Rakesh Footwears P.Ltd, Delhi V. ITO, Ward-21(1), New Delhi

ITA 6994/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6998 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 22-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Principle of natural justice; Accommodation entries; Reason to believe; Reassessment proceedings; Borrowed satisfaction
• Section: 143(3); 234B; 133(6); 147; 68; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.6994/DEL/2017 ASSESSMENT YEAR : 2008-09 RAKESH FOOTWEARS P. LTD., D-1546, DSIDC, NARELA, DELHI. VS. ITO, WARD- 21(1), NEW DELHI. PAN : AACCR5712M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL KUMAR JAIN, CA DEPARTMENT BY : SHRI S. L. ANURAGI, SR. DR DATE OF HEARING : 19-07-2018 DATE OF PRONOUNCEMENT : 31-07-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 20.09.2017 OF THE CIT(A)- 7, NEW DELHI RELATING TO ASSESSMENT YEAR 2008-09. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY AND FILED ITS RETURN OF INCOME ON 29.09.200 8 DECLARING NIL INCOME. IN THIS CASE INFORMATION WAS RECEIVED FROM DIT (INV.) THAT DURING THE COURSE OF SEARCH OPERATION ON SURENDER KUMAR JAIN AND SHRI VI RENDER KUMAR JAIN, IT WAS FOUND THAT THEY HAD GIVEN ACCOMMODATION ENTRIES TO THE TUNE OF RS.10,00,000/- TO THE ASSESSEE COMPANY THROUGH THE FOLLOWING COMPA NIES FLOATED BY THEM :- S.NO. NAME OF THE COMPANY AMOUNT 1 FINAGE LEASING & FINANCE (INDIA) LTD. 5,00,000 2 SINGHAL SECURITIES P. LTD. 5,00,000 2 ITA NO.6994/DEL/2017 3. AFTER RECORDING THE REASONS AND WITH THE PRIOR A PPROVAL OF THE ADDL.CIT, THE ASSESSING OFFICER ISSUED NOTICE U/S 148 ON 18.0 3.2015 WHICH WAS DULY SERVED UPON THE ASSESSEE. THE ASSESSEE FILED A LET TER ON 16.04.2015 FOR PROVIDING THE REASONS FOR REOPENING OF THE CASE WHI CH WERE PROVIDED TO THE ASSESSEE. THE OBJECTION FILED BY THE ASSESSEE CHAL LENGING THE REOPENING OF THE CASE WAS DISPOSED OFF BY THE ASSESSING OFFICER VIDE ORDER DATED 09.02.2016. SUBSEQUENTLY, THE ASSESSING OFFICER ASKED THE ASSES SEE TO SUBSTANTIATE THE CLAIM OF RECEIPT OF SHARE CAPITAL MONEY OF RS.10,00,000/- . THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) TO THE PARTIES FROM WHOM, SHARE APPLICATION MONEY WAS RECEIVED TO FURNISH THE DETAILS BY 08.03.2016. HOW EVER, NO REPLY WAS RECEIVED. THEREFORE, THE ASSESSING OFFICER AGAIN ISSUED NOTIC E U/S 133(6) AND THE INSPECTOR OF THE WARD WAS DEPUTED TO SERVE THE NOTI CE AT THE ADDRESSES GIVEN BY THE AR OF THE ASSESSEE VIDE LETTER DATED 25.02.2016 . HOWEVER, THE WARD INSPECTOR REPORTED THAT ADDRESS 106, PALCO HOUSE, T -10, MAIN ROAD, PATEL NAGAR DOES NOT EXIST AT ALL. IN VIEW OF THE ABOVE, A SHO W-CAUSE NOTICE DATED 16.03.2016 WAS ISSUED TO THE ASSESSEE COMPANY THROU GH SPEED POST WHICH WAS RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARK LEFT WITHOUT ADDRESS. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER HELD THAT THE ASSESSEE FAILED TO PROVE SATISFACTORILY THE RECEIPT OF SHARE CAPITAL OF RS.1 0,00,000/- WITH SHARE VALUE OF RS.10 AT A PREMIUM OF RS.40/-. SINCE THE ASSESSEE FAILED TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE COMPANY AND GENUINENESS OF THE TRANSACTIONS, THE 3 ITA NO.6994/DEL/2017 ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTIO N 68 MADE ADDITION OF RS.10,00,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE THE LD. CIT(A), THE ASSESSEE APART FROM C HALLENGING THE ADDITION OF RS.10,00,000/- CHALLENGED THE VALIDITY OF THE REOPE NING OF THE ASSESSMENT. THE LD. CIT(A) DISMISSED THE LEGAL GROUND CHALLENGING T HE VALIDITY OF REASSESSMENT PROCEEDINGS AND ALSO SUSTAINED THE ADDITION OF RS.1 0,00,000/- MADE BY THE ASSESSING OFFICER. 5. SO FAR AS THE VALIDITY OF REASSESSMENT IS CONCER NED, LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE ONLY REQUIREMENT TO THIS SECTION IS THAT THE ASSESSING OFFICER MUST HAVE REA SON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND THE ASSESSING OFFICER IS NOT REQUIRED TO CONCLUSIVELY PROVE THE ESCAPEMENT O F INCOME AT THE STAGE OF ISSUE OF NOTICE U/S 148 OF THE I.T. ACT. 6. SO FAR AS THE ADDITION ON MERIT IS CONCERNED, HE OBSERVED THAT ALTHOUGH THE ASSESSEE CONTENDED THAT ALL EVIDENCES SUCH AS IT RE TURN, FINANCIAL STATEMENT, COPY OF BOARD RESOLUTIONS AND BANK STATEMENT OF THE SHARE APPLICANT WERE PROVIDED TO THE ASSESSING OFFICER DURING THE ASSESS MENT PROCEEDINGS TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF T HE TRANSACTIONS, HOWEVER, THE IDENTITY OF THE COMPANY WAS PROVED ONLY ON PAPER. SINCE IN THE INSTANT CASE THE EXISTENCE OF THE SHARE APPLICANT ITSELF WAS NOT FOU ND TO BE TRUE, THE ASSESSING OFFICER CANNOT FURTHER ENQUIRE AS THE SOURCE OF THE IR INVESTMENTS. ACCORDING TO 4 ITA NO.6994/DEL/2017 HIM, MERELY FILING OF CONFIRMATION LETTER/SHARE APP LICATION FORMS WILL NOT PROVE THE IDENTITY OF THE SHARE APPLICANTS, THE GENUINENE SS OF TRANSACTIONS AND THE CREDITWORTHINESS OF THE PARTY WHICH IS STILL A BIG QUESTION MARK. RELYING ON VARIOUS DECISIONS AND OBSERVING THAT THE BANK ACCOU NT REVEALS SIMULTANEOUS DEPOSIT AND WITHDRAWALS LEADING CREDENCE TO THE MOD US OPERANDI EMPLOYED BY THE COMPANY TO PROVIDE ACCOMMODATION ENTRIES, THE L D. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. 7. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THE ASSESSMENT ORDER PASSED U/S 143(3)/147 BY T HE ASSESSING OFFICER IS ILLEGAL, BAD IN LAW AND THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) - VI HAS ALSO ERRED IN UPHOLDING THE SAME. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - VI HAS ERRED IN UPHOLDING THAT THE AO HAS RIGHTLY INITIATED THE PRO CEEDINGS UNDER SECTION 147 OF THE ACT IRRESPECTIVE OF THE FACT THAT 'REOPENING OF CAS E UNDER INCOME ESCAPEMENT ASSESSMENT IS BAD IN LAW AND WITHOUT MERIT. FURTHER , THE INSTANT REOPENING SUFFERS FROM BASIC DEFECT OF NON-APPLICATION OF MIND (REOPE NING BEING MADE ARBITRARILY WITHOUT LOOKING CASE RECORDS) BY THE ASSESSING OFFI CER.' 3. THE COMMISSIONER OF INCOME TAX (APPEALS) - VI HA S ERRED IN UPHOLDING THAT THE ASSESSING OFFICER HAS RIGHTLY MADE ADDITION OF RS.10,00,000/- ON ACCOUNT OF SHARE APPLICATION MONEY UNDER SECTION 68 OF THE INCOME TA X ACT 'IRRESPECTIVE OF THE FACT THAT CONDITIONS PRESCRIBED UNDER THE SAID SECTION A RE DULY FULFILLED BY THE ASSESSEE AND SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE IS A GENUINE AND BONAFIDE TRANSACTION'. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) - VI HAS FURTHER ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE LEVY OF INTEREST AND INITIATION OF PENALTY PROCEEDING BY ASSESSING OFFICER UNDER SECTI ON 271(1)(C) OF THE INCOME TAX ACT 1961. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) - VI HAS FURTHER ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE LEVY OF INTEREST BY ASSESSING OFFICER U/S 234B OF THE ACT. 6. IT IS THEREFORE PRAYED THAT THE ASSESSMENT FRAME D U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT MAY KINDLY BE QUASHED OR ALTERNATIVE LY THE ADDITIONS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) - VI MAY PLEASE BE DELETED. 7. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT P REJUDICE TO EACH OTHER. 5 ITA NO.6994/DEL/2017 THE APPELLANT PRAYS THAT IT MAY BE ALLOWED TO ADD, ALTER, OR FOREGO ANY OF THE GROUND AT THE TIME OF HEARING IN THE INTEREST OF PRINCIPLE OF NATURAL JUSTICE. 8. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET R EFERRED TO THE REASONS RECORDED FOR INITIATING PROCEEDINGS U/S 148, COPY O F WHICH IS PLACED AT PAGE 14- 15 OF THE PAPER BOOK. HE SUBMITTED THAT THE ASSESS ING OFFICER HAS NOT APPLIED HIS MIND AND THE REASONS HAVE BEEN RECORDED IN A ME CHANICAL MANNER. HE HAS SIMPLY MENTIONED THAT THE ASSESSEE COMPANY HAS TAKE N ACCOMMODATION ENTRIES IN LIEU OF CASH. THE NATURE OF THE INFORMATION AND THE CONTENT OF THE SAME HAS NOT BEEN CLEARLY MENTIONED IN THE REASONS ITSELF. EVEN THE EXACT NATURE OF ALLEGED ENTRIES IN THE SHAPE OF SHARE CAPITAL HAS N OT BEEN MENTIONED BY THE ASSESSING OFFICER. HE SUBMITTED THAT THERE IS NO T ANGIBLE MATERIAL OR STATEMENT OR ANNEXURE ON THE BASIS OF WHICH THE ASSESSING OFF ICER HAS FORMED THE VIEW THAT THERE IS AN ESCAPEMENT OF INCOME. SINCE THERE IS NO LIVE LINK BETWEEN THE INFORMATION AND FORMATION OF BELIEF BY THE ASSESSIN G OFFICER FOR ESCAPEMENT OF INCOME, THEREFORE, THE REASSESSMENT PROCEEDINGS INI TIATED BY THE ASSESSING OFFICER ARE INVALID. IT IS NOT UNDERSTOOD AS TO ON WHICH BASIS THE ASSESSING OFFICER HAS SAID THAT THE ASSESSEE COMPANY HAS TAKE N ACCOMMODATION ENTRIES. HE ACCORDINGLY SUBMITTED THAT SINCE THE ASSESSING O FFICER HAS NOT APPLIED HIS MIND AND THE REASONS RECORDED ARE ON THE BASIS OF B ORROWED SATISFACTION, THEREFORE, THE REASSESSMENT PROCEEDINGS SHOULD BE H ELD AS INVALID. FOR THE 6 ITA NO.6994/DEL/2017 ABOVE PROPOSITION, LD. COUNSEL FOR THE ASSESSEE REL IED ON THE FOLLOWING DECISIONS :- (I) SABH INFRASTRUCTURE LTD. VS. ACIT, W.P. (C) 135 7/2016. (II) MEENAKSHI OVERSEAS VS. PCIT, ITA NO.692/2016. (III) SIGNATURE HOTELS (P) LTD. VS. ITO, 338 ITR 3 40. (IV) CIT VS. INSECTICIDES INDIA LTD., 357 ITR 330. (V) CIT VS. G&G PHARMA INDIA LTD., ITA NO.545/2015 . (VI) NANCY SALES PVT. LTD. VS. ITO, ITA NO.4129/DE L/2017. 9. SO FAR AS MERIT OF THE CASE IS CONCERNED, HE SUB MITTED THAT THE ASSESSEE RECEIVED SHARE APPLICATION MONEY OF RS.5,00,000/- F ROM M/S FINAGE LEASING & FINANCE LIMITED AND RS.5,00,000/- FROM M/S SINGHAL SECURITIES (P) LTD.. TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE SHARE TRANSACTION THE ASSESSEE COMPANY FILED THE COPY OF THE CONFIRMATION , BANK STATEMENT AND INCOME TAX RETURN, AUDITED BALANCE SHEET, BOARD RES OLUTIONS, DIRECTORS REPORTS, ANNEXURE OF INVESTMENT ETC.. HE SUBMITTED THAT A P ERUSAL OF THE BALANCE SHEET OF THE INVESTOR COMPANY WOULD SHOW THAT BOTH THE COMPA NIES ARE HAVING NET WORTH OF RS.14.57 CRORES AND 10.50 CRORES RESPECTIVELY AN D THE INVESTMENTS IN THE SHARES OF THIS COMPANY HAS DULY BEEN REFLECTED IN T HEIR RESPECTIVE BALANCE SHEETS. HE ACCORDINGLY SUBMITTED THAT SINCE THE AS SESSEE COMPANY HAS FULLY DISCHARGED THE ONUS CAST ON IT WITH REGARD TO THE T HREE INGREDIENTS AS PER THE REQUIREMENT OF PROVISIONS OF SECTION 68 I.E. THE ID ENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS BY WAY OF FILING AL L THE REQUISITE DOCUMENTS, THEREFORE, THERE IS NO LEGAL OBLIGATION ON THE PART OF THE ASSESSEE TO PRODUCE THE 7 ITA NO.6994/DEL/2017 DIRECTORS OF THE INVESTOR COMPANY BEFORE THE ASSESS ING OFFICER. FOR THE ABOVE PROPOSITION, HE RELIED ON THE FOLLOWING DECISIONS : - (I) CIT VS. M/S GOODVIEW TRADING PVT. LTD., ITA 377 /2016. (II) CIT VS. GANGESHWARI METAL (P) LTD., 361 ITR 1 0. (III) PARBHATAM INVESTMENT PVT. LTD. VS. ACIT, ITA NO.2523/DEL/2015. (IV) ARECELI REALITY LTD. VS. ITO, ITA NO.6492/MUM /2016. (V) MOTI ADHESIVES PVT. LTD. VS. ITO, ITA NO.3133/ DEL/2018. 10. HE ACCORDINGLY SUBMITTED THAT THE REASSESSMENT PROCEEDINGS SHOULD BE QUASHED AND THE ADDITIONS MADE BY THE ASSESSING OFF ICER AND UPHELD BY THE LD. CIT(A) SHOULD BE DELETED. 11. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE LD. CIT(A). HE SUBMITTED THAT THE ASSESSING OFFICER IN THE INSTANT CASE HAS APPLIED HIS MIND BEFORE REOPENING OF THE CASE AND REASONS R ECORDED IN THE INSTANT CASE CANNOT BE CONSIDERED AS BORROWED SATISFACTION. HE SUBMITTED THAT THE VARIOUS DECISIONS RELIED BY THE LD. COUNSEL FOR THE ASSESSE E ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 12. SO FAR AS MERIT OF THE ADDITIONS IS CONCERNED, HE SUBMITTED THAT THE ASSESSEE FAILED TO PRODUCE THE DIRECTORS OF THE INV ESTOR COMPANY AND THE NOTICES ISSUED TO THEM WERE RETURNED UNSERVED. THE INSPECT OR WHO WAS DEPUTED TO SERVE THE NOTICE U/S 133(6) FOUND THAT THERE IS NO SUCH ADDRESS AS GIVEN BY THE ASSESSEE ITSELF. UNDER THESE CIRCUMSTANCES, THE ID ENTITY OF THE INVESTOR COMPANIES AND GENUINENESS OF THE TRANSACTIONS REMAI NED UNVERIFIED. THEREFORE, 8 ITA NO.6994/DEL/2017 MERELY BECAUSE SUCH INVESTOR COMPANIES ARE HAVING H UGE CAPITAL, THE SAME CANNOT BE A GROUND TO BELIEVE THE EXISTENCE OF THES E PAPER COMPANIES. THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS CAST ON I T ESPECIALLY WHEN THERE WAS SIMULTANEOUS DEPOSITS AND WITHDRAWALS OF MONEY IN T HE BANK ACCOUNT OF THE INVESTOR COMPANIES. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE LD. CIT(A) ON BOTH THE GROUNDS SHOULD BE UPHELD. 13. I FIND THE ASSESSING OFFICER WHILE REOPENING TH E ASSESSMENT HAS RECORDED THE FOLLOWING REASONS, COPY OF WHICH IS PLACED AT P AGE 14-15 OF THE PAPER BOOK :- REASONS RECORDED FOR INITIATING PROCEEDINGS U/S 14 8 OF THE I.T.ACT., 1961 IN THE CASE OF M/S RAKESH FOOTWEARS PVT. LTD A.Y.-2008-09 IT HAS BEEN REPORTED BY DIT, INVESTIGATION, UNIT-VI (2), NEW DELHI THAT DURING THE COURSE OF POST SEARCH INVESTIGATIONS AND WHILE EXAM INING THE SEIZED RECORDS IN THE CASE OF SH. SURENDRA KUMAR JAIN AND SH. VIRENDRA JA IN, IT HAS BEEN REVEALED THAT THE FOLLOWING COMPANY HAVE OBTAINED ACCOMMODATION ENTRI ES IN THE FORM OF SHARE CAPITAL/PREMIUM/LOAN DURING THE FINANCIAL YEAR 2007 -08 TOTALING AMOUNTS AS MENTIONED BELOW:- NAME OF THE BENEFICIARY COMPANY PAN AMOUNT INVOLVED (RS.) M/S RAKESH FOOTWEARS PVT. LTD. AACCR5712M 10,00,000 IN THE APPRAISAL REPORT OF PREPARED BY THE UNIT OF INVESTIGATION WING, IT HAS BEEN EVIDENTLY ESTABLISHED THAT SH. SURENDRA KUMAR JAIN AND SH. VIRENDRA JAIN ARE KNOWN ENTRY PROVIDERS AND ARE THE ACTUAL CONTROLLERS OF M ORE THAN 100 COMPANIES/PROPRIETARY FIRMS /PARTNERSHIP FIRMS. THE Y CONTROL THESE ENTITIES THROUGH VARIOUS PERSONS BY APPOINTING THEM AS DIRECTORS/PAR TNERS/PROPRIETORS APART FROM NOMINATING THEM AS AUTHORIZED SIGNATORIES FOR MAINT AINING THE BANK ACCOUNTS OF THESE ENTITIES BUT IN FACT ALL THESE PERSONS ACT ONLY AS THEIR STOOGES. IN VIEW OF THE ABOVE MENTIONED FACTS, IT IS EVIDENT LY CLEAR THAT THE UNDISCLOSED INCOME OF THIS BENEFICIARY COMPANY WHICH HAS BEEN INTRODUC ED BY THEM IN THE FORM OF SHARE CAPITAL/PREMIUM/LOAN HAS ESCAPED TAXATION. HENCE, I HAVE A REASON TO BELIEVE THAT INCOME OF RS. 10 LAKH AS PER TABLE IN PRECEDING PAR AGRAPHS HAS ESCAPED ASSESSMENT IN THE CASE OF ASSESSEE RELEVANT TO A.Y.2008-09. PERUSAL OF THE ENTIRE HAND WRITTEN CASH BOOKS AND C HEQUE BOOKS SEIZED FROM THE RESIDENCE OF SH. SURENDRA KUMAR JAIN SH. VIRENDRA J AIN, INVESTIGATION WING HAS 9 ITA NO.6994/DEL/2017 FOUND SEVERAL CHEQUES ISSUED IN THE NAME OF DIFFERE NT COMPANIES/ENTITIES/ PERSONS. DETAILS OF THESE COMPANIES/ENTITIES/PERSONS AND CHE QUE/PAY ORDER ISSUED IN THE NAME OF THESE COMPANIES/ENTITIES/PERSONS HAVE BEEN PROVI DED BY THE INVESTIGATION WING IN THE DETAILED REPORT WITH ANNEXURE(S). THE INFORMATI ON RELEVANT TO ABOVE ASSESSEE WITH THE RELEVANT PAGES(S) OF SEIZED ANNEXURE(S) IS AS U NDER:- FROM TO BANK CHEQUE NO. CHEQUE DATE AMOUNT THROUGH FINAGE LEASE & FINANCE INDIA LTD. RAKESH FOOTWEARS PVT. LTD. UTI 001410 29.06.2007 5,00,000 SATISH GOYAL SINGHAL SECURITIES PVT. LTD. RAKESH FOOTWEARS PVT. LTD. UTI 001551 29.06.2007 5,00,000 SATISH GOYAL EXTENSIVE ENQUIRIES HAVE BEEN MADE TO TRACE THE NAM E OF THE BENEFICIARIES BY OBTAINING DETAILS FROM THE BANKS AND VERIFICATION O F BOOKS OF ACCOUNTS OF THE ACCOMMODATION PROVIDER COMPANY MAINTAINED IN TALLY FORMAT IN THE SEIZED COMPUTER HARD DISCS. AFTER VERIFICATION, HELP OF THE ITDMS A ND ITD PROGRAMME OF THE DEPARTMENT AS WELL AS WEBSITE OF THE MINISTRY OF CO RPORATE HAS BEEN TAKEN TO IDENTIFY THE EXACT NAMES, PANS AND JURISDICTION OF COMPANIES /ENTITIES/PERSONS PERTAINING TO VARIOUS CIT CHARGES. IN THE APPRAISAL REPORT PREPARED BY THE UNIT OF INV ESTIGATION WING, IT HAS BEEN EVIDENTLY ESTABLISHED THAT SH. SURENDRA KUMAR JAIN AND SH. VIRENDRA JAIN ARE KNOWN ENTRY PROVIDERS AND ARE THE ACTUAL CONTROLLERS OF M ORE THAN 100 COMPANIES/PROPRIETARY FIRMS /PARTNERSHIP FIRMS. THE Y CONTROL THESE ENTITIES THROUGH VARIOUS PERSONS BY APPOINTING THEM AS DIRECTORS/PAR TNERS/PROPRIETORS APART FROM NOMINATING THEM AS AUTHORIZED SIGNATORIES FOR MAINT AINING THE BANK ACCOUNTS OF THESE ENTITIES BUT IN FACT ALL THESE PERSONS ACT ONLY AS THEIR STOOGES. IN VIEW OF THE ABOVE MENTIONED FACTS, IT IS EVIDENT LY CLEAR THAT THE UNDISCLOSED INCOME OF THIS BENEFICIARY COMPANY WHICH HAS BEEN INTRODUC ED BY THEM IN THE FORM OF SHARE CAPITAL/PREMIUM/LOAN HAS ESCAPED TAXATION. HENCE, I HAVE A REASON TO BELIEVE THAT INCOME OF RS. 10 LAKH AS PER TABLE IN PRECEDING PAR AGRAPHS HAS ESCAPED ASSESSMENT IN THE CASE OF ASSESSEE RELEVANT TO AY. 2008-09. AS PER RECORDS OF THIS WARD, NO SECURITY ASSESSMENT WAS DONE IN THIS CASE OF THE A.Y. 2008-09 HENCE IF APPROVED, IN TERMS OF PROVISIONS O F SEC. 151 (2), SANCTION MAY KINDLY BE ACCORDED FOR ISSUE OF NOTICE UNDER SEC. 148 FOR AY. 2008-09 IN THE CASE OF ASSESSEE COMPANY. 14. A PERUSAL OF THE REASONS RECORDED SHOWS THAT TH E ASSESSING OFFICER HAS APPLIED HIS MIND IN THE INSTANT CASE AND IT IS NOT A MERE REPRODUCTION OF THE LETTER FROM THE INVESTIGATION WING. THEREFORE, THE VARIOU S DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE WHICH RELATE TO REOPEN ING OF THE CASE ON THE BASIS OF 10 ITA NO.6994/DEL/2017 REPORT OF THE INVESTIGATION WING AND NON-APPLICATIO N OF MIND BY THE ASSESSING OFFICER ARE NOT APPLICABLE. IN VIEW OF THE ABOVE A ND IN VIEW OF DETAILED REASONING GIVEN BY THE LD. CIT(A) WHILE UPHOLDING S UCH REOPENING, THE GROUND RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF THE REASSESSMENT PROCEEDINGS IS DISMISSED. 15. SO FAR AS MERIT OF THE ADDITIONS IS CONCERNED, IT IS AN ADMITTED FACT THAT THE NOTICES ISSUE BY THE ASSESSING OFFICER U/S 133(6) T O THE PARTIES FROM WHOM SHARE APPLICATION MONEY WAS RECEIVED WERE RETURNED UNSERV ED AND NO REPLY WAS RECEIVED FROM THEM. FOR THE PURPOSE OF ACCEPTING A NY LOAN/CASH CREDIT/SHARE APPLICATION MONEY ETC. AS GENUINE, THE ASSESSEE HAS TO FULFILL THE THREE INGREDIENTS AS PER THE TERMS OF SECTION 68 I.E. THE IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITOR/ SHARE APPLICANT/GENUINENESS O F THE TRANSACTION. IN THE INSTANT CASE, THE VERY IDENTITY OF THE COMPANIES RE MAINED UNVERIFIED IN ABSENCE OF PRODUCTION OF THE DIRECTORS AND NON-SERVICE OF T HE NOTICE U/S 133(6). THE REPORT OF THE INSPECTOR THAT THERE WAS NO SUCH ADDR ESS AS PER THE ADDRESS GIVEN BY THE ASSESSEE ITSELF ALSO RAISES DOUBT REGARDING THE IDENTITY OF THE PERSON AND THEREIN CREDITWORTHINESS AND GENUINENESS OF THE TRA NSACTIONS. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTERE ST OF JUSTICE, I DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFF ICER WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HI S CASE BY PROVING THE IDENTITY AND CAPACITY OF THE LOAN CREDITORS AND THE GENUINEN ESS OF THE TRANSACTIONS TO THE 11 ITA NO.6994/DEL/2017 SATISFACTION OF THE ASSESSING OFFICER. THE ASSESSI NG OFFICER SHALL DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROU ND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST JULY, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 31-07-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI