TMI Blog2017 (4) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... and even the confirmation and the bank statements. In absence of all these things it is not correct on the part of the ld CIT(A) to delete the addition u/s 68 with respect to the above four companies amounting to ₹ 32123000/-. Therefore, we set aside the whole issue of addition u/s 68 with respect to above four companies amounting to ₹ 3.21 crores back to the file of the ld AO with a direction to grant one more opportunity to the assessee to prove the identity, creditworthiness and genuineness of the above transaction after granting assessee proper opportunity of hearing. In the result ground No. 1 of the appeal of the revenue is allowed with above direction. Proof of incriminating material found - Held that:- All the evidences gathered during the course of search coupled with the availability of the books of accounts of the assessee along with other documents at the office of Today Group and corroborated by statement of several persons during the course of the survey at the address of the investor company were not at all appreciated by the ld CIT (A) , In fact these are the material which has shown a link to the ld Ao to make addition on account of issue of share c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the AO u/s 68 of the Act, 1961. 2. On the facts and in the circumstances of the case, the ld CIT(A) has erred in holding that no addition can be made in the search assessment under the provisions of section 153C/ 153A when on incriminating material relating to the issue is found. 3. The order of the ld CIT(A) is erroneous and in not tenable on facts and in law. 3. For AY 2007-08 the following grounds are raised:- 1. On the facts and in the circumstances of the case, the ld CIT(A) has erred in deleting the addition of ₹ 32126000/- made by the AO u/s 68 of the Act, 1961. 2. On the facts and in the circumstances of the case, the ld CIT(A) has erred in holding that no addition can be made in the search assessment under the provisions of section 153C/ 153A when on incriminating material relating to the issue is found. 3. The order of the ld CIT(A) is erroneous and in not tenable on facts and in law. 4. Briefly stated the facts are that assessee is engaged in the business of providing medical transcription services and remote accounting business for its overseas customers. During the A Y 2004-05 the assessee has shown advance against s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these are just entry level papers/shell companies of Today group who are/were not doing any business; have no books of account and have just been floated and controlled by Sambhirs for infusion of their unaccounted money is the key/flagship companies of Today group. 4. Existence of paper/shell companies which are controlled by Gambhirs: 4.1 The various paper/shell companies which have been floated by Gambhirs and have been used as a conduit to transfer their unaccounted money into the assessee company are as under: s. No Name Address Date of incorporation Status as per ROC website Directors 1. Affluence Construction Pvt Ltd 373, 2 ' Floor, East of Kailash, New Delhi-110065 29.11.2006 Strike off Defaulter in filing form 32 as per ROC site 2. Chintapurni Prop. Build Pvt Ltd BG-6/237D, Paschim Vihar, New Deli-110063 20.05.2006 Strike off JagtarSingh Ashok Chopra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Floor Bengali Market, New Delhi 05.03.199? Strike off Vinay Subhikhi Gurmeet Singh 4.2 The various facts which are apparent from above table are; Out of 13 companies 10 companies have been Strike off as per the ROC records available at the website of Ministry of Corporate Affairs www.mca.qov.in . 1 out of 3 remaining companies is defaulter in filing the annual return with the ROC and other 2 companies are in progress of being strike off. Almost all the companies are defaulter in filing their return of income with the Income Tax Dept during the period of their existence. Many companies are defaulter in filing form number 32 as per the ROC records available at the website of Ministry of Corporate Affairs www.mca.qov.in . Almost all of these companies are having their registered offices at: a. 373, 2nd floor, Sant Nagar, East of Kailash, New Delhi; b. B6-6/237D, Paschim Vihar, New Delhi or c. House no.10 Pkt (5-20, Sector - 7, Rohini, New Delhi 4.3 To find out the existence as well as the details of business activities of these concerns/companies of Today group, survey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sh. AjmerSingh is the owner of this premise. Rent of this premise is ₹ 3500/- plus ₹ 35Q/- for electricity/ water etc. Q-5. Please stale whether any cash transaction is made by you in this office. Also state the amount of cash available at present in this office? Ans. No cash transaction is made from this office. No amount of cash is available at present in this office. Q.6. Give the details of companies/ business concerns run from this premise or in whose respects dak is received by you? Ans. As stated, no office work is done from this premise. However dak is received at this premise in respect of following companies/ business concerns as per the directions of Mr. Ashok Chonra;- 1. Cheerful Developers Pvl. Ltd. 2. Lazor Impex Pvt. Ltd. 3. 1 and E Advertising Pvt. Ltd. 4, Kalrajan Finvest A Leasing Pvt. Ltd, 5. Jasmine Systems Pvt. Ltd. 6. Vtthan Irtfotech Pvt. Ltd. 7. Chhavi Developers Pvt. Ltd. 8. Preference Properties Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' persons having substantial interests in these companies and their business activities. My job is to receive the dak at this premise i.e. room no. 4, 2nd Floor of 373, SantNagar, East of Kailash, New Delhi. Q.I 5. Who has kept you here on employment? Ans. Sh. Subhikihiii who sits at statesman office of Today Homes and Infrastructure Pvt, Ltd. had taken my interview on the recommendation ofSH. Saurabh Nigam, Manager and deployed me for this fob. He directed me to report to sh. Ashok Chopra, fie Id incharge my salary is sent by the main office through Sh. Harshpal peon who resides out Fartdabad near my residence. 4.3.2 Extracts of the statement of Shri Harsh Taiwan S/o Late Shni Raj Kumar Taiwan, at B -6/237-0. Paschim Vihar. New Delhi 4.3.3 Survey u/s 133 A of the Act was authorized to be conducted on 26.11.2009 at the registered office of the company Creative Propbuild Pvt Ltd and others at House No. 10 Pkt 6-20 Sector 7, Rohrni, New Delhi. However, the Authorised Officer reported that the office was found locked. The self declaration of Sh Rajesh Gupta, owner of House No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Vice President, Today Hotels (P) Ltd. 1 am drawing a salary of ₹ 25, OOO/- per month and no other perks are being provided by the company. Q.6 Please state/ give the details of the Board Meeting held in the past three years of M/s Today Hotels Pvt. Ltd. and also give details of sitting fee as received by you as direction in the above said company? Ans. 1 have not attended any board meeting ever or not received any sitting fees, However to fulfill the requirements of Company Act, 1956 formalities were completed. Q.7 Your reply to above question suggests thai you are merely functions as papers/dummy direction of M/s Today Hotels (P) Ltd., please comment? Ans. Yes, I am merelv a paoer/dummv director and I have sieneA the pavers with the directions oftnv senior officials Le. Mr. yinav SubhikL TATEMENT OF SHRI ASHOK CHOPRA (DIRECTOR} RESIDENCE GH-9/425* PASCHIM VIHAR. NEW DELHI RECORDED ON 26.11.2009 AT HIS Q.13 Please give the office address of M/s Cosmo ReaJtechPvtLt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofA/c are kept or maintained at the above address Ans. We are usin% the above office address for onlv name Sake We have avoointed onlv one man namelv Sh Harsh Tahvar to receive daks and correspondence and / paid ₹ 5.000/- to him after setting the same from mv owner Shri Raiender Gambhir other them receiving daks,/notes/ correspondences, no business activities are held at BG-6/237D, Janata Flat, Paschim Vihar. New Delhi. The books ofA/c are onlv kept or maintained at /6th Floor, Statesmen House. Barakhamba Road, New Delhi. Q.I 8. Please give the office address of the following companies, their business activities, their directors and name of the place where the books ofA/cs are kept or maintained: I) M/s Gay Developers P Ltd 2) M/s Mega Business Centre P Lid 3) M/s Sangrah Buildtech P Lid 4) M/s Bravo Compaq Systems P Ltd 5) M/s Vijay Rath Properties P Ltd 6) M/s Goldy Developers P Ltd 7) M/s high Time Properties P Ltd 8) M/s Pura Gold Properties P Ltd 9)M/s Ayitsh Portfolio P Ltd Q-19. Ple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found, please consider your thought and give the detail of company's Directly Indirectly control by Gambhir family? As evident from documents A-1. Following are other group coy (Today Hotels Pvt. Ltd Group and Gambhir family also) as under: 1) Paragon Travels Tours Pvt Lid 2) Paragon Overseas Pvt Ltd 3) Samanh Crafts Pvt Ltd 4) Horizon Distributors Pvt Ltd 5) Citron Traders Pvt Ltd 6) Savoy consultant Pvt Ltd 7) Epson Systems Pvt Ltd 8) Jasmine Systems Pvt Ltd 9) Novelty Consultants Pvt Ltd 10) Anjali Overseas Pvt Ltd 11) Utility Systems Pvt Lid 12) Lazor Impex Pvt Ltd 13) Puneet Properties Pvt Ltd 14) Blue Chip Portfolios Pvt Ltd 15) Heritage Collections Pvi Ltd 16) Preference Properties Pvt Ltd 17) Herry Poultries Pvt Ltd 18) S.M. Infotel Pvt Lid 19) S. K. S. Properties Pvt Ltd 20) Balance Build Tech Pvt Ltd 21) Believe Build Tech Pvt Ltd 22) Singh Buildtech Pvt Ltd 23) Manu Communications Pvt Ltd 24) Megha Business Centre Pvt Ltd 25) Kalrajan Finvest and Leasing Pvt Ltd 26) Ayush Portfolios Pvt Ltd 27) APJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 78,000/- have been paid in cash to Sh. Ram Narayan Singh S/o Sh. Chaturbuj. Please explain the source of cash paid or DD? Ans: I have no idea of this transaction only GK Gambhir and Ashok Arora can tell about this. Q. 10 Your reply to above queries suggest that you merely junction as paper/dummy director of M/s Today Homes Infrastructure Pvt Ltd Q.12 Please state exact nature of working in THJPL? Ans. Ans: I am basically Iiaisoning with Govt. agencies like DDA, MCD, Environmental Ministries to get A'OCsfor the projects in Delhi. 4.4.4 STATEMENT OF SHR1 GVRMEET SINGH (DIRECTOR) RECORDED ON 26.11.2009 AT HIS RESIDENCE 221/255. GALI NO.7. yiSHNU GARDEN, NEW DELHI Q-2. In which company you are presently working and in what capacity? Ans. ! am working in Today 's Homes Infrastructure Pvt. Ltd. (Group of companies). I am not attended to any particular company of the group but work for the Today's group of companies. I work, to say, as field supervisor. Previously) was attached with MJs Today Homes Pvt. Ltd. in the capacity of commercial officer, looking after outside work. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uild Pvt. Ltd. 4. M/s Cheerful Developers Pvt. Ltd. 5. M/s N. Y. Dox Services Lid. If so in what capacity? Ans i am not aware of the above named companies. I sign the papers in hurry as directed by Mr. Vinay Kumar Subhikhi without know ing for which company I am signing the papers. STATEMENT OF SHRl GURMEET SJNGff (DIRECTOR) RECORDED ON 18.01.2010 AT BANK OF RAJASTHAN, JANPA TH. A T THE TIME OF OPERA TJON OF BANK LOCKER NEW DELHI Q-21. Are you a Director in any company? Ans. Yes, lama Director in the Pvt. Ltd. companies. However 1 do not remember name of the companies. Q.22. Please explain under what circumstances you are not disclosing name of the companies in which you claim to be one of the Directors? Ans. I do not remember the name of the companies in which I am one of the Directors. Q.23. Are you aware that you are giving this statement on oath you will speak truth? I am once again explaining you provisions oflPC t4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the assets namely House No.48, Friends Colony, New Delhi which is used by Mr. G.fC. Gambhir and Mr. R.K. Gambhir for their residential purposes. This asset was purchased in the year 1994. 1 have no role to play in these companies and the whole affairs are managed by Mr. O.K. Gambhir and Mr. R.K. Gambhir themselves, I dummy Erector In these companies. The corporate and registered office address is House No-48, Friends Colony, New Delhi of the above companies. These companies derive rental income from M/s. Today Homes Infrastructure Pvt. Ltd. M/s. Today Hotels^(P) Ltd. Q.23. You are director in M/s Balance Build Tech Pvt Ltd. Please state where the books of accounts are kept or maintained and where tht'.shareholders register in kept or maintained? Ans. Q.24. Also, you are director in M/s APJ Constructions (P) Ltd. Please state where the books of accounts are kept or maintained and where the shareholder register is kept or maintained Ans. Mr.G,K. Mr. GK Gambhir can only tell the details as asked for. STATEMENT OF SHRl YINAY SUBHIKHI (DIRECTOR) RECORDED ON 14/01/2010 AT HIS RESIDENCER-8. NEW PRASAD NAGAR, DELHI Q.15 Kindly state where are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of share certificates and relevant documents kept and produce the source: M/s GPS Properties Pvt Ltd M/s M-N. Securities Pvt Ltd M/s P R Infrastructure Pvt Lid M/s Aerial Estate Pvi Ltd M/s Jai Mala Realtors Pvt Ltd Sh Vinay Subhiki, Vice President for Corporate affairs in his statement recorded the as stated that these records are not being maintained Ans. I cannot comment what statement Sh Subhiki had given and in what context. I shall organize and produce the relevant records to your goodself, Q.13. During the course of search Seizure operation carried out at the Regd. Office of these companies i.e. 8' Floor Statesmen House, B. K, Rood, New Delhi. On 26* 27* Nov, 2009 No such records ar^ found. Please identity such records and Ans. It may not be possible lo identity Qndprodu.ce the said record right now. Howeve we shall produce the said record to your eoodself at the earliest Q.I 4. As the records are not found during the course of search. Please state where from you will provide such records at the earliest. Ans. It cannot comment why you could not find the record. Q.15 As per extract of the books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our division 1 alongwith others senior officers taken the decisions with regard to day to day operations Q.25 I am showing you the statement of Vinay Subhki. VP recorded at this premises, who has also stated in his statement that all the decision in the companies in which Sh. Vinay Subhiki is Director are also taken by you. Please go through the statement and substantiate your answer particularly in reference to status of the residence 48. friends Colony (East). New Delhi? Ans: 1 requested you for copy of all the statements including Sh. Vinay Subhiki. but the same cannot be given at this time by you. This reply with regards to the question about residents i.e. 48. Friends Colony (East), New Delhi has already been explained by me in the statement recorded at my residence on 26JL2009 4.5 Further, page No. 135 and 143 of Annexure A-l, Party H-2 seized from the office at 8th Floor, Statesman House, Barakhamba Road, New Delhi, which is the registered office of M/s Today Homes and Infrastructure Pvt Ltd, are with respect to DIN No. and digital signatures alongwith password of various persons through whom the assessee group has floated and controlled various paper/shell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by 6ambhirs/Today group through dummy directors. These companies in turn are used as conduits to transfer the unaccounted money received in the form of accommodation entries from various entry operators into the main companies including the assessee company, namely M/s NY Dox Services Ltd. LEGAL DISCUSSION: 5. It is well established law that, in view of section 68 of the Act, where any sum is found credited in the books of the assessee in any previous year, the same may be charged to income tax as income of the assessee of that previous year, if the explanation offered by the assessee about the source and nature thereof is, in the opinion of the Assessing Officer, not satisfactory i.e. in respect of credit entries in its books of account the burden is on the assessee to prove the source of the receipt. Where the nature and source of the receipt cannot be satisfactorily explained by the assessee, it is open to the Revenue to hold that it is the income of the assessee and no further burden lies on the Revenue to show that the income is from any particular source 5.1 Now let us discuss the legal position and various judicial pronouncements of various courts, in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gambhir and Sh. Rajendra Kr. Gambhir. The revenue has conducted survey on 26.11.2009 at the registered office all these companies where the person available has stated that no business activities are carried out by these companies from the stated premises. Similarly, search and seizure u/s 138 was also conducted on 26.11.2009 at the residence of some of the directors and the statement u/s 132(4) was obtained. During the course of search and survey, it was found that these are the paper companies and through them unaccounted money received in the form of accommodation entries are transferred to the companies like assessee. She therefore, submitted that statement of controlling persons of the depositor companies saying that these are the bogus companies itself shows that there is incriminating material unearth during the course of search. She referred that Affluence Construction Pvt. Ltd who has deposited ₹ 1.25 lakhs is also a company formed by the Gambhir Group. Likewise, she also referred that all the other three companies namely M/s. Chintapurni Proprietor Build Pvt. Ltd, Mega Business Centre Pvt. Ltd, and SM Infotell are all companies belonging to that group. She therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention of the assessee is that all these companies have been dissolved as the names of these companies have been struck off by the Registrar of Companies for non filing of their annual returns. This argument of the assessee does not hold water as the search took place on 26.11.2009 and further the notice u/s 153C/ 153A was issued on 25.05.2011. At that particular time all the companies were in existence. Furthermore, the names of the companies have been struck off for non filing of returns with the Registrar of Companies. However, such as act does not have any implications in the Income Tax proceedings where the companies have made investment. If the argument of the ld AR before the ld CIT(A) is to be believed then when the name of the depositor company struck off the investment made by them in the company also becomes share issued in the hands of non existing person. In any way that is not the case of the assessee. With respect to all the four creditors the assessee has not produced their return of income, their balance sheets, and even the confirmation and the bank statements. In absence of all these things it is not correct on the part of the ld CIT(A) to delete the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as under:- 1.6 Applying the aforesaid legal position, addition has been made without reference to any material having been found during the course of search and therefore is clearly outside the scope of proceedings under section 153C of the Act. 14. However, on perusal of the para No. 1 itself the ld Assessing Officer held as under:- A search and seizure operation was carried out at the various premises of M/s. Today Homes and Infrastructure Pvt. Ltd and its group concerns and associated persons (hereinafter called Today Group of cases) on 26.11.2009 and was finally concluded on 25.01.2010. The assessee is one of the associated/ group concerns of Today group of cases. During the course of search and seizure operation at the various premises of Today group of cases many books of accounts or documents belonging to the assessee company were found and seized and hence, prerequisite condition to initiate proceedings u/s 153C of the Income Tax Act (herein after The Act) was fulfilled. 15. The order of the ld CIT(A) before holding that addition has been made without reference to any material having been found during the course of search is a finding which has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e result appeal of the revenue for AY 2007-08 is allowed for statistical purposes. 18. For AY 2004-05 the facts are similar the assessee has received share capital of ₹ 23265000/- from various concerns. During assessment proceedings assessee filed their return of income for AY 2008-09 and 2009-10 and copies of balance sheet also for AY 2008-09 and 2009-10 not for AY 2004-05 i.e. the year in which amount is credited in the books of the assessee. As per para no 2.3 of the assessment order even the confirmations were not filed as well as no bank statements of the depositors were produce. Therefore the assessee could not discharge even the initial onus cast up on it. Therefore the ld AO on similar lines made the addition of ₹ 23265000/- u/s 68 of the act which was deleted by the ld CIT (A) on similar lines of AY 2007-08. The ld CIT DR submitted that the issue is similar except the names of the depositor as well as the amount. 19. We have carefully perused the contentions of the revenue as well as the orders of the lower authorities. As we have already decided the appeal of the assessee for AY 2007-08 which is on identical grounds, therefore we also decide the issues i ..... 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