The Assistant Commissioner of Income Tax, Circle-1, Margao., Margao V. M/s Paradise Inland Shipping Pvt. Ltd., Margao

ITA 327/PAN/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1336 (ITAT-PANAJI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 07-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S D GULAWANI
• Assessee Lawyers: SHRINIVAS NAYAK
• Keywords: Unexplained cash credit; Income from undisclosed sources; Share purchase agreement; Opportunity of being heard; Principle of natural justice; Source of fund; Question of law; Accommodation entries; Reassessment proceedings
• Section: 143(3); 142(1); 32; 147; 131; 68; 148; 28

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N. S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NOS. 327/PNJ/2015 (ASST. YEAR : 2010 - 11) ACIT, CIRCLE - 1, MARGAO GOA. VS M/S. PARADISE INLAND SHIPPING PVT. LTD., 1 ST F LOOR, HEE RA NIKETAN, ABOVE KAVERI BOOK STALL, COMBA, MARGAO, GOA. PAN NO. AAFCP 2941 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHRINIVAS NAYAK CA DEPARTMENT BY : SHRI S.D. GULAWANI DR DATE OF HEARING : 20 /10/2015. DATE OF PRONOUNCEMENT : 20 /10/2015. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE R EVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), PANAJI - 1, DATED 19/05/2015. 2 . THE R EVENUE HAS TAKEN EIGHT GROUNDS OF APPEAL WHEREIN THE SOLE ISSUE INVOLVED IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ALLOWING RELIEF OF RS.3.80 CRORES ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM INVESTOR COMPANIES. 2 3 . THE A SSESSING OFFICER WHILE MAKING THE ADDITION OF RS.3.80 CRORES ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE OBSERVED AS UNDER : - ' THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF IRON ORE: ASSESSEE FILED THE ORIGINAL RETURN OF I NCOME ON 27/09/2010 FOR A.Y. 2010 - 11 DECLARING TOTAL INCOME AS NIL. LATER, DURING THE ASSESSMENT PROCEEDINGS OF AY 2011 - 12, IT WAS SEEN THAT THE ASSE S SEE HAS RECEIVED SHARE APPLICATION MONEY TO THE TUNE OF RS.3.8 CRORES FROM KOLKATA AND DELHI BASED COMPANI ES. AFTER INDEPTH INVESTIGATIONSAND AFTER GIVING MANY OPPORTUNITIES TO ASSESSEE, ASSESSEE'S CASE FOR THE AY 2010 - 11 WAS REOPENED U/S 147 ON 14/03/2014 WITH REASON AS BELOW: 2. ' .. .DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF M/S. PARADISE INLAND SHIPPING PVT. LTD., PAN: AAFCP2941R FOR AY. 2011 - 12 IT WAS SEEN THAT THE ASSESSEE HAS ALLOTTED EQUITY SHARES TO VARIOUS COMPANIES FROM KOLKATA AND NEW DELHI. ASSESSEE WAS ASKED ABOUT THE SHARE HOLDING PATTERN AND ASSESSEE SUBMITTED THE FOLLOWING DET AILS: SL.NO NAME OF THE COMPANY ADDRESS NO. OF EQUITY SHARES ALLOTTED AMOUNT OF INVESTMENT DATE OF ALLOTMENT 1 SONY FINANCIAL 1/4233, ANSARI 40,000 40,00,000 09.01.201 0 SERVICES LIMITED ROAD 2 ND FLOOR DARYA GANJ, NEW DELHI 2 AKI ORGANICS PRIVATE LIMITED 449, RPS FLATS, MANSAROVER PARK, SHAHDARA DELHI - 110032, DELHI, INDIA 40,000 40,00,000 09.01.201 0 3 CONTINENTAL FISCALMANAGEMENT LTD 36, GANESH CHANDRA AVENUE, CABIN NO - 4B, KOLKATA - 700013 30,000 30,00,000 09.01.201 0 4 CENTAK DISTRIBUTORS PVT LTD 1 - B, BLACKBURNL ANE, 4 TH FLOOR , KOLKATA - 12 50,000 50,00,000 09.01.10 3 5 KANUPRIYA COMMERCIAL PRIVATE LIMITED 14 GANESH CHANDRA AVENUE, 2ND FLOOR, KOLKATA - 700013 40,000 40,00,000 09.01.201 0 6 ORPAT COMMERCIAL PRIVATE LIMITED 33, - C.R. AVENUE, 9TH FLOOR, KOLKATA - 700012 25,000 25,00,000 09.01.201 0 7 J P ENGINEERING CORPN PVT LTD AE - 326, SALT LAKE CITY, KOLKATA 700064 25,000 25,00,000 09.01.201 0 8 RAMESWAR RETAILERS PRIVATE LIMITED 33, C.R. AVENUE, 9 TH FLOOR, KOLKATA - 700012 35,000 35,00,000 09.01.201 0 9 PARIDHI FINVEST PRIVATE LIMITED 8 LAKE TOWN, BLOCK - B, KOLKATA 700089 60,000 60,00,000 09.01.2010 10 OMEGA VENTURES PRIVATE LIMITED 1 B BLACK BURN LANE, 4TH FLOOR, P S BOW BAZAR, KOLKATA - 700012 35,000 35,00,000 09.01.2010 A COMMISSION U/S 131(1)(D) WAS ISSUED TO THE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION), AAYAKAR BHAWAN ANNEXE, P - 13, CHOWRINGHEE SQUARE, KOLKATA - 0700069 AND THE ASSISTANT DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 6(1), ROOM NO. 261A, 2 N D FLOOR, E - 2, ARA CENTRE, 3 RD FLOOR, JHANDEWALA EXTENSION, NEW DELHI - 110055 ON 06/01/2014 TO ASCERTAIN THE EXISTENCE, CREDIT WORTHINESS, SOURCE OF FINANCE OF HIS COMPANIES. THE COMMISSION TO THE DEPUTY DIRECTOR OF INCOME TAX (INV), KOLKATA WAS ISSUED IN THE MATTER OF SHARE HOLDING COMPANIES BASED OUT OF KOLKATA WHICH ARE: 1 . CONTINENTAL FISCAL MANAGEMENT LTD 2 . CENTAK DISTRIBUTORS PVT LTD 3 . KANUPRIYA COMMERCIAL PRIVATE LIMITED 4 . ORPAT COMMERCIAL PRIVATE LIMITED 5 . J P ENGINEERING CORPN PVT LTD 6 . RAMESWAR RETAILERS PRIVATE LIMITED 4 7 . PARIDHI FINVEST PRIVATE LIMITED 8 . OMEGA VENTURES PRIVATE LIMITED THE OFFICE OF THE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION), CALCUTTA REPLIED VIDE LETTER DATED 22/01/2014 SAYING THAT 'IN SPITE OF THE BEST EFFORTS, NONE OF THE C ONCERNS COULD BE LOCATED AT THE GIVEN ADDRESS AND THUS THE CREDIT WORTHINESS OF THE COMPANIES COULD NOT BE VERIFIED. THE INSPECTOR REPORT IS ATTACHED FOR YOUR READY REFERENCE.' INSPECTOR'S REPORT SAID AS BELOW FOR EACH COMPANY: 'AS DIRECTED BY THE LD. DDIT (INV.), UNIT - II(3), KOLKATA, I VISITED THE ABOVE MENTIONED ADDRESS ON 16/01/2014 TO KNOW THE EXISTENCE OF THE ABOVE - MENTIONED COMPANY BUT I DID NOT FIND. I ENQUIRED THE LOCAL PEOPLE AVAILABLE THERE AS TO THE WHEREABOUTS OF THE ABOVE SAID COMPANY BUT THEY COULD NOT SAY ANYTHING ABOUT THE SAID COMPANY. DIRECTORS FROM LD. DDIT (INV), KOLKATA REGARDING FURTHER STEPS TO BE TAKEN ARE AWAITING.' COMMISSION TO THE DEPUTY DIRECTOR OF INCOME TAX (INV), NEW DELHI WAS ISSUED IN THE MATTER OF SHARE HOLDING COMPANIES BASED OUT OF NEW DELHI WHICH ARE: 1 . SONY FINANCIAL SERVICES LIMITED 2 . AKI ORGANICS PRIVATE LIMITED THE OFFICE OF THE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION), NEW DELHI REPLIED VIDE LETTER DATED 10.03.20 14, SAYING THAT 'THE PRINCIPAL OFFICERS OF M/S SONY FINANCIAL SERVICES LIMITED AND AKI ORGANICS PRIVATE LIMITED WERE SUMMONED FOR FURNISHING THE FOLLOWING DETAILS . HOWEVER, NEITHER OF THE PRINCIPAL OFFICERS RESPONDED TO THE SUMMONS AFTERWARDS, AN INSPECTOR OF UNIT - VI, NEW DELHI WAS DEPUTED TO SERVE THE SUMMONS AT THE REGISTERED OFFICE OF AKI ORGANICS PRIVATE LIMITED AT 449, RPS FLATS, MANSAROVAR PARK, SHANDARA, DELHI - 110032... INSPECTOR'S REPORT IN THIS REGARD IS ENCLOSED HEREWITH.' INSPECTOR'S REPORT SAID AS BELOW: 'IT WAS FOUND DURING MY VISIT TO THE AFORESAID PREMISES THAT NO COMPANY IN THE NAME OF M/S AKI ORGANICS PRIVATE LTD. WAS FOUND TO BE EXISTING HERE. ENQUIRIES FROM NEIGHBORHOODS ABOUT THE EXISTENCE OF THE ABOVE MENTIONED COMPANY WAS DONE. BUT NO ONE COULD REPLY IN POSITIVE ABOUT THIS 5 COMPANY. THE AFORESAID PREMISE IS A RESIDENTIAL PREMISE.' ON M/S SONY FINANCIAL SERVICES LIMITED, DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION), NEW DELHI REPLIED SAYING THAT 'SUMMONS IN THE NAME OF THE PRINCIPAL OFFICER, M/S SONY FINANCIAL SERVICES LIMITED WAS - SERVED AT GL - 5, ANSAL BHAWAN, DELHI - 110001 PERSONALLY BY THE INSPECTOR OF THIS UNIT. AFTER REPEATED REMINDERS, TILL DATE NO ONE HAS COME FORWARD WITH ANY KIND OF SUBMISSION IN RESPONSE TO THE AFORESAID SUMMONS' THE ASSESSEE WAS ASKED VIDE LETTER DATED 22/01/2014 THE FOLLOWING DETAILS: 1 . ADDRESS AND PHONE NUMBER (LAND AND MOBILE) OF THE COMPANIES 2 . ANY COMMUNICATION YOU HAD WITH THOSE COMPANIES 3 . MINUTES OF AGM ON ALLOCATION OF SHARES 4 . HOW THE COMPANIES CAME TO KNOW ABOUT THE SHARE ISSUE. ARE THERE ANY NEWSPAPER ADVERTISEMENT, ETC. WHICH PUBLICIZED THE SHARE ISSUE? 5 . PLEASE PROVIDE ON WHICH DATE THE APPLICATION OF THESE CO MPANIES FOR SHARE ALLOCATION WAS RECEIVED, WITH RECEIPT. 6 . ON WHICH BANK ACCOUNT (YOUR ACCOUNT) WAS THE SHARE MONEY RECEIVED BY YOU AND DATE ON WHICH TRANSACTION HAPPENED WITH BANK STATEMENT. - 7 . FROM WHICH BANK ACCOUNT (ACCOUNT OF THE ALLOTTEE) WAS THE SHARE MONEY RECEIVED BY YOU. LATER VIDE LETTER 14/02/2014, THE ASSESSEE WAS AGAIN ASKED TO SUBMIT ANY COMMUNICATION WITH THOSE COMPANIES HOW THE COMPANIES CAME TO KNOW ABOUT THE SHARE ISSUE. ARE THERE ANY NEWSPAPER ADVERTISEMENT, ETC. WHICH PUBLICIZED THE SHARE ISSUE? PLEASE PROVIDE ON WHICH DATE THE APPLICATION OF THESE COMPANIES FOR SHARE ALLOCATION WAS RECEIVED, WITH RECEIPT. LATER VIDE LETTER 07/03/2014, THE ASSESSEE WAS AGAIN GIVEN AN OPPORTUNITY OF BEING HEARD AND ASKED TO PRODUCE ALL THE INVESTORS WHO PAID THE SHARE APPLICATION MONEY. HOWEVER, EVEN AFTER REPEATED OPPORTUNITIES THE ASSESSEE ONLY SUBMITTED THE DETAILS DOWNLOADED FROM MINISTRY OF 6 CORPORATE WEBSITE WHICH WAS ALREADY IN THE POSSESSION OF THIS OFFICE AND VERIFIED ON COMMISSION. THIS ASSESSING OFFICER HAS THE FOLLOWING OBJECTI VE REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ASSESSMENT YEAR 2010 - 11 SINCE: THE ASSESSEE DID NOT PRODUCE THOSE PARTIES ASSESSEE COULD NOT GIVE THE CONTACT DETAILS OTHER THAN ADDRESSES OF THOSE PARTIES COMPANIES WERE FOUND TO BE NON - EXISTENT IN THOSE ADDRESSES AS VERIFIED BY DDIT(INV), KOLKATA AND DDIT(INV), NEW DELHI NO COMMUNICATION WITH THE PARTIES WERE GIVEN NO EXPLANATION WAS OFFERED HOW THE COMPANIES CAME TO KNOW ABOUT THE SHARE ISSUE. NO NEWSPAPER ADVERTISEMENT, ETC. WHICH PUBLICIZED THE SHA4 ISSUE WAS GIVEN NO ORIGINAL RECEIPT OF APPLICATION OF THESE COMPANIES FOR SHARE ALLOCATION WAS .GIVEN THUS, THE ASSESSEE COMPANY OFFERED NO SATISFACTORY EXPLANATION IN THE OPINION OF THE ASSESSING OFFICER ABOUT THE SHARE APPLICATION MONEY CREDITED. IN THIS BACKGROUND, THIS ASSESSING OFFICER HAS OBJECTIVE REASONS AS DISCUSSED ABOVE TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE AY. 2010 - 11. THE ASS ESSEE COMPANY NOT HAVING ASSESSED FOR A.Y. 2010 - 11, IT IS HEREBY DECIDED TO REOPEN THE CASE U/S 14G FOR ASSESSMENT FOR A.Y. 2010 - 11...' 3 . SUBSEQUENTLY A NOTICE U/S 148 WAS SENT TO THE ASSESSEE ON 14.03.2014. ASSESSEE REPLIED TO THIS NOTICE VIDE LETTER DATED 05.04.2014, SAYING THAT THE ORIGINAL RETURN OF INCOME DECLARING INCOME AS NIL BE CONSIDERED AS FILED IN RESPONSE TO THE ABOVE NOTICE. IN THE SAME LETTER DATED 05.04.2014 ASSESSEE ASKED FOR REASONS FOR REOPENING THE ASSESSMENT AND A COPY OF REASONS WERE PROVIDED BY THIS OFFICE VIDE LETTER DATED 09.07.2014. ASSESSEE ATTENDED THE PROCEEDINGS ON 22.07.2014 AND 09.03.2015. 4 . HOWEVER, DURING THE YEAR THE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION), KOLKATA HAS PASSED ON INFORMATION ABOUT ACCOMMODATION ENTRY PROVIDERS BASED 7 IN KOLKATA AND IT WAS SEEN THAT COMPANIES WHO INVESTED IN ASSESSEE - COMPANY ARE INTO ACCOMMODATION ENTRY BUSINESS. THE STATEMENT ON OATH OF SHRI. DEEPAK PATWARI RECORDED U/S 131 OF THE IT ACT, 1961 ON 27.02.2013 PROVIDES THE MODUS OF OPERAND I: '1. PLEASE IDENTIFY YOURSELF AND CONFIRM THAT OATH HAS BEEN ADMINISTERED TO YOU AND CONSEQUENCE FOR GIVING FALSE STATEMENT ON OATH UNDER THE INDIAN PENAL CODE HAS BEEN EXPLAINED TO YOU. ANS: I AM DEEPAK PATWARI, S/O LATE MADHUSUDAN PATWARI, AGED ABOUT 42 YEARS, RESIDING AT SPACE TOWN, BLOCK - 2, FLAT NO.1 - E, VIP ROAD, KOLAKTA - 52. I CONFIRM THAT THE OATH HAS BEEN ADMINISTERED AND THE CONSEQUENCE OF GIVING FALSE STATEMENT ON OATH HAS BEEN EX PLAINED. 2 . WHAT IS YOUR BUSINESS / PROFESSION ANS: I AM IN THE BUSINESS OF SHARE TRADING AND INVESTMENT. I AM ALSO THE DIRECTOR IN M/S ESSKAY TELECOM PVT. LTD. 3 . PLEASE STATE ALL THE BUSINESS WHERE YOU AND YOUR FAMILY MEMBERS ARE ASSOCIATED WITH EITHER AS PROPRIETOR / PARTNER/ DIRECTOR OR OTHERWISE. ANS: WE ARE OPERATIN G COMPANIES AT 29A WESTON STREET, 3RD FLOOR, ROOM NO. C - 2, KOLKATA, AT 1B BLACKBURN LANE, 4TH FLOOR, KOLKATA 12, AT 33 CR AVENUE,. KOLKATA, AT 211/1/ SARAT CHATTERJEE ROAD, AT 27 BRABOUFNE ROAD, KOLKATA, AT A3A NARSINGH AVENUE, 4TH FLOOR, AT 12 BHARPARA RO AD, 4TH FLOOR, HOWRAH, AT 65B GURU GARDEN ROAD, AT 171/12 RAY BAHADUR ROAD, AT 13 KHUDIRAM BOSE ROAD AND AT 8 LAKE TOWN, BLOCK B, NIKITA TOWER, KOLKATA. THE LIST OF COMPANIES AND THEIR ADDRESSES ARE AS FOLLOWS: 1 . AT 29A WESTON STREET, 3RD FLOOR, ROOM NO. C - 2, KOLKATA - 700012 M/S J P ENGG CORP PVT. LTD ...(10 MORE COMPANIES) 2 . AT 113 BLACKBURN LANE, 4TH FLOOR, KOLKATA - 12 8 M/S CENTAK DISTRIBUTORS PVT. LTD ...(5 MORE COMPANIES) 3 . AT 33 CR AVENUE, KOLKATA ...(2 COMPANIES) 4 . 8 LAKE TOWN, BLOCK B, NIKITA TOWER, KOLKATA - 89 M/S PARIDHI FINVEST PVT. LTD M/S KANUPRIYA COMMERCIAL PVT. LTD 5 . AT 43A NARSINGH AVENUE, 4TH FLOOR,KOLKATA - 74 ... (2 COMPANIES) 6 . AT 27 BRABOURNE ROAD, 4TH FLOOR, KOLKATA M/S CONTINENTAL FISCAL MANAGEMENT PVT. LTD ...(1 COMPANY) 7 . AT 13 KHUDIRAM BOSE ROAD, SARANJI, MALL ENCLAVE, KOLKATA ...(1 COMPANY) 8 . AT 211/1/ SARAT CHATTERJEE ROAD ...(1 COMPANY) 9 . AT 12 BHARPARA ROAD, 4TH FLOOR, HOWRAH ...(1 COMPANY) 10 . AT 65B GURU GARDEN ROAD ...(1 COMPANY) 11. 13 KHUDIRAM BOSE ROAD, SARANJI, MALL ENCLAVE, KOLKATA ....(1 COMPANY) 12. AT 171/12 RAY BAHADUR ROAD ...(1 COMPANY) THESE ABOVE COMPANIES ARE FULLY MANAGED AND OPERATED BY ME AND DILIP AGARWAL BY PLACING VARIOUS DIRECTORS IN _ PLACE. I ALONG WI TH DILIP AGARWAL ARE THE BRAIN BEHIND THESE COMPANIES AND ITS OPERATIONS. Q6. PLEASE EXPLAIN THE NATURE OF TRANSACTIONS ENTERED AMONGST COMPANIES OPERATED AND MANAGED BY YOU WITH M/S RASHMI.... AND OTHER RASHMI GROUP OF COMPANIES. ANS: THE ABOVE COMPANIES HAVE PROVIDED ACCOMMODATION ENTRY IN THE FORM OF CAPITAL AND SHARE PREMIUM TO M/S RASHMI CEMENT LTD.... AND OTHER RASHMI COMPANIES ON VARIOUS DATES BY CHARGING 9 COMMISSION @ 25 PAISE FOR RS. 100 DURING FY 2007 - 08 TO 2010 - 11. ALL THE TRANSACTION AFFECTED BY THE ABOVE COMPANIES MANAGED BY ME WITH THE RASHMI GROUP ARE ACCOMMODATION ENTRIES....' 5. RELEVANT - EXCERPTS OF ANOTHER STATEMENT ON OATH OF SHRI. DEEPAK PATWARI RECORDED U/S 131 OF THE IT ACT, 1961 ON 05.06.2013 . IS GIVEN BELOW: '...Q4. DURING THE COURSE OF YOUR STATEMENT RECORDED ON 27.02.2013 U/S 131 OF THE IT ACT, 1961, YOU HAVE ADMITTED THE CASH WAS RECEIVED FROM THE RASHMI GROUP FOR THE SAID ACCOMMODATION E NTRIES. PLEASE EXPLAIN WHERE WAS THE CASH DEPOSITED AND ALSO P RODUCE THE CASH TRAILS IN RESPECT OF ALL THE ACCOMMODATION ENTRY ARRANGED AND MANAGED BY YOU. ANS: THE CASH RECEIVED RASHMI GROUP WAS DEPOSITED IN VARIOUS ACCOUNTS OF OTHER ENTRY OPERATORS SUCH AS I AM SUBMITTING YOU THE DETAILS OF CASH TRAILS. .... THE SA ID CASH TRAILS ARE PREPARED RANDOMLY JUST TO DEMONSTRATE AND ILLUSTRATE THE POINT THAT HOW THE AVAILABILITY OF FUNDS WERE MANIPULATED BY DEPOSITING CASH IN VARIOUS BANK ACCOUNTS_ ON THE SAME DAY IMMEDIATELY PRIOR TO ISSUING THE CHEQUES. IN SUCH BANK ACCOUNTS, CASH AMOUNTS WERE CREDITED AND IMMEDIATELY ENTIRE AMOUNTS WERE WITHDRAWN THROUGH ISSUANCE OF SUCH CHEQUES WHICH CULMINATED INTO SHARE CAPITAL AND SHARE PREMIUM IN . THE HANDS OF RASHMI GFOUP. THE SAME MODUS OPERAN DI IS FOLLOWED IN RESPECT OF ALL OTHER TRANSACTIONS ALSO...' 6 . THE OTHER STATEMENTS PASSED ON BY DEPUTY DIRECTOR OF INCOME TAX, KOLKATA WERE OF THE DIRECTORS OF THESE INVESTOR COMPANIES. THE DIRECTOR OF M/S CONTINENTAL FISCAL MANAGEMENT PVT. LTD _AND M/S CEN TAK DISTRIBUTORS PVT. LTD, SHRI. SANTOSH KUMAR GUPTA SAID AS BELOW: '..I, SANTOSH KUMAR GUPTA RESIDENT OF 27/1. T.N. MUKHERJEE ROAD, HOOGHLY 712245 AND THE THEN DIRECTOR OF THE COMPANY M/S. CONTINENTAL FISCAL MANAGEMENT LTD DURING THE F.Y. 2008 - 09 WAS JUST A DUMMY DIRECTOR IN THIS COMPANY WHICH WAS OPERATED 10 AND MANAGED BY MR. DEEPAK PATWARI. I WAS JUST A PAID EMPLOYEE OF MR. DEEPAK PATWARI AND FOR SIGNING CHEQUE AND BALANCE SHEET I GOT A MONTHLY REMUNERATION OF RS.2000/ - TO RS.3000/ - . THE DETAILS OF TH E COMPANY AND THEIR ACTIVITIES CAN ONLY BE PROVIDED BY MR. DEEPAK PATWARI...' 7 . THE DIRECTOR OF M/S J P ENGG CORP PVT. LTD, M/S RAMESWAR RETAILS PVT. LTD, SHRI. BAIKUNTH NATH PANDEY SAID AS BELOW: '...I, BAIKUNTH NATH PANDEY RESIDENT OF 66, SALKIA SCHOOL ROA D, 5TH FLOOR, BLOCK B, KOLKATA 711106 WAS THEN THE DIRECTOR IN THE FOLLOWING COMPANIES DURING THE F.Y : - 2009 - 10 1. M/S. AFSONS (INDIA) PVT LTD 2. M/S. J P ENGINEERING CORPN PVT. LTD. WAS JUST A DUMMY DIRECTOR IN THOSE COMPANIES WHICH WERE OPERATED AND MANAGED BY MR. DEEPAK PATWARI. I AM JUST A PAID EMPLOYEE OF MR. DEEPAK PATWARI AND FOR SIGNING CHEQUE AND BALANCE SHEET I USED TO GET A MONTHLY REMUNERATION OF RS.2000/ - TO RS.3000/ - . THE DETAILS OF THE COMPANIES AND THEIR ACTIVITIES CAN ONLY BE PROVIDED BY MR. DEEPAK PATWARI...' 8 . THE DIRECTOR OF M/S PARIDHI FINVEST PVT. LTD, SHRI. AMIT AGARWAL SAID AS BELOW '..I, AMIT AGARWAL, THE RESIDENT OF 29A, WESTON STREET, 31(1 FLOOR, KOLKATA 700012 AND THE THEN DIRECTOR OF THE COMPANY M/S. ABEX I - NFOCOM PVT. LTD. DURING THE F.Y 2007 - 08 WAS JUST A DUMMY DIRECTOR IN THE COMPANY WHICH WAS OPERATED AND MANAGED BY MR. DEEPAK PATWARI. I WAS JUST A PAID EMPLOYEE OF MR. DEEPAK PATWARI AND FOR SIGNING CHEQUE AND BALANCE SHEET I USED TO GET A MONTHLY REMUN ERATION OF RS.2000/ - TO RS.3000/ - . THE DETAILS OF THE COMPANY AND THEIR ACTIVITIES CAN ONLY BE PROVIDED BY MR. DEEPAK PATWARI...' 9 . AS CAN BE SEEN, THE COMPANIES AND DIRECTORS OF THE COMPANIES WHO HAVE INVESTED IN THE SHARE 11 APPLICATION OF THE ASSESSEE COMPAN Y ARE ACCOMMODATION ENTRY PROVIDERS. THE STATEMENTS SHOW THAT THEY TAKE CASH FROM A CUSTOMER IN VARIOUS ACCOUNTS AND THEN ROUTE IT THRU' DIFFERENT COMPANIES AND THEN INVEST IN THE CUSTOMER'S COMPANY AS SHARE APPLICATION MONEY OR SHARE APPLICATION PREMIUM. THEY CHARGE AROUND 25 PAISE PER 100 RUPEES FOR THIS TRANSACTION FROM FY 2007 - 08 TO 2010 - 11 WHICH IS RELEVANT HERE. SHRI. DEEPAK PATWARI, THE PERSON WHO IS MANAGING THE BUSINESS AND ROUTING COMPANIES HAS GIVEN ALL THESE DETAILS OF HOW THE BUSINESS IN DONE. THE DIRECTORS OF THESE ACCOMMODATION ENTRY COMPANIES SAID THAT THEY ARE JUST EMPLOYEES DRAWING MONTHLY SALARIES OF RS.2000/ - TO RS.3000/ - . THEY ALSO SAID THAT THEY ARE JUST THERE FOR SIGNING CHEQUES AND BALANCE SHEETS. THE DIRECTORS OF THESE ACCOMMODATION ENTRY COMPANIES SAID THAT THEY ARE JUST EMPLOYEES DRAWING MONTHLY SALARIES OF RS.2000/ - TO RS.3000/ - . THEY ALSO SAID THAT THEY ARE JUST THERE FOR SIGNING CHEQUES AND BALANCE SHEETS. 10 . JUST TO REITERATE, THE COMPANIES WHICH PROVIDED SHARE IN VESTMENT IN ASSES SEE COMPANY ARE: SL.NO . INVESTOR COMPANY PLACE ( DIRECTORS) SHARE APPLICATION SIGNED BY 1 M/S. SONY FINANCIAL SERVICES LTD DELHI YOGESH GUPTA SANDEEP GUPTA 2 M/S. AKI ORGANICS PVT. LTD DELHI YOGESH GUPTA SANDEEP GUPTA 3 M/S. CONTINENTAL FISCAL MANAGEMENT PVT. LTD KOLKATA CHANDRAMOHAN JHA SANTOSH KUMAR GUPTA 4 M/S. CENTAK DISTRIBUTORS PVT. LTD KOLKATA SANTOSH KUMAR GUPTA 5 M/S. KANUPRIYA COMMERCIAL PVT. LTD KOLKATA RAM CHANDER SHARMA 6 M/S. ORPAT COMMERCIAL PVT. LTD KOLKATA RAM CHANDER SHARMA 7 M S. J P ENGG CORP PVT. LTD KOLKATA BAIKUNTH NATH PANDEY 8 M/S. RAMESWAR RETAILS PVT. LTD KOLKATA BAIKUNTH NATH PANDEY 12 9 M S. PARIDHI FINVEST PVT. LTD KOLKATA AMIT AGARWAL 10 M/S. OMEGA VENTURES PVT. LTD KOLKATA ASHOK KUMAR SINGH AS CAN BE SEEN, THE KOLKATA BASED COMPANIES WHICH INVESTED IN ASSESSEE COMPANY ARE OPERATED BY SHRI. DEEPAK PATWARI, AN ACCOMMODATION ENTRY PROVIDER BY MAKING. SHELL COMPANIES WHOSE DIRECTORS ARE HIS LOWLY PAID EMPLOYEES. 11. IT WAS ALSO SEEN FROM THE STAT EMENTS OF THESE COMPANIES THAT THEY GET MONEY FROM VARIOUS BANK ACCOUNTS AND WERE TRANSFERRED TO ASSESSEE ACCOUNT WITHIN THE SAME DAY. THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET FIGURES OF THESE COMPANIES LOOK AS BELOW: S1.N O. INVESTOR COMPANY RETURNED INCOME P&L (FOR AY 2010 - 11) BALANCE SHEET (FOR AY 2010 - 11) 1 M/S. SONY FINANCIAL SERVICES LTD RS.56,000 (FOR AY 2008 - 09) INCOME SIDE (TOTAL) = RS.12,35,283 SOURCES OF FUNDS SIDE (TOTAL) = RS.11,53,29,727 2 M/S AKI ORGANICS PVT. LTD RS.56,972 (FOR AY 2008 - 09) INCOME SIDE (TOTAL) = RS.8,70,000 SOURCES OF FUNDS SIDE (TOTAL) = RS.108639994 3 M/S CONTINENTAL FISCAL MANAGEMENT PVT. LTD NIL (FOR AY 2008 - 09) INCOME SIDE (TOTAL)= RS.1,15,57,930 SOURCES OF FUNDS SIDE (TOTAL)= RS.40,28,95,480 4 M/S CENTAK DISTRIBUTORS PVT. LTD RS.22,671 (FOR AY 2009 - 10) INCOME SIDE (TOTAL)= RS.1,46,99,662 SOURCES OF FUNDS SIDE (TOTAL)= RS.43,73,34,298 5 M/S KANUPRIYA COMMERCIAL PVT. LTD RS.62,183 (FOR AY 2009 - 10) INCOME SIDE (TOTAL) = RS.12,35,283 SOURCES OF FUNDS SIDE (TOTAL) = RS.11,53,29,727 6 M/S ORPAT COMMERCIAL PVT. LTD RS.4,241 (FOR AY 2009 - 10) INCOME SIDE (TOTAL) = RS.17,99,50 0 SOURCES OF FUNDS SIDE (TOTAL) = RS.8,84,54,276 13 AS CAN BE SEEN ABOVE, THE RETURNED INCOME IS NEGLIGIBLE IN ALL THESE COMPANIES. THE BALANCE SHEET OF ALL THESE COMPANIES ARE BIG CORROBORATING THE FACT THAT THE DIRECTORS OF THESE COMPANIES, WHO ARE LOWLY PAID EMPLOYEES (RS 3000 - 4000 PER MONTH), AND WHO ARE NOT CREDIT WORTHY TO THIS EXTENT OF CRORES, ARE JUST A FRONT FOR PROVIDING ACCOMMODATION ENTRY IN THE FORM OF SHARE APPLICATION MONEY. 12. ASSESSEE COMPANY WAS AGAIN ASKED ABOUT THE SHARE APPLICATI ON MONEY AND ANY CONTACT/ COMMUNICATION THEY HAD WITH THE INVESTOR COMPANIES VIDE NOTICE DATED 02.03.2015. ASSESSEE COMPANY REPLIED VIDE LETTER DATED 09.03.2015 AS BELOW: '1. I AM SUBMITTING THE PHOTOCOPIES OF THE APPLICATIONS OF INVESTORS ALONG WITH THE O RIGINAL FOR VERIFICATION. 2.. THE INVESTING COMPANIES HAD INVESTED IN THE SHARES OF OUR COMPANY THOUGH OUR COMMON FRIEND SHII. RAJENDRA PRASAD SINGLA WHO IS A REPUTED INDUSTRIALIST IN GOA. 3 . THE FUNDS WERE ARRANGED BY SHRI. RAJENDRA PRASAD SINGLA. WE HAVE NO DIRECT COMMUNICATION WITH THE PARTIES. 4 . THE SHARE ISSUE WAS NOT A PUBLIC ISSUE AND HENCE THERE WAS NO PUBLIC COMMUNICATION INVITING PUBLIC TO INVEST IN OUR COMPANY. OUR COMPANY IS A PRIVATE LIMITED COMPANY AND CANNOT OFFER ITS SHARES TO THE PUBLIC EITHER T HROUGH 7 M/S J P ENGG CORP PVT. LTD RS.54,819 (FOR AY 2009 - 10) INCOME SIDE (TOTAL) = RS.9,61,93,760 SOURCES OF FUNDS SIDE (TOTAL) = RS.64,00,20,356 8 M/S RAMESWAR RETAILS PVT. LTD RS.2,360 (FOR. AY 2009 - 10) INCOME SIDE (TOTAL) = RS.10,28,02,814 SOURCES OF FUNDS SIDE (TOTAL) = RS.9,96,33,555 9 M/ S PARIDHI FINVEST PVT.LTD RS.78,135 (FOR AY 2009 - 10) INCOME SIDE (TOTAL) = RS.3,89,96,196 SOURCES OF FUNDS SIDE (TOTAL) = RS.50,62,99,085 10 M/S OMEGA VENTURES PVT. LTD RS.5,719 (FOR AY 2009 - 10). INCOME SIDE (TOTAL) = RS.32,52,468 SOURCES OF FUNDS SIDE (TOTAL) = RS.8,38,85,178 14 PROSPECTUS OR STATEMENT IN LIEU OF PROSPECTUS. SINCE WE ARE PRIVATE LIMITED COMPANY ANY ADVERTISEMENT INVITING THE PUBLIC TO INVEST IS PROHIBITED BY LAW. I AM SUBMITTING SEPARATELY ALL THE DOCUMENTS LIST IN THE SAID LETTER TO PROVE THE IDENTITY OF T HE INVESTORS AND GENUINENESS OF THE INVESTMENTS AND TRANSACTIONS...' IT WAS SEEN FROM THE ABOVE SUBMISSION THAT EVEN AFTER MULTIPLE OPPORTUNITIES, ASSESSEE IS STILL NOT ABLE TO PRODUCE THE PARTIES ASSESSEE IS STILL NOT ABLE TO GIVE ANY COMMUNICATION THEY H AD WITH THE PARTIES OTHER THAN A LATEST EXPLANATION THAT THE PARTIES WERE CONTACTED THROUGH A FAMILY FRIEND, SHRI. RAJENDRA PRASAD SINGLA. ASSESSEE IS STILL NOT ABLE TO GIVE CONTACT DETAILS OF THOSE PARTIES. ASSESSEE IS' STILL NOT ABLE TO GIVE ANY LATEST CONFIRMATION LETTER FROM THE INVESTOR COMPANIES. 13. ASSESSEE COMPANY WAS AGAIN GIVEN AN OPPORTUNITY TO EXPLAIN BY SUMMONING THE ASSESSEE COMPANY'S DIRECTOR, SHRI YURI ALEMAO U/S 131 OF THE INCOME TAX ACT, 196 1 AND RECORDING HIS STATEMENT. HE WAS AL SO CONFRONTED OF THE LATEST FACTS PASSED FROM DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION), KOLKATA DURING THE STATEMENT. THE STATEMENT IS GIVEN BELOW: '...STATEMENT RECORDED U/S 131 OF THE INCOME TAX ACT 196.1, OF SHRI YURI LENNON ALEMAO, SON OF JOAQUIM ALEMAO, DIRECTOR OF M/S PARADISE INLAND SHIPPING PVT. LTD, RESIDING AT CASA ALEMAO, CHADWADDO, VARCA, SALCETE, GOA, IN CONNECTION WITH THE ASSESSMENT PROCEEDINGS OF M/S PARADISE INLAND SHIPPING PVT. LTD, HEERA NIKETA N, 1ST FLOOR, COMBA, MARGAO IN THE OFFICE OF THE DCIT, C - 1, MARGAO ON 09/03/2015 AT 03.25PM. 1 . IDENTIFY YOURSELF. AN - S: I AM SHRI. YURI ALEMAO, S/O OF SHRI JOAQUIM ALEMAO, AGED 30 YRS, DIRECTOR OF M/S PARADISE INLAND SHIPPING PVT. LTD, RESIDING HOUSE NO. 150, CASA ALEMAO, CHADWADDDO, VARCA, SALCATE, GOA. MY CONTACT NUMBERS ARE 09552188899 AND 0832 2744461. 2 . PL . SUBMIT ANY PROOF IN RESPECT OF YOUR IDENTITY AND RESIDENTIAL ADDRESS 15 ANS: I AM SUBMITTING HEREWITH PHOTOCOPY OF MY ELECTION CARD BEARING # SL10280065: 3 . WHAT IS YOUR EDUCATIONAL QUALIFICATION? ANS: I AM A COMMERCIAL PILOT. I DID MY DIPLOMA IN AVIATION IN AUSTRALIA. 4 . ARE YOU AWARE ABOUT THE CONSEQUENCES OF GIVING FALSE STATEMENT UNDER OATH? ANS:. YES, I AM AWARE OF THE CONSEQUENCES. 5 . ARE YOU FILING YOUR RETURN OF INCOME? ANS: YES. MY PAN IS AKRPA9143M. I HAVE FILED MY RETURN OF INCOME TILL A.Y 2013 - 14. I AM NOT SURE IF I HAVE FILED RETURN FOR AY 2014 - 15. I AM GOVERNED BY SEC 5A OF THE I T ACT. 50% OF INCOME ,GOES TO MY SPOUSE SMT. VEOLLA DIAS. I GOT MARRIED IN JANUARY 2015. 6 . WHAT ARE YOUR SOURCES OF INCOME? ANS: I AM THE DIRECTOR OF M/S PARADISE INLAND SHIPPING PVT. LTD, HEERA NIKETAN, 1ST FLOOR, COMBA, MARGAO. MY BROTHER SHRI BRAZ ALEMAO IS ANOTHER DIRECTOR OF THE COMPANY. OUR COMPANY IS INTO TRANSPORTATION OF ORE THROUGH BARGES. OUR CLIENTS ARE M/S SESA GOA. AND M/S SESA RESOURCES. THE COMPANY OWNS 2 URGES. PAN OF THE COMPANY IS AAFCP2941R. 7 . TILL WHICH A.Y THE COMPANY HAS FILED THE RETURN OF INCOME? ANS: THE COMPANY HAS FILED THE RETURN OF INCOME TILL A.Y 2014 - 15. 8. WHEN WAS THE COMPANY INCORPORATED? ANS:THE COMPANY WAS INCORPORATED IN 19/12/2009. 9. FOR THE ASST. YEAR 2010 - 11, I.E., YEAR ENDING 31/03/2010, THE BALANCE SHEET SUBMITTED WITH THE INCOME TAX DEPARTMENT SHOWS THAT SHARE APPLICATION MONEY OF RS.3,80,00,000/ - (RS.3.8 CRORES) IS RECEIVED BY YOUR COMPANY FROM VARIOUS OTHER COMPANIES. DO YOU CONFIRM? YES, I DO CONFIRM. AS PER THE BALANCE SHEET SHOWN, M/S PARADISE INLAND SHIPPING PVT. LTD. HAS RECEIVED SHARE APPLICATION MONEY FROM THE FOLLOWING 10 COMPANIES AND THE SHARE APPLICATION MONEY TOTALED TO RS.3,80,00,000/ - . THE COMPANIES ARE: A ) M/S. SONY FINANCIAL SERVICES LTD RS. 40,00,000 B ) M/S. AKI ORGANICS PVT. LTD RS. 40,00,000 C ) CONTINENTAL FISCAL.MANAGEMENT PVT. LTD RS.30,00,000 D ) M/S CENTAK DISTRIBUTORS PVT. LTD RS.50,00,000 E ) M/S KANUPRIYA COMMERCIAL PVT. LTD RS.40,00,000 16 F ) M/S ORPAT COMMERCIAL PVT. LTD RS.25,00,000 G ) M/S J P ENGG CORP PVT. LTD RS.25,00,000 H ) M/S RAMESWAR RETAILS PVT. LTD RS.35,00,00 0 I ) M/S PARIDHI FINVEST PVT. LTD RS.60,00,000 J ) M/S OMEGA VENTURES PVT. LTD RS.35,00,000 10. WHO ARE THE D IRECTORS OF THE ABOVE COMPANIES? ANS: AS PER THE SUBMISSIONS, THE DETAILS ARE AS BELOW: SL.N O. INVESTOR COMPANY PLACE DIRECTORS) SHARE APPLICATION SIGNED BY 1 M/S. SONY FINANCIAL SERVICES LTD DELHI YOGESH GUPTA SANDEEP GUPTA 2 M/S. AKI ORGANICS PVT. LTD DELHI YOGESH GUPTA SANDEEP GUPTA 3 M/S. CONTINENTAL FISCAL MANAGEMENT PVT. LTD KOLKATA CHANDRAMOHAN JHA SANTOSHKUMAR GUPTA 4 M/S. CENTAK DISTRIBUTORS PVT. LTD KOLKATA SANTOSH KUMAR GUPTA 5 M/S.KANUPRIYA COMMERCIAL PVT. LTD KOLKATA RAMCHANDER SHARMA 6 M/S. ORPAT COMMERCIAL PVT. LTD KOLKATA RAM CHANDER SHARMA 7 M S. J P ENGG CORP PVT. LTD KOLKATA BAIKUNTH NATH PANDEY 8 M/S. RAMESWAR RETAILS PVT. LTD KOLKATA BAIKUNTH NATH PANDEY 9 M S. PARIDHI FINVEST PVT. LTD KOLKATA AMIT AGARWAL 10 M/S. OMEGA VENTURES PVT. LTD KOLKATA ASHOK KUMAR SINGH 11. PLS EXPLAIN WHERE THESE COMPANIES ARE LOCATED? ANS: SOME COMPANIES ARE LOCATED IN DELHI AND SOME ARE IN CALCUTTA AS PER OUR SUBMISSION. WITHOUT REFERRING TO THE LIST AND THE ADDRESSES OF THE COMPANIES, I AM UNABLE TO EXPLAIN THE LOCATIONS OF THESE COMPANIES. 17 12. DO YOU THE DIRECTORS OF THESE COMPANIES? NO, I DO NOT KNOW ANY OF THE DIRECTORS OF THESE 10 COMPANIES. 13. HAVE YOU EVER TALKED TO THE DIRECTORS OF THE ABOVE COMPANIES? NO. I HAVE NEVER TALKED TO THESE DIRECTORS EITHER THROUGH TELEPHONE OR ANY OTHER WAY. I HAVE NEVER VISITED DELHI/CALCUTTA REG A RDING THE SHARE APPLICATION MONEY. I HAVE NEVER EMAILED OR MADE ANY CORRESPONDENCE WITH ANY OF THESE DIRECTORS OF THE ABOVE MENTIONED COMPANIES. 14. WHEN DID THESE COMPANIES INVEST IN YOUR COMPANY? AS PER OUR BANK STATEMENT - HDFC, MARGAO ACCOUNT NO.00372320001690, - THE INVESTMENT FROM THE ABOVE COMPANIES CAME DURING DECEMBER 2009 TO JANUARY 2010. 15.HOW DID YOU COME TO KNOW THAT THE ABOVE COMPANIES ARE READY TO INVEST IN YOUR COMPANY? ANS: I, BEING THE DIRECTOR OF THE COMPANY, DISCUSSED WITH MR. RAJENDRA PRASAD SINGLA, A FAMILY FRIEND OF OURS THAT WE WOULD LIKE TO HAVE SOME INVESTORS FOR THE - COMPANY. HE AGREED THAT HE WOULD GET THE INVESTORS. THIS WAY THE ABOVE COMPANIES HAVE INVESTED I N OUR COMPANY. 16.DO YOU HAVE ANY BUSINESS DEALINGS WITH MR. RAJENDRA PRASAD SINGLA? ANS: NO. HE IS JUST A FAMILY FRIEND. 17.HOW DID THESE COMPANIES GIVE THEIR SHARE APPLICATIONS? DID THEY GIVE IN PERSON OR DID THEY GIVE BY POST? ANS: I CANNOT RECOLLECT. 18. WILL YOU BE ABLE TO PRODUCE THE ORIGINAL APPLICATION RECEIPT IF YOU ARE ASKED TO? ANS: I HAVE PIODUCED THE ORIGINAL APPLICATION IN FRONT OF YOU. 19 . HAVE YOU CONTACTED THESE COMPANIES RECENTLY? ANS: NO. I HAVE NOT CONTACTED THESE COMPANIES EVER. 20 . HAVE THE OTHER DIRECTOR OR ANY EMPLOYEE OF THE COMPANY HAS CONTACTED THESE INVESTOR COMPANIES? 18 ANS: APART FROM SHRI. RAJENDRA PRASAD SINGLA, NO ONE FROM OUR COMPANY IS IN CONTACT WITH THESE INVESTOR COMPANIES OR DIRECTOR. 21 IF YOU ARE ASKED TO PRODUCE THESE DIRECTORS OR COMPANIES, WILL YOU BE ABLE TO DO THAT? ANS: NO. I WILL NOT BE ABLE TO PRODUCE ANY OF THESE DIRECTORS. AS I HAVE ALREADY SUBMITTED, THESE SHARE APPLICATION MONEY HAS COME THRU' PROPER BANKING CHANNELS. 22. YOU ARE HEREBY SHOWN A STATEMENT (ANNEXURE - A) OF SHRI. SANTOSH KUMAR GUPTA, DIRECTOR OF M/S CONTINENTAL FISCAL MANAGEMENT. LTD IN FRONT OF DDIT, (INV), UNIT - II(3), KOLKATA, SAYING AS BELOW: I, SANTOSH KUMAR GUPTA RESIDENT OF 27/1, T.N. MUKHERJEE ROAD, HOOGHLY - 712245 AND THE THEN DIRECTOR OF THE COMPANY M/S. CONTINENTAL FISCAL MANAGEMENT LTD DURING THE F.Y. 2008 - 09 WAS JUST A DUMMY DIRECTOR IN THIS COMPANY WHICH WAS OPERATED - AND MANAGED BY MR. DEEPAK PATWARI. I WAS JUST A PAID EMPLOYEE OF MR. DEE PAK PATWARI AND FOR SIGNING CHEQUE AND BALANCE SHEET I GOT A MONTHLY REMUNERATION OF RS.2,000/ - TO RS.3,000/ - . THE DETAILS OF THE COMPANY AND THEIR ACTIVITIES CAN ONLY BE PROVIDED BY MR. DEEPAK PATWARI. DO YOU HAVE ANYTHING TO SAY? ANS: NO. I DO NOT HAVE ANYTHING TO SAY. I DO NOT KNOW THE PERSON ALSO. 23 . IN THE STATEMENT SHOWN TO YOU RIGHT NOW, THE DIRECTOR OF THE COMPANY HAS STATED THAT HE IS JUST A DUMMY DIRECTOR IN M/S CONTINENTAL FISCAL MANAGEMENT LTD AND GETS PAID A MONTHLY REMUNERATION OF AR OUND. RS. 2000 TO RS. 3000 FOR SIGNING CHEQUE AND BALANCE SHEET. HE IS A PAID EMPLOYEE OF MR. DEEPAK PATWARI WHO IS MANAGING THE COMPANY M/S CONTINENTAL FISCAL MANAGEMENT LTD. DO YOU CONFIRM? ANS: YES. I HAVE READ THE STATEMENT OF SHRI. SANTOSH KUMAR GUPTA DIRECTOR OF M/S CONTINENTAL FISCAL MANAGEMENT AND I HAVE GONE THRU THE CONTENTS OF THE STATEMENT. I DO NOT KNOW THE PERSON ALSO. 24 . YOU ARE HEREBY SHOWN A STATEMENT (ANNEXURE - B) OF SHRI. BAIKUNT NATH PANDEY DIRECTOR OF M/S JP 19 ENGINEERING CORPORATION PVT. LTD . IN FRONT OF DDIT, (INV), UNIT - II(3), KOLKATA, SAYING AS BELOW: I, BAIKUNTH NATH PANDEY RESIDENT OF 66, SALKIA SCHOOL ROAD, 5TH FLOOR, BLOCK - B, KOLKATA - 711106 AS THEN THE DIRECTOR IN THE FOLLOWING COMPANIES DURING THE F.Y. 2009 - 10. 1 . M/S. AFSONS (INDIA) PVT. LTD 2 . M/S. J.P. ENGINEERING CORPN. PVT. LTD. WAS JUST A DUMMY DIRECTOR IN THOSE COMPANIES WHICH WERE OPERATED AND MANAGED BY MR. DEEPAK PATWARI. I WAS JUST A PAID EMPLOYEE OF MR. DEEPAK PATWARI AND FOR SIGNING CHEQUE AND BALANCE SHEET. I USED TO GET A MONTHLY REMUNERATION OF RS.2,000/ - TO RS.3,000/ - . THE DETAILS OF THE COMPANIES AND THEIR ACTIVITIES CAN ONLY BE P ROVIDED BY MR. DEEPAK PATWARI. DO YOU HAVE ANYTHING TO SAY? ANS: NO. I DO NOT HAVE ANYTHING TO SAY. I DO NOT KNOW THE PERSON ALSO. 25 . IN THE STATEMENT SHOWN TO YOU RIGHT NOW, SHRI. BAIKUNT NATH PANDEY, THE DIRECTOR OF THE COMPANY HAS STATED THAT HE IS JUST A DUMMY DIRECTOR IN M/S JP ENGINEERING CORPORATION PVT. LTD. A ND GETS PAID A MONTHLY REMUNERATION OF AROUND RS.2000 TO RS.3000 FOR SIGNING CHEQUE AND BALANCE SHEET. HE IS A PAID EMPLOYEE OF MR. DEEPAK PATWARI WHO IS MANAGING THE COMPANY M/S JP ENGINEERING CORPORATION PVT. LTD. DO YOU CONFIRM? ANS: YES. I HAVE READ TH E STATEMENT OF SHRI. BAIKUNTH NATH PANDEY, THE DIRECTOR OF M/S JP ENGINEERING CORPORATION PVT. LTD. AND I HAVE GONE THRU THE CONTENTS OF THE STATEMENT. I DO NOT KNOW THE PERSON ALSO. 26 . YOU ARE HEREBY SHOWN A STATEMENT (ANNEXURE - C) OF SHRI. AMIT AGARWAL DIRECTOR OF M/S ABEX INFOCOM PVT. LTD. IN FRONT OF DDIT, (INV), UNIT - II(3), KOLKATA, SAYING AS BELOW: I, AMIT AGARWAL, THE RESIDENT OF 29A, WESTON STREET, 3RD FLOOR, KOLKATA - 700012 AND THE THEN DIRECTOR OF THE COMPANY M/S. ABEX INFOCOM PVT. LTD. DURING THE F.Y. 2007 - 08 WAS JUST A DUMMY DIRECTOR IN THE COMPANY WHICH WAS OPERATED AND MANAGED BY MR. DEEPAK PATWARI, I WAS JUST A PAID EMPLOYEE OF MR. DEEPAK PATWARI AND FOR SIGNING CHEQUE AND BALANCE 20 SHEET I USED TO GET A MONTHLY REMUNERATION OF RS.2,00 0/ - TO RS.3,000/ - . THE DETAILS OF THE COMPANY AND THEIR ACTIVITIES CAN ONLY BE PROVIDED BY MR.DEEPAK PATWARI. DO YOU HAVE ANYTHING TO SAY? ANS: NO. I DO NOT HAVE ANYTHING TO SAY. I DO NOT KNOW THE PERSON ALSO. 27 . IN THE STATEMENT SHOWN TO YOU RIGHT NOW, SHRI. AMIT AGARWAL HAS STATED THAT HE IS JUST A DUMMY DIRECTOR IN M/S ABEX INFOCOM PVT. LTD. AND GETS PAID A MONTHLY REMUNERATION OF AROUND RS. 2000 TO RS.3000 FOR SIGNING CHEQUE AND BALANCE SHEET. HE IS A PAID E MPL OYEE OF MR. DEEPAK PATWARI. DO YOU CONFIRM? ANS: YES. I HAVE READ THE STATEMENT OF SHRI. AMIT AGARWAT AND I HAVE GONE THRU THE CONTENTS OF THE STATEMENT. I DO NOT KNOW THE PERSON ALSO. 28. YOU ARE HEREBY SHOWN A STATEMENT (ANNEXURE - D) OF SHRI. DEEPAK PATWARI AT THE AAYAKAR BHAWAN, KOLKATA ON 27.02.2013 SAYING THAT 'WE ARE OPERATING COMPANIES AT 29A WESTON STREET, 3RD FLOOR, ROOM NO. C - 2, KOLKATA, AT 1B BLACKBURN LANE, 4TH FLOOR, KOLKATA - 12, AT 33 CR AVENUE, KOLKATA, AT - 211/ 1/ SARAT CHATTERJEE ROAD, AT 27 BARBOURNE ROAD, KOLKATA, AT 43A NARSINGH AVENUE, AT 4TH FLOOR, 12 BHARPARA ROAD,. AT 4TH FLOOR, HOWRAH, AT 65B GURU GARDEN ROAD, AT 171/ 12 RAY BAHADUR ROAD, AT 12 KHUDIRAM BOSE ROAD AND 8 LAKE TOWN, BLOCK B NIKITA TOWER, KOLKATA. THE LIST OF COMPANIES AND THEIR ADDRESSES ARE AS FOLLOWS: M/ S. J P ENGG CORP PVT. LTD M/ S .CENTAK DISTRIBUTORS PVT. LTD M/ S .PARIDHI FINVEST PVT. LTD M/ S .KANUPRIYA COMMERCIAL PVT. LTD M/ S . CONTINENTAL FISCAL MANAGEMENT PVT. LTD THESE ABOVE COMPANIES ARE FULLY MANAGED AND OPERATED BY ME AND DILIP AGARWAL BY PLACING VARIOUS DIRECTORS IN PLACE. I ALONGWITH DILIP AGARWAL ARE THE BRAIN BEHIND THESE COMPANIES AND ITS OPERATIONS. THE ABOVE COMPANIES HAVE PROVIDED ACCOMMODATION ENTRY IN THE FORM OF CAPITAL AND SHARE PREMIUM TO M/ S RASHMI CEMENT LTD. ...AND OTHER RASHMI COMPANIES ON VARIOUS DATES BY CHARGING COMMISSION @ 25 PAISE FOR RS.100 DURING FY 2007 - 08 TO 2010 - 11....' 21 HAVE YOU READ THE STATEMENT AND DO YOU HAVE ANYTHING TO SAY? ANS: YES. IHAVE READ THE STATEMENT AND I DO NOT HAVE ANYTHING TO SAY. I DO NOT KNOW ANYTHING ABOUT THE CONTENT OF THE STATEMENT. 29. YOU ARE HEREBY SHOWN A SWORN STATEMENT (ANNEXURE - E) OF SHRI. DEEPAK PATWARI AT THE AAYAKAR BHAWAN, KOLKATA ON 05.06.2013 S AYING THAT SOME COMPANIES HE IS OPERATING ARE AS BELOW: M/S. J P ENGG CORP PVT.LTD M/S. CENTAK DISTRIBUTORS PVT. LTD M/S. PARIDHI FINVEST PVT.LTD M/S. KANUPRIYA COMMERCIAL PVT. LTD M/S. CONTINENTAL FIS CAL MANAGEMENT PVT. LTD DO YOU CONFIRM THAT YOU HAVE SEEN THE STATEMENT? ANS: YES. I HAVE SEEN THE SWORN STATEMENT SHOWN TO ME. 30 . IN THE ABOVE STATEMENT OF 05.06.2013, SHRI. DEEPAK PATWARI SAID THAT '...IT MUST ALSO BE STATED THAT THE TRANSACTIONS AFFECTED THRU' THE ABOVE COMPANIES DURING FY 2007 - 08, FY 2008 - 09, FY 2009 10, FY 2010 - 11, FY 2011 - 12 WERE ALSO ACCOMMODATION ENTRIES OF SHARE CAPITAL AND SHARE PREMIUM...' HAVE YOU READ THE STATEMENT AND DO YOU HAVE ANYTHING TO SAY? ANS: YES. I HAVE READ THE STATEMENT AND I DO NOT HAVE ANYTHING TO SAY. I DO NOT KNOW ANYTHING ABOUT THE CONTENT OF THE STATEMENT. 31 . IN THE ABOVE STATEMENT OF 05.06.2013, SHRI. DEEPAK PATWARI SAID THAT '...THE CASH RECEIVED FROM RASHMI GROUP WAS DEPOSITED IN THE VARIOUS ACCOUNTS OF OTHER ENTRY OPERATORS SUCH AS I AM SUBMITTING YOU THE DETAILS OF CASH TRAILS IN RESPECT OF SOME OF THE TRANSACTIONS TO COLLABORATE MY STATEMENT. HOWEVER, DUE TO PAUCITY OF TIME I COULD NOT FURNISH CASH TRAILS IN RESPECT OF ALL THE TRANSACTIONS. THE SAID CASH TRAILS ARE PREPARED RANDOMLY JUST TO DEMONSTRATE AND ILLUSTRATE THE POINT THAT HOW THE AVAILABILITY OF FUNDS WERE MANIPULATED BY DEPOSITING CASH IN VARIOUS BANK ACCOUNTS ON THE SAME DAY IMMEDIATE PRIOR TO ISSUING THE CHEQUES IN SUCH BANK ACCOUNTS, CASH AMOUNTS WERE CREDITED AND IMMEDIATELY ENTIRE AMOUNTS WERE WITHDRAWN THROUGH ISSUANCE OF SUCH CHEQUES WHICH CULMINATED INTO SHARE CAPITAL AND SHARE PREMIUM IN THE 22 HANDS OF R ASHMI GROUP. THE SAME MODUS OPERAND IS FOLLOWED IN RESPECT OF ALL OTHER TRANSACTIONS ALSO...' HAVE YOU READ THE STATEMENT AND DO YOU HAVE ANYTHING TO SAY? ANS: YES. I HAVE READ THE STATEMENT AND I DO NOT HAVE ANYTHING TO SAY. WE HAVE RECEIVED THE SHARE APPLICATION PREMIUM AMOUNT T HROUGH PROPER BANKING CHANNELS. 32 . SO THE ABOVE INVESTOR COMPANIES WERE MANAGED BY SHRI. DEEPAK PATWARI THROUGH HIS EMPLOYEES AND PROVIDED ACCOMMODATION ENTRY BY INJECTING CASH IN VARIOUS BANK ACCOUNTS AND THEN THE AMOUNTS WERE WI THDRAWN THROUGH CHEQUES. DO YOU STILL SAY THAT YOUR COMPANY DID NOT GET ANY ACCOMMODATION ENTRY AS DETAILED ABOVE? ANS: NO. MY COMPANY RECEIVED THE AMOUNTS FROM THE ABOVE COMPANIES THRU' PROPER BANKING CHANNELS. 33 . DO YOU WANT TO SAY ANYTHING ELSE? ANS: NO....' 14 . AFTER THE ABOVE STATEMENT, ASSESSEE OBJECTED TO THE REASONS RECORDED VIDE LETTER DATED 16.03.2015. ASSESSEE'S OBJECTIONS, THOUGH AT THE END OF PROCEEDINGS, WERE REJECTED VIA A SPEAKING ORDER DATED 20.03.2014. 15 . ON 13/03/2015, THIS OFFICE ISSUED A LETTER TO THE ASSESSEE, REQUESTING TO PRODUCE SHRI. RAJENDRAPRASAD SINGLA, THROUGH WHOM THE ASSESSEE CLAIMED TO HAVE ARRANGED THE INVESTMENT FROM OTHER COMPANIES. THE ASSESSEE SUBMITTED A REPLY ON 16/03/2015 AS UNDER: '. ..WE ARE IN RECEIPT OF YOUR LETTER DATED 13/ 03/2015 ASKING US TO PRODUCE MR. RAJENDRAPRASAD SINGLA ON 16/ 03/2015. WE REGRET TO INFORM YOU THAT SHRI. RAJENDRAPRASAD SINGLA EXPIRED ON 26/03/2013. HE WAS RESIDING AT MARGAO AND HIS DETAILED ADDRESS IS AS UNDER: H. NO. 235/ 1, KARLEVILLA, PULWADO, BENAULIM ROAD, MARGAO, SALCETE GOA 403601 LATE, RAJENDRAPRASAD SINGLA IS ASSESSED TO TAX AT CIRCLE - 1, MARGAO GOA...' HENCE ASSESSEE CLAIMED THAT THE MIDDLEMAN EXPIRED IN 2013. THE ASSESSEE HAD SAID VIDE HIS LETTER DATED 09.03.2015 THAT THE INVESTING COMPANIES HAD INVESTED IN 23 THE SHARES OF THE COMPANY THROUGH THEIR COMMON FRIEND SHRI. RAJENDRAPRASAD SINGLA. DURING THE STATEMENT ON 09.03.2015, THE DIRECTOR YURI ALEMAO SAID THAT APART FROM SHRI. RAJENDRAPRASAD SINGLA, NO ONE FROM THE COMPANY WAS IN CONTACT WITH THESE INVESTOR COMPANIES OR DIRECTORS. ALSO, HE, BEING THE DIRECTOR OF THE COMPANY, DISCUSSED WITH MR. RAJENDRAPRASAD SINGLA, A FAMILY FRIEND THAT THEY WOULD LIKE TO HAVE SOME IN VESTORS FOR THE C OMPANY AND SHRI. SINGLA AGREED THAT HE WOULD GET THE INVESTORS. HOWEVER, DURING THE ASSESSMENT OF A.Y. 11 - 12, WHEN THIS ISSUE WAS FIRST IDENTIFIED, ASSESSEE HAD SAID ABOUT THE SHARE APPLICATION MONEY VIDE LETTER DATED 05.12.2013, AS BELOW: '...THE PROMOTERS OF PARADISE INLAND SHIPPING PVT. LTD. BELONG TO. A BUSINESS FAMILY OF CONSIDERABLE REPUTE. THE GOODWILL AND CREDIBILITY IS ACKNOWLEDGED IN THE BUSINESS CIRCLES. THE INVESTOR COMPANIES HAD DIRECTLY APPROACHED US DURING THE MINING BOOM IN GOA. THEY WISHED TO PARTICIPATE IN THE MINING GROWTH AND AS SUCH WERE EAGER TO INVEST IN OUR COMPANY. THE INVESTORS HAVE THEN SENT US SHARE APPLICATIONS AND THE APPLICATION MONEY WAS DULY REMITTED INTO OUR BANK ACCOUNT...' (EMPHASIS SUPPLIED) IRONICALLY THIS SUPPOSED MIDDLEMAN WAS NEVER MENTIONED IN THAT REPLY. THE PRESENT CLAIM, WHICH IS NOT VERIFIABLE SINCE THE SUPPOSED MIDDLEMAN HAS EXPIRED, IS SUBMITTED AFTER BEING GIVEN MULTIPLE OPPORTUNITIES FOR OVER A YEAR. ASSESSEE'S VERSION OF ALSO CHA NGED WITH EVERY SUBMISSION. 16. AS CAN BE SEEN, ASSESSEE WAS CONFRONTED OF THESE EVIDENCES GIVEN OPPORTUNITY OF BEING HEARD AND, ASSESSEE DID NOT KNOW ANY OF THE DIRECTORS OF THESE COMPANIES. ASSESSEE SAID HE WILL NOT BE ABLE TO PRODUCE THESE DIRECTORS. ASSESSEE NEVER TALKED COMMUNICATED WITH THESE COMPANIES EITHER THRU' EMAIL OR TELEPHONE OR POST. ASSESSEE SAYS ONE SHRI. RAJENDRA PRASAD SINGLA, WHO IS A FAMILY FRIEND, GOT THESE INVESTORS BUT THE ASSESSEE COMPANY DOESN'T HAVE ANY BUSINESS DEALINGS WITH SH RI. SINGLA TOO. THE PRESENT CLAIM IS NOT VERIFIABLE SINCE THE SUPPOSED MIDDLEMAN, SHRI. SINGLA HAS EXPIRED. IT CAME TO LIGHT WHEN THE ASSESSEE WAS ASKED TO PRODUCE THE MIDDLEMAN. THIS LATEST EXPLANATION IS 24 GIVEN AFTER 1 YEAR OF MULTIPLE OPPORTUNITIES ASKING ABOUT HOW THE INVESTORS CAME TO KNOW ABOUT THE SHARE ISSUE. ASSESSEE DOESN'T HAVE THE ACKNOWLEDGEMENT OF ORIGINAL APPLICATION RECEIPTS EITHER BY POST OR SOME OTHER COMMUNICATION. NO ADVERTISEMENT OR COMMUNICATION WAS DONE VIAMEDIA TO LET I NVESTORS K NOW ABOUT THE SHARE ISSUE. ASSESSEE DOESN'T HAVE ANY EXPLANATION ABOUT THE STATEMENTS GIVEN BY SHRI. DEEPAK PATWARI, THE OPERATOR OF INVESTOR COMPANIES WHO GAVE IN STATEMENT THAT HE IS AN ACCOMMODATION ENTRY OPERATOR WHO RECEIVES CASH FROM CUSTOMERS AND ROUTE IT THRU DIFFERENT BANK ACCOUNTS AND AT LAST ROUTE IT TO CUSTOMER COMPANIES BACK AS SHARE APPLICATION MONEY ETC. ASSESSEE DOESN'T HAVE ANY EXPLANATION ABOUT THE STATEMENTS GIVEN BY T HE DIRECTORS OF THE INVESTOR COMPANIES WHO SAID THAT THEY ARE JUST LOWLY PAID EMPLOYEES SIGNING ON CHEQUES AND DRAFTS' ON BEHALF OF SHRI. DEEPAK PATWARI. ASSESSEE HAD BEEN GIVEN MULTIPLE OPPORTUNITIES DURING ASSESSMENT TO PRODUCE THE DIRECTORS OR ANY COMMUNICATION THEY HAD WITH THESE COMPANIES. THEY WERE ASKED TO - GET A CONFIRMATION FROM THESE COMPANIES. BUT THE ASSESSEE DID NOT PRODUCE THOSE PARTIES ASSESSEE COULD NOT GIVE THE CONTACT DETAILS OTHER THAN ADDRESSES OF THOSE PARTIES. COMPANIES WERE FOUND TO BE NON - EXISTENT IN THOSE ADDRESSES AS VERIFIED BY DDIT(INV), KOLKATA AND DDIT(INV), NEW DELHI. NO COMMUNICATION WITH THE PARTIES WERE GIVEN NO EXPLANATION WAS OFFERED HOW THE COMPANIES CAME TO KNOW ABOUT THE SHARE ISS UE. THE LATEST EXPLANATION OF COMMUNICATION VIA A FAMILY FRIEND IS GIVEN AFTER 1 YEAR OF ASKING MULTIPLE TIMES HOW THE INVESTOR COMPANIES CAME TO KNOW ABOUT THIS AND THE CLAIM IS NOT VERIFIABLE SINCE THE SUPPOSED MIDDLEMAN HAS EXPIRED. NO NEWSPAPER ADVERTISEMENT, ETC. WHICH PUBLICIZED THE SHARE ISSUE WAS GIVEN THE ORIGINAL RECEIPT OF APPLICATION OF THESE COMPANIES FOR SHARE ALLOCATION WAS NOT GIVEN EVEN AFTER MULTIPLE OPPORTUNITIES ASSESSEE COULD ONLY PROVIDE PUBLIC DOCUMENTS AVAILABLE AT MINISTRY OF CORPORATE WEBSITE AND NO ORIGINAL CONFIRMATION FROM ASSESSEE. 25 ASSESSEE COULD NOT EVEN GET A SINGLE ORIGINAL COMMUNICATION FROM THE PARTIES OTHER THAN THE SHARE APPLICATION FORM. ALSO, THE DIRECTORS OF THE INVESTOR COMPANIES SAID THAT THEY ARE JUST LOWLY PAID EMPLOYEES OF SHRI. DEEPAK PATWARI SIGNING ON CHEQUES AND DRAFTS. SHRI. DEEPAK PATWARI, THE OPERATOR OF THESE INVESTOR COMPANIES GAVE IN STATEMENT THAT HE IS AN ACCOMMODATION ENTRY OPERATOR WHO RECEIVES CASH FROM CUSTOMERS WHO ROUTE IT THRU DIFFE RENT BANK ACCOUNTS AND AT LAST ROUTE IT TO CUSTOMER COMPANIES BACK AS SHARE APPLICATION MONEY AND GETS A COMMISSION OF RS. 25 PAISE FOR EVERY 100 RUPEES. ASSESSEE WAS ALSO GIVEN A MULTITUDE OF OPPORTUNITIES TO EXPLAIN THE TRANSACTION. 17. HENCE THE EXPLANA TION FOR SUM FOUND CREDITED IN THE BOOKS OF THE ASSESSEE COMPANY FOUND AS NOT SATISFACTORY. THE SUM CREDITED IS ADDED UNDER SECTION 68 WHICH READS AS BELOW: 'CASH CREDITS. 68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING] OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED T O INCOME - TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR' THE PRESENT ASSESSMENT ORDER ALSO DERIVES STRENGTH FROM THE FOLLOWING PROVISO INSERTED IN SECTION 68 BY THE FINANCE ACT, 2012, W.E.F. 1 - 4 - 2013. 'PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY , (NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED) AND THE SUM SO CREDITED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EXPLANATION OFFERED BY SUCH ASSESSEE - COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS (A) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUCH CREDIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALSO OFFERS AN EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED; AND 26 (B) SUCH EXPLANATION IN THE OPINION OF THE ASSESSING OFFICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY' 18. IN THIS BACKGROUND THE SHARE APPLICATION PREMIUM RECEIVED BY ASSESSEE COMPANY TO THE TUNE OF RS. 3.8 CRORES IS TAKEN AS UNEXPLAINED CASH CREDIT SINCE THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY AS DISCUSSED.' 6. THE ASSESEE FILED APPEAL AGAINST THIS ORDER OF THE AO TO CIT(A) AND SUBMITTED AS UNDER VIDE WRITTEN SUBMISSION DATED 29/4/2015 'YOUR APPELLANT IS A PRIVATE LIMITED COMPANY CARRYING ON THE BUSINESS OF TRANSPORTATION OF IRON - ORE BY MEANS OF BARGES SINCE 19TH DECEMBER 2009. A NOTICE U/S 148 DATED 14.03.2014 WAS ISSUED REQUIRING YOUR APPELLANT TO FILE THE RETURN OF INCOME. IN RESPONSE TO THE SAID NOTICE A LETTER DATED 05.04.2014 WAS SUBMITTED STATING THEREIN THE ORIGINAL RETURN OF INCOME FILED ON 27.09.2010 MAY PLEASE BE TREATED AS FILED IN. RESPONSE TO NOTICE U/S 148 DATED 14.03.2014. A LETTER WAS SUBMITTED ON 05.04.2014 SEEKING THE REASONS R ECORDED FOR ISSUE OF NOTICE U/S 148. AFTER MORE THAN THREE MONTHS THE LEARNED ACIT BY LETTER DATED 09.07.2014 WITH AN ANNEXURE PROVIDED THE REASONS FOR REOPENING THE ASSESSMENT. THE SUM AND SUBSTANCE OF THE ISSUE OF NOTICE AS STATED IN ANNEXURE A TO THE LE TTER. DATED 09.07.2014 WAS TO VERIFY THE GENUINENESS AND THE CAPABILITY OF THE COMPANIES WHO INVESTED IN SHARE CAPITAL OF YOUR APPELLANT COMPANY. THE NOTICE U/S 143(2) DATED 09.07.2014 WAS ISSUED ASKING YOUR APPELLANT TO APPEAR ON 22.07.2014 WHICH WAS COMPLIED. A SUMMONS U/S 131 DATED 02.03.2015 WAS ISSUED ASKING YOUR APPELLANT'S DIRECTOR SHRI. YURI ALEMAO TO APPEAR IN PERSON ON FRIDAY 6TH OF MARCH 2015 WHICH WAS A PUBLIC HOLIDAY (HOLI). SHRI. YURI ALEMAO WAS INFORMED OVER THE TELEPHONE ON 9TH OF MARCH 2015 CALLING HIM TO APPEAR BEFORE THE ASSESSING OFFICER ON THAT DAY ITSELF. A STATEMENT OF SHRI YURI ALEMAO WAS RECORDED ON THAT DAY I.E. THE 9TH MARCH, 2015 BETWEEN 4.30 P.M TO 8.30 P.M. HENCE THE STATEMENT RECO RDED WITHOUT ANY VALID NOTICE U/S 131 HAS NO EVIDENTIARY VALUE. YOUR APPELLANT RELIES ON THE SUPREME COURT JUDGMENT IN THE CASE OF CIT, SALEM VS S. KADAR KHAN, 352 ITR 481 (SC) DATED 29.09.2012. THE JUDGMENT OF MADRAS HIGH COURT IN 27 THE CASE OF CIT, SALEM V S S. KADAR KHAN 300 ITR 157 (MAD) WAS AFFIRMED. THE DETAILS OF INVESTMENT ARE AS UNDER: S . NO NAME OF THE INVESTOR AMOUNT CH .NO BANK DATE NO. O F SHARES 1 SONY FINANCIAL SERVICES LTD. 40,00,000 RTGS DEUTSCHE BANK,K C MARG, NEW DELHI 15/12/200 9 40,000 2 AKI ORGANICS PRIVATE LIMITED. 40,00,000 RTGS THE BANK OF RAJASTHAN LTD, KAROL. BAGH, NEV DELHI 12.12.2009 40,000 3 CONTINENTAL DISTRIBUTORS PRIVATE LIMITED 30,00,000 000270 HDFC BANK, STEPHEN HOUSE, KOLKATA 07.01.201 0 30,000. 00 4 CENTAK DISTRIBUT ORS PRIVATE LIMITED 50,00,000. 00 000258 HDFC BANK, STEPHEN HOUSE, KOLKATA 01.01.201 0 50,000. 00 5 KANUPRIYA COMMERCIAL PRIVATE LIMITED 40,00,000 . 691478 HDFC BANK, GC AVENUE, KOLKATA 10.12.200 9 40,000. 00 6 ORPAT COMMERCIAL PRIVATE LIMITED 25,00,000. 00 RTGS IDBI BANK, - BRABOURNE , KOLKATA 18.12.200 9 25,000. 00 . 7 JP ENGINEERING CORP PRIVATE LIMITED 25,00,000. 00 000174 HDFC BANK, STEPHEN HOUSE, KOLKATA 19.12.200 9 25,000. 00 8 RAMESWAR RETAILS PRIVATE LIMITED 35,00,000 RTGS ORIENTAL BANK OF COMMERCE ,RN MUKHARJEE , KOLKATA 18.12.200 9 35,000.0 0 9 PARIDHI FINVEST PRIVATE LIMITED 60,00,000.00 000264 HDFCBANK, STEPHEN HOUSE, KOLKATA 10.12.2009 60,000.00 10 OMEGA VENTURES PRIVATE. LTD. 35,00,000.00 612764 HDFCBANK, GC AVENUE, KOLKATA 21.12.2009 35,000.00 28 NO NOTICE U/S 143(2) OR 142(1) WAS ISSUED AFTER 22ND JULY 2014 AND TILL THE ORDER U/S 143(3) R.W 147 WAS PASSED ON BY THE AO ON 25.03.2015. ON 9TH MARCH 2015 YOUR APPELLANT'S CA SENIOR CHARTERED ACCOUNTANT SHRI R. K. PIKALE WAS NOT ALLOWED TO ARGUE THE MATTER BEFORE THE LEARNED ACIT. HENCE NO ASSESSMENT PROCEEDINGS AS SUCH HAVE TAKEN PLACE, NO CLARIFICATION WAS SOUGHT AND NO ASSESSMENT PROCEEDINGS HAVE TAKEN PLACE BETWEEN 22 ND JULY 2014 AND 25TH MARCH 2015. ASSESSMENT HAS BEEN FINALIZED WITH A PRECONCEIVED NOTION AND WITHOUT GIVING YOUR APPELLANT A PROPER OPPORTUNITY TO REPRESENT THE CASE. THE ASSESSMENT ORDER IS THEREFORE VITIATED BEING MALICIOUS AND AGAINST PRINCIPLES OF JUSTICE. ON 9TH MARCH YOUR APPELLANT HAD SUBMIT TED 550 PAGES PAPER BOOK CONTAINING ALL THE DOCUMENTS RELATING TO THE 10 INVESTOR COMPANIES. THE LEARNED ACIT HAS NOT SOUGHT ANY CLARIFICATION ON THE DOCUMENTS SUBMITTED. IN THE 29 PAGE ASSESSMENT ORDER NOT A WORD IS SAID ABOUT THE DOCUMENTS SUBMITTED BY YOUR APPELLANT ON 9 TH MARCH 2015. THE LEARNED AO ALSO DOES NOT SAY THAT THE COMPANIES WHO SUBSCRIBED IN TO THE SHARE CAPITAL OF YOUR APPELLANT COMPANY ARE NON - EXISTENT OR BOGUS OR THEY HAVE NOT INVESTED ANY FUNDS IN THE SHARES OF YOUR APPELLANT'S COMPANY. UNDER THE INCOME TAX ACT, THE DIRECTORS, SHARE HOLDERS AND THE COMPANY HAVE A SEPARATE STATUS. A PRIVATE COMPANY CANNOT SEEK SHARE CAPITAL FROM PUBLIC BY ADVERTISING IN THE NEWSPAPER. NONE OF THE STATEMENTS RECORDED AT CALCUTTA HAVE POINTED OUT ANY FUNDS F LOWING OUT OF THIS COMPANY TO THE INVESTOR COMPANIES. UNDER THE COMPANIES ACT, DIRECTORS OF THE COMPANY NEED NOT BE THE SHAREHOLDERS OF THE COMPANIES. YOUR APPELLANT VIDE LETTER DATED 10TH MARCH 2015 SOUGHT THE COPY OF THE STATEMENT OF ONE OF THE DIRECTORS RECORDED ON 9TH MARCH 2015 WHICH WAS PROVIDED AFTER 14 DAYS ON 24TH MARCH 2015. HOWEVER, WITHOUT WAITING FOR OUR RESPONSE MUCH LESS APPLYING HIS MIND COMPREHENSIVELY ON THE SAME, ON THE NEXT DAY ITSELF THE AO REJECTED IT, DREW ADVERSE CONCLUSIONS AGAINST YOUR APPELLANT AND ISSUED THE ASSESSMENT ORDER WITHOUT GIVING ADEQUATE OPPORTUNITY TO CLARIFY OR REBUT SOME VAGUE QUESTIONS RAISED BY HIM, THUS ACTING BEYOND THE SCOPE OF THE PROVISIONS OF THE ACT AND LAW. 29 YOUR APPELLANT VIDE LETTER DATED 16.03.2015 HAD REMINDED THE LEARNED AO TO PROVIDE THE COPIES OF STATEMENTS OF SOME PERSONS ALLEGEDLY RECORDED AT KOLKATA AND BEING REFERRED TO BY HIM. WE ALSO REQUESTED THE LEARNED AO TO ARRANGE FOR THE CROSS EXAMINATION OF THE SAID PERSONS PARTICULARLY SHRI DEEPAK PATWA RI, SHRI. AMIT AGARWAL AND SHRI. DILIP AGARWAL. THIS FAIR REQUEST WAS ALSO SUMMARILY REJECTED, THUS DENYING NATURAL JUSTICE. IT IS AN ESTABLISHED PRINCIPLE THAT IF SHARE APPLICATION MONEY IS RECEIVED BY YOUR APPELLANT'S COMPANY FROM SOME ALLEGEDLY BOGUS SH AREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT WAS FREE TO REOPEN THOSE INVESTING INDIVIDUALS/COMPANIES ASSESSMENTS IN ACCORDANCE WITH THE LAW. HOWEVER, IN NO CASE THE AMOUNT OF SHARE MONEY RECEIVED CAN BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF THE ASSESSEE COMPANY. THE ASSESSING OFFICER HAS ISSUED A NOTICE U/S 148 DATED 14.03.2014 ONLY TO VERIFY THE GENUINENESS OF THE INVESTOR WHICH IS NOT PERMISSIBLE UNDER THE INCOME TAX ACT, 1961. HENCE NOTICE ISSUED U/S 148 I TSELF IS BAD IN LAW. IN PURSUANCE OF A NOTICE ISSUED TO VERIFY GENUINENESS OF INVESTMENTS MADE BY SOME INVESTORS HE HAS INEXPLICABLY PROCEEDED ON TO TREAT IT AS UNDISCLOSED IN THE HANDS OF THE ASSESSE COMPANY. THE ASSESSMENT COMPLETED U/S 143(3) DATED 25.0 3.2015 IS ILLEGAL, BAD IN LAW FOR THE FOLLOWING REASONS: 1 . THE NOTICE ISSUED U / S 148 TO VERIFY THE SOURCE OF INVESTMENT OF THE SHARE CAPITAL OF THE COMPANY IS BEYOND THE SCOPE OF PROVISIONS. 2 . ASSESSMENT IS COMPLETED WITHOUT GIVING PROPER OR ADEQUATE OPPO RTUNITY OF BEING HEARD WHICH IS ILLEGAL , BAD IN LAW AND AGAINST THE NATURAL JUSTICE. 3 . THE ASSESSMENT IS COMPLETED WITHOUT REBUTTING THE 550 PAGE DOCUMENTS WHICH ARE UNFLINCHING RECORDS OF THE COMPANIES. THE LIST OF DOCUMENTS SUBMITTED ON 09.03.2015 ARE AS FOLLOWS: 1. SONY FINANCIAL SERVICES L TD. CIN U74899DL1995PLC068362 - DATE OF REGISTRATION 09/05/1995 A ) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INCORPORATION 30 C ) CERTIFICATE OF COMMENCEMENT OF BUSINESS D ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME AY 08 - 09 E ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT F ) APPLICATION FOR ALLOTMENT OF SHARES G ) PHOTOCOPY OF THE SHARE CERTIFICATE H ) AUDITED ACCOUNT AND. DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2009 AUDITED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 J ) THE BANK STATEMENT HIGHLIGHTING REC EIPT OF THE AMOUNT BY WAY OF RTGS. K ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 2. AKI ORGANICS PRIVATE LTD. - CIN U74899DL1992PTCO51265 - DATE OF REGISTRATION 08/12/1992 A ) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INCORPORATION C ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME AY 08 - 09 D ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT E ) APPLICATION FOR ALLOTMENT OF SHARES F ) PHOTOCOPY OF THE SHARE CERTIFICATE G ) AUDITED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE - SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2009 H ) AUDITED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 I ) THE BANK STATEMENT HIGHLIGHTING RECEIPT OF THE AMOUNT BY WAY OF RTGS. J ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 3. CONTINENTAL FISCALMANAGEMENT LTD. - CIN U74140WB1995PLC07 1534 - DATE OF REGISTRATION 16/05/1995 A ) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INCORPORATION C ) CERTIFICATE OF COMMENCEMENT OF BUSINESS D ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME AY 09 - 10 E ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT F ) APPLICATION FOR ALLOTMENT OF SHARES 31 G ) PHOTOCOPY OF THE SHARE CERTIFICATE AUDITED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 H ) THE BANK STATEMENT HIGHLIGHTING RECEIPT OF THE AMOUNT BY WAY OF CHEQUE. I ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 4. CENTAK DISTRIBUTORS PRIVATE LIMITED - CIN U51109WB1995PTC073 478 - DATE OF REGISTRATION 11/08/1995 A ) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INCORPORATION C ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME AY 09 - 10 D ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT E ) APPLICATION FOR ALLOTMENT OF SHARES F ) PHOTOCOPY OF THE SHARE CERTIFICATE G ) AUDITED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 H ) THE BANK STATEMENT HIGHLIGHTING RECEIPT OF THE AMOUNT BY WAY OF CHEQUE. I ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 5. KANUPRIYA COMMERCIAL PRIVATE LTD. - CIN U51909WB2004PTC100 225 - DATE. OF REGISTRATION 20/ 10/2004 A ) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INC ORPORATION C ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME 09 - 10 D ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT E ) APPLICATION FOR ALLOTMENT OF SHARES F ) PHOTOCOPY OF THE SHARE CERTIFICATE G ) AUDITED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 H ) THE BANK STATEMENT HIGHLIGHTING RECEIPT OF THE AMOUNT BY WAY OF CHEQUE. I ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 32 6. ORPAT COMMERCIAL PRIVATE LTD. - CIN U51909WB2003PTC096652 - DATE OF REGISTRATION 28/07/2003 A ) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INCORPORATION C ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME 09 - 10 D ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT E ) APPLICATION FOR ALLOTMENT OF SHARES F ) PHOTOCOPY OF THE SHARE CERTIFICATE G ) AUDITED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 H ) THE BANK STATEMENT HIGHLIGHTING - RECEIPT OF THE AMOUNT BY WAY OF RTGS. I ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 7. J P ENGINEERING CORP PVT. LTD. - CIN U34103WB1951PTC019638 - DATE OF REGISTRATION 19/04/1951 A) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INCORPORATION C ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME 09 - 10 D ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT E ) APPLICATION FOR ALLOTMENT OF SHARES F ) PHOTOCOPY OF THE SHARE CERTIFICATE G ) AUDIT ED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 H ) THE BANK STATEMENT HIGHLIGHTING RECEIPT OF THE AMOUNT BY. WAY OF CHEQUE. - I ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 8. RAMESWAR RETAILERS PVT. LTD. - CIN U51909WB2003PTC097065 - DATE OF REGISTRATION 01/10/2003 A ) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INCORPORATION C ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME 09 - 10 D ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT E ) APPLICATION FOR ALLOTMENT OF SHARES F ) PHOTOCOPY OF THE SHARE CERTIFICATE 33 G ) AUDITED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 H ) THE BANK STATEMENT HIGHLIGHTING RECEIPT OF THE AMOUNT BY WAY OF RTGS. I ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 9. PARIDHI FINVEST PRIVATE LTD. - CIN U18 805WB1996PTC081805 - D ATE OF REGISTRATION 17/10/1996 A ) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INCORPORATION C ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME 09 - 10 D ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT E ) APPLICATION FOR ALLOTMENT OF SHARES F ) PHOTOCOPY OF THE SHARE CERTIFICATE G ) AUDITED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 H ) THE BANK STATEMENT HIGHLIGHTING RECEIPT OF THE AMOUNT BY WAY OF CHEQUE. I ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 10. OMEGA VENTURES PRIVATE LTD. - CIN U65999WB1996PTC081156 - DATE OF REGISTRATION 02/09/1996 A ) MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION B ) CERTIFICATE OF INCORPORATION C ) ACKNOWLEDGEMENT OF THE RETURN OF INCOME 09 - 10 D ) AFFIDAVIT OF THE DIRECTOR CONFIRMING THE INVESTMENT E ) APPLICATION FOR ALLOTMENT OF SHARES PHOTOCOPY OF THE SHARE CERTIFICATE G ) AUDIT ED ACCOUNT AND DIRECTORS REPORT THEREON INCLUDING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND SCHEDULES FOR THE YEAR ENDED 31.03.2010 H ) THE BANK STATEMENT HIGHLIGHTING RECEIPT OF THE AMOUNT BY WAY OF CHEQUE. I ) BANKS CERTIFICATE CERTIFYING THE RECEIPT OF THE AMOUNT THROUGH BANKING CHANNELS. 4 . THE ASSESSMENT ORDER IS PASSED BASED ON THE STATEMENT ALLEGED TO HAVE BEEN RECORDED AT KOLKATA AND DELHI. YOUR APPELLANT HAS NOT BEEN GIVEN AN OPPORTUNITY TO VERIFY THAT THE S TATEMENT RECORDED IS A VOLUNTARY 34 STATEMENT OR RECORDED UNDER A THREAT OR DURESS OR WITH AN EVIL DESIGN TO PROTECT THE INVESTORS IN THOSE COMPANIES OR THEIR DIRECTORS. 5 . THE ASSESSMENT IS COMPLETED BY DISREGARDING THE WRITTEN REQUEST MADE BY YOUR APPELLANT TO ARRANGE THE CROSS EXAMINATION OF THE PERSONS WHOSE STATEMENTS ARE RELIED ON BY THE AO. 6 . THE LEARNED AO HAS NOT ESTABLISHED THE TRAIL OF FUNDS INVESTED IN THE INVESTOR COMPANIES. HENCE THE ASSESSMENT IS BEATING AROUND THE BUSH ALLOW ING THE REAL BIRD TO FLY AWAY. 7 . THE LEARNED AO STATES IN THE ASSESSMENT ORDER THE DATE OF HEARING AS 22.07.2014 AND 09.03.2015. NO HEARING HAS TAKEN PLACE ON 09.03.2015 AS YOUR APPELLANT'S CA WAS NOT ALLOWED HENCE THIS S TATEMENT IS MALICIOUS. 8 . ALL THE INVESTMENTS IN SHARES ARE RECEIVED THROUGH BANKING CHANNELS AND APPEARING AS INVESTMENT IN THE RESPECTIVE COMPANY BALANCE SHEETS. 9 . THE SHARES ARE ALLOTTED AT PAR AND NO PREMIUM IS RECEIVED ON ALLOTMENT. 10 . THE SHARE CAPITAL RECEIVED WAS IMMEDIATELY DEPLOYED FO R CONSTRUCTION OF BARGE FOR IRON - ORE TRANSPORTATION. IT IS THEREFORE PRAYED THAT FOR ALL THE REASONS STATED ABOVE THE APPEAL MAY KINDLY BE ALLOWED. 11 . ALL THE TRANSACTIONS FROM THE INVESTOR COMPANIES ARE THROUGH BANKING CHANNELS DULY ACCOUNTED IN THE BOOKS OF INVESTORS COMPANIES AND HENCE NO INVESTMENT CAN BE HELD BOGUS UNTIL THE SOURCE OF FUND OF THOSE COMPANIES ARE PROVED AS UNCONFIRMED. IN VIEW OF THE ABOVE YOUR APPELLANT PRAYS THAT THE APPEAL BE ALLOWED.' 7. THE APPELLANT FILED ANOTHER SUBMISSION DATED 04.05.2015, CONTENTS OF WHICH ARE REPRODUCED AS UNDER: 35 'IN CONTINUATION TO THE SUBMISSION MADE AT THE TIME OF HEARING ON 29.04.2015 YOUR APPELLANT FURTHER SUBMITS AS UNDER: 1 . THE COMPANY WAS INCORPORATED ON 19TH DECEMBER 2009 AND THE COMPANY DID NOT COMMENCE ANY BUSINESS DURING THE PREVIOUS YEAR RELEVANT TO A.Y 2010 - 11 (PERIOD FROM 19.12.2009 TO 31.03.2010). THE BUSINESS COMMENCED ONLY FROM JULY 2010 BY PUTTING INTO VOYAGE NEWLY CONSTRUCTED BARGE FOR TRANSPORTATION OF IRON ORE. A.Y 2010 - 11 FIRST ASSESSMENT YEAR OF THE COMPANY WITHOUT ANY BUSINESS. ON THE DATE OF RECEIPT OF SHARE CAPITAL YOUR APPELLANT COMPANY WAS NOT CARRYING ON THE BUSINESS. 2 . AS ON 31.03.2010 THE CAPITAL STRUCTURE OF THE COMPANY WAS AS FOLLOWS: A. AUTHORISED CAPITAL RS.4,00,00,000/ - B . ISSUED AND SUBSCRIBED CAPITAL RS.3,81,00,000/ - C . PAID UP CAPITAL RS.3,80,00,000/ - DURING THE PREVIOUS YEAR THE TOTAL PAID UP CAPITAL WAS CONTRIBUTED BY THE 10 INVESTMENT COMPANIES. THE DIRECTORS NAMELY MR. YURI ALEMAO AND MR. BRAZ ALEMAO HAD NOT PAID ANY MONEY TOWARDS THE SHARES ALLOTTED TO THEM AMOUNTING TO RS.1,00,000/ - . HENCE THE COMPANY WAS TOTALLY UNDER THE CONTROL OF INVESTMENT COMPANIES. 3 . THE SHARES ALLOTTED TO INVESTMENT COMPANIES WERE AT PAR, WITHOUT ANY PREMIUM. THE ALLEGED STATEMENT OF THE LEARNED AO THAT THE SHARES ARE ALLOTTED AT PREMIUM IS INCORRECT. 4 . THE INVESTMENT COMPANIES ARE CARRYING ON THE BUSINESS OF INVESTMENTS AND TRADING ACTIVITIES BESIDES ALLEGED ACCOMMODATION ENTRIES. THERE WAS A MINING BOOM IN GOA FROM 2005 TILL IT WAS CLOSED IN SEPTEMBER 2012 AFTER THE SUPREME COURT BAN. MANY INVESTORS ALL OVER THE WORLD INVESTED IN GOAN MINES AND ALLIED ACTIVITIES. TAKING THIS OPPORTUNITY THE INVESTMENT COMPANIES DEPLOYED THEIR SURPLUS FUNDS IN IRON ORE TRANSPORT ACTIVITY WHICH WAS HIGHLY REWARDING BUSINESS. 5 . THE ALLEGED STATEMENT OF MR. DEEPAK PATWARI MENTIONS ABOUT FIVE COMPANIES NAMELY: I . J P ENGINEERING CORPORATION PVT LTD II . M/S CENTAK DISTRIBUTORS PVT LTD III . PARIDHI FINVEST PVT LTD IV . KANUPRIYA COMMERCIAL PVT LTD 36 V . THE CONTINENTAL FISCAL PVT LTD HOWEVER THERE IS NO DOUBT RAISED OR STATEMENT RECORDED AGAINST THE OTHER FIVE COMPANIES NAMELY: I . ORPAT COMMERCIAL PVT LTD II . RAMESWAR RETAIL PVT LTD III . OMEGA VENTURES PVT LTD. IV . SONY FINANCIAL SERVICES LTD. V . AKI ORGANICS PVT LTD 4 . THE COMMISSIONER OF INCOME TAX (APPEALS), AFTER CONSIDERING THE SUBMISSION OF THE ASSE S SEE DELETED THE ADDITION AND HELD AS UNDER: 5 . I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. IN THIS CASE, THE APPELLANT COMPANY WAS INCORPORATED ON 19TH DECEMBER 2009 I.E. DURING FINANCIAL YEAR 2009 - 10 RELEVANT TO A.YR. 2010 - 11. AFTER INCORPORATION, THE APPELLANT COMPANY RECEIVED SHARE CAPITAL TOTALING TO RS.3.8 CRORES AND SHARES WERE ALLOTTED ON 09.01.2010, I.E. THE SAME FINANCIAL YEAR. THE INVESTOR COMPANIES WERE FROM KOLKATA AND NEW DELHI. WITH THIS MONEY, THE APPELLANT COMPANY PURCHASED BARGES AND COMMENCED ITS BUSINESS OF TRANSPORTATION OF IRON ORE IN THE SUBSEQUENT FINANCIAL YEAR. SINCE THERE WAS NO BUSINESS IN F. Y. 2009 - 10, THE APPELLANT COMPANY DECLARED ITS TOTAL INCOME FOR A. YR. 2010 - 11, RELEVANT TO F. YR. 2009 - 10 AT RS. NIL. 6 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S.143(3) R.W.S.147, THE A.O. ASKED FOR DETAILS OF THES E INVESTOR COMPANIES AND THE SAME WAS FURNISHED BY THE APPELLANT. THE A.O. ISSUED A COMMISSION U/S.131(1)(D) TO THE DDIT (INVESTIGATION), KOLKATA AND REQUESTED HIM TO VERIFY CREDENTIALS OF THESE COMPANIES. SIMILAR REQUEST WAS MADE TO ASST. D.I.T., (INVESTI GATION), DELHI ALSO. THE A.O. RECEIVED A REPORT THAT NONE OF THE INVESTOR COMPANIES COULD BE LOCATED AT THE GIVEN ADDRESSES. IN VIEW OF SUCH ADVERSE REPORT, THE A.O. REOPENED THE CASE OF THE APPELLANT U/S.147 OF THE ACT. IN THE MEANTIME THE A.O. RECEIVED I NFORMATION FROM INVESTIGATION WING, KOLKATA ABOUT 'ACCOMMODATION ENTRY PROVIDERS' AND THE A.O. FOUND THAT COMPANIES, WHICH INVESTED IN ASSESSEE COMPANY'S SHARES WERE ALSO INVOLVED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRY. SHRI. DEEPAK PATWARI IS TH E PERSON WHO MANAGED ALL THE COMPANIES PROVIDING ACCOMMODATION ENTRIES, ADMITTED THAT HE WAS IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES IN TERMS OF CAPITAL AND SHARE PREMIUM. EQUIPPED WITH THIS INFORMATION, THE A.O. ASKED THE APPELLANT TO PROVE GEN UINENESS OF ITS TRANSACTIONS. IN RESPONSE, THE APPELLANT STATED THAT THOUGH THEY DID NOT KNOW THE INVESTOR COMPANIES DIRECTLY, BUT A FAMILY FRIEND AND REPUTED INDUSTRIALIST OF GOA SHRI. RAJENDRA PRASAD SINGLA HELPED THE APPELLANT TO GET INVESTMENT FROM THE SE COMPANIES. THE A.O. RECORDED THE STATEMENT OF SHRI. YURI ALEMAO AND HE REITERATED THE 37 SAME THING. HE ADMITTED THAT HE DID NOT KNOW DIRECTORS OF THESE COMPANIES. THE A.O. ALSO CONFRONTED MR. YURI ALEMAO WITH THE STATEMENTS OF DUMMY DIRECTORS OF INVESTOR COMPANIES AND ON THE BASIS OF ALL THE MATERIAL GATHERED, THE A.O. REACHED THE FOLLOWING CONCLUSION: I ) ASSESSEE DID NOT KNOW ANY OF THE DIRECTORS OF THESE COMPANIES ASSESSEE SAID, HE WILL NOT BE ABLE TO PRODUCE THESE DIRECTORS. II ) ASSESSEE NEVER COMMUNICATED WITH THESE COMPANIES EITHER THERE E MAIL OR TELEPHONE OR POST. III ) ASSESSEE SAYS ONE SHRI. RAJENDRA PRASAD SINGLA, WHO IS A FAMILY FRIEND, GOT THESE INVESTORS BUT THE ASSESSEE COMPANY DOES NOT HAVE ANY BUSINESS DEALINGS WITH SHRI. SINGLA TOO. IV ) THE CLAIM OF THE APPELLANT IS NOT VERIFIABLE SINCE THE SUPPOSED MIDDLEMAN SHRI. SINGLA HAS EXPIRED. V ) THE ASSESSEE DID NOT HAVE THE ACKNOWLEDGEMENT OF ORIGINAL APPLICATION RECEIPTS EITHER BY POST OR SOME OTHER COMMUNICATION. VI ) NO ADVERTISEMENT OR COMMUNICATION WAS DONE VIA MED IA TO LET INVESTORS KNOW ABOUT THE SHARE ISSUE. VII ) ASSESSEE DID NOT HAVE ANY EXPLANATION ABOUT THE STATEMENTGIVEN BY SHRI. DEEPAK PATWARI, THE OPERATOR OF INVESTOR COMPANIES WHO GAVE IN STATEMENT THAT HE IS AN ACCOMMODATION ENTRY OPERATOR WHO RECEIVES CASH FROM CUSTOMERS AND ROUTE IT THROUGH DIFFERENT BANK ACCOUNTS AND LAST ROUTE IT TO CUSTOMER COMPANIES BACK AS SHARE APPLICATION MONEY ETC. VIII ) ASSESSEE DID NOT HAVE ANY EXPLANATION ABOUT THE STATEMENTS GIVEN BY THE DIRECTORS OF THE INVESTOR COMPANI ES WHO SAID THAT THEY ARE JUST LOWLY PAID EMPLOYEES SIGNING ON CHEQUES AND DRAFTS ON BEHALF OF SHRI. DEEPAK PATWARI. ON THE BASIS OF THE ABOVE, THE A.O. CONCLUDED THAT SOURCE OF INVESTMENT WAS NOT SATISFACTORILY EXPLAINED BY THE APPELLANT COMPANY AND CONSEQUENTLY, HE ADDED ENTIRE SHARE APPLICATION MONEY AMOUNT OF RS.3.80 CRORES AS UNEXPLAINED CASH CREDIT U/S.68 AS INCOME OF THE APPELLANT COMPANY. ON THE OTHER HAND, THE APPELLANT, DURING THE COURSE OF APPELLATE PROCEEDINGS RAISED FOLLOWING POINTS IN ITS SUPPORT. 38 I ) DURING THE COURSE OF REASSESSMENT PROCEEDINGS. A SUMMONS U/S.131 WAS ISSUED TO SHRI. YURI ALEMAO, THE DIRECTOR OF THE APPELLANT COMPANY TO APPEAR IN PERSON ON 6TH MARCH, 2015 WHICH AS A PUBLIC HOLIDAY (HOLI). HE WAS INFORMED, SUBSEQUENTLY, OVER PHONE TO ATTEND ON 9TH MARCH AND HIS STATEMENT WAS RECORDED ON THE SAME DAY IN THE AFTERNOON. THE APPELLANT CONTENDED THAT THIS STATEMENT HAS NO EVIDENTIARY VALUE, AS IT WAS RECORDED WITHOUT ANY VALID NOTICE U/S.131. THE APPELLANT PLACED RELIANCE ON THE DE CISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT, SALEM VS KADAR KHAN, 352 ITR 481. (SC). DATED 29.09.2012. II) NO NOTICE U/S.143(2) OR 142(1) WAS ISSUED AFTER 22.07.2014 AND TILL THE ORDER WAS PASSED ON 25.03.2015. ON 9TH MARCH, 2015, APPELLANT'S COUNSEL, SHRI. R. K. PIKALE WAS NOT ALLOWED TO ARGUE THE MATTER BY THE A.O. III) AFTER 22ND JULY 2014, NO HEARING TOOK PLACE, NO CLARIFICATION WAS SOUGHT FOR AND THE ASSESSMENT WAS FINALIZED WITH PRE - CONCEIVED MIND. IV) THE APPELLANT SUBMITTED V OLUMINOUS DOCUMENTS ON 9TH MARCH 2015, BUT THE A.O. HAS NOT EVEN MADE A MENTION OF THE SAME IN ASSESSMENT ORDER. V) THE A.O. HAS NOT SAID THAT INVESTMENT COMPANIES WERE NON - EXISTENT OR BOGUS OR THAT THEY HAVE NOT INVESTED IN THE APPELLANT COMPANY. VI) A PRIVATE COMPANY CANNOT SEEK SHARE CAPITAL FROM PUBLIC BY ADVERTISING IN THE NEWS PAPER. VII) STATEMENTS OF THE DIRECTORS OF THE INVESTOR COMPANIES WAS RECORDED AT KOLKATA, BEHIND THE BACK OF THE APPELLANT COMPANY, AND THE SAME WAS USED TO DRAW ADVERSE CONC LUSION IN THE CASE OF THE APPELLANT. INSPITE OF SPECIFIC REQUEST MADE VIDE LETTER DATED 16.03.2015, FOR ALLOWING CROSS - EXAMINATION, THE A.O. DID NOT GIVE THE OPPORTUNITY TO CROSS EXAMINE, VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. IX) THE A.O. ISSUED A NOTICE U/S.148 TO VERIFY THE GENUINENESS OF INVESTOR, WHICH IS NOT PERMISSIBLE UNDER : THE PROVISIONS OF THE ACT. IN THE REASONS RECORDED, THE A.O. DOES NOT MENTION OF ANY INCOME ESCAPING ASSESSMENT. APART FROM RAISING ABOVE TECHNICAL GROU NDS, THE LEARNED COUNSEL OF TH E APPELLANT ARGUED ON FACTS AS UNDER: THE APPELLANT COMPANY CAME INTO EXISTENCE THROUGH INCORPORATION ON 19.12.2009 BUT NO BUSINESS COULD BE 39 STARTED DURING FINANCIAL YEAR 2009 - 10. SINCE, THE APPELLANT COMPANY DID NOT HAVE ANY BUSINESS, THERE IS NO QUESTION OF EARNING ANY UNACCOUNTED INCOME, WHICH COULD BE ROUTED BACK TO THE COMPANY, AS ALLEGED BY THE A.O. THE INVESTOR COMPANIES WERE CONTACTED THROUGH COMMON CONTACT, I.E. SH RI RAJENDRA PRASAD SINGLA. ALL THE INVESTORS ARE COMPANIES, DETAILS OF WHICH ARE AVAILABLE ON THE SITE OF REGISTRAR OF COMPANIES. ENTIRE SHARE CAPITAL HAS COME THROUGH BANKING CHANNELS, THROUGH ACCOUNT PAYEE CHEQUES. SINCE THESE INVESTORS WERE INITIAL INVE STORS, INSPITE OF MINING BOOM IN GOA, NO PREMIUM WAS CHARGED AND SHARES WERE ISSUED, SUBSCRIBED AND ALLOTTED AT PAR. THE LEARNED COUNSEL FURTHER STATED THAT VALID SHARE CERTIFICATES WERE ISSUED AND ALL THE RELEVANT DOCUMENTS WERE SUBMITTED BEFORE THE A.O., WHICH HE CHOSE TO IGNORE, WHILE FRAMING ASSESSMENT ORDER. THEREFORE, THE APPELLANT HAS PROVED THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION AND ADDITION U/S. 68 WAS NOT WARRANTED. IN VIEW OF THE ABOVE FACTS, IN MY OPINION, THE A.O. HAS MADE THE ADDITION WITH PRE - CONCEIVED MIND WITHOUT APPRECIATING FULL FACTS OF THE CASE. THE APPELLANT COMPANY IS A NEW COMPANY AND IT COULD NOT HAVE MADE OR GENERATED UNACCOUNTED INCOME, WITHOUT EVEN C OMMENCEMENT OF BUSINESS, WHICH COULD HAVE BEEN ROUTED BACK TO THE COMPANY IN THE FORM OF SHARE CAPITAL ON PREMIUM. WHAT BECOMES CLEAR FROM THE ORDER OF THE A.O. AND INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING THAT THE SOURCE OF FUNDS IN CASE OF INV ESTOR COMPANY IS DOUBTFUL AND THAT THEY ARE IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES, BUT THIS DOES NOT PROVE THAT THE APPELLANT COMPANY ALSO AVAILED OF ACCOMMODATION ENTRIES AND IT ROUTED ITS OWN UN ACCOUNTED INCOME, BACK TO ITSELF IN THE FORM O F SHARE CAPITAL. IF AT ALL THE FUNDS INVESTED IN THE APPELLANT COMPANY ARE UNACCOUNTED THE ADDITION COULD BE MADE IN THE HANDS OF INVESTORS AND NOT THE APPELLANT COMPANY. ALL THE STATEMENTS, ON WHICH THE A.O. PLACED RELIANCE, WHILE FRAMING ASSESSMENT WERE RECORDED BEHIND THE BACK OF THE APPELLANT AND THE APPELLANT DEFINITELY DESERVED A CHANCE TO CROSS - EXAMINE THE WITNESSES OF THE A.O., SINCE THEIR STATEMENTS HAVE BEEN USED AGAINST THE APPELLANT. ALSO, A CASE CAN BE REOPENED U/S. 147 FOR ASSESSING THE INC OME ESCAPING ASSESSMENT AND NOT FOR MAKING VERIFICATIONS. THUS, IN VIEW OF THE TOTALITY OF FACTS AND CIRCUMSTANCES, THE A.O., IN MY OPINION, WAS NOT JUSTIFIED IN MAKING AN 40 ADDITION OF RS.3.80 CRORES U/S.68 OF THE ACT. THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS.3.80 CRORES ACCORDINGLY: 5 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. 6 . IN THE INSTANCE CASE ASSES S EE CLAIMED TO HAVE RECEIVED THE FOLLOWING AMOUNTS FROM THE FOLLOWING PARTIES AGAINST THE ALLOTMENT OF SHARES TO THEM: SL.NO NAME OF THE COMPANY AMOUNT 1 SONY FINANCIAL SERVICES LIMITED 40,00,000 2 AKI ORGANICS PRIVATE LIMITED 40,00,000 3 CONTINENTAL FISCAL MANAGEMENT LTD 30,00,000 4 CENTAK DISTRIBUTORS PVT LTD 50,00,000 5 KANUPRIYA COMMERCIAL PRIVATE LIMITED 40,00,000 6 ORPAT COMMERCIAL PRIVATE LIMITED 25,00,000 7 J P ENGINEERING CORPN PVT LTD 25,00,000 8 RAMESWAR RETAILERS PRIVATE LIMITED 35,00,000 9 PARIDHI FINVEST PRIVATE LIMITED 60,00,000 10 OMEGA VENTURES PRIVATE LIMITED 35,00,000 THE ASSESSING OFFICER HAS NOT ACCEPTED THE ABOVE AS GENUINE TRANSACTIONS AND ADDED THE ENTIRE AMOUNT AS INCOME OF THE ASSE SS EE COMPANY. THE MAIN REASON FOR ADDITION IN RESPECT OF SHARE APPLICATION MONEY RECEIVED FROM M/S. J . P . ENGINEERING CORPORATION PVT . LTD RS.25.00 LACS, M/S CENTAK DISTRIBUTORS PVT . LTD RS.50.00 LACS, PARIDHI FINVEST PVT LTD RS.60.00 LACS, KANUPRIYA COMMERCI AL PVT . LTD RS.40.00 LACS AND T HE CONTINENTAL FISCAL PVT . LTD RS.30.00 LACS, WAS THE STATEMENT OF SHRI DEEPAK PATWARI AND THE COMMON D IRECTORS OF THESE COMPANIES SHRI SANTOSH KUMAR GUPTA, SHRI BAIKUNTH NATH PANDEY, SHRI AMIT AGARWAL. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE MONEY WAS RECEIVED THROUGH BANKING CHANNEL WHICH ARE SUPPORTED BY THE FOLLOWING DOCUMENTS. 41 I . COPY OF MEMORANDUM OF ASSOCIATION II . COPY OF ARTICLE OF ASSOCIATION III . COPY OF SHARE APPLICATION FORM IV . CERTIFICATE OF INCORPORATION V . INCOME TAX RETURN FILLED ACKNOWLEDGEMENT VI . AFFIDAVIT OF DIRECTORS CONFIRMING THE INVESTMENT. VII . AUDITED ACCOUNTS AND DIRECTOR REPORT VIII . BANK CERT IFICATE CERTIFYING THE RECEIPT THROUGH BANKING CHANNEL 7 . IN VIEW OF THIS OVERWHELMING EVIDENCES AND THE MATERIAL FURNISHED BY THE ASSE S SEE, THE TRANSACTION IN QUESTION CANNOT BE HELD AS NOT GENUINE. THE IDENTITY OF SHARE APPLICAT ION CANNOT BE DOUBTED. 8 . THE STATEMENT MADE BY THE PERSONS IN QUESTION WERE SELF - SERVING STATEMENT S AND SAME CANNOT BE TAKEN AS EVIDENCE AGAINST THE ASSE S SEE UNLESS THE ASSESSEE WAS ALLOWED AN OPPORTUNITY TO CROSS - EXAMINE THEM. THE STATEMENTS WERE RECORDED AT THE BACK OF THE ASSE S SEE. THE ASSESSEE VIDE ITS LETTER DATED 16/03/2015 SPECIFICALLY ASKED THE ASSESSING OFFICER TO ALLOW CROSS EXAMINATION OF THE PERSONS WHOS E STATEMENTS WERE RECORDED AT CALCUTTA. THE ASSESSING OFFICER DID NOT RESPOND TO THE REQUEST OF THE ASSESSEE AND PASSED THE ASSE SS MENT ORDER ON 25/3/2015 U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT1961 AND ADDED THE ENTIRE AMOUNT OF SHARE APPLICATION OF RS.3.80 CRORE TO THE INCOME OF THE ASSES S EE U/S 68 OF THE ACT. 9 . ON APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS), DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. IN THIS CASE, THE APPELLANT COMPANY WAS INCORPORATED ON 19TH DECEMBER 2009 I.E. 42 DURING FINANCIAL YEAR 2009 - 10 RELEVANT TO A.YR. 2010 - 11. AFTER INCORPORATION, THE APPELLANT COMPANY RECEIVED SHARE CAPITAL TOTALING TO RS.3.8 CRORES AND SHARES WERE ALLOTTED ON 09.01.2010, I.E. THE SAME FINANCIAL YEAR. THE INVESTOR COMPANIES WERE FROM KOLKATA AND NEW DELHI. WITH THIS MONEY, THE APPELLAN T COMPANY PURCHASED BARGES AND COMMENCED ITS BUSINESS OF TRANSPORTATION OF IRON ORE IN THE SUBSEQUENT FINANCIAL YEAR. SINCE THERE WAS NO BUSINESS IN F. Y. 2009 - 10, THE APPELLANT COMPANY DECLARED ITS TOTAL INCOME FOR A. YR. 2010 - 11, RELEVANT TO F. YR. 2009 - 10 AT RS. NIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S.143(3) R.W.S.147, THE A.O. ASKED FOR DETAILS OF THESE INVESTOR COMPANIES AND THE SAME WAS FURNISHED BY THE APPELLANT. THE A.O. ISSUED A COMMISSION U/S.131(1)(D) TO THE DDIT (INVESTIGATION), KOLKATA AND REQUESTED HIM TO VERIFY CREDENTIALS OF THESE COMPANIES. SIMILAR REQUEST WAS MADE TO ASST. D.I.T., (INVESTIGATION), DELHI ALSO. THE A.O. RECEIVED A REPORT THA T NONE OF THE INVESTOR COMPANIES COULD BE LOCATED AT THE GIVEN ADDRESSES. IN VIEW OF SUCH ADVERSE REPORT, THE A.O. REOPENED THE CASE OF THE APPELLANT U/S.147 OF THE ACT. IN THE MEANTIME THE A.O. RECEIVED INFORMATION FROM INVESTIGATION WING, KOLKATA ABOUT ' ACCOMMODATION ENTRY PROVIDERS' AND THE A.O. FOUND THAT COMPANIES, WHICH INVESTED IN ASSESSEE COMPANY'S SHARES WERE ALSO INVOLVED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRY. SHRI. DEEPAK PATWARI IS THE PERSON WHO MANAGED ALL THE COMPANIES PROVIDING AC COMMODATION ENTRIES, ADMITTED THAT HE WAS IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES IN TERMS OF CAPITAL AND SHARE PREMIUM. EQUIPPED WITH THIS INFORMATION, THE A.O. ASKED THE APPELLANT TO PROVE GENUINENESS OF ITS TRANSACTIONS. IN RESPONSE, THE APPE LLANT STATED THAT THOUGH THEY DID NOT KNOW THE INVESTOR COMPANIES DIRECTLY, BUT A FAMILY FRIEND AND REPUTED INDUSTRIALIST OF GOA SHRI. RAJENDRA PRASAD SINGLA HELPED THE APPELLANT TO GET INVESTMENT FROM THESE COMPANIES. THE A.O. RECORDED THE STATEMENT OF SHRI. YURI ALEMAO AND HE REITERATED THE SAME THING. HE ADMITTED THAT HE DID NOT KNOW DIRECTORS OF THESE COMPANIES. THE A.O. ALSO CONFRONTED MR. YURI ALEMAO WITH THE STATEMENTS OF DUMMY DIRECTORS OF INVEST OR COMPANIES AND ON THE BASIS OF ALL THE MATERIAL GATHERED, THE A.O. REACHED THE FOLLOWING CONCLUSION: IX ) ASSESSEE DID NOT KNOW ANY OF THE DIRECTORS OF THESE COMPANIES X ) ASSESSEE SAID, HE WILL NOT BE ABLE TO PRODUCE THESE DIRECTORS. 43 XI ) ASSESSEE NEVER COMMUNICATED WITH THESE COMPANIES EITHER THERE E MAIL OR TELEPHONE OR POST. XII ) ASSESSEE SAYS ONE SHRI. RAJENDRA PRASAD SINGLA, WHO IS A FAMILY FRIEND, GOT THESE INVESTORS BUT THE ASSESSEE COMPANY DOES NOT HAVE ANY BUSINESS DEALINGS WITH SHRI. SINGLA TOO. XIII ) THE CLAIM OF THE APPELLANT IS NOT VERIFIABLE SINCE THE SUPPOSED MIDDLEMAN SHRI SINGLA HAS EXPIRED. XIV ) THE ASSESSEE DID NOT HAVE THE ACKNOWLEDGEMENT OF ORIGINAL APPLICATION RECEIPTS EITHER BY POST OR SOME OTHER COMMUNICATION. XV ) NO ADVERTISEMENT OR COMMUNICATION WAS DONE VIA MEDIA TO LET INVESTORS KNOW ABOUT THE SHARE ISSUE. XVI ) ASSESSEE DID NOT HAVE ANY EXPLANATION ABOUT THE STATEMENT GIVEN BY SHRI. DEEPAK PATWARI, THE OPERATOR OF INVESTOR COMPANIES WHO GAVE IN STATEMENT THAT HE IS AN ACCOMMODATION ENTRY OPERATOR WHO RECEIVES CASH FROM CUSTOMERS AND ROUTE IT THROUGH DIFFERENT BANK ACCOUNTS AND LAST ROUTE IT TO CUSTOMER COMPANIES BACK AS SHARE APPLICATION MONEY ETC. XVII ) ASSESSEE DID NOT HAVE ANY EXPLANATION ABOUT THE STATEMENTS GIVEN BY THE DIRECTORS OF THE INVESTOR COMPANIES WHO SAID THAT THEY ARE JUST LOWLY PAID EMPLOYEES SIGNING ON CHEQUES AND DRAFTS ON BEHALF OF SHRI. DEEPAK PATWARI. ON THE BASIS OF THE ABOVE, THE AS SESSING OFFICER CONCLUDED THAT SOURCE OF INVESTMENT WAS NOT SATISFACTORILY EXPLAINED BY THE ASSESSEE - COMPANY AND CONSEQUENTLY, HE ADDED THE ENTIRE SHARE APPLICATION MONEY OF RS.3.80 CRORES AS UNEXPLAINED CASH CREDIT U/S.68 TO THE INCOME OF THE ASSESSEE COMPANY. ON THE OTHER HAND, THE APPELLANT, DURING THE COURSE OF APPELLATE PROCEEDINGS RAISED FOLLOWING POINTS IN ITS SUPPORT. I) DURING THE COURSE OF REASSESSMENT PROCEEDINGS , SUMMON S U/S.131 WAS ISSUED TO SHRI YURI ALEMAO, THE D IRECTOR OF THE APPELLANT COMPANY TO APPEAR IN PERSON ON 6TH MARCH, 2015 WHICH AS A PUBLIC HOLIDAY (HOLI). HE WASINFORMED, SUBSEQUENTLY, OVER PHONE TO ATTEND ON 9TH MARCH AND HIS STATEMENT WAS RECORDED ON THE SAME DAY IN THE AFTERNOON. THE APPELLANT CONTENDED THAT THIS STATEMENT 44 HA S NO EVIDENTIARY VALUE, AS IT WAS RECORDED WITHOUT ANY VALID NOTICE U/S.131. THE APPELLANT PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT, SALEM VS KADAR KHAN, 352 ITR 481. (SC). DATED 29.09.2012. II) NO NOTICE U/S.143(2) OR 1 42(1) WAS ISSUED AFTER 22.07.2014 AND TILL THE ORDER WAS PASSED ON 25.03.2015. ON 9TH MARCH, 2015, APPELLANT'S COUNSEL, SHRI. R. K. PIKALE WAS NOT ALLOWED TO ARGUE THE MATTER BY THE A.O. III) AFTER 22ND JULY 2014, NO HEARING TOOK PLACE, NO CLARIFICATION WAS SOUGHT FOR AND THE ASSESSMENT WAS FINALIZED WITH PRE - CONCEIVED MIND. IV) THE APPELLANT SUBMITTED VOLUMINOUS DOCUMENTS ON 9TH MARCH 2015, BUT THE A.O. HAS NOT EVEN MADE A MENTION OF THE SAME IN ASSESSMENT ORDER. V) THE A.O. HAS NOT SAID THAT INVESTMENT COMPANIES WERE NON - EXISTENT OR BOGUS OR THAT THEY HAVE NOT INVESTED IN THE APPELLANT COMPANY. VI) A PRIVATE COMPANY CANNOT SEEK SHARE CAPITAL FROM PU BLIC BY ADVERTISING IN THE NEWS PAPER. VII) STATEMENTS OF THE DIRECTORS OF THE INVESTOR COMPANIES WAS RECORDED AT KOLKATA, BEHIND THE BACK OF THE APPELLANT COMPANY, AND THE SAME WAS USED TO DRAW ADVERSE CONCLUSION IN THE CASE OF THE APPELLANT. INSPITE OF SPECIFIC REQUEST MADE VIDE LETTER DATED 16.03.2015, FOR ALLOWING CROSS - EXAMINATION, THE A.O. DID NOT GI VE THE OPPORTUNITY TO CROSS EXAMINE, VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. VIII ) THE A.O. ISSUED A NOTICE U/S.148 TO VERIFY THE GENUINENESS OF INVESTOR, WHICH IS NOT PERMISSIBLE UNDER : THE PROVISIONS OF THE ACT. IN THE REASONS RECORDED, THE A.O. DOES NOT MENTION OF ANY INCOME ESCAPING ASSESSMENT. APART FROM RAISING ABOVE TECHNICAL GROUNDS, THE LEARNED COUNSEL OF TH E APPELLANT ARGUED ON FACTS AS UNDER: THE APPELLANT COMPANY CAME INTO EXISTENCE THROUGH INCORPORATION ON 19.12.2009 BUT NO BUSINESS COULD BE STARTED DURING FINANCIAL YEAR 2009 - 10. SINCE, THE APPELLANT COMPANY DID NOT HAVE ANY BUSINESS, THERE IS NO QUESTION OF EARNING ANY UNACCOUNTED INCOME, WH ICH COULD BE ROUTED BACK TO THE COMPANY, AS ALLEGED BY THE A.O. THE INVESTOR COMPANIES WERE CONTACTED THROUGH COMMON CONTACT, I.E. SHRI. RAJENDRA PRASAD SINGLA. ALL THE INVESTORS ARE COMPANIES, DETAILS OF WHICH ARE AVAILABLE ON THE SITE OF 45 REGISTRAR OF COM PANIES. ENTIRE SHARE CAPITAL HAS COME THROUGH BANKING CHANNELS, THROUGH ACCOUNT PAYEE CHEQUES. SINCE THESE INVESTORS WERE INITIAL INVESTORS, INSPITE OF MINING BOOM IN GOA, NO PREMIUM WAS CHARGED AND SHARES WERE ISSUED, SUBSCRIBED AND ALLOTTED AT PAR. THE L EARNED COUNSEL FURTHER STATED THAT VALID SHARE CERTIFICATES WERE ISSUED AND ALL THE RELEVANT DOCUMENTS WERE SUBMITTED BEFORE THE A.O., WHICH HE CHOSE TO IGNORE, WHILE FRAMING ASSESSMENT ORDER. THEREFORE, THE APPELLANT HAS PROVED THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION AND ADDITION U/S. 68 WAS NOT WARRANTED. THUS, IN VIEW OF THE TOTALITY OF FACTS AND IN VIEW OF THE ABOVE FACTS, IN MY OPINION, THE A.O. HAS MADE THE ADDITION WITH PRE - CONCEIVED MIND WITHOUT APPRECIATING FULL FAC TS OF THE CASE. THE APPELLANT COMPANY IS A NEW COMPANY AND IT COULD NOT HAVE MADE OR GENERATED UNACCOUNTED INCOME, WITHOUT EVEN COMMENCEMENT OF BUSINESS, WHICH COULD HAVE BEEN ROUTED BACK TO THE COMPANY IN THE FORM OF SHARE CAPITAL ON PREMIUM. WHAT BECOMES CLEAR FROM THE ORDER OF THE A.O. AND INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING THAT THE SOURCE OF FUNDS IN CASE OF INVESTOR COMPANY IS DOUBTFUL AND THAT THEY ARE IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES, BUT THIS DOES NOT PROVE THAT TH E APPELLANT COMPANY ALSO AVAILED OF ACCOMMODATION ENTRIES AND IT ROUTED ITS OWN UN ACCOUNTED INCOME, BACK TO ITSELF IN THE FORM OF SHARE CAPITAL. IF AT ALL THE FUNDS INVESTED IN THE APPELLANT COMPANY ARE UNACCOUNTED THE ADDITION COULD BE MADE IN THE HANDS OF INVESTORS AND NOT THE APPELLANT COMPANY. ALL THE STATEMENTS, ON WHICH THE A.O. PLACED RELIANCE, WHILE FRAMING ASSESSMENT WERE RECORDED BEHIND THE BACK OF THE APPELLANT AND THE APPELLANT DEFINITELY DESERVED A CHANCE TO CROSS - EXAMINE THE WITNESSES OF THE A.O., SINCE THEIR STATEMENTS HAVE BEEN USED AGAINST THE APPELLANT. ALSO, A CASE CAN BE REOPENED U/S. 147 FOR ASSESSING THE INC OME ESCAPING ASSESSMENT AN D NOT FOR MAKING VERIFICATIONS CIRCUMSTANCES, THE A.O., IN MY OPINION, WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.3.80 CRORES U/S.68 OF THE ACT. THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS.3.80 CRORES ACCORDINGLY: 10 . BEFORE US THE D EPARTMENTAL R EPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT IN VIEW OF THE STATEMENTS OF THE PERSONS RECODED BY THE DEPARTMENT THE ADDITION MADE WAS FULLY JUSTIFIED. 46 11 . ON THE OTHER HAND , THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE RECEIPT OF SHARE APPLICATION BY THE ASSESSEE FROM THE ABOVE MENTIONED 10 PERSONS ARE SUPPORTED BY VARIOUS DOCUMENTS WHICH WERE FILED BEFORE THE ASSESSING OFFICER . IN VIEW OF THESE DOCUMENTS, WHICH WERE FILED BEFORE THE ASSESSING OFFICER , THE IDENTITY OF SHARE APPLICANT IS BEYOND DISPUTE. FURTHER, THE TRAN SACTIONS WERE THROUGH BANKING CHANNELS AND WERE ALSO SUPPORTED BY SHARE APPLICATION FORM DULY EXECUTED BY THE SHARE APPLICANT COMPANIES. THUS, THE GENUINENESS OF T HE TRANSACTION AND THEIR CREDIT WORTHINESS WAS ALSO PROVED BY THE ASSESSEE. IN THE SE CIRCUMSTA NCES, THE INITIAL ONUS WHICH WAS UPON THE ASSESSEE U/S 68 OF THE ACT TO EXPLAIN THE NATURE AND SOURCE OF CREDIT WAS DULY DISCHARGED BY THE ASSES S EE. THEREAFTER , THE ASSESSING OFFICER IGNORED ALL THESE EVIDENCES BY SOLELY RELYING UPON THE STATEMENTS WHICH WE RE INADMISSIBLE IN LAW. HE EXPLAINED THAT THESE STATEMENTS WERE RECORDED AT THE BACK OF THE ASSESSEE. THESE STATEMENTS WERE SELF - SERVING STATEMENTS MADE BY THOSE PERSONS. THE ASSES S EE REQUESTED FOR CROSS - EXAMINATION OF THOSE PERSONS VIDE LETTER DATED 16/3/ 2015. THE ASSESSING OFFICER DID NOT ALLOW TO CROSS - EXAMIN ETHEM AS REQUESTED BY THE ASSESSEE. THE ASSESSING OFFICER WITHOUT ALLOWING THE CROSS - EXAMINATION OF THOSE PERSONS WHOS E STATEMENT S WERE RECORDED BEYOND THE BACK OF THE ASSE S SEEUNREASONABLY HELD THAT THE ASSESSEE HAS NOT DISCHARGED ITS BURDEN WHICH WAS ON THE ASSE S SEE U/S 68 OF THE ACT, MADE THE ADDITION UNDER CONSIDERATION. 12 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ON THE ABOVE FACTS SUBMITTED THAT THE ADDITIONS MADE IS UNSUSTAINABLE UNDER THE LAW AND PLACED RELIANCE ON THE DECISION OF THE HON. GUJARAT HIGH COURT IN THE CASE OF P R . COMMISSIONER OF INCOME TAX VS . 47 CHARTERED SPEED PVT. LTD.[2015(3) TMI 809 GUJARAT HIGH COURT] WHEREIN IT WAS HELD AS UNDER : - 5. AS RECORDED BY THE TRIBUNAL, THE TRIBUNAL FOUND THAT THE INITIAL BU RDEN WAS DISCHARGED BY THE ASSE SSEE. IN OUR VIEW, ONCE THE TRIBUNAL UPON THE APPRECIATION OF THE MATERIAL FOUND AND RECORDED THE FINDING OF THE FACT THAT THE ASSESSEE HAD DISCHARGED INITIAL BURDEN, SUCH A FINDING OF FACT W OULD BE OUTSIDE THE JUDICIAL SCRUTINY IN THE APPEAL BEFORE THIS COURT UNLESS THE FINDING OF FACT IS PERVERSE TO THE RECORD. IT IS AN UNDISPUTED POSITION THAT THE STATEMENT OF THE PERSONS CONCERNED WHICH WERE RECORDED BY THE DEPARTMENT, THOSE PERSONS WERE N OT MADE AVAILABLE FOR CROSS - EXAMINATION, MAY BE FOR ONE REASON OR ANOTHER IN SPITE OF THE ATTEMPTS MADE BY THE DEPARTMENT. THEREFORE THE TRIBUNAL HAS RIGHTLY FOUND THAT THE STATEMENT OF THOSE PERSONS CANNOT BE READ AGAINST THE ASSESSEE. 6. THE ATTEMPT MADE TO CONTEND THAT THE BURDEN IS UPON THE ASSESSEE TO PROVE THE IDENTITY OF THE PERSON, CREDITWORTHINESS OF THE PERSON AND THE GENUINENESS OF THE TRANSACTION ARE TO BE EXAMINED IN CONTEXT TO THE EXISTENCE OF THE PERSON CONCERNED, THE FACTUM OF ACTUAL MONEY I N POSSESSION OF THE PERSON AND HAVING PAID TO THE ASSESSEE AND THE MODE OF PAYMENT. THEREAFTER, IF THE PERSON CONCERNED IS IN EXISTENCE AND HAS ACTUALLY PAID THE AMOUNT FROM HIS ACCOUNT BY CHEQUE, IT CAN BE SAID THAT THE INITIAL BURDEN IS DISCHARGED SO FAR AS EXPLANATION TO BE CONSIDERED UNDER SECTION 68 OF THE ACT. THEREAFTER, THE BURDEN WOULD BE UPON THE REVENUE TO SHOW THAT EITHER THE PERSON WAS BOGUS OR THERE WAS NO FINANCIAL CAPACITY TO MAKE THE PAYMENT AND THE ARRANGEMENT OF MONEY WAS ARTIFICIAL OR TH AT THE MONEY HAS NOT PASSED OVER AND IT WAS ONLY BY WAY OF AN EYE WASH. SUCH COULD BE PROVED BY THE REVENUE IN THE PRESENT CASE THROUGH THE STATEMENT OF THE PERSONS, BUT UNFORTUNATELY, THEY WERE NOT MADE AVAILABLE FOR CROSS - EXAMINATION AND THEREFORE, THE S TATEMENTS COULD BE USED AS AN EVIDENCE AGAINST THE ASSESSEE. NO OTHER EVIDENCE WAS AVAILABLE WITH THE REVENUE. 7. UNDER THESE CIRCUMSTANCES, IF THE TRIBUNAL HAS FOUND THAT THE EXPLANATION UNDER SECTION 68 OF THE ACT WAS ACCEPTABLE IN ABSENCE OF NON - DISCHAR GE OF THE BURDEN UPON THE REVENUE, SUCH A FINDING OF FACT WOULD NOT CALL FOR INTERFERENCE WHEN THE APPEAL BEFORE THIS COURT IS LIMITED TO THE SUBSTANTIAL QUESTIONS OF LAW. THE DECISION UPON WHICH THE RELIANCE HAS BEEN PLACED BY MR.BHATT IN TAX APPEAL NO.80 0/12 (SUPRA) IS OF NO HELP TO THE REVENUE BECAUSE THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE CANNOT BE EQUATED WITH THE FACTS OF THE SAID CASE CONSIDERED BY THIS COURT. IT IS HARDLY REQUIRED TO BE STATED THAT WHETHER THE EXPLANATION IS SUFFICIENT OR N OT WOULD ESSENTIALLY DEPEND UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE. BUT THE PRINCIPLE REMAINS THAT ONCE THE INITIAL BURDEN IS DISCHARGED BY 48 THE ASSESSEE, IT WOULD BE FOR THE REVENUE TO SHOW THAT THE TRANSACTION WAS BOGUS LEADING TO CONCLUSION FOR DI SCARDING OF THE EXPLANATION. IN THE PRESENT CASE, AS OBSERVED BY US HEREINABOVE, THE BURDEN WAS NOT DISCHARGED AND THEREFORE THE TRIBUNAL HAS HELD IN FAVOUR OF THE ASSESSEE. WE DO NOT FIND THAT ANY SUBSTANTIAL QUESTION OF LAW WOULD ARISE FOR CONSIDERATION IN THE PRESENT APPEALS, AS CANVASSED. 8. HENCE, THE APPEALS ARE MERITLESS AND THEREFORE, DISMISSED. 13 . HE ALSO RELIED ON THE DECISION OF HON . SUPREME COURT IN THE CASE OF KISHINCHAND CHELLARAM V. C IT , BOMBAY CITY II [1980 ] 125 ITR 713 (SC)] WHERE IN IT WAS HELD THAT BEFORE THE INCOME TAX AUTHORITIES COULD RELY UPON THE STATEMENT OF THE BANK MANAGER, THEY WERE BOUND TO PRODUCE IT BEFORE THE ASSESSEE SO THAT THE ASSES S EE COULD CONTROVERT THE STATEMENT CONTENT IN IT FOR ASKING FOR ANY OPPORTUNITY TO CR OSS - EXAMINE THE MANAGER OF THE BANK WITH REFERENCE TO THE STATEMENT MADE BY HIM. 14 . WE FIND THAT IN THE INSTANT CASE THE ADDITION IS MADE U/S 68 OF THE ACT ON THE GROUND OF UNEXPLAINED CASH CREDIT. AS PER THE PROVISION S OF SEC . 68, THE INITIAL ONUS LIES UPO N THE ASSES S EE TO PROVE THE NATURE AND THE SOURCE OF AMOUNT CREDITED IN HIS BOOKS OF ACCOUNTS. WE FIND THAT THIS INITIAL ONUS WAS DISCHARGED IN THE INSTANCE CASE BY THE ASSE S SEE BY FURNISHING THE DOCUMENTS LIKE MEMORANDUM OF ASSOCIATION, ARTICLE OF ASSOCIA TION, SHARE APPLICATION, CERTIFICATE OF INCORPORATION, ACKNOWLEDGEMENT OF ITRS, AUDITED ACCOUNTS, ETC. OF THE CONCERNED COMPANIES. THEREAFTER, IN OUR VIEW, THE ONUS SHIFTED UPON THE DEPARTMENT AND IT WAS FOR THE DEPARTMENT TO BRING ON RECORD THE RELEVANT MATERIAL TO SHOW THAT WHY INSPITE OF THE ABOVE STATED DOCUMENTS, THE ADDITION IS STILL TO BE MADE IN THE HANDS OF THE ASSESSEE. IN THE INSTANCE CASE, THE DEPARTMENT HAS ENDEAVORED TO DISCHARGE ITS BURDEN ON THE BASIS OF STATEMENTS RECORDED BY IT OF THE PER SONS MENTIONED ABOVE. 49 15 . WE FIND THAT THE ASSE S SEE REQUESTED FOR CROSS - EXAMINATION OF THE MAKER S OF THE STATEMENT S . BUT STRANGELY, THE ASSESSING OFFICER DID NOT TAKE ANY STEP TO ALLOW EFFECTIVE OPPORTUNITY TO THE ASSES S EE TO CROSS - EXAMINE THE MAKERS OF THE STATEMENT S . THE ASSESSING OFFICER DID NOT PURSUE THE MATTER FURTHER. THUS , WE FIND THAT THE ASSE S SEE WAS NOT ALLOWED ANY OPPORTUNITY TO CROSS - EXAMINE THE PERSONS WHO MADE THE STATEMENTS AT THE BACK OF THE ASSESSEE. IN OUR CONSIDERED VIEW, THE STATEMENT S OF THOSE PERSONS CANNOT BE READ AGAINST THE ASSESSEE .O UR ABOVE VIEW FINDS SUPPORT FROM THE DECISION OF THE HON. SUPREME COURT IN THE CASE OF KISHINCHAND CHELLARM ( SUPRA ) AND THE DECISION OF HON. GUJARAT HIGH COURT IN THE CASE OF CHARTERED SPEED PVT. LTD. ( SUPRA ) . 16 . IN VIEW OF THE ABOVE SETTLED POSITION OF LAW, WE FIND FORCE IN THE ARGUMENT OF THE ASSESSEE THAT THE STATEMENTS OF THE PERSONS MENTIONED ABOVE ARE NOT ADMISSIBLE EVIDENCE AGAINST THE ASSESSEE . IN ABSENCE OF THESE STATEMENT S , WE FIND THAT NO OTHER MATER IAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT WHY STILL THE AMOUNT IN QUESTION SHOULD BE TREATED AS INCOME OF THE ASSESSEE WHEN THE ASSESSEE FURNISHED ALL THE DOCUMENTS WHICH WERE AVAILABLE WITH IT TO DISCHARGE THE ONUS WHIC H WAS UPON IT U/S 6 8 OF THE ACT . IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, THE ADDITION WAS MADE SOLELY BASED UPON THE INADMISSIBLE AND UNRELIABLE MATERIAL AND THEREFORE ADDITIONS SO MADE CANNOT BE SUSTAINED. WE , THEREFORE , DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN DELET ING THE ADDITION OF RS.3.80 CRORES MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CASH CREDIT . WE , THEREFORE, DISMISS THE GROUND OF APPEAL OF THE REVENUE. 50 17 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON TUESDAY , T HE 20 TH DAY OF OCTOBER , 2015 AT GOA. (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH OCTOBER , 2015. VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 51 DATE INITIAL THIS IS TYPED TO DICTATION IN THE CHAMBER 1. DRAFT DICTATED ON 20 . 10 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 20.10 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 20/10 /2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 20 / 1 0/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 20/10 /2015 SR.PS 6. DATE OF PRONOUNCEMENT 20 / 1 0/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 20/10 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER