ITO, New Delhi V. M/s. Kuldeep Textiles (P) Ltd., New Delhi

ITA 2449/DEL/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8505 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 27-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Income from undisclosed sources; Peak credit; Source of fund; Corroborative evidences; Accommodation entries; Assessment record; Onus to prove; Set aside
• Section: 271(1)(c); 142(1); 133A; 143(1); 143(2); 139(1); 271B; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO.2449/DEL/2015 ASSESSMENT YEAR: 2003-04 ITO, WARD-14(4), NEW DELHI VS. M/S. KULDEEP TEXTILES (P.) LTD., G-10/106, SECTOR-15, ROHINI, NEW DELHI PAN :AABCK1801D (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGA INST THE ORDER DATED 12/02/2015 PASSED BY THE LD. COMMISSION ER OF INCOME-TAX (APPEALS)-5, NEW DELHI [IN SHORT THE LD . CIT(A)] FOR ASSESSMENT YEAR 2003-04, RAISING FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .23,02,268/- MADE BY AO AS UNEXPLAINED ADVANCE TO M/S. AAKRITI I NTERNATIONAL INC. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .15,00,000/- MADE BY THE AO AS UNEXPLAINED INVESTMENT IN SHARES. APPELLANT BY MS. RAKHI VIMAL, SR. DR RESPONDENT BY NONE DATE OF HEARING 13.01.2020 DATE OF PRONOUNCEMENT 21.01.2020 2 ITA NO.2449/DEL/2015 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE TOTAL ADDIT ION OF RS.4,23,52,500/- MADE BY THE AO U/S 68 OF THE ACT T O @ 1% OF RS.4,23,52,500/-. 4. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AN D IS NOT TENABLE OF FACTS AND IN LAW. 5. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND OR FOREGO ANY GROUND(S) OF APPEAL RAISED ABOVE AT THE TIME OF HEA RING . 2. AT THE OUTSET, WE MAY LIKE TO MENTION THAT NOTICES THROUGH REGISTERED POST FOR HEARING OF THE APPEAL WERE ISSU ED TO THE ASSESSEE ON 28/02/2018; 08/05/2018; 08/08/2018; 14/11/2018; 26/03/2019; 07/05/2019; 09/07/2019; 21/10/2019 AND 20/11/2019. THE NOTICE WAS ALSO SERV ED BY AFFIXTURE THROUGH THE INSPECTOR OF THE DEPARTMENT O N 29/11/2019. DESPITE NOTIFYING THE DATE OF HEARING S EVERAL TIMES, NEITHER ANYONE APPEARED ON BEHALF OF THE ASSESSEE N OR ANY REQUEST FOR ADJOURNMENT WAS FILED. IN THE FACTS AND CIRCUMSTANCES, WE WERE OF THE OPINION THAT THE ASSE SSEE WAS NOT INTERESTED IN PROSECUTING THE APPEAL, AND ACCORDING LY WE HEARD THE APPEAL EX-PARTE QUA THE ASSESSEE, AFTER HEARING ARGUMENTS OF THE DEPARTMENTAL REPRESENTATIVE. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME ON 27 TH FEBRUARY, 2004, DECLARING TOTAL INCOME OF RS. 9,890/-. THE RETURN WAS FOUND TO BE FILED AFTER THE DUE DATE OF FILING OF THE RETURN OF INCOME AS PROVIDED UNDER SECTION 139(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). T HE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 28/03/ 2004. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM ANOTHER INCOME TAX OFFICER, THE CASE OF THE ASSESSEE WAS RE OPENED BY WAY 3 ITA NO.2449/DEL/2015 OF ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT ON 01/04/2005, WHICH WAS SERVED AT THE LAST KNOWN ADDRESS BY WAY O F REGISTERED POST. THE ASSESSEE DID NOT RESPOND TO THE NOTICE. T HE SUBSEQUENT NOTICES WERE ISSUED UNDER SECTION 143(2) AND 142(1) OF THE ACT WERE ALSO REMAINED NON-COMPLIED. THE ASSESSING OFFI CER IN THE ASSESSMENT ORDER HAS GIVEN DETAILS OF THE NOTICES S ENT ALONG WITH THE REMARK OF NON-COMPLIANCE. IN VIEW OF NON-COMPLI ANCE, THE ASSESSING OFFICER MADE ADDITION FOR UNEXPLAINED CAS H DEPOSITED IN BANK, UNEXPLAINED ADVANCES TO AKARITI INTERNATIO NAL INC. AND UNEXPLAINED INVESTMENT IN SHARES AND ASSESSED THE T OTAL INCOME AT RS.4,61,64,660/-, OBSERVING AS UNDER: FROM THE ABOVE FACTS OF THE CASE, IT IS NOTED THAT THE ASSESSEE IS AVOIDING COMPLIANCE OF STATUTORY NOTICES, THEREFORE PENALTY PROCEEDINGS U/S 271(1)(B) ARE SEPARATELY INITIATED IN THIS CASE. IN THIS CASE, INFORMATION REGARDING LOAN ADVANCED B Y THE ASSESSEE WAS RECEIVED FROM ADD!. CIT, RANGE-20, NEW DELHI. IN TH E LETTER OF THE ADDL. CIT, RANGE-20, NEW DELHI, IT IS MENTIONED THAT ON 6 .1.2004 A SURVEY OPERATION U/S 133A WAS CONDUCTED IN THE CASE OF M/S AAKRITI INTERNATIONAL INC, 4/5, DOUBLE STORY, VIJAY NAGAR, DELHI AND DURI NG THE COURSE OF SURVEY OPERATION IT WAS FOUND THAT DURING THE FY 2002-03 M /S KULDEEP TEXTILES (P) LTD. HAS ADVANCED A LOAN OF RS. 2302268/- TO M/ S AAKRITI INTERNATIONAL INC. FROM THE VERIFICATION OF THE ASSESSMENT RECORD OF THE ASSESSEE, IT IS FOUND THAT NO SUCH ADVANCE GIVEN BY THE ASSESSEE TO M/S AAKRITI INTERNATIONAL INC IS SHOWN IN THE BALANCE SHEET OF THE ASSESSEE. AS PER BALANCE SHEET, THE TOTAL AMOUNT OF LOAN AND ADVANCE S AS ON 31.3.2003 IS SHOWN OF RS.3550000/- ONLY NO FURTHER DETAIL OF THE PERSONS TO WHOM THIS LOAN WAS ADVANCED IS GIVEN BY THE ASSESSEE. IN ABSE NCE OF ANY SUPPORTING EVIDENCE, IT IS CONCLUDED THAT THE ABOVE AMOUNT OF ADVANCE OF RS 2302268/- IS NOT INCLUDED IN THE TOTAL AMOUNT OF RS .3550000/- DECLARED IN THE BALANCE SHEET. IN ABSENCE OF ANY AUTHENTIC EVID ENCE, IT IS CONSIDERED THAT THIS AMOUNT OF RS.2302268/- WAS GIVEN BY THE A SSESSEE TO M/S AAKRITI INTERNATIONAL INC OUT OF ITS UNDISCLOSED SO URCE OF INCOME. THEREFORE, THIS AMOUNT OF RS. 2302268/- IS ADDED BACK IN THE T AXABLE INCOME OF THE ASSESSEE UNDER THE HEAD ASSESSEES INCOME EARNED FO RM UNDISCLOSED SOURCES OF INCOME. FROM THE ABOVE FACTS OF THE CASE, IT HAS BEEN ESTAB LISHED THAT THE ASSESSEE HAS CONCEALED THE ACCURATE PARTICULARS OF ITS TAXAB LE INCOME, THEREFORE PENALTY PROCEEDINGS U/S 271(1) (C) ARE SEPARATELY I NITIATED IN THIS CASE. IN THIS CASE, AN INFORMATION WAS ALSO RECEIVED FROM THE INVESTIGATION UNIT- 5, NEW DELHI. THE INVESTIGATION WING FORWARDED A LI ST OF PERSONS INVOLVED 4 ITA NO.2449/DEL/2015 IN THE ACTIVITIES OF ACCOMMODATION ENTRIES TO DIFFE RENT CHARGES TO TAKE PROPER ACTION AGAINST THE PERSONS WHO PROVIDED ACCO MMODATION ENTRIES AND ALSO AGAINST THE PERSON WHO RECEIVED THESE ACCO MMODATION ENTRIES. THE NAME OF THE ASSESSEE IS ALSO INCLUDED IN THE LI ST OF ENTRY PROVIDERS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE BASIS OF INFORMATION AVAILABLE ON RECORD, COPIES OF BANK A/S STATEMENT O F THE ASSESSEE WERE COLLECTED FROM STATE BANK OF BIKANER & JAIPUR, NEW ROHTAK ROAD, NEW DELHI A/C NO. 24624 AND STATE BANK OF PATIALA, DARY A GANJ, NEW DELHI A/C NO. 50108. IN ACCOUNT NO. 50108 HELD WITH STATE BAN K OF PATIALA, DARYA GANJ, NEW DELHI A HUGE CASH AMOUNT WAS DEPOSITED BY THE ASSESSEE REGULARLY AND THEREAFTER CHEQUES WERE ISSUED FROM T HIS ACCOUNT. THE TOTAL OF CASH AMOUNT DEPOSITED IN THE ABOVE ACCOUNT COMES AT RS.27493000/-. SIMILARLY, A CASH AMOUNTING TO RS. 14859500/- WAS A LSO DEPOSITED IN ACCOUNT NO. 24624 HELD WITH STATE BANK OF BIKANER A ND JAIPUR, NEW ROHTAK ROAD, NEW DELHI. THUS, THE TOTAL OF ABOVE CA SH AMOUNT DEPOSITED IN BOTH THE ACCOUNTS COMES AT RS.42352500/-. IN THI S CASE, NO ONE HAS ATTENDED TO THE ASSESSMENT PROCEEDINGS EXPLAIN THE SOURCE OF ABOVE CASH AMOUNT CREDITED IN THESE BANK ACCOUNTS, THEREFORE I N ABSENCE OF ANY SUPPORTING EVIDENCE, IT IS CONSIDERED THAT THE CASH DEPOSITED IN THESE ACCOUNTS BELONGS TO THE ASSESSEE AND IT IS THE INCO ME OF THE ASSESSEE EARNED DURING THE YEAR FROM ITS UNDISCLOSED SOURCES OF INCOME WHICH IS NOT DECLARED IN ITS RETURN OF INCOME THEREFORE THIS AMO UNT OF RS. 42352500/- IS ADDED BACK IN THE TAXABLE INCOME OF THE ASSESSEE U/ S 68 OF THE IT ACT, 1961. THUS, AN ADDITION OF RS. 42352500/- IS MADE IN THE TAXABLE INCOME OF THE ASSESSEE. IN ADDITION TO THE ABOVE, AN INFORMATION WAS ALSO R ECEIVED FROM THE DCIT, CIRCLE 15(1), NEW DELHI THAT DURING THE COURSE OF A SSESSMENT PROCEEDINGS OF M/S RIM.ZIM VALLEY PRODUCTS (P) LTD. (AY 2003-04 ) IT WAS FOUND THAT M/S KULDEEP TEXTILES (P) LTD. HAS MADE AN INVESTMEN T OF RS. 1500000/- IN THE SHARE APPLICATION MONEY OF THE ABOVE NAMED COMP ANY. IT REVEALS FROM THE BALANCE SHEET OF THE ASSESSEE THAT THE ASSESSEE HAS SHOWN TOTAL INVESTMENT IN SHARES OF RS.3000000/- ONLY. NO FURTH ER DETAILS OF THE COMPANIES IN WHICH INVESTMENT WAS MADE BY THE ASSES SEE IS PLACED ON THE RECORD. IN ABSENCE OF ANY SUPPORTING EVIDENCE, IT IS CONSIDERED THAT THE ASSESSEE HAS MADE AN INVESTMENT OF RS. 1500000/- OU T OF THE BOOKS OF ACCOUNTS IN THE SHARE APPLICATION MONEY OF M/S RIMZ IM VALLEY PRODUCTS (P) LTD. DURING THE FY 2002-03 RELEVANT TO THE ASSESSME NT YEAR UNDER REFERENCE. THIS AMOUNT OF RS. 1500000/- IS ADDED BA CK IN THE TAXABLE INCOME OF THE ASSESSEE AS AN UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE COMPANY. FROM THE ABOVE FACTS OF THE CASE, IT HAS BEEN ESTAB LISHED THAT THE ASSESSEE HAS CONCEALED THE ACCURATE PARTICULARS OF ITS TAXAB LE INCOME, THEREFORE PENALTY PROCEEDINGS U/S 271(1)(C) ARE SEPARATELY IN ITIATED IN THIS CASE. IN THIS CASE ASSESSEE HAS NOT FILED ITS AUDIT REPOR T BEFORE THE SPECIFIED DATE IN PRESCRIBED FORM DULY SIGNED AND VERIFIED BY AN A UDITOR AS REQUIRED U/S 44AS OF THE IT ACT, THEREFORE PENALTY PROCEEDINGS U /S 271B ARE SEPARATELY INITIATED IN THIS CASE FOR THE ABOVE DEFAULT OF THE ASSESSEE COMPANY. 5 ITA NO.2449/DEL/2015 WITH THE ABOVE REMARKS, THE TOTAL INCOME OF THE ASS ESSEE IS COMPUTED AS UNDER: - INCOME FROM BUSINESS OR PROFESSION TAXABLE INCOME AS PER RETURN FILED AND PROCESSED U/ S 143(1) RS.9890/- ADDITION/DISALLOWANCES 1. UNEXPLAINED CASH DEPOSITED IN BANK ACCOUNTS U/S 68 (AS DISCUSSED ABOVE) 4,23,52,500/- 2. UNEXPLAINED ADVANCE TO AAKRITI INTERNATIONAL INC. (AS DISCUSSED ABOVE) 23,02,268/- 3. UNEXPLAINED INVESTMENT IN SHARES (AS DISCUSSED ABOVE) 15,00,000/- RS.4,61,64,658/- TOTAL TAXABLE INCOME RS.4,61,64,660/- 4. BEFORE THE LD. CIT(A), NO COMPLIANCE WAS MADE BY TH E ASSESSEE EXCEPT RELYING ON THE OTHER CASE OF M/S. T ARUN GOEL (ITA NO.4636 & 4637/DEL/2001 FOR ASSESSMENT YEAR 2003-04 AND 2004-05) WHEREIN THE TRIBUNAL RESTORED THE MATTER B ACK FOR DECIDING THE PEAK CREDIT FOR ADDITION. THE LD. CIT( A) HAS REPRODUCED THE DIRECTION OF THE TRIBUNAL IN SAID CA SE AND THEREAFTER, KEEPING IN VIEW THE STATEMENT OF SH. MA HESH GARG (THE PERSON WHO OPERATED THE ASSESSEE-COMPANY FOR PROVID ING ENTRIES) AND THE DIRECTOR, SH. ANIL SHARMA, HE ESTIMATED 1% OF THE TURNOVER AS COMMISSION INCOME. 5. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LD. CIT(A) HAS ESTIMATED 1% INCOME OF THE TRANSACTIONS , WITHOUT ANY EVIDENCE ON RECORD TO SUBSTANTIATE THAT ALL THE TRA NSACTIONS WERE CARRIED OUT BY THE ASSESSEE AGAINST COMMISSION INCO ME. SHE SUBMITTED THAT IN THE CASE OF TARUN GOYAL (SUPRA), THE TRIBUNAL LAID THE BURDEN OF PROOF TO DEMONSTRATE THE CHAIN O F TRANSACTION, THE LAYERING INDULGED BY HIM, AND TO PROVE EACH CRE DIT IN THE 6 ITA NO.2449/DEL/2015 BOOKS OF EACH ASSESSEE. ACCORDING TO HER, THE LD. C IT(A) IS NOT JUSTIFIED IN ESTIMATING INCOME FROM COMMISSION WITH OUT ANY DOCUMENTARY EVIDENCE ON RECORD. 6. WE HAVE HEARD SUBMISSION OF THE LD. DR AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE CASE OF THE ASSESS EE WAS REOPENED BY THE ASSESSING OFFICER ON THE BASIS OF I NFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE INCOME- TAX DEPARTMENT. DURING THE ASSESSMENT, MANY OPPORTUNITI ES WERE PROVIDED TO THE ASSESSEE, HOWEVER, THE ASSESSEE FAI LED TO EXPLAIN THE CREDIT ENTRIES IN ITS BOOKS OF ACCOUNTS (RS.4,2 3,52,500/-) IN ADDITION TO THE ADVANCES TO AKIRITI INTERNATIONAL ( RS.23,02,268) AND INVESTMENT IN SHARES (RS. 15,00,000/-). BEFORE THE LD. CIT(A) ALSO, THE ASSESSEE FAILED TO EXPLAIN THE DEPOSITS I N BANK EXCEPT RELYING ON THE DECISION IN THE CASE OF TARUN GOEL ( SUPRA). THE FINDING OF THE LD. CIT(A) IS REPRODUCED AS UNDER: THE A/R OF THE APPELLANT WANTED THAT HIS INCOME BE ASSESSED ON COMMISSION BASIS ONLY I.E. THE APPELLANT WAS RECEIV ING CASH AND GIVING CHEQUE AFTER GETTING HIS COMMISSION @ .5% AS ADMITTED BY SH. MAHESH GARG. THE ITAT ORDER IN ITA NO.4636/4637/DEL /2001-02 FOR ASSESSMENT YEAR 2003-04 AND 2004-05 IN THE CASE OF M/S. TARUN GOEL VS. ACIT REVIEWED BY ME. THE PARA 21,22,23 AND 24 OF THE ITAT ARE PRODUCED F OR READY REFERENCE. 21. THE CONTENTION THAT THE TOTALITY OF THE CIRCUM STANCES HAVE TO BE CONSIDERED BY ARRIVING AT THE ASSESSABLE INCO ME AND THAT WHEN THE FINDING IS THAT THE ASSESSEE HAS INDU LGED IN CIRCULAR AND MULTIPLE TRANSACTION, BY LAYERING, WHA T CAN BE TAXED IS THE PEAK CREDIT AND THAT TOO AT THE FIRST POINT IS ACCEPTABLE AND SHOULD BE THE MANNER OF DETERMINING THE CORRECT INCOME. IF EACH OF THE LAYER IS BROUGHT OUR TAX, THEN IT WOULD BE CASE OF LEVY OF INCOME TAX, MULTIPLE NO. O F TIMES, ON THE SAME AMOUNT. SUCH LEVY OF DOUBLE OR MULTIPLE TA XES IS AGAINST LAW AND IT WOULD BE THE RIGHT METHOD OF ARR IVING AT THE CORRECT AMOUNT OF INCOME. IF INCOME IS TAXED IN THE HANDS OF MR. TARUN GOYAL, THE TAXED AMOUNT, WHEN TRANSFERRED TO 7 ITA NO.2449/DEL/2015 ANOTHER COMPANY SHOULD BE TREATED AS EXPLAINED CRED IT. THE MULTIPLE TRANSFER OF THIS AMOUNT SHOULD ALSO BE TRE ATED AS EXPLAINED. BUT THE BURDEN OF PROOF LIES ON THE ASSE SSEE. 22. ADMITTEDLY CERTAIN ASSESSMENT OF SH. TARUN GOYA L, THE KIN PIN ARE AT VARIOUS STAGES AND HAVE NOT REACHED THE TRIBUNAL. UNDER THESE CIRCUMSTANCES, IT WOULD NOT BE POSSIBLE TO HAVE IN OVER ALL VIEW OF THE MATTER AND ELIMINATE CHAIN /MU LTIPLE TRANSACTION, FOR ARRIVING AT THE CORRECT ASSESSABLE AMOUNT. THUS WE HAVE NO OTHER ALTERNATIVE BUT TO SET ASIDE ALL THESE APPEALS TO THE FILE OF THE AO FOR FRESH ADJUDICATIO N IN ACCORDANCE WITH LAW. 23. THE AO SHALL AFTER EXAMINING THE EVIDENCE SUBMI TTED BY THE ASSESSEE, CONSIDER ALL THE CASES TOGETHER AND; A) RESTRICT THE ADDITION U/S 68 TO ONLY THE PEAK UNEXPLAINED CREDIT IN EACH CASE, AFTER ELIMINATION CIRCULAR TRANSACTION. B) TO ELIMINATE TAXATION OF THE SAME AMOUNT MULTIPLE TIMES, DUE TO THE CHAIN TRANSACTION WHICH RESULTED DUE TO LAYERING INDULGED BY THE ASSESSEE. C) CONSIDER THE MATERIAL ON RECORD AND THE PRECEDENCE AVAILABLE ON THE ISSUE AND DETERMINE THE PERCENTAGE OF COMMISSION, WHICH THE ASSESSEE WOULD HAVE EARNED AND BRING THE SAME TO TAX. 24. BEFORE PARTING WE MAKE IT CLEAR THAT THE BURDEN OF PROOF LAY ON THE ASSESSEE. IT IS FOR THE ASSESSEE TO DEMO NSTRATE THE CHAIN OF TRANSACTION, THE LAYERING INDULGED BY HIM, THE CALCULATION OF PEAK UNEXPLAINED CREDIT ETC. AND TO PROVE EACH CREDIT IN THE BOOKS OF EACH ASSESSEE. IN THE RESULT ALL THESE APPEAL ARE SET ASIDE TO THE FILE OF THE AO FOR EACH ADJUDICATION IN ACCORDANCE WITH LAW. THE ITAT HAD SET ASIDE THE ISSUE TO THE A.O. FOR FR ESH ADJUDICATION IN ACCORDANCE WITH THE LAW. SINCE THE APPELLANT IS DOR MANT COMPANY AND A/R IS NOT COMING FORWARD TO EXPLAIN HIS TRANSA CTION WITH BOOKS OF ACCOUNT I HAVE NO OTHER ALTERNATIVE BUT TO TAKE ONE PERCENTAGE! 1%) AS COMMISSION INCOME OF THE APPELLANT COMPANY A ND TAX IT ACCORDINGLY. THE A.O. IS DIRECTED TO GET THE BANK A CCOUNT OF THE APPELLANT FROM INVESTIGATION WING OR FROM THE BANKS AND SEND THE LIST OF CHEQUES GIVEN BY THE APPELLANT TO THE AOS O F DIFFERENT COMPANIES AND PASS ON THE INFORMATION TO THE A.O.S OF THESE COMPANIES FOR REOPENING THE CASES FOR REASSESSMENT U/S 148 OF INCOME TAX ACT IF ITS PERMITTED BY LAW. A STATEMENT DATED 20.10.2003 WAS TAKEN BY ADDL.DIT FROM SH. ANIL KUMAR SHARMA, S/O MOHINDER KUMAR SHARMA, R/O NEAR D HARAM 8 ITA NO.2449/DEL/2015 BHAWAN, OPPOSITE PARBAT SINGH HOUSE, BRIJ GHAT, GAZ IABAD (27 YEARS) ON OATH. THE DIRECTOR WAS MAINTAINING BANK A CCOUNT NO.3650 AT STATE BANK OF PATIALA, DARYAGANJ, WHICH WAS WITH ADDL. DIT(INV.) IN 2003. THE DIRECTOR WAS UNDER THE CONTROL OF SH. MAHESH GARG WHO WAS ANOTHER ENTRY OPERATOR, WHOSE STATEMENT IS ALSO BY A/R SH. MAHESH KAUSHIK, CA. MAHESH GARG WAS TAKING BLANK PA PER SIGNATURE FROM SH. ANIL SHARMA, DIRECTOR OF THIS AP PELLANT COMPANY. THE DIRECTOR OF THIS COMPANY SH. ANIL SHARMA HAD NE VER PURCHASED ANY SHARES NOR RECEIVED ANY GIFTS FROM ANY OTHER CO MPANY. THUS, IT IS CLEAR THAT SH. MAHESH GARG (ENTRY PROVIDER) WAS THAT DOING THIS PAPER BUSINESS OF RECEIVING CASH AND GIVING CHEQUES FROM PURCHASE OF SHARES, SHARED APPLICATION MONEY, LOAN, ADVANCE GIFT, TO CONVERT BLACK MONEY TO WHITE MONEY IN THE FORM OF BOGUS ENT RY PROVIDER. THE ADDL. DIT(INV.) UNIT-I, JHANDEWALAN, DELHI HAD TAKEN A STATEMENT ON 22.09.2003 FROM SH. MAHESH GUPTA, ABOU T HIS INVOLVEMENT AS ENTRY PROVIDER TO DIFFERENT ASSESSEE S IN AND AROUND DELHI. SH. MAHESH GARG HAD ADMITTED HIS INCOME FROM COMMISSION @ 0.5% AND AFTER GETTING SOME EXPENSES, HIS NET INCOM E WAS 0.4% OF THE AMOUNT OF CHEQUE/DD ISSUED. THUS, THE APPELLANT COMPANY DIRECTOR SH. ANIL KUMAR SHARMA ADMITS HE WAS HELPIN G SH. MAHESH GARG IN GIVING BOGUS CASH CREDITS/ENTRY PROVIDER AC TIVITIES. CONSIDERING THE OVERALL CIRCUMSTANCES, AND BUSINESS OF APPELLANT COMPANY. I ESTIMATE NET INCOME OF THE COMPANY @ 1% OF RS.4,23,52,500/- (WHICH INCLUDES SHARE APPLICATION MONEY OF RS.15,00,000/- AND LOANS AND ADVANCES OF RS.23,02,2 68/- = RS.4,23,525/- FOR THIS A.Y. 2003-04. 6.1 THOUGH, THE LD. CIT(A) HAS RELIED ON THE STATEMENT OF PERSONS BEFORE THE INVESTIGATION WING BUT THE ASSES SEE HAS NOT PRODUCED ANY EVIDENCES BEFORE THE LD. CIT(A) OR BEF ORE THE ASSESSING OFFICER TO CORROBORATE THOSE STATEMENTS T HAT THE ASSESSEE COMPANY WAS ENGAGED IN PROVIDING ONLY ACCO MMODATION ENTRIES. THE ASSESSEE-COMPANY HAS NOT PROVIDED ANY AFFIDAVITS FROM THE BENEFICIARY COMPANIES TO SUPPORT ITS CLAIM OF BEING ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. THE PRI MARY ONUS UNDER SECTION 68 OF THE ACT IS ON THE ASSESSEE TO D ISCHARGE AND EXPLAIN THE NATURE AND SOURCE OF THE ENTRIES IN BOO KS OF ACCOUNT. IN OUR OPINION, ESTIMATING THE INCOME AT THE RATE O F 1% PRESUMING THAT THE ASSESSEE WAS ENGAGED IN PROVIDIN G ONLY 9 ITA NO.2449/DEL/2015 ACCOMMODATION ENTRIES AGAINST COMMISSION BY THE LD. CIT(A) IS NOT JUSTIFIED. WE FEEL IT APPROPRIATE TO RESTORE TH IS ISSUE TO THE LD. CIT(A) FOR DECIDING AFRESH AFTER VERIFICATION OF DO CUMENTARY EVIDENCE, IF ANY, WHICH SHALL BE PRODUCED BY THE AS SESSEE TO SUBSTANTIATE ITS CLAIM THAT IT HAS ROTATED MONEY OF THE BENEFICIARIES AND PROVIDED ACCOMMODATION ENTRIES TO THE BENEFICIARIES AGAINST CERTAIN COMMISSION ONLY. THE ASSESSEE SHOULD PRODUCE THOSE BENEFICIARIES BEFORE THE ASSES SING OFFICER IN SUPPORT OF ITS CLAIM OF HAVING ENGAGED ONLY IN PROV IDING ACCOMMODATION ENTRIES TO THE BENEFICIARIES. IT IS N EEDLESS TO MENTION THAT BOTH THE PARTIES, I.E., THE ASSESSEE A ND ASSESSING OFFICER SHALL BE PROVIDED ADEQUATE OPPORTUNITY OF B EING HEARD. THE GROUNDS OF THE APPEAL OF THE REVENUE ARE, ACCOR DINGLY, ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT O N 21 ST JANUARY, 2020. SD/- SD/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21 ST JANUARY, 2020. RK/-(D.T.D.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI