M/s. Goel & Jain Moulds Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1606/DEL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6462 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 04-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: SANJEEV AGARWAL
• Keywords: Unexplained cash credit; Additional evidence; Question of law; Capital receipt
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C: NEW DELHI BEFORE SHRI I.C.SUDHIR, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 1606/DEL/2012 ASSESSMENT YEAR: 2006-07 GOEL & JAIN MOULDS PVT. LTD. 19, 2 ND FLOOR, KAILASH ENCLAVE PEETAM PURA NEW DELHI PAN : AACCG3327P VS. ITO WARD-12(2) NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI SANJEEV AGARWAL, ADV. REVENUE BY SHRI T. VASANTHAN, SR. DR DATE OF HEARING 20.01.2016 DATE OF PRONOUNCEMENT 11.03.2016 ORDER PER O.P. KANT, A.M.: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST ORD ER DATED 23.01.2012 OF THE CIT(A)-XVIII, NEW DELHI, FOR ASSE SSMENT YEAR 2006-07, RAISING FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE LD. CIT(A) HAS MADE GROSS ERROR IN FA CTS AND LAW IN SUSTAINING THE ADDITIONS OF SHARE CAPITAL & UNSECUR ED LOANS TAKEN DURING THE YEAR OF INCORPORATION OF THE COMPANY BEFORE COM MENCEMENT OF THE BUSINESS OF THE COMPANY. 2. THAT THE LD. CIT(A) HAS MADE GROSS ERROR IN LAW IN SUSTAINING THE ADDITIONS OF UNSECURED LOANS HOLDING THAT ASSESSEE HAS FAILED TO MENTIONED THE SOURCE OF THE SOURCE. 3. THAT THE LD. CIT(A) HAS FAILED TO OBSERVE THAT T HE ASSESSEE HAD ALREADY FURNISHED THE ADDRESSES OF ALL SHARE HOLDERS & UNSE CURED LOANS TO THE ASSESSING OFFICER AND DESPITE REPEATED REQUESTS OF THE ASSESSEE, THE ASSESSING OFFICER DID NOT EXAMINE THEM FOR THEIR CR EDITWORTHINESS, IDENTITY 2 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. OR GENUINENESS. THE ASSESSING OFFICER FAILED TO DO SO EVEN AFTER THE MATTER WAS REMANDED TO HIM TWICE BY LD. CIT(A). 4. THAT THE LD. CIT(A) HAS MADE GROSS ERRORS IN F ACTS & LAW IN OBSERVING THAT THE IDENTITY OF SHAREHOLDERS ARE DOUBTFUL ON T HE BASIS OF PAN OR VOTER ID CARDS. AS A MATTER OF FACTS, BOTH ARE PRESCRIBED AS IDENTITY PROOFS BY GOVT. OF INDIA. QUITE INTRIGUINGLY, LD. CIT(A) HAS CAST A SHADOW OF DOUBT ON AUTHENTICITY OF THE IDENTITY PROOF OF PAN CARD I SSUED BY INCOME TAX DEPARTMENT ITSELF. 5. THAT THE LD. CIT(A) HAS MADE GROSS ERRORS IN L AW IN SUSTAINING THE LOANS WHICH WERE RETURNED THROUGH BANKING CHANNELS AFTER THE COMPANY RAN INTO HEAVY LOSSES AND ITS BUSINESS WAS DISCONTI NUED. 6. THAT THE LD. CIT(A) & THE ASSESSING OFFICER HA S DEALT ALL LOANS & SHARE CAPITALS IN A CUMULATIVE MANNER WITHOUT DISC USSING INDIVIDUAL CASES AND MADE HIGH PITCHED ADDITIONS WITHOUT JUSTI FICATION. 7. THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAD MADE GROSS ERRORS IN FACTS & LAW IN SUSTAINING THE ADDITIONS MADE BY THE ASSESSING OFFICER. 8. THAT THE LD. CIT(A) HAS SUSTAINED THE ADDITIONS IN VIOLATION OF THE BINDING PRECEDENTS OF SUPERIOR COURTS OF LAW. 9. THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E, THE ORDER U/S 250 OF LD. CIT(A) AND THE ASSESSMENT ORDERS OF THE ASSESSI NG OFFICER ARE BAD IN ALW AND LIABLE TO BE QUASHED. 10. THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CA SE, THE ADDITIONS OF RS. 13,00,000/- & RS. 58,54,200/- MADE BY THE ASSESSIN G OFFICER AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF SHARE CAP ITAL & UNSECURED LOANS RESPECTIVELY ARE BAD IN LAW AND LIABLE TO BE DELETED. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 9.11.2006 DECLARING A LOSS OF RS. 1,31,959/-, HOWEV ER, TAX WAS PAID ON THE BOOK PROFIT RS. 27,620/-. THE CASE WAS SELECTED FOR SCRUTINY AND IN THE COURSE OF SCRUTINY THE ASSESSING OFFICER OBSERV ED THAT SHARE CAPITAL OF RS. 13,00,000/- WAS INTRODUCED BY THE ASSESSEE COMPANY DURING THE YEAR. THE ASSESSING OFFICER ASKED DOCUMENTS IN RESP ECT OF IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT/HOLDER AND GENUINENESS OF THE TRANSACTIONS. IN RESPONSE, THE ASSESSEE FILED ONLY NAME AND ADDRESS OF THE SHARE APPLICANTS/ SHARE HOLDERS AND OTHER DOCUM ENTS INCLUDING CONFIRMATIONS WERE NOT FILED. THE ASSESSING OFFICER OBSERVED FROM THE LEDGER STATEMENT OF THE ASSESSEE COMPANY THAT THE S HARE APPLICATION 3 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. MONEY WAS RECEIVED IN CASH FROM THE SHARE HOLDERS A ND THE SHARE HOLDERS WERE STATED TO BE RELATIVES OF THE DIRECTOR S. IN VIEW OF THE FACTS, THE ASSESSING OFFICER HELD THE SHARE CAPITAL OF RS. 13,00,000/- CREDITED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. SIMIL ARLY, THE ASSESSING OFFICER NOTICED UNSECURED LOANS OF RS. 62,09,200/- RECEIVED FROM EIGHT PARTIES. IN RESPECT OF THE TWO PARTIES, THE ASSESSE E SUBMITTED PROOF IN SUPPORT OF IDENTITY, BANK STATEMENT AND THEIR INCOM E TAX RETURNS. THE ASSESSING OFFICER ACCEPTED THEIR CREDITWORTHINESS A ND IN ABSENCE OF DOCUMENTS IN RESPECT OF THE OTHER PARTIES, HE HELD THE BALANCE UNSECURED LOAN OF RS. 58,54,200/- AS UNEXPLAINED CASH CREDIT. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A), THE ASSESSEE FILED COPY OF VOTER IDENTITY CARD / PERMAN ENT ACCOUNT NUMBER( PAN) CARD IN CASE OF ADDITION OF RS. 13,00,000/- U/ S 68 OF THE ACT AND SUBMITTED THAT IN VIEW OF THE JUDGMENT OF THE SUPRE ME COURT IN THE CASE OF CIT VS. LOVELY EXPORT PVT. LTD., 2008, 216 CTR, 195 (SC) THAT THE DEPARTMENT WAS FREE TO PROCEED TO REOPEN THEIR INDI VIDUAL ASSESSMENT BUT THIS AMOUNT OF SHARE APPLICATION MONEY CANNOT B E REGARDED UNDISCLOSED INCOME OF THE ASSESSEE COMPANY U/S 68 O F THE ACT. THE CIT(A) FORWARDED ALL THE DOCUMENTS , WHICH WERE SUB MITTED BEFORE HIM AS ADDITIONAL EVIDENCE IN THE RULE 46A OF THE INCO ME TAX RULES, TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING O FFICER THOUGH OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCES, HOWEVER, SENT REMAND REPORT STATING THAT THE ASSESSEE WAS NEITHER FULFIL LED THE REQUIREMENTS OF SECTION 68 OF THE ACT BEFORE THE AO NOR BEFORE THE CIT(A) AND THEREFORE, THE ADDITION NEED TO BE SUSTAINED. THE CIT(A) AFTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSESSEE SUSTAINED THE ADDITION O F 13,00,000/-. SIMILARLY THE CIT(A), AFTER FORWARDING THE ADDITION AL EVIDENCE IN RESPECT OF UNSECURED LOANS TO THE ASSESSING OFFICER AND GETTIN G HIS REPORT AND PROVIDING OPPORTUNITY TO THE ASSESSEE, SUSTAINED TH E ADDITION OF RS. 4 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. 58,54,200/- FOR UNEXPLAINED LOAN AS CASH CREDIT. AG GRIEVED, THE ASSESSEE IS BEFORE US. 3.1 IN RESPECT OF GROUND NO. 1 , THE LD. AUTHORISED REPRESENTATIVE ( IN SHORT AR) SUBMITTED THAT THE ASSESSEE COMPANY WAS INCORPORATED IN THE CONCERNED YEAR ONLY AND THEREFORE THE ASSESSEE COUL D NOT HAVE EARNED SUCH A HUGE PROFIT SHOWN AFTER COMMENCING ITS MANUF ACTURING ACTIVITIES. IN SUPPORT OF HIS CONTENTION, HE RELIED ON THE JUDG EMENT OF HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VERSUS BHARAT ENGINEERING AND CONSTRUCTION COMPANY (1972) 4 SCC 4 01. HE, FURTHER SUBMITTED THAT EVEN ADVANCES TO THE SUPPLIERS OF MA CHINERY AND PRE- OPERATIVE EXPENSES HAVE ALSO BEEN ADDED AS UNEXPLAI NED LOANS WITHOUT APPLICATION OF MIND. WHEREAS, THE LD. SENIOR DR O N THE OTHER HAND SUBMITTED THAT IN BHARAT ENGINEERING AND CONSTRUCTI ON COMPANY ( SUPRA), IT WAS HELD THAT FINDINGS OF THE TRIBUNAL T HAT THE CASH CREDITS WAS CAPITAL IN NATURE AND SUCH A HUGE PROFIT CANNOT BE EARNED IN 1 ST YEAR, WAS A QUESTION OF FACT AND NO SUBSTANTIAL QUESTION OF L AW AROSE. HE FURTHER RELYING ON THE JUDGMENT OF THE HONBLE DELHI HIGH C OURT IN THE CASE OF INDUS VALLEY PROMOTERS LTD. VS. CIT (2008), 305 ITR 202 SUBMITTED THAT WHERE THERE IS AN UN-EXPLAINED CASH CREDIT, IT WAS OPEN TO THE ASSESSING OFFICER TO HOLD THAT IT WAS THE INCOME OF THE ASSES SEE AND NO FURTHER BURDEN LIES ON THE ASSESSING OFFICER TO SHOW THAT I NCOME IN QUESTION COMES FROM ANY PARTICULAR SOURCE. 3. 2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. WE FIND THAT THE HONBLE SUPREME COURT IN T HE CASE OF COMMISSIONER OF INCOME TAX V/S BHARAT ENGINEERING A ND CONSTRUCTION COMPANY (SUPRA) HAS HELD AS UNDER: THE CONTROVERSY IN THIS APPEAL IS WHETHER A QUESTI ON OF LAW ARISES FROM THE ORDER OF THE TRIBUNAL. THE TRIBUNAL CAME T O THE CONCLUSION THAT THE CASH CREDIT ENTRIES TOTALLING RS. 2,50,000 BROUGHT TO TAX BY 5 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. THE ITO ON THE GROUND THAT THEY REPRESENTED THE INC OME OF THE ASSESSEE-RESPONDENT FROM UNDISCLOSED SOURCES WAS NO T CORRECT. IT CAME TO THE CONCLUSION THAT, THOUGH THE EXPLANATION GIVEN BY THE ASSESSEE IN RESPECT OF THOSE CASH CREDIT ENTRIES IS NOT TRUE, YET FROM THE PROVED CIRCUMSTANCES THOSE CASH CREDITS CO ULD NOT BE THE INCOME OF THE ASSESSEE. AGGRIEVED BY THE DECISION O F THE TRIBUNAL, THE CIT MOVED THE TRIBUNAL UNDER S. 66(1) OF THE IN DIAN IT ACT, 1922, TO REFER CERTAIN QUESTIONS TO THE HIGH COURT FOR ITS OPINION. THE TRIBUNAL REJECTED THE APPLICATION ON THE GROUND THAT ITS FINDINGS ARE FINDINGS OF FACT AND THAT NO QUESTION OF LAW AR OSE FROM THEM. THEREAFTER, THE ASSESSEE MOVED THE HIGH COURT UNDER S. 66(2). THAT APPLICATION WAS REJECTED BY THE HIGH COURT. AG AINST THAT DECISION THIS APPEAL HAS BEEN BROUGHT BY SPECIAL LE AVE. 2. THE ASSESSEE-COMPANY IS AN ENGINEERING CONSTRUCTIO N COMPANY. IT COMMENCED BUSINESS IN MAY, 1943. IN THE IR ACCOUNT BOOKS, THERE ARE SEVERAL CASH CREDIT ENTRIES IN THE FIRST YEAR OF ITS BUSINESS. WE ARE CONCERNED WITH ONLY FIVE OF THOSE CASH CREDIT ENTRIES. ON 1ST JUNE, 1943, THERE IS A CASH CREDIT ENTRY OF RS. 1,00,000. ON 6TH JULY, 1943, THERE IS A CASH CREDIT ENTRY OF RS. 50,000. ON 30TH AUG., 1943, THERE IS A CASH CREDIT ENTRY OF RS. 50,000. ON 2ND DEC., 1943, THERE IS A CASH CREDIT E NTRY OF RS. 15,000 AND ON 15TH MARCH, 1944, THERE IS A CASH CRE DIT ENTRY OF RS. 35,000. THESE CASH CREDIT ENTRIES TOTAL UP TO RS. 2 ,50,000. THE ITO CALLED UPON THE ASSESSEE TO EXPLAIN THOSE CASH CRED IT ENTRIES. THE EXPLANATION GIVEN BY THE ASSESSEE WAS FOUND TO BE F ALSE BY THE ITO, THE AAC AND THE TRIBUNAL. BUT, ALL THE SAME, T HE TRIBUNAL FELT THAT THESE CASH CREDIT ENTRIES COULD NOT REPRESENT THE INCOME OR PROFITS OF THE ASSESSEE-COMPANY AS THEY WERE ALL MA DE VERY SOON AFTER THE COMPANY COMMENCED ITS ACTIVITIES. IN OUR OPINION, THOUGH THE ORDER OF THE TRIBUNAL IS NOT HAPPILY WORDED, IT S FINDING APPEARS TO BE THAT IN THE VERY NATURE OF THINGS THE ASSESSE E COULD NOT HAVE EARNED SUCH A HUGE AMOUNT AS PROFITS VERY SOON AFTE R IT COMMENCED ITS ACTIVITIES. A CONSTRUCTION COMPANY TA KES TIME TO EARN PROFITS. IT COULD NOT HAVE EARNED A PROFIT OF RS. 1,00,000 WITHIN A FEW DAYS, AFTER THE COMMENCEMENT OF ITS BUSINESS. HENCE, IT IS REASONABLE TO ASSUME THAT THOSE CASH CREDIT ENTIRES ARE CAPITAL RECEIPTS THOUGH FOR ONE REASON OR OTHER THE ASSESSE E HAD NOT COME OUT WITH THE TRUE STORY AS REGARDS THE PERSON FROM WHOM IT GOT THOSE AMOUNTS. IT IS TRUE THAT IN THE ABSENCE OF SA TISFACTORY EXPLANATION FROM THE ASSESSEE THE ITO MAY ASSUME TH AT CASH CREDIT ENTRIES IN ITS BOOKS REPRESENT INCOME FROM U NDISCLOSED SOURCES. BUT WHAT INFERENCE SHOULD BE DRAWN FROM TH E FACTS PROVED 6 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. IS A QUESTION OF FACT AND THE TRIBUNAL'S FINDING ON THAT QUESTION IS FINAL. 3. THE HIGH COURT AFTER CAREFUL EXAMINATION OF THE VA RIOUS FINDINGS REACHED BY THE TRIBUNAL HAS COME TO THE CONCLUSION THAT THE TRIBUNAL'S FINDINGS ARE FINDINGS OF FACT. WE AGREE WITH THAT CONCLUSION 3.3 WE FIND THAT THE HONBLE SUPREME COURT HAS NOT LAID DOWN ANY RATIO IN THE JUDGEMENT AND THE APPEAL WAS DISMISSED AFFIRMING THE HIGH COURT JUDGEMENT THAT THE FINDINGS OF THE TRIBUNAL W ERE FINDING OF FACTS ONLY. FURTHER, IN THE CASE OF INDUS VALLEY PROMOTER S LTD THE ISSUE OF SHARE CAPITAL UNDER SECTIONS 68 OF THE IT ACT WAS I NVOLVED AND THE JURISDICTIONAL HIGH COURT WHILE DELIVERING THAT THI S JUDGEMENT HELD AS UNDER: 19. IT IS WELL SETTLED THAT THE ASSESSEE MUST DISCHARG E THE BURDEN OF PROVING THE IDENTITY OF THE CREDITORS AND ALSO TO G IVE THE SOURCE OF THE DEPOSITS. IN OTHER WORDS, THE CREDITWORTHINESS OF THE DEPOSITORS MUST BE ESTABLISHED TO THE SATISFACTION OF THE AO. WHERE THERE IS AN UNEXPLAINED CASH CREDIT, IT IS OPEN TO THE AO TO HOLD THAT IT IS INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIE S ON THE AO TO SHOW THAT INCOME IN QUESTION COMES FROM ANY PARTICULAR SOURCE. ( EMPHASIS SUPPLIED) 3.4. THUS, RESPECTFULLY FOLLOWING THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, WE HOLD THAT ONCE THE AS SESSEE FAILED IN EXPLAINING THE SHARE CAPITAL AND UNSECURED LOANS RE CEIVED, THERE WAS NO OPTION BEFORE THE ASSESSING OFFICER EXCEPT MAKING A DDITION IN THE HANDS OF THE ASSESSEE UNTIL AND UNLESS, THE ASSESSEE WOUL D HAVE COME FORWARD WITH THE NAME OF THE PERSON TO WHOM THE UNEXPLAINED CASH CREDIT BELONGED. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS DISMISSED. 4. IN GROUND NOS. 2 TO 10, THE ASSESSEE HAS RAISED ISSUE OF HOLDING SHARE CAPITAL OF RS. 13,00,000/- AND UNSECURED LOAN S OF RS. 58,54,280/- AS UNEXPLAINED BY THE ASSESSING OFFICER AND CONFIRM ED BY THE CIT(A). IN RESPECT OF THE GROUNDS, THE LD. AR SUBMITTED THAT T HE ASSESSEE COULD NOT 7 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. BE ASKED TO FURNISH SOURCE OF SOURCE. FURTHER, HE S UBMITTED THAT THE ASSESSEE HAD SUPPLIED ADDRESSES OF THE SHARE HOLDER S AND PERSONS WHO PROVIDED UNSECURED LOANS TO THE AO, DESPITE THAT, THE AO DID NOT EXAMINE THE CREDITWORTHINESS, IDENTITY AND GENUINEN ESS OF THE SHARE HOLDERS AND UNSECURED LOAN PROVIDERS. THE LD. AR RE LYING ON THE JUDGMENTS CIT VS. ORISSA CORPORATION 1986, 159 ITR 78 SUBMITTED THAT THE ASSESSING OFFICER WAS REQUIRED TO CONDUCT INQUI RY IN THE PARTICULARS OF THE CREDITORS FURNISHED BY THE ASSESSEE. THE LD. AR FURTHER SUBMITTED THAT THE PAN CARD OR THE VOTER ID IS ONE OF THE VALID ID ENTITY PROOF BUT SAME WAS NOT ACCEPTED BY THE LD. CIT(A) IN SUPPORT OF TH E IDENTITY. THE LD. AR ALSO SUBMITTED THAT ALL THE LOANS WERE RECEIVED AND RETURNED THROUGH BANKING CHANNEL, WHICH CONFIRMED THE GENUINENESS OF THE TRANSACTION. HE ALSO REITERATED THE GROUNDS OF APPEAL RAISED IN THE APPEAL. FURTHER HE RELIED ON THE JUDGMENT OF HONBLE APEX COURT IN IN THE CASE OF CIT VS M/S DIVINE LEASING & FINANCE LTD IN S.L.P.(C) / 200 8 (CC 375/2008), WHEREIN IT IS HELD THAT IF THE SHARE APPLICATION MO NEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHARE HOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PRO CEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HE, THUS, SUBMITTED THAT THE INSTANT CASE NAMES AND ADDRESS WERE MADE AVAILA BLE TO THE ASSESSING OFFICER , HENCE, NO ADDITION COULD BE SUS TAINED IN THE HANDS OF THE ASSESSEE. ON THE OTHER HAND, LD. SR. DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD INCLUDING THE PAPER BOOK OF THE ASSESSEE CON TAINING PAGES 1 TO 76. WE FIND THAT IN THE GROUNDS, THE ASSESSEE HAS A GITATED WITH TWO ADDITIONS. THE FIRST ADDITION IS IN RESPECT OF UNEX PLAINED SHARE CAPITAL OF RS. 13,00,000/- AND THE SECOND ADDITION IS IN RESPE CT OF UNEXPLAINED UNSECURED LOANS OF RS. 58,54,200/- . THE FACTS IN R ESPECT OF SHARE CAPITAL OF RS. 13,00,000/- ARE THAT IT WAS RECEIVED IN CASH FROM THE FRIENDS AND 8 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. RELATIVES OF THE PROMOTERS/ DIRECTORS OF THE ASSES SEE COMPANY AND BEFORE THE ASSESSING OFFICER NO CONFIRMATIONS, PROO F IN SUPPORT OF THE IDENTITY, GENUINENESS OF THE TRANSACTION AND CREDIT WORTHINESS OF THE CREDITOR WERE FILED. BEFORE THE CIT(A), THE ASSESSE E FILED PROOF IN SUPPORT OF IDENTITY LIKE COPY OF PAN CARD OR VOTER CARD ONL Y AND NO DOCUMENTS IN SUPPORT OF CREDITWORTHINESS OF GENUINENESS OF THE T RANSACTIONS WERE FILED . EVEN BEFORE THE LD. CIT(A), THE ASSESSEE ONLY REP EATED HIS SUBMISSION THAT THE DEPARTMENT COULD CONDUCT NECESSARY INQUIRY OR TAKE ACTION IN THE HANDS OF THE INDIVIDUAL SHARE HOLDERS RATHER THAN T HE ASSESSEE, BEFORE THE CIT(A), THE ASSESSEE ALSO STATED THAT THE INCOM E OF THE SHARE HOLDERS WAS BELOW TAXABLE LIMIT DURING THE RELEVANT PERIOD, HOWEVER, NO EVIDENCE IN SUPPORT OF THE SOURCE OF INCOME IN THEIR HAND OR THE CREDITWORTHINESS OF THOSE PERSONS WERE FILED. IT IS EVIDENT FROM THE A BOVE FACTS THAT THE PRIMARY ONUS WAS ON THE ASSESSEE TO FILE DOCUMENTS IN SUPPORT OF IDENTITY, GENUINENESS OF THE TRANSACTION AND CREDIT WORTHINESS OF THE SHAREHOLDERS, HOWEVER, THE ASSESSEE HAS FILED ONLY DOCUMENT IN SUPPORT OF IDENTITY. IN ABSENCE OF DOCUMENTS, THE BURDEN OF ASSESSEE HAS NOT BEEN DISCHARGED AND THUS THE RATIO OF THE JUDGMENT OF THE HONBLE COURT IN THE CASE OF CIT VS. ORISSA CORPORATION (SUPRA) DOES NOT APPLY TO THE FACTS OF THE ASSESSEE. SIMILARLY THE FACTS OF THE C ASE OF DIVINE LEASING AND FINANCE LTD (SUPRA) ARE ALSO DIFFERENT AS THAT WAS THE CASE OF A PUBLIC LIMITED COMPANY, WHERE THE SHARE APPLICANTS WERE NO T RELATED TO THE ASSESSEE AND MOSTLY APPLIED THROUGH PUBLIC SUBSCRIP TION, WHERE AS IN THE CASE OF THE ASSESSEE ALL THE SHARE HOLDERS ARE RELA TIVE AND FRIENDS OF THE ASSESSEE AND THEY HAVE APPLIED IN CASH. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ASSES SEE HAS FAILED TO DISCHARGE ITS ONUS TO ESTABLISH IDENTITY OF THE SHA REHOLDERS, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE SHA REHOLDERS IN RELATION TO THE ADDITION OF RS. 13 LAKH MADE BY THE ASSESSING O FFICER. THUS WE HOLD 9 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. THAT THERE IS NO INFIRMITY IN THE FINDINGS OF THE C OMMISSIONER OF INCOME TAX (APPEALS) ON THE ISSUE IN DISPUTE. 6. THE SECOND ADDITIONS IS IN RESPECT OF UNSECURED LOAN OF RS. 5854200/- HELD AS UNEXPLAINED, OUT OF UNSECURED LOA NS OF RS. 62,09,200/- RECEIVED BY THE ASSESSEE DURING THE YEA R. THE ASSESSING OFFICER HELD THAT NO EVIDENCE IN SUPPORT OF GENUINE NESS OF THE TRANSACTION OR CREDITWORTHINESS OF THE UNSECURED LOAN CREDITORS WERE FILED EXCEPT TWO PERSONS SMT. POONAM GOEL AND SHRI JAI PRAKASH GOEL, THEREFORE, CREDITS IN RESPECT OF THOSE TWO PERSONS WERE ACCEPTED AND T HE CREDIT FROM THE BALANCE PERSONS OF RS. 58,54,200/- WAS HELD AS UNEX PLAINED IN TERMS OF SECTION 68 OF THE ACT. BEFORE THE LD. CIT(A), THE ASSESSEE FILED COPY OF BANK STATEMENT OF THE UNSECURED LOAN CREDITORS, HOW EVER, NO DOCUMENT IN SUPPORT OF CREDITWORTHINESS WERE FILED. THE RELE VANT FINDING OF THE LD. CIT(A) ON THE ISSUE OF ADDITION OF UNSECURED LOAN C REDITORS IS AS UNDER : THE APPELLANT HAS BEEN UNABLE TO EXPLAIN THE CREDI TWORTHINESS OF THE CREDITORS WHO HAVE ADVANCED LOANS TO THE APP ELLANT COMPANY. WHILE GIVING THE COPY OF THE BANK STATEMEN TS THE APPELLANT HAS NOT MENTIONED ANYTHING REGARDING THE SOURCE FROM WHICH THE AMOUNTS HAVE BEEN ADVANCED. THE CAPI TAL ACCOUNT OF THE CREDITORS FILED BY THE APPELLANT ARE UNSIGNED, THEY SHOW HUGE LOANS FROM OTHER PARTIES WHOSE CREDITWORTHINESS IS ITSELF IN DOUBT. THE DEPOSITS A RE NOT IN CONSONANCE WITH THE INCOME RETURNED BY THE CREDITOR S. AS THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATUR E AND SOURCE OF THE SUMS FOUND CREDITED IN THE BOOKS WAS NOT SATISFACTORY THERE WAS, PRIMA FACIE, EVIDENCE AGAIN ST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY. THE BURDEN WA S ON THE ASSESSEE TO REBUT THE SAME, AND, HE FAILED TO REBUT IT, IT CAN THEREFORE BE HELD AGAINST THE ASSESSEE THAT IT WAS A RECEIPT OF AN INCOME NATURE. THE APPELLANT HAS FAILED TO DISCH ARGE ITS ONUS TO PRODUCE LEGALLY ACCEPTABLE EVIDENCE OF CRED ITWORTHINESS OF THE CREDITOR. THE EXPRESSION THE ASSESSEE OFFER S NO EXPLANATION MEANS THE ASSESSEE OFFERS NO PROPER, R EASONABLE AND ACCEPTABLE EXPLANATION AS REGARDS THE SUMS FOUN D CREDITED IN THE BOOKS MAINTAINED BY THE ASSESSEE. IN THIS CA SE THE APPELLANT HAS OFFERED NO CREDITABLE EXPLANATION ABO UT THE UNSECURED LOANS CREDITED IN HIS BOOKS., THE RECEIPT OF RS. 10 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. 58,54,200/-, THEREFORE CANNOT BE TREATED AS EXPLAIN ED. CONSIDERING THE ABOVE FACTS, THE ADDITION OF RS. 58 ,54,200/- MADE BY THE AO U/S 68 IS CONFIRMED. 7. THUS, WE FIND THAT THOUGH THE CIT(A) DOUBTED T HE IDENTITY OF THE CREDITORS IN BEGINNING PARAS OF HIS ORDER, BUT FINA LLY, HE AFFIRMED THE UNEXPLAINED CASH CREDITS IN VIEW OF LACK OF CREDITW ORTHINESS OF THE CREDITORS. IN HEARING BEFORE US ALSO THE LD. AR C OULD NOT BROUGHT ANY EVIDENCE SO AS TO ESTABLISH THE CREDITWORTHINESS OF THE CREDITORS AND THEREFORE IN OUR OPINION, THE ASSESSEE HAS FAILED TO DISCHARGE ITS PRIMARY ONUS OF SATISFYING THE REQUIREMENTS OF PROVISIONS O F SECTION 68 OF THE ACT. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE CIT(A) HAS PASSED A WELL REASONED ORDER ON THE ISS UE IN DISPUTE AND NO INTERFERENCE BY US IS REQUIRED. ACCORDINGLY, WE UP HOLD THE FINDING OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS. 58,54,200/ - TOWARDS UNEXPLAINED UNSECURED LOAN AND DISMISS GROUND NOS. 2 TO 10 OF T HE APPEAL OF THE ASSESSEE. 8. GROUND NO. 11 OF THE APPEAL BEING GENERAL I N NATURE, IT IS NOT REQUIRED TO ADJUDICATE UPON AND THEREFORE DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DI SMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH, 2016. SD/- SD/- (I.C.SUDHIR) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 TH MARCH, 2016. BINITA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 11 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD. 5. DR ASST. REGISTRAR, ITAT, NEW DELHI SL. NO. PARTICULARS DATE 1. DATE OF DICTATION (HAND WRITTEN ) 03-08.3.2016 2. DATE ON WHICH THE DRAFT IS PLACED BEFORE THE DICTATING MEMBER 08.03.2016 3. DRAFT PLACED BEFORE THE OTHER MEMBER 4. APPROVED DRAFT COMES TO THE SR. PS/PS 5. KEPT FOR PRONOUNCEMENT ON 6. FINAL ORDER RECEIVED AFTER PRONOUNCEMENT 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILES GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR 10. DATE OF DISPATCH OF ORDER 12 IT A NO. 1606/DEL/2012 GOEL & JAIN MOULDS PVT. LTD.