Appeal Details
Counselvise Citation
[2019] 118 COUNSELVISE.COM (IT) 4682 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
4 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-02-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2014-2015
Appeal Filed On
25-09-2018
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. 1096/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2012-13 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S ORIENTAL POWER CABLES LTD., CABLE NAGAR, NH-12, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT IZR;K{KSI.K @ C.O. NO. 36/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 1096/JP/2018) FU/KZKJ.K O' KZ @ ASSESSMENT YEAR: 2012-13 M/S ORIENTAL POWER CABLES LTD., NH-12, CABLE NAGAR, P.O. CABLE NAGAR, KOTA-325003 CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1211/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S ORIENTAL POWER CABLES LTD., CABLE NAGAR, NH-12, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 2 IZR;K{KSI.K @ C.O. NO. 50/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 1211/JP/2018) FU/KZKJ.K O' KZ @ ASSESSMENT YEAR: 2013-14 M/S ORIENTAL POWER CABLES LTD., NH-12, CABLE NAGAR, P.O. CABLE NAGAR, KOTA-325003 CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1097/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2014-15 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S ORIENTAL POWER CABLES LTD., CABLE NAGAR, NH-12, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1027/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2014-15 M/S ORIENTAL POWER CABLES LTD., NH-12, CABLE NAGAR, P.O. CABLE NAGAR, KOTA-325003 CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1098/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2015-16 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S ORIENTAL POWER CABLES LTD., CABLE NAGAR, NH-12, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 3 VK;DJ VIHY LA-@ ITA NO. 1028/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2015-16 M/S ORIENTAL POWER CABLES LTD., NH-12, CABLE NAGAR, P.O. CABLE NAGAR, KOTA-325003 CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1099/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2016-17 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S ORIENTAL POWER CABLES LTD., CABLE NAGAR, NH-12, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT IZR;K{KSI.K @ C.O. NO. 37/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 1099/JP/2018) FU/KZKJ.K O' KZ @ ASSESSMENT YEAR: 2016-17 M/S ORIENTAL POWER CABLES LTD., NH-12, CABLE NAGAR, P.O. CABLE NAGAR, KOTA-325003 CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACO 4036 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT-DR) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) & SHRI GULSHAN AGARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/02/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 12/02/2019 VKNS'K@ ORDER PER: BENCH THESE ARE FIVE APPEALS BY THE REVENUE, TWO CROSS APP EALS AND THREE CROSS OBJECTIONS BY THE ASSESSEE DIRECTED AGAINST T HE SEPARATE ORDERS OF ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 4 THE LD. CIT(A)-2, UDAIPUR DATED 12/07/2018 AND 01/08 /2018 RESPECTIVELY FOR THE A.YS. 2012-13 TO 2016-17. 2. ALL THESE APPEALS, CROSS APPEALS AND CROSS OBJEC TIONS ARE ARISING FROM THE ASSESSMENTS FRAMED U/S 153(A) OF THE INCOM E TAX ACT, 1961 (IN SHORT THE ACT) IN PURSUANT TO THE SEARCH AND SEIZUR E ACTION U/S 132 OF THE ACT CARRIED OUT ON 02/07/2015, THEREFORE, THE ISSUE S RAISED IN THESE APPEALS AND CROSS OBJECTIONS ARE COMMON AND ALSO AR ISING FROM THE COMMON FACTS AND CIRCUMSTANCES. ACCORDINGLY, FOR TH E SAKE OF CONVENIENCE, ALL THESE APPEALS AS WELL AS CROSS OBJE CTIONS ARE CLUBBED AND HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMPOSITE ORDER. 3. FOR THE A.Y. 2012-13, THE REVENUE IN ITS APPEAL HAS TAKEN FOLLOWING GROUNDS: 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 . 19,75,00,000/- 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 KAVERI HIRE PURCHASE AND DEPOSITS 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 OF UN SECURED LOANS BY OBSERVING THAT THE ALLEGED LENDER M/S KAVERI HIRE P URCHASE AND DEPOSITS PVT. LTD. IS NOT SHELL COMPANY WITHOUT CON SIDERING THE FINANCIAL 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 OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S KAVERI HIRE PURCH ASE AND ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 5 DEPOSITS PVT. LTD. MERELY FOR THE REASON THAT EVIDE NCES IN THE FORM OF STATEMENT ON OATH OF THE RELEVANT ENTRY OPERATORS W ERE 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 ALLEGEDLY OBTAINED FROM M/S KAVERI HIRE PURCHASE AN D DEPOSITS PVT. LTD. DESPITE THE FACT THAT THE DIRECTORS OR PRINCIP AL OFFICER OF THIS COMPANY WAS NEVER PRODUCED BEFORE THE ASSESSING OFF ICER FOR EXAMINATION DESPITE NUMBER OF OPPORTUNITIES PROVIDE D BY THE AO FOR PRODUCING AND ALSO IGNORING THE FACT THAT THE ASSES SEE 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 OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S KAVERI HIRE PURCH ASE AND DEPOSITS PVT. LTD. MERELY BY OBSERVING THAT THE ASS ESSEE HAS COOPERATED IN ASSESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE THE DIRECTOR OF LENDER COMPANY AND SOME DIRECTOR/OFFICE R WAS ALSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT EVEN T HE DIRECTOR WHICH WAS PRODUCED BEFORE THE AO FAILED TO SUBSTANT IATE THE GENUINENESS 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 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 CONSID ERING THE DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA C ASTLE (P) LTD. VS CIT (2015) 56 TAXMANN.COM 18(SC) WHEN THERE WERE GE NUINE 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. 4. GROUNDS NO. 1 TO 6 OF THE REVENUES APPEAL ARE R EGARDING THE ADDITION MADE BY THE A.O. U/S 68 OF THE ACT ON ACCO UNT OF UNEXPLAINED ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 6 SHARE APPLICATION MONEY FROM M/S KAVERI HIRE PURCHA SE AND DEPOSITS PVT. LTD. 5. THE ONLY ISSUE INVOLVED IN THE REVENUES APPEAL I S REGARDING THE ADDITION MADE BY THE A.O. IN RESPECT OF UNEXPLAINED SHARE APPLICATION MONEY FROM M/S KAVERI HIRE PURCHASES AND DEPOSITS P VT. LTD., WHICH WAS DELETED BY THE LD. CIT(A) ON THE GROUND THAT THE A.O . WAS NOT HAVING ANY MATERIAL IN HIS POSSESSION TO SUBSTANTIATE THE ADDI TION AS THE A.O. WAS NOT HAVING EVEN THE STATEMENT OF THE ALLEGED ENTRY OPER ATOR WHEREAS THE ASSESSEE HAS PRODUCED ALL THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM. 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 ON 02/07/2015. THE A.O. INITIATED THE PROCEEDINGS 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 ACT ON ACCOUNT OF SHARE APPLICATION MONEY, SPECIAL DEPOSITS AGAINST THE ISSUE OF PREFER ENTIAL EQUITY SHARES TREATING THE SAME AS ACCOMMODATION ENTRIES AVAILED BY THE ASSESSEE FROM THE ENTRY PROVIDERS. THE ASSESSEE CHALLENGED THE OR DERS PASSED BY THE A.O. BEFORE THE LD. CIT(A) AND CONTENDED THAT THE A. O. HAS MADE THE ADDITION MERELY ON THE BASIS OF THE STATEMENTS RECO RDED BY THE INVESTIGATION WING, KOLKATA AND WITHOUT ANY INCRIMIN ATING MATERIAL FOUND OR SEIZED DURING THE SEARCH AND SEIZURE ACTION IN T HE CASE OF THE ASSESSEE. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 7 THE ASSESSEE ALSO RAISED OBJECTION AGAINST THE ADDIT IONS MADE BY THE A.O. ON THE GROUND THAT THE ASSESSEE WAS NOT GIVEN AN OPP ORTUNITY OF CROSS EXAMINATION OF THE WITNESSES WHOSE STATEMENT WAS RELIE D UPON BY THE A.O. WHILE PASSING THE ASSESSMENTS. THE LD. CIT(A) DID NOT ACCEPT THESE OBJECTIONS RAISED BY THE ASSESSEE, HOWEVER, ON MERIT S OF THE ADDITION, THE LD. CIT(A) HAS DELETED THE MAJOR PART OF THE ADDITIO N FOR WHICH THE A.O. WAS NOT HAVING ANY MATERIAL IN HIS POSSESSION BUT CO NFIRMED THE ADDITION IN RESPECT OF WHICH THE STATEMENT OF THE ALLEGED EN TRY PROVIDER WAS WITH THE A.O.. THUS, BOTH THE ASSESSEE AS WELL AS THE REVE NUE ARE AGGRIEVED BY THE IMPUGNED ORDERS OF THE LD. CIT(A) AND FILED THE CROSS APPEALS AS WELL AS THE CROSS OBJECTIONS FOR THE RESPECTIVE ASSESSME NT YEARS. 6. BEFORE US THE LD. CIT-DR HAS SUBMITTED THAT THIS COMPANY WAS FOUND TO BE A SHELL COMPANY AS PER THE INVESTIGATIO N CARRIED OUT BY THE DDIT(INV.), KOLKATA AS WELL AS THE ENQUIRY WAS ALSO CO NDUCTED BY THE A.O. THROUGH THE INVESTIGATION WING, KOLKATA. FURTHER TH E ASSESSEE WAS ASKED BY THE A.O. TO PRODUCE PRINCIPAL OFFICER/DIRECTORS OF THE COMPANY FOR EXAMINATION BUT THE ASSESSEE FAILED TO DISCHARGE IT S ONUS. THE ASSESSEE HAS INTRODUCED HIS UNACCOUNTED INCOME IN THE BOOKS OF ACCOUNT IN THE GARB OF SHARE APPLICATION MONEY AS THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION. IT IS EVIDENT FROM THE EVIDENCES COLLECTED BY THE DEPARTMENT DURING THE INVESTIGATION, ENQUIRY , SEARCH AND SURVEY ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 8 ACTION AND THE A.O. RECEIVED INFORMATION FROM THE I NVESTIGATION WING, KOLKATA REGARDING INVOLVEMENT OF KOTA DALL MILL INC LUDING THE ASSESSEE IN OBTAINING ENTRIES OF BOGUS SHARE APPLICATION MONEY. SUCH INFORMATION WAS RECEIVED PRIOR TO THE INITIATION OF THE PROCEEDINGS U/S 153A OF THE ACT AND ALSO DURING THE PENDENCY OF THE PROCEEDINGS OF ASSE SSMENT. THE ASSESSING OFFICER ALSO CONDUCTED FURTHER ENQUIRY DURING THE A SSESSMENT PROCEEDINGS U/S 153A OF THE ACT ABOUT THE GENUINENESS OF THE TR ANSACTION OF UNSECURED LOANS. THE ASSESSEE WAS DULY CONFRONTED WITH THE RESUL TS ON ALL THESE FACTS AND INFORMATION SHARED BY THE INVESTIGATION WING, K OLKATA. IN THESE CIRCUMSTANCES, IT CANNOT BE A CASE OF ADDITION MADE WITHOUT ANY INCRIMINATING MATERIAL, BUT THE A.O. WAS HAVING SUFF ICIENT MATERIAL DISCLOSING THE UNDISCLOSED INCOME IN THE SHAPE OF U NEXPLAINED CASH CREDIT INTRODUCED BY THE ASSESSEE IN THE GARB OF SHARE CAP ITAL. ONCE THE A.O. HAS BROUGHT ON RECORD THE REPORT OF THE INVESTIGATION W ING, KOLKATA TO PROVE THAT THE SAID COMPANY IS A SHELL COMPANY AND ENGAGE D IN PROVIDING BOGUS ACCOMMODATION ENTRIES THEN THE ASSESSEE WAS DUTY BOU ND TO DISCHARGE ITS ONUS OF PROVING THE GENUINENESS OF THE TRANSACTIONS . THE ASSESSEE HAS FAILED TO PRODUCE THE PRINCIPAL OFFICER OR THE DIRE CTOR OF THE LOAN CREDITOR BEFORE THE A.O. FOR EXAMINATION DESPITE VARIOUS OPP ORTUNITIES GIVEN BY THE ASSESSING OFFICER. HE HAS RELIED UPON THE DECIS ION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NAVODAYA CASTLES P VT. LTD. 226 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 9 TAXMAN 190 AND THE SLP FILED BY THE ASSESSEE WAS DISM ISSED BY THE HON'BLE SUPREME COURT REPORTED IN 230 TAXMAN 268 (HO N'BLE SUPREME COURT) 7. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT PRIOR TO THE SEARCH U/S 132 OF THE ACT, THE ASSESSM ENT OF THE ASSESSEE WAS COMPLETED U/S 143(3) OF THE ACT WHEREIN THE SHARE A PPLICATION MONEY RECEIVED BY THE ASSESSEE FROM THIS COMPANY WAS TREAT ED AS GENUINE BY THE A.O.. EVEN THE SAID TRANSACTION WAS ALSO EXAMINED BY THE A.O. IN THE ASSESSMENT OF THE SHARE APPLICANT U/S 143(3) OF THE ACT, THEREFORE, PRIOR TO THE SEARCH, THE ASSESSMENT COMPLETED U/S 143(3) OF THE ACT AND THERE WAS NO DEFECT FOUND BY THE A.O. IN THE CLAIM OF THE ASS ESSEE AS THE GENUINENESS OF THE TRANSACTION OF SHARE APPLICATION MONEY RECEIVED FROM THIS COMPANY. FURTHER NOTHING HAS EITHER BEEN FOUND OR SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WHICH CAN SUPPORT THE CASE OF THE A.O. IN TREATING THE SAID SHARE APP LICATION MONEY AS BOGUS TRANSACTION AND CONSEQUENTLY UNEXPLAINED CASH CREDI T U/S 68 OF THE ACT. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT EVEN OT HERWISE THE ASSESSEE HAS PRODUCED ALL RELEVANT DOCUMENTARY EVIDENCE IN S UPPORT OF ITS CLAIM AND TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THE S HARE APPLICANT AND GENUINENESS OF THE TRANSACTION. HE HAS REFERRED TO THE RELEVANT DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE WHICH ARE PLACED AT PAGE NOS. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 10 415 TO 605 OF THE PAPER BOOK AND SUBMITTED THAT THE ASSESSEE PRODUCED INCOME TAX RETURN OF THE SHARE APPLICANT, BOOKS OF ACCOUNT/FINANCIAL STATEMENTS FOR THE A.Y. UNDER CONSIDERATION, BANK S TATEMENT SHOWING THE PAYMENTS MADE BY THE SHARE APPLICANT, LEDGER STATEM ENT, SHARE ALLOTMENT ADVICE, AFFIDAVIT OF THE DIRECTOR OF THE SHARE APPL ICANT COMPANY, FINANCIAL STATEMENT OF THE SHARE APPLICANT FOR SIX YEARS FROM F.Y. 2009-10 TO 2015- 16 TO SHOW THE CREDITWORTHINESS OF THE SHARE APPLICAN T AND AVAILABILITY OF THE FUNDS. HE HAS REFERRED TO THE DETAILS AND SUBMI TTED THAT THE SAID COMPANY WAS HAVING SUFFICIENT FUND AS ITS IS MANIFES T FROM THE FINANCIAL STATEMENT AND PARTICULARLY THE SHARE CAPITAL AND RE SERVES OF THE SAID COMPANY AS ON 31/3/2012 WAS RS. 97,21,54,685/- WHEREA S THE SAID COMPANY HAS PAID THE SHARE APPLICATION MONEY TO THE ASSESSEE OF RS. 19.75 CRORES ONLY. THE DEPARTMENT HAS ACCEPTED THE T RANSACTION WHILE PASSING THE ASSESSMENT ORDERS U/S 143(3) OF THE ACT IN THE SHARE APPLICANT. HE HAS REFERRED THE ASSESSMENT ORDERS FO R THE A.Y. 1998-99 TO 2001-02, 2008-09 AND 2014-15 WHICH WERE UNDERGONE SC RUTINY ASSESSMENT AND THE A.O. HAS ACCEPTED THE TRANSACTIO N OF INVESTMENT MADE BY THE SAID COMPANY IN THE SHARES OF THE ASSESSEE. EVEN AS PER THE ROC RECORD, THE STATUS OF THE SAID COMPANY IS SHOWN AS A CTIVE AND NOT AS A SHELL COMPANY. HENCE, THE LD AR HAS SUBMITTED THAT ONCE THE ASSESSEE HAS PRODUCED ALL THE RELEVANT DOCUMENTS TO ESTABLISH TH E IDENTITY, ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 11 CREDITWORTHINESS OF THE SHARE APPLICANT AND GENUINEN ESS OF THE TRANSACTION, WHICH WERE NOT DISTURBED BY THE DEPARTME NT IN THE ASSESSMENT IN THE CASE OF THE SHARE APPLICANT THEN THE SAID TRANSACTION CANNOT BE TREATED AS THE BOGUS IN THE HAND OF THE A SSESSEE. HE HAS SUPPORTED THE ORDER OF THE LD. CIT(A). THE LD AR HAS ALSO RELIED UPON THE SERIES OF DECISIONS ON THIS POINT AND SUBMITTED THA T ONCE THE ASSESSEE HAS DISCHARGED ITS ONUS BY PRODUCING THE DOCUMENTARY EV IDENCE THEN IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT BY THE ASS ESSING OFFICER, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT SUSTA INABLE. HE HAS ALSO REFERRED TO THE REPORT OF THE KOLKATA INVESTIGATION WING AND SUBMITTED THAT EVEN THE NOTICE ISSUED U/S 133(6) OF THE ACT WAS DUL Y RESPONDED BY THE SAID COMPANY AND HENCE NO ADVERSE REPORT HAS BEEN G IVEN BY THE DDIT (INV), KOLKATA. THE ONLY OBJECTION IS NON-PRODUCTION OF THE DIRECTOR OF THE SAID COMPANY, HOWEVER, THE ASSESSEE HAS DULY PRODUCE D THE AFFIDAVIT OF THE DIRECTOR OF THE SHARE APPLICANT. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. WE FIND THAT THESE ISSUES ARE C OMMON AS IN THE CASE OF M/S KOTA DALL MILL VS DCIT IN ITA NOS. 997 TO 1002/ JP/2018, 1119/JP/2018, 1057 TO 1062/JP/2018 AND 1210/JP/2018 AS THE ASSESSEE IS ALSO A GROUP CONCERN OF KOTA DALL MILL AND THE A DDITION WAS MADE BY THE A.O. IN THE PROCEEDINGS U/S 153A OF THE ACT AS MADE IN THE OTHER GROUP ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 12 COMPANIES OF KOTA DALL MILL. WE NOTE THAT IN THE CA SE OF OTHER GROUP CONCERN NAMELY M/S MULTIMETALS LIMITED VS. DCIT IN I TA NOS. 1024 TO 1026, 1100 TO 1104 & 1230/JP/2018 AND C.O. 38 & 39/ JP/2018 VIDE ORDER DATED 29/01/2019 HAS AGAIN EXAMINED THE ISSUE OF AD DITION MADE BY THE ASSESSING OFFICER BASED ON THE REPORT OF THE KOLKAT A INVESTIGATION WING WHICH WAS PRIOR TO THE SEARCH AND SEIZURE IN THE CASE OF ASSESSEE AND GROUP CONCERNS ON 02/07/2015. THE ASSESSING OFFICER HAS MADE THE ADDITION ON THE BASIS OF THE REPORT OF THE DDIT (INV ), KOLKATA, HOWEVER, THERE WAS NO OTHER EVIDENCE OR MATERIAL IN THE POSSE SSION OF THE A.O. TO ESTABLISH THAT THE TRANSACTION OF SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE FROM THIS COMPANY IS BOGUS AND NOT GENUINE . THE SHARE APPLICANT IS A REGISTERED NBFC AND SUBJECTED TO THE SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT NOT FOR ONE ASSESSMENT YEAR BUT FOR THE LAST MANY ASSESSMENT YEARS. THERE ARE FIVE REPORTS OF THE INVESTIGATION W ING OUT OF WHICH THE NAME OF THE SHARE APPLICANT IS MENTIONED IN REPORTS NO. 4 AND 5 WHICH IS PLACED AT PAGE NOS. 353 AND 364 OF THE PAPER BOOK. HOWEVER, WE FIND THAT THE REPORT OF THE INVESTIGATION WING IS NOT BASED ON ANY DOCUMENTARY EVIDENCE BUT IT NARRATES THE STATEMENTS RECORDED DU RING THE ENQUIRY/INVESTIGATION OF VARIOUS PERSONS AND IT REF ERS TO THE STATEMENT OF ONE SHRI ANAND SINGHANIA BEING AN ENTRY OPERATOR OF THIS COMPANY. HOWEVER, THE SAID STATEMENT WAS NEITHER PART OF THE R EPORT OF THE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 13 INVESTIGATION WING NOR IT WAS SENT TO THE A.O. FOR E XAMINATION AND CONSIDERATION OF THE GENUINENESS OF THE TRANSACTION . ON THESE IDENTICAL FACTS, THE LD. CIT(A) DELETED THE ADDITION MADE BY T HE A.O. IN ALL GROUP CONCERNS AND IN CASE OF M/S MULTIMEDIA LIMITED VS D CIT (SUPRA), THE TRIBUNAL WHILE DEALING THE REVENUES APPEAL HAS CONSI DERED THIS ISSUE IN PARA 24 AS UNDER: '24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT AN IDENTICAL IS SUE WAS CONSIDERED BY US IN THE CASE OF KOTA DALL MILL (SUPRA) IN PARA 15 AS UN DER: 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 14 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 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, ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 15 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 16 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. 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 17 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 WH ILE 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 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. 4.2 ABOVE. 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) ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 18 155 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 RAMNIKLALHIRJI [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 (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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 19 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 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 FOLL OWED THE DUE PROCEDURE OF LAW U/S 68 OF THE ACT. THEREFORE, REQUIRING THE ASSESSEE TO PRODUCE THE DIRECTORS OF THE LENDER COMPANY WAS NOT LEGALLY TEN ABLE IN VIEW OF THE JUDGMENT OF GUJARAT 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 20 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 21 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 22 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 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 ( SUPRA) HAS EXAMINED ALL THE RELEVANT DETAILS INCLUDING THE FUNDS AVAILABLE WITH TEAC CONSULTANTS PVT. LTD., WHICH IS SUFFICIENT FOR ADVANCEMENT OF LOAN TO THE ASSESSEE. FURTHER THE LD. CIT(A) HAS DELETED THE ADDITION ON THE BASIS THAT THE ASSE SSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE DOCUMENTAR Y EVIDENCE FILED BY THE ASSESSEE EVEN THE STATEMENT OF ALLEGED ENTRY OPERAT OR WAS NOT IN POSSESSION OF ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 23 THE ASSESSING OFFICER. THE FINDING OF THE LD. CIT(A ) IN THE CASE UNDER CONSIDERATION IS IDENTICAL AS IN THE CASE OF KOTA D ALL MILL (SUPRA), THEREFORE, FOLLOWING THE EARLIER ORDER OF THIS TRIBUNAL, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. HENC E, THE APPEAL OF THE REVENUE IS DISMISSED. IN THE CASE IN HAND, THE ASSESSEE HAS PRODUCED DOCU MENTARY EVIDENCES AS UNDER: S. NO. PARTICULARS A.Y 2012-13 PB-II PAGE NO. 1 COPY OF ACK. OF ITR OF AY 2012-13 ALONG WITH COMPUTATION SHEET. 415-417 2 COPY OF BALANCE SHEET OF AY 2012-13. 418-433 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 434-435 4 COPY OF LEDGER STATEMENT DEPICTING THE TRANSACTION WITH PARTY. 436 5 SHARE ALLOTMENT ADVICE 437 6 COPY OF AFFIDAVIT OF MRS MONIKA CHUGH DIRECTOR OF COMPANY. 438-442 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. 443-449 8 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2014-15, 2010-11 AND COPY OF ASSESSMENT ORDER U/S 143(3), COPY OF ASSESSMENT ORDER U/S 266, APPEAL FILED AGAINST SUCH ORDER AND ORDER OF APPEAL PASSED BY ITAT FOR THE AY 2008-09. 450-490 9 COPY OF ROC MASTER DATA. 491-492 10 CERTIFICATE OF INCORPORATION. 493 11 COPY OF PAN CARD. 494 12 COPY OF CERTIFICATE OF NBFC REGISTRATION. 495 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 24 13 COPY OF SUMMON NO. 1442 DATED. 13.10.2017 AND REMINDER NOTICE 1586 DATED. 31.10.2018 ISSUED BY DEPUTY DIRECTOR INVESTIGATION UNIT-1(3) KOLKATA. 496-499 14 COPY OF REPLY IN RESPONSE TO SUMMON NO. 1442 DATED. 13.10.2017 ISSUED BY DEPUTY DIRECTOR INVESTIGATION UNIT-1(3) KOLKATA. 500-502 15 COPY OF NOTICE NO.1664 U/S 133(6) OF THE INCOME TAX ACT1961 DATED 22.09.2017. 503 16 COPY OF REPLY IN RESPONSE TO NOTICE NO. 1664 DATED 22.09.2017 504-505 COPY OF LEDGER ACCOUNT SHOWING THE DETAILS OF PREFERENCE SHARE ALLOTTED FROM BOOKS OF ACCOUNT OF KAVERI HIRE PURCHASE AND DEPOSITS PVT LTD. 506 COPY OF RELEVANT BANK STATEMENT SHOWING THE DETAILS OF ENTRY PAYMENT MADE. 507-601 COPY OF SHARE APPLICATION FORM OF PREFERENCE SHARES 602-603 SHARE ALLOTMENT ADVICE. 604 PROOF OF DISPATCH. 605 THUS, THE ASSESSEE PRODUCED ALL RELEVANT DOCUMENTARY EVIDENCE TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE S HARE APPLICANT AS WELL AS GENUINENESS OF THE TRANSACTION. AS WE HAVE ALREADY D ISCUSSED THAT THE SHARE APPLICANT WAS ALSO ASSESSED TO TAX AND THERE WE RE ASSESSMENT ORDERS U/S 143(3) OF THE ACT, THEREFORE, THE IDENTI TY OF THE SHARE APPLICANT IS NOT IN DISPUTE. FURTHER THE STATUS OF THE SHARE APPLICANT AS PER THE ROC RECORD IS SHOWN AS ACTIVE. THE AVAILABILITY OF FUND IS ALSO PROVED BY THE ASSESSEE AS PER THE FINANCIAL STATEMENTS WHEREIN THE SHARE CAPITAL AND RESERVE OF THE SHARE APPLICANT AS ON 31/3/2012 IS R S. 97.21 CRORES AS AGAINST THE AMOUNT OF SHARE APPLICANT GIVEN TO THE ASSESSEE OF RS. 19.75 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 25 CRORES, THEREFORE, THE SUFFICIENCY OF FUND IS NOT I N DISPUTE. THE A.O. HAS NOT PRODUCED ANY CONTRARY MATERIAL EXCEPT THE REPORT OF THE DDIT (INV.), KOLKATA IN WHICH THEY HAVE NOT DISPUTED THE IDENTITY OF THE SAID COMPANY BUT BASED ON THE STATEMENT OF SOME ENTRY OPERATORS IT WAS ALLEGED THAT THESE COMPANIES ARE INVOLVED IN PROVIDING ACCOMMODA TION ENTRIES. ACCORDINGLY, IN VIEW OF THE EARLIER ORDERS OF THIS TR IBUNAL ON THE IDENTICAL FACTS, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN TH E IMPUGNED ORDER OF THE LD. CIT(A) QUA THESE ISSUES. 9. IN THE CROSS OBJECTION FOR THE A.Y. 2012-13, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: 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 AB 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. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 26 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. 10. IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED ISSUE REGARDING THE ADDITION MADE BY THE A.O. WITHOUT ANY INCRIMINATING MATERIAL AS WELL AS THE ORDER OF THE A.O. IS NOT SUSTAINABLE WHEN THE AS SESSEE WAS NOT GIVEN THE OPPORTUNITY OF CROSS EXAMINATION. WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL AS THE LD CIT-DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THIS ISSUE IS COMMON AS RAISED IN ALL THE GROUP CONCERNS OF KOTA DALL MILL WHICH ARE SUBJECTED TO TH E SEARCH AND SEIZURE ACTION ON 02/7/2015. WE HAVE CONSIDERED THESE TWO IS SUES IN THE CASE OF M/S MULTIMETALS LIMITED VS. DCIT (SUPRA) VIDE ORDER DATED 29/01/2019 IN PARA 9 AND 14 AS UNDER: 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 02/7/2 015 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 1 32 OF THE ACT ON 02/7/2015 AND THEREFORE THE ASSESSING OFFICER WOULD ASSESS THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SEC TION 153A OF THE ACT IN RESPECT OF THESE THREE ASSESSMENT YEARS HAVI NG REGARD TO THE FACT THAT WHETHER ANY INCRIMINATING MATERIAL WAS FO UND OR CAME TO THE KNOWLEDGE OF THE ASSESSING OFFICER DURING THE SEARC H AND SEIZURE PROCEEDINGS. SINCE THESE ASSESSMENT YEARS WERE NOT PENDING AS ON THE DATE OF SEARCH, THEREFORE, THE PROCEEDINGS U/S 153A OF THE ACT IN ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 27 RESPECT OF THESE THREE ASSESSMENT YEARS WOULD BE IN THE NATURE OF REASSESSMENT AND NOT IN THE NATURE OF ASSESSMENT AS IN THE CASE OF THE REMAINING ASSESSMENT YEARS IN THE A.Y. 2014-15 AND 2015-16 WHICH WERE GOT ABATED BY VIRTUE OF SEARCH AND SEIZU RE 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 IN FORMATION RECEIVED FROM THE KOLKATA INVESTIGATION WING WHICH CONTAINS THE STATEMENT OF ONE SHRI ANAND SHARMA IN RESPECT OF SOME ASSESSMENT S AND THE STATEMENT OF SHRI ANKIT BAGRI IN RESPECT OF SOME OT HER ASSESSMENTS. THUS, UNDISPUTEDLY THE ASSESSING OFFICER HAS MADE T HE ADDITION WHILE COMPLETING THE ASSESSMENT U/S 153A OF THE ACT FOR A LL THE ASSESSMENT YEARS ON THE BASIS OF THE INFORMATION RECEIVED FROM THE INVESTIGATION WING, KOLKATA AND NOT ON THE BASIS OF ANY MATERIAL OR INFORMATION GATHERED DURING THE COURSE OF SEARCH AND SEIZURE AC TION IN THE CASE OF THE ASSESSEE. WE FIND THAT THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER AS WELL AS THE ORDERS PASSED BY THE LD. CIT (A) IN THE CASE OF THE ASSESSEE ARE IDENTICAL AND BASED ON SIMILAR FACTS A ND CIRCUMSTANCES AS IN THE CASE OF M/S KOLA DALL MILL PURSUANT TO THE S AME SEARCH AND SEIZURE ACTION CARRIED OUT ON 02/7/2015. THIS TRIBU NAL IN THE CASE OF KOTA DALL MILL VS DCIT VIDE ORDER DATED 31/12/2018 IN ITA NOS. 997 TO 1002/JP/2018, 1119/JP/2018, 1057 TO 1062/JP/2018 AN D 1210/JP/2018 HAS CONSIDERED AND DECIDED 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 F OR THE ASSESSMENT 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 O RDERS UNDER SECTION 143(3) WERE PASSED AND IN OTHER CASES THE ASSESSMEN T WAS COMPLETED UNDER SECTION 143(1) OF THE ACT. THUS THE ASSESSME NTS FOR THE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 28 ASSESSMENT YEARS 2010-11 TO 13-14 WERE NOT GOT ABAT ED BY VIRTUE OF SEARCH UNDER SECTION 132 ON 2 ND JULY, 2015 AND THE AO WOULD REASSESS THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISI ONS OF SECTION 153A IN RESPECT OF THESE 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 NO T IN THE NATURE OF ASSESSMENT AS IN THE CASES OF THE REMAINING TWO ASS ESSMENT YEARS I.E. 2014-15 AND 15-16 THOSE WERE GOT ABATED BY VIRTUE O F SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT ON 2 ND JULY, 2015. IT IS A SETTLED PROPOSITION OF LAW THAT THE ASSESSMENT OR R EASSESSMENT UNDER SECTION 153A IN RESPECT OF THE ASSESSMENT YEARS WHI CH HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASS ED DETERMINING THE ASSESSEES TOTAL INCOME, THE ADDITION TO THE IN COME THAT HAS ALREADY BEEN ASSESSED CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL. IN THE ABSENCE OF ANY INCRIMINATING MATE RIAL THE COMPLETED ASSESSMENT CAN ONLY BE REITERATED. THE PROVISIONS OF SECTION 132 READ WITH SECTION 153A OF THE ACT STIPULATE TWO TYPES OF SITUATIONS ONE WHERE THE ASSESSMENT OF ANY ASSESSMENT YEAR FALLING 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 DATE OF INITIATION OF SEARCH OR REQUISITION SHA LL BE 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 REASSE SSMENT. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAB UL CHAWLA WHILE ANALYZING THE PROVISIONS OF SECTION 153A READ WITH SECTION 132 OF THE ACT HAS OBSERVED IN PARA 37 AND 38 AS UNDER :- ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 29 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 . 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 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 WIL L EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF T HE 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 EA CH 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 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 WITH OUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL . 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 REASSESSMENT 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 JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EA CH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXIST ING OR BROUGH T ON THE RECORD OF THE AO. VII . COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING 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 SEAR CH 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 30 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 MA DE. THE HONBLE HIGH COURT HAS ALSO REFERRED THE TERM USED IN SECTION 153A AS ASSESS WHICH IS RELATABLE TO ABATED PROCEEDINGS A ND THE WORD REASSESS RELATED TO COMPLETED ASSESSMENT PROCEEDI NGS. THEREFORE, THE COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON TH E BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENT OR UNDISCLOSED INCOME OR PR OPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL A SSESSMENT. THE HONBLE DELHI HIGH COURT HAS REITERATED ITS VIEW IN CASE OF PRINCIPAL CIT VS. KURELE PAPER MILLS (SUPRA) IN PARA 1 TO 3 AS UN DER :- 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. 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. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 31 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. M EETA GUTGUTIA 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: '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: ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 32 '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 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 W HICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME T HAT HAS 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 ET ED ASSESSMENT CAN BE REITERATED ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 33 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: '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 PR ECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHI CH 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. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 34 III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT 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 O RDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THE RE 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 ADDI TIONS 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 MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT H AS 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 MADE. 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 ASSE SSMENTS ARE CONCERNED, THE JURISDICTION 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. COMPLETED 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 D OCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P RODUCED OR NOT ALREADY DISCLOSED OR 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: ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 35 '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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 36 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 37 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 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, ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 38 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 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. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 39 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 DECISIO N OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. JAI S TEEL INDIA LTD. VS. ACIT (SUPRA). EVEN ON THE ISSUE OF ADDITION MADE BY THE AO IN THE PROCEEDINGS UNDER SECTION 153A IN RESPECT OF THE AS SESSMENT YEAR WHICH WAS ALREADY COMPLETED ON THE DATE OF SEARCH, THE HONBLE HIGH COURT HAS HELD THAT IN THE ABSENCE OF ANY MATERIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURING THE SEARCH AND WAS NO T ALREADY AVAILABLE TO THE AO, THE ADDITIONS MADE BY THE AO O N ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED BY THE LD. C IT (A). THE RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT IN CASE OF P RINCIPAL 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 40 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 RE SPECT OF THE ASSESSMENTS WHICH WERE COMPLETED PRIOR TO THE DATE OF SEARCH EXCEPT BASED ON SOME INCRIMINATING MATERIAL UNEARTHED DURI NG THE SEARCH WHICH WAS NOT ALREADY AVAILABLE TO THE AO. IT IS P ERTINENT TO NOTE THAT THE SLP FILED BY THE REVENUE AGAINST THE DECISION O F HONBLE DELHI HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA W AS DISMISSED VIDE ORDER DATED 2 ND JULY, 2018. THERE ARE SERIES OF DECISIONS ON THIS ISSUE INCLUDING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN CASE OF M/S. JAI STEEL INDIA VS. ACIT (SUPRA) WHEREIN THE H ONBLE 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. 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 41 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 42 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, 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. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 43 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 44 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, DUR ING 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 SEI ZED TO 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 OF THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKAT A. IT IS PERTINENT TO NOTE THAT THE SAID INFORMATION WAS AVAILABLE WIT H THE AO PRIOR TO THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT IN CA SE OF THE ASSESSEE ON 2 ND JULY, 2015. THEREFORE, EVEN THE SOLE BASIS OF ASSE SSMENTS FRAMED UNDER SECTION 153A OF THE ACT IS THE INFORMATION RE CEIVED FROM INVESTIGATION WING KOLKATA AND STATEMENT OF ONE SHR I ANAND SHARMA, WHO IS STATED TO BE AN ENTRY OPERATOR AND MANAGED V ARIOUS CONCERNS/COMPANIES INCLUDING M/S.ROYAL CRYSTAL DEAL ERS, ONE OF THE LOAN CREDITORS OF THE ASSESSEE. EXCEPT THE SAID STA TEMENT AND REPORT OF THE INVESTIGATION WING KOLKATA, THE AO HAS NEITHER REFERRED TO OR WAS ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 45 HAVING IN POSSESSION OF ANY MATERIAL TO INDICATE TH AT THE UNSECURED LOANS SHOWN IN THE BOOKS OF ACCOUNTS AS WELL AS PAR TNERS CAPITAL RECEIVED BY THE ASSESSEE ARE NOTHING BUT ASSESSEES OWN UNACCOUNTED AND UNDISCLOSED INCOME ROUTED BACK IN THE GARB OF U NSECURED LOANS AND PARTNERS CAPITAL. THERE IS NO DISPUTE THAT THESE TRANSACTIONS OF UNSECURED LOANS AND PARTNERS CAPITAL CONTRIBUTION ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND DISCLOSED IN THE RETURN O F INCOME WHICH WERE ALREADY COMPLETED AS THE ASSESSMENTS FOR THESE FOUR ASSESSMENT YEARS WERE NOT PENDING ON THE DATE OF SEARCH, THEREFORE, IT IS MANIFEST FROM THE RECORD THAT DURING THE COURSE OF SEARCH AND SEI ZURE UNDER SECTION 132 OF THE ACT IN THE CASE OF THE ASSESSEE NO MATER IAL MUCH LESS THE INCRIMINATING MATERIAL WAS UNEARTHED OR ANY UNDISCL OSED INCOME WHICH WAS NOT DISCLOSED IN THE BOOKS OF ACCOUNTS WAS DETE CTED OR FOUND. THE ONLY INCRIMINATING MATERIAL WHICH WAS REFERRED BY T HE AO IS PAGES 21 TO 26 OF ANNEXURE AS-1 IN RESPECT OF LONG TERM CAPITAL GAIN EARNED BY SHRI RAJENDRA AGARWAL AND HIS FAMILY MEMBERS. THE SAID LONG TERM CAPITAL GAIN WAS DISCLOSED BY SHRI RAJENDRA AGARWAL IN HIS STATEMENT UNDER SECTION 132(4) AND, THEREFORE, IT WAS SURRENDERED A ND OFFERED 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 HAN D OF THE ASSESSEE ON ACCOUNT OF LONG TERM CAPITAL GAIN WHICH WAS FOUN D DURING THE COURSE OF SEARCH AND SEIZURE. THUS, EXCEPT THE MATERIAL D ISCLOSING THE LONG TERM CAPITAL GAIN IN THE HAND OF SHRI RAJENDRA AGAR WAL, NO OTHER INCRIMINATING MATERIAL EITHER FOUND OR REFERRED OR IS THE BASIS OF THE ADDITION MADE BY THE AO WHILE FRAMING THE ASSESSMEN T UNDER SECTION 153A OF THE ACT FOR THE ASSESSMENT YEARS 2010-11 TO 13-14. IT IS APPROPRIATE TO REFER RELEVANT PART OF THE ASSESSMEN T 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 46 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 47 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 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 PER ITR U/S 153A OF THE ACT. RS. 2,82,83,460/ - ADDITIONS| UNEXPLAINED CASH CREDITS U/S RS. 67,20,14,999/ - ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 48 |68 OF THE ACT IN THE FORM OF |UNSECURED LOAN AND PARTNERS |CAPITAL ASSESSED INCOME R S. 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 SHR I ANAND SHARMA. THE LD. CIT (A) THOUGH HAS NOT DISPUTED THE LEGAL P ROPOSITION ON THIS ISSUE, HOWEVER, THE CONTENTION OF THE ASSESSEE WAS TURNED DOWN MERELY ON THE GROUND THAT THE SLPS FILED BY THE REV ENUE IN THE CASES OF KABUL CHAWLA (SUPRA) AND M/S. ALL CARGO GLOBAL LOGI STICS (SUPRA) ETC. HAVE BEEN ADMITTED FOR DECISION BY THE HONBLE SUPR EME COURT. THE RELEVANT 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 49 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 AD DITIONS HAVE BEEN MADE BY THE AO ON THE BASIS OF ANY INCRIMINATING MA TERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. THE AO HAS SOLELY RELIED UPON THE REPORT OF THE INV ESTIGATION WING KOLKATA AND STATEMENT OF ONE SHRI ANAND SHARMA RECO RDED BY THE INVESTIGATION WING DURING THE SURVEY UNDER SECTION 133A OF THE ACT. THEREFORE, EVEN IF THE INFORMATION/REPORT OF THE IN VESTIGATION WING KOLKATA IS CONSIDERED AS A RELEVANT EVIDENCE, THE S AME CANNOT BE REGARDED AS INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE IT ACT IN CASE OF THE ASSESSEE. THE REQUIREMENT FOR MAKING THE ADDITION U NDER SECTION 153A IN THE ASSESSMENT YEARS WHERE THE ASSESSMENT W AS NOT PENDING ON THE DATE OF SEARCH AND THE PROCEEDINGS ARE IN TH E NATURE OF ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 50 REASSESSMENT IS ESSENTIALLY THE INCRIMINATING MATER IAL DISCLOSING UNDISCLOSED INCOME WHICH WAS NOT DISCLOSED BY THE A SSESSEE. IN THE CASE IN HAND, THE AO HIMSELF HAS NOT CLAIMED ANY IN CRIMINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. ACCORDINGLY, IN THE FACTS AND CIRCUMSTAN CES OF THE CASE AND IN VIEW OF THE BINDING PRECEDENTS ON THIS ISSUE IN WHICH THE SLP FILED BY THE REVENUE WAS ALSO DISMISSED BY THE HONBLE SU PREME COURT, THE ADDITIONS MADE BY THE AO WHILE PASSING THE ASSESSME NT ORDERS UNDER SECTION 153A FOR THE ASSESSMENT YEARS 2010-11 TO 13 -14 ARE NOT SUSTAINABLE AND ACCORDINGLY THE SAME ARE LIABLE TO BE DELETED. WE ORDER ACCORDINGLY. THE FOUNDATION OF THE ASSESSMENT ORDER IS THE INFOR MATION RECEIVED FROM THE INVESTIGATION WING, KOLKATA AND STATEMENT OF SHRI ANAND SHARMA AND SHRI ANKIT BAGRI IN RESPECT OF THE DIFFE RENT TRANSACTIONS OF UNSECURED LOAN/SPECIAL DEPOSITS FOR ISSUING SPEC IAL PREFERENTIAL EQUITY SHARES. THE LD. CIT(A) THOUGH HAS NOT DISPUT ED THE LEGAL PROPOSITION ON THIS ISSUE, HOWEVER, THE GROUND RAIS ED BY THE ASSESSEE WAS DISMISSED MERELY ON THE REASON THAT TH E SLP FILED BY THE REVENUE IN THE CASE OF CIT VS. KABUL CHAWLA (SU PRA) AND M/S ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA) HAVE BEEN ADMIT TED 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 T HE TRIBUNAL IN THE ORDER CITED (SUPRA) AND WE FIND THAT AN IDENTICAL F INDING HAS BEEN GIVEN BY THE LD. CIT(A) IN THE CASE OF ASSESSEE. TH EREFORE, NEITHER IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS REF ERRED OR RELIED UPON ANY INCRIMINATING MATERIAL FOUND DURING THE CO URSE OF SEARCH AND SEIZURE ACTION IN THE CASE OF ASSESSEE NOR THE LD. CIT(A) HAS DISPUTED THIS FACT THAT THE ASSESSING OFFICER WAS N OT HAVING ANY INCRIMINATING MATERIAL IN HIS POSSESSION FOUND AND SEIZED DURING THE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 51 COURSE OF SEARCH AND SEIZURE ACTION IN THE CASE OF THE ASSESSEE WHICH HAS DISCLOSED ANY UNACCOUNTED OR UNDISCLOSED INCOME OF THE ASSESSEE. THE INFORMATION RECEIVED FROM THE INVESTI GATION WING, KOLKATA AS WELL AS THE STATEMENT OF SHRI ANAND SHAR MA AND SHRI ANKIT BAGRI CANNOT BE REGARDED AS INCRIMINATING MAT ERIAL 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 DECISIO NS/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 HAVE NO REASON TO TAKE A DIFFERENT VIEW ON THIS ISSUE. ACCORDINGLY, B Y FOLLOWING THE EARLIER DECISION OF THIS TRIBUNAL IN THE CASE OF GR OUP CONCERN M/S KOTA DALL MILL WE HOLD THAT THE ADDITION MADE BY THE ASS ESSING OFFICER WHILE PASSING THE ASSESSMENT ORDERS FOR THE A.Y. 20 10-11 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 ALLO WED. X X X X X X X X X X X 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE DE MANDED THE CROSS EXAMINATION OF THE WITNESSES, THEREFORE, STATEMENTS HAVE BEEN RELIED UPON BY THE ASSESSING OFFICER WHILE FRAMING THE ASS ESSMENTS UNDER CONSIDERATION. THE LD. CIT(A) THOUGH WHILE CALLING THE REMAND REPORT OF THE ASSESSING OFFICER DIRECTED TO ALLOW THE CROS S EXAMINATION TO THE ASSESSEE, HOWEVER, WHEN THE ASSESSING OFFICER HAS E XPRESSED HIS INABILITY TO PRODUCE THE WITNESSES FOR CROSS EXAMIN ATION, THE LD. CIT(A) HAS FINALLY REJECTED THE OBJECTION RAISED BY THE ASSESSING OFFICER. AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY US IN THE CASE OF KOTA DALL MILL (SUPRA) VIDE ORDER DATED 31/12/2018 IN PARA 11.1 AS UNDER: 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 52 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 53 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. 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 54 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 55 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. 13. IN KISHANCHAND CHELLARAM ( SUPRA ) WHEREIN THE SUPREME COURT OBSERVED THAT THE REVENUE AUTHORITIES HAD NOT RECOR DED THE STATEMENT OF THE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 56 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 57 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 TRANSACTIONS, IT IS INCUMBENT ON THE ASSESSEE TO PR ODUCE THE PARTIES ALONGWITH NECESSARY DOCUMENTS TO ESTABLISH THE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 58 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 VIOLATED IN THE INSTANT CASE. IN OTHER WORDS, WHERE THE AO DOESNT WANT TO ACCEPT THE EXPLANATION OF THE ASSES SEE AND THE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 59 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 AUTHORITIES COULD ACT PROVIDED THE MATERIAL WAS DIS CLOSED AND ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 60 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. 2.11 IN LIGHT OF ABOVE PROPOSITION IN LAW AND ESPE CIALLY TAKING INTO CONSIDERATION THE DECISION OF THE HONBLE SUPREME C OURT IN ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 61 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. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 62 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 I DENTICAL AND THEREFORE, FOLLOWING THE EARLIER ORDER OF THIS TRIB UNAL IN CASE OF KOTA DALL MILL, WE HOLD THAT THE ADDITION MADE BY THE ASSESSI NG OFFICER ON THE BASIS OF THE INFORMATION/REPORT OF THE DDIT (INVESTIGATIO N), KOLKATA AS WELL AS THE STATEMENTS OF SHRI ANAND SHARMA AND SHRI ANKIT BAGRI WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATION IS NOT SUSTAINA BLE AS THE ADDITION IS SOLELY BASED ON THE STATEMENT AND INFORMATION WHICH IS NOTHING BUT SUMMARY OF STATEMENTS RECORDED BY THE DDIT(INV), KO LKATA. HENCE, THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. GROUND NO. 2 OF THE APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. THERE IS NO DISPUTE THAT THE ASSESSMENT FOR THE A.Y. 2012-13 WAS NOT PENDING AS ON THE DATE OF SEARCH AS THE ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS ALREADY PASSED BY THE A.O. HENCE, THE AD DITION IN THE PROCEEDINGS U/S 153A OF THE ACT CANNOT BE MADE IN A BSENCE OF INCRIMINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE ACTION OR POST SEARCH ENQUIRY. WE FIND THAT THE A.O. HAS NOT REFER RED ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE PROCEE DINGS BUT WHAT IS RELIED UPON BY THE A.O. IS THE REPORT OF THE INVEST IGATION WING, KOLKATA, WHICH WAS PREEXISTING THE SEARCH AND SEIZURE ACTION I N THE CASE OF THE ASSESSEE. ACCORDINGLY IN VIEW OF THE EARLIER ORDERS OF THIS TRIBUNAL, THE ADDITION MADE BY THE A.O. ARE OTHERWISE NOT SUSTAINA BLE IN LAW. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 63 11. AS REGARDS THE ORDER PASSED BY THE A.O. WITHOUT GIVING THE OPPORTUNITY OF CROSS EXAMINATION, WE FIND THAT THE F ACTS ON THIS ISSUE ARE IDENTICAL AS IN THE CASE OF OTHER GROUP CONCERNS OF KOTA DALL MILL. IN THE CASE OF M/S MULTIMETALS LIMITED VS DCIT (SUPRA), TH E TRIBUNAL HAS AGAIN CONSIDERED THIS ISSUE AND FOLLOWED THE DECISION OF T HE TRIBUNAL IN THE CASE OF KOTA DALL MILL (SUPRA). THE RELEVANT FINDING OF THE TRIBUNAL ARE REPRODUCED IN THE FOREGOING PARAS OF THIS ORDER. HE NCE, FOLLOWING THE EARLIER ORDERS OF THIS TRIBUNAL, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 12. IN THE APPEAL OF THE REVENUE FOR THE A.Y. 2013- 14, FOLLOWING GROUNDS HAVE BEEN TAKEN: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS . 62,00,000/- MADE BY THE AO U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPL AINED SHARE APPLICATION MONEY ALLEGEDLY OBTAINED BY THE ASSESSE E FROM M/S BIRLA ARTS 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 OF SH ARE APPLICATION MONEY BY OBSERVING THAT THE ALLEGED INVESTOR COMPAN IES M/S BIRLA ARTS PVT. LTD. IS NOT SHELL COMPANY WITHOUT CONSIDE RING THE FINANCIAL STATEMENTS OF THE COMPANY. 3. 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 ALLEGEDLY OBTAINED FROM M/S BIRLA ARTS PVT. LTD. ME RELY FOR THE REASON THAT EVIDENCES IN THE FORM OF STATEMENT ON O ATH OF THE RELEVANT ENTRY OPERATORS WERE NOT AVAILABLE ON RECO RD. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 64 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 ALLEGEDLY OBTAINED FROM M/S BIRLA ARTS PVT. LTD. DE SPITE THE FACT THAT THE DIRECTOR OR PRINCIPAL OFFICER OF THE COMPA NY WAS NEVER PRODUCED BEFORE THE AO FOR EXAMINATION DESPITE NUMB ER OF OPPORTUNITIES PROVIDED BY THE AO FOR PRODUCING AND ALSO IGNORING THE FACT THAT THE ASSESSEE NEITHER EXPRESSED ITS IN ABILITY IN PRODUCING 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 LOANS ALLEGEDLY OBTAINED FROM M/S BIRLA ARTS PVT. LTD. ME RELY BY OBSERVING THAT THE ASSESSEE HAS COOPERATED IN ASSESSMENT BY S HOWING HIS WILLINGNESS TO PRODUCE THE DIRECTOR OF LENDER COMPA NY AND SOME DIRECTORS/OFFICERS WERE ALSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT EVEN THE DIRECTORS WHICH WERE PRODUCED BE FORE THE AO FAILED TO SUBSTANTIATE THE GENUINENESS OF THE ALLEG ED TRANSACTIONS. 6. 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 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 DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA C ASTLES (P) LTD VS CIT (2015) 56 TAXMANN.COM 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 DISALLOWANCE O F RS. 55,66,175/- MADE BY THE AO ON ACCOUNT OF VARIOUS 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. 13. GROUNDS NO. 1 TO 6 OF THE REVENUES APPEAL ARE REGARDING THE ADDITION MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN FROM M/S BIRLA ARTS PVT. LTD. OF RS. 62.00 LACS. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 65 14. THE A.O. MADE THE ADDITION BASED ON THE REPORT O F THE INVESTIGATION WING, KOLKATA WHEREAS THE LD. CIT(A) HAS DELETED TH E ADDITION ON THE REASONING THAT THE A.O. WAS NOT HAVING ANY MATERIAL OR EVEN THE STATEMENT OF ALLEGED ENTRY OPERATOR TO SUBSTANTIATE THE DECIS ION OF TREATING THE SAID TRANSACTION AS BOGUS AND CONSEQUENTIAL ADDITION U/S 68 OF THE ACT. 15. 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 AS WELL AS THE LD AR HAVE REITERATED THEIR CONTENTIONS AS RAIS ED IN THE APPEAL FOR A.Y. 2012-13. THE LD AR HAS REFERRED TO THE VARIOUS DOCUM ENTARY EVIDENCES IN SUPPORT OF THE TRANSACTION AND ALSO SUBMITTED THAT THE LOANS WERE FINALLY REPAID BY THE ASSESSEE ON 07/6/2017. AT THE OUTSET WE NOTE THAT THE ISSUE OF UNSECURED LOAN TAKEN FROM M/S BIRLA ARTS PVT. LT D. WAS CONSIDERED BY THIS TRIBUNAL IN THE CASE OF KOTA DALL MILL VS. DCIT (SUPRA) VIDE ORDER DATED 31/12/2018. THE SAID DECISION WAS FOLLOWED BY THE TRIB UNAL IN THE CASE OF M/S MULTIMETALS LIMITED VS. DCIT (SUPRA) VIDE ORDER DATED 29/01/2019 IN PARAS 24 AND 29 AS UNDER: '24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT AN IDENTICAL IS SUE WAS CONSIDERED BY US IN THE CASE OF KOTA DALL MILL (SUPRA) IN PARA 15 AS UN DER: 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. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 66 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. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 67 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. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 68 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. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 69 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 WH ILE 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. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 70 6.9 SIMILARLY, I FIND THAT VARIOUS OBSERVATIONS OF THE AO ON BALANCE SHEET / ITR OF THE LENDER COMPANIES ARE MISCONSTRUE D, MISCONCEIVED AND 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. 4.2 ABOVE. 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 RAMNIKLALHIRJI [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. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 71 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 (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] ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 72 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 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 FOLL OWED THE DUE PROCEDURE OF LAW U/S 68 OF THE ACT. THEREFORE, REQUIRING THE ASSESSEE TO PRODUCE THE DIRECTORS OF THE LENDER COMPANY WAS NOT LEGALLY TEN ABLE IN VIEW OF THE JUDGMENT OF GUJARAT 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 73 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 74 2010-2011 2009-2010 250,00,000 2011-2012 2010-2011 20,00,000 2014-2015 2013-2014 67,57,37,000 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. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 75 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 ( SUPRA) HAS EXAMINED ALL THE RELEVANT DETAILS INCLUDING THE FUNDS AVAILABLE WITH TEAC CONSULTANTS PVT. LTD., WHICH IS SUFFICIENT FOR ADVANCEMENT OF LOAN TO THE ASSESSEE. FURTHER THE LD. CIT(A) HAS DELETED THE ADDITION ON THE BASIS THAT THE ASSE SSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE DOCUMENTAR Y EVIDENCE FILED BY THE ASSESSEE EVEN THE STATEMENT OF ALLEGED ENTRY OPERAT OR WAS NOT IN POSSESSION OF THE ASSESSING OFFICER. THE FINDING OF THE LD. CIT(A ) IN THE CASE UNDER CONSIDERATION IS IDENTICAL AS IN THE CASE OF KOTA D ALL MILL (SUPRA), THEREFORE, FOLLOWING THE EARLIER ORDER OF THIS TRIBUNAL, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. HENC E, THE APPEAL OF THE REVENUE IS DISMISSED. 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE FACTS AND CIRCUMSTANCES RELEVANT TO THE ISSUE OF LOAN TAKEN FROM M/S BIRLA ARTS PVT. LTD., WHICH WAS TREATED AS BOGUS ACCOMMODATION ENTRY BY THE ASSESSING OFFICER BUT WAS DELETED BY T HE LD. CIT(A) ARE IDENTICAL AS IN THE CASE OF M/S TEAC CONSULTANTS PV T. LTD. FOR THE A.Y. 2010-11. WE HAVE ALREADY REPRODUCED OUR FINDING IN THE CASE OF KOTA DALL MILL (SUPRA) WHEREIN M/S BIRLA ARTS PVT. LTD. WAS O NE OF THE LOAN CREDITOR, ACCORDINGLY IN VIEW OF OUR FINDING AS REPRODUCED (S UPRA), WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT (A) QUA THIS ISSUE. HENCE, THE REVENUES APPEAL IS DISMISSED. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 76 ACCORDINGLY, IN VIEW OF EARLIER DECISION OF THE TRIBU NAL ON THIS ISSUE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF TH E LD. CIT(A) IN DELETING THE ADDITION IN RESPECT OF UNSECURED LOAN TAKEN FROM TH IS COMPANY. 16. GROUND NO. 7 OF THE REVENUES APPEAL IS REGARDI NG DELETING THE DISALLOWANCE OF EXPENDITURE MADE BY THE A.O. ON THE GROUND THAT THE ASSESSEE HAS NOT DONE ANY BUSINESS DURING THE YEAR UNDER CONSIDERATION. 17. THE A.O. NOTED THAT THE ASSESSEE HAS DEBITED THE EXPENDITURE OF RS. 71,69,193/- DURING THE YEAR UNDER CONSIDERATION, HO WEVER, NO BUSINESS ACTIVITY WAS CARRIED OUT BY THE ASSESSEE DURING THE YEAR. ACCORDINGLY, THE A.O. AFTER ALLOWING THE EXPENDITURE TO THE EXTENT OF THE INCOME DECLARED BY THE ASSESSEE OF RS. 16,03,018/- DISALLOWED THE BA LANCE EXPENDITURE OF RS. 55,66,175/-. ON APPEAL, THE LD. CIT(A) HAS DELET ED THE ADDITION MADE BY THE A.O. BY CONSIDERING THE FACT THAT IT IS NOT THE CASE OF CLOSURE OF BUSINESS BUT ONLY A TEMPORARY SHUTDOWN DURING THE YE AR UNDER CONSIDERATION WHICH WAS RESUMED IN THE SUBSEQUENT YEA R. 18. 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 IS NOT THE CASE OF THE A.O. THAT THE ASSESSEE HAS PERMANENTLY CLOSED ITS B USINESS BUT THE A.O. HAS MADE THE DISALLOWANCE ON THE GROUND THAT THERE WA S NO BUSINESS ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 77 ACTIVITY DURING THE YEAR UNDER CONSIDERATION. THE LD . CIT(A) HAS DEALT THIS ISSUE IN PARA 4.3 TO 4.33 AS UNDER: '4.3.1 FROM EXAMINATION OF DOCUMENTS SUBMITTED BY T HE APPELLANT IT REVEALS THAT THERE WAS A TEMPORARY LULL IN THE PRODUCTION A ND THE APPELLANT NOT CEASED ITS BUSINESS ACTIVITIES. THIS FACTS PROVES FROM THE FIN ANCIALS AND SUBMISSION OF THE APPELLANT COMPANY ON EXAMINATION OF WHICH ITS REVEA LS THAT EVEN NO PRODUCTION ACTIVITIES WERE CARRIED OUT BY THE APPELLANT BUT ST ILL THE APPELENAT WAS HAVING THE STOCK OF SPARE PARTS, RAW MATERIAL, STOCK IN PROCES S AND FINISHED GOODS. FINALLY THE BUSINESS ACTIVITIES RESUMED FROM MARCH-2014. TH IS PROVES THAT THE APPELLANT WAS INTENDED TO RESUME THE BUSINESS ACTIVITIES AND THE BUSINESS ACTIVITIES WERE NOT PERMANENTLY CLOSED AND CEASED. 4.3.2. THE ASSESSING OFFICER HAS NOT POINTED OUT AN Y SPECIFIC DEFECTS IN THE CLAIM OF EXPENSES AND GENUINENESS OF THE EXPENSES I S ALSO NOT DOUBTED. THE AO HIMSELF ALLOWED THE EXPENSES OF RS. 16,03,018/- I.E . TO THE EXTENT OF INCOME EARNED BY THE APPELLANT. IN CASE OF TEMPORARY SUSPE NSION OF PRODUCTION AND CONSEQUENTIAL ACTIVITIES, THE APPELLANT CONTINUED T O INCUR THE EXPENSES ON THE MAINTENANCE OF THE ESTABLISHMENT AND ON ACCOUNT OF INTEREST ON LOANS ETC. GENUINENESS OF WHICH IS NOT IN DOUBT. 4.3.3 THEREFORE, IN VIEW OF ABOVE DISCUSSION, CONS IDERING THE SUBMISSION OF THE APPELLANT, RATIOS OF DECISIONS CITED BY APPLICA NT, THE IMPUGNED ADDITION OF RS. 55,66,175/- IS DELETED. IN THE RESULT, THE GROU NDS NO. 2 TO 5 OF APPEAL ARE ALLOWED.' THE LD. CIT(A) HAS CONSIDERED THE FACT THAT THE BUSIN ESS ACTIVITIES WERE RESUMED FROM MARCH, 2014 AND THEREFORE, IT WAS NOT A CASE OF PERMANENT CLOSER OF BUSINESS BUT ONLY A TEMPORARY SUSPENSION OF PRODUCTION DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) Q UA THIS ISSUE. 19. IN THE C.O. FOR THE A.Y. 2013-14, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 78 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 AB 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. 20. GROUNDS RAISED BY THE ASSESSEE IN THE C.O. FOR THE A.Y. 2013-14 ARE COMMON IN THE C.O. FOR THE A.Y. 2012-13. WE HAVE HE ARD THE LD AR AS WELL AS THE LD. CIT-DR AND CONSIDERED THE RELEVANT MATER IAL ON RECORD. THESE GROUNDS OF C.O. ARE COMMON FOR THE A.Y. 2012-13, TH EREFORE, IN VIEW OF OUR FINDING ON THIS ISSUE FOR THE A.Y. 2012-13, THE SAME ARE DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 21. FOR THE APPEAL OF A.Y. 2014-15, THE ASSESSEE HA S RAISED FOLLOWING GROUNDS OF APPEAL: ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 79 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE 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 R EGARD ARE PERVERSE AND ERRONEOUS. IT IS CONTENDED THAT THE ID. AO PASSED T HE ASSESSMENT ORDER AGAINST THE DOCTRINE OF AUDI ALTERM PARTEM, VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPP ORTUNITY OF CROSS EXAMINATION OF THE ALLEGED ACCOMMODATION ENTRY PROV IDERS, THEREFORE THE ASSESSMENT ORDER OUGHT TO HELD AS BAD IN LAW AND DESERVES TO BE ANNULLED. 2. THAT THE ORDER OF THE ID CIT (A), CONFIRMING THE ADDITION MADE BY THE AO IS ARBITRARY, WHIMSICAL, CAPRICIOUS, PERVERSE, B ASED 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 : - 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. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 80 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. 30 ,00,000/- MADE BY ID. AO U/S 68 OF INCOME TAX ACT, 1961 ON ACCOUNT OF UNSECURED LOANS TAKEN FROM FOLLOWING PARTY AND ERRONEOUSLY HELD THA T THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE UNDER MENTI ONED COMPANY IS DOUBTFUL:- NAME OF THE COMPANY FROM WHOM LOAN RECEIVED AMOUNT NAME OF ALLEGED ENTRY OPERATOR WHOSE STATEMENT WERE RELIED JALSAGAR COMMERCE PVT. LTD. 30,00,000 SHRI ANAND SHARMA 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. 6, 00,00,000/- MADE BY ID. AO U/S 68 OF INCOME TAX ACT, 1961 ON ACCOUNT OF SHARE APPLICATION MONEY RECEIPT ALONGWITH PREMIUM FROM FO LLOWING PARTY AND ERRONEOUSLY HELD THAT IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE UNDER MENTIONED COMPANY IS DOUBT FUL:- NAME OF THE COMPANY FROM WHOM LOAN RECEIVED AMOUNT NAME OF ALLEGED ENTRY OPERATOR WHOSE STATEMENT WERE RELIED MANGALGOURI VINIMAY PVT. LTD. 4,00,00,000 SHRI HANISH TOSHNIWAL QUALITY MERCANTILES PVT. LTD. 2,00,00,000 SHRI HANISH TOSHNIWAL 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 H EARING OF APPEAL. 22. GROUND NO. 1 OF THE ASSESSEES APPEAL IS REGARD ING NON-GRANT OF OPPORTUNITY OF CROSS EXAMINATION WHICH AMOUNTS TO VI OLATION OF PRINCIPLES OF NATURAL JUSTICE. THIS ISSUE IS COMMON AS THE ISSU E RAISED IN GROUND NO. 2 OF THE CROSS OBJECTION OF THE ASSESSEE FOR THE A.Y. 2012-13. THEREFORE, IN ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 81 VIEW OF OUR FINDING ON THIS ISSUE FOR THE A.Y. 2012- 13, GROUND NO. 1 OF THE ASSESSEES APPEAL IS ALLOWED. 23. GROUND NO. 2 OF THE ASSESSEES APPEAL IS GENERA L IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 24. GROUNDS NO. 3 AND 5 OF THE ASSESSEES APPEAL IS REGARDING THE ADDITION MADE BY THE A.O. OF RS. 30.00 LACS ON ACCO UNT OF UNSECURED LOAN TAKEN FROM M/S JALSAGAR COMMERCE PVT. LTD. WHICH WAS SUSTAINED BY THE LD. CIT(A). 25. WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL AS THE LD. CIT-DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ISSUE OF ADDITION MADE ON ACCOUNT OF UNSECURED LOAN TAKEN FROM M/S JA LSAGAR COMMERCE PVT. LTD. WAS CONSIDERED BY THIS TRIBUNAL IN THE CASE OF KOTA DALL MILL VS DCIT (SUPRA) VIDE ORDER DATED 31/12/2018 AND THEREAF TER IN THE CASE OF M/S MULTIMETALS LIMITED VS. DCIT (SUPRA) VIDE ORDER DATED 29/01/2019 WHEREIN THE TRIBUNAL HAS CONSIDERED THIS ISSUE IN PAR A 18 AS UNDER: 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER HAS MADE THE 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 T REATING THE SAME AS ACCOMMODATION ENTRIES. THE ASSESSING OFFICER FOR THE A.Y. 2010- 11 HAS RELIED UPON THE STATEMENT OF SHRI ANAND SHAM A WHICH WAS RECORDED BY THE KOLKATA INVESTIGATION WING AND THEN FORWARDED TO ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 82 THE ASSESSING OFFICER. ON APPEAL, THE LD. CIT(A) DE LETED THE ADDITION IN RESPECT OF M/S TEAC CONSULTANTS PVT. LT D. BY NOTING THE FACT THAT THE ASSESSING OFFICER WAS NOT EVEN HAVING ANY STATEMENT OF ALLEGED ENTRY OPERATOR CONTROLLING M/S TEAC CONS ULTANTS PVT. LTD.. THE LD. CIT(A) CONFIRMED THE ADDITION OF UNSECURED LOAN FROM M/S JALSAGAR COMMERCE PVT. LTD. BECAUSE THE ASSESSING O FFICER WAS HAVING THE STATEMENT OF SHRI ANAND SHARMA AND ACCEP TED THAT M/S JALSAGAR COMMERCE PVT. LTD. IS BENEFICIARY OF ACCOM MODATION ENTRIES. AT THE OUTSET WE NOTE THAT THAT THE IDENTI CAL ISSUE OF UNSECURED LOAN TAKEN FROM THE M/S JALSAGAR COMMERCE PVT. LTD. WAS CONSIDERED BY US IN CASE OF KOTA DALL MILL (SUP RA) IN PARA 11 AS UNDER: 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 83 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 THE SAID STATEMENT AS REPRODUCED ON PAGE NO.57 OF T HE ASSESSMENT ORDER IS AS UNDER: - ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 84 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 85 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- 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 PROVIDERS, 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 86 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 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:- ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 87 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. 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. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 88 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 89 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 90 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. 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 91 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 92 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. 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 93 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. 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 94 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 95 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 96 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 97 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 98 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 99 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 100 APPELLANT HAS INTRODUCED FRESH SHARE CAPITAL TO THE TUNE OF RS. 15,00,000/- AT A SHARE PREMIUM OF RS. 1,35,00,000/-......... 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 101 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 102 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 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. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 103 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. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 104 '...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) ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 105 JUDGMENTS WERE REITERATED BY THIS COURT IN DWARKADH ISH (SUPRA). THUS, THE LAW IN RELATION TO SECTION 68 IS WELL SETTLED. ................................................... ................................................... ......................... 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 106 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. 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 SILENT ON CROSS-EXAMINATION AND BY SUCH CONDUCT HE HAS FOR GONE HIS RIGHT TO CROSS- EXAMINE. THEREFORE, THE PRINCIPLES OF NATURAL JUSTI CE 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 107 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 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 CRY STAL DEALERS PVT. LTD., THEN EVEN IF THERE IS A POSSIBILITY OF BOGUS ACCOMM ODATION ENTRY ROUTED THROUGH ANOTHER INTERMEDIARY COMPANY M/S. JALSAGAR COMMERCE 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 T HEN 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 108 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. 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 109 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 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 :- ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 110 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 111 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 ASSESSEE PRODUCED ALL THE RELEVANT DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF UNSEC URED LOAN. WE FURTHER NOTE THAT IN SUPPORT OF ITS CLAIM, THE ASSESSEE PRO DUCED FOLLOWING DOCUMENTS: S. NO. PARTICULARS OF DOCUMENTS 1 COP Y OF ACK. OF ITR OF AY 2010 - 11 2 COPY OF BALANCE SHEET AND ANNEXURE OF LOANS & ADVAN CE 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 O F 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 ASSESSM ENT 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 TRIBU NAL IN THE CASE OF KOTA DALL MILL (SUPRA) WHEREIN THE ISSUE OF LOAN TAKEN F ROM M/S JALSAGAR ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 112 COMMERCE PVT. LTD. WAS EXAMINED AND DECIDED IN FAVO UR OF THE ASSESSEE, WE DELETE THE ADDITION MADE BY THE ASSESSING OFFICE R IN THIS REGARD. WE FIND THAT IN THE CASE IN HAND, THE ASSESSEE HAS ALSO PRODUCED ALL THE RELEVANT DOCUMENTS AS REFERRED IN THE EARLIER ORDER OF THIS TRIBUNAL WHICH INCLUDES ITR, FINANCIAL STATEMENTS, BANK STATEMENTS, CONFIRMATION OF LOAN, AFFIDAVIT OF THE DIRECTOR OF THE LOAN CREDITOR, BAL ANCE SHEET OF VARIOUS YEARS SHOWING THE AVAILABILITY OF THE FUNDS, STATUS OF THE LOAN CREDITOR AS PER THE ROC MASTER DATA AND THE ASSESSMENT ORDERS FRAMED U/ S 143(3) OF THE ACT BY THE A.O.. THEREFORE, ONCE THE ASSESSEE HAS PRODUC ED THE RELEVANT DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM AS WELL AS REPAYMENT OF THE LOAN INCLUDING THE PAYMENT OF INTEREST, WHICH WERE N OT DISALLOWED OR DISTURBED BY THE A.O. IN ANY OF THE YEARS THEN IN A BSENCE OF ANY CONTRARY MATERIAL BROUGHT BY THE A.O. TO CONTROVERT OR DISPU TE THE CORRECTNESS OF THE EVIDENCE FILED BY THE ASSESSEE, THE ADDITION MA DE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ARE NOT SUSTAINABLE. FUR THER THE STATEMENT RELIED UPON BY THE A.O. OF SHRI ANAND SHARMA, NO WHE RE STATES THAT HE HAS PROVIDED ANY ACCOMMODATION ENTRY TO THE ASSESSEE BU T REFERENCE OF M/S JALSAGAR COMMERCE PVT. LTD. IN THE STATEMENT IS ONL Y TO THE EXTENT THAT HE HAS PROVIDED ACCOMMODATION ENTRIES TO M/S JALSAGAR COMMERCE PVT. LTD. THROUGH ANOTHER COMPANY NAMELY ROYAL CRYSTAL DEALER PVT. LTD. FURTHER THE A.O. HAS NOT POINTED OUT ANY DISCREPANCY IN THE RECORD TO SHOW THAT ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 113 THE ASSESSEES OWN MONEY HAS BEEN ROUTED BACK IN TH E GARB OF UNSECURED LOANS. ACCORDINGLY, IN VIEW OF THE EARLIER ORDERS OF THIS TRIBUNAL, WE DELETE THE ADDITION MADE BY THE A.O. IN RESPECT OF UNSECUR ED LOAN TAKEN FROM M/S JALSAGAR COMMERCE PVT. LTD.. 26. GROUND NO. 5 OF THE ASSESSEES APPEAL IS REGARD ING THE ADDITION MADE BY THE A.O. IN RESPECT OF THE SHARE CAPITAL RE CEIVED FROM TWO COMPANIES NAMELY MANGALGOURI VINIMAY PVT. LTD. AND QUALITY MERCANTILES PVT. LTD. 27. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE A.O. HAS RELIED UPON THE REPORT OF THE DDIT(INV.), KOLKATA AND STAT EMENT OF SHRI HANISH TOSHNIWAL FOR MAKING THE ADDITION IN RESPECT OF THE S HARE APPLICATION RECEIVED FROM THESE TWO COMPANIES NAMELY MANGALGOURI VINIMAY PVT. LTD. AND QUALITY MERCANTILES PVT. LTD. OF RS. 4.00 CRORE S AND RS. 2.00 CRORES RESPECTIVELY. THE LD AR HAS REFERRED TO THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE SAID STATEMENT WAS NOT RECOR DED BY THE A.O. BUT WAS ALLEGEDLY RECORDED BY THE KOLKATA INVESTIGATION WING ON 11/3/2014 MUCH PRIOR TO THE SEARCH IN THE CASE OF THE ASSESSE E. FURTHER THE ASSESSEE WAS NOT GRANTED CROSS EXAMINATION OF THE SAID WITNESS DESPITE REPEATED REQUESTS, THEREFORE, THE ADDITION MADE BASED ON THE STATEMENT WHICH WAS RECORDED BY THE INVESTIGATION WING AND NOT BY THE A .O. CANNOT BE A BASIS ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 114 OF ADDITION WHEN THE ASSESSEE HAS PRODUCED ALL THE D OCUMENTARY EVIDENCES IN SUPPORT OF THE TRANSACTIONS INCLUDING THE FINANCIAL STATEMENTS, RETURN OF INCOME, ORDER PASSED BY THE A.O. U/S 143( 3) OF THE ACT IN RESPECT OF THE SHARE APPLICANTS ACCEPTING THE TRANS ACTIONS AS GENUINE. THE A.O. HAS NOT DISTURBED THE TRANSACTION OF INVESTMEN T MADE BY THESE COMPANIES WHILE PASSING THE ASSESSMENT ORDER U/S 143 (3) OF THE ACT AND THEREFORE, THE A.O. HAS NOT RELIED UPON THE ALLEGED STATEMENT OF SHRI HANISH TOSHNIWAL IN THE CASE OF SHARE APPLICANT. THE L D AR HAS ALSO REFERRED TO THE VARIOUS REPORTS OF THE DDIT(INV.), KOLKATA AND SUBMITTED THAT THESE REPORTS ARE SUFFERING FROM CONTRADICTION S AS IN SOME OF THE REPORTS THERE IS NO MENTION OF THESE COMPANIES AND EVEN NO MENTION OF ALLEGED ENTRY OPERATORS WHEREAS IN THE OTHER REPORT THERE IS MENTION OF ENTRY OPERATOR AS MR. HANISH TOSHNIWAL. EXCEPT THE R EFERENCE OF THE STATEMENT, THERE IS NO OTHER EVIDENCE TO SHOW THAT THESE COMPANIES ARE SHELL COMPANIES AND PROVIDING ACCOMMODATION ENTRIES . THE LD AR HAS REFERRED TO THE AVAILABILITY OF FUND WITH THESE COMP ANIES AS WELL AS THE STATUS AS PER THE RECORD OF THE ROC. 28. ON THE OTHER HAND, THE LD CIT-DR HAS REITERATED ITS CONTENTION AS RAISED IN RESPECT OF ADDITION MADE BY THE ASSESSING OFFICER FOR THE A.Y. 2012-13. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 115 29. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AS WELL AS RELEVANT MATERIAL ON RECORD. WE NOTE THAT THE ASSESSEE HAS P RODUCED DOCUMENTARY EVIDENCE IN RESPECT OF THESE TWO COMPANIES AS UNDER: M/S QUALITY MERCANTILES PVT. LTD. S. NO. PARTICULARS OF DOCUMENTS S. NO. OF PB WHERE DOCUMENTS ANNEXED AY 2014-15/VOL- IV 1 COPY OF ACK. OF ITR OF AY 2013-14 1043 2 COPY OF BALANCE SHEET OF AY 2013-14 ALONG WITH AL L ENCLOSURE. 1044-1051 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING T HE ENTRY OF PAYMENT MADE TO ASSESSEE. 1052-1053 4 COPY OF LEDGER ACCOUNT OF SHARE APPLICATION MONEY GIVEN TO ASSESSEE COMPANY. 1054 5 COPY OF ALLOTMENT ADVICE. 1055 6 COPY OF AFFIDAVIT OF MRS PRIYANKA SINGH DIRECTOR OF COMPANY. 1056-1059 7 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. 1060-1065 8 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF AB OVE NAMED COMPANY FOR AY 2013-14 AND 2014-15 1066-1078 9 COPY OF ROC MASTER DATA. 1079-1080 10 COPY OF PAN CARD. 1081 11 CERTIFICATE OF INCORPORATION. 1082 12 COPY OF SUMMON NO. 1432 DATED 13.10.2017 AND REMINDER NOTICE NO. 1593 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961 1083-1086 13 COPY OF REPLY SUBMITTED BY COMPANY IN RESPONSE T O NOTICE/SUMMON ISSUED TO IT ALONG WITH DISPATCHED PROOF 1087-1089 M/S MANGALGOURI VINIMAY PVT. LTD S. NO. PARTICULARS OF DOCUMENTS S. NO. OF PB WHERE DOCUMENTS ANNEXED AY 2014-15/VOL- IV 1 COPY OF ACK. OF ITR OF AY 2013-14. 1090 2 COPY OF BALANCE SHEET OF AY 2013-14 ALONG WITH ALL ENCLOSURE. 1091-1098 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 1099-1101 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 116 4 COPY OF LEDGER ACCOUNT OF SHARE APPLICATION MONEY GIVEN TO ASSESSEE COMPANY. 1102 5 COPY OF ALLOTMENT ADVICE. 1103 6 COPY OF AFFIDAVIT OF MRS PRIYANKA SINGH DIRECTOR OF COMPANY. 1104-1107 7 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. 1108-1113 8 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2013-14 AND AY 2014-15. 1114-1126 9 COPY OF ROC MASTER DATA. 1127-1128 10 COPY OF PAN CARD. 1129 11 CERTIFICATE OF INCORPORATION. 1130 12 COPY OF SUMMON NO. 1447 DATED 13.10.2017 AND REMINDER NOTICE NO. 1581 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961 1131-1134 13 COPY OF REPLY SUBMITTED BY COMPANY IN RESPONSE TO NOTICE/SUMMON ISSUED TO IT ALONG WITH DISPATCHED PROOF. 1135-1137 FURTHER THESE COMPANIES WERE ALSO SUBJECTED TO SCRUT INY ASSESSMENT FOR THE A.Y. 2013-14 AND 2014-15 U/S 143(3) OF THE ACT. THE ASSESSEE HAS FILED COPIES OF THE ASSESSMENT ORDER PASSED U/S 143 (3) OF THE ACT. THE A.O. WHILE PASSING THE ASSESSMENT U/S 143(3) OF THE ACT HAS NOT DISTURBED THE TRANSACTION OF INVESTMENT MADE BY THESE COMPANI ES IN THE SHARES OF THE ASSESSEE. FURTHER THE STATUS OF THESE COMPANIES AS PER MASTER DATA OF ROC ARE SHOWN AS ACTIVE AND NOT THE SHELL COMPANIES. THE AVAILABILITY OF FUND FOR THE A.Y. UNDER CONSIDERATION IS AS PER FIN ANCIAL STATEMENTS OF THESE COMPANIES AS ON 31/3/2014 IS RS. 5.83 CRORES IN THE CASE OF MANGALGOURI VINIMAY PVT. LTD. AND RS. 7.65 CRORES I N THE CASE OF QUALITY MERCANTILES PVT. LTD. AS AGAINST THE INVESTMENT OF RS. 4.00 CRORES AND RS. 2.00 CRORES RESPECTIVELY MADE BY THESE COMP ANIES. THEREFORE, ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 117 WHEN THE FINANCIAL STATEMENTS WERE ACCEPTED BY THE A. O. THEN THE AVAILABILITY OF FUNDS WITH THESE COMPANIES CANNOT BE DISPUTED IN THE ASSESSMENT OF THE RECIPIENT. IDENTICAL ISSUES HAVE BEEN CONSIDERED BY THIS TRIBUNAL IN THE CASE OF M/S JALSAGAR COMMERCE PVT. L TD., THEREFORE, IN VIEW OF OUR FINDINGS ON THE ISSUE OF ADDITION MADE IN RE SPECT OF M/S JALSAGAR COMMERCE PVT. LTD., WE DELETE THE ADDITION MADE BY T HE ASSESSING OFFICER IN RESPECT OF THESE TWO COMPANIES. 30. 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. 31. 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. 32. IN THE CROSS APPEAL FOR THE A.Y. 2014-15, THE R EVENUE HAS RAISED FOLLOWING GROUNDS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS . 20,71,00,000/- AND RS. 24,00,00,000/- MADE BY THE AO U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS AND UNEXPLAINED SHARE A PPLICATION MONEY CLAIMED TO HAVE OBTAINED BY THE ASSESSEE FROM M/S BIRLA ARTS PVT. LTD., M/S BAIJNATH COMMOSALES PVT. LTD. M/S BL OSSOM DEALERS PVT. LTD., M/S FAIRLAND PLAZZA PVT. LTD., M/S KAVER I HIRE PURCHASE AND ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 118 DEPOSITS PVT. LTD., M/S MACROSOFT TECHNOLOGY PVT. L TD., AND M/S MAGNATE CAPITAL MARKET LTD. RESPECTIVELY. 2. 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 BY OBSERVING THAT THE ALLEGED LENDER M/S BIRLA ARTS PV T. LTD., M/S BAIJNATH COMMOSALES PVT. LTD. M/S BLOSSOM DEALERS P VT. LTD., M/S FAIRLAND PLAZZA PVT. LTD., M/S KAVERI HIRE PURCHASE AND DEPOSITS PVT. LTD., M/S MACROSOFT TECHNOLOGY PVT. LTD., AND M/S M AGNATE CAPITAL MARKET LTD. ARE NOT SHELL COMPANIES WITHOUT CONSIDE RING 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 OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD., M/S BAIJNATH COMMOSALES PVT. LTD. M/S BLOSSOM DEALERS PVT. LTD., M/S FAIRLAND PLAZZA PVT. LTD., M/S KAVERI HIRE PURCHASE AND DEPO SITS PVT. LTD., M/S MACROSOFT TECHNOLOGY PVT. LTD., AND M/S MAGNATE CAP ITAL MARKET LTD. MERELY FOR THE REASON THAT EVIDENCES IN THE FO RM 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 OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD., M/S BAIJNATH COMMOSALES PVT. LTD. M/S BLOSSOM DEALERS PVT. LTD., M/S FAIRLAND PLAZZA PVT. LTD., M/S KAVERI HIRE PURCHASE AND DEPO SITS PVT. LTD., M/S MACROSOFT TECHNOLOGY PVT. LTD., AND M/S MAGNATE CAP ITAL MARKET LTD. DESPITE THE FACT THAT THE DIRECTORS OR PRINCIP AL OFFICERS 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 ASSES SEE 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 OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S BIRLA ARTS PVT. L TD., M/S BAIJNATH COMMOSALES PVT. LTD. M/S BLOSSOM DEALERS PVT. LTD., M/S FAIRLAND PLAZZA PVT. LTD., M/S KAVERI HIRE PURCHASE AND DEPO SITS PVT. LTD, M/S MACROSOFT TECHNOLOGY PVT. LTD., AND M/S MAGNATE CAP ITAL MARKET ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 119 LTD. MERELY BY OBSERVING THAT THE ASSESSEE HAS COOP ERATED IN ASSESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE TH E DIRECTOR OF LENDER COMPANY AND SOME DIRECTORS/OFFICERS WERE ALS O PRODUCED BEFORE THE AO DESPITE THE FACT THAT EVEN THE DIRECT OR WHICH WAS 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 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 CONSID ERING THE DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA C ASTLE (P) LTD VS CIT (2015) 56 TAXMANN.COM 18(SC) WHEN THERE WERE GE NUINE 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 HOLDING THE SHARE APPLICATI ON MONEY FROM M/S BAIJNATH COMMOSALES PVT. LTD AS GENUINE WHEREAS THE CIT(A) IN OTHER GROUP CASES ON THE BASIS OF EVIDENCES AVAILABLE ON RECORD HELD UNSECURED LOANS OBTAINED FROM M/S CAPLIN DEALCOM PV T. LTD, A COMPANY IN WHICH M/S BAIJNATH COMMOSALES PVT. LTD A MALGAMATED, AS BOGUS. 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) WAS JUSTIFIED IN CONSIDERING THE AMALGAMATIN G COMPANIES AS GENUINE AND THE RESULTANT AMALGAMATED COMPANY AS SH ELL COMPANY WHICH IS A THEORETICAL IMPOSSIBILITY AS THE CONSTIT UENTS 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 DISALLOWANCE O F RS. 8,005/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 14A OF THE IT ACT. 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. 33. GROUNDS NO. 1 TO 6 OF THE APPEAL ARE REGARDING THE ADDITIONS MADE BY THE A.O. IN RESPECT OF UNSECURED LOAN AND SHARE APPLICATION MONEY WAS ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 120 DELETED BY THE LD. CIT(A) ON THE GROUND THAT THE A.O . WAS NOT HAVING ANY MATERIAL IN SUPPORT OF THE DECISION AS THE STATEMEN T OF THE ALLEGED ENTRY OPERATOR WAS NOT IN THE POSSESSION OF THE A.O. AT TH E TIME OF ASSESSMENT. 34. WE HAVE HEARD THE LD CIT-DR AS WELL AS THE LD AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ADDITION MADE BY THE A.O. IN RESPECT OF UNSECURED LOAN FROM M/S BIRLA AR TS PVT. LTD. WHICH WAS DELETED BY THE LD. CIT(A) IS COMMON AS IN THE A.Y. 2 013-14. IN VIEW OF OUR FINDING FOR THE A.Y. 2013-14, WE UPHOLD THE ORDER OF THE LD. CIT(A) QUA THESE ISSUES. 35. THE ADDITION IN RESPECT OF SHARE CAPITAL RECEIVE D FROM FOLLOWING COMPANIES: SL. NO. NAME OF COMPANIES AMOUNT 1 M/S BAIJNATH COMMOSALES PVT. LTD . 2,00,00,000 2. M/S BLOSSOM DEALERS PVT. LTD . 3,00,00,000 3. M/S FAIRLAND PLAZZA PVT. LTD. 6,50,00,000 4. M/S MACROSOFT TECHNOLOGY PVT. LTD 2,00,00,000 5. M/S MAGNATE CAPITAL MARKET LTD 1,00,00,000 EXCEPT THE M/S FAIRLAND PLAZZA PVT. LTD., ALL OTHER ADDITIONS MADE BY THE A.O. ARE COMMON AS IN THE ORDER PASSED BY THE TRIBUN AL IN THE CASE M/S MULTIMETALS LIMITED VS DCIT (SUPRA) AND IN THE CASE OF M/S KOTA DAAL MILL VS. DCIT(SUPRA). THE FIRST TWO COMPANIES NAMELY M/S BA IJNATH COMMOSALES PVT. LTD. AND M/S BLOSSOM DEALERS PVT. L TD. HAVE BEEN ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 121 CONSIDERED BY THIS TRIBUNAL IN THE CASE OF M/S MULTI METALS LTD. VS DCIT(SUPRA) IN PARA 47 TO 49 AS UNDER: 47. THE LD. CIT-DR HAS SUBMITTED THAT THE ASSESSEE WAS GIVEN VARIOUS OPPORTUNITIES BUT FAILED TO PRODUCE THE PRINCIPAL O FFICER OR THE DIRECTORS OF THESE COMPANIES TO SUBSTANTIATE THE GE NUINENESS OF THE TRANSACTION WHEN SHRI ANKIT BAGRI HAS ADMITTED HIS INVOLVEMENT IN PROVIDING ACCOMMODATION ENTRIES. HE HAS REFERRED TO THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSING O FFICER 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 REASONABLE CONCL USION 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 THE STATEMENT OF SHRI ANKIT BAGRI AS WELL AS THE REPORT OF INVEST IGATION WING, KOLKATA, HOWEVER, NEITHER IN THE STATEMENT NOR IN T HE REPORTS ANY ALLEGATION HAS MADE IN RESPECT OF THESE TRANSACTION S OF LOAN AS WELL AS SPECIAL DEPOSITS RECEIVED BY THE ASSESSEE FROM T HESE PARTIES. THE ASSESSING OFFICER HAS EXTRAPOLATED THE STATEMEN T OF SHRI ANKIT BAGRI AND APPLIED THE SAME TO THE OTHER CASES WHERE AS THERE IS NO WHISPER ABOUT THE ACCOMMODATION ENTRIES FROM THESE PARTIES. THE LD. CIT(A) HAS DELETED THE ADDITION BY CONSIDERING THE FACT THAT THE ASSESSING OFFICER WAS NOT HAVING ANY MATERIAL OR AN Y STATEMENT OF THE ALLEGED ENTRY PROVIDER OR OPERATOR. THE TRIBUNA L HAS CONSIDERED THIS ISSUE IN THE CASE OF KOTA DALL MILL (SUPRA) WH EREIN ALL THESE PARTIES INCLUDING M/S BIRLA ARTS PVT. LTD., TEAC CO NSULTANTS PVT. LTD., ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 1 22 MS/S MAGNET CAPITAL MARKET LTD., M/S COMPETENT SECU RITIES PVT. LTD. HAVE BEEN EXAMINED. AS REGARDS M/S BLOSSOM DEA LERS PVT. LTD. AND M/S BAIJNATH COMMOSALES PVT. LTD., THE LD AR HA S SUBMITTED THAT IN CASE OF M/S BAIJNATH COMMOSALES PVT. LTD., THE AMOUNT WAS REPAID ON 22/3/2013 AND THEREFORE, IT WAS NOT OUTST ANDING AS ON 31/3/2013 RELEVANT TO THE ASSESSMENT YEAR UNDER CON SIDERATION. FURTHER THE SAID COMPANY M/S BAIJNATH COMMOSALES PV T. LTD., WAS SUBSEQUENTLY MERGED WITH M/S CAPLIN DEALCOM PVT. LT D. AS PER APPROVAL OF THE HONBLE KOLKATA HIGH COURT. HE HAS SUPPORTED THE ORDER OF THE LD. CIT(A). HE HAS REFERRED TO THE VAR IOUS DOCUMENTS PRODUCED BY THE ASSESSEE IN SUPPORT OF THE CLAIM AN D TO SHOW THAT THESE COMPANIES ARE GENUINE NBFCS AND WERE HAVING S UFFICIENT FUNDS TO GIVE THIS DEPOSIT TO THE ASSESSEE. 49. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. OUT OF THESE SIX PARTIES FOR WH ICH THE ASSESSING OFFICER MADE THE ADDITION, THE LD. CIT(A) DELETED T HE ADDITION IN RESPECT OF FIVE PARTIES WHICH ARE AS UNDER: I) M/S BIRLA ARTS PVT. LTD. II) M/S BLOSSAM DEALERS PVT. LTD. 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 PV T. LTD., M/S MAGNET CAPITAL MARKET LTD. AND M/S COMPETENT SECURI TIES PVT. LTD. WE NOTE THAT THE IDENTICAL TRANSACTIONS WERE CONSID ERED BY THIS TRIBUNAL IN CASE OF KOTA DALL MILL (SUPRA) WHICH HA S 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 MAGNET CAPITA L MARKET LTD. AND M/S COMPETENT SECURITIES PVT. LTD., THE TRANSAC TION WITH THESE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 123 TWO COMPANIES HAVE BEEN CONSIDERED BY THE TRIBUNAL IN THE CASE OF KOTA DALL MILL (SUPRA) IN PARA 22, 30 AND 31 AS UND ER: 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 124 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. 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/VOL - 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 125 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 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 SUBMIT TED 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 PASS ED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES WITH THIS COMPANY. 785 - 806/VOL - III ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 126 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 INCORPORATION. 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 BI RLA 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 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 OF 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 MASTER 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 127 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 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/VOL - 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 COMP ANY 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 COP Y 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 128 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 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 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 129 M/S COMPETENT SECURITIES PVT. LTD 2014 - 15 9,06,648 693 - 696/VOL - II M/S BIRLA ARTS PVT LTD THE 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 MA RKET LTD. ACTIVE 539//VOL - II M/S COMPETENT SECURITIES PVT. LTD ACTIVE 700 - 701/VOL - II M/S BAIJNATH COMMOSALES PVT. LTD AMALGAMATED FROM THE DETAILS OF THE DOCUMENTS PRODUCED BY THE A SSESSEE, IT IS CLEAR THAT THE ASSESSEE HAS ESTABLISHED ITS CLAIM B Y DOCUMENTARY EVIDENCE AS WELL AS THE ASSESSMENT ORDERS PASSED U/ S 143(3) OF THE ACT WHEREIN ALL THESE TRANSACTIONS WERE ACCEPTED BY THE ASSESSING OFFICER. AS PER THE ROC MASTER DATA, THE STATUS OF THESE COMPANIES HAVE BEEN SHOWN AS ACTIVE AND IN CASE OF M/S BAIJNA TH COMMOSALES PVT. LTD., IT IS ALSO SHOWN AS AMALGAMATED. AS IT I S CLEAR FROM THE RECORD THAT THE SCHEME OF AMALGAMATION WAS APPROVED BY THE HON'BLE HIGH COURT OF KOLKATA. THE ASSESSEE HAS EST ABLISHED THE AVAILABILITY OF FUNDS WITH THESE COMPANIES WHICH AR E NBFCS RAISED SHARE CAPITAL DURING THE VARIOUS FINANCIAL/ASSESSME NT YEARS, THEREFORE, ONCE THE COMPANIES WERE HAVING SUFFICIENT FUND TO G IVE SPECIAL DEPOSITS UNDER THE MEMORANDUM OF UNDERSTANDING WHER EBY THE ASSESSEE HAS UNDERTAKEN TO ISSUE THE EQUITY SHARES ON PREFERENTIAL BASIS AGAINST THESE DEPOSITS AFTER THE EQUITY SHARE S WERE DELISTED FROM THE STOCK EXCHANGE. THE PROCESS OF DELISTING W AS NOT IN DISPUTE AS IT WAS ACKNOWLEDGED BY THE STOCK EXCHANGE, KOLKAT A AS WELL AS BY THE SEBI WHICH IS AN INDEPENDENT RECORD AND THERE IS NO SCOPE OF ANY MANIPULATION BY THE ASSESSEE. THEREFORE, HAVING REG ARD TO THE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 130 DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE AND T HE STATEMENT WHICH IS RELIED UPON BY THE ASSESSING OFFICER IS FU LL OF CONTRADICTIONS NOT ESTABLISHING THE CASE THAT THE TRANSACTIONS OF SPECIAL DEPOSITS BETWEEN THE ASSESSEE AND THESE PARTIES ARE ACCOMMOD ATION ENTRIES. 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 ACCOMMODATION ENTRIES ALONGWITH HIS PARTNER LATE SH RI SUMIT KEJRIWAL BUT AFTER THE DEATH OF SUMIT KEJRIWAL ON 07/4/2012 HE HAS NOT DONE ANY ACTIVITY OF PROVIDING ACCOMMODATION ENTRY. SINC E ALL THESE TRANSACTIONS ARE SUBSEQUENT TO THE SAID DATE OF DEA TH OF SHRI SUMIT KEJRIWAL, THEREFORE, THE STATEMENT ITSELF IS NOT HE LPING THE CASE OF THE ASSESSING OFFICER. EVEN OTHERWISE WHEN THE ASSESSEE HAS PRODUCED THE DOCUMENTARY EVIDENCE IN SUPPORT OF ITS CLAIM AN D THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY CONTRARY MATE RIAL TO DISPUTE THE CORRECTNESS OF THE DOCUMENTARY EVIDENCE FILED BY TH E ASSESSEE THEN THE ADDITION MADE BY THE ASSESSING OFFICER MERELY O N THE BASIS OF THE STATEMENT IS NOT SUSTAINABLE. FURTHER WE HAVE ALREA DY TAKEN A VIEW THAT THE STATEMENT RELIED UPON BY THE ASSESSING OFF ICER WITHOUT GIVING OPPORTUNITY OF CROSS EXAMINATION IS CLEAR VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY THE ADDITION MADE MERELY ON THE BASIS OF STATEMENT IS NOT SUSTAINABLE. EVEN OTHERWIS E THE LD. CIT(A) HAS DELETED THE ADDITION ON THE GROUND THAT THE ASS ESSING OFFICER WAS NOT HAVING IN HIS POSSESSION THE STATEMENT OF THE A LLEGED ENTRY PROVIDERS IN RESPECT THESE FIVE PARTIES EXCEPT IN T HE CASE OF M/S CAPLIN DEALCOM PVT. LTD. HENCE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AS DISCUSSED ABOVE, WE DO NOT FIND AN Y ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. ACCORDINGLY ALL THE RELEVANT FACTS AS WELL AS DOCUME NTARY EVIDENCE PRODUCED BY THE ASSESSEE IN RESPECT OF THESE COMPAN IES WERE CONSIDERED ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 131 BY THE TRIBUNAL IN THE ABOVE CITED DECISION IN THE C ASE OF M/S MULTIMETALS LTD. VS. DCIT(SUPRA). HENCE, IN VIEW OF THE EARLIER ORDER OF THE TRIBUNAL, WE NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION IN RESPECT OF THESE TWO COM PANIES. 36. AS REGARDS M/S MACROSOFT TECHNOLOGY PVT. LTD. AN D M/S MAGNATE CAPITAL MARKET LTD., WE FIND THAT THE TRIBUNAL IN THE CASE OF KOTA DALL MILL VS. DCIT (SUPRA) VIDE ORDER DATED 31/12/2018 HAS CO NSIDERED THE ADDITION MADE BY THE A.O. AND DELETED BY THE LD. CIT(A) IN RE VENUES APPEAL IN PARA 19 TO 22 AS UNDER: 19. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE AO HAS MADE TH E ADDITION OF THE AMOUNT OF PARTNERS CAPITAL FROM THESE FOUR COR PORATE ENTITIES ON IDENTICAL REASONING AS THE ADDITION WAS MADE ON ACCOUNT OF UNSECURED LOANS. DURING THE YEAR UNDER CONSIDERATIO N, THE ASSESSEE FIRM RECEIVED RS. 42,47,25,000/- ON ACCOUNT OF PART NERS CAPITAL FROM THE CORPORATE PARTNERS AS UNDER :- S. NO. NAME OF THE PARTNER ADDITION OF CAPITAL DURING AY UNDER APPEAL 1 M/S BANSIDHAR ADVISORY PRIVATE LIMITED RS. 13,22,20,000/- 2 M/S VASUNDHARA ADVISORY PRIVATE LIMITED RS. 8,96,45,000/- 3 M/S PRITHVI VINIMAY PRIVATE LIMITED RS. 13,93,45,000/- 4 M/S MACRO SOFT TECHNOLOGY PRIVATE LIMITED RS. 6,35,15,000/- TOTAL RS. 42,47,25,000/- ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 132 WE FIND THAT THE ASSESSEE PRODUCED ALL THE RELEVAN T DOCUMENTARY EVIDENCE IN SUPPORT OF THE TRANSACTIONS BEFORE THE AO. THE SUMMARY OF THESE DOCUMENTS ARE AS UNDER :- S.NO PARTICULARS PAPER BOOK PAGE NO. M/S VASUNDHARA ADVISORY PVT. LTD. 1 COPY OF LEDGER A/C OF PARTNER FROM BOOKS OF ACCOUNT S OF ASSESSEE. 843-845 2 COPY OF ACK. OF ITR OF AY 2010-11 AND COMPUTATION O F TOTAL INCOME. 846-847 3 COPY OF BALANCE SHEET OF AY 2010-11 848-855 4 CONFIRMATION OF A/C OF THE ASSESSEE FROM BOOKS OF A CCOUNTS OF PARTNER. 856-859 5 COPIES OF RELEVANT BANK A/C OF PARTNER SHOWING THE ENTRIES OF PAYMENT MADE TO ASSESSEE AGAINST CAPITAL INTRODUCE. 860-872 6 COPY OF AFFIDAVIT EXECUTED BY MR. RAVI MUNDRA DIREC TOR OF DOSHI MANAGEMENT PVT. LTD ON BEHALF OF AMALGAMATED COMPAN Y M/S VASUNDHARA ADVISORY PVT LTD, 873-875 7 COPY OF ORDER OF CALCUTTA HIGH COURT REGARDING AMAL GAMATION OF COMPANY IN DOSHI MANAGEMENT PVT. LTD 876-900 8 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31. 03.2011, 31.03.2012 AND 31.03.2013. 901-904 9 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2014-15. 905-908 10 COPY OF ROC MASTER DATA. 909 11 COPY OF CERTIFICATE DATED 06.11.2011 ISSUED BY REGI STRAR OF COMPANIES REGARDING MODIFICATION OF CHARGES/MORTGAGE. 910 12 COPY OF PAN CARD. 911 13 COPY OF SUMMON NO. 1439 DATED 13.10.2017 AND REMIND ER NOTICE NO. 1579 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION ), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961. 912-915 14 COPY OF REPLY SUBMITTED BY THE COMPANY IN RESPONSE TO SUMMON/NOTICE ISSUED TO IT ALONG WITH DISPATCHED PR OOF 916-918 M/S. PRITHIVI VINIMAY PVT. LTD. 15 COPY OF LEDGER A/C OF PARTNER FROM BOOKS OF ACCOUNT S OF ASSESSEE. 919-921 16 COPY OF ACK. OF ITR OF AY 2010-11 AND COMPUTATION O F TOTAL INCOME. 922-923 17 COPY OF BALANCE SHEET OF AY 2010-11 924-942 18 CONFIRMATION OF A/C OF THE ASSESSEE FROM BOOKS OF A CCOUNTS OF PARTNER. 943-946 19 COPIES OF RELEVANT BANK A/C OF PARTNER SHOWING THE ENTRIES OF PAYMENT MADE TO ASSESSEE AGAINST CAPITAL INTRODUCE 947-958 20 COPY OF AFFIDAVIT EXECUTED BY MR. RAVI MUNDRA DIREC TOR OF DOSHI MANAGEMENT PVT. LTD ON BEHALF OF AMALGAMATED COMPAN Y M/S PRITHVI VINIMAY PVT LTD, 959-962 21 COPY OF ORDER OF CALCUTTA HIGH COURT REGARDING AMAL GAMATION OF COMPANY IN DOSHI MANAGEMENT PVT. LTD 963-987 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 133 22 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31. 03.2011, 31.03.2012 AND 31.03.2013. 988-991 23 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2006-07 AND 2014-15. 992-1000 24 COPY OF ROC MASTER DATA. 1001-1002 25 COPY OF CERTIFICATE DATED 08.02.2013 ISSUED BY REGI STRAR OF COMPANIES REGARDING MODIFICATION OF CHARGES/MORTGAGE. 1003 26 COPY OF PAN CARD. 1004 27 COPY OF SUMMON NO. 1440 DATED 13.10.2017 AND REMIND ER NOTICE NO. 1578 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATIO N), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961. 1005-1008 28 COPY OF REPLY SUBMITTED BY THE COMPANY IN RESPONSE TO SUMMON/NOTICE ISSUED TO IT ALONG WITH DISPLACED PRO OF 1009-1011 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 29 COPY OF LEDGER A/C OF PARTNER FROM BOOKS OF ACCOUNT S OF ASSESSEE. 1012-1013 30 COPY OF ACK. OF ITR OF AY 2010 AND COMPUTATION OF T OTAL INCOME. 1014-1015 31 COPY OF BALANCE SHEET OF AY 2010-11 1016-1024 32 CONFIRMATION OF A/C OF THE ASSESSEE FROM BOOKS OF A CCOUNTS OF PARTNER. 1025-1027 33 COPIES OF RELEVANT BANK A/C OF PARTNER SHOWING THE ENTRIES OF PAYMENT MADE TO ASSESSEE AGAINST CAPITAL INTRODUCE. 1028-1033 34 COPY OF AFFIDAVIT OF DEEPA KRIPLANI DIRECTOR OF COM PANY. 1034-1037 35 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. 1038-1044 36 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2009-10, 2011-12, AY 2012-13 AND 2014-15. 1045-1064 37 COPY OF ROC MASTER DATA. 1065-1066 38 COPY OF CERTIFICATE DATED 06.11.2011 ISSUED BY REGI STRAR OF COMPANIES REGARDING MODIFICATION OF CHARGES/MORTGAGE. 1067 39 COPY OF PAN CARD. 1068 40 COPY OF NOTICE NO. 1604 DATED 21.09.2017 ISSUED BY DCIT, CC, KOTA U/S 131 OF INCOME TAX ACT, 1961. 1069 41 COPY OF REPLY OF NOTICE SUBMITTED BY THE COMPANY 1070 42 COPY OF SUMMON NO. 2115 DATED 31.10.2017 ISSUED BY DCIT, CC, KOTA U/S 131 OF INCOME TAX ACT, 1961. 1071 43 COPY OF REPLY OF NOTICE SUBMITTED BY THE COMPANY ON 13.11.2017 AND 23.11.2017. 1072-1074 M/S BANSHIDHAR ADVISORY PVT. LTD 44 COPY OF LEDGER A/C OF PARTNER FROM BOOKS OF ACCOUNT S OF ASSESSEE. 1075-1077 45 COPY OF ACK. OF ITR OF AY 2010-11 AND COMPUTATION O F TOTAL INCOME. 1078-1079 46 COPY OF BALANCE SHEET OF AY 2010-11 1080-1089 47 CONFIRMATION OF A/C OF THE ASSESSEE FROM BOOKS OF A CCOUNTS OF PARTNER. 1090-1093 48 COPIES OF RELEVANT BANK A/C OF PARTNER SHOWING THE ENTRIES OF PAYMENT MADE TO ASSESSEE AGAINST CAPITAL INTRODUCE. 1094-1100 49 COPY OF AFFIDAVIT EXECUTED BY MR. RAVI MUNDRA DIREC TOR OF DOSHI MANAGEMENT PVT. LTD ON BEHALF OF AMALGAMATED COMPAN Y M/S BANSHIDHAR ADVISORY PVT LTD, 1101-1103 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 134 50 COPY OF ORDER OF CALCUTTA HIGH COURT REGARDING AMAL GAMATION OF COMPANY IN DOSHI MANAGEMENT PVT. LTD 1104-1128 51 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31. 03.2011, 31.03.2012 AND 31.03.2013. 1129-1132 52 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2014-15. 1133-1137 53 COPY OF ROC MASTER DATA. 1138-1139 54 COPY OF CERTIFICATE DATED 06.11.2011 ISSUED BY REGI STRAR OF COMPANIES REGARDING MODIFICATION OF CHARGES/MORTGAGE. 1140 55 COPY OF PAN CARD. 1141 56 COPY OF SUMMON NO. 1438 DATED 13.10.2017 AND REMIND ER NOTICE NO. 1580 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATIO N), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961. 1142-1145 57 COPY OF REPLY SUBMITTED BY THE COMPANY IN RESPONSE TO SUMMON/NOTICE ISSUED TO IT ALONG WITH DISPATCHED PR OOF 1146-1148 THUS IT IS APPARENT THAT IN SUPPORT OF THE CLAIM OF IDENTITY OF THE CORPORATE PARTNERS, THEIR CAPACITY AND GENUINENESS OF THE TRA NSACTIONS, RELEVANT DOCUMENTARY EVIDENCES WERE ALREADY FILED BEFORE THE AO. THE ASSESSEE HAS ALSO PRODUCED THE ASSESSMENT ORDERS PASSED UNDER SE CTION 143(3) FOR VARIOUS ASSESSMENT YEARS IN CASE OF THESE FOUR CORP ORATE PARTNERS WHO HAVE INTRODUCED THE PARTNERS CAPITAL IN THE ASSESSEE FI RM. THE DETAILS OF THE ASSESSMENT ORDERS PASSED UNDER SECTION 143(3) ARE A S UNDER :- ASSESSMENT U/S 143(3) NAME OF COMPANY ASSESSMENT YEAR PAPER BOOK PAGE NO. M/S VASUNDHARA ADVISORY PVT. LTD. 2014-15 905 M/S PRITHIVI VINIMAY PVT. LTD. 2006-07 992 M/S PRITHIVI VINIMAY PVT. LTD. 2014-15 998 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 2009-10 1048-1050 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 2011-12 1052-1053 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 2012-13 1059-1060 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 2014-15 1061-1062 M/S BANSHIDHAR ADVISORY PVT. LTD 2014-15 1133-1134 ALL THESE FOUR COMPANIES STATUS HAS BEEN SHOWN IN T HE MASTER DATA OF ROC AS ACTIVE AND THREE OF WHICH, NAMELY, M/S. BANSHI DHAR ADVISORY PVT. LTD., M/S.PRITHVI VINIMAY PVT. LTD. AND M/S. VASUNDHARA A DVISORY PVT. LTD. STATUS WAS SHOWN AS AMALGAMATED. THEREFORE, THESE COMPA NIES HAVE ALREADY ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 135 UNDER GONE PROCESS OF AMALGAMATION THROUGH THE APPR OVAL OF THE HONBLE HIGH COURT. HENCE, THERE CANNOT BE ANY DISPUTE ABO UT THE IDENTITY AND THE AFFAIRS OF THESE COMPANIES AS GENUINE. THE ASSESSE E ALSO PRODUCED THE RECORDS ABOUT THE AVAILABILITY OF THE FUNDS WITH TH ESE FOUR COMPANIES WHICH WERE SUFFICIENT TO INTRODUCE THE PARTNERS CAPITAL. THE DETAILS OF THE SOURCE OF FUNDS OF THESE FOUR COMPANIES AS SUBMITTED BY THE A SSESSEE ARE AS UNDER :- M/S VASUNDHRA ADVISORY PVT. LTD. ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2006-07 2005-06 5,76,00,000 2010-11 2009-10 6,61,50,000 2011-12 2010-11 5,43,50,000 2014-15 2013-14 10,82,35,000 M/S PRITHVI VINIMAY PVT. LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2005-06 2004-05 1,51,00,000 2006-07 2005-06 4,68,20,000 2007-08 2006-07 2,72,20,000 2010-11 2009-10 7,84,00,000 2011-12 2010-11 1,96,00,000 2014-15 2013-14 12,87,50,000 M/S MACRO SOFT TECHNOLOGY PVT.LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2002-03 2001-02 9,98,000 2004-05 2003-04 9,75,00,000 M/S BANSIDHAR ADVISORY PVT. LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2006-07 2005-06 5,76,00,000 2010-11 2009-10 10,64,00,000 2011-12 2010-11 1,61,00,000 2014-15 2013-14 15,00,00,000 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 136 THE ASSESSEE HAS ALSO SUBMITTED THE RECORDS REGARDI NG THE CORPORATE GUARANTEE OF RS. 73.60 CRORES GIVEN BY THE SBBJ IN FAVOUR OF M/S. BANSIDHAR ADVISORY PVT. LTD. AND, THEREFORE, IT WAS BROUGHT O N RECORD THE FACT THAT THE BANK HAS ISSUED THE CORPORATE GUARANTEE ONLY AFTER VERIFICATION OF THE FINANCIAL CONDITION OF THE SAID COMPANY. WE FIND T HAT THE BANK GUARANTEE TO THE COMPANY OF RS. 73.60 CRORES ISSUED BY THE BANK IS ALWAYS SECURED BY THE LIQUID-ABLE ASSETS OF THE COMPANY WHICH SHOWS T HAT THE COMPANY WAS HAVING UNDERLINED ASSETS TO SECURE THE SAID BANK GU ARANTEE AND CONSEQUENTLY THE CREDITWORTHINESS OF THE SAID COMPA NY WAS DULY EXAMINED BY THE BANK. THE LD. CIT (A) HAS CONSIDERED ALL TH ESE FACTS WHILE DECIDING THIS ISSUE IN PARA 7.3 TO 7.3.9 AS UNDER :- 7.3 IT MAY BE MENTIONED THAT SAME PROCEDURE OF REM AND REPORT HAVE BEEN DONE AS DISCUSSED IN PARA 4.3 ABOVE AND T HE SAME IS NOT REPEATED HERE. SIMILARLY, AS DISCUSSED IN PARA 4.4. 3 THIS MATTER TOO WAS REFERRED BY THE AO FOR VERIFICATION BY ISSUING COMMISSION U/S 131(1)(D) TO THE DEPUTY DIRECTOR OF INCOME TAX (INV ), UNIT-1(3), KOLKATA VIDE SAME LETTERS AND SAME REPORTS AS DISC USSED IN PARA 4.4.4 WERE RECEIVED FROM THE DEPUTY DIRECTOR OF INC OME TAX (INV), UNIT-1(3), KOLKATA. AS OBSERVED IN PARA 4.4.5 & 4.4.6, THE TWO REPORTS DATED 28.11.2017 AND 06.12.2017 FROM THE DE PUTY DIRECTOR OF INCOME TAX (INV), UNIT-1(3), KOLKATA ARE CAPABLE TO FINDOUT WHERE THE APPELLANT HAS EMPLOYED FOUL MEANS AND WHE RE THE TRANSACTION ARE OF RUTINE BUSINESS REQUIREMENTS. FR OM THE CAREFUL PERUSAL OF THESE THE TWO REPORTS DATED 28.11.2017 A ND 06.12.2017 FROM THE DEPUTY DIRECTOR OF INCOME TAX (INV), UNIT- 1(3), KOLKATA. I DONT FIND ADVERSE FINDINGS ALONGWITH ELOQUENT EVID ENCES IN THE FORM OF STATEMENT ON OATH OF RELEVANT ENTRY OPERATORS IN RESPECT OF CAPITAL CONTRIBUTIONS BY FOUR COMPANIES, NAMELY, M/S BANSID HAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY PRIVATE LI MITED, M/S ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 137 PRITHVI VINIMAY PRIVATE LIMITED AND M/S MACRO SOFT TECHNOLOGY PRIVATE LIMITED. THE SAME IS EVIDENT FROM THE RESPE CTIVE DETAILS FOR ABOVE LENDERS IN THE ABOVE REPORTS DATED 28.11.2017 AND 06.12.2017 AS UNDER:- WITH REFERENCE TO YOUR ABOVE QUOTED LETTER, THIS O FFICE HAS ISSUED SUMMON NOTICES U/S 131 OF THE INCOME TAX ACT , 1961 DATED 13.10.2017 TO THE FOLLOWING SIXTEEN (16) COMP ANIES BASED IN KOLKATA AS MENTIONED IN YOUR ABOVE QUOTED LETTER REQUESTING TO FURNISH THE REQUISITE DETAILS RELATED TO SHARE APPLICATION MONEY/SHARE PREMIUM/SPECIAL DEPOSITS/UN SECURED LOAN/CAPITAL INTRODUCED BY PARTNERS OR ANY TRANSACT IONS MADE WITH GROUP CONCERNS OF THE KDM GROUP FOR THE PERIOD FROM F.Y. 2009-10 TO 2015-16 WITHIN 05 (FIVE) DAYS OF RE CEIPT OF SUMMON NOTICES. AS REGARDS 5 (FIVE) ASSESSES, SUMMO NS NOTICES U/S 131 OF THE INCOME TAX ACT, 1961 HAS NOT BEEN ISSUED SINCE IT IS OBSERVED THAT THE PRESENT ADDRES S OF FIVE (5) COMPANIES IS LOCATED EITHER IN RAJASTHAN OR PATIALA . ............. IN RESPONSE TO SAID BOTH NOTICES DATE D 13.10.2017 & 31.10.2017, NONE OF THE DIRECTORS APPEARED PERSONAL LY BUT THE FOLLOWING COMPANIES HAVE SUBMITTED THEIR REPLY CONT AINING VARIOUS DETAILS BY POST ON DIFFERENT DATES, THE DET AILS OF WHICH IS MENTIONED UNDER AND THE SAME IS BEING FORWARDED HEREWITH IN ORIGINAL FOR YOUR FURTHER NECESSARY ACTION AT YO UR END: S. NO. NAME OF CONCERNS PARTICULARS OF SUBMISSION DATE OF SUBMISSION RECEIVED BY POST 12. BANSHIDHAR ADVISORY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) TRANSACTIONS DETAILS WITH KDM GROUP CONCERN, COPY OF LEDGER, COPY OF CERTIFICATE OF INCORPORATION & PAN CARD, COPY OF 07.11.2017 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 138 ASSESSMENT ORDER U/S 143(3) FOR A.Y. 14-15, AUDITED ACCOUNTS FOR F.Y. 09-10 TO 12-13, SOURCE OF FUND, BANK STATEMENT SHOWING THE TRANSACTIONS WITH KDM GROUP CONCERNS, NATURE OF BUSINESS & COPY OF HONBLE HIGH COURT ORDER IN RESPECT OF AMALGAMATION. 13. VASUNDHARA ADVISORY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) NATURE OF BUSINESS, COPY OF HONBLE HIGH COURT ORDER IN RESPECT OF AMALGAMATION, TRANSACTIONS RELATED TO INVESTMENT IN EQUITY SHARES AND CAPITAL CONTRIBUTION WITH KDM GROUP CONCERN, BANK STATEMENT DEPICTING THE TRANSACTIONS WITH KDM GROUP CONCERNS, AUDITED ACCOUNTS FOR F.Y. 09-10 TO 12-13, SOURCE OF FUND, COPY OF CERTIFICATE OF INCORPORATION & PAN CARD, COPY OF LEDGER & COPY OF ASSESSMENT ORDER U/S 143(3) FOR THE A.Y. 14-15. 07.11.2017 14. PRITHVI VINIMAY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) TRANSACTIONS DETAILS, COPY OF LEDGER ALONG WITH SUPPORTING DOCUMENTS INCL. SHARE APPLICATIONS, SHARE ALLOTMENT, ACCOUNT CONFIRMATION FROM KOTA DALL MILL, FORM- 2, AUDITED ACCOUNTS FOR F.Y. 09-10 TO 12- 13, COPY OF ASSESSMENT ORDER U/S 143(3) FOR A.Y. 14-15, COPY OF CERTIFICATE OF INCORPORATION AND PAN CARD, DETAILS REGARDING SOURCE OF 07.11.2017 ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 139 FUND, BANK STATEMENT DEPICTING THE TRANSACTIONS DETAILS & COPY OF HONBLE HIGH COURT ORDER IN RESPECT OF AMALGAMATION. NO SUMMONS WERE ISSUED FOR M/S MACRO SOFT TECHNOLOG Y PVT. LTD BY DDIT (INV.) UNIT 1(3) KOLKATA .......THIS OFFICE HAS ALSO VERIFIED THE COMPANIES AS PER DATABASE OF PAPER/SHELL COMPANIES/ENTITIES PREPARED BY DIRECTORATE OF INVESTIGATION WING, KOLKATA ON THE B ASIS OF STATEMENTS OF VARIOUS ENTRY OPERATORS AT DIFFERENT OCCASIONS BEFORE THE INCOME TAX DEPARTMENT. ON VERIFICATION, THE FOLLOWING FACTS HAS BEEN EMERGED OUT FROM THE DATAB ASE WHICH REVEALS THAT SOME COMPANIES ARE LISTED IN THE DATABASE OF PAPER/SHELL COMPANIES CONTROLLED & MANAGED BY EN TRY OPERATORS AND THE SAME IS BEING PRODUCED AS UNDER I N THE TABULAR FORM: SL. NO. NAME OF CONCERNS PAN ADDRESS GIVEN IN COMMISSION NOTICE ISSUED ENTRY OPERATOR DUMMY DIRECTOR 12 BANSIDHAR ADVISORY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) AACCB7815M 11A ESPLANADE EAST 3 RD FLOOR, KOLKATA 700069 NOTICE ISSUED U/S 131 AT GIVEN ADDRESS THIS COMPANY IS AMALGAMATE DWITH M/S DOSHI MANAGEMENT PVT LTD WHICH HAS BEEN IDENTIFIED AS PAPER/SHELL COMPANY CONTROLLED & MANAGED BY ENTRY OPERATOR ANAND SHARMA SHASHI KUMARI RAMANI- THE NAME OF THESE DUMMY DIRECTORS ARE LISTED IN DATABASE, WHO WORKED/WORKS UNDER DIFFERENT ENTRY OPERATORS FOR DIFFERENT PERIOD, THE DETAILS OF WHICH HAS BEEN GIVEN BELOW IN TABULAR FORM. 13 VASUNDHARA ADVISORY PVT LTD (AMALGAMATED AACCV1837B 11A ESPLANADE EAST 3 RD FLOOR, NOTICE ISSUED U/S 131 AT GIVEN THIS COMPANY IS AMALGAMATE WITH M/S PUNAM RAMANI THE NAME OF THESE DUMMY ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 140 WITH DOSHI MANAGEMENT PVT LTD) KOLKATA 700069 ADDRESS DOSHI MANAGEMENT PVT LTD WHICH HAS BEEN IDENTIFIED AS PAPER/SHELL COMPANY CONTROLLED & MANAGED BY ENTRY OPERATOR ANAND SHARMA DIRECTORS ARE LISTED IN DATABASE, WHO WORKED/WORKS UNDER DIFFERENT ENTRY OPERATORS FOR DIFFERENT PERIOD, THE DETAILS OF WHICH HAS BEEN GIVEN BELOW IN TABULAR FORM. 14 PRITHVI VINIMAY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) AADCP4531D 11A ESPLANADE EAST 3 RD FLOOR, KOLKATA 700069 NOTICE ISSUED U/S 131 AT GIVEN ADDRESS THIS COMPANY IS AMALGAMATE D WITH M/S DOSHI MANAGEMENT PVT LTD WHICH HAS BEEN IDENTIFIED AS PAPER/SHELL COMPANY CONTROLLED & MANAGED BY ENTRY OPERATOR ANAND SHARMA DEEPAK TIBREWAL THE NAME OF THESE DUMMY DIRECTORS ARE LISTED IN DATABASE, WHO WORKED/WORKS UNDER DIFFERENT ENTRY OPERATORS FOR DIFFERENT PERIOD, THE DETAILS OF WHICH HAS BEEN GIVEN BELOW IN TABULAR FORM. IT MAY BE MENTIONED HERE THAT AMALGAMATION TOOK PLACE IN JULY 2 014 WHERE AS STATEMENT OF SHRI ANAND SHARMA ARE PRIOR TO MARCH 2014. FURTHER, THE VERIFICATION AND INVESTIGATION OF PAS T AND PRESENT DIRECTORS OF FOLLOWING COMPANIES HAS BEEN C ARRIED OUT WITH THE HELP OF DATABASE OF ENTRY OPERATORS PREPAR ED BY DIRECTORATE OF INVESTIGATION WING, KOLKATA WHICH RE VEAL THAT THE DIRECTORS OF THESE COMPANIES HAVE BEEN LISTED U NDER THE NAME OF VARIOUS ENTRY OPERATORS WHO ARE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES BY APPO INTING VARIOUS DUMMY DIRECTORS BY KNOWN ENTRY OPERATORS WHOSE NAMES HAS BEEN MENTIONED IN THE UNDER MENTIONED TAB LE. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 141 S. NO. NAME OF COMPANY NAME OF DIRECTOR(S) PERIOD NAME OF ENTRY OPERATOR 1. VASUNDHARA ADVISORY PVT LTD PUNAM RAMANI 28.02.2011- TILL DATE NAWAL KISHORE JALAN 2. PRITHVI VINIMAY PVT LTD DEEPAK TIBREWAL 28.03.2014- TILL DATE PANKAJ AGARWAL 3. BANSIDHAR ADVISORY PVT LTD SHASHI KUMARI RAMANI 09.01.2009- 16.03.2012 ANKIT BAGRI IT MAY BE MENTIONED HERE THAT THREE COMPANIES NAMEL Y; M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITE D WERE AMALGAMATED WITH M/S DOSHI MANAGEMENT PVT LTD IN JU LY 2014 IN ACCORDANCE WITH PERMISSION FROM KOLKATA HIGH COURT, WHEREAS THE STATEMENTS ENTRY OPERATOR ANAND SHARMA ARE DATED 02 .07.2013 AND 06.02.2017 I.E. PRIOR TO MARCH 2014 BY WHICH M/S DO SHI MANAGEMENT PVT. LTD. MIGHT HAVE BEEN IDENTIFIED AS PAPER/SHELL COMPANY. NEITHER STATEMENT OF SHRI ANAND SHARMA NOT ANY LIST OR ANNEXURE OF SAID STATEMENTS INDENTIFYING M/S DOSHI MANAGEMENT PVT. LTD. IS AVAILABLE ON RECORD, THOUGH IT IS INCL UDED IN THE REPORT OF DDIT (INV.), UNIT 1(3), KOLKATTA. THEREFORE, THE LA BEL OF PAPER/SHELL COMPANY CANNOT BE APPLIED TO M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M /S PRITHVI VINIMAY PRIVATE LIMITED AS AT THE RELEVANT TIME THE Y WERE NOT PART OF M/S DOSHI MANAGEMENT PVT. LTD. MOREOVER, IN DATA BA SE OF DIRECTORSHIPS FOR THESE COMPANIES; M/S BANSIDHAR AD VISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M /S PRITHVI VINIMAY PRIVATE LIMITED AS REPRODUCE ABOVE ALSO CLE ARLY SHOW NO DIRECT CONTROL OR INFLUENCE OF THE ALLEGED ENTRY O PERATOR ANAND SHARMA. SIMILARLY, THE STATEMENT OF ANKIT BAGRI IS NOT IMPLICATING ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 142 M/S BANSIDHAR ADVISORY PVT. LTD. IN ANY MANNER AS S HELL COMPANY. THERE ARE NO STATEMENTS FROM NAWAL KISHORE JALAN AN D PANKAJ AGARWAL ON RECORD IMPLICATING M/S VASUNDHARA ADVISO RY PRIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITED AS SHE LL COMPANIES. 7.3.1 IN VIEW OF ABOVE GROUND REALITY I AM TREATING M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY P RIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITED NOT AS SHELL COMPANY AS TREATED BY THE AO AS NOWHERE ADVERSE FACTS, DETA ILS AND CORROBORATORY EVIDENCES IN THE FORM OF STATEMENTS O F THE ALLEGED ENTRY OPERATOR ANAND SHARMA OR ANKIT BAGRI IMPLICAT ING THEM ARE FOUND IN THE REPORTS DATED 28.11.2017 AND 06.12.201 7 FROM INVESTIGATION DIRECTORATE, KOLKATA. I HAVE ALSO CON SIDERED THE ASSESSMENT ORDER, THE REMAND REPORT ALONG WITH ITS ALL ENCLOSURES, THE RELEVANT STATEMENTS REPRODUCED IN THE ASSESSMENT OR DER BY THE AO, THE SUBMISSIONS MADE BY THE APPELLANT ALONG WITH PA PER BOOK FOR THE YEAR UNDER CONSIDERATION AND ALL RELEVANT MATERIAL PLACED ON RECORD AND COULD NOT FIND A SINGLE PIECE OF EVIDENCE TO SA Y THAT ANY ONE OF ABOVE COULD BE SHELL COMPANY. 7.3.2 IT IS SEEN THAT DURING THIS YEAR, THE AO HAS MADE ADDITIONS IN THE HANDS OF ASSESSEE ON ACCOUNT OF PARTNERS CAPIT AL FROM FOUR COMPANIES, NAMELY, M/S BANSIDHAR ADVISORY PRIVATE L IMITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M/S PRITHVI VI NIMAY PRIVATE LIMITED AND M/S MACRO SOFT TECHNOLOGY PRIVATE LIMIT ED. THE AO ALLEGED THAT DESPITE PROVIDING HUGE CAPITAL CONTRIB UTION, NONE OF THE NEWLY INTRODUCED PARTNER IS INTERESTED IN THE BUSIN ESS ACTIVITIES OF THE ASSESSEE FIRM AS THERE IS NO WORKING PARTNER ON THEIR BEHALF AND NONE OF THEM HAVE NOMINATED ANY DIRECTOR OR OTHER O FFICER OF THE COMPANY TO ACT AS WORKING PARTNER IN THE ASSESSEE F IRM. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 143 7.3.3 HOWEVER, THE A/R OF THE APPELLANT WHILE REPRE SENTING THE CASE HAS ARGUED THE MATTER IN DETAIL AND HAS FILED DETAI LED SUBMISSIONS AS REPRODUCED ABOVE IN RESPONSE TO THE FINDINGS AND AL LEGATIONS OF THE AO. A SUMMARIZED FORM OF THE SUBMISSIONS AND ARGUME NTS PUT FORTH BY THE A/R IS GIVEN HEREUNDER: A) THE APPELLANT HAS DULY DISCHARGED THE INITIAL ONUS CAST UPON IT U/S 68 OF THE ACT BY FURNISHING THE NAME, ADDRESS, PAN, CO PY OF ITR, COPY OF BANK STATEMENT AND CONFIRMATION FROM THE PARTNERS, BALANCE SHEET ETC. THROUGH THE SAID DOCUMENTS, IDENTITY, CREDITWORTHIN ESS OF THE CORPORATE PARTNERS ALONG WITH THE GENUINENESS OF THE TRANSACT IONS CARRIED OUT WITH THEM WAS DULY ESTABLISHED. B) THE AO HAS NOT OBSERVED ANYTHING IN THE ASSESSMENT ORDER REGARDING ANY DEFECT OR FLAW IN THE DOCUMENTS SUBMITTED. C) THE CAPITAL CONTRIBUTIONS OF THE COMPANIES THAT HAV E BEEN TREATED AS UNEXPLAINED BY THE AO WERE INTRODUCED IN AY 2012-13 . IN THE ASSESSMENT PROCEEDINGS OF AY 2012-13 WHICH WAS COMPLETED U/S 1 43(3) OF THE ACT, SUCH CAPITAL CONTRIBUTIONS WERE TREATED AS GENUINE. THUS, ONCE IN THE COMPLETED ASSESSMENT PROCEEDINGS THE CAPITAL CONTRI BUTION OF THOSE COMPANIES HAS BEEN CONSIDERED AS GENUINE THAN THERE IS NO REASON TO TREAT THE CAPITAL RECEIVED FROM SUCH COMPANIES DURING THE YEAR AS NON GENUINE WITHOUT HAVING ANY MATERIAL AND ONLY ON PRESUMPTION , ASSUMPTION AND SURMISES. D) SUBMISSION MADE IN GROUND NO. 2 IN RESPECT OF UNSEC URED LOANS MAY ALSO BE TREATED AS A SUBMISSIONS FOR THE PURPOS E OF THIS GROUND OF APPEAL. E) ALL THE PARTNERS MUST BE WORKING PARTNERS IS NOT MA NDATORY UNDER ANY OF THE LAWS IN FORCE. F) ALL THE TRANSACTIONS WERE DONE THROUGH PROPER BANKI NG CHANNELS. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 144 G) THE NOTICES ISSUED TO THE FOUR COMPANIES U/S 131/13 3(6) OF THE ACT WERE DULY COMPLIED WITH ALONG WITH THE COPY OF THE RELEVANT DOCUMENTS. H) AFFIDAVITS OF THE DIRECTORS OF ALL COMPANIES WERE S UBMITTED WHEREIN THE DIRECTORS CONFIRMED THEIR INVESTMENT AS PARTNER S CAPITAL IN THE APPELLANT FIRM. I) NO RELIANCE CAN BE PLACED ON REJECTED BOOKS OF ACCO UNT FOR WORKING OUT PEAK CREDIT FOR THE PURPOSE OF MAKING ADDITIONS IN THE HANDS OF THE APPELLANT. J) THE REPORTS/INSPECTION REPORT AND STATEMENTS RELIED UPON BY THE AO WERE NOT PROVIDED TO THE APPELLANT DURING ASSESSMEN T PROCEEDINGS AND DIRECTLY REPRODUCED IN THE ASSESSMENT ORDER. 7.3.4 IN MY CONSIDERED VIEW, AS FAR AS THE PARTNER S CAPITAL FROM THE COMPANIES NAMELY, M/S BANSIDHAR ADVISORY PRIVATE LI MITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M/S PRITHVI VI NIMAY PRIVATE LIMITED AND M/S MACRO SOFT TECHNOLOGY PRIVATE LIMIT ED IS CONCERNED, IT IS EVIDENT FROM THE DOCUMENTS PLACED ON RECORD THAT NOTICE WAS ISSUED BY DDIT, KOLKATA U/S 131/133(6) T O THESE COMPANIES WHICH WAS DULY COMPLIED WITH AND RELEVANT DOCUMENTS WERE FILED. THERE IS NO FACT ON RECORD THAT THE NOT ICES 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 INVESTMEN T IN THE APPELLANT FIRM IN THE FORM OF PARTNERS CAPITAL. 7.3.5 THE ONLY ALLEGATION OF THE AO IS THAT THE DIR ECTORS OF THESE COMPANIES HAVE NOT BEEN NOMINATED AS WORKING PARTNE RS. IN MY VIEW, SUCH ALLEGATION IS WITHOUT ANY SUBSTANCE AS T HERE IS NO LEGAL OBLIGATION ON A PARTNERSHIP FIRM TO APPOINT ALL THE PARTNERS AS WORKING PARTNERS. THERE ARE VARIOUS PARTNERS IN FIR MS WHICH ONLY DO ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 145 INVESTMENT IN THE FIRM AND DO NOT PARTICIPATE IN TH E REGULAR BUSINESS ACTIVITIES OF THE FIRM. SUCH PARTNERS ARE CALLED SL EEPING PARTNERS AND THE SAID PARTNERS DO EXIST IN THE NORMAL BUSINESS P ARLANCE. 7.3.6 THE APPELLANT IN DISCHARGE OF ITS ONUS U/S 68 OF THE ACT HAS FILED CONFIRMATION OF ACCOUNTS AS WELL AS BANK STAT EMENT REFLECTING THE TRANSACTIONS WITH OTHER SUBSTANTIATING DOCUMENT S AS WELL AS THE RELEVANT ASSESSMENT ORDERS, WHICH ARE AVAILABLE AT PAGE NO. 645 TO 867 OF PB . FROM THESE DOCUMENTARY EVIDENCES PLACED ON RECORD , IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANS ACTIONS IS ESTABLISHED. THERE IS NO GAIN SAYING THAT THE ONUS SQUARELY LIES ON THE APPELLANT TO PROVE THE IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF THE CASH CREDITS. IN THE CASE OF ADDL. CIT V. BA HRI BROS. (P) LTD. [1985] 154 ITR 244 (PAT), THE HON'BLE PATNA HIGH CO URT HAS HELD ' IF THE LOANS ARE GIVEN BY AN ACCOUNT PAYING CHEQUE, IT AMOUNTS TO IDENTIFICATION OF THE PARTIES AND DISCHARGE OF BURD EN BY THE BORROWER .' IN VIEW OF THE ABOVE, IT IS CLEAR THAT APPELLANT DISCHARGED ITS BURDEN U/S 68 OF THE ACT. EVEN OTHERWISE, THERE IS NO ADVERSE FINDING OF ANY INVESTIGATION CONDUCTED BY THE DEPAR TMENT IN RELATION TO THE SAID COMPANIES. THEREFORE, IN THE ABSENCE 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 T HE PARTNERS CAPITAL FROM THE AFORESAID 04 COMPANIES TOTALING TO RS. 42 ,47,25,000/- IS UNJUSTIFIED; FIRSTLY, ON THE GROUND THAT NO INQUIRI ES WERE MADE TO REBUT THE EVIDENCES FILED BY THE APPELLANT AND SECO NDLY, ON THE GROUND THAT APPELLANT DULY DISCHARGED ITS BURDEN CA STED UPON U/S 68 OF THE ACT TO EXPLAIN NATURE AND SOURCE OF THE TRAN SACTIONS BY PROVING THE IDENTITY, CREDITWORTHINESS OF THE CORPO RATE PARTNERS AND GENUINENESS OF THE TRANSACTION. NOTABLY, THE TRANSA CTIONS WITH THE SAID FOUR COMPANIES ARE DULY VERIFIABLE FROM CONFIR MATION OF ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 146 ACCOUNTS FILED AT PAGE 650 TO 653, 708 TO711, 763 T O 766 & 830 TO 832 OF PB WITH SUPPORTING BANK STATEMENTS PLACED AT PAGE 654 TO 660, 712 TO716, 767 TO 778 & 833 TO 838 OF PB AND HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS ONLY AND THUS, APPELLANT HAS DULY PROVED THE IDENTITY, CREDITWORTHINESS AND GENU INENESS OF THE TRANSACTIONS. 7.3.7 FURTHERMORE, FROM THE PERUSAL OF DOCUMENTARY EVIDENCES SUBMITTED BY THE APPELLANT, IT IS SEEN THAT TRANSAC TIONS HAVE BEEN DONE THROUGH BANKING CHANNELS AND ON THE DATE OF MA KING OF LOANS, THERE IS BALANCE AVAILABLE IN THE ACCOUNTS OF THE B ORROWERS, WHICH PROVES THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. THERE IS NO CASE OF ANY CASH DEPOSITION IN THE ACCO UNT OF ANY OF THE INVESTOR COMPANIES AT THE TIME OF ISSUING CHEQUES/R TGS IN FAVOUR OF THE ASSESSEE. THEREFORE, IN VIEW OF THE SETTLED JUD ICIAL PRECEDENTS AS ALREADY RELIED UPON AND MENTIONED IN GROUND NO. 2 A BOVE, I AM OF THE CONSIDERED VIEW THAT APPELLANT DULY DISCHARGED ITS BURDEN CASTED UPON IT U/S 68 OF THE ACT. IT IS FURTHER SEEN THAT M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY P RIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITED AND M/ S MACRO SOFT TECHNOLOGY PRIVATE LIMITED HAVE DULY REPLIED TO THE NOTICES ISSUED BY DCIT/DDIT(INV.), KOLKATA IN RESPECT OF COMMISSIO N, THESE FACTS REMAIN UNCONTROVERTED BY THE AO. 7.3.8 FURTHER, IT IS EVIDENT FROM THE ASSESSMENT OR DER THAT OTHER FINDINGS AND ALLEGATIONS OF THE AO WITH RESPECT TO THE PARTNERS CAPITAL ARE SIMILAR TO THE FINDINGS MADE BY THE AO WITH RESPECT TO THE UNSECURED LOANS OF THE APPELLANT. AS THE SAID SIMIL AR FINDINGS AND ALLEGATIONS HAVE ALREADY BEEN DEALT WITH IN GROUND NO. 2 ABOVE, THESE ARE NOT AGAIN DEALT WITH FOR THE SAKE OF BREV ITY. HOWEVER, MY VIEW REGARDING THE FINDINGS AND ALLEGATIONS AS ALRE ADY DISCUSSED IN ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 147 GROUND NO. 2 ABOVE, SHALL MUTATIS MUTANDIS APPLY TO THE FINDINGS AND ALLEGATIONS OF THE AO WITH RESPECT TO PARTNERS CAPITAL MADE IN THIS GROUND OF APPEAL. 7.3.9 IN VIEW OF THE ABOVE DISCUSSION OF RELEVANT F ACTS AND FOLLOWING THE SEVERAL RATIOS ON THE SUBJECT FROM HO NBLE APEX COURT, HIGH COURTS INCLUDING JURISDICTIONAL HIGH COURTS, T RIBUNALS INCLUDING JURISDICTIONAL TRIBUNALS, THE IMPUGNED A DDITION OF RS. 42,47,25,000/- ON ACCOUNT OF PARTNERS CAPITAL FROM M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY P RIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITED AND M/ S MACRO SOFT TECHNOLOGY PRIVATE LIMITED IS NOT SUSTAINABLE AND H ENCE THE SAME STANDS DELETED. THUS THE FINDING OF THE LD. CIT (A) ARE BASED ON TH E FACTS AS WELL AS THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE WHERE AS THE AO HAS NOT BROUGHT ON RECORD ANY CONTRARY EVIDENCE EXCEPT THE ALLEGATION MADE IN THE REPORT OF THE INVESTIGATION WING KOLKAT A. THEREFORE, THE DOCUMENTARY EVIDENCES BROUGHT BY THE ASSESSEE CANNO T BE NEGATED MERELY ON THE BASIS OR ALLEGATION MADE IN THE REPOR T WHICH IS NOTHING BUT NARRATION OF THE STATEMENTS RECORDED OF CERTAIN PERSONS. THE REPORT OF THE DDIT INVESTIGATION CANNOT SUBSTITUTE THE DOC UMENTARY EVIDENCE. ACCORDINGLY, IN VIEW OF THE FACTS AND CIRCUMSTANCES , WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT (A) QUA THIS ISSUE. 20. SINCE WE HAVE DELETED THE ADDITION MADE BY THE AO, THEREFORE, GROUND NO. 6 RAISED BY THE ASSESSEE BECOMES INFRUCTUOUS AN D DOES NOT REQUIRE ANY ADJUDICATION. 21. FOR THE ASSESSMENT YEARS 2011-12 TO 14-15, EXCE PT THE QUANTUM OF UNSECURED LOANS AND CAPITAL INTRODUCED BY THE CORPO RATE PARTNERS, ALL FACTS REMAIN SAME ON THE MERITS OF THE ISSUES. EVEN THE PARTIES WHO ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 148 HAVE GIVEN THE UNSECURED LOANS ARE ALSO IDENTICAL. THE LD. CIT (A) HAS ALSO DECIDED THE ISSUES BY CONFIRMING THE PART ADDI TION AND DELETING THE PART ON THE BASIS OF BIFURCATION OF THESE PARTIES O N IDENTICAL LINES AS FOR THE ASSESSMENT YEAR 2010-11. THE LD. A/R AS WELL A S THE LD. CIT D/R HAVE FAIRLY AGREED THAT THE ISSUES ARE IDENTICAL AS THE BASIS AND GROUNDS OF ADDITION MADE BY THE AO AS WELL AS ORDERS PASSED BY THE LD. CIT (A) IN ALL THESE APPEALS ARE IDENTICAL AND SAME, EXCEPT THE MINOR VARIATION OF THE AMOUNTS. THEREFORE, NO SEPARATE ARGUMENT OR FINDING IS NEEDED FOR ADJUDICATION OF THE APPEALS FOR THE ASSESSMENT YEARS 2011-12 TO 14- 15. 22. WE HAVE CAREFULLY PERUSED THE IMPUGNED ORDERS O F THE AO AS WELL AS THE LD. CIT (A) AND ALSO GONE THROUGH THE DOCUMENTS FILED BY THE ASSESSEE IN SUPPORT OF THE CLAIM AND FOUND THAT THE ASSESSEE PRODUCED THE IDENTICAL DOCUMENTARY EVIDENCE AS IN THE CASE O F ASSESSMENT YEAR 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 I S APPLICABLE FOR ALL THE SUBSEQUENT YEARS SUBJECT TO CONDITION THAT A SU FFICIENT FUND WAS AVAILABLE WITH THE CREDITOR. WE NOTE THAT EXCEPT M /S. ROYAL CRYSTAL DEALERS PVT. LTD. AND M/S. DOSHI MANAGEMENT PVT. LT D., ADDITIONS FOR WHICH WERE CONFIRMED BY THE LD. CIT (A) FOR ALL THE SE YEARS ON THE REASONING THAT THESE COMPANIES ARE MANAGED AND CONT ROLLED BY SHRI ANAND SHARMA, THE ALLEGED ENTRY OPERATOR, THE OTHER CREDITORS ARE COMMON AS IN THE PRECEDING YEARS. THIS FINDING OF T HE LD. CIT (A) IS IDENTICAL TO THE FINDING IN RESPECT OF M/S. JALSAGA R COMMERCE PVT. LTD. FOR THE ASSESSMENT YEAR 2010-11. ACCORDINGLY, IN V IEW OF OUR FINDING ON THIS ISSUE, THE ADDITION SUSTAINED BY THE LD. CI T (A) IS DELETED. REST OF THE PARTIES FOR WHICH THE ADDITIONS WERE DELETED BY THE LD. CIT (A) ARE SAME FOR WHICH THE AO WAS NOT HAVING ANY MATERI AL OR DOCUMENT TO SUBSTANTIATE THE FINDING OF BOGUS ACCOMMODATION ENT RIES AS IN THE CASE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 149 OF OTHER PARTIES, NAMELY, M/S. BIRLA ARTS PVT. LTD. , M/S. TECH CONSULTANTS PVT. LTD., M/S. SANGAM DISTRIBUTORS PVT. LTD. AS R EGARDS THE CORPORATE PARTNERS WHO HAVE INTRODUCED THE CAPITAL, THEY REMA IN THE SAME FOR ALL THE YEARS AND, THEREFORE, THE ISSUE IS COMMON FOR A LL THESE YEARS EXCEPT THE FACT THAT FOR THE ASSESSMENT YEAR 2014-15 ONLY ONE PARTNER, NAMELY, M/S. BANSIDHAR ADVISORY PVT. LTD. INTRODUCE D SOME CAPITAL OF RS. 13.00 LACS AND FOR THE ASSESSMENT YEAR 2013-14 ONLY THREE PARTNERS INTRODUCED THE CAPITAL. THEREFORE, IN VIEW OF OUR F INDING ON ALL THESE ISSUES WHILE DECIDING THE CROSS APPEALS FOR THE ASS ESSMENT 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 S AME TERMS AND FINDING OF THE ASSESSMENT YEAR 2011-12 IS MUTATIS-M UTANDIS APPLICABLE FOR THESE ASSESSMENT YEARS. IN VIEW OF THE EARLIER DECISION OF THIS TRIBUNAL AS WELL AS DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT ON RECORD BY THE A.O., WE DO NOT FI ND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) IN DELETIN G THE ADDITION IN RESPECT OF THESE TWO COMPANIES. 37. AS REGARDS M/S FAIRLAND PLAZZA PVT. LTD., WE FIN D THAT THIS ISSUE IS IDENTICAL AS IN THE CASE OF M/S KAVERI HIRE PURCHAS E & DEPOSITS PVT. LTD., THE A.O. WAS NOT HAVING ANY OTHER MATERIAL OR EVEN T HE STATEMENTS OF THE ALLEGED ENTRY OPERATOR BUT THE ADDITION WAS MADE ONL Y ON THE BASIS OF THE REPORT OF THE DDIT(INV.), KOLKATA WHICH IS NOTHING BUT THE NARRATION OF THE STATEMENTS OF THE ALLEGED ENTRY OPERATORS. HENCE IN ABSENCE OF THE VERY ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 150 BASIS OF THE REPORT OF THE DDIT (INV.), KOLKATA, THE ADDITION MADE BY THE A.O. IS NOT SUSTAINABLE WHEN THE ASSESSEE HAS PRODUC ED ALL THE RELEVANT DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM. FURTH ER THE A.O. HAS NOT POINTED OUT ANY DISCREPANCY IN THE DOCUMENTARY EVID ENCE PRODUCED BY THE ASSESSEE. RATHER THE FINANCIAL STATEMENTS OF THE SH ARE APPLICANT HAS BEEN ACCEPTED IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT. ACCORDINGLY, IN VIEW OF OUR FINDING IN THE CASE OF M /S KAVERI HIRE PURCHASE & DEPOSITS PVT. LTD. FOR THE A.Y. 2012-13, WE UPHOL D THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE. 38. GROUND NO. 7 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE MADE BY THE A.O. U/S 14A OF THE ACT OF RS. 8005/- WHICH WAS D ELETED BY THE LD. CIT(A). 39. THE ASSESSEE IS HAVING INVESTMENT IN SHARES AS O N 31/3/2014 OF RS. 9,60,500/- AS AGAINST THE INVESTMENT OF RS. 500/- A S ON 01/4/2013. THE A.O. HAS MADE DISALLOWANCE U/S 14A OF THE ACT READ WI TH RULE 8D OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) BEING 1% OF THE AVERAGE INVESTMENT WHICH COMES TO RS. 8005/-. ON APPEAL, TH E LD. CIT(A) DELETED THE ADDITION BY CONSIDERING THE FACT THAT WHEN THE A SSESSEE HAS NOT EARNED ANY EXEMPT INCOME DURING THE YEAR UNDER CONS IDERATION. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE BY HOLDING AS UNDER : ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 151 9.3 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. 9.3.1 IN MY CONSIDERED VIEW, THE AO HAS LEGALLY ERR ED IN DIRECTLY APPLYING THE PROVISION OF SECTION 14A OF THE ACT, WITHOUT RECORD ING ANY SATISFACTION AS TO THE CORRECTNESS OF THE CLAIM MADE BY THE APPELLANT. IN THE ASSESSMENT ORDER, THERE IS NO SATISFACTION RECORDED BY THE AO AS REQUIRED BY S ECTION 14A(1) OF THE ACT BEFORE PROCEEDING FURTHER TO MAKE ANY DISALLOWANCE U/S 14A OF THE ACT. FURTHER, IT IS SEEN THAT AO HAS MECHANICALLY APPLIED THE RUL E 8D AS AMENDED W.E.F. 02.06.2016, WHICH WAS NOT EVEN APPLICABLE TO RELEVA NT ASSESSMENT YEAR. IN MY CONSIDERED VIEW, THE LAW CANNOT BE APPLIED MECHANIC ALLY AND THAT TOO RETROSPECTIVELY. IT IS SEEN THAT AO HAS NOT ESTABLI SHED ANY NEXUS OF INVESTMENT WITH BORROWED FUNDS, RATHER AVAILABILITY OF SUFFICI ENT INTEREST FREE FUNDS JUSTIFIES THE CASE OF THE APPELLANT THAT DISALLOWANCE U/S 14A OF THE ACT IS UNWARRANTED. FURTHER, IT IS SEEN THAT AO HAS NEITHER POINTED OUT NOR GIVEN ANY SPECIFIC FINDINGS IN THE ASSESSMENT ORDER THAT ANY EXEMPT INCOME WAS EARNED DURING THE RELEVANT ASSESSMENT YEAR. THEREFORE, IN VIEW OF THE NON-FULF ILMENT OF SUCH STATUTORY REQUIREMENT AS LAID DOWN IN VARIOUS JUDICIAL PRECED ENTS AND CIRCULARS AS RELIED UPON BY THE A/R IN HIS SUBMISSION, IN MY CONSIDERED VIEW, THE DISALLOWANCE U/S 14A OF THE ACT OF RS. 8,005/- IS UNWARRANTED. ACCOR DINGLY, THE SAME IS DELETED AND THESE GROUNDS OF APPEALS ARE ALLOWED.' THE FACT RECORDED BY THE LD. CIT(A) THAT THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION H AS NOT BEEN DISPUTED BY THE DEPARTMENT AND THEREFORE, IN VIEW OF THE SET TLED PROPOSITION OF LAW ON THIS POINT AND PARTICULARLY THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF CHEMVEST LTD. VS CIT 378 ITR 33, WE DO NO T FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) QUA THIS I SSUE. HENCE, WE UPHOLD THE SAME. 40. FOR THE A.Y. 2015-16, THE ASSESSEE HAS RAISED F OLLOWING 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 ORDER AS BAD IN LAW AND ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 152 VOID AB INITIO . THE FINDINGS OF ID CIT(A) IN THIS REGARD ARE PERVE RSE AND ERRONEOUS. IT IS CONTENDED THAT THE ID. AO PASSED T HE ASSESSMENT ORDER AGAINST THE DOCTRINE OF AUDI ALTERM PARTEM, VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPP ORTUNITY OF CROSS EXAMINATION OF THE ALLEGED ACCOMMODATION ENTRY PROV IDERS, THEREFORE THE ASSESSMENT ORDER OUGHT TO HELD AS BAD IN LAW AND DESERVES TO BE ANNULLED. 2. THAT THE ORDER OF THE ID CIT (A), CONFIRMING THE ADDITION MADE BY THE AO IS ARBITRARY, WHIMSICAL, CAPRICIOUS, PERVERSE, B ASED ON NO EVIDENCE OR IRRELEVANT MATERIAL OR IRRELEVANT EVIDENCE AND A GAINST THE LAW AND FACTS OF THE CASE. THE ADDITION CONFIRMED BY ID. CI T (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 : - A. SOLELY RELYING ON THE STATEMENTS OF SOME ALLEGED 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 EV IDENCE TO REBUT THE ADVERSE FACTUAL FINDING MADE BY THE AO IN THE A SSESSMENT ORDER THOUGH DETAILED PAPER BOOK FOR RELEVANT AY AN D COMMON PAPER BOOKS HAVE BEEN SUBMITTED, AND D. HOLDING THAT INCRIMINATING MATERIAL HAD BEEN FOU ND DURING THE COURSE OF SEARCH OF ACCOMMODATION ENTRY PROVIDER. F URTHER 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 LAWTHE ID. CIT(A) ERRED IN CONFIRMATION THE ADDITION OF RS. 5, 00,00,000/- MADE BY ID. AO U/S 68 OF INCOME TAX ACT, 1961 ON ACCOUNT OF SHARE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 153 APPLICATION MONEY RECEIPT ALONG WITH PREMIUM FROM F OLLOWING PARTY AND ERRONEOUSLY HELD THAT THE IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE UNDER MENTIONED COMPANY IS DOUBT FUL: - NAME OF THE COMPANY FROM WHOM LOAN RECEIVED AMOUNT NAME OF ALLEGED ENTRY OPERATOR WHOSE STATEMENT WERE RELIED DOSHI MANAGEMENT PVT. LTD. 5,00,00,000 SHRI ANAND SHARMA IN HIS STATEMENT (COPY AS PROVIDED TO APPLICANT) NEVER ADMITTED TO BE MANAGING THIS COMPANY. 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 CREDIT 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 BEFORE THE H EARING OF APPEAL. 41. GROUND NO. 1 OF THE APPEAL IS REGARDING THE VIO LATION OF PRINCIPLES OF NATURAL JUSTICE AS THE ASSESSEE WAS NOT GRANTED OPPO RTUNITY OF CROSS EXAMINATION. THIS ISSUE IS COMMON AS RAISED IN GROU ND NO. 2 OF THE ASSESSEES C.O. FOR THE A.Y. 2012-13. ACCORDINGLY, IN VIEW OF OUR FINDING ON THIS ISSUE, THIS GROUND OF REVENUES APPEAL IS DECI DED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 42. GROUNDS NO. 2 TO 4 OF THE APPEAL ARE REGARDING THE ADDITION MADE BY THE A.O. IN RESPECT OF SHARE CAPITAL RECEIVED FR OM M/S DOSHI MANAGEMENT PVT. LTD.. THE A.O. HAS RELIED UPON THE S TATEMENT OF SHRI ANAND SHARMA WHILE MAKING THE ADDITION WHICH WAS CONFI RMED BY THE LD. CIT(A). ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 154 43. BEFORE US, THE LD AR OF THE ASSESSEE HAS ARGUED AT LENGTH AND REFERRED TO THE VARIOUS DOCUMENTARY EVIDENCES PRODU CED IN SUPPORT OF THE CLAIM. HE HAS RELIED UPON THE DECISION OF THIS TRIBU NAL DATED 31/12/2018 PASSED IN THE CASE OF M/S KOTA DALL MILL VS. DCIT (S UPRA) AND SUBMITTED THAT THE TRIBUNAL HAS CONSIDERED THE ISSUE IN RESPEC T OF THIS COMPANY FOR THE A.Y. 2011-12 TO 2016-17. 44. ON THE OTHER HAND, THE LD CIT-DR HAS REITERATED ITS CONTENTION AS RAISED IN RESPECT OF COMPANY M/S JALSAGAR COMMERCE PVT. LTD.. 45. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THIS TRIBUNAL IN THE CASE OF M/S KOTA DALL MILL VS. DCIT (SUPRA) 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 DOCUME NTS FILED BY THE ASSESSEE IN SUPPORT OF THE CLAIM AND FOUND THAT THE ASSESSEE PRODUCED THE IDENTICAL DOCUMENTARY EVIDENCE AS IN T HE CASE OF ASSESSMENT YEAR 2010-11. EVEN THE PARTIES ARE SAME FOR THESE YEARS AND, THEREFORE, ONCE THE IDENTITY, CREDITWORT HINESS AND GENUINENESS OF THE TRANSACTION IN RESPECT OF ONE PA RTY IS DECIDED, THEN THE SAME IS APPLICABLE FOR ALL THE SUBSEQUENT YEARS SUBJECT TO CONDITION THAT A SUFFICIENT FUND WAS AVAILABLE WITH THE CREDITOR. WE NOTE THAT EXCEPT M/S. ROYAL CRYSTAL DEALERS PVT. LT D. AND M/S. DOSHI MANAGEMENT PVT. LTD., ADDITIONS FOR WHICH WER E CONFIRMED BY THE LD. CIT (A) FOR ALL THESE YEARS ON THE REASONIN G THAT THESE COMPANIES ARE MANAGED AND CONTROLLED BY SHRI ANAND SHARMA, THE ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 155 ALLEGED ENTRY OPERATOR, THE OTHER CREDITORS ARE COM MON AS IN THE PRECEDING YEARS. THIS FINDING OF THE LD. CIT (A) IS IDENTICAL TO THE FINDING IN RESPECT OF M/S. JALSAGAR COMMERCE PVT. L TD. FOR THE ASSESSMENT YEAR 2010-11. ACCORDINGLY, IN VIEW OF O UR FINDING ON THIS ISSUE, THE ADDITION SUSTAINED BY THE LD. CIT ( A) IS DELETED. REST OF THE PARTIES FOR WHICH THE ADDITIONS WERE DELETED BY THE LD. CIT (A) ARE SAME FOR WHICH THE AO WAS NOT HAVING ANY MA TERIAL OR DOCUMENT TO SUBSTANTIATE THE FINDING OF BOGUS ACCOM MODATION ENTRIES AS IN THE CASE OF OTHER PARTIES, 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 HAVE IN TRODUCED 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 ADVISORY PVT. LTD. INTRODUCED SOME CAPITAL OF RS. 1 3.00 LACS AND FOR THE ASSESSMENT YEAR 2013-14 ONLY THREE PARTNERS INT RODUCED THE CAPITAL. THEREFORE, IN VIEW OF OUR FINDING ON ALL T HESE 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 S AME TERMS AND FINDING OF THE ASSESSMENT YEAR 2011-12 IS MUTAT IS-MUTANDIS APPLICABLE FOR THESE ASSESSMENT YEARS. WE FIND THAT THE ASSESSEE HAS PRODUCED ALL THE RELE VANT DOCUMENTS AS WELL AS OTHER DETAILS TO ESTABLISH THE IDENTITY, CREDITWO RTHINESS OF THE SHARE APPLICANT AS WELL AS THE GENUINENESS OF THE TRANSACT ION. THE SAID DOCUMENTARY EVIDENCE REMAINED UNCONTROVERTED BUT TH E A.O. HAS RELIED UPON ONLY STATEMENT OF ONE SHRI ANAND SHARMA WHICH C ANNOT BE A BASIS OF ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 156 THE ASSESSMENT WHEN THE ASSESSEE WAS NOT GRANTED AN O PPORTUNITY TO CROSS EXAMINE. HENCE, IN VIEW OF THE ORDER OF THIS TR IBUNAL IN THE CASE OF KOTA DALL MILL (SUPRA), WE DELETE THE ADDITION MADE BY THE A.O. ON THIS ACCOUNT. 46. GROUND NO. 5 OF THE ASSESSEES APPEAL IS REGARD ING DENIAL OF BENEFIT OF TELESCOPING, RECYCLING AND ROTATION OF FUNDS BY REJECTING THE PEAK CREDIT THEORY. 47. 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. 48. IN THE CROSS APPEAL OF THE REVENUE FOR THE A.Y. 2015-16, FOLLOWING GROUNDS HAVE BEEN TAKEN: 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 . 25,52,00,000/- 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. 2. 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 BY OBSERVING THAT THE ALLEGED LENDER M/S BIRLA ARTS PV T. LTD. IS NOT SHELL COMPANY WITHOUT CONSIDERING THE FINANCIAL STATEMENT S OF THIS COMPANY. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 157 3. 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. MERELY FOR THE REASON THAT EVIDENCES IN THE FORM OF STATEMENT ON O ATH OF THE RELEVANT ENTRY OPERATORS WERE NOT AVAILABLE ON RECO RD. 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. DESPITE THE FACT THAT THE DIRECTOR OR PRINCIPAL OFFICER OF THIS COMPANY WAS NEVER PRODUCED BEFORE THE ASSESSING OFFICER FOR EXAMINATI ON DESPITE NUMBER OF OPPORTUNITIES PROVIDED BY THE AO FOR PROD UCING AND ALSO IGNORING THE FACT THAT THE ASSESSEE NEITHER EXPRESS ED ITS INABILITY IN PRODUCING THE LENDERS NOR PRODUCED THEM EITHER. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE 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 MERELY BY OBSERVING THAT THE ASSESSEE HAS COOPERATED IN ASSES SMENT BY SHOWING HIS WILLINGNESS TO PRODUCE THE DIRECTOR OF LENDER COMPANY AND SOME DIRECTOR/OFFICER WAS ALSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT EVEN THE DIRECTOR WHICH WAS PRODUCED BEFORE THE AO FAILED TO SUBSTANTIATE THE GENUINENESS OF THE ALLEG ED TRANSACTIONS. 6. 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 BY OBSERVING THAT THE APPELLANT CANNOT BE FASTENED UPO N THE BURDEN TO PRODUCE THE LENDERS BEFORE THE AO AND IN NOT CONSID ERING THE DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA C ASTLE (P) LTD. VS CIT (2015) 56 TAXMANN.COM 18(SC) WHEN THERE WERE GE NUINE CONCERNS OF THE GENUINENESS OF THE TRANSACTIONS. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 9,605/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 14A OF THE IT ACT. THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT T O AMEND MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 158 49. GROUNDS NO. 1 TO 6 OF THE APPEAL ARE REGARDING THE ADDITION MADE BY THE A.O. IN RESPECT OF UNSECURED LOAN TAKEN FROM M/S BIRLA ARTS PVT. LTD. WHICH WAS DELETED BY THE LD. CIT(A). 50. WE HAVE HEARD THE LD CIT-DR AS WELL AS THE LD AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THIS ISSUE IN COMMON FOR THE A.Y. 2013-14 TO 2014-15. WE HAVE ALREADY DECIDE D THIS ISSUE IN REVENUES APPEAL FOR THE A.Y. 2013-14 AND 2014-15. ACCORDINGLY, IN VIEW OF OUR FINDING ON THIS ISSUE FOR THE A.Y. 2013-14 AND 2014-15, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF TH E LD. CIT(A) QUA THIS ISSUE. 51. GROUND NO. 7 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE OF RS. 9,605/- MADE BY THE A.O. U/S 14A OF THE ACT WHICH WAS DELETED BY THE LD. CIT(A). THIS ISSUE IS COMMON AS IN THE A.Y. 2014-15. 52. 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(A) HAS DELETED THE ADDITION BY CONSIDERING THE FACT THAT THE ASSES SEE HAS NOT EARNED ANY EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY, IN VIEW OF OUR FINDING FOR THE A.Y. 2014-15, THIS ISSUE IS DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE AND THE ORDER OF THE LD. CIT(A) IS UPHELD. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 159 53. IN THE APPEAL FOR THE A.Y. 2016-17, THE REVENUE HAS TAKEN FOLLOWING GROUNDS: 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 . 9,58,50,000/- 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 LIMBO ENGINEERING 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 OF UN SECURED LOANS BY OBSERVING THAT THE ALLEGED LENDER M/S LIMBO ENGINEE RING PVT. LTD. IS NOT SHELL COMPANY WITHOUT CONSIDERING THE FINANCIAL 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 OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S LIMBO ENGINEERING PVT. 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 OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S LIMBO ENGINEERING PVT. LTD. DESPITE THE FACT THAT THE DIRECTORS OR PRINCIPAL OF FICER OF THIS COMPANY WAS NEVER PRODUCED BEFORE THE ASSESSING OFF ICER FOR EXAMINATION DESPITE NUMBER OF OPPORTUNITIES PROVIDE D BY THE AO FOR PRODUCING AND ALSO IGNORING THE FACT THAT THE ASSES SEE 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 OF UN SECURED LOANS CLAIMED TO HAVE OBTAINED FROM M/S LIMBO ENGINEERING PVT. LTD. MERELY BY OBSERVING THAT THE ASSESSEE HAS COOPERATE D IN ASSESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE THE DIRECTOR OF LENDER COMPANY AND SOME DIRECTOR/OFFICER WAS ALSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT EVEN THE DIRECTOR WHICH WA S PRODUCED ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 160 BEFORE THE AO FAILED TO SUBSTANTIATE THE GENUINENES S 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 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 CONSID ERING THE DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA C ASTLE (P) LTD. VS CIT (2015) 56 TAXMANN.COM 18(SC) WHEN THERE WERE GE NUINE 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 DISALLOWANCE O F RS. 9,605/- MADE BY THE A.O. BY INVOKING THE PROVISIONS OF SECTION 1 4A OF THE IT ACT. 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. 54. GROUNDS NO. 1 TO 6 OF THE APPEAL ARE REGARDING THE ADDITION MADE BY THE A.O. IN RESPECT OF UNSECURED LOAN TAKEN FRO M M/S LIMBO ENGINEERING PVT. LTD. WHICH WAS DELETED BY THE LD. CI T(A). 55. WE HAVE HEARD THE LD CIT-DR AS WELL AS THE LD AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE A.O. HAS MADE THE ADDITION ON ACCOUNT OF UNSECURED LOAN TAKEN FROM M/ S LIMBO ENGINEERING PVT. LTD. ON THE BASIS OF REPORT OF THE DDIT(INV.), KOLKATA. THE LD. CIT(A) HAS DELETED THE ADDITION BY CONSIDERING THE FACT TH AT EXCEPT THE REPORT OF DDIT(INV.), KOLKATA, THE A.O. WAS NOT HAVING ANY MATE RIAL OR EVEN THE STATEMENT OF SO CALLED ENTRY OPERATOR. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 161 56. BEFORE US, THE LD CIT-DR HAS SUBMITTED THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS AS THE PRINCIPAL OFFICER/DIRE CTOR OF THE LOAN CREDITOR WAS NOT PRODUCED BEFORE THE A.O. FOR EXAMINATION. HE HAS REITERATED ITS CONTENTION AS RAISED IN RESPECT OF M/S BIRLA ARTS P VT. LTD.. 57. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HA S REITERATED ITS CONTENTION AS RAISED IN RESPECT OF OTHER ADDITION M ADE BY THE A.O. WHICH WAS DELETED BY THE LD. CIT(A) AND SUBMITTED THAT ONCE THE ASSESSEE HAS FILED ALL THE RELEVANT DOCUMENTARY EVIDENCE THEN IN ABSENCE OF ANY CONTRARY MATERIAL, THE ADDITION MADE BY THE A.O. IS NOT SUSTAINABLE. 58. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AS WELL AS RELEVANT MATERIAL ON RECORD. WE FIND THAT THE LD. CIT(A) HAS DELETED THIS ADDITION BY GIVING THE REASONING AS IN THE CASE OF M/S KAVERI H IRE PURCHASE & DEPOSITS PVT. LTD. AS WELL AS OTHER COMPANIES LIKE M/S BIRLA ARTS PVT. LTD., M/S MAGNET CAPITAL MARKET LTD., M/S BAIJNATH COMMOSALES PVT. LTD. ETC.. WE HAVE ALREADY CONSIDERED THE ISSUE OF ADDITION DELET ED BY THE LD. CIT(A) IN ABSENCE OF ANY MATERIAL OR EVEN STATEMENT OF ALLEGE D ENTRY OPERATOR WHILE CONSIDERING THE ISSUE IN THE CASE OF M/S KAVERI HIR E PURCHASE & DEPOSITS PVT. LTD. FOR THE A.Y. 2012-13. THE ASSESSEE HAS PR ODUCED THE DOCUMENTARY EVIDENCES AS UNDER: ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 162 M/S LIMBO ENGINEERING PVT. LTD. S. NO. PARTICULARS A.Y 2016 - 17 PB VOL-II PAGE NO. 1 COPY OF ACK. OF ITR OF AY 2016 - 17 ALONG WITH COMPUTATION SHEET. 459 - 460 2 COPY OF AUDITED BALANCE SHEET OF AY 2016-17 ALONG WITH ANNEXURES. 461 - 480 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 481 - 485 4 COPY OF LEDGER STATEMENT DEPICTING THE TRANSACTION WITH ASSESSEE COMPANY. 486 5 COPY OF BALANCE SHEET OF COMPANY FOR THE AY 2014-15. 487 6 COPY OF ROC MASTER DATA. 488 - 489 7 COPY OF PAN CARD. 490 8 COPY OF NOTICE NO. 1603 DATED 21.09.2017 ISSUED BY DCIT/CC, KOTA U/S 133(6) OF INCOME TAX ACT 1961 TO UNSECURED CREDITORS. 491 9 COPY OF REPLY IN RESPONSE TO NOTICE NO. 1603 DATED 21.09.2017 ISSUED BY DCIT/CC, KOTA U/S 133(6) OF INCOME TAX ACT 1961 492 10 COPY OF ITR ACKNOWLEDGEMENT FOR THE AY 2015-16 ALONG WITH BALANCE SHEET AND BANK STATEMENT. 493 - 495 THE STATUS OF THE COMPANY AS PER THE ROC RECORD IS A CTIVE. FURTHER THIS COMPANY WAS ALSO SUBJECTED TO ASSESSMENT U/S 143(3) OF THE ACT FOR THE A.Y. 2011-12, THEREFORE, THIS COMPANY CANNOT BE CON SIDERED AS SHELL COMPANY. THE AVAILABILITY OF FUND AS ON 31/3/2015 WAS RS. 79.37 CRORES BEING SHARE CAPITAL AND RESERVE AND SURPLUS AS AGAI NST THE AMOUNT GIVEN TO THE ASSESSEE OF RS. 9.58 CRORES. THEREFORE, CONS IDERING ALL THESE DOCUMENTARY EVIDENCE AS WELL AS THE FINANCIAL STATEM ENTS AND REPLY GIVEN ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 163 TO THE NOTICE ISSUED U/S 133(6) OF THE ACT, WE DO NO T FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) I N DELETING THE ADDITION MADE BY THE A.O. 59. GROUND NO. 7 OF THE APPEAL IS REGARDING THE DIS ALLOWANCE MADE U/S 14A OF THE ACT WHICH WAS DELETED BY THE LD. CIT(A). THI S ISSUE IS COMMON FOR THE A.Y. 2013-14 AND 2015-16, THE DEPARTMENT HA S NOT DISPUTED THE FACT THAT THE ASSESSEE HAS NOT EARNED ANY DIVIDEND INCOME, THEREFORE, IN VIEW OF OUR FINDING ON THIS ISSUE IN THE EARLIER ASS ESSMENT YEARS, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) QUA THIS ISSUE. 60. IN THE CROSS OBJECTION OF THE ASSESSEE FOR THE A.Y. 2016-17, FOLLOWING GROUNDS HAVE BEEN TAKEN: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN NOT DECLARING THE ASSESSMENT ORDER AS BAD IN LAW AND VOID AB 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. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING OF APPEAL. ITA NOS. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018 DCIT VS. M/S ORIENTAL POWER CABLES LTD. 164 61. THE ISSUE INVOLVED IN THE C.O. OF THE ASSESSEE I S COMMON AS IN THE C.O. OF OTHER ASSESSMENT YEARS, THEREFORE, IN VIEW OF OUR FINDING ON THIS ISSUE, IT SANDS ALLOWED IN FAVOUR OF THE ASSESSEE AN D AGAINST THE REVENUE. 62. 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 12 TH FEBRUARY 2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12 TH FEBRUARY, 2019. *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE D.C.I.T., CENTRAL CIRCLE, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- M/S ORIENTAL POWER CABLES LTD., 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. 1096 TO 1099, 1211, 1027 & 1028/JP/2018 & CO 36, 37 & 50/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR
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