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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 ..... - Dated:- 9-5-2023 - DR. B. R. R. KUMAR, ACCOUNTANT MEMBER AND SH. YOGESH KUMAR US, JUDICIAL MEMBER For the Assessee : Sh. Rajat Jain, CA Sh. Akshat Jain, CA For the Revenue : Sh. H. K. Choudhary, CIT-DR ORDER The present appeals filed by the Revenue and Cross Objections filed by the assessee are directed against the orders of the ld. CIT(A)-30, New Delhi dated 24.06.2016. Since, the issue involved in all the appeals are similar, they were heard together and being adjudicated by a common order. 2. The revenue has raised the following grounds of appeal in ITA No. 4778/Del/2016: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in deleting the addition of Rs. 5,50,00,000/- made by AO on account of unexplained cash credit u/s 68 of the IT Act. 2. On the facts in the circumstances of the case, the Ld. CIT(A) has failed to appreciate that the director of the investor companies 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 involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The AO primarily based on the statements of Sh. Babu Lal Banka (Entry Operator), Sh. Santosh Kumar Shah (Entry Operator) and the Directors of the investor companies Sh. Sanjay Shah (Former Director), Sh. Sanjay Kumar Dugar (Current Director), Sh. Sanjay Mittal (Current Director), Sh. Rakesh Kumar (Current Director), Sh. Manohar Lal Nangalia (Former Director), Sh. Vijay Gopal Gupta (Current Director), Sh. Sanjeev Dixit (Current Director). Sh. Surender Prasad, (Former Director), Sh. Manoj Lakhani (Former Director), Sh. Kumar Gaurav (Current Director), Sh. Somvanshi Manoj (Current Director), Sh. Naveen (Current Director), Sh. R. P. Aggarwal (Former Director), Sh. Raj Kumar Jain (Former Director), Sh. Sanjeev Kumar Jain, (Former Director), Sh. S. K. Hait (Current Director), Sh. Deepak Kumar (Former Director), Sh. Pankaj Bansal (Current Director), Sh. Mukesh Tripathi (Current Director) held, relying on the enquires and the information gathered by 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 Orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anything, whatever has been done it has been done by some other person. Statement of New Directors of investor companies. Bank enquiries of bank account of investor companies made by investigation wing. Physical verification of address of the companies where investor companies have made investment by investigation wing. Physical verification of old shareholders of investor companies by investigation wing. Physical verification of old director's address of investor companies. Physical verification of old address of investor companies by investigation wing. 12. Rebutting the arguments of the ld. DR, Sh. Rajat Jain, ld. AR relying on the order of the ld. CIT(A) argued that statement of alleged entry operator Shri Santosh Kumar Shah and old directors were retracted by them by filing affidavit dated 30.03.2015. Statement of alleged entry operator Shri Santosh Kumar Shah was recorded u/s 132(4) in the case of his search on residential premise 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th ledger account of investor company ix. Audited financial statements of the assessee company for the financial year 2008 - 09 showing issued, subscribed and paid up capital of the assessee company x. Copy of board resolution passed by the investors companies along with Minute's Book. xi. Copy of board resolution and Minute's Book of the assessee company. xii. Documents related to Correspondence between the allottee allotting company. xiii. Copy of detail of shares allotment maintained by registrar share transfer agent of the assessee company. xiv. Audited financial statement along with tax audit report in Form 3CD, if applicable for the financial year 2008-09 of investor companies. xv. Copy of relevant portion of bank statements of investor showing the source of funds transferred by investors in the bank account of the assessee company for shares transaction. 14. The ld. AR of the assessee has contended that the sole basis of making addition 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be made in the case of investor companies, whose identity and genuineness, is proved and they are also assessed to tax. 3. The bank accounts of the investor companies were closed earlier to the search and therefore, the adverse inference drawn by Assessing Officer in the subsequent period under consideration is not correct. 4. Present directors of investor companies during the course of assessment proceedings, have confirmed about the investment made in the appellant company during the statement recorded in assessment proceedings. 5. The statements of the erstwhile directors of the investor companies relied upon by the A.O., were stereotyped as the same question and answer were recorded and the same have been retracted in the affidavits filed in the assessment proceedings. 6. The AO relied on the statements recorded of alleged entry operators and adverse inference drawn in the case of all the investor companies, that these companies used to provide accommodation entries to appellant. 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the appellant has also explained the source of source. Thus, the adverse view taken by the A.O. on the basis of ITI of investigation inquiry report, is not substantiated by any incriminating document, found during search action u/s 132 of the Act or subsequently, in the case of appellant. 15. It is also clear that these investor companies are having adequate assessed net share capital/ premium/ warrants of the appellant company and source of investor companies, has been explained from sale of stock of shares. 16. The case of the appellant is assessed u/s 153A, being as searched case and no document /incriminating document was found during action u/s 132 and subsequent proceedings, which corroborate that the appellant has taken accommodation entries from alleged investor companies. The A.O. has also assessed the case of investor companies u/s 147 of the Act and made addition of the investment in share capital/ premium/ warrants of the appellant company, having alleged reason to believe that these investor companies provided accommodation entries, however failed to bring on record any cogent evidence to prove that nexus. 17. From the above discussion, it is clear that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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