D.C.I.T.,CC-2(3), Kolkata V. Rabindra Enterprises Pvt. Ltd., Kolkata

ITA 1508/KOL/2019

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9419 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-12-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 20-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Source of fund; Retrospective amendment; Question of law; Onus to prove; Sham transactions
• Section: 131; 68; 143(3); 142(1); 133(6); 195; 143(2); 55A

Judgement Text

| आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता | IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJPAL YADAV, HON’BLE VICE PRESIDENT & DR. MANISH BORAD, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Deputy Commissioner of Income Tax, C.C. -2(3), Kolkata Vs Rabindra Enterprises Pvt. Ltd. 202, Anamika Apartment 12, Lee Road 2 nd Floor Kolkata - 700020 [PAN: AACCR2601M] अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : Shri Siddharth Agarwal, Advocate Revenue by : Shri Rakesh Kumar Das, CIT, D/R सुनवाई कᳱ तारीख/Date of Hearing : 13/12/2023 घोषणा कᳱ तारीख /Date of Pronouncement: 21/12/2023 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The above captioned appeal is directed at the instance of the revenue against the order of the Commissioner of Income Tax (Appeals), Kolkata – 17, (hereinafter the “ld. CIT(A)”) dt. 29/03/2019, passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for the Assessment Year 2012- 13. 2. The revenue has raised the following grounds of appeal:- “That on the facts and circumstances of the case and in law; the Ld. CIT(A)-17, has erred by deleting the additions to the tune of Rs. 27,22,00,000/- made by the AO under section 68 in respect of undisclosed cash credit found in the books of the assessee in the garb of share application money, received during the F.Y.201 1-12, from Bhillai Holding Pvt. Ltd., without judging the case on merits and appreciating the fact that the source of funds received by the Investor Company, namely, Bhillai Holding Pvt. Ltd. were from paper / shell 2 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. entities, and thus, it remained unexplained within the meaning of section 68 of the Act. That the department craves leave to addition, alter or modify any Grounds of appeals in the course of appellate proceedings.” 3. Facts in brief are that the assessee is a private limited company and is engaged in the business of manufacturing of sponge iron. Assessee filed return of income for Assessment Year 2013-13 on 25/09/2012, declaring ‘Nil’ income. Case Selected for scrutiny followed by issuance and service of notices u/s 143(2) and 142(1) of the Act. During the course of assessment proceedings, the directors of the assessee company appeared from time to time and made due compliances by submitting various details as sought for by the Assessing Officer. The Assessing Officer observed that the assessee company had received share application money of Rs.27,22,00,000/- during the year under consideration and allotted the shares to one company, namely, Bhillai Holdings Pvt. Ltd. However, the Assessing Officer was of the opinion that the assessee company had entered into a sham transaction with the investor i.e., Bhillai Holdings Pvt. Ltd., to introduce its own unaccounted income in the form of share application and added entire amount of Rs.27,22,00,000/- as undisclosed cash credit u/s 68 of the Act. 4.1. Aggrieved the assessee preferred appeal before the ld. CIT(A) challenging the addition made u/s 68 of the Act by the Assessing Officer on account of unexplained cash credit amounting to Rs. 27,22,00,000/- and filed complete details of the investor company, Bhillai Holdings Pvt. Ltd, its net worth as on the date of applying for the shares, complete details to prove the identity, creditworthiness of the share applicants and 3 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. genuineness of the transactions, replies filed by the investor company to the summons issued u/s 131 of the Act and also contended that all the documents filed before the Assessing Officer are sufficient enough to explain the nature and source of the alleged sum and even the source of source has been proved by giving the necessary details and the ld. Assessing Officer has not indicated any discrepancies in these details. Various judgments were relied on by the assessee including the judgment of the Hon’ble Supreme Court in the case of CIT vs. Lovely Exports P. Ltd. [2008] 216 CTR 195 (SC), and other case-laws. 4.2. The ld. CIT(A) observed that the assessee has filed documentary evidence in support of the claim of the nature and source being explained for the alleged transactions and also referred to various judicial decisions The ld. CIT(A) observe that the ld. Assessing Officer obtained all these details from the investment companies when summons issued u/s 131 of the Act and again failed to find any discrepancy in the documents filed with regard to the share subscriber companies. The ld. CIT(A) considering these details and also the fact that the assessee is carrying out regular business activity of manufacturing sponge iron and that the share subscriber had sufficient net worth to cover up the investments made in the equity capital of the assessee company, decided in favour of the assessee by deleting the impugned addition u/s 68 of the Act. 5. Aggrieved, the revenue is now in appeal before this Tribunal. 6. The ld. CIT D/R submitted that the ld. Assessing Officer has examined the facts of the case extensively and also scrutinised the 4 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. financial statements of the share applicant and came to a plausible conclusion. He vehemently argued supporting the order of the ld. Assessing Officer and stated that merely filing paper documents cannot be treated as a compliance to explain the nature and source of the alleged sum. Surrounding circumstances which includes the meagre income offered by the share subscribers, no regular business activity carried out by the share subscriber and the typical nature of flow of funds in the bank statement indicates that share subscribing companies are engaged in rotation of funds for providing accommodation entries and they are jamakharchi or shell/paper companies and, therefore, the ld. Assessing Officer has rightly added the sum in the hands of the assessee. The Ld. D/R has further relied upon the decision of the Hon’ble Supreme Court in the case of PCIT vs. NRA Iron & Steel (P) Ltd. reported in [2019] 103 taxmann.com 48(SC). 7. On the other hand, the ld. Counsel for the assessee apart from referring to the detailed written submissions and paper book containing 181 pages again asserted the fact that the assessee company which is engaged in the business of manufacturing of sponge iron, issued equity shares of face value of Rs.10/- and not charged any share premium to the investor company, namely, Bhillai Holding Pvt. Ltd.. The alleged investor company is a group concern having common directors, regularly assessed to tax, transactions being carried out through banking channels and has passed through scrutiny proceedings and replied to summons issued u/s 131 of the Act providing details to the Assessing Officer and due compliance was done to the notices issued u/s 133(6) of the Act. He thus claimed that assessee has explained the nature and source of the share 5 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. application money received during the year and has discharged the primary onus casted upon it u/s 68 of the Act and even the source of source has also been explained. Therefore, the ld. CIT(A) has rightly deleted the addition u/s 68 of the Act. Reference was also made to the written note placed before this Tribunal, which is extracted for ready reference:- “(1) Name of Appellant – Rabindra Enterprises Pvt. Ltd. (2) Name of share Applicant – Bhillai Holding Pvt. Ltd. (One applicant only group company) (3) Details of Directors in appellant & Investor Company. S. No. Name of Director Rabindra Enterprises Pvt. Ltd. (Appellant Company) Bhillai Holding Pvt. Ltd. (Investor Company) 1 UPENDRA RAI (00558583) DIRECTOR DIRECTOR 2 HARENDRA ROY (00558688) DIRECTOR DIRECTOR 3 PARMESHWAR NATH RAI (00869571) DIRECTOR DIRECTOR (4) Details Shareholders S. No. Name of Shareholder Rabindra Enterprises Pvt. Ltd. (Appellant Company) Bhillai Holdings Pvt. Ltd. (Investor Company) 1 PARMESHWAR NATH RAI SHAREHOLDER SHAREHOLDER 2 HARENDRA RAI SHAREHOLDER SHAREHOLDER 3 MAHADEV COKE LTD. SHAREHOLDER SHAREHOLDER 4 MAYA FUELS PVT. LTD. SHAREHOLDER SHAREHOLDER 5 NEW MGM MINERALS PVT. LTD. SHAREHOLDER SHAREHOLDER 6 MGM REFRACTORIES SHAREHOLDER SHAREHOLDER 6 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. PVT. LTD. (5) Details of Registered Office S. No. Name of Company Address 1 RABINDRA ENTERPRISES PVT. LTD. (Appellant Compant) Anamika Apartment, 12, Lee Road, 2 nd Floor, Room No- 202, Kolkata-20 2 BHILLAI HOLDINGS PVT. LTD. (Investor Company) Anamika Apartment, 12 Lee Road, 2 nd Floor, Room No- 202, Kolkata-20 Reconciliation of Rs. 27.22 cr. (a) Addition made by AO Rs. 27,22,00,000 (b) Loan as on 31.03.2011 Rs. 6,73,66,237 Interest paid 19-04-2011 Rs. 19,66,237 Amount transfer to share application a/c Rs. 6,54,00,000 Rs. 6,54,00,000 (c) Fresh share application taken during F.Y. 2011-12 Rs. 20,68,00,000 (d) Share Application Return Rs. 4,22,00,000 (e) Share allotted out of fresh share application amount Rs. 16,46,00,000 (7) The appellant company received share application money of Rs. 20,68,00,000/- through banking channel from its sister concern M/s. Bhillai holdings Pvt. Ltd. (investor company) as below:- Source of share Application Date Mode of Receipt Amount (Received) Source 25-04-2011 RTGS 15,000,000.00 Premature withdrawal of F.D 28-04-2011 RTGS 96,00,000.00 Premature withdrawal of F.D 02-05-2011 RTGS 15,000,000.00 Premature withdrawal of F.D Rs. 1,00,09,873 & 50,00,000 from sale of investment 04-05-2011 RTGS 25,00,000.00 Premature withdrawal of F.D 09-05-2011 RTGS 15,000,000.00 Premature withdrawal of F.D 20-05-2011 RTGS 17,000,000.00 Premature withdrawal of F.D Rs. 1,24,69,832 & 40,00,000 from 7 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. sale of Investment 27-05-2011 RTGS 35,00,000.00 Premature withdrawal of F.D 02-06-2011 RTGS 25,00,000.00 Bank Balance 03-06-2011 RTGS 25,00,000.00 Premature withdrawal of F.D Rs. 9,70,000 & 10,00,000 from sale of Investment 28-06-2011 RTGS 19,000,000.00 From Sister concern Maithan Resort & Carrier Pvt. Ltd. 14-07-2011 RTGS 10,000,000.00 Premature withdrawal of F.D 16-07-2011 RTGS 30,00,000.00 Premature withdrawal of F.D 19-07-2011 RTGS 35,00,000.00 Premature withdrawal of F.D 19-07-2011 RTGS 15,00,000.00 22-07-2011 RTGS 30,00,000.00 Premature withdrawal of F.D 22-07-2011 RTGS 20,00,000.00 Bank Balance 28-07-2011 RTGS 60,00,000.00 Premature withdrawal of F.D 06-08-2011 RTGS 80,00,000.00 Premature withdrawal of F.D 10-08-2011 RTGS 28,00,000.00 Premature withdrawal of F.D 11-08-2011 RTGS 20,00,000.00 Bank Balance 12-08-2011 RTGS 20,00,000.00 Bank Balance 23-09-2011 RTGS 15,000,000.00 Premature withdrawal of F.D 26-09-2011 RTGS 25,00,000.00 Bank Balance 12-10-2011 RTGS 50,00,000.00 Sale of Investment 13-10-2011 RTGS 30,00,000.00 Premature withdrawal of F.D 17-10-2011 RTGS 5,00,000.00 Bank Balance 21-10-2011 RTGS 10,000,000.00 Premature withdrawal of F.D 03-11-2011 RTGS 50,00,000.00 Premature withdrawal of F.D 30-11-2011 RTGS 25,00,000.00 Premature withdrawal of F.D 03-12-2011 RTGS 22,00,000.00 Premature withdrawal of F.D 8 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. 05-12-2011 RTGS 32,00,000.00 Premature withdrawal of F.D 30-12-2011 RTGS 75,00,000.00 Premature withdrawal of F.D 13-01-2012 RTGS 50,00,000.00 Premature withdrawal of F.D Rs. 24,50,000 & 20,00,000 from sale of Investment Total amount received 20,68,00,000.00 Refund of share application money by appellant company 22-11-2011 RTGS (40,00,000.00) Refund of Share application money 17-02-2012 RTGS (3,82,00,000.00) Refund of Share application money Balance of Share application money against which 1,64,60,000 shares issued @ Rs. 10. 16,46,00,000.00 8. We have heard rival contentions and perused the material placed before us and carefully gone through the decisions referred and relied by both the sides. 9. The sole effective ground raised by the revenue is against the finding of ld. CIT(A) deleting the addition u/s 68 of the Act made for alleged unexplained share application money in the form of share capital amounting to Rs. 27,22,00,000/-. During the year, the assessee company received share application money of Rs.27,22,00,000/- from one investor company, namely, Bhillai Holdings Pvt. Ltd.. No share premium has been charged on the issue of equity shares of face value of Rs.10/- each. 10. We further observe that during the course of assessment as well as appellate proceedings before the ld. CIT(A), the assessee has complied and has filed all the details, evidences and relevant documents which are 9 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. necessary to prove the identity and creditworthiness of the share applicant and genuineness of the transactions. Though these details have been filed in the paper book but the same can be summarized as filing of the copy of PAN card, share application form, allotment advices, relevant bank statements, ITRs for Assessment Year 2012-13, audited financial statement, source of funds i.e., the immediate source of fund which has been utilised by alleged share applicant to apply for the equity shares of the company. Assessee has also filed copy of the summons issued u/s 131 of the Act along with the certified copy of reply submitted in compliance to notices u/s 133(6) of the Act by the investor company. During the course of assessment proceedings, reply of investor company was sent directly to the Assessing Officer and again providing necessary details before the ld. CIT(A). Perusal of these details which have been filed in the paper book containing 181 pages indicates that whatever documents which the assessee needs to file in order to explain the identity and creditworthiness of the share applicant and genuineness of the transactions have been filed and thereby the primary onus casted upon the assessee by virtue of Section 68 of the Act has been discharged and consequently the burden shifted over to the Assessing Officer to prove the contrary which the ld. Assessing Officer failed to do. 11. We further observe that the ld. CIT(A) has made a thorough examination of all these facts and also referred to various judicial pronouncements adjudicating similar type of issues and we find it necessary to go through the relevant finding of the ld. CIT(A):- “ 4. I have carefully considered the facts narrated by the Assessing Officer in the assessment order as well as the submissions and documents submitted by the 10 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. appellant company and Investor Company during the course of assessment proceedings. On examination of the above documents, the following facts have emerged: a.During the assessment year 2012-13, the appellant company had allotted 2,30,00,000 shares @ Rs. 10/- each to Bhillai Holdings Private Limited(Investor Company) amounting Rs. 23,00,00,000. Investor Company and Appellant company are sister concern having common Directors, commonShare Holders, and common address which is evident from record of Registrar of Company. b. The aforesaid appellant company had unsecured loan balance of Rs. 6,73,66,237 in the name of the investor company as on 31.03.2011, out of which Rs. 19,66,237 was paid on 18.04.2011 through banking channels as per the chart given in page no 2. The aforesaid appellant company against the balance fund of Rs. 6,54,00,000 had allotted 65,40,000 shares @ Rs. 10/- on 23.02.2012. Thus, the aforesaid sum of Rs. 6,54,00,000 was received during the A.Y. 2011-12 and not in A.Y. 2012-13 and it was merely a brought forward balance of the loan amount which stood in the books of accounts of the appellant company in the name of investor company. It appears that the A.O. has overlooked this aspect and erroneously added the entire amount of share application i.e. Rs. 27,22,00.000 under section 68 of the Income Tax Act, 1961 which also includes aforesaid Rs. 6,54,00,000. c. Further, during the assessment year 2012-13, the appellant company had received share application money of Rs. 20,68,00,000 through banking channel as per chart given in page no 3 & 4 from its sister concern i.e. the investor company. Out of this amount Rs. 4,22,00,000 had been refunded to the investor company through banking channel in the same assessment year. For the balance amount of Rs. 16,46,00,000 the appellant company had allotted 1,64,60,000 shares g Rs. 10/- each on 23.02.2012 to investor company which was clearly evident from the copy of audited financial statements and documents submitted by the appellant company as well as the investor company during the assessment proceedings. d.Further on the basis of information received from the appellant company, the A.O. had issued notice u/s. 133 (6) vide their letter dated 12.08.2014 which was duly complied by the investor company. In response to the aforesaid notice, the investor company had submitted the following documents on 26.08.2014 namely i. Ledger copy of appellant company standing in the books of investor company (Enclosed certified copy in paper book page no. l A of Volume II). ii. Copy of Share Applications made by investor company (Enclosed certified copy in paper book page no. 2A to 21A of Volume H). iii. Copy of Allotment letters issued by investor company (Enclosed certified copy in paper book page no. 22A to 23A of Volume II). 11 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. iv. Copy of Bank Statements of investor company (Enclosed certified copy in paper book page no. 24A to 40D of Volume II). v. Copy of I.T. Return of investor company (Enclosed certified copy in paper book page no. 41A of Volume II). vi. Copy of Audited Financial Statements of investor company (Enclosed certified copy in paper book page no. 42A to 54A of Volume II). vii. Copy of Return filed to ROC (Form 66, Form 20B, Form 23AC & 23ACA) by the investor company (Enclosed certified copy in paper book page no. 55A to 85A of Volume H). e. Further, it was observed that A.O. had also issued summons u/s. 131 to the investor company which was duly served and director of investor company in compliance of the aforesaid summon appeared before the A.O. along with books of accounts and explained documents submitted by investor company. Further, it is to be noted that the A.R. of the appellant company had submitted the paper book in two volumes. Volume I is compilation of documents submitted by appellant company and volume II is compilation of documents submitted by investor company, which were also filed before the A.O. as well:- VOLUME 1 Paper Book (Compilation of documents submitted by appellant company with AO) ..................... .................... A.O. has made addition of Rs. 27,22,00,000 under section 68 treating the same as undisclosed cash credit giving the reason that the appellant company has entered into sham transactions with the investor company. He has also doubted the genuineness of the share application money. It is seen that as per settled law the initial burden is upon the appellant to explain the nature and source of the share application money received by it. In order to discharge this burden, the appellant is required to prove (i) the identity of the share-holder, (ii) the genuineness of the transaction, and (c) the creditworthiness of the shareholder. As far as identity of investor co is concerned, on the basis of information received from appellant company the A.O. issued notice u/s 133 (6) which was complied by investor co by submitting the tcquired documents vide their letter dated 23.08.2014. Further summon u/s 131 to investor company was also issued, which was served and complied by the investor company. The aforesaid facts established identity of investor company. 12 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. So far as genuineness of transaction the appellant company has submitted copy of audited financial statement, copy of share application, copy of bank statement, copy of allotment letter, copy of return of allotment in form 2, Copy of share certificate, ledger copy of Investor Company. A.O. has not pointed out any defects in these documents. When the money is received through banking channels, the genuineness of the transaction would be proved. Further it is seen that as on date also investor company is a major shareholder holding 47.94% of total shares of appellant company and playing major role in taking decisions related to company's affairs as per provisions of Companies Act. Based on the above genuineness of transactions can not be doubted. It is also observed that Investor Company explained the source of funds by submitting their bank statement in their replies to notice u/s. 133 (6) of the Act, from which they made payments to the appellant company for subscribing to its share capital. The facts furnished on record by the Investor Company depicting mode of payment amount paid & sources as mentioned in page No 3 & 4 of this order clearly prove their source of funds, and their capacity for making such payments and accordingly, the criteria of their creditworthiness is proved. It is also observed that Investor Company in their replies to the statutory notices issued u/s. 133 (6) of the Act, furnished copies of their income tax acknowledgements evidencing filing of income tax returns by them, copies of their audited accounts including Balance Sheets wherein such investments made by them in the subscription of share capital issued by the appellant are duly reflected and also copies of their bank statements for the relevant period from which such investments made by them in subscription of share capital issued by the appellant company are duly reflected and copy of allotment advise received by them from the appellant in respect of shares allotted to them. The return of allotment as well as the annual return for the assessment year 2012-13 filed by the appellant with the registrar of companies, Ministry of Corporate Affairs, categorically proves the fact of allotment of shares to the Investor Company. It is further observed that the net worth of the Investor Company as disclosed in their balance Sheets far exceeded the amount of Investments made by them in the shares of the appellant company. The aforesaid facts underlined by evidence clearly prove the identity of the Investor Company, their capacity and source of funds, as well as the Genuineness of the transaction in relation to the share capital issued by the appellant company, which was subscribed by Investor Company. Thus, it proved that the investor company is actually found to have subscribed to the share capital issued by the appellant company, in the impugned previous year relevant to the assessment year under appeal, as clearly evident not only from their respective books of accounts , but also from their audited accounts filed with the income tax authorities in relation to their own income tax assessments, and the sources of such funds are also explained by the investor company in their replies addressed to the A.O. However, the A.O had not brought these indisputable facts on record but acted on his whims and fancies. It is observed that the burden which lies on the appellant company, in relation to sec. 68 of the Act, has been duly discharged. There is no evidence on record to show 13 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. that the identities of the investor company is not proved or that the introduction of share capital by them was not genuine or the source of investment was not fully explained to the satisfaction of the A.O . Once it is proved by documents, the appellant company would have satisfactorily discharged the onus cast upon them. It is seen that although the A.O. had doubted that the appellant company entered into a sham transaction with the investor company to introduce the unaccounted income in form of share application, but no cogent material except suspicion could be brought on record and he also could not point out any discrepancy in the documents submitted by appellant company and investor company in respect of aforesaid transactions. To discredit the documents produced by the appellant company as well as the investor company, having complied to the notices issued u/s. 133 (6) and u/s. 131 there has to be some cogent reasons and materials without having them. A.O cannot go into the realm of suspicion & guess them Based on the above documentary evidences, in my considered opinion, the creditworthiness and financial strength of the investor company could not be doubted; more so when the primary onus was discharged by the appellant company. Even the bank statements revealed that the appellant company had received share application money through banking channel from the investor company. Further, the receipt of share application money has been duly recorded in the books of the appellant company and the payment of share application money was also duly recorded in the books of accounts of the investor company. Considering the above evidence on record, I am of the considered view that the appellant has not only proved the identity of Investor Company but has also established the creditworthiness of investor company and genuineness of the transactions. Therefore, when all the ingredients contained in Sec. 68 of the Act are fulfilled, there is hardly any scope to invoke that section alleging introduction of unexplained fund by way of share application, more so when no evidence could be brought on record by the A.O. to the contrary. a. In this connection, 1 feel it is pertinent to reproduce the observation of Hon'ble Supreme Court in the case of "Principal Commissioner of Income Tax-4 vs. Hi-Tech Residency (P.) Ltd. 120181 96 taxmann.com 403 (SC)/120181 257 Taxman 335 (SC), wherein it was held that :- "Since appellant had discharged its onus of establishing identity, genuineness and creditworthiness of both investors as well as lenders, the said addition on account of section 68 was to be deleted." b. Further, in the case of Principal Commissioner of Income Tax vs. Himachal Fibers Ltd. [2018] 98 taxmann.com 173 (SC)/120181 259 Taxman 3 (SC), wherein it was held by Hon'ble Supreme Court that:- "identity of share applicant was clearly revealed but Assessing Officer did not conduct any enquiry except resting his conclusions on surmises. Accordingly, addition made by Assessing Officer was deleted" 14 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. c. In this connection, I may refer some other judicial pronouncements to hold that the appellant's case is not a fit case where provisions of sec. 68 of the Act can be attracted. The Honourable ITAT in the case of Income-Tax Officer, Ward - 7 (3), Kolkata v. M/s. Sancheti Projects Private Limited, 2010-LL-1126-94, held that :- "the A.O. doubted the genuineness of the share application money on surmises and conjecture and has not brought any cogent material on record to establish his such doubt that the appellant's own unaccounted money came back to it by way off introduction of share capital. Accordingly, addition made by Assessing Officer was deleted" d. Hon'ble Apex Court in the case of CIT vs. Daulat Rant Rawatmuli 187 ITR 349 (SC)] has held that- "onus to prove that the apparent is not the real is on the person who claims it to be so." Therefore, the onus is on the A.O. to prove that the share application money subscribed to the share capital of the appellant company by the above named investor company is not the money of the investor company but of the appellant company, is on the A.O. In the instant case, the A.O. has not brought any material on record to establish the same. In view of the above, it is seen that the A.O. doubted the genuineness of the share application money on surmises and conjecture and has not brought any cogent material on record to establish such doubt that the appellant's own unaccounted money came back to it by way of introduction of share capital. The addition was made with the predetermined mindset that share capital received by appellant is not genuine and the transactions were eyewash only for bringing its black money into circulation without paying any tax to the revenue. In fact Investor Company demonstrated by documentary evidence the mode of payment, amount & sources of their investment of this order page no. 3 & 4, regularly assessed to income tax and the investments made by them are reflected in their books of accounts as well as their income tax return. In response to the requisition made by the A.O. investor company filed its audited financial accounts, bank statements and other documents as desired by the A.O. The appellant company has also furnished the details of shareholder with complete address, PAN, their Bank statement, Audited Financial Statements and Income Tax Return. In response to notice u/s 131 and 133 (6), the investor company has also duly complied with it. Further, it is seen that the transactions are duly recorded in the audited books of accounts of both the appellant company as well as aforesaid investor company. Therefore, no addition on account of unexplained cash credit is warranted in the case of the appellant company on the given facts and circumstances as discussed above. In view of the above, in my considered opinion, the action of the A.O. is contrary to the established legal pronouncements. Accordingly, addition of Rs. 27,22,00,000 is hereby deleted and ground no.1 to 3 is hereby allowed.” 15 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. 12. The ld. D/R has merely given a general statement that the investor company is a paper/shell company but no concrete evidence is filed on record which could prove the substance in such submissions failing which the issue in hand can be decided only on the basis of documentary evidence available on record and which clearly states that the assessee has explained the nature and source of the alleged sum thereby proving the identity and creditworthiness of the share subscribers and genuineness of the transactions. So far as the reliance of the Ld. DR on the decision of the Hon’ble Supreme Court in the case of “PCIT v/s NRA Iron & Steel (P) Ltd.” (supra) is concerned, we note that the Hon’ble Supreme Court in the said case has taken note of the observations made by the Supreme Court in the “the land mark case of Kale Khan Mohammed Hanif v. CIT [1963] 50 ITR 1 (SC) and Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) laying down the proposition that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the Assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold that it is the income of the assessee, and there would be no further burden on the revenue to show that the income is from any particular source.” Thereafter the Hon’ble Supreme court summed up the principles, which emerged after deliberating upon various case laws, as under: 16 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. “11. The principles which emerge where sums of money are credited as Share Capital/Premium are : i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and credit-worthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the AO, so as to discharge the primary onus. ii. The Assessing Officer is duty bound to investigate the credit- worthiness of the creditor/subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit-worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by Section 68 of the Act.” 12.1. The Hon’ble Supreme Court, thus, has held that once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness of the subscribers, then the AO is duty bound conduct to conduct an independent enquiry to verify the same. However, as noted above, the Assessing Officer in this case has not made any independent enquiry to verify the genuineness of the transactions. The assessee having furnished all the details and documents before the Assessing Officer and the Assessing Officer has not pointed out any discrepancy or insufficiency in the said evidences and details furnished by the assessee before him. As observed above, the assessee having discharged initial burden upon him to furnish the evidences to prove the identity and creditworthiness of the share subscribers and genuineness of the transaction, the burden shifted upon the Assessing Officer to examine 17 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. the evidences furnished and even made independent inquiries and thereafter to state that on what account he was not satisfied with the details and evidences furnished by the assessee and confronting with the same to the assessee. In view of this, even applying the ratio laid down by the Hon’ble Supreme Court in the case of PCIT vs. NRA Iron and Steel Pvt. Ltd. (supra), impugned additions are not warranted in this case. 13. After going through these detailed finding and examining the same in the light of the documents filed before us, we notice that the investor company is a body corporate and annual returns have been regularly filed on the Ministry of Corporate Affairs portal. It has been regularly assessed to tax and even passed through scrutiny proceedings also. From perusal of the financial statements of the investor company, we notice that it had sufficient share capital and accumulated Reserves and surplus which are sufficient enough to cover up the share application money invested in the equity of the assessee company. 14. We further observe that the assessee company is regularly engaged in the business of manufacturing of sponge iron. Turnover during the year under consideration is Rs.17.35 Crores and in the immediately preceding year the same stood at Rs.12.68 Crores. The gross value of the fixed assets is Rs.5.91 Crores. The closing stock of sponge iron/raw material/finished goods as on 31/03/2012 is Rs.21.86 Crores. Also on perusal of the audited financial statements, it is clearly discernible that the assessee company is duly registered under the Excise Act and regular business of manufacturing is being carried out. It is not the case of an accommodation entry provider where the cash credits received are 18 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. immediately transferred to other private limited companies by way of making investment in their equity or giving loans and advances. We also notice that the alleged sum received during the year is from Bhillai Holdings Pvt. Ltd., which is a group concern of the assessee. Directors of the assessee company, Mr. Upendra Rai, Mr. Harendra Roy and Mr. Parmeshwar Nath Rai, are also the directors of the share subscriber company i.e., Bhillai Holdings Pvt. Ltd.. Further it is noticed that the source of the alleged sum which was received by Bhillai Holdings Pvt. Ltd. was mainly from premature withdrawals of FDRs during FY 2011-12. We also notice that there was opening balance of unsecured loans from Bhillai Holdings Pvt. Ltd. received by the assessee in earlier years at Rs.6.54 Crores. This balance was transferred to share application money. It thus, indicates that the sum of Rs.6.54 Crores which has been credited on account of share application money during the year has actually been received in the preceding year as unsecured loans. The fresh share application money received from Bhillai Holdings Pvt. Ltd., is Rs.20.68 Crores out of which Rs.4.22 Crore was returned back. Thus, the net fresh share application money received during the year is only Rs.16.46 Crores and not the figure alleged by the Assessing Officer at Rs.27.22 Crores. No share premium has been charged for the alleged investor which is undisputedly a group concern having common directors. The above facts about the regular business activity of the assessee company, manufacturing activities carried out with the fixed assets held by it and the increase in sales, shows that the share application money received during the year has been applied for the purpose of business activity and the genuineness of the transactions cannot be doubted. Identity and 19 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. creditworthiness of Bhillai Holdings Pvt. Ltd. is also not in dispute because the assessee company has received unsecured loan from the assessee company in the past also and in the current year nature and source of share application money has been explained with the necessary evidence including premature withdrawals from FDRs by the share applicant. Thus, the assessee has successfully discharged the primary onus to establish the three ingredients, namely, identity and creditworthiness of the said sources of funds, casted on it. 15. In the above given facts and circumstances, we are inclined to hold that the assessee has successfully explained the nature and source of alleged sum and even the source of source has been proved by providing details of the funds received from other sources through banking channel which has subsequently been used to make investment in the equity capital of the assessee company. 16(a). Our view is further supported by the following judicial pronouncements:- i) The ITAT Kolkata Bench in ITO vs Cygnus Developers (I) P Ltd in ITA No. 282/Kol/2012 dated 2.3.2016, held as follows: 9. We have considered the rival submissions., We are of the view that order of CIT(A) does not call for any interference. It may be seen from the grounds of appeal raised by the Revenue that the Revenue disputed only the proof of identity of the shareholder. In this regard it is seen that for A Y.2004-05 Shree Shyam Trexim Pvt. Ltd., was assessed by ITO, Ward- 9(4), Kolkata and the order of assessment u/s/143(3) dated 25.01.2006 is placed in the paper book. Similarly Navalco Commodities Pvt. Ltd., was assessed to tax u/s 143(3) for A Y.2005-06 by I TO, Ward- 9(4), Kolkata by order dated 20.03.2007. Similarly Jewellock Trexim Pvt. Ltd was assessed to tax for A Y.2005-06 by the very same ITO- Ward- 9(3), Kolkata assessing the Assessee. In the light of the above factual position which is not disputed by the Revenue, it cannot be said that the identity of the share applicants remained not proved by the assessee. The decision of the Hon'ble Allahabad High Court as well as ITA T Kolkata Bench on which reliance was placed by the learned counsel for the assessee also supports the view that for non production of directors of the investor company for examination by the AO it cannot be held that the 20 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. identity of a limited company has not been established. For the reasons given above we uphold the order of CIT(A) and dismiss the appeal of the Revenue. " ii) Further the co-ordinate bench in the case of ITO vs. Forceful Estates Pvt. Ltd. in ITA No. 2558/Kol/2018; Assessment Year 2012-13, order dt. 08/02/2023, and for necessary reference, the facts and findings of the Tribunal read as follows:- “5. The ld. counsel has further invited our attention to the impugned order of the CIT(A) to submit that the ld. CIT(A) has categorically noted that the assessee during the year had raised share capital including share premium amounting to Rs.7,60,00,000/- from six share subscribers. The Assessing Officer had issued notices u/s 133(6) of the Act to the share applicants and in response, they all confirmed the transactions and furnished details/documents as called for including source of fund in their hands. The ld. CIT(A) has considered the evidences and details on record and found that the assessee has been able to prove the identity and creditworthiness of the share subscribers and genuineness of the transaction. The relevant part of the order, for the purpose of ready reference, is reproduced as under: “5. Conclusion: Ground No.1 & 2 I have considered the order of the A.O as well as the submission of the appellant. I have also considered the judicial decisions relied upon by the appellant. The facts of the case have already been discussed as above. It is observed that in the year under consideration the appellant company had raised share capital of Rs.7,60,00,000/-from 6 parties. In the course of the assessment proceedings, to verify the receipt of share capital, the AO issued notices u/s.133(6) to all the 6 share applicants and in response, they all confirmed the transactions submitted the details/document in respect of the subscription of shares of the appellant. In the course of the appellate proceedings, the appellant filed copy of each of the assessment orders passed in all the 6 cases of the shareholders for that year in which the share subscription amount has been received by the assessee company. Besides, the income-tax return filing acknowledgment, Audited Balance and sheets as on 31.03.2012, relevant bank, copy of the notices issued u/s 133(6) to the shareholders and reply thereof were also submitted. It is observed form the details & documents furnished by the appellant that in the cases of 2 share holders, namely 1) M/s Alfort Merchants Private Limited, 2) M/s Sharekhan Merchants Private Limited, the Assessment Orders u/s 143(3) for Lne AY 2012-13 were passed u/s. 143(3) without taking any adverse view. Therefore, it can be assumed that the respective Assessing Officers have all verified the accounts and therefore any amount that is credited from these two 21 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. companies to the assessee company is fully explained. The assessment in the case of the other 4 share holders, namely, 1) M/s. Dhanamrit Commercial Private Limited, 2) M/s Jealous Commercial Private Limited, 3) M/s Mutual Merchants Private Limited, 4) Winsom Vanijya Private Limited were also passed u/s.143(3) where additions u/s 68 & u/s.14A of the Act were made. Therefore, the entire capital of all the above mentioned share holders had been added in its hands u/s 68 of the I.T. Act Thus, once an amount is already taxed, whatever investment is being made out of it in the assessee company can be treated as explained and the Same cannot be taxed again. Further, it is apparent from the records that the notices u/s.133 (6) issued to the shareholders were served on the their respective address by the postal authorities and in response, they confirmed the transactions and also submitted the details of the source of funds for making investment. Hence, the identity & creditworthiness of the shareholders are not in doubt. Further, all the share application money was received through banking channels. Therefore, the issue for my consideration now is -whether the share capital of Rs.7,60,00,000/- raised during the year by the appellant can be treated as unexplained cash credit u/s. 68 of the I.T Act or not. When the identity & creditworthiness of the shareholders have been clearly established because all of them were scrutinized u/s 143(3) and thus the source of the share capital and the share premium are clearly established and the transactions have all taken place through banking channels, merely for failure of the directors of the assessee and the shareholders to appear before AO in person in response to the summons issued to them u/s.131 of the Act, the addition cannot be in my considered opinion, unjustified. Where the corpus becomes technically explained in the eyes of law, how can, the credits arising out of the same corpus can be viewed as unexplained u/s 68 of the IT Act. In view of the facts & circumstances of the case it is held that the addition of Rs.7,60,00,000/- for the share capital raised by the appellant from 6 share applicants as unexplained cash credit u/s 68 of the Act was not justified and the same is directed to be deleted. The appeal of the assessee company on Grounds No.1 & 2 are treated as allowed. Ground no. 3 is general in nature, which does not require adjudication. 6. In the result, the appeal of the assessee is treated as allowed.” 6. A perusal of the above concluding part of the order of the CIT(A) reveals that the ld. CIT(A) has not only taken note of the accounts of the share subscribers but also, noted that all the six share subscribers were assessed u/s 143(3) of the Act. Out of which, no additions were made in case of two share subscribers. However, in the case of other four share subscribers, the additions were made regarding their source of income. Now, it is settled law, once the addition has been made in the hands of the share subscribers, the investments by which share subscribers in the hands of the other company whose shares have been subscribed stood explained then no additions in such a case would be warranted in the 22 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. hands of the assessee company as it would amount to double additions of the same amount. Even if the said addition stand confirmed in the appeal or stand deleted, in both the instances, the investment in the hands of the assessee company will stand proved. Reliance has been placed in this respect on the decision of the Coordinate Kolkata bench of the Tribunal in the case in the case of DCIT vs. M/s Maa Amba Towers Ltd. in ITA No.1381/Kol/2015 vide order dated 12.10.2018. The aforesaid decision has been further relied upon by the coordinate Kolkata bench of the Tribunal in the case of “Steelex India (P) Ltd vs. ITO, Ward-3(2), Kolkata”I.T.A. No.2666/Kol/2019 decided vide order dated 09.09. 2022. 7. Further, a perusal of the Assessment order would reveal that the AO has duly acknowledged the receipt of the relevant documents/evidences not only from the assessee, but also from the subscriber companies. However, he insisted for personal appearance of the directors of the subscriber companies without even going through and discussing about the discrepancies, if any, in the documents furnished by the assessee as well as by the share subscriber companies to prove the identity and creditworthiness of the subscribers and the genuineness of the transaction. The AO has not pointed out in the Assessment Order as to what further enquiries he wanted to make from the directors of the subscribers to insist for their personal presence. The Assessee in this case, as noted above, explained about the identity, creditworthiness and financials etc. of each of the share subscriber company individually. However, we note that in the assessment order that the AO has not even mentioned the names of the share subscriber companies and even has not mentioned a word as to which of the share subscriber company or the corresponding transaction thereof was not genuine and on what grounds. The AO, in our view, could have taken an adverse inference, only if, he would have pointed out the discrepancies or insufficiency in the evidences and details received in his office and pointed out as to on what account further investigation was needed by way of recording of statement of the directors of the subscriber companies. Even if the directors of the subscriber companies have not come personally in response to the summons issued by the AO, in our view, adverse inference cannot be taken against the assessee solely on this ground as it is not under control of the assessee to compel the personal presence of the directors of the shareholders before the AO. The Ld. Counsel for the assessee has rightly placed reliance upon the decision of the Hon’ble Bombay High Court in the case of PCIT, Panji vs. Paradise Inland Shipping Pvt. Ltd. reported in (2017) 84 taxman.com 58 (Bom) wherein the Hon’ble High Court has held that once the assessee has produced documentary evidence to establish the existence of the subscriber companies, the burden would shift on the revenue to establish their 23 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. case. Further the jurisdictional Calcutta High Court in the case of “Crystal networks (P) Ltd. vs CIT” (supra) has held as under: “We find considerable force of the submissions of the learned counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter creditworthiness. As rightly pointed out by the learned counsel that the CIT(Appeals) has taken the trouble of examining of all other materials and documents viz., confirmatory statements, invoices, challans and vouchers showing supply of bidi as against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued in our view is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the produce of the assessee or not. When it was found by the CIT(Appeal) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact finding.” 8. As the ld. CIT(A), in this case, has not only duly examined the facts and explanation as furnished by the assessee but also has given a categorical finding that the identity and creditworthiness of the share subscribers and genuineness of the transaction stood established. 9. The ld. DR could not point out any distinct facts warranting our interference in the order of the CIT(A). 10. In view of the above, we accordingly upheld the order of the CIT(A). The appeal of the revenue is, therefore, dismissed.” iii) The Hon’ble Bombay High Court in the case of Commissioner of Income-tax- 1 v. Gagandeep Infrastructure (P.) Ltd. [2017] 80 taxmann.com 272 (Bombay) under identical circumstances has held as follows:- “(e) We find that the proviso to section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was 24 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. introduced "for removal of doubts" or that it is "declaratory". Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the pre-proviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfied. Further it was a submission on behalf of the Revenue that such large amount of share premium gives rise to suspicion on the genuineness (identity) of the shareholders i.e. they are bogus. The Apex Court in Lovely Exports (P.) Ltd. (supra) in the context to the pre-amended Section 68 of the Act has held that where the Revenue urges that the amount of share application money has been received from bogus shareholders then it is for the Income Tax Officer to proceed by reopening the assessment of such shareholders and assessing them to tax in accordance with law. It does not entitle the Revenue to add the same to the assessee's income as unexplained cash credit. (f) In the above circumstances and particularly in view of the concurrent finding of fact arrived at by the CIT(A) and the Tribunal, the proposed question of law does not give rise to any substantial question of law. Thus not entertained.” 16(b). Our views are further fortified by the judgment of the Jurisdictional Calcutta High Court in the case of Principal CIT vs. Sreeleathers reported in [2022] 448 ITR 332 (Cal) has held as follows: “Section 68 of the Income-tax Act, of 1961, deals with cash credits. It states that 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 thereof or the explanation offered by him is not in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to Income-tax as the income of the assessee of that previous year. The crucial words in the provision are “the assessee offers no explanation". This would mean that the assessee offers no proper, reasonable and acceptable explanation as regards the amount credited in the books maintained by the assessee. No doubt the Act places the burden of proof on the taxpayer. However, this is only the initial burden. In cases where the assessee offers an explanation to the credit by placing evidence regarding the identity of the investor or lender along with their confirmations, the assessee has discharged the initial burden and, therefore, the burden shifts on the Assessing Officer to examine the source of the credit to be justified in referring to section 68 of the Act. After the Assessing Officer puts the assessee on notice and the assessee submits the explanation concerning the cash credit, the Assessing 25 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. Officer should consider it objectively before he decides to accept or reject it. Where the assessee furnishes full details regarding the creditors, it is up to the Department to pursue the matter further to locate those creditors and examine their creditworthiness. While drawing the inference, it cannot be assumed in the absence of any material that there have been some illegalities in the assessee’s transaction. Held, dismissing the appeal, that the allegations against the assessee were in respect of thirteen transactions. The Assessing Officer issued a show-cause notice only in respect of one of the lenders. The assessee responded to the show-cause notice and submitted the reply. The documents annexed to the reply were classified under three categories namely: to establish the identity of the lender, to prove the genuineness of the transactions and to establish the creditworthiness of the lender. The Assessing Officer had brushed aside these documents and in a very casual manner had stated that merely filing the permanent account number details, and balance sheet did not absolve the assessee from his responsibility of proving the nature of the transaction. There was no discussion by the Assessing Officer on the correctness of the stand taken by the assessee. Thus, going by the records placed by the assessee, it could be safely held that the assessee had discharged his initial burden and the burden shifted onto the Assessing Officer to enquire further into the matter which he failed to do. In more than one place the Assessing Officer used the expression "money laundering". Such usage was uncalled for as the allegation of money laundering is a very serious allegation and the effect of a case of money laundering under the relevant Act is markedly different. The order passed by the Assessing Officer was utterly perverse and had been rightly set aside by the Commissioner (Appeals). The Tribunal had rightly deleted the additions under section 68.” 17. Respectfully following the above decisions, which in our view are squarely applicable on the facts of the instant case, we find that the assessee which is regularly carrying on business activity of manufacturing sponge iron, registered under the Excise Act, holds fixed assets, having considerable amount of stock in hand and has successfully discharged the burden of proof primarily casted upon it to explain the identity and creditworthiness of investor company i.e., Bhillai Holdings Pvt. Ltd., which is group concern having common directors and shares issued at face value and no share premium has been charged. Genuineness of the share transactions and correctness of such details has not been disputed by the Revenue Authorities except making general observations. Therefore, considering the evidences placed by Ld. A/R to explain the 26 I.T.A. No. 1508/Kol/2019 Assessment Year: 2012-13 Rabindra Enterprises Pvt. Ltd. nature and source of the alleged share application money, we find no reason to interfere with the findings of the ld. CIT(A) deleting the addition of Rs.27,22,00,000/- made u/s 68 of the Act. 18. In the result, appeal of the revenue is dismissed. Order pronounced in the Court on 21 st December, 2023 at Kolkata. Sd/- Sd/- (RAJPAL YADAV) (DR. MANISH BORAD) VICE-PRESIDENT ACCOUNTANT MEMBER Kolkata, Dated 21/12/2023 *SC SrPs आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Assessee 2. ŮȑथŎ / The Respondent 3. संबंिधत आयकर आयुƅ / Concerned Pr. CIT 4. आयकर आयुƅ)अपील (/ The CIT(A)- 5. िवभागीय Ůितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडŊ फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata