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TMI Blog2022 (2) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with the provisions of the Income Tax Act in conducting the enquiries. Needless to say, the revenue shall follow principles of natural justice while concluding the proceedings. Appeal of the assessee is allowed for statistical purposes. - ITA No. 6841/Del/2017 - - - Dated:- 8-2-2022 - Sh. A. D. Jain, Vice-President And Dr. B. R. R. Kumar, Accountant Member Assessee by : None Revenue by : Sh. Satpal Gulati , CIT DR ORDER Per Dr. B. R. R. Kumar, Accountant Member The present appeal has been filed by the assessee against the order of ld. CIT(A)-11, New Delhi dated 12.09.2017. 2. Following grounds have been raised by the assessee: 1. That the learned CIT erred in law in rejecting the appeal merely on surmise and conjectures and without any justification for the same. 2. That the learned CIT erred in law in ignoring the documentary evidence filed in the Assessment Proceedings the identity, capacity and fact of financing the amount in issue amounting to ₹ 40,29,22,500/-. He further erred in considering the issuance of notices u/s. 131 to the financing companies and drawing adverse inference for non-compliance of the notice u/s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 M/ s Diksha Viniyog Pvt. Ltd. 16 , 00 , 000 (0 . 15 ) NIL 6 M/ s Direct Exports Pvt. Ltd. 2 , 42 , 60 , 000 (36 . 70 ) NIL 7 M/ s Gnex Projects Pvt. Ltd. (Formely known as ASL Projects Pvt. Ltd.) 19 , 40 , 000 (0 . 32 ) NIL 8 M/ s Kashi Promoters Pvt. Ltd ( Name changed to Ruhil Promoters Pvt. Ltd.) 10 , 93 , 00 , 000 (6 . 54 ) NIL 9 M/ s Maa Durga Steel Works Pvt. Ltd 17 , 48 , 45 , 000 2 . 65 53 , 82 , 71 , 913 10 M/ s Mercury Digital Services Pvt. Ltd 1 , 17 , 60 , 000 (0 . 85 ) 5 , 812 11 M/ s Pheasant Stamping Pvt. Ltd. 2 , 53 , 80 , 000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tements, the AO has inferred that all these entities have been incorporated for the purpose of providing accommodation entries only. 7. The directors of these companies were neither produced by the assessee before the AO nor did they present themselves for personal deposition in response to the summons issued u/s. 131 of the Act by the AO. 8. Based on the above facts, the AO has arrived at the conclusion that these parties have been established with the sole objective of providing accommodation entries and the creditworthiness of these parties along with the genuineness of the transactions have not been proved and therefore, the AO has treated the unsecured loans as unexplained credits in the books of assessee and has made the addition u/s. 68 of the Act. The relevant portion of the assessment order is reproduced as under: 8. The AR's were asked to explain the reasons as to why they are not producing the directors of these companies despite various opportunities have already been provided. They were also informed that the details of the companies from whom unsecured loans are claimed to have been received reveal that the creditworthiness and genuineness of the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been advanced. All this point out that the transaction does not satisfy the criterion of genuineness along with creditworthiness. d) In the Bank statement of almost all the entities there are huge debit and credit entries of huge amount. After every credit entry there is debit entry of almost the same amount on the same date or next date leaving a minimum credit balance In view of the facts stated above the creditworthiness and genuineness of the transaction of alleged unsecured loans claimed to be received from the said parties cannot be said to have been proved. 12. From the balance-sheet, P L account, ITR and copies of their bank statements of all the above mentioned entities and the facts discussed above, it is clearly established that these entities were only engaged in providing accommodation entries. 13. In view of facts as mentioned above as well as the facts that Directors of none of the above mentioned entities appeared for personal deposition in response to the summons and even the assessee company did not produce the directors of these companies with their books of account, it is clearly established that neither their creditworthiness nor genuineness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manish Gupta M/ s Sunil Shandilya Co. Chartered Accountants) No business activity during the year under consideration 7 Gnex Projects Pvt. Ltd. ( Formely mown as ASL Projects Pvt. Ltd.) PI- 31 , Second Floor, Room No. - 2 , Madan Park, East Punjabi Bach. New Delhi- Smt. Shakuntla Khemka Sh. Mavank Khemka M/ s Sunil Shandilya Co. Chartered Accountants) Real Estate business 8 Kashi Promoters Pvt. Ltd ( Name changed to Ruhil Promoters Pvt. Ltd.) DSIWS 38 , 5 t h Floor, DLF Tower, Shivaji Marg, Moti Nagar, New Delhi- 110001 Sh Neeraj Ruhil Sh Sanjeev Ruhil M/ s Devendra Dahiya Co. ( Chartered Accountants) Real Estate Housing project Business Company 9 Maa Durga Steel Works Pvt. Ltd F- 31 , F/ F, Madan Park. Ashoka Park Metro, New Delhi- 110026 Sh Prem Parkash Sh Harish M/ s Sunil Shandilya Co. ( Chartered Accountants) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s related to the one company are somehow engaged with the other companies in some other capacity. None of these companies is having any real business transaction with the assessee company. None of these companies is having the creditworthiness to extend interest free loans to the assessee. The source of funds in these companies is either the money received through share premium or sundry creditors as shown in the balance sheet. The financial statements are nothing but mere formal statements drawn with the purpose of window dressing the real transactions of money laundering. All these companies are nothing but shell companies incorporated with the purpose of routing of funds. The total facts and circumstances as discussed above clearly establish that these loan transactions are nothing more than sham transactions which have been undertaken by use of shell companies. 11. The ld. CIT(A) held that on consideration of the facts of the case discussed in detail in the assessment order and in the above paragraphs along with the documents filed by the assessee, the explanations given by the AR during the course of appellate proceedings, the assessee has not been able to discharge the bur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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