M/S.ACRO EXPORTS TRADE PRIVATE LIMITED, Mumbai V. DCIT CENTRAL CIR-8(4), Mumbai

CO 74/MUM/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4616 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-08-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 22-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SOMNATH WAJALE
• Keywords: Reopening of assessment; Unexplained cash credit; Income from undisclosed sources; Share purchase agreement; Principle of natural justice; Opportunity of cross examination; Source of fund; Retrospective amendment; Question of law; Tangible material; Fair market value; Difference of opinion; Valuation report; Accommodation entries; Onus to prove; Retraction; Reason to believe; Change of opinion; Reassessment proceedings; Set aside
• Section: 143(3); 142(1); 56(2); 133A; 133(6); 143(1); 195; 147; 131; 68; 148; 56; 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENCH MU MBAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEM BER ITA NO.903/MUM/2018 ( ASSESSMENT YEAR :2009-10 ) DCIT, CC-8(4) ROOM NO. 658, 6 TH FLOOR AAYKAR BHAWAN, M.K.ROAD MUMBAI-400 020 VS. M/S ACRO EXPORTS TRADE PVT.LTD. 5 TH FLOOR, SUNTECK CENTRE, 37-40 SUBASH ROAD VILE PARLE(E) MUMBAI-400 057 PAN/GIR NO. AA HCA 6693B ( APPELLANT ) .. RESPONDENT ) & C.O. NO. 74/MUM/2019 (ARISING OUT OF ITA NO.903/MUM/2018) (ASSESSMENT YEAR: 2009-10) M/S ACRO EXPORTS TRADE PVT.LTD. 5 TH FLOOR, SUNTECK CENTRE, 37-40 SUBASH ROAD VILE PARLE(E) MUMBAI-400 057 VS. DCIT, CC-8(4) ROOM NO. 658, 6 TH FLOOR AAYKAR BHAWAN, M.K.ROAD MUMBAI-400 020 PAN/GIR NO. AAHCA6693B ( APPELLANT ) .. RESPONDENT ) & ITA NO.905/MUM/2018 ( ASSESSMENT YEAR :2009-10 ) DCIT, CC-8(4) ROOM NO. 658, 6 TH FLOOR AAYKAR BHAWAN, M.K.ROAD MUMBAI-400 020 VS. M/S AMAZON METALS PVT.LTD. 5 TH FLOOR, SUNTECK CENTRE, 37-40 SUBASH ROAD VILE PARLE(E) MUMBAI-400 057 PAN/GIR NO. AAICA0130C ( APPELLANT ) .. RESPONDENT ) ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 2 C.O. NO. 76/MUM/2019 (ARISING OUT OF ITA NO.905/MUM/2018) (ASSESSMENT YEAR: 2009-10) M/S AMAZON METALS PVT.LTD. 5 TH FLOOR, SUNTECK CENTRE, 37-40 SUBASH ROAD VILE PARLE(E) MUMBAI-400 057 VS. DCIT, CC-8(4) ROOM NO. 658, 6 TH FLOOR AAYKAR BHAWAN, M.K.ROAD MUMBAI-400 020 PAN/GIR NO. AAICA0130C ( APPELLANT ) .. RESPONDENT ) ASSESSEE BY RAKESH JOSHI REVENUE BY SOMNATH WAJALE DATE OF HEARING 17 / 07 /201 9 DATE OF PRONOUNCEMENT 28 / 0 8 /201 9 / O R D E R PER G.MANJUNATHA, ACCOUNTANT MEMBER : THESE TWO APPEALS, FILED BY THE REVENUE AND SEPARAT E CROSS- OBJECTIONS FILED BY THE ASSESSEES ARE DIRECTED AGA INST SEPARATE, BUT IDENTICAL ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-50, MUMBAI, BOTH DATED 22/12/2017 AND THEY PERTAIN TO A SSESSMENT YEAR (AY) 2009-10. SINCE, FACTS ARE IDENTICAL AND ISSUES ARE COMMON, FOR THE SAKE OF CONVENIENCE, THE APPEALS FI LED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE S ARE DISPOSED- OFF BY THIS CONSOLIDATED ORDER. ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 3 2. THE REVENUE HAS MORE OR LESS RAISED COMMON GROUN DS, IN BOTH APPEALS. THEREFORE, FOR THE SAKE OF BREVITY, A GROU ND OF APPEAL FILED BY THE REVENUE IN ITA NO. 903/MUM/2018 IS REPRODUCE D AS UNDER:- 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN SAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F RS. 9,80,00,000/- MADE BY THE ASSESSING OFFICER IGNORING THE FACT THAT THE AO HAS RIGHTLY CONSIDERED STATEMENT ADMITTED BY SHRI KAMAL KHETAN AND SHRI VIKASH SANKHLECH U/S 131 WAS AN CREDIBLE AND ADMISSIBLE IN THE EYES OF LAW? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS .9,80,00,000/- MADE BY THE ASSESSING OFFICER IGNORING THE FACT THAT STATEM ENT MADE U/S 131 GIVERS BY SHRI KAMAL KHETAN RETRACTED AFTER LONG GA P OF MORE THAN 2 YEARS, MAKING INORDINATE DELAY OF 2 THUS DESERVES T O BE REJECTED AS THE SAME WAS AN AFTERTHOUGHT ON THE PART OF THE ASSESSE E ? 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE STOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED.- 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER A NY GROUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 3. THE ASSESSEE HAS, TAKEN MORE OR LESS COMMON GROU NDS, IN THEIR RESPECTIVE CROSS OBJECTIONS. THEREFORE, FOR T HE SAKE OF BREVITY, GROUNDS OF CROSS OBJECTION FILED BY THE ASSESEE IN C.O.NO. 74/MUM/2019 IS REPRODUCED ARE UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING IN REOPENING THE ASSESSMENT U/S.147 OF THE INCOME T AX ACT, 1961, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE BRIEF FACTS OF THE CASE EXTRACTED FROM ITA N O. 903/MUM/2018 ARE THAT THE ASSESSEE COMPANY IS ENGAG ED IN THE BUSINESS OF FINANCING AND INVESTMENT ACTIVITIES AND TRADING IN FABRICS AND CLOTHS, FILED ITS RETURN OF INCOME FOR AY 2009- 10 ON 30/07/2009 DECLARING TOTAL LOSS AT RS. 24,676/-. THEREAFTER, T HE CASE HAS BEEN ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 4 REOPENED U/S 147 OF THE ACT, 1961, FOR REASONS RECO RDED, AS PER WHICH, INCOME CHARGEABLE TO TAX HAD BEEN ESCAPED AS SESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T.ACT, 1 961, ON ACCOUNT OF RECEIPT OF SHARE CAPITAL BY ISSUE OF SHARES AT HUGE PREMIUM OF RS. 460/- PER EQUITY SHARES HAVING FACE VALUE OF RS. 10 /- PER SHARE. THE REASONS, FURTHER STATED THAT INFORMATION RECEIVED F ROM THE OFFICE OF DIT(I & CI) BY THE ITO, WARD 1(1), KALYAN REGARDING HUGE PREMIUM RECEIVED BY THE ASSESEE COMPANY. THEREFORE, THE AO HAD REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD BEEN ESCA PED ASSESSMENT, ON ACCOUNT OF ISSUE OF SHARES TO VARIOU S PARTIES. ACCORDINGLY, NOTICE U/S 148 OF THE ACT, DATED 28/03 /2016 WAS ISSUED AND DULY SERVED UPON, THE ASSESSEE 31/03/2016. IN R ESPONSE TO NOTICE, THE ASSESSEE VIDE ITS LETTER DATED 28/07/20 16 REQUESTED TO TREAT THE RETURN OF INCOME FILED U/S 139 OF THE I.T .ACT, 1961, AS RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE I .T.ACT, 1961. THEREAFTER, THE ASSESSEE REQUESTED FOR REASONS FOR REOPENING OF THE ASSESSMENT AND SUCH REASONS WERE PROVIDED TO THE AS SESSEE. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) AND 142(1) OF THE I.T. ACT, 1961 WERE ISSUED. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT DURING THE PREVIOUS YEAR RELEVANT ASSESSMENT 2 009-10, THE ASSESEE HAD ISSUED 2,10,000/- EQUITY SHARES AT A FA CE VALUE OF RS. 10/- PER SHARE WITH A PREMIUM OF RS. 460/ PER SHARE . IN THIS REGARD, THE ASSESSEE WAS ASKED TO FURNISH NAME, ADDRESS, PA N OF THE PERSONS FROM WHOM, SHARE APPLICATION MONEY WAS RECE IVED. THE ASSESSEE WAS ALSO ASKED TO FURNISH JUSTIFICATIONS F OR SHARE PREMIUM ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 5 CHARGED AND COLLECTED AMOUNTING TO RS. 9,80,00,000/ -. THEREAFTER, THE AO, IN ORDER TO VERIFY, THE GENUINENESS OF TRAN SACTIONS AND ESTABLISH THE FACT, WHETHER THE ASSESSEE COMPANY CO MMENDS SUCH HUGE PREMIUM, ISSUED NOTICE 133(6) OF THE INCOME TA X ACT, 1961, TO THE BANK OF RAJASTHAN (NOW ICICI BANK LTD.) FOR THE PURPOSE OF ASCERTAINING DETAILS OF TRANSACTIONS FOR FINANCIAL YEAR 2008-09. THE AO HAS ALSO ISSUED NOTICES U/S 133(6) OF THE ACT, T O VARIOUS OTHER PARTIES WITH WHOM, THE ASSESSEE COMPANY HAS ENTERED INTO TRANSACTIONS, DURING THE RELEVANT PERIOD. HOWEVER, MOST OF THE NOTICES RETURNED UN-SERVED WITH A REMARK LEFT OR NOT KNOWN. THEREAFTER, THE AO DEPUTED INSPECTOR OF HIS OFFICE TO EXAMINE WHERE ABOUT OF THE BANK ADDRESS OF BANK OF RAJASTHAN AND THE INSPECTOR VISITED THE PREMISES AND NOTICED THAT BANK OF RAJAS THAN HAS BEEN TAKEN OVER BY THE ICICI BANK LTD. ACCORDINGLY, A L ETTER WAS ISSUED TO THE PRINCIPAL OFFICER OF ICICI BANK, CALLING FOR IN FORMATION U/S.133(6) OF THE ACT, IN RESPECT OF BANK STATEMENT FOR THE PE RIOD FROM 01/04/2008 TO 31/03/2015, FOR WHICH THE BANK HAS RE PLIED THAT THE BANK STATEMENT, FOR THE ABOVE PERIOD CANNOT BE FURN ISHED, BECAUSE THE NUMBER OF ACCOUNTS FURNISHED IN YOUR LETTER DO ES NOT MATCH WITH BANK ACCOUNT NUMBER BEGIN WITH ICICI BANK. THEREAFT ER, THE ASSESSEE WAS GIVEN A SHOW-CAUSE TO PRODUCE, THE COM PLETE BANK ACCOUNT STATEMENTS FOR THE PERIOD FROM 01/04/2008 T O 31/03/2015, FOR WHICH, THE ASSESEE HAS FILED COMPLETE SET OF DO CUMENTS, INCLUDING BANK STATEMENT FOR THE RELEVANT PERIOD. FURTHER, THE AO ISSUED SUMMONS TO THE PROMOTER OF SUNTECK GROUP SHR I KAMAL KHETAN AND RECORDED HIS STATEMENT OF OATH U/S 131 O F THE I.T.ACT, 1961, IN RESPECT OF INVESTMENTS AND SHARE PREMIUM C OLLECTED FROM ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 6 VARIOUS PARTIES AND SUCH STATEMENT HAS BEEN REPRODU CED AT PAGE NO. 7 TO 16 OF ASSESSMENT ORDER. 6. THE AO, AFTER CONSIDERING RELEVANT SUBMISSIONS O F THE ASSESSEE AND ALSO TAKEN NOTE OF SURVEY CONDUCTED, I N THE CASE OF SUNTECH GROUP U/S 133A OF THE I.T.ACT, 1961, ON 15 /10/2013, CAME TO THE CONCLUSION THAT ALTHOUGH, ASSESSEE CLAIMS TO HAVE FURNISHED VARIOUS DETAILS TO PROVE IDENTITY, GENUINENESS OF T RANSACTIONS AND CREDIT WORTHINESS OF THE PARTIES FROM WHOM, SHARE C APITAL ALONG WITH PREMIUM HAS BEEN COLLECTED, BUT SAID SUBMISSIONS CA NNOT BE ACCEPTED FOR THE REASONS THAT THE ASSESSE HAS FAILE D TO PROVE THAT STATEMENT RECORDED ,DURING THE COURSE OF THE SURVEY U/S 133A OF THE ACT, WAS UNDER DURESS COERCION. THE AO, FURTHER, OB SERVED THAT THE ASSESSEE RETRACTED FROM HIS STATEMENT, WITHOUT FILI NG ANY AFFIDAVIT BEFORE THE INVESTIGATION WING, AFTER THE COMPLETION OF THE SURVEY ON 15/10/2013. THE ASSESSEE HAS NOT BROUGHT THIS FACT, BEFORE THE CONSIDERATION OF THE DEPARTMENT. THUS, HE OPINED TH AT SUBSEQUENT STATEMENT GIVEN, DURING THE COURSE OF ASSESSMENT PR OCEEDINGS IS A AFTERTHOUGHT TO OVERCOME FINDINGS RECORDED BY THE S URVEY TEAM, DURING THE COURSE OF SURVEY AND ALSO TO ESCAPE FROM PROVISION OF INCOME TAX ASSESSMENT, ACCORDINGLY, REJECTED SUBSEQ UENT STATEMENT OF THE ASSESEE AND ALSO DENIED THE OPPORTUNITY OF C ROSS EXAMINATION SOUGHT BY THE ASSESSEE, AT THE TIME OF ASSESSMENT P ROCEEDINGS. THE AO, FURTHER OBSERVED THAT THE FACTS BROUGHT OUT DUR ING THE COURSE OF SURVEY PROCEEDINGS COUPLED WITH STATEMENTS RECORDED FROM PROMOTERS OF OMSHANTI AND SUNTECK GROUP CLEARLY ES TABLISHED THE FACT THAT THE ASSESSEE AND OTHER FIVE COMPANIES ARE SHELL ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 7 COMPANIES PROMOTED, FOR THE PURPOSE OF CONVERSION O F UNACCOUNTED INCOME OF SUNTECK GROUP, IN THE FORM OF SHARE CAPIT AL AND SHARE PREMIUM, WHICH IS EVIDENT FROM THE FACT THAT ALTH OUGH, THE ABOVE COMPANIES CARRIES HUGE RESERVES AND SURPLUS OF RS. 46.06 CRORES, BUT SAID COMPANIES HAVE BEEN TAKEN OVER BY SUNTECK GROUP THROUGH SK INFRASTRUCTURE PVT.LTD. AT FACE VALUE OF RS. 1 C RORE. HE, FURTHER ANALYZED FINANCIAL STATEMENT OF THE ASSESSEE COMPAN Y AND COME TO THE CONCLUSION THAT ALTHOUGH, THE ASSESSEE HAS ISSU ED SHARES AT HUGE PREMIUM, BUT ON PERUSAL OF ITS FINANCIAL STATE MENT, THE FINANCIAL OF THE COMPANY DOES NOT SUPPORT SUCH HUGE VALUATION OF SHARES, WHICH IS EVIDENT FROM THE FACT THAT IT HAS EARNED NIL INCOME FROM OPERATIONS AND ALSO DECLARED NET LOSS OF RS. 24,676 FOR THE YEAR UNDER CONSIDERATION. THEREFORE, HE OPINED THAT THE ASSESSEE HAS FAILED TO PROVE, CREDIT FOUND IN THE FORM OF SHARE CAPITAL AND SHARE PREMIUM RECEIVED FROM ALLOTMENT OF SHARES BY DISCHA RGING ITS ONUS CAST UPON U/S 68 OF THE I.T.ACT, 1961, IN ORDER TO PROVE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDIT WORTHINESS O F THE PARTIES AND ACCORDINGLY, BY RELIED UPON VARIOUS JUDICIAL PRECED ENTS, INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S UAMATI DAYAL VS CIT (995) 2014 ITR 801 AND ALSO DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS NOVA PROMOTERS & FINLEA SE PVT.LTD. (2012) 18 TAXMANN.COM 2017 HELD THAT THE ASSESEE HA S FAILED TO CONCLUSIVELY PROVE RECEIPT OF SHARE PREMIUM AS A GE NUINE TRANSACTION IN LIGHT OF PROVISION SECTION 68 OF TH E I.T.ACT, 1961 AND ACCORDINGLY, MADE ADDITIONS OF RS. 9,80,00,000/- U/ S 68 OF THE I.T.ACT, 1961. ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 8 7. AGGRIEVED, BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). BEFORE, THE LD. CI T(A), THE ASSESSEE HAD CHALLENGED REOPENING OF ASSESSMENT ON THE GROUN D THAT THE AO HAS REOPENED ASSESSMENT ON MECHANICAL MANNER ON THE BASIS OF INFORMATION RECEIVED FROM DIT(I&CI), WITHOUT APPLIC ATION OF HIS MIND ON THE ISSUE IN LIGHT OF RETURN FILED BY THE ASSESS EE. THE ASSESSEE HAD ALSO TAKEN ANOTHER LEG OF ARGUMENTS TO CONTEST REOPENING ASSESSMENT THAT THE AO HAD REOPENED ASSESSMENT WITH OUT THERE BEING ANY FRESH TANGIBLE MATERIALS IN HIS POSSESSIO N WHICH IS EVIDENT FROM THE FACT THAT THE REASONS RECORDED FOR REOPENI NG OF ASSESSMENT TALKS ABOUT RETURN OF INCOME, WHICH WAS ACCEPTED EA RLIER. THEREFORE, IN ABSENCE OF TANGIBLE MATERIALS, REOPENING IS BAD IN LAW WHETHER OR NOT ORIGINAL ASSESSMENT WAS MADE U/S 143(3) OF THE INCOME TAX ACT, 1961. IN THIS REGARD, HE RELIED UPON PLETHORA OF JU DICIAL PRECEDENTS. AS REGARDS, ADDITION TOWARDS SHARE CAPITAL U/S 68 O F THE ACT, THE ASSESSEE HAD FILED ELABORATE WRITTEN SUBMISSION WHI CH HAS BEEN REPRODUCED AT PARA 11 ON PAGES 16 TO 35 OF THE LD. CIT(A) ORDER. THE SUM AND SUBSTANCE OF ARGUMENTS OF THE ASSESSEE BEFO RE THE LD. CIT(A) ARE THAT TRANSACTION BETWEEN THE ASSESSEE AN D SHARE HOLDERS IN RESPECT OF ALLOTMENT OF EQUITY SHARES AT PREMIUM ARE GENUINE TRANSACTION WHICH IS SUPPORTED BY NECESSARY EVIDENC ES. THE ASSESSEE FURTHER CONTENDED WITH CERTAIN JUDICIAL PR ECEDENTS THAT IT HAD DISCHARGED ITS ONUS BY FILING ENORMOUS DOCUMENT S IN ORDER TO PROVE IDENTITY, GENUINENESS OF TRANSACTION AND CRED ITWORTHINESS OF PARTIES ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 9 8. THE LD. CIT(A), AFTER CONSIDERING RELEVANT SUBM ISSION OF THE ASSESSEE AND ALSO BY RELIED UPON THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF RAYMOND WOLLEN MILLS LTD VS. I TO(1996) 236 ITR 35 (SC) HELD THAT THE AO HAD REOPENED ASSESSMEN T ON THE BASIS OF INFORMATION RECEIVED FROM DIT(I&CI), WHICH PRIMA FACIE LED TO THE FORMATION OF BELIEF THAT INCOME CHARGEABLE T O TAX HAD BEEN ESCAPED ASSESSMENT, THEREFORE IN MY CONSIDERED OPIN ION, REOPENING OF ASSESSMENT WAS IN ACCORDANCE WITH PROVISIONS OF SECTION 147 OF THE INCOME TAX ACT, 1961. THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE AS UNDER:- 8.0 I HAVE GONE THROUGH THE ASSESSMENT ORDER, TH E APPELLANT'S SUBMISSION AND OTHER MATERIALS ON RECORD. 8.1 THE MAIN THRUST OF THE APPELLANT'S ARGUMENTS I S THAT THE A.O. HAS NOT APPLIED HIS MIND AND HAS MECHANICALLY REOPENED, THE ASSESSMENT FOR A.Y.2009-10. IN THIS REGARD, IT HAS BEEN NOTED THAT THE A.O. HAS RECEIVED CREDIBLE INFORMATION FROM DIT (I & CI),REGARDING TH E RECEIPT OF HUGE AMOUNT OF SHARE PREMIUM, WHICH ACCORDING TO THE A.O . WAS PRIMA-FACIE NOT JUSTIFIABLE. 8.2 IT IS PERTINENT TO NOTE THAT NO SCRUTINY ASSES SMENT WAS DONE IN THE CASE OF THE APPELLANT COMPANY AND THE CASE WAS JUST PROCESSED U/S 143(1) OF THE ACT. IN VIEW OF THIS, THERE WAS HARDL Y ANY INFORMATION ON RECORD, WHICH COULD HAVE EXPLAINED THE HUGE QUANTUM OF SHARE PREMIUM INTRODUCED DURING THE YEAR UNDER CONSIDERATION. THE A.O, HAS ALSO NOTED THAT THE APPELLANT IS A NEW COMPANY AND BARELY HAD THE FINANCIAL STRENGTH TO SUPPORT THE QUANTUM OF SHARE PREMIUM, AS HAS BEE N RECEIVED. 8.3 IT IS A MATTER OF RECORD THAT THE COPY OF [HE R EASONS RECORDED FOR REOPENING THE ASSESSMENT U/S 147 OF THE ACT WERE DU LY PROVIDED 10 THE APPELLANT COMPANY. DURING THE COURSE OF THE APPELLA TE PROCEEDINGS, THE APPELLANT COMPANY HAS FILED AN OBJECTION, VIDE LETT ER DATED 11.08.2016 FOR THE REOPENING OF ASSESSMENT. THIS OBJECTION HAS BEE N DULY DISPOSED OF BY THE A.O., VIDE HIS OFFICE FETTER DATED 16.08.201 6. THUS, THE A.O. HAS METICULOUSLY FOLLOWED THE DUE PROCEDURE FOR RE-OPEN ING OF THE ASSESSMENT U/S 147 OF THE ACT, WHICH CAN'T BE FAULT ED WITH. 8.4 THE SECTION 147 OF THE ACT AUTHORIZES AND PERMI TS, THE ASSESSING OFFICER TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX, IF HE HAS REASON ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 10 TO BELIEVE THAT INCOME FOR ANY ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. THE WORD REASONS IN THE PHRASE REASO N TO BELIEVE MEANS CAUSE OR JUSTIFICATION. IF THE ASSESSING OFFICER HA S CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEVE THAT AN INCOME HAD ESCAPED A SSESSMENT. THE EXPRESSION CANNOT BE READ TO MEAN THAT THE ASSESSIN G OFFICER SHOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL EVIDENCE OR CONCLUSION. THE FUNCTION OF TILT 1 ASSESSING OFFICER IS TO ADMINISTER THE STATUTE WIT H SOLICITUDE FOR THE PUBLIC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXPAYERS. 8.5 AT THE STAGE OF ISSUE OF NOTICE, THE ONLY QUEST ION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COUL D HAVE FORMED A REQUISITE BELIEF. WHETHER THE MATERIALS WOULD CONCL USIVELY PROVE THE ESCAPEMENT IS NOT THE CONCERN AT THAT STAGE. AT THA T STAGE, THE FINAL OUTCOME OF THE PROCEEDING IS NOT RELEVANT. IN OTHER WORDS, AT THE INITIATION STAGE, WHAT IS REQUIRED IS 'REASON TO BELIEVE', BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. THIS IS SO BECAUSE [THE FO RMATION OF BELIEF BY THE ASSESSING OFFICER IS WITHIN THE REALM OF SUBJEC TIVE SATISFACTION. [ITO V. SELECTED DALURBAND COAL CO. (P.) LTD. [1996] 217 ITR 597 (SC ) ; RAYMOND WOOLLEN MILLS LTD, VS I TO [1999]236 ITR 34 (SC)] 8.6 THE HON'BLE APEX COURT IN THE CASE OF AOT VS. R AJESH JHAVERI STOCK BROKERS PVT. LTTD (2007) (291 ITR 500) HAS CATEGORICALLY STATED THAT 'REASON TO BELIEVE' DOES NOT MEAN THAT THE REA SON FOR RE-OPENING SHOULD HAVE BEEN FACTUALLY ASCERTAINED BY LEGAL EVI DENCE OR CONCLUSION BEFORE THE RE-OPENING OF AN ASSESSMENT. 8.7 ANY FRESH INFORMATION RECEIVED BY THE A.O CAN. ENTITLE HIM TO ISSUE NOTICE U/S.148, IF ON THE BASIS OF SUCH INFORMATION , HE HAS PRIMA FACIE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMEN T. SO MUCH SO THAT IT WAS HELD BY THE HONBLE SUPREME COURT IN CLAGGET T BRACHI CO.LTD. VS CIT 177 ITR 409 (SC) THAT AN INFORMATION OBTAINED DURING ASSESSMENT PROCEEDINGS OF A SUBSEQUENT YEAR CAN ALSO VALIDATE THE PROCEEDINGS INITIATED U/S 147 FOR EARLIER YEAR. SIMILARLY, HON BLE BOMBAY HIGH COURT IN THE CASE OF ANUSANDHAN INVESTMENTS LTD. VS. M.R.SIN GH, DCIT, 287 ITR 482 HELD THAT A NOTICE ISSUED U/S. 148 BASED ON ASS ESSMENT OF SUBSEQUENT ASSESSMENT YEAR IS VALID EVEN IF THE APP EAL IS PENDING FOR SUCH ASSESSMENT. 8.8 FURTHER, IT IS THE DUTY OF THE ASSESSE TO D ISCLOSE FULL AND TRUE MATERIALS TO THE A.O. BUT FOR WHICH THE AO, COULD I NITIATE THE REASSESSMENT PROCEEDINGS. IT HAS BEEN HELD BY THE H ONBLE SUPREME COURT IN SHRI KRISHNA P. LTD. 221 ITR 538, 549 THAT EVERY DISCLOSURE IS NOT AND CANNOT BE TREATED TO BE A TRUE AND FULL DISCLOS URE. A DISCLOSURE MAY BE A FALSE ONE OR A TRUE ONE. IT MAY BE A FULL DISC LOSURE OR IT MAY NOT BE. THE HONBLE SUPREME COURT HELD THAT A PARTIAL DISCL OSURE MAY VERY OFTEN BE A MISLEADING ONE. THEREFORE, WHAT IS REQUIRED IS A FULL AND TRUE ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 11 DISCLOSURE OF ALL MATERIAL FACTS NECESSARY FOR MAKI NG ASSESSMENT FOR THAT YEAR. 8.9 THE HON'BLE SUPREME COURT IN THE CASE OF RAYMON D WOOLLEN MILLS LTD. VS. ITO 236 ITR 34, 35 (SC) HAS HELD THAT FOR DETERMINING W HETHER INITIATION OF REASSESSMENT PROCEEDINGS WAS VALID, I T HAS ONLY TO BE SEEN WHETHER THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT COULD REOPEN THE CASE. IT FURTHER HELD T HAT THE SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CO NSIDERED AT THIS STAGE. 8.10 THE PRESENT CASE IS ALSO NOT ONE OF CHANGE OF OPINION. THE QUESTION OF CHANGE OF OPINION ARISES, WHEN THE AO FORMS AN O PINION AND DECIDES NOT TO MAKE AN ADDITION AND HOLDS THAT THE APPELLAN T WAS CORRECT IN HIS STAND. 8.11 THE SUPREME COURT IN MALEGAON ELECTRICITY CO. (P) LTD. VS. CIT (1970) 78 ITR 466 (SC) HAS OBSERVED, AS UNDER : IF IS TRUE THAT IF THE ITO HAD MADE, SOME INVESTI0 AIION F PARTICULARLY IF HE HAD LOOKED INTO THE PREVIOUS ASSESSMENT RECOR DS, HE WOULD HAVE BEEN ABLE TO FIND OUT WHAT THE WRITTEN DOWN VA LUE OF THE ASSETS SOLD WAS AND CONSEQUENTLY HE WOULD HAVE BEEN ABLE TO FIND OUT THE PRICE IN EXCESS OF THEIR WRITTEN DOWN VALUE REALIZED BY THE ASSESSEE. IT CAN BE SAID THAT THE ITO IF HE HAD BEE N DILIGENT COULD HAVE GOT ALL THE NECESSARY INFORMATION FROM HIS REC ORDS. BUT THAT IS NOT THE SAME THING AS SAYING THAT THE ASSESSEE HAD PLACED BEFORE THE ITO TRULY AND FULLY ALL MATERIAL FACTS NECESSAR Y OF THE PURPOSE OF ASSESSMENT. THE LAW CASTS A DUTY ON THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT FOR THE YEAR. 8.12 WHEN THERE IS NO DISCUSSION ON THE ISSUE IN THE ASSESSMENT ORDER AND NO DETAILS WERE CALLED FOR BY THE AO OR FILED B Y THE ASSESSEE ON THE ISSUE, NO FINDING EITHER POSITIVE OR NEGATIVE CAN B E SAID TO HAVE BEEN ARRIVED AT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. HENCE, THERE IS NO QUESTION OF CHANGE OF OPINION, AS HAS B EEN HELD IN THE FOLLOWING JUDGMENTS: 1. KALYANJI MAVJI& CO. VS. CIT 102 ITR 287 (SC) 2. ESSKAY ENGINEERING P. LTD. VS. CIT 247 ITR 818 3. ITO V PURUSHOTTAM DAS BANGUR & ANR. 224 ITR 362 (SC) 8.13 IN WRIT PETITION. NO. 9036 OF 2007, HONDA SIELPOWER PRODUCTS LTD. VS DYCLT&ANR. DECISION DT. 14TH FEB. 2011 REPORTED IN (2011) 52 DTR (DEL) 353 - ED.), IT WAS HELD AS UNDER:- '10 THE TERM 'FAILURE' ON THE PAN OF THE ASSESSEE I S NOT RESTRICTED ONLY TO THE IT RETURN AND THE COLUMNS OF THE IT RET URN OR THE TAX ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 12 AUDIT REPORT. THIS IS THE FIRST STAGE. THE SAID EXP RESSION 'FAILURE TO FULLY AND TRULY DISCLOSE MATERIAL FACTS' ALSO RELAT E TO THE STAGE OF THE ASSESSMENT PROCEEDING, THE SECOND STAGE. THERE CAN BE OMISSION AND FAILURE ON THE PART, OF THE ASSESSEE TO DISCLOS E FULLY AND TRULY MATERIAL FACTS DURING- THE COURSE OF THE ASSESSMENT PROCEEDINGS. THIS CAN HAPPEN WHEN THE ASSESSEE DOES NOT DISCLOSE OR FURNISH TO THE AO COMPLETE AND CORRECT INFORMATION AND DETA ILS IT IS REQUIRED AND UNDER AN OBLIGATION TO DISCLOSE. BURDE N IS ON THE. ASSESSES TO MAKE FULL AND THE TRUE DISCLOSURE'. 8.14 FURTHER, IN THE CASE OF PIAGGIO VEHICLES P. LTD. YS. DCIT 290 ITR 377 (BOM), THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT IN A CASE OF REOPENING AFTER 4 YEARS SUBSEQUENT 10 SCRUTINY ASSE SSMENTS, CONTRADICTION WAS DISCOVERED BETWEEN TAX AUDIT REP ORT AND RETURN OF INCOME, IT WAS A CASE OF OMISSION AND /OR FAILURE O N THE PART OF ITS INCOME. IT IS ALSO HELD BY HONBLE SUPREME COURT THAT FACTS WHICH COULD HAVE BEEN FOUND BY THE ITO BY FURTHER PROBING ARC COVERE D UNDER FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. 8.15 IN THE CASE OF COCA COLA INDIA VS. ACIT &OR& (2009)221 CTR 0225 : (2009) 17 DTR 0066 : (2009) 309 ITR 0194 ; ( 2009) 177 TAXMAN 0103, THE HON'BLE PUNJAB & HARYANA HIGH COURT HAS HELD THAT NOTICE U/S 147 SHOULD BE HELD AS BAD IN LAW, ONLY I F EXTRANEOUS OR ABSURD REASONS ARE RECORDED BY THE AO, R WAS FURTHER HELD BY THE HON'BLE COURT THAT WHETHER OR NOT THE MATERIAL SHOULD BE FINALLY TAKEN INTO ACCOUNT FOR REASSESSMENT IS A SEPARATE MATTER, WHICH HAS TO BE DEALT WITH DURING THE COURSE OF REASSESSMENT PROCEEDINGS. THE RELEVANT PO RTION OF THE JUDGMENT IN THIS REGARD IS REPRODUCED AS UNDER: - 'OBJECTION OF COUNSEL FOR PETITIONER IS TWO FOLD :- (A) REFERENCE TO INAPPLICABLE PROVISION OF S. 92 AS IT STOOD PRIOR L O AMENDMENT W.E.F. 1ST APRIL, 2002 AND (B) IRRELEVANCE OF ORDER OF THE TPO UNDER CHAPTER X PASSED IN RESPECT OF A SUBSEQUENT ASSESSM ENT YEAR. APPLICABILITY OF S. 147 REQUIRES FORMATION OF OPINI ON THAT INCOME ESCAPED ASSESSMENT. THE SAID PROVISION IS NOT IF! A RTY MANNER CONTROLLED BY S. 92 NOR THERE IS ANY LIMIT TO CONSI DERATION OF ANY MATERIAL HAVING NEXUS WITH THE OPINION ON THE ISSUE OF ESCAPEMENT OF ASSESSMENT OF INCOME, INTERFERENCE WITH THE NOTI CE FOR REASSESSMENT IS CALLED FOR ONLY WHERE EXTRANEOUS OR ABSURD REASONS ARE MADE THE BASIS [OR OPINION PRO/WRING TO REASSESS. APART FROM THE FACT THAT THE AO HAS GIVEN OTHER REA SONS, IT CANNOT BE HELD THAT THE MATERIAL RELIED UPON BY THE AO FOR PROPOSING REASSESSMENT IS IRRELEVANT WHETHER OR NOT, THE SAID MATERIAL SHOULD BE. FINALLY TAKEN INTO ACCOUNT FOR REASSESSM ENT IS A MATTER WHICH HAS TO BE LEFT OPEN TO BE DECIDED BY THE AO A FTER CONSIDERING THE EXPLANATION OF THE ASSESSEE. IT CAN ONLY BE MENTIONED THAT HAVING REGARD TO RELATIONSHIP OF THE PETITIONER TO ITS ASSOCIATE COMPANY, IT CANNOT HE CLAIMED {HAT THE PR ICE MENTIONED ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 13 BY IT MUST HE ACCEPTED AS FINAL AND MAY NOT HE LOOK ED AT BY THE AO. THERE IS NO INFIRMITY IN THE NOTICE PROPOSING R EASSESSMENT. THE AO WILL BE AT LIBERTY TO PASS AN APPROPRIATE OR DER OF ASSESSMENT, SUBJECT TO THE RIGHTS AND REMEDIES OF T HE ASSESSEE. ORDER OF THE TPO CAN CERTAINLY HAVE NEXUS FOR REACH ING THE CONCLUSION THAT INCOME HAS BEEN INCORRECTLY ASSESSE D OR HAS ESCAPED ASSESSMENT. IN THE PRESENT CASE, THE SAID M ATERIAL CAME TO THE NOTICE OF THE AO SUBSEQUENT TO THE ASSESSMEN T. THERE IS NO GRIEVANCE THAT PROVISIONS OF SS. 148 TO 153 HAVE NO T BEEN FOLLOWED. IN SUCH A SITUATION, IT CANNOT BE HELD THAT THE NOT ICE PROPOSING REASSESSMENT IS VITIATED MERELY BECAUSE ONE OF THE REASONS. REFERRED TO ORDER OF TPO- RAYMOND WOOLLEN MILLS LTD , VS. ITO &ORS. (1999) 152 CTR (SC) 418 ; (1999) 236 ITR 34 ( SC) AND PHOOL CHAND BAJRANG LAL VS. ITO (1 993) 203 ITR 456 (SC): AIR 1993 SC 2390 RELIED UPON. (PARAS 46, 47, 50&51) 8.16 IN VIEW OF THE ABOVE BINDING PRECEDENTS OF THE HON'BLE SUPREME COURT, 1 AM OF THE VIEW THAT T HE AO HAD VALID REA SONS TO INITIATE REASSESSMENT PROCEEDINGS WHICH WERE DULY RECORDED A ND COMMUNICATED TO THE APPELLANT. 8.17 THUS, THERE IS NO DENYING OF THE FACT THAT THE A.O HAD IN HIS POSSESSION, CREDIBLE INFORMATION, WHICH PRIMA FACIE LED TO THE FORMATION OF A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT IN THE CASE OF THE APPELLANT COMPANY. THEREFORE, IN MY CONSIDERED OPINION, REOPE NING OF ASSESSMENT WAS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 14 7 OF THE INCOME TAX ACT. ACCORDINGLY, THIS GROUND OF APPEAL NO.1 OF TH E APPELLANT COMPANY IS DISMISSED. 9. INSOFAR AS, ADDITIONS MADE TOWARDS SHARE CAPI TAL U/S 68 OF THE INCOME TAX ACT, 1961, THE LD. CIT(A) AFTER CONSIDER ING RELEVANT SUBMISSION OF THE ASSESSEE AND ALSO BY RELIED UPON PLETHORA OF JUDGMENTS, INCLUDING THE DECISION OF HONBLE SUPREM E COURT IN CASE OF LOVELY EXPORTS PVT. LTD. VS. CIT, 216 CTR 195, H ELD THAT THE ASSESSEE HAD FILED ENORMOUS DETAILS TO PROVE IDENTI TY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF PARTIES, BUT IT WAS THE AO WHO HAD FAILED TO INVESTIGATE THE CASE PROPERLY, TO REB UTTE DETAILS FILED BY THE ASSESSEE TO COME TO THE CONCLUSION THAT THE CR EDIT IN FORM OF ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 14 SHARE CAPITAL IS UNEXPLAINED CREDIT WITHIN THE MEAN ING OF SECTION 68 OF THE INCOME TAX ACT, 1961. THE CIT(A) HAD ALSO DI SCUSSED THE ISSUE IN LIGHT OF DECISION OF HONBLE SUPREME COURT IN CASE OF KISHINCHAND CHELLARAM VS CIT, 125 ITR 713, AND ANDA MAN TIMBER INDUSTRIES LTD VS CCE,(2015) 62 TAXMANN.COM 3(SC) A ND HELD THAT THE AO HAD USED THIRD PARTY INFORMATION IN CONTRAVE NTION OF PRINCIPLES NATURAL JUSTICE, WITHOUT FURNISHING SAID INFORMATIO N TO THE ASSESSEE FOR ITS REBUTTAL, AND THUS, VIOLATED PRINCIPLES OF NATURAL JUSTICE, CONSEQUENTLY ADDITIONS CANNOT BE SUSTAINED. THE REL EVANT FINDINGS OF THE LD. CIT(A) ARE AS UNDER. 12.16 A PERUSAL OF THE VARIOUS STATEMENTS OF SHRI KAMAL KHETAN, REVEALS THAT HE HAS CATEGORICALLY DENIED ANY KNOWLEDGE- ABO UT THE TRANSACTION OF INVESTMENTS AND SHARE CAPITAL IN [HE ABOVE MENTIONE D FIVE COMPANIES, WHICH WERE TAKEN OVER THROUGH THE HOLDING COMPANY N AMELY M/S AKSHUNYA ENERGY PRIVATE LIMITED. SHRI KHETAN IN HIS STATEMENTS HAS ADMITTED THAT M/S ESKAY INFRASTRUCTURE PVT. LID. HA D INVESTED A SUM OF RS. 1 CRORE IN M/S AKSHUNYA ENERGY PRIVATE LIMITED. MOREOVER, IN THE STATEMENT HE ALSO CONFIRMS THAT AS THESE COMPANIES WERE TAKEN OVER IN THE F.Y. 2011-12 RELEVANT TO A.Y. 2012-13, HE DOES NOT KNOW, US TO WHAT HAS HAPPENED IN F.Y. 2008-09 RELEVANT TO 2009-10, W HEN HE WAS NOT EVEN THE SHAREHOLDER OF THESE COMPANIES. 12.17 A PERUSAL OF THE VARIOUS STATEMENTS AND MATER IAL ON RECORD, CLEARLY REVEALS THE FACT THAT ALL THESE 5 COMPANIES WERE TA KEN OVER THROUGH M/S AKSHUNYA ENERGY PRIVATE LIMITED BY SHRI KAMAL KHETA N OF SUNTECK GROUP M THE A.Y. 2012-13. ON THE CONTRARY, THE ENTI RE ADDITION U/S 68 OF THE ACT FOR THE SHARE PREMIUM HAS BEEN MADE BY THE A.O. IN A.Y. 2009- 10 BASED ON THE ABOVE NARRATED PLACEMENTS OF SHRI K AMAL KHETAN & SHRI VIKAS SANKHLECHA, WHICH ARE WITH REFERENCE TO SUBS EQUENT EVENTS FALLING IN A.Y. 2012-13. 12.18 IT IS PERTINENT TO NOTE THAT IN RELATION TO THE CURRENT A.Y, 2009-10, SHRI KAMAL KHETAN WAS IN NO WAY CONNECTED WITH ANY OF THE 5 COMPANIES VIZ. M/S PALI FABRICS PVT LTD., M/S ACRO EXPORTS TRADE PVT.LTD. M/S AMAZON METAL PVT. LTD., M/S BELL FABRICS PVL. LTD.& M/S GANDHAR YARN PVT. LTD, IT IS ALSO A FACT THAT IN THE A.Y. 2 009-10, SHRI KAINAL KHETAN WAS NM CONNECTED / RELATED EVEN WITH THE HOLDING CO MPANY NAMELY, M/S AKSHUNYA ENERGY PRIVATE LIMITED, SHRI KAMAL KHETAN WAS NEITHER A SHAREHOLDER NOR A DIRECTOR IN THE 5 COMPANIES OR IT 'S HOLDING COMPANY IN ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 15 THE A.Y. 2009-10. IT WAS ONLY IN A.Y. 2012-13 TH AT SHRI KAMAL KHETAN OF SUNTECK GROUP HAS TAKEN OV ER M/S AKSHUNYAENERGY PRIVATE LIMITED THROUGH M/S ESKAY INFRASTRUCTURE PR IVATE LTD ( A CONCERN OF SUNTECK GROUP) 12.19 IN VIEW OF THESE CIRCUMSTANCES, IT IS FACTUAL LY INCORRECT TO ADVERSELY INTERPRET THE STATEMENTS OF SHRI KAMAL KHETAN & SHR I VIKAS SANKLECHA, WHICH ARE NOT RELEVANT FOR THE CURRENT ASSESSMENT Y EAR I.E. A.Y. 2009-10. IT IS PERTINENT TO NOTE THAT NEITHER SHRI KAMAL KHE TAN NOR SHRI VIKAS SANKLEEHA, HAD ANY LOCUS-STANDI IN A.Y. 2009-10, IN RELATION 10 THE IMPUGNED J COMPANIES. IN FACT, IN ALL THE STATEMENT S RECORDED OF SHRI KAMAL KHETAN& SHRI VIKAS SANKLECHA ARE REFERRING TO EVENTS, WHICH HAVE HAPPENED AFTER THE CURRENT ASSESSMENT YEAR UNDER CO NSIDERATION. 12.20 THE ABOVE OBSERVATIONS ARE FURTHER REINFOR CED FROM THE FACT THAT SHRI KAMAL KHETAN HAS NOT MADE ANY DISCLOSURE FOR T HE A,Y. 2009-10, THE CURRENT ASSESSMENT YEAR, UNDER CONSIDERATION. AT TH E COST OF REPETITION, IT IS STATED THAT SHRI KAMAL KHETAN HAS MADE A DISCLOS URE OF RS 47.6 CRORE RELEVANT TO A.Y. 2010-11, A.Y, 201243 & A.Y. 2013-1 4. 12.21 FURTHER, THE AO, HAS WITHOUT BRINGING ON RECO RD ANY MATERIAL EVIDENCE HELD THAT THE IMPUGNED 5 COMPANIES INCLUDI NG THE APPELLANT ARE SHELL COMPANIES. DURING THE COURSE OF THE APPELLAT E PROCEEDINGS, THE APPELLANT HAS FILED THE DETAILS OF THESE COMPANIES DOWNLOADED FROM THE SITE, OF MINISTRY OF CORPORATE AFFAIRS SHOWING THAT IN THE CASE OF ALL THE IMPUGNED 5 COMPANIES, ACCOUNTS HAVE BEEN FILED TILL 31.03.2017. FURTHER, THE STATUS OF ALL THE COMPANIES IN THE ROC DATA HAS BEEN SHOWN AS ''ACTIVE'. ON THE BASIS OF THE INFORMATION SUPPLIED BY THE APPELLANT, WHICH IS IN PUBLIC DOMAIN, I HAVE NOTED THAT ALL THE 5 CO MPANIES ARE STILL ACTIVE COMPANIES AND ARE FILING THEIR RETURNS WITH ROC ON REGULAR BASIS. DURING [HE COURSE OF THE APPELLATE PROCEEDINGS, IT WAS ALS O ARGUED THAT NONE OF THESE COMPANIES ARE SHELL COMPANIES, AS THEIR NAMES DON'T FIND MENTION IN THE LIST OF SUCH COMPANIES MAINTAINED BY SEBI, I T OR ANY OTHER REGULATORY AUTHORITY. 12.22 THE APPELLANT HAS FURTHER SUBMITTED THAT DURI NG THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD A SKED THE APPELLANT COMPANY TO FURNISH NAME, ADDRESS, PAN OF THE PERSON S FROM WHOM THE SHARE APPLICATION AND PREMIUM WAS RECEIVED, SHARE A LLOTMENT CERTIFICATES, CONFIRMATION FROM THE PARTIES TO WHOM SHARE WERE AL LOTTED AND BANK STATEMENT ETC. IN ORDER TO VERIFY THE IDENTITY, GEN UINENESS AND CREDITWORTHINESS OF THE INVESTOR. 12.23 I HAVE NOTED THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE APPELLANT HAS FILED VARIOUS DETAIL S SUCH AS SHARE APPLICATION FORM, COPY OF DECLARATION, BOARD RESOLU TION, HANK STATEMENT OF INVESTOR COMPANY, PAN CARD, ACKNOWLEDGEMENT OF RE TURN OF INCOME, FINANCIAL STATEMENT OF INVESTOR COMPANY, FORM NO 2 FOR ALLOTMENT, RANK ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 16 STATEMENT REFLECTING THE AMOUNT RECEIVED THROUGH BA NKING CHANNEL, ETC IN ORDER TO PROVE THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE INVESTOR. SUCH DETAILS WERE ALSO FILED BEFORE THE U NDERSIGNED, DURING THE COURSE OF THE APPELLATE PROCEEDINGS, IT IS A FACT T HAT THE AO HAS NOT RAISED ANY DOUBT ON ANY OF THE VOLUMINOUS' DOCUMENTARY EVI DENCE PLACED ON RECORD, BY THE APPELLANT, NO FURTHER VERIFICATION O R ENQUIRIES WERE DONE BY THE A.O. ON THE DOCUMENTATION OF SHAREHOLDERS / INV ESTORS PROVIDED BY THE APPELLANT. THUS, THE APPELLANT COMPANY HAS DULY DISCHARGED THE ONUS FOR PROVING THE IDENTITY, GENUINENESS AND CRED ITWORTHINESS OF THE VARIOUS INVESTORS. 12.24 AS REGARDS THE VALUATION OF THE SHARES OF THE APPELLANT COMPANY IS CONCERNED, IT HAS BEEN SUBMITTED THAT VALUATION IS A CONSIDERATION FOR THE INVESTOR AND NOT FOR THE REVENUE, ESPECIALLY IN THE LIGHT OF THE FACT THAT THE PROVISIONS OF SECTION 56(2)(VIIB) WERE INTRODUCED I N THE STATUE W.E.F. 01.04.2013 AND HAVE NOT BEEN GIVEN RETROSPECTIVE EF FECT. THUS, AS PER THE APPELLANT, THE PROVISIONS OF SECTION 56(2)(VIIB ) ARE APPLICABLE FROM THE A.Y, 2013-14 AND ONWARDS. ACCORDINGLY, IT HAS BEEN SUBMITTED THAT THE A.Q, OUGHT TO HAVE CONSIDERED THE LAW AS IT WAS IN FORCE DURING A-Y.2009- 10. IT HAS ALSO BEEN EMPHASIZED, DURING THE APPELLA TE PROCEEDINGS THAT EVEN THE FIRST PROVISO APPENDED 10 SECTION 68 OF TH E ACT, WHICH REQUIRES THE INVESTOR ALSO, TO SATISFACTORY EXPLAIN THE NATU RE AND SOURCE OF THE CREDITS WAS INSERTED W.E.F 01.04.2013 I.E. FROM A. Y, 2013-14 AND HENCE THE SAME IS NOT APPLICABLE FOR THE PRESENT ASSESSME NT YEAR, VIZ. A.Y. 2009-10. 12.25 AS REGARDS THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT ARE CONCERNED, THE APPELLANT COMPANY HAS STATED THAT DU E TO TIME LAG CERTAIN PERSONS MIGHT HAVE LEFT THE PLACE AND FOR THIS NO R ESPONSIBILITY CA BE FASTENED ON THE APPELLANT. IT HAS BEEN STATED THAT THE APPELLANT HAS FURNISHED THE FOLLOWING DETAILS TO THE A.O., REGARD ING THE RECEIPT OF SHARE PREMIUM:- 1. SHARE APPLICATION FORM 2. COPY OF DECLARATION 3. BOARD RESOLUTION 4. BANK STATEMENT OF INVESTOR COMPANY 5. PAN CARD 6. ACKNOWLEDGEMENT OF RETURN OF INCOME 7. FINANCIAL STATEMENT OF INVESTOR COMPANY 8. FORM NO.2 FOR ALLOTMENT 9. BANK STATEMENT REFLECTING THE AMOUNT RECEIVE D T HROUGH BANKING CHANNEL 12.26 THE APPELLANT COMPANY HAS CONTENDED THAT BY F URNISHING THE ABOVE MENTIONED DETAILS REGARDING THE INVESTORS, THE APPE LLANT HAS DULY DISCHARGED THE INITIAL ONUS CAST ON IT. AFTER THIS STAGE, THE ONUS SHIFTS ON THE A.G. TO SHOW AS TO HOW THE EXPLANATION FURNISHE D BY APPELLANT IS NOT ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 17 SATISFACTORY IN HIS OPINION. IN THIS REGARD, THE AP PELLANT HAS ALSO RELIED ON THE JUDGMENT OF JURISDICTIONAL HIGH COURT OF BOMBAY ID THE CASE OF C1T VS. GAGANDEEP INFRASTRUCTURE PVT. LTD, 394 ITK 680, THE RELEVANT PORTION OF WHICH IS REPRODUCED HEREUNDER:- ' PROVISO TO SECTION 68 INTRODUCED BY FINANCE ACT 2 012 WITH EFFECT FROM 1- 4-2013, WOULD NOT HAVE RETROSPECTIVE EFFECT. WHERE ASSESSEE-COMPANY HAD ESTABLISHED IDENTITY, GENUINENESS AND CAPACITY OF SHAREHOLDERS WHO HAD SUBSCRIBED TO ITS SHARES, ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING AMOUNT OF SHARE CAPITAL SUBSCRIPTION AS UNEXPLAINED CREDIT. WHERE REVENUE URGED THAT ASSESSES HAD RECEIVED SHARE APPL ICATION MONEY FROM BOGUS SHAREHOLDERS, IT WAS FOR INCOME-TAX OFFICERS TO PROCEED BY REOPENING ASSESSMENT OF SUCH SHAREHOLDERS AND ASSES SING THEM TO TAX IN ACCORDANCE WITH LAW AND IT DID NOT ENTITLE REVENUE TO ADD SAME TO ASSESSEES INCOME AS UNEXPLAINED CASH CREDIT. 12. 27 THE APPELLANT COMPANY HAS ALSO RELIED UPON T HE DECISION OF APEX COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD, , 216 CTR 195, WHEREIN IT WAS HELD AS UNDER:- THE ASSESSEE HAD RECEIVED CERTAIN AMOUNTS FROM VAR IOUS PERSONS AS SHARE APPLICATION MONEY. NO ADDITION ON ACCOUNT UNEXPLAINED CASH CREDITS COULD BE MADE TO ITS INCOME IN THE ABSENCE OF ANY EVIDENCE TO SUGGEST THAT THE SUBSCRIBERS WERE BENAMIDARS OR ANY PART OF THE SHARE CAPITAL REPRESENTED THE ASSESSEES OWN INCOME FROM UNDISCLOSED SOURCES, AS THE ASSESSEE HAD FURNISHED RELEVANT DET AILS OF THE SUBSCRIBERS AND THE SHARES WERE ALLOTTED AS PER THE RULES OF STOCK EXCHANGE.' 12.28 APART FROM THE ABOVE TWO DECISIONS, THE APPEL LANT COMPANY HAS ALSO RELIED ON MANY OTHER DECISIONS IN SUPPORT OF I TS CONTENTION THAT NO SUCH ADDITION COULD HAVE BEEN MADE BY THE ASSESSING OFFICER IN THE LIGHT OF THE FACT THAT STATUE WAS AMENDED WITH THE PROVIS O APPENDED TO SECTION 68 W.E.F. A.Y.2013-14 AND IT WAS NOT A RETROSPECTIVE AMENDMENT. 12. 29 ANOTHER OBJECTION OF THE A.O. CONTAINED I N THE ASSESSMENT ORDER IS THAT THE BANK OF THE APPELLANT COMPANY HAS FAILE D TO PROVIDE THE BANK STATEMENT OF THE APPELLANT COMPANY, WHICH WAS REQUI SITIONED UNDER SECTION 133(6) OF THE ACT. AS FAR AS THE ISSUE OF B ANK STATEMENT IS CONCERNED, THE APPELLANT COMPANY HAS SUPPLIED THE S AME TO THE A.O., DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ITSELF . IN FACT THE A.O. HAS MADE OBSERVATIONS IN THE ASSESSMENT ORDER BASED ON THE BANK STATEMENTS PROVIDED BY THE APPELLANT COMPANY. HENCE , NO ADVERSE INFERENCE CAN BE DRAWN BY THE A.O. ON THIS ISSUE. 12.30 THE A.O. HAS ERRED IN RELYING ON THE STATEMEN TS OF SHRI KAMAL KHETAN& SHRI VIKAS SANKLECHA FOR MAKING ADDITION ON ACCOUNT OF SHARE PREMIUM U/S 68 OF THE ACT, FOR THE CURRENT YEAR UND ER CONSIDERATION. THE ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 18 A.O. HAS FAILED TO APPRECIATE THAT THE STATEMENTS O F SHRI KAMAL KHETAN& SHRI VIKAS SANKLECHA RELATE TO EVENTS, WHICH HAVE HAPPENED SUBSEQUENT TO THE CURRENT ASSESSMENT YEAR UNDER CONSIDERATION. THE A.O. HAS ALSO IGNORED THE FACT THAT SHRI KAMAL KHETAN HAS NOT MAD E ANY DISCLOSURE OF INCOME FOR THE CURRENT ASSESSMENT YEAR UNDER CONSID ERATION, IN ANY OF HIS STATEMENT RECORDED BY THE DEPARTMENT. IN HIS STATEM ENTS RECORDED BY THE. DEPARTMENT, SHRI KAMAL KHETAN HAS STATED THAT HE IS UNAWARE ABOUT THE INTRODUCTION OF THE SHARE PREMIUM, AS IT WAS HA NDLED BY THE OLD MANAGEMENT. EVEN THE STATEMENT RECORDED OF SHRI VIK AS SAAKLECHA REFERS LO EVENTS, WHICH HAVE HAPPENED IN THE SUBSEQ UENT ASSESSMENT YEARS. THUS, THE RELIANCE OF THE AO ON THE STATEMEN TS OF SHRI KAMAL KHETAN& SHRI VIKAS SANKLECHA FOR MAKING THE ADDITIO N IN THE CURRENT YEAR UNDER CONSIDERATION, IS MISPLACED AND CONTRARY TO M ATERIAL FACTS ON RECORD. 12.31 IN FACT, FOR MAKING A CASE OF ADDITION U/S 68 OF THE ACT FOR THE CURRENT YEAR UNDER CONSIDERATION, THE A.O. SHOULD H AVE EXAMINED & REBUTTED THE VOLUMINOUS DETAILS OF SHAREHOLDERS FUR NISHED BY THE APPELLANT COMPANY, DURING THE COURSE OF THE ASSESSM ENT PROCEEDINGS. THE AO HAS NOT PLACED ANY ADVERSE MATERIAL ON RECO RD IN RELATION TO THE ACTUAL SHAREHOLDERS, WHO HAVE PAID THE SHARE PREMIU M TO THE APPELLANT COMPANY AND INSTEAD ERRONEOUSLY RELIED ON A SUBSEQU ENT CHANGE IN SHAREHOLDING IN A.Y. 2012-13, OF A HOLDING COMPANY, NAMELY M/S AKSHUNYA ENERGY PRIVATE LIMITED. 12.32 I HAVE ALSO TAKEN NOTE OF THE FACT THAT ON SIMILAR FACTS AND CIRCUMSTANCES, MY ID. PREDECESSOR CIT(A)-50, MUMBAI HAS IN A CONNECTED CASE OF M/S PRIME DEVELOPERS FOR A,Y. 201 2-1 3 IN APPEAL NO. CIT(A) 50/1T-186/2015-16, VIDE ORDER DATED 24.0 2.2017 DELETED THE ADDITION MADE ON THE BASIS OF STATEMENT OF SHRI PAR AS PORWAL& SHN VIKAS SANKLECHA. IN THE PRESENT APPEAL AT HAND, INSTEAD OF SHRI PARAS PORWAL OF ''OM SHANTI GROUP', SHRI KAMAL KHETAN OF 'SUNTEC K GROUP' IS INVOLVED. MY LD. PREDECESSOR CIT(A)-50, MUMBAI HAS DELETED TH E ADDITION IN THE CASE OF M/S PRIME DEVELOPERS FOR AT. 2012-13 BY HOL DING AS UNDER;- '6. 1 IN THE COURSE OF THE APPEAL PROCEEDINGS, T HE AR OF THE APPELLANT SUBMITTED THAT THE ADDITION IS NOT SUSTAI NABLE FOR THE FOLLOWING REASONS: LD. A.O. MADE ADDITION WITHOUT BRINGING MATERIAL ON RECORDS WHICH IS BAD IN TAW. MR PARAS PONVAL WAS NOT PARTNER AND EMPLOYEE OF THI S FIRM AND HENCE THE ADDITION IS BAD IN LAWS. THERE SHOULD SUFFICIENT AND ADEQUATE MATERIAL ON RE CORDS FOR MAKING ANY ADDITION. DURING THE ASSESSMENT YEAR THERE WAS NOT PURCHASES AND SALES OF PROPERLY AND ASSESSES PROFIT & LOSS ACCOUNT SHOWS V ERY CLEARLY THAT THERE WAS NOT DEAF IN IMMOVABLE PROPERTY DURING THE YEAR. ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 19 THE STATEMENT GIVEN BY PARAS PORWAL IS RETREATED BY HIM ON 26 JULY 2013 AND HE SAID RETRACTION CONFIRMED ON 29-04-2014 VIDE AFFIDAVIT. THE LD. A.O DID NOT BRING ANY CALCULATION AND SUPPO RTING EVIDENCES ON RECORDS THAT HOW TO DERIVED THIS AMOUNT AND HOW TO EARN THIS INCOME FROM ASSESSEE. ADDITION MADE ON A STATEMENT WHICH WAS RETREATED BY PARTY CANNOT CONCLUDED AS RELIABLE EVIDENCES. 6.2 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBM ISSIONS OF THE APPELLANT. I FIND THAT THE ADDITION OF RS. 28,6 0,00,000/- WAS MADE SOLELY ON THE BASIS OF THE STATEMENT OF SHRI PARAS PORWAL. THE APPELLANT HAS CONTESTED THE ADDITION ON THE GROUND THAT SHRI PARAS PORWAL IS NOT CONNECTED WITH THE FIRM (APPELLANT)'. AS PER THE A PPELLANT, SHRI PARAS PORWAL HAS NO LOCUS STANDI AS FAR AS THE AFFAIRS OF THE APPELLANT IS CONCERNED. THE ASSESSING OFFICER ON THE OTHER HAND CLAIMED THAT APPELLANT IS PART OF, WHAT THE AO CALLED, THE OM SH ANTI GROUP. THE AO FURTHER CONTENDED THAT SHRI PARAS PORWAL IS CMD OF 'OM SHANTI GROUP' AND THEREFORE, THIS STATEMENT MADE BY SHRI PARAS PO RWAL WAS BINDING ON THE APPELLANT. 6.3 THE CONTENTION OF THE ASSESSING OFFICER IS GROS SLY WRONG. THE INCOME TAX ACT DOES NOT RECOGNIZE THE CONCEPT OF GROUP. TH EREFORE, THE CONTENTION OF THE AO THAT THE APPELLANT BELONGS TO THE OM SHANTI GROUP IS NOT A VALID AROUND FOR MAKING THE ADDITION. CONS EQUENTLY, THE CONTENTION OF THE AO THAT THIS STATEMENT OF SHRI PA RAS PORWAL IS BINDING ON THE APPELLANT IS WITHOUT ANY BASIS WHATSOEVER. I AGREE WITH THE CONTENTION OF THE APPELLANT THAT SHRI PARAS PORWAL HAS NO LOCUS STANDI AS FAR AS IT (THE APPELLANT) IS CONCERNED AND, THEREFO RE,T HE ADDITION MADE ON THE BASIS OF THE STATEMENT OF SHRI PARAS PORWAL IS NOT SUSTAINABLE. I, THEREFORE, DELETE THE ADDITION OF RS. 28,60,00,000/ - MADE BY THE AO. IN THE RESULT, THE FIRST GROUND OF APPEAL IS ALLOWED. 12.33 IN VIEW OF THE FACTS AND CIRCUMSTANCES, DISCU SSED IN DETAILS IN THE ABOVE PARAS & IN THE LIGHT OF VARIOUS JUDICIAL PRON OUNCEMENTS AND FOLLOWING THE ORDER OF MY ID PREDECESSOR CIT(A)-50, THIS GROUND OF APPEAL OF THE APPELLANT COMPANY IS ALLOWED. IN THE RESULT, THE GROUND OF APPEAL NO. 2 OF THE PRESENT APPEAL IS ALLOWED. 10. AGGRIEVED, BY THE CIT(A) ORDER, THE REVENUE IS IN APPEAL B EFORE US AND THE ASSESSEE HAS FILED CROSS OBJECTION . 11. THE LEARNED DR, SUBMITTED THAT THE ASSESSING OF FICER HAS BROUGHT OUT CLEAR FACT TO THE EFFECT THAT ALTHOUGH THE ASSESSEE HAS ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 20 FILED NUMBER OF DOCUMENTS TO PROVE IDENTITY OF THE CREDITORS, REMAINING TWO ASPECTS OF THE ISSUE I.E. GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE SUBSCRIBERS ARE IN DOUBT. THE DR FURTHER SUBMITTED THAT MERE FURNISHING OF DO CUMENTS TO PROVE IDENTITY IS NOT SUFFICIENT ENOUGH TO COME OUT OF THE SHADOW OF PROVISIONS OF SECTION 68 OF THE I.T.ACT, 1961, BUT, WHAT IS RELEVANT IS TO DISCHARGE THE ONUS BY FILING NECESSARY EVIDENCE TO PROVE TRUE IDENTITY OF THE CREDITORS, GENUINENESS OF THE TRANS ACTIONS AND CREDITWORTHINESS OF THE PARTIES. IN THIS CASE, ALT HOUGH THE ASSESSEE HAS FILED NUMBER OF DOCUMENTS TO PROVE THE IDENTITY , HE COULD NOT PRODUCE CREDITORS IN PERSON WHEN THE AO CALLED UPON THE ASSESSEE TO PRODUCE THEM PERSONALLY FOR EXAMINATION, THEREFO RE, IT IS VERY CLEAR THAT IDENTITY OF THE PARTIES IS IN DOUBT. AS REGARD S GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF PARTIES, THE AO HAS BROUGHT OUT CLEAR FACTS TO THE EFFECT THAT THE ASSESSEE COULD N OT DISCHARGE ITS ONUS IN RESPECT OF CREDITWORTHINESS. ALTHOUGH, THE SUBSCRIBERS HAVE FILED THEIR ACKNOWLEDGMENT OF INCOME TAX RETURN, BU T PROFIT DECLARED FOR THE YEAR UNDER CONSIDERATION IS EITHER NIL OR N EGLIGIBLE WHEN COMPARED TO THE HUGE AMOUNT OF SHARE CAPITAL INVEST ED IN THE ASSESSEE COMPANY. THE CIT(A) WITHOUT APPRECIATING T HESE FACTS, SIMPLY DELETED ADDITIONS MADE BY THE AO TOWARDS SHA RE CAPITAL AND ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 21 PREMIUM U/S 68 OF THE INCOME TAX ACT, 1961. IN THIS REGARD, HE RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE C ASE OF KONARK STRUCTURAL ENGINEERS PVT LTD VS. DCIT (2018) 257 TA XMANN.COM 262(SC). 12. THE LEARNED AR FOR THE ASSESSEE SUBMITTED TH AT THE LD. CIT(A) HAD RIGHTLY DELETED THE ADDITIONS MADE BY THE ASSES SING OFFICER TOWARDS SHARE CAPITAL AMOUNTING TO RS.9,80,00,000/- U/S. 68 OF THE I.T.ACT, 1961, BECAUSE THE ASSESSEE HAS DISCHARGED PRIMARY ONUS OF PROVING IDENTITY, GENUINENESS OF TRANSACTION AND CR EDITWORTHINESS OF PARTIES. THE AR FURTHER SUBMITTED THAT ALTHOUGH THE ASSESSING OFFICER HAS ACCEPTED IDENTITY OF THE SUBSCRIBERS, B UT HE HAS DISPUTED CREDIT WORTHINESS OF THE SUBSCRIBERS ON THE BASIS O F FINANCIAL STATEMENTS WITHOUT CARRYING OUT FURTHER ENQUIRIES E ITHER BY ISSUE OF NOTICE U/S. 133(6) OR SUMMONS U/S 131 TO ASCERTAIN TRUE NATURE OF TRANSACTIONS BETWEEN THE PARTIES. ON THE OTHER HAN D, THE ASSESSEE HAS DISCHARGED ITS INITIAL ONUS BY FILING ENORMOUS DOCUMENTS, INCLUDING CONFIRMATION FROM THE PARTIES WHERE THEY HAVE CATEGORICALLY STATED THAT INVESTMENTS IN ASSESSEE COMPANY IS GENU INE TRANSACTION AND HAS BEEN ROUTED THROUGH BANKING CHANNELS. THE ASSESSEE HAS ALSO FILED COMPLETE DETAILS ABOUT IDENTITY OF THE S UBSCRIBERS INCLUDING ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 22 THEIR PAN, ADDRESS ETC. THE ASSESSEE HAS ALSO FILE D INCOME TAX ACKNOWLEDGMENT OF THE SUBSCRIBERS ALONG WITH FINANC IAL STATEMENT AND BANK STATEMENTS. THE ASSESSING OFFICER NEVER D ISPUTED FACT THAT THE ASSESSEE HAS FILED NECESSARY DOCUMENTS IN ORDER TO PROVE IDENTITY OF THE SUBSCRIBERS AND GENUINENESS OF THE TRANSACTIONS. ONCE, THE ASSESSEE DISCHARGES INITIAL BURDEN PLACED UPON HIM, THEN THE ONUS SHIFTS TO THE ASSESSING OFFICER TO PROVE O THERWISE. IN THIS CASE, THE ASSESSING OFFICER NEITHER CARRIED OUT ANY FURTHER ENQUIRIES, NOR CALLED UPON THE ASSESSEE TO EXPLAIN THE CREDIT WITH FURTHER EVIDENCES. THE ASSESSING OFFICER CAME TO THE CONCL USION THAT THE TRANSACTION BETWEEN THE PARTIES ARE NOT GENUINE MER ELY ON THE BASIS OF SURVEY CONDUCTED IN THE CASE OF SUNTECK GROUP AN D STATEMENT RECORDED FROM CERTAIN PERSONS WHERE THEY HAD ADMITT ED THAT SHARE CAPITAL IN NOT GENUINE TRANSACTION AND ALSO ON THE BASIS OF FINANCIAL STATEMENTS OF THE ASSESSEE, MORE PARTICULARLY ON TH E BASIS OF INCOME DECLARED FOR THE YEAR UNDER CONSIDERATION WITHOUT A PPRECIATING THE CORRECT LEGAL POSITION OF LAW THAT IN ORDER TO BRIN G ANY CREDIT WITHIN THE AMBIT OF SECTION 68 OF THE ACT, THE ASSESSING OFFIC ER SHOULD PROVE THAT THE CREDIT IS, IN FACT, THE INCOME OF THE ASSE SSEE FROM UNDISCLOSED SOURCES. IN THIS CASE, NOTHING HAS BEE N POINTED OUT BY THE ASSESSING OFFICER. THE LEARNED AR FURTHER REFE RRING TO VARIOUS ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 23 JUDICIAL PRECEDENTS INCLUDING THE DECISION OF HONB LE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CREATIVE WORLD TELEFIL MS LTD. (333 ITR 100) SUBMITTED THAT ONCE THE ASSESSEE HAS DISCHARGE D INITIAL ONUS OF PROVING IDENTITY, GENUINENESS OF TRANSACTION AND CR EDIT WORTHINESS OF THE PARTIES, THEN THE ASSESSING OFFICER CAN PROCEED TO RE-OPEN THE ASSESSMENT OF THE CREDITORS, BUT SUM SO RECEIVED FR OM THE CREDITORS CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASS ESSEE. THE ASSESSEE HAS FURTHER RELIED UPON THE FOLLOWING JUDI CIAL PRECEDENTS: A) CIT VS. GREEN INFRA LTD (2017) 292 CTR 233(BOMBA Y) B) CIT VS. GAGANDEEP INFRASTRUCTURE PVT LTD.(2017) 394 ITR 680(BOMBAY) C) CIT VS. GOA SPONGE AND POWER LTD TAX APPEAL NO. 16 OF 2012 (BOMBAY HIGH COURT) D) CIT VS. CREATIVE WORLD TELEFILMS LTD 333 ITR 100 (BOM- HIGH COURT) E) CIT VS. LOVELY EXPORTS (P) LTD 216 CTR 195 (SC) F) CIT VS. STELLER INVESTMENT LTD 251ITR 263 (SC) G) SDB ESTATE PVT LTD VS. ITO ITA NO.584/M/2015 H) CIT VS. EXPO GLOBE INDIA LTD 361 ITR ( 0147 (DEL-HIGH COURT) I) CIT VS. VICTORY SPINNING MILLS LTD (2014) 90 CC H 55 (MAD -HIGH COURT) J) CIT VS. DWARKADHISH INVESTMENT (P) LTD (2011) 3 30 ITR 298 (DEL-HIGH COURT) ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 24 K) CIT VS. NISHAN INDO COMMERCE LTD 101 DTR 0413 (C AL - HIGH COURT) L) CIT V. VACMET PACKAGING (INDIA) PVT LTD (2014) 8 8 CCH 065 (ALL-HC) M) CIT VS. GANGESHWARI METAL PVT LTD (2014) 361 IT R 10 (DEL-HIGH COURT) N) ACIT VS. VENKATESHWAR ISPAT PVT LTD (2010) 319 I TR 393 (CHHATISGARH-HIGH COURT) O) CIT VS. NAV BHARAT DUPLEX LTD (2013) 35 TAXMANN. COM 289 (ALL-HIGH COURT) P) CIT VS. SAMIR BIO-TECH PVT LTD (2010) 325 ITR 29 4 (DEL- HIGH COURT) Q) MOD CREATIONS PVT LTD VS. ITO (2011) 354 ITR 282 (DEL- HIGH COURT) R) CIT VS. JAY DEE SECURITIES & FINANCE LTD 32 TAXMANN.COM 91 (ALL-HIGH COURT) S) JAYA SECURITIES LTD VS. CIT (2008) 166 TAXMAN 7 (ALL- HIGH COURT) (SLP FILED BY DEPT DISMISSED) 13. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. THE FACTS BORNE OUT FROM RECORD ARE THAT THE ASSESEE AN D OTHER FOUR COMPANIES ARE SUBSIDIARIES OF M/S AKSHUNYA ENERGY P VT.LTD,. IN THE F.Y. 2008-09 RELEVANT A.Y.2009-10, THE ASSESEE HAD ISSUED 2,00,000 EQUITY SHARES AT A PREMIUM OF RS. 490/- PE R SHARE, AMOUNTING TO RS. 9,80,00,000/-. THE HOLDING COMPANY NAMELY M/S AKSHUNYA ENERGY PVT.LTD. WAS LATER ON TAKEN OVER BY M/S ESKAY ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 25 INFRASTRUCTURE DEVELOPMENT PVT.LTD., A SUNTECK GROU P COMPANY. ON 15/10/2013 A SURVEY U/S 133A OF THE I.T.ACT, 1961 W AS CONDUCTED IN SUNTECK GROUP OF COMPANIES. DURING THE COURSE OF S URVEY, STATEMENT U/S 131 OF THE I.T.ACT, 1961 WAS RECORDED FROM SHRI KAMAL KHETAN, THE MAIN PROMOTER OF SUNTECK GROUP OF COMPA NY. IN THE STATEMENT, SHRI KAMAL KHETAN, WHILE REPLYING TO QUE STION NO. 18 HE HAD OFFERED AN AMOUNT OF RS. 46.6 CRORES AS UNACCOU NTED INCOME, IN THE NAME OF FIVE COMPANIES TOWARDS SHARE CAPITAL AN D SHARE PREMIUM RECEIVED FOR THE YEAR UNDER CONSIDERATION. IN THE ABOVE STATEMENT, HE FURTHER STATED THAT HIS GROUP CONCERN M/S ESKAY INFRASTRUCTURE DEVELOPMENT PVT.LTD. HAD ACQUIRED A CONTROLLING INTEREST IN M/S AKSHUNYA ENERGY PVT.LTD. BY INVESTI NG A SUM OF RS. 1 CRORE, AS ADDITIONAL CAPITAL IN THE COMPANY, WHICH HAS MADE HIM 99% OWNER OF THE COMPANY. ANOTHER STATEMENT OF SHRI KAMAL KHETAN WAS RECORDED ON 16/10/2013. IN RESPONSE TO Q UESTION NO.10, HE CONFIRMED THAT ONE OF HIS GROUP COMPANY M/S ESKA Y INFRASTRUCTURE DEVELOPMENT PVT.LTD. HAD ACQUIRED HO LDING COMPANY OF FIVE COMPANIES NAMELY M/S AKSHUNYA ENERGY PVT.LT D FOR A CONSIDERATION OF RS. 1 CRORE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ANOTHER STATEMENT OF SHRI KAMAL KHETAN WAS RECORDED U/S 131 OF THE I.T.ACT, 1961 ON 08/11/2016. IN THE SAID STATEMENT, WHILE REPLYING TO QUESTION NO.9, HE HAD DENIED ANY KNOWLEDGE ABOUT ALL THE TRANSACTIONS OF INVESTMENTS AND SHARE CAPIT AL IN THE ABOVE MENTIONED FIVE COMPANIES. HE, FURTHER STATED THAT T RANSACTIONS OF INVESTMENTS AND SHARE CAPITAL WERE HANDLED BY THE O LD MANAGEMENT AND HENCE, HE WAS NOT IN A POSITION TO OFFER ANY CO MMENTS ON THE ADMISSION MADE BY THE OLD MANAGEMENT, IN RESPECT OF SHARE CAPITAL ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 26 AND SHARE PREMIUM. IN THE SAID STATEMENT, IN REPLY TO QUESTION NO.11, SHRI KAMAL KHETAN, ONCE AGAIN STATED THAT HE WAS UNAWARE AS TO THE BASIS ON WHICH, SHRI VIKAS SANKHLECHA H AS STATED THAT THESE FIVE COMPANIES ARE SHELL COMPANY. HE HAD ALSO ASKED FOR CROSS-EXAMINATION OF SHRI VIKAS SANKHLECHA FOR THE FACTS MENTIONED IN HIS STATEMENT. 14. THE LD. AO HAS MADE ADDITIONS TOWARDS SHARE CA PITAL AND SHARE PREMIUM, ON THE GROUND THAT ALTHOUGH, THE ASS ESEE HAS FILED VARIOUS DETAILS TO PROVE IDENTITY, GENUINENESS OF T RANSACTIONS AND CREDITWORTHINESS OF THE PARTIES BUT, ON PERUSAL OF DETAILS FILED BY THE ASSESSEE, IT WAS NOTICED THAT THE ASSESSEE HAS FAIL ED TO ESTABLISH TRANSACTIONS BETWEEN THE PARTIES ARE GENUINE IN NAT URE AND ALSO THE SUBSCRIBER TO THE SHARE CAPITAL ARE HAVING CAPACITY TO EXPLAIN HUGE INVESTMENTS IN ASSESSEE COMPANY. ACCORDING TO THE A O, MERE FURNISHING CONFIRMATION LETTERS FROM THE PARTIES AL ONG WITH THEIR PAN NUMBER AND ITR ACKNOWLEDGEMENT IS NOT SUFFICIENT E NOUGH TO DISCHARGE ,THE ONUS CAST UPON U/S 68 OF THE I.T.ACT , 1961 AND WHAT IS RELEVANT IS TO DISCHARGE THE TRUE IDENTITY OF THE I NVESTORS. ALTHOUGH, THE ASSESSEE HAS FILED CERTAIN DOCUMENTS, INCLUDING PAN NUMBER AND ITR ACKNOWLEDGEMENT AND FINANCIAL STATEMENTS AL ONG WITH BANK STATEMENT OF SUBSCRIBERS, BUT WHEN, IT COMES TO GEN UINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES, E XCEPT FILING FINANCIAL STATEMENTS, NO OTHER EVIDENCES HAS BEEN F ILED TO PROVE THAT SHARE CAPITAL RECEIVED FROM SUBSCRIBERS IS GENUINE IN NATURE, WHICH IS SUPPORTED BY NECESSARY EVIDENCES. THE AO HAS ALS O TAKEN SUPPORT FROM THE FINDINGS RECORDED, DURING THE COUR SE OF SURVEY AND ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 27 STATEMENT RECORDED FROM CERTAIN PERSONS, INCLUDING SHRI KAMAL KHETAN AND SHRI VIKAS SANKLECHA TO COME TO THE CONC LUSION THAT THE ASSESSEE HAS ENTERED INTO AN ARRANGED TRANSACTIONS WITH CERTAIN COMPANIES, IN ORDER TO CONVERT ITS OWN UNACCOUNTED INCOME IN THE FORM OF SHARE CAPITAL, WHICH IS EVIDENT FROM THE FA CT THAT THE ASSESSEE HAS ISSUED SHARE CAPITAL WITH A HUGE PREMI UM OF RS. 480 PER SHARE, EVEN THOUGH, THE FINANCIAL OF THOSE COMP ANIES IS NOT SUPPORTING SUCH A HUGE VALUATION. FURTHER, THE AO HAS TAKEN SUPPORT FROM THE ADMISSION OF SHRI KAMAL KHETAN, DU RING THE COURSE OF SURVEY WHERE, HE HAD ADMITTED THAT SHARE CAPITAL , INCLUDING PREMIUM RECEIVED FOR THE YEAR UNDER CONSIDERATION I S AN UNEXPLAINED CREDIT AND ACCORDINGLY, THE SAME HAS BEEN OFFERED T O TAX. 15. THE PROVISION OF SECTION 68 OF THE INCOME TAX A CT, 1961 DEALS WITH A CASES, WHERE ANY SUM FOUND CREDITED IN THE B OOKS OF ACCOUNTS OF AN ASSESEE, IN ANY PREVIOUS YEAR, FOR W HICH THE ASSESEE OFFERED NO EXPLANATION ABOUT THE NATURE AND SOURCE, THEREOF OR THE EXPLANATIONS OFFERED BY THE ASSESSEE, IN THE OPINIO N OF THE AO IS NOT SATISFACTORY, THEN SUM SO FOUND CREDITED MAY BE CHA RGED TO INCOME TAX, AS INCOME OF THE ASSESSE OF THAT PREVIOUS YEAR . IN ORDER TO FIX ANY CREDIT WITHIN THE AMBIT OF SECTION 68 OF THE I. T ACT, 1961, THE AO HAS TO EXAMINE THREE INGREDIENTS IE., IDENTITY, GEN UINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. IN THIS FACTUAL AND LEGAL BACKGROUND, IF YOU EXAMINE, THE PRESENT CASE IN THE LIGHT OF VARIOUS EVIDENCES FILED BY THE ASSESSEE, IN ORDER T O PROVE CREDIT FOUND IN THE FORM OF SHARE CAPITAL AND SHARE PREMIU M, ONE HAS TO ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 28 SEE, WHETHER THE ASSESSEE HAS DISCHARGED ITS INITIA L ONUS CAST UPON U/S 68 OF THE I.T.ACT, 1961 OR NOT. IN THIS CASE, T HE ASSESEE HAS FILED VARIOUS DETAILS, INCLUDING SHARE APPLICATION FORM, COPY OF DECLARATION, BOARD RESOLUTION, BANK STATEMENT OF INVESTOR COMPAN Y, PAN CARD, ACKNOWLEDGMENT OF RETURN OF INCOME, FINANCIAL STATE MENT OF INVESTOR COMPANY, FORM NO. 2 FOR ALLOTMENT OF EQUITY SHARES AND BANK STATEMENT REFLECTING, THE AMOUNT RECEIVED THROUGH B ANKING CHANNELS. ONCE, THE ASSESSEE HAS DISCHARGED ITS INITIAL ONUS BY FILING VARIOUS DETAILS, THEN THE ONUS SHIFT TO THE AO TO CARRY OUT FURTHER VERIFICATION, IN THE LIGHT OF EVIDENCES FILED BY THE ASSESSEE TO ASCERTAIN TRUE NATURE OF TRANSACTIONS BETWEEN THE PARTIES BEFORE, HE COME TO THE CONCLUSION THAT THE TRANSACTIONS BETWEEN THE PARTIE S ARE GENUINE OR NOT. IN THIS CASE ALTHOUGH, THE AO HAS ISSUED 133(6 ) NOTICES TO THE PARTIES, NO FURTHER ENQUIRY HAS BEEN CONDUCTED, INC LUDING ISSUE OF SUMMONS U/S 131. NO DOUBT, NONE OF THE INVESTORS C OMPANIES HAVE RESPONDED TO 133(6) NOTICES ISSUED BY THE AO, BUT F ACT OF THE MATTER IS WHEN, ASSESSEE HAS FILED COMPLETE SET OF DOCUMEN TS, INCLUDING NAME AND ADDRESS OF THE PARTIES, IT IS FOR THE AO T O CARRY OUT FURTHER INVESTIGATION BY EXERCISING ALL POSSIBLE OPTIONS A VAILABLE TO HIM, BUT NON ATTENDANCE OF PARTIES IN RESPONSE TO 133(6) CAN NOT BE ATTRIBUTED TO THE ASSESSEE, BECAUSE DUE TO TIME LAG CERTAIN PE RSONS MIGHT HAVE LEFT THE PLACE AND FOR THIS NO RESPONSIBILITY CAN BE FASTENED UPON THE ASSESSEE. IN THIS CASE, THE ASSESSEE DONE WHAT BEST IT COULD DO AND FILED, WHATEVER INFORMATION AVAILABLE WITH IT, IN O RDER TO SATISFY THE AO. IN CASE, THE AO IS NOT SATISFIED WITH DOCUMENTS FURNISHED BY THE ASSESSEE, THEN HE IS FREE TO CARRY OUT HIS OWN INVE STIGATIONS BY EXERCISING POWERS CONFERRED U/S 131 OR U/S 133(6) O F THE I.T.ACT, ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 29 1961. IN THIS CASE, THE AO, EXCEPT ISSUE OF 133(6) NOTICES NOTHING HAS BEEN DONE TO FIND OUT, THE NATURE OF TRANSACTIO NS BETWEEN THE PARTIES. THEREFORE, WE ARE OF THE CONSIDERED VIEW T HAT WHEN, ASSESSEE HAS FILED COMPLETE DETAILS TO PROVE IDENTI TY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES, T HEN THERE IS NO REASON FOR THE AO TO CAME TO THE CONCLUSION THAT SH ARE CAPITAL AND SHARE PREMIUM IS UNEXPLAINED ONLY FOR THE REASON TH AT DURING THE SURVEY PROCEEDINGS, THE DIRECTOR OF THE COMPANY HAD ADMITTED THAT THOSE FIVE COMPANIES ARE SHELL COMPANIES IGNORING T HE FACT THAT SUCH ADMISSION HAS BEEN RETRACTED BY FILING AFFIDAVIT AL ONG WITH LETTER EXPLAINING REASONS FRO SUCH ADMISSION DURING SURVEY PROCEEDINGS. FURTHER, ADDITIONS MADE BY THE AO CANNOT BE SUSTAIN ED EVEN ON THIS COUNT ,BECAUSE THE AO HAS RELIED UPON STATEMENT OF SHRI VIKAS SANKHLECHA, THE ERSTWHILE DIRECTOR OF THOSE FIVE CO MPANIES TO MAKE ADDITIONS TOWARDS SHARE CAPITAL, BUT WHEN ,SHRI KA MAL KHETAN, THE PRESENT DIRECTOR OF THE ASSESSEE COMPANY ASKED FOR COPIES OF STATEMENT OF SHRI VIKAS SANKHLECHA AND ALSO OPPORTU NITY FOR CROSS EXAMINATION OF SHRI VIKAS SANKHLECHA, THE AO HAS DE NIED, THE OPPORTUNITY OF CROSS EXAMINATION AND ALSO NOT FURNI SHED COPIES OF STATEMENT RECORDED FROM SHRI VIKAS SANKHLECHA. IT IS A SETTLED POSITION OF LAW THAT ONCE, ANY THIRD PARTY INFORMAT ION/STATEMENTS IS RELIED UPON TO MAKE ADDITIONS, IT IS THE OBLIGATION OF THE AO TO PROVIDE COPIES OF SUCH STATEMENTS/INFORMATION AND A LSO TO PROVIDE AN OPPORTUNITY OF CROSS EXAMINATION OF THE PERSON, WHO GAVE THE STATEMENT, WHEN SUCH OPPORTUNITY HAS BEEN AVAILED B Y THE PERSON AGAINST WHOM, SUCH STATEMENTS ARE USED. THIS LEGAL PROPOSITION IS SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 30 KISHANCHAND CHELLARAM VS CIT 1980 125 ITR 713 (SC), WHERE IT WAS HELD THAT WHEN, THIRD PARTY INFORMATION IS RELI ED UPON TO DRAW AN ADVERSE INFERENCE AGAINST THE ASSESSEE, THE SAME NE EDS TO BE PROVIDED AND ALSO OPPORTUNITY OF CROSS EXAMINATION SHALL BE GIVEN, IF SUCH OPPORTUNITY IS AVAILED BY THE ASSESSEE. THE HO NBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES LTD VS CCE, KOLKATA II IN APPEAL NO 4228 OF 2006 HAS VIDE ORDER DATED 02.09.2015 HAD ALSO UPHELD A SIMILAR LEGAL POSITION AND HELD THAT NOT ALLOWING THE ASSESSEE TO CROSS-EXAMINE THE WITNESSE S BY THE ADJUDICATING THE AUTHORITY, THOUGH THE STATEMENTS A ND THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW, WHICH MAKES THE ORDER NULLITY IN, AS MUCH AS, IT AMOUNT TO VIOLATION OF PRINCIPLE OF NATURAL JUSTICE, BECAUSE OF WHICH, THE ASSESSEE WAS ADVERSELY AFFECTED. THEREFORE, ON THIS COUNT ALSO THE ADDITIONS MADE BY THE AO CANNOT BE SUSTAINED. 16. COMING TO THE OTHER ASPECT OF THE ISSUE, THE AO HAS INVOKED THE PROVISIONS OF SECTION 56(2)(VIIB) OF THE I.T. A CT, 1961. WE FIND THAT THE SAID PROVISION HAS BEEN INSERTED BY FINANC E ACT, 2012 W.E.F 10.04.2013, WHERE IT PROVIDES THAT WHERE A CLOSELY HELD COMPANY ISSUES ITS SHARES AT A PRICE WHICH IS MORE THAN ITS FAIR MARKET VALUE, THEN AMOUNT RECEIVED IN EXCESS OF FAIR MARKET VALUE WILL BE CHARGED TO TAX IN THE HANDS OF THE COMPANY AS INCOME FROM O THER SOURCES. WE, FURTHER NOTED THAT THE PROVISIONS OF SECTION 56 (2)(VIIB) WAS INSERTED BY FINANCE ACT,2012 W.E.F. 1.04.2013 IS AP PLICABLE FROM ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 31 A.Y. 2013-14 ONWARDS. IN FACT, A SIMILAR AMENDMENT HAS BEEN MADE IN SECTION 68 BY INSERTION OF A PROVISO BY THE FINA NCE AT 2012 W.E.F. 01.04.2013 AS PER WHICH THE ASSESSEE COMPANY (NOT B EING A COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY INTERESTE D) AND SUMS SO CREDITED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL , SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EXPLANATION OFFERED BY SUCH ASSESSEE COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS THE PERSON BEING, A RES IDENT IN WHOSE NAME SUCH CREDIT IS RECORDED IN THE BOOKS OF SUCH C OMPANY ALSO OFFERS AN EXPLANATION ABOUT THE NATURE AND SOURCE O F SUCH SUM SO CREDITED AND SUCH EXPLANATION IN THE OPINION OF THE AO AFORESAID HAS BEEN FOUND TO BE SATISFACTORY. ON PERUSAL OF AMEND MENTS BROUGHT OUT BY FINANCE ACT 2012, W.E.F. 01.04.2013 TO THE P ROVISIONS OF SECTION 56(2)(VIIB) AND SECTION 68 OF THE ACT, IT I S VERY CLEAR THAT WHERE THE ASSESSEE HAS ISSUED SHARES AT PREMIUM AND ALSO RECEIVED SHARE CAPITAL AND IF SUCH COMPANY DO NOT OFFER ANY EXPLANATION ABOUT THE NATURE AND SOURCE, THEN SUM S O RECEIVED MAY BE REGARDED AS INCOME OF THE ASSESSEE FROM UNDISCLO SED SOURCES. IN OTHER WORDS, THE PURPOSE OF INSERTION OF PROVISO IS TO EXAMINE THE SOURCE OF INVESTMENT BY SUBSCRIBER TO THE SHARE CAP ITAL. THIS AMENDMENT HAS BEEN EXAMINED BY THE HONBLE BOMBAY H IGH COURT ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 32 IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE (P) LTD. (2017) 394 ITR 680, WHERE THE COURT OBSERVED THAT PROVISO INSE RTED TO SECTION 68 W.E.F. 01.04.2013 IS CONSIDERED TO BE PROSPECTIV E IN NATURE AND IS APPLICABLE FROM A.Y. 2013-14 ONWARDS. FROM THE ABOV E, IT IS VERY CLEAR THAT SIMILAR AMENDMENT HAS BEEN MADE TO PROVI SIONS OF SECTION 56(2) BY INSERTION OF CLAUSE (VIIB) SO AS TO BRING SHARE PREMIUM WITHIN THE AMBIT OF SECTION 56(2) OF THE I.T ACT, 1 961. SINCE, THE PROVISO INSERTED TO SECTION 68 IS CONSIDERED TO BE PROSPECTIVE IN NATURE, OBVIOUSLY SUB CLAUSE (VIIB) INSERTED TO SEC TION 56(2) IS ALSO CONSIDERED TO BE PROSPECTIVE AND CANNOT BE APPLIED TO THE ASSESSMENT YEAR IN QUESTION. EVEN OTHERWISE, ASSUM ING FOR A MOMENT ABOVE PROVISIONS ARE APPLICABLE FOR THE YEAR UNDER CONSIDERATION, IN ORDER TO APPLY SAID AMENDED PROVI SIONS, THE AO HAS TO PROVE THAT THE ASSESSEE HAS NOT PROVED CAPAC ITY OF THE INVESTORS AND ALSO NOT OFFERED ANY JUSTIFICATION FO R ISSUE OF SHARES AT PREMIUM. IN THIS CASE, FROM THE FACTS ON RECORD, I T IS CLEAR THAT THE ASSESSEE HAS PROVED IDENTITY AND GENUINENESS OF THE TRANSACTIONS BY FILING NECESSARY EVIDENCES. THE ASSESSEE HAS FI LED VALUATION REPORT FROM REGISTERED VALUER AS PER WHICH THE SHAR E PRICE OF THE COMPANY IS OVER AND ABOVE PREMIUM CHARGED BY THE AS SESSEE. ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 33 THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT PROVI SIONS OF SECTION 56(2)(VIIB) HAS NO APPLICATION. 17. COMING TO THE CASE LAWS RELIED UPON BY THE ASSE SSEE. THE ASSESSEE HAS RELIED UPON PLETHORA OF JUDGEMENTS , INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (2008) 216 CTR 195 (SC). IN THE CASE LAWS RELIED UPON BY THE ASSESSEE, THE ISSUE HAS BEEN DEALT AS U NDER:- CIT VS. GOA SPONGE AND POWER LTD (13/02/2012) TAX A PPEAL NO. 16 OF 2012 (HIGH COURT-BOMBAY) 'ONCE THE AUTHORITIES HAVE GOT ALL THE DETAI LS, INCLUDING THE NAME AND ADDRESSES OF THE SHAREHOLDERS, THEIR PAN /GIR NUMBER, SO ALSO THE NAME OF THE BANK FROM WHICH THE ALLEGED INVESTORS RECEIVED MONEY AS SHARE APPLICATION, THEN, IT CANNOT BE TERMED AS 'BOGUS'. THE CONTROVERSY IS COVERED BY TH E JUDGEMENTS RENDERED B Y THE HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PVT LTD, VS. CIT, (2008) 216 CTR (SC) 195, AS ALSO BY THIS COURT IN CIT VS. CREATIVE WORLD TELE FILMS LTD, (20 11) 333 ITR 100 (BOM). IN SUCH CIRCUMSTANCES, WE ARE OF THE VIEW TH AT THE TRIBUNAL'S FINDING THAT THERE IS NO JUSTIFICATION IN TH E ADDITION MADE UNDER SECTION 68 OF THE INCOME TAX ACT,, 1961 NEI THER SUFFERS FROM ANY PERVERSITY NOR GIVES RISE TO ANY SUBSTAN TIAL QUESTION OF LAW.' CIT VS. CREATIVE WORLD TELE FILMS LTD (2011) 333 IT R 100 (BORN- HIGH COURT) 'THE QUESTION SOUGHT TO BE RAISED IN THE AP PEAL WAS ALSO RAISED BEFORE THE TRIBUNAL AND THE TRIBUNAL W AS PLEASED TO FOLLOW THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. (2008) 216 CTR (SC) 195. WH EREIN THE APEX COURT OBSERVED THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE-COMPANY FROM ALLEGED BOGUS SHA REHOLDERS, W HOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT CAN ALWAYS PROCEED AGAINST THEM AND IF NECESSARY REOPEN THEIR INDIVIDUAL ASSESSMENTS. IN THE CASE IN HAND, IT IS NOT DISPUTED THAT THE ASSESSEE HAD GIVEN THE DETAILS OF NAME AND ADDRESS OF THE SHAREHOLDER, THEIR PAN/GIR NUMBER AND HAD ALS O GIVEN THE CHEQUE NUMBER, NAME OF THE BANK. IT WAS EXPECTED ON THE PART OF ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 34 THE AO TO MAKE PROPER INVESTIGATION AND REACH THE SHAREHOLDERS. THE AO DID NOTHING EXCEPT ISSUING SU MMONS WHICH WERE ULTIMATELY RETURNED BACK WITH AN ENDORSEME NT 'NOT TRACEABLE IN OUR CONSIDERED VIEW, THE AO OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS SO AS TO REACH THE SHAREHOLDERS SINCE ALL THE RELEVANT MATERIAL DETAILS AND PARTICULARS WERE GIV EN BY THE ASSESSEE TO THE AO. IN THE ABOVE CIRCUMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE FAULTED.' CIT VS. LOVELY EXPORTS (P) LTD (2008) 216 CTR 195 ( SC) '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 ASSE SSEE COMPANY.' CIT VS. STELLER INVESTMENT LTD (2001) 251 ITR 263 ( SC) (CIVIL APPEAL) 'THAT THE INCREASE IN SUBSCRIBED CAPITAL OF THE RESPONDENT COMPANY COULD NOT BE A DEVICE OF CONVERTING BLACK M ONEY INTO WHITE WITH THE HELP OF FORMATION OF AN INVESTMENT COMPANY, ON THE ROUND THAT, EVEN IF IT BE ASSUMED THAT THE SUBSCRIB ERS TO THE INCREASED CAPITAL WERE NOT GENUINE, TINDER NO CIRCUMSTANCES COULD THE AMOUNT OF SHARE CAPITAL BE REGARDE D AS UN DISCLOSED INCOME, AN APPEAL WAS TAKEN BY THE DEPARTMEN T TO TH E SUPREME COURT. THE SUPREME COURT DISMISSED TH E APPEAL HOLDING THAT THE TRIBUNAL HAD COME TO A CONC LUSION ON FACTS AND NO INTERFERENCE WAS CALLED FOR.' CIT VS. NAV BHARAT DUOLEX LTD (2013) 35 TAXMANN.COM 289 (ALL- HIGH COURT) 'WE HAVE CONSIDERED THE ARGUMENTS OF THE COUNSEL FO R THE PARTIES. CIT(A) FOUND THAT FIVE COMPANIES SUBSCRIBING THE EQUITY SHARES AMOUNTING TO RS. 25,00.000/- WERE IDENTIFIED AND THEY HAD SUBMITTED THEIR BANK STATEMENTS, CASH EXTRACTS AND RETURNS FILING RECEIPTS. AS SUCH IDENTITY OF THE SHARE APPL ICANT COMPANIES AND PURCHASE OF SHARE HAD BEEN PROVED BY THE AS SESSEE. SUPREME COURT IN THE CASES OF CIT V. STELLER INVEST MENTS LTD. [2001] 251 ITR 263 AND LOVELY EXPORTS CASE (SUPRA), HAS HELD T HAT THE IDENTITY OF THE SHAREHOLDER ALONE IS REQUIRED TO BE P ROVED, IN CASE OF THE CAPITAL CONTRIBUTED BY THE SHAREHOLDERS. A CCORDINGLY CIT(A) AND THE TRIBUNAL HAS NOT COMMITTED ANY ILLEGA LITY IN ALLOWING THE APPEAL OF THE ASSESSEE. WE DO NOT FIND ANY ILLEGAL ITY IN THE JUDGMENT OF THE CIT(A) AND THE TRIBUNAL.' CIT VS. JAYDEE SECURITIES & FINANCE LTD (2013) 32 TAXMANN.COM91 (ALL-HIGH COURT) 'THE TRIBUNAL RECORDED FINDINGS THAT THE ASSE SSEE HAD PRODUCED THE RETURN OF INCOME FILED BY THE RELEVANT SHAREHOLDERS WHO HAD PAID SHARE APPLICATION MONEY. THE ASSES SEE HAD ALSO ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 35 PRODUCED THE CONFIRMATION OF SHARE HOLDERS IND ICATING THE DETAILS OF ADDRESSES, PAN AND PARTICULARS OF CHEQUES THROUGH WHICH THE AMOUNT WAS PAID TOWARDS THE SHARE APPLICA TION MONEY. THE TRIBUNAL THEREAFTER RELIED UPON THE JUDGMENT OF THE SUPREME COURT IN CIT V. LOVELY EXPORTS (P.) LTD WHEREIN IT WAS HELD THAT IF THE ASSESSEE PRODUCES THE NAMES, ADDRESSES, PAN DETAILS OF THE SHARE HOLDERS THEN THE ONUS ON THE ASSESSEE TO PRO VE THE SOURCE O F SHARE APPLICATION MONEY STANDS DISCHARGED. IF THE ASSESSING AUTHORITY WAS NOT SATISFIED WITH THE CREDITWO RTHINESS OF THE SHAREHOLDERS, IT WAS OPEN TO THE ASSESSING A UTHORITY TO VERIFY THE SAME IN THE HANDS OF THE SHAREHOLDERS CONCERNED , THE TRIBUNAL HAS RELIED UPON AN ORDER OF THE SUPREME COUR T IN CASE O F CIT V. DIVINE LEASING & FINANCE LTD. IN VIEW OF THE DECISION 'OF THE SUPREME COURT, WE DISMISS THE APPEALS WITH OBSERVATIONS THAT THE DEPARTMENT IS FREE TO PROCEED TO REO PEN THEIR INDIVIDUAL ASSESSMENTS OF THE SHAREHOLDERS WHOSE NAMES A ND DETAILS WERE GIVEN TO THE ASSESSING OFFICER.' ACIT VS. VENKATESHWARLSPAT PVT LTD (2009) 319 ITR 3 93 (CHHATISGARH-HIGH COURT) 'IF THE SHARE APPLICATIONS ARE RECEIVED BY THE ASSE SSEE FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AS SESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCE ED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. ' MOD CREATIONS PVT LTD VS. ITO (2013) 354 ITR 282 (D EL-HIGH COURT) 'HELD, ALLOWING THE APPEAL, (I) THAT THE ASS ESSEE HAD DISCHARGED THE INITIAL ONUS PLACED ON IT. IN THE EV ENT THE REVENUE STILL HAD A DOUBT WITH REGARD TO THE GENUINENESS OF THE TRANSACTIONS IN ISSUE OR AS REGARDS THE CREDI TWORTHINESS OF THE CREDITORS, IT WOULD HAVE HAD TO DISCHARGE THE ONUS WHICH HAD SHIFTED ON TO IT. A BALD ASSERTION BY THE ASSESSING OF FICER THAT THE CREDITS WERE A CIRCULAR ROUTE ADOPTED BY THE ASSESSEE TO PLOUGH BACK ITS OWN UNDISCLOSED INCOME INTO I TS ACCOUNTS, COULD BE OF N O AVAIL. THE REVENUE WAS REQUIRE D TO PROVE THIS ALLEGATION. AN ALLEGATION BY ITSELF WHICH IS BASED ON ASSUMPTION WILL NOT PASS MUSTER IN LAW. THE REVENUE WOULD BE RE QUIRED TO BRIDGE THE GAP BETWEEN THE SUSPICIONS AND PROOF IN ORDER TO BRING HOME THIS ALLEGATION. THE TRIBUNAL WITHOUT ADVERTIN G TO THE PRINCIPLE LAID STRESS ON THE FACT THAT DESPITE OPPORTUNITIE S, THE ASSESSEE AND/OR THE CREDITORS HAD NOT PROVED THE GENUI NENESS OF THE TRANSACTION. BASED ON THIS IT CONSTRUED THE IN TENTIONS OF THE ASSESSEE AS BEING MALA FIDE. THE TRIBUNAL OUGHT TO HAVE ANALYSED THE MATERIAL RATHER THAN BE BURDENED B Y THE FACT THAT SOME OF THE CREDITORS HAD CHOSEN NOT TO MAKE A PERS ONAL APPEARANCE BEFORE THE ASSESSING OFFICER. IF THE ASS ESSING OFFICER HAD ANY DOUBT ABOUT THE MATERIAL PLACED ON R ECORD, WHICH WAS LARGELY BANK STATEMENTS OF THE CREDITORS AND THEIR INCOME-TAX ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 36 RETURNS, IT COULD GATHER THE NECESSARY INFORMA TION FROM THE SOURCES TO WHICH THE INFORMATION WAS ATTRIBUTA BLE......IF IT HAD ANY DOUBTS WITH REGARD TO THEIR CREDITWORTHINE SS, THE REVENUE COULD ALWAYS BRING THE SUM IN QUESTION TO TAX IN THE HANDS OF THE CREDITORS OR SUB- CREDITORS.' CIT VS. AL ANAM AGRO FOODS (P.) LTD (2013) 38 TAXMA NN.CORN 375 (ALL-HIGH COURT) TRIBUNAL, HOWEVER, HELD THAT SINCE IDENTITY OF SHA RE HOLDERS STOOD PROVED ON RECORD, AMOUNT OF SHARE APPLICATION MO NEY COULD NOT BE ADDED TO INCOME OF ASSESSEE. ACCORDING TO TRIBUNAL, IN SUCH A CASE AMOUNT COULD BE TAXED IN HANDS OF PERSONS WHO HAD I NVESTED' CIT VS. DWARKADHISH INVESTMENT (P) LTD (2011) 330 I TR 298 (DEL- HIGH COURT) 'JUST BECAUSE THE CREDITORS/SHARE APPLICANTS C OULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE S. 68 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' IN THE INSTANT CASE, THE TRIBUNAL HAS CONFIRMED THE ORDER O F THE CIT(A) DELETING THE IMPUGNED ADDITION HOLDING THAT T HE ASSESSEE HAS BEEN ABLE TO PROVE THE IDENTITY OF THE SHAR E APPLICANTS AND THE SHARE APPLICATION MONEY HAS BEEN RECEIVED BY WAY OF ACCOUNT PAYEE CHEQUES.' CIT VS. NAMASTEY CHEMICALS PVT LTD (2013) 33 TAXMANN.COM271 (GUJ-HIGH COURT) 'IN THE PRESENT CASE ALSO, THE RESPONDENT AS SESSEE HAS RECEIVED SHARE APPLICATION MONEY FROM DIFFERENT S UB SCRIBERS. IT WAS FOUND THAT LARGE NUMBER OF SUBSCRIBERS HAD RES PONDED TO THE LETTERS ISSUED BY THE ASSESSING OFFICER OR S UMMONS ISSUED BY HIM AND SUBMITTED THEIR AFFIDAVITS. IN SOME CASES SUCH REPLIES WERE NOT RECEIVED THROUGH POSTS. RS. 9 LACS REPRESENTED THOSE ASSESSEES WHO DENIED HAVING MADE ANY INVESTMEN T ALTOGETHER. THE ISSUE THUS WOULD FALL SQ UARELY WITHIN THE AMBIT OF THE JUDGMENT OF THE SUPREME COURT IN THE CASE NF LOVELY EXPORTS (SUPRA). NO ERROR OF LAW CAN BE STATED TO HAVE BE EN COMMITTED BY THE TRIBUNAL. TAX APPEAL IS THEREFORE DISMISSE D.' CIT VS. PEOPLES GENERAL HOSPITAL LTD (2013) 356 ITR 65 (MP- HIGH COURT) ' HELD , DISMISSING THE APPEALS , THAT IT THE ASSESSEE HAD RECEIVED SUBSCRIPTIONS TO THE PUBLIC OR RIGHT S ISSUE THROUGH BANKING CHANNELS AND FURNISHED COMPLETE DETAILS OF THE SHAREHOLDERS, NO ADDITION COULD BE MADE TINDER SEC TION 68 OF THE INCOME-TAX ACT, 1961, IN THE ABSENCE OF ANY POSITIVE MATERIAL OR EVIDENCE TO INDICATE THAT THE SHAREHOLDERS WERE BENAMIDARS OR FICTITIOUS PERSONS OR THAT ANY PART O F THE SHARE CAPITAL REPRESENTED THE COMPANY'S OWN INCOME FROM UNDI SCLOSED SOURCES. IT WAS NOBODY'S CASE THAT THE NON R ESIDENT INDIAN COMPANY WAS A BOGUS OR NON-EXISTENT COMPANY O R THAT THE ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 37 AMOUNT SUBSCRIBED BY THE COMPANY BY WAY OF S HARE SUBSCRIPTION WAS IN FACT THE MONEY OF THE AS SESSEE. THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF THE I NVESTOR WHO HAD PROVIDED THE SHARE SUBSCRIPTION AN D THAT THE TRANS ACTION WAS GENUINE. THOUGH THE ASSESSEE'S CONTENTION WAS THAT THE CREDITWORTHINESS OF THE CREDITOR WAS ALSO ESTA BLISHED, IN THIS CASE, THE ESTABLISHMENT OF THE IDENTITY OF THE INVESTOR A LONE WAS TO BE SEEN. THUS, THE ADDITION WAS RIGHTLY DELETED.' CIT VS. SHREE RAMA MULTI TECH LTD (2013) 34 TAXMANN .COM177 (GUJ-HC) 'IT IS NOTED THAT COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL HAVE DULY CONSIDERED ISSUE AND HAVIN G FOUND COMPLETE DETAILS OF THE RECEIPTS OF SHARE APPLICATI ON MONEY, ALONG WITH THE FORM NAMES AND ADDRESSES, PAN AND OTH ER REQUISITE DETAILS, THEY FOUND COMPLETE ABSENCE OF THE GROUND S NOTED FOR INVOKING THE PROVISION OF SECTION 68. MOREOVER , BOTH RIGHTLY HAD APPLIED THE DECISION OF CIT VS. LOVELY EXPORTS (P) LTD TO THE CASE OF THE ASSESSEE. THEREFORE, NO REASON WAS FOUND IN A BSENCE OF ANY ILLEGALITY MUCH LESS ANY PERVERSITY TOO TO IN TERFERE WITH THE ORDER OF THE BOTH THESE AUTHORITIES, WHO HAD CONCURRENTLY HELD THE DUE DETAILS HAVING BEEN PROVED. THE ASSESSEE CO MPANY HAD PRESENTED THE NECESSARY WORTH PROOF BEF ORE BO TH THE AUTHORITIES AND IT WAS NOT EXPECTED BY THE ASSESSEECOMPAN Y TO FURTHER PROVE THE SOURCE OF THE DECEASED.' CIT VS. NIKUNJ EXIMP ENTERPRISES (P.) LTD (2013) 35 TAXMANN.COM384 (BOM) 'WHETHER MERELY BECAUSE SUPPLIERS HAD NOT APP EARED BEFORE ASSESSING OFFICER OR COMMISSIONER (APPEALS), I T COULD NOT BE CONCLUDED THAT PURCHASES WERE NOT MADE BY AS SESSEE - HELD, YES.... FURTHER, THERE WERE CONFIRMATION LETTE RS FILED BY THE SUPPLIERS, COPIES OF INVOICES FOR PURCHASES A S WELL AS COPIES OF BANK STATEMENT ALL OF WHICH WOULD INDICATE THAT THE PURCHASES WERE IN FACT MADE. IN OUR VIEW, ME RELY BECAUSE THE SUPPLIERS HAVE NOT APPEARED BEFORE THE ASSESSI NG OFFICER OR THE CIT(A), ONE CANNOT CONCLUDE THAT THE PURC HASES WERE NOT MADE BY THE RESPONDENT- ASSESSEE' CIT VS. SAMIR BIO- TECH PVT LTD (2010) 325 ITR 294 (DEL-HIGH COURT) 'IDENTITIES OF THE SUBSCRIBERS ARE NOT IN DO UBT. THE TRANSACTIONS HAVE ALSO BEEN UNDERTAKEN THROUGH BANKING CHANNE LS INASMUCH AS THE APPLICATION MONEY FOR THE SHARES WAS GIVEN T HROUGH ACCOUNT PAYEE CHEQUES. THE CREDITWORTHINESS HAS ALSO BEEN E STABLISHED, AS INDICATED BY THE TRIBUNAL. THE SUBSCRIBERS HA VE GIVEN THEIR COMPLETE DETAILS WITH REGARD TO THEIR TAX RETURNS A ND ASSESSMENTS. IN THESE CIRCUMSTANCES, THE DEPARTMENT COULD NOT DRAW AN ADVERSE INFERENCE AGAINST THE ASSESSEE ONLY BECAUSE T HE SUB SCRIBERS DID NOT INITIALLY RESPOND TO THE SUMMONS. TH E SUBSCRIBERS, HOWEVER, SUBSEQUENTLY GAVE THEIR CONFIRMATION LETTERS AS WOULD ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 38 BE APPARENT FROM THE IMPUGNED ORDER. THE IDENTITY O F THE SUBSCRIBERS STANDS ESTABLISHED AND IT IS ALSO A FAC T THAT THEY HAVE SHOWN THE SAID AMOUNTS IN THEIR AUDITED BALANCE SHEETS AND HAVE ALSO FILED RETURNS BEFORE THE IT AUTHORI TIES. THE DECISION OF THE TRIBUNAL DELETING THE ADDITION CANNOT BEFAULTE D. 18. COMING TO THE CASE LAWS RELIED UPON BY THE LEAR NED DR. THE DR HAS RELIED UPON THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF DCIT VS. NRA IRON & STEEL PVT. LTD. (SUPRA) . WE FIND THAT CO-ORDINATE BENCH OF ITAT VIDE ITS ORDER DATED 03.0 5.2019 IN THE CASE OF SHREE LAXMI ESTATE PVT. LTD. IN ITA NO. 655 7/MUM2017 FOR A.Y. 2013-14 HAD CONSIDERED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NRA IRON & STEEL P. LTD. AND HELD TH AT THE FACTS OF THE CASE BEFORE THE HONBLE SUPREME COURT ARE ENTIRELY DIFFERENT, WHERE ON THE BASIS OF FACTS OF THAT CASE HONBLE SUPREME COURT CAME TO THE CONCLUSION THAT MERE FURNISHING OF CERTAIN DOCU MENTS IS NOT SUFFICIENT ENOUGH AND WHAT IS RELEVANT IS ALL THREE INGREDIENTS, I.E. IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWOR THINESS OF THE PARTIES SHOULD BE PROVED BEYOND DOUBT. WE FIND THA T IN THE CASE BEFORE THE HONBLE SUPREME COURT THE PARTIES NEVER RESPONDED TO 133(6) NOTICES. THE AO HAS CARRIED OUT INQUIRIES B Y ISSUING NOTICES U/S. 133(6), FOR WHICH NONE OF THE COMPANIES HAVE R EPLIED. NONE OF THE COMPANIES PRODUCED BANK STATEMENTS TO ESTABLISH SOURCE OF FUNDS FOR MAKING SUCH HUGE INVESTMENTS IN SHARES, E VEN THOUGH THEY ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 39 WERE DECLARING A VERY MEAGRE INCOME IN THE RETURN. NONE OF THE INVESTORS APPEARED BEFORE THE AO, BUT MERELY SENT R ESPONSE THROUGH DAK. IN THIS CASE, FROM THE FACTS ON RECORD, IT IS CLEAR THAT THE ASSESSEE HAS FILED COMPLETE SET OF DOCUMENTS, BUT T HE AO NEITHER CARRIED OUT ANY INVESTIGATION NOR ISSUED NOTICES U/ S. 133(6) OR SUMMONS U/S. 131(1) TO EXAMINE THE VERACITY OF DOCU MENTS FURNISHED BY THE ASSESSEE. UNLESS, THE AO CARRIED OUT FURTHER INVESTIGATIONS TO ASCERTAIN TRUE NATURE OF TRANSACT IONS, HE CANNOT COME TO THE CONCLUSION MERELY ON THE BASIS OF DOCUM ENTS SUBMITTED BY THE ASSESSEE. THEREFORE, AFTER CONSIDERING REL EVANT FACTS, THE CO- ORDINATE BENCH CAME TO THE CONCLUSION THAT DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF NRA IRON & STE EL PVT. LTD. (SUPRA) HAS NO APPLICATION, WHERE THE AO HAS NOT CA RRIED OUT ANY INQUIRIES. THE RELEVANT FINDINGS OF THE TRIBUNAL R E AS UNDER: 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD BORROWED LOANS FROM THE AFORESAID LOAN CREDITOR S AND HAD DULY REPAID THE SAME IN SUBSEQUENT YEARS BY ACCOUNT PAYE E CHEQUES, FOR WHICH EVIDENCES ARE ALREADY ON RECORD BEFORE US. I T IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAD PAID INTEREST ON THE AFORESAID LOANS WHICH HAD BEEN ALLOWED AS A DEDUCTION BY THE LOWER AUTHORITIES. WE ARE UNABLE TO PERSUADE OURSELVES AS TO HOW THE INTE REST PORTION ON LOAN ALONE COULD BE TREATED AS GENUINE TRANSACTIONS AFTER TREATING THE PRINCIPAL PORTION OF LOAN AS INGENUINE. WE ALSO FI ND THAT THE INTEREST PAID ON SUCH UNSECURED LOANS TO AFORESAID LOAN CRED ITORS HAVE BEEN DULY SUBJECTED TO DEDUCTION OF TAX AT SOURCE. NOTI CE ISSUED U/S 133(6) OF THE ACT BY THE LD AO HAD BEEN DULY REPLIED BY TH E CONCERNED LOAN CREDITORS DIRECTLY BEFORE THE LD AO AND NO DEFICIEN CIES WERE NOTICED BY THE LD AO THEREON. AFTER THIS, THE LD AO DID NO T PROCEED TO MAKE ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 40 FURTHER ENQUIRY ON THE SUBJECT MENTIONED LOAN CREDI TORS. IT IS NOT IN DISPUTE THAT THE ASSESSEE AND THE CONCERNED LOAN CR EDITORS HAD DULY FILED THEIR RESPECTIVE BANK STATEMENTS TO PROVE THE IMMEDIATE SOURCE OF CREDIT FOR ADVANCING LOANS TO THE ASSESSEE COMPA NY, CONFIRMATION OF HAVING GIVEN LOANS TO THE ASSESSEE COMPANY, TOGE THER WITH THEIR INCOME TAX RETURN ACKNOWLEDGEMENTS AND OTHER REQUIS ITE DETAILS CALLED FOR BY THE LD AO IN THE NOTICE U/S 133(6) OF THE ACT. IN CASE IF THE LD AO HAD ANY DOUBT ON THE VERACITY OF THE DOCU MENTS SUBMITTED BY THE LOAN CREDITORS, THE SAME COULD HAVE BEEN CON FRONTED ON THE SAID LOAN CREDITORS BY ISSUING SUMMONS U/S 131 OF T HE ACT AND EXAMINE THEM ON OATH OR CORRESPONDINGLY VERIFY THE SAME THROUGH THE ASSESSING OFFFICERS OF THE CONCERNED LOAN CREDITORS THROUGH THE INTERNAL SOURCE OF THE DEPARTMENT. THE LD AO DID N OT DO EITHER OF THESE IN THE INSTANT CASE AND MERELY DISREGARDED TH E EVIDENCES SUBMITTED ON RECORD BEFORE HIM BOTH BY THE ASSESSEE AS WELL AS BY THE LOAN CREDITORS DIRECTLY TO HIM. THE WRITTEN S UBMISSIONS FILED BY THE LD DR IN THIS REGARD IS REPETITION OF VARIOUS C ONTENTIONS ALREADY AVAILABLE ON RECORD BY THE LOWER AUTHORITIES, APART FROM PLACING RELIANCE ON CERTAIN DECISIONS. WE FIND THAT BOTH T HE AFORESAID LOAN ADDITIONS WERE CONFIRMED BY THE LD CITA BY PLACING RELIANCE ON THE DECISION TAKEN BY HIS PREDECESSOR IN ASST YEAR 2012 -13. WE FIND THAT THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASST Y EAR 2012-13 IN ITA NO. 5954/MUM/2016 DATED 29.12.2017 IN RESPECT OF LO AN TRANSACTIONS OF ENTITIES CONTROLLED BY SHRI PRAVIN KUMAR JAIN AN D OTHERS HAD ELABORATELY DEALT THIS ISSUE AND HELD AS UNDER:- 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE AO MADE ADDITION TOWARDS UNS ECURED LOANS RECEIVED FROM JOSH TRADING COMPANY PVT LTD AN D VIRAJ MERCANTILE PVT LTD ON THE BASIS OF INFORMATION RECE IVED FROM INVESTIGATION WING WHICH REVEALED THAT THE ASSESSEE IS THE BENEFICIARY OF BOGUS ACCOMMODATION ENTRIES PROVIDED BY SHRI PRAVEENKUMAR JAIN THROUGH HIS BOGUS COMPANIES. THE AO HAS MADE ADDITIONS U/S 68 OF THE INCOME-TAX ACT, 19 61 ON THE GROUND THAT THOUGH THE ASSESSEE HAS FURNISHED NECESSARY EVIDENCES TO PROVE IDENTITY OF THE PARTIE S, BUT FAILED TO ESTABLISH GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF PARTIES IN THE BACKDROP OF CLEA R FINDINGS OF INVESTIGATION WING THAT THOSE COMPANIES ARE HAWALA COMPANIES INVOLVED IN PROVIDING M/S SHREE LAXMI DEVELOPERS ACCOMMODATION ENTRIES. THE AO HAS BROUGH T OUT FACTS IN THE LIGHT OF STATEMENT OF SHRI PRAVINKUMAR JAIN DEPOSED BEFORE THE INVESTIGATION WING TO MAKE ADDIT ION. EXCEPT THIS, THERE IS NO CONTRARY EVIDENCE IN THE P OSSESSION OF THE AO TO DISPROVE THE LOAN TRANSACTIONS FROM JO SH TRADING COMPANY PVT LTD AND VIRAJ MERCANTILE PVT LT D. ON THE OTHER HAND, THE ASSESSEE HAS FURISHED VARIOUS D ETAILS INCLUDING CONFIRMATION LETTERS FROM THE PARTIES, TH EIR BANK ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 41 STATEMENTS ALONGWITH THEIR FINANCIAL STATEMENTS TO PROVE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWOR THINESS OF THE PARTIES. THE ASSESSEE ALSO FURNISHED EVIDENCES TO PROVE THAT THE PARTIES HAVE RESPONDED TO THE NOTICES ISSU ED U/S 133(6) BY AO BY FILING VARIOUS DETAILS. THE ASSESSE E ALSO FILED BANK STATEMENTS TO PROVE THAT THE SAID UNSECU RED LOANS HAVE BEEN REPAID IN THE SUBSEQUENT FINANCIAL YEARS. THEREFORE, WE ARE OF THE VIEW THAT THERE IS NO REAS ON FOR THE AO TO DOUBT THE GENUINENESS OF TRANSACTIONS DESPITE FURNISHING NECESSARY EVIDENCES INCLUDING THEIR FINA NCIAL STATEMENTS, BANK STATEMENTS AND IT RETURNS. 6. THE AO HAS MADE ADDITION U/S 68 OF THE ACT, ON T HE GROUND THAT THE UNSECURED LOANS ARE BOGUS ACCOMMODA TION ENTRIES PROVIDED BY SHRI PRAVINKUMAR JAIN THROUGH H IS HAWALA COMPANIES. THE PROVISIONS OF SECTION 68 DEAL WITH C ASES WHERE ANY SUM FOUND CREDITED IN THE BOOKS OF ACCOUN T OF THE ASSESSEE IN ANY FINANCIAL YEAR AND THE ASSESSEE OFF ERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE AO, SATISFACTORY, THEN SUM SO CREDITED MAY BE CHARGED T O INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. A PLAIN READING M/S SHREE LAXMI DEVELOPERS OF SECTION 68 MAKES IT CLEAR THAT THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE. IT IS WELL SETTLED LEGAL POSITION THAT TH E ASSESSEE HAS TO DISCHARGE 3 MAIN INGREDIENTS IN ORDER TO DIS CHARGE THE INITIAL BURDEN OF PROOF, I.E. THE IDENTITY OF THE C REDITOR, THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE CREDITORS. ONCE THE ASSESSEE DISCHARGES INITIAL BUR DEN PLACED UPON HIM, THEN THE BURDEN TODIS PROVE THE SA ID CLAIM SHIFTS UPON THE AO. IN THIS CASE, THE ASSESSEE HAS DISCHARGED HIS ONUS CAST U/S 68 BY FILING IDENTITY OF THE CREDITORS, GENUINENESS OF TRANSACTIONS AND CREDITWO RTHINESS OF THE PARTIES WHICH IS EVIDENT FROM THE FACT THAT THE ASSESSEE HAS FURNISHED FINANCIAL STATEMENTS OF THE CREDITORS WHEREIN THE SAID TRANSACTION HAS BEEN DISCLOSED IN THE RELE VANT FINANCIAL YEARS. WE FURTHER NOTICE THAT THE ASSESSE E ALSO FILED FINANCIAL STATEMENTS OF THE CREDITORS WHICH ARE ENC LOSED IN PAPER BOOK FILED. ON PERUSAL OF THE FINANCIAL STATE MENTS FILED BY THE ASSESSEE, WE FIND THAT BOTH THE COMPANIES AR E ACTIVE IN THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS. TH IS FACT HAS BEEN FURTHER SUPPORTED BY THE LETTER OF AO WHEREIN THE AO HAS ACCEPTED THAT BOTH COMPANIES, VIZ. JOSH TRADING COMPANY PVT LTD AND VIRAJ MERCANTILE PVT LTD ARE AC TIVE IN MCA WEBSITE. WE FURTHER NOTICE THAT BOTH THE COMPAN IES HAVE FILED FINANCIAL STATEMENTS FOR THE YEAR ENDING 31-03- 2006. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS DISCHARGED ITS INITIAL BURDEN CAST U/S 68 BY ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 42 FILING IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE PARTIES. ONCE, THE ASSESSEE HAS DISCHARGED ITS INITIAL BURDEN, THE BURDEN SHIFTS TO THE AO TO PROVE OTHERWISE. IN THIS CASE, THE AO MADE ADDITION ONLY ON THE BASIS M/S SHREE LAXMI DEVELOPERS OF INFORMATION RECEIVED FROM INVESTIGATION WING, BUT NOT BASED ON ANY EVIDENCE TO DISPROVE THE LOAN TRANSACTION FROM ABOV E COMPANIES ARE INGENUINE. THEREFORE, WE ARE OF THE V IEW THAT THERE IS NO REASON FOR THE AO TO TREAT LOANS FROM A BOVE 2 COMPANIES AS UNEXPLAINED CREDITS U/S 68 OF THE ACT. 7. COMING TO THE CASE LAWS RELIED UPON BY THE ASSES SEE, THE ASSESSEE HAS RELIED UPON THE DECISION OF HON'BLE BO MBAY HIGH COURT IN THE CASE OF CIT VS GAGANDEEP INFRASTR UCTURE PVT LTD (2017) 394 ITR 680 (BOM). WE HAVE GONE THRO UGH THE CASE LAWS RELIED UPON BY THE ASSESSEE IN THE LI GHT OF THE FACTS OF THE PRESENT CASE AND FIND THAT THE HON'BLE HIGH COURT CATEGORICALLY OBSERVED THAT THE PROVISO TO SECTION 68 HAS BEEN INSERTED BY THE FINANCE ACT, 2012 WEF 01-04- 2 013 IS APPLICABLE FROM AY 2013-14 ONWARDS. THE COURT FURTH ER OBSERVED THAT THE PARLIAMENT DID NOT INTRODUCE THE PROVISO TO SECTION 68WITH RETROSPECTIVE EFFECT NOR DOES THE PROVISO INTRODUCED STATES THAT IT WAS INTRODUCED FOR REMOVA L OF DOUBTS. THEREFORE, IT IS NOT OPEN TO GIVE RETROSPEC TIVE EFFECT. THE RELEVANT PORTION OF THE ORDER OF HIGH COURT IS EXTRACTED BELOW:- 'THE PROVISO TO SECTION 68 HAS BEEN INTRODUCED BY THE FINANCE ACT, 2012 WITH EFFECT FROM 1-4-2013. TH US, IT WOULD BE EFFECTIVE ONLY FROM THE ASSESSMENT YEAR 20 13-14 ONWARDS AND NOT FOR THE SUBJECT ASSESSMENT YEAR. IN FACT, BEFORE THE TRIBUNAL, IT WAS NOT EVEN THE CASE OF TH E REVENUE THAT SECTION 68 AS IN FORCE DURING THE SUBJECT YEAR S HAS TO BE READ/UNDERSTOOD AS THOUGH THE PROVISO ADDED SUBSEQU ENTLY EFFECTIVE ONLY FROM 1-42013 WAS ITS NORMAL MEANING. THE PARLIAMENT DID NOT INTRODUCED TO PROVISO OF SECTION 68, WITH RETROSPECTIVE EFFECT NOR DOES THE PROVISO TO INTROD UCED STATES THAT IT WAS INTRODUCED 'FOR REMOVAL OF DOUBTS' OR T HAT IT IS 'DECLARATORY'. THEREFORE, IT IS NOT OPEN TO GIVE IT RETROSPECTIVE EFFECT, BY PROCEEDING THE BASIS THAT THE ADDITION O F THE PROVISO TO SECTION 68IS M/S SHREE LAXMI DEVELOPERS IMMATERIAL AND DOES NOT CHANGE THE INTERPRETATION O F SECTION 68 BOTH BEFORE AND AFTER THE ADDING OF THE PROVISO. IN VIEW OF THE MATTER THE THREE ESSENTIAL TESTS WHI LE CONFIRMING THE SECTION 68 LAID DOWN BY THE COURT NA MELY THE GENUINENESS OF THE TRANSACTION, IDENTITY AND THE CA PACITY OF THE INVESTOR HAVE ALL BEEN EXAMINED BY THE IMPUGNED ORDER ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 43 OF THE TRIBUNAL AND ON FACT IT WAS FOUND SATISFIED. FURTHER IT WAS A SUBMISSION ON BEHALF OF THE REVENUE THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIVES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAREHOLDERS, I.E., T HEY ARE BOGUS. THE APEX COURT IN A CASE IN THIS CONTEXT TO THE PRE- AMENDED SECTION 68 HAS HELD THAT WHERE THE REVENUE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM BOGUS SHAREHOLDERS THEN IT IS FOR THE INCOME- TAX OFFICER TO PROCEED BY REOPENING THE ASSESSMENT OF SUCH SHAREHOLDER AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW. IT DOES NOT ENTITLE THE REVENUE TO ADD THE SAM E TO THE ASSESSEE'S INCOME AS UNEXPLAINED CASH CREDIT.' [PAR A 3] 8. THE ASSESSEE HAS ALSO RELIED UPON THE DECISION O F HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS ARCHID INDU STRIES PVT LTD IN ITA NO1433/MUM/2014 DATED 5TH JULY, 2017 . THE HON'BLE BOMBAY HIGH COURT, AFTER CONSIDERING RELEVA NT FACTS AND ALSO BY FOLLOWING JUDGEMENT IN THE CASE OF CIT VS GAGANDEEP INFRASTRUCTURE PVT LTD (SUPRA) HELD AS UN DER:_ 6] THE TRIBUNAL HAS CONSIDERED THAT THE ASSESSEE HAS PRODUCED ON RECORD THE DOCUMENTS TO ESTABLISH THE GENUINENESS OF THE PARTY SUCH AS PAN OF ALL THE CRE DITORS ALONG WITH THE CONFIRMATION, THEIR BANK STATEMENTS SHOWING PAYMENT OF SHARE APPLICATION MONEY. IT WAS ALSO OBS ERVED BY THE TRIBUNAL THAT THE ASSESSEE HAS ALSO PRODUCED TH E ENTIRE RECORD REGARDING ISSUANCE OF SHARE I.E. ALLOTMENT O F SHARES TO THESE PARTIES, THEIR SHARE APPLICATION FORMS, ALLOT MENT LETTERS AND SHARE CERTIFICATES, SO ALSO THE BOOKS OF ACCOUN T. THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF THESE PERSONS DISCLOSES THAT THESE PERSONS HAD SUFFICIENT FUNDS I N THEIR ACCOUNTS FOR INVESTING IN THE SHARES OF THE ASSESSE E. IN VIEW OF THESE VOLUMINOUS DOCUMENTARY EVIDENCE, ONLY BECA USE THOSE PERSONS HAD NOT APPEARED BEFORE THE ASSESSING OFFICER WOULD NOT NEGATE THE CASE OF THE ASSESSEE. THE JUDGMENT IN CASE OF GAGANDEEP INFRASTRUCTURE (P) LT D (SUPRA) WOULD M/S SHREE LAXMI DEVELOPERS BE APPLICABLE IN T HE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE.' 9. THE ASSESSEE HAS ALSO RELIED UPO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (2008) 216 CTR 195 (SC). THE HON'BLE APEX COURT WHILE DELETING THE ADDITION MADE U/S 68 OBSERVED THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPA NY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIV EN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO R EOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW , BUT THIS AMOUNT OF SHARE APPLICATION MONEY CANNOT BE REGARDE D AS UNDISCLOSED INCOME U/S 68 OF THE INCOME-TAX ACT, 19 61. ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 44 10. COMING TO THE CASE LAWS RELIED UPON BY THE LD.D R. THE LD.DR RELIED UPON THE DECISION OF HON'BLE DELHI HIG H COURT IN THE CASE OF PRINCIPAL CIT VS BIKRAM SINGH IN ITA NO.55/DEL/2017 DATED 25-03-2017. WE HAVE GONE THROU GH THE CASE LAW RELIED BY THE LD.DR IN THE LIGHT OF FA CTS OF THE PRESENT CASE AND FIND THAT THE FACTS OF CASE BEFORE HON'BLE DELHI HIGH COURT ARE ENTIRELY DIFFERENT FROM FACTS OF THE PRESENT CASE. THE HON'BLE DELHI HIGH COURT, HAS CON SIDERED THE FACT THAT THE INDIVIDUALS, WHO ADVANCED LOANS H AD NO FINANCIAL STRENGTH TO LEND SUCH HUGE SUM OF MONEY T O THE ASSESSEE, THAT TOO, WITHOUT ANY COLLATERAL SECURITY WITHOUT INTEREST AND WITHOUT A LENDER AGREEMENT. UNDER THES E FACTS, THE HON'BLE COURT HELD THAT MERE ESTABLISHING OF TH EIR IDENTITY AND THE FACT THAT THE AMOUNTS HAVE BEEN TRANSFERRED THROUGH CHEQUE PAYMENT DOES NOT BY ITSELF MEAN THAT THE TRANSACTIONS ARE GENUINE. IN THIS CASE, THE ASSESSE E HAS FURNISHED ALL EVIDENCES AND ALSO THE PARTIES PERSON ALLY RESPONDED TO THE NOTICES M/S SHREE LAXMI DEVELOPERS ISSUED BY THE AO U/S 133(6) BY FILING VARIOUS DETAI LS, THEREFORE, CASE LAW RELIED UPON BY THE LD.DR CANNOT BE APPLICABLE TO THE FACTS OF THE PRESENT CASE. 11. IN THIS VIEW OF THE MATTER AND CONSIDERING THE RATIO OF THE CASE LAWS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS DISCHARGED IDENTITY, GENUINEN ESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. T HEREFORE, THERE IS NO REASON FOR THE AO TO MAKE ADDITION TOWA RDS LOAN U/S 68 OF THE ACT. HENCE, WE DIRECT THE AO TO DELET E ADDITION MADE TOWARDS LOANS ALONGWITH INTEREST U/S 68 OF THE ACT. 8.1. WE FIND THAT THE LD DR VEHEMENTLY PLACED RELI ANCE ON THE RECENT DECISION OF HONBLE SUPREME COURT IN THE CAS E OF PCIT VS NRA IRON & STEEL PVT LTD ARISING OUT OF SLP(CIVIL) NO. 29855 OF 2018 DATED 5.3.2019 IN SUPPORT OF CONTENTIONS OF THE REV ENUE ON THE IMPUGNED ISSUE. IN THIS REGARD, WE FIND THAT THE F ACTS BEFORE THE HONBLE SUPREME COURT ARE CLEARLY DISTINGUISHABLE O N THE FOLLOWING GROUNDS:- A) IN PARA 3.6. OF THE SAID JUDGEMENT OF HONBLE SU PREME COURT, IT WAS MENTIONED THAT THE ENTIRE SHARE CAPITAL HAD BEE N RECEIVED BY THE ASSESSEE THROUGH NORMAL BANKING CHANNELS BY ACCOUNT PAYEE CHEQUES / DEMAND DRAFTS, AND PRODUCED DOCUMENTS SUC H AS INCOME TAX RETURN ACKNOWLEDGEMENTS TO ESTABLISH IDENTITY A ND GENUINENESS OF THE TRANSACTION. IT WAS SUBMITTED THAT, THERE WAS NO CAUSE TO TAKE RECOURSE TO SECTION 68 OF THE ACT, AND THAT THE ONU S ON THE ASSESSEE COMPANY STOOD FULLY DISCHARGED. B) IN PARA 3.7. OF THE SAID JUDGEMENT OF HONBLE SU PREME COURT, IT WAS MENTIONED THAT THE AO HAD ISSUED SUMMONS TO THE ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 45 REPRESENTATIVES OF THE INVESTOR COMPANIES. DESPITE THE SUMMONS HAVING BEEN SERVED, NOBODY APPEARED ON BEHALF OF AN Y OF THE INVESTOR COMPANIES. THE DEPARTMENT ONLY RECEIVED S UBMISSIONS THROUGH DAK, WHICH CREATED A DOUBT ABOUT THE IDENTI TY OF THE INVESTOR COMPANIES. C) IN PARA 3.8. OF THE SAID JUDGEMENT OF HONBLE SU PREME COURT, IT WAS MENTIONED THAT THE AO INDEPENDENTLY GOT FIELD E NQUIRIES CONDUCTED WITH RESPECT TO THE IDENTITY AND CREDIT-W ORTHINESS OF THE INVESTOR COMPANIES, AND TO EXAMINE THE GENUINENESS OF THE TRANSACTION. ENQUIRIES WERE MADE AT MUMBAI, KOLKAT A AND GUWAHATI WHERE THESE COMPANIES WERE STATED TO BE SITUATED. IN THE AFORESAID CASE BEFORE THE HONBLE SUPREME CO URT, THE RESULT OF THE ENQUIRY BY THE AO REVEALED THE FOLLOWING:- A) NOTICE WERE DULY SERVED ON CERTAIN INVESTOR COMP ANIES, BUT NO REPLY WAS RECEIVED FROM THEM ; B) SOME OF THE INVESTOR COMPANIES WERE FOUND TO BE CLOSED AT THEIR CORRECT ADDRESS ; C) NOTICE COULD NOT BE SERVED ON SOME OF THE INVEST OR COMPANIES ; D) SOME OF THE INVESTOR COMPANIES REPLIED TO NOTICE U/S 133(6) OF THE ACT WHEREIN THEY HAD CONFIRMED HAVING MADE INVESTME NT IN SHARE APPLICATION MONEY IN NRA IRON & STEEL PVT LTD BUT H AD LIMITED INCOME AS PER THEIR INCOME TAX RETURNS WHICH IN TURN RESUL TED IN DOUBTING OF CREDITWORTHINESS ; E) MOST OF THE INVESTOR COMPANIES THOUGH CONFIRMED THE FACT OF HAVING MADE INVESTMENT IN SHARE APPLICATION MONEY IN NRA I RON & STEEL PVT LTD , BUT HAD NOT FILED THEIR BANK STATEMENTS TO PR OVE THE IMMEDIATE SOURCE OF CREDIT AVAILABLE TO THEM FOR MAKING THE S AID INVESTMENT. 8.1.1. IN THE INSTANT CASE BEFORE US, THE LD AO DID NOT ISSUE ANY SUMMONS U/S 131 OF THE ACT OR MAKE FURTHER ENQUIRIE S TO EXAMINE THE VERACITY OF THE EVIDENCES FILED ON RECORD BEFORE HI M BY THE ASSESSEE AS WELL AS BY THE LOAN CREDITORS IN RESPONSE TO NOT ICE U/S 133(6) OF THE ACT. MOREOVER, ALL THE LOAN CREDITORS HAD DULY FUR NISHED THEIR RESPECTIVE BANK STATEMENTS PROVING THE IMMEDIATE SO URCE OF CREDIT FOR THEM TO JUSTIFY THAT THEY HAD SUFFICIENT CREDITWORT HINESS TO ADVANCE LOAN TO THE ASSESSEE COMPANY. FROM THE PERUSAL OF THE BALANCE SHEET OF ALL INVESTOR COMPANIES, ALL THE LOAN CREDI TORS HAD SUFFICIENT OWN FUNDS IN THEIR KITTY WHICH PROVE THEIR CREDITWO RTHINESS TO ADVANCE LOAN TO THE ASSESSEE COMPANY. AS HAS BEEN STATED HE REINABOVE, THE MOST EXCRUCIATING POINT OF DIFFERENCE IN FACTS VIS A VIS THE FACTS OF THE CASE BEFORE THE HONBLE SUPREME COURT SUPRA THAT TH E INVESTOR COMPANIES HAD NOT EVEN FURNISHED THEIR BANK STATEME NTS TO PROVE THEIR IMMEDIATE SOURCE OF CREDIT FOR MAKING INVESTM ENT IN SHARE APPLICATION MONIES OF NRA IRON & STEEL PVT LTD. FRO M THE BANK STATEMENTS FURNISHED BY THE LOAN CREDITORS IN THE C ASE OF THE ASSESSEE HEREIN, WE FIND THAT THERE WERE NO CASH DE POSITS IN THE BANK ACCOUNTS OF THE LENDERS PRIOR TO ISSUANCE OF L OAN TO THE ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 46 ASSESSEE COMPANY. IN THE CASE BEFORE THE HONBLE SUPREME COURT, THE AO IN THAT CASE HAD MADE FIELD ENQUIRIES AT MUM BAI, KOLKATA AND GUWAHATI WHERE THOSE INVESTOR COMPANIES WERE STATED TO BE SITUATED TO EXAMINE THEIR IDENTITY AND CREDENTIALS AND THE R ESULT OF SUCH ENQUIRY HAD BEEN SUMMARIZED HEREINABOVE. WHEREAS I N THE INSTANT CASE BEFORE US, NO SUCH ENQUIRIES WERE CONDUCTED BY THE LD AO TO DOUBT THE VERACITY OF THE DETAILS AND EVIDENCES FIL ED BY THE LOAN CREDITORS IN RESPONSE TO NOTICE U/S 133(6) OF THE A CT DIRECTLY BEFORE HIM. IN THE INSTANT CASE BEFORE US, ALL THE NOTICE S U/S 133(6) OF THE ACT WERE DULY SERVED ON ALL THE AFORESAID LOAN CRED ITORS AND ALL OF THEM HAD INDEPENDENTLY FILED THEIR REPLIES DIRECTLY BEFORE THE LD AO. THE BANK STATEMENTS WERE ALSO DULY FURNISHED BY THE LOAN CREDITORS TO PROVE THAT THEY HAD SUFFICIENT CREDITWORTHINESS TO ADVANCE LOAN TO THE ASSESSEE COMPANY AND SINCE ALL THE TRANSACTIONS WER E ROUTED THROUGH REGULAR BANKING CHANNELS BY ACCOUNT PAYEE C HEQUES AND IN VIEW OF THE FACT THAT THERE WERE NO CASH DEPOSITS P RIOR TO ISSUANCE OF LOAN TO THE ASSESSEE COMPANY, THE GENUINENESS OF TR ANSACTIONS ALSO STAND CLEARLY ESTABLISHED. THIS GOES TO PROVE THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS OF ALL THE LOAN CREDITORS. IN THIS SCENARIO, IT COULD BE SAFELY PRE SUMED THAT THE LD AO WAS APPARENTLY SATISFIED WITH THE REPLIES GIVEN THE REON BY THE LOAN CREDITORS DIRECTLY BEFORE HIM IN RESPONSE TO NOTICE U/S 133(6) OF THE ACT AND HENCE THERE IS NO NEED TO MAKE ANY EXAMINAT ION FURTHER. 8.2. IN VIEW OF THE AFORESAID DISTINGUISHING FEATU RES ON FACTS OF THE ASSESSEE COMPANY VIS A VIS THE FACTS BEFORE THE HON BLE SUPREME COURT, WE HOLD THAT THE RELIANCE PLACED BY THE LD D R ON THE DECISION OF HONBLE SUPREME COURT SUPRA DOES NOT COME TO THE RESCUE OF THE REVENUE. 8.3. AT THE COST OF REPETITION, WE WOULD LIKE TO S TATE THAT THE LD CIT(A) HAD MERELY PLACED RELIANCE ON THE DECISION T AKEN BY HIS PREDECESSOR IN ASST YEAR 2012-13 IN ASSESSEES OWN CASE IN SIMILAR SET OF FACTS. WE FIND THAT THIS DECISION FOR ASST YEAR 2012-13 IN ASSESSEES OWN CASE HAS BEEN REVERSED BY THIS TRIBU NAL VIDE ITS ORDER DATED 29.12.2017 REFERRED TO SUPRA. IN VIEW OF OUR AFORESAID FINDINGS IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESP ECTFULLY FOLLOWING THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CAS E FOR ASST YEAR 2012-13, WE HOLD THAT THE ASSESSEE COMPANY HAD DULY PROVED THE NATURE AND SOURCE OF CREDIT IN THE FORM OF UNSECURE D LOAN AND HAD DULY SATISFIED THE THREE NECESSARY INGREDIENTS OF S ECTION 68 OF THE ACT VIZ, THE IDENTITY OF THE LOAN CREDITORS , CREDITWOR THINESS OF LOAN CREDITORS AND GENUINENESS OF LOAN TRANSACTIONS. HE NCE WE DIRECT THE LD AO TO DELETE THE ADDITION MADE IN THE SUMS OF RS 50 LACS AND RS 25 LACS TOWARDS UNSECURED LOAN U/S 68 OF THE ACT. A CCORDINGLY, THE GROUNDS 1 TO 6 RAISED BY THE ASSESSEE ARE ALLOWED. ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 47 19. IN THE CASE OF PCIT VS. HI-TECH RESIDENCY PVT. LTD. (2018) 257 TAXMAN 335, HONBLE SUPREME COURT HAS CONSIDERED ID ENTICAL ISSUE AND HELD THAT WHERE AN ASSESSEE COMPANY HAD DISCHAR GED THE ONUS OF ESTABLISHING IDENTITY, GENUINENESS OF TRANSACTIO N AND CREDITWORTHINESS OF INVESTORS, NO ADDITIONS COULD B E MADE U/S. 68 OF THE I.T. ACT, 1961. WE, FURTHER, NOTED THAT ALTHOU GH THE APEX COURT HAS NOT EXPRESSED ANY OPINION, BECAUSE OF DISMISSAL OF SLP FILED BY THE ASSESSEE, THE FACT OF THE MATTER IS THAT THIS I SSUE HAS BEEN CONSIDERED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD (SUPRA), WHERE THE ISSUE HAS BEEN THOROUGHLY EXAMINED IN THE LIGHT OF PROVISIONS OF SECTION 68 O F THE ACT, AND HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHARE HOLDERS, WHOSE NAM ES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED T O REOPEN THEIR ASSESSMENT IN ACCORDANCE WITH LAW, BUT SUM RECEIVED FROM SHARE HOLDERS CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 20. IN THIS VIEW OF THE MATTER AND CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO TAKING INTO CON SIDERATION VARIOUS CASE LAWS AS DISCUSSED HEREINABOVE, WE ARE OF THE C ONSIDERED VIEW THAT THE ASSESSEE HAS DISCHARGED ITS INITIAL ONUS T O PROVE IDENTITY, ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 48 GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES BY FILING VARIOUS DOCUMENTS. THE AO, WITHOUT CARRYING OUT FURTHER INQUIRIES IN ORDER TO ASCERTAIN THE CLAIM OF THE AS SESSEE, JUMPED INTO CONCLUSION ON THE BASIS OF FINANCIAL STATEMENTS OF THE SUBSCRIBERS THAT NONE OF THEM HAD ENOUGH SOURCE OF INCOME TO ES TABLISH CREDITWORTHINESS. THEREFORE, WE ARE OF THE VIEW TH AT THE AO WAS ERRED IN MAKING ADDITIONS TOWARDS SHARE CAPITAL U/S 68 OF THE INCOME TAX ACT, 1961. THE LEARNED CIT(A) AFTER CONSIDERING RELEVANT FACTS AND ALSO BY RELIED UPON VARIOUS CASE LAWS HAS RIGHT LY DELETED ADDITIONS MADE BY THE AO TOWARDS SHARE CAPITAL U/S 68 OF THE INCOME TAX ACT, 1961. HENCE, WE ARE INCLINED TO UPH OLD ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION S MADE TOWARDS SHARE CAPITAL U/S. 68 OF THE ACT. 21. IN THE RESULT APPEAL FILED BY THE REVENUE IS DI SMISSED. CO.NO.74/MUM/2019 22. THE ASSESSE HAS FILED CROSS OBJECTION AGAINST T HE ORDER OF THE LD.CIT(A) CHALLENGING THE FINDINGS OF LD.CIT(A), IN RESPECT OF CONFIRMING THE ACTION OF THE AO IN REOPENING ASSESS MENT U/S 147 OF THE I.T.ACT, 1961. SINCE, WE HAVE ALREADY DECIDED T HE ISSUE OF ADDITIONS MADE BY THE AO, IN RESPECT OF SHARE CAPIT AL AND SHARE PREMIUM U/S 68 OF THE I.T.ACT, 1961, IN FAVOUR OF T HE ASSESSEE AND ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 49 AGAINST REVENUE IN APPEAL FILED BY THE REVENUE IN I TA.NO. 903/MUM/2018, THE CROSS OBJECTION FILED BY THE ASSE SSEE CHALLENGED VALIDITY OF REOPENING OF ASSESSMENT BECOMES ACADEMI C IN NATURE AND, THEREFORE, THE CROSS EXAMINATION FILED BY THE ASSESSEE HAS BEEN DISMISSED AS INFRUCTUOUS. 23. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMI SSED. ITA.NO. 905/MUM/2018 AND CO.NO. 76/MUM/2019 24. THE FACTS AND ISSUES INVOLVED IN THIS APPEAL F ILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESEE ARE IDENT ICAL TO THE FACTS AND ISSUES WHICH WE HAVE ALREADY CONSIDERED IN ITA NO. 903/MUM/2018 AND CO.NO. 74/MUM/2019 FOR AY 2009-10. THE REASONS GIVEN BY US IN PRECEDING PARAGRAPHS IN ITA NO. 903/MUM/2018 SHALL MUTATIS MUTANDIS APPLY TO THIS A PPEAL ALSO. WE, THEREFORE FOR DETAILED REASONS GIVEN BY US IN PRECE DING PARAGRAPH IN ITA N. 903/MUM/2018, DIRECT THE AO DELETE ADDITIONS MADE TOWARDS SHARE CAPITAL U/S 38 OF THE INCOME TAX ACT, 1961 AN D ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IN ITA NO. 905/MUM/ 2018 IS DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASS ESEE IN CO.NO. 76/MUM/2019 IS ALSO DISMISSED AS INFRUCTUOUS. 25. FINALLY, AS A RESULT, ALL APPEALS FILED BY THE REVENUE ARE DISMISSED AND CROSS OBJECTIONS FILED BY THE ASSESSE E ARE ALSO DISMISSED. ITA.NOS 903 & 905/MUM/2018 C.O.NO. 74 & 76/MUM/2019 M/S. ACRO EXPORTS TRADE PVT.LTD. & M/S. AMAZON METALS PVT.LTD. 50 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 /08 /2019 SD/- (RAM LAL NEGI) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 28/08/2019 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//