L.D.K. Builders (P) Ltd, New Delhi V. Dy. C.I.T., Central Circle, Agra

CO 76/AGR/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6498 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-10-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-10-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 21-09-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR RAKESH GUPTA
• Keywords: Unexplained investment; Depreciation; Share purchase agreement; Opportunity of cross examination; Source of fund; Corroborative evidences; Valuation report; Accommodation entries
• Section: 143(3); 142(1); 153A; 133(6); 131; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NOS.355, 356 & 358/AGR/2010 ASSESSMENT YEARS: 2003-04, 2004-05 & 2005-06 RESPE CTIVELY DY. COMMISSIONER OF INCOME TAX, VS. M/S LDK SHARES & SECURITIES (P)LTD., CENTRAL CIRCLE, AGRA. 195, PATPARGANJ INDUSTRIAL AREA, NEW DELHI. (PAN: AAACL 6604 Q) C.O. NOS.78, 79 & 80/AGR/2010 (IN ITA NOS.355, 356 & 358/AGR/2010 ASSESSMENT YEARS: 2003-04, 2004-05 & 2005-06 RESPE CTIVELY M/S LDK SHARES & SECURITIES (P)LTD., VS. DY. CO MMISSIONER OF INCOME TAX, 195, PATPARGANJ INDUSTRIAL AREA, CENTRAL CIRCLE, AGRA. NEW DELHI. (PAN: AAACL 6604 Q) ITA NOS.345, 346, 347, 348, 378 & 380/AGR/2010 ASSESSMENT YEARS: 2003-04, 2004-05, 2005-06, 2006- 07, 2007-08 & 2008-09 RESPECTIVELY DY. COMMISSIONER OF INCOME TAX, VS. M/S LDK BUILDE RS (P) LTD., CENTRAL CIRCLE, AGRA. 195, PATPARGANJ INDUSTRIA L AREA, NEW DELHI. (PAN: AABCL 1716 A) C.O. NOS.74, 75, 76, 77 & 17/AGR/2010 (IN ITA NOS.345, 346, 347, 348 & 378 /AGR/2010 ASSESSMENT YEARS: 2003-04, 2004-05, 2005-06, 2006- 07 & 2007-08 RESPECTIVELY ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 2 M/S LDK BUILDERS (P) LTD., VS. DY. COMMI SSIONER OF INCOME TAX, 195, PATPARGANJ INDUSTRIAL AREA, CENTRAL CIR CLE, AGRA. NEW DELHI. (PAN: AABCL 1716 A) ITA NOS.360 & 361/AGR/2010 ASSESSMENT YEARS: 2004-05 & 2003-04 RESPECTIVELY DY. COMMISSIONER OF INCOME TAX, VS. M/S SHANKER ME RCHANT (P) LTD., CENTRAL CIRCLE, AGRA. 195, PATPARGANJ INDUSTRIA L AREA, NEW DELHI. (PAN: AABCS 5277 R) C.O. NOS.82 & 83/AGR/2010 (IN ITA NOS.360 & 361/AGR/2010) ASSESSMENT YEARS: 2004-05 & 2003-04 RESPECTIVELY M/S SHANKER MERCHANT (P) LTD., VS. DY. COMM ISSIONER OF INCOME TAX, 195, PATPARGANJ INDUSTRIAL AREA, CENTRAL CIR CLE, AGRA. NEW DELHI. (PAN: AABCS 5277 R) (APPELLANTS) (RESPONDENTS) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : DR. RAKESH GUPTA, ADVOCATE DATE OF HEARING : 13.10.2011 & 14.10.2011 DATE OF PRONOUNCEMENT : 20.10.2011 ORDER PER BENCH : THE APPEALS BY THE REVENUE AND THE CROSS OBJECTIONS BY THE ASSESSEES HAVE BEEN FILED AGAINST THE DIFFERENT IMPUGNED ORDERS PA SSED BY THE LD. CIT(A)-II, AGRA. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 3 2. SINCE THE ISSUES INVOLVED AND THE GROUNDS RAISED IN ALL THE AFORESAID APPEALS BY THE REVENUE AND C.O. BY THE ASSESSEE ARE IDENTIC AL, EXCEPT FOR AMOUNTS IN DISPUTE, THEREFORE, ALL THESE APPEALS ARE DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. FOR THE SAKE OF CONVENIENCE, WE ARE REPRODUCING THE GROUNDS RAISED BY THE REVENUE IN ITA NO.345/AGR/2010 AND THE GROUNDS RAIS ED BY THE ASSESSEE IN C.O. NO.74/AGR/2010 AS FOLLOWS:- GROUNDS IN ITA NO.345/AGR/2010 1. THAT THE LD. CIT(A) HAS ERRED IN DRAWING A CONC LUSION REGARDING THE GENUINENESS OF THE SOURCE OF LOAN AND HOLDING IT AS A SHARE CAPITAL MONEY AND THAT THERE IS NO EVIDENCE TO SUGGEST THAT THE IMPUGNED AMOUNT IS APPELLANTS OWN MONEY AND THE SA ME HAS ROUTED IN THE GARB OF SHARE APPLICATION MONEY. CIT(A) HAS NOT GIVEN ANY FACT WHICH COULD INDICATE THAT ASSESSEE HAD DISCHARGED I TS ONUS AS PROVIDED IN SECTION 68 OF THE ACT. 2. THAT CIT(A) HAS TOTALLY IGNORED THE AFFIDAVIT FI LED BY SHRI ANIL GUPTA, DIRECTOR OF M/S WELCOME COIR INDUSTRIES LTD, GWALIOR REGARDING THE RE-ROUTING OF THE APPELLANTS OWN MON EY. CIT(A) THUS ERRED IN NOT ADMITTING THE AFFIDAVIT WHICH WAS EVID ENCE WHICH HAS NEVER BEEN PROVED TO BE FALSE BY CIT(A) AS INDICATE IN THE ANNEXURE TO THESE GROUNDS OF APPEAL. 3 THE CIT(A) ERRED IN GIVING RELIEF ON ACCOUNT OF I NVESTMENT IN PROPERTIES ON WRONG APPRECIATION OF FACTS AND ALSO WITHOUT ANY BASIS ACCEPTED THE SUBMISSION OF THE ASSESSEE DESPITE THE CLEAR FINDING TO THIS EFFECT BY THE A.O. AND FAILED TO CONSIDER THAT THE QUOTING A WRONG SECTION IN THE ASSESSMENT ORDER WILL NOT AFFECT THE TAXABILITY OF UNEXPLAINED INVESTMENT. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 4 4. THE CIT(A) WHILE ARRIVING AT THIS CONCLUSION HAS ERRED IN IGNORING THE PROVISO TO SECTION 142A OF THE ACT WHI CH PERMITS REFERENCE U/S 142A WHERE RE-ASSESSMENT IS REQUIRED TO BE MADE IN ACCORDANCE WITH THE PROVISION OF SECTION 153A OF TH E ACT. 5. CIT(A) ALSO FAILED TO APPRECIATE THAT THE FAILUR E TO FIND ANY EVIDENCE RELATING TO UNDISCLOSED INVESTMENT IN THE PROPERTIES DURING THE COURSE OF SEARCH CANNOT DILUTE THE EVIDENTIARY VALUE AS ARRIVED AT BY THE DISTRICT VALUATION OFFICER. 6. THAT THE ORDER OF THE LD. CIT(A) BEING ERRONEOUS IN LAW AND ON FACTS BE VACATED AND THE ORDER OF THE AO BE RESTORE D. 7. THAT THE APPELLANT CRAVES LEAVE TO AMEND ANYONE OR MORE OF THE GROUNDS OF THE APPEAL AS STATED ABOVE AS AND WHEN N EED FOR DOING SO MAY ARISE. GROUNDS IN C.O. NO.74/AGR/2010 1. BECAUSE THE DEPARTMENTAL APPEAL IS AGAINST THE FACTS OF THE CASE AND LAW ON THE SUBJECT AND IS LIABLE TO BE DISMISSE D. 2. BECAUSE THE LEARNED CIT(A) HAS ERRED IN NOT QUAS HING THE ACTION U/S 153C AND IN NOT ANNULLING THE IMPUGNED A SSESSMENT AND HOLDING THAT THE ASSESSING OFFICER HAS CORRECTLY IN ITIATED THE PROCEEDINGS, ISSUED NOTICE AND COMPLETED THE ASSESS MENT U/S 153C OF THE ACT. NO INCRIMINATING MATERIAL WAS FOUND DURIN G THE SEARCH AND HENCE PROCEEDINGS U/S 153C ARE BAD IN LAW. 3. BECAUSE THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, MODIFY OR CHANGE ANY GROUND OR GROUNDS OF APPEAL AT THE TIME OF HEARING OF APPEAL. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 5 4. THE BRIEF FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT A SEARCH WAS CONDUCTED ON THE BUSINESS PREMISES OF M/S. LDK SHAR ES & SECURITIES (P) LIMITED ON 30.10.2008 IN CONSEQUENCE TO WHICH PROCEEDINGS WERE INITIATED U/S 153A OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) AND AC TION WAS ALSO TAKEN BY THE DEPARTMENT U/S 153C OF THE ACT IN THE CASE OF OTHER GROUP COMPANIES NAMELY M/S. LDK BUILDERS (P) LIMITED AND M/S. SHANKER MERCHANTS (P) LIMITED. 5. THE ASSESSING OFFICER POINTED OUT THAT THE TRANS ACTION OF THE ASSESSEE AND THE ABOVE MENTIONED CONCERNS WITH M/S WELCOME COIR INDUSTRIES LIMITED, ENQUIRIES WERE MADE BY THE DEPARTMENT FROM M/S WELC OME COIR INDUSTRIES LIMITED, WHICH REVEALED THAT THE LOANS AND SHARE AP PLICATION MONEY SHOWN BY THE ASSESSEE OR THESE CONCERNS WERE NOT GENUINE LOANS E TC., BUT IN FACT WERE ACCOMMODATION ENTRIES IN THE SHAPE OF LOANS/SHARE A PPLICATION MONEY. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ONE MORE EFFORT WAS MADE TO ASCERTAIN THE REAL NATURE OF SUCH TRANSACTIONS WITH M/S WELCOME COIR INDUSTRIES LIMITED AND TO VERIFY ACTUAL SOURCE AND GENUINENESS OF MONEY TRANSFERRED AS LOANS/SHARE APPLICATION MONEY TO THE ASSESSEE AND T HESE CONCERNS, SO A DETAILED QUESTIONNAIRE DATED 22.09.2009 WAS ISSUED TO M/S W ELCOME COIR INDUSTRIES LIMITED AND ITS DIRECTOR SHRI ANIL GUPTA SEEKING EX PLANATION REGARDING SOURCE OF ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 6 DEPOSITS IN BANK ACCOUNT NUMBER 51700101003301 WITH UNION BANK OF INDIA, GWALIOR AND BANK ACCOUNT NO. 121230000123 WITH HDFC BANK, AGRA IN THE NAME OF M/S WELCOME COIR INDUSTRIES LTD. THESE ARE THE ACCOUNTS FROM WHICH FUNDS OF ALLEGED LOANS/SHARE APPLICATION MONEY WERE ROUTED A ND IN THE ACCOUNT IN UNION BANK OF INDIA, DEPOSITS ARE MAINLY EITHER BY CASH O R DRAFTS RANGING FROM RS. 45,000/- TO 49,000/-. 7. IN RESPONSE TO THIS, SHRI ANIL GUPTA HAS FILED A N AFFIDAVIT DATED 30.09.2009 STATING THAT IN FACT NO SHARE APPLICATION MONEY OR LOAN WAS GIVEN BY M/S WELCOME COIR INDUSTRIES LIMITED TO THE OR THE ABOVE TWO COM PANIES OF KESWANI GROUP AND IN FACT THE MONEY SHOWN AS LOANS/SHARE APPLICATION MONEY WAS THE UNDISCLOSED MONEY BELONGING TO SHRI KAMAL KUMAR KESHWANI AND HI S BUSINESS CONCERNS WHICH WAS ONLY ROUTED THROUGH M/S WELCOME COIR INDUSTRIES LIMITED AS LOAN/SHARE APPLICATION MONEY. 8. ON THE BASIS OF THESE ENQUIRIES AND THE AFFIDAVI T OF SHRI ANIL GUPTA THE ASSESSING OFFICER CALLED FOR THE DETAILS OF SHARE A PPLICATION MONEY RECEIVED BY THE ASSESSEES AND ALSO SENT THE AFFIDAVIT OF SHRI ANI L GUPTA ALONGWITH THE BANK ACCOUNT OF UNION BANK OF INDIA, GWALIOR AND HDFC BA NK, AGRA TO THE ASSESSEE TO ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 7 EXPLAIN THEIR POSITION WITH SUPPORTING EVIDENCE AND ALSO TO CONFRONT SHRI ANIL GUPTA. 9. THE SUBSTANCE OF AFFIDAVIT OF SHRI ANIL GUPTA IS THAT THE AMOUNT HAS FIRST BEEN DEPOSITED BY THE DIRECTOR OF ASSESSEES COMPAN IES IN THE BANK ACCOUNT OF WELCOME COIR INDUSTRIES LTD WITH UNION BANK OF INDI A, GWALIOR WHICH WAS THEN TRANSFERRED TO THE BANK ACCOUNT OF WELCOME COIR IND USTRIES LTD WITH HDFC BANK, AGRA AND THEREAFTER IT WAS TRANSFERRED TO THE ASSES SEE COMPANIES. IT HAS ALSO BEEN ALLEGED IN THE AFFIDAVIT OF SHRI ANIL GUPTA THAT TH E ACCOUNT WITH HDFC BANK AND UNION BANK OF INDIA WERE UNDER THE CONTROL OF KAMAL KUMAR KESHWANI. 10. IN RESPONSE TO SUCH NOTICE THE ASSESSEE FILED A LETTER DATED 11.11.2009 REQUESTING TO SUPPLY CERTAIN DOCUMENTS AND TO PROVI DE AN OPPORTUNITY TO EXAMINE SHRI ANIL GUPTA. A COPY OF SUCH LETTER GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER IS PLACED AT PAPER BOOK PAGE NO. 1 & 2 OF S HANKER MERCHANT (P) LIMITED, PAPER BOOK PAGE NO. 18 TO 20 OF L.D.K. SHARES & SEC URITIES (P) LTD AND PAPER BOOK PAGES NO. 1 TO 6 OF L.D.K. BUILDERS (P) LIMITE D. IN THE SAID LETTERS, IN ADDITION TO PROVIDE THE OPPORTUNITY TO CROSS EXAMIN E SHRI ANIL GUPTA, THE FOLLOWING DOCUMENTS WERE ASKED FOR BY THE ASSESSEE: - ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 8 I) BOOKS OF ACCOUNTS OF M/S WELCOME COIR INDUSTRIES LTD FROM FINANCIAL YEAR 2001-02 TO 2007-08. M/S WELCOME COIR INDUSTRIES LTD IS REGULARLY FILING THE INCOME TAX RETURNS AND THE ACCOUNTS ARE AUDITED. HE NCE IT CANNOT BE SAID THAT EITHER THERE ARE NO BOOKS OR THE BOOKS CANNOT BE PRODUCED. MOREOVER WHEN THE INCOME TAX RETURN AND BALANCE SHEET FILED BEARS THE SIGNATURE OF MR. ANIL KUMAR GUPTA. II) PAY IN SLIP OF THE DRAFTS DEPOSITED IN THE BANK ACCOUNT NO. 517001010033001 WITH UNION BANK OF INDIA, MISS HILL SCHOOL BRANCH, PADAW, GWALIOR IN THE NAME OF M/S WELCOME COIR INDU STRIES LTD FOR THE PERIOD 01.04.2001 TO 31.03.2006. III) COPY OF CHEQUE/DRAFT/PAY ORDERS DEPOSITED IN A /C NO. 517001010033001 WITH UNION BANK OF INDIA, MISS HILL SCHOOL BRANCH, PADAW, GWALIOR IN THE NAME OF M/S WELCOME COIR INDUSTRIES LTD FOR THE PER IOD 01.04.2001 TO 31.03.2006. IV) COPY OF CHEQUES ISSUED FROM ACCOUNT NO. 5170010 10033001 WITH UNION BANK OF INDIA, MISS HILL SCHOOL BRANCH, PADAW, GWAL IOR IN THE NAME OF M/S WELCOME COIR INDUSTRIES LTD FOR THE PERIOD 01.04.20 01 TO 31.03.2006. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 9 V) COPY OF REQUISITION SLIP FOR ISSUANCE OF FRESH C HEQUE BOOKS IN ACCOUNT NO. 517001010033001 WITH UNION BANK OF INDIA, MISS HILL SCHOOL BRANCH, PADAW, GWALIOR IN THE NAME OF M/S WELCOME COIR INDU STRIES LTD FOR THE PERIOD 01.04.2001 TO 31.03.2006. VI) COPY OF PAY IN SLIP OF THE CHEQUE/DRAFTS DEPOSI TED IN THE BANK ACCOUNT NO. 1212340000123 WITH HDFC BANK, SANJAY PLACE, AGRA IN THE NAME OF M/S WELCOME COIR INDUSTRIES LTD FOR THE PERIOD 01.04.20 01 TO 31.03.2006. VII) COPY OF CHEQUE/DRAFT/PAY ORDERS DEPOSITED IN A /C NO. 1212340000123 WITH HDFC BANK, SANJAY PLACE, AGRA IN THE NAME OF M/S WE LCOME COIR INDUSTRIES LTD FOR THE PERIOD 01.04.2001 TO 31.03.2 006. VIII) CERTAIN AMOUNTS IN HDFC BANK A/C NO. 12123400 00123 HAVE ALSO BEEN TRANSFERRED APART FROM THE AMOUNTS TRANSFERRED FROM ACCOUNT NO. 517001010033001 WITH UNION BANK OF INDIA, MISS HILL SCHOOL BRANCH, PADAW, GWALIOR. DETAILS OF THE ACCOUNTS AND THE NAM E AND ADDRESS OF ACCOUNT HOLDER FROM WHERE THE AMOUNTS HAVE BEEN TRA NSFERRED TO THE BANK ACCOUNT WITH HDFC BANK, SANJAY PLACE, AGRA. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 10 IX) DETAILS OF ALL THE BANK ACCOUNTS OPERATE BY MR. ANIL GUPTA DURING THE PERIOD 01.04.2001 TO 31.03.2006. 11. THE ASSESSING OFFICER CONSEQUENTLY ISSUED NOTIC ES U/S 142(1) AND SUMMONS U/S 131 TO SHRI ANIL GUPTA TO ATTEND FOR CROSS EXAM INATION ON 24.11.2009 ALONGWITH THE DETAILS, BOOKS OF ACCOUNTS, DOCUMENTS AS MENTIONED IN THE NOTICES U/S 142(1) OF THE ACT. AT THE SAME TIME, NOTICES U/ S 133(6) WERE ALSO ISSUED TO THE UNION BANK OF INDIA, GWALIOR AND HDFC BANK LIMITED, AGRA CALLING FOR INFORMATION AND DOCUMENTS AS REQUESTED BY SHRI KAMA L KUMAR KESHWANI. BUT ON 24.11.2009, SHRI ANIL GUPTA DID NOT ATTEND. REQUIRE D INFORMATION WERE ALSO NOT RECEIVED FROM THE BANKS, THEY ONLY INFORMED THAT TH E REQUIRED DOCUMENTS ARE BEING LOCATED. 12. ONE MORE OPPORTUNITY WAS PROVIDED TO SHRI ANIL GUPTA TO APPEAR FOR CROSS EXAMINATION ON 15.12.2009, BUT AGAIN NONE ATTENDED. ON BEHALF OF SHRI KAMAL KUMAR KESHWANI, DIRECTOR OF ASSESSEE COMPANY, AN AF FIDAVIT DATED 15.12.2009 HAS BEEN FILED WHICH IS PLACED IN PAPER BOOK AT PAGE NO . 25 TO 27 OF L.D.K. SHARE & SECURITIES (P) LIMITED, PAGE NO. 13 TO 15 OF L.D.K. BUILDERS (P) LIMITED AND PAGE NO. 7 TO 9 OF SHANKER MERCHANT (P) LIMITED. IN THI S AFFIDAVIT SHRI KAMAL KUMAR KESHWANI HAS REFUTED THE AFFIDAVIT GIVEN BY SHRI AN IL GUPTA STATING THAT HE HAS ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 11 NEITHER DEPOSITED ANY AMOUNT EITHER IN UNION BANK O F INDIA, GWALIOR OR HDFC BANK, AGRA IN THE NAME OF WELCOME COIR INDUSTRIES L TD. HE HAS ALSO STATED THAT THE BANK ACCOUNT OF HDFC BANK, AGRA HAS BEEN OPENED BY SHRI ANIL GUPTA AND KAMAL KUMAR KESHWANI WAS AUTHORIZED BY SHRI ANIL GU PTA AND SMT. SHELLY GUPTA W/O ANIL GUPTA, THE THEN DIRECTOR OF WELCOME COIR I NDUSTRIES LTD. KAMAL KUMAR KESHWANI VIDE SAID AFFIDAVIT AGAIN REQUESTED THE AS SESSING OFFICER TO PROVIDE THE REQUIRED DETAILS AS PER EARLIER LETTER DATED 11.11. 2009. KAMAL KUMAR KESHWANI VIDE SAID AFFIDAVIT ALSO BOUGHT THE FACT TO THE KNO WLEDGE OF THE ASSESSING OFFICER THAT THERE ARE SEVERAL DEPOSITS IN HDFC BANK AGRA WHERE THE FUNDS HAVE NOT BEEN TRANSFERRED FROM UNION BANK OF INDIA, GWALIOR AND R EQUESTED THE ASSESSING OFFICER TO FURTHER ENQUIRE AND INVESTIGATE THESE DE POSITS. KAMAL KUMAR KESWHANI ALSO AFFIRMED THAT SOME OF THESE DEPOSITS HAVE BEEN DIRECTLY TRANSFERRED FROM THE BANK ACCOUNT OF SHRI ANIL GUPTA AND HIS WIFE SMT. S HELLY GUPTA, BOTH DIRECTORS OF WELCOME COIR INDUSTRIES LTD AT THE TIME OF THESE TR ANSACTIONS. 13. THE ASSESSING OFFICER SENT COPY OF AFFIDAVIT FI LED BY SHRI KAMAL KUMAR KESHWANI ALONGWITH NOTICE U/S 142(1) OF THE ACT TO SHRI ANIL GUPTA FOR ATTENDING THE OFFICE ON 21.12.2009 FOR CROSS EXAMINATION BY S HRI KAMAL KUMAR KESHWANI AND ALSO TO GIVE HIS COMMENTS ON THE AFFIDAVIT FILE D BY SHRI KAMAL KUMAR KESHWANI. AGAIN HE DID NOT ATTEND. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 12 14. THE ASSESSEE COMPANIES AGAIN FILED A LETTER DAT ED 22.12.2009 BEFORE THE ASSESSING OFFICER WHICH IS PLACED AT PAPER BOOK PAG E NO. 21 TO 24 IN THE CASE OF LDK SHARE & SECURITIES (P) LIMITED, PAGE NO. 7 TO 1 0 IN THE CASE OF LDK BUILDERS (P) LIMITED AND PAGE NO. 3 TO 6 IN THE CASE OF SHAN KER MERCHANT (P) LIMITED AND SUBMITTED THAT COPY OF BALANCE SHEETS OF WELCOME CO IR INDUSTRIES LIMITED FOR F.YS. 2002-03 TO 2005-06 HAVE ALREADY BEEN FILED. I T WAS ALSO SUBMITTED THAT THE AMOUNT RECEIVED WAS SHARE APPLICATION MONEY ALONGWI TH SHARE APPLICATION FORMS WHICH WAS BY MISTAKE ACCOUNTED FOR UNDER THE HEAD UNSECURED LOAN IN THE CASE OF LDK BUILDERS (P) LIMITED AND IN THE CASE OF LDK SHARE & SECURITIES (P) LIMITED WHICH WAS SUBSEQUENTLY ON THE REALIZATION O F MISTAKE HAS BEEN ACCOUNTED FOR UNDER THE CORRECT HEAD SHARE APPLICATION MONEY. THE AMOUNT RECEIVED IN THE BOOKS OF SHANKER MERCHANT (P) LIMITED WAS ACCOUNTED FOR AS SHARE APPLICATION MONEY AS AND WHEN RECEIVED AS PER SHARE APPLICATION FORMS. IT WAS ALSO CONTENDED BY THE RESPONDENT ASSESSEE THAT THE IDENTITY OF WEL COME COIR INDUSTRIES LIMITED IS FULLY ESTABLISHED, THESE TRANSACTIONS ARE THROUGH A CCOUNT PAYEE CHEQUES WHICH HAVE DULY BEEN ACCOUNTED BY WELCOME COIR INDUSTRIES LTD AND ARE APPEARING IN THE BALANCE SHEET OF WELCOME COIR INDUSTRIES LIMITED. IT HAS ALSO BEEN CONTENDED BY THE ASSESSEE THAT THEY HAVE DISCHARGE THE ONUS OF P ROVING THE SOURCE AND IS NOT EXPECTED TO PROVE THE SOURCE OF THE SOURCE. VIDE S AME LETTER THE ASSESSEE ALSO ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 13 CONTENDED THAT THE CONTENTS OF AFFIDAVIT FILED BY A NIL GUPTA ARE TOTALLY WRONG, MISLEADING AND AN AFTER THOUGHT AND SUCH AN AFFIDAV IT/STATEMENT/ANY MATERIAL TAKEN AT THE BACK OF ASSESSEE CANNOT BE READ AS AN EVIDEN CE IN THE EYES OF LAW. THE ASSESSEE AGAIN REQUESTED FOR CROSS EXAMINATION OF A NIL GUPTA AND ALSO ASKED THE ASSESSING OFFICER TO PROVIDE THE DETAILS REQUIRED V IDE EARLIER LETTER DATED 11.11.2009. 15. BEFORE THE COMPLETION OF ASSESSMENT OF LDK SHAR E & SECURITIES (P) LIMITED, SHANKER MERCHANT (P) LIMITED AND LDK BUILD ERS (P) LIMITED, THE ASSESSING OFFICER FORMED HIS BELIEF THAT THE DEPOSI TS IN THE BANK ACCOUNT OF M/S WELCOME COIR INDUSTRIES LIMITED DURING F.YS. 2002-0 3 TO 2004-05 IS INCOME IN THE HANDS OF WELCOME COIR INDUSTRIES LIMITED WHICH HAS ESCAPED ASSESSMENT AND CONSEQUENTLY HE ISSUED NOTICES U/S 148 DATED 24.12. 2009 FOR A.Y. 2003-04, 2004- 05 AND 2005-06 TO WELCOME COIR INDUSTRIES LIMITED. 16. AFTER CONSIDERING ALL EVIDENCES PRODUCED AS WEL L AS THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE, THE ASSESSING OFFICER, DISAG REEING WITH THE SAME, ADDED THE AMOUNT IN DISPUTE UNDER SECTION 68 OF THE ACT AND C OMPLETED THE ASSESSMENT ORDERS BY HOLDING THAT THE IDENTIFY OF M/S WELCOME COIR INDUSTRIES LIMITED AS A GENUINE COMPANY IS NOT PROVED PARTICULARLY CONSIDER ING THE AFFIDAVIT OF ITS DIRECTOR SHRI ANIL GUPTA WHO HAS CLEARLY DEPOSED THAT THE CO MPANY WAS EXISTING IN PAPER ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 14 ONLY AND ALSO IN VIEW OF EXAMINATION OF PRESENT DIR ECTOR SHRI PRASHANT SHARMA. THAT THE SOURCE OF FUNDS IN THE ACCOUNTS OF M/S WEL COME COIR INDUSTRIES LIMITED ARE PROVED TO BE UNEXPLAINED AND SO THE MONEY ALLEG EDLY RECEIVED BY THE ASSESSEE AS SHARE APPLICATION MONEY FROM M/S WELCOME COIR IN DUSTRIES LTD IS ALSO UNEXPLAINED. THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF M/S WELCOME COIR INDUSTRIES LIMITED TO GIVE LOANS OF RS .22,50,000/- TO THE ASSESSEE AND TO PROVE GENUINENESS OF SHARE APPLICATION MONEY . THAT WHEN THE AUTHORIZED CAPITAL OF ASSESSEE COMPANY WAS ONLY OF RS.25,00,00 0/- @ RS.100/- PER SHARE AND OUT OF THAT SHARES OF RS.18,10,000/- WERE ALREADY A LLOTTED AND BALANCE SHARE CAPITAL AVAILABLE FOR ALLOTMENT WAS ONLY WORTH RS.6,90,000/ -HOW THE ASSESSEE COULD CALL FOR /TAKE SHARE APPLICATION MONEY WORTH RS.33,80,00 0/- WITHOUT THERE BEING ANY UNDERSTANDABLE GOODWILL OR PAST RECORD OF BUSINESS RATHER WHEN ASSESSEE WAS NOT DOING ANY BUSINESS. THUS THE MONEY ALLEGEDLY RECEI VED FROM M/S WELCOME COIR INDUSTRIES LIMITED WAS NEITHER THE SHARE APPLICATIO N MONEY NOR WAS THE LOAN AND NOMENCLATURE GIVEN BY THE ASSESSEE AS LOAN OR SHARE APPLICATION MONEY IS ONLY WITH A VIEW TO GIVE A COLOUR OF GENUINENESS TO TRANSACTI ONS WHICH WERE IN FACT ACCOMMODATION ENTRIES. THAT THE NAME OF SUCH ACCOM MODATION ENTRIES ARE GIVEN SOME TIME AS LOAN, SOME TIME AS SHARE APPLICATION M ONEY AS SUITS THE ASSESSEE. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF T HE CASE IN TOTALITY, IT CAN SAFELY BE HELD THAT AMOUNTS RECEIVED FROM WELCOME COIR IND USTRIES LIMITED WAS ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 15 DEFINITELY NOT THE SHARE APPLICATION MONEY, SO THE DECISION OF VARIOUS HONBLE COURTS INCLUDING THE DECISIONS OF HONBLE SUPREME C OURT IN THE CASE OF CIT VS. M/S LOVELY EXPORTS LTD (2008) 216 CTR 195 AND DECIS ION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF JAYA SECURITIES LIMITED V S. CIT-II, KANPUR (2008) 166 TAXMAN 7 (ALL), REGARDING SHARE APPLICATION MONEY A RE NOT APPLICABLE TO THE AMOUNTS ALLEGEDLY RECEIVED BY ASSESSEE FROM WELCOME COIR INDUSTRIES LIMITED. THAT AMOUNT ALLEGEDLY RECEIVED FROM M/S WELCOME COI R INDUSTRIES LIMITED IN FACT ARE THE ASSESSEES OWN UNDISCLOSED AND UNEXPLAINED MONEY WHICH WAS ROUTED THROUGH THE BANK ACCOUNTS OF M/S WELCOME COIR INDUS TRIES LIMITED TO ASSESSEES BOOKS OF ACCOUNTS. 17. THE SECOND ISSUE INVOLVED IN THE APPEAL REGARDI NG THE INVESTMENT IN THE PROPERTIES, THE FACTS RELATING TO THE SAME ARE THAT SEARCH UNDER SECTION 132 OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF LDK S HARES & SECURITIES (P) LIMITED ON 31.01.2008, THE GROUP OF COMPANY OF LDK BUILDERS (P) LIMITED. THE ASSESSMENT FOR ALL THE YEARS UNDER CONSIDERATION EX CEPT FOR A.Y. 2008-09 WERE COMPLETED U/S 153C OF THE ACT. THE ASSESSMENT FOR A.Y. 2008-09 WAS COMPLETED U/S 143(3) OF THE ACT. THE NATURE OF BUSINESS OF T HE ASSESSEE COMPANY IS THAT OF CONSTRUCTION COMPANY/BUILDER. THE COMPANY HAS CONST RUCTED TWO COMMERCIAL ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 16 BUILDING AT 5/157, PLOT NO. 3-4, TRANSPORT NAGAR, A GRA AND PROPERTY NO. 31, PLOT NO. 7, SWADESHI BIMA NAGAR, AGRA. 18. THE EXPENDITURE INCURRED HAS BEEN DULY ACCOUNTE D FOR IN THE BOOKS OF ACCOUNTS MAINTAINED UNDER THE HEAD STOCK IN TRADE/W ORK IN PROGRESS. THE ASSESSING OFFICER ISSUED NOTICE U/S 153C OF THE ACT FOR A.Y. 2003-04 TO 2007-08 ON 15.10.2009 TO FILE RETURN ON OR BEFORE 30.10.200 9. BEFORE THE LAPSE OF THE TIME ALLOWED TO FILE THE RETURN, THE A.O. MADE REFERENCE U/S 142A DATED 16.10.2009 FOR DETERMINING INVESTMENT/COST OF CONSTRUCTION IN PROP ERTY NO.31, PLOT NO. 7, SWADESHI BIMA NAGAR, AGRA. THE DIFFERENCE IN THE C OST OF CONSTRICTION AS ESTIMATED BY THE VALUATION OFFICER AND AS DECLARED BY THE ASSESSEE COMPANIES WERE ADDED BY THE ASSESSING OFFICER IN RESPECTIVE YEARS U/S 69B OF THE ACT. 19. AGGRIEVED BY THE ASSESSMENT ORDERS PASSED BY TH E ASSESSING OFFICER, THE ASSESSEES FILED APPEALS BEFORE THE LD. FIRST APPELL ATE AUTHORITY, WHO VIDE THE IMPUGNED ORDERS, PARTLY ALLOWED THE APPEALS OF THE ASSESSEES AND DELETED THE ADDITIONS IN DISPUTE. 20. AGGRIEVED BY THE IMPUGNED ORDERS PASSED BY THE LD. FIRST APPELLATE AUTHORITY, THE REVENUE HAS FILED THE PRESENT APPEAL S AND THE ASSESSEE HAS ALSO FILED ITS CROSS OBJECTIONS. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 17 21. AT THE TIME OF HEARING, THE LD. SR. DEPARTMENTA L REPRESENTATIVE RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND CONTE NDED THAT THE DEPOSITS IN THE BANK ACCOUNT OF M/S WELCOME COIR INDUSTRIES LIMITED WITH UNION BANK OF INDIA, GWALIOR ARE MAINLY IN CASH/D.D/PAY ORDER RANGING FR OM RS.45,000/- TO RS.49,000/- AND HAVE BEEN DEPOSITED BY THE ASSESSEE COMPANIES. THE CONTROL AND POSSESSION OVER THE BANK ACCOUNT OF M/S WELCOME COI R INDUSTRIES LIMITED WITH UNION BANK OF INDIA, GWALIOR AND WITH HDFC BANK, AG RA IS OF SHRI KAMAL KUMAR KESHWANI. THEREFORE, THE IMPUGNED AMOUNTS ARE NOT SHARE APPLICATION MONEY AS IT HAS BEEN SHOWN AS LOAN IN THE BALANCE SHEET OF THE LDK BUILDERS (P) LIMITED AND M/S LDK SHARES & SECURITIES (P) LIMITED AS ON 31.03 .2002. HE MAINLY RELIED UPON THE AFFIDAVIT FILED BY SHRI ANIL GUPTA, FORMER DIRECTOR OF M/S WELCOME COIR INDUSTRIES LIMITED AND CONTENDED THAT THE ASSESSEE HAS NOT PROVED THE GENUINENESS OF TRANSACTION IN DISPUTE. THEREFORE, THE ASSESSIN G OFFICER HAS RIGHTLY ADDED THE ADDITION IN DISPUTE BUT THE LD. FIRST APPELLATE AUT HORITY HAS WRONGLY DELETED THE SAME CONTRARY TO THE LAW AND FACTS ON THE FILE AND THE IMPUGNED ORDERS DESERVE TO BE CANCELLED BY ACCEPTING THE APPEALS FIELD BY THE REVENUE. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER STATED THAT THE ASSESSEE COM PANY DIRECTOR SHRI KAMAL KUMAR KESHWANI HAS OPERATED THE WELCOME COIR INDUST RIES LIMITED ACCOUNT AT AGRA HDFC BANK AND IT IS MISLEADING AND FACTUALLY I NCORRECT AS THE ASSESSEES REPRESENTATIVE STATED THAT THE ENTIRE MONEY AT HDFC BANK, AGRA HAS COME FROM ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 18 GWALIOR. WELCOME COIR INDUSTRIES LIMITED OPERATED BY ANIL GUPTA HAVE BEEN DEPOSITED IN THE WELCOME ACCOUNT AT HDFC BANK, AGRA IN CASH AND DDS. ON ACCOUNT OPERATED BY SHRI KAMAL KUMAR KESHWANI AS AU THORISED SIGNATORY. 22. ON THE OTHER HAND, THE LD. AUTHORISED REPRESENT ATIVE OF THE ASSESSEE DURING THE COURSE OF HEARING FILED SYNOPSIS AND BY STRONGL Y SUPPORTING THE ORDER OF LD. CIT(A) ON THIS ISSUE OF ADDITION U/S 68 FURTHER CON TENDED AS UNDER BY PLACING RELIANCE ON THE DOCUMENTS PLACED IN THE PAPER BOOK FILED BY REFERRING TO THE RELEVANT PAGES OF THE PAPER BOOK AS PER THE SYNOPSI S FILED. 23. HE STATED THAT NO INCRIMINATING MATERIAL WAS FO UND DURING SEARCH OR AFTER WARDS WHICH MAY LEAD TO AN INFERENCE THAT THE DEPOS ITS IN THE BANK ACCOUNT WITH UNION BANK OF INDIA, GWALIOR AND HDFC BANK, AGRA AR E BY RESPONDENT COMPANIES. 24. HE FURTHER STATED THAT WELCOME COIR INDUSTRIES LIMITED, THE SHARE HOLDER COMPANY, IS PUBLIC LIMITED COMPANY AND HAS RAISED F UNDS THOUGH PUBLIC ISSUE AND WAS LISTED COMPANY AND HENCE THE IDENTITY CANNOT BE DOUBTED. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 19 25. HE ARGUED THAT SHARE APPLICATION FORMS DULY SIG NED BY THEN DIRECTOR SHRI ANIL GUPTA, WHICH FORMS PART OF PAPER BOOK AT PAGE 28 TO 57 IN THE CASE OF M/S LDK SHARES & SECURITIES (P) LIMITED, PAGE NO. 16 TO 41 IN THE CASE OF LDK BUILDERS (P) LIMITED AND PAGE NO. 10 TO 12 IN THE C ASE OF M/S SHANKER MERCHANTS (P) LIMITED INDICATING THE NUMBER OF SHARES APPLIED FOR, THE MODE OF PAYMENT, AMOUNT OF PAYMENT ALONGWITH ADDRESS AND PAN OF M/S WELCOME COIR INDUSTRIES LIMITED FULLY PROVES THAT THE AMOUNT HAS BEEN RECEI VED AS SHARE APPLICATION MONEY. 26. THE THEN DIRECTOR OF WELCOME COIR INDUSTRIES LI MITED FILED CONFIRMATIONS, COPY OF WHICH ARE PLACED IN PAPER BOOK AT PAGE NO. 58 TO 87 IN THE CASE OF LDK SHARES & SECURITIES (P) LIMITED, PAGE NOS. 42 TO 67 IN THE CASE OF LDK BUILDERS (P) LIMITED IN WHICH SHRI ANIL GUPTA HAS CONFIRMED THAT HE HAS RECEIVED SHARE CERTIFICATES IN LIEU OF SHARE APPLICATION MONEY PAI D BY WELCOME COIR INDUSTRIES LIMITED. HE ALSO CONFIRMED THE SHARE CERTIFICATE N UMBER AND THE DISTINCTIVE NO. OF SHARES ALLOTTED AND HENCE THE LD. DEPARTMENTAL REPR ESENTATIVES ARGUMENTS THAT SHARES HAVE NOT BEEN ALLOTTED FINDS NO FORCE. ON TH E CONTRARY THESE CONFIRMATIONS ARE THE IMPORTANT DOCUMENTS WHICH PROVE THE RECEIPT OF MONEY AS SHARE APPLICATION MONEY AND THE ALLOTMENT OF SHARES AND T HESE CONFIRMATIONS. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 20 27. HE STATED THAT SINCE THE SHARES HAVE BEEN ALLOT TED, THE ARGUMENTS OF THE LD. DEPARTMENTAL REPRESENTATIVE REGARDING THE AMOUNT OF SHARE APPLICATION MONEY IS APPEARING AS LOAN IN THE BOOKS OF RESPONDENT COMPAN Y IN F.Y. 2002-03 IS MEANINGLESS AND CONCLUSIVELY PROVES THAT THE AMOUNT RECEIVED WAS AS SHARE APPLICATION MONEY. 28. THE LD. AUTHORISED REPRESENTATIVE ALSO PLACED R ELIANCE ON THE BALANCE SHEET, PROFIT AND LOSS ACCOUNTS WITH ANNEXURE OF THE SHARE HOLDER COMPANY FOR THE YEAR ENDING 31.03.2003, 31.03.2004 AND 31.03.2005 PLACED IN THE PAPER BOOK AT PAGE 88 TO 106 IN THE CASE OF M/S LDK SHARES & SECURITIES ( P) LIMITED. IT HAS BEEN POINTED OUT THAT THE SHARE HOLDER COMPANY IS REGULARLY SHOW ING INVESTMENT IN UNQUOTED SHARES. THE AMOUNT OF INVESTMENT AS PER BALANCE SHE ET OF WELCOME COIR INDUSTRIES LIMITED IN EACH YEAR IS MUCH MORE THAN THE AMOUNT I NVESTED BY THE SHARE HOLDER COMPANY IN THE HANDS OF RESPONDENT ASSESSEE COMPANI ES. THUS THE CREDITWORTHINESS OF THE SHARE HOLDER COMPANY CANNOT BE DOUBTED. MORE OVER SINCE THE AMOUNTS HAVE BEEN SHOWN AS UNQUOTED SHARES/INVESTMENT IN THE BAL ANCE SHEET OF WELCOME COIR INDUSTRIES LIMITED CONCLUSIVELY PROVES THAT THE AMO UNT RECEIVED IS SHARE APPLICATION MONEY. LD. AUTHORISED REPRESENTATIVE AL SO INVITED THE ATTENTION OF THE BENCH THAT THESE BALANCE SHEET ARE DULY AUDITED, SI GNED BY SHRI ANIL GUPTA, REGULARLY FILED BEFORE ROC AND WITH THE RETURN IN I NCOME TAX DEPARTMENT. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 21 29. AS REGARDS THE BANK ACCOUNT OF SHARE HOLDER COM PANY WITH UNION BANK OF INDIA, GWALIOR, THE LD. AR SUBMITTED THAT THERE IS NO IOTA OF EVIDENCE FROM WHICH IT CAN BE CONCLUDED THAT THE BANK ACCOUNT WAS UNDER POSSESSION OR CONTROL OF KAMAL KUMAR KESHWANI. LD. AUTHORISED REPRESENTATIVE VEHEMENTLY CONTENDED THAT THE BANK ACCOUNT WAS BEING OPERATED BY THEN DI RECTORS OF WELCOME COIR INDUSTRIES LIMITED SHRI ANIL GUPTA AND THIS SUBMISS ION ALSO FINDS SUPPORT FROM THE FACT THAT THE DETAILS AS REQUIRED BY THE RESPONDENT ASSESSEE COMPANY WERE NEITHER SUPPLIED NOR SHRI ANIL GUPTA CAME FORWARD BEFORE TH E ASSESSING OFFICER INSPITE OF NOTICE ISSUED TO HIM. 30. AS REGARDS THE BANK ACCOUNT OF WELCOME COIR IND USTRIES LTD. WITH HDFC BANK, AGRA THE COPIES OF WHICH WERE PLACED IN PAPER BOOK AT PAGE NOS. 107 TO 110 IN THE CASE OF LDK SHARES & SECURITIES (P) LIMITED AT THE OUTSET POINTED OUT THAT THERE IS NO CASH DEPOSIT IN THIS BANK ACCOUNT. FUR THER HE SUBMITTED THAT APART FROM THE FUNDS TRANSFERRED IN THE BANK ACCOUNT FROM UNIO N BANK OF INDIA, GWALIOR, SHRI ANIL GUPTA AND HIS WIFE SMT. SHELLY GUPTA, BOTH DIR ECTORS OF WELCOME COIR INDUSTRIES LIMITED HAVE ALSO DIRECTLY TRANSFERRED T HE FUNDS BY ACCOUNT PAYEE CHEQUES FROM THEIR OWN PERSONAL BANK ACCOUNT BEARIN G NO. 1211330003582 AND 1211330001042 WHICH PROVES THAT THE BANK ACCOUNT WI TH HDFC BANK LTD WAS IN OPERATIONAL CONTROL OF SHRI ANIL GUPTA AND SMT. SHE LLY GUPTA. MOREOVER THE ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 22 CLOSING BALANCE AT THE YEAR END OF THIS BANK ACCOUN T IS DULY REFLECTED IN THE BALANCE SHEET OF WELCOME COIR INDUSTRIES WHICH IS DULY AUDI TED AND SIGNED BY SHRI ANIL GUPTA AND SMT. SHELLY GUPTA. CONSIDERING THESE FACT S IT CAN BE SAFELY PRESUMED THAT THE TRANSACTIONS IN THE BANK ACCOUNT WITH HDFC BANK WERE IN THE KNOWLEDGE AND CONTROL OF SHRI ANIL GUPTA. IT IS AN ADMITTED FACT THAT THE ACCOUNTS WAS OPENED BY SHRI ANIL GUPTA AND SHRI KAMAL KUMAR KESHWANI WA S ONLY ONE OF THE AUTHORIZED SIGNATORY. 31. LD. AUTHORISED REPRESENTATIVE ALSO INVITED ATTE NTION TO THE WRITTEN SUBMISSION FILED BEFORE AO WHICH ALSO FORMS PART OF PAPER BOOK THAT THE DETAILS REGARDING THE BANK ACCOUNTS, BOOKS OF ACCOUNTS, BAL ANCE SHEET, ETC. WERE ASKED FOR BY THE RESPONDENT COMPANY FOR INSPECTION BUT THE SA ME WERE NOT PROVIDED THOUGH THE AO ISSUED NOTICES TO SHRI ANIL GUPTA AND HENCE NO ADVERSE VIEW CAN BE TAKEN. 32. AS REGARDS THE AFFIDAVIT FILED BY SHRI ANIL GUP TA THE LD. AR SUBMITTED THAT THE SO CALLED AFFIDAVIT IS NOT VERIFIED AND HENCE I S NOT AN AFFIDAVIT IN THE EYES OF LAW. IT CANNOT BE ADMITTED IN TO EVIDENCE WITHOUT V ERIFICATION. IN THIS REGARD THE LD. AR INVITES ATTENTION TO THE JUDGMENT OF HONBLE SUP REME COURT IN THE CASE OF A.K. NAMBIAR VS. UNION OF INDIA AND ANOTHER AIR 1970 PAG E 652 REFERRED IN THE CIT(A) ORDER. ON THIS ISSUE THE LD. AR ALSO REFERRE D TO THE JUDGMENTS OF HONBLE ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 23 DELHI HIGH COURT IN THE CASE OF SUNDER INDUSTRIES A ND ANOTHERS VS. M/S GENERAL ENGG. WORKS REPORTED IN AIR 1982 PAGE 220 AND OF HO NBLE RAJASTHAN HIGH COURT IN THE CASE OF STATE OF RAJASTHAN VS. SINDHI FILM E XCHANGE AIR 1974 PAGE 31 WHICH ARE ALSO REFERRED IN CIT(A) ORDER. 33. THE LD. AUTHORISED REPRESENTATIVE ALSO SUBMITTE D THAT THE ASSESSEE COMPANY WAS NOT PROVIDED OPPORTUNITY OF CROSS EXAMINATION O F SHRI ANIL GUPTA WHO FILED THE SO CALLED AFFIDAVIT INSPITE OF REPEATED REQUEST AND THE FACT THAT SHRI ANIL GUPTA NEVER APPEARED BEFORE AO INSPITE OF NOTICE AND SUMM ONS BEING ISSUED TO HIM BY ASSESSING OFFICER. IN THE ABSENCE OF CROSS EXAMINAT ION AFFIDAVIT, THOUGH NOT AN AFFIDAVIT, CANNOT BE ADMITTED. FOR THIS SUBMISSION THE LD. AUTHORISED REPRESENTATIVE RELIED ON THE JUDGMENT OF HONBLE SU PREME COURT IN THE CASE OF MEHTA PARIKH & CO. VS. CIT 30 ITR 181. HE ALSO RELI ED ON THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF L. SOHA N LAL GUPTA VS. CIT 33 ITR 786. 34. THE LD. AUTHORISED REPRESENTATIVE ALSO SUBMITTE D THAT THE BURDEN IS ON THE DEPARTMENT TO PROVE THAT THE MONEY BELONGED TO THE ASSESSEE BY BRINGING PROPER EVIDENCE ON RECORD AND THE ASSESSEE COULD NOT BE EX PECTED TO CALL THE CONCERNED PERSON IN EVIDENCE TO HELP THE DEPARTMENT TO DISCHA RGE THE BURDEN THAT LAY UPON IT. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 24 IN THIS REGARD RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KISHIN CHAND CHELLA RAM REPORTED IN 125 ITR 713. 35. HE ALSO SUBMITTED THAT THE ASSESSING OFFICER H AS NOT MADE ANY INDEPENDENT ENQUIRIES AND HAS RELIED SOLELY ON THE SO CALLED AF FIDAVIT OF SHRI ANIL GUPTA WHICH ITSELF CANNOT BE ADMITTED AS AN AFFIDAVIT/EVIDENCE. 36. HE FURTHER SUBMITTED THAT THE EXAMINATION AND R ECORDING OF STATEMENTS OF SHRI PRASHANT SHARMA THE DIRECTOR OF WELCOME COIR I NDUSTRIES LTD. WAS MADE AT THE BACK OF THE RESPONDENT ASSESSEE COMPANIES AND THE R ESPONDENT ASSESSEE COMPANIES WERE NEITHER CONFRONTED WITH THIS FACT NOR ANY OPPO RTUNITY TO CROSS EXAMINE SHRI PRASHANT SHARMA WAS PROVIDED TO THEM. THIS FACT ON LY CAME TO THE NOTICE OF THE RESPONDENT UPON RECEIVING THE ASSESSMENT ORDERS AND UNDER THE CIRCUMSTANCES SUCH AN EVIDENCE CANNOT BE USED AGAINST THE RESPOND ENT ASSESSEE COMPANY. 37. THE LD. AUTHORISED REPRESENTATIVE ALSO SUBMITTE D THAT BEFORE THE COMPLETION OF IMPUGNED ASSESSMENT, THE CASE OF WELC OME COIR INDUSTRIES LTD WERE REOPENED U/S 148 OF THE ACT BY THE SAME A.O. F OR A.YS 2003-04, 2004-05 AND 2005-06. THE ASSESSMENT OF WELCOME COIR INDUSTR IES LTD FOR THESE YEARS HAVE ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 25 BEEN COMPLETED BY THE SAME A.O. AND THE DEPOSITS IN THE BANK ACCOUNT HAVE BEEN ADDED IN THE HANDS OF WELCOME COIR INDUSTRIES LTD 38. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T THE ASSESSEE IS REQUIRED TO PROVE ONLY THE SOURCE OF ITS DEPOSITS AND IT IS NOT REQUIRED TO PROVE SOURCE OF ITS SOURCE AS PER THE SETTLED LAW ON THE SUBJECT. 