Pratibha Finvest Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1212/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3978 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 05-05-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 08-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Gift; Accommodation entries; Reason to believe
• Section: 147; 148

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 BENCH : F NEW DELHI) (DELHI BENCH : F NEW DELHI) (DELHI BENCH : F NEW DELHI) (DELHI BENCH : F NEW DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND SHRI A.D. JAIN, JUDICIAL MEMMBER SHRI A.D. JAIN, JUDICIAL MEMMBER SHRI A.D. JAIN, JUDICIAL MEMMBER SHRI A.D. JAIN, JUDICIAL MEMMBER I.T.A. NO.1212/DEL./2011 I.T.A. NO.1212/DEL./2011 I.T.A. NO.1212/DEL./2011 I.T.A. NO.1212/DEL./2011 (ASSESSMENT YEAR : 2001 (ASSESSMENT YEAR : 2001 (ASSESSMENT YEAR : 2001 (ASSESSMENT YEAR : 2001- -- -02) 02) 02) 02) PRATIBHA FINVEST P. LTD., PRATIBHA FINVEST P. LTD., PRATIBHA FINVEST P. LTD., PRATIBHA FINVEST P. LTD., VS. VS. VS. VS. ITO, WA ITO, WA ITO, WA ITO, WARD 14(3), RD 14(3), RD 14(3), RD 14(3), 84, DARYAGANJ, 3 84, DARYAGANJ, 3 84, DARYAGANJ, 3 84, DARYAGANJ, 3 RD RDRD RD FLOOR, FLOOR, FLOOR, FLOOR, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. OPP. CAMBRIDGE SCHOOL, OPP. CAMBRIDGE SCHOOL, OPP. CAMBRIDGE SCHOOL, OPP. CAMBRIDGE SCHOOL, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (PAN/GIR NO. : AAACP7571 (PAN/GIR NO. : AAACP7571 (PAN/GIR NO. : AAACP7571 (PAN/GIR NO. : AAACP7571- -- -L) L)L) L) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SHRI PRATAP GUPTA, CA ASSESSEE BY : SHRI PRATAP GUPTA, CA ASSESSEE BY : SHRI PRATAP GUPTA, CA ASSESSEE BY : SHRI PRATAP GUPTA, CA REVENUE BY : SHRI S. MOHANTY, SR.DR REVENUE BY : SHRI S. MOHANTY, SR.DR REVENUE BY : SHRI S. MOHANTY, SR.DR REVENUE BY : SHRI S. MOHANTY, SR.DR ORDER ORDER ORDER ORDER PER A.D. JAIN, JM THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF CIT(A)-XVII, NEW DELHI, FOR ASSESSMENT YEAR 2001-02. 2. GROUND NOS.1 TO 4 ARE CONCERNING THE CHALLENGE OF THE ASSESSEE TO THE ACTION U/S 147 OF THE ACT. 3. A SEARCH OPERATION WAS CONDUCTED ON VARIOUS ACCOMMO DATION ENTRY PROVIDERS/BOGUS SHARE APPLICANTS/BOGUS GIFT GIVERS. IN THE ENQUIRIES BEFORE THE INV. WING OF THE DEPARTMENT, TH ESE PERSONS HAD PROVIDED DETAILS OF VARIOUS PERSONS TO WHOM SUCH ACCOMMODATION/BOGUS ENTRIES HAD BEEN PROVIDED. BASED ON SUCH ENQUIRIES THE INV. WING FORWARDED THE DETAILS OF PERSO NS WHO WERE BENEFICIARIES/ENTRY OPERATORS OF SUCH ACCOMMODATION/BO GUS ENTRIES, TO THE CONCERNED AOS. ONE SUCH BENEFICIARY WAS THE ASSESSEE C OMPANY. THE AO INITIATED PROCEEDINGS U/S 148 OF THE ACT. IT WAS NOTICED FROM THE PERUSAL OF THE RECORD THAT THE ASSESSEE COMPANY HAD SHOWN A CREDIT BALANCE OF `5544816, BEING OF THE VIEW THAT THE ASSESSEE WAS AN ENTRY OPERATOR AS PER THE INFORMATION FROM THE INV. WING, AND THAT AS I.T.A. NO.1212/DEL./2011 (A.Y. : 2001-02) 2 SUCH, THE ASSESSEE MUST BE RECEIVING COMMISSION @ 2% TOWARD S PROVIDING ACCOMMODATION ENTRIES. THE AO ADDED AN AM OUNT OF `110896, AS THE INCOME OF THE ASSESSEE COMPANY. 4. THE VALIDITY OF THE ACTION U/S 147 OF THE ACT WAS UPHELD BY THE CIT(A) BY VIRTUE OF THE IMPUGNED ORDER. 5. THIS HAS GIVEN RISE TO GROUND NOS.1 TO 4 BEFORE US. 6. CHALLENGING THE ACTION OF THE CIT(A) IN CONFIRMI NG THE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT., THE LD.COUNSEL FOR TH E ASSESSEE HAS CONTENDED THAT AS EVIDENT FROM THE REASONS RECORDED FO R REOPENING THE COMPLETED ASSESSMENT OF THE ASSESSEE AND THE ASSESSMENT ORDER DATED 4.12.2008, WHICH IS THE ASSESSMENT ORDER UNDER CON SIDERATION HEREIN, THE CIT(A) HAS, WHILE WRONGLY CONFIRMING THE INITIATION OF THE REOPENING PROCEEDINGS, ERRED IN IGNORING THAT THE RE OPENING WAS FOR ONE REASON, WHEREAS THE ASSESSMENT WAS MADE FOR AN ALTOGET HER DIFFERENT REASON, VITIATING THE REOPENING OF THE COM PLETED ASSESSMENT OF THE ASSESSEE. 7. THE LD.DR., ON THE OTHER HAND, HAS STRONGLY SUPPORT ED THE IMPUGNED ORDER IN THIS REGARD. 8. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MAT ERIAL ON RECORD IN THIS REGARD. A COPY OF THE REASONS RECORDED FOR REOPENING THE COMPLETED ASSESSMENT HAS BEEN PLACED BY THE ASSESSEE AT PAGE 40 OF THE ASSESSEES PAPER BOOK. THESE REASONS ARE AS FOLLOWS: M/S PRATIBHA FINVEST PVT. LTD. REASONS FOR INITIATING THE PROCEEDINGS U/S 148 O F THE I.T.ACT, 1961. A REPORT HAS BEEN SENT BY THE ADDL.DIRECTOR OF INCOME TAX (INV.) UNIT-VI, NEW DELHI VIDE LETTER F.NO.ADDL.DIT (INV.)U-VI/06- 07/1141 DATED 263.2008 AS PER THIS REPORT SEARCH AND SE IZURE OPERATIONS WERE CONDUCTED ON VARIOUS PERSONS WHO WERE INDULGED IN PROVIDING ACCOMMODATION ENTRIES/BOGUS SHAR E APPLICATION MONEY/BOGUS GIFTS. IN THE COURSE OF ENQUI RIES BEFORE INV. WING THESE PERSONS HAD PROVIDED THE DETAILS OF VAR IOUS PERSONS TO WHOM SUCH ACCOMMODATION/BOGUS ENTRIES WERE PROVIDED. BASED ON THE ENQUIRIES MADE, THE INV. WING HAS I.T.A. NO.1212/DEL./2011 (A.Y. : 2001-02) 3 PROVIDED THE DETAILS OF PERSONS WHO WERE BENEFICIARIES/ ENTRY OPERATORS OF SUCH ACCOMMODATION/BOGUS ENTRIES. THE INVESTIGATION WING ON THE BASIS OF ENQUIRIES CONDUCTED/INFORMATION COLLECTED HAS SENT THE NAMES AND ADDRESSES AND BANK ACCOUNTS OF THE BENEFICIARIES AND ALSO THE VALUE OF ENTRY TAKEN BY SUCH BENEFICIARIES FROM DIFFE RENT ENTRY OPERATORS. THE NAMES OF ENTRY GIVER AND BANK ACCOUNT S OF THE BENEFICIARIES AND ALSO THE VALUE OF ENTRY TAKEN BY SUC H BENEFICIARIES FROM DIFFERENT ENTRY OPERATORS. THE NA MES OF ENTRY GIVER AND BANK ACCOUNTS THROUGH WHICH THE ENTRY WAS G IVEN HS ALSO BEEN INFORMED BY THE INV. WING. ONE SUCH BENEFI CIARY IS M/S PRATIBHA FINVEST PT. LTD. AS PER REPORT OF INV. WING, M/S PRATIBHA FINVEST PVT. LTD. HAD RECEIVED ACCOMMODATION ENTRY AMOUNTING TO `5086 87 IN THE F.Y. 2000-01 RELEVANT TO A.Y.2001-02 UNDER THE GARB OF SHARE APPLICATION MONEY/SHARE CAPITAL/BOGUS GIFTS. IN VIEW OF THE ABOVE DISCUSSION, I HAVE REASON TO BELIE VE THAT INCOME AT LEAST THE EXTENT OF `508687 FOR A.Y. 2001-02 HAD ESCAPED ASSESSMENT WITHIN THE EARNING OF THE PROVISIONS OF SECTION 147(B) OF THE I.T. ACT, 1961. TO BRING TO T AX THE INCOME WHICH HAS ESCAPED ASSESSMENT, I PROPOSED TO ISSUE NOTICE UND ER SECTION 148 OF THE I.T. ACT, 1961. 9. IT IS EVIDENT FROM THE ABOVE REASONS RECORDED TO IN ITIATE PROCEEDINGS U/S 148 OF THE ACT, THAT AS PER THE REPORT OF THE INV. WING, THE ENTRY PROVIDERS HAD, IN THE ENQUIRIES BEFORE THE INV. WING, PROVIDED THE DETAILS OF VARIOUS PERSONS TO WHOM SUCH ACCOMMODATIO N ENTRIES HAD BEEN PROVIDED; THAT BASED ON THESE ENQUIRIES, THE INV. WING HAD PROVIDED THE DETAILS OF BENEFICIARIES OF THE ACCOMMOD ATION ENTRIES, INCLUDING THEIR NAMES AND ADDRESSES AND BANK ACCOUNTS, A S ALSO THE VALUE OF THE ENTRY TAKEN BY SUCH BENEFICIARIES FROM DIFFERENT ENTRY OPERATORS; THAT NAMES OF THE ENTRY GIVERS AND THAT BAN K ACCOUNTS THROUGH WHICH THE ENTRY WAS GIVEN, HAD ALSO BEEN INFO RMED BY THE INV. WING; THAT THE ASSESSEE COMPANY, M/S PRATIBHA FINVEST P. LTD. WAS ONE OF SUCH BENEFICIATES, HAVING RECEIVED ACCOMMODATION E NTRY AMOUNTING TO `508687 IN F.Y. 2001-02 RELEVANT TO ASSESSMENT YEAR 2001-02; AND I.T.A. NO.1212/DEL./2011 (A.Y. : 2001-02) 4 THAT ON THIS BASIS IT WAS, THAT THE AO OF THE ASSESSEE COM PANY HAD REASON TO BELIEVE THAT INCOME AT LEAST TO THE EXTENT OF `508687 FOR ASSESSMENT YEAR 2001-02 HAD ESCAPED ASSESSMENT. 10. IN THE ASSESSMENT ORDER, IT HAS BEEN OBSERVED, INTER ALIA, AS FOLLOWS: THE INV. WING ON THE BASIS OF ENQUIRIES CONCLUDED/INF ORMATION COLLECTED HAS SENT THE NAMES AND ADDRESSES AND BANK ACCOU NTS OF THE BENEFICIARIES AND ALSO THE VALUE OF ENTRY TAKE N BY SUCH BENEFICIARIES FROM DIFFERENT ENTRY OPERATORS. THE NA MES OF ENTRY GIVER AND BANK ACCOUNTS THROUGH WHICH THE ENTRY WAS G IVEN HAS ALSO BEEN INFORMED BY THE WING. ONE SUCH BENEFICIARY WAS M/S PRATIBHA FINVEST PVT. LTD. AS PER THIS REPORT PROCEED INGS U/S 148 WERE INITIATED. 11. THE LD.COUNSEL FOR THE ASSESSEE HAS LAID STRESS ON THE U SE OF THE EXPRESSION ENTRY OPERATOR BY THE AO IN PARA.4 OF T HE ASSESSMENT ORDER. ACCORDING TO THE LD.COUNSEL, WHEREAS IN THE R EASONS RECORDED FOR INITIATING THE PROCEEDINGS U/S 148 OF THE ACT, TH E ASSESSEE HAD BEEN TALKED OF AS A BENEFICIARY OF ACCOMMODATION ENTRIES, IN THE ASSESSMENT ORDER, THE AO HAS HELD THE ASSESSEE COMPANY TO BE AN ENT RY OPERATOR. THUS, ACCORDING TO THE LD.COUNSEL, WHEREAS THE REOPENI NG OF THE COMPLETED ASSESSMENT WAS DONE FOR ONE REASON, THE ASSESSMENT WAS COMPLETED ON A TOTALLY DIFFERENT REASON. 12. WE DO NOT FIND ANY FORCE IN SUCH AVERMENT ON BEH ALF OF THE ASSESSEE. IT IS SEEN THAT IN THE REASONS RECORDED, THE COM PLETED ASSESSMENT OF THE ASSESSEE COMPANY WAS PROPOSED TO BE REOPENE D FOR THE REASON THAT THE ASSESSEE COMPANY WAS ONE OF THE BENEF ICIARIES OF ACCOMMODATION ENTRIES, WHOSE NAMES HAD BEEN DIVULGED B Y THE ACCOMMODATION ENTRY OPERATORS IN THE ENQUIRIES CONDUC TED BY THE INV. WING OF THE DEPARTMENT. CORRESPONDINGLY, IN THE ASSESSM ENT ORDER, ALSO, THE AO HAS PROCEEDED TO ASSESS THE ESCAPED INCOME OF THE ASSESSEE ON THIS VERY BASIS. IT HAS BEEN SPECIFICALLY OBSERV ED IN THE FIRST PARA ON THE LAST PAGE OF THE ASSESSMENT ORDER, THAT ONE OF THE BENEFICIARIES, WHOSE NAMES AND ADDRESSES AND BANK ACCOUNT S HAD I.T.A. NO.1212/DEL./2011 (A.Y. : 2001-02) 5 BEEN COLLECTED BY THE INV. WING ON THE BASIS OF ENQUI RIES CONDUCTED, WAS THE ASSESSEE COMPANY. MERELY BECAUSE THE AO HAS USED T HE EXPRESSION ENTRY OPERATOR QUA-THE ASSESSEE, IT DOES NOT LEAD TO THE CONCLUSION THAT WHEREAS THE RE-ASSESSMENT WAS DONE ON ONE BASIS, THE ASSESSMENT WAS COMPLETED ON AN ENTIRELY DIFFERENT GROUND . A BARE PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE COMPAN Y HAS BEEN INDEED ASSESSED AS A BENEFICIARY AS AN ENTRY OPERATO R, INASMUCH AS THE INCOME OF `110896 HAS BEEN TREATED AS THE INCOM E OF THE ASSESSEE, AS @ 2%, HAVING BEEN RECEIVED TOWARDS PROVIDING ACCOMMODATION ENTRIES. 13. THAT BEING SO, THE GRIEVANCE SOUGHT TO BE RAISED B Y THE ASSESSEE IN THIS REGARD DOES NOT HAVE ANY MERIT. THE CIT(A), I N PARA 3 OF THE IMPUGNED ORDER, HAS TAKEN NOTE OF THE SUBMISSIONS MADE O N BEHALF OF THE ASSESSEE BEFORE THE CIT(A). PARA 3 (RELEVANT PORT ION) OF THE CIT(A)S ORDER READS AS FOLLOWS: GROUND NOS.1 & 2 PERTAINS TO THE VALIDITY OF NOTICE U/S 148. BEFORE ME, THE LD.AR SUBMITTED THAT THE AO HAS ARBITRARILY INITIATED THE PROCEEDINGS U/S 148 ON THE BASIS OF REPOR T FORM INV. WING. HE FURTHER SUBMITTED THAT THE AO WAS NOT ABLE TO CONFIRM AND PROVE THAT WHETHER APPELLANT COMPANY IS A BENEFI CIARY OF AN ENTRY OPERATOR OR WHETHER INFORMATION RECEIVED FROM THE ADDL.DIT IS IN RESPECT OF ASSESSEE COMPANY BEING A BENEFICIARY OR AN ENTRY OPERATOR. HE SUBMITTED THAT THE INFORMATION FROM AD DL.DIT(INV.) UNIT VI, NEW DELHI WAS RECEIVED ON 26.03.2008 AND TH E AO HAS NOT BOTHERED TO VERIFY THE CORRECTNESS OF THE INFORMA TION AND THE NATURE OF THE TRANSACTION AND ISSUED NOTICE U/S 148 ON 28.03.2008 I.E. IN JUST TWO DAYS OF ISSUE OF LETTER BY ADDL.DIT. HE FURTHER SUBMITTED THAT THE AO INITIATED THE PROCEEDI NGS IN A HASTE MANNER WITHOUT VERIFYING THE CORRECTNESS OF THE INFORMATION RECEIVED FROM THE INV. WING. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD.AR AND PERUSED ORDER OF THE AO AND CASE RECORDS. THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. HIGHGAIN FINV EST PVT. LTD.(2008) 304 I.T.R.325 HELD THAT THE REASONS RECORD ED BY THE AO SPECIFICALLY RELATED TO A PARTICULAR TRANSACTION, BY WAY OF AN EXAMPLE, IN RESPECT OF THE CONCERNED FINANCIAL YEAR WHICH WOULD SUGGEST THAT A BOGUS ENTRY OR A TRANSACTION WAS FOUND TO BE I.T.A. NO.1212/DEL./2011 (A.Y. : 2001-02) 6 CORRECT, IT MAY BE DIFFICULT TO SAY THAT INCOME WHIC H IS THE SUBJECT MATTER OF THE BOGUS ENTRY, HAD NOT ESCAPED ASSESSMENT. T HERE COULD BE NO DOUBT THAT ON THE FACTS THERE WAS A LIVE LINK OR A DIRECT NEXUS BETWEEN THE MATERIAL WHICH SUGGESTED ESCAP EMENT OF INCOME AND THE INFORMATION ON THE OTHER HAND, LD .AR FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER UNDER APPEAL. THE B ASIS OF WHICH IT COULD BE CONDUCTED THAT INCOME HAD ESCAPED ASSESSMENT. THUS, THERE WAS MATERIAL TO PRIMA FACIE COME TO THE CONCLUSION THAT THE ASSESSEE HAD NOT DISCLOSED ALL RELEVAN T FATS TRULY AND FULLY. THE CASES RELIED UPON BY THE LD.AR WERE GIVEN ON DIFFERENT FACTS AND THEREFORE, NOT APPLICABLE TO THE FACTS OF THE APPELLANTS CASE. ON GOING THROUGH THE EVIDENCES ON RECORD, I FIND THA T THE AO HAS FOLLOWED ALL THE PROCEDURES LAID DOWN IN THE I .T. ACT AND RECORDED REASONS WHICH HAD THE LINK WITH THE MATERIAL IN POSSESSION. FURTHER, THE APPELLANT HAS NOT POINTED OUT ANY SPECIFIC INFIRMITY IN THE ACTION OF THE AO, AS FAR AS REOPENING OF ASSESSMENT AS PER THE PROVISION OF SECTION 147 IS CONCERNED . HENCE, IT IS CLEAR THAT THE REASON TO BELIEVE RECORDE D BY THE AO, WERE HAVING RATIONAL NEXUS/RELEVANT TO THE FATS OF TH E APPELLANT AND THE REOPENING WAS DONE BY THE AO AS PER THE PROVI SIONS OF THE I.T. ACT. HENCE, IT IS SEEN THAT THE NOTICE WAS I SSUED, WELL WITHIN THE TIME AND THE SAME WAS NOT BARRED BY LIMITA TION. I, THEREFORE, UPHOLD THE INITIATION OF PROCEEDING U/S 1 47 AND THE ISSUANCE OF NOTICE U/S 148 OF THE I.T. ACT, 1961. HEN CE, GROUND NO.1 & 2 ARE REJECTED. 14. EVIDENTLY, BESIDES THE AVERMENT MADE BEFORE US, AS DISCUSSED HEREINBEFORE, THE ASSESSEE HAS NOT BEEN ABLE TO MAKE OUT ANY DISCREPANCY, EITHER IN THE AOS OR THE CIT(A)S ORDER IN THIS REGARD. THE REOPENING WAS BASED ON THE INFORMATION FORWARDED BY T HE INV. WING OF THE DEPARTMENT AND THE INCOME OF THE ASSESSEE COMPANY W AS FOUND TO HAVE ESCAPED ASSESSMENT. THE REOPENING OF THE COMPLETED ASSESSMENT, IN OUR CONSIDERED OPINION, WAS, THEREFORE, EN TIRELY IN ACCORDANCE WITH LAW. 15. GROUND NO. 1 TO 4 ARE ACCORDINGLY REJECTED. 16. GROUND NO.5 STATES THAT THE CIT(A) HAS ERRED IN CO NFIRMING THE ADDITION OF `110896 ON ACCOUNT OF ALLEGED COMMISSION RECEIVED FROM I.T.A. NO.1212/DEL./2011 (A.Y. : 2001-02) 7 THE ALLEGED ACCOMMODATION ENTRIES PROVIDED BY THE ASSE SSEE COMPANY. 17. WHILE MAKING THE ADDITION, THE AO OBSERVED, INTE R ALIA, THAT THE ASSESSEE COMPANY HAD RECEIVED THE COMMISSION @ 2% TOWARDS PROVIDING ACCOMMODATION ENTRIES. THE AO, ACCORDINGL Y, ADDED THE AMOUNT OF `110896, TREATING IT AS INCOME OF THE ASSESSE E. 18. THE CIT(A) CONFIRMED THIS ADDITION. 19. THE LD.COUNSEL FOR THE ASSESSEE HAS, IN THIS REGARD, C ONTENDED THAT THE ASSESSEE HAD FILED COMPLETE EVIDENCE BEFORE TH E AO (COPIES AT APB 45-73); THAT THIS EVIDENCE WAS IN THE SHAPE OF COP Y OF SALE BILL OF SHARES ISSUED BY R.B. RELAN AND CO. (APB 45), COPY OF C ONTRACT FOR SALE OF SHARES ISSUED BY THE H.B. RELAN AND CO. (APB 46), EV IDENCE OF SHARES SOLD TO B.B. RELAN & CO. (APB 47-48), COPY OF B ANK STATEMENT OF THE ASSESSEE COMPANY FOR THE YEAR UNDER CONSIDERATION (A PB 49-56), BANK FLOW STATEMENT FOR THE YEAR UNDER CONSIDERATION (APB 57-58), DETAILS OF ENTRIES CREDITED TO THE BANK ACCOUNT OF TH E ASSESSEE COMPANY ALONG WITH THE NAME OF THE PARTY AND NATURE OF THE TRANSACTION (APB 59-61), DETAILS OF INTEREST RECEIVED BY THE ASSESSEE COMPANY DURING THE YEAR CONSIDERATION (APB 62-68), A CONFIRMED COPY OF ACCOUNT OF PARTIES/EVIDENCE OF INTEREST EARNED BY THE ASSESSEE COMPANY ON DEPOSITS MADE (APB 63-68) AND A CONFIRMED COPY OF ACCOUNT OF OTHER DEPOSITS PAID AND/OR RECEIVED BACK D URING THE YEAR UNDER CONSIDERATION (APB 69-73); AND THAT THE CIT(A) WHILE ILLEGALLY CONFIRMING THE ADDITION MADE, ERRED IN IGNORING ALL THOSE VOLUMINOUS DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE. 20. THE LD.DR, ON THE OTHER HAND, HAS AGAIN RELIED O N THE IMPUGNED ORDER, IN THIS REGARD. 21. WITH REGARD TO THE ADDITION MADE, IT IS SEEN, THA T BEFORE THE CIT(A) THE ASSESSEE COMPANY HAD SUBMITTED THAT IT WAS AN NBFC ENGAGED IN THE BUSINESS OF FINANCING ACTIVITY AND PURC HASE AND SALE OF SHARES; THAT DURING THE YEAR, IT HAD SOLD 5000 EQUITY SHARES OF PATEL I.T.A. NO.1212/DEL./2011 (A.Y. : 2001-02) 8 CARE INDIA PVT. LTD. TO A STOCK BROKER, NAMELY, M/S H .B. RELAN & CO.; THAT ON THE SALE, THE ASSESSEE HAD EARNED A PROFIT OF `8 687; THAT THE SHARES HAD BEEN ACQUIRED BY THE ASSESSEE COMPANY IN FINAN CIAL YEAR 1997-98; THAT SUCH ACQUISITION OF SHARES HAD ALSO NOT BE EN DISPUTED BY THE AO AND THE TRANSACTION HAD BEEN ACCEPTED; THAT A PROPOS THE DEPOSIT OF `55,44,816 IN THE ASSESSEES COMPANY ACCOUNT, THE AO HAD TAKEN A WRONG AMOUNT; THAT FURTHER, THE CREDIT IN T HE BANK ACCOUNT WAS ON ACCOUNT OF INTEREST RECEIVED FROM VARIOUS PARTIES A ND/OR REFUND OF OLD DEPOSITS; THAT ALL THE TRANSACTIONS HAD BEEN CARRIE D OUT IN THE NORMAL COURSE OF THE BUSINESS OF THE ASSESSEE; THAT A COPY OF THE BANK ACCOUNT ALONG WITH NARRATION OF ENTRIES AND CONFIRMA TION HAD BEEN FILED BEFORE THE AO; THAT NO DEFECT WAS POINTED OUT BY THE AO THEREIN AND THE ADDITION HAD BEEN MADE ARBITRARILY WITHOUT BRIN GING ANY ADVERSE MATERIAL; THAT THE AO HAD NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THAT THE DEPOSITS OF THE AMOUNTS IN THE BANK ACCOUNT O F H.B. RELAN BELONGED TO THE ASSESSEE COMPANY OR THAT THE CASH/CLEARI NG HAD BEEN DEPOSITED BY A PERSON HIRED BY THE ASSESSEE COMPANY OR IT S RELATED PERSON; THAT NOTHING HAD ALSO BEEN BROUGHT ON RECORD TO PROVE THAT CASH HAD BEEN PAID BY THE ASSESSEE COMPANY IN LIEU OF CH EQUES RECEIVED; THAT NEITHER THE NATURE OF BUSINESS OF THE A SSESSEE COMPANY, NOR THE OLD SHARES HELD BY IT HAD BEEN DISPUTED BY THE AO; THAT THE CREDIT IN THE BANK ACCOUNT WAS IN RESPECT OF INTEREST INCOME RECEIVED OR RECEIVED BACK BY THE ASSESSEES OWN MONEY ADVANCED TO THE PARTIES IN THE NORMAL COURSE OF ITS BUSINESS; THAT NO MATERIAL O R EVIDENCE OR DOCUMENTS OR STATEMENT HAD BEEN CONFRONTED BY THE AO TO THE ASSESSEE COMPANY; AND THAT THE AO HAD NOT VERIFIED THE CORRECTNESS OF THE INFORMATION OF THE INV. WING. 22. THE MATTER WAS REMANDED BY THE CIT(A) TO THE FIL E OF THE AO FOR HIS COMMENTS. 23. IN THE REMAND REPORT DATED 22.2.10, THE AO HAD REBUTTED THE ASSESSEES CLAIM STATING, INTER ALIA, THAT THE ASSESSEE HAD D EPOSITED I.T.A. NO.1212/DEL./2011 (A.Y. : 2001-02) 9 CASH IN ITS BANK ACCOUNT ON VARIOUS DATES DURING THE PE RIOD UNDER CONSIDERATION; AND THAT THE ASSESSEE HAD REMAINED UNABLE TO SUBSTANTIATE ITS CLAIM WITH SUPPORTING DOCUMENTARY EVID ENCE, IN THE ASSESSMENT PROCEEDINGS. 24. ON BEING CONFRONTED WITH THE AOS REMAND REPORT, THE ASSESSEE COMPANY DID NOT FILE ANY REJOINDER BEFORE THE CIT(A ). 25. THE CIT(A) TOOK INTO ACCOUNT OF THE ABOVE. THI S INCLUDED THE EVIDENCE NOW POINTED OUT AS HAVING BEEN FILED BY THE ASSESSEE. IT WAS ON DUE CONSIDERATION OF THE MATTER THAT THE CIT(A) F OUND THAT THE ASSESSEE HAD REMAINED UNABLE TO EXPLAIN THE CREDIT BALA NCE OF `5544816 IN ITS BANK ACCOUNTS. THOUGH IT HAD BEEN HE LD OUT BY THE ASSESSEE THAT THE CREDIT IN THE BANK ACCOUNT WAS FROM IN TEREST RECEIVED FROM VARIOUS PARTIES AND/OR REFUND OF OLD DE POSITS CONCERNING TRANSACTIONS CARRIED OUT IN THE NORMAL COURSE OF THE A SSESSEES BUSINESS, FROM THE RETURNED INCOME FILED BY THE ASSESSEE, IT WAS SEEN THAT THE ASSESSEE HAD DECLARED A TOTAL INCOME OF `13047 ONLY, THOUGH THE ASSESSEE CLAIMED TO HAVE ENGAGED IN THE BUSINESS OF PU RCHASE AND SALE OF SHARES AND IN FINANCING ACTIVITY. THE CATEGOR ICAL FACTUAL OBSERVATION OF THE CIT(A) THAT THE ASSESSEE HAD NOT BEEN ABLE TO ESTABLISH THAT THE TRANSACTIONS ROUTED THROUGH ITS BANK ACCOUNTS, INCLUDING THE CASH DEPOSITS, WERE GENUINE BUSINESS TRANSAC TIONS, REMAINS UNHINGED. FURTHER, THE ASSESSEE COMPANY WAS SHOWN TO HAVE DECLARED A LOSS OF `201313 IN SHARE TRADING. HOWEVER, THE GENUINENESS OF SUCH SHARE TRADING TRANSACTIONS REMAINED U N- ESTABLISHED, SINCE NO DOCUMENTARY EVIDENCE WAS FILED TO PROVE SUCH GENUINENESS. THIS ASPECT OF THE MATTER HAS ALSO REMAINED UN- CONTROVERTED. FURTHERMORE, THOUGH THE COMMISSION REC EIVED, AMOUNTING TO `461900 AND COMMISSION PAID, AMOUNTING T O `214260 HAD BEEN SHOWN, THERE WAS NO EVIDENCE FILED OF EITHER SERVICES RENDERED FOR RECEIPT OF COMMISSION OR OF SERVICES OBTAI NED FOR PAYMENT OF COMMISSION. MOREOVER, LIKEWISE, THOUGH AN AMOUNT O F `180000 HAD I.T.A. NO.1212/DEL./2011 (A.Y. : 2001-02) 10 BEEN CLAIMED IN THE P&L A/C OF THE ASSESSEE COMPANY AS SA LARY PAID, AGAIN, NO EVIDENCE TO SUPPORT SUCH COMMISSION, WAS FURNI SHED. 26. IT WAS FROM THE ABOVE THAT THE CIT(A) CONCLUDED AND, IN OUR CONSIDERED CONSIDERATION, CORRECTLY SO, THAT THE ASSESSEE COMPANY HAD NOT BEEN CARRYING ON ANY ACTUAL BUSINESS ACTIVITY. TH E ADDITION OF `110896 WAS, THEREFORE, RIGHTLY CONFIRMED BY THE CIT (A), AND WE HEREBY UPHOLD SUCH ACTION OF THE CIT(A). ACCORDING LY, GROUND NO.5 IS ALSO REJECTED. 27. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13.05.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: MAY 13, 2011. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-XVII, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT