M/s Kuber Lighting Pvt. Ltd., Indore V. The Addl. CIT, Range-2, Indore

ITA 204/IND/2013

• Counselvise Citation: 20422714 RSA 2013
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 15-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Unexplained cash credit; Business expenditure; Loose papers; Peak credit; Accommodation entries
• Section: 143(3); 133A; 153A; 132; 68

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 204/IND/2013 A.Y.2006-07 M/S KUBER LIGHTING PVT. LTD. INDORE PAN AABCK 3952F :: APPELLANT VS ADDL. COMMISSIONER OF INCOME TAX RANGE 2, INDORE :: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 1.8.2013 DATE OF PRONOUNCEMENT 2.8.2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER D ATED 21 ST FEBRUARY, 2013 OF THE LEARNED FIRST APPELLATE AUTHO RITY. THE ONLY GROUND RAISED PERTAINS TO CONFIRMING THE ADDITION O F RS. 20 LACS 2 AND RS. 1,09,204/- MADE U/S 68 OF THE ACT ON ACCOUN T OF CREDITS IN THE NAME OF M/S PARTH CREDIT & CAPITAL MARKET LI MITED. 2. AT THE TIME OF HEARING, WE HAVE HEARD SHRI S.S. DESHPANDE, LEARNED COUNSEL FOR THE ASSESSEE, AND SHRI R.A. VER MA, LEARNED SENIOR DR. MR. VERMA AT THE OUTSET POINTED OUT THAT THE IMPUGNED ISSUE IS COVERED AGAINST THE ASSESSEE BY T HE DECISION OF THE TRIBUNAL IN THE CASE OF ACIT VS. M/S NARMADA EX TRUSION LIMITED, ETC. (IT(SS) A NOS. 3 TO 7/IND/2011 ETC.) DATED 30 TH DECEMBER, 2011 (COPY AVAILABLE AT PAGES 44 TO 99 OF THE PAPER BOOK). THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE ASSESSEE AND NO COGENT MATERIAL WAS BROUGHT ON RECORD CONTRA VENING THE ASSERTION MADE BY THE LEARNED SENIOR DR. 2.1 IN VIEW OF THE AFORESAID ASSERTION/ADMISSION, W E ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE O RDER OF THE TRIBUNAL (SUPRA):- THESE APPEALS & CROSS-OBJECTIONS ARE FILED BY THE ASSESSEES AND REVENUE AGAINST THE DIFFERENT ORDERS OF LD. CIT(A)-UJJAIN, DATED 22.3.2011 FOR TH E ASSESSMENT YEARS AS MENTIONED ABOVE IN THE MATTER OF ORDERS PASSED U/S 153A R.W.S. 143(3) OF THE I.T. ACT, 1961. 2. IN DEPARTMENTAL APPEALS, THE FOLLOWING COMMON GROUNDS HAVE BEEN RAISED: - 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN: - 1. DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF UNSECURED LOAN U/S 68 OF THE I.T. ACT BY WAY OF ACCOMMODATION ENTRIES OBTAINED BY THE ASSESSEE FROM LUNKAD GROUP. 2. DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF INTEREST EXPENSES BEING PAID FOR ACCOMMODATION ENTRIES OBTAINED FROM LUNKAD GROUP WHICH HAS BEEN RECEIVED BACK IN CASH FROM THE OPERATOR. 3. DELETING THE ADDITION MADE U/S 69A OF THE I.T. ACT ON ACCOUNT OF UNEXPLAINED SOURCE OF EXPENSES INCURRED FOR THE PAYMENT OF COMMISSION TO LUNKAD GROUP FOR PROVIDING ACCOMMODATION ENTRIES @5% AS OUT OF BOOK EXPENDITURE. 3. WHEREAS, IN THE CROSS-OBJECTIONS, THE FOLLOWING COMMON GROUNDS HAVE BEEN RAISED: - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ACT OF AO IN ISSUING NOTICE U/S 153A OF THE I.T. ACT FOR THE YEARS UNDER CONSIDERATION EVEN WHEN NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM THE POSSESSION OF THE ASSESSEES DURING THE COURSE OF SEARCH. THUS THE NOTICES AS ISSUED U/S 153A OF THE I.T. ACT AND ASSESSMENTS FRAMED ACCORDINGLY REQUIRE TO BE QUASHED ON THIS ACCOUNT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ACT OF AO IN MAKING ADDITIONS IN THE CASE OF ASSESSEES IN RESPECT OF CASH CREDIT EVEN WHEN THE ENTIRE AMOUNTS OF CASH CREDIT WERE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEES PRIOR TO THE DAT E OF SEARCH AND NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM THE POSSESSION OF THE ASSESSEES. THUS, THE ADDITIONS MADE IN THE CASE OF THE ASSESSEES IN RESPECT OF CASH CREDITS ON THE BASIS OF INFERENCES AND PRESUMPTIONS AND THAT TOO 4 IN THE 153A PROCEEDINGS ARE WRONG. THE SAME REQUIRE TO BE DELETED IN FULL. 4. COMMON GROUNDS RAISED BY THE REVENUE IN ALL THE YEARS RELATES TO DELETION OF ADDITION ON ACCOUN T OF UNSECURED LOAN U/S 68 OF THE INCOME-TAX ACT, 1961, WHICH WAS ALLEGED TO BE TAKEN BY THE ASSESSEE BY WAY OF ACCOMMODATION ENTRIES FROM LUNKAD GROUP. 5. FACTS IN BRIEF ARE THAT A SEARCH U/S.132 OF THE INCOME TAX ACT, 1961, WAS CONDUCTED AT THE BUSINESS AND OFFICE PREMISES OF ASSESSEE GROUP [KNOWN AS MITTAL GROUP] ON 05.10.2006. DURING THE COURSE OF SEARCH, THE ASSESSEE GROUP SURRENDERED ADDITIONAL INCOME OF RS. 2 CRORES AND DISCLOSED THE SAME UNDER VARIOUS HEADS IN THE HANDS OF SHRI MAHESH MITTAL AND SHRI PRAVEEN MITTAL IN A.Y.2007 -08. THE ADDITIONAL INCOME ON THOSE HEADS SO SURRENDERED WERE ACCEPTED AS IT IS. HOWEVER, WHILE COMPLETING THE ASSESSMENT, IN PURSUANCE TO NOTICES U/S.153A FOLLOWING THE SEARCH, FURTHER ADDITIONS WERE MADE ON ACCOUNT OF LOAN RECEIVED BY THEM THROUGH ACCOMMODATION ENTRIES FROM LUNKAD GROUP OF COMPANIES. THOSE ADDITIONS WERE MADE ON THE BASIS OF A SURVEY U/S. 133A WHICH WAS UNDERTAKEN AT THE BUSINESS PREMISES (13, RACE COURSE ROAD, INDORE) OF THE VARIOUS COMPANIES OF THE LUNKAD GROUP ON 02.05.2006 I.E. FEW MONTHS PRIOR TO THE DATE OF SEARCH IN ASSESSEE GROUP [MITTAL GROUP] OF CASES. THE SURVEY HAD REVEALED THE MODUS OPERANDI ADOPTED BY LUNKAD GROUP IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS NEEDY PERSONS I.E. BENEFICIARIES. 6. DURING THE COURSE OF ASSESSMENT U/S 153A FOR ASSESSMENT YEAR 2002-03 IN CASE OF NARMADA EXTRUSION LIMITED, THE AO OBSERVED THAT UNSECURED LOAN RECEIVED BY THE ASSESSEE WAS AS UNDER :- 5 S.NO. NAME OF THE COMPANY UNSECURED LOANS DURING ASSESSMENT YEAR 2002-03 INTEREST ON IT 1. RAJVIR MARKETING & INVESTMENT PVT.LTD. RS. 22,00,000 16,701 2. RAJVIR BIOTECH (P)LTD. RS. 38,00,000 41,983 TOTAL RS. 60,00,000 58,684 THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E ASSESSEE VIDE ORDER SHEET ENTRY WAS ASKED TO PRODUC E THE DIRECTORS OF ABOVE COMPANIES FOR ASCERTAINING THE S OURCES OF LOAN TAKEN AND TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE LOAN, TRANSACTION/CREDITOR AS PER SECTION 68 OF THE INCOME-TAX ACT, 1961. THE ASSESSE E COULD NOT PRODUCE THE CREDITORS AND SUBMITTED AS UNDER :- (I) THAT YOU HAVE ASKED FROM THE ASSESSEE TO PRODUCE TH E DIRECTOR OF RAJVIR MARKETING AND INVESTMENT P.LTD. AND RAJVIR BIOTECH (P) LTD. FROM WHOM UNSECURED LOAN WERE TAKE N DURING THE YEAR. IN THIS RESPECT, WE HAVE TO SUBMIT AS UNDER :- (I) CONFIRMATIONS LETTERS IN RESPECT OF LOAN TAKEN FROM THE ABOVE PARTY IS ENCLOSED. (II) AFFIDAVIT OF THE ABOVE PARTY DULY NOTARIZED CONFIRMING THE ABOVE/TRANSACTIONS ARE ENCLOSED. (III) THAT THE ASSESSEE HAS RECEIVED THE ENTIRE AMOUNT OF LOAN THROUGH ACCOUNT PAYEE CHEQUES. THAT WHEN THE AMOUNTS OF LOAN WERE RECEIVED BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES AND CONFIRMATION LETTERS DULY SIGNED BY THE CREDITORS HAVE BEEN FILED AND MORE SO WHEN THEY ARE ASSESSED TO TAX, THE ASSESSEE HAS DISCHARGED ITS ONUS LYING ON HIM. THAT IF YOU HAVE ANY DOUBT ABOUT THE GENUINENESS OF THE SAI D TRANSACTION, YOU ARE REQUESTED TO DIRECTLY COLLECT NECESSARY INFORMATION FROM BOTH THE PARTIES. WITHOUT PREJUDICE TO THE ABOVE (III) THAT HON'BLE JURISDICTIONAL HIGH COURT HAS 6 CONSISTENTLY HELD THAT ONCE THE ASSESSEE HAS FURNIS HED CONFIRMATION LETTERS DULY SUPPORTED BY AFFIDAVITS A ND IDENTITY OF THE CREDITORS STANDS PROVED. IN THAT CASE IF THE A.O. IS NOT SATISFIED ABOUT THE CAPACITY OF THE SAID CREDITORS, THE AMOUNT SHOULD BE ADDED TO THE INCOME OF THE CREDITORS AND NOT IN THE CASE OF THE ASSESSEE. ' THE ASSESSEE HAS FAILED TO PRODUCE THE ABOVE PARTY WHICH IS VERY WELL KNOWN AS LUNKAD GROUP, EVEN AFTE R SPECIFIC OPPORTUNITY THUS, THE ASSESSEE FAILED TO P ROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF PARTI ES PROVIDING UNSECURED LOANS.-MERELY SUBMITTING CONFIR MATIONS, ALONG WITH POSTAL ADDRESS AND PAN DO NOT CONFIRM TH E CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S. 7. THE AO FURTHER OBSERVED THAT THE DEPARTMENT ON 2.5.2006 CONDUCTED SURVEY ON THE BUSINESS PREMISES OF LUNKAD GROUP OF THE COMPANIES, AND AFTER POST SURVE Y INVESTIGATIONS SEVERAL INCRIMINATING FACTS ABOUT TH E BUSINESS OF LUNKAD GROUP CAME TO THE LIGHT OF THE DEPARTMENT . THE LOANS RECEIVED FROM THE ABOVE PARTIES WERE MERELY ACCOMMODATION ENTRIES AS THEY HAVE GIVEN LOANS AFTE R RECEIVING CASH FROM THE CONCERNED PARTIES. THESE ACCOMMODATION ENTRIES CAME TO THE LIGHT OF THE DEPARTMENT ONLY AFTER THE ABOVE SURVEY. DETAIL OF COMPANIES INVOLVED :- 3(A) LUNKADS COMPANIES :- DURING THE SURVEY AND IN POST SURVEY INVESTIGATIO N DETAILS OF SEVERAL COMPANIES WERE FOUND. IN THESE C OMPANIES SHRI VIJAY LUNKAD, SHRI SANJEEV LUNKAD, SHRI RITESH LUNKAD, THEIR FAMILY AND STAFF MEMBERS WERE FOUND TO BE INV OLVED AS DIRECTORS. THESE ALLEGED COMPANIES ARE :- S.NO. NAME OF COMPANY DIRECTORS CORRESPONDENCE/ REGD.OFFICE REMARKS 01. LUNKAD SECURITIES LTD. SANJEEV/ LUNKAD/RITESH LUNKAD LUNKAD HOUSE, 13, RACE COURSE, INDORE. 02. LUNKAD MEDIA & ENTERTAINMENT LIMITED/LUNKAD REAL ESTATE LIMITED SANJEEV/ LUNKAD/SNEHA LUNKAD/RACHNA LUNKAD LUNKAD HOUSE, 13, RACE COURSE, INDORE. 03 PARKSON SECURITIES LIMITED 04 LAGOON RESORTS (P)LTD. VIJAY LUNKAD HOUSE, 7 LUNKAD/SHARAD DARAK 13, RACE COURSE, INDORE. 05 PARTH CREDIT & CAPITAL MARKET LIMITED SANJEEV LUNKAD/SANJAY BINDAL 21-AMBER, M.G. ROAD, INDORE. 06 SAOKAR INVESTMENT & FINANCE LIMITED VIJAY LUNKAD/G.JAGTAP LUNKAD HOUSE, 13, RACE COURSE, INDORE 07 HISTORIC ARTS & EXPORTS (P)LTD. VIJAY LUNKAD/G.JAGTAP LUNKAD HOUSE, 13, RACE COURSE, INDORE 08 RAJVEER MARKETING & INVESTMENT LTD. SANJEEV/ LUNKAD/RITESH LUNKAD LUNKAD HOUSE, 13, RACE COURSE, INDORE 09 WEST - END MANAGEMENT TECHNOLOGIES (P) LTD. VIJAY LUNKAD/SANJAV BINDAL LUNKAD HOUSE, 13, RACE COURSE, INDORE 10. RAJVEER BIOTECH (P) LTD. SANJEEV/ LUNKAD/RITESH LUNKAD LUNKAD HOUSE, 13, RACE COURSE, INDORE 11 PRATEEK REALITY (P) LTD. SANJEEV/ LUNKAD/RITESH LUNKAD LUNKAD HOUSE, 13, RACE COURSE, INDORE 12. ALPINE EISEN LIMITED SANJEEV/ LUNKAD/SNEHA LUNKAD LUNKAD HOUSE, 13, RACE COURSE, INDORE 13. INDORE BIOSOFT(P)LTD. 14. RITESH INVESTMENT (P) LTD VIJAY LUNKAD/G.JAGTAP LUNKAD HOUSE, 13, RACE COURSE, INDORE 15. CELERITY CAPITAL MARKET & FINVEST (P) LGTD. VIJAY LUNKAD/G.JAGTAP LUNKAD HOUSE, 13, RACE COURSE, INDORE 16 ALPINE AGROTECH LIMITED SANJEEV/ LUNKAD/SNEHA LUNKAD LUNKAD HOUSE, 13, RACE COURSE, INDORE 17 ALPINE INFOSYS LTD SANJEEV/ LUNKAD/SNEHA LUNKAD LUNKAD HOUSE, 13, RACE COURSE, INDORE 18 HIMALYA GRAH NIRMAN SAHAKARI SAMITI MARYADIT THE IMPOUNDED DOCUMENTS SO FOUND AT LUNKAD GROUP WA S REPRODUCED BY ASSESSING OFFICER AS UNDER :- MORE EXAMPLES FROM LUNKAD COMPANIES IMPOUNDED MATERIAL . DATE NAME CASH PAYMENTS CASH RECEIPTS 3/4/2006 SANDEEP 50,000 3/4/2006 TULSIYAN 1,00,000 8 3/4/2006 RITESH 1,00,000 3/4/2006 BANK 5,10,000 3/4/2006 DARAK 5,00,000 3/4/2006 BANK 3,50,000 3/4/2006 CHOPRAJI 5,00,000 4/4/2006 RITESH 4,000 4/4/2006 BANK 19,000 4/4/2006 TICKET SUNIL 4,700 4/4/2006 DARAK 1,000,000 4/4/2006 DARAK 1,000,000 4/4/2006 BANK 150,000 4/4/2006 CHOPRAJI 500,000 4/4/2006 BHABHI 10,000 4/4/2006 BANK 1,000 4/4/2006 BINDAL 19,000 4/4/2006 BANK 99,000 4/4/2006 DADDY 33,500 4/4/2006 PETROL GETZ 1,000 4/4/2006 RECHARGE (1850) 2,000 4/4/2006 DEWAS 10,000 5/4/2006 DARAK 300,000 5/4/2006 BINDAL 650,001 5/4/2006 DARAK 1,400,000 5/4/2006 BANK 975,000 5/4/2006 BANK 775,000 9 5/4/2006 BANK 12,000 5/4/2006 BANK 1,700,000 5/4/2006 DADDY MANALI 10,000 7/4/2006 MEHTAJI 1,800,000 7/4/2006 SUNIL 30,000 7/4/2006 DARAK 1,800,000 7/4/2006 MEHTAJI 3,200,00 7/4/2006 DARAK 7,50,000 7/4/2006 RITESH RETURN 4,000 7/4/2006 RITESH PERSONAL 5,000 7/4/2006 BANTHIAJI 29,800 7/4/2006 BANK 9,75,000 7/4/2006 BANK 9,50,000 7/4/2006 BANK 5,50,000 7/4/2006 BANK 5,00,000 7/4/2006 P.G. 5,50,000 7/4/2006 ANILJI 2,00,000 8/4/2006 MEHTAJI 2,000,000 8/4/2006 DARAK 500,000 8/4/2006 BANK 2,530,000 8/4/2006 BANK 700,000 8/4/2006 DARAK PACKET RET 10,000 8/4/2006 LAXMINARAYAN 7,000 8/4/2006 ANANYA BUS 5,000 8/4/2006 SANJU PERSONAL 2,000 10 10/4/2006 MEHTAJI 2,000,000 10/4/2006 DARAK SHORT RE 10,000 10/4/2006 BANK 990,000 10/4/2006 BANK 995,000 10/4/2006 AUDIT 2,000 10/4/2006 AIR CONDITIONER 1,000 10/4/2006 RITESH PERSONAL 1,000 10/4/2006 FORM 1,000 10/4/2006 CABLE 500 10/4/2006 BINDAL 2,000 10/4/2006 DHAR 25,000 12/4/2006 MEHTAJI 12/4/2006 BANK 12/4/2006 DARAK CAR 12/4/2006 SUNIL 12/4/2006 SALARY GHAN 12/4/2006 TENNIS RACKET 12/4/2006 RAJESH 12/4/2006 P.G. 12/4/2006 PETROL GETZ 13/4/2006 DARAK 13/4/2006 ANILJI 13/4/2006 DARAK 13/4/2006 BANK 13/4/2006 CRICKET TICKET 11 13/4/2006 DADDY 13/4/2006 BANK 14/4/2006 A SHAH 14/4/2006 ANILJI TICKET 14/4/2006 DIESEL INNOVA 14/4/2006 COROLLA PETROL 14/4/2006 RACHANA TICKET 14/4/2006 HUKUMDAS 14/4/2006 SANJEEV PERSONAL 14/4/2006 HOTEL 14/4/2006 BANTIHIAJI 14/4/2006 SANJAY BINDAL 15/4/2006 BANK 980,000 17/4/2006 DARAK 2,500,000 17/4/2006 ANILJI 1,500,000 17/4/2006 DARAK 500,000 17/4/2006 DARAK 1,500,000 17/4/2006 BANK 3,585,000 17/4/2006 SUNIL 500,000 18/4/2006 DARAK 43,000 18/4/2006 200 PACK REC 10,000 18/4/2006 P.G. 200,000 18/4/2006 DARAK 957,000 18/4/2006 BANK 1,990,000 18/4/2006 A.SHAH 300,000 12 18/4/2006 FARM NANU 2,000 18/4/2006 KUBER 5,100 18/4/2006 BANK 475,000 18/4/2006 BANK 50,000 18/4/2006 P.G. 2,000,000 19/4/2006 TULSIYAN 100,000 19/4/2006 P.G. 1,000,000 19/4/2006 P.G. 5,00,000 19/4/2006 BANK 17,95,000 19/4/2006 BANK 30,000 19/4/2006 NOTE SHORT PACK MODERN 10,000 19/4/2006 MEHTAJI 5,000 20/4/2006 BANK 500,000.00 21/4/2006 BANK HSBC 25,000 21/4/2006 NARMADA 3,500,000 21/4/2006 DADDY 17,700 21/4/2006 SEEDS 3,000 21/4/2006 PETROL 2,000 22/4/2006 MEHTAJI 2,000,000 22/4/2006 BANK 995,000 22/4/2006 BANTHIAJI 500,000 22/4/2006 RITESH PERSONAL 2,500 22/4/2006 BRACKET 3,000 24/4/2006 DARAK 1,050,000 24/4/2006 BANK 1,990,000 13 24/4/2006 SUNIL 250,000 24/4/2006 PLANTS DHAR 10,000 24/4/2006 SANJU DHAR 8,000 24/4/2006 GETZ PET 2,000 25/4/2006 NARMADA 300,000 25/4/2006 BANK 1,795,000 25/4/2006 BANK 50,000 25/4/2006 OPEL REPAIR 2,000 25/4/2006 SUNSHINE SOCIETY 10,000 25/4/2006 ICICI BANK 25,000 25/4/2006 DHAR 30,000 25/4/2006 P.G. 500,000 25/4/2006 P.G. 1,500,000 25/4/2006 SWATI TICKET 5,000 26/4/2006 AJAY 1,000,000 26/4/2006 DARAK 4,000,000 26/4/2006 BANK 995,000 26/4/2006 ANJLI CHALLAN 2,000 26/4/2006 SANJU 50,000 26/4/2006 BANK 750,000 27/4/2006 BANK 1,990,000 27/4/2006 BANK 10,000 27/4/2006 SANJAY AGRAWAL ON A/C 41,000 27/4/2006 P.G. 354,350 14 28/4/2006 DARAK 450,000 28/4/2006 MEHTAJI 1000,000 28/4/2006 BANK 2,350,000 28/4/2006 SUNIL 300,000 28/4/2006 DEWAS 200,000 28/4/2006 BANK 250,000 28/4/2006 UNCLE 50,000 29/4/2006 DEWAS GARLIC 41,500 29/4/2006 NARMADA 900,000 29/4/2006 NARMADA 1,100,000 29/4/2006 NARMADA 5,00,000 29/4/2006 UNCLE 50,000 29/4/2006 BANK 950000 29/4/2006 SACHIN 608000 29/4/2006 AMIT 100,000 29/4/2006 SUNIL 300,000 1/5/2006 NARMADA 850,000 1/5/2006 AMIT 100,000 1/5/2006 SANJAY RETURN 26,000 1/5/2006 NARMADA 150,000 1/5/2006 BANK 995,000 1/5/2006 MOBILE RECHARGE 1,100 1/5/2006 P.G. 500,000 1/5/2006 COROLLA PETROL 2,250 1/5/2006 BANK 950,000 15 1/5/2006 RITESH REL. IPO 26,000 5. LIST OF BANK ACCOUNTS : S.NO. NAME OF COMPANY BANK ACCOUNT NO. 01. LUNKAD SECURITIES LTD. CENTURION BANK, HSBC BANK, IDBI BANK 02 LUNKAD MEDIA & ENTERTAINMENT LIMITED/LUNKAD REAL ESTATE LIMITED BANK OF RAJASTHAN, CENTURION BANK, HSC BANK, IDBI BANK 03 PARKSON SECURITIES LTD CENTURION BANK 04 LAGOON RESTORTS (P) LTD. BANK OF RAJASTHAN 05 PARTH CREDIT & CAPITAL MARKET LTD. CENTURION BANK 06 SAOKAR INVESTMENT & FINANCE LTD. CENTURION BANK, BANK OF RAJASTHAN 07 HISTORIC ARTS & EXPORTS (P) LTD. BANK OF RAJASTHAN 08 RAIVEER MARKETING & INVESTMENT LTD. BANK OF RAJASTHAN 09 WEST-END MANAGEMENT TECHNOLOGIES (P) LTD. CENTURION BANK 10 RAJVEER BIOTECH (P) LTD. CENTURION BANK 11 PRATEEK REALITY (P) LTD. CENTURION BANK, BANK OF RAJASTHAN 13 INDORE BIOSOFT (P) LTD. CENTURION BANK 14 RITESH INVESTMENT (P) LTD BANK OF RAJASTHAN 15 CELERITY CAP ITAL MARKET & FINVEST ( P) LTD. BANK OF RAJASTHAN, CENTURION BANK 16 ALPINE AGROTECH LIMITED CENTURION BANK 16 17 ALPINE INFOSYS LIMITED BANK OF RAJASTHAN, CENTURION BANK 18 HIMALYA GRAH NIRMAN SAHAKARI SAMITI MARYADIT BANK OF RAJASTHAN, CENTURION BANK 8. IN VIEW OF THE ABOVE DISCUSSION, THE AO HELD THAT THE LOAN TRANSACTIONS WITH M/S. RAJVIR MARKETING & INVESTMENT P.LTD. AND M/S. RAJVIR BIOTECH (P) LTD, ARE MERELY ACCOMMODATION ENTRIES. THE CASH HAS BEEN RECEIVED BY THE SAID COMPANY FROM THE ASSESSEE AND AFTER BEING ROUTED THROUGH VARIOUS COMPANIES, THIS AMOUNT WAS GIVEN BY CHEQUES TO THE ASSESSEE. THE ASSESSEES SUBMISSION THAT LOAN RECEIVED IS GENUINE IS NOT AT ALL ADMISSIBLE. THE NON ATTENDANCE/NON CO- OPERATION AND FAILURE TO EXPLAIN THE SOURCE OF THE FUND UTILIZED BY THE LOAN CREDITOR FURTHER CONFIRM THE M ENS REA. HENCE, THE AMOUNT OF RS. 60,00,000/- RECEIVED FROM THE SAID COMPANIES (CALCULATED ON THE BASIS OF PEAK CREDIT AS DISCUSSED HERE UNDER ) IS TREATED AS UNEXPLAINED CASH CREDIT AND SHALL BE ADDED TO THE INCOME OF THE ASSESSEE U/S 68 OF INCOME-TAX ACT. 9. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER :- 4.2.3 IN THE CONTEXT OF THE FACTS AND FINDINGS AS G IVEN IN THE LUNKAD GROUP OF CASES, IT HAS BEEN HELD THAT THE LUNKAD GROUP HAD FAILED IN DISCHARGING ITS ONUS TO EXPLAIN THE SOURCE OF HUGE SHARE CAPITAL INTRODUCED YEAR AFTER YEAR IN THEIR GROUP COMPANIES. THE DOCUMENTS IMPOUNDED DURING THE SURVEY IN THE LUNKAD GROUP OF CASES, THOUGH, FOR THE LIMITED PERI OD ONLY, DO SUGGEST THE MODUS OPERANDI ADOPTED BY THEM IN PROVIDING ENTRIES TO THE BENEFICIARIES. BUT THIS HAS - NOT BEEN ACCEPTED BY THE LUNKAD GROUP SO FAR. RATHE R, THEY (LUNKAD GROUP) HAVE ISSUED CONFIRMATORY LETTER S TO THE VARIOUS BENEFICIARIES IN SUPPORT OF HAVING G IVEN GENUINE LOAN AND SHARE APPLICATION MONEY. HAD THEY ACCEPTED THE MODUS OPERANDI OF PROVIDING ONLY ENTRIES, THEN THE REQUIRED COURSE WOULD HAVE BEEN CONFIRMING THE ADDITIONS MADE IN THE HANDS OF BENEFICIARIES. BUT THIS HAS NOT BEEN DONE SO. RATHE R THE LUNKAD GROUP HAD TRIED TO REINFORCE THE STAND O F 17 BENEFICIARIES BY WAY OF ISSUING CONFIRMATORY LETTER S TO THEM BUT IN THEIR OWN CASES THEY HAVE UTTERLY FAILED TO DISCHARGE THE PRIMARY ONUS OF EXPLAINING THE SOURCE. THEREFORE, IN THE CIRCUMSTANCES, THE ADDITIONS MADE ON THIS ISSUE WERE SUSTAINED ON SUBSTANTIVE BASIS IN THE CASES OF LUNKAD GROUP OF COMPANIES ITSELF. CONFIRMING ADDITION ON THE SAME ISSUE IN THE HANDS OF BENEFICIARIES WOULD I AMOUNT DOUBLE ADDITION [ THOUGH ON DIFFERENT HANDS] . FURTHER IN THE FACTS OF THE CASE, THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF METACHEM INDUSTRIES LIMITED SUPPORTS THE GROUNDS OF THE ASSESSEE. ACCORDINGLY, KEEPING IN VIEW THE FINDINGS WHICH HAS BEEN GIVEN BY ME IN LUNKAD GROUP OF CASES AND FOLLOWING THE PRINCIPAL OF CONSISTENCY, THE ADDITION MADE U/S 68 ON THIS ISSUE, CAN NOT BE SUSTAINED IN THE CASES OF BENEFICIARIES. 10. AGGRIEVED BY THE ABOVE ORDER OF THE CIT(A), THE REVENUE IS IN FURTHER APPEAL BEFORE US AND ASSESSEE HAD ALSO FILED CROSS OBJECTIONS. 11. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FROM THE RECORD, WE FOUND THAT THERE WAS SEARCH AT BUSINESS AND OFFICE PREMISES OF ASSESSEE GROUP (KNOWN AS MITTAL GROUP) ON 5.10.2006. ON THE BASIS OF INCRIMINATING DOCUMENTS FOUND DURING SEARCH, THE ASSESSEE HAS SURRENDERED ADDITIONAL INCOME OF RS. 2 CRORES AND DISCLOSED THE SAME IN THE HANDS OF SHRI MAHESH MITTAL AND SHRI PRAVIN MITTAL IN ASSESSMENT YEAR 2007-08. WHILE COMPLETING THE ASSESSMENT U/S 153A, THE AO FOUND THAT DURING THE YEARS COVERED BY THE SEARCH, THE ASSESSEE HAS TAKEN LOAN FROM VARIOUS COMPANIES OF LUNKAD GROUP. THE AO OBSERVED THAT ON 2.5.2006, THERE WAS SURVEY AT LUNKAD GROUP I.E. FEW MONTHS PRIOR TO THE DATE OF SEARCH IN ASSESSEES GROUP. THE SURVEY HAD REVEALED THAT LUNKAD GROUP WAS INVOLVED IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS NEEDY PERSONS I.E. BENEFICIARIES. THE INCRIMINATING DOCUMENTS SO FOUND DURING SURVEY AT LUNKAD 18 GROUP EVEN THOUGH PERTAINING TO ONE MONTH ONLY INDICATED RECEIPT OF CASH FROM COMPANIES/ PERSONS TO WHOM AMOUNT WAS AGAIN PASSED THROUGH CHEQUES EITHER IN THE FORM OF SHARE CAPITAL OR UNSECURED LOANS OR CAPITAL GAINS. THE AO OBSERVED THAT THE LUNKAD GROUP DID NOT COOPERATE DURING SURVEY PROCEEDINGS IN EXPLAINING THE ENTRIES FOUND IN INCRIMINATING DOCUMENTS REGARDING RECEIPT OF CASH AND GIVING OF CHEQUES TO VARIOUS BENEFICIARIES. THE DIRECTORS OF LUNKAD GROUP DID NOT APPEAR TO SUBSTANTIATE THE ENTRY OF LOANS GIVEN TO THE GROUP COMPANIES OF ASSESSEE. THE DOCUMENTS SO FOUND DURING SURVEY CONDUCTED AT LUNKAD GROUP SHOWS THAT LUNKAD GROUP HAS ACTED AS ACCOMMODATION ENTRY PROVIDER. EVEN DURING COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FILED LOAN CONFIRMATION LETTERS ALONGWITH AFFIDAVIT OF LUNKAD GROUP TO SUBSTANTIATE THE LOAN TAKEN AND REPAID BY IT, BUT COULD NOT PRODUCE THE ALLEGED CREDITORS IN PERSON T O SUBSTANTIATE THE SAME. IT WAS CONTENDED BY THE LD. CIT DR THAT SINCE LUNKAD GROUP COULD NOT BE PRODUCED BEFORE ANY OF THE AUTHORITIES, THE SOURCE OF HUGE CASH DEPOSITS IN THEIR BANK ACCOUNT COULD NOT BE EXPLAINED, SO AS TO ESTABLISH THE GENUINENESS AND CREDITWORTHINESS OF LOANS ADVANCED BY THEM TO ASSESSEE. FROM THE RECORD, WE ALSO FOUND THAT THE ASSESSEE MITTAL GROUP IS ENGAGED IN MANUFACTURING OF HDPP/PE BAGS AND ONE OF THE LEADING CONCERNS IN THIS LINE OF BUSINES S. THE LD. CIT DR ALSO DREW OUR ATTENTION TO THE FACT THAT LOOSE PAPERS FOUND DURING SEARCH IN THIS GROUP DATED 5.10.2006 SHOWED HUGE CASH LOAN OF RS. 1.20 CRORES ADVANCED BY IT. IT WAS ALSO SUBMITTED THAT HUGE INVESTMENT WAS FOUND IN LAND. THE LD. CIT DR ALSO CONTENDED THAT UNACCOUNTED CASH WAS GIVEN TO THE LUNKAD GROUP AND RECEIVED BACK THROUGH CHEQUES IN VARIOUS GROUPS OF ASSESSEES AS UNSECURED LOANS. LD. CIT DR ALSO HARPENED ON THE INCOME RETURNED BY THE GROUP CONCERNS OF THE ASSESSEE M/S. NARMADA EXTRUSION PRIVATE LIMITED IN ASSESSMENT YEAR 19 2002-03 AT RS. 15,96,958/-, IN THE ASSESSMENT YEAR 2006-07, THE RETURNED INCOME OF M/S. NARMADA EXTRUSION PVT. LIMITED WAS RS. 42,16,870/-. ON THE OTHER HAND, HE PLACED ON RECORD THE RETURN OF INCOME OF LUNKAD GROUP M/S. LUNKAD MEDIA & ENTERTAINMENT IN ASSESSMENT YEAR IN 2004-05 AT RS. 1,22,110/- AND RS. 14,120/- IN THE ASSESSMENT YEAR 2002-03. IN VIEW OF THESE SUBMISSIONS, THE LD. CIT DR HIGHLIGHTED THAT THE ASSESSEE GROUP WAS FINANCIALLY VERY SOUND, EARNING AND DECLARING HUGE INCOME, WHEREAS LUNKAD GROUP HAS NO SOUND BUSINESS EXISTENCE AND DECLARING ONLY MEAGER INCOME, THEREFORE, THE ALLEGED LOAN SHOWN TO HAVE BEEN GIVEN BY LUNKAD GROUP WAS MERELY AN ACCOMMODATION ENTRY TO THE ASSESSEE AFTER ACCEPTING CASH FROM IT. HE FURTHER SUBMITTED THAT EVEN DURING SEARCH, THE ASSESSEE GROUP HAS ACCEPTED INCOME OF RS. 2 CRORES AND ALSO PAID TAX THEREON, WHEREAS LUNKAD GROUP HAS SURRENDERED NOTHING NOR PAID ANY TAX. OUR ATTENTION WAS ALSO INVITED TO UNSECURED LOAN REMAINED STATIC AT RS. 4.82 CRORES IN THE ASSESSMENT YEAR 2010-11 AND WERE NEVER PAID BACK TO THE LUNKAD GROUP. SIMILARLY, SHARE CAPITAL IN CASE OF NARMADA EXTRUSION PRIVATE LIMITED WAS RS. 3.30 CRORES. HE SUBMITTED THAT IN CASE OF M/S. LUNKAD GROUP, ENTIRE SHARE CAPITAL WAS FOUND TO BE UNEXPLAINED BECAUSE IT WAS RECEIVED IN CASH AND NO DETAILS OF SHARE APPLICANTS WAS EVER FURNISHED BY LUNKAD GROUP AS IS CLEAR FORM ASSESSMENT ORDER OF M/S. LUNKAD MEDIA AND ENTERTAINMENT LIMITED FOR THE ASSESSMENT YEAR 2001-02. IN VIEW OF THESE FACTS, HE CONTENDED THAT MITTAL GROUP IS A LEADING BUSINESS GROUP WHEREAS LUNKAD GROUP IS MERELY AN ACCOMMODATION ENTRY PROVIDER EARNING COMMISSION ON SUCH ACCOMMODATION FROM BENEFICIARIES, OUT OF WHICH MITTAL GROUP WAS ONE OF THE BENEFICIARIES. WE FOUND THAT IN VARIOUS DIFFERENT BANK ACCOUNT OF LUNKAD GROUP IN WHICH CASH WAS DEPOSITED PRIOR TO ISSUE OF CHEQUES TO THE BENEFICIARIES. IN SOME INSTANCES, THE CHEQUES 20 WERE NOT DIRECTLY ISSUED TO THE CONCERNED PARTIES, WHO HAS GIVEN CASH BUT WAS ROUTED THROUGH VARIOUS CONCERNS OF LUNKAD GROUP BUT ULTIMATELY CREDITED IN THE ACCOUNT OF BENEFICIARIES. LIST OF BANK ACCOUNT HELD BY THE LUNKAD GROUP WAS ALSO GIVEN IN THE ASSESSMENT ORDER WHERE CASH IS DEPOSITED. 12. THE LD. CIT(A) IN HIS APPELLATE ORDER IN THE CASE OF NARMADA EXTRUSION LIMITED FOR ASSESSMENT YEAR 2002-03 RELIED ON HIS ORDER PASSED IN THE CASE OF M/S. LUNKAD MEDIA AND ENTERTAINMENT LIMITED FOR THE ASSESSMENT YEAR 2004-05, WHEREIN ENTIRE ADDITION WAS SUSTAINED BY THE LD. CIT(A) IN THE HANDS OF LUNKAD GROUP ON THE PLEA THAT THEY HAVE FAILED TO EXPLAIN SOURCE OF HUGE SHARE CAPITAL RECEIVED BY THEM AND THEY HAVE ISSUED CONFIRMATION LETTERS TO VARIOUS PARTIES TO WHOM LOAN WAS GIVEN. FOLLOWING THIS DECISION, THE ADDITION OF UNSECURED LOAN TO THE ASSESSEE MITTAL GROUP INCLUDING THAT OF NARMADA EXTRUSION LIMITED WERE DELETED BY CIT(A). THE CIT(A) OBSERVED THAT SINCE ADDITION MADE IN THE HANDS OF LUNKAD GROUP HAS BEEN SUSTAINED ON SUBSTANTIVE BASIS IN THE CASE OF LUNKAD GROUP OF COMPANIES, CONFIRMING THE ADDITION ON SAME ISSUE IN THE HANDS OF BENEFICIARIES WOULD AMOUNT TO DOUBLE ADDITION THOUGH IN DIFFERENT HANDS. ACCORDINGLY, HE DELETED THE ADDITIONS SO MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE ASSESSEE. 13. ON THE OTHER HAND, THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WAS THAT THE ASSESSEE HAS DISCHARGED ITS OBLIGATION CASTED U/S 68, IT HAS PAID INTEREST ON LOAN AND ALSO DEDUCTED TAX THEREON. OUR ATTENTION WAS DRAWN TO THE CONFIRMATION OF UNSECURED LOANS CREDITORS, AFFIDAVITS OF DIRECTORS OF THE CREDITOR COMPANIES, COPY OF BALANCE SHEET OF LOAN CREDITORS, COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF LUNKAD SECURITIES LIMITED. IN VIEW OF THESE DOCUMENTARY EVIDENCE, HE CONTENDED THAT THE ASSESSEE HAS DISCHARGED ITS ONUS OF PROVING NOT ONLY IDENTITY BU T ALSO GENUINENESS AND CREDITWORTHINESS OF LOAN 21 CREDITORS. HE ALSO ARGUED THAT IN VIEW OF THE C.B.D.T. CIRCULAR NO.1493 DATED 18.1.1982, THE DEPARTMENT SHOULD NOT HAVE FILED THE APPEALS. 14. THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WAS AS UNDER :- A) THE LD. AO HAS ADDED ENTIRE AMOUNT OF UNSECURED LOANS AS RECEIVED FROM THE LUNKAD GROUP OF COMPANIES ON THE BASIS OF ALLEGED CASH BOOK FOUND AND SEIZED DURING THE COURSE OF SURVEY FROM THE PREMISES OF LUNKAD, WHEREAS DURING THE COURSE OF SEARCH CONDUCTED U/S 132 OF THE INCOME-TAX ACT, 1961, ON DIFFERENT PREMISES OF THE NARMADA EXTRUSIONS GROUP NOTHING INCRIMINATING WAS FOUND AND SEIZED. B) THE ASSESSEE GROUP DURING THE COURSE OF POST SEARCH INQUIRY. SEARCH ASSESSMENT PROCEEDING AND APPELLATE PROCEEDING EXTENDED ITS FULL COOPERATION WITH INCOME TAX DEPARTMENT AND ALSO PROVIDED THE FOLLOWING INFORMATION :- (I) CONFIRMATION OF LOAN CREDITORS DULY SIGNED BY THEM CONFIRMING THE LOAN ADVANCED TO THEM. (II) AUDITED FINAL ACCOUNTS OF THE UNSECURED LOAN CREDITORS HIGHLIGHTING THE NAME OF THE ASSESSEE. (III) COPY OF AFFIDAVIT OF THE DIRECTOR OF THE LOAN CREDITORS COMPANIES CONFIRMING THE AMOUNT OF LOANS ADVANCED BY THEM. C) THE AO HIMSELF HAS NOT DOUBTED ABOUT THE AMOUNT AS RECEIVED BY THE ASSESSEE HOWEVER, THE SEARCH ASSESSMENT ORDER WAS PASSED IN THE CASE OF ASSESSEE GROUP BY THE ASSESSING OFFICER PRIOR TO THE SURVEY ORDER PASSED IN THE CASE OF LUNKAD GROUP. FOR THIS REASON, THE AO IN THE CASE OF ASSESSEE GROUP I.E. NARMADA EXTRUSION GROUP HAS ADDED ENTIRE AMOUNT OF LOAN AS INCOME OF THE ASSESSEE BY TREATING THE SAME AS NON-GENUINE. THAT REASON FOR DISBELIEVING THE LOAN AMOUNT WAS THE PRESENCE OF ALLEGED CASH BOOK D) THAT IT IS SETTLED POSITION OF LAW THAT THE ASSESSE E CAN EXPLAIN SOURCE OF ITS CREDIT HOWEVER IT CANNOT BE EXPECTED FROM THE ASSESSEE TO EXPLAIN THE SOURCE OF SOURCE. THE ASSESSEE IN THE PRESENT CASE HAS PROPERLY EXPLAINED THE SOURCE OF CREDIT 22 APPEARING IN ITS BOOKS OF ACCOUNT AND THE SAME WAS ALSO SUBSTANTIATED WITH THE CONFIRMATION LETTERS AND BALANCE SHEET OF THE LOAN CREDITORS. THE ASSESSEE HAS FILED AFFIDAVITS SIMPLY TO RECONFIRM ITS CONTENTION OTHERWISE IT HAS FILED AFFIDAVIT SIMPLY TO RECONFIRM ITS CONTENTION OTHERWISE IT HAS PROPERLY DISCHARGED ITS ONUS BY FILING THE CONFIRMATION LETTER AND BALANCE SHEET OF THE LOAN CREDITORS. THUS, THERE IS NO REASON TO TAX THE LOAN AMOUNT AS RECEIVED FROM DIFFERENT COMPANIES OF THE LUNKAD GROUP IN THE CASE OF THE ASSESSEE. E.1) THE AO WHILE PASSING THE ORDER IN THE CASE OF LUNKAD GROUP OF COMPANIES FOR SURVEY YEAR AFTER DETAILED EXAMINATION OF PAPERS IMPOUNDED FORM ITS PREMISES HAS ADDED THE ENTIRE AMOUNT OF CREDIT AS REFLECTED IN THE BALANCE SHEET AND ENTIRE CREDIT AS SHOWN IN THE ALLEGED CASH BOOK AS FOUND FROM ITS PREMISES AS INCOME OF THE LUNKAD SECURITIES LIMITED ON SUBSTANTIVE BASIS. E.2) AS WE UNDERSTAND THE ASSESSMENT ORDER OF THE SURVEY YEAR WAS PASSED WITH THE PRIOR APPROVAL OF THE JCIT/ADDL. CIT. THAT ONCE THE DEPARTMENT HAS TAXED THE ENTIRE CREDIT AS REFLECTED IN THE ALLEGED CASH BOOK, IN THAT CASE THERE IS NO REASON TO TAX THE LOANS AS RECEIVED BY THE ASSESSEE GROUP FROM LUNKAD GROUP OF COMPANIES AS ITS INCOME. F) THAT AS EXPLAINED BEFORE THE HON'BLE BENCH AT THE TIME OF HEARING ON 21.10.2011 THAT MR. LUNKAD HAS CHALLENGED THE SURVEY ACTION CONDUCTED BY THE INCOME TAX DEPARTMENT BEFORE THE HON'BLE HIGH COURT IN ITS GROUP. SINCE, THE WRI T AS FILED BY LUNKAD GROUP IS PENDING BEFORE THE HON'BLE HIGH COURT IN ITS MATTERS FOR THE REASON HE HAS GRIEVANCE WITH THE INCOME TAX DEPARTMENT AND, THEREFORE, HE IS NOT APPEARING BEFORE THE CIT- I, CHARGE INDORE IN HIS OWN CASES. HOWEVER, HE HAS PROVIDED CONFIRMATION, AFFIDAVIT DULY NOTARIZED AND BALANCE SHEET OF ITS DIFFERENT COMPANIES AS TO JUSTIFY THE AMOUNT OF LOAN ADVANCED BY HIS VARIOUS COMPANIES TO THE ASSESSEE GROUP. 23 G) THAT CASH BOOK AS FOUND DURING THE COURSE OF SURVEY PROCEEDING WAS FOR LIMITED PERIOD AND IN WHICH THE NAME OF THE PERSON WAS NOT WRITTEN. THE DEPARTMENT HAS CONSIDERED THE SAME IN THE CASE OF LUNKAD SECURITIES LIMITED. COPY OF ORDER AS PASSED IN THE CASE OF LUNKAD SECURITIES LIMITED. HAS ALSO BEEN FILED DURING THE COURSE OF HEARING ON 21.10.2011. THAT WHEN CASH BOOK AS FOUND AND SEIZED DURING THE COURSE OF HEARING ON 21.10.2011. THAT WHEN CASH BOOK AS FOUND AND SEIZED DURING THE COURSE OF SURVEY WAS CONSIDERED IN THE CASE OF LUNKAD SECURITIES LIMITED AND OWNERSHIP OF THE SAID ALLEGED CASH BOOK WAS CONSIDERED IN THE CASE OF LUNKAD SECURITIES LIMITED. IN THAT CASE, THERE IS NO JUSTIFICATION FO R MAKING SEPARATE ADDITION IN THE HANDS OF THE PERSON, ACTUALLY RECEIVING THE AMOUNT OF LOAN FROM LUNKAD GROUP OF COMPANIES. H) THE LD. CIT(A) SIMULTANEOUSLY DECIDED THE APPEAL AS FILED BY THE LUNKAD GROUP OF ALSO OF THE ASSESSEE. THE LD. CIT(A) CONFIRMED THE ADDITIONS IN THE CASE OF LUNKAD GROUP OF COMPANIES AND DELETED THE ADDITIONS IN THE CASE OF THE ASSESSEE COMPANY AND OTHER MEMBERS OF THE MITTAL GROUP. LIST OF THE APPEAL OF LUNKAD GROUP AS DISCUSSED BY THE LD. CIT(A) IN HIS ORDER AS PASSED FOR THE ASSESSMENT YEAR 202-03 IN PARA 2.2 ON PAGE NO.5 OF THE APPELLATE ORDER. I) THAT IN VIEW OF THE ABOVE AND AS EXPLAINED BY US VIDE OUR EARLIER SUBMISSION IT IS ONCE AGAIN SUBMITTED THAT THE LD. AO IS NOT RIGHT IN ADDING TH E AMOUNT OF LOAN AS RECEIVED BY THE ASSESSEE FROM LUNKAD GROUP OF COMPANIES EVEN WHEN THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON IT. J) WE WOULD ALSO LIKE TO DRAW YOUR HONOURS KIND TO THE LAST PARA IN RESPECT OF DECISION OF AGRAWAL COAL CORPN. P.LTD.(I.T.A.NO. 151/IND/2009) AS RELIED UPON BY THE LD. CIT DR IN HIS SUBMISSION DATED 21.11.2011 FILED BEFORE THE HON'BLE BENCH. WE RESPECTFULLY LIKE TO SUBMIT THE SAID DECISION IS IN FACT IN FAVOUR OF THE ASSESSEE 24 SINCE THE IDENTITY OF THE LUNKAD GROUP IS BEYOND DOUBT AND DEPARTMENT HAS RATHER CONDUCTED A SURVEY AT ITS PREMISES ON 02.05.2006 WHICH CONFIRMS THE IDENTITY OF LUNKAD GROUP. 15. FIRST, WE TAKE UP THE PRELIMINARY OBJECTION RAISED BY THE LD. AUTHORIZED REPRESENTATIVE TO THE EFFECT THAT SINCE QUESTION OF FACT HAS BEEN DECIDED BY THE CIT(A), THE REVENUE SHOULD NOT HAVE FILED THE APPEAL BEFORE THE TRIBUNAL. FOR THIS PURPOSE, H E RELIED ON VARIOUS CIRCULAR OF C.B.D.T. FROM THE ORD ER OF THE CIT(A), IT IS CLEAR THAT HE HAS DELETED THE ADDITION IN THE HANDS OF THE ASSESSEE COMPANY ON THE PLEA THAT ADDITION IN THE HANDS OF CREDITOR COMPANY (LUNKAD GROUP) HAS BEEN CONFIRMED ON SUBSTANTIVE BASIS. AS PER CIT(A), IF HE CONFIRMED THE SAME ADDITION IN THE HANDS OF THE ASSESSEE COMPANY, IT WILL AMOUNT TO DOUBLE ADDITION IN RESPECT OF THE SAME AMOUNT OF INCOME. WE FOUND THAT ADDITIONS HAVE BEEN MADE IN THE HANDS OF LUNKAD GROUP ON THE PLEA THAT THE SOURCE OF SHARE CAPITAL RECEIVED BY THEM COULD NOT BE EXPLAINED. HOWEVER, ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE COMPANY ON THE PLEA THAT GENUINENESS OF THE LOAN TRANSACTIONS HAS NOT BEEN ESTABLISHED IN VIEW OF THE INCRIMINATING DOCUMENTS FOUND DURING COURSE OF SURVEY AT LUNKAD GROUP. INCRIMINATING DOCUMENTS WAS FOUND PERTAINED TO THE MONTH OF APRIL, 2006, WHICH INDICATED THAT LUNKAD GROUP WAS IN RECEIPT OF CASH FROM VARIOUS BENEFICIARIES INCLUDING ASSESSEE AND WHICH HAS AGAIN BEEN GIVEN TO THE BENEFICIARIES THROUGH CHEQUES. THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPOSITION THAT IN CASE OF CASH CREDIT, ASSESSEE IS NOT ONLY REQUIRED TO PROVE THE IDENTITY OF THE LOAN CREDITOR BUT ALSO THE GENUINENESS OF TRANSACTION OF LOAN AS WELL AS CAPACITY OF THE LOAN CREDITOR TO ADVANCE THE SAID AMOUNT OF LOAN. IN THE INSTANT CASE, THERE IS NO DISPUTE TO THE IDENTITY I N SO FAR AS LUNKAD GROUP IS ALSO ON DEPARTMENTS RECORD AND A SURVEY HAS BEEN CARRIED OUT AT PREMISES OF LUNKAD GROUP. THE GENUINENESS OF TRANSACTION OF THE LOANS BECOME DOUBTFUL IN VIEW OF 25 THE INCRIMINATING DOCUMENTS FOUND DURING SURVEY AT LUNKAD GROUP. EVEN THOUGH THE ASSESSEE HAS FILED LOAN CONFIRMATION ALONGWITH AFFIDAVIT OF DIRECTOR OF THE CREDITOR COMPANY (LUNKAD GROUP) BUT THEY COULD NOT PRODUCE THE DIRECTOR OF LUNKAD GROUP TO SUBSTANTIATE THE CONTENTS OF AFFIDAVIT AS WELL AS CONFIRMATION SO FILED. THE CIT(A) HAS DELETED THE ADDITION ON THE PLEA OF DOUBLE ADDITION BY STATING THAT CONFIRMING ADDITION IN THE HANDS OF ASSESSEE COMPANY IN RESPECT OF LOANS RECEIVED BY IT AMOUNTS TO DOUBLE ADDITION. IN THIS REGARD, THERE I S A DIRECT DECISION OF HONBLE SUPREME COURT IN THE CASE OF ITO VS. CH ATCHAIAH, 218 ITR 239, WHEREIN IT WAS OBSERVED THAT NO OPTION HAS BEEN GIVEN UNDER THE 1961 ACT, AND IT HAS BEEN SPECIFICALLY PROVIDED THAT TAX HAS TO BE LEVIED ON RIGHT PERSON NOTWITHSTANDING THE FACT THAT THE AMOUNT HAS ALREADY BEEN ADDED IN THE HANDS OF SOME OTHER PERSON. MEANING THEREBY ADDITION SHOULD BE MADE IN THE HANDS OF THE RIGHT PERSON AND THE SAME CANNOT BE DELETED ONLY ON THE PLEA THAT THE SAME AMOUNT HAS BEEN ADDED IN THE HANDS OF SOME OTHER PERSON. IT WAS OBSERVED BY THE SUPREME COURT THAT THERE IS NO OPTION UNDER THE 1961 ACT, UNLIKE THE ONE GIVEN UNDER 1922 ACT AND THE AO MUST TAX THE RIGHT PERSON AND RIGHT PERSON ONLY. BY RIGHT PERSON IS MEANT THE PERSON, WHO IS LIABLE TO BE TAXED ACCORDING TO THE LAW WITH RESPECT TO A PARTICULAR INCOME. THE EXPRESSION WRONG PERSON IS OBVIOUSLY USED AS OPPOSITE OF THE EXPRESSION RIGHT PERSON. MERELY BECAUSE A WRONG PERSON IS TAXED WITH RESPECT TO A PARTICULAR INCOME, THE AO I S NOT PRECLUDED FROM TAXING THE RIGHT PERSON WITH RESPECT TO THAT INCOME. THIS IS SO IRRESPECTIVE OF THE FACT, WHICH COURSE IS MORE BENEFICIAL TO THE REVENUE. A PERSON LAWFULLY LIABLE TO BE TAXED CAN CLAIM NO IMMUNITY BECAUSE THE ASSESSING OFFICER HAS TAXED THE SAID INCOME IN THE HANDS OF ANOTHER PERSON CONTRARY TO LAW. SIMILAR PROVISION HAS BEEN LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF SMT. TARADEVI, 88 ITR 323. THE PROPOSITION SO DISCUSSED ABOVE AS LAID DOWN BY THE HON'BLE 26 SUPREME COURT HAS BEEN FOLLOWED BY THE I.T.A.T. SPECIAL BENCH IN THE CASE OF PRADEEP AGENCIES, 111 TTJ 346. 16. APPLYING THE ABOVE PROPOSITION OF LAW TO THE FACTS OF THE INSTANT CASE, WE CAN SAFELY CONCLUDE THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING T HE ADDITION IN THE HANDS OF THE ASSESSEE COMPANY MERELY ON THE PLEA THAT THE SAME AMOUNT HAS BEEN ADDED IN THE HANDS OF THE CREDITOR COMPANY. WE FOUND THAT IN CASE OF LUNKAD GROUP ADDITION WAS MADE IN RESPECT OF CASH RECEIVED BY IT FROM PERSONS, WHOSE NAME, ADDRESS AND OTHER PARTICULARS COULD NOT BE FURNISHED BEFORE ASSESSING OFFICER. THIS ADDITION IS MOTHERING TO DO WITH THE GENUINENESS OF LOAN RECEIVED BY ASSESSEE FROM LUNKAD GROUP. BEFORE REACHING TO THE THIRD CRITERI A OF CREDITWORTHINESS, ASSESSEE HAVE TO CROSS THE BARRIER OF GENUINENESS OF LOAN TRANSACTION, WHICH HAS BECOME DOUBTFUL IN VIEW OF THE INCRIMINATING MATERIAL FOUND DURING COURSE OF SURVEY AT LUNKAD GROUP WITH REGARD TO RECEIPT OF CASH FROM THE ASSESSEE COMPANY AND ISSUE OF CHEQUE AGAINST SUCH CASH IN FAVOUR OF THE ASSESSEE COMPANY. THUS, A LEGALLY WRONG VIEW HAS BEEN TAKEN BY THE LD.CIT(A), WHICH MADE THE DEPARTMENT ENTITLED TO FILE AN APPEAL AGAINST SUCH ORDER OF CIT(A). THUS, THERE IS NO MERIT IN THE ARGUMENT OF LD. AUTHORIZED REPRESENTATIVE TO THE EFFECT THAT THE DEPARTMENT HAD WRONGLY COME IN APPEAL AGAINST THE ORDER OF CIT(A). AS WE HAVE REVERSED THE ORDER OF CIT(A) WITH RESPECT TO DELETION OF ADDITION MADE U/S 68, WE ALSO UPHOLD THE ACTION OF ASSESSING OFFICER FOR DISALLOWING INTEREST EXPENSES AND FOR MAKING ADDITION ON ACCOUNT OF UNEXPLAINED SOURCE OF EXPENSES INCURRED FOR THE PAYMENT OF COMMISSION ON SUCH ACCOMMODATION ENTRY. 17. IN VIEW OF THE ABOVE DISCUSSION, WE REVERSE THE ORDER OF CIT(A) AND ALLOW ALL THE APPEALS OF TH E REVENUE IN ITS FAVOUR. 27 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN BUSINESS OF MANUFACTURE OF F ILAMENTS, DECLARED TOTAL INCOME OF RS.67,29,463/- IN ITS RETU RN FILED ON 26 TH NOVEMBER, 2006 WHICH WAS PROCESSED AT THE SAME FIGU RE U/S 143(1). THE CASE WAS SELECTED FOR SCRUTINY, THEREF ORE, NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE. LATER ON THIS CA SE WAS ASSIGNED TO ADDITIONAL CIT, RANGE 2, INDORE, THEREF ORE, FRESH NOTICE U/S 143(2) WAS ISSUED AND SERVED UPON THE AS SESSEE. THE ASSESSEE ATTENDED THE PROCEEDINGS AND FURNISHED DET AILS. DURING ASSESSMENT PROCEEDINGS, THE MAJOR ISSUE WAS WITH RE SPECT TO UNSECURED LOANS AMOUNTING TO RS. 20 LACS RECEIVED F ROM M/S PARTH CREDIT & CAPITAL MARKET PRIVATE LIMITED. VID E ORDER SHEET ENTRY DATED 4 TH DECEMBER, 2007 THE ASSESSEE WAS ASKED TO PRODUCE SHRI SANJEEV LUNKAR FOR ASCERTAINING THE SO URCE OF LOAN TAKEN ALONG WITH THE GENUINENESS, CREDIT WORTHINESS OF THE LOAN TRANSACTION AS PER SECTION 68 OF THE ACT. THE ASSE SSEE DID NOT PRODUCE SHRI SANJEEV LUNKAR. THE LEARNED ASSESSING OFFICER CAME TO KNOW THAT A SURVEY WAS CONDUCTED IN THE CAS E OF M/S LUNKAR SECURITIES AND ITS GROUP CONCERNED. DURING T HE COURSE OF SURVEY ON 2 ND MAY, 2006 AND IN POST SURVEY INVESTIGATIONS, 28 SEVERAL INCRIMINATING DOCUMENTS/FACTS CAME TO LIGHT ABOUT THE BUSINESS AS HAS BEEN DISCUSSED AT PAGE 3 ONWARDS OF THE ASSESSMENT ORDER. THE LEARNED ASSESSING OFFICER IN PARA 2 (PAGE 3) HAS DISCUSSED THE MODUS OPERANDI, DETAILS OF COM PANIES INVOLVED, ASSOCIATE COMPANIES, MEDIATORS AND NUMERO US ENTRIES OF CASH RECEIPTS FROM VARIOUS PARTIES OF MEDIATORS ALONG WITH CASH PAYMENT/DEPOSIT IN BANK ACCOUNT SOME OF WHICH HAVE BEEN DISCUSSED FROM PAGE 6 ONWARDS. AT PAGE 9, THE DETAI LS OF COMMISSION ON ENTRIES, AUTHENTICITY OF DOCUMENTS (P AGE 10), HOW THE ENTRIES HAVE BEEN ROUTED, ETC. HAVE BEEN MENTIONED/DISCUSSED. THE LEARNED ASSESSING OFFICER ALSO EXAMINED THE BANK STATEMENTS AND MOVEMENT OF SUCH E NTRIES FROM CASH TO ULTIMATE BENEFICIARIES THROUGH LUNKAD GROUP AS HAS BEEN REFLECTED AT PAGES 12 TO 15 OF THE PAPER BOOK. FINALLY IT WAS CONCLUDED THAT THESE ARE ACCOMMODATION ENTRIES AND THE IMPUGNED AMOUNTS WERE NEITHER EXPLAINED NOR THE SOU RCE THEREOF. THE CRUX OF THE DISCUSSION AND OBSERVATION MADE IN THE ASSESSMENT ORDER IS THAT THESE ARE MERELY ACCOMMODA TION ENTRIES AND CASH HAS BEEN ROUTED THROUGH VARIOUS COMPANIES. IT IS FURTHER SEEN THAT WHILE ARRIVING AT THIS CONCLUSION , THE LEARNED ASSESSING OFFICER HAS ALREADY DISCUSSED VARIOUS JUD ICIAL 29 PRONOUNCEMENTS SUCH AS MCDOWELL & COMPANY LTD. V. C TO; 154 ITR 148 (SC), DURGAPRASAD MORE; 82ITR 540 (SC), SUM ATI DAYAL VS. CIT; 214 ITR 801 (SC), L.N. DALMIA; 207 ITR 89 (CAL), EDWARD KEVENTER VS. DCIT; 89 ITD 347 (CAL)(ITAT), ROSHAN D I HATTI VS. CIT; 107 ITR 98 (SC), KALE KHAN MOHD. HANIF VS. CIT ; 50 ITR 1 (SC) TO THE EFFECT THAT BURDEN IS ON THE ASSESSEE T O PROVE THE SOURCE OF RECEIPTS ALONG WITH THE DECISIONS IN CIT VS. KUNDAN INVESTMENT LIMITED; 263 ITR 626 (CAL), CIT VS. NIVE DAN VANIJYA NIYOJAN LIMITED; 263 ITR 623 (CAL.); HINDUSTAN TEA TRADING COMPANY; 263 ITR 289 (CAL); CIT VS. RUBY TRADERS & EXPORTERS; 263 ITR 300 (CAL) TO THE EFFECT THAT ESTABLISHMENT OF IDENTITY IS NOT SUFFICIENT AND CREDIT WORTHINESS HAS TO BE PROV ED. REGARDING UNSECURED LOANS, IT WAS CONCLUDED BY THE LEARNED AS SESSING OFFICER THAT SINCE THE NATURE AND SOURCE OF THE ENT RIES IS IN DOUBT AND INTEREST PAID HAS BEEN RECEIVED BACK IN CASH FR OM THE ENTRY OPERATOR, THE TOTAL INTEREST OF RS. 9,204/- IS NOT ALLOWABLE AS BUSINESS EXPENDITURE AND ADDED TO THE INCOME. 2.2 ON APPEAL BEFORE THE LEARNED CIT(A), THE ADDIT ION MADE IN THE ASSESSMENT ORDER WAS CHALLENGED. THE LEARNED CIT(A), IN VIEW OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M/ S NARMADA EXTRUSION & OTHERS; ORDER DATED 30.12.2011, ASKED T HE ASSESSEE 30 TO PRODUCE THE LOAN CREDITORS FOR EXAMINATION,. THE LEARNED COUNSEL FOR THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE CONCERNED PERSONS FOR EXAMINATION. SINCE THE ASSES SEE DID NOT PRODUCE THE CONCERNED PERSONS, THEREFORE, THE CIT(A ) UPHELD THE ADDITIONS, MEANING THEREBY THAT EVEN AT THE FIRST A PPELLATE STAGE THE CONCERNED PERSONS WERE NOT PRODUCED. 2.3 BEFORE US ALSO THE ASSESSEE DID NOT MAKE ANY SUBMISSION FOR PRESENTING THE CONCERNED PERSONS TO CONTROVERT THE FINDING CONTAINED IN THE ASSESSMENT ORDER/IMPUG NED ORDER. THE TRIBUNAL HAS ALREADY MADE A DETAILED DISCUSSION REGARDING LUNKAD GROUP, ETC. IN ACIT VS. M/S NARMADA EXTRUSIO N LIMITED; MAHESH MITTAL, MAHESH MITTAL (HUF), SHARDA DEVI MIT TAL, M/S MALWA LAMINATORS, ETC. IN ITS ORDER DATED 30 TH DECEMBER, 2011 ON IDENTICAL FACTS. EVEN OTHERWISE, THE ASSERTION M ADE BY THE LEARNED SENIOR DR, AS MENTIONED IN EARLIER PARA OF THIS ORDER, THAT IDENTICAL FACTS/ISSUES ARE INVOLVED IN THE PRE SENT APPEAL AND THE ISSUE IN HAND IS COVERED BY THE AFORESAID ORDER DATED 30 TH DECEMBER, 2011 WAS NOT CONTROVERTED BY THE ASSESSEE . THE TRIBUNAL IN THE AFORESAID CASE HAS ALREADY DISCUSSE D ABOUT PARTH CREDIT & CAPITAL MARKET PVT. LTD. (SL. NO. 05-PAGE 15 MENTIONING 31 AS ALLEGED COMPANIES). WE, THEREFORE, FIND NO MERIT IN THE APPEAL OF THE ASSESSEE. IT IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COUR T IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 1.8.2013. SD SD (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 2.8.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-11&2.2