D.C.I.T.CC - VIII,Kol., Kolkata V. Shri Sagar Mal Nahata, Kolkata

ITA 1898/KOL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4849 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 11-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 26-12-2012
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR LD
• Assessee Lawyers: S M SURANA; V N PU
• Keywords: Unexplained cash credit; Income from undisclosed sources; Search and seizure; Document seized; Share purchase agreement; Opportunity of cross examination; Source of fund; Question of law; Validity of assessment; Accommodation entries; Block assessment; Retraction; Documents seized
• Section: 143(3); 133A; 153A; 132

Judgement Text

ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, K OLKATA BEFORE : SHRI N.V.VASUDEVAN, JUDICIAL MEMBER , AND SHRI M. BALAGANESH, ACCOUNTAN T MEMBER ITA NOS. 1898 TO 1903/KOL/2012 A.YS : 2005-06 TO 2010-11 D.C.I.T, C.C-VIII, KOLKATA VS. SHRI SAGAR MAL NA HTA PAN: ABEPN 9248G (APPELLANT) (RE SPONDENT) FOR THE APPELLANT/DEPARTMENT: SH RI NIRAJ KUMAR, LD.CIT/DR FOR THE RESPONDENT/ASSESSEE: SHRI S.M SURANA & SHRI V.N PUROHIT, ADVOC ATES, LD.ARS DATE OF HEARING: 11-04-2016 DATE OF PRONOUNCEMENT: 11 - 5 - 2016 ORDER SHRI M.BALAGANESH, AM THESE APPEALS OF THE REVENUE ARISE OUT OF THE CO NSOLIDATED ORDER OF THE LEARNED CIT(A), CENTRAL-1, KOLKATA IN APPEAL NOS. 117-122/C C-VIII/CIT(A)C-I/KOL/11-12 DATED 18.10.2012 AGAINST THE SEPARATE ORDER OF ASSE SSMENTS FRAMED FOR THE ASST YEARS 2005-06 TO 2010-11 RESPECTIVELY BY THE LEARNED AO U /S 153A/ 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). SINCE THE ISSUE INVOLVED IN ALL THE APPEALS ARE IDENTICAL, THE SAME ARE TAKEN UP TOGETH ER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ONLY ISSUE TO BE DECIDED IN THESE APPEA LS IS AS TO WHETHER AN ADDITION TOWARDS COMMISSION ON ACCOMMODATION ENTRIES COULD BE TAXED IN THE HANDS OF THE ASSESSEE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASS ESSEE IS A PRACTICING CHARTERED ACCOUNTANT AND IS THE PROPRIETOR OF M/S S.M.NAHATA & CO. HAVING ITS OFFICE AT ROOM ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 2 NO. 16, 2, CLIVE GHAT STREET, KOLKATA 700001. TH ERE WAS A SEARCH U/S 132 OF THE ACT CONDUCTED ON 3.3.2010 AT THE RESIDENTIAL PREMISES O F THE ASSESSEE. PARALLELY SURVEY U/S 133A OF THE ACT WAS ALSO CARRIED OUT AT DIFFERENT O FFICE PREMISES OF THE ASSESSEE AS WELL AS THOSE OF THE COMPANIES ALLEGEDLY MANAGED AN D CONTROLLED BY THE ASSESSEE. DURING THE COURSE OF SUCH OPERATIONS, CERTAIN VALUA BLE ASSETS SUCH AS CASH (RS. 12,03,000/- IN RESIDENCE AND RS. 1,20,000/- IN OFFI CE) , JEWELLERY VALUED AT RS. 36,19,913/- AS WELL AS BOOKS OF ACCOUNTS AND OTHER DOCUMENTS WERE FOUND. THE SEARCH AND SURVEY ACTION IN THE CASE OF THE ASSESSEE WSA I NITATED IN CONSEQUENCE TO THE SEARCH CONDUCTED AGAINST M/S BHUSHAN POWER & STEEL LTD GRO UP OF CASES. THE ASSESSEE GAVE EXPLANATION FOR THE CASH AND JEWELLERY FOUND DURING THE COURSE OF SEARCH WHICH WAS ACCEPTED AND NO ADDITION WAS MADE ON THAT ACCOUNT B Y THE LEARNED AO. IN THE ASSESSMENT ORDER, THE LEARNED AO NOTED THERE WERE 3 1 COMPANIES WHICH WERE MANAGED AND CONTROLLED BY THE ASSESSEE THOUGH IT WA S CATEGORICALLY DENIED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS ITSELF. THE ASSESSEE EXPLAINED THAT HE IS A QUALIFIED CHARTERED ACCOUNTANT AND THAT HIS ASSOCIA TION WITH THE SAID COMPANIES WAS ONLY IN HIS PROFESSIONAL CAPACITY. THE ASSESSEE A LSO SUBMITTED THAT HE HAD NO INTEREST IN THEM. THE LEARNED AO ISSUED SHOW CAUSE NOTICE D ATED 30.11.2011 TO THE ASSESSEE POSING DIFFERENT QUESTIONS IN CONNECTION WITH TRANS ACTIONS OF M/S BHUSHAN POWER & STEEL LTD GROUP OF CASES , WHICH IS REPRODUCED HERE IN BELOW FOR THE SAKE OF CONVENIENCE :- AS YOU ARE AWARE THAT A SEARCH WAS CONDUCTED AGAIN ST M/S BHUSHAN POWER & STEEL LTD AND OTHER CONCERNS OF THE BHUSHAN GROUP FROM THE OFFICE D.I. T. ( INV.), NEW DELHI ON 03-03-2010. DURING TH E SEARCH, IT WAS FOUND THAT M/S. BHUSHAN POWER & STEEL LTD HAS RECEIVED HUGE AM OUNT OF SHARE CAPITAL AND / OR SHARE APPLICATION MONEY FROM FOUR GROUP CO MPANIES NAMELY M/S. DJYAJYOTI STEEL LTD., M/S. VISION STEEL LTD., M/S. MARSH STEEL TRADING LTD. AND M/S. JASMINE STEEL LTD. ON THE PERUSAL OF SOURCE OF FUND OF THESE COMPANIES, IT WAS FOUND THAT THEY HAVE RECEIVED THEIR FUNDS MOSTL Y FROM THE INTRODUCTION OF SHARE CAPITAL FROM COMPANIES DOCUMENTS OF WHOSE WE RE FOUND FROM YOUR RESIDENCE AND OFFICES. EVEN THE DOCUMENTS SEIZED / IMPOUNDED FROM YOUR RESIDENCE / OFFICES CORROBORATES THESE FINDINGS TH AT ACCOMMODATION ENTRIES WERE PROVIDED BY ABOVE MENTIONED 31 COMPANIES TO FO UR COMPANIES OF BHUSHAN ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 3 GROUP. DURING SEARCH / SURVEY THE FOLLOWING DOCUMEN TS SEIZED / IMPOUNDED CLEARLY ESTABLISHED THIS FACT. (XXXVII) PAGES 29 & 30 OF DOCUMENTS SMN-1 SEIZED FR OM YOUR RESIDENCE HAS NOTING OF DIFFERENT COMPANIES WITH DETAILS OF AMOUN T PAID, RECEIVED AND BALANCE UNDER THE TITLE 'STATUS AS ON 15- 02-2010' , 'SUMMARY' AND 'TOTAL SMN A/C STATUS'. TOTAL AMOUNT PAID AS MENTI ONED ON THE PAGE IS RS.152,20,00,000/-, RECEIVED RS. 73,47,00,000/-, AND BALANCE RS.78,73,00,000/-. THESE PAGES SHOW HOW MUCH AMOUNT RECEIVED BY YOUR COMPANIES, AMOUNT FOR WHICH ACCOMMODATION ENTRIES P ROVIDED AND BALANCE AMOUNT TO BE RECEIVED. THE MENTIONING OF 'T OTAL SMN A/C STATUS' ON TOP OF THESE PAGES CLEARLY ESTABLISHES Y OUR PERSONAL INVOLVEMENT OTHERWISE THERE IS NO REASON WHY RECON CILIATION OF ACCOUNTS BETWEEN COMPANIES INCLUDES YOUR NAME. (XXXVIII) PAGES 12 TO 19 OF DOCUMENT SMN-1 SEIZED F ROM YOUR RESIDENCE HAVE LIST OF SHAREHOLDERS OF DIFFERENT COMPANIES. THE SH AREHOLDERS INCLUDES YOU, YOUR EMPLOYEE MR. RADHAKANT TIWARI AND YOUR GR OUP COMPANIES. THE COMPANIES WHOSE SHAREHOLDERS LIST WERE FOUND HA D GIVEN ACCOMMODATION ENTRY IN FORM OF SHARE CAPITAL TO ABO VE MENTIONED FOUR COMPANIES OF BHUSHAN GROUP. (XXXIX) PAGE 51 OF DOCUMENT SMN-1 SEIZED FROM YOUR RESIDENCE IS A LEDGER OF M/S. BHUSHAN POWER & STEEL PVT. LTD. IN THE BOOKS OF M/S.CAPLIN COMMERCIAL PVT. LTD. FOR THE PERIOD 01-04-2008 TO 3 1-03-2009. FINDING OF THIS LEDGER AT YOUR RESIDENCE PROVES THAT YOU WE RE NOT ONLY AWARE OF SUCH TRANSACTIONS BUT ALSO INVOLVED WITH THEM. (XI) PAGE NO. 68 OF DOCUMENT. PMCM/17 IMPOUNDED FROM YOUR OFFICE AT 8, CANNING STREET, 3 RD FLOOR, ROOM NO. 305, KOLKATA-1, IS A LETTER DATED 10/02/2010 FROM MR. R.K.GUPTA, VICE PRESIDENT AND COMPANY SECRETARY OF M/S. BHUSHAN POWER & STEEL LTD. IN THIS LETTER MR. GUPTA HAS WRITTEN TO ONE MR. ALKESH SHARMA OF KOLKATA OFFICE OF HIS C OMPANY THAT THEY WERE SENDING DOCUMENTS LIKE MEMORANDUM OF SALE OF S HARES, DELIVERY OF SHARE CERTIFICATES, LETTER OF OFFER FOR SALE OF SHARES AND LIST OF TRANSFER DEEDS FOR GETTING SIGNED FROM THE DIRECTORS OF RESP ECTIVE COMPANIES OF MR. S.M.NAHATA. A LIST CONTAINING NAMES OF COMPANIE S WHOSE SHARES WERE REQUIRED TO BE TRANSFERRED, TRANSFEROR COMPANI ES AND TRANSFEREE COMPANIES ALONG WITH NO. OF SHARES HAS BEEN ENCLOSE D WITH THE LETTER. THIS LIST WAS ALSO IMPOUNDED AND MARKED PAGES 65 TO 67 OF PMCM/17. ALL THE TRANSFEROR COMPANIES ARE THE SAME WHOSE NAM ES APPEARED IN THE LIST OF 31 COMPANIES SENT TO YOU VIDE THIS OFFICE L ETTER DATED 30-11-2011. WHEN A SENIOR OFFICER OF THE RANK OF VICE PRESIDENT AND COMPANY ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 4 SECRETARY OF M/S. BHUSHAN POWER & STEEL LTD. CLEARL Y AND CATEGORICALLY MENTIONING THE TRANSFEROR COMPANIES AS OF MR. S.M.N AHATA, IT LEAVES NO DOUBT THAT YOU ARE DIRECTLY MANAGING AND CONTROLLIN G THE AFFAIRS OF THESE 31 COMPANIES. A PHOTOCOPY OF THE LETTER AND ITS ANN EXURE ARE ENCLOSED HEREWITH. PAGES 74 TO 76 OF IMPOUNDED DOCUMENT PMCM /17 ARE LETTERS FROM MR. TARKESHWAR SANCHETI OF GUWAHATI DATED 05-1 1-2008 AND 07- 11-2008 ADDRESSED TO YOU. IN THE LETTERS, DETAILS A BOUT BUY BACK OF SHARES OF COMPANIES CONTROLLED BY YOU BY PERSON LIKE SANTO SH MAHESWARI, DILIP MAHESWARI AND OTHERS ALONG WITH DETAILS OF AMOUNT P AID AND PAYABLE HAVE BEEN GIVEN. THE COMPANIES MENTIONED IN THE DOC UMENTS ARE PART OF 31 COMPANIES. (XLI) PAGES 95 TO 99 OF IMPOUNDED DOCUMENT PMCM /17 HAVE NAMES OF SHAREHOLDERS OF M/S. JASMINE STEEL TRADING LTD., M/ S. MARSH STEEL TRADING LTD., M/S. DIYAJYOTI LTD., M/S. VISION STEE L LTD. AND M/S. ARROMATIC STEEL PVT. LTD., NUMBERS OF SHARES HELD B Y THEM AND DATE OF ALLOTMENT. THESE COMPANIES BELONGS TO BHUSHAN GROUP AND THE SHAREHOLDERS ARE COMPANIES CONTROLLED BY YOU. IT HA S BEEN MENTIONED ON THESE DOCUMENTS THAT THE SHARES HOLD BY YOUR COM PANIES WOULD BE PURCHASED BY MR. SANJAY SINGAL, MRS. AARTI SINGAL A ND M/S. SANJAY SINGAL (HUF) @ OF RS.10/-. AS YOU ARE AWARE THAT MR . SANJAY SINGAL IS A DIRECTOR OF M/S. BHUSHAN POWER & STEEL LTD. (XLII) PAGE 139 OF IMPOUNDED DOCUMENT PMCM/17 HAS DETAILS OF SHARE TRANSACTION OF M/S BPO INVESTMENTS PVT. LTD., M/S. BRILLIANT VYAPAAR PVT. LTD. AND OTHERS BY M/S. S.M.NAHATA & CO. YOUR PROPRIETORSHIP CONCERN. (XLIII) DURING SURVEY AT YOUR OFFICE PREMISE AT 8, CANNING STREET, ROOM NO.305, 3 RD FLOOR, KOLKATA ON 03-03-2010, STATEMENT OF MR. SAN DIP BEJ WAS RECORDED. IN HIS STATEMENT, MR. SANDIP BEJ HAS STATED THAT HE HAD BEEN WORKING UNDER YOU SINCE YEAR 2002 AND WAS DIRE CTOR OF M/S.CASTLE COMMODITIES PVT. LTD., M/S. MANI MARKETING & HOLDIN G PVT. LTD.; M/S. MULTIPLIER ENTERPRISE PVT. LTD. AND M/S. PIYUSH ME RCANTILE PVT. LTD. IN HIS REPLIES TO QUESTION NOS. 5 & 7 OF THAT STATEMEN T, HE HAS STATED THAT MR. S.M. NAHATA WAS KEY MAN OF THEIR GROUP OF COMPA NIES AND ACCOUNTS OF THOSE COMPANIES WERE PREPARED AT YOUR INSTRUCTI ON ONLY. IN REPLIES TO QUESTION NOS. 10 & 12, HE REITERATED THAT ONLY YO U WOULD BE ABLE TO EXPLAIN THE TRANSACTIONS ENTERED INTO BY THE COMPA NIES IN WHICH MR. BEJ WAS DIRECTORS WITH COMPANIES OF BHUSHAN GROUP. A COPY OF THIS STATEMENT IS ENCLOSED WITH THIS LETTER. (XLIV) STATEMENT OF MR. RADHA KANT TIWARI WAS ALSO RECORDED DURING SURVEY ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 5 U/S. 133A ON 03-03-2010. IN HIS STATEMENT, HE HAS ACCEPTED THAT HE WAS DIRECTOR OF M/S. ASCENT VYAPAAR PVT. LTD., M/S. BRI ILIANT VYAPAAR PVT. LTD, M/S. CARAVAN VYAPAAR PVT. LTD; M/S. MISSION V YAPAAR PVT.LTD. AND M/S. BRAGGART VYAPAAR PVT. LTD. IN REPLY TO QUESTIO N NO. 3 HE HAS ACCEPTED THAT ACCOMMODATION ENTRIES WERE PROVIDED BY THESE COMPANIES TO THE COMPANIES OF BHUSHAN GROUP. A COP Y OF THIS STATEMENT IS ENCLOSED WITH THIS LETTER. (XLV) STATEMENT OF UJJWAL DAS WAS RECORDED DURING SURVEY U/S. 133A ON 03- 03-2010 AT YOUR OFFICE 863, MARSHALL HOUSE, 33/1, N .S.ROAD. IN HIS STATEMENT, HE HAS STATED THAT HE WAS WORKING AS PEO N OF MR. S.M. NAHATA AND HE USED TO RECEIVE LETTERS AND CORRESPONDENCES OF VARIOUS COMPANIES. HE STATED THAT THE OFFICE BELONGS TO YO U. WHEN HE WAS ASKED TO EXPLAIN THE EXISTENCE OF ASCENT VYAPAAR PVT. LT D; BRAGGART VYAPAAR PVT. LTD, BRILLIANT PVT. LTD, KARAVAN VYAPAAR PVT. LTD, MISSION VYAPPAR PVT. LTD, HE STATED THAT THE COMPANIES BELONG MR. S.M NAHATA AND HE ALSO PRODUCED STAMP OF 17COMPANIES . A COPY OF THIS STATEMENT IS ENCLOSED WITH THIS LETTER. (XLVI) DURING SURVEY U/S. 133A AT PARK PLAZA, GROU ND FLOOR, ROOM NO.13, 71,PARK STREET, KOLKATA-16, ON 03-03-2010, STATEMEN T OF MR. BALDEO SINGH WAS RECORDED IN HIS STATEMENT, HE STATED THAT HE WAS WORKING AS PEON OF M/S. MAHAVIR FINANCE LTD; M/S. PANCHMUKHI PROPERTI ES LTD. AND OTHER COMPANIES. HE STATED THAT M/S. MAHAVIR FINANCE LTD. , M/S. PANCHMUKHI PROPERTIES LTD, M/S. GEMCO ENGINEERING INDUSTRIES L TD., M/S. CEMFIL ENTERPRISES LTD WERE OPERATING FROM THAT PREMISE. H E ALSO STATED THAT MR. S.M NAHATA IS THE MAIN PERSON FOR ALL THESE COMPA NIES. A COPY OF THIS STATEMENT IS ENCLOSED WITH THIS LETTER. (XLVII) DURING SURVEY U/S.133A AT 2, CLIVE GHAT STR EET,KOLKATA- 700001 ON 03- 03-2010, STATEMENT OF MR. BALDEO SINGH WAS RECORDED . IN HIS STATEMENT, HE STATED THAT HE WAS WORKING AS PEON OF M/S. S.M. NAH ATA & CO. FOR NEARLY THREE YEARS. (XLVIII) WHEN ASKED ABOUT OTHER EMPLOYEES WORKING I N VARIOUS OFFICES OF S.M.NAHATA, HE STATED THAT SOMA DUTTA, K URESWAR BARIK, SANDIP BAID AND RADHA KANT TIWARI WORKED BOTH AT 8, CANNING STR EET AND 2, CLIVE GHAT STREET, KOLKATA, CHHOTULAL SHAW WORKED AT 863, MARSHALL HOUSE, 33/1, N.S.ROAD AND BALDEO SINGH WAS EMPLOYED AT 71, PARK STREET, KOLKATA - 16. ALL THE EMPLOYEES WERE FOUND DURING T HE SURVEY AT PREMISE STATED BY MR. BARIK AND ALL OF THEM ARE DIRECTORS I N ONE OR ANOTHER COMPANIES MANAGED AND CONTROLLED BY YOU. A COPY OF THIS STATEMENT IS ENCLOSED WITH THIS LETTER. ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 6 (XIII) A SURVEY WAS ALSO CONDUCTED AT 407, 4TH FLOOR, GUPTA CHEMBERS, GALI NO.-9, GURUDWARA ROAD, 2459/10, BEADONPU RA, KAROLBAGH, NEW DELHI, ON 03-03-2010. SOME OF COMPANIES MANAGED AND CONTROLLED BY VIZ. M/S. ELAR SECURITIES LTD., M/S. JAHANGIRABAD F INANCE CO. PVT. LTD., M/S. TAPASYA FINVEST PVT. LTD. AND M/S. BPO FINANCE & INVESTMENT COMPANY LTD. HAD THEIR OFFICE AT THAT ADDRESS. THE SURVEY TEAM FOUND THAT PREMISE CLOSED. ON ENQUIRY, IT WAS FOUND THAT MR. MANISH SHARMA WAS OWNER OF THAT PREMISE AND HE HAS LAT OUT THE PR EMISE TO MR. S.M. NAHATA AS ADMITTED BY HIM IN HIS STATEMENT RECORDED . HE CATEGORICALLY STATED IN HIS STATEMENT THAT S.M. NAHATA IS THE ONL Y PERSON WHO SOMETIMES ATTENDS THE OFFICE, USUALLY ONCE IN A MON TH, COLLECTS THE LETTERS FROM THE LETTER BOX AND GOES AWAY. 3. FROM THE DOCUMENTS SEIZED / IMPOUNDED DURING SEARCH AT YOUR RESIDENCE AND SURVEY AT YOUR BUSINESS PREMISES AND STATEMENT S OF YOUR EMPLOYEES AND OTHER PERSONS DURING SURVEY, IT IS ESTABLISHED BEYO ND DOUBT THAT YOU ARE MANAGING AND CONTROLLING AFFAIRS OF 31 COMPANIES LI ST OF WHICH WERE INTIMATED TO YOU VIDE THIS OFFICE LETTER DATED 30-11-2011. TH E DOCUMENTS MENTIONED ABOVE CLEARLY ESTABLISHED THAT THE COMPANIES HAD THEIR O FFICES AT THE PREMISE OWNED BY YOU AND YOUR FAMILY MEMBERS. IT IS ALSO ESTABLIS HED FROM THESE DOCUMENTS AND STATEMENTS RECORDED DURING SURVEY THAT EITHER Y OU OR YOUR EMPLOYEES OR BOTH WERE DIRECTORS OF THESE COMPANIES. IT IS ALSO CRYSTAL CLEAR FROM THESE DOCUMENTS THAT YOU WERE ACTIVELY ENGAGED IN PROVIDI NG ACCOMMODATION ENTRIES TO BHUSHAN GROUP OF COMPANIES AS WELL AS TO OTHERS THROUGH 31 COMPANIES AS MENTIONED ABOVE. AS PREVALENT IN THIS FIELD OF ACTI VITIES, MONEY ORIGINALLY RECEIVED IN CASH OR IN THE FORM OF INTER CORPORATE DEPOSITS IN DIFFERENT COMPANIES HAVE BEEN ROUTED THROUGH NUMEROUS SELF OW NED AND SELF MANAGED COMPANIES, BEFORE FINALLY LANDING IN THE DESTINATIO N COMPANIES. FOR THIS PURPOSE, COMMISSION, AS PREVALENT IN MARKET, IS CHA RGED BY THE PERSON MANAGING THE AFFAIRS OF THE COMPANIES THROUGH WHICH THE ENTRIES ARE ROUTED. THESE FACTS ARE ESTABLISHED FROM THE STATEMENTS OF MR. SANDIP BEJ AND MR. RADHA KANT TIWARI AND VARIOUS DOCUMENTS SEIZED/IMPO UNDED. IN VIEW OF THE ABOVE, YOU ARE HEREBY SHOW-CAUSED TO EXPLAIN WHY COMMISSION ON THE ACCOMMODATION ENTRIES PROVIDED BY THE 31 COMPANIES MENTIONED ABOVE WILL NOT BE TREATED AS INCOME EARN ED BY YOU AND CONSEQUENTLY TAXED IN YOUR HAND. A CHART SHOWING ACCOMMODATION E NTRIES PROVIDED DURING DIFFERENT FINANCIAL YEARS BY YOUR COMPANIES PREPAR ED ON THE BASIS OF DATA AVAILABLE IS ENCLOSED WITH THIS LETTER AS ANNEXURE -A. IT MAY BE NOTED THAT THE FIGURE MENTIONED IN THE CHART MAY INCREASE IF FUR THER DATA REGARDING ACCOMMODATION ENTRIES OF THE 31 COMPANIES ARE AVAIL ABLE IN FUTURE. IF THERE IS ANY CROSS HOLDING AMONGST YOUR GROUP COMPANIES, SUB MIT A CHART SHOWING SUCH CROSS HOLDING. ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 7 3.1. THE ASSESSEE REPLIED TO THE SAID SHOW CAUSE NOTICE WHICH IS REPRODUCED AS UNDER:- THAT I AM A CHARTERED ACCOUNTANT AND MY JOB INVO LVES AUDIT OF BOOKS OF ACCOUNTS, RENDERING CONSULTATION REGARDING FIN ANCIAL AND LEGAL MATTERS, RESTRUCTURING OF BUSINESS AND OTHER SIMILAR PROFES SIONAL ASSIGNMENTS IN CONNECTION WITH MY CARRYING ON OF CHARTERED ACCOUNT ANCY PRACTICE. ADMITTEDLY, IN CONNECTION WITH THE SEARCH CONDUCTE D IN M/S. BHUSAN POWER & STEEL LTD., A SEARCH / SURVEY U/S. 132/133A WERE CONDUCTED AT MY RESIDENTIAL PREMISE ALSO AND VARIOUS DOCUMENTS AND BOOKS OF ACCOUNTS WERE IMPOUNDED AND SEIZED. ADMITTEDLY THE BOOKS OF ACCOUNTS AND DOCUMENTS SEIZED BELONG TO MY CLIENTS WHICH INCLUD E THE NAME OF 31 COMPANIES AS MENTIONED IN YOUR EARLIER NOTICE DATE D 30-11-2011. ALL THESE COMPANIES ARE PAYING ME MY PROFESSIONAL FEE MONTHLY , WHICH IS MATTER OF RECORD. IT IS TRUE THAT I HAVE RENDERED VARIOUS SE RVICES TO THESE COMPANIES IN RELATION TO INVESTMENTS MADE BY THEM BY WAY OF S HARE APPLICATION AS ALSO STRUCTURING/RESTRUCTURING OF THEIR ASSETS/CAPITAL B ASE. SUCH SERVICES IN NO WAY HINGS UPON ANY ACTIVITY WHICH MAY AMOUNT TO JAMA KHARCHI / ACCOMMODATION ENTRIES AS ALLEGED BY YOU IN YOUR IMP UGNED NOTICE. UNDERSIGNED THEREFORE IS TOTALLY PERPLEXED AT THE S EVERAL ALLEGATIONS MADE BY YOU IN YOUR IMPUGNED NOTICE. MAY I SAY AND SUBMIT THAT IN COURSE OF SEARCH, THE AUTHORIZED OFFICERS AND INSPECTORS HAVE UNDERTAKEN VERY HIGH-HANDED ACT ION AND SHOW-CAUSE NOTICE SERVED BY YOU ARE THE BYE-PRODUCTS OF SUCH A CTION. MY I DRAW YOUR KIND ATTENTION TO THE FACT THAT ALL THESE ACTIVITI ES OF THE AUTHORIZED OFFICERS AND INSPECTORS WERE LATTER ON OFFICIALLY COMMUNICAT ED TO ADI NEW DELHI VIDE A LETTER DATED 21.06.2010 ENCLOSING THEREIN TH E SWORN AFFIDAVITS OF THE PERSONS WHOSE STATEMENTS ARE NOW BEING RELIED UPON BY YOU. SINCE THE RETRACTION MADE BY THEM IS A MATTER OF RECORD AND SUCH RETRACTIONS ON SWORN AFFIDAVITS BY THEM HAS NOT BEEN CHALLENGED TI LL THIS DATE BY THE DEPARTMENT NOR HAVE YOU ALLOWED ME CROSS-EXAMINATIO N OF THESE PERSONS IN RELATIONS TO THEIR STATEMENTS, THE RELIANCE PLACED BY YOU ON SUCH STATEMENTS ARE NOT CORRECT. I DENY ANY OF THE PERSONS, WHOSE S TATEMENTS HAVE BEEN PUT IN YOUR NOTICE, ARE EMPLOYEES OF THE UNDERSIGNED OR RENDER ANY SERVICE TO THE UNDERSIGNED. UNDER SUCH CIRCUMSTANCES, IT IS MY HUMBLE PRAYER, NOT TO ENTER INTO THE FIELD OF SURMISE AND CONJECTURE AND SUBJECT ME TO UNDUE TAX LIABILITY WHICH IS IN NO WAY RELATABLE TO THE INCOM E EARNED BY ME. YOUR GOODSELF IS AWARE THAT I HAVE ALREADY BEEN SU BJECTED TO SEARCH AND IN SUCH, ALL MY ASSETS INCLUDING MY BANK ACCOUNTS H AVE BEEN INVENTORISED / SCRUTINIZED. NO UNACCOUNTED INCOME OR INVESTMENTS H AS BEEN FOUND IN SPITE ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 8 OF HAVING USED THE ARM OF THE DEPARTMENT IN THE FOR M OF SEARCH AND SURVEY. UNDERSIGNED THEREFORE, MOST HUMBLY SUBMITS BEFORE Y OU TO COMPLETE THE ASSESSMENT WITHOUT FASTENING UPON ME UNDUE TAX LIAB ILITY ON THE INCOME WHICH HAS NOT EARNED BY ME. 3.2. THE LEARNED AO DID NOT ACCEPT THE EXPLANATION SUBMITTED BY THE ASSESSEE. HE HELD THAT THE MATERIALS FOUND IN THE COURSE OF SEAR CH AND SURVEY OPERATIONS CLEARLY ESTABLISHED THAT THE ASSESSEE HAS MANAGED AND CONTR OLLED THE SAID 31 COMPANIES WHICH WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. THE LEARNED AO ALSO BELIEVED THAT THE RETRACTION MADE BY THE EMPLOYEES WAS ONLY AN AFTER THOUGHT AS THE REVENUE AUTHORITIES CAN PRESSURIZE NO PERSON TO SIGN A STAT EMENT. THE LEARNED AO ALSO DOWNLOADED FROM THE SITE OF REGISTRAR OF COMPANIES (ROC) , THE BALANCE SHEET AND LIST OF INVESTMENT OF THE SAID COMPANIES, AND THEN, INFE RRED THAT THE SAID COMPANIES HAD NOT ONLY PROVIDED ACCOMMODATION ENTRIES TO BHUSHAN GROU P OF COMPANIES BUT ALSO TO OTHER PERSONS. THE LEARNED AO FURTHER NOTED THAT IT WAS P REVALENT IN THE MARKET THAT THE PERSON PROVIDING ACCOMMODATION ENTRY CHARGES COMMIS SION @ 0.25% TO 0.55% AND THEN, CONCLUDED THAT THE ASSESSEE WHO WAS MANAGING AND CONTROLLING THE COMPANIES FOR PROVIDING ACCOMMODATION ENTRY HAS EARNED COMMISSION @ 0.55%. FROM THE DATA AVAILABLE FROM THE ROC SITE, THE LEARNED AO DETERMI NED ASSESSMENT YEAR WISE THE AMOUNT OF ACCOMMODATION ENTRIES PROVIDED BY THE SAI D COMPANIES , AND THEN, ESTIMATED THE RECEIPT OF COMMISSION BY APPLYING THE RATE OF 0.55% AND BROUGHT THE SAME TO TAX AS UNDER:- SL.NO. ASSESSMENT YEAR(S) AMOUNT OF ACCOMMODATION ENTRY (RS.) INCOME ON ACCOUNT OF ACCOMMODATION ENTRY @0.55% (RS.) 1. 2005-06 22,60,59,585/- 12,43,328/- 2. 2006 - 07 9,00,80,000/ - 4,95,440/ - 3. 2007-08 50,81,47,724/- 27,94,812/- 4. 2008-09 96,76,11,164/- 53,21,861/- 5. 2009-10 95,82,08,500/- 52,70,147/- 6. 2010 - 11 27,90,97,545/ - 15,35,036/ - TOTAL 3,02,92,04,518/- 1,66,60,624/- ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 9 4. ON FIRST APPEAL, THE ASSESSEE ARGUED THAT THE LE ARNED AO HAD REFERRED TO VARIOUS PAGES OF THE DOCUMENTS AND PAPERS SEIZED FROM THE R ESIDENCE AND OFFICE PREMISES OF THE ASSESSEE AS ALSO THE STATEMENTS TAKEN ON OATH O F SRI SANDEP BEJ, RADHA KANT TIWARI, UJJWAL DAS AND BALDEO SINGH AND ISSUED SHOW CAUSE TO THE ASSESSEE. BASED ON THE SAME, ADDITIONS HAVE BEEN MADE EACH YEAR ON ACC OUNT OF COMMISSION ALLEGED TO HAVE BEEN EARNED BY THE ASSESSEE FROM ACCOMMODATION ENTRIES. IT WAS ARGUED THAT THE FINDING OF THE LEARNED AO WAS BASED ON MERE SUSPICI ON, SURMISES AND CONJECTURES DIVESTED OF ANY EVIDENCE AS THE LEARNED AO HAS NOT BEEN ABLE TO BRING ON RECORD ANY SUCH EVIDENCE TO SHOW THAT THE ASSESSEE WAS EITHER INVOLVED IN SUCH TRANSACTION OR RECEIVED ANY COMMISSION ON SUCH TRANSACTIONS AS ALL EGED. IT WAS EXPLAINED THAT THE FACTS AND FINDINGS RECORDED BY THE LEARNED AO AND I NFERENCE DRAWN THEREON BY HIM WERE DULY CONTRADICTED BY THE ASSESSEE VIDE LETTER DATED 22.12.2011 WHICH IS REPRODUCED HEREINABOVE. NONE OF THE EXPLANATIONS GI VEN BY THE ASSESSEE HAS BEEN MET BY THE LEARNED AO IN THE ASSESSMENT ORDER. IT WAS ARGUED THAT THERE IS NOTHING IN THE ASSESSMENT ORDER WHICH COULD PROVE THAT THE ASSESSE E WAS EITHER INVOLVED IN THE MANAGEMENT OF THESE COMPANIES EXCEPT AS A CONSULTAN T NOR THERE IS ANY PROOF / EVIDENCE OF RECEIPT OF ANY COMMISSION ON THE SO CAL LED ACCOMMODATION ENTRIES. FACTUALLY IT WAS SUBMITTED THAT NONE OF THE COMPANI ES WERE CONTROLLED BY THE ASSESSEE UNDER THE COMPANIES ACT, 1956 AND EXPLAINED THAT ON LY WHEN A PERSON EITHER ON HIS OWN ACCOUNT OR THROUGH HIS ASSOCIATES HOLD MORE THA N 51% EQUITY CAPITAL OF SUCH COMPANY, THEN ONLY HE CAN BE SAID TO BE HAVING CONT ROLLING INTEREST. IT WAS EXPLAINED THAT ASSESSEE HAD MADE IT VERY CLEAR IN HIS REPLIES BEFORE THE LEARNED AO THAT HE IS NOT EVEN A SHAREHOLDER IN ANY OF THE COMPANIES. IT WA S FURTHER ARGUED THAT A SEARCH AND SURVEY OPERATIONS TOOK PLACE AT THE ASSESSEES PREM ISES IN CONSEQUENCE OF A SEARCH CONDUCTED AT THE PREMISES OF BHUSHAN POWER & STEEL LTD. THE LOANS AND / OR SHAREHOLDING WERE GIVEN BY THE 31 COMPANIES WITH TH E OTHER COMPANIES OF BHUSHAN GROUP. NONE OF THESE COMPANIES HAVE COME FORWARD A ND STATED ANYWHERE THAT THEY RECEIVED ANY AMOUNT FROM THE 31 COMPANIES AS ACCOMM ODATION ENTRIES NOR THESE ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 10 COMPANIES STATED ANYWHERE THAT CONTRIBUTION OF CAPI TAL BY THE ABOVE COMPANIES WITH BHUSHAN GROUP COMPANIES WAS AN ACCOMMODATION ENTRY. IT WAS FURTHER STATED THAT THE STATEMENTS GIVEN BY RADHA KANT TIWARI AND SANDIP K UMAR BEJ, HAVING BEEN DULY RETRACTED BY THEM BY FILING AFFIDAVIT, HAVE BEEN W RONGLY USED AGAINST THE ASSESSEE. IT WAS ARGUED THAT THOSE EMPLOYEES WERE NOT EMPLOYED B Y THE ASSESSEE AND RATHER THEY WERE EMPLOYEES OF THOSE COMPANIES WHO HAD ALSO RETR ACTED THEIR STATEMENTS BEFORE THE ADIT (INV) AND THE SAID COPIES WERE FILED BEFORE TH E LEARNED AO. THE COPY OF THE SWORN AFFIDAVITS OF THOSE EMPLOYEES WERE NOT DISPRO VED BY THE LEARNED AO. IT WAS FURTHER ARGUED THAT THERE IS A HUGE GAP BETWEEN THE MANAGEMENT AND CONTROL OF THE COMPANIES AND THE EARNING OF COMMISSION INCOME BY T HE ASSESSEE ON THE ACCOMMODATION ENTRIES ALLEGEDLY PROVIDED BY SUCH CO MPANIES WHICH THE LEARNED AO HAD FAILED TO BRIDGE THROUGH ANY CREDIBLE MATERIAL OR EVIDENCE. IT WAS FURTHER ARGUED THAT IT HAD TO BE ESTABLISHED THAT ACCOMMODATION EN TRIES WERE ACTUALLY PROVIDED BY THE COMPANIES ; THAT COMMISSION INCOME WAS RECEIVED ON SUCH ACCOMMODATION ENTRIES ; AND THAT THE COMMISSION INCOME SO RECEIVED WAS NOT EARNED BY THE COMPANIES RESPONSIBLE FOR PROVIDING THE ACCOMMODATION ENTRIES BUT BY THE ASSESSEE AND CONSEQUENTLY TAXABLE IN THE HANDS OF THE ASSESSEE. IT WAS FURTHER ARGUED THAT THE LEARNED AO HAD ONLY REFERRED TO PREVALENT MARKET PR ACTICE TO CONCLUDE THAT COMMISSION @ 0.55% WAS RECEIVED FOR PROVIDING ACCOM MODATION ENTRIES WITHOUT PROVIDING THE DETAILS AS TO WHICH MARKET INQUIRY WA S ACTUALLY MADE BY THE LEARNED AO. THE LEARNED CITA APPRECIATING THE VARIOUS C ONTENTIONS AND ARGUMENTS OF THE ASSESSEE DELETED THE ADDITION MADE IN THE HANDS OF THE ASSESSEE. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US FOR ALL THE ASST YEA RS. 5. THE LEARNED DR REITERATED THE OBSERVATIONS OF T HE LEARNED AO AND ARGUED THAT NONE OF THE SPECIFIC QUERIES RAISED BY THE LEARNED AO REGARDING THE TRANSACTIONS WITH M/S BHUSHAN POWER & STEEL LTD GROUP OF CASES WERE A NSWERED BY THE ASSESSEE. HE FURTHER ARGUED THAT THE REPLY OF THE ASSESSEE TO TH E SHOW CAUSE NOTICE CONTAINING SPECIFIC QUERIES WERE VERY VAGUE AND GENERAL IN NAT URE WITHOUT ASSAILING THE SPECIFIC ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 11 DOCUMENTS. HE ARGUED THAT THE EMPLOYEES FROM WHOM STATEMENTS WERE RECORDED BY THE SURVEY TEAM WERE EMPLOYEES OF THE ASSESSEE AND THEY ARE NAME LENDERS AND WERE ACTING AT THE BEHEST OF THE ASSESSEES INSTRUCTIONS . HE ARGUED THAT THOUGH THEY HAD RETRACTED THEIR STATEMENTS AT A LATER POINT OF TIME , THEIR CONFESSION THOUGH RETRACTED WOULD AMOUNT TO ADMISSION WHICH WOULD BIND ON THE A SSESSEE. HE PLACED RELIANCE ON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RAKESH MAHAJAN VS CIT REPORTED IN 214 CTR 218 (P&H) WHEREIN IT WAS HELD THAT :- IT IS WELL SETTLED THAT ADMISSIONS CONSTITUTE BEST PIECE OF EVIDENCE BECAUSE ADMISSIONS ARE SELF-HARMING STATEMENTS MADE BY THE MAKER BELIEVING IT TO BE BASED ON TRUTH. IT IS WELL KNOWN THAT NO ONE WI LL TELL A LIE ESPECIALLY HARMING ONES OWN INTEREST UNLESS SUCH A STATEMENT IS TRUE. HE ARGUED THAT THE LEARNED CIT(A) HAD HELD THAT MAT ERIALS IN SURVEY DO NOT CONCLUSIVELY ESTABLISH THAT 31 COMPANIES WERE DUMMY AND MANAGED BY ASSESSEE AND NO LINKAGE WAS PROVED BY THE LEARNED AO AND EVEN AS SUMING THAT ASSESSEE HAS MANAGED THE SAID COMPANIES, NO PROOF FOR DERIVING C OMMISSION INCOME WAS BROUGHT ON RECORD BY THE LEARNED AO. IN THIS REGARD, HE PL ACED RELIANCE ON PAGES 6 TO 9 OF THE ASSESSMENT ORDER WHEREIN SPECIFIC QUERIES WERE RAIS ED BY THE LEARNED AO TO ASSESSEE IN THE SHOW CAUSE NOTICE EXPLAINING THE LINK OF THE ASSESSEE VIS A VIS THE SAID COMPANIES. HE ARGUED THAT THE ASSESSEE HAD NOT DISC LAIMED THESE DOCUMENTS AND HENCE PRESUMPTION U/S 132(4A) OF THE ACT WOULD LIE AGAINS T THE ASSESSEE. HE PLACED RELIANCE ON THE DECISION OF THE HONBLE CHATTISGARH HIGH COURT IN THE CASE OF CIT V S D.R.BANSAL & ORS REPORTED IN (2010) 327 ITR 44 (CHA TTISGARH) ON THE APPLICABILITY OF PRESUMPTION U/S 132(4A) TO ASSESSMENT PROCEEDINGS. HE FURTHER ARGUED THAT IN PAGE 7 OF THE ASSESSMENT ORDER VIDE QUESTION XVI) OF SHOW CAUSE NOTICE ISSUED TO ASSESSEE , THE LEARNED AO HAD BROUGHT TO THE NOTICE OF THE ASSESSE E OF ONE LETTER DATED 10.2.2010 ADDRESSED BY ONE MR.R.K.GUPTA, VICE PRESIDENT & COM PANY SECRETARY OF M/S BHUSHAN POWER & STEEL LTD VIDE DOCUMENT PMCM/17 IMP OUNDED DURING SURVEY. BASED ON THIS, IT WAS ARGUED THAT HOW DOES A PERSON BY NAME MR.R.K.GUPTA , WHO IS ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 12 STATIONED IN DELHI, IS AWARE OF THE FACT THAT THE S AID COMPANIES BELONG TO MR.S.M.NAHATA (ASSESSEE HEREIN). 6. IN RESPONSE TO THIS , THE LEARNED AR ARGUED THA T THE ASSESSEE HAD CLEARLY REPLIED TO THE SHOW CAUSE NOTICE THAT HE HAS BEEN RENDERING VA RIOUS SERVICES AS A CHARTERED ACCOUNTANT TO THOSE COMPANIES AND ACCORDINGLY THEIR PAPERS WERE FOUND IN HIS PREMISES WHICH IS NOT UNUSUAL. IT WAS ARGUED THAT ROC SITE DOES NOT CONTAIN ANY DATA TO PROVE THAT THE TRANSACTIONS ARE MERELY ACCOMMODATION ENTR IES WHICH WAS HEAVILY RELIED UPON BY THE LEARNED AO. IT WAS ARGUED THAT THE LEARNED AO STATES THAT IT WAS GATHERED THAT THE PREVALENT MARKET RATES OF COMMISSION VARIES FRO M 0.25% TO 0.55% OF THE TRANSACTIONS WHICH DOES NOT IN ANY WAY FLOW FROM AN Y OF THE SEIZED DOCUMENTS FOUND DURING THE SEARCH OR SURVEY. HE STATED THAT NO ADD ITION COULD BE MADE WITHOUT ANY REFERENCE TO ANY SEIZED MATERIAL. IN SUPPORT OF TH IS, HE PLACED RELIANCE ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS CON TINENTAL WAREHOUSING CORPORATION REPORTED IN (2015) 374 ITR 645 (BOM) AND THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT VS SHANT I KUMAR SURANA IN IT(SS) A NOS. 12 TO 16/KOL/2012 DATED 22.6.2015 . HE ALSO PLACED ON RECORD A COPY OF THE LEARNED CITA ORDER PASSED IN ONE OF THE 24 COMPANIES LISTED IN THE ASSESSMENT ORDER BY THE LEARNED AO I.E M/S ASCENT VYAPAAR PVT LTD WHEREIN, THE LEARNED CITA HAD GIVEN A CATEGORICAL FINDING THAT THE SAID COMPANY IS A GENU INE COMPANY IN EXISTENCE VIDE HIS ORDER IN APPEAL NO. 455/CC-VIII/CIT(A)C-I/12-13 DAT ED 18.2.2014. IT WAS FURTHER ARGUED THAT THE ASSESSEE NEVER MADE ANY CONFESSION OR ADMISSION AT ANY STAGE AS COULD BE EVIDENT FROM THE REPLIES FILED BY THE ASSESSEE C LEARLY DEMONSTRATING THE CIRCUMSTANCES UNDER WHICH THE DETAILS OF THOSE COMP ANIES WERE FOUND IN HIS PREMISES. HENCE THE DECISION RELIED UPON BY THE LEARNED DR IN THIS REGARD IS NOT AT ALL RELEVANT. HE ALSO ARGUED BY PLACING RELIANCE ON PAGES 54 AND 56 OF THE PAPER BOOK WHEREIN THE EMPLOYEES OF THOSE COMPANIES HAD AGREED TO OFFER TH E COMMISSION INCOME ON THE TRANSACTIONS IN THEIR COMPANIES AS THEIR RESPECTIVE INCOME AND ADMITTEDLY NO ACTION WAS TAKEN ON THOSE EMPLOYEES BY THE REVENUE WHO WER E WILLING TO OFFER THE SAME AS ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 13 THEIR INCOME. HE FURTHER ARGUED THAT NO EVIDENCE T O PROVE THAT ASSESSEE IS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. HE PLACED RELIANC E IN THIS REGARD ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS E MERALD COMMERCIAL LTD & ANR REPORTED IN (2002) 250 ITR 539 (CAL) . HE FURTHER ARGUED THAT NO ADDITION WAS MADE BY THE LEARNED AO FOR THE VARIOUS FIGURES MENT IONED IN PAGE 6 QUESTION NO. XIII) OF THE ASSESSMENT ORDER INVOLVING THE TRANSACTIONS OF ALLEGED ACCOMMODATION ENTRIES. HE ARGUED THAT THE LEARNED AO HAD ADMITTED THAT THE FIGURES MENTIONED IN PAGE 6 OF HIS ASSESSMENT ORDER PERTAIN TO THOSE COMPANIES WHI CH WERE NOT DOUBTED BY HIM. HAVING DONE SO, HOW CAN HE ADD THE COMMISSION INCOM E ON THOSE ACCOMMODATION ENTRIES ESPECIALLY WHEN THERE WAS NO EVIDENCE ON RE CORD TO PROVE THAT THE ASSESSEE WAS ENGAGED IN SUCH BUSINESS AND EARNING COMMISSION INC OME THEREON. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS IN SUPPORT OF HIS VARIOU S CONTENTIONS:- A) DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN T HE CASE OF DCIT VS M/S P.N.R.HOLDINGS P LTD IN ITA NOS. 61-62 /KOL OF 2011 DATED 26.8.2011. B) DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN T HE CASE OF DCIT VS M/S GLAMOUR VANIJYA PVT LTD IN ITA NOS. 308-309 /KOL OF 2011 DATED 7.3.2012. C) DECISION OF CO-ORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF DCIT VS WINSOME FINANCE PVT LTD IN ITA NOS. 6457 & 6458/DEL /2013 DATED 30.9.2015. D) DECISION OF CO-ORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF SUPREME POLYPROPOLENE P LTD VS ITO IN ITA NO. 4622/DEL/2009 DATED 28.2.2010. E) DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS FAQIR CHAND CHAMAN LAL REPORTED IN (2003) 262 ITR 295 (P& H). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE PRIMARY FACTS STATED HEREINABOVE REMAIN UNDISPU TED AND HENCE THE SAME ARE NOT REITERATED FOR THE SAKE OF BREVITY. WE FIND THAT THE VALUABLES SUCH AS CASH AND JEWELLERY FOUND IN THE COURSE OF SEARCH AND SURVEY HAVE BEEN TREATED AS EXPLAINED BY THE LEARNED AO. THE DETAILS OF 21 BANK ACCOUNTS W ERE ALSO FOUND IN THE SEARCH AND SURVEY OPERATIONS WHICH WERE EXPLAINED AT THE ASSES SMENT STAGE THAT ALL THE BANK ACCOUNTS WERE DULY DISCLOSED IN THE REGULAR BOOKS O F ACCOUNTS OF ACCOUNT HOLDERS WHICH HAS BEEN ACCEPTED BY THE LEARNED AO. ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 14 7.1. WE FIND THAT THE ASSESSEE HAD SUBMITTED AT EV ERY STAGE THAT HE WAS ACTING AS CONSULTANT LOOKING AFTER ACCOUNTS, FINANCE, AUDIT, INCOME TAX OF ALL THOSE COMPANIES AND RECEIVED FEES FROM THE 31 COMPANIES INCLUDING T HAT OF BHUSHAN GROUP OF COMPANIES ON A MONTHLY BASIS. WE FIND THAT THE LEA RNED CIT(A) HAD RECORDED THAT THE ASSESSEE WAS ALSO RENDERING VARIOUS SERVICES TO THO SE COMPANIES IN RELATION TO INVESTMENT MADE BY THEM BY WAY OF SHARE APPLICATION AS ALSO IN STRUCTURING / RESTRUCTURING OF THEIR ASSETS / CAPITAL BASE AND IN LIEU OF SUCH SERVICES, THE ASSESSEE HAD RECEIVED HIS PROFESSIONAL FEES WHICH IS A MATTER OF RECORD. THEREFORE THERE WAS NOTHING SURPRISING FOR ANYBODY IF SUCH PAPERS WERE FOUND WI TH THE ASSESSEE OR IN HIS OFFICE. WE FIND THAT CERTAIN DEPOSITIONS WERE ALSO TAKEN F ROM THE EMPLOYEES, PEONS AND DIRECTORS OF CERTAIN COMPANIES NAMELY MR SANDIP BEJ , MR RADHA KANT TIWARI, MR UJJWAL DAS AND MR BALDEO SINGH. WE AGREE WITH THE ARGUMENTS OF THE LEARNED AR THAT WHEN THE ASSESSEE WAS ACTING AS A CONSULTANT O F THOSE COMPANIES, THOSE PEOPLE MUST HAVE COME IN CONTACT OF THE ASSESSEE ON DAY TO DAY BASIS AND ACCORDINGLY THOSE EMPLOYEES COULD HAVE FRAMED AN OPINION THAT THE ASS ESSEE IS THE DEFACTO MANAGEMENT OF THOSE COMPANIES. IN ANY CASE THE OPINION FORME D BY THOSE EMPLOYEES IS NOT IN THE DOMAIN OR CONTROL OF THE ASSESSEE. WE HOLD THAT TH IS ASPECT ALONE DOES NOT PROVE OR ESTABLISH THAT THE ASSESSEE WAS OTHERWISE CONCERNED WITH THOSE PEOPLE OR THE COMPANIES FOR ARRANGING ALLEGED ACCOMMODATION ENTRI ES. WE FIND THAT THE LEARNED AO HAD PLACED RELIANCE ON STATEMENTS OF CERTAIN EMP LOYEES OF THOSE COMPANIES WHICH WERE LATER RETRACTED AND WHICH WERE NOT SUPPORTED B Y ANY COGENT MATERIAL ON RECORD. WE FIND THAT JUST BECAUSE THESE EMPLOYEES HAVE RETR ACTED THEIR STATEMENTS, THAT CANNOT BE THE BASIS FOR DRAWING ADVERSE INFERENCES AGAINST THE ASSESSEE. HENCE THE VARIOUS ARGUMENTS OF THE LEARNED DR TOGETHER WITH THE RELEV ANT CASE LAWS ON THIS ASPECT NEED NOT BE ADJUDICATED AT ALL AS ADMITTEDLY NO ACTION W AS TAKEN BY THE REVENUE ON THE SAID EMPLOYEES WHO HAD RETRACTED FROM THEIR STATEMENTS. ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 15 7.2. WE FIND THAT THE LEARNED AO HAD RELIED ON THE DETAILS AVAILABLE ON ROC SITE AND CONCLUDED THAT THE TRANSACTIONS OF THESE COMPANIES ARE IN THE NATURE OF ACCOMMODATION ENTRIES. IT IS QUITE STRANGE TO ACCEPT THE VERSION OF THE LEARNED AO THAT THE WEBSITE OF ROC CONTAINS DETAILS OF ACCOMMODATION ENTRIES PROVI DED BY PARTIES. THE LEARNED AO HAD ONLY VERIFIED THE BALANCE SHEETS TOGETHER WITH THE LIST OF SHAREHOLDERS AND DIRECTORS AS AVAILABLE IN THE ROC WEBSITE. THESE DETAILS WOU LD NOT IN ANY WAY LEAD TO A CONCLUSION THAT WOULD BE TENABLE IN LAW THAT THE TR ANSACTIONS ARE MERELY ACCOMMODATION ENTRIES. IN ANY CASE, THE DETAILS A VAILABLE IN ROC WEBSITE DOES NOT CONSTITUTE ANY SEARCH MATERIALS. WE HOLD THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE LEARNED AO BY WAY OF DOCUMENTARY PROOF TO SH OW THAT ASSESSEE WAS IN ANY WAY INVOLVED WITH THESE COMPANIES FINANCIALLY EXCEP T ACTING AS A CONSULTANT FOR THE COMPANIES IN CONSIDERATION OF WHICH , PROFESSIONAL FEES WERE RECEIVED BY THE ASSESSEE. 7.3. WITH REGARD TO THE DECISION RELIED UPON BY TH E LEARNED DR ON THE HONBLE CHATTISGARH HIGH COURT IN THE CASE OF CIT VS D.R.BA NSAL & ORS REPORTED IN 327 ITR 44, WE FIND THAT THOUGH THE PRESUMPTION U/S 132(4A) OF THE ACT IS APPLICABLE TO ASSESSMENT PROCEEDINGS, WE FIND THAT THE ASSESSEE H AD CATEGORICALLY REPLIED IN HIS LETTER BEFORE THE LEARNED AO TO THE SHOW CAUSE NOTICE THAT THE RELATIONSHIP BETWEEN HIM AND THE VARIOUS COMPANIES WERE ONLY ON ACCOUNT OF PROFE SSION AND NOT OTHERWISE AND IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS BEEN RENDERING VARIOUS PROFESSIONAL SERVICES TO THOSE COMPANIES AND RECEIVING PROFESSIONAL FEES FOR THE SAME WHICH ARE MATTER ON RECORD. WE FIND THAT THE ASSESSEE HAD CLEARLY DEMO NSTRATED THE CIRCUMSTANCES UNDER WHICH THE DOCUMENTS OF THOSE COMPANIES WERE FOUND I N HIS PREMISES. HENCE THE ARGUMENT OF THE LEARNED DR THAT NO REPLY WAS FILED BY THE ASSESSEE AS TO HOW THESE DOCUMENTS WERE FOUND IN HIS PREMISES DOES NOT HOLD WATER AS IT IS CONTRARY TO THE EVIDENCES AVAILABLE ON RECORD. 7.4. WE FIND THAT THE LEARNED AR HAD PLACED ON REC ORD A COPY OF THE LEARNED CITA ORDER PASSED IN ONE OF THE 24 COMPANIES LISTED IN T HE ASSESSMENT ORDER BY THE LEARNED ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 16 AO I.E M/S ASCENT VYAPAAR PVT LTD WHEREIN, THE LEAR NED CITA HAD GIVEN A CATEGORICAL FINDING THAT THE SAID COMPANY IS A GENU INE COMPANY IN EXISTENCE VIDE HIS ORDER IN APPEAL NO. 455/CC-VIII/CIT(A)C-I/12-13 DAT ED 18.2.2014. NO CONTRARY EVIDENCE TO THIS EFFECT HAS BEEN BROUGHT TO OUR NOT ICE BY THE REVENUE IN THIS REGARD. 7.5. WE FIND THAT THE FOLLOWING DECISIONS SUPPORTS THE CASE OF THE ASSESSEE :- (I) PULLANGODE RUBBER PRODUCE CO. VS STATE OF KERAL A AND ANR (1973) 90 ITR 18 (SC) THE HONBLE SC HAS OBSERVED THAT AN ADMISSION IS A N EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIV E. IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. (II) PAUL MATHEWS & SONS VS CIT REPORTED IN (2003) 263 ITR 101 (KER) THE EVIDENTIARY VALUE OF STATEMENT RECORDED U/S 132 (4) IS VERY HIGH SINCE EXAMINATION IS ON OATH. STATEMENT DURING SURVEY HAS NO EVIDENT IARY VALUE. IT WAS HELD THAT STATEMENT DURING SURVEY DOES NOT GIVE THE SAME STAT US OF EVIDENCE. SECTION 132(2) SPECIFICALLY STATES THAT SUCH STATEMENT CAN BE USED AS EVIDENCE IN ANY PROCEEDINGS UNDER THE ACT. (III) CIT VS S.KHADER KHAN SON REPORTED IN (2008) 3 00 ITR 157 (MAD) HELD THAT :- AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EV IDENCE , BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PE RSON , WHO MADE IT, TO SHOW IT HAS INCORRECTLY BEEN MADE AND THE PERSON, MAKING TH E STATEMENT SHOULD BE GIVEN PROPER OPPORTUNITY TO SHOW THAT IT DOES NOT S HOW THE CORRECT STATE OF FACTS. THE MATERIALS FOUND IN THE COURSE OF SURVEY COULD N OT BE THE BASIS FOR MAKING ANY ADDITION IN THE ASSESSMENT. THE WORD MAY USED IN SECTION 133A(3)(III) MAKES IT CLEAR THAT THE MATERIAL COLLECTED AND STATEMENT REC ORDED DURING THE SURVEY U/S 133A ARE NOT CONCLUSIVE PIECE OF EVIDENCES BY ITSELF. ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 17 THE AFORESAID DECISION WAS AFFIRMED BY THE HONOURABLE SUPREME COURT IN CIT , SALEM VS S.KHADER KHAN IN CIVIL APPEAL NO. 13224 OF 2008 & 6747 OF 2012 DATED 20.9.2012 , WHEREIN THEIR LORDSHIPS OF SUPREME COURT HELD AS UN DER:- HEARD COUNSEL ON BOTH THE SIDES. LEAVE GRANTED. THE CIVIL APPEAL FILED BY THE DEPARTMENT PERTAINS T O ASSESSMENT YEAR 2001-02. IN VIEW OF THE CONCURRENT FINDINGS OF FACT, THIS CI VIL APPEAL IS DISMISSED. (IV) ACIT VS SHANTI KUMAR SURANA REPORTED IN (2015) 44 CCH 0241 KOLTRIB IN IT(SS) A NOS. 12 TO 16/KOL/2012 , 140&141/KOL/2011 , 17 TO 19/KOL/2012 DATED 22.6.2015, WHEREIN THE HEAD NOTES ARE REPRODUCED HEREUNDER:- SEARCH AND SEIZURENEW SCHEME OF ASSESSMENT IN SEAR CH CASES VALIDITY OF ASSESSMENT FRAMED U/S 153A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT RESIDENCES, OFFICE PREMISES AND BANK LOCKERS ON NUM BER OF INDIVIDUALS AND GROUP COMPANIES WITHIN SURANA GROUP OF CASES ASSESSEE WAS ONE OF PERSONS SEARCHED ASSESSEE IN RESPONSE TO NOTICE U/S 153A DISCLOSED R ETURN OF INCOME AT RS.3,05,880/ - FOR RELEVANT AY 2003-04 SEPARATE SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON RESIDENCE, OFFICE AND BUSINESS PRE MISES OF ''X '' WHO WAS CA AND HIS STATEMENT WAS RECORDED AO ADDED ALL SHARE APPLICATION MONEY AND LOANS AS UNEXPLAINED CASH CREDIT U/S 68 CONSEQUENTIAL DISALLOWANCE OF INTEREST ON LOANS AND DISALLOWANCE OF EXPENSES OF EXEMPTED INCOME BY INVOKING PROVISIONS OF SECTION 14A, IN IDENTICALLY WORDED ASSESSMENTS AO NOTED IN ASSESSMENT ORDER THAT STATEMENT OF ''X'', WAS ONE OF DIRECTORS IN CO MPANIES WHICH WERE FOUND TO BE INDULGED IN PROVIDING ACCOMMODATION ENTRIES TO STAT ED PERSON AO, TREATED SHARE APPLICATION AND LOANS AS INCOME OF ASSESSEE AGAINST UNACCOUNTED CASH CIT(A) DELETED ADDITION MADE BY AO CIT(A) HELD THAT THOSE ASSESSMENT YEARS COMPLETED ASSESSMENT COULD NOT BE ABATED IN TERM OF PROVISION OF SECTION 153A(1) HELD, ASSESSEE HAD OBTAINED LOANS/SHARE MONEY/PREMIUM IN A LL ASSESSMENT YEARS WHICH WERE UNDER APPEAL FACT THAT LOAN CONFIRMATIONS WERE ON RECORD ALONG W ITH BANK STATEMENTS IN SUPPORT OF FACT THAT TRANSACTIONS OF LOAN WERE BY CHEQUES ASSESSEE HAD COLLECTED STATEMENT OF AUDITED ACCOUNTS OF THOS E LIMITED COMPANIES, FROM WHERE ASSESSEE HAD OBTAINED LOANS, SAME WERE WITH R OC STATEMENTS OF ACCOUNT PROVED THAT THOSE LOAN CREDITORS THAT ALL OF THEM H AD FUNDS AND THEY HAD INVESTED IN SHARES AND LOANS OF ASSESSEE IN YEAR UNDER ASSES SMENTS IN ABSENCE OF ANY INCRIMINATING MA TERIAL FOUND DURING COURSE OF SEARCH ASSESSMENTS FR AMED U/S 153A RELATING TO ASSESSMENT YEARS UNDER APPEAL AND WHERE ORIGINAL ASSESSMENTS HAD NOT BEEN ABATED BECAUSE NO PROCEEDINGS WERE PEN DING IN THOSE ASSESSMENTS, ASSESSMENTS FRAMED WERE VALID OR NOTFOR THIS, SECOND PROVISO TO SECTION ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 18 153A(1)AO WAS EMPOWERED TO REOPEN THOSE PROCEEDING S AND RE- ASSESS TOTAL INCOME, TAKING NOTE OF UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING SEARCH AO HAD BEEN ENTRUSTED WITH DUTY OF BRINGING TO TAX TOT AL INCOME OF ASSESSEE WHOSE CASE WAS COVERED BY SECTION 153A, BY EVEN MAKING RE ASSESSMENTS WITHOUT ANY FETTERS ASSESSEE OBTAINED SEARCH OR REQUISITION U/S 132A A S CASE MIGHT BE THERE WAS NO INCRIMINATING MATERIAL FOUND DURING COURSE O F SEARCH IN PRESENT CASE FOR THOSE ASSESSME NT YEARS, EXCEPT STATEMENT OF ''X'' AS ADMITTED BY AO IN HIS REMAND REPORT DESPITE NUMBER OF OPPORTUNITIES REVENUE COULD NOT P RODUCE ANY INCRIMINATING MATERIAL BEFORE BENCH AND ASSESSMENTS WERE ALREADY COMPLETED FOR THOSE ASSESSMENT YEARS ORIGINALLY, ASSE SSMENTS FRAMED U/S. 153A OF THE ACT WAS IN VALID AND QUASHED REVENUE'S APPEAL DISMISSED. (V) CIT VS P.V.KALYANASUNDARAM REPORTED IN (2006) 2 82 ITR 259 (MAD) THE ASSESSEE HAD PURCHASED LAND ON OCT.26 1988 R EGISTERED FOR RS.4.10 LAKH FROM ONE RDURING THE COURSE OF SEARCH SOME NOT INGS HAD BEEN FOUND INDICATING A HIGHER CONSIDERATION. MR. R'S STATEMEN T WAS ALSO TAKEN. IN A SWORN STATEMENT ON 8TH DECEMBER, 1998 HE ADMITTED T HAT HE RECEIVED RS.34.85 LAKHS. IN ANOTHER SWORN STATEMENT ON 11TH DEC, 1998, R STATED THAT HE RECEIVED RS.34.85 LAKHS. SUBSEQUENTLY IN AN AFFIDAVIT GIVEN. ON 8TH JAN, 1999 HE MENTIONED THE SALE CONSIDERATION AT RS . 4.10 LAKH. THE CIT NOTED THAT DUE TO CONFLICTING NATURE OF STATEMENTS GIVEN BY SELLERS, HIS STATEMENT COULD NOT BE RELIED UPON AND DELETED THE SAID ADDITION. THE TRIBUNAL CONFIRMED THE FINDINGS OF THE CIT(A). ON A PPEAL THE MADRAS HIGH COURT HELD THAT THE BURDEN OF PROVING ACTUAL C ONSIDERATION IN SUCH A TRANSACTION WAS THAT OF THE REVENUE. THE AO DID NOT CONDUCT ANY INDEPENDENT ENQUIRY RELATING TO THE VALUE OF THE PR OPERTY PURCHASED. HE MERELY RELIED ON THE STATEMENT GIVEN BY THE SELLER. AS SUCH THE DELETION OF THE ADDITION WAS JUSTIFIED. (VI) CIT VS LALIT BHASIN REPORTED IN 290 ITR 245 (D EL) ASSESSEE PURCHASED A TICKET OF CALCUTTA STOCK EXCH ANGE FOR RS.50,000/-. THE AO TOOK THE VALUE OF TICKET AT RS. 11.5 LAKH ON THE BASIS OF THE PREVAILING MARKET PRICE AND ADDED RS.11 LAKH AS UNE XPLAINED INVESTMENT. THE DELHI HIGH COURT DELETED THE ADDITION ON THE GR OUND THAT AO ARRIVED AT CONCLUSION PRIMARILY ON IMAGINATIVE BASIS AND C ONJECTURES RATHER THAN ON THE BASIS OF ANY RECORD OR BOOKS OF ACCOUNT AND HENCE DELETED THE ADDITION. (VII) OMEGA ESTATES VS ITO REPORTED IN 106 ITD 427 (CHENNAI ITAT) AO RELYING ON SOME LETTERS GIVEN BY THE ASSESSEE T O PROSPECTIVE BUYERS ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 19 MENTIONING RATE OF FLATS AT RS. 1,250 PER SQ. FT CA LCULATED SALE RECEIPTS OF ALL FLATS AT THE SAID RATE. THE CHENNAI BENCH OF IT A T HELD THAT SINCE THE REVENUE COULD NOT PROVE THAT ACTUAL CONSIDERATION W AS MORE THAN THAT' RECORDED BY THE ASSESSEE AND SINCE BOOKS OF ACCOUNT HAD NOT BEEN REJECTED, THERE WAS NO BASIS OF MAKING THE ESTIMATE D ADDITION. (VIII) AMARJIT SINGH BAKSHI (HUF) VS ACIT REPORTED IN 263 ITR (AT) 75 (DELHI ITAT) A SEARCH WAS CONDUCTED AT THE PREMISES OF ONE MR. A AND THE AGREEMENT BETWEEN THE ASSESSEE AND MR. A WAS FOUND PERTAINING TO SALE OF 9.16 ACRES OF LAND, THE CONSIDERATION MENTIONED IN THE AGREEMENT WAS RS. 7.07 CRORE AS AGAINST THE CONSIDERATION OF RS.23.5 LAKHS DECLARED BY THE ASSESSEE. THE AO ADDED THE DIFFEREN CE OF ~.6.83 CRORE U / S. 69B. THE COURT HELD THAT THE PROVISIONS OF T HE INDIAN EVIDENCE ACT ARE NOT STRICTLY APPLICABLE TO THE PROCEEDINGS UNDER IT ACT BUT THE BROAD PRINCIPLES OF LAW OF EVIDENCE APPLY TO SUCH P ROCEEDINGS. NOTINGS ON LOOSE SHEETS OF PAPER ARE REQUIRED TO BE SUPPORT ED/ COLLABORATED 'BY OTHER EVIDENCE. A DISTINCTION ALSO NEEDS TO BE DRAW N BETWEEN SLIPS OF PAPER-OR LOOSE SHEETS FOUND FROM THE POSSESSION OF THE ASSESSEE AND SIMILAR DOCUMENTS FOUND FROM A THIRD PERSON. IN CAS E THE STATEMENT OF THE THIRD PERSON- IS RECORDED OR RELIED UPON THEN S UCH STATEMENT UNDOUBTEDLY HAS TO BE CONFRONTED TO THE ASSESSEE AN D HE IS TO BE ALLOWED AN OPPORTUNITY OF CROSS EXAMINATION. THE DE LHI IT AT BENCH SAID THAT THE ENTIRE ADDITION WAS BASED ON THE DOCU MENT FOUND BUT THERE WAS NO EVIDENCE TO SUPPORT REVENUE'S CASE THAT A HU GE FIGURE OVER AND ABOVE THE FIGURE BOOKED IN THE RECORDS AND ACCOUNTS CHANGED HANDS BETWEEN THE PARTIES AND THUS NO ADDITION COULD BE M ADE. THE ABOVE CASE CLEARLY ESTABLISH THAT MERELY ON ACCOUNT OF SU SPICION AND CONJECTURES WITHOUT ANY EVIDENCE OR PROOF THAT THE ASSESSEE ACTUALLY AND OR EVEN NOTIONALLY RECEIVED ANY COMMISSION ON A CCOUNT OF ALLEGED ACCOMMODATION ENTRIES, NO ADDITION CAN BE MADE. HENCE THE ADDITION MADE ON ACCOUNT OF COMMISSION RE CEIVED IN ANY OF THE YEAR IS WITHOUT ANY BASIS AND SHOULD BE DELETED . (IX) CIT VS FAQIR CHAND CHAMAN LAL REPORTED IN (200 3) 262 ITR 295 (P&H) . THE TRIBUNAL ALSO ORDERED DELETION OF THE ADDITION OF RS 21,00,000 MADE ON ACCOUNT OF INTEREST ALLEGEDLY EARNED BY THE ASSESSEE FROM PAWNING BUSINESS FOR THE ASSESSMENT YEARS 1986-87 TO 1996-9 7 BY ASSIGNING THE FOLLOWING REASONS: ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 20 'AFTER CONSIDERING THE ABOVEMENTIONED SUBMISSIONS O F LEARNED COUNSEL FOR BOTH THE PARTIES, WE ARE OF THE VIEW TH AT THE ASSESSING OFFICER, WHILE MAKING THE ADDITION WAS NOT SURE REGARDING TH E AMOUNT INVESTED BY THE ASSESSEE IN PAWNING BUSINESS ON THE ONE HAND, H E CALCULATED THE AMOUNT OF INTEREST AT RS 3,40,000 PER ANNUM AND, ON THE OTHER HAND, THE ADDITION HAS BEEN ESTIMATED AT RS 2,00,000 PER ANNU M IN OTHER WORDS, THE ENTIRE EXERCISE DONE BY THE ASSESSING OFFICER WAS M ERELY BASED ON CONJECTURES AND SURMISES HOWEVER, HE HAD NO BASIS T O ESTIMATE THE INTEREST INCOME AS REGARDS THE ADDITION FOR THE ASSESSMENT Y EAR 1986-87 IS CONCERNED, THE SAME IS NOT TENABLE IN VIEW OF OUR F INDINGS GIVEN IN RESPECT OF GROUNDS NOS 2 AND 3 AND ADDITIONAL GROUND, AS WE HAVE ALREADY HELD THAT THERE WAS NO PARTNERSHIP FIRM IN EXISTENCE IN THAT YEAR IN THAT VIEW OF THE MATTER, NO ADDITION WAS CALLED FOR IN THE ASSES SMENT YEAR 1986-87 AT THIS STAGE, WE MAY ALSO ADD THAT AS REGARDS THE OTHER YEARS ALSO, NO ADDITION IS CALLED FOR BECAUSE THERE IS NO MATER IAL ON RECORD FOR THE BASIS ON WHICH IT COULD BE SAID THAT THE-ASSESSING OFFICER WAS JUSTIFIED, IN HIS ACTION IT IS WELL SETTLED THAT THE PROVISIONS R ELATING TO SEARCH AND SEIZURE ARE INTENDED TO UNEARTH THE HIDDEN OR UNDISCLOSED I NCOME OR PROPERTY AND BRING IT TO TAXATION NET IT IS ALSO NOT IN DISPUTE THAT THE OBJECTIVE OF CHAPTER XIV-B IS TO GET HOLD OF EVIDENCE HAVING BEARING ON THE TAX LIABILITY OF A PERSON WHICH THE SAID PERSON IS SEEKING TO WITHHOLD FROM THE ASSESSING OFFICER BUT THE SCHEME OF CHAPTER XIV-B DOES NOT GI VE POWER TO THE REVENUE TO DRAW PRESUMPTION IN REGARD TO THE UNDISC LOSED INCOME IT IS ALSO A WELL SETTLED PROPOSITION THAT THE PRESUMPTION HOW SOEVER STRONG CANNOT SUBSTITUTE EVIDENCE AND IF THERE IS NO DIRECT NEXUS ON THE POINT, NO ADDITION IN BLOCK ASSESSMENT CAN BE MADE IN THE INSTANT CASE ALSO, THERE WAS NO EVIDENCE WITH THE ASSESSING OFFICER IN SUPPORT OF H IS CONTENTION THAT THE ASSESSEE, IN FACT, EARNED THE INCOME BY WAY OF INTE REST AMOUNTING TO RS 2 LAKHS EACH YEAR FROM THE ASSESSMENT YEARS 1986-87 T O 1995-96 AND RS 1 LAKH IN THE ASSESSMENT YEAR 1996-97 IN INSTANT CASE , IT IS NOT IN DISPUTE THAT THE CLOSED INCOME WAS WORKED OUT BY THE ASSESSING O FFICER ON AN ESTIMATED BASIS BUT IN A BLOCK ASSESSMENT GENERALLY ESTIMATED ADDITIONS CANNOT BE JUSTIFIED IN THAT VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION ON THE BASIS OF ESTIMATE ONLY WE, THEREFORE, DELETE THE SAME' DR NL SHARDA COULD NOT POINT OUT ANY INFIRMITY IN T HE APPRECIATION OF EVIDENCE MADE BY THE TRIBUNAL OR THE REASONS ASS IGNED BY IT FOR DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER THEREFO RE, NONE OF THE QUESTIONS, OF WHICH DETERMINATION HAS BEEN SOUGHT B Y THE REVENUE, CAN BE TREATED AS A SUBSTANTIAL QUESTION OF LAW ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 21 HENCE, THE APPEAL IS DISMISSED. THE OTHER DECISIONS RELIED UPON BY THE LEARNED AR D OES NOT REQUIRE ANY REFERENCE AS THE SAME ARE OTHERWISE COVERED IN THE AFORESAID CAS ES RELIED HEREIN. 7.6. TO SUM UP , WE FIND THAT (I) NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE R EVENUE TO PROVE THAT THE TRANSACTIONS OF 24 COMPANIES WITH BHUSHAN GROUP OF COMPANIES ARE ACCOMMODATION ENTRIES. NO MATERIAL HAS BEEN BROUGHT ON RECORD T O PROVE THAT THE SAID COMPANIES WERE ACTUALLY ENGAGED IN PROVIDING ACCOMMODATION EN TRIES. (II) NO MATERIAL HAS BEEN FOUND IN SEARCH OR SURVEY TO CONCLUSIVELY ESTABLISH THAT ALL THE 24 COMPANIES ARE DUMMY AND THE ASSESSEE HAD MAN AGED AND CONTROLLED THEIR FINANCIAL AFFAIRS. THE LEARNED AO HAD ALLEGED THAT CHEQUES WERE ISSUED IN LIEU OF CASH RECEIVED. BUT THEN, THERE WAS NO RECOVERY OF UNACC OUNTED CASH DURING THE SEARCH OR SURVEY OPERATIONS. (III) NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO PROVE THAT THE ASSESSEE HAD EARNED COMMISSION INCOME @ 0.55% ON THESE ALLEG ED ACCOMMODATION ENTRIES. MOREOVER, THE RECEIPT OF COMMISSION INCOME OF RS. 1 .66 CRORES FOR ALL THE ASST YEARS PUT TOGETHER AS ASSESSED BY THE LEARNED AO IS NOT M ATCHED BY RECOVERY OF UNDISCLOSED ASSETS OR DOCUMENTS INDICATING UNDISCLOSED EXPENDIT URE WHICH WERE FOUND DURING SEARCH AND SURVEY OPERATIONS. (IV) NO MATERIAL WAS FOUND IN SEARCH AND SURVEY OPE RATIONS WHICH WOULD PROVE THAT THE ASSESSEE WAS MANAGING OR CONTROLLING THE 24 COMPANI ES EXCEPT PLACING RELIANCE ON STATEMENTS OF CERTAIN EMPLOYEES OF THOSE COMPANIES WHICH WERE LATER RETRACTED BY THEM. ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 22 (V) NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE R EVENUE TO PROVE THAT SUFFICIENT ACTION WAS TAKEN BY THE REVENUE ON THE EMPLOYEES WH O HAD RETRACTED THE STATEMENTS AND WHO HAD ALSO ORIGINALLY OFFERED TO PAY TAX ON T HE COMMISSION INCOME DERIVED BY THEM. (VI) NO EXAMINATION WAS CARRIED OUT BY THE REVENUE WITH MR.R.K.GUPTA , VICE PRESIDENT AND COMPANY SECRETARY OF M/S BHUSHAN POWE R & STEEL LTD WHO HAD ADDRESSED A LETTER DATED 10.2.2010 STATING THAT DOC UMENTS LIKE MEMORANDUM OF SALE OF SHARES, DELIVERY OF SHARE CERTIFICATES ETC ARE BEIN G SENT FOR GETTING SIGNATURE FROM DIRECTORS OF RESPECTIVE COMPANIES OF MR.S.M.NAHATA. THIS LETTER WAS ADMITTEDLY ADDRESSED BY MR.R.K.GUPTA TO ONE OF THE EMPLOYEE OF THOSE COMPANIES WHICH WERE FOUND IN THE OFFICE PREMISES OF THE ASSESSEE. TH E ASSESSEE HAD ALREADY DEMONSTRATED THE CIRCUMSTANCES UNDER WHICH THE PAPERS OF THOSE C OMPANIES HAD COME TO HIS POSSESSION I.E IN HIS PROFESSIONAL CAPACITY. (VII) NO EVIDENCES HAS BEEN BROUGHT ON RECORD BY TH E LEARNED AO EXCEPT ALLEGING THAT THE MONEY WAS ROUTED IN THE BANK ACCOUNT OF THE COM PANIES THROUGH OTHER BANK ACCOUNTS. BUT THEN THE ONUS WAS ON THE LEARNED AO T O DISCOVER SUCH BANK ACCOUNTS AND ESTABLISH THE MONEY TRAIL. (VIII) THE LEARNED AO HAS FAILED TO POINT OUT ANY B ANK ACCOUNT IN WHICH CASH WAS INITIALLY DEPOSITED. (IX) THE ROC WEBSITE DOES NOT CONTAIN THE NATURE OF TRANSACTIONS EXCEPT CONTAINING THE BALANCE SHEET, LIST OF DIRECTORS AND SHAREHOLDERS. HENCE FROM THE SAID WEBSITE, IT IS VERY STRANGE THAT HOW THE LEARNED AO WAS ABLE TO CO NCLUDE THAT THE TRANSACTIONS ARE ACCOMMODATION ENTRIES. ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 23 (X) THE VALUABLE ASSETS FOUND DURING THE SEARCH AND SURVEY SUCH AS CASH AND JEWELLERY HAVE BEEN PROPERLY EXPLAINED BY THE ASSESSEE AND NO ADDITION HAS BEEN MADE ON THAT ACCOUNT BY THE LEARNED AO. THE DETAILS OF 21 BANK A CCOUNTS WERE ALSO FOUND IN THE SEARCH AND SURVEY OPERATIONS WHICH WERE EXPLAINED A T THE ASSESSMENT STAGE THAT ALL THE BANK ACCOUNTS WERE DULY DISCLOSED IN THE REGULAR BO OKS OF ACCOUNTS OF ACCOUNT HOLDERS WHICH HAS BEEN ACCEPTED BY THE LEARNED AO. (XI) THERE WAS NO DISCOVERY OF ANY BANK ACCOUNT WHE REIN THE COMMISSION ALLEGEDLY RECEIVED BY THE ASSESSEE WAS FOUND DEPOSITED. (XII) THE ENTIRE ADDITION HAS BEEN MADE BY THE LEAR NED AO ONLY BASED ON MERE SUSPICION, SURMISES AND CONJECTURES. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES, F INDINGS GIVEN THEREON AND JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE FIND NO INFI RMITY IN THE ORDER OF THE LEARNED CIT(A) AND ACCORDINGLY THE GROUNDS RAISED BY THE RE VENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 -5 -2016. SD/- (N.V.VASUDEVAN, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 11 -5 -2016 ITA NOS. 1898- 1903/KOL/2012-B-AM SHREE SAGAR MAL NAHTA 24 1.. THE APPELLANT/DEPARTMENT: THE DCIT, CC-VIII, R OOM NO. 403, 4 TH FLOOR AAYKAR BHAWAN POORVA, 3 RD FL., 110 SHANTIPALLY KOLKATA-107. 2 THE RESPONDENT/ASSESSEE: SHRI SAGAR MAL NAHATA 110 SOUTHERN AVENUE, 8 TH FL.,KOLKATA-700 029. 3 /THE CIT, 4.THE CIT(A ) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS COPY OF THE ORDER FORWARDED TO:-