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TMI Blog2023 (5) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies produced for examination could not explain the credit of Rs. 5.5 crore in the books of the investee companies nor could he produce any material evidence to counter the statements recorded on oath of the entry operator involved and the erstwhile directors of investor companies. 3. On the facts & in the circumstances of the case, the Ld. CIT(A) has failed to appreciate that the affidavits stated to be furnished by the erstwhile directors of Investor Companies and the entry operator based at Kolkata wherein they retracted their earlier statements recorded on oath during the search and post search proceedings were furnished at the fag end of the assessment proceedings i.e. on 30.03.2015 and that no effort was made by said directors and entry operator to do the same earlier inspite there being ample time and opportunity available for the same. 4. On the facts & in the circumstances of the case, the Ld. CIT(A) has failed to appreciate that the entry operator has time and again admitted that he has provided accommodation entries to the willing beneficiaries by charging commission and accepted it as his nature of business in case of many of the companies of the group searched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Inspector, that the entities were not existing at the address mentioned and the assessee did not produce the Directors for examination but only filed all the documentary evidences. 6. Having gone through the entire Assessment Order, we find that the addition has been made solely based on the statements of the individuals and report of the Inspector with regard to absence of company at the addresses mentioned. 7. Aggrieved, the assessee filed appeal before the ld. CIT(A) who deleted the addition made by the AO. 8. Affronted by the order of the ld. CIT(A) deleting the addition, the Revenue filed appeal before the Tribunal. 9. During the arguments before us, the ld. DR, Sh. H. K. Choudhary vehemently argued relying on the Assessment Order and the report of the investigation. 10. The ld. DR argued that the documents filed by the assessee did not prove the genuineness of the transactions and creditworthiness of the investors. It was argued that the assessee did not comply to the directions of the Assessing Officer to produce the principle officer of the investor company for examination and such production of the persons was necessary as the evidence gathered at the time of sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emise on same day 30.10.2012 and no opportunity of cross examination has been given to the assessee. It was argued that the addition has been made solely on the basis of said retracted statement and no single evidence/material was found during the course of search which could prove that appellant was engaged in taking accommodation entries in the form of share capital. It was argued that even if the retraction is filed late at the fag end, the assessee has requested for cross examination of alleged entry operator which has not been provided which is violation of principle of natural justice. Even statements were provided first time with the assessment order though request for statement and cross examination was made before AO. It was argued that on perusal of statement of alleged entry operators Shri Santosh Kumar Shah and others it is apparent that they introduced funds in investor companies, if it is assumed that his statement is correct then addition if any can be made in above said companies not in the assessee companies. It was argued that all the documents to prove identity, creditworthiness of investor companies and genuineness of transactions were submitted during the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the hands of the assessee is retracted statements of alleged entry operators and erstwhile directors of investor companies and failed to bring on record any material / evidences which could prove that the assessee company was engaged in taking accommodation entries in the form of share capital and also no single incriminating evidence / material was found during search and seizure action. In this regard, the ld. AR has relied upon the judgment rendered by the Hon'ble Delhi High Court in the case of PCIT vs. Anand Kumar Jain (HUF) in ITA 23/2021 & CM APPL 5385/2021 and drawn our attention to para 7 of page 7 of said judgment which is as under:- "7.... .That statement alone cannot justify the additions made by the AO. Even if we accept the argument of the Revenue that the failure to cross-examine the witness did not prejudice the assessee, yet, we discern from the record that apart from the statement of Mr. Jindal , Revenue has failed to produce any corroborative material to justify the additions. On the contrary we also note that during the course of the search, in the statement made by the assessee, he denied having known Mr. Jindal . Since there was insufficient material to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant. However, that the same statement was retracted by filing affidavit in the assessment proceedings. 7. The A.O. in the assessment order has emphasized on the modus-operandi used by the entry operators to introduce cash in various small companies operated by them, through layering such cash in various bank accounts. However, even after conducting inquiries on the bank accounts of investor companies, no single entry of substantial cash deposited in bank accounts of investor companies were pointed out by the A.O. in the cash trail annexed with the assessment order. 8. The enquiry report of ITI of investigation, carried out on the old addresses of the investor companies and drawing a conclusion on the basis of wrong appreciation of fact that there is no infrastructure and manpower, hence these companies are paper or jamakharchi companies, is not correct, as these companies are NBFC which do not require much infrastructure and employees, on account of nature of business activities carried out. 9. The A.O. made various allegations m the assessment order on the basis of inquiry report received from ITI of investigation, which was not confronted to the appellant during the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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