Referred Sections: Section 147 of I.T. Act, 1961 Section 148 of I.T. Act, 1961 Section 139(1) Section 133(6) of the I.T. Act, 1961 Section 68 of the I.T. Act, 1961. Section 143(1)
Referred Cases / Judgments: Pr. CIT-4 vs., G & G Pharma India Ltd., 2015 (10) TMI 754 (Del.) Pr. CIT-6 vs., M/s. N.C. Cables Ltd., 2017 (1) TMI 1036 (Del.); Pr. CIT vs. Meenakshi Overseas Pvt. Ltd., 2017 (5) TMI 1428 (Del.) (HC) CIT-5 vs., Jatin Investment Pvt. Ltd., 2017 (2) TMI 342 (Del.) (HC). Yogendrakumar Gupta vs., ITO [2014] 366 ITR 86 ACIT vs., Rajesh Jhaveri Stock Brokers (P.) Ltd., [2007] A.G. Holdings Pvt. Ltd., vs. ITO 21 taxmann.com 34 CIT vs., Nipun Builders & Developers (P.) Ltd., 350 ITR407 (Del.) (HC). CIT vs., N.R. Portfolio Pvt. Ltd., 29 taxmann.com 291 (Del.) (HC). CIT vs., Focus Exports (P.) Ltd., [2015] 228 Taxman 88 (Del.) (HC). CIT vs., Neelkanth Ispat Udyog Pvt. Ltd., [2013] 81 DTR 214 (Del.) (HC). CIT vs., N. Tarika Investment Pvt. Ltd., 40 taxmann.com 225 (Patna) (HC). CIT vs., Titan Securities Ltd., 32 Taxman 306 (Del.) (HC). PCIT vs., Vikram Singh Order of Hon’ble Delhi High Court Dated 25.08.2017.
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "C": DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA.No.6530/Del./2014
Assessment Year 2001-2002
M/s. Hillman Properties The Income Tax Officer,
Pvt. Ltd., A-7/6, Jhimil vs., Ward-12(4),
Indl. Area, Shahdara,
New Delhi.PAN AAACH0547K New Delhi.
(Appellant) (Respondent)
For Assessee : Shri Amit Goel, C.A.
For Revenue : Ms. Rakhi Vimal, Sr. D.R.
Date of Hearing : 07.10.2019
Date of Pronouncement : 11.10.2019
ORDER
PER BHAVNESH SAINI, J.M.
This appeal by Assessee has been directed
against the Order of the Ld. CIT(A)-XXVII, New Delhi, Dated
29.08.2014, for the A.Y. 2001-2002.
2. Briefly the facts of the case are that information
was gathered from DIT (Inv), New Delhi that the assessee
company had received accommodation entries of
2
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
Rs.25,00,000/-. Since the amount was not reflected in the
balance sheet filed by the assessee along with the original-
return, action under section 147 of I.T. Act, 1961 was
taken. Notice under section 148 of I.T. Act, 1961 was
issued and served upon the assessee. The assessee filed
letter stating that the return filed earlier under section
139(1) may be treated as return filed under section 148 of
the I.T. Act. The A.O. issued statutory notices for
completion of the assessment. Reasons for reopening of the
assessment were also provided to assessee. The assessee
filed written submission objecting the re-assessment
proceedings which were disposed off separately by passing
speaking order. The assessee stated that the A.O. has
failed to give any details about the information and
documents which have been relied upon by the A.O. at
assessment stage. However, the A.O. noted that for
initiation of action under section 148 have been conveyed
to the assessee and hence, the allegation of the assessee
are incorrect. The assessee was asked to produce the
3
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
principal officer of the following company from whom the
accommodation entries were taken :-
1. Arun Finvest Pvt. Ltd., Rs.15 lakhs on 17.03.2001.
2. Polo Leasing & Finance P. Ltd., Rs.10 lakhs on
17.03.2001.
2.1. The assessee did not file any reply on the date
fixed. Bank statements of above said companies were called
for under section 133(6) of the I.T. Act, 1961 for the
financial year under appeal, which were placed on record.
The Bank statements of the assessee was also received in
response to notice u/s 133(6). On going through the Bank
statement of the assessee with Bank of America DLF Centre
Sansad Marg New Delhi, it was noticed that the assessee
received following entries from entry providers.
17.10.2000 5,00,000/-
30.10.2000 38,50,000/-
02.11.2000 41,00,000/-
17.03.2001 25,00,000/-
17.03.2001 15,00,000/-
17.03.2001 10,00,000/-
Rs.1,34,50,000/-
Less cash withdrawal Rs. 3,20,000/-
Rs.1,31,30,000/-
4
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
2.2. The modus operandi of the transaction was
that the assessee company had paid cash to the entry
providers and received cheques or pay order against the
said cash paid. This method has been proved from the
transactions appeared in the Bank Accounts of the
companies M/s Arun Finvest Pvt Ltd. and M/s Polo
Leasing & Finance P.Ltd. The A.O. further noted that in
Bank Account No. CA 598 maintained with M/s Federal
Bank Ltd., Karol Bagh New Delhi, of M/s Polo Leasing &
Finance (P) Ltd., cash of Rs.10,00,000/- was deposited
in Bank Account No. CA 567 on 17.03.2001 which was
transferred to Bank Account No. 598 of the same
company. From Bank Account 598 the said amount of
Rs.10,00,000/- was transferred to the assessee
company's Account vide cheque no 916291 of
17.03.2001. Similarly, in the case of other company
M/s Arun Finvest Pvt Ltd., cash of Rs.15,00,000/-
(Rs.8,00,000/- and Rs.7,00,000/-) was deposited in
Account No. 2852 on 17.03.2001 from where the
amount in question was transferred to Account No. CA
5
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
2813 of M/s M/s Arun Finvest Pvt Ltd. on same day
17.03.2001. The amount of Rs.15 lakhs was transferred
on 17.03.2001 to the account of assessee company by
cheque No.169334. From the facts stated above, it is
proved that the whole amount of Rs.1,31,30,000/-
deposited in Bank Account with Bank of America, is
assessee's own money which is routed through different
persons who were entry providers. Show cause notice
was issued to assessee as to why the total deposit of
Rs.1,31,30,000/- in exchange of cash payment should
not be treated as unexplained and undisclosed income
of assessee. The assessee did not appear on the date
fixed nor any written submissions have been filed. The
A.O. noted that from the information received from the
DIT (Inv.), it was noticed that the Directors of the above
accommodation entry provider Companies had admitted
before Investigation Wing that the said companies were
utilised for providing accommodation entries. The A.O.
in view of the above facts and looking to the non-
cooperation of the assessee, added the amount under
6
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
section 68 of the I.T. Act, 1961. As per the balance-
sheet of the assessee, the share application money at
Rs.58,97,200/- was pending for allotment on
31.03.2000. During the year under assessment the
assessee allotted shares for Rs.20 lakhs and
Rs.30,72,200/- was still pending as share application
money. It means the balance amount of Rs.8,25,000/-
was refunded to the investors during the relevant A.Y.
2001 -2002. From the Bank Account of the assessee,
no such entry of Rs.8,25,000/- is appeared. It was,
therefore, noted that the assessee has refunded the
amount in cash, the source of which is not explained.
The A.O, therefore, made further addition of
Rs.8,25,000/- on account of unexplained refund of
share application money. The assessee challenged the
reopening of the assessment as well as addition before
the Ld. CIT(A) who has allowed the appeal of the
assessee partly. Therefore, we would be dealing with
the issues involved in the present appeal. It may also
be noted here that assessee filed additional evidences
7
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
before the Ld. CIT(A), on which, comments of the A.O.
have been called for.
3. As regards Ground No.1 regarding initiation
of re-assessment proceedings, assessee submitted
before the Ld. CIT(A) that the reasons recorded are only
unsubstantiated allegations and, therefore, cannot be
construed as reasons leading to the bonafide belief
adequate for reopening of the assessment. The reasons
recorded by the A.O. for reopening of the assessment
was also submitted by assessee and the same are
recorded in the impugned order as under :
"An information regarding entry operators and their
beneficiaries was received from DIT(Inv.)-l, New Delhi
vide Dy. No. 1399 dated 2.3.2006 and DIT (Inv.)
2006-07/A.E./1536 dated 5.2.2007 which reflected
that the assessee maintained an account with Bank
of America and received accommodation entries as
per details given below :
8
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
Name of
Beneficiary Beneficiary Value of Instrumen Date on the Bank Branch Account
Name Bank name entry t by which entry account from of of the
taken entry taken holder of which entry entry
taken entry entry giving giving
giving given Bank account
Account
M/s Hillman Bank of 15,00.00 169334 17.03.200 Arun CA-2813
1 Karol
Properties P. America Finvest KVB
Ltd. Pvt. Ltd.
Bagh
M/s Hillman Bank of 10,00,000 916291 17.3.2001 Polo
Properties P. America Leasing
and Fedral Karol
Ltd.
finance Bagh ` 598
Pvt. Ltd.
The above mentioned amount of Rs.25,00,000/- were
credited in the said account of the assessee. The report
received from the DIT (Inv.) revealed that the enquiries
were initiated to probe into some Bank account which
were used to issue cheques to entry seekers or
beneficiaries against cash paid by them to the entry
operators. The assessee company has received entry
from Ms Arun Finvest Pvt. Ltd. and M/s Polo Leasing
and Finance Pvt. Ltd. and these companies were
utilizing for providing accommodation entry by Sh.
Ashok Kumar Gupta. Sh. Baldev RajK Mukesh Gupta,
Sunder Pal Singh and Rajan Jaiswal has operated
number of Bank accounts.
9
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
The Balance Sheet filed along with the return of
income shows that there is increase in authorized capital
of Rs.10,00,000/- as compared to immediate preceding
year. During the year under consideration, assessee has
also made the investment in a new property of
Rs.46,95,000/-. The information sent by the
Investigation Wing suggest that there is transaction of
Rs.25,00,000/- as mentioned above, is accommodation
entry only. Accordingly the amount of Rs.25,00,000/- is
escaped income and taxable under deeming provisions
of the Income-tax Act. Hence, in view of the information
received from the Investigation Wing and perusal of the
Balance Sheet suggest the Rs.25,00,000/- is the
undisclosed income of the above assessee for A.Y. 2001-
02.
On the basis of the information sent by the
Investigation wing and accompanying documents, I am
satisfied that this transaction of Rs. 25,00,000/- as
mentioned above, is accommodation entry only.
Accordingly, the amount of Rs.25,00,000/- is
10
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
unaccounted money belonging to the assessee which
has been utilized for the entry and represents income
escaping assessment. Accordingly. I have reasons to
believe Rs. 25.00.000/- has escaped assessment and
the escapement has been on account of failure on part of
assessee to truly and fully disclose all material fact
therefore it is a fit case for initiation of proceedings u/s
147 of the IT Act. "
3.1. The Ld. CIT(A) referring to the above reasons
noted that A.O. had specific information regarding
accommodation entries received by assessee including the
Bank account number, instrument number and the same
was found credited in assessee's Bank account with Bank
of America. The reasons recorded specifically states that
there was failure on the part of assessee to fully disclose
all material facts in return of income filed by them and,
therefore, the initiation of 147 proceedings have been done
properly after verifying the information received from
Investigation Wing with return of income specially with the
balance-sheet filed by the assessee. Therefore, the
11
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
assessee's claim that reasons recorded are only
unsubstantiated allegations and cannot be construed as
reasons to believe is not acceptable. The Ld. CIT(A) also
distinguished the Judgment relied upon by assessee and
noted that in the case of assessee A.O. had recorded
proper reasons for reopening of the assessment and,
therefore, decisions cited by assessee are distinguishable.
The Ld. CIT(A) referred to Judgment of Hon'ble Delhi High
Court in the case of M/s. A.G. Holdings Pvt. Ltd., 352 ITR
364 and reproduced the same in the impugned order and
noted that facts are identical as in the case of the assessee
as the return of income was only processed under section
143(1) and notice under section 148 was also issued after
04 years. The Ld. CIT(A) also noted that in the case of
assessee sufficient material is available on record which
are adequate enough to form the belief that income
chargeable to tax has escaped assessment on account of
assessee's failure to furnish full and true particulars in
the return of income filed by assessee. The Ld. CIT(A) also
relied upon Judgment of Hon'ble Supreme Court in the
12
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
case of Rajesh Jhaveri Stock Brokers Pvt. Ltd., 291 ITR
500 in which similarly reopening was held to be valid
where return was only processed under section 143(1)(a)
of the I.T. Act. The Ld. CIT(A) also relied upon Judgment of
Hon'ble Supreme Court in the case of Purushottam Das
Bangur 224 ITR 362 (SC) wherein it was held that "based
on information received from investigation wing, the
Assessing Officer can without any further investigation form
the belief that income chargeable to tax had escaped
assessment." In the present case, the information received
by the Assessing Officer from investigation wing was
specific that accommodation entries were received by the
assessee and the information mentioned the Bank Account
no, instrument no. etc of the accommodation entries. The
information further mentions that the amounts were found
credited in assessee's Bank account with Bank of America.
Therefore, the Assessing Officer has correctly initiated the
re-assessment proceedings in the matter. The Ld. CIT(A),
accordingly, upheld the initiation of the re-assessment
proceedings in the matter and rejected this ground of
13
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
appeal of assessee.
4. The Learned Counsel for the Assessee reiterated
the submissions made before the authorities below and
submitted that it was only borrowed satisfaction based on
information received from Investigation Wing and that A.O.
has not applied his mind to the information received from
Investigation Wing. The reopening of the assessment is
invalid and bad in law. He has relied upon Judgment of
Hon'ble Delhi High Court in the cases of Pr. CIT-4 vs., G &
G Pharma India Ltd., 2015 (10) TMI 754 (Del.); Pr. CIT-6
vs., M/s. N.C. Cables Ltd., 2017 (1) TMI 1036 (Del.); Pr. CIT
vs. Meenakshi Overseas Pvt. Ltd., 2017 (5) TMI 1428 (Del.)
(HC) and Pr. CIT-5 vs., Jatin Investment Pvt. Ltd., 2017 (2)
TMI 342 (Del.) (HC).
5. On the other hand, Ld. D.R. relied upon the
Orders of the authorities below and submitted that
assessee had not discharged the onus lay upon it to
explain the issue. It was a private transaction and no
details were submitted by assessee for verification of the
14
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
transaction. The A.O. received specific information from
Investigation Wing that assessee has received
accommodation entries which were credited in the
accounts of assessee which were further received from the
above parties and in their accounts cash have been found
deposited. Therefore, reopening of the assessment is
justified in the matter. The Ld. D.R. relied upon the
following decisions.
5.1. Judgment of Hon'ble Gujarat High Court in the
case of Yogendrakumar Gupta vs., ITO [2014] 366 ITR 86
[Guj.] in which it was held as under :
"Where subsequent to completion of original
assessment. Assessing Officer, on basis of search
carried out in case of another person, came to
know that loan transactions of assessee with a
finance company were bogus as said company
was engaged in providing accommodation entries,
it being a fresh information, he was justified in
initiating reassessment proceeding in case of
assessee."
15
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
5.2. Judgment of Hon'ble Supreme Court in the case
of ACIT vs., Rajesh Jhaveri Stock Brokers (P.) Ltd., [2007]
291 ITR 500 [SC] in which it was held as under :
"Where Hon'ble Supreme Court held that so long
as the conditions of section 147 are fulfilled, the
Assessing Officer is free to initiate proceedings
under section 147 and failure to take steps under
section 143(3) will not render the Assessing
Officer powerless to initiate reassessment,
proceedings, even when intimation under section
143(1) has been issued. ADANI EXPORTS v. DCIT
[1999] 240 ITR 224 (Guj) was distinguished."
5.3. Judgment of Hon'ble Delhi High Court in the
case of A.G. Holdings Pvt. Ltd., vs. ITO 21 taxmann.com 34
[Del.] [HC] in which it was held as under :
"Where held that there is no requirement of law
that reasons recorded for initiating reassessment
procedure, should also accompany notice issued
under section 148."
16
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
6. We have considered the rival submissions. In
this case the A.O. has received specific information from
Investigation Wing that assessee has received
accommodation entries from two parties, the details of the
same are mentioned in the reasons which have not been
disputed by the assessee as well. The report received from
the DIT (Inv.) Wing further reveals that enquiries were
initiated to probe into some Bank account which were used
to issue cheques to entry seeker or beneficiary against cash
paid by them to the entry operator. The A.O. has
specifically recorded the fact in the assessment order that
initially in different account of the Investors, the cash have
been deposited from where the amount have been
transferred to the another accounts of Investors and then
transferred to assessee. These informations are specific to
show that against the cash, entry have been provided to the
assessee by entry providers. The assessee failed to produce
any evidence before the authorities below. Therefore, it is a
fit case of escapement of income on account of failure on
the part of assessee to disclose fully and truly all material
17
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
facts. Therefore, reopening of the assessment is wholly
justified in the matter. The objections of the assessee have
been separately disposed of by the A.O. in which no
infirmity have been pointed out by the assessee. At the
stage of recording of the reasons for reopening of the
assessment, all relevant facts leading to belief are justified.
However, the sufficiency of those material is not necessary.
Ultimately, on making further enquiry into the matter, it is
specifically found that cash were deposited in the Bank
accounts of entry providers from where the amounts in
question have been transferred to the account of the
assessee. Therefore, there is escapement of income
chargeable to tax on account of assessee's failure to furnish
full and true particulars. Since in this case return was only
processed under section 143(1), therefore, A.O. was
justified in reopening of the assessment on bringing the
material on record that there was an escapement of income
from assessment in the matter. No infirmity have been
pointed-out in the Orders of the authorities below for
initiation of re-assessment proceedings in the matter.
18
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
Considering the facts of the case and material on record, we
do not find any justification to interfere with the Order of
the Ld. CIT(A) in upholding the initiation of re-assessment
proceedings in the matter. Ground No.1 of appeal of
Assessee is accordingly dismissed.
7. On Ground Nos. 2 and 3, assessee challenged
the addition of Rs.50 lakhs under section 68 of the I.T. Act,
1961.
8. The A.O. made addition of Rs.1,31,30,000/-
under section 68 of the I.T. Act in respect of several entries
provided by the entry providers which were not explained
by the assessee, which were entered into the Bank account
of the assessee.
9. The assessee submitted additional evidences
before Ld. CIT(A) explaining various credits appearing in
their Bank account with Bank of America, details of same
are noted at page-19 of the impugned order. The Ld. CIT(A)
noted from these details that documentary evidences
submitted regarding the sale of shares of BLS Polymers
19
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
Ltd., to M/s. Suma Finance & Investment Ltd., Arun
Finvest (P) Ltd. and Polo Leasing & Finance (P) Ltd. are
letters issued in assessee's `letter head' to the Directors of
the above 03 companies requesting them to accept share
certificates and requesting them to issue acknowledgment
of receiving share certificates to the assessee. The Ld.
CIT(A) also noted that there is no PANs, Bank statements
or Income-tax particulars of the above three
accommodation providers, namely Suma Finance &
Investment Ltd., Arun Finvest (P) Ltd. and Polo Leasing &
Finance (P) Ltd. in the additional evidence submitted by the
assessee. The computation statement of income of the
assessee filed along with the additional evidence indicates
that shares worth Rs.54,25,000/- were sold at the book
value and the assessee had no capital gain from this
transaction. Moreover, the additional evidence indicates
that money received as accommodation entries were
immediately transferred to assessee's sister concern M/s
Shiv Cable & Wire Industries on the same date, i.e.,
17.3.2001 and, therefore, it appears that the assessee
20
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
being an investment company had only acted as conduit for
transferring the accommodation entries to its sister
concern. This explains the assessee's reluctance to furnish
proper evidence at appellate stage. The assessee also failed
to produce any of the Directors of these 03 accommodation
entry provider companies. The A.O. objected to the
additional evidence in the remand report. The Ld. CIT(A)
noted that during appellate proceedings Counsel for
Assessee agreed to produce BLS Polymers Ltd., and M/s.
Shiv Cable & Wire Industries for cross-examination.
However, the assessee was not prepared to produce the 03
accommodation entry providers namely Suma Finance &
Investment Ltd., Arun Finvest (P) Ltd. and Polo Leasing &
Finance (P) Ltd., during appellate proceedings. The Ld.
CIT(A) considering the material on record, deleted the
addition of Rs.81,33,000/- leaving addition of Rs.50 lakhs
which is under consideration in respect of the above 03
accommodation entry provider companies because the
assessee did not produce adequate evidence even at the
appellate proceedings. The assessee did not produce any of
21
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
the Directors of these 03 companies to verify the
transaction and to further verify about cash deposited in
their Bank accounts on the same day when entry was
provided to the assessee. The Ld. CIT(A), therefore, noted
that assessee refused to provide any PAN and other details
of these accommodation entry provider companies and
refused to prove genuineness of the sale of shares to the
above 03 accommodation entry providers even during
appellate proceedings. None of the Directors were
produced for examination even at the remand proceedings
despite A.O. issued summons to them to appear and get
the transactions verified. Counsel for Assessee has shown
inability to produce any of the Directors or responsible
person of these 03 companies for production and
examination before A.O. as well as before Ld. CIT(A). The
Ld. CIT(A), therefore, noted that despite there was no
additional evidences, assessee did not furnish adequate
evidence in respect of these 03 parties and has failed to get
the transactions verified. The Ld. CIT(A) relied upon
decision of Hon'ble Delhi High Court in the case of M/s.
22
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
Titan Securities 215 Taxman 164 (Del.) in which on the
similar circumstances, addition have been confirmed. The
Ld. CIT(A) in the absence of any reliable evidence in
respect of these 03 accommodation entry providers namely
Suma Finance & Investment Ltd., Arun Finvest (P) Ltd.
and Polo Leasing & Finance (P) Ltd., confirmed the
addition of Rs.50 lakhs.
10. Learned Counsel for the Assessee reiterated the
submissions made before the authorities below and
submitted that assessee filed confirmations and amounts
have been received through Banking channel, therefore,
addition should not have been confirmed. He has further
submitted that assessee has sold the shares at face value
[PB-24] and referred to PB-20 on the proposition that
assessee made a request to the A.O. to provide copies of
the statements which were adverse in nature so that
assessee could make proper reply on the same. Therefore,
no addition could be made.
23
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
11. On the other hand, Ld. D.R. relied upon the
Orders of the authorities below and submitted that these
were private transactions and were not listed on any stock
exchange. No adequate evidence were furnished. Assessee
did not furnish PAN and Bank statements to substantiate
genuine transaction. The assessee or other parties did not
earn any income and have NIL income only. No business
activity have been conducted by them. Therefore,
preponderance of probability shows that these were bogus
accommodation transactions. The Ld. D.R. relied upon the
following decisions :
1. CIT vs., Nipun Builders & Developers (P.) Ltd., 350 ITR
407 (Del.) (HC).
2. CIT vs., N.R. Portfolio Pvt. Ltd., 29 taxmann.com 291
(Del.) (HC).
3. CIT vs., Focus Exports (P.) Ltd., [2015] 228 Taxman 88
(Del.) (HC).
4. CIT vs., Neelkanth Ispat Udyog Pvt. Ltd., [2013] 81 DTR
214 (Del.) (HC).
5. CIT vs., N. Tarika Investment Pvt. Ltd., 40 taxmann.com
225 (Patna) (HC).
6. CIT vs., Titan Securities Ltd., 32 Taxman 306 (Del.) (HC).
7. PCIT vs., Vikram Singh Order of Hon'ble Delhi High Court
Dated 25.08.2017.
12. We have considered the rival submissions. The
finding of fact recorded by the authorities below have not
24
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
been disputed by the Learned Counsel for the Assessee.
The A.O. has specifically given a finding of fact that the
above accommodation entry provider companies have
initially deposited cash in their Bank accounts and from
where the funds were transferred to another Bank account
through the Banking channel and then, a cheque have
been given to the assessee. The cash have been deposited
on the same day when transaction was conducted with the
assessee. The assessee did not provide PAN of these 03
accommodation entry providers along with their Bank
statements. The A.O. gathered information from the Banks
on the basis of entries called under section 133(6) of the
I.T. Act. The A.O. had specific information from DIT (Inv.)
that assessee has received accommodation entries from 02
parties. However, later on, it was found that these are good
in number and ultimately, addition was made on 03
accommodation entry providers. The Ld. CIT(A) in his
findings has specifically noted that despite entertaining
the additional evidences, assessee did not furnish any
adequate/evidence while filing additional evidences in
25
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
respect of these 03 parties. The assessee failed to produce
necessary details of these 03 accommodation entry
providers and also shown inability to produce any of the
Directors or responsible person of these 03
accommodation entry providers for examination before
A.O. Therefore, in the absence of any adequate evidence
and that assessee did not produce any of the responsible
person or Directors of these 03 accommodation entry
providers, the authorities below were justified in taking an
adverse inference against these parties, particularly, when
similar amount of cash was found deposited in their Bank
accounts prior to giving cheque to the assessee. Therefore,
even if some statements have been recorded by
Investigation Wing and copies thereof have not been
provided to assessee, but, there was sufficient material
available on record to show that these were bogus
transactions because assessee received accommodation
entries from these 03 parties. Burden is upon assessee to
prove the identity of the parties, their creditworthiness and
genuineness of the transaction in the matter. It may also
26
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
be noted here that the above burden upon assessee have
not been discharged by assessee by any adequate
evidence. Further, the balance-sheet of the assessee
company is filed which shows that assessee has NIL
income, NIL expenditure and only carry forward losses
have been shown. Return is filed at NIL income. No
business activities have been carried out by the assessee.
It is, therefore, difficult to believe that when assessee did
nothing in assessment year under appeal as well as in
preceding assessment year, how the assessee has been
able to sell the shares to such parties who have made cash
deposits in their Bank account before giving cheque to the
assessee. Therefore, the circumstances clearly show that
these were bogus entries received by the assessee in the
name of sale of shares. How the investors would show faith
in assessee when assessee has no worth at all ? The Ld.
CIT(A) has also specifically found on record that the money
received as accommodation entries were immediately
transferred to assessee's sister concern M/s. Shiv Cable &
Wire Industries on the same day on 17.03.2001. It will
27
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
strengthen the finding of fact recorded by the authorities
below that assessee had been acting as a conduit for
transferring the accommodation entries to its sister
concern. These facts clearly show that assessee has
received its own cash money through the transactions
carried out through various accommodation entry
providers. Therefore, these were arranged affairs of the
assessee company only to provide further accommodation
entries to the sister concern. The decisions relied upon by
the Ld. D.R. squarely apply to the facts and circumstances
of the case. Merely showing that transactions were carried
out through Banking channel in the facts and
circumstances of the case is not sufficient to prove the
genuineness of the transaction in the matter. The Hon'ble
Supreme Court in the case of CIT, West Bengal-II vs.,
Durga Prasad More [1971] 82 ITR 540 [SC] and Smt.
Sumati Dayal vs., CIT, Bangalore [1995] 214 ITR 801 [SC]
have held that "Courts and Tribunals have to Judge the
evidence before them by applying the test of human
probability." If the said test is applied in this matter, it is
28
ITA.No.6530/Del./2014 M/s. Hillman
Properties Pvt. Ltd., New Delhi.
clearly established that assessee failed to prove identity of
the accommodation entry providers, their creditworthiness
and genuine of the transaction in the matter. We,
therefore, do not find any justification to interfere with the
Orders of the authorities below in making the addition of
Rs.50 lakhs. Both these grounds of appeals of the
Assessee are dismissed. No other point is argued or
pressed.
13. In the result, appeal of Assessee dismissed.
Order pronounced in the open Court.
Sd/- Sd/-
(PRASHANT MAHARISHI) (BHAVNESH SAINI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Delhi, Dated 11 October, 2019
th
VBP/-
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT "C" Bench
6. Guard File
// BY Order //
Asst. Registrar : ITAT Delhi Benches : Delhi.
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