Wellman Wacoma Ltd, Kolkata V. JCIT, Circle - 8, Kolkata, Kolkata

ITA 1229/KOL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4996 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 23-08-2012
• Court: TRIBUNAL
• Department Lawyers: MD GHYAS UDDIN JCIT LD
• Assessee Lawyers: S M SURANA LD
• Keywords: Unexplained cash credit; Revision of order; Source of fund; Question of law
• Section: 143(3); 142(1); 68; 263

Judgement Text

ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, K OLKATA BEFORE : SHRI M. BALAGANESH, ACCOUNTANT MEMBER, AND SHRI S.S. VISHWANETHRA RAVI JUDICIAL MEMBER , ITA NO. 1229/KOL/2012 A.Y : 2009-10 M/S. WELLMAN WACOMA LTD VS. JCIT (OSD), CIRCLE-8 , KOLKATA PAN: AAACW2617C (APPELLANT) (RE SPONDENT) FOR THE APPELLANT/ASSESSEE: SHRI S.M SURANA, ADVOCATE, LD.AR FOR THE RESPONDENT/DEPARTMENT: M D. GHYAS UDDIN, JCIT, LD.SR.DR DATE OF HEARING: 31-03-2016 DATE OF PRONOUNCEMENT: 13 - 4 - 2016 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE OR DER OF THE LEARNED CIT(A), VIII, KOLKATA IN APPEAL NO. 148/CIT(A)-VIII/KOL/11-12 DA TED 27-07-2012 AGAINST THE ORDER OF ASSESSMENT FRAMED BY THE LEARNED AO FOR TH E ASST YEAR 2009-10 U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT). 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE COMPANY FROM SEVEN S HARE APPLICANTS IN THE SUM OF RS. 1,25,49,980/- COULD BE BROUGHT TO TAX IN THE FA CTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSE SSEE IS A PUBLIC LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE AND TRADING OF INDUSTRIAL COUPLINGS, SPARES, TELECOMMUNICATION AND TRANSMISSION LINE TOWERS AND PARTS. THE LEARNED AO OBSERVED THAT DURING THE ASSESSMENT YEAR UNDER APPE AL, THE ASSESSEE COMPANY ISSUED FRESH SHARES TO THE FOLLOWING PARTIES AT FACE VALUE OF RS 10 EACH PER SHARE :- ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 2 --------------------------------------------------- ------------------------------------------ SL.NO. NAME OF THE SHARE NO. OF SHARES TOTAL AMOUNT RECD. APPLICANT ISSUED INCLUDING PREMIU M (IN RS.) --------------------------------------------------- ----------------------------------------- 1 TRINTON VINIMOY PVT LTD 2,70,000 27,00,000/- 2 ANNUNODAY DEALCOM PVT LTD 2,70,000 27,00,000/- 3 DEVA MERCHANTS PVT LTD 93,748 9,37,480/- 4 ANKUR TIE-UP PVT LTD 70,000 7,00,000/- 5 ROSE VALLEY MERCHANTS PVT LTD 11,250 1,12,5 00/- 6 KUSHAL KHEMKA 11,995 1,19,950/- 7 NALANDA VANIJYA PVT LTD 2,70,000 27,00,000/- 8 SAFAL VYAPAR PVT LTD 2,70,000 27,00,000/- 9 SAROJ KABRA 28,000 2,80,000/- TOTAL :- 1,29,49,930/- THE LEARNED AO ACCEPTED THE IDENTITY AND CREDITWORT HINESS OF MR.KUSHAL KHEMKA AND SMT.SAROJ KABRA AND MADE NO ADDITION FOR THE AMOUNT S RECEIVED FROM THEM. IN RESPECT OF AMOUNTS RECEIVED FROM 7 CORPORATE ENTITIES, THE LEARNED AO DOUBTED THE CREDITWORTHINESS OF THE PARTIES. THE TOTAL SHARE CA PITAL RECEIVED FROM THESE SEVEN CORPORATE ENTITIES AMOUNTED TO RS. 1,25,49,980/-. THE ASSESSEE HAD DULY FURNISHED THE DOCUMENTS IN RESPECT OF ALL THE SEVEN SHARE APP LICANTS BEFORE THE LEARNED AO. THE LEARNED AO OBSERVED THAT ALL THE SEVEN APPLICAN T COMPANIES WERE HAVING PAID UP CAPITAL OF RS. 1,00,000/- AND HAVE MEAGER INCOME BU T HAVE INVESTED IN ASSESSEE COMPANYS SHARES BY TAKING MONEY FROM SOME OTHER CO MPANIES WHO HAS DIRECTLY GIVEN CHEQUES IN THE NAME OF THE ASSESSEE COMPANY ON BEHA LF OF APPLICANT COMPANIES. ACCORDING TO LEARNED AO, THE SHARE APPLICANTS HAVE NO CREDITWORTHINESS TO MAKE THE INVESTMENT. HE OBSERVED THAT IT IS NOT UNDERSTAND ABLE AS TO WHY OTHER COMPANY WOULD MAKE THE PAYMENT OF SHARE APPLICATION MONEY ON BEHA LF OF SUCH A SHARE APPLICANT HAVING ALMOST NO NET WORTH AND HAVING NO BUSINESS A CTIVITY OR HAVING NO BUSINESS CONNECTION WITH THE PAYER COMPANY. HE OBSERVED THA T THE ASSESSEE HAD NOT FURNISHED ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 3 THE COPY OF SHARE APPLICATIONS OR SHARE APPLICANTS BANK ACCOUNT DETAILS. BASED ON THE ABOVE OBSERVATIONS, HE CONCLUDED THAT THE SEVEN SH ARE APPLICANTS DO NOT HAVE SUFFICIENT CREDITWORTHINESS TO MAKE INVESTMENT IN S HARES OF ASSESSEE COMPANY . HE OBSERVED THAT NONE OF THEM HAD CARRIED ON ANY SIGNI FICANT BUSINESS ACTIVITY AND NONE OF THEM HAVE ANY BUSINESS CONNECTION WITH THE PAYER OF THE MONEY ON THEIR BEHALF. ACCORDINGLY, HE CONCLUDED THAT PREPONDERANCE OF PRO BABILITY WOULD SUGGEST THAT ALL THESE SHARE APPLICANTS ARE MERE PAPER COMPANIES USE D BY THE ASSESSEE AS CONDUITS TO BRING ITS OWN UNDISCLOSED MONEY IN THE FORM OF SHAR E CAPITAL. ACCORDINGLY, HE BROUGHT THE ENTIRE SHARE CAPITAL RECEIVED FROM SEVEN CORPOR ATES TO THE TUNE OF RS. 1,25,49,980/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4. ON FIRST APPEAL, THE ASSESSEE REITERATED THE SU BMISSIONS MADE BEFORE THE LEARNED AO AND PRODUCED THE SAME DOCUMENTS AND EVIDENCES TH AT WERE PRODUCED BEFORE THE LEARNED AO. THE LEARNED CIT(A) HELD THAT IT IS NOT THE CASE OF THE ASSESSEE THAT M/S PREMIUM AGRO EXPORTS LTD AND M/S AGARPARA JUTE MILL S LTD HAVE ISSUED THE CHEQUES TO SEVEN SHARE APPLICANTS AND THE SEVEN SHARE APPLI CANTS IN TURN HAD ISSUED THEIR RESPECTIVE CHEQUES TO THE ASSESSEE COMPANY TOWARDS INVESTMENT IN SHARES. BASED ON THIS OBSERVATION, HE INVOKED THE PROVISIONS OF SEC TION 3 OF BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988 AND HELD THAT THE ASSESSEE HAD VIOLATED THE SAID PROVISIONS AND UPHELD THE ADDITION MADE BY THE LEARNED AO BY REITE RATING THE OBSERVATIONS OF THE LEARNED AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BE FORE US ON THE FOLLOWING GROUNDS:- 1) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 1,25,49,980/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH CRE DIT U/S 68 OF THE INCOME TAX ACT WHEN IN FACT, SUCH SUM REPRESENTS SH ARE APPLICATION MONEY RECEIVED FROM SEVEN SHARE APPLICANT COMPANIES . 2) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE ACTION OF THE LD. CIT(A) IN CONFIRMING RS. 1,25,49,980/- AS APPELLANT'S UNDISCLOSED INCOME U/S 68 OF THE INCOME TAX ACT IS HIGHLY ARBIT RARY, UNJUSTIFIED AND UNWARRANTED. ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 4 3) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE TREATMEN T OF SHARE APPLICATION MONEY BY THE LD. A.D. AS INCOME OF THE APPELLANT BY WRONGLY INVOKING SECTION 68 OF THE INCOME TAX ACT BASED ON CONJECTUR ES, SUSPICION AND SURMISES. 4) THAT THE LD. CIT(A) ERRED IN HOLDING THAT THE TR ANSACTIONS OF SHARE APPLICATION ARE IN VIOLATION OF THE PROVISION OF TH E BENAMI TRANSACTION (PROHIBITION) ACT, 1988. 5) THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 5. THE LEARNED AR ARGUED THAT THE ENTIRE DETAILS F ROM WHOM THE MONIES WERE RECEIVED THROUGH SHARE CAPITAL WERE FURNISHED BY TH E ASSESSEE BEFORE THE LOWER AUTHORITIES AS FOLLOWS :- A) AUDITED BALANCE SHEETS OF SEVEN SHARE APPLICANT COM PANIES AS ON 31.3.2009. B) IT RETURN ACKNOWLEDGEMENTS FOR ASST YEAR 2009-10 OF SEVEN SHARE APPLICANTS. C) CONFIRMATION FROM THE SHARE APPLICANTS EXPLAINING T HE FACT THAT THE CHEQUE WAS ISSUED BY M/S PREMIUM AGRO EXPORTS LTD OR AGARPALA JUTE MILLS LTD , AS THE CASE MAY BE, ON THEIR BEHALF, TO WELLMAN WACOMA LI MITED TOWARDS PURCHASE OF SHARES. D) RELEVANT PAGE OF BANK STATEMENTS OF M/S PREMIUM AGR O EXPORTS LTD AND M/S AGARPALA JUTE MILLS LTD. E) CONFIRMATION FROM M/S PREMIUM AGRO EXPORTS LTD AND M/S AGARPALA JUTE MILLS LTD EXPLAINING THE FACT THAT THEY HAD ADVANCE D MONIES TO WELLMAN WACOMA LIMITED (ASSESSEE HEREIN) TOWARDS PURCHASE O F SHARES ON BEHALF OF THE SEVEN SHARE APPLICANT COMPANIES, AS THE CASE MAY BE . APART FROM THIS, PURSUANT TO THE DETAILS CALLED FOR BY THE BENCH DURING THE COURSE OF PREVIOUS HEARINGS, HE HAD FURNISHED A SUPPLEMENTARY PAPER BOOK AND ALSO STATED THAT ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 5 THE SAME HAS BEEN DULY CERTIFIED AS SUCH AND REFERR ED TO THE RELEVANT PAGES OF THE PAPER BOOK. HE ARGUED THAT THE ASSESSEE HAD PROVED THE SOURCE OF SOURCE OF SOURCE IN THE INSTANT CASE. HE ARGUED THAT SOURCES OF MONEY CANN OT BE TERMED AS ASSESSEES OWN MONEY INTRODUCED IN THE GARB OF SHARE APPLICATION B ECAUSE ALL SUCH ISSUER OF CHEQUES ARE MANUFACTURING COMPANIES HAVING HIGH VOLUME OF B USINESS AND TURNOVER AND THERE IS NO IOTA OF EVIDENCE OR LEAD THAT WOULD SUGGEST T HAT ASSESSEES UNDISCLOSED INCOME CAME THROUGH BANKING ACCOUNT OF SUCH ISSUER OF CHEQ UES. HE ARGUED THAT THE DOUBTS RAISED BY THE LEARNED AO AS TO NO CREDITWORTHINESS ARE NOTHING BUT HIS SURMISES AND CONJECTURES. THE SOURCES OF FUND ARE FULLY IDENTIF IED. THE SEVEN SHARE APPLICANT COMPANYS PAID UP CAPITAL ALONE CANNOT BE THE CRITE RION FOR JUDGING THE CREDITWORTHINESS. THE AMOUNT RECEIVED FROM TWO JU TE COMPANIES WERE DULY REFLECTED AS CURRENT LIABILITIES IN THE SEVEN SHARE APPLICANT S AUDITED ANNUAL ACCOUNTS. THE LEARNED AR ALSO REFERRED TO THE RELEVANT PAGE OF TH E PAPER BOOK CONTAINING THE LIST OF DIRECTORS IN ALL THE SEVEN SHARE APPLICANT COMPANIE S AND THE LIST OF DIRECTORS IN TWO JUTE MILL COMPANIES TO PROVE THE FACT THAT JUTE MILL COM PANIES AND SEVEN SHARE APPLICANT COMPANIES ARE HAVING COMMON DIRECTORS. HENCE HE AR GUED THAT THERE IS NOTHING WRONG FOR THE JUTE MILL COMPANY TO PAY THE MONIES DIRECTL Y TO THE ASSESSEE COMPANY TOWARDS PURCHASE OF SHARES ON BEHALF OF ITS SISTER CONCERNS . HE FURTHER ARGUED THAT THE LEARNED CITA HAD WRONGLY INVOKED THE PROVISIONS OF SECTION 3 OF BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988 TO THE FACTS OF THE INSTANT CASE. HE ARGUED THAT NO EXAMINATION WAS CARRIED OUT BY THE LEARNED CITA TO PROVE THAT T HE SUBJECT MENTIONED TRANSACTIONS ARE BENAMI TRANSACTIONS. HE ARGUED THAT THE LEARNE D CIT(A) SIMPLY REITERATED THE OBSERVATIONS OF THE LEARNED AO IN HIS APPELLATE ORD ER. HE ARGUED THAT THE ASSESSEE IN THE INSTANT CASE HAD PROVED ALL THE THREE INGREDIEN TS OF SECTION 68 OF THE ACT VIZ IDENTITY OF THE SHARE APPLICANTS, CREDITWORTHINESS OF SHARE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS. HE ALSO PLACED RELIANCE ON TH E FOLLOWING DECISIONS IN SUPPORT OF HIS CONTENTIONS:- ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 6 (I) DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS VRINDAVAN FARMS (P) LTD IN ITA NO. 71/2015 , 72/2015 AND 84/2015 D ATED 12.8.2015 (II) DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ITO VS CYGNUS DEVELOPERS (I) P LTD IN ITA NO. 282/KOL/2012 DATED 2.3.2016. 6. THE LEARNED DR ARGUED THAT THE ASSESSEE HAD NOT PROVED THE CREDITWORTHINESS OF THE SEVEN SHARE APPLICANTS. HE ASSAILED THE DETAILS FIL ED IN RESPECT OF THE SEVEN SHARE APPLICANTS ON SEVERAL FOLDS THAT THE SEVEN SHARE APPLICANTS ARE HAVING THE SAME ADDRESSS ; HAVING SAME AUDITORS AND DIRECTORS ; TH AT ALL THE CHEQUES WERE ISSUED ON 25.8.2008 AND 27.8.2008 ON BEHALF OF THE SHARE APPL ICANTS ; THAT CONFIRMATION HAS BEEN SIGNED ON THE SAME DAY I.E 7.3.2013 BY ALL THE SEVEN SHARE APPLICANTS ; THAT NO BREAK UP OF OTHER ADVANCES UNDER LIABILITIES SIDE O F THE BALANCE SHEET OF SEVEN SHARE APPLICANTS IS GIVEN BY THE ASSESSEE ; THAT NO BUSIN ESS ACTIVITY AT ALL IS CARRIED ON IN THESE SEVEN SHARE APPLICANTS DURING THE ASST YEAR U NDER APPEAL ; THAT NO PRUDENT BUSINESSMAN WOULD INVEST IN THESE TYPE OF COMPANIES . HE FURTHER ARGUED THAT THE SUPPLEMENTARY PAPER BOOK CONTAINING VARIOUS DETAILS OF SOURCE OF SOURCE OF FUNDS AND THE DETAILS OF COMMON DIRECTORS ETC WERE NOT FILED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND IT HAS BEEN FILED ONLY BEFORE THIS TRIBUNAL FOR THE FIRST TIME AND HENCE THE SAME CANNOT BE TAKEN INTO ACCOUNT BY THIS TRIBU NAL. HE FURTHER PLACED RELIANCE ON THE FOLLOWING DECISIONS IN SUPPORT OF HIS CONTENTIO NS :- (A) DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE CASE OF SUBHLAKSHMI VANIJYA (P) LTD VS CIT REPORTED IN (2015) 60 TAXMAN N.COM 60 (KOLKATA TRIB.) DATED 30.7.2015. (B) DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE CASE OF BISAKHA SALES (P) LTD VS CIT REPORTED IN (2015) 52 TAXMANN.COM 30 5 (KOLKATA TRIB.) DATED 19.9.2014. (C ) DECISION OF THE HONBLE DELHI HIGH COURT IN TH E CASE OF RIDDHI PROMOTERS (P) LTD VS CIT REPORTED IN 377 ITR 641 (DEL) , ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 7 (D) DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS MAITHAN INTERNATIONAL REPORTED IN (2015) 375 ITR 123 (CAL) (E) DECISION OF THE HONBLE APEX COURT IN THE CASE OF NAVODAYA CASTLE (P) LTD VS CIT REPORTED IN (2015) 56 TAXMANN.COM 18 (SC) 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BOOK FILED BY THE ASSE SSEE INITIALLY AND LATER ANOTHER PAPER BOOK DATED 29.4.2015 WHICH WAS FILED IN RESPONSE TO THE DETAILS CALLED FOR BY THE BENCH DURING THE COURSE OF PREVIOUS HEARINGS. 7.1 DURING THE RELEVANT PREVIOUS YEAR THE ASSESSEE COMPANY MADE FRESH ISSUE OF SHARES TO THE 9 PARTIES AT FACE VALUE OF SHARES I. E. RS.10 EACH AGGREGATING TO RS.1,29,49,930. OUT OF IT THE A.O. ACCEPTED THE SHA RE APPLICATIONS OF 2 INDIVIDUALS NAMELY KUSHAL KHEMKA AND SAROJ KABRA AN D MADE ADDITION OF THE BALANCE AMOUNT OF RS.,125,49,980 BEING THE AGGREGAT E AMOUNT OF SHARE APPLICATIONS BY 7 SHARE APPLICANT COMPANIES. THE DE TAILS OF SHARE APPLICATION AMOUNT, CHEQUE NO., BANK'S NAME ETC. ARE AS UNDER: A) DEVA MERCHANTS P LTD. [PAN AACCD4311L] BY CHEQUE NO. 824600 DATED 25.8.2008 DRAWN ON SYNDICATE BANK, CAMAC STREET BR. (AUDITED B/S AT PG 45-50; COPY OF ITR ACK PG 51, CERTIFICATE REG SHARE INVESTMENT AT PG 52, BANK STA TEMENT OF AGARPARA AT PG 53 AND CERTIFICATE REGARDING PAYMENT BY AGARPARA AT PAGE 54 OF PAPER BOOK) RS .9,37,480 B) ANKUR TIE UP P LTD. [PAN AAFCA3294G] BY CHEQUE NO 824599 DATED22.8.2008 DRAWN ON SYNDICATE BANK, CAMAC STREET BR. (AUDITED B/S AT PG 55-63; CERTIFICATE REG. SHARE INVESTMENT AT PG 64, BANK STATEMENT OF AGARPARA AT PG 65 AND CERTIFICATE REGARDING PAYMENT BY AGARPARA AT PAGE 66 OF PAPER BOOK) RS. 7,00,000 ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 8 C) ROSEVALLEY MERCHANTS P LTD. [PAN AABCR3695Q] (AUDITED B/S AT PG 67-72; COPY OF ITR ACK PG 73, CERTIFICATE REG SHARE INVESTMENT AT PG 74, BANK STA TEMENT OF AGARPARA AT PG 75 AND CERTIFICATE REGARDING PAYMENT BY AGARPARA AT PAGE 76 OF PAPER BOOK) RS .1,12,500 D) TRITON VINIMAY P LTD. [PAN AACCT7004J] BY CHEQUE NO. 033175 DATED 25.8.2008 DRAWN ON IDBI BANK, PARK STREET BRANCH (AUDITED B/S AT PG 25-30; COPY OF ITR ACK PG 31, CERTIFICATE REG SHARE INVESTMENT AT PG 32 , BANK STATEMENT OF PREMIUM AGRO AT PG 33 AND CERTIFICATE REGARDING PAYMENT BY PREMIUM AGRO AT PAGE 34 OF PAPE R BOOK) RS. 27,00,000 E) ARUNODAY DEALCOM P LTD. [PAN AAFCA0607F] BY CHEQUE NO. 033176 DATED 25.8.2008 DRAWN ON IDBI BANK, PARK STREET BRANCH (AUDITED B/S AT PG 35-40; COPY OF ITR ACK PG 41, CERTIFICATE REG SHARE INVESTMENT AT PG 42, BANK STA TEMENT OF PREMIUM AGRO AT PG 43 AND CERTIFICATE REGARDING PAYMENT BY PREMIUM AGRO AT PAGE 44 OF PAPER BOOK) RS. 27,00,000 F) NALANDA VANIJYA P LTD. [PAN AACCN3532F] BY CHEQUE NO. 809487 DATED 25.8.2008. DRAWN ON ORIENTAL BANK OF COMMERCE, GARIAHAT BRANCH (AUDITED B/S AT PG 77-82; COPY OF ITR ACK PG 83, CERTIFICATE REG SHARE INVESTMENT AT PG 84, BANK STATEMENT OF PREMIUM AGRO AT PG 85 AND CERTIFICATE REGARDING PAYMENT BY PREMIUM AGRO AT PAGE 86 OF PAPER BOOK) RS. 27,00,000 G) SAFAL VYAPAR P LTD. [PAN AAKCS1261N] BY CHEQUE NO. 809496 DATED 27.8.2008. DRAWN ON ORIENTAL BANK OF COMMERCE, GARIAHAT BRANCH (AUDITED B/S AT PG 87-92; COPY OF ITR ACK PG 93, CERTIFICATE REG SHARE INVESTMENT AT PG 94, BANK STATEMENT OF PREMIUM AGRO AT PG 95 AND CERTIFICATE REGARDING PAYMENT BY PREMIUM AGRO AT PAGE 96 OF PAPER BOOK) RS.27,00,000 ------------------- RS.1,25,49,980 -------------------- ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 9 7.2 THE ADDITION OF THE ABOVE AMOUNT OF SHARE APPL ICATIONS HAS BEEN MADE U/S 68 IN RESPECT OF SHARE APPLICATIONS FROM THE ABOVE 7 PARTIES, WHO ARE ALL COMPANIES REGISTERED UNDER THE COMPANIES ACT, 1956 AND ASSESSED TO INCOME TAX. THE RETURN OF ALLOTMENT OF SHARES AMOUNTING T O RS. 1,29,49,930/- WAS DULY FILED IN FORM NO. 2 WITH THE REGISTRAR OF COMP ANIES ON 5.9.2008 (COPY AT PAGES 20 TO 23 OF PAPER BOOK). 7.3. THE ASSESSEE HAD SUBMITTED COPIES OF ITS AUDI TED ANNUAL ACCOUNTS (PAGE 1 TO 18 OF PAPER BOOK), IT ACKNOWLEDGEMENTS, CERTIFIC ATE FOR INVESTMENT FROM APPLICANT COMPANIES ALONG WITH CERTIFICATE/CONFIRMA TION AND BANK STATEMENT OF THE COMPANIES FROM WHOSE BANK ACCOUNT CHEQUES WERE ISSUED IN FAVOUR OF ASSESSEE IN RESPECT OF ALL OF THE AFORESAID SHARE A PPLICANTS BEFORE ID. A.O. IN COURSE OF ASSESSMENT PROCEEDINGS. 7.4. WE FIND THAT THE CHEQUES WERE ISSUED BY AGARPA RA JUTE MILLS LTD. AND PREMIUM AGRO EXPORTS LTD. ON BEHALF OF THE 3 SHARE APPLICANTS AND 4 SHARE APPLICANTS RESPECTIVELY. RELEVANT DETAILS ARE GIVEN HEREINBELOW :- AMOUNTS GIVEN BY AGARPARA JUTE MILLS LTD. PAN AACCA 4864H 7.4.1 A SUM AGGREGATING TO RS. 17,49,980/- FOR AND ON BEHALF OF DEVA MERCHANTS P LTD. RS.9,37,480/- ; ANKUR TIE UP P LTD . RS. 7,00,000/- AND ROSEVALLEY MERCHANTS P LTD. RS.1,12,500/-. ALL PAY MENTS WERE MADE BY A/C PAYEE CHEQUES IN FAVOUR OF THE ASSESSEE COMPANY. DE TAILS OF CHEQUE NO., DATE AND BANK'S NAME ARE MENTIONED ABOVE AND THEREFORE N OT BEING REPEATED. 7.4.2 AGARPARA JUTE MILLS LTD. IS A JUTE MANUFACTU RING COMPANY HAVING ITS FACTORY AT 28, BT ROAD, KAMARHATI, KOLKATA 700058 A ND ASSESSED UNDER PAN AACCA4864H. THE COPY OF ANNUAL REPORT ALSO COMPRISI NG PROFIT & LOSS A/C, BALANCE SHEET AND RELEVANT DETAILS WERE SUBMITTED D URING ASSESSMENT ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 10 PROCEEDINGS AND THE COPY OF THE SAME IS APPEARING A T PAGE 118 TO 139 OF THE PAPER BOOK. 7.4.3. THE TURNOVER OF FINISHED GOODS OF THIS COMPA NY FOR THE YEAR ENDED 31.3.2009 WAS RS. 64.51 CRORES AND THE INCOME FOR T HE YEAR AMOUNTED TO RS.70.07 LAKHS AFTER TAX (COPY OF PROFIT & LOSS ACC OUNT AT PAGE 126A). 7.4.4. THE COMPANY HAD ISSUED CONFIRMATION IN WRITI NG MENTIONING CHEQUE NO., DATE, BANK'S NAME ETC. IN RESPECT OF THE 3 CHEQUES ISSUED BY IT ON BEHALF OF DEVA MERCHANTS P LTD. FOR RS.9,37,480 (COPY AT PAGE 54); ANKUR TIE UP P LTD. RS. 7,00,000/- (COPY AT PAGE 66); AND ROSEVALLEY MERCHA NTS P LTD. RS.1,12,500 (COPY AT PAGE 76). THESE CONFIRMATIONS WERE FURNISH ED IN COURSE OF ASSESSMENT PROCEEDINGS. 7.4.5. THE AMOUNT GIVEN BY THE SAID COMPANY AGARPA RA JUTE MILLS LTD. ON BEHALF OF THE SAID 3 SHARE APPLICANTS IS DULY SHOWN BY AGARPARA JUTE MILLS LTD. IN LIST OF LOANS & ADVANCES. COPY AT PAGE 138-139 O F PAPER BOOK. 7.4.6. THE COPY OF BANK STATEMENT OF THE SAID COMPA NY WITH SYNDICATE BANK, CAMAC STREET BRANCH WAS ALSO FURNISHED IN COURSE OF ASSESSMENT PROCEEDINGS. THE COPY OF THE BANK STATEMENT IS APPEARING AT PAGE 53 OF THE PAPER BOOK. THE IMMEDIATE SOURCE WAS BY CLEARING OF CHEQUES RECEIVE D BY THE COMPANY IN ITS NORMAL BUSINESS NAMELY REALIZATION FROM TRADE DEBTO RS. THE SAID COMPANY IS RUNNING A JUTE MILL AND HAS SALE TURNOVER OF FINISH ED GOODS OF RS.64.51 CRORE AND HAVING SUNDRY DEBTORS OF RS. 14.15 CRORE FOR TH E YEAR ENDED 31.3.2009. 7.4.7. THE AMOUNTS WHICH WERE PAID BY AGARPARA JUT E MILLS LTD. ON BEHALF OF 3 SHARE APPLICANT COMPANIES IS DULY INCLUDED IN THE A MOUNT OF ADVANCES RECEIVED IN THE CASE OF THE SAID 3 COMPANIES UNDER THE HEAD CURRENT LIABILITIES. WE FIND ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 11 THAT THE LD. A.O. IS FACTUALLY INCORRECT IN OBSERVI NG IN PARA 4 (I) AT PAGE 3 AND ALSO AT OTHER PARAS OF HIS ORDER THAT THE SHARE APP LICANT HAD NO BORROWED FUND BY WAY OF SECURED OR UNSECURED LOAN IN ITS BALANCE SHE ET. THE BORROWED FUNDS HAVE BEEN REFLECTED UNDER THE HEAD CURRENT LIABILIT IES. 7.4.8. THE AMOUNT OF INVESTMENT IN SHARES OF THE AS SESSEE COMPANY BY THE SAID 3 COMPANIES IS ALSO INCLUDED IN THE AMOUNT OF SHARE INVESTMENT IN THEIR RESPECTIVE BALANCE SHEET. 7.5. AMOUNTS GIVEN BY PREMIUM AGRO EXPORT LTD. PAN AACC P6412C 7.5.1 A SUM AGGREGATING TO RS. 1.08 CRORE FOR AND ON BEHALF OF TRITON VINIMAY P LTD., ARUNODAY DEALCOM P LTD.; NALANDA VANIJYA P LTD.; SAFAL VYAPAR P LTD. OF RS. 27 LAKHS EACH TOTALLING RS. 1.08 CRORE. ALL PAYMENTS WERE MADE BY A/C PAYEE CHEQUES IN FAVOUR OF THE ASSESSEE COMPANY. DE TAILS OF CHEQUE NO., DATE AND BANK'S NAME ARE MENTIONED HEREINABOVE AND THERE FORE NOT BEING REPEATED. 7.5.2 PREMIUM AGRO EXPORT LTD. RUNS A JUTE MILL AT ALI HYDER ROAD, TITAGARH, NORTH 24 PARGANAS (WB) AND ASSESSED UNDER PAN AACCP 6412C. THE COPY OF ANNUAL REPORT ALSO COMPRISING PROFIT & LOSS A/C, BA LANCE SHEET AND RELEVANT DETAILS WERE SUBMITTED DURING ASSESSMENT PROCEEDING S AND THE COPY OF THE SAME IS APPEARING AT PAGE 100 TO 117 OF THE PAPER BOOK. 7.5.3. THE TURNOVER OF GOODS OF THIS COMPANY FOR TH E YEAR ENDED 31.3.2009 WAS RS. 42.91 CRORES. HOWEVER THERE WAS LOSS DURING THE YEAR (COPY OF PROFIT & LOSS ACCOUNT AT PAGE 107). 7.5.4. THE COMPANY HAD ISSUED CONFIRMATION IN WRITI NG MENTIONING CHEQUE NO., DATE, BANK'S NAME ETC. IN RESPECT OF THE 4 CHEQUES OF RS.27 LAKHS EACH ISSUED ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 12 BY IT REGARDING SHARE APPLICATION AMOUNT FOR TRITON VINIMAY P LTD. (COPY OF CERTIFICATE AT PAGE 34); ARUNODAY DEALCOM P LTD.RS. 27 LAKHS (COPY OF CERTIFICATE AT PAGE 44); NALANDA VANIJYA P LTD. (CO PY OF CERTIFICATE AT PAGE 84); AND SAFAL VYAPAR P LTD. (COPY OF CERTIFICATE AT PAG E 94). THESE CONFIRMATIONS WERE FURNISHED IN COURSE OF ASSESSMENT PROCEEDINGS. 7.5.5. THE AMOUNT GIVEN BY THE SAID COMPANY PREMIUM AGRO EXPORT LTD. ON BEHALF OF THE FOUR SHARE APPLICANTS IS DULY SHOWN I N LIST OF LOANS & ADVANCES. COPY AT PAGE 116 OF PAPER BOOK. 7.5.6. THE COPY OF BANK STATEMENTS OF THE SAID COMP ANY PREMIUM AGRO EXPORT LTD. WAS ALSO FURNISHED IN COURSE OF ASSESSMENT PRO CEEDINGS. THE COPY OF THE BANK STATEMENT WITH IDBI BANK, PARK STREET BRANCH I S APPEARING AT PAGE 33 ( SHOWING PAYMENTS MADE ON BEHALF OF THE SAID TRITON AND ARUNODAYA) AND COPY OF THE BANK STATEMENT WITH ORIENTAL BANK OF COMMERC E, GARIAHAT BRANCH AT PAGE 85 (SHOWING PAYMENTS MADE ON BEHALF OF SAID NA LANDA AND SAFAL VYAPAR) OF THE PAPER BOOK. THE IMMEDIATE SOURCE WAS BY CLEA RING OF CHEQUES RECEIVED BY THE COMPANY IN ITS NORMAL BUSINESS NAMELY REALIZ ATION FROM TRADE DEBTORS. THE SAID COMPANY IS RUNNING A JUTE MILL AND HAS SAL E TURNOVER OF RS.42.91 CRORES AND HAVING SUNDRY DEBTORS OF RS. 8.92 CRORES FOR THE YEAR ENDED 31.3.2009. 7.5.7. THE PROFIT & LOSS ACCOUNT AND BALANCE SHEET ETC. TOGETHER WITH PAN / COPY OF ACKNOWLEDGE OF FILING IT RETURNS OF THE SH ARE APPLICANT COMPANY WERE ALSO FURNISHED IN COURSE OF ASSESSMENT PROCEEDINGS. THE COPY OF THE SAME ARE APPEARING IN PAPER BOOK: TRITON VINIMAY P LTD. (AT PAGE 26 TO 30, ACK OF IT RETURN AT PAGE 31); ARUNODAY DEALCOM P LTD. (AT PAG E 36 TO 40, ACK OF IT RETURN AT PAGE 41); NALANDA VANIJYA P LTD. ((AT PAG E 78 TO 82, ACK OF IT RETURN AT PAGE 83); AND SAFAL VYAPAR P LTD. (AT PAGE 88 TO 92, ACK OF IT RETURN AT PAGE ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 13 93). THE AMOUNTS WHICH WERE PAID BY PREMIUM AGRO EX PORT LTD. ON BEHALF OF THE SAID FOUR SHARE APPLICANT COMPANIES IS DULY INC LUDED IN THE AMOUNT OF ADVANCES RECEIVED IN THE CASE OF THE SAID FOUR COMP ANIES. THE INVESTMENT IN SHARES OF THE ASSESSEE COMPANY BY THE SAID FOUR COM PANIES IS ALSO INCLUDED IN THE AMOUNT OF SHARE INVESTMENT IN THEIR RESPECTIVE BALANCE SHEET. 7.6. WE FIND THAT THE ASSESSEE HAD FILED THE FOLLOW ING DOCUMENTS :- A) AUDITED BALANCE SHEETS OF SEVEN SHARE APPLICANT COM PANIES AS ON 31.3.2009. B) IT RETURN ACKNOWLEDGEMENTS FOR ASST YEAR 2009-10 OF SEVEN SHARE APPLICANTS. C) CONFIRMATION FROM THE SHARE APPLICANTS EXPLAINING T HE FACT THAT THE CHEQUE WAS ISSUED BY M/S PREMIUM AGRO EXPORTS LTD OR AGARP ALA JUTE MILLS LTD , AS THE CASE MAY BE, ON THEIR BEHALF, TO WELLMAN WA COMA LIMITED TOWARDS PURCHASE OF SHARES. D) RELEVANT PAGE OF BANK STATEMENTS OF M/S PREMIUM AGR O EXPORTS LTD AND M/S AGARPALA JUTE MILLS LTD. E) CONFIRMATION FROM M/S PREMIUM AGRO EXPORTS LTD AND M/S AGARPALA JUTE MILLS LTD EXPLAINING THE FACT THAT THEY HAD ADVANCE D MONIES TO WELLMAN WACOMA LIMITED (ASSESSEE HEREIN) TOWARDS PURCHASE O F SHARES ON BEHALF OF THE SEVEN SHARE APPLICANT COMPANIES, AS THE CASE MAY BE. F) ASST ORDERS U/S 143(3) OF THE ACT FOR AY 2009-10 F OR PREMIUM AGRO EXPORTS LTD DATED 26.12.2011 AND FOR AGARPALA JUTE MILLS LTD U/S 153C/153A/143(3) OF THE ACT FOR AY 2009-10. G) RELEVANT PAGES OF BANK STATEMENTS OF THE ASSESSEE 7.7. WE FIND THAT THE FOLLOWING DOCUMENTS WERE FIL ED BY THE ASSESSEE BEFORE US BY WAY OF SUPPLEMENTARY PAPER BOOK WHICH WERE CALLED FOR B Y THE BENCH DURING THE COURSE OF PREVIOUS HEARINGS :- ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 14 1. DETAILS OF DIRECTORS OF SEVEN SHARE APPLICANT COMP ANIES , AGARTALA JUTE MILLS LTD, PREMIUM AGRO EXPORTS LTD AND THE ASSESSE E COMPANY TOGETHER WITH THE DETAILS OF COMPANIES HAVING COMMON DIRECTO RS. (PAGES 1 TO 125 OF PAPER BOOK DATED 29.4.15) 2. DETAILED SOURCE OF FUNDS IN THE HANDS OF PREMIUM AG RO EXPORTS LTD FOR ADVANCING THE AMOUNT TO THE SHARE APPLICANT COMPANI ES. (PAGES 126 TO 137 OF PAPER BOOK DATED 29.4.15). RELEVANT BANK STATEM ENTS WITH IDBI BANK WAS ALREADY FILED IN PAPER BOOK 2. 3. DETAILED SOURCE OF FUNDS IN THE HANDS OF AGARPARA J UTE MILLS LTD FOR ADVANCING THE AMOUNT TO THE SHARE APPLICANT COMPANI ES. (PAGES 138 TO 285 OF PAPER BOOK DATED 29.4.15) 4. DETAILED SOURCE OF FUNDS IN THE HANDS OF PREMIUM AG RO EXPORTS LTD FOR ADVANCING THE AMOUNT TO THE SHARE APPLICANT COMPANI ES. (PAGES 286 TO 289 OF PAPER BOOK DATED 29.4.15). RELEVANT BANK STATEME NTS WITH ORIENTAL BANK OF COMMERCE WAS ALREADY FILED IN PAPER BOOK 2. 5. DETAILED SOURCE OF UTILIZATION OF FUNDS BY THE ASSE SSEE COMPANY VIDE PAGES 290 TO 348 OF PAPER BOOK DATED 29.4.15. WE FIND THAT THIS PAPER BOOK IS DULY CERTIFIED BY S TATING THAT THE SAME HAS BEEN FILED AS REQUISITIONED IN THE COURSE OF HEARING. THE SAME I S TAKEN ON RECORD FOR THE PURPOSE OF ADJUDICATION OF THE IMPUGNED ISSUE. 7.8. IT WOULD BE RELEVANT TO REPRODUCE THE PROVISI ONS OF SECTION 68 AT THIS JUNCTURE:- CASH CREDITS. 68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO E XPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERE D 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 : ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 15 PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY (NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED), AND THE SUM SO CREDITED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EXPLANATIO N OFFERED BY SUCH ASSESSEE-COMPANY SHALL BE DEEMED TO BE NOT SATISFAC TORY, UNLESS (A) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUC H CREDIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALSO OFFERS AN EXPLANATION AB OUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED; AND (B) SUCH EXPLANATION IN THE OPINION OF THE ASSESSI NG OFFICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY: PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRST PROVISO SHALL APPLY IF THE PERSON, IN WHOSE NAME THE SUM REFERRED TO THERE IN IS RECORDED, IS A VENTURE CAPITAL FUND OR A VENTURE CAPITAL COMPANY A S REFERRED TO IN CLAUSE (23FB) OF SECTION 10 . WE FIND FROM THE AFORESAID PROVISION, THAT THE DUTY CAST ON THE ASSESSEE IS TO EXPLAIN THE NATURE AND SOURCE OF CREDIT FOUND IN HIS BOOKS. IN THE INSTANT CASE, THE CREDIT IS IN THE FORM OF RECEIPT OF SHARE CAPITAL FROM SEVEN SHA RE APPLICANTS. THE NATURE OF RECEIPT TOWARDS SHARE CAPITAL IS WELL ESTABLISHED FROM THE ENTRIES PASSED IN THE RESPECTIVE BALANCE SHEETS OF THE COMPANIES AS SHARE CAPITAL A ND INVESTMENTS. HENCE THE NATURE OF RECEIPT IS PROVED BY THE ASSESSEE BEYOND DOUBT. IN RESPECT OF SOURCE OF CREDIT, THE ASSESSEE HAS TO PROVE THE THREE NECESSARY INGREDIEN TS I.E IDENTITY OF SHARE APPLICANTS, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF SHARE APPLICANTS. IN THE INSTANT CASE, WE FIND THAT THE IDENTITY OF SHARE APPLICANTS IS PROVED BEYOND DOUBT BY THE ASSESSEE BY FURNISHING THE NAME, ADDRESS, PAN OF SH ARE APPLICANTS TOGETHER WITH THE COPIES OF BALANCE SHEETS AND INCOME TAX RETURNS. W ITH REGARD TO THE CREDITWORTHINESS OF SHARE APPLICANTS, THE LEARNED AO HIMSELF STATES THAT THE SEVEN SHARE APPLICANTS HAD INVESTED IN ASSESSEE COMPANYS SHARES BY TAKING MON EY FROM SOME OTHER COMPANIES WHO HAS DIRECTLY GIVEN CHEQUES IN THE NAME OF THE A SSESSEE COMPANY ON BEHALF OF APPLICANT COMPANIES. THESE TRANSACTIONS ARE ALSO D ULY REFLECTED IN THE BALANCE SHEETS OF THE SEVEN SHARE APPLICANTS BY DEBITING THE INVES TMENT IN SHARE CAPITAL OF ASSESSEE COMPANY BY CORRESPONDING CREDIT TO THE LOAN CREDITO RS WHO HAD ADVANCED MONIES ON BEHALF OF SHARE APPLICANTS. HENCE THE SOURCE OF TH E SHARE APPLICANTS FOR MAKING ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 16 INVESTMENT IN SHARE CAPITAL OF ASSESSEE COMPANY IS BY WAY OF BORROWINGS FROM TWO JUTE COMPANIES. BY THIS, THE CREDITWORTHINESS OF THE SHARE APPLICANTS IS ALSO PROVED BEYOND DOUBT. THIRD INGREDIENT IS GENUINENESS OF T HE TRANSACTIONS. WE FIND THAT THE TWO JUTE COMPANIES HAD PAID THE MONIES DIRECTLY TO THE ASSESSEE COMPANY BY ACCOUNT PAYEE CHEQUES OUT OF SUFFICIENT BANK BALANCES AVAIL ABLE IN THEIR BANK ACCOUNTS ON BEHALF OF THE SHARE APPLICANTS. WE ALSO FIND FRO M THE PAPER BOOK THAT THE ASSESSEE HAS EVEN PROVED THE SOURCE OF THOSE TWO JUTE COMPANIES REPRESENTED BY WAY OF SALE PROCEEDS GETTING DEPOSITED INTO THEIR BANK ACCOUNTS WHICH IN TURN HAS BEEN USED BY THEM TO ADVANCE MONIES TO ASSESSEE COMPANY ON BEHAL F OF SHARE APPLICANTS. HENCE THE SOURCE OF SOURCE OF SOURCE IS PROVED BY THE ASS ESSEE IN THE INSTANT CASE THOUGH THE SAME IS NOT REQUIRED TO BE DONE BY THE ASSESSEE AS PER LAW. WE FIND THAT THE SHARE APPLICANTS HAVE NOT DENIED THE FACT OF MAKING INVES TMENT IN SHARE CAPITAL IN ASSESSEE COMPANY. THE TWO LENDING JUTE COMPANIES M/S AGARPA RA JUTE MILLS LTD AND M/S PREMIUM AGRO EXPORT LTD HAVE ALSO CONFIRMED THE PAY MENTS WHICH ARE DULY CORROBORATED WITH THEIR RESPECTIVE BANK STATEMENTS AND ALL THE PAYMENTS ARE BY ACCOUNT PAYEE CHEQUES. SHARES HAVE BEEN ISSUED TO THE SEVE N SHARE APPLICANT COMPANIES AT FACE VALUE BY THE ASSESSEE COMPANY. WE FIND THAT THE ENTIRE ADDITION HAS BEEN MADE BY THE LEARNED AO BASED UPON SUSPICION, SURMISES AN D CONJECTURES AND NOT UPON PROPER EVALUATION AND APPRAISAL OF THE EVIDENCES AN D DOCUMENTS FILED BEFORE HIM. WE PLACE RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN THIS REGARD IN THE CASE OF DHAKESHWARI COTTON MILLS LTD VS CIT REPORTED IN 26 ITR 775 (SC) WHEREIN IT HAS BEEN HELD THAT NO ADDITION CAN BE MADE WITHOUT MATE RIAL AND ON MERE SUSPICION. 7.9. WE ALSO FIND THAT THE CASE LAWS RELIED UPON B Y THE LEARNED AR ARE WELL FOUNDED:- (I) DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS VRINDAVAN FARMS (P) LTD IN ITA NO. 71/2015 , 72/2015 AND 84/ 2015 DATED 12.8.2015 3. MS. SURUCHI AGGARWAL, LEARNED SENIOR STANDING COUNSEL FOR THE APPELLANT, RELIED UPON THE DECISION OF THIS COURT I N CIT V. NOVA PROMOTERS & FINLEASE LTD. 342 ITR 169 AND URGED THA T THE ASSESSING OFFICER (AO) WAS NOT REQUIRED TO 'POINT TO THE SOUR CE FROM WHICH THE ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 17 MONEY WAS RECEIVED BY THE ASSESSEE'. ON THE OTHER H AND, IT WAS INCUMBENT UPON THE ASSESSEE TO OFFER A SATISFACTORY EXPLANATION REGARDING NATURE AND SOURCE OF THE FUNDS. THE ITAT HAS IN THE IMPUGNED ORDER NOTICED THAT IN THE PRESENT CASE THE REVENUE HAS NOT DOUBTED THE IDENTITY OF THE SHARE A PPLICANTS. THE SOLE BASIS FOR THE REVENUE TO DOUBT THEIR CREDITWORTHINE SS WAS THE LOW INCOME AS REFLECTED IN THEIR INCOME- TAX- RETURNS. THE ENT IRE DETAILS OF THE SHARE APPLICANTS WERE MADE AVAILABLE TO THE AO BY THE ASS ESSEE. THIS INCLUDED THEIR PAN NUMBERS, CONFIRMATIONS, THEIR BANK STATEM ENTS, THEIR BALANCE SHEETS AND PROFIT AND LOSS ACCOUNTS AND THE CERTIFI CATES OF INCORPORATION ETC. IT WAS OBSERVED BY THE ITAT THAT THE AO HAD NO T UNDERTAKEN ANY INVESTIGATION OF THE VERACITY OF THE ABOVE DOCUMENT S SUBMITTED TO HIM. IT HAS BEEN RIGHTY COMMENTED BY THE IT AT THAT WITHOUT DOUBTING THE DOCUMENTS, THE AO COMPLETED THE ASSESSMENT ONLY ON THE PRESUMPTION THAT LOW RETURN OF INCOME WAS SUFFICIENT TO DOUBT THE CR EDIT WORTHINESS OF THE SHARE HOLDERS . 4. THE COURT IS OF THE VIEW THAT THE ASSESSEE BY PRODUCED SUFFICIENT DOCUMENTATION DISCHARGED ITS INITIAL ONUS OF SHOWIN G THE GENUINENESS AND CREDITWORTHINESS OF THE SHARE APPLICANTS. IT WAS IN CUMBENT TO THE AO TO HAVE UNDERTAKEN SOME INQUIRY AND INVESTIGATION BEFO RE COMING TO A CONCLUSION ON THE ISSUE OF CREDITWORTHINESS. IN PAR A 39 OF THE DECISION IN NOVA PROMOTERS (SUPRA), THE COURT HAS TAKEN NOTE OF A SITUATION WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICANTS ARE FU RNISHED TO THE AO AND THE AO FAILS TO CONDUCT AN INQUIRY. THE COURT HAS O BSERVED THAT IN THAT EVENT NO ADDITION CAN BE MADE IN THE HANDS 0 R THE ASSESSEE UNDER SECTION 68 OF THE ACT AND IT WILL BE OPEN TO THE REVENUE TO MOVE AGAINST THE SHARE APPLICANTS IN ACCORDANCE WITH LAW. 5. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT AP PEALS, THE COURT IS SATISFIED THAT NO SUBSTANTIAL QUESTION OF LAW ARISE S. THE APPEALS ARE DISMISSED. (II) DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ITO VS CYGNUS DEVELOPERS (I) P LTD IN ITA NO. 282/KOL/2012 DATED 2.3.2016. 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 DETA ILS AND DOCUMENTS FILED BY THE APPELLANT COMPANY IN THE COURSE OF ASS ESSMENT: PROCEEDINGS VIDE LETTER DT.3-10-2007. ON CAREFUL CONSIDERATION OF THE FACTS AND IN LAW 1 AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED I N MAKING, THE ADDITION AGGREGATING TO RS.54,00,000/- U/ S.68 OF THE ACT BE ING THE AMOUNT OF ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 18 SHARE APPLICATION MONEY BY HOLDING THAT THE APPELLA NT COMPANY HAS FAILED TO PROVE THE IDENTITY, AND CREDIT WORTHINESS OF. THE CREDITORS AS WELL AS THE GENUINENESS OF TRANSACTIONS. IT IS OBSE RVED THAT ALL THE THREE SHARE APPLICANT COMPANIES I.E. M/S. SHREE SHYAM TRE XIM PVT. LTD., M/ S NAVALCO COMMODITIES PVT. LTD. AND M/ S. JEWELLOCK T REXIM PVT. LTD. HAD FILED THEIR CONFIRMATIONS WHEREIN EACH OF THEM CONF IRMED THAT THEY HAD APPLIED FOR SHARES OF THE APPELLANT -COMPANY. ALL T HE THREE COMPANIES PROVIDED- THE CHEQUE NUMBER, COPY OF BANK STATEMENT S AND THEIR PAN. IT IS OBSERVED' THAT THESE COMPANIES ALSO FILED, COPI ES OF THEIR RETURN OF INCOME AND FINANCIAL STATEMENTS FOR AS WELL AS COPY OF THEIR ASSESSMENT ORDER U/S.143(3) OF THE LT ACT FOR AY.2005-06. IN T HE 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 AS SESSMENTS IN THE CASE OF M/S. NAVALCO COMMODITIES PVT. LTD. AND M/S . SHREE SHYAM TREXIM PVT. LTD. FOR A.Y.2005-06 AND AY.2004-05 RES PECTIVELY WERE COMPLETED BY THE ITO, WARD 9(4), KOLKATA. UNDER THE CIRCUMSTANCES, I AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE SHARE APPLICANT COMPANIES WERE NOT IN EXISTENCE. THE ASSE SSMENT ORDERS WERE COMPLETED ON THE ADDRESS AS PROVIDED BY THE APPELLA NT 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 EVIDENCES IN SUPPOR T OF ITS CLAIM OF RECEIPT OF SHARE APPLICATION MONEY, I AM OF THE OPI NION THAT THE NO ADDITION U/ S.68 COULD BE MADE IN THE HANDS OF APPE LLANT COMPANY. ON GOING THROUGH THE VARIOUS JUDICIAL PRONOUNCEMENTS R ELIED UPON BY THE APPELLANT, IT IS OBSERVED THAT THE VIEW TAKEN AS AB OVE IS ALSO SUPPORTED BY THEM. IN VIEW OF ABOVE THE AO IS DIRECTED TO DEL ETE THE ADDITION OF RS.54,00,000/ -. THE GROUND NOS. 2 AND 3 ARE ALLOWE D,' 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 R ELIED ON THE ORDER OF CIT(A) AND FURTHER DREW OUR ATTENTION TO THE DECISI ON OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS RAJ KUMA R AGARWAL VIDE ITA NO.179/2008 DATED 17.11.2009 WHEREIN THE HON'BL E ALLAHABAD HIGH COURT TOOK A VIEW THAT NON PRODUCTION OF THE DIRECT OR OF A PUBLIC LIMITED COMPANY WHICH IS REGULARLY ASSESSED TO INCOME TAX H AVING PAN, ON THE GROUND THAT THE IDENTITY OF THE INVESTOR IS NOT PRO VED CANNOT BE SUSTAINED. ATTENTION WAS ALSO TO THE SIMILAR RULING OF THE ITA T KOLKATA BENCH IN THE ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 19 CASE OF ITO VS DEVINDER SINGH SHANT IN ITA NO.208/K OL/2009 VIDE ORDER DATED 17.04.2009. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS., WE AR E 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 TH E REVENUE DISPUTED ONLY THE PROOF OF IDENTITY OF THE SHARE HOLDER. IN THIS REGARD IT IS SEEN THAT FOR AY.2004-05 SHREE SHYAM TREXIM PVT. LTD., WAS AS SESSED 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 N AVALCO COMMODITIES PVT. LTD., WAS ASSESSED TO TAX U/S 143(3) FOR AY.20 05-06 BY ITO, WARD- 9(4), KOLKATA BY ORDER DATED 20.03.2007. SIMILARLY JEWELLOCK TREXIM PVT. LTD WAS ASSESSED TO TAX FORAY.2005-06 BY THE V ERY SAME ITO- WARD- 9(3), KOLKATA ASSESSING THE ASSESSEE. IN THE LIGHT OF THE ABOVE FACTUAL POSITION WHICH IS NOT DISPUTED BY THE REVENUE, IT C ANNOT BE SAID THAT THE IDENTITY OF THE SHARE APPLICANTS REMAINED NOT PROVE D BY THE ASSESSEE. THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT AS WEL L AS ITAT KOLKATA BENCH ON WHICH RELIANCE WAS PLACED BY THE LEARNED C OUNSEL FOR THE ASSESSEE ALSO SUPPORTS THE VIEW THAT FOR NON PRODUC TION OF DIRECTORS OF THE INVESTOR COMPANY FOR EXAMINATION BY THE AO IT C ANNOT BE HELD THAT THE IDENTITY OF A LIMITED COMPANY HAS NOT BEEN ESTA BLISHED. FOR THE REASONS GIVEN ABOVE WE UPHOLD THE ORDER OF CIT(A) A ND DISMISS THE APPEAL OF THE REVENUE. 7.10. WE FIND THAT THE CASE LAWS RELIED UPON BY TH E LEARNED DR ARE NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. THE DECISION RELI ED BY LEARNED DR ON THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SUBHLAKSHMI VANIJYA (P) LTD VS CIT REPORTED IN (2015) 60 TAXMANN.COM 60 (KOLKATA TRIB.) DATED 30 .7.2015 IS TOTALLY ON DIFFERENT ISSUES. IN THAT CASE, THIS TRIBUNAL DECIDED THE VA LIDITY OF INVOKING REVISIONARY JURISDICTION U/S 263 OF THE ACT BY THE LEARNED CIT AND WHETHER ADEQUATE ENQUIRIES WERE MADE BY THE LEARNED AO IN THE FACTS AND CIRCU MSTANCES OF THAT CASE. IN FACT THIS TRIBUNAL HAD SPECIFICALLY FRAMED CERTAIN QUESTIONS TO BE ANSWERED BY THEM AND HAD DULY REPLIED BY THEM IN THE ORDER. THE QUESTIONS R AISED BY THEM ARE AS BELOW:- (I) WHETHER THE PROVISIONS OF SECTION 68 CAN BE ATT RACTED IF SHARE CAPITAL WITH PREMIUM IS NOT PROPERLY EXPLAINED BY THE ASSES SEE COMPANY ? ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 20 (II) WHETHER INSERTION OF PROVISO TO SECTION 68 BY THE FINANCE ACT, 2012 WITH EFFECT FROM 1-4-2013 EMPOWERING THE ASSESSING OFFICER TO EXAMINE THE GENUINENESS OF THE SHARE CAPITAL IN THE CASE OF A COMPANY IN WHICH PUBLIC ARE NOT SUBSTANTIALLY INTERESTED, IS PROSPEC TIVE ? (III) WHETHER THE ENQUIRY CONDUCTED BY THE ASSESSIN G OFFICER IN FACTS AND CIRCUMSTANCES OF THE CASE CAN BE CONSIDERED AS A PR OPER ENQUIRY ? (IV) WHETHER COMMISSIONER CAN SET ASIDE THE ASSESSM ENT ORDER AND DIRECT THE ASSESSING OFFICER TO CONDUCT A THOROUGH ENQUIRY , THEREBY INTERFERING WITH THE JURISDICTION OF THE ASSESSING OFFICER CONF ERRED ON HIM IN TERMS OF SECTION 142(1) AND 143(2) OF THE ACT? (V) WHETHER INADEQUATE INQUIRY CONDUCTED BY THE ASS ESSING OFFICER EMPOWERS THE COMMISSIONER TO REVISE THE ASSESSMENT ORDER ? (VI) WHETHER THE ORDER OF THE COMMISSIONER WAS BASE D ON IRRELEVANT CONSIDERATION AND WAS HE SUPPOSED TO POINT OUT SPEC IFICALLY WHERE THE ASSESSING OFFICER WENT WRONG IN NOT PROPERLY EXAMIN ING THE ISSUE OF SHARE CAPITAL ? (VII) IF THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW, CAN STILL THE REVISION BE ORDERED ? (VIII) ISSUE OF NON-SERVICE OF SHOW CAUSE NOTICE UN DER SECTION 263. (IX) WHETHER ORDER UNDER SECTION 263 IS BARRED BY L IMITATION ? (X) EFFECT OF ORDER PASSED UNDER SECTION 263 IN THE CASE OF AMALGAMATING COMPANY AFTER AMALGAMATION (XI) WHETHER ORDER UNDER SECTION 263 BECOMES INVALI D FOR BEING PASSED ON A CLOSED DAY ? (XII) WHETHER THE ORDER UNDER SECTION 263 CAN BE DE CLARED AS A NULLITY FOR THE NOTICE HAVING NOT BEEN SIGNED BY THE COMMISSION ER ? HENCE FROM THE ABOVE, IT COULD BE SEEN THAT THIS TR IBUNAL NEVER HAD AN OCCASION TO LOOK INTO THE MERITS OF THE ADDITION PROPOSED TO BE MADE TOWARDS SHARE CAPITAL IN THE FACTS AND CIRCUMSTANCES OF THAT CASE AND NO DECISION WAS RENDERED THEREON ON MERITS OF THE ISSUE. VARIOUS CASE LAWS WERE ANALYSED BY THIS TR IBUNAL ONLY IN THE CONTEXT OF VALIDITY ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 21 OF REVISIONARY JURISDICTION U/S 263 OF THE ACT TO C ONSIDER WHETHER THE ORDER PASSED BY THE LEARNED CIT IS ERRONEOUS IN SO FAR AS IT IS PRE JUDICIAL TO THE INTERESTS OF THE REVENUE AND NOTHING MORE. HENCE THE CASE LAW RELIED UPON BY THE LEARNED DR IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. THE SAME RATIO WILL BE EQUALLY APPLICABLE FOR ANOTHER TRIBUNAL DECISION RELIED UPON BY THE LE ARNED DR IN THE CASE OF BISAKHA SALES (P) LTD VS CIT REPORTED IN (2014) 52 TAXMANN. COM 305 (KOLKATA TRIB.) DATED 19.9.2014 . SIMILAR IS THE CASE WITH RELIANCE PLACED BY THE L EARNED DR ON THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS M AITHAN INTERNATIONAL REPORTED IN (2015) 375 ITR 123 (CAL). 7.11. NOW COMING TO ANOTHER DECISION RELIED UPON B Y THE LEARNED DR RENDERED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF RIDDHI PROM OTERS (P) LTD VS CIT REPORTED IN 377 ITR 641 (DEL) , IN THAT CASE, THE ISSUE INVOLVED IS AS TO WHETHER AN ADDITION TOWARDS SHARE APPLICATION MONEY COULD BE MADE MEREL Y ON THE FACT OF PROVING THE IDENTITY OF THE CREDITOR BY THE ASSESSEE IGNORING T HE OTHER INGREDIENTS OF GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE SHARE APPL ICANT WHO HAS ADVANCED THE AMOUNTS. HELD IN THE FACTS AND CIRCUMSTANCES OF T HAT CASE, THAT THE CREDITWORTHINESS OF THE SHARE APPLICANTS HAD TO BE SEEN IN THE CONTE XT OF THE ASSERTION MADE BY THEM OR THE MATERIALS PRESENTED BEFORE THE AO AT THE RELEVA NT TIME. THE MATERIALS ON RECORDS DISCLOSED THAT SOME INFORMATION FROM AT LEAST TWO I NDIVIDUALS INDICATED THAT THE MONEY HAD NOT BEEN GIVEN BY THEM. IN VIEW OF THE FACT TH AT CONCURRENTLY THE LOWER AUTHORITIES HELD AGAINST THE ASSESSEE AND GIVEN THE INTENSIVE F ACTUAL NATURE OF THE EVIDENCE, NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEAL IS ACCORDINGLY DISMISSED . IN THE INSTANT CASE, THE ASSESSEE HAD INDEED PROVED THE IDENTITY OF THE SHARE APPLICANTS, CREDITWORTHINESS OF SHARE APPLICANTS AND GENUINENES S OF TRANSACTIONS BEYOND DOUBT BY EXPLAINING FIRSTLY THE SOURCE , SECONDLY THE SOURCE OF SOURCE AND THIRDLY THE SOURCE OF SOURCE OF SOURCE. MOREOVER, THE SEVEN SHARE APPLIC ANTS HAD DULY CONFIRMED THE FACT OF MAKING INVESTMENT IN SHARE CAPITAL IN THE ASSESSEE COMPANY AND THE TWO JUTE ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 22 COMPANIES HAD ALSO CONFIRMED THE FACT OF HAVING MAD E THE PAYMENTS TO THE ASSESSEE COMPANY ON BEHALF OF THE SEVEN SHARE APPLICANTS. H ENCE THE DECISION RELIED UPON BY THE LEARNED DR ON THE AFORESAID DECISION IS NOT APP LICABLE TO THE FACTS OF THE INSTANT CASE. 7.12. WITH REGARD TO THE CASE RELIED UPON BY THE LE ARNED DR ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF NAVODAYA CASTLE ( P) LTD VS CIT REPORTED IN (2015) 56 TAXMANN.COM 18 (SC) IS CONCERNED, WE FIND THAT THE ISSUE BEFORE THE HONBLE APEX COURT WAS WHETHER AN ADDITION TOWARDS CASH CREDIT U/S 68 OF THE ACT COULD BE MADE IN THE EVENT OF ASSESSEE FILING CERTI FICATE OF INCORPORATION , PAN FOR THE PURPOSE OF IDENTIFICATION OF SUBSCRIBER COMPANY ESP ECIALLY WHEN THERE WAS MATERIAL TO SHOW THAT SUBSCRIBER WAS A PAPER COMPANY AND NOT A GENUINE INVESTOR. IN THESE CIRCUMSTANCES, THE SPECIAL LEAVE PETITION FILED BY THE ASSESSEE WAS DISMISSED BY THE HONBLE APEX COURT. WHEREAS, IN THE INSTANT CASE , THERE IS NO MATERIAL THAT IS BROUGHT ON RECORD TO PROVE THAT THE SEVEN SHARE APPLICANTS WERE PAPER COMPANIES EXCEPT MERELY MAKING A WILD ALLEGATION BASED ON SURMISE AND CONJE CTURE. HENCE THE FACTS OF THAT CASE ARE DISTINGUISHABLE FROM THE FACTS OF THE INST ANT CASE BEFORE US. IN THESE FACTS AND CIRCUMSTANCES AND RESPECTFULLY F OLLOWING THE JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE IN FAVOUR OF THE ASSESSEE, THERE IS NO NEED TO TREAT THE RECEIPT OF SHARE CAPITAL FROM SEVEN SHARE APPLICANTS AS UNE XPLAINED U/S 68 OF THE ACT. 7.13. WE FIND THAT THE LEARNED CIT(A) HAD APPLIED THE PROVISIONS OF BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988 AS UNDER:- SECTION 3- PROHIBITION OF BENAMI TRANSACTIONS (1) NO PERSON SHALL ENTER INTO ANY BENAMI TRANSACTION. (2) NOTHING IN SUB-SECTION (1) SHALL APPLY TO THE PURCH ASE OF PROPERTY BY ANY PERSON IN THE NAME OF HIS WIFE OR UNMARRIED DAUGHTE R AND IT SHALL BE PRESUMED, UNLESS THE CONTRARY IS PROVED, THAT THE S AID PROPERTY HAD BEEN PURCHASED FOR THE BENEFIT OF THE WIFE OR THE UNMARR IED DAUGHTER. ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 23 (3) WHOEVER ENTERS INTO ANY BENAMI TRANSACTION SHALL BE PUNISHABLE WITH IMPRISONMENT FOR A TERM WHICH MAY EXTEND TO THREE Y EARS OR WITH FINE OR WITH BOTH. (4) NOTWITHSTANDING ANYTHING CONTAINED IN THE CODE OF C RIMINAL PROCEDURE, 1973, AN OFFENCE UNDER THIS SECTION SHALL BE NON-CO GNIZABLE AND BAILABLE . WE FIND THAT THE LEARNED CIT(A) HAD NOT BROUGHT ANY MATERIAL OR EVIDENCE ON RECORD TO PROVE AS TO HOW HE HAS REACHED TO A CONCLUSION T HAT THE SUBJECT MENTIONED TRANSACTIONS WOULD FALL WITHIN THE AMBIT OF BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988. ON THE CONTRARY, THE EVIDENCES FILED BY TH E ASSESSEE ARE STARING ON US AND THE SAME CANNOT BE BRUSHED ASIDE OR SWEPT UNDER THE CAR PET. MOREOVER, IT IS WELL SETTLED THAT IT IS THE DUTY OF THE PERSON TO PROVE THAT THE SUBJECT MENTIONED TRANSACTIONS ARE BENAMI TRANSACTIONS BY ADDUCING PROPER LEGAL EVIDEN CES BECAUSE HE IS THE PERSON WHO IS ASSERTING THE SAID ALLEGATION. WE WOULD LIKE T O PLACE RELIANCE ON THE FOLLOWING DECISIONS IN SUPPORT OF OUR PROPOSITION :- (A) DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF P. SATYANARAYA N MURTY VS STATE OF ANDHRAPRADESH REPORTED IN (1992) 4 SCC 39 DATED 22.7.1992 8. THOUGH IT IS NOT NECESSARY TO CITE ALL THOSE D ECISIONS, IT WILL SUFFICE TO REFER TO THE RULE LAID DOWN BY BHAGWATI, J. , AS HE THEN WAS IN KRISHNANAND AGNIHOTRI VS STATE OF M.P. . IN THAT C ASE, IT WAS CONTENDED THAT THE AMOUNTS LYING IN FIXED DEPOSIT IN THE NAME OF ONE SHANTI DEVI WAS AN ASSET BELONGING TO THE APPELLANT AND THAT SHANTI DEVI WAS A BENAMIDAR OF THE APPELLANT. THE LEARNED JUDGE SPEAKING FOR T HE BENCH HAS DISPOSED OF THAT CONTENTION HOLDING THUS: IT IS WELL SETTLED THAT THE BURDEN OF SHOWING THAT A PARTICULAR TRANSACTION IS BENAMI AND THE OWNER IS NOT THE REAL OWNER ALWAYS R ESTS ON THE PERSON ASSERTING IT TO BE SO AND THIS BURDEN HAS TO BE STR ICTLY DISCHARGED BY ADDUCING LEGAL EVIDENCE OF A DEFINITE CHARACTER WHI CH WOULD EITHER DIRECTLY PROVE THE FACT OF BENAMI OR ESTABLISH CIRC UMSTANCES UNERRINGLY AND REASONABLY RAISING AN INFERENCE OF THAT FACT. T HE ESSENCE OF BENAMI IS THE INTENTION OF THE PARTIES AND NOT UNOFTEN, SUCH INTENTION IS SHROUDED IN A THICK VEIL WHICH CANNOT BE EASILY PIERCED THROUGH. BUT SUCH DIFFICULTIES DO NOT RELIEVE THE PERSON ASSERTING THE TRANSACTION TO BE BENAMI OF THE SERIOUS ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 24 ONUS THAT RESTS ON HIM NOR JUSTIFY THE ACCEPTANCE O F MERE CONJECTURES OR SURMISES AS A SUBSTITUTE FOR PROOF. (B) IT WAS ALSO HELD BY THE HONBLE SUPREME COURT IN THE CASE OF JAYDAYAL PODDA R (DECEASED) THROUGH L.R.S AND ANOTHER VS MST.BIBI HA ZRA AND OTHERS IN CIVIL APPEAL NO. 1759 OF 1967 DATED 19.10.1973 REPORTED I N (1974) 1 SCC 3 THAT :- 6. IT IS WELL SETTLED THAT THE BURDEN OF SHOWING T HAT A PARTICULAR TRANSACTION IS BENAMI AND THE OWNER IS NOT THE REAL OWNER ALWAYS RESTS ON THE PERSON ASSERTING IT TO BE SO AND THIS BURDEN HA S TO BE STRICTLY DISCHARGED BY ADDUCING LEGAL EVIDENCE OF A DEFINITE CHARACTER WHICH WOULD EITHER DIRECTLY PROVE THE FACT OF BENAMI OR E STABLISH CIRCUMSTANCES UNERRINGLY AND REASONABLY RAISING AN INFERENCE OF T HAT FACT. THE ESSENCE OF BENAMI IS THE INTENTION OF THE PARTIES AND NOT UNOF TEN, SUCH INTENTION IS SHROUDED IN A THICK VEIL WHICH CANNOT BE EASILY PIE RCED THROUGH. BUT SUCH DIFFICULTIES DO NOT RELIEVE THE PERSON ASSERTING TH E TRANSACTION TO BE BENAMI OF THE SERIOUS ONUS THAT RESTS ON HIM NOR JU STIFY THE ACCEPTANCE OF MERE CONJECTURES OR SURMISES AS A SUBSTITUTE FOR PR OOF. THE REASON IS THAT A DEED IS A SOLEMN DOCUMENT PREPARED AND EXECUTED A FTER CONSIDERABLE DELIBERATION, AND THE PESON EXPRESSLY SHOWN AS THE PURCHASER OR TRANSFEREE IN THE DEED, STARTS WITH THE INITIAL PRE SUMPTION IN HIS FAVOUR THAT THE APPARENT STATE OF AFFAIRS IS THE REAL STATE OF AFFAIRS. THOUGH THE QUESTION, WHETHER A PARTICULAR SALE IS BENAMI OR NO T, IS LARGELY ONE OF FACT, AND FOR DETERMINING THIS QUESTION, NO ABSOLUTE FORM ULAE OR ACID TEST, UNIFORMLY APPLICABLE IN ALL SITUATIONS, CAN BE LAID DOWN ; YET IN WEIGHING THE PROBABILITIES AND FOR GATHERING THE RELEVANT IN DICIA, THE COURTS ARE USUALLY GUIDED BY THESE CIRCUMSTANCES : (1) THE SO URCE FROM WHICH THE PURCHASE MONEY CAME ; (2) THE NATURE AND POSSESSION OF THE PROPERTY , AFTER THE PURCHASE ; (3) MOTIVE, IF ANY, FOR GIVING THE TRANSACTION A BENAMI COLOUR ; (4) THE POSITION OF THE PARTIES AND THE RE LATIONSHIP, IF ANY, BETWEEN THE CLAIMANT AND THE ALLEGED BENAMIDAR; (5) THE CUS TODY OF THE TITLE-DEEDS AFTER THE SALE AND (6) THE CONDUCT OF THE PARTIES C ONCERNED IN DEALING WITH THE PROPERTY AFTER THE SALE. 7. THE ABOVE INDICIA ARE NOT EXHAUSTIVE AND THEIR E FFICACY VARIES ACCORDING TO THE FACTS OF EACH CASE. NEVERTHELESS NO.1, VIZ., THE SOURCE WHENCE THE PURCHASE MONEY CAME, IS BY FAR THE MOST IMPORTANT TEST FOR DETERMINING WHETHER THE SALE STANDING IN THE NAME O F ONE PERSON, IS IN REALITY FOR THE BENEFIT OF ANOTHER . ITA NO. 1229/KOL/2012-B-AM M/S.WELLMAN WACOMA LTD 25 RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRECE DENTS OF HONBLE APEX COURT , WE HOLD THAT THE LEARNED CIT(A) DISMISSING THE PLEA OF THE ASSESSEE, ON THE GROUND THAT THE TRANSACTIONS OF RECEIPT OF SHARE CAPITAL FROM S EVEN SHARE APPLICANTS ARE IN VIOLATION OF PROVISIONS OF BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988, IS NOT JUSTIFIED AND UNWARRANTED. 8. HENCE THE ADDITION MADE U/S 68 OF THE ACT DESER VES TO BE DELETED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, THE GROUND S RAISED BY THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 -4- 2 016 SD/- SD/- ( S.S. VISHWANETHRA RAVI, JUDICIAL MEMBER ) (M. BA LAGANESH, ACCOUNTANT MEMBER) DATE 13 -4 -2016 COPY OF THE ORDER FORWARDED TO:- 1.. THE APPELLANT/ASSESSEE: M/S. WELLMAN WACOMA LT D TOWER HOUSE 2A, CHOWRINGHEE SQUARE, 3 RD FLOOR, KOLKATA-69. 2 THE RESPONDENT/DEPARTMENT: THE JOINT COMMISSIONER INCOME TAX (OSD) CIRCLE-8, AAYAKAR BHAVAN, P-7 CHOWRINGHEE SQUARE, 5 TH FL., KOL-69. 3 /THE CIT, 4.THE CIT(A ) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS