SD Polyfilms Pvt Ltd, New Delhi V. ITO WARD - 22(1), New Delhi

ITA 4034/DEL/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9670 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 06-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Reopening of assessment; Bogus purchase; Unexplained cash credit; Bogus Share capital; Search and seizure; Document seized; Principle of natural justice; Tangible material; Accommodation entries; Reason to believe; Documents seized; Borrowed satisfaction
• Section: 69C; 143(3); 133(6); 143(1); 43; 13; 147; 131; 148; 132; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI B.R.R KUMAR, ACCOUNTANT MEMBER I.T.A. NO.4034/DEL/2019 ASSESSMENT YEAR: 2010-11 SD POLYFILMS PVT. LTD., C-II/388 JANAKPURI, DELHI. VS. ITO, WARD-22(1), NEW DELHI. TAN/PAN: AANCS3743A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI KAPIL GOEL, ADV. RESPONDENT BY: SHRI S.S. RANA, CIT-D.R. DATE OF HEARING: 19 09 2019 DATE OF PRONOUNCEMENT: 18 12 2019 O R D E R PER AMIT SHUKLA, JM:- THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 22.02.2019, PASSED BY COMMISSIONER OF INCOME TAX (APPEALS)-VIII, NEW DELH I FOR THE QUANTUM OF ASSESSMENT U/S 143(3)/147 FOR THE ASSESS MENT YEAR 2010-11. IN THE GROUNDS OF APPEAL, THE ASSESSE E BESIDES MERITS HAS CHALLENGED THE VALIDITY OF REOPENING U/S . 147/143 (3). IN THE APPEAL MEMO, THE ASSESSEE HAS RAISED FO LLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN ASS UMING JURISDICTION U/S 147 AND PASSING THE IMPUGNED REASS ESSMENT ORDER U/S 147/143(3), IS ARBITRARY, UNJUSTIFIED, IL LEGAL AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. I.T.A. NO.4034/DEL/2019 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (A) HAS ERRED IN HOLDING AS UNDER WHILE PASSING THE IMPUGNE D ORDER. THAT AO HAS NOT ACTED MECHANICALLY BEFORE FRAMIN G THE REASONS TO BELIEVE. LD. AO HAS NOT ACTED UNDER THE BORROWED BELIEF O R UNDER DIRECTIONS. THAT THE REASONS RECORDED BY AO ARE BASED UPON T HE SPECIFIC INFORMATION. THAT AO HAS APPLIED HIS MIND TO THE INFORMATION RECEIVED INDEPENDENTLY. AO HAS VALIDLY ASSUMED JURISDICTION U/S 148. THAT NO BACK MATERIAL LIKE SEIZED MATERIAL AUTHE NTICATED COPY, INVESTIGATION WING REPORT DETAILS VIS A VIS A SSESSEE, AND STATEMENTS ETC. IF ANY RECORDED BY INVESTIGATION WI NG, WAS LAWFULLY CONFRONTED TO ASSESSEE THUS INVALIDATING E NTIRE REOPENING; THAT NONE OF THE ASSESSEE SUBMISSION IS APPRECIA TED WHILE ADJUDICATING THE APPEAL; THAT ONLY ACTION COULD HAVE BEEN TAKEN U/S 153C OF THE ACT AND NOT U/S 147/148 OF THE ACT; THAT NONE OF EVIDENCE FILED BY ASSESSEE IS OVERR ULED IN ACCORDANCE WITH LAW. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS.74,00,000/- U/S 68 ON ACCOUNT OF SHARE CAPITAL R ECEIVED AND THAT TOO WITHOUT GOING INTO MERITS OF THE CASE AND WITHOUT CONSIDERING THE SUBMISSIONS/EVIDENCES FILED BY THE ASSESSEE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (A) HAS ERRED IN PASSING THE IMPUGNED ORDER WITHOUT PROVIDI NG THE ADEQUATE OPPORTUNITY OF HEARING. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF I.T.A. NO.4034/DEL/2019 3 RS.185000/- ON ACCOUNT OF ALLEGED COMMISSION EXPENS ES. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, L D. CIT(A) HAS ERRED IN LAW AND ON FACTS IN PASSING THE IMPUGNED O RDER AS THE SAME HAVE BEEN PASSED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AS LD. CIT(A) HAS REJECTED THE REQUEST FOR ADJOURNMENT PETITION DATED 12-02-2019 FILED BY THE ASSESSEE WHE REIN IT HAS BEEN SPECIFICALLY MENTIONED THAT SOME VITAL INFORMA TION IS PENDING FOR WHICH RTI PETITION WAS TO BE FILED. 2. THE FACTS IN BRIEF ARE THAT ASSESSEE-COMPANY WAS INCORPORATED ON 11.09.2009 AND RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 WAS FILED ON 08.10.2010 DEC LARING INCOME OF RS.10,85,664/-. SUCH RETURN WAS DULY PROC ESSED U/S. 143(1) VIDE INTIMATION DATED 29.08.2011. LATER ON, THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT U/S.1 47 VIDE ISSUANCE OF NOTICE U/S.148 WHICH WAS SERVED UPON ON 30.03.2017 BY SPEED POST AND ALSO BY E-MAIL. IN RES PONSE TO THE SAID NOTICE, ASSESSEE VIDE LETTER DATED 20.07.2 017 STATED THAT ORIGINAL RETURN FILED ON 08.10.2010 MAY BE CON SIDERED AS RETURN FILED IN RESPONSE TO THE NOTICE U/S.148 AND ALSO REQUESTED TO PROVIDE THE COPY OF REASONS RECORDED FOR REOPENING THE ASSESSMENT. THE COPY OF REASONS WAS D ULY PROVIDED TO THE ASSESSEE VIDE ORDER-SHEET ENTRY DAT ED 08.08.2017. HERE IN THIS CASE, THE ASSESSING OFFICE R HAS SOUGHT TO REOPEN THE CASE ON THE BASIS OF INFORMATI ON RECEIVED FROM ADIT (INV.) UNIT-2(1), NEW DELHI THAT THE ASSE SSEE HAD TAKEN ACCOMMODATION ENTRY OF SHARE CAPITAL AND PREM IUM AMOUNTING TO RS.74 LACS FROM AN ENTRY PROVIDER. THE DETAILED REASON RECORDED BY THE ASSESSING OFFICER READS AS UNDER:- I.T.A. NO.4034/DEL/2019 4 REASON FOR ISSUE OF NOTICE U/S 148 FOR REOPENING OF ASSESSMENT U/S 147 OF I.T ACT, 1961 FOR THE A.Y. 2010-11 IN TH E CASE OF M/S S.D. POLYFILMS PVT. LTD.(PAN; AANCS3743A) 1. FACTS OF THE CASE:- THE ASSESSEE-COMPANY WAS INCORPORATED ON 11.09.2009 AS NON- GOVERNMENT COMPANY. THE FOLLOWING PERSONS ARE DIREC TORS OF THE COMPANY:- I. SH. KRISHAN MOHAN SHARAN II. SH. ANIL MOHAN SHARAN III. SH. DUSHYANT SINGH THE RETURN OF INCOME WAS FURNISHED BY THE ASSESSEE FOR A.Y. 2010- 11 ON 08/10/2010 BY DECLARING INCOME OF RS. 10,85,6 64/-. RETURN WAS PROCESSED U/S 143(1) ON 29.08.2011 AT INCOME OF RS. 10,85,664/-. AS PER SYSTEM, THE CASE IS FOUND TO BE NOT SELECTED FOR SCRUTINY U/S 143(3) OF THE INCOME TAX ACT, 1961 FOR A.Y. 2010-11. THIS IS THE FIRST YEAR OF FILING ITR OF THE ASSESSE E COMPANY BECAUSE THE ASSESSEE WAS INCORPORATED DURING THE PREVIOUS Y EAR 2009-10 RELEVANT TO A.Y. 2010-11. 2. IN THIS CASE, VERY VITAL AND CREDIBLE INFORMA TION RELATING TO EVASION OF INCOME TAXES HAS BEEN RECEIVED-FROM THE FOLLOWING SOURCE:- 2.1 THE MAIN SOURCE OF NEW INFORMATION IN THIS CAS E IS A SEARCH U/S 132 OF THE INCOME TAX ACT, 1961 WHICH WAS CARRI ED OUT AT THE RESIDENCE OF SHRI PRADEEP KUMAR JINDAL, WHO HAPPENE D TO BE MAIN PERSON ENGAGED IN PROVIDING BOGUS ENTRIES OF SHARE CAPITAL, SHARE PREMIUM AND UNSECURED LOANS TO A LARGE NUMBER OF BE NEFICIARIES. THE COMPANIES OF SHRI PRADEEP KUMAR JINDAL HAVE NO I.T.A. NO.4034/DEL/2019 5 CREDITWORTHINESS TO INVEST SUCH HUGE AMOUNTS IN SHA RE CAPITAL/ SHARE PREMIUM OR TO ISSUE LOANS AND ADVANCES. 2.2 AS PER THE MATERIAL IMPOUNDED FROM THE ENTRY P ROVIDER SHRI PRADEEP KUMAR JINDAL, IT WAS SEEN THAT THE COMPANIE S CONTROLLED BY SHRI PRADEEP KUMAR JINDAL HAS MADE INVESTMENT IN TH E FORM OF SHARE CAPITAL/SHARE PREMIUM, LOAN & ADVANCES IN LIE U OF CASH TO A LARGE NUMBER OF BENEFICIARIES THROUGH FRONT /NON DE SCRIPT COMPANIES MANAGED AND CONTROLLED BY HIM WITH THE HELP OF DUMM Y DIRECTORS. SIMULTANEOUSLY, SEARCH AND SEIZURE ACTION WAS ALSO CARRIED OUT ON FARIDABAD BASED SHRI SAJAN KUMAR JAIN GROUP WHO HAD TAKEN ACCOMMODATION ENTRIES OF MORE THAN RS. 100 CRORES I N THE FORM OF BOGUS SHARE PREMIUM, EXEMPT LTCG AND ADVANCE AGAINS T PROPERTY ETC. MAJORLY FROM FRONT AND NON- DESCRIPT COMPANIES OF SHRI PRADEEP KUMAR JINDAL. THERE AN; 69 COMPANIES, 16 FIRMS CONT ROLLED BY SHRI PRADEEP JINDAL FOR DEPOSITING CASH AND PROVIDING OF THE ACCOMMODATION ENTRIES IN FORM OF SHARE CAPITAL/SHAR E PREMIUM/UNSECURED LOAN. THE LIST OF THESE DUMMY COMPANY ALSO INCLUDE THE COMPANIES PROVIDED ENTRY THE ASSESSEE. 2.3 AS PER THE INFORMATION RECEIVED FROM THE OFFICE OF ASSISTANT DIRECTOR OF INCOME TAX-(INVESTIGATION)- UNIT-2(L), NEW DELHI THAT SHRI PRADEEP KUMAR JINDALS FOLLOWING DUMMY COMPANIES MA DE INVESTMENTS THROUGH SHARE CAPITAL/SHARE PREMIUM/UNS ECURED LOAN WITH THE ASSESSEE COMPANY AS FOLLOWS:- I.T.A. NO.4034/DEL/2019 6 I HAVE CAREFULLY PERUSED AND CONSIDERED THE RETURN OF INCOME OF THE ASSESSEE, INFORMATION RECEIVED FROM ADIT (INVESTIGA TION) UNIT-2(L), NEW DELHI, AND HAVE REACHED THE FOLLOWING CONCLUSIO N:- THAT SHRI PRADEEP KUMAR JINDAL WAS ENGAGED IN THE L OUSINESS OF PROVIDING ENTRIES OF BOGUS SHARE CAPITAL/SHARE PREM IUM/LOAN OR ADVANCES. THE MODUS OPERANDI OF SH. PRADEEP KUMAR JINDAL WAS TO PROVIDE CHEQUES/RTGS OF THE DUMMY CONTROLLED BY HIM IN LIEU OF CASH AND COMMISSION @ 2.5%. THE FOLLOWING PERSONS ARE FOUND TO BE DIRECTORS IN THE COMPANIES CONTROLLED BY SH. PRADEEP KUMAR JINDAL FROM WHICH T HE ASSESSEE COMPANY HAS RECEIVED AMOUNT OF RS. 74,00,000/- IN F ORM OF SHARE CAPITAL/SHARE PREMIUM/UNSECURED LOAN OR OTHERS: S.N O BENEFICIARIES NAME OF ENTRY PROVIDER DATE AMOUNT (RS.) I) M/S S D POLYFILMS PVT LTD LUSTRE FINLEASE & INVESTMENT PVT LTD 23/09/2009 RS. 15,00,0 00 / II) M/S S D POLYFILMS PVT LTD HAJIMA RESORTS LTD 0 1/10/2009 RS. 14,00,000/- III) M/S S D POLYFILMS PVT LTD PAWANSUT HOLDINGS LTD 09/10/ 2 009 RS.15,00,000/ - IV) M/S S D POLYFILMS PVT LTD GANGA DEBT RECOVERY AGENCY PVT LTD 10/03/2010 RS.10,00,000/ - V) M/S S D POLYFILMS PVT LTD JACARANDA CAPITAL LTD (AR CHIT FINESCRIP LTD) 11/03/2010 RS.10,00,000/ - VI) M/S S D POLYFILMS PVT LTD SAWERA HOUSING & CONSTRUCTION PVT LTD. 11/03/2010 RS.10,00,000/ - TOTA L RS.74,00,000/ - 3. REASON FOR FORMATION OF BELIEF: - I.T.A. NO.4034/DEL/2019 7 3.1 I HAVE PERUSED AND ANALYZED THE STATEMENT RE CORDED ON OATH U/S 131 OF SH. PRADEEP KUMAR JINDAL AND OTHER DIRECTORS OF THE DUMMY COMPANIES. IN THE STATEMENT RECORDED ON OATH SH. PRADEEP KUMAR JINDAL HAS HIMSELF ACCEPTED THAT ONE DIRECTOR MEERA MISHRA HAD BEEN WORKING AS RECEPTIONIST IN HIS COMPANY AND SHE WAS MADE DIR ECTOR ONLY FOR THE NAMESAKE. FURTHER SH. PRADEEP KUMAR JINDAL HAS ALSO STATED THAT ANOTHER DIRECTOR SMT. SEEMA KHANDELWAL WAS ALS O KNOWN TO HIM AND HE HAS USED HER RESIDENTIAL ADDRESS AS REGI STERED ADDRESS OF SOME OF THE PAPER COMPANIES FORMED BY HIM. FURTHERMORE, IT IS PERTINENT TO MENTION THAT SMT. S EEMA KHANDELWAL HAS STATED IN HER STATEMENT HER EDUCATIONAL QUALIFI CATION IS 8TH PASS; THAT SHE IS HOUSEWIFE; THAT SHE IS NOT PARTNE R IN ANY FIRM OR S.NO. NAME OF THE PAPER COMPANIES DIRECTORS AS PER MCA RECORD 1. LUSTRE FINLEASE & INVESTMENT PVT LTD SH. SUBODH KUMAR KHANDELWAL MS. SEEMA KHANDELWAL 2. HAJIMA RESORTS LTD SH. LAXMAN SINGH SATYAPAL, MS. MEERA MIOHRA SH. VIJAY SHANKAR MISHRA 3. PAWANSUT HOLDINGS LTD SH. PAWAN KUMAR PODDAR SH, LAXMAN SINGH SATYAPAL MS. SEEMA KHANDELWAL SH. PRADEEP KUMAR JINDAL SH. RAHUL 4. GANGA DEBT RECOVERY AGENCY PVT LTD SH. SUBODH KUMAR KHANDELWAL MS. SEEMA KHANDELWAL 5. JACARANDA - CAPITAL LTD(ARCHIT FINESCRIP LTD) SH. AJAY KUMAR JINDAL SH. LAXMAN SINGH SATYAPAL MS. MEERA MIS'IRA MS. SEEMA KHANDELWAL 6. SAWERA HOUSING & CONSTRUCTION PVT LTD. MS. ARCHIT JINDAL SH. PRADEEP KUMAR JINDAL I.T.A. NO.4034/DEL/2019 8 RELATED TO ANY COMPANY; THAT SH. PRADEEP KUMAR JIND AL IS KNOWN TO HER HUSBAND SH. SUBODH KUMAR KHANDELWAL AND SH. PRA DEEP KUMAR JINDAL SOMETIMES VISITS HER HOUSE; THAT SHE H AS NO BUSINESS RELATION WITH SH. PRADEEP KUMAR JINDAL; THAT SHE DO ES NOT KNOW SH. LAXMAN SINGH SATYAPAL OR MRS. MEERA MISHRA OR SH. S AJAN KUMAR JAIN; THAT SHE DOES NOT KNOW ANYTHING ABOUT COMPANI ES REGISTERED AT HER ADDRESS; THAT SHE IS NOT AWARE ABOUT SHARE TRANSACTION/SHARE PREMIUM BY SUCH COMPANIES AND THA T SHE IS NOT DIRECTOR AND SHE DOES NOT KNOW ANYTHING ABOUT 24 CO MPANIES IN WHICH SHE IS DIRECTOR AGAINST DIN 00007351. SIMILARLY, MS. MEERA MISHRA ONE OF THE DIRECTORS IN THE PANER COMPANIES FORMED BY SH. PRADEEP KUMAR JINDAL IN HER STATEMENT STATED THAT SHE HAD WORKED AS RECEPTIONIST AT OFFIC E OF SH. PRADEEP KUMAR JINDAL SINCE 1994 TO 2006; THAT SHE IS BA AND SHE HAS NO KNOWLEDGE OF ENGLISH; THAT SHE WAS PAID RS. 5000/-P ER MONTKBY SH. PRADEEP KUMAR JINDAL; THAT SH. PRADEEP KUMAR JI NDAL HAS MADE HER DIRECTOR IN CERTAIN COMPANIES; THAT SHE HA D NO KNOWLEDGE OF THE COMPANIES IN WHICH SHE IS DIRECTOR; THAT SHE IS NOT AWARE OF DIN; THAT SHE IS SIGNING THE PAPERS RELATED TO SH. PRADEEP KUMAR JINDAL EVEN AFTER LEAVING THE JOB ON BASIS OF GOOD FAITH; THAT SHE IS NOT AWARE OF THE BUSINESS AND REGISTERED PREMISES O F SUCH COMPANIES IN WHICH SHE IS DIRECTOR; THAT HER WORK A S DIRECTOR WAS ONLY LIMITED TO SIGNING THE PAPERS RELATED TO COMPA NIES OF SH. PRADEEP KUMAR JINDAL. SH. SUBHODH KUMAR KHANDELWAL IN HIS STATEMENT STATE D THAT HIS EDUCATIONAL QUALIFICATION IS 7TH PASS; THAT HE IS I N BUSINESS OF MANUFACTURING PLASTIC PLATES OF ELECTRIC METER AND EARNS RS. 20,000- 25,000 P.M. FROM THIS BUSINESS; THAT EARLIER HE USE D TO LOOK AFTER I.T.A. NO.4034/DEL/2019 9 MAINTENANCE OF OFFICE AND HOUSE OF SH. PRADEEP KUMA R JINDAL DURING YEAR 2004 TO 2011; THAT HE KNOWS SH. PRADEEP KUMAR JINDAL SINCE CHILDHOOD; THAT SHRI PRADEEP KUMAR JINDAL HAS MADE HIM SIGN CERTAIN DOCUMENTS, NATURE OF WHICH HE IS NOT AWARE AS HE IS NOT MUCH EDUCATED; THAT HE HAD SIGNED SOME BLANK CHEQUE BOOKS OF UNION BANK OF INDIA, STATE BANK OF INDIA AND VIJAYA BANK IN THE OFFICE OF SH. PRADEEP KUMAR JINDAL; THAT HE DOES NO T KNOW SH. SAJJAN KUMAR JAIN; THAT SH. PRADEEP KUMAR JINDAL MA Y HAVE GIVEN 88, BALDEV PARK, PARWANA ROAD, DELHI AS REGISTERED ADDRESS OF CERTAIN COMPANIES; THAT SHRI PRADEEP KUMAR JINDAL H AD MADE HIM DIRECTOR IN MANY COMPANIES WITHOUT HIS KNOWLEDGE AN D THEREFORE HE RESIGNED; THAT HE DOES NOT KNOW AS TO HOW HIS RESID ENTIAL ADDRESS HAS BEEN USED AS THE REGISTERED ADDRESS OF VARIOUS COMPANIES; THAT ALL SUCH COMPANIES BELONG TO SH. PRADEEP KUMAR JIND AL; THAT MANY LETTERS OF SUCH COMPANIES WERE RECEIVED AT THEIR AD DRESS WHICH WERE LATERON COLLECTED BY SH. PRADEEP KUMAR JINDAL AND T HAT HE HAS BEEN MADE DIRECTOR IN VARIOUS COMPANIES BY WRONG MEANS. THE STATEMENT RECORDED ON OATH OF SH. PRADEEP KUMAR JINDAL & OTHE R DUMMY DIRECTORS INDICATES THE FACTS THAT ALL OF THE DUMMY ELECTORS WERE ACTING ON THE DIRECTION OF SH. PRADEEP KUMAR JINDAL AND THEY WERE NOT AWARE OF ANY ACTUAL AFFAIRS OF THE COMPANIES IN WHICH THE Y WERE MADE DUMMY DIRECTORS BY SH. PRADEEP KUMAR JINDAL. 3.2 THE RETURN OF INCOME OF THE ASSESSEE COMPANY HA S BEEN FILED ON 08/ 10/2010 FOR THE A.Y 2010-11 DECLARING INCOME OF RS. 10,85,664/- . THEREAFTER THE RETURN WAS PROCESSED U NDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 ON 18/04/2011 AT NIL INCOME. THE CASE WAS NOT SELECTED FOR THE AY. 2010-11. ON P ERUSAJ OF RETURN FOR THE YEAR UNDER CONSIDERATION IT IS SEEN THAT TH E FOLLOWING I.T.A. NO.4034/DEL/2019 10 INFORMATION WAS DECLARED BY THE ASSESSEE:- A. SHARE CAPITAL(ISSUED, SUBSCRIBED AND PAID UP):- RS. 12,20,000, B.SECURITIES PREMIUM RS. 1,00,80,00 0/- C. UNSECURED LOANS(OTHER THAN BANK) RS. 1,41,3 6,800/- D. PURCHASE RS. 1,83,29,764/- E. SALE RS. 1,49,46,517/- THE ABOVE DATA SHOWS THAT THE TRANSACTIONS OF PURCH ASE AND SALE DO NOT COMMENSURATE WITH THE AMOUNT OF SECURITY PRE MIUM AND UNSECURED LOAN. KURT HER, THE FINANCIAL DATA WAS CO RROBORATED WITH THE INFORMATION RECEIVED FROM ADIT (INVESTIGATION) UNIT-2(1), NEW DELHI. ACCORDINGLY, IT IS FOUND THAT THE ASSESSEE H AS RECEIVED SHARE CAPITAL/SECURITY PREMIUM/UNSECURED LOAN FROM THE EN TITIES CONTROLLED BY SH. PRADEEP KUMAR JINDAL. 3.3 A PERUSAL OF DOCUMENTS AS SEIZED FROM THE PREMI SES OF SHRI PRADEEP KUMAR JINDAL AND OTHER ANNEXURES HAVE REVEA LED THAT BOGUS SHARE CAPITAL/SECURITIES PREMIUM AMOUNTING TO RS. 74,00,000/- RECEIVED BY THE ASSESSEE COMPANY FROM T HE ENTRY PROVIDERS I.E. M/S LUSTRE FINLEASE & INVESTMENT PVT LTD, M/S HAJIMA RESORTS LTD, PAWANSUT HOLDINGS LTD, M/S GANG A DEBT RECOVERY AGENCY PVT LTD., M/S. JACARANDA CAPITAL LT D. (ARCHIT FINELEASE LTD, M/S. SAWERA HOUSING & CONSTRUCTION PVT. LTD. WHICH WERE CONTROLLED BY SHRI PRADEEP KUMAR JINDAL. 3.4 DURING THE COURSE OF SEARCH PROCEEDINGS ON 18.1 1.2015 AT HIS RESIDENCE PREMISES, SH. PRADEEP KUMAR JINDAL ADMITT ED THAT HE HAS PROVIDED ACCOMMODATION ENTRIES OF VARIOUS NATURES I N LIEU OF CASH I.T.A. NO.4034/DEL/2019 11 THROUGH HIS FRONT COMPANIES. DURING THE COURSE OF POST SEARCH INVESTIGATIONS, PIECES OF EVIDENCE WERE FOUND WHICH ESTABLISHED BEYOND DOUBT THAT SH. PRADEEP KUMAR JINDAL HAS EARN ED /CHARGED COMMISSION IN CASH ON ACCOMMODATION ENTRIES AT HIGH ER RATES COMPARED TO RATES ADMITTED BY HIM. SH. PRADEEP KUMA R JINDAL EXPLAINED THE WORKING OF COMMISSION IN HIS STATEMEN T AND ADMITTED THAT HE HAD CHARGED COMMISSION @ 2.50% ON ACCOMMODA TION ENTRIES. 3.5 A CAREFUL SCRUTINY OF INFORMATION RECEIVED FRO M THE ADIT (INVESTIGATION; UNIT- 2(1), NEW DELHI AND SUBSEQUEN T ANALYSIS OF REPORT OF ADIT (INVESTIGATION) UNIT-2(L), NEW DELHI LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE ASSESSEE HAD RECEI VED BOGUS SHARE CAPITAL/SECURITIES PREMIUM/UNSECURED LOAN OF RS. 74 ,00,000/- FROM COMPANY ENGAGED IN BUSINESS OF PROVIDING ENTRIES OF BOGUS SHARE CAPITAL/SECURITY PREMIUM. ACCORDINGLY, AN AMOUNT OF RS. 74,00,000/- REPRESENT UNEXPLAINED CREDIT U/S 68 OF THE ACT IN BOOKS OF A/C OF THE ASSESSEE. 3.6 A CAREFUL EXAMINATION/ANALYSIS OF THE REPORT R ECEIVED FROM INVESTIGATION WING, NEW DELHI, DATA OF TRANSACTIONS AND VERIFICATION OF ITR LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE ASSESSEE COMPANY HAS TAKEN ACCOMMODATION ENTRY AT LEAST UPTO THE AMO UNT OF RS.74,00,000/- IN THE FORM OF SHARE CAPITAL/ SECURI TY PREMIUM/ UNSECURED LOAN WHICH IS COVERED UNDER THE VIOLATION OF CRITERIA OF IDENTITY, CREDITWORTHINESS, AND GENUINENESS OF THE TRANSACTIONS AS PRESCRIBED U/S 68 OF INCOME TAX ACT, 1961. 4 INCOME CHARGEABLE TO TAX ESCAPING ASSESSMENT 4.1 CONSIDERING THE ABOVE REFERRED CREDIBLE INFORM ATION, ENQUIRIES AND ANALYSIS SUBSEQUENT TO THE .INFORMATION, I HAVE REASON TO I.T.A. NO.4034/DEL/2019 12 BELIEVE THAT AN AMOUNT AT LEAST OF RS. 74,00,000/- & COMMISSION @ 2.5% AMOUNTING TO 1,85,000/- (TOTAL RS. 75,85,000/- ) HAS ESCAPED ASSESSMENT IN CASE THE OF M/S S D POLYFILMS PVT LTD FOR THE A.Y 2010-11 WITHIN THE MEANING OF SECTION 147/148 OF IN COME-TAX ACT, 1961. 4.2 SINCE MORE THAN 4 YEARS OF THE RELEVANT YEARS HAVE PASSED AND THE INFORMATION RECEIVED FROM THE INVESTIGATION WING THAT TRANSACTIONS ARE IN THE NATURE OF ACCOMMODATION ENT RIES, ARE NON DISCLOSURE OF MATERIAL FACTS PERTAINING TO SUCH TRANSACTIONS WHICH HAS NOT BEEN DISCLOSED BY THE ASSESSEE IN THE RETUR N OF INCOME OR DURING THE ASSESSMENT PROCEEDINGS OF THIS RELEVANT YEAR. THUS, THIS SPECIFIC CONDITION FOR REOPENING IS HEREBY FULLY FI LLED IN THE INSTANT CASE AS ASSESSEE HAS FAILED TO DISCLOSE SUCH MATERI AL FACTS ON ITS OWN EARLIER. THE CASE IS SQUARELY COVERED UNDER PRO VISIONS OF SECTION 147 OF INCOME- TAX ACT, 1961. 