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TMI Blog2021 (3) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... Y ITA No. Quantum of Addition (Rs.) Addition on a/c of commission 2011-12 9215/Del/2019 19,46,054/- @ 2% on Rs. 9,73,02,862/- 2012-13 9216/Del/2019 18,31,396/- @ 2% on Rs. 9,15,69,783/- 2013-14 9217/Del/2019 8,89,278/- @ 2% on Rs. 44,4,63,915/- 2014-15 9218/Del2019 60,15,1857- @ 2% on Rs. 30,07,59,258/- 2015-16 9219/Del/2019 26,28,215/- @ 2% on Rs. 13,14,10,732/- 2016-17 9220/Del/2019 34,48,800/- @ 2% on Rs. 17,24,39,987/- 2017-18 9221/Del/2019 22,22,900/- @ 2% on Rs. 11,11,44,981/- 2. The facts in brief are that the assessee-company, M/s. Amarjeet Motor Finance Limited was incorporated on 4.4.1981 initially situated in Jalandhar, Punjab up to 12.11.2010 and thereafter the office was shifted to Delhi in Sector-15, Rohini; and later on w.e.f. 27.04.2017 its registered office again shifted to Pitampura, Delhi and still running at the same address as per information given to the ROC. The company is also registered as NBFC Company vide Registration No.B.06.00513 dated 27.08.2001 with Reserve Bank of India and has been filing its annual return, i.e., NBS 9 with Reserve Bank of India. As per Memorandum of Association, the company is doing business of inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not based on any material or information discussed in the assessment order. He called for the bank statements of the assessee-company and KYC documents from Bank of India, DCB bank, Yes bank and Indus Ind bank, New Delhi u/s. 133(6) and on the verification of the same he found that total deposits were as under:- A.Y. Union. Bank Of India, A/c. No. 307801010917938 DCB Bank, A/e. No. 04822700000578 Yes Bank,. A/c. No. 000283900 0 00341 Indusind Bank, A/c, No. 0169- FTO886-050 Total Deposits. 2011-12 3,19,22,182 6,53,80,68 9,73,02,862 2012-13 4.60,41,583 1,10,000 4,54,18,200 9,15,69,783 2013-14 40,36,435 1,10,75,816 29,3 51 44463915 2014-15 30,07,13,987 45,271 30 07,59258 2015-16 13,14,10,732 1735,81 4,10,732 2016-17 17,24,39,987 17,24,39,987 2017-18 11,11,44,981 11,11,44,981 5. From the verification of the bank statement, Assessing Officer noted that the amounts are credited and then are immediately withdrawn from the bank and the debits and credits entries show that assessee is not having any real business; hence it shows that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/- as proposed vide show cause notice dated 17.12.2018. Addition on account of accommodation entries taken by Sh. Sanjay Bhandari and his group companies i.e. M/s. Avaana Software & Services Pvt Ltd., M/s. Saniech IT Services Pvt Ltd., M/s. Santech Investments Pvt Ltd., M/s. OIS Aerospace Pvt Ltd., M/s. OIS Advanced Technology Pvt Ltd.. M/s, Micromet ATI India Pvt Ltd., M/s. Offest India Solutions Pvt Ltd., M/s. Himalayan Helicorp Pvt. Ltd., M/s. S B Hospitality & Services Pvt Ltd and M/s. Santech Energy System & Services Pvt Ltd. will be made. Since the assessee has filed inaccurate particulars of income. I am satisfied that the provision of Section 271(1)(c) of the IT Act, are attracted on the issue and therefore, penalty proceedings u/s.271(1)(c) of the Act will be initiated separately. (Addition of Rs. 19,46,054/-)" 8. The Ld. CIT (A) after incorporating the entire legal and various submissions on merits of the assessee which has been incorporated till page 33 of the impugned order, has confirmed the order of Assessing Officer after observing and holding as under:- "4.1. By additional ground no. l and 2, the appellant has challenged validity of the assessment order on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises of 8h, Sanjay Bhandari and his group companies for receipt of sale proceeds of shares and repayment of loan. These documents also established that the appellant had already discharged its claim on the share capital/loans given through accommodation entries since, the consideration in cash for the same had already been received by the entry providers. Under these facts and circumstances, the decisions relied upon by the Ld. AR become distinguishable on facts because in those cases particularly in the case of Kabul Chawla (Supra), there was no incriminating material found as a result of search. Accordingly, I uphold the basis of addition, made u/s 153A, Hence additional ground no. 1 and 2 being without any basis are dismissed. 4.2. Other grounds of appeal from. 1 to 4 raised in Form No. 35 are general, in nature regarding validity of assessment and In view of the decision regarding additional ground no. 1 and 2, the same become infructuous and hence no specific adjudication, is separately required. 4.3. Ground no. 5 to 9 are pertaining to assessment of 2% commission income on accommodation entries provided to various companies of Sanjay Bhandari Group. As already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion which can be said to be relating to result of any search. In so far as the allegation made by the AO that the assessee-company was found to be non-existent at the address given, is incorrect. The registered office of the company as per records was duly shown and disclosed in the statutory records. And all the communications have been received by the company at the said address only. Later on, the address of Rohini was shifted to unit number 205, second floor, Aggarwal city Mall, Road No.44 Pitampura, Delhi. It has been filing the return of income with Income Tax Department, ROC and RBI from its registered office since beginning, and therefore, such an allegation of the AO is completely baseless. One very important fact, here in this case, is that which is also evident from the assessment order that, neither the search was conducted on the directors of the company nor on any official or authorized person of the company. Apart from that, neither any document was found during the course of search proceedings either from the possession of the assessee company or its directors. 10. Ld. Counsel further submitted that, one of the document which has been referred in the assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Member. The same is as under:- S.No. Query Clarification 1. Whether the assessee /premises belonging to the assessee was covered during the search operation on the Sanjay Bhandari Group Yes the case of the assessee was covered during the search operation u/s 132 of the Income Tax Act of 1961. on 27.04.2016 along with other cases of Sanjay Bhandari Group 2. If the assessee premises belonging to the assessee was covered in the Search operation of Sanjay Bhandari Group? What was the basis of search and the finding there upon of that search? The department was in possession of information that group companies of Sanjay Bhandari (namely SB Hospitality & Services Pvt Ltd, Avaana Software & Services Pvt Ltd, Micromet ATI India Pvt Ltd etc.) have taken bogus entries of share capital along with huge premium. Shri Sanjay Bhandari has routed his unaccounted income through the assessee company ant! brought back into the books of his group company in the form of investments. The search u/s 132 of the Act was carried out at the registered address of the assessee company i.e. at G~ 10/66, Ground Floor, Sector-15, Rohini. Delhi. During the search, the assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s.132 No.5516 dated 27.04.2016 is enclosed. 2. Further, it is submitted that the facts of the present case are peculiar. It is a case where search & seizure action took place at the given address of the appellant company. However, during search action, it was found that no such company was running at the given address. Finding of a fact during search action that the said company is only on paper further gets corroborated from the fact that this company was managed by accommodation entry provider Sh. Deepak Aggarwal. Going by the principle laid down by Hon'ble Delhi High Court in the case of Kabul Chawla (ITA No. 707/2014) regarding finding of incriminating evidence, it is to highlight that the fact of non-existent company is an incriminating information gathered during the search & seizure action. The spirit behind the decision of Delhi High Court in the case of Kabul Chawla (supra) is that these has to be some incriminating document/ finding/ information which would not have come to light in the absence of search & seizure action. In the present case, the finding of fact of appellant entity as non-existent entity/paper company is incriminating finding based on search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee-company is very old company incorporated way back on 4th April, 1991 and has been duly registered as NBFC with RBI. Since then Assessee Company has been regularly filing its return with Income Tax Department, under the Income Tax Act, Returns with ROC under the Companies Act and also before RBI, being NBFC. It has been regularly filing its return of income along with audited accounts. The balance-sheet as on 31st March, 2011 reflects share capital reserve and surplus of more than Rs. 20.65 crores. It has investments of more than Rs. 18.27 crores and loans and advances given for the business purpose was at Rs. 2.43 crore and cash and bank balance of approximately Rs. 10 lakhs. The interest income has been shown at Rs. 19.65 lakhs. Same is the position in all the subsequent years' balance-sheets. Thus, it cannot be held that it is non-existing company having no real business. 17. Admittedly, during the course of search nothing incriminating or any iota of document has been found or seized from the possession of the assessee company. In fact, as per the assessment order itself nothing was found from the possession of assessee as no one was present at the premises. The entire pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition have been made in those cases, notional addition cannot be made in the hands of the assessee. 18. The contention of ld. CIT-DR is that the assessee-company was not found at the given address during the search, and itself constitutes an incriminating evidence cannot be upheld, because when an action has been taken under section 153A then the basic premise is that the addition has to be based on something found or unearth during the course of search in the case of the assessee for a particular assessment year especially in the case of unabated assessment. Here, in this case, the assessment for the Assessment Year 2011-12 to 2015-16 had attained finality. The period for the assessment year 2015-16 and 2016-17 nothing has been found from any enquiry or carried out in the case of the assessee that assessee was providing any accommodation entry and the business carry on by the assessee is sham or paper transaction, hence the addition cannot be made on the basis of any hypothesis presumption albeit it has to be based on evidences or material or enquiry conducted. The addition here in this case has purely been made on surmises and presumption that assessee might have earned 2% comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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