39. IN SUPPORT OF HIS ARGUMENTS, THE LD. AUTHORISED REPRESENTATIVE PLACED RELIANCE ON THE FOLLOWING CASE LAWS:- CIT VS. LOVELY EXPORTS (P) LTD. 2008 SC 216 CTR 195 THE ASSESSEE HAD GIVEN DETAILS OF THE SUBSCRIBING S HARE APPLICANTS. IN CASE THE DEPARTMENT ALLEGED THAT APPLICANTS WERE BOGUS, IT WAS FREE TO PROCEED AGAINST THE APPLICANTS. THE SHARE APPLICATION MONEY RECEIVED COULD NOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE COMP ANY. JAYA SECURITIES LTD. VS CIT 2007 HC (ALLAHABAD) 166 TAXMAN 7& SLP NO. CC 4287 OF 2008. THE SHARE-APPLICATION MONEY RECEIVED BY THE ASSESSE E COMPANY FROM VARIOUS SUBSCRIBERS COULD NOT BE ADDED BACK TO INCO ME UNDER S.68. CIT VS. DWARKADHISH INVESTMENTS (P) LTD. 2010 (DHC) 330 ITR 298 THE ASSESSEE PROVED IDENTITY OF SHARE-APPLICANTS BY GIVING THEIR PAN NUMBERS. THE AMOUNTS RECEIVED THROUGH CROSSED CHEQU ES. A FEW OF THE APPLICANTS COULD NOT BE FOUND. IT WAS NO REASON TO MAKE ADDITION UNDER S.68. CIT VS WINSTRAL PETROCHEMICALS (P) LTD. 2010 (DHC) 330 ITR 603 THE TRIBUNAL FOUND THAT IDENTITY OF THE SUBSCRIBERS WAS ESTABLISHED. NO ADVERSE INFERENCE IF MORE THAN ONE COMPANY WAS REGI STERED AT THE SAME ADDRESS. NO ADDITION UNDER S.68 COULD BE ON THE ONL Y GROUND THAT SUBSCRIBERS DID NOT RESPOND TO THE NOTICE OF THE AO. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 26 CIT VS ELECTRO POLYCHEM LTD. 2007 HC (CHENNAI) 294 ITR 661 THE ASSESSEE HAD RECEIVED CERTAIN AMOUNTS AS SHARE APPLICATION MONEY. EVEN IF IT WAS ASSUMED THAT THE SUBSCRIBERS OF SHARE APP LICATIONS WERE NOT GENUINE THE AMOUNT COULD NOT BE ADDED AS UNDISCLOSED INCO ME OF THE ASSESSEE COMPANY. ASSESSMENT - ADDITION ON ACCOUNT OF UNSECURED LOANS AND DISCOUNT DEBITED TO PROFIT AND LOSS ACCOUNT - TRIBUNAL FINDING ASSES SEE EXPLAINED DEFICIENCIES AND ASSESSING OFFICER FAILED TO CALL CREDITORS IN S PITE OF REQUEST - FINDINGS OF FACT - INCOME-TAX ACT, 1961 - CIT V. MANDEEP SINGH 328 ITR 169 (P&H) SHARE APPLICATION MONEY - ASSESSEE PRODUCING PAN NU MBER, BANK ACCOUNT, COPIES OF INCOME-TAX RETURNS OF SHARE APPLICANTS - PRIMARY ONUS OF ASSESSEE DISCHARGED - ADDITION NOT SUSTAINABLE - INCOME-TAX ACT, 1961, S. 68 - CIT VS. OASIS HOSPITALITIES P LTD. 333 ITR 119 (DELHI) 40. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE RELEVANT RECORDS AVAILABLE WITH US. AFTER HEARING BOTH THE SIDES, WE FIND THA T WELCOME COIR INDUSTRIES LIMITED IS A PUBLIC LIMITED COMPANY AND HAS RAISED ITS FUNDS BY MEANS OF A PUBLIC ISSUE AND WAS A LISTED COMPANY. WELCOME COIR INDUS TRIES LIMITED HAS TRANSFERRED FUNDS TO THE RESPONDENT ASSESSEE, FROM ITS BANK ACC OUNT MAINTAINED WITH HDFC BANK, AGRA WHICH IS PLACED AT PAGE NO. 107 TO 110 O F LDK SHARE & SEC (P) LIMITED, PAGE NO. 29 TO 32 OF SHANKER MERCHANT (P) LIMITED AND 87 TO 90 OF LDK BUILDERS (P) LTD. PART OF THESE FUNDS TO THE EXTENT OF 2,71,50,000/- HAVE BEEN RECEIVED BY WELCOME COIR INDIA LIMITED FROM UNION B ANK OF INDIA, GWALIOR FROM THE ACCOUNT OF WELCOME COIR INDUSTRIES LIMITED. SH RI ANIL GUPTA, DIRECTOR OF THE ABOVE SAID SHARE HOLDER COMPANY WAS IN COMPLETE CON TROL OF THE BANK ACCOUNT MAINTAINED WITH UNION BANK OF INDIA, GWALIOR AND TH ERE IS NO EVIDENCE TO PROVE ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 27 THAT THIS ACCOUNT WAS CONTROLLED OR OPERATED BY ANY BODY ELSE. FUNDS HAVE DIRECTLY BEEN TRANSFERRED TO HDFC BANK ACCOUNT OF WELCOME CO IR INDUSTRIES LTD BY SHRI ANIL GUPTA AND SMT. SHELLY GUPTA BOTH THEN DIRECTOR S OF WELCOME COIR INDUSTRIES LIMITED WHICH PROVE THAT THE ACCOUNT WAS OPERATED W ITH THEIR CONTROL AND FULL KNOWLEDGE. BALANCE SHEET OF WELCOME COIR INDUSTRIES LIMITED FOR THE F.Y. 2004- 05 IS ON RECORD AT PAPER BOOK PAGE NO. 84 TO 86 OF LDK BUILDERS (P) LIMITED AND AT PAGE NO. 86 OF THE PAPER BOOK, BALANCE OF THIS HDFC BANK ACCOUNT IS DULY REFLECTED IN ITS BALANCE SHEET. BALANCE SHEET IS DULY AUDITED AND IS SIGNED BY THE THEN DIRECTORS ANIL GUPTA AND SHELLY GUPTA AND HENCE THE DIRECTORS OF WELCOME COIR INDUSTRIES LIMITED HAD COMPLETE KNOWLEDGE OF THE TR ANSACTIONS OF HDFC BANK, AGRA. ALL THE SHARE APPLICATION FORMS AND CONFIRMATIONS R ECEIVED FROM WELCOME COIR INDUSTRIES LTD AND SIGNED BY SHRI ANIL GUPTA A RE PLACED ON PAPER BOOK AT PAGE NO 28 TO 87 IN THE CASE OF LDK SHARES & SECURI TIES (P) LTD. ALL THE DETAILS REGARDING NUMBER OF SHARES APPLIED AND ALLOTTED BY THE RESPONDENT ASSESSEE COMPANY ARE DULY CONFIRMED BY SHRI ANIL GUPTA ON BE HALF OF THE SAID WELCOME COIR INDUSTRIES LIMITED. IN THESE CONFIRMATIONS AN IL GUPTA HAS DULY CONFIRMED THAT HE HAS RECEIVED THE SHARE CERTIFICATE OF SHARE S ALLOTTED BY THE RESPONDENT ASSESSEE COMPANY AND HAS ALSO CONFIRMED THE SHARE C ERTIFICATE NUMBER AS WELL AS THE DISTINCTIVE NO. OF SHARES ALLOTTED. THE AMOUNT WAS RECEIVED AS SHARE APPLICATION MONEY AND SHARES HAVE BEEN ALLOTTED AGAINST SUCH SH ARE APPLICATION MONEY AND ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 28 SUCH INVESTMENT IS APPEARING IN THE BALANCE SHEETS OF THE SHARE HOLDER COMPANY IN VARIOUS YEARS PLACED AT PAGE NO 88 TO 106.OF THE PA PER BOOK IN THE CASE OF LDK SHARES & SECURITIES (P) LTD. THAT THE DETAILS ASK ED FOR BY THE RESPONDENT ASSESSEE COMPANIES THROUGH THE LETTERS DATED 11.11.2009 HAVE NOT BEEN PROVIDED TO THE RESPONDENT ASSESSEES COMPANIES BY THE ASSESSING OF FICER. THAT THE AFFIDAVIT OF ANIL GUPTA BEING NOT VERIFIED IS NOT AN AFFIDAVIT I N THE EYES OF LAW AS PER SUPREME COURT DECISIONS AND OTHER DECISIONS REPORTED AT AND REFERRED IN THE ORDER OF LD. CIT(A). SHRI ANIL GUPTA NEVER APPEARED FOR CROSS E XAMINATION BEFORE THE AO INSPITE OF MULTIPLE OPPORTUNITIES GIVEN TO HIM AND WITHOUT SUCH CROSS EXAMINATION NEITHER THE SO CALLED AFFIDAVIT FILED BY HIM CAN BE TAKEN IN TO EVIDENCE NOR ANY ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE . THAT THE RESPONDENT ASSESSEE WAS NEVER CONFRONTED WITH THE STATEMENT OF SHRI PRA SHANT SHARMA, ALLEGED DIRECTOR OF WELCOME COIR INDUSTRIES LTD PURPORTEDLY RECORDED BY THE AO WHICH FACT CAME TO THE KNOWLEDGE OF THE RESPONDENT ASSESSEE ONLY ON RECEIPT OF ASSESSMENT ORDER. ALSO NO OPPORTUNITY TO CROSS EXAMINE SHRI PRASHANT SHARMA WAS GIVEN TO THE RESPONDENT. THE IDENTITY OF WELCOME COIR INDUSTRI ES LIMITED STANDS PROVED FROM THE FACT THAT IT IS A PUBLIC COMPANY WHICH IS DULY REGISTERED AND HAS RAISED ITS FUNDS THROUGH PUBLIC ISSUE. IT IS A REGULAR INCOME TAX AS SESSEE ASSESSED WITH THE SAME ASSESSING OFFICER. THE CAPACITY OF WELCOME COIR IN DUSTRIES LIMITED DULY STANDS PROVED FROM THE BALANCE SHEETS OF WELCOME COIR INDU STRIES LIMITED FILED. THE TOTAL ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 29 SOURCES OF FUNDS OF WELCOME COIR INDUSTRIES LIMITED AS ON 31.3.2005 AMOUNTS TO 9,48,39,776/- OUT OF WHICH A SUM OF RS.5,44,90,000/ - HAS BEEN APPLIED IN FORMS OF INVESTMENTS IN UNQUOTED EQUITY SHARES. AS ON 31.03. 2004 THE TOTAL SOURCES OF WELCOME COIR INDUSTRIES LTD AMOUNTED TO 8,93,84,776 /- OUT OF WHICH A SUM OF RS. 5,22,00,000/- IS APPLIED TOWARDS UNQUOTED SHARES. T HESE INVESTMENTS SHOWN IN THE BALANCE SHEET OF WELCOME COIR INDUSTRIES LIMITED AR E HIGHER THEN THE AMOUNT GIVEN TO THE RESPONDENT ASSESSEE. ALL THE TRANSACT IONS TO THE RESPONDENT ASSESSEE COMPANY ARE BY ACCOUNT PAYEE CHEQUES ISSUED FROM TH E BANK ACCOUNT OF WELCOME COIR INDUSTRIES LIMITED. THESE BANK ACCOUNTS ARE D ULY REFLECTED IN THE BALANCE SHEET OF WELCOME COIR INDUSTRIES LIMITED, SHARE APP LICATION FORMS AND CONFIRMATIONS FROM WELCOME COIR INDUSTRIES LIMITED ALSO CONFIRMING THE SHARE CERTIFICATE HAVE BEEN RECEIVED BY THEM. THESE CONFI RMATIONS ALSO CONFIRM THE SHARE CERTIFICATE NUMBER AS WELL AS THE DISTINCTIVE NO. O F SHARES INDICATING AND HENCE THE GENUINENESS OF TRANSACTIONS OF THESE AMOUNTS WHICH WERE IN THE NATURE OF SHARE APPLICATION MONEY CANNOT BE DOUBTED. ALSO THE ASSES SING OFFICER AFTER REOPENING THE ASSESSMENTS OF WELCOME COIR INDUSTRIES LIMITED U/S 148 HAS ADDED DEPOSITS IN THE BANK ACCOUNT OF WELCOME COIR INDUSTRIES LIMITED AS ITS UNEXPLAINED INVESTMENT VIDE ASSESSMENT ORDERS PLACED AT PAGES 1 70 TO 178 OF THE PAPER BOOK IN THE CASE OF LDK SHARES & SECURITIES (P) LIMITED. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 30 41. THUS, IT IS EVIDENT FROM THE ABOVE MENTIONED FA CTS SUPPORTED BY THE NECESSARY EVIDENCES IN THE PAPER BOOK THAT THE SHAR E HOLDER COMPANY NAMELY M/S WELCOME COIR INDUSTRIES LIMITED WHICH IS A PUBLIC L IMITED COMPANY APPLIED FOR THE SHARES IN THE RESPONDENT ASSESSEE WHICH IS DULY CONFIRMED WITH THE HELP OF SHARE APPLICATION FORMS AND CONFIRMATIONS LETTERS F ILED BY MR. ANIL KUMAR GUPTA DIRECTOR OF THE SHARE HOLDER COMPANY. MR. ANIL KUMA R GUPTA IN HIS CONFIRMATIONS FILED ON BEHALF OF THE SHAREHOLDER COMPANY CONFIRME D THAT THE SHARE CAPITAL WAS SUBSCRIBED BY WELCOME COIR INDUSTRIES LIMITED BY IS SUING ACCOUNT PAYEE CHEQUES I.E. THROUGH BANKING CHANNEL AND SHARES WERE ALLOTT ED AND SHARE CERTIFICATES WERE RECEIVED BY HIM AND SHARE DISTINCTIVE NUMBERS WERE SPECIFICALLY MENTIONED ON SUCH CONFIRMATIONS. THE AMOUNT INVESTED BY THE SHAR E HOLDER COMPANY IS DULY APPEARING IN ITS AUDITED BALANCE SHEETS OF VARIOUS YEARS AS INVESTMENT IN UNQUOTED EQUITY SHARES AND SUCH BALANCE SHEETS WERE ALSO SIG NED BY THE DIRECTORS OF THE SAID SHAREHOLDER COMPANY INCLUDING MR. ANIL KUMAR GUPTA. INVESTMENT MADE BY THE SAID SHAREHOLDER COMPANY WAS THROUGH THE BANK ACCOU NT OF THE SAID COMPANY MAINTAINED AT AGRA BY THE SAID COMPANY. AMOUNT INVE STED BY THE SAID SHAREHOLDER COMPANY WAS OUT OF THE SAID BANK ACCOUNT AND DEPOSI TS IN THE SAID BANK ACCOUNT HAVE BEEN TREATED AS INVESTMENT FROM UNDISCLOSED IN COME OF THE SAID SHAREHOLDER COMPANY BY THE ASSESSING OFFICER OF WELCOME COIR IN DUSTRIES LIMITED IN ASSESSMENTS PASSED U/S 147. IT IS IMPORTANT TO MENT ION THAT THE CASES OF WELCOME ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 31 COIR INDUSTRIES LIMITED WERE REOPENED U/S 147. ONLY EVIDENCE AGAINST THE RESPONDENT ASSESSES IS THE AFFIDAVIT FILED BY MR. A NIL KUMAR GUPTA WHICH DOES NOT HAVE MANDATORY AND LEGAL VERIFICATION AND AS SUCH IS LIABLE TO BE REJECTED AS AFFIDAVIT ON THIS GROUND ALONE. HOWEVER, IT IS ALSO SEEN BY US THAT AFTER THE FILING OF THE SAID PURPORTED AFFIDAVIT, MR. ANIL KUMAR GUPTA NEVER APPEARED TO SUPPORT THAT AFFIDAVIT DESPITE REPEATED OPPORTUNITIES ALLOWED BY ASSESSING OFFICER AND FOR THIS REASON ALSO, THERE IS NO JUSTIFICATION TO TAKE INTO ACCOUNT SUCH UNSUBSTANTIATED AND UNPROVED ALLEGED AFFIDAVIT AND HENCE WE REJECT THE SAME. STATEMENT OF MR. PRASHANT ANOTHER DIRECTOR OF WELCOME COIR INDUSTRIE S LIMITED WAS NEVER CONFRONTED BY AO TO THE RESPONDENTS AND HENCE, NO A SSISTANCE CAN BE TAKEN BY REVENUE. 42. THUS, THE ASSESSEES HAVE PROVED THE SHARE CAPIT AL WITH OVERWHELMING EVIDENCES AS NARRATED ABOVE AND THERE IS NO ADVERSE LEGALLY ADMISSIBLE EVIDENCE IN POSSESSION OF REVENUE. SO MUCH SO, EVEN REVENUE HAS ACCEPTED THAT THE INVESTMENT HAS BEEN MADE BY WELCOME COIR INDUSTRIES LIMITED IN THE ASSESSES WHICH IS EVIDENT FROM THE ASSESSMENT ORDERS OF WELC OME COIR INDUSTRIES LIMITED PLACED IN THE PAPER BOOK. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 32 43. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES EXPLAINED ABOVE AND THE JUDICIAL DECISIONS CITED AND DISCUSSED, WE ARE OF T HE CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUTHORITY HAS PASSED THE IMPUGNED O RDERS AFTER APPRECIATING THE EVIDENCES PRODUCED BY THE ASSESSEES AS WELL AS THE DECISIONS RENDERED BY VARIOUS HONBLE COURTS. THEREFORE, NO INTERFERENCE IS CALL ED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY ON THE ISSUE INVOLVED IN GROUND NOS.1 & 2 IN ITA NOS.345, 346, 347 IN THE CASE OF M/S LDK B UILDERS (P) LTD., ITA NOS.355, 356, 358 IN THE CASE OF M/S LDK SHARES & S ECURITIES (P) LIMITED, ITA NOS.360 & 361/AGR/2010 IN THE CASE OF M/S SHANKER M ERCHANT (P) LIMITED. THEREFORE, WE UPHOLD THE IMPUGNED ORDERS BY DISMISS ING THE REVENUES APPEAL ON THIS COUNT. 44. AS REGARDS TO THE ISSUES INVOLVED IN GROUND NOS .3 TO 5 IN REVENUES APPEALS AND ASSESSEES CROSS OBJECTIONS REGARDING THE ADDIT ION IN DISPUTE MADE ON ACCOUNT OF DIFFERENCE BETWEEN THE COST OF CONSTRUCTION WORK ED OUT BY THE D.V.O. AND THE COST DECLARED BY THE ASSESSEE AND CHALLENGING THE V ALIDITY OF PROCEEDINGS UNDER SECTION 153C OF THE ACT, WE HAVE ALREADY DECIDED TH ESE ISSUES ON 17 TH OCTOBER, 2011 IN ITA NOS.359 & 357/AGR/2010 IN THE CASE OF D CIT VS. M/S. LDK FINANCE & INVESTMENT (P) LIMITED AND C.O. NO.81/AGR/2010 IN THE CASE OF M/S LDK ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 33 FINANCE & INVESTMENT (P) LIMITED VS. DCIT. FOR THE SAKE OF CONVENIENCE RELEVANT PORTION OF THE SAME IS REPRODUCED AS UNDER :- 9. WE HAVE HEARD BOTH THE SIDES AND HAVE PERUSED T HE ENTIRE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CONSIDER ED VARIOUS CASE LAWS RELIED UPON. IT IS BORNE OUT ON RECORD THAT TH E IMPUGNED ADDITIONS HAVE BEEN MADE U/S. 69B OF THE ACT. THE P ROVISION OF THIS SECTION LAYS DOWN AS UNDER : WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE, AND THE ASSESSING OFFICE R FINDS THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENTS OR I N ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE B OOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE O F INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH E XCESS AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FI NANCIAL YEAR. FROM THE PLAIN READING OF AFORESAID SECTION, IT IS APPARENT THAT PROVISIONS OF SECTION 69B CAN BE INVOKED IF (I) IT IS FOUND BY THE A.O. THAT THE ASSESSEE HAS MADE INVESTMENT ; (II) IT IS FOUND THAT THE AMOUNT EXPANDED ON SUCH I NVESTMENT EXCEEDS THE AMOUNT RECORDED IN THAT BEHALF IN THE B OOKS OF ACCOUNTS AND (II) EITHER THE ASSESSEE OFFERS NO EXPLANATION ABOU T SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED IS NOT SATISFACTO RY IN THE OPINION OF THE A.O. ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 34 THESE THREE FINDINGS ARE CUMULATIVE, TO BE RECORDED ON GATHERING THE NECESSARY FACTS, BUT THE BASIC FINDING WHICH IS TO BE RECORDED IS WHETHER THERE WAS SUFFICIENT AND COGENT MATERIAL IN RESPECT OF THE AMOUNT EXPANDED BY THE ASSESSEE IN EXCESS OF THAT S HOWN IN THE BOOKS OF ACCOUNTS. THE ONUS, IN OUR OPINION, IS ON THE RE VENUE TO PROVE THAT THE ASSESSEE HAS EXPANDED EXTRA AMOUNT I.E THE AMOU NT INVESTED BY THE ASSESSEE IS MORE THAN THE AMOUNT AS RECORDED IN THE BOOKS OF ACCOUNTS. THE RECORD SHOWS THAT CERTAIN BILLS AND V OUCHERS RELATING TO THE ASSESSEE WERE FOUND FROM THE PREMISES OF A GROU P COMPANY OF THE KESHWANI FAMILY, NAMELY M/S. LDK SHARES AND SECURIT IES (P) LTD. THESE DOCUMENTS WERE ADMITTEDLY FOUND PROPERLY RECO RDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE IN REGU LAR COURSE OF ITS BUSINESS. THEREFORE, IN OUR OPINION, THERE WAS NO M ATERIAL RECOVERED IN THE SEARCH PROCEEDING TO ESTABLISH THAT THE INVE STMENT MADE IN THE IMPUGNED PROPERTY EXCEEDED TO THAT RECORDED IN THE BOOKS OF ACCOUNT. THE DEPARTMENT, THEREFORE, COULD NOT DISCHARGE ITS BURDEN TO SATISFY THE CONDITION PRECEDENT BEFORE MAKING ADDITION U/S. 69B OF THE ACT SIMPLY ON THE BASIS OF VALUATION REPORT OBTAINED. I N THE CASE OF VENKATRAJU MODERN BOILED & RAW RICE MILL VS. ACIT ( SUPRA), IT HAS BEEN OBSERVED THAT IT IS NOT A PROPER PROCEDURE TO FIRST OBTAIN A REPORT FROM THE VALUATION CELL AND THEN INFORM THE ASSESSE E THAT THE ADMITTED COST IS LOWER THAN THE COST DETERMINED BY THE VALUA TION CELL AND THE DIFFERENCE WOULD BE TREATED AS UNEXPLAINED EXPENDIT URE. NO DECISION HAS BEEN CITED BY THE LD. DR CONTRARY TO THE DECISI ONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE AS MENTIONED ABOVE . 10. IT IS ALSO WORTHWHILE TO POINT OUT THAT THE ACC OUNT BOOKS OF THE ASSESSEE-COMPANY HAVE NOT BEEN REJECTED BY THE ASSE SSING OFFICER. THE ASSESSMENT ORDER NOWHERE SPEAKS OF ANY SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT, RATHER THE ACCOUNT BOOKS OF THE A SSESSEE-COMPANY HAVE BEEN ACCEPTED. THEREFORE, LAYING OUR HANDS ON THE YARDSTICK LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF SARGAM CINENA VS. CIT (SUPRA) AND PLENTY OF OTHER DECISIONS, WE ARE O F THE CONSIDERED OPINION, THAT THE REFERENCE OF PROPERTY FOR VALUATI ON U/S. 142A AND RELIANCE ON THE VALUATION REPORT IS NOT JUSTIFIED A T ALL. THE RELEVANT OBSERVATIONS OF HONBLE SUPREME COURT READ AS UNDER : IN THE PRESENT CASE, WE FIND THAT THE TRIBUNAL DEC IDED THE MATTER RIGHTLY IN FAVOUR OF THE ASSESSEE INASMUCH A S THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSING AUTHORITY ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 35 COULD NOT HAVE REFERRED THE MATTER TO THE DEPARTMEN TAL VALUATION OFFICER (DVO) WITHOUT THE BOOKS OF ACCOUN T BEING REJECTED. IN THE PRESENT CASE, A CATEGORICAL FINDIN G IS RECORDED BY THE TRIBUNAL THAT THE BOOKS WERE NEVER REJECTED. THIS ASPECT HAS NOT BEEN CONSIDERED BY THE HIGH COURT. IN THE CIRCUMSTANCES, RELIANCE PLACED ON THE REPORT OF THE DVO WAS MISCONCEIVED. 11. APART FROM THE ABOVE, IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD FURNISHED BILLS/VOUCHERS REGARDING EXPENSES AND A R EPORT OF REGISTERED VALUER BEFORE THE VALUATION CELL OF THE DEPARTMENT, BUT NEITHER THE DVO WHILE FRAMING HIS REPORT NOR THE ASSESSING OFFI CER WHILE COMPLETING THE ASSESSMENT HAS CONSIDERED THE SAME. THEY HAVE ALSO NOT ASSIGNED ANY REASON AS TO WHY THESE VOUCHERS AN D REGISTERED VALUERS REPORT SHOULD NOT BE CONSIDERED IN THE CAS E OF THE ASSESSEE. THEREFORE, IN OUR OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITIONS AND, THUS, BOTH TH E APPEALS OF THE REVENUE DESERVE TO FAIL. 12. ADVERTING TO THE CROSS OBJECTION FILED BY THE A SSESSEE, WE FIND THAT THE ASSESSEE BY MEANS OF THIS CROSS OBJECTION HAS CHALLENGED THE VALIDITY OF PROCEEDINGS U/S. 153C OF THE ACT. SINCE , WE HAVE CONFIRMED AND SUPPORTED THE IMPUGNED ORDER OF LD. CIT(A) ON M ERITS, THE CROSS OBJECTION FILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND IS DISMISSED ACCORDINGLY. 13. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 17.10.2011. 45. KEEPING IN VIEW OF THE AFORESAID DECISION, THE ISSUE INVOLVED IN GROUND NOS. 3 TO 5 IN ITA NOS.345, 346 & 347/AGR/2010, GROUND N OS.1 TO 3 IN ITA NOS.348/AGR/2010, GROUND NOS.1 & 2 IN ITA NOS.378 & 380/AGR/2010 IN THE CASE OF M/S LDK BUILDERS (P) LIMITED, ARE DISMISSED. SIN CE THE REVENUE HAS NOT ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 36 PLEADED ANYTHING ON THE GENERAL GROUNDS OF APPEALS, THEREFORE, THE SAME ARE ALSO DISMISSED AS SUCH IN ALL THE APPEALS FILED BY THE R EVENUE. 46. IN ALL THE AFORESAID CROSS OBJECTIONS FILED BY THE ASSESSEE, THE GROUNDS RELATING TO VALIDITY OF PROCEEDINGS UNDER SECTION 1 53C HAVING BECOME INFRUCTUOUS, ARE BOUND TO FAIL. AS SUCH, THE CROSS OBJECTIONS F ILED BY THE ASSESSEE ARE DISMISSED AS INFRUCTUOUS. 47. AS REGARDS TO CROSS OBJECTION NO.78/AGR/2010 (I N ITA NO.355/AGR/2010) IN THE CASE OF LDK SHARES & SECURITIES (P) LIMITED, TH E LD, COUNSEL FOR THE ASSESSEE STATED THAT THE ADDITION INVOLVED IN GROUND NOS.2 & 3 OF THE C.O. HAS BEEN MADE BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT IN THE CASE OF THE ASSESSEE UNDER SECTION 143(3) OF THE ACT AND THE ASSESSEE HAS FILE D THE APPEAL AGAINST THE IMPUGNED ADDITIONS. HE FURTHER STATED THAT THE PRE SENT C.O. MAY BE ALLOWED TO WITHDRAW SUBJECT TO THE RIGHT TO AGITATE THE ADDITI ON RAISED IN THIS C.O. BEFORE THE APPELLATE AUTHORITY I.E. ITA NO.1050/D/2008 PENDING BEFORE TRIBUNAL. NO OBJECTION HAS BEEN RAISED BY THE LD. DEPARTMENTAL R EPRESENTATIVE ON THE REQUEST OF THE ASSESSEES COUNSEL. THEREFORE, THE GROUND NOS. 2 & 3 IN C.O. NO.78/AGR/2010 ARE DISMISSED AS WITHDRAWN AND REMAINING TWO GROUND S ARE DISMISSED AS INFRUCTUOUS. SIMILARLY, IN C.O. NO.80/AGR/2010 (IN ITA NO.358/AGR/2010) IN THE ITA NOS.355, 356, 358, 345, 346, 347, 348, 378, 380, 360 & 361 C.O. NOS.78, 79, 80, 74, 75, 76, 77, 17, 82 & 83 37 CASE OF LDK SHARES & SECURITIES (P) LIMITED, GROUND NO.3 RELATING TO THE ISSUE OF DEPRECIATION HAS NOT BEEN PRESSED BY THE LD. COUNSE L FOR THE ASSESSEE, THEREFORE, GROUND NO.1 & 2 OF THE C.O. ARE DISMISSED AS INFRUC TUOUS AND GROUND NO.3 IS REJECTED AS NOT PRESSED. 48. IN THE RESULT, ALL THE APPEALS FILED BY THE REV ENUE ARE DISMISSED AND ALL THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALSO DIS MISSED, AS DISCUSSED ABOVE. (ORDER PRONOUNCED IN THE OPEN COURT ON 20.10.2011) SD/- SD/- (B.C. MEENA) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 20 TH OCTOBER, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, AGRA TRUE COPY