M/s. Sham Mohan Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1261/DEL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 7070 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 03-08-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 22-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: C S AGGARWAL
• Keywords: Unexplained cash credit; Additional evidence; Question of law
• Section: 143(3); 133(6); 143(1); 195; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `A : NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T.A.NO.1261/DEL/2010 ASSESSMENT YEAR : 2006-07 M/S. SHAM MOHAN PVT. LTD., INCOME-TAX OFFICER, 1-A, 1 ST FLOOR, SAGAR APARTMENTS, VS. WARD-8(1), NEW DELHI. 6, TILAK MARG, NEW DELHI. PAN: AAACSO282R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.S. AGGARWAL, SR. ADVOCATE & SHRI GAUTAM JAIN. RESPONDENT BY : SHRI KIS HORE B., SR. DR. O R D E R PER C.L. SETHI, JUDICIAL MEMBER. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER, DATED 4 TH MARCH, 2010, PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) IN THE MATTER OF AN ASSESSMENT MADE BY THE ASSESSING OFFICER UNDE R SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (THE ACT) FOR THE ASSESSMENT Y EAR 2006-07. 2 2. THE VARIOUS GROUNDS OF APPEAL RAISED BY THE ASSE SSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A) IN CONFIRMING THE A DDITION OF RS.1,00,00,000/- ON ACCOUNT OF SHARE APPLICATION M ONEY RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. 3. IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF I NCOME DECLARING LOSS OF RS.3,814/- ON 08.11.2006. THE RETURN WAS INITIALLY PROCESSED UNDER SEC. 143(1) OF THE ACT, BUT LATER ON PICKED UP FOR SCRUT INY. THE ASSESSING OFFICER THEN ISSUED NOTICE UNDER SEC. 143(2), WHICH WAS DUL Y SERVED ON THE ASSESSEE. IN RESPONSE TO THE NOTICES ISSUED BY THE AO, THE AS SESSEES ACCOUNTANT AND AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE AO AN D FILED DETAILS. 4. THE ASSESSEE COMPANY WAS INCORPORATED IN OCTOBER , 1990 AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF FABRICS FROM SYNTHETIC POLYESTER. HOWEVER, DURING THE YEAR UNDER CONSIDER ATION, THE BUSINESS WAS TOTALLY DORMANT AND IT EARNED ONLY INCOME ON INVEST MENTS MADE IN MUTUAL FUNDS DURING THE YEAR. 5. ON PERUSAL OF THE BALANCE-SHEET, IT WAS REVEALED TO THE AO THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS RECE IVED SHARE APPLICATION MONEY AMOUNTING TO RS.1,00,00,000/- FROM FOLLOWING 17 PARTIES:- 1. M/S. A.K.G. PORTFOLIO PVT. LTD. 2. M/S. WINSOM PORTFOLIO PVT. LTD. 3. M/S. S.R.G. CONSTRUCTION PVT. LTD. 4. M/S. ASHOK SOFTWARE PVT. LTD. 3 5. M/S. RAMAYA POWER SYSTEM PVT. LTD. 6. M/S. PASSION INVESTMENT PVT. LTD. 7. M/S. A.K.G. BUILDERS PVT. LTD. 8. M/S. R.S.G. CHEMICALS PVT. LTD. 9. M/S. WEAL IRON & STEEL PVT. LTD. 10. M/S. FUNTIME TRAVELS PVT. LTD. 11. M/S. BESON PORTFOLIO PVT. LTD. 12. M/S. BECHAN BUILDERS PVT. LTD. 13. M/S. SHIV SHAMBHU PAPER PVT. LTD. 14. M/S. JINDAL FRAGRANCES PVT. LTD. 15. M/S. FUNTIME ADVERTISING PVT. LTD. 16. M/S. SHIV SHAMBHU GARMENTS PVT. LTD. 17. M/S. CITO GARMENTS PVT. LTD. 6. THE ASSESSEES AUTHORIZED CAPITAL WAS ONLY RS.25 ,00,000/- DIVIDED INTO 25000 SHARES OF RS.100/- EACH. DURING THE YEA R THE ASSESSEE HAS EXPLAINED THAT THE ASSESSEE HAS RECEIVED SHARE APPL ICATION MONEY FROM 17 PARTIES FOR ALLOTMENT OF 15000 SHARES OF RS.100/- E ACH WITH A PREMIUM OF RS.1900/- PER SHARE. 7. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO SUBMIT COMPLETE POSTAL ADDRESS OF THE SHARE APPLICANTS SO THAT THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S COULD BE ENQUIRED INTO BY THE AO. THE ADDRESSES WERE SUBMITTED BY THE ASS ESSEE TO THE AO. THE AO THEN ISSUED NOTICES UNDER SEC. 133(6) TO ALL THE PARTIES CALLING FOR INFORMATION, OUT OF WHICH 13 LETTERS WERE RECEIVED BACK WITH THE REMARK NO SUCH PERSON. THE AO THEN, ISSUED A LETTER TO THE ASSESSEE ON 16.06.2008 ASKING IT TO EXPLAIN AS TO WHY THE AMOUNT RECEIVED FROM THESE PARTIES BE NOT 4 TREATED AS UNEXPLAINED MONEY OF THE ASSESSEE AS THE IR IDENTITY COULD NOT BE VERIFIED. IN THE REST 4 CASES, HOWEVER, THERE WAS NO COMPLIANCE. THE ASSESSEE THEN, VIDE LETTER DATED 18.08.2008 SUBMITT ED A FRESH LIST GIVING ADDRESSES OF THESE PARTIES. ALONG WITH THIS LETTER , THE ASSESSEE SUBMITTED COPIES OF LETTERS ADDRESSED BY THESE PERSONS TO THE COMPANY AT THE TIME OF MAKING THE APPLICATION FOR SHARES, COPY OF CERTIFIC ATION OF INCORPORATION OF SHARE APPLICANT COMPANIES. HOWEVER, THE AO OBSERVE D THAT ALL THESE COVERING LETTERS ARE TYPED OUT IN A SAME FASHION AN D LANGUAGE AND THE LANGUAGE USED WAS THE SAME IN ALL SUCH LETTERS. 