Appeal details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 6904 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-01-2017
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
SMC 1
Next Hearing Date
08-12-2016
Assessment Year
2004-2005
Appeal Filed On
31-03-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-1 NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-183 4/DEL/2015 (ASSESSMENT YEAR-20 04-05) ESPIRIT FINCO P VT.LTD., 56, KAPIL VIHAR, PITAMPURA, NEW DELHI-110034. PAN-AAACE9951B (APPELLANT) VS ITO, WARD-11(2), NEW DELHI. (RESPONDENT) APPELLANT BY SH. VED JAIN, ADV. RESPONDENT BY SH.ANIL K. SHARMA, SR.DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 21.01.2015 OF CIT(A)-3, DELHI PE RTAINING TO 2004-05 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [C IT(A)] IS BAD, BOTH IN THE EYE OF LAW AND ON THE FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN REJECTING THE C ONTENTION OF THE ASSESSEE THAT THE INITIATION OF THE PROCEEDINGS UNDER SECTIO N 147, READ WITH SECTION 148, IS BAD AND LIABLE TO BE QUASHED AS THE CONDITI ON AND PROCEDURE PRESCRIBED UNDER THE STATUTE HAVE NOT BEEN SATISFIE D AND COMPLIED WITH. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CON TENTION OF THE ASSESSEE THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE LEARNED A.O. ARE BAD IN THE EYE OF LAW AS THE REASONS RECORDED FOR THE ISSU E OF NOTICE UNDER SECTION 148 ARE BAD IN THE EYE OF LAW AND ARE VAGUE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE AD DITION OF RS.20,50,000/- MADE BY THE AO ON ACCOUNT OF SHARE CAPITAL MONEY UN DER SECTION 68 OF THE ACT. 5(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ABOVE AD DITION REJECTING THE EXPLANATION AND EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE TO PROVE THE DATE OF HEARING 08.12.2016 DATE OF PRONOUNCEMENT 27.01.2017 I.T.A .NO.-1834/DEL/2015 PAGE 2 OF 19 IDENTITY, CREDITWORTHINESS OF THE SHAREHOLDER AND G ENUINENESS OF THE TRANSACTION. (II) THAT THE ADDITION HAD BEEN MADE WITHOUT P OINTING OUT ANY DEFECT OR IRREGULARITY IN THE EVIDENCES FILED BY THE ASSESSEE . 6. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE SA ID ADDITION DESPITE THE FACT THAT THE SAME HAS BEEN MADE ON THE BASIS OF MA TERIAL AND EVIDENCES COLLECTED AT THE BACK OF THE ASSESSEE WITHOUT GIVIN G IT AN OPPORTUNITY TO REBUT THE SAME IN CLEAR VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE AD DITION DESPITE THE SAME BEING MADE ON THE BASIS OF STATEMENTS OF SOME PERSO N WITHOUT GIVING ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE AND IN CLE AR VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE AD DITION REJECTING THE CONTENTION OF THE ASSESSEE THAT THE NOTICES UNDER S ECTION 133(6) TO THE SHAREHOLDERS HAVING GOT REPLIED DIRECTLY TO THE A.O ., NO ADVERSE INFERENCE AGAINST THE ASSESSEE CAN BE DRAWN. 9. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE DECLARED A LOSS INCOME OF RS.(-)2,17,650/- ON 01.11.2004. THE SAID RETURN W AS PROCESSED U/S 143(1) ON 13.04.2005. THEREAFTER, BY ISSUANCE OF NOTICE U/S 148 DATED 16.03.2011 THE CASE WAS RE-OPENED AND NOTICES U/S 143(2)/142(1) ETC. WE RE ISSUED LEADING TO THE PASSING OF THE ORDER DATED 28.11.2011 U/S 143(3)/14 7. THE AO IN THE AFORE-SAID ORDER TOOK NOTE OF THE FACT THAT THE ASSESSEE COMPA NY IN THE YEAR UNDER CONSIDERATION WAS ENGAGED IN THE BUSINESS OF MARKET FINANCIAL PRO DUCTS LIKE CREDIT CARDS, PERSONAL LOANS, INSURANCE POLICIES, CAR LOAN S ETC. OF STANDARD CHARTERED BANK AND EARNED COMMISSION THEREON. THE ASSESSMENT WAS CONCLUDED AT AN INCOME OF RS.18,32,350/- BY THE AO AS A RESULT OF THE ADDITIO N OF RS.20,50,000/-. 2.1. THE REOPENING WAS MADE IN THE BACKGROUND OF AN D BASED ON THE INFORMATION RECEIVED BY THE AO FROM THE INVESTIGATION WING. TH E AO REQUIRED THE ASSESSEE TO EXPLAIN THE DEPOSITS AND REJECTING THE EXPLANATION OFFERED CONCLUDED THAT THE ASSESSEE WAS A RECIPIENT OF ACCOMMODATION ENTRIES F ROM TAINTED COMPANIES. THE I.T.A .NO.-1834/DEL/2015 PAGE 3 OF 19 ISSUE TRAVELLED IN APPEAL BEFORE THE CIT(A) WHEREIN THE ASSESSEE UNSUCCESSFULLY CHALLENGED THE ORDER OF THE AO ON JURISDICTION AS W ELL AS ON MERITS. PURSUANT TO THE DISMISSAL OF ITS APPEAL BY THE CIT(A), THE PRES ENT APPEAL HAS BEEN FILED BY THE ASSESSEE. 3. ADDRESSING THE GROUNDS RAISED AND RELYING UPON T HE WRITTEN SYNOPSIS FILED, THE LD.AR INVITING ATTENTION TO THE RECORD SUBMITTE D THAT ALL THE EVIDENCES IN SUPPORT OF THE SHARE CAPITAL RECEIVED FROM THE FOLL OWING SIX PARTIES HAVE BEEN MADE AVAILABLE TO THE AO IN THE RE-ASSESSMENT PROCE EDINGS. CONSIDERING THE EVIDENCES AND THE FACTS THE ADDITION IT WAS SUBMITT ED COULD NOT HAVE BEEN MADE NOR SUSTAINED. ADDRESSING THE FACTS, THE LD.AR INV ITED ATTENTION TO THE ASSESSMENT ORDER WHEREIN THE AO HAS CONCLUDED THAT THE ASSESSEE HAS RECEIVED ACCOMMODATION ENTRIES FROM THE FOLLOWING PARTIES:- DATE ON WHICH ENTRY TAKEN NAME OF THE A/C HOLDER OF ENTRY GIVING ACCOUNT BANK FROM WHICH ENTRY GIVEN BRANCH OF ENTRY GIVING BANK A/C NO. OF ENTRY GIVING ACCOUNT INSTRUMENT NO BY WHICH ENTRY TAKEN VALUE OF ENTRY TAKEN 21.10.03 TECHNO COM ASSOCIATES PVT.LTD. SBBJ NEW ROHTAK ROAD 24589 5,00,000 22.01.04 VIRDI TRAVEL PVT.LTD. JAI LAXMI COOP BANK FATEHPURI 3472 385329 3,00,000 22.01.04 LOKESH TOOLS & TRADING PVT.LTD. JAI LAXMI COOP BANK FATEHPURI 3568 405868 2,50,000 22.01.04 SURAJ CYCLE MART PVT.LTD. JAI LAXMI COOP BANK FATEHPURI 3450 517394 2,50,000 06.02.04 NATRAJ COMMUNICATION PVT.LTD. JAI LAXMI COOP BANK FATEHPURI 3033 257445 2,50,000 05.11.03 V R TRADERS PVT.LTD. SBBJ NEW ROHTAK ROAD 24781 5,00,000 TOTAL 20,50,000 3.1. COPY OF THE REPLY DATED 16.11.2011 TO THE AO I T WAS SUBMITTED IS PLACED AT PAGES 33 TO 187 OF THE PAPER BOOK. INVITING ATTENT ION TO THE SAME, IT WAS I.T.A .NO.-1834/DEL/2015 PAGE 4 OF 19 SUBMITTED THAT THE DETAILED EVIDENCES AVAILABLE ON RECORD HAD BEEN IGNORED BY THE AO. AS A RESULT THEREOF, THE ASSESSEE HAD TO COME IN APPEAL BEFORE THE CIT(A). IT WAS SUBMITTED THAT NO ADDITIONAL EVIDENCES WERE FIL ED BY THE ASSESSEE BEFORE THE CIT(A) AND IN ORDER TO CARRY OUT THE VERIFICATION O F THE EVIDENCES WHICH ALREADY STOOD FILED BY THE ASSESSEE IN THE ASSESSMENT PROCE EDINGS THE CIT(A) DIRECTED THE AO TO CARRY OUT VERIFICATION IN RESPECT OF ALL THES E SIX SHAREHOLDERS. 3.2. AS A RESULT OF THIS DIRECTION, IT WAS SUBMITTE D THE AO IN THE REMAND PROCEEDINGS ISSUED NOTICES U/S 133(6) TO ALL THESE SIX PARTIES. SERVICE IT WAS SUBMITTED HAD BEEN COMPLETED ON ALL THE SIX PARTIES . THE SAID FACT IT WAS SUBMITTED PROVED THE FACT THAT THEY WERE IN EXISTEN CE. REPLY ADMITTEDLY WAS ON RECORD FROM FOUR PARTIES AS THEY HAD REPLIED TO THE AO ALONGWITH ALL THE NECESSARY DETAILS. COPY OF THESE EVIDENCES, IT WAS SUBMITTED ARE AVAILABLE AT PAPER BOOK PAGES 208 TO 351 SPECIFIC PAGES 208, 236, 282 & 329 . THE FACT THAT 4 PARTIES REPLIED IT WAS SUBMITTED IS EVIDENT FROM THE REMAND REPORT DATED 10.02.2014 OF THE AO ITSELF. COPY OF THIS, IT WAS SUBMITTED IS AV AILABLE AT PAPER BOOK PAGES 354 TO 357. REFERRING TO THE SAME, IT WAS SUBMITTED TH E AO HAS ADMITTED THAT FOLLOWING THE DIRECTIONS OF THE CIT(A), NOTICES U/S 133(6) WERE ISSUED TO ALL THE SIX COMPANIES ON 08.01.2013 AND INITIALLY NO REPLY WAS RECEIVED FROM THEM BUT LATER ON REPLY WAS RECEIVED FROM 4 PARTIES. 3.3. REFERRING TO THIS FACTUAL FINDING, IT WAS SUBM ITTED THE CIT(A) HAS NOT ONLY FAILED TO NOTE THE IMPORT AND SIGNIFICANCE OF THIS FACT AND EVIDENCE, BUT HAS ALSO IGNORING THE FACTS AND WITHOUT ADDRESSING THIS ASPE CT OR THE FACTS ON RECORD HAS UPHELD THE ADDITIONS MAKING INHERENTLY AND PATENTLY ON INCORRECT FACTUAL FINDINGS. I.T.A .NO.-1834/DEL/2015 PAGE 5 OF 19 3.4. REITERATING THE FACTS, IT WAS SUBMITTED THAT IN THE INVESTIGATION CARRIED OUT ON THE DIRECTIONS OF THE CIT(A), THE AO IN THE REMA ND PROCEEDINGS ISSUED NOTICES U/S 133(6) TO ALL THE SIX PARTIES WHICH WERE DULY SERVED UPON THEM AND THERE IS NO ALLEGATION ON RECORD THAT ANY NOTICE WAS RETURNE D UNSERVED. IT WAS REITERATED THAT REPLIES HAVE BEEN RECEIVED FROM FOUR SHAREHOLD ERS WHICH FACTUAL POSITION HAS BEEN CONFIRMED BY THE AO HIMSELF IN THE REMAND REPO RT DATED 10.02.2014. THE RELEVANT EXTRACT OF PAGE 356 WHICH IS A COPY OF THE REMAND REPORT WAS HEAVILY RELIED UPON. THE SAME IS REPRODUCED HEREUNDER FOR READY-REFERENCE:- AS PER THE DIRECTION NOTICE U/S 133(6) WERE ISSUED TO THE ABOVE SIX COMPANIES ON 08.01.2013 FOR 22.01.2013. BUT NO REP LY WAS RECEIVED ON 22.01.2013. BUT LATER ON, ON RECEIVING THE REMINDE R LETTER NO.F.NO.CIT(A)- XIII/2013-14/223 DATED 13.01.2014 LETTER FROM THIS OFFICE NO.612 DATED 20.01.2014 WAS ISSUED TO THE ASSESSEE FOR 28.01.201 4 WHEREIN HE WAS INFORMED OF THE ABOVE FACTS. MEANWHILE ON 27.28-01 -2014 THE REPLY FROM FOUR CREDITORS OUT OF SIX HAS FILED THE REPLY IN RESPONSE TO NOTICE U/S 133(6) WHICH ARE GIVEN AS BELOW:- 1. TECHNO COM ASSOCIATES PVT.LTD. 205, DELHI CHAMBE RS, DELHI GATE, DELHI-02. 2. VIRDI TRAVELS PVT.LTD. 2250, NAYA BAZAR, DELHI-0 6. 3. V.R.TRADERS PVT.LTD. 1930, GALI DURGA MANDIR, LA L KUAN, DELHI-06. 4. NATRAJ COMMUNICATION PVT.LTD. B-2, KIRAN GARDEN, UTTAM NAGAR, NEW DELHI-59. THE COPY OF THE SAME ARE ENCLOSED HEREWITH FOR NECE SSARY ACTION AT OUR END. HOWEVER, DURING THE TIME OF ASSESSMENT ALSO NOTICE U/S 133(6 ) WERE ISSUED ON 11.10.2011 FOR 17.10.2011 TO ALL THE SIX CONCERN BUT NO REPLY IS FILED ON THE RECORD. (EMPHASIS PROVIDED) 3.5. RELYING UPON THE ABOVE EXTRACT OF THE REMAND R EPORT, IT WAS SUBMITTED THAT IT CLEARLY SHOWS THAT ON BOTH THE OCCASIONS I.E. DU RING THE REMAND PROCEEDINGS AS WELL AS THE ASSESSMENT PROCEEDINGS NOTICES U/S 133( 6) WERE ISSUED AND THERE IS NO ALLEGATION OF THEIR RETURNING UNSERVED. THESE FACT S IT WAS SUBMITTED SUFFICIENTLY PROVE THAT THE PARTIES WERE IN EXISTENCE AND WERE N OT FICTITIOUS OR BOGUS CONCERNS. IT WAS SUBMITTED THAT IN CASE THE DEPARTMENT WANTS TO CLAIM THAT THESE WERE I.T.A .NO.-1834/DEL/2015 PAGE 6 OF 19 BOGUS CONCERNS THEN THE DEPARTMENT SHOULD PLACE EVI DENCE IN SUPPORT OF THE SUSPICION ON THE BASIS OF WHICH ASSESSMENT HAS BEEN OPENED. IT WAS SUBMITTED THAT EVEN AFTER RE-OPENING THE ASSESSMENT THE DEPAR TMENT STILL HAS FAILED TO PLACE ANY EVIDENCE AND IS STILL FORCING THE ASSESSEE TO C ONTINUE LITIGATION BASED ON THE SUSPICIONS HARBOURED BY THE REVENUE. 3.6. ADDRESSING THE LACK OF REPLY BY ALL THE PARTIE S AND ONLY BY FOUR PARTIES, IT WAS SUBMITTED BY THE LD.AR THAT IF THE PARTIES DO N OT CARE TO REPLY TO THE AO, IT IS NOT POSSIBLE FOR THE ASSESSEE TO FORCE THEM. HOWEV ER, THERE WAS NOTHING TO STOP THE AO TO CARRY ON THE INVESTIGATION TO ITS LOGICAL CONCLUSION AND IT IS NOT FOR THE ASSESSEE TO INSIST WITH THE TAX AUTHORITIES THAT TH E ATTENDANCE OF THE PARTIES BE ENFORCED. 4. ADDRESSING THE JURISDICTIONAL ISSUES ADDRESSED I N GROUND NOS.2 & 3 IN THE PRESENT APPEAL, ATTENTION WAS INVITED TO COPY OF TH E REASONS RECORDED WHICH IS PLACED AT PAPER BOOK PAGE 17. ADDRESSING THE SAME, IT WAS SUBMITTED THAT NO INDEPENDENT BELIEF CAN BE SAID TO HAVE BEEN FORMED BY THE AO ON THE BASIS OF THE NOTINGS IN THE REASONS RECORDED. IT WAS SUBMITTED THAT THE COURTS ARE CLEAR THE RE-OPENING SHOULD BE BASED ON THE INDEPENDENT REASO NING OF THE AO AND THE AO ALONE AND THIS FORMATION OF BELIEF IT WAS SUBMITTED SHOULD BE EVIDENT FROM THE REASONS RECORDED ITSELF. IT WAS RE-ITERATED THAT T HE ISSUE IS WELL-SETTLED AND EVEN THE COURTS CANNOT SUBSTITUTE THE REASON RECORDED BY ITS OWN REASONS. IN THE FACTS OF THE PRESENT CASE, IT WAS SUBMITTED IT WOULD BE E VIDENT THAT THERE IS NO INDEPENDENT BELIEF OF THE AO. ACCORDINGLY, IT WAS SUBMITTED THAT SINCE THE REQUISITE CRITERIA ITSELF IS NOT FULFILLED NOR IS T HERE ANY NEXUS OF THE REASONS RECORDED WITH THE FORMATION OF ANY BELIEF THAT INCO ME HAS ESCAPED ASSESSMENT, THE I.T.A .NO.-1834/DEL/2015 PAGE 7 OF 19 RE-OPENING IN THE CIRCUMSTANCES IT WAS SUBMITTED IS BAD IN LAW. THE POWER IT WAS SUBMITTED HAS BEEN MECHANICALLY EXERCISED BY THE AO BASED ONLY ON THE REPORT RECEIVED FROM INVESTIGATION WING. THE INFORMATION FORWARDED BY THE INVESTIGATION WING, IT WAS SUBMITTED HAS BEEN BLINDLY ACCEPTED BY THE AO AND NO REFERENCE TO ANY INDEPENDENT EXERCISE HAS BEEN MADE WHICH MAY IN DICATE THAT THERE IS ANY INDEPENDENT APPLICATION OF MIND OF THE AO. ON A RE ADING OF THE REASONS, IT WAS SUBMITTED THAT IT IS NOT POSSIBLE TO UNDERSTAND HOW THE AO TERMED THE RECEIPT OF MONEY AS BOGUS ACCOMMODATION ENTRIES AS THERE IS NO INVESTIGATION CARRIED OUT BY THE AO, NO WITNESSES HAS BEEN EXAMINED BY HIM WHO I MPLICATED THE ASSESSEE. IT WAS ARGUED THAT SOLELY ON THE BASIS OF INFORMATION OF THE INVESTIGATION WING AND RELYING UPON SOME STATEMENTS RECORDED IN SOME OTHER CASE BY THE INVESTIGATION WING THE AO HAS BLINDLY ACCEPTED THEM AS GOSPEL TR UTH. IT WAS HIS SUBMISSION THAT THE LAW POSTULATES THAT IT IS THE AO WHO IS TO FORM A BELIEF AND NOT THE DIT (INVESTIGATION). THE REASONS RECORDED IT WAS SUBMI TTED NEITHER SHOW ANY APPLICATION OF MIND NOR DO THEY SHOW HOW ANY INDEP ENDENT BELIEF CAN BE SAID TO HAVE BEEN ARRIVED AT. ADDRESSING THE SAME, IT WAS A RGUED THERE IS NO FINDING BY THE AO THAT THE ASSESSEE HAS FAILED TO DISCLOSE TRU LY AND FULLY MATERIAL FACTS THAT ANY INCOME HAS ESCAPED ASSESSMENT. 4.1. THUS, RELYING UPON THE DECISION OF THE HONBLE HIGH COURT IN THE CASE OF CIT VS INDEPENDENT MEDIA PVT.LTD. DATED 19.11.2015 IN I TA NO.108/2015 AND PR.CIT VS G. & G. PHARMA INDIA LTD. [2016] 384 ITR 147 (DEL.) AND ORDER DATED 22.4.2016 IN ACIT VS GULSHAN INTERNATIONAL PVT.LTD. IN ITA NO.115/DEL/20 12 [ITAT, DEL.]; M/S RMG POLYVINYL (I) LTD. VS DCIT [I TA NO.1596/DEL/2014 DATED 12.04.2016]; SABHARWAL PROPERTIES INDUSTRIES PVT. L TD. VS ITO [2016] 382 ITR 547 I.T.A .NO.-1834/DEL/2015 PAGE 8 OF 19 (DEL.); ITO VS M/S JAMES CAPITAL & FINANCE PVT. LTD . [ITA NO.278/DEL2010 DATED 10.05.2016]; GENIUS ELECTRICALS & ELECTRONICS PVT.L TD. VS ITO [ITA NO.3623/DEL/2014 DATED 22.04.2016]; CIT VS SFIL STO CKBROKING CO. [2010] 325 ITR 285 (DEL.); SARTHAK SECURITIES COMPANY PVT.LTD. VS ITO [2009] 329 ITR 110; AND SIGNATURE HOTELS (P.) LTD. VS ITO [2011] 338 ITR 51 (DEL.), IT WAS SUBMITTED THAT THE ASSESSMENT DESERVES TO BE QUASHED. 5. ON MERITS, IT WAS AGAIN SUBMITTED THAT THE ASSES SEE HAS BROUGHT ON RECORD THAT THE EVIDENCES FROM EACH OF THE SHAREHOLDERS W HICH INCLUDED CONFIRMATIONS, COPY OF ITR, BALANCE SHEET, ASSESSMENT ORDER ETC. H AS BEEN MADE AVAILABLE AND THE AO HAS NOT CONTROVERTED THESE FACTS EITHER AT T HE ASSESSMENT ORDER STAGE NOR IN THE REMAND PROCEEDINGS. THE ADDITIONS IN THE C IRCUMSTANCES HAS BEEN MADE ON CONJECTURES AND SURMISES IGNORING THE FACTS AND EVIDENCES ON RECORD. 5.1. ADDRESSING THE REPLIES SUPPORTED BY EVIDENCES ON RECORD, IT WAS SUBMITTED THAT THE AO HAS NOT CONTROVERTED THE FACTS THEREBY LEADING TO THE CONCLUSION THAT HE DID NOT HAVE ANY DOUBTS AS HE HAS NOT GIVEN ANY ADVERSE FINDING. NO INFIRMITY IN THE CONFIRMATION OF REPLIES IT WAS SUBMITTED HA D BEEN POINTED OUT BY THE AO. IT WAS ARGUED THAT IT IS NOT EVEN THE CASE OF THE AO T HAT THE REMAINING TWO SHAREHOLDERS HAVE NOT RECEIVED THE NOTICE. THUS ME RELY BECAUSE THEY DO NOT CHOSE TO REPLY AN ADVERSE CONCLUSION HAS BEEN DRAWN AGAINST THE ASSESSEE WHICH IS AGAINST ALL ACCEPTED PRINCIPLES OF LAW. THE SAID PROPOSITION IT WAS SUBMITTED IS SUPPORTED BY THE DECISION OF CIT, ORISSA VS ORISSA CORPORATION PVT.LTD. [1986] 159 ITR 78 (SC). 5.2. IT WAS ALSO SUBMITTED THAT DESPITE HAVING THE REMAND REPORT BEFORE HIM THE CIT(A) ALSO PROCEEDED TO CONCLUDE THE ISSUE IN HAST E AGAINST THE ASSESSEE REFERRING I.T.A .NO.-1834/DEL/2015 PAGE 9 OF 19 TO FACTS WHICH ARE NOT RELATABLE TO THE PRESENT CAS E. ACCORDINGLY, IT WAS ARGUED THAT THE IMPUGNED ORDER ALSO FORTIFIES THE FACT THA T THE ACTION HAS BEEN SUSTAINED BY UPHOLDING THE JURISDICTION AND THE ADDITION WITH OUT ANY APPLICATION OF MIND EVEN AT THE STAGE OF THE FIRST APPELLATE AUTHORITY. IN SUPPORT OF THE SAID ARGUMENT, ATTENTION WAS INVITED TO THE FOLLOWING F INDING OF FACT RECORDED AT PAGE 11 OF THE IMPUGNED ORDER:- THE ASSESSING OFFICER ON RECEIPT OF THE AFFIDAVITS FROM THE ASSESSEE CALLED FOR THE INFORMATION UNDER SECTION 133(6) FROM THE 6 PARTIES, WHO HAD EXECUTED THE AFFIDAVITS. THE LETTERS WERE RECEIVED BACK UNSERVED. (EMPHASIS PROVIDED) 5.3. THE SAID FINDING IT WAS SUBMITTED IS CONTRARY TO FACTS ON RECORD AS IN THE REMAND REPORT THERE IS NO ALLEGATION THAT LETTERS W ERE RECEIVED BACK UN-SERVED. THE AO ONLY NOTES THAT INITIALLY NO REPLY WAS FILED THEREAFTER REPLIES HAVE BEEN RECEIVED IN THE REMAND PROCEEDINGS FROM FOUR SHAREH OLDERS. 5.4. THE ABOVE WRONG FACTUAL RECORDING IT WAS SUBMI TTED IS AGAIN REPEATED AT PAGE 28 UN-NUMBERED PARA 4 OF THE IMPUGNED ORDER B Y THE CIT(A) WHEN HE OBSERVES:- 'NOTICES TO THE INVESTORS COULD NOT BE SERVED. THE FACT THAT THE LENDERS NAMELY MAHESH GARG AND DEEPAK GUPTA CATEGOR ICALLY STATED THAT THESE COMPANIES ARE NOT DOING ANY GENUINE BUSINESS AND ONLY PROVIDE THE ACCOMMODATION ENTRIES AND AS SUCH, ALL THE ENTRIES IN THE BOOKS WERE MERELY ACCOMMODATION ENTRIES.' (EMPHASIS PROVIDED) 5.5. THE SAID FACTUAL RECORDING IT WAS SUBMITTED IS CONTRARY TO RECORD AND SHOWS NOT ONLY NON-APPLICATION OF MIND BUT ALSO SUGGESTS THAT PROBABLY THE FACTS OF SOME OTHER CASE MAY HAVE BEEN TAKEN NOTE OF BY THE CIT(A ) WHO CONFIRMED THE ADDITION IGNORING THE FACTS OF THE PRESENT CASE WHERE NOTIC ES ON ALL THE SIX PARTIES HAD BEEN DULY SERVED AND REPLIES HAD ALSO BEEN RECEIVED IN F OUR CASES. I.T.A .NO.-1834/DEL/2015 PAGE 10 OF 19 5.6. ACCORDINGLY INVITING ATTENTION AGAIN TO THE RE MAND REPORT, IT WAS SUBMITTED THAT ONLY TWO SHAREHOLDERS DID NOT REPLY AND NO ADV ERSE CONCLUSIONS HAVE BEEN DRAWN BY THE AO. IN THESE CIRCUMSTANCES, THE FOLLO WING FINDING OF THE CIT(A) AT PAGE 28 PARA 4 THAT NOTICES TO THE INVESTOR COULD NOT BE SERVED YET AGAIN SHOWS THAT THE CONCLUSION HAS BEEN ARRIVED AT WITHO UT ANY APPLICATION OF MIND. IT WAS FURTHER SUBMITTED THAT PROBABLY THE FACT OF SOM E OTHER CASE MAY HAVE CLOUDED THE JUDGEMENT AS EVIDENTLY ALL THE SIX PARTIES WERE SERVED COPIES OF NOTICE AND REPLY HAD BEEN RECEIVED FROM FOUR OF THESE. INVITI NG ATTENTION TO PARA 5 PAGE 28 OF THE CIT(A)S ORDER WHEREIN THE CIT(A) NOTES IN PARA 5 ON PG. 28 OF HIS ORDER. THE PERUSAL OF THE BANK STATEMENTS CLEARLY ESTABLISHES THAT THESE PARTIES WERE DEPOSITING CASH IN THE BANK ACCOUNTS USED FOR PROVI DING ENTRIES. 5.7. IT WAS SUBMITTED THAT THE SAID OBSERVATION IS ALSO WRONG SINCE AS PER THE BANK STATEMENT AVAILABLE ON RECORD THERE IS NO CASH DEPOSIT. FOR THE SAID SUBMISSIONS, ATTENTION WAS INVITED TO PAGES 52, 92, 115 & 151. ACCORDINGLY IT WAS SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAV OUR OF THE ASSESSEE BY THE JURISDICTIONAL HIGH COURT IN ITS ORDER DATED 31.08. 2016 IN ITA NO.504/16 WHICH CONFIRMED THE JUDGEMENT OF THE ITAT DATED 10.02.201 6 IN ITA NO.744/DEL/2012 IN THE CASE OF ITO VS M/S SOFTLINE CREATION P.LTD. [ITA NO.744/DEL /2012 DATED 10.02.2016 ITAT DELHI]. RELIANCE WAS PLACED UPON CIT VS FAIR FINVEST LTD. [2013] 357 ITR 146 (DEL.) HONBLE JURISDICTIONAL HI GH COURT; DCIT VS M/S G.S.CONTROL I.P.LTD. [ITA NO.1560/DEL/2010 DATED 13 .03.2015]; AND JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS GOEL SONS GOLDEN E STATE P.LTD. [ITA NO.212/2012 DATED 11.04.2012]. I.T.A .NO.-1834/DEL/2015 PAGE 11 OF 19 6. THE LD. SR. DR IN REPLY ADDRESSING THE DECISION RELIED UPON BY THE LD.AR SUBMITTED THAT RELIANCE PLACED UPON THE VARIOUS DEC ISIONS OF THE ITAT OR THE HIGH COURT IS NOT OF ANY RELEVANCE IN THE FACTS OF THE P RESENT CASE AS IT IS A CASE OF A PRIVATE LIMITED COMPANY AND NOT OF A PUBLIC LIMITED COMPANY. THIS DIFFERENTIATION IT WAS SUBMITTED HAS BEEN BROUGHT O UT BY THE CIT(A) AT PAGE 30 OF HIS ORDER AND THE REVENUE WOULD WANT TO HEAVILY REL Y UPON THE SAME. THE RELEVANT EXTRACT FROM THE IMPUGNED ORDER IS REPRODUCED HEREU NDER:- IN CONTRAST TO THE ABOVE JUDGEMENTS, IN THE PRESEN T CASE, THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IN THE FACTUAL MATRIX, I HAVE HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO DISCHARGE THE INITIAL ONUS AND HAS NOT BEEN ABLE TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTION. THOUGH, IN MY CONSIDERED OPINION, NONE OF THE ABOVE JUDGEMENTS, REFERRED TO BY THE AS SESSEE RESPONDENT, ARE APPLICABLE IN THE FACTS OF THE PRESENT CASE AND IN VIEW OF THE FINDINGS RECORDED BY ME HEREINABOVE. 6.1. ON THE FACTUAL INACCURACIES IN THE IMPUGNED OR DER IN REGARD TO SERVICE OF NOTICE ON THE SIX PARTIES AND REPLIES RECEIVED FROM FOUR OF THESE AS NOTED IN THE REMAND REPORT POINTED OUT BY THE LD.AR, THE LD.SR.D R SUBMITTED THAT THE MATTER MAY BE REMANDED BACK TO THE CIT(A). 7. THE PRAYER FOR REMAND WAS OPPOSED BY THE LD.AR V EHEMENTLY WHO SUBMITTED THAT NO FRESH EVIDENCE HAS BEEN RELIED UPON BY THE ASSESSEE AND THE EVIDENCE IN SUPPORT OF ITS CLAIM WAS ALWAYS BEFORE THE AO EVEN AT THE ASSESSMENT STAGE. THUS IF THE EVIDENCE AVAILABLE IS IGNORED BY THE DEPARTM ENT AND WHEN THE ASSESSEE CHALLENGED THIS FACT BEFORE THE CIT(A) WHO INSTEAD OF ADDRESSING THE EVIDENCE ON RECORD CHOOSES TO INSTEAD DIRECT THE AO TO START Y ET ANOTHER ENQUIRY AFRESH IN A CERTAIN DIRECTION REQUIRING THE AO TO ISSUE NOTICES TO ALL THE SIX PARTIES WHICH ADMITTEDLY HAVE BEEN SERVED ON ALL THE PARTIES. TH ESE DIRECTIONS OF THE CIT(A) ADMITTEDLY WERE CARRIED OUT AND THE REPLIES FROM F OUR OUT OF THE SIX PARTIES HAVE I.T.A .NO.-1834/DEL/2015 PAGE 12 OF 19 BEEN RECEIVED ON RECORD. NOTICE TO ALL SIX PARTIES HAVE BEEN SERVED. NONE OF THE EVIDENCE AVAILABLE ON RECORD, IT WAS SUBMITTED HAS BEEN COMMENTED NEGATIVELY BY THE TAX AUTHORITIES DESPITE BEING CONSISTENTLY AVAI LABLE ON RECORD. IN THE SAID BACKGROUND THE REQUEST OF THE DEPARTMENT SIMPLY TO DENY RELIEF TO THE ASSESSEE WITHOUT FIRST NEGATIVELY COMMENTING UPON THE EVIDEN CES ALL ALONG AVAILABLE ON RECORD, IT WAS SUBMITTED SHOULD NOT BE ALLOWED. TH E EVIDENCE IT WAS SUBMITTED IS REPEATEDLY IGNORED BY THEM AS THEY CANNOT ASSAIL IT AND THEN TO SEEK A FRESH ROUND OF HEARING BY REMAND, IT WAS SUBMITTED SHOULD NOT B E PERMITTED. IT WAS SUBMITTED THAT THESE ARGUMENTS ARE DEHORSE THE FACT THAT THE IMPUGNED ORDER BRINGS OUT THE ADAMANT STAND OF THE REVENUE TO SHOW THAT ADDITION MUST BE MAINTAINED WHETHER ON CORRECT FACTS OR WRONG FACTS. IT WAS SUBMITTED THAT EVEN TODAY, THE LD.SR.DR HAS NOT CARED TO ASSAIL THE EVIDENCE AVAILABLE ON R ECORD RIGHT FROM THE ASSESSMENT STAGE IN THE PAPER BOOK AVAILABLE. IT WAS SUBMITTED THAT RELIANCE ON THE CONCLUSION DRAWN BY THE CIT(A) WHERE THE CIT(A) ADM ITTEDLY FORMED THE CONCLUSION BASED ON FACTS OF SOME OTHER CASE, CAN BE OF NO HEL P TO THE REVENUE. ATTENTION WAS INVITED TO THE FACT THAT THE ASSESSEE IS NOT A BOGUS COMPANY AND IS ENGAGED IN THE BUSINESS OF MARKET FINANCIAL PRODUCTS LIKE CRED IT CARDS, PERSONAL LOANS, INSURANCE POLICIES, CAR LOANS ETC. OF STANDARD CHAR TERED BANK AND THIS FACTUAL FINDING BY THE AO, IT WAS SUBMITTED REMAINS UNREBUT TED ON RECORD. ACCORDINGLY, IT WAS HIS PRAYER THAT THE ADDITION DESERVED TO BE DEL ETED. 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. I NOTE FROM THE RECORD THAT THE AO ADDRESS ING THE NATURE OF ASSESSEES BUSINESS HAS NOTED AS UNDER:- I.T.A .NO.-1834/DEL/2015 PAGE 13 OF 19 THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS O F MARKET FINANCIAL PRODUCTS LIKE CREDIT CARDS, PERSONAL LOANS, INSURAN CE POLICIES, CAR LOANS ETC. OF STANDARD CHARTERED BANK AND EARNED COMMISSION TH EREON. DURING THE YEAR, THE ASSESSEE HAS SHOWN TOTAL RECEIPTS OF RS.7 3,12,079/- AS COMPARED TO PRECEDING YEARS RECEIPTS OF NIL RUPEES. 8.1. IT IS SEEN THAT THE ASSESSMENT WAS RE-OPENED O N THE BASIS OF SOME INFORMATION THAT SH. MAHESH GARG, ENTRY OPERATOR HA D PROVIDED ACCOMMODATION ENTRIES TO SOME BOGUS CONCERNS. THE STATEMENT ALLE GEDLY RECORDED AND RELIED UPON WERE NOT CONFRONTED TO THE ASSESSEE. THE ASSE SSEE AS PER REPLIES ON RECORD CLAIMED THE TRANSACTION TO BE GENUINE RELYING ON EV IDENCE FILED BEFORE THE AO. HOWEVER, THE AO DESPITE NOTING IN PARA 1 OF HIS ORD ER THAT REPLIES WERE GIVEN TO THE DETAILED QUESTIONNAIRES ISSUED FROM TIME TO TIME IN RESPONSE TO WHICH THE LD.AR ATTENDED AND FILED NECESSARY DETAILS, CONSIDERED IT NECESSARY INSTEAD TO MAKE OBSERVATIONS QUA THE MODUS OPERANDI OF THE ACCOMMO DATION ENTRY PROVIDERS GENERALLY AND NOTING THAT THE ASSESSEE DID NOT FILE ANY OBJECTIONS TO REASONS RECORDED PROCEEDED TO MAKE, THE ADDITION REFERRING TO THE CHART REPRODUCED IN THE EARLIER PART OF THIS ORDER. THE ASSESSEE FILED AN A PPEAL BEFORE THE CIT(A) WHO IT IS NOTED INSTEAD OF ADDRESSING THE EVIDENCES ON RECORD DIRECTED THE AO TO FURTHER ENQUIRE IN TERMS OF HIS DIRECTION. THE RESULT OF TH E ENQUIRY IT IS FOUND REPRODUCED IN THE IMPUGNED ORDER AT PAGE 3 PARA 2 OF THIS ORDE R. THE SAID PAGE REPRODUCES THE EXTRACT OF THE ASSESSEES REPLY TO THE REMAND REPOR T WHICH IS REPRODUCED IN THE LATER PART OF THIS ORDER. A PERUSAL OF THE SAME SHO WS THAT NOTICE U/S 133(6) WAS SERVED ON ALL THE SIX CONCERNS. OUT OF THESE SIX C ONCERNS, REPLY OF FOUR WAS AVAILABLE ON RECORD. HOWEVER, WHILE CONCLUDING THE LD.CIT(A) LOOSES TRACK OF THE BASIC FACTS OF THE SPECIFIC CASE AND INSTEAD REFERS TO FACTS WHICH ARE NOT APPLICABLE TO THE CASE AT HAND TO UPHOLD THE ADDITION MADE. C ONTRADICTORY REFERENCE BRINGING I.T.A .NO.-1834/DEL/2015 PAGE 14 OF 19 OUT THE CONFUSION OF THE LD.CIT(A) HAS BEEN AMPLY B ROUGHT OUT ON RECORD BY THE LD.AR IN THE EARLIER PART OF THIS ORDER. THE ALLEG ATIONS OF FACTUAL INACCURACIES IN THE ORDER, I FIND HAVE NOT EVEN BEEN DEFENDED BY TH E LD.SR.DR WHO INSTEAD HAS REQUESTED FOR A REMAND. THUS IT IS EVIDENT THAT TH E FACTUAL CONTENTS OF THE REMAND REPORT OF THE AO AVAILABLE ON RECORD WAS ADM ITTEDLY INCORRECTLY TAKEN NOTE OF BY THE LD.CIT(A). THE FACTUAL RELIANCE ON THE REMAND REPORT BY THE ASSESSEE IS FURTHER HIGHLIGHTED FROM THE FOLLOWING SUBMISSIONS ON RECORD:- 2. THE GROUND NO. 3 HAS BEEN RAISED BY THE APPELLA NT REGARDING THE REOPENING OF THE ASSESSMENT U/S 147/148 OF THE ACT. THE SUBMISSIONS MADE BY THE APPELLANT IN THIS REGARD ARE REPRODUCED AS UNDER: 'THAT AS PER REMAND REPORT PRODUCED BY THE LD. A.O. A NOTICE U/S 133(6) WAS ISSUED TO SIX SHARE SUBSCRIBERS BY REQUIRING THE CONFIRMATION OF DETAILS OF SHARE ALLOTTED TO THEM BY THE APPELLA NT COMPANY. OUT OF SIX, ONLY FOUR SUBSCRIBERS HAS SUBMITTED THEIR DETAILS/ CONFIRMATION AS UNDER :- 1. TECHNOCOM ASSOCIATED PVT. LTD. 205, DELHI CH AMBERS, DELHI GATE. DELHI-02. 2. VIRDI TRAVELS PVT. LTD. 2250, NAYA BAZAR, DELHI-06. 3. V R TRADERS PVT. LTD. 1930, GALI DURGA MAN DIR, LAL KAUN, DELHI-06. 4. NATRAJ COMMUNICATION PVT. LTD. B-2, KIRAN GA RDEN, UTTAM NAGAR, NEW DELHI-59. HOWEVER AS PER OUR RECORD OF SUBMISSIONS, IT IS VER Y CLEAR THAT APPELLANT HAS DULY SUBMITTED THE EVIDENCES OF ALL T HE SIX SHARE SUBSCRIBERS AT THE TIME OF ASSESSMENT PROCEEDINGS B EFORE THE LD. A.O. VIDE LETTER DATED 16.11.2011 IN WHICH SAID SIX SHARE SUBSCRIBERS DETAILS IS ALSO SUBMITTED ALONGWITH FOL LOWING EVIDENCES. A PHOTOCOPY OF OUR LETTER DATED 16.11.2011 IS ENCLO SED HEREWITH ALONGWITH EVIDENCE ARE SUBMITTED. DATE ON WHICH ENTRY TAKEN NAME OF THE A/C HOLDER OF ENTRY GIVING ACCOUNT BANK FROM WHICH ENTRY IS GIVEN BRANCH OF ENTRY GIVING BANK A/C NO. OF ENTRY GIVING ACCOUNT INSTRUMENT NO.BY WHICH ENTRY TAKEN VALUE ENTRY TAKEN 21.10.03 TECHNO COM ASSOCIATES PVT.LTD. SBBJ NEW ROHTAK ROAD 24589 5,00,000 22.01.04 VIRDI TRAVELS PVT.LTD. JAI LAXMI COOP BANK FATEHPURI 3472 385329 3,00,000 22.01.04 LOKESH TOOLS & TRADING PVT. LTD. JAI LAXMI COOP BANK FATEHPURI 3568 405868 2,50,000 22.01.04 SURAJ CYCLE MARET PVT. LTD. JAI LAXMI COOP BANK FATEHPURI 3450 517394 2,50,000 06.02.04 NATRAJ COMMUNICATION PVT.LTD. JAI LAXMI COOP BANK FATEHPURI 3033 257445 2,50,000 I.T.A .NO.-1834/DEL/2015 PAGE 15 OF 19 05.11.03 V R TRADERS PVT.LTD. SBBJ NEW ROHTAK ROAD 24781 5,00,000 20,50,000 I) CONFIRMATION FROM THE SUBSCRIBERS II) BANK STATEMENTS III) SHARE CERTIFICATES COPIES IV) AUDITED BALANCE SHEET & COPY OF ACKNOWLEDGMENT OF I. TAX RETURN V) COPY OF PAN CARD VI) COPY OF MOA VIII) ITR PARTICULARS AS PER SECTION 68 THE ASSESSEE HAD TO PROVE THE IDE NTITY, CREDITWORTHINESS AND DOCUMENT EVIDENCE OF THE SUBSCRIBERS TO THE SHA RES. IN ALL RESPECTS THE APPELLANT COMPANY HAS DULY SUBMITTED THE IDENTITY, CREDITWORTHINESS, ITR PARTICULARS, MODE OF PAYMENTS WITH SHARE APPLICATIO N FORMS, SHARE CERTIFICATES, CONFIRMATIONS AND ALL OTHER EVIDENCES AT THE TIME OF HEARING BEFORE THE LD. A.O.. AT THE TIME OF ASSESSMENT PROC EEDINGS, THE APPELLANT COMPANY HAS REQUESTED FOR CROSS EXAMINATION OF THE DIRECTORS OF ABOVE MENTIONED PERSONS BUT THE LD. A.O. HAS NOT CONSIDER ED THE ABOVE REQUEST AND REASON RECORDED FOR RE-OPENING THE CASE U/S 148 BY SAVING ACCOMMODATION ENTRIES ARE INVALID AND FACTUALLY INC ORRECT. HENCE, IN THE ASSESSMENT ORDER, THE LD.AO HAS MADE THE ADDITION O F RS.20,50,000/- ARBITRARY WHICH IS BAD IN LAW AND AGAINST FACTS OF THE CASE AND WITHOUT ANY BASIS. 2). THAT LD. A.O. HAS MENTIONED IN HIS REMAND REPOR T THAT THE ASSESSEE HAS BEEN GIVEN SUFFICIENT OPPORTUNITY TO P RODUCE THE SAME AND FURTHER NEW EVIDENCES CAN NOT PRODUCED UNDER RU LE 46A OF THE INCOME TAX RULE,1962. BUT AS PER OUR RECORD THE APPELLANT HAS DULY SUBMIT TED THE REQUIRED DOCUMENTS AS STATED ABOVE OF SAID SIX SHARE SUBSCRI BERS AT THE TIME OF ASSESSMENT. THE APPELLANT COMPANY HAS NOT SUBMITTED ANY NEW EVIDENCES AT THE TIME OF HEARING OF APPEAL AS PER R ULE 46A. SO, LD. A.O. HAS WRONGLY STATED IN HIS REMAND REPORT THAT THESE ARE NEW EVIDENCES AND NOT COVERED UNDER RULE 46A. THE FACT CAN BE VERIFIED FR OM THE DEPARTMENT ASSESSMENT FILES. THEREFORE, THE APPELLANT PRAYS TO QUASH THE ILLEGAL ORDER OR SUCH OTHER ORDER MAY BE PASSED WHICH JUSTIFIED THE APPELLANT AGAINST THE ADDITIONS. RE- OPENING OF THE CASE U/S 148 IS NOT LEGALLY VALID. H ENCE, IT IS PRAYED THAT ADDITION U/S 68 OF RS.2050000/- BE DELETED OR ANY O THER ORDER MAY BE JUSTIFIED WITH APPELLANT.' (EMPHASIS PROVIDED) 8.2. ACCORDINGLY, IN THE CIRCUMSTANCES ADMITTEDLY T HE REPEATED FACTUAL INACCURACIES MADE IN THE IMPUGNED ORDER THAT NOTICE S COULD NOT BE SERVED ON THE SIX PARTIES AND REPLIES COULD NOT BE RECEIVED ARE P ATENTLY INCORRECT AND IS NOT EVEN THE CASE OF THE AO. FOR THE RECORD, THE GLARING FA CT THAT THE NOTICES WERE SERVED UPON ALL THE SIX PARTIES AND REPLIED WERE RECEIVED FROM FOUR OF THESE, IS EVIDENT I.T.A .NO.-1834/DEL/2015 PAGE 16 OF 19 FROM THE REMAND REPORT OF THE AO ITSELF (COPY OF WH ICH HAS BEEN PLACED AT PAPER BOOK PAGE 354-357). A PERUSAL OF THE SAME SHOWS TH AT THE REPLIES HAVE BEEN RECEIVED FROM FOLLOWING FOUR PARTIES:- 1. TECHNO COM ASSOCIATES PVT.LTD., 205, DELHI CHAMBERS , DELHI GATE, DELHI-02. 2. VIRDI TRAVELS PVT.LTD., 2250, NAYA BAZAR, DELHI-06. 3. V R TRADERS PVT.LTD. 1930, GALI DUREGA MANDIR, LAL KUAN, DELHI-06. 4. NATRAJ COMMUNICATION PVT.LTD., B-2, KIRAN GARDEN, U TTAM NAGAR, NEW DELHI-59. 8.3. IT HAS BEEN ARGUED BY THE LD.AR THAT THESE WER E NOT CASH DEPOSITS AND WERE DEPOSITS BY WAY OF SPECIFIC INSTRUMENTS FOUND MENTIONED IN THE DETAILS EXTRACTED IN THE ASSESSMENT ORDER ITSELF. THOUGH N OTICE U/S 133(6) ON THE DIRECTIONS HAVE BEEN ISSUED AND SERVED UPON ALL THE SIX CONCERNS. FOUR OUT OF THE SIX HAVE REPLIED AND CONFIRMED. THIS FACT IS EVIDE NT FROM PAPER BOOK PAGE 208 WHEREIN TECHNO COM ASSOCIATES PVT. LTD. CONFIRMS THE TRANSACTION OF INVESTMENT. IT SUPPORTS ITS CLAIM RELYING UPON THE BANK STATEMENT SHOWING DEBIT OF CHEQUE GIVEN FOR THE SAID INVESTMENT; ACKNOWLEDG ES THAT SHARES CERTIFICATE HAVE BEEN RECEIVED BY THEM; BALANCE SHEET AND COPY OF AC KNOWLEDGEMENT OF INCOME TAX RETURN FIELD WAS RELIED UPON VIDE REPLY DATED 25.01 .2014 BEFORE THE AO. THE RECORD SHOWS THAT THE REMAND REPORT BY THE AO IS UN DATED. HOWEVER, THE FACT THAT THERE WAS A REMAND DIRECTED BY THE COMMISSIONE R ON 17.12.2012 AND AGAIN ON 13.01.2014 IS ACKNOWLEDGED IN THE FIRST PART OF THE REMAND REPORT. SIMILARLY FROM PAPER BOOK PAGE 236, IT IS EVIDENT THAT VIRDI TRAVEL PVT. LTD. CONFIRMED THE INVESTMENT IN SHARES OF RS. 3 LACS BY RELYING UPO N BANK STATEMENT REFLECTING THE INVESTMENT; COPY OF SHARE CERTIFICATE RECEIVED; COP Y OF INCOME TAX RETURN FILED ALONGWITH BALANCE SHEET IN SUPPORT OF THE SAID ASSE RTION. THE FACT THAT THIS WAS RECEIVED AND FILED IS EVIDENT FROM THE FACT THAT IT WAS DIARISED AS PER STAMP OF AO, I.T.A .NO.-1834/DEL/2015 PAGE 17 OF 19 WARD-11, NEW DELHI STAMP DATED 27.01.2014. SIMILAR IS THE POSITION IN REGARD TO OTHER TWO REPLIES RECEIVED BY THE AO FROM NATRAJ COMMUNICATION PVT. LTD. AND V.R. TRADERS PVT. LTD. AT PAPER BOOK PAGE 282 AND 329. IT IS SEEN THAT TH E EVIDENCES AVAILABLE ON RECORD RIGHT FROM ASSESSMENT STAGE HAVE NOT BEEN ASSAILED NEGATIVELY AT ANY OF THE STAGES BY THE AO NOR BY TH E CIT(A) OR FOR THAT MATTER EVEN BEFORE THE ITAT. QUA THE OTHER TWO CONCERNS WHO DI D NOT REPLY THOUGH NOTICE U/S 133(6) WAS SERVED UPON THEM, IT IS SEEN THAT AS PER RECORD LOKESH TOOLS & TRADING PVT. LTD. WHO IT IS CLAIMED HAD PAID RS.2,50,000/- VIDE INST RUMENT NO.- 405868 AND SURAJ CYCLE MART PVT.LTD. WHO ALSO HAS PAID RS.2,50,000/- BY INSTRUMENT NO.517394 THE RECORD SHOWS THAT THE DETA ILS OF BANKS; AMOUNTS; INSTRUMENTS AND DATES WERE ALL ALONG AVAILABLE ON R ECORD WHEREIN NO FURTHER ENQUIRY WAS CONSIDERED NECESSARY BY THE AO. THE FAC T REMAINS THAT THE NOTICES HAVE BEEN SERVED UPON THESE PARTIES. THUS, IN A CAS E WERE 4 OUT OF 6 CONCERNS ADMITTEDLY REPLY THE TWO WHO THOUGH DO NOT REPLY BU T THEIR EVIDENCES REMAIN UNASSAILED PER SE CANNOT BE THE REASON FOR SUSTAINI NG THE ADDITION IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN THE FACTS WH ERE ALL DETAILS ARE AVAILABLE NOTICE U/S 133(6) HAVE BEEN SERVED, FOUR HAVE REPLI ED THUS, IF THE DEPARTMENT STILL HAD ANY FURTHER DOUBTS ABOUT THEIR EXISTENCE OR GEN UINENESS THEN THEIR PRESENCE SHOULD HAVE BEEN ENFORCED AS THE WHEREABOUTS OF THE SE TWO CONCERNS WERE KNOWN TO THE DEPARTMENT AS NOTICES WERE SERVED UPON THESE PARTIES AT THE ADDRESS GIVEN IS A FACT ON RECORD. IN THE AFORE-MENTIONED PECULIA R FACTS AND CIRCUMSTANCES, THE REQUEST OF THE REVENUE TO DIRECT YET ANOTHER REMAND DOES NOT MAKE ANY SENSE. IT IS SEEN THAT WHEN THE EVIDENCES ON RECORD ARE CONSI DERED QUA THE STATED BUSINESS OF THE ASSESSEE, I FIND THAT THE ADDITION ON MERITS CANNOT BE SUSTAINED. THOUGH I.T.A .NO.-1834/DEL/2015 PAGE 18 OF 19 THE LD.AR HAS ALSO ARGUED THE JURISDICTIONAL ISSUE RELYING UPON VARIOUS PROPOSITIONS OF LAW, HOWEVER FINDING THEREON MAY NO T BE SO RELEVANT AS THE DECISIONS PROCEED ON FACTS PECULIAR TO THEIR OWN. IN THE FACTS OF THE PRESENT CASE THE LD.AR NECESSARILY HAD TO REFER TO THE FACTS ON RECORD IN ORDER TO DEMONSTRATE THAT JURISDICTION ON FACTS WAS LACKING. THUS WHILE CONSIDERING AND DISCUSSING THEM, REFERENCE HAS BEEN MADE AT LENGTH ON THE FACT S AVAILABLE ON RECORD TO CANVASS THAT NO INDEPENDENT VIEW COULD HAVE BEEN FO RMED BY THE AO THAT THESE WERE BOGUS ACCOMMODATION ENTRIES WARRANTING A RE-OP ENING BECAUSE IF THE FACTS HAD BEEN SEEN BY THE AO THE ASSESSMENT WOULD NOT HA VE BEEN RE-OPENED. ACCORDINGLY, IT HAS BEEN CANVASSED THAT THE CONCLUS IONS HAVE BEEN DRAWN ACCEPTING THE INFORMATION OF THE INVESTIGATION WING AS A GOSPEL TRUTH. IN ORDER TO CONSIDER THE MERITS OF THE ARGUMENTS, IT IS NOTICED THAT FINDING HAS NECESSARILY TO BE GIVEN AND CONCLUSION WAS REQUIRED TO BE DRAWN TO HOLD WHETHER THE ASSESSEES CLAIM IS CORRECT OR NOT. THUS, NECESSARILY SO, I F IND THAT THE CRUX OF THE ARGUMENTS ALL ALONG HAVE BEEN FOCUSED ON THE MERITS OF THE AD DITION MADE. CONSIDERING THE PECULIAR FACTS, I FIND THAT THE ISSUE BEING PURELY FACTUAL CAN BE DECIDED ON THE BASIS OF THE FACTS AND EVIDENCES AVAILABLE ON RECOR D OF THE SPECIFIC CASE AND THUS WITHOUT REFERRING TO THE DECISIONS WHICH ARE RELIED UPON FOR QUASHING THE PROCEEDINGS, CONCLUSION IS CAPABLE OF BEING DRAWN A S IT IS FACT SPECIFIC. SINCE THE ARGUMENTS OF THE PARTIES BEFORE THE BENCH HAVE BEEN CONSIDERED AND DEALT WITH AT LENGTH ON THE BASIS OF WHICH ON MERITS, IT HAS BEEN HELD THAT THE ADDITION ON FACTS WAS WRONGLY MADE AS THERE IS NOTHING ON RECORD JUST IFYING THE ADDITION EXCEPT THE SUSPICION OF THE REVENUE WHICH CANNOT BE THE BASIS OF EITHER MAKING OR SUSTAINING AN ADDITION AS AT BEST IT COULD HAVE BEEN THE BASIS FOR MAKING A FURTHER ENQUIRY I.T.A .NO.-1834/DEL/2015 PAGE 19 OF 19 WHICH ALREADY STOOD DIRECTED. ACCORDINGLY, I AM OF THE VIEW THAT THE JURISDICTIONAL ISSUE IN THE FACE OF THE PATENT AND OBVIOUS FACTUAL FINDINGS HAS PROBABLY NOT BEEN CANVASSED BY THE ASSESSEE AS VIGOROUSLY AS THE ACTI ON OF THE REVENUE IN SUSTAINING THE ADDITION ON MERIT. ON CONSIDERING T HE FACTS ON RECORD, LEGAL PROPOSITIONS AND ARGUMENTS OF THE PARTIES BEFORE TH E BENCH, I AM OF THE VIEW THAT IN THE PECULIAR FACTS AS AVAILABLE ON RECORD FOR TH E REASONS GIVEN HEREIN ABOVE, THE ADDITION HAS WRONGLY BEEN MADE AND SUSTAINED BY THE CIT(A). WITHOUT ASSAILING THE EVIDENCES, THE ADDITION CANNOT BE SUSTAINED. S USPICION HOWEVER STRONG CANNOT FORM THE BASIS OF EITHER MAKING OR SUSTAININ G THE ADDITION. IT IS THE EVIDENCE AND EVIDENCE ALONE WHICH CAN DICTATE THE T RUE PICTURE OF THINGS WHICH IN THE FACTS AS THEY STAND FULLY DEMONSTRATE THE CASE OF THE ASSESSEE. ACCORDINGLY, ON A CAREFUL CONSIDERATION OF THE MATERIAL AVAILABL E ON RECORD, THE ADDITION IS DIRECTED TO BE DELETED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 27 TH JANUARY 2017. SD/- (DIVA SINGH) JUDICIAL MEMBE R *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTR AR, ITAT NEW DELHI
