Bogus accommodation entries to be taxed as Income from undisclosed sources under section 68

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Bogus accommodation entries to be taxed as Income from undisclosed sources under section 68

Short overview:

 Assesssee did not furnish PAN and Bank statements or any of the directors of investor companies merely showing that transactions were carried out through banking channel was not sufficient to prove genuineness of transaction in the matter. When investors having nil income had deposited cash in their bank account immediately before giving cheque to assessee. The same were bogus entries received by assessee in the name of sale of shares and addition was rightly made by AO under section 68.

AO received specific information from DIT (Inv) as to assessee having received accommodation entries from certain parties in the guise of sale proceeds of shares. Accordingly, AO made addition under section 68. Assessee challenged this on the ground that amounts had been received through banking channel.

It is held that Assesssee did not furnish PAN and Bank statements or any of the directors of investor companies merely showing that transactions were carried out through banking channel was not sufficient to prove genuineness of transaction in the matter. When investors having nil income had deposited cash in their bank account immediately before giving cheque to assessee. The same were bogus entries received by assessee in the name of sale of shares and addition was rightly made by AO under section 68.

Decision: Against the assessee.

IN THE ITAT, DELHI BENCH

BHAVNESH SAINI, J.M. & PRASHANT MAHARISHI, A.M.

Hillman Properties (P) Ltd. v. ITO

ITA No. 6530/Del./2014

11 October, 2019

Assessee by: Amit Goel, C.A.

Revenue by: Rakhi Vimal, Sr. D.R.

ORDER

Bhavnesh Saini, J.M.

This appeal by assessee has been directed against the Order of the learned Commissioner (Appeals)-XXVII, New Delhi, Dated 29-8-2014, for the assessment year 2001-02.

  1. Briefly the facts of the case are that information was gathered from DIT (Inv), New Delhi that the assessee company had received accommodation entries of Rs. 25,00,000. Since the amount was not reflected in the balance sheet filed by the assessee along with the original-return, action under section 147 of Income Tax Act, 1961 was taken. Notice under section 148 of Income Tax Act, 1961 was issued and served upon the assessee. The assessee filed letter stating that the return filed earlier under section 139(1) may be treated as return filed under section 148 of the Income Tax Act. The assessing officer issued statutory notices for completion of the assessment. Reasons for reopening of the assessment were also provided to assessee. The assessee filed written submission objecting the re-assessment proceedings which were disposed off separately by passing speaking order. The assessee stated that the assessing officer has failed to give any details about the information and documents which have been relied upon by the assessing officer at assessment stage. However, the assessing officer noted that for initiation of action under section 148 have been conveyed to the assessee and hence, the allegation of the assessee are incorrect. The assessee was asked to produce the principal officer of the following company from whom the accommodation entries were taken :–
  2. Arun Finvest Pvt. Ltd., Rs. 15 lakhs on 17-3-2001.
  3. Polo Leasing & Finance P. Ltd., Rs. 10 lakhs on 17-3-2001.

2.1. The assessee did not file any reply on the date fixed. Bank statements of above said companies were called for under section 133(6) of the Income Tax Act, 1961 for the financial year under appeal, which were placed on record.

The Bank statements of the assessee was also received in response to notice under section 133(6). On going through the Bank statement of the assessee with Bank of America DLF Centre Sansad Marg New Delhi, it was noticed that the assessee received following entries from entry providers.

17-10-2000 5,00,000
30-10-2000 38,50,000
2-11-2000 41,00,000
17-3-2001 25,00,000
17-3-2001 15,00,000
17-3-2001 10,00,000
1,34,50,000
Less cash withdrawal 3,20,000
1,31,30,000

2.2. The modus operandi of the transaction was that the assessee company had paid cash to the entry providers and received cheques or pay order against the said cash paid. This method has been proved from the transactions appeared in the Bank Accounts of the companies M/s Arun Finvest Pvt Ltd. and M/s Polo Leasing & Finance P.Ltd. The assessing officer further noted that in Bank Account No. CA 598 maintained with M/s Federal Bank Ltd., Karol Bagh New Delhi, of M/s Polo Leasing & Finance (P) Ltd., cash of Rs. 10,00,000 was deposited in Bank Account No. CA 567 on 17-3-2001 which was transferred to Bank Account No. 598 of the same company. From Bank Account 598 the said amount of Rs. 10,00,000 was transferred to the assessee company’s Account vide cheque no 916291 of 17-3-2001. Similarly, in the case of other company M/s Arun Finvest Pvt Ltd., cash of Rs. 15,00,000 ( Rs. 8,00,000 and Rs. 7,00,000) was deposited in Account No. 2852 on 17-3-2001 from where the amount in question was transferred to Account No. CA 2813 of M/s M/s Arun Finvest Pvt Ltd. on same day 17-3-2001. The amount of Rs. 15 lakhs was transferred on 17-3-2001 to the account of assessee company by cheque No.169334. From the facts stated above, it is proved that the whole amount of Rs. 1,31,30,000 deposited in Bank Account with Bank of America, is assessee’s own money which is routed through different persons who were entry providers. Show cause notice was issued to assessee as to why the total deposit of Rs. 1,31,30,000 in exchange of cash payment should not be treated as unexplained and undisclosed income of assessee. The assessee did not appear on the date fixed nor any written submissions have been filed. The assessing officer noted that from the information received from the DIT (Inv.), it was noticed that the Directors of the above accommodation entry provider Companies had admitted before Investigation Wing that the said companies were utilised for providing accommodation entries. The assessing officer in view of the above facts and looking to the non-cooperation of the assessee, added the amount under section 68 of the Income Tax Act, 1961. As per the balance-sheet of the assessee, the share application money at Rs. 58,97,200 was pending for allotment on 31-3-2000. During the year under assessment the assessee allotted shares for Rs. 20 lakhs and Rs. 30,72,200 was still pending as share application money. It means the balance amount of Rs. 8,25,000 was refunded to the investors during the relevant assessment year 2001 -2002. From the Bank Account of the assessee, no such entry of Rs. 8,25,000 is appeared. It was, therefore, noted that the assessee has refunded the amount in cash, the source of which is not explained.

The assessing officer , therefore, made further addition of Rs. 8,25,000 on account of unexplained refund of share application money. The assessee challenged the reopening of the assessment as well as addition before the learned Commissioner (Appeals) who has allowed the appeal of the assessee partly. Therefore, we would be dealing with the issues involved in the present appeal. It may also be noted here that assessee filed additional evidences before the learned Commissioner (Appeals), on which, comments of the assessing officer have been called for.

  1. As regards Ground No.1 regarding initiation of re-assessment proceedings, assessee submitted before the learned Commissioner (Appeals) that the reasons recorded are only unsubstantiated allegations and, therefore, cannot be construed as reasons leading to the bonafide belief adequate for reopening of the assessment. The reasons recorded by the assessing officer for reopening of the assessment was also submitted by assessee and the same are recorded in the impugned order as under :

“An information regarding entry operators and their beneficiaries was received from DIT(Inv.)-l, New Delhi vide Dy. No. 1399 dated 2-3-2006 and DIT (Inv.) 2006-07/A.E./1536, dt. 5-2-2007 which reflected that the assessee maintained an account with Bank of America and received accommodation entries as per details given below:

Beneficiary Name Beneficiary Bank name Value of entry taken Instrument by which entry taken Date on entry taken Name of the account holder of entry giving Account Bank from which entry given Branch of entry giving Bank Account of the entry giving account
M/s Hillman Properties P. Ltd. Bank of America 15,00.00 169334 17-3-2001 Arun Finvest Pvt. Ltd. KVB Karol Bagh CA-2813
M/s Hillman Properties P. Ltd. Bank of America 10,00,000 916291 17-3-2001 Polo Leasing and finance Pvt. Ltd. Fedral Karol Bagh 598

The above mentioned amount of Rs. 25,00,000 were credited in the said account of the assessee. The report received from the DIT (Inv.) revealed that the enquiries were initiated to probe into some Bank account which were used to issue cheques to entry seekers or beneficiaries against cash paid by them to the entry operators. The assessee company has received entry from Ms Arun Finvest Pvt. Ltd. and M/s Polo Leasing and Finance Pvt. Ltd. and these companies were utilizing for providing accommodation entry by Sh. Ashok Kumar Gupta. Sh. Baldev RajK Mukesh Gupta, Sunder Pal Singh and Rajan Jaiswal has operated number of Bank accounts.

The Balance Sheet filed along with the return of income shows that there is increase in authorized capital of Rs. 10,00,000 as compared to immediate preceding year. During the year under consideration, assessee has also made the investment in a new property of Rs. 46,95,000. The information sent by the Investigation Wing suggest that there is transaction of Rs. 25,00,000 as mentioned above, is accommodation entry only. Accordingly the amount of Rs. 25,00,000 is escaped income and taxable under deeming provisions of the Income-tax Act. Hence, in view of the information received from the Investigation Wing and perusal of the Balance Sheet suggest the Rs. 25,00,000 is the undisclosed income of the above assessee for assessment year 2001-02.

On the basis of the information sent by the Investigation wing and accompanying documents, I am satisfied that this transaction of Rs. 25,00,000 as mentioned above, is accommodation entry only.

Accordingly, the amount of Rs. 25,00,000 is unaccounted money belonging to the assessee which has been utilized for the entry and represents income escaping assessment. Accordingly. I have reasons to believe Rs. 25.00.000 has escaped assessment and the escapement has been on account of failure on part of assessee to truly and fully disclose all material fact therefore it is a fit case for initiation of proceedings under section 147 of the Income Tax Act. ”

3.1. The learned Commissioner (Appeals) referring to the above reasons noted that assessing officer had specific information regarding accommodation entries received by assessee including the Bank account number, instrument number and the same was found credited in assessee’s Bank account with Bank of America. The reasons recorded specifically states that there was failure on the part of assessee to fully disclose all material facts in return of income filed by them and, therefore, the initiation of 147 proceedings have been done properly after verifying the information received from Investigation Wing with return of income specially with the balance-sheet filed by the assessee. Therefore, the assessee’s claim that reasons recorded are only unsubstantiated allegations and cannot be construed as reasons to believe is not acceptable. The learned Commissioner (Appeals) also distinguished the Judgment relied upon by assessee and noted that in the case of assessee assessing officer had recorded proper reasons for reopening of the assessment and, therefore, decisions cited by assessee are distinguishable.

The learned Commissioner (Appeals) referred to Judgment of Hon’ble Delhi High Court in the case of A.G. Holdings Pvt. Ltd. (2012) 352 ITR 364 (Del) : 2012 TaxPub(DT) 3287 (Del-HC) and reproduced the same in the impugned order and noted that facts are identical as in the case of the assessee as the return of income was only processed under section 143(1) and notice under section 148 was also issued after 04 years. The learned Commissioner (Appeals) also noted that in the case of assessee sufficient material is available on record which are adequate enough to form the belief that income chargeable to tax has escaped assessment on account of assessee’s failure to furnish full and true particulars in the return of income filed by assessee. The learned Commissioner (Appeals) also relied upon Judgment of Hon’ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007) 291 ITR 500 (SC) : 2007 TaxPub(DT) 1257 (SC) in which similarly reopening was held to be valid where return was only processed under section 143(1)(a) of the Income Tax Act. The learned Commissioner (Appeals) also relied upon Judgment of Hon’ble Supreme Court in the case of Purushottam Das Bangur (1997) 224 ITR 362 (SC) : 1997 TaxPub(DT) 1026 (SC) wherein it was held that “based on information received from investigation wing, the assessing officer can without any further investigation form the belief that income chargeable to tax had escaped assessment.” In the present case, the information received by the assessing officer from investigation wing was specific that accommodation entries were received by the assessee and the information mentioned the Bank Account no, instrument no. etc of the accommodation entries. The information further mentions that the amounts were found credited in assessee’s Bank account with Bank of America.

Therefore, the assessing officer has correctly initiated the re-assessment proceedings in the matter. The learned Commissioner (Appeals), accordingly, upheld the initiation of the re-assessment proceedings in the matter and rejected this ground of appeal of assessee.

  1. The learned Counsel for the assessee reiterated the submissions made before the authorities below and submitted that it was only borrowed satisfaction based on information received from Investigation Wing and that assessing officer has not applied his mind to the information received from Investigation Wing. The reopening of the assessment is invalid and bad in law. He has relied upon Judgment of Hon’ble Delhi High Court in the cases ofPr. CIT v. G & G Pharma India Ltd. 2015 (10) TMI 754 (Del.) : (2016) 384 ITR 147 (Del) : 2015 TaxPub(DT) 4054 (Del-HC); Pr. CIT v. N.C. Cables Ltd. 2017 (1) TMI 1036 (Del.) : (2017) 391 ITR 11 (Del) : 2017 TaxPub(DT) 0264 (Del-HC) ; Pr. CIT v. Meenakshi Overseas Pvt. Ltd. 2017 (5) TMI 1428 (Del.) : (2017) 395 ITR 677 (Del) : 2017 TaxPub(DT) 1791 (Del-HC) and Pr. CIT v. Jatin Investment Pvt. Ltd. 2017 (2) TMI 342 (Del.) : [ITA Nos.43/2016 & 44/2016, dt. 18-1-2017] : 2018 TaxPub(DT) 3267 (Del-HC).
  2. On the other hand, learned D.R. relied upon the Orders of the authorities below and submitted that assessee had not discharged the onus lay upon it to explain the issue. It was a private transaction and no details were submitted by assessee for verification of the transaction. The assessing officer received specific information from Investigation Wing that assessee has received accommodation entries which were credited in the accounts of assessee which were further received from the above parties and in their accounts cash have been found deposited. Therefore, reopening of the assessment is justified in the matter. The learned D.R. relied upon the following decisions.

5.1. Judgment of Hon’ble Gujarat High Court in the case of Yogendrakumar Gupta v. ITO (2014) 366 ITR 86 (Guj.) in which it was held as under :

“Where subsequent to completion of original assessment. Assessing officer, on basis of search carried out in case of another person, came to know that loan transactions of assessee with a finance company were bogus as said company was engaged in providing accommodation entries, it being a fresh information, he was justified in initiating reassessment proceeding in case of assessee.”

5.2. Judgment of Hon’ble Supreme Court in the case of ACIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. (2007) 291 ITR 500 (SC) : 2007 TaxPub(DT) 1257 (SC) in which it was held as under :

“Where Hon’ble Supreme Court held that so long as the conditions of section 147 are fulfilled, the assessing officer is free to initiate proceedings under section 147 and failure to take steps under section 143(3) will not render the assessing officer powerless to initiate reassessment, proceedings, even when intimation under section 143(1) has been issued. Adani Exports v. DCIT (1999) 240 ITR 224 (Guj) : 1999 TaxPub(DT) 1115 (Guj-HC) was distinguished.”

5.3. Judgment of Hon’ble Delhi High Court in the case of A.G. Holdings Pvt. Ltd. v. ITO (2012) 352 ITR 364 (Del) : 2012 TaxPub(DT) 3287 (Del-HC) in which it was held as under :

“Where held that there is no requirement of law that reasons recorded for initiating reassessment procedure, should also accompany notice issued under section 148.”

  1. We have considered the rival submissions. In this case the assessing officer has received specific information from Investigation Wing that assessee has received accommodation entries from two parties, the details of the same are mentioned in the reasons which have not been disputed by the assessee as well. The report received from the DIT (Inv.) Wing further reveals that enquiries were initiated to probe into some Bank account which were used to issue cheques to entry seeker or beneficiary against cash paid by them to the entry operator. The assessing officer has specifically recorded the fact in the assessment order that initially in different account of the Investors, the cash have been deposited from where the amount have been transferred to the another accounts of Investors and then transferred to assessee. These informations are specific to show that against the cash, entry have been provided to the assessee by entry providers. The assessee failed to produce any evidence before the authorities below. Therefore, it is a fit case of escapement of income on account of failure on the part of assessee to disclose fully and truly all material facts. Therefore, reopening of the assessment is wholly justified in the matter. The objections of the assessee have been separately disposed of by the assessing officer in which no infirmity have been pointed out by the assessee. At the stage of recording of the reasons for reopening of the assessment, all relevant facts leading to belief are justified.

However, the sufficiency of those material is not necessary.

Ultimately, on making further enquiry into the matter, it is specifically found that cash were deposited in the Bank accounts of entry providers from where the amounts in question have been transferred to the account of the assessee. Therefore, there is escapement of income chargeable to tax on account of assessee’s failure to furnish full and true particulars. Since in this case return was only processed under section 143(1), therefore, assessing officer was justified in reopening of the assessment on bringing the material on record that there was an escapement of income from assessment in the matter. No infirmity have been pointed-out in the Orders of the authorities below for initiation of re-assessment proceedings in the matter.

Considering the facts of the case and material on record, we do not find any justification to interfere with the Order of the learned Commissioner (Appeals) in upholding the initiation of re-assessment proceedings in the matter. Ground No.1 of appeal of assessee is accordingly dismissed.

  1. On Ground Nos. 2 and 3, assessee challenged the addition of Rs. 50 lakhs under section 68 of the Income Tax Act, 1961.
  2. The assessing officer made addition of Rs. 1,31,30,000 under section 68 of the Income Tax Act in respect of several entries provided by the entry providers which were not explained by the assessee, which were entered into the Bank account of the assessee.
  3. The assessee submitted additional evidences before learned Commissioner (Appeals) explaining various credits appearing in their Bank account with Bank of America, details of same are noted at page-19 of the impugned order. The learned Commissioner (Appeals) noted from these details that documentary evidences submitted regarding the sale of shares of BLS Polymers Ltd., to M/s. Suma Finance & Investment Ltd., Arun Finvest (P) Ltd. and Polo Leasing & Finance (P) Ltd. are letters issued in assessee’s ‘letter head’ to the Directors of the above 03 companies requesting them to accept share certificates and requesting them to issue acknowledgment of receiving share certificates to the assessee. The learned Commissioner (Appeals) also noted that there is no PANs, Bank statements or Income-tax particulars of the above three accommodation providers, namely Suma Finance & Investment Ltd., Arun Finvest (P) Ltd. and Polo Leasing & Finance (P) Ltd. in the additional evidence submitted by the assessee. The computation statement of income of the assessee filed along with the additional evidence indicates that shares worth Rs. 54,25,000 were sold at the book value and the assessee had no capital gain from this transaction. Moreover, the additional evidence indicates that money received as accommodation entries were immediately transferred to assessee’s sister concern M/s Shiv Cable & Wire Industries on the same date, i.e., 17-3-2001 and, therefore, it appears that the assessee being an investment company had only acted as conduit for transferring the accommodation entries to its sister concern. This explains the assessee’s reluctance to furnish proper evidence at appellate stage. The assessee also failed to produce any of the Directors of these 03 accommodation entry provider companies. The assessing officer objected to the additional evidence in the remand report. The learned Commissioner (Appeals) noted that during appellate proceedings Counsel for assessee agreed to produce BLS Polymers Ltd., and M/s. Shiv Cable & Wire Industries for cross-examination.

However, the assessee was not prepared to produce the 03 accommodation entry providers namely Suma Finance & Investment Ltd., Arun Finvest (P) Ltd. and Polo Leasing & Finance (P) Ltd., during appellate proceedings. The learned Commissioner (Appeals) considering the material on record, deleted the addition of Rs. 81,33,000 leaving addition of Rs. 50 lakhs which is under consideration in respect of the above 03 accommodation entry provider companies because the assessee did not produce adequate evidence even at the appellate proceedings. The assessee did not produce any of the Directors of these 03 companies to verify the transaction and to further verify about cash deposited in their Bank accounts on the same day when entry was provided to the assessee. The learned Commissioner (Appeals), therefore, noted that assessee refused to provide any PAN and other details of these accommodation entry provider companies and refused to prove genuineness of the sale of shares to the above 03 accommodation entry providers even during appellate proceedings. None of the Directors were produced for examination even at the remand proceedings despite assessing officer issued summons to them to appear and get the transactions verified. Counsel for assessee has shown inability to produce any of the Directors or responsible person of these 03 companies for production and examination before assessing officer as well as before learned Commissioner (Appeals). The learned Commissioner (Appeals), therefore, noted that despite there was no additional evidences, assessee did not furnish adequate evidence in respect of these 03 parties and has failed to get the transactions verified. The learned Commissioner (Appeals) relied upon decision of Hon’ble Delhi High Court in the case of Titan Securities (2013) 215 Taxman 164 (Del.) : 2013 TaxPub(DT) 1585 (Del-HC) in which on the similar circumstances, addition have been confirmed. The learned Commissioner (Appeals) in the absence of any reliable evidence in respect of these 03 accommodation entry providers namely Suma Finance & Investment Ltd., Arun Finvest (P) Ltd. and Polo Leasing & Finance (P) Ltd., confirmed the addition of Rs. 50 lakhs.

  1. Learned Counsel for the assessee reiterated the submissions made before the authorities below and submitted that assessee filed confirmations and amounts have been received through Banking channel, therefore, addition should not have been confirmed. He has further submitted that assessee has sold the shares at face value (PB-24) and referred to PB-20 on the proposition that assessee made a request to the assessing officer to provide copies of the statements which were adverse in nature so that assessee could make proper reply on the same. Therefore, no addition could be made.
  2. On the other hand, learned D.R. relied upon the Orders of the authorities below and submitted that these were private transactions and were not listed on any stock exchange. No adequate evidence were furnished. Assessee did not furnish PAN and Bank statements to substantiate genuine transaction. The assessee or other parties did not earn any income and have NIL income only. No business activity have been conducted by them. Therefore, preponderance of probability shows that these were bogus accommodation transactions. The learned D.R. relied upon the following decisions :
  3. CIT v. Nipun Builders & Developers (P.) Ltd. (2013) 350 ITR 407 (Del.) : 2013 TaxPub(DT) 0526 (Del-HC).
  4. CIT v. N.R. Portfolio Pvt. Ltd. (2013) 29 taxmann.com 291 (Del.) : 2013 TaxPub(DT) 1173 (Del-HC).
  5. CIT v. Focus Exports (P.) Ltd. (2015) 228 Taxman 88 (Del.) : 2014 TaxPub(DT) 4283 (Del-HC).
  6. CIT v. Neelkanth Ispat Udyog Pvt. Ltd. (2013) 81 DTR 214 (Del.) : 2013 TaxPub(DT) 0690 (Del-HC).
  7. CIT v. N. Tarika Investment Pvt. Ltd., (2014) 40 taxmann.com 225 (Pat) : 2014 TaxPub(DT) 0086 (Del-HC).
  8. CIT v. Titan Securities Ltd. (2013) 215 Taxman 164 (Del.) : 2013 TaxPub(DT) 1585 (Del-HC).
  9. PCIT v. Vikram Singh Order of Hon’ble Delhi High Court, dt. 25-8-2017.
  10. We have considered the rival submissions. The finding of fact recorded by the authorities below have not been disputed by the learned Counsel for the assessee.

The assessing officer has specifically given a finding of fact that the above accommodation entry provider companies have initially deposited cash in their Bank accounts and from where the funds were transferred to another Bank account through the Banking channel and then, a cheque have been given to the assessee. The cash have been deposited on the same day when transaction was conducted with the assessee. The assessee did not provide PAN of these 03 accommodation entry providers along with their Bank statements. The assessing officer gathered information from the Banks on the basis of entries called under section 133(6) of the Income Tax Act. The assessing officer had specific information from DIT (Inv.) that assessee has received accommodation entries from 02 parties. However, later on, it was found that these are good in number and ultimately, addition was made on 03 accommodation entry providers. The learned Commissioner (Appeals) in his findings has specifically noted that despite entertaining the additional evidences, assessee did not furnish any adequate/evidence while filing additional evidences in respect of these 03 parties. The assessee failed to produce necessary details of these 03 accommodation entry providers and also shown inability to produce any of the Directors or responsible person of these 03 accommodation entry providers for examination before assessing officer Therefore, in the absence of any adequate evidence and that assessee did not produce any of the responsible person or Directors of these 03 accommodation entry providers, the authorities below were justified in taking an adverse inference against these parties, particularly, when similar amount of cash was found deposited in their Bank accounts prior to giving cheque to the assessee. Therefore, even if some statements have been recorded by Investigation Wing and copies thereof have not been provided to assessee, but, there was sufficient material available on record to show that these were bogus transactions because assessee received accommodation entries from these 03 parties. Burden is upon assessee to prove the identity of the parties, their creditworthiness and genuineness of the transaction in the matter. It may also be noted here that the above burden upon assessee have not been discharged by assessee by any adequate evidence. Further, the balance-sheet of the assessee company is filed which shows that assessee has NIL income, NIL expenditure and only carry forward losses have been shown. Return is filed at NIL income. No business activities have been carried out by the assessee.

It is, therefore, difficult to believe that when assessee did nothing in assessment year under appeal as well as in preceding assessment year, how the assessee has been able to sell the shares to such parties who have made cash deposits in their Bank account before giving cheque to the assessee. Therefore, the circumstances clearly show that these were bogus entries received by the assessee in the name of sale of shares. How the investors would show faith in assessee when assessee has no worth at all ? The learned Commissioner (Appeals) has also specifically found on record that the money received as accommodation entries were immediately transferred to assessee’s sister concern M/s. Shiv Cable & Wire Industries on the same day on 17-3-2001. It will strengthen the finding of fact recorded by the authorities below that assessee had been acting as a conduit for transferring the accommodation entries to its sister concern. These facts clearly show that assessee has received its own cash money through the transactions carried out through various accommodation entry providers. Therefore, these were arranged affairs of the assessee company only to provide further accommodation entries to the sister concern. The decisions relied upon by the learned D.R. squarely apply to the facts and circumstances of the case. Merely showing that transactions were carried out through Banking channel in the facts and circumstances of the case is not sufficient to prove the genuineness of the transaction in the matter. The Hon’ble Supreme Court in the case of CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) : 1971 TaxPub(DT) 0375 (SC) and Smt. Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) : 1995 TaxPub(DT) 1173 (SC) have held that “Courts and Tribunals have to Judge the evidence before them by applying the test of human probability.” If the said test is applied in this matter, it is clearly established that assessee failed to prove identity of the accommodation entry providers, their creditworthiness and genuine of the transaction in the matter. We, therefore, do not find any justification to interfere with the Orders of the authorities below in making the addition of Rs. 50 lakhs. Both these grounds of appeals of the assessee are dismissed. No other point is argued or pressed.

  1. In the result, appeal of assessee dismissed.

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