Ayaana Comtrade Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(1)(4), Ahmedabad

ITA 1480/AHD/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2892 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 03-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Accommodation entries; Onus to prove
• Section: 143(2); 68

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.1480/AHD/2016 / ASSTT. YEAR: 2012-2013 AYAANA COMTRADE P.LTD. FLAT NO.3, NOOPUR APARTMENT 133, AZAD SOCIETY AMBAWADI AHMEDABAD 380 015. PAN : AAHCA 2708 H VS. ITO, WARD-1(1)(4) AMBAWADI AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : MS.URVASHI SODHAN, AR REVENUE BY : SHRI VIRENDRA SINGH, SR.DR ! / DATE OF HEARING : 04/03/2019 '#$ ! / DATE OF PRONOUNCEMENT: 05/03/2019 %& / O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-1, AHMEDABAD DATED 29.3.2016 PASSED FOR T HE ASSTT.YEAR 2012-13. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH THE RULE 8 OF THE INCOME TAX (APPEL LATE TRIBUNAL) RULES, 1963 - THEY ARE DESCRIPTIVE AND ARGUMENTATIV E IN NATURE, THOUGH SUBSEQUENTLY, THE ASSESSEE HAS FILED CONCISE GROUNDS OF APPEAL ALSO. IN BRIEF, THE GRIEVANCE OF THE ASSESS EE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.36 ,33,000/- WHICH WAS ADDED BY THE AO ON THE GROUND THAT SHARE APPLIC ATION AND SHARE PREMIUM MONEY RECEIVED BY THE ASSESSEE IS UNE XPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. ITA NO.1480/AHD/2016 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COM PANY HAS FILED ITS RETURN OF INCOME ON 29.9.2012 DECLARING T OTAL INCOME AT RS.30,162/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR THE SCRUTINY ASSESSMENT AND NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE A CCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAD ISSUED SHA RE CAPITAL OF RS.2,73,330/- (27,330 NOS. OF FACE VALUE OF RS.10/- EACH) DURING THE YEAR UNDER CONSIDERATION. THE COMPANY HAS ALSO RECEIVED SHARE PREMIUM OF RS.38,26,200/- (AT THE RATE OF RS. 140/- PER SHARE). THE AO HAS COMPILED THE DETAILS OF ALL SHA RE APPLICANTS ON PAGE NO.3 OF THE ASSESSMENT ORDER, WHICH READS AS U NDER: DETAILS OF INCREASE IN SHARE CAPITAL S. NO. NAME & ADDRESS DATE OF NO. OF SHARES APPLICANT/ALL OTTED DURING THE YEAR ISSUE PRICE OF THE SHARE S SHARE PREMIUM IF ANY WITH @ OF PER SHARE TOTAL CONSIDERATI ON RECEIVED PAN 1 DEVILAL MEENA 31/08/2011 4570 10 140 685500 AQZPM4906G 2 SAVITA MEENA 31/08/2011 3465 10 140 519750 AQYPM2236N 3 DEVILAL MEENA (HUF) 31/08/2011 3840 10 140 576000 AAFHD5664J 4 LAXMANLAL MEENA 31/08/2011 3550 10 140 532500 AQZPM4905F 5 NATHULAL MEENA 31/08/2011 3650 10 140 547500 AQZPM4907H 6 HASMUKH BAROT HUF 31/08/2011 3110 10 140 466500 AACHH9610 M 7 KARM BAROT 31/08/2011 2885 10 140 432750 ANSPB6501E 8 BHAVESH KHATRI 31/08/2011 805 10 140 120750 AYKPK6374P 9 SUSHILABEN MACHHAR 31/08/2011 1455 10 140 218250 AQYPM2042A 4. HE NOTICED THEIR INCOME AS UNDER: S. NO. NAME RETURN OF INCOME GROSS INCOME ITA NO.1480/AHD/2016 3 1. DEVILAL MEENA A.Y.2012 - 13 167225/ - 2 SAVITA MEENA A.Y.2012 - 13 1200 0 / - 3. DEVILAL MEENA (HUF) A.Y.2012 - 13 23391 4. LAXMANLAL MEENA A.Y.2012 - 13 64000/ - 5 NATHULAL MEENA A.Y.2012 - 13 57000/ - 6 HASMUKH BAROT HUF A.Y.2009 - 10 A.Y.2010-11 297980/ - 193262/- 7 KARM BAROT A.Y.2009 - 10 A.Y.2010-11 298080/ - 149249/- 8 BHAVESH KHATRI A.Y.2012 - 13 76334/ - 9 SUSHILABEN MACHHAR A.Y.2012 - 13 6926/ - 5. AFTER A DETAILED ANALYSIS, AND IN LIGHT OF VARIO US AUTHORITATIVE PRONOUNCEMENTS, THE LD.AO HAS ARRIVED AT A CONCLUSI ON THAT IT WAS NOT A GENUINE TRANSACTION. SHARE APPLICANTS WERE N OT CREDIT- WORTHY EXCEPT SHRI HASUMUKH BAROT HUF. HE MADE ADDIT ION OF RS.36,33,000/- OUT OF THE TOTAL. HE DID NOT MAKE A DDITION QUA SHARE APPLICATION MONEY RECEIVED FROM SHRI HASUMUKH BAROT HUF AMOUNTING TO RS.4,66,500/-. REST OF THE AMOUNTS RE CEIVED AS SHARE APPLICATION AS WELL AS SHARE PREMIUM HAS BEEN TREATED AS UNEXPLAINED CASH CREDIT. APPEAL TO THE FIRST APPEL LATE AUTHORITY DID NOT BRING ANY RELIEF TO THE ASSESSEE. 6. BEFORE ME, LD.COUNSEL FOR THE ASSESSEE REITERATED CONTENTIONS AS WERE RAISED BEFORE THE LD.REVENUE AUTHORITIES. SHE SUBMITTED THAT CONFIRMATION WAS GIVEN FROM ALL THE SHARE APPL ICANTS; COPY OF THEIR INCOME TAX RETURNS WERE GIVEN; IN ORDER TO PR OVE THEIR IDENTITY PAN CARD, MOTOR DRIVING LICENCE; COPY OF T HE SHARE APPLICATION FORMS WERE PRODUCED; COPY OF SHARE CERT IFICATE ALLOTTED TO THE APPLICANTS WERE PRODUCED; COPY OF COMMUNICAT ION GIVEN TO THE REGISTRAR OF COMPANIES SHOWING ALLOTMENT OF SHA RES WAS ITA NO.1480/AHD/2016 4 PRODUCED BEFORE THE AO; ALL THE APPLICANTS ARE INCO ME-TAX ASSESSEES; THEY ARE INDIVIDUALS, HENCE THE ASSESSEE HAS DISCHARGED ONUS CAST UPON IT BY VIRTUE OF SECTION 6 8. ONLY LAPSE AT THE END OF THE ASSESSEE IS THAT IT FAILED TO PRODUC E SHARE APPLICANTS BEFORE THE AO. ACCORDING TO THE LD.COUN SEL FOR THE ASSESSEE, THIS IS NOT SUCH A FATAL CIRCUMSTANCE, WH ICH WOULD AMOUNT TO REJECTION OF ALL OTHER EVIDENCES SO AS TO DISBELIEVE THE VERSION PUT-FORTH BY THE ASSESSEE. SHE MADE REFERE NCE TO THE DECISIONS RELIED UPON BEFORE THE LD.FIRST APPELLATE AUTHORITY, WHICH HAS BEEN NOTICED BY THE LD.CIT(A) IN THE SUBMISSION S OF THE ASSESSEE. 7. ON THE OTHER HAND, LD.DR RELIED UPON ORDERS OF T HE REVENUE AUTHORITIES. HE POINTED OUT THAT LD.AO HAS SPECIFI CALLY DIRECTED THE ASSESSEE TO PRODUCE ALL THE SHARE APPLICANTS BECAUS E THEY HAVE VERY MEAGER SOURCE OF INCOME, AND THE AO WANTED TO VERIFY THEIR CREDIT-WORTHINESS AS WELL AS GENUINENESS OF THE TRA NSACTION. HE MADE REFERENCE TO PAGES 60 TO 70 OF THE PAPER BOOK AND CONTENDED THAT ALL THE CHEQUES AND OTHER DETAILS AR E IN SAME HAND-WRITING. IT ALSO GAVE RAISE TO DOUBT ABOUT TH E GENUINENESS OF THE TRANSACTION. FOR BUTTRESSING HIS CONTENTION S, HE SPECIFICALLY DREW MY ATTENTION TOWARDS PARAGRAPH NO.2.6 AND 2.7 OF THE LD.CIT(A)S ORDER. 8. I HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GON E THROUGH THE RECORD CAREFULLY. BEFORE I EMBARK UPON AN INQUI RY ON THE FACTS OF THE PRESENT APPEAL, IN ORDER TO FIND OUT WHETHER THE SHARE CAPITAL AND SHARE PREMIUM MONEY RECEIVED BY THE ASS ESSEE DURING THE YEAR IS REQUIRED TO BE TREATED AS ITS UNEXPLAIN ED CREDIT AND DESERVES TO BE ADDED UNDER SECTION 68 OF THE INCOME TAX ACT, ITA NO.1480/AHD/2016 5 1961. WE DEEM IT APPROPRIATE TO BEAR IN MIND CERTAI N BASIC PRINCIPLES/TESTS PROPOUNDED IN VARIOUS AUTHORITATIV E PRONOUNCEMENTS OF THE HONBLE HIGH COURTS AND HONB LE SUPREME COURT. IT IS ALSO PERTINENT TO OBSERVE THAT ASSESS EE HAS MADE REFERENCE TO A LARGE NUMBER OF DECISIONS IN THE SUB MISSIONS FILED BEFORE THE LD.CIT(A). WE DO NOT DEEM IT NECESSARY TO RECITE AND RECAPITULATE THEM BECAUSE THAT WOULD MAKE THIS ORDE R REPETITIVE AND BULKY. WE TAKE COGNIZANCE OF SOME OF THEM. IT IS PERTINENT TO OBSERVE THAT IN SO FAR AS COMPANIES INCORPORATED UNDER INDIAN COMPANIES ACT ARE CONCERNED, WHETHER PRIVATE LIMITE D OR PUBLIC LIMITED COMPANIES, THEY RAISE THEIR SHARE CAPITAL, THROUGH SHARES THOUGH MANNER OF RAISING SHARE CAPITAL IN PRIVATE L IMITED COMPANY ON ONE HAND AND PUBLIC LIMITED COMPANY ON OTHER HAN D, WOULD BE DIFFERENT. THE SHARE CAPITAL AND SHARE PREMIUM ARE BASICALLY IRREVERSIBLE RECEIPTS OR CREDITS IN THE HANDS OF TH E COMPANIES. SHARE CAPITAL IS CONSIDERED TO BE COST OF SHARES ON EQUIVALENT AMOUNT ISSUED AND PREMIUM IS CONSIDERED AS EXTRA AM OUNT CHARGED BY THE COMPANY FOR ISSUE OF THAT CAPITAL. IN THE CASE OF PRIVATE LIMITED COMPANY, NORMALLY SHARES ARE SUBSCR IBED BY FAMILY MEMBERS OR PERSONS KNOWN/CLOSE TO THE PROMOTERS. P UBLIC LIMITED COMPANY, ON THE OTHER HAND, GENERALLY RAISED BY PUB LIC ISSUE INVITING GENERAL PUBLIC AT LARGE FOR SUBSCRIPTION O F THESE SHARES. YET, IT IS ALSO POSSIBLE THAT IN THE CASE OF PUBLIC LIMITED COMPANY, THE SHARE CAPITAL IS ISSUED IN CLOSE-CIRCUIT. WHEN COMPANIES INCORPORATED UNDER THE COMPANIES ACT RAISE THEIR CA PITAL THROUGH SHARES, VARIOUS PERSONS WOULD APPLY FOR SHARES AND THEN GIVE SHARE APPLICATION MONEY. THIS AMOUNT RECEIVED FRO M SUCH SHARE HOLDER WOULD NATURALLY BE CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. ONCE THE ALLEGED SHARE CAPITAL IS CREDIT ED TO THE ITA NO.1480/AHD/2016 6 ACCOUNTS OF THE ASSESSEE, THEN ROLE OF SECTION 68 W OULD COME. IT IS PERTINENT TO TAKE NOTE OF THIS SECTION. IT READ S AS UNDER: WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINI ON OF THE OFFICER, SATISFACTORY THE SUM SO CREDITED MAY BE CH ARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. 9. A PERUSAL OF THE SECTION WOULD INDICATE THAT BAS ICALLY THIS SECTION CONTEMPLATES THREE CONDITIONS REQUIRED TO B E FULFILLED BY AN ASSESSEE. IN OTHER WORDS, THE ASSESSEE IS REQUIRED TO GIVE EXPLANATION WHICH WILL EXHIBIT NATURE OF TRANSACTIO N AND ALSO EXPLAIN THE SOURCE OF SUCH CREDIT. THE EXPLANATION SHOULD BE TO THE SATISFACTION OF THE AO. IN ORDER TO GIVE SUCH TYPE OF EXPLANATION WHICH COULD SATISFY THE AO, THE ASSESSE E SHOULD FULFILL THREE INGREDIENTS VIZ. (A) IDENTITY OF THE SHARE AP PLICANTS, (B) GENUINENESS OF THE TRANSACTION, AND (C) CREDIT-WORT HINESS OF SHARE APPLICANTS. AS FAR AS CONSTRUCTION OF SECTION 68 A ND TO UNDERSTAND ITS MEANING IS CONCERNED, THERE IS NO MUCH DIFFICUL TY. DIFFICULTY ARISES WHEN WE APPLY THE CONDITIONS FORMULATED IN T HIS SECTION ON THE GIVEN FACTS AND CIRCUMSTANCES. IN OTHER WORDS, IT HAS BEEN PROPOUNDED IN VARIOUS DECISIONS THAT SECTION 68 CON TEMPLATES THAT THERE SHOULD BE A CREDIT OF AMOUNTS IN THE BOOKS OF AN ASSESSEE MAINTAINED BY THE ASSESSEE, (B) SUCH AMOUNT HAS TO BE A SUM RECEIVED DURING THE PREVIOUS YEAR, (C) THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CRE DIT FOUND IN THE BOOKS, OR (D) THE EXPLANATION OFFERED BY THE AS SESSEE IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. NOVADAYA CA STLES (P.) LTD. ITA NO.1480/AHD/2016 7 367 ITR 306 HAS CONSIDERED A LARGE NUMBER OF DECISI ONS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F CIT VS. DURGA PRASAD [1971] 82 ITR 540 (SC). ACCORDING TO THE HONBLE DELHI HIGH COURT BASICALLY THERE ARE TWO SETS OF JU DGMENTS. IN ONE SET OF CASE, THE ASSESSEE PRODUCED NECESSARY DOCUME NTS/EVIDENCE TO SHOW AND ESTABLISH IDENTITY OF THE SHARE-HOLDER AND BANK ACCOUNT FROM WHICH PAYMENT WAS MADE. THE FACT THAT PAYMENT WAS RECEIVED THROUGH BANK CHANNELS, FILED NECESSARY AFFIDAVIT OF THE SHAREHOLDERS OR CONFIRMATIONS OF THE DIRECTORS OF THE SHAREHOLDER COMPANY. BUT THEREAFTER NO FURTHER INQU IRY WAS MADE BY THE AO. THE SECOND SET OF CASES ARE THOSE WHERE THERE WAS EVIDENCE AND MATERIAL TO SHOW THAT THE SHAREHOLDER COMPANY WAS ONLY A PAPER COMPANY HAVING NO SOURCE OF INCOME, BU T HAD MADE SUBSTANTIAL AND HUGE INVESTMENTS IN THE FORM OF SHA RE APPLICATION MONEY. THE ASSESSING OFFICER HAS REFERRED TO THE BA NK STATEMENT, FINANCIAL POSITION OF THE RECIPIENT AND BENEFICIARY ASSESSEE AND SURROUNDING CIRCUMSTANCES. THE PRIMARY REQUIREMENTS , WHICH SHOULD BE SATISFIED IN SUCH CASES IS, IDENTIFICATIO N OF THE CREDITORS/SHAREHOLDER, CREDITWORTHINESS OF CREDITOR S/SHAREHOLDER AND GENUINENESS OF THE TRANSACTION. THESE THREE REQ UIREMENTS HAVE TO BE TESTED NOT SUPERFICIALLY BUT IN DEPTH HA VING REGARD TO THE HUMAN PROBABILITIES AND NORMAL COURSE OF HUMAN CONDUCT. IN THIS CONNECTION, THE HONBLE DELHI HIGH COURT HAS M ADE REFERENCE TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE [1971] 82 ITR 540 (SC) AND OB SERVED THAT ADJUDICATING AUTHORITY SHOULD FIND OUT THE REALITY OF TRANSACTION. IN OTHER WORDS, IF THE AO IS ABLE TO DEMONSTRATE THAT APPARENT TRANSACTION PROJECTED BY THE ASSESSEE WAS NOT REAL, THEN CLAIM OF THE ASSESSEE SHOULD NOT BE ACCEPTED. THIS CAN BE T ESTED ON THE ITA NO.1480/AHD/2016 8 SURROUNDING CIRCUMSTANCES, MAKING REFERENCE TO THE SUBSTANTIAL EVIDENCE PRODUCED BY THE ASSESSEE AS WELL AS COLLEC TED BY THE AO. THE HONBLE HIGH COURT ALSO MADE OBSERVATION THAT C ERTIFICATES OF INCORPORATION/PAN ARE BEING REFERRED BY THE ASSESSE E TO DEMONSTRATE IDENTITY OF THE SHARE APPLICANTS. ACCO RDING TO THE DECISION OF THE HONBLE DELHI HIGH COURT, THESE ARE NOT SUFFICIENT DOCUMENTS, BECAUSE THEY HAVE THEIR OWN LIMITATION. A PERMANENT ACCOUNT NUMBER IS BEING ALLOTTED ON AN APPLICATION MADE BY AN ASSESSEE. IT IS PERTINENT TO OBSERVE THAT IN THESE DAYS, SUCH ACCOUNT NUMBER IS BEING ALLOTTED ON ON-LINE APPLICA TION. THERE IS NO INVESTIGATION ABOUT THE IDENTITY OF AN ASSESSEE WHO OBTAINS PAN. SIMILARLY, CERTIFICATE OF INCORPORATION CAN B E GIVEN A CORROBORATIVE EVIDENCE IN SUPPORT OF IDENTITY, BUT IT WILL NOT EXHIBIT WHETHER SHARE APPLICANT COMPANY WAS A PAPER COMPANY OR NOT. IN BRIEF EVIDENCE IN THE SHAPE OF PAN, CERTIFICATE OF INCORPORATION WOULD NOT BE SUFFICIENT FOR PROVING THE IDENTITY OF THE SHARE APPLICANT COMPANY. SIMILARLY, PAYMENTS RECEIVED TH ROUGH BANKING CHANNELS WOULD NOT BE SACROSANCT AND SUFFICIENT TO BELIEVE GENUINENESS OF THE TRANSACTION. THE AO CAN EXAMINE THE SOURCE OF SUCH MONEY IN THE ACCOUNTS OF APPLICANTS IN ORDE R TO FORM A BELIEF THAT SUCH TRANSACTION WAS NOT GENUINE RATHER AN ARRANGED TRANSACTION. ALL THESE FACTORS WOULD BE RELEVANT O N THE QUALITY OF INVESTIGATION CARRIED OUT BY THE AO. IT HAS BEEN D EBATED BEFORE US THAT THERE ARE LARGE NUMBER OF SHAM COMPANIES WH ICH ARE IN TURN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS COMPANIES/INDIVIDUALS, AND THEREFORE, WHILE DECIDIN G THIS TYPE OF ISSUE, THE ADJUDICATING AUTHORITY SHOULD BEAR IN MI ND THAT A RACKET OF FLOATING BOGUS COMPANIES WITH SOLE PURPOSE OF LA NDING ENTRIES IS ITA NO.1480/AHD/2016 9 BEING UNEARTHED BY THE INVESTIGATION WING OF THE IN COME TAX DEPARTMENT. 10. NO DOUBT ON ONE HAND SUCH KIND OF DUBIOUS PRACT ICES ARE RAMPANT, BUT ON THE OTHER HAND, THE ADJUDICATOR HAS TO KEEP IN MIND THAT MERELY BECAUSE THERE IS AN ACKNOWLEDGMENT OF SUCH PRACTICE WOULD MEAN THAT IT WOULD BE PRESUMED THAT THE ASSESSEE WAS INDULGED IN THIS PRACTICE. 11. IN THE LIGHT OF THE ABOVE, LET ME EXAMINE THE F ACTS OF THE PRESENT CASE. IT IS PERTINENT TO NOTE THAT IN THE PRESENT CASE SHARE APPLICANTS ARE INDIVIDUALS AND NOT COMPANIES WHO CO ULD BE TERMED AS PAPER ENTITIES. HOWEVER, WHILE APPRECIATING THE IR FINANCIAL CAPABILITIES TO SUBSCRIBE SHARES AT PREMIUM AND OTH ER SURROUNDING CIRCUMSTANCES, THE LD.CIT(A) HAS RECORDED A SPECIFI C FINDING. IT IS WORTH TO NOTE THE RELEVANT PART OF HIS FINDING RECO RDED IN HIS ORDER, WHICH READS AS UNDER: 2.6. AFTER GOING THROUGH THE FACTS OF THE CASE, I T IS SEEN THAT THE DEPOSITORS (TABLE SUPRA) AT SR.NO.1 TO 9 A RE FIFING THE RETURN OF INCOME WITH MEAGER TOTAL INCOME. THER EFORE, IN ORDER TO JUSTIFY THE INCREASE IN SHARE CAPITAL AND SHARE PREMIUM, THE COMPANY HAS BEEN ISSUED THE LETTER BY THE A.O. TO PRODUCE ALL THE SHAREHOLDERS ALONG WITH PRO OF OF IDENTITY, DOCUMENTS PROVING CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS AND OTHER RELEVANT DETAILS OF THE SHARES. IN RESPONSE TO THE ABOVE, ONLY ONE SH AREHOLDER NAMELY HASMUKH BAROT HUF, SHRI HASMUKH BAROT ATTENDED IN CAPACITY OF KARTA OF THE HUF AND FILED THE RELEVA NT DETAILS, OTHER SHAREHOLDERS HAVE NEITHER ATTENDED NOR FILED ANY SUBMISSION IN RESPONSE TO THE DETAILS REQUIRED BY T HE OFFICE OF AO. AT THE TIME OF APPELLATE PROCEEDINGS A/SO NO NEW FACTS HAVE BEEN PRODUCED BEFORE ME TO SHOW THE CAPA CITY OF THE ABOVE MENTIONED INVESTORS. IT IS DIFFICULT TO A PPREHEND AS HOW THE PERSONS WHO HAVE DISCLOSED TOTAL INCOME OF RS. 1,50,000/- TO RS. 2,00,000/- COULD INVESTMENT SUCH A HUGE ITA NO.1480/AHD/2016 10 AMOUNT OF RS. 2,00,000/- TO RS. 7,00,000/- IN THE A PPELLANT COMPANY ON A HEFTY PREMIUM. THE APPELLANT HAS FAILE D TO PRODUCE ANY EVIDENCE TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS OF THE INVESTORS ME NTIONED AS ABOVE, EXCEPT HASMUKH BAROT HUF. IT IS ALSO NOTICEABLE IN THIS CASE THAT ALL THE INV ESTORS HAVE OPENED THE BANK ACCOUNT IN THE SAME BANK AND F ROM THERE THE MONEY IS COMPANY. IT IS ALSO NOTICEABLE T HAT JUST BEFORE THE INVESTMENT; THE BANK ACCOUNTS OF ALL THE PERSONS ARE CREDITED WITH IDENTICAL AMOUNT AS IT WAS TO BE INVESTED. ANOTHER VERY CRUCIAL FACT IS THAT ALL THE ABOVE INV ESTORS HAVE OPENED THE ACCOUNTS IN STATE BANK OF BIKANER, C.G. RO AD, AHMEDABAD. THE MONEY DEPOSITED IN THESE ACCOUNTS AN D CHEQUES WERE ISSUED TO THE APPELLANT FOR THE PURCHA SE OF SHARES. THIS ALL LEADS TO THE CONCLUSION THAT IT WA S THE UNACCOUNTED MONEY OF THE APPELLANT ITSELF WHICH WAS BEING CHANNELIZED TO GIVE IT A GARB OF INVESTMENT IN THE NAME OF VARIOUS PERSONS. NO DOUBT, THE APPELLANT HAS TRIED TO LAYER IT DOWN TO CAMOUFLAGE FROM THE EYES OF THE DEPARTMENT. IT IS REALLY SURPRISING THAT PERSONS OF SMALL MEANS, WHY THEY WILL PURCHASE SHARES OF UNLISTED COMPANY AT HEFTY PREMIU M. THE PROBABILITIES OF EVIDENCES LEAD TO THE CONCLUSION T HAT IT WAS THE AMOUNT OF SHARE CAPITAL AND SHARE PREMIUM RECEI VED FROM THE ABOVE SHAREHOLDERS REMAINED UNEXPLAINED AN D THEREFORE BE TREATED AS UNEXPLAINED CASH CREDIT UND ER SECTION 68 OF THE ACT. 2.7. IT IS A WELL SETTLED LAW THAT ONCE AN AMOUNT I S FOUND CREDITED IN THE ACCOUNTS OF THE ASSESSEE; IT IS THE ASSESSEE WHO HAS TO PROVE THAT IDENTITY, SOURCE AND CREDITWO RTHINESS OF SUCH PERSONS/PARTIES/DEPOSITORS. IN ALL THE DECI SION CITED BY THE APPELLANT THE HON'BLE COURTS HAVE HELD THAT THE APPELLANT HAS TO PROVE THE IDENTITY, SOURCE AND CREDITWORTHINESS OF SUCH PERSONS/PARTIES/DEPOSITORS . IN VIEW OF THE ABOVEMENTIONED FACTS, IT BECOMES CLEAR THAT APPELLANT INTRODUCED ITS OWN AND ACCOUNTED INCOME IN THE GARB OF SHARE PREMIUM APPLICATION. THE INITIAL SOURCE OF FU NDS IN THE CASE OF ALL ALLOTTEE PERSONS REMAINS UNEXPLAINED. A LLOTMENT OF SHARES BY APPELLANT AT THE HUGE PREMIUM PROVES INVOLVEMENT OF THE APPELLANT ALL THESE FACTS TAKING IN TOTALITY DO NOT LEAVE AN IOTA OF DOUBT THAT THE TRANSACTIONS ARE BOGUS. THE ASSESSING OFFICER HAS DULY DISCHARGED HI S BURDEN IN THIS CASE BY POINTING ALL VARIOUS CONTRADICTIONS IN THE CLAIM ITA NO.1480/AHD/2016 11 OF APPELLANT WHILE APPELLANT HAS MISERABLY FAILED T O DISCHARGE HIS BURDEN TO PROVE GENUINENESS OF THESE TRANSACTIO NS. 12. AT THIS STAGE, I WOULD LIKE TO MAKE REFERENCE T O THE AUDIT REPORTS. THE AUDIT REPORTS HAVE BEEN PRODUCED ON T HE INSTRUCTION OF THE ITAT. THESE ARE FOR THE PERIOD AS ON 31.3.2 011, 31.3.2012, 31.3.2013 AND 31.3.2014. IN THE AUDIT REPORT AT SE RIAL NO.32, THE ASSESSEE HAS MADE A MENTION SHOWING PARTICULARS OF EARNING PER SHARE. IT IS WORTH TO TAKE NOTE OF THIS REPORT IN T HE AUDIT REPORT, WHICH READ AS UNDER: 32. PARTICULARS OF EARNINGS PER SHARE: EARNING PER SHARE COMPUTED IN ACCORDANCE WITH ACCOUNTING STANDARD 20 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA. PARTICULARS 2011 - 2012 2010 - 2011 2012 - 13 NET PROFIT ATTRIBUTABLE TO SHARE HOLDERS 18,969 68,182 36,969 NUMBER OF EQUITY SHARES/WEIGHTED EQUITY SHARES 225,249 210,000 237,330 NOMINAL VALUE OF SHARE 10 10 10 EARNING PER SHARE (IN RS.) 0.08 0.32 0. 17 13. THE AO HAS SPECIFICALLY DIRECTED PRODUCTION OF THESE SHARE APPLICANTS. BUT THE ASSESSEE FAILED TO PRODUCE THE M. THE QUESTION, FOR EXAMPLE, IS THAT THE APPLICANT SUSHIL ABEN MACHHAR HAS FILED A RETURN FOR THE ASSTT.YEAR 2012-13 SHOWI NG GROSS INCOME OF RS.6,926/-. SHE HAS CONTRIBUTED RS.2,18, 250/-. COULD IT BE ANTICIPATED THAT A LADY HAVING INCOME LESS TH AN RS.10,000/- COULD CONTRIBUTE A SUM MORE THAN RS.2 LAKHS IN A TR ANSACTION ITA NO.1480/AHD/2016 12 WHERE RETURN IS 0.08 PAISA PER SHARE ? THERE IS NO JUSTIFICATION AT THE END OF THE ASSESSEE TO DEMONSTRATE THAT THESE S HARES COULD BE SUBSCRIBED AT SUCH A HIGHER PREMIUM THAT TOO BY A M ARGINAL PERSON WHO HAS VERY NOMINAL INCOME. THEY ARE NOT F AMILY MEMBERS, WHO HAVE SOME INTEREST IN THE COMPANY. TH E LD.CIT(A) HAS APPRECIATED THIS ASPECT. IT IS ALSO NOTED THAT IN THEIR ACCOUNTS IDENTICAL AMOUNT OF DEPOSITS WERE MADE BEFORE ISSUA NCE OF CHEQUES FOR SHARE APPLICATIONS. AFTER TAKING INTO CONSIDERATION MATERIAL AVAILABLE ON RECORD AS WELL AS FINDING OF THE LD.CIT(A) EXTRACTED (SUPRA), I DO NOT FIND ANY MERIT IN THE G ROUNDS OF APPEAL OF THE ASSESSEE. IT IS DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 5 TH MARCH, 2019. SD/- (RAJPAL YADAV) JUDICIAL MEMBER