O.P. Kant ORDER
Bhavnesh Saini, Member (J)
1. This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-9, New Delhi, Dated 08.07.2019, for the A.Y. 2011-2012, challenging the reopening of the assessment under section 147/148 of the I.T. Act, 1961 and addition of Rs. 10 lakhs under section 68 of the I.T. Act, 1961.
2. We have heard the Learned Representatives of both the parties through video conferencing and perused the material on record.
3. Briefly the facts of the case are that original return of income was filed by the assessee-company on 29.09.2011 declaring income of Rs. 1,23,511/-. The DDIT (Inv.), New Delhi informed that there is a news items in the electronic and print media during first half of February 2015 about donation given to Aam Aadmi Party ("AAP") by four allegedly bogus companies. A search was conducted in the residential and office premises of Shri Deepak Agarwal and Shri Mukesh Kumar which reveal certain documents. Several statements were recorded during the pre-search and post-search operation. From the material on record and statements of these persons, it was revealed that both have been providing entries to other companies. An FIR was also registered by the Economic Offence Wing of Delhi Police. It was also found that beneficiaries have provided commission for arranging entries. It was found that M/s. Paryog India Pvt. Ltd. ["PIPL"] is controlled by these two persons i.e., Shri Mukesh Kumar and Shr. Deepak Agarwal who have provided accommodation entries, of Rs. 10,00,000/- to the assessee-company. The A.O. reopened the assessment by recording reasons. The assessee was asked to furnish the documents i.e., copy of ITR and bank statements of this party. The assessee submitted the same. The A.O. on the basis of statements of Shri Mukesh Kumar and Shri Deepak Agarwal found that they have controlled the Investor Company PIPL who have provided accommodation entry to the assessee company. The A.O. on the basis of statements of these two persons and material on record, made addition of Rs. 10 lakhs against the assessee in the re-assessment order passed under section 147/143(3) of the I.T. Act, 1961, Dated 24.12.2018.
3.1. The assessee challenged the reopening of the assessment as well as addition on merits before the Ld. CIT(A). The detailed written submissions of the assessee is reproduced in the appellate order in which it was submitted that there was no basis to reopen the assessment in the case of the assessee and that assessee has filed documentary evidences before the A.O. which are (i) Request form for the allotment of shares by PIPL (ii) Copy of Memorandum of Association and Articles of Association of PIPL, (iii) Copy of ITR for the A.Y. 2011-12 of PIPL (iv) Balance sheet of PIPL for the A.Y. 2011-2012(v) Copy of Board resolution of PIPL for making investment in shares of assessee company, (vi) Copy of bank statement of PIPL (vii) Copy of the affidavit of the Director of PIPL confirming transaction with assessee company, (viii) Copy of acknowledgment of receipt of shares by PIPL. The assessee submitted that no independent enquiry have been conducted on these documentary evidences by the A.O. and even the Investor has not been summoned for recording their statement. The A.O. did not provide any opportunity to cross-examine to the statements of Shri Deepak Agarwal and Shri Mukesh Kumar which is the basis for making addition against the assessee, despite specific request is made by assessee therefore, such statements cannot be read in evidence against the assessee. The assessee relied upon Judgment of the Hon'ble Supreme Court in the case of Kishanchand Chellaram vs., CIT MANU/SC/........