ITO, New Delhi V. M/s Reliance Marketing Pvt. Ltd., New Delhi

ITA 1310/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86781 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 22-12-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 14-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Unexplained cash credit; Opportunity of cross examination; Question of law; Accommodation entries; Onus to prove
• Section: 68; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. I. C. SUDHIR , JM ITA NO. 1310/DEL/2011 : ASSTT. YEAR : 2002 - 03 INCOME TAX OFFICER , WA RD 15(3), ROOM NO. 223, C. R. BUILDING, I. P ESTATE, NEW DELHI VS M/S RELIANCE MARKETING PVT. LTD., E - 32, GREATER KAILASH ENCLAVE - I, NEW DELHI - 110048 (APPELLANT) (RESPONDENT) PAN NO. A A ACR1525N ASSESSEE BY : SH. R. S. SINGHVI , CA R EVENUE BY : SH. VIKRAM SAHAY , SR. DR DATE OF HEARING : 22.12 .2014 DATE OF PRONOUNCEMENT : 18 .02 .2015 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 09.12.2010 OF LD. CIT(A) - XV III, NEW D ELHI. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 14,50,000/ - MADE BY THE AO U/S 68 BEING BOGUS ACCOMMODATION ENTRY RECEIV ED FROM ENTRY OPERATOR. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (P) LTD. 216 CTR 199 (SC) ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 2 CANNOT BE EXTENDED TO A SITUATION WHERE A MECHANISM HAS BEEN FORMED TO INTRODUCE UNACCOUNTED MONEY IN THE BOOKS OF ACCOUNTS WITH THE HELP OF ACCOMMODATION ENTRY PROVIDERS WHICH HAS BEEN EXPOSED BY DEEP AND DETAILED INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING OF THE DEPART MENT. MOREOVER, THE FACTS IN THE PRESENT CASE ARE DISTINGUISHABLE FROM THE ABOVE CITED CASE. 3. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL. 3 . FROM THE ABOVE GROUND S IT IS GA THERED THAT THE ONLY GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF ADDITION OF RS. 14,50,000/ - MADE BY THE AO U/S 68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 4 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 30.10.2012, DECLARING AN INCOME OF RS. 32,170/ - WHICH WAS PROCESSED U/S 143(1) OF THE ACT. LATER ON, THE A O ISSUED A NOTICE U/S 148 OF THE ACT . I N RESPONSE TO THE SAID NOTICE , T HE ASSESSEE SUBMITTED THAT THE RETURN FILED EARLIER U/S 139 OF THE ACT MAY BE TREATED AS FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED TH AT THE ASSESSEE WAS INVOLVED IN MONEY LAUNDERING BUSINESS AND RECEIVED BOGUS/ACCOMMODATION ENTRIES AND THAT THE A SSESSEE HAD BEEN ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 3 BENEFICIARIES OF THE ACCOMMODATION ENTRY IN THE SHAPE OF BOGUS SHARE CAPITAL/SHARE APPLICATION MONEY. THE AO POINTED OUT THAT AFTER VERIFICATION , FOLLOWING ENTRIES WERE FOUND TO BE BOGUS: S. NO. NAME OF BANK/BRANCH VALUE OF ENTRY DATE ON WHICH ENTRY TAKEN/INSTRUM ENT NO. NAME OF THE HOLDER OF THE ENTRY PROVIDER 1. BO MAHARASTRA/N DSE 3,00,000 19 APR. 01 KRISHNA CINEMA INDIA 2. BO MAHARASTRA/NDSE 2,00,000 01, AUG. 01 KRISHNA CINEMA INDIA 3. BO MAHARASTRA/NDSE/SOUTH EXTENSION 1,00,000 20, A PR. 01 BRHAM PRAKASH AHUJA 4. BO MAHARASTRA/NDSE/SOUTH EXTENSION 1,50,000 20, APR. 01 HARISH KUMAR AGGARWAL 5. BO MAHARASTRA/NDSE/SOUTH EXTENSION 2,00,000 12, MAY 01 PRADEEP KUMAR 6. BO MAHARASTRA/NDSE/SOUTH EXTENSION 2,00,000 12, MAY 01 DEVI RAM GOYAL 7. BO MAHARASTRA/NDSE/SOUTH EXTENSION 1,50,000 12, MAY 01 USHA RANI 8. BO MAHARASTRA/NDSE/SOUTH EXTENSION 1,50,000 12, MAY 01 KIRAN BANSAL 5. ACCORDING TO THE AO THE SUBMISSION OF THE ASSESSEE WAS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE SHARE A PPLICATION MONEY AND THAT THE ALLEGED CONCERNS WERE SIMP LY PROVIDING ACCOMMODATION ENTRIES IN THE SHAPE OF BOGUS SHARE CAPITAL/SHARE APPLICATION MONEY ETC. THE AO TREATED THE ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 4 AMOUNT OF RS. 14,50,000/ - AS IN GENUINE SHARE APPLICATION MONEY AND MADE THE ADDIT ION IN THE HANDS OF THE ASSESSEE. 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: IT IS SUBMITTED THAT THE APPELLANT HAD FILED INCOME TAX RETURN FOR THE ASSESSMENT YEAR 2002 - 03 ON 30.10.2002 DECLARING INCOME O F RS. 32,170/ - . DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS SUBMITTED THAT THE COMPANY HAS RECEIVED SHARE APPLICATION MONEY AMOUNTING TO RS. 14,50,000/ - BY PAYEE A/C CHEQUE. THE ASSESSEE COMPANY HAS ISSUED 14,500 SHARES @ RS. 100 EACH TO 7 PERSONS C ONSISTING OF 6 NATURAL PERSONS AND 1 CORPORATE BODIES AS PER THE PROVISIONS OF INDIAN COMPANIES ACT, 1956, THE DETAILS OF WHICH ARE GIVEN BELOW: S. NO. NAME OF SHARE APPLICANT ADDRESS OF SHARE APPLICANT AMOUNT OF SHARE APPLICATION MONEY 1. HARISH KUMAR A GARWAL 203D, FLAT NO. 8, NAWADA, NEW DELHI 1,50,000.00 2. B. P. AHUJA C7/179A, LAWARANCE ROAD, N. DELHI 1,00,000.00 3. KIRAN BANSAL 1953/150, TRINAGAR, NEW DELHI - 110035 1,50,000.00 4. USHA RANI GARG S - 7, SHIVAJI PARK, NEW DELHI - 26 1,50,000.00 5. DEVI R AM H - 16/332, BAPA NAGAR, KAROL BAGH, NEW DELHI 2,00,000.00 6. PRADEEP KUMAR K - 188, VIJAYA VIHAR, SECTOR - 1, ROHINI, NEW DELHI - 85 2,00,000.00 7. KRISHNA CINEMA (INDIA) PVT. LTD. 19, OLD RAJINDER NAGAR, NEW DELHI 5,00,000.00 TOTAL 14,50,000.00 ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 5 THE ASSES SING OFFICER HAS MADE ADDITION OF RS. 14,50,000.00 BEING TOTAL AMOUNT CREDIT IN THE BANK ACCOUNT U/S 68 OF THE INCOME TAX IRRESPECTIVE OF FACT THAT ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY OF RS. 14,50,000/ - RECEIVED BY PAYEE ACCOUNT CHEQUE FROM ONE I NCORPORATED BODIES AND SIX NATURAL PERSON AS DETAILS GIVEN ABOVE. 2. THE EXISTENCE AND IDENTITY OF THE ENTITIES FROM WHOM THE SHARE APPLICATION MONEY FOR ALLOTMENT OF EQUITY SHARES WERE RECEIVED BY THE ASSESSEE COMPANY DURING THE FINANCIAL YEAR 2001 - 02, H AVE BEEN DULY PROVED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND SUPPORTED WITH THE EVIDENCE IN THE FORM OF: - CONFIRMATION FROM ALL THE ENTITIES WHO HAD APPLIED FOR ALLOTMENT OF EQUITY SHARES OF THE ASSESSEE COMPANY: - PROOF OF FILING OF INCOME TAX R ETURN OF VARIOUS ENTITIES IN THE FORM OF COPIES OF INCOME TAX RETURN ACKNOWLEDGEMENTS; - SHARE APPLICATION MONEY - COPY OF CHEQUE - COPY OF BANK ACCOUNT - COPY OF RESOLUTION ETC. - BALANCE SHEET FURTHER THESE INCORPORATED BODIES AND SIX NATURAL PERSONS H AVE ALSO DIRECTLY AND THROUGH THE ASSESSEE COMPANY PROVIDED THE REQUIRED DETAILS CONFIRMING THEIR SUBSCRIPTION TO THE SHARE CAPITAL OF THE ASSESSEE COMPANY. FURTHER IT WOULD BE SEEN THAT NO CASH WAS DEPOSITED IN BANK FOR ISSUE OF SHARES FOR SHARE APPLIC ATION MONEY BY ANY OF THE SHARE APPLICANTS. ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 6 7. THE R ELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: M/S UMA POLYMERS PVT. LTD. VS DCIT, SPL. RANGE, THE HON BLE ITAT, JODHPUR BENCH (THIRD MEMBER) (2006) 100 ITD 1 (JODH.) BARKHA SYNTHETICS LTD. VS ASSTT. C IT (2005) 197 CTR (RAJ.) 432 CIT VS SHREE BARKHAS SYNTHETICS LTD. (2004) 270 ITR 477 KRISHAN CHAND CHELLARAM 125 ITR 713 (SC) MENAKA GANDHI VS UNION OF INDIA AIR 978 SC 597 NAWAB KHAN ABBAS KHAN VS STATE OF GUJARAT AIR 974 SC 1471 C. VASANTLAL & CO. VS CIT (1962) 45 ITR 206 (SC) DHAKESWARI COTTON MILLS LTD. VS CIT (1954) 26 ITR 775 (SC) NARAYAN CHANDRA BAIDYA VS CIT (1951) 20 ITR 287 (CAL.) S. L. KAPOOR VS JAGMOHAN AIR 1981 SC 136 NAGULAKONDA VENKATA SUBBA RAO VS CIT (1957) 31 ITR 781 (AP) CIT VS EASTERN CO MMERCIAL ENTERPRISES (1994) 210 ITR 103 8. IT WAS FURTHER SUBMITTED AS UNDER: 8. UNDER SECTION 68 OF THE INCOME TAX ACT, 1961, THE POWERS OF THE ASSESSING OFFICER ARE NOT AN ABSOLUTE ONE. IT IS SUBJECT TO ITS SATISFACTION WHERE AN EXPLANATION IS OFFERED . THE POWER IS ABSOLUTE WHERE THE ASSESSEE OFFERS NO EXPLANATION. THE SATISFACTION WITH REGARD TO ACCUSATION IS IN EFFECT AN IN - BUILT SAFEGUARD IN SECTION 68 PROTECTING THE INTEREST OF THE ASSESSEE, IT PROVIDES AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE FUND. ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 7 ONCE AN EXPLANATION IS OFFERED, THE ASSESSING OFFICER IS BOUND TO CONSIDER THE SAME. SUCH CONSIDERATION IS GUIDED BY SOUND PRINCIPLES OF LAW. THE OPINION SO FORMED MUST BE REASONABLE AND BASED ON MATERIALS AND SHALL NOT BE P ERVERSE. THE DEPARTMENT COULD NOT UNREASONABLY REJECT THE EXPLANATIONS GIVEN BY THE ASSESSEE TO REACH FOR ANY CONCLUSION WHILE MAKING ADDITIONS U/S 68 OF THE INCOME TAX ACT, 1961 9. THE APPELLANT HAS DULY ESTABLISHED THE PRIMARY SO URCES OF FUNDS AND ALSO THE IDENTITY OF THE SHAREHOLDERS, THEIR CAPACITY AND THE GENUINENESS OF THE TRANSACTIONS BY FURNISHING ALL THE RELEVANT DETAILS EVIDENCES AS PER THE REQUIREMENTS OF THE LAW AND AS PER PROVISIONS OF SECTION 68 OF THE I. T. ACT, 1961. THE PRESCRIBED FORM NO. 2 IN RESPECT OF ALLOTMENT OF SHARES TO THE SHAREHOLDERS HAS ALSO BEEN DULY FURNISHED BY THE APPELLANT TO THE ROC. IN VIEW OF THE FACTS INVOLVED AND ALSO JUDICIAL PRONOUNCEMENTS/DECISIONS ON IDENTICAL FACTS/ISSUES, IT CAN BE HELD TH AT THE APPELLANT HAS FULLY DISCHARGED ITS INITIAL ONUS IN TERMS OF SECTION 68 OF THE ACT. THERE IS NO INDICATION OR POSITIVE MATERIAL FINDING ON RECORD TO ESTABLISH THAT THE APPELLANT S OWN MONEY/FUND HAS BEEN RE - ROUTED TO ITS OWN COFFER IN THE FORM OF SHA RE CAPITAL/SHARE APPLICATION MONEY IN THE NAMES OF NON - EXISTING FICTITIOUS ENTITIES. I, THEREFORE, FIND THE APPELLANT HAS DULY EXPLAINED THE NATURE AND PRIMARY SOURCES OF ITS FUND CREDITED IN ITS BOOKS OF ACCOUNT ACCORDINGLY, THE ADDITION OF RS. 14,50,00 0/ - AS UNEXPLAINED INCOME OF THE APPELLANT U/S 68 OF THE ACT IS DIRECTED TO BE DELETED. ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 8 10. THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE SHAREHOLDER WAS MORE THAN ESTABLISHED. AS PER LAW, THE DUTY OF THE ASSESSEE WAS TO PROVE ONLY THE IDENTITY OF THE SHAREHOLDER AS HAS BEEN HELD IN THE FOLLOWING CASES: A. CIT VS STELLER INVESTMENT LTD. 192 ITR 287 (DEL) B. CIT VS STELLER INVESTMENT LTD. 251 ITR 263 (SC) C. SOPHIA FINANCE LTD. 205 ITR 98 (DEL) (FB) D. ACHAL INVESTMENT LTD. VS CIT 268 ITR 211 (DEL) E. CIT VS DOLPHIN CANPACK LTD. 204 CTR 50 (DEL) F. POLYMERS PVT. LTD. VS DCIT 100 ITD 1 (TM) JODHPUR G. DCIT VS ESTEEM TOWERS (P) LTD. 99 TTJ 472 (DEL) H. CIT VS GLOCOM IMPEX (P) LTD. 205 CTR 571 (DEL) I. CIT VS DIVINE LEASING AND FINANCE LTD. J. CIT VS V ALUE CAPITAL SERVICE PVT. LTD. K. CIT VS LOVELY EXPORT PVT. LTD. L. CIT VS DAULATRA M RAWATMULL (1972) CTR (SC) 411 : (1973) 87 ITR 349(SC) 9 . THE ASSESSEE DISTINGUI SHED THE CASES RELIED BY THE AO AND ASSESSEE ALSO SUBMITTED TO THE LD. CIT(A) AS UNDER: 20. I T IS SUBMITTED THAT THE APPELLANT HAD RECEIVED SHARE APPLICATION MONEY OF THE VALUE OF RS. 14,50,000/ - FROM ONE INCORPORATED BODY AND SIX NATURAL PERSON, WHICH ARE BEING ASSESSED TO INCOME - TAX. THE APPELLANT HAD FILED THE PHOTOCOPIES OF THEIR INCOME - TAX AC KNOWLEDGMENT RECEIPTS. FURTHER THE SHARE APPLICATION MONEY HAD BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES. THE APPELLANT HAD FURNISHED THE NAMES AND ADDRESSES OF THE SAID PRIVATE LIMITED COMPANIES ALONG WITH THEIR PANS. SIMILARLY THE APPELLANT HAD FURNISHED TH E ACCOUNT PAYEE CHEQUE NUMBERS THROUGH WHICH THE SHARE APPLICATION MONEYS HAD BEEN RECEIVED. THE SHARE ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 9 APPLICATION MONEYS HAD BEEN CREDITED IN THE BANK ACCOUNT OF THE APPELLANT. THE APPELLANT HAD FILED THE CONFIRMATIONS OF THE SAID SHARE APPLICANTS. 21. I T IS SUBMITTED THAT THE APPELLANT COMPANY HAD FILED FORM NO. 2 BEFORE THE REGISTRAR OF COMPANIES IN SUPPORT OF THE ALLOTMENT OF SHARES TO THE SAID SHARE APPLICANTS. BUT IN SPITE OF THE FULL PARTICULARS, THE ASSESSING OFFICER HAD ERRED IN TREATING THE SHARE APPLICATION MONEYS OF RS. 14,50,000/ - FROM TWO INCORPORATE BODY AND FOUR NATURAL PERSON AS MENTIONED HEREINABOVE AS BEING THE ALLEGED UNDISCLOSED INCOME OF THE APPELLANT. IT IS SUBMITTED THAT THE APPELLANT HAS RELIED ON A NUMBER OF HIGH COURT AND SUPREME COURT JUDGMENTS IN SUPPORT OF THE GENUINENESS OF THE SHARE APPLICATION MONEYS AND THE ALLOTMENT OF THE SHARES. IT WOULD BE SEEN FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAD IGNORED THE SUBMISSIONS OF THE APPELLANT AND THE DOCUMENTARY EVIDENCE, WHICH HAD BEEN PRODUCED BEFORE HIM. 22. IT IS SUBMITTED THAT THE SHARE APPLICATION MONEYS HAVING BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES DRAWN ON THEIR RESPECTIVE BANK ACCOUNTS OF THE SHARE APPLICANTS, THE APPELLANT HAD DISCHARGED THE BURDEN WHICH LAY ON IT IN RESPECT OF THE SHARE APPLICATION MONEYS. THIS PROPOSITION IS SUPPORTED BY THE JUDGMENT OF THE PATNA HIGH COURT IN THE CASE OF ADDITIONAL CIT VS BAHRI BROTHERS PVT. LTD. (1985) 154 ITR 244 AND THE JUDGMENT OF THE SUPREME COURT OF INDIA IN THE CASE OF CIT VS ORISSA CORPORATION PVT. LTD. (1986) 159 ITR 78 (SC). THUS THE APPELLANT HAVING DISCHARGED THE BURDEN, IT IS THE REVENUE WHICH HAD TO VERIFY THE GENUINENESS OF THE SHARE APPLICATION MONEYS AND THE PREMIA IN CASE HE HAD ANY DOUBT WHATSOEVER. IT IS ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 10 SUB MITTED THAT THE ASSESSING OFFICER DID NOT DISCHARGE THE BURDEN WHICH HAD SHIFTED ON HIM. 10 . THE RELIANCE WAS ALSO PLACED ON THE FOLLOWING CASE LAWS: CIT VS MAKHNI AND TYAGI PVT. LTD (2004) 267 ITR 433 (DEL.) CIT VS ORISSA CORPORATION (1986) 159 ITR 78 (SC) CIT VS DAULAT RAM RAWATMULL (1973) 87 ITR 349 (SC) CIT VS VALUE CAPITAL SERVICES PVT. LTD. ITA NO. 348/2008 (DEL.) 1 1 . THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAD FILED COPIES OF CONFIRMATIONS ALONGW ITH THE AFFIDAVIT FROM THE PARTIES CONFIRMING THE PAYMENT OF THE AMOUNT AS SHARE APPLICATION MONEY, COPIES OF INCOME TAX RETURN ALONGWITH ACKNOWLEDGMENT AND PAN DETAILS OF THE RESPECTIVE PARTIES, SHARE APPLICATION FORMS, COPY OF FORM NO. 2 FILED WITH ROC S HOWING ALLOTMENT OF SHARES, COPY OF BANK ACCOUNTS AND CHEQUES RECEIPT ETC. AS WELL AS BOARD RESOLUTION AND ROC DETAILS IN THE CASE OF CORPORATE ENTITY EVIDENCING THE IDENTITY AND GENUINENESS OF THE INVESTOR PARTIES , BEFORE THE AO IN SUPPORT OF ITS CLAIM. H E ALSO OBSERVED THAT THE AO HAD NOT BEEN ABLE TO BRING ON RECORD ANY VALID MATERIAL/ EVIDENCE TO DISPROVE THE CLAIM OF THE ASSESSEE. THE LD. CIT(A) WAS OF THE VIEW THAT IN THE MATTER OF CASH CREDIT, THE INITIAL ONUS LIES ON ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 11 THE ASSESSEE TO PROVE THE GENUINE NESS OF THE TRANSACTION ALONGWITH THE IDENTITY OF THE LENDER/INVESTOR AND HIS CREDITWORTHINES S, H AVING DONE SO, THE ASSESSEE IN THE INSTANT CASE HAS DISCHARGED THE ONUS CAST UPON IT. BEYOND THIS, FOR THE CHARGE OF UNEXPLAINED CASH CREDIT TO STICK, THE ONUS LIES ON THE AO TO DISPROVE THE CLAIM OF THE ASSESSEE BY ESTABLISHING THAT THE EVIDENCE FILED BY THE ASSESSEE WAS FALSE AND BY BRINGING NEW MATERIAL ON RECORD AND FAILURE TO DO SO WOULD VITIATE THE ADDITION MADE ON THIS COUNT. 12 . A CCORDING TO THE LD. CIT (A), IT WA S MANDATORY FOR THE AO TO CONFRONT THE ASSESSEE WITH ANY MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE AND IN CASE OF STATEMENT OF THIRD PARTY RECORDED AT THE BACK OF THE ASSESSEE, OPPORTUNITY OF CROSS EXAMINATION HAS TO BE OFFERED TO THE ASSESS EE, FAILING WHICH THE S AID MATERIAL/STATEMENT ETC. WOULD BE RENDERED ON UNRELIABLE AND ADDITIONS MADE ON THE BASIS OF SUCH MATERIAL/STATEMENT ETC. SHALL BE RENDERED ILLEGAL. 13 . THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: R. B. MITTAL VS CIT 246 I TR 283 (AP) KHANDELWAL CONSTRUCTIONS VS CIT (1997) 227 ITR 900 (GAU.) CIT VS ORISSA CORPORATION PVT. LTD. 158 ITR 78 (SC) CIT VS METACHEM INDUSTRIES (2000) 245 ITR 160 (MP) HASTIMAL (S) VS CIT (1963) 49 ITR 273 (MAD.) ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 12 14 . THE LD. CIT(A) FURTHER OBSERVED TH AT THE HON BLE APEX COURT IN THE CASE OF CIT VS LOVELY EXPORTS (P) LTD. (2008) 216 CTR 195 HELD THAT EVEN IF SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE COMPANY IS FROM ALLEGED BOGUS SHAREHOLDER, WHOSE IDENTITY IS PRODUCED BY THE ASSESSEE COMPANY, THE REVENUE CAN ALWAYS PROCEED AGAINST SUCH SHAREH OLDERS AND IF NECESSARY REOPEN THEIR INDIVIDUAL ASSESSMENT. THE LD. CIT(A) ULTIMATELY BY FOLLOWING THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS DWARKADHISH INVESTMENT PVT. LTD. D ELETED THE ADDITION BY OBSERVING IN PARA 5.1.8 OF THE IMPUGNED ORDER AS UNDER: 5.1.8 FURTHER, THE HON BLE DELHI HIGH COURT RELYING ON THE JUDGMENT OF THE APEX COURT IN LOVELY EXPORTS PVT. LTD. (SUPRA) HAS DISMISSED THE DEPARTMENT S APPEALS IN LIMINE VIDE ITS RECENT ORDERS IN THE CASE OF CIT VS DWARKADHISH INVESTMENT PVT. LTD. AND DWARKADHISH CAPITAL PVT. LTD. (ITA NOS. 911/2010 AND 913/2010 ORDER DATED 02.08.2010), CIT VS GREEN TECH TOWER BUILDERS PVT. LTD. (ITA NO. 1113/2010 ORDER DATED 12.08.2010) AND C IT VS ULTRATECH FINANCE & INVESTMENT LTD. (ITA NO. 1122/2010 ORDER DATED 12.08.2010). IN THE CASE OF DWARKADHIS H INVESTMENT PVT. LTD. AND DWAR K A DHISH CAPITAL PVT. LTD. (SUPRA) THE HON BLE JURISDICTIONAL HIGH COURT VIDE ITS COMMON ORDER DATED 02.08.2010 HAS INTER ALIA OBSERVED AS UNDER: ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 13 7. CONSEQUENTLY, THE DOCTRINE OF MERGER WOULD APPLY AND THE JUDGMENT OF THE SUPREME COURT IN LOVELY EXPORTS (P) LTD. (SUPRA) WOULD COVER THE FIELD WITH REGARD TO INTERPRETATION OF SECTION 68 OF THE ACT, 1961. 8. IN ANY MAT TER, THE ONUS OF PROOF IS NOT A STATIC ONE. THOUGH IN SECTION 68 PROCEEDINGS, THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE YET ONCE HE PROVES THE IDENTITY OF THE CREDITORS/SHARE APPLICANTS BY EITHER FURNISHING THEIR PAN NUMBER OR INCOME TAX ASSESSMENT NUMBER AND SHOWS THE GENUINENESS OF TRANSACTION BY SHOWING MONEY IN HIS BOOKS EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT OR BY ANY OTHER MODE, THEN THE ONUS OF PROOF WOULD SHIFT TO THE REVENUE. JUST BECAUSE THE CREDITORS/SHARE APPLICANTS COULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE SECTION 68. ONE MUST NOT LOSE SIGHT OF THE FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSON. MOREOVER, IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT TO PROVE THE SOURCE OF SOURCE . .. 10. WE ARE ALSO INFORMED THAT A SPECIAL LEAVE PETITION AGAINST THE AFORESAID DIVISION BENCH JUDGMENT IN THE CASE OF THE RESPONDENT - ASSESSEE HAS BEEN DISMISSED BY THE SUPREME COURT. ACCORDINGLY, WE ARE OF THE OPI NION THAT NO QUESTION OF LAW ARISES IN THE PRESENT CASES AS THE MATTER IS FULLY COVERED BY THE JUDG MENT OF THE SUPREME COURT IN LOVELY EXPORTS (P) LTD. (SUPRA) AS WELL AS THE DIVISION BENCH JUDGMENT OF THIS ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 14 COURT IN THE CASE OF THE RESPONDENT - ASSESSEE ITSE LF. 11. CONSEQUENTLY, WE ARE OF THE VIEW THAT THE PRESENT APPEALS AMOUNT TO RE - LITIGATION. 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 JUSTICE AND PUBLIC PO LICY FOR A PARTY TO RE - LITIGATE THE SAME ISSUE WHICH HAS ALREADY BEEN TRIED AND DECIDED EARLIER AGAINST HIM. THE RE - AGITATION MAY OR MAY NOT BE BARRED AS RES JUDICATA. BUT IF THE SAME ISSUE IS SOUGHT TO BE RE - AGITATED, IT ALSO AMOUNTS TO AN ABUSE OF THE PR OCESS OF THE COURT 12. THOUGH WE WERE INITIALLY INCLINED TO IMPOSE COSTS YET WE ARE OF THE OPINION THAT ENDS OF JUSTICE WOULD BE MET BY GIVING A DIRECTION TO THE REVENUE TO BE MORE CAREFUL BEFORE FILING APPEALS IN A ROUTINE MANNER. IN OUR VIEW, APPEAL SHOULD NOT BE FILED IN MATTERS WHERE EITHER NO QUESTION OF LAW ARISES OR THE ISSUE OF LAW IS A SETTLED ONE. WE GIVE THIS DIRECTION BECAUSE THE JUDICIAL CAPITAL IN TERMS OF MANPOWER AND RESOURCES IS EXTREMELY LIMITED. 13. REGISTRY IS DIRECTED TO COMMUNIC ATE COPIES OF THIS ORDER TO ALL THE CHIEF COMMISSIONERS OF INCOME TAX IN DELHI FOR NECESSARY ACTION. WITH THE AFORESAID DIRECTION, THE PRESENT APPEALS ARE DISMISSED IN LIMINE BUT WITHOUT ANY ORDER AS TO COSTS. ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 15 1 5 . NOW THE DEPARTMENT IS IN APPEAL. THE LD . DR STRONGLY SUPPORTED THE ORDER OF THE AO AND THE LD. COUNSEL FOR THE ASSESSEE IN HIS RIVAL SUBMISSIONS , REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 16 . WE HAVE CONSIDE RED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE ASSESSEE FURNISHED THE EVIDENCES TO PROVE THE IDENTITY OF THE CREDITORS/SHARE APPLICANTS BY FURNISH ING THEIR PAN NUMBER AND COPY OF ACKNOWLEDGMENT OF INCOME - TAX RETURN. THE AMOUNT ON ACCOUNT OF SHARE APPLICATION WAS RECEIVED THROUG H BANKING CHANNEL, COPIES OF THE CONFIRMATION ALONGWITH AFFIDAVI T OF THE PARTIES WERE FURNISHED . THE ASSESSEE ALSO FURNISHED THE COPY OF SHARE APPLICATION FORMS, COPY O F FORM NO. 2 FILED WITH REGISTER OF COMPANIES (ROC), SHOWING ALLOTMENT OF SHARES TO THE APPLICANTS . T HEREFORE, THE ASSESSEE D ISCHARGED THE ONUS CAST UPON IT, A S SUCH THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE IMPUGNED ADDITION MADE BY THE AO. FURTHERMORE THE LD. CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE RELIED UPON THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS DWARKADHISH INVESTMENT PVT. LTD. (SUPRA) AND THE JU DGMENT OF THE HON BLE SUPREME COURT IN THE ITA NO. 1310 /DEL /2011 RELIANCE MARKETING PVT. LTD . 16 CASE OF CIT VS LOVELY EXPORTS (P) LTD. (SUPRA), THEREFORE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND ACCORDINGLY DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 1 7 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ( ORDER PRON OUNCED IN THE COURT ON 18 /02 /2015 ) SD/ - SD/ - (I. C. SUDHIR ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18 /02 /2015 *SUBODH* COPY FORWARDED TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR