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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-28, New Delhi, dated 18.03.2019, pertaining to the assessment year 2009-10. The assessee has raised following grounds of appeal:
“1. For that the H’ble CIT(Appeals) erred in appreciating the facts properly. 2. For that the H’ble CIT(Appeals) erred in treating the opening share capital as cash credit for the previous year relevant to the assessment year 2009-10.
Tripurari enterprises Pvt. Ltd. Vs. ITO 3. For that the H’ble CIT(Appeals) erred in confirming the addition on the basis of statement of a third person.
For that the H’ble CIT(Appeals) erred in holding the assessment under section 147/143(3) of the Income Tax Act, 1961 a valid when the notice for reassessment was received in July 2016 and the learned assessing officer had no tangible material for re-opening the assessment.
For that the whole order is bad in facts and law of the case and I fit to be modified.
6. The appellant craves leave to add, amend, alter, vary and/or withdraw any or all the above grounds of appeal
2. At the time of hearing no one appeared on behalf of the assessee. It is seen from the record that since 19.3.2020 there is no appearance on behalf of the assessee despite notices of hearing were sent to the assessee. Further, it is seen that the notices sent to the assessee have been returned back by the postal department.
The assessee has not provided any other/ current address of the assessee. It was incumbent upon the assessee to provide the current address for the purpose of service of notice. Under these facts, the appeal of the assessee is taken up for hearing in the absence of the assessee.
Facts giving rise to the present appeal are that the assessee company had filed its return of income declaring income of Rs. 705/- on 4.12.2010 through e- filing. The case was processed u/s 143(1) of the Income-tax Act, 1961, hereinafter referred to as the “Act”. Thereafter an information was received and as per the information M/s Tripurari Enterprises Pvt. Ltd., the assessee herein, was Tripurari enterprises Pvt. Ltd. Vs. ITO beneficiary entity and had taken amount of Rs. 10,00,000/- as accommodation entry from M/s Indus Valley Promoters Ltd. The Assessing Officer observed that assessee introduced an amount of Rs. 39,00,000/- as share application money and the amount of Rs. 10,00,000/- was a part of that money. Thereafter, the case was reopened after obtaining requisite approval from the Principal CIT and notice u/s 148 was issued to the assessee. In response thereto Director of the assessee company attended and filed copy of Auditor’s report, computation of taxable income, copy of balance sheet and P&L a/c. Thereafter, the Assessing Officer issued a show cause notice to the assessee giving final opportunity. In response thereto the Director of the assessee company Sh. Vikrant Srivastava attended the proceedings on 16.12.2016 and filed affidavit stating that he was not aware about the activities and business of the company before 10.10.2009 as he became Director only on 10.02.2009. In the absence of the explanation, the Assessing Officer proceeded to make assessment and he, therefore, added the amount of Rs. 10,00,000/- and assessed the taxable income at Rs. 10,00,710/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals) who also sustained the finding of the Assessing Officer and dismissed the appeal of the assessee. Now the assessee is in appeal before this Tribunal.
Tripurari enterprises Pvt. Ltd. Vs. ITO 4. Learned Sr. DR submitted that the assessee has been thoroughly negligent and has not cooperated with the assessment proceedings and no explanation was offered regarding source of investment of Rs. 10,00,000/-. He only relied upon the finding of the authorities below.
5. I have heard learned Sr. DR, perused the material on record and gone through the orders of authorities below. I find that the learned CIT(Appeals) has decided the issue by observing as under:
“5.1 I have considered the facts of the case and submissions of the appellant. As it is clear from the assessment order itself that reassessment proceedings were undertaken by AO in pursuance to the specific information about the accommodation entries received during the survey proceedings in the cases of Shri Nirbhay Shankar Gupta and others and appellant was provided opportunity to explain the nature and source of deposits of share application money in the name of M/s. Indus Valley Promoters Ltd as per provisions of section 68 of IT Act. However, despite of giving several opportunities, the appellant could neither produce/file the confirmation from aforesaid party nor could produce its directors for examination. No other credible evidence could be filed to establish the creditworthiness of share applicant or genuineness of transactions regarding receipt of share application money or even establishing their identity. During the appellate proceedings also, appellant could not produce any such evidence which could explain the nature and source of these deposits/transactions. Recently, in a decision dated 17.08.2019 in the case Pr. CIT-06 vs NDR Promoters Pvt. Ltd, ITA 49/2018, Hon’ble Jurisdictional High Court, on the similar facts as in the case of the appellant wherein directors of the creditor companies were not produced and the surrounding circumstances indicated that the assessee had taken accommodation entries from the entry providers, held the transactions in question as sham and make believe with excellent paper work to camouflage their bogus nature. The case of the appellant also falls in the same category being the similar facts. These findings of Hon’ble High Court has been further confirmed by Hon’ble Supreme Court in Tripurari enterprises Pvt. Ltd. Vs. ITO another case Pr. CIT (Central-1) vs NRA Iron & Steel Pvt. Ltd vide their order dated 05.03.2019 wherein Hon’ble Court has held that where the creditor companies were found to be non-existent at the addresses given after making enquiry by AO by issuing notices/summons and the share applicants were not produced before AO, the genuineness of transactions was found to be completely doubtful. 5.2 In view of above discussion, I hold that none of the conditions as per section 68 of the Act are satisfied in the case of deposits made by aforesaid entity, therefore, the addition of Rs. 10,00,000/- u/s 68 of the Act made by AO is upheld and grounds taken by appellant are dismissed.”
The above finding of fact is not rebutted by the assessee by placing any contrary material. Therefore, in the absence of any contrary material, I do not see any reason to interfere in the finding of learned CIT(Appeals). Grounds of appeal taken by the assessee are dismissed.
In the result, assessee’s appeal is dismissed.
Order pronounced in open court on 22nd April, 2022.