TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 325
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....scrutiny under CASS. Notices u/s 143(2) was issued on 10.08.2016 and another notice u/s 143(2) of the Act was issued on 19.09.2016. Notice u/s 142(1) along with questionnaire was issued on 10.10.2016. In response AR of the assessee attended the proceedings in compliance to the above notices from time to time. 4. The Assessing Officer observed that during search and post-search proceedings details relating to companies giving accommodation entries of share application money, share premium, share capital and unsecured loans came to light. During the search and seizure proceedings a statement recorded u/s 132(4) of the Act on 09.10.2014, further statement was recorded on oath on 15.12.2014 from Late Sh. Mul Chand Malu in which he offered to declare undisclosed income of Rs. 100cr of the Kuber Group of Companies and their Directors under specific head of share capital/share premium/capital formation out of total undisclosed income of Rs. 150 crores. The Assessing Officer reproduced the relevant statement in his order. 5. The Assessing Officer reproduced the relevant declaration made by Late Sh. Mul Chand Malu on 12.10.2014 wherein in reply to question No.64 he has offered to decl....
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....Vikas Kumar Agarwal. It was informed that Mr. Vikas Kumar Agarwal is a Director of the above Company and the return was also digitally signed by him. It was further informed that HSPL is not physically existing at its address. Further, information was submitted wherein statements of Mr. Vikas Kumar Agarwal were recorded during the previous inquiries/surveys/searches etc., in which he admitted to the fact that he is in the business of providing accommodation entries through various papers/jamakharchi Companies. The details of the statement were enclosed as Annexure B. The Assessing Officer relied on the above investigation report from the Investigation Wing of Kolkata and further, observed that the address given in the return of income of HSPL which is also used by other paper/jamakharchi Companies controlled by Mr. Vikas Kumar Agarwal. Those Companies were admitted by Mr. Vikas Kumar Agarwal to have been registered solely for the purpose of providing accommodation entries and do not have any other business. 11. The above informations were confronted to the assessee and asked to produce Director/key person who is involved in managing the affairs of the HSPL along with all relevan....
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....ngs and also submitted that during assessment proceedings the assessee was confronted to substantiate the entries recorded in their books and also was asked to produce the Directors/key persons who are involved in managing the affairs of the Companies to prove the genuineness of the capital received along with documentary evidences and also asked to explain why the fund credited in the books of account of Companies in the form of share capital not to be treated as unexplained credits and charged income tax. In response assessee furnished the relevant details of the HSPL and also data downloaded from MCA website. He submitted that none of the Directors produced for examination by the assessee Company during assessment proceedings even when specific requirement for the same was communicated to the assessee. 14. In response to remand report, it was submitted that no particular/specific observation made by the Assessing Officer in the remand report and further, the Assessing Officer has not provided cross-examination of persons, whose statements were relied upon by the Assessing Officer, were never provided to the assessee in spite of specific request. It was submitted that the Asse....
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....sactions and proceeded to sustain the additions made by the Assessing Officer and also enhancement of Rs. 7,00,000/-, 2% of commission towards payment of accommodation entry to the providers. 19. Aggrieved with the above order assessee is in appeal before us raising following grounds of appeal: 1. That On the facts and circumstances of the case, the order passed by the Ld. CIT(A) under section 250 of the Act is bad both in the eyes of law and on facts. 2. On the facts and circumstances of the case, the learned Ld. CIT(A) has erred, both on facts and law, in sustaining the assessment of the appellant at income of Rs. 3,85,54,490/- as against the income of Rs. 35,54,490/- declared by the appellant 3 That the Ld. CIT(A) has erred, both on facts and in law, in sustaining the addition of Rs. 3,50,00,000/-u/s 68 on account of unsecured loans obtained during the year without appreciating the facts of the case. 4 That the Ld. CIT(A) has erred, both on facts and in law, in enhancing the addition of Rs. 7,00,000/-u/s 68 on account of alleged commission paid for arranging the accommodation entries, purely on assumptions and surmises and without supported....
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....could not produce the Directors of the HSPL. He further submitted that the report received from Kolkata Wing which was recorded from Mr. Vikas Kumar Agarwal which was recorded prior to the search conducted in the case of assessee and it has no relevance to the assessee. He brought to our notice Page 32 of the paper book which is investigation report placed on record and he submitted that as per the report, out of 27 companies, 9 companies are such companies which are used for routing and providing accommodation entries to beneficiaries. The Director/key persons of the above Companies have admitted the fact on oath during the previous inquiries/surveys/searches etc., available with the database of the department. The details of the relevant companies names reproduced in the report which does not contain the name of the Company HSPL, further he brought to our notice statement of Mr. Vikas Kumar Agarwal, Devesh Upadhyaya and Praveen Kumar Agarwal and the same were also enclosed in the paper book. The details of the companies controlled by the above said entry providers were also listed and it does not contain the name of HSPL. Further, he brought to our notice the date of statements r....
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....DR further relied on the decision in the case of Nova Promoters & Finlease Pvt. Ltd. (2012) 342 ITR 169 Delhi. 22. She submitted that in the above decision the Hon'ble High Court, has given the detailed findings on the paper companies. She also relied on the decision of Hon'ble Supreme Court in the case of PCIT Vs. NRA Iron & Steel Pvt. Ltd. 412 ITR 161 SC. Further, she submitted that the reliance on the decision of Fair Finvest (Supra) by the assessee is misplaced and further with regard to not providing the cross-examination to the assessee at this stage cannot be allowed and further she submitted that the same was not raised before Assessing Officer, not mandatory that assessee should be given opportunity for cross-examination. 23. Considered the rival submissions and material placed on record, we observed that search was conducted in the case of Kuber Group of Companies and premises of the assessee and during the search proceedings Late Sh. Mul Chand Malu has accepted to surrender Rs. 150 crores in the form of accommodation entries and share capital/share premium/unsecured loans to the extent of Rs. 100crores and other assets including jewellery. It is fact on record that....