Nitin Rasiklal Sanghvi, Banaskantha V. The ITO Ward-2, , Palanpur

ITA 2304/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2603 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 16-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ANIL BRAHMKSHATRIYA
• Keywords: Bogus purchase; Unexplained cash credit; Search and seizure; Principle of natural justice; Opportunity of cross examination; Corroborative evidences; Accommodation entries; Tax effect; Retraction; Bogus loan; Reassessment proceedings
• Section: 131; 68; 148; 133(6); 143(1)

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.2304 AND 2305/AHD/2017 / ASSTT. YEAR: 2010-11 AND 2011-12 NITIN RASIKLAL SANGHVI PROP. M/S.BONY EXPORTS 1, PARAS SOCIETY NEMINATH NAGAR, AT. DEESA TAL. DEESA, DIST. BANAKANTHA. PAN : AMJPS 3742 E VS. ITO, WARD-2 PALANPUR. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI ANIL BRAHMKSHATRIYA REVENUE BY : SHRI ANAND KUMAR, SR.DR ! / DATE OF HEARING : 22/02/2019 '#$ ! / DATE OF PRONOUNCEMENT: 8 /03/2019 %& / O R D E R PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LD.CIT(A) D ATED 4.9.2017 PASSED FOR THE ASSTT.YEAR 2010-11 AND 2012-12. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE VERBATIM SAME EXCEPT VARIATION IN THE QUANTUM. HE HAS TAKEN THREE GROUNDS OF APPEAL IN BOTH THE YEARS. HOWEVER, HIS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE I.E. THE LD.CIT(A) H AS ERRED IN CONFIRMING THE ADDITIONS OF RS.2,00,000/- AND RS.5, 63,833/- IN THE ASSTT.YEARS 2010-11 AND 2011-12 WHICH HAVE BEEN ADD ED BY THE AO ON THE GROUND THAT THE ASSESSEE HAS INFLATED ITS EXPENDITURE AND FAILED TO PROVE GENUINENESS OF THE PURCHASES MA DE BY HIM. ITA NO.2304 AND 2305/AHD/2017 2 3. FACTS ON ALL VITAL POINTS ARE COMMON, RATHER ASS ESSMENT ORDERS AND ORDERS OF THE LD.CIT(A) ARE ALSO IDENTIC AL EXCEPT VARIATIONS OF DATES AND QUANTUM. THEREFORE, FOR TH E FACILITY OF REFERENCE, I AM TAKING FACTS MAINLY FROM THE ASSTT. YEAR 2010-11. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AT THE RELEVANT TIME WAS ENGAGED IN THE BUSINESS OF DEALING IN EXPO RT OF CUT & POLISHED DIAMONDS AND JEWELLERY IN THE NAME AND STY LE OF M/S.BONY EXPORTS. HE HAS FILED HIS RETURN OF INCOME SHOWING TOTAL INCOME AT RS.2,79,615/- AND RS.5,15,600/- IN THE AS STT.YEARS 2010-11 AND 2011-12. THE INFORMATION CAME TO THE P OSSESSION OF THE AO THAT M/S.BONY EXPORTS HAD MADE PURCHASES FROM KRIYA IMPEX PVT. LTD., AND KALASH ENTERPRISE WHICH WAS R UN BY ONE SHRI RAJENDRA JAIN WHO HAS CARRIED OUT THE BUSINESS OF P ROVIDING ACCOMMODATION ENTRIES. A SEARCH WAS CARRIED OUT AT THE PREMISES OF SHRI RAJENDRA JAIN AND HE DECLARED UNDER OATH TH AT HE HAS ONLY PROVIDED ACCOMMODATION ENTRIES. IN THE ASSTT.YEAR 2 011-12 SUCH PURCHASES WERE MADE FROM KALASH ENTERPRISES WHICH W AS RUN BY SHRI MANISH JAIN WHO WAS ALSO ENGAGED IN THE BUSINE SS OF PROVIDING ACCOMMODATION ENTRIES. ON THE BASIS OF A BOVE INFORMATION, ASSESSMENT PROCEEDINGS WERE REOPENED I N BOTH THE YEARS AND NOTICES UNDER SECTION 148 OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE IN BOTH THE ASSESSMENT YEA R. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS SUBMITTED THAT RETURN ORIGINALLY FILED BE TREATED AS FILED IN RESPONSE TO THIS NOTICE. THE AO ISSUED NOTICE UNDER SECTION 143(2) IN BOTH THE Y EARS AND COMMENCED INVESTIGATION. HE CONFRONTED THE ASSESSE E TO SHOW GENUINENESS OF THE PURCHASE FROM THESE CONCERNS. T HE ASSESSEE CONTENTED THAT THESE PURCHASES WERE MADE TELEPHONIC ALLY AND PAYMENTS WERE MADE THROUGH BANKING CHANNEL. ACCORDI NG TO THE ITA NO.2304 AND 2305/AHD/2017 3 ASSESSEE, HE HAS SUBMITTED BANK CERTIFICATE FROM TH E SELLER SHOWING PAYMENTS WERE RECEIVED THROUGH BANK CHANNEL . COPY OF THE INCOME-TAX RETURN, PAN AND CONFIRMATION FROM KR IYA IMPEX PVT. LTD., AND KALASH ENTERPRISES WERE STATED TO BE FILED BEFORE THE AO. THE LD.AO WAS NOT SATISFIED WITH THE NATURE OF EVIDENCE SUBMITTED BY THE ASSESSEE. HE ASSIGNED (VII) REASON S FOR REJECTING THE EXPLANATIONS AND ARRIVED AT A CONCLUSION THAT T HE ASSESSEE HAS INFLATED THE EXPENSES. THE REASONS GIVEN BY THE AO IN BOTH THE ASSESSMENT YEARS ARE COMMON WHICH READS AS UNDER: (I) IN VIEW OF THE ABOVE INFORMATION IN RESPECT OF NON- GENUINE BILLS/BOGUS SEALS, IT IS NOTICED THAT THE A SSESSEE IS ONE OF THE BENEFICIARY OF BOGUS BILL AND HAS OBTAIN ED BOGUS BILLS FOR THE PURCHASE AMOUNTING TO RS.2,00,000/- I N F.Y.2008-09 RELEVANT TO A.Y.2009-10 FROM THE KRIYA IMPEX P.LTD., SURAT. (II) THE INCOME TAX DEPARTMENT HAS CONDUCTED SEARCH AND SEIZURE ACTION IN THE CASE OF GROUP CONCERNS OF SHR I RAJENDRA JAIN & GAUTAM JAIN AND CONCLUSIVELY PROVED THAT THE SE PARTIES ARE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES ONLY AS CAN BE SEEN FROM THE DISCUSSIONS IN THE PRECEDING PARAGRAPHS. KRIYA IMPE X PVT. LTD IS RUN BY SHRI RAJENDRA JAIN AND IS ISSUING BIL LS WITHOUT DELIVERING ANY GOODS AND SERVICES. (III) EVIDENTLY THE ASSESSEE HAD ADOPTED A MODUS OP ERANDI TO REDUCE ITS TRUE PROFITS BY INFLATING ITS PURCHASE E XPENSES BY TAKING ACCOMMODATION ENTRIES FROM KRIYA IMPEX PVT. LTD. (IV) THUS IN THE STOCK STATEMENT OF THE ASSESSEE, T HE PURCHASES TO THE EXTENT MADE FROM KRIYA IMPEX PVT, LTD REMAINED UN VERIFIABLE AND HENCE I ARRIVE AT THE CO NCLUSION THAT THE PURCHASES SHOWN BY THE ASSESSEE IN THE STO CK STATEMENT ARE INFLATED AND BOGUS PURCHASES ARE DEBI TED TO TRADING ACCOUNT TO SUPPRESS THE TRUE PROFITS FROM D ISCLOSURE TO THE DEPARTMENT. ITA NO.2304 AND 2305/AHD/2017 4 (V) THE ASSESSEE IS FAILED TO PRODUCE ANY DOCUMENTA RY EVIDENCE REGARDING THE DETAILS OF QUANTITY OF GOODS TRADED, INTERNAL COMMUNICATION REGARDING GOODS, TRANSACTION AND DELIVERY OF GOODS AND DISPOSAL OF THE ABOVE GOODS. (VI) THE ONUS WAS UPON THE ASSESSEE TO ESTABLISH TH E GENUINENESS OF THE PURCHASES MADE BY THE ASSESSEE. (VII) MERE FILING OF EVIDENCES IN SUPPORT OF PURCHA SES AND PAYMENT THROUGH CHEQUES CAN NOT BE CONCLUSIVE IN A CASE WHERE GENUINENESS OF TRANSACTION IS IN DOUBT. PAYME NTS BY ACCOUNT PAYEE CHEQUES ARE NOT SACROSANCT. (VIII) ALL THE EVIDENCES POINT TO THE FACT THAT NO ACTUAL GOODS WERE SUPPLIED BY THE ABOVE PARTIES; THE ARGUMENT OF THE ASSESSEE THAT IT PURCHASED GOODS IN THE GOOD FAITH IS NOT TENABLE. 5. IN THIS WAY, THE LD.AO HAS MADE DISALLOWANCE OF RS.2 LAKHS IN THE ASSTT.YEAR 2010-11 AND RS.5,63,833/- IN THE ASSTT.YEAR 2011-12. ON APPEAL, THE ASSESSEE HAS REITERATED HI S CONTENTIONS, AS WERE RAISED BEFORE THE AO, BUT THE LD.CIT(A) DID NOT FIND ANY MERIT IN THE CONTENTIONS OF THE ASSESSEE. BASICALLY , THE LD.CIT(A) HAS CONFIRMED THE ADDITION BY RELYING ON THE ORDER OF THE ITAT, AHMEDABAD IN ITA NO.2447/AHD/2016 IN THE CASE OF PA VANKUMAR M. SANGHVI VS. ITO. THE LD.CIT(A) HAS REPRODUCED T HIS ORDER FULLY, WHICH IS AN ELABORATE ORDER. IT IS WORTH TO TAKE N OTE OF FINDING OF THE LD.CIT(A) ON THIS ISSUE, WHICH READ AS UNDER: DECISION: 5. THE SUBMISSION OF THE APPELLANT AND THE ASSESSME NT ORDER HAS BEEN CAREFULLY CONSIDERED. THE ONLY EFFECTIVE G ROUND OF APPEAL IS AGAINST THE ADDITIONS OF RS.2 LAC MADE BY THE ASSESSING OFFICER STATING THAT THE PURCHASES MADE F ROM KRIYA IMPEX PVT. LTD. IS NOT GENUINE. THE ASSESSING OFFIC ER HAD INFORMATION FROM THE INVESTIGATION WING, MUMBAI THA T SHRI RAJENDRA JAIN, PROMOTER OF GROUP COMPANIES INCLUDIN G KRIYA IMPEX PVT.LTD. STATED ON OATH DURING THE COURSE OF SEARCH ITA NO.2304 AND 2305/AHD/2017 5 PROCEEDINGS THAT HE IS INDULGING IN PROVIDING ACCOM MODATION ENTRIES IN THE FORM OF BOGUS LOANS AND SALES. ON TH E BASIS OF THIS INFORMATION AND THE STATEMENT OF SHRI RAJENDRA JAIN, THE A.O. MADE THE ADDITIONS OF RS.2,00,000/-. THE APPEL LANT CONTENDED THAT PURCHASES MADE FROM KRIYA IMPEX PVT. LTD, ARE GENUINE BECAUSE THE PAYMENTS HAVE BEEN MADE BY ACCOUNT PAYEE CHEQUES. THE PURCHASES MADE BY THE APPELLANT SHOWN IN STOCK REGISTER AND SHOWN AS SALE S AND THE A.O. DID NOT FOUND ANY DISCREPANCY IN BOOKS OF ACCO UNTS MAINTAINED BY THE APPELLANT. THE APPELLANT ALSO CON TENDED THAT OPPORTUNITY OF CROSS EXAMINATION OF SHRI RAJEN DRA JAIN WAS NOT GIVEN TO THE APPELLANT. THE FACTS OF THE CA SE, ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLAN T HAS BEEN CAREFULLY CONSIDERED. IT IS FOUND THAT THE CAS E OF THE APPELLANT IS SQUARELY COVERED BY THE ORDER OF HON'B LE ITAT SMC BENCH, AHMEDABAD IN ITA NO.2447/AHD/2016 IN TH E CASE OF PAVANKUMAR IVI. SANGHVI VS, ITO 3(1U2), VADO DARA. THE ABOVE MENTIONED ORDER IS REPRODUCED BELOW: 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE AS FOLLOWS. THE ASSESSEE BEFORE ME IS AN INDIVIDUAL, OWNING A PROPR IETORSHIP CONCERN BY THE NAME OF RAVI STEELS, AND HE CLAIMS T O HAVE RECEIVED UNSECURED LOANS OF RS 10 LAKHS EACH FROM N ATASHA ENTERPRISES ON 11TH AUGUST 2006 AND FROM MOHIT INTE RNATIONAL ON 27TH APRIL 2006. HIS ASSESSMENT WAS INITIALLY COMPL ETED UNDER SECTION 143(1) OF THE ACT, BUT SUBSEQUENTLY THE ASSESSING OFFICER CAME TO KNOW, THROUGH REPORTS RECEIVED FROM THE DIRECTORATE OF INCOME TAX (INVESTIGATION), THAT NAT SHA ENTERPRISES AND MOHIT INTERNATIONAL WERE A PART OF THE GROUP OF SHELL ENTITIES, MANAGED BY ONE PRAVEEN KUMAR JAIN (PKJ, IN SHORT), USED AS A VEHICLE FOR VARIOUS FINANCIAL MANOEUVRES. IT WAS IN THIS BACKDROP THAT THE ASSESSMENT WAS REOPENED. DURING THE ENSURI NG REASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CONFRONT ED WITH THIS INFORMATION BUT HE HAD NOTHING TO SAY. HE DID, AT T HE FAG END OF ASSESSMENT PROCEEDINGS, FILED THE LOAN CONFIRMATION S, COPIES OF LEDGER ACCOUNT AND OTHER SUPPORTING EVIDENCES TO JU STIFY THE TRANSACTIONS. THE ASSESSING OFFICER, HOWEVER, WAS N OT SATISFIED. HE NOTED THAT THE ASSESSEE HAD NOTHING TO SAY ON TH E SPECIFIC QUESTIONS PUT TO HIM ON GENUINENESS OF THESE TRANSA CTIONS HE WAS THUS APPARENTLY OF THE VIEW THAT MERE FILING OF BALANCE CONFIRMATION AND DETAILS OF EXISTENCE OF THE CREDIT ORS DOES NOT SHOW THAT THE TRANSACTIONS ARE GENUINE. IT WAS IN T HIS BACKDROP THAT THE ASSESSING OFFICER PROCEEDED TO MAKE ADDITI ON OF RS 20,00,000 AS UNEXPLAINED CREDITS. THE ASSESSING OFF ICER ALSO NOTED THAT THE ASSESSEE HAD CLAIMED DEDUCTION IN RE SPECT OF THE INTEREST PAYMENTS, IN RESPECT OF THESE ALLEGED UNSE CURED LOANS, ITA NO.2304 AND 2305/AHD/2017 6 AGGREGATING TO RS 3,66,041, BUT SINCE THE LOAN TRAN SACTIONS WERE TREATED AS NOT GENUINE, THE INTEREST WAS ALSO LIABL E TO BE DISALLOWED. HE THUS DISALLOWED DEDUCTION IN RESPECT OF THE INTEREST DEDUCTION AS WELL. AGGRIEVED BY THE STAND OF THE AS SESSING OFFICER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFO RE THE CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISF IED AND IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 4. LEARNED COUNSEL FOR THE ASSESSEE BEGINS BY POINT ING OUT THAT THE UNSECURED LOANS HAVE BEEN TREATED AS UNEXPLAINE D CASH CREDIT ONLY ON THE BASIS OF THE INFORMATION RECEIVE D, BY THE AO, FROM THE INVESTIGATION WING. IT IS POINTED OUT THAT THIS INFORMATION PERTAINS TO SOME INVESTIGATIONS, AND SEARCH AND SEI ZURE OPERATION, CARRIED OUT IN THE CASE OF PKJ ON 1ST OC TOBER 2013, AND IS BASED ON A STATEMENT OF THIS PERSON RECORDED BY THE INVESTIGATION WING. HOWEVER, WHAT THE ASSESSING OFF ICER HAS OVERLOOKED IS THAT PKJ HIMSELF HAD RETRACTED HIS ST ATEMENT AND, IN ANY CASE, THE ASSESSEE WAS NEVER CONFRONTED WITH TH IS STATEMENT. IT IS SUBMITTED THAT THE ASSESSEE CANNOT BE PUT TO ANY DISADVANTAGE ON THE BASIS OF A CONFESSIONAL STATEME NT RECORDED BY A THIRD PARTY- PARTICULARLY WHEN THE ASSESSEE DI D NOT EVEN HAVE THE OPPORTUNITY TO PERUSE SUCH A STATEMENT. LEARNED COUNSEL FURTHER POINTS OUT THAT THE ASSESSEE WAS DULY ENTIT LED TO AN OPPORTUNITY TO CROSS EXAMINE PKJ BUT THE ASSESSING OFFICER DID NOT PROVIDE THE ASSESSEE ANY SUCH OPPORTUNITY. ON T HESE FACTS, ACCORDING TO THE LEARNED COUNSEL, THE IMPUGNED ADDI TIONS ARE CONTRARY TO THE WELL SETTLED PRINCIPLES OF NATURAL JUSTICE WHICH ARE WELL ENTRENCHED IN THE TAX JURISPRUDENCE. IN ANY EV ENT, ACCORDING TO THE LEARNED COUNSEL, PKJ HAS SUBSEQUENTLY RETRAC TED, ON 15TH MAY 2014, HIS CONFESSIONAL STATEMENT, AS EVIDENT FR OM THE RETRACTION AFFIDAVIT DATED 15TH MAY 2014 - A COPY O F WHICH WAS ALSO FILED BEFORE ME. LEARNED COUNSEL THEN SUBMITS THAT NOTHING PREVENTED THE ASSESSING OFFICER FROM USING HIS POWE RS UNDER SECTION 133(6) AND EXAMINING THE MATTER FURTHER BY ENFORCING ATTENDANCE OF THE LENDERS, BUT, RATHER THAN DOING W HAT THE ASSESSING OFFICER OUGHT TO HAVE DONE, HE IS SIMPLY SWAYED BY UNVERIFIED INPUTS RECEIVED FROM THE INVESTIGATION W ING. LEARNED COUNSEL THEN INVITES MY ATTENTION TO THE AFFIDAVITS FILED BY THE PROPRIETORS OF NATASHA ENTERPRISES AND MOHIT INTERN ATIONAL WHICH CONFIRM THAT THE LOANS WERE ACTUALLY ADVANCED BY TH ESE PERSONS ON 12% INTEREST, THAT THE LOANS HAVE SINCE BEEN REP AID AND THAT THE INTEREST EARNED ON THESE LOANS HAS BEEN DULY OF FERED TO TAX. UNDER THESE CIRCUMSTANCES, THERE CANNOT BE ANY LAWF UL REASONS TO REJECT BONAFIDES OF THESE LOAN TRANSACTIONS. IT IS THEN SUBMITTED THAT THE LOAN TRANSACTIONS WERE BY CHEQUES, WHICH I S DULY EVIDENCED FROM THE BANK STATEMENTS OF THE LENDERS A S FILED BY THE ASSESSEE, COPIES OF LOAN CONFIRMATIONS AND STATEMEN TS OF ACCOUNTS WERE DULY FILED BY THE ASSESSEE, THE ACCOU NTS OF THE ITA NO.2304 AND 2305/AHD/2017 7 LENDERS WERE DULY AUDITED UNDER SECTION 44AB , AND THAT THE INITIAL ONUS OF DEMONSTRATING THE BONAFIDES OF LOAN TRANSAC TIONS WAS DULY DISCHARGED BY THE ASSESSEE. LEARNED COUNSEL THEN RE FERRED TO HON'BLE SUPREME COURT'S JUDGMENT IN THE CASE OF KIS HANCHAND CHELARAM VS CIT [(1980) 125 ITTR 713 (SC)] IN SUPPO RT OF THE PROPOSITION THAT THE INCOME TAX AUTHORITIES COULD N OT RELY UPON ANY STATEMENT WHICH HAS NOT BEEN CONFRONTED TO THE ASSE SSEE AND IN RESPECT OF WHICH THE ASSESSEE HAS NOT BEEN GIVEN OP PORTUNITY TO CROSS EXAMINE. LEARNED COUNSEL FOR THE ASSESSEE ALS O REFERRED TO CERTAIN DISCREPANCIES POINTED OUT BY THE CIT(A) AND MADE AN EFFORT TO DEMONSTRATE THAT THESE DISCREPANCIES ARE FACTUALLY INCORRECT. A REFERENCE WAS THEN MADE TO HON'BLE BOM BAY HIGH COURT'S JUDGMENT IN THE CASE OF H R MEHTA VS ACIT ( ITA NO. 58 OF 2001; UNREPORTED JUDGMENT DATED 30TH JUNE 2016) IN SUPPORT OF THE PROPOSITION THAT WHEN THE ASSESSEE WAS NOT GIVE N AN OPPORTUNITY TO CROSS EXAMINE THE PERSON, WHO HAS DE POSED AGAINST THE ASSESSEE, SUCH A MATERIAL COULD NOT BE PUT AGAINST THE ASSESSEE, AND MERELY BECAUSE A LENDER IS NOT AVAILA BLE AT THE SAME ADDRESS SEVERAL YEARS AFTER THE LOAN TRANSACTI ON HAS TAKEN PLACE, IT CANNOT BE INFERRED THAT THE TRANSACTION I S NOT GENUINE. AS REGARDS THE DISALLOWANCE OF DEDUCTION FOR INTEREST, LEARNED COUNSEL SUBMITS THAT SINCE THE RELATED LOANS, IN TH E LIGHT OF THE ARGUMENTS SO ADVANCED, CANNOT BE SAID TO BE BOGUS, THE INTEREST DEDUCTIONS ARE ALSO REQUIRED TO BE ALLOWED IN ACCOR DANCE WITH THE LAW. ON THE STRENGTH OF THESE SUBMISSIONS, LEARNED COUNSEL URGES ME TO DELETE THE IMPUGNED ADDITION OF RS 20,00,000 AND IMPUGNED DISALLOWANCE OF RS 3,66,041. I AM THUS URG ED TO SET ASIDE FINDINGS OF THE AUTHORITIES BELOW ON THESE PO INTS. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUB MITS THAT IT IS INCONCEIVABLE THAT SOME RANK OUTSIDERS GIVE UNSECUR ED LOANS, AGGREGATING TO RS 20,00,000, TO THE ASSESSEE, AND Y ET THE ASSESSEE IS NOT EVEN ABLE TO PRODUCE THE SAME OR GI VE SUFFICIENT INFORMATION ABOUT THE NATURE OF RELATIONSHIP WITH H IM. THE DOCUMENTS FILED BY THE ASSESSEE ARE SELF SERVING DO CUMENTS AND A MERE STATEMENT ON AFFIDAVIT CANNOT BE ACCEPTED IR RESPECTIVE OF THE GROUND REALITIES. IT IS SUBMITTED THAT IN EACH LOAN TRANSACTION, THREE ELEMENTS ARE REQUIRED TO BE EXAMINED- EXISTEN CE OF LENDER, GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS OF THE LENDER. IN THE PRESENT CASE, ALL THAT THE ASSESSEE HAS PROVED IS EXISTENCE OF THE PERSON AS THE TRANSACTIONS HAVE TAKEN PLACE THR OUGH BANKING CHANNELS. JUST BECAUSE A PERSON EXISTED, IT DOES NO T MEAN THAT ALL THE TRANSACTIONS WITH HIM ARE GENUINE AND THE PERSO N HAD MEANS TO ADVANCE THE LOANS IN QUESTION. IT IS ALSO POINTE D OUT THAT THE LENDERS ARE BELIEVED TO BE SHELL ENTITIES AND THIS FACT WAS DULY BROUGHT TO THE NOTICE OF THE ASSESSEE BUT THE ASSES SEE DID NOT HAVE ANYTHING TO SAY ON THIS POINT. ON ONE HAND, AC CORDING TO THE LEARNED DEPARTMENTAL REPRESENTATIVE, PKJ IS SO CLOS ELY IN TOUCH WITH THE ASSESSEE THAT THE ASSESSEE IS ABLE TO OBTA IN AND FILE THE ITA NO.2304 AND 2305/AHD/2017 8 RETRACTION AFFIDAVIT MADE BY PKJ, AND, ON THE OTHER HAND, THE ASSESSEE FEIGNS IGNORANCE ABOUT THE STATEMENT MADE BY PKJ BEFORE THE INCOME TAX AUTHORITIES. IT IS THEN POINT ED OUT THAT AT NO STAGE IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE A SKED FOR THE STATEMENT OF PKJ OR EXPRESSED THE DESIRE TO CROSS E XAMINE PKJ. EVEN THE FACT OF THE ALLEGED LENDERS BEING IN THE B USINESS OF GIVING ACCOMMODATION ENTRIES WAS DULY PUT TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS, BY WAY OF NOTE SHEET ENTRIE S, AND THE ASSESSEE HAD NOTHING TO SAY ON THIS POINT DURING TH E ASSESSMENT PROCEEDINGS. IN ANY CASE, IRRESPECTIVE OF THE STATE MENT OF PRAVEEN KUMAR JAIN, THE ONUS IS ON THE ASSESSEE TO DEMONSTR ATE THAT THE LOAN TRANSACTIONS ARE GENUINE, IN THE NORMAL COURSE OF BUSINESS, AND BONAFIDE. THIS ONUS HAS NOT BEEN DISCHARGED BY THE ASSESSEE. IT IS ALSO SUBMITTED THAT THE ALLEGED LEN DERS ARE SHELL ENTITIES, AND, IN THE CASE OF SHELL ENTITIES, IT IS NOT THE COMPLETION OF PAPER WORK BUT GENUINENESS OF TRANSACTIONS WHICH IS CRUCIAL. MY ATTENTION IS THEN DRAWN TO THE APPARENT INCONSISTEN CIES IN THE VERSION PUT BY THE ASSESSEE. I AM URGED TO DISREGAR D THE MAKE BELIEVE DOCUMENTS FILED BY THE ASSESSEE AND UPHOLD THE FINDINGS OF THE AUTHORITIES BELOW. IN HIS BRIEF REJOINDER, L EARNED COUNSEL REITERATED HIS SUBMISSIONS AND SUBMITS THAT THE LEG AL CONTENTIONS ADVANCED BY HIM REMAIN UNCONTROVERTED. HE ALSO SUBM ITS THAT THE DEPARTMENTAL REPRESENTATIVE, OR FOR THAT PURPOSE, T HIS TRIBUNAL CANNOT GO BEYOND THE CASE MADE OUT BY THE ASSESSING OFFICER AND RAISE THE ISSUES WHICH HAVE NOT BEEN RAISED BY THE ASSESSING OFFICER. LACK OF GENUINENESS IS NOT, ACCORDING TO T HE LEARNED COUNSEL, CASE OF THE ASSESSING OFFICER. THE SHORT P OINT OF THE AUTHORITIES BELOW IS THAT THE LOAN ENTRIES ARE ALLE GED ACCOMMODATION ENTRIES BUT THEN THERE IS NOTHING TO EVIDENCE THIS FACT. IT IS FOR THE PERSON WHO MAKES THE ALLEGATION S TO PROVE THAT THE ALLEGATIONS ARE CORRECT. THE ASSESSING OFFICER, THEREFORE, MUST DEMONSTRATE THAT THE LOAN TRANSACTIONS IN QUESTION ARE NOT GENUINE TRANSACTIONS, AND WHEN HE CANNOT DO SO, THE RELATED ADDITIONS CAN ONLY BE DELETED. LEARNED COUNSEL ONCE AGAIN URGES M E TO VACATE THE FINDINGS OF THE AUTHORITIES BELOW, AND DELETE T HE IMPUGNED ADDITIONS AND DISALLOWANCES. 5. I HAVE NOTED THAT THE ASSESSEE DID NOT RAISE ANY ISSUE AGAINST VALIDITY OF REOPENING PROCEEDINGS AT ANY STAGE- ASS ESSMENT, FIRST APPEAL AS ALSO SECOND APPEAL. WHEN THE ASSESSEE WAS TOLD ABOUT THE ALLEGED LENDERS BEING SHELL ENTITIES, HE DID NO T HAVE ANYTHING TO SAY EITHER. THE ASSESSEE DID NOT ASK FOR THE CRO SS EXAMINATION OF PKJ IN THE ASSESSMENT PROCEEDINGS NOR DID HE RAI SE THAT ISSUE, AS EVIDENT FROM A COPY OF THE GROUNDS OF APPEAL BEF ORE THE CIT(A)- AS FILED BEFORE ME, AT THE FIRST APPELLATE STAGE. YET, HIS PLEA BEFORE ME IS THAT SINCE HE WAS NOT AFFORDED AN Y OPPORTUNITY TO CROSS EXAMINE PKJ, THE IMPUGNED ADDITIONS SHOULD BE DELETED. I DONOT THINK SUCH A PLEA CAN BE ENTERTAINED AT THI S STAGE, ITA NO.2304 AND 2305/AHD/2017 9 PARTICULARLY IN THE LIGHT OF PECULIAR FACTS OF THIS CASE. I HAVE NOTED THAT THE ASSESSEE FEIGNS IGNORANCE ABOUT THE STATEM ENT OF PKJ, AS RECORDED BY THE INCOME TAX AUTHORITIES, BUT HE F ILES A COPY OF THE RETRACTION AFFIDAVIT DATED 15TH MAY 2014. THERE IS AN INHERENT CONTRADICTION IN THIS APPROACH. AS A MATTER OF FACT , EVEN IN THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE DID NOT ASK FOR THE CROSS EXAMINATION OF PKJ AS EVIDENT FROM THE LIMITED ARGU MENT OF THE ASSESSEE, NOTED AT PAGE 5 OF THE CIT(A)'S ORDER, TO THE EFFECT THAT 'IT IS SUBMITTED THAT PRAVIN KUMAR JAIN HAS ALSO RE TRACTED HIS STATEMENT ON OATH UNDER SECTION 131 DATED 15.5.2014 AND HAS CONFIRMED THAT THE ABOVE TRANSACTIONS WITH THE SAID PARTIES ARE GENUINE (COPY ENCLOSED HEREWITH FOR YOUR RECORDS)'. THERE IS NOT EVEN A WHISPER ABOUT INCORRECTNESS OF THE ORIGINAL STATEMENT OF PKJ BUT ALL THAT THE ASSESSEE STATES IS THAT THIS S TATEMENT IN SUBSEQUENTLY RETRACTED. IT IS ALSO INTERESTING TO N OTE THAT, AS HAS BEEN OBSERVED IN THE ASSESSMENT ORDER AT PAGE 2, TH E INCOME TAX AUTHORITIES HAD, DURING THE SEARCH OPERATIONS ON PK J GROUP, ALSO RECORDED A STATEMENT OF NILESH PARMAR, PROPRIETOR O F MOHIT INTERNATIONAL AND THE PERSON WHO LOOKED AFTER THE A CCOUNTING AND ALL OTHER MATTERS OF NATASHA ENTERPRISES, BUT NEITH ER THE ASSESSEE DISPUTES NOR RAISES ANY ISSUES ABOUT IT. THERE IS N O SUGGESTION ABOUT RETRACTION OF THIS STATEMENT EITHER. THE ASSE SSEE HAS FILED AN AFFIDAVIT DATED 27TH FEBRUARY 2017 OF NILESH PAR MAR, CLAIMING BONAFIDES OF ASSESSEE'S TRANSACTIONS WITH MOHIT INT ERNATIONAL, BUT NEITHER THERE IS ANY ISSUE ABOUT CROSS EXAMINING HI M NOR ANY MENTION OF RETRACTION, IF ANY, OF HIS CONFESSIONAL STATEMENT. THE ASSESSEE HAS SO MUCH OF AN ACCESS TO THESE LENDERS THAT HE IS ABLE TO PRODUCE THEIR BANK ACCOUNTS, THEIR YEAR END FINANCIAL STATEMENTS AND EVEN ALL THE AUDIT REPORTS, BUT HE I S UNAWARE OF THE STATEMENT THESE LENDERS MADE TO THE INCOME TAX AUTH ORITIES AND YET HE IS NOT IN A POSITION TO PRODUCE THE PARTIES OR EVEN KNOW THEIR CURRENT WHEREABOUTS. THESE CONTRADICTIONS ARE UNEXPLAINABLE. IT WAS CLEARLY PUT TO THE ASSESSEE T HAT, AS PER INFORMATION GATHERED BY THE INCOME TAX AUTHORITIES AS A RESULT OF SEARCH AND SEIZURE OPERATIONS ON PKJ GROUP, IT IS C LEAR THAT (I) PKJ IS A DIRECTOR IN SOME OF THE ENTITIES BUT HE DE FACTO CONTROLS A LARGE NUMBER OF SHELL ENTITIES THROUGH VARIOUS DUMM Y DIRECTORS AND PROPRIETORS; (II) ALL SUCH PKJ GROUP CONCERNS, WHILE INCLUDE NATASHA ENTERPRISES AND MOHIT INTERNATIONAL, ARE NO T CARRYING ON ANY GENUINE BUSINESS NOR DO THEY HAVE ANY PHYSICAL STOCK OF GOODS THAT THEY ARE DEALING IN; (III) ALL THESE PKJ GROUP ENTITIES HAVE NO EMPLOYEES, EXCEPT COMMON ACCOUNTANTS; AND ( IV) ALL THESE PKJ GROUP ENTITIES ARE ENGAGED IN THE ACTIVIT IES OF PROVIDING ACCOMMODATION ENTRIES. WHEN ASSESSEE IS CONFRONTED WITH THIS INFORMATION, HE MAINTAINS A STOIC SILENCE, AND SIMP LY GIVES THE DOCUMENTATION IN SUPPORT OF THE FACT OF TRANSACTION S. WHAT HE OVERLOOKS IS THAT THE EXISTENCE OF DOCUMENTATION IN SUPPORT OF THESE TRANSACTIONS WAS NOT EVEN DISPUTED BY THE REV ENUE ITA NO.2304 AND 2305/AHD/2017 10 AUTHORITIES, AND THAT THE REAL ISSUE, IN THE BACKDR OP OF THESE INPUTS, IS ON THE GENUINENESS OF THE TRANSACTIONS. THERE WAS NOT EVEN AN ATTEMPT TO DEAL WITH THAT ASPECT OF THE MAT TER, OR STATE EVEN ONE WORD AGAINST WHAT THE ASSESSING OFFICER HA D TO TELL THE ASSESSEE ON THIS FRONT. IN THESE CIRCUMSTANCES, IT CANNOT BE OPEN TO THE ASSESSEE TO CONTEND THAT THE ADDITIONS SHOUL D BE DELETED SIMPLY ON THE GROUND THAT THE ASSESSEE WAS NOT GIVE N AN OPPORTUNITY TO CROSS EXAMINE PKJ. WHEN THE ASSESSEE IS CONFRONTED WITH ALL THE FACTS AT THE ASSESSMENT STA GE, HE HAS NOTHING TO SAY. HE MAINTAINS HIS STOIC SILENCE EVEN AT THE FIRST APPELLATE STAGE. HOWEVER, WHEN HE COMES BEFORE ME I N THE SECOND APPEAL, HIS GRIEVANCE IS ABOUT VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AT THE ASSESSMENT AND THE FIRST APP ELLATE STAGE. THERE ARE CLEAR INCONSISTENCIES AND CONTRADICTIONS IN THE APPROACH OF THE ASSESSEE. 6. BE THAT AS IT MAY WHAT IS EVEN MORE IMPORTANT IS THAT WHILE THE REASSESSMENT HAS INDEED BEEN RESORTED TO ON THE BAS IS OF THE INPUTS FROM THE INVESTIGATION WING, WITH WHICH THE ASSESSEE IS NOT AGGRIEVED ANYWAY, IN MY CONSIDERED VIEW, THE IMPUGN ED ADDITIONS ARE NOT MADE ON THE BASIS OF THESE INPUTS SIMPLICTO R. 7. IN MY CONSIDERED VIEW, SO FAR AS THE LEGAL FOUND ATION OF THE IMPUGNED ADDITIONS IS CONCERNED, IT CONSISTS OF ASS ESSEE'S INABILITY TO SATISFY THE ASSESSING OFFICER ABOUT AL L THE THREE ESSENTIAL INGREDIENTS OF A CREDIT ENTRY IN THE BOOK S OF ACCOUNTS- EXISTENCE OF THE LENDER, ABILITY OF THE LENDER TO A DVANCE FUNDS IN QUESTION, AND, ABOVE ALL, GENUINENESS OF THE TRANSA CTION. THERE IS NO DISPUTE ABOUT THE BASIC LEGAL POSITION ABOUT SECTION 68 WHICH PROVIDES THAT WHERE ANY SUM IS FOUND CREDITED IN TH E BOOKS OF ACCOUNTS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCES THEREOF, OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CRE DITED MAY BE CHARGED TO INCOME TAX AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THE EXPRESSION 'NATURE AND SOURCE' A PPEARING IN SECTION 68 HAS TO BE UNDERSTOOD AS A REQUIREMENT OF IDENTIFICATION OF SOURCE AND ITS GENUINENESS. IT IS ALSO A SETTLED LE GAL POSITION THAT THE ONUS OF THE ASSESSEE, OF EXPLAINING NATURE AND SOURCE OF CREDIT, DOES NOT GET DISCHARGED MERELY BY FILING CO NFIRMATORY LETTERS, OR DEMONSTRATING THAT THE TRANSACTIONS ARE DONE THROUGH THE BANKING CHANNELS OR EVEN BY FILING THE INCOME T AX ASSESSMENT PARTICULARS. IN THE CASE OF CIT VS UNITED COMMERCIA L AND INDUSTRIAL CO PVT LTD [(1991) 187 ITR 596 (CAL)], H ON'BLE CALCUTTA HIGH COURT HAS HELD THAT 'IT WAS NECESSARY FOR THE ASSESSEE TO PROVE PRIMA FACIE THE IDENTITY OF CREDITORS, THE CA PACITY OF SUCH CREDITORS AND LASTLY THE GENUINENESS OF TRANSACTION S'. SIMILARLY, IN THE CASE OF CIT VS PRECISION FINANCE PVT LTD [(1994 ) 208 ITR 465 ITA NO.2304 AND 2305/AHD/2017 11 (CAL)], IT WAS OBSERVED THAT 'IT IS FOR THE ASSESSE E TO PROVE THE IDENTITY OF CREDITORS, THEIR CREDITWORTHINESS AND G ENUINENESS OF TRANSACTIONS'. THERE IS THUS NO ESCAPE FROM PROVING GENUINENESS OF A TRANSACTION. AS REGARDS LEARNED COUNSEL'S CONT ENTION THAT NOTHING CAN BE ADDED TO THE OBJECTIONS SPECIFICALLY TAKEN BY THE ASSESSING OFFICER, I AM UNABLE TO APPROVE THIS PLEA FOR THE SIMPLE REASON THAT AS LONG AS SUBJECT MATTER OF THE DISALL OWANCE OR ADDITION IS THE SAME, THERE IS NO BAR ON EXAMINATIO N OF ANY RELATED ASPECT BY THE TRIBUNAL, AS HAS BEEN SPECIFICALLY HE LD BY A FULL BENCH OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF A HMEDABAD ELECTRICITY CO LTD VS CIT [(1993) 199 ITR 351 (BOM FB)] AND REITERATED BY A SPECIAL BENCH OF THIS TRIBUNAL IN T HE CASE OF TATA COMMUNICATIONS LTD VS JCIT [(2009) 121 ITD SB 384 ( MUM)]. THAT IS, OF COURSE, BESIDES THE FACT THAT THERE IS NO ATTEMPT, DIRECT OR INDIRECT, TO ENLARGE THE SUBJECT MATTER OF APPEA L. THE LEGAL PLEA OF THE LEARNED COUNSEL PROCEEDS ON CLEARLY FALLACIO US ASSUMPTIONS. 8. AS I PROCEED TO DEAL WITH GENUINENESS ASPECT, IT IS IMPORTANT TO BEAR IN MIND THE FACT THAT WHAT IS GENUINE AND WHAT IS NOT GENUINE IS A MATTER OF PERCEPTION BASED ON FACTS OF THE CAS E VIS--VIS THE GROUND REALITIES. THE FACTS OF THE CASE CANNOT BE C ONSIDERED IN ISOLATION WITH THE GROUND REALTIES. IT WILL, THEREF ORE, BE USEFUL TO UNDERSTAND AS TO HOW THE SHELL ENTITIES, WHICH THE LOAN CREDITORS ARE ALLEGED TO BE, TYPICALLY FUNCTION, AND THEN COM PARE THESE CHARACTERISTICS WITH THE FACTS OF THE CASE AND IN T HE LIGHT OF WELL SETTLED LEGAL PRINCIPLES. A SHELL ENTITY IS GENERAL LY AN ENTITY WITHOUT ANY SIGNIFICANT TRADING, MANUFACTURING OR SERVICE A CTIVITY, OR WITH HIGH VOLUME LOW MARGIN TRANSACTIONS- TO GIVE IT COL OUR OF A NORMAL BUSINESS ENTITY, USED AS A VEHICLE FOR VARIOUS FINA NCIAL MANOEUVRES. A SHELL ENTITY, BY ITSELF, IS NOT AN IL LEGAL ENTITY BUT IT IS THEIR ACT OF ABATEMENT OF, AND BEING PART OF, FINAN CIAL MANOEUVRING TO LEGITIMISE ILLICIT MONIES AND EVADE TAXES, THAT TAKES IT ACTIONS BEYOND WHAT IS LEGALLY PERMISSIBLE. THESE ENTITIES HAVE EVERY SEMBLANCE OF A GENUINE BUSINESS- ITS LEGAL OWNERSHI P BY PERSONS IN EXISTENCE, STATUTORY DOCUMENTATION AS NECESSARY FOR A LEGITIMATE BUSINESS AND A DOCUMENTATION TRAIL AS A LEGITIMATE TRANSACTION WOULD NORMALLY FOLLOW. THE ONLY THING W HICH SETS IT APART FROM A GENUINE BUSINESS ENTITY IS LACK OF GEN UINENESS IN ITS ACTUAL OPERATIONS. THE OPERATIONS CARRIED OUT BY TH ESE ENTITIES, ARE ONLY TO FACILITATE FINANCIAL MANOEUVRING FOR THE BE NEFIT OF ITS CLIENTS, OR, WITH THAT PREDOMINANT UNDERLYING OBJECTIVE, TO GIVE THE COLOUR OF GENUINENESS TO THESE ENTITIES. THESE SHELL ENTIT IES, WHICH ARE ROUTINELY USED TO LAUNDER UNACCOUNTED MONIES, ARE A FACT OF LIFE, AND AS MUCH A PART OF THE UNDERBELLY OF THE FINANCI AL WORLD, AS MANY OTHER EVILS. EVEN A LAYMAN, MUCH LESS A MEMBER OF THIS SPECIALIZED TRIBUNAL, CANNOT BE OBLIVIOUS OF THESE GROUND REALITIES. ITA NO.2304 AND 2305/AHD/2017 12 9. I HAVE NOTED THAT THE ASSESSEE HAS RECEIVED AN A MOUNT OF RS 10,00,000 FROM NATASHA ENTERPRISES ON 12TH AUGUST 2 006, AND, AS A PLAIN LOOK AT THE CANARA BANK STATEMENT OF THE LENDER, WHICH IS PLACED AT PAGES 40 ONWARDS OF THE PAPER BOOK, WO ULD SHOW, THERE IS A CREDIT OF RS 10,00,000 JUST BEFORE THIS CHEQUE IS PAID. THE BANK BALANCE BEFORE THESE TWO TRANSACTIONS, AND AFTER THESE TWO TRANSACTIONS, WAS ONLY RS 13,717. QUITE INTERES TINGLY, AGAIN ON 14TH AUGUST 2006 IN THE SAME BANK ACCOUNT, THERE ARE DEBIT AND CREDIT TRANSACTIONS OF AROUND RS 15 LAKHS EACH AND THE BALANCE AS ON THE END OF THAT DATE IS RS 8,737. ON 18TH AND 19TH AUGUST 2006, AGAIN THERE ARE QUITE A FEW TRANSACTIO NS AGGREGATING TO RS 10 LAKHS ON DEBIT AS ALSO CREDIT SIDE, AND YE T AGAIN CLOSING BALANCE IS RS 7,578. ON 22ND AUGUST 2006, THERE ARE TRANSACTIONS OF DEBITS AND CREDITS OF AROUND R 32.50 LAKHS EACH, AND THE CLOSING BALANCE AT THE END OF THE DAY IS AGAIN RS 7 ,578. AS CAN BE SEEN FROM THIS STATEMENT, ON 29TH AUGUST 2006, THER E ARE DEBIT AND CREDIT TRANSACTIONS OF RS 15 LAKHS EACH AND ONC E AGAIN THE CLOSING BALANCE OF THE DAY IS RS 7,578. THIS KIND O F THE STATE OF BANK ACCOUNT DOES NOT INSPIRE ANY FAITH IN THE PROP OSITION THAT THE ENTITY IN QUESTION IS A GENUINE BUSINESS CONCERN. A LOOK AT THE FINANCIAL STATEMENTS FILED BY THE ASSESSEE DOES NOT LEAD TO THIS CONCLUSION EITHER. THE LENDER HAS SHOWN A TURNOVER OF RS 122.92 CRORES BUT THERE IS NO CLOSING STOCK, AND A PROFIT OF ALMOST 0.09% ON THE TURNOVER LEADING TO A TAX PAYMENT OF RS 1,96 ,138. THE LENDER MAKES PURCHASES OF RS 123.04 CRORES IN SUCH DIVERSIFIED AREAS AS CUT AND POLISHED DIAMONDS (RS 73.15 CRORES ), PLYWOOD AND ALUMINIUM (RS 11.72 CRORE), ROUGH DIAMONDS (RS 4.36 CRORES), SOFTWARE (RS 25.01 CRORES) AND OTHER ITEMS (RS 8.79 CRORES), AND SELLS THESE PRODUCTS TOO BUT ALL THAT THE LENDER HAS SPENT ON SALARIES IS RS 2,26,000, ON OFFICE EXPENSE S IS RS 8,560, ON OFFICE RENT IS RS 27,600 AND ON PRINTING AND STA TIONERY IS RS 8,560. ALL THIS IS SIMPLY NOT REPRESENTATIVE OF WHA T A GENUINE BUSINESS WOULD TYPICALLY BE. AS REGARDS MOHIT INTER NATIONAL ALSO, THE STORY IS NO DIFFERENT. THE BANK STATEMENT, WHIC H IS PLACED AT PAGES 75 ONWARDS, HAS THE SAME THEME OF HIGH TRANSA CTIONS DURING THE DAY AND A CONSISTENTLY MINIMAL BALANCE A T THE END OF THE WORKING DAY. ON 28TH APRIL 2006, I.E. THE DAY T HE ASSESSEE IS GIVEN RS 10,00,000, THERE ARE CREDIT ENTRIES OF ALM OST SIMILAR AMOUNTS, AND HE BALANCE AFTER THESE TRANSACTIONS IS A SMALL AMOUNT OF RS 13,020. SIMILAR IS THE PATTERN OF TRAN SACTIONS ON ALL THE DAYS IN RESPECT OF WHICH THIS STATEMENT IS PLAC ED BEFORE ME. ON 23RD MARCH 2007, FOR EXAMPLE, THE OPENING BALANC E IS RS 1,36,611 AND THERE ARE HUGE DEBITS AND CREDIT ENTRI ES ON 23RD AND 24TH MARCH, AGGREGATING TO ALMOST RS 4 CRORES ON DE BIT AS ALSO CREDIT, AND THE CLOSING BALANCE AT THE END OF 24TH MARCH IS RS 85,991. ON A TURNOVER OF RS 127.87 CRORES, THE PROF IT IS LESS THAN 0.09% RESULTING IN TAX OUTGO OF RS 2,96,218. TO EFF ECT THIS SCALE OF OPERATIONS, THE LENDER INCURS NO TRAVELLING OR TELE PHONE EXPENSE, ITA NO.2304 AND 2305/AHD/2017 13 AND ENTIRE EXPENSES OF THE BUSINESS, EXCEPT ON BROK ERAGE AND ASSORTMENT OF DIAMONDS, ARE LESS THAN RS 5 LAKHS IN THE YEAR. INTERESTINGLY, IN TODAY'S WORLD WHERE AN AVERAGE HU MAN BEING, MUCH LESS A BUSINESS ORGANIZATION, CAN LIVE WITHOUT TELEPHONES, THIS BUSINESS ENTITY HAS PROSPERED WITHOUT A RUPEE SPENT OF TELEPHONES. THE LEVEL OF TURNOVER AND THE EXPENDITU RE INCURRED ON ACHIEVING SUCH HIGH TURNOVER DO NOT MATCH AT ALL. T HE NUMBERS DO NOT ADD UP AND THE DETAILS FILED IN RESPECT OF THES E LENDERS DO NOT CONVINCE ME THAT THE LENDERS ARE ROUTINE BUSINESSES . GIVEN THIS BACKGROUND THE ASSESSEE'S INABILITY TO PRODUCE THE RELATED PERSONS OR EVEN GIVE THEIR CURRENT WHEREABOUTS MAKE S THE STORY OF GENUINE TRANSACTIONS EVEN MORE UNBELIEVABLE. IT IS ALSO IMPORTANT TO BEAR IN MIND THE FACT THAT LENDING FOR AN INTERE ST @12% P.A. WITHOUT ANY SECURITY IS NOT SOMETHING WHICH PEOPLE DO FOR RANK OUTSIDERS. THERE HAS TO BE SOME CLOSE ASSOCIATION T O GET SUCH A KIND OF UNSECURED CREDIT AT SUCH LOW RATES. WHEN I CONSIDER THIS SITUATION, COUPLED WITH THE FACT THAT (I) THE ASSES SEE HAS NOT BEEN ABLE TO PRODUCE THESE LENDERS FOR VERIFICATION AND REASONABLY EXPLAIN THE COMPLETE CIRCUMSTANCES IN WHICH THESE L ENDERS, WHO WERE NOT EVEN ROUTINELY ENGAGED IN THE BUSINESS OF GIVING LOANS AND ADVANCES, GAVE HIM UNSECURED LOANS ON 12% P.A I NTEREST- WHICH ESSENTIALLY IS POSSIBLE IN SITUATIONS OF CLOS E RELATIONSHIPS AND TRUST; AND (II) THE ASSESSEE HAS MAINTAINED STO IC SILENCE ON BEING TOLD ABOUT THESE LENDERS BEING ALLEGED TO BE SHELL ENTITIES, I AM NOT INCLINED TO BELIEVE THAT THESE ARE GENUINE B USINESS TRANSACTIONS. AS I DO SO, I AM REMINDED OF HON'BLE SUPREME COURT'S OBSERVATION, IN THE CASE OF CIT VS DURGA PR ASAD MORE [(1971) 82 ITR 540 (SC)], TO THE EFFECT THAT 'SCIEN CE HAS NOT YET INVENTED ANY INSTRUMENT TO TEST THE RELIABILITY OF THE EVIDENCE PLACED BEFORE A COURT OR TRIBUNAL. THEREFORE, THE C OURTS AND TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEFORE THEM BY APPLYING THE TEST OF HUMAN PROBABILITIES'. SIMILARLY, IN A LATER DECISION IN THE CASE OF SUMATI DAYAL VS CIT [(1995) 214 ITR 801 (SC )], HON'BLE SUPREME COURT REJECTED THE THEORY THAT IT IS FOR AL LEGER TO PROVE THAT THE APPARENT AND NOT REAL, AND OBSERVED THAT, 'THIS, IN OUR OPINION, IS A SUPERFICIAL APPROACH TO THE PROBLEM. THE MATTER HAS TO BE CONSIDERED IN THE LIGHT OF HUMAN PROBABILITIE S. ...........SIMILARLY THE OBSERVATION......... THAT IF IT IS ALLEGED THAT THESE TICKETS WERE OBTAINED THROUGH FRAUDULENT MEANS, IT IS UPON THE ALLEGER TO PROVE THAT IT IS SO, IGNORES THE REALITY . THE TRANSACTION ABOUT PURCHASE OF WINNING TICKET TAKES PLACE IN SEC RET AND DIRECT EVIDENCE ABOUT SUCH PURCHASE WOULD BE RARELY AVAILABLE..............IN OUR OPINION, THE MAJORITY OPINION AFTER CONSIDERING SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES HAS RIGHTLY CONCLUDED THAT THE APPELLANT'S CLAIM ABOUT THE AMOUNT BEING HER WINNING FROM RACES IS NOT GENUINE. IT CANNOT BE SAID THAT THE EXPLANATION OFF ERED BY THE APPELLANT IN RESPECT OF THE SAID AMOUNTS HAS BEEN R EJECTED ITA NO.2304 AND 2305/AHD/2017 14 UNREASONABLY'. I WILL BE SUPERFICIAL IN MY APPROACH IN CASE I DONOT EXAMINE THE CLAIM OF THE ASSESSEE ON THE BASIS OF D OCUMENTS AND AFFIDAVITS FILED BY THE ASSESSEE AND OVERLOOK CLEAR THE UNUSUAL PATTERN IN THE DOCUMENTS FILED BY THE ASSESSEE AND PRETEND TO BE OBLIVIOUS OF THE GROUND REALITIES. AS HON'BLE SUPRE ME COURT HAS OBSERVED, IN THE CASE OF DURGA PRASAD MORE (SUPRA), '.....IT IS TRUE THAT AN APPARENT MUST BE CONSIDERED REAL UNTIL IT I S SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS N OT THE REAL PARTY WHO RELIES ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF THOSE RECITALS, OTHERWISE IT WILL BE VERY EASY TO MAKE SE LF-SERVING STATEMENTS IN DOCUMENTS EITHER EXECUTED OR TAKEN BY A PARTY AND RELY ON THOSE RECITALS. IF ALL THAT AN ASSESSEE WHO WANTS TO EVADE TAX IS TO HAVE SOME RECITALS MADE IN A DOCUMENT EIT HER EXECUTED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEFT WIDE OPEN TO EVADE TAX. A LITTLE PROBING WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. TH E TAXING AUTHORITIES WERE NOT REQUIRED TO PUT ON BLINKERS WH ILE LOOKING AT THE DOCUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALI TY OF THE RECITALS MADE IN THOSE DOCUMENTS'. AS A FINAL FACT FINDING A UTHORITY, THIS TRIBUNAL CANNOT BE SUPERFICIAL IN ITS ASSESSMENT OF GENUINENESS OF A TRANSACTION, AND THIS CALL IS TO BE TAKEN NOT ONL Y IN THE LIGHT OF THE FACE VALUE OF THE DOCUMENTS SIGHTED BEFORE THE TRIB UNAL BUT ALSO IN THE LIGHT OF ALL THE SURROUNDING CIRCUMSTANCES, PREPONDERANCE OF HUMAN PROBABILITIES AND GROUND REALTIES. GENUINENES S IS A MATTER OF PERCEPTION BUT ESSENTIALLY A CALL ON GENUINENESS OF A TRANSACTION IS TO BE TAKEN IN THE LIGHT OF WELL SET TLED LEGAL PRINCIPLES. THERE MAY BE DIFFERENCE IN SUBJECTIVE P ERCEPTION ON SUCH ISSUES, ON THE SAME SET OF FACTS, BUT THAT CAN NOT BE A REASON ENOUGH FOR THE FACT FINDING AUTHORITIES TO AVOID TA KING SUBJECTIVE CALLS ON THESE ASPECTS, AND REMAIN CONFINED TO THE FINDINGS ON THE BASIS OF IRREFUTABLE EVIDENCES. HON'BLE SUPREME COU RT HAS, IN THE CASE OF DURGA PRASAD MORE (SUPRA), OBSERVED THAT 'H UMAN MINDS MAY DIFFER AS TO THE RELIABILITY OF A PIECE OF EVID ENCE BUT IN THAT SPHERE THE DECISION OF THE FINAL FACT FINDING AUTHO RITY IS MADE CONCLUSIVE BY LAW'. THIS FAITH IN THE TRIBUNAL BY H ON'BLE COURTS ABOVE MAKES THE JOB OF THE TRIBUNAL EVEN MORE ONERO US AND DEMANDING AND, IN MY CONSIDERED VIEW, IT DOES REQUI RE THE TRIBUNAL TO TAKE A HOLISTIC VIEW OF THE MATTER, IN THE LIGHT OF SURROUNDING CIRCUMSTANCES, PREPONDERANCE OF PROBABI LITIES AND GROUND REALITIES, RATHER THAN BEING SWAYED BY THE N OT SO CONVINCING, BUT APPARENTLY IN ORDER, DOCUMENTS AND EXAMINING THEM, IN A PEDANTIC MANNER, WITH THE BLINKERS ON. I MAY ALSO ADD THAT THE PHENOMENON OF SHELL ENTITIES BEING SUBJECT ED TO DEEP SCRUTINY BY TAX AND ENFORCEMENT OFFICIALS IS RATHER RECENT, AND THAT, TILL RECENTLY, LITTLE WAS KNOWN, OUTSIDE THE UNDERB ELLY OF FINANCIAL WORLD, ABOUT MODUS OPERENDI OF SHELL ENTITIES. THER E WERE, THEREFORE, NOT MANY QUESTIONS RAISED ABOUT GENUINEN ESS OF ITA NO.2304 AND 2305/AHD/2017 15 TRANSACTIONS IN RESPECT OF SHELL ENTITIES. THAT IS NOT THE CASE ANY LONGER. JUST BECAUSE THESE ISSUES WERE NOT RAISED I N THE PAST DOES NOT MEAN THAT THESE ISSUES CANNOT BE RAISED NO W AS WELL, AND, TO THAT EXTENT, THE EARLIER JUDICIAL PRECEDENT S CANNOT HAVE BLANKET APPLICATION IN THE CURRENT SITUATION AS WEL L. AS HON'BLE SUPREME COURT HAS OBSERVED IN THE CASE IN MUMBAI KAMGAR SABHA V. ABDULBAHI FAIZULLABHAI AIR 1976 SC 1455 'IT IS TRITE, GOING BY ANGLOPHONIC PRINCIPLES THAT A RULING OF A SUPERIOR COURT IS BINDING LAW. IT IS NOT OF SCRIPTURAL SANCTITY BUT O F RATIO-WISE LUMINOSITY WITHIN THE EDIFICE OF FACTS WHERE THE JU DICIAL LAMP PLAYS THE LEGAL FLAME. BEYOND THOSE WALLS AND DE HORS THE MILIEU WE CANNOT IMPART ETERNAL VERNAL VALUE TO THE DECISIONS , EXALTING THE PRECEDENTS INTO A PRISON HOUSE OF BIGOTRY, REGARDLE SS OF THE VARYING CIRCUMSTANCES AND MYRIAD DEVELOPMENTS. REAL ISM DICTATES THAT A JUDGMENT HAS TO BE READ, SUBJECT TO THE FACTS DIRECTLY PRESENTED FOR CONSIDERATION AND NOT AFFECT ING THE MATTERS WHICH MAY LURK IN THE DARK'. GENUINENESS OF TRANSACTIONS THUS CANNOT BE DECIDED ON THE BASIS OF INFERENCES DRAWN FROM THE JUDICIAL PRECEDENTS IN THE CASES IN WHICH GENUINENESS DID COME UP FOR EXAMINATION IN A VERY LIMITED PERSPECTIVE AND IN THE TIMES WHEN SHELL ENTITIES WE RE VIRTUALLY NON- EXISTENT. AS THE THINGS STAND NOW, GENUINENESS OF T RANSACTIONS IS TO BE EXAMINED IN THE LIGHT OF THE PREVAILING GROUN D REALITIES, AND THAT IS PRECISELY WHAT I HAVE DONE. IN MY CONSIDERE D VIEW, AND FOR THE DETAILED ANALYSIS SET OUT EARLIER IN THIS ORDER , THE ALLEGED LOAN TRANSACTIONS OF THE ASSESSEE CANNOT BE HELD TO BE G ENUINE ON THE PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE. AS T HE GENUINENESS OF TRANSACTIONS STANDS REJECTED, IT IS NOT REALLY N ECESSARY TO DEAL WITH OTHER ASPECTS OF THE MATTER. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, I UPHOLD THE ACTION OF THE AU THORITIES BELOW IN BRINGING THE IMPUGNED ALLEGED LOAN TRANSACTIONS OF RS 20 LAKHS TO TAX, AND, AS A COROLLARY THERETO, IN DECLINING DEDU CTION IN RESPECT OF INTEREST OF RS 3,66,041 ON THESE ALLEGED BORROWINGS . 11. IN THE RESULT, THE APPEAL IS DISMISSED. ON GOING THROUGH THE ABOVE MENTIONED CASE, THE CASE OF THE APPELLANT IS SQUARELY COVERED BY THE ORDER OF THE H ON'BLE ITAT, 'SMC' BENCH, AHMEDABAD, AS THE METHOD ADOPTED BY THE PROMOTER, SHRI RAJENDRA JAIN INCLUDING KRIYA IM PEX PVT. LTD., IS IDENTICAL TO THE METHOD ADOPTED BY THE PER SONS INVOLVED IN THE CASE LAW MENTIONED ABOVE. IN BOTH T HE CASES, THE PROMOTER OF SHELL COMPANIES ADMITTED ON OATH DU RING THE COURSE OF SEARCH THAT THEY ARE INDULGING IN PROVIDI NG ITA NO.2304 AND 2305/AHD/2017 16 ACCOMMODATION ENTRIES OF LOAN/SALES AND NO REAL TRA NSACTION TOOK PLACE. THE ENTRY PROVIDER MERELY CHARGED COMMI SSION AND THE PAYMENT RECEIVED/MADE BY ACCOUNT PAYEE CHEQ UES IS NOTHING BUT TO GIVE COLOUR OF GENUINENESS TO THE BOGUS TRANSACTION. THEREFORE, ADDITIONS MADE BY THE A.O. ARE CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 6. BEFORE ME, THE LD.COUNSEL FOR THE ASSESSEE SUBMIT TED THAT SIMILAR PURCHASES WERE MADE BY THE ASSESSEE IN THE ASSTT.YEAR 2008-09 AND 2012-13. ON THE BASIS OF IDENTICAL EVI DENCES, ADDITIONS WERE DELETED BY THE LD.CIT(A). SINCE THE RELIEF GIVEN BY THE CIT(A) WAS BELOW MONETARY LIMIT FOR FILING SUCH APPEAL BEFORE THE ITAT, THEREFORE, THOSE ORDERS ATTAINED FINALITY . HE SUBMITTED THAT ON THE BASIS OF THOSE ORDER ADDITIONS IN THESE TWO YEARS BE ALSO DELETED. 7. IN NEXT FOLD OF SUBMISSIONS, HE SUBMITTED THAT T HE ASSESSEE HAS FILED COPY OF INCOME-TAX RETURN OF KRIYA IMPEX PVT. LTD. AND KALASH ENTERPRISES; STOCK REGISTER OF THE ASSESSEE, BANK STATEMENT HIGHLIGHTING RELEVANT TRANSACTIONS/PAYMENT AND COPI ES OF PURCHASE BILLS. HE CONTENDED THAT THE ASSESSEE HAS PRODUCED ALL THE RELEVANT EVIDENCES, AND THEREFORE ADDITION OUGHT TO BE DELETED. IN SUPPORT OF HIS CONTENTIONS, HE RELIED UPON THE ORDE R OF THE ITAT IN THE CASE OF SHAILESH KESHAVLAL SHAH VS. ITO, ITA NO .1877 TO 1879/AHD/2015. COPY OF THIS ORDER HAS BEEN PLACED ON RECORD. HE ALSO RELIED UPON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PR.CIT VS. TEJUA ROHITKUMAR KAPADIA REN DERED IN TAX APPEAL NO.691 OF 2017. HE FURTHER CONTENDED THAT I N THE CASE OF TEJUA ROHITKUMAR KAPADIA(SUPRA), SLP OF THE DEPARTM ENT HAS ALSO BEEN DISMISSED BY THE HONBLE SUPREME COURT. ITA NO.2304 AND 2305/AHD/2017 17 8. ON THE OTHER HAND, THE LD.DR RELIED UPON ORDERS OF THE REVENUE AUTHORITIES. HE CONTENDED THAT ORDER OF TH E ITAT RELIED UPON BY THE CIT(A) HAS ALSO BEEN UPHELD BY THE HON BLE GUJARAT HIGH COURT AS WELL AS HONBLE SUPREME COURT. 9. THE LD.COUNSEL FOR THE ASSESSEE ALSO CONTENDED T HAT HE WAS NOT ALLOWED TO CROSS-EXAMINE SHRI RAJENDRA JAIN, AN D THEREFORE, HIS STATEMENT CANNOT BE RELIED UPON BY THE AO. 10. I HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE ASSESSMENT ORDER WOULD INDICATE THAT THE AO HAS NOT BASICALLY RELIED UPON THE STATEMENT OF SHRI RAJENDRA JAIN OR ANY OTHER PERSONS FOR DOUBTIN G THE TRANSACTION OF THE ASSESSEE. HE ONLY CONFRONTED TH E ASSESSEE THAT THE DEPARTMENT WAS ABLE TO LAY ITS HAND ON THE INFO RMATION THAT THESE CONCERNS WERE INDULGING IN PROVIDING ACCOMMOD ATION ENTRIES. THEY WERE NOT HAVING ACTUAL BUSINESS. TH IS IS ONE OF THE FACETS OF TRANSACTIONS. PURCHASES WERE MADE BY THE ASSESSEE, AND THE AO DIRECTED HIM TO PROVE GENUINENESS OF THE PUR CHASES BY PRODUCING RELEVANT EVIDENCE. HAD THE ASSESSEE PROD UCED REPRESENTATIVE OF KRIYA IMPEX PVT. LTD., AND KALAS H ENTERPRISE, THEN PROBABLY HE COULD HAVE PROVED HIS PURCHASES. HE WAS NOT IN A POSITION TO BRING ANYBODY FROM THAT SOURCE. WHEN THE AO ASKED THE ASSESSEE ABOUT THE INTERNAL COMMUNICATION, AND HOW HE HAS PLACED ORDERS ON THESE CONCERNS, THEN, THE ASSESSEE FAILED TO GIVE ANY COMMUNICATION, I.E. FORWARDING LETTER WITH CHEQ UE FOR MAKING PAYMENT OR EMAIL OR ANY RECEIPT FROM THAT CONCERN S HOWING CHEQUE WAS RECEIVED ETC. THE ASSESSEE FAILED TO PR ODUCE ANY EVIDENCE DEMONSTRATING THE DELIVERY OF GOODS AT THE PREMISES OF THE ASSESSEE OR DISPATCHED FROM THE PREMISES OF THE SELLER. ITAT ITA NO.2304 AND 2305/AHD/2017 18 IN THE CASE OF PAVANKUMAR M. SANGHVI VS. ITO, (SUPR A) RELIED UPON BY THE LD.CIT(A) HAS ELABORATELY DISCUSSED MODUS OPERANDI OF SHELL COMPANIES AND HOW THEY FUNCTION. THE TRIB UNAL HAS CONSIDERED THEIR ACTIVITIES, AND HOW THEY DEMONSTRA TE GENUINENESS OF THE TRANSACTION WHICH ACTUALLY NOT TAKEN PLACE. AT THE COST OF REPETITION, I WOULD LIKE TO TAKE NOTE OF PARA-8 OF THAT ORDER WHICH HAS HIGHLIGHTED THIS ASPECT: 8. AS I PROCEED TO DEAL WITH GENUINENESS ASPECT, I T IS IMPORTANT TO BEAR IN MIND THE FACT THAT WHAT IS GEN UINE AND WHAT IS NOT GENUINE IS A MATTER OF PERCEPTION BASED ON FACTS OF THE CASE VIS--VIS THE GROUND REALITIES. THE FAC TS OF THE CASE CANNOT BE CONSIDERED IN ISOLATION WITH THE GRO UND REALTIES. IT WILL, THEREFORE, BE USEFUL TO UNDERSTA ND AS TO HOW THE SHELL ENTITIES, WHICH THE LOAN CREDITORS ARE AL LEGED TO BE, TYPICALLY FUNCTION, AND THEN COMPARE THESE CHARACTE RISTICS WITH THE FACTS OF THE CASE AND IN THE LIGHT OF WELL SETTLED LEGAL PRINCIPLES. A SHELL ENTITY IS GENERALLY AN ENTITY W ITHOUT ANY SIGNIFICANT TRADING, MANUFACTURING OR SERVICE ACTIV ITY, OR WITH HIGH VOLUME LOW MARGIN TRANSACTIONS- TO GIVE IT COL OUR OF A NORMAL BUSINESS ENTITY, USED AS A VEHICLE FOR VARIO US FINANCIAL MANOEUVRES. A SHELL ENTITY, BY ITSELF, IS NOT AN IL LEGAL ENTITY BUT IT IS THEIR ACT OF ABATEMENT OF, AND BEING PART OF, FINANCIAL MANOEUVRING TO LEGITIMISE ILLICIT MONIES AND EVADE TAXES, THAT TAKES IT ACTIONS BEYOND WHAT IS LEGALLY PERMIS SIBLE. THESE ENTITIES HAVE EVERY SEMBLANCE OF A GENUINE BU SINESS- ITS LEGAL OWNERSHIP BY PERSONS IN EXISTENCE, STATUT ORY DOCUMENTATION AS NECESSARY FOR A LEGITIMATE BUSINES S AND A DOCUMENTATION TRAIL AS A LEGITIMATE TRANSACTION WOU LD NORMALLY FOLLOW. THE ONLY THING WHICH SETS IT APART FROM A GENUINE BUSINESS ENTITY IS LACK OF GENUINENESS IN I TS ACTUAL OPERATIONS. THE OPERATIONS CARRIED OUT BY THESE ENT ITIES, ARE ONLY TO FACILITATE FINANCIAL MANOEUVRING FOR THE BE NEFIT OF ITS CLIENTS, OR, WITH THAT PREDOMINANT UNDERLYING OBJEC TIVE, TO GIVE THE COLOUR OF GENUINENESS TO THESE ENTITIES. T HESE SHELL ENTITIES, WHICH ARE ROUTINELY USED TO LAUNDER UNACC OUNTED MONIES, ARE A FACT OF LIFE, AND AS MUCH A PART OF T HE UNDERBELLY OF THE FINANCIAL WORLD, AS MANY OTHER EV ILS. EVEN A LAYMAN, MUCH LESS A MEMBER OF THIS SPECIALIZED TRIB UNAL, CANNOT BE OBLIVIOUS OF THESE GROUND REALITIES. ITA NO.2304 AND 2305/AHD/2017 19 11. I HAVE EXAMINED THE EVIDENCE SUBMITTED BY THE A SSESSEE IN THE LIGHT OF THE ABOVE DISCUSSION, AND FIND THAT ON LY EVIDENCE POSSESSED BY THE ASSESSEE IS THAT PAYMENT TO THE AL LEGED SELLER WAS MADE THROUGH BANKING CHANNEL. PAYMENT THROUGH BANKING CHANNEL CANNOT BE SACROSANCT IN ALL CONDITIONS. IT HAS ITS OWN LIMITATION TO PROVE GENUINENESS OF THE TRANSACTION. IT IS ONE OF THE BASIC CONDITIONS FOR MAKING ACCOMMODATION ENTRIES T HAT PAYMENT SHOULD BE MADE THROUGH BANKING CHANNEL. THAT DOES NOT MEAN THAT TRANSACTION HAS ACTUALLY BEEN TAKEN PLACE. AS DISCUSSED ABOVE, HAD THE ASSESSEE ABLE TO PRODUCE ANY CORROBO RATIVE EVIDENCE IN THE SHAPE OF ANY AGREEMENT OR CORRESPON DENCE, ANY EVIDENCE SHOWING DELIVERY OF GOODS OR DISPATCH OF G OODS, PROBABLY TO SOME EXTENT, HE COULD ABLE TO DEMONSTRATE THE PU RCHASES MADE FROM THESE CONCERNS. THE ASSESSEE HAS ONLY PRODUCE D CERTAIN SELF-SERVING EVIDENCES IN A STRAIGHT-JACKET FORMULA NORMALLY COLLECTED IN THIS TYPE OF TRANSACTION. IF THESE EV IDENCES ARE TESTED IN THE BACKGROUND, HOW THE SHELL ENTITIES USED TO F UNCTION, DISCUSSED BY THE ITAT, IN THE CASE OF PAVANKUMAR SA NGHVI (SUPRA), THEN IT WOULD REVEAL THAT IT IS NOT SUFFIC IENT EVIDENCE TO ARRIVE AT A CONCLUSION THAT THE ASSESSEE HAS MADE P URCHASES FROM THESE CONCERNS. 12. AS FAR AS CASE LAW RELIED UPON BY THE LD.COUNSE L FOR THE ASSESSEE ARE CONCERNED, THE ONLY SIMILARITY IS THAT ALLEGATIONS AGAINST THOSE ASSESSEES WERE ALSO FOR MAKING BOGUS PURCHASES, BUT WHEN SUCH ALLEGATION WAS TESTED ON THE QUALITY OF EVIDENCE, THE TRIBUNAL DID NOT CONCUR WITH THE AO AND DELETED THE ADDITION. THERE IS NO RATIO LAID DOWN IN BOTH THE DECISIONS T HAT, WHERE THE AO IS ABLE TO LAY HIS HAND ON THE EVIDENCE, SHOWING BOGUS PURCHASES CLAIMED BY THE ASSESSEE OR WHERE THE ASSE SSEE FAILED TO ITA NO.2304 AND 2305/AHD/2017 20 DEMONSTRATE GENUINENESS OF HIS PURCHASES THEN ALSO ADDITIONS WILL BE DELETED. TO MY MIND, THE ASSESSEE CANNOT GET AN Y BENEFIT FROM BOTH THESE DECISIONS. 13. AS FAR AS ADDITIONS DELETED BY THE LD.CIT(A) IN OTHER TWO YEARS ARE CONCERNED, THE APPEALS COULD NOT BE FILED BEFORE THE TRIBUNAL, BECAUSE TAX EFFECT IN THESE APPEALS WAS L ESS THAN THE MONETARY LIMIT PROVIDED IN THE INSTRUCTIONS BY THE CBDT, WHICH AUTHORIZED ITS AUTHORITIES NOT TO CHALLENGE THOSE O RDERS BEFORE THE TRIBUNAL. IT IS ALSO IMPORTANT TO NOTE THAT THERE IS NO NEGATIVE EQUITY IN LAW I.E. IF A PERSON IS BEING ACQUITTED F ROM A GUILTY, THAT DOES NOT MEAN HE WILL BE ACQUITTED FROM ALL ACTIONS . CONSIDERING WELL REASONED ORDERS OF THE LD.CIT(A), I DO NOT FIN D ANY MERIT IN BOTH THE APPEALS. THEY ARE DISMISSED. 14. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 8 TH MARCH, 2019. SD/- (RAJPAL YADAV) JUDICIAL MEMBER