Hariom Smelters Private Limited V. Union of India through the Income Tax Officer, Ward-3[1], Kolkata

T.A./41/2017

AI Insights

The case involves M/s. Hariom Smelters Private Limited, the appellant, contesting an order related to unexplained cash credits under Section 68 of the Income Tax Act, 1961. The appellant had declared a minimal income for the Financial Year 2008-09 and was subjected to scrutiny, leading to the addition of Rs. 1,80,00,000 as unexplained cash credit. The Commissioner of Income Tax (Appeal) initially ruled in favor of the appellant, which was later set aside by the I.T.A.T, restoring the Assessing Officer's order. The High Court found that both the I.T.A.T and the Commissioner had failed to conduct necessary independent inquiries and remanded the matter for further investigation.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 680754 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 09-11-2020
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax (Central-1) Vs. NRA Iron and Steel Private Limited
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AMRITA SINHA
• Assessee Lawyers: SUMEET GADODIA; AAKANSHA GADODIA; SONAL PRIYA
• Keywords: Assessment; Cash credit; Income Tax; Share Application Money; Unexplained Fund
• Section: 142(1); 143(2); 153; 68

Judgement Text

"IN THE HIGH COURT OF JHARKHAND AT RANCHI T.A. No. 41 of 2017 M/s. Hariom Smelters Private Limited, Jamshedpur… Appellant Versus Union of India through the Income Tax Officer, Ward-3[1], Kolkata … … Respondent --- CORAM: HON’BLE MR. JUSTICE APARESH KUMAR SINGH HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY --- For the Appellant : M/s. Sumeet Gadodia, Aakansha Gadodia, Sonal Priya, Advocates For the Respondent : Ms. Amrita Sinha, Advocate --- 09/10.11.2020 Heard learned counsel for the appellant, Mr. Sumeet Gadodia, assisted by Aakansha Gadodia, Sonal Priya and Ms. Amrita Sinha for the Respondent-Income Tax Department. 2. The following substantial question of law arises for decision in this appeal. “(X) Whether the learned ITAT has set aside the order of CIT (Appeal) and restored the order of the Assessing Officer in an illegal manner when at best the matter could have been remanded back to Appellate Court especially when no proper enquiry was made against the transaction in dispute?” 3. For proper appreciation of the issue in controversy, it is appropriate to refer to the relevant provisions of law and the background facts as well. 4. Under Section 68 of the Income Tax Act, where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year. The instant proceeding relates to the Financial Year 2008-09 in respect of which a return was filed by the appellant- assessee declaring income of Rs. 48,086/- on 24.09.2009. The aforesaid return was selected for scrutiny. Notice under Section 143(2) of the Income Tax Act, 1961 was issued on 25.08.2010 upon the assesse, which, however, was returned unserved with postal remark “not claimed”. Therefore notice was served by way of affixation. On 26th July, 2011, notice under Section 142(1) of the Income Tax Act was issued and duly served upon the appellant asking him to submit certain documents/details with respect to sudden rise in share application money amounting to Rs. 1,80,00,000 within the year. Since no compliance was being made by the appellant, a show cause notice was served upon him for compliance. On 07th December, 2011, the appellant appeared and 2 submitted copy of the audit report and sought an adjournment for submitting documents on the same date. On 26th December, 2011, the appellant appeared and submitted the name of share applicants along with their PAN Cards. The limitation period for passing the assessment order under Section 153 of the Income Tax Act was going to end on 31st December, 2011. On 29th December, 2011, the appellant was asked to submit further documents in order to satisfy the genuineness of transaction, creditworthiness of the share applicant and about the existence of share applicant. However, assessee asked the Assessing Officer to verify on its own the genuineness, creditworthiness and existence of share applicant. Since the enquiry could not be possible within the short time, the Assessing Officer passed the assessment order dated 30th December, 2011 making addition under Section 68 of the Income Tax Act, as no explanation was offered by the appellant about the nature and source of the cash credits (Annexure-3). 5. Assessee being aggrieved preferred an appeal before the Commissioner of Income Tax (Appeal). During the course of hearing, assessee submitted additional documents in paper book containing pages nos. 1 to 67. The aforesaid paper book was sent to the Assessing Officer on 28th August, 2012 for its comments and further enquiries. The Assessing Officer submitted his remand report on 9th October, 2012, inter alia, indicating that after scrutiny of the paper book, he found that all the four share applicants had paid money in cash to the tune of Rs. 1,80,00,000/-. It was further revealed that two of the share applicants namely J.M. Textiles Pvt. Ltd and Marubhumi Tracon Pvt. Ltd were having the same address in the R.O.C Records raising doubt in the minds of the Assessing Officer. The Assessing Officer had issued notice under Section 131 of the I.T. Act for the physical appearance of the Directors of the said four companies. Out of the said four notices, three notices were returned unserved and though notice was served upon one of the share applicants, but no compliance was made. Learned C.I.T (Appeal) vide order dated 7th May, 2013 allowed the appeal holding that the appellant had duly submitted I.T. Return, Bank Statements showing withdrawal of cash, PAN, Ledger Account etc. of the four share appellant companies and thus the appellant-assessee had duly established the three ingredients of Section 68 of the Income Tax Act. Learned C.I.T (Appeal) had, however, not conducted any independent enquiry. 6. Being aggrieved, the Revenue preferred an appeal before the learned Income Tax Appellate Tribunal, Ranchi ( in short ‘I.T.A.T’)). After repeated opportunities also, the assessee did not appear and the matter remained pending for about 5 years. Thereafter, learned Tribunal proceeded to decide 3 the appeal in an ex-parte manner. Vide order dated 07.09.2017 (Annexure-5) learned I.T.A.T has set aside the order passed by C.I.T(Appeal) observing that learned C.I.T (Appeal) upon consideration of the additional evidence adduced by the assessee suo motu opined that these are limited companies i.e., share applicants, who are assessed to income tax and are having creditworthiness. Learned I.T.A.T observed that the Assessing Officer was not provided information to verify and examine the genuineness of the investment of the four companies. It was further held that learned C.I.T(Appeal) has dealt only on the investment part but not the source of companies which made the investment in assesse company. 7. Before us, learned counsel for the appellant has strenuously argued that the appellant assessee had discharged the primary onus to establish the genuineness of the transaction under Section 68 of the Income Tax Act. If the appellate authority upon consideration of the additional evidence and after giving opportunity to the Assessing Authority to examine it and adduce any rebuttal evidence was satisfied that the assessee had established the identity of the creditors; the capacity of the creditors to advance money and the genuineness of the transaction, then the proceedings under Section 68 of the I.T.Act could not be maintained. Learned Appellate Authority has, therefore, rightly set aside the order of the Assessing Officer and deleted the addition. It is submitted that learned I.T.A.T has, however, failed to take into account the detailed analysis of the additional evidence produced by the assessee, made by the learned C.I.T (Appeal) before arriving at such a finding. Instead learned I.T.A.T has at paragraph 11 of the impugned order wrongly held that Assessing Officer was not provided information to verify and examine the genuineness of the investment of the four companies. In fact, learned C.I.T (Appeal) in its order dated 7th May, 2013 (Annexure-4) at paragraph 4 has categorically found that all the share applicant-companies were assessed to tax and their PAN and acknowledgement of I.T. Return along with their audited balance-sheet, bank statement showing transaction etc. were made available to the Assessing Officer. The assessee had furnished the details of source of cash for making the share application in cash to the appellant company. There was no legal bar to make share application in cash. The details and evidences filed clearly showed withdrawal in question from bank account for making the share application by the respective companies. 8. It has been submitted by the Ld. Counsel for the appellant that considering the evidence in totality, learned C.I.T(Appeal) has come to an informed opinion that the existence/identity of these companies could not be 4 doubted. It was further held that the Assessing Officer had failed to establish that the share applicants did not have the means to make the investment and that such investment actually emanated from the coffers of the assessee- company. The receipt of share application money has been duly recorded in the books of the assessee-company and the payment of share application money was also duly recorded in the audited accounts of each of the share applicants. On consideration of these evidences on record, learned C.I.T(Appeal) came to a considered view that the assessee had not only proved the identity of share applicants but has also established their creditworthiness and genuineness of the transactions. Therefore, when all the ingredients contained in Section 68 are satisfied by the assessee, there is no scope for addition as unexplained fund by way of share application, more so when no evidence was brought on record by the Assessing Officer to the contrary. 9. Learned counsel for the appellant has also submitted that when the Assessing Officer was asked to respond to the additional evidence in terms of Rule 46(A), he submitted a preliminary remand report dated 12th September, 2012 and final report dated 9th October, 2012. The summary of the report also finds mention in the order of learned C.I.T (Appeal) at paragraph-3. The Assessing Officer has simply stated that notices were sent on the address mentioned in the letter heads of the parties and were served on one J.M. Textiles Pvt. Ltd., but he did not comply with the notice under Section 131 of the I.T.Act. Notices have been returned unserved on the other three parties, namely, EPS Financial Services Pvt. Ltd., Bhartia Bachat Ltd. and Marubhumi Tracon Pvt. Ltd. The Assessing Officer in his report opined that identity, creditworthiness and genuineness of the transaction in respect of the above share applicants, who had applied for shares of the assessee-company in cash were not verifiable. Therefore, the amount of Rs. 1,80,00,000/- found to be credited in the books of the assessee-company had rightly been added under Section 68 of the I.T. Act. Learned counsel for the appellant submits that these reports clearly show that neither was any enquiry conducted by the Assessing Officer to disbelieve the additional evidence nor any evidence in rebuttal was adduced in terms of Rule 46A(3) to discredit the additional evidence produced by the appellant. In those circumstances, learned C.I.T (Appeal) was right in setting aside the addition and holding as above. Learned I.T.A.T has committed a serious error in coming to a finding that the order of the C.I.T (Appeal) was not in accordance with law since he did not enquire into the source of income of these share applicant-companies to arrive at a satisfaction that the transactions were genuine and the share applicant-companies had 5 creditworthiness. 10. Learned counsel for the appellant has placed reliance on a decision of the Apex Court in the case of Principal Commissioner of Income Tax (Central-1) Vs. NRA Iron and Steel Private Limited reported in (2019) 15 SCC 529. According to the appellant, the assessee having discharged the onus in terms of Section 68 of the Act and there being no enquiry by the Assessing Officer or any contrary evidence to dispel the identity of the creditors/subscribers, the genuineness of the transaction and the creditworthiness or financial strength of the share applicant-companies, the entire proceeding under Section 68 of the I.T. Act could not be sustained. Therefore the order of learned I.T.A.T restoring the order of the Assessing Officer is bad in law and is fit to be set aside. 11. Learned counsel for the Respondent-Revenue has after taking us through the narration of facts recorded in the forgoing paragraphs, submitted that the assessee had failed to submit any evidence to discharge its primary onus regarding the identity of the creditors, genuineness of transaction and creditworthiness of the creditors. The order of Assessing Officer dated 30th December, 2011 (Annexure-3) clearly shows that even after repeated opportunities, only just five days before end of the period of limitation, on 26th December, 2011, the assessee provided the details only after issuance of a show cause. When the assessee-company was asked to establish entity of the subscribers to share capital and prove their creditworthiness and genuineness of the transactions on 29th December, 2011, the assesse company requested the Assessing Officer to verify the genuineness, creditworthiness and existence of the share applicant. Therefore no compliance was made in response to the notice under Section 142(1) by the assessee. As such, the Assessing Officer rightly arrived at an opinion that the assessee had offered no explanation about the nature and source of cash credit found credited in the books of the assessee maintained for that financial year. Therefore, those sums credited to the books of the assessee were charged to income tax as the income of the assessee of the previous year. Learned counsel for the Respondent-Revenue submits that the learned C.I.T (Appeal) failed to undertake any independent enquiry in terms of Rule 46A(4) and simply being guided by additional evidence adduced by the assessee chose to record a finding in favour of the appellant that he had discharged the burden of proving the identity of the creditors, the genuineness of the transaction and the creditworthiness of the creditors and, therefore, Section 68 of the Act could not be invoked against the assessee. The learned C.I.T (Appeal) failed to exercise the statutory power vested in him to conduct 6 an independent enquiry as to the source of income of these companies, who had made contribution in cash as share capital in favour of the assessee- company. Moreover, the Assessing Officer in his report had submitted that two of the share applicant-companies had the same address and despite notices issued on four companies and served only on one of the company that company also failed to comply with the notice under Section 131 of the Act. As such, the evidence adduced by the assessee were unverifiable. In these circumstances, learned I.T.A.T upon proper consideration of the materials on record rightly recorded a finding that the learned C.I.T (Appeal) had failed to ascertain the creditworthiness of the share applicant-companies and source of funds of the company, who made the investment in the assessee company. As such, the order of learned C.I.T (Appeal) was set aside and the order passed by Assessing Officer was rightly restored. 12. Learned counsel for the Respondent-Revenue has also placed reliance upon the decision of the Apex Court in the case of NRA Iron and Steel Private Limited (supra). She submits that the said case also relates to receipt of share capital premium by the assessee- company in the Financial Year 2009-10. In that case also the Assessing Officer had issued summons to the representatives of the investor companies. Despite summons having been served, nobody had appeared on behalf of any of the investor companies, which created a doubt about the identity of the investor companies. However, in that case the Assessing Officer had got independent field inquiries conducted with regard to identity and creditworthiness of the investors companies and to examine the genuineness of the transaction. But in the instant case, the assessee had submitted the details only four days back, that too after a show cause notice on 26th December, 2011. As such, the assessee had not discharged the primary onus as required under Section 68 of the Income Tax Act. The Apex Court in the instant case has referred to the several decisions of different High Courts as also the Hon’ble Supreme Court and summarised the principles in this regard at para-13 of the report. It has been held therein that the assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and creditworthiness of the investors, who should have the financial capacity to make the investment in question, to the satisfaction of Assessing Officer, so as to discharge the primary onus. That ingredients having not been satisfied by the assessee, the order passed by learned I.T.A.T restoring the order of Assessing Officer adding those investments as share capital to the income of the assessee for the relevant financial year, does not suffer from any error of 7 law or on facts which could be decided in this appeal under Section 260(A) of the Income Tax Act. Learned counsel for the Revenue has also placed reliance upon a recent decision of the Delhi High Court in the case of Pr. Commissioner of Income Tax-6, New Delhi.-Vs. NDR Promoters Pvt. Limited reported in 2019 SCC OnLine Del 6599 in support of her submission. She submits that no substantial question of law as proposed by the appellant arises for determination in the instant matter. The substantial questions of law formulated may be answered in the negative. The appeal, therefore, deserves to be rejected. 13. We have considered the submission of learned counsel for the parties in the light of the materials on record and the substantial question of law framed for adjudication in this appeal. From the narration of facts and the sequence of dates and events noted above, it can be summarized that the appellant herein was subjected to a scrutiny assessment in terms of Section 143 of the Act for certain unexplained cash credits found in its Books of Account for the Financial Year 2008-09 in respect of which it had filed a return declaring income of Rs. 48,086/- only. The assessee after repeated notices, submitted details of the share applicant-companies on 26th December, 2011 along with their PAN before the Assessing Officer just five days before the expiry of limitation period for passing the assessment order under Section 153 of the Income Tax Act. The Assessing Officer, in such a short time, could not verify the genuineness, creditworthiness and identity of share applicants. It accordingly held that the assessee had failed to provide sufficient explanation for these cash credit of Rs. 1,80,00,000/- found in its books as investment in share by way of cash by these four companies. As such, it was added to his income. During the appeal, assesse adduced additional evidence in terms of Rule 46A of Income Tax Rules being the audited accounts, Income Tax Returns, Bank Statements, Ledger Accounts, details of source of capital of four companies, which had subscribed shares of the appellant-companies before the Appellate Authority. The Assessing Officer was asked to undertake inquiry and examine the evidence and respond thereto in terms of Rule 46A(3) of the I.T.Rules and/or to submit any rebuttal evidence. For proper appreciation, Rule 46A is quoted hereunder: 46A. Production of additional evidence before the Deputy Commissioner (Appeals) and Commissioner (Appeals)]. 1. The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), any evidence, whether 8 oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely:- (a) Where the Assessing Officer has refused to admit evidence which ought to have been admitted; or (b) Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer; or (c) Where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal; or (d) Where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2) No evidence shall be admitted under sub-rule (1) unless the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) records in writing the reasons for its admission. (3) The Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) shall not take into account any evidence produced under sub-rule (1) unless the Assessing Officer has been allowed a reasonable opportunity – (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (4) Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.” 14. The Assessing Officer submitted a preliminary remand report on 12th September, 2012 and a final report on 9th October, 2012. In its final report, he submitted that his office had issued notice under Section 131 of the Income Tax Act upon the four share applicants on the address mentioned in the letter heads of the parties submitted by the authorized representative of 9 the appellant in the paper books. Though, notice was served on one of the parties, J.M. Textiles Pvt. Limited, but he did not comply with the notice. Notices had returned unserved upon rest three parties namely, E.P.S Financial Pvt. Limited, Bhartia Bachat Ltd. and Marubhumi Tracon Pvt. Ltd. The Assessing Officer, therefore, opined that the identity, creditworthiness and genuineness of the transactions in respect of the above share applicants, were not verifiable. He accordingly justified the addition of Rs. 1,80,00,000/- found to be credited in the books of the assesse company and opined that it has rightly been added under Section 68 of the Income Tax Act. The Assessing Officer did not adduce any rebuttal evidence. It is true that the Commissioner of Income Tax (Appeal) did not undertake any independent inquiry or examination of any witness under the powers conferred under Rule 46A(4) of the I.T Rules to arrive at an independent satisfaction that the assessee had discharged its primary onus regarding the identity, genuineness and creditworthiness of the creditors. On the contrary, the appellate authority rendered a finding at paragraph-4 to the effect that there is no dispute that all the share applicant-companies are assessed to tax and their PAN and acknowledgement of I.T. Return along with their audited balance-sheet, bank statements showing transaction etc. were made available to the Assessing Officer. He further proceeded to observe that the assessee had furnished the details of source of cash for making the share application in cash to the appellant company. This observation of learned C.I.T (Appeal) is not based upon any evidence adduced by the Assessing Officer or on the basis of any independent enquiry or examination of witness by the appellate authority. Being guided by the documents adduced by the assesse-appellant before him, the appellate authority in case of each of these share applicant companies observed that the amount of investment shown as share through cash stood withdrawn from the Bank Account of these companies and the audited accounts of these companies showed capital and reserve surplus. Based on these findings, learned C.I.T (Appeal) came to the opinion that the assesse had not only proved the identity of the share applicants but had also established their creditworthiness and genuineness of the transactions. Therefore, when all the ingredients in Section 68 of the Act were fulfilled, there was hardly any scope to invoke that Section alleging introduction of unexplained fund by way of share application, moreover when no evidence could be brought on record by the Assessing Officer to the contrary. 15. As has been held by the Apex Court in the case of NRA Iron and Steel Private Limited (supra), whereas the assessee is under a legal 10 obligation to prove the genuineness of the transaction, the identity of the creditors, and creditworthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the Assessing Officer, so as to discharge the primary onus, the Assessing Officer is also duty bound to investigate the creditworthiness of the creditor/subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name of name-lenders. In case, the inquires and investigation reveal the identity of the creditors to be dubious or doubtful, or lack creditworthiness, then the genuineness of the transaction would not be established. In such a case, the assesse would not have discharged the primary onus contemplated under Section 68 of the Act. In the present case, as is evident, while the assesse gave the details of the share applicant companies five days before the close of the limitation period before the Assessing Officer, no independent inquiry or investigation could be conducted by the Assessing Officer regarding fulfilment of these three ingredients under Section 68. However, when these details were furnished before the appellate authority, the Assessing Officer on being asked submitted his response thereto in terms of Rule 46A(3) of the Income Tax Rules stating that the identity, creditworthiness and genuineness of the transactions were not verifiable. However, he did not undertake any independent field enquiry or investigation. Learned C.I.T (Appeal) has been conferred the power to undertake such inquiry or examination of witness for recording his own satisfaction regarding fulfilment of these three ingredients under Rule 46A(4). In the case of NRA Iron and Steel Private Limited (supra), it is found from a reading of para 3.8 that the Assessing Officer had independently got field inquiries conducted with respect to the identity and creditworthiness of the investor companies to examine the genuineness of the transaction from where these companies were stated to be situated. This was in the similar circumstances when despite summons to the representatives of the investors company, nobody had appeared on their behalf. Therefore, merely providing the details of the investors companies by the assessee before learned C.I.T(Appal), did not absolve the learned C.I.T (Appeal) from arriving at an independent satisfaction regarding fulfilment of these three ingredients after due inquiry and investigation in terms of the provisions of Rule 46A of I.T.Rule moreso when the Assessing Officer had also not conducted any independent field enquiry or adduced evidence in rebuttal in terms of Rule 46(A)(3). 11 16. When the matter was taken in appeal before learned I.T.A.T, learned Tribunal after noticing the relevant materials on record arrived at an opinion that C.I.T (Appeal) had overlooked the facts that notice/summon under Section 131 of the Act issued by the Assessing Officer in respect of one company was received but there was no compliance on the part of the said company whereas the notices had returned unserved on the rest of three investors company. Further the statement of the assessee company that the four companies are having creditworthiness were not substantiated. The assessee has filed an explanation only on 26th December, 2011 in respect of four investors/companies i.e. five days before the end of limitation period for passing an order under Section 153 of the Act i.e. on 31st December, 2011. Learned Tribunal therefore, came to an opinion at Para-11 of the impugned order that learned C.I.T (Appeal) though had considered additional evidence and called for the remand report from the Assessing officer and the submission and evidence filed by the assessee and made categorical calculations on these companies financial assessment but had not made any independent inquiry as to the creditworthiness of these companies. Learned I.T.A.T observed that learned C.I.T (Appeal) had dealt only on the investment part made by these companies but not regarding sources of the companies which made the investment in the assessee company. Learned Tribunal, therefore, being dissatisfied with the findings of learned C.I.T (Appeal) set aside the appellate order and restored the order of the Assessing Officer. 17. Here, however, we are of the considered opinion that learned I.T.A.T having held as above that learned C.I.T (Appeal) had dealt only on the investment part made by the companies but not sources of the companies which made the investment in the assessee company, committed an error of law in not remanding the matter before the appellate authority to undertake the necessary enquiry and investigation to determine the creditworthiness of the creditors/subscribers, verify the identity of the subscribers and ascertain whether the transaction was genuine or not?. It is noteworthy that Learned CIT appeal had not undertake any inquiry or investigation in respect of identity and creditworthiness of these investors/share applicants company from the concerned assessing officer before whom these companies were assessable. In effect, learned I.T.A.T also committed the same error as that of learned C.I.T(Appeal), while restoring the order of the Assessing Officer, without asking for necessary enquiry and investigation statutorily required to be made by the appellate authority to arrive at an independent satisfaction 12 whether the identity, creditworthiness of the investors and the genuineness of the transactions are established or not. More so, since the additional evidence had been adduced by the assessee at the appellate stage and accepted by the appellate authority but without carrying out any independent investigation or enquiry. 16. Learned counsel for the parties have placed reliance upon the recent decision of the Apex Court in the case of NRA Iron and Steel Private Limited (supra). The said decision also relates to investment as share money in the assessee company during Financial Year 2009-10 in respect of which proceedings were initiated against the assessee asking him to furnish details and satisfy the three ingredient of Section 68 of the Income Tax Act i.e. the identity of investors, their creditworthiness and the genuineness of the transactions. The issue in that case was whether the assessee had discharged the primary onus to establish the genuineness of the transactions required under Section 68 of the Act. The Apex Court having dealt with the facts of the said case, came to an opinion that after discharge of the necessary primary onus the Assessing Officer had undertaken field inquiries with respect to identity and creditworthiness of the investors/companies to examine the genuineness of the transactions. It was observed that the initial onus of proof lies on the assessee. The Apex Court after discussion on the precedents on the subject and the decision rendered by different High Courts, summarized the principles in that regard at para 13 which is quoted hereunder: Para 13: The principles which emerge where sums of money are credited as share capital/premium are: 13.1 The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and creditworthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the Assessing Officer, so as to discharge the primary onus. 13.2 The Assessing Officer is duty-bound to investigate the creditworthiness of the creditor/subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name of name-lenders. 13.3 If the inquires and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack creditworthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated under Section 68 of the Act. 17. The Apex Court, however, in the facts of the said case felt satisfied that the Assessing Officer had conducted detailed inquiry which revealed that some of the investors companies were non-existent and had no office at the address mentioned by the assessee. Therefore, the genuineness 13 of the transactions was found to be doubtful. It was held that the assessee had failed to discharge the onus under Section 68 of the Act. 18. In the facts of the present case, since learned C.I.T (Appeal) allowed additional evidence he was required to undertake necessary inquiry and investigation to come to a satisfaction about the identity and creditworthiness of the creditors and the genuineness of the transactions. Learned tribunal therefore fell in error in straightaway restoring the order of Assessing Officer while allowing the appeal of the Revenue, instead of remanding it to the learned C.I.T (Appeal) to carry out such enquiry and investigation in terms of the provisions of Section 68 of the Act and Rule 46(A) of the I.T. Rules to arrive at an opinion in that regard. The substantial questions of law posed for determination at the outset is therefore answered in favour of the appellant- assessee. The order of learned I.T.A.T is set aside. The matter is remitted to learned C.I.T(Appeal) to take a fresh decision, in accordance with law, after making proper enquiry and investigation and due opportunity to the parties. 19. Appellate Authority would proceed to undertake further enquiry and evidence from the stage, where the remand report was submitted by the Assessing Officer after giving due opportunity to the parties. Since the proceedings relate to the Assessment Year 2009-10, let the parties appear before learned C.I.T (Appeal) on 7th December, 2020, so that the proceedings can be expeditiously disposed of. 20. The appeal is allowed in the aforesaid manner. (Aparesh Kumar Singh,J.) (Anubha Rawat Choudhary,J.) jk "