M/s. Spectrum Coal & Power Ltd., New Delhi V. ACIT, New Delhi

CO 16/DEL/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3448 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 31-01-2017

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA.NOS.6103 & 6104/DEL./2016 ASSESSMENT YEARS 2007-2008 & 2008-2009 THE ACIT, CENTRAL CIRCLE-17, ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E-2, JHANDEWALLAN, NEW DELHI. VS., M/S. SPECTRUM COAL & POWER LIMITED, 18, RAO TULA RAM MARG, VASANT ENCLAVE, NEW DELHI. PAN AADCS9860J (APPELLANT) (RESPONDENT) CROSS OBJECTION NOS.15 & 16/DEL./2017 ARISING OUT OF ITA.NOS.6103 & 6104/DEL./2016 ASSESSMENT YEARS 2007-2008 & 2008-2009 M/S. SPECTRUM COAL & POWER LIMITED, 18, RAO TULA RAM MARG, VASANT ENCLAVE, NEW DELHI. PAN AADCS9860J VS., THE ACIT, CENTRAL CIRCLE-17, ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E-2, JHANDEWALLAN, NEW DELHI. (APPELLANT) (RESPONDENT) ITA.NOS.5585 & 5586/DEL./2016 ASSESSMENT YEARS 2008-2009 & 2009-2010 THE ACIT, CENTRAL CIRCLE-17, ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E-2, JHANDEWALLAN, NEW DELHI. VS., M/S. ACB INDIA LIMITED, C.-102, LGF, NEW MULTAN NAGAR, NEW DELHI. PAN AABCA0043K (APPELLANT) (RESPONDENT) 2 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . CROSS OBJECTION NOS.210 & 1/DEL./2017 ARISING OUT OF ITA.NOS.5585 & 5586/DEL./2016 ASSESSMENT YEARS 2008-2009 & 2009-2010 M/S. ACB INDIA LIMITED, C.-102, LGF, NEW MULTAN NAGAR, NEW DELHI. PAN AABCA0043K VS., THE ACIT, CENTRAL CIRCLE-17, ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E-2, JHANDEWALLAN, NEW DELHI. (APPELLANT) (RESPONDENT) ITA.NOS.3221 & 3222/DEL./2016 ASSESSMENT YEARS 2009-2010 & 2010-2011 THE ACIT, CENTRAL CIRCLE-17, ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E-2, JHANDEWALLAN, NEW DELHI. VS., M/S. SHYAM INDUS POWER SOLUTIONS PVT. LTD., 129, TRANSPORT CENTRE, ROHTAK ROAD, PUNJABI BAGH, NEW DELHI. PAN AAICS3625E (APPELLANT) (RESPONDENT) CROSS OBJECTION NOS.247 & 248/DEL./2016 ARISING OUT OF ITA.NOS.3221 & 3222/DEL./2016 ASSESSMENT YEARS 2009-2010 & 2010-2011 M/S. SHYAM INDUS POWER SOLUTIONS PVT. LTD., 129, TRANSPORT CENTRE, ROHTAK ROAD, PUNJABI BAGH, NEW DELHI. PAN AAICS3625E VS., THE ACIT, CENTRAL CIRCLE-17, ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E-2, JHANDEWALLAN, NEW DELHI. (APPELLANT) (RESPONDENT) 3 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ITA.NO.5587/DEL./2016 ASSESSMENT YEAR 2008-2009 THE ACIT, CENTRAL CIRCLE-17, ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E-2, JHANDEWALLAN, NEW DELHI. VS., M/S. GLOBAL COAL AND MINING PVT. LTD., 18, RAO TULA RAM MARG, VASANT ENCLAVE, NEW DELHI. PAN AABCG0215F (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.355/DEL./2016 ARISING OUT OF ITA.NO.5587/DEL./2016 - ASSESSMENT YEAR 2008-2009 M/S. GLOBAL COAL AND MINING PVT. LTD., 18, RAO TULA RAM MARG, VASANT ENCLAVE, NEW DELHI. PAN AABCG0215F VS., THE ACIT, CENTRAL CIRCLE-17, ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E-2, JHANDEWALLAN, NEW DELHI. (APPELLANT) (RESPONDENT) FOR REVENUE : MS. RACHNA SINGH, CIT-D.R. FOR ASSESSEE : SHRI SAJJAN KUMAR TULSIYAN, ADVOCATE MS. NISHA RACHH SHRI KARAN KUMRA, C.A. DATE OF HEARING : 29 & 30.11.2017 DATE OF PRONOUNCEMENT : 17.01.2018 ORDER PER BHAVNESH SAINI, J.M. THIS ORDER SHALL DISPOSE OF ALL THE ABOVE DEPARTM ENTAL APPEALS AND CROSS OBJECTIONS FILED BY ASSESSEE IN A GROUP CASE. 4 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ALL THE MATTERS ARE DECIDED AS UNDER. ITA.NO.6103/DEL./2016 & C.O.NO.15/DEL./2017 A.Y. 2007-2008 : IN THE CASE OF M/S. SPECTRUM COAL & POWER LIMITED, NEW DELHI. 3. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJECT ION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27, NEW DELHI, DATED 09.09.2016 FOR A.Y. 2007-2008. 4. BRIEFLY, THE FACTS OF THE CASE ARE THAT SEARCH, SEIZURE AND SURVEY OPERATIONS UNDER SECTION 132/133A OF THE I.T . ACT WERE CONDUCTED ON 12 TH APRIL, 2012 IN THE CASE OF THE ASSESSEE ALONG WITH OTHER CASES OF ARYAN SAINIK GROUP AT VARIOUS RESIDE NTIAL AND BUSINESS PREMISES. THESE CASES WERE CENTRALISED. TH E FIRST REFERENCE FOR EXCHANGE OF INFORMATION WAS MADE BY INVESTIGATI ON WING ON 28 TH DECEMBER, 2012 AND THE PART INFORMATION WAS RECEIVE D BY THE PR. CIT, CENTRAL-II, NEW DELHI ON 27 TH MAY, 2015 FROM FT & TR CBDT, NEW DELHI. THE A.O. ISSUED NOTICE UNDER SECTION 153 A OF THE I.T. ACT ON 09 TH OCTOBER, 2013 AND THE ASSESSEE IN RESPONSE THERETO FILED 5 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . RETURN DECLARING INCOME AT RS.6,93,41,849 ON 16 TH MAY, 2014. THE ASSESSEE FURNISHED DETAILS, FILED SUBMISSIONS AND P RODUCED THE DOCUMENTS. THE ASSESSEE DECLARED INCOME UNDER THE H EAD INCOME FROM BUSINESS, INCOME FROM HOUSE PROPERTY AND INCO ME FROM OTHER SOURCES. THE A.O. NOTED THAT DURING THE F.Y . UNDER APPEAL THE ASSESSEE-COMPANY HAS RECEIVED SHARE CAPITAL AND SHARE PREMIUM OF RS.3,57,80,000 FROM M/S. SPECTRUM TECHNOLOGIES L TD., (STL) TO FRERE FELIX DE VALOIS STREET, PORT LOUIS, MAURITIUS . TO VERIFY THE GENUINENESS OF THE TRANSACTION AND ALSO TO VERIFY T HE IDENTITY AND CREDITWORTHINESS OF THE PERSON WHO HAS CONTRIBUTED THE AMOUNT OF SHARE CAPITAL AND SHARE PREMIUM, LETTER OF ENQUIRY WAS SENT TO THE ASSESSEE VIDE LETTER DATED 28 TH MARCH, 2016. THE ASSESSEE FILED DETAILED REPLY WHICH IS REPRODUCED IN THE ASSESSMEN T ORDER. THE ASSESSEE FILED SEVERAL DOCUMENTS IN SUPPORT OF THE CONTENTION THAT IT HAS RECEIVED GENUINE SHARE CAPITAL/SHARE PREMIUM. T HE DOCUMENTS WERE DETAILS OF SHARE APPLICATION MONEY WITH CONFIR MATION FROM THE INVESTOR, THEIR INCOME TAX RETURN, PAN, BANK STATEM ENT, FOREIGN INWARD REMITTANCE CERTIFICATE, FC-GPR FORM, SOURCE OF THE 6 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . INVESTMENT, BALANCE SHEET AND P & L A/C OF THE INVE STOR, COPY OF BOARD RESOLUTIONS AND COPY OF ROC RECORDS ETC. THE ISSUE OF SHARES AT PREMIUM IS THE COMMERCIAL DECISION OF THE INVEST OR AS AGREED BETWEEN PARTIES. THE REGULATORY PROVISIONS OF ALLOT MENT OF SHARES AT PREMIUM HAVE BEEN INTRODUCED IN SECTION 56(2)(VIIB) OF I.T. ACT W.E.F. 01.04.2013. MOREOVER, THESE PROVISIONS ARE NOT APPL ICABLE ON ALLOTMENT OF SHARES AT PREMIUM TO NON-RESIDENT. THE A.O. ALSO RECEIVED INFORMATION THROUGH FT & TR DIVISION AND O N PERUSAL OF THE SAME, THE A.O. NOTED THAT THE INVESTOR COMPANY HAS SHOWN INCOME OF 3 US $. THE A.O. RELYING UPON CERTAIN DECISIONS, MADE ADDITION OF RS.3,57,80,000 UNDER SECTION 68 OF THE I.T. ACT CON SIDERING IT TO BE UNEXPLAINED CASH CREDIT. THE ASSESSMENT WAS COMPLET ED UNDER SECTION 143(3) R.W.S. 153A OF THE I.T. ACT ON 30 TH MARCH, 2016. 5. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(A). THE ASSESSEE ALSO CHALLENGED THE ASSESSMENT ORDER U NDER SECTION 153A BECAUSE NO INCRIMINATING MATERIAL OR DOCUMENTS WAS FOUND DURING THE COURSE OF SEARCH. THEREFORE, THE ADDITIO N MADE SO AND ASSESSMENT FRAMED IS ILLEGAL AND BAD IN LAW. THE AS SESSEE ALSO RELIED 7 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . UPON THE DECISION OF THE HONBLE DELHI HIGH COURT I N THE CASE OF CIT VS. KABUL CHAWLA 380 ITR 573 (DEL.) AND OTHERS. IT WAS ALSO SUBMITTED THAT ASSESSEE HAD FILED RETURN OF INCOME ON 31 ST OCTOBER, 2007 FOR ASSESSMENT YEAR UNDER APPEAL DECLARING TOT AL INCOME OF RS.7.24 CRORES. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSESSEE. THE INFO RMATION WAS CALLED FOR THE ASSESSMENT YEAR FROM THE ASSESSEE AND ASSES SMENT WAS COMPLETED VIDE ORDER UNDER SECTION 143(3) DATED 14. 12.2009 WHEREIN THE A.O. MADE SMALL ADDITIONS ON ACCOUNT OF DONATIO N, DISALLOWANCE OF REPAIR AND MAINTENANCE OF ROAD AND DISALLOWANCE OF DEPRECIATION ON PLANT AND MACHINERY WITH DISALLOWANCE OF LATE DE POSIT OF EMPLOYEES SHARE TO P.F. AND AFTER GIVING THE DEDUCT ION ON ACCOUNT OF DEPRECIATION AND DEDUCTION UNDER SECTION 80G, INCOM E OF ASSESSEE HAS BEEN COMPUTED AT RS.7.63 CRORES. THE ORIGINAL A SSESSMENT ORDER WAS SUBJECT TO APPEALS BEFORE APPELLATE AUTHORITIES . THEREAFTER, SEARCH ACTION WAS UNDERTAKEN ON ASSESSEE COMPANY ON 12 TH APRIL, 2012 AFTER COMPLETION OF THE ASSESSMENT UNDER SECTI ON 143(3) AS NOTED ABOVE. IT WAS, THEREFORE, SUBMITTED THAT THE ASSESSMENT ORDER 8 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . FRAMED BY A.O. UNDER SECTION 153A IS ILLEGAL, INVAL ID AND BAD IN LAW BECAUSE ADDITION MADE BY THE A.O. DID NOT HAVE ANY CONNECTION OR LINKAGE WITH ANY INCRIMINATING DOCUMENTS OR EVIDENC E FOUND AS A RESULT OF SEARCH PROCEEDINGS. IT WAS SUBMITTED THAT ADDITIONS UNDER SECTION 153A COULD BE MADE ONLY ON RECOVERY OF INCR IMINATING MATERIAL DURING THE COURSE OF SEARCH. NOTHING IS PR ODUCED ON RECORD TO JUSTIFY THE ADDITIONS. THE DETAILED WRITTEN SUBM ISSIONS OF THE ASSESSEE ARE REPRODUCED IN THE APPELLATE ORDER. ASS ESSEE RELIED UPON DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) AND OTHERS. 6. THE LD. CIT(A) AS REGARDS THE LEGAL ISSUE THAT NO INCRIMINATING MATERIAL OR EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH NOTED THAT THE ORIGINAL ASSESSMENT PROCEEDIN GS UNDER SECTION 143(3) WAS COMPLETED ON 14.12.2009 PRIOR TO THE DAT E OF THE SEARCH. THE LD. CIT(A) NOTED THAT IT IS A CASE OF THE ASSES SEE THAT THE ASSESSMENT ORDER UNDER SECTION 153A IS NOT BASED ON ANY INCRIMINATING MATERIAL OR EVIDENCE AND ADDITIONS HA VE BEEN MADE MERELY ON THE BASIS OF ENTRIES RECORDED IN THE BOOK S OF ACCOUNT. NO 9 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . NEW EVIDENCE HAS BEEN BROUGHT ON RECORD BY A.O. TO CALL FOR REOPENING OF ASSESSMENT. THE LD. CIT(A) HOWEVER, NOTED THAT T HE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWL A (SUPRA) HAS NOT YET BEEN CONFIRMED BY THE APEX COURT, THEREFORE, TH E CONTENTION OF THE ASSESSEE WAS REJECTED. 7. AS REGARDS THE ADDITION ON MERIT UNDER SECTION 68 OF THE I.T. ACT, AMENDMENT WAS INSERTED INTO IN SECTION 56 (2)(VIIB) OF ACT BY FINANCE ACT 2012 W.E.F. 01.04.2013. THEREFORE, THE ISSUE OF SHARE PREMIUM COULD NOT BE TAKEN-UP IN THE PRESENT PROCEE DINGS. IT WAS SUBMITTED THAT IN ASSESSMENT YEAR UNDER APPEAL ASSE SSEE HAD ISSUED ITS 40 LAKHS SHARES @ RS.25/- PER SHARE ON 2 ND AUGUST, 2016 TO VARIOUS INVESTORS AND EXISTING SHARE HOLDERS AS FOL LOWS : NAME OF THE SHAREHOLDER NO. OF SHARES 1. SPECTRUM TECHNOLOGIES LTD., 14,31,200 2. DR. A.V. MOHAN RAO 536 3. DYNAMIC GENERATION PVT. LTD., 9,86,264 4. SARVESH COALTECH PVT. LTD., 16,00,000 TOTAL : 40,00,000 7.1. THE ASSESSEE RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS PVT. LTD., 216 10 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . CTR 195. IT WAS SUBMITTED THAT THE PROVISO TO SECTI ON 68 WAS INSERTED INTO THE ACT W.E.F. 01.04.2013. THE ASSESSEE ALSO R ELIED UPON SEVERAL DECISIONS IN SUPPORT OF THE CONTENTION THAT SINCE N O INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH THAT ASSESSEE RECEIVED BOGUS SHARE CAPITA/PREMIUM, THEREFORE, THE ADDITION IS WHOLLY UNJUSTIFIED. IT WAS ALSO SUBMITTED THAT ON S IMILAR PATTERN, ASSESSEE ISSUED SHARES TO OTHER PARTIES WHICH HAVE NOT BEEN DOUBTED. THE ASSESSEE ALSO EXPLAINED THAT ASSESSEE WAS INCOR PORATED ON 1 ST JANUARY, 1996 AND THE TURNOVER AND NET PROFIT OF TH E ASSESSEE HAS BEEN SUBSTANTIAL, FROM ITS YEAR OF INCORPORATION TI LL A.Y. 2014-2015 DETAILS OF WHICH ARE NOTED AT PAGE-28 OF THE APPELL ATE ORDER. ASSESSEE ALSO EXPLAINED THAT IT IS ENGAGED IN BUSINESS OF CO AL BENEFICATIONS AND SETTING-UP THERMAL POWER GENERATION PLANTS AND IT HAS SET-UP TWO COAL BENEFICATION PLANTS IN THE STATE OF CHATTI SGARH AND ORISSA. THE PROMOTERS HAVE VAST EXPERIENCE IN THIS LINE AND ASSESSEE COMPANY HAVE BEEN GRANTED VARIOUS CREDIT FACILITIES AND MANY INVESTORS MADE INVESTMENT IN ASSESSEE COMPANY. THE DETAILS OF LOANS AND BANK GUARANTEES ARE NOTED AT PAGE-29 OF ORDER. M/S. STL 11 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . INVESTOR HAS ALSO MADE INVESTMENT IN EARLIER YEARS CONSIDERING THE WORTH OF THE ASSESSEE-COMPANY FOLLOWING RBI AND FEM A RULES. IN EARLIER YEAR, THE SAME SHARE CAPITAL/PREMIUM HAVE B EEN ACCEPTED BY THE REVENUE DEPARTMENT FROM M/S.STL. THE ASSESSEE R ECEIVED THE AMOUNT IN QUESTION THROUGH BANKING CHANNEL WHICH HA VE BEEN SUPPORTED BY THE BANK STATEMENT OF THE INVESTOR, BA LANCE SHEET AND FOREIGN INWARD REMITTANCE CERTIFICATE. WITH A VIEW TO VERIFY THE CREDENTIALS OF M/S. STL, REFERENCE WAS SENT TO MAUR ITIUS REVENUE AUTHORITIES AND THEY HAVE FILED THEIR REPLY WHICH H AVE CORROBORATED THE CONTENTION OF THE ASSESSEE THAT IT HAS RECEIVED GENUINE SHARE CAPITAL/PREMIUM. THE INVESTOR HAVE MADE INVESTMENTS IN EARLIER YEARS WAS ALSO CONFIRMED WHICH WOULD SHOW THAT M/S. STL WAS IN EXISTENCE IN MAURITIUS, WAS A REGISTERED COMPANY AN D MADE INVESTMENT IN ASSESSEE COMPANY THROUGH BANKING CHAN NEL HAVING THE WORTH AND RESOURCES. THE ASSESSEE ALSO RELIED U PON SEVERAL DECISIONS OF DIFFERENT HIGH COURTS IN SUPPORT OF TH E CONTENTION AND IT HAS RECEIVED GENUINE SHARE CAPITAL/PREMIUM. THE DET AILED SUBMISSIONS OF THE ASSESSEE IS REPRODUCED IN THE IM PUGNED ORDER AND 12 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THE SUMMARY OF THE SAME IS REPRODUCED AT PAGE 79 OF THE IMPUGNED ORDER WHICH READS AS UNDER : SUMMARY : FROM A PERUSAL OF AFORESAID JUDICIAL PRONOUNCEMENTS AND FACTS OF THE APPELLANTS CASE, IT IS EVIDENT THAT THE SHARE CAPITAL AND PREM IUM WAS ALREADY ASSESSED IN THE ORIGINAL ASSESSMENT COMPLETED U/S 143(3) OF THE ACT. DURING THE COURSE OF SEARCH CONDUCTED ON 12.04.2012 NO INCRIMINATING MATERIAL WAS FOUND THAT WOULD SUGGEST THAT THE SHARE CAPITAL OR THE SHARE PREMIUM WAS BOGUS OR THE INVESTORS WERE NOT GENUINE. THE APPELLANT HAD DISCHARGED ITS ONUS OF ESTABLISHI NG THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS AND HAD ESTABLISH ED THE GENUINENESS OF THE TRANSACTION. THE INVESTORS WERE NOT ACCOMMODATION ENTRY PROVIDER S BUT WERE WORLD RENOWNED PRIVATE EQUITY INVESTORS AND VERY HIGH TAX PAYING E NTITY. THE ENTIRE AMOUNT RECEIVED FROM M/S STL HAD COME AS FDI THROUGH THE RESERVE BANK OF INDIA. M/S STL INVESTED AT REGULAR INTERVALS FROM 1999 TIL L 2008. THE APPELLANT ALSO REMITTED DIVIDEND OF CRORES OF RUPEES. THE INQUIRY CONDUCTED BY THE INVESTIGATION WING, TH E AO AND THE FT & TR DIVISION FULLY SUPPORTED THE IDENTITY AND CREDITWORTHINESS O F THE INVESTORS AND GENUINENESS OF THE TRANS ACTIONS. THE AO COULD NOT LOOK AT THE SOURCE OF AS WELL AS T HE REASONABILITY OF SHARE PREMIUM AS THE AMENDMENTS TO SECTION 68 AND SECTION 56(2) (VIIB) CAME INTO EFFECT FROM ASST YEAR 2013-14. SHARES WERE ISSUED AT THE SAME PRICE TO M/S STL AS WELL AS TO OTHER EXISTING SHAREHOLDERS, AND THE DETERMINATION OF ISSUE PRICE WAS SUPPORTED BY A VALUATION REPORT OBTAINED FROM AN INDEPENDENT FIRM OF CHARTER ED ACCOUNTANTS. THE A.O. HAD ACTED MERELY ON THE BASIS OF SUSPICION , CONJECTURE AND SURMISES. THEREFORE, THE ADDITION OF RS.3,57,80,000/- IN A.Y. 2007-08 SHOULD KINDLY BE DELETED. 8. THE LD. CIT(A) CONSIDERING THE MATERIAL ON RECO RD IN THE LIGHT OF SUBMISSIONS OF BOTH THE PARTIES, DELETED T HE ENTIRE ADDITION 13 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . AND HIS FINDINGS IN PARA 8.4 OF THE IMPUGNED ORDER AT PAGES 80 TO 113 ARE REPRODUCED AS UNDER : 8.4. FINDING : I HAVE CONSIDERED THE WRITTEN SUBMISSIONS OF THE AP PELLANT, ASSESSMENT RECORDS, CASE LAWS AND HAVE GONE THROUGH THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153A OF T HE ACT. I HAVE ALSO CONSIDERED THE ARGUMENTS OF THE ARS. IN THE RELEVANT YEAR, THE APPELLANT HAD ALLOTTED 40 ,00,000 EQUITY SHARES ON 02.08.2006 HAVING FACE VALUE OF RS .I01- EACH AT A PREMIUM OF RS. 15/- TO THE FOLLOWING INVESTORS. S. NAME OF THE SHAREHOLDER NO. OF SHARES ISSUED NO. 1 SPECTRUM TECHNOLOGIES LTD. 14,31,200 2 DR. A V MOHAN RAO 536 3 DYNAMIC GENERATION PVT. LTD. 968,264 4 SARVESH COAL TECH PVT. LTD. 16,00,000 TOTAL 40,00,000 IN THE OPINION OF THE AO THE APPELLANT HAD FAILED T O ESTABLISH THE GENUINENESS OF THE MONEY RECEIVED AS SHARE CAPITAL AND SHARE PREMIUM AMOUNTING TO RS.3,57,80,000/- FROM M/S SPEC TRUM TECHNOLOGIES LIMITED ('STL') AND HAD FAILED TO ESTA BLISH CREDITWORTHINESS OF MI S STL. THE VARIOUS CONTENTIO NS OF THE AO AND VARIOUS REASONS ON ACCOUNT OF WHICH THE ADDITIO N OF RS. 3,57,80,000/-WAS MADE U/S 68 OF THE I.T ACT HAVE BE EN ELABORATED IN PARA 5.3.3 ABOVE. AT THE OUTSET, IT IS NOTEWORTHY THAT ON 02.08.2006, THE APPELLANT HAD ISSUED EQUITY SHARES AT A PREMIUM OF RS. 15 PER SHARE TO VARIOUS INVESTORS INCLUDING EXISTING SHAREHOLDERS O F THE APPELLANT 14 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . COMPANY. THESE SHARES WERE ISSUED TO EACH INVESTOR AT THE SAME PRICE, AND UNDER THE SAME TERMS AND CONDITIONS. MOS T OF THE INVESTORS, INCLUDING M/S STL WERE EXISTING SHAREHOL DERS OF THE APPELLANT COMPANY. THE AR'S PRIMA FACIE CONTENTION IS THAT SHARES WERE ISSUED AT THE SAME SHARE PREMIUM TO EACH OF THE INVESTORS MENTION ED AT SERIAL NUMBER 1 TO 4 IN THE ABOVE TABLE. THE AR ARGUED THA T THE AO HAS NOT OBJECTED TO THE ISSUANCE OF SHARE CAPITAL AND S HARE PREMIUM TO ANY OTHER INVESTOR, EVEN THOUGH IT WAS ISSUED AT THE SAME PRICE AND ON THE SAME DATE. IN LIGHT OF THE ABOVE, THERE IS NO REASON TO DOUBT THE ISSUANCE OF SHARES AT A PREMIUM TO M/S ST L OR TO QUESTION THE AMOUNT OF PREMIUM CHARGED FROM M/S STL . THE ABOVE CONTENTION OF THE AR HAS BEEN EVALUATED A ND FOUND TO BE CORRECT. SHARES WERE ISSUED AT THE SAME PRICE TO 4 INVESTORS ON 02.08.2006. IN THE ASSESSMENT ORDER, THE AO HAS QUESTIONED THE CREDIT WORTHINESS, GENUINENESS OF SHARE CAPITAL AND PREMIUM CHARGED ONLY FROM M/S STL. HOWEVER, THE AO HAS NOT DISTINGUISHED HOW THE ISSUANCE OF SHARES TO M/S STL WAS ANY DIFFERENT FROM ISSUANCE OF SHARES TO ANY OF THE OTH ER INVESTORS. THE ASSESSMENT RECORDS WERE CALLED FOR AND THE SUBM ISSIONS MADE BY THE APPELLANT WERE PERUSED. IT HAD BEEN SUB MITTED VIDE VARIOUS SUBMISSIONS THAT THE APPELLANT HAD ISSUED 4 0,00,000 SHARES TO 4 INVESTORS INCLUDING M/S STL. THE ISSUAN CE OF THESE SHARES TO EACH OF THE 4 INVESTORS AT THE SAME PRICE I.E. RS. 25 PER SHARE IS ALSO REFLECTED IN FORM 2 RETURN OF ALLOTME NT SUBMITTED BEFORE THIS OFFICE. IT IS ALSO NOTED THAT EACH OF T HESE 4 INVESTORS WERE EXISTING SHAREHOLDERS OF THE APPELLANT COMPANY , TO WHOM SHARES HAD BEEN ALLOTTED IN THE PAST. BASED ON PERUSAL OF THE ABOVE FACTS AND EVIDENCE SU BMITTED BY THE APPELLANT, IT IS EVIDENT THAT SHARES WERE ISSUE D BY THE APPELLANT TO 4 INVESTORS INCLUDING M/S STL AT THE S AME PRICE. 15 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . SINCE THE AO HAS NOT RAISED ANY OBJECTION ON THE PR ICE AT WHICH SHARES WERE ALLOTTED TO ANY OTHER INVESTOR, AND NOT BROUGHT ANY EVIDENCE ON RECORD TO DISTINGUISH THE ALLOTMENT OF SHARES TO M/S STL FROM ANY OTHER INVESTOR, THE PREMIUM CHARGED FR OM M/S STL CANNOT BE QUESTIONED. THUS, THE APPELLANT'S PRIMA F ACIE CONTENTION IS ACCEPTED. ADDITIONALLY, IT IS OF SIGNIFICANCE TO RECOUNT THAT THE APPELLANT HAD BEEN INCORPORATED ON 01.01.1996. DURING AY 2007-08, THE APPELLANT COMPANY WAS CONSTRUCTING 11 MTPA COAL WAS HERY ON BOO BASIS FOR APGENCO, NEARED COMPLETION OF 7.5 MTP A WASHERY FOR WHICH COMMERCIAL PRODUCTION WAS TO BE C OMMENCED SOON. THE APPELLANT COMPANY ALSO PLANNED TO SET UP A 2X25 MW THERMAL POWER PLANT ADJACENT TO ITS WASHERY AT KORB A, FOR WHICH IT HAD ALREADY PROCURED THE LAND AND THE NECESSARY AGREEMENTS/ PERMISSIONS FOR SETTING UP OF THE POWER PLANT. THE EXISTING WASHERY WAS DESIGNED USING STATE OF THE ART TECHNOL OGY AND DURING THE YEAR, WAS RUNNING 6TH YEAR OF FULL SCALE OPERATIONS, AND DID NOT NEED ANY NEW TECHNOLOGY ABSORPTION. FURTHER, IT IS SEEN THAT THE PROMOTERS, VARIOUS INV ESTORS OF REPUTE HAD STARTED INVESTING IN THE APPELLANT COMPANY EVEN PRIOR TO THE YEAR UNDER APPEAL. SOME OF THE INVESTMENT HAD COME FROM FOREIGN INVESTORS. PURSUANT TO THE POLICY OF THE GO VERNMENT OF INDIA, THE SAID INVESTMENT HAD COME AS FOREIGN DIRE CT INVESTMENT (FDI) IN THE COAL SECTOR. SUCH INVESTMENT HAD BEEN ROUTED THROUGH THE RESERVE BANK OF INDIA AND WAS REQUIRED TO BE COMPLIANT WITH RULES, REGULATIONS AND COMPLIANCES A S REQUIRED UNDER FDI, FEMA, RBI ETC. IT IS NOTEWORTHY TO MENTION THAT UNDER THE AFORESAI D ROUTE / MODUS- OPERANDI M/S STL, A GROUP CONCERN OF WORLD R ENOWNED AKULA ENERGY VENTURES, LLC ('AKULA ENERGY') HAD INV ESTED A SUM OF RS. 1,78,97,570 IN THE APPELLANT COMPANY ON 23.0 6.1999 AND A SUM OF RS. 9,26,430 ON 18.08.1999 IN AY 2000-01 A T PAR, A 16 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . SUM OF RS. 4,11,64,000 ON 20.12.2003 IN AY 2004-05 AT PAR, A SUM OF RS. 1,27,73,410 ON 21.03.2005 IN AY 2005-06 AT PAR, A SUM OF RS.2,33,67,722 ON 21.03.2005 AT A PREMIUM OF RS. 4 PER SHARE IN AY 2005-06, AND A SUM OF RS. 3,57,80,000 O N 02.08.2006 IN AY 2007-08 BY ISSUING 14,31,200 EQUIT Y SHARES HAVING FACE VALUE OF RS.10 EACH AT A PREMIUM OF RS. 4 PER SHARE. THE APPELLANT HAD SUBMITTED REQUISITE DOCUMENTATION AND DETAILS WITH RBI IN THIS REGARD. BASED ON SUBMISSIONS MADE BY THE APPELLANT, IT IS A LSO EVIDENT THAT THE ISSUANCE OF SHARES TO MULTIPLE INVESTORS O N 21.03.2005 AND ON 02.08.2006 INCLUDING M/S STL WAS UNDERTAKEN AT THE SAME PRICE AT WHICH SHARES WERE ISSUED TO OTHER INV ESTORS. THUS, THE APPELLANT HAS NEVER DISTINGUISHED THE PRICE AT WHICH SHARES ARE ISSUED TO M/S STL FROM ANY OTHER INVESTOR. IT WOULD ALSO LIKE TO MENTION THAT THE FACT OF THES E AMOUNTS HAVING BEEN RECEIVED AS SHARE CAPITAL AND SHARE PREMIUM FR OM M/S STL WERE DULY DISCLOSED BY THE APPELLANT IN ITS BALANCE SHEETS AND ITRS RELATED TO AY 2000-01, 2004-05, 2005-06 AND 20 07-08. THE ASSESSMENTS FOR AY 2000-01, 2004- 05, 2005-06 AND 2 007-08 WERE COMPLETED U/S 143(3) OF THE I.T ACT VIDE ASSES SMENT ORDERS DATED 25.08.2009, 27.12.2006,28.12.2007 AND 14.12.2 000 RESPECTIVELY. AS IS APPARENT FROM THE SAID ASSESSME NT ORDERS THE MATTER OF ISSUE OF SHARE CAPITAL AND SHARE PREMIUM WAS DULY EXAMINED BY THE AO AND NO ADDITIONS WERE MADE ON AC COUNT OF SHARE CAPITAL OR SHARE PREMIUM U/S 68 OF THE I. T. ACT. THE SEARCH AND SEIZURE OPERATION WAS CONDUCTED UPON THE APPELLANT ON 12.04.2012. I HAVE REQUISITIONED AND E XAMINED ALL THE RECORDS INCLUDING THE ASSESSMENT RECORDS. IT IS SEEN THAT DURING THE COURSE OF SAID SEARCH, NO INCRIMINATING MATERIAL WAS FOUND THAT WOULD SUGGEST THAT THE AMOUNT RECEIVED A S SHARE CAPITAL OR AS SHARE PREMIUM WAS BOGUS, WAS APPELLAN T'S 17 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . UNACCOUNTED MONEY OR WAS LIABLE TO BE TAXED AS UNEX PLAINED CASH CREDIT U/S 68 OF THE I. T. ACT. AS A MATTER OF FACT, THE AO HAS ALSO NOWHERE CLAIME D THAT HE HAD FOUND ANY INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH THAT WOULD WARRANT MAKING THE SAID ADDITION. INSTEAD, TH E AO HAS TRIED TO JUSTIFY THE ADDITION OF RS. 3,57,80,000/- ON THE BASIS OF INFORMATION GATHERED DURING THE COURSE OF POST SEAR CH ENQUIRIES. IT IS ALSO SEEN FROM THE RECORDS THAT DURING THE CO URSE OF POST SEARCH INVESTIGATION/ ENQUIRIES, THE APPELLANT WAS CALLED UPON TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE ENTITIES THAT HAD SUBSCRIBED TO THE SHARE CAPITAL AND SHARE PREMI UM AND TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS. THE APPELLANT HAD FURNISHED SUFFICIENT DOCUMENTARY EVIDENCE TO SUBSTA NTIATE THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS. THE INVESTIGATION WING HAD IN THE CASE OF M/S STL R EFERRED THE MATTER TO THE FT & TR DIVISION FOR OBTAINING NECESS ARY INFORMATION ABOUT M/S SPECTRUM TECHNOLOGIES LIMITED FROM THE MAURITIUS REVENUE AUTHORITY (MRA). FROM EXAMINING THE SUBMISSIONS MADE BY THE APPELLAN T BEFORE THE INVESTIGATION WING AND THE AO, IT IS EVIDENT TH AT THE APPELLANT HAD FURNISHED THE FOLLOWING INFORMATION/ DOCUMENTS DURING THE INVESTIGATION AND ASSESSMENT PROCEEDINGS: - (I) NAME OF THE PARTY (II) ADDRESS OF THE PARTY (III) DETAILS OF SHARE APPLICATION MONEY RECEIVED ALONG W ITH CONFIRMATION FROM THE PARTY. (IV) MODE OF RECEIPT OF MONEY WITH DATE OF RECEIPT (V) EVIDENCE IN SHAPE OF ITR, CONSTITUTION OF COMPANY & CONFIRMATION LETTER REGARDING THE GENUINENESS OF THE INVESTORS W HEREFROM RECEIPT IS SHOWN. (VI) PAN PARTICULARS OF THE INVESTEE COMPANY 18 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . (VII) COPY OF BANK STATEMENT SHOWING RELEVANT TRANSACTION S (VIII) COPY OF FOREIGN INWARD REMITTANCE CERTIFICATE (IX) SOURCE 'FROM WHERE THE INVESTMENT AMOUNT HAD ORIGIN ATED (X) COPY OF BALANCE SHEETS AND PROFIT & LOSS ACCOUNTS F OR RELEVANT PERIODS (XI) COPY OF INCOME TAX RETURNS AND PAN DETAILS WHEREVER REQUIRED (XII) COPIES OF BOARD RESOLUTIONS (XIII) COPIES OF ROC'S RECORDS BESIDES THE ABOVE DETAILS, DOCUMENTS AND EVIDENCES, THE APPELLANT HAD FURNISHED VERY LUCID EXPLANATIONS THROUGH THE V ARIOUS SUBMISSIONS OF ITS ARS THAT HAD FULLY EXPLAINED THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS AND ESTABLISHED T HE GENUINENESS OF THE TRANSACTIONS. THE AO HOWEVER REJECTED THE ENTIRE EVIDENCE AND MAD E THE ADDITION BY CITING FOLLOWING REASONS:- (I) THE APPELLANT HAD FAILED TO ESTABLISH THE GENUINENE SS OF THE MONEY RECEIVED AS SHARE CAPITAL OR SHARE PREMIUM AN D HAS FAILED TO ESTABLISH CREDITWORTHINESS OF M / S STL. (II) INFORMATION RECEIVED THROUGH THE FT & TR DIVISION S HOWED THAT M/S STL HAD INCOME OF ONLY USD 3 IN FY 2006-07. (III) M/S. STL DID NOT HAVE THE BUSINESS INCOME AS WELL A S THE RESOURCES TO CONTRIBUTE SUCH HUGE SHARE CAPITAL/ SH ARE PREMIUM AMOUNTING TO RS.3.57 CRORES IN APPELLANT CO MPANY. (IV) THE APPELLANT HAD NOT BEEN ABLE TO EXPLAIN AS TO HO W ITS SHARES, BEING UNLISTED COMMANDED SUCH A HUGE SHARE' PREMIUM OF RS. 15/ - FROM M/S STL, THE MAURITIUS BA SED COMPANY. 19 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . (V) THE PREMIUM WAS CHARGED WITHOUT ANY BASIS AND WAS D ONE ONLY ON THE WHIMS AND FANCIES OF THE MANAGEMENT. (VI) THE PERFORMANCE OF THE APPELLANT COMPANY IN LAST FE W FYS WAS FAR FROM REWARDING AND DID NOT COMMAND SUCH HUG E PREMIUM. THE EPS OF THE APPELLANT COMPANY FOR FYS 2 005-06, 2006-07 AND 2007-08 WERE RS.1.84, RS.1.03 AND RS.3. 58 RESPECTIVELY. (VII) THERE WAS NO OTHER 'PERFORMANCE INDICATOR' OF THE A PPELLANT COMPANY WHICH WOULD WARRANT SUCH A HUGE SHARE PREMI UM. (VIII) THE CASE OF HUGE PREMIUM CHARGED BY THE. APPELLANT ON ALLOTMENT OF SHARE IS ALSO HIT BY THE PROVISION OF SECTION 56(1) OF I.T. ACT. IN SUPPORT OF HIS ACTION OF MAKING OF ADDITION OF R S.3,57,80,000 IN AY 2007-08, THE AO ALSO RELIED UPON VARIOUS CASE LA WS AND PREPOSITIONS IN PARA 5.10.1 TO 5.10.13 AND IN PARA 5.11 OF THE SAID ASSESSMENT ORDER. THE AO HAS ALSO PUT FORTH AN ARGU MENT THAT THE HUGE PREMIUM CHARGED BY THE APPELLANT WAS ALSO HIT BY THE PROVISION OF SECTION 56(1) OF THE ACT. I HAVE PERUSED ALL THE RECORDS INCLUDING THE ASSESS MENT RECORDS, THE DETAILED WRITTEN SUBMISSIONS FILED BY THE LD. ARS A ND HAVE HEARD THE VARIOUS ARGUMENTS PUT FORTH BY THE LD. ARS DURI NG THE COURSE OF APPELLANT PROCEEDINGS. THE OBJECTIONS OF THE AO CAN BROADLY BE CLUBBED INT O;- (I) QUESTIONING THE CREDENTIALS OF THE APPELLANT CO MPANY (II) QUESTIONING THE REASONABILITY OF THE AMOUNT OF SHARE PREMIUM CHARGED BY THE APPELLANT COMPANY 20 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . (III) QUESTIONING THE CREDITWORTHINESS OF M/ S STL, MAURITIUS AND GENUINENESS OF THE TRANSACTIONS; AND (IV) JUDICIAL PRONOUNCEMENTS SUPPORTING AO'S CONTEN TION OF MAKING ADDITION U/S 56 R.W.S. 68 OF THE I.T. ACT. THE ABOVE OBJECTIONS OF THE AO ARE DEALT WITH AS UN DER:- (I) QUESTIONING THE CREDENTIALS OF THE APPELLANT CO MPANY TO BEGIN WITH, IT APPEARS THAT THE AO HAS DOUBTED T HE CREDENTIALS OF THE APPELLANT COMPANY. IN HIS OPINION THE APPELLANT COMPANY COULD NOT ATTRACT SUCH AMOUNTS AS SHARE CAPITAL AND SHARE PREMIUM. THE ARS HAVE FILED THE FOLLOWING TABLE SHOWING TURNOVER , NET PROFIT, NET WORTH AND DIVIDEND PAID BY THE APPELLANT COMPANY S INCE INCORPORATION TILL AY 2014-15. A.Y. TURNOVER (RS.) NET PROFIT (RS.) NET WORTH (RS. ) DIVIDEND (RS.) 1997-98 - - - - 1998-99 - - 20,94,06,849 - 1999-00 - - 20,94,06,849 - 2000-01 5,39,17,580 19,48,314 15,36,52,073 - 2001-02 24,78,73,032 3,96,63,202 17,12,75,723 1,60, 54,575 2002-03 42,04,95,583 3,72,19,789 21,13,59,014 1,48, 69,900 2003-04 46,53,44,550 10,89,55,453 19,91,30,223 8,04 ,95,198 2004-05 29,99,83,785 1:87,90,993 23,41,76,642 - 2005-06 32,91,80,084 1,46,83,543 33,92,00,365 - 2006-07 54,32,45,881 3,31,77,001 43,34,87,614 1,00 ,00,000 2007-08 50,23,01,112 4,85,42,930 59,63,29,176 - 2008-09 1,08,76,11,935 31,78,70,267 1,34,12,45,848 - 2009-10 2,37,89,13,512 82,30,15,160 1,82,74,42,872 - 2010-11 2,32,52,98,483 75,75,40,690 2,34,31,03,40 4 - 2011-12 2,93,32,85,694 98,30,10,862 2,97,01,24,02 4 - 2012-13 3,85,23,93,059 1,61,39,37,156 3,91,45,14, 847 11,66,98,649 2013-14 3,03,12,99,897 92,34,81,066 4,39,63,30,55 9 11,66,98,649 2014-15 2,47,56,25,037 19,09,22,404 4,48,64,68,34 9 11,66,98,649 21 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THE APPELLANT WAS CONSTRUCTING AN 11 MTPA COAL WASH ERY ON BOO BASIS FOR APGENCO, AND NEARED COMPLETION OF 7.5 MTPA WASHERY FOR WHICH COMMERCIAL PRODUCTION WAS TO BE COMMENCED SOON. THE APPELLANT COMPANY ALSO PLANNED TO SET UP A 2X25 MW THERMAL POWER PLANT ADJACENT TO ITS WASHERY AT KORB A, FOR WHICH IT HAD ALREADY PROCURED THE LAND AND THE NECESSARY AGREEMENTS/PERMISSIONS FOR SETTING UP OF THE POWER PLANT. THE EXISTING WASHERY WAS DESIGNED USING STATE OF THE AR T TECHNOLOGY AND DURING THE YEAR, WAS RUNNING 6TH YEAR OF FULL S CALE OPERATIONS, AND DID NOT NEED ANY NEW TECHNOLOGY ABS ORPTION. THE APPELLANT IS ENGAGED IN THE BUSINESS OF COAL BE NEFICIATIONS AND SETTING UP OF THERMAL POWER GENERATION' PLANTS. ' THE APPELLANT COMPANY SET UP TWO COAL BENEFICIATION PLA NTS AT:- - RATIJA ( IN THE STATE OF CHHATTISGARH} AND - KALINGA (IN THE STATE OF ORISSA) THE RATIJA PLANT WAS COMMISSIONED IN DECEMBER 1999 WITH A CAPACITY OF 2.50 MILLION TONS PER ANNUM. THE CAPACI TY WAS EXPANDED TO 5.00 MILLION TONS PER ANNUM IN 2003, 8. 00 MILLION TONS PER ANNUM IN 2008 AND 10.00 MILLION TONS PER A NNUM OF RAW COAL IN 2009. THE MAIN CUSTOMERS ARE GUJARAT STATE ELECTRICITY CORPORATION LIMITED, RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LIMITED AND RELIANCE NATURAL RESOURCES LIMITED. THE KALINGA PLANT IS LOCATED AT TALCHER, DISTRICT A NGUL IN THE STATE OF ORISSA. KALINGA PLANT WAS COMMISSIONED IN 2008. THE INITIAL INSTALLED CAPACITY OF KALINGA PLANT WAS 6.53 MILLIO N TONS PER ANNUM OF RAW COAL WHICH HAS BEEN EXPANDED TO 9.52 M ILLION TONNES PER ANNUM OF RAW COAL IN OCTOBER 2012. THE APPELLANT IS SEEN TO HAVE A PROVEN TRACK-RECORD . THE PROMOTERS HAD OVER 30 YEARS OF SUCCESSFUL ENTREPREN EURSHIP. THE APPELLANT HAD BEEN GRANTED CREDIT-RATING OF 'A+' BY CREDIT-RATING 22 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . AGENCIES LIKE CRISIL RATINGS, INDIA RATING AND RESE ARCH- FITCH GROUP ETC. THE APPELLANT HAD BEEN GRANTED VAR IOUS CREDIT FACILITIES LIKE TERM LOANS, WORKING CAPITAL LOANS, GUARANTEE LIMITS ETC. FROM A CONSORTIUM OF VARIOUS PUBLIC SECTOR AND PRIVATE SECTOR BANKS AND OTHER FINANCIAL INSTITUTIONS AS UNDER: - F.Y. TOTAL LOANS (RS.) BANK GUARANTEES (RS.) TOTAL EXPOSURE TO BANKS (RS.) 2006-07 95,45,67,095 27,88,00,000 1,23,33,67,095 2007-08 L ,03,16,66,330 40,00,00,000 1,43,16,66,330 2008-09 80,09,60,413 40,00,00,000 1,20,09,60,413 2009-10 1,42,94,19,443 40,00,00,000 1,82,94,19,443 2010-11 3,85,89,75,778 35,00,00,000 4,20,89,75,778 THE AO SHOULD HAVE SEEN THAT FROM AY 2000-01 (WHEN M/S, STL HAD FIRST INVESTED) TILL AY 2014-15, THE TURNOVER O F THE APPELLANT 'COMPANY HAD INCREASED BY 3591%, THE NET PROFIT HAD INCREASED BY 880%, THE NET WORTH HAD INCREASED BY 1920%. IT IS SEEN THAT EVEN THE BANKS HAD EXTENDED LOAN FA CILITIES OF OVER RS. 420 CRORES TO THE APPELLANT COMPANY. A PERUSAL OF ABOVE FACTS AND STATISTICS LEAVES NO DOUBT ABOUT THE CRED ENTIALS OF THE APPELLANT COMPANY. (II) QUESTIONING THE REASONABILITY OF AMOUNT OF SHA RE PREMIUM CHARGED BY THE APPELLANT COMPANY THEREAFTER, THE AO QUESTIONED THE SHARE PREMIUM CHA RGED BY THE APPELLANT COMPANY. THE AO HAD OBSERVED THAT THE APP ELLANT HAD NOT SUBMITTED ANY DOCUMENTS JUSTIFYING THE VALUATIO N OF ITS SHARES TO JUSTIFY THE CHARGING OF SUCH HIGH PREMIUM . THE LD. ARS HAVE EXPLAINED THAT SHARES WERE NOT EXCLUSIVELY ISS UED TO M/S STL. DURING AY 2007-08, ON 02.08.2006 A TOTAL OF 40 ,00,000 SHARES WERE ISSUED BY THE APPELLANT COMPANY TO 4 IN VESTORS INCLUDING STL AT THE SAME RATE AND UNDER THE SAME T ERMS AND CONDITIONS. THUS THE SAME PRICE WAS CHARGED FROM EA CH OF THE 4 23 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . INVESTORS, AND THE AO HAS NOT RAISED ANY QUESTION O N THE PREMIUM CHARGED FROM OTHER 3 INVESTORS. BASED ON VE RIFICATION OF APPELLANT'S SUBMISSIONS, DOCUMENTARY EVIDENCE AND A SSESSMENT RECORDS, IT IS FOUND THAT THE APPELLANT'S CONTENTIO N IS CORRECT. THE PRICE AT WHICH SHARES WERE ISSUED BY THE APPELL ANT COMPANY TO M/S STL IS THE SAME PRICE AT WHICH SHARES WERE I SSUED ON THE SAME DATE TO M/S DYNAMIC TECHNOLOGIES LIMITED, M/S SARVESH COALTECH LTD. AND DR. A V MOHAN RAO. DURING THE COU RSE OF ENTIRE ASSESSMENT PROCEEDINGS, THE AO HAS NEVER QUESTIONED THE PREMIUM CHARGED FROM SUCH OTHER INVESTORS, THEREBY IMPLYING THAT THE PREMIUM CHARGED (WHEREVER APPLICABLE) IS J USTIFIED. IN SUCH A CASE, THE SAME AMOUNT OF PREMIUM CHARGED FRO M M/S STL CANNOT BE QUESTIONED. IN CASE A DIFFERENTIAL PRICE HAD BEEN CHARGED FROM M/S STL, THEN THE SAME COULD HAVE BEEN QUESTIONED. THIS GRIEVANCE OF THE AO IS THEREFORE I LL FOUNDED. THE AO HAS TRIED TO STEP INTO THE ISSUE OF THE INVE STOR SHARE HOLDERS AND HAS TRIED TO QUESTION THE QUANTUM OF TH E PREMIUM. IT IS A FACT THAT THE QUANTUM OF SHARE PREMIUM IS A MATTER OF NEGOTIATION BETWEEN THE PROSPECTIVE INVESTOR AND TH E COMPANY. THE PROSPECTIVE INVESTOR NAMELY M/S STL, MAURITIUS WERE NO NOVICES. THE APPELLANT IS STATED TO HAVE HELD SERIE S OF MEETINGS WITH MOST OF THE INVESTORS AND AFTER CONSIDERING TH E OFFERS MADE BY VARIOUS INVESTORS, THE APPELLANT ZEROED DOWN ON AKULA ENERGY, A GLOBAL INVESTMENT COMPANY FOCUSED ON DEVE LOPING RENEWABLE ENERGY PROJECTS AROUND THE WORLD. THE TERMS AND CONDITIONS OF INVESTMENT INCLUDING TH E NUMBER OF SHARES TO BE ALLOTTED AND THE PRICE PER SHARE ON WH ICH THE ALLOTMENT WAS TO BE MADE WERE FINALIZED. AKULA ENER GY MADE THIS INVESTMENT THROUGH THEIR SPECIAL PURPOSE VEHIC LE NAMELY SPECTRUM TECHNOLOGIES LTD., MAURITIUS I.E. M/S STL. ADDITIONALLY. 24 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . IT HAS ALSO BEEN SUBMITTED THAT THE EXISTING NET-WO RTH OF THE APPELLANT COMPANY AS ON 31.03.2006 WAS APPROX. RS. 17.4 PER SHARE, AND OVER THE NEXT 3-4 YEARS, THE APPELLANT'S TURNOVER-AND PROFITS INCREASED MANIFOLD. THE APPELLANT COMPANY A TTRIBUTED SUCH GROWTH TO ITS PROJECTS PENDING COMMENCEMENT IN AY 2007- 08 WHICH SIGNIFICANTLY CONTRIBUTED TO ITS REVENUES AND TURNOVER, AND ARE STILL CONTRIBUTING IMMENSELY TILL DATE. THU S, GIVEN THE EXISTING NET-WORTH AND FUTURE POTENTIAL OF EARNINGS , THE PREMIUM OF RS.15 PER SHARE WAS ADEQUATELY JUSTIFIED. THE ARS HAVE ALSO POINTED OUT THAT THE PROVISION TO REGULATE SHARE PREMIUM WAS INSERTED IN THE INCOME TAX ACT BY THE FINANCE ACT 2012 BY AMENDING THE PROVISIONS OF SECT ION 56(2)(VIIB) WITH EFFECT FROM 01.04.2013. THE SAID A MENDMENT IS PROSPECTIVE AND CANNOT BE APPLIED RETROSPECTIVELY I N ASSESSMENT YEAR 2007-08. RELIANCE HAS RIGHTLY BEING PLACED COMMISSIONER OF I NCOME TAX VS. ANSHIKA CONSULTANTS PVT. LTD. HIGH COURT OF DELHI, (2015) 93 CCH 0016 DEL HC, ADDITIONAL COMMISSIONER OF INCOME TAX VS. OM OILS & OIL SEEDS EXCHANGE LTD. HIGH COURT OF DELHI, (1985) 152 ITR 0 552 : (1984) 18 TAXMAN 0337 1ST SEPTEMBER, 1983, GREEN INFRA LTD. VS. INCOME TAX OFFICER ITAT, BOMBAY TRIBUNAL ( G) [2013] 145 ITD 240 (MUMBAI - TRIB.) I [2014] 159 TT J 728 (MUMBAI - TRIB.) THE ABOVE JUDICIAL PRONOUNCEMENTS FULLY SUPPORT THE APPELLANTS VIEW REGARDING THAT THE ERSTWHILE SECTION 56 R.W.S 68 WAS NOT APPLICABLE TO SHARE PREMIUM. ON PAGE 27 OF THE ASSESSMENT ORDER THE AO HAS STATE D THAT 'THE CASE OF HUGE PREMIUM CHARGED BY THE ASSESSEE ON ALL OTMENT OF SHARE IS ALSO HIT BY THE PROVISIONS OF SECTION 56(1 } OF THE IT ACT'. SEC 56(1) AS IT STOOD IN AY 2007 -08 WAS AS UNDER: - 25 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 'INCOME OF EVERY KIND WHICH IS NOT TO BE EXCLUDE FR OM THE TOTAL INCOME UNDER THIS ACT SHALL BE CHARGEABLE TO INCOME- TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES') IF IT IS NOT CHARGEABLE TO INCOME-TAX UNDER ANY OF THE HEADS SPE CIFIED IN SECTION 14) ITEMS A TO E. SEC. 56(1) MERELY STATES ABOUT THE SCOPE OF THE HEA D OF INCOME. THE SAID SECTION NOWHERE STATES THAT SHARE PREMIUM OR ANY OTHER RECEIPT/ INCOME WOULD BE HIT BY THE PROVISIONS OF S EE 56(1) OF THE IT ACT. THEREAFTER, THE AO HAS ALSO ENUMERATED CERTAIN POIN TS ON THE BASIS OF WHICH SHARE PREMIUM WILL BE HIT BY THE PRO VISIONS OF SEE 56(1) OF THE IT ACT. THE APPELLANT HAS RIGHTLY POIN TED OUT THE FOLLOWING FACTS:- 1. 'THE APPELLANT DID NOT ISSUE THE SHARES BY ARBIT RARILY CHARGING THE PREMIUM. THE PREMIUM WAS BASED ON PAST TRACK RECORD, CURRENT PERFORMANCE AND, FUTURE PROJE CTIONS OF THE COMPANY. THUS THE PREMIUM WAS BASED ON FUNDAMENTALS AND WAS NOT DECIDED ARBITRARILY. THE S AME AMOUNT OF PREMIUM WAS CHARGED FROM OTHER INVESTORS, WHICH HAS BEEN ACCEPTED BY THE AO. 2. THE APPELLANT HAD MADE SUBMISSIONS DATED 03.11.2 014, 16.02.2015, 28.03.2016, 29.03.2016 AND 31.03.2016 BEFORE THE AO WITH REGARD TO THE CHARGING OF THE SH ARE PREMIUM. 3. THE BASIS OF CHARGING THE SHARE PREMIUM WERE EXP LAINED IN THE SUBMISSIONS REFERRED TO IN PARA 2 ABOVE. IT WAS REITERATED THAT SHARES WERE ISSUED TO EXISTING SHAR EHOLDERS AT THE SAME RATE AND NO DIFFERENTIAL PRICE WAS CHAR GED FROM ANY INVESTOR. 26 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 4. THE AO IS OBLIVIOUS TO THE MODERN DAY BUSINESS ENVIRONMENT. IN TODAY'S TIME EVEN STARTUP COMPANIES THAT ARE INCURRING HUGE BUSINESS LOSSES OR EVEN CASH LOS SES IN THE INITIAL YEARS ARE ABLE TO GET HUGE VALUATIONS F ROM ANGLE INVESTORS/ VENTURE CAPITALISTS WHO INVEST MILLIONS OF DOLLARS IN SUCH COMPANIES BY MERELY LOOKING AT THE FUTURE PROSPECTS. THE APPELLANT HAD BEEN RUNNING A STATE OF THE ART C OAL WASHERY IN INDIA AND WAS NEARING COMPLETION OF FEW MORE WAS HERIES. THE APPELLANT COMPANY ALSO PLANNED TO SET UP A 2X25 MW THERMAL POWER PLANT ADJACENT TO ITS WASHERY AT KORBA, FOR W HICH IT HAD ALREADY PROCURED THE LAND AND THE NECESSARY AGREEME NTS/ PERMISSIONS FOR SETTING UP OF THE POWER PLANT. THE APPELLANT COMPANY SET UP TWO COAL BENEFICIATION PLANTS AT:- - RATIJA ( IN THE STATE OF CHHATTISGARH) AND - KALINGA (IN THE STATE OF ORISSA) THE RATIJA PLANT WAS COMMISSIONED IN DECEMBER 1999 WITH A CAPACITY OF 2.50 MILLION TONS PER ANNUM. THE CAPACI TY WAS EXPANDED TO 5.00 MILLION TONS PER ANNUM IN 2003, 8. 00 MILLION TONS PER ANNUM IN 2008 AND 10.00 MILLION TONS PER A NNUM OF RAW COAL IN 2009. THE MAIN CUSTOMERS WERE GUJARAT STATE ELECTRICITY CORPORATION LIMITED, RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LIMITED AND RELIANCE NATURAL RESOURCES LIMITED. THE KALINGA PLANT IS LOCATED AT TALCHER, DISTRICT A NGUL IN THE STATE OF ORISSA. KALINGA PLANT WAS COMMISSIONED IN 2008. THE INITIAL INSTALLED CAPACITY OF KALINGA PLANT WAS 6.53 MILLIO N TONS PER ANNUM OF RAW COAL WHICH HAS BEEN EXPANDED TO 9.52 M ILLION TONNES PER ANNUM OF RAW COAL IN OCTOBER 2012. APPELLANT IS SEEN TO HAVE A PROVEN TRACK-RECORD. TH E PROMOTERS ARE SEEN TO HAVE OVER 30 YEARS OF SUCCESSFUL ENTREP RENEURSHIP. 27 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THE APPELLANT HAD BEEN GRANTED CREDIT-RATING OF 'AA ' OR 'A+' BY CRISIL CREDIT-RATING AGENCY. THE APPELLANT HAD BEEN GRANTED VARIOUS CREDIT FACILITIES LIKE TERM LOANS, WORKING CAPITAL LOANS, GUARANTEE LIMITS ETC. FROM A CONSORTIUM OF PUBLIC S ECTOR AND PRIVATE SECTOR BANKS AND OTHER FINANCIAL INSTITUTIO NS THE DETAILS OF WHICH HAVE BEEN GIVEN IN OUR SUBMISSIONS MADE IN RE SPONSE TO PARA 5.10 ABOVE. 5. IN THE CONTEXT OF DECIDING THE SHARE PREMIUM, TH E APPELLANT'S SUBMISSION THAT THE APPELLANT COMPANY AND THE APPEL LANT GROUP HAD ALSO SHOWN SUBSTANTIAL GROWTH IN THE SUBSEQUENT YEARS, IS EXTREMELY RELEVANT. AS SUBMITTED EARLIER, WHILE DEC IDING THE PREMIUM, THE INVESTOR AND THE COMPANY ALWAYS KEEP I N MIND THE FUTURE GROWTH POTENTIAL OF THE COMPANY. LOOKING AT THE EXPONENTIAL GROWTH IN THE APPELLANT'S PROFIT IN SUB SEQUENT YEARS, THE DECISION OF THE INVESTORS WAS VINDICATED. THE APPELLANTS HAD RIGHTLY POINTED OUT THAT THE REL EVANT PROVISION THAT REGULATED THE PRICE ON WHICH A COMPANY WOULD I SSUE ITS SHARES IS CONTAINED IN SEC. 56(2)(VIIB) OF THE ACT. IT IS ALSO A FACT THAT THE SAID PROVISION WAS NOTIFIED BY THE CBDT WI DE NOTIFICATION DATED 29.11.2012 AND THE SAID PROVISION WAS TO COME INTO EFFECT W.E.F. A.Y. 2013-14. THE APPELLANT HAD CORRECTLY SE TTLED THAT PROVISIONS OF SEC. 56(2)(VIIB) WOULD NOT BE RELEVAN T WHILE FRAMING THE APPELLANT'S ASSESSMENT FOR A.YS PRIOR TO A.X 20 13-14. IN ANY CASE; WHEN THE AO HAS CONSIDERED THAT THE PR OVISION 'OF SEC 56(2)(VIIB)/ 56(2)(VIIA) HAVE NO RELEVANCE IN T HE PRESENT ASSESSMENT YEAR, THEN IT IS EVIDENT THAT THERE IS N O OTHER PROVISION OF THE ACT UNDER WHICH THE QUESTION OF ISSUE OF SHA RES AT PREMIUM CAN BE REGULATED. THE CBDT AND THE GOVERNMENT HAD REALIZED THIS SHORT COMING IN THE IT ACT AND HAD THEREFORE INSERTED SEE 56(2)(VII B) WITH W.E.F. A.Y. 2013-14. 28 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 6. FIRSTLY, IT WAS FOR THE INVESTORS TO JUDGE AS TO WHETHER THEY WOULD LIKE TO SUBSCRIBE TO THE SHARES OF THE APPELL ANT COMPANY AND, IF YES, THEN AT WHAT PRICE. IT IS BEYOND THE J URISDICTION OF THE AO TO STEP INTO THE SHOES OF THE INVESTOR FOR TAKIN G A BUSINESS DECISION. AS THIS IS AGAINST THE PRINCIPLES OF COMM ERCIAL EXPEDIENCY AS THE AO DOES NOT HAVE JURISDICTION TO STEP INTO THE SHOES OF A TAXPAYER AND DICTATE WHETHER OR NOT TO U NDERTAKE A TRANSACTION. IT IS FOR THE INVESTOR TO SEE THE COMM ERCIAL EXPEDIENCY AND VIABILITY OF THE INVESTMENT AT A GIVEN PRICE. THE FUNDAMENTALS OF THE APPELLANT COMPANY AND THE S TRENGTHS OF THE COMPANY HAVE ALREADY BEEN EXPLAINED IN SECTI ON 3.4 ABOVE. ON PAGE 27, 28 AND 29 OF THE ASSESSMENT ORDER, THE AO HAS DEVISED THE CRITERIA AND BASIS THAT SHOULD BE ADOPT ED WHILE DECIDING THE PRICE AND PREMIUM AT WHICH AN INVESTOR SHOULD ACQUIRE THE SHARES OF ANY COMPANY. THE APPELLANT IS OF THE FIRM BELIEF THAT THE AO IS GOING WAY BEYOND HIS DUTIES OF BEING AN ASSESSING OFFICER. THE AO CA NNOT STEP INTO THE SHOES OF THE INVESTOR AND CANNOT QUESTION THE W ISDOM OF THE INVESTOR. THIS DECISION IS THE EXCLUSIVE RESULT OF THE INVESTOR AND THE AO CANNOT QUESTION THE INVESTOR'S FINANCIAL PRU DENCE'. THERE IS ALSO NO DENYING THE FOLLOWING PREPOSITIONS :- (I) PREMIUM CHARGED BY A COMPANY IS ADDED TO THE RE SERVES OF THE COMPANY. HENCE THE SHARE HOLDER, WHO PAYS THE P REMIUM, ALSO BECOMES ENTITLED TO THE ENHANCED RESERVES OF T HE COMPANY. (II) IS CHARGING HIGH PREMIUM IN THE INTEREST OF TH E COMPANY OR CHARGING LOW PREMIUM IN THE INTEREST OF THE COMPANY ? ALSO, CHARGING HIGHER PREMIUM IS IN THE INTEREST OF COMPA NY AS IT STRENGTHENS THE FINANCIAL HEALTH OF THE COMPANY. AL SO, IT ACTS AS AN ATTRACTION TO FUTURE PROSPECTIVE INVESTORS. 29 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . (III) SHARE PREMIUM IS A REVENUE RECEIPT OR CAPITAL RECEIPT? AS A MATTER OF PRINCIPLE, SHARE PREMIUM LIKE SHARE CAPIT AL IS A CAPITAL RECEIPT. SINCE SHARE PREMIUM IS A CAPITAL RECEIPT, THE SAME CANNOT BE PER-SE BROUGHT TO TAX. THIS VIEW FINDS SU PPORT FROM FOLLOWING CASE LAWS:- - CIT VS. ALLAHABAD BANK LTD. [1969J 73ITR 745 (SC) - CIT VS. VACUUM OIL CO. [1966} 59 ITR 685 (SC) - PUNJAB STATE INDUSTRIAL CORPORATION LTD. VS. CIT [1 997J 225 ITR 792 (SC) - BROOKE BOND INDIA LTD. VS. EIT [1997J 225 ITR 798 ( SC) - ACIT VS. AM OILS AND OIL SEEDS LTD. F19851 152 ITR 552 (DEL HCL - CIT VS. KRISHNARAM BALDEO BANK (P) LTD. [1983J 144 ITR 600 (MP HC) - VODAFONE INDIA SERVICES PRIVATE LIMITED VS. UOI [20 14] 368 ITR 1 (BOM HC) WHICH WAS LATER ADOPTED BY THE UOI AND N O FURTHER APPEAL WAS FILED VIDE PRESS RELEASE DATED 28.01.201 5 (IV) IN A.YS 2007-08 AND 2008-09 THERE WAS NO MENTI ON OF SHARE PREMIUM IN SECTION 68 OF THE ACT. BY INSERTING THE AMENDMENT IN FINANCE ACT 2012, THE LEGISLATURE BROUGHT SHARE PRE MIUM IN THE AMBIT OF SECTION 68 W.E.F 01.04.2013. THIS REAFFIRM S THE APPELLANT'S CONTENTION THAT PRIOR TO 01.04.2013, SH ARE PREMIUM WAS NOT UNDER THE AMBIT OF SECTION 68. IN THE RELEVANT ASSESSMENT YEARS, THE OBLIGATION OF THE ASSESSEE COMPANY WAS ONLY TO SHOW ITS' 'SOURCE' AND NOT 'SOU RCE'S SOURCE'. THE APPELLANT COMPANY HAD DULY DISCHARGE I TS' ONUS OF 30 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . SHOWING THE 'SOURCE' AS HAVING COME FROM M/S PIL AN D INDIAN COAL AGENCY. THE AO HAS ADMITTED THE 'SOURCE' OF THE APPELLANT'S FUNDS. THE AO HAS ILLEGALLY MADE THE ADDITIONS IN THE IMPUGNED ASSESSMENT ORDER BY QUESTIONING THE 'SOURCE'S SOURCE' BY QUEST IONING THE SOURCES OF M/S STL. (V) EVEN AFTER THE AFORESAID AMENDMENT, THE SHARE C APITAL AND SHARE PREMIUM RECEIVED FROM NON-RESIDENT ENTITIES A ND FROM WELL REGULATED SHARE HOLDER ENTITIES OR FROM VENTURE CAP ITALISTS ETC HAS BEEN KEPT OUT OF THE AMBIT OF SECTION 68. M/S S TL IS A MAURITIUS BASED NON-RESIDENT ENTITY AND IT IS PROMO TED BY WELL REGULATED AKURA ENERGY GROUP WHICH IS A WORLD RENOW NED PRIVATE EQUITY INVESTMENT COMPANY FOCUSED ON DEVELO PING RENEWABLE ENERGY PROJECTS AROUND THE WORLD. THEREFO RE, THE SHARE CAPITAL AND SHARE PREMIUM RECEIVED FROM M/ S STL WERE NOT COVERED EVEN BY THE AMENDED PROVISIONS OF SECTI ON 68 THAT BECAME EFFECTIVE FROM 1.4.2013. (VI) TAKING THE FACT OF THIS AMENDMENT AS THE MANIF ESTATION OF INTENTION OF LEGISLATURE, IT IS EVIDENT THAT THE LE GISLATURE ALWAYS WANTED TO KEEP NON-RESIDENT ENTITIES OR WELL REGULA TED PRIVATE EQUITY INVESTORS, VENTURE CAPITALISTS AND ANGEL INV ESTORS OUT OF THE AMBIT OF SECTION 68. THE CONCLUSION ARRIVED AT FROM THE PERUSAL OF THE A SSESSMENT RECORDS, ASSESSMENT ORDERS, WRITTEN SUBMISSION FILE D DURING ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS, L EGAL POSITION, JUDICIAL PRONOUNCEMENTS, FACTS OF THE CAS E AND ARGUMENTS OF THE LD. ARS LEAD TO THE CONCLUSION THA T THE AO HAD GROSSLY ERRED IN QUESTIONING THE QUANTUM OF SHARE P REMIUM CHARGED BY THE APPELLANT COMPANY. 31 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . (III) QUESTIONING THE CREDITWORTHINESS OF M/S STL, MAURITIUS AND GENUINENESS OF THE TRANSACTION . M/ S STL, MAURITIUS IS A COMPANY THAT WAS PROMOTED BY AKULA ENERGY, AN INVESTMENT COMPANY FOCUSED ON DEVELOPING RENEWABLE ENERGY PROJECTS AROUND THE WORLD. AKULA E NERGY INVESTS IN EARLY-STAGE PROJECTS ACROSS THE ENERGY S PECTRUM, INCLUDING SOLAR, BIOGAS AND BATTERY ENERGY STORAGE, AND HAS TARGETED INVESTMENTS AND PARTNERSHIPS IN THE UNITED STATES AND INDIA. THE AO HAS REPEATEDLY QUESTIONED THE CREDITWORTHINE SS OF M/S STL, MAURITIUS. IN HIS OPINION M/S STL DID NOT HAVE THE BUSINESS INCOME AS WELL AS THE RESOURCES TO CONTRIBUTE SUCH HUGE SHARE CAPITAL/ SHARE PREMIUM AMOUNTING TO RS.3.57 CRORES IN APPELLANT COMPANY. AS STATED EARLIER, M/ S STL BEING A MAURITIUS ENTIT Y, A REFERENCE WAS SENT BY THE INVESTIGATION WING AS WELL AS THE A O TO ENQUIRE INTO THEIR CREDENTIALS AND CREDITWORTHINESS. IN RES PONSE TO THE SAID REFERENCE, THE MAURITIUS REVENUE AUTHORITY (MR A) SENT A VERY COMPREHENSIVE REPLY. THE INFORMATION REGARDING M/S STL WAS RECEIVED FROM MAURITIUS REVENUE AUTHORITY VIDE THEIR REF: 25-007487/ITU/LTD /MT/02 DATED 29TH JULY, 2015. A COPY OF LETTER FROM MRA AN D ITS ANNEXURES WERE FURNISHED TO .THE APPELLANT BY THE A O VIDE HIS LETTER F. NO. ACIT/CC-17 /2015-16/1745 DATED 23.03. 2016. THE RELEVANT EXTRACT OF AO'S LETTER CONVEYING THE INFOR MATION RECEIVED FROM MRA IS REPRODUCED AS UNDER:- 'SPECTRUM TECHNOLOGIES LIMITED A) PRIOR TO THE REMOVAL OF THE COMPANY FROM THE REG ISTER OF COMPANIES, THE REGISTERED OFFICE ADDRESS OF SPECTRU M 32 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . TECHNOLOGIES (MAURITIUS) LIMITED ('STML') WAS 5, DU KE OF EDINBURG AVENUE, PORT LOUIS, REPUBLIC OF MAURITIUS; DATE OF SHAREHOLDER'S ADDRESS NO. OF VALUE ALLOTMENT NAME SHARES (USD) HELD 24 TH OCTOBER DENIS SEK SUM 5, DUKE OF EDINBURG 1 100 1994 AVENUE, PORT LOUIS, REPUBLIC OF MAURITIUS. 24 TH OCTOBER SOOKRAJ 5, DUKE OF EDINBURG 1 100 1994 SEECHUM AVENUE, PORT LOUIS, REPUBLIC OF MAURITIUS C) PRIOR TO THE REMOVAL FROM THE REGISTER OF COMPANIES, THE DIRECTORS OF STML WERE: DIRECTOR'S NAME ADDRESS DR. A V MOHAN RAO 15, WARREN STREET, APARTMENT 210 , JERSEY CITY, NEW JERSEY, 07302-6457, USA MR. AKULA SRIKANT 15, WARREN STREET, APARTMENT 210, JERSEY CITY, NEW RAO JERSEY, 07302-6457, USA MS. TANYA SEK SUM 5, DUKE OF EDINBURG AVENUE, PORT LO UIS, REPUBLIC OF MAURITIUS MR. SALIM JHUMKA 5, DUKE OF EDINBURG AVENUE, PORT LOUIS, REPUBLIC OF MAURITIUS D) KINDLY REFER TO THE ENCLOSED APPENDIXES 1 AND 2 RE.CHANGE IN SHAREHOLDING AND DIRECTORSHIP OF STML. E) THE DETAILS OF THE HOLDING COMPANY ARE AS FOLLOW S:- 33 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . NAME OF HOLDING COMPANY ADDRESS OF HOLDING COMPANY NAME OF DIRECTOR ADDRESS OF DIRECTOR AKULA ENERGY VENTRUES, LLC (PREVIOUSLY KNOWN AS SPECTRUM INVESTMENT GROUP USA, LLC) 200, LANIDEX PLAZA, 2 ND FLOOR, PARSIPANNY, NJ, 07054, USA 1. DR.A.V.MOHAN RAO 15. WARREN STREET, APARTMENT 210, JERSEY CITY, NEW JERSEY, 07302-6457, USA 2.SRIKANT AKULA 15. WARREN STREET, APARTMENT 210, JERSEY CITY , NEW JERSEY, 07302-6457, USA THERE ARE NO SHAREHOLDERS. THE ENTITY IS A PARTNER SHIP. THE COMPANY HAS CONFIRMED THE FOLLOWING: THERE HAS NOT BEEN ANY CHANGE IN THE SHAREHOLDING P ATTERN OR DIRECTORSHIP OF THE HOLDING COMPANY PRIOR TO THE RE MOVAL- OF STML FROM THE REGISTER OF COMPANIES; STML HAS NOT INVESTED IN GLOBAL COAL & MINING PRIVA TE LIMITED. G) THE COPIES OF THE COMPANYS FINANCIAL STATEMENTS FOR THE FIVE YEARS, ENDED 31 DECEMBER 2009 AND FOR THE PERIOD 30 JUNE 2010 ARE HEREWITH ENCLOSED AND MARKED AS APPENDIXES 3 TO 8. FROM A PERUSAL OF THE SAID INFORMATION AND AS ADMIT TED BY THE AO, IT IS EVIDENT AS UNDER:- I) THAT M/S STL WAS IN EXISTENCE IN MAURITIUS AND ITS REGISTERED OFFICE WAS: II) 5, DUKE OF EDINBURG AVENUE, III) PORT LOUIS, REPUBLIC OF MAURITIUS. 34 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . IV) THE INFORMATION ALSO CONFIRMED THAT M/S STL WA S A PART OF A GROUP CONCERN OF AKULA ENERGY VENTURES LL C. V) THE HOLDING COMPANY OF MI S STL WAS AKULA ENERGY VENTURES, LLC (PREVIOUSLY KNOWN AS SPECTRUM INVESTMENT GROUP USA LLC) VI) THE AUDITED FINANCIAL STATEMENT OF M/S STL DISCLOSED THE AMOUNTS OF INVESTMENT IN THE APPELLANT COMPANY IN RESPECTIVE YEARS AS REGARDS THE HOLDING COMPANY OF M/S STL, THE AO HAD FURNISHED THE FOLLOWING INFORMATION AS RECEIVED FROM MAURITIUS REVENUE AUTHORITY- F) THE DETAILS OF THE HOLDING COMPANY ARE AS FOLL OWS: NAME OF THE HOLDING COMPANY ADDRESS OF HOLDING COMPANY NAME OF DIRECTOR ADDRESS OF DIRECTOR AKULA ENERGY VENTURES, LLC (PREVIOUSLY KNOWN AS SPECTURM INVESTMENT GROUP USA, LLC) 200, LANIDEX PLAZA, 2 ND FLOOR, PARSIPANNY, NJ, 07054, USA 1.DR.A.V.MOHAN RAO 15. WARREN STREET, APARTMENT 210, JERSEY CITY, NEW JERSEY, 07302-6457, USA 2.SRIKANT AKULA 15. WARREN STREET, APARTMENT 210, JERSEY CITY, NEW JERSEY, 07302-6457, USA IT IS APPARENT FROM A PERUSAL OF INFORMATION PROVID ED BY NONE OTHER THAN THE LD AO, THE FOLLOWING FACTS CANNOT BE DENIED:- 35 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . I) THE DETAILS OF HOLDING COMPANY OF M/S STL WAS AKULA ENERGY VENTURES, LLC, A NEW JERSEY PARTNERSHIP HAVING ITS OFFICE IN NEW JERSEY, USA. A PERUSAL OF THE BALANCE SHEETS AND OTHER FINANCIAL STATEMENTS OF M/ S.STL AS AUDITED BY JOSE THIBAUT REVEAL THAT: I] M/S STL'S PAID UP SHARE CAPITAL OF AS ON 31.12.2004 WAS US$ 13,81,000 THAT WAS INCREASED TO US$ 44,63,5 00 IN 2008. AT THE CURRENT EXCHANGE RATE OF US$ TO IND IAN RUPEES OF RS 66 PER US DOLLAR, THE PAID UP SHARE CAPITAL WORKS OUT TO RS 9,11,46,000 AS ON 31.12.2004 AND RS. 29,45,91,000/- AS ON 31.12.2008. THE ABOVE FACTS ARE ENOUGH TO ESTABLISH AND SUBSTANTIATE THE FINANCIAL STRENGTH OF M/S STL. ADD TO THAT THE FACT THAT M/S STL WAS A GROUP CONCERN PROMOTED BY AKULA ENERGY, WHICH, ACCORDING TO INFORMATION AVAILABLE IN THE PUBLIC DOMAIN, HAS INVESTMENTS ACROSS THE GLOBE IN THE RENEWABLE ENERGY SECTOR. THUS THERE WAS NO NEED FOR M/ S STL TO EARN BUSINESS INCOME TO MAKE THE SAID INVESTMENT. IT HAD THE FINANCIAL MIGHT OF AKULA ENERGY TO DRAW UPON FO R FUNDING THE SAID INVESTMENT. IN VIEW OF THE ABOVE BACKGROUND AND, MORE PARTICULARLY, THE FACT THAT DEPARTMENT HAD DONE INDEPENDENT ENQUIRY FROM MRA THROUGH THE GOOD OFFICES OF THE FT & TR DIVISION WHEREIN THE CREDENTIALS AND CREDITWORTHINESS OF M/ S STL WAS ESTABLISHED BEYOND ANY DOUBT, THIS OBSERVATION OF THE AO IS FACTUALLY INCORRECT. 36 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . (IV) JUDICIAL PRONOUNCEMENTS SUPPORTING AO'S CONTENTION OF MAKING ADDITION U/S 56 R.W.S. 68 OF THE I.T. ACT. THE PLEA OF THE APPELLANT IS THAT THE AO HAS TRIED TO PROJECT THE INVESTMENT RECEIVED AS SHARE CAPITAL AN D SHARE PREMIUM FROM M/S STL, MAURITIUS AS ACCOMMODATION ENTRY TRANSACTIONS RECEIVED THROUGH CONDUITS AND ENTRY OPERATORS. TO SUBSTANTIATE HIS V IEW, THE AO HAS PLACED RELIANCE ON VARIOUS CASE LAWS OF THE APEX COURT AND OTHER HONORABLE HIGH COURTS. THE LD. ARS HAVE DEALT WITH EACH AND EVERY CASE LAW RELIED UPON BY THE AO. AS WOULD BE SEEN FROM FOLLOWING, TH E LD ARS HAVE BEEN ABLE TO DISTINGUISH EACH AND EVERY CASE ON ACCOUNT OF DIFFERENT FACTS, PREPOSITIONS, A ND QUESTION OF LAW ETC. AS CITED BY HON'BLE ITAT IN THE CASE OF BISAKHA SALES PVT. LTD, KOLKATA VS CIT (KOL-II) IN ITA NO. 1493/K OL/2013, THERE ARE THERE LIMBS TO SUCH TAX EVASION/MONEY LAUNDERING TRANSACTIONS. THE FIRST LIMB IS THE CREA TION OF THE SHELL COMPANY, THE SECOND LIMB IS THE TRANSF ER OF SUCH SHELL COMPANY TO PERSONS WHO REQUIRES SUCH COMPANIES FOR CONVERTING THEIR UNACCOUNTED INCOME A ND THE THIRD LIMB IS WHEN THE SHELL COMPANIES, AFTER BEEN TAKEN OVER, ENCASHED THE ASSETS/ INVENTORIES OF SUC H SHELL COMPANIES. IN THE CASE UNDER APPEAL, NEITHER THE APPELLANT COMPANY NOR THE INVESTOR COMPANIES ARE SHELL COMPANIES. EVEN THE AO HAS NOT BEEN ABLE TO PIN POINT OR ALLEGE THAT THE APPELLANT HAD LAUNDERED ITS UNACCOUNTED MONEY AT WHAT STAGE. AS STATED EARLIER, 37 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THE APPELLANT NEITHER CREATED A SHELL COMPANY, NOR ACQUIRED A SHELL COMPANY NOR CONVERTED THE INVENTORIES/ INVESTMENTS/ LOANS AND ADVANCES INTO FUNDS FOR LEGITIMATE BUSINESS. 'THE APPELLANT HAD FILED THE BANK STATEMENTS OF THE INVESTORS AND THE DEPARTMENT HAD ALSO OBTAINED THE SAME THROUGH THE FT & TR. IT WAS APPARENT FROM THE SAID BANK STATEMENTS THAT NO CASH HAD BEEN DEPOSITED IN THE BANK ACCOUNTS OF THE INVESTORS. ON A PLAIN READING OF THE JUDGMENT OF BISAKHA READ WITH THE FACTS OF THE APPELLANT'S CASE, IT IS EVIDENT THAT THE FACTS OF BISAKHA'S CASE WERE COMPLETELY DIFFERENT FROM THE CASE OF APPELLANT: THE AO HAS CITED THE OBSERVATIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 ITR 540 (SC). THE AO HAS ALLEGED THAT IN APPELLANT'S. CASE THAT THE SITUATION WAS SIMILAR TO THE CITED CASE WHEREIN THE HON'BLE COURT HAD HELD THAT APPELLANT HAS TO BE DISTINGUISHED FROM REAL. IN THE INSTANT CASE THE AO HAS NOT BEEN ABLE TO SHOW THAT THERE WERE REASONS TO BELIEVE THAT THE APPELLANT WAS NOT REAL. THE APPELLANT HAS NOT RELIE D UPON ANY SELF CREATED OR SELF SERVING STATEMENT OR DOCUMENTS. THE TRANSACTIONS HAD TAKEN PLACE BETWEEN THE APPELLANT AND UNRELATED INVESTORS. THE TRANSACTIONS HAD TAKEN PLACE THROUGH NORMAL BANKING CHANNELS AFTER APPROVALS/ INTIMATION OF RBI AND OTHER STATUTORY AUTHORITIES. THE ASSERTIONS MAD E BY THE APPELLANT HAVE BEEN CORROBORATED BY THE INQUIRIES MADE BY THE DEPARTMENT THROUGH THE FT & TR. 38 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ALL THE CASES REFERRED TO IN PARA 5.10.8 AND 5.10.9 ARE NOT RELEVANT. THE APPELLANT HAS NOT ONLY ESTABLISHED THE IDENTITY OF THE CREDITOR BUT HAS ALSO ESTABLISH ED THEIR CREDITWORTHINESS AS WELL AS THE GENUINENESS O F THE TRANSACTION. THE APPELLANT HAS NO WHERE TAKEN T HE STAND THAT MERELY ESTABLISHING THE IDENTITY OF THE CREDITOR IS SUFFICIENT. THE APPELLANT HAS NO WHERE TAKEN THE STAND THAT MANNER OF PAYMENT BY ACCOUNT PAYEE CHEQUE ALONE IS SACROSANCT AND CAN MAKE A BOGUS TRANSACTION AS GENUINE TRANSACTION. THE FACTS OF COMMISSIONER OF INCOME-TAX VS. NOVA PROMOTERS AND FINLEASE (P) LTD. DATED FEBRUARY 15, 2012 REPORTED IN [2012J 342 ITR 169, THE RELIED UPON CASE ARE COMPLETELY DIFFERENT FROM THE APPELLANT'S CASE. IN THE CASE OF NOVA PROMOTERS, THE ASSESSING OFFICER RECEIVED A LETTER DATED 3 RD MARCH, 2006 FROM THE DIRECTOR OF INCOME TAX (INVESTIGATION), NEW DEL HI WHICH FURNISHED DETAILED INFORMATION REGARDING ENTR Y OPERATORS/ ACCOMMODATION PROVIDERS. IN THE APPELLANT'S CASE NO SUCH INFORMATION WAS RECEIVED NOR HAD THE APPELLANT RECEIVED SHARE CAPITAL ETC. F ROM ANY ENTRY OPERATOR. EVEN THE AO HAS NOT MADE ANY SUCH ALLEGATION. IN THE CASE OF NOVA PROMOTERS, SUMMONS WERE REPEATEDLY ISSUED TO THE INVESTORS THAT WERE EITHER NOT SERVED OR NOT COMPLIED WITH. ALSO THE MONEY HAD COM E FROM NON-EXISTENT COMPANIES. IN THE 'APPELLANT'S CASE AN ENQUIRY WAS CONDUCTED THROUGH THE FT & TR M/S STL WAS FOUND TO EXIST AT THEIR GIVEN ADDRESS AND M/S STL HAD FURNISHED THE COMPLETE INFORMATION THAT WAS CALLED FOR. 39 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ON ACCOUNT OF THE FACTS OF THE CITED CASE BEING ENTIRELY DIFFERENT FROM THE APPELLANT'S CASE, THE R ATIO LAID DOWN IN THE RELIED UPON CASE CANNOT BE APPLIED TO THE APPELLANT'S CASE. THE AO HAS RELIED UPON THE CASE OF INDEPENDENT MEDIA (P) LTD. 210 TAXMANN 14 (DELHI) (2012. THE AO HAS HIMSELF RECORDED ON PAGE 25 OF THE ASSESSMENT ORDER AS UNDER:- IN THE CASE OF INDEPENDENT MEDIA (P) LTD. 210 TAXM ANN 14 (DELHI) (2012) THAT CAME UP BEFORE THE HON'BLE HIGH COURT, DELHI WHERE IT WAS REPORTED BY THE INVESTIGATION WING THAT THE ASSESSEE COMPANY RECEIVED SHARE CAPITAL FROM THOSE PERSONS WHO HAD GIVEN STATEMENTS BEFORE INVESTIGATION WING THAT THEY WERE ENTRY PROVIDERS GIVING ACCOMMODATION ENTRIES AFTER RECEIV ING CASH AND AFTER CHARGING THEIR COMMISSION .... IN THE CASE UNDER APPEAL THERE WAS NO REPORT FROM T HE INVESTIGATION WING ALLEGING THAT THE APPELLANT HAD RECEIVED SHARE CAPITAL FROM THOSE PERSONS WHO HAD GIVEN STATEMENTS BEFORE INVESTIGATION WING THAT THEY WERE ENTRY PROVIDERS GIVING ACCOMMODATION ENTRY AFTER RECEIVING CASH AND AFTER CHARGING THEIR COMMISSION. IN THE CASE OF COMMISSIONER OF INCOME TAX-IV, NEW DELHI US FOCUS EXPORTS PVT LTD ITA NO. 218/2012 (HE-DELHI ) ORDER DATED 16/09/2014 THERE WAS A BIG DIVERGENCE ON THE ASPECT OF PAN DETAILS, INCOME TAX RETURNS, E TC, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WAS POINTEDLY ASKED TO PROVIDE DETAILS VIDE NOTE SHEET ENTRY DATED 20TH JULY, 2007, ON THE BUSINESS ACTIVI TIES CARRIED OUT DURING THE YEAR; DETAILS OF THE SHARE C APITAL RAISED DURING THE YEAR; DETAILS OF THE INVESTMENT M ADE 40 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . DURING THE YEAR; DETAILS OF THE LOANS AND ADVANCES MADE DURING THE YEAR; JOB WORK INCOME DURING THE YEAR; SHAREHOLDING PATTERN, COPY OF ALL ACCOUNTS OF THE COMPANY; LIST OF BANK ACCOUNTS OF DIRECTORS; AND; A NOTE JUSTIFYING THE EXPENSES. THEREAFTER, THE ASSES SEE DID FILE SOME DETAILS BUT THEY WERE NOT EXHAUSTIVE/ COMPLETE. FOR EXAMPLE, THE DETAILS OF ACCOUNTS RECE IVED ON ACCOUNT OF SHARE PREMIUM WERE NOT FURNISHED ALON G WITH THE DETAILS OF SHARE CAPITAL, AND THE ADDRESS AND PAN NUMBERS WERE NOT PROVIDED FOR ALL PARTIES. IN THE APPELLANT'S CASE THE APPELLANT HAD FILED ALL THE DETAILS THAT WERE CALLED FOR. THERE IS NO ALLEGATION MADE BY THE AO THAT THERE WAS ANY DIVERGENCE IN PAN DETAILS OR THAT THE APPELLANT HAD NOT FILED DET AILS OF THE BUSINESS ACTIVITIES CARRIED OUT DURING THE Y EAR; DETAILS OF THE SHARE CAPITAL RAISED DURING THE YEAR ; DETAILS OF THE INVESTMENT MADE DURING THE YEAR; DETAILS OF THE LOANS AND ADVANCES MADE DURING THE YEAR; JOB WORK INCOME DURING THE YEAR; SHARE HOLDIN G PATTERN, COPY OF ALL ACCOUNTS OF THE COMPANY; LIST OF BANK ACCOUNTS OF DIRECTORS; AND, A NOTE JUSTIFYING THE EXPENSES. CONTRARY TO THE CASE RELIED UPON BY THE A O, THE APPELLANT HAD FILED COMPLETE DETAILS OF AMOUNTS RECEIVED ON ACCOUNT OF SHARE PREMIUM ALONG WITH THE DETAILS OF SHARE CAPITAL AND PAN NUMBERS AND ADDRESSES OF THE INVESTORS. IN THE RELIED UPON CASE THERE WAS AN UNAMBIGUOUS, ASSERTIVE AND DECISIVE FINDING THAT THE ASSESSEE HA D FAILED TO COOPERATE AND FURNISH THE DETAILS. SUMMON S U/S 131 OF THE ACT WERE ISSUED TO THE TWO DIRECTORS OF THE COMPANY BUT THE SAME WERE NOT COMPLIED WITH. IN THE CASE UNDER APPEAL THERE ARE NO ALLEGATIONS OR FINDINGS THAT THE APPELLANT HAD FAILED TO COOPERATE 41 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . AND TO FURNISH THE DETAILS. THERE IS ALSO NO ALLEGATION OR FINDING THAT ANY SUMMONS U/S 131 OF THE ACT OR A NY NOTICE ISSUED BY THE AO TO THE COMPANY OR ITS DIREC TORS WAS NOT COMPLIED WITH. IN THE RELIED UPON CASE, THE INVESTOR HAD GIVEN STATEMENT UNDER OATH ADMITTING THAT IT HAD RECEIVED CASH FROM THIRD PARTIES AND THAT THE SAID CASH WAS DEPOSITED IN THE BANK ACCOUNTS AND CHEQUES WERE ISSUED TO THE SAME PARTIES FROM THE SAID BANK ACCOU NT. IT WAS FURTHER ADMITTED THAT THIS ENTRY PROVIDING ACTIVITY WAS CARRIED ON BY CHARGING A COMMISSION @ 25 PAISE. IN THE CASE UNDER APPEAL THERE IS NO ADMISSION FROM THE INVESTOR NAMELY M/S.STL THAT THEY HAD RECEIVED CASH FROM THE APPELLANT IN 'LIEU OF GIVING CHEQUES TO TH E APPELLANT' TOWARDS SHARE CAPITAL. OBVIOUSLY, THERE IS NO ADMISSION TO PROVIDING ACCOMMODATION ENTRY OR OF CHARGING ANY COMMISSION IN THAT REGARD. CONTRARY TO THE FACTS OF THE RELIED UPON CASE, THE APPELLANT IS SEEN TO HAVE FURNISHED COMPLETE DETAILS, EXTENDED FULLEST COOPERATION DURING THE COURSE OF SEARCH, POST SEARCH ENQUIRES AND ASSESSMENT PROCEEDINGS. THE APPELLANT DID NOT TRY TO BLOCK OR OBSTRUCT ENQUIRIES AND COMPLIED WITH ALL NOTICES AN D SUMMONS. IN COMPARISON TO THE APPELLANT, THE RELIED UPON COMPANY HAD NEITHER EXPORTED ANY GOODS NOR HAD RECEIVED ANY EXPORT ORDERS. IT HAD CLAIMED TO HAVE DONE NOMINAL FABRICATION ON JOB WORK BASIS. THE INCOME DECLARED IN THE RELEVANT YEAR WAS ONLY RS. 10,880/- . THEREFORE, THERE WAS HARDLY ANY BUSINESS ACTIVITY UNDERTAKEN BY THE RESPONDENT ASSESSEE IN THE FIRST TWO YEARS. 42 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THE APPELLANT HAD A PROVEN TRACK-RECORD. THE PROMOT ERS HAD OVER 30 YEARS OF SUCCESSFUL ENTREPRENEURSHIP. T HE APPELLANT HAD BEEN GRANTED CREDIT-RATING OF 'A+' BY CREDIT-RATING AGENCIES LIKE CRISIL RATINGS, INDIA RATING AND RESEARCH- FITCH GROUP ETC. THE APPELLANT HAD BEEN GRANTED VARIOUS CREDIT FACILITIES LIKE TERM LOANS, WORKING CAPITAL LOANS, GUARANTEE LIMITS ETC OF MORE THAN RS. 420 CRORES FROM A CONSORTIUM OF PUBLIC SECTOR A ND PRIVATE SECTOR BANKS. IN COMPARISON TO THE APPELLAN T, THE RELIED UPON COMPANY DID NOT HAVE ANY TRACK RECO RD. ITS PROMOTERS WERE UNKNOWN. NO DUE DILIGENCE IN THE FORM OF CREDIT RATING OR APPRAISAL WAS DONE BY ANY BANK OR CREDIT RATING AGENCY. IN THE RELIED UPON CASE TH E INVESTORS WERE NOT ANGEL INVESTORS BUT WERE ENTRY PROVIDERS. IN THE APPELLANT'S CASE THE INVESTOR WAS A COMPANY PROMOTED BY AKULA ENERGY WHO ARE REPUTED TO BE AMONG THE LARGEST PRIVATE EQUITY/ANGEL INVESTORS. IN THE CITED CASE. THE SHARE SUBSCRIBERS MERELY ROT ATED CASH THAT WAS DEPOSITED IN THE BANK ACCOUNTS BEFORE ISSUE OF CHEQUES FOR SHARES AND THE SHARE SUBSCRIBE RS DID NOT HAVE THERE ON PROFIT MAKING APPARATUS AND W ERE NOT INVOLVED IN ANY BUSINESS ACTIVITY. FURTHER, THE RESPONDENT ASSESSEE DID NOT GIVE ANY DIVIDEND OR INTEREST TO THE SAID SHARE SUBSCRIBERS. . IN THE CASE OF THE APPELLANT, NO CASH WAS DEPOSITED IN THE BANK ACCOUNTS OF THE SHARE SUBSCRIBERS. THE SHARE SUBSCRIBERS HAVE THERE ON PROFIT MAKING APPARATUS A ND BUSINESS ACTIVITY. THE SHARE SUBSCRIBERS HAD RAISED FUNDS FROM THERE ON INDEPENDENT CREDIBLE SOURCES. T HE APPELLANT HAD BEEN REGULARLY PAYING DIVIDEND TO THE SHARE SUBSCRIBERS AS PER DETAILS GIVEN ABOVE. 43 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THE AO HAS ALSO PLACED RELIANCE ON THE JUDGMENT GIV EN IN THE CASE OF COMMISSIONER OF INCOME TAX VERSUS NR PORTFOLIO PRIVATE LIMITED, 206 (2014) DLT 97. IN THE CITED CASE, THE BOGUS SHARE CAPITAL HAD COME FROM PERSONS WHO WERE KNOWN TO BE ENTRY OPERATORS. IN THE APPELLANT'S CASE THE SHARE CAPITAL HAS COME FRO M WORLD RENOWNED ENTITIES LIKE AKULA ENERGY. IN THE CITED CASE, VERIFICATION OF THE SHAREHOLDERS COULD NOT BE DONE AS THE SUMMONS ISSUED TO THEM HAD BY AN D LARGE REMAINED UNCOMPLIED FOR WANT OF CORRECT ADDRESSES. IN THE APPELLANT'S CASE, ALL THE NOTICES WERE SEEN TO HAVE BEEN SERVED AND VERIFICATION OF SHAREHOLDERS (INCLUDING FOREIGN SHAREHOLDERS) WAS DONE. THE OBSERVATION OF THE HON'BLE COURT REGARDING DOCT RINE OF 'SOURCE OF SOURCE' OR 'ORIGIN OF ORIGIN' HAS BEE N MADE IN THE LIGHT OF THE FACTUM OF THE RELIED UPON CASE WHERE ALMOST ALL THE 31 SHAREHOLDERS WERE UNTRACEABLE OR UNAVAILABLE FOR VERIFICATION. ONLY UNDER SUCH LIKE CIRCUMSTANCES LOOKING INTO SOURCE OF SOURCE OR ORIG IN OF ORIGIN WAS WARRANTED. THE HON'BLE COURT HAD CLARIFIED AS UNDER: HOWEVER, WHEN THERE IS SURROUNDING EVIDENCE AND MATERIAL MANIFESTING AND REVEALING INVOLVEMENT OF THE ASSESSEE IN THE TRANSACTION' AND THAT IT WAS NOT ENTIRELY AN ARM'S LENGTH TRANSACTION, RESORT OR RELIANCE TO THE SAID DOCTRINE MAY BE COUNTERPRODUCTIVE AND CONTRARY TO EQUITY AND JUSTICE. 44 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . IN THE APPELLANT'S CASE, THE SHAREHOLDERS WERE AVAILABLE AND WERE VERIFIED. THEREFORE, THE 'SURROUNDING EVIDENCE AND MATERIAL REVEALED THAT IT WAS ENTIRELY AN ARM'S LENGTH TRANSACTION BETWEEN THE APPELLANT AND BONA-FIDE RENOWNED INVESTORS, HENCE THERE WAS NO NE ED TO RESORT TO LOOK INTO SOURCE OF SOURCE OR ORIGIN O F ORIGIN. THE AO HAS ALSO PLACED RELIANCE ON CERTAIN JUDICIAL DECISIONS IN SUPPORT OF CERTAIN PREPOSITIONS GIVEN AT SERIAL NO. 5.13.(A) TO (0) ON PAGE 29 TO 34 OF THE ASSESSMENT ORDER. THE APPELLANT AND THE LD. ARS HAV E ELABORATELY AND COMPREHENSIVELY DEALT WITH EACH PREPOSITION AND CASE LAW IN THE WRITTEN SUBMISSION FILED DURING THE APPELLATE PROCEEDINGS. IT IS OBSER VED THAT MOST OF THE PREPOSITIONS AND CASE LAWS ARE REPEATED OR RELATE TO CASES WHERE BOGUS SHARE CAPIT AL OR SHARE PREMIUM OR SHARE APPLICATION MONEY WAS INTRODUCED AS ACCOMMODATION ENTRIES THROUGH THE CONDUITS OF ENTRY OPERATORS. SINCE THE FACTS OF THE APPELLANT CASE ARE ENTIRELY DIFFERENT, THOSE PREPOS ITIONS DO NOT HOLD GOOD IN THE CASE OF THE APPELLANT. NONE THE LESS, THE CASE OF MAJOR METALS LTD AND OM VINYLS PVT LTD NEED TO BE EXAMINED. IN THE CASE OF MAJOR METALS LTD, THE ASSESSEE HAD APPROACHED THE SETTLEM ENT COMMISSION U/S 245C(1) OF THE IT ACT. THE HON'BLE SETTLEMENT COMMISSION HAD PASSED AN ORDER U/S 245D(4) OF THE ACT WHEREIN THE INCOME OFFERED BY TH E ASSESSEE WAS SUBSTANTIAL ENHANCED, THE PENALTY U/S 271(1)(C) WAS IMPOSED AND NO IMMUNITY FROM PROSECUTION WAS GRANTED. THUS, THE MATTER BEFORE THE HON'BLE MUMBAI HIGH COU RT 45 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . WAS OF JUDICIAL REVIEW OF POWERS OF HON'BLE ITSC. I N THE INSTANT APPEAL, WE ARE NOT QUESTIONING THE POWERS O F THE HON'BLE ITSC. THEREFORE, THE RATIO LAID DOWN IN THE RELIED UPON CASE IS NOT APPLICABLE AND RELEVANT ON THE FAC TS OF APPELLANT'S CASE. THE CASE OF OM VINYLS PVT LTD WAS WHERE THE ASSESSE E HAD FILED A CIVIL WRIT PETITION AGAINST THE RE OPEN ING OF ITS ASSESSMENT FOR ASST YEAR 2007-08 U/S 148 OF THE I T ACT. THE REASONS IN SUPPORT OF THE IMPUGNED NOTICE WHICH ARE FURNISHED TO THE PETITIONER READS AS 'UNDER: '1. DURING THE COURSE OF SEARCH AND SEIZURE CARRIED ACTION OUT ON 01.10.2013 IN THE CASE OF SHRI PRAVEE N KUMAR JAIN GROUP, IT WAS ASCERTAINED THAT IT WAS ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES AND ONE OF THE BENEFICIARIES OF SUCH ACCOMMODATION ENTRY BY WAY OF SHARE CAPITAL, WAS M/S OM VINYLS PVT. LTD. THE ACCOMMODATION ENTRY CUMULATIVELY AMOUNTING TO RS.120, 00, 0001 HAS BEEN CONFIRMED BY ENTRY PROVID ER MR. PRAVEEN KUMAR JAIN DURING THE SEARCH US BOGUS ACCOMMODATION ENTRIES PROVIDED TO THE BENEFICIARY ASSESSEE COMPANY. 2. ON THE BASIS OF STATEMENT RECORDED DURING THE CO URSE OF POST SEARCH OPERATION, THE FOLLOWING WAS INTER-A LIA ESTABLISHED: 1. SHRI. PRAVEEN KUMAR JAIN HAS INDULGED IN PROVIDING 46 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ONLY ACCOMMODATION ENTRIES AND HAS NOT CARRIED OUT ANY GENUINE BUSINESS. 2. BOOKS OF ACCOUNT OF ALL SHELL COMPANIES ARE UNDER THE CONTROL OF SHRI PRAVEEN KUMAR JAIN. 3. THERE IS NO PLACE FROM WHERE ANY GENUINE BUSINESS ACTIVITY IS CARRIED OUT. 4. IN VIEW OF THE ABOVE FACTS AND THE MATERIAL AVAILABLE ON RECORD, IT IS CLEAR THAT THE ACCOMMODATION ENTRY OF SHARE CAPITAL (SHARE APPLICATION/ INVESTMENTS) CUMULATIVELY AMOUNTING TO RS.120, 00, 000/ INTRODUCED DURING THE FINANCIAL YEAR 2006-07 RELEVANT TO A. Y. 2007-08 IN THE BOOKS OF ACCOUNTS OF M/S OM VINYLS PVT LTD IS NON GENUINE AND A BOGUS ACCOMMODATION ENTRY. IN THE APPELLANT'S CASE ISSUE INVOLVED IS NEITHER- REOPENING U/ S 148 OF THE I. T. ACT NOR HAVING RECEIVED SHARE CAPITAL FROM ANY ADMITTEDLY ACCOMMODATION ENTRY PROVIDER. ON ACCOUNT OF THE FACTS OF THE CITE D CASE BEING ENTIRELY DIFFERENT FROM THE APPELLANT'S CASE, THE RATIO LAID DOWN IN THE RELIED UPON CASE CANNOT BE APPLIED TO THE APPELLANT'S CASE. ON PAGE 27 OF THE ASSESSMENT ORDER THE AO HAS STATED THAT 'THE CASE OF HUGE PREMIUM CHARGED BY TH E ASSESSEE ON ALLOTMENT OF SHARE IS ALSO HIT BY THE PROVISIONS OF SECTION 56(1) OF THE IT ACT. ADDITION ALLY/ ALTERNATIVELY, THE AO HAS ALSO REFERRED TO SECTION 56(2) (VII A) AND 56(2) (VIIB) OF THE IT ACT. SEC. 56(1) MERELY STATES ABOUT THE SCOPE OF THE HEAD OF INCOME. THE S AID SECTION NOWHERE STATES THAT SHARE PREMIUM OR ANY OT HER RECEIPT/ INCOME WOULD BE HIT BY THE PROVISIONS OF S EE 47 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 56(1) OF THE IT ACT. THE APPELLANT HAD RIGHTLY POINTED OUT THAT THE RELEVANT PROVISION THAT REGULATED THE PRICE ON WHIC H A COMPANY WOULD ISSUE ITS SHARES IS CONTAINED IN SEC. 56(2)(VIIB) OF THE ACT. IT IS ALSO A FACT THAT THE SAID PROVISION WAS NOTIFIED BY THE CBDT WIDE NOTIFICATION DATED 29.11.2012 AND THE SAID PROVISION WAS TO COME INTO EFFECT W.E.F. A.Y. 2013-14. THE APPELLANT HAD CORRECTLY STATED THAT PROVISIONS OF SEC. 56(2)(VIIB ) WOULD NOT BE RELEVANT WHILE FRAMING THE APPELLANT'S ASSESSMENT FOR A.YS PRIOR TO A.Y 2013-14. THE APPELLANT HAD SUBMITTED FOLLOWING ADDITIONAL FACTS/ PREPOSITIONS:- (I) PREMIUM CHARGED BY A COMPANY IS ADDED TO THE RESERVES OF THE COMPANY. HENCE THE SHARE HOLDER WHO PAYS THE PREMIUM, ALSO BECOMES ENTITLED TO THE ENHANCED RESERVES OF THE COMPANY. (II) IS CHARGING HIGH PREMIUM IN THE INTEREST OF THE COMPANY? OBVIOUSLY, CHARGING HIGHER PREMIUM IS IN THE INTEREST OF COMPANY AS IT STRENGTHENS THE FINANCIAL HEALTH OF THE COMPANY. ALSO, IT ACTS AS AN ATTRACTION TO FUTURE PROSPECTIVE INVESTORS. (III) SHARE PREMIUM IS A REVENUE RECEIPT OR CAPITAL RECEIPT? VERY OBVIOUSLY, SHARE PREMIUM LIKE SHARE CAPITAL IS A CAPITAL RECEIPT. SINCE SHARE PREMIUM IS A CAPITAL RECEIPT, THE SAME CANNOT BE PER-SE 48 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . BROUGHT TO TAX. THIS VIEW FINDS SUPPORT FROM FOLLOWING CASE LAWS.- - CIT US. ALLAHABAD BANK LTD. [1969J 73 ITR 745 (SC) - CIT US. VACUUM OIL CO. [1966J 59 ITR 685 (SC) - PUNJAB STATE INDUSTRIAL CORPORATION LTD. US. CIT [1 997J 225 ITR 792 (SC) - BROOKE BOND INDIA LTD., V S. CIT [1997J 225 ITR 798 (SC) - ACIT VS. OM OILS AND ALL SEEDS LTD. [1985J 152 ITR 552 (DEL.) (HC) - CIT US. KRISHNARAM BALDEO BANK (P) LTD. [1983J 144 ITR 600 (MP HC) - VODAFONE INDIA SERUICES PRIVATE LIMITED US. UOI [20 14J 368 ITR 1 (BOM HC) WHICH WAS LATER ADOPTED BY THE UOI AND NO FURTHER APPEAL WAS FILED VIDE PRESS RELE ASE DATED 28.01.2015. (IV) IN A.YS 2007-08 AND 2008-09 THERE WAS NO MENTI ON OF SHARE PREMIUM IN SECTION 68 OF THE ACT. BY INSERTING THE AMENDMENT IN FINANCE ACT 2012, THE LEGISLATURE BROUGHT SHARE PREMIUM IN THE AMBIT OF SECTION 68 W.E.F 01.04.2013. THIS REAFFIRMS THE APPELLANT'S CONTENTION THAT PRIOR TO 01.04.2013, SHARE PREMIUM WAS NOT UNDER THE AMBIT OF SECTION 68. IN THE RELEVANT ASSESSMENT YEARS, THE OBLIGATION OF 49 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THE ASSESSEE COMPANY WAS ONLY TO SHOW ITS' 'SOURCE' AND NOT 'SOURCE'S SOURCE'. THE APPELLANT COMPANY HAD DULY DISCHARGE ITS' ONUS OF SHOWING THE 'SOURCE' AS HAVING COME FROM M/S PIL AND INDIAN COAL AGENCY. THE AO HAS ADMITTED THE 'SOURCE' OF THE APPELLANT'S FUNDS. THE AO HAS ILLEGALLY MADE THE ADDITIONS IN THE IMPUGNED ASSESSMENT ORDER BY QUESTIONING THE 'SOURCE'S SOURCE' BY QUESTIONING THE SOURCES OF M/ S STL. (V) EVEN AFTER THE AFORESAID AMENDMENT, THE SHARE CAPITAL AND SHARE PREMIUM RECEIVED FROM NON- RESIDENT ENTITIES AND FROM WELL REGULATED SHARE HOLDER ENTITIES OR FROM VENTURE CAPITALISTS ETC HAS BEEN KEPT OUT OF THE AMBIT OF SECTION 68. M/ S STL IS A MAURITIUS BASED NON-RESIDENT ENTITY AND IT IS PROMOTED BY WELL REGULATED AKULA ENERGY GROUP WHICH IS WORLD RENOWNED PRIVATE EQUITY INVESTORS, VENTURE CAPITALISTS AND ANGEL INVESTORS. THEREFORE, THE SHARE CAPITAL AND SHARE PREMIUM RECEIVED FROM M/S STL WERE NOT COVERED EVEN BY THE AMENDED PROVISIONS OF SECTION 68 THAT BECAME EFFECTIVE FROM 1.4.2013. (VI) TAKING THE FACT OF THIS AMENDMENT AS THE MANIFESTATION OF INTENTION OF LEGISLATURE; IT IS EVIDENT THAT THE. LEGISLATURE ALWAYS WANTED TO KEEP NON- RESIDENT ENTITIES OR WELL REGULATED PRIVA TE EQUITY INVESTORS, VENTURE CAPITALISTS AND ANGEL INVESTORS OUT OF THE AMBIT OF SECTION 68. THE FACTS AND PREPOSITIONS AS PUT FORTH BY THE 50 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . APPELLANT ARE TRUE, LOGICAL AND ARE BASED ON SOUND LEGAL FOUNDATIONS. THE APPELLANT HAS ALSO RELIED UPON THE FOLLOWING CASE LAWS IN SUPPORT OF ITS CONTENTIONS:- TAXABILITY OF SHARES ISSUED AT SHARE PREMIUM DELHI HC 1. COMMISSIONER OF INCOME TAX VS. ANSHIKA CONSULTANTS PVT. LTD. HIGH COURT OF DELHI, (2015) 93 CCH 0016 DEL HC. 2. ADDITIONAL COMMISSIONER OF INCOME TAX VS. OM OILS & OIL SEEDS EXCHANGE LTD. HIGH COURT OF DELHI, (1985) 152 ITR 0552 : (1984) 18 TAXMAN 0337 1ST SEPTEMBER, 1983, ITAT MUMBAI. 3. GREEN INFRA LTD. VS. INCOME TAX OFFICER ITAT, BOMBAY TRIBUNAL (G) [2013] 145 ITD 240 (MUMBAI - TRIB.) / [2014] 159 TTJ 728 (MUMBAI - TRIB.) 4. KAMDHENU STEEL & ALLOYS LIMITED V. CIT [2012] 19 TAXMANN.COM 26, (DELHI), 5. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. REAL TIME MARKETING (P) LTD. REPORTED IN 306 ITR 55 AND CIT VS. VALUE CAPITAL SERVICES LTD. REPORTED IN 307ITR 334 6. IN THE CASE OF LOVELY EXPORTS PRIVATE LIMITED V. CIT [2008] 216 CTR 195 SC, 7. HONBLE SUPREME COURT IN THE CASE OF CIT VS. 51 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . STELLAR INVESTMENT LTD. REPORTED IN 251 ITR 263. 8. CASE OF CIT VS. PEOPLES GENERAL HOSPITAL LTD., REPORTED IN 356 ITR 65 (MP). IN FACT, SIMILAR VIEW HAS ALSO BEEN EXPRESSED IN THE FOLLOWING CASES: I. 350 ITR 220 (ALL) CIT VS. JAY DEE SECURITIES AND FINANCE LTD. II. 350 ITR 222 (ALL). CIT VS. MISRA PRESERVERS (P) LTD. III. 361 ITR 220 (DEL) CIT VS. KAMDHENU STEEL AND ALLOYS LTD. IV. 320 ITR 619 BHAV SHAKTI STEEL MINES (P). LTD. VS. CIT. V. ITA.NO. 1497/2010, .1518/2010 (DEL) CIT VS. DERBY OVERSEAS (P) LTD. VI. ITA.NO. 904/2010 (DEL) CXT VS. DHAWAN JEWELLERS (P) LTD. VII. 329 ITR 110 (DEL) SARTHAK SECURITIES CO. P. LTD. VS. ITO. VIII. 205 ITR 98 (DEL) CIT VS. SOPHIA FINANCE LTD. IX. 361 ITR 195 (DEL.) CIT VS. NIPUAN AUTO (P) LTD. AFTER CRITICALLY EXAMINING THE ASSESSMENT RECORDS, THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT, THE ARGUMENTS PUT FORTH BY THE LD ARS, THE RELEVANT STATUTORY PROVISIONS AND THE RELEVANT CASE LAWS IT IS OBSERVED THAT THE APPELLANT COMPANY WAS 52 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ENGAGED IN BONA-FIDE BUSINESS ACTIVITIES, WAS HAVING DIVERSE BUSINESS INTERESTS AND WAS HAVING IMPECCABLE TRACK RECORD OF PERFORMANCE, GROWTH AND REWARDING THE SHARE HOLDERS THROUGH LIBERAL BONUS ISSUES AND REGULARLY PAYING SUBSTANTIAL AMOUNTS AS DIVIDEND. THE APPELLANT WAS CALLED UPON TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS AND GENUINE OF THE TRANSACTIONS FIRSTLY BY THE INVESTIGATION WING AND LATER BY THE AO. IT IS CONFIRMED FROM THE RECORDS THAT THE APPELLANT HAD FULLY DISCHARGED THE INITIAL ONUS CASTE UPON THE APPELLANT BY FURNISHING ALL THE RELEVANT DETAILS SU CH AS NAME OF THE PARTY, ADDRESS OF THE PARTY ,CONFIRMATION FROM THE PARTY; EVIDENCE THAT THE MONEY HAD COME THROUGH BANKING CHANNELS, COPY OF BANK STATEMENTS SHOWING RELEVANT TRANSACTIONS, SOURCE FROM WHERE THE INVESTMENT AMOUNT HAD ORIGINATED, COPY OF BALANCE SHEETS AND PROFIT & LOSS ACCOUNTS FOR RELEVANT PERIODS, COPY OF INCOME TAX RETURNS AND PAN DETAILS WHEREVER REQUIRED, COPIES OF BOARD RESOLUTIONS, COPIES OF ROC'S RECORDS, COPIES OF CORRESPONDENCE WITH RBI ETC. AFTER RECEIVING THE INFORMATION, DOCUMENTS AND DETAILS THE INVESTIGATION WING AND THE AG CONDUCTED FURTHER INQUIRIES. IN THE CASE OF M/S STL, MAURITIU S INVESTMENT HAD COME AS FDI THROUGH THE RESERVE BANK OF INDIA AND ALL REGULATORY COMPLIANCES WERE COMPLETED. HOWEVER, INQUIRIES WERE ALSO GOT CONDUCTED THROUGH THE FT & TR DIVISION. IN RESPONSE, THE MAURITIUS REVENUE AUTHORITIES HAD SENT THE DETAILS OF NAME AND ADDRESS OF THE 'COMPANY, NAME AND ADDRESS 53 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . OF SHARE HOLDERS AND DIRECTORS OF THE COMPANY FROM THE DATE OF INCORPORATION TILL 03.06.2010 COPIES OF THE REGISTERS OF SHARE HOLDER, REGISTERS OF DIRECTO R, BALANCE SHEETS, PROFIT AND LOSS ACCOUNTS, AND SCHEDULES FOR EACH YEAR WERE DULY SENT FOR THE PERIOD ENDING ON 31.03.2004 TO 03.06.1010. THE SAID BALANCE SHEETS AND PROFIT AND LOSS ACCOUNT WERE DULY AUDITED BY JOSE THIBAUT. THE INVESTMENT MADE BY M/S STL, MAURITIUS IN APPELLANT COMPANY WAS DULY REFLECTED IN THE BALANCE SHEETS OF M/S STL. THE DOCUMENTS RECEIVED FROM THE MAURITIUS REVENUE AUTHORITIES CONFIRMED THE IDENTITY AND CREDITWORTHINESS OF M/S STL, MAURITIUS AND GENUINENESS OF THE TRANSACTIONS. THE MRA ALSO CONFIRMED THE 'SOURCE OF SOURCE' AS HAVING COME FROM AKULA ENERGY. THE GENUINENESS OF THE TRANSACTIONS IS FURTHER SUBSTANTIATED FROM THE FACT THAT M/S STL, MAURITIUS HAD INVESTED RS. 1,78,97,570 IN THE APPELLANT COMPANY ON 23.06.1999, RS. 9,26,430 ON 18.08.1999, RS. 4,11,64,000 ON 20.12.2003, RS. 1,27,73,410 ON 21.03.2005, RS. 2,33,67,722 ON 21.03.2005, AND RS. 3,57,80,000 ON 02.08.2006. IN FACT, THE ARS HAVE POINTED OUT THAT MAJORITY OF THE SHARE APPLICATION MONEY (I. E RS. 2,30,78,952) FOR ALLOTMENT OF SHARES ON 02.08.2006, HAD ALREADY BEEN RECEIVED IN EARLIER YEARS, AND WAS PENDING ALLOTMENT AS ON 01.04.2006. THE REASONABILITY OF SHARE PREMIUM HAS ALWAYS BEEN THE SUBJECT MATTER OF NEGOTIATIONS BETWEEN THE COMPANY AND ITS SHARE HOLDERS TILL THE AMENDMENT WAS MADE IN SECTION 56 (2) (VIIB) AND SECTION 68 OF THE IT ACT W.E.F 01.04.2013. THIS IS FURTHER SUBSTANTIATED BY THE FACT THAT WHEN 54 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . SHARES WERE ISSUED BY THE APPELLANT COMPANY ON 21.03.2005 AND ON 02.08.2006, THEN SUCH SHARES WERE ISSUED TO EXISTING SHAREHOLDERS AT THE SAME PRICE. NO DIFFERENTIAL PRICE WASCHARGED FROM ANY OF THE INVESTORS. THE INVESTMENT OF RS. 3.57 CRORES MADE BY M/S STL FULLY SATISFIES THE VARIOUS TESTS THAT HAVE BEE N AGREED UPON BY VARIOUS JUDICIAL PRONOUNCEMENTS OF THE HONOURABLE APEX COURT AND HONOURABLE HIGH COURTS. IN VIEW OF ABOVE THE ADDITION OF RS. 3,57,80,000/- MADE U/S 68 OF THE ACT BY TREATING THE SAID AMOUNT AS UNEXPLAINED CREDIT, STANDS DELETED. IN LIGHT OF THE ABOVE, THE GROUNDS NO.8, 9, 10 AND 11 STAND ALLOWED. 9. THE REVENUE IS IN APPEAL CHALLENGING THE ORDER OF LD. CIT(A) IN DELETING THE ADDITION OF RS.3,57,80,000 U NDER SECTION 68 OF THE I.T. ACT AND IN DELETING THE ADDITION IN VIOLAT ION OF RULE 46A OF THE I.T. RULES. 10. THE ASSESSEE IN THE CROSS OBJECTION HAS SUPPOR TED THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. T HE ASSESSEE ALSO MOVED APPLICATION FOR ADMISSION OF ADDITIONAL GROUN D OF CROSS OBJECTION WHICH READS AS UNDER : 55 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 1. THAT THE UNABATED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER SECTION 153A, ONLY, ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AS IT IS A SETTLED LEGA L POSITION THAT ASSESSMENT U/S 153A IS NOT A DE NOVO ASSESSMENT AND ADDITIONS HAVE TO NECESSARILY BE RESTRICTED TO INCRIMINATING MATERIAL UNEARTHED DURI NG SEARCH. 10.1. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IT IS AN ADMITTED FACT THAT DURING THE COURSE OF SEARCH NO I NCRIMINATING MATERIAL WAS FOUND SO AS TO MAKE ADDITION UNDER SEC TION 68 OF THE I.T. ACT. HE HAS SUBMITTED THAT PRIOR TO THE DATE O F SEARCH THE ORIGINAL ASSESSMENT UNDER SECTION 143(3) HAD ALREADY BEEN CO MPLETED VIDE ORDER DATED 14.12.2009. THE A.O. EXAMINED THE ISSUE OF SHARE CAPITAL AND SHARE PREMIUM AT ORIGINAL ASSESSMENT STAGE AND DID NOT MAKE ANY ADDITION. THE A.O. IN THE ORIGINAL ASSESSMENT O RDER UNDER SECTION 143(3) MADE SMALL ADDITIONS ON ACCOUNT OF DISALLOWA NCE OF DONATION, DISALLOWANCE OF REPAIR AND MAINTENANCE AND DISALLOW ANCE, DEPRECIATION AND DISALLOWANCE OF LATE DEPOSIT OF EM PLOYEE SHARE TO 56 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . P.F. HE HAS, THEREFORE, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY JUDGMENT OF THE HONBLE DELHI HI GH COURT IN THE CASE OF CIT VS. KABUL CHAWLA 380 ITR 573 AND ENTIRE ADDITION IS LIABLE TO BE DELETED. HE HAS SUBMITTED THAT THIS ISSUE HAV E BEEN DECIDED BY THE LD. CIT(A) AGAINST THE ASSESSEE MERELY BECAUSE THE MATTER IS PENDING BEFORE THE SUPREME COURT IN THE CASE OF KAB UL CHAWLA (SUPRA). HE HAS SUBMITTED THAT THE DECISION OF THE JURISDICTIONAL HIGH COURT IS BINDING ON THE INCOME TAX AUTHORITIES AND IT IS LEGAL IN NATURE AND ARISING OUT OF THE ORDER OF THE LD. CIT(A). THE REFORE, THE ADDITIONAL GROUND MAY BE ADMITTED FOR HEARING AND DISPOSED OF CROSS OBJECTION. 11. ON THE OTHER HAND, LD. D.R. OBJECTED TO THE AD MISSION OF THE ADDITIONAL GROUND OF CROSS OBJECTION. THE LD. D.R. SUBMITTED THAT FOR ADMITTING ADDITIONAL GROUND, FACTS SHOULD BE ON RECORD AND IT SHOULD BE LEGAL IN NATURE AND IT SHOULD BE RAISED B EFORE THE AUTHORITIES BELOW. THE LD. D.R. ALSO SUBMITTED THAT IN THIS CASE REFERENCE FOR EXCHANGE OF INFORMATION WAS MADE BY I NVESTIGATION WING ON 28 TH DECEMBER, 2012 AND PART INFORMATION WAS RECEIVED O N 27 TH MAY, 2015 THROUGH FT & TR CBDT, NEW DELHI WHICH IS RELATING 57 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . TO THE CREDITWORTHINESS OF THE INVESTOR COMPANY. PA NCHANAMA AND STATEMENTS WERE ALSO RECORDED DURING THE COURSE OF SEARCH. 12. IT MAY BE RELEVANT TO MENTION HERE THAT IN THE CASE OF ACIT VS. SHYAM INDUS POWER SOLUTIONS PVT. LTD., ITA.NO.3 221/2016, THE LD. D.R. REFERRED TO PAGES 8 AND 13 OF THE ASSESSME NT ORDER TO HIGHLIGHT THAT DETAILS IN RESPECT OF SHARE APPLICAT ION MONEY/SHARE PREMIUM RECEIVED FROM VARIOUS MAURITIUS BASED COMPA NIES HAVE BEEN RETRIEVED FROM THE SEIZED DOCUMENTS, HARD DISK S SEIZED AND IMPOUNDED DURING THE COURSE OF SEARCH. THE LD. D.R, THEREFORE, SUBMITTED THAT ADDITIONAL GROUND MAY NOT BE ADMITTE D. THE LD. D.R. SUBMITTED THAT PROVISIONS OF SECTION 153A ARE CLEAR AND DO NOT MANDATE REQUIREMENT OF INCRIMINATING DOCUMENTS FOR THE PURPOSE OF FINALIZATION OF ASSESSMENT OR RE-ASSESSMENT UNDER S ECTION 153A OF THE I.T. ACT. THE LD. D.R. SUBMITTED THAT THE PROVI SIONS OF TAXING STATUTE SHOULD BE CONSTRUED STRICTLY AND THE LANGUA GE OF THE STATUTE SHOULD BE READ AS IT IS. THE LD. D.R. REFERRED TO D ECISIONS OF OTHER HIGH COURTS AND SUBMITTED THAT ASSESSMENT UNDER SEC TION 153A 58 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . NEED NOT NECESSARILY BE BASED ON INCRIMINATING MATE RIAL AND RELIED UPON FOLLOWING DECISIONS : (I) EN GOPAKUMAR VS. CIT (2016) 75 TAXMANN.COM 215 (KERALA) (II) CIT VS. KESARWANI ZARDA BHANDAR SAHSON, ALLAHABAD, ITA.270 OF 2014 (ALLD.) (HCT) (III) CIT VS. ST. FRANCIS CLAY DCOR TILES 385 ITR 624 (K ERALA) (IV) CIT VS. RAJKUMAR ARORA ITA.NO.56 OF 2011 (ALLD.) (H .C.) 12.1. THE LD. D.R. THEREFORE, SUBMITTED THAT THE A DDITIONAL GROUND OF CROSS OBJECTION MAY NOT BE ADMITTED FOR H EARING. 13. LEARNED COUNSEL FOR THE ASSESSEE IN THE REJOIN DER SUBMITTED THAT AS AGAINST THE DECISION OF THE OTHER HIGH COURTS, THE DECISION OF THE JURISDICTIONAL HIGH COURT SHALL HAV E TO BE FOLLOWED BY THE AUTHORITIES BELOW AND SUBMITTED THAT ADDITIONAL GROUND BEING LEGAL IN NATURE, MAY BE ADMITTED FOR HEARING AND RE LIED UPON THE DECISION OF THE SUPREME COURT IN THE CASE OF NATION AL THERMAL POWER COMPANY LTD., 229 ITR 383. 59 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 13.1. TO COUNTER THE ARGUMENTS OF THE LD. D.R, HE HAS REFERRED TO PARA 5.2.4 OF THE ORDER OF THE LD. CIT(A) IN CAS E OF SHYAM INDUS POWER SOLUTIONS P. LTD., (SUPRA) AND SUBMITTED THAT THE LD. CIT(A) IN HIS FINDINGS HAS NOTED THAT ADDITION UNDER SECTION 68 OF THE I.T. ACT IN RESPECT OF THE AMOUNT HAS ALREADY BEEN DISCLOSED IN THE AUDITED ACCOUNTS AND INTEREST PAID THEREON. THE REASONS FOR MAKING THESE ADDITION ARE NOT EMANATING FROM ANY DOCUMENTS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. HE HAS HOWEVER, DECID ED THIS ISSUE AGAINST THE ASSESSEE BECAUSE THE LEGAL ISSUE HAS NO T BEEN SETTLED BY THE HONBLE SUPREME COURT IN THE CASE OF KABUL CHAW LA (SUPRA). LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH SO AS TO MAKE ADDITION UNDER SECTION 68 OF THE I.T. ACT A GAINST THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THA T REFERENCE MADE BY INVESTIGATION WING FOR EXCHANGE OF INFORMATION I N DECEMBER, 2012 AND PART INFORMATION RECEIVED MAY, 2015 ARE AFTER C ONCLUSION OF THE SEARCH DATED 12 TH APRIL, 2012 AND AS SUCH, THE SAME COULD NOT BE CONSTRUED AS INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE 60 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . COURSE OF SEARCH. THEREFORE, IT IS A CLEAR CASE OF MAKING ADDITIONS UNDER SECTION 153A WHEN THERE BEING NO RECOVERY OF ANY INCRIMINATING MATERIAL AGAINST THE ASSESSEE DURING THE COURSE OF SEARCH. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS WITH REGARD TO ADMISSION OF ADDITIONAL GROUND OF CROSS OBJECTION. IT IS NOT IN DISPUTE THAT THE ASSESSEE RAISED THE ABOVE ISSUE BEFORE LD. CIT(A) THAT THE ORDER OF THE A.O. IS NOT IN ACCORDANCE WITH LAW BEC AUSE HE CANNOT PASS THE ORDER UNDER SECTION 153A DENOVO AND CANNOT MAKE ANY ADDITION BECAUSE NO INCRIMINATING MATERIAL OR DOCUM ENT WERE UNEARTHED DURING THE COURSE OF SEARCH. THE LD. CIT( A) DECIDED THE LEGAL ISSUE AGAINST THE ASSESSEE BECAUSE THE DECISI ON OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA ) HAVE NOT BEEN FINALLY CONFIRMED BY THE APEX COURT. IT IS, THEREFO RE, CLEAR THAT THE ADDITIONAL GROUND IS LEGAL IN NATURE AND ARISING OU T OF THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) HAS ALSO GIVE N HIS FINDINGS THOUGH ON INCORRECT REASONS. THE FACTS ARE, THEREFO RE, ON RECORD AND DO NOT REQUIRE ANY INVESTIGATION OF THE FACTS AT TH IS STAGE. SINCE THE 61 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ISSUE IS LEGAL IN NATURE AND IS ARISING OUT OF THE ORDERS OF THE AUTHORITIES BELOW, THEREFORE, FOLLOWING THE DECISIO N OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER COMPANY LTD., (SUPRA), WE ADMIT THE ADDITIONAL GROUND OF CROSS OB JECTION FOR THE PURPOSE OF HEARING AND DISPOSAL OF THE CROSS OBJECT ION FILED BY THE ASSESSEE. 15. THE ASSESSEE HAS RELIED UPON THE DECISION OF T HE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA 380 ITR 573 IN WHICH IT WAS HELD AS UNDER : COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE A.O. WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCL OSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT 16. THE HONBLE JURISDICTIONAL DELHI HIGH COURT IN ITS SUBSEQUENT DECISION IN THE CASE OF PR. CIT VS. MEET A GUTGUTIA 395 ITR 526 (DEL.) REFERRED TO ITS EARLIER DECISION IN THE CASE OF KABUL 62 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . CHAWLA (SUPRA) AND SMT. DAYAWANTI GUPTA VS. CIT (20 16) 390 ITR 496 (DEL.), IN PARAS 69 AND 72 HELD AS UNDER : 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DECIS ION AS THE HABITUAL CONCEALING OF INCOME AND INDULGING IN CLANDE STINE OPERATIONS AND THAT A PERSON INDULGING IN SUCH ACT IVITIES CAN HARDLY BE ACCEPTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG. THESE FACTORS ARE ABSENT IN THE PRESENT CASE. THERE WAS N O JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON SURMISES AND ESTIMATES WITHO UT THERE BEING ANY INCRIMINATING MATERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRANCHISEE COMMISSION. 70. THE ABOVE DISTINGUISHING FACTORS IN DAYAWANTI G UPTA (SUPRA), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL POS ITION IN KABUL CHAWLA (SUPRA) WHICH HAS BEEN FOLLOWED NOT ONLY BY THIS COURT IN ITS SUBSEQUENT DECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COURT IS OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INV OCATION OF SECTION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BASIS AS THERE WAS NO INCRIMINATING MATER IAL QUA EACH OF THOSE AYS. CONCLUSION 72. TO CONCLUDE : (I)QUESTION (I) IS ANSWERED IN THE NEGATIVE I.E., I N FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT IS HELD THAT IN THE FAC TS AND 63 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . CIRCUMSTANCES, THE REVENUE WAS NOT JUSTIFIED IN INVO KING SECTION 153 A OF THE ACT AGAINST THE ASSESSEE IN RELATION TO AY S 2000-01 TO AYS 2003-04. 17. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT ASSESSEE FILED ORIGINAL RETURN OF INCOME ON 31 ST OCTOBER, 2007, DECLARING INCOME OF RS.7.24 CRORE. THE CASE WAS SELECTED FOR SCRUTINY A SSESSMENT AND THE A.O. COMPLETED THE ASSESSMENT UNDER SECTION 143(3) DATED 14.12.2009. THE A.O. DID NOT MAKE ANY ADDITION UNDE R SECTION 68 OF THE I.T. ACT AS REGARDS THE SHARE CAPITAL/SHARE PRE MIUM RECEIVED BY ASSESSEE IN ASSESSMENT YEAR UNDER APPEAL. IT, THERE FORE, STANDS PROVED ON RECORD THAT ON THE DATE OF SEARCH ORIGINA L ASSESSMENT HAS COMPLETED AND SUBSEQUENTLY ON 12.04.2012, NO INCRIM INATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AGAI NST THE ASSESSEE SO AS TO PROVE THAT ASSESSEE HAS RECEIVED ANY BOGUS SHARE CAPITAL/SHARE PREMIUM SO AS TO MAKE ADDITION UNDER SECTION 68 OF THE I.T. ACT. DURING THE COURSE OF HEARING ALSO NOT HING IS PRODUCED BEFORE US TO PROVE IF ANY, INCRIMINATING MATERIAL W AS FOUND DURING THE COURSE OF SEARCH AGAINST THE ASSESSEE SO AS TO MAKE THE ABOVE 64 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ADDITION. NO ASSESSMENT WAS PENDING ON THE DATE OF SEARCH AGAINST THE ASSESSEE. REFERENCE WAS MADE FOR EXCHANGE OF IN FORMATION BY INVESTIGATION WING ON 28 TH DECEMBER, 2012 AND PART INFORMATION WAS RECEIVED ON 27 TH MAY, 2015 FROM FT & TR, CBDT, NEW DELHI SUBSEQUENT TO THE CONCLUSION OF THE SEARCH. THEREFO RE, SUCH REFERENCE AND PART REPORT RECEIVED LATER ON COULD NOT BE CONS TRUED AS RECOVERY OF ANY INCRIMINATING MATERIAL AGAINST THE ASSESSEE DURING THE COURSE OF SEARCH. IT IS RECEIVED IN POST SEARCH ENQUIRY. T HE INFORMATION SUPPLIED BY MAURITIUS REVENUE AUTHORITIES PROVIDES AS TO HOW THE MAURITIUS COMPANIES HAVE INVESTED IN ASSESSEE-COMPA NY THROUGH BANKING CHANNEL WITH THEIR NAMES, ADDRESSES AND PAR TICULARS. THE INVESTMENTS ARE THROUGH BANKING CHANNEL AND NOTHING MORE WHICH COULD BE TREATED ANY INCRIMINATING MATERIAL IN NATU RE. THE A.O. IN THE ORIGINAL ASSESSMENT PROCEEDINGS ACCEPTED THE CL AIM OF GENUINE SHARE CAPITAL/PREMIUM IN ORDER UNDER SECTION 143(3) . 18. THE LD. CIT(A) REJECTED THIS GROUND OF APPEAL OF ASSESSEE BECAUSE THE DECISION IN THE CASE OF KABUL CHAWLA (S UPRA) HAS NOT BEEN CONFIRMED BY THE SUPREME COURT. THE LD. CIT(A) IS BOUND TO 65 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . FOLLOW THE DECISION OF THE JURISDICTIONAL HIGH COUR T UNLESS IT IS REVERSED BY THE SUPREME COURT. THE LD. CIT(A), THER EFORE, WAS NOT JUSTIFIED IN NOT FOLLOWING THE JUDGMENT OF THE JURI SDICTIONAL HIGH COURT. THE JUDGMENTS OF THE JURISDICTIONAL HIGH COU RT ARE BINDING ON THE INCOME TAX AUTHORITIES. LD. D.R. RELIED UPON THE DECISION OF OTHER HIGH COURTS ON THE PROPOSITION THAT EVEN IN T HE ABSENCE OF ANY INCRIMINATING MATERIAL, THE ADDITION CAN BE MADE UN DER SECTION 153A. HOWEVER, SUCH DECISIONS COULD NOT BE GIVEN PR EFERENCE AS AGAINST THE JUDGMENTS OF THE HONBLE JURISDICTIONAL HIGH COURT. THE LD. D.R. ALSO CONTENDED THAT IN THIS CASE ASSESSMEN TS HAVE BEEN MADE ON THE BASIS OF THE SEIZED DOCUMENTS, STATEMEN TS RECORDED DURING THE COURSE OF SEARCH, DISCLOSURE MADE BY ASS ESSEE AND FT & TR REPORTS. COPIES OF THE PANCHANAMA AND STATEMENTS ARE ALSO FILED ON RECORD. HOWEVER, AS NOTED ABOVE, NONE OF THE ABO VE DOCUMENTS ARE INCRIMINATING MATERIAL IN NATURE AGAINST THE AS SESSEE. THE A.O. MADE THE ADDITION UNDER SECTION 68 OF THE I.T. ACT ONLY ON THE BASIS OF FACTS ALREADY ON RECORD WHICH HAS ALSO BEEN CONS IDERED IN ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE I.T. ACT AND 66 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . CLAIM OF ASSESSEE HAS BEEN ACCEPTED BY THE A.O. PRI OR TO THE SEARCH. THEREFORE, NO ASSESSMENT WAS PENDING AGAINST THE AS SESSEE ON THE DATE OF SEARCH. THE COMPLETED ASSESSMENTS CAN BE IN TERFERED WITH BY THE A.O. WHILE MAKING ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURI NG THE COURSE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLO SED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. HOWEVER , THE DEPARTMENT HAS FAILED TO PRODUCE ANY MATERIAL TO JU STIFY THE ADDITION MADE IN ASSESSMENT UNDER SECTION 153A UNDER SECTION 68 OF THE I.T. ACT. THE RELIANCE OF THE LD. D.R. ON THE DECISION O F OTHER HIGH COURTS IS MISPLACED. 19. CONSIDERING THE ABOVE DISCUSSION, WE ARE OF TH E VIEW THAT INVOCATION OF SECTION 153A BY THE A.O. FOR ASSESSME NT YEAR UNDER APPEAL WAS WITHOUT ANY LEGAL BASIS AS THERE WERE NO INCRIMINATING MATERIAL FOUND IN SEARCH FOR ASSESSMENT YEAR UNDER APPEAL. THE ISSUE IS THEREFORE, COVERED IN FAVOUR OF THE ASSESSEE BY JUDGMENTS OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF KABUL CHAW LA AND MEETA GUT GUTIA (SUPRA). IN VIEW OF THE ABOVE, NO ADDITION CO ULD BE MADE AGAINST 67 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THE ASSESSEE OF RS.3,57,80,000 UNDER SECTION 68 OF THE I.T. ACT. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIE S BELOW AND DELETE THE ENTIRE ADDITION. 20. IN THE RESULT, ADDITIONAL GROUND OF CROSS OBJE CTION OF ASSESSEE IS ALLOWED AND THE DEPARTMENTAL APPEAL IS DISMISSED. 21. IN VIEW OF THE ABOVE FINDINGS, THAT NO ADDITIO N COULD BE MADE IN ORDER UNDER SECTION 153A OF THE I.T. ACT, T HERE IS NO NEED TO DECIDE DEPARTMENTAL APPEAL ON MERIT BUT, WE FIND IT APPROPRIATE TO DECIDE THE ISSUE ON MERIT BECAUSE IT WOULD BE COMIN G UP IN OTHER GROUP CASES ALSO. 22. THE LD. D.R. RELIED UPON THE ORDER OF THE A.O. THE A.O. MADE ADDITION UNDER SECTION 68 OF THE I.T. ACT. THE A.O. THOUGH REFERRED TO CONDITIONS OF SECTION 56 OF THE I.T. AC T IN THE ASSESSMENT ORDER BUT NO ADDITION HAVE BEEN MADE WITH REFERENCE TO SECTION 56 OF THE I.T. ACT. EVEN NO GROUNDS HAVE BEEN RAISED BY T HE REVENUE IN THE DEPARTMENTAL APPEAL UNDER SECTION 56 OF THE I.T. AC T. THE ASSESSEE HAS NOT ADDUCED THE RELEVANT EVIDENCE BEFORE THE AU THORITIES BELOW 68 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . TO PROVE THE CONDITIONS OF SECTION 68 OF THE I.T. A CT. THE LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCE UNDER RULE 46A WIT HOUT CONFRONTING THE SAME TO THE A.O. THE REFERENCE WAS MADE TO MAUR ITIUS AUTHORITIES THROUGH FT & TR DIVISION OF CBDT AND THE INFORMATIO N WAS RECEIVED THROUGH FT & TR DIVISION. IT IS SEEN FROM THE PERUS AL OF THE FINANCIAL STATEMENTS/ INCOME STATEMENT OF M/S. STL THAT COMPA NY HAS SHOWN INCOME OF ONLY 3 US $ IN ASSESSMENT YEAR UNDER APPE AL. THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN WHY THE MONEY WAS BROU GHT FROM MAURITIUS. THE ASSESSEE FAILED TO EXPLAIN THE CREDI TWORTHINESS OF THE INVESTOR AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO JUSTIFY T HE VALUATION OF THE SHARES. THE LD. D.R. RELIED UPON THE FOLLOWING DECISIONS : (I) DECISION OF SUPREME COURT IN THE CASE OF DURGA PRAS AD MORE 82 ITR 540. (II) DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. NIPUN BUILDERS AND DEVELOPERS PVT. LTD., 350 ITR 407 (DEL .) (III) CIT VS. NOVA PROMOTERS & FIN LEASE PVT. LTD., 342 I TR 169 (DEL.) (IV) N.R. PORTFOLIO PVT. LTD., VS. CIT 29 TAXMANN.COM 29 1 (DEL.) 69 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . (V) CIT VS. EMPIRE BUILDTECH PVT. LTD., 366 ITR 110 (DE L.) (VI) CIT VS. FOCUS EXPORTS PVT. LTD., 228 TAXMAN 88 (DEL .) (VII) CIT VS. MAF ACADEMY PVT. LTD., 361 ITR 258 (DEL.) (VIII) NAVODYA CASTLE PVT. LTD., VS. CIT 56 TAXMANN.COM 18 (SC). (IX) CIT VS. MANISH BUILDWELL (P) LTD., 16 TAXMAN 27 (DE L.) 22.1. THE LD. D.R, THEREFORE, SUBMITTED THAT THE L D. CIT(A) SHOULD NOT HAVE DELETED THE ADDITION ON MERITS. 23. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASS ESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW. HE HAS SUBMITTED THAT SECTION 56 IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE. NO INCRIMINATING MATERIAL WAS FOUND DURIN G THE COURSE OF SEARCH TO PROVE THAT ASSESSEE RECEIVED BOGUS SHARE CAPITAL/PREMIUM. NO ADDITIONAL EVIDENCE WAS BROUGHT BEFORE LD. CIT(A ). THEREFORE, THERE IS NO VIOLATION OF RULE 46A OF THE I.T. RULES . REFERENCE WAS MADE TO MAURITIUS AUTHORITIES AFTER SEARCH BUT NOTHING A GAINST THE ASSESSEE WAS FOUND. HE HAS SUBMITTED THAT ASSESSEE FILED VARIOUS DOCUMENTS ON RECORD TO PROVE THE IDENTITY OF THE IN VESTOR, ITS 70 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN THE MATTER, ON WHICH, NO ENQUIRY HAVE BEEN CONDUCTED BY THE A.O . AND NO MATERIAL IS PRODUCED ON RECORD TO DISPUTE THE DOCUM ENTARY EVIDENCES. M/S. STL ALSO MADE INVESTMENT IN THE ASS ESSEE COMPANY IN EARLIER YEARS WHICH HAVE BEEN ACCEPTED BY THE A. O. ASSESSEE ALSO EXPLAINED ITS TURNOVER, PROFIT AND NET WORTH UPTO A .Y. 2014-2015. THERE IS NO VIOLATION OF ANY LAWS POINTED OUT BY TH E A.O. OTHER COMPANIES HAVE ALSO MADE INVESTMENT IN ASSESSEE COM PANY WHICH HAVE NOT BEEN DISPUTED. HE HAS SUBMITTED THAT PRIOR TO AMENDMENT UNDER SECTION 68 OF THE I.T. ACT BY FINANCE ACT, 20 12 W.E.F. 01.04.2013, THERE WERE NO REQUIREMENT TO GIVE EXPLA NATION AS TO SOURCE OF THE SOURCE OF SHARE CAPITAL/PREMIUM RECEI VED BY THE ASSESSEE. CBDT IN CIRCULAR NO.2 OF 2015 DATED 30.01 .2015 ACCEPTED THIS PROPOSITION. THE AUDITED FINANCIAL STATEMENTS OF M/S. STL DISCLOSED THE AMOUNT OF INVESTMENT IN ASSESSEE COMP ANY IN RESPECTIVE YEARS. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS : 71 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . (I) CIT VS. ORISSA CORPORATION PVT. LTD., 159 ITR 78 (S C) (II) CIT VS. DWARAKADHEESH INVESTMENT PVT. LTD., 330 ITR 298. (III) CIT VS. EXPO GLOBE INDIA PVT. LTD., 361 ITR 147 (IV) CIT VS. SURESH KUMAR KAKAR 324 ITR 231 (V) CIT VS. K.C. FIBRES LTD., 187 TAXMAN 53 (DEL.) 24. LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, S UBMITTED THAT ASSESSEE PROVED IDENTITY OF THE INVESTOR, ITS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THERE FORE, LD. CIT(A) ON PROPER APPRECIATION OF FACTS, CORRECTLY DELETED THE ADDITION. 25. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE A.O. IN ORDER TO VERIFY THE TRANSACTIONS AND ALSO TO VERIFY THE CREDITWORTHINESS OF THE PERSONS WHO HAVE INVESTED AMOUNT OF SHARE CA PITAL/SHARE PREMIUM IN ASSESSEE-COMPANY, CALLED FOR EXPLANATION OF ASSESSEE BECAUSE DURING ASSESSMENT YEAR UNDER APPEAL, THE AS SESSEE COMPANY HAS RECEIVED THE AMOUNT IN QUESTION OF RS.3 ,57,80,000 ON ACCOUNT OF SHARE CAPITAL/SHARE PREMIUM FROM M/S. SP ECTRUM TECHNOLOGIES LTD., (M/S. STL), MAURITIUS. THE ASS ESSEE FILED 72 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . DETAILED REPLY BEFORE A.O. SUPPORTED BY THE RELEVAN T INFORMATION AND DOCUMENTS. ASSESSEE FILED DETAILS OF THE INVESTOR W ITH ADDRESS, DETAILS OF SHARE APPLICATION MONEY RECEIVED WITH CONFIRMATI ON OF THE INVESTOR, MODE OF RECEIPT OF MONEY, EVIDENCE OF INCOME TAX RE TURN, CONSTITUTION OF COMPANY AND CONFIRMATION LETTER REGARDING THE GE NUINENESS OF THE INVESTORS WHEREFROM RECEIPT IS SHOWN, PAN PARTICULA RS OF INVESTOR COMPANY, COPY OF THE BANK STATEMENT SHOWING RELEVAN T TRANSACTION, COPY OF FOREIGN INWARD REMITTANCE CERTIFICATE, SOUR CE FROM WHERE INVESTMENT AMOUNT HAD BEEN ORIGINATED, COPY OF THE BALANCE SHEET AND P & L A/C OF INVESTOR, COPY OF BOARD RESOLUTION AND COPIES OF ROC RECORDS. THE ASSESSEE EXPLAINED BEFORE THE AUTHORIT IES BELOW THAT SHARE CAPITAL/PREMIUM WAS SHOWN IN THE BOOKS OF ACC OUNT OF ASSESSEE AND REMAINED SUBJECT MATTER OF REGULAR ASS ESSMENT UNDER SECTION 143(3) OF THE I.T. ACT IN WHICH THE A.O. AC CEPTED THE EXPLANATION OF ASSESSEE. DURING THE COURSE OF SEARC H NO INCRIMINATING MATERIAL WAS FOUND THAT WOULD SUGGEST THAT SHARE CAPITAL OR SHARE PREMIUM WAS BOGUS OR INVESTOR WAS NOT GENUINE. THE ENTIRE AMOUNT RECEIVED FROM M/S. STL HAD COME AS FD I THROUGH THE 73 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . BANKING CHANNEL AND SUPPORTED BY BANK STATEMENTS AN D FOREIGN INWARD REMITTANCE CERTIFICATE. IT IS ALSO PROVED ON RECORD THAT M/S. STL, INVESTOR HAS INVESTED IN ASSESSEE COMPANY IN E ARLIER YEARS AS WELL WHICH HAVE BEEN ACCEPTED IN ASSESSMENT ORDERS UNDER SECTION 143(3). HOW ITS IDENTITY, CREDITWORTHINESS AND GENU INENESS OF THE TRANSACTION CAN BE DISPUTED IN THE YEAR UNDER APPEA L. THE ENQUIRY CONDUCTED BY THE INVESTIGATION WING, THE A.O. AND F T & TR DIVISION, FULLY SUPPORTED THE IDENTITY AND CREDITWORTHINESS O F THE INVESTORS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. LD. D .R, DURING THE COURSE OF HEARING, WAS DIRECTED TO PRODUCE THE DETA ILS RECEIVED FROM MAURITIUS REVENUE AUTHORITIES THROUGH FT & TR DIVIS ION. THE LD. D.R. PRODUCED (I) PEN DRIVE IN SEALED COVER AND (II ) ONE ENVELOPE IN SEALED COVER CONTAINING MAURITIUS REVENUE AUTHORITI ES REPORTS. WE HAVE PERUSED THE SAME AND FOUND THAT WHATEVER INFOR MATION WAS RECEIVED BY THE FT & TR DIVISION FROM MAURITIUS REV ENUE AUTHORITIES HAVE DISCLOSED THE NAMES OF INVESTOR COMPANY, THEIR WORTH AND THAT THEY HAVE MADE INVESTMENT IN ASSESSEE COMPANY. THE REPORT RECEIVED FROM MAURITIUS REVENUE AUTHORITIES HAVE BEEN REPROD UCED IN 74 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . IMPUGNED ORDER. M/S. STL IS AN ASSOCIATE CONCERN OF AKULA ENERGY VENTURES LLC WHO CONTRIBUTED FUNDS TO M/S. STL WHIC H IS ENOUGH TO ESTABLISH FINANCIAL STRENGTH OF INVESTOR. IN THE FI NANCIAL STATEMENT AND BALANCE SHEET OF M/S. STL PROVIDED BY MAURITIUS REVENUE AUTHORITIES, INVESTMENT IN ASSESSEE-COMPANY HAVE BE EN DISCLOSED. M/S. STL IS AN ASSOCIATE COMPANY OF PROMOTER MR. A. V. MOHAN RAO WHO HAD ALSO INVESTED IN ASSESSEE-COMPANY IN EARLIE R YEAR. THE RECORDS PRODUCED BY THE LD. D.R. IN SEALED COVER WE RE AGAIN SEALED AND RETURNED TO THE LD. D.R. THE ABOVE MATERIAL ON RECORD CLEARLY SHOWS THAT M/S. STL MADE INVESTMENT IN ASSESSEE COM PANY, HAVING SOURCE, WAS EXISTING COMPANY IN MAURITIUS AND MADE INVESTMENT THROUGH BANKING CHANNEL. IT WOULD PROVE THE IDENTIT Y OF M/S. STL LTD., ITS CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION IN THE MATTER. 26. THE LD. CIT(A) IN HIS FINDINGS FOUND THAT IN A SSESSMENT YEAR UNDER APPEAL ASSESSEE DID ALLOTTED 40 LAKHS EQ UITY SHARES TO FOUR SHAREHOLDERS INCLUDING M/S. STL LTD., ON THE SAME P RICE. DESPITE THE ISSUE WAS SAME, THE A.O. DID NOT DISTINGUISH AS TO HOW THE ISSUE OF 75 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . SHARE TO M/S. STL WERE DIFFERENT FROM ISSUE OF SHAR ES TO OTHER INVESTORS. THE A.O. DID NOT RAISE ANY OBJECTION AT THE PRICE AT WHICH SHARES HAVE BEEN ALLOTTED TO 3 OTHER INVESTORS AT T HE SAME TIME. THE ASSESSEE PRODUCED SUFFICIENT EVIDENCE ON RECORD FOR ITS ESTABLISHMENT, WHEN PRODUCTION STARTED AND FOREIGN INVESTORS MADE INVESTMENT IN COAL SECTOR INCLUDING THE ASSESSEE. T HUS FOREIGN DIRECT INVESTMENT (FDI) IN COAL SECTOR WAS ROUTED THROUGH RBI AND THERE WAS A COMPLIANCE OF THE RELEVANT PROVISIONS O F LAW. THE CONTENTION OF ASSESSEE HAS BEEN PROVED THROUGH DOCU MENTARY EVIDENCE ON RECORD AND AMOUNT OF SHARE CAPITAL/PREM IUM HAVE BEEN SHOWN IN THE BOOKS OF ACCOUNT ON WHICH RETURN WAS A LREADY FILED PRIOR TO THE SEARCH AND ACCEPTED UNDER SECTION 143(3) AFT ER EXAMINING THE MERITS OF THE CASE. THE HISTORY OF ASSESSEE-COMPANY PROVED ITS WORTH WHICH PROVED VALUE ADOPTED FOR PREMIUM IS ON SOUND BASIS. PREMIUM IS ADDED TO RESERVES, SO THE SHAREHOLDER/INVESTORS BECAME ENTITLED TO THE ENHANCED RESERVES. A.O. DID NOT BRING ANY EVID ENCE ON RECORD THAT AMOUNT IN QUESTION CAME FROM COFFERS OF ASSESS EE-COMPANY. NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH THAT IT 76 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . WAS A BOGUS INVESTMENT BY M/S. STL. THEREFORE, NO A DDITION COULD BE MADE AGAINST THE ASSESSEE. WE RELY UPON DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. KURELA PAPER MILLS LTD., 380 ITR 571. THE A.O. DID NOT MAKE ANY ENQUIRY ON THE DOCUM ENTARY EVIDENCE FILED BY THE ASSESSEE. THE ASSESSEE FILED DETAILS OF ITS TURNOVER, NET PROFIT, NET WORTH AND DIVIDEND DECLAR ED WHICH HAVE NOT BEEN DISPUTED BY THE AUTHORITIES BELOW. THESE WERE THE SUFFICIENT REASONS FOR FOREIGN INVESTOR TO MAKE INVESTMENT IN THE ASSESSEE COMPANY. THE LD. CIT(A) DISCUSSED THE ISSUE OF CRED ITWORTHINESS OF M/S. STL, MAURITIUS AND GENUINENESS OF THE TRANSACT ION IN THE MATTER AND REFERRED TO THE REPORT RECEIVED FROM MAU RITIUS REVENUE AUTHORITIES AND REPRODUCED THE SAME IN THE IMPUGNED ORDER WHICH PROVED EXISTENCE OF M/S. STL, MAURITIUS AND ITS FIN ANCIAL STRENGTH AND CREDITWORTHINESS. THE LD. CIT(A) WAS, THEREFORE , JUSTIFIED IN HOLDING THAT ASSESSEE PROVED CREDITWORTHINESS OF TH E INVESTOR AND GENUINENESS OF THE TRANSACTION IN THE MATTER. WE MA Y RELY UPON THE FOLLOWING DECISIONS : 77 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 27. CIT VS. FAIR INVESTMENT LTD., 357 ITR 146 IN W HICH IT WAS HELD THAT A.O. DID NOT SUMMON INVESTORS AND DID NOT MAKE EFFORTS. THERE IS NO FINDING THAT MATERIAL DISCLOSED WAS UNT RUSTWORTHY. THE APPELLATE AUTHORITIES RIGHTLY DELETED THE ADDITION. 28. DECISION OF SUPREME COURT IN THE CASE OF CIT V S. LOVELY EXPORTS PVT. LTD., (2008) 216 CTR 195 IN WHICH IT W AS HELD AS UNDER: IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAME S ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PRO CEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW , BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF ASSESSE E COMPANY. 29. DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KAMDHENU STEEL AND ALLOYS LTD., & ORS. 361 ITR 220 (DEL.) IN WHICH IT WAS HELD AS UNDER : ONCE ADEQUATE EVIDENCE/MATERIAL IS GIVEN, WHICH WO ULD PRIMA FACIE DISCHARGE THE BURDEN OF THE ASSESSEE IN PROVI NG THE IDENTITY 78 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . OF SHAREHOLDERS, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE SHAREHOLDERS, THEREAFTER IN CASE SUCH EVIDENCE IS TO BE DISCARDED OR IT IS PROVED THAT IT HAS CREATED EVIDENCE, THE REVENUE IS SUPPOSED TO MAKE THOROUGH PROBE BEFORE IT COULD NAIL THE ASSESSEE AND FASTEN THE AS SESSEE WITH SUCH A LIABILITY UNDER S.68; AO FAILED TO CARRY HIS SUSPICION TO LOGICAL CONCLUSION BY FURTHER INVESTIGATION AND THE REFORE ADDITION UNDER S.68 WAS NOT SUSTAINABLE. 30. DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VRINDAVAN FARMS PVT. LTD., ETC. ITA.NO.71 O F 2015 DATED 12 TH AUGUST, 2015 (DEL.), IN WHICH IT WAS HELD AS UNDER : THE SOLE BASIS FOR THE REVENUE TO DOUBT THEIR CREDITWORTHINESS WAS THE LOW INCOME AS REFLECTED IN THEIR RETURN OF INCOME. IT WAS OBSERVED BY THE ITAT THAT THE AO HAD NOT UNDERTAKEN ANY INVESTIGATION OF THE VERACIT Y OF THE DOCUMENTS SUBMITTED BY THE ASSESSEE, THE DEPARTMENT AL APPEAL WAS DISMISSED BY THE HONBLE HIGH COURT. 79 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 31. DECISION OF JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT VS. LAXMAN INDUSTRIAL RESOURCES PVT. LTD., ITA.NO.169 O F 2017 DATED 14 TH MARCH, 2017, IN WHICH IT WAS HELD AS UNDER : THE CIT(A) TOOK NOTE OF THE MATERIAL FILED BY THE ASSESSEE AND PROVIDED OPPORTUNITY TO THE AO IN REMAND PROCEEDING S. THE AO MERELY OBJECTED TO THE MATERIAL FURNISHED BUT DID N OT UNDERTAKE ANY VERIFICATION. THE CIT(A) DELETED THE ADDITION BY RELYING UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS PVT.LTD. (SUPRA) AND JUDGEMENT OF DELHI HIG H COURT IN THE CASE OF CIT VS DIVINE LEASING & FINANCE LTD. [2008] 299 ITR 268. THE ITAT CONFIRMED THE OPINION OF THE LD.CIT(A). H ONBLE HIGH COURT IN VIEW OF THE ABOVE FINDINGS NOTED THAT THE ASSESSEE HAD PROVIDED SEVERAL DOCUMENTS THAT COULD HAVE SHOWED LIGHT INTO WHETHER TRULY THE TRANSACTIONS WERE GENUINE. THE A SSESSEE PROVIDED DETAILS OF SHARE APPLICANTS I.E. COPY OF T HE PAN, ASSESSMENT PARTICULARS, MODE OF AMOUNT INVESTED THR OUGH BANKING CHANNEL, COPY OF RESOLUTION AND COPIES OF T HE BALANCE 80 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . SHEET. THE AO FAILED TO CONDUCT ANY SCRUTINY OF TH E DOCUMENT, THE DEPARTMENTAL APPEAL WAS ACCORDINGLY DISMISSED. 32. DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF EARTH METAL ELECTRIC PVT. LTD., VS. CIT DATED 30 TH JULY, 2010 IN SLP.NO.21073 OF 1999, IN WHICH IT WAS HELD AS UNDER : WE HAVE EXAMINED THE POSITION, WE FIND THAT THE SH AREHOLDERS ARE GENUINE PARTIES. THEY ARE NOT BOGUS AND FICTIT IOUS THEREFORE, THE IMPUGNED ORDER IS SET ASIDE. 33. DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIVINE LEASING & FINANCE LTD., 299 ITR 268, IN WHIC H IT WAS HELD AS UNDER : NO ADVERSE INFERENCE SHOULD BE DRAWN IF SHAREHOLDE RS FAILED TO RESPOND TO THE NOTICE BY A.O. 34. DECISION OF HONBLE M.P. HIGH COURT IN THE CAS E OF CIT VS. PEOPLES GENERAL HOSPITAL LTD., (2013) 356 ITR 65, I N WHICH IT WAS HELD AS UNDER : 81 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . DISMISSING THE APPEALS, THAT IF THE ASSESSEE HAD R ECEIVED SUBSCRIPTIONS TO THE PUBLIC OR RIGHTS ISSUE THROUGH BANKING CHANNELS AND FURNISHED COMPLETE DETAILS OF THE SHAR EHOLDERS, NO ADDITION COULD BE MADE UNDER SECTION 68 OF THE INCO ME-TAX ACT, 1961, IN THE ABSENCE OF ANY POSITIVE MATERIAL OR EV IDENCE TO INDICATE THAT THE SHAREHOLDERS WERE BENAMIDARS OR F ICTITIOUS PERSONS OR THAT ANY PART OF THE SHARE CAPITAL REPRE SENTED THE COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. IT W AS NOBODY'S CASE THAT THE NON-RESIDENT INDIAN COMPANY WAS A BOGUS OR NON-EXISTENT COMPANY OR THAT THE AMOUNT SU BSCRIBED BY THE COMPANY BY WAY OF SHARE SUBSCRIPTION WAS IN FAC T THE MONEY OF THE ASSESSEE. THE ASSESSEE HAD ESTABLISHED THE I DENTITY OF THE INVESTOR WHO HAD PROVIDED THE SHARE SUBSCRIPTION AN D THAT THE TRANSACTION WAS GENUINE. THOUGH THE ASSESSEE'S CONT ENTION WAS THAT THE CREDITWORTHINESS OF THE CREDITOR WAS ALSO ESTABLISHED, IN THIS CASE, THE ESTABLISHMENT OF THE IDENTITY OF THE INVESTOR ALONE WAS TO BE SEEN. THUS, THE ADDITION WAS RIGHTLY DELE TED. CIT V. LOVELY EXPORTS P. LTD. [2009] 319ITR (ST.) 5 (SC) A PPLIED. 82 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 35. DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. (I) DWARAKADHISH INVESTMENT P. LTD., (ITA.N O. 911 OF 2010) AND (II) DWARKADHISH CAPITAL P. LTD., (ITA.NO.913 O F 2010) (2011) 330 ITR 298 (DEL.) (HC), IN WHICH IT WAS HELD AS UNDER : IN ANY MATTER, THE ONUS OF PROOF IS NOT A STATIC O NE. THOUGH IN SECTION 68 OF THE INCOME TAX ACT, 1961, THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSES YET ONCE HE PROVES THE IDENTIT Y OF THE CREDITORS/SHARE APPLICANTS BY EITHER FURNISHING THE IR PAN NUMBER OR INCOME-TAX ASSESSMENT NUMBER AND SHOWS THE GENUI NENESS OF TRANSACTION BY SHOWING MONEY IN HIS BOOKS EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT OR BY ANY OTHER MODE, THEN THE ONUS OF PROOF WOULD SHIFT TO THE REVENUE. JUST BECAUSE THE CREDITORS/SHARE APPLICANTS COULD NOT BE FOUND AT TH E ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIGHT TO I NVOKE SECTION 68. ONE MUST NOT LOSE SIGHT OF THE FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERS ON. MOREOVER, IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT TO PRO VE THE 'SOURCE OF SOURCE'. THE ASSESSEE-COMPANY WAS ENGAGED IN THE BUSINESS 83 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . OF FINANCING AND TRADING OF SHARES. FOR THE ASSESSM ENT YEAR 2001-02 ON SCRUTINY OF ACCOUNTS, THE ASSESSING OFFI CER FOUND AN ADDITION OF RS.71,75,000 IN THE SHARE CAPITAL OF TH E ASSESSEE. THE ASSESSING OFFICER SOUGHT AN EXPLANATION OF THE ASSE SSEE ABOUT THIS ADDITION IN THE SHARE CAPITAL. THE ASSESSEE OF FERED A DETAILED EXPLANATION. HOWEVER, ACCORDING TO THE ASSESSING OF FICER, THE ASSESSEE FAILED TO EXPLAIN THE ADDITION OF SHARE AP PLICATION MONEY FROM FIVE OF ITS SUBSCRIBERS. ACCORDINGLY, T HE ASSESSING OFFICER MADE AN ADDITION OF RS.35,50,000/- WITH THE AID OF SECTION 68 OF THE ACT, 1961 ON ACCOUNT OF UNEXPLAIN ED CASH CREDITS APPEARING IN THE BOOKS OF THE ASSESSEE. HOWEVER, IN APPEAL, THE COMMISSIONER OF INCOME-TAX (APPEALS) DELETED THE AD DITION ON THE GROUND THAT THE ASSESSEE HAD PROVED THE EXISTENCE O F THE SHAREHOLDERS AND THE GENUINENESS OF THE TRANSACTION . THE INCOME-TAX APPELLATE TRIBUNAL CONFIRMED THE ORDER O F THE COMMISSIONER OF INCOME-TAX (APPEALS) AS IT WAS ALSO OF THE OPINION THAT THE ASSESSEE HAD BEEN ABLE TO PROVE TH E IDENTITY OF THE SHARE APPLICANTS AND THE SHARE APPLICATION MONE Y HAD BEEN 84 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . RECEIVED BY WAY OF ACCOUNT PAYEE CHEQUES. ON APPEAL TO THE HIGH COURT: HELD, DISMISSING THE APPEALS, THAT THE DELET ION OF ADDITION WAS JUSTIFIED. 36. DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. WINSTRAL PETROCHEMICALS P. LTD., 330 ITR 60 3, IN WHICH IT WAS HELD AS UNDER : DISMISSING THE APPEAL, THAT IT HAD NOT BEEN DISPUT ED THAT THE SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSE E-COMPANY BY WAY OF ACCOUNT PAYEE CHEQUES, THROUGH NORMAL BAN KING CHANNELS. ADMITTEDLY, COPIES OF APPLICATION FOR AL LOTMENT OF SHARES WERE ALSO PROVIDED TO THE ASSESSING OFFICER. SINCE THE APPLICANT COMPANIES WERE DULY INCORPORATED, WERE IS SUED PAN CARDS AND HAD BANK ACCOUNTS FROM WHICH MONEY WAS TR ANSFERRED TO THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES, TH EY COULD NOT BE SAID TO BE NON-EXISTENT, EVEN IF THEY, AFTER SUB MITTING THE SHARE APPLICATIONS HAD CHANGED THEIR ADDRESSES OR HAD STO PPED FUNCTIONING. THEREFORE, THE COMMISSIONER (APPEALS) AND THE 85 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . TRIBUNAL WERE JUSTIFIED IN HOLDING THAT THE GENUINE NESS OF THE TRANSACTIONS HAD BEEN DULY ESTABLISHED BY THE ASSES SEE. 37. DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VALUE CAPITAL SERVICES PVT. LTD., (2008) 30 7 ITR 334 (DEL.) (HC), IN WHICH IT WAS HELD AS UNDER : DISMISSING THE APPEAL, THAT THE ADDITIONAL BURDEN WAS ON THE DEPARTMENT TO SHOW THAT EVEN IF THE SHARE APPLICANT S DID NOT HAVE THE MEANS TO MAKE THE INVESTMENT, THE INVESTME NT MADE BY THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSE SSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOME O F THE ASSESSEE. NO SUBSTANTIAL QUESTION OF LAW AROSE. 38. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF MATERIAL ON RECORD, IT IS CLEAR THAT ASSESSEE PRODUCED SUFFICIE NT DOCUMENTARY EVIDENCE BEFORE A.O. TO PROVE THE INGREDIENTS OF SE CTION 68 OF THE I.T. ACT. THE A.O. HOWEVER, DID NOT MAKE ANY FURTHER ENQ UIRY ON THE DOCUMENTS FILED BY THE ASSESSEE. THE A.O. THUS, FAI LED TO CONDUCT SCRUTINY OF THE DOCUMENTS AT ASSESSMENT STAGE AND M ERELY SUSPECTED 86 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THE TRANSACTION BETWEEN THE INVESTOR COMPANY AND TH E ASSESSEE BECAUSE INVESTOR WAS A FOREIGN ENTITY ESTABLISHED I N MAURITIUS. EVEN THE REPLY RECEIVED FROM MAURITIUS REVENUE AUTHORITI ES PROVED THE IDENTITY OF THE INVESTOR, ITS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IT IS NOT REPORTED IF ANY, CASH WAS FO UND DEPOSITED IN THE ACCOUNT OF THE INVESTOR BEFORE MAKING INVESTMENT IN ASSESSEE COMPANY. THEREFORE, THE TOTALITY OF THE FACTS AND C IRCUMSTANCES OF THE CASE CLEARLY PROVED THAT ASSESSEE DISCHARGED ITS IN ITIAL ONUS TO PROVE THE IDENTITY OF THE INVESTOR COMPANY, ITS CREDITWOR THINESS AND GENUINENESS OF THE TRANSACTION. 39. IT MAY BE ALSO BE NOTED HERE THAT A.O. HAS REF ERRED TO PROVISIONS OF SECTION 56(2)(VIIB) OF THE I.T. ACT I N THE ASSESSMENT ORDER BUT HE DID NOT MAKE ANY ADDITION AGAINST THE ASSESS EE UNDER THIS PROVISION BECAUSE ULTIMATELY THE ADDITION IS MADE U NDER SECTION 68 OF THE I.T. ACT. NO GROUND OF APPEAL HAVE ALSO BEEN RAISED BY THE REVENUE FOR INVOKING THE PROVISIONS OF SECTION 56(2 )(VIIB) OF THE I.T. ACT AGAINST THE ASSESSEE. THE LD. CIT(A) ALSO DISCU SSED THIS ISSUE IN THE APPELLATE ORDER AND CORRECTLY FOUND THAT THE SA ID PROVISION WAS 87 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . NOTIFIED BY THE CBDT VIDE NOTIFICATION DATED 29.11. 2012, THE SAID PROVISION WOULD COME INTO EFFECT W.E.F. A.Y. 2013-2 014 I.E., FROM 01.04.2013 FOR DEALING WITH SHARE PREMIUM. OTHERWIS E, THERE WERE NO PROVISION PRIOR TO IT TO GOVERN SHARE PREMIUM. T HE CBDT IN ITS CIRCULAR NO.2/15 DATED 30.01.2015 ACCEPTED THE DECI SION OF BOMBAY HIGH COURT IN CASE OF VODAFONE INDIA SERVICES P. LT D., (SUPRA) IN WHICH IT WAS HELD THAT PREMIUM ON SHARE ISSUE WAS ON ACCOUNT OF CAPITAL ACCOUNT TRANSACTION AND DOES NOT GIVE RISE TO INCOME. THEREFORE, NO INFIRMITY HAVE BEEN POINTED IN THE OR DER OF THE LD. CIT(A) WITH REFERENCE TO PROVISIONS OF SECTION 56(I I)(VIIB) OF THE I.T. ACT. THE LD. D.R. HAS ALSO NOT POINTED OUT AS TO WHICH A DDITIONAL DOCUMENTS HAVE BEEN CONSIDERED BY THE LD. CIT(A) AT APPELLATE STAGE WHICH WERE NOT SUBMITTED BEFORE A.O. AT THE ASSESSM ENT STAGE. IN THE ABSENCE OF ANY SUBSTANTIAL POINT TO HIGHLIGHT AS TO WHICH ADDITIONAL EVIDENCES HAVE BEEN CONSIDERED AT APPELLATE STAGE, WE DO NOT FIND IF THERE IS ANY VIOLATION OF RULE 46A OF THE I.T. RULE S IN THE MATTER. THE DECISIONS RELIED UPON BY LD. D.R. WOULD NOT SUPPORT THE CASE OF THE REVENUE WHICH ARE DISTINGUISHABLE ON FACTS AND IN V IEW OF THE FACT 88 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THAT NO ENQUIRY HAVE BEEN CONDUCTED BY THE A.O. IN THIS CASE TO DISPUTE THE DOCUMENTARY EVIDENCE FILED BY THE ASSES SEE. THE LD. CIT(A) DISCUSSED ALL CASE LAWS RELIED ON BY A.O. TH E MATERIAL ON RECORD CLEARLY SUPPORT THE EXPLANATION OF ASSESSEE THAT NOT ONLY IN ASSESSMENT YEAR UNDER APPEAL BUT IN EARLIER YEARS A LSO, M/S. STL MADE INVESTMENT IN ASSESSEE COMPANY THROUGH BANKING CHANNEL SUPPORTED BY THE DOCUMENTARY EVIDENCE. THE LD. CIT( A) ON PROPER APPRECIATION OF THE EVIDENCE BEFORE HIM, CORRECTLY DELETED THE ADDITION. THEREFORE, NO INTERFERENCE IS REQUIRED IN THE FINDING OF FACT RECORDED BY THE LD. CIT(A). THE DEPARTMENTAL APPEAL HAS NO MERIT. SAME IS ACCORDINGLY DISMISSED. IN THE RESULT, DEPAR TMENTAL APPEAL IS DISMISSED. 40. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSE D AND C.O. OF THE ASSESSEE IS ALLOWED. REMAINING APPEALS 41. IN ALL REMAINING MATTERS, FACTS AND ISSUES ARE SAME. SEARCH, SEIZURE AND SURVEY ACTION UNDER SECTION 132 /133A OF I.T. ACT 89 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . WERE CONDUCTED ON 12.04.2012 IN CASES OF REMAINING ASSESSEES ALONG WITH OTHER CASES OF ARYAN SAINIK GROUP OF CASES AT RESIDENTIAL AND BUSINESS PREMISES. REFERENCE FOR EXCHANGE OF INFORM ATION WAS MADE AFTER CONCLUSION OF SEARCH. THE ASSESSEES PLEADED T HAT NO INCRIMINATING MATERIAL WAS FOUND IN SEARCH SO AS TO MAKE ANY ADDITION ON THE BASIS OF ENTRIES RECORDED IN BOOKS OF ACCOUNT ALREADY DISCLOSED TO REVENUE DEPARTMENT PRIOR TO SEARCH IN PROCEEDINGS UNDER SECTION 153A OF THE I.T. ACT. ISSUE IS COVERE D BY JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWL A (SUPRA). THE ASSESSEE PROVED CONDITIONS OF SECTION 68 OF THE I.T . ACT. LEARNED REPRESENTATIVES OF BOTH THE PARTIES BRIEFLY ARGUED THESE APPEALS AND STATED ISSUES ARE IDENTICAL AS HAVE BEEN CONSIDERED IN LEAD CASE OF M/S. SPECTRUM COAL AND POWER LTD., FOR A.Y. 2007-20 08 (SUPRA). SINCE, ISSUES ARE SAME, THEREFORE, FACTS ARE NOT ME NTIONED IN DETAIL IN REMAINING APPEALS WHICH ARE OF SAME GROUP I.E., ARYAN SAINIK GROUP ON SAME FACTS. THE REMAINING APPEALS ARE DECI DED AS UNDER. ITA.NO.6104/DEL./2016 & C.O.NO.16/DEL./2017 A.Y. 2008-2009: IN THE CASE OF M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. 90 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 42. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJEC TION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27, NEW DELHI, DATED 09.09.2016 FOR A.Y. 2008-2009. 43. THE REVENUE CHALLENGED THE DELETION OF ADDITIO N OF RS.50,43,04,900 ON ACCOUNT OF UNEXPLAINED CREDIT AS SHARE CAPITAL/SHARE PREMIUM IN VIOLATION OF RULE 46A OF I .T. RULES. THE CROSS OBJECTION IS FILED IN SUPPORT OF THE ORDER OF LD. CIT(A) IN DELETING THE ADDITION ON MERIT. THE ASSESSEE SIMILARLY RAISE D ADDITIONAL GROUND OF CROSS OBJECTION CHALLENGING THE ASSESSMEN T UNDER SECTION 153A OF I.T. ACT AND ADDITION ON MERIT AS AGAIN NO INCRIMINATING MATERIAL WAS FOUND UNEARTHED DURING THE COURSE OF S EARCH SO AS TO MAKE ASSESSMENT UNDER SECTION 153A OF THE I.T. ACT. ITA.NO.5585/DEL./2016 & C.O.NO.210/DEL./2017 A.Y. 2008-2009 IN THE CASE OF M/S. ACB INDIA LTD., NEW DELHI. 44. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJEC TION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27, NEW DELHI, DATED 09.08.2016 FOR A.Y. 2008-2009. 91 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 45. IN THE DEPARTMENTAL APPEAL, THE REVENUE CHALLE NGED THE DELETION OF ADDITION OF DISALLOWANCE UNDER SECTION 14A OF RS.18,03,188 AND DELETING THE ADDITION OF RS.146,43 ,05,175 ON ACCOUNT OF SHARE CAPITAL AND PREMIUM UNDER SECTION 68 OF THE I.T. ACT. THE ASSESSEE IN THE CROSS OBJECTION, HAS CHALL ENGED THE ORDER OF THE A.O. THAT UNABATED ASSESSMENT CAN BE INTERFERED WITH BY THE A.O. WHILE MAKING ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE CO URSE OF SEARCH AND ALSO SUPPORTED THE ORDER OF LD. CIT(A) IN DELET ING THE ADDITION. ITA.NO.5586/DEL./2016 & C.O.NO.1/DEL./2017 A.Y. 2 009-2010 IN THE CASE OF M/S. ACB INDIA LTD., NEW DELHI. 46. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJE CTION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27, NEW DELHI, DATED 09.08.2016 FOR A.Y. 2009-2010. 47. IN THE DEPARTMENTAL APPEAL, THE REVENUE CHALLE NGED THE DELETION OF ADDITION OF DISALLOWANCE UNDER SECTION 14A OF RS.81,28,581 AND IN DELETING THE ADDITION OF RS.53, 23,63,304 ON 92 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ACCOUNT OF ADDITION UNDER SECTION 68 OF THE I.T. AC T, OF THE SHARE CAPITAL AND SHARE PREMIUM. THE ASSESSEE IN THE CROS S OBJECTION, HAS SUPPORTED THE ORDER OF LD. CIT(A) IN DELETING BOTH THE ADDITION. THE ASSESSEE IN THE CROSS OBJECTION HAS ALSO RAISED ADD ITIONAL GROUND STATING THEREIN THAT UNABATED ASSESSMENT CAN BE INT ERFERED WITH BY THE A.O. WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND SUPPORTED ORDER OF LD. CIT(A) IN DELE TING ADDITION ON MERITS. ITA.NO.3221/DEL./2016 & C.O.NO.247/DEL./2016 A.Y. 2009-2010 IN THE CASE OF M/S. SHYAM INDUS POWER SOLUTIONS PVT. LTD., NEW DEL HI 48. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJEC TION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27, NEW DELHI, DATED 11.03.2016 FOR A.Y. 2009-2010. 49. IN THE DEPARTMENTAL APPEAL, THE REVENUE CHALLE NGED THE DELETION OF ADDITION OF RS.44,70,116 ON ACCOUNT OF VAT PENALTY AND IN DELETING ADDITION OF RS.4.50 CRORES ON ACCOUNT O F UNEXPLAINED CASH 93 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . CREDIT UNDER SECTION 68 OF THE I.T. ACT ON ACCOUNT OF SHARE APPLICATION MONEY/SHARE PREMIUM. 50. THE ASSESSEE IN THE CROSS OBJECTION, HAS SUPPO RTED THE ORDER OF LD. CIT(A) IN DELETING BOTH THE ADDITION. HE ALSO CHALLENGED THE ORDER OF LD. CIT(A) IN CONFIRMING THE ASSESSMEN T UNDER SECTION 153A OF THE I.T. ACT AND ADDITION BECAUSE NO INCRIM INATING MATERIAL WAS DISCOVERED PURSUANT TO SEARCH UNDER SECTION 132 OF THE I.T. ACT AND THE ORIGINAL ASSESSMENT HAD ALREADY STOOD COMPL ETED ON THE DATE OF SEARCH. ITA.NO.3222/DEL./2016 & C.O.NO.248/DEL./2016 A.Y. 2010-2011 IN THE CASE OF M/S. SHYAM INDUS POWER SOLUTIONS PVT. LTD., NEW DEL HI 51. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJEC TION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27, NEW DELHI, DATED 11.03.2016 FOR A.Y. 2010-2011. 52. IN THE DEPARTMENTAL APPEAL, THE REVENUE CHALLE NGED THE DELETION OF ADDITION OF RS.24,22,134 ON ACCOUNT OF VAT PENALTY AND IN DELETING ADDITION OF RS.33.81 CRORES ON ACCOUNT OF UNEXPLAINED 94 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . CASH CREDIT UNDER SECTION 68 OF THE I.T. ACT ON ACC OUNT OF SHARE APPLICATION MONEY/SHARE PREMIUM. 53. THE ASSESSEE IN THE CROSS OBJECTION, HAS SUPPO RTED THE ORDER OF LD. CIT(A) IN DELETING BOTH THE ADDITION. HE ALSO CHALLENGED THE ORDER OF LD. CIT(A) IN CONFIRMING THE ASSESSMEN T UNDER SECTION 153A OF THE I.T. ACT AND ADDITION BECAUSE NO INCRIM INATING MATERIAL WAS DISCOVERED PURSUANT TO SEARCH UNDER SECTION 132 OF THE I.T. ACT AND THE ORIGINAL ASSESSMENT HAD ALREADY STOOD COMPL ETED ON THE DATE OF SEARCH. ITA.NO.5587/DEL./2016 & C.O.NO.355/DEL./2016 A.Y. 2008-2009 IN THE CASE OF M/S. GLOBAL COAL & MINING PVT. LTD., NEW DELHI. 54. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJEC TION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27, NEW DELHI, DATED 14.09.2016 FOR A.Y. 2008-2009. 55. IN THE DEPARTMENTAL APPEAL, THE REVENUE CHALLE NGED THE DELETION OF ADDITION OF RS.75,00,00,116 ON ACCOUNT OF UNEXPLAINED 95 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . SHARE CAPITAL/SHARE PREMIUM UNDER SECTION 68 OF THE I.T. ACT AND IN VIOLATION OF RULE 46A OF I.T. RULES. 56. THE ASSESSEE IN THE CROSS OBJECTION, HAS SUPPO RTED THE ORDER OF LD. CIT(A) IN DELETING THE ADDITION. THE A SSESSEE ALSO RAISED ADDITIONAL GROUND OF APPEAL WHICH READS AS UNDER : 1. THAT THE UNABATED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING THE ASSE SSMENT UNDER SECTION 153A, ONLY, ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AS IT IS A SETTLED POSITION THAT ASSESSMENT U/S.. 153A IS NOT A DE NOVO ASSESSMENT AND ADDITIONS HAVE TO NECESSARILY BE RESTRICTED TO INCRIMINATING MATERIAL UNEARTHED DURING SEARCH. 57. LEARNED REPRESENTATIVES OF BOTH THE PARTIES SU BMITTED THAT ALL THE ISSUES ARE SAME IN THE REMAINING APPEA LS AS HAVE BEEN DECIDED IN THE CASE OF M/S. SPECTRUM COAL POWER LTD ., IN ITA.NO.6103/DEL./2016 AND C.O.NO.15/DEL./2017 FOR A .Y. 2007- 2008. 96 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 58. IN ALL THE ABOVE DEPARTMENTAL APPEALS AS WELL AS CROSS OBJECTIONS OF THE ASSESSEE, SIMILAR ISSUES HAVE BEE N RAISED WHICH HAVE BEEN CONSIDERED AND DECIDED IN THE CASE OF SPE CTRUM COAL POWER LTD., (SUPRA). IN SOME OF THE CROSS OBJECTION S, ASSESSEE HAS TAKEN A GROUND OF CROSS-OBJECTION IN THE CROSS-OBJE CTION THAT ASSESSMENTS ARE ILLEGAL AND BAD IN LAW UNDER SECTIO N 153A OF THE I.T. ACT BECAUSE THERE IS NO RECOVERY OF ANY INCRIMINATI NG MATERIAL DURING THE COURSE OF SEARCH SO AS TO MAKE ADDITIONS UNDER SECTION 68 OF THE I.T. ACT. HOWEVER, IN SOME OF THE CROSS OBJECTIONS AS NOTED ABOVE, ASSESSEE HAS RAISED ADDITIONAL GROUND CHALLENGING T HE ORDERS OF THE AUTHORITIES BELOW IN MAKING AND CONFIRMING THE ASSE SSMENT ORDERS UNDER SECTION 153A OF THE I.T. ACT BECAUSE THERE IS NO RECOVERY OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AGAINST THE ASSESSEE. THE ASSESSEE PLEADED THAT ALL THESE ISSUE S ARE COVERED BY THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. KABUL CHAWLA (SUPRA). IN THE CASE OF SPECTRUM COAL POWER LTD., (SUPRA), WE HAVE ADMITTED THE ADDITIONAL GROUND IN CROSS OBJECT ION BECAUSE IT IS LEGAL IN NATURE AND ARISING OUT OF THE ORDER OF THE AUTHORITIES BELOW. 97 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . THEREFORE, FOLLOWING THE SAME REASONS FOR DECISION, WE ADMIT ALL THE ADDITIONAL GROUNDS RAISED IN THE RESPECTIVE CROSS O BJECTIONS IN THE REMAINING CROSS-OBJECTIONS. THE ISSUE OF ADDITION U NDER SECTION 68 OF THE I.T. ACT IS SAME AS HAVE BEEN DECIDED IN THE LE ADING CASE OF SPECTRUM COAL POWER LTD., (SUPRA). IN SOME OF THE R EMAINING DEPARTMENTAL APPEALS, THERE ARE OTHER ISSUES INVOLV ED IN DELEING THE ADDITION UNDER SECTION 14A OF THE I.T. ACT. WE MAY NOTE THAT IN THOSE CASES THE ASSESSEE PLEADED THAT IT DID NOT INCUR AN Y EXPENDITURE TO EARN EXEMPT INCOME. NO SATISFACTION UNDER SECTION 1 4A OF THE I.T. ACT AS REQUIRED BY LAW HAS BEEN RECORDED BY THE A.O. A. O. RE-STATED ADDITIONS MADE UNDER SECTION 143(3). AS PER LD. CIT (A)S ORDER, PART DISALLOWANCES MADE SUO MOTO BY THE ASSESSEE HAVE BE EN ACCEPTED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. IT WAS ALSO F OUND THAT ASSESSEE USED OWN FUNDS FOR MAKING INVESTMENTS. LD. CIT(A) A CCORDINGLY, DELETED THE SUBSTANTIAL ADDITIONS UNDER SECTION 14A OF THE I.T. ACT. 59. IN SOME OF THE DEPARTMENT APPEALS, THERE IS AN OTHER ISSUE OF DISALLOWANCE UNDER SECTION 37(1) OF THE I.T. ON THE PENALTY UNDER VAT ACT. THE ASSESSEE PLEADED THAT ASSESSEE DID NOT CLAIM DEDUCTION 98 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ON ACCOUNT OF VAT PENALTY IN PROFIT AND LOSS ACCOUN T. THEREFORE, THE LD. CIT(A) DELETED THE ADDITION. ON GOING THROUGH T HE FINDING OF FACT RECORDED BY THE LD. CIT(A) WE DO NOT FIND ANY JUSTI FICATION TO INTERFERE WITH THE ORDERS OF THE LD. CIT(A) IN DELETING THE S UBSTANTIAL ADDITION UNDER SECTION 14A BECAUSE A.O. DID NOT RECORD SATIS FACTION UNDER SECTION 14A OF THE I.T. ACT BECAUSE ASSESSEE PLEADE D THAT IT DID NOT INCUR ANY EXPENDITURE TO EARN EXEMPT INCOME. THE A. O. RE-STATED ADDITION MADE IN THE ORIGINAL ASSESSMENT UNDER SECT ION 143(3). AS PER THE ORDER OF THE LD. CIT(A), ASSESSEE HAS ALREA DY SUO MOTO DISALLOWED PART AMOUNT. IT WAS ALSO FOUND THAT ASSE SSEE USED ITS OWN FUNDS FOR MAKING INVESTMENTS. THE LD. CIT(A), THERE FORE, CORRECTLY DELETED THE SUBSTANTIAL ADDITIONS. WE RELY UPON DEC ISION OF DELHI HIGH COURT IN THE CASE OF I.P. SUPPORT SERVICES INDIA P. LTD., 378 ITR 240, DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF KAPSON ASSOCIATES 381 ITR 204 AND DEEPAK MITTAL 361 ITR 13 1. ON VAT PENALTY ASSESSEE DID NOT MAKE ANY CLAIM OF DEDUCTIO N IN THE P & L A/C. THEREFORE, IT WAS CORRECTLY DELETED BY THE LD. CIT(A). WE MAY ALSO NOTE HERE THAT BOTH THESE ADDITIONS ARE PART OF THE REGULAR BOOKS OF 99 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . ACCOUNT WHICH WERE ALREADY DISCLOSED TO THE REVENUE IN THE ORIGINAL RETURN OF INCOME AND A.O. HAS ACCEPTED THE SAME. N O ASSESSMENTS WERE PENDING PRIOR TO THE DATE OF SEARCH AND ASSESS MENTS WERE ALREADY COMPLETED. THEREFORE, ALL THE ISSUES ARE CO VERED BY JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA AND PR. CIT VS. MEETA GUT GUTIA (SUPRA). THE ASSESS MENTS ARE THEREFORE, ILLEGAL AND BAD IN LAW UNDER SECTION 153 A OF THE I.T. ACT. THE ADDITIONS HAVE ALREADY BEEN RIGHTLY DELETED BY THE LD. CIT(A). THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, THEREF ORE, CORRECTLY STATED THAT ISSUES ARE SAME AS HAVE BEEN CONSIDERED AND DECIDED IN THE LEADING CASE OF M/S. SPECTRUM COAL AND POWER LT D., (SUPRA). AS PER OUR FINDINGS ON SMALL ISSUES ALSO ADDITION ON M ERIT ARE RIGHTLY DELETED. FOLLOWING THE REASONS FOR THE DECISION IN THE CASE OF SPECTRUM COAL AND POWER LTD., (SUPRA), WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITIONS. REMAINING DEPARTMENTAL APPEALS ARE DISMISSED AND REMAINING CR OSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED. 100 ITA.NOS.6103, 6104/D/16 C.OS.15&16/D/2017, ITA.NOS.5586 & 5586/D/2016, C.O.NOS.210 & 1/D/17 ITA.NOS.3221 & 3222/D/2016, C.O.NOS.247 & 248/D/201 6 ITA.NO.5587/D/2016 & C.O.355/D/2016 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI & OTHERS . 59. TO SUM-UP, ALL THE DEPARTMENTAL APPEALS ARE DI SMISSED AND ALL CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 17 TH JANUARY, 2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH 6. GUARD FILE //BY ORDER// ASST. REGISTRAR : ITAT : DELHI BENCHES : DELHI.