ITO, New Delhi V. M/s. New Age Marketing Pvt. Ltd, New Delhi

ITA 4123/DEL/2009

• Counselvise Citation: 412320114 RSA 2009
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 14-03-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 15-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: AMIT GOEL
• Keywords: Reopening of assessment; Opportunity of being heard; Additional evidence; Accommodation entries; Assessment record
• Section: 147; 131; 68; 148; 144; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T.A.NO.4123/DEL/2009 ASSESSMENT YEAR : 2004-05 INCOME-TAX OFFICER, M/S. NEW AGE MARKETING PVT. L TD., WARD 13(2), NEW DELHI. VS. 59/17, BAHUBALI BUILDIN G, NEW ROHTAK ROAD, NEW DELHI. PAN: AAACN1019R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R. S. NEGI, SR. DR RESPONDENT BY : SHRI AMIT GOEL, CA . O R D E R PER K.D. RANJAN, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 2004 -05 ARISES OUT OF THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APP EALS)-XVI, NEW DELHI. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS.18,66,895/- MADE BY AO U/S 68 OF THE INCOME-TAX ACT, IGNORING VARIOUS FACTUAL, LEGAL AND CIRCUMSTANTIAL ARGUMENTS GIVEN BY AO IN GREAT DETAILS (IN SUPPORT OF THE ADD ITION MADE) IN THE ASSESSMENT ORDER AND MORE PARTICULARLY IN TH E REMAND REPORT DATED 12.05.2009. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.46,672/- BEING COMMISSION PAID FOR OBTAINING ACCOMMODATION E NTRIES 2 MADE BY A.O. U/S 68 OF THE INCOME TAX ACT, IGNORING VARIOUS FACTUAL, LEGAL AND CIRCUMSTANTIAL ARGUMENTS GIVEN B Y AO IN GREAT DETAILS (IN SUPPORT OF THE ADDITION MADE) IN THE ASSESSMENT ORDER AND MORE PARTICULARLY IN THE REMAN D REPORT DATED 12.05.2009. 2. THE FIRST ISSUE FOR CONSIDERATION RELATES TO DEL ETING THE ADDITION OF RS.18,66,895/- MADE BY THE ASSESSING OFFICER UNDER SEC. 68 OF THE ACT. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT RETURN O F INCOME FILED ON 31 ST OCTOBER, 2004 AT AN INCOME OF RS.42,558/- WAS PROCE SSED UNDER SEC. 143(1) OF THE ACT. SUBSEQUENTLY ON THE BASIS OF INFORMATI ON RECEIVED FROM INVESTIGATION WING, THE ASSESSING OFFICER REOPENED ASSESSMENT UNDER SEC.147 BY ISSUE OF NOTICE UNDER SEC. 148 OF THE AC T. THE NOTICE WAS HOWEVER, RECEIVED BACK UN-SERVED. THE ASSESSING OF FICER SERVED THE NOTICE THROUGH AFFIXTURE ON 6.12.2006 AT THE LAST KNOWN AD DRESS OF THE ASSESSEE I.E. 2881, HARDHIAN SINGH ROAD, KAROL BAGH, DELHI-5. TH E ASSESSEE DID NOT RESPOND TO THE NOTICE. THE AO ISSUED NOTICE UNDER SEC. 142(1) DATED 12.10.2007 ALONG WITH QUESTIONNAIRE FIXING THE CASE FOR HEARING ON 16.11.2007. NOTICE WAS AGAIN RECEIVED BACK UN-SERV ED. IN THE MEANTIME THE CURRENT ADDRESSES OF THE DIRECTORS WERE TRACED. A SHOW CAUSE NOTICE DATED 6.12.2007 WAS ISSUED AND SENT ALONG WITH COPY OF NO TICE UNDER SEC. 148 AND NOTICE/QUESTIONNAIRE UNDER SEC. 142(1) WAS SENT AT THE ABOVE ADDRESS OF THE DIRECTORS I.E. SHRI AJIT KUMAR, R/O 26, SAINI ENCLA VE, DELHI, SHRI RAKESH 3 GUPTA, R/O 45, MODEL BASTI, DELHI AND SHRI MANISH A RORA, R/O 59/17, BAHUBALI APARTMENTS, NEW DELHI, REQUIRING THE ASSES SEE TO EXPLAIN AS TO WHY ASSESSMENT PROCEEDINGS MAY NOT BE COMPLETED UND ER SEC. 144 OF THE ACT ON THE BASIS OF INFORMATION AVAILABLE ON RECORD . THE CASE WAS FIXED FOR HEARING ON 13.12.2007. ALL THE NOTICES, EXCEPT ONE SENT AT THE ADDRESS OF SHRI RAKESH KUMAR, WERE RECEIVED BACK UN-SERVED. N O RESPONSE WAS RECEIVED FROM THE ASSESSEE. FINALLY, THE SAID SHOW CAUSE NOTICE ALONG WITH NOTICE U/S 142(1) WAS SERVED THROUGH AFFIXED ON 11. 12.2007 AT THE ADDRESS OF THE REGISTERED OFFICE OF THE ASSESSEE I.E. 2881, HA RDHIAN SINGH ROAD, KAROL BAGH, NEW DELHI. SINCE NO REPLY WAS RECEIVED BY TH E ASSESSING OFFICER, THE AO PROCEEDED TO COMPLETE ASSESSMENT U/S 144 OF THE ACT. 3. THE ASSESSING OFFICER IN ASSESSMENT ORDER HAS ST ATED THAT AS PER THE INFORMATION RECEIVED FROM INVESTIGATION WING, THE A SSESSEE HAD RECEIVED RS.9,96,010/- ON 28.08.2003 FROM M/S. K.R. FINCAP P VT. LTD. AND RS.8,70,885/- ON 4.09.2003 FROM M/S. GARG FINVEST P VT. LTD. THE COMPANIES FROM WHOM THE ASSESSEE HAD RECEIVED AMOUN TS AS STATED ABOVE, HAD BEEN SUBJECT OF CERTAIN ENQUIRIES AND INVESTIGA TION BY THE INVESTIGATION WING OF THE DEPARTMENT, WHEREIN IT HAD BEEN FOUND T HAT THEY WERE NOT ENGAGED IN ANY REAL BUSINESS ACTIVITY. THEY WERE E NGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES. THE AO IN ORDER T O VERIFY THE 4 GENUINENESS OF THE TRANSACTIONS AND THE IDENTITY AN D CREDITWORTHINESS OF SAID PERSONS OBTAINED THEIR ADDRESSES FROM THEIR BANK AN D SUMMONS U/S 131 OF THE ACT WERE ISSUED TO THEM ON 15.10.2007 REQUIRING THEM TO PRODUCE THEIR BOOKS OF ACCOUNTS AND EXPLAIN THE NATURE AND DETAIL S OF TRANSACTIONS WITH THE ASSESSEE COMPANY. THE SUMMONS WERE HOWEVER, RECEIV ED BACK UN-SERVED. 4. THE AO FURTHER NOTED THAT M/S. K.R. FINCAP PVT. LTD. AND M/S. GARG FINVEST PVT. LTD. BELONGED TO MAHESH GARG GROUP OF ENTRY PROVIDERS. SHRI MAHESH GARG AND HIS ASSOCIATES HAD GIVEN STATEMENT ON OATH U/S 131 OF THE ACT BEFORE THE ADDITIONAL DIRECTOR OF INCOME-TAX (I NVESTIGATION), UNIT-I, DELHI WHEREIN THEY HAVE CATEGORICALLY ADMITTED THAT NO REAL TRANSACTIONS WERE REPRESENTED BY THE ENTRIES REFLECTED IN THE BA NK ACCOUNTS EXISTING IN THE NAMES OF M/S. K.R. FINCAP PVT. LTD. AND M/S. GARG F INVEST PVT. LTD. THEY HAVE ADMITTED THAT THESE ENTITIES AND OTHER SUCH EN TITIES CONTROLLED BY THEM WERE ENGAGED IN THE ACTIVITY OF ARRANGING ACCOMMODA TION ENTRIES FOR OTHERS. THE BANK ACCOUNTS OF THESE ENTITIES WERE OPERATED B Y SHRI MAHESH GARG AND SHRI CHETAN PRAKASH, S/O SHRI SHAMBHU DAYAL, R/O HO USE NO.88/7, KANAN MANDI, DISTT. MAHENDERGARH, HARYANA. THEIR STATEME NTS GIVEN IN THEIR CAPACITIES AS DIRECTORS/AUTHORIZED SIGNATORIES WERE PLACED ON RECORD. THE AO IN VIEW OF THE NATURE AND DETAILS OF TRANSACTION S OBSERVED THAT SAID AMOUNT HAD BEEN RECEIVED BY THE ASSESSEE FROM ENTRY PROVIDERS. HE, 5 THEREFORE, ADDED THE AMOUNT OF RS.18,66,895/-. THE AO ALSO ADDED AN AMOUNT OF RS.46,672/- BEING 2.5% OF RS.18,66,895/- AS COMMISSION WHICH MIGHT HAVE BEEN PAID BY THE ASSESSEE FOR TAKING THE ACCOMMODATION ENTRIES. 5. BEFORE THE CIT(A) THE ASSESSEE CHALLENGED THE RE OPENING OF ASSESSMENT AND ISSUE OF NOTICE U/S 143(2) OF THE AC T. THE LEARNED CIT(A) UPHELD THE REOPENING OF ASSESSMENT AS WELL AS COMPL ETION OF ASSESSMENT UNDER SEC. 144 OF THE ACT. DURING THE COURSE OF HE ARING BEFORE THE CIT(A) THE ASSESSEE FILED ADDITIONAL EVIDENCE ALONG WITH W RITTEN SUBMISSIONS WHICH WERE FORWARDED TO THE AO. THE LEARNED CIT(A) OBTAI NED THE COMMENTS OF THE AO AND FURTHER COMMENTS OF ASSESSEE ON THE REMA ND REPORT SUBMITTED BY THE AO. IT WAS SUBMITTED BY THE ASSESSEE BEFORE TH E CIT(A) THAT PAYMENT OF RS.9.96 LAKHS WAS RECEIVED FROM M/S. K.R. FINCAP PV T. LTD. ON ACCOUNT OF SALE OF 95000 SHARES OF M/S. HIMALAYA COMMUNICATION S PVT. LTD. AND PAYMENT OF RS.8.7 LAKHS WAS RECEIVED FROM M/S. GARG FINVEST PVT. LTD. ON ACCOUNT OF SALE OF 11500 SHARES OF M/S. GREEN APPLE LEASING AND 76000 SHARES OF M/S. HOLY BUILDERS PVT. LTD. IN RESPECT OF ACQUISITION OF THESE SHARES IT WAS STATED BY THE ASSESSEE THAT THESE WER E ACQUIRED DURING THE YEAR UNDER CONSIDERATION ONLY FROM M/S. CARE TRADERS PVT . LTD. THE ASSESSEE FURNISHED DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE PURCHASE OF SHARES. IT WAS FURTHER STATED BY THE ASSESSEE THAT PART OF THE ABOVE INVESTMENTS WERE 6 SOLD BY IT TO THE ABOVE MENTIONED PARTIES AND THE P ART WERE SOLD TO OTHER PARTIES WHICH HAVE BEEN ACCEPTED BY THE AO. THE L EARNED CIT(A) ON CONSIDERATION OF THE SUBMISSIONS OF THE ASSESSEE AN D THE AO HAD OBSERVED THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEED INGS/REMAND PROCEEDINGS ISSUED SUMMONS TO THE SAID PARTIES AT T HE ADDRESS PROVIDED BY THE INVESTIGATION WING, WHICH WERE RECEIVED BACK UN -SERVED. HOWEVER, NO FURTHER ACTION WAS TAKEN BY THE AO TO LOCATE THE SA ID PARTIES AND ENFORCE THE COMPLIANCE OF THE SUMMONS. THE AO DID NOT CONFRONT THESE FACTS TO THE ASSESSEE DURING THE COURSE OF REMAND PROCEEDINGS. IT WAS FURTHER STATED BY THE ASSESSEE THAT IF THE SAID PARTIES WERE NOT COMP LYING WITH THE SUMMONS OF THE DEPARTMENT, THEN THE ASSESSEE HAD NO AUTHORITY OR LEGAL POWER TO COMPEL THEM FOR ENFORCEMENT OF THEIR ATTENDANCE BEFORE THE AO. THE AO HAD RELIED UPON THE STATEMENTS OF SHRI MAHESH GARG, SHRI CHETA N PRAKASH AND SHRI KESHO RAM GUPTA BUT NO OPPORTUNITY TO CROSS-EXAMINE SAID PERSONS WAS PROVIDED. THE LEARNED CIT(A) RELYING ON THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION (P) LTD., 159 ITR 78 HAS HELD THAT IN A CASE IF THE CREDITOR DOES NOT APPEAR IN RESPONSE TO SUMMONS ISSUED U/S 131, NO ADVERSE INFERENCE CAN BE DRAWN A GAINST THE ASSESSEE. THE LEARNED CIT(A) RELYING ON OTHER DECISIONS HELD THAT DURING THE COURSE OF REMAND PROCEEDINGS THE ASSESSEE HAD DISCHARGED THE INITIAL ONUS OF 7 ESTABLISHING THE BONA FIDES OF TRANSACTIONS AND THE AO WAS NOT JUSTIFIED IN IGNORING THE VARIOUS EVIDENCES PROVIDED TO HIM BY T HE ASSESSEE. THE ASSESSMENT ORDER HAS BEEN FRAMED BY THE AO ONLY ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT WITHOUT MAKING ANY FURTHER INVESTIGATION. NOTHING ADVERSE HAS BEEN BROUGHT ON RECORD BY THE AO TO ESTABLISH THAT THE CONSIDERATIO N ON SALE OF SHARES RECEIVED BY THE ASSESSEE REPRESENTED HIS OWN UNDISC LOSED INCOME. THE LEARNED CIT(A) ACCORDINGLY HELD THAT SALE CONSIDERA TION RECEIVED BY THE ASSESSEE WERE GENUINE AND THE SAME WAS NOT ACCOMMOD ATION ENTRY. THE LEARNED CIT(A) THEREFORE, DELETED THE ADDITION. 6. BEFORE US, THE LEARNED SR. DR SUBMITTED THAT THE ASSESSEE HAD RECEIVED ENTRIES FROM ENTRY OPERATORS. THE ASSESSMENT WAS R E-OPENED U/S 147 AFTER RECEIPT OF INFORMATION FROM THE INVESTIGATION WING OF THE DEPARTMENT. SHRI MAHESH GARG AND ASSOCIATES HAVE GIVEN STATEMENTS BE FORE THE ADDITIONAL DIRECTOR OF INCOME-TAX (INVESTIGATION), UNIT-I, DEL HI WHEREIN THEY HAVE CATEGORICALLY ADMITTED THAT NO REAL TRANSACTIONS WE RE REPRESENTED BY THE ENTRY REFLECTED IN THE BANK ACCOUNTS EXISTING IN THE NAME S OF M/S. K.R. FINCAP PVT. LTD. AND M/S. GARG FINVEST PVT. LTD. SINCE THE DIR ECTORS OF THE COMPANY HAVE GIVEN STATEMENT BEFORE INVESTIGATION WING, THE TRANSACTIONS CANNOT BE TREATED TO BE GENUINE. THESE COMPANIES ARE FRONT C OMPANIES ENGAGED IN 8 PROVIDING ACCOMMODATION ENTRIES. THEREFORE, THE LE ARNED CIT(A) IS NOT JUSTIFIED IN TREATING THE TRANSACTIONS AS GENUINE. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE STRONGLY SUPPORTED THE O RDER OF THE CIT(A). HE SUBMITTED THAT THE AMOUNT RECEIVED BY THE ASSESSEE REPRESENTS THE SALE PROCEEDS OF SHARES SOLD BY THEM. HE THEREFORE, SUB MITTED THAT THE LEARNED CIT(A) IS JUSTIFIED IN DELETING THE ADDITION. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE ACTION U/S 147 W AS TAKEN BY THE AO ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WI NG OF THE DEPARTMENT THAT M/S. K.R. FINCAP PVT. LTD. AND M/S. GARG FINVE ST PVT. LTD. WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. THESE COMPANIES BELONG TO SHRI MAHESH GARG GROUP OF ENTRY PROVIDERS. SHRI MA HESH GARG S/O SHRI K.S. GARG, R/O G-8/9, SECTOR 15, ROHINI, DELHI AND HIS ASSOCIATES HAVE GIVEN STATEMENT ON OATH BEFORE THE ADDL. DIRECTOR OF INCO ME-TAX (INVESTIGATION),UNIT-I, DELHI THAT THEY WERE INVOLV ED IN ENTRY PROVIDING ACTIVITIES AND THE TRANSACTIONS WERE NOT REAL ONE. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTERS & FINLE ASE (P) LTD. [2012] 18 TAXMANN.COM 217 (DELHI) HAS HELD AS UNDER:- WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICA NTS SUCH AS THEIR NAMES AND ADDRESSES, INCOME TAX FILE NUMBERS, THEIR CREDITWORTHINESS, SHARE APPLICATION FORMS AND SHARE HOLDERS REGISTER, SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO 9 THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATER IAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY UNDER SECTION 68 AND THE REMEDY OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE W ITH LAW. HOWEVER, THE COURT CANNOT APPLY THE RATIO TO A CASE , SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHES THE PARTICUL ARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF-CONFESSED ACCOMMODATION ENTRY PROVIDERS, WHO SE BUSINESS IT IS TO HELP ASSESSEES BRING INTO THEIR B OOKS OF ACCOUNT THEIR UNACCOUNTED MONIES THROUGH THE MEDIUM OF SHAR E SUBSCRIPTION, AND THE ASSESSEE. THE RATIO IS INAPPL ICABLE TO A CASE, AGAIN SUCH AS THE PRESENT ONE, WHERE THE INVO LVEMENT OF THE ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDI CATED BY VALID MATERIAL MADE AVAILABLE TO THE ASSESSING OFFI CER AS A RESULT OF INVESTIGATIONS CARRIED OUT BY THE REVENUE AUTHORITIES INTO THE ACTIVITIES OF SUCH ENTRY PROVIDERS. THE EXISTENCE WITH THE ASSESSING OFFICER OF MATERIAL SHOWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE-MEDIT ATED PLAN A SMOKESCREEN CONCEIVED AND EXECUTED WITH THE CONNI VANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABIL ITY OF THE RATIO. THE RATIO IS ATTRACTED TO A CASE WHERE IT IS A SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON HIM UNDER SECTION 68 TO PROVE AND ESTAB LISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICAN T AND THE GENUINENESS OF THE TRANSACTION. IN SUCH A CASE, T HE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSES SION AND THEN COME FORWARD TO MERELY REJECT THE SAME, WITHOUT CAR RYING OUT ANY VERIFICATION OR ENQUIRY INTO THE MATERIAL PLACE D BEFORE HIM. THE INSTANT CASE DOES NOT FALL UNDER THIS CATEGORY AND IT WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIE W TO THE CONTRARY. 8. IN THE CASE OF THE ASSESSEE THE AO ISSUED SUMMON S U/S 131 WHICH HAVE BEEN RECEIVED BACK UN-SERVED. THE ASSESSING O FFICER HAD TO PASS EX 10 PARTE ORDER U/S 144 IN THE ABSENCE OF COOPERATION F ROM THE ASSESSEE. HOWEVER, BEFORE THE CIT(A) THE ASSESSEE WAS ABLE TO PROCURE EVIDENCES THAT THE AMOUNTS RECEIVED FROM M/S. K.R. FINCAP PVT. LTD . AND M/S. GARG FINVEST PVT. LTD. WERE ON ACCOUNT OF SALE OF SHARES TO THEM . THERE IS NOTHING ON RECORD TO SUGGEST THAT M/S. CARE TRADERS PVT. LTD. WAS AUTHORIZED BROKER DEALING IN SHARES OF VARIOUS COMPANIES FROM WHICH T HE ASSESSEE HAD PURCHASED SHARES OF OTHER PRIVATE LIMITED COMPANIES . THE SHARES OF PRIVATE LIMITED COMPANIES ARE NEITHER TRADED IN THE MARKET NOR THERE IS ANY SUCH MARKET FOR TRADING OF SUCH SHARES. IT IS ALSO A FA CT THAT SHARES OF PRIVATE LIMITED COMPANIES ARE NOT LISTED ON STOCK EXCHANGE. A PRIVATE LIMITED COMPANY IS A CLOSELY HELD COMPANY ENGAGED IN BUSINE SS WHOSE MANAGEMENT IS LOOKED AFTER BY THE PERSONS HOLDING S HARES. SHARES OF A PRIVATE LIMITED COMPANY ARE NOT TRADED LIKE SHARES OF PUBLIC LIMITED COMPANY. IF THE SHARES OF A PRIVATE LIMITED COMPAN Y ARE TRADED LIKE IN THE MANNER IN WHICH THE SHARE OF A PUBLIC LIMITED COMPA NY TRADED AND THAT TOO THROUGH UNAUTHORIZED SHARE BROKER, IT WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT SHARES OF PAPER COMPANIES ARE TRADED THROUGH U NAUTHORIZED SHARE BROKERS WHICH WILL ALSO BE PAPER COMPANIES ENGAGED ONLY IN ENTRY PROVIDING ACTIVITIES. SHRI MAHESH GARG AND HIS ASSOCIATES HAV E GIVEN CATEGORICAL STATEMENT BEFORE THE INVESTIGATION WING OF THE DEPA RTMENT THAT THEY WERE 11 INVOLVED IN ENTRY PROVIDING ACTIVITIES THROUGH THEI R FRONT COMPANIES I.E. M/S. K.R. FINCAP PVT. LTD. AND M/S. GARG FINVEST PVT. LT D. THEREFORE, IN OUR CONSIDERED OPINION THE ISSUE IS EFFECTED BY THE DEC ISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA). IN OUR VIEW THE ASSESSEE OUGHT TO BE GIVE N A CHANCE OF CROSS EXAMINATION OF MAHESH GARG AND AO SHOULD VERIFY FRO M THE ASSESSMENT RECORD OF ENTRY OPERATORS, WHETHER THE ACCOMMODATIO N ENTRIES ARE FINALLY OWNED UP OR NOT. UNDER THESE CIRCUMSTANCES, WE FEE L IT PROPER TO SET ASIDE THE MATTER TO THE FILE OF THE AO WITH THE DIRECTION S TO KEEP IN MIND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA). HE IS ALSO DIRECTED TO MAKE THOROUGH INVESTIGATION WITH REFERENCE TO CONTENTION OF THE ASSESSEE THAT S HARES WERE PURCHASED FROM M/S. CARE TRADERS PVT. LTD. THE AO WILL MAKE ENQUI RY FROM M/S. CARE TRADERS PVT. LTD., M/S. HIMALAYA COMMUNICATIONS PVT . LTD., M/S. GREEN APPLE LEASING PVT. LTD. AND M/S. HOLY BUILDERS PVT. LTD. AS TO WHETHER SUCH COMPANIES ARE GENUINE COMPANIES OR MERE PAPER COMPA NIES. HE WILL CO- RELATE HIS INVESTIGATION WITH INFORMATION RECEIVED FROM THE ADDL. DIRECTOR OF INCOME-TAX (INVESTIGATION) AND DECIDE THE ISSUE AFT ER AFFORDING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 12 9. SINCE WE HAVE SET ASIDE THE APPEALS TO THE FILE OF THE ASSESSING OFFICER, THE ISSUE RELATING TO COMMISSION PAYMENT I S ALSO SET ASIDE TO THE FILE OF THE AO. THE AO IS DIRECTED TO PASS SPEAKING ORD ER AFTER CONDUCTING ENQUIRIES IN THE LIGHT OF DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA) AND THE REPORT OF INVESTIGATION WING OF THE DEPARTMENT. 10. IN THE RESULT, APPEAL FILED BY THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES. 11. THIS ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MAY, 2012. SD/- SD/- (R.P. TOLANI) (K.D. RANJAN) JUDICIAL MEMER ACCOUNTANT MEMBER DATED: 4 TH MAY, 2012. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.