M/S. BESTECH INDIA PVT. LTD.,NEW DELHI vs. DCIT, FARIDABAD

O R D E R PER PRASHANT MAHARISHI, A. M.

1. All these three appeals have been filed by three different assessees against the order of ld CIT (Central), Gurgaon u/s 263 of the Act holding that the order of the ld Assessing Officer Page | 1 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) passed u/s 153A of the Income Tax Act are erroneous and prejudicial to the interest of revenue. The parties before us agreed that facts and circumstances of all these three appeals which pertained to “Bestech Group” are similar and their arguments are also similar. With the consent of the parties and as suggested by them for AY 2012-13 was taken up as the lead matter and decision taken therein is applied to the facts of other appeals in ITA No. 2484/Del/2017 and 2485/Del/2017 for Assessment Year 2012-13.

2. Now, therefore, we take up the ITA No. 2491/Del/2017 in case of Globus Projects Pvt. Ltd.

3. The assessee has raised the following grounds of appeal in ITA No. 2491/Del/2017 for Assessment Year 2012-13: “(A) That on the facts & circumstances of the case and the statement of Mr. Sanjay Singhal, CMD of M/s Bhushan Power and Steel Ltd. the learned CIT u/s 263 erred in: i) Holding that the A.O. has failed to thoroughly examine/ investigate the identity/ genuineness/ creditworthiness/ of the parties from whom the alleged share application money/ share capital have been received Inspite of the A.O. conducting detailed enquiries and servicing notices on all shareholders, companies u/s 131 and 133(6) of the Income Tax Act & due compliances by them including recording of Directors statement on oath. ii) Holding that the capital contributed by M/s KDK Food Grains Pvt. Ltd., M/s Leisure Buildcon Pvt. Ltd. and M/s Manomay Foods & Beverages Pvt. Ltd. in the Assessee Company was not genuine as it was out of funds advanced by the M/s Bhushan Power and Steel Ltd to them. iii) Holding that the Assessment order passed u/s 153A(l)(b) by the Assessing officer is therefore erroneous & Prejudicial to the Interest of the revenue. iv) Holding that the Assessment Order u/s 153A(l)(b) dated 13.06.2014 passed by the Assessing Officer is therefore set aside to be made de novo.”

5. Subsequently, on 08.11.2016 the Pr. Commissioner of Income Tax (Central), Gurgaon issued show cause notice u/s 263 of the Act for the impugned assessment order as under:-

Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) “The Principal Officer, M/s Globus Project Pvt. Ltd., SCO-169-170, Ground Floor Sector 8-C, Madya Marg, Chandigarh Subject:- Show cause notice u/s 263 of the Act, 1961 in the case of M/s. Goobus Projects Pvt. Ltd. Assessment Year 2012-13-reg]

Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) f) Bank statement reflecting the said payment of shares and its sources of funds. g) Copy of income tax return acknowledgement h) Copy of balance sheet showing the investment in the Assessee company.

3. The DDIT(lnv.)-l, Faridabad vide his report dated 17.04.2015 reported as under:- "A survey operation u/s 133A was carried out in the case of M/s Bhushan Power and Steel Ltd. (BPSL) on 27.12.2012 and issue of advances made to M/s KDK Food Grains Pvt Ltd., M/s Leizure Buitdcon Pvt Ltd., M/s Manomay Foods & Beverages Pvt Ltd. M/s SPB Propcon Pvt Lid. M/s Strap Creation Pvt Ltd., M/s Syns Construction Pvt Ltd. was confronted to Sh. Sanjay Singhal, CMD of BPSL. Sh. Sanjay Singhal could not give any specific detail and was also not able to establish the genuineness of existence of above mentioned companies The amounts given to the above companies are outstanding in the books as advances. The details of advances given are as under:- Name & address of the Company FY. Amount given as S.No. capital advances M/s KDK Food Grains Pvt Ltd., F-20/B, 2nd 1 2011-12 12,50,00,000/- floor, Gali No. 29, Gurudwara Rd., Madhy Vihar, New Delhi M/s leisure Buildcon Pvt. Ltd., 27 Kilokari 2011-12 12,SO,00,000/- 2 Village Opposite, Thaper Business Center., New Delhi M/s Maonmay food & Bev. Pvt Ltd., F-2Q/B, 2nd 3 2011-12 9,00,00,000/- floor, Gali No. 29, Gurudwara Rd,, Madhy Vihar, New Delhi 4 M/s SPB Propcon Pvt Ltd., 27 Kilokari Village 2011-12 13,00,00,000/- Opposite, Thaper Business Center, New Delhi S M/s Strap Creation Pvt Ltd., 106 Dua Business 2011-12 10,00,00,000/- Center, Main Vikas Marg, Shakarpur, Delhi 6 M/s Syns Construction Pvt Ltd., A-69, Laxmi 11,00,00,000/- Nagar, Delhi Sh. Sanjay Singhal stated that Rs. 68 crores were given to the above companies by BPSL as advances. In this case also, BPSL has made payments to paper companies namely M/s KDK Food Grains Pvt Ltd., M/s Leiztirc Bulldcon Pvt. Ltd., M/s Manomay Food': / Beverages Pvt Ltd., M/s SPB Propcon Pvt Ltd., M/s Strap Creation Pvt. Ltd., M/s Page | 4 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) Syns Construction Pvt. Ltd. for siphoning off funds in the grab of making bogus purchase or for buying capital goods. From the analysis of ITR and ROC data of the above mentioned companies, ft is found that these companies are not doing any meaningful business activities and are existing only on papers. Summons were issued to the companies and their directors on 02.09.2014. No. Name of the Name of the Directors to which summons company to which issued Remarks summons issued 1 M/s KDK Food Sh. Ajay Kumar, E-635/B, Pratap Vihar, No compliance made till date Grains Pvt Ltd. Ghaziabad Sh. Mahindra Saxena, E-648, Sec-10, Pratap vihar, Vijay Nagar, Ghaziabad 2 M/s Leizure Sh. Surabh Jain and Sh. Ramji, 27 No compliance KHokari Village, Sunlight colony. New made till date Buildcon Pvt Ltd. Delhi 3 Sh. Ajay kumar, E-635/B, Pratap Bihar, No compliance M/s Manomay Ghaziabad made till date Foods & Beverages Pvt Ltd. Sh. Mahindra Saxena, E-648, Sector-to, 4 Pratap Vihar, Vfioy Nagar, Ghaziabad M/s SPB Propcon Sh. Surabh join and Sh. Ramji, 27 No compliance Pvt. Ltd. Kitokari Village, Sunlight colony, New made till date Delhi 5 No compliance M/s Strap Creation Sh. Jai Narayan, 106 Dua Business made till date Pvt Ltd Center, Main Vikas Marg, Shakarpur, Delhi, Sh. Anil*Kumar, A-62, Laxmi Nagar, Delhi 6 M/s Syns Sh. Mahesh Prasad, Sh. Sudhir Sharma No compliance Construction Pvt and Nitin Yadav, A-69, Laxmi Nagar, made till date Ltd. New Delhi, Sh. Santosh Kumar, G-29, Laxmi Nagar, New Delhi Till date not a single director or anybody on the behalf of the company has appeared. During the survey on BPSL on 27.12.2012 Sh Sanjay Singhal, CMD BPSL was asked about the purpose of making such huge advances. He could not give any explanation and admitted for disallowance of interest on these advances given. Thus, assesses himself admitted that no goods have been purchased from the above entities and amounts are still outstanding in the name these paper entities in the books of accounts of BPSL From the above discussion on modus operandi and financial credentials of above entities to which payments were made, it is concluded that payments were made to these entities for siphoning off funds from BPSL Payments made by BPSL to the above mentioned paper entities have finally been introduced in the entities of Bestech Group in form of bogus share capital/premium. Thus, prima facie from the discussed modus operandi, it appears that cash paid by Bestech group for taking bogus share Page | 5 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) capital/ premium accommodation entries through paper entries has been given equal amount of BPSL group. However, issue may be investigated further before finalizing the assessment proceedings. 4. it is seen that during the assessment proceedings, the issue of creditworthiness and genuineness of the transactions of the investor companies from whom the assessee company has received share capital has not been thoroughly examined/ investigated which is also evident from the report dated 17.04.2015 of DDIT(Inv.}-I, Faridabad. Merely filing confirmations/PAN Nos. etc. does not prove the genuineness & creditworthiness of the investors.

5. The order of the Assessing Officer in therefore erroneous & prejudicial to the interests of revenue.

6. In view of the aforesaid facts, yoii are hereby given a opportunity to show cause why Asstt. Order dated 30.05.2014 be not revised.

The assessee company has duly discharged onus cast on it as per Section 68 of the 4. Income Tax Act, to prove identity of shareholders, creditworthiness of the shareholders and genuineness of transactions by filing requisite proofs / documents to the Assessing Officer vide its letter dated 04.04.2014 wherein it has filed the following documents:  Share Application Form  Board Resolution of Investor Company authorizing board to make investment  in assessee company  Copy of extract of board meeting of the assessee company in which allotment of shares has been made.  Copy of Allotment Letter  Confirmation from Investor Company  Bank Statement of Investor Company reflecting payment of said share application/ share capital and their sources of funds.  Copy of Income Tax Return of Investor Company  Copy of Balance Sheet of Investor Company reflecting the investment made by it in assessee company.

5. The Assessing Officer has also independently verified the Identity, Creditworthiness of share applicants and genuineness of transactions by independently calling the directors of all the companies by issuing summons u/s 131 and / or simultaneously calling information by issuing notice U/s 133(6) of Income Tax Act at the given address of share applicant companies.

Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) (vi) If while making the assessment, the AO examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determine the income, the CIT, while exercising his power U/s 263 is not permitted to substitute his estimate of income in place of the income estimated by the AO. (vii) The AO exercises quasi-judicial power vested in him and if he exercises such power in accordance with law and arrive at a conclusion, such conclusion cannot be termed to be erroneous simply because the CIT does not feel satisfied with the conclusion. (viii) The CIT, before exercising his jurisdiction under s. 263 must have material on record to arrive at a satisfaction. (ix) if the AO- has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the AO allows the claim on being satisfied with the explanation of the assessee. the decision of the AO cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard. Independent Verification by Assessing Officer during Assessment Proceedings Sir n the present case, assessee company has received share application money/ share applicants tabled above. During the assessment proceedings itself:-  Necessary documents in support of said share application money/ share capital ere fed by the assessee company before the learned assessing officer in order scharge onus cast on it as per Section 68 of the Income Tax Act, to prove identity of shareholders, creditworthiness of the shareholders and genuineness of transaction.  Assessing office has independently made inquiries and verification of the documents submitted by the assessee. She called requisite information all of these share holders u/s 133(6) of the Act. The notices u/s 133(6) were served and complied by all the share applicant companies who have filed all -."e documents which were called for in the notice. The assessee company has :: Drained copy of submission made by these companies in response to notice u/s ' 33(6) during assessment proceedings. The copy of the same is being submitted herewith for your kind perusal and records.  The Learned Assessing Officer has also called upon the directors of these share applicant companies by issuing summons U/s 131 of the Act. All such summons were duly served and complied by share applicant companies. The director of all the share holder companies have deposed and have filed all such documents which were called for or could be filed in support of said share application money besides appearing in person and answering all the questions raised during the course of recording of statement on oath U/s 131 by the learned Assessing Officer to her satisfaction. The director of all the share applicant companies left the office of the learned assessing officer, only, after giving answers to all the questions raised and after providing all the documents asked for, during the course of recording of statement and no further question/ requisition of Page | 9 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) document was asked / sought by the learned assessing officer from the directors. The assessee applied for and obtained copy of statements recorded and documents filed by the directors of these companies u/s 131 of the Act during assessment proceedings. The copy of the same is being submitted herewith for your honor‟s kind perusal and records. From the above facts, it is evident that the assessing officer had made adequate / requisite inquiries / verification to satisfy herself about genuineness of transactions and framed assessment order, only, after being fully satisfied and after taking the approval from her range head. Therefore, order passed by assessing officer cannot be deemed to be erroneous as per Explanation 2 to Section 263 of the Act. Thus, the case of the assessee mjay not be covered under the provisions of Section 263 of the Act. Statement recorded u/s 131 and submission received u/s 133(6) forming part of „Record‟ Sir, all the above Replies filed by shareholder companies u/s 133(6) of the Act and Statements of directors of shareholder companies recorded on oath in response to notice u/s 131 of the Act, are forming part of „records‟ as defined in explanation 1(b) of Section 263 of the Act. These records may have skipped your examination / may have not been made available to your goodself while judging the assessment order of the Assessing Officer and framing an opinion that identity, creditworthiness of share applicants and genuineness of transactions has not been thoroughly examined / investigated during assessment proceedings whereas assessing officer has framed the assessment order after making adequate inquiries and verification. Thus, the case of the assessee may not be covered under the provisions of Section 263 of the Act. Order Passed by Leaned Assessing officer cannot be termed as Erroneous:- Sir based on the provisions of section 263 of the Act and broad principles established by various judicial pronouncements, the order passed by the Assessing Officer should :treated at erroneous for the following reasons:  The Learned AO has made sufficient enquiries during the course of assessment proceedings on the relevant issues by making independent verification of the identity, creditworthiness of shareholders and genuineness of transactions. Further, the assessee has given detailed explanation by a letter in writing and Assessing Officer accepted the share capital on being satisfied With the nation of the assessee and her own -independent verification. Thus, the decision of the AO cannot be held to be erroneous although she does not make an elaborate discussion in that regard in the order.  While making the assessment, the AO examines the accounts, makes enquiries, applies her mind to the facts and circumstances of the case and determine the income.  The Assessing Officer exercises quasi-judicial power vested in her and if she exercises such power in accordance with law and arrive at a conclusion, such conclusion cannot be termed to be erroneous. Thus, present case does not fulfill the basic condition of assessment order being erroneous for initiating proceedings u/s 263 of the Act. It is therefore prayed that show cause notice issued u/s 263 of the Act may please be dropped. Without prejudice to above submission, we further submit that on merits also, no disallowance u/s 68 of the Act is warranted in the case of the assessee company on the Page | 10 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) following grounds:

1. That as mentioned in Para 3 of show cause notice, Mr. Sanjay Singhal, CMD of BPSL has accepted the fact that BPSL has given the amounts mentioned in the notice to Share Applicants Companies and these are still outstanding in the bocks as advance. He confirmed these payments to share applicant companies and never admitted that these payments are not genuine. The Show Cause Notice also states that he admitted for disallowance of interest on these advances given. It is worth mentioning here that he never admitted to the disallowance of the whole advances but agreed to disallowance of interest attributable to these advances only. Thus, in his statement, Mr. Sanjay Singhal, CMD of BPSL has never admitted that advances paid to share applicant companies are bogus. Rather, he confirmed the payment of advance to share holder companies, out of which share capital has been paid to the assessee company during the year under consideration. In other words, he has rather confirmed the sources of funds out of which share capital has been paid to assessee company. Thus, no addition u/s 68 of the Act may be made in the case of the assessee company.

2. That the allegation that these share applicant companies does not have any meaningful business and exist only on papers are just presumptions and there is no basis to allege so. It is evident from the assessment records that the addresses of all the investor companies were genuine where all the summons/ notices/ correspondences have been served/ delivered and complied adequately. None of the correspondence mailed by the leaned assessing officer returned back undelivered. All the investor companies were existent and were available on the given addresses. All these share applicant companies are in regular business has sufficient means to invest in the shares of assessee company and same as also been explained and proved by them by submitting the requisite documents and recording of statement on oath in person of one of their respective director before the learned assessing officer. Moreover, Sir, when all share applicant companies are existent and has admitted the investment with assessee company, the addition at all could be made in the hands of the applicant companies and not the assesses company.

3. That a search and seizure operation was conducted on the residential and business premises of Bestech Group in July 2012. During search operation, lot of documents and papers were seized which were duly analyzed by Investigation /mg and assessing officer. But none of the paper suggest that share capital received by the assessing company was bogus.

4. That section 68 of the Act cast a burden on the assessee to prove the identity, creditworthiness of the investors and genuineness of the transactions. Assessee company has proved the identity, creditworthiness of the investors and genuineness of the transactions beyond doubt by providing following documents of all the investor companies besides personal presence of their respective directors: Identity Genuineness Creditworthiness Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) Certificate of Incorporation of Copy Share Application Form PAN of Share Applicant Share Applicant Address of the Share Applicant Confirmation of Applicant Acknowledgement of IT Return for AY 2011- 12 PAN of Share Applicant Mode of Payment i.e. through Copy of Bank Statement of Crossed Account Payee Cheque Applicant Copy of Acknowledgement of IT Copy of Board Resolution passed Confirmation of Applicant Return for AY 11-12 by Share Applicant for investment which also specify the sources in assessee company of investment Copy of Bank Statement of Allotment Letter and Delivery of Balance Sheet of Share Applicant 5 Shares Applicant Company Sir, it is pertinent to mention here that once all the share applicant companies has confirmed the fact of giving the share capital / share application money, whatever addition which the learned AO may think fit, should have been made only in the hands of share applicant companies and not the receiver of the money (assessee company) as per the principles laid down by Hon‟ble Supreme Court in the case of CIT vs. LOVELY EXPORTS PVT.LTD {(2008) 216 CTR 195) wherein it was held that - “If the share application money is received by the assessee company even from alleged bogus shareholders, whose names are given to AO, then the Department is free to proceed to re-open their individual assessments in accordance with law. But it cannot be regarded as undisclosed income of the assessee company”. Hon‟ble Delhi High Court in CIT VS. STELLER INVESTMENTS LT 1991) 192 ITR 287) that “Even if it be assumed that the subscribers to the increased share capital were not genuine, under no circumstances, can the amount of such capital be regarded as undisclosed income of the assessee company if certain shareholders were bogus and money was provided by some other persons, reopening of assessment of such persons would be sensible”. Hon‟ble High court of Delhi has held in CIT VS. DOLPHIN CANPACK ITD (2006) 283 ITR 190{(2000) 283 ITR 190} that “Tribunal, while observing that complete details i mg confirmations details of bank account, PAN of subscribers to the shares ..ere furnished by the assessee and payments were made by cheques, was jstified in deleting addition under section 68. The Hon‟ble High Court of Rajasthan in the case of ARAVALI TRADING CO. VS. INCOME TAX OFFICER {(2008) 8 DTR 199) held “Once the existence of the creditors is proved and such persons own the credits which are found in the books of the assessee, the assessee‟s onus stands discharged and the latter is not further required to prove the source from which the creditors could have acquired the money deposited with him either in terms of sec.68 or on general principal”. The judgement of the Delhi High Court in the case of CIT vs Oasis Hospitalities (P) Ltd. (333/119), wherein it is held that where the assessee had filed copy of PAN, acknowledgement of filing ITRs of the companies, there bank account statements for the relevant period but had not produced the Directors of the Co., the addition made by the AO could not be sustained as the primary onus had been discharged by the assessee. Page | 12 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) Similarly in the case of CIT vs Sofia Finance Ltd (205 ITR 98) (Del) (FB), it has been held that if the shareholders are identified and it is established that they have invested money for the purchase of shares then the amount received by the assessee Co. would be regarded as a capital receipt and no additions can be made u/s 68 of the Act. Similar view has been expressed in various other judgments of Hon‟ble courts, few of them is cited hereunder: CIT v.s Steller Investment Ltd (251 ITR 263) (SC) Achal Investment Ltd vs CIT (268 ITR 211) (Del) DCIT.vs Esteem Towers (P) Ltd. (99 TTJ 472) (Del) CIT vs Dolphin Canpack Ltd (204 CTR 50) (Del) CIT vs Giocom Impex (P) Ltd. (205 CTR 571) (Del) CIT vs Gangaur Investment Ltd. (335 ITR 359) (Del) CIT vs Dwarkadhish Investment (P)Ltd. (330 ITR 298)(Del) CIT vs Gangeshwari Metal Pvt. Ltd. (2013) 361 ITR 10 (Del) CIT vs Expo Global India Ltd. (2014) 361 ITR 147 (Del) Sir, as regards the credit worthiness, it is submitted that appellant has submitted tne confirmation, bank account, Balance Sheet and income tax return of the applicant companies before the learned assessing officer. The appellant was not required to prove the source of the source as has been held by the Supreme Court in the case of CIT vs Daulat Ram Rawat Mull (87 ITR 349)(SC). Hon‟ble High Court of Delhi in the case of CIT vs Value Capital Services Ltd. (307 ITR 334) have held that the additional burden lay on the revenue to show that even if the applicant does not have means to make the investment in shares, the investment has emanated from the coffers of the assessee. In case, this additional burden is not discharged, the investment cannot be treated as undisclosed income of the assessee. To Sum up, Sir, on this issue the law is very clear that once, assessee prima facie discharges its obligation by furnishing of requisite documents coupled with t. \a i.ev.co of parties, thereafter the onus shifts to the Department and the assessing officer is duty bound to investigate the same and addition, if any, could be made in the hands of applicant companies. In the present case, the assessee company has duly discharged onus cast on it to prove identity of shareholders, creditworthiness of the -shareholder and genuineness of transaction by providing requisite proofs / documents as detailed above in the submission. The Learned Assessing officer has also independently verified the Identity, Creditworthiness of share applicant and genuineness of transactions by independently calling the directors of the companies u/s 131 and/or calling information U/s 133(6) of Income Tax Act. Thus, no addition u/s 68 of the act is warranted in the hands of the assessee company. In case the learned assessing officer was not at all satisfied about the transaction, appropriate action may have been taken against the share applicant as per the provisions of Income Tax Act.

5. That, it is submitted that confession by some person in some other case (although in our case no such confession has been made by BPSL), could not lead to the conclusion that assessee Company has indeed received the accommodation entry. In this regard, your honor‟s attention is hereby drawn to the case of Addl. CIT vs. Hanuman Agarwal (151 ITR 150), in which, Hon‟ble High Court of Patna Page | 13 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) has stated that - “ The so-called confession by the creditor is not in relation to the amount in question but it seems clear that the so-called confession was made by me creditor in a third party‟s case. If the confirmatory letter was issued by the creditor subsequent to the so-called confession, it was much more incumbent upon the Department to summon the creditor in order to verify the statements made in the confirmatory letter. This was never done.” Thus on the basis of fact and circumstances and various judicial pronouncements and merits of the case, it is hereby prayed that the proceedings initiated u/s 263 of the Act may please be dropped in the interest of justice and oblige.” b. Letter dated 27/1/2017 ( Page nO 155 to 156 of the paper book ) “27th January 2017 The Honourable Commissioner of Income Tax - Central, Gurgaon, Haryana. Respected Sir, Re:- Reply to Show Cause Notice u/s 263 of Income Tax Act. 1961 M/s. Globus Projects Private Limited. Assessment Year 2012-13 In continuance of our earlier submission and without prejudice to the fact that the order passed by the learned assessing officer is not erroneous for invoking provisions of section 263 of the act, we respectfully submit that as mentioned in Para 3 of show cause notice, Mr. Sanjay Singhal, CMD of BPSL has accepted the fact that BPSL has given the amounts mentioned in the notice to Share Applicants Companies and these are still outstanding in the books as advance. In other words, he accepted and confirmed the fact that payments made by BPSL to share applicant companies (the companies who has paid share application money to assessee company) are genuine. It is also evident from the fact that all these advances have been duly repaid back by these share applicant companies to BPSL in subsequent period. The confirmation of account from Bhusan Power & Steels Ltd. reflecting such repayment is submitted herewith for your kind verification and records. It is worth mentioning here that Mr. Singhal never admitted to the disallowance of the whole advances but agreed to disallowance of interest claimed by BPSL which is attributable to these advances. He rather confirmed that advance has been paid by BPSL to share holder companies. After repayment, his statement got further substantiated that all these advances, were genuine business advances. It is further submitted that Manomay Foods & Beverages Pvt. Ltd. which has paid share application to assessee company out of fund received from BSPL has also repaid back advances received by it. The confirmation of the same is awaited and will be submitted to your goodself in next date of hearing. In the present case, the assessee company, has duly discharged onus cast on it to prove identity of shareholders, creditworthiness of the shareholder and genuineness of transaction by providing requisite proofs / documents. The Learned Assessing officer has also independently verified the Identity, Creditworthiness of share applicant and genuineness of transactions by independently calling the directors of the companies u/s Page | 14 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) 131 and/or calling information U/s 133(6) of Income Tax Act. Further, the sources of funds out of which share capital has been paid to assessee company has also been confirmed by Mr. Singhal, CMD of BPSL. Thus, no addition u/s 68 of the Act may be made in the case of the assessee company. In case the your goodself is still not at all satisfied about the transaction, appropriate action may have been taken against the share applicant as per the provisions of Income Tax Act as laid down by various judicial pronouncements. Thus, on the basis of fact and circumstances and various judicial pronouncements and merits of the case, it is hereby prayed that the proceedings initiated u/s 263 of the Act may please be dropped in the interest of justice and oblige.” c. Letter dated 17/2/2017 ( page no 157 of the paper book ) “17th February 2017 The Honourable Commissioner of Income Tax - Central, Gurgaon, Haryana.

Respected Sir, Re:- Reply to Show Cause Notice u/s 263 of Income Tax Act, 1961 M/s. Globus Projects Private Limited. Assessment Year 2012-13 In continuance of our earlier submission and without prejudice to the fact that the order passed by the learned assessing officer is not erroneous for invoking provisions of section 263 of the act, we respectfully submit that all the advances received by share applicant companies (the companies who has paid share application money to assessee company) have been duly repaid back to Bhusan Power & Steel Ltd. in subsequent period. All the confirmations of account from Bhusan Power & Steels Ltd. reflecting such repayment have already been submitted to your goodself with our submission dated 27.01.2017. Confirmation of account from Bhusan Power & Steel Ltd. reflecting such repayment from Manomay Foods & Beverages Pvt. Ltd. is submitted herewith for your kind verification and records. Thus, Sir, In the present case, the assessee company has duly discharged onus cast on it to prove identity of shareholders, creditworthiness of the shareholder and1* genuineness of transaction by providing requisite proofs / documents. The Learned Assessing officer has also independently verified the Identity, Creditworthiness of share applicant and genuineness of transactions by independently calling the directors of the companies u/s 131 and/or calling information U/s 133(6) of Income Tax Act. Further, the sources of funds out of which share capital has been paid to assessee company has also been confirmed by Mr. Singhal, CMD of BPSL in his statement before Investigation Wing. Moreover, all the share applicant companies have repaid back the advances to BPSL in subsequent period. Thus, no addition u/s 68 of the Act may be made in the case of the assessee company. In case the your goodself is still not satisfied about the genuineness of transaction, appropriate action may have been taken against the share applicant as per the provisions of Income Tax Act as laid down by various judicial pronouncements. Page | 15 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) Thus, on the basis of fact and circumstances and various judicial pronouncements and merits of the case, it is hereby prayed that the proceedings initiated u/s 263 of the Act may please be dropped in the interest of justice and oblige.”

7. Consequently, vide order dated 17.02.2017 the ld CIT passed order u/s 263 holding that order passed by the ld Assessing Officer is erroneous and prejudicial to the interest of the revenue. The main reasons of the order of the ld CIT were as under:- “1.A perusal of the facts shows that the assessment order in the case of M/s Globus Projects Private Limited u/s 153A(l)(b) of the IT.Act, 1961 for A.Y. 2012-13, was passed by Dy. Commissioner of Income Tax, Central Circle-I, Faridabad on 13.06.2014. 2. (a) The assesseereceived the following amounts of shareapplication money/ share capital: Sr. Name of the company Address Amount from whom share No. application money/share capital received 1 M/s KDK Food Grains Shop No. 17, Plot No 13E, Gali No. 20, 3,36,00,000/- Pvt. Ltd. Guru Nanak Complex, MadhuVihar, Delhi 2 M/s Leisure Buildcon Pvt. C-17, Guru Nanak Pura, Opp. Scope 2,31,00,000/- Ltd. Tower, Laxmi Nagar, Delhi 3 M/s Maonmay food & Shop No. 17, Plot No 13E, Gali No. 20, 1,71,00,000/- Bev. Pvt. Ltd. Guru Nanak Complex, MadhuVihar, Delhi (b) The assessing officer accepted the aforesaid statement of financial affairs in his assessment order. (c) However, subsequently the DDIT(Inv.)-I, Faridabad vide his report dated 17.04.2015 reported as under:- “A survey operation u/s 133A was carried out in the case of M/s Bhushan Power and Steel Ltd. (BPSL) on 27.12.2012 and issue of advances made to M/s KDK Food Grains Pvt. Ltd., M/s LeizureBuildcon Pvt. Ltd., M/s Manomay Foods & Beverages Pvt. Ltd. M/s SPB Propcon Pvt. Ltd. M/s Strap Creation Pvt. Ltd., M/s Syns Construction Pvt. Ltd. was confronted to Sh. Sanjay Singhal, CMD of BPSL. Sh. Sanjay Singhal could not give any specific detail and was also not able to establish the genuineness of existence of above mentioned companies. The amounts given to the above companies are outstanding in the books as advances. The details of advances given are as under:- S.No. Name & address of the Company F.Y. Amount given as capital advances M/s KDK Food Grains Pvt. Ltd., F-20/B, 2nd 1 2011-12 12,50,00,000/- floor, Gali No. 29, Gurudwara Rd., MadhyVihar, New Delhi Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) 2 M/s Leisure Buildcon Pvt. Ltd., 27 Kilokari 2011-12 12,50,00,000/- Village Opposite, Thaper Business Center, New Delhi M/s Maonmay food & Bev. Pvt. Ltd., F-20/B, 2nd 3 2011 - 12 9,00,00,000/- floor, Gali No. 29, Gurudwara Rd., MadhyVihar, New Delhi 4 M/s SPB Propcon Pvt Ltd., 27 Kilokari Village 2011-12 13,00,00,000/- Opposite, Thaper Business Center, New Delhi 5 M/s Strap Creation Pvt Ltd., 106 Dua Business 2011-12 10,00,00,000/- Center, Main Vikas Marg, Shakarpur, Delhi 6 M/s Syns Construction Pvt Ltd., A-69, Laxmi 11,00,00,000/- Nagar, Delhi Sh. Sanjay Singhal stated that Rs. 68 crores were given to the above companies by BPSL as advances. In this case also, BPSL has made payments tojgaper companies namely M/s KDK Food Grains Pvt. Ltd., M/s LeizureBuildcon Pvt. Fid/, M/s Manomay Foods & Beverages Pvt. Ltd., M/s SPB Propcon Pvt. Ltd., M/s Strap Creation Pvt. Ltd., M/s Syns Construction Pvt. Ltd. for siphoning off funds in the grab of making bogus purchases or for buying capital goods. From the analysis of ITR and ROC data of the above mentioned companies, it is found that these companies are not doing any meaningful business activities and are existing only on papers. Summons were issued to the companies and their directors on 02.09.2014. S. Name of the company to Name of the Directors to which summons Remarks which summons issued issued No. 1 M/s KDK Food Grains Sh. Ajay Kumar, E-635/B, PratapVihar, No compliance Pvt. Ltd. Ghaziabad Sh. Mahindra Saxena, E-648, made till date Sec-10, Pratapvihar, Vijay Nagar, Ghaziabad 2 M/s Leizure Buildcon Pvt Sh. Surabh Jain and Sh. Ramji, 27 No compliance Ltd. Kilokari Village, Sunlight colony, New made till date Delhi 3 M/s Manomay Foods & Sh. Ajay kumar, E-635/B, Pratap Bihar, No compliance Beverages Pvt. Ltd. Ghaziabad made till date Sh. Mahindra Saxena, E-648, Sector- 10, PratapVihar, Vijay Nagar,Ghaziabad 4 M/s SPB Propcon Pvt Ltd. Sh. Surabh Jain and Sh. Ramji, 27 No Kilokari Village, Sunlight colony, New compliance made Delhi till date 5 M/s Strap Creation Pvt Sh. Jai Narayan, 106 Dua Business No compliance Ltd. Center, Main Vikas Marg, Shakarpur, made till date Delhi, Sh. Anil Kumar, A- 62, Laxmi Nagar, Delhi Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) 6 M/s Syns Construction Pvt. Sh. Mahesh Prasad, Sh. Sudhir Sharma No Ltd. and Nitin Yadav, A-69, Laxmi Nagar, New compliance made Delhi, Sh. Santosh Kumar, G-29, Laxmi till date Nagar, New Delhi j Till date not a single director or anybody on the behalf of the company has appeared. During the survey on BPSL on 27.12.2012, Sh. Sanjay Singhal, C.MD BPSL was asked about the purpose of making such huge advances. He could not give any explanation and admitted for disallowance of interest on these advances given. Thus, assessee himself admitted that no goods have been purchased from the above entities and amounts are still outstanding in the name these paper entities in the books of accounts of BPSL. From the above discussion on modus operandi and financial credentials of above entities to which payments were made, it is concluded that payments were made to these entities for siphoning offfunds from BPSL Payments made by BPSL to the above mentioned paper entities have finally been introduced in the entities ofBesiech Group in form of bogus share capital/premium. Thus, prima facie from the discussed modus operand'i, it appears that cash paid by Beslech group for taking bogus share capital/premium accommodation entries through paper entries has been given equal amount to BPSL group. However issue may be investigated further before finalizing the assessment proceedings. ”

Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) In this case also, BPSL has made payments to paper companies namely M/s KDK Food Grains Pvt. Ltd., M/s Leizure Buildcon Pvt. Ltd., M/s Manomay Foods & Beverages Pvt. Ltd., M/s SPB Propcon Pvt. Ltd., M/s Strap Creation Pvt. Ltd., M/s Syns Construction Pvt. Ltd. for siphoning off funds in the grab of making bogus purchases or for buying capital goods. From the analysis of 1TR and ROC data of the above mentioned companies, it is found that these companies are not doing any meaningful business activities and are existing only on papers. Summons were issued to the companies and their directors on 02.09.2014.

S. Name of the company to which Name of the Directors to which Remarks summons issued summons issued No. 1 M/s KDK Food Grains Pvt. Ltd. Sh. Ajay Kumar, E-635/B, No compliance PratapVihar, Ghaziabad Sh. made till date Mahindra Saxena, E- 648, Sec-10, Pratapvihar, Vijay Nagar, Ghaziabad 2 M/s. Leizure Buildcon Pvt Ltd. Sh. Surabh jain and Sh. Ramji, 27 No compliance Kilokari Village, Sunlight colony, made till date New Delhi 3 M/s Manomay Foods & Sh. Ajay kumar, E-635/B, Pratap No compliance Beverages Pvt. Ltd. Bihar, Ghaziabad made till date Sh. Mahindra Saxena, E-648, Sector-10, PratapVihar, Vijay Nagar, Ghaziabad 4 M/s SPB Propcon Pvt. Ltd. Sh. Surabh Jain and Sh. Ramji, 27 No compliance Kilokari Village, Sunlight colony, made till date New Delhi 5 M/s Strap Creation Pvt. Ltd. Sh. Jai Narayan, 106 Dua Business No compliance Center, Main Vikas Marg, made till date Shakarpur, Delhi, Sh. Anil Kumar, A-62, Laxmi Nagar, Delhi 6 M/s Syns Construction Pvt. Ltd. Sh. Mahesh Prasad, Sh. Sudhir No compliance Sharma and Nitin Yadav, A-69, made till date Laxmi Nagar, New Delhi, Sh. Santosh Kumar, G-29, Laxmi Nagar, New Delhi Till date not a single director or anybody on the behalf of the company has appeared. During the survey on BPSL on 27.12.2012, Sh. Sanjay Singhal, CMD BPSL was asked about the purpose of making such huge advances. He could not give any explanation and admitted for disallowance of interest on these advances given. Thus, assessee himself admitted that no goods have been purchased from the above entities and amounts are still outstanding in the name these paper entities in the books of accounts of BPSL. From the above discussion on modus operandi and financial credentials of above entities to which payments were made, it is concluded that payments were made to these entities for siphoning off unds from BPSL. Payments made by BPSL to Page | 20 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) the above mentioned paper entities have finally been introduced in the entities of Bestech Group in form of bogus share capital/premium. Thus, prima facie from the discussed modus operandi, it appears that cash paid by Bestech group for taking bogus share capital/premium accommodation entries through paper entries has been given equal amount to BPSL group. However issue may be investigated further before finalizing the assessment proceedings. ” (iv) . It is seen that during the assessment proceedings, the issue of creditworthiness and genuineness of the transactions of the investor companies from whom the assessee company has received share capital has not been thoroughly examined/ investigated which is also evident from the report dated 17.04.2015 of DDIT(Inv.)-I, Faridabad. Merely filing confirmations/PAN Nos. etc. does not prove the genuineness & creditworthiness of the investors. (v) . The order of the Assessing Officer in therefore erroneous & prejudicial to the interests of revenue.

4. Opportunities were given to the assessee from time to time. The assessee‟s main arguments have been that: (a) The assessee had discharged his onus by producing all evidences. (b) Sh. Sanjay Singhal CMD of BPSL never admitted to the disallowance of the whole advances but agreed to disallowance of interest claimed by BPSL which is attributable to these advances. (c) Advances by the share applicant companies who had received advances from BSPL have been repaid to BSPL.

6. The assessment order passed u/s I53A(1)(b)dated 13.06.2014 passed by the Assessing Officer is therefore erroneous & prejudicial to the interests of revenue.

7. The assessment order passed u/s 153A(l)(b) dated 13.06.2014 passed by the Assessing Officer is therefore set-aside to be made denovo. 8. „Ordered accordingly as above.”

Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13)  The A.O. after verifying the documents/statement could not point out even a single discrepancy, hence accepted the receipt.  Thus, in this case, the A.O. carried out all the maximum possible inquiries/investigations for receipt of the share capital and noting more could had been done.  Sec.263 (1), expln. 2,clause (a) provides for an order to be erroneous and prejudicial to the interest of revenue when the order has been passed without making inquiries or verification which should have been made, however in this case, all maximum possible inquiries and verification has been carried out.  It is neither a case of lack of inquiry and even not a case of inadequate inquiry.  It is interesting to note that in the impugned order u/s.263, the CIT did not mention the information collected by the A.O., investigation done u/s. 133 (6) and also the fact of statement being recorded, although this complete material and information was with him.  CIT, ignoring these important aspects / inquiries / investigation / statements by A.O., simplicitor gave a finding that the A.O. did not carry out thorough investigation, however without even specifying as to what further inquiries/investigations ought to had been done by the A.O.  It is also not a case where the A.O. assumed any incorrect fact or applied incorrect law.  It is a case where the A.O. applied his mind fully and examined the said  Sec.263 cannot be invoked for making the inquiries in a manner as thought of by the CIT, although, interestingly, the CIT silent as to what further queries/investigation ought to had been done by the A.O.  Thus, there existed no circumstances which may permit for invoking provisions of sec.263 of the Act.  Further, there is no material on record to show that cash has been given against receipt of share capital, hence this finding of CIT is without any material and basis (Authorities laying down this legal proposition have been given separately)  Further, in case the asstt. order dt. 13.06.14 is silent on this issue, that does not mean that this issue was not raised or was not examine by the A.O. since, it is not necessary for the A.O. to discuss each and every aspects of examination in the asstt. order. (Authorities laying down this legal proposition have been given separately)  Further, source of the source is not the responsibility of the assessee. However in this case even the source of source also stands explained. The assessee received share capital from above 3 companies. These 3 companies received the corresponding amount from Bhushan. Thus even the source of source stands explained and confirmed. (Authorities laying down this legal proposition have been given separately) (Synopsis for authorities given separately) Two The report of DDIT dt.17.04.15 is subsequent to asstt. order dt.13.06.14 therefore it was not available to the A.O. at the time of asstt., hence could not had been considered  The only reason and the basis of invoking sec.263 is the report of DDIT dt. 1 7.04.15 in the case of another assessee namely Bhushan Power & Steel Ltd. (Bhushan) (CIT Pg.1-4) Page | 24 Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13)  The asstt. order u/s. 153A stood completed on 13.06.14  The report of DDIT was not in existence on the date of completion of asstt. on 13.06.14  Under these facts it cannot be said that the A.O. failed to take into consideration the DDIT report dated 17.04.2015 and contents thereof.  Hence section 263 cannot be invoked on the basis of material/ DDIT report which was not in existence at the time of completion of original asstt. Three  Even otherwise, there is nothing adverse in DDIT report dt.17.04.15 so as to invoke sec.263, rather the said report supports the case of assessee  The DDIT report dt.17.04.15 in the case of Bhushan (3rd party) is abstracted in asstt. order (CIT Pg.1-4)  As per conclusion of DDIT report, Bhushan made payments to these 3 companies (and other companies also) which are paper entities, and these companies, introduced the said amount as bogus share capital (CIT - Top Para Pg.4)  However these observation/finding are totally incorrect as per the facts mentioned in the report on the basis of which facts, the conclusion has been derived in the DDIT report, which stands clear from following as mentioned in DDIT report itself  Sh. Sanjay Singhal, Director of Bhushan stated in his statement that the said amount was given by Bhushan to these companies (CIT Pg.2)  DDIT stated that Bhushan gave the money to these companies for making bogus purchases, (CIT Pg.2)  However this allegation of DDIT is wrong. The director of Bhushan in his statement clearly stated that no goods have been purchased from these comp, against these amt. given, factually also no goods have been purchased and ultimately these companies have refunded the amount to Bhushan (CIT Pg.3)  Director of Bhushan did not admit the allegation of deptt., he is simply stated for disallowance of interest on amounts which have been used for giving to these companies (CIT Pg.3)  Thus, the factual contents of the report, clearly proves that Bhushan gave the amount to these companies and these companies, in turn, purchased the share of the assessee  The amount given by Bhushan to these companies was finally refunded by these companies to Bhushan (OTPg.7) Thus there is nothing adverse in the DDIT report also, even on merits Four  CIT, did not himself carry out any inquiries or verification to substantiate  No discrepancy was found either by the A.O. or by the CIT in any of the documents/information  The CIT, did not carry out any inquiries/verification himself  The report of DDIT, the only adverse document with CIT, clearly mentioned all the facts which clearly proved the source as well as the source of the source  Hence, in the absence of any further material/information/inquiry/verification by the CIT himself, there was no occasion for invoking sec.263 (Authorities laying down this legal proposition have been given separately)

Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) Five  The directions for framing the asstt. denovo is illegal  The show cause notice was issued for verification of receipt of share capital from 3 parties.  However, the CIT set aside the whole asstt. for framing as denovo i.e. to examine the complete asstt. afresh.  In proceedings u/s.263, the jurisdiction/direction can not exceed beyond the issued raised in show cause notice/issues raised during proceedings u/s.263.  Hence the directions of denovo asstt. are beyond jurisdiction. AUTHORITIES  CIT VS. CONTIMETERS ELECTRICALS (P) LTD. (2009) 22 DTR (DEL.) 158  Revision on issue not mentioned in show cause notice is not permissible.  PR. CIT V. KRISHAK BHARATI COOPE. LTD. 395 ITR 572 (Del.)  Revision scope of provisions natural justice order covering issues not mentioned in show cause notice not permissible. Six  The findings in sec.263 order are self contradictory  The CIT, has given a finding that it is a case of bogus share capital wherein cash has been paid against receipt of share capital (CIT Pg.8, Para - e)  Thus the directions of the CIT to re-examine the issue by A.O., in substance cannot be independently examined and adjudicated with independent view by the A.O. in view of clear otherwise findings of the CIT as given in Para - e.  Under the facts, when the CIT set aside the matter for re-examination, he should not give the findings as given in Para - e, which needs to be ex¬punched, in case the order u/s.263 is not quashed.  Seven The order under approval of addl. CIT is not to be taken as passed by assessing officer, hence cannot be revised  The Asstt. orders have been framed after approval from Addl. CIT U/s 153D.  Thus, the issue stands examined by AO and thereafter re - examined by Addl. CIT.  Sec. 263(1) provides that CIT can invoke Sec 263 for an order passed by assessing officer.  The word „assessing officer‟ has been defined in Sec. 2(1 A). He is the person who is vested with the powers of that of an Assessing officer who frames assessment order.  Thus, orders passed by Assessing officer within the meaning of Sec. 2(7A) can be subject to Sec. 263.  Thus, only the findings of the assessing officer who framed the assessment can be subjected to Sec. 263.  In a case, where order is finalized after approval of Addl. CIT, the findings in such order are deemed to be that of Addl. CIT which have been brought into black & white by the below ranking officer who is the assessing officer.  In other words, in substance, the findings in Asstt. order are not of assessing officer but of Addl. CIT who is not the assessing officer.  In that case, such findings are not open for disturbance u/s 263. AUTHORITY CIT VS. SMT. A YA/f POORNA MM A CHANDRASHEKHAR 204 BRIJ BHUSHAN AGGARWAL (2005) 2 SOT 811 (AGRA)

Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) Held that Asstt, order passed by the ITO after consultation with and under supervision of Jt, CIT & on appreciation of evidence furnished by the assessee, though may be cryptic one, but could not be said to be erroneous and prejudicial to the interest of revenue.”

Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) a. That the order of the AO sought to be revised is erroneous, and b. That it is prejudicial to the interest of the revenue 12. Therefore, the above order of the ld Assessing Officer is required to be tested whether it is erroneous and prejudicial to the interest of the revenue in the above facts of the case. In the present case, the ld Assessing Officer passed order u/s 153A read with section 153C on 29.11.2016 but prior to passing the above order, the ld Assessing Officer issued letter dated 05.02.2014 to the assessee wherein, he asked the list of share holders stating their name, address, PAN along with the details of their shareholdings. The assessee submitted the above details vide letter dated 09.12.2013 and 30.05.2014 where, requisite details were submitted. Assessee submitted that it has issued 246000 shares during the year and submitted the shareholder wise details along with confirmation of the share holders coupled with their share application form, bank statement, income tax return copies and annual accounts of the subscribing companies. It further submitted board resolution for investment in the company, copy of the allotment letter, copy of confirmation etc. The assessee further requested that AO may also verify the facts of the above said transaction independently. The ld Assessing Officer thereafter, issued notice u/s 133(6) of the Act to those companies vide letter dated 27.05.2014 to which the shareholders replied on 12.06.2014 submitting their requisite details as called for. Such shareholders confirmed the fact of application of share, amount of share application money, their assessment particulars and also the copy of the balance sheet where these investments are reflected. They also submitted the copies of their bank statements from which the payment for share application was made. Consequent to that the ld Assessing Officer issued summons to the Directors of those companies u/s 131 of the Act and their statements were recorded. In specific reference to the question raised to the Director of the depositor companies, they confirmed the fact of making investment in the assessee company and also explained the nature of the business of the investor companies as well as source of the funds of making investments. He specifically submitted that source of the investment in the assessee company is receipt of inter-corporate deposit by the shareholder companies from M/s. Bhushan Steel and Power Ltd. He further explained how the premium has been decided. He further stated that as the assessee is carrying on the development of a project of residential complex, IT park at Punjab therefore, such investment are made. He further stated that investments are made on long term basis in the company. With respect to the report of the inspector that these companies were not available at the addresses given, he stated that the address visited by the inspector is incorrect and therefore, at the given address these Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) companies could not be found. He further narrated once again the correct address of these companies. He further submitted the bank statement of these companies to show the amount deposited with the assessee company. Further statement of Mr. Saurabh Jain who is also the director of these companies was recorded on 29.05.2014 who also confirmed the above transactions. Before the ld CIT the assessee thus submitted that complete enquiry with respect to the three companies have been made by the ld Assessing Officer. The ld CIT has stated that no evidence to the nature of the capital advances or capital goods have been produced. The assessee has submitted that these are the share capital money received by the assessee adequately before the ld Assessing Officer. Therefore, there cannot be any question of the receipt of capital advances or capital goods purchases. The ld CIT also stated that Mr. Sanjay Singhal who is the director of Bhushan Steel has admitted to disallowance of interest on inter corporate deposits to the share holder companies who invested in the assessee company. In the present case the disallowance of interest in the hands of Bhusan steel does not make the order of the ld Assessing Officer erroneous but in fact shows that assessee has proved even the source of the source of the money deposited in the assessee company. Further, the ld CIT has alleged that transaction of the repayment of the loans by the share holder companies to Bhushan Steel Pvt. Ltd shows about the in genuineness of the whole transaction. With respect to repayment of the loan taken by the share holders of the company does not make any impact on the creditworthiness of the depositors as well as the genuineness of the transaction. The ld CIT therefore, has stated that the ld Assessing Officer has failed to thoroughly examine/ investigate the identity/ genuineness/ creditworthiness of the parties from whom the alleged share application money has been received. In the present case in the assessment proceedings the ld Assessing Officer has made whatever enquiries were possible. The order of the ld CIT also did not suggest that what are the enquiries further required to be made by the ld Assessing Officer. It also does not show that how the enquiry made by the ld Assessing Officer are inadequate. According to us the Commissioner has set aside the assessment to the Assessing Officer to be made de novo. According to us the Commissioner had no jurisdiction to set aside the order of the assessment merely to conduct another purposeless and fruitless enquiry to reach the same result which was arrived earlier. If any further fresh enquiry is held it will be an empty formality as by going through the motion of making a further enquiry and reaching the same conclusion, no useful purpose would be achieved. Though, it is not expected of the Commissioner to record his final conclusion in his order but he must at least indicate as to how the order of the ld AO is Globus Projects Pvt. Ltd Vs. DCIT (ITA No. 2491/Del/2017) Bestech Hospitalities Pvt. Ltd, Vs.DCIT, (ITA No. 2484 /Del/2017) Bestech India Pvt. Ltd Vs. DCIT,( (Assessment Year 2012-13) erroneous and prejudicial to the interest of revenue. Same is missing in the impugned order. It is also an established fact that every mistake or error committed by the AO cannot be subject to revision, but it is only when such type of mistake makes the order „prejudicial‟, then only the CIT can assume the power of the revision. Further, the power of revisions is not meant to exercise for the purpose of directing the officer to hold another investigation when the order of the officer was not found to be erroneous. In the present case the ld CIT has failed to show that what is the „thorough investigation/ examination‟ required to be made by the AO in the present circumstances when all the possible enquiries have been taken by the ld AO. The ld CIT has also not shown that the order of the ld AO is contrary to the provisions of the Act or any judicial precedent. In the present case the ld AO even examined the source of the credit of share capital of the share holders. The shareholder companies were issued enquiry letters u/s 133(6) of the Act as well as summons were issued to their directors u/s 131 and they were examined. The version of the shareholder was also not proved to be wrong by the ld CIT. Therefore, neither the ld CIT could show that it is matter of “inadequate enquiry” or “un-sustainability” of the order. In view of this we are not inclined to sustain the order of the ld CIT passed u/s 263 of the Act.