M/S. MODERATE CREDIT CORPORATION PVT. LTD.,WEST BENGAL V. DCIT, NEW DELHI

CO 191/DEL/2018

AI Insights

The case involves multiple appeals and cross objections filed by the Deputy Commissioner of Income Tax against Green Mark Infra Limited and Moderate Credit Corporation Pvt. Ltd., concerning various assessment years. The primary issues revolved around the deletion of additions made by the AO regarding unexplained deposits and liabilities, and the validity of the reassessment orders. The Tribunal examined the procedural and substantive aspects of the assessments, including the application of sections 143(3), 147, and 153C of the Income Tax Act. The Tribunal's decision emphasized the need for assessees to substantiate their claims with adequate evidence and the legal standing of reopening assessments based on new information.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 41810 (ITAT-DELHI)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Other Referred Cases: ACIT vs. M.N. Rajaraman, CIT vs Meghmani Organics Ltd., PCIT Vs. Paramount Communication (P) Ltd, Aradhna Estate P Ltd Vs. DCIT, Pushpak Bullion P Ltd s. DCIT, Ankit Financial Services Ltd Vs. DCIT, Aaspas Multimedia Ltd Vs. DCIT, Ankit Agrochem P Ltd Vs. JCIT, Krishna Developers & Company, Abhisar Buildwell, Raymond Woollen Mills Ltd, Rajesh Jhaveri Stock Brokers (P.) Ltd, Shri CIT Vs. DK Garg, Seema Jain Vs. ACIT, S. G. Portfolio Pvt. Ltd., Sam Portfolio Pvt. Ltd., Sushre Securities Pvt. Ltd., M/s Jiwan Realtors Ltd., M/s Ganpati Fincap Services Pvt. Ltd., M/s SAM Portfolio Pvt. Ltd., M/s Moderate Credit Corporations Pvt. Ltd., M/s Chotti Leasing & Finance Pvt. Ltd., M/s S. G. Portfolio Pvt. Ltd., M/s Sushre Securities Pvt. Ltd., M/s Shrey Infradevelopers Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAYA CHAUDHARY
• Assessee Lawyers: SOMIL AGARWAL; PROVIDING ACCOMMODATION ENTRIES. HE THEREFORE
• Keywords: Set aside; Additional evidence; Reassessment proceedings; Unexplained expenditure; Reopening of assessment; Accommodation entries; Opportunity of cross examination; Tangible material; Bogus
• Section: 147; 148; 119; 143(1); 132; 153A; 68; 131; 153C; 133A; 191; 264

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER & SH. AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No. 6206/Del/2015: Assessment Year: 2007-08 ITA No. 6207/Del/2015: Assessment Year: 2008-09 ITA No. 6208/Del/2015: Assessment Year: 2009-10 ITA No. 6209/Del/2015: Assessment Year: 2010-11 ITA No. 6210/Del/2015: Assessment Year: 2012-13 Deputy Commissioner of Income Tax, Central Circle-18, Income Tax Office, ARA Centre, Jhandewala, New Delhi Vs. Green Mark Infra Limited, 5/5761, Dev Nagar, Karol Bagh, Near Yes Bank ATM, New Delhi (APPELLANT) (RESPONDENT) PAN No. AAACJ3650Q CO No. 398/Del/2015: Assessment Year: 2007-08 CO No. 399/Del/2015: Assessment Year: 2008-09 CO No. 400/Del/2015: Assessment Year: 2009-10 CO No. 401/Del/2015: Assessment Year: 2010-11 (Arising out of ITA No.6206, 6207, 6208,6209/Del/2015) Green Mark Infra Limited, 5/5761, Dev Nagar, Karol Bagh Near Yes Bank ATM, New Delhi Vs Deputy Commissioner of Income Tax, Central Circle-18, Income Tax Office, ARA Centre, Jhandewala, New Delhi (APPELLANT) (RESPONDENT) PAN No. AAACJ3650Q ITA No. 6221/Del/2015: Assessment Year: 2007-08 ITA No. 6222/Del/2015: Assessment Year: 2008-09 ITA No. 6223/Del/2015: Assessment Year: 2009-10 ITA No. 6224/Del/2015: Assessment Year: 2010-11 Deputy Commissioner of Income Tax, Central Circle-18, Income Tax Office, ARA Centre, Jhandewala, New Delhi Vs. Moderate Credit Corporation Pvt. Limited 54/5, Swami Vevekananda Road, Santagachi, Howrah, WB PAN: AAACS0309P ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 2 CO No. 191/Del/2018: Assessment Year: 2007-08 CO No. 192/Del/2018: Assessment Year: 2008-09 CO No. 193/Del/2018: Assessment Year: 2009-10 CO No. 194/Del/2018: Assessment Year: 2010-11 (Arising out of ITA No. 6221, 6222, 6223 & 6224/Del/2015) Moderate Credit Corporation Private Limited C/o M/s RRA Tax India, D-28, South Extension, Part-I, New Delhi PAN: AAACS0309P Vs. Deputy Commissioner of Income Tax, Central Circle-18, Income Tax Office, ARA Centre, Jhandewala, New Delhi (APPELLANT) (RESPONDENT) PAN No. AAACS0309P Assessee by: Sh. Somil Agarwal, Advocate, Sh. Deepesh Garg, Advocate Revenue by: Ms. Jaya Chaudhary, CIT-DR Date of Hearing 19/12/2024 Date of Pronouncement 17/03/2025 ORDER Per Bench: All the above-captioned appeals of the above-mentioned Assessment Years (hereinafter, the ‘AY’) filed by the Revenue and Cross Objections (hereinafter, the ‘CO’) filed by the above-mentioned assessees contain common grounds and facts; therefore, these appeals and COs were heard together and these are being disposed off by this common order. 2. Since similar grounds have been taken in all the above mentioned 09 appeals and 07 COs. Therefore, the appeal; ITA No. 6206/Del/2015 and CO No. 398/Del/2015 of Green Mark Infra Limited of AY 2007-08 are taken as lead cases. ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 3 3. Grounds raised by the Revenue in appeal of Green Mark Infra Ltd. of AY 2007-08, ITA No. 6206/Del/2015, read as under: “i. That the commissioner of Income Tax (Appeals) has erred in law and on facts of the case in deleting Rs.3,95,32,500/- which was added to the income of the assessee on account of as unexplained deposits. ii. That the commissioner of Income Tax (Appeals) has erred in law and on facts of the case in deleting Rs.15,35,000/- which was added to the income of the assessee on account of as unexplained liabilities. iii. That the commissioner of Income Tax (Appeals) has erred in law and on facts in relying on the submissions filed by the assessee which were inadequate, incomplete, not genuine, not reliable and already rejected by AO during the assessment stage. iv. (a) The order of the CIT(Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 3.1 Grounds raised in the CO of Green Mark Infra Ltd. of AY 2007-08, CO No. 398/Del/2015, read as under: “1. That having regard to the facts and circumstances of the case, ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing impugned reassessment order and that too without assuming jurisdiction as per law and without complying the mandatory conditions of section 147 to 151 of the Act. 2. That in any case and in any view of the matter, action of ld. CIT(A) in confirming the action of Ld. AO in framing impugned reassessment order u/s 147/43(3) is beyond jurisdiction, ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 4 bad in law and against the facts and circumstances of the case. 3. In any view of the matter and in any case, impugned assessment order could not have been passed under the law, more so when original assessment was annulled.” 4. That the cross objector craves the leave to add, amend, modify, delete any of the ground(s) of cross objection before or at the time of hearing.” 3.2 Grounds raised by the Revenue in the appeal of Moderate Credit Corp. Pvt. Ltd. of AY 2007-08, ITA No. 6221/Del/2015, read as under: - “1. That the commissioner of Income Tax (Appeals) has erred in law and on facts of the case in deleting Rs.41,56,21,535/- which were added by the assessing officer to the income of the assessee on account of as unexplained deposits. 2. That the commissioner of Income Tax (Appeals) has erred in law and on facts of the case in ignoring that the submissions made by the assessee during the assessment proceedings were incomplete and inadequate and that they were not authentic and weren't able to prove creditworthiness of the parties from which investments/deposits were made. 3. That the commissioner of Income Tax (Appeals) has erred in law and in facts in relying on the submissions filed by the assessee which were inadequate, incomplete, not genuine, not reliable and already rejected by AO during assessment stage. 4. (a) The order of the CIT(Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 3.3 Grounds raised in the CO of Moderate Credit Corp. Pvt. Ltd. of AY 2007-08, CO No. 191/Del/2018, read as under: - “1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned reassessment order passed by Ld. AO u/s 147/143(3), more so when ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 5 the same is passed without complying with the mandatory conditions of section 147 to 151 of the Act. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned reassessment order passed by Ld. AO u/s 147/143(3) inter alia on the following grounds: -  That there was no material on the basis of which the belief of escapement of income was formed.  That impugned reasons were recorded without independent and judicious application of mind of Ld. AO.  That the impugned case has been reopened without obtaining valid approval u/s 151 as per law.  That the reopening is barred by limitation as there is no allegation in the reason recorded about failure on the part of assessee in disclosing all material facts. 3. That in any case and in any view of the matter, action of Ld. CIT(A) in not quashing the impugned reassessment order framed by Ld. AO u/s 147/143(3), is beyond jurisdiction, bad in law and against the facts and circumstances of the case. 4. That the cross objector craves the leave to add, amend, modify, delete any of the ground(s) of cross objection before or at the time of hearing.” 4. In nutshell, two issues raised by the Revenue in these appeals are as under: (i) Deletion of additions made by the Assessing Officer (hereinafter, the ‘AO’) vis-à-vis relief allowed by the Commissioner of Income Tax (Appeals) [hereinafter, the ‘CIT(A)’]. (ii) Finding of the CIT(A) being based on inadequate, incomplete, non-genuine & non-reliable submissions of the assessee. 4.1 COs of these assessees challenge the finding of the Ld. CIT(A) upholding reopening of the assessments. Out of the above- ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 6 mentioned appeals, the ITA No. 6210/Del/2015 in the case of Green Mark Infra Ltd. of AY 2012-13 is different than the remaining eight appeals. This case will therefore, will be dealt in separately. 5. The brief facts relevant for deciding the above-mentioned appeals are that the above-mentioned assessees filed their original Income Tax Returns (hereinafter, the ‘ITR’) of the above-mentioned AYs on various dates, which were duly processed under section 143(1) of the Income Tax Act, 1961 (hereinafter ‘the Act’). Later on, the Assessing Officer (hereinafter, the ‘AO’) received the information that Shri Aseem Kumar Gupta, FCA, Director of the above-mentioned assessees, in the statement recorded during the course of survey operation on 26.03.2010 under section 133A of the Act, had specifically admitted that the above-mentioned assessees were engaged in providing accommodation entries and these assessees had provided accommodation entries to various persons during the above-mentioned years. It was categorically admitted by Shri Aseem Kumar Gupta (Director of the above-mentioned assessees) that the above-mentioned assessees had provided accommodation entries to Jiwan Realtors Ltd., Ganpati Fincap Services Pvt. Ltd. SAM Portfolio Pvt. Ltd., Moderate Credit Corp. Pvt. Ltd., S. G. Portfolio Pvt. Ltd., Sushre Securities Pvt. Ltd., Shrey Infradevelopers Pvt. Ltd., etc. 5.1 Based on the above information, the AO initiated assessment proceedings in the above-mentioned assessees, under section 153C of the Act. Consequentially, he completed assessments of the above-mentioned ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 7 assessees under section 153C of the Act by adding certain sums as accommodation entries on protective basis. Aggrieved, the above-mentioned assessees filed petitions, under section 264 of the Act, before the Commissioner of Income Tax, Central-II, New Delhi, who disposed of their petitions in their favour vide order dated 20.03.2014 by holding that since the said information had not been received by the AO from the Assessing Officer(s) of any searched person; therefore, the assessments completed under section 153C of the Act were not maintainable. Consequentially, the Commissioner of Income Tax, Central-II, New Delhi annulled all assessments, completed under section 153C of the Act, of the above- mentioned assessees. The relevant portion of the order passed under section 264 of the Act by the Commissioner of Income Tax, Central-II, New Delhi reads as under: - \"Jurisdiction u/s 153C for assessing 6 years preceding the year in which search was initiated can be invoked only when impugned documents are seized u/s 132 or requisitioned u/s 132A. It cannot be invoked in the case of impounding of documents u/s 133A. The very foundation for instituting the proceedings u/s 153C is missing. It has been held by ITAT. Chennai in the case of ACIT vs. M.N. Rajaraman (2010) 5 ITR (TRIB) 261 Chennai and High Court of Gujarat in the case of CIT vs Meghmani Organics Ltd. (2014) 221 Taxman 25 (Guj.) that where the very foundation for instituting the proceedings by A.O. was missing, the consequential actions and orders must fail and that assessment made pursuant to such proceedings would have to be annulled. Since in the present cases there is no proper assumption of jurisdiction, the assessments made pursuant to such proceedings are annulled herewith. No submissions have been filed on other grounds. However, since the assessment is being treated as null and void, I do not find it necessary to examine other issues raised by the assessee as these grounds have become infructuous.\" ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 8 5.2 Thereafter, the AO initiated proceedings under section 148 of the Act in these cases. Consequential reopened assessments were completed taxing accommodation entries on substantive basis as against protective assessments under section 153C of the Act. Aggrieved, the above-mentioned assessees filed appeals before the CIT(A) and succeeded on quantum additions but not on legal & technical grounds. 6. Before us, the Ld. CIT-DR argued vehemently for setting aside of impugned orders and revival of the assessment orders in these cases. She questioned the validity of orders of the Ld. CIT(A) on merits. She submitted that the Ld. CIT(A) had not decided issues with proper reasoned findings. She drew our attention to various paragraphs of impugned orders to buttress her arguments that these orders could not be said to be speaking orders. The reasons for agreeing with assessees’ submissions particularly when neither Shri Aseem Kumar Gupta (Director of the above-mentioned assessees) retracted with his statement recorded during the survey operation wherein he categorically admitted that the above-mentioned assessees had provided accommodation entries to Jiwan Realtors Ltd., Ganpati Fincap Services Pvt. Ltd. SAM Portfolio Pvt. Ltd., Moderate Credit Corp. Pvt. Ltd., S. G. Portfolio Pvt. Ltd., Sushre Securities Pvt. Ltd., Shrey Infradevelopers Pvt. Ltd., etc. nor these assessees established the creditworthiness and genuineness of transactions/credits recorded in their books of accounts. The Ld. CIT(A)’s reasoning in few lines for agreeing with submissions of these assessees without verifying it demonstrated that impugned orders deserved to be set aside as these could not meet the end ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 9 of justice as there was no detailed reasonings for agreeing with the assessees’ submissions. 6.1 The Ld. CIT-DR, quoting decisions of the Hon’ble Supreme Court in the case of Krishna Developers & Company (2018) 91 taxman.com 306 and Abhisar Buildwell (2023) 454 ITR 212 (SC), submitted that the cases wherein there was no reference by the AO of the searched person could be reopened under section 148 of the Act after recording the satisfaction to do so. She contended that the Hon’ble Supreme Court, in the case of Krishna Developers & Company, had held that the reopening on the basis of very same reasons on which the AO initially desired to make additions but failed, was justified, if the original assessment was declared as invalid as having been completed without service of the valid notice on the assessee. The initial assessments in these cases completed under section 153C of the Act wherein additions done on protective basis were annulled due to improper assumption of jurisdiction by the AO. Thus, the finding in annulled orders did not exist thereafter as the same had attained finality as these assessees did not challenge orders passed under section 264 of the Act. Therefore, any finding in the annulled orders passed under section 153C of the Act, in these cases, had no relevance. 6.2 The Ld. CIT-DR, placing reliance on the decision of the Hon’ble Supreme Court in the case of Raymond Woollen Mills Ltd. 236 ITR 34, drew our attention to the ratio laid down by the Hon’ble Supreme Court that the sufficiency or correctness of the material is not a thing to be considered at ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 10 the stage of reopening the assessment. It was held in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the AO could reopen the case. Further, she placing reliance on the decision of the Hon’ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P.) Ltd.; 291 ITR 500, submitted that so long as the conditions of section 147 of the Act were fulfilled, the AO was justified to initiate proceedings under section 147 of the Act. 7. On the other hand, the Ld. Counsel submitted that assessees, vide COs, had challenged the validity of reopening of assessments; inter alia, valid approval and jurisdiction. It was submitted that the cases in hands were squarely covered by the decisions of the Coordinate Bench of the Tribunal in the cases of (i) S. G. Portfolio Pvt. Ltd. in ITA No.403/Del/2015), (ii) Sam Portfolio Pvt. Ltd. in ITA No.6218/Del/2015 and (iii) Sushre Securities Pvt. Ltd. in ITA No.6225 & 6229/Del/2015. Accordingly, he contended that these appeals deserved dismissal as the proceedings initiated under section 148 of the Act were not maintainable. 8. In rejoinder, the Ld. CIT-DR, drawing our attention to the order dated 26.10.2018 of this Tribunal in the case of the assessee (Green Mark Infra Ltd.) in ITA No.6206 to 6208/Del/2015 for the AYs 2007-08 to 2009-10, submitted that the Revenue had succeeded in these appeals. However, assessees’ COs to appeals in ITA No.6206 to 6208/Del/2015 were dismissed. Further, the Ld. CIT-DR contended that since these assessees ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 11 had failed to bring any material on the records to contradict the findings of the Tribunal in the case of the assessee in ITA No.6206 to 6208/Del/2015; therefore, they had no case and thus, the above captioned COs had to be dismissed and the Revenue’s appeals had to be allowed. Further, it was brought to our notice by the Ld. CIT-DR that the Coordinate Bench in case of S. G. Portfolio Pvt. Ltd. in ITA No.403/Del/2015), Sam Portfolio Pvt. Ltd. in ITA No.6218/Del/2015 and Sushre Securities Pvt. Ltd. in ITA No.6225 & 6229/Del/2015 had not taken cognizance of the finding of this Tribunal in the case of Green Mark Infra Ltd. in ITA No.6206 to 6208/Del/2015 and therefore, this Tribunal had erred in holding that reopening was not valid. The Ld. CIT-DR vehemently argued these cases by distinguishing this Tribunal’s decision in cases of S. G. Portfolio Pvt. Ltd. (supra), Sam Portfolio Pvt. Ltd. (supra) and Sushre Securities Pvt. Ltd. (supra). 9. We have heard both parties and have perused the material available on record. We find merit in the arguments of the Ld. CIT-DR. The relevant part of the Tribunal order, in the case of the assessee (Green Mark Infra Ltd.) in the ITA No.6206 to 6208/Del/2015, reads as under: “14. Coming to the appeal of the revenue where ground No. 1 and 2 are with respect to the addition of Rs. 393532500/- and Rs. 1535000/- the ld CIT DR vehemently submitted that it is responsibility of the person who deposits money in his bank account to show that from whom the money is received and his identity, creditworthiness and genuineness of the transaction is required to be proved by the assessee. He stated that assessee has failed to show that from whom the money has been received and whose money is deposited in the bank account. Unless, assessee shows that, addition in the hands of the assessee cannot be deleted. He submitted that merely filing the detail without confirmation ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 12 of the parties, assessee cannot get away with the addition. He further stated that initial onus u/s 68 of the Act lies upon the assessee. If the AO is not satisfied with the same then only he is required to make further enquiry and then only the onus shifts on the ld Assessing Officer. In the present case the assessee has not discharged the initial onus therefore, the ld CIT(A) has wrongly deleted the addition. He vehemently referred to para No. 10 of the order and stated that the whole addition has been deleted without any application of mind by the ld CIT(A). He further referred to para No. 11 of the order with respect to the addition of Rs. 1535000/- and stated that the addition is deleted by the ld CIT(A) without independently applying her mind but simply copying the finding of para No. 10 in para No. 12 and deleted the addition. He was of the view that unless the assessee shows the necessary ingredients u/s 68 he cannot get away with the addition. He further stated that Shri Asheem Gupta as stated by the ld AO in assessment order is the accommodation entry provider who appeared before the ld CIT(A) also. Even before the ld CIT(A) no information was provided. He further submitted that the ld CIT(A) has held that the details of loan given to the parties is provided by the assessee along with the details of interest received and the principal amount. He stated that in case of entry operator the loans outstanding in the books of the appellant company is the real beneficiary of the accommodation entry and tax can be recovered from them u/s 226(3) of the Act and further the ld CIT(A) even did not care to even know that what is the commission charged by the entry operator assessee by providing accommodation entries. He therefore, submitted that the ld CIT(A) has deleted the addition without applying the law to the facts of the case. 15. The ld DR relied upon the following decisions:- i. PCIT Vs. Paramount Communication (P) Ltd (2017-TIOL-253- HON'BLE SUPREME COURT -IT) ii. PCIT Vs. Paramount Communication (P) Ltd (2017) 79 taxmann.com 409 (Delhi) 392 ITR 444. iii. Aradhna Estate P Ltd Vs. DCIT (2018) 91 taxmann.com 119 iv. Pushpak Bullion P Ltd s. DCIT 85 taxmann.com 84 v. Ankit Financial Services Ltd Vs. DCIT 78 taxmann.com 58 vi. Aaspas Multimedia Ltd Vs. DCIT 83 taxmann.com 82 vii. Ankit Agrochem P Ltd Vs. JCIT (2018) 89 taxmann.com 45 16. He further referred the decision of the Hon'ble Delhi High Court in case of Shri CIT Vs. DK Garg in 404 ITR 757 to state that each debit and credit is required to be explained by the assessee. He further referred to ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 13 decision of the Hon'ble Delhi High Court in case of Seema Jain Vs. ACIT 406 ITR 411 wherein, taxation of credit as income of assessee is justified. In view of this he submitted that the order passed by the ld CIT(A) required to be vacated. 17. He further referred to the decision of the Shri Raj Kumar Chawla Vs ACIT, New Delhi dated 26.09.2018 wherein, the issue with respect to the accommodation entry by Mr Asheem Gupta was discussed. He referred to para No. 11 of that order and stated that in the present case there is no opportunity of cross examination of Shri Asheem Kumar Gupta is required Shri Asheem Kumar Gupta himself appeared before the ld CIT(A) and at no stage he refuted his own statement. Further, before the Assessing Officer assessee has not uttered a word about the cross examination. 18. He further referred to the decision of the coordinate bench in ITA No. 2973/Del/2014 dated 30.01.2018 wherein, the assessee himself have confessed a surrender of Rs. 55 lakhs on account of accommodation entry received from Shri Asheem Kumar Gupta and further the penalty of Rs. 1699500/- was confirmed. He therefore, submitted that now there is no doubt that Mr. Asheem Kumar Gupta is bogus accommodation entry provider and unless he gives the names of beneficiary of the appellant company the addition cannot be deleted in the hands of the company. 19. On the issue of reopening of the assessment in the cross objection of the assessee he relied upon the orders of the ld CIT(A) wherein, the reopening is upheld. 20. Despite notice none appeared on behalf of the assessee and therefore, the issue is decided on the merits of the case as per information available on record. 21. We have carefully considered the rival contentions and also perused the orders of the lower authorities. The brief facts of the case shows that assessee company is part of one of the companies operated by Shri Asheem Kumar Gupta for providing accommodation entries. During the course of survey, statement u/s 133A of the Act was recorded of Mr. Asheem Kumar Gupta who is director in 8 companies which was engaged in providing accommodation entries as under:- a) M/s Jiwan Realtors Ltd., ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 14 b) M/s Ganpati Fincap Services Pvt. Ltd., c) M/s SAM Portfolio Pvt. Ltd. d) M/s Moderate Credit Corporations Pvt. Ltd., e) M/s Chotti Leasing & Finance Pvt. Ltd., f) M/s S. G. Portfolio Pvt. Ltd., g) M/s Sushre Securities Pvt. Ltd. and h) M/s Shrey Infradevelopers Pvt. Ltd. 22. On the basis of the above information the assessment of the assessee was reopened u/s 147 of the Act . Earlier in 153C assessment the additions were made in the hands of the assessee on protective basis and on substantive basis was made in the hands of Mr. Manoj Kumar who worked with Shri Asheem Gupta, a Chartered Accountant who was engaged in providing accommodation entries. The protective addition was made on account of misrepresentation made by Shri Asheem Kumar Gupta in his statement recorded vide question No. 5 during the course of survey. He mis-represented the fact that assessment in case of Shri Manoj Kumar has been assessed on this income on substantive basis whereas, in fact he was assessed on protective basis. The assessee has claimed before the ld CIT(A) with respect to the reopening of the assessment that the provision to section 147 to 151 of the Act are not complied with, however, no arguments were raised before the ld CIT(A) with evidences. However, it was argued that there was no fresh tangible material for reopening of the assessment was available with the ld AO but in fact the statement of Shri Asheem Kumar Gupta who is a director of the company that he has made the statement that he is providing accommodation entry is a tangible material for reopening of the assessment. It is the statement of the director of assessee company which was never retracted and in fact by arguing before lower authorities. So in turn, it was his tacit approval of his statement. Hon'ble Bombay High Court in Pebbal Investment and Finance Ltd Vs. ITO has held that statement u/s 133A of the Act can be used for the purpose of making an assessment in the hands of the assessee. Further, when Shri Asheem Kumar Gupta has never retracted his statement, as he appeared before the ld CIT(A), to state that his statement was incorrect. The reasons were provided to the assessee however, no objections were ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 15 raised before the ld Assessing Officer. With respect to the sanction of the issue of the notice also no infirmity was shown before the ld CIT(A). In view of this, we do not find any infirmity in the order of the ld CIT(A) in confirming the reopening of the assessment made by the ld AO. In view of this the cross objection filed by the assessee is dismissed. 23. On the issue of the merits of the addition, it is apparent that assessee has merely submitted the summary and narrations of the debit and credit entries of the bank, however, it was not shown that from whom the assessee has received the above sum and to whom it has been paid along with the purposes. The ld AO emphatically stated that the assessee has failed to provide explanation with respect to the nature and source of the deposits reflected in the bank account. There is no evidence that assessee has submitted confirmation of those parties. Even before the ld CIT(A) it was not rebutted that assessee is not an accommodation entry provider. Further, in absence of preliminary discharge of initial onus by the assessee of the sums credited in the books, of the assessee, the ld AO is not duty bound to issue any summons u/s 131 of the Act. It is also apparent that when assessee has not provided the complete details of the persons from whom the sums were received, it is not correct to say that the ld AO should have issued summons to those parties. The ld CIT(A) has deleted the addition for the reason that assessee filed details of credit and debit entries of the bank account and also the loans paid. The ld CIT(A) has blindfoldedly accepted the explanation of the assessee without giving any credence to the fact of the case that assessee company is an accommodation entry provider and unless the real beneficiaries are named by it, it cannot escape the taxation of the sum credited in its books of account. Further, in case of accommodation entry provided by the assessee, nature of such accommodation entries were also not shown before lower authorities by assessee. As assessee's director has confessed that assessee company is providing accommodation entries, then, CIT(A) even did not care to verify that who are the beneficiaries and what is the amount of commission received by assessee from the beneficiaries from providing accommodation entries. Without even calling for all these details, the ld CIT(A) has deleted the addition. In view of this, we reverse the finding of the ld CIT(A) and confirm the order of the ld Assessing Officer with respect to the addition of Rs. 39532500/- for Assessment Year 2007-08. Accordingly, appeal of the ld Assessing Officer and its ground Nos. 1 is allowed accordingly. 24. With respect to ground No. 2 the ld AO noted that assessee has shown current liabilities of Rs. 1535000/- but has not given the ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 16 confirmation of those parties. The assessee submitted before the ld CIT(A) that it received sum of Rs. 14 lakhs from Shreys Infradevelopers Pvt. Ltd and San Portfolio Pvt Ltd of Rs. 135000/-, however, no confirmation was provided of these parties. In view of this the addition has been made by the ld AO. The ld CIT(A) deleted the addition without even asking for the confirmation. We find that unless the assessee submits the confirmation of these parties the addition cannot be deleted. In view of this we reverse the finding of the ld CIT(A) and restore the order of the ld AO. Ground No. 2 of the appeal of the revenue is allowed. 25. In view of our above finding we allow ITA No. 6206/Del/2015 filed by the AO and dismiss the Cross objection No. 398/Del/2015 filed by the assessee. 26. The facts of the case for AY 2008-09 and 2009-10 are similar except that for Assessment Year 2008-09 the ld Assessing Officer made the addition of Rs. 68531671/- on account of unexplained deposit and Rs. 435320/- on account of unexplained profit on sale of investments. For Assessment Year 2009-10 the addition is made on account of unexplained deposit of Rs. 121033910/- and on account of unexplained profit on sale of shares of Rs. 310500/-. For Assessment Year 2009-10 the ld Assessing Officer over and above the unexplained deposit found that the assessee company has shown investment amounting to Rs. 35.05 lakhs however, no profit or loss on sale of investment was shown and therefore, the ld Assessing Officer made addition of 10% of the sale price. Similarly, for Assessment Year 2008-09 the ld Assessing Officer noted that investment of Rs. 4353208/- were shown, however no profit and loss thereon has disclosed hence, 10% addition has been made. The ld CIT(A) for both the years deleted the addition. before the ld CIT(A) reopening for both the years were challenged which were upheld whereas on the quantum the addition was deleted and therefore, both the parties are in appeal before us. 27. The assessee in CO for both the years challenged the reopnieng which has been dealt with by us in case of the assessee for Assessment Year 2007-08. In that year we have upheld the action of the AO in reopening the assessment and therefore, for the similar reasons we dismiss both the cross objection for both the years filed by the assessee. 28. The revenue has challenged the deletion of the addition by the ld CIT(A) on account of unexplained deposits. We have already confirmed the order of the ld Assessing Officer reversing the order of the ld CIT(A) ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 17 for Assessment Year 2007-08. For the similar reasons we also confirmed the addition on account of unexplained deposit for Assessment Year 2008-09 and 2009-10 in the hands of the assessee. Accordingly, ground No. 1 of the appeal for Assessment Year 2008-09 and 2009-10 of the ld AO is allowed. 29. Ground No. 2 of the appeal for both the years is on account of estimated profit on sale of investment by the assessee. The above addition has been made by the ld Assessing Officer purely on the basis of surmises and conjectures and without making any enquiry whether the assessee has sold the investment at profit or at losses. There were no evidences also mentioned by the ld Assessing Officer for making the above addition. further, the addition is on estimate basis. Though the ld CIT(A) has deleted the addition with which he doe not agreed, however, for the reasons given by us above we direct the ld Assessing Officer to delete the addition of Rs. 435320/- and Rs. 310500/- for AY 2008-09 and 2009-10. Accordingly, ground No. 2 of the appeal of the revenue for both the years is dismissed. 30. Accordingly, appeal of the revenue for AY 2008-09 and 2009-10 are partly allowed and CO filed by the assessee for both the years are dismissed. 31. Now it is evident that assessee is an entry operator and providing accommodation entries, so it is also clear that this company will have very scarce resource for payment of taxes therefore, the ld AO may invoke provisions of section 226(3) of the Act and recover taxes from those beneficiaries, in case assessee company's assets are not enough for payment of taxes. 32. Accordingly, all the six appeals pertaining to the above assessee are disposed off by this common order.” 10. Since these assessees had failed to bring any material facts on records to contradict the finding of this Tribunal in the case of Green Mark Infra Ltd. in the ITA No.6206 to 6208/Del/2015; therefore, we are of the considered view that these cases are squarely covered, on merit, by the decision of this Tribunal in the case of Green Mark Infra Ltd. in the ITA No.6206 to 6208/Del/2015. Hence, following the reasoning in the decision ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 18 of this Tribunal in the case of Green Mark Infra Ltd. in the ITA No.6206 to 6208/Del/2015, we uphold the quantum addition made by the AO in all cases except the ITA No. 6210/Del/2015. 11. The legal issues are being decided in subsequent paras. 12. Not only the Ld. Commissioner of Income Tax, Central-II, New Delhi but the AO and Range Head who dealt these cases were well aware of the entire facts of these cases before reopening. The Ld. Commissioner of Income Tax, Central-II, New Delhi has applied his mind while giving the approval under section 151 of the Act as he was fully aware of the entire facts of the cases after dealing the same during the course of proceedings under section 264 of the Act, which has become final. Had the Ld. Commissioner of Income Tax, Central-II, New Delhi not applied his mind after going through the entire material on records and hearing assessees, he would have not annulled orders passed under section 153C of the Act. Similarly, the AO and Range Head were aware of the entire facts of these cases as they have not only submitted detailed reports but also have assisted the Ld. Commissioner of Income Tax, Central-II, New Delhi during the course of proceedings under section 264 of the Act. These cases were not only being dealt by the AO, Range Head and the Ld. Commissioner of Income Tax, Central-II, New Delhi for first time during the reopening proceedings and the approval sought under section 151 of the Act was an isolated action. There were many proceedings related to these assessees going on before them and they were fully aware of the facts of these cases. ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 19 It is not that these Income Tax Authorities have come to know the facts of these cases for first time when the approvals under section 151 of the Act of these cases were sent by the AO through the Range Head to the Ld. Commissioner of Income Tax, Central-II, New Delhi. Since, the Ld. Commissioner of Income Tax, Central-II, New Delhi was already seized with the facts of these cases from the date of initiation of the proceedings under section 264 of the Act. The said order under section 264 of the Act speaks volume about the application of mind. Only a person, after applying his mind, revises/rectifies himself. Thus, we do not find any merit, on this score, in the contention/argument of the Ld. Counsel. 13. Since assessments of these cases completed earlier under section 153C of the Act annulled by the Ld. Commissioner of Income Tax, Central- II, New Delhi had attained finality; therefore, any finding of the AO in such annulled orders have no relevance. Further, consequential reassessment proceedings initiated in the above-mentioned cases were not due to any earlier proceedings barred by the limitation but against abinitio void proceedings under section 153C of the Act. Further, these are not the cases of regularization of time barred proceedings. It is also worth mentioning that the issue on which these cases reopened had not ever been annulled by any Appellate Authority; hence the case laws relied upon by this Tribunal in Group cases as mentioned above are held distinguishable. The said revision of assessments of these cases completed earlier under section 153C of the Act by an Administrative Authority is different than that of any appellate authority. Even the Hon’ble Supreme Court in the case of Abhisar Buildwell ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 20 (supra) has allowed for initiation of remedial assessment proceedings as per law after holding assessments completed under section 153A and 153C of the Act, in absence of adverse seized material, as invalid. 14. In view of the above, we are of the firm view that the approval under section 151 of the Act cannot be treated as mechanical with non-application of mind. We therefore, differ with the finding of this Tribunal decisions in the cases of S. G. Portfolio Pvt. Ltd., Sam Portfolio Pvt. Ltd. and Sushre Securities Pvt. Ltd. 15. Thus, the Revenue’s eight appeals ITA Nos. 6206 to 6209 & 6221 to 6224/Del/2015 are allowed as above and the assessee’s cross objections; CO Nos. 398 to 401/Del/2015 and CO Nos. 191 to 194/Del/2018; respectively are dismissed as above. ITA No. 6210/Del/2015 16. We now proceed to deal with the Revenue’s remaining appeal ITA No. 6210/Del/2015. It emerges from both the learned representatives’ able assistance that the Assessing Officer this time prime facie appears to have made substantive additions of unexplained expenditure, deposits and loans; as the case may be, involving varying sums, in his section 143(3)/144 assessment framed ex-parte. The assessee thereafter filed appeal and submitted it’s additional evidence before the Ld. CIT(A) who deleted the same without seeking a remand report so as to comply with Rules 46A of the Income Tax Rules. Even the assessee is equally fair in filling compilation ITA No. 6206 to 6210/Del/2015 & CO 398 to 401/Del/2015 Green Mark Infra Ltd. ITA No. 6221 to 6224/Del/2015 & CO Nos. 191 to 194/Del/2018 Moderate Credit Corp. Pvt. Ltd. 21 of it’s evidence that the same formed part of the compilation of it’s evidence that the same formed part of the lower appellate records only. 17. Faced with this situation, we deem it appropriate in the larger interest of justice to restore the Revenue’s instant last appeal ITA No. 6210/Del/2015 to the AO for afresh adjudication/verification as per law. 18. To sum up, the Revenue’s eight appeals ITA Nos. 6206 to 6209 & 6221 to 6224/Del/2015 are allowed as above and the assessee’s cross objections; CO Nos. 398 to 401/Del/2015 and CO Nos. 191 to 194/Del/2018; respectively are dismissed as above. The Revenue’s last appeal ITA No. 6210/Del/2015 is allowed for statistical purposes. Order pronounced in open Court on 17th March, 2025 Sd/- Sd/- (SATBEER SINGH GODARA) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:17/03/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(Appeals) 5. CIT-DR ASSISTANT REGISTRAR ITAT, NEW DELHI "