8. SINCE IN 4 CASES OUT OF 17 CASES, NO COMPLIANCE WAS MADE BY THE ADDRESSEE, THE AO AGAIN ASKED THE ASSESSEE TO PROVE THEIR IDENTITY, IN RESPONSE TO WHICH, THE ASSESSEE SUBMITTED A LETTER DATED 7.10.2008 GIVING THEIR FRESH ADDRESSES, FILING CONFIRMATION FROM THO SE PERSONS. WITH REGARD TO THE 13 PARTIES, AFTER RECEIVING THE NEW ADDRESS, TH E AO DEPUTED INSPECTOR OF HIS WARD TO SERVE SUMMONS, BUT THE INSPECTOR IN HIS REPORT DATED 11.09.2008 SUBMITTED THAT NONE OF THESE PARTIES WERE EXISTING AT THE GIVEN ADDRESS AND SOME OTHER PERSONS WERE OCCUPYING THE CONCERNED PRE MISES. THE INSPECTOR ALSO SUBMITTED HIS REPORT WITH REGARD TO THE REMAIN ING 4 PARTIES STATING THAT THEY WERE ALSO NOT AVAILABLE AT THE GIVEN ADDRESSES . THE AO THEN AGAIN ISSUED SHOW CAUSE NOTICE DATED 20.10.2008 TO THE AS SESSEE STATING THEREIN 5 THAT EVEN THE IDENTITY OF THE CREDITORS OR PERSONS FROM WHOM SHARE APPLICATION MONEY HAS BEEN CLAIMED TO BE RECEIVED, HAS NOT BEEN PROVED AND THUS, INITIAL ONUS CAST UPON THE ASSESSEE, HAS NOT BEEN DISCHARGED. THE AO THEREFORE, ASKED THE ASSESSEE TO SHOW CAUSE AS TO W HY THE AMOUNT OF RS.1,00,00,000/- RECEIVED FROM 17 PARTIES BE NOT TR EATED AS ASSESSEES UNDISCLOSED INCOME UNDER SEC. 68 OF THE ACT. NO SA TISFACTORY REPLY WAS RECEIVED BY THE AO. THE AO THEREFORE, MADE THE ADD ITION OF RS.1,00,00,000/- BEING INCOME FROM UNDISCLOSED SOUR CES ON ACCOUNT OF UNEXPLAINED CREDITS UNDER SEC. 68 OF THE ACT. 9. BEING AGGRIEVED WITH THE ASSESSING OFFICERS ORD ER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A). SOM E ADDITIONAL EVIDENCES IN THE SHAPE OF CONFIRMATION LETTER, AFFIDAVIT, PAN NO. AND BANK STATEMENT OF REMAINING 13 SHAREHOLDERS WERE FURNISHED BY THE ASS ESSEE BEFORE CIT(A). THESE DETAILS REGARDING FOUR SHARE-APPLICANTS WERE ALREADY ON RECORD. THE CIT(A) THAN OBTAINED REMAND REPORT FROM THE AO. DU RING THE REMAND PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE SHAR E-HOLDERS. HOWEVER, THE ASSESSEE REQUESTED THE AO TO ISSUE SUMMON BANK MANA GER WHO HAD OPENED BANK ACCOUNTS OF THE SHAREHOLDER AND TO CALL FOR AS SESSMENT RECORDS OF SHAREHOLDER FROM THE CONCERNED A.O. AND TO OBTAIN N ECESSARY INFORMATION FROM REGISTRAR OF COMPANIES. THE ASSESSEE ALSO REQ UESTED THE A.O. TO 6 SUMMON THE INTRODUCER OF THE BANK ACCOUNT OF THE SH AREHOLDERS IF FOUND APPROPRIATE. THE LIST OF DIRECTORS OF SHARE APPLIC ANT COMPANIES WITH THEIR ADDRESSES AND AFFIDAVITS WERE ALSO FURNISHED. THE ASSESSEE, HOWEVER, EXPRESSED ITS INABILITY TO PRODUCE SHAREHOLDERS ON ITS OWN. THE A.O. ISSUED SUMMONS TO DIRECTORS OF SHAREHOLDER COMPANIES BUT N ONE APPEARED BEFORE HIM. THOUGH THE ASSESSEE APPEARED BEFORE THE A.O. FOR AVAILING THE RIGHT TO CROSS-EXAMINE THE DIRECTORS IN CASE THEIR STATEMENT S ARE RECORDED ON THAT DATE. THE A.O. FURNISHED HIS REMAND REPORT DATED 0 8.02.2010. THE ASSESSEE THEN SUBMITTED ITS REJOINDER ON 25-02-2010. 10. AFTER CONSIDERING THE AOS ORDER AND THE REMAND REPORT OF THE AO OBTAINED DURING THE APPELLATE PROCEEDINGS BY THE CI T(A), AND AFTER CONSIDERING THE ASSESSEES SUBMISSIONS AND REJOINDE R, THE LEARNED CIT(A) CONFIRMED THE ADDITION. 11. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 12. THE DETAILED ARGUMENTS OF THE LEARNED COUNSEL F OR THE ASSESSEE ARE REVOLVED AROUND THE FOLLOWING POINTS:- (1) THAT THE ASSESSEE HAS BEEN ABLE TO DISCHARGE ITS IN ITIAL BURDEN BY ESTABLISHING THE IDENTITY OF THE SHARE HOLDERS, THE IR CAPACITY AND GENUINENESS OF THE TRANSACTIONS BY ADDUCING AND PRO DUCING NECESSARY DOCUMENTARY EVIDENCES. 7 (2) THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE DOC UMENTARY EVIDENCES TENDERED AND PRODUCED BY THE ASSESSEE COM PANY ALONG WITH THE WRITTEN SUBMISSIONS TO ESTABLISH THE IDENT ITY OF THE SUBSCRIBERS OF THE SHARE CAPITAL, CAPACITY OF THE S HARE HOLDERS AND GENUINENESS OF THE SHARE TRANSACTIONS. (3) THE FINDING REPEATEDLY RECORDED BY THE LEARNED CIT( A) THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE IDENTITY OF TH E SHARE HOLDERS IS NOT ONLY ERRONEOUS BUT IS ALSO CONTRARY TO THE FACTS AN D IN FACT IS CONTRADICTORY. (4) THE LEARNED CIT(A) HAS COMPLETELY OVERLOOKED TO APP RECIATE THE DIFFERENCE BETWEEN A CORPORATE ENTITY AND A NON-COR PORATE ENTITY LIKE AN INDIVIDUAL. (5) THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE DEC ISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. M/S. LOVELY EX PORTS (P) LTD. (216 CTR 195) IN ITS RIGHT PERSPECTIVE INASMUCH AS THE CASE OF LOVELY EXPORTS PVT. LTD. WAS A CASE OF PRIVATE LIMI TED COMPANY AND THE SHARES WERE NOT ISSUED THROUGH PUBLIC ISSUE BUT WERE ISSUED THROUGH PRIVATE INVESTMENTS. (6) THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE AS SESSEE COMPANY AS, IN FACT, ALL THE SUBSCRIBERS TO THE SHARE CAPIT AL HAS MADE THE 8 INVESTMENT THROUGH ACCOUNT PAYEE CHEQUES AND ARE PR IVATE LIMITED COMPANY DULY REGISTERED WITH THE REGISTRAR OF COMPA NIES AND WERE ALSO BEING ASSESSED TO TAX AND THUS, THERE WOULD BE NO VALID JUSTIFICATION TO HOLD THAT THE SHARE CAPITAL RECEIV ED BY THE ASSESSEE COMPANY REPRESENTED UNEXPLAINED MONEY OF THE ASSESS EE COMPANY. (7) THE LEARNED CIT(A) HAS FURTHER ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT BURDEN UNDER SEC. 68 OF THE ACT WAS ON THE ASSESSEE COMPANY IN RESPECT OF SHARE CAPITAL DOES NOT EXTEND TO EXPLAIN THE SOURCE OF SOURCE OF THE SHARE HOLDERS, AND THEREFOR E, IRRESPECTIVE OF THE NATURE OF THE SOURCE OF THE FUND IN THE ACCOUNT OF THE SHARE HOLDER, IT OUGHT TO HAVE HELD THAT SUM RECEIVED BY ACCOUNT PAYEE CHEQUE FROM CORPORATE SHARE HOLDERS, WHO ARE EXISTING INCO ME-TAX ASSESSES, DOES NOT REPRESENT UNEXPLAINED CASH CREDIT IN THE H ANDS OF THE ASSESSEE COMPANY. (8) THE LEARNED CIT(A) HAS FURTHER ERRED BOTH IN LAW AN D ON FACTS IN HOLDING THAT THE ASSESSEE COMPANY HAS NOT COOPERATE D WITH THE AO AT THE ASSESSMENT STAGE OR EVEN AT THE REMAND STAGE, W HICH IS NOT FACTUALLY CORRECT IN THE LIGHT OF THE MATERIAL AVAI LABLE ON RECORD. (9) HE FURTHER POINTED OUT THAT THE AO HAS FAILED TO CO MPLY WITH THE REQUEST OF THE ASSESSEE COMPANY TO ISSUE SUMMONS TO THE ROC, AND 9 TO VERIFY THE INCOME-TAX RECORD OF ALL THE SHAREHOL DERS. IN FACT, SUCH VERIFICATION OF I.T. RECORD WAS MADE BY THE AO IN R ESPECT OF 3 SHAREHOLDERS, ALL OF WHICH WERE FOUND TO BE ASSESSE D TO TAX, AND THEREFORE, THE ADDITION WAS SUSTAINED BY HIM IS UNT ENABLE. (10) THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THAT M ERE FACT THAT THERE WAS SOME VARIATION IN THE BANK ACCOUNT FURNISHED BY THE 2 OF THE SHARE APPLICATION MONEY, THAT BY ITSELF COULD NOT B E A GROUND TO CONCLUDE THAT THE SHARE APPLICATION MONEY REPRESENT ED UNEXPLAINED CASH CREDIT AND AS SUCH, THE ADDITION CONFIRMED BY THE LEARNED CIT(A) ON ITS BASIS IS UNJUSTIFIED. (11) THE LEARNED CIT(A) HAS FURTHER ERRED IN RECORDING VARIOUS INFERENCES WHICH ARE CONTRARY TO FACTS AND EVIDENCES ON RECORD , MATERIAL PLACED ON RECORD AND ARE OTHERWISE UNSUSTAINABLE IN LAW. (12) AUTHORITIES BELOW HAVE FAILED TO PROVE AND ESTABLI SH THAT THAT SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE COMPANY DID IN FACT ORIGINATED FROM THE COFFERS OF THE ASSESSEE COMPANY AND SINCE THIS BURDEN HAS NOT BEEN DISCHARGED BY THE A.O, THE ADDI TION COULD NOT BE MADE AND SUSTAINED. (13) THE LEARNED CIT(A) FURTHER ERRED IN OBSERVING THAT THE ASSESSEE COMPANY HAS GIVEN AS MANY AS 6 DIFFERENT ADDRESSES INASMUCH AS THIS 10 OBSERVATION OF THE CIT(A) IS BASED ON MISCONCEPTION AND ON HIS FAILURE TO APPRECIATE THAT THE ADDRESSES NOTED IN C OLUMN 3 WERE EXISTING ADDRESSES OF THE COMPANIES AS PER THE CERT IFICATE OF INCORPORATION WHEREAS THE ADDRESSES GIVEN IN COLUMN 4 WERE ADDRESSES WHICH CAME TO BE KNOWN SUBSEQUENTLY. HE CLARIFIED THAT THE ASSESSEE HAD FURNISHED ANY THREE ADDRESSES AND NOT SIX AS INCORRECTLY STATED BY THE LEARNED CIT(A). 13. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPO N NUMBER OF DECISIONS IN SUPPORT OF HIS CONTENTION THAT THE CIT(A) HAS ER RED IN CONFIRMING THE ADDITION OF RS.1,00,00,000- BY TREATING THE SHARE A PPLICATION MONEY TO BE UNACCOUNTED MONEY OF THE ASSESSEE. THE LIST OF DEC ISIONS ARE PLACED IN PAPER BOOK. 14. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON VARIOUS OBSERVATIONS AND REASONS GIVEN BY THE AUTHORITIES BELOW IN HOLDI NG THAT THE ASSESSEE HAS NOT BEEN ABLE TO DISCHARGE ITS INITIAL BURDEN WITH REGARD TO THE ALLEGED SHARE APPLICATION MONEY CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM SHARE HOLDERS. THE LEARNED DR THEREFORE, CONTENDED THAT THE LEARNED CIT(A) WAS VERY MUCH JUSTIFIED IN CONFIRMING THE ADDITION OF R S.1,00,00,000/- TO BE UNEXPLAINED MONEY IN THE HANDS OF THE ASSESSEE. 11 15. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFUL LY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THE PRESENT CAS E, IT IS CLAIMED BY THE ASSESSEE THAT THE ASSESSEE HAD RECEIVED SHARE CAPIT AL/SHARE APPLICATION MONEY FROM 17 COMPANIES TOTALLING TO RS.1,00,00,000/-. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COMPANY FURNIS HED BEFORE THE AO A COPY OF COVERING LETTER ALONG WITH CHEQUE WHICH WAS RECEIVED BY THE ASSESSEE COMPANY FROM SHARE-APPLICANTS FOR ALLOTMEN T OF SHARES AND ALSO THE COPY OF CERTIFICATE OF INCORPORATION OF 17 INVESTOR S. THESE DOCUMENTS FURNISHED BY THE ASSESSEE BEFORE THE AO ARE PLACED AT PAGES 20 TO 51 OF THE PAPER BOOK NO.1 FILED BY THE ASSESSEE. THESE WERE SUBMITTED BY THE ASSESSEE ALONG WITH ITS LETTER DATED 18.08.2008 FIL ED BEFORE THE AO. IN THIS LETTER, THE ASSESSEE HAS SUBMITTED THAT ALL THE 17 INVESTORS WERE PRIVATE LIMITED COMPANIES AND THEY HAD MADE INVESTMENT THRO UGH ACCOUNT PAYEE CHEQUES AND COPIES OF COVERING LETTERS ALONG WITH C HEQUES AND COPY OF INCORPORATION CERTIFICATE OF INVESTORS WERE BEING F URNISHED THEREWITH IN RESPECT OF ALL THE 17 PARTIES. IN THE COURSE OF AS SESSMENT PROCEEDINGS, IN ORDER TO VERIFY THE GENUINENESS OF THE PARTIES AND THE TRANSACTIONS OF SHARE APPLICATION MONEY, THE AO ISSUED NOTICES UNDER SEC. 133(6) TO ALL THE 17 PARTIES. THE AO VIDE LETTER DATED 16.06.2008 INTIM ATED THE ASSESSEE THAT NOTICES ISSUED TO 13 PARTIES WERE RECEIVED BACK. T HE AO FURTHER VIDE LETTER 12 DATED 26.09.2008 INTIMATED THE ASSESSEE THAT NOTICE S IN RESPECT OF 4 REMAINING PARTIES, HAVE ALSO BEEN RECEIVED UNSERVED . IN OTHER WORDS, THE NOTICES ISSUED TO ALL THE 17 PARTIES WERE RETURNED UNSERVED. THE AO THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AND TO FUR NISH DOCUMENTARY EVIDENCES IN SUPPORT OF ASSESSEES CLAIM, THE ABSEN CE OF WHICH ALLEGED SHARE APPLICATION MONEY SHALL BE ADDED AS INCOME IN THE H ANDS OF THE ASSESSEE COMPANY. THE ASSESSEE THEN FURNISHED ITS EXPLANATI ON VIDE LETTER DATED 07.10.2008 WHERE THE ASSESSEE EXPRESSED THAT REASON FOR NON-SERVICE OF NOTICE WOULD BE BECAUSE OF SEALING OPERATION CARRIE D OUT IN WHOLE CITY RESULTING IN DISLOCATION OF BUSINESS PREMISES OR AC TIVITIES. THE ASSESSEE ALSO INTIMATED THE AO THAT MANY PERSONS SHIFTED FROM ONE AREA TO ANOTHER OR STARTED TO RUN ITS BUSINESS ACTIVITIES FROM ALTERNA TIVE BUSINESS PREMISES. THE ASSESSEE THEN SUBMITTED THE DETAILS OF PAYMENT RECE IVED, COPIES OF BANK ACCOUNT AND PERMANENT ACCOUNT NUMBER OF THE COMPANI ES. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE FURNI SHED FURTHER EVIDENCES BEFORE THE LEARNED CIT(A) COMPRISING OF COPIES OF P AN CARD, COPIES OF BANK STATEMENTS, COPIES OF AFFIDAVITS GIVEN BY THE DIREC TOR OF INVESTOR AND COPY OF CONFIRMATION LETTER FROM THE INVESTORS. THE LEARNE D CIT(A) THEN CALLED FOR A REMAND REPORT FROM THE AO. THE AO FURNISHED REMAND REPORT DATED 8.02.2010 AND IN THE REMAND REPORT THE AO STATED TH AT THE PRINCIPAL OFFICER 13 OF THE INVESTING COMPANY COULD NOT BE TRACED OUT AT THE GIVEN ADDRESSES. THE ASSESSEE FILED A REJOINDER DATED 25.02.2010 IN 19 P AGES TO THE REMAND REPORT SUBMITTED BY THE AO AND FURNISHED ALL THE DETAILS A BOUT THE PRESENT ADDRESSES OF THE INVESTORS, THEIR INCOME-TAX ACCOUNT NUMBER A ND THE BANK STATEMENTS. 16. FROM THE DETAILS SUBMITTED BY THE ASSESSEE AND THE DISCUSSION MADE BY THE AUTHORITIES BELOW, IT IS CLEAR THAT THE PAYMENT OF SHARE APPLICATION MONEY HAS BEEN ROUTED THROUGH BANKING CHANNELS. IN OTHER WORDS, THE SHARE INVESTORS HAD PAID THE AMOUNT TO THE ASSESSEE COMPA NY TOWARDS SHARE APPLICATION MONEY ALONG WITH PREMIUM BY ACCOUNT PAY EE CHEQUES DRAWN ON THE BANK ACCOUNT MAINTAINED BY THEM. IN THE CASE O F SHARE APPLICANT, NAMELY, M/S. AKG PORTFOLIO PVT. LTD., THE SHARE APP LICATION MONEY HAS BEEN RECEIVED BY CHEQUE OF RS.5 LAKH WHICH WAS DEBITED I N THEIR BANK ACCOUNT ON 17.01.2006. PRIOR TO THAT TRANSACTION, 3 CHEQUES A GGREGATING TO RS.5 LAKH WERE CREDITED IN THE ACCOUNT OF THE SHARE APPLICANT ON 11.01.2006. SIMILARLY IN THE CASE OF SHARE APPLICANT NAMELY, M/ S. PASSIM INVESTMENT CO. PVT. LTD. IT IS SEEN THAT SHARE APPLICANT HAD RECEI VED A SUM OF RS.7 LAKH BY CHEQUES AND THAT AMOUNT WAS DEBITED ON 25.01.2006 A ND CREDITED IN THE ASSESSEES BANK ACCOUNT. THE NAME OF THE BANK AND THE BRANCH HAS ALSO BEEN FURNISHED. IN ALL OTHER CASES, THE PAYMENTS HAVE B EEN MADE BY ACCOUNT PAYEE CHEQUES TRANSFERRED FROM THE BANK ACCOUNTS OF THE SHARE APPLICANTS TO 14 THE BANK ACCOUNT OF THE ASSESSEE COMPANY. IT IS TH US NOT IN DISPUTE THAT THE TRANSACTIONS OF PAYMENT OF SHARE-APPLICATION MONEY WERE ROUTED THROUGH BANKING CHANNELS AND ALL THE SHARE-APPLICANTS WERE MAINTAINING BANK ACCOUNT THROUGH WHICH THE PAYMENT OF SHARE-APPLICAT ION MONEY BY ACCOUNT PAYEE CHEQUES WERE RECEIVED. 17. NOW, WE COME TO THE OBJECTION RAISED BY THE LEA RNED CIT(A) THAT IN THE COPY OF BANK STATEMENT OF 2 SHARE APPLICANTS FU RNISHED BY THE ASSESSEE, THERE WERE CERTAIN MANIPULATIONS MADE IN THE ENTRIE S. THE CIT(A) HAS NOTED THE FACT THAT IN THE BANK STATEMENT OF M/S. PASSIM INVESTMENT CO. PVT. LTD. AS SUPPLIED BY THE ASSESSEE, THERE WERE SHOWN A CHE QUE DEPOSITS OF RS.3 LAKH AND RS.4 LAKH ON 23.01.2006 AND THEREAFTER A DEBIT ENTRY OF RS.7 LAKH ON 25.01.2006 AND THEREAFTER, A SUM OF RS.2 LAKH CREDI TED ON 3.02.2006 WHICH WAS WITHDRAWN ON 4.02.2006. HOWEVER, AS PER RECORD OF THE BANK, THERE WAS NO SUCH DEPOSIT OF RS.3 LAKH AND RS.4 LAKH ON 23.01 .2006 BUT THERE WAS A WITHDRAWAL OF RS.7 LAKH ON 25.01.2006 AND OTHER 2 T RANSACTIONS MADE THEREAFTER WERE ALSO TALLIED. THE CIT(A) THEREFORE , FOUND THAT THE DEPOSIT OF 2 CHEQUES OF RS3 LAKH AND RS.4 LAKH ON 23.01.2006 S HOWN IN THE BANK STATEMENT OF M/S. PASSIM INVESTMENT CO. PVT. LTD. A S SUPPLIED BY THE ASSESSEE WAS NOT TRUE. HERE, WE ARE CONCERNED WITH THE PAYMENT OF RS. 7 LAKH FROM M/S. PASSIM INVESTMENT CO. PVT. LTD. TO T HE ASSESSEE COMPANY 15 TOWARDS SHARE APPLICATION MONEY. THE LEARNED CIT(A ) HAS OBTAINED DIRECTLY A BANK STATEMENT FROM THE BANK AUTHORITY AND FOUND THAT THE SUM OF RS.7 LAKH WAS WITHDRAWN ON 25.01.2006 FOR MAKING PAYMENT TO THE ASSESSEE COMPANY. THEREFORE, THE VERY TRANSACTION ENTERED I NTO WITH THE ASSESSEE COMPANY IS BEING TALLIED. THE FACT THAT THE AMOUNT OF RS. 7 LAKH WAS PAID OUT OF THE BANK ACCOUNT OF M/S. PASSIM INVESTMENT C O. PVT. LTD. IS NOT IN DISPUTE. THE DISPUTE IS ONLY WITH REGARD TO THE PR EVIOUS ENTRIES MADE PRIOR TO WITHDRAWAL OF RS.7 LAKH, WHICH IS CONNECTED TO THE SOURCE OF MONEY DEPOSITED IN THE ACCOUNT OF M/S. PASSIM INVESTMENT CO. PVT. LTD. IF ANY UNACCOUNTED MONEY HAS BEEN DEPOSITED IN THE ACCOUNT OF M/S. PASSIM INVESTMENT CO. PVT. LTD. AND THAT IS SOUGHT TO BE C OVERED BY MAKING A FALSE ENTRY IN THE BANK STATEMENT, THAT CAN ONLY BE CONSI DERED IN THE HANDS OF M/S. PASSIM INVESTMENT CO. PVT. LTD. AND NOT IN THE HAND S OF THE ASSESSEE COMPANY. IT IS M/S. PASSIM INVESTMENT CO. PVT. L TD. WHO IS RESPONSIBLE TO EXPLAIN THE MATTER, AND MERE BECAUSE 2 CREDIT ENTRI ES OF RS.3 LAKH AND RS.4 LAKH ON 23.01.2006 WERE FALSELY SHOWN IN THE BANK S TATEMENT FURNISHED TO THE AO, THAT BY ITSELF IS NOT SUFFICIENT TO PROVE A ND ESTABLISH THAT SUM OF RS.7 LAKH TRANSFERRED ON 25.01.2006 FROM THE BANK ACCOUN T OF M/S. PASSIM INVESTMENT CO. PVT. LTD. TO THE ASSESSEES ACCOUNT IS NOT TRUE. MOREOVER, IT HAS BEEN ADMITTED BY THE CIT(A) THAT THERE WAS A WI THDRAWAL OF RS. 7 LAKH 16 ON 25.01.2006 FROM THE BANK ACCOUNT OF M/S. PASSIM INVESTMENT CO. PVT. LTD. TO THE ASSESSEES ACCOUNT. THEREFORE, THE TRA NSACTION BETWEEN THE ASSESSEE AND M/S. PASSIM INVESTMENT CO. PVT. LTD. I S PROVED AND ESTABLISHED. THE CIT(A) HAS ALSO POINTED OUT ABOUT THE BANK STAT EMENT OF M/S. A.K.G. PORTFOLIO PVT. LTD., WHICH HAS INVESTED RS. 5 LAKH TOWARDS SHARE APPLICATION MONEY WITH THE ASSESSEE COMPANY. M/S. A.K.G. PORTF OLIO PVT. LTD. WAS MAINTAINING THE BANK ACCOUNT WITH ABN AMRO BANK, NE W DELHI. THE CIT(A) HAS OBTAINED DIRECTLY A BANK ACCOUNT OF M/S. AKG PORTFOLIO PVT. LTD. FROM ABN AMRO BANK. AS PER THE RECORD OF THE BANK AUTHORITY, THE ENTRY OF RS.5 LAKH FROM ACCOUNT OF M/S. A.K.G. PORT FOLIO PVT. LTD. TO THE ASSESSEE COMPANY IS ESTABLISHED. WHAT WAS NOT ESTA BLISHED WAS ONLY DEPOSIT OF CHEQUE OF RS.1,50,000/- ON 11.01.2006, AGAIN RS. 1,50,000/- ON 11.01.2006 AND RS.2 LAKH ON 11.01.2006 AS SHOWN CR EDITED IN THE ACCOUNT OF M/S. A.K.G. PORTFOLIO PVT. LTD. AS DISCUSSED ABOVE IN THE CASE OF M/S. PASSIM INVESTMENT CO. PVT. LTD., THE DISCREPANCY PO INTED OUT BY THE LEARNED CIT(A) HAS NO RELEVANCY TO THE CORRECTNESS OF VERY TRANSACTION OF PAYMENT OF MONEY TO THE ASSESSEE, AND BECAUSE OF THAT REASON T HE PAYMENT OF RS.5 LAKH BY M/S. A.K.G. PORTFOLIO PVT. LTD. TO THE ASSESSEE COMPANY CANNOT BE SAID TO BE UNPROVED. THEREFORE, THIS DISCREPANCY CANNOT BE THE BASIS TO HOLD THAT THE ASSESSEE DID NOT RECEIVE ANY MONEY THROUGH BANKING CHANNEL FROM THESE 2 17 SHAREHOLDERS, AND FROM OTHER SHAREHOLDERS ALSO. TH IS SORT OF REASON GIVEN BY THE CIT(A) IN CONFIRMING THE ADDITION, IN OUR CONSI DERED VIEW, IS NOT JUSTIFIED. 18. THE OTHER MAIN REASONS GIVEN BY THE AO AS WELL AS BY THE LEARNED CIT(A) THAT THE SHARE APPLICANTS WERE NOT FOUND EXI STING AT THE GIVEN ADDRESSES IN SPITE OF VARIOUS NOTICES ISSUED TO THE M, WHICH COULD NOT BE SERVED BUT WERE RETURNED UNSERVED. IN THIS CONNECT ION, WE FIND THAT THE ASSESSEE HAS FURNISHED BEFORE THE AO AS WELL AS BEF ORE THE LEARNED CIT(A) THE DETAILS OF PERMANENT ACCOUNT NUMBERS AND BANK S TATEMENTS OF THE SHARE APPLICANTS. WHATEVER INFORMATION WERE AVAILABLE WI TH THE ASSESSEE WITH REGARD TO THE PRESENT WHEREABOUTS OF THE SHARE APPL ICANT COMPANIES INCLUDING THEIR BANK ACCOUNT, ROC DETAILS AND PAN A S WELL AS AFFIDAVIT, WERE ALL SUBMITTED BY THE ASSESSEE TO THE LOWER AUT HORITIES. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VI CTOR ELECTRODES LTD. IN ITA NO. 586 OF 2010 VIDE ITS JUDGMENT DELIVERED ON 12.05.2010, HAS HELD THAT THERE WAS NO LEGAL OBLIGATION ON THE ASSESSEE TO PRODUCE SOME DIRECTOR OR OTHER REPRESENTATIVE OF THE SHARE APPLICANT COMP ANIES BEFORE THE AO; AND, THEREFORE, FAILURE OF ASSESSEE TO PRODUCE THEM, COU LD NOT, BY ITSELF, HAVE JUSTIFIED THE ADDITIONS MADE BY THE AO, WHEN THE AS SESSEE HAD FURNISHED DOCUMENTS, ON THE BASIS OF WHICH, THE AO, IF HE SO WANTED, COULD HAVE 18 SUMMONED THEM FOR VERIFICATION; NO ATTEMPT WAS MADE BY THE AO TO SUMMON DIRECTORS OF THE APPLICANT COMPANIES; THE AD DRESSES OF THESE COMPANIES MUST BE AVAILABLE ON THE SHARE APPLICATIO NS, MEMORANDUM AND ARTICLE OF ASSOCIATION AND THEIR INCOME-TAX RETURNS ; IF THE AO HAD ANY DOUBT ABOUT THE IDENTITY OF THE SHARE APPLICANT, HE COULD HAVE SUMMONED THE DIRECTORS OF SUCH COMPANIES; NO SUCH ATTEMPT WAS, H OWEVER, MADE BY HIM. THEREFORE, THE CIT(A) AND ITAT WERE JUSTIFIED IN HO LDING THAT THE IDENTITY OF SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSAC TIONS WERE ESTABLISHED BY THE ASSESSEE. IN THE PRESENT CASE BEFORE US, THE A SSESSEE HAS SUBMITTED THE INCOME-TAX PARTICULARS OF ALL THESE COMPANIES AND O N TEST CHECK BASIS, THE AO VERIFIED THE INCOME-TAX DETAILS OF 3/4 COMPANIES AND FOUND THEM TO BE CORRECT. THEREFORE, SINCE ALL THESE COMPANIES WERE EXISTING ON THE INCOME- TAX RECORD AND THEIR INCOME-TAX PARTICULARS WERE SU BMITTED TO THE AO, THE AO COULD HAVE MADE ENQUIRY THROUGH THE RESPECTIVE A SSESSING OFFICER HAVING JURISDICTION OVER THOSE SHARE APPLICANTS. B UT THE AO HAS NOT DONE SO. THEREFORE, HE CAN NOT NOW SAY THAT THE IDENTITY OF THE SHARE APPLICANTS WAS NOT ESTABLISHED. FURTHERMORE, THE ASSESSEE HAS ALSO FURNISHED BANK STATEMENTS OF ALL THE SHARE APPLICANTS. IN THE CAS E OF THE 2 SHARE APPLICANTS, THE BANK STATEMENTS WERE DIRECTLY COLLECTED BY THE CIT(A). THIS GOES TO SHOW THAT ALL THE SHARE APPLICANTS WERE IN EXISTENC E AND WERE MAINTAINING 19 BANK ACCOUNT AT THE RESPECTIVE BANKS. THEREFORE, T HEIR EXISTENCE AND IDENTITY STANDS ESTABLISHED FROM THIS ANGLE ALSO. 19. THE ASSESSEE HAS ALSO FURNISHED THE COPIES OF C ERTIFICATES OF INCORPORATION OF SHARE APPLICANTS WITH THE REGISTER OF COMPANIES. THESE SHARE APPLICANTS WERE REGISTERED WITH THE REGISTRAR OF COMPANIES AND THEREFORE, FULL DETAILS OF PRESENT DIRECTORS COULD HAVE EASILY OBTAINED BY THE AO FROM THE REGISTRAR OF COMPANIES AS SO HELD BY TH E JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. WINSTRAL PETROCHEMICAL S PVT. LTD. (ITA NO. 592/2010), JUDGMENT DELIVERED ON 12.05.2010, WHERE IT HAS BEEN OBSERVED AND HELD THAT THE AO WAS NOT JUSTIFIED IN ADDING TH E AMOUNT OF SHARE APPLICATION MONEY TO THE INCOME OF THE ASSESSEE MER ELY BECAUSE THE APPLICANTS DID NOT RESPOND TO THE NOTICES SENT TO T HEM; IF THE AO WANTED, HE COULD HAVE FOUND OUT THE CURRENT ADDRESS OF THOSE A PPLICANTS, WHO, ACCORDING TO THE REPORT OF THE INSPECTOR, WERE NOT FOUND FUNC TIONING AT THE ADDRESSES GIVEN TO THE AO, BY SUMMONING THE DIRECTORS, ETC. O F ALL THOSE COMPANIES AND ASKING THEM TO FURNISH THE CURRENT ADDRESS OF T HE COMPANY; THE NAME AND ADDRESSES OF THE DIRECTORS, IF NOT AVAILABLE WITH T HE ASSESSEE, COULD HAVE OBTAINED FROM THE REGISTRAR OF COMPANIES OR FROM TH E BANKS ON WHICH THE CHEQUES WERE DRAWN; NO SUCH ATTEMPT, HOWEVER, WAS M ADE BY THE AO; IN THESE CIRCUMSTANCES, COURT FOUND NO REASON TO DISTU RB THE FINDING OF FACT 20 RECORDED BY THE ITAT. IN THE CASE OF WINSTRAL PETR OCHEMICALS PVT. LTD. (SUPRA) THE HONBLE HIGH COURT HAS OBSERVED AND HEL D AS UNDER:- 7. IT HAS NOT BEEN DISPUTED BEFORE US THAT THE SHA RE APPLICATION MONEY WAS RECEIVED BY THE ASSESSEE COMP ANY BY WAY OF ACCOUNT PAYEE CHEQUES, THROUGH NORMAL BANKIN G CHANNELS. IT IS NOT THE CASE OF THE REVENUE THAT TH E PAYMENT OF SHARE APPLICATION MONEY WAS NOT MADE FROM THE BANK ACCOUNT OF THE APPLICANT COMPANIES. ADMITTEDLY, COPIES OF A PPLICATION FOR ALLOTMENT OF SHARE WERE ALSO PROVIDED TO THE AS SESSING OFFICER. IT IS NOT THE CASE OF THE REVENUE THAT THE SHARE APPLICATIONS WERE NOT SIGNED ON BEHALF OF THE APPLI CANT COMPANIES AND WERE FORGED DOCUMENTS. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE SHARES WERE NOT ACTUALLY ALLOT TED TO THE COMPANIES. THEREFORE, THE COMMISSIONER OF INCOME TA X (APPEALS) AND THE INCOME TAX APPELLATE TRIBUNAL, IN OUR VIEW, WERE JUSTIFIED IN HOLDING THAT THE GENUINENESS OF T HE TRANSACTIONS HAD BEEN DULY ESTABLISHED BY THE ASSES SEE. 8. AS REGARDS IDENTITY OF THE SUBSCRIBERS, THE ASSE SSEE FILED COPIES OF CERTIFICATIONS OF INCORPORATION, PAN CARD S, PAN DETAILS AND COMPANY DETAILS, DOWNLOADED FROM THE SI TE OF DEPARTMENT OF COMPANY AFFAIRS BESIDES WRITTEN CONFI RMATION FROM THE APPLICANTS. IT IS NOT THE CASE OF THE REVE NUE THAT THE COPIES OF CERTIFICATES OF INCORPORATION, PAN CARDS, PAN DETAILS OR COMPANY DETAILS SUBMITTED BY THE ASSESSEE WERE F ORGED DOCUMENTS. IN FACT, THE ASSESSING OFFICER DID NOT E VEN MAKE AN ATTEMPT TO VERIFY THE GENUINENESS OF THESE DOCUMENT S BY SUMMONING THE RECORD OF REGISTRAR OF COMPANIES OR DEPARTMENT OF COMPANY AFFAIRS. IF HE ENTERTAINED AN Y DOUBT ABOUT THE GENUINENESS OF THESE DOCUMENTS, NOTHING P REVENTED HIM FROM SUMMONING THE RECORD FROM THESE AUTHORITIE S. IF THE ASSESSING OFFICER SO DESIRED, THE GENUINENESS OF TH E PAN CARDS AND PAN DETAILS COULD EASILY HAVE BEEN VERIFIED BY HIM FROM THE RECORD AVAILABLE WITH THE DEPARTMENT. THE ASSES SEE COMPANY ALSO FURNISHED WRITTEN CONFIRMATION FROM TH E APPLICANT COMPANIES. ALL THE SHARE APPLICANTS WERE DULY SERVE D WITH THE NOTICES UNDER SECTION 133 (6) OF THE ACT. IN THESE CIRCUMSTANCES, THE FINDING OF COMMISSIONER OF INCOM E TAX 21 (APPEALS) AND INCOME TAX APPELLATE TRIBUNAL THAT TH E IDENTITY OF THE SUBSCRIBERS STOOD DULY ESTABLISHED FROM THE DOCUMENTS PRODUCED BY THE ASSESSEE, CANNOT BE SAID TO BE PERV ERSE AND DOES NOT CALL FOR INTERFERENCE BY THIS COURT. 9. THE FINDING OF FACT RECORDED BY TRIBUNAL, WHICH IS THE FINAL FACT FINDING AUTHORITY, CANNOT BE SAID TO BE PERVERSE MERELY BECAUSE SOME OF THE APPLICANTS HAD A COMMON ADDRESS AND THE INSPECTOR DEPUTED BY THE ASSESSING OFFICER TO MAKE FIELD INQUIRIES DID NOT FIND FIVE APPLICANTS FUNCTI ONING AT THE ADDRESSES PROVIDED TO HIM. THERE IS NO LEGAL BAR TO MORE THAN ONE COMPANIES BEING REGISTERED AT THE SAME ADDRESS. SINCE THE APPLICANT COMPANIES WERE DULY INCORPORATED, WERE IS SUED PAN CARDS AND HAD BANK ACCOUNTS FROM WHICH MONEY WAS TRANSFERRED TO THE ASSESSEE BY WAY OF PAYEE ACCOUNT S CHEQUE, THEY CANNOT BE SAID TO BE NON-EXISTENT, EVEN IF THE Y, AFTER SUBMITTING THE SHARE APPLICATION HAD CHANGED THEIR ADDRESS OR HAD STOPPED FUNCTIONING. 10. IN VIEW OF THE DECISION OF THIS COURT IN THE CA SE OF DIVINE LEASING & FINANCE LTD. (SUPRA), THE IDENTITY OF THE SHARE APPLICANTS WOULD BE ESTABLISHED IF DETAILS OF ADDRE SS OR PAN CARD ARE FURNISHED TO THE DEPARTMENT ALONGWITH THE COPIES OF SHAREHOLDERS REGISTER, SHARE APPLICATION FORM, SHA RE TRANSFER REGISTER, ETC. IN THIS CASE, SHARE APPLICA TION FORMS WERE DULY PRODUCED BEFORE THE ASSESSING OFFICER AND THIS IS NOT THE CASE OF THE REVENUE THAT THAT THE ASSESSING OFF ICER HAD ASKED THE ASSESSEE TO PRODUCE SHAREHOLDERS REGISTE R AND SHARE TRANSFER REGISTERS, BUT THE ASSESSEE COMPANY HAD FAILED TO DO SO. 11. THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDI NG THE AMOUNT OF SHARE APPLICATION MONEY TO THE INCOME OF THE ASSESSEE, MERELY BECAUSE THE APPLICANTS DID NOT RES POND TO THE NOTICES SENT TO THEM. IF THE ASSESSING OFFICER SO W ANTED, HE COULD HAVE FOUND OUT THE CURRENT ADDRESS OF THOSE A PPLICANTS, WHO, ACCORDING TO THE REPORT OF THE INSPECTOR, WERE NOT FOUND FUNCTIONING AT THE ADDRESS GIVEN TO THE ASSESSING O FFICER, BY SUMMONING THE DIRECTORS, ETC. OF THOSE COMPANIES AN D ASKING THEM TO FURNISH THE CURRENT ADDRESS OF THE COMPANY. THE NAMES 22 AND ADDRESSES OF DIRECTORS, IF NOT AVAILABLE WITH T HEY ASSESSEE, COULD HAVE BEEN OBTAINED FROM THE OFFICE OF REGISTR AR OF COMPANIES OR FROM THE BANKS ON WHICH THE CHEQUES W ERE DRAWN. NO SUCH ATTEMPT, HOWEVER, WAS MADE BY THE AS SESSING OFFICER. IN THESE CIRCUMSTANCES, WE FOUND NO REASON TO DISTURB THE FINDING OF FACT RECORDED BY THE ITAT. FOR THE REASONS GIVEN IN THE PRECEDING PARAGRAPHS, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDER ATION. 20. WITH REGARD TO THE CIT(A)S OBSERVATION THAT TH E ASSESSEE HAS FURNISHED AS MANY AS 6 DIFFERENT ADDRESSES OF THE S HARE APPLICANTS, WE FIND THAT THE CIT(A) HAS MISUNDERSTOOD THE MATTER. IN F ACT, ADDRESSES NOTED IN COLUMNS 3, 5, 6 & 7 OF THE CHART PREPARED BY THE CI T(A), THESE WERE THE EXISTING ADDRESSES OF THE SHARE APPLICANTS OR THEIR DIRECTORS AS PER THE DOCUMENTS MADE AVAILABLE AT THE TIME OF MAKING APPL ICATION FOR ALLOTMENT OF SHARES. ADDRESSES MENTIONED AT COLUMN 4 WAS THE AD DRESSES WHICH CAME TO BE KNOWN SUBSEQUENTLY TO THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS AND ADDRESSES IN COLUMN 8 WAS THE ADDRE SSES MADE AVAILABLE BY THE DIRECTORS OF THE COMPANY IN THE COURSE OF REMAN D PROCEEDINGS. THEREFORE, IN THE PRESENT CASE AS AND WHEN THE ASSE SSEE CAME TO KNOW THE DIFFERENT ADDRESSES OF THE DIRECTORS AS MADE AVAILA BLE TO THE ASSESSEE COMPANY BY THE DIRECTORS, THE SAME WERE FURNISHED B Y THE ASSESSEE TO THE AO AND THAT DOES NOT AFFECT IN ANY WAY, THE PROOF O F IDENTITY OF THE SHARE 23 APPLICANTS INASMUCH AS THEIR RELEVANT DOCUMENTS SUC H AS, ROC, REGISTRATION, BANK STATEMENT AND INCOME-TAX PARTICULARS WERE FULL Y FURNISHED. 21. ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BEL OW AND THE VARIOUS DETAILS AND PARTICULARS FURNISHED BY THE ASSESSEE B EFORE THE AUTHORITIES BELOW (WHICH ARE ALSO PLACED IN THE PAPER BOOK FILED BEFO RE US), WE FIND THAT THE FOLLOWING FACTS HAVE BEEN PROVED OR ESTABLISHED:- (1) EACH OF THE SHAREHOLDERS IS CORPORATE ENTITIES REGI STERED WITH THE REGISTRAR OF COMPANIES; (2) THEY ARE DULY ASSESSED TO TAX AND THEIR PAN NUMBERS HAVE BEEN FURNISHED; (3) PARTICULARS ABOUT THE INCOME-TAX ASSESSMENT IN RESP ECT OF 3 SHAREHOLDERS ON TEST CHECK BASIS WERE MADE BY THE A UTHORITIES BELOW AND WERE FOUND TO BE CORRECT; (4) EACH OF THE SHAREHOLDERS HAS BEEN MAINTAINING BANK ACCOUNT THROUGH WHICH PAYMENT WAS MADE; (5) ENTIRE SHARE APPLICATION MONEY FROM EACH OF THE SH AREHOLDERS HAVE BEEN RECEIVED BY ACCOUNT PAYEE CHEQUE. EVEN THE LE ARNED CIT(A) HAS COLLECTED THE BANK STATEMENTS OF 2 SHAREHOLDERS AND FOUND THAT THE TRANSACTION OF PAYMENT OF MONEY TO THE ASSESSEE COMPANY WAS RECORDED THEREIN; 24 (6) ADDRESSES OF SHARE-APPLICANTS OR THEIR DIRECTORS AS PER THE DOCUMENTS MADE AVAILABLE AT THE TIME OF ALLOTMENT OF SHARES H AVE BEEN FURNISHED BY THE ASSESSEE; (7) ADDRESSES OF THE SHAREHOLDERS WHICH CAME TO BE KNOW N SUBSEQUENTLY TO THE ASSESSEE WERE ALSO FURNISHED; (8) ADDRESSES MADE AVAILABLE BY THE DIRECTORS OF THE SH ARE-APPLICANT COMPANIES IN THE COURSE OF REMAND PROCEEDINGS WERE ALSO FURNISHED; (9) COPIES OF THE APPLICATION FOR ALLOTMENT OF SHARES W ERE ALSO PROVIDED BY THE ASSESSEE COMPANY TO THE AO AND IT IS NOT THE CASE OF THE REVENUE THAT THE SHARE APPLICATION MONEY HAS NOT BE EN PAID BY SHARE- APPLICANT COMPANIES BUT ARE FORGED DOCUMENTS; AND IT IS ALSO NOT THE CASE OF THE REVENUE THAT SHARES WERE NOT ACTUALLY A LLOTTED TO THE SHARE- APPLICANT COMPANIES. 22. AT THIS STAGE AGAIN REFERENCE MAY BE MADE TO TH E DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI AT NEW DELHI, DA TED 17.09.2009 IN ITA NO.665/2009, WHERE THE HONBLE HIGH COURT FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS PVT. LTD. (SUPRA) HAS HELD AND OBSERVED AS UNDER:- THREE COMPANIES, VIZ., M/S. KUBERCO SALES PVT. LTD ., M/S. GARG FINVEST PVT. LTD. AND M/S. MAFICO LEASING AND CONSULTANTS PVT. LTD. HAD SUBSCRIBED TO THE SHARE C APITAL ISSUED BY THE ASSESSEE. THE ASSESSING OFFICER HAD SOME DO UBTS ABOUT 25 THE SOURCE OF THE INVESTMENT MADE BY THOSE THREE CO MPANIES AND THEREFORE, MADE CERTAIN INQUIRIES. IN RESPONSE , THE ASSESSEE PRODUCED THE COPY OF THE BANK ACCOUNTS OF ALL THE THREE COMPANIES, THEIR CERTIFICATES OF INCORPORATION AND ALSO THE INCOME TAX RETURNS FILED BY THEM. FROM THE ABOVE D OCUMENTS, THE IDENTITY AND GENUINENESS OF THESE COMPANIES IS CLEARLY ESTABLISHED. THE ONLY GROUND FOR MAKING ADDITION B Y THE AO WAS THAT THE BANK ACCOUNTS OF THE THREE COMPANIES R EVEALED THAT THE AMOUNTS IN CASH WERE DEPOSITED IN THOSE ACCOUNT S AND THUS CHEQUES WERE ISSUED IN FAVOUR OF THE ASSESSEE COMPA NY ALONG WITH SHARE APPLICATION MONEY. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT FOLLOWING THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF COMMIS SIONER OF INCOME TAX VS. LOVELY EXPORTS PVT. LTD., 216 CTR 19 5, THE ITAT HAS RIGHTLY HELD THAT THE ASSESSEE HAD DISCHAR GED ITS BURDEN. IN CASE THOSE THREE COMPANIES HAD RECEIVED CERTAIN CASH, WHICH WERE DEPOSITED IN THE BANK ACCOUNTS, IT WAS FOR THE INCOME TAX DEPARTMENT TO TAKE ACTION AGAINST THE SA ID COMPANIES. WE ARE, THEREFORE, OF THE OPINION THAT NO SUBSTANTI AL QUESTION OF LAW ARISES FOR OUR CONSIDERATION IN THIS APPEAL, WH ICH IS ACCORDINGLY DISMISSED. 23. FROM THIS DECISION, IT IS SEEN THAT IN THAT CAS E, THE ASSESSEE COMPANY PRODUCED COPY OF THE BANK ACCOUNT OF ALL THE THREE COMPANIES, I.E. SHARE APPLICANTS, THEIR CERTIFICATE OF INCORPORATION AND ALSO THE INCOME-TAX RETURNS FILED BY THEM. IN THE LIGHT OF THIS DOCUMENT, THE HONBLE HIGH COURT HAS TAKEN A VIEW THAT THE IDENTITY AND GENUINENESS OF T HESE COMPANIES IS CLEARLY ESTABLISHED. SIMILARLY, IN THE PRESENT CASE, THE A SSESSEE HAD PRODUCED THE COPY OF THE BANK ACCOUNT OF THE SHARE APPLICANTS, T HEIR ROC DETAILS AND THEIR INCOME-TAX PAN NUMBER AND FROM THESE DOCUMENTS, WE MAY HOLD THAT THE 26 IDENTITY AND GENUINENESS OF THE SHARE APPLICANTS ST AND ESTABLISHED. THE HONBLE HIGH COURT FURTHER OBSERVED THAT EVEN IN CA SE THOSE 3 COMPANIES HAVE DEPOSITED CASH AMOUNT IN THEIR BANK ACCOUNTS A ND THEN ISSUED CHEQUE IN FAVOUR OF THE ASSESSEE, IN THAT CASE, IT WAS FOR TH E INCOME TAX DEPARTMENT TO TAKE ACTION AGAINST SUCH COMPANIES. THEREFORE, THI S DECISION ALSO IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. 24. FURTHER, THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CSE OF CIT VS. M/S. DWARKADHISH INVESTMENT (P) LTD. IN ITA 911/2010 AND ITA 913/2010 HAS FOLLOWED THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD. (SUPRA) AND THEN O BSERVED AS UNDER:- 10. WE ARE ALSO INFORMED THAT A SPECIAL LEAVE PETI TION AGAINST THE AFORESAID DIVISION BENCH JUDGMENT IN TH E CASE OF THE RESPONDENT-ASSESSEE HAS BEEN DISMISSED BY THE S UPREME COURT. ACCORDINGLY, WE ARE OF THE OPINION THAT NO QUESTION OF LAW ARISES IN THE PRESENT CASES AS THE MATTER IS FU LLY COVERED BY THE JUDGMENT OF THE SUPREME COURT IN LOVELY EXPORTS (P) LTD. (SUPRA) AS WELL AS THE DIVISION BENCH JUDGMENT OF T HIS COURT IN THE CASE OF THE RESPONDENT-ASSESSEE ITSELF. 11. CONSEQUENTLY, WE ARE OF THE VIEW THAT THE PRESE NT APPEALS AMOUNT TO RELITIGATION. THE SUPREME COURT IN K.K. MODI VS. K.N. MODI AND ORS., (1998) 3 SCC 573 HAS HELD, IT IS AN ABUSE OF THE PROCESS OF THE COURT AND CONTRARY TO J USTICE AND PUBLIC POLICY FOR A PARTY TO RELITIGATE THE SAME IS SUE WHICH HAS ALREADY BEEN TRIED AND DECIDED EARLIER AGAINST HIM. THE REAGITATION MAY OR MAY NOT BE BARRED AS RES JUDICAT A. BUT IF THE SAME ISSUE IS SOUGHT TO BE REAGITATED, IT ALSO AMOU NTS TO AN ABUSE OF THE PROCESS OF THE COURT. 27 12. THOUGH WE WERE INITIALLY INCLINED TO IMPOSE COS TS YET WE ARE OF THE OPINION THAT ENDS OF JUSTICE WOULD BE ME T BY GIVING A DIRECTION TO THE REVENUE TO BE MORE CAREFUL BEFORE FILING APPEALS IN A ROUTINE MANNER. IN OUR VIEW, APPEAL S HOULD NOT BE FILED IN MATTERS WHERE EITHER NO QUESTION OF LAW AR ISES OR THE ISSUE OF LAW IS A SETTLED ONE. WE GIVE THIS DIRECT ION BECAUSE THE `JUDICIAL CAPITAL IN TERMS OF MANPOWER AND RESOURC ES IS EXTREMELY LIMITED. 13. REGISTRY IS DIRECTED TO COMMUNICATE COPIES OF T HIS ORDER TO ALL THE CHIEF COMMISSIONERS OF INCOME TAX IN DEL HI FOR NECESSARY ACTION. WITH THE AFORESAID DIRECTION, TH E PRESENT APPEALS ARE DISMISSED IN LIMINE BUT WITHOUT ANY ORD ER AS TO COSTS. 25. APPLYING THE RATIO OF DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS PVT. LTD. REPORTED IN 216 CTR 195 AND VARIOUS RECENT DECISIONS OF THE HONBLE DELHI HIGH COURT RE FERRED ABOVE, TO THE FACTS OF THE PRESENT CASE, WE FIND THAT THE ADDITION OF R S.1,00,00,000/- ON ACCOUNT OF SHARE-APPLICATION MONEY RECEIVED BY THE ASSESSEE COMPANY AS SUSTAINED BY THE LEARNED CIT(A) IS DESERVED TO BE DELETED. I N THE CASE OF LOVELY EXPORTS PVT. LTD. (SUPRA), THE HONBLE SUPREME COUR T HAS OBSERVED THAT, EVEN IF THE SHARE CAPITAL MONEY IS RECEIVED BY THE ASSESSEE FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO , THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSES SMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOM E OF THE ASSESSEE COMPANY. 28 26. IN THE DECISION IN ITA NO. 516/2009 DATED 7.08. 2009 IN THE CASE OF KUBER FLORITECH PVT. LTD. VS. CIT , THE HONBLE DEL HI HIGH COURT HAS FOLLOWED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS PVT. LD. IN SUPPORT OF THE PROPOSITI ON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE FROM THE ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THAT INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE COMPANY. 27. SINCE, IN THE PRESENT CASE THE ASSESSEE COMPANY HAS PRODUCED COPIES OF THE BANK ACCOUNT OF ALL THE SHARE APPLICANTS, TH EIR CERTIFICATE OF INCORPORATION, THEIR INCOME-TAX PAN NO. AND THE PAY MENT HAS BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES, WE FIND THAT THE IDENTITY AND GENUINENESS OF THE SHARE APPLICANTS HAS BEEN CLEARLY ESTABLISHED. WE, THEREFORE, DELETE THE ADDITION MADE BY THE ASSESSING OFFICER AND FURTHER SUSTAINED BY THE CIT(A). THUS, THE GROUND RAISED BY THE ASSESSEE AGAINST ADD ITION OF RS.1,00,00,000/- ON ACCOUNT OF SHARE CAPITAL MONEY RECEIVED BY THE A SSESSEE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 15 TH OCTOBER, 2010. SD/- SD/- (K.D. RANJAN) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 TH OCTOBER, 2010. 29 ITA NO.1261/DEL/2010 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.