ITO, New Delhi V. M/s. Precision Agencies Pvt. Ltd., New Delhi

ITA 1814/DEL/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3761 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 01-06-2017
• Assessment Year: 2000-2001
• Appeal Filed On: 01-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained cash credit; Bogus Share capital; Peak credit; Tangible material; Corroborative evidences; Accommodation entries; Assessment record; Reassessment proceedings
• Section: 143(3); 133(6); 147; 131; 148; 68

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1814/DEL/2013 (ASSESSMENT YEAR: 2000 - 01 ) ITA NO. 1813/DEL/2013 (ASSESSMENT YEAR: 2001 - 02) ITO, WARD - 14(3), ROOM NO. 218, CR BUILDING, IP ESTATE, NEW DELHI VS. PRECISION AGENCIES PVT. LTD, 3/39, ROOM NAGAR, NEW DELHI PAN:AAACP5858Q (APPELLANT) (RESPONDENT) ITA NO. 2116/DEL/2013 (ASSESSMENT YEAR: 2000 - 01) ITA NO. 2115/DEL/2013 (ASSESSMENT YEAR: 2001 - 02) ITA NO. 07/DEL/2014 (ASSESSMENT YEAR: 2002 - 03) PRECISION AGENCIES PVT. LTD, 3/39, ROOM NAGAR, NEW DELHI PAN:AAACP5858Q VS. ITO, WARD - 14(3), ROOM NO. 218, CR BUILDING, IP ESTATE, NEW DELHI (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ATIQ AHMAD, SR. DR ASSESSEE BY: SHRI SALIL AGGARWAL, ADV SHRI SHAILESH GUPTA, CA DATE OF HEARING 08/11 / 2017 DATE OF PRONOUNCEMENT 05 / 0 2 / 201 8 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THESE ARE THE APPEALS PERTAINING TO THE ASSESSEE AS WELL AS REVENUE AND WHERE COMMON GROUNDS AND COMMON FACTS ARE INVOLVED FOR ALL THESE ASSESSMENT YEARS AND THEREFORE THEY ARE DISPOSED OFF BY THIS COMMON ORDER. 2. THESE ARE THE APPEALS FILED BY THE REVENUE AND THE ASSESSEE AGAINST THE ORDER OF THE LD CIT ( A) XVII, NEW DELHI DATED 31.01.2013 AND 31. 01 .2013 AND 03.10.2013 FOR AY 2001 - 02, 2001 - 02 AND 2002 - 03 RESPECTIVELY . ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 2 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 1814/DEL/2013 FOR THE ASSESSMENT YEAR 2000 - 01: 1. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION AMOUNTING TO RS. 24553000/ - MERELY OBSERVING THAT THE SUBSTANTIVE ADDITION HAVE BEEN MADE IN THE HANDS OF THE RECIPIENT OF PURPORTED ACCOMMODATION ENTRIES. 2. THE LD CIT(A) HAS ERRED IN LAW AND FACTS IN NOT AP PRECIATING THE FACT THERE WAS NOTHING ON RECORD TO ESTABLISH THAT THE SUBSTANTIVE ADDITIONS HAD REMAINED UNCONTESTED AND THE ISSUE HAD REACHED FINALITY IN THE CASES WHEREIN THE SUBSTANTIVE ADDITIONS HAD BEEN MADE. 3. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 254930/ - MADE ON ACCOUNT OF COMMISSION !1% OF ABOVE ADDITION ON THE GROUND THAT ADDITION MADE BY THE ASSESSING OFFICER WAS ON ASSUMPTION BASIS. 4. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 1813/DE L/2013 FOR THE ASSESSMENT YEAR 2001 - 02: 1. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION AT RS. 741059/ - AS AGAINST THE ORIGINAL ADDITION MADE BY THE ASSESSING OFFICER AT RS. 20325753/ - MERELY OBSERVING THAT THE ASSESSEE COMPANY HAD NOTHING TO DO WITH THE SAID ACCOUNT AND IT WAS MISUSED BY ONE OF ITS DIRECTORS NAMELY SH. PRADEEP JINDAL. 2. THE LD CIT(A) HAS ERRED IN LAW AND FACTS IN NOT APPRECIATING THE FACT THERE WAS NOTHING ON RECORD TO ABSOLVE THE ASSESSEE OF ITS RESPONSIBILITY WITH RESPECT TO THE SAID BANK ACCOUNT. 3. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 203257/ - MADE ON ACCOUNT OF COMMISSION !1% OF ABOVE ADDITION ON THE GROUND THAT ADDITION MADE BY THE ASSESSING OFFICER WAS ON ASSUMPTION BASIS. 5. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 2116/DEL/2013 FOR THE ASSESSMENT YEAR 2000 - 01: 1. IN SUSTAINING ADDITION OF RS. 940000/ - U/S 68 OF THE INCOME TAX ACT, 1961. 6. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 2115/DEL/2013 FOR THE ASSESSMENT YEAR 2001 - 02: ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 3 1. IN SUSTAINING ADDITION OF RS. 741059/ - U/S 68 OF THE INCOME TAX ACT, 1961. 7. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 07/DEL/2014 FOR THE ASSESSMENT YEAR 2002 - 03: 1. IN SUSTAINING ADDITION OF RS. 3600000/ - . 8. BRIEFLY STATED THE FACTS SHOW THAT ASSESSEE IS A COMPANY WHO FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2000 - 01 RS. 328330 / - ON 30/11/2000. SUBSEQUENTLY THE NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE ON 29/3/2007 RECORDING FOLLOWING REASONS: - ENQUIRIES WERE MADE BY THE DIRECTORATE OF INVESTIGATION ON THE VARIOUS PERSONS WHO WERE INDULGED IN PROVIDING ACCOMMODATION ENTRIES/BOGUS SHARE APPLICATION MONEY/BOGUS CAPITAL GAIN. IN THE COURSE OF ENQUIRIES BEFORE INVESTIGATION WING THESE PERSONS HAD PROVIDED THE DETAILS OF VARIOUS PERSONS TO WHOM SUCH ACCOMM ODATION/BOGUS ENTRIES WERE PROVIDED. BASED ON THE ENQUIRIES MADE, THE DIRECTORATE OF INVESTIGATION HAS PROVIDED THE DETAILS OF PERSONS WHO WERE BENEFICIARIES/ENTRY OPERATORS OF SUCH ACCOMMODATION/BOGUS ENTRIES IN DELHI IN THE LAST 5 TO 6 YEARS. IT HAS BEEN GATHERED THAT ASSESSEE COMPANY HAD FILED ITS RETURN OF INCOME OF THE ASSESSMENT YEAR 2000 - 01 WITH THE ERSTWHI LE AO THAT IS ITO , COMPANY WARD - 2(1). FROM THE REPORT OF INVESTIGATION WING IT IS GATHERED THAT M/S. PRECISION AGENCIES PRIVATE LIMITED WAS ENGAGE D AN ENTRY OPERATOR AND INTRODUCING UNACCOUNTED CASH/MONEY IN ITS BANK ACCOUNT AND IN TURN ISSUING BOGUS/ACCOMMODATION ENTRIES DURING THE PERIOD 14 . 09 . 1999 TO 31 . 03 . 2000 RELEVANT TO THE ASSESSMENT YEAR 2000 - 01. AS PER THE REPORT OF THE INVESTIGATION WING T HE ASSESSEE COMPANY HAD INTRODUCED UNACCOUNTED CASH/MONEY TO THE TUNE OF RS. 2.55 CRORES ( APPROX) IN ITS BOOKS FOR PROVIDING EQUIVALENT AMOUNT OF ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 4 BOGUS ACCOMMODATION ENTRIES DURING TH E PERIOD 1 /4/ 1999 TO 31/03/200 1 TO THE ASSESSMENT YEAR 2000 - 01. 9. IN RE SPONSE TO THE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT THE DIRECTOR OF THE ASSESSEE COMPANY SUBMITTED V IDE LETTER DATED 24/4/2007 THAT THE RETURN FILED ORIGINALLY ON 30/11/2000 BE TREATED AS RETURN FILED IN COMPLIANCE TO NOTICE UNDER SECTION 148 OF T HE ACT. SUBSEQUENTLY THE COPIES OF THE REASONS RECORDED FOR REOPENING OF ASSESSMENT UNDER SECTION 148 FOR THE ASSESSMENT WAS ALSO PROVIDED V IDE ORDER SHEET ENTRY DATED 8/8/2007. SUBSEQUENTLY THE ASSESSEE WAS ALSO PROVIDED THE COPY OF THE BANK STATEMENT OF BANK ACCOUNT OF THE ASSESSEE COMPANY WITH STATE BANK OF INDIA SHAKTI NAGAR AND COPY OF THE STATEMENT OF SH. PRADEEP JINDAL , WHO WAS AT THAT TIME DIRECTOR OF THE ASSESSEE COMPANY . 10. DURING THE COURSE OF REASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO EXPLAIN THE LARGE AMOUNT OF DEPOSIT IN THE BANK ACCOUNT, WHICH WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY. THE ASSESSEE WAS FURTHER PROVIDED THE COPY OF THE BANK ACCOUNT NO. 43145 WITH STATE BA NK OF INDIA SHAKTI NAGAR/DELHI FOR EXPLANATION. THE LD. ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN ALL DEBIT AND CREDIT ENTRIES APPEARING IN THE ABOVE STATE BANK ACCOUNT. IN RESPONSE TO THIS THE LD. AUTHORIZED REPRESENTATIVE FILED A LETTER DATED 26/11 / 2007 STATING THAT MR PRADEEP JINDAL WHO WAS DIRECTOR OF THE ASSESSEE COMPANY HAD OPERATED THE IMPUGNED ACCOUNT WITH STATE BANK OF INDIA , SHAKTI NAGAR BRANCH , NEW DELHI AND THE DETAILS OF THE BENEFICIARIES AS WELL AS THE DETAILS OF OTHER TRANSACTIONS IN TH E AFORESAID ACCOUNT BE OBTAINED FROM HIM. IT WAS FURTHER STATED THAT THE ASSESSEE COMPANY IS IGNORANT OF ALL THIS TRANSACTION , IT IS NEITHER THE BENEFICIARY NO R INSTRUMENTAL IN ARRANGING THESE ENTRIES OR TRANSACTIONS. THEREFORE , THE LD. ASSESSING OFFICER ISSUED A SHOW CAUSE NOTICE ON 24/11/2007 THAT WHY THE AMO UNT OF RS. 2549 3000 / - SHOULD NOT BE TREATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT 1961 UTILIZED FOR P ROVIDING ACCOMMODATION ENTRIES A S ADMITTED . FURTHER, WHY NOT COMMISSI ON AT THE RATE OF 2% SHOULD NOT BE CHARGED TO TAX ON THE AMOUNT. IN RESPONSE TO ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 5 THIS , ASSESSEE EXPLAINED THAT IT DOES NOT HAVE ANY CONNECTION WHATSOEVER WITH THE ACCOUNT MAINTAINED WITH THE STATE BANK OF INDIA , SHAKTI NAGAR BRANCH AS IT IS MAINTAINED BY MR PRADEEP JINDAL , EX DIRECTOR OF THE COMPANY WITHOUT THE KNOWLEDGE AND APPROVAL OF THE BOARD OF DIRECTORS. THE ASSESSEE ALSO REQUESTED THE LD. ASSESSING OFFICER TO ISSUE SUMMONS UNDER SECTION 131 OF THE INCOME TAX ACT TO MR PRADEEP JINDAL A ND EXAMINE HIM ON THE OATH. IT WAS ALSO STATED THAT BY NOT ALLOWING THE CROSS EXAMINATION OF MR PRADEEP JINDALL THE LD. ASSESSING OFFICER HAS PLACED THE BURDEN AT THE DOOR OF THE INNOCENT ASSESSEE. IT WAS FURTHER STATED THAT THE ABOVE SUM IS NOT THE CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT AS IT IS NOT APPEARING IN THE BOOKS OF ACCOUNTS OF THE COMPANY AND IT WAS SUBMITTED THAT IT SHOULD BE TAXED IN THE HANDS OF MR PRADEEP JINDAL IN HIS PERSONAL CAPACITY , HENCE, ADDITION MADE TO THE INCOME OF THE COMPANY SHALL BE TOTALLY UNJUSTIFIED. IT WAS FURTHER SUBMITTED THAT THE PRESUMPTION OF COMMISSION AT THE RATE OF 2 % IS ALSO ON HIGHER SIDE AS MR. JINDAL IN THE LETTER STATED THAT HE RECEIVED COMMISSION OF 0.15% TO 0.25% AS WELL AS 0.05% TO 0.10%. 11. THE LD. ASSESSING OFFICER REJECTED THE EXPLANATION OF THE ASSESSEE AND FOUND THAT ASSESSEE HAS NOT PRODUCED ANY SUPPORTING EVIDENCES TO SUPPORT ITS SUBMISSION. HE FURTHER STATED THAT THE ASSESSEE COMPANY HAS TRIED TO MAKE ITS OWN DIRECTOR AS THE WITNESS OF THE DE PARTMENT WHEREAS IT SHOULD HAVE PRODUCED ON ITS OWN HIM FOR CROSS - EXAMINATION. HE FURTHER HELD THAT THE ASSESSEE COMPANY CANNOT BE ABSOLVED OF THE AFFAIRS AND TRANSACTIONS ENTERED INTO IN ITS OWN BANK ACCOUNT AND IN CONTROL AND SUPERVISION OF ITS OWN DIRE CTOR. HOWEVER, THE LD. ASSESSING OFFICER HAS MADE THE ADDITION OF RS.2 , 54 , 93 , 0 00 / - IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS FOR THE REASON THAT ON PERUSAL OF THE ENTRIES REFLECTED IN THE BANK ACCOUNT REVEALS THAT THERE IS AN IMMEDIATE DEBIT OF AMOU NT EQUIVALENT TO THE AMOUNT OF CREDIT IN THIS ACCOUNT. FROM THESE FACTS, IT WAS NOTED BY THE LD. ASSESSING OFFICER THAT THE PATTERN OF THE TRANSACTIONS REFLECTED IN THE BANK ACCOUNT SHOWS THAT THE BANK ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 6 ACCOUNT EXISTING IN THE NAME OF THE ASSESSEE COMPANY W AS BEING USED FOR PROVIDING ACCOMMODATION ENTRIES. THE LD. AO FURTHER HELD THAT THE ASSESSING OFFICERS OF THE ALLEGED BENEFICIARIES STOOD ALSO INFORMED ABOUT THE TRANSACTIONS IN THOSE CASES. THE COMMISSION INCOME AT THE RATE OF 1% OF THE ACCOMMODATION ENTR Y WAS ADDED ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE OF RUPEES 254930/ . 12. ASSESSEE , AGGRIEVED WITH THE ORDER OF THE LD. ASSESSING OFFICER , PREFERRED AN APPEAL BEFORE THE LD. CIT (A) WHO VID E ORDER DATED 31/1/2013 DELETED THE ADDITION OF RS. 24553000 / AS ABOVE SUM WAS ADDED IN THE HANDS OF THE BENEFICIARIES AND ALSO ACCEPTING THE CONTENTION OF THE ASSESSEE THAT SH. PRADEEP JINDAL THE DIRECTOR OF THE APPELLANT COMPANY HAD OPERATED THE BANK ACCOUNT IN THE NAME OF THE COMPANY AND HE HAS ALSO ACKNOWLEDGE D THE RECEIPT OF THE COMMISSION. FOR THE BALANCE SUM OF RS. 940,000/ - WHEREIN THE ACCOMMODATION ENTRY OF RS. 4 LACS AND RS. 540000 / - WAS PROVIDED TO THE 2 PARTIES WHO COULD NOT BE TRACED WHETHER THE SUBSTANTIVE ADDITIONS HAVE BEEN MADE IN THEIR H ANDS OR NOT , HE SUSTAINED THE ADDITION TO THAT EXTENT. 13. WITH RESPECT TO THE COMMISSION INCOME, HE HELD THAT COMMISSION INCOME HAS BEEN RECEIVED BY SHRI PRADEEP JINDAL IN HIS INDIVIDUAL CAPACITY. HE FURTHER REFERRED TO THE SWORN STATEMENT OF THAT PARTICULAR PERSON FOR THIS. HE FURTHER HELD THAT THE STATE BANK ACCOUNTS SHOWN BY THE LD. ASSESSING OFFICER IS NOT REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. HE FURTHER NOTED THAT THE DETAILS OF THE BANK ACCOUNT OPENING FORM WAS OBTAINED BY THE AO WHICH SHOWS THAT THE ACCOUNT WAS OPERATED BY SHRI PRADEEP JINDAL ONLY FROM 24/2/1994. HE FURTHER RELIED UPON THE LETTER OF THE AUTHORIZED REPRESENTATIVE STATING THAT SHRI PRADEEP JINDAL HAS GIVEN AN INDEMNITY BOND TO THE APPELLANT COMPANY ON 27/9/2000 STATING THAT THE COMPANY HAD ONLY ONE BANK ACCOUNT WITH UCO BANK. HE HAS ALSO EXTRACTED CONTENTS OF SUCH INDEMNITY BOND V IDE PARA NO. 4.1 OF HIS ORDER. HE FURTHER HELD THAT THE LD. ASSESSING OFFICER HAS MADE THE ADDITION ON ACCOUNT OF THE COMMISSION INCOME IN THE HA NDS OF THE ASSESSEE ONLY ON THE P RESUMPTION THAT THE APPELLANT ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 7 COMPANY HAD PROVIDED ACCOMMODATION ENTRIES THOUGH THE EVIDENCES IS AVAILABLE ON RECORD INDICATES THAT SH RI PRADEEP JINDAL DIRECTOR OF THE COMPANY HAD INDULGED IN IT IN PROVIDING ACCOMMODATION ENTRIES AND RECEIVED COMMISSION FROM PROVIDING SUCH ACCOMMODATION ENTRIES. HE FURTHER HELD THAT THERE IS NO EVIDENCE ON RECORD TO CONCLUDE THAT HE PASSED ON THIS COMMISSION TO THE APPELLANT COMPANY. IN VIEW OF THIS, HE DELETED THE ADDITION OF RS 2 54930/ MADE BY THE AO WITH REGARD TO THE COMMISSION IN THE HANDS OF THE ASSESSEE. 14. AGGRIEVED BY THE ORDER OF THE LD. CIT (A) IN UPHOLDING THE ADDITION OF RS. 9 40,000 / - UNDER SECTION 68 OF THE ACT ON PROTECTIVE BASIS ASSESSEE HAS PREFER RED AN APPEAL BEFORE US. SIMILARLY THE REVENUE HAS PREFERRED AN APPEAL BEFORE US AGAINST THE DE LETION OF THE ADDITION OF RS. 2 4553000/ ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE AND DELETION OF ADDITION OF RS. 254 930 / - ON ACCOUNT OF COMMISSION AT TH E RATE OF 1% OF ACCOMMODATION ENTRIES ON THE GROUND THAT ADDITION MADE BY THE ASSESSING OFFICER WAS ON P RESUMPTION BASIS. 15. THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND OF APPEAL BEFORE US AS UNDER: - T HAT THE IMPUGNED ASSESSMENTS FRAMED IS BAD IN LAW AND O N FACTS, INASMUCH AS, THE INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE ACT AND FURTHER COMPLETION OF ASSESSMENT UNDER SECTION 143 (3)/147 OF THE ACT WAS WITHOUT SATISFYING THE STATUTORY PRECONDITION IS ENVISAGED IN THE AFORESAID SECTION AND WAS WITHO UT JURISDICTION AND WAS LIABLE TO BE QUASHED AS SUCH. 16. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ABOVE GROUND IS PURELY LEGAL IN NATURE AND REQUIRES NO FURTHER INVESTIGATION OF THE FACT . THEREFORE, IN VIEW OF DECISION OF THE HONBLE SUPREME COU RT IN CASE OF NATIONAL THERMAL POWER COMPANY LTD VERSUS CIT 2 2 9 ITR 383 AS WELL AS M/S JUTE CORPORATION OF INDIA LTD VERSUS CIT 187 ITR 688 THE ABOVE ADDITIONAL GROUND MAY BE ADMITTED AND ADJUDICATED. ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 8 17. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY OBJECTED TO THE ABOVE ADDITIONAL GROUND AND STATED THAT THIS GROUND IS NOT TAKEN BEFORE THE LOWER AUTHORITIES AND THEREFORE IT CANNOT BE ADMITTED NOW. 18. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND PERUSED THE APPLICATION FOR THE ADMISSION OF ADDITIONAL GROUND FILED BY THE ASSESSEE. ADMITTEDLY, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PURELY LEGAL IN NATURE AND THEREFORE IT CAN BE RAISED AT ANY TIME DURING THE COURSE OF APPELLATE PROCEEDINGS. IT IS ALSO NOT SHOWN TO US THAT WHETHER ANY FRESH INVES TIGATION IS REQUIRED TO BE DONE FOR ADJUDICATION OF THIS ADDITIONAL GROUND OF APPEAL. IN VIEW OF THIS, WE ADMIT THIS ADDITIONAL GROUND AND ADJUDICATE THEREON. 19. ON THE ISSUE OF REOPENING , THE LD AUTHORISED REPRESENTATIVE SUBMITTED THAT REOPENING HAS BEEN MA DE MERELY ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING . LD AO HAS NOT APPLIED HIS MIND AND HAS NOT CARRIED OUT ANY FURTHER INVESTIGATION IN THE MATTER. T HEREFORE, THE SAME IS INVALID. HE STATED THAT ASSESSEE IS A COMPANY, THE ACCOUNT OF TH E COMPANY WAS OPENED BY MR. PRADEEP JINDAL AND THEREAFTER HE OPERATED THIS ACCOUNT FOR THE PURP OSE OF SOME UNLAWFUL ACTIVITIES AND ASSESSEE COMPANY HAS NOTHING TO DO WITH IT. HE SUBMITTED THAT MERELY ON THE INFORMATION OF INVESTIGATION WING THE REOPENING HAS BEEN MADE WHICH IS INVALID. HE SPECIFICALLY REFERRED TO THE DECISIONS OF THE HON'BLE DELHI HIGH COURT FOR THIS PROPOSITION OF SABH INFRASTRUCTURE LTD VS. ACIT AND MINAKSHI OVERSEAS PVT. LTD. H E FURTHER SUBMITTED THE INFORMATION WAS NOT BACKED BY ANY MA TERIAL AND HENCE, THE REOPENING WAS INVALID. 20. THE LD DEPARTMENTAL REPRESENTATIVE VEHEMENTLY OPPOSED THE ARGUMENTS OF THE LD AUTHORISED REPRESENTATIVE. HIS MAIN ARGUMENT WAS THAT IN THE PRESENT CASE THERE IS A DEFINITE FINDING IN THE REASONS RECORDED BY THE ASSESSEE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME WITH ERSTWHILE AO WARD - 1, NEW DELHI. FURTHERMORE, IT HAS ALSO BEEN FOUND THAT ASSESSEE WAS ENGAGED IN AN ENTRY OPERATOR AND INTRODUCING UNACCOUNTED CASH MONEY. THEREAFTER, THE BANK ACCOUNT OF THE A SSESSEE WAS ALSO IDENTIFIED. THE REASONS WERE ALSO BASED ON COPY OF THE ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 9 STATEMENT GIVEN BY SHRI PRADEEP JINDAL BEFORE DIRECTOR OF INVESTIGATION. HE THEREFORE, SUBMITTED THAT WHEN THE DIRECTOR OF THE ASSESSEE COMPANY HAS GIVEN A STATEMENT WHICH SHOWS THAT THE ASSESSEE HAS A BANK ACCOUNT AND IN WHICH CASH OF RS. 2 . 55 CRORES APPROXIMATELY WERE DEPOSITED WHICH HAS BEEN USED BY THE ASSESSEE FOR GIVING ACCOMMODATION ENTRIES TO THE VARIOUS PARTIES , REOP ENING IS VALIDLY INITIATED. FURTHER, THE LD ASSESSING OFFICER HAS ALSO VERIFIED THAT WHERE THE ASSESSEE IS FILING RETURN OF INCOME. IN THIS CIRCUMSTANCES AND FACTS ALL THE DECISIONS RELIED UPON BY THE LD AR DO NOT SUPPORT THE CASE OF ASSESSEE. HE FURTHER SUBMITTED THAT IN THE CASE OF MINAKSHI OVERSEAS THE ISSUE WAS THAT THE ACCOMMODATION ENTRY WAS TAKEN BY THE ASSESSEE HOWEVER, IN THE PRESENT CASE OF THE ASSESSEE THE COMPANY ITSELF IS AN ENTRY OPERATOR, WHICH HAS BEEN CONFIRMED BY THE DIRECTOR OF THE COMPA NY ITSELF. WITH RESPECT TO THE DECISION OF SABH INFRASTRUCTURE THE STATEMENT OF THIRD PARTY WAS TAKEN WHO HAS STATED HE OPERATES CERTAIN COMPANIES WHO HAVE GIVEN ACCOMMODATION ENTRY TO THAT ASSESSEE . HOWEVER, IN THE PRESENT CASE THE DIRECTOR HIMSELF HAS C ONFESSED THEN THERE IS NO REASON THAT REOPENING CAN BE HELD TO BE INVALID. EVEN IN THE PRESENT CASE, ASSESSEE HIMSELF HAS CONFIRM ED AT ALL THE STAGES THAT ACCOUNT OF THE ASSESSEE WAS USED FOR PROVID ING ACCOMMODATION ENTRIES. HENCE, IN THIS CASE THERE IS NO REASON TO SAY THAT THE REASONS RECORDED BY THE ASSESSING OFFICER ARE INVALID. 21. ON THE MERITS , LD DR SUBMITTED THAT ASSESSEE HAS OPENED A BANK ACCOUNT THROUGH ITS DIRECTOR WHO HAS OPERATED THAT PARTICULAR ACCOUNT AND CARRIED OUT THE BUSINESS OF GIVING ACCOM MODATION ENTRIES TO THE VARIOUS PARTIES BY CHARGING THE COMMISSION. THE ASSESSEE HAS FAILED TO SHOW THAT THE BANK ACCOUNT OPENED IS NOT IN THE NAME OF THE COMPANY . ASSESSEE HAS NOT MADE ANY COMPLAINT EITHER AGAINST THE BANK MANAGER OR AGAINST THE SHRI PRADEEP JINDAL , WHOM ASSESSEE IS ALLEGING AS ECONOMIC FRAUD . HE SUBMITTED THAT LD AO DID NOT HAVE ANY OPTION IN ABSENCE OF ANY DETAILS AS MONEY IS CREDITED IN BANK ACCOUNT OF THE A SSESSEE AND ASSESSEE IS SITTING SILENTLY. IT SHOWS THE CONNIVANCE OF THE ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 10 ASSESSEE COMPANY IN THE WHOLE TRANSACTIONS. IN VIEW OF THIS, HE SUBMITTED THAT THE ARGUMENT OF THE LD AR DOES NOT HAVE ANY FORCE. 22. ON THE APPEAL OF THE REVENUE HE SUBMITTED THAT LD CI T(A) HAS FAILED TO APPRECIATE THE FACT THAT THE AMOUNT OF ADDITIONS HAVE BEEN MADE IN THE HANDS OF THE THOSE COMPANIES WHO ARE THE BENEFICIARIES OF THE TRANSACTION. HOWEVER, IT WAS NOT KNOWN WHETHER THE TAXES HAVE BEEN RECOVERED OR NOT. THEREFORE , THE LD C IT(A) SHOULD NOT HAVE DELETED THE ADDITION IN THE HANDS OF THE ASSESSEE MADE ON PROTECTIVE BASIS BY THE LD AO TILL THE DEMAND IS FINALIZED AND RECOVERED FROM THE BENEFICIARIES. TILL THAT TIME THE LD CIT ( A) SHOULD NOT HAVE DELETED THE ABOVE ADDITION. EVEN OTHERWISE, HE SUBMITTED THAT THE ADDITION WAS ON PROTECTIVE BASIS. 23. THE LD AR ON THE ISSUE OF MERITS, SUBMITTED THAT THE DIRECTORS OF THE PRESENT COMPANY ARE NOT AWARE ABOUT THE ANY TRANSACTION, THEY HAVE NOT OPERATED THE ACCOUNT. THE ACCOUNT IS NOT IN THE BOOKS OF THE ASSESSEE. HENCE, COMPANY HAS NOTHING TO DO WITH THE ABOVE ACCOUNT. HE FURTHER SUBMITTED THAT LD CIT(A) HAS WRONGLY UPHELD THE ADDITION OF RS. 9.40 LACS U/S 68 IN THE HANDS OF THE ASSESSEE. HE SUBMITTED THAT WHEN IT IS EVIDENT THAT THE BENEFIC IARIES ARE SOMEBODY ELSE BUT NOT THE ASSESSEE THEN SUCH ADDITION COULDNT BE UPHELD. ON THE APPEAL OF THE REVENUE, HE SUBMITTED THAT WHEN THE BENEFICIARIES ARE FOUND AND THE INCOME IS ASSESSED IN THEIR HANDS THERE IS NO REASON TO SUSTAIN THE ABOVE ADDITION ON PROTECTIVE BASIS. HE FURTHER SUBMITTED THAT THE LD CIT(A) WHEN HAS DELETED OTHER ADDITIONS THE ABOVE ADDITION IS SIMILAR AND THEREFORE, SAME SHOULD HAVE BEEN ALSO DELETED. THE LD AR FURTHER RELIED UPON THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN 12 8 ITR 58 WHEN ASKED TO PRODUCE THE DETAILS OF ACCOUNT OPENING FORM FROM THE BANKERS THAT WHEN THE ASSESSEE IS NOT PRODUCING MATERIAL THE TRIBUNAL IS NOT BOUND TO COLLECT MATERIAL TO DECIDE THE CLAIM. HE FURTHER REFERRED TO THE DECISION OF HON'BLE DELHI HIG H COURT IN CASE OF PC PURI VS. CIT 151 ITR 584 AND SPECIFICALLY REFERRED TO PAGE NO. 604 OF THAT ORDER TO SUPPORT HIS CONTENTION. HE FURTHER REFERRED TO THE THIRD MEMBER DECISION OF THE COORDINATE BENCH IN CASE OF RAJ KUMAR JAIN VS. ACIT 50 ITD 1 TO ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 11 FURTHE R SUPPORT HIS CLAIM. IN THE END, HE SUBMITTED THAT THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED AND APPEAL OF THE ASSESSEE NEEDS TO BE ALLOWED. 24. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE F IRST ISSUE THAT REQUIRES TO BE DECIDED BY US ON THE ADDITIONAL GROUND RAISED BY THE ASSESSEE AGAINST REOPENING OF THE ASSESSMENT. IN THE PRESENT CASE THE LD ASSESSING OFFICER HAS REOPENED THE CASE OF THE ASSESSEE BY ISSUE OF NOTICE U/S 148 OF THE INCOME TA X ACT. B ASIS OF THE REOPENING WAS THE ENQUIRY MADE BY THE DIRECTOR OF INVESTIGATION ON VARIOUS PERSONS WHO WERE INDULGED IN PROVIDING ACCOMMODATION ENTRIES ETC. T HOSE PERSONS HAVE ALSO PROVIDED THE NAMES OF THE COMPANIES TO WHOM SUCH ACCOMMODATION ENTRIES WERE PROVIDED. IT WAS NOTED BY THE LD ASSESSING OFFICER THAT ASSESSEE COMPANY WAS ENGAGED BY AN ENTRY OPERATOR WHO IS INTRODUCING UNACCOUNTED IN THE BANK ACCOUNT OF THE ASSESSEE AND FURTHER FROM THAT PARTICULAR BANK ACCOUNT GIVING ACCOMMODATION ENTRIES TO VARIOUS PARTIES. FROM 01.04.1999 TO 31.03.2000 SUCH ACCOMMODATION ENTRIES ARE EQUIVALENT TO THE TUNE OF RS. 2.55 CRORES. BASED ON THIS REASON THE LD ASSESSING OFF ICER ALSO OBTAINED THE COPY OF THE BANK STATEMENT OF THE ASSESSEE FROM SBI S H AKTI NAGAR BRANCH. THEREFORE, AO HAS APPLIED HIS MIND ON THE INFORMATION - RECEIVED FORM DIT. THE LD ASSESSING OFFICER HAS VERIFIED THE COPY OF THE BANK ACCOUNT WITH THE COPY OF STA TEMENT OF SHRI PRADEEP JINDAL MADE BEFORE THE LD DIT. IT IS TO BE NOTED THAT SHRI PRADEEP JINDAL IS THE DIRECTOR OF THE COMPANY. THEREFORE, THE DIRECTOR OF THE ASSESSEE COMPANY HIMSELF HAS STATED THAT HE IS AN ENTRY OPERATOR AND FROM BANK ACCOUNT OF PRECIS ION AGENCIES PVT. LTD (ASSESSEE) HE IS PROVIDING ACCOMMODATION ENTRIES. THE BANK ACCOUNT OF THE ASSESSEE WITH STATE BANK OF INDIA ALSO CORROBORATES ABOVE FACTS. THE LD ASSESSING OFFICER HAS ALSO VERIFIED THE DETAILS OF THE RETURN OF INCOME FILED BY THE ASS ESSEE FOR AY 2000 - 01 WHICH IS MENTIONED IN THE REASONS RECORDED. IN VIEW OF THIS IT CANNOT BE SAID THAT LD ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE INFORMATION RECEIVED FROM THE INVESTIGATION WING. ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 12 FURTHER, WHEN THE STATEMENT IS GIVEN BY THE DIREC TOR OF THE ASSESSEE COMPANY ITSELF , THAT HE IS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES, WHERE THE PRECISE BANK ACCOUNT OF THE ASSESSEE WAS FOUND, WHERE AMOUNT INVOLVED IN THE ACCOMMODATION ENTRIES WAS ALSO DETERMINED AND THE RETURN OF ASSESSEE WAS ALSO COLLECTED BY THE ASSESSEE AND RECORDED IN THE REASONS , WE ARE OF THE VIEW THAT THERE IS NO INFIRMITY COMMITTED BY THE LD ASSESSING OFFICER IN REOPENING THE CASE OF THE ASSESSEE. FURTHER, THE GROUND RAISED BY THE ASSESSEE ALSO WRONGLY MENTIONED THAT ASSESSMENT PROCEEDINGS WERE COMPLETED U/S 143(3) OF THE ACT. THE ABOVE FACT IS FOUND TO BE FALSE AS NO ORDER U/S 143(3) PASSED IN THE CASE OF THE ASSESSEE WAS PRODUCED BEFORE US. THE LD ASSESSING OFFICER HAS SPECIFICALLY MENTIONED THAT RETURN OF INCOME OF THE ASSESSEE WAS MERELY PROCESSED U/S 143(1) OF THE ACT. FURTHER, THE LD AR RELIED UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN PCIT VS. MINAKSHI OVERSEAS PVT. LTD 395 ITR 677 TO SUBMIT THAT REOP ENING IS NOT VALID. WE HAVE CAREFULLY PERUSED THE DECISION OF THE HON'BLE DELHI HIGH COURT AND COMPARED THE FACTS OF THE SAME WITH THE FACTS BEFORE US AND FOUND THAT IN THE PRESENT CASE THE LD ASSESSING OFFICER HAS NOT MERELY REPRODUCED THE REPORT OF THE I NVESTIGATION WING BUT HAS ALSO LINKED WITH BANK ACCOUNT OF THE ASSESSEE, RETURN OF THE ASSESSEE AND STATEMENT OF THE DIRECTOR OF THE ASSESSEE COMPANY. IN VIEW OF THIS RELIANCE ON THE ABOVE DECISION IS MISPLACED FOR THE REASON THAT IN THAT PARTICULAR CASE R EOPENING WAS HELD TO BE INVALID BECAUSE THE LD AO HAS MERELY REPRODUCED THE INVESTIGATION WINGS REPORT IN THE REASONS RECORD WITHOUT ESTABLISHING LINK BETWEEN TANGIBLE MATERIAL AND FORMATION OF BELIEF. FURTHER, THE RELIANCE PLACED ON THE DECISION OF THE H ON'BLE DELHI HIGH COURT IN CASE OF SABH INFRASTRUCTURE LTD VS. ACIT IS ALSO MISPLACED FOR THE REASON THAT IN THAT PARTICULAR CASE THE LD ASSESSING OFFICER DID NOT MENTION THAT WHAT FACTS HAVE BEEN ASSESSEE FAILED TO DISCLOSE. FURTHER, IN THAT PARTICULAR CA SE THE REASON FOR REOPENING CONTAIN THE NAME OF VERY SAME FIVE COMPANIES, WHICH WERE INITIALLY DISCLOSED BY THE PETITIONER IN THE ORIGINAL ASSESSMENT PROCEEDINGS. IN THAT PARTICULAR CASE ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 13 THE ASSESSMENT U/S 143(3) OF THE ACT WAS PASSED ON 20.12.2010 WHEREIN , THE COMPLETE DETAILS ABOUT THE ABOVE FIVE COMPANIES WERE DISCLOSED BY THE ASSESSEE. IN THE PRESENT CASE, THERE IS NO ASSESSMENT U/S 143(3) OF THE ACT BUT ASSESSEES RETURN WAS MERELY PROCESSED U/S 143(1) OF THE ACT. FURTHER, IN CASE OF THE ASSESSEE, A BA NK ACCOUNT IS FOUND IN THE NAME OF THE ASSESSEE COMPANY FROM WHICH ACCOMMODATION ENTRIES WERE PROVIDED WITHOUT RECORDING THE WHOLE BANK ACCOUNT IN THE BOOKS OF THE ASSESSEE. IN VIEW OF THIS , RELIANCE ON THE ABOVE TWO DECISIONS OF THE HON'BLE DELHI HIGH CO URT BY THE LD AR IS MISPLACED. IN VIEW OF THIS FACT, WE DISMISS ADDITIONAL GROUND FILE D BY THE ASSESSEE CHALLENGING THE REOPENING PROCEEDINGS BY THE LD AO. 25. SIMILARLY THE GROUNDS AGAINST THE REOPENING THE ASSESSMENT WERE RAISED FOR AY 200 - 102 AND 2002 - 03 A RE ALSO DISMISSED FOR THE SAME REASONS. 26. NOW WE COME TO THE GROUND NO. 1 OF THE APPEAL OF THE ASSESSEE AS WELL AS GROUND NO. 1 AND 2 OF THE APPEAL OF THE REVENUE FOR AY 2000 - 01 . THE BRIEF FACTS ARE THAT A BANK ACCOUNT IN THE NAME OF THE ASSESSEE COMPANY WA S OPENED WITH STATE BANK OF INDIA, SHAKTI NAGAR, NEW DELHI VIDE ACCOUNT NO. 043145. ANNEXURE - A WAS SHOWING THE DETAILS OF BENEFICIARIES TO WHOM ACCOMMODATION ENTRIES WERE PROVIDED BY THE ASSESSEE COMPANY. THE DIRECTOR OF THE COMPANY MR. PRADEEP JINDAL HAS CONFESSED BEFORE THE INVESTIGATION WING VIDE HIS STATEMENT DATED 15.04.2004 NAMED THE ASSESSEE COMPANY STATING THAT HE OPERATED THE BANK ACCOUNT AND SUBSEQUENTLY, MANAGEMENT SHARE HOLDING HAVE BEEN CHANGED. ON QUERY BY THE LD ASSESSING OFFICER THE ASSESSEE STATED THAT ABOVE BANK ACCOUNT HAS BEEN MAINTAINED BY MR. PRADEEP JINDAL FRAUDULENTLY WITHOUT KNOWLEDGE AND APPROVAL OF BOARD OF DIRECTORS AND SHARE HOLDERS AND THE TRANSACTION ENTERED INTO THESE BANK ACCOUNTS DO NOT APPEAR IN THE BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY. IT WAS FURTHER STATED THAT IF DESIRED THE MINUTES BOOK OF THE DIRECTORS MEETING CAN ALSO BE PRODUCED AND FURTHER ASKED THAT WITHOUT GRANTING CROSS EXAMINATION OF MR PRADEEP JINDAL THE ADDITION CANNOT BE MADE. WITH RESPECT TO THE COMMISSION THE ASSESSEE REFERRED TO THE STATEMENT OF MR. ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 14 PRADEEP JINDAL THAT COM MISSION AT THE PRESUMED RATE OF 2% WAS ALSO CONTESTED. ON THIS FACT THE ADDITION IS MADE IN THE HANDS OF THE ASSESSEE OF THE FULL AMOUNT OF ACCOMMODATION ENTRY GIVEN FROM THEIR BANK ACCOUNT OF RS. 25493000/ - WAS ADDED INTO THE HANDS OF THE ASSESSEE ON PROT ECTIVE BASIS. THE AO HELD THAT THIS AMOUNT IS REQUIRED TO BE ASSESSED SUBSTANTIALLY IN THE HANDS OF RESPECTIVE BENEFICIARIES. FURTHER, COMMISSION @1% ON THE ABOVE ACCOMMODATION ENTRY WAS ALSO ADDED. FOR SUBSEQUENT YEARS THE LD AO HAS MADE ADDITION ON THE S UBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE. 27. FOR AY 2000 - 01 , THE LD CIT(A) AFTER OBTAINING THE REMAND REPORT OF THE ASSESSEE HELD THAT OUT OF SUM OF RS. 25493000/ - THE LD ASSESSING OFFICER HAS SUBMITTED THAT IN CASE OF THE FIVE PARTIES OUT OF THE SEVER AL BENEFICIARIES THE ADDITION HAVE BEEN SUBSTANTIALLY MADE AMOUNTING TO RS. 9632760/ - IN THE HANDS OF THE FIVE PARTIES AS MENTIONED IN PARA NO. 3.1 OF THE ORDER OF THE LD CIT(A). THE LD AO DID NOT MENTION ANYTHING WHETHER IN CASE OF TWO PARTIES THE ADDITIO N IS MADE OR NOT ON SUBSTANTIVE BASIS. HOWEVER , THE LD CIT(A) AS PER THE LETTER OF THE APPELLANT DATED 16.02.2010 MENTIONED IN PARA NO. 3.2 OF THE ORDER THAT IN CASE OF THE OTHER TWO PARTIES THE SUBSTANTIAL ADDITION OF RS. 60 LACS AND RS. 1 CRORE RESPECTIV ELY HAVE BEEN MADE. THE LD CIT(A) HAS MENTIONED THAT LD AO HAS NOT CONFIRMED THE ABOVE FACTS. SUBSEQUENTLY, THE LD AO VIDE LETTER DATED 04.02.2010 CONFIRMED THE ABOVE FACTS. IN VIEW OF THIS IT WAS FOUND BY LD CIT(A) THAT IN CASE OF SEVEN PARTIES THE ADDITI ON OF RS. 25632760/ - AS TABULATED IN PARA NO . 3.2 OF HIS ORDER HAVE BEEN MADE SUBSTANTIALLY. 28. COMING TO THE GROUND NO. 1 OF THE APPEAL OF THE ASSESSEE, THE LD CIT(A) NOTED THAT IN CAS E OF DELTA VEHICLES AND JAGDAMBA PROMOTERS WHERE ACCOMMODATION ENTRIES OF RS. 4 LAC AND RS. 5.40 LACS ARE GIVEN ADDITION ON THE SUBSTANTIVE BASIS IN THE HANDS OF THESE TWO PARTIES WERE NOT MADE, THEREFORE, HE CONFIRMED THE ABOVE ADDITION IN THE HANDS OF THE ASSESSEE. ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 15 29. COMING TO THE POINT OF COMMISSION INCOME THE LD ASSESSING OF FICER HAS ESTIMATED THE COMMISSION @1%. THE LD CIT(A) HAS DELETED THE ABOVE EVIDENCE HOLDING THAT THERE IS NO EVIDENCE TO CONCLUDE THAT APPELLANT HAS RECEIVED ABOVE COMMISSION FOR PROVIDING ACCOMMODATION ENTRY. HE FURTHER HELD THAT IT IS NOT CLEAR THAT WHE THER ANY ADDITION RECEIPT OF COMMISSION WAS MADE IN THE HANDS OF SHRI PRADEEP JINDAL, DIRECTOR OF THE APPELLANT COMPANY. 30. NOW WE COME TO THE FACTS OF THE CASE FOR AY 2001 - 02. THE PARTIES CONFIRMED THAT THE FACTS OF THE CASE WERE SIMILAR FOR ASSESSMENT YEAR 2001 - 02 WHEREIN, OUT OF THE TOTAL ADDITION ON ACCOUNT OF ACCOMMODATION ENTRIES MADE BY THE ASSESSING OFFICER OF RS. 205 25753/ - THE LD CIT(A) HAS SUSTAINED THE ADDITION OF RS. 741059/ - AND DELETED THE ADDITION OF RS. 19584694/ - . FURTHER, THE LD CIT (A) HAS DELETED THE ADDITION ON ACCOUNT OF COMMISSION INCOME OF RS. 203257/ - . THE LD AR SUBMITTED THAT HIS ARGUMENTS REMAIN T HE SAME. 31. HOWEVER, THE REVENUE SUBMITTED THAT LD CIT (A) HAS DELETED THE ADDITION ON DIFFERENT GROUNDS. IT WAS SUBMITTED THAT LD CIT(A) HELD THAT ASSESSEE TO BE ACCOUNTABLE ONLY IN RESPECT OF TRANSACTION UP TO 27.09.2000 I.E.E THE DATE UP TO WHICH SHRI PRADEEP JINDAL WAS DIRECTOR OF THE ASSESSEE COMPANY AND ACCORDINGLY, UPHELD THE ADDITION OF PEAK CREDIT OF DEPOSITS OF RS. 741059/ - ONLY. THE DELETION OF THE ADDITION OF RS. 19584694/ - HAS BEEN DELETED WITHOUT IDENTIFYING ANY PARTY IN WHOSE HANDS THE ABO VE SUM IS ADDED ON SUBSTANTIVE BASIS. 32. THE LD CIT(A) HAS HELD IN PARA NO. 3.6 AS UNDER: - 3.6. ALL THESE EVIDENCE CLEARLY INDICATES THAT SHRI PRADEEP JINDAL HAD PROVIDED ACCOMMODATION ENTRIES AND WHETHER THE COMPANY IS IN ANYWAY RESPONSIBLE FOR THESE TRA NSACTIONS IS YET TO BE PROVED WITH EVIDENCE. IN VIEW OF THE ABOVE, THE AOS ADDITION OF TRANSACTIONS SUBSEQUENT TO 27.09.2000 IS NOT JUSTIFIABLE AS THE EVIDENCE CLEARLY INDICATES THAT SHRI PRADEEP JINDAL HAD RESIGNED ON 27.09.2000. THE COMPANY IF AT ALL CA N BE HELD RESPONSIBLE IT IS FOR TRANSACTIONS UPTO 27.09.2000 ONLY WHEN SHRI PRADEEP JINDAL WAS THE DIRECTOR OF THE COMPANY. I HAVE VERIFIED THE BANK PASS BOOK WITH SBI, SHAKTI NAGAR BRANCH AND IT IS A TYPICAL ACCOMMODATION ENTRY CASE PASS BOOK WITH IMMEDIA TE DEBIT OF AMOUNT EQUIVALENT TO THE AMOUNT OF CREDIT IN THE ACCOUNT AS MENTIONED BY THE AO IN ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 16 THE ASSESSMENT ORDER FOR A. Y. 2000 - 01. THE REAL BENEFICIARIES IN THIS CASE ARE THE RECIPIENTS OF ACCOMMODATION ENTRIES AND THE ACTUAL ADDITION SHOULD BE IN THEI R NAMES ONLY. IT IS NOT CLEAR FROM THE ASSESSMENT RECORDS WHETHER ANY ADDITION WAS MADE IN THE HANDS OF THE FOUR BENEFICIARIES MENTIONED, ABOVE THOUGH THEIR AOS THEIR AOS HAVE BEEN INTIMATED ABOUT THESE TRANSACTIONS. FURTHER, IT IS ALSO NOT CLEAR WHETHER A NY ADDITION HAVE BEEN MADE IN THE HANDS OF SHRI PRADEEP JINDAL, THE DIRECTOR OF THE COMPANY TILL 27.09.2000 WHO WAS THE REAL ACCOMMODATION PROVIDER. HOWEVER, IN THIS CASE THE AO HAD MADE THE ADDITION BECAUSE THE BANK ACCOUNT WAS IN THE NAME OF THE APPELLAN T COMPANY AND ONE OF ITS DIRECTORS OPERATED THIS BANK ACCOUNT. THEREFORE, I AM OF THE VIEW THAT THE ADDITION OF PEAK CREDIT AS ON 17.07.2000 OF RS. 7,41,059/ - IS JUSTIFIED ON THE FACTS IN THIS CASE, INSTEAD OF RS. 2,03,25,753/ - MADE BY THE AO. AS A RESULT, THIS GROUND OF APPEAL IS PARTLY ALLOWED AND THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. 1,95,84,694/ - AS THE ADDITION OF RS. 7,41,059/ - ALONE IS SUSTAINED. 33. THE REASONING OF THE LD CIT(A) WAS ALSO BASED ON THE FACT THAT IN PARA NO. 3 HE HAS STATED THAT FOR AY 2002 - 03 THE LD ASSESSING OFFICER HAS CALLED FOR THE INFORMATION FROM THE BANK U/S 133(6) OF THE INCOME TAX ACT. HE FURTHER STATED THAT THE PRESENT DIRECTORS HAVE ALSO OBTAINED AN INDEMNITY BOND FROM SHRI PRADEEP JINDAL STATING THAT THE COMPANY HAD ONLY ONE BANK ACCOUNT WITH UCO BANK. THE LD CIT (A) FURTHER HELD THAT LD ASSESSING OFFICER SHOULD HAVE MADE FURTHER VERIFICATION OF THE BANK ACCOUNT AS THE APPELLANT DID NOT HAVE ANY KNOWLEDGE ABOUT THE ABOVE BANK ACCOUNT. FURTHERMORE, THE LD CIT(A) HE LD THAT IN THE CURRENT YEAR THE ADDITION HAS BEEN MADE ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE AGAINST ADDITION MADE IN EARLIER YEAR ON PROTECTIVE BASIS. FURTHERMORE, HE STATED THAT ONLY THREE ENTRIES ARE REQUIRED TO BE EXPLAINED WHICH ONLY AMOUN TS TO RS. 16.87 LACS WITH RESPECT TO ONLY FOUR PARTIES WHEREAS THE ENTIRE CREDIT OF RS. 20325753/ - WAS MADE. THE LD CIT(A) FURTHER HELD THAT TRANSACTION SUBSEQUENT TO 27.09.2000 IS NOT JUSTIFIABLE BECAUSE FROM THIS DATE THE PRESENT DIRECTOR HAVE TAKEN THE BUSINESS OF THE ASSESSEE AND MR. PRADEEP JINDAL HAD RESIGNED W.E.F THAT DATE. THEREFORE, HE WORKED OUT ON VERIFICATION OF THE PASSBOOK HOLDING THAT THOUGH THESE ARE TYPICAL ACCOMMODATION ENTRIES ONLY THE REAL ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 17 BENEFICIARIES CAN BE TAXED AND NOT THE ASSESSEE . HE FURTHER NOTED THAT IT IS NOT KNOWN WHETHER ANY ADDITION HAS BEEN MADE IN THE HANDS OF MR. PRADEEP JINDAL. IN THE END, HE MADE AN ADDITION OF PEAK CREDIT AS ON 17.07.2000 OF RS. 741059/ - INSTEAD OF RS. 20325753/ - MADE BY THE LD AO. THIS RESULTED INTO D ELETION OF ADDITION OF RS. 19584694/ - AND ALSO COMMISSION INCOME OF THE ASSESSEE. 34. FOR AY 2002 - 03 , THE LD. ASSESSING OFFICER MADE THE ADDITION OF RS. 40 LACS IN THE HANDS OF THE ASSESSEE AS SUCH AMOUNT HAS BEEN INTRODUCED IN THE BANK ACCOUNT OF THE S TATE BANK OF INDIA IN CASH ON SUBSTANTIVE BASIS. CONSEQUENTLY, THE ADDITION OF RS. 40,000 BECAUSE OF COMMISSION INCOME WAS ALSO MADE. ON APPEAL BEFORE THE LD. CIT APPEAL, HE DELETED THE ADDITION OF THE COMMISSION OF RS. 40,000/ - , HOWEVER, WITH RESPECT TO THE ADDITION OF RS. 40 LACS, HE UPHELD THE ADDITION TO THE EXTENT OF RS. 36 LACS HOLDING THAT THAT AS THE BANK ACCOUNT IS STATED IN THE NAME OF THE ASSESSEE COMPANY THE APPELLANT CANNOT CLAIM TOTAL IGNORANCE ABOUT THE DEPOSITS IN THOSE ACCOUNTS. HE FURTH ER REJECTED THE CONTENTION OF THE ASSESSEE THAT THE APPELLANT CANNOT STATE THAT THE NEXT DIRECTOR WAS OPERATING THE AMOUNT AND NO ONE IN THE COMPANY WAS AWARE OF THIS FACTS. HOWEVER HE COLLECTED THE AMOUNT OF RS. 40 LACS TO RS. 36.40 LACS AND CONFIRMED THE ADDITION OF RS. 36 LACS IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS. THEREFORE ASSESSEE IS IN APPEAL BEFORE US. 35. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PER USED THE ORDERS OF THE LOWER AUTHORITIES FOR ALL THE 3 YEARS IN A WHOLISTIC MANNER. APPARENTLY THE FACTS THAT EMERGE ARE THAT ONE SH. PRADEEP GENERAL ALONG WITH OTHER DIRECTORS OF THE ASSESSEE COMPANY WERE DIRECTORS IN THE COMPANY UP TO 27/09/2000. SUBSEQUENTLY THE SHARES WERE TRANSFERRED FROM THE ORIGINAL SHAREHOLDERS O F THIS COMPANY TO THE PRESENT SHAREHOLDERS. CONSEQUENTLY THE DIRECTORS ALSO CHANGED W.E.F. THAT DATE. THEREFORE THE PRESENT DIRECTORS WHEN BUYING THE SHARES OF THAT COMPANY APPARENTLY OBTAIN ED AN INDEMNITY BOND FROM SHRI PRADEEP JINDAL ABOUT THE NUMBER OF BANK ACCOUNTS IN THE NAME OF THIS COMPANY. MR. PRADEEP JINDAL SUBMITTED THAT THE COMPANY OWNS ONLY ONE ACCOUNT IN THE NAME ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 18 OF ASSESSEE COMPANY WITH UCO BANK. THEREFORE, ON THIS INDEMNITY BASIS THE SHARES OF THE ASSESSEE COMPANY AS WELL AS THE CHANGE IN TH E DIRECTORS OF THE ASSESSEE COMPANY TOOK PLACE. CONSEQUENTLY THE PRESENT DIRECTORS STARTED DOING THEIR OWN BUSINESS IN THIS COMPANY. SUDDENLY BY THE ISSUE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT BY THE LD. ASSESSING OFFICER, THE DIRECTORS OF THES E COMPANY CAME TO KNOW THAT MRS. PRADEEP JINDAL HAD ONE BANK ACCOUNT IN THE NAME OF THE COMPANY WITH STATE BANK OF INDIA IN SHAKTI NAGAR BRANCH, NEW DELHI . CUNNINGLY, SH. PRADEEP JINDAL DID NOT SHOW THESE BANK ACCOUNT IN THE BOOKS OF ACCOUNT OF THE COMPAN Y. HE USED TO GIVE ALLEGEDLY HUGE ACCOMMODATION ENTRIES TO VARIOUS PARTIES IN THE FORM OF SHARE CAPITAL, LOAN ETC. THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT CARRIED OUT SOME SEARCHES AND WHERE FROM IT WAS FOUND THAT HUGE CASH IS DEPOSITED IN THE BANK ACCOUNT AND IN TURN ACCOMMODATION ENTRIES WERE ISSUED IN THE NAME OF VARIOUS BENEFICIARIES. ADMITTEDLY, THE INVESTIGATION WING RECORDED THE STATEMENT OF MR PRADEEP JINDAL DURING THE COURSE OF SEARCH ON 15 /4/2004. IN ANSWER TO QUESTION NO. 5 HE REFERR ED THE NAME OF SO MANY COMPANIES FROM WHICH HE USED TO GIVE ACCOMMODATION ENTRIES. ONE OF THEM IS THE ASSESSEE COMPANY. THE INVESTIGATION WING AFTER RECORDING THE STATEMENT OF SH. PRADEEP JINDAL DID NOT INVESTIGATE THAT WHO IS THE BENEFICIARIES OF THESE AC COMMODATION ENTRIES FROM THESE COMPANIES STATED BY SH. JINDAL IN ANSWER TO QUESTION NO. 5 OF THE STATEMENT. BUT SENT THE INVESTIGATION REPORT TO THE ASSESSING OFFICER. THE LD. ASSESSING OFFICER ALSO DID NOT MAKE FURTHER ENQUIRY DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF THAT WHO ARE THE BENEFICIARIES OF THIS ACCOMMODATION ENTRIES. IT IS SURPRISING THAT EVEN DURING THE REMAND PROCEEDINGS THE LD. ASSESSING OFFICER DID NOT GIVE THE COMPLETE INFORMATION BEFORE THE LD. CIT (A) ABOUT WHO ARE THE BEN EFICIARIES OF THE TOTAL TRANSACTION. THEREFORE FOR THE ASSESSMENT YEAR 2000 - 01 THE ADDITION WAS PARTLY CONFIRMED IN THE HANDS OF THE ASSESSEE BY THE LD. CIT (A) . SUBSEQUENTLY FOR ASSESSMENT YEAR 2001 - 02 THE LD. CIT (A) HELD THAT AS SH. PRADEEP JINDAL WAS THE DIRECTOR OF THE COMPANY UP TO CERTAIN ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 19 DATE AND THEREFORE THE COMPAN Y IS RESPONSIBLE ONLY UP TO THAT DATE TO THE PEAK BALANCE IN THE BANK ACCOUNT AND CONFIRMED THE ADDITION AND CONSEQUENTLY DELETED THE BALANCE ADDITION. FURTHER FOR ASSESSMENT YEAR 2002 03 THE LD. CIT (A) CONFIRMED THE WHOLE ADDITION AS ASSESSEE WAS HAVING THE BANK ACCOUNT AND THE MONEY WAS DEPOSITED IN ITS BANK ACCOUNT. IN ALL THE THREE CASES, THE LD. CIT(A) HAS DELETED THE ADDITION OF COMMISSION INCOME. NEITHER THE ASSESSING OFFICER CONDUCT ED ANY INQUIRY WITH RESPECT TO WHO WERE THE BENEFICIARIES OF THIS WHOLE TRANSACTION, NOR THE APPELLATE AUTHORITIES OF THE INCOME TAX DEPARTMENT WHILE DELETING THE ADDITION EVEN ATTEMPTED TO FIND OUT THE TRUE NATURE OF THE TRANSACTIONS AND GO BEHIND THE REA L BENEFICIARIES. AT THIS MOMENT IT IS ALSO NECESSARY TO SEE WHAT KIND OF INVESTIGATION THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT HAS DONE. THE INVESTIGATION DEPARTMENT HAS MERELY IDENTIFIED THE BANK ACCOUNT AND SEARCH ED THE PARTIES, OBTAINED THE CONFESSION OF SHRI PRADEEP JINDAL WHO CONVENIENTLY GAVE A STATEMENT AS AN ENTRY OPERATOR AND CONFESSED RECEIVING THE COMMISSION INCOME. AFTER THAT, NOTHING WAS DONE, AS IT IS APPARENT BEFORE US. THE INVESTIGATION WING HAD ALL THE INFORMATION WITH THEM ABOU T THE NUMBER OF COMPANIES SH. PRADEEP JINDAL WAS OPERATING. THEY HAD ALL THE BANK ACCOUNTS WITH THEM. AND MORE IMPORTANTLY AT THAT PARTICULAR TIME THEY HAD ALSO THE CONTROL OVER SH. PRADEEP JINDAL AS THEYVE ALREADY TAKEN HIS STATEMENT. THE RESPECTIVE BENE FICIARY SHOULD HAVE BEEN CONFRONTED A T THAT PARTICULAR TIME WITH THE STATEMENT OF SH. PRADEEP JINDAL. INSTEAD OF FINDING OUT THE REAL BENEFICIARIES OF THESE TRANSACTIONS THEY MERELY THROWN THE WHOLE MATERIAL TO THE DESK OF THE LD. ASSESSING OFFICER. THE LD . ASSESSING OFFICER ALSO CONVENIENTLY MADE THE ADDITION IN THE HANDS OF THE ASSESSEE WITHOUT IDENTIFYING WHO ARE THE REAL BENEFICIARIES OF THE TRANSACTIONS. THE LD. CIT (A) FOR ALL THESE 3 YEARS EITHER DELETED THE ADDITION OR CONFIRM ED THE SAME. THE WHOLE EPISODE OF THE ENQUIRY CONDUCTED BY THE INCOME TAX DEPARTMENT SHOWS THAT ALL THE AUTHORITIES HAVE KEPT LOSE ENDS WHILE PERFORMING THEIR DUTIES. NOW AT THIS STAGE IT WOULD BE A HERCULEAN TASK TO IDENTIFY THE REAL BENEFICIARIES OF THESE ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 20 TRANSACTIONS AND TO T AX THEM BUT STILL WE MAKE AN EFFORT TO BRING THEM TO THE BOOKS . 36. IT IS ALSO SURPRISING THAT SUCH A HUGE TRANSACTIONS WERE CARRIED OUT BY THE IMPUGNED ENTRY PROVIDER WITHOUT THE UNUSUAL TRANSACTIONS COMING TO THE KNOWLEDGE OF THE BANKER. SUCH TRANSACTIONS ON LOOKING AT THE BANK PASS BOOK BANK STATEMENTS ITSELF SHOWS THEIR NATURE, INTENT AND PURPOSES. FURTHER U/S 133 (6) INQUIRES MADE BY THE LD AO TO THE BANKER, THE MANNER IN WHICH ANSW ERS WERE GIVEN ALSO SHOWS THAT THE TRANSACTIONS WERE CARRIED OUT IN THOSE ACCOUNTS WITHOUT PROPER KNOW YOUR CUSTOMER( KYC) NORMS. 37. IT IS NOW ALSO APPARENT THAT ALL THESE TRANSACTIONS CARRIED OUT BY MR PRADEEP JINDAL FROM THE ACCOUNT OF THE ASSESSEE COMPANY OR FROM THE OTHER COMPANIES NAMED IN A STATEMENT ARE ALL BOGUS TRANSACTIONS WHICH HAVE NOT AT ALL BEEN RECORDED IN THE BOOKS OF ACCOUNTS. ALL THESE ACCOMMODATION ENTRIES ARE PROVIDED BY DEPOSITING HUGE CASH IN THESE BANK ACCOUNTS AND ISSUING CHEQUES IN TH E NAME OF THE BENEFICIARIES. AS AND WHEN THE BENEFICIARY HAVE BEEN PROVIDED WITH THE ACCOMMODATION ENTRIES THE CONFIRMATION OF THE TRANSACTION ON THE LETTERHEAD OF THESE COMPANIES WHICH ARE ALSO FORGED WERE PROVIDED MENTIONING THE PERMANENT ACCOUNT NUMBER AND BANK ACCOUNT OF THE ASSESSEE COMPANY. NOT ALL THESE TRANSACTIONS ARE RECORDED IN THE BOOKS OF ACCOUNTS OF THE RESPECTIVE COMPANIES. IN THE CONF I RMATION, NO ACCOUNTS WERE PROVIDED FOR. THESE ARE THE MODUS OPERANDI OF THESE ACCOMMODATION ENTRY PROVIDERS AND AFTER CARRYING ON BUSINESS FOR SOMETIME THE COMPANIES WERE SOLD BY TRANSFERRING THE SHARES IN THE NAME OF SOME OTHER PERSONS. IT IS APPARENT THAT EVEN AFTER SALE OF THESE COMPANIES THE BANK ACCOUNT IN THE NAME OF THOSE COMPANIES WERE KEPT BY THE ENTRY OPERATORS IN CONTROL WITH THEM AND FROM THE SAME ACCOUNT THE ACCOMMODATION ENTRIES ARE PROVIDED. THE INCOME TAX DEPARTMENT WAS ALWAYS PROVIDED WITH COMPLETE INFORMATION ABOUT THESE LOANS OR SHARE CAPITAL STATING THE NAME, ADDRESS, PERMANENT ACCOUNT NUMBER AND CONFIRMATION OF THE LENDER ON THE LETTERHEAD OF THESE COMPANIES . INCOME TAX RETURN COPIES ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 21 WERE ALSO PROVIDED TO GIVE THE COLOR OF ENTRIES FROM RECORDED TRANSACTION IN THE BOOKS OF ENTRY PROVIDER. BUT THE ENTRIES ARE NEVER RECORDED IN THE BOOKS OF ACCOU NTS. THEREFORE MOST OF THE TIMES THESE ENTRIES HAVE GONE UNTAXED EITHER IN THE HANDS OF THE BENEFICIARY OR IN THE HANDS OF THE ENTRY OPERATORS. THE ABOVE MODUS OPERANDI OF THE ENTRY OPERATORS SHOWS THAT AT WHAT LEVEL THE ENQUIRY SHOULD HAVE BEEN CONDUCTED BY THE ASSESSING OFFICER, INVESTIGATION WING OF THE INCOME TAX DEPARTMENT AS WELL AS THE ADJUDICATING/APPELLATE AUTHORITIES. IT IS PAINFUL THAT IT HAS NOT BEEN DONE. 38. WE ARE ALSO OF THE CONSIDERED OPINION THAT WHEN THE ENTRY OPERATOR HAS GIVEN A STATEMENT T HAT THE SHARE CAPITAL OR THE LOAN PROVIDED BY HIM TO THE BENEFICIARY IS NOT HIS MONEY OR HE DENIES THE OWNERSHIP OF THAT ASSET, THE IMMEDIATE STEPS ARE REQUIRED TO BE TAKEN WITH RESPECT TO SUCH SHAREHOLDING IN THE BENEFICIARY COMPANY OR LOANS OUTSTANDING IN THOSE BENEFICIARY COMPANY FOR WHICH ADEQUATE LAWS ARE BEEN ENACTED , SUCH AS THE PROHIBITION OF BENAMI PROPERTY TRANSACTION ACT, 1988. . 39. IT IS RATHER UNUSUAL THAT ASSESSEE THOUGH CLAIMING TO HAVE BEEN CHEATED BY PRADEEP JINDAL HAS NEITHER MADE ANY COMPLAINT AGAINST HIM OR THE BANKER BUT HAS CONSTANTLY PLEADED BEFORE THE AUTHORITIES THAT THE BANK ACCOUNT HAS BEEN OPENED BY SH. PRADEEP JINDA L AND ALSO OPERATED BY HIM WITHOUT THE KNOWLEDGE OF THE DIRECTORS AS WELL AS THE SHAREHOLDERS. FIRSTLY , THE BANK ACCOUNT OF AN ASSESSEE COMPANY CAN BE OPENED ONLY WITH ALL THE SIGNATURES OF THE DIRECTORS OF THE COMPANY, INSTRUCTIONS OF OPERATING SUCH BANK ACCOUNT SUPPORTED BY THE RESOLUTION OF THE BOARD OF DIRECTORS, CERTIFIED COPY OF WHICH IS PROVIDED TO THE BANKER. ON SUCH RESOLUTION, THE COMMON SEAL OF THE COMPANY IS REQUIRED TO BE AFFIXED. ALONG WITH THESE THE PERMANENT ACCOUNT CARD OF THE ASSESSEE AS WELL AS THE COPY OF THE MEMORANDUM AND ARTICLES ARE REQUIRED TO BE PROVIDED. AFTER VERIFYING ALL THESE DETAILS THE BANK ACCOUNT OF THE ASSESSEE IS OP ENED . DURING THE COURSE OF HEARING THE LD AR WAS ASKED TO PROVIDE THE COPY OF THE ACCOUNT OPENING FORM FROM THE BANKERS ALONG WITH ALL THE INSTRUCTSIONS WHICH WAS DENIED AND CONTRARY TO THAT A DECISION WAS ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 22 CITED REPORTED AT 50 ITD 1 (ALLAHABAD) (TM) TO STATE THAT WHEREIN ANY MATERIAL BROUGHT ON RECORD OF THE REVENUE AUTHORITIES THE VERSION OF THE ASSESSEE HAS TO BE ACCEPTED. THE ABOVE DECISION WAS CAREFULLY PERUSED AND THE ISSUE THEREIN WAS ON ACCOUNT OF ESTIMATE OF HOUSEHOLD EXPENDITURE INCURRED BY THE ASSESSEE THE LD ASSESSING OFFICER WITHOUT BRINGING ANY MATERIAL ON RECORD ENHANCED THE HOUSEHOLD EXPENDITURE IN CASE OF ASSESSEE AND MADE THE ADDITION. IN THE PRESENT CASE WHEN ASSESSEE SAYS THAT THE BANK ACCOUNT DOES NOT BELONG TO THE COMPANY THE HIGHER ONUS LIES ON THE ASSESSEE TO SHOW THAT ASSESSEE HAS NOT OPENED ANY BANK ACCOUNT. THIS CAN BE PROVED ONLY BY OB TAINING THE COPY OF ACCOUNT OPENING FORM AND COMPLETE DETAILS SUBMITTED TO THE BANKER. THE ASSESSEE DOES NOT WANT TO MAKE ANY EFFORT TO BRING THAT MATERIAL ON RECORD. IN FACT ASSESSEE ALSO DOES NOT DENY THAT MR. PRADEEP JINDAL WAS THE DIRECTOR OF THE COMPA NY. IT IS ALSO NOT MENTIONED BY THE ASSESSEE THAT HOW ASSESSEE HAD ENTERED INTO THE COMMERCIAL DEALING WITH THAT GENTLEMAN BY PURCHASING THE SHARES OF THE COMPANY AS WELL AS TAKING OVER THE COMPANY OWNED BY THE GENTLEMAN THEREFORE IT IS APPARENT THAT ASSES SEE/DIRECTORS KNOW MR PRADEEP JINDAL FURTHER, EVEN IF THE VERSION OF THE ASSESSEE COMPANY IS BELIEVED SINCE 2007 TO 2018 THE ASSESSEE HAS NOT TAKEN ANY STEPS AGAINST MR. PRADEEP JINDAL OR THE BANK. SUCH INACTIVENESS ON THE PART OF THE ASSESSEE ALSO SPEAKS LOUD. FURTHER, REGARDING THE ISSUE OF SUMMONS U/S 131 TO MR. PRADEEP JINDAL AS WELL AS HIS CROSS EXAMINATION PLEAS ALSO FAILS FOR THE SIMPLE REASON THAT IN THE PRESENT CASE A COMPANY IS ASKING THE CROSS EXAMINATION ONE OF ITS OWN DIRECTOR WHEN IT SHOULD H AVE PRODUCED SUCH DIRECTOR ON ITS OWN BEFORE THE ASSESSING OFFICER. THEREFORE , INSTEAD OF DISCHARGING ITS OWN ONUS THE ASSESSEE IS THROWING ONUS BACK TO THE LD ASSESSING OFFICER WITHOUT ANY COGENT REASON AND FOR ITS OWN FAILURE TO MAKE PROPER DUE DILIGENCE . GENERALLY AS THE MONEY HAS BEEN DEPOSITED IN THE BANK ACCOUNT WHICH IS NAMED IN THE NAME OF THE ABOVE ASSESSEE COMPANY , IF ASSESSEE FAILS TO OFFER PROPER EXPLANATION OF THE SAME OR PROVES THAT THIS ACCOUNT DOES NOT BELONG TO THE ASSESSEE BUT TO SOMEBODY ELSE OR ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 23 SOMEBODY ELSE HAS CHEATED THE ASSESSEE COMPANY, IT IS TAXED IN THE HANDS OF THE COMPANY. MERELY MAKING THE STAT EMENT WITHOUT MAKING AN Y CONCRETE EFFORT OF PROVING THAT THERE IS A FRAUD COMMITTED ON THE ASSESSEE , IT CANNOT ESCAPE THE LIABILITY OF THE TAXATION. FURTHERMORE TAX LIABILITY CAN ALSO NOT BE FASTENED UPON THE ASSESSEE WITHOUT THERE BEING A REAL INCOME IN THE HANDS OF THE ASSESSEE. THE LD. ASSESSING OFFICER AS WELL AS THE LD. CIT APPEAL HAS MADE THE ADDITION, DELETED THE ADDITION, OR CONFIRMED IT WITHOUT PROPERLY VERIFYING THE FACTS OF THE CASE . FOR ASSESSMENT YEAR 2001 0 2 THE LD. CIT APPEAL HAS APPLIED THE PEAK CREDIT THEORY AND DELETED THE MAJOR ADDITION. THE ABOVE VIEW IS NOT IN CONSONANCE WITH THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT VERSUS DK GARG IN 84 TAXMAN.COM 257 (DEL). THEREFORE SUCH VIEW CANNOT BE UPHELD. IN VIEW OF THE FACT S AND CIRCUMSTANCES OF THE CASE, ALL THESE APPEALS ARE SET ASIDE BACK TO THE FILE OF THE LD. ASSESSING OFFICER WITH A DIRECTION TO THE ASSESSEE TO FIRST PROVE BEFORE THE LD. ASSESSING OFFICER THAT THERE IS A CHEATING ON THE ASSESSEE BY SH. PRADEEP JINDAL AND THE BANKERS. THE ASSESSEE ALSO IS DIRECTED TO PRODUCE THE MINUTES BOOK OF THE COMPANY TO SHOW THE RESOLUTION OF THAT PARTICULAR DATE THAT IT DOES NOT EXIST IN THE MINUTES BOOK. UNLESS THE ASSESSEE COMES OUT WITH THE CLEAN HANDS BEFORE THE LD. ASSESSING OFFICER IT CANNOT ESCAPE THE TAXATION OF THE WHOLE AMOUNT. THEREAFTER THE LD. ASSESSING OFFICER IS DIRECTED TO MAKE COMPLETE EXAMINATION OF THE BANK ACCOUNTS BY OBTAINING NECESSARY INFORMATION FROM THE BANKERS BY ISSUE OF SUMMONS UNDER SECTION 131 OF THE INCOME TAX ACT AND IDENTIFY THE BENEFICIARIES WITH PROPER DOCUMENTATION AND EVIDENCES AND THEY MAY BE TAXED ON THE ABOVE SUM BY APPLICATION OF THE PROVISIONS OF SECTION 150 (1) OF THE ACT, IF POSSIBLE . THE ASSESSING OFFICER MAY ALSO TAKE INTO CONSIDERATION THE APPLICABILITY OF PROHIBITION OF BENAMI PROPERTY TRANSACTION ACT, 1988 ON SUCH TRANSACTIONS AND MAKE NECESSARY EFFORTS TO PENALISE THE ENTRY OPERATOR, THE BENEFICIARIES AND THE BANKERS, IF FOUND G UILTY. 40. IN THE RESULT WE SET ASIDE ALL THESE 5 APPEALS BACK TO THE FILE OF THE LD. ASSESSING OFFICER TO CARRY OUT NECESSARY INQUIRIES AS DIRECTED AND THEN ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 24 TO DECIDE ABOUT THE TAXABILITY OF THE SUM INVOLVED IN THE BANK ACCOUNT OF THE ASSESSEE WITH STATE BAN K OF INDIA OPENED AND OPERATED BY SH. PRADEEP JINDAL IN THE NAME OF THE ASSESSEE COMPANY. THEREAFTER THE LD. AO MAY DECIDE ABOUT THE TAXABILITY OF THE COMMISSION INCOME ON SUCH ACCOMMODATION ENTRIES. 41. IN THE RESULT ALL THE 5 APPEALS OF THE ASSESSEE AND REVE NUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05 / 0 2 / 2018 . - S D / - - S D / - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05 / 0 2 / 2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI ITO VS. PRECISION AGENCIES PVT. LTD ITA NO. 1814, 1813, 2116, 2115, 07/DEL/2013 ASSESSMENT YEAR: 2000 - 01 TO 2002 - 03) PAGE | 25 DATE 1. DRAFT DICTATED ON PS 2. DRAFT PLACED BEFORE AUTHOR PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.