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TMI Blog2024 (12) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... f share capital and premium received during the year finding the same to be mere accommodation entries. The share capital received by the assessee-company during the impugned year so treated as accommodation entry amounted to Rs. 6.70 crores, including share premium of Rs. 990/- per share and was received from three companies namely (i) Prabhav Industries Ltd - Rs. 3.20 crores, (ii) Shri Ganesh Spinners Ltd - Rs. 3 crores & (iii) Juliet Merchants Private Ltd - Rs. 50 lakhs. 4. The Assessing Officer had treated the same as bogus accommodation entry based on information available with him that these entities were bogus paper companies managed and controlled by Shri Shirish Chandrakant Shah. The information was based on evidences gathered during search and survey action conducted on Shirish Shah which revealed him to be involved in providing accommodation entries through several dummy companies owned and managed by him, which fact was admitted to by Shri Shirish C. Shah and his accomplices in these companies who were made Directors in these paper companies, as also the intermediaries who brought together the beneficiaries and the accommodation entry provider, all of whom admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer and also of the ld. CIT(A). On considering all of the above, we find that the ld. CIT(A) has deleted the addition made by the Assessing Officer of share capital and premium amounting to Rs. 6.70 crores without properly and completely appreciating the case made by the Assessing Officer for treating the same as bogus accommodation entry. 8. To put it briefly, while the Assessing Officer had taken into consideration all evidences found during search on Shri Shirish C. Shah, coupled with the statements made of Shri Shirish C. Shah and his accomplices in the accommodation entry business carried out by him admitting to providing only accommodation entry through various companies run and managed by Shri Shirish C. Shah, the ld. CIT(A), we find, has not correctly appreciated the evidences on which the Assessing Officer has relied and has also not considered the consolidated view taken by the Assessing Officer of all adverse material before him, but has gone on to reject each evidence singularly as having no evidentiary value. The ld. CIT(A), we find, has literally not applied his mind at all to the case made out by the Assessing Officer. 9. This is evident from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ips pertaining to 210 companies were found. The directors of these companies admitted that they were only name lenders and notarized declarations to this effect were given by them. PAN cards, seals of the companies, original stamp and all other records pertaining to these companies were found during the search on Shri Shirish Shah. Further and more importantly, the regular accounts as well as accounts related to accommodation entries were found at the premises of Shri Shirish Shah. Thus, during search at the premises of Shri Shirish Shah, several documents pertaining to 210 companies were found which showed that these companies were being used only for providing accommodation entries and the Directors of these companies stated on oath that they were mere name lenders and did not know anything about the activities of the companies in which they were Directors. 11. The assessment order also notes that Shri Shirish Shah himself explained the modus operandi of the whole accommodation entry provided by him through his associates. Search action on Shri Shirish Shah unearthed records of providing accommodation entry by him in "cash sheets" as well as in various accounts maintained in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abhav Industries and noted from the same that this was a cheque transaction, which was recorded by the assessee also in his books of accounts and there was nothing adverse which could be read from this sheet. He noted that there was no cash mentioned in the said sheet anywhere and documents seized have to be read as it is, and finding, therefore, nothing adverse in this sheet, he discarded this piece of evidence as having any evidentiary value against the assessee. While holding so, the Ld.CIT(A), we find, has conveniently ignored the other documents and bank accounts found /revealed during search, noted by the AO to contain all details and the entire money trail of providing accommodation entry as admitted by Shri Shirish Shah in his statement recorded during search. The AO notes a cash sheet and a cheque sheet also to be found, entries in both corroborating the fact of accommodation entries being provided. The excel sheet, considered by the Ld.CIT(A), is we find, one of the many documents found during search, all of which considered together corroborated the fact of Shirish Shah providing accommodation entries. Therefore rejecting the excel sheet as having no evidentiary value b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and discarded the statement of Sh. Ami Mota of having no evidentiary value. 17. The ld. CIT(A) discards the statement of Shri Shirish C. Shah as having no evidentiary value, also for the reason that he did not name the assessee as a beneficiary. The ld. CIT(A) thereafter notes that the documents relied upon by the Assessing Officer were all found at the premises of Shri Shirish C. Shah and not at the premises of the assessee. They were not found to be in the handwriting of any person concerned or related to the assessee-company and he, therefore, held that they could not be used against the assessee. This when the case of the AO rested on the findings of the search that Shirish Shah was providing accommodation entries through various dummy companies and the assessee was noted to have entered into transaction with such alleged dummy companies. The AO's case never rested on any direct finding against the assessee 18. It is clearly evident from the above that the ld. CIT(A) has picked up each piece of evidence to discard it as having no evidentiary value when the Assessing Officer had considered all of them together to make a case against the assessee. As noted above the AO's case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee contended that where the material found during the search on a person pertained or related to a third-person, then jurisdiction under section 153C of the Act was to be assumed by the AO for assessing the income of the said third person in accordance with the provisions of section 153A of the Act. The ld.counsel for the assessee pointed out that initially the provisions of section 153C of the Act were worded so to state that where material "belonging" to a third person were found during search, assessment under section 153C of the Act read with section 153A of the Act was to be framed on the third-person; that subsequently, an amendment was effected to the said section substituting the word "belonging" with the order "pertaining" to a third person. Hon'ble Apex Court, he pointed out, in the case of Vikram Sujitkumar Bhatia, 453 ITR 417 (SC) had interpreted the meaning of the terms "belonging" and "pertaining" and held no difference to the meaning of the said terms and accordingly laid down that the word "belonging" has the same meaning as that to the word "pertaining"; that therefore even prior to 1.6.2015, when the material pertaining to a third-person was found d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n providing accommodation entries through bogus entities, which were all identified. He, therefore, contended that in the absence of any material pertaining to the assessee found during the search on Shri Shrish C Shah, the AO was precluded from assuming jurisdiction to frame assessment under section 153C of the Act. Therefore, he had rightly assumed jurisdiction under section 147 of the Act, on the basis of information in his possession of the assessee having availed accommodation entry from bogus entity of Shri Shirish Shah and the order therefore passed was clearly a validly passed order. 27. In support of her contention, Ld.DR drew our attention to the contents of the reasons recorded for reopening the case of the assessee by the AO in the present case, which were placed before us at page no.94 to 99 of the PB filed by the assessee, and which also form part of the assessment order. Our attention was also drawn to the contents of the assessment order to demonstrate the fact that the assessment framed in the present case was not based on any material pertaining to the assessee found during the search on Shri Shrish C Shah. 28. At this juncture, the ld.counsel for the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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