Sh. Arun Kumar Goyal, Chandigarh V. ITO, Chandigarh

ITA 1027/CHANDI/2008

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9852 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-06-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 26-11-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: ADITYA KUMAR
• Keywords: Accommodation entries
• Section: 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 1027/CHD/2008 ASSESSMENT YEAR: 2002-03 SHRI ARUN KUMAR GOYAL, VS THE ITO, HOUSE NO. 2172, WARD 3(3), SECTOR 22-C, CHANDIGARH. CHANDIGARH PAN: AAYPG0284G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR & SHRI ADITYA KUMAR RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 29.06.2016 DATE OF PRONOUNCEMENT : 30.06.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS), CHANDIGARH DATED 24.10.2 008 FOR ASSESSMENT YEAR 2002-03. 2. ON GROUND NO.1, ASSESSEE CHALLENGED THE RE-OPENI NG OF ASSESSMENT UNDER SECTION 148 OF THE INCOME TAX ACT. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE SAME GROUND, THEREFORE, THE SAME IS DISMISSED BEING NOT PRESSED. 2 3. ON GROUND NOS. 2 TO 4, THE ASSESSEE CHALLENGED T HE ADDITION OF RS. 26 LACS ON SUBSTANTIVE BASIS. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSING OFFICER NOTED ON PERUSAL OF THE BALANCE SHEET OF M/S G.A. ASSOCIATES OF WHICH ASSESSEE IS SOLE PROPRIETOR THA T AN AMOUNT OF RS. 26 LACS HAD BEEN SHOWN UNDER THE HEAD SUNDRY CREDITORS IN THE NAME OF M/S MORINDA OVERS EAS PVT. LTD. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE ATTENTION OF THE ASSESSEE WAS DRAWN TO THE STATEMEN T OF ASSESSEE DATED 12.03.2004 GIVEN ON OATH BEFORE DD IT (INVESTIGATION) WHEREIN THE ASSESSEE SUBMITTED THAT LOAN OF RS. 26 LACS WAS RAISED FROM M/S MORINDA OVERSEAS PV T. LTD. THE ASSESSEE WAS ASKED TO PROVE IDENTITY, CREDIT WO RTHINESS AND GENUINENESS OF THE TRANSACTION. THE ASSESSEE SUBMITTED THAT AMOUNT WAS RECEIVED FROM M/S MORINDA OVERSEAS PVT. LTD. THROUGH ACCOUNT PAYEE CHEQUES. IT WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. COP Y OF ROC WAS FILED. IT WAS SUBMITTED THAT THE CREDITOR IS IDENTIFIABLE PERSON. IF ASSESSING OFFICER WANTED T O EXAMINE THE GENUINENESS OF THE TRANSACTION, CREDITOR MAY BE SUMMONED TO EXPLAIN AND PROVIDE THE EVIDENCE OF TRANSACTION WHICH WAS ORIGINATED FROM THE BANK ACCO UNT OF THE CREDITOR. THE ASSESSING OFFICER CONFRONTED BAN K STATEMENT OF M/S MORINDA OVERSEAS PVT. LTD. WHEREIN THERE WERE CASH DEPOSITS BEFORE ISSUE OF THE CHEQUES. TH E ASSESSING OFFICER PROCURED COPY OF THE ASSESSMENT O RDER FOR ASSESSMENT YEAR 2002-03 IN THE CASE OF M/S MORINDA 3 OVERSEAS PVT. LTD. IN WHICH SUBMISSION WAS MADE BY THEM THAT THE CASH DEPOSIT OF RS. 1,00,55,500/- IN ACCOU NT NO. 50057 IN THE NAME OF M/S MORINDA OVERSEAS PVT. LTD. LUDHIANA BELONGS TO M/S SHERVILLA ESTATES PVT. LTD. AND THE ENTIRE AMOUNT WAS DEPOSITED BY THEM. THEY HAD GIVEN ACCOMMODATION ENTRIES ONLY. THE ASSESSING OFFICER MADE PROTECTIVE ADDITION OF THE SAME AMOUNT IN THE HANDS OF THE COMPANY. 4(I) THE ASSESSEE WAS CONFRONTED WITH THESE FACTS . THE ASSESSING OFFICER ASKED THE ASSESSEE AS TO WHY THE AMOUNT OF RS. 26 LACS ALLEGED TO BE RECEIVED FROM THE ABOV E LOANER, SHOULD NOT BE TREATED AS INCOME OF THE ASSESSEE. I T WAS SUBMITTED THAT THE AMOUNT OF RS. 1,00,55,500/- INCL UDES THE AMOUNT OF RS. 26 LACS GIVEN TO THE ASSESSEE BEL ONGS TO M/S SHERVILLA ESTATES PVT. LTD., THEREFORE, NO ADVE RSE INFERENCE SHOULD BE DRAWN. THE ATTENTION OF THE CO UNSEL WAS FURTHER DRAWN TO THE BANK STATEMENT OF THE ASSE SSEE AS IT WAS MUCH AFTER RECEIVING CHEQUE OF RS. 26 LACS F ROM M/S MORINDA OVERSEAS PVT. LTD. ONLY. RS. 20 LACS WAS TRANSFERRED TO M/S SHERVILLA ESTATES PVT. LTD. AND REMAINING AMOUNT OF RS. 6 LACS WAS GIVEN TO THE FAT HER OF THE ASSESSEE SHRI A.L.GOYAL. OUT OF RS. 20 LACS AD VANCED TO M/S SHERVILLA ESTATES PVT. LTD., RS. 6 LACS WERE RECEIVED BACK BY THE ASSESSEE. THE ASSESSING OFFICER DISCUS SED THE ENTIRE ISSUE IN THE ASSESSMENT ORDER. ASSESSEE'S C OUNSEL WAS MADE AWARE OF THE ORDER OF ASSESSING OFFICER IN THE CASE OF LOANER AS PER WHICH ADDITION WAS MADE ON 4 PROTECTIVE BASIS IN ITS CASE AND ASKED TO EXPLAIN W HY SUBSTANTIVE ADDITION OF RS. 26 LACS SHOULD NOT BE M ADE IN THE HANDS OF THE ASSESSEE. THE COUNSEL REPLIED THA T M/S MORINDA OVERSEAS PVT. LTD. HAVE STATED THAT CASH DE POSIT OF RS. 1,00,55,500/- IN ITS ACCOUNT INCLUDING RS. 26 L ACS TO THE ASSESSEE BELONG TO M/S SHERVILLA ESTATES PVT. L TD., SO NO ADDITION IS WARRANTED. THE ASSESSING OFFICER, H OWEVER, NOTED THAT ASSESSEE FAILED TO PROVE CREDIT WORTHINE SS AND GENUINENESS OF THE TRANSACTION WITH M/S MORINDA OVE RSEAS PVT. LTD. FROM WHOM ASSESSEE RECEIVED RS. 26 LACS. SINCE ASSESSEE FAILED TO PROVE THE TRANSACTIONS, THEREFOR E, RS. 20 LACS WERE ADDED ON PROTECTIVE BASIS AS SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF SHRI MUKESH MITTAL, RS. 6 LACS WERE ADDED ON SUBSTANTIVE BASIS, THEREBY TOTAL ADDI TION OF RS. 26 LACS WAS MADE IN THE HANDS OF THE ASSESSEE. 5. THE ADDITION WAS CHALLENGED BEFORE LD. CIT(APPEA LS) AND IT WAS SUBMITTED THAT ASSESSEE IS UNEDUCATED AN D INNOCENT PERSON AND ACTED AT THE BEHEST OF SOME OTH ER PERSONS WITHOUT INVOLVEMENT IN ANY TRANSACTION. M /S MORINDA OVERSEAS PVT. LTD. GIVEN RS. 26 LACS THROUG H BANK AND THE VERY SAME AMOUNT WAS CONSIDERED BY THE DEPARTMENT, BELONGS TO M/S SHERVILLA ESTATES PVT. LTD./SHRI MUKESH MITTAL AND THE AMOUNT WAS ONLY ROU TED THROUGH THE ACCOUNT OF THE ASSESSEE. WHOLE AMOUNT IS ALREADY ADDED IN THE HANDS OF M/S MORINDA OVERSEAS PVT. LTD. THEREFORE, SIMILAR ADDITION SHOULD NOT BE MAD E IN THE HANDS OF THE ASSESSEE. IT WAS SUBMITTED THAT THE A MOUNT 5 OF RS. 20 LACS WAS TRANSFERRED TO THE ACCOUNT OF M/ S SHERVILLA ESTATES PVT. LTD. WHICH IS ALREADY ADDED TO THE INCOME OF SHRI MUKESH MITTAL, THEREFORE, NO FURTHER ADDITION SHOULD BE MADE. 6. THE LD. CIT(APPEALS) CONSIDERING EXPLANATION OF THE ASSESSEE AND VARIOUS ASSESSMENT ORDERS IN THE CASES OF SHRI MUKESH MITTAL, M/S SHERVILLA ESTATES PVT. LTD. AND M/S MORINDA OVERSEAS PVT. LTD., DIRECTED TO MAKE EN TIRE ADDITION OF RS. 26 LACS ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE AND DISMISSED APPEAL OF THE ASSESSEE. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IDENTICAL ISSUE HAVE BEEN CONSIDERED IN THE CASE OF M/S BHAGWATI MOTORS VS ITO IN ITA 1084/2008 FOR ASSESSM ENT YEAR 2002-03 BY DIVISION BENCH OF ITAT CHANDIGARH A ND VIDE ORDER DATED 16.10.2015 DELETED THE SIMILAR IDE NTICAL ADDITION. THE FINDINGS OF THE TRIBUNAL IN PARAS 12 TO 15 ARE REPRODUCED AS UNDER : 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER HAS REFERRED TO VARIOUS ASSESSMENT ORDERS PASSED IN THE CASES OF AFORESAID COMPANIES AND THE PERSONS. COPY OF THE ASSESSMENT ORDER IN THE CASE OF M/S MORINDA OVERSEAS INDUSTRIES LTD. FOR ASSESSMENT YEA R IN APPEAL DATED 27.12.2006 HAS BEEN FILED WHICH REVEALED THAT AN ADDITION OF RS. 1,00,55,500/- HAS BEEN MADE BY ASSESSING OFFICER ON PROTECTIVE BASIS. M/S MORINDA OVERSEAS INDUSTRIES LTD. IN THEIR ASSESSMENT PROCEEDINGS HAS STATED THAT THE CASH DEPOSIT OF RS. 1,00,55,500/- IN THE ACCOUNT NO. 500 57 6 IN THE NAME OF M/S MORINDA OVERSEAS INDUSTRIES LTD. WITH STATE BANK OF PATIALA, SECTOR 8-C, CHANDIGARH BELONGS TO M/S SHARVILLA ESTATES PVT. LTD. AND THE ENTIRE AMOUNT WAS DEPOSITED BY THEM. THEY HAVE GIVEN ACCOMMODATION ENTRY ONLY. THE ASSESSING OFFICER, THEREFORE, ON THE BASIS OF SUCH FACTS RECO RDED IN THE ASSESSMENT ORDER THAT SINCE THE ASSESSEE M/S MORINDA OVERSEAS INDUSTRIES LTD. HAS ADMITTED THAT THE ENTIRE AMOUNT OF RS. 1,00,55,500/- BELONGS TO M /S SHARVILLA ESTATES PVT. LTD. AND ASSESSEE HAD ONLY GIVEN ACCOMMODATION ENTRY, THEREFORE, ASSESSMENT OF THIS AMOUNT WAS MADE ON PROTECTIVE BASIS IN THE HAN DS OF THIS COMPANY WITH FINDINGS THAT SUBSTANTIVE ADDITION SHALL BE MADE IN THE CASE OF M/S SHARVILLA ESTATES PVT. LTD. ACCORDING TO THE SUBMISSIONS OF BOTH PARTIES AND REPLY OF THE CONCERNED ASSESSING OFFICER ON RECORD, THE LD. CIT(APPEALS) DELETED THE ADDITION OF RS. 1,00,55,500/- IN THE CASE OF M/S MORINDA OVERSEAS INDUSTRIES LTD. AND NO SECOND APPEAL HAVE BEEN FILED BY THE DEPARTMENT BEFORE THE TRIBUNAL. THE ASSESSMENT ORDER IN THE CASE OF M/S SHARVILLA ESTATES PVT. LTD. DATED 27.12.2006 IS FIL ED ON RECORD WHICH REVEALED THAT ASSESSING OFFICER DID NOT MAKE ANY ADDITION IN THIS CASE. ACCORDING TO T HE STATEMENTS OF BOTH THE PARTIES, NO ACTION UNDER SECTION 263 HAVE BEEN TAKEN IN THIS CASE AND AS SUC H, THE ORDER IN THE CASE OF M/S SHARVILLA ESTATES PVT. LTD. ALLOWED TO BECOME FINAL WHO IS THE ULTIMATE BENEFICIARY OF PURCHASE OF THE PROPERTY. THE COPY OF THE ASSESSMENT ORDER IN THE CASE OF SHRI MUKESH MITTAL WHO IS ONE OF THE DIRECTORS IN M/S SHARVILLA ESTATES PVT. LTD. IS FILED IN THE PAPER BOOK WHICH IS DATED 27.12.2006, REVEALED THAT ASSESSING OFFICER MADE ADDITION OF RS. 1,07,05,000/- ON ACCOUNT OF UNEXPLAINED DEPOSIT IN BANK ACCOUNT NO. 445 IN CHANDIGARH STATE COOPERATIVE BANK, SECTOR 22, CHANDIGARH IN THE NAME OF M/S SHARVILLA ESTATES PVT . LTD. WHICH INCLUDES THE AMOUNT OF RS. 19 LACS IN TH E 7 CASE OF M/S BHAGWATI MOTORS. IT IS STATED THAT THE LD. CIT(APPEALS) IN THE CASE OF SHRI MUKESH MITTAL VIDE ORDER DATED 26.02.2008 DELETED THE ADDITION AND ALLOWED THE APPEAL OF THE ASSESSEE ON THE SAME FACT S. THE DEPARTMENTAL APPEAL IN THE CASE OF SHRI MUKESH MITTAL HAS BEEN DISMISSED BY THE TRIBUNAL VIDE ORDE R DATED 28.11.2008. IT IS STATED THAT DEPARTMENTAL APPEAL IS PENDING AGAINST THIS ORDER OF THE TRIBUNA L BEFORE HON'BLE HIGH COURT. 13. THE LD. CIT(APPEALS) ATTACHED THE LETTER DATED 08.04.2008 AS ANNEXURE WITH THE IMPUGNED ORDER WHICH IS WRITTEN BY M/S MORINDA OVERSEAS INDUSTRIES LTD. TO THE ASSESSEE M/S BHAGWARI MOTORS. THIS COMPANY HAS REFERRED TO LETTER OF THE ASSESSING OFFICER DATED 18.12.2006 REGARDING ACCOMMODATION ENTRY OF RS. 1,00,55,500/- IN WHICH THE ASSESSING OFFICER STATED THAT ALL THE CASH DEPOSITS WERE MADE BY SHRI MUKESH MITTAL IN THE BANK ACCOUNT. THEREFORE, IT IS PROPOSED TO MAKE PROTECTIVE ADDITION. IN THIS LETTER, M/S MORINDA OVERSEAS INDUSTRIES LTD. MADE I T CLEAR THAT THE ENTIRE CASH AMOUNT OF RS. 1,00,55,50 0/- WHICH INCLUDED THE AMOUNT OF RS. 39 LACS, CHEQUES O F WHICH WERE ISSUED IN FAVOUR OF M/S BHAGWATI MOTORS (ASSESSEE), WAS DEPOSITED FIRSTLY IN THE ACCOUNT OF M/S MORINDA OVERSEAS INDUSTRIES LTD. AND THEN TRANSFERRED TO THE BANK ACCOUNT OF M/S SHARVILLA ESTATES PVT. LTD., CHANDIGARH THROUGH VARIOUS ENTRIES. THE COPY OF THE LETTER OF THE ITO, WARD 6( 1) LUDHIANA DATED 18.12.2006 ISSUED AT ASSESSMENT STAG E IN THE CASE OF M/S MORINDA OVERSEAS INDUSTRIES LTD. IS ALSO ANNEXED WITH THE IMPUGNED ORDER IN WHICH TH E ASSESSING OFFICER ALSO MENTIONED THAT AMOUNT IN QUESTION WAS CASH DEPOSITED BY SHRI MUKESH MITTAL, THEREFORE, PROPOSED TO MAKE PROTECTIVE ADDITION IN THE CASE OF M/S MORINDA OVERSEAS INDUSTRIES LTD. 8 13(I) THE LD. CIT(APPEALS) FURTHER ANNEXED AFFIDAV IT OF SMT. RAJ BANS KAUR, DIRECTOR OF M/S MORINDA OVERSEAS INDUSTRIES LTD. IN WHICH SHE HAS CONFIRMED THAT ENTIRE CASH OF RS. 1,00,55,500/- IN THE ACCOUN T OF M/S MORINDA OVERSEAS INDUSTRIES LTD. BELONGED TO SHRI MUKESH MITTAL. THEREFORE, THE AMOUNT IN QUESTION OF RS. 39 LACS ALSO BELONG TO SHRI MUKESH MITTAL. THE CHEQUES OF RS. 39 LACS WERE ISSUED IN FAVOUR OF M/S BHAGWATI MOTORS (ASSESSEE) FROM THE ACCOUNT OF M/S MORINDA OVERSEAS INDUSTRIES L TD. OUT OF THE CASH DEPOSIT OF RS. 1,00,55,500/- WHICH WERE ULTIMATELY TRANSFERRED TO THE BANK ACCOUNT OF M/S SHARVILLA ESTATES PVT. LTD. WHOSE DIRECTORS WER E MRS. ALKA MITTAL, W/O SHRI MUKESH MITTAL AND SHRI RAJIV AGGARWAL, WHO IS REAL BROTHER OF MRS. ALKA MITTAL. IT WAS ALSO CONFIRMED THAT MODUS-OPERANDI FOLLOWED BY SHRI MUKESH MITTAL WAS THAT THE CASH WA S DEPOSITED IN THE ACCOUNT OF M/S MORINDA OVERSEAS INDUSTRIES LTD. BY HIS EMPLOYEES AND CHEQUES WERE ISSUED FROM THE ACCOUNT OF M/S MORINDA OVERSEAS INDUSTRIES LTD. TO VARIOUS DIFFERENT PERSONS INCLUD ING THE ASSESSEE FIRM M/S BHAGWATI MOTORS AND THEN THE AMOUNT WAS ROUTED TO THE ACCOUNT OF M/S SHARVILLA ESTATES PVT. LTD. VARIOUS ASSESSMENT ORDERS IN THE CASES OF BOTH THE COMPANIES IN QUESTION AND IN THE CASE OF SHRI MUKESH MITTAL AND THE LETTERS ISSUED B Y ASSESSING OFFICER AND AFFIDAVIT OF THE DIRECTOR OF M/S MORINDA OVERSEAS INDUSTRIES LTD. AND LETTER WRITTEN BY THIS COMPANY IN FAVOUR OF THE ASSESSEE, AS REFER RED TO ABOVE CLEARLY SUGGEST THAT THE MONEY OF RS. 39 LACS DID NOT BELONG TO THE ASSESSEE FIRM AT ALL. T HE ASSESSEE HAS BEEN USED AS A CONDUIT TO ROTATE THE MONEY IN QUESTION FROM M/S MORINDA OVERSEAS INDUSTRIES LTD. THROUGH SHRI MUKESH MITTAL TO THE ASSESSEE FIRM AND ULTIMATELY TO M/S SHARVILLA ESTAT ES PVT. LTD. THE ASSESSEE DID NOT SHOW THIS BANK ACCO UNT IN HIS BOOKS OF ACCOUNT BECAUSE THE TRANSACTION ROUTED THROUGH THIS BANK ACCOUNT WITH STATE BANK OF 9 INDIA, CHANDIGARH, DID NOT BELONG TO THE ASSESSEE FIRM. THE COPY OF THE BANK ACCOUNT IN QUESTION IS ALSO FILED AT PAGE 4 & 5 OF THE PAPER BOOK WHICH AL SO SHOWS THAT THE ACCOUNT WITH STATE BANK OF INDIA, CHANDIGARH WAS OPENED WITH RS. 5000/- AND M/S MORINDA OVERSEAS INDUSTRIES LTD. ISSUED THREE CHEQUES IN FAVOUR OF THE ASSESSEE FIRM FOR RS. 20 L ACS, 10 LACS AND 9 LACS AND THEREAFTER, THERE WERE TWO CLEARING ENTRIES MADE FOR RS. 20 LACS AND RS. 19 LA CS IN FAVOUR OF M/S SHARVILLA ESTATES PVT. LTD. AND TH EN THIS ACCOUNT WAS ULTIMATELY HAVING ZERO BALANCE I N AUGUST,2004. THUS, IN THIS BANK ACCOUNT IN QUESTIO N, ASSESSEE DID NOT CONDUCT ANY TRANSACTION FOR BUSINE SS PURPOSE BUT THERE WERE ENTRIES OF CHEQUES RECEIVED THROUGH CLEARING FROM M/S MORINDA OVERSEAS INDUSTRIES LTD. AND THEN THE SAME AMOUNT WAS TRANSFERRED TO M/S SHARVILLA ESTATES PVT. LTD. THE REVENUE DEPARTMENT WAS, THEREFORE, REQUIRED TO EXAMINE THE CHAIN OF TRANSACTIONS IN DETAIL IN THE CASES OF M/S MORINDA OVERSEAS INDUSTRIES LTD. AS WE LL AS IN THE CASE OF M/S SHARVILLA ESTATES PVT. LTD., BUT, IN BOTH THESE CASES, THE DEPARTMENT HAS NOT TAKEN A NY ACTION IN THE MATTER AND MERELY IN THE CASE OF M/S MORINDA OVERSEAS INDUSTRIES LTD., MADE PROTECTIVE ADDITION WHICH WAS ULTIMATELY DELETED AND NO SECOND APPEAL WAS FILED IN THIS CASE. IN THE ASSESSMENT O RDER OF THIS COMPANY, THE ASSESSING OFFICER HAS SPECIFICALLY NOTED THAT SUBSTANTIVE ADDITION SHALL BE MADE IN THE CASE OF M/S SHARVILLA ESTATES PVT. LTD. BUT NO ACTION IS TAKEN IN THE CASE OF M/S SHARVILLA ESTATES PVT. LTD. IT WAS ALSO NOTED IN THIS ASSESS MENT ORDER THAT CASH WAS DEPOSITED IN THE BANK ACCOUNT O F THIS COMPANY THROUGH THE EMPLOYEES OF SHRI MUKESH MITTAL. IT IS ADMITTED FACT THAT THE PROTECTIVE AD DITION OF RS.1,00,55,500/- INCLUDED THE AMOUNT OF RS. 39 L ACS IN QUESTION UNDER REFERENCE IN THIS APPEAL. THEREFORE, ONCE THE DEPARTMENT HAS TAKEN A VIEW THA T THE AMOUNT IN QUESTION BELONGS TO SHRI MUKESH MITTA L, 10 WHO IS ONE OF THE DIRECTORS OF M/S SHARVILLA ESTATE S PVT. LTD., THE DEPARTMENT SHOULD NOT CHANGE ITS STA ND LATER ON HOLDING THE ASSESSEE FIRM TO BE LIABLE FOR UNACCOUNTED MONEY OF RS. 39 LACS. 13(II) THE DEPARTMENT IS PURSUING THEIR DEPARTMENTA L APPEAL BEFORE HON'BLE HIGH COURT IN THE CASE OF SHR I MUKESH MITTAL, WOULD ALSO STRENGTHEN THE CASE OF TH E ASSESSEE FIRM THAT THE AMOUNT IN QUESTION DID NOT BELONG TO ASSESSEE FIRM. THERE IS NO EVIDENCE ON RECORD THAT ASSESSEE FIRM HAS TAKEN ANY LOAN OF RS. 39 LACS FROM M/S MORINDA OVERSEAS INDUSTRIES LTD. THE AUTHORITIES BELOW, MERELY ON ASSUMPTION OF CERTAIN FACTS WHICH ARE NOT PART OF THE RECORD, PRESUMED TH AT ASSESSEE HAS TAKEN LOAN OF RS. 39 LACS FROM M/S MORINDA OVERSEAS INDUSTRIES LTD., THEREFORE, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION SHOUL D BE PROVED BY THE ASSESSEE. THE ANNEXURES ATTACHED BY THE LD. CIT(APPEALS) WITH THE APPELLATE ORDER ALSO SUPPORT THE CASE OF THE ASSESSEE THAT AMOUNT IN QUESTION DID NOT BELONG TO THE ASSESSEE AND ASSESSE E MERELY ACTED AS A CONDUIT TO TRANSFER THE MONEY FRO M THE BANK ACCOUNT OF M/S MORINDA OVERSEAS INDUSTRIES LTD. TO THE BANK ACCOUNT OF M/S SHARVILLA ESTATES P VT. LTD. THE ASSESSEE IS NOT BENEFICIARY OF ANY AMOUNT IN QUESTION BECAUSE NOTHING WAS GIVEN TO THE ASSESSEE IN ANY MANNER. NO EVIDENCE HAS BEEN BROUGHT ON RECORD IF ASSESSEE DEPOSITED CASH IN THE ACCOUNT OF M/S MORINDA OVERSEAS INDUSTRIES LTD. THE PROPERTY IN QUESTION IS NOT PURCHASED BY THE ASSESSEE. THE DEPARTMENT DID NOT TAKE ANY ACTION IN THE CASES OF M/S MORINDA OVERSEAS INDUSTRIES LTD. AND M/S SHARVILLA ESTATES PVT. LTD. WHO HAVE CONDUCTED THE TRANSACTIO N WITH THE ASSESSEE OF RS. 39 LACS IN QUESTION. ONCE NO ACTION HAVE BEEN TAKEN AGAINST THESE TWO COMPANIES FROM WHERE THE AMOUNTS WERE TRANSFERRED THROUGH ASSESSEE, WOULD CLEARLY PROVE THAT THE AMOUNT IN QUESTION DID NOT BELONG TO THE ASSESSEE AT ALL AND IT IS 11 MERELY AN INFERENCE OF THE ASSESSING OFFICER, THE ADDITION OF THE AMOUNT IN QUESTION SHOULD HAVE BEEN MADE AGAINST THE ASSESSEE WITHOUT ANY BASIS OR LOGI C. THE ASSESSEE FIRM IS NOT OWNER OF MONEY IN QUESTION AND HAS BEEN ABLE TO EXPLAIN NATURE OF TRANSACTION. 14. CONSIDERING THE ABOVE DISCUSSION, IT IS CLEAR THAT REVENUE DEPARTMENT HAS FAILED TO BRING ANY EVIDENCE ON RECORD THAT AMOUNT OF RS.39 LACS BELONG TO THE ASSESSEE OR THAT ASSESSEE WAS BENEFICIARY OF THE SAME AMOUNT IN QUESTION. THE OPENING OF THE BANK ACCOUNT WITH MEAGER AMOUNT OF RS. 5000/- COULD NOT JUSTIFY ANY ADDITION AGAINST THE ASSESSEE IN VIEW O F FACTS OF CASE. WE ARE, THEREFORE, OF THE VIEW THAT SINCE THE DEPARTMENT IS PROSECUTING THEIR APPEAL AGAINST SHRI MUKESH MITTAL WHO IS ONE OF THE DIRECTORS OF M /S SHARVILLA ESTATES PVT. LTD. AND THE ASSESSING OFFIC ER IN THE CASE OF M/S MORINDA OVERSEAS INDUSTRIES LTD. ALSO HELD THAT SINCE THE AMOUNT BELONGS TO M/S SHARVILLA ESTATES PVT. LTD., AND THIS COMPANY HAS GIVEN ONLY ACCOMMODATION ENTRY, WOULD CLEARLY PROVE THAT M/S MORINDA OVERSEAS INDUSTRIES LTD. HAS GIVEN ONLY ACCOMMODATION ENTRY TO ASSESSEE M/S BHAGWATI MOTORS FOR BENEFIT OF M/S SHARVILLA ESTATES PVT. LT D., THEREFORE, ASSESSEE MERELY ACTED AS A CONDUIT WITHO UT ANY RIGHT IN MONEY, THEREFORE, NO ADDITION UNDER SECTION 69A OF THE ACT COULD BE MADE AGAINST THE ASSESSEE. 15. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER S OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.39,05,000/-. 8. THE LD. DR HAD NO DISPUTE TO THE ABOVE FACTS. 9. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE ORDER OF DIVISION BENCH OF ITAT CHANDIGARH BENCH IN THE CASE OF M/S BHAGWATI MOTORS (SUPRA), I AM OF THE VI EW THE 12 ISSUE IS IDENTICAL AS HAVE BEEN CONSIDERED IN THE C ASE OF M/S BHAGWATI MOTORS (SUPRA). IN THE CASE OF M/S BHAGWATI MOTORS (SUPRA) ALSO, CHEQUE OF RS. 39 LACS WAS ISSUED IN THE NAME OF M/S BHAGWATI MOTORS FROM THE ACCOUNT OF M/S MORINDA OVERSEAS PVT. LTD. OUT OF CA SH DEPOSIT OF RS. 1,00,55,500/- WHICH WAS ULTIMATELY TRANSFERRED TO THE BANK ACCOUNT OF M/S SHERVILLA ES TATES PVT. LTD. IN THIS CASE, THE ENTIRE ADDITION HAS BE EN DELETED CONSIDERING VARIOUS ORDERS IN THE CASES OF CONCERNE D PERSONS. THE ORDER OF THE DIVISION BENCH IS BINDING ON SINGL E BENCH, THEREFORE, FOLLOWING THE ORDER IN THE CASE OF M/S B HAGWATI MOTORS (SUPRA), I SET ASIDE THE ORDERS OF AUTHORITI ES BELOW AND DELETE THE ENTIRE ADDITION OF RS. 26 LACS. 10. IN THE RESULT, GROUND NOS. 2 TO 4 OF THE APPEAL OF THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 30 TH JUNE,2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH