Appeal Details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 7435 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 2 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-05-2016
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Next Hearing Date
04-05-2016
Assessment Year
2008-2009
Appeal Filed On
24-03-2014
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 A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND SHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO S SS S . .. . 1698/DEL/2014, 1698/DEL/2014, 1698/DEL/2014, 1698/DEL/2014, 1699/DEL/2014, 1700/DEL/2014, 1699/DEL/2014, 1700/DEL/2014, 1699/DEL/2014, 1700/DEL/2014, 1699/DEL/2014, 1700/DEL/2014, 1701/DEL/2014 1701/DEL/2014 1701/DEL/2014 1701/DEL/2014 & 1753/DEL/2014 & 1753/DEL/2014 & 1753/DEL/2014 & 1753/DEL/2014 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR S SS S : : : : 2005 2005 2005 2005 - -- - 06, 2006 06, 2006 06, 2006 06, 2006 - -- - 07, 2007 07, 2007 07, 2007 07, 2007 - -- - 08 0808 08 , , , , 2008 2008 2008 2008 - -- - 09 0909 09 & 2009 & 2009 & 2009 & 2009 - -- - 10 1010 10 M/S BEST INFRASTRUCTURE M/S BEST INFRASTRUCTURE M/S BEST INFRASTRUCTURE M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD., (INDIA) PVT.LTD., (INDIA) PVT.LTD., (INDIA) PVT.LTD., PLOT NO.H PLOT NO.H PLOT NO.H PLOT NO.H- -- -8, 1 8, 1 8, 1 8, 1 ST STST ST FLOOR, FLOOR, FLOOR, FLOOR, BEST PLAZA, BEST PLAZA, BEST PLAZA, BEST PLAZA, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, PITAMPURA, PITAMPURA, PITAMPURA, PITAMPURA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 034. 110 034. 110 034. 110 034. PAN : AACCB5568R. PAN : AACCB5568R. PAN : AACCB5568R. PAN : AACCB5568R. 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 CI CENTRAL CI CENTRAL CI CENTRAL CIRCLE RCLE RCLE RCLE- -- -4, 4,4, 4, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ITA NOS.1702/DEL/2014 ITA NOS.1702/DEL/2014 ITA NOS.1702/DEL/2014 ITA NOS.1702/DEL/2014 & && & 1703/DEL/201 1703/DEL/201 1703/DEL/201 1703/DEL/201 4 44 4 ASSESSMENT YEARS : 200 ASSESSMENT YEARS : 200 ASSESSMENT YEARS : 200 ASSESSMENT YEARS : 200 6 66 6 - -- - 07 0707 07 & && & 2007 2007 2007 2007 - -- - 08 0808 08 M/S BEST CITY PROJECTS (INDIA) M/S BEST CITY PROJECTS (INDIA) M/S BEST CITY PROJECTS (INDIA) M/S BEST CITY PROJECTS (INDIA) PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., PLOT NO.H PLOT NO.H PLOT NO.H PLOT NO.H- -- -8, 1 8, 1 8, 1 8, 1 ST STST ST FLOOR, FLOOR, FLOOR, FLOOR, BEST PLAZA, BEST PLAZA, BEST PLAZA, BEST PLAZA, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, PITAMPURA, PITAMPURA, PITAMPURA, PITAMPURA, NEW D NEW D NEW D NEW DELHI ELHI ELHI ELHI 110 034. 110 034. 110 034. 110 034. PAN : AACCB7635D. PAN : AACCB7635D. PAN : AACCB7635D. PAN : AACCB7635D. 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- -- -4, 4,4, 4, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ITA NOS.1704/DEL/2014 & 1705/DEL/2014 ITA NOS.1704/DEL/2014 & 1705/DEL/2014 ITA NOS.1704/DEL/2014 & 1705/DEL/2014 ITA NOS.1704/DEL/2014 & 1705/DEL/2014 ASSESSMENT YEARS : ASSESSMENT YEARS : ASSESSMENT YEARS : ASSESSMENT YEARS : 2007 2007 2007 2007 - -- - 08 & 2008 08 & 2008 08 & 2008 08 & 2008 - -- - 09 0909 09 M/S BEST CITY DEVELOPERS M/S BEST CITY DEVELOPERS M/S BEST CITY DEVELOPERS M/S BEST CITY DEVELOPERS INDI INDI INDI INDIA PVT.LTD., A PVT.LTD., A PVT.LTD., A PVT.LTD., PLOT NO.H PLOT NO.H PLOT NO.H PLOT NO.H- -- -8, 1 8, 1 8, 1 8, 1 ST STST ST FLOOR, FLOOR, FLOOR, FLOOR, BEST PLAZA, BEST PLAZA, BEST PLAZA, BEST PLAZA, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, PITAMPURA, PITAMPURA, PITAMPURA, PITAMPURA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 034. 110 034. 110 034. 110 034. PAN : AADCB1847N. PAN : AADCB1847N. PAN : AADCB1847N. PAN : AADCB1847N. 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- -- -4, 4,4, 4, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ITA NO.1698/DEL/2014 & 12 OTHERS 2 ITA NOS.1706/DEL/2014 ITA NOS.1706/DEL/2014 ITA NOS.1706/DEL/2014 ITA NOS.1706/DEL/2014 & 1707/DEL/2014 & 1707/DEL/2014 & 1707/DEL/2014 & 1707/DEL/2014 ASSESSMENT YEARS : ASSESSMENT YEARS : ASSESSMENT YEARS : ASSESSMENT YEARS : 2007 2007 2007 2007 - -- - 08 & 2008 08 & 2008 08 & 2008 08 & 2008 - -- - 09 0909 09 M/S BEST CITY M/S BEST CITY M/S BEST CITY M/S BEST CITY REALTORS ( REALTORS ( REALTORS ( REALTORS ( INDIA INDIA INDIA INDIA ) )) ) PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., PLOT NO.H PLOT NO.H PLOT NO.H PLOT NO.H- -- -8, 1 8, 1 8, 1 8, 1 ST STST ST FLOOR, FLOOR, FLOOR, FLOOR, BEST PLAZA, BEST PLAZA, BEST PLAZA, BEST PLAZA, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, PITAMPURA, PITAMPURA, PITAMPURA, PITAMPURA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 034. 110 034. 110 034. 110 034. PAN : AA PAN : AA PAN : AA PAN : AACCB7687B CCB7687B CCB7687B CCB7687B. .. . VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENT CENT CENT CENTRAL CIRCLE RAL CIRCLE RAL CIRCLE RAL CIRCLE- -- -4, 4,4, 4, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ITA NOS.1708/DEL/2014 & 1709/DEL/2014 ITA NOS.1708/DEL/2014 & 1709/DEL/2014 ITA NOS.1708/DEL/2014 & 1709/DEL/2014 ITA NOS.1708/DEL/2014 & 1709/DEL/2014 ASSESSMENT YEARS : ASSESSMENT YEARS : ASSESSMENT YEARS : ASSESSMENT YEARS : 2005 2005 2005 2005 - -- - 06 & 2007 06 & 2007 06 & 2007 06 & 2007 - -- - 08 0808 08 M/S BEST REALTORS (INDIA) M/S BEST REALTORS (INDIA) M/S BEST REALTORS (INDIA) M/S BEST REALTORS (INDIA) PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., PLOT NO.H PLOT NO.H PLOT NO.H PLOT NO.H- -- -8, 1 8, 1 8, 1 8, 1 ST STST ST FLOOR, FLOOR, FLOOR, FLOOR, BEST PLAZA, BEST PLAZA, BEST PLAZA, BEST PLAZA, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, PITAMPURA, PITAMPURA, PITAMPURA, PITAMPURA, NEW NEW NEW NEW DELHI DELHI DELHI DELHI 110 034. 110 034. 110 034. 110 034. PAN : AACCB5569Q. PAN : AACCB5569Q. PAN : AACCB5569Q. PAN : AACCB5569Q. 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- -- -4, 4,4, 4, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT S BY : SHRI VED JAIN, ADVOCATE & SHRI ASHISH CHADHA, CA. RESPONDENT BY : SHRI RAVI JAIN, CIT - DR. DATE OF HEARING : 04.05.2016 04.05.2016 04.05.2016 04.05.2016 DATE OF PRONOUNCEMENT : 31.05.2016 31.05.2016 31.05.2016 31.05.2016 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - ITA NO.1698/DEL/2014 ITA NO.1698/DEL/2014 ITA NO.1698/DEL/2014 ITA NO.1698/DEL/2014 ASSESSEES APPEAL IN THE CASE OF M/S BEST ASSESSEES APPEAL IN THE CASE OF M/S BEST ASSESSEES APPEAL IN THE CASE OF M/S BEST ASSESSEES APPEAL IN THE CASE OF M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY 2005 INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY 2005 INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY 2005 INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY 2005- -- -06 : 06 : 06 : 06 :- -- - THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2005-06 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXXIII , NEW DELHI DATED 11 TH NOVEMBER, 2013. ITA NO.1698/DEL/2014 & 12 OTHERS 3 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD.CIT(A) HAS ERRED ON BOTH FACTS AND LAW OF THE CASE IN CONFIRMING THE ADDITIONS OF RS.3.60 CRO RES U/S 68 ON ACCOUNT OF SHARE CAPITAL ISSUED BY THE ASSESS EE COMPANY AND HOLDING THE SAME TO BE UNDISCLOSED INCO ME OF THE ASSESSEE COMPANY, WHICH IS UNJUSTIFIED, ARBI TRARY, CONTRARY TO THE LAW AND FACTS AND BAD IN LAW. 2. THE LD.CIT(A) HAS ERRED BOTH IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITIONS MADE IN ASSESSMENT FRAMED U/S 153A, WHICH IS NOT BASED UPON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF T HE SEARCH AND THAT THE LD. AO ERRED IN MAKING THE ASSE SSMENT IN VIEW OF THE FACT THAT THE ASSESSMENT WAS NOT PEN DING AS ON THE DATE OF THE SEARCH, WHICH IS INCORRECT, UNJU STIFIED AND BAD IN LAW. 3. THE LD.CIT(A) HAS ERRED IN LAW & FACTS OF THE CA SE IN CONFIRMING THE ADDITIONS OF RS.8,10,000/- ON ACCOUN T OF ALLEGED COMMISSION PAID FOR OBTAINING ACCOMMODATION ENTRIES WHICH IS HIGHLY ARBITRARY, UNJUSTIFIED, BAD IN LAW, UNCALLED FOR AND MERELY ON PRESUMPTION OF THE LD.A. O. 4. THE LD.CIT(A) HAS ERRED IN FACTS AND LAW OF THE CASE IN HOLDING THE VALIDITY OF ASSESSMENT U/S 153A WHICH I S BAD IN LAW, UNJUSTIFIED, UNCALLED FOR AND NEEDS TO BE QUAS HED. 5. THE ASSESSEE CRAVES THE RIGHT TO ADD, AMEND OR MODIFY ANY GROUND OF APPEAL. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED THE RETURN OF INCOME DECLARING LOSS OF `43,287/- ON 27 TH OCTOBER, 2005. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY ON 15 TH SEPTEMBER, 2008 AND A NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE ON 1 ST MAY, 2009. THE ASSESSMENT U/S 153A OF THE INCOME-TAX ACT, 1961 WAS COMPLETED ON 30 TH DECEMBER, 2010 BY MAKING THE FOLLOWING ADDITIONS:- ITA NO.1698/DEL/2014 & 12 OTHERS 4 (I) ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT - `3,60,00,000/- (II) ADDITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE - `8,10,00,000/- 4. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT THE ASSESSING OFFICER TREATED THE SHARE APPLICATION MONEY RECEIVED FROM T WELVE COMPANIES AMOUNTING TO `3,60,00,000/- AS UNEXPLAINED CASH CRE DIT IN ITS BOOKS OF ACCOUNT. THE ASSESSING OFFICER ALLEGED THAT THE AS SESSEE HAD TAKEN ACCOMMODATION ENTRIES IN THE FORM OF SHARE CAPITAL AND FOR OBTAINING SUCH ACCOMMODATION ENTRIES, THE ASSESSEE HAS PAID C OMMISSION AT THE RATE OF 2.25%. ACCORDINGLY, THE ASSESSING OFFICER WORKED OUT THE COMMISSION OF `8,10,000/- WHICH WAS ADDED AS UNEXPL AINED EXPENDITURE. IT IS SUBMITTED BY THE LEARNED COUNSE L THAT DURING THE COURSE OF SEARCH, NO LOOSE PAPER OR OTHER EVIDENCE WAS FOUND WHICH MAY INDICATE THAT THE ASSESSEE HAD TAKEN THE ACCOMM ODATION ENTRIES IN THE FORM OF SHARE CAPITAL. THEREFORE, NO INCRIM INATING MATERIAL WAS FOUND RELATING TO SHARE CAPITAL. HE FAIRLY ADMITTE D THAT VARIOUS LOOSE PAPERS AND DOCUMENTS WERE FOUND AND SEIZED AT THE T IME OF SEARCH. HOWEVER, THESE DOCUMENTS CONTAIN THE DETAILS OF ADV ANCE RECEIVED FOR THE SALE OF CERTAIN PROPERTIES. IN THE STATEMENT R ECORDED DURING THE COURSE OF SEARCH, SHRI ANU AGGARWAL, DIRECTOR OF TH E ASSESSEE COMPANY, HAD SURRENDERED THE SUM OF `8 CRORES. THA T LATER ON, SHRI ANU AGGARWAL, VIDE LETTER DATED 24 TH MARCH, 2010, MODIFIED THE EARLIER STATEMENT AND THE UNDISCLOSED INCOME DECLARED AT `8 CRORES WAS REDUCED TO `2 CRORES. HOWEVER, THE FACT REMAINS TH AT NO INCRIMINATING MATERIAL RELATING TO SHARE CAPITAL WAS FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, THE ADDITION FOR SHARE CAPIT AL AND ALLEGED PAYMENT OF COMMISSION ON PRESUMPTION, IS OUT OF THE PURVIEW OF ASSESSMENT U/S 153A. IN SUPPORT OF THIS CONTENTION , HE RELIED UPON THE FOLLOWING DECISIONS OF HON'BLE DELHI HIGH COURT :- (I) CIT VS. KABUL CHAWLA IN ITA NO.707, 709 AND 713 /2014 DATED 28.08.2015. ITA NO.1698/DEL/2014 & 12 OTHERS 5 (II) CIT VS. RRJ SECURITIES LTD. IN ITA NO.175 TO 1 77/DEL/2015 DATED 30.10.2015. 5. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A). HE ST ATED THAT THERE WAS SEARCH AND SEIZURE OPERATION AT THE PREMISES OF SHR I TARUN GOYAL GROUP OF COMPANIES. DURING THE COURSE OF SUCH SEARCH, SH RI TARUN GOYAL ADMITTED THAT HE IS CARRYING ON THE BUSINESS OF PRO VIDING ACCOMMODATION ENTRIES TO VARIOUS PARTIES. HE ALSO ADMITTED TO HAVE PROVIDED ACCOMMODATION ENTRIES TO BEST GROUP OF CAS ES. THAT DURING THE COURSE OF SEARCH OF SHRI TARUN GOYAL GROUP, HE WAS ALSO TAKEN TO THE ASSESSEES PREMISES FOR ALLOWING HIS CROSS-EXAM INATION TO THE ASSESSEE. HOWEVER, THE ASSESSEE REFUSED TO CROSS-E XAMINE SHRI TARUN GOYAL. HE, THEREFORE, SUBMITTED THAT THE STATEMENT OF SHRI TARUN GOYAL IS A CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE. HE FURTHER POINTED OUT THAT DURING THE COURSE OF SEARCH OF THE ASSESSEES PREMISES, VARIOUS LOOSE PAPERS AND DOCUMENTS WERE FOUND AND SEIZED. WHEN THOSE LOOSE PAPERS WERE CONFRONTED TO THE DIRECTOR OF THE ASSESSEE COMPANY VIZ., SHRI ANU AGGARWAL, HE ADMITTED THE UNDISCLOSE D INCOME OF `8 CRORES WHICH IS CLAIMED TO BE REPRESENTING THE UNEX PLAINED CASH RECEIVED, UNEXPLAINED WORK IN PROGRESS AS WELL AS S HARE CAPITAL. THEREFORE, DURING THE COURSE OF SEARCH, INCRIMINATI NG MATERIAL IN THE FORM OF STATEMENT OF SHRI TARUN GOYAL AS WELL AS SH RI ANU AGGARWAL IS AVAILABLE AND, THEREFORE, THE ADDITION FOR UNEXPLAI NED CASH CREDIT IN THE FORM OF SHARE CAPITAL IS VALIDLY MADE U/S 153A OF T HE INCOME TAX ACT. 6. IN THE REJOINDER, LEARNED COUNSEL FOR THE ASSESS EE STATED THAT THE STATEMENT CANNOT BE SAID TO BE INCRIMINATING MATERI AL. IN SUPPORT OF THIS CONTENTION, HE RELIED UPON THE DECISION OF HON 'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. HARJEEV AGGARWAL VIDE ITA NO.8/2004 AND THE DECISION OF ITAT IN THE CASE OF ITO VS. M/S SOFTLINE CREATIONS (P) ITA NO.1698/DEL/2014 & 12 OTHERS 6 LTD. VIDE ITA NO.744/DEL/2012. HE FURTHER SUBMITTE D THAT THE CASE OF TARUN GOYAL GROUP OF COMPANIES HAS ALREADY BEEN ADJ UDICATED UPON BY THE ITAT DELHI BENCH VIDE ITA NOS.4527 TO 4531/DEL/ 2012. IN THE SAID CASE, ON BEHALF OF SHRI TARUN GOYAL AND HIS GROUP C OMPANIES, IT WAS CLAIMED THAT SHRI TARUN GOYAL IS ENTRY PROVIDER AND HE RECEIVED THE CASH FROM THE BENEFICIARY AND THE SAME CASH IS DEPO SITED IN THE COMPANYS BANK ACCOUNT AND THEREFORE, THE CASH DEPO SITED IN THOSE COMPANIES SHOULD BE TREATED AS EXPLAINED AND NO ADD ITION FOR UNEXPLAINED CASH CREDIT U/S 68 SHOULD BE MADE. HE STATED IT WAS ALSO CLAIMED THAT ONLY THE COMMISSION INCOME SHOULD BE A SSESSED. HOWEVER, THE ITAT REJECTED THE CONTENTIONS PUT FORW ARD ON BEHALF OF TARUN GOYAL GROUP OF COMPANIES AND HELD THAT THE AD DITION FOR PEAK CREDIT AT THE FIRST POINT SHOULD BE MADE. THEREFOR E, THE CONTENTION OF THE LEARNED CIT-DR, THAT SHRI TARUN GOYAL AND HIS G ROUP COMPANIES ARE ENTRY PROVIDER, IS WITHOUT ANY BASIS AND HAS BEEN I MPLIEDLY DISAPPROVED BY THE ITAT. HE FURTHER STATED THAT TH E ASSESSEE WAS NEVER ALLOWED THE OPPORTUNITY FOR CROSS-EXAMINATION . IN FACT, DURING THE REMAND PROCEEDINGS, LEARNED CIT(A) SPECIFICALLY DIRECTED THE ASSESSING OFFICER TO ALLOW CROSS-EXAMINATION OF SHR I TARUN GOYAL. THE ASSESSING OFFICER DID NOT ALLOW CROSS-EXAMINATION O F SHRI TARUN GOYAL TO THE ASSESSEE AND, THEREFORE, HIS STATEMENT CANNO T BE USED AGAINST THE ASSESSEE. IN SUPPORT OF THIS CONTENTION, HE RE LIED UPON THE FOLLOWING DECISIONS:- (I) M/S ANDAMAN TIMBER INDUSTRIES VS. CCE, KOLKATA- II CIVIL APPEAL NO.4228 OF 2006, JUDGMENT DATED 2 ND SEPTEMBER, 2015 (SC). (II) CIT, DELHI VS. SMC SHARE BROKERS LTD. [2007] 159 TAXMAN 306 (DELHI). (III) ALOK AGARWAL VS. DCIT [2000] 67 TTJ 109 (DE L). ITA NO.1698/DEL/2014 & 12 OTHERS 7 7. WITH REGARD TO THE STATEMENT OF SHRI ANU AGGARWA L, IT IS STATED BY THE LEARNED COUNSEL THAT WHEN A QUESTION WAS PUT TO SHRI ANU AGGARWAL IN RESPECT OF LOOSE PAPERS, HE STATED THAT THE LOOS E PAPERS ARE WITH REGARD TO RECEIPT OF CASH AS ADVANCE FOR SALE OF PR OPERTY IN CERTAIN CASES WHICH HAS NOT BEEN REFLECTED IN THE BOOKS OF ACCOUNT. PART OF THE CASH RECEIVED WHICH HAS NOT BEEN ACCOUNTED IN THE R EGULAR BOOKS OF ACCOUNT HAS BEEN UTILIZED FOR MAKING EXPENSES IN CO NSTRUCTION BUSINESS. THIS REFLECTS UNEXPLAINED OR UNACCOUNTED WORK IN PROGRESS. HE HAD SURRENDERED THE SUM OF `8 CRORES DURING THE COURSE OF SEARCH. HOWEVER, SUBSEQUENTLY, THE SURRENDER WAS MODIFIED A ND THE ASSESSEE MADE THE SURRENDER OF ONLY `2 CRORES. IN THE ASSES SMENT ORDER ALSO, THE ASSESSING OFFICER HAS NOWHERE POINTED OUT THAT ANY LOOSE PAPER FOUND AND SEIZED IS PERTAINING TO THE RECEIPT OF SH ARE CAPITAL BY THE ASSESSEE. ACCORDINGLY, HE STATED THAT THE ADDITION FOR SHARE CAPITAL AS WELL AS COMMISSION IS OUT OF PURVIEW OF SECTION 153 A AND SHOULD BE DELETED. 8. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND HAVE PERUSED THE MATERIAL PLACED BEFORE US. IN THE CASE OF KABUL CHAWLA (SUPRA), HON'BLE JURISDICTIONAL HIGH COURT H AS CONSIDERED ALL EARLIER DECISIONS OF HON'BLE DELHI HIGH COURT AND H AS ALSO CONSIDERED THE DECISIONS OF OTHER HIGH COURTS AND TRIBUNALS AN D SUMMARIZED THE LEGAL POSITION IN PARAGRAPH 37 AND AT THE CONCLUSIO N OF THE CASE IN PARAGRAPH 38, WHICH ARE REPRODUCED BELOW:- SUMMARY OF THE LEGAL POSITION. 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGA L POSITION THAT EMERGES IS AS UNDER:- I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO ITA NO.1698/DEL/2014 & 12 OTHERS 8 FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES P LACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SU CH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXER CISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT A Y IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE TOTAL INCOME OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WI LL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIO NS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FO UND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATE RIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELA TED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSES SMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEI ZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABAT ED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD ASSESS IN SECTION 153A IS RELATABLE TO ABATED PRO CEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD REASSESS TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND TH E ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONL Y ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTH ER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 15 3A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UN EARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUM ENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF ITA NO.1698/DEL/2014 & 12 OTHERS 9 SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCL OSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS 2002-03, 2005-0 6 AND 2006-07. ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREAD Y ASSESSED. 9. IN CLAUSE (IV) ABOVE, THEIR LORDSHIPS HELD OBVI OUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL. IN CLAUSE (V), THE SAME IS REITE RATED BY HOLDING IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETE D ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESS MENT CAN BE MADE. IN CLAUSE (VII), IT IS STATED COMPLETED AS SESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSME NT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERI AL UNEARTHED DURING THE COURSE OF SEARCH. 10. IN THE CASE OF RRJ SECURITIES LTD. (SUPRA), IN PARAGRAPH 21, IT HAS BEEN HELD :- IN RESPECT OF SUCH ASSESSMENTS WHICH HAVE ABATED, THE AO WOULD HAVE THE JURISDICTION TO PROCEED AND MAKE AN ASSESSMENT. HOWEVER, IN RESPECT OF CONCLUDED ASSESSMENTS, THE AO WOULD ASSUME JURISIDCITON TO RE ASSESS PROVIDED THAT THE ASSETS/DOCUMENTS RECEIVED BY THE AO REPRESENT OR INDICATE ANY UNDISCLOSED INCOME OR POS SIBILITY OF ANY INCOME THAT MAY BE REMAINED UNDISCLOSED IN T HE RELEVANT ASSESSMENT YEARS. THIS COURT IN COMMISSIO NER OF INCOME TAX (CENTRAL)-III V. KABUL CHAWLA : ITA 707/ 2014, DECIDED ON 28 TH AUGUST, 2015 HAS HELD THAT COMPLETED ASSESSMENTS COULD ONLY BE INTERFERED WITH BY THE AO ON THE BASIS OF ANY INCRIMINATING MATERIAL UNEARTHED D URING THE COURSE OF THE SEARCH OR REQUISITION OF THE DOCU MENTS. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE AO DO ES NOT ITA NO.1698/DEL/2014 & 12 OTHERS 10 HAVE ANY JURISDICTION TO INTERFERE IN CONCLUDED ASSESSMENTS. 11. IN THE CASE OF HARJEEV AGGARWAL (SUPRA), HON'BL E JURISDICTIONAL HIGH COURT CONSIDERED THE EVIDENTIARY VALUE OF THE STATEMENT RECORDED DURING THE COURSE OF SEARCH. THE RELEVANT PORTION IS PARAGRAPH 19, 20 & 24, WHICH ARE REPRODUCED BELOW FOR READY REFERENC E :- 19. IN VIEW OF THE SETTLED LEGAL POSITION, THE FIR ST AND FOREMOST ISSUE TO BE ADDRESSED IS WHETHER A STATEME NT RECORDED UNDER SECTION 132(4) OF THE ACT WOULD BY I TSELF BE SUFFICIENT TO ASSESS THE INCOME, AS DISCLOSED BY TH E ASSESSEE IN ITS STATEMENT, UNDER THE PROVISIONS OF CHAPTER XIV-B OF THE ACT. 20. IN OUR VIEW, A PLAIN READING OF SECTION 158BB(1 ) OF THE ACT DOES NOT CONTEMPLATE COMPUTING OF UNDISCLOS ED INCOME SOLELY ON THE BASIS OF A STATEMENT RECORDED DURING THE SEARCH. THE WORDS EVIDENCE FOUND AS A RESULT OF SEARCH WOULD NOT TAKE WITHIN ITS SWEEP STATEMENTS RECORDED DURING SEARCH AND SEIZURE OPERATIONS. HOW EVER, THE STATEMENTS RECORDED WOULD CERTAINLY CONSTITUTE INFORMATION AND IF SUCH INFORMATION IS RELATABLE TO THE EVIDENCE OR MATERIAL FOUND DURING SEARCH, THE SAME COULD CERTAINLY BE USED IN EVIDENCE IN ANY PROCEEDINGS UN DER THE ACT AS EXPRESSLY MANDATED BY VIRTUE OF THE EXPLANAT ION TO SECTION 132(4) OF THE ACT. HOWEVER, SUCH STATEMENT S ON A STANDALONE BASIS WITHOUT REFERENCE TO ANY OTHER MAT ERIAL DISCOVERED DURING SEARCH AND SEIZURE OPERATIONS WOU LD NOT EMPOWER THE AO TO MAKE A BLOCK ASSESSMENT MERELY BECAUSE ANY ADMISSION WAS MADE BY THE ASSESSEE DURI NG SEARCH OPERATION. 24. IF THE REVENUES CONTENTION THAT THE BLOCK ASSESSMENT CAN BE FRAMED ONLY ON THE BASIS OF A STATEMENT RECORDED UNDER SECTION 132(4) IS ACCEPTED , IT WOULD RESULT IN IGNORING AN IMPORTANT CHECK ON THE POWER OF THE AO AND WOULD EXPOSE ASSESSEES TO ARBITRARY ASSESSMENTS BASED ONLY ON THE STATEMENTS, WHICH WE ARE CONSCIOUS ARE SOMETIMES EXTRACTED BY EXERTING UNDUE INFLUENCE OR BY COERCION. SOMETIMES STATEMENTS ARE RECORDED BY OFFICERS IN CIRCUMSTANCES WHICH CAN MOS T CHARITABLY BE DESCRIBED AS OPPRESSIVE AND IN MOST S UCH CASES, ARE SUBSEQUENTLY RETRACTED. THEREFORE, IT I S ITA NO.1698/DEL/2014 & 12 OTHERS 11 NECESSARY TO ENSURE THAT SUCH STATEMENTS, WHICH ARE RETRACTED SUBSEQUENTLY, DO NOT FORM THE SOLE BASIS FOR COMPUTING UNDISCLOSED INCOME OF AN ASSESSEE. 12. THUS, HON'BLE JURISDICTIONAL HIGH COURT HAS HEL D THE WORDS EVIDENCE FOUND AS A RESULT OF SEARCH WOULD NOT TA KE WITHIN ITS SWEEP STATEMENTS RECORDED DURING SEARCH AND SEIZURE OPERA TIONS . THEIR LORDSHIPS FURTHER OBSERVED HOWEVER, SUCH STATEMENTS ON A STANDALONE BASIS WITHOUT REFERENCE TO ANY OTHER MAT ERIAL DISCOVERED DURING SEARCH AND SEIZURE OPERATIONS WOULD NOT EMPO WER THE AO TO MAKE A BLOCK ASSESSMENT MERELY BECAUSE ANY ADMISSIO N WAS MADE BY THE ASSESSEE DURING SEARCH OPERATION . IN PARAGRAPH 24, THEIR LORDSHIPS HAVE MENTIONED ABOUT THE PREVAILING PRACT ICE OF EXTRACTING STATEMENT BY EXERTING UNDUE INFLUENCE OR COERCION B Y THE SEARCH PARTY. THOUGH THE ABOVE DECISION IN THE CASE OF HARJEEV AG GARWAL IS WITH REFERENCE TO THE MEANING OF UNDISCLOSED INCOME U/S 158BB OF THE INCOME-TAX ACT, HOWEVER, IN OUR OPINION, THE ABOVE OBSERVATION OF HON'BLE JURISDICTIONAL HIGH COURT WOULD BE SQUARELY APPLICABLE WHILE CONSIDERING THE EVIDENTIARY VALUE OF THE STATEMENT WHILE MAKING THE ASSESSMENT U/S 153A. 13. HAVING DISCUSSED THE LEGAL POSITION HELD BY HON 'BLE JURISDICTIONAL HIGH COURT ABOVE, LET US EXAMINE THE FACTS OF THE C ASE SO AS TO ASCERTAIN WHETHER THE ADDITION FOR SHARE CAPITAL CA N BE MADE U/S 153A. ADMITTEDLY, FOR THE YEAR UNDER CONSIDERATION, THE A SSESSEE HAD FILED THE RETURN OF INCOME ON 27 TH OCTOBER, 2005. THE RETURNED INCOME WAS ACCEPTED U/S 143(1) AS NO NOTICE U/S 143(2) WAS ISS UED. THE SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE ASSESS EES BUSINESS PREMISES ON 15 TH SEPTEMBER, 2008. DURING THE SEARCH, VARIOUS LOOSE PAPERS WERE FOUND AND SEIZED. HOWEVER, THE SEIZED DOCUMENTS WERE WITH REGARD TO UNACCOUNTED RECEIPT FROM SALE OF CER TAIN PROPERTIES AND UNRECORDED EXPENDITURE IN THE CONSTRUCTION BUSINESS . IT WOULD BE ITA NO.1698/DEL/2014 & 12 OTHERS 12 EVIDENT FROM QUESTION NO.15 AND REPLY THEREOF IN TH E STATEMENT OF SHRI ANU AGGARWAL, DIRECTOR OF THE ASSESSEE COMPANY :- Q.NO.15 I AM SHOWING YOU ANNEXURE A-1 OF PARTY BO- 1 PAGE NO.1 TO 71, WHICH GIVES DETAILS OF CASH RECEIV ED FOR SALE OF PROPERTY NOT REFLECTED IN THE BOOKS OF ACCO UNTS. ANNEXURE A-4, PAGES 1 TO 31 AND ANNEXURE A-11 PAGES 1 TO 100 WHICH GIVE DETAILS OF EXPENSES MADE FOR CONSTRU CTION WORK WHICH ARE ALSO NOT REFLECTED IN THE BOOKS OF A CCOUNTS. YOU ARE REQUESTED TO EXPLAIN THESE DOCUMENTS AND RECONCILE THEM WITH YOUR REGULAR BOOKS OF ACCOUNTS. ANS : I HAVE GONE THROUGH THESE DOCUMENTS IN ANNEX URE A- 1, A-4 AND A-11 AND I AM UNABLE TO EXPLAIN THESE DOCUMENTS. WE HAVE RECEIVED CASH AS ADVANCE FOR SA LE OF PROPERTY IN CERTAIN INSTANCES WHICH HAS NOT BEEN RE FLECTED IN OUR BOOKS OF ACCOUNTS. PART OF THE CASH RECEIVE D WHICH HAS NOT BEEN ACCOUNTED BY US IN REGULAR BOOKS OF AC COUNTS HAS BEEN UTILIZED FOR MAKING EXPENSES IN OUR CONSTR UCTION BUSINESS. THIS REFLECTS OUR UNEXPLAINED, UNACCOUNT ED WORK IN PROGRESS. THIS IS THE EXPLANATION FOR THE SEIZE D DOCUMENTS ANNEXURE A-1. TO ACCOUNT FOR THESE SEIZE D DOCUMENTS AND OTHER SEIZED DOCUMENTS WHICH CAN NOT BE ADEQUATELY EXPLAIN BY US, WE VOLUNTARILY OFFER A SU M OF RS.8 CRORES (RS. EIGHT CRORES) WHICH IS OVER AND AB OVE THE NORMAL INCOME EARNED BY US DURING THE COURSE OF THE YEAR. THIS RS.8 CRORES (EIGHT CRORES) REPRESENTS OUR UNDI SCLOSED INCOME EARNED DURING THE YEAR ON ACCOUNTS OF UNEXPL AINED CASH RECEIPTS, UNEXPLAINED WORK IN PROGRESS AS WELL AS SHARE CAPITAL AND SHARE PREMIUM RECEIVED. THIS DIS CLOSER OF RS. EIGHT CRORES WHICH IS OVER AND ABOVE THE NOR MAL INCOME EARNED BY US DURING THE COURSE OF THE YEAR I S BEING MADE TO BUY PEACE OF MIND, TO AVOID PENALTY AND PROSECUTION PROCEEDINGS AND ALSO TO AVOID PROTECTED LITIGATION. 14. FROM THE ABOVE STATEMENT, IT IS CLEAR THAT THE AUTHORIZED OFFICER WHO WAS RECORDING THE STATEMENT HAS STATED THAT CER TAIN LOOSE PAPERS WERE WITH REGARD TO CASH RECEIVED FOR SALE OF PROPE RTIES WHICH IS NOT REFLECTED IN THE BOOKS OF ACCOUNT AND SOME OTHER LO OSE PAPERS WERE WITH REGARD TO DETAILS OF EXPENSES INCURRED FOR CON STRUCTION WORK WHICH ARE NOT REFLECTED IN THE BOOKS OF ACCOUNT. THE ASS ESSEE IN HIS REPLY ITA NO.1698/DEL/2014 & 12 OTHERS 13 HAS VIRTUALLY ACCEPTED THIS POSITION. THEREFORE, A DMITTEDLY, NONE OF THE LOOSE PAPERS FOUND FROM THE ASSESSEES PREMISES WAS RELATING TO SHARE CAPITAL ISSUED BY THE ASSESSEE. 15. THE CASE OF THE REVENUE IS THAT THE STATEMENT O F SHRI TARUN GOYAL AS WELL AS SHRI ANU AGGARWAL WHICH WAS RECORD ED DURING THE COURSE OF SEARCH OF THEIR RESPECTIVE PREMISES IS TH E INCRIMINATING MATERIAL. AS PER ASSESSING OFFICER, IN THE STATEME NT, SHRI TARUN GOYAL HAS ADMITTED THAT HE IS PROVIDING ACCOMMODATION ENT RIES FROM HIS GROUP COMPANIES TO THE BEST GROUP OF COMPANIES. UN DISPUTEDLY, THE STATEMENT OF SHRI TARUN GOYAL WAS RECORDED BEHIND T HE BACK OF THE ASSESSEE. SHRI TARUN GOYALS STATEMENT WAS RECORDE D DURING THE COURSE OF SEARCH AT HIS PREMISES. IT IS THE CLAIM OF THE REVENUE THAT SHRI TARUN GOYAL WAS TAKEN TO THE ASSESSEES PREMIS ES FOR OFFERING CROSS-EXAMINATION OF SHRI TARUN GOYAL TO THE ASSESS EE BUT ASSESSEE REFUSED TO AVAIL SUCH OPPORTUNITY. HOWEVER, THERE IS NO EVIDENCE TO SUPPORT THIS CONTENTION OF THE ASSESSING OFFICER EX CEPT THE STATEMENT OF SHRI TARUN GOYAL VIDE QUESTION AND ANSWER NO.4, WHICH READ AS UNDER:- Q.NO.4 PLEASE CONFIRM THAT REGARDING YOUR ANSWER T O Q.NO.2 OF THIS STATEMENT YOU WERE TAKEN TO THE OFFI CE OF THE BEST GROUP OF COMPANIES AT PLOT NO.H-8, BEST PLAZA, NETAJI SUBASH PLACE, PITAMPURA, NEW DELHI TO CONFRONT YOUR STATEMENT WITH THEM. HOWEVER THEY REFUSED ANY SUCH CONFRONTATION OR CROSS EXAMINATION. ANS. I CONFIRM THAT I WAS TAKEN TO THE OFFICE OF BE ST GROUP OF COMPANIES FOR CONFRONTATION/CROSS EXAMINATION BY THE DIRECTORS OF THE COMPANY, HOWEVER THEY REFUSED ANY SUCH CROSS EXAMINATION/CONFRONTATION REGARDING TRANSACTI ONS MENTIONED IN MY ANSWER TO Q.NO.2 OF THIS STATEMENT. 16. IT IS TRITE LAW THAT THE STATEMENT OF A THIRD P ARTY RECORDED BEHIND THE BACK OF THE ASSESSEE CANNOT BE UTILIZED AGAINST THE ASSESSEE ITA NO.1698/DEL/2014 & 12 OTHERS 14 UNLESS ASSESSEE IS GIVEN AN OPPORTUNITY TO CROSS-EX AMINE. THEREFORE, ANYTHING STATED IN THE STATEMENT OF SHRI TARUN GOYA L CANNOT BE RELIED UPON TO CLAIM THAT THE ASSESSEE WAS ALLOWED AN OPPO RTUNITY TO CROSS- EXAMINE SHRI TARUN GOYAL AND IT WAS REFUSED BY THEM . NO DOCUMENTARY EVIDENCE HAS BEEN PLACED ON RECORD BEFO RE US BY THE REVENUE TO SUPPORT THEIR CONTENTION THAT THE DIRECT OR OF THE ASSESSEE COMPANY HAS REFUSED TO CROSS-EXAMINE SHRI TARUN GOY AL. IT IS PERTINENT TO NOTE THAT THE SEARCH AT ASSESSEES PRE MISES AS WELL AS SHRI TARUN GOYAL GROUP OF COMPANIES TOOK PLACE SIMULTANE OUSLY I.E., ON 15 TH SEPTEMBER, 2008. THE STATEMENT OF SHRI TARUN GOYAL ON WHICH THE DEPARTMENT IS PLACING HEAVY RELIANCE IS RECORDED ON 15 TH SEPTEMBER, 2008 AND, IN THE SAID STATEMENT, IT IS MENTIONED BY SHRI TARUN GOYAL THAT HE WAS TAKEN TO THE OFFICE OF BEST GROUP OF CO MPANIES FOR CROSS- EXAMINATION BY THE DIRECTOR OF THE SAID COMPANY. H OWEVER, THEY REFUSED ANY SUCH CROSS-EXAMINATION. ON THE SAME DA Y I.E., 15 TH SEPTEMBER, 2008, THE STATEMENTS OF SHRI ANU AGGARWA L AS WELL AS SHRI HARJEET SINGH, DIRECTORS OF BEST GROUP OF COMPANIES ARE RECORDED BUT, IN SUCH STATEMENT, NOWHERE IT IS MENTIONED THAT THE Y REFUSED TO CROSS- EXAMINE SHRI TARUN GOYAL. THIS ISSUE AROSE BEFORE THE CIT(A) AND HE, IN HIS LETTER DATED 19 TH FEBRUARY, 2013 WRITTEN TO DEPUTY COMMISSIONER OF INCOME-TAX, DIRECTED THE ASSESSING OFFICER TO PR OVIDE AN OPPORTUNITY TO THE APPELLANT COMPANY TO CROSS-EXAMINE SHRI TARU N GOYAL TO SETTLE THE CONTROVERSY FOREVER. THE RELEVANT PARAGRAPH OF THE SAID LETTER IS REPRODUCED BELOW FOR READY REFERENCE :- 3. I HAVE PERUSED THE ASSESSMENT ORDER, THE ADDITI ON IS MADE UNDER SECTION 68 OF THE I.T. ACT, MAINLY ON TH E BASIS OF STATEMENT OF SHRI TARUN GOYAL AND IT IS MENTIONE D IN THE ASSESSMENT ORDER THAT DURING THE COURSE OF SEARCH O N 15.09.2008, SHRI TARUN GOYAL WAS TAKEN TO THE PREMI SE OF BEST GROUP AT H-8, NETAJI SUBASH PLACE, PITAMPURA, NEW DELHI-110034. THE DIRECTORS/PROMOTERS OF BEST GROU P HOWEVER REFUSED THE OPPORTUNITY OF CROSS-EXAMINATIO N. THIS IS CONFIRMED BY SH. TARUN GOYAL, IN HIS STATEM ENT TO ITA NO.1698/DEL/2014 & 12 OTHERS 15 QUERY NO.4. HOWEVER, LD. AR HAS MADE THE SUBMISSIO N THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSE E HAS CONTENDED THAT HE WAS NEVER GIVEN AN OPPORTUNITY TO CROSS-EXAMINE SH. TARUN GOYAL. IN THE ASSESSMENT O RDER, NOWHERE IT IS MENTIONED THAT DIRECTORS/PROMOTERS OF THIS GROUP OF COMPANIES HAS SIGNED ON ANY STATEMENT OR DOCUMENT THAT THEY HAVE REFUSED CROSS-EXAMINATION. THEREFORE, FOR THE SAKE OF CLARITY ON THIS MATTER, I DIRECT YOU TO PROVIDE AN OPPORTUNITY TO APPELLANT COMPANY TO C ROSS- EXAMINE SH. TARUN GOYAL TO SETTLE THE CONTROVERSY F OREVER. THIS MAY BE TREATED AS DIRECTION UNDER SECTION 250( 4) OF I.T. ACT. 17. DESPITE THE ABOVE SPECIFIC DIRECTION, THE ASSES SING OFFICER DID NOT ALLOW OPPORTUNITY TO CROSS-EXAMINE SHRI TARUN GOYAL . FROM THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER DA TED 10 TH JULY, 2013, IT IS GATHERED THAT HE DID ISSUE NOTICE U/S 1 31 TO SHRI TARUN GOYAL TO ATTEND HIS OFFICE TWICE. HOWEVER, SHRI TARUN GO YAL DID NOT APPEAR IN COMPLIANCE TO SUCH NOTICE. THEREAFTER, HE ASKED TH E DIRECTOR OF THE ASSESSEE COMPANY TO PRODUCE SHRI TARUN GOYAL FOR CR OSS-EXAMINATION, IN RESPONSE TO WHICH, THE DIRECTOR OF THE ASSESSEE COMPANY REPLIED THAT THEY ARE NOT AWARE ABOUT THE WHEREABOUTS OF SH RI TARUN GOYAL SINCE LONG. THUS, THE FACT REMAINS THAT THE CROSS- EXAMINATION OF SHRI TARUN GOYAL COULD NOT BE ALLOWED TO THE ASSESSEE. IT IS SETTLED LAW THAT THE STATEMENT OF A THIRD PARTY RECORDED BEHIND THE BACK OF THE ASSESSEE CANNOT BE UTILIZED AGAINST THE ASSESSEE UN LESS HE HAS BEEN ALLOWED AN OPPORTUNITY TO CROSS-EXAMINE THE SAID TH IRD PARTY. 18. HONBLE APEX COURT HAS CONSIDERED THE ISSUE OF VALIDITY OF STATEMENT WITHOUT ALLOWING OPPORTUNITY OF CROSS-EXA MINATION TO THE OTHER SIDE IN THE CASE OF M/S ANDAMAN TIMBER INDUST RIES (SUPRA). THEIR LORDSHIPS HELD AS UNDER:- ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROS S- EXAMINE THE WITNESS BY THE ADJUDICATING AUTHORITY T HOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BAS IS OF ITA NO.1698/DEL/2014 & 12 OTHERS 16 THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES TH E ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEM ENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN TH E ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNITY TO THE ASSESSEE. 19. HON'BLE JURISDICTIONAL HIGH COURT HAS ALSO CONS IDERED A SIMILAR ISSUE IN THE CASE OF SMC SHARE BROKERS LTD. (SUPRA) . THE RELEVANT FINDING OF THEIR LORDSHIPS IS IN PARAGRAPH 6 OF THE ORDER. THE SAME IS REPRODUCED BELOW:- 6. LEARNED COUNSEL FOR THE REVENUE RELIED UPON ONE -UP SHARES & STOCK BROKERS (P) LTD. V. R.R. SINGH, CIT [2003] 262 ITR 275 TO CONTEND THAT THE STATEMENT OF MANOJ AGGARWAL HAD EVIDENTIARY VALUE, AS OBSERVED BY THE BOMBAY HIGH COURT. THERE IS NO DOUBT THAT THE STAT EMENT OF MANOJ AGGARWAL HAD EVIDENTIARY VALUE BUT WEIGHT COULD NOT BE GIVEN TO IT IN PROCEEDINGS AGAINST THE ASSES SEE WITHOUT IT BEING TESTED UNDER CROSS-EXAMINATION. I N THE ABSENCE OF THE STATEMENT BEING TESTED, IT CANNOT BE SAID THAT IT SHOULD BE BELIEVED COMPLETELY TO THE PREJUD ICE OF THE ASSESSEE. UNDER THE CIRCUMSTANCES, WE DO NOT T HINK THAT THE JUDGMENT RELIED UPON BY THE LEARNED COUNSE L CARRIES HIM ANY FURTHER. 20. ADMITTEDLY, THE ASSESSEE WAS NOT ALLOWED THE CR OSS-EXAMINATION OF SHRI TARUN GOYAL WITH REFERENCE TO HIS STATEMENT WHICH WAS RECORDED BEHIND THE BACK OF THE ASSESSEE. THEREFOR E, WE, RELYING UPON THE ABOVE DECISION OF HONBLE APEX COURT AS WELL AS HON'BLE JURISDICTIONAL HIGH COURT, HOLD THAT THE STATEMENT OF SHRI TARUN GOYAL CANNOT BE USED AGAINST THE ASSESSEE. 21. SO FAR AS THE STATEMENT OF SHRI ANU AGGARWAL DA TED 15 TH SEPTEMBER, 2008 IS CONCERNED, THE RELEVANT PORTION OF THE SAME HAS ALREADY BEEN REPRODUCED BY US IN PARAGRAPH 13 ABOVE . THE AUTHORIZED ITA NO.1698/DEL/2014 & 12 OTHERS 17 OFFICER ASKED THE QUERY WITH REGARD TO CERTAIN LOOS E PAPERS FOUND AND SEIZED. FROM A READING OF THE QUESTION, IT IS EVID ENT THAT AS PER AUTHORIZED OFFICER ALSO, THE LOOSE PAPERS WERE PERT AINING TO SOME UNACCOUNTED RECEIPT AND UNACCOUNTED EXPENDITURE ON CONSTRUCTION. SHRI ANU AGGARWAL ALSO ADMITTED THE SIMILAR POSITIO N IN HIS REPLY. THUS, ADMITTEDLY, THE QUESTION WAS NOT RELATING TO ISSUE OF SHARE CAPITAL, MUCH LESS WHETHER THE SHARE CAPITAL WAS TAKEN AS AC COMMODATION ENTRY BY THE ASSESSEE. ANOTHER STATEMENT OF SHRI A NU AGGARWAL WAS RECORDED ON 24 TH OCTOBER, 2008. QUESTION NOS.3, 6 & 7 WERE RELATIN G TO SHARE CAPITAL, WHICH ARE REPRODUCED BELOW FOR READY REFERENCE:- Q.NO.3 PLEASE PROVIDE THE DETAILS OF SHARE PREMIUM OF VARIOUS COMPANIES OF THE BEST GROUP OF COMPANIES FO R THE LAST 6 YEAR. ANS. THE REQUIRED INFORMATION IS BEING PRODUCED/SUBMITTED TODAY ITSELF. Q.NO.6 DURING THE COURSE OF SEARCH ON SH. TARUN GOYAL, HE HAS STATED IN HIS STATEMENT THAT HE HAS P ROVIDED YOU ACCOMMODATION ENTRIES. PLEASE EXPLAIN THE SAME . ANS. I PERSONALLY DO NOT KNOW SH. TARUN GOYAL, EXCE PT THAT HE MAY HAVE INVESTED IN OUR GROUP COMPANIES. HOWEV ER, WE HAVE NOT RECEIVED ANY ACCOMMODATION ENTRIES FROM ANY BODY. I HAVE ALREADY GIVEN MY STATEMENT ON 15-09-2 008 IN WHICH IN MY ANSWER TO QUESTION NO.15. I HAD SURREN DERED A TOTAL AMOUNT OF RS.8 CR. ON ACCOUNT OF UNEXPLAINED CASH RECEIVED FROM VARIOUS BOOKINGS IN MY GROUP COMPANIE S AND THE UNEXPLAINED EXPENSES TOWARDS THE WORK IN PROGRESS OF VARIOUS PROJECTS IN THOSE COMPANIES AND OTHER OUTGOING. THESE UNEXPLAINED RECEIPTS AND OUT GOING S CAN BE CORRELATED AND DETAILED AT THE TIME OF ASSESSMEN T AFTER GOING THROUGH THE SEIZED MATERIAL AND OTHER AVAILAB LE RECORDS. Q.NO.7 AT THE TIME OF SEARCH ON 15-09-2008 TO THE QUESTION NO.15, YOU ALSO CONFIRMED IN YOUR ANSWER T HAT THIS SURRENDER OF RS.8 CR. INCLUDES RECEIPT OF SHARE CAP ITAL AND SHARE PREMIUM. PLEASE EXPLAIN AND CLARIFY THE SAME . ITA NO.1698/DEL/2014 & 12 OTHERS 18 ANS. AS EXPLAINED IN THE ANSWER TO THE QUESTION NO .6, THE UTILIZATION OF THE UNEXPLAINED RECEIPTS AND ITS COR RELATION WITH THE OUTGOINGS CAN BE ASCERTAINED AFTER EXAMINI NG THE SEIZED MATERIAL AND THEREFORE IT IS DIFFICULT TO DE TAIL IF ANY AMOUNT FROM THE SURRENDER WAS UTILIZE TOWARDS THE R ECEIPT OF ANY SHARE CAPITAL OR NOT. 22. FROM THE ABOVE, IT IS EVIDENT THAT BY QUESTION NO.3, SHRI ANU AGGARWAL WAS ASKED TO SUBMIT THE DETAILS OF SHARE P REMIUM OF VARIOUS COMPANIES OF BEST GROUP OF COMPANIES. IN REPLY, HE STATED THAT THE DETAILS ARE BEING FURNISHED. IN QUESTION NO.3, SHR I ANU AGGARWAL WAS CONFRONTED WITH THE STATEMENT OF SHRI TARUN GOYAL W HEREIN, AS PER AUTHORIZED OFFICER, SHRI TARUN GOYAL HAS STATED THA T HE HAS PROVIDED ACCOMMODATION ENTRY TO THE ASSESSEES GROUP OF COMP ANIES. IN REPLY, SHRI ANU AGGARWAL HAS DENIED TO HAVE RECEIVED ANY A CCOMMODATION ENTRIES FROM ANYONE. HE ALSO EXPLAINED THE SURREND ER OF `8 CRORES TO BE ON ACCOUNT OF UNEXPLAINED CASH RECEIVED FROM VAR IOUS BOOKINGS IN THE GROUP COMPANIES AND UNEXPLAINED EXPENDITURE TOW ARDS THE WORK IN PROGRESS. THEREFORE, IN THE STATEMENT OF SHRI ANU AGGARWAL DATED 24 TH OCTOBER, 2008 ALSO, THERE IS NO ADMISSION FOR RECEI PT OF ANY ACCOMMODATION ENTRY EITHER FROM TARUN GOYAL GROUP O F COMPANIES OR FROM ANYBODY ELSE. 23. WE HAVE DISCUSSED IN DETAIL THE LEGAL POSITION AS LAID DOWN BY HON'BLE JURISDICTIONAL HIGH COURT AND HONBLE APEX COURT IN VARIOUS CASES. WE HAVE ALSO DISCUSSED THE FACTS OF THE ASS ESSEES CASE. NOW, APPLYING THE LAW AS LAID DOWN BY HON'BLE JURISDICTI ONAL HIGH COURT AND HONBLE APEX COURT TO THE FACTS OF THE ASSESSEES C ASE, THE FOLLOWING POSITION EMERGES. (I) (I)(I) (I) NO ADDITION U/S 153A IN RESPECT OF A COMPLETED ASSESSMENT CAN BE MADE UNLESS SOME INCRIMINATING MATERIAL WAS UNEA RTHED DURING THE COURSE OF SEARCH. ADMITTEDLY, IN THE CASE OF THE A SSESSEE, NO ITA NO.1698/DEL/2014 & 12 OTHERS 19 INCRIMINATING MATERIAL WITH REGARD TO ISSUE OF SHAR E CAPITAL HAS BEEN FOUND AND SEIZED DURING THE COURSE OF SEARCH. (II) (II)(II) (II) ANY STATEMENT RECORDED DURING THE COURSE OF SE ARCH CANNOT ON A STANDALONE BASIS WITHOUT REFERENCE TO ANY OTHER MAT ERIAL DISCOVERED DURING SEARCH AND SEIZURE OPERATION WOULD EMPOWER T HE ASSESSING OFFICER TO MAKE THE ADDITION. THE WORDS EVIDENCE FOUND AS A RESULT OF SEARCH WOULD NOT TAKE WITHIN ITS SWEEP STATEMENT R ECORDED DURING SEARCH AND SEIZURE OPERATIONS. THEREFORE, THE REVE NUES STAND THAT THE ADDITION U/S 153A CAN BE MADE IN RESPECT OF SHA RE CAPITAL ON ACCOUNT OF STATEMENT OF SHRI TARUN GOYAL AND SHRI A NU AGGARWAL CANNOT BE ACCEPTED. (III) (III) (III) (III) EVEN OTHERWISE, THE STATEMENT OF SHRI TARUN GOYAL CANNOT BE UTILIZED AGAINST THE ASSESSEE AS HIS STATEMENT WAS RECORDED BEHIND THE BACK OF THE ASSESSEE AND THE ASSESSEE WAS NOT ALLOW ED OPPORTUNITY TO CROSS-EXAMINE HIM. (IV) (IV) (IV) (IV) IN THE STATEMENT OF SHRI ANU AGGARWAL DATED 15 TH SEPTEMBER, 2008, THE QUERY WAS RAISED WITH REGARD TO LOOSE PAP ERS FOUND AND SEIZED FROM THEIR PREMISES. ADMITTEDLY, NONE OF TH E LOOSE PAPERS WAS RELATING TO ISSUE OF SHARE CAPITAL. THE LOOSE PAPE RS WERE PERTAINING TO UNACCOUNTED RECEIPT ON SALE AND UNACCOUNTED EXPENDI TURE ON CONSTRUCTION. IN THE STATEMENT DATED 24 TH OCTOBER, 2008, THOUGH THE QUERY WAS RAISED WITH REGARD TO ISSUE OF SHARE CAPI TAL AND THE STATEMENT OF SHRI TARUN GOYAL WAS CONFRONTED WHEREI N HE HAS ALLEGED TO HAVE PROVIDED ACCOMMODATION ENTRY TO THE ASSESSE E GROUP, SHRI ANU AGGARWAL CATEGORICALLY DENIED TO HAVE RECEIVED ANY ACCOMMODATION ENTRIES FROM ANYBODY. ITA NO.1698/DEL/2014 & 12 OTHERS 20 24. IN VIEW OF THE ABOVE, WE HOLD THAT THE ISSUE OF SHARE CAPITAL WAS OUT OF THE PURVIEW OF ASSESSMENT U/S 153A AS THE AS SESSMENT FOR ASSESSMENT YEAR 2005-06 WAS NOT PENDING ON THE DATE OF SEARCH AND NO INCRIMINATING MATERIAL RELATING TO SHARE CAPITAL WAS FOUND DURING THE COURSE OF SEARCH. ACCORDINGLY, THE ADDITION OF `3, 60,00,000/- MADE BY THE ASSESSING OFFICER AND SUSTAINED BY LEARNED CIT( A) FOR UNEXPLAINED SHARE CAPITAL IS DELETED. 25. SO FAR AS THE ADDITION OF `8,10,000/- FOR ALLEG ED UNEXPLAINED EXPENDITURE FOR OBTAINING THE SHARE CAPITAL IS CONC ERNED, BOTH THE PARTIES AGREED THAT THIS ISSUE IS CONSEQUENTIAL TO THE ISSUE OF SHARE CAPITAL. WE HAVE ACCEPTED THE ASSESSEES CONTENTIO N THAT THE ISSUE OF SHARE CAPITAL CANNOT BE CONSIDERED U/S 153A BECAUSE NO INCRIMINATING MATERIAL WAS FOUND WITH REGARD TO SHARE CAPITAL. S IMILARLY, NO INCRIMINATING MATERIAL WAS FOUND SO AS TO ESTABLISH THAT THE ASSESSEE HAS TAKEN THE ACCOMMODATION ENTRY AND HAS PAID COMM ISSION FOR OBTAINING SUCH ACCOMMODATION ENTRY. THEREFORE, THE ADDITION FOR ALLEGED PAYMENT OF COMMISSION IS ALSO OUT OF THE PU RVIEW OF SECTION 153A. ACCORDINGLY, THE SAME IS ALSO DELETED. ITA NO.1699/DEL/2014 & 1700/DEL/2014 ITA NO.1699/DEL/2014 & 1700/DEL/2014 ITA NO.1699/DEL/2014 & 1700/DEL/2014 ITA NO.1699/DEL/2014 & 1700/DEL/2014 - -- - M/ M/M/ M/S BEST INFRASTRUCTURE (INDIA) S BEST INFRASTRUCTURE (INDIA) S BEST INFRASTRUCTURE (INDIA) S BEST INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY 2006 PVT.LTD. FOR AY 2006 PVT.LTD. FOR AY 2006 PVT.LTD. FOR AY 2006- -- -07 & 2007 07 & 2007 07 & 2007 07 & 2007- -- -08, ITA NO.1702/DEL/2014 & 08, ITA NO.1702/DEL/2014 & 08, ITA NO.1702/DEL/2014 & 08, ITA NO.1702/DEL/2014 & 1703/DEL/2014 1703/DEL/2014 1703/DEL/2014 1703/DEL/2014 M/S BEST CITY PROJECTS (INDIA) PVT.LTD. FOR AY 200 6 M/S BEST CITY PROJECTS (INDIA) PVT.LTD. FOR AY 2006 M/S BEST CITY PROJECTS (INDIA) PVT.LTD. FOR AY 2006 M/S BEST CITY PROJECTS (INDIA) PVT.LTD. FOR AY 2006 - -- -07 & 07 & 07 & 07 & 2007 2007 2007 2007- -- -08, ITA NO.1704/DEL/2014 08, ITA NO.1704/DEL/2014 08, ITA NO.1704/DEL/2014 08, ITA NO.1704/DEL/2014 M/S BEST CITY DEVELOPERS INDIA PVT.LTD. M/S BEST CITY DEVELOPERS INDIA PVT.LTD. M/S BEST CITY DEVELOPERS INDIA PVT.LTD. M/S BEST CITY DEVELOPERS INDIA PVT.LTD. FOR AY 2007 FOR AY 2007 FOR AY 2007 FOR AY 2007- -- -08, ITA NO. 08, ITA NO. 08, ITA NO. 08, ITA NO.1706/DEL/2014 1706/DEL/2014 1706/DEL/2014 1706/DEL/2014 M/S BEST CITY REALTORS (INDIA) M/S BEST CITY REALTORS (INDIA) M/S BEST CITY REALTORS (INDIA) M/S BEST CITY REALTORS (INDIA) PVT.LTD. FOR AY 2007 PVT.LTD. FOR AY 2007 PVT.LTD. FOR AY 2007 PVT.LTD. FOR AY 2007- -- -08 AND 1708/DEL/2014 & 1709/DEL/2014 08 AND 1708/DEL/2014 & 1709/DEL/2014 08 AND 1708/DEL/2014 & 1709/DEL/2014 08 AND 1708/DEL/2014 & 1709/DEL/2014 M/S BEST M/S BEST M/S BEST M/S BEST REALTORS (INDIA) PVT.LTD. FOR AY 2005 REALTORS (INDIA) PVT.LTD. FOR AY 2005 REALTORS (INDIA) PVT.LTD. FOR AY 2005 REALTORS (INDIA) PVT.LTD. FOR AY 2005- -- -06 & 2007 06 & 2007 06 & 2007 06 & 2007- -- -08 08 08 08 : :: :- -- - 26. IN ALL THESE APPEALS BY THE ASSESSEES, THE GROUNDS RAISED ARE IDENTICAL TO THE GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL IN THE CASE OF M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. FO R ASSESSMENT YEAR 2005-06 VIDE ITA NO.1698/DEL/2014. FOR READY REFER ENCE, THE DETAILS OF THE ADDITIONS MADE AND SUSTAINED BY THE LEARNED CIT(A) IN EACH CASE ARE SUMMARIZED BELOW :- ITA NO.1698/DEL/2014 & 12 OTHERS 21 M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. : M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. : M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. : M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. :- -- - ITA NO. AY ADDITION FOR UNEXPLAINED SHARE CAPITAL ADDITION FOR ALLEGED EXPENDITURE ON COMMISSION 1699/DEL/2014 2006 - 07 2,60,15,000/ - 5,85,340/ - 1700/DEL/2014 2007 - 08 3,71,00,000/ - 8,34,750/ - M/S BES M/S BES M/S BES M/S BEST CITY PROJECTS (INDIA) PVT.LTD. T CITY PROJECTS (INDIA) PVT.LTD. T CITY PROJECTS (INDIA) PVT.LTD. T CITY PROJECTS (INDIA) PVT.LTD. : :: :- -- - ITA NO. AY ADDITION FOR UNEXPLAINED SHARE CAPITAL ADDITION FOR ALLEGED EXPENDITURE ON COMMISSION 1702/DEL/2014 2006 - 07 2,27,50,000/ - 5,11,875/ - 1703/DEL/2014 2007 - 08 5,37,00,000/ - 12,08,250/ - M/S M/S M/S M/S BEST BEST BEST BEST CITY DEVELOPERS INDIA PVT.LTD. CITY DEVELOPERS INDIA PVT.LTD. CITY DEVELOPERS INDIA PVT.LTD. CITY DEVELOPERS INDIA PVT.LTD. : :: :- -- - ITA NO. AY ADDITION FOR UNEXPLAINED SHARE CAPITAL ADDITION FOR ALLEGED EXPENDITURE ON COMMISSION 1704/DEL/2014 2007 - 08 1,00,00,000/ - 2,25,000/ - M/S BEST M/S BEST M/S BEST M/S BEST CITY REALTORS (INDIA) PVT.LTD. CITY REALTORS (INDIA) PVT.LTD. CITY REALTORS (INDIA) PVT.LTD. CITY REALTORS (INDIA) PVT.LTD. : :: :- -- - ITA NO. AY ADDITION FOR UNEXPLAINED SHARE CAPITAL ADDITION FOR ALLEGED EXPENDITURE ON COMMISSION 1706/DEL/2014 2007 - 08 3,55,00,000/ - 7,98,750/ - M/S BEST M/S BEST M/S BEST M/S BEST REALTORS (INDIA) PVT.LTD. REALTORS (INDIA) PVT.LTD. REALTORS (INDIA) PVT.LTD. REALTORS (INDIA) PVT.LTD. : :: :- -- - ITA NO. AY ADDITION FOR UNEXPLAINED SHARE CAPITAL ADDITION FOR ALLEGED EXPENDITURE ON COMMISSION 1708/DEL/2014 2005 - 06 2,00,00,000/ - 4,50,000/ - 1709/DEL/2014 2007 - 08 15,00,000/ - 33,750/ - 27. AT THE TIME OF HEARING BEFORE US, BOTH THE PART IES FAIRLY AGREED THAT THE GROUNDS RAISED AND THE FACTS IN ALL THESE APPEALS ARE IDENTICAL ITA NO.1698/DEL/2014 & 12 OTHERS 22 TO THE FACTS AND GROUNDS RAISED IN THE CASE OF M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. FOR ASSESSMENT YEAR 2005-06 VIDE I TA NO.1698/DEL/2014, EXCEPT THE DIFFERENCE IN AMOUNT O F SHARE CAPITAL. THEREFORE, BOTH THE PARTIES FAIRLY STATED THAT THE OUTCOME OF THE APPEAL IN ITA NO.1698/DEL/2014 IN THE CASE OF M/S BEST INF RASTRUCTURE (INDIA) PVT.LTD. FOR ASSESSMENT YEAR 2005-06 WOULD BE SQUAR ELY APPLICABLE IN ALL THE ABOVE APPEALS. 28. WE HAVE ALREADY DECIDED THE APPEAL OF M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. FOR ASSESSMENT YEAR 2005-06 VIDE I TA NO.1698/DEL/2014 AND, FOR THE DETAILED DISCUSSION F ROM PARAGRAPH NO.8 TO 25, WE ALLOW THESE APPEALS OF THE ASSESSEE ALSO. THE ADDITIONS MADE FOR UNEXPLAINED CREDIT IN THE FORM OF SHARE CA PITAL AS WELL AS THE ADDITION MADE FOR ALLEGED COMMISSION ARE DELETED BE CAUSE THEY ARE OUT OF THE PURVIEW OF ASSESSMENT U/S 153A. ITA NO.1701/DEL/2014 ITA NO.1701/DEL/2014 ITA NO.1701/DEL/2014 ITA NO.1701/DEL/2014 - -- - M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY 2008 2008 2008 2008- -- -09, ITA NO.1705/DEL/2014 09, ITA NO.1705/DEL/2014 09, ITA NO.1705/DEL/2014 09, ITA NO.1705/DEL/2014 - -- - M/S BEST CITY DEVELOPERS INDIA PVT.LTD. M/S BEST CITY DEVELOPERS INDIA PVT.LTD. M/S BEST CITY DEVELOPERS INDIA PVT.LTD. M/S BEST CITY DEVELOPERS INDIA PVT.LTD. FOR AY 2008 FOR AY 2008 FOR AY 2008 FOR AY 2008- -- -09 0909 09 AND AND AND AND ITA NO.17 ITA NO.17 ITA NO.17 ITA NO.1707/DEL/2014 07/DEL/2014 07/DEL/2014 07/DEL/2014 M/S BEST CITY REALTORS M/S BEST CITY REALTORS M/S BEST CITY REALTORS M/S BEST CITY REALTORS (INDIA) PVT.LTD. FOR AY 2008 (INDIA) PVT.LTD. FOR AY 2008 (INDIA) PVT.LTD. FOR AY 2008 (INDIA) PVT.LTD. FOR AY 2008- -- -09 09 09 09 : :: :- -- - IN ALL THE ABOVE APPEALS, THE GROUNDS RAISED ARE I DENTICAL. GROUND NO.2 IN ALL THE ABOVE CASES IS AGAINST THE S USTAINABILITY OF ADDITION U/S 153A. LEARNED COUNSEL FOR THE ASSESSE E HAS NOT PRESSED THIS GROUND OF APPEAL AND, THEREFORE, GROUND NO.2 I N ALL THE ABOVE APPEALS IS REJECTED. GROUND NO.1 IN ALL THE ABOVE APPEALS IS AGAINST TH E ADDITION SUSTAINED FOR UNEXPLAINED SHARE CAPITAL WHILE GROUN D NO.3 IS AGAINST THE ADDITION SUSTAINED FOR ALLEGED COMMISSION ON TH E SHARE CAPITAL. THE SAME ARE SUMMARIZED AS UNDER:- ITA NO.1698/DEL/2014 & 12 OTHERS 23 M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. : M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. : M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. : M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD. :- -- - ITA NO. AY ADDITION FOR UNEXPLAINED SHARE CAPITAL ADDITION FOR ALLEGED EXPENDITURE ON COMMISSION 1701/DEL/2014 2008 - 09 5,00 ,000/ - 11,250/ - M/S BEST M/S BEST M/S BEST M/S BEST CITY DEVELOPERS INDIA PVT.LTD. CITY DEVELOPERS INDIA PVT.LTD. CITY DEVELOPERS INDIA PVT.LTD. CITY DEVELOPERS INDIA PVT.LTD. : :: :- -- - ITA NO. AY ADDITION FOR UNEXPLAINED SHARE CAPITAL ADDITION FOR ALLEGED EXPENDITURE ON COMMISSION 1705/DEL/2014 2008 - 09 1,50,00,000/ - 3,37,500/ - M/S BEST M/S BEST M/S BEST M/S BEST CITY REALTORS (INDIA) PVT.LTD. CITY REALTORS (INDIA) PVT.LTD. CITY REALTORS (INDIA) PVT.LTD. CITY REALTORS (INDIA) PVT.LTD. : :: :- -- - ITA NO. AY ADDITION FOR UNEXPLAINED SHARE CAPITAL ADDITION FOR ALLEGED EXPENDITURE ON COMMISSION 1707/DEL/2014 2008 - 09 2,00,00,000/ - 4,50,000/ - 29. AT THE TIME OF HEARING BEFORE US, IT IS STATED BY THE LEARNED COUNSEL THAT IN ALL THE ABOVE APPEALS, ONLY ONE GRO UND HAS BEEN RAISED WITH REGARD TO ADDITION FOR ALLEGED UNEXPLAINED SHA RE CAPITAL. HE SUBMITTED THAT THE ASSESSMENT ORDER IN THE CASE OF ALL THE ASSESSEES FOR ALL THE YEARS ARE IDENTICALLY WORDED. IN FACT, THE ASSESSING OFFICER HAS PREPARED A CHART AT PAGE 7 & 8 OF THE ASSESSMEN T ORDER IN WHICH HE HAS SUMMARIZED THE SHARE CAPITAL OF ALL THE COMP ANIES IN ALL THE YEARS AND THEREAFTER, HE MADE THE ADDITION IN RESPE CT OF RESPECTIVE ASSESSMENT YEAR IN EACH CASE. HE, THEREFORE, SUBMI TTED THAT IF ANY ONE CASE IS TAKEN AND CONSIDERED, THE FINDING IN TH AT ONE CASE WOULD BE MADE APPLICABLE TO ALL THE ASSESSEES IN BOTH THE YEARS. 30. LEARNED DR ALSO FAIRLY ADMITTED THAT THE FACTS IN ALL THE CASES FOR BOTH THE YEARS ARE IDENTICAL AND THE ASSESSING OFFI CER HAS VIRTUALLY PASSED IDENTICALLY WORDED ORDER IN ALL THE CASES. HE, THEREFORE, AGREED ITA NO.1698/DEL/2014 & 12 OTHERS 24 WITH THE SUBMISSION OF THE LEARNED COUNSEL THAT ANY ONE CASE CAN BE TAKEN UP FOR DETAILED CONSIDERATION AND ARGUMENTS. ACCORDINGLY, AS AGREED BY BOTH THE PARTIES, THE APPEAL IN ITA NO.17 05/DEL/2014 I.E., IN THE CASE OF M/S BEST CITY DEVELOPERS INDIA PVT.LTD. FOR ASSESSMENT YEAR 2008-09 IS TAKEN UP FOR CONSIDERATION. IN THIS CAS E, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LD.CIT(A) HAS ERRED ON BOTH FACTS AND LAW OF THE CASE IN CONFIRMING THE ADDITIONS OF RS.1.5 CROR E U/S 68 ON ACCOUNT OF SHARE CAPITAL ISSUED BY THE ASSESSEE COMPANY AND HOLDING THE SAME TO BE UNDISCLOSED INCO ME OF THE ASSESSEE COMPANY, WHICH IS UNJUSTIFIED, ARBI TRARY, CONTRARY TO THE LAW AND FACTS AND BAD IN LAW. 2. THE LD.CIT(A) HAS ERRED BOTH IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITIONS MADE IN ASSESSMENT FRAMED U/S 153A, WHICH IS NOT BASED UPON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF T HE SEARCH AND THAT THE LD.AO ERRED IN MAKING THE ASSES SMENT IN VIEW OF THE FACT THAT THE ASSESSMENT WAS NOT PEN DING AS ON THE DATE OF THE SEARCH, WHICH IS INCORRECT, UNJU STIFIED AND BAD IN LAW. 3. THE LD.CIT(A) HAS ERRED IN LAW & FACTS OF THE CA SE IN CONFIRMING THE ADDITIONS OF RS.3,37,500/- ON ACCOUN T OF ALLEGED COMMISSION PAID FOR OBTAINING ACCOMMODATION ENTRIES WHICH IS HIGHLY ARBITRARY, UNJUSTIFIED, BAD IN LAW, UNCALLED FOR AND MERELY ON PRESUMPTION OF THE LD.A. O. 4. THE LD.CIT(A) HAS ERRED IN FACTS AND LAW OF THE CASE IN HOLDING THE VALIDITY OF ASSESSMENT U/S 153A WHICH I S BAD IN LAW, UNJUSTIFIED, UNCALLED FOR AND NEEDS TO BE QUAS HED. 5. THE ASSESSEE CRAVES THE RIGHT TO ADD, AMEND OR MODIFY ANY GROUND OF APPEAL. 31. LEARNED COUNSEL FOR THE ASSESSEE FAIRLY CONCEDE D THAT ON THE DATE ON WHICH THE ASSESSING OFFICER ISSUED NOTICE U /S 153A, THE ORIGINAL ASSESSMENT WAS PENDING INASMUCH AS THE TIME LIMIT F OR ISSUE OF NOTICE U/S 143(2) DID NOT EXPIRE. THEREFORE, ON ISSUE OF NOTICE U/S 153A, ORIGINAL PENDING ASSESSMENT ABATED AND THE ASSESSIN G OFFICER HAD ITA NO.1698/DEL/2014 & 12 OTHERS 25 AUTHORITY TO CONSIDER ALL THE ISSUES, WHETHER IN RE SPECT OF THOSE ISSUES, ANY INCRIMINATING MATERIAL IS FOUND OR NOT. IN VIE W OF THE ABOVE, HE WITHDREW GROUND NO.2 OF THE ASSESSEES APPEAL AND S UBMITTED THAT THE ADDITION FOR UNEXPLAINED SHARE CAPITAL MAY BE CONSI DERED ON MERITS. IN VIEW OF THE ABOVE, GROUND NO.2 OF THE ASSESSEES AP PEAL IS REJECTED BEING NOT PRESSED. 32. IN SO FAR AS GROUND NO.1, I.E., THE ADDITION FO R UNEXPLAINED SHARE CAPITAL IS CONCERNED, IT IS SUBMITTED BY THE LEARNE D COUNSEL THAT THE ASSESSEE HAS DULY DISCHARGED THE ONUS OF PROVING TH E SHARE APPLICATION MONEY BY PRODUCING THE CONFIRMATION OF THE CREDITOR S, CERTIFICATE OF INCORPORATION OF THE APPLICANT COMPANY, INCOME TAX RETURN OF THE APPLICANT COMPANY AND SHARE APPLICATION FORM BEFORE THE ASSESSING OFFICER. FURTHER, BEFORE THE LEARNED CIT(A), THE A SSESSEE FURNISHED THE BANK STATEMENT OF THE SHARE APPLICANTS. HE, THEREF ORE, SUBMITTED THAT IN VIEW OF THESE EVIDENCES FURNISHED BY THE ASSESSE E, THE ASSESSEE HAS DULY DISCHARGED THE ONUS OF PROVING THE CASH CREDIT WHICH LAY UPON THE ASSESSEE. IN SUPPORT OF THIS CONTENTION, HE RELIED UPON THE FOLLOWING DECISIONS:- (I) PR.CIT VS. RAKAM MONEY MATTERS PVT.LTD. ITA N O.778/2015, JUDGMENT DATED 13 TH OCTOBER, 2015 OF HON'BLE DELHI HIGH COURT. (II) CIT VS. VICTOR ELECTRODES LTD. [2010] 329 IT R 271 (DEL). (III) DCIT VS. G.S. CONTROLS (P) LTD. ITA NO.1560 /DEL/2010, ORDER DATED 13 TH MARCH, 2015 OF ITAT, DELHI BENCH C, NEW DELHI. (IV) CIT VS. FAIR FINVEST LTD. [2013] 357 ITR 146 (DELHI). (V) CIT VS. GANGESHWARI METAL (P) LTD. [2014] 361 ITR 10 (DELHI). ITA NO.1698/DEL/2014 & 12 OTHERS 26 (VI) CIT VS. VRINDAVAN FARMS (P) LTD. ITA NO.71/2 015 AND OTHERS, JUDGMENT DATED 12 TH AUGUST, 2015 OF HON'BLE DELHI HIGH COURT. (VII) ITO VS. NISHIT FINCAP (P) LTD. 2016 (4) TMI 213, ORDER DATED 31 ST MARCH, 2016 IN ITA NO.2515/DEL/2010 (ITAT DELHI). (VIII) ITO VS. SOFTLINE CREATIONS (P) LTD. ITA NO .744/DEL/2012, ORDER DATED 10 TH FEBRUARY, 2016 OF ITAT, DELHI BENCH G, NEW DELHI . (IX) SUNCITY PROJECTS PVT.LTD. VS. DCIT & OTHERS ITA NO.14/DEL/2012 AND OTHERS, ORDER DATED 21 ST MARCH, 2016 OF ITAT, DELHI BENCH G, NEW DELHI. (X) CIT, ORISSA VS. ORISSA CORPORATION P.LTD. [19 86] 159 ITR 78 (SC). 33. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER MADE THE ADDITION MAINLY ON THE BASIS OF THE STATEMENT OF SH RI TARUN GOYAL WHEREIN HE HAS ALLEGEDLY STATED TO HAVE PROVIDED TH E ACCOMMODATION ENTRIES TO THE ASSESSEE. HE STATED THAT THE STATEM ENT OF SHRI TARUN GOYAL WAS RECORDED BEHIND THE BACK OF THE ASSESSEE AND THE ASSESSEE WAS NEVER ALLOWED ANY OPPORTUNITY TO CROSS EXAMINE SHRI TARUN GOYAL. IN THE ABSENCE OF HIS CROSS-EXAMINATION HAVING BEEN ALLOWED TO THE ASSESSEE, HIS STATEMENT CANNOT BE UTILIZED AGAINST THE ASSESSEE. HE FURTHER POINTED OUT THAT EVEN DURING REMAND PROCEED INGS, LEARNED CIT(A) ASKED THE ASSESSING OFFICER TO ALLOW CROSS-E XAMINATION OF SHRI TARUN GOYAL TO THE ASSESSEE. HOWEVER, DESPITE THE SPECIFIC DIRECTION OF LEARNED CIT(A), THE ASSESSEE WAS NOT ALLOWED THE CR OSS-EXAMINATION OF SHRI TARUN GOYAL AND, THEREFORE, HIS STATEMENT CANN OT BE UTILIZED AGAINST THE ASSESSEE. HE FURTHER SUBMITTED THAT AS PER THE ASSESSING OFFICER, THE ASSESSEE HAS TAKEN THE ACCOMMODATION E NTRY FROM TARUN ITA NO.1698/DEL/2014 & 12 OTHERS 27 GOYAL GROUP BY PAYING CASH TO HIM AND THEN OBTAININ G THE CHEQUE IN THE FORM OF SHARE CAPITAL AGAINST SUCH CASH PAYMENT . HE STATED THAT FROM THE BANK ACCOUNT OF THE SHARE APPLICANT, IT WO ULD BE EVIDENT THAT IN THE BANK ACCOUNT OF NONE OF THE SHARE APPLICANTS , CASH HAS BEEN DEPOSITED, THEREFORE, THE ALLEGATION OF THE ASSESSI NG OFFICER, THAT THE ASSESSEE PROVIDED CASH TO SHRI TARUN GOYAL WHO DEPO SITED THE SAME IN HIS GROUP COMPANY AND ISSUED CHEQUES TO THE ASSESSE E IS FACTUALLY INCORRECT. HE FURTHER SUBMITTED THAT THE MATTER OF TARUN GOYAL GROUP OF COMPANIES CAME BEFORE THE TRIBUNAL BECAUSE IN TH OSE COMPANIES ALSO, THE ADDITIONS FOR UNEXPLAINED CASH CREDIT WER E MADE. ON BEHALF OF SHRI TARUN GOYAL, IT WAS CONTENDED THAT SINCE SH RI TARUN GOYAL IS PROVIDING ACCOMMODATION ENTRIES, THE CASH DEPOSITED IN HIS GROUP COMPANIES IS THE CASH RECEIVED FROM THE BENEFICIARY WHO INTENDED TO AVAIL THE BENEFIT OF ACCOMMODATION ENTRY. THEREFOR E, NO ADDITION FOR UNEXPLAINED CASH CREDIT SHOULD BE MADE IN THE GROUP COMPANIES. HOWEVER, THE ITAT, VIDE ORDER DATED 18 TH OCTOBER, 2013 IN ITA NO.4527 TO 4531/DEL/2012 AND OTHERS REJECTED THE CONTENTION OF SHRI TARUN GOYAL AND SET ASIDE THE MATTER TO THE FILE OF THE A SSESSING OFFICER FOR CONSIDERING THE PEAK CREDIT IN HIS GROUP COMPANIES ON MERIT. 34. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF LEARNED CIT(A) AND STATED THAT THE SEARCH AT THE PREMISES O F SHRI TARUN GOYAL AND THE ASSESSEE TOOK PLACE SIMULTANEOUSLY. SHRI T ARUN GOYAL ADMITTED TO HAVE PROVIDED ACCOMMODATION ENTRIES TO VARIOUS PARTIES INCLUDING BEST GROUP OF COMPANIES. THAT SHRI TARUN GOYAL WAS BROUGHT TO THE ASSESSEES PREMISES FOR PROVIDING CROSS-EXAM INATION TO THE ASSESSEE BUT IT COULD NOT BE PROVIDED BECAUSE THE A SSESSEE REFUSED TO CROSS-EXAMINE HIM. THAT DURING REMAND PROCEEDINGS, THE ASSESSING OFFICER ISSUED NOTICE TWICE TO SHRI TARUN GOYAL BUT HE DID NOT APPEAR. THEREAFTER, THE ASSESSEE WAS ALSO REQUESTED TO PROD UCE SHRI TARUN GOYAL BUT THE ASSESSEE ALSO DID NOT PRODUCE. THERE FORE, DESPITE ALL ITA NO.1698/DEL/2014 & 12 OTHERS 28 SINCERE EFFORTS, THE ASSESSING OFFICER COULD NOT PR OVIDE CROSS- EXAMINATION OF SHRI TARUN GOYAL TO THE ASSESSEE DUR ING REMAND PROCEEDINGS. BUT WHEN THE ASSESSEE WAS OFFERED THE CROSS- EXAMINATION OF SHRI TARUN GOYAL, THE ASSESSEE REFUS ED TO CROSS- EXAMINE HIM. THEREFORE, NOW, ASSESSEE CANNOT CLAIM THAT THE STATEMENT OF SHRI TARUN GOYAL CANNOT BE UTILIZED AG AINST HIM. HE FURTHER SUBMITTED THAT EVEN THE ASSESSEE IN HIS STA TEMENT WHILE MAKING THE SURRENDER OF `8 CRORES REFERRED TO UNEXP LAINED SHARE CAPITAL. THAT THE ASSESSEE CLAIMED TO HAVE FURNISH ED THE AFFIDAVIT OF THE SHARE APPLICANT WHICH IS NOT NOTARIZED AND THE STAMP PAPER ON WHICH THE AFFIDAVIT WAS DRAFTED WAS PURCHASED EVEN PRIOR TO THE DATE OF APPLICATION FOR ALLOTMENT OF SHARE CAPITAL. THIS U LTIMATELY SHOWS THAT THE EVIDENCES FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER ARE THE MAKE-BELIEVE EVIDENCES AND CANNOT BE RELIED UPON. HE FURTHER SUBMITTED THAT THE SHARE APPLICATION RAISED BY THE ASSESSEE WAS NOT BY PUBLIC OFFER BUT IT IS BY PRIVATE PLACEMENT. THERE FORE, THE BURDEN IS MORE UPON THE ASSESSEE TO ESTABLISH THE IDENTITY OF THE SHAREHOLDER, CREDITWORTHINESS OF THE SHAREHOLDER AND GENUINENESS OF THE TRANSACTION. HE STATED THAT THE ASSESSEE DESPITE R EPEATED OPPORTUNITIES HAVING BEEN ALLOWED BY THE ASSESSING OFFICER HAS NOT PRODUCED THE DIRECTOR OF ANY OF THE SHARE APPLICANT COMPANY. IN VIEW OF THE ABOVE, LEARNED CIT(A) WAS FULLY JUSTIFIED IN SUSTAINING THE ADDITION FOR UNEXPLAINED CASH CREDIT IN THE FORM OF SHARE CAPITAL. THE SAME SHOULD BE SUSTAINED. 35. IN THE REJOINDER, IT IS FAIRLY ADMITTED BY THE LEARNED COUNSEL THAT THE SO-CALLED AFFIDAVIT OF THE SHARE APPLICANT FURN ISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER IS NOT NOTARIZED AND, THEREFORE, TECHNICALLY, IT CANNOT BE CALLED AN AFFIDAVIT. NEV ERTHELESS, IT REMAINS A SELF-DECLARATION BY THE SHARE APPLICANT WHEREIN HE HAS CONFIRMED HAVING INVESTED IN THE ASSESSEE COMPANY AND HAS ALS O DISCLOSED HIS ITA NO.1698/DEL/2014 & 12 OTHERS 29 INCOME TAX NUMBER. HE FURTHER SUBMITTED THAT EVEN IF THE SAID AFFIDAVITS ARE IGNORED, STILL THE ASSESSEE HAS FURN ISHED THE CONFIRMATION OF THE SHARE APPLICANT, THEIR INCOME TAX RETURN, SH ARE APPLICATION FORM, CERTIFICATE OF INCORPORATION ETC. WHICH IS SUFFICIE NT TO DISCHARGE THE ONUS LAY UPON THE ASSESSEE TO EXPLAIN THE CASH CREDITS I N ITS ACCOUNTS. HE, THEREFORE, SUBMITTED THAT LEARNED CIT(A) SHOULD BE DELETED. 36. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF B OTH THE SIDES AND HAVE PERUSED THE MATERIAL PLACED BEFORE US. FR OM A READING OF THE ASSESSMENT ORDER AS WELL AS ARGUMENTS OF LEARNED CI T-DR, IT IS EVIDENT THAT THE MAIN REASON FOR TREATING THE SHARE CAPITAL AS BOGUS AND UNEXPLAINED IS THE STATEMENT OF SHRI TARUN GOYAL WH EREIN HE HAS ADMITTED TO HAVE PROVIDED ACCOMMODATION ENTRIES TO THE ASSESSEE GROUP. ADMITTEDLY, THE STATEMENT OF SHRI TARUN GOY AL WAS RECORDED BEHIND THE BACK OF THE ASSESSEE AND THE ASSESSEE HA S NOT BEEN ALLOWED ANY OPPORTUNITY TO CROSS-EXAMINE HIM. HON BLE APEX COURT HAS CONSIDERED THE VALIDITY OF STATEMENT IN THE CAS E OF M/S ANDAMAN TIMBER INDUSTRIES (SUPRA) AND HELD THAT NOT ALLOWIN G THE ASSESSEE TO CROSS-EXAMINE THE WITNESSES BY THE ADJUDICATING AUT HORITY IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT I S VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. SIMILAR VIEW IS EXP RESSED BY HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SMC SHARE BROKERS LTD. (SUPRA) WHEREIN HON'BLE JURISDICTIONAL HIGH COURT HAS HELD THERE IS NO DOUBT THAT THE STATEMENT OF MANOJ AGGARWAL HAD EVIDENTIAR Y VALUE BUT WEIGHT COULD NOT BE GIVEN TO IT IN PROCEEDINGS AGAINST THE ASSESSEE WITHOUT IT BEING TESTED UNDER CROSS-EXAMINATION . WE HAVE ALREADY DISCUSSED THIS ISSUE AT LENGTH EARLIER IN THIS ORDER AND HAVE ARRIVED AT THE CONCLUSION THAT THE STATEMENT OF SHRI TARUN GOYAL C ANNOT BE USED AGAINST THE ASSESSEE. ITA NO.1698/DEL/2014 & 12 OTHERS 30 37. FURTHER, HON'BLE JURISDICTIONAL HIGH COURT IN T HE CASE OF HARJEEV AGGARWAL (SUPRA) HAS ALSO CONSIDERED THE EVIDENTIAR Y VALUE OF THE STATEMENT RECORDED AT THE TIME OF SEARCH AND HAS HE LD THAT ANY STATEMENT RECORDED DURING THE COURSE OF SEARCH ON A STANDALONE BASIS WITHOUT REFERENCE TO ANY OTHER MATERIAL DISCOVERED DURING SEARCH AND SEIZURE OPERATION WOULD NOT EMPOWER THE ASSESSING O FFICER TO MAKE A BLOCK ASSESSMENT ON THE BASIS OF SUCH STATEMENT. T HUS, ANY STATEMENT RECORDED DURING THE COURSE OF SEARCH SHOU LD BE CORROBORATED WITH THE MATERIAL DISCOVERED DURING TH E COURSE OF SEARCH. LET US EXAMINE THE FACTS OF THE ASSESSEES CASE AND THE STAND OF THE REVENUE IN THE LIGHT OF THE ABOVE DECISION OF HON'B LE JURISDICTIONAL HIGH COURT. THE STAND OF THE REVENUE IS THAT THE ASSESS EE HAS TAKEN THE ACCOMMODATION ENTRY IN THE FORM OF SHARE CAPITAL FR OM TARUN GOYAL GROUP OF COMPANIES. IN THIS REGARD, THE ASSESSEE H AS PAID CASH AGAINST WHICH SHRI TARUN GOYAL HAS ISSUED CHEQUE IN THE FOR M OF SHARE CAPITAL FROM HIS GROUP COMPANIES. THE REVENUE HAS FURTHER ALLEGED THAT THE ASSESSEE HAS ALSO PAID COMMISSION TO SHRI TARUN GOY AL FOR AVAILING ACCOMMODATION ENTRIES. THE REVENUE HAS NOT POINTED OUT ANY CORROBORATIVE EVIDENCE IN SUPPORT OF THE ABOVE ALLE GATION EXCEPT THE STATEMENT OF SHRI TARUN GOYAL. THE SEARCH AND SEIZ URE HAS TAKEN PLACE AT THE BUSINESS PREMISES OF ALL THE GROUP COMPANIES OF THE ASSESSEE GROUP. VARIOUS LOOSE PAPERS WERE FOUND AND SEIZED. THOSE LOOSE PAPERS INDICATE THE RECEIPT OF UNRECORDED MONEY FRO M THE SALE OF PROPERTIES AS WELL AS THE EXPENDITURE INCURRED BY T HE ASSESSEE IN THE CONSTRUCTION WORK WHICH IS NOT RECORDED IN THE BOOK S OF ACCOUNT. ADMITTEDLY, IN NONE OF THE LOOSE PAPERS, THERE IS M ENTION OF ANY CASH PAYMENT BY THE ASSESSEE TO SHRI TARUN GOYAL FOR OBT AINING ACCOMMODATION ENTRY. SIMILARLY, THERE IS NO MENTIO N OF PAYMENT OF COMMISSION TO SHRI TARUN GOYAL. SEARCH HAS SIMULTA NEOUSLY TAKEN PLACE AT THE PREMISES OF SHRI TARUN GOYAL AND HIS G ROUP COMPANIES AND DURING THE COURSE OF SEARCH AT HIS PREMISES ALSO, N O EVIDENCE IS FOUND ITA NO.1698/DEL/2014 & 12 OTHERS 31 FOR RECEIPT OF CASH FROM THE ASSESSEES GROUP COMPA NIES. HAD IT BEEN SO, THE ASSESSING OFFICER WOULD HAVE CERTAINLY MENT IONED THE SAME IN THE ASSESSMENT ORDER. 38. BEFORE THE LEARNED CIT(A), THE ASSESSEE HAS PRO DUCED THE COPY OF BANK ACCOUNT OF ALL THE SHARE APPLICANT COMPANIES. THE CIT(A) HAS ADMITTED THE SAME AS ADDITIONAL EVIDENCE AND HAS CA LLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER. THERE IS NO CASH DEPOSIT IN THE BANK ACCOUNT OF ANY OF THE SHARE APPLICANT BEFO RE THE ISSUE OF CHEQUE FOR SHARE APPLICATION MONEY TO THE GROUP COM PANIES OF THE ASSESSEE. ON THE OTHER HAND, THE CREDIT IS BY WAY OF TRANSACTION. DURING REMAND PROCEEDINGS, THE ASSESSING OFFICER HA S MADE NECESSARY VERIFICATION FROM THE BANK OF THE SHARE APPLICANT A ND NO ADVERSE FINDING IS RECORDED BY HIM IN THE REMAND REPORT. T HEREFORE, THE FACTS ON RECORD ARE CONTRARY TO THE ALLEGATION OF THE REV ENUE THAT THE ASSESSEE GAVE CASH TO SHRI TARUN GOYAL AND HE, AFTE R DEPOSITING THE SAME IN THE BANK ACCOUNT OF VARIOUS COMPANIES, ISSU ED CHEQUES FOR SHARE APPLICATION MONEY. ON THESE FACTS, THE DECIS ION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF HARJEEV AG GARWAL (SUPRA) WOULD BE SQUARELY APPLICABLE. THEREFORE, WE HOLD THAT TH E STATEMENT OF SHRI TARUN GOYAL CANNOT BE USED AGAINST THE ASSESSEE BEC AUSE :- (I) HIS STATEMENT WAS RECORDED BEHIND THE BACK OF T HE ASSESSEE AND THE ASSESSEE WAS NOT ALLOWED ANY OPPORTUNITY TO CRO SS-EXAMINE HIM. (II) THERE IS NO CORROBORATIVE EVIDENCE IN SUPPORT OF THE STATEMENT OF SHRI TARUN GOYAL. ON THE OTHER HAND, THE MATERIAL FOUND DURING THE COURSE OF SEARCH AND OTHER EVIDENCES PLACED ON RECO RD BY THE ASSESSEE ARE CONTRARY TO THE ALLEGATION MADE BY SHRI TARUN G OYAL IN HIS STATEMENT. ITA NO.1698/DEL/2014 & 12 OTHERS 32 39. NOW, THE NEXT QUESTION IS WHETHER THE ASSESSEE HAS BEEN ABLE TO DISCHARGE THE ONUS WHICH LAY UPON IT TO PROVE THE C REDIT IN ITS BOOKS OF ACCOUNT IN THE FORM OF SHARE CAPITAL. IT HAS BEEN CONTENDED BY THE LEARNED COUNSEL THAT THE ASSESSEE HAS DULY DISCHARG ED SUCH ONUS AND IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON VA RIOUS DECISIONS OF HONBLE APEX COURT, HON'BLE JURISDICTIONAL HIGH COU RT AS WELL AS ITAT DELHI BENCHES. BEFORE GOING INTO THE FACTS OF THE ASSESSEES CASE, IT WOULD BE APPROPRIATE TO REFER TO THOSE DECISIONS RE LIED UPON BY THE LEARNED COUNSEL. 40. LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED UPO N THE DECISION OF HONBLE APEX COURT IN THE CASE OF ORISSA CORPORATIO N P. LTD. (SUPRA). IN THE SAID CASE, THE ASSESSEE FURNISHED BEFORE THE AS SESSING OFFICER LETTERS OF CONFIRMATION AND GAVE THE PARTICULARS OF INCOME TAX NUMBER OF THE CREDITORS. THE ASSESSING OFFICER ISSUED SUM MONS U/S 131 TO THE CREDITOR WHICH WERE RETURNED UNSERVED WITH THE REMA RK LEFT. THEREFORE, THE ASSESSING OFFICER MADE THE ADDITION OF `1,50,000/- AS UNEXPLAINED CASH CREDIT. THE TRIBUNAL DELETED THE ADDITION HOLDING THAT MERELY BECAUSE THE ASSESSEE COULD NOT PRODUCE THE PARTIES, IT DID NOT FOLLOW AUTOMATICALLY THAT AN ADVERSE INFERENCE SHOULD BE DRAWN AGAINST THE ASSESSEE. WHEN THE REVENUE TOOK UP THE MATTER TO HON'BLE SUPREME COURT, HONBLE APEX COURT HELD :- THAT IN THIS CASE THE RESPONDENT HAD GIVEN THE NAM ES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WERE INCOME- TAX ASSESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES U NDER SECTION 131 AT THE INSTANCE OF THE RESPONDENT, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXA MINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY. THERE WAS NO E FFORT MADE TO PURSUE THE SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE RESPONDENT COULD NOT DO ANYTHING FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE ITA NO.1698/DEL/2014 & 12 OTHERS 33 CONCLUSION THAT THE RESPONDENT HAD DISCHARGED THE B URDEN THAT LAY ON IT, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION WAS BASED ON SOME EVID ENCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUEST ION OF LAW AS SUCH AROSE. THE HIGH COURT WAS RIGHT IN REF USING TO STATE A CASE. 41. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F RAKAM MONEY MATTERS PVT.LTD. (SUPRA) HELD AS UNDER:- 13. IT IS NOT IN DISPUTE THAT EXTENSIVE MATERIAL W AS PRODUCED BY THE ASSESSEE IN THE PRESENT CASE TO PRO VE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE COMPANIES WHO HAD SUBSCRIBED TO ITS SHARES. AMONG THE MATERIALS PRODUCED WERE THE INCOME TAX RETURNS AND THE PAN CARD DETAILS OF THE EIGHT COMPANIES. EVEN IF T HE DIRECTORS OF THESE COMPANIES DID NOT RESPOND TO THE SUMMONS ISSUED BY THE AO, IT WAS NOT IMPOSSIBLE FOR THE AO TO MAKE PROPER ENQUIRIES TO ASCERTAIN THE GENUIN ENESS OF THESE ENTITIES AND SATISFY HIMSELF OF THEIR CREDITWORTHINESS. AS POINTED OUT BY THE CIT(A), TH E AO FAILED TO MAKE ANY EFFORT IN THAT DIRECTION. HE DI D NOT TAKE TO THE LOGICAL END THE HALF-HEARTED ATTEMPT AT GETT ING THE DIRECTORS TO APPEAR BEFORE HIM. HE DID NOT EVEN SE EK THE ASSISTANCE OF THE AOS OF THE CONCERNED COMPANIES WH OSE ITRS AND PAN CARD COPIES HAD BEEN PRODUCED. 42. IN THE CASE OF CIT VS. VICTOR ELECTRODES LTD. [2010] 329 ITR 271 (DEL), HON'BLE JURISDICTIONAL HIGH COURT HAS HELD : - 9. THERE WAS NO LEGAL OBLIGATION ON THE ASSESSEE T O PRODUCE SOME DIRECTOR OR OTHER REPRESENTATIVE OF TH E APPLICANT COMPANIES BEFORE THE ASSESSING OFFICER. THEREFORE, FAILURE OF ASSESSEE TO PRODUCE THEM COUL D NOT, BY ITSELF, HAVE JUSTIFIED THE ADDITIONS MADE BY THE ASSESSING OFFICER, WHEN THE ASSESSEE HAD FURNISHED DOCUMENTS, ON THE BASIS OF WHICH, THE ASSESSING OFF ICER, IF HE SO WANTED, COULD HAVE SUMMONED THEM FOR VERIFICA TION. NO ATTEMPT WAS MADE BY THE ASSESSING OFFICER TO SUM MON THE DIRECTORS OF THE APPLICANT COMPANIES. THE ADDR ESSES OF THESE COMPANIES MUST BE AVAILABLE ON THE SHARE APPLICATIONS, MEMORANDUM AND ARTICLES OF ASSOCIATIO N AND ITA NO.1698/DEL/2014 & 12 OTHERS 34 THEIR INCOME TAX RETURNS. IF THE ASSESSING OFFICER HAD ANY DOUBT ABOUT IDENTITY OF THE SHARE APPLICANTS, HE CO ULD HAVE SUMMONED THE DIRECTORS OF THE APPLICANT COMPANIES. NO SUCH ATTEMPT WAS, HOWEVER, MADE BY HIM. THEREFORE, THE COMMISSION OF INCOME TAX (APPEALS) AND THE INCOME T AX APPELLATE TRIBUNAL, IN OUR VIEW WERE JUSTIFIED IN H OLDING THAT THE IDENTITY OF SHARE APPLICANTS AND THE GENUINENES S OF THE TRANSACTIONS HAD BEEN ESTABLISHED BY THE ASSESSEE. 43. IN THE CASE OF CIT VS. FAIR FINVEST LTD. [201 3] 357 ITR 146 (DELHI), HON'BLE JURISDICTIONAL HIGH COURT HAS HELD :- 6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE THE DISCUSSION BY THE CIT (A PPEALS) WOULD REVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED COPIES ISSUED BY THE REGISTRAR OF COMPANIES IN RELATION TO THE SHARE APPLICATION, AFF IDAVITS OF THE DIRECTORS, FORM 2 FILED WITH THE ROC BY SUCH AP PLICANTS CONFIRMATIONS BY THE APPLICANT FOR COMPANYS SHARES , CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE A SSESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF THE INVES TIGATION REPORT AND THE STATEMENT OF MR. MAHESH GARG. TO EL EVATE THE INFERENCE WHICH CAN BE DRAWN ON THE BASIS OF RE ADING OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPER, MORE SO WHEN THE ASSESSEE PRODUCED MATERI AL. THE LEAST THAT THE ASSESSING OFFICER OUGHT TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NECESSARY, INVOKI NG HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE APPLIC ANTS OR DIRECTORS. NO EFFORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCL OSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSI NG OFFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY RE PORT, WHICH COLLECTED CERTAIN FACTS AND THE STATEMENTS OF MR. MAHESH GARG THAT THE INCOME SOUGHT TO BE ADDED FELL WITHIN THE DESCRIPTION OF SECTION 68. 7. HAVING REGARD TO THE ENTIRETY OF FACTS AND CIRCUMSTANCES, THE COURT IS SATISFIED THAT THE FIND ING OF THE TRIBUNAL IN THIS CASE ACCORDS WITH THE RATIO OF THE DECISION OF THE SUPREME COURT IN LOVELY EXPORTS (P) LTD. (SU PRA). 8. THE DECISION IN THIS CASE IS BASED ON THE PECULI AR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (P) LTD. (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENCE IN SU PPORT ITA NO.1698/DEL/2014 & 12 OTHERS 35 OF THE SHARE APPLICATION MONIES, IT IS OPEN TO THE ASSESSING OFFICER TO EXAMINE IT AND REJECT IT ON TENABLE GROU NDS. IN CASE HE WISHES TO RELY ON THE REPORT OF THE INVESTI GATION AUTHORITIES, SOME MEANINGFUL ENQUIRY OUGHT TO BE CONDUCTED BY HIM TO ESTABLISH A LINK BETWEEN THE AS SESSEE AND THE ALLEGED HAWALA OPERATORS; SUCH A LINK WAS S HOWN TO BE PRESENT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P.) LTD. (SUPRA) RELIED UPON BY THE REVENUE. WE ARE TH EREFORE NOT TO BE UNDERSTOOD TO CONVEY THAT IN ALL CASES OF SHARE CAPITAL ADDED UNDER SECTION 68, THE RATIO OF LOVELY EXPORTS (P) LTD. (SUPRA) IS ATTRACTED, IRRESPECTIVE OF THE FACTS, EVIDENCE AND MATERIAL. 9. NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPE AL IS ACCORDINGLY DISMISSED. 44. IN THE CASE OF CIT VS. GANGESHWARI METAL (P.) L TD. [2014] 361 ITR 10 (DELHI), HON'BLE JURISDICTIONAL HIGH COURT H ELD AS UNDER:- 9. AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPE S OF CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSI NG OFFICER CARRIES OUT THE EXERCISE WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER SITS BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EV IDENCE OR MATERIAL IN HIS POSSESSION AND THEN COMES FORWARD T O MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRE SENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSI NG OFFICER, AFTER NOTING THE FACTS, MERELY REJECTED THE SAME. T HIS WOULD BE APPARENT FROM THE OBSERVATIONS OF THE ASSE SSING OFFICER IN THE ASSESSMENT ORDER TO THE FOLLOWING EF FECT: - 'INVESTIGATION MADE BY THE INVESTIGATION WING OF TH E DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRANSACTION OF ACCOMMODATION ENTRY. THE ASSESS EE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF `1,11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE AS SESSEE COMPANY HAS RECEIVED THE SHARE APPLICATION MONEY FO R ALLOTMENT OF ITS SHARE. IT WAS STATED THAT THE ACTU AL AMOUNT RECEIVED WAS `55,50,000/- AND NOT `1,11,50,000/- AS MENTIONED IN THE NOTICE. THE ASSESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTION OF THE ASSESSEE IN RESPECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT `55,50,000/-. THE ITA NO.1698/DEL/2014 & 12 OTHERS 36 ASSESSEE HAS FURTHER TRIED TO EXPLAIN THE SOURCE OF THIS AMOUNT OF `55,50,000/- BY FURNISHING COPIES OF SHAR E APPLICATION MONEY, BALANCE SHEET, ETC. OF THE PARTI ES MENTIONED ABOVE AND ASSERTED THAT THE QUESTION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARI SE. THIS EXPLANATION OF THE ASSESSEE HAS BEEN DULY CONSIDERE D AND FOUND NOT ACCEPTABLE. THIS ENTRY REMAINS UNEXPLAINE D IN THE HANDS OF THE ASSESSEE AS HAS BEEN ARRIVED BY TH E INVESTIGATION WING OF THE DEPARTMENT. AS SUCH ENTRI ES OF `55,50,000/- RECEIVED BY THE ASSESSEE ARE TREATED A S AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSE E AND ADDED TO ITS INCOME. SINCE I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITI ATED SEPARATELY.' THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVOUR OF THE REVENUE IN THAT CASE . HOWEVER, THE FACTS OF THE PRESENT CASE ARE CLEARLY DISTINGUISHABLE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA). THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF TH E ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISHED A LL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. I N SUCH AN EVENTUALITY NO ADDITION CAN BE MADE UNDER SECTIO N 68 OF THE ACT. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBUNAL IS CORRECT I N LAW. 45. NOW, WE COME BACK TO THE FACTS OF THE ASSESSEE S CASE IN RESPECT OF THE SHARE APPLICATION MONEY RECEIVED. THE ASSES SEE HAS FURNISHED THE AFFIDAVIT OF THE DIRECTOR OF SHARE APPLICANT CO MPANY, SHARE APPLICATION FORM, CONFIRMATION FROM SHARE APPLICANT , CERTIFICATE OF INCORPORATION OF THE SHAREHOLDER COMPANY AND COPY O F INCOME TAX RETURN OF SHARE APPLICANT COMPANY. THE ASSESSING O FFICER HAS DISPUTED THE VALIDITY OF THE AFFIDAVIT ON THE GROUND THAT AF FIDAVIT IS NOT CERTIFIED BY THE NOTARY AND THE STAMP PAPER FOR PURCHASE OF A FFIDAVIT IS DATED PRIOR TO THE APPLICATION MADE FOR SHARE APPLICATION MONEY. ON VERIFICATION OF THE COPY OF THE AFFIDAVIT WHICH IS PLACED AT PAGES 48 & 49 OF THE ASSESSEES PAPER BOOK, WE FIND THAT THE A FFIDAVIT IS NOT MADE IN THE PRESENCE OF NOTARY PUBLIC AND, THEREFORE, IT CANNOT BE CONSIDERED ITA NO.1698/DEL/2014 & 12 OTHERS 37 AS AFFIDAVIT IN LEGAL SENSE. NEVERTHELESS, IT REMA INS A SELF-DECLARATION BY THE DIRECTOR OF SHARE APPLICANT COMPANY IN WHICH HE HAS CONFIRMED THAT THE COMPANY HAS APPLIED TO M/S BEST CITY DEVEL OPERS (INDIA) PRIVATE LIMITED FOR 15 LAKHS EQUITY SHARES FOR WHIC H PAYMENT OF `1,50,00,000/- HAS BEEN MADE BY CHEQUE. THE DETAIL OF CHEQUE NUMBER AND THE NAME OF THE BANK HAVE ALSO BEEN PROV IDED. IN PARAGRAPH 3, THE PERMANENT ACCOUNT NUMBER OF THE SH ARE APPLICANT COMPANY HAS ALSO BEEN PROVIDED. IN PARAGRAPH 2, IT IS MENTIONED THAT THE SHARE APPLICANT COMPANY IS REGISTERED WITH REGI STRAR OF COMPANIES AND REGISTRATION NUMBER ALONG WITH DATE OF REGISTRA TION IS ALSO GIVEN. THE ASSESSEE HAS FURNISHED SHARE APPLICATION FORM F OR WHICH ALSO THE ADDRESS OF THE SHARE APPLICANT COMPANY, NUMBER OF S HARES APPLIED FOR, AMOUNT PAID BY CHEQUE, DETAILS OF CHEQUE NUMBER AS WELL AS PERMANENT ACCOUNT NUMBER OF THE COMPANY HAS BEEN GI VEN. THE CONFIRMATION HAS BEEN FILED BY THE SHARE APPLICANT COMPANY GIVING ALL NECESSARY PARTICULARS AND, FOR READY REFERENCE, WE REPRODUCE THE SAME HEREIN BELOW :- ARIES CRAFTS PRIVATE LIMITED 13/34, W.E.A., IVTH FLOOR, MAIN ARYA SAMAJ ROAD, KA ROL BAGH, NEW DELHI 110005 TO WHOM IT MAY CONCERN NAME OF THE COMPANY : BEST CITY DEVELOPERS (INDIA) PVT.LTD. NUMBER OF SHARES : 15000000 EQUITY SHARES OF RS.1 EACH AT A PREMIUM OF RS.9 PER SHARE. AMOUNT INVESTED : RS.150,00,000/- RUPEE ONE CRORE FIFTY LAC ONLY. DETAILS OF PAYMENT AS UNDER : CHQ. NO. DATE AMOUNT (RS.) BANK BRANCH 474604 15.03.2008 100,00,000 HDFC BANK LIMITED. N EW DELHI ITA NO.1698/DEL/2014 & 12 OTHERS 38 474615 25.03.2008 50,00,000 HDFC BANK LIMITED. N EW DELHI TOTAL 150,00,000 BANK ACCOUNT NO. : 003142340000152 BANK PARTICULARS : HDFC BANK LIMITED ANSARI ROAD, DARYA GANJ, NEW DELHI 110 002 SOURCE OF FUNDS : OUT OF SALE OF SHARES OCCUPATION : BUSINESS INCOME TAX PAN NUMBER : AADCA 5439 P WARD 1(3), NEW DELHI. SHARE CERTIFICATES RECEIVED : YES WE DO HEREBY CONFIRM THAT THE INFORMATION FURNISHED ABOVE IS CORRECT. FOR ARIES CRAFTS PRIVATE LIMITED SD/- AUTHORISED SIGNATORY 46. FROM THE ABOVE, IT IS EVIDENT THAT THE SHARE AP PLICANT COMPANY HAS GIVEN THE CONFIRMATION ON ITS LETTER HEAD WHICH GIVES THE COMPLETE ADDRESS OF THE SAID COMPANY. IN THE CONFIRMATION, NUMBER OF SHARES APPLIED AND THE AMOUNT INVESTED HAS BEEN GIVEN. DE TAILS OF PAYMENTS I.E., CHEQUE NUMBER, DATE OF CHEQUE AND NAME OF THE BANK ON WHOM CHEQUE IS DRAWN IS GIVEN. ADDRESS OF THE BANK AND BANK ACCOUNT NUMBER HAS ALSO BEEN GIVEN, SOURCE OF FUND IS GIVEN AS WELL AS PERMANENT ACCOUNT NUMBER OF THE COMPANY IS ALSO GIV EN. 47. HONBLE APEX COURT IN THE CASE OF ORISSA CORPOR ATION P. LTD. (SUPRA) HAS CONSIDERED THE SITUATION WHEREIN THE AS SESSEE HAS FURNISHED ONLY THE CONFIRMATION OF THE CREDITOR WHI CH GAVE THE PARTICULARS OF INCOME TAX NUMBER OF THE CREDITOR. T HE ASSESSING OFFICER ISSUED SUMMONS U/S 131 TO THE CREDITORS WHICH WERE RETURNED UNSERVED WITH THE REMARK LEFT. THEREAFTER, THE A SSESSING OFFICER DID NOT MAKE ANY FURTHER VERIFICATION FROM THE INCOME T AX FILES OF THOSE CREDITORS AND CONFIRMED THE ADDITION. THE TRIBUNAL DELETED THE ADDITION HOLDING THAT MERELY BECAUSE THE ASSESSEE C OULD NOT PRODUCE THE CREDITORS, AN ADVERSE INFERENCE CANNOT BE DRAWN AGAINST THE ASSESSEE. WHEN THE MATTER REACHED TO HONBLE APEX COURT, THEIR LORDSHIPS HELD THAT ON THESE FACTS, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE RESPONDENT HAD DISCHARGED THE B URDEN WHICH LAY ITA NO.1698/DEL/2014 & 12 OTHERS 39 UPON IT, THEN IT COULD NOT BE SAID THAT SUCH A CONC LUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. 48. IN THE CASE OF RAKAM MONEY MATTERS PVT. LTD. (S UPRA), THE FACTS BEFORE HON'BLE JURISDICTIONAL HIGH COURT WERE THAT THE ASSESSEE FURNISHED INCOME TAX RETURN AND PERMANENT ACCOUNT N UMBER DETAILS OF THE COMPANIES. THE DIRECTORS OF THOSE COMPANIES DI D NOT RESPOND TO SUMMONS ISSUED BY THE ASSESSING OFFICER. HON'BLE J URISDICTIONAL HIGH COURT UPHELD THE DELETION OF ADDITION ON THE GROUND THAT THE ASSESSING OFFICER DID NOT TAKE TO THE LOGICAL END THE EVIDENC ES FURNISHED BY THE ASSESSEE. HE EVEN DID NOT SEEK THE ASSISTANCE OF T HE ASSESSING OFFICER OF THE CONCERNED COMPANIES WHOSE INCOME TAX RETURNS AND PERMANENT ACCOUNT NUMBER COPIES HAD BEEN PRODUCED. SIMILAR V IEW IS TAKEN BY HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF VI CTOR ELECTRODES LTD. (SUPRA) AND FAIR FINVEST LTD. (SUPRA). IN THE CASE UNDER CONSIDERATION BEFORE US, THE ASSESSEE HAS DULY FURNISHED THE DECL ARATION OF THE DIRECTOR OF THE SHARE APPLICANT COMPANY, SHARE APPL ICATION FORM, CONFIRMATION AND CERTIFICATE OF INCORPORATION FROM REGISTRAR OF COMPANIES AS WELL AS INCOME TAX RETURN OF THE SHARE APPLICANT COMPANY. THE ASSESSING OFFICER DID NOT MAKE ANY VE RIFICATION FROM THOSE DOCUMENTS. IN THIS CASE, HE EVEN DID NOT ISS UE ANY SUMMONS TO THE DIRECTOR OF THE SHARE APPLICANT COMPANY NEITHER MADE ANY CROSS VERIFICATION FROM THE INCOME TAX RECORD OF THE SHAR E APPLICANT COMPANY WHOSE PERMANENT ACCOUNT NUMBER WAS FURNISHED BEFORE HIM. THE ASSESSING OFFICER SIMPLY REJECTED THE EVIDENCES FUR NISHED BY THE ASSESSEE. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF GANGESHWARI METAL PVT. LTD. (SUPRA) HAS DISAPPROVED THE ACTION OF THE ASSESSING OFFICER WHEREIN THE ASSESSING OFFICER SITS BACK WIT H FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE FACTS IN THE ASSESSEES CASE ARE IDENTICAL TO THE FACTS BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ITA NO.1698/DEL/2014 & 12 OTHERS 40 GANGESHWARI METAL PVT. LTD. (SUPRA). IN THE CASE U NDER APPEAL BEFORE US ALSO, THE ASSESSING OFFICER SIMPLY SITS BACK TIL L THE ASSESSEE SUBMITTED ALL THE EVIDENCES AND THEREAFTER REJECTED THOSE EVIDENCES ON THE BASIS OF PRESUMPTION AND SUSPICION. HE DID NOT MAKE ANY ENQUIRY, HE DID NOT ISSUE ANY SUMMONS TO THE SHARE APPLICANT COMPANY, HE DID NOT TRY TO VERIFY FROM THE RECORD OF THE SHARE APPL ICANT COMPANY WHO ARE ALL ASSESSED TO INCOME TAX. IN VIEW OF THE ABO VE, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE APEX COURT IN THE CASE OF ORISSA CORPORATION P. LTD. (SUPRA) AND OF HON'BLE JURISDIC TIONAL HIGH COURT IN THE CASE OF RAKAM MONEY MATTERS PVT. LTD. (SUPRA), VICTOR ELECTRODES LTD. (SUPRA), FAIR FINVEST LTD. (SUPRA) AND GANGESH WARI METAL PVT. LTD. (SUPRA), WE HOLD THAT THE ASSESSEE HAS DULY DISCHAR GED THE ONUS WHICH LAY UPON IT TO PROVE THE CREDIT IN THE FORM OF SHAR E CAPITAL. ACCORDINGLY, THE ADDITION MADE FOR UNEXPLAINED SHAR E CAPITAL IS DELETED. 49. THE ADDITION RELATING TO UNEXPLAINED EXPENDITUR E ON ALLEGED COMMISSION ON THE SHARE APPLICATION MONEY IS MADE B Y THE ASSESSING OFFICER ON THE PRESUMPTION THAT THE ASSESSEE HAS TA KEN THE ACCOMMODATION ENTRY AND FOR AVAILING SUCH ACCOMMODA TION ENTRY, THE ASSESSEE PAID THE COMMISSION. WE HAVE NOT ACCEPTED THE REVENUES CONTENTION THAT THE ASSESSEE HAS TAKEN THE ACCOMMOD ATION ENTRY IN THE FORM OF SHARE CAPITAL. THEREFORE, THE ALLEGATI ON OF THE REVENUE THAT THE ASSESSEE HAS PAID COMMISSION FOR TAKING TH E ACCOMMODATION ENTRY CANNOT BE ACCEPTED. ACCORDINGLY, THE ADDITIO N MADE FOR UNEXPLAINED EXPENDITURE ON ALLEGED COMMISSION IS DE LETED. ITA NO.1 ITA NO.1 ITA NO.1 ITA NO.1753 753 753 753/DEL/2014 /DEL/2014 /DEL/2014 /DEL/2014 ASSESSEES APPEAL IN THE CASE OF M/S BEST ASSESSEES APPEAL IN THE CASE OF M/S BEST ASSESSEES APPEAL IN THE CASE OF M/S BEST ASSESSEES APPEAL IN THE CASE OF M/S BEST INFRASTRUCTURE INFRASTRUCTURE INFRASTRUCTURE INFRASTRUCTURE (INDIA) PVT.LTD. FOR AY 2009 (INDIA) PVT.LTD. FOR AY 2009 (INDIA) PVT.LTD. FOR AY 2009 (INDIA) PVT.LTD. FOR AY 2009- -- -10 1010 10 : :: :- -- - AT THE TIME OF HEARING BEFORE US, THE LEARNED COUN SEL FOR THE ASSESSEE HAS NOT PRESSED THIS APPEAL OF THE ASSESSE E. ACCORDINGLY, THE SAME IS DISMISSED AS NOT PRESSED. ITA NO.1698/DEL/2014 & 12 OTHERS 41 50. IN THE RESULT, :- (I) (I)(I) (I) THE APPEALS OF THE ASSESSEE IN ITA NOS.1698/DEL /2014, 1699/DEL/2014, 1700/DEL/2014, 1702/DEL/2014, 1703/D EL/2014, 1704/DEL/2014, 1706/DEL/2014, 1708/DEL/2014 AND 170 9/DEL/2014 ARE ALLOWED; (II) (II)(II) (II) THE APPEALS OF THE ASSESSEE IN ITA NOS.1701/DE L/2014, 1705/DEL/2014 AND 1707/DEL/2014 ARE PARTLY ALLOWED; AND (III) (III) (III) (III) THE APPEAL OF THE ASSESSEE IN ITA NO.1753/DEL /2014 IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 31.05.2016 . SD/- SD/- (SUDHANSHU SRIVASTAVA (SUDHANSHU SRIVASTAVA (SUDHANSHU SRIVASTAVA (SUDHANSHU SRIVASTAVA ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD., M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD., M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD., M/S BEST INFRASTRUCTURE (INDIA) PVT.LTD., M/S BEST CITY PROJECTS (INDIA) PVT.LTD., M/S BEST CITY PROJECTS (INDIA) PVT.LTD., M/S BEST CITY PROJECTS (INDIA) PVT.LTD., M/S BEST CITY PROJECTS (INDIA) PVT.LTD., M/S BEST CITY DEVELOPERS INDIA PVT.LTD., M/S BEST CITY DEVELOPERS INDIA PVT.LTD., M/S BEST CITY DEVELOPERS INDIA PVT.LTD., M/S BEST CITY DEVELOPERS INDIA PVT.LTD., M/S BEST CITY REALTORS (INDIA) PVT.LTD., M/S BEST CITY REALTORS (INDIA) PVT.LTD., M/S BEST CITY REALTORS (INDIA) PVT.LTD., M/S BEST CITY REALTORS (INDIA) PVT.LTD., M/S BE M/S BE M/S BE M/S BEST REALTORS (INDIA) PVT.LTD., ST REALTORS (INDIA) PVT.LTD., ST REALTORS (INDIA) PVT.LTD., ST REALTORS (INDIA) PVT.LTD., PLOT NO.H PLOT NO.H PLOT NO.H PLOT NO.H- -- -8, 1 8, 1 8, 1 8, 1 ST STST ST FLOOR, BEST PLAZA, NETAJI SUBHASH FLOOR, BEST PLAZA, NETAJI SUBHASH FLOOR, BEST PLAZA, NETAJI SUBHASH FLOOR, BEST PLAZA, NETAJI SUBHASH PLACE, PITAMPURA, NEW DELHI PLACE, PITAMPURA, NEW DELHI PLACE, PITAMPURA, NEW DELHI PLACE, PITAMPURA, NEW DELHI 110 034. 110 034. 110 034. 110 034. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TA X, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -4, NEW DELHI. 4, NEW DELHI. 4, NEW DELHI. 4, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR
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