DINESH SHAH (HUF) , MUMBAI V. DCIT CENTRAL CIR-3(4) , MUMBAI

ITA 1149/MUM/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6790 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 13-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Search and seizure; Accommodation entries; Onus to prove; Retraction; Bogus loan
• Section: 131; 271(1)(c); 133(6); 113; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI AMIT SHUKLA (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 1153/MUM/2020 Assessment Year: 2008-09 Dinesh Shah, Flat No. 434, Shabri Shikhar, R.C. Marg, Chembur (W), Mumbai-400071. Vs. Dy. CIT, Central Circle-3(4), Mumbai. PAN No. AAEPS 1245 F Appellant Respondent ITA No. 1150/MUM/2020 Assessment Year: 2010-11 & ITA No. 1149/MUM/2020 Assessment Year: 2011-12 & ITA No. 1148/MUM/2020 Assessment Year: 2012-13 & ITA No. 1147/MUM/2020 Assessment Year: 2013-14 Dinesh Shah (HUF), Flat No. 434, Shabri Shikhar, R.C. Marg, Chembur (W), Mumbai-400071. Vs. Dy. CIT, Central Circle-3(4), Mumbai. PAN No. AADHS 0544 N Appellant Respondent Assessee by : None Revenue by : Mr. T. Shankar, CIT-DR Date of Hearing : 05/09/2022 Date of pronouncement : 15/09/2022 PER BENCH These five appeals by the assessee(s) are directed against separate orders passed by the Ld. Commissioner of Income (Appeals)-51, Mumbai [in short ‘the Ld. CIT(A)’] for relevant assessment years. In these appeals, identical grounds have been raised permeating from and therefore same were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts. 2. At the outset, we may like to mention that No. 1147/M/2020 to 1150/M/2020 been observed. On perusal of the record, we find that an affidavit has been filed by the Karta of the assessee (HUF), wherein he has availability for signing ITA Nos. 1147 to 1150 & 1153/M/2020 ORDER These five appeals by the assessee(s) are directed against separate orders passed by the Ld. Commissioner of Income 51, Mumbai [in short ‘the Ld. CIT(A)’] for relevant assessment years. In these appeals, identical grounds have been ing from the same set on facts and circumstances and therefore same were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of At the outset, we may like to mention that in app to 1150/M/2020 delay of two days in filing On perusal of the record, we find that an affidavit has been filed by the Karta of the assessee, Shri Dinesh V. Shah has submitted that delay was due to his non availability for signing the appeals due to being out of station. In Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 2 These five appeals by the assessee(s) are directed against separate orders passed by the Ld. Commissioner of Income 51, Mumbai [in short ‘the Ld. CIT(A)’] for relevant assessment years. In these appeals, identical grounds have been the same set on facts and circumstances, and therefore same were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of in appeals from ITA delay of two days in filing has On perusal of the record, we find that an affidavit Shri Dinesh V. Shah submitted that delay was due to his non- the appeals due to being out of station. In view of submission the assessee, we are satisfied that assessee was presented in filing the appeal due to bonafide reasons, and accordingly, we condone the delay of two days in filing those appeal and admit those appeals for adjudication. 2.1 Despite notifying none attended on behalf of therefore above appeals were heard hearing the argument of Ld. Depar 3. First, we take up the appeals ha 1150/M/2020 in the case of Sh. Dinesh Shah (HUF). raised in those appeals brevity, grounds in the case of Shri Dines assessment year 2010 reproduced as under: “1) The honourable CIT(A) has erred in upholding the addition of Rs.92,00,00/- u/s 68 of the Income Tax Act, respect of the unsecured loan alleged as not genuine ITA Nos. 1147 to 1150 & 1153/M/2020 view of submission the assessee, we are satisfied that assessee was presented in filing the appeal due to bonafide reasons, and done the delay of two days in filing those appeal and admit those appeals for adjudication. espite notifying none attended on behalf of above appeals were heard ex-parte qua the assessee hearing the argument of Ld. Departmental Representative (DR). First, we take up the appeals having ITA No. 1147 to in the case of Sh. Dinesh Shah (HUF). se appeals are identical except change of amount. For brevity, grounds in the case of Shri Dinesh Shah assessment year 2010-11 in ITA No. 1150/M/2020 are only reproduced as under: 1) The honourable CIT(A) has erred in upholding the addition of u/s 68 of the Income Tax Act, respect of the unsecured loan alleged as not genuine ignoring the fact that: Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 3 view of submission the assessee, we are satisfied that assessee was presented in filing the appeal due to bonafide reasons, and done the delay of two days in filing those appeal espite notifying none attended on behalf of assessee and qua the assessee, after tmental Representative (DR). ving ITA No. 1147 to in the case of Sh. Dinesh Shah (HUF). The grounds identical except change of amount. For h Shah (HUF) for 11 in ITA No. 1150/M/2020 are only 1) The honourable CIT(A) has erred in upholding the addition of u/s 68 of the Income Tax Act, respect of the unsecured a) The appellant discharged its onus to prove the genuineness of the parties and transactions by filing confirmations of the parties wherein the name address and Permanent account number have been provided and also bank statements evidencing the alleged transactions; b) The Karta of the appellant filed a written statement during the post-search assessment proceedings retracting the forceful declaration taken from him regarding the genuineness of the unsecured loans transactions aggregating appearing in the books of the appellant; c) The appellant had sought cross examination of the said parties alleged to have provided accommodation unsecured loan entries which was not d) There were corroborate to the allegation that the unsecured loans appearing in the books of the were unexplained credits. 2) The honourable CIT (A) has erred in upho arbitrarily of have been paid in respect of the unsecured loan ignoring the fact that: a. The assessing officer is not justified in making an addition arbitrarily of have been paid in respect of the unsecured loans alleged to be not genuine loans. ITA Nos. 1147 to 1150 & 1153/M/2020 a) The appellant discharged its onus to prove the genuineness of the parties and transactions by filing confirmations of the parties wherein the name address and Permanent account number have been provided and also bank statements of the lender parties evidencing the alleged transactions; b) The Karta of the appellant filed a written statement during the search assessment proceedings retracting the forceful declaration taken from him regarding the genuineness of the oans transactions aggregating to Rs.92,00,000/ appearing in the books of the appellant; c) The appellant had sought cross examination of the said parties alleged to have provided accommodation unsecured loan entries which was not granted; d) There were no incriminating evidence, documents or material to to the allegation that the unsecured loans appearing in the books of the appellant were not genuine loan transactions and were unexplained credits. 2) The honourable CIT (A) has erred in upholding the addition Rs.2,76,000/-on account of commission presumed to have been paid in respect of the unsecured loan ignoring the fact a. The assessing officer is not justified in making an addition Rs.2,76,000/-on account of commission presumed to have been paid in respect of the unsecured loans alleged to be not genuine loans.” Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 4 a) The appellant discharged its onus to prove the genuineness of the parties and transactions by filing confirmations of the parties wherein the name address and Permanent account number have of the lender parties b) The Karta of the appellant filed a written statement during the search assessment proceedings retracting the forceful declaration taken from him regarding the genuineness of the to Rs.92,00,000/- c) The appellant had sought cross examination of the said parties alleged to have provided accommodation unsecured loan entries no incriminating evidence, documents or material to to the allegation that the unsecured loans appearing in appellant were not genuine loan transactions and lding the addition on account of commission presumed to have been paid in respect of the unsecured loan ignoring the fact a. The assessing officer is not justified in making an addition unt of commission presumed to have been paid in respect of the unsecured loans alleged to be not 4. Briefly stated, facts of the case are that a search action u/s 142 of the Income-tax Act, 1961 (in short ‘the Act’) was conducted in the case of Anku Shubham Group on 11.12.2013. In view of certain incriminating materials found in relation to assessee u/s 153C of the Act were initiated in the case of the assessee. The assessments in the case of M/s Dinesh V. Shah (HUF) for assessm year 2010-11 to 2013 (Individual) were completed by the Assessing Officer on 31.10.2016 In the assessments completed, the Assessing Officer has noted that during the course of search statement of Shri Dinesh V. capacity of Karta of M/s Dinesh V. Shah (HUF) was recored on 10.12.2013 that wherein he accepted the undisclosed income. Accordingly, he as undisclosed income and agreed to by him. The relevant table of year declared by the assessee is reproduced as under: ITA Nos. 1147 to 1150 & 1153/M/2020 Briefly stated, facts of the case are that a search action u/s 142 tax Act, 1961 (in short ‘the Act’) was conducted in the e of Anku Shubham Group on 11.12.2013. In view of certain incriminating materials found in relation to assessee 3C of the Act were initiated in the case of the assessee. The assessments in the case of M/s Dinesh V. Shah (HUF) for assessm 11 to 2013-14 and in the case of Sh. Dinesh V. Shah were completed by the Assessing Officer on 31.10.2016 In the assessments completed, the Assessing Officer has noted that during the course of search statement of Shri Dinesh V. capacity of Karta of M/s Dinesh V. Shah (HUF) was recored on wherein he accepted the entries of bogus loans undisclosed income. Accordingly, he declared a sum of as undisclosed income and agreed to pay taxes of amount declared by him. The relevant table of year-wise bifurcation of declared by the assessee is reproduced as under: Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 5 Briefly stated, facts of the case are that a search action u/s 142 tax Act, 1961 (in short ‘the Act’) was conducted in the e of Anku Shubham Group on 11.12.2013. In view of certain incriminating materials found in relation to assessee, proceedings 3C of the Act were initiated in the case of the assessee. The assessments in the case of M/s Dinesh V. Shah (HUF) for assessment and in the case of Sh. Dinesh V. Shah were completed by the Assessing Officer on 31.10.2016. In the assessments completed, the Assessing Officer has noted that during the course of search statement of Shri Dinesh V. Shah in the capacity of Karta of M/s Dinesh V. Shah (HUF) was recored on entries of bogus loans as declared a sum of ₹2.68 crores amount declared wise bifurcation of ₹2.68 crores Sr. No. Name of the Party 2007-08 1. B Ashok Kumar & Co. -- 2. Khushi Gems Pvt. Ltd. -- 3. Raghukul Diamonds Pvt. Ltd. -- 4. Paradise Gems Pvt. Ltd. -- 5. Kurushetra Diamonds Pvt. Ltd. -- 6. Charvy Gems Pvt. Ltd. -- 7. Disha Gems Pvt. Ltd. -- 8. Khushbu Diamonds -- Total 4.1 In the post search investigation, the material seized/impounded during the search action was found that assessee had received bogus loans accommodation entries from parties other than a sum of him. Therefore, another 131of the Act on 24.03.2016, wherein he accepted tho entries of accommodation of bogus loans. The list of such entries reproduced by the Assessing Officer on page 3 of the ass order is extracted as under: ITA Nos. 1147 to 1150 & 1153/M/2020 2008-09 2009-10 2010-11 2011-12 30,00,000 -- -- -- 50,00,000 -- -- -- 25,00,000 -- -- -- -- 40,00,000 18,75,000 -- -- -- 18,75,000 -- -- -- -- -- -- -- -- -- -- -- -- 30,00,000 75,00,000 40,00,000 37,50,000 post search investigation, the material seized/impounded during the search action was also analyzed. It was found that assessee had received bogus loans accommodation entries from parties other than a sum of ₹2.68 crores declared by Therefore, another statement of the assessee was recorded u/s 03.2016, wherein he accepted tho entries of accommodation of bogus loans. The list of such entries reproduced by the Assessing Officer on page 3 of the ass order is extracted as under: Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 6 2012-13 Grand Total -- 30,00,000 -- 50,00,000 -- 25,00,000 -- 58,75,000 -- 18,75,000 50,00,000 50,00,000 23,00,000 23,00,000 12,50,000 12,50,000 85,50,000 2,68,00,000 post search investigation, the material also analyzed. It was found that assessee had received bogus loans accommodation 2.68 crores declared by statement of the assessee was recorded u/s 03.2016, wherein he accepted those additional entries of accommodation of bogus loans. The list of such entries reproduced by the Assessing Officer on page 3 of the assessment Name of the Party 2008-09 Indira International Look at me Retail Mallinath Exim Gili Gems Pvt. Ltd. Jitendra Gems Khushi Gems Pvt. Ltd. Kurushetra Diamond Pvt. Ltd. Total 4.2 In para 6.1 of the assessment order for assessment year 2010 11, the Ld. Assessing Officer has summarized obtaining bogus accommodation entry. During assessment proceedings, the Assessing Officer asked the assessee to file confirmation of those loan parties. However, in respect of loan entries for assessment year 2010 confirmation of the two parties as against the three bogus loan parties. The confirmation filed in respect of two parties, were also incomplete as there was no mention of the PAN or address of the lender company. The confirmation respective parties. Further, the letter sent through post were returned back un ITA Nos. 1147 to 1150 & 1153/M/2020 09 2009-10 2010-11 2011-12 2012 1,700,000 9,500,000 7,500,000 3,750,000 1,875,000 2,500,000 3,250,000 1,700,000 1,700,000 11,250,000 7,625,000 11,200,000 In para 6.1 of the assessment order for assessment year 2010 11, the Ld. Assessing Officer has summarized modus operendi obtaining bogus accommodation entry. During assessment proceedings, the Assessing Officer asked the assessee to file se loan parties. However, in respect of loan entries for assessment year 2010-11, the assessee could file confirmation of the two parties as against the three bogus loan parties. The confirmation filed in respect of two parties, were also there was no mention of the PAN or address of the lender company. The confirmations were not st respective parties. Further, under the enquiry u/s 133(6) of the Act, the letter sent through post were returned back un Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 7 2012-13 Grand Total 9,500,000 11,200,000 7,500,000 3,750,000 1,875,000 2,500,000 3,250,000 1,700,000 1,700,000 11,200,000 31,775,000 In para 6.1 of the assessment order for assessment year 2010- modus operendi of obtaining bogus accommodation entry. During assessment proceedings, the Assessing Officer asked the assessee to file se loan parties. However, in respect of loan 11, the assessee could file confirmation of the two parties as against the three bogus loan parties. The confirmation filed in respect of two parties, were also there was no mention of the PAN or address of the were not stamped by the the enquiry u/s 133(6) of the Act, the letter sent through post were returned back un-served. On further inquiry by the Inspector of the office of the Assessing Officer those parties were not found at the address found locked. From inquiry that those companies had vacated assessee failed to produce those parties before the Assessing Officer, however, at the end of the assessment proceedings, the assessee submitted his retraction course of search as well as recorded u/s 131 of the Act. In view of the facts and circumstances, the Assessing Officer made addition of the relevant bogus accommodation entry loans and also made addition for commission income @ those loans. As far as estimation of the commission is concerned Assessing Officer has relied on the statement of the assessee, wherein he accepted that commission @ 3 percent was paid by him for arranging such bogus accommodatio ITA Nos. 1147 to 1150 & 1153/M/2020 by the Inspector of the office of the Assessing Officer those parties were not found at the address and the inquiry from the neighbourhood that those companies had vacated those premises long back. The see failed to produce those parties before the Assessing Officer, end of the assessment proceedings, the assessee submitted his retraction from statements recorded during the course of search as well as recorded u/s 131 of the Act. In view of the facts and circumstances, the Assessing Officer made addition of the relevant bogus accommodation entry loans and also made addition for commission income @ 3 percent for arrangement of far as estimation of the commission is concerned Assessing Officer has relied on the statement of the assessee, wherein he accepted that commission @ 3 percent was paid by him for arranging such bogus accommodation entry loans. The relevant Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 8 by the Inspector of the office of the Assessing Officer, and the premises were the neighbourhood, it was found premises long back. The see failed to produce those parties before the Assessing Officer, end of the assessment proceedings, the assessee recorded during the course of search as well as recorded u/s 131 of the Act. In view of the facts and circumstances, the Assessing Officer made addition of the relevant bogus accommodation entry loans and also made nt for arrangement of far as estimation of the commission is concerned, the Assessing Officer has relied on the statement of the assessee, wherein he accepted that commission @ 3 percent was paid by him n entry loans. The relevant para of the order for under: “8.5.5 Subsequently on 27 retracted on the declaration of undisclosed income given at the time of search. The retraction filed at the very fag end of the search assessment proceedings appears to be an after thought. The assessee had sufficient time to take its position. It is only after approximately 3 years that the assessee chose to take such stand. Had the asse declaration, the assessee could have retracted at the time of post search investigation proceeding only whereas the assessee further declared additional bogus loan amount. Even during the course of search assessment proceedings u/s Therefore such attempt being made at this juncture is nothing but an after thought. 8.6 In view of the above, the amount of loan of Rs. 92,00,000/ by the assessee from the lender companies is hereby a income being unexplained credits to the books of the assessee u/s 68 of the Act. Penalty proceedings u/s. 271(1)(c) of the leading to concealment of income. furnishing of inaccurate particulars 9. Further it is stated that the assessee must have incurred some commission expense on the said accommodation entries w.r.t. unsecured loan taken which has not been accounted for in the assessee's books of ITA Nos. 1147 to 1150 & 1153/M/2020 for assessment year 2010-11, is reproduced as 8.5.5 Subsequently on 27-10-2016, the assessee filed its submission and retracted on the declaration of undisclosed income given at the time of retraction filed at the very fag end of the search assessment proceedings appears to be an after thought. The assessee had sufficient time to take its position. It is only after approximately 3 years that the assessee chose to take such stand. Had the assessee been forced to file declaration, the assessee could have retracted at the time of post search investigation proceeding only whereas the assessee further declared additional bogus loan amount. Even during the course of search assessment proceedings u/s 153A, the assessee did not file retraction. Therefore such attempt being made at this juncture is nothing but an after thought. 8.6 In view of the above, the amount of loan of Rs. 92,00,000/ by the assessee from the lender companies is hereby added back to its income being unexplained credits to the books of the assessee u/s 68 of the Act. Penalty proceedings u/s. 271(1)(c) of the leading to concealment of income. Income Tax Act, 1961 are hereby initiated for furnishing of inaccurate particulars of income [Addition of Rs.92,00,000/ 9. Further it is stated that the assessee must have incurred some commission expense on the said accommodation entries w.r.t. unsecured loan taken which has not been accounted for in the assessee's books of Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 9 11, is reproduced as 2016, the assessee filed its submission and retracted on the declaration of undisclosed income given at the time of retraction filed at the very fag end of the search assessment proceedings appears to be an after thought. The assessee had sufficient time to take its position. It is only after approximately 3 years that the ssee been forced to file declaration, the assessee could have retracted at the time of post search investigation proceeding only whereas the assessee further declared additional bogus loan amount. Even during the course of search 153A, the assessee did not file retraction. Therefore such attempt being made at this juncture is nothing but an 8.6 In view of the above, the amount of loan of Rs. 92,00,000/- received dded back to its income being unexplained credits to the books of the assessee u/s 68 of the Act. Penalty proceedings u/s. 271(1)(c) of the leading to Income Tax Act, 1961 are hereby initiated for [Addition of Rs.92,00,000/-] 9. Further it is stated that the assessee must have incurred some commission expense on the said accommodation entries w.r.t. unsecured loan taken which has not been accounted for in the assessee's books of accounts. Such expenditure incurred has been meted out from unaccounted income generated from the business of the assessee's firm. In this regard, Sh. Sunil C. Shah (Partner of Ankur concerns wherein Sh. Dinesh V. Shah, Karta of M/s Dinesh V. is also one of the partners) in his statement recorded u/s 131 on 11 2013 accepted the fact that broker Sh. Vijay Batki through whom accommodation entities on unsecured loans have been arranged was paid in cash, commission @ 3% of unsecured l 9.1 Thus as per prevailing market rate of commission charged on such accommodation entries; commission @ 3% on bogus unsecured loan is hereby adopted and an amount of Rs.2,76,000/ is hereby disallowed and added ba Penalty u/s 271(1)(c) of the Act is initiated for furnishing inaccurate particulars of income leading to concealment of income. 5. On further appeal, the Ld. CIT(A) upheld observing as under: 5.3 The submissions / contentions of the assessee have been duly considered. The primary objections of the assessee against the addition made by the AO u/s 68 of Rs. 92,00,000/ unsecured loans/advances can be summarised as under: (i) It has discharged its onus of proving the genuineness of the transactions by providing the copies of return of income, confirmations, bank extracts etc. of the lenders. ITA Nos. 1147 to 1150 & 1153/M/2020 accounts. Such expenditure incurred has been meted out from unaccounted income generated from the business of the assessee's firm. In this regard, Sh. Sunil C. Shah (Partner of Ankur-Shubham Group concerns wherein Sh. Dinesh V. Shah, Karta of M/s Dinesh V. is also one of the partners) in his statement recorded u/s 131 on 11 2013 accepted the fact that broker Sh. Vijay Batki through whom accommodation entities on unsecured loans have been arranged was paid in cash, commission @ 3% of unsecured loans so arranged. 9.1 Thus as per prevailing market rate of commission charged on such accommodation entries; commission @ 3% on bogus unsecured loan is hereby adopted and an amount of Rs.2,76,000/- (3% (Rs. 92,00,000/ is hereby disallowed and added back to the total income of the assessee. Penalty u/s 271(1)(c) of the Act is initiated for furnishing inaccurate particulars of income leading to concealment of income.” On further appeal, the Ld. CIT(A) upheld ubmissions / contentions of the assessee have been duly considered. The primary objections of the assessee against the addition made by the AO u/s 68 of Rs. 92,00,000/- in respect of the said alleged unsecured loans/advances can be summarised as under: It has discharged its onus of proving the genuineness of the transactions by providing the copies of return of income, confirmations, bank extracts etc. of the lenders. Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 10 accounts. Such expenditure incurred has been meted out from unaccounted income generated from the business of the assessee's firm. Shubham Group concerns wherein Sh. Dinesh V. Shah, Karta of M/s Dinesh V. Shah(HUF) is also one of the partners) in his statement recorded u/s 131 on 11-12- 2013 accepted the fact that broker Sh. Vijay Batki through whom accommodation entities on unsecured loans have been arranged was oans so arranged. 9.1 Thus as per prevailing market rate of commission charged on such accommodation entries; commission @ 3% on bogus unsecured loan is (3% (Rs. 92,00,000/-) ] ck to the total income of the assessee. Penalty u/s 271(1)(c) of the Act is initiated for furnishing inaccurate On further appeal, the Ld. CIT(A) upheld the additions ubmissions / contentions of the assessee have been duly considered. The primary objections of the assessee against the addition in respect of the said alleged It has discharged its onus of proving the genuineness of the loan transactions by providing the copies of return of income, (ii) The statements on oath given by Shri Dinesh Shah, the karta of the assessee as well as the other key persons of the Assessee Group at the time of the search action were under duress which were subsequently retracted. It was not allowed cross examination of the said alleged lenders who had informed that the assessee had availed of accommodation entries. Therefore, the action of the AO of making the said addition after relying upon the statements given by the karta of the assessee as well as other key persons of the Assessee Group at the time of the search action, is not correct. Whether the assessee has discharged its primary onus to show creditworthiness of the lenders and genuineness of the loan transactions by providing their copies of returns of income, confirmations, bank extracts, etc. 5.4 As noted above, the assessee has cont its onus by submitting full details of the said lenders in the form of name, address, PAN, Financial statements, confirmation etc. and thus, it had duly discharged its primary onus of proving the identity and creditworthiness o transactions. This contention of the assessee is not acceptable in view of the ratio laid out by the Hon'ble Delhi High Court in the case of Nova Promoters & Finlease (P) Ltd (supra) where also search action i case of certain entry operators had revealed that the said assessee had availed of accommodation entries from the certain entry operators. In that case also the Name, address and PAN, ITR Acknowledgment, Financial statements, etc. of the shareholder submitted to the AO and the said assessee had claimed that it had discharged its onus. The Hon'ble Delhi High Court after due ITA Nos. 1147 to 1150 & 1153/M/2020 (ii) The statements on oath given by Shri Dinesh Shah, the karta of the as well as the other key persons of the Assessee Group at the time of the search action were under duress which were subsequently retracted. It was not allowed cross examination of the said alleged lenders who had informed that the assessee had availed of accommodation entries. Therefore, the action of the AO of making the said addition after relying upon the statements given by the karta of the assessee as well as other key persons of the Assessee Group at the time of the search action, is not correct. ther the assessee has discharged its primary onus to show creditworthiness of the lenders and genuineness of the loan transactions by providing their copies of returns of income, confirmations, bank extracts, etc. 5.4 As noted above, the assessee has contended that it had discharged by submitting full details of the said lenders in the form of name, address, PAN, Financial statements, confirmation etc. and thus, it had duly discharged its primary onus of proving the identity and creditworthiness of the said lenders and genuineness of the loan transactions. This contention of the assessee is not acceptable in view of the ratio laid out by the Hon'ble Delhi High Court in the case of Nova Promoters & Finlease (P) Ltd (supra) where also search action i case of certain entry operators had revealed that the said assessee had availed of accommodation entries from the certain entry operators. In that case also the Name, address and PAN, ITR Acknowledgment, Financial statements, etc. of the shareholder companies were submitted to the AO and the said assessee had claimed that it had discharged its onus. The Hon'ble Delhi High Court after due Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 11 (ii) The statements on oath given by Shri Dinesh Shah, the karta of the as well as the other key persons of the Assessee Group at the time of the search action were under duress which were subsequently retracted. It was not allowed cross examination of the said alleged lenders who had informed that the assessee had availed of accommodation entries. Therefore, the action of the AO of making the said addition after relying upon the statements given by the karta of the assessee as well as other key persons of the Assessee Group at the ther the assessee has discharged its primary onus to show creditworthiness of the lenders and genuineness of the loan transactions by providing their copies of returns of income, ended that it had discharged by submitting full details of the said lenders in the form of name, address, PAN, Financial statements, confirmation etc. and thus, it had duly discharged its primary onus of proving the identity and f the said lenders and genuineness of the loan transactions. This contention of the assessee is not acceptable in view of the ratio laid out by the Hon'ble Delhi High Court in the case of Nova Promoters & Finlease (P) Ltd (supra) where also search action in the case of certain entry operators had revealed that the said assessee had availed of accommodation entries from the certain entry operators. In that case also the Name, address and PAN, ITR Acknowledgment, companies were submitted to the AO and the said assessee had claimed that it had discharged its onus. The Hon'ble Delhi High Court after due consideration of the facts held that in routine circumstances submission of the said details/information would have to discharge the onus cast upon the assessee u/s 68. However, this ratio cannot be applied to a case where the AO is in possession of the material that discredits and impeaches the particulars furnished by the assessee and also establishes "accommodation entry providers", whose business is to help the beneficiaries bring into their books of accounts their unaccounted funds through the medium of share application. The relevant portion of the order of the Hon'b Promoters &Finlease (P) Ltd (supra)is reproduced as under: "38. The ratio of a decision is to be understood and appreciated in the background of the facts of that case. So understood, it will be seen that where the complete particulars of the share applicants such as their names and addresses, income tax file numbers, their creditworthiness, share application forms and share holders' register, share transfer register etc. are furnished to the Assessing Officer and the 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 ope 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 of material that discredits and impeaches the particulars furnished by the assessee and also establishes the link between self- business it is to help assessees bring into their books of account their unaccounted monies through the medium of ITA Nos. 1147 to 1150 & 1153/M/2020 consideration of the facts held that in routine circumstances submission of the said details/information would have been sufficient to discharge the onus cast upon the assessee u/s 68. However, this ratio cannot be applied to a case where the AO is in possession of the material that discredits and impeaches the particulars furnished by the assessee and also establishes the link between self confessed "accommodation entry providers", whose business is to help the beneficiaries bring into their books of accounts their unaccounted funds through the medium of share application. The relevant portion of the order of the Hon'ble Delhi High Court in the case of Nova Promoters &Finlease (P) Ltd (supra)is reproduced as under: "38. The ratio of a decision is to be understood and appreciated in the background of the facts of that case. So understood, it will be seen that omplete particulars of the share applicants such as their names and addresses, income tax file numbers, their creditworthiness, share application forms and share holders' register, share transfer register etc. are furnished to the Assessing Officer and the 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 of material that discredits and impeaches the lars furnished by the assessee and also establishes the link -confessed "accommodation entry providers", whose business it is to help assessees bring into their books of account their unaccounted monies through the medium of share subscription, Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 12 consideration of the facts held that in routine circumstances been sufficient to discharge the onus cast upon the assessee u/s 68. However, this ratio cannot be applied to a case where the AO is in possession of the material that discredits and impeaches the particulars furnished by the link between self confessed "accommodation entry providers", whose business is to help the beneficiaries bring into their books of accounts their unaccounted funds through the medium of share application. The relevant portion le Delhi High Court in the case of Nova Promoters &Finlease (P) Ltd (supra)is reproduced as under: "38. The ratio of a decision is to be understood and appreciated in the background of the facts of that case. So understood, it will be seen that omplete particulars of the share applicants such as their names and addresses, income tax file numbers, their creditworthiness, share application forms and share holders' register, share transfer register etc. are furnished to the Assessing 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 n 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 of material that discredits and impeaches the lars furnished by the assessee and also establishes the link confessed "accommodation entry providers", whose business it is to help assessees bring into their books of account their share subscription, and the assessee. The ratio is inapplicable to a case, again such as the present one, where the involvement of the assessee in such modus operandi is clearly indicated by valid material made available to the Assessing Officer as a result of investigations revenue authorities into the activities of such "entry providers". The existence with the Assessing Officer of material showing that the share subscriptions were collected as part of a pre meditated plan a smokescreen conceived and exec involvement of the assessee excludes the applicability of the ratio. In our understanding, the ratio is attracted to a case where it is a simple question of whether the assessee has discharged the burden placed upon him under se creditworthiness of the share applicant and the genuineness of the transaction. In such a case, the Assessing Officer cannot sit back with folded hands till the assessee exhausts all the evidence or material in his possession and then come forward to merely reject the same, without carrying out any verification or enquiry into the material placed before him. The case before us does not fall under this category and it would be a travesty of truth and justice to e contrary. 39. The case of CIT v. Orissa Corporation (P.) Ltd. [1986] 159 ITR 78/25 Taxman 80 (SC) exemplifies the category of cases where no action is taken by the Assessing Officer to verify or conduct an enquiry into the particulars including their income decided by this court in CIT v. Dolphin Canpack[2006] 283 ITR 190, CIT v. Makhni&Tyagi (P.) Ltd. [2004] 267 ITR 433 / 136 Taxman 641, CI v. Antartica Investment (P.) Ltd. [2003] 262 ITR 493/133 Taxman 605 ITA Nos. 1147 to 1150 & 1153/M/2020 the assessee. The ratio is inapplicable to a case, again such as the present one, where the involvement of the assessee in such modus operandi is clearly indicated by valid material made available to the Assessing Officer as a result of investigations carried out by the revenue authorities into the activities of such "entry providers". The existence with the Assessing Officer of material showing that the share subscriptions were collected as part of a pre meditated plan a smokescreen 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 case where it is a simple question of whether the assessee has discharged the burden placed upon him under sec. 68 to prove and establish the identity and creditworthiness of the share applicant and the genuineness of the transaction. In such a case, the Assessing Officer cannot sit back with folded hands till the assessee exhausts all the evidence or material in his possession and then come forward to merely reject the same, without carrying out any verification or enquiry into the material placed before him. The case before us does not fall under this category and it would be a travesty of truth and justice to express a view to the 39. The case of CIT v. Orissa Corporation (P.) Ltd. [1986] 159 ITR 78/25 Taxman 80 (SC) exemplifies the category of cases where no action is taken by the Assessing Officer to verify or conduct an enquiry into the particulars about the creditors furnished by the assessee, including their income-tax file numbers. In the same category fall cases decided by this court in CIT v. Dolphin Canpack[2006] 283 ITR 190, CIT v. Makhni&Tyagi (P.) Ltd. [2004] 267 ITR 433 / 136 Taxman 641, CI v. Antartica Investment (P.) Ltd. [2003] 262 ITR 493/133 Taxman 605 Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 13 the assessee. The ratio is inapplicable to a case, again such as the present one, where the involvement of the assessee in such modus operandi is clearly indicated by valid material made available to the carried out by the revenue authorities into the activities of such "entry providers". The existence with the Assessing Officer of material showing that the share subscriptions were collected as part of a pre meditated plan a uted with the connivance or involvement of the assessee excludes the applicability of the ratio. In our understanding, the ratio is attracted to a case where it is a simple question of whether the assessee has discharged the burden placed c. 68 to prove and establish the identity and creditworthiness of the share applicant and the genuineness of the transaction. In such a case, the Assessing Officer cannot sit back with folded hands till the assessee exhausts all the evidence or material in his possession and then come forward to merely reject the same, without carrying out any verification or enquiry into the material placed before him. The case before us does not fall under this category xpress a view to the 39. The case of CIT v. Orissa Corporation (P.) Ltd. [1986] 159 ITR 78/25 Taxman 80 (SC) exemplifies the category of cases where no action is taken by the Assessing Officer to verify or conduct an enquiry about the creditors furnished by the assessee, tax file numbers. In the same category fall cases decided by this court in CIT v. Dolphin Canpack[2006] 283 ITR 190, CIT v. Makhni&Tyagi (P.) Ltd. [2004] 267 ITR 433 / 136 Taxman 641, CIT v. Antartica Investment (P.) Ltd. [2003] 262 ITR 493/133 Taxman 605 and CIT v.Achal Investment Ltd. [2004] 268 ITR 211/ 136 Taxman 335. To put it simply, in these cases the decision was based on the fundamental rule of law that evidence or material adduc assessee cannot be thrown out without any enquiry. The ratio does not extend beyond that. The boundaries of the ratio cannot be, and should not be, widened to include therein cases where there exists material to implicate the assessee in a collus are self-confessed "accommodation entry providers 5.5 In the instant case, the AO was in possession of incriminating material seized as well as incriminating statements recorded at the time of the search action in the case well as search action on the Assessee Group, which revealed that the assessee has availed of accommodation entries of loans. Therefore, the onus cast upon the assessee was of a higher degree which cannot be said to have been discharged by only submitting name, address, PAN, Financial Statements, confirmation, etc. The onus could have been discharged by producing before the AO, the said lenders as its witness along with its books of accounts and supporting evidences etc. However, this was never done in course of the assessment proceedings. It is observed that the lenders merely rotated money, which was coming through bank accounts. The bank accounts, therefore, did not reflect their creditworthiness or even genuineness of t It is also noted that no security was provided by our assessee to the said lenders in respect of the loans received which raises strong doubts about the genuineness of the loans. Therefore, it is held that the assessee has clearly failed i genuineness of the loan transactions with the said lenders, M/s Khushi ITA Nos. 1147 to 1150 & 1153/M/2020 and CIT v.Achal Investment Ltd. [2004] 268 ITR 211/ 136 Taxman 335. To put it simply, in these cases the decision was based on the fundamental rule of law that evidence or material adduc assessee cannot be thrown out without any enquiry. The ratio does not extend beyond that. The boundaries of the ratio cannot be, and should not be, widened to include therein cases where there exists material to implicate the assessee in a collusive arrangement with persons who confessed "accommodation entry providers. 5.5 In the instant case, the AO was in possession of incriminating material seized as well as incriminating statements recorded at the time of the search action in the cases of the various Entry Operators as well as search action on the Assessee Group, which revealed that the assessee has availed of accommodation entries of loans. Therefore, the onus cast upon the assessee was of a higher degree which cannot be been discharged by only submitting name, address, PAN, Financial Statements, confirmation, etc. The onus could have been discharged by producing before the AO, the said lenders as its witness along with its books of accounts and supporting evidences etc. owever, this was never done in course of the assessment proceedings. It is observed that the lenders merely rotated money, which was coming through bank accounts. The bank accounts, therefore, did not reflect their creditworthiness or even genuineness of the transactions. It is also noted that no security was provided by our assessee to the said lenders in respect of the loans received which raises strong doubts about the genuineness of the loans. Therefore, it is held that the assessee has clearly failed in discharging its onus of proving the genuineness of the loan transactions with the said lenders, M/s Khushi Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 14 and CIT v.Achal Investment Ltd. [2004] 268 ITR 211/ 136 Taxman 335. To put it simply, in these cases the decision was based on the fundamental rule of law that evidence or material adduced by the assessee cannot be thrown out without any enquiry. The ratio does not extend beyond that. The boundaries of the ratio cannot be, and should not be, widened to include therein cases where there exists material to ive arrangement with persons who 5.5 In the instant case, the AO was in possession of incriminating material seized as well as incriminating statements recorded at the s of the various Entry Operators as well as search action on the Assessee Group, which revealed that the assessee has availed of accommodation entries of loans. Therefore, the onus cast upon the assessee was of a higher degree which cannot be been discharged by only submitting name, address, PAN, Financial Statements, confirmation, etc. The onus could have been discharged by producing before the AO, the said lenders as its witness along with its books of accounts and supporting evidences etc. owever, this was never done in course of the assessment proceedings. It is observed that the lenders merely rotated money, which was coming through bank accounts. The bank accounts, therefore, did not he transactions. It is also noted that no security was provided by our assessee to the said lenders in respect of the loans received which raises strong doubts about the genuineness of the loans. Therefore, it is held that the n discharging its onus of proving the genuineness of the loan transactions with the said lenders, M/s Khushi Gems P. Ltd., M/s. Raghukul Diamonds P. Ltd. and M/s. Indira International. Whether the action of the AO is incorrect in not accepting the retractions made by the karta of the assessee as well as other key persons of the Assessee Group and not allowing cross examination of the deponents of the statements used by him to draw adverse inference against the assessee 5.6 The assessee has also strongly rel well as the other key persons of the assessee group had retracted their original statements wherein it was confirmed that the assessee and other entities of the group have availed of accommodation entries of unsecured loan Operators. The assessee has also contended that since it was not allowed cross examination of the deponents of the statements relied upon by the AO to draw adverse inference, the additions made, are not correct. 5.7 It is noted that the Indore Bench of the Madhya Pradesh High Court in the case of Smt. Gunwatibai 146 ITR 140 explained the judgement of the Hon'ble Supreme Court in the case of Mehta Parikh and Co. (30 ITR 181) (SC) and held that the said deci laid down the proposition that unless the deponents of the affidavits are cross-examined, the affidavits cannot be rejected. It was explained that the decision of the Hon'ble Supreme Court lays down that if there is no material whatsoever on record for doubting the veracity of the statements made in the affidavits and if the deponents have also not been subjected to cross examination for bringing out the validity of ITA Nos. 1147 to 1150 & 1153/M/2020 Gems P. Ltd., M/s. Raghukul Diamonds P. Ltd. and M/s. Indira Whether the action of the AO is incorrect in not accepting the ons made by the karta of the assessee as well as other key persons of the Assessee Group and not allowing cross examination of the deponents of the statements used by him to draw adverse inference against the assessee 5.6 The assessee has also strongly relied on the fact that its karta as well as the other key persons of the assessee group had retracted their original statements wherein it was confirmed that the assessee and other entities of the group have availed of accommodation entries of unsecured loans from the various concerns controlled by the Entry Operators. The assessee has also contended that since it was not allowed cross examination of the deponents of the statements relied upon by the AO to draw adverse inference, the additions made, are not 5.7 It is noted that the Indore Bench of the Madhya Pradesh High Court in the case of Smt. Gunwatibai 146 ITR 140 explained the judgement of the Hon'ble Supreme Court in the case of Mehta Parikh and Co. (30 ITR 181) (SC) and held that the said decision cannot be considered to have laid down the proposition that unless the deponents of the affidavits examined, the affidavits cannot be rejected. It was explained that the decision of the Hon'ble Supreme Court lays down that if there erial whatsoever on record for doubting the veracity of the statements made in the affidavits and if the deponents have also not been subjected to cross examination for bringing out the validity of Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 15 Gems P. Ltd., M/s. Raghukul Diamonds P. Ltd. and M/s. Indira Whether the action of the AO is incorrect in not accepting the ons made by the karta of the assessee as well as other key persons of the Assessee Group and not allowing cross examination of the deponents of the statements used by him to draw adverse inference ied on the fact that its karta as well as the other key persons of the assessee group had retracted their original statements wherein it was confirmed that the assessee and other entities of the group have availed of accommodation entries of s from the various concerns controlled by the Entry Operators. The assessee has also contended that since it was not allowed cross examination of the deponents of the statements relied upon by the AO to draw adverse inference, the additions made, are not 5.7 It is noted that the Indore Bench of the Madhya Pradesh High Court in the case of Smt. Gunwatibai 146 ITR 140 explained the judgement of the Hon'ble Supreme Court in the case of Mehta Parikh and Co. (30 ITR sion cannot be considered to have laid down the proposition that unless the deponents of the affidavits examined, the affidavits cannot be rejected. It was explained that the decision of the Hon'ble Supreme Court lays down that if there erial whatsoever on record for doubting the veracity of the statements made in the affidavits and if the deponents have also not been subjected to cross examination for bringing out the validity of their statements, then the Tribunal would not be justified the correctness of the statement made by the deponents in the affidavits. However, the affidavits need not be accepted as reliable when there is enough material on record to doubt the veracity of the transaction. In such a case it cannot be sa rejected only after cross examination. Also the Delhi High Court in the case of Bhagirath Aggarwal (35 ITR 143) held that once there is a clear admission voluntarily made by an assessee, it would contribute good piece of evide on the basis of the findings of the search action in the cases of Entry Operators which revealed that the assessee and other entities of the assessee group have availed accommodation entries of unsecure loans, search action was carried out in the case of the assessee group. In course of search action, Shri Sunil C.Shah, key person of the Assessee Group, admitted u/s.132(4) of a payment of commission @ 3%. Shri Sunil C. Sh on-money received on sale of units in the real estate to avail of accommodation entries of unsecured loans. He also made an offer of additional income in the hands of the various entities of the assessee group in res unsecured loans which included an amount of Rs. 3,17,75,000/ hands of the assessee. Shri Sunil C. Shah also reconfirmed on 23.01.2014 the statement given by him on 11.12.2013. Shri Nimesh Dalal, another availed of accommodation entries from the concerns controlled by Entry Operators. He also admitted that the on money received on sale of units of the real estate projects were routed back in the books of i the form of unsecured loans. It was further explained by him that these ITA Nos. 1147 to 1150 & 1153/M/2020 their statements, then the Tribunal would not be justified the correctness of the statement made by the deponents in the affidavits. However, the affidavits need not be accepted as reliable when there is enough material on record to doubt the veracity of the transaction. In such a case it cannot be said that the affidavits can be rejected only after cross examination. Also the Delhi High Court in the case of Bhagirath Aggarwal (35 ITR 143) held that once there is a clear admission voluntarily made by an assessee, it would contribute good piece of evidence in the hands of the Revenue. In the instant case, on the basis of the findings of the search action in the cases of Entry Operators which revealed that the assessee and other entities of the assessee group have availed accommodation entries of unsecure loans, search action was carried out in the case of the assessee group. In course of search action, Shri Sunil C.Shah, key person of the Assessee Group, admitted u/s.132(4) of availing bogus unsecured loans by payment of commission @ 3%. Shri Sunil C. Shah explained that the money received on sale of units in the real estate projects was used to avail of accommodation entries of unsecured loans. He also made an offer of additional income in the hands of the various entities of the assessee group in respect of the accommodation entries availed of unsecured loans which included an amount of Rs. 3,17,75,000/ hands of the assessee. Shri Sunil C. Shah also reconfirmed on 23.01.2014 the statement given by him on 11.12.2013. Shri Nimesh Dalal, another key person of Assessee group also accepted to have availed of accommodation entries from the concerns controlled by Entry Operators. He also admitted that the on money received on sale of units of the real estate projects were routed back in the books of i the form of unsecured loans. It was further explained by him that these Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 16 their statements, then the Tribunal would not be justified in doubting the correctness of the statement made by the deponents in the affidavits. However, the affidavits need not be accepted as reliable when there is enough material on record to doubt the veracity of the id that the affidavits can be rejected only after cross examination. Also the Delhi High Court in the case of Bhagirath Aggarwal (35 ITR 143) held that once there is a clear admission voluntarily made by an assessee, it would contribute nce in the hands of the Revenue. In the instant case, on the basis of the findings of the search action in the cases of Entry Operators which revealed that the assessee and other entities of the assessee group have availed accommodation entries of unsecured loans, search action was carried out in the case of the assessee group. In course of search action, Shri Sunil C.Shah, key person of the Assessee vailing bogus unsecured loans by ah explained that the projects was used to avail of accommodation entries of unsecured loans. He also made an offer of additional income in the hands of the various entities of the pect of the accommodation entries availed of unsecured loans which included an amount of Rs. 3,17,75,000/- in the hands of the assessee. Shri Sunil C. Shah also reconfirmed on 23.01.2014 the statement given by him on 11.12.2013. Shri Nimesh key person of Assessee group also accepted to have availed of accommodation entries from the concerns controlled by Entry Operators. He also admitted that the on money received on sale of units of the real estate projects were routed back in the books of in the form of unsecured loans. It was further explained by him that these bogus unsecured loans have been arranged through the loan brokers, Kiritbhai and Vijay Batki. Moreover, the karta of the assessee, who is a key person of the Assessee Group, in the p admitted in his statement dated 24.03.2014 that accommodation entries have been availed of unsecured loans and offered disclosure of additional amount of Rs. 8.09 crores in the hands of certain other entities of the Group. It is as the karta of the assessee have submitted their retractions before the department for the 1st time only before the AO only on 08.12.2015, in course of the assessment proceedings, which is after a lapse of ar 2 years from the original statements. Thus in the instant case, there is enough material on record to negate the claim of genuineness of the loan transactions in the light of overwhelming material, and therefore the plea that the AO should not have re retractions of the karta of the assessee and others, has no force. 5.8 As regards the contention of the assessee that it was not allowed to cross examine the Entry operators whose statements were relied upon by the AO to draw adver have been vitiated, it can be observed from the discussion in the preceding paras, that the primary onus of proving the genuineness of the transactions of loans received had clearly not been discharged by the assessee. An opportunity to cross It is to be provided only once the basic onus cast upon the assessee is discharged. In the instant case, the basic onus to prove the genuineness of the transaction by producing the lenders discharged by the assessee. In view of such a factual scenario, the assessee cannot insist on being granted an opportunity to cross examine the Entry Operators whose statements on oath have been ITA Nos. 1147 to 1150 & 1153/M/2020 bogus unsecured loans have been arranged through the loan brokers, Kiritbhai and Vijay Batki. Moreover, the karta of the assessee, who is a key person of the Assessee Group, in the presence of Shri Nimesh Shah admitted in his statement dated 24.03.2014 that accommodation entries have been availed of unsecured loans and offered disclosure of additional amount of Rs. 8.09 crores in the hands of certain other entities of the Group. It is also relevant to note that Sunil Shah as well as the karta of the assessee have submitted their retractions before the department for the 1st time only before the AO only on 08.12.2015, in course of the assessment proceedings, which is after a lapse of ar 2 years from the original statements. Thus in the instant case, there is enough material on record to negate the claim of genuineness of the loan transactions in the light of overwhelming material, and therefore the plea that the AO should not have rejected the affidavits of retractions of the karta of the assessee and others, has no force. 5.8 As regards the contention of the assessee that it was not allowed to cross examine the Entry operators whose statements were relied upon by the AO to draw adverse inference and therefore the said evidences have been vitiated, it can be observed from the discussion in the preceding paras, that the primary onus of proving the genuineness of the transactions of loans received had clearly not been discharged by ssessee. An opportunity to cross-examine is not an absolute right. It is to be provided only once the basic onus cast upon the assessee is discharged. In the instant case, the basic onus to prove the genuineness of the transaction by producing the lenders has clearly not been discharged by the assessee. In view of such a factual scenario, the assessee cannot insist on being granted an opportunity to cross examine the Entry Operators whose statements on oath have been Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 17 bogus unsecured loans have been arranged through the loan brokers, Kiritbhai and Vijay Batki. Moreover, the karta of the assessee, who is a resence of Shri Nimesh Shah admitted in his statement dated 24.03.2014 that accommodation entries have been availed of unsecured loans and offered disclosure of additional amount of Rs. 8.09 crores in the hands of certain other also relevant to note that Sunil Shah as well as the karta of the assessee have submitted their retractions before the department for the 1st time only before the AO only on 08.12.2015, in course of the assessment proceedings, which is after a lapse of around 2 years from the original statements. Thus in the instant case, there is enough material on record to negate the claim of genuineness of the loan transactions in the light of overwhelming material, and therefore jected the affidavits of retractions of the karta of the assessee and others, has no force. 5.8 As regards the contention of the assessee that it was not allowed to cross examine the Entry operators whose statements were relied upon se inference and therefore the said evidences have been vitiated, it can be observed from the discussion in the preceding paras, that the primary onus of proving the genuineness of the transactions of loans received had clearly not been discharged by examine is not an absolute right. It is to be provided only once the basic onus cast upon the assessee is discharged. In the instant case, the basic onus to prove the genuineness has clearly not been discharged by the assessee. In view of such a factual scenario, the assessee cannot insist on being granted an opportunity to cross examine the Entry Operators whose statements on oath have been relied upon by the AO to draw an adverse to point out that said Entry Operators have retracted their original statements and therefore giving opportunity to the assessee to cross examine them is not so critical. 5.9 Further, for retraction to be valid, threat or c proved by the assessee as held by the Rajasthan High Court in the case of Ravindra Trivedi (215 CTR 312) and the Hon'ble ITAT, Mumbai in the case of Hiralal Maganlal & Co (96 ParamAnand Builders (59 ITD 29). Shah, the karta of the assessee as well as other key persons of the Assessee Group like Shri Sunil C. Shah, Shri Nimesh Dalal, etc have not been in a position to demonstrate that their original statements on oath were under t 5.10 Further, the Hon'ble Kerala High Court in the case of D Abdul Razak (350 ITR 71) and the Hon'ble ITAT Bangalore in the case of Carpenters Classic (Exim) P Ltd. (108 ITD 142) has held that when the statement was made voluntarily and was not alleged to obtained under threat or coercion, onus was on the assessee to prove that the said declaration was made under misconception of facts. It was further held in the case of Carpenters Classic (Exim) P Ltd (supra) that since the assessee has not taken before authorities before whom such declaration was made, there was no valid reason for retraction of the same after a prolonged period. In the instant case, the original statements were given by Shri. Dinesh Shah, the karta of the assessee and others, after being confronted with the various evidences gathered during search action which included statements of the dummy directors/partners of concerns. ITA Nos. 1147 to 1150 & 1153/M/2020 relied upon by the AO to draw an adverse inference. It is also pertinent to point out that said Entry Operators have retracted their original statements and therefore giving opportunity to the assessee to cross examine them is not so critical. 9 Further, for retraction to be valid, threat or coercion has to be proved by the assessee as held by the Rajasthan High Court in the case of Ravindra Trivedi (215 CTR 312) and the Hon'ble ITAT, Mumbai in the case of Hiralal Maganlal & Co (96 ITD 113) and in the case of ParamAnand Builders (59 ITD 29). In the instant case, Shri Dinesh Shah, the karta of the assessee as well as other key persons of the Assessee Group like Shri Sunil C. Shah, Shri Nimesh Dalal, etc have not been in a position to demonstrate that their original statements on oath were under threat or coercion. 5.10 Further, the Hon'ble Kerala High Court in the case of D Abdul Razak (350 ITR 71) and the Hon'ble ITAT Bangalore in the case of Carpenters Classic (Exim) P Ltd. (108 ITD 142) has held that when the statement was made voluntarily and was not alleged to obtained under threat or coercion, onus was on the assessee to prove that the said declaration was made under misconception of facts. It was further held in the case of Carpenters Classic (Exim) P Ltd (supra) that since the assessee has not taken any steps to rectify its declaration before authorities before whom such declaration was made, there was no valid reason for retraction of the same after a prolonged period. In the instant case, the original statements were given by Shri. Dinesh karta of the assessee and others, after being confronted with the various evidences gathered during search action which included statements of the dummy directors/partners of concerns. However, it is Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 18 inference. It is also pertinent to point out that said Entry Operators have retracted their original statements and therefore giving opportunity to the assessee to cross- oercion has to be proved by the assessee as held by the Rajasthan High Court in the case of Ravindra Trivedi (215 CTR 312) and the Hon'ble ITAT, Mumbai in ITD 113) and in the case of the instant case, Shri Dinesh Shah, the karta of the assessee as well as other key persons of the Assessee Group like Shri Sunil C. Shah, Shri Nimesh Dalal, etc have not been in a position to demonstrate that their original statements on 5.10 Further, the Hon'ble Kerala High Court in the case of D Abdul Razak (350 ITR 71) and the Hon'ble ITAT Bangalore in the case of Carpenters Classic (Exim) P Ltd. (108 ITD 142) has held that when the statement was made voluntarily and was not alleged to have been obtained under threat or coercion, onus was on the assessee to prove that the said declaration was made under misconception of facts. It was further held in the case of Carpenters Classic (Exim) P Ltd (supra) any steps to rectify its declaration before authorities before whom such declaration was made, there was no valid reason for retraction of the same after a prolonged period. In the instant case, the original statements were given by Shri. Dinesh karta of the assessee and others, after being confronted with the various evidences gathered during search action which included However, it is observed that the subsequent retractions of Shri Dinesh karta of the assessee as well as other key persons of the Assessee Group like Shri Sunil C. Shah, Shri Nimesh Dalal, etc are very general in nature and no specific comments have been given as to why the replies given on the specific queries rais at the time of the search action can be said to be on account of misconception of facts. 5.11 It is to be noted that Shri Dinesh Shah, the karta of the assessee as well as the other key persons of the assessee group, Shri Nimesh Dalal and Shri Sunil C. Shah, search action created a situation in th department to not carry out any further investigations and therefore also their subsequent retractions cannot be accepted as held by the Hon'ble ITAT Mumbai in 96 ITD 113 and 6 SOT 18. 5.12 In view of the above detailed discussion the action of the AO in not considering the retractions made by Shri Dinesh Shah, karta of the assessee as well as other key persons of the Assessee Group. 5.13 Moreover, it is observed from the financials submitted in course of the appellate proceedings of the lenders, M/s Khushi Gems P. Ltd., M/s. Raghukul Diamonds P. Ltd. and M/s. Indira International, that these lenders have all the typical characteristics of a shell concern. From the financials available of these lenders, it shown meagre income and the assessee appears to have deliberately not filed their P&L A/c. and the Balance sheet so as not to expose their dubious nature of shell entity. In respect of loans taken from shell ITA Nos. 1147 to 1150 & 1153/M/2020 observed that the subsequent retractions of Shri Dinesh karta of the assessee as well as other key persons of the Assessee Group like Shri Sunil C. Shah, Shri Nimesh Dalal, etc are very general in nature and no specific comments have been given as to why the replies given on the specific queries raised in the original statements on oath at the time of the search action can be said to be on account of misconception of facts. 5.11 It is to be noted that Shri Dinesh Shah, the karta of the assessee as well as the other key persons of the assessee group, Shri Nimesh Dalal and Shri Sunil C. Shah, by giving their confessions at the time of the search action created a situation in their favor by inducing the department to not carry out any further investigations and therefore also their subsequent retractions cannot be accepted as held by the Hon'ble ITAT Mumbai in 96 ITD 113 and 6 SOT 18. 5.12 In view of the above detailed discussion, there is no infirmity in the action of the AO in not considering the retractions made by Shri Dinesh Shah, karta of the assessee as well as other key persons of the Assessee Group. 5.13 Moreover, it is observed from the financials submitted in course of the appellate proceedings of the lenders, M/s Khushi Gems P. Ltd., M/s. Raghukul Diamonds P. Ltd. and M/s. Indira International, that these lenders have all the typical characteristics of a shell concern. From the financials available of these lenders, it is observed that they have shown meagre income and the assessee appears to have deliberately not filed their P&L A/c. and the Balance sheet so as not to expose their dubious nature of shell entity. In respect of loans taken from shell Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 19 observed that the subsequent retractions of Shri Dinesh Shah, the karta of the assessee as well as other key persons of the Assessee Group like Shri Sunil C. Shah, Shri Nimesh Dalal, etc are very general in nature and no specific comments have been given as to why the replies ed in the original statements on oath at the time of the search action can be said to be on account of 5.11 It is to be noted that Shri Dinesh Shah, the karta of the assessee as well as the other key persons of the assessee group, Shri Nimesh Dalal by giving their confessions at the time of the eir favor by inducing the department to not carry out any further investigations and therefore also their subsequent retractions cannot be accepted as held by the there is no infirmity in the action of the AO in not considering the retractions made by Shri Dinesh Shah, karta of the assessee as well as other key persons of the 5.13 Moreover, it is observed from the financials submitted in course of the appellate proceedings of the lenders, M/s Khushi Gems P. Ltd., M/s. Raghukul Diamonds P. Ltd. and M/s. Indira International, that these lenders have all the typical characteristics of a shell concern. From the is observed that they have shown meagre income and the assessee appears to have deliberately not filed their P&L A/c. and the Balance sheet so as not to expose their dubious nature of shell entity. In respect of loans taken from shell concerns, the Pawankumar M Sanghavi (165 ITD 260) after analysis of the financials of the lender and also the bank statement, concluded that they are shell concerns and upheld the additions made by the AO u/s. 68. In this orde known about the phenomenon of shell companies which is the under belly of the financial world, however in view of the recent investigations carried out in high profile cases which are regularly reported in media, even a layman is now aware about the role played by shell companies in conversion of illegitimate money into legitimate money and therefore the decisions of the Hon'ble Courts relied upon by the assessee related to section 68, which are related to when not much was known about the phenomenon of shell companies, cannot be blindly applied. been upheld by the Hon'ble Gujarat High Court and the SLP filed has been dismissed by the Hon'ble Supreme 5.14 In view of the above detailed discussion, I have no hesitation in confirming the action of the AO of adding u/s.68, the alleged aggregate amount of loans of Rs. 92,00,000/ Ltd., M/s. Raghukul Diamonds P. Ltd. and M/s. I Further, the addition made by the AO of Rs. 2,76,000/ being the estimated unexplained commission payment made @ 3% for availing of accommodation entries which is on the basis of the rate informed by Shri Sunil Shah, one of the key pers statement on oath recorded u/s 131 on 11.12.2013, is also upheld. Accordingly, Ground Nos. 1 & 2 of the appeal are dismissed. ITA Nos. 1147 to 1150 & 1153/M/2020 Ahmedabad SMC Bench of the Tribunal in the case of Pawankumar M Sanghavi (165 ITD 260) after analysis of the financials of the lender and also the bank statement, concluded that they are shell concerns and upheld the additions made by the AO u/s. 68. In this order, the Hon'ble ITAT held that earlier not much was known about the phenomenon of shell companies which is the under belly of the financial world, however in view of the recent investigations carried out in high profile cases which are regularly media, even a layman is now aware about the role played by shell companies in conversion of illegitimate money into legitimate money and therefore the decisions of the Hon'ble Courts relied upon by the assessee related to section 68, which are related to earlier period when not much was known about the phenomenon of shell companies, cannot be blindly applied. This decision of the Hon'ble ITAT has also been upheld by the Hon'ble Gujarat High Court and the SLP filed has been dismissed by the Hon'ble Supreme Court. 5.14 In view of the above detailed discussion, I have no hesitation in confirming the action of the AO of adding u/s.68, the alleged aggregate amount of loans of Rs. 92,00,000/- from M/s Khushi Gems P. Ltd., M/s. Raghukul Diamonds P. Ltd. and M/s. Indira International. Further, the addition made by the AO of Rs. 2,76,000/ being the estimated unexplained commission payment made @ 3% for availing of accommodation entries which is on the basis of the rate informed by Shri Sunil Shah, one of the key persons of the Assessee Group, in his statement on oath recorded u/s 131 on 11.12.2013, is also upheld. Accordingly, Ground Nos. 1 & 2 of the appeal are dismissed. Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 20 ad SMC Bench of the Tribunal in the case of Pawankumar M Sanghavi (165 ITD 260) after analysis of the financials of the lender and also the bank statement, concluded that they are shell concerns and upheld the additions made by the AO u/s. r, the Hon'ble ITAT held that earlier not much was known about the phenomenon of shell companies which is the under belly of the financial world, however in view of the recent investigations carried out in high profile cases which are regularly media, even a layman is now aware about the role played by shell companies in conversion of illegitimate money into legitimate money and therefore the decisions of the Hon'ble Courts relied upon by earlier period when not much was known about the phenomenon of shell companies, This decision of the Hon'ble ITAT has also been upheld by the Hon'ble Gujarat High Court and the SLP filed has 5.14 In view of the above detailed discussion, I have no hesitation in confirming the action of the AO of adding u/s.68, the alleged from M/s Khushi Gems P. ndira International. Further, the addition made by the AO of Rs. 2,76,000/ being the estimated unexplained commission payment made @ 3% for availing of accommodation entries which is on the basis of the rate informed by ons of the Assessee Group, in his statement on oath recorded u/s 131 on 11.12.2013, is also upheld. Accordingly, Ground Nos. 1 & 2 of the appeal are dismissed.” 6. We have heard submission of the Ld. DR and perused the order of the lower authorities on the addition u/s 68 of the Act in relevant assessment years. From the order of the lower authorities, we find that there are sufficient evidence to hold that assessee failed to explain the nature and source of the credit in the circumstances in the case of Dinesh V. Shah (HUF) for assessment year 2010-11 have been mentioned above other years are identical. part of undisclosed inco course of search and undisclosed income accepted during the course of statement u/s 131 of the Act, which have already been reproduced is earlier part of the order in the form of tables. Assessing Officer not only relied on the statement of the assessee during the course of search proceedings as well as statement recorded u/s 131 of the Act, but also examined those credit entries ITA Nos. 1147 to 1150 & 1153/M/2020 We have heard submission of the Ld. DR and perused the order of the lower authorities on the issue-in-dispute addition u/s 68 of the Act in relevant assessment years. From the order of the lower authorities, we find that there are sufficient evidence to hold that assessee failed to explain the nature and source of the credit in the books of accounts. The facts and circumstances in the case of Dinesh V. Shah (HUF) for assessment 11 have been mentioned above. The facts in respect of other years are identical. The amount of additions in other years are part of undisclosed income of ₹2.68 crores admitted during the course of search and undisclosed income accepted during the course of statement u/s 131 of the Act, which have already been reproduced is earlier part of the order in the form of tables. Assessing Officer not only relied on the statement of the assessee during the course of search proceedings as well as statement recorded u/s 131 of the Act, but also examined those credit entries Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 21 We have heard submission of the Ld. DR and perused the order dispute in respect of addition u/s 68 of the Act in relevant assessment years. From the order of the lower authorities, we find that there are sufficient evidence to hold that assessee failed to explain the nature and books of accounts. The facts and circumstances in the case of Dinesh V. Shah (HUF) for assessment facts in respect of The amount of additions in other years are 2.68 crores admitted during the course of search and undisclosed income accepted during the course of statement u/s 131 of the Act, which have already been reproduced is earlier part of the order in the form of tables. The Assessing Officer not only relied on the statement of the assessee during the course of search proceedings as well as statement recorded u/s 131 of the Act, but also examined those credit entries in terms of section 68 of the Act and asked the assessee identity, creditworthiness and genuineness of the transactio assessee failed to discharge its onus, whereas the Assessing Officer duly carried out inquiry u/s 133(6) of the Act and due to non availability of the parties at their given to produce those parties, however, the assessee failed to produce those parties. In such circumstances, we do not find any error in the order of the Ld. CIT(A) in confirming the addition o dispute. Accordingly, we four appeals i.e. ITA No. 1147 to 1150/M/202 by the assessee in tho 6.1 The facts and circumstances in ITA No. 1153/M/2020 are identical to facts and 1150/M/2022, and grounds raised are also identically except change of amount, therefore, following our finding in ITA No. ITA Nos. 1147 to 1150 & 1153/M/2020 in terms of section 68 of the Act and asked the assessee identity, creditworthiness and genuineness of the transactio assessee failed to discharge its onus, whereas the Assessing Officer duly carried out inquiry u/s 133(6) of the Act and due to non availability of the parties at their given address, asked the assessee to produce those parties, however, the assessee failed to produce those parties. In such circumstances, we do not find any error in the (A) in confirming the addition o dispute. Accordingly, we uphold the order of the Ld. CIT(A) in all the i.e. ITA No. 1147 to 1150/M/2020. The grounds raised by the assessee in those appeals are accordingly dismissed. The facts and circumstances in ITA No. 1153/M/2020 are identical to facts and circumstances in ITA Nos. 1147 to 1150/M/2022, and grounds raised are also identically except change of amount, therefore, following our finding in ITA No. Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 22 in terms of section 68 of the Act and asked the assessee to verify the identity, creditworthiness and genuineness of the transactions. The assessee failed to discharge its onus, whereas the Assessing Officer duly carried out inquiry u/s 133(6) of the Act and due to non- asked the assessee to produce those parties, however, the assessee failed to produce those parties. In such circumstances, we do not find any error in the (A) in confirming the addition on the issue-in- uphold the order of the Ld. CIT(A) in all the . The grounds raised se appeals are accordingly dismissed. The facts and circumstances in ITA No. 1153/M/2020 are circumstances in ITA Nos. 1147 to 1150/M/2022, and grounds raised are also identically worded except change of amount, therefore, following our finding in ITA No. 1147 to 1150/M/2020, the grounds raised in ITA No. 1153/M/2020 are dismissed. 7. In the result, the five captioned appeals filed by the assessee are dismissed. Order pronounced in the open Court in Sd/- (AMIT SHUKLA JUDICIAL MEMBER Mumbai; Dated: 15/09/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// ITA Nos. 1147 to 1150 & 1153/M/2020 1147 to 1150/M/2020, the grounds raised in ITA No. 1153/M/2020 lt, the five captioned appeals filed by the assessee unced in the open Court in 15/09 Sd/- AMIT SHUKLA) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT the Order forwarded to : BY ORDER, (Sr. Private Secretary ITAT, Mumbai Dinesh Shah & HUF ITA Nos. 1147 to 1150 & 1153/M/2020 23 1147 to 1150/M/2020, the grounds raised in ITA No. 1153/M/2020 lt, the five captioned appeals filed by the assessee /09/2022. - OM PRAKASH KANT) MEMBER Sr. Private Secretary) ITAT, Mumbai