ITO, New Delhi V. M/s. Gaurav Confin Pvt. Ltd, New Delhi

ITA 3738/DEL/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52534 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 03-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: V K TULSIYAN; A K MATHUR C AS
• Keywords: Income from undisclosed sources; Difference of opinion; Accommodation entries; Reason to believe; Change of opinion
• Section: 133(6); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C DELHI BEFORE SHRI I.P. BANSAL AND SHRI K.G. BANSAL ITA NO. 3738(DEL)/2009 ASSESSMENT YEAR: 2001-02 INCOME-TAX OFFICER, M /S GAURAV CONFIN PVT. LTD., WARD 12(1), NEW DELHI. VS. 126, HAR SH VIHAR, PITAM PURA, NEW DELHI. PAN-AABCG6280A C.O. NO. 57(DEL)/2010 (ARISING OUT OF ITA NO. 3738(DEL)/2009) ASSESSMENT YEAR: 2001-02 M/S GAURAV CONFIN PVT. LTD., INCOME-T AX OFFICER, NEW DELHI. VS. WARD 12(1), NEW DELHI. (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI SALIL MISHRA, SR. DR ASSESSEE BY : S/SHRI V.K. TULSIYAN & A.K. MATHUR, C.AS ORDER PER K.G. BANSAL : AM THE FACTS OF THE CASE ARE THAT THE ASSESSEE-C OMPANY HAD FILED ITS RETURN ON 29.10.2001 DECLARING TOTAL INCOME OF R S. 3,970/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961, ON 26.06.2002. THEREAFTER, INFORMATION WAS RECEIVED FROM THE INVESTIGATION WING THAT THE ASSESSEE RECEIVED ACCOMMODATION ENTRY OF RS. 5.00 LAKH FROM LANDMARK COMMUNICATIONS P. LTD. (LANDMARK FOR S HORT). IN VIEW ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 2 THEREOF, THE AO RECORDED REASONS U/S 147 ON 2 8.03.2007. NOTICE U/S 148 WAS ALSO ISSUED CONSEQUENT UPON RECORDING THE REASONS. THE ASSESSEE, IN LETTER DATED 20.09.2007 INFORMED THAT THE ORIGI NAL RETURN FILED ON 29.10.2001 MAY BE TAKEN AS THE RETURN U/S 147. THE RELEVANT PORTION OF THE REASONS RECORDED BY THE AO IS REPRODUCED BELOW: - INFORMATION REGARDING ENTRY OPERATORS AND THEIR BENEFICIARIES WAS RECEIVED FROM DIT (INV.)-I, NEW DELHI VIDE D.NO. 1399 DATED 02.03.2006 AND NO. DIT(INV)-I/2006-07/AE/1536 DATED 05.02.2007 . IT IS SEEN FROM THE INFORMATION PROVIDED WITH THESE LETTERS THAT THE ASSESSEE COMPANY IS ONE OF THE BENEFICIARIES OF ACCOMMODATION ENTRIES. TH E DETAILS OF THE ENTRIES TAKEN BY THE ASSESSEE-COMPANY ARE AS UNDER:- ASSESSEE BANK A/C VALUE OF ENTRY TAKEN IN STRUMENT NO. BY WHICH ENTRY TAKEN DATE ON WHICH ENTRY TAKEN NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT BANK A/C FROM WHICH ENTRY GIVEN PNB 5,00,000/- 194829 21.06.2000 LANDMARK COMMUNICATION PVT. LTD. A/C NO. 3194, JAI LAXMI CO- OPERATIVE BANK, FATEHPURI PRIMA FACIE, THE INVESTIGATIONS AND ENQUIRIES MAD E BY THE INVESTIGATION WING INDICATE THAT THE ABOVE TRANSACTION IS SHA M TRANSACTION OF ACCOMMODATION ENTRY TAKEN BY THE ASSESSEE IN ORDE R TO REDUCE ITS TAXABLE INCOME. IN VIEW OF THE ABOVE FACTS, I AM OF THE C ONSIDERED OPINION THAT THE ABOVE TRANSACTION REFLECTS THE UNDISCLOSED INCOME OF THE ASSESSEE INTRODUCED IN THE GARB OF SUCH SHAM TRANSACTION . CONSIDERING THE FACTS OF THE CASE, I HAVE REASON TO BELIEVE THAT INCOM E TO THE EXTENT OF AT LEAST RS. 5,00,300/- HAS ESCAPED ASSESSMENT AND THIS IS A FIT CASE FOR INITIATION OF PROCEEDINGS U/S 147 OF THE INCOME-T AX ACT, 1961. ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 3 1.1 THEREAFTER, ASSESSMENT PROCEEDINGS WERE INI TIATED BY ISSUING STATUTORY NOTICES ON 08.10.2007. IN THE COURSE OF THESE PROCEEDINGS, IT WAS FOUND THAT THE ASSESSEE HAS RECEIVED TWO SUMS OF RS. 5.00 LAKH EACH FROM LANDMARK AND BHAWANI ENGINEERING P. LTD. ( BHAWANI FOR SHORT). THE ASSESSEE WAS REQUIRED TO PRODUCE EVIDENCE U/ S 68 REGARDING GENUINENESS OF THESE TWO CREDITS FOUND IN ITS BOOK S OF ACCOUNT. THE ASSESSEE FILED DETAILS, WHICH WERE EXAMINED BY T HE AO. IN THE CASE OF LANDMARK, IT HAS BEEN MENTIONED THAT THE ASSESSE E DID NOT PRODUCE THE BOARD RESOLUTION AUTHORIZING IT TO MAKE INVESTMEN T IN THE SHARE CAPITAL OF THE ASSESSEE-COMPANY. THE AFFIDAVIT PRODUCED F ROM THIS COMPANY DOES NOT BEAR THE DATE. THE AFFIDAVIT HAS ALSO NOT B EEN ATTESTED BY THE OATH COMMISSIONER OR NOTARY. THE ORIGINAL AFFIDAVIT W AS NOT INTENTIONALLY PRODUCED SO AS TO HIDE THE DATE OF PURCHASE OF THE STAMP PAPER. IN THE CASE OF BHAWANI ALSO, SIMILAR DISCREPANCIES WE RE NOTED. IT WAS ALSO FOUND THAT PRIOR TO ISSUING PAY ORDER TO THE ASSESSEE-COMPANY, THERE WAS A CREDIT OF RS. 5.00 LAKH IN THIS ACCOUNT. THER EFORE, IT HAS BEEN HELD THAT THE ASSESSEE ADOPTED COLOURFUL DEVISE AND SHAM TRANSACTION TO SHOW THE MONIES AS CAPITAL. ACCORDINGLY, THE AMOUNT WAS ADDED TO THE TOTAL INCOME. A FURTHER SUM OF RS.20,000/- HAS ALSO BE EN ADDED TO THE TOTAL ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 4 INCOME ON THE GROUND THAT THIS AMOUNT REPRESENTS CO MMISSION PAID TO THESE TWO PARTIES FOR PROVIDING ACCOMMODATION ENTRIES. 1.2 AGGRIEVED BY THIS ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEALS)-XV, NEW DELHI. THE ASSESSEE CHALLEN GED THE VALIDITY OF NOTICE U/S 147 AND THE ADDITION MADE TO THE TOT AL INCOME. IN REGARD TO VALIDITY OF THE NOTICE, THE FINDINGS OF THE LD. CIT (APPEALS) ARE THAT TWO CONDITIONS NEED BE SATISFIED, I.E., -(I) THE AO MUST HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSM ENT; AND (II) SUCH UNDER-ASSESSMENT IS DUE TO NON-DISCLOSURE OF MATE RIAL FACTS BY THE ASSESSEE. THE REASONS MUST BE REAL AND NOT PR ESUMPTIVE. THE BELIEF SHOULD ALSO BE A REASONABLE BELIEF WHICH HAS NE XUS WITH MATERIAL ON RECORD IN THIS RESPECT. HOWEVER, THE AO NEED NOT PROVE THE FACTUM OF ESCAPEMENT OF INCOME CONCLUSIVELY. HIS FINDINGS IN THIS BEHALF ARE RECORDED ON PAGE NO. 4 OF THE IMPUGNED ORDER, WHICH IS REPRODUCED BELOW:- IN THE CASE UNDER APPEAL, THE BELIEF THAT INC OME HAS ESCAPED ASSESSMENT WAS ON THE BASIS OF INFORMATION FROM THE INVESTIGATION WING, MENTIONING INTER-ALIA THE FA CT THAT THE APPELLANT IS A BENEFICIARY OF CERTAIN ACCOMMODAT ION ENTRIES, SOURCED FROM A CONCERN, WHO IS SAID TO BE ENGAGED IN RECYCLING OF UNACCOUNTED INCOME OF CONCERNS THROUGH THE MODALITY OF PROVIDING ACCOMMODATION ENTRIES AT A COMMISSION. THE CHEQUE NUMBER, AMOUNT REMITTED, THE BANK ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 5 ACCOUNT NUMBER OF THE APPELLANT WHERE THE MONEY WAS PARKED, THE ENTITY WHO HAS REMITTED THE MONEY ARE PART OF THE INFORMATION RECEIVED FROM THE INVESTIGATION WIN G. THE BELIEF OF THE AO ON THE BASIS OF INFORMATION PROVIDED C OULD NOT BE OTHER THAN HONEST AND THE REASONABLE. IN SIMIL AR SET OF FACTS, THE REASON FOR REOPENING ON THE BASIS OF REPORT OF THE INVESTIGATION WING OF THE DEPARTMENT HAS BEEN HELD TO BE VALID IN BRIJ MOHAN AGARWAL VS. ACIT, 268 ITR 400 (ALL.). ALLUDING TO THE CASE LAWS ABOVE AND THE FACTS IN THE PRESENT APPEAL, I HOLD THAT THE REASSESSMENT PROCEEDING HAVE BEEN VALIDLY INITIATED. TO THE EXTENT THE GROUNDS OF APPEAL AGITATE THE MERITS OF REOPENING THE ASSESSMENT PROCEEDIN G, THE SAME ARE DISMISSED HENCE. 1.3 REGARDING MERIT, VARIOUS SUBMISSIONS WERE MAD E BEFORE HIM. AFTER CONSIDERING THE ASSESSMENT ORDER, THE SUBMISSION S AND THE DECIDED CASES IN THE MATTER, IT HAS BEEN HELD THAT THE EVI DENCE PRODUCED IN SUPPORT OF RECEIPT OF SHARE APPLICATION MONEY, THE EXPLANATION U/S 68 COULD NOT HAVE BEEN IGNORED BY THE AO. THEREFORE, THE A DDITION HAS BEEN DELETED. 2. AGGRIEVED BY THIS ORDER, THE REVENUE FILED AN APPEAL BEFORE US. AS A SEQUEL TO THAT, THE ASSESSEE ALSO FILED THE CR OSS OBJECTION. THE GRIEVANCE OF THE REVENUE IS DIRECTED AGAINST THE DELETION OF THE ADDITION OF RS. 10,20,000/- MADE BY THE AO. IN THE CROSS OBJECTIO N, THE ASSESSEE HAS CHALLENGED THE FINDING OF THE LD. CIT(APPEALS) IN RESPECT OF VALIDITY OF NOTICE U/S 147. AS THE ISSUE RAISED BY THE ASSE SSEE IS PRELIMINARY IN NATURE, WE PROCEED TO DECIDE THE SAME AT THE OUTSET. ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 6 3. THE ONLY GRIEVANCE RAISED BY THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE REASONS ARE VAGUE AND THERE IS NO APPLICATIO N OF MIND BY THE AO TO THE INFORMATION RECEIVED FROM THE INVESTIGATION WING . ON OTHER HAND, THE CASE OF THE LD. DR IS THAT THE INFORMATION IS SPEC IFIC AS IT FURNISHES THE BANK ACCOUNTS OF BOTH THE PARTIES, INSTRUMENT NUMBER, THE AMOUNT INVOLVED, THE DATE AND THE NAME OF THE ENTRY OPERATOR. THE AO H AS APPLIED HIS MIND AS CAN BE SEEN FROM THE RECORDED REASONS. AT THIS STAGE, THE AO IS NOT REQUIRED TO CONCLUSIVELY PROVE THE UNDER-ASSESSME NT OF INCOME. ONLY A PRIMA-FACIE VIEW HAS TO BE TAKEN AT THIS STAGE AND SUFFICIENCY OF REASONS CANNOT BE GONE INTO EVEN BY THE COURTS. WHAT IS TO BE SEEN IS WHETHER THERE IS MATERIAL ON RECORD WHICH LEADS TO A PRIMA FACIE CONCLUSION THAT INCOME HAD ESCAPED ASSESSMENT. 3.1 AT THIS STAGE, WE MAY ALSO REFER TO THE DE CISIONS RELIED UPON BY THE RIVAL PARTIES. THE LD. COUNSEL RELIED ON T HE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. WINSTRAL PETRO CHEMICALS P. LTD., (2010) 330 ITR 603. AT PLACITUM 8, ON PAGE NO. 607, THE HONBLE COURT HAS MADE THE FOLLOWING OBSERVATIONS:- 8. AS REGARDS IDENTITY OF THE SUBSCRIBERS, THE ASS ESSEE FILED COPIES OF CERTIFICATIONS OF INCORPORATION, PAN CARD S, PAN DETAILS AND COMPANY DETAILS, DOWNLOADED FROM THE SI TE OF DEPARTMENT OF COMPANY AFFAIRS BESIDES WRITTEN CONFI RMATION ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 7 FROM THE APPLICANTS. IT IS NOT THE CASE OF THE REVE NUE THAT THE COPIES OF CERTIFICATES OF INCORPORATION, PAN CARDS, PAN DETAILS OR COMPANY DETAILS SUBMITTED BY THE ASSESSEE WERE F ORGED DOCUMENTS. IN FACT, THE ASSESSING OFFICER DID NOT E VEN MAKE AN ATTEMPT TO VERIFY THE GENUINENESS OF THESE DOCUMENT S BY SUMMONING THE RECORD OF REGISTRAR OF COMPANIES OR DEPARTMENT OF COMPANY AFFAIRS. IF HE ENTERTAINED AN Y DOUBT ABOUT THE GENUINENESS OF THESE DOCUMENTS, NOTHING P REVENTED HIM FROM SUMMONING THE RECORD FROM THESE AUTHORITIE S. IF THE ASSESSING OFFICER SO DESIRED, THE GENUINENESS OF TH E PAN CARDS AND PAN DETAILS COULD EASILY HAVE BEEN VERIFIED BY HIM FROM THE RECORD AVAILABLE WITH THE DEPARTMENT. THE ASSES SEE COMPANY ALSO FURNISHED WRITTEN CONFIRMATION FROM TH E APPLICANT COMPANIES. ALL THE SHARE APPLICANTS WERE DULY SERVE D WITH THE NOTICES UNDER SECTION 133(6) OF THE ACT. IN THESE C IRCUMSTANCES, THE FINDING OF COMMISSIONER OF INCOME TAX (APPEALS) AND INCOME TAX APPELLATE TRIBUNAL THAT THE IDENTITY OF THE SUBSCRIBERS STOOD DULY ESTABLISHED FROM THE DOCUMEN TS PRODUCED BY THE ASSESSEE, CANNOT BE SAID TO BE PERV ERSE AND DOES NOT CALL FOR INTERFERENCE BY THIS COURT. TO OUR MIND, THIS DECISION HAS TO BE CONSIDERED ON LY AT THE TIME OF DECIDING THE MERITS OF THE CASE. 3.2 RELIANCE HAS ALSO BEEN PLACED ON THE DECISI ON OF HONBLE DELHI HIGH COURT IN THE CASE OF SIGNATURE HOTELS (P) L TD. VS. ITO & ANOTHER, DATED 21.07.2011, IN WRIT PETITION (CIVIL) NO. 8067/2010, A COPY OF WHICH HAS BEEN PLACED BEFORE US. THE HONBLE COURT R EPRODUCED THE REASONS RECORDED BY THE AO, WHICH READ AS UNDER:- INFORMATION RECEIVED FROM THE OFFICE OF THE DIT(INV.)-VI, NEW DELHI REVEALED THAT M/S SIGNATURE HOTELS (P) LTD. HAS ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 8 INTRODUCED UNACCOUNTED MONEY IN ITS BOOKS OF ACCOU NT DURING F.Y. 2002-03 THROUGH ACCOMMODATION ENTRY FROM SWE TU STONE PV FOR RS. 5.00 LAC. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE T HAT TAXABLE INCOME TO THE TUNE OF RS. 5.00 LAC HAS ESCAPED AS SESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T.ACT, 1961. 3.3 THESE REASONS WERE NOT THE SAME AS RECORDED BY THE AO IN THE PROFORMA FILLED UP FOR OBTAINING THE APPROVAL OF THE COMMISSIONER OF INCOME-TAX. THE REASONS RECORDED IN THE PROFORMA ARE AS UNDER:- 11. REASONS FOR THE BELIEF THAT INCOME HAS ES CAPED ASSESSMENT:- INFORMATION IS RECEIVED FROM THE D IT (INV-1), NEW DELHI THAT THE ASSESSEE HAS INTRODUCED MON EY AMOUNTING TO RS. LAKH DURING THE F.Y. 2002-03 REL ATING TO A.Y. 2003-04. DETAILS ARE CONTAINED IN ANNEXURE. AS PER INFORMATION AMOUNT RECEIVED IS NOTHING BUT ACCOM MODATION ENTRY AND ASSESSEE IS A BENEFICIARY. 3.4 THE HONBLE COURT MENTIONED THAT THE FIRST SEN TENCE OF THE REASONS STATES THAT THE INFORMATION HAS BEEN RECEIVED FR OM DIRECTOR OF INCOME-TAX (INVESTIGATION) THAT THE ASSESSEE INTRODUCED RS. 5.00 LAKH IN THE BOOKS OF ACCOUNT IN FINANCIAL YEAR 2002-03 AS PER DETAIL S MENTIONED IN THE ANNEXURE. THE ANNEXURE CONTAINS THE DETAILS OF CHEQUE RECEIVED ON 09.10.2002 FROM SWETU STONE PV AND THE ACCOUN T NUMBER IS MENTIONED THEREIN. THE LAST SENTENCE RECORDS THAT AS PE R INFORMATION THE AMOUNT ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 9 RECEIVED WAS NOTHING BUT AN ACCOMMODATION ENTRY. THE HONBLE COURT HELD THAT THE INFORMATION AND THE REASONS ARE SCANTY AND VAGUE. THE ANNEXURE IS NOT A MATERIAL OR EVIDENCE WHICH PRIMA- FACIE SHOWS OR ESTABLISHES NEXUS OR LINK WITH ESCAPEMENT OF INC OME. FURTHER, IT IS APPARENT THAT THE AO HAS NOT APPLIED HIS OWN MI ND TO THE INFORMATION AND MATERIAL CONTAINED IN THE INFORMATION. THE INFORMA TION WAS ACCEPTED IN A MECHANICAL MANNER. IT IS ALSO MENTIONED THAT STA TEMENTS OF MAHESH GARG AND SUBHASH GUPTA WERE RECORDED BY THE DIRECTOR O F INCOME-TAX (INVESTIGATION) ON THE BASIS OF WHICH IT WAS CONCL UDED THAT THESE PERSONS WERE ENTRY-OPERATORS. THESE STATEMENTS HAVE NO T BEEN PLACED ON RECORD. IN THE LIGHT OF THESE FACTS AND THE DECIDED CASES IN THE MATTER, THE WRIT PETITION WAS ALLOWED AND THE AO WAS PRECLUDED FROM PROCEEDING FURTHER U/S 148. 3.5 COMING TO THE CASES RELIED UPON BY THE LD. D R, IN THE CASE OF SOHAN SINGH VS. CIT, (1986) 158 ITR 174 (DEL), TH E FACTS ARE THAT THE INCOME OF THE ASSESSEE HAD BEEN ASSESSED AS THAT OF THE FIRM. THIS POSITION WAS REVERSED BY THE TRIBUNAL AND IT WAS HELD THAT THE INCOME REALLY BELONGED TO THE ASSESSEE. THE HONBLE COURT HELD THAT THE ASSESSEE HAD NOT DISCLOSED THE INCOME FROM THE BUSINESS, WHICH WAS ALLEGEDLY CARRIED ON ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 10 BY THE FIRM BUT WHICH REALLY BELONGED TO HIM. T HEREFORE, THE ACTION OF THE ISSUANCE OF NOTICE U/S 148 HAS BEEN UPHELD. FURTHER, IN THE CASE OF BRIJ MOHAN AGGARWAL VS. ACIT & ANOTHER, (2004) 268 ITR 400, IT IS MENTIONED THAT THE FACTS STATED IN COUNTER-AFFID AVIT SHOW THAT THE ASSESSEE HAD BEEN SUPPRESSING HIS CORRECT INCOME AND HAD BE EN INDULGING IN BOGUS TRANSACTIONS. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT A MERE CHANGE OF OPINION IS NOT ENOUGH GROUND F OR ISSUING NOTICE U/S 148. THIS VIEW CANNOT BE ACCEPTED AS VERY IMPORTANT MATERIALS HAVE COME IN POSSESSION OF THE ITO, WHICH SHOW THAT THE ASSESS EE WAS SUPPRESSING HIS INCOME AND WAS INDULGING IN BOGUS TRANSACTIONS. THE FACTS OF THE CASE OF SIGNATURE HOTELS (P) LTD. HAVE BEEN DISTINGUISH ED BY REFERRING TO PARAGRAPH NO. 15 OF THE JUDGMENT, IN WHICH IT IS M ENTIONED THAT THE ANNEXURE CANNOT BE REGARDED AS MATERIAL OR EVID ENCE WHICH SHOWS IN A PRIMA FACIE MANNER ANY LINK BETWEEN THE MATERIA L AND ESCAPEMENT OF INCOME. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE REASONS RECORDED BY THE AO ON 28 .03.2007 HAVE ALREADY BEEN REPRODUCED BY US. THE REASONS START WITH FACT OF RECEIPT OF INFORMATION FROM THE INVESTIGATION WING. THE DE TAILS OF THE ENTRY AND THE ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 11 MODE OF TRANSACTION HAVE BEEN ELABORATELY DEALT WITH. THESE ARE ALSO QUITE SPECIFIC IN NATURE. ON THE BASIS OF THE ENQUIRIES OF THE INVESTIGATION WING, A PRIMA-FACIE VIEW IS ARRIVED AT THAT THE TRAN SACTION IS AN ACCOMMODATION ENTRY AND A SHAM TRANSACTION, WHICH HAS BEEN UNDER TAKEN TO REDUCE THE TAX BURDEN. THEREAFTER, THE OPINION HAS BEEN RECORDE D THAT THE AMOUNT INVOLVED IN THE TRANSACTION IS THE UNDISCLOSED I NCOME OF THE ASSESSEE AND, THEREFORE, THERE IS REASON TO BELIEVE THAT INCO ME OF RS. 5,00,300/- HAS ESCAPED ASSESSMENT. THE FACTS OF THE CASE OF SIGNATURE HOTELS (P) LTD. ARE QUITE DISTINGUISHABLE. THE REASONS RECORDE D IN THAT CASE MENTIONED ABOUT THE INFORMATION RECEIVED FROM DIT (INV)-V I, REGARDING INTRODUCTION OF UNACCOUNTED MONEY IN THE BOOKS T HROUGH ACCOMMODATION ENTRY FROM SWETU STONE PV OF RS. 5.00 LAKH. THEREA FTER, THE AO JUMPED TO THE CONCLUSION THAT IN VIEW OF THIS INFORMATION H E HAS REASON TO BELIEVE THAT INCOME OF RS. 5.00 LAKH ESCAPED ASSESSMENT. IN THE CASE AT HAND, THE DETAILS OF ENTRY AS PER INFORMATION HAVE BEEN NAR RATED IN THE REASONS. THE PRIMA-FACIE VIEW HAS BEEN FORMED ON THE BASIS OF INVESTIGATION AND ENQUIRY MADE BY THE INVESTIGATION WING. THEREAFTE R, A CONCLUSION HAS BEEN DRAWN THAT THE TRANSACTION IS UNDISCLOSED IN COME. FINALLY, IT HAS BEEN MENTIONED THAT THERE IS REASON TO BELIEVE THAT INCOME OF RS. 5,00,300/- HAS ESCAPED ASSESSMENT. FURTHER, IN THE CASE OF SIGNATURE ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 12 HOTELS (P) LTD. DIFFERENT REASONS WERE RECORD ED IN PARAGRAPH NO. 11 OF THE PROFORMA. IT IS NO DOUBT TRUE THAT THE DE TAILS OF THE ENQUIRY MADE BY THE INVESTIGATION WING HAVE NOT BEEN MENTIONED. NONETHELESS, IT IS A FACT THAT INVESTIGATION WING HAS BEEN ENTRUSTED WITH THE WORK OF MAKING ENQUIRIES AND UNDERTAKING SURVEY AND SEARCH OPE RATIONS. THEREFORE, THE INFORMATION HAS COME FROM A FORMAL SOURCE FUNCTIO NING UNDER THE INCOME- TAX ACT. THE AO HAS APPLIED HIS MIND TO THE INFO RMATION. THE INFORMATION IS NOT VAGUE AS IT IS QUITE SPECIFIC ABOUT TH E TRANSACTION. THE REASONS SHOW APPLICATION OF MIND ON THE INFORMATION RECEI VED. THE REASONS HAVE A LIVE NEXUS WITH ESCAPEMENT OF INCOME. AT THIS STAGE, THE AO IS NOT REQUIRED TO GO INTO FULL DETAILS AND CONCLUSIVEL Y PROVE THE FACT OF ESCAPEMENT OF INCOME. HE IS ALSO NOT EXPECTED TO EXAMINE ALL THE DECIDED CASES IN THE MATTER TO COME TO A FINAL CONCLUSION THAT THE AMOUNT IS TAXABLE. ALL THESE THINGS HAVE TO BE DONE IN A PRIMA FACI E MANNER. THIS HAS BEEN DONE. THEREFORE, WE ARE OF THE VIEW THAT THE AO RIGHTLY ASSUMED JURISDICTION FOR ISSUING NOTICE U/S 148. 5. COMING TO THE MERITS, THE FINDINGS OF THE LD. CIT(APPEALS) ARE THAT SUFFICIENT EVIDENCE HAS BEEN PRODUCED TO PROVE THE EXISTENCE OF BHAWANI AND LANDMARK. THESE ARE LIMITED COMPANIES, WHOSE EXISTENCE CANNOT BE ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 13 DENIED AS THE EVIDENCE IS AVAILABLE ON THE WEB-S ITE OF REGISTRAR OF COMPANIES. THE OBJECTIONS RAISED BY THE AO ARE TRIVIAL THAT THE AFFIDAVIT IS NOT SIGNED BY THE OATH COMMISSIONER OR NOTARY. THAT MERELY CONVERTS THE DOCUMENT INTO A CONFIRMATION LETTER. AS SUCH THERE IS NO REQUIREMENT TO PRODUCE AN AFFIDAVIT FROM THE CONTRIBUTOR. THE B OARD RESOLUTION HAS BEEN FILED AS MENTIONED BY THE LD. CIT(A). HIS ORDER MENTIONS ABOUT A LARGE NUMBER OF EVIDENCES, I.E., THE CONTRIBUTORS ARE ASSESSED TO TAX, THE CONTRIBUTIONS WERE RECEIVED THROUGH BANKING CHANNE L, AND SHARES HAVE BEEN ALLOWED. ON THE OTHER HAND, THERE IS NO EVIDE NCE THAT MONEY BELONGING TO THE COMPANY WAS ROUTED THROUGH AFORESAID CON TRIBUTORS AND SHOWN AS CAPITAL CONTRIBUTION. SINCE THE IDENTITY HAS BE EN ESTABLISHED, THERE IS NO FURTHER ONUS ON THE ASSESSEE IN VIEW OF THE DE CISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD., (2008) 216 CTR 195, THE OPERATIVE PORTION OF WHICH READS AS UND ER:- INCOME-CASH CREDIT-SHARE APPLICATION MONEY- IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE CO MPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE COMPANY. ITA NO. 3738(DEL)/2009 & C.O. NO. 57(DEL)/2010 14 5.1 IN VIEW OF THE AFORESAID FACTS AND THE POSIT ION OF LAW, WE ARE OF THE VIEW THAT THE LD. CIT(APPEALS) RIGHTLY DELETED THE ADDITION. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AND CR OSS OBJECTION OF THE ASSESSEE ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 5 AUGUST, 2011. SD/- SD/- (I.P. BANSAL) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 05.08.2011. SP SATIA COPY OF THE ORDER FORWARDED TO:- GAURAV CONFIN PVT. LTD., NEW DELHI. ITO, WARD 12(1), NEW DELHI. CIT CIT(APPEALS) THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.