Adarsh Food Products P.Ltd, Delhi V. ITO, Ward-1(2), New Delhi

ITA 1039/DEL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1075 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 12-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Document seized; Opportunity of being heard; Accommodation entries; Reason to believe; Documents seized
• Section: 143(3); 143(1); 43; 13; 22; 147; 68; 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I-2+SMC, NEW DELHI BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 1039/DEL/2018 : ASSTT. YEAR : 200 9-10 ADARSH FOOD PRODUCTS PVT. LTD., C/O M/S RADHESHYAM SHARMA & CO., CAS, 351, 3 RD FLOOR, AGGARWAL MODERN BAZAR, LAWRENCE ROAD INDL. AREA, NEW DELHI-110035 VS INCOME TAX OFFICER, WARD-1(2), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A A ACA0108Q ASSESSEE BY : NONE REVENUE BY : SH. PRADEEP SINGH GAUTAM, SR. DR DATE OF HEARING: 27.02.2020 DATE OF PRONOUNCEMENT: 06.05.2020 ORDER PER DR. B.R.R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT (A)-I, NEW DELHI DATED 07.12.2 017. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIO NS OF RS.14,00,000 /- AS UNEXPLAINED CASH CREDIT U/S 6 8 OF THE INCOME TAX ACT, 1961 DURING THE YEAR BY RECORDING INCORRECT FACTS AND MAKING IRRELEVANT OBSERVATIONS. THEREFORE, THE ADDITIONS MADE AS SUCH MAY BE LIABLE TO BE DELETED. 2. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIO NS OF RS.25,200/- BY DEEMING COMMISSION AS ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 2 UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961 DURING THE YEAR BY RECORDING INCORRECT FACTS AND MAKING IRRELEVANT OBSERVATIONS. THEREFORE , THE ADDITIONS MADE AS SUCH MAY BE LIABLE TO BE DELETED. 3. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ORDERS FRAMED BY THE LD. AO U/S. 143(3)/ 147 IN SPITE OF THE FACT THAT THE LD. AO PASSED ORDERS WITHOUT CONSIDERING THE FACT THAT DETAIL FOUND BY DIT (INV. ) WAS NOT BELONGING TO THE APPELLANT. WITHOUT CONSIDERING THE BANK STATEMENT OF APPELLANT AND OF SHARE APPLICANT. THEREFORE, THE ASSESSMENT COMPLETED AS SUCH MAY BE HELD AB-INITIO INVALID. 4. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT-(A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ORDERS FRAMED BY THE LD. AO U/S. 143(3)/ 147 AND THAT TOO WITHOUT CONSIDERING THE MATERIAL ON RECORD; THEREFORE, THE ADDITIONS MADE AS SUCH PER GROUND OF APPEALS NO. 3 MAY BE LIABLE TO BE DELETED. 5. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT-(A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ORDERS FRAMED BY THE LD. AO U/S. 143(3)/ 147 AND THAT TOO WITHOUT GIVING OPPORTUNITY OF BEING HEARD, THEREFOR E, THE ADDITIONS MADE AS SUCH AS PER GROUNDS OF APPEALS NO. 3 MAY BE LIABLE TO BE DELETED. 6. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT-(A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ORDERS FRAMED .BY THE LD. AO U/S. 143(3)/ 147 AND THAT TOO WITHOUT PROVIDING THE MATERIAL TO APPELLANT COLLECT ED ON THE BACK OF HIM, THEREFORE, THE ADDITIONS MADE A S SUCH AS PER GROUNDS OF APPEALS NO. 3 MAY BE LIABLE TO BE DELETED. 7. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ORDER ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 3 FRAMED BY THE LD. AO U/S. 143(3)/ 147 AND THAT TOO WITHOUT PROVIDING THE OPPORTUNITY OF CROSS- EXAMINATION OF THE PARTIES WHO WERE EXAMINED BY THE LEARNED AO ON THE BACK OF IT; THEREFORE, THE ADDITIONS MADE AS SUCH AS PER GROUNDS OF APPEALS NO. 3 MAY BE LIABLE TO BE DELETED. 8. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT-(A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ACTION OF THE LD. AO DESPITE THE FACT THAT HE INVOKED HIS RE- ASSESSMENT JURISDICTION BY INVOKING SECTION 147 SIMPLY ON THE BASIS OF INFORMATION AND WITHOUT HAVING ANY REASONS TO BELIEVE OR APPLICATION OF MIND THAT THE INCOME HAS ESCAPED ASSESSMENT, THEREFORE, THE ORDERS PASSED ON THE BASIS OF SUE NOTICE MAY BE LIABLE TO BE QUASHED. 9. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ACTION OF THE LD. AO DESPITE THE FACT THAT HE INVOKED SECTION 147 WITHOUT FIRST HAVING DISPOSED OFF THE CASE UNDE R SECTION 143(1)/ 143(3) ETC. AS THE SAME FACT COULD NOT FIND A MENTION IN THE ASSESSMENT ORDERS. THEREFORE, REASON TO BELIEVE BASED ON PURELY GUESSWORK ONLY. THEREFORE, THE ORDERS PASSED ON THE BASIS OF SUCH A DEFECTIVE NOTICE MAY BE LIABLE TO B E QUASHED. 10. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT-(A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ACTION OF THE LD. AO DESPITE THE FACT THAT HE INVOKED SECTION 147 WITHOUT FIRST HAVING STATUTORY REQUIREMENT OF SECTION 151(2) REGARDING THE SATISFACTION OF THE HONBLE JOINT COMMISSIONER OF INCOME TAX, AS THE SAME IS ABSENT IN THE FILE HAVING NO COMMENT AND SEAL OF THE HONBLE JOINT COMMISSIONER OF INCOME TAX. AS SUCH, THE ORDERS PASSED IN THE ABSENCE OF THESE STATUTORY REQUIREMENTS MAY BE LIABLE TO BE QUASHED. ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 4 3. BROADLY, THE ISSUES ARE TWO. 1. REOPENING U/S 148 2. ADDITION U/S 68 4. THE ASSESSEE COMPANY WAS INCORPORATED ON 07.06.1 983. THE COMPANY FILED ITS RETURN OF INCOME FOR A.Y. 200 9- 10 ON 29 09.2009 DECLARING INCOME AT RS.3,94,360/-. THERE AFTER THE RETURN WAS PROCESSED U/S 143(1) UNDER THE REGULAR P ROCEEDINGS OF THE I.T. ACT. NO ASSESSMENT U/S 143(3) WAS MADE IN THIS CASE HITHERTO. 5. INFORMATION RECEIVED FROM INVESTIGATION WING AS PER THE ASSESSMENT ORDER: THE DIT (INVESTIGATION)-II, NEW DELHI VIDE LETTER F .NO. DIT(INV)-II/U/S148/2012-13/195 DATED 12.03.2013 INT IMATED THAT SH. SURINDER KUMAR JAIN HAD BEEN PROVIDING ACCOMMODATION ENTRIES THROUGH A LARGE NUMBER OF DUM MY COMPANIES FLOATED BY HIM OR HIS ASSOCIATES. THE INV ESTIGATION WING HAS COMPILED A REPORT & DATE OF THE BENEFICIAR IES OF SUCH ENTRIES. THE NAME OF THE ASSESSEE COMPANY- I.E. M/S . ADARSH FOOD PRODUCTS PVT. LTD. FIGURES IN THE LIST OF BENE FICIARIES OF SHARE CAPITAL PREMIUM / LOAN. THE INFORMATION IS BA SED ON SEARCH & SEIZURE OPERATION CONDUCTED IN THE CASE OF JAIN BROTHERS (SH. VIRENDRA JAIN AND SH. SURINDER KUMAR JAIN) THEIR GROUP CONCERNS ON 14/09/2010. THE MATERIAL FOUND AN D SEIZED (ANNEXURE A-1 TO A-163) FROM THE RESIDENCE OF JAIN BROTHERS INCLUDES SEVERAL DIARIES AND REGISTERS AND IT CONTA INS INCRIMINATING INFORMATION MAINTAINED IN THE FORM OF DAILY CASH BOOKS WHEREIN DETAILED DAY TO DAY RECEIPT AND PAYME NTS IN CASH /RTGS AND CHEQUES FROM /TO DIFFERENT PERSONS / FIRM ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 5 /COMPANIES HAVE BEEN RECORDED FOR THE PAST SIX YEAR S TILL THE DATE OF SEARCH. 6. ANALYSIS OF INFORMATION RECEIVED BY THE AO ON PERUSAL OF THE INFORMATION RECEIVED FROM THE INV ESTIGATION WING, THE FOLLOWING FACTS EMERGED IN THE COURSE OF SEARCH AND POST SEARCH INQUIRIES: (I) THESE DUMMY ENTITIES ARE NOT CARRYING OUT ANY A CTUAL BUSINESS ACTIVITIES, OTHER THAN THE ACTIVITY OF PRO VIDING ACCOMMODATION ENTRIES IN THE GARB OF SOME OSTENSIBL E BUSINESS TRANSACTIONS. (II) THE ENTRIES IN THE BANK ACCOUNTS THROUGH WHICH THE AMOUNTS ARE ROUTED, DO NOT HAVE ANY UNDERLYING OR A CTUAL BUSINESS TRANSACTION. 7. THE SEIZED DOCUMENTS WERE EXAMINED AND THEY CONT AINED COMPREHENSIVE DETAILS COMPRISING, INTER ALIA THE BE NEFICIARY'S NAME, AMOUNT OF ENTRY TAKEN, NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT, BANK DETAILS OF THE ACCOUNTS FROM W HICH ENTRIES ARE GIVEN, THE DATES OF THE ENTRIES ETC. THE SPECIF IC ANALYSIS OF FOLLOWING DOCUMENTS SEIZED IN RESPECT OF THE ASSESS EE COMPANY INDICATED TRANSACTIONS WHICH ARE AS UNDER: (I) PAGO 43 OF ANNEXURE A-25 ARE SEIZED DURING THE SEARCH OPERATION GIVES COMPREHENSIVE DETAILS OF CHEQUE NO. , BANK, ENTRY PROVIDING COMPANIES, NAME TO ONE OF THE BENEF ICIARY I.E. M/S ADARSH FOOD PRODUCTS PVT. LTD., JURISDICTION OF WHICH LIES WITH THIS WARD. 8. AS PER INFORMATION RECEIVED, THE ENTRY OF ASSESS ES FOUND IN THE SEIZED DOCUMENTS OF JAIN BROTHERS CORROBORAT ES WITH THE ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 6 BANKING CHANNEL AND DURING THE YEAR THE FOLLOWING E NTRIES HAVE BEEN TAKEN BY THE ASSESSEE FROM THE ENTRY OPERATORS : CHEQUE BOOK DATE FROM COMPANY NAME TO COMPANY/ PERSON NAME NAME OF THE ISSUING BANK CHEQUE /RTGS/ PO NO./CHEQUE DATE AMOUNT (RS.) NAME OF THE MIDDLE MAN/ MEDIATO ANNEXURE NO. PAGE NO. 21/3/09 MANI MALA DELHI PRO PVT. LTD. ADARSH FOOD PRODUCTS PVT. LTD. AXIS CH. NO. 191226 DATED 21/3/09 3,00,000 SATISH GARG A-25 43 21/3/09 VIRGIN CAPITAL SERVICES PVT. LTD. ADARSH FOOD PRODUCTS PVT. LTD. AXIS CH. NO. 012111 DATED 21/3/09 4,00,000 SATISH GARG A-25 43 INDEPENDENT ENQUIRIES CONDUCTED PURSUANT TO INFORMATION RECEIVED FROM INVESTIGATION WING 9. ANALYSIS OF ITR BY THE AO: THE RETURN OF INCOME OF ASSESSES COMPANY HAS BEEN DOWNLOADED FROM THE ITD SYSTEM AND THE SAME WAS EXA MINED IN THE LIGHT OF INFORMATION RECEIVED FROM INVESTIGA TION WING. ON COMPARATIVE EXAMINATION OF RETURN OF INCOME OF T HE S. NO. PARTICULARS A.Y. 2 008-09 A .Y. 2009-10 INCREASE (+)/ DECREASE (-) ASSESSED COMPANY FOR A.Y. 2008 -09 & 2009- 10, THE FOLLOWING HAS BEEN OBSERVED WITH REGARD TO THE SHARE CAPITAL AN D SHARE PRE MIUM OF THE ASSESSES COMPANY : 1. AUTHORIZED SHARE CAPITAL RS.70,00,000 RS.2,00,00,000 RS.1,30,00,000 (+) 2. ISSUED SUBSCRIBED AND PAID UP CAPITAL RS.57,79,700 RS.1,56,79,700 RS.99,00,000 (+) FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE COM PANY HAS INCREASED ITS SHARE CAPITAL/SHARE PREMIUM BY TO TAL AMOUNT OF RS.90,00,000/-. THUS THE INFORMATION RECE IVED ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 7 FROM THE INVESTIGATION WING WAS CORROBORATED BY THE PARTICULARS SHOWN BY THE ASSESSEE COMPANY IN ITS RE TURN OF INCOME. REASONS FOR FORMATION OF BELIEF RECORDED BY THE AO: 10. THE INFORMATION WAS CAREFULLY PERUSED AND ANALY ZED IN LIGHT OF THE FACTS OF THE CASE AS DETAILED ABOVE AN D THE FOLLOWING FACTS EMERGED FROM THE SAME: (I) PARTICULARS OF ALL INVESTING COMPANIES ARE FOUN D RECORDED IN THE DIARY MAINTAINED IN THE REGULAR COURSE AT THE P REMISES UNDER CONTROL OF SH. S.K. JAIN. (II) THE PASS BOOKS/CHEQUE BOOKS OF ALL THE INVESTI NG COMPANIES WHO HAVE MADE INVESTMENTS IN THE ASSESSEE COMPANY HAVE BEEN FOUND AT THE PREMISES OF SH. S.K. JAIN AND SH. VIRENDRA JAIN WHEN THESE PERSONS ARE NOT DIRECTORS/SHAREHOLDERS OF THESE COMPANIES. (III) PERUSAL OF VARIOUS SEIZED DOCUMENTS, AS DISCU SSED AT PARA 3.2 CLEARLY SHOWS THAT THE NAME OF THE ASSESSEE COM PANY I.E. M/S ADARSH FOOD PRODUCTS PVT. LTD., APPEARS ON THIS DOCUMENT HAS TAKEN ACCOMMODATION ENTRY FROM S.K. JAIN GROUP COMPANIES. (IV) THE ASSESSEE HAS DECLARED IN ITS RETURN OF INCOME THAT IT HAS INCREASED ITS SHARE CAPITAL TOTAL AMOUN TING TO RS.2,00,00,000/- WHICH CONFIRMS THE INFORMATION RECEIVED FROM INVESTIGATION WING. IT CAN BE FAIRLY CONCLUDED FROM THE ABOVE FACTS THAT THE ASSESSEE CO MPANY HAS GIVEN ITS OWN FUND TO SH. S.K. JAIN TO INTRODUCE IT IN THE FORM OF SHARE CAPITAL THROUGH THE COMPANIES BEING CONTRO LLED BY SH. S.K. JAIN GROUP. ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 8 INCOME CHARGEABLE TO TAX ESCAPING ASSESSMENT AS MEN TIONED BY THE AO: 11. THE ABOVE FACTS CLEARLY ESTABLISH THAT THE ASSE SSES COMPANY M/S ADARSH FOOD PRODUCTS PVT. LTD. HAS TAKE N ACCOMMODATION ENTRIES IN THE FORM OF SHARE CAPITAL AS WELL AS SHARE PREMIUM FROM THE ENTRY PROVIDING COMPANIES BE ING CONTROLLED BY S.K. JAIN GROUP. AS PER INFORMATION A VAILABLE ON RECORD I.E. ITR FILED FOR A.Y. 2009-10, THE FULL AN D TRUE DISCLOSURE WITH REGARD TO THE ABOVE TRANSACTIONS HA VE NOT BEEN MADE BY THE ASSESSES COMPANY AS THE FACT THAT THE S HARE CAPITAL AND SHARE PREMIUM IS BEING INTRODUCED THROU GH THESE DUMMY COMPANIES IS NOWHERE DISCLOSED BY THE ASSESSE S COMPANY. IN VIEW OF EXPLANATION 2 TO CLAUSE (B) OF PROVISO OF SECTION 147 OF THE INCOME TAX ACT, 1961, WHERE A RE TURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSES BUT NO AS SESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE ASSESSING OF FICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME WHERE INCO ME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. KEEPING IN VIEW ALL THE ABOVE, THERE WAS REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT IN CASE OF M/S. ADARS H FOOD PRODUCTS PVT. LTD. FOR THE A.Y. 2009-10 WITHIN THE MEANING OF SECTION 147/148 OF INCOME TAX ACT. 1961. 12. ON RECEIPT OF THE INFORMATION AND REPLY OF THE ASSESSEE, THE ASSESSING OFFICER, FROM PAGE NO. 5 (PARA 6.1) T O PAGE NO. 20 (PARA 7.3) REFERRED TO THE MODUS OPERANDI OF THE ENTRY OPERATION BY THE SH. S.K. JAIN AND SH. V.K. JAIN AN D ORDERS OF THE LD. CIT (A) AND ITAT IN THE CASE OF ENTRY OPERA TORS. AT PARA NO. 7.4, THE AO HELD AS UNDER: ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 9 THE ASSESSEE HAS SUBMITTED THAT NO SUCH AMOUNTS HAVE BEEN RECEIVED BY IT. A PERUSAL OF THE EXTRACT OF DIARY REVEALS THAT THE FOLLOWING ACCOMMODATION ENTRIES HAVE BEEN PROVIDED BY M/S MANIMALA DELHI PRO PVT. LTD. AND M/S VIRGIN CAPITAL SERVICES PVT. LTD. TO THE ASSESSEE AND M/S JINDAL DAL MILLS PVT. LTD. BOTH HAVING SH. ANIL KUMAR JINDAL AS COMMON DIRECTOR. DATE NAME OF COMPANY BENEFICIARY COMPANY AMOUNT 21.03.2009 M/S MANIMALA DELHI PRO PVT. LTD. M/S ADARSH FOOD PRODUCTS PVT. LTD. 3,00,000 21.03.2009 M/S MANIMALA DELHI PRO PVT. LTD. M/S JINDAL DAL MILLS PVT. LTD. 4,00,000 21.03.2009 M/S VIRGIN CAPITAL SERVICES PVT. LTD. M/S ADARSH FOOD PRODUCTS PVT. LTD. 4 ,00,000 21.03.2009 M/S VIRGIN CAPITAL SERVICES PVT. LTD. M/S JINDAL DAL MILLS PVT. LTD. 3,00,000 13. THE AO FROM PAGE NO. 22 TO PAGE NO. 35 (PARA 9 TO 14) QUOTED VARIOUS CASE LAWS. AT PAGE NO. 36 (PARA 15), THE AO CONCLUDED THE PROCEEDINGS MAKING AN ADDITION OF RS.14,00,000/-, THE RELEVANT PORTION OF THE ASSESSM ENT ORDER IS AS UNDER: 15.1 IT IS A SETTLED POSITION OF LAW THAT A CONSPI RACY IS HATCHED AND EXECUTED IN DARKNESS. TO OVERCOME THESE ISSUES, LAW STATES THAT IT IS FOR THE ALLEGED TO COME OUT CLEAN. THE ASSESSEE COMPANY MADE NO SERIOUS EFFORTS TO COME CLEAN ON THE ALLEGATION SO RAISED. IN THE CIVIL LAW, A MERE PREPONDERANCE OF PROBABILITY IS ENOUGH TO FIX THE RESPONSIBILITY. SECTION 68 IS ENACTED IN THESE TERMS ONLY. IT IS CLEARLY INDICATED FROM THE WORDINGS OF THE SECTION THAT WHERE THE ASSESSEE OFFERS NO EXPLANATION OR TH E EXPLANATION OFFERED BY THE ASSESSEE IS UNSATISFACTORY, THE PROVISIONS OF SECTION 68 ARE ATTRACTED. ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 10 15.2 TO SUM UP, A SUM OF RS.14,00,000/- HAS BEEN FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE IMMEDIATE SOURCE OF THIS AMOUNT HAS BEEN FOUND TO BE ACCOMMODATION ENTRY PROVIDER COMPANIES OUT OF THE ENTITIES CONTROLLED BY JAIN BROTHERS ARE DISCUSSED ABOVE. 14. THE LD. CIT (A) CONFIRMED THE ADDITION. 15. WE HAVE HEARD THE ARGUMENTS OF THE LD. DR AND P ERUSED THE MATERIAL ON RECORD. 16. THE DETAILED EXAMINATION OF THE RECORD, THE FOL LOWING RESULTANT UNDISPUTED FACTS HAVE BEEN ARRIVED AT. 1. THE DIARIES OF JAIN BROTHERS REFLECT THAT THE ASSES SEE HAS RECEIVED RS.3,00,000/- FROM MANIMALA DELHI PRO PVT. LTD. AND RS.4,00,000/- FROM VIRGIN CAPITAL SERVICES PVT. LTD. 2. THE ANALYSIS OF THE ITR BY THE AO REFLECTED INCREAS E OF SHARE CAPITAL BY RS.99,00,000/-. 3. AS PER THE REASONS, THE AO BELIEVED THAT THE SHARE CAPITAL RECEIVED BY THE ASSESSEE CONFIRMS TO THE FACT OF RE CEIPT OF INFORMATION FROM THE INVESTIGATION WING REGARDING T HE ENTRY TAKEN. 4. THUS, THE BELIEF OF THE AO WAS THAT THE SHARE CAPIT AL OF RS.99,00,000/- RECEIVED BY THE ASSESSEE IS BOGUS A ND ONLY AN ENTRY FROM THE ENTRY OPERATOR. 5. FROM THE SUBMISSIONS OF THE ASSESSEE, THE SHARE CAP ITAL RECEIVED BY THE ASSESSEE IS AS UNDER: A. SUSHIL KUMAR JINDAL HUF RS.42,00,000/- B. ANIL KUMAR JINDAL HUF - RS.37,00,000/- C. ANIL KUMAR JINDAL - RS.14,00,000/- D. BHAIBHAV JINDAL - RS.4,00,000/- E. EKTA JINDAL - RS.2,00,000/- ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 11 17. THUS, WE FIND THAT THE REASONS RECORDED BY THE AO THAT THE ASSESSEE COMPANY RECEIVED SHARE CAPITAL FROM TH E ENTRY OPERATOR PROVED TO BE INCORRECT BASED ON THE FACTS. ATTRIBUTING THE ENTRY OF RS.7,00,000/- TO THE SHARE CAPITAL OF THE COMPANY BY THE AO TO THE INCREASED SHARE CAPITAL OF RS.99,0 0,000/- FOUND TO BE INCORRECT BASED ON THE DETAILS OF THE S HARE CAPITAL RECEIVED BY THE COMPANY FROM THE FIVE ENTITIES ABOV E. 18. FURTHER, WE FIND THAT THE INFORMATION AVAILABLE WITH THE ASSESSING OFFICER PERTAINS TO RECEIPT OF RS.7,00,00 0/- FROM TWO ENTITIES NAMELY, MANIMALA AND VIRGIN CAPITAL WHEREA S THE AO MADE ADDITION OF RS.14,00,000/- U/S 68 OF THE ACT. AS PER THE INFORMATION MENTIONED AT PARA 7.4 AN AMOUNT OF RS.7 ,00,000/- HAS BEEN RECEIVED BY ANOTHER ENTITY NAMELY, M/S JIN DAL DAL MILLS PVT. LTD. SH. ANIL KUMAR JINDAL IS THE COMMON DIRECTOR IN THE ASSESSEE COMPANY AS WELL AS JINDAL DAL MILLS PV T. LTD. NO REASONS GIVEN BY THE AO AS TO WHY THE ADDITION OF RS.14,00,000/- HAS BEEN MADE IN THE CASE OF THE ASS ESSEE. THE AO HAS NOT MENTIONED WHETHER THIS RS.14,00,000/- IS ON ACCOUNT OF SHARE CAPITAL OR LOANS OR EXPENSES. NO D ETAILS OF THESE ENTRIES HAVE BEEN GIVEN. THE AO HAS FAILED TO EXAMINE WHETHER THE AMOUNT OF RS.14,00,000/- CREDITED IN TH E BOOKS OF THE ASSESSEE OR NOT, IF SO UNDER WHAT HEAD. THE AO HAS MADE ADDITION OF RS.7,00,000/- RECEIVED BY M/S JINDAL DA L MILLS PVT. LTD. IN THE HANDS OF THE ASSESSEE COMPANY. THE ADDI TION HAS TO BE RIGHTLY MADE IN THE HANDS OF M/S JINDAL DAL MILL S PVT. LTD. INSTEAD OF THE ASSESSEE COMPANY. IT WAS ALSO NOT PR OVED THAT THE ASSESSEE COMPANY WHOSE NAME FIGURED IN THE DIAR Y ENTRIES AND SHARES OF AN EQUIVALENT AMOUNTS HAVE BEEN ALLOT TED TO THE COMMON DIRECTORS, SH. ANIL KUMAR JINDAL. AS PER TH E RECORD ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 12 AND THE BANK STATEMENT, SH. ANIL KUMAR JINDAL HAS R ECEIVED RS.14,00,000/- FROM M/S JINDAL DAL MILLS PVT. LTD. AND PURCHASED THE SHARES OF THE ASSESSEE COMPANY. IN TH AT CASE, THE GENUINENESS OF THE RECEIPT OF AMOUNT BY SH. ANI L KUMAR JINDAL FROM M/S JINDAL DAL MILLS PVT. LTD. NEEDS TO BE ENQUIRED AND IN CASE FOUND TO BE BOGUS OR IN GENUINE, THE AD DITION SHOULD HAVE BEEN MADE IN THE HANDS OF SH. ANIL KUMA R JINDAL, WHICH WAS TOTALLY OVERLOOKED BY THE ASSESSING OFFIC ER. THE LD. CIT (A)S OBSERVATION THAT THE ASSESSEE HAS FAILED TO PROVE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN RESPECT OF THE SHARE APPLICATION MONEY. IT IS ALSO RELEVANT TO MENTION HERE THAT IN VIEW OF THE FACTS OF THE CASE AS DISCUSSED ABOVE, EVEN THE IDENTITY OF THE S HARE APPLICANTS HAS NOT BEEN PROVED AND ESTABLISHED . CANNOT BE SAID TO BE FACTUALLY CORRECT WHEN ALL THE SHARE APPLICANTS NAMELY, SUSHIL KUMAR JINDAL HUF, ANIL KU MAR JINDAL HUF, ANIL KUMAR JINDAL, BHAIBHAV JINDAL AND EKTA JI NDAL BELONG TO THE SAME FAMILY AND ASSESSED TO TAX AND WHOSE ID ENTITY AND EXISTENCE IS NEVER IN DISPUTE. 19. HENCE, KEEPING IN VIEW, THE REASONS RECORDED WH ICH HAVE BEEN PROVED INCORRECT, THE ADDITION HAS BEEN MADE W ITHOUT SPECIFYING AS TO THE NATURE OF THE AMOUNTS AND ALSO WITHOUT EXAMINING THE CREDITS IN THE BOOKS OF THE ASSESSEE, WE HEREBY ALLOW THE APPEAL OF THE ASSESSEE ON GROUNDS OF SECT ION 148 AND SECTION 68 OF THE IT ACT. ITA NO. 1039/DEL/2018 ADARS H FOOD PRODUCTS PVT. LTD. 13 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/05/2020. SD/- SD/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED: 06/05/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR