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M/s. Hillman Properties Pvt. Ltd., A-7/6, Jhimil Indl. Area, Shahdara, New Delhi. vs. The Income Tax Officer, Ward-12(4), New Delhi.
October, 11th 2019

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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