M/s. Superb Developers Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 403/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6716 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 29-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 20-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S S RANA
• Keywords: Search and seizure; Principle of natural justice; Additional evidence; Accommodation entries; Non compliance
• Section: 143(3); 142(1); 153A; 133(6); 131; 68

Judgement Text

1ITA NOS. 54/DEL/2014 & ORS IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUD ICIAL MEMBER ITA NO. 54/DEL/2014 ( A.Y 2008-09) ACIT CENTRAL CIRCLE-3 NEW DELHI (APPELLANT) VS SUPERB DEVELOPERS (P) LTD. WZ-183, F. F. LANCE NO. 4 LAJWANTI GARDEN NEW DELHI AAICS4437L (RESPONDENT) ITA NO. 55/DEL/2014( A.Y 2009-10) ACIT CENTRAL CIRCLE-3 NEW DELHI (APPELLANT) VS SUPERB DEVELOPERS (P) LTD. WZ-183, F. F. LANCE NO. 4 LAJWANTI GARDEN NEW DELHI AAICS4437L (RESPONDENT) ITA NO. 56/DEL/2014( A.Y 2010-11) ACIT CENTRAL CIRCLE-3 NEW DELHI (APPELLANT) VS SUPERB DEVELOPERS (P) LTD. WZ-183, F. F. LANCE NO. 4 LAJWANTI GARDEN NEW DELHI AAICS4437L (RESPONDENT) ITA NO. 403/DEL/2015( A.Y 2011-12) SUPERB DEVELOPERS (P) LTD. WZ-183, F. F. LANCE NO. 4 LAJWANTI GARDEN NEW DELHI AAICS4437L (APPELLANT) VS DCIT CENTRAL CIRCLE-3 NEW DELHI (RESPONDENT) APPELLANT BY SH. S. S. RANA, CIT(DR) RESPONDENT BY SH. SURESH KUMAR GUPTA, CA 2ITA NOS. 54/DEL/2014 & ORS ORDER PER SUCHITRA KAMBLE, JM THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDERS DATED 25/10/2013 FOR A.Y. 2008-09, 2009-10 AND 2010-11 PA SSED BY CIT(A)-I, NEW DELHI AND ASSESSEE FILED APPEAL AGAINST THE ORDER D ATED 03/11/2014 PASSED BY CIT(A)-II, NEW DELHI FOR A.Y. 2011-12. 2. THE GROUND OF APPEAL FOR ITA NO. 54/DEL/2014 (20 08-09) ARE AS UNDER:- 1. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.80,75,000/- U/S 68 OF T HE ACT W.R.T. PROCUREMENT OF ACCOMMODATION ENTRIES THROUGH SHARE APPLICATION MON EY FROM NON-DESCRIPT COMPANIES. 2. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LAW AND ON FACTS IN DELETING AN ADDITION OF RS.40,375/- MADE BY THE AO W.R.T. COMMISSION PAID @ 5% FOR PROCUREMENT OF ACCOMMODATION ENTRIES THROUGH S HARE APPLICATION MONEY FROM NON-DESCRIPT COMPANIES. 3. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A. 4. A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING O F THE APPEAL. 3. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AGA INST THE MAHESH MEHTA GROUP OF CASES ON 30/6/2009 U/S 132/133A OF T HE INCOME TAX ACT, 1961 AND THE PREMISES OF THE ASSESSEE WERE ALSO COV ERED. NOTICE U/S 153A WAS ISSUED ON 13/4/2010. IN RESPONSE TO THE NOTICE THE ASSESSEE FILED REPLY AND SUBMITTED THAT RETURN DECLARING INCOME OF RS.78,230 /- FILED ORIGINALLY ON DATE OF HEARING 29.05.2018 DATE OF PRONOUNCEMENT 09.07.2018 3ITA NOS. 54/DEL/2014 & ORS 9/2/2009 BE TREATED AS THE RETURN IN RESPONSE TO TH E NOTICE. NOTICES U/S 143(2) AND 142(1) ALONG WITH QUESTIONNAIRE WERE ISS UED. THE CASE WAS ASSESSED AT AN INCOME OF RS.81,93,610/- AFTER MAKIN G AN ADDITIONS. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL O F THE ASSESSEE FOR STATISTICAL PURPOSE BY DELETING ALL THE ADDITIONS THEREBY RELYI NG UPON THE ORDER FOR ASSESSMENT YEAR 2006-07 PASSED BY THE CIT(A) THEREI N. HOWEVER, THE CIT(A) DISMISSED THE LEGAL GROUND CHALLENGING THE PROCEEDI NGS U/S 153A OF THE INCOME TAX ACT, 1961. 5. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILE D TO ESTABLISH THE GENUINENESS OF THE TRANSACTION, IDENTITY AND CREDIT WORTHINESS. NOTICES U/S 133 (6) WERE ISSUED TO THE PARTIES BUT THE NOTICES WERE NOT COMPLIED BY THE PARTIES. THEREFORE, THE ASSESSING OFFICER RIGHTLY PASSED THE ASSESSMENT ORDER. THE LD. DR FURTHER SUBMITS AS PER THE INFORMATION GATHERED DURING THE SEARCH AND POST SEARCH, ACCOMMODATION ENTRIES WERE TAKEN FROM THE PARTIES BY THE ASSESSEE. THE LD. DR FURTHER POINTED OUT THAT AT T HE TIME OF THE ASSESSMENT PROCEEDINGS, SOME REPLIES WERE RECEIVED BY THE REVE NUE THROUGH POST. THE INSPECTOR WAS DEPUTED TO VERIFY THE ADDRESSES BUT T HE PARTIES WERE FOUND NOT TO BE EXISTED AT THOSE ADDRESSES. THE LD. DR SUBMITTE D THAT THE ASSESSEE HAS NOT FILED PAN NUMBER AS WELL AS BANK ACCOUNT DETAILS OF THE OTHER PARTIES. 6. THE LD. AR SUBMITS THAT THE ASSESSEE ACCEPTED SH ARE CAPITAL FROM NINE COMPANIES AMOUNTING TO RS.80,75,000/- THROUGH CHEQU E FOR ALLOTMENT OF 80,750 SHARES OF RS. 10 EACH ON SHARE PREMIUM OF RS .90 PER SHARE. THERE WAS SEARCH OPERATION ON PREMISES OF THE RESPONDENT ASSE SSEE ON 30.06.2009. THE ASSESSEE IS A GROUP COMPANY OF MAHESH MEHTA GROUP O F CASES. DURING SEARCH PROCEEDINGS NO INCRIMINATING MATERIAL WITH REGARD T O SHARE CAPITAL ACCEPTED BY THE ASSESSEE COMPANY WERE FOUND. DURING THE ASSESSM ENT PROCEEDINGS, VARIOUS DOCUMENTS WERE FILED TO PROVE IDENTITY AND CREDITWORTHINESS OF THE 4ITA NOS. 54/DEL/2014 & ORS SHAREHOLDERS AND ALSO TO PROVE GENUINENESS OF THE T RANSACTIONS. DURING APPEAL PROCEEDINGS, THE ASSESSEE ALSO SUBMITTED THAT THE B ALANCE SHEET OF THE SHARE APPLICANT COMPANIES AND COPY OF ITR FOR LATEST A.Y. 2011-12 BEFORE THE CIT(A) AND ALSO THE MATER DATA DOWNLOADED FROM MCA PORTAL OF GOVERNMENT OF INDIA. ALL THESE EVIDENCES SUBMITTED DURING THE APPEAL PRO CEEDINGS WERE ROUTINE DOCUMENTS WHICH ARE PUBLIC DOCUMENTS THEREFORE THER E IS NO REASON, THE SAME MAY BE TREATED AS ADDITIONAL EVIDENCES. DURING ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER ISSUED SUMMONS U/S 131 NOTICES U/ S 133(6) TO THE NEW SHARE HOLDERS ON 13.12.2011 FOR COMPLIANCE ON 19.12 .2011. THE SUMMONS WERE NOT COMPLIED WITH THE SHAREHOLDERS ALTHOUGH TH ERE IS NO DISPUTE ABOUT THE SERVICE OF SUMMONS. WHEN THE SUMMONS WERE NOT C OMPLIED BY THE SHAREHOLDERS BY MAKING PERSONAL APPEARANCE BUT THE SHAREHOLDERS RESPONDED BY SUBMITTING INFORMATION BY DAK. THE ASSESSING OFF ICER REQUIRED THE ASSESSEE TO PROVIDE THE DIRECTORS VIDE ORDER SHEET DATED 14. 12.2011. THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE DIRECTORS. T HE ASSESSING OFFICER DEPUTED THE INSPECTOR TO VERIFY THE EXISTENCE OF FOUR ENTIT IES OUT OF NINE SHARE APPLICANTS. THE INSPECTOR REPORTED THAT ENTITIES NA MELY CHINTPURNI BUILDERS P. LTD., MULTITECH SEMI CONDUCTOR P. LTD., SCIENT INFO RMATICS INDIA P. LTD. AND SKYLINK SOFTWARE P LTD. DONT EXIST AT GIVEN ADDRES SES. SCIENT AND SKYLINK HAVING ADDRESS AT 301, HIMALAYA PALACE, 65 VIJAY BL OCK, LAXMI NAGAR, DELHI REPORTED THAT NO SUCH COMPANY EXISTED AT THE ABOVE ADDRESS AS THE PREMISES WERE OCCUPIED BY M/S M.S. JAIN AND ASSOCIATES. THE SAID CONCERN WAS DEALING IN FINANCE AND HOUSING LOAN AND WHO CONFIRMED THAT THEY HAVE NOT HEARD NAME OF THESE COMPANIES BEFORE. THE REMAINING TWO COMPAN IES NAMELY CHINTPURNI AND MULTITECH BOTH HAVE THE ADDRESS LAXMI NAGAR AND SHAKARPUR ADDRESSES. THE INSPECTOR HAS REPORTED THAT MULTITECH ADDRESS I S A RESIDENTIAL PREMISES AND THE OCCUPANTS HAVE NO HEARD THE NAME OF THE ABO VE ENTITIES. THERE IS NO REPORT OF INSPECTOR WITH REGARD TO CHINTPURNI. THE ASSESSING OFFICER REJECTED THE EXPLANATION/EVIDENCES FURNISHED BY THE ASSESSEE TO DISCHARGE INITIAL ONUS U/S 68 OF THE INCOME TAX ACT BY LIFTING CORPORATE V EIL. THE CIT(A) ADMITTED THE ADDITIONAL EVIDENCES AFTER FORWARDING THE APPLICATI ON OF THE ASSESSEE UNDER 5ITA NOS. 54/DEL/2014 & ORS RULE 46A OF THE INCOME TAX ACT TO THE ASSESSING OFF ICER. IN THE APPLICATION, THE ASSESSEE HAD GIVEN THE REASON THAT ADEQUATE OPPORTU NITY TO FILE THE EVIDENCES WERE NOT GIVEN BY THE ASSESSING OFFICER AS ASSESSIN G OFFICER HAD HIMSELF ISSUE SUMMON U/S 131/NOTICES U/S 133(6) ON 13.12.2011 FOR COMPLIANCE ON 19.12.2011 TO THE SHARE APPLICANTS TO VERIFY THE TR ANSACTIONS. THE ASSESSEE THEREFORE DID NOT PURSUE THE MATTER IN VIEW OF DIRE CT ENQUIRY FROM THE SHAREHOLDERS. WHEN THERE WAS NON COMPLIANCE OF THE SUMMONS AND WHEN THIS FACT WAS INTIMATED ON 14.12.2011, THE ASSESSEE WAS ABLE TO COLLECT THE DOCUMENTS PARTLY. SINCE THE DOCUMENTS TO COME FROM OUTSIDE SOURCES, THE SUFFICIENT TIME WAS NOT AVAILABLE TO MAKE THE COLLE CTION OF THE DOCUMENTS. THE ASSESSING OFFICER IN THE REMAND REPORT DID NOT DISP UTE THE FACTUAL POSITION OF LACK OF REASONABLE OPPORTUNITY. IN THE REJOINDER TO THE REMAND REPORT, THE ASSESSEE CONTENDED THAT IN THE REMAND REPORT THE AS SESSING OFFICER HAS NOT CONTROVERTED THE FACTS STATED. THE CIT(A) AFTER GIV ING OPPORTUNITY TO THE ASSESSING OFFICER IN APPEAL ORDER FOR A.Y. 2006-07 WHICH IS BASE ORDER FOR ADJUDICATING APPEAL FOR A.Y. 2008-09 ACCEPTED THE R EQUEST OF THE ASSESSEE TO ADMIT FRESH EVIDENCES AS THE ASSESSMENT WAS COMPLET ED BY THE ASSESSING OFFICER IN HURRIED MANNER IN PERIOD JUST 16 DAYS AN D TOTAL TIME MADE AVAILABLE BY THE ASSESSING OFFICER TO HIMSELF WAS LAST TWO MO NTHS. THE CIT(A) WHILE ADJUDICATING THE ADMISSIBILITY OF THE ADDITIONAL EV IDENCES TOOK INTO ACCOUNT THE FACT THAT INSPECTOR REPORT WAS NEVER CONFRONTED TO THE ASSESSEE DURING ASSESSMENT PROCEEDINGS NOR DURING REMAND PROCEEDING S. THE CIT(A) HAS MADE A SPECIAL MENTION THAT THE NEED FOR FILING FRESH EV IDENCES TO HIGHLIGHT THE EXISTENCE OF SHAREHOLDERS AT THE GIVEN ADDRESS, ARO SE BECAUSE THE INSPECTOR REPORT WAS NOT CONFRONTED BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS ALSO. THE ADDITIONAL EVIDENCES THEREFOR E WERE ACCEPTED BY THE CIT(A). THE CIT (A) FOR A.Y. 2006-07 HAS GIVEN A FI NDINGS THAT THERE HAVE BEEN FILING OF RETURNS FOR SUBSEQUENT YEARS BY THE SHARE APPLICANT COMPANIES AND ALL THE SHARE APPLICANT COMPANIES ARE ACTIVE IN THE COM PLIANCES UNDER THE COMPANIES ACT. ALL THE COMPANIES HAD RESOURCES MORE THAN THE SHARE CAPITAL INVESTMENT WITH THE ASSESSEE COMPANY. THERE HAVE BE EN CASES OF ASSESSMENT 6ITA NOS. 54/DEL/2014 & ORS U/S 143(3) COMPLETED BY THE DEPARTMENT FOR A.Y. 200 7-08 IN DECEMBER 2009 IN THE CASE OF SCIENT INFORMATICS P LTD. IN OTHER CASE S, RETURNS OF INCOME WERE SUBSEQUENT YEARS HAVE BEEN FILED TO SHOW THAT COMPA NIES ARE IN EXISTENCE. THERE IS AN OBSERVATION BY THE ASSESSING OFFICER IN ASSESSMENT ORDER THAT IN THE INSTANT CASE THE UNDERSIGNED IS OF KNOWLEDGE WH ICH WAS GATHERED THROUGH POST SEARCH AND DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THAT ENTITIES ARE SUBJECT OF ACCOMMODATION ENTRIES. THIS OBSERVATION OF THE ASSESSING OFFICER IS BASED ON NO MATERIAL AND FARFETCHED. NEITHER IN THE ASSESSMENT ORDER NOR IN THE REMAND PROCEEDINGS THE ASSESSING OFFICER HAS SU BSTANTIATED THE ABOVE ALLEGATION AND THIS ALLEGATION IS THE BASIS FOR THE ASSESSING OFFICER TO REJECT THE EXPLANATION OF THE ASSESSEE U/S 68. THE ABOVE OBSER VATION, SINCE UNSUPPORTED BY ANY MATERIAL ON RECORD NEED BE IGNORED. ON THE I NSPECTOR REPORT, THE CIT(A) HELD THAT SINCE INSPECTOR REPORT HAS NOT BEEN CONFR ONTED BY THE ASSESSING OFFICER, SUCH EVIDENCES PRODUCED SHOW THAT THESE CO MPANIES ARE PHYSICALLY PRESENT AS IS EVIDENT FROM THE SERVICE OF THE SUMMO NS, FILING OF RETURNS OF INCOME REGULARLY AND THE STATUS OF THE COMPANIES AP PEAR AS ACTIVE COMPANIES AS PER MCA RECORDS. THE CIT(A) ALSO TOOK A VIEW THA T DURING SEARCH PROCEEDINGS ON THE APPEAL NO INCRIMINATING DOCUMENT S WERE FOUND WITH REGARD TO THE RECEIPT OF SHARE APPLICATION MONEY. THE CIT( A) RELIED UPON CASE LAWS WHICH ARE DHINGRA GLOBAL CREDENCE P LTD. (ITAT DEL) AND MCDOWELL & CO. LTD. VS. CTO 154 ITR 148 (SC). 7. THE LD. AR FURTHER SUBMITTED THAT THE FINDING OF THE CIT(A) IS THAT THERE IS NO BASIS FOR DRAWING INFERENCE THAT THE ASSESSEE IS ACCEPTED ACCOMMODATION ENTRIES AS THERE IS NO MATERIAL TO SUPPORT THAT FIN DING. THERE IS NO CASH DEPOSIT IN THE BANK ACCOUNTS IN THE BANK ACCOUNTS IN THE SH ARE APPLICANTS AND NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARC H. ALL THE EVIDENCES FURNISHED DURING THE ASSESSMENT PROCEEDINGS AND THE APPEAL PROCEEDINGS DISCHARGE THE INITIAL ONUS LAY UPON THE ASSESSEE U/ S 68 OF THE ACT. THE CREDIT WORTHINESS HAS SOUGHT TO BE ESTABLISHED AS THE PART IES WERE ASSESSED TO TAX AND THEY HAVE SUFFICIENT SOURCES AVAILABLE WITH THE M AS PER BALANCE SHEET TO 7ITA NOS. 54/DEL/2014 & ORS FINANCE INVESTMENT IN THE SHARE CAPITAL. TO SUPPORT THE ABOVE VIEW, THE RELIANCE WAS PLACED ON CIT VS. WINSTRAL PETROCHEMICALS LTD. 330 ITR 603 (DEL). ON THE NON COMPLIANCE OF THE SUMMONS TO THE SHARE APPLICAN T COMPANIES, IT WAS SUBMITTED THAT THE SUMMONS WERE ISSUES BY THE AO HI MSELF ON HIS OWN AND IN THAT SITUATION NON COMPLIANCE OF SUMMONS CANNOT LEA D TO BURDEN BEING PLACED ON THE ASSESSEE TO PRODUCE THOSE PERSON. ON THE NON COMPLIANCE OF THE SUMMONS TAKEN GROUND TO TAKE ADVERSE VIEW, THE ASSE SSEE RELIED ON JUDGMENT OF ANIS AHMED & SONS VS. CIT 297 ITR 441 (SC). FURT HER RELIANCE WERE ALSO PLACED ON CIT VS. WINSTRALPETROCHEMICALS LTD. (SUPR A). THE ASSESSEE DEALT WITH THE OBJECTION OF THE ASSESSING OFFICER THAT ASSESSE E FAILED TO PRODUCE THE DIRECTORS OF THE SHARE APPLICANT COMPANIES. SPECIAL REFERENCE WAS MADE BY THE ASSESSING OFFICER THAT IN CASE OF PRIVATE LIMITED C OMPANIES THE ONUS TO PRODUCE THE DIRECTORS IS HIGHER. TO SUPPORT THE CONTENTION OF THE ASSESSEE RELIANCE WAS PLACED IN THE CASE OF MAKHANI & TYAGI PVT. LTD. 267 ITR 430 (DEL) AND CIT VS. VICTOR ELECTRODES LIMITED 329 ITR 271 (DEL). THE AS SESSEE HAS RELIED ON VARIOUS JUDGMENTS WHICH ARE MENTIONED IN CIT(A)S ORDER AND SPECIAL REFERENCE IS MADE IN THE DECISION OF NOVA PROMOTER & FINLEASE PVT. LT D. 342 ITR 169 (DEL) EXTRACTED IN ORDER OF THE CIT(A). THE CRUX OF THE J UDGMENT WAS THAT IF THE ASSESSING OFFICER HAS ANY MATERIAL ON THE BASIS OF THE INVESTIGATION CARRIED OUT BY THE REVENUE AUTHORITIES INTO THE ACTIVITIES OF T HE ENTRY PROVIDERS AND THE ASSESSEE HAS SOME ACCOMMODATION ENTRIES FROM ANY SU CH ENTRY PROVIDERS THEN IN THAT CASE THE PAPER EVIDENCES FURNISHED BY THE A SSESSEE WILL NOT SUFFICIENT TO DISCHARGE ONUS U/S 68. BUT IN CASE NO SUCH MATERIAL IS THE HANDS OF THE ASSESSING OFFICER, THE ASSESSING OFFICER CANNOT SIT WITH FOLDED HANDS TILL ASSESSEE EXHAUST ALL MATERIAL AND EVIDENCES IN HIS POSSESSION. AS PER THIS JUDGMENT, WHERE THERE IS NO ADVERSE MATERIAL SO AS TO CHARACTERIZED SHARE HOLDER ENTITIES AS ENTRY PROVIDER, NO ADDITION CANN OT BE MADE IN THE HANDS OF THE ASSESSEE COMPANY U/S 68 AND REMEDIES OPEN TO TH E REVENUE TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE WITH LAW. FURTHER TH E CIT(A) RELIED ON ORISSA CORPORATION PRIVATE LIMITED 1986 AIR 1849: 1986 SCR (1) 979 AND OTHER AUTHORITIES TO HOLD THAT THE EVIDENCES AND MATERIAL ADDUCED BY THE ASSESSEE 8ITA NOS. 54/DEL/2014 & ORS CANNOT BE THROWN OUT WITHOUT ANY ENQUIRY BUT SUCH A RULE HAS LIMITATION IF THERE IS A MATERIAL TO LINK THE TRANSACTION WITH AC COMMODATION ENTRY PROVIDERS WHICH IS NOT A CASE HERE IN THE PRESENT APPEAL. THE COURT HELD THAT EVEN IF THERE IS MATERIAL AS A RESULT OF DETAILED ENQUIRY BY INVE STIGATION WING EVEN IN THAT CASE NON PRODUCTION OF THE DIRECTORS, WAS NOT HELD TO BE A GOOD GROUND TO MAKE ADDITION AS PRIMARY ONUS BY THE ASSESSEE IS DISCHAR GED. THE LD. AR SUBMITTED THAT IT WAS CASE OF NO ENQUIRY BASED ON THE EVIDENC ES. THE ASSESSEE RELIED ON CIT VS. GOEL SONS GOLDEN ESTATE PVT. LTD. ITA NO. 2 12/2012 (DEL) TO HOLD THAT IN ABSENCE OF ANY ENQUIRY AND NON VERIFICATION OF T HE DETAILS SUBMITTED, THE FACTUAL FINDINGS OF THE AO ARE INCOMPLETE AND SPARS . 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. AS REGARDS GROUND NO. 3 OF THE REVENUES A PPEAL, THE CIT(A) RIGHTLY TAKEN INTO CONSIDERATIONS THE EVIDENCE FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THERE WAS NO FRESH EVIDENCE SUBMITTED BY THE ASSESSEE. THIS FACT WAS NOT DENIED BY THE REVENUE. THEREFORE, GROUND NO. 3 OF THE REVENUES APPEAL IS DISMISSED. ON MERIT OF THE APPEAL FILED BY THE REVENUE, IT IS PERTINENT TO TAKE NOTE ABOUT THE ORDER PASSED BY THE CIT(A) IN ASSESSMENT YEAR 2006-07 WHICH WAS HANDED OVER BY THE LD. AR DU RING THE HEARING. THE CIT(A) FOR A.Y. 2006-07 HELD AS UNDER:- I HAVE CONSIDERED THE ASSESSMENT ORDER, THE SUBMIS SIONS MADE AND THE DOCUMENTS FILED. I HAVE ALREADY HELD THAT THE APPEL LANT WAS PREVENTED FROM DISCHARGING ITS ONUS ON ACCOUNT OF INSUFFICIENT OPP ORTUNITY AND WAS ALSO PREJUDICED AND, ACCORDINGLY, I HAVE ADMITTED THE AD DITIONAL EVIDENCE FILED BY THE APPELLANT. AT PRESENT, THE APPEALS INVOLVED IN RESPECT OF THE APPELLANT ON THE ISSUE OF SHARE APPLICATION / SHARE CAPITAL ARE FOR AY 2006-07 (A.NO.361/13-14), AY 2007-08 (A.NO.360/13-14), AY 2 008-09 (A.NO.359/13- 14), AY 2009-10 (A.NO.358/13-14) AND AY 2010-11 (A. NO.357/13-14). THE SHARE CAPITAL RAISED FROM DIFFERENT COMPANIES IN TH ESE YEARS IS SUMMARIZED IN THE TABLE GIVEN HEREUNDER: 9ITA NOS. 54/DEL/2014 & ORS SL NO. APPLICANT COMPANIES ASSESSMENT YEAR S 2006-07 2007-08 2008-09 2009-10 1010-11 1 ORACLE CABLES PVT. LTD. 1000000 1500000 2 ARSEY HOSIERY PVT. LTD. 1000000 3 TWICNE TRADERS PVT. LTD. 1000000 4 CHARDHAM IMPEX PVT. LTD. 1500000 5 VIDUR BUILDERS PVT. LTD. 1500000 6 TEJENDER FABRICATION PVT. LTD. 1500000 7 KAISER MARKETING PVT. LTD. 800000 800000 8 INDOLON HOSIERY P LTD. 1200000 425000 1000000 1500000 9 BRAINSOFT INFO CONSULTANNTS PVT. LTD. 45000 500000 10 CHINTAPURNI BUILDERS PVT. LTD. 500000 2000000 1000000 11 MIDAS TOUCH MEDICA PVT. LTD. 1300000 1000000 1000000 12 MULTITECH SEMICONDSUCTORS PVT. LTD. 1900000 1000000 13 RIBBEL MANUFACTUERRS & EXPOERTERS PVT. LTD. 1000000 2500000 14 SCIENT INFOORMATICS INDIA PVT. LTD. 500000 10 ITA NOS. 54/DEL/2014 & ORS 15 SEVBRO DOMESTIC APPLIANCES PVT. LTD. 500000 16 SKYLINK SOFTWARES PVT. LTD. 1500000 17 APT PROPERTIES PVT. LTD. 2000000 18 DHANVRIDHI FINANCIAL SERVICES PVT. LD.CIT(A) 1000000 19 INTELIFE MARKETING PVT. LTD. 3500000 20 KAY BUILDWELL PVT. LTD. 1500000 21 KELA DEVI BUILDERS PVT. LTD. 2000000 2000000 22 WISEMAN MARKETING PVT. LTD. 3000000 1500000 23 SHWETA MEHANDI PRODUCTS PVT. LTD. 2000000 24 VAISHNO DEVI LAND & BUILDING DEVELOPERS PVT. LTD. 1000000 TOTAL 8300000 1200000 8075000 25800000 7500 000 5.3. I HAVE EXAMINED THE EVIDENCES FILED AND MY OBS ERVATIONS / FINDINGS WITH REGARD TO EACH CASE ARE AS UNDER: SL NO. APPLICANT COMPANIES OBSERVATIO NS/FINDIGNS 1 ORACLE CABLES PVT. LTD. THE CASE WAS ASSESSED FOR AY 2007-08 U/S 143(3) BY THE DEPARTMENT ITSELF ON 29.12.2009. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE 2 ARSEY HOSIERY PVT. LTD THE CASE WAS ASSESSED FOR AY 2007-08 U/S 143(3) BY THE DEPARTMENT ITSELF ON 01.12.2009. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE. 3 TWINCE TRADERS PVT. THE IT RETURN FOR AY 2011-12 WAS ELECTRONICALLY FILED ON 08.03.2012 VIDE ACKNOWLEDGMENT NO.348672971080312. THIS INFORMATION IS AVAILABLE IN THE I T DEPARTMENTS OWN DATA BASE. 11 ITA NOS. 54/DEL/2014 & ORS LTD. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO . DOES NOT ARISE. 4 CHARDHAM IMPEX PVT. LTD. THE CASE WAS ASSESSED FOR AY 1995-96 U/S 143(3) BY THE DEPARTMENT ITSELF ON 26.10.1998. THE IT RETURN FOR THE AY 2010-11 WAS ALSO FILED ELECTRONICALLY ON 31.03.2011 VIDE ACKNOWLEDGEMENT NO.211242421310311. THEREFORE, THE QUESTION OF NONEXISTENCE OF THIS CO. DOES NOT ARISE. 5 VIDUR BUILDERS PVT. LTD. COPY OF AUDITED BALANCE SHEET FOR THE YEAR ENDING 31.03.2006 HAS BEEN FILED. IT RECORDS COULD NOT BE PRODUCED 6 TEJENDER FABRICATION PVT. LTD. THE ITR FOR AY 2010-11 WAS ELECTRONICALLY FILED ON 27.09.2010 VIDE ACKNOWLEDGMENT NO. 161381151270910. THEREFORE, THE QUESTION OF NON- EXISTENCE OF THIS CO. DOES NOT ARISE. 7 KAISER MARKETING PVT. LTD. THE CASE WAS ASSESSED FOR AY 2006-07 U/S 143(3) BY THE DEPARTMENT ITSELF ON 26.12.2008. THE ITR FOR AY 2010-11 WAS ELECTRONICALLY FILED ON 25.09.2010 VIDE ACKNOWLEDGMENT NO. 159633301250910. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO . DOES NOT ARISE. 8 INDOLON HOSIERY P LTD. ITR FOR AY 2011-12 WAS FILED ON 29.03.2012 VIDE ACKNOWLEDGMENT NO.370700291290312. COPIES OF MCA FILINGS AND CONFIRMATIONS FROM THE DIRECTORS WERE ALSO FILED. THEREFORE, THE QUESTION OF NON- EXISTENCE OF THIS CO. DOES NOT ARISE. 9 BRAINSOFT INFO CONSULTANTS PVT. LTD. ITR FOR AY 2011-12 WAS FILED ON 31.03.2012 VIDE ACKNOWLEDGMENT NO.381694521310312. COPIES OF AUDITED BALANCE SHEET AND CONFIRMATIONS FROM THE DIRECTORS WERE ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE. 10 CHINTAPURNI BUILDERS PVT. LTD. ITR FOR AY 2008-09 WAS FILED ON 26.09.2008 VIDE ACKNOWLEDGMENT NO.40183200260908 AND ITR FOR AY 2011-12 WAS FILED ON 31.03.2012 VIDE ACKNOWLEDGMENT NO.380735971310312. COPIES OF AUDITED BALANCE SHEET, SHARE APPLICATION AND BANK STATEMENT WERE ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE. 11 MIDAS TOUCH MEDIA PVT. LTD. ITR FOR AY 2008-09 WAS FILED ON 22.03.2009 VIDE ACKNOWLEDGMENT NO.60418950220309. COPIES OF AUDITED BALANCE SHEET, SHARE APPLICATION AND BANK STATEMENT WERE ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE. 12 MULTITECH SEMICONDUCTORS PVT. LTD. ITR FOR AY 2008-09 WAS FILED ON 29.03.2009 VIDE ACKNOWLEDGMENT NO.64402491290309 AND ITR FOR AY 2011-12 WAS FILED ON 29.03.2012 VIDE ACKNOWLEDGMENT NO.370520691290312. COPIES OF AUDITED BALANCE SHEET AND BANK STATEMENT WERE ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENC E OF THIS CO. DOES NOT ARISE. 13 RIBBEL MANUFACTURERS & EXPORTERS PVT. LTD. ITR FOR AY 2008-09 WAS FILED ON 22.03.2009 VIDE ACKNOWLEDGMENT NO.60418950220309. COPIES OF AUDITED BALANCE SHEET, SHARE APPLICATION AND BANK STATEMENT WERE ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE. 12 ITA NOS. 54/DEL/2014 & ORS 14 SCIENT INFORMATICS INDIA PVT. LTD. THE CASE WAS ASSESSED FOR AY 2007-08 U/S 143(3) BY THE DEPARTMENT ITSELF ON 16.12.2009. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE. 15 SEVBRO DOMESTIC APPLIANCES PVT. LTD. ITR FOR AY 2008-09 WAS FILED ON 22.03.2009 VIDE ACKNOWLEDGMENT NO.60434730220309. COPIES OF AUDITED BALANCE SHEET, SHARE APPLICATION AND BANK STATEMENT WERE ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE. 16 SKYLINK SOFTWARES PVT. LTD. ITR FOR AY 2008-09 WAS FILED ON 22.03.2009 VIDE ACKNOWLEDGMENT NO.60411150220309 AND ITR FOR AY 2011-12 WAS FILED ON 31.03.2012 VIDE ACKNOWLEDGMENT NO.381257601310312. COPIES OF AUDITED BALANCE SHEET, SHARE APPLICATION AND BANK STATEMENT WERE ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE. 17 APT PROPERTIES PVT. LTD. COPY OF AUDITED BALANCE SHEET FOR THE YEAR ENDING 31.03.2009 HAS BEEN FILED. IT RECORDS COULD NOT BE PRODUCED. HOWEVER, MCA MASTER DATA SHOWS THE CO. ACTIVE AND HAVING FILED THE BALANCE SHEET AS ON 31.03.2010. THUS, IT CANNOT BE SAID THAT THE CO. DI D NOT EXIST AS ON 31.03.2009. CO. APPEARS TO HAVE THE SOURCE FOR THE INVESTMENT. 18 DHANVRIDHI FINANCIAL SERVICES PVT. LTD. ITR FOR AY 2011-12 WAS FILED ON 05.03.2012 VIDE ACKNOWLEDGMENT NO.346599241030312. COPY OF THE AUDITED BALANCE SHEET AS ON 31.03.2009 WAS ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENC E OF THIS CO. DOES NOT ARISE. CO. APPEARS TO HAVE SOURCE FOR THE INVESTMENT 19 INTELIFE MARKETING PVT. LTD. ITR FOR AY 2011-12 WAS FILED ON 31.03.2012 VIDE ACKNOWLEDGMENT NO.382068051310312. COPY OF THE AUDITED BALANCE SHEET AS ON 31.03.2009 WAS ALSO FILED. MCA MASTER DATA SHOWS THE CO. ACTIVE AND HAVING FILED THE BALANCE SHEET AS ON 31.03.2010. THEREFORE, THE QUESTION OF NON- EXISTENCE OF THIS CO. DOES NOT ARISE. 20 KAY BUILDWELL PVT. LTD. ITR FOR AY 2011-12 WAS FILED ON 30.03.2012 VIDE ACKNOWLEDGMENT NO.374037341300312. COPY OF THE AUDITED BALANCE SHEET AS ON 31.03.2009 WAS ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENC E OF THIS CO. DOES NOT ARISE. CO. APPEARS TO HAVE THE SOURCE FOR INVESTMENT. 21 KELA DEVI BUILDERS PVT. LTD. ITR FOR AY 2011-12 WAS FILED ON 20.03.2012 VIDE ACKNOWLEDGMENT NO.356042621200312. COPY OF THE AUDITED BALANCE SHEET AS ON 31.03.2009 WAS ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENC E OF THIS CO. DOES NOT ARISE. CO. APPEARS TO HAVE THE SOURCE FOR INVESTMENT. 22 WISEMAN MARKETING PVT. LTD. COPY OF AUDITED BALANCE SHEET FOR THE YEAR ENDING 31.03.2006 HAS BEEN FILED. IT RECORDS COULD NOT BE PRODUCED. 23 SHWETA MEHANDI THE RETURN WAS PROCESSED FOR AY 2009-10 U/S 143(1) BY THE DEPARTMENT (CPC) ITSELF ON 17.09.2010 AND REFUND ISSUED. ITR FOR AY WAS FILED ON 26.09.2010 VIDE ACKNOWLEDGMENT NO. 160329921260910. COPY OF THE AUDITED BALANCE 13 ITA NOS. 54/DEL/2014 & ORS PRODUCTS PVT. LTD. SHEET AS ON 31.03.2009 WAS ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENCE OF THIS CO. DOES NOT ARISE. CO. APPEARS TO HAVE THE SOURCE FOR INVESTMENT. 24 VAISHNO DEVI & BUILDING DEVELOPERS PVT. LTD. ITR FOR AY 2011-12 WAS FILED ON 20.03.2012 VIDE ACKNOWLEDGMENT NO.356036291200312. COPY OF THE AUDITED BALANCE SHEET AS ON 31.03.2009 WAS ALSO FILED. THEREFORE, THE QUESTION OF NON-EXISTENC E OF THIS CO. DOES NOT ARISE. CO. APPEARS TO HAVE THE SOURCE FOR INVESTMENT. 5.4. IT WOULD BE SEEN FROM THE ABOVE TABLE THAT IT CANNOT BE CONCLUDED THAT THE SHARE APPLICANT COMPANIES DID NOT EXIST OR THAT THE TRANSACTIONS WERE NOT ESTABLISHED. ONLY IN TWO CASE, VIZ. VIDUR BUILD ERS PVT. LTD. AND WISEMAN MARKETING PVT. LTD., COPIES OF THE ITRS COULD NOT B E FURNISHED BY THE APPELLANT. EVEN IN THESE CASES, COPIES OF THE BALANCE SHEETS F ILED INDICATE THAT THE COMPANIES HAD THE FUNDS / SOURCES TO MAKE INVESTMEN T IN THE SHARE APPLICATION TOWARDS THE APPELLANT COMPANY. THE REVE NUE CANNOT BE TAKING TWO DIFFERENT STANDS. ON THE ONE HAND THE REVENUE I S ACCEPTING AND ADMITTING COMPLIANCE TO ITS OWN LAWS AND PROCEDURE BY WAY OF FILING OF ITR, PAYMENT OF TAXES, PROCESSING AND ISSUE OF REFUNDS, AND ALSO TA X SCRUTINY OF CASES. ON THE OTHER HAND, THE REVENUE CANNOT TAKE THE STAND THAT THE SHARE APPLICATIONS ARE UNEXPLAINED AS SOME OF THE SHARE APPLICANT COMPANIE S COULD NOT BE PHYSICALLY LOCATED BY THE INSPECTOR AT THE GIVEN AD DRESS. FOR THIS THERE COULD BE SEVERAL REASONS - THE INSPECTOR MAY NOT HAVE DON E HIS JOB PROPERLY, OR THE APPLICANT COMPANIES MAY HAVE CHANGED ADDRESS. THERE IS NO COMMENT BY THE REVENUE ON THE REPLIES ADMITTEDLY RECEIVED FROM THE APPLICANT COMPANIES BY POST. THERE IS NO COMMENT ON THE MERIT OF THE DOCUM ENTS FILED. WHEN THE APPELLANT WAS NOT CONFRONTED WITH THE INSPECTORS R EPORT, IT CANNOT BE ALLEGED BY THE REVENUE THAT THE APPELLANT FAILED TO ESTABLI SH THE TRANSACTIONS. THE APPELLANT WAS EVEN SEARCHED BY THE REVENUE BUT NO S UCH EVIDENCE WAS FOUND. PUBLIC FUNCTIONARIES MUST ACT IN A TRANSPARE NT AND NON-PARTISAN MANNER. THIS DOES NOT APPEAR TO BE THE CASE. 5.5. IN VIEW OF THE ABOVE, THE ADDITIONS MADE IN VA RIOUS YEARS, I.E. RS.83,00,000/- FOR AY 2006-07 (A.NO.361/13-14), RS. 12,00,000/- FOR AY 14 ITA NOS. 54/DEL/2014 & ORS 2007-08 (A.NO.360/13- 14), RS.80,75,000/- FOR AY 20 08-09 (A.NO.359/13- 14), RS,2,58,00,000/- FOR AY 2009-10 (A.NO.358/13-1 4), AND RS.75,00,000/- FOR AY 2010-11 (A.NO.357/13-14), ON ACCOUNT OF SHAR E APPLICATIONS / CAPITAL RECEIVED CANNOT BE HELD TO BE UNEXPLAINED. THE CONC LUSION IS NOT TENABLE IN VIEW OF THE EVIDENCE PRODUCED AND MUST BE DELETED. I HOLD SO ACCORDINGLY FOR ALL THESE ASSESSMENT YEARS. THE RESPECTIVE ADDITION S MADE FOR THESE AYS ARE DELETED. IN THE PRESENT ASSESSMENT YEAR 2008-09, THE FACTS A RE IDENTICAL AND THE CIT(A) HAS RIGHTLY FOLLOWED THE ORDER OF A.Y. 2006-07 PASS ED BY THE SAME CIT(A). THERE IS NO NEED TO INTERFERE WITH THE FINDINGS OF THE CI T(A). THEREFORE, APPEAL FILED BY THE REVENUE IS DISMISSED. 9. IN RESULT, ITA NO. 54/DEL/2014 FILED BY THE REV ENUE IS DISMISSED. 10. GROUNDS FOR ITA NO. 55/DEL/2014 (2009-10) ARE AS UN DER: 1. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2,58,00,000/- U/S 68 OF THE ACT W.R.T. PROCUREMENT OF ACCOMMODATION ENTRIES THROUGH SHARE APPLICATION MONEY FROM NONDESCRIPT COMPANIES. 2. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LAW AND ON FACTS IN DELETING AN ADDITION OF RS. 1,29,000/- MADE BY THE AO W.R.T. COMMISSION PAID @ 5% FOR PROCUREMENT OF ACCOMMODATION ENTRIES THROU GH SHARE APPLICATION MONEY FROM NON-DESCRIPT COMPANIES. 3. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A. (A)THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TEN ABLE IN LAW AND ON FACTS. (B)THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING O F THE APPEAL. 11. THE LD. AR MADE SUBMISSION THAT THE INSPECTOR REPOR T WAS NOT CONFRONTED TO THE ASSESSEE DURING THE SEARCH AND AT THE TIME OF THE SEARCH NO 15 ITA NOS. 54/DEL/2014 & ORS INCRIMINATING MATERIAL WAS FOUND. THE LD. AR FURTH ER SUBMITTED THAT THERE WAS NO INVESTIGATION MADE ON BEHALF OF THE ASSESSI NG OFFICER . THEREFORE, THIS CASE IS SQUARELY COVERED BY THE DECISION OF THE HON 'BLE SUPREME COURT IN CASE OF LOVELY EXPORTS (P) LTD. 216 CTR 195. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. FROM THE PERUSAL OF THE RECORDS, IT IS FOUND THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH PROCEEDINGS AND THERE WAS N O INVESTIGATION MADE BY THE ASSESSING OFFICER. THUS, THE RATIO LAID DOWN B Y THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF LOVELY EXPORT (SUPRA) WIL L BE APPLICABLE IN THE PRESENT CASE. BESIDES THAT THE LD. AR FURTHER MADE SUBMISSION THAT THE ISSUE IN ASSESSMENT YEAR 2009-10 IS IDENTICAL TO THAT OF A.Y. 2008-09. THEREFORE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 13. IN RESULT, ITA NO. 55/DEL/2014 FILED BY THE REV ENUE IS DISMISSED. 14. GROUNDS OF APPEAL FOR ITA NO. 56/DEL/2014 (2010 -11) ARE AS UNDER: 1. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LA W AND ON FACTS IN DELETING THE ADDITION OF RS.75,00,000/- U/S 68 OF T HE ACT W.R.T. PROCUREMENT OF ACCOMMODATION ENTRIES THROUGH SHARE APPLICATION MON EY FROM NON-DESCRIPT COMPANIES. 2. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LA W AND ON FACTS IN DELETING AN ADDITION OF RS.37,500/- MADE BY THE AO W.R.T. COMMISSION PAID @ 5% FOR PROCUREMENT OF ACCOMMODATION ENTRIES THROUGH SHARE APPLICATION MONEY FROM NON-DESCRIPT COMPANIES. 3. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN AD MITTING ADDITIONAL EVIDENCE UNDER RULE 46A. 4. (A)THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TEN ABLE IN LAW AND ON FACTS. (B)THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING O F THE APPEAL. 16 ITA NOS. 54/DEL/2014 & ORS 15. THE LD. DR SUBMITTED THAT THE COMPANIES WERE NO T EXISTED AS PER THE INSPECTOR REPORT. THE LD. DR RELIED UPON THE ASSESS MENT ORDER FOR A.Y. 2010- 11. THE LD. AR SUBMITTED THAT THE ISSUE IS IDENTICA L WITH THE A.Y. 2008-09. 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT RECORDS. FOR ASSESSMENT YEAR 2010-11, THE ASSESSEE HAS FILED ALL THE REQUIRED DOCUMENTS BEFORE THE ASSESSING OFFICER. THEREFORE, THE SUBMI SSION OF THE LD. DR THAT THE COMPANIES WERE NOT EXISTED AS PER THE INSPECTOR REP ORT IS NOT PROPER. THEREFORE, THE APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2010-11 IS DISMISSED. 17. IN RESULT, ITA NO. 56/DEL/2014 FILED BY THE RE VENUE IS DISMISSED. 18. GROUNDS OF APPEAL FOR ITA NO. 403/DEL/2015 (201 1-12) ARE AS UNDER: 1. THE LD. CIT (A) - II BOTH ON FACTS AND IN LAW AND A LSO IN THE CIRCUMSTANCE OF THE CASE HAS ERRED IN CONFIRMING THE ADDITION OF RS . 3,00,000/- U/S 68 OF THE IT ACT ON ACCOUNT OF ACCEPTANCE OF SHARE APPLICATIO N MONEY FROM M/S INDLON HOSIERY PVT. LTD. BASED ON THE CONJECTURE AND SURMI SES IGNORING THE FACT THAT THERE WAS NO ADVERSE MATERIAL BEFORE THE AO TO DOUB T THE IDENTITY AND CREDITWORTHINESS OF THE ABOVE SHARE APPLICANT AND A LSO THE GENUINENESS OF THE TRANSACTION. 2. THE APPELLANT CRAVES LEAVE TO ADD, DELETE, MODIFY / AMEND THE ABOVE GROUNDS OF APPEAL WITH THE PERMISSION OF THE HONBL E BENCH. 19. THE BRIEF FACTS FOR A.Y. 2011-12 ARE THAT THE A SSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE PROVIDING LOAN AND INVESTME NTS IN SHARES AND SECURITIES. THE ASSESSEE COMPANY FIELD E-RETURN OF INCOME FOR ASSESSMENT YEAR 2011-12 ON 27/9/2011 DECLARING INCOME OF RS.2,76,44 0/-. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSED U/S 143(3) OF TH E INCOME TAX ACT, 1961 WERE ORDER DATED 28/2/2014. THE ASSESSING OFFICER COMP UTED THE INCOME OF THE ASSESSEE AT RS.5,76,440/- THEREBY MAKING AN ADDITIO N OF RS.3 LACS U/S 68 OF 17 ITA NOS. 54/DEL/2014 & ORS THE INCOME TAX AC T ON ACCOUNT OF ACCEPTANCE OF SHA RE APPLICATION MONEY FROM M/S INDLON HOSIERY PVT. LTD. 20. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE AS SESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF TH E ASSESSEE BY HOLDING THAT SINCE THE ASSESSING OFFICER MADE ENQUIRIES BUT ONL Y PART DETAILS WERE PROVIDED BY THE PARTIES AND SINCE THE PART BANK STATEMENT OF THE PARTY REVEALED TYPICAL ACCOMMODATION ENTRY TRANSACTIONS. THEREFORE, FOLLO WING THE RATIO IN CASE OF GLOBUS SECURITIES AND FINANCE PVT. LTD. 41 TAXMAN.C OM 465 DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE FAILED TO DISCHARGE ITS OBLIGATION IN PROVING THE GENUINENESS OF THE SUMMON S CREDITED ITS BOOKS OF ACCOUNTS. 21. THE LD. AR SUBMITTED THE ASSESSEE ACCEPTED SHAR E CAPITAL FROM ONE M/S INDLON HOSIERY PVT. LTD. BY ACCEPTING THROUGH CHEQU E AMOUNT OF RS. 3,00,000/- FOR ALLOTMENT OF 3,000 SHARES OF RS. 10 EACH ON SHA RE PREMIUM OF RS. 90 PER SHARE. DURING ASSESSMENT PROCEEDINGS, ALL THE EVIDE NCES LIKE ITR, BANK STATEMENTS, COPY OF PAN CARD, NAMES AND ADDRESSES O F THE DIRECTORS AND AUDITED BALANCE SHEET OF THE SHARE APPLICANT WERE S UBMITTED BY THE SHARE APPLICANT DIRECTLY IN RESPONSE TO NOTICE U/S 133(6) . THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE ON THE GROUND THAT IN NORM AL DAYS THE SHARE APPLICANT COMPANY HAS NOMINAL BALANCE AND IT DID NO T HAVE OWN FUNDS TO MAKE INVESTMENT OF RS.3,00,000/-. IN REPLY TO SHOW CAUSE NOTICE THE ASSESSEE EXPLAINED THAT THE SHARE APPLICANT COMPANY WAS ASSE SSED U/S 143(3) FOR A.Y. 2007-08 VIDE ORDER DATED 10.12.2009. THE APPLICANT IS A REGISTERED COMPANY UNDER COMPANIES ACT WITH VALID CIN NUMBER. THE COMP ANY HAS BEEN OPERATING BANK ACCOUNT WITH NATIONALIZED BANK WITH KYC DOCUME NTS AND DUE COMPLIANCE OF BANKING REGULATIONS, THE DETAILS OF T HE SAID COMPANY WAS SUBMITTED BEFORE THE ASSESSING OFFICER. TO PROVE CR EDITWORTHINESS, THE ASSESSEE SUBMITTED THAT THE SAID COMPANY HAS NET WORTH OF RS .300.69 LAKHS ON 31.03.2010 AND RS. 345.95 LAKH ON 31.03.2011. SO SA ID COMPANY HAS 18 ITA NOS. 54/DEL/2014 & ORS SUFFICIENT FUNDS ACCUMULATED OUT OF PAST INFLOW OF FUNDS. THE ASSESSING OFFICER REJECTED THE EXPLANATION OF THE ASSESSEE BY RELYING ON CIT VS. GLOBUS SECURITIES AND FINANCE P LTD. TO HOLD THAT CRITERIA OF IDENTIT Y, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION HAS NOT BEEN SATISFIED. THE CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY RELYING ON C IT VS. FOCUS EXPORTS P LTD., CIT VS. ONASSIS AXLES P LTD. AND CIT VS. MAF ACADEM Y P LTD., CIT VS. N TARIKA PROPERTIES INVESTMENT P LTD. AND CIT VS. GLOBUS SEC URITIES & FINANCE P LTD. THE CIT(A) PUT ONUS ON THE ASSESSEE TO PRODUCE THE DIRECTOR OF THE SHARE APPLICANT COMPANY ON ITS OWN AS ACCORDING TO HER IT WAS DUTY OF THE ASSESSEE TO PRODUCE THE DIRECTOR TO DISCHARGE ONUS U/S 68. T HE CIT(A) ANALYZED THE BANK ACCOUNT OF THE SHARE APPLICANT COMPANY AND OBS ERVED THAT THE PARTY WAS MERELY ENGAGED IN PROVIDING ACCOMMODATION ENTRY. 22. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSI NG OFFICER AND CIT(A). 23. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CIT(A) PUT ONUS ON THE ASSESSEE TO PRO DUCE THE DIRECTOR OF THE SHARE APPLICANT COMPANY ON ITS OWN AS ACCORDING TO HER IT WAS DUTY OF THE ASSESSEE TO PRODUCE THE DIRECTOR TO DISCHARGE ONUS U/S 68. THE CIT(A) ANALYZED THE BANK ACCOUNT OF THE SHARE APPLICANT COMPANY AND OBSERVED THAT THE PARTY WAS MERELY ENGAGED IN PROVIDING ACCOMMODATION ENTRY . THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING THAT SINCE TH E ASSESSING OFFICER MADE ENQUIRIES BUT ONLY PART DETAILS WERE PROVIDED BY TH E PARTIES AND SINCE THE PART BANK STATEMENT OF THE PARTY REVEALED TYPICAL ACCOM MODATION ENTRY TRANSACTIONS. DURING ASSESSMENT PROCEEDINGS, ALL TH E EVIDENCES LIKE ITR, BANK STATEMENTS, COPY OF PAN CARD, NAMES AND ADDRESSES O F THE DIRECTORS AND AUDITED BALANCE SHEET OF THE SHARE APPLICANT WERE S UBMITTED BY THE SHARE APPLICANT DIRECTLY IN RESPONSE TO NOTICE U/S 133(6) . THUS, THE ASSESSING OFFICER AS WELL AS THE CIT (A) HAS NOT AT ALL CONSIDERED AL L THE DOCUMENTS WHICH WAS PROVIDED BY THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). THEREFORE, IT WILL BE PERTINENT TO REMAND BACK THIS MATTER TO THE FILE OF THE ASSESSING OFFICER TO 19 ITA NOS. 54/DEL/2014 & ORS TAKE CONGNIZANCE OF THE DOCUMENTS FILED BY THE ASSE SSEE. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWI NG PRINCIPLES OF NATURAL JUSTICE. 24. IN RESULT, ITA NO. 403/DEL/2015 FILED BY THE AS SESSEE FOR ASSESSMENT YEAR 2011-12 IS PARTLY ALLOWED FOR STATISTICAL PURP OSE. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH JULY, 2018 . SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 09/07/2018 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 20 ITA NOS. 54/DEL/2014 & ORS DATE OF DICTATION 29 .05.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29 .05.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 09.07 .2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 09.07 .2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 09.07 .2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER