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2016 (9) TMI 654 - ITAT DELHI

2016 (9) TMI 654 - ITAT DELHI - TMI - Addition u/s 68 - racket of bogus accommodation entries - Held that:- As the ITAT is a final fact finding authority we feel that all relevant facts should be allowed to emerge before the issue is decided on merits. We also feel that both sides, Revenue as well as assessee should have got adequate opportunity to bring relevant facts on record. If either of the two sides has not got reasonable opportunity for this purpose it will be appropriate to cause such o .....

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and when name of the assesee is discovered as one of the beneficiaries of the alleged racket ; and when amounts are actually found in the books of assessee to be credited in the name of alleged entry operators ; burden was on the assessee to prove that it was not a beneficiary of the racket. - In view of the foregoing we set aside the order of the Ld. CIT(A) and restore the matter to the file of the Ld. Assessing Officer to complete the assessment de novo with the direction to the Ld. Assess .....

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Department : Shri Umesh Kumar Dubey, Sr. DR For The Assessee : Shri Kapil Goel, Adv. ORDER PER ANADI N MISHRA, A.M. This appeal filed by the revenue and the cross objection by assessee directed against the order of Ld.CIT (Appeals) New Delhi dt. 26.2.2010 for the Assessment Year 2005-06 on the following grounds :- 1. The order of the Learned CIT (APPEALS) is erroneous and contrary to facts and law. 2. On the facts and in the circumstances of the case and in law, the learned CIT(APPEALS) has err .....

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udgement in the case of M/s. Divine Leasing & Finance and in the case of M/s. Lovely Export Pvt. Ltd. is not applicable to the case of the assessee. 3. The appellant craves leave to add, to alter, or amend any grounds of appeal raised above at the time of the hearing. 2. The only issue involved in appeal filed by Revenue and the cross objection filed by the assessee is the addition of ₹ 99,00,000/- made by the Ld. AO u/s 68 of the I.T. Act, which was deleted by the Ld. CIT(A) vide orde .....

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ts were forwarded to the Ld. AO. The persons allegedly engaged in providing accommodation entries included ABO Investments Pvt. Ltd., Aggregate Fin. & Inves. Pvt. Ltd. Shubham Electricals Pvt. Ltd., Finwiz Capital Services P. Ltd. Fussy Finn. Services Pvt. Ltd., Hare Rama Restaurants Pvt. Ltd. Statement of these persons who admitted on oath before investigation wing of Income Tax Department that they had provided the accommodation entries were forwarded to the Ld. AO in which they had catego .....

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ve been listed in paragraph No. 5.0 of order dated 26.2.2010 of Ld. CIT(A). During assessment proceedings, the Ld. AO vide order sheet entry dated 10.12.2007 asked the assessee to produce the Directors of the aforesaid alleged entry operators. However the assessee failed to produce them before the Ld. AO. Also, during assessment proceedings the assessee company also filed letter dated NIL before the AO requesting to make available the material / statement so that the true state of affairs could .....

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rators which had been recorded at the back of the appellant without providing an opportunity of explanation to him to bring out the true state of affairs. (ii) The Assessing Officer had erred in not making available the said entry operators for his cross examination. (iii) The Assessing Officer had erred in overlooking the statutory provisions of Section 143(2) of the Income Tax Act according to which the adverse material collected by the Assessing Officer at the back of the assessee had to be c .....

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ed cross objection against failure of the Ld. CIT(A) in giving a decision on the grounds mentioned above. 4. In the course of hearing before us we have heard both sides and have also perused the material available on record. Ld. DR vehemently contended that the appellant company should have produced Directors of alleged entry operators before the Ld. AO and the Ld. AO was justified in taking an adverse view since the assessee company failed to produce them before the Ld. AO. He further contended .....

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e capital and share premium of the assesee company or these were only accommodation entries. Whether it was genuine or not will depend on facts specific to this case. However, we find that both the lower authorities, the Ld. AO and the Ld. CIT(A) have taken a view without allowing full facts to emerge. The assessee company failed to produce the Directors of the entry operators before the Ld. AO. It is obvious that the Ld. AO wanted to examine the Directors of alleged entry operators and wished t .....

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wing which was forwarded to the Ld. AO. Moreover, there are also conflicting evidences which have not been reconciled by the lower authorities. On one hand the alleged entry operators have stated an oath before investigation wing of Income Tax Department that they have provided accommodation entries. On the other hand during assessment proceedings they have given confirmation in favour of the assessee and have also responded in support of the assessee in response to letter of the Ld. AO seeking .....

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sessee neither of the two lower authorities has explained why the evidence on the other side was overlooked. As the ITAT is a final fact finding authority we feel that all relevant facts should be allowed to emerge before the issue is decided on merits. We also feel that both sides, Revenue as well as assessee should have got adequate opportunity to bring relevant facts on record. If either of the two sides has not got reasonable opportunity for this purpose it will be appropriate to cause such .....

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and when name of the assesee is discovered as one of the beneficiaries of the alleged racket ; and when amounts are actually found in the books of assessee to be credited in the name of alleged entry operators ; burden was on the assessee to prove that it was not a beneficiary of the racket. We also have considered with reverence the following observations of Hon ble Jurisdictional High Court, in the case of CIT vs. N.R. Portfolio (P) Ltd. (Delhi) (2013) 214 Taxmann.com 291 (Delhi) :- 8. This c .....

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