M/s Brijwasi Impex Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 8/DEL/2013

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0003 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-01-2017
• Assessment Year: 2000-2001
• Appeal Filed On: 17-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A MISRA
• Keywords: Unexplained cash credit; Reasonable cause; Corroborative evidences; Accommodation entries; Condonation of delay; Ignorance of law
• Section: 143(3); 153A; 32; 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A , NEW DELHI BEFORE SH. R. S. SYAL, AM AND SH. A. T. VARKEY , JM ITA NO. 361 /DE L/2011 : ASSTT. YEAR : 2000 - 01 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 12, NEW DELHI VS M/S BRIJWASI IMPEX PVT. LTD., 1170, KUCHA MAHAJANI, CHANDNI CHOWK, DELHI (APPELLANT) (RESPONDENT) CO NO. 8 /DE L/201 3 : ASSTT. YEAR : 2000 - 01 M/S BRIJWASI IMPEX PVT. LTD., 1170, KUCHA MAHAJANI, CHANDNI CHOWK, DELHI VS DEPUTY COMMISSIONER O F INCOME TAX, CENTRAL CIRCLE - 12, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A ABCB7530L A SSESSEE BY : SH. RAJIV SAXENA , ADV. REVENUE BY : SH . A. MISRA , CIT DR DATE OF HEARIN G : 29 .09 . 2014 DATE O F PRO NOUNCEMENT : 30 . 9 .2014 ORDER P ER R. S. S YAL , AM: THIS APPEAL BY THE REVENUE AND CROSS O BJECTION BY THE ASSESSEE ARISE OUT OF THE ORDER PASSED BY CIT(A) ON 14.10.2010 IN RELATION TO THE A SSESSMENT YEAR 2000 - 01. 2 . FIRSTLY WE ARE TAKING UP THE CR OSS OBJECTION FILED BY THE ASSESSEE , WHICH IS TIME BARRED BY 683 DAYS. PLEADING FOR THE CONDONATION OF DELAY, ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 2 IT W AS STATED THAT THE ASSESSEE WAS NO T WELL AWARE OF THE TECHNICALITIES OF THE INCOME - T AX PROVISIONS AND NO CROSS OBJECTION WAS FILED BEFORE THE TRIBUNAL AS PER THE ADVICE GIVEN BY THE THEN C OUNSEL. IT WAS ONLY WHEN THE ASSESSEE ENGAGED THE NEW COUNSEL TO ARGUE ITS CASE BEFORE THE TRIBUNAL , THAT IT WAS LEARNT THAT THE CROSS O BJECTION (CO) OUGHT TO HAVE BEEN FILED IN RESPONSE TO THE REVENUE S AP PEAL . THAT IS HOW , THE LD. AR MADE OUT A CASE FOR THE CONDONATION OF DELAY ON THE BASIS OF THE MISTAKE COMMITTED BY THE EARLIER C OUNSEL AS CONSTITUTING A REASONABLE CAUSE WARRANTING ADMISSION OF THE CO . THE LD. DR STRONGLY OBJECTED TO THE CONDONATION O F DELAY. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTICED THAT THIS CROSS O BJECTION WAS FILED BELATE D LY BY ONE YEAR AND 318 DAYS. A REQUEST OF CON DONATION OF DELAY HAS BEEN MADE ON THE PLEA THAT THE EARLIE R C OUNSEL DID NOT PROPERLY GUIDE THE ASSESSEE . HOWEVER, NO AFFIDAVIT OF THE EARLIER C OUNSEL HAS BEEN PLACED ON RECORD TO SUBSTANTIATE THIS CONTENTION RAISED BEFORE US. APART FROM THIS SUBMISSION, NO OTHER ARGUMENT WAS RAISED WARRANTING CONDONATION OF DELA Y. 4. WE ARE REMINDED OF THE BINDING JUDGMENT OF THE HON BLE J URISDICTIONAL HIGH COURT IN SURENDRA BOV EJA VS CWT (2006) 287 ITR 52 (DELHI) IN WHICH ONE OF THE APPEALS W AS FILED LATE BY ONE YEAR AND 154 DAYS. TH E APPELLANT S REQUEST FOR THE CONDONATION OF DELAY WAS ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 3 TURNED DOWN BY THE HON BLE HIGH COURT. IN THIS JUDGMENT , T HEIR L ORDSHIP S HAVE HE LD THAT WANT OF DUE CARE, IGNORANCE OF LAW OR FAILURE TO SEEK LEGAL ADVICE ARE NOT SUFFICIENT GROUND S FOR CONDONATION OF DELAY. SIMILAR VIEW HAS BEEN TAKEN BY THE HON BLE MADRAS HIGH COURT IN MADHU DADHA VS ACIT (2009) 317 ITR 458 (MADRAS) . A THIRD MEMBER DECISION OF THE TR IB UNAL IN JCIT VS T FE LTD. (2007) 104 ITD 149 (CHENNAI) (TM) ALSO SUPPORT S THE SAME VIEW. 5 . ADVERTING TO THE FACTS OF THE INSTANT CASE , WE FIND THAT EXCEPT FOR A BALD SUBMISSION, THERE IS NOTHING ON RECORD TO SUBSTANTIATE THAT THE EARLIER COUNSEL DID NOT PROPERLY GUIDE THE ASSESSEE. T HE THEORY OF MISTAKE OF C OUNSEL PROPOUNDED BY THE ASSESSEE IS ABSOLUTELY WITHOUT ANY FOUNDATION. THE ASSER TION SO MADE IN THE APPLICATION FOR CONDONATION OF DELAY IS A MERE SELF SERVING STATEMENT. THE FURTHER ARGUMENT THAT THE APPELLANT WAS IGNOR ANT OF THE LEGAL PROVISION S ALSO DOES NOT STAND I N VIEW OF THE FACT THAT IT IS A P RIVATE LIMITED CO MPANY REGULARLY F ILING RETURNS OF INCOME . IN VIEW OF FOREGOING DISCUSSION , WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO SUBSTANCE IN THE PLEA FOR CONDONATION OF DELAY WHICH IS TO THE EXTENT OF ONE YEAR AND 318 DAYS. ACCORDINGLY, THE CROSS O BJECTION FILED BY THE ASSES SEE IS DISMISSED AS BARRED BY TIME. 6 . THE LD. AR THEN CONTENDED THAT IF THE CROSS O BJECTION WAS TO BE DISMISSED , TH E N ITS APPLICATION UNDER RULE 27 OF THE INCOME - TAX APPELLATE TRIBUNAL RULES, 1963, BE ADMITTED. ON THE BASIS OF THE GROUND ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 4 TAKEN IN SUCH APPLICATION , THE LD. AR CONTENDED THAT THE ASSESSMENT ORDER BE QUASHED BECAUSE THE SEARCH WARRANT WAS IN THE JOINT NAME; NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH; AND THE ORIGINAL ASSESSMENT FOR THE ASSESSMENT YEAR 2002 - 03 WAS ALREA DY MADE U/S 143(3) AND A DECISION WAS TAKEN BY THE LD. CIT(A) IN ASSESSEE S FAVOUR ON THE SAME ISSUE. 7 . BEFORE TAKING UP THE QUESTION OF ADMISSION OF THE ASSESSEE S APPLICATION UNDER RULE 27 OF THE ITAT RULE, 1963 , IT WILL BE APPOSITE TO NOT E THE MANDA TE OF THE R ULE AS UNDER: RESPONDENT MAY SUPPORT ORDER ON GROUNDS DECIDED AGAINST HIM 27. T HE RESPONDENT, THOUGH HE MAY NOT HAVE APPEALED, MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM . 8. A BARE PERUSAL OF THE ABOV E RULE INDICATES THAT THE RESPONDENT CAN SUPPORT THE ORDER APPEALED AGAINST ON ANY GROUND WHICH WAS DECIDED AGAINST HIM. APPLYING IT TO THE PRESENT FACTUAL POSITION IN WHICH THE REVENUE HAS PREFERRED APPEAL, THE ASSESSEE CAN SUPPORT THE CONCLUSION DRAWN BY THE LD . CIT(A) BY CHALLENGING ANY DECISION TAKEN AGAINST HIM. IN ORDER TO INVOKE RULE 27, IT IS A SINE QUA NON THAT THERE MUST BE SOME FINDING AGAINST THE ASSESSEE IN AN APPEAL FILED BY THE REVENUE, WHICH CAN BE CHALLENGED BY THE ASSESSEE THROUGH APPLICA TION UNDER THE RULE. THE EXPRESSION ON ANY OF THE GROUNDS DECIDED AGAINST HIM THROWS AMPLE ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 5 LIGHT ON THE SCOPE OF APPLICATION UNDER THIS RULE. THERE HAS NECESSARILY TO BE SOME DECISION OF THE LD. CIT(A) AGAINST THE RESPONDENT WITH THE ULTIMATE CONCLUSION AGAINST THE APPELLANT. IT CAN BE CITED WITH AN EXAMPLE. WHEN THE AO REOPENS AN ASSESSMENT AND MAKES AN ADDITION ON A PARTICULAR ISSUE; AND IN THE FIRST APPEAL, THE ASSESSEE CHALLENGES BOTH THE INITIATION OF REASSESSMENT AND ALSO THE ADDITION ON MERITS. IF THE CIT(A) DELETES THE ADDITION ON MERITS BUT UPHOLDS THE VALIDITY OF INITIATION OF REASSESSMENT AND THE REVENUE FILES APPEAL AGAINST THE DELETION OF ADDITION ON MERITS, THEN THE ASSESSEE CAN TAKE RECOURSE TO RULE 27 TO SUPPORT THE ORDER OF THE CIT(A) IN DELETING THE ADDITION BY ARGUING THAT HE OUGHT TO HAVE DECIDED THE QUESTION OF INITIATION OF REASSESSMENT ALSO IN FAVOUR OF THE ASSESSEE. THIS ADVERSE DECISION AGAINST THE RESPONDENT CONSTITUTES THE BASIS FOR APPLICATION UNDER RULE 27. WE WANT TO CLARIFY THAT SUCH APPLICATION WILL ALSO EMBRACE NO DECISION ON AN ISSUE RAISED BEFORE THE FIRST APPELLATE AUTHORITY . THE CRUX OF THE MATTER IS THAT EITHER THERE SHOULD BE SOME GROUND DECIDED AGAINST THE RESPONDENT OR SOME GROUND TAKEN UP BEFORE THE LD. CIT(A) WH ICH WOULD HAVE REMAINED UNDISPOSED OFF. THE NATURAL COROLLARY WHICH , THEREFORE, FOLLOWS IS THAT THE ASSESSEE MUST HAVE RAISED A PARTICULAR GROUND BEFORE THE LD. CIT(A) WHICH SHOULD HAVE BEEN EITHER BEEN DECIDED AGAINST IT OR HA D REMAINED UNDECIDED. UNLESS THERE IS A SPECIFIC GROUND RAISED BEFORE THE LD. CIT(A), THERE CAN BE NO QUESTION OF TAKING RECOURSE TO THE RULE 27. ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 6 9 . ADVERTING TO THE FACTS OF THE INSTANT CASE , IT IS SEEN THAT THE ASSESSEE IN ITS APPLICATION UNDER RULE 27 HAS QUESTIONED THE VALIDITY O F THE ASSESSMENT ORDER ON THE FOLLOWING GROUND : - 1. THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 153 A IS BAD IN LAW AND REQUIRED TO BE QUASHED BECAUSE OF THE FOLLOWING AMONGST OTHER GROUNDS : - A. THE SEARCH WARRANT WAS IN THE JOINT NAME AND NO INCOM E OR PROPERTY WAS ASSESSED IN THE JOINT NAME DURING ASSESSMENT. B. THE SAME IS BASED ON NO SEARCH MATERIAL OR SEIZED DOCUMENT IN THE CASE OF THE ASSESSEE AND WITHOUT WHICH ASSESSMENT CANNOT BE MADE U/S 153A SPECIFICALLY WHEN THERE WAS A JOINT SEARCH WARRA NT AND JOINT PANCHNAMA. C. THE ORIGINAL ASSESSMENT FOR AY 2002 - 03 WAS ALREADY MADE U/S 143(3) WHICH WAS SUBSEQUENTLY DECIDED BY THE CIT(A) AND NO SUBSEQUENT APPEAL WAS FILED BY THE REVENUE DEALING WITH SIMILAR ISSUE IN DETAIL WHICH INCLUDES INVESTMENT MADE DURING THE YEAR ALSO. 10. WHEN THE LD. AR WAS DIRECTED TO INVITE OUR ATTENTION TOWARDS THE IMPUGNED ORDER DECIDING SUCH ISSUES AGAINST THE ASSESSEE, HE CANDIDLY ACCEPTED THAT THERE WAS NO ADVERSE FINDING GIVEN BY THE LD. CIT(A) ON THE ABOVE ISSUES. O N BEING CALLED UPON TO EXPLAIN AS TO HOW THE APPLICATION UNDER RULE 27 LIES IN THE ABSENCE OF ANY ADVERSE FINDING , THE ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 7 LD. AR CONTENDED THAT THE ASSESSEE HAD RAISED SUCH ISSUES BEFORE THE LD. FIRST APPELLATE AUTHORITY THROUGH GROUND NO. 1 OF ITS APPEAL, WH ICH REMAINED UNDISPOSED OFF . IT WILL NOT BE OUT OF PLACE TO REPRODUCE GROUND NO. 1 RAISED BY THE ASSESSEE BEFORE THE LD. CIT(A) , WHICH READS AS UNDER: - THE ASSESSING OFFICER HAD ERRED IN NOT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE OR THE SU BMISSION OF THE APPLICANT AND HAD FURTHER ERRED IN PASSING THE ORDER, WHICH IS BAD IN LAW AND ON FACTS . 11. A BARE PERUSAL OF THE ABOVE GROUND, WHICH HAS BEEN CLAIMED TO BE THE CORNERSTONE OF ITS APPLICATION UNDER RULE 27, MAKES IT IS MANIFEST THAT T HE SAME IS SIMPLY A GENERAL GROUND, WITHOUT ANY SPECIFIC LIMBS CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER ON THE COUNTS O N WHICH APPLICATION HAS BEEN MOVED UNDER RULE 27. WE ARE UNABLE TO APPRECIATE THE VIEW CANVASSED BY THE LD. AR IN MOVING APPLICA TION UNDER RULE 27 ON ISSUE S WHICH W ERE NOT AT ALL TAKEN UP BEFORE THE LD. CIT(A). NO MATERIAL HAS BEEN PLACED ON RECORD TO DEMONSTRATE THAT THE VALIDITY OF SEARCH WAS CHALLENGED BEFORE THE LD. CIT(A) ON ALL THE ISSUES NOW SOUGHT TO BE TAKEN UP BEFORE US. THE REASON FOR THE NO DISCUSSION OF SUCH ISSUES IN THE IMPUGNED ORDER IS THAT THESE WERE NOT AT ALL RAISED BEFORE THE LD. CIT(A) . I F SUCH ISSUES HAD ACTUALLY BEEN RAISED BEFORE THE LD. CIT(A) , THEN THE L EAS T TO BE EXPECTED OF THE ASSESSEE WAS THE MOVIN G OF A RECTIFICATION APPLICATION U/S 154 POINTING OUT HIS FAILURE IN DEALING ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 8 WITH SUCH ISSUES. NOTHING OF THE SORT HAS BEEN DONE IN THE INSTANT CASE. AS SUCH WE HOLD THAT THE ASSESSEE S APPLICATION UNDER RULE 27 OF THE ITAT RULE S , 1963 IS NOT MAINTA I NABLE BECAUSE THERE IS NO ADVERSE DECISION OF THE LD. CIT(A) ON THE ISSUES WHICH ARE NOW SOUGHT TO BE RAISED BEFORE US THROUGH THE APPLICATION. 12 . NOW WE TAKE UP T HE REVENUE S APPEAL HA VING FIVE GROUNDS. ALL THESE GROUNDS ARE AGAINST THE DELETION OF ADDITIO N OF RS. 50,00,000/ - MADE BY THE A.O ON ACCOUNT OF UNCONFIRMED , UNEXPLAINED AND UNVERIFIED SHARE CAPITAL IN THE BOOKS OF THE ASSESSEE. 1 3 . BRIEFLY STATED THE FACTS OF CASE ARE THAT A SEARCH ACTION U/S 1 32 WAS TAKEN ON THE ASSESSEE ON 9.12.2005. NOTICE U/ S 153A WAS ISSUED. THE ASSESSEE FILED RETURN DECLARING N IL INCOME. I T WAS OBSERVED THAT THE ASSESSEE HAD SHOWN A DVANCES FROM BODY C ORPORATE AMOUNTING TO RS. 50,00,000/ - . THE ASSESSEE WAS REQUESTED VIDE POINT 4 OF THE QUESTIONNAIRE DATED 27.11.2007 TO FURN ISH COMPLETE DETAILS IN RESPECT OF SUCH ADVANCES. THROUGH THIS POINT , THE ASSESSEE WAS REQUIRED TO FURNISH THE FOLLOWING INFORMATION : - A) NAME AND ADDRESS OF THE BODY CORPORATE FROM WHOM ADVANCE HAS BEEN RECEIVED. ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 9 B) COPY OF ACCOUNT OF THE BODY CORPOR ATE FROM WHOM ADVANCE HAS BEEN TAKEN FOR THE PERIOD 1.4.1999 TO 31.3.2000 AS APPEARING IN YOU R BOOKS OF ACCOUNT. C) MODE OF RECEIPT OF ADVANCE ALONG WITH COMPLETE DETAILS OF MODE OF RECEIPT OF ADVANCE I.E. CHEQUE/DRAFT OR OTHERWISE. 14 . THE ASSESSEE DID NOT FURNISH COMPLETE DETAILS AS REQUIRED THROUGH POINT 4 OF THE QUESTIONNAIRE. RESULTANTLY , THE ASSESSING OFFICE R TREATED THIS AMOUNT AS UNEXPLAINED CASH CREDIT AND MADE ADDITION . DURING THE COURSE OF THE F IRST A PPELLATE PROCEEDING S , THE ASSESSEE FURNISHE D CERTAIN DETAILS IN RESPECT OF SHARE APPLICATION MONEY RS. 50,00, 000/ - RECEIVED FROM SIX CORPORATE ENTITIES AS UNDER: SR. NO. NAME OF THE PRIVATE LIMITED COMPANY PAN AMOUNT OF SHARE APPLICATION MONEY RECEIVED 1 DATE BASE COMPUTERS PVT. LTD. F - 6, VIJAY C HOWK, LAXMI NAGAR, DELHI - 110092 AAACD2777L 6,00,000 2 CHOUDHARY CONSULTANTS PVT. LTD. F - 6, VIJAY CHOWK, LAXMI NAGAR, DELHI - 11 92 AAACC1931D 10,00,000 3 KULDEEP HARDWARE PVT. LTD. F - 6, VIJAY CHOWK, LAXMI NAGAR, DELHI - AAACK4882D 10,00,000 ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 10 110092 4 SELVEL FINANCIAL SERVICES PVT. LTD. 304E, 35, SHRI GANESH COMPLEX, JAWAHAR PARK, LAXMI NAGAR, DELHI - 110092 AAACS6929D 6,00,000 5 SUNRAYS CONSTRUCTION & MARKETING PVT. LTD. B - 63, SAFDARJUNG ENCLAVE, NEW DELHI AABCS8615H 15,00,000 6 TYAGI TRADING PVT. LTD. F - 6, VIJAY CHOWK, LAXMI NAGAR, DELHI - 110092 AAACT3944L 3,00,000 50,00,000 15 . CERTAIN OTHER SUPPORTING EVIDENCE WERE A LSO FILED BEFORE THE LD. CIT(A). ALL SUCH THINGS WERE SENT TO THE ASSESSING OFFICER FOR SUBMITTING THE REMAND REPORT. THE AO FURNISHED REMAND REPORT WHICH WAS RECEIVED BY THE LD. CIT(A) ON 12.3.2010. THE AO REPORT ED THAT SUMMONS U/S 131 OF THE ACT WERE SENT TO ALL THE SIX ENTITIES BUT NONE OF THEM APPEARED FOR HEARING. CONFIRMATION WAS RECEIVED FROM THREE PARTIES GIVEN AT SERIAL NOS. 1, 3 AND 6 OF THE ABOVE T ABLE. INSPECTOR OF INCOME - TAX WAS DEPUTED FOR CONDUCTING I NQUIRIES AND SERVING SUMMO NS TO ALL THE SIX PARTIES. THE I NSPECTOR REPORTED THAT HE VISITED PREMISES NO. F - 6, VIJAY CHOWK, LAXMI NAGAR, NEW DELHI FOR SERVING THE SUMMONS ON PART IES AT SERIAL NO. 1, 2, 3 AND 6 OF THE ABOVE T ABLE. ON VERIFICATION , IT WAS NOTICED ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 11 THAT NONE OF THE ABOVE NAMED COMPANIES EXISTED AT THE GIVEN ADDRESS FOR LAST SO MANY YEARS. THIS WAS REPORTED ON THE BASIS OF I NQUIRY CONDUCTED FROM ONE SHRI ASHO K TYAGI , A CHARTERED ACCOUNTANT RUNNING PROFESSION I N THE NAME OF M/S TYAGI AND TYAGI. AS REGARDS COMPANY AT SERIAL NO. 4 OF THE T ABLE , THE I NSPECTOR REPORTED THAT HE VISITED PREMISES NO. 304 E35, GANESH COMPLEX, JAWAHAR PARK, LAXMI NAGAR, NEW DELHI FOR SERVING THE SUMMONS U/S 131 OF THE ACT . ONE SHRI MAHESH SHARMA , RUNNING OFFICE OF A CHARTERED ACCOUNTANT , INTIMATED THAT NO COMPANY WITH THIS NAME EVER EXISTED AT THE GIVEN ADDRESS . IN THE LIKE MANNER, WHEN THE INSPECTOR VISITED THE PREMISES OF A COMPANY AT SERIAL N O. 5 OF THE T ABLE ABOVE, IT WAS FOUND THAT THE ADDRESS WAS INCOMPLETE INAS MUCH AS THERE WERE SUB - BLOCK S IN THE COLONY AND HE VISITED MANY SUB - BLOCKS LIKE B - 3/63, B - 1/63 BUT FOUND NO COMPANY WITH THIS NAME O N THE GIVEN ADDRESS. THE A.O S REMAND REPORT WAS G IVEN TO THE ASSESSEE FOR REJOINDER. THE ASSESSEE CONTENDED T HROUGH TWO REJOINDERS DATED 2.9.2010 AND 20.9.2010 THAT SINCE THE SHARE APPLICATION MONEY WAS RECEIVED THROUGH BANKING CHANNEL FROM ALL THE SIX ENTITIES WHO WERE HAVING REGULAR PERMANENT ACCOUNT N OS., THERE COULD BE NO CASE OF MAKING ANY ADDITION U/S 68. THE LD. CIT(A) GOT CONVINCED WITH THE ASSESSEE S SUBMISSION S AND DELETE D THE ADDITION. THE REVENUE IS AGGRIEVED AGAINST THE DELETION OF ADDITION OF RS. 50,00,00/ - . 16 . WE HAVE HEARD THE RIVAL SUBM ISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD IN THE LIGHT OF PRECEDENTS CITED BEFORE US. IT IS CLEAR ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 12 FROM THE RECORD OF PROCEEDINGS NOTED ABOVE THAT THE ASSESSEE DID NOT FURNISH COMPLETE DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN SUPPORT OF THE GENUINENESS OF THE SHARE APPLICANTS TOTALING RS. 50,00,000/ - . POINTED QUERIES RAISED BY THE ASSESSING OFFICER, AS REPRODUCED ABOVE, REMAINED UN - COMPLIED WITH. WHEN THE ASSESSEE FURNISHED DOCUMENTARY EVIDENCE BEFORE THE LD. CIT(A) IN SUPPORT OF THE GENUINENESS OF THE CREDITS, THE ASSESSING OFFICER IN REMAND PROCEEDINGS VENTURED TO CONDUCT INQUIRES FROM THE SIX COMPANIES WHO THE ASSESSEE CLAIMED TO HAVE G IVEN SHARE APPLICATION MONEY TO I T. FIRSTLY THE SUMMONS WERE ISSUED BY THE ASSESSING OFFICER TO AL L THE SIX COMPANIES , WHICH REMAINED UNCOMPLIED WITH. WHEN THE ASSESSING OFFICER DEPUTED INSPECTOR TO CONDUCT I NQUIRIES AT THE ADDRESS ES GIVEN BY THE ASSESSEE OF THESE SIX COMPANIES, IT TRANSPIRED THAT FIVE COMPANIES NEVER EXISTED AT THE GIVEN ADDRESS ES . AS REGARDS THE SIX TH COMPAN Y , NAMELY, M/S SUNRAYS CONSTRUCTION & MARKETING PVT. LTD. , T HE ADDRESS TURNED OUT TO BE INCOMPLETE. THE ATTEMPTS MADE BY THE INCOME - TAX INSPECTOR TO CURE SOME IRREGULARITY IN THE GIVEN ADDRESS, ALSO MET WITH FAILURE. WHEN THE A.O S REMAND REPORT WAS GIVEN TO THE ASSESSEE FOR REJOINDER, THE ASSESSEE KEPT ON HARPING ON THE DOCUMENTARY EVIDENCE IN SUPPORT OF THE GENUINENESS OF THE CREDIT S . T HE ASSESSEE DID NOT C O ME OUT WITH A PROPOSAL EITHER TO PRODUCE THE REPRESENTATIVE S OF THESE COMP ANIES , WHO WERE CLAIMED TO BE ITS SHAREHOLDERS OR TO GET THE NOTICES SERVED ON THEM ENABLING THE AO TO CONDUCT FURTHER INQUIRY. ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 13 17. AT THIS STAGE , IT IS RELEVANT TO MENTION THAT THE REVENUE HAS PLACED ON RECORD A LETTER DATED 0 9. 0 2.2012 ADDRESS ED TO THE TRIBUNAL IN RESPECT OF APPELLATE PROCEEDING IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004 - 05. THROUGH THIS LETTER IT HAS BEEN SUBMITTED THAT THE INVESTIGATION WING, NEW DELHI CARRIED OUT INVESTIGATION IN RESPECT OF ACCOMMODATION ENTRIES AND FOUND A LIST OF BENEFICIARIES WHO HAD TAKEN SUCH ACCOMMODATION ENTRIES. A CD CONTAINING S UCH LIST IS ALSO APPENDED ALONG WITH THIS LETTER. IT HAS BEEN MENTIONED THAT THE NAME OF THE ASSESSEE APPEARS IN THE LIST OF BENEFICIARIES AT SERIAL NO. 2889 TO 2906. THE SAID CD IS ALSO STATED TO CONTAIN THE STATEMENT OF MANOJ GUPTA AND HIS ASSOCIATES, WHO PROVIDE D ACCOMMODATION ENTRIES , INTER ALIA , TO THE ASSESSEE COMPANY. WE WANT TO MAKE IT CLEAR THAT THIS LETTER THOUGH PLACED IN THE PRESENT APPEAL FOLDER HAS BEEN W RITTEN IN RESPECT OF THE PROCEEDINGS FOR THE ASSESSMENT YEAR 2004 - 05 IN WHICH YEAR AGAIN THE ASSESSEE ALLEGEDLY RECEIVED SHARE APPLICATION MONEY. 18. COMING BACK TO THE FACTS OF THE INSTANT CASE IT IS SEEN THAT APART FROM PLACING ON RECORD SOME DOCUM ENTARY EVIDENCE IN SUPPORT OF THE GENUINENESS OF THE TRANSACTION OF RECEIPT OF SHARE APPLICATION MONEY, THE ASSESSEE FAILED TO PROVE THE VERY FIRST INGREDIENT OF SEC. 68 , BEING THE IDENTITY OF THE CREDITOR S . THE ADDRESSES OF THESE CORPORATE ENTITIES TURN ED OUT TO BE FAKE OR NOT AVAILABLE. IT IS BEYOND OUR COMPREHENSION AS TO ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 14 WHAT PREVENTED THE ASSESSEE TO PRODUCE THE REPRESENTATIVES OF SUCH COMPANIES BEFORE THE AO FOR VERIFICATION, MORE SPECIFICALLY, IF THEY WERE NOT STRANGERS BUT ITS SHAREHOLDERS. THE AO IN OUR CONSIDERED OPINION HAS SUCCESSFULLY PROVED THE NON - EXISTENCE OF SUCH COMPANIES. WHEN THE VERY IDENTITY OF A CREDITOR S IS NOT PROVED, THERE CAN BE NO WAY TO PROVE THE GENUINENESS OF TRANSACTIONS THROUGH THE DOCUMENTARY EVIDENCE SO AS TO COME OUT OF THE MISCHIEF OF SECTION 68 OF THE ACT. 1 9 . THE HON BLE JURISDICTIONAL H IGH COURT IN CIT VS NOVA PROMOTE RS AND FINLE A S E (P) LTD. (2012) 3 42 ITR 169 (DELHI) HAS UPHELD THE ADDITION U/S 68 OF THE ACT IN RESPECT OF SHARE APPLICATION MONEY WHEN THE ASSESSING OFFICER ISSUED SUMMONS WHICH WERE NOT SERVED AND THE INVESTIGATION PROVED THAT THE COMPANY ROUTED ITS OWN MONEY THROUGH NON EXISTING COMPANY USING THE BANKING CHANNEL IN THE SHAPE OF SHARE APPLICATION MONEY. THE ASSESSING OFFICER IN THAT CASE MADE THE ADDI TION AFTER CONDUCTING DUE I NQUIRY, WHICH WAS DELETED BY THE TRIBUNAL. REVERSING THE ORDER OF THE TRIBUNAL, THE HON BLE HIGH COURT RESTORED THE ADDITION. SIMILAR VIEW HAS BEEN TAKEN AGAIN BY THE HON BLE J URISDICTIONAL HIGH COURT IN THE CASE OF CIT VS EMPIRE BUILTECH PVT. LTD. (2014) 3 66 I TR 110 (DELHI ) . THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS TITAN SECURITIES LTD. (2013) 357 ITR 184 (DELHI) AND CIT VS YOUTH CONSTRUCTION PVT. LTD. (2013) 357 ITR 197 (DELHI) HAS UPHELD THE ADDITION MADE U/S 68 OF TH E ACT ON ACCOUNT OF SHARE APPLICATION MONEY IN RESPECT OF WHICH THE ASSESSEE FAILED TO PROVE THE EXISTENCE OF THE SHARE ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 15 APPLICANTS OR THE GENUINENESS OF THE CREDITS. ALL THE ABOVE DECISIONS ALONG WITH A CHAIN OF SUCH OTHER DECISION S ARE AUTHORITY FOR THE P ROPOSITION THAT WHERE SOME SHARE APPLICATION MONEY ETC. HAS BEEN SHOWN TO HAVE BEEN ALLEGEDLY RECEIVED BY THE ASSESSEE BUT ON THE I NQUIRY CONDUCTED BY THE ASSESSING OFFICER, IT TRANSPIRES THAT THE ALLEGED SHARE APPLICANTS ARE NON - EXISTENT, ADDITION U/S 68 OF THE ACT H AS TO FOLLOW NOTWITHSTANDING THE ASSESSEE PLAC ING ON RECORD THE DOCUMENTARY EVIDENCE ABOUT THE GENUINENESS OF THE TRANSACTION S . HERE WE WANT TO CLARIFY THAT IN ALL CASES WHERE SOME SHARE APPLICATION MONEY IS RECEIVED DO NOT AUTOMATICALLY FALL W ITHIN THE AMBIT OF SEC. 68. WHERE THE ASSESSING OFFICER, DESPITE INFORMATION ABOUT ACCOMMODATION ENTRIES , FAIL S TO MAKE ANY I NQUI RY AND SIMPLY MA K E S THE ADDITION BY RELYING ON THE REPORT OF THE INVESTIGATION WING ABOUT THE ACCOMMODATION ENTRIES, THEN NO AD DITION CAN BE SUSTAINED. THIS VIEW HAS BEEN TAKEN BY THE HON BLE DELHI HIGH COURT IN CIT VS FAIR FINVEST LTD. (2013) 357 ITR 146 (DELHI ) AND CIT VS OASIS HOSPITALITIES PVT. LTD. (2011) 333 ITR 119 (DELHI) . 20 . WHEN WE CONSIDER THE TWO SETS OF CASES, ONE I N WHICH ADDITION HAS BEEN UPHELD AND THE OTHER IN WHICH THE ADDITION HAS BEEN DELETED, THE LINE OF DISTINCTION BECOMES QUITE BRIGHT . WHERE THE ASSESSING OFFICER FAILED TO CONDUCT ANY INQUIRY AND SIMPLY MA D E THE ADDITION ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING , THEN SUCH ADDITION ITA NO. 361/DEL/2011 & CO 8/DEL/2013 BRIJWASI IMPEX PVT. LTD. 16 CAN NOT BE SUSTAIN ED . ON THE OTHER HAND, WHERE THE ASSESSING OFFICER CONDUCTED PROPER INQUIRY AND PROVED THAT THE SO CALLED SHARE APPLICANTS WE RE NON - EXISTING ENTITIES, THE ADDITION IS RIGHTLY CALLED FOR. WE FI ND THAT THE PRESENT CASE FALLS IN THE SECOND CATEGORY INAS MUCH AS THE ASSESSING OFFICER CONDUCTED DUE AND PROPER I NQUIRY WHICH TRANSPIRED THAT THESE SIX COMPANIES WERE NON - EXISTENT AND FURTHER THE ASSESSEE TOOK NO STEPS TO PROVE THE EXISTENCE OF SUCH COMPA N IES . WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER ON THIS ISSUE AND RESTORE THE ADDITION OF RS. 50,00,000/ - MADE BY THE ASSESSING OFFICER. 21 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED AND THE CO IS DISMISSED . ORDE R PRONOUNCED IN THE OPEN COURT ON 30 / 9 /2014. SD/ - SD/ - ( A. T. VARKEY ) (R. S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 /9/ 2014 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A PPEALS) 5. DR: ITAT ASSISTANT REGISTRAR