGH BANKING CHANNEL HAVING SUFFICIENT FUNDS WHICH IS AL SO SUPPORTED BY THE FINANCIAL STATEMENTS AND FURTHER THE ASSESSMENTS OF THE LOAN CREDITOR WERE COMPLETED UNDER SECTION 143(3). THE DETAILS OF LOA NS TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD., INTERESTS CREDITED/PAI D AND REPAYMENT OF LOAN AMOUNT AS WELL AS CLOSING BALANCE ARE AS UNDER :- NAME OF COMPANY AY OPENING BALANCE LOAN TAKEN DURING THE YEAR INTEREST CREDITED IN LOAN A/C DURING THE YEAR INTEREST CREDITED IN INTEREST PAID /PAYABLE A/C LOAN REPAYMENT/ TDS/TRANSFER IN PARTNER CAPITAL DURING THE YEAR CLOSING BALANCE JALSAGAR COMMERCE PRIVATE LTD 10-11 41,298 34,70,40,000 13,96,176 12,56,558 34,21 ,15,916 51,05,000 JALSAGAR COMMERCE PRIVATE LTD 11-12 51,05,000 77,18,70,000 16,71,599 15,04,439 77 ,18,37,160 53,05,000 ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 92 JALSAGAR COMMERCE PRIVATE LTD 12-13 53,05,000 78,95,00,000 1,07,08,434 96,37,591 31,72,80,655 47,85,95,188 JALSAGAR COMMERCE PRIVATE LTD 13-14 47,85,95,188 2,76,31,50,000 0 0 2,97,53,40,00 0 26,64,05,188 JALSAGAR COMMERCE PRIVATE LTD 14-15 26,64,05,188 97,34,50,000 0 0 1,24,03,55,188 (5,00,000) JALSAGAR COMMERCE PRIVATE LTD 15-16 0 1,34,89,00,000 49,00,600 44,10,540 1,34,93, 90,060 0 JALSAGAR COMMERCE PRIVATE LTD 16-17 0 87,11,00,000 1,67,23,178 1,50,50,860 87,27, 72,318 0 ALL THESE DETAILS WERE BEFORE THE AO AS ALL THESE A SSESSMENT YEARS WERE PASSED BY THE AO PURSUANT TO THE SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE IT ACT. THUS IT IS CLEAR THAT FOR THE ASSESSMENT YEAR 2015-16 THERE WAS NIL BALANCE ON ACCOUNT OF LOAN TAKEN FROM M/S. JALSAGAR COMMERC E PVT. LTD. AND THE ENTIRE LOAN WAS ALREADY REPAID BY THE ASSESSEE. WE FURTHE R NOTE THAT IT IS NOT THE CASE OF REPAYMENT OF LOAN AFTER THE SEARCH ACTION ON 2 ND JULY, 2015 BUT THERE IS A REGULAR REPAYMENT OF LOAN FOR EACH YEAR AS IT IS EV IDENT FROM THE DETAILS REPRODUCED ABOVE. THEREFORE, THE TRANSACTIONS OF T AKING LOAN AND REPAYMENT CANNOT BE TREATED AS BOGUS ONCE THE ASSESSEE HAS BE EN REGULARLY REPAYING THE LOAN AMOUNT AND SMALL BALANCE WAS THERE AT THE END OF THE YEAR. ONCE THERE WAS NO BALANCE AT THE END OF THE YEAR ON THE LOAN A CCOUNT, THEN THE ADDITION CANNOT BE MADE BY TREATING THE LOAN TAKEN AND REPAI D AS BOGUS TRANSACTION. APART FROM THESE FACTS, THE ASSESSEE HAS ALSO MADE THE PAYMENT OF INTEREST WHICH WAS ALSO SUBJECTED TO TDS. THIS SHOWS THE GE NUINENESS OF THE TRANSACTIONS AND ALL THESE TRANSACTIONS HAVE TAKEN PLACE PRIOR TO THE DATE OF SEARCH AND DULY RECORDED IN THE BOOKS OF ACCOUNTS A ND ALSO SUBJECTED TO ASSESSMENT UNDER SECTION 143(3) FOR SOME OF THE ASS ESSMENT YEARS. THEREFORE, EVEN AS PER THE EVIDENCE PRODUCED BY THE ASSESSEE, THE ALLEGED SUSPICION OF THE AO WAS GOT DISPELLED AND IN THE ABSENCE OF ANY CONT RARY EVIDENCE EXCEPT THE STATEMENT WHICH IS NOT EVEN A CONCLUSIVE PROOF OF T RANSACTION OF BOGUS ENTRY TO THE ASSESSEE, THE ADDITIONS MADE BY THE AO ARE NOT SUSTAINABLE. THUS, THE TRIBUNAL HAS CONSIDERED THE FACT THAT THE A SSESSEE PRODUCED ALL THE RELEVANT DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM TO ESTABLISH THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 93 IDENTITY, CREDITWORTHINESS AND GENUINENESS OF UNSECU RED LOAN. WE FURTHER NOTE THAT IN SUPPORT OF ITS CLAIM, THE ASSESSEE PRO DUCED FOLLOWING DOCUMENTS: S. NO. PARTICULARS OF DOCUMENTS 1 COPY OF ACK. OF ITR OF AY 2010 - 11 2 COPY OF BALANCE SHEET AND ANNEXURE OF LOANS & ADVANCE OF AY 2010-11 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 4 CONFIRMATION OF LOAN GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF PARTY. 5 CONFIRMATION OF LOAN GIVEN TO ASSESSEE FROM BOOKS O F ACCOUNTS OF ASSESSEE. 6 COPY OF AFFIDAVIT OF SANGEETA SOMANI DIRECTOR OF CO MPANY. 7 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010 , 31 - 03 - 2011,31-03-2012, 31-03-2013, 31-03-2014,31-03-2015 AND 31-03-2016 8 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2005-06, AY 2007-08, AY 2011-12, AY 2012- 13 AND 2014-15. 9 COPY OF ROC MASTER DATA. 10 COPY OF PAN CARD. THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE CORRECTNESS OF THE EVIDENCE FILED BY THE ASSESSEE RATHER ALL THESE RECORDS WAS SUBJECTED TO THE SCRUTINY ASSESSME NT IN THE CASE OF THE LOAN CREDITOR, THEREFORE, ONCE THE DEPARTMENT HAS A CCEPTED FINANCIAL STATEMENT OF THE LOAN CREDITORS THEN THE SAME CANNO T BE DENIED WHILE EXAMINING GENUINENESS OF THE TRANSACTION IN THE HAN D OF THE ASSESSEE. HENCE, BY FOLLOWING THE EARLIER ORDER OF THIS TRIBUNA L IN THE CASE OF KOTA DALL MILL (SUPRA) WHEREIN THE ISSUE OF LOAN TAKEN F ROM M/S JALSAGAR ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 94 COMMERCE PVT. LTD. WAS EXAMINED AND DECIDED IN FAVOU R OF THE ASSESSEE, WE DELETE THE ADDITION MADE BY THE ASSESSING OFFICER IN THIS REGARD. 19. GROUND NO. 6 OF THE ASSESSEES APPEAL IS REGARD ING DENIAL OF BENEFIT OF TELESCOPING, RECYCLING AND ROTATION OF FUNDS BY REJECTING THE PEAK CREDIT THEORY. 20. WE HAVE CONSIDERED THE LD AR OF THE ASSESSEE AS WELL AS THE LD CIT- DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. SINCE THE ADDITIONS MADE BY THE ASSESSING OFFICER HAVE BEEN FINALLY DEL ETED BY US, THEREFORE, THIS GROUND OF THE ASSESSEES APPEAL IS BECOME INFR UCTUOUS. 21. IN THE CROSS APPEAL FOR THE A.Y. 2010-11, THE R EVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F RS. 2,02,50,000/- MADE BY THE AO U/S 68 OF THE IT ACT O N ACCOUNT OF UNEXPLAINED UNSECURED LOANS CLAIMED TO HAVE OBTAINE D BY THE ASSESSEE FROM M/S TEAC CONSULTANT PVT. LTD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS BY OBSERVING THAT THE ALLEGED LENDER M/S TEAC CONSU LTANT PVT. LTD IS NOT SHELL COMPANY WITHOUT CONSIDERING THE FINANC IAL STATEMENTS OF THESE COMPANIES. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CTI(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S TEAC CONSULTANT P VT. LTD MERELY FOR THE REASON THAT EVIDENCES IN THE FORM OF STATEMENT ON OATH OF THE RELEVANT ENTRY OPERATORS WERE NOT AVAIL ABLE ON RECORD. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 95 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S TEAC CONSULTANT P VT. LTD DESPITE THE FACT THAT THE DIRECTORS OR PRINCIPAL OF FICERS OF THESE COMPANIES WERE NEVER PRODUCED BEFORE THE ASSESSING OFFICER FOR EXAMINATION DESPITE NUMBER OF OPPORTUNITIES PROVIDE D BY THE AO FOR PRODUCING AND ALSO IGNORING THE FACT THAT THE A SSESSEE NEITHER EXPRESSED ITS INABILITY IN PRODUCING THE LENDERS NO R PRODUCED THEM EITHER. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOAN CLAIMED TO HAVE OBTAINED FROM M/S TEAC CONSULTANT P VT. LTD MERELY BY OBSERVING THAT THE ASSESSEE HAS COOPERATE D IN ASSESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE TH E DIRECTORS OF LENDER COMPANIES AND SOME DIRECTORS/OFFICERS WERE A LSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT EVEN THE DIRECT ORS WHICH WERE PRODUCED BEFORE THE AO FAILED TO SUBSTANTIATE THE G ENUINENESS OF THE ALLEGED TRANSACTIONS. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CTI(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS BY OBSERVING THAT THE APPELLANT CANNOT BE FASTENED UPON THE BURDEN TO PRODUCE THE LENDERS BEFORE THE AO AND IN NOT CONSIDERING THE DECISION OF THE HONBLE SUPREME COU RT IN NAVODAYA CASTLE (P) LTD. VS CIT (2015) 56 TAXMANN.C OM 18(SC) WHEN THERE WERE GENUINE CONCERNS OF THE GENUINENESS OF THE TRANSACTIONS. THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 22. THE ONLY ISSUE INVOLVED IN THE REVENUES APPEAL IS THE LOAN TAKEN FROM M/S TEAC CONSULTANTS PVT. LTD. WAS DELETED BY TH E LD. CIT(A). THE LD. CIT-DR HAS SUBMITTED THAT AS PER THE REPORT OF THE INVESTIGATION WING, KOLKATA, THIS COMPANY WAS FOUND TO BE SHELL COMPANY. ONCE THE ASSESSING ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 96 OFFICER HAS BROUGHT ON RECORD THE REPORT OF THE INV ESTIGATION WING, KOLKATA TO PROVE THAT THE SAID COMPANY IS A SHELL COMPANY A ND ENGAGED IN PROVIDING BOGUS ACCOMMODATION ENTRY THEN THE ASSESS EE WAS DUTY BOUND TO DISCHARGE ITS ONUS OF PROVING THE GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE HAS FAILED TO PRODUCE THE PRINCIPAL OFFICE R OR THE DIRECTOR OF THE LOAN CREDITOR BEFORE THE ASSESSING OFFICER FOR EXAM INATION DESPITE VARIOUS OPPORTUNITIES GIVEN BY THE ASSESSING OFFICER. HE HA S RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NAVODAYA CASTLES PVT. LTD. 226 TAXMAN 190 AND THE SLP FILED BY THE ASSESSEE WAS DISMISSED BY THE HON'BLE SUPREME COURT REPORTED IN 230 TAXMAN 268 (HON'BLE SUPREME COURT) 23. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HA S SUBMITTED THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THIS TRIBUNAL IN THE CASE OF KOTA DALL MILL (SUPRA). HE HAS SUPPORTED THE ORDER OF THE LD. CIT(A ). 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT AN I DENTICAL ISSUE WAS CONSIDERED BY US IN THE CASE OF KOTA DALL MILL (SUP RA) IN PARA 15 AS UNDER: 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS MADE THE ADDITION ON ACCOUNT OF UNSECURED LOANS TAKEN FROM ALL THE PARTIES WHEREAS THE LD. CIT (A) HAS DELETED THE ADDITION ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 97 IN RESPECT OF THE LOANS TAKEN FROM M/S. BIRLA ARTS PVT. LTD., M/S. TEAC CONSULTANT PVT. LTD AND M/S. SANGAM DISTRIBUTORS PV T. LTD. AND CONFIRMED THE ADDITION MADE ON ACCOUNT OF LOAN TAKEN FROM M/S . JALSAGAR COMMERCE PVT. LTD. THE ISSUE OF ADDITION MADE IN R ESPECT OF THE UNSECURED LOANS TAKEN FROM M/S. JALSAGAR COMMERCE P VT. LTD. WAS CONSIDERED AND DECIDED BY US IN THE ASSESSEES APPE AL. THE REVENUE IS AGGRIEVED BY THE ORDER OF THE LD. CIT (A) AS THE UN SECURED LOANS TAKEN FROM THESE THREE COMPANIES WERE DELETED ON THE GROU ND THAT THE AO WAS NOT HAVING ANY MATERIAL TO SUBSTANTIATE THAT THESE COMPANIES ARE CONTROLLED BY SO CALLED ENTRY OPERATORS. THE RELEV ANT FINDING OF THE LD. CIT (A) IN PARA 6.1 TO 6.14 ARE AS UNDER : 6.1 AS DISCUSSED IN PARA 4.4.8 ABOVE, IN RESPECT OF THESE THREE LENDERS NAMELY M/S BIRLA ARTS PRIVATE LIMITED, M/S TEAC CON SULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBUTORS PRIVATE LIMITED ADVERSE FINDINGS ALONGWITH ELOQUENT EVIDENCES IN THE FORM OF STATEME NT ON OATH OF RELEVANT ENTRY OPERATORS ARE NOT VISIBLE IN THE REPORTS DATE D 28.11.2017 AND 06.12.2017 FROM INVESTIGATION DIRECTORATE, KOLKATA AND THEREFORE IT COULD NOT BE TREATED AS SHELL COMPANY. 6.2 NOW, COMING TO THE LOAN FROM M/S BIRLA ARTS PRI VATE LIMITED NO NOTICE UNDER SECTION 131 OR 133(6) OF THE ACT WAS I SSUED TO THIS COMPANY, EITHER BY THE AO OR BY THE CONCERNED AO OR BY THE D DIT (INV.) KOLKATA. THIS SHOWS THAT NO INDEPENDENT ENQUIRY WAS DONE BY THE AO TO ESTABLISH THAT THE SAID COMPANIES WERE SHELL COMPANIES, BLIND RELIANCE HAS BEEN PLACED BY THE AO ON THE INVESTIGATION REPORT OF THE DDIT, KOLKATA. ALSO, ON BARE PERUSAL OF THE ASSESSMENT ORDER, IT IS EVID ENT THAT THE NAME OF THE SAID COMPANIES DOES NOT APPEAR IN THE STATEMENT OF ANY OF THE ENTRY OPERATORS AS REPRODUCED BY THE AO IN THE ASSESSMENT ORDER. 6.3 AS FAR AS THE REMAINING LENDER COMPANIES NAMELY , M/S TEAC CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBU TORS PVT. LTD. ARE CONCERNED, IT IS EVIDENT FROM THE DOCUMENTS PLACED ON RECORD THAT NOTICE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 98 WAS ISSUED BY DDIT, KOLKATA U/S 131 TO THESE COMPAN IES WHICH WAS DULY COMPLIED WITH AND RELEVANT DOCUMENTS WERE FILED. TH ERE IS NO FACT ON RECORD THAT THE NOTICES REMAINED UNSERVED OR THESE COMPANIES WERE NOT FOUND EXISTENT ON THE GIVEN ADDRESSES. FURTHERMORE, AFFIDAVIT OF THE DIRECTORS WERE ALSO SUBMITTED WHEREIN THE DIRECTORS CONFIRMED PROVIDING UNSECURED LOAN TO THE APPELLANT AND SOURCE OF PROVI DING THE SAID LOAN. ALSO, IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT NO STATEMENT/EVIDENCE HAS BEEN RELIED UPON OR PROVIDED BY THE AO FOR SUBS TANTIATING THAT THESE COMPANIES ARE CONTROLLED BY THE SO-CALLED ENTRY OPE RATORS. 6.4 FOR THESE THREE CREDITORS NAMELY, M/S BIRLA AR TS PRIVATE LIMITED, M/S TEAC CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBUTORS PRIVATE LIMITED, THE APPELLANT IN DISCHARGE OF ITS ONUS U/S 68 OF THE ACT HAS FILED CONFIRMATION OF ACCOUNTS AS WELL AS BANK STATEMENT REFLECTING THE TRANSACTIONS WITH OTHER SUBSTANTIATING DOCUMENTS AL ONG WITH ASSESSMENT ORDERS IN CASE OF LENDER COMPANIES, WHICH ARE AVAIL ABLE AT PAGE NO.443 TO 644 OF PB. FROM THESE DOCUMENTARY EVIDENCES PLACED ON RECORD, IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS IS ESTABLISHED. THERE IS NO GAIN SAYING THAT THE ONUS SQUARELY LIES ON THE A PPELLANT TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE C ASH CREDITS. IN THE CASE OF ADDL. CIT V. BAHRI BROS. (P) LTD. [1985] 154 ITR 244 (PAT), THE HON'BLE PATNA HIGH COURT HAS HELD ' IF THE LOANS ARE GIVEN BY AN ACCOUNT PAYING CHEQUE, IT AMOUNTS TO IDENTIFICATION OF THE PARTIES AND DISCHARGE OF BURDEN BY THE BORROWER .' IN VIEW OF THE ABOVE, IT IS CLEAR THAT APPELLANT DISCHARGED ITS BURDEN U/S 68 OF THE ACT. EVEN OTHER WISE, THERE IS NO ADVERSE FINDING OF ANY INVESTIGATION CONDUCTED BY T HE DEPARTMENT IN RELATION TO THESE COMPANIES. THEREFORE, IN THE ABSE NCE OF ANY INDEPENDENT INQUIRY AND ANY ADVERSE FINDINGS TO REBUT THE EVIDE NCES FILED BY THE APPELLANT, I FIND THAT THE ADDITION IN RESPECT OF U NSECURED LOANS FROM 03 COMPANIES NAMELY, M/S BIRLA ARTS PRIVATE LIMITED, M /S TEAC CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBUTORS PRIVATE LIMITED TOTALING TO RS. 12,36,40,000/- IS UNJUSTIFIED; FIRSTLY, ON THE GROUND THAT NO INQUIRIES ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 99 WERE MADE TO REBUT THE EVIDENCES FILED BY THE APPEL LANT AND SECONDLY, ON THE GROUND THAT APPELLANT DULY DISCHARGED ITS BURDE N CASTED UPON U/S 68 OF THE ACT TO EXPLAIN NATURE AND SOURCE OF THE TRANSAC TIONS BY PROVING THE IDENTITY, CREDITWORTHINESS OF CREDITOR AND GENUINEN ESS OF THE TRANSACTION. IN PARTICULAR, NONE OF THE MATERIAL OR STATEMENTS HAVE BEEN PROVIDED IN THE ASSESSMENT ORDER WHEREIN NAMES OF THE SAID COMPANIE S ARE MENTIONED. NOTABLY, THE TRANSACTIONS WITH THE SAID FOUR COMPAN IES ARE DULY VERIFIABLE FROM CONFIRMATION OF ACCOUNTS PLACED AT PAGE NO. 45 3 TO 455, 532 TO 534 & 588 TO 589 OF PB WITH SUPPORTING BANK STATEMENTS PLACED AT PAGE NO. 444 TO 452, 521 TO 531 & 571 TO 587 PB AND HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS ONLY AND THUS, APPELLANT HAS DULY PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S. 6.5 FURTHERMORE, FROM THE PERUSAL OF DOCUMENTARY EV IDENCES SUBMITTED BY THE APPELLANT, IT IS SEEN THAT TRANSACTIONS HAVE BEEN DONE THROUGH BANKING CHANNELS AND ON THE DATE OF MAKING OF LOANS , THERE IS BALANCE AVAILABLE IN THE ACCOUNTS OF THE BORROWERS, WHICH P ROVES THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S. THERE IS NO CASE OF ANY CASH DEPOSITION IN THE ACCOUNT OF ANY OF THE CR EDITORS AT THE TIME OF ISSUING CHEQUES/RTGS IN FAVOUR OF THE ASSESSEE. THE REFORE, IN VIEW OF THE SETTLED JUDICIAL PRECEDENT IN CASE OF CIT V. VARIND ER RAWLLEY [2014] 366 ITR 232 (PUNJAB & HARYANA), CIT V. VIJAY KUMAR JAIN [2014] 221 TAXMAN 180, CIT V. VICTOR ELECTRODE S LTD. [2010] 329 ITR 271, ADDL. CIT V. BAHRI BROS. (P) LTD. [198 5] 154 ITR 244 (PAT) AND OTHERS AS REFERRED BY THE APPELLANT, I AM OF TH E CONSIDERED VIEW THAT APPELLANT DULY DISCHARGED ITS BURDEN CASTED UPON IT U/S 68 OF THE ACT. IT IS FURTHER SEEN THAT NO NOTICE U/S 131 OR 133(6) OF TH E IT ACT WERE ISSUED TO M/S BIRLA ARTS PRIVATE LIMITED, HOWEVER AS FAR AS T HE COMPANIES M/S TEAC CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBU TORS PRIVATE LIMITED ARE CONCERNED, THESE HAVE DULY REPLIED TO THE NOTIC ES ISSUED BY DCIT/DDIT(INV.), KOLKATA IN RESPECT OF COMMISSION, THESE FACTS REMAIN UNCONTROVERTED BY THE AO. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 100 6.6 THE AO DURING ASSESSMENT PROCEEDINGS TOOK NEGAT IVE INFERENCE FROM THE STATEMENT OF SHRI RAJENDRA AGARWAL RECORDE D DURING SEARCH U/S 132(4) WHEREIN HE MADE DISCLOSURE IN RESPECT OF LON G TERM CAPITAL GAIN IN HIS INDIVIDUAL HANDS. I HAVE GONE THROUGH THE ST ATEMENT OF SHRI RAJENDRA AGARWAL AND HIS DISCLOSURE MADE IN HIS STA TEMENT, NOTABLY, THE DISCLOSURE MADE WAS IN HIS PERSONAL CAPACITY ONLY A ND WITH RESPECT TO LTCG ONLY AND NOT IN RESPECT OF ANY OTHER TRANSACTI ONS BE IT BE RECEIPT OF UNSECURED LOANS. FURTHER, RAJENDRA AGARWAL IS NOT A PARTNER IN THE APPELLANT FIRM. THEREFORE, I FIND THAT IN THE ABSEN CE OF ANY NEXUS OF THE STATEMENT OF SHRI RAJENDRA AGARWAL WITH THE APPELLA NT FIRM OR ITS TOTAL INCOME, THIS BASIS OF ADDITION ADOPTED BY THE AO IS FARFETCHED & CANNOT BE CONCURRED. 