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14-01-2020, Par Excellence Leasing and Financial, Section 132, Tribunal Delhi

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6 days 2 hours ago #12054 by amit
Section - 132, 153C, 153A, 68, 133(6), 251(2)
Order Date - 14-01-2020
Favouring - Revenue
Court - Tribunal Delhi
Appellant - Par Excellence Leasing and Financial Services Pvt. Ltd.
Respondent - ACIT
Justice - G.S. PANNU VP & K. NARASIMHA CHARY JM
Citation - 120Taxpundit119
Appeal No. - ITANos. 4515, 4516 & 4517/Del/2015
Asstt. Year - 2010-11, 2011-12 & 2012-13

Order

PER : K. NARASIMHA CHARY, J.M.

Aggrieved by the common order dated 15/5/2015 in appeal Nos.68 to 70/14-15 passed by the learned Commissioner of Income Tax (Appeals)-XXVI, New Delhi (“Ld. CIT(A)”) for the assessment years 2010- 11 to 2012-13, M/s Par Excellence Leasing and Finance Services Private Limited (“the assessee”) filed these three appeals on identical grounds. Since all these appeals emanate from a common order, we deem it just and convenient to dispose them of by way of this common order.

2. Brief facts of the case are that the assessee is a private limited company. There is an action under section 132 of the Income Tax Act, 1961 (for short “the Act”) at the business premises of ABW group of cases and atthe residential premises of their Directors and various documents/books of accounts etc were found and seized during the course of search. During the pre-search enquiries it was found that unaccounted income earned by the ABW group was roote back n the books of accounts of the different companies of the group through bogus share capital and the share premium. Enquiries were conducted to find out the shareholding pattern of the group companies which indicated that share capital/share premium of the companies were prima facie bogus and received from the companies which are bogus and are only paper companies. While examin ng the seized material of the group of cases in the capacity of the Assessing Officer of the person searched, learned Assessing Officer found documents belonging to the assessee company in this case also, and therefore, after recording the satisfaction note on 19/1/2014 indicating that the said documents belong to the assessee company and that action under section 153C of the Act was required. S id documents were examined in the capacity of the Assessing Officer of the person other than the searched person and a fresh satisfaction note was prepared on 22/1/2014 indicating the satisfaction that the said documents belong to the assessee company and therefore, provisions of section 153C of the Act were attracted. Notice under section 153C of the Act read with section 153A of the Act was issued and proceedings were taken up accordingly.

3. Details of share capital and share premium obtained by the assessee in the financial years 2009-10 to 2011-12 in the following way:-

4. After noticing that the no business activities were going on at the address as given in respect of the investor companies and denoting the result of the fieldenquiries which provides that the said companies were just paper concerns which have been used for providing accommodation entries through share capital and share premium, learned Assessing Officer issued notice under section 142 (1) of the Act requesting the assessee company to provide the identity of the parties, their creditworthiness and the genuineness of the transactions. A questionnaire was also issued along with such notice.

5. Assessee’s contention was that all the shareholders are corporate entities registered with the Registrar of Companies and duly assessed to tax and that entire money was received by cheques and PAN of the parties were given. Assessee further contended that it has filed complete evidence to establish the identity of the shareholders’ existence. According to the assessee since it had provided the PAN and address of the parties, the documents for proving the identity alone is sufficient for examining the test of section 68 of the Act. Assessee was required to produce the controlling persons of the investors along with the details of shares allotted to them. Notices under section 133(6) of the Act were issued, but in some cases those were received back answered whereas in some cases no compliance was received, due to which, the Assessing Officer expressed that the bank accounts could not be examined. Learned Assessing Officer inferred from the facts and circumstances of the case that the companies are declaring income just nominal and their documents relating to Balance Sheet statements, as submitted by the assessee, it could be seen that the companies are just receiving funds from some pri ate limited companies and then transferring the same to other priv te limited companies which gives the idea that these companies are nothing but paper companies created to conduit companies to facilitate these type of transactions.

6. Learned Assessing Officer analysed the facts in the light of the decision dated 21/12/2012 of the Hon’ble jurisdictional High Court in the case of CIT vs. NR Portfolio Private Limited, Onassis Axles Private Limited vs. CIT in ITA No. 31/2013 and CIT vs. Odian Builders Private Limited and concluded that,-

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