आयकर अपील(cid:10)य अ(cid:11)धकरण,च(cid:16)डीगढ़ (cid:20)यायपीठ, च(cid:16)डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील स.ं/ ITA Nos. 238 & 239/CHD/2015 ITA Nos. 831 & 832/CHD/2018 (cid:13)नधा(cid:17)रण वष (cid:17) / Assessment Year : 2005-06, 2006-07 M/s PNG Trading Pvt. Ltd., The DCIT, SCO 99-100, 3rd Floor, Vs Central Circle-1, Sector 17-B,Chandigarh. Chandigarh.

(cid:22)थायी लेखा स.ं /PAN NO: AADCP3942J अपीलाथ(cid:26)/Appellant (cid:27)(cid:28)यथ(cid:26)/Respondent Assessee by : Shri Nikhil Goyal, Advocate and Shri Ashok Goyal,CA Revenue by : Smt. Kusum Bansal, CIT DR and Dr. Ranjit Kaur, Addl. CIT, Sr.DR Date of Hearing : 18.03.2025 Date of Pronouncement : 19.03.2025 HYBRID HEARING O R D E R PER RAJPAL YADAV, VP The present four appeals are directed at the instance of the assessee against the separate orders of ld. CIT(A) dated 29.12.2014 passed in assessment year 2005-06, 2006- 07 (quantum appeals) and against the orders of CIT(A) dated

27.03.2018 passed in assessment year 2005-06, 2006-07 [penalty appeal under Section 271(1)(c)].

2. First we take ITA 238/CHD/2015 in assessment year 2005-06. The assessee has raised six grounds of appeal, out of which Ground Nos. 1, 4, 5 and 6 are general grounds which do not call for recording of any specific finding. The assessee has taken additional ground of appeal by way of a letter dated 28.01.2017. Under this additional ground of appeal, assessee has pleaded that ld. CIT(A) has erred in confirming the addition of Rs.1,09,50,000/- ( under Section 68) and Rs.3,28,500/- (under Section 69) as unexplained expenditure are uncalled for because no incriminating material has been found during the course of search relevant to such additions. In substance, the plea taken under Ground No. 2 and 3 also revolves around this additional ground. Thus, the whole issue involved in the present appeal is whether any addition in the absence of any seized material is sustainable or not.

3. The brief facts of the case are that assessee has filed its regular return of income under Section 139(1) on

06.11.2006. A search under Section 132(1) was carried out on M/s Surya Nectar and Parabolic Group of cases on 17.09.2010. The assessee was also one of the concerns which was covered under search operation. Apart from these business premises, the residential premises of the Director was also covered under search. The AO has issued a notice under Section 153A and in response to that notice, assessee has filed its return of income on 10.09.2012 declaring total income at ‘nil’. A notice under Section 143(2) was issued and served upon the assessee. The ld. AO has observed in paragraph No. 5.2 that during the course of search, a document inventorized as A-3 was found and seized from the residence of Director Shri Vineet Gupta. Page No. 4 of this document has been reproduced on page No. 3 of the assessment order. The ld. AO has explained this page in paragraph No. 5.2.1 which read as under :

“5.2.1 This paper dated 16.9.2010 has the heading Vineet/PEPL/PDL where Vineet is Vineet Gupta, PEPL is Parabolic Estates Pvt. Ltd. and PDL is Parabolic Drugs Ltd. As per table A there is share capital introduction in favour of PEPL for Rs. 80,00,000/- out of which cash back due (to be paid to the entry provider) is for Rs. 82,40,000/- after adding service charge @ 3%. This clearly shows that assessee is paying commission/service charges @3% for obtaining accommodation entry in form of share capital.”

4. The AO, thereafter, observed that Investigation Wing has carried out a search upon the office premises of one Shri Tarun Goyal, Chartered Accountant at 13/34, WEA Arya Samaj Road, Karol Bagh, Delhi. According to the AO, Shri Tarun Goyal was engaged in providing accommodation entries to various concerns in the shape of bogus share application money, loan etc. On the strength of alleged information, he confronted th