M/s Lakshya Corporate Solutions P. Ltd., Delhi V. Pr.CIT, New Delhi

ITA 2520/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7004 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-11-2016
• Assessment Year: misc
• Appeal Filed On: 05-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.S. RANA
• Keywords: Revision of order; Accommodation entries; Assessment record; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 142(1); 143(1); 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NOS. 2520 & 2521/DEL/2016 A.YRS. : 2008-09 & 2009-10 M/S LAKSHYA CORPORATE SOLUTIONS P LTD., 19, 2 ND FLOOR, KK BUSINESS CENTRE, VEER SAVARKAR BLOCK, SHAKARPUR, DELHI 110 092 (PAN: AABCL3481G) VS. PR. CIT-5, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SURESH GUPTA, CA DEPARTMENT BY : SH. S.S. RANA, CIT(DR) ORDER PER H.S. SIDHU : JM THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE SEPARATE ORDERS PASSED BY THE LD. PRINC IPAL COMMISSIONER OF INCOME TAX, DELHI-5, NEW DELHI U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS T HE ACT) RELEVANT FOR THE ASSESSMENT YEARS 2008-08 TO 2009-1 0. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON AND IDENTICAL, THEREFORE, THESE APPEALS WERE HEARD TOGETHER AND AR E BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE, BY DEALING WITH ITA NO. 2520/DEL/2016 (AY 2008-09). 2. THE GROUND RAISED IN ITA NO. 2520/DEL/2016 (AY 2 008-09) 2 READ AS UNDER:- 1. THE LD. CIT HAS ERRED BOTH IN LAW AND ON FACTS IN ASSUMING JURISDICTION U/S. 263 OF THE I.T. ACT IGNORING THE FACT THAT THE ORDER UNDER REVISION WAS PASSED BY THE AO U/S. 147/143(3) AFTER CONDUCTING ENQUIRY BASED ON THE SAME MATERIAL FORWARDED BY THE DI (INV.) AND ON THE BASIS OF WHICH ACTION U/S. 147 WAS INITIATED AND THEREFORE, THE FINDING OF THE LD. CIT THAT THE SAI D ORDER WAS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION OF THE SAME MATERIAL IS FACTUALLY INCORRECT. 2. THE LD. CIT HAS ERRED BOTH ON LAW AND ON FACTS IN ASSUMING JURISDICTION U/S. 263 OF THE ACT WITHOUT HOLDING AND GIVING FINDING THAT THE ASSESSMENT ORDER DATED 28.3.2014 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 3. THE IMPUGNED ORDER U/S. 263 OF THE I.T. ACT DATED 31.3.2016 IS BAD IN LAW AND ON FACTS IN SO FAR AS IT DIRECTS AO TO CONDUCT ENQUIRY, POST SET ASIDE OF THE ORDER U/S. 147/143(3) ON THE SHARE CAPITAL OF RS. 10,00,000/- ACCEPTED FROM THE SO CALLED ACCOMMODATION ENTRY PROVIDERS, IS NOT CONSISTENT WITH THE SHOW CAUSE NOTICE DATED 23.3.2016 ISSUED FOR SHARE APPLICATION MONEY OF RS. 8,50,000/- ACCEPTED FROM TWO DIFFERENT PARTIES WHICH SHOWS LACK OF APPLICATION OF MIND 3 BY THE LD. CIT. 4. THE DIRECTION TO VERIFY THE SHARE APPLICATION MONEY OF RS. 10,00,000/0 ACCEPTED DURING THE YEAR FROM TWO PARTIES NAMED IN THE IMPUGNED ORDER DO NOT EXIST IN THE RECORD OF THE APPELLANT AS NO SHARE APPLICATION FROM THOSE PARTIES HAVE BEEN ACCEPTED BY THE APPELLANT DURING THE AY UNDER APPEAL. 5. THE APPELLANT CRAVES LEAVE TO ADD, DELETE, MODIFY/ AMEND THE ABOVE GROUNDS OF APPEAL WITH THE PERMISSION OF THE HONBLE APPELLATE AUTHORITY. 3. THE GROUND RAISED IN ITA NO. 2521/DEL/2016 (AY 2 009-10) READ AS UNDER:- 1. THE LD. CIT HAS ERRED BOTH IN LAW AND ON FACTS IN ASSUMING JURISDICTION U/S. 263 OF THE I.T. ACT IGNORING THE FACT THAT THE ORDER UNDER REVISION WAS PASSED BY THE AO U/S. 147/143(3) AFTER CONDUCTING ENQUIRY BASED ON THE SAME MATERIAL FORWARDED BY THE DI (INV.) AND ON THE BASIS OF WHICH ACTION U/S. 147 WAS INITIATED AND THEREFORE, THE FINDING OF THE LD. CIT THAT THE SAI D ORDER WAS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION OF THE SAME MATERIAL IS FACTUALLY INCORRECT. 4 2. THE LD. CIT HAS ERRED BOTH ON LAW AND ON FACTS IN ASSUMING JURISDICTION U/S. 263 OF THE ACT WITHOUT HOLDING AND GIVING FINDING THAT THE ASSESSMENT ORDER DATED 28.3.2014 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 3. THE IMPUGNED ORDER U/S. 263 OF THE I.T. ACT DATED 31.3.2016 IS BAD IN LAW AND ON FACTS IN SO FAR AS IT DIRECTS AO TO CONDUCT ENQUIRY, POST SET ASIDE OF THE ORDER U/S. 147/143(3) ON THE SHARE CAPITAL OF RS. 8,50,000/- ACCEPTED FROM THE SO CALLED ACCOMMODATION ENTRY PROVIDERS, IS NOT CONSISTENT WITH THE SHOW CAUSE NOTICE DATED 23.3.2016 ISSUED FOR SHARE APPLICATION MONEY OF RS. 10,00,000/- ACCEPTED FROM TWO DIFFERENT PARTIES WHICH SHOWS LACK OF APPLICATION OF MIND BY THE LD. CIT. 4. THE DIRECTION TO VERIFY THE SHARE APPLICATION MONEY OF RS. 8,50,000/- ACCEPTED DURING THE YEAR FROM TWO PARTIES NAMED IN THE IMPUGNED ORDER DO NOT EXIST IN THE RECORD OF THE APPELLANT AS NO SHARE APPLICATION FROM THOSE PARTIES HAVE BEEN ACCEPTED BY THE APPELLANT DURING THE AY UNDER APPEAL. 5. THE APPELLANT CRAVES LEAVE TO ADD, DELETE, MODIFY/ AMEND THE ABOVE GROUNDS OF APPEAL WITH THE PERMISSION OF THE HONBLE APPELLATE AUTHORITY. 5 ITA NO. 2520/DEL/2016 - A.Y. 2008-09 4. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF INCOME WAS FINALLY FILED ON 27.9.2008 DECLARING NIL INCOME BEIN G LOSS OF RS.10,372/-. THIS RETURN WAS PROCESSED U/S. 143(1) O F THE I.T. ACT. SUBSEQUENTLY, THE CASE WAS REOPENED U/S. 147 O F THE I.T. ACT ON THE BASIS OF INFORMATION RECEIVED FROM THE O FFICE OF THE DIT(INV.II), NEW DELHI THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRIES AMOUNTING TO RS. 10,00,0000/- FROM M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLE ASE PVT. LTD. NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961 WA S ISSUED ON 28.3.2013. THE ASSESSEE HAS FILED A LETTER ON 10.12 .2013 STATING THAT RETURN ALREADY FILED ON 27.9.2008 MAY BE TREATED IN RESPONSE TO NOTICE U/S. 148 OF THE I.T. ACT, 196 1. SUBSEQUENTLY, NOTICES U/S. 143(2) AND 142(1) OF THE I.T. ACT, 1961 ALONGWITH LETTER WERE ISSUED AND THE SAME WERE COMPLIED WITH BY THE ASSESSEES AR BY ATTENDING THE PROCEEDI NGS FROM TIME TO TIME AND FILED NECESSARY DETAILS. AO OBSER VED THAT THERE WAS NO BUSINESS ACTIVITIES CARRIED ON BY THE ASSESSEE. HENCE, THE LOSS OF RS. 10,372/- WAS NOT ALLOWED AND THE INCOME WAS TAKEN AT NIL VIDE ORDER DATED 29.3.2014 P ASSED U/S. 143(3)/147 OF THE I.T. ACT, 1961. 4.1 THE AO HAS MADE A PROPOSAL U/S. 263 OF THE I.T. ACT, FOR REVISING ASSESSMENT ORDER DATED 28.3.2014 STATING T HAT 6 CERTAIN FACTS HAVE EMERGED, WHICH WERE NOT AVAILABL E ON RECORD AT THE TIME OF ASSESSMENT U/.S 147 OF THE I.T. ACT . THE AO HAS HELD THE ORDER AS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE. THE GROUNDS OF PROPOSAL TAKEN BY THE AO IS THAT ENQUIRIES OF INVESTIGATION WING, DELHI OF THE DEPAR TMENT HAVE UNEARTHED HUGE ACCOMMODATION ENTRY RACKET BEING OPE RATED BY ACCOMMODATION ENTRY OPERATOR JAIN BROTHERS BY WA Y OF MORE THAN 100 COMPANIES/ FIRMS ETC. THE INVESTIGATI ON WING HAS COMPLIED A REPORT AND DATE OF THE BENEFICIARIES OF SUCH ENTRIES. THE NAME OF THE ASSESSEE COMPANY FIGURES I N THE LIST OF BENEFICIARIES OF SHARE CAPITAL PREMIUM / LOAN. T HE PERUSAL OF CHEQUE BOOK WRITTEN BY JAIN BROTHERS FOR 28.3.2 009 AT PAGE NO. 52 OF THE SEIZED ANNEXURE, A-25, ENTRY IS FOUND RECORDED SHOWING PAY ORDERS/ CHEQUES ISSUED IN THE NAME OF M /S LAKSHYA CORPORATE SOLUTIONS PRIVATE LIMITED, THROUG H JAIN GROUP COMPANY M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LTD. THE ASSESSMENT U/S. 1 47 IN THIS CASE HAS BEEN MADE NOT TAKING INTO ACCOUNT THE ABO VE FACTS THAT JAIN BROTHERS HAVE PROVIDED THE ACCOMMODATION ENTRIES IN LIEU OF CERTAIN COMMISSION CHARGED FROM THE BENEFIC IARY PARTIES FROM VARIOUS COMPANIES / FIRMS, WHICH ARE BEING CO NTROLLED BY JAIN BROTHERS. 4.2 THE EXAMINATION OF THE ASSESSMENT RECORD REVEAL S THAT THE ASSESSMENT ORDER PASSED U/S. 143(3)/147 OF THE ACT ON 7 28.3.2014 BY THE AO IS FOUND ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE DUE TO T HE FOLLOWING REASONS:- ON THE BASIS OF THE INFORMATION RECEIVED FROM O/O DIT(INV.)-II, NEW DELHI THAT THE ASSESSEE HAD RECEIV ED ACCOMMODATION ENTRIES AMOUNTING TO RS. 10,00,000/- FROM THE FOLLOWING PARTY AS DETAILED BELOW, CASE WA S TAKEN UP FOR SCRUTINY U/S. 147:- CHEQUE BOOK DATE FROM COMPANY NAME TO COMPANY NAME NAM E OF THE ISSUIN G BANK CHEQUE NO. CHEQUE DATE AMOUNT (RS.) 28/03/ 2009 HUMTUM MARKETING PVT. LTD. M/S LAKSHYA CORPORAT E SOLUTIONS PVT. LTD. AXIS 012006 28/03/ 2009 5,00,000 28/03/ 2009 ATTRACTIVE FINLEASE PVT. LTD. M/S LAKSHYA CORPORAT E SOLUTIONS PVT. LTD. AXIS 012833 28/03/ 2009 5,00,000 4.3 ASSESSMENT U/S. 147 WAS COMPLETED ON 28.3.2014 WITHOUT MAKING ABOVE ADDITION, AS ASSESSEE CLAIMED TO HAVE RECEIVED SHARE APPLICATION MONEY FROM M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LT D. FOR RS. 10,00,000/- ON ABOVE DATES, WHICH WAS CONFIRMED BY M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LTD. LD. PRINCIPAL CIT, NEW DELHI HAS OBSERVED THAT WHIL E PASSING 8 THE ASSESSMENT ORDER U/S. 147, AO FAILED TO APPLY H IS MIND TO THE CASE IN ALL PERSPECTIVE AND FACT THAT THE FLOW OF MONEY IS FROM COMPANY OF A PROVED ACCOMMODATION ENTRY PROVI DER, WHICH IS NOT NORMAL BUSINESS TRANSACTION. AO FAILED TO UNDERSTAND COLLUSION OF ASSESSEE COMPANY WITH THE E NTRY PROVIDER THAT THESE ENTRIES ARE ACTUALLY ACCOMMODAT ION ENTRY AND NOT GENUINE TRANSACTION AND THE ORDER PASSED BY HIM WAS ERRONEOUS. 4.4 BASED ON THE PROPOSAL OF THE AO A SHOW CAUSE N OTICE UNDER SECTION 263 OF INCOME TAX ACT, 1961 WAS ISSUE D ON 23-03-2016 FOR ATTENDANCE ON 30-03-2016. ASSESSEE C OMPANY FILED REPLY OF THE NOTICE ON 23.03.2016 VIDE LETTER DATED 30/03/2016 THE ASSESSEE COMPANY HAS REQUESTED TO DR OP PROCEEDINGS U/S 263 ON VARIOUS GROUND THAT THE ASSE SSMENT WAS DONE AFTER PROPER ENQUIRY, HOWEVER IT IS SEEN T HAT ORDER WAS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE THUS ORDER PASSED BY HIM WAS ERRONEOUS, THE ERROR OF JUDGMENT OF THE A.O CAN BE GAUZED FROM THE FACT THAT FLOW OF FUND FROM VARIOUS ENTITI ES OF ACCOMMODATION ENTRY PROVIDER, INCOME-TAX OFFICER FAI LED TO APPLY HIS MIND TO THE CASE IN ALL PERSPECTIVE AND T HE ORDER PASSED BY HIM WAS ERRONEOUS, REPLY OF ASSESSEE CONS IDERED AND CANNOT BE ACCEPTED AS DEPARTMENT HAS PROVED CON CLUSIVELY BEYOND DOUBT BY CONDUCTING DETAILED INVESTIGATIONS, TRAILING THE 9 FUNDS THAT THESE FUNDS HAVE BEEN BROUGHT BY THE WAY OF ACCOMMODATION ENTRIES IN A ORCHESTRATED, COORDINATE D. SYNCHRONIZED, COLLUSIVE MANNER. AFTER CONSIDERING T HE ALL FACTS AND CIRCUMSTANCES, THE ASSESSMENT ORDER PASSED U/S 147/143(3) DATED 28/03/2014 BY THE INCOME TAX OFFIC ER OF WARD-15(1) (ERSTWHILE WARD4(3), NEW DELHI IS BEING SET ASIDE. THE AO WAS DIRECTED TO RE-EXAMINE THE ISSUE AS PROP OSED U/S. 263 OF THE IT ACT AND PASS THE NECESSARY ORDER AFTE R GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE VIDE HIS ORD ER DATED 31.3.2016. 5. AGAINST THE AFORESAID ORDER OF THE LD. CIT PASSE D U/S. 263 OF THE ACT DATED 31.3.2016, ASSESSEE IS IN APPEAL BEFO RE THE TRIBUNAL. 6. LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS S TATED LD. CIT HAS ERRED BOTH IN LAW AND ON FACTS IN ASSUMING JURISDICTION U/S. 263 OF THE I.T. ACT IGNORING THE FACT THAT THE ORDER UNDER REVISION WAS PASSED BY THE AO U/S. 147/ 143(3) AFTER CONDUCTING ENQUIRY BASED ON THE SAME MATERIAL FORWA RDED BY THE DI(INV.) AND ON THE BASIS OF WHICH ACTION U/S. 147 WAS INITIATED AND THEREFORE, THE FINDING OF THE LD. CIT THAT THE SAID ORDER WAS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION OF THE SAME MATERIAL IS FACTUALLY INCORRECT. HE FURTHER STATED THAT LD. CIT HAS ERRED BOTH ON LAW AND ON FACTS IN ASSUMING JURISDI CTION U/S. 263 10 OF THE ACT WITHOUT HOLDING AND GIVING FINDING THAT THE ASSESSMENT ORDER DATED 28.3.2014 IS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF REVENUE. HENCE, HE STATED THAT THE IMPU GNED ORDER U/S. 263 OF THE I.T. ACT DATED 31.3.2016 IS BAD IN LAW AND ON FACTS IN SO FAR AS IT DIRECTS AO TO CONDUCT ENQUIRY , POST SET ASIDE OF THE ORDER U/S. 147/143(3) ON THE SHARE CAPITAL O F RS. 10,00,000/- ACCEPTED FROM THE SO CALLED ACCOMMODATI ON ENTRY PROVIDERS, IS NOT CONSISTENT WITH THE SHOW CAUSE NO TICE DATED 23.3.2016 ISSUED FOR SHARE APPLICATION MONEY OF RS. 8,50,000/- ACCEPTED FROM TWO DIFFERENT PARTIES WHICH SHOWS LAC K OF APPLICATION OF MIND BY THE LD. CIT. THE DIRECTION TO VERIFY THE SHARE APPLICATION MONEY OF RS. 10,00,000/- ACCEPTED DURING THE YEAR FROM TWO PARTIES NAMED IN THE IMPUGNED ORDER DO NOT EXIST IN THE RECORD OF THE APPELLANT AS NO SHARE APPLICAT ION FROM THOSE PARTIES HAVE BEEN ACCEPTED BY THE ASSESSEE DURING T HE AY UNDER APPEAL. TO SUPPORT HIS CONTENTION, HE FILED THE PAP ER BOOK CONTAINING PAGES 1 TO 116 HAVING VARIOUS DETAILS AN D INFORMATION OF THE ASSESSMENT AND APPELLATE STAGE. IN VIEW OF T HE ABOVE, HE REQUESTED THAT THE ASSESSMENT MAY BE QUASHED AND AL SO THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) MAY BE CANC ELLED. 7. ON THE OTHER LD. D.R. RELIED UPON THE ORDER OF THE LD. CIT PASSED U/S. 263 AND STATED THAT THE ORDER PASSED BY THE AO IS WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE THUS ORDER BY THE AO WAS ERRONEOUS. HE ALSO STAT ED THAT AO 11 ALSO FAILED TO APPLY HIS MIND TO THE CASE IN ALL PERS PECTIVE AND THE ORDER PASSED BY HIM WAS ERRONEOUS, REPLY OF ASSESSE E CONSIDERED AND CANNOT BE ACCEPTED AS DEPARTMENT HAS PROVED CONCLUS IVELY BEYOND DOUBT BY CONDUCTING DETAILED INVESTIGATIONS, T RAILING THE FUNDS THAT THESE FUNDS HAVE BEEN BROUGHT BY THE WAY OF ACCOMMODATION ENTRIES IN A ORCHESTRATED, COORDINATED, SYNCHRONIZED, COLLUSIVE MANNER. HENCE, HE STATED THAT THE IMPUGNED ORDER MAY BE UPHELD. TO SUPPORT HIS CONTENTION, HE REL IED UPON THE JUDGMENT DATED 02.12.1997 IN THE CASE OF CIT VS. SHRE E MANJUNATHESWARE PACKING PRODUCTS & CAMPHOR WORKS RE PORTED IN [1998] 96 TAXMAN 1 (SC). 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE REC ORDS. I NOTE THAT IN THIS CASE RETURN WAS FINALLY FILED ON 27.9 .2008 DECLARING NIL INCOME BEING LOSS OF RS. 10,372/-. NOTICE U/S. 148 O F THE I.T. ACT, 1961 WAS ISSUED ON 28.3.2013. THE ASSESSEE HAS FILE D A LETTER ON 10.12.2013 STATING THAT RETURN ALREADY FILED ON 27.9 .2008 MAY BE TREATED IN RESPONSE TO NOTICE U/S. 148 OF THE I.T. ACT, 1961. SUBSEQUENTLY, NOTICES U/S. 143(2) & 142(1) OF THE I .T. ACT, ALONGWITH LETTER WERE ISSUED AND THE SAME WERE COMPL IED WITH. THE AR OF THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FILED NECESSARY DETAILS WHICH WERE EXAMINED BY THE A O. AO OBSERVED THAT DURING THE YEAR, THERE WERE NO BUSINESS ACTIVITIES 12 CARRIED ON BY THE ASSESSEE. THEREFORE, THE LOSS OF RS. 10,372/- WAS NOT ALLOWED BY THE AO AND THE INCOME WAS ASSESSED AT NIL. HOWEVER, THE LD. CIT ON THE EXAMINATION OF THE ASSESSMENT RECORD OBSERVED THAT THE ASSESSMENT ORDER PASSED U/S. 143(3)/147 OF THE ACT ON 28.3.2014 BY THE AO IS FOUND ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE DUE TO THE FOLLOWING REASONS:- ON THE BASIS OF THE INFORMATION RECEIVED FROM O/O DIT(INV.)-II, NEW DELHI THAT THE ASSESSEE HAD RECEIV ED ACCOMMODATION ENTRIES AMOUNTING TO RS. 10,00,000/- FROM THE FOLLOWING PARTY AS DETAILED BELOW, CASE WA S TAKEN UP FOR SCRUTINY U/S. 147:- CHEQUE BOOK DATE FROM COMPANY NAME TO COMPANY NAME NAM E OF THE ISSUIN G BANK CHEQUE NO. CHEQUE DATE AMOUNT (RS.) 28/03/ 2009 HUMTUM MARKETING PVT. LTD. M/S LAKSHYA CORPORAT E SOLUTIONS PVT. LTD. AXIS 012006 28/03/ 2009 5,00,000 28/03/ 2009 ATTRACTIVE FINLEASE PVT. LTD. M/S LAKSHYA CORPORAT E SOLUTIONS PVT. LTD. AXIS 012833 28/03/ 2009 5,00,000 LD. CIT OBSERVED THAT ASSESSMENT U/S. 147 WAS COMPLETED ON 28.3.2014 WITHOUT MAKING ABOVE ADDITI ON, AS ASSESSEE CLAIMED TO HAVE RECEIVED SHARE APPLICATIO N MONEY 13 FROM M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LTD. FOR RS. 10,00,000/- ON ABOVE DATES, WHICH WAS CONFIRMED BY M/S HUMTUM MARKETING PVT. LTD. AND ATT RACTIVE FINLEASE PVT. LTD. LD. PRINCIPAL CIT, NEW DELHI HA S OBSERVED THAT WHILE PASSING THE ASSESSMENT ORDER U/S. 147, A O FAILED TO APPLY HIS MIND TO THE CASE IN ALL PERSPECTIVE AND F ACT THAT THE FLOW OF MONEY IS FROM COMPANY OF A PROVED ACCOMMODA TION ENTRY PROVIDER, WHICH IS NOT NORMAL BUSINESS TRANSA CTION. AO FAILED TO UNDERSTAND COLLUSION OF ASSESSEE COMPANY WITH THE ENTRY PROVIDER THAT THESE ENTRIES ARE ACTUALLY ACCO MMODATION ENTRY AND NOT GENUINE TRANSACTION AND THE ORDER PAS SED BY HIM WAS ERRONEOUS. LD. CIT FURTHER OBSERVED THAT THE AS SESSMENT ORDER PASSED BY THE AO WAS WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE THUS ORDER PASSED BY HIM WAS ERRONEOUS. I FIND CONSIDERABLE COGENCY IN T HE ASSESSEES COUNSEL CONTENTION THAT LD. CIT HAS ERRE D IN ASSUMING JURISDICTION U/S. 263 OF THE ACT IGNORING THE FACT THE ORDER UNDER REVISION WAS PASSED BY THE AO U/S. 147 /143(3) OF THE ACT AFTER CONDUCTING ENQUIRY BASED ON THE SAM E MATERIAL FORWARDED BY THE DI(INV.) AND ON THE BASIS OF WHICH ACTION U/S. 147 WAS INITIATED AND THEREFORE, THE FINDING OF THE LD. CIT THAT THE SAID ORDER WAS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION OF THE SAME MATERIAL IS FACTUALLY INC ORRECT. I AM ALSO IN AGREEMENT WITH THE CONTENTION OF THE LD. CO UNSEL OF THE 14 ASSESSEE THAT LD. CIT ERRED IN ASSUMING JURISDICTIO N U/S. 263 OF THE ACT WITHOUT HOLDING AND GIVING THE FINDING THAT THE ASSESSMENT ORDER DATED 28.3.2014 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. I ALSO FIND THAT LD. CIT IN HIS IMPUGNED ORDER HAS WRONGLY DIRECTED THE AO T O CONDUCT ENQUIRY, POST SET ASIDE OF THE ORDER U/S. 147/143(3 ) OF THE ACT ON THE SHARE CAPITAL OF RS. 10,00,000/- ACCEPTED FR OM THE SO CALLED ACCOMMODATION ENTRY PROVIDERS, IS NOT CONSI STENT WITH THE SHOW CAUSE NOTICE DATED 23.3.2016 ISSUED FOR SH ARE APPLICATION MONEY OF RS. 8,50,000/- ACCEPTED FROM TW O DIFFERENT PARTIES WHICH CLEARLY ESTABLISHES THE L ACK OF APPLICATION OF MIND BY THE LD. CIT AND NOT OF THAT AO. I ALSO FIND THAT IN THE REASONS RECORDED U/S. 147 OF THE I.T. ACT, 1961 THE SHARE APPLICATION MONEY WAS RS. 8,50,000/-, HOWE VER, IN THE IMPUGNED ORDER PASSED BY THE LD. CIT THE SHARE APPLICATION MONEY MENTIONED WAS RS. 10,00,000/-. I A M ALSO NOT IN AGREEMENT WITH THE OBSERVATION OF THE LD. C IT MADE AT PAGE NO. 2 THAT ASSESSMENT U/S. 147 WAS COMPLETED O N 28.3.2014 WITHOUT MAKING ABOVE ADDITION, AS ASSESSE E CLAIMED TO HAVE RECEIVED SHARE APPLICATION MONEY FROM M/S H UMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LT D. FOR RS. 10,00,000/- ON ABOVE DATES, WHICH WAS CONFIRMED BY M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LTD. BUT FOLLOWING FACTS HAVE EMERGED, WHICH WERE NOT AV AILABLE ON 15 RECORD AT THE TIME OF ASSESSMENT U/S. 147. BECAUSE THE AO ISSUED NOTICE U/S. 148 OF THE ACT ON 28.3.2013 ALON GWITH REASONS RECORDED DATED 28.3.2013 AND THEREAFTER PAS SED THE ASSESSMENT ORDER DATED 28.3.2014 WHICH ESTABLISHES THAT THE AO WAS HAVING THE RECORD AVAILABLE AT THE TIME OF A SSESSMENT U/S. 147 OF THE ACT. FOR THE SAKE OF CONVENIENCE, I AM REPRODUCING HEREWITH THE RELEVANT PARA OF THE SHOW CAUSE NOTICE DATED 23.3.2016 AND THE RELEVANT PARA OF THE IMPUGNED ORDER DATED 31.3.2016 PASSED U/S. 263 OF THE I.T. A CT, 1961 AS UNDER:- RELEVANT PORTION OF NOTICE DATED 23.3.2016 ISSUED BY THE LD. CIT U/S. 263 OF THE I.T. ACT. TO THE PRINCIPAL OFFICER, M/S LAKSHYA CORPORATE SOLUTIONS PVT LTD 19, 2 ND FLOOR, K.K BUSINESS CENTRE, VEER SAVARKAR BLOCK, SHAKARPUR, NEW DELHI- 110092 SIR, SUBJECT:- SHOW CAUSE NOTICE U/S 263 FOR A.Y 2008-09 - REGARDING THE EXAMINATION OF THE ASSESSMENT RECORD IN YOUR CA SE FOR THE SAID ASSESSMENT YEAR REVEALS THAT THE ASSESSMENT OR DER PASSED U/S 143(3)/147 ON 28/03/2014 BY THE INCOME T AX OFFICER OF W ARD-LS( ) (ERSTWHILE WARD-4(3)) NEW DELHI IS FOUND 16 ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE DUE TO THE FOLLOWING REASONS:- ON THE BASIS OF THE INFORMATION RECEIVED FROM % DIT(LNV.)-II, NEW DELHI THAT THE ASSESSEE HAD RECEIV ED ACCOMMODATION ENTRIES AMOUNTING TO RS. 8,50,000/- F ROM THE FOLLOWING PARTY AS DETAILED BELOW, CASE WAS TAK EN UP FOR SCRUTINY U/S 147. CHEQUE BOOK DATE FROM COMPANY NAME TO COMPANY NAME NAM E OF THE ISSUIN G BANK CHEQUE NO. CHEQUE DATE AMOUNT (RS.) 03/11/ 2007 FINAGE LEASE & FINANCE INDIA LTD. M/S LAKSHYA CORPORAT E SOLUTIONS PVT. LTD. AXIS 098415 3.11. 2007 4,50,000 03/11/ 2007 SHALINI HOLDINGS LTD. M/S LAKSHYA CORPORAT E SOLUTIONS PVT. LTD. AXIS 081342 3.11. 2007 4,00,000 ASSESSMENT U/S 147 WAS COMPLETED ON 28/03/2014 WITH OUT MAKING ABOVE ADDITION, AS ASSESSEE CLAIMED TO HAVE RECEIVED SHARE APPLICATION MONEY FROM M/S FINAGE LEASE & FIN ANCE INDIA LTD AND SHALINL HOLDINGS LTD FOR RS 8,50,000/- ON ABOVE DATES, WHICH WAS CONFIRMED BY M/S FINAGE LEASE & FI NANCE INDIA LTD AND SHALINI HOLDINGS LTD, BUT FOLLOWING FA CTS HAVE EMERGED, WHICH WERE NOT AVAILABLE ON RECORD AT THE TIME OF ASSESSMENT U/S 147. RELEVANT PORTION OF IMPUGNED ORDER DATED 31.3.2016 OF THE LD. CIT U/S. 263 OF THE I.T. ACT. . ORDER U/S. 263 OF INCOME TAX ACT, 1961 17 ASSESSEE COMPANY FILED ITS ORIGINAL RETURN OF INCOME FOR THE AY 2008-09 ON 27.9.2008 DECLARING LOSS OF RS. 10,372/-. THIS RETURN WAS PROCESSED U/S. 143(1) OF THE I.T. ACT. SUBSEQUENTLY, THE CASE WAS REOPENED U/S. 147 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED FROM OFFICE OF THE DIT (INV.)- II, NEW DELHI THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRIES AMOUNTING TO RS. 10,00,000/- FROM M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LTD. THE CASE WAS COMPLETED U/S. 147/143(3) OF THE I.T. ACT, ON 28.3.2014 AT ASSESSED LOSS OF RS. 10,372/-. 2. THE AO HAS MADE A PROPOSAL U/S. 263 OF THE I.T. ACT, FOR REVISING ASSESSMENT ORDER DATED 28.3.2014 STATING THAT CERTAIN FACTS HAVE EMERGED, WHICH WERE NOT AVAILABLE ON RECORD AT THE TIME OF ASSESSMENT U/.S 147 OF THE I.T. ACT. THE AO HAS HELD THE ORDER AS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE. THE GROUNDS OF PROPOSAL TAK EN BY THE AO IS THAT ENQUIRIES OF INVESTIGATION WING, DELHI OF THE DEPARTMENT HAVE UNEARTHED HUGE ACCOMMODATION ENTRY RACKET BEING OPERATED BY ACCOMMODATION ENTRY OPERATOR JAIN BROTHERS BY WAY OF MORE THAN 100 COMPANIES/ FIRMS ETC. THE INVESTIGATION WING HAS COMPLIED A REPORT AND DATE O F THE BENEFICIARIES OF SUCH ENTRIES. THE NAME OF THE ASSESSEE COMPANY FIGURES IN THE LIST OF BENEFICIARI ES OF SHARE CAPITAL PREMIUM / LOAN. THE PERUSAL OF CHEQUE BOOK WRITTEN BY JAIN BROTHERS FOR 28.3.2009 AT PAGE NO. 52 OF THE SEIZED ANNEXURE, A-25, ENTRY IS FOUND RECORDED SHOWING PAY ORDERS/ CHEQUES ISSUED 18 IN THE NAME OF M/S LAKSHYA CORPORATE SOLUTIONS PRIVATE LIMITED, THROUGH JAIN GROUP COMPANY M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LTD. THE ASSESSMENT U/S. 147 IN THIS CASE HAS BEEN MADE NOT TAKING INTO ACCOUNT THE ABOVE FACTS THAT JAIN BROTHERS HAVE PROVIDED THE ACCOMMODATION ENTRIES IN LIEU OF CERTAIN COMMISSION CHARGED FROM THE BENEFICIARY PARTIES FROM VARIOUS COMPANIES / FIRMS, WHICH ARE BEING CONTROLLED BY JAIN BROTHERS. THE EXAMINATION OF THE ASSESSMENT RECORD REVEALS THAT THE ASSESSMENT ORDER PASSED U/S. 143(3)/147 OF THE ACT ON 28.3.2014 BY THE AO IS FOUND ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE DUE TO THE FOLLOWING REASONS:- ON THE BASIS OF THE INFORMATION RECEIVED FROM O/O DIT(INV.)-II, NEW DELHI THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRIES AMOUNTING TO RS. 10,00,000/- FROM THE FOLLOWING PARTY AS DETAILED BELOW, CASE WAS TAKEN UP FOR SCRUTINY U/S. 147:- CHEQUE BOOK DATE FROM COMPANY NAME TO COMPANY NAME NAM E OF THE ISSUIN G BANK CHEQUE NO. CHEQUE DATE AMOUNT (RS.) 28/03/ 2009 HUMTUM MARKETING PVT. LTD. M/S LAKSHYA CORPORAT E SOLUTIONS PVT. LTD. AXIS 012006 28/03/ 2009 5,00,000 28/03/ 2009 ATTRACTIVE FINLEASE PVT. LTD. M/S LAKSHYA CORPORAT E SOLUTIONS AXIS 012833 28/03/ 2009 5,00,000 19 PVT. LTD. ASSESSMENT U/S. 147 WAS COMPLETED ON 28.3.2014 WITHOUT MAKING ABOVE ADDITION, AS ASSESSEE CLAIMED TO HAVE RECEIVED SHARE APPLICATION MONEY FROM M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LTD. FOR RS. 10,00,000/- ON ABOVE DATES, WHICH WAS CONFIRMED BY M/S HUMTUM MARKETING PVT. LTD. AND ATTRACTIVE FINLEASE PVT. LTD. LD. PRINCIPAL CIT, N EW DELHI HAS OBSERVED THAT WHILE PASSING THE ASSESSMENT ORDE R U/S. 147... 8.1 AFTER PERUSING THE AFORESAID RELEVANT PORTION OF THE NOTICE DATED 23.3.2016 ISSUED U/S. 263 OF THE I.T. ACT AND THE IMPU GNED ORDER DATED 31.3.2016 PASSED BY THE LD. CIT U/S. 263 OF THE I.T. ACT AND KEEPING IN VIEW FACTS AND CIRCUMSTANCE OF THE CASE, WE ARE OF THE VIEW THAT LD. CIT IS ITSELF CONTRADICTORY, BECAUSE WHILE ASSUMING JURISDI CTION U/S. 263 OF THE I.T. ACT, 1961 HE IGNORED THE FACT THAT THE ORDER UNDER REVISION WAS PASSED BY THE AO U/S. 147/143(3) OF THE I.T. ACT AFTER CONDUC TING ENQUIRY BASED ON THE SAME MATERIAL FORWARDED BY THE DI (INV.) AND ON THE BASIS OF WHICH ACTION U/S. 147 OF THE ACT WAS INITIATED AND THEREFORE THE FINDING OF THE LD. CIT THAT THE ASSESSMENT WAS PASSED WITHOUT MAKING INQU IRIES OR VERIFICATION OF THE SAME MATERIAL IS FACTUALLY INCORREC T AND NEEDS TO BE QUASHED ON THIS COUNT. I FURTHER FIND THAT LD. CIT IS ALSO NOT CORRECT IN DIRECTING THE AO TO CONDUCT THE ENQUIRY, POST SET ASID E OF THE ORDER U/S. 147/143(3) OF THE ACT ON THE SHARE CAPITAL OF RS. 10 ,00,000/- ACCEPTED FROM THE SO CALLED ACCOMMODATION ENTRY PROVIDERS, I S NOT CONSISTENT WITH THE SHOW CAUSE NOTICE DATED 23.3.2016 ISSUED FOR SHAR E APPLICATION MONEY OF RS. 8,50,000/- ACCEPTED FROM TWO DIFFERENT PARTIES WHICH SHOWS LACK OF APPLICATION OF MIND BY THE LD. CIT. I FURTHER NOTE T HAT THE DIRECTION TO 20 VERIFY THE SHARE APPLICATION MONEY OF RS. 10,00,000/- ACCEPTED DURING THE YEAR FROM TWO PARTIES NAMED IN THE IMPUGNED ORDER DO N OT EXIST IN THE RECORD OF THE ASSESSEE AS NO SHARE APPLICATION FROM THOSE PARTIES HAVE BEEN ACCEPTED BY THE ASSESSEE DURING THE AY 2008-09. SINCE WE ARE ALLOWING THE APPEAL OF THE ASSESSEE ON LEGAL GROUND, HENCE, THE CASE LAW CITED BY THE LD. DR IS NOT RELEVANT TO THE PRESENT CAS E. IN VIEW OF THE ORDER PASSED U/S. 263 OF THE I.T. ACT, 1961 IS HEREBY CANC ELLED AND THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 IS ALLOW ED. 8.2 AS REGARDS ITA NO. 2521/DEL/2016 (AY 2009-10) I S CONCERNED, FOLLOWING CONSISTENT VIEW TAKEN IN ITA NO. 2520/DEL /2016 (AY 2008-09) AS AFORESAID, BEING THE SIMILAR AND IDENTICAL FACTS AND CIRCUMSTANCES, THE APPEAL NO. 2521/DEL/2016 (AY 2009-10) IS ALSO ALLOW ED IN THE AFORESAID MANNER. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSE SSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/01/2017. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU) ACCOUNTANT MEMBER JUD ICIAL MEMBER DATED: 13/01/2017 * SRB * COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY OR DER, ASSISTANT REGISTRAR