M/s Kisco Casting (P) Ltd, Khanna V. ACIT, Khanna

CO 63/CHANDI/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7349 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 27-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Income from undisclosed sources; Charitable institution; Share purchase agreement; Question of law; Difference of opinion; Accommodation entries; Onus to prove; Reason to believe; Change of opinion
• Section: 143(3); 133(6); 80G; 147; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 685/CHD/2011 ASSESSMENT YEAR: 2006-07 ACIT, CIRCLE, V M/S KISCO CASTING (P) LTD., KHANNA. 88, NAROTTAM NAGAR, KHANNA. PAN: AACCK-0458K & CO NO. 63/CHD/2011 IN ITA NO. 685/CHD/2011 M/S KISCO CASTING (P) LTD., V ACIT, CIRCLE, 88, NAROTTAM NAGAR, KHANNA. KHANNA. (APPELLANT) (RESPONDENT) DEPARTMENT BY : SMT. JAISHREE SHARMA RESPONDENT : SHRI SUDHIR SEHGAL DATE OF HEARING : 09.05.2012 DATE OF PRONOUNCEMENT : 22.06.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE REVENUE AND THE CRO SS OBJECTIONS FILED BY THE ASSESSEE, ARE DIRECTED AGAI NST THE ORDER DATED 13.04.2011 PASSED BY THE LD. CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT'). 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE ADDITION OF RS.1,95,00,000/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE ON THE ISSUE OF NEW SHARE CAPITAL. 2 2. THAT THE ORDER OF THE CIT(A)-II BE SET ASIDE AND TH AT OF THE AO BE RESTORED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE IT IS FINALLY DISPOSED. 3. IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES, THE LD. CI T(A) ERRED IN UPHOLDING THE RE-OPENING OF ASSESSMENT U/S 148 WHICH WAS FRAMED U/S 143(3) VIDE ORDER DATED 24.12.2008 AS THERE WAS NEITHER ANY FRESH MATERIAL NOR ANY APPLICATION MIND BY THE AO. 2. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY OF THE GROUNDS OF CROSS OBJECTION BEFORE THE SAME IS FINALLY HEARD AND DISPOSED OFF. 4. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'AR' CONTENDED THAT NOTICE ISSUED BY THE AO, IS NOT BASE D ON ANY FRESH MATERIAL NOR ON APPLICATION OF MIND, AT HIS L EVEL. HE, FURTHER, STATED THAT THE ASSESSMENT IN THIS CASE, W AS FRAMED U/S 143(3) OF THE ACT, VIDE ORDER DATED 24.12.2008. HE REFERRED TO PARA 6 OF THE CIT(A)S ORDER, WHEREBY, THE ADDITION MADE BY THE AO HAS BEEN DELETED BY THE CIT (A). LD. 'AR', FURTHER, REFERRED TO PARA 3.3 OF THE ORDER OF THE CIT(A), WHEREIN DECISION IN THE CASE OF CIT V PARAMJIT KAUR 311 ITR 38 HAS BEEN DISCUSSED AND ANALYZED BY THE CIT(A). IN THAT CASE, INITIATION OF RE-ASSESSMENT PROCEEDINGS WAS UNDERTAKEN, ON THE BASIS OF INFORMATION RECEIVED FR OM SURVEY CIRCLE AND THE BELIEF FOR ESCAPEMENT OF INCO ME, CHARGEABLE TO TAX WAS FOUNDED ON SUSPICION. ACCORD INGLY, THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT NOT ICE ISSUED 3 U/S 148 WAS NOT VALID. LD. 'AR', FURTHER, ARGUED T HAT AO HAS NOT APPLIED HIS MIND, IN THE MATTER. LD. 'AR' ALSO REFERRED TO THE SUBMISSION FILED BEFORE THE CIT(A). BEFORE AO, ASSESSEE PLACED RELIANCE, ON THE DECISION IN THE CASE OF N.D .BHATT, INSPECTING ASSTT. COMMISSIONER OF INCOME TAX AND A NOTHER V IBM WORLD TRADE CORPORATION (1995) 216 ITR 811 (B OM), ACIT V RAJESH JHAVERI STOCK BROKERS P.LTD. (2007) 2 91 ITR 500 (S.C), ITO V LAKHMANI MEWAT DAS 103 ITR 437 (S. C). THE AO, HAD CONSIDERED SUCH CASE LAWS IN THE LIGHT OF THE FACTUAL MATRIX OF THE PRESENT CASE. THE ASSESSEE PL ACED RELIANCE ON THE DECISION IN THE CASE OF SARTHAK SEC URITIES PVT. LTD. V ITO, 329 ITR 110, HINDUSTAN LEVER LTD. V R.B.WADKAR 268 ITR 332 (BOM), CIT V SFIL STOCK BROK ING LTD. 233 CTR 69 (DEL). 5. WE HAVE CONSIDERED THE SUBMISSIONS FILED BY THE PARTY, BEFORE THE CIT(A). IN THIS CASE, RETURN WAS FILED BY THE ASSESSEE, ON 26.11.2006, DECLARING INCOME OF (-) RS .26,764/- THE AO, RECEIVED INFORMATION FROM THE INVESTIGATION WING, AS MENTIONED IN THE REASONS RECORDED BY THE AO U/S 148 OF THE ACT, THAT ASSESSEE COMPANY IS A BENEFICIARY OF ACCOMMODATION ENTRIES, PROVIDED BY SHRI TARUN GOYAL , KAROL BAGH, NEW DELHI. THE REASONS RECORDED REVEAL THE M ODUS- OPERANDI RESORTED BY SHRI TARUN GOYAL. A BARE PERU SAL OF THE REASONS RECORDED BY THE AO, ON 13.04.2011, AND AS REPRODUCED BY THE CIT(A), IN PARA 3.1 OF HIS APPELL ATE ORDER, UNDER REFERENCE, REVEALS THAT THE AO, ACTED UPON TH E INFORMATION PROVIDED BY THE INVESTIGATION WING, IN RESPECT OF THE ENTRIES PROVIDED BY SHRI TARUN GOYAL, TO THE AS SESSEE 4 ALONGWITH THE DETAIL OF SUCH ENTRIES. THE REPORT, S UBMITTED BY THE INVESTIGATION WING, TO THE AO, IS A REPORT O N CERTAIN FACTS, WHICH CAN CERTAINLY SERVE AS THE BASIS, FOR INITIATING RE-ASSESSMENT PROCEEDINGS, U/S 147 READ WITH SECTIO N 148 OF THE ACT. A BARE PERUSAL OF THE REASONS RECORDED REVEALS THAT THE AO, HAS DULY APPLIED HIS MIND, TO THE REPO RT SUBMITTED BY THE INVESTIGATION WING. 6. LD. CIT(A), HAS CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO THE DECISIONS RELIED UPON BY THE ASSES SEE. LD. CIT(A) REFERRED TO THE DECISION OF THE HON'BLE SUPR EME COURT, IN THE CASE OF GKN DRIVESHAFT (INDIA) LTD. V ITO 259 ITR 19 (S.C). THE AO, HAD SUPPLIED THE REASONS REC ORDED U/S 148 OF THE ACT, TO THE ASSESSEE. IT IS, FURTHE R, EVIDENT FROM THE APPELLATE ORDER OF THE CIT(A), THAT OBJECT ION RAISED BY THE ASSESSEE APPELLANT, WERE DULY DISPOSED OF BY THE AO, AS IS EVIDENT FROM 2 ND PARA, PAGE 14 OF THE ASSESSMENT ORDER. IN VIEW OF THIS, THE CIT(A) UPHELD THE RE-O PENING OF THE CASE, U/S 148 OF THE ACT AND DISMISSED THE GROU ND RAISED BY THE ASSESSEE, IN THE MATTER. 7. IN THIS CASE, ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT WAS FRAMED ON 24.12.2008. SUBSEQUENTLY, NOTICE U/S 148 OF THE ACT WAS ISSUED BY THE AO, ON 18.09.2009, AND DU LY SERVED UPON THE ASSESSEE, ON 22.09.2009. ACCORDING LY, THE NOTICE U/S 148 OF THE ACT HAS BEEN ISSUED TO THE AS SESSEE BEFORE EXPIRY OF FOUR YEARS, FROM THE END OF THE RE LEVANT ASSESSMENT YEAR. CONSEQUENTLY, THE CASE OF THE ASS ESSEE DOES NOT FALL UNDER THE PROVISO TO SECTION 147 OF T HE ACT. 5 8. LD. 'DR' ARGUED THAT REASONS RECORDED U/S 148 A RE VALID, TO INITIATE ACTION U/S 147 READ WITH SECTION 148 OF THE ACT. LD. 'DR', FURTHER, STATED THAT INFORMATION WA S RECEIVED, AFTER COMPLETION OF THE ORIGINAL ASSESSMENT ORDER. HE ALSO MADE REFERENCE TO THE SEARCH CONDUCTED IN THE CASE OF SHRI TARUN GOYAL, ON 15.09.2008, WHEREBY CERTAIN INFORMA TION WAS COLLECTED REGARDING HIS BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. LD. 'DR' SUPPORTED THE FIND INGS, ON THE ISSUE OF VALIDITY OF NOTICE U/S 148 OF THE ACT, ARRIVED AT BY THE CIT(A). 9. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS, FACTS OF THE CASE, THE CASE LAWS RELIED UPON AND THE RELE VANT AVAILABLE RECORDS. A BARE PERUSAL OF THE REASONS R ECORDED BY THE AO REVEALS THAT THERE IS A DIRECT NEXUS BETWEEN THE REASONS AND THE FORMATION OF BELIEF, FOR THE ESCAPE MENT OF INCOME, CHARGEABLE TO TAX, WITHIN THE MEANING OF SE CTION 147 OF THE ACT. THE REASONS RECORDED BY THE AO, AR E SPECIFIC, DEFINITE AND RELEVANT, AND NOT VAGUE AND IRRELEVANT. IT IS A WELL SETTLED PROPOSITION OF LAW, THAT AT TH E STAGE OF INITIATION OF RE-ASSESSMENT PROCEEDINGS, THE AO IS NOT EXPECTED TO ESTABLISH CONCLUSIVELY THE FACTUM OF ES CAPEMENT OF INCOME, CHARGEABLE TO TAX. SIMILARLY, IT IS NOT ESSENTIAL THAT ADDITION MUST BE MADE BY THE AO, IN TERMS OF T HE REASONS RECORDED U/S 148 OF THE ACT. THE RECORDING OF REASONS, U/S 148 OF THE ACT, IS A THRESHOLD STATUTO RY CONDITION, FOR ASSUMPTION OF JURISDICTION, FOR THE PURPOSE OF RE-ASSESSMENT IN A CASE. IN SUCH A SITUATION, ONLY PRIMA- FACIE BELIEF, FORMED BY THE AO, IN THE MATTER OF ES CAPEMENT 6 OF INCOME, CHARGEABLE TO TAX, IS ESSENTIAL. IN THI S CASE, THE NOTICE U/S 148 OF THE ACT HAS BEEN ISSUED BEFORE TH E EXPIRY OF FOUR YEARS, HENCE, THE PROVISO TO SECTION 147 OF THE ACT IS NOT APPLICABLE. IT IS, FURTHER, ESSENTIAL TO MENTI ON HERE THAT THERE IS NO STATUTORY BAR, IN INVOKING THE PROVISIO N OF SECTION 147 READ WITH SECTION 148 OF THE ACT, ON TH E BASIS OF VALID INFORMATION SUPPLIED BY THE INVESTIGATION WIN G OF THE INCOME TAX DEPARTMENT. WHERE THE INFORMATION IS FA CTUAL AND NOT FALSE ONE AND THE SAME HAS MERELY BEEN COMMUNICATED TO THE AO, HE WOULD BE WITHIN HIS STAT UTORY RIGHT TO INVOKE THE PROVISIONS OF SECTION 147 READ WITH SECTION 148 OF THE ACT. NEEDLESS TO STRESS THAT COMMUNICATION OF INFORMATION FROM ANY SOURCE, IS DI FFERENT FROM THE INTERPRETATION OF THE SAME. THE AO, HAS BE EN SUPPLIED WITH INFORMATION BY THE INVESTIGATION WING AND HE APPLIED HIS MIND TO SUCH INFORMATION, HENCE, THERE IS NO INFIRMITY OR ILLEGALITY IN ISSUANCE OF NOTICE U/S 1 48 OF THE ACT BY THE AO. 10. WE HAVE CONSIDERED THE CASE LAWS CITED BY THE A SSESSEE AND THE RATIO, LAID DOWN THEREIN, AND FOUND THAT TH E SAME ARE FACTUALLY DIFFERENT AND DISTINGUISHABLE AND, HE NCE, NOT APPLICABLE TO THE FACT-SITUATION OF THE PRESENT CAS E. SUCH CASE LAWS HAD BEEN CONSIDERED BY THE AO AND THE LD. CIT(A) ALSO, AS RELIED UPON BY THE ASSESSEE. 11. LET US DISCUSS, THE RELEVANCE OF INFORMATION SU PPLIED BY THE INVESTIGATION WING. THE HON'BLE SUPREME COUR T, IN THE CASE OF CIT V P.V.S.BEEDIES PVT. LTD. (1999) 23 7 ITR 13 (S.C) HELD THAT FACTUAL ERROR OR OMISSION IN THE AS SESSMENT 7 ORDER, POINTED OUT BY THE AUDIT PARTY, IS PERMISSIB LE UNDER LAW TO INVOKE THE PROVISIONS OF SECTION 147 R.W. SE CTION 148 OF THE ACT. RELEVANT PART OF THE DECISION IS REPROD UCED HEREUNDER (HEAD NOTE) : REASSESSMENT INFORMATION-INTERNAL AUDIT PARTY ENTITLED TO POINT OUT FACTUAL ERROR OR OMISSION IN ASSESSMENT-RE-OPENING OF CASE ON BASIS OF FACTUAL E RROR POINTED OUT BY INTERNAL AUDIT PARTY IS PERMISSIBLE UNDER LAW-ITO GRANTING DEDUCTION UNDER SECTION 80G ON ACCOUNT OF DONATION TO CHARITABLE TRUST OVERLOOKING FACT THAT RECOGNITION GRANTED TO CHARITABLE TRUST HAD EX PIRED- RE-OPENING WAS ON BASIS OF FACTUAL INFORMATION GIVE N BY INTERNAL AUDIT PARTY-RE-OPENING OF ASSESSMENT VALID - INCOME-TAX ACT,1961, S.147(B). 11(I). THE HON'BLE DELHI HIGH COURT IN THE CASE OF AGR INVESTMENT LTD. V ADDL. CIT 333 ITR 146 (DEL) HA S HELD AS UNDER : HELD, DISMISSING THE PETITION, THAT THE TRANSACTIO NS INVOLVING RS.27 LAKHS CONSTITUTED FRESH INFORMATION IN RESPECT OF THE ASSESSEE AS A BENEFICIARY OF BOGUS ACCOMMODATION ENTRIES PROVIDED TO IT AND REPRESENTE D UNDISCLOSED INCOME. THERE WAS SPECIFIC INFORMATION RECEIVED FROM THE OFFICE OF THE DIRECTORATE OF INVESTIGATION AS REGARDS THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH A NUMBER OF CONCERNS WHICH HAD MADE ACCOMMODATION ENTRIES AND THEY WERE NOT GENUINE TRANSACTIONS. IT WAS NEITHER A CHANGE OF OPINION NOR DID IT CONVEY A PARTICULAR INTERPRETATION OF A SPECIFIC PROVISION WHICH WAS DONE IN A PARTICULAR MANNER IN THE ORIGINAL ASSESSMENT AND SOUGHT TO BE DONE IN A DIFFERENT MANNER IN THE PROCEEDINGS UNDER SECTION 147 OF THE ACT. THE REASON TO BELIEVE HAD BEEN APPROPRIATELY UNDERSTOOD BY THE AO AND THERE WAS MATERIAL ON THE 8 BASIS OF WHICH THE NOTICE WAS ISSUED. IN EXERCISE OF THE JURISDICTION UNDER ARTICLE 226 OF THE CONSTITUTION, THE SUFFICIENCY OF REASONS FOR FORMATION OF THE BELIEF COULD NOT BE CONSIDERED. IT WAS OPEN TO THE ASSESSEE TO PARTICIPATE IN THE RE-ASSESSMENT PROCEEDINGS AND PU T FORTH ITS STAND IN DETAIL TO SATISFY THE AO THAT TH ERE WAS NO ESCAPEMENT OF TAXABLE INCOME. 11(II). A LETTER RECEIVED FROM THE ADI THAT HUNDI L OANS IN THE NAMES SPECIFIED THEREIN, SHOWN BY THE ASSESSEE WERE FICTITIOUS. THERE IS RATIONAL CONNECTION BETWEEN T HE LETTER AND THE BELIEF OF THE INCOME TAX OFFICER THAT INCOM E HAD ESCAPED ASSESSMENT AND THE ASSESSMENT WAS HELD VALI D IN THE CASE OF MIDLAND FRUIT & VEGETABLE PRODUCTS (IND IA) LTD. V CIT (1994) 208 ITR 226 (DEL). 11(III) THE DECISION OF THE HON'BLE DELHI HIGH CO URT IN THE CASE OF RAJAT EXPORT IMPORT INDIA PVT. LTD. V ITO ( 2012) 341 ITR 135 (DEL) DIRECTLY SUPPORT THE ISSUE IN QUESTIO N IN THE PRESENT APPEAL. THE RELEVANT PART OF THE SAME IS RE PRODUCED HEREUNDER : HELD, DISMISSING THE PETITION THAT IN THE REASONS RECORDED THE AO HAD REFERRED TO THE INVESTIGATION M ADE BY THE DIRECTOR OF INCOME-TAX (INVESTIGATION), WHO WAS IN CHARGE OF THE INVESTIGATION INTO GROUPS THAT OPERAT ED AS ENTRY PROVIDERS OR ENTRY OPERATORS, IN THE CASE OF A GROUP WHICH WAS FOUND TO HAVE OPERATED MULTIPLE ACCOUNTS IN VARIOUS BRANCHES OF BANKS TO INTRODUCE UNACCOUNTED MONEY IN THE GUISE OF GIFTS, LOANS, SHA RE APPLICATION MONEY ETC. AFTER REFERRING TO THE BROAD AND GENERAL MODUS OPERANTI ADOPTED BY THE ENTRY PROVIDE RS, THE AO SPECIFICALLY NOTICED FROM THE LIST OF ENTRIE S GIVEN TO HIM BY THE INVESTIGATION WING THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRY FROM S IN THE AMOUNT OF R S. 9 3 LAKHS. S HAD BEEN DESCRIBED AS AN ENTRY PROVIDER AND THE INSTRUMENT NUMBER, DATE, NAME OF THE BANK AND T HE BRANCH AS WELL AS ACCOUNT NUMBER WERE GIVEN. THIS INFORMATION CONSTITUTED REASON TO BELIEVE, PRIMA FA CIE, THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMEN T IN THE HANDS OF THE ASSESSEE. THE MATERIAL BEFORE T HE AO WAS RELEVANT AND AFFORDED A LIVE LINK OR NEXUS T O THE FORMATION OF THE PRIMA FACIE BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT IN THE ASSESSEE'S HANDS. ADMITTEDLY, THE INFORMATION RECEI VED FROM THE DIRECTOR OF INCOME-TAX (INVESTIGATION) DID NOT CONTAIN MATERIAL LINKING S, STATED TO BE AN ENTRY PROVIDED, WITH THE ASSESSEE. THE REASONS TO BELIEVE RECORDED IN WRITING BY THE AO WERE DETAILED AND SHO WED APPLICATION OF MIND. IT WAS THEREFORE UNNECESSARY T O GO INTO WHETHER THE ASSESSEE HAD BEEN IMPLICATED IN TH E STATEMENT OF THE DIRECTOR OF S. 11(IV) IN VIEW OF THE ABOVE DISCUSSED CASE-LAWS, TH E CONTENTION OF THE LD. 'AR' THAT ACTION CANNOT BE TA KEN U/S 147 R.W.S. 148, ON THE BASIS OF REPORT FROM INVESTI GATION WING OF THE DEPTT., IS NOT LEGALLY TENABLE. THE REP ORT EMANATING FROM INVESTIGATION WING BEING FACTUALLY C ORRECT AND THE ASSESSEE FAILED TO REBUT THE SAME IN ANY PR OCEEDINGS UNDER THE ACT. THE REPORT FROM INVESTIGATION WING CANNOT BE CONSTRUED AS TABOO FOR THE PURPOSE OF INITIATION OF ACTION U/S 147 OF THE ACT. IT IS EVIDENT THAT MERE COMMUN ICATION OF INFORMATION EMANATING FROM THE INVESTIGATION AND NOT INTERPRETATION THEREOF, IS NOT THE SAME THING. IF THERE IS AN INFORMATION FROM THE INVESTIGATION, ON WHICH AO HAS ACTED, 10 AS IS IN THE PRESENT CASE, THEN AO HAS JURISDICTION U/S 147 R.W.S. 148 OF THE ACT. 12. IN VIEW OF ABOVE LEGAL AND FACTUAL DISCUSSIONS, FINDINGS OF THE CIT(A) ARE UPHELD AND C.O. OF THE ASSESSEE I S DISMISSED. ITA NO. 685/CHD/2011 A.Y. 2006-07 (REVENUES APPEAL ) 13. THE REVENUE RAISED A SINGLE SUBSTANTIVE GROUND OF APPEAL, CONTENDING THAT THE CIT(A), ERRED ON FACTS AND IN LAW, IN DELETING ADDITION OF RS.1,95,00,000/-, MADE BY THE AO, ON ACCOUNT OF DISALLOWANCE ON THE ISSUE OF NEW SHARE CAPITAL, AS IS EVIDENT FROM PERUSAL OF GROUND NO.1. 14. LD. 'DR' CONTENDED THAT FINDINGS OF THE AO DESE RVE TO BE UPHELD, HAVING REGARD TO THE FACT-SITUATION OF T HE PRESENT CASE. LD. 'DR' PLACED RELIANCE ON THE DECISION IN THE CASE OF AGGARWAL COAL CORPORATION PVT. LTD. V ADDL.CIT (201 1) 142 TTJ (IND) 409 AND POWER DRUGS LTD. V CIT & ANR. 245 CTR 623 (P&H). NO OTHER DECISION, TO SUPPORT THE CASE O F THE REVENUE WAS CITED OR BROUGHT TO THE NOTICE OF THE B ENCH BY THE LD. 'DR'. 15. LD. 'AR' REFERRED TO THE SUBMISSIONS FILED BY T HE APPELLANT BEFORE THE CIT(A). IN THE SUBMISSIONS, B EFORE THE CIT(A), THE ASSESSEE PLACED RELIANCE ON THE DECISIO N IN THE CASE OF CIT V STELLER INVESTMENTS (P) LTD. 251 ITR 263 (S.C), M/S LOVELY EXPORTS PVT. LTD. 216 CTR 195 (S.C) HE 11 CONTENDED THAT THE CASE OF THE APPELLANT IS SQUARE LY COVERED BY THESE DECISIONS. 15(I) LD. 'AR' REFERRED TO PAPER BOOKS FILED BY HI M, WHEREIN NECESSARY DETAILS REGARDING IDENTITY OF THE SUBSCRI BER TO THE SHARE CAPITAL, CREDIT WORTHINESS OF THE SAME AND GENUINENESS OF THE TRANSACTION, WERE FILED. LD. 'A R' FILED AFFIDAVIT RELATING TO THE APPLICATION AND ALLOTMENT OF SHARES, ACKNOWLEDGEMENT OF INCOME TAX RETURN, FOR THE ASSES SMENT YEAR 2005-06/2006-07, BANK ACCOUNT OF THE COMPANY, SHOWING THE SOURCE OF SUCH TRANSACTIONS, AUDITORS REPORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE COMP ANY, FOR THE ASSESSMENT YEAR 2006-07. SIMILAR DETAILS HAD B EEN FILED, IN RESPECT OF SUCH SUBSCRIBERS TO THE SHARE CAPITAL. THE LD. 'AR' FILED NECESSARY EVIDENCES, (IN THE SHA PE OF PAPER BOOKS) WITH A VIEW TO PROVING THE IDENTITY OF THE S UBSCRIBERS, GENUINENESS OF THE TRANSACTIONS AND CREDIT-WORTHINE SS OF THE SUBSCRIBERS. THE DETAILS OF SUCH EVIDENCE ARE AS U NDER: S.NO. PARTICULARS A. MIS SIDHVANDAN ENTERPRISES PRIVATE LIMITED - AFFIDAVIT RELATING TO THE APPLICATION AND ALLOTME NT OF SHARES - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE COM PANY FOR A/Y 2005-06 & 2006-07 - BANK ACCOUNT OF THE COMPANY SHOWING THE TRANSACT ION - AUDITOR'S REPORT, BALANCE SHEET AND PROFIT & L OSS ACCOUNT OF THE COMPANY FOR THE A/Y 2006-07 B. M/S G N CREDITS PRIVATE LIMITED - AFFIDAVIT RELATING TO THE APPLICATION AND ALL OTMENT OF SHARES 12 - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE COMPANY FOR A/Y 2005-06 AND 2006-07 - BANK ACCOUNT OF THE COMPANY SHOWING THE TRANSAC TION - AUDITOR'S REPORT, BALANCE SHEET AND PROFIT & LOS S ACCOUNT OF THE COMPANY FOR THE A/Y 2006-07 C. M/S VISHAKHA INFOTECH LIMITED - AFFIDAVIT RELATING TO THE APPLICATION AND ALLO TMENT OF SHARES - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE COMPA NY FOR A/Y 2005-06 & 2006-07 - BANK ACCOUNT OF THE COMPANY SHOWING THE TRANSACTI ON - AUDITOR'S REPORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE COMPANY FOR THE A/Y 2006-07 D. M/S PAONTA FINANCE & DEPOSITS PRIVATE LIMITED - AFFIDAVIT RELATING TO THE APPLICATION AND ALLOTMENT OF SHARES - BANK ACCOUNT OF THE COMPANY SHOWING THE TRANSACTION - AUDITOR'S REPORT, BALANCE SHEET AND PROFIT & LOSS A CCOUNT OF THE COMPANY FOR THE A/Y 2006-07 E. M/S TAURUS IRON & STEEL COMPANY PRIVATE LIMITED - AFFIDAVIT RELATING TO THE APPLICATION AND ALLOTM ENT OF SHARES - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE COMP ANY FOR A/Y 2004-05 & 2006-07 - LETTER RELATING TO PAN OF THE COMPANY - BANK ACCOUNT OF THE COMPANY SHOWING THE TRANSACTION - AUDITOR'S REPORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE COMPANY FOR THE A/Y 2006-07 F. M/S KAROL BAGH TRADING LIMITED - AFFIDAVIT RELATING TO THE APPLICATION AND ALLOTMENT OF SHARES - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE COMPANY FOR A/Y 2004-05 & 2006-07 - COPY OF PAN - BANK ACCOUNT OF THE COMPANY SHOWING THE TRANSACTION - CHEQUE RELATING TO CREDIT ENTRY IN THE BANK O N 22.09.2005 - NOTICE FOR THE AGM, DIRECTOR'S REPORT, AUDITOR' S REPORT, BALANCE SHEETAND PROFIT & LOSS ACCOUNT OF THE COMPANY FOR T HE A/Y 2006-07 G. M/S ADONIS FINANCIAL SERVICES PRIVATE LIMITED - AFFIDAVIT RELATING TO THE APPLICATION AND ALLOTME NT OF SHARES - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE COMPANY FOR A/Y 2004-05 &2006-07 - LETTER BY THE DEPARTMENT ALLOTTING PAN TO THE COMPA NY - SOURCE OF MONEY APPLIED FOR THE ALLOTMENT OF THE SH ARES OF THE ASSESSEE - NOTICE FOR THE AGM, DIRECTOR'S REPORT, AUDITOR'S RE PORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE COMP ANY FOR THE A/Y 2006-07 H. M/S COUNTRYWIDE CREDIT & SECURITIES PRIVATE LIM ITED - AFFIDAVIT RELATING TO THE APPLICATION AND ALLOTME NT OF SHARES - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE COMPANY FOR A/Y 13 2004-05 2006-07 - COPY OF PAN OF THE COMPANY - BANK ACCOUNT OF THE COMPANY SHOWING THE TRANSACTION - CHEQUE RELATING TO CREDIT ENTRY IN THE BANK ON 12.0 8.2005 - NOTICE FOR THE AGM, DIRECTOR'S REPORT, AUDITOR'S RE PORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE COMP ANY FOR THE A/Y 2006-07 I. M/S THAR STEELS PRIVATE LIMITED - AFFIDAVIT RELATING TO THE APPLICATION AND ALLOTM ENT OF SHARES - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE COMPANY FOR A/Y 2004-05& 2006-07 - COPY OF PAN OF THE COMPANY - BANK ACCOUNT OF THE COMPANY SHOWING THE TRANSACTION - CHEQUE RELATING TO CREDIT ENTRY IN THE BANK ON 09.0 9.2005 - NOTICE FOR THE AGM, DIRECTOR'S REPORT, AUDITOR'S RE PORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE COMP ANY FOR THE A/Y 2006-07 J. M/S SADGURU FINMAN PRIVATE LIMITED - AFFIDAVIT RELATING TO THE APPLICATIO N AND ALLOTMENT OF SHARES - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE C OMPANY FOR A/Y 2004-05 - COPY OF PAN OF THE COMPANY - SOURCE OF MONEY APPLIED FOR THE ALLOTMENT OF THE SHARES OF THE ASSESSEE - NOTICE FOR THE AGM, DIRECTOR'S REPORT, AUDITOR'S REPORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE COMP ANY FOR THE A/Y 2006-07 K. M/S TEJASVI INVESTMENTS PRIVATE LIMITED - AFFIDAVIT RELATING TO THE APPLICATION AND A LLOTMENT OF SHARES - ACKNOWLEDGEMENT OF INCOME TAX RETURN OF THE COMPANY FOR A/Y 2004-05 & 2006-07 - COPY OF PAN OF THE COMPANY - BANK ACCOUNT OF THE COMPANY SHOWING THE TRANSACTION - CHEQUE RELATING TO CREDIT ENTRY IN THE BANK ON 30.08.2005 - NOTICE FOR THE AGM, DIRECTOR'S REPO RT, AUDITOR'S REPORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE COMP ANY FOR THE A/Y 2006-07. 15(II) TO SUPPORT HIS CONTENTION, LD. 'AR' PLACED RELIANCE, ON THE DECISION IN THE CASE OF CIT V G.P. INTERNATI ONAL LTD., 325 ITR 25 AND RAKESH CHAND NAHTA V CIT 301 ITR 134 (MP). LD. 'AR' ALSO PLACED RELIANCE ON THE FOLLOW ING DECISIONS : 1. CIT V M/S SHREE DADU AUTO (P) LTD. ITA NO. 704/2009 PUNJAB & HARYANA HIGH COURT 14 2. OBSERVER COMPOUNDS PVT. LTD. V ACIT, CHANDIGARH ITA NO. 139/CHD/2004, ITAT CHANDIGARH BENCH 3. ITO WARD 5(1) DELHI V M/S KAILASHPATI OVERSEAS PVT. LTD. ITA NO. 4269/DEL/2009, ITAT DELHI BENCH 4. CIT V DWARKADHISH INVESTMENT (P) LTD. 45 DTR 281 (DEL) 5. CIT V UJALA DYEING & PRINTING MILLS (P) LTD. 328 IT R 437 (GUJ) 6. CIT V KAMDHENU VYAPAR CO. LTD. 263 ITR 692 (CAL) 7. PRAKASH CHAND NAHTA V CIT 301 ITR 134 (MP) 8. ANIL KUMAR MIDHA 9HUF) V ITO 100 TTJ 644 (JODH- TRIB) 9. APS ASSOCIATES (P) LTD. V ACIT 101 TTJ (ASR-TRIB) 1 5 10 GOLDEN REMEDIES (P) LTD. V ITO 18 SOT 260 (DEL- TRIB) 11. ITO V NOVA PROMOTERS & FINLEASE (P) LTD. 44 D TR 9 (DEL-TRIB) 12. MASTER ABHINAV MALHOTRA V ACIT 89 TTJ 144 (DE L- TRIB) 13. ITO V PURVI FABRICS & TEXTURISE (P) LTD. 47 D TR 225 (DEL-TRIB) 14. CIT V EMERALD COMMERCIAL LTD. 250 ITR 539 (CA L) 15. PRASHANT KHOSLA PNEUMATICS LTD. V ACIT 54 ITD 229 (DEL-TRIB). 15(III) THE LD. 'AR', FURTHER, PLACED RELIANCE, ON A NUMBER OF DECISIONS TO SUPPORT HIS CONTENTIONS. HOWEVER, RATIO OF A FEW DECISIONS ARE REPRODUCED HEREUNDER : 1. CIT V SHRI DADU AUTO (P) LTD. (SUPRA) HAVING HEARD LD. COUNSEL FOR THE REVENUE, WE ARE O F THE CONSIDERED VIEW THAT NO EXCEPTION IS PROVIDED TO ADMIT THE APPEAL ESPECIALLY WHEN THE VIEW OF HON'BL E THE SUPREME COURT IN VARIOUS JUDGEMENTS IS ABSOLUTE LY CLEAR THE PROPER COURSE FOR THE ASSESSING OFFICER C OULD HAVE BEEN TO RE-OPEN THE ASSESSMENT OF THE SHARE APPLICANTS/ SHARE HOLDERS RATHER THAN MAKING ADDITI ON AGAINST THE ASSESSEE- RESPONDENT. THERE IS THUS NO MERIT IN THE APPEAL. DISMISSED. 15 2. CIT V DWARKADHISH INVESTMENT (P) LTD.(SUPRA) INCOMECASH CREDITSHARE APPLICATION MONEY THOUGH IN S. 68 PROCEEDINGS, THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE YET ONCE HE PROVES THE IDENTIT Y OF THE CREDITORS/SHARE APPLICANTS BY EITHER FURNISHING THEIR PAN OR INCOME-TAX ASSESSMENT NUMBER AND SHOWS THE GENUINENESS 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 REVENUEJUST BECAUSE THE CREDITORS/SHARE APPLICANTS COULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE S. 6 8 REVENUE HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSONMOREOVER, IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT TO PROVE THE 'SOURCE OF SOURCE'I N THE INSTANT CASE, THE TRIBUNAL HAS CONFIRMED THE OR DER OF THE CIT(A) DELETING THE IMPUGNED ADDITION HOLDIN G THAT THE ASSESSEE HAS BEEN ABLE TO PROVE THE IDENTI TY OF THE SHARE APPLICANTS AND THE SHARE APPLICATION MONE Y HAS BEEN RECEIVED BY WAY OF ACCOUNT PAYEE CHEQUES NO QUESTION OF LAW ARISESCIT VS. LOVELY EXPORTS (P ) LTD. (2008) 216 CTR (SC) 195 : (2008) 6 DTR (SC) 30 8, CIT VS. DIVINE LEASING & FINANCE LTD. (2007) 207 CT R (DEL) 38 : (2008) 299 ITR 268 (DEL) AND CIT VS. DWARIKADJNISH INVESTMENT (P) LTD. (2008) 2 DTR (DEL ) 7 (2008) 167 TAXMAN 321 (DEL) FOLLOWED 3. CIT V UJALA DYEING & PRINTING MILLS (P) LTD. WHERE THE TRIBUNAL HAS COME TO A FINDING THAT AS THE ASSESSEE HAS DISCHARGED ITS ONUS OF PROVING IDENTITY OF PARTI ES, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF SHARE APPLICATIONS IN AS MUCH AS EVIDENTLY THEIR RETURNS O F INCOME, ASSESSMENT ORDERS, BALANCE-SHEETS SHOWING INVESTMEN T, EXPLANATION REGARDING HOW THEY RAISED FUNDS HAVE BE EN SUBMITTED BEFORE THE LOWER AUTHORITIES, THE ADVERSE INFERENCE DRAWN BY THE AO WAS MISPLACED, THE TRIBUNA L HAS COME TO CORRECT CONCLUSION, AS THE FINDINGS HAVE BEEN RECORDED 16 BY THE TRIBUNAL AFTER APPRECIATION OF THE EVIDENCE, NO SUBSTANTIAL QUESTION OF LAW ARISES OUT OF THE ORDER OF THE TRIBUNAL . 15(IV) LD. 'AR' PLACED RELIANCE ON A NUMBER OF DECI SIONS TO SUPPORT HIS CONTENTION THAT IN CASE THE AO IGNOR ES THE REQUEST MADE BY THE ASSESSEE TO HIM, TO ISSUE SUMMO NS TO THE SUBSCRIBERS, NO ADDITION CAN BE MADE AS HELD IN SUCH DECISIONS. THE ASSESSEE HAS FURNISHED A LONG LIST OF SUCH CASES. HOWEVER, IN THE CASE OF CIT V KAMDHENU VYAP AR CO.LTD. 263 ITR 692 (CAL), PARKASH NATHA V CIT 301 ITR 134 (MP), ANIL KUMAR MIDHA (HUF) V ITO 100 TTJ (JOD -TRIB) 644, APS ASSOCIATES (P) LTD. V ACIT 101 TTJ (ASR-TR IB) 15, GOLDEN REMEDIES (P) LTD. V ITO 18 SOT (DEL-TRIB) 26 0, IT HAS BEEN HELD THAT WHERE A REQUEST HAS BEEN MADE BY THE ASSESSEE TO THE AO, FOR ISSUING SUMMONS U/S 131 OF THE ACT, IT IS INCUMBENT ON THE AO TO ISSUE SUCH SUMMON S, WITH A VIEW TO ENABLING THE ASSESSEE TO AVAIL OF THE OPP ORTUNITY U/S 68 OF THE ACT TO PROVE THE GENUINENESS OF TRANS ACTIONS AND WHERE THE AO FAILED TO ISSUE SUCH SUMMONS, NO ADDITION CAN BE MADE. 16. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS , FACTS OF THE CASE AND THE RELEVANT RECORDS, INCLUDING THE CASE LAWS, CITED BY THE PARTIES AND PAPER BOOKS, FILED B Y THE ASSESSEE. THE AO MADE AN ADDITION OF RS.1,95,00,000 /-, AS UNDISCLOSED INCOME OF THE ASSESSEE, ON THE GROUND T HAT PERSONS WHO SUBSCRIBED TO THE SHARE CAPITAL WERE NO T PRODUCED BEFORE HIM. THE AO, AFTER A CONSIDERATION OF THE SUBMISSIONS, FILED BY THE ASSESSEE, RECORDED HIS FI NDINGS AT 17 PAGE 17 OF THE ASSESSMENT ORDER, DATED, 22.12.2010, PASSED U/S 143(3)/147 OF THE ACT. THE RELEVANT PART OF TH E FINDINGS OF THE AO ARE REPRODUCED HEREUNDER, FOR THE PU RPOSE OF PROPER APPRECIATION OF THE SAME: THE ABOVE REPLY OF THE ASSESSEE HAS BEEN CONSIDERE D AND SERVE NO PURPOSE AS THE ASSESSEE HAS FAILED TO PRODUCE THE PERSONS FOR VERIFICATION TO WHOM IT HAS ALLOTTED THE SHARES DURING THE PERIOD 01.04.2005 TO 31.03.2006 AMOUNTING TO RS. 1,95,00,000/- AS PER DETAILS GIVEN IN QUESTIONNAIRE DATED 30.11.2010. SI NCE THE PRIMARY ONUS FOR PRODUCING THE ALLOTTEES OF SHA RES FOR VERIFICATION LIES ON THE ASSESSEE ITSELF AND BY NOT PRODUCING THESE ALLOTTEES OF SHARE OF THE ASSESSEE COMPANY, THE ASSESSEE COMPANY HAS FAILED TO DISCHAR GE THE ONUS DELIBERATELY WITH A MOTIVE AND FROM WHICH IT CAN BE APTLY CONCLUDED THAT THE ASSESSEE HAS OBTAIN ED ACCOMMODATION ENTRIES TO THE TUNE OF RS. 1,95,00,00 0/-. EVEN THE INFORMATION RECEIVED FROM THE ADDL. D1T (I NV), NEW DELHI THAT THE ASSESSEE HAS OBTAINED ACCOMMODATIONS J ENTRIES FROM THE BOGUS COMPANIES FLOATED BY SH. TARUN GOYAL, C.A. ON THE BASIS OF WH ICH PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 WER E RE-OPENED ALSO STRENGTHENS THE ABOVE FACT. THE VARI OUS CASE LAWS QUOTED BY THE ASSESSEE ARE OF NO HELP WHE N THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF PRODUCING THE PERSONS FOR EXAMINATION TO WHOM IT HA S ALLOTTED THE SHARES. THUS IN VIEW OF THE ABOVE DISCUSSIONS, IT IS EVIDENTLY CLEAR THAT THE ASSESSE E COMPANY HAS OBTAINED ACCOMMODATION ENTRIES TO THE TUNE OF RS. 1,95,00,000/- AND THE SAME IS ASSESSED AS ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES. 17. A BARE PERUSAL OF THE FINDINGS OF THE AO REVEAL S THAT AS THE ASSESSEE HAD FAILED TO PRODUCE THE PERSONS, FOR VERIFICATION, TO WHOM SHARES WERE ALLOTTED, DURING THE 18 PERIOD FROM 1.4.2005 TO 31.3.2006, FOR AN AMOUNT OF RS.1,95,00,000/-, THE AO OBSERVED THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE PRIMARY ONUS CAST ON HIM, A ND, HENCE, IMPUGNED ADDITION WAS MADE. LD. CIT(A), ON APPRECIATION OF THE SUBMISSIONS, FILED BY THE ASSES SEE AND CASE LAWS CITED THEREIN, DELETED THE IMPUGNED ADDIT ION. THE RELEVANT PART OF THE FINDINGS OF THE CIT(A), IS REP RODUCED HEREUNDER, WITH A VIEW TO APPRECIATING THE SAME : 6. IN VIEW OF THE RATIO OF ABOVE CASE LAWS IT BEC OMES CLEAR THAT APPELLANT HAS DISCHARGED ITS BASIC RESPONSIBILITY. THERE IS NO EVIDENCE OF ANY CASH HAVING BEEN DEPOSITED FOR ISSUING THE CHEQUES IN THE BANK ACCOUNTS OF THE SHAREHOLDER COMPANIES. THE APPELLANT HAS DISCHARGED THE ONUS IN VIEW OF THE EVIDENCE FILED I.E. FILLING OF DOCUM ENTS IN PROOF OF ESTABLISHING THE IDENTITY OF THE SHAREHOLDER, GENUINENESS OF TRANSACTION, CREDITWORTHINESS OF SHAREHOLDERS, REGD. ADDRESS, PAN OF SHAREHOLDERS, PROOF OF FILING OF INCOME-TAX RETURN, BALANCE SHEET OF THE SHAREHOLDERS SHOWING THE INVESTMENT IN THEIR BOOKS, CONFIRMATION FROM SHAREHOLDERS, COPY OF BANK STATEMENT EVIDENCING THE MODE OF PAYMENT BY THE SHAREHOLDERS AND THE PROOF OF FILING OF RETURN OF ALLOTMENT BY THE APPELLANT. THE ID. A.O. HAS NOT REBUTTED THE EVIDEN CE LED BY THE APPELLANT, THE COPY OF WHICH WAS PROVIDED TO THE A.O. DURING APPELLATE PROCEEDINGS BOTH A.O. AND COUNSEL ATTENDED AND THE A.O. WAS SPECIFICALLY ASKED THAT WHETHER HE HAS IN HIS POSSESSION ANY SPECIFIC CONCRETE ADVERSE MATERIAL TO SUPPORT HIS CONTENTION AND IN REPLY TO THAT THE A.O. JUST RELIE D UPON HIS ASSESSMENT ORDER AND REITERATED THE SAME FACT AS STATED IN ASSESSMENT ORDER. THE COUNSEL EMPHASIZED THAT AS FOR AS THE APPELLANT IS CONCERNE D THERE 19 IS NO ELEMENT OF BOGUS CAPITAL FROM THE APPLICANT COM PANIES INVOLVED. THE ID. COUNSEL HAS ALSO BROUGHT TO MY NOTICE A NUMBER OF JUDGEMENTS OF ITAT, JURISDICTIONAL HIGH COURT AND APEX COURT WHERE THE ADDITION MADE UNDER IDENTICAL FACTS HAS BEEN DELETED. THEREFORE, BY FOLLOWING THE RATIO LAID DOWN BY THE JURISDICTIONAL ITAT, CHANDIGARH BENCH AND HON'BLE PUNJAB AND HARYANA HIGH COURT AND THE HON'BLE SUPREME COURT/IN THE CASE OF M/S. LOVELY EXPORTS (P) LTD. (SUPRA), I HAVE NO OPTION BUT TO DELETE THE ADDITION IN THE HANDS OF APPELLANT AND THE SAME IS DIRECTED TO BE DEL ETED. HOWEVER, THE A.O. IS DIRECTED TO TAKE SUITABLE NECESSARY/REMEDIAL ACTION AS WARRANTED BY THE FACTS IN THE CASE OF SUBSCRIBERS OF THE SHARE CAPITAL OF THE COMPANY OR TO INTIMATE THE RESPECTIVE A.OS OF THOSE SHARE APPLICANTS FOR NECESSARY ACTION AT THEIR END. IN THE RESULT, APPEAL OF THE APPELLANT IS PARTLY A LLOWED. 18. THE REVENUE HAS PLACED RELIANCE ON THE DECISION IN THE CASE OF AGGARWAL COAL CORPORATION (P) LTD. V ADDL.C IT, ITAT INDORE BENCH (2012) 142 TTJ (IND) 409. A BARE PERU SAL OF THE FACTS OF THIS CASE AND THE RATIO LAID DOWN BY T HE HON'BLE BENCH REVEALS THAT THE ISSUE OF CASH CREDIT/SHARE APPLICATION MONEY HAS BEEN DECIDED BY THE HON'BLE B ENCH OF THE TRIBUNAL, ON THE GROUND OF NON-EXISTENT OF HC L TD. & OT LTD., THE SUBSCRIBERS TO THE SHARE CAPITAL OF THE A SSESSEE. AS THE ASSESSEE, IN THAT CASE FAILED TO ESTABLISH T HE EXISTENCE OF SUCH COMPANIES, THE ISSUE WAS ACCORDIN GLY DECIDED BY THE BENCH. IN THE PRESENT CASE, THE EXI STENCE OF SUCH SUBSCRIBERS, HAS NOT BEEN CHALLENGED BY THE RE VENUE. THE AO, MERELY MADE THE ADDITION ON THE GROUND OF N ON- PRODUCTION OF THE PERSONS, WHO SUBSCRIBED TO THE SH ARE 20 CAPITAL OF THE ASSESSEE COMPANY, AS IS EVIDENT FROM THE ABOVE DISCUSSIONS. IN VIEW OF THIS, THE FACTS OF T HE PRESENT CASE ARE ENTIRELY DIFFERENT AND DISTINGUISHABLE, HE NCE THE CASE-LAW RELIED UPON BY THE REVENUE DOES NOT AID TH E CASE OF THE REVENUE. THE REVENUE, FURTHER, PLACED RELIANCE ON THE DECISION IN THE CASE OF POWER DRUGS LTD. V CIT (SUP RA). WE HAVE CONSIDERED THE FACT-SITUATION OF THE CASE, REL IED UPON AND THE RATIO LAID DOWN BY THE HON'BLE JURISDICTION AL HIGH COURT. IN THIS CASE, THE ASSESSEE COMPANY FAILED T O ESTABLISH THE IDENTITY, CREDIT-WORTHINESS AND GENUI NENESS OF THE TRANSACTIONS. CONSEQUENTLY THE ADDITION U/S 68 OF THE ACT WAS UPHELD BY THE JURISDICTIONAL HIGH COURT. IN THE PRESENT CASE, REVENUE HAS FAILED TO BRING ANY MATER IAL ON RECORD TO REBUT EVIDENCES FILED BY THE ASSESSEE APP ELLANT TO ESTABLISH THE IDENTITY, CREDIT-WORTHINESS AND GENUI NENESS OF THE TRANSACTIONS. IN VIEW OF THIS, THE FACTS OF THE PRESENT CASE ARE MATERIALLY DIFFERENT AND DISTINGUISHABLE A ND HENCE, NOT APPLICABLE TO THE PRESENT CASE. 19. IN VIEW OF THE EVIDENCES FILED BY THE ASSESSEE APPELLANT, IT CANNOT BE SAID, AS RIGHTLY HELD BY THE CIT(A), T HAT THE APPELLANT HAS FAILED TO DISCHARGE THE ONUS CAST ON HIM, WITHIN THE MEANING OF PROVISIONS OF SECTION 68 OF T HE ACT. THE DECISIONS CITED BY THE CIT(A) IN HIS FINDINGS, REPRODUCED ABOVE, CURRENTLY HOLD THE FIELD. ON THE CONTRARY, T HE AO, HAS FAILED TO BRING ON RECORD COGENT AND CORROBORATIVE MATERIAL (EXCEPT INFORMATION FROM INVESTIGATION WING OF THE DEPARTMENT), TO SUPPORT HIS CONCLUSION, IN THE MATT ER. THE APPELLANT HAS DISCHARGED ONUS, WITHIN THE MEANING O F SECTION 21 68 OF THE ACT AND ALSO IN CONSONANCE WITH THE GENER AL PRINCIPLES OF LAW. THE AO MADE THE IMPUGNED ADDITIO N, PRIMARILY ON THE GROUND OF NON-PRODUCTION OF THE PE RSONS, WHO SUBSCRIBED TO THE SHARE CAPITAL, AS IS EVIDENT FROM THE EXTRACTS OF FINDINGS OF THE AO, REPRODUCED ABOVE. THE ASSESS EE VIDE LETTER, DATED 22.12.2010, MADE A SUBMISSION TO THE ASSTT.CIT, CIRCLE, KHANNA, WHEREBY IT HAD BEEN MENTIONED THAT THE ASSESSMENT IN THE CASE WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 24.12.2008. THE DETAIL, INCLUDING CONFI RMATIONS, COPY OF THEIR INCOME TAX RETURNS, PAN, COPY OF THE BANK ACCOUNTS, EVIDENCING THE MODE OF INVESTMENT MADE BY ALL THE PERSONS FROM WHOM SHARE CAPITAL WAS RECEIVED, WERE FILED DURING THE ASSESSMENT PROCEEDINGS. THE AO, DULY AC CEPTED SUCH EVIDENCES AND NO ADVERSE INFERENCE WAS DRAWN. AT PAGE 15 OF THE ASSESSMENT ORDER DATED 22.12.2010, IT WAS FURTHER MENTIONED IN THAT SUBMISSION BEFORE THE AO THAT COM PLETE DETAILS OF SUBSCRIBERS TO SHARE CAPITAL, HAD BEEN F ILED AND IT WAS REQUESTED BY THE ASSESSEE TO ISSUE COMMISSION U /S 133(6) OF THE ACT. HOWEVER, THE AO IGNORED SUCH REQUEST O F THE ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE FILED E VIDENCES BEFORE THE AO AND THE CIT(A), SHOWING IDENTITY OF T HE SHAREHOLDERS, CREDIT WORTHINESS OF SUCH PARTIES AND THE GENUINENESS OF TRANSACTIONS. IN VIEW OF THIS, THE ONUS STANDS SHIFTED TO THE REVENUE. THE HON'BLE RAJASTHAN HIGH COURT, IN THE CASE OF CIT V FIRST POINT FINANCE LTD. (2006) 2 86 ITR 477 (RAJ) FOUND THAT COMPANY HAD FURNISHED NOT ONLY THE ADDRESSES OF THE SHAREHOLDERS, BUT EVEN COPIES OF RETURNS OF INCOME FILED BY THEM, SO THAT THE AOS DOUBT ON THEIR 22 CREDITWORTHINESS WAS NOT JUSTIFIED, INTERALIA, FOLL OWING THE RATIONALE OF THE DECISION IN CIT V STELLER INVESTME NT LTD. (2001) 251 ITR 263 (S.C). IT WAS POINTED OUT THAT THERE IS NO PRESUMPTION OF BENAMI IN RESPECT OF THE EXISTING PE RSONS. IT WAS, IN THIS VIEW THAT DEDUCTION`EPARTMENTAL APPEAL WAS NOT ADMITTED, AS NOT INVOLVING ANY QUESTION OF LAW. IN THE LIGHT OF SUCH FINDINGS, IT IS EVIDENT THAT THE CASE OF TH E ASSESSEE IS COVERED BY THE RATIO OF THE HON'BLE HIGH COURT, AS THE ASSESSEE HAS FILED EVIDENCES TO PROVE THE TRIPPLE I NGREDIENTS IN RESPECT OF THE EVIDENCES, REQUIRED TO BE ADDUCED UNDER SECTION 68 OF THE ACT. ON THE CONTRARY, THE AO HAS FAILED TO BRING ON RECORD ANY RELEVANT AND CREDIBLE MATERIAL, TO NEUTRALIZE THE DOCUMENTARY EVIDENCES, FILED BY THE APPELLANT, AS DISCUSSED EARLIER, PARTICULARLY IN THE CONTEXT O F IDENTITY AND CREDIT WORTHINESS OF THE SUBSCRIBERS AND THE GE NUINENESS OF SUCH TRANSACTIONS. MERE ASSERTIONS ARE NOT EN OUGH TO DEMOLISH SUCH EVIDENCES. IT IS PERTINENT TO MENTIO N HERE THAT THE AO, IN THE ASSESSMENT ORDER PASSED ON 22.12.201 0 U/S 143(3)/147 OF THE ACT, FOR THE ASSESSMENT YEAR IN Q UESTION, HIMSELF RECORDED THEREIN THAT AS PER AVAILABLE INFO RMATION ON RECORD, YOU HAVE ALLOTTED THE SHARES OF YOUR COMPAN Y DURING THE F.Y. 01.04.2005 TO 31.3.2006 TO THE FOLLOWING C OMPANIES (PARA 3 OF THE ASSESSMENT ORDER IN QUESTION). THUS , THE FACTUM OF ALLOTMENT OF SHARES TO VARIOUS COMPANIES, REMAINS UNDISPUTED, EVEN AS PER THE OBSERVATIONS OF THE AO, IN THE MATTER. THE ASSESSEE HAS FILED AFFIDAVIT, CONFIRMA TION INDICATING NUMBER OF SHARES, AMOUNT INVESTED, MODE OF INVESTMENT AS CHEQUE, BANK ACCOUNT NUMBER, SOURCE O F 23 FUNDS, OCCUPATION AND RECEIPT OF SHARE CERTIFICATE, INCOME TAX PIN NUMBER, PHOTO COPY OF THE ACKNOWLEDGEMENT O F RETURN OF INCOME, STATEMENT OF BANK ACCOUNT, AUDITE D PROFIT & LOSS ACCOUNT AND BALANCE SHEET, TO PROVE THE IDEN TITY AND EXISTENCE OF THE SUBSCRIBERS AS ALSO THE EVIDENCE O F INVESTMENT IN SHARES THROUGH BANKING CHANNELS. IN SUCH A FACT-SITUATION, ONUS SHIFTS ON THE AO, TO BRING CRE DIBLE MATERIAL ON RECORD TO SHOW THE NON-EXISTENCE OF SUC H SUBSCRIBERS AND NON-GENUINENESS OF SUCH TRANSACTION S. SIMILARLY, EVIDENCE IN THE FORM OF STATEMENT OF BAN K ACCOUNT FILED BY THE ASSESSEE, REMAINED UN-REBUTTED. 20. HAVING REGARD TO THE ABOVE LEGAL AND FACTUAL DI SCUSSION AND CONSIDERING THE DECISIONS RELIED UPON BY THE CI T(A), IN HIS FINDINGS AS ALSO THE DECISION CITED BEFORE US, WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE CIT(A). HENCE, THE SAME ARE UPHELD. CONSEQUENTLY, THE GROUND OF APPEA L OF THE REVENUE IS DISMISSED. 21. GROUND NOS. 2 & 3 ARE GENERAL IN NATURE AND, HE NCE, NEED NO SEPARATE ADJUDICATION AND THE SAME ARE DISM ISSED. 22. IN THE RESULT, BOTH THE CO OF THE ASSESSEE AND APPEAL OF THE REVENUE, ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JUNE,2012. (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 ND JUNE,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT ,DR ASSISTANT REGISTRAR, ITAT,CHANDIGARH.