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TMI Blog2020 (2) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... n hand, the AO has not brought any material on record as a result of any enquiry. The commission issued to the DIT (Inv), Kolkata has not yielded any result. Thus except on the reliance of the statement of Shri Anand Sharma, the AO was not having either any document in his possession or any other facts detected as an outcome of enquiry. The said statement of Shri Anand Sharma has not made any allegation regarding transaction of investment made by M/s. Abhishek Advisory Pvt. Ltd. Therefore, the documentary evidence produced by the assessee cannot be ignored or rejected. Hence, in view of the above facts and circumstances of the case, we do not find any error or illegality in the order of the ld. CIT(A). Thus the appeal of the Revenue is dismissed. - ITA No. 691/JP/2017 - - - Dated:- 21-2-2020 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Vedant Agarwal, Advocate For the Revenue : Shri B.K. Gupta, CIT-DR ORDER PER VIJAY PAL RAO, JM This appeal by the Revenue is directed against the order of ld. CIT(A), Ajmer dated 27-06-2017 for the Assessment Year 2012-13. The Revenue has raised the following ground:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., copy of Company s Master Data generated from MCA Website showing the status of the company as active, copy of Income Tax Returns for the Assessment Years 2009-10 to 2013-14 as well as the assessment order passed u/s 143(3) in the case of M/s. Abhishek Advisory Pvt. Ltd. by ITO, Ward- 1(1), Kolkata for the Assessment Year 2008-09. Thus the assessee explained that while passing the scrutiny assessment for the Assessment Year 2008-09, the AO examined the source of funds being share capital received by M/s. Abhishek Advisory Pvt. Ltd. from its shareholders and found to be genuine. Once the said company was having the sufficient funds and received the funds on account of share capital then the investments made by the said company in the shares of the assessee cannot be doubted. The assessee has made elaborate submissions before the ld. CIT(A) and also referred to various decisions as well as documentary evidences produced before the AO. The ld. CIT(A) after going through the record and material noted that Shri Anand Sharma, in his statement has not disclosed the name of M/s. Abhishek Advisory Pvt. Ltd. as a company or concern controlled by him for providing accommodation entries. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he list maintained by him in his computer. The ld. DR further contended that even the financial statement of these companies were also part of his system which shows that he was managing and controlling all these companies for providing accommodation entries. The ld. DR has referred to the financial statement of the investor companies and submitted that there is no real estate business carried out by these companies except receiving the money in the shape of share capital and investing the same as providing the accommodation entries in the garb of investment in shares or loans provided to various persons. The ld. DR has further referred to the assessment order and submitted that the AO in order to verify the genuineness of the transactions issued notices u/s 133(6) of the Act to M/s. Abhishek Advisory Pvt. Ltd. but the said letter was received back unserved with the remarks that no such company on this address. The AO then issued a commission to DDIT (Inv.), Kolkata with the request to conduct an enquiry and give an enquiry report on the issue. The DDIT (Inv.), Kolkata then sent a report dated 25/26-03-2015 which shows that the information was sought to be gathered from Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the AO that creditworthiness of the said company is not proved. The ld. DR thus relied on the order of the AO as well as following case laws. 1. Pr. CIT vs NRA Iron Steel (P) Ltd. (2019) 103 Taxmann.com 48 (SC). 2. ITO vs APJ Construction Pvt. Ltd (ITA No. 722/Del/2015 for the Assessment Year 2005-06 dated 31- 12-2019 Delhi Trib) 3. Prem Castings (P) Ltd. vs CIT (2017) 88 Taxmann.com 189 (All) 2.3 On the other hand, the ld.AR of the assessee submitted that the assessee produced all the relevant documentary evidences to prove the identity and creditworthiness of the investor company as well as the genuineness of the transactions. He has referred to the assessment order passed by the AO for the Assessment Year 2008-09 dated 06-01-2010 and submitted that the AO has verified the share capital received by the said company and accepted the same. Further, the said company has been regularly filing the return of income and also shown as active as per company Master Data of ROC. The ld.AR of the assessee has also filed the assessment order dated 6-12-2019 for the Assessment Year 2017-18 and submitted that the AO has passed the scrutiny assessment order in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order but he can support the order of the AO based on the record available in the assessment order. In support of his contentions, the ld.AR of the assessee relied on following decisions. 1. Mahindra Mahindra Ltd vs DCIT, (2009) 122 TTJ 0577 / 22 DTR 0362 2. KWL Pro Exports vs ACIT 110 ITD 059 The ld.AR of the assessee further contended that the notices issued by the AO u/s 133(6) of the Act to M/s. Abhishek Advisory Pvt. Ltd. may be at old address and not at the current address. The ld.AR of the assessee referred to the annual return filed by the said company and submitted that the correct address is available on record but the AO might have issued the notices at wrong address. In support of his contentions, the ld.AR of the assessee relied on the order dated 01-07-2019 of the Coordinate Bench of this Tribunal in the case of M/s. Izzy Metals Pvt. Ltd. vs ITO (ITA No.75/JP/2018 for the Assessment Year 2012-13). The ld.AR of the assessee thus supported the findings of the ld. CIT(A) and submitted that the addition made by the AO is based on surmises and conjectures and without having any tangible material to show that the transaction is not genuine. 2.4 We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accommodation entries is not relevant in the case of investor company M/s. Abhishek Advisory Pvt. Ltd. The entire basis of the addition made by the AO is turned out to be contrary to the actual facts. Once the investor company is a wholly owned company of the group concerns of the assessee itself then there is no reason to have role of Shri Anand Sharma in making the investment by this company in the shares of the assessee company. The very basis of the AO that transaction is bogus being the accommodation entries provided by Shri Anand Sharma through his concern, has no legs to stand upon. Therefore, the proceedings conducted by the AO on the assumption of accommodation entries provided by Shri Anand Sharma stands vitiated by the fact that the investor company was neither owned nor controlled nor managed either directly or indirectly by Shri Anand Sharma as on the date of transaction of investment in shares or on the date of search on. 02-07-2013. Therefore, the case of the Department is solely based on surmises that this company is one of the concerns managed and controlled by Shri Anand Sharma and his involvement in providing the accommodation entries is only the assumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 1(1), Kolkata The AO has stated that during the course of hearing, the ld.AR of the said company explained the return filed, relevant documents in support of the return and also produced the books of account for examination. The AO also recorded the date of incorporation as well as the share capital and premium received by the said company to the tune of ₹ 10,63,3,500/-. The AO also conducted the enquiry from various shareholders by issuing notices u/s 133(6) of the Act to verify the transactions of share capital and share premium received by the said company. Only after satisfaction from the enquiry, the AO accepted the same. Thus even in first year of its incorporation, the said company received the share capital and share premium to the tune of ₹ 10,63,3,500/- and the said amount was also in the books of said company and even at the time of investing this amount of ₹ 3.98crores in the shares of assessee company. The transaction of payments of the share application money is through banking channel. We further note that the said company at the time of investment is fully owned by the group concerns as stated above and the directors of the said compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t having any documentary evidence or corroborative evidence which cannot be considered as incriminating material to show that the assessee has received the accommodation entries in the shape of share capital/ share application money/ premium. Even the ld. CIT(A) has specifically asked the AO to produce the copy of statement of Shri Anand Sharma as well as other seized materials . It appears that since the AO was not having any evidence in his possession, therefore, he did not respond to the said request of the ld. CIT(A). The ld. CIT(A) has discussed all these facts in para 5.3 to 5.11and has given his findings in para 5.12 which are reproduced as under:- 5.3 I have gone through the assessment order, statement of facts, grounds of appeal and written submission carefully. It is seen from para 3.1 of the assessment order that a search and survey action was carried out in the case of Shri Anand Sharma and hisgroup by-the DDIT Investigation Kolkata on 02.07.2013. According to AO, the search action resulted into collection of evidences and other finding which conclusively proved that Shri Anand Sharma, through a web of concerns run and operated by him, was engaged in providi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at list name of M/s Abhishek Advisory Pvt. Ltd. is appearing, therefore, the AO vide letter dated 11.05.2017 was requested to furnish following information 1. You are requested to furnish copy of the statement of Shri Anand Sharma and other seized / impounded material on which the AO has relied upon for making the addition of ₹ 3,99,00,000/- u/s 68 in respect of the share application money and share premium received by the appellant from M/s Abhishek Advisory Pvt. Limited. 2. At Page No. 11 of the assessment order, a scanned copy of list of companies has been pasted. You are requested to clarify whether the list is part of the statement of Shri Anand Sharma because at Page No. 10, the AO has mentioned at para 4.(vii) in view of the above statement dated 02.07.2013, as per reply of Question No. 8 of Shri Anand Sharma, it was accepted by him that he is controlling around 500 companies and M/s Abhishek Advisory Pvt. Ltd. is one of them. We are producing list of company operated by Shri Anand Sharma which was maintaining in a accounting software is as under . If the scanned copy of the list pasted at Page No. 11 is not the part of the statement of Shri Anand Sharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigation Wing, Kolkata as well as the documents and papers seized during the course of search but he has not discussed anything about the documents and papers seized during the course of search in the case of Shri Anand Sharma and investigation carried out by the Investigation Wing, Kolkata. Again at para 5.(ii), the AO has stated on examination of the materials provided by the investigation Wing, it has been noticed that assessee had received accommodation entry from the above mentioned fictitious company floated by Shri Anand Sharma . But the AO has not discussed what was the material provided by the Investigation Wing and examined by him. 5.8 As the notice issued u/s 133(6) to M/s Abhishek Advisory Pvt. Ltd., Kolkata was returned unserved, therefore the AO issued commission u/s 131(1)(d) to DDIT Investigation, office of the DGIT Investigation Kolkata. According to AO, the commission was issued to record the statement of Shri Anand Sharma for confirmation of the fact of providing accommodation entries as aforementioned so as to ensure that the assessee company can not take shelter before the appellate authority. The DDIT has reported that summons u/s 131 was sent to Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 The appellant has furnished following documentary evidences to prove identity and creditworthiness of the share applicant and genuineness of the transaction: 1. Confirmatory letter of the share applicant. 2. Copy of the acknowledgement of the ITR 4 and 5 (A.Y. 2013-14). 3. Copy of Balance Sheet and P L account dated 31.03.2016. 4. Bank statement of the share applicant wherein the payments made to the appellant toward share application money are appearing. There is no cash deposit immediately before or after the issue of cheques to the appellant company. 5. Copy of ROC document (Form No. 20B, Form No. 23AC, Form No. 23ACA, Form No. 66, Form No. 23B) and Annual Return for the relevant period (FY 2011-12) and (F.Y. 2015-16). 6. Copy of assessment order dated 06.01.2010 of M/s Abhishek Advisory Pvt. Ltd. for the A.Y. 2008-09 passed u/s 143(3) r.w.s. 148. In the assessment order, the AO has mentioned that M/s Abhishek Advisory Pvt. Ltd. was incorporated on 01.10.2007 and as on 31.03.2008, it had paid up capital of ₹ 55,97,500/- and share premium reserve of ₹ 10,63,33,500/-. The AO did conduct enquiries u/s 133(6) with various shareholders of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Once the assessee has discharged his primary onus then burden is shifted on the AO to bring on record the contrary material or facts to disprove evidence produced by the assessee. The AO except narrating the modus operandi as disclosed by Shri Anand Sharma, has not referred to any documentary evidence or other material to support his view and findings. Therefore, the findings of the AO are merely an assumption and based on conjecture and surmises and not on any tangible material. As regards the decision of Hon'ble Supreme Court in the case of Pr. CIT vs NRA Iron Steel (P) Ltd (supra) relied on by the ld. DR, the Hon'ble Supreme Court has specifically mentioned the facts of the said case in para 9 as under:- 9 The judgement cited hold that the Assessing Officer ought to conduct an independent enquiry to verify the genuineness of the credit entries. In the present case, the Assessing Officer made an independent and detailed enquiry, including survey of the so called investor companies from Mumbai, Kolkata and Guwahati to verify the creditworthiness of the parties, the source of funds invested and the genuineness of the transactions. The field reports r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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