M/s Kesar Biotech Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 3608/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6932 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 22-11-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S KRISHNAN
• Keywords: Unexplained cash credit; Double taxation relief; Document seized; Opportunity of being heard; Principle of natural justice; Accommodation entries; Assessment record; Documents seized
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-II NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 3608/DEL/2016 ASSESSMENT YEAR: 2007-08 M/S KESAR BIOTECH PVT. LTD. VS. INCOME TAX OFFICER 41, SAMRAT ENCLAVE, PITAMPURA, WARD 14(3), DELHI 110034 NEW DELHI (PAN: AACCK6954E) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. S. KRISHNAN, CA REVENUE BY : SH. ANIL SHARMA, SR. DR ORDER THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 31.3.2016 PASSED BY THE LD. CIT(A)-5, DELHI RELATIN G TO ASSESSMENT YEAR 2007-08 ON THE FOLLOWING GROUNDS:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE FOLLOWIN G ACTIONS OF THE AO 1. IN CONDUCTING THE ASSESSMENT PROCEEDINGS ARBITRARIL Y IN HASTE ON PRESUMPTION BASIS AND CONTRARY TO THE PRINCIPLE OF NATURAL JUSTICE. 2. IN MAKING ADDITION OF RS. 5 LACS TO THE RETURNED IN COME U/S. 68 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED. THE ABOVE ACTION BEING ARBITRARY, ERRONEOUS, MISCONCEIVED AND UNJUST MUST BE QUASHED WITH DIRECTIONS FOR RELIEF. 2 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF BREVITY. 3. DURING THE COURSE OF HEARING, LD. A.R. OF THE A SSESSEE STATED THAT LD. CIT(A) ERRED IN CONFIRMING ACTIONS OF THE AO IN CONDUCTING THE ASSESSMENT PROCEEDINGS ARBITRARILY IN HASTE ON PRESUMPTION BASIS AND CONTRARY TO THE PRINCIPLE OF NATURAL JUSTICE. HE FURTHER DRAW MY ATTENTION TOWARDS AN AFFIDAVIT DATED 23.11.2016 FI LED BY SH. DINESH GUPTA, S/O LATE SH. GANPAT RAI, WHO IS CHARTERED AC COUNTANT OF THE ASSESSEE STATING THEREIN THAT HE APPEARED BEFORE TH E CIT(A)-5, NEW DELHI ON BEHALF OF THE ASSESSEE AND STATED THAT DUR ING THE PROCEEDINGS BEFORE THE LD. CIT(A), LD. CIT(A) NEVER CONFRONTED HIM IN ANY MANNER, THE PARTICULARS AS FORM PART OF PARA 6.2 TO PARA 6. 7 OF THE ORDER DATED 7.4.2016. THEREFORE, HE REQUESTED THAT THE ISSUE IN DISPUTE MAY BE REMITTED BACK TO THE FILE OF THE AO TO CONSIDER THE SAME AFRESH UNDER THE LAW AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. ON THE CONTRARY, LD. DR OPPOSED THE REQUEST OF T HE LD. COUNSEL OF THE ASSESSEE AND RELIED UPON THE ORDERS OF THE A UTHORITIES BELOW. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS. I HAVE GONE THROUGH THE ORDER PASSED BY THE REVENUE AUTHOR ITIES ESPECIALLY THE IMPUGNED ORDER AS WELL AS THE AFFIDAVIT FILED BY SH. DINESH GUPTA, CA OF THE ASSESSEE. FOR THE SAKE OF CONVENIE NCE, I AM REPRODUCING HEREWITH THE CONTENTS OF THE AFFIDAVIT FILED BY SH. DINESH GUPTA, CA AS UNDER:- AFFIDAVIT I, DINESH GUPTA SON OF LATE SRI GANPATI RAI ABOUT 67 YEARS, RESIDENT OF D-802, NEW FRIENDS 3 COLONY, NEW DELHI-110 025 DO HEREBY SOLEMNLY STATE AND AFFIRM AS UNDER:- 1. THAT I AM A CHARTERED ACCOUNTANT IN PRACTICE WITH MEMBERSHIP NO. 014297. 2. THAT I HAD APPEARED BEFORE THE SAID CIT(A)-5, NEW DELHI, IN APPEAL NUMBER 887/2014-15 FOR AY 2007- 07; 3. THAT DURING THE SAID PROCEEDINGS, THE SAID CIT(A) NEVER CONFRONTED ME IN ANY MANNER, THE PARTICULARS AS FORM PART OF PARA 6.2 TO PARA 6.7 OF THE ORDER DATED 07.4.2016. DEPONENT VERIFICATION I, DINESH GUPTA, THE ABOVE NAMED DEPONENT, HEREBY STATE THAT THE ABOVE CONTENTS ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. VERIFIED TODAY ON THE 23 RD DAY OF NOVEMBER, 2016. DEPONENT 5.1 FOR FURTHER CLARITY, THE RELEVANT PARA NO. 6.2 TO 6.7 OF THE IMPUGNED ORDER IS ALSO REQUIRED TO BE REPRODUCED HE REUNDER:- 6.2 IT IS IN THIS BACKGROUND WHERE THE COURTS HAVE HELD THAT THE ONUS IS CAST ON THE ASSESSEE TO PROVE TO THE SA TISFACTION OF THE A.O., THE SOURCE OF THE CASH CREDIT THAT THE FACTS OF THE PRESENT CASE NEED TO BE ANALYZED. IT IS NOTED THAT SH. RAJVIR SINGH WAS THE DIRECTOR OF BSA FINCAP (P) LTD. AND I T WAS HIS CONFIRMATION THAT WAS FILED DURING THE ASSESSMENT PROCEEDINGS. IN THE UNDATED CONFIRMATION LETTER AVA ILABLE IN 4 THE ASSESSMENT FOLDER, THE ADDRESS OF THE COMPANY W AS FURNISHED AS FLAT NO. 54, CHETAN APARTMENT, PATPARG ANJ, NEW DELHI-LL0092. THE BANK STATEMENT FILED BEFORE T HE AO WITH ABN AMRO BANK SHOWED THE ADDRESS AS A-163, 1 ST FLOOR, RAMPRASTHA, GHAZIABAD, U.P. IN THE APPELLATE PROCEEDINGS, THE LETTER OF SH. RAJVIR SINGH, DIRECT OR BSA FINCAP (P) LTD. DATED 28.06.2014 ADDRESSED TO THE A O MENTIONS THE ADDRESS OF THE COMPANY AS 27/53, 2ND F LOOR, OLD RAJINDER NAGAR, NEW DELHI. IN THE APPLICATION F ORM FOR EQUITY SHARES THE PAN OF THE SAID COMPANY MENTIONED AS AABCB8568N WHEREAS THE PAN CARD FILED WITH THE AO SHOWS THE PAN TO BE AAACB8895P. IN OTHER WORDS, IN VIEW OF THE CONFLICTING ADDRESS AND PAN PROVIDED TO THE AO AND IN THE PRESENT PROCEEDINGS, THE IDENTITY OF THE SHARE APPLICANT COMPANY IS NOT PROVED. ONE OF THE CONTENTIONS RAISE D BEFORE THE AO AND DURING THE PRESENT PROCEEDINGS IS THAT T HE AO DOES NOT APPEAR TO BE AWARE AS TO WHETHER THERE WAS A SEARCH OR SURVEY CONDUCTED BY THE INVESTIGATION WIN G, WHETHER THE DIRECTORS OF THE SAID COMPANY WERE INTE RROGATED OR NOT AND WHETHER THE AO WAS IN POSSESSION OF THE CONFESSIONAL STATEMENT OF THE DIRECTOR OF THE SAID COMPANY OR NOT. THIS ASPECT HAS NOT BEEN DISCUSSED BY THE AO I N THE ASSESSMENT ORDER BUT IT IS SEEN FROM THE RECORD THA T THE AO REPLIED TO THE APPELLANT IN THE LETTER DATED 27.06. 2014, MEETING HIS OBJECTIONS TO THE REOPENING, STATING TH AT THE SURVEY OPERATIONS REVEALED THAT SH. NIRBHAY S. GUPT A SH, RAJIV GUPTA, SH. SHYAM SHANKAR GUPTA AND SH. MADAN GUPTA WERE INVOLVED IN PROVIDING BOGUS ACCOMMODATIO N ENTRIES IN THEIR RESPECTIVE STATEMENTS BEFORE THE I NVESTIGATION WING. THE INFORMATION RECEIVED FROM THE WING THAT T HE APPELLANT HAD RECEIVED AN ACCOMMODATION ENTRY OF RS . 5 5 LACS THROUGH CHEQUE NO. 502563 DATED 12.12.2006 DRA WN ON ABN AMRO BANK WAS CORROBORATED FROM THE RETURN O F INCOME FILED WHICH REVEALED THAT THE ISSUED CAPITAL HAD BEEN ENHANCED BY RS. 10 LACS WITH THE SECURITY PREMIUM O F RS. 40 LACS, INCLUDED IN THIS AMOUNT WAS THE SHARE CAPITAL OF RS. 1 LAC AND PREMIUM OF RS. 12 LACS RECEIVED FROM BSA FI NCAP (P) LTD. PERUSAL OF THE RECORD DOES SHOW THAT THE SURVE YS CARRIED OUT ON 23.08.2008 AT DIFFERENT PREMISES CON CLUSIVELY ESTABLISHED THAT THE MODUS OPERANDI THAT WAS ADOPTE D BY THE ENTRY PROVIDERS SH. NIRBHAY S. GUPTA SH. RAJIV GUPTA, SH. SHYAM SHANKAR GUPTA AND SH. MADAN GUPTA AND THE BENEFICIARY COMPANIES SUCH AS THE APPELLANT, WAS TO CREATE A WEB OF BOGUS PRIVATE LIMITED COMPANIES, PROPRIETA RY CONCERNS AND OTHER SUCH ENTITIES AND TRANSFER THE UNACCOUNTED MONEY THROUGH A MAZE OF TRANSFERS FROM ONE ENTITY TO THE OTHER IN ORDER TO CAMOUFLAGE THE IMPU GNED TRANSACTIONS. BSA FINCAP (P) LTD. IS ONE OF THE SHA RE INVESTORS IN THE APPELLANT COMPANY INCLUDED IN THE LIST OF COMPANIES THAT WERE CREATED AND MANAGED BY THESE PERSONS AND ONE SH. RAJVIR SINGH WAS PLACED AS DIRE CTOR OF THE SAID COMPANY. MOREOVER, THE CONFESSIONAL STATEM ENT OF SH. RAJVIR SINGH, HAS EVIDENTIARY VALUE EVEN THOUGH IT WAS RECORDED . DURING SURVEY PROCEEDINGS AND, TO THE BE ST OF MY KNOWLEDGE, HAS NOT BEEN RETRACTED SO FAR. 6.3 IN HIS STATEMENT THAT 01.12.2008 RECORDED U/S 1 31(1A), SH. RAJVIR SINGH DEPOSED THAT HE WAS DIRECTOR IN TW O COMPANIES M/S URI CIVIL ENGINEERS PVT. LTD. & M/S B SA FINCAP PVT. LTD. ALONGWITH HIS WIFE SMT. KIRAN SING H AND THAT THERE WAS NO BUSINESS CARRIED OUT BY THESE COM PANIES. HE ADMITTED THAT THESE COMPANIES HAD NO REAL BUSINE SS BUT WERE USED TO PROVIDE ACCOMMODATION ENTRIES. WITH RE FERENCE 6 TO THE QUESTION NO. 6, HE CLARIFIED THAT THE PAGES 1 TO 6 OF THE SEIZED DOCUMENTS ANNEXURE-A-1 CONTAIN THE DETAILS O F THE BOGUS BILLING RECEIPTS GIVEN TO ANOTHER COMPANY M/S EVER- LIKE BUILDCON PVT. LTD. HE MENTIONED THAT THE BOGUS BILLING WAS AROUND RS. 41,00,000/- ON WHICH HE RECEIVED COMMISSION. FURTHER IN HIS REPLY TO QUESTION NO. 6 , AT PAGE 4 OF THE STATEMENT, SH. SINGH CLARIFIED THAT HE ARRAN GES ACCOMMODATION ENTRY FOR THOSE BENEFICIARY COMPANIES , PAPER COMPANIES AND MEDIATOR COMPANIES WHO REQUIRE SUCH ENTRIES. IN THE SUBSEQUENT STATEMENT RECORDED ON 08.12.2008, SH. RAJVIR SINGH CORRELATED ALL THE SEI ZED MATERIAL AVAILABLE IN ANNEXURES A-12 TO A-20 WITH ANNEXURES B-10 TO B-18 TO CONCLUSIVELY REVEAL THAT M/S SLF FINLEASE PVT. LTD., M/S PANWARIA REAL ESTATE PVT. L TD., M/S MARRASS INDUSTRIES PVT. LTD., M/S SAGGI TRU EXIM AN D M/S SG BUILDCON PVT. LTD. WERE ALL PAPER COMPANIES. THE APPELLANT HAS NOT ONLY FAILED TO PRODUCE SH. RAJVIR SO FAR NOT SOUGHT ANY OPPORTUNITY TO CROSS EXAMINE SH. RAJVIR SINGH WHO WAS A DIRECTOR IN THE SHARE HOLDING COMPANY, PARTICULARLY WHEN HE HAS CLARIFIED ON OATH THAT THE SE TWO COMPANIES M/S URI CIVIL ENGINEERS PVT. LTD. & M/S B SA FINCAP PVT. LTD. WERE ACTUALLY PAPER COMPANIES WHIC H HAD NO REAL BUSINESS EXCEPT FOR PROVIDING ACCOMMODATION ENTRIES. IT IS RELEVANT TO MENTION HERE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CONFIRMATIONS OF THE SUBSCRIBERS OF CAPITAL TO WHOM SHARES WERE NOT ALLO TTED AND CONSEQUENTLY AMOUNTS WERE REFUNDED HAVE BEEN ATTACH ED. THESE CONFIRMATIONS PERTAIN TO SHARE HOLDERS SMT. D ARSHAN DEVI, SH. JAI PRAKASH GUPTA, JAI PRAKASH GUPTA(HUF) , RENU GUPTA, SEEMA GUPTA AND SHASHI GUPTA. THE NAME OF BS A FINCAP (P) LTD. DOES NOT FIGURE IN THE LIST OF SHAR ES 7 SUBSCRIBERS WHO WERE NOT ALLOTTED SHARES. IN MY VIE W THEREFORE, THE OBJECTIONS OF THE APPELLANT THAT SH. RAJVIR SINGH HAS NOT NAMED ITS OWN NAME IN THE STATEMENT RECORDED NOR REVEALED THE NATURE OF THE TRANSACTION S BETWEEN THE APPELLANT AND ITS SHAREHOLDERS, OR THAT IT HAD NO CONTINUED CONTACT WITH M/S. BSA FINCAP (P) LTD. ARE NOT JUSTIFIED. 6.4 THE ISSUE RELATING TO ACCOMMODATION ENTRIES PRO VIDED BY THE VERY SAME COMPANY M/S BSA FINCAP (P) LTD. AROSE IN THE APPELLATE PROCEEDINGS BEFORE THE UNDERSIGNED IN THE CASE OF MIS. LAM HOLDINGS (P) LTD. IN APPEAL NO. DEL/CIT(A) - S/0133/2013-14 AND A DETAILED ORDER WAS PASSED BASE D ON THE ASSESSMENT RECORD AND FURTHER ENQUIRIES MADE THROUGH THE AO. IT WAS FOUND THAT BSA FINCAP (P) LT D. ALONG WITH SOME OF THE OTHER COMPANIES MANAGED BY THE ENT RY OPERATORS HAD NO REAL BUSINESS ALTHOUGH THE TRANSAC TIONS IN THEIR BANK ACCOUNT RAN INTO CRORES OF RUPEES. YET T HESE COMPANIES WERE NOT FILING RETURNS OF INCOME. IT WOU LD BE USEFUL TO REPRODUCE THE OPERATIVE PART OF THE APPEL LATE ORDER, HEREINAFTER, WHICH WOULD SUPPORT MY CASE THAT THE S HARE HOLDING COMPANY HAD NO REAL IDENTITY NOR CREDITWORT HINESS: '3.3.3.2 MOREOVER, A/THOUGH NOT DISCUSSED BY THE AO IN THE IMPUGNED ORDER, I FIND THAT THE AO HAD MADE ENQUIRI ES WITH THE KOTAK MAHINDRA BANK, SARITA VIHAR BRANCH WHEREI N HE RECEIVED THE BANK STATEMENTS AND DETAILS REGARDING OPENING AND CLOSING OF ACCOUNT OF THE IMPUGNED SHARE HOLDER S WHICH WERE AS UNDER: S.NO. CUSTOMERS NAME A/C NAME A/C OPENING DATE A/C CLOSING DATE TOTAL FUNDS TRANSACTED 1 BSA FINCAP PVT. LTD. 01722000009311 30.9.2005 3.3.2008 5,01,85,161 2 BSA FINCAP 01832000000745 07.2.2007 3.10.2009 12,94,99,832 8 PVT. LTD. 3 URI CIVIL ENGINEERS P LTD. 0172200001202 28.2.2006 16.3.2009 8,89,10,027 4 MARRASS INDUSTRIES P LTD. 01722000010816 19.12.2005 31.3.2008 7,59,04,685 5 MARRASS INDUSTRIES P LTD. 0183200000798 30.1.2007 3.3.2009 7,73,24,976 3.3.3.3 PERUSAL OF THE ACCOUNT OPENING FORM REVEALS THE FOLLOWING DETAILS REGARDING THE DIRECTORSHIP OF THE SE COMPANIES: S.NO. NAME ADDRESS ERSTWHILE DIRECTORS DIRECTORS AT THE TIME OF OPENING OF BANK A/C 1 MARASS INDUSTRIES PVT. LTD. F-24, SECOND FLOOR, JAWAHAR PARK, LAXMI NAGAR, DELHI MAHADEV SINGH, MANJUL KUMARI SINGH, MAHENDRA PRATAP SINGH & RAJESH KUMAR SINGH RAJVIR SINGH AND RAJKUMAR TIWARI 2 URI CIVIL ENGINEERS PVT. LTD. F-24, SECOND FLOOR, JAWAHAR PARK, LAXMI NAGAR, DELHI RAJVIR SINGH AND RAJVIR SINGH & RAJKUMAR 3 BSA FINCAP P LTD. A-163,. RAM PRASTHA, GHAZIABAD SURESH KR. SINGLA & ARUN KR. BANSAL RAJVIR SINGH AND SUCHI PATWARI 3.3.3.4 PERUSAL OF THE ACCOUNT OPENING FORMS SHOWS THAT THE EARLIER DIRECTORS OF MARRASS INDUSTRIES PVT. LTD. & BSA 9 FINCAP P. LTD. RESIGNED W.E.F. 05.09.2005 AND 17.03 .2005 RESPECTIVELY AND THE PRESENT DIRECTORS WERE APPOINT ED FROM THE VERY NEXT DAY. THE BANK STATEMENTS WHICH WERE RECEIVED FROM THE KOTAK MAHINDRA BANK REVEAL THE CL ASSIC SIGNS OF A BOGUS COMPANY WHEREIN FUNDS ARE RECEIVED FROM CERTAIN ENTITIES AND TRANSFERRED TO OTHER ENTITIES. THE TOTAL TRANSACTION AS PER THE BANK ACCOUNTS OF THESE COMPA NIES AS PER THE ABOVE MENTIONED TABLE RUNS INTO CRORES OF R UPEES AND YET IT SEEMS AS IF THESE COMPANIES DID NOT TRANSACT ION ANY REAL BUSINESS. I ALSO FIND THAT IN THE LETTER ENCLO SING THE CONFIRMATIONS THE APPELLANT HAS NOT ENCLOSED ANY SU PPORTING DOCUMENTS SUCH AS THE INCOME TAX RETURNS, ETC AND H ENCE THE CREDITWORTHINESS OF THESE COMPANIES HAVE NOT BE EN PROVED. ENQUIRIES WERE MADE THROUGH THE ADDL. CIT, RANGES 14 & 15, NEW DELHI AND IT WAS FOUND THAT NO RETURNS OR NEGLIGIBLE/NIL RETURNS HAVE BEEN FILED BY THESE COM PANIES FOR THE ASSESSMENT YEAR UNDER APPEAL AS WELL AS THE PRE CEDING ASSESSMENT YEAR. THE FACTUAL POSITION OF THE RETURN S FILED ARE AS UNDER: S.N PAN NAME OF THE CASE AO RETURNED INCOME 2007-08 RETURNED INCOME 2008-09 1 AACCP8523E PANWARIA REAL ESTATE WARD 19(3) NO RETURN NO RETURN 2 AAACU0860D URI CIVIL ENGINEERING CENTRA L CIRCLE- 6 NIL NO RETURN 3 AACCM3761B MARRASS INDUSTRIES PVT. LTD. WARD 16(2) NIL NO RETURN 4 AABCB8568N) BSA FINCAP PVT. LTD. WARD 4(1) RS. 180/- NO RETURN 6.5 COMING TO THE FACTS OF THE CASE, IT IS SEEN FR OM THE RECORD THAT THE AO HAS MADE NO ADDITION IN RESPECT OF THOSE SHARE HOLDERS WHOSE CONFIRMATIONS HE RECEIVED BUT L IMITED 10 THE ADDITION MADE ONLY TO THE COMPANY IN RESPECT OF WHICH NO REPLY WAS RECEIVED AND WHOSE CREDITWORTHINESS WE RE NOT PROVED BY THE APPELLANT. MOREOVER, IT IS SEEN THAT OUT OF THE TOTAL SHARE HOLDING THAT HAS BEEN TREATED AS UNEXPL AINED CASH CREDIT BY THE AO, 80% OF THE SAME REPRESENTS P REMIUM PAID ON SHARES. THAT MEANS FOR EVERY SHARE OF THE F ACE VALUE OF RS. 10, PREMIUM OF RS. 40 HAS BEEN RECEIVED. WHE N WE EXAMINE THE HISTORY OF THE APPELLANT'S FINANCIAL ST ATUS, IT IS FOUND THAT THE APPELLANT IS IN RECEIPT OF COMMISSIO N INCOME, AND INTEREST INCOME TO THE EXTENT OF ONLY RS.3,05,O OO/-. HENCE, IT IS NOT IN THE REALM OF HUMAN PROBABILITIE S THAT SHARE PREMIUM WOULD BE PAID BY OTHER COMPANIES TO M AKE INVESTMENTS IN A SMALL COMPANY HAVING NO TRACK RECO RD IN BUSINESS. IN THIS REGARD THE DELHI HIGH COURT IN TH E CASE OF NIPUN BUILDERS AND DEVELOPERS PVT. LTD (30 TAXMANN. COM 292), HELD THAT IN VIEW OF THE CONTINUING CONTACT A ND RELATIONSHIP BETWEEN A PRIVATE LIMITED COMPANY AND ITS SHARE HOLDERS, IT WAS IN THE ASSESSEE'S OWN INTERES T TO HAVE ACTIVELY PARTICIPATED AND COOPERATED IN THE ASSESSM ENT PROCEEDINGS BY PRODUCING THE PRINCIPAL OFFICERS OF THE SUBSCRIBING COMPANIES. IN THE PRESENT CASE ALSO, TH E AO DID CALL UPON THE APPELLANT TO PRODUCE THE SHAREHOLDER COMPANY FOR PERSONAL DEPOSITION DURING THE COURSE OF ASSESS MENT PROCEEDINGS. THE APPELLANT'S CONTENTION IS THAT FUR THER ENQUIRIES SHOULD HAVE BEEN CONDUCTED BY THE AO TO E XAMINE THE GENUINENESS OF ASSESSEE'S CLAIM VIZ-A-VIZ INFOR MATION RECEIVED FROM THE INVESTIGATION WING AND THAT THE A O SHOULD HAVE MADE ATTEMPT TO ENFORCE THE ATTENDANCE OF SHAR E HOLDER. THIS CONTENTION IS WITHOUT ANY BASIS AS IT IS SEEN FROM THE RECORD, THE INQUIRY LETTER ISSUED WAS NOT COMPLIED WITH NOR DID THE APPELLANT PRODUCE THE 'DIRECTORS O F THE 11 COMPANY FOR PERSONAL DEPOSITION DESPITE DUE OPPORTU NITIES. THEREFORE, FOR THE APPELLANT TO STATE THAT THE AO H AS NOT DONE DUE DILIGENCE IS COMPLETELY UNJUSTIFIED AS THE IDEN TITY OF THE PER-SONS HAVE NOT BEEN PROVED BY THE APPELLANT. THE APPELLANT IS A PRIVATE LIMITED COMPANY AND WOULD DE PEND UPON PERSONS KNOWN TO ITS DIRECTORS/SHAREHOLDERS DI RECTLY OR INDIRECTLY TO BUY ITS SHARES. IT CANNOT BE SAID THA T THERE IS NO EXISTING RELATIONSHIP BETWEEN IT AND ITS SHAREHOLDE RS ONCE THE SHARES HAVE BEEN ISSUED. THE AMOUNTS DUE ON SHA RES HAVE TO BE PAID AND IN CASE DIVIDENDS ARE DECLARED THE WARRANTS HAVE TO BE SENT TO THE SHAREHOLDERS, THERE FORE TO SAY THAT THE AO IS DUTY BOUND TO ENFORCE THEIR ATTE NDANCE IS UNREASONABLE SINCE THE ONUS RESTS ON THE APPELLANT TO PROVIDE THE BASIC MINIMUM- IDENTITY OF THE SHAREHOL DERS. RATHER, THE RESULTS OF THE INVESTIGATION DONE BY TH E WING COUPLED WITH THE FACTS RELATING TO THE FAILURE ON T HE PART OF THE APPELLANT TO ESTABLISH THE CREDITWORTHINESS AND GENUINENESS OF THE SHARE HOLDER COMPANY SHOW THAT T HE SHARE HOLDER M/S BSA FINCAP P. LTD. COULD BE CONCLU SIVELY SAID TO BE A DUMMY COMPANY FLOATED BY THE GUPTAS' I N ORDER TO ACCOMMODATE THE APPELLANT COMPANY IN THE DUBIOUS TRANSACTION OF ARRANGING SHARE HOLDING FROM OUT OF ITS OWN UNACCOUNTED FUNDS. 6.6 IN THE CASE OF NOVA PROMOTERS AND FINLEASE PVT. LTD. (342 ITR 169) THE HON'BLE DELHI HIGH COURT WAS SEIZ ED WITH FACTS WHICH STOOD ON A BETTER FOOTING THAT THE APPE LLANT'S CASE AS THE AFFIDAVITS OF THE ENTRY PROVIDERS AND T HE DIRECTORS OF THE BOGUS COMPANIES HAD BEEN FILED BEF ORE THE AO TO SUPPORT THE STAND THAT THE SHARE HOLDING MONI ES HAD BEEN RECEIVED FROM GENUINE SOURCES. THE HIGH COURT HELD THAT THE FACT THAT THE SHARE HOLDING AMOUNTS WERE R ECEIVED 12 BY ACCOUNT PAYEE CHEQUES AND THE SHARE HOLDING COMP ANIES WERE DULY REGISTERED BY ROC WERE NEUTRAL FACTS WHIC H DID NOT MAKE THE TRANSACTIONS GENUINE. THE RELEVANT OBSERVATIONS OF THE HIGH COURT ARE AS UNDER: WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLIC ANTS SUCH 'AS THEIR NAMES AND ADDRESSES, INCOME TAX FILE NUMB ERS, THEIR CREDITWORTHINESS, SHARE APPLICATION FORMS AND SHARE HOLDERS' REGISTER, SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATER IAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE F ALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY UNDER SECTION 68 AND THE REMED Y OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLIC ANTS IN ACCORDANCE WITH LAW. HOWEVER, THE COURT CANNOT APPL Y THE RATIO TO A CASE, SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHES THE PARTICULARS FURNISHED' BY THE ASS ESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF-CONFESSE D 'ACCOMMODATION ENTRY PROVIDERS', WHOSE BUSINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT TH EIR UNACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION, AND THE ASSESSEE. THE RATIO IS INAPPL ICABLE TO A CASE, AGAIN SUCH AS THE PRESENT ONE, WHERE THE INVO LVEMENT OF THE' ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDICATED BY VALID MATERIAL MADE AVAILABLE TO THE ASSESSING O FFICER AS A RESULT OF INVESTIGATIONS CARRIED OUT BY THE REVEN UE AUTHORITIES INTO THE ACTIVITIES OF SUCH 'ENTRY PROV IDERS'. THE EXISTENCE WITH THE ASSESSING OFFICER OF MATERIAL SH OWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE- MEDITATED PLAN - A SMOKESCREEN - CONCEIVED AND EXEC UTED 13 WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABILITY OF THE RATIO. THE RATIO IS ATTRAC TED TO A CASE WHERE IT IS A SIMPLE QUESTION OF WHETHER THE ASSESS EE HAS DISCHARGED THE BURDEN PLACED UPON HIM UNDER SECTION 68 TO PROVE AND ESTABLISH THE IDENTITY AND CREDITWORTHINE SS OF THE SHARE APPLICANT AND THE GENUINENESS OF THE TRANSACT ION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVI DENCE OR MATERIAL IN HIS POSSESSION AND THEN COME FORWARD TO MERELY REJECT THE SAME, WITHOUT CARRYING OUT ANY VERIFICAT ION OR ENQUIRY INTO THE MATERIAL PLACED BEFORE HIM. THE IN STANT CASE DOES NOT FALL UNDER THIS CATEGORY AND IT WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTR ARY. [PARA 381] 41. IN THE CASE BEFORE US, NOT ONLY DID THE MATERIA L BEFORE THE ASSESSING OFFICER SHOW THE LINK BETWEEN THE ENT RY PROVIDERS AND THE ASSESSEE-COMPANY, BUT THE ASSESSI NG OFFICER HAD ALSO PROVIDED THE STATEMENTS OF MUKESH GUPTA AND RAJAN JASSAL TO THE ASSESSEE IN COMPLIANCE WITH THE RULES OF NATURAL JUSTICE. OUT OF THE 22 COMPANIES W HOSE NAMES FIGURED IN THE INFORMATION GIVEN BY THEM TO T HE INVESTIGATION WING, 15 COMPANIES HAD PROVIDED THE S O-CALLED 'SHARE SUBSCRIPTION MONIES' TO THE ASSESSEE. THERE WAS THUS SPECIFIC INVOLVEMENT OF THE ASSESSEE-COMPANY IN THE MODUS OPERANDI FOLLOWED BY MUKESH GUPTA AND RAJAN JASSAL. THUS, ON CRUCIAL FACTUAL ASPECTS THE PRESENT CASE S TANDS ON A COMPLETELY DIFFERENT FOOTING FROM THE CASE OF OAS IS HOSPITALITIES (P.) LTD. (SUPRA).' 6.6.1 IN A SUBSEQUENT DECISION, THE DELHI HIGH COUR T IN THE CASE OF N.TARIKA PROPERTY INVESTMENTS (P) LTD (221 TAXMAN 14 14) REITERATED ITS EARLIER DECISION IN THE CASE OF CITV. NR PORTFOLIO (P.) LTD [IT APPEAL NO. 1018 OF 2011 AND 1019 OF 2011] VIDE JUDGMENT DATED 22ND NOVEMBER, 2013 THAT MERE PRODUCTION OF PAN NUMBER OR ASSESSMENT PARTICULARS DOES NOT ESTABLISH THE IDENTITY OF A PERSON. THE IDENTIF ICATION OF A PERSON INCLUDES THE ,PLACE OF WORK, THE STAFF AND T HE FACT THAT IT WAS ACTUALLY CARRYING ON BUSINESS AND FURTH ER RECOGNITION OF THE SAID COMPANY/INDIVIDUAL IN THE E YES OF PUBLIC. THE RELEVANT PART OF THE ORDER READS AS UND ER: 'AS WE HAVE HELD THAT PAN NUMBERS ARE ALLOTTED ON THE BASIS OF APPLICATIONS WITHOUT ACTUAL DE FACTO VERIFICATION OF THE IDENTITY OR ASCERTAINMENT OF TH E ACTIVE NATURE OF BUSINESS ACTIVITY. PAN NUMBER IS ALLOTTED AS A FACILITY TO REVENUE TO KEEP TRACK OF TRANSACTIONS. THE PAN NUMBER CANNOT BE BLINDLY AND WITHOUT CONSIDERATION OF SURROUNDING CIRCUMSTANCES TREATED AS SUFFICIENTLY DISCLOSING THE IDENTITY OF THE INDIVIDUAL. THE MERE FILING OF SHARE APPLICATION IS NOT ENOUGH AS THE SAID APPLICATION IS NOT AN UNIMPEACHABLE DOCUMENT AND DOES NOT ON ITS OWN PROVE THE GENUINENESS OR AUTHENTICITY OF THE TRANSACTION. IT CAN AT BEST BE TREATED AS A CORROBO RATIVE DOCUMENT. SINCE THE SHARE APPLICATION FORM IS NOT A N UNIMPEACHABLE DOCUMENT, IT CANNOT ON ITS OWN BE TREATED AS SUFFICIENT FOR CROSS-VERIFICATION OF THE TRANSACTION. WE HAVE ALREADY HELD THAT THAT MERE PRODUCTION OF PAN NUMBER OR ASSESSMENT PARTICULARS DOES NOT ESTABLISH THE IDENTITY OF A PERSON. THE IDENTIFICATION OF A PERSON INCLUDES THE PLACE OF WO RK, THE STAFF AND THE FACT THAT IT WAS ACTUALLY CARRYIN G ON 15 BUSINESS AND FURTHER RECOGNITION OF THE SAID COMPANY/INDIVIDUAL IN THE EYES OF PUBLIC. 6.6.2 IN THE PRESENT CASE, THE PLEA TAKEN IS THAT T HE SHAREHOLDING HAD CHANGED AND HENCE, IT HAD DISCHARGED ITS OBLIGATION. THIS PLEA SUPPORTS THE S TAND OF THE AO AND MY FINDING THAT THE IMPUGNED TRANSACTIONS ARE NOT GENUINE. NO REASONABLE INVESTO R WOULD INVEST IN SHARES AT A PREMIUM WHICH IS EQUAL TO THE FACE VALUE OF THE SHARE AND THEREAFTER, DISINVE ST IN THE SHARES AT PAR. THIS SHOWS THAT THE SHARE HOLDER S ARE NOT GENUINE SHARE HOLDERS BUT HAVE BEEN USED AS A FRONT TO UTILIZE THE ASSESSEE'S OWN FUNDS. THE APPELLANT HAS TAKEN THE CONVENIENT PLEA DURING ASSESSMENT PROCEEDINGS THAT THE SHARE HOLDER HAD DIVESTED ITSELF FROM THE SHARES AND HENCE, EXPRESSE D ITS INABILITY TO PRODUCE THE DIRECTORS OF THIS COMP ANY. SUFFICE IT TO SAY THAT THE APPELLANT COMPANY HAS FA ILED TO DISCHARGE ITS ONUS OF PROVING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE IMPUGNED SHARE HOLDER. WHEN THE AO TRIED TO MAKE INQUIRIES UNDER THE PROVISIONS OF SECTION 133(6) DATED 11.07.2014, FROM THE SHARE HOLDER, M/S. BSA FINCAP (P) LTD. AS PER THE ADDRESS FURNISHED IN THE CONFIRMATION, NAMELY FLAT NO. 54, CHETAN APARTMENT, PATPARGANJ, DELHI-110092, IT YIELDED NO REPLY. I AM UNABLE TO ACCEPT THE APPELLANT'S PLEA THAT THE ASSESSMENT HAS BEEN COMPLETED IN A HURRY WITHOUT WAITING FOR THE REPLY FROM THE SHARE HOLDER WHICH W AS DULY DISPATCHED TO THE AO, ALTHOUGH BELATEDLY. THE REASONS FOR THE SAME ARE THAT FIRSTLY, THE SO CALLE D CONFIRMATION OF THIS COMPANY IS DATED 28.06.2014, 16 WHICH IS PRIOR TO THE ISSUANCE OF THE QUERY LETTER OF THE AO AND SECONDLY, BECAUSE THE SAID LETTER HAS BEEN DISPATCHED AS PER RECORD ON 25.08.2014, 'AFTER THE ASSESSMENT ORDER WAS PASSED ON 31.07.2014 AND RECEIVED BY THE APPELLANT. IT IS CURIOUS TO NOTE TH AT, SIMULTANEOUS TO THE DISPATCH OF THIS CONFIRMATION L ETTER SIGNED BY SH. RAJVIR SINGH TO THE AO ON 25.08.2014, THE APPELLANT FILED THE APPEAL ON THE VERY SAME DAT E ON 25.08.2014. IT IS VERY CLEAR FROM . THE CONDUCT OF THE APPELLANT THAT IT HAS UNDERTAKEN EVERY TRICK IN THE TRADE IN ORDER TO STAVE/WARD OFF ANY ENQUIRIES BY T HE AO INTO THE ACTUAL CONDUCT OF AFFAIRS AT THE END OF THE SHARE' HOLDER, IN ORDER TO COME TO A CONCLUSION WHE THER THE AMOUNT PAID INCLUSIVE OF PREMIUM', BY WAY OF' SHARE APPLICATION MONEY WAS EXPLAINED, GENUINE AND CREDITWORTHY. THEREFORE, THE ONUS THAT LAY ON THE APPELLANT IS FOUND TO HAVE NOT BEEN DISCHARGED; THE RE IS ALSO A CLEAR NEXUS BETWEEN THE ADVERSE MATERIAL FOUND BY THE INVESTIGATION WING IN THE FORM OF THE ADMISSION OF SH. RAJVIR SINGH, WHICH CLEARLY INDICA TES THE INVOLVEMENT OF THE APPELLANT COMPANY IN THE ENT IRE MODUS OPERANDI OF ARRANGING BOGUS ACCOMMODATION ENTRIES IN EXCHANGE OF COMMISSION, WHICH AS THE DEL HI HIGH COURT HELD IN THE CASE OF NOVA PROMOTERS AND FINLEASE PVT. LTD. (SUPRA) IS PART OF A PRE MEDITAT ED PLAN. THE NEXUS BETWEEN THE RECEIPT OF SHARE HOLDIN G MONEY INCLUSIVE OF PREMIUM AND THE ADVERSE MATERIAL IN THE FORM OF THE STATEMENT IS THUS ESTABLISHED. 6.7 INDIA HAS BEEN GRAPPLING WITH THE PROBLEM OF BL ACK MONEY SINCE THE LAST SEVERAL DECADES. THE GOVERNMEN T HAS SET UP VARIOUS COMMITTEES TO ASCERTAIN THE EXTE NT 17 AND NATURE OF THE GENERATION OF BLACK MONEY AND TO SUGGEST MEASURES TO TACKLE THE SAME. WHILE THE EXAC T QUANTIFICATION OF THE BLACK MONEY PRESENT IN THE ECONOMY HAS VARIED FORM COMMITTEE TO COMMITTEE, THERE HAS BEEN UNANIMOUS POLITICAL AS WELL AS PUBLI C OPINION THAT THE MENACE OF BLACK MONEY HAS TO BE ATTACKED AT THE GROUND LEVEL. THE PROBLEM REGARDING USE OF SHELL COMPANIES TO PROVIDE ACCOMMODATION ENTRIES TO LAUNDER BLACK MONEY HAS BEEN UNDER CONSIDERATION OF THE CBDT COMMITTEE ON 'MEASURES TO TACKLE BLACK MONEY IN INDIA AND ABROAD' AND ALSO TH E SPECIAL INVESTIGATION TEAM (SIT) FORMED BY THE GOVT . OF INDIA FOR PROVIDING EFFECTIVE DETERRENCE TO THOSE INDULGING IN THE CREATION OF THESE COMPANIES AND PROVIDING ACCOMMODATION ENTRIES. AT PAGES 73 TO 76 OF THE THIRD REPORT SUBMITTED, THE SIT HAS MADE CERTAI N RECOMMENDATIONS, WHICH ARE AVAILABLE BY WAY OF' A PRESS RELEASE BY THE GOVT. OF INDIA DATED 03.11.201 5 AS AVAILABLE IN THE PUBLIC DOMAIN WWW.FINMIN.NIC.IN : '(I) PROACTIVE DETECTION OF CREATION OF SHELL COMPANIES: SERIOUS FRAUDS INVESTIGATION OFFICE (SFIO) UNDER MINISTRY OF COMPANY NEEDS TO ACTIVELY AND REGULARLY MINE THE MCA 21 DATABASE FOR CERTAIN RED FLAG INDICATORS. THESE RED FLAG INDICATORS COULD BE BASED ON COMMON DIN NUMBERS IN MULTIPLE COMPANIES, COMPANIES WITH SAME ADDRESS, SAME CONTACT NUMBERS, USE OF ONLY MOBILE NUMBERS, SUDDEN AND UNEXPECTED CHANGE IN TURNOVER DECLARED IN RETURNS ETC. THESE INDICATORS ARE ILLUSTRATIVE IN NATURE AND THE SFIO OFFICE CAN PREPARE A SET OF INDICATORS BASED ON ITS 18 OWN EXPERIENCED. CONSULTATION WITH OTHER LAW ENFORCEMENT AGENCIES LIKE CBDT, ED AND FIU. (II) SHARING OF INFORMATION ON SUCH HIGH RISK COMPANIES WITH LAW ENFORCEMENT AGENCIES: ONCE CERTAIN COMPANIES ARE IDENTIFIED THROUGH DATA MINING ABOVE, THE LIST OF SUCH HIGH RISK COMPANIES SHOULD BE SHARED WITH CBDT AND FIU FOR CLOSER SURVEILLANCE. (III) IN CASE AFTER INVESTIGATION/ASSESSMENT BY CBDT, A CASE OF CREATING ACCOMMODATION ENTRIES IS CLEARLY ESTABLISHED, THE MATTER SHOULD BE REFERRED TO SFIO TO PROCEED UNDER RELEVANT SECTIONS OF IPC FOR FRAUD. SFIO SHOULD ALSO REFER THE MATTER TO ENFORCEMENT DIRECTORATE FOR TAKING ACTION UNDER PMLA FOR ALL SUCH CASES OF MONEY LAUNDERING. (IV) IT HAS ALSO BEEN OBSERVED THAT IN MANY CASES OF CREATION OF SHELL COMPANIES, THE SHAREHOLDERS OR DIRECTORS OF SUCH COMPANIES ARE PERSONS OF LIMITED FINANCIAL MEANS LIKE DRIVERS, COOKS OR OTHER EMPLOYEES OF MAIN PERSONS WHO INTEND TO LAUNDER BLACK MONEY. SECTION 89(1) AND 89(2) OF THE COMPANIES ACT, 2013 PROVIDES FOR PERSONS TO DECLARE IF THEY HAVE 'BENEFICIAL INTEREST' IN THE SHARES OF THE COMPANY OR NOT. SECTION 89(4) ENJOINS THE CENTRAL GOVERNMENT TO MAKE RULES TO PROVIDE FOR THE MANNER OF HOLDING AND DISCLOSING BENEFICIAL INTEREST AND BENEFICIAL OWNERSHIP 19 UNDER THIS SECTION. THE MINISTRY OF COMPANY AFFAIRS MAY FRAME SUCH RULES AT THE EARLIEST. THE SIT HAD REQUESTED MINISTRY OF CORPORATE AFFAIRS TO PROVIDE THE FOLLOWING DATA: I) PERSONS WHO HELD DIRECTORSHIP IN MORE THAN ONE COMPANY II) COMPANIES WHO HAVE THE SAME OFFICE ADDRESS THE DATA WAS SUBSEQUENTLY PROVIDED BY THE MINISTRY OF CORPORATE AFFAIRS. FROM A PERUSAL OF DATA GIVEN BY THE MINISTRY OF CORPORATE, THE FOLLOWING POINTS STAND OUT: (I) THERE ARE 2627 PERSONS HOLDING DIRECTORSHIP IN MORE THAN 20 COMPANIES IN VIOLATION OF SECTION 165 OF THE COMPANIES ACT, 2013. IT MAY BE MENTIONED THIS IS ALSO IN VIOLATION OF S. 275 OF THE ERSTWHILE COMPANIES ACT, 1956. THE TOTAL NUMBER OF COMPANIES INVOLVED IS 77696. (II) A TOTAL OF 345 ADDRESSES HAVE AT LEAST 20 COMPANIES OPERATING FROM THE SAME ADDRESS. THE TOTAL NUMBER OF COMPANIES SHARING THEIR ADDRESS WITH AT LEAST 19 MORE COMPANIES ARE 13581 IN NUMBER. WHILE THERE IS NO SPECIFIC ACT/RULE WHICH DEBARS COMPANIES FROM HAVING THE SAME ADDRESS, SIT HAS DESIRED GREATER VIGILANCE IS ACCORDED BY LAW ENFORCEMENT 20 AND INTELLIGENCE AGENCIES LIKE CBDT, CBEC, ED AND FIU WHILE EXAMINING THE OPERATIONS OF SUCH COMPANIES. THE SIT HAS REQUESTED MINISTRY OF COMPANY AFFAIRS TO TAKE NECESSARY ACTION WITH RESPECT TO VIOLATION OF THE COMPANIES ACT NOTED ABOVE. THE SIT HAS FURTHER REQUESTED CBDT, CBEC AND ENFORCEMENT DIRECTORATE TO UNDERTAKE DUE DILIGENCE ON THE COMPANIES DATA REFERRED TO ABOVE -: 6.7.1 IT MAY BE RECALLED THAT THE SIT ON BLACK MONE Y WAS SET UP AS A RESULT OF THE HON'BLE SUPREME COURT OF INDIA'S DIRECTIONS WHILE DEALING WITH A PUBLIC INTEREST LIT IGATION MATTER' ON THE SUBJECT. THE JUDICIARY AS WELL AS TH E GOVERNMENT ARE THEREFORE AWARE OF THE WIDESPREAD ME NACE OF BLACK MONEY AND STEPS ARE BEING TAKEN TO PROVIDE SUFFICIENT DETERRENCE AGAINST THOSE FOUND INDULGING IN THE PRACTICE OF CONVERTING BLACK MONEY INTO WHITE. THES E EFFORTS HAVE TAKEN THE SHAPE OF BLACK MONEY (UNDISCLOSED FO REIGN INCOME AND ASSETS) AND IMPOSITION OF TAX ACT, 2015 (POPULARLY BLACK MONEY ACT) PASSED RECENTLY BY THE PARLIAMENT, SIGNING OF DTAAS AND TIEAS SIGNED WITH MORE THAN 82 COUNTRIES AND SO ON. THE COURTS, INCLUDING THE UNDERSIGNED CANNOT, THEREFORE REMAIN OBLIVIOUS OF T HE HAPPENINGS IN REAL TIME WHEREIN THE PUBLIC AND COLL ECTIVE CONSCIENCE GLOBALLY IS TO CONFRONT AND REMOVE THE S COURGE OF BLACK MONEY FROM THE ECONOMY. MOREOVER, ON THE CUMU LATIVE CONSIDERATION OF FACTS AVAILABLE ON RECORD, WHICH M AKES IT APPARENT THAT THE APPELLANT COMPANY WAS A BENEFICIA RY IN THE RECEIPT OF ACCOMMODATION ENTRIES FROM THE COMPA NIES FLOATED AND CONTROLLED BY SH. NIRBHAY SHANKAR GUPTA , SH. 21 SHYAM SHANKAR GUPTA, SH. RAJIV KUMAR GUPTA AND SH. MADAN GUPTA, THE DOCUMENTARY EVIDENCES THAT HAVE BE EN FURNISHED BEFORE THE AO DURING THE ASSESSMENT PROCE EDINGS AND THE UNDERSIGNED, IN RESPECT OF THE CASH CREDITS IN THE FORM OF SHARE HOLDER'S FUNDS ARE FOUND TO BE EVIDEN CES FABRICATED IN ORDER TO MAKE THEM APPEAR REAL. MOREO VER, THE APPELLANT IS TOTALLY SILENT ABOUT THE NATURE AND SO URCES OF THE AMOUNT CREDITED IN THE BOOKS OF ACCOUNT AS WELL AS THE RATIONALE FOR RECEIVING PREMIUM WHICH IS 80% OF THE TOTAL CONSIDERATION RECEIVED. 'FROM THE ABOVE DISCUSSION, IT IS THUS APPARENT THAT NEITHER THE GENUINENESS NOR THE CREDITWORTHINESS OF THESE COMPANIES, THE ONUS OF WH ICH RESTED ON THE APPELLANT, HAVE BEEN PROVED/DISCHARGE D. THE EXPLANATION OFFERED REGARDING THE AMOUNTS CREDITED IN THE BOOKS OF THE APPELLANT HAS CORRECTLY BEEN FOUND TO BE UNSATISFACTORY BY THE AO. ACCORDINGLY, THE ADDITION MADE BY THE AD WITH REGARD TO UNEXPLAINED CASH CREDIT OF RS . 5,00,000/- U/S 68 OF THE I.T. ACT IS UPHELD. GROUND NO. 3 IS DISMISSED. 5.2 AFTER PERUSING THE CONTENTS OF THE AFFIDAVIT A S WELL AS RELEVANT PARAS NO. 6.2 TO 6.7 OF THE IMPUGNED ORDER, AS AFO RESAID, I FIND CONSIDERABLE COGENCY IN THE CONTENTS OF THE AFFIDAV IT FILED BY SH. DINESH GUPTA, CA OF THE ASSESSEE, THEREFORE, IN MY CONSIDERED OPINION, THE ISSUE IN DISPUTE MAY BE DECIDED AFRESH AT THE LEVEL OF THE AO, IN TERMS OF THE FINDING GIVEN BY THE LD. CIT(A) IN HIS ORDER VIDE PARA NO. 6.2 TO 6.7 AND AO SHOULD VERIFY THE CONTEN TS OF THE AFFIDAVIT FILED BY THE CHARTERED ACCOUNTANT OF THE ASSESSEE, WHO APPEARED BEFORE THE LD. CIT(A) ON BEHALF OF THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. 22 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20/01/2017 . SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 20/01/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 23