Mohil Estates Pvt Ltd, New Delhi V. ITO WARD 5(4), New Delhi

ITA 3397/DEL/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7345 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Assessment Year: 2006-2007
• Appeal Filed On: 17-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Accommodation entries
• Section: 68; 148; 142(1); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC-1 : NEW DELHI (Through Virtual Hearing) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA No.3397/Del/2019 Assessment Year: 2006-07 Mohil Estates Pvt. Ltd., 22, SSI, Industrial Area, IInd Floor, GT Karnal Road, Delhi. PAN: AAECM5516C Vs. ITO, Ward-5(4), New Delhi. (Appellant) (Respondent) Assessee by : None Revenue by : Shri Om Prakash, Sr.DR Date of Hearing : 15.11.2021 Date of Pronouncement : 29.11.2021 ORDER This appeal filed by the assessee is directed against the order dated 31.01.2019 of the CIT(A)-37, New Delhi, relating to Assessment Year 2006-07. 2. This appeal was fixed for a number of times and was getting adjourned due to non-appearance of the assessee. Today, when the name of the assessee was called, none appeared on behalf of the assessee nor any adjournment application was filed. The notice sent by the Registry through RPAD was returned unserved by the Postal Authorities with the remark ‘left without address.’ I, therefore, ITA No.3397/Del/2019 2 proceed to decide this appeal on the basis of the material available on record and after hearing the ld. DR. 3. Although a number of grounds have been raised by the assessee, these all relate to the order of the CIT(A) in confirming the addition of Rs.5 lakhs u/s 68 of the IT Act on account of bogus share capital and Rs.10,000/- for the alleged commission paid by the company for arranging the accommodation entry. 4. Facts of the case, in brief, are that the assessee is a company and filed the return of income declaring nil income on 31.03.2007. A survey operation was carried on in the case of Shri Aseem Kumar Gupta and Group of cases (entry operator) and on further inquiries conducted by the Investigation Wing of the Department, it was found that the assessee company is one of the companies who have taken the following accommodation entry:- S. No. Bank Name Value of Entry Taken Instrument No. by which entry taken Cheque Date Entry Taken From Entry Taken by 1. ABN AMRO BANK C P. NEW DELHI 5,00,000/- 797374 27.01.2006 Moderate Credit Corp. Ltd., Mohil Estate Pvt. Ltd., ITA No.3397/Del/2019 3 5. Shri Aseem Kumar Gupta had given a statement on oath that he had provided accommodation entries to various entities through his associate companies. Name of the assessee company is appearing in the list of cases who have taken accommodation entries. The AO, therefore, reopened the case of the assessee after recording reasons and issued notice u/s 148 of the Act on 19 th March, 2013. However, no return was filed by the assessee in response to the said notice. Subsequently, the AO issued notice u/s 142(1) of the Act. The assessee company filed a letter stating that the return already filed may be treated as return in response to the notice u/s 142(1) of the Act. During the course of assessment proceedings, the AO issued notice u/s 133(6) of the Act to M/s Moderate Credit Corp. Ltd., from whom the assessee company has received accommodation entry, to file the following details:- 1. Confirmed copy of account of the above party 2005-06 appearing in your books right from day one i.e. since when you had made the payment if any. 2. Purpose and mode of payment to the assessee company. 3. Copy of your bank statement for the period 1.4.2005 to 31.3.2006 from which the transaction has been routed. 4. Copy of your acknowledgment of return of income filed with PAN and telephone number. 5. Copies of Balance Sheet along with all schedules for the A.Y. 2006-07 and A.Y. 2013-14. ITA No.3397/Del/2019 4 6. However, no such information was received from the said company. The AO, thereafter, confronted the assessee by writing a letter the contents of which read as under:- “1. That the information has been received from the Investigation Wing that you have taken accommodation entry of Rs.5,00,000/- from M/s Moderate Credit Corp. Ltd. vide cheque no. 797374. In this regards you are requested to submit the explanation, copy of account duly confirmed by Ms Moderate Credit Corp. Ltd, their ITR and Balance Sheet as at 31st March,2006. Also requested to produce the party in person to justify the identity, genuineness and creditworthiness. 2. That a Notice U/s 133(6) has been issued on 30.12.2013 to M/s Moderate Credit Corporation Limited fixing the date of hearing on 10.01.2014 but No reply has been received till date. In these circumstances, an opportunity is hereby providing to you to Produce the party in person along with the details as asked for to justify the identity, genuineness and creditworthiness of M/s Moderate Credit Corporation Limited. 3. Also file Justification of amount received whereas Moderate Credit Corporation Limited has accepted before the Investigation Wing that the accommodation entry has been provided to you. 4. Produce books of accounts and bills and vouchers for verification.” 7. The AO also asked the assessee to produce the directors of the said company. Since the assessee failed to comply with the direction of the AO, applying the provisions of section 68 of the IT Act, the AO made addition of Rs.5 lakhs to the total income of the assessee. Similarly, the AO also made addition of Rs.10,000/- being commission expenses for arranging the accommodation entry of Rs.5 lakhs. In appeal, the ld.CIT(A) upheld the action of the AO. 8. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. ITA No.3397/Del/2019 5 9. I have heard the ld. DR and perused the record. I have also gone through the various decisions relied on by the CIT(A). I find, the assessee, in the instant case, has taken accommodation entry of Rs.5 lakh from one Moderate Credit Corporation Ltd.. The details of the bank name, instrument No., cheque date, etc. are also given in the preceding paragraph. During the course of assessment proceedings, despite opportunities granted by the AO, neither the investor company filed the requisite details nor the assessee produced the director of the investor company or substantiated the three ingredients as per the provisions of section 68 in respect of such accommodation entry of Rs.5 lakh. Before the CIT(A) also the assessee failed to substantiate the same for which the ld.CIT(A) upheld the action of the AO. Even before me, nothing was produced so as to take a contrary view than the view taken by the CIT(A) on this issue. I, therefore, uphold the order of the CIT(A). The grounds raised by the assessee are, accordingly dismissed. 10. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open court on 29.11.2021. Sd/- (R.K. PANDA) ACCOUNTANT MEMBER Dated: 29 th November, 2021. dk ITA No.3397/Del/2019 6 Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi