ITO, WD-2(1), SILIGURI, Darjeeling V. M/s Samaksh Infrastructure Pvt. Ltd., Siliguri

ITA 1036/KOL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3044 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 24-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR ADD
• Keywords: Unexplained cash credit; Source of fund; Question of law; Accommodation entries; Onus to prove
• Section: 271(1)(c); 143(3); 133(6); 195; 131; 68

Judgement Text

1 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH, C AT KOLKATA () . . , . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1036/KOL/2015 ASSESSMENT YEAR: 2012-13 ITO, WARD-2(1), SILIGURI VS. M/S. SAMAKSH INFRASTRU CTURE PVT. LTD. PAN : AAQCS 2780 J APPELLANT RESPONDENT DATE OF HEARING 18.12.2018 DATE OF PRONOUNCEMENT 27.02.2019 FOR THE APPELLANT SHRI SAURABH KUMAR, ADD. CIT(DR) FOR THE RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A), SILIGURI DATED 27.05.2015 FOR ASSESSMENT YEAR 2012-13. 2. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING RS. 1.20 CRORES MADE BY THE AO U/S 68 OF T HE ACT. 3 THE BRIEF FACT OF THE CASE AS NOTED BY THE AO IS THAT THE ASSESSEE IS A COMPANY WHICH WAS INCORPORATED ON 01.09.2011 AND THAT THE ASSESSE E IS ENGAGED IN REAL ESTATE BUSINESS. THE AO NOTES THAT THE ASSESSEE RECEIVED SHARE CAPIT AL AND SHARE PREMIUM FROM INDIVIDUALS & CORPORATE ENTITIES, THE DETAILS ARE DISCERNIBLE F ROM THE CHART BELOW: SL NO. NAME & ADDRESS OF SHAREHOLDERS NO. OF SHARES FACE VALUE (PER SHARE) SHARE PREMIUM (PER SHARE) TOTAL INVESTMENT 1. MANISH GOYAL 10000 10/- - RS. 1,00,000/- 2. NISHA GOYAL 20000 10/- - RS. 2,00,000/- 3. MANISH GOEL & SONS 30000 10/- - RS. 30,00,000/- 4. AAKARSHAN DEALERS PVT. LTD. 3000 10/- 490/- RS. 15,00,000/- 2 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 23A, NETAJI SUBHAS ROAD, KOLKATA 01. 5. ARROWROOT TRACOM PVT. LTD., 125, N.S. ROAD, KOLKATA 01 1600 10/- 490/- RS. 8,00,000/- 6. GIRI FINANCIAL SERVICES PVT. LTD. 63, JESSORE ROAD, 3 RD FLOOR, FLAT NO. 314, KOLKATA 700055 5000 10/- 490/- RS. 25,00,000/- 7. RANISATI HOSIERY PVT. LTD., MILITARY QUARTER ER (ANSHA BISHESH), BALI, HOWRAH 711227 3000 10/- 490/- RS. 15,00,000/- 8. SRI NARAYAN MERCANTILES PVT. LTD. 5/1, CLIVE ROW, R. NO. 125, KOLKATA 01. 5000 10/- 490/- RS. 25,00,000/- 9. VIBHUTI MA TRADECOM PVT. LTD. 125, N.S. ROAD, KOL-01 1600 10/- 490/- RS. 8,00,000/- 10. WALNUT DEALCOM PVT. LTD. 125, N.S. ROAD, KOL-01. 2000 10/- 490/- RS. 10,00,000/- 11. WALNUT DEALCOM PVT. LTD. 125, N.S. ROAD, KOL-01. 1200 10/- 490/- RS. 6,00,000/- 12. WALNUT TRADECOM PVT. LTD. 125, N.S. ROAD, KOL-01. 1600 10/- 490/- RS. 8,00,000/- 4. FROM A PERUSAL OF THE AFORESAID CHART, ACCORDI NG TO THE AO, THE SERIAL NO. 4 TO 12 (HEREINAFTER REFERRED TO AS THE SHARE SUBSCRIBING A ND INVESTING COMPANIES) HAVE SUBSCRIBED 3 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 THE SHARES OF ASSESSEE COMPANY HAVING FACE VALUE OF RS. 10 AT A PREMIUM OF RS. 490. THE AO NOTED THAT THE ASSESSEE HAD SUBMITTED THE NAME A ND ADDRESS OF THE INVESTING COMPANIES AND THAT HE HAD ISSUED NOTICE U/S 133(6) TO THESE S HARE SUBSCRIBING COMPANIES AND ACKNOWLEDGES TO HAVE RECEIVED FROM THEM CONFIRMATIO N THAT THEY HAVE INVESTED IN THE ASSESSEE-COMPANY. THE AO ALSO ACKNOWLEDGES TO HAVE RECEIVED ALONG WITH THE CONFIRMATION OF SUBSCRIBING COMPANIES, THEIR RESPEC TIVE PAN, ACKNOWLEDGEMENT COPY OF THE IT RETURN, RELEVANT PORTION OF THE BANK STATEME NT, COPY OF THE AUDITED ACCOUNT AND DETAILS OF SOURCE OF THE FUNDS [PAN, NAME AND ADDRE SS OF THE SOURCE]. DESPITE PRODUCING THE AFORESAID DETAILS, ACCORDING TO THE AO, SOME OF THE SHARE SUBSCRIBERS COULD NOT BE TRACED BY THE INSPECTOR, SO HE WAS OF THE OPINION THAT THE Y DO NOT HAVE CREDITWORTHINESS, SO HE ASKED THE ASSESSEE TO PRODUCE THE DIRECTORS. THEREA FTER, THE AO ACKNOWLEDGES THAT THE DIRECTOR OF THE ASSESSEE COMPANY HAVE GIVEN A STATE MENT, A GIST OF WHICH IS REPRODUCED AT PAGE 7 AND 8 OF ASSESSMENT ORDER. STILL, THE AO WAS OF THE OPINION THAT THE CREDITWORTHINESS OF THE SHARE SUBSCRIBERS COULD NOT BE PROVED BEFORE HIM AND THEREFORE, HE ADDED THE SHARE APPLICATION MONEY OF RS. 1.20 CRORES U/S 68 OF THE ACT AS UNEXPLAINED CREDIT. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO DELETE THE SAME. AGGRIEVED THE REVENUE IS BEFORE US. 5. ASSAILING THE ACTION OF LD. CIT(A), THE LEARNED DR SUBMITTED THAT AO HAVE FOUND OUT AFTER CARRYING OUT THOROUGH ENQUIRY THAT ASSESSEE H AVE FAILED TO DISCHARGE ITS BURDEN TO PROVE THE CREDITWORTHINESS OF THE SHARE-SUBSCRIBING COMPANIES, SO HE HAS RIGHTLY MADE THE ADDITION AND ALSO WONDERED AS TO HOW THE ASSESSEE C OMPANY COMMANDED PREMIUM OF RS. 490 PER SHARE, WHICH IS AGAINST HUMAN PROBABILITY. SO ACCORDING TO LEARNED DR, THE ORDER OF LD. CIT(A) IS ERRONEOUS AND NEED TO BE REVERSED AND THE AO ORDER NEED TO BE RESTORED. PER CONTRA THE LEARNED AR SUPPORTED THE ACTION OF LD. C IT(A) & DOES NOT WANT US TO INTERFERE WITH THE IMPUGNED ORDER. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECO RDS. THE AFORESAID FACTS ARE NOT DISPUTED AND SO THEY ARE NOT REPEATED FOR THE SAKE OF BREVITY. WE NOTE THAT THE LD. CIT(A) HAS TAKEN NOTE OF THE FACTS WHILE NARRATING THE GI ST OF FACTS FROM THE ASSESSMENT ORDER THAT THE NOTICES ISSUED BY THE AO U/S 133(6) TO THE RESP ECTIVE SHARE SUBSCRIBERS FOR VERIFICATION OF THE SHARE APPLICATION TRANSACTION, HAD BEEN DULY CO MPLIED WITH BY SHARE SUBSCRIBERS AND THEY 4 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 HAVE CONFIRMED TO THE AO THAT THEY HAVE INVESTED TH E SHARE CAPITAL AND PREMIUM IN THE ASSESSEE COMPANY. THE LD. CIT(A) TOOK NOTE OF THE F ACT THAT THEY ALSO PROVIDED THEIR RESPECTIVE RETURN OF INCOME, AUDITED BALANCE SHEET AND THEIR BANK STATEMENT. WE NOTE OF THE FACT THAT THE AO HAD NOT RECORDED ANY ADVERSE FINDI NG AGAINST THE IDENTITY AND GENUINENESS OF THE SHARE SUBSCRIBERS. HOWEVER, THE AO FOUND FAU LT ONLY ABOUT THE CREDITWORTHINESS OF THESE CORPORATE ENTITIES THAT THEY HAD NO CAPACITY TO MAKE SUCH INVESTMENT, ACCORDINGLY HE ADDED RS. 1.20 CRORES AS UNEXPLAINED CREDIT U/S 68. WE DO NOT AGREE WITH THE AFORESAID ACTION OF THE AO BECAUSE WHEN THE IDENTITY AND GENU INENESS OF THESE CORPORATE ENTITIES WERE PROVED BY THE FOLLOWING DOCUMENTS PRODUCED BEFORE