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TMI Blog2022 (8) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... ubtedly money routed through bogus companies operated by entry operators. No discussion about the details of the financial aspects is available on record nor the financials of the assessee company command share premium. As usually bogus entry operator use circuitatious route of laundering unaccounted money in the garb of share capital and share premium. This is one of the classic such case, the complete absence or non-existence of the parties at the address given is a clinching testimony that these were bogus transactions. In this view of the matter, in our considered opinion, there is no infirmity in the orders of the authorities below and hence we uphold the same. Decided against assessee. - ITA No.1916/DEL/2015 - - - Dated:- 4-8-2022 - Shri Shamim Yahya, Accountant Member And Shri Yogesh Kumar Us, Judicial Member For the Assessee : Sh. R.C. Rai, Adv. And Ms. Kamal Sharma, Adv. For the Revenue : Sh. Paresh Johri, CIT-DR ORDER PER SHAMIM YAHYA, AM, This appeal by the assessee is directed against the order of the Ld. CIT(A)-3, Gurgaon, dated 27.01.2015 pertaining to Assessment Year 2006-07. 2. The assessee has raised following grounds of appeal:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial year ending Share capital introduced Share premium introduced 1. Excel Infracon Pvt. Ltd. 2006 35,00,00/- 3,15,00,000/- Total 35,00,000/- 3,15,00,000/- 4. The Assessing Officer further noted that there was no justification of issuing share of Rs.10 as such huge share premium. He further noted that a search and seizure activity was conducted by the Investigation Wing at the residential and office address of Shri Surendra Kumar Jain and Shri Virendra Jain, who are engaged in providing bogus accommodation entries. The Assessing Officer noted that the assessee has not done any business during the year since its incorporation and their shares have been allotted at share premium in Crores. He noted that these shares were issued to various parties. On verification, none of the parties were verifiable at the address reflected. The assessee neither filed complete information nor any person from investing company was produced. The Assessing Officer further not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs is factually incorrect and it is surprising to note that all these entities that can oblige the assessee by investing in such huge sum are not traceable at their registered office address or the address provided by the assessee. Then, assessee cannot absolve himself by saying that We have also furnished the bank statements of most of the concerns in order to prove the credibility of the investor because producing bank statement of a part period of a single bank without narrations is not enough. And especially when the bank statement so received has a particular trend i.e. the day share capital is credited to the assessee s account, there appears a credit entry of similar amount immediately before for the same day or a day or two prior. And there is no regular outstanding credit balance in the bank account. Also the bank statement is showing no narration of the source of such amount received in hands of investor. This clearly points to the chances of accommodation entry transaction done through multiple layering. Indeed, even the income tax returns filed by the investor company are one of minimal or negligible returned income. So chances of such a investor company havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prising to note that many of these entities that can oblige the assessee by investing in such huge sum are not traceable at their registered office address or at the address provided by the assessee nor are cooperating with them in the tax proceedings. There is no logic why these unrelated far-flung companies of Metro Cities who have no common director or business relation with the promoter group or the assessee in particular, would have invested in lacs and crores in Assessee Company doing no business when there are no returns/dividends given to these investors till date. 3.11 Further, the reply of the assessee is not tenable for following reasons:- a) The Hon ble Supreme Court, while adjudicating in CIT vs Durga Prasad More 82 ITR 540 (SC) Sumati Dayal vs CIT 214 ITR 801 (SC), has laid down the proposition that the Courts Tribunals should see the preponderance of probabilities while considering the evidence furnished by the assessee. In the former case, the hon ble Apex Court observed that It is true that the apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real. In a case of the present kind a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to discharge such onus in the present case, the Tribunal had rightly upheld the additions in the hands of the company. Such view was taken by the Hon ble High Court after duly considering the judicial pronouncements in the cases of CIT v. Steller Investment Ltd. 251 ITR 263 (SC); Lovely Exports (IP) Ltd. vs. CIT 299 ITR 268; CIT v. New Age Infosys Pvt. Ltd.,Delhi High Court in ITA No. 1469 of 2010 decided on 27.9.2010; CIT v. Winstral Petro Chemicals Pvt. Ltd.,Delhi High Court in ITA No. 592/2010 etc. among others. e) View similar to M/s Power Drugs Ltd. Vs. CIT (P H) ITA No. 194 of 2011 in its order dated 14.7.2011 has been upheld by Hon ble Delhi High Court in the case of CIT Vs Nova Promoters Finlease (P) Ltd.(Del.) 342 ITR 2012, vide its order dated 15.02.2012 by reversing the findings given by Ld. CIT(A) and the Hon ble ITAT. It was further held by the Hon ble High Court that uthe evidence adduced by the assessee has to be examined not superficially but in depth and having regard to the test of human probabilities and normal course of human conduct. f) Hon ble Delhi High Court in its judgment dated 20.07.2012 in the case of CIT vs. Independent Media Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree layers of scrutiny- all the materials and held that the claim that the amounts claimed to be received on account of share applications were not based on genuine transactions. The CIT (A) upheld that order, after calling for a remand report. In these circumstances, the conclusion of the Tribunal, that the assessee had discharged its onus, appears to be based on a superficial understanding of the law, and an uninformed one about the overall facts and circumstances of the case....In view of the above reasons, the questions of law in these appeals are answered in favour of the revenue. The orders of the Assessing Officer are restored. The appeals are to succeed and are therefore allowed. h) The decision of CIT Vs. Himalaya International Ltd in ITA No. 1509 of 2006, Judgment dated 30th July, 2007 CIT Vs. Divine Leasing Finance Ltd. (2007), 158 Taxman 440 (Delhi) is also relevant here. i) In the case of ITO W (6)(3), New Delhi Vs. M/s Mayank; Containers (P) Ltd., the Hon ble ITAT, Delhi observed that The AO has further given various observations in respect of each and every entry of these creditors. Hon ble Delhi High Court and Hon ble Supreme Court in above judgments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Before the Ld. CIT(A), the assessee raised preliminary objection. The objection was that out of share capital and share premium has been shown without any incriminating material. The Ld. CIT(A) referred to the various decision in this regard. Finally, the Ld. CIT(A) after his elaborate analysis held that while making assessment u/s153A of the Act. The Assessing Officer is not obliged to only utilize incriminating material collected during the search operation in determining the total income of the assessee. That in the case at hand, the Investigation Unit of the Income-tax department, Delhi had launched a search operation on Shri Surendra Kumar Jain group and in that course, came across crucial documents which pertained to several persons/entities including the assessee. These information were shared with the income tax and other Investigation Units. The information contained in the report which was accompanied by copies of the crucial documents found and seized pertaining to the assessee. These were actually utilized by the Assessing Officer in determining the total income of the assessee. Hence, the ld. CIT(A) held that impugned order was valid. On merits, the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontend that the assessment of the investor companies stood accepted by the concerned assessing officers does not help either as the assessments have been assessed at NIL in case of those disposed after the search in the premises of SK Jain/Virender Jain for there was no question of making additions even on account of commission in such paper companies as it would be merely a case of raising infructuous demands. In the other cases, the assessments were completed ostensibly in 2008 there by falling in period before the said search operation as is the case of the two investors (Karishma and World Link). On a further perusal of the copies of the share application forms, they are all found to be undated and no signatures/initials even affixed in the folio meant for Office though the date(s) of allotment is mentioned as 31.3.06. It is also an undisputed fact that the assessee is a private limited company. In the case of CIT vs N.R. portfolio (P) Ltd. (2013) 87 DTR 162, the Hon ble Delhi High Court, inter alia, has held that in the case of a Pvt. Company, the share applicants are known to it since they are issued on private placement or even on request basis. If the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. The unreasonableness of such a general proposition is writ large in the face of the contention. The assessee-company received the share monies; it even says that the communications sent by it at the addresses did not return unserved, yet when the A.O. requested it- that too only after trying to serve the summons unsuccessfully- to produce the principal officer of the subscribing companies, the assessee developed cold feet and said it cannot help if those companies did not appear and that it was for the A.O. to enforce their attendance. It needs to be remembered that the A.O. did not merely stop with issuing summons; he followed it up with a visit by the inspector who confirmed that no such companies functioned from the addresses furnished by the assessee. Let us see the attitude of the assessee towards discharging its onus in such circumstances. It says that the AO may get the addresses from the RoC's website. We do not think that an assessee can take such an unreasonable attitude towards his onus under s. 68, little realizing that when the finding is that the subscribing companies have not been found existing at the addresses given by the assessee, it is open to the A.O. to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicially accepted as one of the ingredients of the onus cast on the assessee under s. 68, we do into see how proof of the resources of the creditor/ share subscriber can be completely exclude for the seep of the burden. It may not be required of the assessee to give in depth particulars and details about the resources of the creditor or the share subscriber, but the minimum required of him would be, in our opinion information that will prima facie satisfy the A.O. about the creditworthiness. Mere furnishing of the bank statements of the share subscribers without any explanation for the deposits in the accounts may not meet the requirements of s. 68. It may be necessary to know the business activities of the share-subscriber in order to ascertain whether they are financially sound and are able to purchase shares for substantial amounts; if they have borrowed monies for making the investment, whether they were capable for repaying them having regard to the nature of their business, volume of the business, etc. They are very relevant, in our opinion, to establish the creditworthiness of the investors. It is for this purpose that it is necessary for the assessee, in appropriate case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at hand. In view of the elaborate discussion above, I have no hesitation in confirming the addition of Rs.3,50,00,000/- made by the Assessing Officer u/s 68. The assessee fails on these grounds of appeal. 8. In the result the appeal of the assessee is dismissed. 6. As against the above order, the assessee is in appeal before us. 7. We have heard both the parties and perused the records. The first challenge is that the absence of incriminating material, on the basis of which the additions have been made. We find that no such ground was taken before the Assessing Officer. It is clearly emanating from the orders of the authorities below that plethora of documents which were incriminating in nature were found during the search including that of the bogus entry operator. Hence, the claim that no incriminating material was found devoid of any merit when the Assessing Officer was confronting the assessee, he never pointed any such aspect and only after considerable lapse of time, he had an afterthought and made plea before the Ld. CIT(A). The Ld. CIT(A) rightly and cogently rebutted the assessee s plea. Hence, in our considered opinion, the plea that the addition was made de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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