2023 (5) TMI 1047

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....d 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 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....

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....kaj 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 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....

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....or 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 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....

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....f 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 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 asse....

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....ies 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 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 m....