RISHI REALCON P. LTD, AURANGABAD V. ITO 4(3)(2), MUMBAI

ITA 1152/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1517 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 17-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Reopening of assessment; Bogus purchase; Unexplained cash credit; Source of fund; Cost of acquisition; Accommodation entries; Retraction; Set aside
• Section: 133(6); 143(1); 147; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.1152/M/2017 ASSESSMENT YEAR: 2010-11 M/S. RISHI REALCON P. LTD., PLOT NO.H-40, SECTOR H, N-5, CIDCO, AURANGABAD - 431001 PAN: AADCT1288P VS. INCOME TAX OFFICER- 4(3)(2), MUMBAI (APPELLANT) (R ESPONDENT) ITA NO.1659/M/2017 ASSESSMENT YEAR: 2010-11 INCOME TAX OFFICER- 4(3)(2), ROOM NO.648, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 VS. M/S. RISHI REALCON P. LTD., PLOT NO.H-40, SECTOR H, N-5, CIDCO, AURANGABAD - 431001 PAN: AADCT1288P (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VISHNU AGARWAL, A.R. SHRI ANKUSH AGARWAL, A.R. REVENUE BY : SHRI D.G. PANSARI, D.R. DATE OF HEARING : 21.02.2019 DATE OF PRONOUNCEMENT : 14.03.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED CROSS APPEALS HAVE BEEN PREFERRED AGAINST THE ORDER DATED 05.12.2016 OF THE COMMISSIONER OF I NCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO ASSESSMENT YEAR 2010-11. ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 2 2. THE ISSUE RAISED IN THE ASSESSEES APPEAL IS AGA INST THE ESTIMATION OF INCOME @ 2% OF GROSS TRANSACTIONS VAL UE OF SALE AS WELL AS PURCHASE OF SHARES OF RS.4,82,95,000/- (RS.2,10,00,000/- + RS.2,72,15,000/-) WHICH COMES TO RS.9,65,900/- AND IN THE DEPARTMENT S APPEAL, THE REVENUE HAS CHALLENGED THE ORDER OF LD. CIT(A) DELETING THE ADD ITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT TO THE TUNE OF RS.2,15,77,500/-. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF TRADING AND INVESTMENTS AND FILED ITS R ETURN INCOME ON 26.02.2011 DECLARING AN INCOME OF RS.389/- UNDER THE NORMAL PROVISION OF THE ACT WHICH WAS PROCESSED UND ER SECTION 143(1) OF THE ACT. THEREAFTER, THE CASE OF THE ASS ESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUING NO TICE UNDER SECTION 148 DATED 19.08.2013 THAT INCOME TO THE TUN E OF RS.2,15,77,500/- HAS ESCAPED ASSESSMENT IN A.Y. 201 0-11 AS ASSESSEE HAS PROVIDED ACCOMMODATION ENTRIES IN THE BOOKS OF ACCOUNTS BY PURCHASING SHARES OF PURTI POWER AND SU GAR LTD.( HEREINAFTER REFERRED TO AS PPSL) AT HIGHER RATE AT RS.4,25,77,500/- AND SELLING THE SAME AT LOWER RATE AT RS.2,10,00,000/- ON THE DIRECTION OF SHRI SHYAM AGG ARWAL AND THUS THE DIFFERENCE OF RS.2,15,77,500/- WAS RECEIVE D OUTSIDE THE BOOKS OF ACCOUNTS. THE SAID REOPENING WAS DONE BY THE AO AFTER THE DETAILED REASONS RECORDED ARE AS UNDER: 2. THE NOTICE U/S 148 OF THE IT ACT WAS ISSUED ON 19.08.2013. THE REASON RECORDED FOR REOPENING OF ASSESSMENT IS AS UNDER: IN THIS CASE INFORMATION HAS BEEN RECEIVED FROM TH E ADDL. CIT(LNV.)UNIT-LLL(2), KOLKATA, VIDE LETTER NO.ADIT(LNV.)/U-III(2)/KOLKATA /PPSL/2013-14/155 DATED 4/4/2013 THAT AS PER THE REQUEST RECEIVED FROM DGIT (LNV.,) PUNE, AN INVESTIGATION WAS CARRIED OUT IN THE TRANSACTIONS OF M/S RISHI RE ALCON PVT. LTD (EARLIER KNOWN AS ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 3 M/S TANISHKA MERCANTILE PVT. LTD, IN THE SHARES OF M/S PURTI POWER & SUGAR LTD. (PPSL). M/S RISHI REALCON PVT. LTD HAS PURCHASED 30 ,50,000 SHARES OF M/S PPSL FOR RS.4,25,77,500/-@ RS.6,35 PER SHARE AND ANOTHER 22, 00,000 SHARES @ 10.55PER SHARE AND SOLD THESE SHARES ON 30/11/2009 FOR RS.2, JO,00,000/- @ RS.4 PER SHARE AND INCURRED A LOSS OF RS.2,15,77,500/-. FURTHER, INFORMATION HAS ALSO BEEN RECEIVED FROM T HE ADDL. DIRECTOR OF INCOME TAX (INV.), VIDARBHA, NAGPUR, VIDE LETTER DATED F.NO.AD DL. DIT(LNV.)/PPSL/ENQUIRY/2013- 14 DATED 19/07/2013 REGARDING ENQUIRIES MADE IN THE CASE OF PPSL LTD. NAGPUR. DURING F.Y. 20O1-02 TO 2OQ3-04, 4,73,42,500 SHARES OF PPSL (THEN PART/ SUGAR KARKHANA LTD.) WERE ALLOTTED TO 12 COMPANIES OF MEH TA CROUP, NAGPUR (LAYER -1 COMPANIES) AT THE FACE VALUE OF RS . /- PER SHARE . THESE COMPANIES SOLD ALL THESE SHARES TO 12 COMPANIES (LAYER-2 COMPANIES) REGISTER ED AT DELHI AND BOOKED A PROFIT OF RS.2O,83 CRORES. THE LAYER -2 COMPANIES FURTHER SOLD THE SHARES TO 3 OTHER COMPANIES BELONGING TO MEHTA GROUP, NAGPUR (LAYER-3 COMPANIES) AND BOOKED LOSS OF RS.6.29 CRORES. THESE COMPANIES SOLD THE ENTIRE SHARES AT VARIOUS RATES IN THE RANGE OF RS.4.8 TO RS. IQ.,55 PER SHARE ON 19/11/20 09 FOR TOTAL CONSIDERATION OF RS.36,69,91,250/- TO 14 OTHER COMPANIES I.E. LAYER 4 COMPANIES AND BOOKED A LOSS OF RS.25.18 CRORES. THE LAYER 4 COMPANIES FURTHER SOLD THE SHARES OF PPSL ON 30/11/2009 @ 4 PER SHARES FOR A CONSIDERATION OF RS .18,93,70,000/- INCURRING LOSSES OF RS.17,76,21,250/-. ALL THE ABOVE TRANSACTIONS WERE COMPLETED IN A PE RIOD OF ONE MONTH. SHARES OF PPSL WITH FACE VALUE OF RS.47.34,25,000/- WERE SOLD TO 14 COMPANIES THROUGH INTERMEDIARIES AND LAYER -4 COMPANIES BOOKED HUGE L OSS OF RS. 17,76,21 , 250/-. THE ASSESSEE M/S RISHI REALCON PVT. LTD. (EARLIER KNOWN AS M/S TANISHKA MERCANTILE PVT. LTD.), ONE OF THE LAYER 4 COMPANIES IS THE MAJ OR BENEFICIARY OF THIS TRANSACTION. SINCE ASSESSEE'S PAN WAS NOT IDENTIFIABLE AND ITS B ANK ACCOUNT IN UNION BANK OF INDIA DWARKANATH ROAD, KOLKATA INDICATED KOLKATA AD DRESS, THE ADDL DIT(LNV.), VIDHARBHA, NAGPUR MADE A REFERENCE TO THE DIRECTOR OF INCOME TAX (INV.), KOLKATA. IN RESPONSE TO SUMMONS U/S 131 OF IT. ACT, THE A.R. OF THE ASSESSEE FURNISHED SOURCE OF FUND OF PURCHASE OF SHARES AND STATEMENT OF LOSS IN PPSL SHARES. THE ASSESSEE COMPANY HAS PURCHASED 30,50,000 SHARES OF M/S PPSL FOR RS. 4,25,77,5QO/~ @ RS. 6.35 PER SHARE AND ANOTHER 22,00,000 SHARES @ 10.55 PER SHARE AND SOLD THESE SHARES ON SINCE THE REASONS FOR WIDE VARIATION IN R ATE OF PURCHASE AND SALE OF PPSL SHARES WERE NOT EXPLAINED PROPERLY, A SURVEY U/S 13 3A WAS CONDUCTED ON 26/02/2013. DURING THE COURSE OF SURVEY IT WAS FOUN D THAT ONE SHRI C.S. SARDA, A PRACTICING CA IS THE PERSON WHO HAS THE KNOWLEDGE O F ALL MATTERS RELATED TO THE ASSESSEE COMPANY AND HE CONTROLS THE ACTUAL AFFAIRS OF THE ASSESSEE COMPANY. STATEMENT OF SHRI C.S. SARDA, C.A., WAS RECORDED IN THE ABSENCE OF DIRECTORS. IN HIS STATEMENT, SHRI C.S. SARDA, CA., ADMITTED TO HAVE R ECEIVED CASH OF RS.2,15,77,500/-. IN HIS STATEMENT HE ALSO STATED THAT THE TRANSACTIO NS HAVE TAKEN PLACE ON THE INSTRUCTION AND DIRECTION OF SHRI SHYAM AGARWAL, ON E OF THE DIRECTORS OF M/S TANISHKA MERCANTILE PVT. LTD. (NOW KNOWN AS RISHI R EALCON PVT. LTD.).. IT IS ALSO STATED THAT CASH OF RS.2,15,77,500/- WAS RECEIVED F ROM SHRI SHYAM AGARWAL EQUIVALENT TO CAPITAL LOSS INCURRED. ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 4 IN VIEW OF THE ABOVE AND AS PER THE STATEMENT OF S HRI C.S. SARDA THE UNDERSIGNED HAS REASONS TO BELIEVE THAT THE ASSESSEE COMPANY HA S PROVIDED ACCOMMODATION ENTRIES IN THE BOOKS OF A/CS BY PURCHASING SHARES O F PPSL AT HIGHER RATE I.E. AT RS.4,25,77,500/-AND SELLING THE SAME AT LOWER RATE I.E. AT R$.21OOOQOO/- ON THE DIRECTION OF THE INSTRUCTION AND DIRECTION OF SHRI SHYAM AGARWAL AND THEREBY RECEIVED THE DIFFERENTIAL AMOUNT OF RS.2,15,77,500/ - OUTSIDE THE BOOKS OF ACCOUNTS. THUS, THE SUM OF RS. 2,15,77,5OO/- HAS ESCAPED ASSE SSMENT FOR THE AY 2O10-11. ACCORDINGLY, IN VIEW OF THE PROVISIONS OF SECTION 1 47 & SECTION 149(1) READ WITH SECTION 151(2) OF THE INCOME TAX ACT, 1961, NOTICE U/S J48 IS ISSUED.' 4. THE NOTICE ISSUED UNDER SECTION 148 WAS COMPLIED WITH BY SUBMITTING THAT RETURN FILED ON 26.02.2011 MAY KIND LY BE TAKEN AS RETURN IN RESPONSE TO NOTICE UNDER SECTION 148 T HEREAFTER STATUTORY NOTICES WERE DULY ISSUED AND SERVED OF TH E ACT . THEREAFTER, THE ASSESSEE FILED OBJECTIONS TO THE RE OPENING VIDE SUBMISSIONS DATED 08.01.2015 WHICH WAS DISPOSED OF BY THE AO ON 18.02.2015. ACCORDING TO THE AO, THE ASSESSEE H AS INDULGED IN THE HAWALA ACCOMMODATION ENTRIES. DURING THE YE AR THE ASSESSEE PURCHASED 30,50,000 SHARES FROM AMARUPA ENGINEERING AND MINING PVT. LTD. OF PPSL FOR A CONS IDERATION OF RS.4,25,77,500/- @ RS.6.35 PER SHARE AND ANOTHER 22 ,00,000 SHARES @ RS.10.55 PER SHARE FROM CHINTAMANI AGRO TE CH INDIA LTD. AND SOLD THESE SHARES ON 30.11.2009 TO THREE C OMPANIES NAMELY LEVERAGE FINTRADE PVT. LTD. RS.20,50,000/-, MAHAWIDEH SECURITIES AND INVESTMENT PVT. LTD. RS.10,00,000/- AND SEVEN ELEVEN SALES & MARKETING PVT. LTD. RS.22,00,000/- A T RS.4/- EACH. ACCORDING TO THE AO, THE SAID PURCHASE AND S ALE OF TRANSACTIONS OF PPSL BY THE ASSESSEE ARE NOT GENUIN E AND FABRICATED TO REDUCE THE TAX LIABILITY OF THE COMPA NY WHICH WAS REPLIED BY THE ASSESSEE BY SUBMITTING THAT A SHORT TERM LOSS OF RS.2,15,77,500/- WAS INCURRED WHICH WAS DULY DISCLO SED IN THE BOOKS OF ACCOUNT. THE ASSESSEES CASE HAS BEEN REO PENED ON THE ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 5 STATEMENT OF SHRI C.S. SARDA THAT HE HAS RECEIVED A CASH OF RS.2,15,77,500/- FROM SHRI SHYAM AGGARWAL EQUIVALEN T TO CAPITAL LOSS. THE ASSESSEE SUBMITTED THAT STATEMEN T OF SHRI SHYAM AGGARWAL HAS BEEN RECORDED ON OATH AND HE HAS DENIED THAT HE HAS NOT GIVEN ANY CASH TO SHRI C.S. SARDA. SHRI C.S. SARDA ALSO FILED RETRACTION THAT I HAVE NOT RECEIVE D ANY CASH FROM SHRI SHYAM AGGARWAL. THE ASSESSEE ALSO SUBMITTED T HAT NOTICE ISSUED UNDER SECTION 133(6) TO ALL 5 PARTIES WERE C ONFIRMED STATING THAT TRANSACTIONS WERE GENUINE AND RECORDED IN THE BOOKS OF ACCOUNTS. THE ASSESSEE SUBMITTED BEFORE T HE AO THAT PURCHASE AND SALE OF SHARES IS A BUSINESS AND INDEP ENDENT DECISION AND THEREFORE LOSS CAN NOT BE DISALLOWED O N THE STATEMENT OF THIRD PARTY WHEN NO CROSS EXAMINATION WAS PROVIDED TO THE ASSESSEE. FINALLY, THE AO CAME TO THE CONCLUSION THAT ASSESSEE COMPANY HAS PROVIDED ACCOMMODATION EN TRIES IN THE BOOKS OF ACCOUNTS BY PURCHASING SHARES OF PPSL AT HIGHER RATE OF RS.4,25,77,500/- AND SELLING THE SAME AT LO WER RATE AT RS.2,10,00,000/- ON THE ADVICE OF SHRI C.S. SARDA K EY PERSON OF THE ASSESSEE COMPANY AND THUS , CONCLUDED THAT THE DIFFERENTIAL AMOUNT OF RS.2,15,77,500/- WAS RECEIVED OUTSIDE THE BOOKS OF ACCOUNTS AND ADDED THE SAME TO THE INCOME OF THE AS SESSEE UNDER SECTION 68 OF THE ACT. 5. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DEL ETED THE ADDITION AFTER TAKING INTO CONSIDERATION THE SUBMIS SIONS AND CONTENTIONS OF THE ASSESSEE BY HOLDING THAT ALL THE TRANSACTIONS OF SALES AND PURCHASES OF SHARES WERE NON GENUINE BY OBSERVING AND HOLDING AS UNDER: 7.1. I HAVE CONSIDERED THE STAND OF THE AO AS WELL AS THE SUBMISSION MADE BY THE APPELLANT. IT IS OBSERVED THAT THE APPELLANT HAD DI SCLOSED THE SHORT TERM CAPITAL ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 6 LOSS ON PURCHASE AND SALE OF SHARES OF M/S PURTI SH AKHAR KHARKHANA PVT LTD AS UNDER :- SALE CONSIDERATION AS ON 30/11/2009 RS.2,10,00,000/- LESS : PURCHASE COST AS ON 19/11/2009 RS.(4,25,77,500/-) SHORT TERM CAPITAL LOSS RS.(2,15,77,500/-) ================ IT IS ALSO OBSERVED THAT THE APPELLANT HAS PURCHASE D THE SHARES OF M/S PURTI SHAKHAR KHARKHANA PVT LTD @ 6.35 TO 10.55 PER SHARE ARID SUCH SHARES HAD BEEN SOLD WITHIN A VERY SHORT SPAN OF TIME OF 11 DAYS @ RS. 4/- PER SHARE. IN SIMILAR MANNER, THE APPELLANT HAD DISCLOSED THE SHORT TERM CAPITAL GAIN OF EQUIVALENT AMOUNT ON PURCHASE AND SALE OF SHARES OF M/S SPERM TRACOM PVT LTD AS UNDER :- SALE CONSIDERATION RS. 2,15,77,500/- LESS: PURCHASE COST RS.(2,72,95,000/-) SHORT TERM CAPITAL GAIN RS.2,15,77,500 / - THE APPELLANT HAD PURCHASED THE SHARES OF M/S SPERM TRACOM PVT LTD RS.20/- PER SHARE AND SUCH SHARES HAD ALSO BEEN SOLD WITH A VER Y SHORT TERM SPAN OF TIME OF 25 DAYS @ RS.95.48 PER SHARE. THE NATURE OF TRANSACTIO NS AND HUGE PRICE VARIATION OF THE SHARES OF PRIVATE LIMITED COMPANIES NOT LISTED IN STOCK EXCHANGE PROVES THAT THE TRANSACTIONS OF PURCHASE AND SALES OF ABOVE STATED SHARES ARE NOT GENUINE. THE APPELLANT HAD NOT FURNISHED THE BALANCE SHEETS OF T HE INVESTEE COMPANIES AND HAD NOT PROVIDED ANY BASIS OF VALUATION OF SUCH SHARES TO JUSTIFY THE HUGE PRICE VARIATION BETWEEN THE PURCHASE AND SALE OF SHARES AND THAT TO O WITHIN A SHORT SPAN OF TIME OF 11 TO 25 DAYS, THUS SUCH TRANSACTIONS OF PURCHASE A ND SALE OF SHARES CANNOT BE HELD AS GENUINE TRANSACTIONS. THE