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TMI Blog2017 (1) TMI 1484X X X X Extracts X X X X X X X X Extracts X X X X ..... concerns who did not reply though notice u/s 133(6) was served upon them, it is seen that as per record Lokesh Tools & Trading Pvt. Ltd. who it is claimed had paid ₹ 2,50,000/- vide Instrument No.- 405868 and Suraj Cycle Mart Pvt.Ltd. who also has paid ₹ 2,50,000/- by Instrument No.517394 the record shows that the details of banks; amounts; instruments and dates were all along available on record wherein no further enquiry was considered necessary by the AO. The fact remains that the notices have been served upon these parties. Thus, in a case were 4 out of 6 concerns admittedly reply the two who though do not reply but their evidences remain unassailed per se cannot be the reason for sustaining the addition in the facts and circumstances of the present case. In the facts where all details are available notice u/s 133(6) have been served, four have replied thus, if the department still had any further doubts about their existence or genuineness then their presence should have been enforced as the whereabouts of these two concerns were known to the department as notices were served upon these parties at the address given is a fact on record. In the afore-mentioned p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineness of the transaction. ( ii) That the addition had been made without pointing out any defect or irregularity in the evidences filed by the assessee. 6. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the said addition despite the fact that the same has been made on the basis of material and evidences collected at the back of the assessee without giving it an opportunity to rebut the same in clear violation of the principle of natural justice. 7. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the addition despite the same being made on the basis of statements of some person without giving assessee an opportunity to cross examine and in clear violation of principle of natural justice. 8. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the addition rejecting the contention of the assessee that the notices under section 133(6) to the shareholders having got replied directly to the A.O., no adverse inference against the assessee can be drawn. 9. The appellant craves leave t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.10.03 Techno Com Associates Pvt.Ltd. SBBJ New Rohtak Road 24589 5,00,000 22.01.04 Virdi Travel Pvt.Ltd. Jai Laxmi Coop Bank Fatehpuri 3472 385329 3,00,000 22.01.04 Lokesh Tools Trading Pvt.Ltd. Jai Laxmi Coop Bank Fatehpuri 3568 405868 2,50,000 22.01.04 Suraj Cycle Mart Pvt.Ltd. Jai Laxmi Coop Bank Fatehpuri 3450 517394 2,50,000 06.02.04 Natraj Communication Pvt.Ltd. Jai Laxmi Coop Bank Fatehpuri 3033 257445 2,50,000 05.11.03 V R Traders Pvt.Ltd. SBBJ New Ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich were duly served upon them and there is no allegation on record that any notice was returned unserved. It was reiterated that replies have been received from four shareholders which factual position has been confirmed by the AO himself in the Remand Report dated 10.02.2014. The relevant extract of page 356 which is a copy of the Remand Report was heavily relied upon. The same is reproduced hereunder for ready-reference:- As per the direction notice u/s 133(6) were issued to the above six companies on 08.01.2013 for 22.01.2013. But no reply was received on 22.01.2013. But later on, on receiving the reminder letter no.F.No.CIT(A)- XIII/2013-14/223 dated 13.01.2014 letter from this office no.612 dated 20.01.2014 was issued to the assessee for 28.01.2014 wherein he was informed of the above facts. Meanwhile on 27.28-01-2014 the reply from four creditors out of six has filed the reply in response to notice u/s 133(6) which are given as below:- 1. Techno Com Associates Pvt.ltd. 205, Delhi Chambers, Delhi Gate, Delhi-02. 2. Virdi Travels Pvt.ltd. 2250, Naya Bazar, Delhi-06. 3. V.R.Traders Pvt.Ltd. 1930, Gali Durga mandir, Lal Kuan, Delhi-06. 4. Natraj Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no independent belief of the AO. Accordingly, it was submitted that since the requisite criteria itself is not fulfilled nor is there any nexus of the reasons recorded with the formation of any belief that income has escaped assessment, the re-opening in the circumstances it was submitted is bad in law. The power it was submitted has been mechanically exercised by the AO based only on the report received from Investigation Wing. The information forwarded by the Investigation Wing, it was submitted has been blindly accepted by the AO and no reference to any independent exercise has been made which may indicate that there is any independent application of mind of the AO. On a reading of the reasons, it was submitted that it is not possible to understand how the AO termed the receipt of money as bogus accommodation entries as there is no investigation carried out by the AO, no witnesses has been examined by him who implicated the assessee. It was argued that solely on the basis of information of the Investigation Wing and relying upon some statements recorded in some other case by the Investigation Wing the AO has blindly accepted them as gospel truth. It was his submission t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion it was submitted is supported by the decision of CIT, Orissa vs Orissa Corporation Pvt.Ltd. [1986] 159 ITR 78 (SC). 5.2. It was also submitted that despite having the Remand Report before him the CIT(A) also proceeded to conclude the issue in haste against the assessee referring to facts which are not relatable to the present case. Accordingly, it was argued that the impugned order also fortifies the fact that the action has been sustained by upholding the jurisdiction and the addition without any application of mind even at the stage of the First Appellate Authority. In support of the said argument, attention was invited to the following finding of fact recorded at page 11 of the impugned order:- The Assessing Officer on receipt of the affidavits from the Assessee called for the information under Section 133(6) from the 6 parties, who had executed the affidavits. The letters were received back unserved. ( emphasis provided) 5.3. The said finding it was submitted is contrary to facts on record as in the Remand Report there is no allegation that letters were received back un-served. The AO only notes that initially no reply was filed thereafter repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 ITAT Delhi]. Reliance was placed upon CIT vs Fair Finvest Ltd. [2013] 357 ITR 146 (Del.) Hon ble Jurisdictional High Court; DCIT vs M/s G.S.Control I.P.Ltd. [ITA No.1560/Del/2010 dated 13.03.2015]; and Jurisdictional High Court in the case of CIT vs Goel Sons Golden Estate P.Ltd. [ITA No.212/2012 dated 11.04.2012]. 6. The Ld. Sr. DR in reply addressing the decision relied upon by the Ld.AR submitted that reliance placed upon the various decisions of the ITAT or the High Court is not of any relevance in the facts of the present case as it is a case of a Private Limited Company and not of a Public Limited Company. This differentiation it was submitted has been brought out by the CIT(A) at page 30 of his order and the Revenue would want to heavily rely upon the same. The relevant extract from the impugned order is reproduced hereunder:- In contrast to the above judgements, in the present case, the assessee is a private limited company and in the factual matrix, I have held that the assessee has not been able to discharge the initial onus and has not been able to establish the identity, creditworthiness of the share applicants and the genuineness of the transaction. Though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was invited to the fact that the assessee is not a bogus company and is engaged in the business of market financial products like credit cards, personal loans, insurance policies, car loans etc. of Standard Chartered Bank and this factual finding by the AO, it was submitted remains unrebutted on record. Accordingly, it was his prayer that the addition deserved to be deleted. 8. I have heard the rival submissions and perused the material available on record. I note from the record that the AO addressing the nature of assessee s business has noted as under:- The assessee company was engaged in the business of market financial products like credit cards, personal loans, insurance policies, car loans etc. of Standard Chartered Bank and earned commission thereon. During the year, the assessee has shown total receipts of ₹ 73,12,079/- as compared to preceding year s receipts of Nil rupees. 8.1. It is seen that the assessment was re-opened on the basis of some information that Sh. Mahesh Garg, Entry Operator had provided accommodation entries to some bogus concerns. The statement allegedly recorded and relied upon were not confronted to the assessee. The assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their details/ confirmation as under :- 1. Technocom Associated Pvt. Ltd. 205, Delhi Chambers, Delhi Gate. Delhi-02. 2. Virdi Travels Pvt. Ltd. 2250, Naya Bazar, Delhi-06. 3. V R Traders Pvt. Ltd. 1930, Gali Durga Mandir, Lal Kaun, Delhi-06. 4. Natraj Communication Pvt. Ltd. B-2, Kiran Garden, Uttam Nagar, New Delhi-59. However as per our record of submissions, it is very clear that Appellant has duly submitted the evidences of all the six share subscribers at the time of assessment proceedings before the Ld. A.O. vide letter dated 16.11.2011 in which said six share subscribers details is also submitted alongwith following evidences. A photocopy of our letter dated 16.11.2011 is enclosed herewith alongwith evidence are submitted. Date on which entry taken Name of the a/c holder of entry giving account Bank from which entry is given Branch of entry giving bank A/c no. of entry giving account Instrument no.by which entry taken Value entry taken 21.10.03 Techno Com Associates Pvt.Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Ld. A.O. has mentioned in his Remand Report that the assessee has been given sufficient opportunity to produce the same and further new evidences can not produced under Rule 46A of the Income Tax Rule,1962. But as per our record the Appellant has duly submitted the required documents as stated above of said six share subscribers at the time of assessment. The Appellant company has not submitted any new evidences at the time of hearing of Appeal as per rule 46A. So, Ld. A.O. has wrongly stated in his Remand Report that these are new evidences and not covered under Rule 46A. The fact can be verified from the Department assessment files. Therefore, the Appellant prays to quash the illegal order or such other order may be passed which justified the Appellant against the additions. Reopening of the case u/s 148 is not legally valid. Hence, it is prayed that addition u/s 68 of ₹ 2050000/- be deleted or any other order may be justified with appellant. ( emphasis provided) 8.2. Accordingly, in the circumstances admittedly the repeated factual inaccuracies made in the impugned order that notices could not be served on the six parties and replies could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d right from assessment stage have not been assailed negatively at any of the stages by the AO nor by the CIT(A) or for that matter even before the ITAT. Qua the other two concerns who did not reply though notice u/s 133(6) was served upon them, it is seen that as per record Lokesh Tools Trading Pvt. Ltd. who it is claimed had paid ₹ 2,50,000/- vide Instrument No.- 405868 and Suraj Cycle Mart Pvt.Ltd. who also has paid ₹ 2,50,000/- by Instrument No.517394 the record shows that the details of banks; amounts; instruments and dates were all along available on record wherein no further enquiry was considered necessary by the AO. The fact remains that the notices have been served upon these parties. Thus, in a case were 4 out of 6 concerns admittedly reply the two who though do not reply but their evidences remain unassailed per se cannot be the reason for sustaining the addition in the facts and circumstances of the present case. In the facts where all details are available notice u/s 133(6) have been served, four have replied thus, if the department still had any further doubts about their existence or genuineness then their presence should have been enforced as the wher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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