4.3 MOREOVER, AS THE CASE PERTAINS TO A PERIOD BEYO ND FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEARS AT THE TI ME OF ISSUE OF NOTICE, NECESSARY SANCTION HAS TO BE OBTAINED FROM PR. CHIEF COMMISSIONER OF INCOME TAX OR PR. COMMISSIONER OF I NCOME TAX OR COMMISSIONER OF INCOME TAX, IN VIEW OF THE AMENDED PROVISION OF SECTION 151 W.E.F 01.06.2015. THE NECESSARY SANCTIO N IN THIS REGARD IS BEING OBTAINED SEPARATELY FROM PR. COMMISSIONER OF INCOME TAX- 08, DELHI BEFORE THE ISSUE OF NOTICE U/S. 148 FOR R EOPENING OF ASSESSMENT UNDER SECTION 147 IN THE CASE OF ASSESSE E COMPANY. YOURS FAITHFULLY (SUMAN KUMAR JHA) INCOME TAX OFFICER, WARD-22(1), NEW DELHI I.T.A. NO.4034/DEL/2019 13 3. THE ASSESSING OFFICER HAS EXTRACTED THE COPY OF STATEMENT RECORDED ON OATH OF SHRI PRADEEP KUMAR JI NDAL AND OTHER DIRECTORS FROM WHERE HE INFERRED THAT THE COMPANIES RUN BY SHRI PRADEEP KUMAR JINDAL HAD DUMM Y DIRECTORS WHO ACTED ON BEHEST AND DIRECTION OF SHRI PRADEEP KUMAR JINDAL AND THEY NOT WERE OF ANY ACTUAL AFFAIR S OF THE COMPANIES. THE RELEVANT EXTRACT AND THE STATEMENT A S INCORPORATED IN THE ASSESSMENT ORDER IS INCORPORATE D HEREIN BELOW AS IT IS QUITE VITAL AND GOES TO THE VERY ROO T OF THE ISSUE INVOLVED:- QUESTION2. IN YOUR EARLIER STATEMENT DATED L8.11.2 015 RECORDED U/S 132(4) YOU HAVE ADMITTED THAT YOU HAVE BEEN RUN NING A LARGE NUMBER OF FRONT COMPANIES AND PROVIDING BOGUS ACCOMMODATION ENTRIES INFORM OF SHARE PREMIUM. PLEA SE PROVIDE THE DETAILS OF ALL THE BANK ACCOUNTS OF YOUR VARIOU S COMPANIES INCLUDING THE BANK ACCOUNT NUMBER AND THE BANK AND BRANCH NAME AND ADDRESS? ANSWER. I AM NOT ABLE TO PROVIDE THESE DETAILS AT P RESENT DUE TO SHORTAGE OF MANPOWER AND MYSELF BEING UNAWARE ABOUT ITS AVAILABILITY IN THE OFFICE. I WOULD BE PROVIDING TH EM SHORTLY. HOWEVER, I AM ABLE TO RECALL THAT WE ARE HAVING FUN CTIONAL BANK ACCOUNTS OF OUR FRONT COMPANIES IN ANDHRA BANK, KUN DLI BRANCH SONIPAT, HARYANA. I SUBMIT THAT MY FRONT COMPANIES ARE NOT HAVING BANK ACCOUNT IN ANY OTHER BANK AT PRESENT. QUESTION 3. IN YOUR STATEMENT DATED 18.11.2015, YOU HAD TOLD IN REPLY TO QUESTION NO. 12 THAT YOU DONT HAVE ANY EX PLANATION AT THAT JUNCTURE ABOUT SMS MESSAGES RECEIVED IN YOUR I -PHONE FROM CA SANTOSH GUPTA. IN THE SAID MESSAGES DATED 2 ND , 4 TH , 5 TH AND 6 TH OCTOBER 2015 THERE WAS REFERENCE IN RESPECT OF RS. 6 CRORE AND RS. 15 CRORE NBFC DOCUMENTS. PLEASE EXPLAIN THE CONTENTS OF THE SAME SMS MESSAGES. I.T.A. NO.4034/DEL/2019 14 ANSWER. I AM NOT ABLE TO EXPLAIN THE CONTENTS OF TH E MESSAGES AT PRESENT. I WOULD EXPLAIN THAT SHORTLY. QUESTION 4. DO YOU KNOW SMT MEERA MISHRA? ANSWER. YES, I KNOW SMT. MEERA MISHRA. SHE HAS WORK ED AS RECEPTIONIST AT 104 MUKUND HOUSE, AZADPUR FROM 1994 TO 2006. SHE HAS BEEN DIRECTOR OF VARIOUS FRONT COMPANIES RU N BY ME FOR PURPOSE OF PROVIDING ACCOMMODATION ENTRIES. QUESTION 5.1 AM SHOWING THE STATEMENT DATED 18.11.2 015 OF SMT. MEERA MISHRA R/O K-31/6, MODEL TOWN -III, DELH I RECORDED U/S 132(4) OF THE I.T.ACT 1961. PLEASE CONFIRM THAT YOU HAVE BEEN SHOWN THE SAME. ANSWER. YES, I CONFIRM THAT I HAVE BEEN SHOWN THE S TATEMENT. QUESTION6. SMT. MEERA MISHRA IN HER ABOVE STATEMENT HAS STATED THAT SHE HAD NOT WORKED AS DIRECTOR OR HELD ANY SHA RES IN REAL TERMS IN ANY COMPANY MANAGED/CONTROLLED BY YOU THAT SHE USED TO SIGN CERTAIN PAPERS/DOCUMENTS IN GOOD FAITH EVEN AFTER 2006, THAT SHE HAS NO DIN NO., THAT SHE HAD NOT ATTENDED ANY MEETINGS IN THE CAPACITY AS DIRECTOR. DO YOU WANT T O SAY ANYTHING IN THIS CONTEXT? ANSWER. I HAVE ALREADY SUBMITTED IN MY EARLIER STAT EMENT DATED 18.11.2015, THE ENTIRE MODUS OPERANDI OF MY FRONT C OMPANIES. 1 ACCEPT THAT SMT. MEERA MISHRA IS A DIRECTOR ONLY FO R NAMESAKE. I HAVE MISUSED HER NAME AND PARTICULAR TO FLOAT/RUN M Y FRONT COMPANIES. QUESTION 7. DO YOU KNOW SMT. SEEMA KHANDELWAL? ANSWER. YES, I KNOW SMT. SEEMA KHANDELWAL. SHE IS W /O SH. SUBODH KUMAR KHANDELWAL. SOMETIMES, I HAVE VISITED THEIR RESIDENCE 88, BALDEV PARK, PARWANA ROAD, DELHI. I H AVE USED THEIR RESIDENTIAL ADDRESS AS REGISTERED ADDRESS OF SOME OF MY FRONT COMPANIES. BESIDES, SHE HAS BEEN MADE NAMESAK E DIRECTOR OF VARIOUS FRONT COMPANIES RUN BY ME FOR PURPOSE OF PROVIDING ACCOMMODATION ENTRIES. QUESTION 8. I AM SHOWING THE STATEMENT DATED 18.11. 2015 OF SMT. SEEMA KHANDELWAL RECORDED U/S 132(4) OF THE I. T.ACT 1961. PLEASE CONFIRM THAT YOU HAVE BEEN SHOWN THE SAME. I.T.A. NO.4034/DEL/2019 15 ANSWER. YES, I CONFIRM THAT I HAVE BEEN SHOWN THE S TATEMENT. QUESTION 9. SMT. SEEMA KHANDELWAL IN HER ABOVE STAT EMENT HAS STATED THAT SHE IS NOT DIRECTOR OR AUTHORIZED SIGNA TORY IN ANY COMPANY, THAT SHE HAS NO KNOWLEDGE ABOUT ANY SHARE TRANSACTION HELD WITH M/S INDO AUTO TECH LTD. THAT SHE HAS NOT EVEN HEARD ABOUT ANY COMPANY WHERE SHE HAS BEEN SHO WN AS DIRECTOR. DO YOU WANT TO SAY ANYTHING IN THIS CONTE XT? ANSWER. I HAVE ALREADY SUBMITTED IN MY EARLIER STAT EMENT DATED 18.11.2015, THE ENTIRE MODUS OPERANDI OF MY FRONT C OMPANIES. I ACCEPT THAT SMT. SEEMA KHANDELWAL IS A DIRECTOR ONL Y FOR NAMESAKE. I HAVE MISUSED HER NAME AND PARTICULAR TO FLOAT/RUN MY FRONT COMPANIES. SHE IS NOT MUCH EDUCATED AND TH EREFORE I HAVE MISUSED HER PARTICULARS. QUESTION 10. DO YOU KNOW SH. SUBODH KUMAR KHANDELWA L? ANSWER. YES, I KNOW SH. SUBODH KUMAR KHANDELWAL. HE IS HUSBAND OF SMT. SEEMA KHANDELWAL WHO HAS BEEN DISCU SSED IN REPLIED TO EARLIER QUESTIONS. HE HAS WORKED AT MY R ESIDENCE AND OFFICE DURING 2004 TO 2011 AND USED TO LOOK AFTER MAINTENANCE WORK. SOMETIMES, I HAVE VISITED THEIR RESIDENCE 88 BALDEV PARK, PARWANA ROAD, DELHI. I HAVE USED THEIR RESIDENTIAL ADDRESS AS REGISTERED ADDRESS OF SOME OF MY FRONT COMPANIES. B ESIDES, HE HAS BEEN MADE NAMESAKE DIRECTOR OF VARIOUS FRONT CO MPANIES RUN BY ME FOR PURPOSE OF PROVIDING ACCOMMODATION EN TRIES. QUESTION 11. I AM SHOWING THE STATEMENT DATED 18.11 .2015 OF SH. SUBODH KUMAR KHANDELWAL RECORDED U/S 132(4) OF THE I.T. ACT 1961. PLEASE CONFIRM THAT YOU HAVE BEEN SHOWN T HE SAME. ANSWER. YES I CONFIRM THAT I HAVE BEEN SHOWN THE ST ATEMENT. QUESTION 12. SH. SUBODH KUMAR KHANDELWAL IN HIS ABO VE STATEMENT HAS STATED THAT HE IS NOT DIRECTOR OR AUT HORIZED SIGNATORY IN ANY COMPANY, THAT HE HAD SIGNED SOME B LANK CHEQUE BOOKS IN YOUR OFFICE, THAT HE IS NOT AWARE A BOUT ANY COMPANY REGISTERED AT HIS RESIDENTIAL PREMISES, THA T HE HAS NO KNOWLEDGE ABOUT ANY SHARE TRANSACTION HELD WITH M/S INDO AUTO TECH LTD. AND M/S SARVOTTAM PUMPS LTD., THAT HE IS NOT AWARE ABOUT CASH AND SUBSEQUENT BANK TRANSACTIONS IN THE BANK I.T.A. NO.4034/DEL/2019 16 ACCOUNT OF DIFFERENT COMPANIES REGISTERED AT HIS PR EMISES AND WHERE HE IS DIRECTOR, THAT HE DOES NOT KNOW ALL COM PANIES WHERE HE HAS BEEN SHOWN AS DIRECTOR. DO YOU WANT TO SAY A NYTHING IN THIS CONTEXT? ANSWER. I HAVE ALREADY SUBMITTED IN MY EARLIER STAT EMENT DATED 18.11.2015, THE ENTIRE MODUS OPERANDI OF MY FRONT C OMPANIES. I ACCEPT THAT SH. SUBODH KUMAR KHANDELWAL IS A DIRECT OR ONLY FOR NAMESAKE. I HAVE MISUSED HIS NAME AND PARTICULAR TO FLOAT/RUN MY FRONT COMPANIES. HE IS NOT MUCH EDUCATED AND THE REFORE I HAVE MISUSED HIS PARTICULARS. STATEMENT ON OATH OF SH. PRADEEP KUMAR JINDAL, S/O. LATE SH. D.C. JINDAL, AGE 57 YEARS, R/O H-1/1A, MODEL TOWN-I LL, NEW DELHI AND MANAGING DIRECTOR, FOCUS INDUSTRIAL RESOU RCES LTD., 104 MUKUND HOUSE, COMMERCIAL COMPLEX, AZADPUR, DELH I, DIRECTOR IN PAWANSUT HOLDING LTD., 415' USHA KIRAN BLUILDING, COMMERCIAL COMPLEX, AZADPUR, DELHI RECORDED UNDER S ECTION 132(4) OF THE INCOME TAX ACT, 1961 DURING SEARCH PR OCEEDINGS ON 06.01.2016 IN THE CASE OF M/S BHAGWAN KRISHNA INVES TMENTS & TRADING CO. (P) LTD., 415, USHA KIRAN BUILDING, COM MERCIAL COMPLEX, AZADPUR, DELHI.(STATEMENT BEING RECORDED A T OFFICE PREMISE OF M/S. BHAGWAN KRISHNA INVESTMENTS & TRADI NG CO. (P) LTD. AND M/S PAWANSUT HOLDING LTD.). I, SH. PRADEEP KUMAR JINDAL HAVE BEEN ADMINISTERED THE OATH BY AUTHORIZE D OFFICER SH. SANDEEP RANA, ADIT, UNIT 2(1), NEW DELHI THAT I WOU LD SPEAK TRUTH AND I WOULD NOT SPEAK ANYTHING OTHER THAN TRU TH. I HAVE BEEN MADE AWARE OF THE FACT THAT IF I TENDER ANY FA LSE OR UNTRUE FACT OR STATEMENT THEN I CAN BE PROSECUTED UNDER PR OVISIONS OF THE INCOME TAX ACT, 1961 AND INDIAN PENAL CODE. QUESTION 1. PLEASE INTRODUCE YOURSELF. ANSWER. I AM SH. PRADEEP KUMAR JINDAL S/O LATE SH. D.C. JINDAL RIO H-L/IA, MODEL TOWN-111, NEW DELHI. I HAV E PROVIDED MY I.D. DRIVING LICENSE NO.0819920119611 ISSUED BY DELHI TRANSPORT AUTHORITY, DELHI. QUESTION2. IN YOUR EARLIER STATEMENT DATED 18,11.20 15 RECORDED U/S 132(4) YOU HAVE ADMITTED THAT YOU HAVE BEEN RUN NING A LARGE NUMBER OF FRONT COMPANIES AND PROVIDING BOGUS I.T.A. NO.4034/DEL/2019 17 ACCOMMODATION ENTRIES IN FORM OF SHARE PREMIUM. PLE ASE PROVIDE THE DETAILS OF ALL THE BANK ACCOUNTS OF YOUR VARIOU S COMPANIES INCLUDING THE BANK ACCOUNT NUMBER AND THE BANK AND BRANCH NAME AND ADDRESS. ANSWER. I AM NOT ABLE TO PROVIDE THESE DETAILS. HOW EVER, I AM ABLE TO RECALL THAT WE ARE HAVING FUNCTIONAL BANK A CCOUNTS OF OUR FRONT COMPANIES IN ANDHRA BANK, KUNDLI BRANCH, SONI PAT, HARYANA. I SUBMIT THAT MY FRONT COMPANIES ARE NOT H AVING BANK ACCOUNT IN ANY OTHER BANK AT PRESENT. I WILL PROVID E THE REQUIRED DETAILS BY 11.01.2016. QUESTION 3. IN YOUR STATEMENT DATED 18.11.2015, YOU HAD TOLD IN REPLY TO QUESTION NO. 12 THAT YOU DON'T HAVE ANY EX PLANATION AT THAT JUNCTURE ABOUT SMS MESSAGES RECEIVED IN YOUR I -PHONE FROM CA SANTOSH GUPTA. IN THE SAID MESSAGES DATED 2ND, 4 TH, 5TH AND 6TH OCTOBER 2015 THERE WAS REFERENCE IN RESPECT OF RS. 6 CRORE AND RS. 15 CRORE NBFC DOCUMENTS. PLEASE EXPLA IN THE CONTENTS OF THE SAME SMS MESSAGES. ANSWER. I AM NOT ABLE TO EXPLAIN THE CONTENTS OF TH E MESSAGES. AT PRESENT, I WILL PROVIDE THE REQUIRED DETAILS BY 11.01.2016. IF I FAILED TO REPLY ON THE SAID DATE THE SAME MAY BE TR EATED AS UNEXPLAINED. QUESTION 4. HOW DID YOU CONTACT THE ENTITIES AND PE RSONS AND OFFERED THEM TO PROVIDE ACCOMMODATION ENTRIES? ANSWER. IT IS THE BENEFICIARIES WHO CONTACT ME ON M Y PHONE {9810049333, 9310049333) AFTER THEY COME TO KNOW TH AT I PROVIDE ACCOMMODATION ENTRY IN FORM OF BOGUS SHARE PREMIUM /UNSECURED LOAN IN LIEU OF CASH. NORMALLY I DO NOTC ONTACT THE PERSONS SEEKING ACCOMMODATION ENTRIES. I AM QUITE W ELL KNOWN IN THIS FIELD FOR LAST 15 YEARS. THEREFORE, PEOPLE KNOW ME VERY WELL AND CONTACT ME FOR ENTRIES OF SHARE PREMIUM, L ONG TERM CAPITAL GAIN, SHARE FORFEITURE, UNSECURED LOANS ETC . I CHARGE 0.25% TO 0.30% COMMISSION IN LIEU OF PROVIDING THE ACCOMMODATION ENTRY. QUESTION 5. HOW DID ENTITIES AND PERSONS CONTACT YO U TO PROCURE ACCOMMODATION ENTRIES FROM YOU? I.T.A. NO.4034/DEL/2019 18 ANSWER. THE ENTITIES AND THE PERSONS CONTACT ME ON MY PHONE {9810049333, 9310049333} TO PROCURE ACCOMMODATION E NTRY FROM ME THROUGH MY FRONT COMPANIES. HOWEVER A FEW S UCH ENTITIES AND PERSONS ALSO CONTACT ME IN MY OFFICE 4 15, USHA KIRAN BUILDING, AZADPUR, DELHI TO PROCURE SUCH ACCO MMODATION ENTRIES. QUESTION 6. WHERE DO YOU HOLD MEETINGS WITH CLIENTS FOR PROVIDING ACCOMMODATION ENTRIES? ANSWER. IN A VERY FEW CASES, I HOLD MEETINGS WITH C LIENTS AT MY OFFICE. HOWEVER IN MOST OF THE CASES, THE DEAL OF P ROVIDING ACCOMMODATION ENTRY IN LIEU OF CASH IS FINALIZED ON MY PHONE ITSELF (I.E., 9810049333, 9310049333). QUESTION 7. WHAT TYPE OF ACCOMMODATION ENTRIES DO Y OU PROVIDE TO THE CLIENTS? ANSWER. I PROVIDE ALL TYPES OF ACCO MMODATION ENTRIES NAMELY BOGUS SHARE APPLICATION MONEY, SHARE PREMIUM, SHARE FORFEITURE, UNSECURED LOANS, BOGUS PURCHASES, BOGUS SALES AND BOGUS ADVANCES AGAINST PROPERTIES. QUESTION 8. HOW DO ACCOMMODATION ENTRY SEEKING ENTI TIES AND PERSONS PROVIDE FUNDS TO YOU IN LIEU OF ENTRIES? ANSWER. SUCH ACCOMMODATION ENTRY SEEKING PERSONS AN D ENTITIES PROVIDE FUNDS IN LIEU OF ENTRIES THROUGH T HEIR OWN PERSONS / EMPLOYEES. SUCH PERSONS AND ENTITIES TELL US TELEPHONICALLY ABOUT THE PERSON OR VEHICLE WHO IS C OMING TO PROVIDE US THE CASH. QUESTION 9. DO YOU HAVE ANY NON-BANKING FINANCE COM PANY REGISTERED IN RBI? IF SO, THE DETAILS THEREOF. ANSWER. YES, I HAVE NO BANKING FINANCE COMPANIES RE GISTERED WITH RBI. THE 2 COMPANIES NAMELY M/S. PAWANSUT HOLD INGS LIMITED AND M/S FOCUS INDUSTRIAL RESOURCES LIMITED ARE REGISTERED WITH RBI AS NBFC. HOWEVER THE APPLICATIO N FOR REGISTRATION AS NBFC IS PENDING WITH RBI IN CASE OF THIRD COMPANY NAMELY M/S DELTA LEASING & FINANCE CO. LIMI TED. QUESTION 10. WHAT IS THE MODUS OPERANDI OF ARRANGEM ENT OF FUNDS FROM THE CLIENTS SEEKING THE ACCOMMODATION EN TRIES AND PROVIDING SUCH SENTRIES TO THEM? ANSWER. I HAVE UND ERSTOOD THE I.T.A. NO.4034/DEL/2019 19 ABOVE QUESTION AND I RECONFIRM THAT I HAVE A LARGE NUMBER OF FRONT COMPANIES AND THE DIRECTORS IN ALL THE ABOVE COMPANIES ARE JUST FOR NAMESAKE. MANY DIRECTORS OF MY FRONT COMPA NIES ARE NOT EVEN AWARE THAT THEY ARE DIRECTORS IN MY FRONT COMP ANIES. THE COMPANIES ARE NOT DOING BUSINESS OF FINANCE AND INV ESTMENT AND IN REALITY THESE COMPANY ARE INTO BUSINESS OF PROVI DING ENTRIES ONLY (WITHOUT ANY REAL TRANSACTION OF FINANCE AND I NVESTMENT). L WOULD LIKE STATE THAT MOST OF THE ABOVE CASH AND SU BSEQUENT TRANSACTIONS HAVE BEEN USED FOR THE PURPOSE OF PROV IDING ACCOMMODATION ENTRIES NAMELY BOGUS SHARE APPLICATIO N MONEY, SHARE PREMIUM, SHARE FORFEITURE, UNSECURED LOANS, B OGUS PURCHASES, BOGUS SALES AND BOGUS ADVANCES AGAINST P ROPERTIES TO A LARGE NUMBER OF CLIENTS FROM TIME TO TIME. I WOULD LIKE TO NARRATE ONCE AGAIN THE MODUS OPERAN DI OF PROVIDING ENTRIES AGAINST RECEIPT OF CASH AS UNDER: STAGE-I- THE PERSONS OF SUCH ENTRIES SEEKING PERSON S OR ENTITIES HAND OVER/GIVING CASH TO ME OR MY REPRESENTATIVE AT PRE-DECIDED LOCATIONS MAINLY OFFICES. STAGE-II THE ABOVE COLLECTED CASH USED TO BE DEPOSI TED IN ONE OF THE BANK A/C IN VAISH COOPERATIVE COMMERCIAL BANK, NAI SARAK, DELHI AS TABLE IN THE QUESTION BY ME OR LAXMAN SING H SATYAPAL OR UTTAM KUMAR SRIVASTAVA (WHO ARE MY EMPLOYEES) OR SOME OTHER EMPLOYEE. STAGE-III- ON THE SAME DAY, FOR THE PURPOSE OF LAYE RING OF ENTRIES, WE USE TO TRANSFER THE DEPOSITS FROM ONE PARTICULAR A/C (MAINTAINED WITH VAISH BANK, NAI SARAK, DELHI) TO A NOTHER BANK A/C (ALSO MAINTAINED SAME BANK) THROUGH RTGS. THIS FACT CAN BE VERIFIED/IS EVIDENT FROM RELEVANT BANK A/C STATEMEN TS. IN ALL THE BANK A/C HELD WITH VAISH BANK CREDIT ENTRIES ARE EI THER THROUGH CASH DEPOSITS OR THROUGH TRANSFER ENTRIES AMONG BAN K A/C VIA RTGS. STAGE-IV FROM OUR BANK A/C WHERE THE DEPOSITS WERE ON ACCOUNT I.T.A. NO.4034/DEL/2019 20 OF RTGS TRANSFER (FROM OUR SEPARATE BANK A/C WITH V AISH BANK OTHER THAN INVOLVING CASH DEPOSITS) ON OUR INSTRUCT ION, FUNDS USED TO BE TRANSFERRED TO VARIOUS BANK A/C OF VARIO US ENTRY SEEKING ENTITIES AND PERSONS VIA RTGS TRANSFER. WE HAVE RECEIVED COMMISSIONS AT THE RATE OF 0.25% F OR PROVIDING ENTRIES IN THIS MANNER I.E. PROVIDING BANK TRANSFER ENTRIES IN LIEU OF CASH RECEIPT. QUESTION 11. WHO ARE THE INTERMEDIARIES OF SUCH ACCOMMODATION ENTRIES SEEKING ENTITIES? WHETHER THE Y ARE ADVOCATES, CHARTERED ACCOUNTANTS, ACCOUNTANTS, PART NERS / PROPRIETORS /DIRECTORS OR IN-HOUSE PROFESSIONALS OF SUCH ENTITIES? ANSWER. IT DEPENDS ON CASE TO CASE AS TO WHO ARE TH E INTERMEDIARIES. THUS SUCH INTERMEDIARIES ARE NORMAL LY ADVOCATES OR CHARTERED ACCOUNTANTS OR ACCOUNTANTS. QUESTION 12. HOW DO YOU CHARGE YOUR COMMISSION ON S UCH ACCOMMODATION ENTRIES? WHETHER IT IS IN CASH OR CHE QUE OR OTHERWISE? ANSWER. THE COMMISSION SO RECEIVED ON SUCH ACCOMMOD ATION ENTRIES IS ALWAYS IN FORM OF CASH ONLY. QUESTION 13. HOW DO YOU ACCOUNT FOR COMMISSION RECE IVED FOR PROVIDING ACCOMMODATION ENTRIES? HOW DO YOU UTILIZE THE COMMISSION? ANSWER. THE COMMISSION RECEIVED BY US IN LIEU OF PR OVIDING ACCOMMODATION ENTRY IS NOT ACCOUNTED FOR AND UTILIZ ED AS SUCH IN FORM OF CASH ONLY IN DAY TO DAY EXPENSES RELATED TO HOUSEHOLD, VEHICLE AND MAINTENANCE AND FAMILY TRIPS AND TELEPH ONE EXPENSES ETC. QUESTION 14. IN WHICH BANK ACCOUNT, DO YOU DEPOSIT THE CASH RECEIVED FROM CLIENTS SEEKING ACCOMMODATION ENTRIES FOR PROVIDING SUCH ENTRIES? IS THERE ANY OTHER METHOD O F GETTING FUNDS THROUGH CASH OR OTHERWISE IN LIEU OF PROVIDIN G ACCOMMODATION ENTRIES? I.T.A. NO.4034/DEL/2019 21 ANSWER. THE CASH RECEIVED FROM CLIENTS SEEKING ACCO MMODATION ENTRY IS DEPOSITED IN VARIOUS ACCOUNTS HELD WITH VA ISH CO- OPERATIVE COMMERCIAL BANK LTD., NAI SARAK, DELHI AN D THEN ROUTED AS MENTIONED IN THE MODUS-OPERANDI STATED BY ME IN REPLY TO QUESTION NO. 10. THE FUND RECEIVED FOR PRO VIDING OF ACCOMMODATION ENTRY IS IN THE FORM OF CASH ONLY. QUESTION 15. DO YOU ASSOCIATE WITH ANY OTHER ENTRY PROVIDER FOR PROVIDING ACCOMMODATION ENTRIES? WHO ARE THEY? ANSWER. NO, I DO NOT ASSOCIATE WITH ANY OTHER ENTRY PROVIDER FOR PROVIDING ACCOMMODATION ENTRY. QUESTION 16. ARE YOU AWARE THAT YOUR ACTIVITY OF PROVIDING OF ACCOMMODATION EN TRIES BY WAY OF SHARE APPLICATION MONEY, SHARE, PREMIUM AND SHAR E FORFEITURE IS ILLEGAL AND IN VIOLATION OF COMPANIES ACT, 1.956 AND COMPANIES ACT 2013? ANSWER. YES, I AM AWARE OF THAT MY ACTIVITY OF PROVIDING OF ACCOMMODATION ENTRIES BY W AY OF SHARE APPLICATION MONEY OR SHARE PREMIUM OR SHARE FORFEIT URE IS ILLEGAL AND IN VIOLATION OF COMPANIES ACT, 1956 AND COMPANI ES ACT 2013. QUESTION 17. ARE YOU AWARE THAT YOUR ACTIVITY OF PR OVIDING ACCOMMODATION ENTRIES IS ILLEGAL AND IN VIOLATION O F SECTION 420, 467, 468, 471 AND 120-8 OF IRC? ANSWER. YES, I AM AWARE THAT MY ACTIVITY OF PROVIDI NG ACCOMMODATION ENTRIES IS ILLEGAL AND IN VIOLATION O F SECTION 420, 467,468, 471 AND 120-8 OF IPC. QUESTION 18. ARE YOU AWARE THAT YOUR ACTIVITY OF PR OVIDING ACCOMMODATION ENTRIES IS ILLEGAL AND ABETS THE FILI NG OF FALSE RETURNS OF INCOME BY ENTITIES SEEKING ACCOMMODATION ENTRIES BY WAY OF FALSE STATEMENTS AND DECLARATIONS RELATING T O INCOME FILED IN THEIR RETURNS OF INCOME AND SUCH OFFENCE IS LIAB LE FOR PROSECUTION UNDER SECTION 278 OF INCOME TAX ACT 196 1? ANSWER. YES, I AM AWARE THAT MY ACTIVITY OF PROVIDI NG ACCOMMODATION ENTRIES IS ILLEGAL AND ABETS THE FILI NG OF FALSE RETURNS OF INCOME BY ENTITIES SEEKING ACCOMMODATION ENTRIES BY WAY OF FALSE STATEMENTS AND DECLARATIONS RELATING T O INCOME FILED IN THEIR RETURNS OF INCOME AND SUCH OFFENCE IS LIAB LE FOR PROSECUTION UNDER SECTION 278 OF INCOME TAX ACT 196 1. I.T.A. NO.4034/DEL/2019 22 QUESTION 19. HAVE YOU EVER BEEN INVESTIGATED BY POL ICE I CBI I ENFORCEMENT DIRECTORATE (ED) /SEBI, IN CONNECTION W ITH THE ILLEGAL ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES ? IF SO, PROVIDE THE DETAILS THEREOF. ANSWER. NO, I HAVE NEVER BEEN INVESTIGATED BY POLIC E I CBI I ENFORCEMENT DIRECTORATE(ED) IN CONNECTION WITH THE ILLEGAL ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES, THERE WERE SOME QUERIES FROM SEBI IN RESPECT OF FOCUS INDUSTRIAL RESOURCES LTD. THE QUERIES HAVE BEEN REPLIED BY US. QUESTION 20. HAVE YOU FILED STATUTORY REPORTS IN RO C, SEBI AND RBI IN RESPECT OF ACCOMMODATION ENTRIES OF SHARE PR EMIUM, SHARE APPLICATION MONEY, SHARE FORFEITURE? ANSWER. YES, I HAVE FILED THE STATUTORY REPORTS IN ROC, SEBI AND RBI WITH RESPECT TO ENTRIES OF ACCOMMODATION ENTRIE S OF SHARE PREMIUM, SHARE APPLICATION MONEY, SHARE FORFEITURE. QUESTION 24. YOU ARE BEING SHOWN YOUR STATEMENT REC ORDED ON 18.11.2015 AND 01.12.2015 UNDER SECTION 132(4) OF THE INCOME TAX ACT, 1961 DURING THE SEARCH PROCEEDINGS AT YOUR RESIDENCE AND THIS PREMISE RESPECTIVELY. PLEASE CON FIRM THAT IT HAS BEEN SHOWN TO YOU. ANSWER. I CONFIRM THAT I HAVE BEEN SHOWN THE ABOVE SAID STATEMENTS DATED 18.11.2015 AND 01.12.2015. QUESTION 25. DO YOU WANT TO SAY ANYTHING IN RESPECT OF THE ABOVE STATEMENTS OF YOURS DATED 18.11.2015 AND 01.1 2.2015? ANSWER YES I WANT TO SAY THAT MY STATEMENTS DATED 1 8.11.2015 AND 01.L2.2015 RECORDED U/S 132(4) OF THE I.T.ACT D URING THE SEARCH PROCEEDINGS AT MY RESIDENCE AND OFFICE PREMI SE RESPECTIVELY WAS TENDERED BY ME VOLUNTARILY AND IS TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF. I STAND BY AND AFF IRM TO MY EARLY STATEMENTS AND ONCE AGAIN ADMIT VOLUNTARILY M Y MODUS OPERANDI OF RUNNING FRONT COMPANIES AND PROVIDING B OGUS ACCOMMODATION ENTRIES OF SHARE PREMIUM TO THE BENEF ICIARIES INCLUDING INDO AUTO TECH LTD., SARVO TECHNOLOGIES L TD. (EARLIER KNOWN AS SARVOTTAM PUMPS LTD) AND ADMACH AUTO INDUS TRIES PVT. LTD. BESIDES, I WOULD ALSO WANT TO ADMIT HERE THAT IN SOME I.T.A. NO.4034/DEL/2019 23 CASES, WE RECEIVE BACK SOME ENTRY OF BOGUS UNSECURE D LOAN ADVANCED THROUGH OUR FRONT COMPANIES TO THE BENEFIC IARIES. AS THE ENTRY HAS BEEN RECEIVED BACK AND THEREFORE WE H AVE TO PAY SUCH BENEFICIARIES ALMOST EQUIVALENT AMOUNT IN CASH AFTER DEDUCTING OUR COMMISSION .IN THIS CASE WE WOULD REC EIVE CASH FROM SHRI SAJAN KUMAR JAIN GROUP OF COMPANIES NAMEL Y M/S INDO AUTOTECH LTD., M/S SARVO TECHNOLOGIES LTD' AND M/S ADMACH AUTO INDUSTRIES INDIA PRIVATE LTD MANAGED AN D CONTROLLED BY SH. SAJAN KUMAR JAIN, SH. ANAND KUMAR JAIN AND SH. MANOJ TANTIA AND THIS CASH WILL BE UTILIZED IN MAKING CASH PAYMENT TO THE EARLIER SET OF BENEFICIARIES AND SHR I SAJAN KUMAR JAIN GROUP OF COMPANIES WOULD BE PROVIDED ACCOMMODA TION ENTRY OF EXORBITANT SHARE PREMIUM AS DISCUSSED ABOV E. 4. FROM THE STATEMENTS AND THE MATERIAL COMING ON R ECORD, THE LD. ASSESSING OFFICER CAME TO THE CONCLUSION TH AT SHRI PRADEEP KUMAR JINDAL WAS ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES OF BOGUS SHARE CAPI TAL/ SHARE PREMIUM /LOAN OR ADVANCES AND MODUS OPERANDI OF SHRI PRADEEP KUMAR JINDAL WAS TO PROVIDE CHEQUE/ RTGS OF THE DUMMY COMPANIES CONTROLLED BY HIM IN LIEU OF CASH A ND COMMISSION @ 25%. HE ALSO EXTRACTED THE INFORMATION DECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME. A. SHARE CAPITAL (ISSUED, SUBSCRIBED AND PAID UP RS .12,20,000/- B. SECURITIES PREMIUM RS.1,00,80,000/- C. UNSECURED LOANS (OTHER THAN BANK) RS.1,41,36,800/- D. PURCHASE RS.1,83,29,764/- E. SALE RS.1,49,46,517/- 5. HE OBSERVED THAT FINANCIAL DATA OF THE ASSESSEE WAS CORROBORATED WITH THE INFORMATION RECEIVED FROM THE DIT (INV.), I.T.A. NO.4034/DEL/2019 24 UNIT-2(1), NEW DELHI THAT ASSESSEE HAS RECEIVED SHA RE CAPITAL / SECURITY PREMIUM LOAN FROM THE ENTITIES CONTROLLE D BY SHRI PRADEEP KUMAR JINDAL. THE DOCUMENTS SEIZED FROM THE PREMISES OF SHRI PRADEEP KUMAR JINDAL HAVE REVEALED THAT BOGUS SHARE CAPITAL/SECURITIES PREMIUM AMOUNTING TO RS.74 LACS WAS RECEIVED BY THE ASSESSEE COMPANY FROM THE FOLLOWING ENTRY PROVIDER COMPANIES. I.E. M/S. LUSTRE FINLEASE & INVESTMENT R/T LTD., M/S. HAJIMA RESORTS LTD., PAWAN SUT HOLDINGS PVT. LTD., M/S. GANGA DEBT RECOVERY AGENCY PVT. LTD. M/S. JACARANDA CAPITAL (ARCHIT FINESCRIP LTD.) M/S. SAWERA HOUSING & CONSTRUCTION PVT. LTD. WHICH WERE CONTROLLED BY SHRI PRADEEP KUMAR JINDAL. 6. ASSESSING OFFICER FURTHER NOTED THAT DURING THE COURSE OF SEARCH PROCEEDINGS ON 18.11.2015 AT THE PREMISES OF SHRI PRADEEP KUMAR JINDAL, HE HAS CATEGORICALLY ADMITTED THAT HE HAS PROVIDED ACCOMMODATION ENTRIES OF VARIOUS NATUR ES IN LIEU OF CASH THROUGH COMPANIES AND DURING THE COURS E OF POST SEARCH INVESTIGATION AND EVIDENCES REVEALED THAT HE WAS CHARGING COMMISSION IN CASH ON ACCOMMODATION ENTRIE S AT A HIGHER RATES COMPARED TO RATES ADMITTED BY HIM AND ALSO EXPLAINED THE WORKING OF COMMISSION IN HIS STATEMEN T THAT HE HAD CHARGED COMMISSION @ 2.5% ON ACCOMMODATION ENTR IES. THE ASSESSEE AT A MUCH LATER STAGE OF ASSESSMENT PR OCEEDINGS FILED A LETTER DATED 13.11.2017 WHICH WAS RECEIVED IN THE OFFICE OF THE ASSESSING OFFICER ON 20.11.2017 RAISING OBJE CTION AGAINST THE REASON RECORDED FOR ISSUANCE OF NOTIC E U/S.148. I.T.A. NO.4034/DEL/2019 25 LD. ASSESSING OFFICER DISPOSED OF THE ASSESSEES OB JECTION VIDE DETAILED ORDER DATED 23.11.2017 AND ALSO NOTED THAT ASSESSEE HAS NOT SUBMITTED ANY GENUINE PROOF IN SUPPORT OF H IS CLAIM. AFTER DETAILED REASONING AND RELYING UPON VARIOUS J UDGMENTS, ASSESSING OFFICER HAS REJECTED THE ASSESSEES OBJEC TION. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSES SING OFFICER ASKED THE ASSESSEE TO FURNISH DETAILS, AND AFTER ANALYZING THE DETAILS AND THE INFORMATION SUBMITTED BY THE ASSESSEE, HE NOTED THAT NONE OF THE INVESTOR COMPAN IES HAD ANY SOUND FINANCIAL STRENGTH AND EVEN RETURN OF INC OME WAS VERY MEAGER AND LOOKING TO THEIR DISMAL FINANCIAL B ACKGROUND, HE CONCLUDED THAT THEY NOT COULD HAVE INVESTED IN S HARES OF ASSESSEE COMPANY WHICH HAS SO LESS REVENUE AT A HUG E PREMIUM WITHOUT ANY SCOPE OF DIVIDEND INCOME. FURTH ER, THESE COMPANIES HAD CONSISTENTLY VERY LOW PROFIT AN D IN SOME CASES, BANK STATEMENTS OF BANK ACCOUNT WERE NOT SUB MITTED BY THE ASSESSEE. IN SOME OF THE CASE WHERE BANK STA TEMENT WAS SUBMITTED HE FOUND THAT WHEN THE AMOUNT OF INVE STMENT IN SHARES WERE DEBITED FROM THE BANK THERE WAS CORRESPONDING LARGE AMOUNT WHICH WAS CREDITED ON TH E SAME DATE OR DAY BEFORE EITHER BY WAY OF CHEQUE/ RTGS ET C. THE SOURCE OF WHICH ITSELF WAS DICEY. THE PATTERN OF CR EDIT AND DEBIT ENTRIES WAS ANALYZED BY HIM AND FOUND THAT TH E INVESTOR COMPANIES HAD NO SUFFICIENT SOURCE WHICH CAN PROVE THE CREDITWORTHINESS OF THE TRANSACTION. 7. THEREAFTER, HE CARRIED OUT INDEPENDENT INQUIRY AND ISSUED NOTICES U/S. 133(6) TO ALL THE CONCERNED PARTIES AN D ALSO I.T.A. NO.4034/DEL/2019 26 ISSUED SUMMONS U/S.131 TO THE DIRECTORS OF THE ASSE SSEE COMPANY AND THE ENTRY PROVIDER COMPANIES. HOWEVER, NONE OF THE NOTICES OR SUMMONS WAS RESPONDED BY THE DIRECTO RS OF THE ASSESSEE COMPANY OR ANYONE AND IN CASE OF THREE COM PANIES, THE NOTICES EVEN RETURNED BACK. THE ASSESSEES CASE BEFORE THE ASSESSING OFFICER WAS THAT HE HAS ALREADY FURNISHED ALL THE INFORMATION REGARDING IDENTITY, CREDITWORTHINESS AN D GENUINENESS OF ALL THE INVESTORS AND REQUESTED TO C ONFRONT AND CROSS-EXAMINATION OF ALL THE PERSONS WHO HAD AD MITTED TO HAVE INVOLVED IN ACCOMMODATION ENTRY. THE ASSESSING OFFICER AGAIN GAVE OPPORTUNITY TO THE ASSESSEE TO PROVE ITS CLAIM AND HE SENT NOTICES U/S. 133(6) SECOND TIME TO ALL THE CONCERNED COMPANIES TO CONFIRM THE TRANSACTIONS WHICH WERE MO STLY RETURNED UNDELIVERED OR WERE NOT RESPONDED. EVEN VA RIOUS SUMMONSES ISSUED U/S.131 TO ALL THE PARTIES TO RECO RD THE STATEMENT WERE ALSO NOT RESPONDED TILL FINALIZATION OF ASSESSMENT ORDER. HE HAS ALSO MENTIONED THE DATES O F NOTICES ISSUED AND EVEN THE DIRECTOR OF THE ASSESSEE COMPAN Y WHO WAS SUMMONED HAD ALSO NOT RESPONDED TOO. THUS, ACCO RDING TO ASSESSING OFFICER THE ONUS CAST UPON THE ASSESSE E WAS NOT DISCHARGED AT ALL. AFTER CONFRONTING ALL THE DETAIL S AS INCORPORATED IN THE ASSESSMENT ORDER AND THE EXTRAC T OF VARIOUS NOTICES AND QUESTIONNAIRE, HE CAME TO THE C ONCLUSION THAT ASSESSEE HAS TAKEN ACCOMMODATION ENTRY IN THE FORM OF SHARE CAPITAL/SHARE PREMIUM OF RS.74 LAC. THE RELEV ANT OBSERVATION OF ASSESSING OFFICER IN THIS REGARD REA DS AS UNDER: I.T.A. NO.4034/DEL/2019 27 A CAREFUL EXAMINATION/ ANALYSIS OF REPORT RECEIVED FROM INVESTIGATION WING, NEW DELHI, STATEMENTS OF VARIOU S PERSON RECORDED ON OATH DURING INVESTIGATION, NON COMPLIAN CE OF NOTICE 133(6) AND SUMMONS U/S 131 BY THE INVESTOR AS SHARE CAPITAL AND SHARE PREMIUM, DATA OF TRANSACTIONS AND VERIFIC ATION OF ITR LEAD TO AN CONCLUSION THAT ASSESSEE COMPANY HAS TAK EN ACCOMMODATION ENTRY IN FORM OF SHARE CAPITAL /SHARE PREMIUM RS.74,00,000/- WHICH IS COVERED UNDER THE VIOLATION OF CRITERIA OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION AS PRESCRIBED U/S. 68 OF THE INCOME TAX ACT, 1961. 7. AFTER DETAILED DISCUSSION, ASSESSING OFFICER HAS MADE THE ADDITION OF RS.74 LACS U/S.68 AND FURTHER MADE ADDI TION OF RS. 1,85,000/- ON ACCOUNT OF COMMISSION PAID @ 2.5% IN CASH. 8. THE LD. CIT (A) HAS CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER AFTER REFERRING TO THE VARIOUS OB SERVATIONS OF THE ASSESSING OFFICER AND EXPLANATION AND SUBMISSIO NS MADE BY THE ASSESSEE AND FINALLY REACHED TO THE FOLLOWIN G CONCLUSION:- 5.10. IN VIEW OF THE FACTS OF THE CASE AND THE JUD ICIAL PRONOUNCEMENTS REFERRED ABOVE, IT IS APPARENT THAT THE APPELLANT HAS TAKEN ACCOMMODATION ENTRY OF RS. 74,00,000/- FR OM M/S. LUSTRE FINLEASE AND INVESTMENT AND OTHERS. NEITHER GENUINENESS OF TRANSACTION NOR THE CREDITWORTHINESS OF THE SUBS CRIBING COMPANY, THE ONUS OF WHICH RESTED ON THE APPELLANT HAS BEEN DISCHARGED. THE EXPLANATION OFFERED REGARDING THE A MOUNTS CREDITED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT HAS CORRECTLY I.T.A. NO.4034/DEL/2019 28 BEEN FOUND TO BE UNSATISFACTORY BY THE AO. ACCORDIN GLY, THE ADDITION MADE BY THE AO WITH REGARD TO UNEXPLAINED CREDIT OF RS. 74,00,000/- IS UPHELD. THE AO HAS ALSO BROUGHT TO TAX COMMISSION PAYMENT OF RS. 1,85,000/- TO ARRANGE FOR THE IMPUGNED ACCOMMODATION ENTRY WHICH IS ALSO PART OF ELABORATE MODUS OPERANDI FOR OBTAINING ACCOMMODATION ENTRIES. IN VIEW THEREOF, ADDITION OF RS. 1,85,000/- IS IN ORDER AND IS CONFIRMED. THESE GROUNDS OF APPEAL ARE RULED AGAINST THE APPEL LANT. 9. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE, MR. KAPIL GOEL CHALLENGING THE VALIDITY OF THE REASONS RECOR DED SUBMITTED THAT THE ASSESSING OFFICER BEFORE RECORDI NG THE REASONS DID NOT HAD ANY MATERIAL WHICH IS EVIDENT F ROM THE FACT THAT HE HAS RECEIVED THE INFORMATION AND MATER IAL AT A LATER STAGE FROM THE INVESTIGATION WING THROUGH LET TER DATED 17.10.2017. THIS CLEARLY GOES TO SHOWS THAT THE REA SONS RECORDED BY THE ASSESSING OFFICER ARE MAINLY BASED ON BORROWED SATISFACTION AND NONE OF THE MATERIAL WAS EVER SUPPLIED TO THE ASSESSEE DESPITE SPECIFIC REQUEST. THE ASSESSEE HAD ALSO FILED OBJECTION AND ALSO ASKED FO R THE INFORMATION AND STATEMENTS WHICH WAS NOT SUPPLIED B Y THE ASSESSING OFFICER. THUS, NO LIVE LINK NEXUS WAS EST ABLISHED AND THERE WAS NO SINGLE PIECE OF DOCUMENT BEFORE TH E ASSESSING OFFICER AT THE TIME OF RECORDING THE REAS ON. THE SO CALLED TALLY DATA RECEIVED FROM THE INVESTIGATION W ING WERE RECEIVED AT A LATER STAGE THAT TO BE AFTER THE RECO RDING OF THE REASONS. THUS, THERE WAS A CLEAR CUT VIOLATION OF P RINCIPLE OF NATURAL JUSTICE. IN SUPPORT, HE RELIED UPON THE JUDGM ENT OF I.T.A. NO.4034/DEL/2019 29 HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. PRADEEP KUMAR GUPTA AS REPORTED IN 303 ITR 95 . 10. ON MERITS, HE SUBMITTED THAT ASSESSEE HAS DIS CHARGED ITS ONUS BY PRODUCING ALL THE DOCUMENTS BY ESTABLIS HING THE IDENTITY OF THE COMPANIES THROUGH VARIOUS DOCUMENTS ; SECONDLY, THEIR CREDITWORTHINESS WERE SHOWN FROM TH E INCOME TAX RECORDS AND GENUINENESS OF THE TRANSACTION WAS PROVED FROM THE FACT THAT THE ENTIRE SHARE CAPITAL/SHARE P REMIUM HAS BEEN RECEIVED THROUGH BANKING CHANNELS. FURTHER, WI THOUT CROSS-EXAMINATION OF THE SHRI PRADEEP KUMAR JINDAL AND PROVIDING THE ENTIRE MATERIAL, THE ASSESSEES EVIDE NCES CANNOT BE DISCARDED. THE ASSESSEE IS ONLY REQUIRED TO PROV E THE PRIMA FACIE NATURE AND SOURCE OF THE CREDIT WHICH HERE IN THIS CASE ASSESSEE HAS DULY DISCHARGED BY PROVIDING ALL THE D OCUMENTS BEFORE THE ASSESSING OFFICER. LASTLY, AS AN ALTERNA TIVE SUBMISSION, HE SUBMITTED THAT ASSESSEE CAN PRODUCE THE PARTIES AND WILL EXPLAIN THE SOURCE THE DEPOSITS AS DURING THE ASSESSMENT PROCEEDINGS WHATEVER DOCUMENTARY EVIDENC ES WHICH WAS REQUIRED TO BE FILED TO DISCHARGE THE PRI MARY ONUS WAS DULY FILED AND IF THERE IS ANY EXPLANATION TO B E GIVEN WITH REGARD TO SOURCE OF MONEY FROM THE INVESTEE COMPANY , ASSESSEE WILL TRY TO OBTAIN, THUS, MATTER CN BE RES TORED BACK TO THE ASSESSING OFFICER. 11. ON THE OTHER HAND, LD. CIT-DR SUBMITTED THAT IT IS AN UNDISPUTED FACT THAT DURING THE COURSE OF SEARCH AN D SEIZURE ACTION IN THE CASE OF SHRI PRADEEP KUMAR JINDAL, VA RIOUS I.T.A. NO.4034/DEL/2019 30 MATERIAL AND EVIDENCES WERE FOUND THAT HE WAS NOT O NLY AN ENTRY PROVIDER BUT ALSO HAD NUMBER OF DUMMY COMPANI ES THROUGH WHICH HE WAS GIVING ACCOMMODATION ENTRIES T O VARIOUS PERSONS AND SEIZED DOCUMENTS SHOW THAT HE H AS ALSO GIVEN SHARE CAPITAL/SHARE PREMIUM TO THE ASSESSEE C OMPANY. FROM THE BARE PERUSAL OF THE REASONS RECORDED, IT CAN BE SEEN THAT NOT ONLY THERE WAS VERY VITAL AND CREDIBL E MATERIAL AND INFORMATION RECEIVED FROM THE INVESTIGATION WIN G QUA THE ASSESSEE, BUT ALSO, ASSESSING OFFICER ON THE BASIS OF SUCH MATERIAL AND INFORMATION AND AFTER ANALYZING THE RE TURN OF INCOME OF THE ASSESSEE HAS INDEPENDENTLY APPLIED HI S MIND BEFORE RECORDING THE REASONS, WHICH IS EVIDENT FROM HIS ANALYSIS AND REASONS TO BELIEVE ARRIVED AT FROM PAR AGRAPH 3.1 ONWARDS OF THE REASONS RECORDED. ALL THROUGHOUT THE REASONS IT CAN BE SEEN THAT THE ASSESSING OFFICER HAS NOT O NLY INDEPENDENTLY APPLIED HIS MIND BUT ALSO ANALYZED EA CH AND EVERY ASPECT TO COME TO A PRIMA FACIE BELIEVE THAT AMOUNT OF RS.74 LACS RECEIVED IN THE FORM OF SHARE CAPITAL/SH ARE PREMIUM WAS IN THE NATURE OF BOGUS ACCOMMODATION EN TRY. EVEN THE MATERIAL GATHERED FROM THE ENTRY PROVIDER SHRI PRADEEP KUMAR JINDAL CLEARLY POINTED OUT THAT ASSES SEE WAS ONE SUCH BENEFICIARY WHO HAS TAKEN SHARE CAPITAL/SH ARE PREMIUM FROM THE DUMMY COMPANIES CONTROLLED BY THE SAID ENTRY PROVIDER. THIS MATERIAL INFORMATION IS SUFFIC IENT ENOUGH TO CLOTHE THE ASSESSING OFFICER WITH THE JURISDICTIO N TO REOPEN THE CASE AND ANY PRUDENT PERSON BASED ON SUCH MATER IAL FACT CAN ENTERTAIN PRIMA FACIE BELIEVE THAT INCOME CHARGEABLE TO I.T.A. NO.4034/DEL/2019 31 TAX HAD ESCAPED ASSESSMENT. 12. IN SO FAR AS THE CONTENTION RAISED BY THE LD. C OUNSEL THAT AT THE TIME OF RECORDING THE REASONS THE ASSESSING OFFICER DID NOT HAD MATERIAL, IS NOT CORRECT BECAUSE THE INFORM ATION/ MATERIAL WHICH HAS BEEN INCORPORATED IN THE REASONS RECORD AND THEREAFTER INDEPENDENT ANALYSIS OF THE ASSESSIN G OFFICER ON THE STATEMENT RECORDED ON OATH OF SHRI PRADEEP K UMAR JINDAL AND OTHER DIRECTORS OF THE DUMMY COMPANIES S HOWS THAT NOT ONLY HE HAD THE STATEMENT BUT ALSO ALL THE RELEVANT INFORMATION. LATER ON, DURING THE COURSE OF THE ASS ESSMENT PROCEEDINGS EVEN THOUGH THE ASSESSING OFFICER HAD A SKED FOR CERTAIN INFORMATION AND DATA AND THE RELEVANT PART OF THE STATEMENT, THAT DOES NOT MEAN THAT THE STATEMENT WA S NOT THERE BEFORE THE ASSESSING OFFICER AT THE TIME OF R ECORDING OF THE REASONS. THE INFORMATION AND THE MATERIAL SENT BY THE ADIT (INV.) ITSELF CONTAINED THE ENTIRE STATEMENT W HICH HAS BEEN ANALYZED BY THE ASSESSING OFFICER INDEPENDENTL Y BEFORE RECORDING THE REASONS. THUS, IT CANNOT BE HELD THAT ASSESSING OFFICER DID NOT HAVE ANY MATERIAL BEFORE RECORDING THE REASONS OR THERE IS NO INDEPENDENT APPLICATION OF MIND OR I T IS BASED ON PURELY BORROWED SATISFACTION. THUS, NOT ONLY THE PROCEEDINGS U/S. 147 IS VALID BUT ALSO THERE IS A C LINCHING EVIDENCES AND INFORMATION THAT ENTIRE SHARE APPLICA TION MONEY AND SHARE PREMIUM RECEIVED BY THE ASSESSEE WA S BOGUS. 13. ON MERITS, LD. CIT-DR SUBMITTED THAT, THOUGH ASSESSEE I.T.A. NO.4034/DEL/2019 32 MIGHT HAVE FILED SOME OF THE DOCUMENTS BUT IN THE W AKE OF SUCH CREDIBLE INFORMATION AND MATERIAL THAT THESE C OMPANIES WERE MERE DUMMY COMPANIES USED FOR GIVEN ACCOMMODAT ION ENTRIES AND THE PERSON WHO WAS RUNNING AND MANAGING THESE COMPANIES HAD HIMSELF ADMITTED THAT HE HAD PROVIDED ACCOMMODATION ENTRY AFTER RECEIVING THE CASH AND COMMISSION, THEN IT IS SUFFICIENT TO HOLD THAT THE SHARE APPLICATION MONEY AND PREMIUM RECEIVED IS NON-GENUI NE. IF ASSESSEE HAS TAKEN A SHARE CAPITAL AND SHARE PREMIU M FROM GENUINE COMPANIES THEN ASSESSEE SHOULD HAVE DISCHAR GED ITS ONUS BY PRODUCING THE DIRECTORS OF THESE COMPANIES. HERE IN THIS CASE ASSESSING OFFICER HAS MADE HIS INQUIRIES AND DESPITE VARIOUS SUMMONS ISSUED U/S.131 AND SEVERAL NOTICES SENT U/S. 133(6), NONE OF THESE COMPANIES RESPONDED AND EVEN THE DIRECTOR OF THE ASSESSEE COMPANY HAS NOT RESPONDED. ALL THESE FACTORS GO TO SHOW THAT THE DOCUMENTS SUBMITTED BY THE ASSESSEE ARE MERE PAPER TRAILS AND NOTHING ELSE. AP ART FROM THAT ASSESSING OFFICER AND LD. CIT (A) HAVE CATEGOR ICALLY MENTIONED THAT THESE COMPANIES DID NOT HAVE CREDITWORTHINESS. LOOKING TO THE FINANCIAL HEALTH A ND THE NATURE OF ENTRIES APPEARING IN SOME OF THE BANK STA TEMENTS, IT CAN BE EASILY DEDUCED THAT IT WAS NOTHING BUT ACCOM MODATION ENTRY. ONCE ALL THESE MATERIAL AND SHORT COMING WER E POINTED OUT BY THE DEPARTMENT TO THE ASSESSEE, THEN ONUS WA S UPON THE ASSESSEE TO PROVE THE CONTRARY. MERELY A TRANSA CTION HAS BEEN DONE THROUGH BANKING CHANNEL, THAT DOES NOT MA KE THE TRANSACTION GENUINE ESPECIALLY WHEN ALL THE EVIDENC ES AT THE I.T.A. NO.4034/DEL/2019 33 FACE OF IT INDICATE THAT IT WAS ALL A MAKE BELIEVE ARRANGEMENT FOR ACCOMMODATION ENTRY IN SUPPORT OF HIS CONTENTIO NS, HE STRONGLY RELIED UPON THE FOLLOWING JUDGMENTS. (I) NR PORTFOLIO PVT. LTD., (2014) 42 TAXMANN.COM 339 (DEL .) (II) NAVODAYA CASTLE PVT. LTD., 226 TAXMANN 190 (III) CIT VS. FOCUS EXPORTS PVT. LTD., 228 TAXMANN 88 (IV) CIT V/S. NOVA PROMOTERS & FINLEASE PVT. LTD., 342 ITR 169 (V) NIPUN BUILDERS & DEVELOPERS PVT. LTD., 350 ITR 407 (D EL) (VI) CIT VS. MAF ACADEMY PVT. LTD., 361 ITR 258 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL AND THE FINDINGS GIVEN IN THE IMPUGNED ORDERS INCLUDING THE VALIDITY OF REOPENING U/S.147. ON THE JURISDICTIONAL ISSUE, THE MAIN PLANK OF ASSESSEES O BJECTION IS THAT THE REASONS RECORDED BY THE ASSESSING OFFICER DO NOT CLOTHE HIM TO ACQUIRE JURISDICTION AS PER LAW; FIRS TLY, FOR THE REASON THAT THERE IS NO INDEPENDENT APPLICATION OF MIND BY THE ASSESSING OFFICER; AND SECONDLY, THERE WAS NO S UCH CREDIBLE MATERIAL BEFORE THE ASSESSING OFFICER TO E NTERTAIN PRIMA FACIE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT AT THE TIME OF RECORDING THE REASONS. IT IS A WELL SETTLED LAW THAT AT THE TIME OF RECORD ING THE REASONS, THERE HAS TO BE TANGIBLE MATERIAL HAVING L IVE LINK NEXUS WITH THE INCOME ESCAPING ASSESSMENT AND ASSES SING OFFICER SHOULD HAVE PRIMA FACIE REASON TO BELIEVE BASED ON SUCH INFORMATION OR MATERIAL COMING ON RECORD THAT THERE IS I.T.A. NO.4034/DEL/2019 34 AN ESCAPEMENT OF INCOME. AT THE TIME OF RECORDING T HE REASONS ASSESSING OFFICER DOES NOT HAVE TO ESTABLIS H THE ENTIRE FACTS OF ESCAPEMENT OF INCOME. HERE, IN THIS CASE, FROM THE BARE PERUSAL OF THE REASONS RECORDED AS INCORPORA TED ABOVE, IT CAN BE SEEN THAT, FIRSTLY , THERE WAS CERTAIN INCREDIBLE INFORMATION WHICH WAS UNEARTHED DURING THE COURSE O F SEARCH AND SEIZURE ACTION U/S.132 AT THE PREMISE OF SHRI P RADEEP KUMAR JINDAL WHO WAS AN ESTABLISHED ENTRY PROVIDER AND WAS FOUND TO BE PROVIDING BOGUS SHARE CAPITAL/SHARE PRE MIUM TO LARGE NUMBER OF BENEFICIARY IN LIEU OF CASH. HE WAS ALSO FOUND TO BE LAUNDERING MONEY THROUGH HIS DUMMY COMPANIES WITH DUMMY DIRECTORS AND ALL THESE COMPANIES WERE MANAGE D AND CONTROLLED BY HIM ONLY TO PROVIDE ACCOMMODATION ENT RIES OF MORE THAN 100 CRORES. SECONDLY , IN SO FAR AS ASSESSEE IS CONCERNED, THERE WAS A SPECIFIC INFORMATION AND MAT ERIAL WHICH WAS UNEARTHED THAT SHRI PRADEEP KUMAR JINDAL THROUGH HIS SIX DUMMY COMPANIES HAVE MADE INVESTMEN T IN THE FORM OF SHARE CAPITAL AND HUGE SHARE PREMIUM WI TH THE ASSESSEE COMPANY FOR SUMS AGGREGATING TO RS.74 LACS . BASED ON THIS INFORMATION, THE ASSESSING OFFICER ANALYSED THE RETURN OF INCOME OF THE ASSESSEE AND ALSO THE INFORMATION RECEIVED FROM ADIT INVESTIGATION WING ABOUT THE MODUS OPERANDI OF SHRI PRADEEP KUMAR JINDAL. AFTER ANALYSIS ASSESSING OFFICER CATEGORICALLY OBSERVED THAT THE INVESTIGATION WING HAD FOUND THAT THE DIRECTORS OF THE INVESTEE COMPANIES CONTRO LLED AND MANAGED BY SHRI PRADEEP KUMAR JINDAL WERE DUMMY DIRECTORS AND THIS INFORMATION WAS BASED ON THE STA TEMENT I.T.A. NO.4034/DEL/2019 35 RECORDED ON OATH OF THESE PERSONS. THE ANALYSES OF THESE STATEMENTS RECORDED ON OATH HAVE BEEN DEALT BY THE ASSESSING OFFICER IN PARAGRAPH 3.1 OF THE REASONS RECORDED AS INCORPORATED ABOVE. ALL THESE DIRECTORS HAVE CATEGO RICALLY ADMITTED THAT THEY WERE ACTING ON BEHEST OF SHRI PR ADEEP KUMAR JINDAL AND WERE ASKED TO SIGN CERTAIN DOCUMEN TS, THE NATURE OF WHICH, THEY WERE NOT AWARE OF NOR THEY WE RE AWARE OF ANY ACTIVITY OF THE COMPANIES. THEREAFTER, THE A SSESSING OFFICER HAS ALSO NOTED IN PARAGRAPH 3.3 THAT HE HAS CAREFULLY PERUSED THE DOCUMENTS SEIZED FROM THE PREMISE OF SH RI PRADEEP KUMAR JINDAL AND OTHER ANNEXURES WHICH CLEA RLY REVEALS THAT AN AMOUNT OF RS.74 LAC RECEIVED BY THE ASSESSEE WAS IN THE FORM OF BOGUS SHARE CAPITAL/SHARE PREMIU M WHICH HAS COME THROUGH VARIOUS ENTRY PROVIDER COMPANIES. HE HAS NOTED THAT IN THE COURSE OF SEARCH, SHRI PRADEEP KU MAR JINDAL HAS ADMITTED THAT HE HAS PROVIDED ACCOMMODAT ION ENTRIES OF VARIOUS NATURES IN LIEU OF CASH AND ASSE SSEE WAS ALSO FOUND TO BE ONE OF SUCH BENEFICIARIES. THE INF ORMATION AND MATERIAL ALONG WITH THE STATEMENTS AS ANALYSED BY THE ASSESSING OFFICER CLEARLY SHOWS THAT THERE IS NOT O NLY INDEPENDENT APPLICATION OF MIND BY THE ASSESSING OF FICER, BUT THERE IS STRONG BASIS TO FORM REASON TO BELIEVE. EV EN OTHERWISE ALSO BASED ON THESE MATERIAL AND INFORMATION ANY PR UDENT PERSON CAN FORM REASON TO BELIEVE THAT THE TRANSACT ION OF SHARE CAPITAL/SHARE PREMIUM RECEIVED BY THE ASSESSE E WAS PRIMA FACIE BOGUS OR WAS A SHADY TRANSACTION. AT THE TIME OF RECORDING THE REASON WHAT IS REQUIRED TO BE SEEN IS THAT, I.T.A. NO.4034/DEL/2019 36 WHETHER THERE IS ANY CREDIBLE INFORMATION AND TANGI BLE MATERIAL ON WHICH ASSESSING OFFICER CAN ENTERTAIN R EASON TO BELIEVE ANY INCOME CHARGEABLE TO TAX HAS ESCAPED AS SESSMENT OR NOT. IF THERE IS TANGIBLE MATERIAL THEN AT THE S TAGE OF FORMATION OF REASON TO BELIEF NO FURTHER ESTABLISHM ENT OF FACT IS REQUIRED AND THIS CAN BE EXAMINED OR INQUIRED UP ON AT THE STAGE OF ASSESSMENT PROCEEDINGS. HERE, IN THIS CASE , THE MATERIAL AND INFORMATION COMING ON RECORD CLEARLY S HOWS THAT IT HAD A DIRECT AND LIVE LINK NEXUS WITH THE SHARE PREMIUM/ SHARE CAPITAL RECEIVED BY THE ASSESSEE AND WAS PRIM A FACIE IN THE NATURE OF ACCOMMODATION ENTRY WHICH NEEDED TO B E SCRUTINIZED AND EXAMINED. HERE IT IS NOT A CASE WHE RE REASONS HAVE NOT BEEN RECORDED IN GOOD FAITH OR IS MERELY P RETENCE TO MAKE ROWING AND FISHING INQUIRY, ALBEIT THE REASONS RECORDED SPEAKS VOLUMES ABOUT THE SHADY TRANSACTIONS ENTERED BY THE ASSESSEE AND THE ENTRY PROVIDER. THUS, IN OUR OPINI ON, THE REASONS RECORDED ARE NOT ONLY VALID BUT ALSO CLOTHE THE ASSESSING OFFICER WITH THE JURISDICTION TO REOPEN TH E ASSESSMENT U/S.147. 14. IN SO FAR AS ALLEGATION OF THE LD. COUNSEL T HAT ASSESSING OFFICER HAS RECEIVED THE INFORMATION AND MATERIAL S UBSEQUENT TO THE RECORDING OF REASONS, THEREFORE, SUCH REASON IS BASED ON BORROWED SATISFACTION. WE ARE NOT PERSUADED BY S UCH A CONTENTION, BECAUSE, EVEN THOUGH THE INFORMATION WA S RECEIVED FROM THE INVESTIGATION WING BUT SUCH INFOR MATION CONTAINED THE ENTIRE MATERIAL INCLUDING THE STATEME NT ON OATH I.T.A. NO.4034/DEL/2019 37 OF THE ENTRY PROVIDERS AND THE DUMMY DIRECTORS OF T HESE COMPANIES WHICH HAS BEEN CAREFULLY ANALYZED BY THE ASSESSING OFFICER TO REACH PRIMA FACIE REASON TO BELIEVE. THE INFORMATION WHICH HAS BEEN SOUGHT BY THE ASSESSING OFFICER LATER ON FOR PROVIDING THE ENTIRE DATA AND THE STAT EMENT DOES NOT MEAN THAT ASSESSING OFFICER HAS NOT PERUSED THE MATERIAL OR STATEMENT AT THE TIME OF RECORDING THE REASONS, OTHERWISE HOW COULD THE ASSESSING OFFICER COULD HAVE ANALYSED THE STATEMENT IN HIS REASONS RECORDED. IN FACT THE ANAL YSIS OF STATEMENT IN THE REASONS RECORDED MATCHES PRECISELY WITH THE STATEMENT WHICH HAS BEEN INCORPORATED IN THE ASSESS MENT ORDER WHICH HAS BEEN STATED TO HAVE BEEN RECEIVED L ATER ON. THUS, SUCH A CONTENTION RAISED BY THE LD. COUNSEL C ANNOT BE ACCEPTED TO HOLD THAT THE REASONS RECORDED ARE INVA LID OR THERE IS NO INDEPENDENT APPLICATION OF MIND OR IS BASED O N BORROWED SATISFACTION. ACCORDINGLY, WE UPHOLD THE V ALIDITY OF REOPENING U/S.147. 15. ONE OF THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL IS THAT THE ACTION SHOULD HAVE BEEN TAKEN U/S.153C OF THE ACT AND NOT U/S. 148, BECAUSE THE MATERIAL INFORMATION WAS RECEIVED DURING THE COURSE OF SEARCH CARRIED OUT U/ S. 132(1) IN THE CASE OF SHRI PRADEEP KUMAR JAIN, THEREFORE, THE RIGHT COURSE OF ACTION SHOULD HAVE BEEN U/S 153C. IT IS N OT A CASE HERE THAT ANY DOCUMENT OR BOOKS OF ACCOUNT RELATING TO THE ASSESSEE OR ANY INFORMATION CONTAINED THEREIN, THAT IS, INFORMATION FLOWING FROM THE DOCUMENTS OR BOOKS OF ACCOUNT I.T.A. NO.4034/DEL/2019 38 PERTAINING TO OR RELATING TO THE ASSESSEE HAS BEEN FOUND FROM THE PREMISE OF THE SEARCHED PERSON, ALBEIT IT WAS THE SEIZED MATERIAL AND DOCUMENTS BELONGING TO THE SEARCHED PE RSON RECOVERED FROM THE PREMISE OF THE SEARCHED PERSON W HICH WAS MAINTAINED BY HIM. IT WAS HIS STATEMENT WHICH REVEA LED THAT HE WAS PROVIDING ACCOMMODATION ENTRY AND DOCUMENTS MAINTAINED BY HIM SHOWED THAT ASSESSEE WAS ONE OF T HE BENEFICIARIES WHICH FACT WAS FOUND IN INVESTIGATION REPORT. THUS, THE ONLY COURSE OF ACTION UNDER THE LAW WAS T O INITIATE THE ASSESSMENT OR RE-ASSESSMENT U/S 147/148 BASED O N MATERIAL INFORMATION UNEARTHED FROM THE CASE OF THE SEARCHED PERSON. HAD THERE BEEN ANY DOCUMENTS OR BOOKS OF AC COUNT OF THE ASSESSEE OR DOCUMENTS RELATING TO THE ASSESSEE FOUND FROM THE PREMISES OF THE SEARCHED PERSON, THEN IT C OULD HAVE BEEN SAID THAT THESE ARE SEARCH RELATING TO PROCEED INGS AND THEREFORE PROVISION OF SECTION 153A/153C WOULD HAVE BEEN APPLICABLE. THUS, SUCH A GROUND RAISED BY THE ASSES SEE IS ALSO DISMISSED. 16. ANOTHER CONTENTION RAISED BY THE LD. COUNSEL I S THAT THE MATERIAL INFORMATION WAS NOT CONFRONTED TO THE ASSE SSEE DESPITE SEVERAL REQUESTS AND NO OPPORTUNITY WAS GIV EN FOR CROSS-EXAMINATION. HERE IN THIS CASE IN THE REASONS RECORDED ITSELF ASSESSING OFFICER HAS CONFRONTED THE MATERIA L AND THE STATEMENT AND ALSO THE COPY OF THE STATEMENT WAS DU LY PROVIDED. THEREAFTER, THE ASSESSING OFFICER HAS NOT MERELY RELIED OR GONE BY THE STATEMENTS AND MATERIAL GIVEN BY THE I.T.A. NO.4034/DEL/2019 39 INVESTIGATION WING, BUT IN FACT ASSESSING OFFICER H AS MADE HIS ENDEAVOR TO CONDUCT INDEPENDENT INQUIRIES BY SENDIN G NOTICES U/S.133(6) AND ISSUING SUMMONS U/S.131 TO THE DIREC TORS OF THE INVESTEE COMPANIES AND ALSO TO THE DIRECTORS OF THE ASSESSEE COMPANY. WHEN NONE OF SUCH SUMMONS OR NOTI CES WAS RESPONDED, THEN ASSESSEE ITSELF WAS CALLED UPON BY THE ASSESSING OFFICER TO PRODUCE THOSE PERSONS, BECAUSE IT IS THE ASSESSEE WHO HAS RECEIVED THE SHARE APPLICATION MON EY FROM THEM. SINCE THERE WAS FAILURE ON THE PART OF THE AS SESSEE TO PRODUCE THE DIRECTORS AND THE INFORMATION AS REQUIR ED BY THE ASSESSING OFFICER, THEN IT CANNOT BE HELD THAT MERE LY BECAUSE ASSESSING OFFICER HAS NOT PROVIDED CROSS EXAMINATIO N, THE ENTIRE ASSESSMENT GETS INVALID OR ADDITION IS UNSUS TAINABLE. ASSESSING OFFICER HAS NOT MADE THE ADDITION BLINDLY RELYING UPON THE STATEMENTS BUT IT WAS ASSESSEE WHO HAS FAI LED TO DISCHARGE ITS ONUS. 17. HERE IT IS NOT A CASE THAT THERE IS ANY LACK OF INQUIRY BY THE ASSESSING OFFICER OR HE IS MERELY GONE BY THE I NFORMATION RECEIVED FROM THE INVESTIGATION WING, IN FACT, AT A LL THE STAGES ASSESSING OFFICER KEPT ON ASKING THE ASSESSEE TO PR OVIDE THE REQUISITE DETAILS AND TO PRODUCE THE DIRECTORS OF T HE INVESTEE COMPANIES AND THE DIRECTOR OF THE ASSESSEE COMPANY, BECAUSE IT IS ASSESSEES CLAIM THAT IT HAS RECEIVED SHARE C APITAL/SHARE PREMIUM FROM THESE COMPANIES. IF A COMPANY IS MAKIN G SUCH A HUGE INVESTMENT, THEN ASSESSEE SHOULD HAVE AT LEA ST MADE ENDEAVOR TO PRODUCE SUCH PARTIES BEFORE THE ASSESSI NG OFFICER I.T.A. NO.4034/DEL/2019 40 WHEN THEY WERE NOT RESPONDING TO THE NOTICES AND SU MMONS ISSUED BY THE ASSESSING OFFICER. NOT ONLY THERE WAS NON- ATTENDANCE FROM THE SIDE OF THE INVESTEE COMPANIES, BUT ANALYSIS OF THE FINANCIAL CREDIBILITY OF THESE COMP ANIES GOES TO SHOW THAT THEY DID NOT HAD ANY KIND OF CREDITWORTHI NESS TO MAKE SUCH A HUGE INVESTMENT IN THE ASSESSEE COMPANY . IF THE EVIDENCE PRODUCED BY THE ASSESSEE DOES NOT ESTABLIS H THE GENUINENESS OR CREDITWORTHINESS OF THE TRANSACTION, THEN THE CREDITOR OR THE INVESTOR HAS TO EXPLAIN THE SOURCE OR PRODUCE DOCUMENT TO PROVE HIS CREDITWORTHINESS. THE ASSESSI NG OFFICER HAS CATEGORICALLY NOTED THAT UNIFORMLY IN THE CASE OF ALL THE SIX COMPANIES WERE NOT ONLY SHOWING THE LOW PROFIT BUT ALSO HAD VERY MEAGER INCOME WHICH SHOWS THAT THE PROFIT MAKI NG APPARATUS WAS NOT SUFFICIENT TO MAKE SUCH INVESTMEN T. NOWHERE ASSESSEE HAS BROUGHT ON RECORD THAT THESE COMPANIES HAVE HUGE CAPITAL IN THE BALANCE SHEET TO MAKE INVESTMENT BECAUSE SOME OF THE BANK STATEMENTS ANAL YSED BY THE ASSESSING OFFICER GOES TO SHOW THAT IMMEDIATELY BEFORE MAKING THE INVESTMENT THERE ARE CREDIT ENTRIES WHIC H REMAIN UNEXPLAINED. WHEN ANY CREDIBLE DOUBT HAS CREPT IN R EGARDING THE NATURE OF ENTRIES, THEN THESE COMPANIES ALONE C OULD HAVE EXPLAINED OR PROVED AS TO HOW AND FROM WHERE THEY H AVE RECEIVED THE MONEY FOR MAKING THE INVESTMENT. IF TH EY HAVE FAILED TO RESPOND TO THE NOTICES ISSUED BY THE ASSE SSING OFFICER THEN ASSESSEE SHOULD HAVE PRODUCE THE PRINC IPAL OFFICER/DIRECTORS OF THESE COMPANIES TO EXPLAIN THE CREDITS AND TO CORROBORATE THE DOCUMENTS SUBMITTED BY THE A SSESSEE. I.T.A. NO.4034/DEL/2019 41 HONBLE DELHI HIGH COURT IN THE CASE OF NOVADAYA PV T. LTD. (SUPRA) HAS HELD THAT IF THERE WERE CORRESPONDING D EPOSIT IN THE BANK ACCOUNT BEFORE THE ISSUANCE OF SHARE CAPIT AL/SHARE PREMIUM CHEQUES, THEN MERE FILING OF PAN, ETC. WERE NOT SUFFICIENT, BECAUSE THESE ARE THE NATURE OF DEPOSIT S AND SOURCE OF DEPOSITS WHICH NEEDS TO BE EXPLAINED. IN THE CASES WHERE INVESTIGATION WING HAS FOUND THAT ANY ASSESSE E HAS RECEIVED BOGUS ACCOMMODATION ENTRY WHICH HAS BEEN F OUND TO BE FACTUALLY CORRECT FROM THE RECORDS GATHERED, THE N ALL THE MORE ONUS SHIFTS VERY HEAVILY UPON THE ASSESSEE TO PROVE THAT THE TRANSACTION IS GENUINE AND THE MONEY WHICH HAS BEEN RECEIVED BY IT HAS COME THROUGH GENUINE SOURCES AND THIS CAN ONLY BE ESTABLISHED WHEN THE INVESTEE COMPANY WHEN THE DIRECTORS/PRINCIPAL OFFICERS OF THE INVESTEE COMPAN Y PRODUCED BEFORE THE ASSESSING OFFICER AND THEY CAN EXPLAIN T HE NATURE OF TRANSACTION UNDERTAKEN WITH THE ASSESSEE. ALL TH ESE JUDGMENTS RELIED UPON BY THE LD. CIT-DR OF HONBLE JURISDICTIONAL HIGH COURT CLEARLY CLINCHES THE ISSU E IN FAVOUR OF THE REVENUE. THE PERMEATING PRINCIPLE IS LAID DO WN IN THESE JUDGMENTS ARE THAT MERE FURNISHING OF BANK STATEMENT AND DOCUMENTS DOES NOT FULFILL THE REQUIREMENT OF SECTI ON 68 BECAUSE IT IS ESSENTIAL THAT BUSINESS ACTIVITIES OF THE SHARE SUBSCRIBERS AND THE FINANCIAL HEALTH NEEDS TO BE ES TABLISHED. ASSISTANCE OF PRINCIPAL OFFICER OF THE SUBSCRIBING COMPANIES IS REQUIRED AND WHO WAS/SHOULD BE PRESENT BEFORE THE A SSESSING OFFICER TO EXPLAIN THE SAID POSITION. OTHERWISE ALS O IT IS NOT A CASE THAT ASSESSING OFFICER HAS NOT MADE ANY INQUIR Y OR I.T.A. NO.4034/DEL/2019 42 WHERE HE HAS ISSUED NOTICES U/S. 133(6) AND ALL THE SUBSCRIBING COMPANY HAVE DULY RESPONDED AND SUBMITT ED AND THE DOCUMENTS RELATING TO THE TRANSACTION AND C ONFIRMING THE SAME THROUGH EVIDENCES. IN THAT CASE, ONUS SHIF TS UPON THE ASSESSING OFFICER TO PROVE THAT THESE ARE NOT C ORRECT. HERE IN THIS CASE IT IS JUST AN OPPOSITE, AS NONE OF THE NOTICES AND SUMMONS HAVE BEEN COMPLIED WITH, THEREFORE, ALL THE DOCUMENTS SUBMITTED BY THE ASSESSEE DOES NOT DISCHA RGE THE ONUS SPECIFICALLY IN THE LIGHT OF THE MATERIAL INFO RMATION ON RECORD. 18. ON MERITS ALSO, WE ARE OF THE OPINION THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE INGREDIENTS OF SECTIO N 68 TO ESTABLISH THE GENUINENESS OF THE TRANSACTION WERE N OT MET. THOUGH ASSESSEE MAY HAVE FILED CERTAIN PAPERS AND DOCUMENTS, HOWEVER, WHEN THERE IS A SPECIFIC INFORM ATION THAT THE SUBSCRIBING / INVESTEE COMPANIES HAVE BEEN FOUN D TO BE PROVIDING ACCOMMODATION ENTRIES, AND LATER ON NONE OF THESE INVESTEE COMPANIES RESPONDED TO THE INQUIRY MADE BY THE ASSESSING OFFICER, THEN ONUS SHIFTS UPON THE ASSESS EE TO REBUT SUCH FINDING AND THIS CAN ONLY BE DONE WHEN EITHER IN RESPONSE TO NOTICES U/S.133(6) PARTIES HAVE RESPOND ED TO THE ASSESSING OFFICER BY FURNISHING ALL THE DETAILS OR ASSESSEE HAS PRODUCED THE PARTIES BEFORE THE ASSESSING OFFICER T O BE EXAMINED. HERE IN THIS CASE THE ASSESSING OFFICER H AS GIVEN AN ADVERSE FINDING REGARDING THE CREDITWORTHINESS A ND THERE PROFIT MAKING CAPACITY WHICH NEEDS TO ESTABLISHED. THE NATURE I.T.A. NO.4034/DEL/2019 43 OF DEPOSIT RECEIVED BY THESE COMPANIES BEFORE ISSUA NCE OF CHEQUE HAS NEITHER BEEN EXPLAINED NOR HAS BEEN PROV ED EITHER OF THE COMPANIES OR BY THE ASSESSEE. THE SOURCE OF THE MONEY FROM WHERE INVESTMENT HAS BEEN MADE NEEDS TO BE EXP LAINED BY THE INVESTEE COMPANIES OR BY THE ASSESSEE, ESPEC IALLY WHEN ENTIRE TRANSACTION HAS BEEN FOUND TO DOUBTFUL. THE FOLLOWING CONCLUSION BY THE ASSESSING OFFICER CLEARLY POINT O UT THAT ASSESSEE HAS MISERABLY FAILED TO DISCHARGE ITS ONUS AT THE ASSESSMENT STAGE:- 9.1 NEITHER DIRECTORS/REPRESENTATIVE OF INVESTOR C OMPANIES WERE APPEARED FOR HEARING U/S 131 FOR RECORDING OF STATE MENT ON OATH NOR THE ASSESSEE COMPANY COULD PRODUCE THEM. AS SUC H CASE IS COMPLETED ON THE BASIS OF MATERIAL AND DETAILS FURN ISHED BY THE CA/AR OF THE ASSESSEE COMPANY AVAILABLE ON RECORD. THE ASSESSEE COMPANY WAS GIVEN ALL OPPORTUNITY TO PROVE ITS CLAIM. IN THE BACK DROP OF ABOVE FACTS APPLICABILITY OF PR OVISIONS OF SECTION 68 IS EXAMINED. IT HAS BEEN JUDICIALLY ESTA BLISHED THAT THE PRIMARY ONUS IS ON THE ASSESSEE TO PROVE THE ID ENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS IN RESPECT OF CASH CREDITS IN ITS BOOKS OF ACCOUNTS. LAW STATES T HAT IT IS FOR THE ALLEGED TO COME OUT CLEAN. THE ASSESSEE COMPANY MAD E NO SERIOUS EFFORTS TO COME OUT CLEAN ON THE ALLEGATION SO RAISED. EXPLANATION OFFERED BY THE ASSESSEE IS FOUND UNSATI SFACTORY, THE PROVISION OF SECTION 68 ARE ATTRACTED AND DISCUSSED ABOVE IN DETAIL IN PARA 6. 9.2 THE SUM OF RS.74, 00,000/- HAS BEEN FOUND CRED ITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IT IS MOST IM PORTANT TO NOTE THAT THE ASSESSEE ENJOYING THE BENEFIT OF THE SAID MONEY WITHOUT I.T.A. NO.4034/DEL/2019 44 ANY ASSOCIATED FINANCIAL BURDEN, THE SAME MANNER AS IT IS ITS OWN TAX PAID MONEY AFTER UTILIZING THE SERVICES OF THE SAID ENTRY OPERATORS. THE IMMEDIATE SOURCE OF THIS AMOUNT HAS BEEN FOUND TO BE ACCOMMODATION ENTRY PROVIDER COMPANIES OUT OF ENTITIES CONTROLLED BY SH. PRADEEP KUMAR JINDAL AS DISCUSSED ABOVE IN PARA 3 REASON TO BELIEVE AND MODUS OPERANDI. THE SO URCE OF MONEY IS NOT EXPLAINABLE BY THE ENTRY OPERATORS. TH ESE FACTS CLEARLY SHOW THAT TRANSACTIONS ARE NOT GENUINE. 9.3 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, DETAILS/MATERIAL AVAILABLE ON RECORD IN THE CASE AN D CORRELATED INFORMATION WITH THE FINANCIALS OF THE RETURN OF IN COME FILED AND REPORT OF INFORMATION FROM INVESTIGATION WING, ADIT (INVESTIGATION) UNIT 2(1), NEW DELHI, STATEMENTS RE CORDED ON OATH BY THE INVESTIGATION WING AND AFORESAID DISCUSSION HELD I AM SATISFIED THAT THE TOTAL AMOUNT OF RS.74,00,000/- ( RUPEE SEVENTY FOUR LAKH ) ALLEGEDLY RECEIVED FROM ENTITIES MENTIO NED IN PARA 3 WAS NEVER RECEIVED AS SHARE CAPITAL/SHARE PREMIUM. IT WAS A CAMOUFLAGED TRANSACTION TO AVAIL THE BENEFIT OF FAV ORABLE JUDICIAL PRONOUNCEMENT ON SHARE CAPITAL. THE GENUINENESS AND CREDITWORTHINESS OF THE PERSONS/COMPANIES GIVING SH ARE APPLICATION MONEY TO THE ASSESSEE IS NOT PROVED AND ASSESSEE FAILED TO DISCHARGE ITS ONUS OF PROVING THE GENUINE NESS AND CREDITWORTHINESS OF THE PERSON/COMPANY WHO CLAIMED TO BE THE SHARE HOLDER OF THE ASSESSEE COMPANY. IT IS STRONGL Y POINTED OUT THAT IT IS NOT CASE WHERE SUBSCRIBERS TO SHARE CAPI TAL ARE BEING VERIFIED IN NORMAL COURSE OF ASSESSMENT. IT IS ALSO NOT THAT THE ALL THE CASES HAVE BEEN REOPENED WHERE SHARE WERE SUBSC RIBED DURING THE YEAR. ONLY THOSE CASES ARE SOUGHT TO BE REVISITED WHERE DEPARTMENT HAD STRONG EVIDENCE THAT THE PARTI ES I.T.A. NO.4034/DEL/2019 45 CONTRIBUTING TO THE ASSESSEE ARE ENTRY OPERATORS. O NE CANNOT BE OBLIVIOUS OF THE FACT THAT THE ABOVE MENTIONED ORGA NIZED SYNDICATE OF MONEY LAUNDERING EMPLOYED BY THE ASSES SEE TO LAUNDER ITS UNACCOUNTED MONEY AS IS EVIDENT FROM TH E ABOVE FACTS CAN BE ACCEPTED ONLY ON THE BASIS OF COLLUSIVE DOCUMENTS. IN SUCH SCENARIO IT WOULD NOT BE SUFFICIENT TO ONLY BRING COPY OF ITR/ SHARE APPLICATION FORM OR OTHER DOCUMENTS EMAN ATED FROM THE ASSESSEE OR ITS COUNTERPART IN SUCH ACT. BUT TH E SOURCE AND NATURE OF TRANSACTIONS NEED TO BE PROVED BEYOND DOU BTS. THE ASSESSEE HAS MISERABLY FAILED TO DO SO. THUS, KEEPING IN VIEW OF THE TOTALITY OF THE FACTS, ABOVE DISCUSSION THE AMOUNT OF RS.74,00,000/- (RUPEE SEVE NTY FOUR LAKH ) IS ADDED BACK TO THE INCOME OF THE ASSESSEE COMPANY FOR A.Y 2010-11, U/S. 68 OF THE INCOME TAX ACT, 1961. (ADDITION RS. 74, 00,000/-) 9.4 IT IS ALSO A WELL KNOWN FACT THAT THESE ENTRY P ROVIDERS DO CHARGE CERTAIN PERCENTAGE OF COMMISSION FROM THE BE NEFICIARIES. THERE ARE SO MANY SIMILAR CASES OF ENTRY PROVIDERS IN THE DEPARTMENT WHEREIN A PERCENTAGE OF 2-3% WAS HELD TO BE PAID BY THE BENEFICIARIES TO THE ENTRY PROVIDERS. THEREF ORE, THE FOLLOWING THE SAME PATTERN, IN THIS CASE ALSO IT IS HELD THAT A COMMISSION AT THE RATE OF 2.5% HAS BEEN PAID BY THE ASSESSEE TO THE ABOVE MENTIONED ENTRY PROVIDERS. HENCE, A FURTH ER ADDITION OF RS. 1,85,000/- BEING 2.5% OF RS.74, 00,000/- IS MADE TO THE INCOME OF THE ASSESSEE FOR A.Y 2010-11 AS ADDED U/S 69C OF THE INCOME TAX ACT, 1961 AS EXPENDITURE INCURRED ON SUC H TRANSACTIONS. (ADDITION RS. 1,85,000/- I.T.A. NO.4034/DEL/2019 46 19. BEFORE US, LD. COUNSEL HAD SUBMITTED THAT WHA T WAS REQUIRED TO PROVE WAS THE NATURE AND SOURCE OF CRED IT WHICH ASSESSEE HAS TRIED TO ESTABLISH BY ALL THE DOCUMENT ARY EVIDENCES AND ASSESSEE WAS NOT REQUIRED TO PROVE TH E SOURCE OF THE SOURCE. HOWEVER, IF THE SOURCE OF THE MONEY FROM THE INVESTEE COMPANY IS TO BE PROVED THEN THE MATTER CA N BE REMANDED BACK TO THE ASSESSING OFFICER AND OPPORTUN ITY SHOULD BE GIVEN TO EXPLAIN THE SAME. THOUGH PROVISO TO SECTION 68 WHICH HAS BEEN INSERTED W.E.F. 1.04.2013 , THAT IS, FROM A.Y. 2013-14 PROVIDES THAT INVESTEE COMPANY IN WHOSE NAME SUCH CREDIT IS RECORDED SHOULD ALSO OFFER EXPL ANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDIT. HERE IN THIS CASE THOUGH PROVISO MAY NOT STRICTLY APPLY BUT FACTS AND CIRCUMSTANCES AS DISCUSSED ABOVE DOES REQUIRE THAT THE INVESTEE COMPANY HAS TO EXPLAIN THE SOURCE OF ITS I NVESTMENT AND CREDITWORTHINESS. THUS, IN THE INTEREST OF JUST ICE WE RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO THE ASSESSEE TO EXPLAIN THE SOURCE AND CREDITWOR THINESS OF THE INVESTEE COMPANIES AND IF REQUIRED BY THE ASSES SING OFFICER, ASSESSEE SHALL PRODUCED THE PRINCIPAL OFFI CERS OR DIRECTORS OF THESE COMPANIES TO EXPLAIN THE NATURE AND SOURCE OF INVESTMENT MADE IN THE ASSESSEE COMPANY. ACCORDI NGLY THE ISSUE ON MERITS IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER, 2019. I.T.A. NO.4034/DEL/2019 47 SD/- SD/- [B.R.R. KUMAR] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: DECEMBER, 2019 PKK: