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2017 (8) TMI 1659 - ITAT CHENNAIAssessment made under section 153A/153C - Addition u/s 68 - HELD THAT:- In this case, admittedly, a search and seizure operation was conducted on 18.12.2012. Further, a search and seizure action was also carried in the case of Shri Praven Kumar Jain group on 01.10.2013, who was stated to be one of the leading entry providers operating in Mumbai, indulging in providing accommodation entries like bogus purchases, sales, unsecured loans, share capital, etc. In his statement recorded on oath u/s 132(4) Shri Praveen Kumar Jain has admitted that he was indulged in providing accommodation entries and also explained the complete modus operandi of providing such entries. Upon notice u/s 133(6) of the Act issued to the eight companies, on the basis of replies, records available and data available in public domain, the AO has observed that all the companies involved are basically investment companies existing only in paper and have no activity as such and practically have no fixed asset. All the companies have filed their returns showing meagre income and therefore, the creditworthiness of the companies has not been proved. Further, most of the companies claimed to have received share application money at a huge premium to its face value. In others the sources of funds have been shown as sale of bogus investments of unquoted equity shares. As per Website information, the directors of above named companies are also directors in other companies - apparent strength of documentary proof of returns of income filed with RoC, Income Tax Department and opening of bogus bank accounts from bogus addresses and subsequent transactions through banking channels are emboldened the entry operators and the beneficiary entities to embark upon such a complex, fraudulent and fictitious process involving a huge number of companies and other entities. With regard to retraction by Shri Praveen Jain and his associates on the statement recorded on oath under section 132(4) of the Act, the subsequent observations made by the Assessing Officer and reproduced hereinabove, clearly indicates that the said retraction is nothing but an afterthought and more so, the entire process is fictitious and fraudulent process for evading taxation. It may be noted that the Hon'ble Gauhati High Court in the case of Greenview Restaurant [2002 (7) TMI 13 - GAUHATI HIGH COURT] has expressed disapproval on retraction of a statement after a considerable time lag. In the case on hand, the retraction has been made after 7-8 months by way of mostly common affidavits containing various factual inaccuracies furnished by the associates working under the control of Shri Praveen Kumar Jain and the statements have been signed by them without correlating the contents with the facts of their own cases. Since the assessee could not proved the genuineness, creditworthiness and identity of the companies, as these companies might have been existing on papers or in real sense at the time of registration, but were specifically found to be non-existence, we are of the considered opinion that the Assessing Officer has validly made the assessment under section 143(3) r.w.s. 153A & 153C of the Act for both the assessment years - We set aside the order of the ld. CIT(A) and direct him to adjudicate the grounds raised by the assessee on merits - Appeals filed by the Revenue are allowed for statistical purposes.
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