6.7 IT IS FURTHER SEEN THAT AO HAS NOT BROUGHT ANY SPECIFIC DEFECT / DISCREPANCIES IN THE DIRECT EVIDENCE BROUGHT ON REC ORD BY THE APPELLANT. THE AO HAS OBSERVED THAT ON THE DATE OF DEBIT IN TH E ACCOUNT STATEMENT OF CREDITOR, THERE IS CORRESPONDING CREDIT ENTRY OF EQ UAL AMOUNT, HOWEVER, THIS OBSERVATION OF THE AO IS ITSELF NOT SUFFICIENT TO P ROVE BEYOND DOUBT THAT APPELLANT ROUTED ITS UNACCOUNTED INCOME BY THESE CO MPANIES RATHER IT PROVES THE SOURCE IN THE HANDS OF THE APPELLANT. IT IS USUAL BUSINESS PRACTICE, WHILE MAKING LOANS TO PARTY, FUNDS ARE RE QUIRED TO BE ARRANGED BY THE LENDER, THEREFORE REFLECTION OF SUCH ENTRIES IN BANK STATEMENT DOESNT LEAD TO DRAW ANY ADVERSE INFERENCE AGAINST THE APPE LLANT. NEEDLESS TO SAY THAT APPELLANT IS NOT REQUIRED TO PROVE SOURCE OF T HE SOURCE U/S 68 OF THE ACT IN VIEW OF THE SETTLED JUDICIAL PRECEDENTS. 6.8 IN MY CONSIDERED VIEW, MERE NOT BELIEVING AN EX PLANATION CANNOT LEAD TO A CONCLUSION THAT THE BORROWED AMOUNT IS TH E INCOME OF THE ASSESSEE (BORROWER) FROM SOME UNDISCLOSED SOURCES W HILE IN THE PRESENT CASE, NO EVIDENCES OF ANY GENERATION OF UNDISCLOSED INCOME OR THEIR UTILIZATION IN THE FORM OF UNSECURED LOANS HAS BEEN FOUND AND BROUGHT ON RECORD. 6.9 SIMILARLY, I FIND THAT VARIOUS OBSERVATIONS OF THE AO ON BALANCE SHEET / ITR OF THE LENDER COMPANIES ARE MISCONSTRUE D, MISCONCEIVED AND ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 101 ARE FACTUALLY INCORRECT. I FURTHER FIND THAT THE VA RIOUS OTHER ALLEGATIONS / OBSERVATIONS OF THE AO ARE MISCONCEIVED AND PREMATU RE ONLY AND IN VIEW THE APPELLANTS SUBMISSION MADE IN PARA 10 AS REPRO DUCED IN PARA NO. 4.2 OF THIS ORDER, THE SAME DOES NOT LEAD ANY WHERE TO DRAW ANY ADVERSE INFERENCE AGAINST THE APPELLANT. FURTHER, THE VARIO US CASE LAWS RELIED UPON BY THE AO ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE AS CATEGORICALLY COUNTERED BY THE APPELLANT IN HIS WRI TTEN SUBMISSIONS AS MENTIONED IN PARA 16 AS REPRODUCED IN PARA NO. 4.2A BOVE. 6.10 IT IS SETTLED JUDICIAL PRECEDENTS THAT UNDER T HE INCOME TAX LAW PRIMARY BURDEN U/S 68 OF THE ACT IS ON THE APPELLAN T AND ONCE THIS BURDEN IS DISCHARGED U/S 68 OF THE ACT, NO ADDITION U/S 68 OF THE ACT IS JUSTIFIABLE IN THE HANDS OF THE ASSESSEE IN VIEW OF THE JUDGMEN TS IN CASE OF SHREE BARKHA SYNTHETICS LTD. V/S ASSISTANT COMMISSIONER O F INCOME-TAX (2006) 155 TAXMAN 289 (RAJ.), COMMISSIONER OF INCOME-TAX, JAIPUR -II V. MORANI AUTOMOTIVES (P.) LTD. [2014] 2 64 CTR 86 (RAJASTHAN-HC), CIT V. ORISSA CORPN. (P.) LTD. [198 6) 159 ITR 78/25 TAXMAN 80F (SC), COMMISSIONER OF INCOME-TAX V/S MAR K HOSPITALS (P.) LTD. [2015] 373 ITR 115 (MADRAS)(MAG.), COMMISSIONE R OF INCOME-TAX, AJMER V. JAI KUMAR BAKLIWAL [2014] 366 ITR 217 (RAJ ASTHAN), CIT V/S. CREATIVE WORLD TELEFILMS LTD (2011) 333 ITR 100 (BO M), COMMISSIONER OF INCOME-TAX-I V. PATEL RAMNIKLAL HIRJI [2014] 222 TAXMAN 15 (GUJARAT)(MAG.), PRINCIPAL COMMISSIONER OF INCOME-T AX-4 V. G & G PHARMA INDIA LTD. [2016] 384 ITR 147 (DELHI) REFERR ED ABOVE WHICH HAVE BEEN ALSO BEEN FOLLOWED RECENTLY BY HONBLE DELHI T RIBUNAL IN CASE OF ITO VS. SOFTLINE CREATIONS (P) LTD. IN ITA NO. 744/ DEL/2012 VIDE ITS ORDER DATED 10.02.2016. FURTHER, HONBLE APEX COURT AS WE LL AS HIGH COURT HAS HELD THAT ONCE THE IDENTITY OF CREDITOR IS ESTABLIS HED, THE DEPARTMENT IS FREE TO REOPEN THE ASSESSMENT OF CREDITOR AND NO ADDITIO N CAN BE MADE IN THE HAND OF BORROWER AS RIGHTLY HELD IN CASE OF CIT V/S LOVELY EXPORTS PVT. LTD. [2008] 216 CTR 195 (SC), COMMISSIONER OF INCOM E-TAX V. ROCK FORT METAL & MINERALS LTD. [2011] 198 TAXMAN 497 (DELHI) , DIVINE LEASING & FINANCE LIMITED [2008] 299 ITR 268 (DELHI) CIT V. ORISSA CORPORATION ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 102 (P.) LTD. [1986) 159 ITR 78/25 TAXMAN 80F (SC) AND OTHERS ON THIS QUESTION OF LAW. 6.11 FURTHER, POWER TO CALL FOR INFORMATION/PRODUCT ION OF EVIDENCES OR ENFORCING ATTENDANCE UNDER THE LAW IS GIVEN TO THE INCOME TAX AUTHORITIES ONLY AND THEREFORE, IN VIEW OF THE JUDGMENT CIT V/S VICTOR ELECTRODES LTD. [2010] 329 ITR 271, THE APPELLANT CANNOT BE FASTENE D UPON THE BURDEN TO PRODUCE THE LENDERS BEFORE THE ASSESSING AUTHORITIE S THOUGH IN THE INSTANCE CASE, APPELLANT HAS COOPERATED IN ASSESSMENT BY SHO WING HIS WILLINGNESS TO PRODUCE THE DIRECTORS OF LENDER COMPANIES AND SOME DIRECTORS/OFFICER WERE ALSO PRODUCED BEFORE THE AO. THUS, IN VIEW OF THE J UDICIAL PRECEDENTS REFERRED ABOVE, UNDER THE FACTS AND CIRCUMSTANCES O F THE PRESENT CASE IT IS UNTENABLE TO MAKE ANY ADDITION FOR ALLEGED NON-APPE ARANCE BY THE CONCERNED PERSON BEFORE THE AUTHORITIES THOUGH THEY COMPLIED WITH THE NOTICES/SUMMON ISSUED TO THEM. 6.12 IN THE PRESENT CASE IN HAND, I FIND THAT AO AS KED ASSESSEE TO PRODUCE LENDER COMPANIES WITHOUT VERIFYING THE FACT S OF LENDING MONEY FROM RESPECTIVE JURISDICTION ASSESSING OFFICER AND WITHOUT VERIFYING THEIR RETURNS OF INCOME AND BALANCE SHEET WHEREIN THESE T RANSACTIONS ARE REPORTED, ACCORDINGLY THE AO HAS NOT FOLLOWED THE P RINCIPLES LAID DOWN UNDER SECTION 68 OF THE ACT. THE HONBLE GUJRAT HIG H COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. RANCHHOD JIVABHAI NAK HAVA [2012] 21 TAXMANN.COM 159 (GUJ.) HAS HELD THAT:- ONCE THE ASSESSEE HAS ESTABLISHED THAT HE HAS TAKEN MONEY BY WAY OF ACCOUNT PAYEE CHEQUES FROM THE LENDERS WHO ARE A LL INCOME TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLOSED, THE INITIA L BURDEN UNDER SECTION 68 WAS DISCHARGED. IT FURTHER APPEARS THAT THE ASSESSEE HAD ALSO PRODUCED CONFIRMATION LETTERS GIVEN BY THOSE L ENDERS. [PARA 15] ONCE THE ASSESSING OFFICER GETS HOLD OF THE PAN OF THE LENDERS, IT WAS HIS DUTY TO ASCERTAIN FROM THE ASSESSING OFFICE R OF THOSE LENDERS, WHETHER IN THEIR RESPECTIVE RETURNS THEY H AD SHOWN EXISTENCE OF SUCH AMOUNT OF MONEY AND HAD FURTHER S HOWN THAT THOSE AMOUNT OF MONEY HAD BEEN LENT TO THE ASSESSEE . IF BEFORE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 103 VERIFYING OF SUCH FACT FROM THE ASSESSING OFFICER O F THE LENDERS OF THE ASSESSEE, THE ASSESSING OFFICER DECIDES TO EXAM INE THE LENDERS AND ASKS THE ASSESSEE TO FURTHER PROVE THE GENUINEN ESS AND CREDITWORTHINESS OF THE TRANSACTION, THE ASSESSING OFFICER DOES NOT FOLLOW THE PRINCIPLE LAID DOWN UNDER SECTION 68. [P ARA 16] IN THE INSTANCE CASE BEFORE ME , THE AO HAS NOT FOL LOWED THE DUE PROCEDURE OF LAW U/S 68 OF THE ACT. THEREFORE, REQU IRING THE ASSESSEE TO PRODUCE THE DIRECTORS OF THE LENDER COMPANY WAS NOT LEGALLY TENABLE IN VIEW OF THE JUDGMENT OF GUJRAT HIGH COURT (SUPRA). 6.13 IT IS NOTED THAT NO CLINCHING EVIDENCES HAS BE EN BROUGHT ON RECORD THAT ANY UNACCOUNTED INCOME WAS ROUTED THROUGH UNSE CURED LOANS BY THE APPELLANT FIRM AS NO EVIDENCES AS TO RECEIPT/PAYMEN T OF CASH FOR RECEIPT OF UNSECURED LOANS WERE FOUND DURING SEARCH IN CASE OF THE APPELLANT. MERE SUSPICION HOWSOEVER STRONG CANNOT TAKE PLACE O F EVIDENCE. THUS, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DUR ING SEARCH TO REBUT THE EVIDENCES FILED BY THE APPELLANT, THE IMPUGNED ADDI TION MADE IN RESPECT OF UNSECURED LOAN U/S 68 OF THE ACT IS LEGALLY UNTE NABLE AND UNJUSTIFIED. 6.14 IN VIEW OF THE ABOVE DISCUSSION OF RELEVANT F ACTS AND FOLLOWING THE SEVERAL RATIOS ON THE SUBJECT FROM HONBLE APEX COU RT, HIGH COURTS INCLUDING JURISDICTIONAL HIGH COURTS, TRIBUNALS INC LUDING JURISDICTIONAL TRIBUNALS, THE IMPUGNED ADDITION IN RESPECT OF UNSE CURED LOANS FROM 03 COMPANIES NAMELY, M/S BIRLA ARTS PRIVATE LIMITED, M /S TEAC CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBUTORS PRIVATE LIMITED TOTALING TO RS.12,36,40,000/- IS NOT SUSTAINABLE AND HENCE THE SAME STANDS DELETED. THUS THE LD. CIT (A) WAS OF THE VIEW THAT SO FAR AS THE LOANS TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD., THE AO WAS HAVING THE STATEMENT OF SHRI ANAND SHARMA TO THE EFFECT THAT THE SAID COMPANY WA S INVOLVED IN PROVIDING ACCOMMODATION ENTRY AND CONTROLLED BY THE ENTRY OPERATOR WHEREAS IN RESPECT OF THESE THREE COMPANIES THE AO WAS NOT HAVING ANY DOCUMENT OR EVEN THE STATEMENT OF ANY PERSON WHO AR E ENTRY OPERATORS AND CONTROLLING THESE COMPANIES SO AS TO ESTABLISH THAT THE TRANSACTIONS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 104 ARE IN THE NATURE OF BOGUS ACCOMMODATION ENTRIES. WE HAVE ALREADY CONSIDERED THE ISSUE ON MERITS IN RESPECT OF THE AD DITION MADE ON ACCOUNT OF UNSECURED LOANS TAKEN FROM M/S. JALSAGAR COMMERC E PVT. LTD. WHEREAS THE LOANS TAKEN FROM THESE COMPANIES ARE EVEN AS PE R THE REVENUE ON BETTER FOOTINGS OF GENUINENESS THAN M/S. JALSAGAR C OMMERCE PVT. LTD. THERE IS NO DISPUTE THAT THE AO WAS NOT HAVING ANY EVIDENCE OR EVEN ANY STATEMENT TO IMPUGN THE TRANSACTIONS AS BOGUS ACCOM MODATION ENTRIES. FURTHER, THE ASSESSEE HAS PRODUCED ALL THE RELEVANT SUPPORTING DOCUMENTARY EVIDENCE AS WE HAVE REPRODUCED IN THE F OREGOING PARAS AS REFERRED BY THE LD. A/R OF THE ASSESSEE AND THESE C REDITOR COMPANIES WERE SUBJECT TO REGULAR ASSESSMENTS AND SCRUTINY ASSESSM ENTS UNDER SECTION 143(3) WERE COMPLETED BY THE DEPARTMENT AS PER THE DETAILS REPRODUCED. THEREFORE, ONCE THESE CREDITOR COMPANIES ARE REGULA RLY ASSESSED TO TAX AND DULY EXAMINED BY THE DEPARTMENT AT THE SCRUTINY ASSESSMENTS, THEN THE TRANSACTIONS OF LOANS CANNOT BE HELD AS BOGUS W HEN THE SAME WERE ACCEPTED IN THE HANDS OF THE CREDITORS. WE FURTHER NOTE THAT THESE COMPANIES WERE HAVING SUFFICIENT FUNDS IN THE SHAPE OF SHARE CAPITAL, RESERVES AND SURPLUS. THE DETAILS OF THE SHARE CAP ITALS OF THESE COMPANIES ARE AS UNDER :- M/S BIRLA ARTS PVT. LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 1998-1999 1997-1998 12,90,000 1999-2000 1998-1999 16,82,000 2003-2004 2002-2003 50,00,000 2004-2005 2003-2004 2,74,40,000 2005-2006 2004-2005 3,69,50,000 2007-2008 2006-2007 3,26,00,000 2010-2011 2009-2010 250,00,000 2011-2012 2010-2011 20,00,000 2014-2015 2013-2014 67,57,37,000 ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 105 M/S TEAC CONSULTANTS PVT. LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 1996-1997 1995-1996 26,00,000 2001-2002 2000-2001 73,98,000 2003-2004 2002-2003 1,00,00,000 2005-2006 2004-2005 4,85,50,000 2007-2008 2005-2006 3,35,00,000 2010-2011 2009-2010 2,76,00,000 2011-2012 2010-2011 94,00,000 M/S SANGAM DISTRIBUTORS PVT. LTD . ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2005-2006 2004-2005 2,47,50,000 2006-2007 2005-2006 10,50,00,000 2007-2008 2006-2007 7,93,50,000 2011-2012 2010-2011 2,50,00,000 2013-2014 2012-2013 13,00,00,000 THESE DETAILS CLEARLY SHOW THAT AT THE TIME OF GRAN TING OF LOANS TO THE ASSESSEE THESE COMPANIES WERE HAVING SUFFICIENT FUN DS. FURTHER, WE HAVE ALREADY RECORDED THE DETAILS OF REPAYMENT MADE BY T HE ASSESSEE OF THESE LOANS AND ONCE REGULAR REPAYMENT WAS THERE EVEN PRI OR TO THE DATE OF SEARCH, THEN THE TRANSACTIONS CANNOT BE DOUBTED AS NOTHING CAN BE ACHIEVED BY TAKING THE LOAN AND THEN REPAYING THE S AME THROUGH BANKING CHANNEL EVEN IF THERE IS CORRESPONDING CHANNELIZATI ON OF CASH. AS WE HAVE DISCUSSED EARLIER THAT THE AO HAS NOT POINTED OUT A NY DISCREPANCY IN THE FINANCIAL STATEMENTS OR IN THE BANK ACCOUNT STATEME NTS OF THE LOAN CREDITORS TO SHOW THAT THERE WAS DEPOSIT OR INTRODU CTION OF THE CASH PRIOR TO GIVING THE LOAN TO THE ASSESSEE, ACCORDINGLY, I N VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS OUR FINDING ON THE ISSUE OF ADDITION IN ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 106 CASE OF M/S. JALSAGAR COMMERCE PVT. LTD., WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF LD. CIT (A) QUA THIS ISS UE. GROUND NOS. 7 TO 11 OF THE REVENUE ARE REGARDING TH E ADDITION OF RS. 42,47,25,000/- MADE ON ACCOUNT OF PARTNERS CAPITAL RECEIVED FROM FOUR PARTIES WAS DELETED BY THE LD. CIT (A) ON THE SIMIL AR GROUND THAT THE AO WAS NOT HAVING ANY EVIDENCE OR MATERIAL TO ESTABLIS H THAT THE TRANSACTIONS ARE BOGUS ACCOMMODATION ENTRIES. THUS, THE TRIBUNAL IN THE CASE OF KOTA DALL MILL (SUP RA) HAS EXAMINED ALL THE RELEVANT DETAILS INCLUDING THE FUNDS AVAILABLE WITH TEAC CONSULTANTS PVT. LTD., WHICH IS SUFFICIENT FOR ADVANCEMENT OF LO AN TO THE ASSESSEE. FURTHER THE LD. CIT(A) HAS DELETED THE ADDITION ON T HE BASIS THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON R ECORD TO CONTROVERT THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE EVEN THE STATEMENT OF ALLEGED ENTRY OPERATOR WAS NOT IN POSSESSION OF THE ASSESSIN G OFFICER. THE FINDING OF THE LD. CIT(A) IN THE CASE UNDER CONSIDERATION I S IDENTICAL AS IN THE CASE OF KOTA DALL MILL (SUPRA), THEREFORE, FOLLOWING THE EARLIER ORDER OF THIS TRIBUNAL, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN T HE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. HENCE, THE APPEAL OF THE REVENUE IS DISMISSED. 25. IN THE APPEAL FOR THE A.Y. 2011-12, THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS . 42,15,21,050/- MADE BY THE AO U/S 68 OF THE IT ACT ON ACCOUNT OF U NEXPLAINED ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 107 UNSECURED LOANS CLAIMED TO HAVE OBTAINED BY THE ASS ESSEE FROM M/S BIRLA ARTS PVT. LTD. AND TEAC CONSULTANT PVT. L TD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CTI(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS BY OBSERVING THAT THE ALLEGED LENDER M/S BIRLA ARTS PV T. LTD. AND M/S TEAC CONSULTANT PVT. LTD ARE NOT SHELL COMPANY WITH OUT CONSIDERING THE FINANCIAL STATEMENTS OF THESE COMPANIES. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CTI(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD AND M/S TEAC CONSULTANT PVT. LTD MERELY FOR THE REASON THAT EVID ENCES IN THE FORM OF STATEMENT ON OATH OF THE RELEVANT ENTRY OPERATOR S WERE NOT AVAILABLE ON RECORD. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD AND M/S TEAC CONSULTANT PVT. LTD. DESPITE THE FACT THAT THE DIRE CTORS OR PRINCIPAL OFFICERS OF THESE COMPANIES WERE NEVER PRODUCED BEF ORE THE ASSESSING OFFICER FOR EXAMINATION DESPITE NUMBER OF OPPORTUNITIES PROVIDED BY THE AO FOR PRODUCING AND ALSO IGNORING THE FACT THAT THE ASSESSEE NEITHER EXPRESSED ITS INABILITY IN PRO DUCING THE LENDERS NOR PRODUCED THEM EITHER. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOAN CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD. AND M/S TEAC CONSULTANT PVT. LTD MERELY BY OBSERVING THAT T HE ASSESSEE HAS COOPERATED IN ASSESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE THE DIRECTORS OF LENDER COMPANIES AND SOME DIRECTOR S/OFFICER WERE ALSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT E VEN THE DIRECTORS WHICH WERE PRODUCED BEFORE THE AO FAILED TO SUBSTANTIATE THE GENUINENESS OF THE ALLEGED TRANSACTIONS. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CTI(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS BY OBSERVING THAT THE APPELLANT CANNOT BE FASTENED UPO N THE BURDEN TO PRODUCE THE LENDERS BEFORE THE AO AND IN NOT CON SIDERING THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 108 DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA C ASTLE (P) LTD VS CIT (2015) 56 TAXMANN.COM 18(SC) WHEN THERE WERE GENUINE CONCERNS OF THE GENUINENESS OF THE TRANSACTIONS. THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 26. THE ONLY ISSUE INVOLVED IN THE REVENUES APPEAL IS THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF THE UNSECURE D LOAN FROM M/S BIRLA ARTS PVT. LTD. AND M/S TEAC CONSULTANTS PVT. LTD., WA S DELETED BY THE LD. CIT(A) ON THE IDENTICAL REASONING THAT THE ASSESSING OFFICER WAS NOT HAVING ANY MATERIAL OR EVEN THE STATEMENT OF ALLEGED ENTRY OPERATOR TO SUBSTANTIATE THE ADDITION. 27. THE LD. CIT-DR HAS SUBMITTED THAT THE COMPANY WAS FOUND TO BE A SHELL COMPANY AND THE ASSESSEE WAS ASKED BY THE ASSE SSING OFFICER TO PRODUCE THE PRINCIPAL OFFICER/ DIRECTOR OF THE COMP ANY FOR EXAMINATION BUT THE ASSESSEE FAILED TO DISCHARGE ITS ONUS. HE HAS R EITERATED ITS CONTENTION AS RAISED IN THE CASE OF M/S TEAC CONSULTANTS PVT. L TD. 28. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HA S REITERATED ITS CONTENTION AS IN THE CASE OF M/S TEAC CONSULTANTS PV T. LTD. AND SUBMITTED THAT THE ASSESSEE HAS PRODUCED ALL THE RELEVANT DOC UMENTARY EVIDENCE IN SUPPORT OF THE CLAIM WHICH HAS NOT BEEN CONTROVERTED BY THE ASSESSING OFFICER. HE HAS SUPPORTED THE ORDER OF THE LD. CIT(A ). ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 109 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE FACTS AND CIRCUMSTANCES RELE VANT TO THE ISSUE OF LOAN TAKEN FROM M/S BIRLA ARMS PVT. LTD., WHICH WAS T REATED AS BOGUS ACCOMMODATION ENTRY BY THE ASSESSING OFFICER BUT WAS DELETED BY THE LD. CIT(A) ARE IDENTICAL AS IN THE CASE OF M/S TEAC CONSU LTANTS PVT. LTD. FOR THE A.Y. 2010-11. WE HAVE ALREADY REPRODUCED OUR FINDIN G IN THE CASE OF KOTA DALL MILL (SUPRA) WHEREIN M/S BIRLA ARTS PVT. LTD. WA S ONE OF THE LOAN CREDITOR, ACCORDINGLY IN VIEW OF OUR FINDING AS REPR ODUCED (SUPRA), WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF TH E LD. CIT(A) QUA THIS ISSUE. HENCE, THE REVENUES APPEAL IS DISMISSED. 30. IN THE CROSS OBJECTION OF THE ASSESSEE FOR THE A.Y. 2011-12, FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ORDER PASSED U/S 153A READ WITH SECTION 143(3) OF T HE INCOME TAX ACT, 1961 IS BAD IN LAW, VOID-AB-INITIO, AND DESERV ES TO BE ANNULLED AS THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS NOT ABATED AS ON THE DATE OF SEARCH AND CIT(A) ERRED IN HOLDIN G THAT THE CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED IN VI EW OF SLPS ADMITTED IN VARIOUS CASES. THE LD. CIT(A) FURTHER E RRED IN HOLDING THAT THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PER RELEVANT GROUND OF APPEAL HENCE THE ISSUE REMAINS FOR ACADEM IC DISCUSSION ONLY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN NOT DECLARING THE ASSESSMENT ORDER AS BAD IN LAW AND VOID AN INITIO. IT IS CONTENDED THAT THE A.O. P ASSED THE ASSESSMENT ORDER AGAINST THE DOCTRINE OF AUDI ALTE RM PARTEM, VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 110 OPPORTUNITY OF CROSS EXAMINATION OF THE ALLEGED ACC OMMODATION ENTRY PROVIDERS, THEREFORE, THE ASSESSMENT ORDER OU GHT TO HOLD AS BAD IN LAW AND DESERVES TO BE ANNULLED. THE FINDING S OF THE LD. CIT(A) IN THIS REGARD ARE PERVERSE AND ERRONEOUS. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING OF APPEA L. 31. GROUND NO. 1 OF THE C.O. IS REGARDING THE ADDIT ION MADE WITHOUT ANY INCRIMINATING MATERIAL AS THE ASSESSMENT WAS NOT ABA TED DUE TO THE SEARCH AND SEIZURE. THIS ISSUE HAS BEEN CONSIDERED BY US WH ILE DECIDING GROUND NO. 1 OF THE ASSESSEES APPEAL FOR THE A.Y. 2010-11 . ACCORDINGLY, IN VIEW OF OUR FINDING ON THIS ISSUE FOR THE A.Y. 2010-11, GRO UND NO. 1 OF THE ASSESSEES C.O. IS ALLOWED. 32. GROUND NO. 2 OF THE ASSESSEES C.O. IS REGARDIN G NON AFFORDING THE OPPORTUNITY OF CROSS EXAMINATION AND CONSEQUENTLY V IOLATION OF PRINCIPLES OF NATURAL JUSTICE. WE HAVE HEARD THE LD AR AS WELL AS THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AN IDEN TICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY US IN GROUND NO. 2 OF THE ASSESSEES APPEAL FOR THE A.Y. 2010-11. IN VIEW OF OUR FINDING ON THIS ISS UE FOR THE A.Y. 2010-11, GROUND NO. 2 OF THE C.O. OF THE ASSESSEE STANDS ALL OWED. 33. IN THE APPEAL FOR THE A.Y. 2012-13, THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS . 24,66,00,000/- ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 111 MADE BY THE AO U/S 68 OF THE IT ACT ON ACCOUNT OF U NEXPLAINED UNSECURED LOANS CLAIMED TO HAVE OBTAINED BY THE ASS ESSEE FROM M/S BIRLA ARTS PVT. LTD. AND TEAC CONSULTANT PVT. L TD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CTI(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS BY OBSERVING THAT THE ALLEGED LENDER M/S BIRLA ARTS PV T. LTD. AND M/S TEAC CONSULTANT PVT. LTD ARE NOT SHELL COMPANY WITH OUT CONSIDERING THE FINANCIAL STATEMENTS OF THESE COMPANIES. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CTI(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD AND M/S TEAC CONSULTANT PVT. LTD MERELY FOR THE REASON THAT EVID ENCES IN THE FORM OF STATEMENT ON OATH OF THE RELEVANT ENTRY OPERATOR S WERE NOT AVAILABLE ON RECORD. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD AND M/S TEAC CONSULTANT PVT. LTD. DESPITE THE FACT THAT THE DIRE CTORS OR PRINCIPAL OFFICERS OF THESE COMPANIES WERE NEVER PRODUCED BEF ORE THE ASSESSING OFFICER FOR EXAMINATION DESPITE NUMBER OF OPPORTUNITIES PROVIDED BY THE AO FOR PRODUCING AND ALSO IGNORING THE FACT THAT THE ASSESSEE NEITHER EXPRESSED ITS INABILITY IN PRO DUCING THE LENDERS NOR PRODUCED THEM EITHER. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOAN CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD. AND M/S TEAC CONSULTANT PVT. LTD MERELY BY OBSERVING THAT T HE ASSESSEE HAS COOPERATED IN ASSESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE THE DIRECTORS OF LENDER COMPANIES AND SOME DIRECTOR S/OFFICER WERE ALSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT E VEN THE DIRECTORS WHICH WERE PRODUCED BEFORE THE AO FAILED TO SUBSTANTIATE THE GENUINENESS OF THE ALLEGED TRANSACTIONS. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CTI(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS BY OBSERVING THAT THE APPELLANT CANNOT BE FASTENED UPO N THE BURDEN ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 112 TO PRODUCE THE LENDERS BEFORE THE AO AND IN NOT CON SIDERING THE DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA C ASTLE (P) LTD VS CIT (2015) 56 TAXMANN.COM 18(SC) WHEN THERE WERE GENUINE CONCERNS OF THE GENUINENESS OF THE TRANSACTIONS. THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 34. THE ONLY ISSUE INVOLVED IN THE REVENUES APPEAL IS THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF THE UNSECURE D LOAN FROM M/S BIRLA ARTS PVT. LTD. AND M/S TEAC CONSULTANTS PVT. LTD., WA S DELETED BY THE LD. CIT(A) ON THE IDENTICAL REASONING THAT THE ASSESSING OFFICER WAS NOT HAVING ANY MATERIAL OR EVEN THE STATEMENT OF ALLEGED ENTRY OPERATOR TO SUBSTANTIATE THE ADDITION. 35. WE HAVE HEARD THE LD. CIT-DR AS WELL AS THE LD A R OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ISSUE OF LOAN TAKEN FROM M/S BIRLA ARTS PVT. LTD. AND M/S TEAC CONSULTAN TS PVT. LTD., WAS CONSIDERED BY US FOR THE A.Y. 2010-11 AS WELL AS A.Y . 2011-12 AND IN VIEW OF OUR FINDING ON THIS ISSUE, WE DO NOT FIND ANY MER IT OR SUBSTANCE IN THE APPEAL OF THE REVENUE. HENCE, THE GROUNDS RAISED BY THE REVENUE IN THE APPEAL STAND DISMISSED. 36. IN THE CROSS OBJECTION OF THE ASSESSEE FOR THE A.Y. 2012-13, FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 113 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ORDER PASSED U/S 153A READ WITH SECTION 143(3) OF T HE INCOME TAX ACT, 1961 IS BAD IN LAW, VOID-AB-INITIO, AND DESERV ES TO BE ANNULLED AS THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS NOT ABATED AS ON THE DATE OF SEARCH AND CIT(A) ERRED IN HOLDIN G THAT THE CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED IN VI EW OF SLPS ADMITTED IN VARIOUS CASES. THE LD. CIT(A) FURTHER E RRED IN HOLDING THAT THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PER RELEVANT GROUND OF APPEAL HENCE THE ISSUE REMAINS FOR ACADEM IC DISCUSSION ONLY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN NOT DECLARING THE ASSESSMENT ORDER AS BAD IN LAW AND VOID AN INITIO. IT IS CONTENDED THAT THE A.O. P ASSED THE ASSESSMENT ORDER AGAINST THE DOCTRINE OF AUDI ALTE RM PARTEM, VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPPORTUNITY OF CROSS EXAMINATION OF THE ALLEGED ACC OMMODATION ENTRY PROVIDERS, THEREFORE, THE ASSESSMENT ORDER OU GHT TO HOLD AS BAD IN LAW AND DESERVES TO BE ANNULLED. THE FINDING S OF THE LD. CIT(A) IN THIS REGARD ARE PERVERSE AND ERRONEOUS. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING OF APPEA L. 37. BOTH THE ISSUES RAISED BY THE ASSESSEE IN THE C .O. ARE IDENTICAL TO THE C.O. OF THE ASSESSMENT YEAR 2011-12 AS WELL AS T HE ISSUE RAISED IN THE GROUNDS NO. 1 AND 2 IN THE APPEAL FOR THE A.Y. 2010 -11. IN VIEW OF OUR FINDING ON THESE ISSUES FOR THE A.Y. 2010-11, THE G ROUNDS RAISED IN THE C.O. OF THE ASSESSEE ARE ALLOWED. 38. IN THE APPEAL FOR THE A.Y. 2013-14, THE ASSESSE E HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ORDER PASSED U/S 153 A READ WITH SECTION 143(3) OF THE INCOME ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 114 TAX ACT 1961 IS BAD IN LAW, VOID AB-INITIO, AND DES ERVES TO BE ANNULLED AS THE ASSESSMENT FOR THE YEAR UNDER CONSI DERATION WAS NOT ABATED AS ON THE DATE OF SEARCH AND CIT (A) ERR ED IN HOLDING THAT THE CONTENTION OF THE ASSESSEE CANNOT BE ACCEP TED IN VIEW OF SLPS ADMITTED IN VARIOUS CASES. THE ID. CIT (A) FUR THER ERRED IN HOLDING THAT THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PER RELEVANT GROUND OF APPEAL HENCE THE ISSUE REMAINS F OR ACADEMIC DISCUSSION ONLY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT (A) ERRED IN NOT DECLARING THE ASSESSMENT O RDER AS BAD IN LAW AND VOID AB INITIO. THE FINDINGS OF ID CIT(A) I N THIS REGARD ARE PERVERSE AND ERRONEOUS. IT IS CONTENDED THAT THE ID . AO PASSED THE ASSESSMENT ORDER AGAINST THE DOCTRINE OF AUDI ALTERM PARTEM, VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPPORTUNITY OF CROSS EXAMINATION OF THE ALLEGED ACCOMMODATION ENTRY PROVIDERS, THEREFORE THE ASSESS MENT ORDER OUGHT TO HELD AS BAD IN LAW AND DESERVES TO BE ANNU LLED. 3. THAT THE ORDER OF THE ID CIT (A), CONFIRMING THE ADDITION MADE BY THE AO IS ARBITRARY, WHIMSICAL, CAPRICIOUS, PERVERS E, BASED ON NO EVIDENCE OR IRRELEVANT MATERIAL OR IRRELEVANT EVIDE NCE, AND AGAINST THE LAW AND FACTS OF THE CASE. THE ADDITION CONFIRM ED BY LD.CIT (A) DESERVES TO BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT (A) ERRED IN CONFIRMING THE ADDITIONS MADE U/S 68 OF THE INCOME TAX ACT, 1961 BY : - A) SOLELY RELYING ON THE STATEMENTS OF SOME ALLEGED ACCOMMODATION ENTRY PROVIDERS RECORDED BY SOME OTHE R AUTHORITIES IN SOME OTHER CASES/ACTIONS AND THE OPP ORTUNITY TO CROSS EXAMINATION WAS ALSO NOT PROVIDED TO ASSES SEE. B) GIVING A CONTRADICTORY FINDING THAT A DOUBT IS RAISED ON THE IDENTITY AND GENUINENESS OF THE COMPANY WHOSE NAME IS MENTIONED IN THE STATEMENT OF ACCOMMODATION ENTRY PROVIDERS AS WELL AS REPORTS OF DDIT (INV.)-KOLKATT A. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 115 C) HOLDING THAT THE ASSESSEE HAS NOT ADDUCED ANY EV IDENCE TO REBUT THE ADVERSE FACTUAL FINDING MADE BY THE AO IN THE ASSESSMENT ORDER THOUGH DETAILED PAPER BOOK FOR REL EVANT AY AND COMMON PAPER BOOKS HAVE BEEN SUBMITTED, AND D) HOLDING THAT INCRIMINATING MATERIAL HAD BEEN FOU ND DURING THE COURSE OF SEARCH OF ACCOMMODATION ENTRY PROVIDE R. FURTHER INCRIMINATING MATERIAL HAD BEEN GATHERED BY ISSUING COMMISSION TO DDIT (INV.) KOLKATTA. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAWTHE ID. CIT(A) ERRED IN CONFIRMATION THE ADDITION OF RS. 25 ,00,00,000/- MADE BY ID. AO U/S 68 OF INCOME TAX ACT, 1961 ON AC COUNT OF SPECIAL DEPOSIT RECEIVED FROM FOLLOWING PARTIES AND ERRONEOUSLY HELD THAT THE IDENTITY, CREDITWORTHINESS AND GENUIN ENESS OF THE UNDER MENTIONED COMPANY IS DOUBTFUL: - NAME OF THE COMPANY FROM WHOM LOAN RECEIVED AMOUNT NAME OF ALLEGED ENTRY OPERATOR WHOSE STATEMENT WERE RELIED CAPLIN DEALCOM PVT. LTD 25,00,00,000 SHRI ANKIT BAGRI 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(A) ERRED IN REJECTING THE THEORY OF PEAK CR EDIT AND ERRED IN NOT ALLOWING THE BENEFIT OF TELESCOPING, RECYCLING AND ROTATION OF FUNDS. 7. THE ASSESSEE PRAYS FOR LEAVE TO ADD, TO AMEND, T O DELETE, OR MODIFY THE ALL OR ANY GROUNDS OF APPEAL ON OR BEFOR E THE HEARING OF APPEAL. 39. GROUND NO. 1 OF THE APPEAL IS REGARDING THE ADD ITION MADE WITHOUT INCRIMINATING MATERIAL. AT THE TIME OF HEARING, THE LD AR OF THE ASSESSEE HAS STATED AT BAR THAT SINCE THE ASSESSMENT WAS PEND ING AS ON THE DATE OF SEARCH, THEREFORE, THE ASSESSEE DOES NOT PRESS GROU ND NO. 1 OF THE ASSESSEES APPEAL AND THE SAME MAY BE DISMISSED AS NOT PRESSED. THE LD. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 116 CIT-DR HAS NOT RAISED ANY OBJECTION IF GROUND NO. 1 OF THE ASSESSEES APPEAL IS NOT PRESSED. ACCORDINGLY, GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED BEING NOT PRESSED. 40. GROUND NO. 2 OF THE APPEAL IS REGARDING THE VIO LATION OF PRINCIPLES OF NATURAL JUSTICE AS THE OPPORTUNITY FOR CROSS EXAMIN ATION WAS NOT PROVIDED TO THE ASSESSEE. WE HAVE HEARD THE LD AR AS WELL AS THE LD. CIT-DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THIS GRO UND OF APPEAL IS COMMON FOR THE A.Y. 2010-11 TO 2012-13, THEREFORE, IN VIEW OF OUR FINDING ON THIS ISSUE FOR THE A.Y. 2010-11 AS WELL AS THE C. O. OF THE ASSESSEE FOR THE A.Y. 2011-12 AND 2012-13, THE SAME IS DECIDED I N FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 41. GROUND NOS. 3 TO 5 OF THE APPEAL ARE REGARDING THE ADDITION OF SPECIAL DEPOSITS RECEIVED FROM M/S CAPLIN DEALCOM P VT. LTD. FOR ALLOTMENT OF EQUITY SHARES ON PREFERENTIAL BASIS, WHICH WAS SUS TAINED BY THE LD. CIT(A). THE ASSESSING OFFICER HAS MADE ADDITION OF UN SECURED LOAN TAKEN FROM M/S BIRLA ART PVT. LTD. AS WELL AS VARIOUS SPEC IAL DEPOSITS RECEIVED FROM FIVE PARTIES BY TREATING THE SAME AS BOGUS ACCOMMODATION ENTRIES BASED ON THE REPORT OF THE IN VESTIGATION WING, KOLKATA AS WELL AS THE STATEMENT OF ONE SHRI ANKIT B AGRI. THE LD. CIT(A) HAS SUSTAINED THE ADDITION IN RESPECT OF M/S CAPLIN DEALCOM PVT. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 117 LTD. BUT DELETED THE REST OF THE ADDITIONS ON THIS GROUND THAT THE ASSESSING OFFICER WAS NOT HAVING ANY MATERIAL OR THE STATEMENT OF ALLEGED ENTRY PROVIDERS EXCEPT SHRI ANKIT BAGRI. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS CONFIRMED THE ADDITION ON TH E BASIS OF STATEMENT OF SHRI ANKIT BAGRI RECORDED U/S 131 OF THE ACT ON 03/ 7/2014. THE ASSESSING OFFICER HAS MADE THE ENTIRE ADDITION BASED ON THE S AID STATEMENT. THE LD AR HAS REFERRED TO QUESTION NO. 6 AND 8 OF THE STAT EMENT OF SHRI ANKIT BAGRI WHEREIN HE STATED THAT AFTER THE DEATH OF HIS PARTNER ON 07/4/2012, HE HAS NOT DONE ANY TRANSACTION OF ACCOMMODATION EN TRY. THE LD AR HAS THEN SUBMITTED THAT THE TRANSACTION IN QUESTION AS RECEIPT FROM M/S CAPLIN DEALCOM PVT. LTD. IS SUBSEQUENT TO THE SAID DATE I. E. 07/4/2012 AND THEREFORE, THE STATEMENT ITSELF DOES NOT MAKE OUT A CASE OF BOGUS ENTRY IN THE GARB OF SPECIAL DEPOSITS RECEIVED BY THE ASSESS EE. THE LD AR HAS ALSO REFERRED TO QUESTION NO. 13 AND SUBMITTED THAT THOU GH THERE WAS NO ALLEGATION AGAINST THE ASSESSEE OR THE TRANSACTION OF THE ASSESSEE, HOWEVER, THE ASSESSING OFFICER HAS EXTRAPOLATED THE STATEMENT FOR MAKING THE ADDITION OF ENTIRE SPECIAL RECEIPTS AS WELL AS U NSECURED LOAN CREDITOR. HE HAS ALSO REFERRED TO THE VARIOUS REPORTS OF INVE STIGATION WING, KOLKATA AND SUBMITTED THAT NONE OF THE REPORT HAS MADE OUT ANY CASE OF BOGUS ACCOMMODATION ENTRY BETWEEN THE ASSESSEE AND THE OTH ER PARTIES. THE REPORTS ARE ALLEGING SOME OTHER CREDITORS BUT NOT T HE CREDITORS IN QUESTION ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 118 FROM WHOM THE ASSESSEE HAS RECEIVED THE SAID DEPOSIT S. THEREFORE, ONCE THE REPORT ITSELF DOES NOT MAKE OUT ANY CHARGE AGAI NST THE ASSESSEE THEN THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT S USTAINABLE. HE HAS FURTHER CONTENDED THAT DUE TO ABNORMAL DELAY OF APP ROVAL GRANTED BY THE KOLKATA STOCK EXCHANGE, THE ASSESSEE COULD NOT ISSU E THE PREFERENTIAL SHARES TO THE APPLICANTS FROM WHOM THE DEPOSITS WERE RECEIVED AND CONSEQUENTLY THE ENTIRE AMOUNT WAS REFUNDED BY THE A SSESSEE. HE HAS REFERRED TO THE DETAILS OF THE AMOUNT REFUNDED BY T HE ASSESSEE. THE LD AR HAS ALSO REFERRED TO THE DOCUMENTS PRODUCED BEFORE THE ASSESSING OFFICER TO SHOW THE IDENTITY, CREDITWORTHINESS OF THE CREDITO RS AND GENUINENESS OF THE TRANSACTION. THESE DOCUMENTS INCLUDE THE FINANCI AL STATEMENTS AS WELL AS THE ASSESSMENT ORDERS PASSED U/S 143(3) OF THE A CT. THUS, THE LD AR HAS POINTED OUT THAT THE SAID COMPANY WAS ALSO AMALG AMATED AS PER THE SCHEME OF AMALGAMATION APPROVED BY THE HONBLE KOLK ATA HIGH COURT WITH THE OTHER COMPANY M/S BAIJNATH COMMOSALES PVT. LTD. , HENCE THE ALLEGATION OF THE ASSESSING OFFICER IS BASELESS TO SAY THAT THESE COMPANIES ARE SHELL COMPANIES WHEN THE ASSESSEE HAS PRODUCED A LL THE RELEVANT DOCUMENTS AND EVEN THESE COMPANIES ARE SUBJECTED TO SCRUTINY ASSESSMENT. HE HAS FURTHER CONTENDED THAT THE CREDI TOR/APPLICANT IS NBFC WHICH IS SUPERVISED AND REGULATED BY THE RBI AND THE REFORE, THE FINANCIAL AFFAIRS OF THE NBFC CANNOT BE DOUBTED WITHOUT ANY MA TERIAL. HE HAS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 119 POINTED OUT THAT THIS COMPANY M/S CAPLIN DEALCOM PV T. LTD. WAS DULY EXAMINED BY THIS TRIBUNAL IN THE CASE OF KOTA DALL M ILL VIDE ORDER DATED 31/12/2018 (SUPRA). 42. ON THE OTHER HAND, THE LD CIT-DR HAS SUBMITTED THAT ONCE THE INVESTIGATION WING, KOLKATA HAS DETECTED THAT THESE ARE SHALL COMPANIES AND ENGAGED IN PROVIDING ACCOMMODATION ENTRIES THEN IT WAS THE DUTY OF THE ASSESSEE TO PRODUCE THE PRINCIPAL OFFICERS/DIRE CTORS OF THESE COMPANIES. FURTHER SHRI ANKIT BAGRI HAS ADMITTED IN HIS STATEMENT AS ENTRY PROVIDER AND CONTROLLING THESE COMPANIES, THEREFORE , THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS WHEN THE ASSESSING OFF ICER ASKED TO PRODUCE THE PRINCIPAL OFFICERS/DIRECTORS OF THESE COMPANIES . 43. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. WE NOTE THAT THE ASSESSING OFFI CER HAS RELIED UPON THE STATEMENT OF SHRI ANKIT BAGRI FOR MAKING THE ADDITI ON IN RESPECT OF THE SPECIAL ADVANCE RECEIVED FROM M/S CAPLIN DEALCOM PV T. LTD. AS WELL AS OTHER PARTIES. THE RELEVANT PART OF THE STATEMENT A S REPRODUCED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IN QUESTI ONS NO. 6,8 AND 13 ARE AS UNDER: Q.6. PLEASE EXPLAIN THE NATURE OF BUSINESS DONE BY YOU. ANS. I ALONG WITH LATE SUMIT KEJRIWAL, WHO WAS AN A CCOMPLISHED ACCOMMODATION ENTRY OPERATOR OF KOLKATA, WAS ENGAGE D IN THE BUSINESS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 120 OF PROVIDING ACCOMMODATION ENTRIES THROUGH JAMA KH ARCHI/SHELL COMPANIES, EXCLUSIVELY CREATED FOR THE PURPOSE OF P ROVIDING ACCOMMODATION ENTRIES, TO VARIOUS BENEFICIARIES IN LIEU OF COMMISSION. LATE SUMIT KEJRIWAL WHO RESIDED AT REGENT COURT, BL OCK-2, FLAT NO. 3D, V.I.P. ROAD, P.S. BAGUIATI, DIST.- NORTH 24 PARGANA S, KOLKATA-700059, HAS DIED ON 07/04/2012. I AM SUBMITTING HEREWITH THE PH OTOCOPY OF DEATH CERTIFICATE OF SHRI SUMIT KEJRIWAL AS ENCLOSURE. AL THOUGH THE COMPANIES FORMED BY US HAVE DIFFERENT ADDRESSES BUT THEY WERE BEING MAINTAINED FROM OUR OFFICE LOCATED AT THE FOLLOWING ADDRESS: 9/12, N.S. ROAD, 3 RD FLOOR, BLOCK-C, KOLKATA-700001. ALTHOUGH ALMOST ALL OF THE COMPANIES CONTROLLED BY ME AND LATE SUMIT KEJRIWAL HAVE ALREADY BEEN SOLD TO VARIOUS BENEFICI ARIES GROUPS BUT STILL THE OFFICE PREMISE IS BEING MAINTAINED. Q.8 PLEASE STATE THE NAME OF THE COMPANIES/PROPRIET ORSHIP FIRMS MANAGED/CONTROLLED BY YOU AND ALSO STATE WHO ARE TH E OTHER DIRECTORS/PROPRIETORS IN THESE COMPANIES/PROPRIETOR SHIP FIRMS. ANS. PRESENTLY, I DO NOT CONTROL ANY COMPANY/PROPRIETORS HIP CONCERN. HOWEVER, BEFORE THE DEMISE OF MY PARTNER, SHRI SUMI T KEJRIWAL, AROUND TEN TO TWELVE COMPANIES INCLUDING RAJAT POLYPACK PV T. LTD., CAPLIN DEALCOM PVT. LTD., PABLA LEASING PVT. LTD., KARNI S YNLEX PVT. LTD. AND WESTPORT EXPORT PVT. LTD WERE BEING CONTROLLED BY B OTH OF US. THE BOOKS OF ACCOUNTS OF THOSE COMPANIES WERE MAINTAINED IN T HE COMPUTERS IN OUR OFFICE. AS ALREADY STATED ABOVE, ALMOST ALL OF THE COMPANIES CONTROLLED BY ME AND LATE SUMIT KEJRIWAL HAVE ALREA DY BEEN SOLD TO VARIOUS BENEFICIARY GROUPS. HOWEVER, I WOULD LIKE T O MENTION THAT THE DIRECTORS IN THE ABOVE MENTIONED COMPANIES WERE NOT HING BUT THE DUMMY DIRECTORS WHO WERE MOSTLY OUR FRIENDS, ASSOCI ATES AND STAFFS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 121 WHO LEND THEIR NAMES FOR DIRECTORSHIP IN LIEU OF SO ME REMUNERATION WHICH WE PROVIDED THEM. SOME OF THE NAMES ARE AS FO LLOWS: 1. SHRI ANAND KUMAR KHETAN; 2. SHRI KOUSHIK GHOSH; 3. SHRI RAJIV MAHESWARI; 4. SHRI ANIL MODI; 5. SHRI MANISH KEJRIWAL: FURTHER, I WOULD ALSO LIKE TO MENTION THAT SHRI SU MIT KEJRIWAL WAS ALSO HIMSELF A DIRECTION IN FEW OF THE COMPANIES. Q.13. IT HAS BEEN OBSERVED FROM THE ATTACHMENTS OF FORM 2S OF MAHABIR GROUP OF COMPANIES THAT EQUITY SHARES WERE ALLOTTED TO YOU COMPANY IN THE FOLLOWING MANNER OVER THE YEARS: IN TH E CASE OF M AHABIR DANWAR JEWELLERS PVT. LTD. SL.NO. NAME OF THE COMPANY DATE OF ALLOTMENT F.Y. A.Y. TOTAL NO. OF SHARES AMOUNT INCLUDING PREMIUM (RS.) 1. RAJAT POLYPACK PVT. LTD. 31.03.2010 2009 - 10 2010 - 11 4000 20,00,000/ - 2. CAPLIN DEALCOM PVT. LTD. 3 1.03.2010 2009 - 10 2010 - 11 4000 20,00,000/ - 3. PABLA LEASING & FINANCE PVT. LTD. 31.03.2010 2009 - 10 2010 - 11 6000 30,00,000/ - 4. WESTPORT EXPORT PVT. LTD. 31.03.2010 2009 - 10 2010 - 11 3000 15,00,000/ - 5. CAPLIN DEALCOM PVT. LTD. 31.03.2009 2008 - 09 2009 - 10 2 000 10,00,000/ - 6. PABLA LEASING & FINANCE PVT. LTD. 31.03.2009 2008 - 09 2009 - 10 2000 10,00,000/ - 7. KARNI SYNTEX PVT. LTD. 31.03.2008 2007 - 08 2008 - 09 5000 10,00,000/ - 8. CAPLIN DEALCOM PVT. LTD. 31.03.2008 2007 - 08 2008 - 09 10000 20,00,000/ - IN THE CASE OF MAHABIR DANWAR JEWELLERS PVT. LTD. 9. PABLA LEASING & FINANCE PVT. LTD. 31.03.2010 2009 - 10 2010 - 11 5000 5,00,000/ - 10. PABLA LEASING & FINANCE PVT. LTD. 31.03.2009 2008 - 09 2009 - 10 10000 10,00,000/ - 11. CAPLIN DEALCOM PVT. LTD. 31.03.2009 2008 - 09 2009 - 10 10000 10,00,000/ - 12. KARNI SYNTEX PVT. LTD. 28.03.2008 2006 - 07 2007 - 08 10000 5,00,000/ - KIK JEWELLERS PVT. LTD. 13. RAJAT POLYPACK PVT. LTD. 31.03.2010 2009 - 10 2010 - 11 20000 20,00,000/ - TOTAL 1,85,00,000/ - PLEASE EXPLAIN THE SAME. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 1 22 ANS. OVER THE YEARS, ACCOMMODATION ENTRIES IN THE F ORM OF SHARE CAPITAL HAVE BEEN PROVIDED TO MAHABIR GROUP OF COMPANIES IN LIEU OF COMMISSION TO THE TUNE OF RS. 0.10 PER HUNDRED. IN REPLY TO QUESTION NO. 6, SHRI ANKIT BAGRI HAS EX PLAINED THE NATURE OF BUSINESS AND SUBMITTED THAT HE ALONGWITH SHRI SUMIT KEJRIWAL WERE PROVIDING ACCOMMODATION ENTRIES AGAINST THE CASH. H OWEVER, SHRI SUMIT KEJRIWAL DIED ON 07/4/2012. IN REPLY TO QUESTION NO. 8, HE HAS GIVEN THE SPECIFIC ANSWER THAT HE DOES NOT CONTROL ANY COMPANY OR PROPRIETORSHIP CONCERN. BEFORE DEATH OF SHRI SUMIT KEJRIWAL, THEY WE RE CONTROLLING AROUND 10 TO 12 COMPANIES, ONE OF WHICH WAS M/S CAPLIN DEAL COM PVT. LTD.. THIS IS THE ONLY INCRIMINATING STATEMENT OF SHRI ANKIT B AGRI. IN RESPONSE TO QUESTION NO. 13, IT IS CLEAR THAT ALL THE DETAILS O F THE ALLEGED ACCOMMODATION ENTRIES WERE IN RESPECT OF A.Y. 2007-0 8 TO 2010-11 AND FOR A PARTICULAR GROUP M/S MAHABIR GROUP OF COMPANIES. IN THE ENTIRE STATEMENT, THERE IS NO ALLEGATION OF ANY ACCOMMODAT ION ENTRY PROVIDED TO THE ASSESSEE. FURTHER WE FIND THAT THE ASSESSEE HAS PRODUCED PLETHORA OF MATERIAL COMPRISING OF FINANCIAL STATEMENT, ITR, CON FIRMATION, MEMORANDUM OF UNDERSTANDING FOR SPECIAL DEPOSIT, AF FIDAVIT OF DIRECTOR, DECISION OF HONBLE KOLKATA HIGH COURT, ASSESSMENT ORDERS PASSED U/S 143(3) FOR VARIOUS ASSESSMENT YEARS AS WELL AS OTHE R DETAILS INCLUDING ROC ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 123 MASTER DATA, NBFC REGISTRATION CERTIFICATE. DETAILS OF THE DOCUMENTS PRODUCED BY THE ASSESSEE IS AS UNDER: S. NO. PARTICULARS PB PG VOL II/A.Y 2013-14 1 COPY OF ACK. OF ITR OF AY 2013 - 14 551 2 COPY OF BALANCE SHEET OF AY 2013 - 14 ALONG WITH ANNEXURE 552 - 560 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING TH E ENTRY OF PAYMENT MADE TO ASSESSEE. 561 - 562 4 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOK S OF ACCOUNTS OF PARTY. 563 - 567 5 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOK S OF ACCOUNTS OF ASSESSEE. 568 - 574 6 COPY OF MEMORANDUM OF UNDERSTANDI NG EXECUTED BETWEEN THE ASSESSEE AND M/S CAPLIN DEALCOMM PVT. LTD FOR THE TRANSACTION OF FINANCE IN FORM OF DEPOS ITS 575 - 579 7 COPY OF AFFIDAVIT OF KAVITA JAIN DIRECTOR OF COMPAN Y. 580 - 583 8 ORDER PASSED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES WITH THIS COMPANY. 584 - 605 9 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012, 31.03.2013, 31.03.2014, 31.03.2015 AND 31.03.2016. 606 - 612 10 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2006-07, 2008-09, 2009-10, 2010-11 AND 2014-15 613 - 636 11 COPY OF ROC MASTER DATA. 637 - 638 12 NBFC REGISTRATION CERTIFICATE 639 13 COPY OF PAN CARD. 640 14 COPY OF CERTIFICATE OF INCORPORATION 641 15 COPY OF SUMMON NO. 4560 DATED 16.10.2017 AND REMINDER NOTICE NO. 1583 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961 642 - 644 16 COPY OF REPLY SUBMITTED BY COMPANY IN RESPONSE TO NOTICE/SUMMON ISSUED TO IT ALONG WITH DISPATCHED PR OOF 645 - 647 THUS, THE ASSESSEE HAS PRODUCED ALL THE RELEVANT SUP PORTING DOCUMENTARY EVIDENCE TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THE CREDITORS AS WELL ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 124 AS THE GENUINENESS OF THE TRANSACTION WHICH IS THROU GH THE BANKING CHANNEL. THE ASSESSING OFFICER HAS NOT BROUGHT ON RE CORD ANY DISCREPANCY EITHER IN THE BOOKS OF ACCOUNT OR IN THE DETAILS OF BANK ACCOUNTS OF THE CREDITORS OR THE ASSESSEE TO SHOW THAT THE TRANSACTI ON IS NOTHING BUT ASSESSEES OWN UNACCOUNTED MONEY HAS ROUTED BACK IN THE GARB OF SPECIAL DEPOSIT. WE FURTHER NOTE THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THIS TRIBUNAL IN THE CASE OF KOTA DALL MILL (SUPRA) AT PA RA 26 AS UNDER: 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS GIVEN THE IDENTICAL FINDING FOR ALL THE ASSESSMENT YEARS WHICH IS BASED ON THE REPORT OF THE INVESTIGA TION WING KOLKATA AS WELL AS THE STATEMENT RECORDED BY THE DDIT KOLKATA. WE NOTE THAT THE SURROUNDING CIRCUMSTANCES AND THE FACTS ARE IDENTIC AL AS FOR THE A.Y. 2010-11 AS RECORDED BY THE AO AS WELL AS THE LD. CI T (A). THE LD. CIT (A) HAS TURNED DOWN THE REQUEST OF CROSS EXAMINATION IN PARA 3.12 TO 3.13 AT PAGES 188 TO 190 AS UNDER :- 3.12 IN MY CONSIDERED VIEW, THE TECHNICAL OBJECTION S RAISED BY THE APPELLANT IN RESPECT OF LOAN FROM CAPLIN DEALCOMM P RIVATE LIMITED AND M/S VSG LEASING AND FINANCE CO. LTD. AS ABOVE, ARE OF NO AVAIL TO THE APPELLANT DUE TO FOLLOWING UNDISPUTED FACTS: I. IT IS UNDISPUTED FACT THAT THE INCOME TAX DEPART MENT HAS MADE TREMENDOUS INVESTIGATIONS IN SUCH SHELL COMPAN IES OF KOLKATA, MUMBAI AND DELHI PROVIDING ACCOMMODATION E NTRY AND STATEMENTS MADE BY SEVERAL ACCOMMODATION ENTRY PROV IDERS HAVE BECOME VIRTUALLY IN PUBLIC DOMAIN. IT IS NO ARGUME NT THAT THE AO DID NOT PROVIDE SUCH STATEMENT BEFORE THE ASSESSMEN T OR IN ANY OF THE NOTICES. THESE FACTS WERE WELL KNOWN TO THE APP ELLANT GROUP AND IGNORANCE IS MERE PRETENCE. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 125 II. MOREOVER, SUCH STATEMENTS ARE SO VOCAL AND UNDE NIABLE THAT AS MENTIONED IN SOME OF THE CASE LAWS ABOVE, C ROSS- EXAMINATION OF SUCH ACCOMMODATION ENTRY PROVIDES BY THOUSANDS OF BENEFICIARIES ACROSS INDIA IS NEITHER PRACTICABL E NOR VIABLE AND THEREFORE UNCALLED FOR. III. IT IS UNDISPUTED FACT THAT IN THE STATEMENT DA TED 03.07.2014 SHRI ANKIT BAGRI AND SHRI SHANKAR BANKA HAD ADMITTE D TO BE ONE OF SUCH ACCOMMODATION ENTRY PROVIDERS. THE SUM AND SUBSTANCE OF THE SAID STATEMENT IS THAT THE CONCERN M/S CAPLIN D EALCOMM PRIVATE LIMITED, M/S VSG LEASING AND FINANCE CO. LT D. WAS ENGAGED IN THE ACTIVITIES OF PROVIDING ACCOMMODATIO N ENTRIES AND THE APPELLANT HAPPENED TO BE ONE OF SUCH BENEFICIAR Y OF SUCH CONCERN. IT IS ALSO ADMITTED FACT THAT THESE OPERAT ORS HAD BEEN RUNNING THE AFFAIR OF THE SAID COMPANY. V. THE STATEMENT OF SHRI ANKIT BAGRI AND SHRI SHAN KAR BANK IN WHICH NAME OF M/S CAPLIN DEALCOMM PRIVATE LIMITED A ND M/S VSG LEASING AND FINANCE CO. LTD. RESPECTIVELY APPEA RED, CANNOT BE COMPLETELY IGNORED SOLELY ON THE LEGAL GROUNDS R AISED BY THE APPELLANT. 3.13 IN VIEW OF ABOVE DISCUSSION, IT IS CLEAR THAT THE INCRIMINATING MATERIAL HAD BEEN FOUND DURING THE COURSE OF SEARCH OF ACCOMMODATION ENTRY PROVIDER. FURTHER INCRIMINATING MATERIAL HAD BEEN GATHERED BY ISSUING COMMISSION TO DDIT (INV.) KOLKATA, DURING T HE ASSESSMENT PROCEEDINGS AND ALL SUCH MATERIAL HAVE BEEN SHARED WITH THE APPELLANT AT LEAST DURING THE REMAND REPORT PROCEEDING. IN VIEW OF NATION-WIDE KNOWN SCAM BY THE ACCOMMODATION ENTRY PROVIDERS OF KOLKAT A AND ELSEWHERE BURST BY THE INCOME TAX DEPARTMENT, THERE WAS NO NE ED TO PROVIDE OPPORTUNITY FOR CROSS-EXAMINATION OF SAME ACCOMMODA TION ENTRY PROVIDERS. ANYWAY, IN THE REJOINDER SUBMISSION TO REMAND REPORT THE APPELLANT IS ABSOLUTELY SILENT ON CROSS-EXAMINATION AND BY SUCH CONDUCT HE HAS FORGONE HIS RIGHT TO CROSS-EXAMINE. THEREFORE, THE PRINCIPLES OF NATURAL JUSTICE HAVE BEEN FOLLOWED. AS DISCUSSED IN PRECEDING PARAS, UNDER ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 126 THE FACTS AND CIRCUMSTANCE OF THE CASE, IT COULD NO T BE SAID THAT AO DID NOT FOLLOWED THE BINDING DECISION OF THE HONBLE SUPREM E COURT AND THE HONBLE JURISDICTION COURT. IN VIEW OF ABOVE DISCUS SION, THE SEVERAL OTHER GROUNDS RAISED FOR THE ISSUE ARE TREATED AS DISMISS ED. THEREFORE, IN VIEW OF ABOVE FACTS DISCUSSED IN PARA 2.1, 2.4.3 TO 2.4.7 A ND 3.1 TO 3.4 & 3.12 AND LEGAL POSITION APPRISED IN PARA 3.6 TO 3.11 ABOVE, IT IS HELD THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF UNSECURED LOA NS AMOUNTING TO RS. 1,50,00,000/- AND RS. 10,88,45,000/- FROM M/S CAPLI N DEALCOMM PRIVATE LIMITED AND M/S VSG LEASING AND FINANCE CO. LTD. RE SPECTIVELY, IS SUSTAINABLE AND THE SAME IS CONFIRMED. THUS THE LD. CIT (A) HAS DECIDED THE ISSUE ON IDENT ICAL TERMS AS FOR THE ASSESSMENT YEAR 2010-11. WE HAVE ALREADY GIVEN OUR FINDING ON THIS ISSUE AND REFERRED VARIOUS DECISIONS OF HONBLE SUPREME C OURT, HONBLE HIGH COURTS AS WELL AS THIS TRIBUNAL. THEREFORE, OUR FI NDING ON THE ISSUE FOR THE ASSESSMENT YEAR 2010-11 IS SQUARELY APPLICABLE AS T HE FACTS AND ISSUES ARE IDENTICAL FOR THESE YEARS. ACCORDINGLY, WE HOLD TH AT THE ADDITION BASED ON THE STATEMENT OF THIRD PARTY RECORDED AT THE BACK O F THE ASSESSEE WITHOUT AFFORDING OPPORTUNITY OF CROSS EXAMINATION IS NOT S USTAINABLE IN LAW. 27. APART FROM THE ISSUE OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, WE FIND THAT ON MERITS THE ASSESSEE PRODUCED ALL RELEVANT D OCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM WHICH IS IDENTICAL TO ALL T HE OTHER PARTIES IN RESPECT OF WHICH THE LD. CIT (A) HAS DELETED THE ADDITION. EVEN FOR SAKE OF COMPLETENESS, WE REFER TO THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE IN RESPECT OF THESE TWO COMPANIES AS UNDER :- S. NO. PARTICULARS PB PAGE NO. 1. M/S CAPLIN DEALCOMM PVT. LTD. COPY OF ACK. OF ITR OF AY 2016-17 987 COPY OF BALANCE SHEET OF AY 2016-17 988 ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 127 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 989-1008 CONFIRMATION OF LOAN GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF PARTY. 1009-1011 CONFIRMATION OF LOAN GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF ASSESSEE. 1012-1013 COPY OF AFFIDAVIT OF KAVITA JAIN DIRECTOR OF COMPANY. 1014-1017 ORDER PASSED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES IN THIS COMPANY 1018-1039 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012, 31.03.2013, 31.03.2014, 31.03.2015 AND 31.03.2016. 1040-1046 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2006-07, 2008- 09, 2009-10, 2010-11 AND 2014-15. 1047-1070 COPY OF ROC MASTER DATA. 1071-1072 COPY OF NBFC CERTIFICATE. 1073 COPY OF PAN CARD. 1074 COPY OF SUMMON NO. 4560 DATED 16.10.2017 AND REMINDER NOTICE NO. 1583 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961 1075-1077 COPY OF REPLY SUBMITTED BY COMPANY IN RESPONSE TO NOTICE/SUMMON ISSUED TO IT ALONG WITH DISPATCHED PROOF 1078-1080 2. M/S VSG LEASING AND FINANCE CO. LTD. COPY OF ACK. OF ITR OF AY 2016-17 1144 COPY OF BALANCE SHEET OF AY 2016-17 ALONG WITH ANNEXURE OF LOAN & ADVANCES 1145 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 1146-1152 CONFIRMATION OF LOAN GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF PARTY. 1153-1154 CONFIRMATION OF LOAN GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF ASSESSEE. 1155 WHEN ALL THE RELEVANT DETAILS AND DOCUMENTARY EVIDE NCES PRODUCED BY THE ASSESSEE TO ESTABLISH THE IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE TRANSACTIONS, THEN THE SAID EVIDENCES CANNOT BE REJ ECTED ON THE BASIS OF THE STATEMENT WITHOUT ANY CONTRARY DOCUMENTARY EVIDENCE . WE FURTHER NOTE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 128 THAT THE ASSESSMENTS WERE COMPLETED UNDER SECTION 1 43(3) OF M/S. CAPLIN DEALCOMM PVT. LTD. AND THE DETAILS OF WHICH ARE AS UNDER :- NAME OF COMPANY ASSESSMENT YEAR INCOME ASSESSED ASSESSMENT ORDER U/S 143(3) AT PB PG OF VOL.-III M/S CAPLIN DEALCOMM PVT. LTD 2008-09 1,40,710 1053-1054 M/S CAPLIN DEALCOMM PVT. LTD 2009-10 1,65,600 1059-1060 M/S CAPLIN DEALCOMM PVT. LTD 2010-11 1,20,000 1063-1064 M/S CAPLIN DEALCOMM PVT. LTD 2014-15 2,85,945 1066-1068 ONCE THE PARTY IS REGULARLY ASSESSED TO TAX AND ORD ERS UNDER SECTION 143(3) WERE PASSED BY THE AO, THEN THE TRANSACTIONS CANNOT BE TREATED AS BOGUS ONCE. IT IS MANIFEST FROM THE FINANCIAL STATEMENTS OF THESE COMPANIES THAT THE SHARE CAPITAL AND RESERVE OF M/S. CAPLIN DEALCO MM PVT. LTD. AND M/S. VSG LEASING & FINANCE CO. PVT. LTD. AS ON 31 ST MARCH, 2016 WERE RS. 136,63,90,504/- AND RS. 97,11,26,758/- WHEREAS THE AMOUNTS GIVEN TO THE ASSESSEE BY THESE TWO COMPANIES WAS RS. 16.10 CRORES AND RS. 10.88 CRORES RESPECTIVELY. THUS THE CREDITWORTHINES S OF THESE COMPANIES AS EVIDENT FROM THEIR FINANCIAL STATEMENTS WAS UNDI SPUTEDLY SUFFICIENT TO GIVE THE AMOUNTS IN QUESTION TO THE ASSESSEE. ACCO RDINGLY, HAVING REGARD TO THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE A ND OUR FINDINGS ON THIS ISSUE FOR THE ASSESSMENT YEAR 2010-11, THE ADDITIO NS MADE BY THE AO ARE NOT SUSTAINABLE AND THE SAME ARE DELETED. THIS ISS UE COVERS BOTH THE ASSESSMENT YEARS 2015-16 AND 16-17. THE ASSESSEE HAS ALSO RAISED GROUND NO. 5 REGARDING TYPOGRAPHICAL ERROR IN THE FINDING OF THE AO/CIT (A) ON ACCOUNT OF LATE DELIVERY CHARGES OF RS. 12 LACS. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 129 THE TRIBUNAL HAS CONSIDERED THE ISSUE ON THE BASIS OF VARIOUS DOCUMENTARY EVIDENCES AS WELL AS THE ASSESSMENT FRAMED U/S 143(3 ) OF THE ACT IN CASE OF M/S CAPLIN DEALCOM PVT. LTD.. WE FURTHER NOTE TH AT THE ASSESSEE WAS PERSUADING WITH THE KOLKATA STOCK EXCHANGE AS WELL AS THE SEBI FOR DELISTING OF THIS COMPANY AND THEREAFTER PREFERENTI AL SHARES TO BE ISSUED TO THESE PARTIES. THE LD AR HAS PRODUCED BEFORE US THE LETTERS OF KOLKATA STOCK EXCHANGE DATED 01/8/2014 AS WELL AS SEBI DATED 03/9/2014 WHEREBY THE APPROVAL WAS GRANTED FOR VOLUNTARY DELIST ING OF THE EQUITY SHARES OF THE ASSESSEE. HOWEVER, THE SEBI HAS REGRET TED THE REQUEST BY CITING THE REASON THAT THERE IS NO PROVISION UNDER SEBI ACT FOR DELISTING OR WAIVER SOUGHT BY THE COMPANY. HENCE, THE EXPLANATION OF THE ASSESSEE THAT THE SPECIAL DEPOSITS WERE RECEIVED AS PER THE M EMORANDUM OF UNDERSTANDING TO ISSUE THE SHARES ON PREFERENTIAL B ASIS TO THESE PARTIES AFTER DELISTING OF THE SHARES OF THE COMPANY IN THE STOCK EXCHANGE IS FOUND TO BE CORRECT AS THE ASSESSEE HAS ALREADY APPLIED T O THE KOLKATA STOCK EXCHANGE AS WELL AS SEBI FOR DELISTING OF ITS EQUITY SHARES. EVEN OTHERWISE WHEN THE CREDITWORTHINESS OF THE PARTY AS WELL AS GENU INENESS OF THE TRANSACTION THROUGH THE BANKING CHANNEL WAS ESTABLIS HED WITHOUT POINTING OUT ANY DISCREPANCY EITHER IN THE BOOKS OF ACCOUNT OR IN THE BANK STATEMENT OF THE CREDITOR OR THE ASSESSEE, THE ADDI TION MADE MERELY ON THE BASIS OF THE STATEMENT IS NOT SUSTAINABLE. IN VIEW O UT FINDING ON THIS ISSUE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 130 IN CASE OF KOTA DALL MILL (SUPRA), THE ADDITION MAD E BY THE ASSESSING OFFICER IS DELETED. 44. GROUND NO. 6 OF THE ASSESSEES APPEAL IS REGARD ING DENIAL OF BENEFIT OF TELESCOPING, RECYCLING AND ROTATION OF FUNDS BY REJECTING THE PEAK CREDIT THEORY. THIS ISSUE HAS BEEN CONSIDERED BY US WHILE DE CIDING GROUND NO. 6 OF THE ASSESSEES APPEAL FOR THE A.Y. 2010-11. ACCO RDINGLY, IN VIEW OF OUR FINDING ON THIS ISSUE FOR THE A.Y. 2010-11, GROUND NO. 6 OF THE ASSESSEES APPEAL IS INFRUCTUOUS. 45. IN THE CROSS APPEAL FOR THE A.Y. 2013-14, THE R EVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F RS. 73,00,00,000/- MADE BY THE AO U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS CLAIMED TO HAVE OBTAINE D BY THE ASSESSEE FROM M/S BIRLA ARTS PVT. LTD, M/S MAGNATE CAPITAL MARKET LTD, M/S COMPETENT SECURITIES PVT. LTD., M/S BLOSSOM DEALERS PVT. LTD. AND M/S BAJNATH COMMOSALES PVT. L TD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS BY OBSERVING THAT THE ALLEGED LENDER M/S BIRLA ARTS PVT. LTD, M/S MAGNATE CAPITAL MARKET LTD, M/S COMPETENT SECURITIE S PVT. LTD, M/S BLOSSOM DEALERS PVT. LTD AND M/S BAJNATH COMMOS ALES PVT. LTD ARE NOT SHELL COMPANIES WITHOUT CONSIDERING THE FINANCIAL STATEMENTS OF THESE COMPANIES. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD, M/S ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 131 MAGNATE CAPITAL MARKET LTD, M/S COMPETENT SECURITIE S PVT. LTD, M/S BLOSSOM DEALERS PVT. LTD AND M/S BAJNATH COMMOS ALES PVT. LTD MERELY FOR THE REASON THAT EVIDENCES IN THE FOR M OF STATEMENT ON OATH OF THE RELEVANT ENTRY OPERATORS WERE NOT AV AILABLE ON RECORD. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD, M/S MAGNATE CAPITAL MARKET LTD, M/S COMPETENT SECURITIE S PVT. LTD, M/S BLOSSOM DEALERS PVT. LTD AND M/S BAJNATH COMMOS ALES PVT. LTD DESPITE THE FACT THAT THE DIRECTORS OR PRINCIPA L OFFICERS OF THESE COMPANIES WERE NEVER PRODUCED BEFORE THE ASSESSING OFFICERS FOR EXAMINATION DESPITE NUMBER OF OPPORTUNITIES PROVIDE D BY THE AO FOR PRODUCING AND ALSO IGNORING THE FACT THAT THE A SSESSEE NEITHER EXPRESSED ITS INABILITY IN PRODUCING THE LENDERS NO R PRODUCED THEM EITHER. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOAN CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD., M/S MAGNATE CAPITAL MARKET LTD., M/S COMPETENT SECURITI ES PVT. LTD., M/S BLOSSOM DEALERS PVT. LTD. AND M/S BAJNATH COMMO SALES PVT. LTD. MERELY BY OBSERVING THAT THE ASSESSEE HAS COOP ERATED IN ASSESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE TH E DIRECTORS OF LENDER COMPANIES AND SOME DIRECTORS/OFFICERS WERE A LSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT EVEN THE DIRECT ORS WHICH WERE PRODUCED BEFORE THE AO FAILED TO SUBSTANTIATE THE G ENUINENESS OF THE ALLEGED TRANSACTIONS. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS BY OBSERVING THAT THE APPELLANT CANNOT BE FASTENED UPON THE BURDEN TO PRODUCE THE LENDERS BEFORE THE AO AND IN NOT CONSIDERING THE DECISION OF THE HONBLE SUPREME COU RT IN NAVODAYA CASTLE (P) LTD. VS CIT (2015) 56 TAXMANN.C OM 18(SC) WHEN THERE WERE GENUINE CONCERNS OF THE GENUINENESS OF THE TRANSACTIONS. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 132 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN HOLDING THE SPECIAL DEP OSIT FROM M/S BAIJNATH COMMOSALES PVT. LTD AS GENUINE WHEREAS THE CIT(A) ON THE BASIS OF EVIDENCES AVAILABLE ON RECORD HELD UNS ECURED LOANS OBTAINED FROM M/S CAPLIN DEALCOM PRIVATE LTD, A COM PANY IN WHICH M/S BAIJNATH COMMONSALES PVT. LTD AMALGAMATED , AS BOGUS. 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN CONSIDERING THE AMALGAM ATING COMPANIES AS GENUINE AND THE RESULTANT AMALGAMATED COMPANY AS SHELL COMPANY WHICH IS A THEORETICAL IMPOSSIBILI TY AS THE CONSTITUENTS CAN NEVER BE GREATER THAN THE WHOLE. 9. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS. 1,66,360/- MADE BY THE AO ON ACCOUNT OF DEPRECIATIO N ON GUEST HOUSE BUILDING. 10. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS. 16,787/- MADE BY THE AO ON ACCOUNT OF EXCESS CLAIM OF DEPREC IATION ON UPS. 11. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS. 3,72,253/- MADE BY THE AO OUT OF FOREIGN TRAVEL EXP ENSES. 12. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS. 24,720/- MADE BY THE AO ON ACCOUNT OF PROFESSIONAL SERVICE C HARGES OF PRIOR YEARS. THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 46. GROUNDS NO. 1 TO 8 OF THE APPEAL ARE REGARDING THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF FIVE CREDITO RS WAS DELETED BY THE LD. CIT(A). ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 133 47. THE LD. CIT-DR HAS SUBMITTED THAT THE ASSESSEE WA S GIVEN VARIOUS OPPORTUNITIES BUT FAILED TO PRODUCE THE PRINCIPAL O FFICER OR THE DIRECTORS OF THESE COMPANIES TO SUBSTANTIATE THE GENUINENESS OF THE TRANSACTION WHEN SHRI ANKIT BAGRI HAS ADMITTED HIS INVOLVEMENT IN PR OVIDING ACCOMMODATION ENTRIES. HE HAS REFERRED TO THE ASSESSMENT ORDER AN D SUBMITTED THAT THE ASSESSING OFFICER HAS CONDUCTED ENQUIRY DURING THE ASSESSMENT PROCEEDINGS THROUGH THE KOLKATA INVESTIGATION WING AND BASED ON THE REPORT OF KOLKATA INVESTIGATION WING AS WELL AS THE STATEMENT OF SHRI ANKIT BAGRI, THE ASSESSING OFFICER HAS REACHED TO A REASO NABLE CONCLUSION TO HOLD THAT THE TRANSACTIONS ARE NOTHING BUT BOGUS ACCOMMO DATION TRANSACTION AS THESE COMPANIES ARE SHELL COMPANIES. 48. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HA S SUBMITTED THAT THE ENTIRE ORDER OF THE ASSESSING OFFICER IS BASED ON T HE STATEMENT OF SHRI ANKIT BAGRI AS WELL AS THE REPORT OF INVESTIGATION W ING, KOLKATA, HOWEVER, NEITHER IN THE STATEMENT NOR IN THE REPORTS ANY ALL EGATION HAS MADE IN RESPECT OF THESE TRANSACTIONS OF LOAN AS WELL AS SPE CIAL DEPOSITS RECEIVED BY THE ASSESSEE FROM THESE PARTIES. THE ASSESSING OF FICER HAS EXTRAPOLATED THE STATEMENT OF SHRI ANKIT BAGRI AND APPLIED THE S AME TO THE OTHER CASES WHEREAS THERE IS NO WHISPER ABOUT THE ACCOMMODATION E NTRIES FROM THESE PARTIES. THE LD. CIT(A) HAS DELETED THE ADDITION BY C ONSIDERING THE FACT THAT THE ASSESSING OFFICER WAS NOT HAVING ANY MATERI AL OR ANY STATEMENT OF ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 134 THE ALLEGED ENTRY PROVIDER OR OPERATOR. THE TRIBUNAL HAS CONSIDERED THIS ISSUE IN THE CASE OF KOTA DALL MILL (SUPRA) WHEREIN ALL THESE PARTIES INCLUDING M/S BIRLA ARTS PVT. LTD., TEAC CONSULTANTS PVT. LTD., MS/S MAGNET CAPITAL MARKET LTD., M/S COMPETENT SECURITIES PVT. LTD. HAVE BEEN EXAMINED. AS REGARDS M/S BLOSSOM DEALERS PVT. LTD. AND M/S BAIJNATH COMMOSALES PVT. LTD., THE LD AR HAS SUBMITTED THAT IN CASE OF M/S BAIJNATH COMMOSALES PVT. LTD., THE AMOUNT WAS REPAID ON 22/3/ 2013 AND THEREFORE, IT WAS NOT OUTSTANDING AS ON 31/3/2013 RE LEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. FURTHER THE SA ID COMPANY M/S BAIJNATH COMMOSALES PVT. LTD., WAS SUBSEQUENTLY MERG ED WITH M/S CAPLIN DEALCOM PVT. LTD. AS PER APPROVAL OF THE HONBLE KO LKATA HIGH COURT. HE HAS SUPPORTED THE ORDER OF THE LD. CIT(A). HE HAS RE FERRED TO THE VARIOUS DOCUMENTS PRODUCED BY THE ASSESSEE IN SUPPORT OF TH E CLAIM AND TO SHOW THAT THESE COMPANIES ARE GENUINE NBFCS AND WERE HAVI NG SUFFICIENT FUNDS TO GIVE THIS DEPOSIT TO THE ASSESSEE. 49. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. OUT OF THESE SIX PARTIES FOR WH ICH THE ASSESSING OFFICER MADE THE ADDITION, THE LD. CIT(A) DELETED THE ADDITI ON IN RESPECT OF FIVE PARTIES WHICH ARE AS UNDER: I) M/S BIRLA ARTS PVT. LTD. II) M/S BLOSSAM DEALERS PVT. LTD. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 135 III) M/S COMPETENT SECURITIES PVT. LTD. IV) M/S MAGNET CAPITAL MARKET LTD. V) M/S BAIJNATH COMMOSALES PVT. LTD. AS REGARDS THE TRANSACTIONS WITH M/S BIRLA ARTS PVT. LTD., M/S MAGNET CAPITAL MARKET LTD. AND M/S COMPETENT SECURITIES PV T. LTD. WE NOTE THAT THE IDENTICAL TRANSACTIONS WERE CONSIDERED BY THIS TR IBUNAL IN CASE OF KOTA DALL MILL (SUPRA) WHICH HAS ALSO BEEN CONSIDERED BY US IN THE EARLIER PARAS OF THIS ORDER WHILE DECIDING THE ISSUE REGARDING M/S BIRLA ARTS PVT. LTD. AND M/S TEAC CONSULTANTS PVT. LTD.. AS REGARDS M/S MAGNE T CAPITAL MARKET LTD. AND M/S COMPETENT SECURITIES PVT. LTD., THE TRANSAC TION WITH THESE TWO COMPANIES HAVE BEEN CONSIDERED BY THE TRIBUNAL IN TH E CASE OF KOTA DALL MILL (SUPRA) IN PARA 22, 30 AND 31 AS UNDER: 22. WE HAVE CAREFULLY PERUSED THE IMPUGNED ORDERS OF THE AO AS WELL AS THE LD. CIT (A) AND ALSO GONE THROUGH THE DOCUMENTS FIL ED BY THE ASSESSEE IN SUPPORT OF THE CLAIM AND FOUND THAT THE ASSESSEE PR ODUCED THE IDENTICAL DOCUMENTARY EVIDENCE AS IN THE CASE OF ASSESSMENT Y EAR 2010-11. EVEN THE PARTIES ARE SAME FOR THESE YEARS AND, THEREFORE , ONCE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN RESPECT OF ONE PARTY IS DECIDED, THEN THE SAME IS APPLICABLE FOR A LL THE SUBSEQUENT YEARS SUBJECT TO CONDITION THAT A SUFFICIENT FUND WAS AVA ILABLE WITH THE CREDITOR. WE NOTE THAT EXCEPT M/S. ROYAL CRYSTAL DEALERS PVT. LTD. AND M/S. DOSHI MANAGEMENT PVT. LTD., ADDITIONS FOR WHICH WERE CONF IRMED BY THE LD. CIT (A) FOR ALL THESE YEARS ON THE REASONING THAT THESE COMPANIES ARE MANAGED AND CONTROLLED BY SHRI ANAND SHARMA, THE AL LEGED ENTRY OPERATOR, THE OTHER CREDITORS ARE COMMON AS IN THE PRECEDING YEARS. THIS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 136 FINDING OF THE LD. CIT (A) IS IDENTICAL TO THE FIND ING IN RESPECT OF M/S. JALSAGAR COMMERCE PVT. LTD. FOR THE ASSESSMENT YEAR 2010-11. ACCORDINGLY, IN VIEW OF OUR FINDING ON THIS ISSUE, THE ADDITION SUSTAINED BY THE LD. CIT (A) IS DELETED. REST OF THE PARTIES FO R WHICH THE ADDITIONS WERE DELETED BY THE LD. CIT (A) ARE SAME FOR WHICH THE A O WAS NOT HAVING ANY MATERIAL OR DOCUMENT TO SUBSTANTIATE THE FINDING OF BOGUS ACCOMMODATION ENTRIES AS IN THE CASE OF OTHER PARTI ES, NAMELY, M/S. BIRLA ARTS PVT. LTD., M/S. TECH CONSULTANTS PVT. LTD., M/ S. SANGAM DISTRIBUTORS PVT. LTD. AS REGARDS THE CORPORATE PARTNERS WHO HA VE INTRODUCED THE CAPITAL, THEY REMAIN THE SAME FOR ALL THE YEARS AND , THEREFORE, THE ISSUE IS COMMON FOR ALL THESE YEARS EXCEPT THE FACT THAT FOR THE ASSESSMENT YEAR 2014-15 ONLY ONE PARTNER, NAMELY, M/S. BANSIDHAR AD VISORY PVT. LTD. INTRODUCED SOME CAPITAL OF RS. 13.00 LACS AND FOR T HE ASSESSMENT YEAR 2013-14 ONLY THREE PARTNERS INTRODUCED THE CAPITAL. THEREFORE, IN VIEW OF OUR FINDING ON ALL THESE ISSUES WHILE DECIDING THE CROSS APPEALS FOR THE ASSESSMENT YEAR 2010-11, THE GROUNDS RAISED BY THE ASSESSEE AND REVENUE FOR THE ASSESSMENT YEARS 2011-12 AND 14-15 STAND DISPOSED OFF ON THE SAME TERMS AND FINDING OF THE ASSESSMENT YEA R 2011-12 IS MUTATIS-MUTANDIS APPLICABLE FOR THESE ASSESSMENT YE ARS. . .. 30. IN THE REVENUES CROSS APPEAL THE ISSUE ON ACCO UNT OF UNSECURED LOANS FROM TWO PARTNERS, NAMELY, M/S. COMPETENT SECURITIE S AND M/S. INTELLECTUAL BUILDERS FOR THE ASSESSMENT YEARS 2015 -16 AND 16-17 WERE DELETED BY THE LD. CIT (A) ON THE GROUND THAT THE A O HAS NOT BROUGHT ANY MATERIAL OR DOCUMENTARY EVIDENCE TO ESTABLISH THAT THE TRANSACTIONS ARE BOGUS ACCOMMODATION ENTRIES AS THERE WAS NO STATEME NT OF ANY PERSON OF ALLEGED ENTRY OPERATOR HAVING CONTROL OVER THESE COMPANIES OR MANAGING THESE COMPANIES. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 137 31. AN IDENTICAL ISSUE WAS INVOLVED IN ALL THE ASSE SSMENT YEARS OF THE REVENUE WHEREIN THE LD. CIT (A) HAS DELETED THE ADDITIONS F OR WANT OF ANY DOCUMENTARY EVIDENCE OR ANY OTHER MATERIAL IN SUPPO RT OF THE FINDING OF THE AO. THEREFORE, IN VIEW OF OUR FINDING ON THIS ISSUE IN ASSESSMENT YEAR 2010-11, THE FINDING OF THE LD. CIT (A) IS UPHELD. WE FURTHER NOTE THAT THE ASSESSEE PRODUCED THE SUPP ORTING DOCUMENTS IN RESPECT OF EACH OF THE PARTIES AS UNDER: S. NO. PARTICULARS PB AY 2013-14 PAGE NO. M/S BLOSSOM DEALERS PVT. LTD 1 COPY OF ACK. OF ITR OF AY 2013 - 14. 712/V OL - III 2 COPY OF BALANCE SHEET OF ASSESSMENT YEAR 13 - 14 ALONG WITH ANNEXURE. 713 - 720/VOL - III 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 721 - 722/VOL - III 4 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF PARTY. 723 - 724/VOL - III 5 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF ASSESSEE. 725/VOL - III 6 COPY OF MEMORANDUM OF UNDERSTANDING EXECUTED BETWEEN THE ASSESSEE AND M/S BLOSSOM DEALER PVT LTD FOR THE TRANSACTION OF FINANCE IN FORM OF DEPOSITS. 726 - 730/VOL - III 7 COPY OF STATEMENT RECEIVED FROM M/S BLOSSOM DEALERS PVT LTD. CERTIFYING AND EVIDENCING THE SOURCE OF FUND INVESTED IN ASSESSEE COMPANY. 731/VOL - III 8 COPY OF AFFIDAVIT OF PRIYANKA SINGH DIRECTOR OF COMPANY. 732 - 735/VOL - III 9 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2011, 31.03.2012, 31.03.2013, 31.03.2014, 31.03.2015 AND 31.03.2016. 736 - 741/VOL - III 10 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2013-14 AND 2014-15. 742 - 755/VOL - III 11 COPY OF ROC MASTER DATA. 756/VOL - III 12 CERTIFICATE OF INCORPORATION. 757/VOL - III 13 COPY OF PAN CARD. 758/VOL - III ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 138 14 COPY OF SUMMON NO. 1446 DATED 13.10.2017 AND REMINDER NOTICE NO. 1582 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961 759 - 762/VOL - III 15 COPY OF REPLY SUBMITTED BY COMPANY IN RESPONSE TO NOTICE/SUMMON ISSUED TO IT ALONG WITH DISPATCHED PROOF 763 - 765/VOL - III M/S BAIJNATH COMMOSALES PVT LTD 1 COPY OF ACK. OF ITR OF AY 2013 - 14 766/VOL - III 2 COPY OF BALANCE SHEET OF AY 2013 - 14 ALONG WITH ANNEXURE 767 - 774/VOL - III 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 775/VOL - III 4 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF PARTY. 776/VOL - III 5 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF ASSESSEE. 777/VOL - III 6 COPY OF STATEMENT RECEIVED FROM M/S BAIJNATH COMMOSALES PVT LTD CERTIFYING RESOURCES OF FUND IN ASSESSEE COMPANY. 778/ VOL - III 7 COPY OF AFFIDAVIT OF KAVITA JAIN DIRECTOR OF COMPANY. 779 - 784/VOL - III 8 ORDER PASSED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES WITH THIS COMPANY. 785 - 806/VOL - III 9 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012 AND 31.03.2013. 807 - 810/VOL - III 10 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2013-14. 811 - 816/VOL - III 11 COPY OF PAN CARD. 817/VOL - III 12 COPY OF ROC DATA. 818/VOL - III 13 COPY OF CERTIFICATE OF INC ORPORATION. 819/VOL - III 14 COPY OF SUMMON NO. 1441 DATED 13.10.2017 AND REMINDER NOTICE NO. 1587 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961. 820 - 823/VOL - III 15 COPY OF REPLY SUBMITTED BY COMPANY IN RESPONSE TO NOTICE/SUMMON ISSUED TO IT ALONG WITH DISPATCHED PROOF. 824 - 826/VOL - III M/S BIRLA ARTS PVT. LTD 1 COPY OF ACK. OF ITR OF AY 2013 - 14. 827/VOL - III 2 COPY OF BALANCE SHEET OF AY 2013 - 14 ALONG WITH ANNEXURE. 828 - 833/VOL - III ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 139 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 834 - 849/VOL - III 4 CONFIRMATION OF LOAN GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF PARTY. 850 - 851/VOL - III 5 CONFIRMATION OF LOAN GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF ASSESSEE. 852 - 854/VOL - III 6 COPY OF AFFIDAVIT OF NEELAM GAUTAM DIRECTOR OF COMPANY. 855 - 858/VOL - III 7 ORDER PASSED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES WITH THIS COMPANY 859 - 885/VOL - III 8 COPY OF BALANCE SHEET OF COMPANY O F 31.03.2010, 31.03.2011, 31.03.2012, 31.03.2013, 31.03.2014, 31.03.2015 AND 31.03.2016. 886 - 892/VOL - III 9 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2006-07, 2012- 13, 2013-14 AND 2014-15. 893 - 915/VOL - III 10 COPY OF ROC M ASTER DATA. 916 - 917/VOL - III 11 CERTIFICATE OF INCORPORATION. 918/VOL - III 12 NBFC REGISTRATION CERTIFICATE. 919/VOL - III 13 COPY OF PAN CARD. 920/VOL - III M/S MAGNATE CAPITAL MARKET LIMITED 1 COPY OF ACK. OF ITR OF AY 2013 - 14. 472/VOL - II 2 COPY OF BALANCE SHEET OF ASSESSMENT YEAR 13 - 14 ALONG WITH ANNEXURE. 473 - 480/VOL - II 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 481 - 489/VOL - II 4 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF PARTY. 490 - 491/VOL - II 5 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF ASSESSEE. 492 - 494/VOL - II 6 COPY OF MEMORANDUM OF UNDERSTANDING EXECUTED BETWEEN THE ASSESSEE AND M/S MAGNATE CAPITAL MARKETS LTD FOR THE TRANSACTION OF FINANCE IN FORM OF DEPOSITS 495 - 499/VOL - II 7 COPY OF AFFIDAVIT OF BABITA KRIPLANI DIRECTOR OF COMPANY. 500 - 503/VOL - II 8 ORDER PASSED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES WITH THIS COMPANY. 504 - 526/VOL - II 9 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012, 31.03.2013, 31.03.2014, 31.03.2015 AND 31.03.2016. 527 - 533/VOL - II ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 140 10 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2014-15. 534 - 538/VOL - II 11 COPY OF ROC MASTER DATA. 539 - 540/V OL - II 12 COPY OF PAN CARD. 541/VOL - II 13 CERTIFICATE OF INCORPORATION 542/VOL - II 14 COPY OF NBFC CERTIFICATE 543/VOL - II 15 COPY OF SUMMON NO. 1443 DATED 13.10.2017 AND REMINDER NOTICE NO. 1585 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961 544 - 547/VOL - II 16 COPY OF REPLY SUBMITTED BY COMPANY IN RESPONSE TO NOTICE/SUMMON ISSUED TO IT ALONG WITH DISPATCHED PROOF 548 - 550/VOL - II M/S COMPETENT SECURITIES PVT LTD 1 COPY OF ACK. OF ITR OF AY 2013 - 14 648/VOL - II 2 COPY OF BALANCE SHEET OF AY 2013 - 14 ALONG WITH ANNEXURE 649 - 658/VOL - II 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 659 - 663/VOL - II 4 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF PARTY. 664/VOL - II 5 CONFIRMATION OF DEPOSIT GIVEN TO ASSESSEE FROM BOOKS OF ACCOUNTS OF ASSESSEE. 665 - 666/VOL - II 6 COPY OF MEMORANDUM OF UNDERSTANDING EXECUTED BETWEEN THE ASSESSE AND M/S COMPETENT SECURITIES PVT LTD FOR THE TRANSACTION OF FINANCE IN FORM OF DEPOSITS 667 - 671/VOL - II 7 COPY OF AFFIDAVIT OF NIDHI SINGH DIRECTOR OF COMPANY. 672 - 675/VOL - II 8 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012, 31.03.2013, 31.03.2014, 31.03.2015 AND 31.03.2016. 676 - 682/VOL - II 9 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2009-10 2010- 11 AND 2014-15 683 - 699/VOL - II 10 COPY OF ROC MASTER DATA. 700 - 701/VOL - II 11 CERTIFICATE OF INCORPORATION 702/VOL - II 12 NBFC REGISTRATION CERTIFICATE 703/VOL - II 13 COPY OF PAN CARD. 704/VOL - II ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 141 14 COPY OF SUMMON NO. 1437 DATED 13.10.2017 AND REMINDER NOTICE NO. 1588 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961 705 - 708/VOL - II 15 COPY OF REPLY SUBMITTED BY COMPANY IN RESPONSE TO NOTICE/SUMMON ISSUED TO IT ALONG WITH DISPATCHED PROOF 709 - 711/VOL - II A) ASSESSMENT U/S 143(3) NAME OF COMPANY ASSESSMENT YEAR INCOME ASSESSED ASSESSMENT ORDER U/S 143(3) AT A.Y 2013-14 PB PG M/S BLOSSOM DEALERS PVT. LTD. 2013 - 14 5,30,978 742 - 745/VOL - III M/S BLOSSOM DEALERS PVT. LTD. 2014 - 15 14,958 749 - 752/VOL - III M/S BAIJNATH COMMOSALES PVT. LTD 2013 - 14 95,745 811 - 813/VOL - III M/S BAIJNATH COMMOSALES PVT. LTD 2014 - 15 NIL 816A - 816B/VOL - III M/S MAGNATE CAPITAL MARKET LTD. 2014 - 15 68,330 534 - 535/VOL - II M/S COMPETENT SECURITIES PVT. LTD 2009 - 10 94,600 684 - 685/VOL - II M/S COMPETENT SECURITIES PVT. LTD 2010 - 11 2,08,099 690 - 691/VOL - II M/S COMPETENT SECURITIES PVT. LTD 2014 - 15 9,06,648 693 - 696/VOL - II M/S BIRLA ARTS PVT LTD T HE ASSESSMENT HISTORY OF M/S BIRLA ARTS PVT LTD HAS ALREADY BEEN EXPLAINED IN PARA 7 ABOVE FOR DEPARTMENTAL APPEAL ITA NO. 1101/JPR/2018 A.Y 2011-12 B) COPY OF MASTER DATA OF ROC NAME OF COMPANY STATUS OF COMPANY A.Y 2013 - 14 PB PG M/S BIRLA ARTS PVT. LTD ACTIVE 939/VOL - III/ M/S BLOSSOM DEALERS PVT. LTD. ACTIVE 756/VOL - III M/S MAGNATE CAPITAL MARKET LTD. ACTIVE 539//VOL - II M/S COMPETENT SECURITIES PVT. LTD ACTIVE 700 - 701/VOL - II M/S BAIJNATH COMMOSALES PVT. LTD AMALGAMATED ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 142 FROM THE DETAILS OF THE DOCUMENTS PRODUCED BY THE A SSESSEE, IT IS CLEAR THAT THE ASSESSEE HAS ESTABLISHED ITS CLAIM BY DOCU MENTARY EVIDENCE AS WELL AS THE ASSESSMENT ORDERS PASSED U/S 143(3) OF T HE ACT WHEREIN ALL THESE TRANSACTIONS WERE ACCEPTED BY THE ASSESSING O FFICER. AS PER THE ROC MASTER DATA, THE STATUS OF THESE COMPANIES HAVE BEE N SHOWN AS ACTIVE AND IN CASE OF M/S BAIJNATH COMMOSALES PVT. LTD., I T IS ALSO SHOWN AS AMALGAMATED. AS IT IS CLEAR FROM THE RECORD THAT TH E SCHEME OF AMALGAMATION WAS APPROVED BY THE HON'BLE HIGH COURT OF KOLKATA. THE ASSESSEE HAS ESTABLISHED THE AVAILABILITY OF FUNDS WITH THESE COMPANIES WHICH ARE NBFCS RAISED SHARE CAPITAL DURING THE VARI OUS FINANCIAL/ASSESSMENT YEARS, THEREFORE, ONCE THE COM PANIES WERE HAVING SUFFICIENT FUND TO GIVE SPECIAL DEPOSITS UNDER THE MEMORANDUM OF UNDERSTANDING WHEREBY THE ASSESSEE HAS UNDERTAKEN TO ISSUE THE EQUITY SHARES ON PREFERENTIAL BASIS AGAINST THESE DEPOSITS AFTER THE EQUITY SHARES WERE DELISTED FROM THE STOCK EXCHANGE. THE PROCESS OF DELISTING WAS NOT IN DISPUTE AS IT WAS ACKNOWLEDGED BY THE STOCK EXCHANGE, KOLKATA AS WELL AS BY THE SEBI WHICH IS AN INDEPENDENT RECORD AND THERE IS NO SCOPE OF ANY MANIPULATION BY THE ASSESSEE. THEREFORE, HAVING REGA RD TO THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE AND T HE STATEMENT WHICH IS RELIED UPON BY THE ASSESSING OFFICER IS FULL OF CONTRADICTIONS NOT ESTABLISHING THE CASE THAT THE TRANSACTIONS OF SPEC IAL DEPOSITS BETWEEN THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 143 ASSESSEE AND THESE PARTIES ARE ACCOMMODATION ENTRIE S. THE STATEMENT ITSELF DOES NOT GIVE A CLEAR PICTURE BUT SHRI ANKIT BAGRI HAS STATED THAT PRIOR TO 07/4/2012 HE WAS INVOLVED IN PROVIDING ACCOMMODAT ION ENTRIES ALONGWITH HIS PARTNER LATE SHRI SUMIT KEJRIWAL BUT AF TER THE DEATH OF SUMIT KEJRIWAL ON 07/4/2012 HE HAS NOT DONE ANY ACTIVITY O F PROVIDING ACCOMMODATION ENTRY. SINCE ALL THESE TRANSACTIONS A RE SUBSEQUENT TO THE SAID DATE OF DEATH OF SHRI SUMIT KEJRIWAL, THEREFORE , THE STATEMENT ITSELF IS NOT HELPING THE CASE OF THE ASSESSING OFFICER. EVEN OTHERWISE WHEN THE ASSESSEE HAS PRODUCED THE DOCUMENTARY EVIDENCE IN S UPPORT OF ITS CLAIM AND THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY CONTRARY MATERIAL TO DISPUTE THE CORRECTNESS OF THE DOCUMENTARY EVIDE NCE FILED BY THE ASSESSEE THEN THE ADDITION MADE BY THE ASSESSING OF FICER MERELY ON THE BASIS OF THE STATEMENT IS NOT SUSTAINABLE. FURTHER WE HAVE ALREADY TAKEN A VIEW THAT THE STATEMENT RELIED UPON BY THE ASSESSING OFFICER WITHOUT GIVING OPPORTUNITY OF CROSS EXAMINATION IS CLEAR VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY THE ADDITION MADE MERELY O N THE BASIS OF STATEMENT IS NOT SUSTAINABLE. EVEN OTHERWISE THE LD. CIT(A) HAS DELETED THE ADDITION ON THE GROUND THAT THE ASSESSING OFFIC ER WAS NOT HAVING IN HIS POSSESSION THE STATEMENT OF THE ALLEGED ENTRY PROVI DERS IN RESPECT THESE FIVE PARTIES EXCEPT IN THE CASE OF M/S CAPLIN DEALC OM PVT. LTD. HENCE, IN ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 144 VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AS DISCUSS ED ABOVE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD . CIT(A) QUA THIS ISSUE. 50. GROUND NO. 9 OF THE APPEAL IS REGARDING DISALLO WANCE OF DEPRECIATION ON GUEST HOUSE BUILDING. THE ASSESSING OFFICER HAS D ISALLOWED THE DEPRECIATION ON GUEST HOUSE ON THE GROUND THAT THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE GUEST HOUSE WAS USED EXCLUSIVELY FOR THE BUSINESS PURPOSES. ON APPEAL, THE LD CIT(A) HAS ALLOWED THE CL AIM OF DEPRECIATION. 51. THE LD. CIT-DR HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT WHEN THE ASSESSEE HAS FAILED TO E STABLISH THAT THE GUEST HOUSE IS USED EXCLUSIVELY FOR BUSINESS PURPOS ES, THE CLAIM WAS NOT ALLOWABLE AND RIGHTLY DISALLOWED. 52. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HA S SUBMITTED THAT THE GUEST HOUSE IS SITUATED IN THE FACTORY PREMISES ITS ELF AND CANNOT BE USED OTHER THAN THE BUSINESS OF THE ASSESSEE. THE LD. CIT( A) HAS CONSIDERED THIS FACT AND ALLOWED THE CLAIM. 53. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. ONCE THE GUEST HOUSE IS SITUATE D IN THE FACTORY PREMISES ITSELF, THEN THE USE OF THE GUEST HOUSE IS NOT IN DISPUTE. IT IS NOT A CLAIM OF DEDUCTION U/S 37(1) OF THE ACT TO CONSID ER THE EXPENDITURE IS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 145 LAID OUT WHOLLY AND EXCLUSIVELY FOR THE BUSINESS OF THE ASSESSEE. THE CLAIM OF DEPRECIATION U/S 32 OF THE ACT IS ALLOWABLE ONCE THE ASSET IS PUT TO USE, THEREFORE, THE FACT OF THE GUEST HOUSE IS IN FACTOR Y PREMISES ITSELF NOT IN DISPUTE WHICH ESTABLISHED THAT THE GUEST HOUSE IS US ED FOR THE BUSINESS PURPOSES OF THE ASSESSEE AND NOT FOR ANY OTHER PURP OSE. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE IN PARA 12.2 AND 12.3 OF ITS ORDER AS UNDER: 12.2. THE A/R OF THE APPELLANT HAS ATTENDED THE PRO CEEDINGS AND MADE SUBMISSIONS AS FOLLOWS: THE COMPANY IS HAVING A BUILDING IN THE FACTORY PR EMISES WHICH IS USED AS GUEST HOUSE FOR BUSINESS CUSTOMER AND ASSOC IATE AGENCIES. IN THE BUSINESS OF PRODUCTION OF COPPER AND COPPER ALL OY TUBES OUR COMPANY HAS TO ALLOW INSPECTION OF PRODUCTS TO CUST OMERS BEFORE PACKING AND DISPATCH. AS OUR FACTORY RUNS FOR 24 HO URS IN ORDER TO MAKE THE INSPECTION CONVENIENTLY IN ALL WORKING HOU RS WE PROVIDE FACILITY FOR OUR CUSTOMERS TO STAY IN OUR PREMISES AT GUEST HOUSE. BY THE USE OF GUEST HOUSE WE OPERATE OUR BUSINESS EFFI CIENTLY AND ESTABLISH CORDIAL RELATIONS WITH TOUR BUSINESS CUST OMERS. THUS THE CLAIM OF DEPRECIATION ON GUEST HOUSE BUILDING WAS U SE OF A BUSINESS ASSET FOR BUSINESS PURPOSE HENCE ALLOWABLE. THE LD AO DID NOT APPRECIATED THE JUSTIFICATION SUBMITTED BY THE APPE LLANT COMPANY IN THIS RESPECT A COPY OF THE SAME IS ANNEXED HEREWITH AT PAGE NO 114- 117 OF PB-1. THE SAME ISSUE WAS CONSIDERED FAVORABLY FOR THE AP PELLANT COMPANY IN THE APPEAL ORDER NO 49/14-15 DATED 07.04.2016 IS SUED BY CIT(APPEALS), KOTA. THUS THE CLAIM OF DEPRECIATION MAY BE ALLOWED. 12.3 I HAVE CONSIDERED THE RIVAL SUBMISSION AND MAT ERIAL PLACED ON RECORD. IT IS SEEN THAT IN THE BUSINESS OF THE APPELLANT USE OF T HE GUEST HOUSE BUILDING FOR THE PURPOSE OF BUSINESS CANNOT BE DENIED. THERE FORE, FOLLOWING THE DECISION OF CIT (A), KOTA, IN APPEAL NO. 49/14-15 D ATED 07.04.2016 AND ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 146 JUSTIFICATION PROVIDED BY THE APPELLANT, THE CLAIM OF DEPRECIATION ON GUEST HOUSE BUILDING IS ALLOWED TO THE APPELLANT. ACCORDI NGLY, THIS ADDITION OF RS. 1,66,360/- IS DELETED. ACCORDINGLY, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE GUEST HOUSE IS SITUATED IN THE FACTORY PREMISES AND BEING USED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. 54. GROUND NO. 10 OF THE APPEAL IS REGARDING RESTRI CTION OF DEPRECIATION ON UPS FROM 60% TO 15%. WE HAVE HEARD THE LD. CIT-D R AS WELL AS THE LD AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATE RIAL ON RECORD. AT THE OUTSET WE NOTE THAT THIS TRIBUNAL HAS BEEN TAKING A C ONSISTENT VIEW THAT THE UPS IS AN INTEGRAL PART OF COMPUTER AND THEREFO RE, ELIGIBLE FOR DEPRECIATION @ 60%. THE LD. CIT(A) AFTER CONSIDERING THE VARIOUS DECISIONS HAS DECIDED THIS ISSUE IN PARA 13.2 AND 13.3 AS UND ER: 13.2 THE A/R OF THE APPELLANT ATTENDED THE PROCEED INGS AND MADE SUBMISSIONS AS FOLLOWS:- THE UPS IS AN INTEGRAL PART OF THE COMPUTER AND IT IS ENTIRELY USED FOR COMPUTERS AS ITS PERIPHERALS / ACCESSORIES. THE RE IS NO OTHER USE OF UPS SEPARATELY. AS PER MANY TRIBUNAL JUDGEME NTS INCLUDING JUDGEMENT OF JAIPUR IT AT THE DEPRECIATION ON UPS I S ALLOWED AT THE RATE OF DEPRECIATION OF COMPUTER. THE CLAIM OF DEPRECIATION OF UPS AS COMPUTER WAS JUSTIFIED. OUR CLAIM OF DEPRECI ATION @ 60% IS SUPPORTED BY THE FOLLOWING JUDGEMENT: 1. ACIT VS RAM KISHAN VERMA (2011) 30CCH 0561 JAIPU R TRIB ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 147 2. ITO VS OMNI GLOBE INFORMATION TECHNOLOGY INDIA ( 2011)30 CCH 0217 DEL TRIB 3. USHODAYA ENTERPRISES LTD VS ACIT (2013) 37CCH 06 21 HYDERABAD TRIB THE LD AO DID NOT APPRECIATE THE JUSTIFICATION SUB MITTED BY THE APPELLANT COMPANY IN THIS RESPECT A COPY OF THE SAME IS ANNEXED HEREWITH AT PAGE NO 114-117 OF PB-1. THE SAME ISSUE WAS CONSIDERED FAVORABLY FOR THE AP PELLANT COMPANY IN THE APPEAL ORDER NO 49/14-15 DATED 07.04 .2016 ISSUED BY CIT(APPEALS), KOTA FOR THE AY 2011-12. TH US THE CLAIM OF DEPRECIATION MAY BE ALLOWED. '13.3. I HAVE CONSIDERED THE RIVAL SUBMISSION AND MATERIAL PLACED ON RECORDS, IN MY CONSIDERED VIEW, THE ISSUE REMAINS D ECIDED IN FAVOUR OF THE APPELLANT, IN APPELLANTS OWN CASE FOR A.Y. 2 011-12 IN APPEAL NO. 49/14-15 DATED 07.04.2016 PASSED BY CIT(APPEALS ), KOTA FOR THE A.Y. 2011-12. FURTHER RESPECTFULLY FOLLOWING THE D ECISION OF HONBLE JAIPUR TRIBUNAL IN CASE OF 1.ACIT VS RAM KISHAN VER MA (2011) 30CCH 0561 JAIPUR TRIB AND OTHERS AS RELIED UPON BY THE A /R, THE CLAIM OF DEPRECIATION AT THE RATE OF 60% ON UPS IS ALLOWED T O THE APPELLANT. ACCORDINGLY, THIS ADDITION OF RS. 16,787/- IS DELET ED.' THEREFORE, THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THIS TRIBUNAL AND IN ABSENCE OF ANY CONTRARY PRECEDENT, WE DO NOT FIND AN Y ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) QUA THIS ISSUE. HENCE, THIS GROUND OF THE REVENUES APPEAL STANDS DISMISSED. 55. GROUND NO. 11 OF THE APPEAL IS REGARDING THE DI SALLOWANCE OF FOREIGN TRAVEL EXPENSES. THE ASSESSING OFFICER HAS HELD THA T THE ASSESSEE HAS ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 148 INCURRED RS. 24,81,684/- TOWARDS FOREIGN TRAVEL EXPE NSES IN RESPECT OF THE VISITS OF THE DIRECTORS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PERSONAL NATURE OF EXPENDITURE CANNOT BE RULED OUT AND ACCORDINGLY DISALLOWED 15% OF THE EXPENDITURE AMOUNTING TO RS. 3 ,72,253/-. ON APPEAL, THE LD CIT(A) HAS DELETED THE DISALLOWANCE AN D ALLOWED THE CLAIM. 56. WE HAVE HEARD THE LD. CIT-DR AS WELL AS THE LD. AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. CIT-DR HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER WHEREAS THE LD. AR HAS SUBMITTED THAT THE FOREIGN TRAVELS WERE MADE ONLY FOR THE BUS INESS PURPOSES WHICH IS ALSO NOT DISPUTED BY THE ASSESSING OFFICER BUT THE ASSESSING OFFICER HAS MADE 15% DISALLOWANCE ONLY ON THE GROUND OF PERSONAL NATURE OF EXPENDITURE. THE ASSESSEE BEING A COMPANY AND ARTIF ICIAL PERSON, THEREFORE, CANNOT BE PERSONAL EXPENDITURE OF THE CO MPANY. 57. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD AT THE OUTSET WE NOTE THAT ONCE THE ASSESS ING OFFICER HAS NOT POINTED OUT SPECIFIC INSTANCE OF POSSIBILITY OF PER SONAL NATURE OF EXPENDITURE, THE AD HOC DISALLOWANCE OF 15% ON MERE POSSIBLE IS NOT JUSTIFIED. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE I N PARA 14.1 TO 14.3 AS UNDER: 14.1 AS MENTIONED IN THE ASSESSMENT ORDER AT PAGE NO. 5-6, AO MADE DISALLOWANCE OF RS. 3,72,253/- ON ESTIMATE BASIS IN RESPECT OF FOREIGN ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 149 TRAVELLING EXPENDITURE THE AO DISALLOWED 15% OF THE SE EXPENSE ON ACCOUNT OF PERSONAL USE. ACCORDING TO AO, THESE EXP ENSES ARE NOT BIFURCATED INTO BUSINESS AND NON-BUSINESS USE AND P ERSONAL USE CANNOT BE RULED OUT IN RESPECT OF THESE EXPENSES. A CCORDINGLY, HE MADE DISALLOWANCE OF RS. 3,72,253/-. 14.2 THE A/R OF THE APPELLANT ATTENDED THE PROCEEDI NGS AND MADE SUBMISSIONS AS FOLLOWS: THE APPELLANT COMPANY HAS INCURRED EXPENSES ON FOR EIGN TRAVELLING TO EXPLORE OUR PRODUCT FOR EXPORT MARKET TO VARIOUS COUNTIES. A PART OF FOREIGN TRAVELLING EXPENSES WAS INCURRED FOR IMPORT OF MACHINERY, SPARE PARTS OF MACHINERY AND R AW MATERIALS. A STATEMENT MADE BY THE COMPANY DURING T HE YEAR UNDER ASSESSMENT HAS BEEN SUBMITTED TO THE AO DURIN G THE ASSESSMENT PROCEEDINGS. YOU ARE REQUEST TO ALLOW TH E SAME AS BUSINESS EXPENSES AND THE SAME HAVE BEEN INCURRED D URING THE YEAR FOR THE PURPOSE OF BUSINESS. THE LD AO DID NOT APPRECIATE THE JUSTIFICATION SUBMITTED BY THE APPELLANT COMPAN Y IN THIS RESPECT A COPY OF THE SAME IS ANNEXED HEREWITH AT P AGE NO 114- 117 OF PB-1. THE SAME ISSUE WAS CONSIDERED FAVORABLY FOR THE AP PELLANT COMPANY IN THE APPEAL ORDER NO 49/14-15 DATED 07.04 .2016 ISSUED BY CIT (APPEALS), KOTA FOR THE AY2011-12. TH US THE EXPENSES MAY BE ALLOWED. 14.3 I HAVE CONSIDERED THE RIVAL SUBMISSION AND MAT ERIAL PLACED ON RECORD. IN MY CONSIDERED VIEW, THE ISSUE REMAINS DECIDED IN FAVOUR OF THE APPELLANT, IN APPELLANTS OWN CASE FOR A.Y. 2011-12 IN APPEAL NO. 49/14-15 DATED 07.04.2016 PASSED BY CIT (APPEALS), KOTA FOR THE A.Y. 2011-12. IN VIEW OF THE SAID DECISION AND FURTHER I N THE ABSENCE OF ANY SPECIFIC CASE OF NON-BUSINESS USE MADE BY THE A O, THIS ADDITION OF RS. 3,72,253/- IS DELETED. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 150 THUS, AN IDENTICAL ISSUE WAS DECIDED IN THE A.Y. 2011 -12, WHICH WAS NOT CHALLENGED BY THE REVENUE BEFORE US. HENCE, WE DO NO T FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) Q UA THIS ISSUE. 58. GROUND NO. 12 OF THE APPEAL IS REGARDING DISALL OWANCE OF PROFESSIONAL SERVICE CHARGES BEING PRIOR YEARS. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED AN EXPENDITURE OF RS. 24,720/- ON ACCOUNT OF PROFESSIONAL SERVICE CHARGES. SINCE THESE PROFES SIONAL SERVICE CHARGES WERE PAID IN RESPECT OF THE APPEAL OF THE ASSESSMENT YEAR 2010-11 AND 2011-12 AND THEREBY CONSIDERED THE SAME AS PRIOR PE RIOD EXPENDITURE. ON APPEAL, THE LD. CIT(A) HAS ALLOWED THE CLAIM BY CONS IDERING THE FACT THAT THE APPEAL WAS DECIDED DURING THE YEAR UNDER CONSIDE RATION AND THE BILL WAS RAISED BY THE PROFESSIONALS DURING THE YEAR UNDE R CONSIDERATION. 59. WE HAVE HEARD THE LD. CIT-DR AS WELL AS THE LD A R OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. CIT(A) HAS CONSIDERED THE DECIDED THIS ISSUE IN PARA 15.3 AS U NDER: '15.3 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL PLACED ON RECORDS. IT IS SEEN FROM THE PAPER BOOK PAGE NO. 114-117, TH AT EXPENDITURE IN CONSIDERATION ARE IN RELATION TO PERSONAL APPEARANC E VIDE BILL DATED 08.01.2013. THEREFORE, MERELY ON THE GROUND THAT PE RSONAL APPEARANCE PERTAINED TO EARLIER YEARS ASSESSMENT/OTHER PROCEE DINGS, THE EXPENDITURE CANNOT BE TERMED AS PRIOR PERIOD EXPEND ITURE. FURTHER THE BILL FOR THE SAID PROFESSIONAL SERVICES WERE RECEIV ED DURING THE YEAR ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 151 UNDER CONSIDERATION ONLY, THEREFORE, IT CANNOT BE T REATED AS PRIOR PERIOD EXPENSES. IN VIEW OF THE REASONS AND FINDINGS AS AB OVE, THIS ADDITIONS OF RS. 24,720/- IS DELETED.' THUS, THE BILL FOR PROFESSIONAL SERVICE WAS RAISED B Y THE PROFESSIONAL ON 08/1/2013 WHO HAS APPEARED ON BEHALF OF THE ASSESSEE IN THE APPEALS PENDING. THOUGH THE APPEALS WERE PERTAINING TO THE E ARLIER YEAR, HOWEVER, THE EXPENDITURE IS CRYSTALLIZED ONLY WHEN THE MATTER WAS FINALIZED AND THE BILL WAS RAISED BY THE PROFESSIONAL SERVICE PROVIDER . HENCE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT( A) QUA THIS ISSUE. 60. IN THE APPEAL FOR A.Y. 2015-16, THE ASSESSEE HA S RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ID. CIT (A) ERRED IN NOT DECLARING THE ASSESSMENT O RDER AS BAD IN LAW AND VOID AB INITIO. THE FINDINGS OF ID CIT(A) I N THIS REGARD ARE PERVERSE AND ERRONEOUS. IT IS CONTENDED THAT THE ID . AO PASSED THE ASSESSMENT ORDER AGAINST THE DOCTRINE OF AUDI ALTERM PARTEM, VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPPORTUNITY OF CROSS EXAMINATION OF THE ALLEGED ACCOMMODATION ENTRY PROVIDERS, THEREFORE THE ASSESS MENT ORDER OUGHT TO HELD AS BAD IN LAW AND DESERVES TO BE ANNU LLED. 2. THAT THE ORDER OF THE ID CIT (A), CONFIRMING THE ADDITION MADE BY THE AO IS ARBITRARY, WHIMSICAL, CAPRICIOUS, PERVERS E, BASED ON NO EVIDENCE OR IRRELEVANT MATERIAL OR IRRELEVANT EVIDE NCE, AND AGAINST THE LAW AND FACTS OF THE CASE. THE ADDITION CONFIRM ED BY LD.CIT (A) DESERVES TO BE DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT (A) ERRED IN CONFIRMING THE ADDITIONS MADE U/S 68 OF THE INCOME TAX ACT, 1961 BY : - ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 152 A) SOLELY RELYING ON THE STATEMENTS OF SOME ALLEGED ACCOMMODATION ENTRY PROVIDERS RECORDED BY SOME OTHE R AUTHORITIES IN SOME OTHER CASES/ACTIONS AND THE OPP ORTUNITY TO CROSS EXAMINATION WAS ALSO NOT PROVIDED TO ASSES SEE. B) GIVING A CONTRADICTORY FINDING THAT A DOUBT IS RAISED ON THE IDENTITY AND GENUINENESS OF THE COMPANY WHOSE NAME IS MENTIONED IN THE STATEMENT OF ACCOMMODATION ENTRY PROVIDERS AS WELL AS REPORTS OF DDIT (INV.)-KOLKATT A. C) HOLDING THAT THE ASSESSEE HAS NOT ADDUCED ANY EV IDENCE TO REBUT THE ADVERSE FACTUAL FINDING MADE BY THE AO IN THE ASSESSMENT ORDER THOUGH DETAILED PAPER BOOK FOR REL EVANT AY AND COMMON PAPER BOOKS HAVE BEEN SUBMITTED, AND D) HOLDING THAT INCRIMINATING MATERIAL HAD BEEN FOU ND DURING THE COURSE OF SEARCH OF ACCOMMODATION ENTRY PROVIDE R. FURTHER INCRIMINATING MATERIAL HAD BEEN GATHERED BY ISSUING COMMISSION TO DDIT (INV.) KOLKATTA. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(A) ERRED IN CONFIRMATION THE ADDITION OF RS . 14,40,00,000/- MADE BY ID. AO U/S 68 OF INCOME TAX ACT, 1961 ON AC COUNT OF SPECIAL DEPOSIT RECEIVED FROM FOLLOWING PARTIES AND ERRONEOUSLY HELD THAT THE IDENTITY, CREDITWORTHINESS AND GENUIN ENESS OF THE UNDER MENTIONED COMPANY IS DOUBTFUL: - NAME OF THE COMPANY FROM WHOM LOAN RECEIVED AMOUNT NAME OF ALLEGED ENTRY OPERATOR WHOSE STATEMENT WERE RELIED CAPLIN DEALCOM PVT. LTD 14,40,00,000 SHRI ANKIT BAGRI 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(A) ERRED IN REJECTING THE THEORY OF PEAK CR EDIT AND ERRED IN NOT ALLOWING THE BENEFIT OF TELESCOPING, RECYCLING AND ROTATION OF FUNDS. 6. THE ASSESSEE PRAYS FOR LEAVE TO ADD, TO AMEND, T O DELETE, OR MODIFY THE ALL OR ANY GROUNDS OF APPEAL ON OR BEFOR E THE HEARING OF APPEAL. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 153 61. GROUND NO. 1 OF THE APPEAL IS REGARDING VIOLATI NG THE PRINCIPLES OF NATURAL JUSTICE FOR NOT GRANTING OPPORTUNITY TO CRO SS EXAMINATION. 62. WE HAVE HEARD THE LD AR AS WELL AS THE LD. CIT-D R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THIS GROUND OF APPE AL IS COMMON TO THE APPEALS OF ASSESSEE FOR THE A.Y. 2010-11 TO 2012-13 AS WELL AS THE IN THE C.O. OF THE ASSESSEE, THEREFORE, IN VIEW OF OUR FIND ING ON THIS ISSUE FOR THE A.Y. 2010-11 AS WELL AS THE C.O. OF THE ASSESSEE FOR THE A.Y. 2011-12 AND 2012-13, THE SAME IS DECIDED IN FAVOUR OF THE ASSES SEE AND AGAINST THE REVENUE. 63. GROUNDS NO. 2 TO 5 OF THE APPEAL ARE REGARDING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNSECURED LO AN FROM M/S CAPLIN DEALCOM PVT. LTD. 64. WE HAVE HEARD THE LD AR AS WELL AS THE LD. CIT-D R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFIC ER HAS MADE THIS ADDITION BASED ON THE STATEMENT OF SHRI ANKIT BAGRI AS IT WAS MADE IN THE A.Y. 2013-14. IN VIEW OF OUR FINDING ON THIS ISSUE O F AMOUNT RECEIVED FROM M/S CAPLIN DEALCOM PVT. LTD. FOR THE A.Y. 2013-14, THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 154 65. GROUND NO. 6 OF THE ASSESSEES APPEAL IS REGARD ING DENIAL OF BENEFIT OF TELESCOPING, RECYCLING AND ROTATION OF FUNDS BY REJECTING THE PEAK CREDIT THEORY. THIS ISSUE HAS BEEN CONSIDERED BY US WHILE DE CIDING GROUND NO. 6 OF THE ASSESSEES APPEAL FOR THE A.Y. 2010-11. ACCO RDINGLY, IN VIEW OF OUR FINDING ON THIS ISSUE FOR THE A.Y. 2010-11, GROUND NO. 6 OF THE ASSESSEES APPEAL IS INFRUCTUOUS. 66. IN THE CROSS APPEAL FOR THE A.Y. 2015-16, THE R EVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F RS. 12,50,00,000/- MADE BY THE AO U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS CLAIMED TO HAVE OBTAINE D BY THE ASSESSEE FROM M/S MAGNATE CAPITAL MARKET LTD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS BY OBSERVING THAT THE ALLEGED LENDER M/S MAGNATE CA PITAL MARKET LTD. IS NOT SHELL COMPANY WITHOUT CONSIDERING THE F INANCIAL STATEMENTS OF THIS COMPANY. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S MAGNATE CAPITAL M ARKET LTD. MERELY FOR THE REASON THAT EVIDENCES IN THE FORM OF STATEMENT ON OATH OF THE RELEVANT ENTRY OPERATORS WERE NOT AVAIL ABLE ON RECORD. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S MAGNATE CAPITAL M ARKET LTD. DESPITE THE FACT THAT THE DIRECTOR OR PRINCIPAL OFF ICER OF THIS COMPANY WAS NEVER PRODUCED BEFORE THE ASSESSING OFF ICER FOR EXAMINATION DESPITE NUMBER OF OPPORTUNITIES PROVIDE D BY THE AO ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 155 FOR PRODUCING AND ALSO IGNORING THE FACT THAT THE A SSESSEE NEITHER EXPRESSED ITS INABILITY IN PRODUCING THE LENDERS NO R PRODUCED THEM EITHER. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOAN CLAIMED TO HAVE OBTAINED FROM M/S MAGNATE CAPITAL M ARKET LTD., MERELY BY OBSERVING THAT THE ASSESSEE HAS COOPERATE D IN ASSESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE TH E DIRECTORS OF LENDER COMPANIES AND SOME DIRECTORS/OFFICERS WERE A LSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT EVEN THE DIRECT ORS WHICH WERE PRODUCED BEFORE THE AO FAILED TO SUBSTANTIATE THE G ENUINENESS OF THE ALLEGED TRANSACTIONS. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F UNSECURED LOANS BY OBSERVING THAT THE APPELLANT CANNOT BE FASTENED UPON THE BURDEN TO PRODUCE THE LENDERS BEFORE THE AO AND IN NOT CONSIDERING THE DECISION OF THE HONBLE SUPREME COU RT IN NAVODAYA CASTLE (P) LTD. VS CIT (2015) 56 TAXMANN.C OM 18(SC) WHEN THERE WERE GENUINE CONCERNS OF THE GENUINENESS OF THE TRANSACTIONS. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS. 1,34,751/- MADE BY THE AO ON ACCOUNT OF DEPRECIATIO N ON GUEST HOUSE BUILDING. 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS. 2,668/- MADE BY THE AO ON ACCOUNT OF EXCESS CLAIM OF DEPREC IATION ON UPS. 09. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS. 2,79,133/- MADE BY THE AO OUT OF FOREIGN TRAVEL EXP ENSES. 10. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS.15,000/- ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 156 MADE BY THE AO ON ACCOUNT OF PROFESSIONAL SERVICE C HARGES OF PRIOR YEARS. 11. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS. 58,770/- MADE BY THE AO ON ACCOUNT OF PRIOR PERIOD EXPENSES. THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 67. GROUND NOS. 1 TO 6 OF THE APPEAL ARE REGARDING THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT ON ACCOU NT OF UNSECURED LOAN RECEIVED FROM M/S MAGNATE CAPITAL MARKET LTD. THIS I SSUE OF IDENTITY, CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION WAS CONSIDERED BY US WHILE DECIDING THE IDENTICAL ISSUE IN THE APPEAL OF THE REVENUE FOR THE A.Y. 2013-14. ACCORDINGLY, IN VIEW O UR FINDING ON THIS ISSUE IN THE A.Y. 2013-14 AS WELL AS THE DECISION OF THE TR IBUNAL DATED 31/12/2018 IN THE CASE OF KOTA DALL MILL (SUPRA) WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) QUA THI S ISSUE. HENCE, THESE GROUNDS OF THE REVENUES APPEAL STAND DISMISSED. 68. GROUND NO. 7 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECIATION ON GUEST HOUSE WHICH WAS DELETED BY THE LD. CIT(A). THIS ISSUE IS COMMON TO THE ISSUE RAISED BY THE REVENUE FOR THE A.Y. 2013-14. WE HAVE CONSIDERE D THE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REV ENUE IN THE A.Y. 2013- ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 157 14. ACCORDINGLY THIS GROUND OF REVENUES APPEAL STA NDS DISPOSED OFF IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 69. GROUND NO. 8 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE OF HIGHER DEPRECIATION ON UPS. THIS ISSUE IS COMMON TO THE ISS UE RAISED BY THE REVENUE FOR THE A.Y. 2013-14. WE HAVE CONSIDERED TH E DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE I N THE A.Y. 2013-14. ACCORDINGLY THIS GROUND OF REVENUES APPEAL STANDS DISPOSED OFF IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 70. GROUND NO. 9 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE ON ACCOUNT OF FOREIGN TRAVEL EXPENSES. THIS ISSUE IS COMMON TO THE ISSUE RAISED BY THE REVENUE FOR THE A.Y. 2013-14. WE HAVE CONSIDERED TH E DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE I N THE A.Y. 2013-14. ACCORDINGLY THIS GROUND OF REVENUES APPEAL STANDS DISPOSED OFF IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 71. GROUND NO. 10 OF THE APPEAL IS REGARDING DISALL OWANCE ON ACCOUNT OF PROFESSIONAL SERVICE CHARGES. THIS ISSUE IS COMMON T O THE ISSUE RAISED BY THE REVENUE FOR THE A.Y. 2013-14. WE HAVE CONSIDERE D THE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REV ENUE IN THE A.Y. 2013- 14. ACCORDINGLY THIS GROUND OF REVENUES APPEAL STA NDS DISPOSED OFF IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 158 72. GROUND NO. 11 OF THE APPEAL IS REGARDING THE DI SALLOWANCE ON ACCOUNT OF PRIOR PERIOD EXPENDITURE. 73. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE CO MPANY HAS CLAIMED PRIOR PERIOD EXPENSES OF RS. 58,770/- WHICH IS NOT A LLOWABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT IT HAS PAID THE DEMAND OF ENTRY TAX RELATING TO FINANCIAL YEAR 2006-07 AND 2007-08 IN T HE YEAR 2011-12 AND DEBITED TO RECOVERABLE ACCOUNT ON ACCOUNT OF APPEAL WAS PENDING WITH COMMERCIAL TAXES DEPARTMENT. THE MATTER WAS DECIDED A GAINST THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AND CO NSEQUENTLY THE ASSESSEE HAS CLAIMED THE SAID AMOUNT AS EXPENSES. TH E ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESS EE AND MADE THE ADDITION ON THIS ACCOUNT. ON APPEAL, THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE. 74. BEFORE US, THE LD CIT-DR HAS SUBMITTED THAT ONC E THE EXPENDITURE IS PERTAINING TO THE PRIOR PERIOD BEING RELATING TO TH E F.Y. 2006-07 AND 2007- 08 THEN THE SAME CANNOT BE ALLOWED FOR THE YEAR UNDE R CONSIDERATION. HE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 75. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HA S SUBMITTED THAT AN IDENTICAL ISSUE WAS DECIDED BY THE LD. CIT(A) FOR TH E A.Y. 2011-12 IN FAVOUR ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 159 OF THE ASSESSEE AND THE REVENUE HAS NOT CHALLENGED THE SAME, THEREFORE, THE LD. CIT(A) HAS ALLOWED THIS CLAIM BY FOLLOWING THE EARLIER DECISION. HE HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 76. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THIS DE MAND OF ENTRY TAX PERTAINS TO THE F.Y. 2006-07 AND 2007-08, HOWEVER, S INCE THE APPEAL AGAINST THE DEMAND WAS PENDING BEFORE THE APPELLATE AUTHORITY AND ONLY AFTER THE CONCLUSION OF THE APPEAL, THE ASSESSEE HA S FINALLY DEBITED THE SAID EXPENDITURE IN THE P&L ACCOUNT AS IT WAS EARLIER KEP T UNDER THE RECOVERABLE ACCOUNT. THE LD. CIT(A) HAS CONSIDERED TH IS ISSUE IN PARA 12.2 AS UNDER: '12.2 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND M ATERIAL PLACED ON RECORDS. IT IS SEEN FROM THE PAPER BOOK PAGE NO. NO 144-146, TH AT EXPENDITURE IN CONSIDERATION ARE IN RELATION TO EARLIER EXPENSES B ILLED DURING THE YEAR UNDER CONSIDERATION. THE SAME ISSUE WAS CONSIDERED FAVORABLY FOR THE APPELLANT COMPANY IN THE APPEAL ORDER NO 49/14-15 D ATED 07.04.2016 ISSUED BY CIT(APPEALS), KOTA FOR THE A.Y. 2011-12 A COPY OF WHICH IS ANNEXED HEREWITH AT PAGE NO.148-161 OF PB. FOLLOWIN G THE SAME REASONING AND FINDINGS AS ABOVE, THIS ADDITIONS OF RS. 58,770/- IS DELETED.' THE LD. CIT(A) HAS RELIED UPON THE ORDER FOR THE A.Y. 2011-12 AND THE SAID ORDER OF THE LD. CIT(A) ALLOWING THE CLAIM FOR THE A .Y. 2011-12 HAS NOT BEEN CHALLENGED BY THE REVENUE. ACCORDINGLY, WE DO N OT FIND ANY ERROR OR ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 160 ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) QUA THIS ISSUE. HENCE, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 77. IN THE APPEAL FOR THE A.Y. 2016-17, THE REVENUE HAS RAISED FOLLOWING GROUNDS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE C1T(A) WAS JUSTIFIED IN DELETING THE ADDITION O F RS. 65,18,820/- MADE BY THE AO ON ACCOUNT OF INELIGIBLE CLAIM OF NO N-RECOVERABLE IEX CHARGES MADE BY THE ASSESSEE WHEN THE CONDITION S OF SECTION 36(2)(I) ARE NOT SATISFIED. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS JUSTIFIED IN DELETING DISALLOWANCE OF RS . 1,21,274/- MADE BY THE AO ON ACCOUNT OF DEPRECIATION ON GUEST HOUSE BUILDING. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 1,074/- MADE BY THE AO ON ACCOUNT OF EXCESS CLAIM OF DEPREC IATION ON UPS. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 2,27,487/- MADE BY THE AO ON ACCOUNT OF FOREIGN TRAVEL EXPENSE S. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 25,190/- MADE BY THE AO ON ACCOUNT OF PROFESSIONAL SERVICE C HARGES. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 42,000/- MADE BY THE AO ON ACCOUNT OF PRIOR PERIOD EXPENSES. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 1,64,836/- MADE BY THE AO OUT OF TELEPHONE & MOBILE PHONE CHAR GES. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 161 'THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 78. GROUND NO. 1 OF THE APPEAL IS REGARDING DISALLO WANCE OF NON- RECOVERABLE ELECTRICITY CHARGES PAID TO IEX OF RS. 65,18,820/- WRITTEN OFF. THE ASSESSEE HAS BEEN PURCHASING ELECTRICITY FROM OP EN ACCESS AND MAKING ADVANCE PAYMENTS TO JAIPUT VIDYUT VITRAN LTD . (JVVNL), HOWEVER, THE ACTUAL CONSUMPTION OF ELECTRICITY IN THE EARLIE R YEARS WAS LESS THAN THE PURCHASE OF ELECTRICITY BY THE ASSESSEE FROM OPEN A CCESS AND THAT HAS RESULTED EXCESS AMOUNT REMAINED DUE. SINCE THE ASSE SSEE COULD NOT RECOVER THE SAID EXCESS AMOUNT PAID FOR PURCHASE OF THE ELECTRICITY AS THERE WAS A LESS CONSUMPTION IN THE EARLIER YEARS, T HEREFORE, THE ASSESSEE HAS WRITTEN OFF THE BALANCE AMOUNT TOTAL OF RS. 65,1 8,820/- DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER HAS DISAL LOWED THE SAID CLAIM AND MADE THE ADDITION OF THE AMOUNT BY HOLDING THAT NON-RECOVERABLE IEX EXPENSES ARE NOT INCURRED DURING THE CURRENT FINANC IAL YEAR. THE ASSESSING OFFICER WAS OF THE VIEW THAT MERE WRITING OFF THE DEBT IN THE BOOKS OF ACCOUNT WOULD NOT SUFFICE FOR THE PURPOSE OF CLAIMIN G DEDUCTION OF BAD DEBTS. SINCE IEX CHARGES ARE NOT IN THE NATURE OF D EBT AND EXPENSES PERTAINED TO THE EARLIER YEAR I.E. A.Y. 2011-12 AND A.Y. 2012-13, THEREFORE, THE SAME IS NOT ALLOWABLE FOR THE YEAR UNDER CONSIDE RATION. ON APPEAL, THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 162 79. BEFORE US, THE LD. CIT-DR HAS SUBMITTED THAT TH ERE IS NO DISPUTE THAT THESE PAYMENTS WERE MADE BY THE ASSESSEE IN THE EARL IER YEARS FOR PURCHASE OF ELECTRICITY AND THEREFORE THE EXPENDITU RE PERTAINS TO THE EARLIER YEAR AND NOT FOR THE YEAR UNDER CONSIDERATION. FURT HER THIS AMOUNT WRITTEN OFF BY THE ASSESSEE IS NOT A BAD DEBTS BUT IT IS ON LY AN EXPENDITURE INCURRED BY THE ASSESSEE IN THE EARLIER YEARS. HENC E, THE CLAIM IS NOT ALLOWABLE FOR THE YEAR UNDER CONSIDERATION BEING THE PRIOR PERIOD EXPENDITURE. HE HAS RELIED UPON THE ORDER OF THE AS SESSING OFFICER. 80. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HA S SUBMITTED THAT AS PER THE PROCESS OF BUYING ENERGY FROM OPEN ACCESS T HE INTENDED BUYER AND SELLER SHALL HAVE TO GO THROUGH AN ENTITY WHO HA S BEEN ADMITTED BY THE POWER EXCHANGE AS A REGISTERED MEMBER. THE ASSESS EE WAS A REGISTERED 'GRID CONNECT CLIENT' OF INDIAN EN ERGY EXCHANGE' AND ITS TRANSACTION WERE EXECUTED ON EXCHANGE THROUGH E XCHANGE REGISTERED MEMBER M/S PARSHAVATH POWER PROJECTS P LTD. THE POWER WILL FLOW THROUGH THE EXISTING STU/CTU NETWORK DEPENDING ON THE LOCATI ON OF THE ENTITY'S INJECTION / DRAWL POINT. IN THE CASE OF ASSESSEE, TH E EXISTING STU AS 'JAIPUR VIDYUT VITRAN NIGAM LIMITED'. THE ASSESSEE USED TO I NFORM ITS DAILY REQUIREMENT FOR A DAY IN ADVANCE TO M/S PARSHAVATH POWER PROJECTS P LTD. WHO IN TURN WAS BUYING ENERGY FROM IEX ON ASSESSEE'S BEHALF FOR THE NEXT DAYS REQUIREMENT. THE ASSESSEE HAS BEEN PAYING ADV ANCE MONEY FOR THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 163 ELECTRICITY PURCHASED FOR THE NEXT DATE, THEREFORE, THE PURCHASES WERE MADE ON ESTIMATED REQUIREMENT WHILE ACTUAL CONSUMPTI ON WAS NOT ALWAYS SAME AND CONSEQUENTLY SOME UNITS REMAINED UNDERUTIL IZED. AS THE SELLER WAS INJECTING ALL SOLD ENERGY ON THE GRID POINT OF J VVNL, THEREFORE, THE CHARGES FOR UNDERUTILIZED ENERGY WAS TO BE REFUNDED BY THE JVVNL. IT WAS ALSO RESPONSIBILITY OF THE EXCHANGE REGISTERED MEMB ER M/S PARSHAVATH POWER PROJECTS P LTD. TO ARRANGE THE REFUND OF UNDER UTILIZED ENERGY BUT DESPITE THE BEST EFFORTS OF THE ASSESSEE IT COULD N OT GET THE REFUND OF EXCESS CHARGES IN RESPECT OF UNDERUTILIZED ENERGY. THE ASSESSEE HAS MADE ALL POSSIBLE EFFORTS AND PROLONGED FOLLOW UP WITH JVV NL BUT COULD NOT SUCCEED IN GETTING THE REFUND OF THE AMOUNT AND FIN ALLY THE SAID AMOUNT WAS WRITTEN OFF DURING THE YEAR UNDER CONSIDERATION. THE LD AR HAS FURTHER SUBMITTED THAT THE EXPENDITURE WAS INCURRED FOR THE PURPOSE OF BUSINESS IS NOT IN DISPUTE BUT THE ASSESSING OFFICER HAS DISALL OWED ONLY ON THE GROUND THAT IT WAS INCURRED FOR THE EARLIER YEARS AND NOT F OR THE YEAR UNDER CONSIDERATION. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF KOLKATA BENCHES OF THE TRIBUNAL DATED 26/4/2018 I N THE CASE OF KESORAM INDUSTRIES LIMITED VS ADDL.CIT 2018 (5) TMI 4 20 ITAT, KOLKATA. 81. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASS ESSEE HAS MADE PAYMENTS FOR PURCHASE OF ELECTRICITY FROM OPEN ACCE SS THROUGH IEX. THE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 164 DETAILS OF PAYMENT MADE BY THE ASSESSEE FOR PURCHAS E OF ELECTRICITY AND ACTUAL CONSUMPTION OF THE ELECTRICITY DURING THE F. Y. 2011-12AND 2012-13 ARE AS UNDER: FINANCIAL YEAR PAYMENT MADE FOR IEX TRADING TRANSFERRED IN ELECTRICAL EXPENSES BALANCE DUE 2 011 - 12 1,56,53,576/- 1,30,47,104/- 26,06,472/- 2012 - 13 1,74,18,236/- 1,35,05,889/- 39,12,347/- TOTAL 3,30,71,812/- 2,65,52,993/- 65,18,819/- THUS, IT IS CLEAR THAT THE PAYMENT MADE BY THE ASSES SEE FOR THE A.Y. 2011- 12 AND 2012-13 IS NOT IN DISPUTE THAT A TOTAL AMOUN T OF RS. 3,30,71,812/- WAS MADE AGAINST WHICH THE ASSESSEE HAS CONSUMED THE ELECTRICITY OF RS. 2,65,52,993/- AND THE ACTUAL CONSUMPTION IN AMOUNTS WERE CLAIMED IN THE P&L ACCOUNT FOR THE A.Y. 2012-13 AND 2013-14 RESPEC TIVELY. THERE IS UNDER UTILIZATION OF THE ELECTRICITY BY THE ASSESSEE FOR THESE TWO YEARS TO THE EXTENT OF TOTAL AMOUNT OF RS. 65,18,819/-. THE ASSE SSEE WAS UNDER THE BELIEVE THAT THE PAYMENT TOWARDS THE UNDERUTILIZED E NERGY WILL BE REFUNDED BUT FINALLY IT WAS LEARNT BY THE ASSESSEE T HAT THE SAID AMOUNT WOULD NOT BE REFUNDED TO THE ASSESSEE. THEREFORE, THE ASSESSEE HAS FINALLY WRITTEN OFF THE SAID AMOUNT DURING THE YEAR UNDER CO NSIDERATION. WE NOTE THAT THE PAYMENT MADE BY THE ASSESSEE FOR PURCHASE OF ELECTRICITY FROM OPEN ACCESS IS OTHERWISE AN ALLOWABLE EXPENDITURE BEI NG LAID OUT FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THE ONLY DISPU TE IS WHETHER THE EXCESS PAYMENT MADE BY THE ASSESSEE OVER AND ABOVE THE CONSUMPTION OF ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 165 ELECTRICITY CAN BE ALLOWED FOR THE YEAR UNDER CONSID ERATION AS WRITTEN OFF AMOUNT. ONCE THE SAID EXPENDITURE IS AN ALLOWABLE CL AIM FOR THE RESPECTIVE YEARS DURING WHICH THE PAYMENT WAS MADE FOR PURCHASE OF ELECTRICITY THEN THERE IS NO BAR FOR ALLOWING THE SAID EXCESS AMOUNT PAID BY THE ASSESSEE WHICH COULD NOT BE RECOVERED DUE TO THE COMPLICATION S INVOLVED IN THE PROCESS OF PURCHASE OF ENERGY FROM OPEN SOURCE AND TRANSMISSION OF THE SAME THROUGH VARIOUS INTERMEDIARIES AND WRITTEN OFF. EVEN OTHERWISE THE CLAIM OF THE ASSESSEE IS REVENUE NEUTRAL AS THE ASS ESSEE HAS ALSO PAID MAXIMUM MARGINAL RATE OF TAX FOR THE ASSESSMENT YEA R 2012-13 AND 2013- 14 DURING WHICH THE PAYMENT WAS MADE. ONCE THE EXPEND ITURE IS OTHERWISE AN ALLOWABLE BUSINESS EXPENDITURE THEN THE NON-RECOVERABLE AMOUNT WAS FINALLY WRITTEN OFF BY THE ASSESSEE IS AL LOWABLE AS BUSINESS LOSS INCURRED DURING THE COURSE OF BUSINESS OF THE ASSES SEE. THE ELECTRICITY IS AN ESSENTIAL REQUIREMENT OF THE ASSESSEE FOR CARRYING OUT THE MANUFACTURING ACTIVITY AND THEREFORE, THE EXPENDITURE INCURRED FO R PURCHASE OF ELECTRICITY CANNOT BE DISALLOWED MERELY ON TECHNICAL GROUNDS. THE LD. CIT(A) HAS DECIDED THIS ISSUE IN PARA 3.3 AS UNDER: '3.3 I HAVE CONSIDERED THE RIVAL SUBMISSION AND MAT ERIAL PLACED ON RECORD. IT IS SEEN THAT IN THE WRITTEN OFF OF NON RECOVERABLE IEX EXPENSES IS ACTUALLY THE ADVANCE PAYMENT MADE TO JVVL IN PREVIOUS YEARS FOR PURCHASES OF ELECTRICITY FROM OPEN ACCESS. THERE IS NO DISPUTE T HAT THE PAYMENTS WERE MADE IN RELATION TO BUSINESS EXPENDITURE AND THE GE NUINENESS OF THE PAYMENT IS ALSO NOT IN DOUBT. THERE IS ALSO NO DOUB T THAT THE WRITTEN OFF AMOUNT WAS NOT RECOVERABLE TO THE APPELLANT COMPANY . SINCE THE ADVANCE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 166 PAYMENT IT NOT CONSTITUTE ANY EXPENSES AT THE TIME OF ITS PAYMENT AND THE SAME CONSTITUTE AND CHARGED TO EXPENSES AS AND WHEN THE SERVICE OR GOODS AGAINST SUCH PAYMENT IS RECEIVED AND THE SAME IS AL SO CHARGED TO EXPENSES IN THE YEAR IN WHICH SUCH SERVICE OR GOODS IS RECEI VED. THEREFORE THE WRITTEN OFF OF SUCH ADVANCE IN CASE OF NON-RECOVERY OR NON- ADJUSTMENT IN SUBSEQUENT YEAR CANNOT BE LINKED FROM THE YEAR IN W HICH THE PAYMENT OF THE SAME WAS MADE. THE WRITTEN OFF OF SUCH ADVANCES CANNOT BE TREATED AS PERTAINING TO PREVIOUS YEARS MERELY ON THE GROUND T HAT THE PAYMENT OF THE SAME WAS MADE IN PREVIOUS YEARS AND THE SAME IS NOT PERTAINING FOR THE YEAR UNDER CONSIDERATION. IN THE CASE OF THE APPLIC ANT THE ADVANCE PAYMENT WAS TO BE RECOVERED BACK FROM JVVNL WHICH C OULD NOT BE RECEIVED, THEREFORE THE SAME WRITTEN OFF DURING THE YEAR. NO PERSON CAN EXPECT THAT THE ADVANCE GIVEN TO SOMEONE WILL NOT R ECOVERED AND FOR RECOVERY OF THE SAME SOME EFFORTS ARE TO BE MADE, T HEREFORE GENERALLY THE ADVANCE/DEBTS CANNOT BE WRITTEN OFF IN THE SAME YEA R. THE SAME ARE WRITTEN OFF IN THE YEAR WHEN THE APPLICANT AFTER AL L ITS EFFORTS FEELS THAT THE SAME CANNOT BE RECOVERED. THEREFORE IT IS NOT JUST IFY TO HOLD THAT SINCE THE ADVANCES WERE GIVEN IN PREVIOUS YEARS, THEREFORE TH E SAME PERTAIN TO EARLIER YEAR AND COMPANY WOULD HAVE CLAIMED IT IN R ELEVANT ASSESSMENT YEAR MORE SO WHEN IN THE RELEVANT ASSESSMENT YEAR T HE APPLICANT COMPANY WAS EXPECTING THE RECOVERY OR SUCH ADVANCE. FURTHER IN THE CASE OF WRITTEN OFF OF DEBTS/BUSINESS ADVANCE THE WRITTEN OFF THE S AME IN BOOKS OF ACCOUNTS IS SUFFICIENT AND THE SAME IS TREATED AS L OSS FOR THE APPLICANT COMPANY IN THE YEAR IN WHICH THE SAME IS WRITTEN OF F. IN VIEW OF ABOVE THE ADDITION OF RS. 65,18,820/- MADE IS HEREBY DELETED. THEREFORE THE GROUND NO. 2 OF APPEAL IS ALLOWED.' THE KOLKATA BENCHES OF THE TRIBUNAL IN THE CASE OF KE SORAM INDUSTRIES LTD. VS. ADDL.CIT (SUPRA) WHILE CONSIDERING THE ISSUE OF N ON-RECOVERABLE ADVANCE WRITTEN OFF AS HELD IN PARAS 13 TO 15 AS UND ER: 13. NOW WE TAKE UP REVENUE'S APPEAL IN ITA 1722/KOL/201 2 PREFERRED BY THE REVENUE. GROUND NO. 1 IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS. 1,65,748/- MADE ON ACCOUNT OF ADVANCES WRITTEN OFF. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY HAD WRITTEN OFF CERTAIN DEBIT BALANCES FROM ITS BALANCE SHEET AGGREGATING TO ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 167 RS. 1,65,748/- AND DEBITED IT TO ITS PROFIT AND LOS S ACCOUNT BEING NO LONGER RECOVERABLE. THE ADVANCES WRITTEN OFF COMPRISED OF THE UNADJUSTED BALANCES OF SUPPLIES OF RAW MATERIALS AND STORES WH ICH HAD REMAINED OUTSTANDING OVER A LONG PERIOD OF TIME WHICH WERE R AW MATERIALS/ITEMS OF STORES AND THE AMOUNT DUE FROM EXCISE AUTHORITIE S AND ACCORDING TO THE ASSESSEE, WHICH WAS ALSO NO LONGER RECOVERABLE TO IT. BEFORE THE A.O. THE BREAK-UP OF ADVANCES WRITTEN OFF AS AFORESAID W AS FURNISHED. THE A.O. OBSERVED THAT THE AMOUNTS IN QUESTION WERE NOT RECE IVABLE AS TRADING DEBTS BUT WERE OUTSTANDING ADVANCES AND DEPOSITS TH EREFORE, THE CLAIM OF THE ASSESSEE WAS UNTENABLE AND THESE SUMS DID NO T SATISFY THE CONDITIONS PRESCRIBED IN SECTION 36(2) READ WITH SE CTION 36(L)(VII) OF THE ACT. ON APPEAL, THE LD. CIT(A)-VI, KOLKATA FOLLOWIN G THE ORDER OF HIS PREDECESSOR FOR A.Y. 2006-07, DELETED THE DISALLOWA NCE MADE BY THE A.O. AGGRIEVED THE REVENUE IS BEFORE US. 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. WE NOTE THAT THE ISSUE UNDER DISPUTE IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE IN ITA NO. 931/KOL/ 2012 DATED 29.02.2016 FOR A.Y. 2005-06 WHEREIN ON IDENTICAL FA CTS AND CIRCUMSTANCES HELD AS UNDER: '8.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. WE FIND FROM THE FACTS OF THE CASE THAT THE DEPOSITS AND ADVANCES WERE GIVEN IN THE ORDINARY CO URSE OF BUSINESS AND WERE LYING IN THE BOOKS OF THE ASSESSEE COMPANY FOR QUITE A LONG TIME. THE SOME WERE CONSIDERED IRRECOVERABLE BY THE ASSESSEE AND HAD WRITTEN OFF THE SAME IN ASST YEAR 2005-06 AND H ENCE THE SAME IS TO BE CONSIDERED AS A TRADING LOSS U/S 28 OF THE AC T. WE HOLD THAT THE LEARNED CITA) HAD RIGHTLY DELETED THE ADDITION MADE IN THIS REGARD. ACCORDINGLY, THE GROUND NO. 1 RAISED BY THE REVENUE IS DISMISSED. 15. THE FACTS IN THE YEAR UNDER DISPUTE ARE ANALOGO US TO THAT IN THE EARLIER YEARS AND SINCE NO CHANGE IN A .V OR FACTS COULD BE POINTED OUT BY THE REVENUE SO RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA), WE ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 168 FIND NO INFIRMITY IN THE IMPUGNED ORDER OF LD. CIT( A), IN THIS REGARD. ACCORDINGLY GROUND NO.1 RAISED BY THE REVENUE IS DI SMISSED. ACCORDINGLY, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE L D. CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE. HENCE, THIS GROUND OF THE RE VENUES APPEAL IS DISMISSED. 82. GROUND NO. 2 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECIATION ON GUEST HOUSE WHICH WAS DELETED BY THE LD. CIT(A). THIS ISSUE IS COMMON TO THE ISSUE RAISED BY THE REVENUE FOR THE A.Y. 2013-14 AND 2015-16. WE HA VE CONSIDERED THE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE IN THE A.Y. 2013-14 AND 2015-16. ACCORDINGLY THIS GROUND O F REVENUES APPEAL STANDS DISPOSED OFF IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE. 83. GROUND NO. 3 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE OF HIGHER DEPRECIATION ON UPS. THIS ISSUE IS COMMON TO THE ISS UE RAISED BY THE REVENUE FOR THE A.Y. 2013-14 AND 2015-16. WE HAVE C ONSIDERED THE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE IN THE A.Y. 2013-14 AND 2015-16. ACCORDINGLY THIS GROUND O F REVENUES APPEAL STANDS DISPOSED OFF IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 169 84. GROUND NO. 4 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE ON ACCOUNT OF FOREIGN TRAVEL EXPENSES. THIS ISSUE IS COMMON TO THE ISSUE RAISED BY THE REVENUE FOR THE A.Y. 2013-14 AND 2015-16. WE HAVE C ONSIDERED THE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE IN THE A.Y. 2013-14 AND 2015-16. ACCORDINGLY THIS GROUND O F REVENUES APPEAL STANDS DISPOSED OFF IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE. 85. GROUND NO. 05 OF THE APPEAL IS REGARDING DISALL OWANCE ON ACCOUNT OF PROFESSIONAL SERVICE CHARGES. THIS ISSUE IS COMMON T O THE ISSUE RAISED BY THE REVENUE FOR THE A.Y. 2013-14 AND 2015-16. WE HA VE CONSIDERED THE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE IN THE A.Y. 2013-14 AND 2015-16. ACCORDINGLY THIS GROUND O F REVENUES APPEAL STANDS DISPOSED OFF IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE. 86. GROUND NO. 6 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE OF PRIOR PERIOD EXPENSES. THIS ISSUE IS COMMON TO THE ISSUE RAISED BY THE REVENUE FOR THE 2015-16. WE HAVE CONSIDERED THE DECIDED THI S ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE IN THE A.Y. 20 15-16. ACCORDINGLY THIS GROUND OF REVENUES APPEAL STANDS DISPOSED OFF IN F AVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 87. GROUND NO. 7 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE OF TELEPHONE AND MOBILE PHONE CHARGES. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 170 88. THE ASSESSING OFFICER HAS NOT DISCUSSED THIS ISS UE IN THE ASSESSMENT ORDER, HOWEVER, IN COMPUTATION OF INCOME, THE ASSESS ING OFFICER HAS MADE THE DISALLOWANCE OF RS. 1,64,836/- ON ACCOUNT OF TEL EPHONE AND MOBILE CHARGES. ON APPEAL, THE LD. CIT(A) HAS DELETED THE S AID DISALLOWANCE BY HOLDING THAT IT IS NOT JUSTIFIED. 89. WE HAVE HEARD THE LD. CIT-DR AS WELL AS THE LD A R OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. IT APPEARS THAT THE ASSESSING OFFICER HAS MADE PARTIAL DISALLOWANCE OF T ELEPHONE AND MOBILE EXPENDITURE ON THE GROUND OF PERSONAL USE. HOWEVER, THE ASSESSEE BEING A PUBLIC LIMITED COMPANY, THE EXPENDITURE CANNOT BE H ELD AS PERSONAL IN NATURE. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE IN PARA 9.3 AS UNDER: ' 9.3 I HAVE CONSIDERED THE RIVAL SUBMISSION AND MA TERIAL PLACED ON RECORD. IT IS SEEN THAT THERE IS NO DISCUSSION/FINDING IN THE ASS ESSMENT ORDER REGARDING THE ADDITION SO MADE. IN VIEW OF ANY FINDING IN THE ASSESSMENT ORDER REGARDING ADDITION SO MADE THE IMPUGNED ADDITION IS NOT JUSTIFIABLE. THEREFORE THE ADDITION OF RS. 1,64,836/- IS DELETED . THEREFORE THE GROUND NO. 8 AND 9 OF APPEAL IS ALLOWED.' EVEN OTHERWISE IN CASE OF A COMPANY IF ANY EMPLOYEE IS ENJOYING THE FACILITY OF TELEPHONE OF THE COMPANY, THE SAME WOULD BE TREATED AS PERQUISITE WHICH IS SUBJECT TO FRINGE BENEFIT TAX. T HEREFORE, NO DISALLOWANCE CAN BE MADE ON ACCOUNT OF PERSONAL ELEMENT OF EXPEN DITURE. HENCE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. ITA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 & CO 38 & 39/JP/2018 MULTIMETALS LTD, VS DCIT 171 90. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE A RE PARTLY ALLOWED, CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED AND ALL THE A PPEAL OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29 TH JANUARY, 2019. *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S MULTIMETALS LIMITED, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE D.C.I.T., CENTRAL CIRCLE, KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NOS. 1024 TO 1026, 1100 TO 1004 & 1230/JP/2018 & CO 38 & 39/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR
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