S.K. Emboridery PVt. Ltd, New Delhi V. ACIT, New Delhi

ITA 355/DEL/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7033 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 17-11-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 30-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: M M BHASIN
• Keywords: Question of law; Accommodation entries; Reason to believe
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G DELHI BEFORE SHRI RAJPAL YADAV & AND SHRI K.G. BANSAL ITA NO. 355(DEL)/2009 ASSESSMENT YEAR: 2000-01 S.K. EMBROIDERY PVT. LTD., AS STT. COMMISSIONER OF INCOME S-129, PARAMPURI, VS. TAX, CIRCLE 7(1), NEW DELHI. UTTAM NAGAR, NEW DELHI-59. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.M. BHASIN, C.A. RESPONDENT BY : S HRI B.R.R. KUMAR, D.R. DATE OF HEA RING : 17.11.2011 DATE OF PRO NOUNCEMENT : 25 .11.2011 ORDER PER K.G. BANSAL : AM IN THIS CASE, THE TRIBUNAL HAD PASSED THE ORDER ON 22.09.2009, IN WHICH THE APPEAL OF THE ASSESSEE WAS DISMISSED I N LIMINE FOR NON- PROSECUTION. THIS ORDER WAS RECALLED ON 19.02. 2010. THE ASSESSEE HAS TAKEN TWO GROUNDS IN THE APPEAL THAT THE LD. CI T(APPEALS) HAS ERRED ON FACTS AND IN LAW IN-(I) UPHOLDING THE VALIDITY O F ASSESSMENT FRAMED U/S 147 READ WITH SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (THE ACT FOR SHORT); AND (II) CONFIRMING THE ADDITION AMOUNT ING TO RS. 13.50 LAKH RECEIVED AS SHARE APPLICATION MONEY THROUGH PROP ER BANKING CHANNELS AND RETURNED THROUGH BANK. ITA NO. 355(DEL)/2009 2 2. IN CONNECTION WITH GROUND NO. 1, THE LD. COUN SEL DREW OUR ATTENTION TO THE REASONS RECORDED BY THE AO P LACED ON PAGE NOS. 18 AND 19 OF THE PAPER BOOK, WHICH READ AS UNDER:- RETURN DECLARING AN INCOME OF RS. 8,83,348/- CO MPUTED AS PER THE PROVISIONS OF SECTION 115JA WAS FILED ON 30.11.2000 AND THE S AME WAS PROCESSED U/S 143(1) ON 26.07.2001. INFORMATION HAS BEEN RECEIVED FROM DIT (INV.) TH AT M/S S.K. EMBROIDERY PVT. LTD. HAS BEEN A BENEFICIARY OF ACCOMMODATION ENTRIES BEI NG PROVIDED BY CERTAIN ENTRY OPERATORS. ON THE BASIS OF INFORMATION CHART FO RWARDED BY THE DIT (INV.), NEW DELHI, IT IS SEEN THAT THE ASSESSEE IS INVOLVED IN THE BOGUS TRANSACTION DETAILS IN THE CHART. (SHOWN BELOW) IN VIEW OF THIS AND AFTER VERIFICATION FROM THE RECORDS OF THE ASSESSEE AVAILABLE IN THIS OFFICE, I HAVE REASONS TO BELIEVE THAT TAXABLE INCOME TO THE TUNE OF RS. 18,51,600/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE IT ACT, 1961. AS MORE THAN FOUR YEARS HAVE BEEN ELAPSED FROM T HE END OF THE RELEVANT ASSESSMENT YEAR, IN WHICH THE ACCOMMODATION ENTRY WAS TAKEN, HENCE THE APPROVAL OF THE ADDITIONAL CIT, RANGE-7 WAS SOLICITED AS PER SECT ION 151 OF THE IT ACT AND OBTAINED, WHICH IS PLACED ON RECORD (VIDE F. NO. ADDL. CIT/ RANGE-7/2007-08/647 DATED 7.3.2007. BENEFICIARY NAME BENEFICI ARY BANK NAME & BRANCH VALUE OF ENTRY INSTRUMENT NO. DATE NAME OF A/C BANK NAME & BRANCH A/C NUMBER OF ENTRY GIVING A/C S.K.EMBROIDERY P. LTD. N.D. 10,01,000 897084 16.3.2000 TEEM METALS P. LTD. VIJAYA BANK RAM NAGAR 2789 -DO- N.D. 6,00,600 287114 24.3.2000 CHANGI A STEELS P. LTD. VIJAYA BANK RAM NAGAR CA 2566 -DO- N.D 2,00,000 897084 28.3.2000 TEEM METALS P. LTD. KVP KAROL BAGH 2789 ITA NO. 355(DEL)/2009 3 2.1 IT IS SUBMITTED THAT THE REASONS ARE IN THE N ATURE OF SUSPICION ONLY AND DO NOT MEET THE REQUIREMENT OF LAW THAT THE AO SHOULD HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HA S ESCAPED ASSESSMENT. IN THIS CONNECTION, HE SUBMITTED THE CORRECT DETAI LS OF THE AMOUNTS RECEIVED FROM TEEM METALS PVT. LTD. AND CHANGIA STEELS (P) LTD., TOTALING TO RS. 13.50 LAKH. THE ADDITION WAS ALSO MADE OF THIS AMOUNT AND NOT THE AMOUNT OF RS. 18.50 LAKH AS MENTIONED IN THE REAS ONS. THUS, IT IS ARGUED THAT THE AO DID NOT PROPERLY ASSUME JURISDICTIO N FOR ISSUING NOTICE U/S 148 OF THE ACT. THE CORRECT DETAILS ARE STATED TO BE AS UNDER:- BENEFICIARY NAME BENEFICI ARY BANK NAME & BRANCH VALUE OF ENTRY INSTRUMENT NO. DATE NAME OF A/C BANK NAME & BRANCH A/C NUMBER OF ENTRY GIVING A/C S.K.EMBROIDERY P. LTD. N.D. 5,00,000 742844 16.3.2000 TEEM METALS P. LTD. VIJAYA BANK RAM NAGAR 2789 -DO- N.D. 6,00,600 743016 24.3.2000 TEEM METALS P. LTD. VIJAYA BANK RAM NAGAR CA 2566 -DO- N.D 2,00,000 897084 28.3.2000 CHANGI A STEELS P. LTD. KVP KAROL BAGH 2789 ITA NO. 355(DEL)/2009 4 3. IN REPLY, THE LD. DR REFERRED TO THE RECORDED REASONS AND SUBMITTED THAT THE INFORMATION ORIGINATED FROM DIRECTORATE OF INVESTIGATION, WHICH IS ENTRUSTED WITH THE WORK OF CARRYING OUT INVESTIGAT IONS, SURVEYS AND SEARCHES. THEREFORE, THE INFORMATION EMANATED FROM A RESPECT ABLE SOURCE WHICH POINTED OUT THAT THE ASSESSEE HAS RECEIVED A CCOMMODATION ENTRIES FROM TEEM METALS (P) LTD. AND CHANGIA STEELS (P) LTD. THE AO VERIFIED THE RECORDS OF THE ASSESSEE WHICH WERE AVAILABLE IN HIS OFFICE. ON COMPARING THE INFORMATION WITH THE RECORD, HE CAME TO THE CO NCLUSION THAT INCOME OF RS. 18,51,600/- HAS ESCAPED ASSESSMENT. COMING T O THE ERRORS IN AMOUNT, CHEQUE NUMBER AND REVERSAL OF NAME IN RESPECT OF THE ENTRY OF RS. 6,00,600/-, IT IS SUBMITTED THAT THE ENQUIRIES CON DUCTED BY THE INVESTIGATION WING LED TO THE FINDING THAT A LARGE NUMBER O F ASSESSEES HAD TAKEN ACCOMMODATION ENTRIES FROM THESE PERSONS. AS A LARGE NUMBER OF BENEFICIARIES ARE INVOLVED, THERE COULD BE MINOR ERRORS IN RECORDING THE REASONS. IT IS ALSO A MATTER OF FACT ON RECORD THAT THE ASSESSEE HAD RECEIVED CHEQUES FROM BOTH THE PARTIES, WHICH COUL D NOT BE TALLIED WITH THE RECORDS MAINTAINED BY THE AO. THE PREVIOUS APPRO VAL OF THE ADDITIONAL COMMISSIONER WAS ALSO OBTAINED. THUS, THE AO F OLLOWED THE DUE PROCEDURE OF LAW IN RESPECT OF AN AUTHENTIC INFORM ATION WHICH ON ITA NO. 355(DEL)/2009 5 APPLICATION OF MIND LED TO THE REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. AT THIS STAGE, THE AO IS NOT SUPPOS ED TO COMPLETE THE ASSESSMENT IN AN EXACT MANNER WITH A VIEW TO QUAN TIFYING THE EXACT AMOUNT OF CONCEALED INCOME BY FURNISHING ALL DETA ILS. THE WHOLE MATTER HAS TO BE LOOKED INTO ON A PRIMA FACIE BASIS AND SUFFICIENCY OF REASONS CANNOT BE GONE INTO. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT THE AO RECEIVED INFORMATION FROM THE INVESTIGATION WING REGARDING ACCOMMODATION ENTRIE S FURNISHED BY TEEM METALS (P) LTD. AND CHANGIA STEELS (P) LTD. TO THE ASSESSEE. THIS INFORMATION WAS SOUGHT TO BE VERIFIED FROM THE R ECORDS OF THE ASSESSEE MAINTAINED BY HIS OFFICE. AS THE ENTRIES DID NOT TALLY, A PRIMA FACIE CONCLUSION WAS DRAWN THAT INCOME AMOUNTING TO RS. 18,51,600/- HAS ESCAPED WITHIN THE MEANING OF SECTION 147. THE REAFTER, PREVIOUS APPROVAL OF THE ADDITIONAL COMMISSIONER WAS OBTAI NED TO ISSUE NOTICE U/S 148 OF THE ACT. FINALLY, THE NOTICE WAS ISSUED. THE CASE OF THE ASSESSEE IS THAT THE RECORDED REASONS RAISE MERELY THE SUS PICION WHICH DO NOT AMOUNT TO REASON TO BELIEVE. ON THE OTHER HAND, TH E CASE OF THE LD. DR IS THAT INFORMATION HAS BEEN RECEIVED FROM A RESPECTABLE SOURCE WHICH HAS BEEN ITA NO. 355(DEL)/2009 6 VERIFIED FROM THE RECORDS OF THE ASSESSEE. AS THE INFORMATION DID NOT MATCH WITH THE RECORDS, REASONS WERE RECORDED THA T THE INCOME HAS ESCAPED ASSESSMENT. 4.1 AT THIS STAGE, WE MAY CONSIDER THE CASES RE LIED UPON BY THE RIVAL PARTIES. IN THE CASE OF CIT VS. ATUL JAIN & AN OTHER, (2008) 299 ITR 383 (DEL), THE AO HAD RECEIVED INFORMATION THAT THE ASSESSEE HAD TAKEN BOGUS ENTRY OF CAPITAL GAIN OF RS. 1,08,845/- ON 22.06.1996 BY PAYING CASH ALONG WITH SOME PREMIUM AND TAKING CHEQUE OF THE SAME AMOUNT. ON THE BASIS OF THE INFORMATION, REASONS WERE RECORDED AND PUT UP BEFORE THE COMMISSIONER OF INCOME-TAX, WHO GRA NTED PREVIOUS APPROVAL BY WRITING YES. THE HONBLE COURT MENTIONED T HAT THE INFORMATION DOES NOT INDICATE THE SHARES IN WHICH THE TRANSACTIO NS WERE MADE. THE ONLY INFORMATION IS THAT A BOGUS ENTRY HAS BEEN TAKEN BY PAYING CASH ALONG WITH SOME PREMIUM. THE AO ACCEPTED THE TRUTH O F THE VAGUE INFORMATION IN A MECHANICAL MANNER. NO RECORDING HAS BEEN MAD E OF THE SATISFACTION ABOUT CORRECTNESS OR OTHERWISE OF THE INFORMATION. FURTHER, REFERRING TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CH HUGAMAL RAJPAL (1971) 79 ITR 603, IT IS MENTIONED THAT SUBMISSION OF A REPORT IS NOT THE SAME THING AS RECORDING OF REASONS TO BELIEVE FOR ISSUING A NOTICE. IT HAS BEEN ITA NO. 355(DEL)/2009 7 HELD THAT THE LAW LAID DOWN IN THIS CASE WA S APPLICABLE AND, THEREFORE, NO ERROR CAN BE FOUND WITH THE DECISION OF THE TRIBUNAL AND NO SUBSTANTIAL QUESTION OF LAW ARISES. THE RATIO OF THIS DECISION IS NOT APPLICABLE FOR THE REASON THAT ON RECEIPT OF INFOR MATION, THE SAME WAS VERIFIED WITH THE RECORDS WHICH DID NOT SHOW SUC H ENTRY. THEREFORE, NOT ONLY THAT INFORMATION EMANATED FROM A RESPECTA BLE SOURCE, IT WAS ALSO VERIFIED WITH THE RECORD. NO DOUBT THERE ARE SOME ERRORS IN AMOUNT, CHEQUE NUMBER, AND REVERSAL OF THE NAME OF THE AFORESAID CHANGIA AND THE TEEM. HOWEVER, THIS DOES NOT DISPLACE THE F ACT THAT ENTRIES WERE RECEIVED FROM THESE TWO PARTIES, WHICH DID NOT FI ND A PLACE IN THE RECORD OF THE ASSESSEE. THE AMOUNT IN ONE CASE AND CHEQ UE NUMBER IN TWO CASES ETC. ARE ONLY THE MATTER OF DETAILS. THE PRIMAR Y FACT IS THAT ENTRIES WERE RECEIVED WHICH DID NOT FIND PLACE IN THE RECORD OF THE ASSESSEE. THUS, THE FACTS ARE DISTINGUISHABLE. 4.2 IN THE CASE OF CIT VS. GULATI INDUSTRIAL FABR ICATION (P) LTD., (2008) 217 CTR 494 (DEL), IT WAS MENTIONED IN THE R ECORDED REASONS THAT A STATEMENT WAS MADE BY SANJAY RASTOGI TO THE EFFECT THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRY TO THE EXTENT OF RS. 5. 00 LAKH FROM HIS FRONT COMPANY, HALLMARK HEALTHCARE LTD. THE STATEMENT W AS SUPPLIED TO THE ITA NO. 355(DEL)/2009 8 ASSESSEE. THE TRIBUNAL REFERRED TO THE FACT THAT THE STATEMENT OF SANJAY RASTOGI DID NOT CONTAIN ANY ANSWER TO THE EFFECT THAT LOAN GRANTED WAS BOGUS. NO OPPORTUNITY WAS ALSO GIVEN TO THE ASS ESSEE TO CROSS EXAMINE SANJAY RASTOGI. IT CAME TO THE CONCLUSION THAT THE MATERIAL DISCLOSED TO THE ASSESSEE DID NOT LEAD TO INFERENCE THAT THE ASSESSEE HAD AN ACCOMMODATION ENTRY FROM HALLMARK HEALTHCARE LTD. DISTINGUISHING THE FACTS OF ITS EARLIER DECISION IN THE CASE OF HIG AIN FINVEST (P) LTD., (2008) 214 CTR 441 (DEL), IT WAS MENTIONED THAT THE ST ATEMENT OF SANJAY RASTOGI DID NOT MENTION EITHER THE FRONT COMPANY OR THE ASSESSEE. THEREFORE, IT WAS HELD THAT THE TRIBUNAL WAS RIG HT IN THE VIEW IT TOOK AND NO SUBSTANTIAL QUESTION OF LAW AROSE FROM ITS ORD ER. THE FACTS OF THIS CASE ARE ALSO DISTINGUISHABLE. IN THE CASE AT HAND, THE AO HAD RECEIVED INFORMATION THAT THE ASSESSEE RECEIVED ACCOMMODA TION ENTRIES FROM TEEM METALS (P) LTD. AND CHANGIA STEELS (P) LTD. THE DETAILS OF CHEQUES ETC. WERE FURNISHED. THE AO VERIFIED THE INFOR MATION FROM THE RECORDS OF THE ASSESSEE, WHERE SUCH ENTRIES WERE NOT THERE. THEREFORE, HE RECORDED THE REASONS AND CAME TO THE CONCLUSION T HAT INCOME HAD ESCAPED ASSESSMENT. NO VERIFICATION WAS CONDUCTED IN THE CASE OF GULATI INDUSTRIAL FABRICATION (P) LTD. AND, THUS, IT COU LD BE SAID IN THAT CASE THAT THE AO MECHANICALLY ACTED ON THE INFORMATION. FU RTHER, NO NAME OR DETAILS ITA NO. 355(DEL)/2009 9 OF CHEQUE ETC. WERE THERE IN THE STATEMENT. TH E INFORMATION OF FACT IN THIS CASE IS QUITE ELABORATE IN TERMS OF NAME, A MOUNT, CHEQUE NUMBER ETC. THEREFORE, WE ARE OF THE VIEW THAT THE RATIO OF THIS CASE IS NOT APPLICABLE TO THE FACTS OF OUR CASE. 4.3 WE MAY NOW TURN TO THE ONLY CASE RELIED UPO N BY THE LD. DR. IN THE CASE OF BABU RAM VS. ITO, (2004) 90 TTJ ( DEL) 332, A NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE WITHOUT MENTIONING HIS STATUS. OBJECTION WAS TAKEN THAT THE NOTICE WAS VAGUE BECAUSE IT D ID NOT MENTION WHETHER IT WAS ISSUED TO THE ASSESSEE AS AN INDIVIDUAL OR KA RTA OF HIS HUF. THIS PLEA WAS NEGATED INTER-ALIA ON THE GROUND THAT IN CASE STATUS IS NOT MENTIONED, THE STATUS HAS TO BE TAKEN TO BE THAT OF AN IND IVIDUAL. THE CASE OF THE LD. DR IS THAT MINOR ERRORS IN RECORDING REASONS SHOULD BE IGNORED WHEN OTHERWISE THERE IS INFERENCE OF ESCAPEMENT OF INC OME ON A PRIMA FACIE PERUSAL OF INFORMATION AND ITS VERIFICATION WITH THE RECORD. WE FIND THAT THIS CASE HAS BEEN DECIDED ON A TOTALLY DIFFEREN T ASPECT REGARDING NON- MENTIONING OF STATUS IN THE NOTICE. THE DECISIO N IS THAT IN LAW WHEN THE STATUS IS NOT MENTIONED, IT HAS TO BE TAKEN TO BE T HAT OF THE INDIVIDUAL. ITA NO. 355(DEL)/2009 10 4.4 IN THE LIGHT OF THE FACTS AND LAW AS STATE D AND DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE AO HAD RELIABLE INFORMA TION IN HIS POSSESSION. HE VERIFIED THE INFORMATION AND FOUND THAT THE R ETURN OF INCOME DID NOT DISCLOSE THE TRANSACTION. THEREFORE, HE HAD RE ASON TO BELIEVE THAT THE INCOME ESCAPED ASSESSMENT. 5. COMING TO THE MERITS, IT WAS SUBMITTED BY THE LD. COUNSEL THAT THREE CHEQUES WERE RECEIVED FROM THE AFORESAID TWO PA RTIES AGGREGATING TO RS. 13.50 LAKH. HOWEVER, IT WAS DECIDED NOT TO ALLO T THE SHARES AND, THEREFORE, THE MONIES WERE RETURNED BY WAY OF CHEQUES IN THI S YEAR. THUS, NO ENTRY WAS PASSED IN THE BOOKS OF ACCOUNT. THIS IS RE ASON THAT THE AO WAS NOT ABLE TO VERIFY THE ENTRIES AT THE STAGE OF RECO RDING THE REASONS. IN THIS CONNECTION, REFERENCES HAVE BEEN MADE TO THE LETTE R OF THE VIJAYA BANK DATED 21.07.2008 ENCLOSING COPIES OF THE CHEQUES . ACCORDING TO THIS LETTER, THREE DEMAND DRAFTS WERE ISSUED BY DEBI T OF CHEQUES. THE AMOUNT INVOLVED IN THE DEMAND DRAFTS AGGREGATE TO RS. 16.00 LAKH AND WERE ISSUED IN THE NAME OF THE ASSESSEE AND INDIA TERMINAL CONNECTOR SYSTEM LTD. FURTHER, A REFERENCE IS MADE TO PAGE NO. 29 OF TH E PAPER BOOK, WHICH SHOWS THAT THREE CHEQUES WERE ISSUED IN FAVOUR OF TH E AFORESAID TWO PARTIES ITA NO. 355(DEL)/2009 11 AMOUNTING TO RS.2,50,000/-, RS. 6.00 LAKH AND RS. 5 .00 LAKH ON 21.03.2001, 26.03.2001 AND 05.10.2001. THE CASE OF THE LD. COUNSEL IS THAT THESE CHEQUES WERE ENCASHED BY THE RECIPIENT AFTER A PERIOD OF ONE YEAR BUT SINCE THE ASSESSEE HAD ISSUED THE CHEQUES, THE BALANCE SHOWN IN THESE ACCOUNTS CAME TO NIL AND, THUS, NO ENTRY WHATSOE VER MADE IN THEIR ACCOUNTS. IT IS HIS CASE THAT SINCE ALL THE TRANSACTIONS ARE THROUGH CHEQUES AND ALL THE PARTIES ARE LIMITED COMPANIE S, NO ADDITION COULD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE. REFERE NCE HAS ALSO BEEN MADE TO PAGE NO. 39 OF THE PAPER BOOK, WHICH IS WRITTEN ON A PLAIN PAPER, BEARING THE STAMP OF THE BANK STATING THE DETAILS OF CHEQUES THROUGH WHICH DEBITS WERE MADE IN THE CURRENT ACCOUNT NO. 4134 OF THE ASSESSEE. IN REPLY, THE LD. DR SUBMITTED THAT THE BOOKS OF THE ASSESSEE D O NOT SHOW RECEIPT AND PAYMENT OF THE MONEY. THERE IS NO EVIDENCE THAT T HE MONEY WAS RECEIVED FOR ALLOTMENT OF SHARES. THE POSSESSION OF TH E MONEY IS NOT IN DOUBT AT ALL. IT IS THE CASE OF THE ASSESSEE THAT THE MON EY HAD BEEN RECEIVED AND RETURNED WITHOUT ENTERING IT IN THE BOOKS OF ACC OUNT. NORMALLY A CHEQUE EXPIRES WITHIN A PERIOD OF SIX MONTHS OF ITS W RITING, HOWEVER, THE LD. COUNSEL HAS NOT EXPLAINED AS TO HOW THE SAME COUL D BE ENCASHED AFTER LAPSE OF ONE YEAR BY THE ALLEGED CREDITORS. ITA NO. 355(DEL)/2009 12 5.1 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE FACTS OF THE CASE ARE THAT THE ASSESSEE RECEIVED THREE CHEQUES AGGREGATING TO RS. 13.50 LAKH FROM TEEM M ETALS (P) LTD. AND CHANGIA STEELS (P) LTD. ACCORDING TO THE ASSESSE E, THE CHEQUES WERE RECEIVED FOR ALLOTMENT OF SHARES, HOWEVER, THE SHARES WERE NOT ALLOTTED AND THE MONEY WAS RETURNED BY WAY OF CHEQUES IN THIS VERY YEAR. THE CHEQUES WERE ENCASHED AFTER THE CLOSE OF THE YE AR. RECEIPT AND PAYMENT ARE BY LIMITED COMPANIES AND ALL TRANSACTIONS HA VE BEEN CONDUCTED THROUGH BANKING CHANNELS. NO BENEFIT HAS BEEN RE CEIVED BY THE ASSESSEE. THE TRANSACTIONS HAVE NOT BEEN RECORDED IN THE B OOKS BECAUSE THE ASSESSEE MADE THE REPAYMENT IN THIS VERY YEAR. ON THESE FACTS, IT CAN BE SAID THAT THE ASSESSEE WAS IN POSSESSION OF MONEY EQUIVALENT TO THE AGGREGATE OF THE AMOUNTS INVOLVED IN THE CHEQUES. AS THESE CHEQUES WERE CLEARED AND CREDITED IN ASSESSEES BANK ACCOUNT , THE POSSESSION OF CHEQUES CANNOT BE DENIED. AS NO EVIDENCE EXIS TS ON RECORD REGARDING APPLICATIONS MADE BY THE TWO COMPANIES FOR ALLOTM ENT OF SHARES, THE AMOUNTS FOUND WITH THE ASSESSEE CAN AT BEST BE SAID TO BE MERELY A CREDIT RECEIVED AND NOT THE MONIES RECEIVED FOR ALLOTMENT OF SHARES. IN RESPECT OF THE CREDITS OR THE MONIES FOUND IN PO SSESSION OF THE ASSESSEE, ITA NO. 355(DEL)/2009 13 THE BURDEN TO LEAD SATISFACTORY EVIDENCE REGAR DING NATURE AND SOURCE IS ON THE ASSESSEE. THE ASSESSEE HAS NOT EVEN FILED CONFIRMATION LETTERS FROM THESE PERSONS. THE VERY FACT THAT THE CREDITORS ARE LIMITED COMPANIES AND TRANSACTIONS HAVE BEEN UNDERTAKEN THROUGH BANKING C HANNELS DOES NOT LEAD TO ESTABLISHMENT OF IDENTITY AND CREDITWORTHINESS OF THE CREDITORS. OBVIOUSLY, IT DOES NOT LEAD TO AN INFERENCE THAT TH E AMOUNT WAS GENUINELY RECEIVED FROM THE ALLEGED CREDITORS AS LOANS OR SHARE APPLICATION MONEY. THE ALLEGED REPAYMENT OF THE LOAN ALSO DOES NOT DISCHARGE THE BURDEN FOR THE SIMPLE REASON THAT THE AMOUNTS COULD BE CR EDITED TO A SPURIOUS BANK ACCOUNT FROM WHICH THE LOAN ORIGINATED. WHAT IS MORE DAMAGING FOR THE ASSESSEE IS THAT ENTRIES OF THE TRANSACTION HAVE NOT BEEN MADE IN THE BOOKS OF ACCOUNT, WHICH SHOWS THAT THE ASSESSEE INTEN DED TO CAMOUFLAGE THE ENTRIES ALTHOUGH THE MONEY REMAINED WITH IT FOR QUITE SOME TIME. AT THE SAME TIME, THE ENQUIRIES CONDUCTED BY INVESTIGAT ION WING ALSO SHOWED THAT THE TRANSACTIONS ARE IN THE NATURE OF ACCOM MODATION ENTRIES. THE CUMULATIVE EFFECT IS THAT THE ASSESSEE HAS FAILE D TO DISCHARGE ITS PRIMARY BURDEN U/S 69A OF THE ACT. IT MAY BE MENTIONE D HERE THAT THE AO HAS MADE ADDITION UNDER A WRONG SECTION 68, BUT IT IS FOUND THAT NO ENTRY HAS BEEN MADE IN THE BOOKS OF THE ASSESSEE. TH EREFORE, THE ADDITION SHOULD HAVE BEEN CORRECTLY MADE U/S 69A. THE T RIBUNAL HAS ALL THE ITA NO. 355(DEL)/2009 14 POWERS TO CORRECT SUCH MINOR ERROR IN REGARD T O THE CORRECT PROVISION APPLICABLE ON THE FACTS. THUS, IT IS HELD THAT T HE LD. CIT(APPEALS) RIGHTLY UPHELD THE ADDITION OF RS. 13.50 LAKH. 6. IN THE RESULT, THE APPEAL IS DISMISSED. SD/- SD/- (RAJPAL YADAV) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. S.K. EMBROIDERY PVT. LTD., NEW DELHI. 2. ACIT, CIRCLE 7(1), NEW DELHI. 3. CIT 4. CIT(A) 5. THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.