M/s Punjab Basmati Rice Ltd, Amritsar. V. The Joint Commissioner of Income Tax, Amritsar.

ITA 128/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8807 (ITAT-AMRITSAR)
• Duration Of Justice: 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 25-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SSH ASHWANI KUMAR; PADAM BAHL CAS
• Keywords: Unexplained cash credit; Depreciation; Principle of natural justice; Source of fund
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS. 128 & 129(ASR)/2016 ASSESSMENT YEARS:2011-12 & 2012-13 PAN:AAACP9643H M/S. PUNJAB BASMATI RICE LTD. VS. JT. COMMR. OF INC OME TAX, SANGRANA SAHIB, TARN TARAN ROAD, CIRCLE-3, AMRITS AR. AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:S/SH. ASHWANI KUMAR & PADAM BAHL, CAS RESPONDENT BY: SH.TARSEM LAL, DR DATE OF HEARING: 09/03/2016 DATE OF PRONOUNCEMENT: 15/03/2016 ORDER PER A.D. JAIN, JM: THESE ARE THE ASSESSEES APPEALS FOR THE ASSESSMEN T YEARS 2011-12 & 2012-2013 AGAINST THE ORDERS, EACH DATED 15.02.20 16, PASSED BY THE LD. CIT(A)-1, AMRITSAR. 2. FIRST, WE SHALL TAKE UP THE APPEAL IN ITA NO.128 (ASR)/2016, FOR THE AY 2011-12, WHERE THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THE LD. CIT(A)-1, AMRITSAR HAS GROSSLY ERRED IN CONFIRMING THE ACTION OF JOINT COMMISSIONER OF INCOME TAX, CIRCLE- 3, AMRITSAR IN MAKING AN ADDITION OF RS.4,45,00,000/- U/S 68 OF THE INCOME TAX ACT, 1961 IN RESPECT OF FRESH CAP ITAL WITH PREMIUM INTRODUCED BY FOLLOWING PROMOTER SHAREHOLDE RS: ITA NOS. 128 & 129(ASR)/2015 2 S.NO. PARTICULARS AMOUNT 1. SH. KULWINDER SINGH MAKHNI 1,60,00,000/- 2. SH. TEJINDER SINGH MAKHNI 1,45,00,000/- 3. SMT. JASMEET KAUR 90,00,000/- 4. SH. MANJIT SINGH 25,00,000/- 5. SH.PRITPAL SINGH 25,00,000/- TOTAL 4,45,00,000/- 2. THAT LD. CIT(A)-1, AMRITSAR HAS FAILED TO APPREC IATE THAT THE LD. JT. CIT HAD FAILED TO FOLLOW PRINCIPLES OF NATU RAL JUSTICE BY NOT CONFRONTING THE MATERIAL COLLECTED BY HER AGAIN ST THE PROMOTER SHAREHOLDERS AT S.NO. 2 TO 5 MENTIONED IN GROUND NO.1 ABOVE COLLECTED AT THEIR BACK. 3. THAT BOTH THE LD. CIT(A)-1, AMRITSAR AND JT. CIT , CIRCLE-3, AMRITSAR HAVE FAILED TO APPRECIATE THAT THE ASSESSE E COMPANY HAD PROVED THE IDENTITY, CONFIRMATION, CREDITWORTHI NESS AND SOURCE OF FUNDS INVESTED IN THE COMPANY BY THE PROM OTER SHAREHOLDERS THROUGH BANKING CHANNELS. 4. THAT BOTH THE LD. CIT(A)-1, AMRITSAR AND JT. CIT , CIRCLE-3, AMRITSAR HAVE FAILED TO APPRECIATE THAT THE ASSESSE E COMPANY COULD NOT BE ASKED TO EXPLAIN SOURCE OF THE SOURCE AND ORIGIN OF ORIGIN OF FUNDS INVESTED BY THE PROMOTERS SHAREH OLDERS. 5. THAT BOTH THE LD. CIT(A)-1, AMRITSAR HAS FAILED TO APPRECIATE THE CASE LAWS RELIED UPON BY THE ASSESSEE REGARDIN G THE PROPOSITION THAT THE SOURCE OF THE SOURCE AND ORIGI N OF ORIGIN OF FUNDS COULD NOT HAVE BEEN ENQUIRED INTO BY THE A SSESSING OFFICER. 3. THE FACTS OF THE CASE ARE THAT DURING THE ASSESS MENT PROCEEDING, IT WAS SEEN THAT THE ASSESSEE HAD MADE ADDITIONS IN TH E SHARE CAPITAL AND THE SHARE PREMIUM ACCOUNT, AS FOLLOWS:- PARTICULARS 31.03.2011 31.03.2010 SHARE CAPITAL AUTHORISED SHARE CAPITAL 2000000 EQUITY SHARE OF 10% EACH 2,00,00,000 2,00,00,000 ISSUED AND PAID UP CAPITAL 1535605 EQUITY SHARES OF RS.10/- EACH SHARE APPLICATION 1,53,56,050.00 2.40.00.000.00 3,93,56,050.00 1,09,06,050.00 1.07.16.000.00 2,16,22,050.00 ITA NOS. 128 & 129(ASR)/2015 3 RESERVES & SURPLUS DEPRECIATION RESERVE PROFIT & LOSS A/C SHARE PREMIUM A/C 3,76,10,866.46 5,13,77,858.87 9.21.04.450.00 18,10,93,175.33 3,01,45,677.07 5,05,43,897.55 5.20.54.450.00 13.27.44.024.62 CONSIDERING THAT THE ASSESSEE HAD MADE AN ADDITION OF RS.44,50,000/- IN THE SHARE CAPITAL/SHARE APPLICATION ACCOUNT AND RS. 4,00,50,000/- IN THE SHARE PREMIUM ACCOUNT, IT WAS ASKED TO SUBMIT THE S OURCE OF SUCH INVESTMENT, VIDE QUESTIONNAIRE DATED 01.08.2013. 3.1 THE ASSESSEE PROVIDED THE DETAILS OF THE INVESTMENT MADE, VIDE LETTER DATED 23.12.2013, WHICH DETAILS ARE AS FOLL OWS:- SHARE CAPITAL NAME SHARES SHARE CAPITAL(RS.) SHARE PREMIUM (RS.) KULWINDER SINGH 1,60,000 16,00,000 1,44,00,000 TEJINDER SINGH 1,45,000 - 14,50,000 1,30,50,000 JASMEET KAUR 90,000 9,00,000 81,00,000 MANJIT SINGH 25,000 2,50,000 22,50,000 PRITPAL SINGH 25,000 2,50,000 22,50,000 TOTAL 44,50,000 4,00,50,000 AS PER THE ASSESSEE, THE FIVE DIRECTORS OF THE COMP ANY HAVE MADE THE ABOVE-MENTIONED INVESTMENTS IN THE SHARE CAPITAL OF THE COMPANY DURING THE YEAR. SHARE APPLICATION WAS STATED TO BE RECEIV ED FROM M/S B.N.EXPORTS TO THE TUNE OF RS.240 LACS. 3.2. THE ASSESSEE WAS ASKED TO JUSTIFY THE SOURCE OF SHARE CAPITAL AND SHARE PREMIUM INTRODUCED DURING THE YEAR IN THE BOO KS OF THE ASSESSEE. IN REPLY THE ASSESSEE SUBMITTED THAT THE UNSECURED LOANS HAD BEEN RAISED FROM TWO PARTIES NAMELY SH.RAM MEHAR, 2632 G .F . GALI LALTEN ITA NOS. 128 & 129(ASR)/2015 4 WALI, NAYA BAZAR, DELHI AND SH. PARVEEN KUMAR SHARM A, 2640, CHADDA MARKET, NAYA BAZAR, DELHI IN THE HANDS OF THE DIREC TORS WHICH, AS PER THE BANK ACCOUNTS, ARE AS FOLLOWS:- SR.NO. NAME OF THE DIRECTOR NAME OF LENDER DATE AMOUNT 1. TEJTADLER SINGH MAKHNI RAM MEHAR 10.3.2011 20 LAC 11.03.2011 40 LAC / 14.03.2011 45 LAC 15.03.2011 20 LAC TOTAL 125 LACS PARVEEN KR. SHARMA 16.03.2011 20 LACS TOTAL LOAN RECEIVED 145 LACS 2 KULWINDER SINGH MAKHNI RAM MEHAR 10.03.2011 25 LACS 15.03.2011 20 LACS 16.03.2011 35 LACS 21.03.2011 2 LACS TOTAL 82 LACS PARVEEN KR.SHARMA 11.03.2011 35 LACS 12.03.2011 30 LACS TOTAL 14.03.2011 15 LACS 80 LAC TOTAL LOAN RECEIVED 162 LACS 3. JASMEET KAUR RAM MEHAR 15.03.2011 20 LACS PARVEEN KR. SHARMA 11.03.2011 25 LACS 12.03.2011 30 LACS 14.03.2011 15 LACS 70 LACS TOTAL LOAN RECEIVED 90 LACS 4. MANJIT SINGH MAKHNI RAM MEHAR 16.3.2011 25 LACS TOTAL LOAN RECEIVED 25 LACS 5. PRITPAL KAUR PARVEEN KR. SHARMA 17.3.2011 25 LACS TOTAL LOAN RECEIVED 25 LACS 4. THE AO, VIDE SHOW CAUSE NOTICE DATED 14.03.2014, ASKED THE ASSESSEE TO PRODUCE SH. RAM MEHAR AND SH. PARVEEN K UMAR SHARMA ALONGWITH THEIR INCOME TAX DETAILS, AUDITED BALANCE SHEET AND BANK ITA NOS. 128 & 129(ASR)/2015 5 ACCOUNTS AND OTHER DOCUMENTARY PROOFS, INDICATING W HETHER THEY ARE ACTIVE TRADERS IN THIS TRADE AND WHETHER THEY HAD ADEQUATE FINANCIAL STANDING. THE ASSESSEE SUBMITTED, INTER-ALIA, AFFID AVITS OF THESE PERSONS. THE AO CARRIED OUT FURTHER INVESTIGATION AND FOUND THAT THE ASSESSEE HAD NOT ESTABLISHED THE IDENTITY OF THE CREDIT ENTRIES ULTIMATELY REVEALED FROM THESE TWO PERSONS. THE AO HELD AS FOLLOWS: 10.0. IT IS THUS CLEAR FROM THE FACTS DISCUSSED IN ABOVE PARAS UNDER THE HEADINGS IDENTITY, CREDITWORTHINESS AND GENUINE NESS THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUCCESSFULLY DISCHARG ED ITS ONUS RELATING TO SATISFACTORY EXPLANATION OF CREDIT ENTR IES IN SHARE CAPITAL ACCOUNT WHICH ARE ULTIMATELY STATED TO BE RECEIVED FROM THE TWO PARTIES ALREADY MENTIONED ABOVE. THUS, THERE IS COM PLETE SATISFACTION THAT THESE CREDITS FALL WITHIN THE AMB IT OF SECTION 68 OF THE I.T. ACT, 1961. IN FACT, FOR SUCH AN INFERENCE, THERE IS AMPLE LEGAL SUPPORT IN FORM OF MANY JUDICIAL PRONOUNCEMENTS ON THIS ISSUE. 5. AS SUCH, THE AO ASSESSED THE AMOUNT OF RS.4,45,0 0,000/- AS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE ACT. 6. BEFORE THE LD. CIT(A), THE ASSESSEE RAISED, INT ER-ALIA, THE FOLLOWING GROUNDS OF APPEAL: IT IS SUBMITTED THAT ALL THE GROUNDS OF APPEALS AR E IN RESPECT OF ONLY ONE ADDITION OF RS.4.45 CRORES MADE IN THE HANDS OF THE ASSESSEE U/S 68 OF INCOME TAX ACT. THE ASSESSING OFFICER HAS MADE THE ADDITION ON ACCOUNT OF SHARE CAPITAL AND SHARE PREM IUM INTRODUCED BY THE PROMOTER SHARE HOLDERS U/S 68 OF INCOME TAX ACT, 1961 AS PER DETAILS GIVEN BELOW:- S.NO. NAME OF THE PROMOTER SHARE HOLDER AMOUNT (IN CRORES) 1. S.KULWINDER SINGH MAKHNI 1.60 2. S.TEJINDER SINGH MAKHNI 1.45 3. SMT.JASMEET KAUR 0.90 4. S.MANJIT SINGH 0.25 5. S.PRITPAL SINGH 0.25 TOTAL:- 4.45 ITA NOS. 128 & 129(ASR)/2015 6 THE ASSESSEE FILED CONFIRMATION OF THE PROMOTER SHA RE HOLDERS ALONG WITH THEIR BANK STATEMENT SHOWING THE AMOUNT GIVEN TO THE COMPANY. THE PROMOTER SHARE HOLDERS HAD BORRWERED L OANS FROM OUTSIDERS AND THE SAME STOOD DEPOSITED IN THEIR RES PECTIVE BANK ACCOUNT. THEY ALSO FILED AFFIDAVITS OF LENDERS FOR THE LOANS RECEIVED BY THEM. THE ASSESSING OFFICER HOWEVER DID NOT ACCEPT THE AB OVE EVIDENCE AND ASKED THE ASSESSEE AND THE PROMOTER SHAREHOLDER S TO EXPLAIN THE SOURCE FROM WHERE THE PROMOTER SHAREHOLDERS HAV E RECEIVED THE FUND. THE ASSESSING OFFICER FURTHER STARTED INVESTI GATION WITH RESPECT TO THE BANK ACCOUNTS OF THE PROMOTER SHAREH OLDERS. THE ASSESSING OFFICER STARTED THE INVESTIGATION OF SOURCE OF THE SOURCE IN RESPECT OF THE BANK ACCOUNT OF THE PROMOT ER SHAREHOLDERS. THE ASSESSING OFFICER MADE DETAILED INQUIRIES AGAIN ST THE LENDERS AND CONCLUDED THAT BOTH LENDERS NAMELY SH.RAM MEHAR AND SH.PARVEEN KUMAR SHARMA WERE NOT MEN OF MEANS AND T HEREFORE THE SOURCE OF THE SOURCE REMAINED UNEXPLAINED IN TH E HANDS OF PROMOTER SHAREHOLDERS AS WELL THE ASSESSEE. THE ASSESSING OFFICER THEREFORE ISSUED A SHOW CAUSE NOTICE DATED 14.03.2014 AND ALSO ISSUED SUMMONS U/S 131 FOR PERS ONAL APPEARANCE. THE SAME IS REPRODUCED ON PAGES 6 TO 8 OF THE ASSESSMENT ORDER. YOUR HONOUR WILL KINDLY APPRECIATE THAT SUMMONS WER E ISSUED U/S 131 OF THE INCOME TAX ACT, 196 LTO THE MANAGING DIR ECTOR SH. KULWINDER SINGH MAKHNI ONLY AND THE STATEMENT OF SH .KULWINDER SINGH MAKHNI ONLY WAS RECORDED ON 20.03.2014. NO SU MMONS WERE ISSUED AGAINST THE OTHER PROMOTER SHAREHOLDERS AND THEY WERE NOT CONFRONTED WITH THE MATERIAL COLLECTED BY THE ASSES SING OFFICER AT THEIR BACK AND RELIED UPON BY THE FOR MAKING THE AD DITION. THE ADDITIONS MADE BY THE ASSESSING OFFICER IN RESP ECT OF THE FOUR PROMOTER SHAREHOLDERS AMOUNTING TO RS.2.85 CRORES W ERE THEREFORE MADE WITHOUT CONFRONTING THE PROMOTER SHAREHOLDER W ITH THE MATERIAL COLLECTED AT THEIR BACK. THIS AMOUNTS GROS S MISCARRIAGE OF JUSTICE AND THE ADDITIONS SO MADE CANNOT BE SUSTAIN ED AND DESERVE TO BE DELETED. IT IS FURTHER SUBMITTED THAT THE CASE LAWS RELIED U PON BY THE ASSESSING OFFICER AND RELEVANT TO THE CASES WHERE T HE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF THE DEPOSIT. NONE O F THE CASES RELIED UPON BY HER ARE IN RESPECT OF ASSESSEES WHERE SOURC E OF THE SOURCE WAS INVESTIGATED. AGAIN THE ASSESSING OFFICER HAS RELIED UPON THE CAS ES OF PARTNERSHIP FIRM WITHOUT APPRECIATING THAT THERE IS A MATERIAL LEGAL DIFFERENCE BETWEEN A PARTNERSHIP FIRM AND A LIMITED COMPANY. T HE RELIANCE ITA NOS. 128 & 129(ASR)/2015 7 PLACED BY THE ASSESSING OFFICER IN RESPECT OF THE P ARTNERSHIP FIRM CASES IS THEREFORE LEGALLY MISCONCEIVED. THE ASSESS EE HAS PROVED THE IMMEDIATE SOURCE OF THE DEPOSIT, THE IDENTITY O F THE PROMOTER SHAREHOLDER AND THEIR CREDIT WORTHINESS. 7. THE LD. CIT(A) CONFIRMED THE ADDITION HOLDING AS FOLLOWS: 6. I HAVE GONE THROUGH THE GROUNDS OF APPEAL, SUBM ISSION AND THE ASSESSMENT ORDER. IN THIS CASE THE AO HAS MADE AN ADDITION OF RS. 4,45,00,000/- ON ACCOUNT OF CREDITS OF RS. 4,45 ,00,000/- RECEIVED BY THE ASSESSEE COMPANY AS SHARE CAPITAL F ROM ITS DIRECTORS/SHAREHOLDERS. THE AO FURTHER MADE ENQUIRI ES ABOUT THE SOURCE OF FUNDS IN THE HANDS OF DIRECTORS/ SHAREHOL DERS. THE AO HAS RIGHTLY TAKEN REFERENCE OF DECISION OF HONBLE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF CIT JALANDHAR VS M/S UDHA M SINGH & SONS, ITA NO. 112 OF 2000, AS SHE WAS TRYING TO FIN D THE GENUINENESS OF THE SOURCE OF THE SOURCE. THE ASSESSEE IN HIS WRITTEN SUBMISSIONS HAS SUBMITT ED AS UNDER WITH REGARD TO PRINCIPLES OF NATURAL JUSTICE. THE ASSESSING OFFICER MADE DETAILED INQUIRIES AGAI NST THE LENDERS AND CONCLUDED THAT BOTH LENDERS NAMELY SH.R AM MEHAR AND SH.PARVEEN KUMAR SHARMA WERE NOT MEN OF MEANS AND THEREFORE THE SOURCE OF THE SOURCE REMAIN ED UNEXPLAINED IN THE HANDS OF PROMOTER SHAREHOLDER AS WELL THE ASSESSEE. THE ASSESSING OFFICER THEREFORE ISSUED A SHOW CAUSE NOTICE 14.03.2014 AND ALSO ISSUED SUMMONS U/S 131 FOR PER SONAL APPEARANCE. THE SAME IS REPRODUCED ON PAGES 6 TO 8 OF THE ASSESSMENT ORDER. YOUR HONOUR WILL KINDLY APPRECIATE THAT SUMMONS WER E ISSUED U/S 131 OF THE INCOME TAX ACT, 1961TO THE MANAGING DIRE CTOR SH. KULWINDER SINGH MAKHNI ONLY AND THE STATEMENT OF SH .KULWINDER SINGH MAKHNI ONLY WAS RECORDED ON 20.03.2014. NO SU MMONS WERE ISSUED AGAINST THE OTHER PROMOTER SHAREHOLDERS AND THEY WERE NOT CONFRONTED WITH THE MATERIAL COLLECTED BY THE ASSES SING OFFICER AT THE BACK AND RELIED UPON BY THE FOR MAKING THE ADDITION . THE ADDITIONS MADE BY THE ASSESSING OFFICER IN RESP ECT OF THE FOUR PROMOTER SHAREHOLDERS AMOUNTING TO RS.2.85 CRORES W ERE THEREFORE MADE WITHOUT CONFRONTING THE PROMOTER SHAREHOLDER W ITH THE MATERIAL COLLECTED AT THEIR BACK. THIS AMOUNTS GROS S MISCARRIAGE OF ITA NOS. 128 & 129(ASR)/2015 8 JUSTICE AND THE ADDITIONS SO MADE CANNOT BE SUSTAIN ED AND DESERVE TO BE DELETED. IN REFERENCE TO ABOVE PLEA OF THE ASSESSEE IT IS CL EAR FROM RECORD THAT THE AO SUMMONED THE MANAGING DIRECTOR, WHO IS THE P RINCIPAL EXECUTIVE OF THE COMPANY AND IS AWARE ABOUT WHAT IS GOING ON IN THE COMPANY. HENCE THERE IS NO MERIT IN THE PLEA OF THE ASSESSEE THAT WHY OTHER SHAREHOLDER AND DIRECTORS WERE NOT SUMMON ED. THE AO HAS WRITTEN A WELL REASONED ORDER BASED ON M ATERIAL FACTS AND AFTER CONDUCTING DETAILED ENQUIRIES RELATED TO EVERY ASPECT OF THE CASE. IT IS CLEAR FROM THE ORDER THAT THE ULTIMATE PROVIDER OF CREDITS, ARE NOTHING BUT MERE CONDUITS TO PLOUGH ENTRIES IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY. THEREFORE, THE AS SESSEE COMPANY HAS FAILED TO SUCCESSFULLY DISCHARGE THE ON US PLACED ON IT WITHIN THE PROVISIONS OF SECTION 68 OF INCOME TAX A CT, 1961. ACCORDINGLY ADDITION MADE BY THE AO IS JUSTIFIED AN D REASONABLE. HENCE THE ADDITION IS UPHELD. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE WRIT TEN SUBMISSIONS OF THE APPELLANT, AND THE GROUNDS OF AP PEAL ARE DISPOSED OFF AS UNDER:- I) THE GROUND OF APPEAL AT S.NO.L IS DISMISSED. II) THE GROUND OF APPEAL AT S.NO. 2,3,4,56 ARE GENE RAL IN NATURE AND REQUIRES NO ADJUDICATION. 8. BEFORE US, THE ASSESSEE HAS REITERATED ITS CONTE NTIONS BEFORE THE LD. CIT(A), AS ABOVE. FURTHER, IT HAS BEEN SUBMITTED TH AT OTHERWISE TOO, NO SUFFICIENT OPPORTUNITY WAS PROVIDED BY THE AO TO TH E ASSESSEE IN AS MUCH AS THE SHOW CAUSE NOTICE WAS ISSUED ON 14.03.2014 FOR 20.03.2014, WHEREAS THE ASSESSMENT ORDER PASSED ON 30.03.2014. IT HAS BEEN CONTENDED THAT IF THE MATTER IS REMITTED TO THE AO AND SUFFICIENT OPPORTUNITY IS GIVEN, THE ASSESSEE SHALL BE ABLE TO PRODUCE SH. RAM MEHAR AND SH. PARVEEN KUMAR SHARMA ALONGWITH THEIR DETAILS. 9. ON THE OTHER HAND, THE LD. DR PLACED STRONG RELI ANCE ON THE IMPUGNED ORDER. ITA NOS. 128 & 129(ASR)/2015 9 10. ON HEARING THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, WE FIND THE GRIEVANCE OF THE ASSE SSEE TO BE JUSTIFIED. THE SHOW CAUSE NOTICE WAS ISSUED BY THE AO TO THE A SSESSEE ON 14.03.2014, ASKING IT TO PRODUCE, ON 20.03.2014, MR . RAM MEHAR AND MR. PARVEEN KUMAR SHARMA IN PERSON ALONGWITH THEIR INCOME TAX DETAILS, AUDITED BALANCE SHEET AND BANK ACCOUNT AND OTHER DOCUMENTARY PROOF, INDICATING WHETHER THEY WERE ACTIVE TRADERS IN THE TRADE AND WHETHER THEY HAD ADEQUATE FINANCIAL STANDING. THE A SSESSMENT ORDER, HOWEVER, WAS PASSED ON 30.03.2014. IT IS, THUS, EVI DENT THAT THE ASSESSEE WAS NOT PROVIDED ADEQUATE OPPORTUNITY TO DO THE NE EDFUL AS REQUIRED UNDER THE SHOW CAUSE NOTICE. 11. NOW, IT IS PATENT ON RECORD THAT THE ASSESSEE H AS ADEQUATELY PROVED THE IMMEDIATE SOURCE OF THE DEPOSIT, THE IDENTITY O F THE PROMOTER SHAREHOLDERS AND THEIR CREDITWORTHINESS. SO, THE SO URCE OF THE DEPOSIT STANDS ADEQUATELY EXPLAINED BY THE ASSESSEE, THERE BY DISCHARGING ITS ONUS UNDER SECTION 68 OF THE ACT. 12. IN THE FOLLOWING CASE LAWS, IT HAS BEEN HELD TH AT THE ASSESSEE CANNOT BE ASKED TO EXPLAIN THE SOURCE OF THE SOURCE AND THE ORIGIN OF THE ORIGIN OF THE DEPOSIT: I) CIT VS. DAULAT RAM RAWAT MULL, 87 ITR 349 (SC) II) DCIT VS. ROHINI BUILDERS, 256 ITR 360 (GUJ.) III) AARAVALI TRADING CO. VS. ITO, 3 DTR (RAJ.) 199 ITA NOS. 128 & 129(ASR)/2015 10 13. EVEN THE LEGISLATURE WAS AWARE OF THIS EXTANT LEGAL POSITION AND THAT IS WHY THAT W.E.F. 01.04.2013, THE FOLLOWING P ROVISO TO SECTION 68 HAS BEEN ADDED IN THE INCOME TAX ACT, 1961: PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY, (NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTER ESTED)AND THE SUM SO CREDITED CONSISTS OF SHARE APPLICATION MONEY , SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME C ALLED, ANY EXPLANATION OFFERED BY SUCH ASSESSEE COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS (A) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUCH CREDIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALSO OFFERS A N EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED ; AND (B) SUCH EXPLANATION IN THE OPINION OF THE ASS ESSING OFFICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY 14. THIS PROVISO TO SECTION 68 HAS BEEN INSERTED, T O REITERATE, W.E.F. 01.04.2013. THE ASSESSMENT YEAR UNDER CONSIDERATION IS AY 2011-12. THUS, THIS PROVISO IS NOT APPLICABLE TO THE ASSESSM ENT YEAR 2011-12, HAVING CONSCIOUSLY BEEN INSERTED NOT WITH RETROSPEC TIVE EFFECT, BUT W.E.F. 01.04.2013. 15. DESPITE THE ABOVE, THE ASSESSEE IS WILLING TO G O THAT EXTRA MILE IN ORDER TO ESTABLISH EVEN THE SOURCE OF THE SOURCE OF THE DEPOSIT IN QUESTION BY PRODUCING SH. RAM MEHAR AND SH. PARVEEN KUMAR S HARMA ALONGWITH THEIR COMPLETE DETAILS BEFORE THE AO. 16. IN VIEW OF THE ABOVE, THE MATTER IS REMITTED TO THE AO, TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, AFTER AFFORDING DUE AND ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. ALL PLEAS AVAILABLE TO THE ASSESSEE UNDER THE LAW SHALL REMAIN SO AVAILABLE. ITA NOS. 128 & 129(ASR)/2015 11 17. NOW, WE TAKE UP THE APPEAL IN ITA NO.129(ASR)/2 016 FOR THE AY 2012-13. SINCE THE FACTS IN THE PRESENT APPEAL ARE, MUTATIS MUTANDIS, THE SAME AS IN ITA NO.128(ASR)/2016 DECIDED BY US H EREINABOVE, THEREFORE, OUR OBSERVATIONS IN ITA NO.128(ASR)/2016 ARE DIRECTLY APPLICABLE TO THIS APPEAL ALSO AND THE MATTER CONC ERNING THIS APPEAL FOR THE ASSESSMENT YEAR 2012-13 IS ALSO REMITTED TO THE AO ON SIMILAR DIRECTIONS, AS MADE FOR THE AY 2011-12. 18. IN THE RESULT, BOTH THE APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15/03/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/03/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S. PUNJABI BASMATI RICE LTD. SANGRA NA SAHIB, AMRITSAR. 2. THE JT. CIT, CIRCLE-3, AMRITSAR. 3. THE CIT(A), ASR. 4. THE CIT ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR. ITA NOS. 128 & 129(ASR)/2015 12