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TMI Blog2016 (10) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... firmations from the above mentioned parties during the course of assessment proceedings. The A.O. found on perusal of the confirmations furnished on record that the confirmation letters were on similar type of printed paper and on a similar letter head, contents and the font of all the four confirmation letters were same. This led to the suspicion of the A.O that the amount received was not genuine. To verify the genuineness the A.O. issued notices u/s.133(6) to all the four parties on 25.08.2010. The notices issued to Kornai Commercial Ltd. and Larite Industries Ltd. were not served and returned back. The other two parties did not respond to the notices received by them. Again the A.O. issued fresh notices u/s.133(6) dated 22.10.2010 to the two parties who did not respond earlier. The party Saragossa Investment & Finance Ltd. did not respond again to the second notice and the second notice issued to Spider Web Solutions Ltd. was returned back un-served. The appellant was confronted by issuing a letter dated 22/10/2010 by the A.O to explain why the share application money received from the above four parties should not be treated as un-explained and why the addition for the same sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven of these companies appear to be fake. (ii) The business of all the four companies appears to be providing accommodation entries. (iii) The frequency and quantum of deposits and withdrawals in their bank accounts without generation of any substantial income further strengthens this belief. (iv) Two bank accounts namely M/s. Spider Web Solutions and M/s. Saragossa Investments were opened and closed in the same year. Bank account of M/s. Komal Commercial has also been closed in the same year. This shows that the bank accounts were opened only for the purpose of using them to provide accommodation entries. (v) The Directors/Principal Officers of the four concerns have been avoiding the notices/summons issued by the Department. (vi) In case of Larite Industries ltd and Komal Commercial Ltd., the person making the affidavit in the capacity of a Director is different from the person shown as Director in the account opening form of the bank. (vii) Considering the nominal income returned by the four companies, the capacity of the companies to make an investment of Rs. 24,00,000/- each is doubtful. Hence, it is held that The amount of Rs. 96,00,000/- received by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the ld D.R submitted that the assessee did not offer proper explanation for non-appearance of share applicants and their respective directors. He submitted that the notices issued by the AO were returned back unserved and in some cases, the parties did not respond. Further, the Inspector could not locate the addresses of some of the directors also. He submitted that the affidavits given the directors are self serving documents and they could be examined by applying the test of human probabilities. The Ld D.R submitted that the assessment of Share Application money as unexplained cash credits u/s 68 of the Act has been upheld by Hon'ble Delhi High Court in case of CIT Vs. Nova Promoters & Finlease (P) Ltd (2012)(18 taxmann.com 217) and other cases. He submitted that the facts prevailing in the above said case is identical to the facts of the instant case. The Ld D.R also placed reliance on the decision rendered by the Indore bench of ITAT in the case of Agarwal Coal Corporation (P) Ltd (135 ITD 270). 7. In the rejoinder, the Ld A.R submitted that the share applicant companies are not recently established companies and they have been established long back. He further submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share applicant companies did not respond to the notices/summons issued to them and the non-compliance has been interpreted by them as cases of providing accommodation entries. In this regard, the Ld D.R also placed reliance on the decision rendered by Hon'ble Delhi High Court in the case of Nova Promoters & Finlease (P) Ltd (supra). We have noticed that the facts prevailing in each case need to be examined in terms of sec. 68 of the Act. The facts prevailing in the case considered by Hon'ble Delhi High Court are that (a) The assessee therein received share application money of Rs. 1,18,50,000/- during the year relevant to AY 2000-01. (b) The assessing officer re-opened the assessment upon receipt of a report from the Director of Income tax (Investigation) that 16 persons are providing accommodation entries to several persons, of which the assessee was also one. (c) The entry operators/accommodation providers have admitted before the Investigation wing in May 2004 that they have provided only accommodation entries. (d) During the course of assessment proceedings, the entry operators filed affidavits retracting the statement given by them before the Investigation wing. The retr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties not produced in spite of specific direction of the AO instead of taking opportunities in this behalf. Since the so-called Directors of these companies were not produced on this ground coupled with the outcome of the detailed inquiry made by the Investigating Wing of the Department the AO made the addition. This addition could not be sustained as the primary onus was discharged by the Assessee by producing PAN number, bank account, copies of income tax returns of the share applicants. etc. We also find that the Assessing Officer was influenced by the information received by the Investigating Wing and on that basis generally modus operandi by such Entry Operators is discussed in detail. However, whether such modus operandi existed in the present case or not was not investigated by the AO. The Assessee was not confronted with the investigation carried out by the Investigating Wing or was given an opportunity to cross-exam Inc the persons whose statements were recorded by the Investigating Wing." These quoted observations clearly distinguish the present case from Oasis Hospitalities (P). Ltd. (supra). Except for discussing the modus operandi of the entry operators generally, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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