M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA V. INCOME TAX OFFICER, WARD-4-1, JAIPUR

ITA 1418/JPR/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8825 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Assessee Lawyers: DILEEP SHIVPURI
• Keywords: Unexplained cash credit; Search and seizure; Tangible material; Accommodation entries; Scheme of amalgamation; Reason to believe; Reassessment proceedings; Borrowed satisfaction; Set aside
• Section: 143(3); 142(1); 153A; 205; 195; 143(2); 43; 48; 13; 147; 68; 148; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1418/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2008-09 M/S SHREE SILICA PRODUCT PVT. LTD. (NOW M/S RAJSHREE ALLOYS INDIA LTD.) (FORMERLY BADAYA ISPAT LTD.) 17, NEAR HOTEL AAKASH, IC BOSE ROAD, HOWRAH, KOLKATA CUKE VS. ITO, WARD-4(1), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADCB4084H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. DILEEP SHIVPURI (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SH. K. C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 03/12/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 07/01/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, UDAIPUR DATED 28.09.2018 WHEREIN THE ASSESSEE HAS T AKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF THE ORDER PASSED BY AO U/S 147 OF THE I T. ACT, 1961. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING AN ADDITION OF RS. 45 LACS U/S 68 BY TREATING THE SHAR E CAPITAL MONEY RECEIVED FROM THE FOLLOWING PARTIES AS UNEXPLAINED. S. NO. NAME OF COMPANY AMOUNT 1. VIP LEASING & FINANCE PVT. LTD. RS. 15 LACS 2. SINGHAL SECURITIES PVT. LTD., RS. 15 LACS 3. FINANCE LEASE & FINANCE INDIA LTD. RS. 15 LACS TOTAL RS. 45 LACS ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 2 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT A SEARCH AND SURVEY ACTION WAS CARRIED OUT ON SH. SURENDRA KUMAR JAIN AND HIS GROU P BY INVESTIGATION WING, NEW DELHI ON 14.09.2010 WHEREIN VARIOUS INCRIMINATI NG DOCUMENTS WERE FOUND AND SEIZED WHICH SHOWS THAT HE WAS ENGAGED IN PROVI DING ACCOMMODATION ENTRY THE VARIOUS CONCERN BASIS THE SAID INFORMATIO N. THE ASSESSING OFFICER ISSUED NOTICE U/S 148 DATED 26.03.2015 STATING THAT THE ASSESSEE COMPANY HAS OBTAINED BOGUS ACCOMMODATION ENTRY OF SHARE CAPITAL /SHARE PREMIUM/ LOAN AMOUNTING TO RS. 45,00,000/- WHICH HAS ESCAPED ASSE SSMENT U/S 147 OF THE ACT. IN RESPONSE, THE SAID NOTICE, THE ASSESSEE FIL ED ITS RETURN OF INCOME ON 22.12.2015 DECLARING TOTAL INCOME AT NIL DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE COMPANY WAS ASKED TO JUST IFICATION SHARE CAPITAL MONEY RECEIPT DURING THE YEAR. IN ABSENCE OF ANY RE SPONSE RECEIPT FROM THE ASSESSEE COMPANY AND RELYING ON THE STATEMENT OF TH E SH. SURENDRA KUMAR JAIN. IT WAS HELD BY THE ASSESSING OFFICER. THE ASS ESSEE HAS INTRODUCED ACCOUNTING CASH AMOUNTING TO RS. 45,000,00/- IN THE FORM SHARE CAPITAL THE SOURCE OF WHICH COULD NOT BE EXPLAINED AND THE SAME WAS TREATED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. ON APPEA L, THE LD. CIT(A) HAS SUSTAINED THE SAID ADDITION AND NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT A PERUSAL OF THE NOTICE U/S 148 ISSUED ON 27.03.2015 TO REOPEN THE A SSESSMENT OF M/S RAJSHREE ALLOYS INDIA LTD. FOR A.Y. 2008-09 SHOWS THE FOLLOW ING NAME AND ADDRESS: 'M/S SHREE SILICA PRODUCTS PVT. LTD., SHREE SILICA PRODUCTS, F 947, ROAD NO. 14, VKIA AREA, JAIPUR, RAJASTHAN 302013 IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAD VER IFIED FROM THE REGISTRAR OF COMPANIES AND CONFIRMED THAT THE NAME OF M/S SHR EE SILICA PRODUCTS PVT. LTD. WAS CHANGED FIRST TO 'M/S BADAYA ISPAT PVT. LT D' AND THEN TO 'M/S ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 3 RAJSHREE ALLOYS INDIA LTD.' THE AO HIMSELF ADMITS T HAT THE NOTICE U/S 148 OF THE ACT WAS SERVED BY AFFIXTURE ON 31.03.2015 AT TH E ADDRESS GIVEN ABOVE. A COPY OF THE NOTICE U/S 148 WAS RECEIVED BY THE A/R OF THE APPELLANT ONLY ON 27.10.2015. IT IS PERTINENT TO MENTION HERE THAT TH E RETURN FOR A.Y. 2009-10 WAS FILED WITH ITO, WARD 1(1), JAIPUR ON 30.03.2010 SHOWING THE FOLLOWING NAME AND ADDRESS: 'BADAYA ISPAT LIMITED, 17, NEAR HOTEL AAKASH, I.C. BOSE ROAD, HOWRAH, WEST BENGAL 711101' THEREFORE, IT WAS WITHIN THE KNOWLEDGE OF THE AO, H AD HE TRIED TO VERIFY THE NAME AND ADDRESS BEFORE ISSUE OF NOTICE U/S 148 THA T THE CURRENT NAME AND ADDRESS WAS AS ABOVE, AND THE CURRENT JURISDICTION WAS WITH ITO, WARD 1(1) WHEREIN THE SAID RETURN WAS FILED. THEREAFTER, ON 1 8.11.2015, THE APPELLANT'S COUNSEL INFORMED THE AO ABOUT THE CURRENT ADDRESS A ND THE CONTENTS OF THE SAID COMMUNICATION READS AS UNDER: 'WITH REFERENCE TO ABOVE AND YOUR AFORESAID LETTER, WE ARE TO SUBMIT AS UNDER: 1. THE NAME OF SHREE SILICA PRODUCTS PVT. LTD. HAS BEEN CHANGED TO BADAYA ISPAT LIMITED AND THEREAFTER CHANGED TO M/ S RAJSHREE ALLOYS INDIA LIMITED. ADDRESS OF REGISTERED OFFICE OF THE COMPANY IS AS UNDER: 17, NEAR AAKASH HOTEL, I. C. BOSE ROAD, HOWRAH, WES T BENGAL ADDRESS OF DIRECTOR OF COMPANY SHRI SURESH KUMAR IS AS UNDER: E-8, BADAYA BHAWAN, KANTI CHANDRA ROAD, BANI PARK, JAIPUR. ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 4 IT IS THUS REQUESTED TO MAKE ALL THE CORRESPONDENCE AT THE ADDRESS OF REGISTERED OFFICE OF COMPANY OR ALTERNATIVELY AT TH E RESIDENTIAL ADDRESS OF DIRECTOR OF THE COMPANY. 2. IT IS SUBMITTED THAT JURISDICTION OF ASSESSEE CO MPANY LIES WITH INCOME TAX OFFICER, WARD 1(1), JAIPUR AS PER P AN JURISDICTION AND ASSESSEE COMPANY IS FILING ITS RETURN OF INCOME WITH INCOME TAX OFFICER, WARD 1(1), JAIPUR. THUS ANY CORRESPOND ENCE OR NOTICE ISSUED BY YOUR GOOD SELF TO COMPANY IS WITHOUT JURI SDICTION AND THEREFORE VOID ABINITIO 4. IN THIS CONNECTION, IT IS RELEVANT TO REFER TO T HE BINDING DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V. POONAM CHAND SURANA [2014] 221 TAXMAN 0151 (RAJ.) IN WHICH NOTICE U/S 148 ISSUED FROM A WRONG JURISDICTION WAS STRUCK DOWN AS INVALID. THAT EVEN IF THE AO WAS NOT AWARE OF THE CORRECT ADDRESS EARLIER, HE WAS MADE AWARE OF T HE SAME VIDE LETTER DATED 18.11.2015. A PERUSAL OF THE ADDRESS ON THE ASSESS MENT ORDER WOULD SHOW THAT IT HAS BEEN SENT ON 31.03.2016 ON THE FOLLOWIN G ADDRESS: M/S SHREE SILICA PRODUCTS PVT. LTD (NOW M/S BADAYA ISPAT PVT. LTD.) F-947, ROAD NO. 14, VKI AREA, JAIPUR ' HENCE, THE ASSESSMENT ORDER WAS PASSED IN THE NAME OF A NON-EXISTENT COMPANY AND WITH WRONG ADDRESS. 5. THE CIT(A) HAS DEALT WITH THIS ISSUE IN THE FOLL OWING WORDS: ' 3.2 I HAVE CONSIDERED THE FACTS OF THE CASE, GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLAN T. IT IS SEEN THAT BOTH ARE THE NAME OF THE ASSESSEE COMPANY AND THERE FORE ON THIS ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 5 PROCEDURAL DEFECT, THE ORDER CAN'T BE SAID TO BE IL LEGAL. ACCORDINGLY THIS GROUND OF APPEAL IS DISMISSED.' IN OTHER WORDS, HE TREATED THIS TO BE A MERE PROCED URAL DEFECT, AND DISMISSED THE OBJECTION ACCORDINGLY. IT IS PERTINENT, AT THIS JUNCTURE TO REFER TO THE CASE OF SPICE ENTERTAINMENT LTD. V. COMMISSIONER OF SERVICE TAX 2012 (280) ELT 43 (DEL.), IN WHICH AT PARA 11 IT HAS BEEN SO STATED: '11. AFTER SANCTION OF THE SCHEME ON 11TH APRIL, 20 04, THE SPICE CEASED TO EXIST W. E.F. 1ST JULY, 2003. EVEN IF SPI CE HAD FILED THE RETURNS, IT BECAME INCUMBENT UPON THE INCOME-TAX AU THORITIES TO SUBSTITUTE THE SUCCESSOR IN PLACE OF THE SAID 'DEAD PERSON'. WHEN NOTICE UNDER SECTION 143(2) WAS SENT, THE APPELLANT / AMALGAMATED COMPANY APPEARED AND BROUGHT THIS FACT TO THE KNOWL EDGE OF THE AO. HE, HOWEVER, DID NOT SUBSTITUTE THE NAME OF THE APPELLANT ON RECORD. INSTEAD, THE ASSESSING OFFICER MADE THE ASS ESSMENT IN THE NAME OF M/S SPICE WHICH WAS NON-EXISTING ENTITY ON THAT DAY. IN SUCH PROCEEDINGS ASSESSMENT ORDER PASSED IN THE NAM E OF M/S SPICE WOULD CLEARLY BE VOID. SUCH A DEFECT CANNOT BE TREA TED AS PROCEDURAL DEFECT. MERE PARTICIPATION BY THE APPELLANT WOULD B E OF NO EFFECT AS THERE IS NO ESTOPPEL AGAINST LAW.' 6. IT WAS FURTHER SUBMITTED THAT IN A RECENT DECISI ON, THE HON'BLE SUPREME COURT HAS UPHELD THE VIEW THAT ISSUANCE OF JURISDICTIONAL NOTICE AND ASSESSMENT ORDER THEREAFTER PASSED IN NAME OF N ON-EXISTING COMPANY, I.E., AMALGAMATING COMPANY HAVING CEASED TO EXIST A S A RESULT OF APPROVED SCHEME OF AMALGAMATION, IS A SUBSTANTIVE ILLEGALITY AND NOT A PROCEDURAL VIOLATION OF NATURE ADVERTED TO IN SECTION 292B AND , HENCE, WITHOUT JURISDICTION, WAS TO BE SET-ASIDE - PRINCIPAL COMMI SSIONER OF INCOME-TAX V. MARUTI SUZUKI INDIA LTD. [2019] 107 TAXMANN.COM 375 (SC). IN VIEW OF THE ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 6 DECISION OF THE HON'BLE SUPREME COURT CITED ABOVE, THE ISSUE OF NOTICE U/S 148, AND PASSING OF ASSESSMENT ORDER IN INCORRECT N AME, MAY BE TREATED AS NULL AND VOID, AND THE ASSESSMENT SO FRAMED MAY BE QUASHED. 7. IT WAS FURTHER SUBMITTED BY THE LD AR THAT A PER USAL OF THE REASONS RECORDED BY THE AO WOULD SHOW THAT HE HAD RECEIVED INFORMATION FROM THE INVESTIGATION WING OF DELHI IN THE FOLLOWING MANNER : 'AS INTIMATED BY THE DGIT (INV.) THE ASSESSEE M/ S SHREE SILICA PRODUCTS PVT. LTD. HAS ALSO OBTAINED BOGUS ACCOMMODATION ENTRIES OF SHARE CAPITAL/ SHARE PREMIUM/ LOAN AS PER THE FOLLOWING DETAILS: ENTRY PROVIDING COMPANY NATURE OF ENTRY AMOUNT VIP LEASING & FINANCE P. LTD. BOGUS SHARE CAPITAL/SHARE PREMIUM/LOAN 15,00,000/- SINGHAL SECURITIES P. LTD. BOGUS SHARE CAPITAL/ SHARE PREMIUM/ LOAN 15,00,000/ - FINAGE LEASE & FINANCE INDIA LTD. BOGUS SHARE CAPITAL/SHARE PREMIUM/LOAN 15,00,000/- TOTAL 45,00,000/- THE ABOVE DETAILS REGARDING THE ACCOMMODATION ENTRI ES HAVE BEEN FORWARDED BY THE DIT (INV.)-II, NEW DELHI THROUGH HIS OFFICE LETTER F.NO. DIT/(INV.)-II/ U/ S 148/ 2012-13/ 293 DATED 15TH MARCH, 2013. THEREFORE , LOOKING TO THE FACTS MENTION ABOVE, IT IS SEEN THAT THE ABOVE PERSON IS LIABLE TO PAY TAX ON BOGUS ACCOMMODATION ENTRIES OF SHARE CAPITAL/ SHARE PREMIUM/ LOAN. HENCE, I HAVE REASON TO BELIEVE THAT INCOME OF RS. 45,00,000/ - ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 7 HAS ESCAPED FROM ASSESSMENT WITHIN THE MEANING OF S ECTION 147 OF THE I.T. ACT, 1961. THEREFORE, IT IS A FIT CASE FOR ISSUE NOTICE U/ S 148 OF THE I.T. ACT, 1961.' 8. IT IS CLEAR FROM THE LANGUAGE OF THE REASONS REC ORDED THAT THE ASSESSING OFFICER DID NOT HAVE IN HIS POSSESSION ANY MATERIAL OTHER THAN A LETTER OF THE DIT(INV.) DATED 15.03.2013. HENCE, HE CARRIED OUT N O INDEPENDENT VERIFICATION AT HIS END, BUT BLINDLY ACCEPTED WHATEVER HAD BEEN WRITTEN IN THE SAID LETTER DATED 15.03.2013. HIS SATISFACTION, THEREFORE, IS A CASE OF 'BORROWED SATISFACTION'. ATTENTION IS DRAWN TO THE DECISION O F THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF HARIKISHAN SUNDERLAL VIRMANI V . DY. CIT [2017] 394 ITR 146 (GUJARAT) WHEREIN IT WAS STATED AS UNDER: '5.3 THUS FROM THE REASONS RECORDED, THE REOPENING OF THE ASSESSMENT IS ON THE INFORMATION/ DATA SUPPLIED BY THE OFFICE OF THE PRINCIPAL DIRECTOR OF INCOME-TAX (INVESTIGATION), AHMEDABAD AND THE INFOR MATION RECEIVED FROM THE PRINCIPAL DIRECTOR OF INCOME-TAX (INVESTIG ATION), AHMEDABAD VIDE HIS CONFIDENTIAL LETTER DATED 8/3/2016. ON TH E PLAIN READING OF THE REASONS RECORDED WHAT EMERGES IS THAT THE AO ON CONSIDERING THE INFORMATION RECEIVED FROM THE PRINCIPAL DIRECTOR OF INCOME TAX (INVESTIGATION) AHMEDABAD, REASSESSMENT PROCEEDINGS HAVE BEEN INITIATED ON THE GROUND THAT THE INCOME HAS ESCAPED ASSESSMENT. HOWEVER, THERE IS NO ASSERTION REGARDING THE BASIS ON WHICH MATERIAL ON RECORD, HE HAS COME TO SUCH CONCLUSION. THEREFORE, THE MATERIAL ON THE BASIS OF WHICH THE AO SEEKS TO ASSUME JURISDICTION UNDER SECTION 147 OF THE ACT IS THE INFORMATION RECEIVED FROM AN EXTERNA L SOURCE VIZ. THE PRINCIPAL DIRECTOR OF INCOME TAX (INVESTIGATION), A HMEDABAD. IT CANNOT BE DISPUTED THAT ON THE BASIS OF THE INFORMATION RE CEIVED FROM ANOTHER AGENCY, THERE CANNOT BE ANY REASSESSMENT PROCEEDING S. HOWEVER, AFTER CONSIDERING THE INFORMATION/ MATERIAL RECEIVED FROM OTHER SOURCE, AO IS ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 8 REQUIRED TO CONSIDER THE MATERIAL ON RECORD IN CASE OF ASSESSEE AND THEREAFTER IS REQUIRED TO FORM AN INDEPENDENT OPINI ON ON THE BASIS OF THE MATERIAL ON RECORD THAT INCOME HAS ESCAPED ASSESSME NT. WITHOUT FORMING SUCH AN OPINION, SOLELY AND MECHANICALLY RE LYING UPON THE INFORMATION RECEIVED FROM OTHER SOURCE, THERE CANNO T BE ANY REASSESSMENT FOR THE VERIFICATION.... 9. IT WAS ACCORDINGLY SUBMITTED THAT THE HON'BLE G UJARAT HIGH COURT HELD THAT THE AO CANNOT ACT MECHANICALLY ON THE BASIS OF INFORMATION RECEIVED FROM ANOTHER SOURCE. SIMILAR SENTIMENTS WERE EXPRESSED B Y THE BOMBAY HIGH COURT IN THE CASE OF (I) PRINCIPAL COMMISSIONER OF INCOME-TAX -5 V. SHODIMAN INVESTMENTS (P.) LTD. [2018] 93 TAXMANN.COM 153 (BOMBAY); (II) BY THE CALCUTTA HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME-TAX, KOLKATA V. MORE OVERSEAS [2018] 97 TAXMANN.COM 657 (CALCUTTA); (III) AND BY THE DELHI HIGH COURT IN THE CASE OF SABH INFRASTRUCTURE LTD. V. ASST. CIT, WP(C) 1357/2016 DELIVERED ON 25.09.2017. 10. IT WAS SUBMITTED THAT A PERUSAL OF THE REASONS RECORDED, AS REPRODUCED ABOVE, SHOWS THAT THE AO HAS COMPLETELY RELIED ON T HE LETTER OF THE DIT(INV.), DELHI MECHANICALLY. IN THE ASSESSMENT ORDER, THE AO STATES THAT IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH SHRI SURENDRA KUMAR JAIN HAVE EXPLAINED HIS MODUS OPERANDI (SEE PAGE 7 OF THE ASS ESSMENT ORDER). FURTHER, HE HAS ALSO STATED IN THE LAST PARA ON PAGE 8 THAT STATEMENT OF SHRI RAVINDER GOEL, ONE OF THE BROKERS, WAS ALSO RECORDED. NONE O F THIS FINDS MENTION IN THE REASONS RECORDED. MOREOVER, IT IS CLEAR THAT COPIES OF STATEMENTS WERE NOT WITH THE AO. THE AO HAS ALSO MENTIONED ABOUT ENQUIRIES M ADE BEFORE AND DURING SEARCH. THIS ALSO DOES NOT FIND MENTION IN THE REAS ONS RECORDED. HENCE, IT IS CLEAR FROM THE REASONS RECORDED, THAT EXCEPT FOR TH E LETTER OF THE DIT(INV.), DELHI, THE AO DID NOT HAVE ANY OTHER EVIDENCE WITH HIM TO SUPPORT OR AUTHENTICATE WHAT WAS WRITTEN IN THE LETTER OF THE DIT(INV.), DELHI. THE ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 9 HON'BLE DELHI HIGH COURT IN THE CASE OF SABH INFRASTRUCTURE LTD. HAS STATED AS FOLLOWS: '11. THUS IT IS ALSO NOW WELL SETTLED THAT THE REAS ONS TO BELIEVE HAVE TO BE SELF-EXPLANATORY. THE REASONS CANNOT BE THEREAFT ER SUPPORTED BY ANY EXTRANEOUS MATERIAL. THE ORDER DISPOSING OF THE OBJ ECTIONS CANNOT ACT AS A SUBSTITUTE FOR THE REASONS TO BELIEVE AND NEITHER CAN ANY COUNTER- AFFIDAVIT FILED BEFORE THIS COURT IN WRIT PROCEEDIN GS. ' THUS WE HAVE TO CONFINE OURSELVES TO WHAT HAS BEEN WRITTEN IN THE REASONS RECORDED BY THE AO. A PERUSAL OF THE REASONS RECORD ED SHOW THAT THE AO SPEAKS OF ONLY A LETTER RECEIVED FROM DIT(INV.), DE LHI AND THAT ALSO MORE THAN 2 YEARS EARLIER. NO OTHER EVIDENCE OR PROOF HA S BEEN REFERRED TO. THUS THERE IS NO MATERIAL WITH THE AO, BUT FOR THE LETTE R, TO FORM AN INDEPENDENT OPINION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED A SSESSMENT. HE HAS, THEREFORE, ACCEPTED THE SATISFACTION OF THE DIT(INV .), DELHI TO BE HIS OWN. THUS, THIS IS A CASE OF 'BORROWED SATISFACTION'. 11. IT WAS FURTHER SUBMITTED THAT EVEN ON MERITS, T HERE IS NO CASE WITH THE AO TO PROVE THAT THE CREDITS APPEARING IN THE BOOKS OF THE ASSESSEE IS ASSESSEES OWN MONEY. BRIEFLY PUT, THE ASSESSEE COM PANY HAS RECEIVED THE FOLLOWING AMOUNTS DURING THE YEAR: VIP LEASING & FINANCE CO. 15,00,000/- SINGHAL SECURITIES P. LTD. 15,00,000/- FINAGE LEASE & FINANCE INDIA LTD. 15,00,000/-. IN SUPPORT OF THE FACT THAT THESE CREDITS ARE GENUI NE, THE ASSESSEE HAS FURNISHED THE FOLLOWING EVIDENCE: ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 10 VIP LEASING & FINANCE PVT. LTD: SHARE APPLICATION FORM CONFIRMATION OF ACCOUNTS ITR ACKNOWLEDGEMENT FINANCIAL STATEMENTS LIST OF DIRECTORS BANK STATEMENT ASSESSMENT ORDERS FOR A.Y. 2005-06 TO 2011-12 PASSE D U/S 153C/153 SINGHAL SECURITIES PVT. LTD. SHARE APPLICATION FORM CONFIRMATION OF ACCOUNTS DIRECTOR'S CONFIRMATION ITR ACKNOWLEDGEMENT FINANCIAL STATEMENTS LIST OF DIRECTORS ASSESSMENT ORDERS FOR A.Y 2005-06 TO 2011-12 PASSED U/S 153C/153A FINAGE LEASING & FINANCE INDIA LTD. SHARE APPLICATION FORM CONFIRMATION OF ACCOUNT DIRECTOR'S CONFIRMATION ITR ACKNOWLEDGMENT FINANCIAL STATEMENTS ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 11 LIST OF DIRECTORS FORM NO. 32 ASSESSMENT ORDERS FOR A.Y. 2005-06 TO 2011-12 PASSE D U/S 153C/ 153A THUS, THE FOLLOWING FACTS WHICH EMERGE FROM THE CAS E NEED TO BE HIGHLIGHTED: 1. THERE IS ENOUGH EVIDENCE IN THE NATURE OF SHARE APP LICATION FORM, ITR ACKNOWLEDGMENT, BANK ACCOUNTS ETC. TO PROVE THAT TH E CREDITORS WERE GENUINE, THEIR IDENTITY WAS PROVED, AND THAT THEY HAD THE FI NANCIAL WHEREWITHAL TO ADVANCE THE CREDITS, AND THAT SUCH A CREDIT WAS IND EED GIVEN. 2. THE ASSESSMENT OF THESE COMPANIES WERE FRAMED U/ S 153C/ 153A ON 28.03.2013 WHEREIN THEIR GENUINENESS WAS ACCEPTED A ND NO ADDITION OR ADVERSE FINDING WAS RECORDED IN THEIR CASES. A PERUSAL OF T HE ASSESSMENT ORDERS PASSED AFTER THE SEARCH PROVE THIS FACT. THE NOTICES U/S 1 48 WERE ISSUED ON 26.03.2015 FULL 2 YEARS AFTER THE SAID COMPANIES HAD BEEN ACCE PTED AS GENUINE. ONCE, THE COMPANIES ARE TREATED AS GENUINE, THEIR FINANCIAL C APABILITY IS PROVED, AND THEY ARE ASSESSED TO TAX EVEN AFTER THE SEARCH, THE CRED ITS GIVEN BY THEM CANNOT BE DOUBTED. 3. THE PAYMENT OF THE CREDITS WERE BY CHEQUE AND EA CH OF THE COMPANY HAS ENOUGH CAPITAL IN THEIR FINANCIALS TO HAVE THE CAPA CITY TO ADVANCE THE CREDIT: I) VIP LEASING & FINANCE PVT. LTD. SHARE CAPITAL + RESERVES 17,14,54,900.00 II) SINGHAL SECURITIES PVT. LTD. SHARE CAPITAL + RESERVES 10,49,97,000.00 III) FINAGE LEASING & FINANCE INDIA LTD. SHARE CAPITAL + RESERVES 14,57,42, 032.90 ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 12 4. STILL FURTHER THERE IS NO EVIDENCE OF INTRODUCTI ON OF CASH OF THE ASSESSEE ANYWHERE. HENCE, THERE IS NO PROOF TO SAY THAT THE UNACCOUNTED CASH OF THE ASSESSEE HAS BEEN ROUTED THROUGH THESE COMPANIES. 12. IT WAS FURTHER SUBMITTED THAT IN CASE OF M/S LA YAK FABRICS P. LTD. IN ITA NO. 491/DEL./2016 DECIDED BY THE ITAT, DELHI BE NCH, ON 15.07.2016 WHEREIN SINGHAL SECURITIES LTD. WAS THE CREDITOR. T HERE, THE ITAT HAS DELETED THE ADDITION MADE AND ONE OF THE GROUNDS IS THAT M/ S SINGHAL SECURITIES LTD. HAS NOT BEEN HELD TO BE A NON-EXISTENT ENTITY. 13. IN THIS CONNECTION IT IS IMPORTANT TO POINT OUT THAT IN SIMILAR CIRCUMSTANCES, WHEN THE EXISTENCE OF THE CREDITOR C OMPANIES WAS NEVER DOUBTED, THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. LOVELY EXPORTS (P.) LTD. [2008] 216 CTR 195 (SC) STATED AS UNDER: '2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UN DISCLOSED INCOME UNDER SECTION 68 OF IT ACT, 1961? WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF SHARE APPLIC ATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDER S WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PRO CEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENC E, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT. 2. SUBJECT TO ABOVE, SPECIAL LEAVE PETITION IS DISMISS ED.' (ANNEXURE A-08). IN OTHER WORDS, THE HON'BLE SUPREME COURT STATED VE RY CLEARLY AND LUCIDLY THAT WHATEVER ACTION THAT HAS TO BE TAKEN, SHOULD BE TAK EN IN THE HANDS OF THE CREDITORS, IF THE NAMES OF THE CREDITORS HAVE BEEN SUPPLIED TO THE AO. ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 13 14. THE CIT(A) HAS CITED, INTER ALIA, THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT V. SOPHIA FINANCE LTD.[1993] 205 ITR 98 (DELHI) TO SUPPORT HIS FINDING. THE ABOVE SAID DECISION IS NOT APPLICA BLE IN THIS CASE BECAUSE : I) IT IS A DECISION DELIVERED IN 1993 WHILE THE DEC ISION IN THE CASE OF LOVELY EXPORTS P. LTD. IS OF 2003; II) IT IS A DECISION OF THE DELHI HIGH COURT WHILE THE DECISION IN THE CASE OF LOVELY EXPORTS P. LTD. IS A DECISION OF THE HON'BLE SUPREME COURT AND OVER RIDES THE DECISION OF THE HIGH COURT; 15. IN ADDITION TO THE CASE OF LOVELY EXPORTS P. LTD. SUPRA, OTHER CASES CITED IN SUPPORT ARE: 1. CIT V. SUPERTECH DIAMOND TOOLS PVT. LTD. 229 TAXMAN 62 (RAJASTHAN); 2. CIT V. SHREE BARKHA SYNTHETICS LTD. 270 ITR 477 (RAJ.); 3. CIT V. POOJA AGARWAL [2011] ,D.B.ITA NO. 603/201 1 DELIVERED ON 11.0.2017 4. CIT V. FIRST POINT FINANCE LTD., 286 ITR 477 (R AJ); 5. CIT V. NIPUAN AUTO (P.) LTD. [2013] 89 DTR 342(D EL HC); 6. CIT V. VACMET PACKAGING (INDIA) PVT. LTD., 367 ITR 217(A11.). IN VIEW OF THE ABOVE, THE ADDITION OF RS. 45,00,000 /- MADE BY THE AO AND CONFIRMED BY THE CIT(A) NEEDS TO BE DELETED BOTH IN LAW AND ON FACTS. 16. THE LD. DR SUBMITTED THAT THE JURISDICTION OF T HE ASSESSEE M/S SHREE SILICA PRODUCTS PVT. LTD LIES WITH ITO, WARD-4(1), JAIPUR AS PER THE INFORMATION GATHERED FROM THE CBN PAN BASED QUERY-ITD SYSTEM. T HEREAFTER, THE NAME OF ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 14 THE ASSESSEE COMPANY HAS BEEN CHANGED AS M/S BADAYA ISPAT LTD AND ANOTHER PAN OF THE COMPANY IS LYING WITH ITO, WARD-1(1), JA IPUR. IT WAS SUBMITTED THAT THE CASE WAS SELECTED U/S 148 IN THE NAME OF M/S SH REE SILICA PRODUCTS PVT. LTD. AND NOT IN THE NAME M/S BADAYA ISPAT LTD. HENC E, THE JURISDICTION OVER THIS CASE LIES WITH ITO WARD 4(1) AND NOT WITH THE ITO , WARD-1(1), JAIPUR. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS RAISED THE SIMILAR CONTENTIONS AT THE TIME OF FILING OF OBJECTION U/S 148 OF THE I.T. ACT , 1961 AND THE SAME WAS DISPOSED OFF BY THE AO VIDE LETTER NO. 1790 DATED 0 3.12.2015. IT WAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER WAS HAVING TAN GIBLE MATERIAL IN THE FORM OF INFORMATION RECEIVED FROM DDIT (INV.), UNIT VI ( 2), NEW DELHI THAT THE ASSESSEE COMPANY HAS OBTAINED BOGUS ACCOMMODATION E NTRIES AMOUNTING TO RS. 45,00,000/- AND ACCORDINGLY ACTION WAS TAKEN U/ S 148 AFTER SEEKING NECESSARY APPROVAL FROM THE APPROPRIATE AUTHORITY. ON MERITS, IT WAS SUBMITTED THAT THE ASSESSEE WAS ASKED TO FURNISH JUSTIFICATIO N WITH REGARDING TO SHARE APPLICATION MONEY INTRODUCED BY PROVIDING AMPLE OPP ORTUNITIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HOWEVER NO REPLY WAS FILED BY THE ASSESSEE COMAPNY. FURTHER, ONLY DURING THE APPELLATE PROCEED INGS BEFORE THE LD. CIT(A), THE ASSESSEE COMPANY HAS FILED CERTAIN DOCUMENTATIO N AND THE LD CIT(A) AFTER GOING THROUGH THE DOCUMENTATION SUBMITTED BY THE AS SESSEE HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. IT WAS ACCO RDINGLY SUBMITTED THAT THERE IS NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT( A) AND THE SAME MAY KINDLY BE CONFIRMED. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN GROUND NO. 1, THE LD AR HAS RAISED T WO BROAD CONTENTIONS: FIRSTLY, THE NOTICE U/S 148 AND ASSESSMENT ORDER HAS BEEN PA SSED IN WRONG NAME AND ADDRESS AND SECONDLY, THERE IS NON-APPLICATION OF M IND BY THE ASSESSING OFFICER WHILE RECORDING REASONS BEFORE ISSUANCE OF NOTICE U /S 148 OF THE ACT. ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 15 18. REGARDING THE FIRST CONTENTION, IT IS NOTED THA T THE ASSESSEE COMPANY WAS ORIGINALLY INCORPORATED ON 8.02.1988 WITH CORPORATE IDENTITY NO. 17-04274 OF 1987-88 WITH NAME OF SHREE SILICA PRODUCTS PRIVATE LIMITED AND HAD APPLIED FOR AND ALLOTTED PAN NO. AACCS4046D WITH NAME AND ADDRE SS OF SHREE SILICA PRODUCTS PRIVATE LIMITED, F-947, ROAD NO. 14, VKI A REA, JAIPUR. THEREAFTER, ON 13.01.2008, CONSEQUENT UPON CHANGE OF NAME, A FRESH CERTIFICATE OF INCORPORATION WAS ISSUED TO THE ASSESSEE COMPANY BY THE ASSISTANT REGISTRAR OF COMPANIES, JAIPUR WITH CORPORATE IDENTITY NO. U2411 7RJ1988PTC004274 WITH NAME OF BADAYA ISPAT PRIVATE LIMITED WITH MAILING A DDRESS OF F-947-949, ROAD NO. 14, VKI AREA, JAIPUR. THE ASSESSEE COMPANY APP LIED FOR A FRESH PAN AND WAS ALLOTTED PAN NO. AADCB4084H WITH NAME AND ADDRE SS OF BADAYA ISPAT PRIVATE LIMITED, F-947, ROAD NO. 14, VKI AREA, JAIP UR. THEREAFTER, THE NAME OF THE COMPANY WAS CHANGED TO BADAYA ISPAT LIMITED AND CURRENTLY, THE NAME OF THE COMPANY IS RAJSHREE ALLOYS INDIA LTD WITH SAME CORPORATE IDENTITY NO. U24117RJ1988PTC004274 AND MAILING ADDRESS OF F-947- 949, ROAD NO. 14, VKI AREA, JAIPUR. WE THEREFORE FIND THAT THERE HAS BEE N ONLY A CHANGE IN NAME OF THE ENTITY AND BESIDES THAT, THERE IS NO CHANGE IN THE CORPORATE IDENTITY OF THE ASSESSEE COMPANY. IT IS THEREFORE NOT A CASE WHERE THE ASSESSEE COMPANY CEASES TO EXIST AND/OR AMALGAMATED WITH ANY OTHER E XISTING/NEW ENTITY. THEREFORE, IT IS NOT A CASE WHERE THE NOTICE U/S 14 8 HAS BEEN ISSUED AND ASSESSMENT U/S 143(3) R/W 147 HAS BEEN COMPLETED IN THE NAME OF NON- EXISTENT ENTITY. THE DECISIONS RELIED UPON BY THE LD AR THEREFORE DOESNT SUPPORT THE CASE OF THE ASSESSEE COMPANY. FURTHER, WE FIND THAT PAN NO. AACCS4046D WITH NAME AND ADDRESS OF SHREE SILICA PR ODUCTS PRIVATE LIMITED, F-947, ROAD NO. 14, VKI AREA, JAIPUR CONTINUE TO EX IST IN THE INCOME TAX DEPARTMENT DATABASE AND THE ASSESSEE COMPANY HAS BE EN ALLOTTED A FRESH PAN NO. AADCB4084H WITH NAME AND ADDRESS OF BADAYA ISPA T PRIVATE LIMITED, F- 947, ROAD NO. 14, VKI AREA, JAIPUR. THE SAME IS AP PARENT FROM THE FACT THAT NOTICE U/S 148 DATED 27.03.2015 HAS BEEN ISSUED IN NAME OF SHREE SILICA ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 16 PRODUCTS PRIVATE LIMITED (PAN NO. AACCS4046D) AND T HE ASSESSEE COMPANY HAD EARLIER FILED ITS RETURN OF INCOME FOR A.Y 2009 -10 ON 30.03.2010 IN NAME OF BADAYA ISPAT PRIVATE LIMITED (PAN NO. AADCB4084H). THEREFORE, IT IS A STRANGE TO NOTE THAT THE SAME LEGAL ENTITY HAS BEEN HOLDING TWO PAN NUMBERS THOUGH IN TWO DIFFERENT NAMES AND BOTH CONTINUE TO EXIST IN INCOME TAX DEPARTMENT DATABASE AS ON THE DATE OF ISSUANCE OF N OTICE U/S 148 AND PASSING OF THE ASSESSMENT ORDER U/S 143(3) R/W 147 OF THE A CT. UNDER SECTION 139A OF THE ACT, IT HAS BEEN PROVIDED THAT NO PERSON WHO H AS ALREADY BEEN ALLOTTED A PERMANENT ACCOUNT NUMBER UNDER THE NEW SERIES SHALL APPLY, OBTAIN OR POSSESS ANOTHER PERMANENT ACCOUNT NUMBER. THEREFORE, WHERE THE ASSESSEE IS PROHIBITED FROM APPLYING FOR A NEW PAN WHERE A PAN HAS ALREADY BEEN ISSUED TO IT, THE FACT THAT SUCH A NEW PAN HAS BEEN APPLIE D AND THEREAFTER ISSUED, TO OUR MIND, THE NEW PAN AND FILING OF RETURN OF INCOM E DOESNT CONFER ANY JURISDICTION TO THE ASSESSING OFFICER OVER SUCH MAT TER WITH SUCH NEW PAN AND THE ASSESSING OFFICER WITH EARLIER PAN CONTINUES TO EXERCISE JURISDICTION OVER THE ASSESSEE COMPANY. IN THE PRESENT CASE, THEREFORE, THE ITO WARD 4(1), JAIPUR CONTINUES TO EXERCISE JURISDICTION OVER THE ASSESSE E COMPANY AND NOT ITO WARD 1(1), JAIPUR. THEREFORE, WE DONOT FIND ANY INFIRMI TY IN THE ACTION OF ITO WARD 4(1), JAIPUR IN ISSUING THE NOTICE U/S 148 AND COMP LETING THE ASSESSMENT U/S 143(3) R/W 147 OF THE ACT. 19. REGARDING THE SECOND CONTENTION ADVANCED BY THE LD AR, WE FIND THAT IT IS A CASE WHERE NO RETURN OF INCOME HAS BEEN ORIGIN ALLY FILED BY THE ASSESSEE COMPANY AND ON PERUSAL OF REASONS, WE FIND THAT THE ASSESSING OFFICER HAS RECEIVED TANGIBLE INFORMATION FROM INVESTIGATION WI NG THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES BASIS WHICH HE HAS C OME TO BELIEVE THAT INCOME TO THE EXTENT OF RS 45 LACS HAS ESCAPED ASSE SSMENT. THERE IS A LINKAGE BETWEEN THE MATERIAL AND FORMATION OF BELIEF THAT I NCOME HAS ESCAPED ASSESSMENT. AT THE STAGE OF RECORDING REASONS, THE ASSESSING OFFICER HAS TO ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 17 RECORD HIS PRIMA FACIE OPINION THAT THE INCOME HAS ESCAPED ASSESSMENT. IT IS NOT THE CASE OF THE ASSESSEE COMPANY THAT THE DETAI LS OF THE TRANSACTION RECORDED BY THE ASSESSING OFFICER WAS NOT CORRECT O R FALSE IN TERMS OF NAME OF ENTITY, NATURE OF TRANSACTION AND THE AMOUNT INVOLV ED. IN THE INSTANT CASE, WHERE THE ASSESSING OFFICER HAS RECEIVED INFORMATIO N THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES, THE SAME CONSTITUTE A TANGIBLE MATERIAL AND BASIS EXAMINATION THEREOF, WHERE HE HAS HELD THAT I NCOME HAS ESCAPED ASSESSMENT, WE DONOT SEE ANY INFIRMITY IN THE ACTIO N OF THE ASSESSING OFFICER IN EXERCISING JURISDICTION U/S 148 OF THE ACT. 20. IN THE RESULT, THE GROUND NO. 1 OF ASSESSEES A PPEAL IS DISMISSED. 21. NOW COMING TO MERITS OF THE CASE. IN THIS CAS E, THE ASSESSMENT WAS COMPLETED U/S 148 READ WITH 143(3) WHEREIN ADDITION OF RS. 45,00,000/- WAS MADE BY THE ASSESSING OFFICER FOR THE REASON THAT T HE ASSESSEE COULD NOT SATISFACTORILY EXPLAINED THE SOURCE OF THE MONEY AN D THE SAME WAS TREATED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. IN SUPPO RT OF THE SHARE APPLICATION MONEY RECEIVED FROM THREE CONCERNS NAMELY VIP LEASI NG & FINANCE P. LTD., SINGHAL SECURITIES P. LTD. AND FINAGE LEASE & FINAN CE INDIA LTD, THE ASSESSEE HAS SUBMITTED SHARE APPLICATION FORMS, CONFIRMATION OF ACCOUNTS, ITR ACKNOWLEDGMENT AND FINANCIAL STATEMENTS, LIST OF DI RECTORS, BANK STATEMENT AND COPY OF THE ASSESSMENT ORDERS FOR A.Y 2005-06 T O 2011-12 PASSED UNDER U/S 153C READ WITH 153A OF THE ACT. 22. WE FIND THAT IN ASSESSMENT ORDER PASSED IN CASE OF VIP LEASING & FINANCE P. LTD. FOR A.Y 2008-09, THE RETURNED INCOM E HAS BEEN ACCEPTED AND THERE IS NO FINDING RECORDED BY THE ASSESSING OFFIC ER TO THE EFFECT THAT THE SAID COMPANY IS INVOLVED IN PROVIDING ANY ACCOMMODATION ENTRIES AND THE RELEVANT CONTENTS OF THE ASSESSMENT ORDER DATED 28.03.2013 R EADS AS UNDER:- ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 18 1. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT VARIOUS PREMISES OF S.K. JAIN GROUP AND ITS GROUP CONCERNS AND ASSOCIATED PERSONS ON 14/09/2010. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION AT VARIOUS PREMISES OF S. K. JAIN GROUP O F CASES MANY BOOKS OF ACCOUNT AND DOCUMENTS BELONGING TO THE ASSESSEE COMPANY WERE FOUND AND SEIZED AND HENCE PREREQUISITE CONDITION T O INITIATE PROCEEDINGS U/S 153C OF THE INCOME TAX ACT, 1961 (H EREINAFTER CALLED THE ACT'), WAS FULFILLED. THEREFORE, AFTER RECORDIN G THE NECESSARY SATISFACTION FOR INITIATION OF PROCEEDINGS U/S 153C OF THE ACT, NOTICE U/S 153C/15,3A OF THE ACT WAS ISSUED ON 26/02/2013 DIRECTING IT TO FILE ITS RETURN OF INCOME WITHIN 15 DAYS OF THE SER VICE-OF THE NOTICE. THIS NOTICE WAS DULY SERVED ON THE ASSESSEE VIDE SP EED POST. IN RESPONSE TO THIS NOTICE U/S 153C/153A OF THE ACT TH E ASSESSEE FILED LETTER DATED 04/03/2013 REQUESTED TO TREAT THE RETU RN FILED ON 24/09/2008 AS RETURN IN RESPONSE TO NOTICE U/S 153C /153A OF THE ACT DECLARING INCOME OF RS, 1,00,838/-. NOTICE U/S 143( 3) & 142(1) ALONGWITH DETAILED QUESTIONNAIRE DATED 05/03/2013 W AS ISSUED AND WAS DULY SERVED UPON THE ASSESSEE BY SPEED POST. IN RESPONSE TO THE SAID NOTICES FROM TIME TO TIME, SHRI S. K. JAIN, AD VOCATE, ATTENDED THE OFFICE ON BEHALF OF THE ASSESSEE & SUBMITTED THE DE TAILS & CLARIFICATIONS WHICH ARE PLACED ON RECORD. THE CASE IS DISCUSSED WITH HIM. 2. AFTER DISCUSSION INCOME OF THE ASSESSEE IS ASSESSED AT INCOME OF RS. 1,00,838/- U/S 153C/153A OF THE ACT. CHARGE INTEREST U/S 234 A/B/C/D AS PER LAW. COMPUTATION OF INCOME TAX & INT EREST IS AS PER ITNS 150 ENCLOSED. ISSUE REQUISITE DOCUMENTS. ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 19 3. THIS ASSESSMENT ORDER IS BEING PASSED AFTER OBTAINI NG THE APPROVAL OF THE ADDITIONAL COMMISSIONER OF INCOME T AX, CENTRAL RANGE-6, NEW DELHI, COMMUNICATED VIDE HIS OFFICE LE TTER ADDL. CIT/CR-6/2012-13/419 DATED 28.3.2013. 23. ON SIMILAR LINES, THE ASSESSMENT ORDERS FOR AY 2008-09 HAVE BEEN PASSED IN CASE OF OTHER TWO ENTITIES NAMELY, SINGHAL SECUR ITIES P. LTD AND FINAGE LEASE & FINANCE INDIA LTD WHEREIN AGAIN, THERE IS NO FIND ING RECORDED BY THE ASSESSING OFFICER TO THE EFFECT THAT THE SAID COMPA NIES ARE INVOLVED IN PROVIDING ANY ACCOMMODATION ENTRIES. IT IS RELEVANT TO NOTE THAT IN ALL THESE THREE CASES, THE ASSESSMENT PROCEEDINGS WERE REOPENED BASIS THE SEARCH AND SEIZURE OPERATION IN CASE OF S.K. JAIN GROUP ON 14.09.2010, WHICH IS THE SAME SEARCH OPERATION BASIS WHICH, THE NOTICE U/S 148 HAS BEEN ISSUED TO THE ASSESSEE COMPANY. IN THE REASONS RECORDED U/S 148, THE ASSE SSING OFFICER HAS REFERRED TO THE COMMUNICATION RECEIVED FROM DIT (INV.)-II, N EW DELHI THROUGH HIS LETTER DATED 15 TH MARCH, 2013 WHEREIN THE CERTAIN DETAILS HAVE BEEN GIVEN REGARDING BOGUS ACCOMMODATION ENTRIES OBTAINED BY THE ASSESSE E COMPANY. BY THE TIME OF ISSUANCE OF NOTICE U/S 148 ON 28.03.2015, THE AS SESSMENT IN CASE OF ALL THESE THREE ENTITIES WERE ALREADY COMPLETED ON 28.0 3.2013 AND IN THE ASSESSMENT SO COMPLETED, THERE IS NO FINDING THAT T HESE ENTITIES HAVE PROVIDED ANY ACCOMMODATION ENTRIES TO THE ASSESSEE COMPANY. IN OTHER WORDS, THE INVESTMENT MADE BY THESE THREE ENTITIES IN THE ASSE SSEE COMPANY WAS ACCEPTED AS GENUINE INVESTMENTS. THEREFORE, ONCE T HE ASSESSEE COMPANY HAS FURNISHED NECESSARY DOCUMENTATION AS WE NOTED ABOVE AND THE ASSESSMENT IN CASE OF THESE SHARE HOLDER ENTITIES HAVE BEEN COMPL ETED WHEREBY THERE IS NO FINDING RECORDED BY THE ASSESSING OFFICER THAT THEY HAVE PROVIDED ACCOMMODATION ENTRIES TO THE ASSESSEE COMPANY AND I NVESTMENT THUS MADE HAVE BEEN ACCEPTED AS GENUINE INVESTMENT, WE FIND T HAT NO ADVERSE VIEW CAN BE TAKEN IN THE HANDS OF THE INVESTEE ASSESSEE COMP ANY U/S 68 OF THE ACT. ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 20 FURTHER, WE FIND THAT THE ASSESSING OFFICER HAS STA TED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS INTRODUCED ITS UNACCOUNTED CA SH IN THE FORM OF SHARE CAPITAL THROUGH RACKET OF ENTRY PROVIDERS OPERATED IN NEW DELHI, HOWEVER THE SAID FINDING HAS NOT BEEN CORROBORATED BY ANY MATER IAL ON RECORD AND THEREFORE, THE SAID FINDING RECORDED BY THE ASSESSI NG OFFICER CANNOT BE ACCEPTED IN ABSENCE OF CLEAR LINKAGE/NEXUS ESTABLIS HED BY THE REVENUE THAT THE MONEY BELONGING TO THE ASSESSEE COMPANY HAS BEEN AD VANCED AND ROUTED BACK IN THE FORM OF SHARE CAPITAL. WE FIND THAT SIM ILAR FINDINGS HAVE BEEN RECORDED BY THE CO-ORDINATE BENCH IN CASE OF M/S LA YAK FABRICS PVT. LTD. (SUPRA) AND THE RELEVANT FINDING READS AS UNDER:- 14. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE AO RE OPENED THE ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED FROM THE INVES TIGATION WING THAT DURING THE COURSE OF SEARCH & SEIZURE OPERATION OF VARIOUS PREMISES OF SH. S.K. JAIN GROUP OF CASES, MONEY, BOOKS OF ACCOU NTS AND DOCUMENTS BELONGING TO M/S SINGHAL SECURITIES PVT. LTD. WERE FOUND AND SEIZED AND THE AO ON THIS BASIS THAT THE ASSESSEE RECEIVED AN ACCOMMODATION ENTRY FROM M/S SINGHAL SECURITIES PVT. LTD. ISSUED THE NO TICE U/S 148 OF THE ACT WHILE RECORDING THE REASONS ON 28.03.2013 THAT THE ASSESSEE RECEIVED ACCOMMODATION ENTRY FROM M/S SINGHAL SECURITIES PVT . LTD. (COPY OF THE SAID REASONS RECORDED IS PLACED AT PAGE NO. 8 OF TH E ASSESSEES PAPER BOOK). IT IS ALSO NOTICED THAT ON SAME DATE I.E. 28 .03.2013, THE AO OF M/S SINGHAL SECURITIES PVT. LTD., FRAMED THE ASSESSMENT U/S 153C/153A OF THE ACT AT THE SAME FIGURE OF THE LOSS AMOUNTING TO RS. 51,528/- WHICH WAS DECLARED BY THE SAID ASSESSEE IN ITS RETURN OF INCO ME. IT IS ALSO NOTICED THAT SH. S.K. JAIN IN WHOSE PREMISES SEARCH TOOK PL ACE WAS NOT A SHAREHOLDER OF M/S SINGHAL SECURITIES PVT. LTD. AND WAS ALSO NOT CONNECTED WITH THE ASSESSEE. IN THE PRESENT CASE, W HEN THE ASSESSMENT ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 21 OF M/S SINGHAL SECURITIES PVT. LTD. FROM WHOM THE A SSESSEE RECEIVED SHARE APPLICATION MONEY WAS ASSESSED AT THE SAME FI GURE OF THE LOSS WHICH WAS DECLARED BY THE SAID ASSESSEE, ON THE SAM E DATE WHEN THE AO RECORDED THE REASONS THAT THE INCOME OF THE ASSESSE E ESCAPED ASSESSMENT FOR A SUM OF RS.14,00,000/- I.E. THE AMO UNT RECEIVED AS SHARE APPLICATION MONEY FROM M/S SINGHAL SECURITIES PVT. LTD. IN THE PRESENT CASE, IT CANNOT BE SAID THAT THE AO WAS HAV ING ANY MATERIAL IN HIS POSSESSION EXCEPT THE INFORMATION RECEIVED FROM THE INVESTIGATION WING. THEREFORE, THE REOPENING WAS DONE BY THE AO O NLY ON THE BASIS OF THE INFORMATION RECEIVED FROM INVESTIGATION WING. 15. AN IDENTICAL ISSUE WAS A SUBJECT MATTER OF THE ASSESSEES APPEAL IN THE CASE OF M/S DHANUKA AGRITECH LTD. VS ACIT IN IT A NO. 1003/DEL/2014 FOR THE ASSESSMENT YEAR 2003-04 WHEREIN VIDE ORDER DATED 11.05.2016 THIS BENCH OF THE TRIBUNAL HAS HELD AS UNDER: 9. ON A SIMILAR ISSUE, THEIR LORDSHIPS OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCO ME-TAX VS. G. & G. PHARMA INDIA LTD. (SUPRA) OBSERVED IN PARA 12 & 13 OF THE ORDER DATED 8TH OCTOBER, 2015 AS UNDER : 12. IN THE PRESENT CASE, AFTER SETTING OFF FOUR EN TRIES, STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON A SINGLE DATE I.E. 10TH FEBRUARY, 2003 FROM FOUR ENTITIES WHICH WERE TERMED AS ACCOMMODATI ON ENTRIES, WHICH INFORMATION WAS GIVEN TO HIM BY THE DIRECTORATE OF INVESTIGATION, THE AO STATED: I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK ACCOUNT BY WAY OF ABOVE ACCOMMODATION ENTRIES.THE ABOVE CO NCLUSION IS UNHELPFUL IN UNDERSTANDING WHETHER THE AO APPLIED H IS MIND TO THE MATERIALS THAT HE TALKS ABOUT PARTICULARLY SINCE HE DID NOT DESCRIBE WHAT ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 22 THOSE MATERIALS WERE. ONCE THE DATE ON WHICH THE SO CALLED ACCOMMODATION ENTRIES WERE PROVIDED IS KNOWN, IT WO ULD NOT HAVE BEEN DIFFICULT FOR THE AO, IF HE HAD IN FACT UNDERTAKEN THE EXERCISE, TO MAKE A REFERENCE TO THE MANNER IN WHICH THOSE VERY ENTRIES WERE PROVIDED IN THE ACCOUNTS OF THE ASSESSEE, WHICH MUST HAVE BEEN TEND ERED ALONG WITH THE RETURN, WHICH WAS FILED ON 14TH NOVEMBER, 2004 AND WAS PROCESSED UNDER SECTION 143(3) OF THE ACT. WITHOUT FORMING A PRIMA FACIE OPINION, ON THE BASIS OF SUCH MATERIAL, IT WAS NOT POSSIBLE FOR THE AO TO HAVE SIMPLY CONCLUDED: IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK BY WAY OF ACCOMMODATION ENTRIES. IN THE CONSIDERED VIEW OF T HE COURT, IN LIGHT OF THE LAW EXPLAINED WITH SUFFICIENT CLARITY BY THE SU PREME COURT IN THE DECISIONS DISCUSSED HEREINBEFORE, THE BASIC REQUIRE MENT THAT THE AO MUST APPLY HIS MIND TO THE MATERIALS IN ORDER TO HA VE REASONS TO BELIEVE THAT THE ITA NO. 491/DEL/2016 LAYAK FABRICS PVT. LT D. 15 INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IS MISSING IN THE PRESE NT CASE. 13. MR. SAWHNEY TOOK THE COURT THROUGH THE ORDER OF THE CIT(A) TO SHOW HOW THE CIT(A) DISCUSSED THE MATERIALS PRODUCE D DURING THE HEARING OF THE APPEAL. THE COURT WOULD LIKE TO OBSE RVE THAT THIS IS IN THE NATURE OF A POST MORTEM EXERCISE AFTER THE EVENT OF REOPENING OF THE ASSESSMENT HAS TAKEN PLACE. WHILE THE CIT MAY HAVE PROCEEDED ON THE BASIS THAT THE REOPENING OF THE ASSESSMENT WAS VALI D, THIS DOES NOT SATISFY THE REQUIREMENT OF LAW THAT PRIOR TO THE RE OPENING OF THE ASSESSMENT, THE AO HAS TO, APPLYING HIS MIND TO THE MATERIALS, CONCLUDE THAT HE HAS REASON TO BELIEVE THAT INCOME OF THE AS SESSEE HAS ESCAPED ASSESSMENT. UNLESS THAT BASIC JURISDICTIONAL REQUIR EMENT IS SATISFIED A POST MORTEM EXERCISE OF ANALYZING MATERIALS PRODUCE D SUBSEQUENT TO THE REOPENING WILL NOT RESCUE AN INHERENTLY DEFECTIVE R EOPENING ORDER FROM INVALIDITY. ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 23 10. IN THE PRESENT CASE ALSO THE AO IN THE REASONS RECORDED MENTIONED THAT IT HAD COME TO HIS KNOWLEDGE THAT THE PERSONS FROM WHOM AMOUNT WAS RECEIVED WERE ENTRY OPERATOR AND PROVIDED THE E NTRIES TO THE ASSESSEE AFTER RECEIVING THE AMOUNT IN CASH, HOWEVE R, NOTHING WAS BROUGHT ON RECORD THAT HOW AND IN WHAT MANNER THE P ERSONS FROM WHOM THE ASSESSEE RECEIVED THE LOANS WERE ENTRY OPERATOR AND THAT AS TO HOW THE CASH WAS PAID BY THE ASSESSEE. IN FACT THE AFOR ESAID CONCLUSION OF THE A.O. IS UNHELPFUL IN UNDERSTANDING AS TO WHETHE R THE AO APPLIED HIS MIND TO THE MATERIAL, PARTICULARLY WHEN HE DID NOT DESCRIBE HOW AND WHAT MANNER IT CAME TO HIS KNOWLEDGE THAT THE ASSESSEE R ECEIVE THE ACCOMMODATION ENTRIES. WE, THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN TH E AFORESAID REFERRED TO CASE OF PRINCIPAL COMMISSIONER OF INCOME-TAX VS. G & G PHARMA INDIA LTD., ARE OF THE VIEW THAT THE REOPENING DONE BY TH E AO U/S 147 OF THE ACT WAS NOT VALID AND ACCORDINGLY THE ITA NO. 491/D EL/2016 LAYAK FABRICS PVT. LTD. 16 SUBSEQUENT ASSESSMENT FRAMED B Y THE AO WAS VOID- AB-INITIO AND THEREFORE THE SAME IS QUASHED. SINCE, WE HAVE QUASHED THE REASSESSMENT ORDER OF THE A.O., THEREFORE NO FINDIN GS ARE GIVEN ON THE GROUND NO. 4 RAISED BY THE ASSESSEE. 16. IN THE PRESENT CASE ALSO THE AO IN THE REASONS RECORDED MENTIONED THAT IT HAS COME TO HIS KNOWLEDGE THAT THE PERSON F ROM WHOM ASSESSEE RECEIVED SHARE APPLICATION MONEY WAS ENTRY OPERATOR . HOWEVER, IN THE ASSESSMENT OF THE SAID COMPANY I.E. M/S SINGHAL SEC URITIES PVT. LTD., NO SUCH FINDINGS HAS GIVEN NEITHER ANY ADDITION WAS MA DE WHILE FRAMING THE ASSESSMENT U/S 153C/153A OF THE ACT ON 28.03.2013 I .E. THE SAME DATE ON WHICH THE REASONS WERE RECORDED FOR REOPENING TH E ASSESSMENT U/S 147 OF THE ACT IN ASSESSEES CASE. ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 24 17. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFER RED TO ORDER DATED 11.05.2016, THE IMPUGNED ORDER PASSED BY THE LD. CI T(A) IS SET ASIDE AND IT IS HELD THAT THE REOPENING DONE BY THE AO U/ S 147 OF THE ACT WAS NOT VALID AND ACCORDINGLY, THE SUBSEQUENT ASSESSMEN T FRAMED WAS VOID AB-INITO. THEREFORE, THE SAME IS QUASHED. 24. IN LIGHT OF ABOVE DISCUSSIONS, THE ADDITION SO MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT IS HEREBY DIRECTED TO BE DELETED. IN THE RESULT, THE GROUND NO. 2 OF THE ASSESSEES APPEAL IS ALLOWED. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/01/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07/01/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-4(1), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1418/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 25 ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 26 ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 27 ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 28 ITA NO. 1418/JP/2018 M/S SHREE SILICA PRODUCT PVT. LTD., KOLKATA VS. ITO , JAIPUR 29