APPELLANT'S CONTENTION THAT THERE WAS A POSSIBILITY OF CHANGE IN MANAGEMENT OF THE INVESTEE COMPANIES AND THAT SUCH INVESTMENTS HAD BEEN MADE UNDER THE EXPERT ADVICE OF FINANCIAL CONS ULTANTS WHO HAD INDEMNIFIED THE APPELLANT AGAINST THE LOSSES SEEMS TO BE A MERE STORY AND IS NOT SUPPORTED WITH ANY EVIDENCE. THE PRIMARY ONUS CAST UPON THE ASSESS EE TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND AS THE APPELLANT HAD NOT MADE ANY EFFORT TO DISCHARGE ITS ONUS, THUS SUBMISSIONS OF LD. AR IS HEREBY REJECTED AND E NTIRE SHORT TERM CAPITAL GAIN/LOSS DISCLOSED BY THE APPELLANT ARE HELD AS NON GENUINE TRANSACTIONS. ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 7 7.2. FURTHER, ADDL. COMMISSIONER OF INCOME TAX (INV .), KOLKATA AND DDIT, NAGPUR HAD CARRIED ON THE DETAILED INVESTIGATIONS IN PURTI GROUP OF COMPANIES AND PROVIDED THE FINDING THAT VARIOUS COMPANIES HAS BEEN FLOATED TO BOOK THE BOGUS LOSSES AND TO PROVIDE ACCOMMODATION ENTRIES TO VARIOUS SHELL C OMPANIES OF PURTI GROUP. THE APPELLANT COMPANY HAD BEEN DECLARED AS ONE OF THE L AYER-4 COMPANIES INDULGED IN BOGUS TRANSACTIONS AND PROVIDING THE ACCOMMODATION TRANSACTIONS. IT IS OBSERVED THAT AO HAD ALLOWED SUFFICIENT OPPORTUNITY TO THE A PPELLANT AND HAS ISSUED THE SHOW CAUSE NOTICE TO THE APPELLANT; HOWEVER, THE AP PELLANT EXCEPT FILING THE CONFIRMATION OF ACCOUNT AND I.T ACKNOWLEDGEMENT REC EIPTS OF THE PARTIES HAD NOT FURNISHED OTHER EVIDENCES TO PROVE THE GENUINENESS OF SHARE TRANSACTIONS. THE BALANCE SHEET OF THE APPELLANT DISCLOSES THE SHARE CAPITAL OF RS 15 LACS AND THERE IS NO TURNOVER DISCLOSED BY THE APPELLANT IN IMPUGNED YEAR AND IN EARLIER YEAR. THE APPELLANT HAD NOT BROUGHT ON RECORD ANY EVIDENCES T O JUSTIFY THE GENUINENESS OF THE SHARE TRANSACTIONS AND HAD NOT SUCCESSFULLY REB UTTED TO THE FINDINGS OF INVESTIGATION AUTHORITIES AND THUS IT REMAINS AN UN DISPUTED AND UNCON TROVER TED FACT THAT THE APPELLANT COMPANY IS A CONDUIT SHELL COMPANY AND A MERE FACILITATOR INDULGED IN ACCOMMODATION TRANSACTIONS AND ACCORDIN GLY THE TRANSACTION OF PURCHASE AND SALE OF SHARES OF THE PRIVATE LIMITED COMPANIES NAMED M/S PURTI SHAKHAR KHARKHANA PVT LTD AND M/S SPERM TRACOM PVT LTD ARE HELD AS NON-GENUINE TRANSACTIONS. 7.3. DURING COURSE OF SURVEY CONDUCTED AT PREMISE O F MR. CS. SARDA, HIS STATEMENT ON OATH WAS RECORDED ON 26/03/2013, MR C S SARDA ST ATED THAT HE WAS ASSOCIATED WITH MEHTA GROUP OF COMPANIES AND HE ADMITTED OF HA VING ARRANGED THE ACCOMMODATION ENTRIES TO THE APPELLANT ON DISCLOSIN G THE NON-GENUINE LOSS OF RS.2.15 CRORES. MR. C.S. SAIDA FURTHER STATED THAT HE HAS RECEIVED THE CASH OF RS.2,15,77,500/- AT KOLKATA GIVEN TO HIM BY SHRI SH YAM AGARWAL OF AURANGABAD, MAHARASHTRA. MR. C. 5. SARDA IN REPLY TO Q.8 REPROD UCED IN PAGE 22 OF THE ASSESSMENT ORDER STATED THAT 'TO MAKE UP FOR THE LO SS O/RS.2,25,77,500/- INCURRED IN THE TRANSFER OF SHARES OF M/S.PPSL ACCOMMODATION ENTRIES OF RS.2,15,77,500/- WAS RECEIVED FROM OTHER PRIVATE LIMITED COMPANIES A S INVESTMENTS'. THEREAFTER, MR. C.S. SARDA IN REPLY TO Q.7 REPRODUCED IN PAGE 2 1 STATED ABOUT SOURCE OF FUNDS THAT 'AS CONFIRMED BY ME IN MY EARLIER STATEMENT TH E SOURCES OF FUND FOR PURCHASE OF SHARES OF M/S. PPSL HAS BEEN PROVIDED BY THE MEH TA GROUP THROUGH ITS COMPANIES IN OUR SUBMISSION. THESE SHARES WERE THEN SOLD AGAIN TO THE MEHTA GROUP OF COMPANIES INCURRING A LOSS O/RS.2,15,77,50 0/-.' IN REPLY TO Q.5 AND Q.6, MR. C. S. SARDA STATED THA T HE IS ASSOCIATED WITH MEHTA GROUP AND HAD PURCHASED THE SHARES OF PURTI P OWER & SUGAR LTD FOR RS.4,25,77,500/- AND SOLD AT RS.2.10 CRORES AT A LO SS OF RS.2,15,77,5007- AS PER DIRECTIONS OF MR. MANISH MEHTA, CEO OF MEHTA GROUP. THUS, IT IS OBSERVED THAT MR. C. S. SARDA HAD ACCEPTED THAT HE WAS THE MASTER MIN D FOR BOOKING THE APPELLANT'S NON-GENUINE LOSS OF RS.2,15,77,500/- WHICH IS COMPE NSATED WITH EQUIVALENT PROFIT OF RS.2,15,77,500/- AND SUCH WERE DONE AT THE INSTR UCTIONS OF MEHTA GROUP. THUS, IT STANDS PROVED THAT THE APPELLANT IS A MERE FACILITA TOR AND CONDUIT TO ACCOMMODATE THE NON-GENUINE TRANSACTIONS OF MEHTA GROUP THROUGH MR. C.S. SARDA. 7.4. MR C.S. SARDA VIDE LETTER DATED 20/02/2015 SUB MITTED BEFORE AO ON 26/02/2015 FILED AN AFFIDAVIT ON RETRACTING HIS EAR LIER STATEMENT RECORDED DURING ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 8 SURVEY U/S.133A OF I.T. ACT, 1961. MR. C.S. SARDA, IN RETRACTION AFFIDAVIT, DECLARED THATHE HAD NOT RECEIVED ANY CASH AND HAD NOT RECEIV ED ANY COMMISSION FOR PROVIDING ANY ACCOMMODATION ENTRIES AND HIS EARLIER STATEMENTRECORDED DURING SURVEY WAS GIVEN UNDER MENTAL STRESS, COERCION AND IN CONFUSED STATE OF MIND AND HE PLEADED NOT TO USE HIS EARLIER STATEMENT AGAINST THE APPELLANT.THE AO REJECTED THE RETRACTION OF MR C.S. SARDAFOR THE REASON THAT MR C.S. SARDA IS A PRACTICING CHARTERED ACCOUNTANT AND WAS FULLY AWARE OF THE CON SEQUENCE OF HIS FALSE STATEMENT AND HIS STATEMENT WAS RECORDED IN HIS SOU ND STATE OF MIND. FINALLY, A.O AT PARA-12 AND 21 OF THE ASSESSMENT ORDER, HELD THAT THE APPELLANT, IS A PAP ER COMPANY FORMED FOR ROUTING THE ACCOMMODATION TRANSACTIONS. IT IS ALSO OBSERVED THA T THE STATEMENT OF MR. C.S. SARDA WAS RECORDED DURING SUR VEY U/S,133A ON 26/03/2013 AND HIS RETRACTION HAD BEEN FILED ON 26/02/2015 WHI CH IS AFTER EXPIRY OF 23 MONTHS. THUS, AFFIDAVIT FILED BV MR. C.S. SARDAAFTER SUBSTA NTIAL LAPSE OF TIME AND WITHOUT CORROBORATION HAD LOST ITS VALIDITY AND THUSIS HERE BY REJECTED. ACCORDINGLY, THE FINDING OF AO ON HOLDING THE APPELLANT AS A PAPER C OMPANY USED TO ACCOMMODATE THE NON-GENUINE TRANSACTIONS OF MEHTA GROUP AND REL ATED COMPANIES IS UPHELD. 7.5. THE LD. AR RELIED ON THE REPLIES ALONG WITH CO NFIRMATIONS, BALANCE SHEETS, IT RETURNS FURNISHED BY THE PARTIES FROM/TO WHOM THE P URCHASE AND SALE OF SHARES HAD BEEN TRANSACTED. IT IS ALSO ARGUED THAT THE TRANSAC TIONS HAD DULY BEEN RECORDED IN APPELLANT'S AUDITED BOOKS OF ACCOUNTS AND AO HAD NO T REJECTED THE APPELLANT'S BOOKS OF ACCOUNTS. ON PERUSAL OF REPLIES FURNISHED BY THE PARTIES, IT IS OBSERVED THAT SUCH PARRIES HAD MERELY CONFIRMED THE TRANSACTIONS, BUT HAD FAILED TO JUSTIFY THE GENUINENESS AND FURNISH THE BASIS OF VALUATION OF U NLISTED SHARES. I FIND THAT THE BOOKS OF ACCOUNTS OF THE APPELLANT ARE NOT RELIABLE AND INCLUDES THE ENTRIES OF BOGUS PURCHASE AND SALE OF SHARES OF PRIVATE LIMITE D COMPANIES WHICH ARE NON- GENUINE TRANSACTIONS AND ARE NOT SUBSTANTIATED WITH DOCUMENTARY EVIDENCES, THUS I REJECT THE APPELLANT'S BOOKS OF ACCOUNTS U/S 145(3) OF THE IT. ACT, 1961. 7.6. IN VIEW OF THE ABOVE STATED PARAGRAPHS, IT IS HELD THAT THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES ARE NON-GENUINE TRANSAC TIONS SINCE: (A) THE APPELLANT DISCLOSED THE SHORT TERM CAPITAL LOSS ON PURCHASE AND SALE OF SHARES OF M/S. PURTI SAKHAR KARKHANA PVT LTD OF RS. 2,15,77,500/- AND ALSO DISCLOSED THE SHORT TERM CAPITAL GAIN OF EQUIVALENT FIGURE ON PURCHASE AND SALE OF SHARES OF M/S. SPERM TRACOM PVT. LTD. OF RS.2,15,77,500/-, TH EREBY NO SURPLUS CAPITAL GAIN HAD BEEN DISCLOSED IN THE P&L ACCOUNT; (B) THE PURCHASE AND SALE OF SHARES HAD BEEN MADE O F PRIVATE LIMITED AND CLOSELY HELD COMPANIES WITH HUGE PRICE VARIATION IN VERY SHORT SPAN OF TIME OF 11 DAYS TO 25 DAYS; (C) NO JUSTIFICATION AND DOCUMENTARY EVIDENCE HAD BEEN FURNISHED ON RECORD TO PROVE THE PURCHASE PRICE AND SALE PRICE OF SHARES O F THE UNLISTED COMPANIES; (D) THE DETAILED INVESTIGATIONS CONDUCTED BY ADDL D DIT, UNIT-3(2), KOLKATA AND ADDL. DDIT, UNIT VIDHARBHA NAGPUR REVEALED THAT APP ELLANT IS A LAYER-4 COMPANY INVOLVED IN PROVIDING THE ACCOMMODATION TRANSACTION AND BOOKING BOGUS LOSSES FOR PURTI GROUP; ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 9 (E) STATEMENT OF MR. CS. SARDA WAS RECORDED U /S.133A AND HE ADMITTED OF HAVING PROVIDED ACCOMMODATION ENTRIES ON PROVIDING NON GENUINE PROFIT/LOSS ON PURCHASE AND SALE OF SHARES TO THE APPELLANT. THE R ETRACTION STATEMENT OF MR C S SARDA MADE AFTER SUBSTANTIAL LAPSE OF TIME OF 23 MO NTHS AND WITHOUT CORROBORATION IS REJECTED. (F) THE BALANCE SHEET OF THE APPELLANT DISCLOSES TH E SHARE CAPITAL OF RS 15 LACS AND THERE IS NO TURNOVER DISCLOSED BY THE APPELLANT IN IMPUGNED YEAR AND IN EARLIER YEAR. THE BOOKS OF ACCOUNTS OF THE APPELLANT ARE NOT RELI ABLE AND ARE REJECTED SINCE THE BOOKS OF ACCOUNTS DISCLOSES THE BOGUS PURCHASE AND SALE OF UNLISTED SHARES OF PRIVATE LIMITED COMPANIES; (G) NO CONCRETE EVIDENCE HAD BEEN BROUGHT ON RECORD TO JUSTIFY THE GENUINENESS OF PURCHASE AND SALE OF SHARES. IN VIEW OF THE ABOVE FINDING, I HOLD THAT THE APPEL LANT COMPANY IS INVOLVED IN PROVIDING ACCOMMODATION ENTRIES BEING LAYER-4 COMPA NY AND SUCH FACT HAD ALSO BEEN ESTABLISHED HELD BY THE INVESTIGATING AUTHORIT IES AND THUS THE ENTIRE TRANSACTIONS OF PURCHASE AND SALE OF SHARES OF THE UNLISTED COMPANIES AND SHORT TERM CAPITAL GAIN/LOSS ARE HELD AS NON-GENUINE. 7.7. THE LD. AR ALTERNATIVELY ARGUED THAT IN CASE T HE APPELLANT IS HELD AS A MERE PAPER COMPANY AND IS HELD AS CONDUIT OR FACILITATOR FOR PROVIDING THE ACCOMMODATION ENTRIES, THEN THE ADDITION U/S.68 OF RS. 2,15,77,500/- CANNOT BE MADE IN HANDS OF THE APPELLANT. I FIND CONSIDERABLE FORCE IN SUCH ARGUMENT OF LD. AR. IT IS TRUE THAT THERE IS NO EVIDENCE BROUGHT ON RECORD TO JUSTIFY THAT THE APPELLANT'S FUNDS HAD BEEN UTILISED OR DEPLOYED FOR SOURCING THE NON-GENUINE TRANSACTIONS OF PURCHASE AND SALE OF SHARES. ON THE CONTRARY, MR. C. S. SARDA IN HIS STATEMENT HAD CATEGORICALLY STATED THAT THE SOURCE OF FUNDS HAS BEEN PROVIDED BY THE MEHTA GROUP OF COMPANIES AND HE FURTHER STATED THAT SUCH LOSS OF RS.2,15,77,500/- WAS BOOKED UNDER THE INSTRUCTION O F CEO OF MEHTA GROUP AND SOURCE OF FUNDS HAD BEEN PROVIDED BY MEHTA GROUP TH ROUGH ITS COMPANIES. IT IS A TRITE LAW THAT WHEN A STATEMENT IS TO BE CONSIDERED IN TOTALITY AND IT IS NOT APPROPRIATE TO PICK A PORTION OF THE STATEMENT TO S UIT THE PARTY RELIED UPON. RELIANCE IS PLCED ON THE DECISION OF NAVJIVAN OIL M ILLS VS. CIT (252 ITR 417 GUJ HIGH COURT), GLASS LINES EQUIPMENTS CO. LTD VS= CIT (253 ITR 454 GUJ HIGH COURT) AND MEHTA PARIKH & CO VS. CIT (30 ITR 181 SC). THUS, ON CE THE APPELLANT IS HELD AS A PAPER COMPANY AND IS MERE CONDUIT AND FACILITATOR T O PROVIDE BOGUS PROFIT/LOSS FOR OTHER ENTITIES, THEN ENTIRE BOGUS PROFIT AS WELL AS LOSS IS TO BE IGNORED AND THE INCOME EARNED BY THE APPELLANT TO PROVIDE THE ACCOM MODATION ENTRIES COULD BE BROUGHT TO TAX. THUS, THE ADDITION MADE IN ASSESSME NT ORDER U/S.68 OF RS.2,15,77,500/- CANNOT BE SUSTAINED FULLY, AS BEIN G OBSERVED IN SUBSEQUENT PARAGRAPHS. 7.8. THE NEXT QUESTION THAT ARISES WHICH NEEDS TO B E ADDRESSED IS WITH REGARD TO THE QUANTUM OF SUPPRESSED INCOME THAT THE APPELLANT WOU LD HAVE EARNED ON INDULGED IN ACCOMMODATION TRANSACTIONS. IT IS OBSERVED THAT APPELLANT HAS DISCLOSED THE BOGUS LOSS ON PURCHASE AND SALE OF SHARE OF M/S PUR TI SAKHAR KHARKHANA PVT LTD OF ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 10 RS.2,15,77,500/- AND ALSO HAS DISCLOSED BOGUS PROFI T AN PURCHASE AND SALE OF SHARES OF M/S SPERM TRACOM PVT LTD OF SAME AMOUNT OF RS.2, 15,77,500/- AND HAD SET-OFF THE ENTIRE BOGUS LOSS WITH BOGUS PROFITS, THEREBY D ISCLOSING NIL INCOME IN PROFIT ARID LOSS ACCOUNT THE BALANCE SHEET OF THE APPELLANT DIS CLOSES THE SHARE CAPITAL OF RS 15 LACS AND THERE IS NO TURNOVER DISCLOSED BY THE APPE LLANT IN IMPUGNED YEAR AND IN EARLIER YEAR. THE DETAILED INVESTIGATIONS CONDUCTED BY THE INVESTIGATION WING HAD ESTABLISHED THAT THE APPELLANT COMPANY AS ONE OF TH E IAYER-4 COMPANIES OUT OF THE VARIOUS COMPANIES INDULGED IN ACCOMMODATION TRANSAC TIONS MAINLY FOR PURTI GROUP OF COMPANIES. THE BANK STATEMENTS OF THE APPELLANT REVEALS SEVERAL CHEQUE RECEIPTS AND CHEQUE PAYMENTS MADE TO SQUARE-UP THE NON-GENUI NE SHARE TRANSACTIONS. THE LD. AR HOD ARGUED THAT IN SUCH TYPES OF ACCOMMODATI ON TRANSACTIONS, THE PROFIT MARGIN IS VERY LOW RANGING FROM 0.10% TO 0.35% AND ON THIS PROPOSITION RELIED ON JUDICIAL DECISIONS OF THE HON'BLE ITATS. (I) IN THE CASE OF GOLD STAR FINVEST (P.) LTD VS. I TO [(33 TAXMANN.COM 129 (MUMBAI)] HON'BLE MUMBAI ITAT DECIDED THAT :- IN SUCH A CASE, THE THEORY OF THE ASSESSING OFFICE R TO TREAT THE ENTIRE DEPOSIT AS UNEXPLAINED CASH CREDITS, CANNOT BE ACCE PTED IN THE LIGHT OF ASSESSMENT ORDERS IN THE CASE OF BENEFICIARIES AND ALSO IN THE LIGHT OF THE FACT THAT ASSESSEE IS ONLY CONCERNED WITH THE COMMI SSION EARNED ON PROVIDING ACCOMMODATION ENTRIES. SINCE THE ASSESSEE ITSELF HAS DECLARED THE COMMISSION ON TURNOVER OF 0.15 PER CENT WHICH IS MO RE THAN THE PERCENTAGE CONSIDERED TO BE REASONABLE BY THE TRIBUNAL' IN THE CASES OF ITO VS. PALRESHA & CO. [IT APPEAL NO.1640 (BOM) OF 1982] AND KIRAN & CO. V. ITO [IT APPEAL NO.3604 (BOM) OF 1983] THE SAME SHOULD BE ACCEPTED. ACCORDINGLY, THE COMMISSION DECLARED BY THE ASSESSEE IS ACCEPTED AND THE ORDER OF THE COMMISSIONER (APPEALS) IN THIS REGARD IS SET ASIDE. (II) IN CASE OF MANOJ AGGARWAL VS. DCIT[(117TT J 145 (DE!HI)(SB)] HON'BLE DELHI ITAT DECIDED THAT:- 'ASSESSEE HIMSELF HAVING ADMITTED THAT HE RECEIVED COMMISSION @ 0.50 PAISE FOR GIVING ACCOMMODATION ENTRIES, CIT(A) WAS JUSTIFIED IN ESTIMATING THE NET COMMISSION INCOME AT 0.35 PAISE AFTER ALLOW ING 0.15 PAISE FOR EXPENSES.' (III) IN THE CASE OF SANJAY KUMAR GARG VS. AC IT [(134 ITD 82 (DELHI)], HON'BLE DELHI ITAT DECIDED THAT :- 'THE ASSESSMENTS WERE REOPENED FOR THIS PURPOSE ONL Y. THE CIT(A) HAS GIVEN A FINDING OF FACT THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES AND, THEREFORE, THE AMOUNTS D EPOSITED IN THE ACCOUNT OF DUMMY CONCERNS WERE TO BE TREATED AS TOT AL RECEIPTS ON WHICH COMMISSION WAS TO BE DETERMINED. THEREFORE, ONLY CO MMISSION CAN BE DETERMINED ON THE DEPOSITS MADE IN THE BANK ACCOUNT S OF THE DUMMY CONCERNS. THEREFORE, NO INFIRMITY IS FOUND IN THE O RDER PASSED BY THE CIT(A) THAT THE AMOUNT DEPOSITED IN THE ACCOUNT OF DUMMY C ONCERNS CANNOT BE TREATED AS INCOME OF THE ASSESSEE. THEREFORE, THE C IT(A) IS JUSTIFIED IN TREATING THE CASH DEPOSITED IN VARIOUS BANK ACCOUNT S CONTROLLED AND ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 11 OPERATED BY THE ASSESSEE AS THE TURNOVER OF THE ACC OMMODATION ENTRY BUSINESS AND COMMISSION INCOME HAS TO BE ESTIMATED THEREON.' THE ABOVE STATED JUDICIAL DECISIONS RELIED BY LD. A R THOUGH PARTLY APPLICABLE TO FACTS OF APPELLANT'S CASE; HOWEVER THERE CANNOT BE A RULE OF THUMB TO ESTIMATE THE SUPPRESSED INCOME ON NON-GENUINE TRANS ACTIONS. THEREFORE, KEEPING IN VIEW OF THE PRESENT FACTS OF THE CASE AS WELL AS JUDICIAL PRONOUNCEMENTS REFERRED ABOVE, IT WILL BE REASONABL E TO ESTIMATE THE SUPPRESSED INCOME @ 2% ON NON- GENUINE TRANSACTIONS OF ENTRY FACILITIES. ACCORDINGLY, I HOLD THAT THE ESTIMATION OF SUPPRESS ED INCOME @ 2% OF GROSS TRANSACTION VALUE AS A PROFIT OF APPELLANT FOR INDU LGING IN THE ACCOMMODATION ENTRIES. THE GROSS SALE CONSIDERATION OF SHARES OF M/S PURTI SAKHAR KHARKHANA PVT. LTD OF RS.2,10,00,000/- AND M /S SPERMTRACOM PVT LTD IS OF RS.2,72,15,000/- TOTALLING RS.4,82,95,000 /-. THUS THE ADDITION IS RESTRICTED AT RS.9,65,900/- (2% OF RS.4,82,95,000/- ). ACCORDINGLY, THE ADDITION IS SUSTAINED TO THE TUNE OF RS.9,65,900/- (RS.2,15,77,500/- - RS.9,65,900/-) AND DELETE THE BALANCE ADDI TION OF RS.2,06,L1,600/- IS DIRECTED TO BE DELETED. 6. THE LD CIT(A), HOWEVER, DIRECTED THE AO TO ADD 2 % OF THE GROSS TRANSACTIONS AMOUNT OF RS.4,82,95,000/- ARRIV ED AT BY ADDING TOGETHER RS.2,10,00,000/- AND RS.2,72,15,000 /- THEREBY DIRECTING THE ADDITION TO BE MADE AT RS.9,65,900/-. THE LD. CIT(A) OBSERVED THAT ALL THESE TRANSACTIONS WERE NO N-GENUINE AND HAWALA ENTRIES AND ONLY INCOME ON THE SAID TRAN SACTION IS TO BE BROUGHT TO TAX AND THUS ESTIMATED THE INCOME ON THE GROSS VALUE OF TRANSACTIONS. 7. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE US THAT LD. CIT(A) HAS PASSED A VERY REASONED ORDER AFTER HOLD ING THAT ALL THESE TRANSACTIONS WERE NON GENUINE AND THAT ONLY I NCOME OF SUCH GROSS VALUE OF TRANSACTIONS WERE TO BE ASSESSE D TO TAX AND NOT THE DIFFERENTIAL AMOUNT AS DONE BY THE AO. THE LD. A.R. RELIED HEAVILY ON THE ORDER OF LD. CIT(A) TO THIS E XTENT , HOWEVER, HE PRAYED BEFORE THE BENCH THAT ON SUCH HAWALA TRAN SACTIONS THE ONLY COMMISSION IS CHARGED WHICH RANGES FROM 0. 5 TO 1% WHEREAS IN THE ASSESSEES CASE, IT WAS DIRECTED 2% AND THEREFORE ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 12 THE ADDITION AS DIRECTED BY THE LD. CIT(A) IS EXCES SIVE AND MAY BE REDUCED TO 1% ON THE GROSS VALUE OF TRANSACTIONS . 8. THE LD. D.R. VEHEMENTLY SUBMITTED BEFORE US THAT ASSESSEE HAS UNDOUBTEDLY INDULGED IN ACCOMMODATION ENTRIES W HICH WAS PROVED BEYOND DOUBT DURING THE COURSE OF SURVEY CON DUCTED AT THE PREMISES OF SHRI C.S. SARDA AND DURING HIS STAT EMENT RECORDED ON 26.03.2013 SHRI C.S. SARDA ADMITTED TO HAVE ARRANGED ACCOMMODATION ENTRIES TO THE ASSESSEE. TH E LD. D.R. SUBMITTED THAT THOUGH SHRI C.S. SARDA RETRACTED HIS STATEMENT VIDE LETTER DATED 20.02.2015 IN WHICH HE SAID THAT HE HAS NOT RECEIVED ANY MONEY AND ALSO HAD NOT RECEIVED ANY CO MMISSION FOR PROVIDING ACCOMMODATION ENTRIES AS THE EARLIER STATEMENT WAS GIVEN UNDER MENTAL STRESS, COERCION AND IN A CO NFUSED STATE OF MIND. THE LD. D.R. CONTENDED THAT MERE RETRACTI ON WAS AN AFTERTHOUGHT AND SHOULD NOT BE ACCEPTED AND THEREFO RE ADDITION AS MADE BY THE AO SHOULD BE SUSTAINED BY SETTING AS IDE THE ORDER OF THE LD. CIT(A). THE LD. D.R. FURTHER SUBM ITTED THAT THE FINDING OF LD. CIT(A) THAT THE BOGUS LOSS DISCLOSED BY THE ASSESSEE ON PURCHASE AND SALE OF SHARES OF M/S PURT I SHAKHAR KHARKHANA PVT. LTD. OF RS.2,15,77,500/- AND SIMILAR LY IT HAS DISCLOSED BOGUS PROFIT OF PURCHASE AND SALE OF SHAR ES OF M/S. SPERM TRACOM PVT. LTD. OF THE EQUAL AMOUNT AND SET OFF THE ENTIRE AMOUNT WITH THE BOGUS LOSS THEREBY DISCLOSIN G THE NIL INCOME. THE LD. D.R. OBJECTING TO THE CONCLUSION O F THE LD. CIT(A) SUBMITTED THAT THE ASSESSEE HAS MADE PROFIT WHICH WAS SOUGHT TO BE SET OFF BY THE BOGUS LOSS GENERATED AN D THEREFORE THE ORDER OF LD. CIT(A) MAY BE REVERSED. ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 13 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE IM PUGNED ORDER UNDER CHALLENGE. IN THE CROSS APPEALS, THE A SSESSEE HAS CHALLENGED THE SUSTENANCE OF ADDITION TO THE TUNE O F RS.9,65,900/- BEING 2% OF GROSS VALUE OF TRANSACTIO NS OF SALE AND PURCHASE OF SHARES BY LD. CIT(A) IN ORDER TO BR ING THE INCOME OF THE SUCH BOGUS TRANSACTIONS TO TAX AND TH E REVENUE HAS CHALLENGED THE DELETION OF ADDITION OF BOGUS LO SS OF RS.2,15,77,500/-. THE SAID ADDITION WAS BASED UPON THE STATEMENT RECORDED OF SHRI C.S. SARDA A CHARTERED A CCOUNTANT WHO WAS ENGAGED IN ARRANGING THE ACCOMMODATION ENTR IES. IT IS PERTINENT TO NOTE THAT SHRI C.S. SARDA ADMITTED DUR ING THE COURSE OF SURVEY ON 26.02.2013 THAT HE HAS ARRANGED ACCOMMODATION ENTRIES FOR THE ASSESSEE AND THEREBY ASSESSEE HAS DISCLOSED NON GENUINE LOSS OF RS.2,15,77,500/- BY RECEIVING EQUIVALENT AMOUNT FROM SHRI SHYAM AGGARWAL. THE A SSESSEE HAS DISCLOSED SHORT TERM CAPITAL LOSS OF SALE AND P URCHASE OF SHARES OF M/S PURTI SHAKHAR KHARKHANA PVT. LTD. OF RS.2,15,77,500/- BY SHOWING SHORT TERM CAPITAL GAIN ON SALE AND PURCHASE OF SHARES FROM M/S. SPERM TRACOM PVT. LTD. OF RS.2,15,77,500/- THEREBY MAKING THE INCOME AT NIL. SHRI C.S. SARDA HAS RETRACTED HIS STATEMENT BEFORE THE AO AND STATED THAT THE SAID STATEMENT WAS MADE UNDER DURESS AND MENTAL PRESSURE AND IS DEVOID OF ANY TRUTH. THE LD. CIT(A) DELETED THE ADDITION MADE BY THE AO BY HOLDING THAT BOTH THE TRANSACTION S OF SALE AND PURCHASE OF SHARES WERE BOGUS ACCOMMODATION ENT RIES AND THEREFORE THE ONLY INCOME ON SUCH TRANSACTIONS ON G ROSS VALUE OF TRANSACTIONS NEEDS TO BE ASSESSED AND ESTIMATED. A CCORDINGLY, LD. CIT(A) ESTIMATED 2% ON SUCH TRANSACTIONS. AFTE R PERUSING ITA NO.1152/M/2017 ITA NO.1659/M/2017 M/S. RISHI REALCON P. LTD. 14 THE ORDER OF LD. CIT(A) WE OBSERVE THAT LD. CIT(A) HAS PASSED A VERY REASONED ORDER AFTER TAKING INCOME ACCOUNT ALL THE FACTS OF THE CASE AND THE RETRACTION OF STATEMENT OF SHRI C. S. SARDA. WE DO NOT FIND ANY REASON TO DISTURB THE ORDER OF LD. CIT(A) OR INTERFERE THEREIN AS THERE IS NO MATERIAL BEFORE US TO TAKE A DIFFERENT VIEW THAN TAKEN BY THE LD. CIT(A). ACCOR DINGLY, WE UPHOLD THE ORDER OF LD. CIT(A) AND BOTH THE APPEALS OF THE ASSESSEE AS WELL AS REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.03.2019. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 14.03.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.