T HE A.O WHICH A.O ACKNOWLEDGES AT PAGE 3 OF THE ASSESSMENT ORDER WHEREIN A.O OBSERVES ASSESSEE SUBMITTED NAME AND ADDRESS OF THE INVESTING COMPANIES (AS STATED ABOVE ) AND NOTICES UNDER SECTION 133(6) WERE ISSUED AND CONFIRMATIONS WERE RECEIVED, CONFIRMING THE ASSESSEES CLAIMS. IN THE CONFIRMATIONS, INVESTING COMPANIES FORWARDED PAN, A CKNOWLEDGEMENT COPY OF IT RETURNS, RELEVANT PORTION OF THE BANK STATEMENT, COPY OF THE AUDITED ACCOUNTS, SOURCE OF FUNDS IS ALSO PROVIDED AND THEIR PAN NUMBER AND ADDRESSES ARE ALS O GIVEN . SO IN THE SAID SCENARIO AS NOTED BY AO, THE IDENTITY AND GENUINENESS OF SHARE SUBSCRIBERS CANNOT BE DOUBTED ONLY BECAUSE INSPECTORS COULD NOT FIND THEM IN THE ADDRE SS FURNISHED BY THE ASSESSEE. FURTHER WE NOTE THAT THESE SHARE-SUBSCRIBING COMPANIES ARE INC ORPORATED AS PER COMPANIES ACT AND IF THERE IS A CHANGE OF ADDRESS IT WOULD BE AVAILABLE FROM THE WEBSITE OF ROC. WE NOTE THAT FOR FINDING OUT THE CREDITWORTHINESS OF SHARE SUBSCRIBI NG COMPANIES THE A.O VISITED THE ROC WEBSITE AND HAS GATHERED INFORMATION. SO WHEN WAS T HE INSPECTORS REPORT PREPARED IS NOT DISCERNABLE FROM ASSESSMENT ORDER, AND THAT CANNOT BE THE SOLE GROUND TO DRAW ADVERSE INFERENCE AGAINST THE SHARE SUBSCRIBERS IDENTITY AN D GENUINENESS OF THE TRANSACTIONS WHEN ON THE OTHER HAND THE SHARE-SUBSCRIBERS HAVE PROVIDED THE AFORESAID DOCUMENTS BEFORE A.O WHICH HAS NOT BEEN FOUND FAULT WITH BY THE A.O. WE NOTE THAT SHARE SUBSCRIBERS HAVE PRODUCED EVIDENCE OF SOURCE FROM WHICH THEY COULD I NVEST IN THE ASSESSEES COMPANY AND HAD GIVEN TO THE A.O, THE SOURCES, PAN AND ADDRESS FROM WHICH THEY RECEIVED THE FUNDS TO INVEST IN ASSESSEES COMPANY. IN THE AFORESAID BACK GROUND AND TAKING INTO CONSIDERATION THE FACT THAT THE A.O HAD VISITED THE WEBSITES OF THE S HARE SUBSCRIBERS TO KNOW THEIR CREDITWORTHINESS, WE ARE OF THE OPINION THAT THE AO COULD NOT HAVE FOUND FAULT ONLY REGARDING CREDITWORTHINESS UNLESS HE CARRIED OUT TH E EXERCISE AS STIPULATED BY THE HONBLE 5 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 JURISDICTIONAL HIGH COURT IN THE CASE OF DATAWARE P VT. LTD. VS CIT 263 OF 2011 G.A. 2856 OF 2011 DECIDE ON 28.09.2011 WHEREIN THE HONBLE HI GH COURT HELD AS UNDER: BOTH THE COMMISSIONER OF INCOME TAX (APPEAL) AND T HE TRIBUNAL BELOW HAVE IN DETAILS CONSIDERED THE FACT THAT THE SHARE APPLICATION MONE Y WAS PAID BY ACCOUNT PAYEE CHEQUE, THE CREDITOR APPEARED BEFORE THE ASSESSING OFFICER DISC LOSED ITS PAN NUMBER AND ALSO OTHER DETAILS OF THE ACCOUNTS BUT IN SPITE OF THAT THE AS SESSING OFFICER DID NOT ENQUIRE FURTHER FROM THE ASSESSING OFFICER OF THE CREDITOR THAT INSTEAD, HIMSELF PROCEEDED TO CONSIDER THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR AND OPINED THAT HE HAD SOME DOUBT ABOUT THE GENUINENESS OF SUCH ACCOUNT. IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSIN G OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFTER GETTING TH E PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE AS SESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINE NESS' OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFI CER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSESSING OFFICER HIMSELF COULD NO T ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMI TTED BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OFFICER OF THE ASS ESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND THE GENUINENE SS' OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX (A PPEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH ARE REQUIRED TO B E FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIND NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AUTHORITIES. THE APPEAL IS THUS DEVOID OF ANY SUBSTANCE AND IS S UMMARILY DISMISSED. 7. WE NOTE THAT IN THE INSTANT CASE THE AO HIMSELF HAS ISSUED 133(6) NOTICES TO THE SHARE SUBSCRIBING COMPANIES TO VERITY THEIR IDENTITY, CRE DITWORTHINESS AND GENUINENESS OF THEIR TRANSACTIONS WITH ASSESSEE COMPANY AND THOSE COMPAN IES PURSUANT TO THE NOTICE OF THE AO HAD CONFIRMED THE INVESTMENT BY THE ASSESSEE COMPAN Y. THE AO ACKNOWLEDGES IN THE ASSESSMENT ORDER THAT THOSE COMPANIES HAVE PROVIDED THEIR PAN DETAILS, THEIR AUDITED BALANCE SHEET, THEIR BANK STATEMENT, RETURN OF INCO ME, ETC. AND EVEN THE STATEMENT OF THE DIRECTOR OF THE ASSESSEE COMPANY HAS BEEN RECORDED BY THE ASSESSING OFFICER AT PAGE 7 & 8 OF THE ASSESSMENT ORDER. IN THIS BACKDROP, THE LD. CIT(A) TAKING NOTE OF THE HONBLE JURISDICTIONAL HIGH COURT ORDER IN DATAWARE PVT. LT D.(SUPRA) OPINED THAT THE AO ERRED IN FINDING FAULT WITH THE CREDITWORTHINESS OF THE SHAR E SUBSCRIBERS WITHOUT ENQUIRING FROM THEIR RESPECTIVE AOS ABOUT CREDITWORTHINESS [AO OF THE S HARE SUBSCRIBERS WHEN PAN, ITR,ADDRESS WAS GIVEN TO ASSESSEE]. IN SUCH A SCENA RIO, THE LD. CIT(A) TAKING INTO CONSIDERATION ALL THE DOCUMENTS LIKE CONFIRMATION O F INVESTMENT, AUDITED BALANCE SHEET, ITR, 6 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 PAN, DETAILS OF SOURCE OF FUND ETC. ACCEPTED THE CL AIM OF THE ASSESSEE WHICH IS INCONSONANCE WITH THE VIEW OF THE HONBLE HIGH COURT IN DATAWARE (SUPRA) WHICH CANNOT BE FOUND FAULT WITH. MOREOVER WE ALSO NOTE THAT AO IN THE ASSESSME NT ORDER HAS MADE AN ENDEAVOUR TO FIND OUT ABOUT THE CREDITWORTHINESS OF THE SHARE SUBSCRI BING COMPANIES. OUT OF THE NINE SHARE SUBSCRIBING COMPANIES, THE AO HAS ANALYSED FROM THE AUDITED ACCOUNTS OF THE INVESTOR COMPANIES AND HAS REPRODUCED IN THE ASSESSMENT ORDE R THE FINANCIALS OF ONLY ABOUT FOUR COMPANIES (THE REASON AS TO WHY HE HAS NOT DEALT WI TH OTHER FIVE COMPANIES IS NOT UNDERSTOOD AND HAS NOT GIVEN THEIR CAPITAL AND RESE RVES). IN THE SAID CIRCUMSTANCES, NO ADVERSE VIEW ABOUT THE FIVE COMPANIES CANNOT BE DRA WN WITHOUT ANY MATERIAL AGAINST THEM OR ORDER WILL BE PERVERSE. FROM THE ANALYSIS GIVEN BY AO AFTER LOOKING INTO THEIR FINANCIALS FROM WEB-SITE, WE NOTE THAT M/S. GIRI FINANCIAL SER VICES PVT. LTD. WHICH HAS INVESTED RS. 25 LACS IN THE ASSESSEE COMPANY HAD A SHARE CAPITAL OF RS. 1.29 CR. AND SHARE PREMIUM OF RS.39.72 CR. WHICH MEANS RS.41.01 CR. (REFER PAGE 4 OF AO). LIKEWISE, SHRI NARAYAN MERCANTILE PVT. LTD. HAD INVESTED RS.25 LACS IN ASS ESSEE COMPANY AND IT HAS SHARE CAPITAL OF RS.7.48 CR. AND SHARE PREMIUM OF RS.83.74 CR. O WN FUND (PAGE 4 AOS ORDER). WE NOTE THAT M/S. RANI SATI HOSIERY PVT. LTD. HAD INVESTED RS. 15 LACS IN ASSESSEE COMPANY AND IT HAD A SHARE CAPITAL OF RS.21.70 LACS AND SHARE PREM IUM OF RS.14.25 CR. OWN FUND (PAGE 4 OF AO). LIKEWISE, IN THE CASE OF M/S. NARAYAN MERCANT ILE PVT. LTD. HAD A SHARE CAPITAL OF RS.7.48 CR. AND SHARE PREMIUM OF RS.76.29 CR. (WRIT TEN AS FY 2012-13 AND IN FY 2010-11 SHARE CAPITAL OF RS.99.94 LACS) AND THIS COMPANY HA D INVESTED RS.25 LACS (PAGE 5 OF AO). IN THE CASE OF M/S. SHREE NARAYAN MERCANTILE PVT. LTD. THE AO ALSO HAS GONE INTO THE SOURCE OF SOURCE WHICH PROVIDED RS. 25 LACS TO SHRI NARAYAN M ERCANTILE PVT. LTD. WHICH IS SHOWN FROM M/S. ORIGINAL TRADELINK PVT. LTD, WHICH HAD SH ARE CAPITAL OF RS.2.76 CR. AND PREMIUM OF RS.24.96 CR. THEREFORE, FROM THE FINANCIALS, IT IS SEEN THAT FOUR SHARE SUBSCRIBING COMPANIES HAD OWN FUNDS IN CRORES OF RUPEES AND IN VESTMENT WAS ONLY LAKHS IN RUPEES WHICH GOES ON TO SHOW THAT THEY HAD ENOUGH CREDITWO RTHINESS FOR INVESTMENT IN ASSESSEE COMPANIES. IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT AGREE WITH THE AO THAT THE SHARE SUBSCRIBING COMPAN IES ARE NOT CREDITWORTHY. THEREFORE, WE CONCUR WITH THE ACTION OF THE LD. CIT(A) THAT IN TH E LIGHT OF ALL THE DOCUMENTS FILED BEFORE THE AO IF HE STILL NURSED ANY DOUBT ABOUT THE CREDI TWORTHINESS OF THE SHARE SUBSCRIBING COMPANIES AND WHEN THE SHARES SUBSCRIBING COMPANIES HAD GIVEN THEIR PAN AND ITA DETAILS, THE AO OUGHT TO HAVE ENQUIRED FROM THE AO S OF THE RESPECTIVE SHARE SUBSCRIBERS 7 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 AND THEN ONLY IF THERE IS ANY ADVERSE MATERIAL RECE IVED BACK FROM THOSE AOS OF THE SHARE SUBSCRIBING COMPANIES, THEN ONLY THE AO OF THE ASSE SSEE COMPANY COULD HAVE DRAW ANY ADVERSE INFERENCE AGAINST THE CREDITWORTHINESS OF T HE SHARE SUBSCRIBING COMPANIES. 8. SO TO SUM UP WE NOTE THAT IN A CASE OF THIS NATU RE, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE THEN THERE IS A DUTY CASTE D UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CREDIT FOUND IN HIS BOOKS. IN THE INS TANT CASE, THE CREDIT IS IN THE FORM OF RECEIPT OF SHARE CAPITAL WITH PREMIUM FROM SHARE AP PLICANTS. THE NATURE OF RECEIPT TOWARDS SHARE CAPITAL IS SEEN FROM THE ENTRIES PASSED IN TH E RESPECTIVE BALANCE SHEETS OF THE COMPANIES AS SHARE CAPITAL AND INVESTMENTS. IN RES PECT OF SOURCE OF CREDIT, THE ASSESSEE HAS TO PROVE THE THREE NECESSARY INGREDIENTS I.E. IDENT ITY OF SHARE APPLICANTS, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF SHARE APPLICAN TS. FOR PROVING THE IDENTITY OF SHARE APPLICANTS, THE ASSESSEE FURNISHED THE NAME, ADDRES S, PAN OF SHARE APPLICANTS TOGETHER WITH THE COPIES OF BALANCE SHEETS AND INCOME TAX RETURNS . WITH REGARD TO THE CREDITWORTHINESS OF SHARE APPLICANTS, AS WE NOTED SUPRA, THESE COMPANIE S ARE HAVING CAPITAL IN SEVERAL CRORES OF RUPEES AND THE INVESTMENT MADE IN THE APPELLANT COM PANY IS ONLY A SMALL PART OF THEIR CAPITAL. THESE TRANSACTIONS ARE ALSO DULY REFLECTED IN THE BALANCE SHEETS OF THE SHARE APPLICANTS, SO CREDITWORTHINESS IS PROVED. EVEN IF THERE WAS ANY DOUBT IF ANY REGARDING THE CREDITWORTHINESS OF THE SHARE APPLICANTS WAS STILL SUBSISTING, THEN AO SHOULD HAVE MADE ENQUIRIES FROM THE AO OF THE SHARE SUBSCRIBERS AS H ELD BY HONBLE JURISDICTIONAL HIGH COURT IN CIT VS DATAWARE (SUPRA) WHICH HAS NOT BEEN DONE, SO NO ADVERSE VIEW COULD HAVE BEEN DRAWN. THIRD INGREDIENT IS GENUINENESS OF THE TRANSACTIONS, FOR WHICH WE NOTE THAT THE MONIES HAVE BEEN DIRECTLY PAID TO THE ASSESSEE COMP ANY BY ACCOUNT PAYEE CHEQUES OUT OF SUFFICIENT BANK BALANCES AVAILABLE IN THEIR BANK AC COUNTS ON BEHALF OF THE SHARE APPLICANTS. IT WILL BE EVIDENT FROM THE PAPER BOOK THAT THE APPELL ANT HAS EVEN DEMONSTRATED THE SOURCE OF MONEY DEPOSITED INTO THEIR BANK ACCOUNTS WHICH IN T URN HAS BEEN USED BY THEM TO SUBSCRIBE TO THE ASSESSEE COMPANY AS SHARE APPLICATION. HENCE THE SOURCE OF SOURCE OF SOURCE IS PROVED BY THE ASSESSEE IN THE INSTANT CASE THOUGH T HE SAME IS NOT REQUIRED TO BE DONE BY THE ASSESSEE AS PER LAW AS IT STOOD/ APPLICABLE IN THIS ASSESSMENT YEAR. THE SHARE APPLICANTS HAVE CONFIRMED THE SHARE APPLICATION IN RESPONSE TO THE NOTICE U/S 133(6) OF THE ACT AND HAVE ALSO CONFIRMED THE PAYMENTS WHICH ARE DULY CORROBORATED WITH THEIR RESPECTIVE BANK STATEMENTS AND ALL THE PAYMENTS ARE BY ACCOUNT PAYEE CHEQUES. 8 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 9. WE ALSO NOTE THAT RECENTLY THE ITAT KOLKATA IN SEVERAL CASES HAS DELETED THE ADDITION ON ACCOUNT OF SHARE APPLICATION IN SIMILAR CIRCUMST ANCES. THE RELEVANT PORTION OF THE DECISIONS ARE AS FOLLOWS: (A) THE LD ITAT KOLKATA. IN DC IT VS GLOBAL MERCANT ILES PVT.LTD IN ITA NO. 1669/KOL/2009 DATED 13-01-2016. IN THIS THE DECISIO N THE LD. TRIBUNAL HELD AS FOLLOWS: 3.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BOOK FILED BY T HE ASSESSEE. THE FACTS STATED HEREINABOVE REMAIN UNDISPUTED ARE NOT REITERATED HE REIN FOR THE SAKE OF BREVITY. WE FIND THAT THE ASSESSEE HAD GIVEN THE COMPLETE DETAI LS ABOUT THE SHARE APPLICANTS CLEARLY ESTABLISHING THEIR IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF TRANSACTION PROVED BEYOND DOUBT AND HAD DULY DISCHARGED ITS ONU S IN FULL. NOTHING PREVENTED THE LEARNED AO TO MAKE ENQUIRIES FROM THE ASSESSING OFF ICERS OF THE CONCERNED SHARE APPLICANTS FOR WHICH EVERY DETAILS WERE VERY MUCH M ADE AVAILABLE TO HIM BY THE ASSESSEE. WE FIND THAT THE RELIANCE PLACED BY THE L EARNED LD. CIT(1) ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS LOV ELY EXPORTS (P) UD REPORTED IN (2008) 216 CTR 195 (SC) IS VERY WELL FOUNDED, WHERE IN, IT HAS BEEN VERY CLEARLY HELD THAT THE ONLY OBLIGATION OF THE COMPANY RECEIVING T HE SHARE APPLICATION MONEY IS TO PROVE THE EXISTENCE OF THE SHAREHOLDERS AND FOR WHI CH THE ASSESSEE HAD DISCHARGED THE ONUS OF PROVING THEIR EXISTENCE AND ALSO THE SOURCE OF SHARE APPLICATION MONEY RECEIVED. 3.4. 1. WE ALSO FIND THAT THE IMPUGNED ISSUE IS ALS O COVERED BY THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS ROSEBERRY MERCANTILE (P) LTD IN GA NO. 3296 OF 2010 ITAT NO. 241 OF 2010 DATED 10.1.2011, WHEREIN THE- QUESTIONS RAISED BEFORE THEIR LORDSHIPS AND DECISION RENDERED THEREO N IS AS UNDER:- 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTE RED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTED MONEY AND THE LD. CIT(A) OUGHT TO HAVE HELD THAT TH E ASSESSEE HAD NOT ESTABLISHED THE GENUINENESS OF THE TRANSACTION. ' IT A NO. 1669/KOI/2009-C-AM M/S. GLOBAL MERCANTILES PVT. LTD 11 HELD AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND A FTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CASES OF CIT VS M/S LOVELV EXPORTS PVT LTD, WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISION IN FAVOUR OF THE ASSESSEE AN D THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEAL IS DEVOI D OF ANY SUBSTANCE AND IS DISMISSED. 3.4.2. IN VIEW OF THE AFORESAID FINDINGS AND RESPEC TFULLY FOLLOWING THE DECISION OF THE APEX COURT (SUPRA) AND JURISDICTIONAL HIGH COURT (S UPRA) , WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND ACCORDINGLY, THE GR OUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 4. THE LAST GROUND TO BE DECIDED IN THIS APPEAL OF THE REVENUE IS AS TO WHETHER THE LEARNED CIT(A) IS JUSTIFIED IN DELETING THE ADDITIO N U/S 68 OF THE ACT MADE IN RESPECT OF ALLOTMENT OF SHARES TO 20 INDIVIDUALS FOR AN AMO UNT OF RS.57,00,000/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. 1. THE BRIEF FACT OF THIS ISSUE IS THAT THE ASSE SSEE HAD RECEIVED SHARE APPLICATION MONIES FROM 20 INDIVIDUALS IN THE EARLIER YEAR WHIC H WERE KEPT IN SHARE APPLICATION 9 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 MONEY ACCOUNT. DURING THE ASST YEAR UNDER APPEAL, T HE ASSESSEE ALLOTTED SHARES TO THESE 20 INDIVIDUALS OUT OF TRANSFERRING THE MONIES FROM SHARE APPLICATION MONEY ACCOUNT TO SHARE CAPITAL ACCOUNT. THE DETAILS OF 20 INDIVIDUALS ARE REFLECTED IN PAGE 6 & 7 OF THE LEARNED CIT(A) ORDER. THE LEARNED AO ASK ED THE ASSESSEE TO PRODUCE THE SHAREHOLDERS BEFORE HIM. HE FOUND THAT THE ASSESSEE DID NOT DO SO BUT FURNISHED COPIES OF PAY ORDERS USED FOR PAYMENTS TO THE ASSES SEE COMPANY AND ALSO FURNISHED INCOME TAX PARTICULARS AND BALANCE SHEETS OF ALL TH E SHAREHOLDERS. THE LEARNED AO ON ANALYZING ALL THE BALANCE SHEETS OBSERVED THAT THE SHAREHOLDERS HAVE PALTRY INCOME AND SMALL SAVINGS AND NONE OF THEM HAVE ANY BANK AC COUNT AND HUGE CASH BALANCES WERE SHOWN IN THEIR HANDS OUT OF WHICH PAY ORDERS W ERE OBTAINED. BASED ON THIS, THE LEARNED AO CONCLUDED THAT THESE SHAREHOLDERS DO NOT HAVE CREDITWORTHINESS TO INVEST IN THE ASSESSEE COMPANY AND BROUGHT THE ENTIRE SUM OF RS. 57,00,000/- TO TAX AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4.2. ON FIRST APPEAL, THE LEARNED CIT(A) OBSERVED T HAT ENTIRE SHARE APPLICATION MONIES OF RS. 57,00,000/- WE RECEIVED DURING THE PR EVIOUS YEAR 2004-05 RELEVANT TO ASST YEAR 2005-06 FROM 20 PERSONS AND THE SHARES WE RE ALLOTTED TO THEM DURING THE ASST YEAR UNDER APPEAL. HE OBSERVED THAT THE ASSESS EE HAD FURNISHED DETAILS OF THE SHARE APPLICANTS GIVING THE DATE WISE RECEIPTS, MOD E OF PAYMENT, AMOUNT, NAME, ADDRESS, INCOME TAX RETURNS, PA NO. OF SHARE APPLIC ANTS ALONG WITH THEIR BALANCE SHEET. THE LEARNED CITA ALSO OBSERVED THAT THE ASSE SSEE IN ITS REPLY TO SHOW CAUSE NOTICE BEFORE THE LEARNED AO HAD REQUESTED HIM TO U SE HIS POWER AND AUTHORITY FOR THE PHYSICAL APPEARANCE OF THE SHAREHOLDERS WHICH W AS NOT EXERCISED BY THE LEARNED AO. INSTEAD THE LEARNED AO CONTINUED TO INSIST ON T HE ASSESSEE TO PRODUCE THE SHAREHOLDERS BEFORE HIM. HE ULTIMATELY CONCLUDED TH AT THE ASSESSEE HAD DULY DISCHARGED ITS ONUS OF PROVIDING COMPLETE DETAILS O F THE SHAREHOLDERS AND IN ANY CASE, NO ADDITION COULD BE MADE U/S 68 OF THE ACT IN THE ASST YEAR UNDER APPEAL AS NO SHARE APPLICATION MONIES WERE RECEIVED DURING THE ASST YE AR UNDER APPEAL. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US BY FILING THE FOLLOW ING GROUND:- 'THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE U/S 68 IN RESPECT OF THE ALLOTMENT OF SHARES TO 20 NUMBERS OF INDIVIDUAL INVESTORS FOR AN AMOUNT OF RS . 57 LAKHS, WHERE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINES S OF THE INVESTORS WERE NOT ESTABLISHED. 4.3. THE LEARNED DR PRAYED FOR ADMISSION OF THE ADD ITIONAL GROUND RAISED BEFORE US AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED A O. IN RESPONSE TO THIS, THE LEARNED AR FAIRLY CONCEDED TO ADMISSION OF THIS ADD ITIONAL GROUND AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). 4.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BOOK FILED BY T HE ASSESSEE. WE FIND THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE SEPARATELY BEFORE US VIDE ITS COVERING LETTER DATED 9. 12.2011 IS ADMITTED AS IT APPEARS TO BE A GENUINE AND BONAFIDE ERROR OF OMISSION ON THE PART OF THE REVENUE FROM NOT RAISIN G THIS GROUND IN THE ORIGINAL GROUNDS OF APPEAL FILED ALONG WITH THE MEMORANDUM O F APPEAL. MOREOVER, IT DOES NOT REQUIRE ANY FRESH EXAMINATION OF FACTS. HENCE THE S AME IS ADMITTED HEREIN FOR THE SAKE OF ADJUDICATION. 4.4. 1. WE FIND FROM THE DETAILS AVAILABLE ON RECOR D THAT THE SHARE APPLICATION MONIES FROM 20 INDIVIDUALS IN THE SUM OF RS.57,00,000/- HA S BEEN RECEIVED BY THE ASSESSEE DURING THE FINANCIAL YEAR 2004-05 RELEVANT TO ASST YEAR 2005-06 AND ONLY THE SHARES WERE ALLOTTED TO THEM DURING THE ASST YEAR UNDER AP PEAL. ADMITTEDLY NO MONIES WERE RECEIVED DURING THE ASST YEAR UNDER APPEAL AND HENC E THERE IS NO SCOPE FOR INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. HENCE WE H OLD THAT THE ORDER PASSED BY THE 10 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 LEARNED CITA IN THIS REGARD DOES NOT REQUIRE ANY IN TERFERENCE. ACCORDINGLY THE GROUND NO. 3 RAISED BY THE REVENUE IS DISMISSED. (B) THE ITAT KOLKATA IN R.B HORTICULTURE & ANIMAL PROJECTS CO. LTD, ITA NO. 632/KOLL2011 DATED 13-01-2016. IN THIS THE DECISION THE LD. TRIBUNAL HELD AS FOLLOWS: 6. WE HAVE HEARD THE LEARNED DR AND WHEN THE CASE WAS CALLED ON FOR HEARING , NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, WE FIND FROM THE FILE THAT THE ASSESSEE HAD FILED A DETAILED PAPER BOOK AND WRITTEN SUBMISSIONS. HENCE THE CASE IS DISPOSED OFF BASED ON THE ARGUMENTS OF THE LEARNED DR AND WRITTEN SUBMISSIONS AND PAPER BOOK ALREADY AVAILABLE ON RECORD. THE FACTS STATED IN THE LEARNED CIT(A) WERE NOT CONTROVERTED BY THE LEARNED DR BEFORE US. WE FIND THAT THE ASSESSEE HAD GIVEN THE COMPLETE DETAILS ABOUT THE SHARE APPLICANTS CLEARLY ESTABLISHING THEIR IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF TRANSACTION PROVED BEYOND DOUBT AND HAD DULY DISCHARGED ITS ONUS IN FU LL. NOTHING PREVENTED THE LEARNED AO TO MAKE ENQUIRIES FROM THE ASSESSING OFFICERS OF THE C ONCERNED SHARE APPLICANTS FOR WHICH EVERY DETAILS WERE VERY MUCH MADE AVAILABLE TO HIM BY THE ASSESSEE. WE FIND THAT THE RELIANCE PLACED BY THE LEARNED CITA ON THE DECISION OF THE H ON'BLE APEX COURT IN THE CASE OF CIT VS LOVELV EXPORTS (P) LTD REPORTED IN (2008) 216 CTR 1 95 (SC) IS VERY WELL FOUNDED, WHEREIN, IT HAS BEEN VERY CLEARLY HELD THAT THE ONLY OBLIGATION OF THE COMPANY RECEIVING THE SHARE APPLICATION MONEY IS TO PROVE THE EXISTENCE OF THE SHAREHOLDERS AND FOR WHICH THE ASSESSEE HAD DISCHARGED THE ONUS OF PROVING THEIR EXISTENCE AND ALSO THE SOURCE OF SHARE APPLICATION MONEY RECEIVED. 6. 1. WE ALSO FIND THAT THE IMPUGNED ISSUE IS ALSO COVERED BY THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS ROSEBERRV MERCANTI LE (P) LTD IN GA NO. 3296 OF 2010 ITAT NO. 241 OF 2010 DATED 10.1.2011, WHEREIN THE QUESTI ONS RAISED BEFORE THEIR LORDSHIPS AND DECISION RENDERED THEREON IS AS UNDER:- - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTERED INT O BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTE D MONEY AND THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSEE HAD NOT ESTABL ISHED THE GENUINENESS OF THE TRANSACTION.' HELD AFTER HEARING THE LEARNED COUNSE L FOR THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CA SES OF CIT VS M/S LOVELY EXPORTS PVT LTD, WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISION IN FAVOU R OF THE ASSESSEE AND THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APP EAL. THE APPEAL IS DEVOID OF ANY SUBSTANCE AND IS DISMISSED. 6.2. WE FIND THAT THE ISSUE IS ALSO COVERED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS VALUE CAPITAL SERVICES P LTD REPORTE D IN (2008) 307 ITR 334 (DEL) , WHEREIN IT WAS HELD THAT: 'IN RESPECT OF AMOUNTS SHOWN AS RECEIVED BY THE ASS ESSEE TOWARDS SHARE APPLICATION MONEY FROM 33 PERSONS, THE ASSESSING OFFICER REQUIR ED THE ASSESSEE TO PRODUCE ALL THESE PERSONS. WHILE ACCEPTING THE EXPLANATION AND ITA NO. 632/KOI12011--C-AM M/S. R.B HORTICULTURE 6 & ANIMAL PROJ. CO. LTD THE STATEMENTS GIVEN BY THREE PERSONS THE ASSESSING OFFICER FOUND THAT THE RESPONSE FROM THE OTHERS WAS EITHER NOT AVAILABLE OR WAS INADEQUATE AND ADDED AN AMOUNT OF RS. 46 LAK HS PERTAINING TO 30 PERSONS TO THE INCOME OF THE ASSESSEE. THE COMMISSIONER (APPEALS) UPHELD THE DECISION OF T HE ASSESSING OFFICER. ON APPEAL, THE TRIBUNAL SET ASIDE THE ORDER OF THE COMMISSIONE R (APPEALS) AND DELETED THE ADDITIONS. ON FURTHER APPEAL: 11 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 HELD, DISMISSING THE APPEAL, THAT THE ADDITIONAL BU RDEN WAS ON THE DEPARTMENT TO SHOW THAT EVEN IF THE SHARE APPLICANTS DID NOT HAVE THE MEANS TO MAKE THE INVESTMENT, THE INVESTMENT MADE BY THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOM E OF THE ASSESSEE. NO SUBSTANTIAL QUESTION OF LAW AROSE. ' 6.3. WE FIND THAT THE ARGUMENT OF THE LEARNED DR TO SET ASIDE THIS ISSUE TO THE FILE OF THE LEARNED AO FOR VERIFICATION OF SHARE SUBSCRIBERS WO ULD NOT SERVE ANY PURPOSE AS THE RATIO DECIDED IN THE ABOVE CASES IS THAT IN ANY CASE, NO ADDITION COULD BE MADE IN THE HANDS OF THE RECIPIENT ASSESSEE. IN VIEW OF THE AFORESAID FINDIN GS AND RESPECTFULLY FOLLOWING THE DECISION OF THE APEX COURT (SUPRA), JURISDICTIONAL HIGH COURT ( SUPRA) AND DELHI HIGH COURT (SUPRA) , WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A ) AND ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. (C) THE ITAT KOLKATA IN ITA NO.1061/KO1/2012 IN T HE CASE OF ITO WD.3(2) KOL, VS. M/S. STEEL EMPORIUM LTD DATED 05-02-2016. IN THIS T HE DECISION THE LD. TRIBUNAL HELD AS FOLLOWS: 10. WE HAVE HEARD BOTH THE RIVAL PARTIES AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO. BE FORE US THE LD. AR SUBMITTED THAT THE ASSESSEE RAISED SHARE APPLICATION MONEY DURING THE YEAR FROM 25 APPLICANTS. THE AO WAS FURNISHED WITH THE COPY OF FORM 2 OF ALLOTMENT OF S HARES TO THE APPLICANTS AS FILED WITH THE REGISTRAR OF COMPANIES, WEST BENGAL. ON THE DATE OF RECEIPT OF SHARE APPLICATIONS FROM THE APPLICANTS, THEY FURNISHED THEIR ADDRESSES, WHICH W ERE RECORDED IN THE REGISTER OF MEMBERS. THE AO OBSERVED THAT AS PER ROC RECORDS THE ADDRESS ES OF THE NINE COMPANIES WERE DIFFERENT FROM THE ADDRESS AS PER FORM FILED WITH HIM. THE AO ISSUED NOTICES U/S.133(6) TO ALL THE COMPANIES AT THE ADDRESSES FURNISHED IN FORM 2 AS F ILED WITH HIM, WHICH WERE DULY SERVED AT THE GIVEN ADDRESSES. THE A0 ARGUED THAT THE LETTERS SHOULD NOT HAVE BEEN SERVED AT THE GIVEN ADDRESS BY THE ASSESSEE. HE SERVED A SHOW A CAUSE N OTICE DATED 09.12.2011 ASKING FOR THE EXPLANATION FROM THE ASSESSEE AS TO HOW THE NOTICES U/S. 133(6) COULD BE SERVED TO THESE NINE COMPANIES WHO HAD DIFFERENT ADDRESS AS PER ROC RECO RDS. THE AO WAS EXPLAINED VIDE LETTER DATED 20.12.2011 OF THE ASSESSEE THAT THOSE COMPANI ES HAD CHANGED THEIR ADDRESSES SINCE FILING OF FORM 2 WITH THE REGISTRAR. FURTHER, IT WA S NONE OF THE BUSINESS OF THE ASSESSEE TO QUESTION THE ADDRESSES OF THE APPLICANTS AS LONG AS THEY AFFIRM THE ADDRESS. THE APPLICANTS WERE DULY INCORPORATED BODIES UNDER THE COMPANIES A CT. 1956 SINCE LONG. THEY HAVE BEEN REGULARLY FILING THEIR RETURNS OF INCOME UNDER THE INCOME TAX ACT AND ARE BEING ASSESSED BY THE REVENUE SINCE LONG. SOME OF THEM ARE EVEN REGIS TERED AS NON-BANKING FINANCIAL COMPANIES WITH RESERVE BANK OF INDIA. THEY HAVE BE EN FILING RETURNS REGULARLY WITH REGISTRAR OF COMPANIES AND RBI SINCE LONG. THE LETTERS MIGHT HAVE BEEN RECEIVED AT THEIR OLD ADDRESSES BECAUSE IN CASE OF CHANGE IN THE ADDRESS, PEOPLE IN STRUCT THE INCUMBENTS AT OLD ADDRESSES NOT TO REFUSE THE RECEIPT OF LETTERS AND RECEIVE THE SA ME. JUST BECAUSE, A LETTER WAS RECEIVED AT THE OLD ADDRESS INSTEAD OF PRESENT ADDRESS, IT CANNOT B E SAID THAT THE IDENTITY OF THE APPLICANT HAS NOT BEEN VERIFIED. ALL OF THESE COMPANIES HAD DULY REPLIED TO NOTICE U/S. 133(6) AND CONFIRMED THE TRANSACTION WITH ALL THE EVIDENCES. THE AO HAS NOT RAISED ANY OBJECTION ON ANY OF THE INFORMATION FURNISHED BEFORE HIM. THE AO HAS NOT AS KED THE RESPECTIVE COMPANY APPLICANTS ALSO TO EXPLAIN THE ALLEGED DISCREPANCY IN THE ADDR ESS. THE AO HAS NOT BROUGHT ANY MATERIAL ON ACCOUNT OF RECORD TO DISBELIEF THE EVIDENCES FUR NISHED WITH HIM AND TREAT THE TRANSACTION AS NOT GENUINE. THE ASSESSEE SUBMITTED THE FOLLOWING M ATERIAL AT THE TIME OF ASSESSMENT. A) COPY OF SHARE APPLICATIONS FROM THE SHARE APPLIC ANTS (COPIES ENCLOSED) B) COPY OF FORM 2 FILED WITH REGISTRAR OF COMPANIES , WEST BENGAL (COPY ENCLOSED) 12 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 C) COPY OF FORM 18 ABOUT THE REGISTERED OFFICE OF T HE APPLICANTS FOR CHANGE OF ADDRESS SUBSEQUENT TO THE DATE OF ALLOTMENT, I.E. 31.03.200 9 (COPIES ENCLOSED) D) MEMBERS REGISTER E) SHARE APPLICATION & ALLOTMENT REGISTER F) COPY OF BOARD RESOLUTION. G) REPLIES FROM SHARE APPLICANTS TO THE NOTICE U/S. 133(6) ISSUED TO THEM BY THE AO SEEKING INFORMATION AND DOCUMENTS ABOUT THE SOURCES AND TO EXAMINE THEIR IDENTITY, GENUINENESS OF THE TRANSACTION AND THEIR CREDITWORTHINESS. (COPY E NCLOSED). H) COPY OF AUDITED ACCOUNTS. I) COPY OF BANK STATEMENTS. J) COPY OF INCOME TAX ACKNOWLEDGMENT OF RETURN FILE D FOR AY 2009- K) COPY OF PAN CARD. L) DETAILS OF SOURCES OF FUNDS. M) COPY OF COVERING LETTER FOR DELIVERY OF SHARES. N) COPY OF MASTER DATA AS PER MINISTRY OF COMPANY A FFAIRS RECORDS. O) COPY OF ANNUAL RETURN. P) COPY OF MEMORANDUM AND ARTICLES OF ASSOCIATION. FINALLY THE LD. AR RELIED ON THE ORDER OF THE LD. C IT(A 10. 1 FROM THE AFORESAID DISCUSSION WE FIND THAT THE AO HAS MADE THE ADDITION OF THE SH ARE APPLICATION MONEY BECAUSE ALL THE NINE COMPANIES WERE HAVING THE COMMON ADDRESS AND THE NO TICE SENT UNDER SECTION 133(6) WAS RECEIVED BY THE SINGLE PERSON. ACCORDINGLY THE AO O PINED THAT THE ASSESSEE HAS USED ITS UNACCOUNTED MONEY IN THE SHARE APPLICATION TRANSACT IONS. HOWEVER WE FIND THAT ALL THE MONEY RECEIVED IN THE FORM OF SHARE CAPITAL IS DULY SUPPO RTED WITH THE REQUISITE DOCUMENT AS DISCUSSED ABOVE. TO OUR MIND THE BASIS ON WHICH THE ADDITION WAS MADE BY THE AO IS NOT TENABLE. THE LD. DR ALSO COULD NOT BROUGHT ANYTHING ON RECORD TO CONTROVERT THE FINDINGS OF THE LD. CIT(A). IN VIEW OF ABOVE WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE ID. CIT(A). ACCORDINGLY THE GROUND RAISED BY REVENUE IS DISMISS ED. (D) THE ITAT KOLKATA IN ITO VS CYGNUS DEVELOPERS ( I) P LTD IN ITA NO. 282/KOL/2012 DATED 2.3.2016. IN THIS THE DECISION THE LD. TRIBUN AL HELD AS FOLLOWS: 6. ON APPEAL BY THE ASSESSEE THE CIT(A) DELETED TH E ADDITION MADE BY THE AO OBSERVING AS FOLLOWS '6) I HAVE CONSIDERED THE SUBMISSION OF THE APPELLA NT AND PERUSED THE ASSESSMENT ORDER. I HAVE ALSO GONE THROUGH THE DETAILS AND DOCUMENTS FI LED BY THE APPELLANT COMPANY IN THE COURSE OF ASSESSMENT: PROCEEDINGS VIDE LETTER DT. 3 -10-2007. ON CAREFUL CONSIDERATION OF THE FACTS AND IN LAW I AM OF THE OPINION THAT THE AO WA S NOT JUSTIFIED IN MAKING, THE ADDITION AGGREGATING TO RS.54,00,000/- U/S.68 OF THE ACT BEI NG THE AMOUNT OF SHARE APPLICATION MONEY BY HOLDING THAT THE APPELLANT COMPANY HAS FAILED TO PROVE THE IDENTITY, AND CREDITWORTHINESS OF THE CREDITORS AS WELL AS THE GENUINENESS OF TRANSAC TIONS. IT IS OBSERVED THAT ALL THE THREE SHARE 13 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 APPLICANT COMPANIES I.E. M/S. SHREE SHYAM TREXIM PV T. LTD., M/S NAVALCO COMMODITIES PVT. LTD. AND M/S. JEWELLOCK TREXIM PVT. LTD. HAD FILED THEIR CONFIRMATIONS WHEREIN EACH OF THEM CONFIRMED THAT THEY HAD APPLIED FOR SHARES OF THE A PPELLANT -COMPANY. ALL THE THREE COMPANIES PROVIDED- THE CHEQUE NUMBER, COPY OF BANK STATEMENT S AND THEIR PAN. IT IS OBSERVED THAT THESE COMPANIES ALSO FILED, COPIES OF THEIR RETURN OF INC OME AND FINANCIAL STATEMENTS FOR AS WELL AS COPY OF THEIR ASSESSMENT ORDER U/S. 143(3) OF THE I . T ACT FOR AY 2005-06. IN THE CASE OF M/S. JEWELLOCK TREXIM PVT. LTD. THE ASSESSMENT FOR AY 20 05-06 WAS COMPLETED BY THE ITO WARD 9(3), KOLKATA AND THE ASSESSMENTS IN THE CASE OF M/ S. NAVALCO COMMODITIES PVT. LTD. AND M/S. SHREE SHYAM TREXIM PVT. LTD. FOR A. Y.2005-06 AND A Y.2004-05 RESPECTIVELY WERE COMPLETED BY THE I TO, WARD 9(4), KOLKATA. UNDER THE CIRCUMST ANCES, I AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE SHARE APPLICA NT COMPANIES WERE NOT IN EXISTENCE. THE ASSESSMENT ORDERS WERE COMPLETED ON THE ADDRESS AS PROVIDED BY THE APPELLANT COMPANY IN THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS NOT KNOWN A S TO HOW THE AO'S INSPECTOR HAD REPORTED THAT THE AFORESAID COMPANIES WERE NOT IN EXISTENCE AT THE GIVEN ADDRESS. SINCE THE APPELLANT COMPANY HAD PROVIDED SUFFICIENT DOCUMENTARY EVIDENC ES IN SUPPORT OF ITS CLAIM OF RECEIPT OF SHARE APPLICATION MONEY, I AM OF THE OPINION THAT T HE NO ADDITION U/S.68 COULD BE MADE IN THE HANDS OF APPELLANT COMPANY. ON GOING THROUGH THE VA RIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT, IT IS OBSERVED THAT THE VIEW TAKEN AS ABOVE IS ALSO SUPPORTED BY THEM. IN VIEW OF ABOVE THE AO IS DIRECTED TO DELETE THE ADDI TION OF RS.54,00,000/ -. THE GROUND NOS. 2 AND 3 ARE ALLOWED, ' 7. AGGRIEVED BY THE ORDER OF CIT{A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED DR , WHO RELIED ON THE ORDER OF AO. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDE R OF CIT(A) AND FURTHER DREW OUR ATTENTION TO THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS RAJ KUMAR AGARWAL VIDE ITA NO. 179/2008, DATED 17. 11.2009 WHEREIN TH E HON 'BLE ALLAHABAD HIGH COURT TOOK A VIEW THAT NON PRODUCTION OF THE DIRECTOR OF A PUBLI C LIMITED COMPANY WHICH IS REGULARLY ASSESSED TO INCOME TAX HAVING PAN, ON THE GROUND TH AT THE IDENTITY OF THE INVESTOR IS NOT PROVED CANNOT BE SUSTAINED. ATTENTION WAS ALSO TO T HE SIMILAR RULING OF THE ITAT KOLKATA BENCH IN THE CASE OF ITO VS DEVINDER SINGH SHANT IN IT A NO.20BIKO112009 VIDE ORDER DATED 17.04.2009. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS., WE A RE OF THE VIEW THAT ORDER OF CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. IT MAY BE SEEN FROM THE GROUNDS OF APPEAL RAISED BY THE REVENUE THAT THE REVENUE DISPUTED ONLY THE PROOF OF IDENTITY OF THE SHAREHOLDER. IN THIS REGARD IT IS SEEN THAT FOR A Y.2004-05 SHREE SHYAM TREXIM PVT. LTD., WAS ASSESSED BY ITO, WARD- 9(4), KOLKATA AND THE ORDER OF ASSESSMENT U/S/143(3 ) DATED 25.01.2006 IS PLACED IN THE PAPER BOOK. SIMILARLY NAVALCO COMMODITIES PVT. LTD., WAS ASSESSED TO TAX U/S 143(3) FOR A Y.2005- 06 BY I TO, WARD- 9(4), KOLKATA BY ORDER DATED 20.0 3.2007. SIMILARLY JEWELLOCK TREXIM PVT. LTD WAS ASSESSED TO TAX FOR A Y.2005-06 BY THE VERY SAME ITO- WARD- 9(3), KOLKATA ASSESSING THE ASSESSEE. IN THE LIGHT OF THE ABOVE FACTUAL POS ITION WHICH IS NOT DISPUTED BY THE REVENUE, IT CANNOT BE SAID THAT THE IDENTITY OF THE SHARE APPLI CANTS REMAINED NOT PROVED BY THE ASSESSEE. THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT AS WELL AS ITA T KOLKATA BENCH ON WHICH RELIANCE WAS PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUPPORTS THE VIEW THAT FOR NON PRODUCTION OF DIRECTORS OF THE INVESTOR COMPANY FOR EXAMINATION BY THE AO IT CANNOT BE HELD THAT THE IDENTITY OF A LIMITED COMPANY HAS NOT BEEN ESTABLISHED. FOR THE REASONS GIVEN ABOVE WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE APPEA L OF THE REVENUE. ' 10. RELIANCE IN THIS REGARD IS ALSO PLACED ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS GANGESHWARI METAL (P) LTD (ITA NO. 5 97 OF 2012) DATED 21.01.2012. IN THIS CASE THE ASSESSEE HAD RECEIVED SHARE APPLICATION MO NEY OF RS.55.50 LACS DURING THE YEAR IN QUESTION. THE ASSESSEE FILED THE COMPLETE NAMES, AD DRESSES OF THE SHARE APPLICANTS, 14 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 CONFIRMATORY LETTERS FROM THEM, COPIES OF BANK STAT EMENTS OF BOTH THE COMPANY AS WELL AS THE SHARE APPLICANTS AND COPIES OF SHARE APPLICATIO N FORMS. IN SPITE OF THE AFORESAID DOCUMENTARY EVIDENCES THE AO HELD THE EXPLANATION T O BE UNACCEPTABLE AND TREATED THE SHARE APPLICATION AS UNEXPLAINED CASH CREDIT THEREB Y MAKING ADDITION UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961. ON APPEAL THE CIT(APPEALS ) DELETED THE AFORESAID ADDITION HOLDING THAT THE IDENTITY OF THE SHARE APPLICANTS S TOOD ESTABLISHED BEYOND DOUBT, ALL THE PAYMENTS WERE THROUGH ACCOUNT PAYEE CHEQUES AND THE SHARE APPLICANTS WERE REGULAR INCOME-TAX ASSESSEES. THE CIT(APPEALS) FURTHER HELD THAT THE REVENUE DID NOT BRING ANY EVIDENCE ON RECORD TO SUGGEST THAT THE SHARE APPLIC ATION HAD BEEN RECEIVED BY THE ASSESSEE FROM ITS OWN UNDISCLOSED SOURCES NOR ANY MATERIAL W AS BROUGHT ON RECORD TO SHOW THAT .THE APPLICANTS WERE BOGUS. THE REVENUE WAS NEITHER ABLE TO CONTROVERT THE DOCUMENTARY EVIDENCES FILED BY THE APPELLANT NOR PROVE THAT THE SHARE APPLICATION WERE INGENUINE OR THE APPLICANTS WERE NON-CREDITWORTHY. THE FINDINGS OF T HE CIT(APPEALS) WERE UPHELD BY THE INCOME-TAX APPELLATE TRIBUNAL. ON APPEAL TO THE HIG H COURT, THE REVENUE PLACED STRONG RELIANCE ON THE DECISION OF ANOTHER COORDINATE BENC H OF THE SAME COURT IN THE' CASE OF CIT VS NOVO PROMOTERS & FINLEASE (P) LTD (342 ITR 169). THE HIGH COURT HOWEVER HELD THAT THE AFORESAID JUDGMENT WAS DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. THE COURT OBSERVED THAT IN THAT JUDGMENT THE ASSESSING OFFICE R HAD BROUGHT ON RECORD ENOUGH CORROBORATIVE EVIDENCE TO SHOW THAT THE ASSESSEE HA D ROUTED UNACCOUNTED MONIES INTO ITS BOOKS THROUGH MEDIUM OF SHARE SUBSCRIPTION. THE SHA RE APPLICANTS HAD CONFESSED THAT THEY WERE 'ACCOMMODATION ENTRY PROVIDERS'. THE ASSESSING OFFICER IN THE LATTER CASE WAS ABLE TO PROVE WITH ENOUGH MATERIAL THAT THE SHARE SUBSCRIPT ION WAS A PRE-MEDITATED PLAN TO ROUTE UNACCOUNTED MONIES. IN THE PRESENT CASE HOWEVER THE DEPARTMENT WAS UNABLE TO BRING ANY MATERIAL WHATSOEVER SHOWS THAT SHARE APPLICATION WA S IN THE NATURE OF ACCOMMODATION ENTRIES. THE COURT OBSERVED THAT THE APPELLANT HAD FILED SUFFICIENT DOCUMENTARY EVIDENCES TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GENUINENESS OF THE TRANSACTION. THE AO HOWEVER CHOSE TO SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTED ALL THE EVIDENCE IN HIS POSSESSION AND THEN MERELY REJECT THE SAME WITHOUT CONDUCTING ANY INQUIRY OR VERIFICATION WHATSOEVER. THE COURT THUS HELD THAT THE DECISION OF CIT VS NOVO PROMOTERS & FINLEASE (P) LTD (342 ITR 169) WAS NOT APPLICABLE TO THE FACTS OF THE CASE. INSTEAD IT WAS HELD THAT THE ISSUE IN HANDS WAS ON THE LINES OF THE DECISION OF THE SUPREME 15 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (319 ITR 5). ACCORDINGLY THE ADDITION MADE UNDER SECTION 68 ON ACCOUNT OF SHARE APPLICATI ON WAS DELETED. 11. WE WOULD LIKE TO REPRODUCE THE HON'BLE HIGH CO URT ORDER IN CIT VS. GANGESHWARI METAL P.LTD. IN ITA NO. 597/2012 JUDGEMENT DATED 21 .1.2013, THE HON'BLE HIGH COURT AFTER CONSIDERING THE DECISIONS IN THE CASE OF NOVA PROMO TERS AND FINLEASE PVT. LTD. 342 ITR 169 AND JUDGEMENT IN THE CASE OF CIT VS. LOVELY EXPORTS 319 ITR (SAT 5)(5. C) HELD AS FOLLOWS:- AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES O F CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSING OFFICER CARRIES OUT THE EXERCISE WHIC H IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER 'SITS BACK WITH FOLDED HANDS' TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COMES FORWARD T O MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRESENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER AFTER NOTING THE FACTS, MERELY REJECTED THE SAME. THIS WO ULD BE APPARENT FROM THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER TO TH E FOLLOWING EFFECT:- ''INVESTIGATION MADE BY THE INVESTIGATION WING OF T HE DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRANSACTION OF ACCOMMOD ATION ENTRY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF RS.1, 11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THA T THERE IS NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS RECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WA S STATED THAT THE ACTUAL AMOUNT RECEIVED WAS RS.55,50,000/- AND NOT RS.1,11,50,000/ - AS MENTIONED IN THE NOTICE. THE ASSESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTION OF THE ASSESSEE IN RESPECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT RS.55,50,000/-. THE ASSESSEE HAS FURTHER TRIES T O EXPLAIN THE SOURCE OF THIS AMOUNT OF RS.55,50,000/- BY FURNISHING COPIES OF SHARE APP LICATION MONEY, BALANCE4 SHEET ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT TH E QUESTION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANA TION OF THE ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REM AINS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS HAS BEEN ARRIVED BY THE INVESTIGATI ON WING OF THE DEPARTMENT. AS SUCH ENTRIES OF RS.5~50/000/- RECEIVED BY THE ASSESSEE A RE TREATED AS AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED TO IT S INCOME. SINCE I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F ITS INCOME/ PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITIATED SEPARAT ELY. THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. ( SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVOUR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CLEARLY DISTINGUISHABLE AND FALL I N THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA). THER E WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISH ED ALL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. IN SUCH AN EVENTUALITY NO ADDITI ON CAN BE MADE UNDER SECTION 68 OF THE INCOME TAX ACT 1961. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBUNAL IS CORRECT IN LAW 12. THE CASE ON HAND CLEARLY FALLS IN THE CATEGORY WHERE THERE IS LACK OF ENQUIRY ON THE PART OF THE A. O. AS IN THE CASE OF GANJESHWARI MET ALS (SUPRA). B) IN THE CASE OF FINLEASE PVT LTD. 342 ITR 169 (SU PRA) IN ITA 232/2012 JUDGEMENT DT. 22.11.2012 AT PARA 6 TO 8/ IT WAS HELD AS FOLLO WS. 16 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 '6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE THE DISCUSSION BY THE COMMISSIONER OF INCOME TAX (APPEA LS) WOULD REVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED CO PIES ISSUED BY THE ROC IN RELATION TO THE SHARE APPLICATION AFFIDAVITS OF THE DIRECTOR S, FORM 2 FILED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APPLICANT FOR COMPA NY'S SHARES, CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE ASSESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF T HE INVESTIGATION REPORT AND THE STATEMENT OF MR. MAHES GARG. TO ELEVATE THE INFEREN CE WHICH CAN BE DRAWN ON THE BASIS OF READING OF SUCH MATERIAL INTO JUDICIAL CON CLUSIONS WOULD BE IMPROPER, MORE SO WHEN THE ASSESSEE PRODUCED MATERIAL. THE LEAST T HAT THE ASSESSING OFFICER OUGHT TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NEC ESSARY, INVOKING HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIREC TORS. NO EFFORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCLOSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSING O FFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAIN FA CTS AND THE STATEMENTS OF MR.MAHESH GARG THAT THE INCOME SOUGHT TO BE ADDED F ELL WITHIN THE DESCRIPTION OFS.68 OF THE INCOME TAX ACT 1961. HAVING REGARD TO THE EN TIRETY OF FACTS AND CIRCUMSTANCES, THE COURT IS SATISFIED THAT THE FINDING OF THE TRIB UNAL IN THIS CASE ACCORDS WITH THE RATIO OF THE DECISION OF THE SUPREME COURT IN LOVEL Y EXPORTS (SUPRA). THE DECISION IN THIS CASE IS BASED ON THE PECULIAR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENCE IN SUPPORT OF THE SHARE APPLICATION MONIES, IT IS OPEN TO THE ASSESSING OFF ICER TO EXAMINE IT AND REJECT IT ON TENABLE GROUNDS. IN CASE HE WISHES TO RELY ON THE R EPORT OF THE INVESTIGATION AUTHORITIES, SOME MEANINGFUL ENQUIRY OUGHT TO BE CO NDUCTED BY HIM TO ESTABLISH A LINK BETWEEN THE ASSESSEE AND THE ALLEGED HAWALA OPERATO RS, SUCH A LINK WAS SHOWN TO BE PRESENT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P ) LTD. (SUPRA) RELIED UPON BY THE REVENUE. WE ARE THEREFORE NOT TO BE UNDERSTOOD TO C ONVEY THAT IN ALL CASES OF SHARE CAPITAL ADDED UNDER SECTION THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTRACTED, I RRESPECTIVE OF THE FACTS, EVIDENCE AND MATERIAL. ' 13. IN THIS CASE ON HAND, THE ASSESSEE HAD DISCHAR GED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE APPLI CANTS, THEREAFTER THE ONUS SHIFTED TO AO TO DISPROVE THE DOCUMENTS FURNISHED BY ASSESSEE CAN NOT BE BRUSHED ASIDE BY THE AO TO DRAW ADVERSE VIEW CANNOT BE COUNTENANCED. IN THE ABSENCE OF ANY INVESTIGATION, MUCH LESS GATHERING OF EVIDENCE BY THE ASSESSING OFFICER, WE HOLD THAT AN ADDITION CANNOT BE SUSTAINED MERELY BASED ON INFERENCES DRAWN BY CIRCUMSTANCE. A PPLYING THE PROPOSITIONS LAID DOWN IN THESE CASE LAWS TO THE FACTS OF THIS CASE, WE ARE I NCLINED TO UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 14. TO SUM UP SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPLAIN T HE NATURE AND SOURCE SHALL BE ASSESSED AS ITS UNDISCLOSED INCOME. IN THE FACTS OF THE PRESENT CAS E, BOTH THE NATURE & SOURCE OF THE SHARE APPLICATION RECEIVED WAS FULLY EXPLAINED BY THE ASS ESSEE. THE ASSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GE NUINENESS OF THE SHARE APPLICANTS. THE 17 ITA NO.1036/KOL/2015 M/S. SAMAKSH INFRASTRUCTURE PVT. LTD.. AY- 2012-13 PAN DETAILS, BANK ACCOUNT STATEMENTS, AUDITED FINAN CIAL STATEMENTS AND INCOME TAX ACKNOWLEDGMENTS WERE PLACED ON AO'S RECORD. ACCORDI NGLY ALL THE THREE CONDITIONS AS REQUIRED U/S. 68 OF THE ACT I.E. THE IDENTITY, CRED ITWORTHINESS AND GENUINENESS OF THE TRANSACTION WAS PLACED BEFORE THE AO AND THE ONUS SHIFTED TO AO TO DISPROVE THE MATERIALS PLACED BEFORE HIM. WITHOUT DOING SO, THE ADDITION MADE BY THE AO IS BASED ON CONJECTURES AND SURMISES CANNOT BE JUSTIFIED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE, NO ADDITION WAS WARRANTED UNDER SECTION 68 O F THE ACT. THEREFORE, WE DO NOT WANT TO INTERFERE IN THE IMPUGNED ORDER OF LD. CIT(A) WHICH IS CONFIRMED AND CONSEQUENTLY THE APPEAL OF REVENUE IS DISMISSED. 15. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED ORDER IS PRONOUNCED IN THE OPEN COURT ON 27TH FE BRUARY, 2019 SD/- SD/- (DR. A. L. SAINI) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27TH FEBRUARY, 2019 BISWAJIT (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO, WARD-2(1), AAYAKAR BHAWAN, B WING, PARIBAHAN NAGAR, MATIGARA, SILIGURI, DARJEELING 734010. 2 RESPONDENT M/S. SAMAKSH INFRASTRUCTURE PVT. LTD., FLAT A3, SIDHI DHAM, JYOTI NAGAR, SILIGURI-734001. 3 . THE CIT(A), 4. 5. CIT , DR, / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR/H.O.O ITAT, KOLKATA