I.P.MUKERJI, J - (1.) Previously the appellant/petitioner was a partnership. On 19th March, 2010 it converted itself into a public limited company. It carries on the business of managing and operating coal mines in West Bengal, Jharkhand and Maharashtra which are for captive use. Henceforth, this organization will be described as EMTA.
(2.) The Income Tax department in or about 2009 became suspicious of this company and of the people involved with it. The main cause of this impression was an apparently exaggerated expenditure shown by the appellant in its accounts. According to the Respondent Revenue, this expenditure was spiked up by a cleverly planned business operation. The sole intention was to evade income tax. The assessment years taken into account by the respondent Revenue were 2007-2008, 2008-2009 and 2009-2010. In August, 2013 survey proceedings under Section 133A of the Income Tax Act were carried out against the appellant. On 1st and 2nd August, 2013 search operations were carried out at their office and at the residence of one Mr. Suman Jain having a controlling interest in the company.
(3.) The following conclusions were reached by the Revenue from the survey operations under Section 133A of the said Act: "(i) The four companies namely 1) Bardhaman Excavators Pvt. Ltd. 2) Landmark Excavators Pvt. Ltd. 3) Venus Excavators Pvt. Ltd. and 4) Zoom Transport Pvt. Ltd. are shell companies existing on paper only. They could not be located at the given addresses and their directors also not traceable. (supra 3, 6,7,8,9,10 and 11) (ii) The said four shell companies did not have the wherewithal by way of equipment or manpower to render any services. (supra 3, 6,7,8,9,10 and 11) (iii) Elaborate and extensive enquires during the course of search and seizure and survey operation at the mine sites and offices where the services were supposedly rendered by these four shell companies proves beyond doubt that no services were rendered at all. (supra 14, 15, 16 and 17) (iv) The process of raising, submission and processing of the bills of these four shell companies is different from the rest. The process is designed only with a view to book bogus expenditure. (supra 13, 14 and 17) (v) The persons from whom these shell companies allegedly bought fuel, spares and other supplies are not traceable and the evidence establishes beyond doubt the fact that no transactions actually took place. (supra 9 and 12) (vi) All the given addresses of these shell companies, their directors and the alleged suppliers are of premises either owned or rented by the Jains. (supra 8 and 9) (vii) The money trail or the modus operandi for withdrawal of money paid by the applicant proves that the expenditure booked through the said four companies is bogus. (supra 5, 7, 9 and 12) (viii) Thus, it would be seen that the Jains have created an elaborate facade of these four shell companies." These four shell companies had 53 alleged sub suppliers and service providers. They were purported to be paid by cheque by the shell companies. ;