Surya Agrotech Infrastructure Ltd, New Delhi V. ACIT, Central circle-8, New Delhi

ITA 1158/DEL/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6674 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 13-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Bogus Share capital; Gift; Income from undisclosed sources; Search and seizure; Share purchase agreement; Principle of natural justice; Source of fund; Question of law; Accommodation entries; Block assessment; Onus to prove; Revised return
• Section: 133A; 153A; 250; 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH G GG G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT AND AND AND AND MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA ITAITA ITA NO NONO NO . .. . 1156/DEL/2019 1156/DEL/2019 1156/DEL/2019 1156/DEL/2019 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2013 2013 2013 2013 - -- - 14 1414 14 M/S SURYA PROCESSED FOOD M/S SURYA PROCESSED FOOD M/S SURYA PROCESSED FOOD M/S SURYA PROCESSED FOOD PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., 2 22 2 ND NDND ND FLOOR, FLOOR, FLOOR, FLOOR, 19, LOCA 19, LOCA 19, LOCA 19, LOCAL SHOPPING COMPLEX, L SHOPPING COMPLEX, L SHOPPING COMPLEX, L SHOPPING COMPLEX, NEAR PUSHPA BHAWAN, NEAR PUSHPA BHAWAN, NEAR PUSHPA BHAWAN, NEAR PUSHPA BHAWAN, MADANGIR, MADANGIR, MADANGIR, MADANGIR, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 062. 110 062. 110 062. 110 062. PAN : AAKCS7174G. PAN : AAKCS7174G. PAN : AAKCS7174G. PAN : AAKCS7174G. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -8, 8,8, 8, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ITA ITA ITA ITA NO NONO NO S.1157/DEL/2019 & 1158/DEL/2019 S.1157/DEL/2019 & 1158/DEL/2019 S.1157/DEL/2019 & 1158/DEL/2019 S.1157/DEL/2019 & 1158/DEL/2019 ASSESSMENT YEA ASSESSMENT YEA ASSESSMENT YEA ASSESSMENT YEA R RR R S SS S : : : : 2013 2013 2013 2013 - -- - 14 & 2014 14 & 2014 14 & 2014 14 & 2014 - -- - 15 1515 15 M/S SURYA AGROTECH M/S SURYA AGROTECH M/S SURYA AGROTECH M/S SURYA AGROTECH INFRASTRUCTURE LIMITED, INFRASTRUCTURE LIMITED, INFRASTRUCTURE LIMITED, INFRASTRUCTURE LIMITED, 2 22 2 ND NDND ND FLOOR, FLOOR, FLOOR, FLOOR, 19, LOCAL SHOPPING COMPLEX, 19, LOCAL SHOPPING COMPLEX, 19, LOCAL SHOPPING COMPLEX, 19, LOCAL SHOPPING COMPLEX, NEAR PUSHPA BHAWAN, NEAR PUSHPA BHAWAN, NEAR PUSHPA BHAWAN, NEAR PUSHPA BHAWAN, MADANGIR, MADANGIR, MADANGIR, MADANGIR, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 062. 110 062. 110 062. 110 062. PAN : AALCS3053M. PAN : AALCS3053M. PAN : AALCS3053M. PAN : AALCS3053M. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -8, 8,8, 8, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT S BY : SHRI VED JAIN, ADVOCATE AND SHRI HIMANSHU AGARWAL, CA. RESPONDENT BY : SHRI S.S. RANA, CIT - DR. DATE OF HEARING : 16.04.2019 16.04.2019 16.04.2019 16.04.2019 DATE OF PRONOUNCEMENT : 07.05.2019 07.05.2019 07.05.2019 07.05.2019 ORDER ORDER ORDER ORDER PER G PER G PER G PER G.D. AGRAWAL, .D. AGRAWAL, .D. AGRAWAL, .D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT : :: :- -- - ITA NOS.1156 TO 1158/DEL/2019 2 THESE APPEALS BY THE ASSESSEES FOR THE ASSESSMENT YEARS 2013- 14 AND 2014-15 ARE DIRECTED AGAINST THE ORDER OF LEA RNED CIT(A)-24, NEW DELHI-24, NEW DELHI DATED 7 TH JANUARY, 2019. 2. IN ALL THESE APPEALS, COMMON GROUNDS HAVE BEEN RAISE D. THEREFORE, THEY ARE ALL BEING TAKEN UP TOGETHER FOR CONSIDERATION. THE GROUNDS OF APPEAL RAISED IN THE ABOVE APPEALS READ AS U NDER :- ITA NO.1156/DEL/2019 : ITA NO.1156/DEL/2019 : ITA NO.1156/DEL/2019 : ITA NO.1156/DEL/2019 :- -- - 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, NE W DELHI [THE LD.CIT(A)] , HAS ERRED IN UPHOLDING TH E ORDER OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 08, NEW DELHI (THE LD. ASSESSING OFFICER) IN UPHOLDIN G THE ADDITION OF RS.31,00,50,001 MADE U/S 68 OF THE ACT ON ACCOUNT OF RECEIPT OF SHARE CAPITAL. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A), HAS ERRED IN UPHOLDING THE ORDER OF THE LD. ASSESSING OFFICER IN UPHOLDING THE ADDITION OF RS.77,51,250/- MADE U/S 37 OF THE ACT ON ACCOUNT OF ALLEGED EXPENDITURE FOR COMMISSION INCURRED BY THE APPLICANT COMPANY FOR CHANNELIZING THE ABOVE SHARE CAPITAL/SHARE PREMIUM. ITA NO.115 ITA NO.115 ITA NO.115 ITA NO.1157 77 7/DEL/2019 : /DEL/2019 : /DEL/2019 : /DEL/2019 :- -- - 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, NE W DELHI [THE LD.CIT(A)], HAS ERRED IN UPHOLDING THE ORDER OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 08, NEW DELHI (THE LD. ASSESSING OFFICER) IN UPHOLDIN G THE ADDITION OF RS.2,60,00,000/- MADE U/S 68 OF THE ACT ON ACCOUNT OF RECEIPT OF SHARE CAPITAL. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A), HAS ERRED IN UPHOLDING THE ORDER OF THE LD. ASSESSING OFFICER IN UPHOLDING THE ADDITION OF ITA NOS.1156 TO 1158/DEL/2019 3 RS.6,50,000/- MADE U/S 37 OF THE ACT ON ACCOUNT OF AL LEGED EXPENDITURE FOR COMMISSION INCURRED BY THE APPLICANT COMPANY FOR CHANNELIZING THE ABOVE SHARE CAPITAL/SHAR E PREMIUM. ITA NO.1158 ITA NO.1158 ITA NO.1158 ITA NO.1158/DEL/2019 : /DEL/2019 : /DEL/2019 : /DEL/2019 :- -- - 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, NE W DELHI [THE LD.CIT(A)] , HAS ERRED IN UPHOLDING TH E ORDER OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 08, NEW DELHI (THE LD. ASSESSING OFFICER) IN UPHOLDIN G THE ADDITION OF RS.13,31,50,000 MADE U/S 68 OF THE ACT ON ACCOUNT OF RECEIPT OF SHARE CAPITAL. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A), HAS ERRED IN UPHOLDING THE ORDER OF THE LD. ASSESSING OFFICER IN UPHOLDING THE ADDITION OF RS.33,28,750/- MADE U/S 37 OF THE ACT ON ACCOUNT OF ALLEGED EXPENDITURE FOR COMMISSION INCURRED BY THE APPLICANT COMPANY FOR CHANNELIZING THE ABOVE SHARE CAPITAL/SHARE PREMIUM. 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED BY T HE LEARNED COUNSEL THAT BOTH THE ABOVE ASSESSEE COMPANIES ARE PART O F GROUP COMPANIES OF PRIYA GOLD GROUP. THAT SEARCH AND SEIZU RE PROCEEDINGS UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961 WERE CONDUCTED ON 16 TH DECEMBER, 2014 IN THE CASE OF PRIYA GOLD GROUP AND I TS GROUP COMPANIES WHICH INCLUDED BOTH THE COMPANIES UNDER APP EAL BEFORE US. DURING THE COURSE OF SEARCH, STATEMENT OF SHRI SHEKHAR AGARWAL, DIRECTOR OF M/S SURYA FOOD & AGRO LIMITED, WHICH IS T HE FLAGSHIP COMPANY OF THE GROUP, WAS RECORDED UNDER SECTION 132 (4). IN THE SAID STATEMENT, HE ACCEPTED THAT THE SAID GROUP HAS EARNED UNACCOUNTED INCOME WHICH HAS BEEN ROUTED AS BOGUS SHARE CAPITAL DU RING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2013-14 AND 2014-15. HE ALSO ADMITTED THAT THE SAME INCOME WOULD BE SURRENDERE D IN THE RESPECTIVE ASSESSMENT YEARS. THE GROUP HAS SURRENDERED THE ENTIRE ITA NOS.1156 TO 1158/DEL/2019 4 UNDISCLOSED INCOME OF THE GROUP IN ITS FLAGSHIP COMPAN Y M/S SURYA FOOD & AGRO LIMITED BY FILING PETITION BEFORE THE S ETTLEMENT COMMISSION. THE ADDITIONAL INCOME DISCLOSED BEFORE THE SETTLEMENT COMMISSION WAS `49,12,73,399/-. IN PARAGRAPH 12 & 13 OF THE APPLICATION BEFORE THE SETTLEMENT COMMISSION, IT WAS C LEARLY MENTIONED THAT THE PROFIT MADE OUTSIDE BOOKS BY THE A PPLICANT WAS UTILIZED FOR MAKING INVESTMENT IN THE SHARE CAPITAL O F THE GROUP CONCERNS. THE ASSESSEE HAS ALSO GIVEN THE NAME OF BOTH TH E COMPANIES UNDER APPEAL AND THE AMOUNT OF SHARE CAPIT AL. THAT THE SETTLEMENT COMMISSION HAS ADMITTED THE ABOVE APPLICAT ION AND ALSO PASSED THE FINAL ORDER IN WHICH AS AGAINST THE INCOME D ISCLOSED AT `49.12 CRORES, THE INCOME SETTLED WAS `55.77 CRORES. T HE ASSESSEE AS WELL AS REVENUE BOTH HAS ACCEPTED THE ORDER OF THE SE TTLEMENT COMMISSION AND WHICH HAS BECOME FINAL. IN VIEW OF THE ABOVE, NO FURTHER ADDITION FOR UNEXPLAINED SHARE CAPITAL IN TH E HANDS OF ABOVE TWO ASSESSEES IS CALLED FOR OTHERWISE IT WOULD BE DOUBLE T AXATION OF THE SAME INCOME. 4. LEARNED CIT-DR ARGUED AT LENGTH. HE ALSO FURNISHE D WRITTEN SUBMISSION, WHICH IS BEING REPRODUCED BELOW :- IN THE ABOVE CASE, IT IS HUMBLY SUBMITTED AS FOLLOWS: 1. IN STATEMENT ON OATH RECORDED U/S 132(4) ON 17.12.201 4, SH. SHEKHAR AGARWAL SURRENDERED UNDISCLOSED INCOME OF RS. 31 CR. IN F.Y 2012-13 AND RS. 15.91 CR. IN F.Y 20 14-15. 2. IN REVISED RETURN FILED ON 30.08.2016 ASSESSEE INCREASED AN AMOUNT OF RS. 2.6 CR. IN A.Y 2013-14 AND RS. 28.40 CR. IN A.Y 2014-15 ON ACCOUNT OF SHARE APPLICATION MONE Y. HOWEVER, NO TAXES WERE PAID THEREON. IN STATEMENT ON OATH RECORDED U/S 131(1) ON 25.10.201 6, SH. MANOJ AGGARWAL, DIRECTOR OF ASSESSEE COMPANY, STAT ED THAT ALL TAXES WILL BE PAID BY 30.09.2016 BUT WERE NOT PAID. ITA NOS.1156 TO 1158/DEL/2019 5 3 33 3. .. . DETAILED INVESTIGATION WAS MADE WITH REGARD TO INVESTMENT MADE IN M/S SUBH SHREE INVESTMENT MANAGEMENT P. LTD. AND M/S NEELKANTH VINCOM P. LTD.(PAGES 4 TO 19 OF AO) WHICH SHOWED THAT THE ENTIR E INVESTMENT WAS ON ACCOUNT OF ACCOMMODATION ENTRIES. 4 44 4. .. . AS STATED IN PARA 4.9 OF AO , STATEMENT OF DIRECTORS SH . NAVIN AGGARWAL AND SH. MANOJ AGGARWAL WERE RECORDED IN WHICH THEY STATED THAT SH. SHEKHAR AGARWAL WAS RESPONSIBLE FOR MANAGING THE FINANCE AND ACCOUNTS OF ASSESSEE GROUP. 5 55 5. .. . STATEMENT OF DIRECTORS MS. BEENA AGGARWAL, CHHAVI AGGARWAL AND NIDHI AGGARWAL WERE RECORDED IN WHICH THEY STATED THAT THEY WERE DUMMY DIRECTORS(PAGES 20 AND 21 OF AO). 6 66 6. .. . AS STATED IN PARA 4.12 OF AO, VARIOUS INCRIMINATING DOCUMENTS WERE SEIZED FROM PREMISES OF THE ASSESSEE. 7 77 7. .. . AS STATED ON PAGE 30 OF AO, SH. SHEKHAR AGARWAL ADMIT TED THAT UNACCOUNTED INCOME EARNED THROUGH UNDISCLOSED SOURCES WAS ROUTED TO THE ASSESSEE COMPANY. NO STATUTORY REGISTER, MINUTES OF MEETING, SHARE CERTIFICATES AND OT HER DOCUMENTS WERE PRODUCED. 8 88 8. .. . AS STATED IN PARA 4.19 OF AO, BANK STATEMENTS OF INVESTO R COMPANIES REFLECTED IMMEDIATE INTRODUCTION AND WITHDRAWAL OF FUNDS. 9 99 9. .. . AS STATED IN PAGE 37 OF AO, SUMMONS WERE ISSUED TO SH. SUDHIR SATNALIWALA BUT THERE WAS NO COMPLIANCE. INVESTIGATION WING KOLKATA EXAMINED SH. DEBASHISH DUTT A WHO ADMITTED PROVIDING ACCOMMODATION ENTRY TO PRIYA GOLD GROUP OF COMPANIES. 10 1010 10. .. . AS STATED IN PAGE 38 OF AO, STATEMENT OF DUMMY DIRECTORS SH BIJAY KUMAR AGGARWAL & SH. PRAKASH DOSHI WAS RECORDED IN WHICH THEY ADMITTED THAT THEY WERE DIRECTORS OF ENTRY OPERATOR SH DEBASHISH DUTTA FOR EAR NING COMMISSION. SH PANKAJ AGARWAL ALSO ADMITTED THAT HE WA S A DUMMY DIRECTOR. ITA NOS.1156 TO 1158/DEL/2019 6 11 1111 11. .. . AS STATED IN PAGE 46 OF AO, VARIOUS INCRIMINATING DOCUMENTS PERTAINING TO PRE-PLANNING WERE SEIZED. 12 1212 12. .. . VARIOUS BAN INQUIRIES WERE CONDUCTED AS DISCUSSED ON PAGES 47 TO 54 OF ASSESSING OFFICER. 13 1313 13. .. . AS STATED IN PAGE 55 OF AO, STATEMENT U/S 131(1) OF DUMMY DIRECTORS SH. DINESH KUMAR PANDEY WAS RECORDED IN WHICH HE ADMITTED THAT COMPANIES IN WHICH HE OR H IS WIFE WERE DIRECTORS ARE DUMMY COMPANIES. 14 1414 14. .. . THE ASSESSEE HAS FAILED TO FURNISH JUSTIFICATION FOR RECEIVING SUCH HUGE SHARE PREMIUM. IT IS HUMBLY SUBMITTED THAT THE FOLLOWING DECISIONS MAY KINDLY BE CONSIDERED WITH REGARD TO VALIDITY OF STATEMENT RECORDED U/S 132(4) OF I.T.ACT: 1 11 1. .. . B KISHORE KUMAR B KISHORE KUMAR B KISHORE KUMAR B KISHORE KUMAR VS CIT (62 TAXMANN.COM 215, 234 VS CIT (62 TAXMANN.COM 215, 234 VS CIT (62 TAXMANN.COM 215, 234 VS CIT (62 TAXMANN.COM 215, 234 TAXMAN 771) TAXMAN 771) TAXMAN 771) TAXMAN 771) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE SUPREME COURT DISMISSED SLP AGAINST HIGH COURT'S ORDER WHERE IT WAS HELD THAT SINCE ASSESSEE HIMSELF HAD STATED IN SWORN STATEMENT DURING SEARCH AND SEIZURE ABOUT HIS UNDISCLOSED INCOME, TAX WAS TO BE LEVIED ON BASIS OF ADMISSION WITHOUT SCRUTINIZING DOCUMENTS. B KISHORE KUMAR VS CIT (52 TAXMANN.COM 449) MADRAS HIG H B KISHORE KUMAR VS CIT (52 TAXMANN.COM 449) MADRAS HIG H B KISHORE KUMAR VS CIT (52 TAXMANN.COM 449) MADRAS HIG H B KISHORE KUMAR VS CIT (52 TAXMANN.COM 449) MADRAS HIG H COURT CONFIRMED (COPY ENCLOSED) COURT CONFIRMED (COPY ENCLOSED) COURT CONFIRMED (COPY ENCLOSED) COURT CONFIRMED (COPY ENCLOSED) 2 22 2. .. . BHAGIRATH AGGARWAL VS CIT (31 TAXMANN.COM 274, 215 BHAGIRATH AGGARWAL VS CIT (31 TAXMANN.COM 274, 215 BHAGIRATH AGGARWAL VS CIT (31 TAXMANN.COM 274, 215 BHAGIRATH AGGARWAL VS CIT (31 TAXMANN.COM 274, 215 TAXMAN 229, 351 ITR 143) TAXMAN 229, 351 ITR 143) TAXMAN 229, 351 ITR 143) TAXMAN 229, 351 ITR 143) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE DELHI HIGH COURT HELD THAT AN ADDITIO N IN ASSESSEE'S INCOME RELYING ON STATEMENTS RECORDED DURING SEARCH OPERATIONS CANNOT BE DELETED WITHOUT PROVING STATEMENTS TO BE INCORRECT. 3 33 3. .. . CIT VS M. S. AGGARWAL [2018] 93 TAXMANN.COM 24 CIT VS M. S. AGGARWAL [2018] 93 TAXMANN.COM 24 CIT VS M. S. AGGARWAL [2018] 93 TAXMANN.COM 24 CIT VS M. S. AGGARWAL [2018] 93 TAXMANN.COM 247 (DEL HI) 7 (DELHI) 7 (DELHI) 7 (DELHI) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE DELHI HIGH COURT HELD THAT WHERE IN C OURSE OF BLOCK ASSESSMENT PROCEEDINGS, AO MADE ADDITION TO ASSESSEE'S UNDISCLOSED INCOME IN RESPECT OF GIFT, IN VIEW O F FACT THAT ASSESSEE DID NOT EVEN KNOW DONOR PERSONALLY AN D, MOREOVER, HE HIMSELF IN PRESENCE OF HIS CHARTERED ACCOUNTANT HAD MADE A STATEMENT UNDER SEC. 132(4) ITA NOS.1156 TO 1158/DEL/2019 7 ADMITTING THAT SAID GIFT WAS BOGUS, IMPUGNED ADDITION WAS TO BE CONFIRMED. 4 44 4. .. . SMT DAYAWANTI VS CIT [2016] 75 TAXMANN.COM 308 SMT DAYAWANTI VS CIT [2016] 75 TAXMANN.COM 308 SMT DAYAWANTI VS CIT [2016] 75 TAXMANN.COM 308 SMT DAYAWANTI VS CIT [2016] 75 TAXMANN.COM 308 (DELHI)/[2017] 245 TAXMAN 293 (D (DELHI)/[2017] 245 TAXMAN 293 (D (DELHI)/[2017] 245 TAXMAN 293 (D (DELHI)/[2017] 245 TAXMAN 293 (DELHI)/[2017] 390 IT R 496 ELHI)/[2017] 390 ITR 496 ELHI)/[2017] 390 ITR 496 ELHI)/[2017] 390 ITR 496 (DELHI)/[2016] 290 CTR 361 (DELHI) (COPY ENCLOSED) (DELHI)/[2016] 290 CTR 361 (DELHI) (COPY ENCLOSED) (DELHI)/[2016] 290 CTR 361 (DELHI) (COPY ENCLOSED) (DELHI)/[2016] 290 CTR 361 (DELHI) (COPY ENCLOSED) WHERE HONBLE DELHI HIGH COURT HELD THAT WHERE INFE RENCES DRAWN IN RESPECT OF UNDECLARED INCOME OF ASSESSEE WERE PREMISED ON MATERIALS FOUND AS WELL AS STATEMENTS RECORDED BY ASSESSEE'S SON IN COURSE OF SEARCH OPERATIONS AND ASSESSEE HAD NOT BEEN ABLE TO SHOW AS TO HOW ESTIMATION MADE BY ASSESSING OFFICER WAS ARBITRARY OR UNREASONABLE, ADDITIONS SO MADE BY ASSESSING OFFICER BY REJECTING BOOKS OF ACCOUNT WAS JUSTIFIED. 5 55 5. .. . M/S PEBBLE I M/S PEBBLE I M/S PEBBLE I M/S PEBBLE INVESTMENT AND FINANCE LTD VS ITO (2017 NVESTMENT AND FINANCE LTD VS ITO (2017 NVESTMENT AND FINANCE LTD VS ITO (2017 NVESTMENT AND FINANCE LTD VS ITO (2017- -- -TIOL TIOL TIOL TIOL- -- - 238 238 238 238- -- -SC SCSC SC- -- -IT) IT)IT) IT) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE SUPREME COURT DISMISSED SLP CHALLENGING THE JUDGMENT, WHEREBY THE HIGH COURT HAD HELD THAT STATEMENT MADE U/S 133A COULD BE RELIED UPON FOR PURPOSES OF ASSESSMENT, IN ABSENCE OF ANY CONTRARY EVIDENCE OR EXPLANATION AS TO WHY SUCH STATEMENT MADE WAS NOT CREDIBLE. M/S PEBBLE INVESTMENT AND FINANCE LTD VS ITO (2017 M/S PEBBLE INVESTMENT AND FINANCE LTD VS ITO (2017 M/S PEBBLE INVESTMENT AND FINANCE LTD VS ITO (2017 M/S PEBBLE INVESTMENT AND FINANCE LTD VS ITO (2017- -- -TIOL TIOL TIOL TIOL- -- - 188 188 188 188- -- -HC HCHC HC- -- -MUM MUM MUM MUM- -- -IT) BOMBAY HIGH COURT CONFIRMED (COPY IT) BOMBAY HIGH COURT CONFIRMED (COPY IT) BOMBAY HIGH COURT CONFIRMED (COPY IT) BOMBAY HIGH COURT CONFIRMED (COPY ENCLOSED) ENCLOSED) ENCLOSED) ENCLOSED) 6 66 6. .. . GREENVIEW GREENVIEW GREENVIEW GREENVIEW RESTAURANT VS ACIT [2003] 133 TAXMAN 4 RESTAURANT VS ACIT [2003] 133 TAXMAN 4 RESTAURANT VS ACIT [2003] 133 TAXMAN 4 RESTAURANT VS ACIT [2003] 133 TAXMAN 432 32 32 32 (GAUHATI)/[2003] 263 ITR 169 (GAUHATI)/[2003] 185 C TR 651 (GAUHATI)/[2003] 263 ITR 169 (GAUHATI)/[2003] 185 C TR 651 (GAUHATI)/[2003] 263 ITR 169 (GAUHATI)/[2003] 185 C TR 651 (GAUHATI)/[2003] 263 ITR 169 (GAUHATI)/[2003] 185 C TR 651 (GAUHATI) (COPY ENCLOSED) (GAUHATI) (COPY ENCLOSED) (GAUHATI) (COPY ENCLOSED) (GAUHATI) (COPY ENCLOSED) FROM FACTS, IT WAS CLEAR THAT THERE WAS A DELAY ON T HE PART OF THE APPELLANT AND ITS PARTNER IN RETRACTING THE STATEMENTS RECORDED. THE ATTENTION OF THE COURT HAD A LSO NOT BEEN DRAWN TO ANY MATERIAL ON RECORD TO ESTABLISH THAT ANY ATTEMPT WAS MADE ON BEHALF OF THE APPELLANT TO P ROVE THE ALLEGATION OF INDUCEMENT, THREAT OR COERCION TH ROUGH THE WITNESSES. HAVING EXAMINED THE IMPUGNED ORDERS RENDERED BY THE TRIBUNAL WITH THE REASONINGS IN SUPPO RT OF ITS FINDING AGAINST THE COMPLAINT OF THREAT, INDUCEME NT OR COERCION, NO GOOD AND SUFFICIENT REASON WAS FOUND TO D IFFER FROM IT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, H AVING REGARD TO THE MATERIALS ON RECORD, THE APPELLANT HAD FAILED TO ESTABLISH THAT THE STATEMENTS OF ITS PARTNER HAD BEEN RECORDED IN THE COURSE OF THE SEARCH BY USING COERCION , THREAT OR INDUCEMENT. HENCE, THE CONTENTIONS ADVANCE D BY THE APPELLANT IN THAT REGARD WERE DISMISSED AND THE ITA NOS.1156 TO 1158/DEL/2019 8 CONCLUSION OF THE TRIBUNAL ON THAT COUNT WAS AFFIRMED. [PARA 9] 7 77 7. .. . RAJ HANS TOWERS (P.) LTD. VS CIT (56 TAXMANN.COM 67, 230 RAJ HANS TOWERS (P.) LTD. VS CIT (56 TAXMANN.COM 67, 230 RAJ HANS TOWERS (P.) LTD. VS CIT (56 TAXMANN.COM 67, 230 RAJ HANS TOWERS (P.) LTD. VS CIT (56 TAXMANN.COM 67, 230 TAXMAN 567, 373 ITR 9) (COPY ENCLOSED) TAXMAN 567, 373 ITR 9) (COPY ENCLOSED) TAXMAN 567, 373 ITR 9) (COPY ENCLOSED) TAXMAN 567, 373 ITR 9) (COPY ENCLOSED) WHERE HONBLE DELHI HIGH COURT HELD THAT WHERE ASSESSEE HAD NOT OFFERED ANY SATISFACTORY EXPLANATION REGARDIN G SURRENDERED AMOUNT BEING NOT BONA FIDE AND IT WAS ALSO NOT BORNE OUT IN ANY CONTENTIONS RAISED BEFORE LOWER AUTHORITIES, ADDITIONS SO MADE AFTER ADJUSTING EXPENDIT URE WERE JUSTIFIED (SURVEY CASE). 8 88 8. .. . PCIT VS AVINASH KUMAR SETIA [2017] 81 TAXMANN.COM 47 6 PCIT VS AVINASH KUMAR SETIA [2017] 81 TAXMANN.COM 47 6 PCIT VS AVINASH KUMAR SETIA [2017] 81 TAXMANN.COM 47 6 PCIT VS AVINASH KUMAR SETIA [2017] 81 TAXMANN.COM 47 6 (DE (DE (DE (DELHI) LHI) LHI) LHI) WHERE HONBLE DELHI HIGH COURT HELD THAT WHERE ASSESSEE SURRENDERED CERTAIN INCOME BY WAY OF DECLARATIO N AND WITHDRAW SAME AFTER TWO YEARS WITHOUT ANY SATISFACTORY EXPLANATION, IT COULD NOT BE TREATED AS B ONA FIDE AND, HENCE, ADDITION WOULD SUSTAIN. 9 99 9. .. . ACIT VS HUKUM CHAND JAIN ACIT VS HUKUM CHAND JAIN ACIT VS HUKUM CHAND JAIN ACIT VS HUKUM CHAND JAIN [2010] 191 TAXMAN 319 [2010] 191 TAXMAN 319 [2010] 191 TAXMAN 319 [2010] 191 TAXMAN 319 (CHHATTISGARH) (CHHATTISGARH) (CHHATTISGARH) (CHHATTISGARH) WHEN ASSESSEE DID NOT RETRACT HIS STATEMENT IMMEDIATELY AFTER SEARCH AND SEIZURE WAS OVER AND IN RETURN ALSO NO EXPLANATION WAS OFFERED FOR SURRENDER OF UNDISCLOSED INCOME AT TIME OF SEARCH AND SEIZURE OPERATIONS UNDER SECTION 132(4), IT COULD BE SAID TH AT ASSESSEE HAD FAILED TO DISCHARGE ONUS OF PROVING THAT CONFESSION MADE BY HIM UNDER SECTION 132(4) WAS AS A RESULT OF INTIMIDATION, DURESS AND COERCION OR THAT SAM E WAS MADE AS A RESULT OF MISTAKEN BELIEF OF LAW OR FACTS . IN THE ABOVE CASE, IT IS HUMBLY SUBMITTED THAT THE FOLLOWING DECISIONS MAY KINDLY BE CONSIDERED WITH REGA RD TO ADDITION MADE U/S 68 OF I.T.ACT: 1. PCIT VS NRA IRON & STEEL (P.) LTD. [2019] 103 TAXMA NN.COM PCIT VS NRA IRON & STEEL (P.) LTD. [2019] 103 TAXMA NN.COM PCIT VS NRA IRON & STEEL (P.) LTD. [2019] 103 TAXMA NN.COM PCIT VS NRA IRON & STEEL (P.) LTD. [2019] 103 TAXMA NN.COM 48 (SC) 48 (SC) 48 (SC) 48 (SC) (COPY ENCLOSED (COPY ENCLOSED (COPY ENCLOSED (COPY ENCLOSED) )) ) WHERE HONBLE SUPREME COURT REVERSE ORDER OF LOWER AUTHORITIES HOLDING THAT WHERE THERE WAS FAILURE OF ASSESSEE TO ESTABLISH CREDIT WORTHINESS OF INVESTOR COMPANIES, ASSESSING OFFICER WAS JUSTIFIED IN PASSING ASSESSMENT ORDER MAKING ADDITIONS UNDER SECTION 68 FOR SHARE CAPITAL / PREMIUM RECEIVED BY ASSESSEE COMPANY. MERELY BECAUSE ASSESSEE COMPANY HAD FILED ALL PRIMARY EVIDENCE, IT COULD NOT BE SAID THAT ONUS ON ASSESSEE TO ESTABLISH CREDIT WORTHINESS OF INVESTOR COMPANIES STOOD DISCHARGED. ITA NOS.1156 TO 1158/DEL/2019 9 2. PCIT VS NDR P PCIT VS NDR P PCIT VS NDR P PCIT VS NDR PROMOTERS PVT LTD (2019 ROMOTERS PVT LTD (2019 ROMOTERS PVT LTD (2019 ROMOTERS PVT LTD (2019- -- -TIOL TIOL TIOL TIOL- -- -172 172 172 172- -- -HC HCHC HC- -- -DEL DEL DEL DEL- -- - IT) IT)IT) IT) WHERE HONBLE DELHI HIGH COURT HELD THAT A CASE INVO LVING MAKE-BELIEVE PAPER WORK TO CAMOUFLAGE THE BOGUS NATU RE OF THE TRANSACTIONS IS TO BE TREATED AS UNEXPLAINED CR EDIT U/S 68. 3 33 3. .. . ITO VS SYNERGY FINLEASE PVT. LTD ITO VS SYNERGY FINLEASE PVT. LTD ITO VS SYNERGY FINLEASE PVT. LTD ITO VS SYNERGY FINLEASE PVT. LTD (ITA NO.4778/DEL/2013) (ITA NO.4778/DEL/2013) (ITA NO.4778/DEL/2013) (ITA NO.4778/DEL/2013) WHERE HONBLE ITAT DELHI HELD THAT WHERE INVESTOR OF SHARE APPLICATION MONEY HAD NOMINAL INCOME AND CHEQUES HAD BEEN RECEIVED JUST BEFORE ISSUE OF CHEQUES FOR SHARE APPLICATION MONEY, CREDITWORTHINESS WAS NOT PROVED AND ADDITION U/S 68 WAS SUSTAINED. 4. PREM CASTINGS (P.) LTD. VS CIT PREM CASTINGS (P.) LTD. VS CIT PREM CASTINGS (P.) LTD. VS CIT PREM CASTINGS (P.) LTD. VS CIT [2017] 88 TAXMANN.COM 189 [2017] 88 TAXMANN.COM 189 [2017] 88 TAXMANN.COM 189 [2017] 88 TAXMANN.COM 189 (ALLAHABAD) (ALLAHABAD) (ALLAHABAD) (ALLAHABAD) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE ALLAHABAD HIGH COURT HELD THAT ADDITI ONS U/S 68 WARRANT BEING SUSTAINED WHERE THE IDENTITIES & CREDITWORTHINESS OF INVESTORS IN THE ASSESSEE COMPANY ARE NOT ESTABLISHED BY THE ASSESSEE & ARE ALSO PROVED INCORRECT BY THE DEPARTMENT'S ASSESSEE INFORMATION SYSTEM. IN SUCH CIRCUMSTANCES, ASSESSEE CANNOT RESIST THE ADDITIONS ON GROUNDS THAT IT DID NOT HAVE OPPORTUNITY TO CROSS-EXAMINE RELEVANT WITNESSES. AN ASSESSEE COMPANY CANNOT HIDE BEHIND THE SHELL OF A CORPORATE ENTITY T O FEIGN IGNORANCE REGARDING THE IDENTITY OF ANY PERSON WHO I NVESTS IN ITS SHARE CAPITAL. PREM CASTINGS (P.) LTD. VS CIT PREM CASTINGS (P.) LTD. VS CIT PREM CASTINGS (P.) LTD. VS CIT PREM CASTINGS (P.) LTD. VS CIT 2018 2018 2018 2018- -- -TIOL TIOL TIOL TIOL- -- -274 274 274 274- -- -SC SCSC SC- -- -IT IT IT IT (COPY (COPY (COPY (COPY ENCLOSED) ENCLOSED) ENCLOSED) ENCLOSED) WHERE HONBLE SUPREME COURT HELD AS FOLLOWS: WE DO NOT FIND ANY MERIT IN THIS PETITION. THE SPE CIAL LEAVE PETITION IS ACCORDINGLY DISMISSED. 5 55 5. .. . CIT VS MAF ACADEMY (P.) LTD (361 ITR 258) (COPY ENCL OSED) CIT VS MAF ACADEMY (P.) LTD (361 ITR 258) (COPY ENCL OSED) CIT VS MAF ACADEMY (P.) LTD (361 ITR 258) (COPY ENCL OSED) CIT VS MAF ACADEMY (P.) LTD (361 ITR 258) (COPY ENCL OSED) WHERE HONBLE DELHI HIGH COURT HELD THAT WHERE ASSESSEE , A PRIVATE LIMITED COMPANY, SOLD ITS SHARES TO UNRELATE D PARTIES AT A HUGE PREMIUM AND THEREUPON WITHIN SHORT SPAN OF TIME THOSE SHARES WERE PURCHASED BACK EVEN AT A LOSS, SHARE TRANSACTIONS IN QUESTION WERE TO BE REGARDED AS BOGUS AND, THUS, AMOUNT RECEIVED FROM SAID TRANSACTIONS WAS TO BE ADDED TO ASSESEE'S TAXABLE INCOME UNDER SECTION 68 IT WAS HELD AS FOLLOWS: ITA NOS.1156 TO 1158/DEL/2019 10 53. 53. 53. 53. IN CONTRAST TO THE ABOVE JUDGMENTS, IN THE PRESENT CASE, THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IN TH E FACTUAL MATRIX, WE HAVE HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO DISCHARGE THE INITIAL ONUS AND HAS NOT BE EN ABLE TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTION. THOU GH, IN OUR CONSIDERED OPINION, NONE OF THE ABOVE JUDGMEN TS, REFERRED TO BY THE ASSESSEE RESPONDENT, ARE APPLICABLE I N THE FACTS OF THE PRESENT CASE AND IN VIEW OF THE FIND INGS RECORDED BY US HEREINABOVE. 54. 54. 54. 54. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT T HE ASSESSEE HAS NOT DISCHARGED THE ONUS SATISFACTORILY AND THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE JUSTIFIE D AND SUSTAINABLE. 6 66 6. .. . CIT VS NAVODAYA CASTLE PVT LTD [2014] 367 ITR 306 (DE L) CIT VS NAVODAYA CASTLE PVT LTD [2014] 367 ITR 306 (DE L) CIT VS NAVODAYA CASTLE PVT LTD [2014] 367 ITR 306 (DE L) CIT VS NAVODAYA CASTLE PVT LTD [2014] 367 ITR 306 (DE L) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE DELHI HIGH COURT ACCEPTED THAT SINCE T HE ASSESSEE WAS UNABLE TO PRODUCE THE DIRECTORS AND THE PRINCIPAL OFFICERS OF THE SIX SHAREHOLDER COMPANIES AND ALSO THAT AS PER THE INFORMATION AND DETAILS COLLECTED BY THE ASSESSING OFFICER FROM THE CONCERNED BANK, THE ASSESSING OFFICER HAD OBSERVED THAT THERE WERE GENUINE CONCERN S ABOUT IDENTITY, CREDITWORTHINESS OF SHAREHOLDERS AS WEL L AS GENUINENESS OF THE TRANSACTIONS. 20. NOW, WHEN WE GO TO THE ORDER OF THE TRIBUNAL I N THE PRESENT CASE, WE NOTICE THAT THE TRIBUNAL HAS MERELY REPRODUCED THE ORDER OF THE COMMISSIONER OF INCOME-TA X (APPEALS) AND UPHELD THE DELETION OF THE ADDITION. I N FACT, THEY SUBSTANTIALLY RELIED UPON AND QUOTED THE DECISION OF ITS CO-ORDINATE BENCH IN THE CASE OF MAF ACADEMY P. L TD., A DECISION WHICH HAS BEEN OVERTURNED BY THE DELHI HIGH COURT, VIDE ITS JUDGMENT IN CIT V. MAF ACADEMY P. LT D. [2014] 206 DLT 277 ; [2014] 361 ITR 258 (DELHI)). IN THE IMPUGNED ORDER IT IS ACCEPTED THAT THE ASSESSEE WAS UNABLE TO PRODUCE DIRECTORS AND PRINCIPAL OFFICERS OF THE SIX SHAREHOLDER COMPANIES AND ALSO THE FACT THAT AS PER THE INFORMATION AND DETAILS COLLECTED BY THE ASSESSING OFFIC ER FROM THE CONCERNED BANK, THE ASSESSING OFFICER HAS OBSERVED THAT THERE WERE GENUINE CONCERNS ABOUT IDENT ITY, CREDITWORTHINESS OF SHAREHOLDERS AS WELL AS GENUINENESS OF THE TRANSACTIONS. ITA NOS.1156 TO 1158/DEL/2019 11 21. IN VIEW OF THE AFORESAID DISCUSSION, WE FEEL THAT THE MATTER REQUIRES AN ORDER OF REMIT TO THE TRIBUNAL FO R FRESH ADJUDICATION KEEPING IN VIEW THE AFORESAID CASE LAW. NAVODAYA CASTLE PVT LTD VS CIT ([2015] 56 TAXMANN.CO M 1 NAVODAYA CASTLE PVT LTD VS CIT ([2015] 56 TAXMANN.CO M 1 NAVODAYA CASTLE PVT LTD VS CIT ([2015] 56 TAXMANN.CO M 1 NAVODAYA CASTLE PVT LTD VS CIT ([2015] 56 TAXMANN.CO M 18 8 8 8 (SC)/[2015] 230 TAXMAN 268 (SC)) (COPY ENCLOSED) (SC)/[2015] 230 TAXMAN 268 (SC)) (COPY ENCLOSED) (SC)/[2015] 230 TAXMAN 268 (SC)) (COPY ENCLOSED) (SC)/[2015] 230 TAXMAN 268 (SC)) (COPY ENCLOSED) SLP OF ASSESSEE DISMISSED BY HONBLE SUPREME COURT. 7. KONARK STRUCTURAL ENGINEERING (P.) LTD. VS DCIT KONARK STRUCTURAL ENGINEERING (P.) LTD. VS DCIT KONARK STRUCTURAL ENGINEERING (P.) LTD. VS DCIT KONARK STRUCTURAL ENGINEERING (P.) LTD. VS DCIT [201 8] 96 [2018] 96 [2018] 96 [2018] 96 TAXMANN.COM 255 (SC) TAXMANN.COM 255 (SC) TAXMANN.COM 255 (SC) TAXMANN.COM 255 (SC) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE ASSESSEE-COMPANY RECEIVED CERTAIN AMOUNT AS SHARE CAPITAL FROM VARIOUS SHAREHOLDERS, IN VIEW OF FA CT THAT SUMMONS TO SHAREHOLDERS UNDER SECTION 131 COULD NOT BE SERVED AS ADDRESSES WERE NOT AVAILABLE, AND, MOREOVER, THOSE SHAREHOLDERS WERE FIRST TIME ASSESSEES AND WERE NOT EARNING ENOUGH INCOME TO MAKE DEPOSITS IN QUESTION, ADDITION MADE BY ASSESSING OFFICER UNDER SECTION 68 WAS TO BE CONFIRMED; SLP DISMISSED. KONARK STRUCTURAL ENGINEERING (P.) LTD. KONARK STRUCTURAL ENGINEERING (P.) LTD. KONARK STRUCTURAL ENGINEERING (P.) LTD. KONARK STRUCTURAL ENGINEERING (P.) LTD. VS DCIT VS DCIT VS DCIT VS DCIT [2018] 90 [2018] 90 [2018] 90 [2018] 90 TAXMANN.COM 56 (BOMBAY) TAXMANN.COM 56 (BOMBAY) TAXMANN.COM 56 (BOMBAY) TAXMANN.COM 56 (BOMBAY) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE BOMBAY HIGH COURT HELD THAT WHERE ASSESSEE-COMPANY RECEIVED CERTAIN AMOUNT AS SHARE CAPITAL FROM VARIOUS SHAREHOLDERS, IN VIEW OF FACT THA T SUMMONS SERVED TO SHAREHOLDERS UNDER SECTION 131 WERE UNSERVED WITH REMARK THAT ADDRESSEES WERE NOT AVAILABLE , AND, MOREOVER, THOSE SHAREHOLDERS WERE FIRST TIME ASSESSEES AND WERE NOT EARNING ENOUGH INCOME TO MAKE DEPOSITS IN QUESTION, IMPUGNED ADDITION MADE BY AO UND ER SEC. 68, WAS TO BE CONFIRMED. 10 1010 10 PCIT VS BIKRAM SINGH [2017] 85 TAXMANN.COM 104 PCIT VS BIKRAM SINGH [2017] 85 TAXMANN.COM 104 PCIT VS BIKRAM SINGH [2017] 85 TAXMANN.COM 104 PCIT VS BIKRAM SINGH [2017] 85 TAXMANN.COM 104 (DELHI)/[2017] 250 TAXMAN 273 (DELHI)/[2017] 399 IT R 407 (DELHI)/[2017] 250 TAXMAN 273 (DELHI)/[2017] 399 IT R 407 (DELHI)/[2017] 250 TAXMAN 273 (DELHI)/[2017] 399 IT R 407 (DELHI)/[2017] 250 TAXMAN 273 (DELHI)/[2017] 399 IT R 407 (D (D(D (DELHI) (COPY ENCLOSED) ELHI) (COPY ENCLOSED) ELHI) (COPY ENCLOSED) ELHI) (COPY ENCLOSED) WHERE HONBLE DELHI HIGH COURT HELD THAT EVEN IF A TRANSACTION OF LOAN IS MADE THROUGH CHEQUE, IT CANNOT BE PRESUMED TO BE GENUINE IN THE ABSENCE OF ANY AGREEMEN T, SECURITY AND INTEREST PAYMENT. MERE SUBMISSION OF PAN CARD OF CREDITOR DOES NOT ESTABLISH THE AUTHENTICITY O F A HUGE LOAN TRANSACTION PARTICULARLY WHEN THE ITR DOES NOT INSPIRE SUCH CONFIDENCE. MERE SUBMISSION OF ID PROOF AND THE FACT THAT THE LOAN TRANSACTIONS WERE THROUGH TH E BANKING CHANNEL, DOES NOT ESTABLISH THE GENUINENESS OF TRANSACTIONS. LOAN ENTRIES ARE GENERALLY MASKED TO PUMP IN BLACK MONEY INTO BANKING CHANNELS AND SUCH PRACTICES CONTINUE TO PLAGUE INDIAN ECONOMY. ITA NOS.1156 TO 1158/DEL/2019 12 8. PRATHAM TELECOM INDIA PVT LTD VS DCIT (2018 PRATHAM TELECOM INDIA PVT LTD VS DCIT (2018 PRATHAM TELECOM INDIA PVT LTD VS DCIT (2018 PRATHAM TELECOM INDIA PVT LTD VS DCIT (2018- -- -TIOL TIOL TIOL TIOL- -- -1983 1983 1983 1983- -- -HC HCHC HC- -- - MUM MUM MUM MUM- -- -IT) IT) IT) IT) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE BOMBAY HIGH COURT HELD THAT MERE PRODUCTION OF PAN NUMBERS & BANK STATEMENTS IS SUFFICIEN T ENOUGH TO DISCHARGE THE BURDEN ON TAXPAYER TO ESCAPE THE REALMS OF SECTION 68. 9. J J DEVELOPMENT PVT LTD VS CIT (2018 J J DEVELOPMENT PVT LTD VS CIT (2018 J J DEVELOPMENT PVT LTD VS CIT (2018 J J DEVELOPMENT PVT LTD VS CIT (2018- -- -TIOL TIOL TIOL TIOL- -- -395 395 395 395- -- -SC SCSC SC- -- -IT) IT) IT) IT) (COPY (COPY (COPY (COPY ENCLOSED) ENCLOSED) ENCLOSED) ENCLOSED) WHERE HONBLE SUPREME COURT HELD THAT WHEN THE ASSESSEE FAILS TO PROVIDE A CONVINCING EXPLANATION WITH REGAR D TO THE CASH CREDIT BEFORE THE AO AND THE SAME WAS ACCEPTED B Y THE ITAT BEING A FACT FINDING BODY, THE SAME CANNOT BE DISPUTED FURTHER. APEX COURT DISMISSED THE SPECIAL LEAV E TO PETITION FILED BY THE ASSESSEE. 10. CIT VS NIPUN BUILDERS & DEVELOPERS (P.) LTD (30 CIT VS NIPUN BUILDERS & DEVELOPERS (P.) LTD (30 CIT VS NIPUN BUILDERS & DEVELOPERS (P.) LTD (30 CIT VS NIPUN BUILDERS & DEVELOPERS (P.) LTD (30 TAXMANN.COM 292, 214 TAXMAN 429, 350 ITR 407, 256 TAXMANN.COM 292, 214 TAXMAN 429, 350 ITR 407, 256 TAXMANN.COM 292, 214 TAXMAN 429, 350 ITR 407, 256 TAXMANN.COM 292, 214 TAXMAN 429, 350 ITR 407, 256 CTR 34) CTR 34) CTR 34) CTR 34) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE DELHI HIGH COURT HELD THAT WHERE ASSESSEE FAILED TO PROVE IDENTITY AND CAPACITY OF SUBSCRIBER COMPANIES TO PAY SHARE APPLICATION MONEY, AMOUNT SO RECEIVED WAS LIABLE TO BE TAXED UNDER SECTION 68. IT WAS HELD AS FOLLOWS: 12. 12. 12. 12. A PERUSAL OF THE ORDER OF THE TRIBUNAL SHOWS THAT IT HAS GONE ON THE BASIS OF THE DOCUMENTS SUBMITTED BY THE ASSESSEE BEFORE THE AO AND HAS HELD THAT IN THE LIGHT O F THOSE DOCUMENTS, IT CAN BE SAID THAT THE ASSESSEE HAS ESTABLISHED THE IDENTITY OF THE PARTIES. IT HAS FURTHER BEEN OBSERVED THAT THE REPORT OF THE INVESTIGATION WING CA NNOT CONCLUSIVELY PROVE THAT THE ASSESSEE'S OWN MONIES WERE BROUGHT BACK IN THE FORM OF SHARE APPLICATION MONEY. AS NOTED IN THE EARLIER PARAGRAPH, IT IS NOT THE BURDEN OF THE AO TO PROVE THAT CONNECTION. THERE HAS BEEN NO EXAMINATION BY THE TRIBUNAL OF THE ASSESSMENT PROCEEDINGS IN ANY DETAIL IN ORDER TO DEMONSTRATE THA T THE ASSESSEE HAS DISCHARGED ITS ONUS TO PROVE NOT ONLY THE IDENTITY OF THE SHARE APPLICANTS, BUT ALSO THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS. NO ATTEMPT WAS MADE BY THE TRIBUNAL TO SCRATCH THE SURFACE AND PROBE THE DOCUMENTARY EVIDENCE IN SOME DEPTH, IN THE LIGHT OF THE CONDUCT OF THE ASSESSEE AND OTHER SURROUNDING CIRCUMSTANCES IN ORDER TO SEE WHETHER THE ASSESSEE HAS DISCHARGED ITS ONUS UNDER SECTION 68. WITH ITA NOS.1156 TO 1158/DEL/2019 13 RESPECT, IT APPEARS TO US THAT THERE HAS ONLY BEEN A MECHANICAL REFERENCE TO THE CASE-LAW ON THE SUBJECT WITHOUT ANY SERIOUS APPRAISAL OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 13. 13. 13. 13. WE, THEREFORE, ANSWER THE SUBSTANTIAL QUESTION OF LAW FRAMED BY US IN THE NEGATIVE, IN FAVOUR OF THE REVEN UE AND AGAINST THE ASSESSEE. THE APPEAL OF THE REVENUE IS ALLOW ED WITH NO ORDER AS TO COSTS. 11. CIT VS NOVA PROMOTERS & FINLEASE (P) LTD (18 CIT VS NOVA PROMOTERS & FINLEASE (P) LTD (18 CIT VS NOVA PROMOTERS & FINLEASE (P) LTD (18 CIT VS NOVA PROMOTERS & FINLEASE (P) LTD (18 TAXMANN.COM 217, 206 TAXMAN 207, 342 ITR 169, 252 C TR TAXMANN.COM 217, 206 TAXMAN 207, 342 ITR 169, 252 C TR TAXMANN.COM 217, 206 TAXMAN 207, 342 ITR 169, 252 C TR TAXMANN.COM 217, 206 TAXMAN 207, 342 ITR 169, 252 C TR 187) 187) 187) 187) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) (COPY ENCLOSED) WHERE HONBLE DELHI HIGH COURT HELD THAT AMOUNT REC EIVED BY ASSESSEE FROM ACCOMMODATION ENTRY PROVIDERS IN GARB OF SHARE APPLICATION MONEY, WAS TO BE ADDED TO ITS TAX ABLE INCOME UNDER SECTION 68. IT WAS HELD AS FOLLOWS: 41. 41. 41. 41. IN THE CASE BEFORE US, NOT ONLY DID THE MATERIAL BEFORE THE ASSESSING OFFICER SHOW THE LINK BETWEEN THE ENTRY PROVIDERS AND THE ASSESSEE-COMPANY, BUT THE ASSESSING OFFICER HAD ALSO PROVIDED THE STATEMENTS OF MUKESH GUPT A AND RAJAN JASSAL TO THE ASSESSEE IN COMPLIANCE WITH THE RULES OF NATURAL JUSTICE. OUT OF THE 22 COMPANIES WHO SE NAMES FIGURED IN THE INFORMATION GIVEN BY THEM TO TH E INVESTIGATION WING, 15 COMPANIES HAD PROVIDED THE SO- CALLED 'SHARE SUBSCRIPTION MONIES' TO THE ASSESSEE. THERE WAS THUS SPECIFIC INVOLVEMENT OF THE ASSESSEE-COMPANY IN THE MODUS OPERANDI FOLLOWED BY MUKESH GUPTA AND RAJAN JASSAL. THUS, ON CRUCIAL FACTUAL ASPECTS THE PRESENT CASE STANDS ON A COMPLETELY DIFFERENT FOOTING FROM THE CASE OF OASIS HOSPITALITIES (P.) LTD. (SUPRA). 42. 42. 42. 42. IN THE LIGHT OF THE ABOVE DISCUSSION, WE ARE UNABL E TO UPHOLD THE ORDER OF THE TRIBUNAL CONFIRMING THE DEL ETION OF THE ADDITION OF RS. 1,18,50,000 MADE UNDER SECTION 68 OF THE ACT AS WELL AS THE CONSEQUENTIAL ADDITION OF RS. 2,96,250. WE ACCORDINGLY ANSWER THE SUBSTANTIAL QUESTI ONS OF LAW IN THE NEGATIVE AND IN FAVOUR OF THE DEPARTM ENT. THE ASSESSEE SHALL PAY COSTS WHICH WE ASSESS AT RS. 30,000/-. 12. CIT VS N R PORTFOLIO PVT LTD [2014] 42 TAXMANN.COM CIT VS N R PORTFOLIO PVT LTD [2014] 42 TAXMANN.COM CIT VS N R PORTFOLIO PVT LTD [2014] 42 TAXMANN.COM CIT VS N R PORTFOLIO PVT LTD [2014] 42 TAXMANN.COM 339 (DELHI)/[2014] 222 TAXMAN 157 (DELHI)(MAG)/[201 4] 339 (DELHI)/[2014] 222 TAXMAN 157 (DELHI)(MAG)/[201 4] 339 (DELHI)/[2014] 222 TAXMAN 157 (DELHI)(MAG)/[201 4] 339 (DELHI)/[2014] 222 TAXMAN 157 (DELHI)(MAG)/[201 4] 264 CTR 258 (DELHI) (COPY ENCLOSED) 264 CTR 258 (DELHI) (COPY ENCLOSED) 264 CTR 258 (DELHI) (COPY ENCLOSED) 264 CTR 258 (DELHI) (COPY ENCLOSED) ITA NOS.1156 TO 1158/DEL/2019 14 WHERE HONBLE DELHI HIGH COURT HELD THAT IF AO DOUB TS THE DOCUMENTS PRODUCED BY ASSESSEE, THE ONUS SHIFTS ON ASSESSEE TO FURTHER SUBSTANTIATE THE FACTS OR PRODUCE THE SHARE APPLICANT IN PROCEEDING. IT WAS HELD AS FOLLOWS: 30. WHAT WE PERCEIVE AND REGARD AS CORRECT POSITION OF LAW IS THAT THE COURT OR TRIBUNAL SHOULD BE CONVINCED ABOUT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE ONUS TO PROVE THE THREE FACTUM IS ON THE ASSESSEE AS THE FACTS ARE WITHIN THE ASSESSEE'S KNOWLEDGE. MERE PRODUCTION OF INCORPORATION DETAILS, PAN NOS. OR THE FACT THAT THIRD PERSONS OR COMPANY HAD FILED INCOME TAX DETAILS IN CASE OF A PRIVATE LIMITED COMPANY MAY NOT BE SUFFICIENT WHEN SURROUNDING AND ATTENDING FACTS PREDI CATE A COVER UP. THESE FACTS INDICATE AND REFLECT PROPER P APER WORK OR DOCUMENTATION BUT GENUINENESS, CREDITWORTHIN ESS, IDENTITY ARE DEEPER AND OBTRUSIVE. COMPANIES NO DOUBT ARE ARTIFICIAL OR JURISTIC PERSONS BUT THEY ARE SOULLESS AND ARE DEPENDENT UPON THE INDIVIDUALS BEHIND THEM WHO RUN AND MANAGE THE SAID COMPANIES. IT IS THE PERSONS BEHIND THE COMPANY WHO TAKE THE DECISIONS, CONTROLS AND MANAGE THEM. 5. IN THE REJOINDER, IT IS STATED BY THE LEARNED COUN SEL THAT THE ASSESSEE IS NOT RETRACTING THE STATEMENT GIVEN BY SHRI SH EKHAR AGARWAL UNDER SECTION 132(4) THAT THE GROUP HAD UNACCOUNTED INCOME WHICH IS ROUTED THROUGH THE SHARE CAPITAL. IN FACT, THE INCO ME WAS EARNED IN THE FLAGSHIP COMPANY VIZ., M/S SURYA FOOD AND AGRO LIMITE D WHICH HAD THE TURNOVER OF MORE THAN `500 CRORES A YEAR. THEREFORE , THE SAID COMPANY FILED THE PETITION BEFORE THE SETTLEMENT CO MMISSION BY DISCLOSING ITS ADDITIONAL INCOME. THAT IN THE APPELL ANT COMPANIES, IT IS ONLY THE APPLICATION OF THAT INCOME. THAT THESE FAC TS HAVE BEEN DULY CONSIDERED AND ACCEPTED BY THE ITAT WHILE GRANTING S TAY TO THE APPELLANT COMPANIES IN ITS ORDER DATED 1 ST MARCH, 2019. HE FURTHER STATED THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER H IMSELF HAS MENTIONED AT SEVERAL PLACES THAT IT IS THE UNDISCLOSED I NCOME OF THE GROUP WHICH IS INVESTED IN THE FORM OF BOGUS SHARE CAP ITAL. HOWEVER, AT THE END, WHILE MAKING THE ADDITION, HE TOOK A DI FFERENT STAND THAN WHAT IS STATED IN THE WHOLE BODY OF THE ASSESSMENT ORDER. HE STATED ITA NOS.1156 TO 1158/DEL/2019 15 THAT WHEN THE INCOME HAS BEEN TAXED, ITS APPLICATION CANNOT BE TAXED AGAIN OTHERWISE IT WOULD AMOUNT TO DOUBLE TAXATION O F INCOME. 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE LIMIT ED QUESTION BEFORE US IS WHETHER THE CREDIT IN THE FORM OF SHARE CAPITAL IN THE COMPANIES UNDER APPEAL BEFORE US CAN BE CONSIDERED TO BE APPLICATION OF UNDISCLOSED INCOME OF M/S SURYA FOOD AND AGRO LIMI TED WHO HAVE DECLARED SUCH INCOME BEFORE THE SETTLEMENT COMMISSION. LET US FIRST SEE THE STAND OF THE REVENUE I.E., THE ASSESSING OFFICER. AT THE TIME OF HEARING BEFORE US, BOTH THE PARTIES HAVE AGREED THAT THE FACTS IN ALL THE ABOVE THREE APPEALS ARE IDENTICAL AND IN FACT, THE A SSESSMENT ORDERS ARE ALSO MORE OR LESS IDENTICALLY WORDED. THEY HAVE R EFERRED TO ONLY ONE ASSESSMENT ORDER I.E., ASSESSMENT ORDER IN THE CASE OF M /S SURYA PROCESSED FOOD PVT.LTD. FOR ASSESSMENT YEAR 2013-14. THE REFORE, WE WILL ALSO REFER HEREIN BELOW THE SAID ASSESSMENT ORDER. 7. IN PARAGRAPH 1 OF THE ORDER, THE ASSESSING OFFICER H AS MENTIONED AS UNDER :- SEARCH AND SEIZURE PROCEEDINGS UNDER SECTION 132 OF T HE INCOME TAX ACT, 1961, (HEREINAFTER THE ACT) WERE CONDUCTED IN THE CASE OF PRIYA GOLD GROUP AND ITS GRO UP CONCERNS AND RESIDENTIAL/FACTORY PREMISES OF PARTNERS, DIRECTORS AND PROPRIETORS OF THE GROUP ON 16.12.2014. THE CASE OF THE ASSESSEE WAS ALSO COVERED IN OPERATION U/S 132 OF THE INCOME TAX ACT, 1961. 8. PARAGRAPH 2.2 OF THE ORDER READS AS UNDER :- 2.2 SH. SHEKHAR AGARWAL, ONE OF THE DIRECTORS IN TH E ASSOCIATED GROUP COMPANIES , IN HIS STATEMENT RECORDED ON OATH U/S 132(4) ON 17.12.2014 HAS ACCEPTED THAT THE UNDISCLOSED INCOME ON ACCOUNT OF BOGUS SHARE CAPITAL ITA NOS.1156 TO 1158/DEL/2019 16 MONEY WILL BE SURRENDERED IN THE A.Y. 2013-14 AND 2 014- 15, BUT THE SAME HAS NOT BEEN SURRENDERED BY THE ASSESSEE COMPANY IN ITS RETURN U/S 153A OF THE ACT. IN REPLY TO QUES. NO.25, SH. SHEKHAR AGARWAL STATED THAT : I ACCEPT THE FACT THAT OUR GROUP HAS ROUTED ITS UNAC COUNTED INCOME EARNED THROUGH UNDISCLOSED SOURCES AMOUNTING TO `31 CRORE IN F.Y. 2012-13 AND `15.91 CRORE IN F.Y. 2014-15 IN ITS COMPANIES M/S SURYA PROCESSED FOOD PVT.LTD. AND M /S SURYA AGROTECH INFRASTRUCTURE LIMITED THROUGH KOLKATA BASED COMPANIES NAMELY AND M/S SUBHSHREE INVESTMENT MANAGEMENT PRIVATE LIMITED, M/S SURYA VINCOM PRIVATE LIMITED AND M/S SURYA VANIJYA PRIVATE LIMITED, M/S G ARIMA COMMERCE PRIVATE LIMITED, M/S LOKENATH INVESTMENTS CONSULTANTS PRIVATE LIMITED RESPECTIVELY BY WAY OF SHAR E CAPITAL/SHARE PREMIUM. 8.1 FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSING OFF ICER HIMSELF HAS CONSIDERED THE PRIYA GOLD GROUP AS ONE GROUP AND T HE ASSESSEE COMPANY BEING PART OF THE SAME GROUP. HE RELIED UP ON THE STATEMENT OF SHRI SHEKHAR AGARWAL WHO IS DIRECTOR IN THE ASSOCIA TED GROUP COMPANIES. IT WAS POINTED OUT BY THE LEARNED COUNSEL THAT SHRI SHEKHAR AGARWAL IS THE DIRECTOR IN M/S SURYA FOOD AND AGRO LIMITED I.E., THE FLAGSHIP COMPANY. IN THE STATEMENT, SHRI S HEKHAR AGARWAL ACCEPTED THE FACT THAT THE GROUP HAS ROUTED ITS UNACC OUNTED INCOME IN THE FORM OF SHARE CAPITAL IN ITS COMPANIES M/S SURYA PR OCESSED FOOD PVT.LTD. AND M/S SURYA AGROTECH INFRASTRUCTURE LIMITE D. 9. THE ASSESSING OFFICER HAS AGAIN RELIED UPON THE ABOVE STATEMENT OF SHRI SHEKHAR AGARWAL. PARAGRAPH 4.11 OF THE ORD ER OF THE ASSESSMENT ORDER READS AS UNDER :- 4.11 THE STATEMENT ON OATH DATED 16.12.14 OF SHRI SHEKHAR AGRAWAL, WHO WAS HANDLING ALL THE INVESTMENT RELATED ISSUES OF THE PRIYAGOLD GROUP OF COMPANIES, WAS ALSO RECORDED AT THE RESIDENCE AND THE STATEMENT SUBSTANTIATES THE FACT THAT ALL THE FINANCIAL AND INVE STMENT RELATED DECISIONS WERE TAKEN BY SHRI SHEKHAR AGARWAL AND ITA NOS.1156 TO 1158/DEL/2019 17 HE IS THE KEY PERSON HANDLING INVESTMENTS AND FUND REQUIREMENT IN MAIN COMPANIES OF THE GROUP . FURTHER QUESTIONING OF SHRI SHEKHAR AGARWAL ON THE ISSUE OF ACCOMMODATION ENTRIES TAKEN BY THE PRIYAGOLD GROUP T OOK PLACE AT THE HEAD OFFICE OF THE PRIYAGOLD GROUP. 9.1 THUS, THE ASSESSING OFFICER HIMSELF HAS RECORDED THE FINDING THAT SHRI SHEKHAR AGARWAL WAS HANDLING ALL THE INVESTMENT RELATED ISSUES OF PRIYA GOLD GROUP OF COMPANIES. IT IS FURTHER NOTED THAT HE IS THE KEY PERSON HANDLING INVESTMENTS AND FUNDS REQUIREMENTS IN T HE MAIN COMPANIES OF THE GROUP. 10. IN PARAGRAPH 4.13, AGAIN THE ASSESSING OFFICER HAS M ENTIONED HIS STATEMENT REFLECTS THE FACT THAT THOUGH SHRI SHEKH AR AGARWAL INTER-ALIA LOOKED AFTER THE DECISIONS RELATED TO FINA NCE AND GENERAL POLICY INCLUDING DECISIONS REGARDING ASSESSMENT OF FUNDS REQUIREMENT BY THE GROUP COMPANIES, HE WAS UNABLE TO FURNISH ANY REPLY TO THE QUESTIONS REGARDING CREDITWORTHINESS OF INVESTOR COMPANI ES, DETAILS OF MEETINGS WITH INVESTOR COMPANIES, DUE DILIGENCE FOLLOW ED IN ISSUANCE OF SHARES BY THE GROUP, DATE OF ALLOTMENT OF SHARES, F ACE VALUE AND PREMIUM CHARGED . THUS, THE ASSESSING OFFICER ADMITTED THAT SHRI SHEKHAR AGARWAL LOOKED AFTER THE DECISIONS RELATING T O FINANCE AND GENERAL POLICY INCLUDING THE DECISION REGARDING FUND S REQUIREMENT OF THE GROUP COMPANIES. 11. AT PAGE 30 OF THE ASSESSMENT ORDER, THE ASSESSING OFFIC ER, WHILE RELYING UPON THE STATEMENT OF SHRI SHEKHAR AGARWAL, HAS REPRODUCED HIS STATEMENT. QUESTION NO.26 AND ANSWER THERETO READ AS UNDER :- Q.26 SINCE YOU HAVE ACCEPTED THE FACT THAT YOUR GROUP HAS ROUTED ITS UNACCOUNTED INCOME EARNED THROUGH UNDISCLOSED SOURCES AMOUNTING TO `31 CRORE IN F.Y. 2012 - 13 AND `15.91 CRORE IN F.Y. 2013-14 IN ITS COMPANIES M/S SURYA PROCESSED FOOD PVT.LTD. AND M/S SURYA AGROTECH ITA NOS.1156 TO 1158/DEL/2019 18 INFRASTRUCTURE LIMITED THROUGH KOLKATA BASED COMPANIE S BY WAY OF SHARE CAPITAL/SHARE PREMIUM, PLEASE EXPLAIN THE MODUS OPERANDI ADOPTED BY YOUR GROUP TO ROUTE THIS UNACCOUNTED MONEY. ANS. I WISH TO STATE THAT OUR GROUP HAD UNACCOUNTED FUNDS AVAILABLE WITH IT AND WANTED TO INTRODUCE THESE FUNDS INTO THE BOOKS OF ACCOUNTS OF OUR MAIN COMPANIES . FOR THIS PURPOSE I CAME IN CONTACT WITH SH. SUDHIR SATNALIWAL A, WHO ASSURED THE ARRANGEMENT OF BOGUS COMPANIES REGISTERED IN KOLKATA TO INTRODUCE OUR UNACCOUNTED FUNDS. THE UNACCOUNTED FUNDS WERE HANDED OVER IN CASH TO ONE OF THE CONFIDANTS OF SH. SUDHIR SATNALIWALA. ACCORDINGLY S H. SUDHIR SATNALIWALA INTRODUCED THESE UNACCOUNTED FUND S INTO THE BOOKS OF OUR MAIN COMPANIES NAMELY M/S SURYA PROCESSED FOOD PVT.LTD. & M/S SURYA PROCESSED FOOD PVT.LTD. IN THE FORM OF SHARE CAPITAL/SHARE PREMIUM T HROUGH A LAYER OF KOLKATA BASED COMPANIES. HOWEVER I AM NOT AWARE ABOUT THE EXACT MODUS OPERANDI FOLLOWED BY SH. SUDHIR SATNALIWALA TO ARRANGE THESE TRANSACTIONS. 11.1 FROM THE ABOVE, IT IS EVIDENT THAT SHRI SHEKHAR AGARWAL REPEATEDLY MENTIONED THAT IT IS THE UNACCOUNTED INCO ME OF THE GROUP WHICH IS ROUTED THROUGH THE SHARE CAPITAL IN M/S SURYA PROCESSED FOOD PVT.LTD. AND M/S SURYA AGROTECH INFRASTRUCTURE LIMITE D I.E., THE COMPANIES IN APPEAL BEFORE US. 11.2 THE ABOVE STATEMENT OF SHRI SHEKHAR AGARWAL HAS BEEN RELIED UPON BY THE ASSESSING OFFICER TIME AND AGAIN. AT PAGE 31 OF THE ASSESSMENT ORDER, AFTER CONSIDERING THE STATEMENT OF SHRI SHEKHAR AGARWAL, THE ASSESSING OFFICER CONCLUDED AS BELOW :- THE ABOVE ADMISSION OF SHRI SHEKHAR AGARWAL ESTABLISHE D BEYOND DOUBT THAT PRIYAGOLD GROUP HAD UNACCOUNTED F UNDS WHICH WERE INTRODUCED INTO MAIN COMPANIES OF THE GRO UP BY ROUTING OF THESE FUNDS THROUGH LAYERS OF BOGUS (JAM A KHARCHI) ACCOMMODATION PROVIDING COMPANIES. THIS SUBMISSION WAS RECONFIRMED BY MR. SHEKHAR AGARWAL IN HI S STATEMENT RECORDED DURING POST-SEARCH PROCEEDINGS ON 29.01.15. ITA NOS.1156 TO 1158/DEL/2019 19 11.3 THUS, THE ASSESSING OFFICER HIMSELF HAS CONCLUDED THA T PRIYA GOLD GROUP HAD UNDISCLOSED FUNDS WHICH WERE INTRODUCED INTO MAIN COMPANIES OF THE GROUP BY ROUTING OF THESE FUNDS THROU GH LAYERS OF BOGUS ACCOMMODATION ENTRIES. 12. AGAIN AT PAGE 38, THE ASSESSING OFFICER, IN PARAGRA PH 4.24, RECORDED THE FOLLOWING FINDING :- ALL THE ABOVE STATEMENTS FURTHER ESTABLISH THE FACT TH AT ALL THESE COMPANIES BASED IN KOLKATA PURPORTEDLY INVESTING IN PRIYAGOLD GROUP ARE NOTHING BUT PAPER COMPANIES AND ALL THE INVESTMENTS FROM THEM IN PRIYAGOLD GROUP CONCERNS IN THE FORM OF SHARE CAPITAL/SHARE PREMIUM ARE NOTHING B UT ACCOMMODATION ENTRIES, WHICH HAVE BEEN OBTAINED BY PRIYAGOLD GROUP IN ITS BOOKS BY ROUTING ITS OWN UNACCOUNTED MONEY. 13. IN PARAGRAPH 4.26, THE ASSESSING OFFICER CONCLUDED AS UNDER :- IT IS PROVED BEYOND ANY IOTA OF DOUBT THAT THIS INVE STMENT OF OVER RS.46.91 CRORES IN THE FORM OF SHARE CAPITAL/PREMIUM IN VARIOUS COMPANIES OF PRIYAGOLD GRO UP IS NOTHING BUT AN ACCOMMODATION ENTRY WHICH HAS BEEN OBTAINED BY ROUTING ITS OWN UNACCOUNTED MONEY IN ITS BOOKS AND IS LIABLE TO BE ADDED IN THE HANDS OF ASSESSEE GROUP COMPANIES U/S 68 OF THE I.T. ACT, 1961. 13.1 THUS, THE ASSESSING OFFICER HAS CONCLUDED THAT THE I NVESTMENT OF `46.91 CRORES IN THE FORM OF SHARE CAPITAL/PREMIUM IN VARIOUS COMPANIES OF PRIYAGOLD GROUP IS NOTHING BUT AN ACCOMM ODATION ENTRY AND IT IS LIABLE TO BE ADDED IN THE HANDS OF THE ASSESSE E GROUP COMPANIES . AS PER ASSESSING OFFICER HIMSELF, THE SHARE CAPITAL IS L IABLE TO BE ASSESSED IN THE HANDS OF THE ASSESSEE GROUP COMPANIE S. FROM THE ABOVE OBSERVATION OF THE ASSESSMENT ORDER, IT IS ABS OLUTELY CLEAR THAT THE STAND OF THE REVENUE WAS THAT THE PRIYA GOLD GROUP HAD ITA NOS.1156 TO 1158/DEL/2019 20 UNDISCLOSED INCOME WHICH IS ROUTED IN THE FORM OF SHARE CAPITAL BY OBTAINING ACCOMMODATION ENTRIES FROM KOLKATA BASED EN TRY PROVIDER COMPANIES AND THE SAID SHARE CAPITAL INCLUDING PREMIUM IS LIABLE TO BE TAXED IN THE HANDS OF THE ASSESSEE GROUP COMPANIES. 14. IN THE CONTEXT OF THIS FINDING OF THE ASSESSING OFFI CER, LET US EXAMINE THE APPLICATION BEFORE THE SETTLEMENT COMMI SSION AND THE ORDER OF THE SETTLEMENT COMMISSION IN THE CASE OF M/S S URYA FOOD AND AGRO LIMITED, WHICH IS THE FLAGSHIP COMPANY OF THE ASS ESSEE GROUP. THE COPY OF THE APPLICATION BEFORE THE SETTLEMENT C OMMISSION ALONG WITH THE ANNEXURES ARE PRODUCED IN THE PAPER BOOK F ROM PAGE 36 ONWARDS. THE APPLICATION IS SIGNED BY SHRI SHEKHAR AG ARWAL, DIRECTOR OF THE SAID COMPANY. AT PAGE 4 OF THE APPLICATION, THE ASSESSEE HAS GIVEN THE NAMES OF THE GROUP COMPANIES WHICH READ AS U NDER :- S.NO. NAME OF THE COMPANY 1. M/S SURYA FOOD & AGRO LTD. 2 . M/S SURYA AGROTECH INFRASTRUCTURE LTD. 3. M/S SURYA PROCESSED FOOD PVT.LTD. 4. M/S SURYA FRESH FOODS LTD. 5. M/S SURYA SHOPPING ARCADE PVT.LTD. 6. M/S SURYA BISCUIT INDUSTRIES (PROPRIETORSHIP CONCERN) 7. M/S SURYA HEALTHCARE INDUSTRIES (PROP. CONCER N) 8. M/S GARIMA COMMERCE PVT.LTD. 9. M/S LOKENATH INVESTMENT CONSULTANTS PVT.LTD. 10. M/S SURYA VINCOM PVT.LTD. (FORMERLY KNOWN AS M/S NEELKANTH VINCOM PVT.LTD.) 11. M/S SUBHSHREE INVESTMENT MANAGEMENT PVT.LTD. 12. M/S SURYA VANIJYA PVT.LTD. ITA NOS.1156 TO 1158/DEL/2019 21 (FORMERL Y KNOWN AS M/S LABHDHAN MERCANTILE PVT.LTD.) 15. FROM THE ABOVE, IT IS EVIDENT THAT IT INCLUDES BO TH THE COMPANIES UNDER APPEAL BEFORE US. IN PARAGRAPH 4 ANNEXURE-A O F THE APPLICATION, THERE IS FULL AND TRUE STATEMENT OF FACTS AND THE MANN ER IN WHICH THE INCOME HAS BEEN DERIVED. THE RELEVANT PORTION THERE OF IS REPRODUCED BELOW:- IV. FULL & TRUE STATEMENT OF FACTS AND MANNER IN WHICH INCOME HAS BEEN DERIVED. 1. THE APPLICANT COMPANY IS IN THE TRADE OF MANUFACTURING AND SALE OF BISCUITS. 2. THE APPLICANT COMPANY IS MANAGED BY AGARWAL FAMILY CALLED AGARWAL GROUP FOR SHORT. THE HEAD-MAN OF FAMILY IS SH. BALLABH PRASAD AGARWALA. THE BUSINESS OPERATIONS AND EXECUTIVE FUNCTIONS OF BUSINESS OF THE APPLICANT COMPANY ARE CONDUCTED BY HIS YOUNGEST SON SH . SHEKHAR AGARWAL. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. THE APPLICANT INTRODUCED A PART OF THE PROFIT M ADE IN THE HEDGING TRANSACTION KEPT OUTSIDE BOOKS, IN THE BOO KS OF THE GROUP CONCERNS IN THE FORM OF ENTRIES TAKEN AS SH ARE CAPITAL IN THE GROUP CONCERNS. THUS THE PROFIT MADE OUTSIDE BOOKS BY THE APPLICANT WAS UTILIZED BY IT FOR MAKING INVESTMENTS IN THE SHARE CAPITAL OF OTHER GROUP CONCE RNS. 13. THE FOLLOWING ARE THE AMOUNTS INTRODUCED IN THE SHAPE OF SHARE CAPITAL OF THE GROUP ENTITIES OBTAINED FROM ENTRY OPERATORS:- ITA NOS.1156 TO 1158/DEL/2019 22 S.NO. NAME OF ENTITY IN WHICH ENTRY HAS OBTAINED AMOUNT ASSESSMENT YEAR 1. SURYA PROCESSED FOOD (P) LTD. 31,00,50,000 2013 - 14 2. SURYA AGROTECH INFRASTRUCTURE LTD. 2,60,00,000 2013 - 14 3. SURYA AGROTECH INFRASTRUCTURE LTD. 13,31,50,000 2014 - 15 TOTAL 46,92,00,000 ENTRIES WERE INTRODUCED IN THE ABOVE COMPANIES BY ALLOTTING SHARES TO THE BOGUS SHAREHOLDERS AS PER LIST PLACED IN ANNEXURE C. IT IS SUBMITTED THAT THE ENT IRE BOGUS SHARE CAPITAL WAS OBTAINED BY PLOUGHING BACK MONEY EARNED IN HEDGING TRANSACTIONS IN CASH KEPT OUT SIDE BOOKS. 14. BELOW IS A TABLE SHOWING THE TURN OVER AND THE GR OSS PROFIT EARNED BY THE APPLICANT AS PER BOOKS:- ASSTT. YEAR TURN OVER GROSS PROFIT G.P. RA TE 2009 - 10 3,80,95,14,651 68,54,42,867 17.99 2010 - 11 4,36, 88,88,049 58,31,74,857 13.35 2011 - 12 4,73,68,11,191 87,91,34,327 18.56 2012 - 13 5,41,17,27,672 96,71,90,982 17.92 2013 - 14 6,39,80,48,593 1,11,61,57,254 17.45 2014 - 15 6,77,30,78,789 1,26,35,04,4 56 18.65 2015 - 16 7,18,85,42,615 1,36,45,98,055 18.98 A REFERENCE TO THE ABOVE CHART WOULD SHOW THAT THERE IS A VARIATION IN THE G.P. RATE OVER THE YEARS. IT SHOWS T HE VOLATILITY IN THE TRADE BECAUSE OF THE PRICES OF RAW MATERIAL, WHICH ARE END PRODUCT OF AGRICULTURAL SECTOR AND TH US THEIR PRICES ARE FLUCTUATING DEPENDING ON THE SEASON AND WEATHER. THE APPLICANT IN ORDER TO SAVE ITSELF FROM FLUCTUATIONS HEDGED THE PRICES OF RAW MATERIAL TO MAI NTAIN A REASONABLE GROSS PROFIT AT 19%. THE ADDITIONAL INCOME BY TAKING THE GROSS PROFIT AT 1 9% WILL BE AS FOLLOWS:- ITA NOS.1156 TO 1158/DEL/2019 23 ASSTT. YEAR TURNOVER (RS.) G.P. @ 19% AMOUNT (RS.) GROSS PROFIT AS PER BOOKS (RS.) ADDITIONAL INCOME 2009 - 10 3,80,95,14,651 72,38,07,784 68,54,42,867 3,83,64,917 2010 - 11 4,36,88,88,049 83,00,88,72 9 58,31,74,857 24,69,13,872 2011 - 12 4,73,68,11,191 89,99,94,126 87,91,34,327 2,08,59,799 2012 - 13 5,41,17,27,672 1,02,82,28,258 96,71,90,982 6,10,57,276 2013 - 14 6,39,80,48,593 1,21,56,29,233 1,11,61,57,254 9,94,71,979 2014 - 15 6,77,30,78,789 1,28,68,84,9 70 1,26,35,04,456 2,33,80,514 2015 - 16 7,18,85,42,615 1,36,58,23,097 1,36,45,98,055 12,25,042 TOTAL 49,12,73,399 FROM THE ABOVE IT IS SEEN THAT THE ADDITIONAL INCOME MENTIONED ABOVE COVERS THE INVESTMENT MADE BY THE APPLICANT COMPANY IN THE SHARES OF:- A) SURYA PROCESSED FOOD PVT.LTD. B) SURYA AGROTECH INFRASTRUCTURE LTD. 15. IT WOULD BE SEEN THAT THE ADDITIONAL INCOME OFFE RED BY THE APPLICANT EARNED FROM THE HEDGING OF RAW MAT ERIAL COVERS THE UNDISCLOSED ASSETS/APPLICATION OF FUNDS FOUND DURING THE COURSE OF SEARCH AND THERE IS NO OTHER UNDISCLOSED ASSET FOUND OR APPLICATION OF FUNDS BY THE GROUP OVER AND ABOVE THE INCOME OFFERED. THUS THE INCOME OFFERED BY THE APPLICANT IS FULL AND TRUE. 16. IN ANNEXURE-3 OF THE APPLICATION, M/S SURYA FOO D & AGRO LIMITED HAS GIVEN THE COMPLETE DETAILS OF BOGUS SHARE CAPITAL INTRODUCED IN THE GROUP COMPANIES. THE SAME READ AS U NDER :- SURYA FOOD & AGRO LTD. LIST OF BOGUS CAPITAL INTRODUCED BY THE APPLICANT IN GROUP COMPANIES COMPANY NAME : SURYA PROCESSED FOOD PRIVATE LIMITED DETAILS OF BOGUS SHAREHOLDERS S.NO. PARTICULARS NO. OF SHARES PER SHARE AMOUNT ASSESSMENT YEARS ITA NOS.1156 TO 1158/DEL/2019 24 VALUE 1 M/S SUBHSHREE INVESTMENT MANAGEMENT PVT.LTD. 42,22,973 37 1562,50,000 2013-14 2 M/S SURYA VINCOM PVT.LTD. 41,56,757 37 1538,00,000 2013-14 TOTAL 83,79,730 3100,5 0,000 COMPANY NAME : SURYA AGROTECH INFRASTRUCTURE LTD. DETAILS OF BOGUS SHAREHOLDERS S.NO. PARTICULARS NO. OF SHARES PER SHARE VALUE AMOUNT ASSESSMENT YEARS 1 M/S SURYA VANIJYA PVT.LTD. 26,00,000 10 260,00,000 2013-14 2 M/S GARIMA COMMERCE PVT.LTD. 3,60,000 10 36,00,000 2014-15 3 M/S SURYA VANIJYA PVT.LTD. 126,30,000 10 1263,00,000 2014-15 4 M/S LOKENATH INVESTMENT CONSULTANTS PVT.LTD. 3,25,000 10 32,50,000 2014-15 TOTAL 159,15,000 1591,50,000 17. THE ABOVE APPLICATION IS ADMITTED BY THE SETTLEM ENT COMMISSION AND THE FINAL ORDER WAS PASSED ON 8 TH JUNE, 2018. THE COMPUTATION OF INCOME BY THE SETTLEMENT COMMISSION UNDER SECTION 245 D(4) WAS AS UNDER :- COMPUTATION OF INCOME U/S 245D(4) NAME OF THE APPLICANT ASSTT. YEAR TOTAL INCOME AS PER RETURN (IN RS.) INCOME DISCLOSED U/S 245C(1) (IN RS.) INCOME SETTLED U/S 245D(4) (IN RS.) TOTAL INCOME DETERMINED U/S 245D(4) (IN RS.) 1 2 3 (1 + 3) M/S SURYA 2009 - 10 69,711,904 38,364,917 38,364,917 10,80,76,821 2010 - 11 73,607,180 246,913,872 246,913,872 32,05,21,052 2011 - 12 86,738,060 20,859,799 20,859,799 10,75,97,859 2012 - 13 78 ,470,380 61,057,276 61,057,276 13,95,27,656 ITA NOS.1156 TO 1158/DEL/2019 25 FOOD & AGRO LTD. 2013 - 14 11,442,840 99,471,979 99,471,979 21,49,14,819 2014 - 15 153,641,060 23,380,514 23,380,514 17,70,21,574 2015 - 16 501,459,130 1,225,042 6,76,76,042 56,91,35,172 TOTAL 1,079,070,554 491,273,399 55,77,24 ,399 1,63,67,94,953 18. THUS, AS AGAINST THE INCOME OF `49.12 CRORES DISCLOSE D BEFORE THE SETTLEMENT COMMISSION, THE ADDITIONAL INCOME FINALLY SETTLED WAS `55.77 CRORES. WITH REGARD TO APPLICATION OF INCOME IN THE FORM OF SHARE CAPITAL IN M/S SURYA PROCESSED FOOD PVT.LTD. AND M/S SURYA AGROTECH INFRASTRUCTURE LTD., THE SETTLEMENT COMMISSIO N DECLINED TO GIVE ANY FINDING WITH THE FOLLOWING ORDER :- 8.5.3 ANOTHER ISSUE IN THIS CASE IS THAT THE APPLICANT IS CLAIMING THAT ITS ADDITIONAL INCOME HAS BEEN INVESTE D IN TWO OTHER GROUP COMPANIES TO THE TUNE OF RS.46,92,00,000/-. HOWEVER, THOSE TWO COMPANIES ARE N OT BEFORE THE COMMISSION AND HENCE THIS ISSUE CANNOT BE ADJUDICATED BY US. 19. THUS, THE SETTLEMENT COMMISSION DECLINED TO GIVE A NY FINDING WITH REGARD TO THE APPLICATION OF ADDITIONAL INCOME DISCLOSED BEFORE THE SETTLEMENT COMMISSION. WE FIND THAT THE ITAT IN ASSESSE ES OWN CASE, WHILE CONSIDERING THE STAY PETITIONS BY THESE TWO COMPA NIES WHICH ARE UNDER APPEAL BEFORE US, IN ITS ORDER IN STAY APPLICA TION NO.205 TO 207/DEL/2019, VIDE ORDER DATED 1 ST MARCH, 2019, GAVE THE FOLLOWING FINDING :- WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS A ND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AS WELL AS THE ORDER OF THE SETTLEMENT COMMISSION DATED 8/6/2018. IT IS APPARENT THAT THE DISCLOSURE HAS BEEN MADE BY THE COMPANY WHO HAS EARNED THE UNDISCLOSED INCOME AND ROUTED IN BOOKS THROUGH THE PETITIONER COMPANIES AS UNACCOUNTED SHARE CAPITAL. THE APPLICATION OF THE I NCOME IS TAXED IN THE HANDS OF THE PETITIONER COMPANIES APPARENTLY IT SEEMS AND SOURCES OF INCOME IS TAXED IN TH E ITA NOS.1156 TO 1158/DEL/2019 26 HANDS OF SURYA FOOD AND AGRO LTD. THEREFORE PRIMA F ACIE THE CASE OF THE ASSESSEE SHOWS THAT THERE IS A DOUBLE ADDITION, ONCE THE SOURCE OF INCOME AND SECONDLY THE APPLICATION OF INCOME. THEREFORE ACCORDING TO US TH E BALANCE OF CONVENIENCE LIES IN FAVOUR OF THE ASSESSEE. 20. LEARNED DR HAS CONTENDED THAT THE CONCLUSION DRAW N BY THE ITAT IN THE ORDER OF STAY IS A WRONG CONCLUSION AND SHOULD N OT BE RELIED UPON WHILE DECIDING THE APPEALS ON MERITS. HOWEVER, AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE SIDES AND THE FACTS OF THE C ASE AND GOING THROUGH THE ORDERS OF THE LOWER AUTHORITIES AS WELL A S SETTLEMENT COMMISSION, WE ENTIRELY AGREE WITH THE ABOVE FINDING OF THE ITAT GIVEN IN THE STAY PETITIONS. FROM THE ASSESSMENT ORDER, THE RELEVANT PORTION OF WHICH HAS ALREADY BEEN REPRODUCED ABOVE IN THIS OR DER, IT IS CLEAR THAT THE STAND OF THE ASSESSING OFFICER THROUGHOUT WAS TH AT THERE WAS UNDISCLOSED INCOME OF THE SURYA GROUP WHICH IS ROUTED IN THE FORM OF SHARE CAPITAL IN THE GROUP COMPANIES BY OBTAINING THE ACCOMMODATION ENTRIES FROM KOLKATA BASED ENTRY PROVIDER COMPANIES. SUCH SHARE CAPITAL/SHARE PREMIUM IS LIABLE TO BE ADDED IN THE HA NDS OF THE GROUP COMPANIES. THE FLAGSHIP COMPANY OF THE GROUP VIZ., M /S SURYA FOOD AND AGRO LIMITED HAS ALREADY OFFERED THE ADDITIONAL INCOME TO THE TUNE OF `49.12 CRORES BEFORE THE SETTLEMENT COMMISSION, WHI CH THE SETTLEMENT COMMISSION HAS ENHANCED TO `55.77 CRORES. THE ORDER OF THE SETTLEMENT COMMISSION IS ACCEPTED BY BOTH THE PART IES AND THUS HAS BECOME FINAL. BEFORE THE SETTLEMENT COMMISSION, T HE ASSESSEE HAS REPEATEDLY STATED, WHICH WE HAVE ALREADY MENTION ED ABOVE WHILE REPRODUCING THE RELEVANT PORTION OF THE APPLICATION BEFORE THE SETTLEMENT COMMISSION, THAT THE UNDISCLOSED INCOME WHI CH IS BEING OFFERED BEFORE THE SETTLEMENT COMMISSION HAS BEEN APP LIED BY WAY OF INTRODUCTION IN THE SHAPE OF SHARE CAPITAL TO GROUP E NTITIES VIZ., M/S SURYA PROCESSED FOOD PVT.LTD. AND M/S SURYA AGROTECH INFRASTRUCTURE LIMITED. IN PARAGRAPH 15 OF THE APPLICATION BEFORE THE SETTLEMENT ITA NOS.1156 TO 1158/DEL/2019 27 COMMISSION, M/S SURYA FOOD & AGRO LIMITED HAS MADE IT C LEAR THAT THERE IS NO OTHER UNDISCLOSED ASSET FOUND OR APPLICATION OF FUNDS BY THE GROUP . THIS STATEMENT MADE BEFORE THE SETTLEMENT COMMISSIO N HAS NEITHER BEEN FOUND TO BE INCORRECT NOR BEFORE US IT HAS BEEN SHOWN THAT M/S SURYA FOOD AND AGRO LIMITED HAS APPLIED THE UNDISCLOSED INCOME OFFERED BEFORE THE SETTLEMENT COMMISSION FOR A CQUISITION OF ANY OTHER ASSET. IN VIEW OF THE ABOVE, WE ENTIRELY A GREE WITH ORDER OF THE ITAT PASSED IN STAY PETITION WHEREIN THE ITAT HELD THAT THE DISCLOSURE HAS BEEN MADE BY THE COMPANY WHO HAS EARNED THE UNDISCLOSED INCOME AND ROUTED IN BOOKS THROUGH THE PET ITIONER COMPANIES AS UNACCOUNTED SHARE CAPITAL. THE APPLICAT ION OF THE INCOME IS TAXED IN THE HANDS OF THE PETITIONER COMPAN IES APPARENTLY IT SEEMS AND SOURCES OF INCOME IS TAXED IN THE HANDS OF SUR YA FOOD AND AGRO LTD. THEREFORE PRIMA FACIE THE CASE OF THE ASSESSE E SHOWS THAT THERE IS DOUBLE TAXATION, ONCE THE SOURCE OF INCOME A ND SECONDLY THE APPLICATION OF INCOME . WE ENTIRELY AGREE WITH THE ABOVE FINDING OF THE ITAT IN THE ORDER PASSED IN THE STAY PETITION FILED BY M/S SURYA PROCESSED FOOD PVT.LTD. AND M/S SURYA AGROTECH INFRASTR UCTURE LTD. IN VIEW OF THE ABOVE, SINCE THE INCOME HAS ALREADY BEEN TAXED IN THE HANDS OF M/S SURYA FOOD AND AGRO LIMITED, THE APPLICA TION OF THE SAID INCOME IN THE FORM OF SHARE CAPITAL IN M/S SURYA PRO CESSED FOOD PVT.LTD. AND M/S SURYA AGROTECH INFRASTRUCTURE LTD. I .E., THE APPELLANTS BEFORE US, CANNOT BE TAXED AGAIN. ACCORDINGLY, WE D ELETE THE ADDITION FOR UNEXPLAINED SHARE CAPITAL AND ALLOW GROUND NO.1 IN ALL THE APPEALS. 21. WITH REGARD TO GROUND NO.2, BOTH THE PARTIES ADM ITTED THAT THIS GROUND WOULD BE CONSEQUENTIAL TO THE DECISION IN GROU ND NO.1. THE ASSESSING OFFICER, APART FROM THE ADDITION ON SHARE CAPI TAL, HAS ALSO MADE FURTHER ADDITION OF ALLEGED EXPENDITURE BEING COMMISSION FOR ACQUIRING THE ACCOMMODATION ENTRIES IN THE FORM OF SH ARE CAPITAL. BOTH THE PARTIES HAVE AGREED THAT IF IT IS ACCEPTED THAT T HE INVESTMENT IN THE ITA NOS.1156 TO 1158/DEL/2019 28 SHARE CAPITAL WAS OUT OF THE UNDISCLOSED INCOME OF M/S S URYA FOOD & AGRO LIMITED, WHICH IS DISCLOSED BEFORE THE SETTLEMENT COMMISSION, THE SAME FINDING WOULD BE SQUARELY APPLICABLE WITH RE GARD TO COMMISSION FOR ARRANGING SUCH ACCOMMODATION ENTRIES. I N VIEW OF THE FINDING WITH REGARD TO GROUND NO.1, WE HOLD THAT TH E ADDITION FOR ALLEGED EXPENDITURE ON ARRANGING THE ACCOMMODATION ENTRIES IN THE FORM OF SHARE CAPITAL IS ALSO MADE FROM THE UNDISCLOSED INCOME OFFERED AND SETTLED BY M/S SURYA FOOD & AGRO LIMITED BEFORE T HE SETTLEMENT COMMISSION. ACCORDINGLY, GROUND NO.2 OF THE ASSESSEES AP PEALS IS ALLOWED. 22. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 07.05.2019. SD/- SD/- (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S SURYA PROCESSED FOOD PVT.LTD. AND M/S SURYA PROCESSED FOOD PVT.LTD. AND M/S SURYA PROCESSED FOOD PVT.LTD. AND M/S SURYA PROCESSED FOOD PVT.LTD. AND M/S SURYA M/S SURYA M/S SURYA M/S SURYA AGROTECH INFRASTRUCTURE LIMITED, AGROTECH INFRASTRUCTURE LIMITED, AGROTECH INFRASTRUCTURE LIMITED, AGROTECH INFRASTRUCTURE LIMITED, 2 22 2 ND NDND ND FLOOR, 19, LOCAL SHOPPING COMPLEX, FLOOR, 19, LOCAL SHOPPING COMPLEX, FLOOR, 19, LOCAL SHOPPING COMPLEX, FLOOR, 19, LOCAL SHOPPING COMPLEX, NEAR PUSHPA BHAWAN, MADANGIR, NEAR PUSHPA BHAWAN, MADANGIR, NEAR PUSHPA BHAWAN, MADANGIR, NEAR PUSHPA BHAWAN, MADANGIR, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 062. 110 062. 110 062. 110 062. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -8, NEW DELHI. 8, NEW DELHI. 8, NEW DELHI. 8, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR