TMI Blog2019 (8) TMI 1499X X X X Extracts X X X X X X X X Extracts X X X X ..... easons as asked by the assessee and before us the entire proforma has been placed by the assessee in the paper book before us. This goes to show that such proforma was given to the assessee at some point of time and therefore, this contention of the assessee is not tenable. If reason to believe has been recorded by the AO in writing which has been duly approved by the higher authority, then it is sufficient to clothe the AO with jurisdiction reopen the assessment and proceed for making the assessment reassessment. Thus, this contention of the Ld. Counsel is also rejected. Non application of mind on the information report by the DDIT Investigation Wing - Here in this case AO has solely relied upon the report received from the Investigation Wing, but in such a report there was a clear cut information regarding assessee and the companies who have given cheque to the assessee along with details of annexure and the amount paid which has been tabulated in the reasons recorded which are prima facie in the nature of accommodation entry, and if AO has found that such amounts are also recorded in the books of the assessee, then it does gives rise to reason to believe that such credits a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent then he must scrutinise himself all the documents and carry out his own inquiry. If he makes his own inquiry and nothing adverse has been found, then he cannot make his assessment on borrowed reasoning and rely upon the report of the investigation wing. Thus, on these peculiar facts and circumstances of the case, and in absence of any further inquiry by the AO to dislodge the evidence furnished by the assessee as well as gathered by him u/s 133(6), it would be very difficult to hold that the share application money received by the assessee is either non-genuine or bogus so as to sustain addition under the deeming provision of section 68. Accordingly, same are directed to be deleted. Penalty u/s 271(1)(c) - As quantum of addition received by way of share application money as already deleted the quantum on merits, therefore, levy of penalty u/s 271(1)(C) has become infructuous. Share application money to the assessee has been found to be in the nature of accommodation entry - notice u/s 133(6) - AY 2010-11 - HELD THAT:- In this case when the parties have not responded and have not furnished the relevant evidences to the AO in response to notice u/s 133(6), then it canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed Assessment year 1712.2018 7 143(3)/147 2010-11 And in ITO vs. RMP Holding (P) Ltd.:- Date of Order Order passed by Ld. CIT0(Appeals) Section in which order has been passed Assessment year 29.08.2018 36 143(3)/147 2007-08 2. Since issues involved in all the appeals are common arising out of identical set of facts, therefore, same were heard together and are being disposed of by way of this consolidated order. In all the years the common issue involved relates to addition made u/s 68 on account of share application money and validity of reopening u/s 147 on various grounds. The quantum of addition and penalty levied for all the assessment years are tabulated here as under:- ITA No. Asstt. year Addition u/s 68 Order passed 6017/Del/2018 2007-08 ₹ 1,66,65,000/- u/s 143(3)/147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommodation entries by providing cheques/PO/DO in lieu of cash to a large number of beneficiary companies thorough various paper and dummy companies floated and controlled by them. It was also evidently established by the wing that Sh. Surendra Kumar Jain and Sh. Virendra Jain are known entry providers and are the actual controllers of more than 100 companies/proprietary firms/partnership firms. They control these entities through various persons by appointing them as directors / partners / proprietors apart from nominating them as authorized signatories for maintaining the bank accounts of these entities but in fact all these persons act only as their stooges. The cash received from the recipient parties for providing the accommodation entries was first deposited in the accounts of these dummy firms/companies in the disguise of the cash received against the bogus sales, duly shown in the books of accounts. From there, this cash was transferred to the different paper companies floated by Sh. Surender Kumar Jain and Sh. Virendra Kumar Jain through a complex trail of transactions, so as to hide the actual sources of funds of the last set of recipient companies of Sh. Surendra Kumar Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CH. No. 000310 16-03-06 7.00,000 Satish A-53 22 30-03-06 Vogue Leasing Finance P Ltd. R N Khemka Enterprises P Ltd. KOTAK CH. No. 000077 31-03-06 7,00,000 Satish A-54 26 30-03-06 S R Cable P Ltd. R N Khemka Enterprises P Ltd. KOTAK CH. No. 000062 31-03-06 8,00,000 Satish A-54 26 In view of the report received from the DIT(Inv.) Unit-VI(2), New Delhi and in view of the facts narrated above it is clear that the assessee has not disclosed fully and truly all material facts necessary for its assessment for that assessment year. In have therefore, reason to believe that the sum of ₹ 55,00,000/- chargeable to tax has escaped assessment. Thus, the same is to be brought to tax under section 147/148 of the I.T. Act 1961. Notice u/s 148 may be issued, if approved. Sd/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 Finage Lease Finance India Ltd. R N Khemka Enterprises P Ltd. BOI CH. No. 049900 10-03-06 7.00,000 Satish A-53 IS 16-03-06 Karishmn Industries Ltd R N Khemka Enterprises P Ltd. KOTAK CH. No. 000310 16-03-06 7,00,000 Satish A-53 22 : 30-03-06 Vogue Leasing Finance P Ltd. R N Khemka Enterprises P Ltd. KOTAK CH. No. 000077 31-03-06 7.00,000 Satish A-54 26 30-03-06 S R Cable P Ltd. R N Khemka Enterprises P Ltd. KOTAK CH. No. 000062 31-03-06 8.00,000 Satish A-54 26 ! Thereafter, AO has stated that in order to verify the claim of the assessee and various document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providers as per the Investigation Wing. In response to such summons, they had duly appeared before the AO and their statement were also recorded on oath by him on 13.3.2014. Though there is no mention of the relevant content of the statement, however, AO has observed that though these persons have stated that they were not related to the said parties and have denied providing any accommodation entry to the assessee. But still he observed that they are the persons who have controlled the whole affair of the said parties and earlier also in Investigation Wing, they have not admitted that they are engaged in the business of providing the accommodation entry, therefore, their statement given before him cannot be relied upon, because Investigation Wing had earlier established that they were entry operators and providing accommodation entry to various persons. The observation of Ld. AO in this regard which has a very vital bearing in all the years under appeal are reproduced hereunder: 3.3. The assessee was asked to produce the Principal Officer/Director of the concerns for examination which could prove the genuineness of the transaction entered into by it as the onus to prove the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with all the documentary evidences filed before the AO in support of the share application money received by the assessee from all these companies. Assessee also challenged the validity of reopening on various counts. Ld. CIT (A) has called for the remand report of the AO on all the submissions. AO though admitted that assessee has filed the confirmations from the parties, their bank statements, copy of ITRs of the parties. Further, all these companies have also filed all these documents once again in response to notices u/s 133(6), but the Ld. AO in his remand report once again has mainly gone by the fact that the assessee has failed to produce the Directors of these companies. After receiving a remand report assessee has filed details of shareholders which have been tabulated from pages 15-16 of the order. Ld. CIT(A) has taken note of all these facts including the fact that summon u/s 131 was issued at the instance of the assessee to Shri Surender Kumar Jain and Shri Virender Kumar Jain as they were the persons who controlled these companies and were entry provider as reported by the Investigation wing. However, Ld. CIT (A) observed that, why any prudent investor would make inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble MP High Court in the case of CIT vs. M/s. S. Goyanka Lime and Chemicals Ltd. 231 taxman 0073. He submitted that, such mechanical approval/ satisfaction goes to shows that there has been complete non application of mind by the approving authorities which is fatal to jurisdictional issue u/s 147/148 read with section 151. He also strongly relied upon the judgment of Hon ble Delhi High Court in the case of Sabh Infrastructure vs. ACIT in W.P.(c) 1357/2016 dated 25.9.2017, wherein the Hon ble High Court has held that furnishing of incomplete reasons without providing the ground on which satisfaction by the authorities concerned u/s 151 was reached to sanction the issue u/s 148 cannot be sustained. Here in this case, he pointed out that AO has mainly supplied reasons recorded and not the format/proforma in which such reasons recorded was sent for approval by the higher authority. Lastly, he submitted that there is a complete non application of mind on the information provided by the DDIT Investigation Wing by the AO, because there was no material provided with the information. This he submitted that is evident from the reasons recorded itself that the AO has only gone by the infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lastly on merits, besides oral argument he has also filed written submissions. In sum and substance his main contentions are as under:- The appellant had furnished during assessment of proceedings, which has been mentioned in table in sub para 6.3 of the Ld. CIT (A) order mentioning the documents filed such as Confirmation from each share applicants along with share application form, list of directors downloaded from MCA portal, affidavit of director, resolution of board of directors, relevant portion of Bank statement and Copy of ITR-V. In some cases, copies of assessment order, like in cases of M/s Karishma Industries for AY 2005-06 AY 2006-07 M/s Finage Leasing and Finance (India) Ltd for AY 2007-08 and M/s S.R. Cables for AY 2006-07 were also enclosed. Similar details were submitted by the share applicant companies directly to the AO in response to notice u/s 133(6), The AO vide order sheet dated 23.01.2014 required the appellant to produce the directors of the share applicant companies. The AO appears to have put the onus on the appellant to produce the directors without considering the evidences furnished by the appellant in support of share appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO in ITA NO.3133/Del/2018 Dated: 25.06.2018. M/s Astech Industries P Ltd vs DCIT (PB 386-399) ITA No.2332/Del/2018 dt: 20.12.2018. On that basis, at best creditworthiness of the shareholders could only be disputed. So far as the identity of the share applicants and genuineness of the transaction is concerned, the AO has questioned genuineness of the transaction. There is no adverse observation with regard to identity of the shareholders. In view of the fact that the identity of the shareholder is not in dispute, the addition u/s 68 cannot be made in the hands of the assessee company in view of the decisions of jurisdictional Delhi High Court detailed as under: 1. CIT VS Vrindavan Farms (P) Ltd ITA No. 71 to 72 84/2015 (Del) dated 12.08.2015(PB 1-2) 2. Pr. CIT vs. Veedhata Tower Pvt. Ltd (Bombay High Court in ITA No.819 OF 2015 Dated: 17.04.2018 3. Pr. CIT Vs Paradise Inland Shipping Pvt Ltd ITA No.66 of 2016 Bom HC Dated 10.04.2017. 4. CIT vs Mis Russian technology Centre (P) Ltd ITA No.547, 549 555/2013 Dated 15.12.2016 (Del) 5. CIT v. Lovely Exports (P.) Ltd. [S.L A. No. 11993 of 2007, dated 11-1-2008] (SC) 6. Sofia Finance Ltd (205 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification to initiate the reassessment proceedings based on the DDlT but he was not entitled to rely on the investigation report without establishing that there was nexus between the appellant and the so called entry provider. If the assessment order is gone into, it can be seen that the AO has not dealt with the contents of the information in question. In view of this it can be inferred that the information from DDIT (Inv) is not found to be relevant by the AO. Therefore, the said information cannot be basis for adverse inference against the appellant. Reliance is placed on CIT Vs Nova Promoters and Finlease (P) Ltd (Delhi High Court) 342 ITR169and CIT Vs Oasis Hospitalities Pvt Ltd (2011) 333 ITR119 (Del). The Ld CIT (A) has taken adverse view of the issue of shares of ₹ 10 each at premium of RS.90per share. It is submitted that the identical issue came for consideration before Hon ble Delhi High Court in the case Pr.CIT vs A.R. Leasing Pvt Ltd in ITA No.361/2017 Dated: 03.07.2017 wherein it was held that if the AO disregards the documents furnished by the assessee to discharge onus u/s 68 and comes to the conclusion that transaction of receiving money as shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India in the case of PCIT v. NRA Iron Steel (P) Ltd. 103 taxmann.com 48 (SC) ii. Decision of Hon'ble Supreme Court of India in the case of CIT v. Durga Prasad More, 82 ITR 540 (SC) iii. Decision of Hon'ble Supreme Court of India in the case of Sumati Dayal v. CIT 1995 AIR 2109 dated 28.03.1995. iv. Decision of Hon'ble Delhi High Court in the case of PCIT v. NDR Promoters (P) Ltd., 410 ITR 379 (Delhi) v. Decision of Hon'ble Delhi High Court in the case of CIT v. Nova Promoters Finlease (P) Ltd., 342 ITR 169 (Delhi) vi. Decision of Hon'ble Delhi High Court in the case of CIT v. N.R. Portfolio (P) Ltd., 42 taxmann.com 339 (Delhi) vii. Decision of Hon'ble Delhi High Court in the case of CIT v. MAF Academy (P) Ltd., 361 ITR 258 (Delhi). 17. He submitted that in view of the aforesaid judgements, such kind of share application with high premium from the companies who do not have substantial worth or income in their return of income cannot be held to be genuine, because not only the genuineness of the transaction is doubtful as all the transaction has been routed through entry provider but also their creditworthiness is also doubtful. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfaction on the reasons recorded by the Assessing Officer that it is a fit case for the issue of such notice , In the present case, the Court is satisfied that by recording in his own writing the words: Yes, I am satisfied , the mandate of Section 151 (1) of the Act as far as the approval of the Additional CIT was concerned, stood fulfilled. In the present case, the PCIT recorded, on reassessment proposal on the file of each assessee, that inter alia, the lifting of veil over the tripartite arrangement between AICC (i.e. INC), AJL and YI to tax the assessee under Section 56(2)(vii) (c)(ii) of the Act, the sum of ₹ 48,93, 64,896/-. The PCIT, after stating this also recorded that I am satisfied that the AO i.e. ACIT has sufficient information in her possession which leads to reasons to believe that the assessee would have income which had escaped assessment which exceeds ₹ 1 lakh . In view of the ruling in Meenakshi Overseas (supra), therefore, the satisfaction recorded by the PCIT was adequate and in accordance with legal requirements. 19. In the case before the Hon ble Court the satisfaction of the approval was very specific and categorical which may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd from the perusal of the reasons recorded that the AO has mentioned the factum of search and seizure action which was conducted by Investigation Wing at the residence and office premises of Shri Surender Kumar Jain and Shri Virender Kumar Jain on 14.9.2010, wherein documentary evidences and material were seized and from the seized documents Investigation Wing had found that these persons were not only the entry operators but were also controlling various companies/entities through which they were providing accommodation entries. From the search a specific annexure was found wherein the name of the companies from where the assessee has received cheque/RTGS amount, name of the bank and reference of the person and amount paid has been mentioned. When specific information was provided by the investigation wing to the AO, then AO has to prima facie satisfy himself, whether the information is relevant to the assessee or not and whether it constitutes tangible material to entertain reason to believe or not. If AO has applied his mind on such material and then has reach to prima facie reason to believe that sum of ₹ 55 lacs shown as share application money is non-genuine then he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion wing which is very specific entailing the details of the assessee along with annexure bank account, cheque no. etc. If there are such direct and specific reports which have been sent to the AO along with all the annexures, then it cannot be held that AO was not having any material in his possession to entertain prima facie reason to belief. Accordingly, contentions raised by the assessee Ld. Counsel cannot be accepted and none of the judgments relied upon by the Ld. Counsel can be held to be applicable on specific facts of the case. Accordingly the validity of reopening as challenged by the assessee on all counts are dismissed. 22. Now coming to the merits of the additions, we find that assessee has received share application money from 5 companies, namely Pelicon Finance Lease Ltd., Vogue Leasing Finance P Ltd., Finage Lease Finance India Ltd., Karishma Industries Ltd. and S. R. Cable P Ltd. These share application money admittedly have routed through banking channel with specific dates and amount. Though these information have been forwarded by the investigation wing based on seized annexure, but nowhere seized annexure indicate that any corresponding incriminati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication of funds including investments etc. in their balance sheets filed along with the Income Tax Returns. If AO had doubted about the source of funds either in the balance sheet or the source of funds in their bank statement, then he should have specifically asked them u/s 133(6) or could have issued summons u/s 131. If assessee has received share application money, then primary onus is upon the assessee to prove the nature and source of the credit. Here the nature of credit is share application money which is duly backed by share application form and all the statutory compliances associated with issuance of share application money and allotment of shares. The source has been proved by providing the identity and genuineness of the transaction, wherein the assessee has not only filed the confirmations and statutory details of the company and PAN but also the balance sheets, ITRs, bank statement, board resolution, but also the source from where the money has flown from the bank accounts of the companies to the account of the assessee. It is not case where certain cash has been deposited before the issuance of cheques by the companies albeit there are transfers of funds from bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the business of providing accommodation entry. Thus, the entire substratum of alleged bogus entry through these persons which led to initiation of reassessment proceedings collapses when they have denied that they have not provided any bogus entry to the assessee company. When the witness of the AO themselves corroborate the stand of the assessee, then it completely dislodges the case of the AO sans any adverse material. Though exact statement has neither been referred in the assessment order nor in the first appellate order, however the statement which has been placed in the paper book, which for sake of ready reference is reproduced hereunder:- Q. No. 1 Please Identify yourself? Ans. I am Surender Kumar Jain s/o Jiwan Mal Jain. I am furnishing my ID proof. Q. No.2 Are you assessed to Income Tax? If so, please give your Income Tax Particulars. Ans. Yes, I am assessed to Income tax vide PAN - AAHPJ8940K with DCIT, Central Circle-23, New Delhi Q. No.3. Please State your sources of Income? Ans. My Source of Income is salary income of approx ₹ 2 Lakhs P.M. being Director in Sunshine Capital Ltd. Q. No. 4 Please give the details of the companies. in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the provisions of the IT Act/CPC. Ans. Yes. Q.No.11 Please state the two address viz. as per notice sent as per proof furnished. Both the premises are our own premises. Previously we were residing at 555 Double Story, New Rajinder Nagar and now we are residing at the other address. My Mobile No.9891709895 and 9312206963 Q.No.12 Do you want to say anything else. Ans. No 25. Thus, if the entire premise is based on some earlier statement of Shri Surender Kumar Jain and Shri Virender Kumar before the Investigation Wing or any finding given by them that these two persons were entry providers, but before the AO, if they have been summoned as a witness of the department and these witnesses themselves have denied that they have not provided any accommodation entry to the assessee through any of these entities of companies, then it is very difficult to draw any adverse presumption or inference against the assessee that all the share application money received by these aforesaid companies are in the nature of bogus accommodation entries. The AO has decided against his own witnesses on the ground that their statement given before him cannot be relied upon in wake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If he makes his own inquiry and nothing adverse has been found, then he cannot make his assessment on borrowed reasoning and rely upon the report of the investigation wing. Thus, on these peculiar facts and circumstances of the case, and in absence of any further inquiry by the AO to dislodge the evidence furnished by the assessee as well as gathered by him u/s 133(6), it would be very difficult to hold that the share application money received by the assessee is either non-genuine or bogus so as to sustain addition under the deeming provision of section 68. Accordingly, same are directed to be deleted. 27. In so far as reliance placed by the Ld. DR on various judgments specifically in the case of PCIT vs. NRA Iron Steel (P) Ltd. (supra) and decision of Hon ble Delhi High Court in the case of CIT vs. Nova Promoters; and lastly, decision of CIT vs. N.R. Portfolio (P) Ltd. would not be applicable on the peculiar facts and circumstances of the present case. The deeming fiction u/s 68 is purely based on facts and explanations submitted by the assessee and if all the evidences duly support the nature and source of the credits alongwith explanation which has not been found to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remium on such shares there are catena of judgments which are in favour of the assessee and some are in favour of the revenue. Thus, in such matters what is required to be seen is the onus which has been discharged by the assessee and the material available with the AO to doubt the explanation and the evidences filed by the assessee and also inquiry conducted by the AO to rebut or controvert the explanation of the assessee. Accordingly, we are not dealing with those judgments because, Ld. Counsel has relied upon as many as 65 judgments and it would be very difficult and cumbersome to deal with each and every judgments. ITA NO. 584/DEL/2018 ASSTT. YEAR 2006-07 29. In appeal pertains to penalty proceedings u/s 271(1) against the same quantum of addition of ₹ 55 lacs received by way of share application money. The AO has levied penalty of ₹ 18,51,700/- on account of addition of ₹ 55 lacs and since we have already deleted the quantum on merits, therefore, levy of penalty u/s 271(1) has become infructuous. Thus, same is deleted. 30. In the result appeal of the assessee is partly allowed. ITA NO. 6016/DEL/2018 ASSTT. YEAR 2007-08 31. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khemka Enterprises P Ltd. KOTAK CH. No. 000106 05-06-06 15,00,000 Satish Goel A-58 6 06/12/2006 Sunny Cast Forge Ltd, R N Khemka Enterprises P Ltd. UTI CH. No. 066925 13-06-06 15,00,000 Satish Goel A-58 18 06/12/2006 Singhal Securities PJJteK R N Khemka Enterprises P Ltd. UTI CH. No. 067121 06/10/2006 10,00,000 Satish Goel A-58 18 20-06-06 Pitambra SecuritiesjUtd. R N Khemka Enterprises P Ltd. KOTAK CH. No. 000081 20-06-06 10,00,000 Satish Goel A-58 29 20-06 06 Brite Indu Resourc yttd. R N Khemka Enterprises P Ltd. KOTAK CH. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 25/11/2006 Hillridge Investments Ltd. R N Khemka Enterprises P Ltd. UTI CH. No. 080433 27/11/2006 63,00,000 Bhagaria Loan A-63 13 09/12/2006 Parshudh Finance Co. P Ltd. R N Khemka Enterprises P Ltd. HDFC CH. No. 264486 09/12/2006 10,00,000 Satish Goel Via Bhageria A-63 25 09/12/2006 Hillridge Investments Ltd. R N Khemka Enterprises P Ltd. HDFC CUT No. 273420 09/12/2006 10,00,000 Satish Goel Via Bhageria : A-63 25 26/12/2006 Hillridge Investments Ltd. R N Khemka Enterprises P Ltd. UTI CH. No. 080475 26/12/2006 30,00,000 vimal Bhagaria A-63 38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning u/s 147 and addition of ₹ 1,66,65,000/- u/s 68 on account of share application money and addition of ₹ 83,325/- being 0.5% of the alleged accommodation entry. Here in this case also exactly similar reasons have been recorded, wherein following details of the amount received by the assessee from various companies have been mentioned. Bank Book Date From To (Seneflfcsary) Bank Cheque/RTGS Ovetftise Tihiotawgfe m. Pg. no ; 09/05/2006 Karishma Industries ltd. RMP Holdings P Ltd. Kotak V Ch. No. 000457 Ifl W?8 S 15,00,000 Satlsfo toan 12 09/05/2006 World Link Telecom Ltd. RMP Holdings P Ltd. Kotalc Ch. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/5.00,000 Vimail Sfcagariya A-m 8 19/01/2007 Sunny Cast forge Ltd. RMP Holdings P Ltd. UTI Ch. No. 066991 19/01/2007 10,00,000 Vimal Bftagasriya A 15 27/02/2007 Shalini Holdings Ltd, RMP Holdings 9 U L UTI Ch. No. 080659 27/02/2007 40/50.000 Vmal Shagariya Loan 50 | 36. Here in this appeal also, the reasoning and finding of the AO are exactly the same and also the finding of the Ld. CIT (A). Thus, in view of our finding given in the aforesaid appeal, we hold that, firstly, the reopening u/s 147 is valid and all the conditions raised by the assessee before us on various grounds are dismissed; and secondly, the additions made on merits are directed to be deleted in view of the finding given in the earlier years, because in this year also similar facts and reasons are permeating. Accordingly, appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Services Pvt. Ltd. RN KHEMKA ENTERPRISES AXIS Ch. NO. 102420 12.02.08 10,00,000 VIMAL BHAGRI A-94 15 38. Here again in the impugned assessment order by and large facts remain the same, as the Ld. AO without rebutting any of the evidences filed and also replies and evidences received from the parties in response to notice u/s 133(6) has proceeded to make addition simply based on information of the investigation wing. No further inquiry has been conducted by the AO. The alleged accommodation entry especially when the alleged entry operators, Shri Surender Kumar Jain and Shri Virender Kumar Jain have denied providing any kind of accommodation entry to the assessee. The AO has mainly referred to quantum proceedings to Shri Surender Kumar Jain and Shri Virender Kumar Jain to conclude that they were entry operators and based on this he has drawn a presumption that assessee also must have taken the accommodation entry from these two persons. Nowhere, he has verified the bank statement of the companies subscribing to the share nor examined the veracity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e documents were examined and it has been noticed that none of the documents e.g. balance-sheet. Auditors report etc filed in respect of above said parties bear the contact number(s} and rubber stamp of the company issuing the name stamps of its directors who signed these documents which proves that these documents are nothing but an attempt made by the assessee to divert the facts of the case. Further these copies show similar types of signatures appended in it and names of directors are not mentioned in any of these document and in view of these facts, the genuineness of transactions remained unverifiable. 42. Not only that, the AO has also issued notices u/s 133(6) to all the companies from whom share capital has been received by the assessee in order to verify the creditworthiness and genuineness of the transactions. However, as stated by the AO, no replies have been received or furnished by these companies in response to the notice u/s 133(6) and in most of the cases these letters have been received back unserved with the postal remark no such company /left . The relevant observation of the AO in this regard is reproduced as under:- Notices u/s 133(6) of IT Act were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es could not be complied with that does not mean that all the documents furnished by the assessee in support of identity, genuineness of the transaction and creditworthiness are to be discarded. He again referred and relied upon series of judgments that if assessee has discharged the onus found then no addition u/s 68 can be made without there being any adverse material on this regard. 44 On the other hand Ld. DR submitted that the very fact that these parties have not responded to the notices u/s 133(6) and the list of these companies giving share application money to the assessee has been found to be in the nature of accommodation entry arranged by Shri Surender Kumar Jain group, then the only inference which can be drawn is that the entire credit is not only bogus but also in the nature of accommodation entries which deserved to be confirmed and in support he relied upon the same judgment as has been relied upon by him in the appeal for the assessment year 2006-07. 45. After considering the relevant finding given in the impugned orders as well as submissions made by the parties, we find that there is a slight change in the facts and circumstances in the present year as com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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