M/s Kamal Rayon Pvt. Ltd., Surat V. ITO, Ward 1(1)(3), Surat

ITA 161/SRT/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1930 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 08-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL DHAKA
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained cash credit; Share purchase agreement; Question of law
• Section: 131; 68; 143(3); 133(6)

Judgement Text

M/S. KAMAL RAYON PVT. LTD. VS. ITO, WARD.1(1)(3)/SR T/I.T.A. NO. 161/SRT/2018/A.Y.12-13 PAGE 1 OF 24 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . .. . . .. . , . .. . . .. . , , , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A NO.161/SRT/2018 / ASSESSMENT YEAR : 2012-13 M/S. KAMAL RAYON PRIVATE LIMITED, 1003, NEW SARDAR TRADERS MARKET, SAHARA DARWAJA, SURAT-395010 [PAN: AAMCS 3194 G] VS. THE INCOME-TAX OFFICER, WARD-1(1) (3), SURAT. ' APPELLANT #$' /RESPONDENT /ASSESSEE BY SHRI RASESH SHAH - CA /REVENUE BY SHRI ANIL DHAKA, SR. D. R / DATE OF HEARING: 18.09.2018 /PRONOUNCEMENT ON 04.10.2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)-1, SURAT (CIT(A) FOR SHORT) DATED 20.02.2018 FOR THE AY 2012-13 M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 2 OF 24 WHICH IN TURN HAS ARISEN FROM THE ORDER DATED 20.03 .2015 PASSED BY THE INCOME-TAX OFFICER, WARD-1(1)(3), SUR AT (IN SHORT THE AO) UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1) GROUND NO.1 STATES THAT THE LEARNED CIT(A) HAS ERRED IN CIRCUMSTANCES OF THE CASE BY CONFIRMING ADDITION OF RS.1,44,15,000/- U/S. 68 WITHOUT CONSIDERING THE SUBMISSION IN SPITE OF THE FACT THAT THE APPELLANT HAS PROPERLY ADHERED TO EVERY NOTICE AND DIRECTIONS OF LEARNED AO AND HAS FULLY CO-OPERATED DURING THE ASSESSMENT PROCEEDINGS AS ALSO REMAND PROCEEDINGS TO CONVINCIN GLY AND EVIDENTIALLY PROVE THE GENUINENESS OF THE INVES TORS, BOOKS OF ACCOUNTS AND TRANSACTIONS OF THE APPELLANT COMPANY. 2) GROUND NO.2 STATES THAT THE LEARNED CIT(A) HAS E RRED IN LAW AND FACTS OF THE CASE BY CONFIRMING THE ACTI ON OF AO OF CONSIDERING SHARE INVESTMENT MADE BY INDIVIDUAL SHAREHOLDERS IN THE APPELLANT COMPANY AS INCOME OF THE APPELLANT ON THE FALSE BASIS THAT THE CREDITWORTHIN ESS AND GENUINENESS OF TRANSACTION IN RESPECT OF ALL THE IN VESTORS IS NOT ESTABLISHED. SIR, AS PER VARIOUS JURISDICTIONAL JUDGEMENTS, SHARE CAPITAL CANNOT BE ADDED TO THE IN COME OF THE APPELLANT IF THE APPELLANT HAS PROVIDED FULL IN FORMATION OF IDENTITY OF THE SHARE INVESTORS ALONG WITH THEIR GENUINENESS AND CAPACITY AND ALSO COMPLIED ALL LEGA L FORMALITIES AND ACCORDINGLY, THE AO AS WELL AS THE CIT(A) HAVE COMPLETELY ERRED IN FACT AND IN LAW ON THIS RE SPECT. M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 3 OF 24 3) GROUND NO.3 STATES THAT THE LEARNED CIT(A) HAS E RRED IN LAW AND FACTS BY RELYING ON IRRELEVANT CASE LAWS WHILE PASSING HIS ORDER SINCE THE FACTS OF THE APPELLANT ARE COMPLETELY DIFFERENT AND UNLIKE THE QUOTED CASES WH ERE THE IDENTITY OF THE INVESTORS WAS NOT ESTABLISHED, IN T HE CASE OF THE APPELLANT, THE IDENTITY, CAPACITY AND CONFIRMAT ION OF INVESTORS, ALL ARE CLEARLY ESTABLISHED ON RECORD. A LL THE INVESTORS ARE IT ASSESSES THEMSELVES AND THE TRANSA CTIONS ARE ALL DONE THROUGH BANK ACCOUNTS. THERE ARE NO CA SH DEPOSITS IN THE BANK ACCOUNTS CORRESPONDING TO THE INVESTMENTS AND THE AO HAS NOT BROUGHT ON RECORD A SINGLE EVIDENCE TO PROVE THAT THE INVESTORS ARE NOT GENUIN E OR THAT CASH HAS BEEN RETURNED TO THE INVESTORS AGAINST THE AMOUNT INVESTED BY THEM THROUGH BANK. MOREOVER, THE INVEST ORS HAVE STATED ON OATH THAT THEY HAVE INVESTED THE AMO UNTS. 4) GROUND NO.4 STATED THAT THE LEARNED CIT(A) HAS E RRED IN LAW AND ON FACTS BY CONFIRMING THE ACTION OF THE AO IN DISALLOWING SHARE INVESTMENT AMOUNT AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT WHICH IS NOT IN LINE WITH ACCOUNTING STANDARDS OR BUSINESS PRACTICE SINCE THE SAME CAN N EVER BE PART OF TAXABLE INCOME. 5) GROUND NO.5 STATES THAT THE LEARNED CIT(A) HAS E RRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO ON ASSUMPTION THAT INVESTOR PARTIES ARE NOT GENUINE PA RTIES WITHOUT APPRECIATING THAT ALMOST ALL INVESTOR PARTI ES HAVE PERSONALLY ATTENDED BEFORE THE AO, EITHER DURING TH E ASSESSMENT PROCEEDINGS OR SUBSEQUENTLY WHEN SUMMONS ISSUED U/S. 131 OF THE ACT AND HAVE CONFIRMED THAT THEY HAVE INVESTED IN THE APPELLANT COMPANY. FURTHER, T HEY HAVE ALSO PROVIDED THEIR COPIES OF ITR ACKNOWLEDGEM ENTS, PAN CARD, COMPUTATION OF TAX, BALANCE SHEETS, BANK PASSBOOKS / STATEMENTS ETC. AND WHICH WERE DULY ACKNOWLEDGED BUT WHICH HAVE BEEN CONVENIENTLY OMITT ED TO BE MENTIONED BY THE CIT(A) IN HIS ORDER. FURTHER LE ARNED M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 4 OF 24 CIT(A) FAILED TO REBUT APPELLANTS COUNTER REPLY SU BMITTED IN RESPONSE TO REMAND REPORT SUBMITTED BY LEARNED AO. ACCORDINGLY, THE LEARNED CIT(A) FRAMED ORDER WITH PREJUDICIAL MIND. 6) GROUND NO.6 STATES THAT THE LEARNED CIT(A) HAS E RRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ACTI ON OF AO OF DELIBERATELY OMITTING TO RECORD THE FACTS AS STA TED BY THE INVESTORS IN THE STATEMENTS RECORDED U/S. 131 OF TH E ACT AND DURING FURTHER ENQUIRY MADE U/S. 250(4) OF THE ACT. 7) GROUND NO.7 STATES THAT THE LEARNED CIT(A) HAS E RRED IN LAW AND FACTS OF THE CASE IN EVEN CONFIRMING THE ACTION OF AO OF ADDITIONS FOR SHARE INVESTMENTS RECEIVED FROM THE PROMOTER FAMILY MEMBERS ALSO EVEN THOUGH THE IDENTI TY, GENUINENESS AND CAPACITY OF ALL THE FAMILY MEMBERS WAS ESTABLISHED BEYOND DOUBT. 3. SINCE ALL THE GROUNDS OF APPEAL CAN BE SUMMARIZED A S AGAINST CONFIRMATION OF ADDITION OF RS.1,44,15,000/ - MADE ON ACCOUNT OF SHARE CAPITAL U/S.68 OF THE ACT. HENCE, THESE ARE BEING CONSIDERED TOGETHER. 4. SUCCINCTLY, FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE HAS RECEIVED SHAR E APPLICATION MONEY OF RS.1,44,15,000/- FROM 13 PARTIES AS DETAIL ED IN THE TABLE BELOW : SR. NO. NAME OF INVESTOR AMOUNT (RS.) 1 CHANDULAL BHIKHABHAI PAREKH 600000 2 ASMITABEN DIPAKBHAI RAJPARA 450000 M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 5 OF 24 3 REKHABEN BHARATBHAI GAJERA 450000 4 MAMTABEN JAYSUKHBHAI SHELADIYA 450000 5 PINAL CHANDULAL PAREKH 600000 6 NAYNABEN BHARATBHAI TAGADIYA 500000 7 VAISHALIBEN MUKESHBHAI MALANI 500000 8 MADHVI HITESH SHAH 410000 9 NILAM DIAM (HIMMATBHAI K. SAVLIA) 550000 10 SEJALBEN VISHLBHAI GONDALIYA 415000 11 VALLABHBHAI MANJIBHAI SAVALIYA 575000 12 SUNITABEN NARESHBHAI SAVALIYA 450000 13 JAYSHRIBEN BHARATBHAI KACHHADIYA 350000 14 SHILPABEN TUSHARBHAI SOJITRA 300000 15 NITABEN NARESHBHAI SAVALIYA 425000 16 AMITBHAI JAGDISHBHAI SHAH 400000 17 ALKABEN JERAMBHAI LIMBASIYA 325000 18 DAYABEN GHANSHYAMBHAI MALANI 250000 19 URMILABEN SHAILESHBHAI SHAH 400000 20 BINA JAYSUKHBHAI KACHHADIYA 375000 21 PARITABEN VIPULBHAI LIMBANI 360000 22 VIJAYKUMAR HIMMATBHAI SAWALIYA 265000 23 HASMUKH RAJ J RAMANI HUF 300000 24 NARENDRA S RAJPARA HUF 350000 25 MILAN SAREE (PROP. SUDHIR KUMAR BARAL) 1140000 26 KAMAL AGENCY (KNP) (PROP. JITENDRA JAIN) 290000 27 PAWANKUMAR JAIN (HUF) 285000 28 SANDEEP AGENCY (PROP. SANDEEP JAIN) 190000 29 VIDYA KANT SHUKLA 145000 30 HARAKCHAND JAIN (HUF) (MEERA TRADERS) 640000 31 KAMAL FABRICS (JITENDRA JAIN -HUF) 1725000 TOTAL: 14415000 5. IN ORDER TO VERIFY THE IDENTITY, CREDITWORTHINESS A ND GENUINENESS OF THE TRANSACTION, NOTICES U/S. 133(6) OF THE ACT WAS ISSUED TO VARIOUS PARTIES. HOWEVER, FOLLOWING S IX PARTIES M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 6 OF 24 VIZ. (1) SMT. URMILABEN SHAILESHBHAI SHAH (4 LAC SH ARE CAPITAL MONEY)(RS.1.72 LACS), (2) SMT. SHILPABEN TUSHARBHAI SOJITRA (3 LAC SHARE CAPITAL MONEY)( 1.83 LACS INCOME ) (3) SM T. MAMTABEN JAYSUKHBHAI SHELADIYA (RS.4 LACS SHARE APPLICATION MONEY AND RS.1.83 LACS INCOME) (4) SMT. VAISHALIBEN MUKESHBHA I MALANI (RS.5 LACS SHARE APPLICATION MONEY AND RS.1.76 LAC S INCOME) (5) NILAM DIAM (HIMMATBHAI K. SAVLIA) (RS.5.5 LACS SHARE APPLICATION MONEY AND RS.1.76 LACS INCOME)(6) VIJAY KUMAR HIMMATBHAI SAWALIYA (RS.2.65 LACS SHARE APPLICATION MONEY AND RS.1.55 LACS INCOME) HAVE NOT SUBMITTED ANY REP LY. THEREFORE, THE ASSESSEE WAS ASKED TO PRODUCE THESE PARTIES. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THESE PARTI ES BEFORE THE A.O. BUT FILE COPY OF ACKNOWLEDGMENT OF THEIR R ETURN OF INCOME, COMPUTATION OF INCOME, BALANCE SHEET, PROFI T AND LOSS ACCOUNT, CAPITAL ACCOUNT AND BANK ACCOUNT STATEMENT . ON VERIFICATION OF THESE DOCUMENTS, THE A.O. NOTED THA T THE BANK ACCOUNT SHOWS THAT SAME AMOUNT WAS DEPOSITED JUST O NE DAY BEFORE THE ISSUANCE OF CHEQUE FOR INVESTMENT WITH T HE ASSESSEE COMPANY. THEREFORE, THE A.O. TREATED THE SAME AS U NEXPLAINED AS THE CREDITWORTHINESS AND GENUINENESS OF TRANSACT ION WAS NOT PROVED. M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 7 OF 24 6. THE A.O. FURTHER ISSUED SUMMONS U/S. 131 OF THE ACT TO THE TEN PARTIES OUT OF WHICH SUMMONS COULD NOT BE S ERVED IN THE CASE OF SHRI HASMUKHRAJ J. RAMANI (HUF). HOWEV ER, REMAINING NINE PARTIES HAVE APPEARED BEFORE THE A.O . AND THEIR STATEMENT WAS RECORDED U/S. 131 OF THE ACT, WHEREIN EIGHT WOMEN HAVE STATED THAT THEY WERE NOT AWARE OF ANY I NVESTMENT MADE IN THE SHARES. THEREFORE, CONSIDERING THE DETA ILS FROM COMPUTATION OF INCOME, BALANCE SHEET, PROFIT AND LO SS ACCOUNT CAPITAL ACCOUNT, BANK ACCOUNT, THE A.O. HELD THAT T HE SAME IS NOT ACCEPTABLE AS THE BANK ACCOUNT SHOWS DEPOSIT BE FORE ISSUANCE OF CHEQUES IN INVESTMENT. THEREFORE, THE A .O. TREATED THE INVESTMENT MADE BY THE PARTIES AS UNEXPLAINED. 7. THE A.O. FURTHER NOTED THAT THERE ARE SEVEN INVESTO RS, WHICH ARE AT KANPUR TO WHOM NOTICE U/S. 133(6) OF A CT WAS ISSUED. IN RESPONSE TO WHICH THEY HAVE SUBMITTED T HE COPIES OF RETURN OF INCOME, BALANCE SHEET AND BANK ACCOUNT. H OWEVER, THE A.O. NOTED THAT THE DETAILS / DOCUMENTS SHOWS T HAT THEY HAVER MADE HUGE INVESTMENT WITH THE ASSESSEE COMPAN Y BUT THE CREDITWORTHINESS WAS NOT PROVED, HENCE TREATED AS UNEXPLAINED. M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 8 OF 24 8. AS FAR AS REMAINING EIGHT INVESTORS ARE CONCERNED, THEY HAVE NOT SUBMITTED THE DETAILS / DOCUMENTS CALLED F OR U/S. 133(6) OF THE ACT HENCE, THEIR IDENTITY, CREDITWORT HINESS AND GENUINENESS OF TRANSACTION IS NOT PROVED. CONSIDERI NG THESE FACTS, THE A.O. TREATED THE AMOUNT OF RS.1,44,15,00 0/- AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 9. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFOR E THE CIT(A) WHEREIN THE DETAILED SUBMISSIONS WERE MADE B EFORE THE CIT(A). THE ASSESSEE HAS SUBMITTED THE COPY OF MINU TES OF MEETING OF BOARD OF DIRECTOR, IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE TRANSACTION. FURTHER, THE APPLIC ATION OF SHARE APPLICATION FORM WAS CONFIRMED ON 01.01.2012, 12.01.2012 AND 08.02.2012 AND COPIES OF APPLICATION WAS DULY SUBMITTED BEFORE THE CIT(A), IT WAS ALSO CLAIMED TH AT ALL THE INVESTORS WITH THE APPELLANT COMPANY ARE FRIENDS AN D RELATIVES. THE ISSUE OF SHARE AND PREMIUM ARE BACKED BY VALUAT ION REPORT DULY QUALIFIED CHARTERED ACCOUNTANT AND ALL THE REQ UIREMENT WERE SUBMITTED BEFORE (ROC). FURTHER, THE AUDITORS OF THE COMPANY HAVE CERTIFIED THE AUTHENTICITY OF THE TRAN SACTIONS BY M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 9 OF 24 SIGNING ON THE AUDIT REPORT, IT WAS FURTHER SUBMITT ED THAT THE APPELLANT DELIVERED THE SHARE CERTIFICATE AND THERE IS NO SHARE CERTIFICATE. THE BRIEF AGM AND SHAREHOLDERS CONCER NING AGM-9 WAS SUBMITTED. FURTHER, WITH REFERENCE TO NOTICE DTD.04.08.2017 ISSUED BY THE CIT (A)-I U/S. 250(4) OUT OF REMAINING 22 SHAREHOLDERS, 18 INVESTORS WERE APPEAR ED BEFORE THE ITO, WARD.1 (3) WHO HAD RECORDED THE STATEMENT U/S. 131 OF THE ACT. FURTHER, THE AMOUNT INVESTED IN APPELL ANT COMPANY IS INVESTMENT OF ALL THE 22 INVESTORS. THE A.O. HAS ALSO FURNISHED REMAND REPORT IN RESPECT OF 18 PERSONS OF GENUINE PARTY WHICH IS REPRODUCED BY THE A.O. IN THE PARA 6 .1.11 OF APPELLATE ORDER OF THE CIT (A). HOWEVER, THE CIT ( A) WAS OF THE VIEW THAT 18 INVESTORS APPEARED FOR EXAMINATION DID NOT PRODUCE THE REQUIRED DOCUMENT I.E. COPY OF THREE YE ARS RETURN OF INCOME AND COMPLETE BANK STATEMENT OF LAST THREE YEARS. THE BANK ACCOUNT REFLECTING THAT MONEY WAS CREDITED IN HIS ACCOUNT ON THE SAME DAY OR NEXT DAY THROUGH TRANSFE R /WITHDRAWAL / RTGS TRANSFER. THEREFORE, ONUS LIES U /S. 68 HAS NOT BEEN DISCHARGED, THEREFORE, CIT (A) OBSERVED TH AT ALL THE PAPERS ARE MANUFACTURED AT THE BEHEST OF THE APPELL ANT AND NO REAL TRANSACTION. THEREFORE, CIT(A) HELD THAT IT IS THE CASE OF M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 10 OF 24 PROVIDING ACCOMMODATION ENTRY. THE CIT (A) OBSERVE D THAT THE AMOUNT CLAIMED TO BE RECEIVED BY THE APPELLANT DO NOT IN ANY WAY APPEAR TO BE GENUINE SHARE CAPITAL. THEY ARE NO THING BUT ARRANGED AFFAIRS BEING PRE-ORDAINED SERIES OF TRANS ACTIONS AND TAX EVASION DEVICE WHERE MONEY LAUNDERING TRANSACTI ONS HAVE BEEN CAMOUFLAGED AS SHARE CAPITAL. HENCE, NO CREDEN CE CAN BE PLACED ON THE COPIES OF VARIOUS DOCUMENTS FILED TO SUPPORT SUCH CLAIM OF SHARE CAPITAL CONTRIBUTION AND ACCORDINGLY ADDITION MADE BY THE A.O. IS CONFIRMED. 10. BEING AGGRIEVED THE ASSESSEE HAS FILED THIS BEFORE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSEES COMPANY WAS ESTABLISHED IN 2008 AND CARRIED ON BUSINESS OF MANUFACTURING, BUYING, SELLING, IMPORTI NG AND EXPORTING AND DEALING IN TEXTILES, COTTON, SILK ART SILK, RAYON, NYLON, SYNTHETIC FIBERS, STAPLE FIBERS, POLYESTER, WORSTED, WOOL, HEMP AND OTHER FIBER MATERIALS, YARN CLOTH, LINEN R AYON AND OTHER GOODS OR MERCHANDISE WHETHER TEXTILE FELTED, NETTED OR LOOPED. THE ASSESSEE COMPANY HAS SUBMITTED ACKNOWL EDGMENT OF COPY OF RETURN OF INCOME, BALANCE SHEET, CAPITAL ACCOUNT, BANK STATEMENT, SHARE APPLICATION AMOUNT FOR ALL TH E 31 M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 11 OF 24 INVESTORS BEFORE THE A.O. AND DURING THE ASSESSMENT PROCEEDINGS AS WELL AS IN THE APPELLATE PROCEEDINGS . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. HAS ISSU ED SUMMONS TO TEN PARTIES OUT OF WHICH NINE HAVE APPEA RED BEFORE HIM AND THEIR STATEMENT HAVE BEEN RECORDED. OUT OF 22 PARTIES, REMAINING 18 PARTIES WERE APPEARED BEFORE THE A.O. DURING THE REMAND PROCEEDINGS AND THEIR STATEMENTS WERE DULY R ECORDED BY THE A. O. THUS, THE FACTS REMAINS THAT ALMOST O F THE INVESTORS HAVE APPEARED BEFORE THE AO AND HAVE CONF IRMED THE INVESTMENT. THUS, THEIR IDENTITY, CAPACITY AND GEN UINENESS OF THE TRANSACTION IS ESTABLISHED. THE STATEMENT ON O ATH WAS RECORDED WHICH WITH EVIDENCES IN SUPPORT OF THE TRA NSACTION. THE A.O. HAS ISSUED SUMMONS TO NINE PERSONS WHO HAV E NOT ONLY APPEARED DURING THE ASSESSMENT PROCEEDINGS BUT THIS STATEMENT ON OATH HAS BEEN RECORDED. WITH REGARD T O THE REMAINING 22 PERSONS, SUMMONS TO 18 PERSONS SERVED AND THEY HAVE APPEARED. THUS, 27 OUT OF 31 PERSONS APPEARED BEFORE THE A.O. AND THEIR STATEMENT WAS RECORDED U/S. 131 OF T HE ACT. HOWEVER, REMAINING FOUR INVESTORS COULD NOT PRODUCE BEFORE THE A.O. AS SHRI CHANDULAL BHIKHABHAI PAREKH HAS UNFOR TUNATELY PASSED AWAY, SHRI CHANDULAL PAREKH COULD NOT ATTEND ED ALONG M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 12 OF 24 WITH BANK STATEMENT BEFORE THE A.O. AND OTHER INVES TORS SMITA D. RAJPARA APPEARED BEFORE A.O. WITH HER THREE MONT HS OLD SICK CHILD. HOWEVER, HER STATEMENT WAS NOT RECORDED BY T HE AO INSPITE OF REQUEST, SINCE THE OFFICER PREOCCUPIED W ITH OTHER SOME OTHER WORK. (4) INVESTOR SEJAL SHAH, GONDALIYA HAD SHIFTED TO AMROLI AND IT WAS PRACTICALLY IMPOSSIBLE FOR HER TO APPEAR BEFORE THE ITO IN SURAT, AS HER RELATIVE WOULD NOT PERMIT THE SAME. HOWEVER, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THE PERSONS HAVE REPLIED TO THE NOTICE ISS UED U/S. 133(6) AND FILED COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME ALONG WITH COMPUTATION OF INCOME OF A.Y.2012-13, CO PY OF BALANCE SHEET, PROFIT AND LOSS ACCOUNT, CAPITAL ACC OUNT AND RELEVANT BANK STATEMENT AND SHARE CERTIFICATE LETTE R. THE LEARNED COUNSEL FURTHER CITED COPY OF STATEMENT ON OATH RECORDED FROM THE PERSONS WHO APPEARED BEFORE THE A .O. WHICH WERE PLACED IN THE PAPER BOOK OF THE ASSESSEE. THE LEARNED A.R. ALSO RELY THE FORM OF APPLICATION, SHARE CERTIFICAT E, AND IN SOME CASES AADHAR CARD OF THE PARTIES CONCERNED. IT WAS FURTHER SUBMITTED THAT NUMEROUS JUDICIAL PRONOUNCEMENT ISSU ED TO SHARE AT PREMIUM WITHIN LAW AND ACCEPTABLE AND NO D OUBT. IT WAS FURTHER CONTENDED THAT THERE IS NO CASH DEPOSIT IN THE BANK M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 13 OF 24 ACCOUNT OF THE INVESTOR BEFORE ISSUE OF CHEQUE TO T HE ASSESSEE COMPANY. THEREFORE, IT WAS CONTENDED THAT CREDITWO RTHINESS AND GENUINENESS OF TRANSACTION HAS BEEN PROVED BY V ARIOUS DOCUMENTS AND BY APPEARING BEFORE THE A.O. IN PERSO N. THEREFORE, THE A.O. WAS NOT JUSTIFIED IN MAKING THE ADDITION U/S.68 OF THE ACT. THE LEARNED A.R. FURTHER PLACED RELIANCE IN THE CASE OF DCIT VS ROHINI BUILDERS, [2002] -256 IT R 306 (GUJARAT) WHEREIN IT WAS HELD THAT THE TRIBUNAL DEL ETED THE ADDITION U/S. 68 ACCEPTING THE GENUINENESS OF LOAN WHICH WERE RECEIVED AND REPAID BY THE ASSESSEE BY ACCOUNT PAYE E CHEQUES ESTABLISH THE CREDITWORTHINESS BY GIVING THEIR COMP LETE ADDRESS, GIR NO, PAN ALONG WITH COPIES OF ASSESSMENT ORDER W HERE APPEAL U/S. 250A WAS DISMISSED. THE SLP FILED BY TH E DEPARTMENT AGAINST THE SAID DECISION IS ALSO DISMIS SED BY HONBLE. S.C. REPORTED IN [2002] 254-ITR (SC) 275. THE LEARNED COUNSEL FURTHER PLACED RELIANCE IN THE CASE OF CIT VS. RANCHHOD JIVANBHAI NAKHAVA, [2012] [21 TAXMANN.COM 159] (GUJ .)(HC) WHEREIN THE HONBLE COURT HAS HELD THAT WHERE THE L ENDERS ARE ASSESSED TO INCOME TAX, ASSESSEE WHO IS PAN HAVE BE EN DISCLOSED. THE ASSESSEE HAS FURTHER PROVED GENUINE NESS OF THE TRANSACTION WHEN SUCH FACT FROM INCOME-TAX RETURN O F LENDERS M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 14 OF 24 IS ESTABLISHED. THE LEARNED COUNSEL FURTHER CITED NUMBER OF CASE LAWS CIT VS. VALUE CAPITAL SERVICES PVT. LTD. [221 CTR 0511] EMPHASIZE IN WHICH IT WAS OBSERVED THAT ONCE ADDITION OF WHICH MATERIAL WHICH WOULD PRIMA FACIE BURDEN OF TH E ASSESSEE OF SHAREHOLDER, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF SHAREHOLDER, THEREAFTER, IN THE CASE DISCHARGE FOR ITS NUMBER OF CREDIT EVIDENCE SUPPORT TO MAKE FOR THE ASSESSEE AND FASTEN ASSESSEE WHICH SUCH LIABILI TY U/S. 68 OF THE ACT. THE A.O. FAILED TO CARRY LOGICAL END BY FU RTHER INVESTIGATION, ADDITION U/S.68 WAS NOT ESTABLISHED. 11. ON THE OTHER HAND, THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT TURNOVER OF THE INVES TOR WAS NOT UP TO THE MARK AND THEY HAVE VERY LOW INCOME. SHARE APPLICANTS HAVE OPEN THEIR BANK ACCOUNT, PARTICULAR PERIOD. THOUGH THE PERSONS ARE FRIENDS AND RELATIVES OF THE ASSESSEE COMPANY. THE LEARNED SR.DR REFERRED THE PAGE 21 TO 31 OF THE APPELLATE ORDER WHEREIN THE REPLY OF THE ASSESSEE R EMAND REPORT HAS BEEN REPRODUCED AND SUBMITTED THAT THE SHARE AP PLICANTS WERE NOT HAVING SUFFICIENT INCOME AND THEREFORE, TH EIR CREDITWORTHINESS AND GENUINENESS OF PERSON IS NOT P ROVED. M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 15 OF 24 HENCE, THE A.O. AND CIT (A) WERE JUSTIFIED IN MAKIN G THE ADDITION U/S. 68 OF THE ACT. 12. IN REJOINDER, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT (A) HAS NOT CONSIDERED THE R EMAND REPORT AND NOT PRODUCE THE REPLY OF THE ASSESSEE FI LED BY THE ASSESSEE WHILE PAGE NO. 31 TO 50 SUBMITTED OF PAPER BOOK SUBMITTED BY THE ASSESSEE. FURTHER, ONLY SEVEN PERS ONS HAVE OPEN BANK ACCOUNT WITH AKHANDANAND CO.OP. BANK LTD. OUT OF 22 INVESTORS AND THAT TOO IS MERELY SEVEN ACCOUN T, THERE IS NO LOGIC AS TO WHY BANK IN KATARGAM, VARACHHA AREA AN D THE BANK ACCOUNTS ARE OPEN ONLY BY THE KYC FACILITY BY THE RBI. IT WAS CONTENDED THAT IDENTITY IS PROVED THIS ACCOUNT WOULD BE TAKEN AGAINST THE SHAREHOLDERS NO AGAINST THE ASSES SEE. THE ASSESSEE COMPANY HAS PROVED THE SOURCE OF INVESTOR AND ALL THE INVESTMENT PAID BY ACCOUNT PAYEE CHEQUE. THE LEARNE D COUNSEL PLACING RELIANCE IN THE CASE OF METACHEM INDUSTRIES 245 ITR 0160(MP) AND SAROGI CREDIT CORPORATION VS. CIT [103 ITR 0344] (PATNA) AND LOVELY EXPORTS PVT. LTD. 216 CTR 0195 ( SC) WHEREIN IT WAS HELD THAT IDENTITY OF SHAREHOLDER FO R CREDIT THIS NOT ACCOUNT CAN BE MADE IN THE CASE OF THE ASSESSEE M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 16 OF 24 CONSIDERING IN THE HANDS OF INVESTOR. THE LEARNED C OUNSEL FURTHER CITED THE DECISION IN THE CASE OF CIT VS. S TELLER INVESTMENT LTD. [ 251 ITR 0263 ] (SC) , CIT VS. LOV ELY EXPORTS PVT. LTD. [216 CTR 0195 ] (SC) AND HINDUSTAN INKS & RESINS LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX [ 60 DTR 0018 ] (GUJ) (HC) WHEREIN IT WAS OBSERVED THE LEARNED COUN SEL FURTHER PLACED RELIANCE IN THE CASE OF CIT VS. HIMATSU BIME T LTD. [12 TAXMANN.COM 87] (GUJ)(HC) WHEREIN THE ASSESSEE HAS FILED CONFIRMATION FROM ALL SHARE APPLICANTS, DETAILS OF SHARE, FULL ADDRESS, PAN NO. AND TAX JURISDICTION OF DEPOSITORS - FURTHER, THE TRIBUNAL NOTED THAT ALL THE PAYMENTS WERE RECEI VED BY CHEQUES AND WERE CREDITED IN BANK ACCOUNT OF ASSESS EE; SHARE APPLICATION FORMS CONTAINED ALL DETAILS OF DEPOSITO RS, THEIR CONFIRMATIONS WERE CLEAR WITH ALL ADDRESSES AND THA T THEY WERE ON DEPARTMENTAL RECORDS AS TAXPAYERS. 13. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER, RELIE D ON THE DECISION OF HON`BLE SUPREME COURT HAS DISMISSED THE SLP AGAINST THE ORDER OF DELHI HIGH COURT ORDER IN THE CASE OF PR. CIT V. HI- TECH RESIDENCY PVT. LTD. [2018] 96 TAXMA NN.COM 402 ((DELHI) IN THE CASE OF PR. CIT -4 V. HI-TECH RESID ENCY (P) LTD. REPORTED IN [2018] 96 TAXMANN.COM 403 (SC) OF WHICH HEAD M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 17 OF 24 NOTE READS AS FOLLOWS : SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT (SHARE CAPITAL) - ASSESSMENT YEA R 2009- 10 - SECTION 68 ADDITION WAS MADE IN HANDS OF ASSES SEE ON GROUND THAT ASSESSEE COMPANY WAS NOT ABLE TO PRODUC E ANY OF DIRECTOR, SHAREHOLDERS OR PRINCIPAL OFFICER OF COMPANIES TO WHOM SHARES WERE ALLOTTED AND LENDERS FROM WHOM UNSECURED LOANS WAS TAKEN - HIGH COURT DELETED SAID ADDITION HOLDING THAT ASSESSEE HAD DISCHARGED ITS ONUS OF ESTABLISHING IDENTITY, GENUINENESS AND CREDITWORTHINESS OF BOTH INVESTORS AS WELL AS LENDE RS - WHETHER, ON FACTS, SLP AGAINST SAID ORDER WAS TO BE DISMISSED - HELD, YES [PARAS 4 TO 6] [IN FAVOUR OF ASSESSEE] 14. IN AFORESAID FACTUAL BACKGROUND, TRIBUNAL WAS OF VIEW THAT ASSESSEE HAD SUFFICIENTLY DISCHARGED ITS BURDE N OF EXPLAINING SOURCE OF SHARE APPLICATION MONEY; ACCOR DINGLY, IT DELETED IMPUGNED ADDITION WHETHER ON FACTS, IMPUGNE D ORDER OF TRIBUNAL DID NOT SUFFER FROM ANY LEGAL INFIRMITY SO AS TO WARRANT INTERFERENCE HELD, YES. THEREFORE, IT WAS CONTENDE D THAT THE ORDER OF THE A.O. MAY BE SET ASIDE AND THE ADDITION MAY BE DELETED. M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 18 OF 24 15. WE HAVE CONSIDERED THE FACTS AND HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. WE FIND THAT OUT OF 31 INVESTORS, 27 INVESTORS APPEARE D BEFORE THE A.O. AND THEIR STATEMENT U/S. 131 OF THE ACT HAS BE EN DULY RECORDED BY THE A.O. DURING THE COURSE OF ASSESSMEN T / REMAND PROCEEDINGS. THE REMAINING FOUR INVESTORS COULD NOT ATTENDED AS ONE OF THE INVESTOR HAS DIED AND HIS SON PREOCCU PIED. FURTHER, ONE INVESTOR BEING LADY HAS SHIFTED TO AMR ELI AND ONE INVESTOR ASMITA D. RAJPARA CLAIMED TO HAVE APPEARED BEFORE THE A.O. ON 04.09.2017 WITH HER THREE MONTHS SICK CHILD . HOWEVER, HER STATEMENT COULD NOT BE RECORDED, AS THE A.O. WA S TO BE OCCUPIED WITH SOME OTHER WORK. THUS, FOUR INVESTORS COULD NOT BE ATTENDED BEFORE THE A.O. FOR AFORESAID REASONS. SINCE, 271 INVESTORS HAVE ATTENDED AND FILED COPY OF ACKNOWLED GEMENT OF RETURN OF INCOME, COMPUTATION OF INCOME, BALANCE, T HEIR BANK ACCOUNT, SHARE APPLICATION FORM, THEREFORE, THEIR I DENTITY HAS BEEN DULY ESTABLISHED. THE A.O. HAS ALSO NOT DOUBTE D ON THEIR CREDITWORTHINESS, BUT DOUBTED ON GENUINENESS OF TRA NSACTIONS, WE FIND THAT THE INCOME DISCLOSED BY THE INVESTORS IN THEIR RETURN OF INCOME WAS BETWEEN THE RANGES OF RS.1.52 TO RS.2 LACS. IT IS FURTHER NOTICED THAT ALL THE INVESTMENT BY THE M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 19 OF 24 CONCERNED PARTIES HAS BEEN MADE BY ACCOUNT PAYEE CH EQUE AND THERE IS NO CASH DEPOSIT BEFORE ISSUE OF CHEQUE IN THEIR BANK ACCOUNT. THE ASSESSEE HAS ESTABLISHED THAT IT HAS T AKEN MONEY BY WAY OF ACCOUNT PAYEE CHEQUE FROM THE SHARE APPLI CANT WHO ARE ALL INCOME TAX ASSESSES, WHOSE PAN HAVE BEEN DI SCLOSED AND THE TRANSACTIONS OF INVESTMENT OF SHARE APPLICA TION MONEY HAS BEEN DISCLOSED IN THEIR INCOME-TAX RETURN. THE SE INVESTMENTS HAVE BEEN DULY APPEARED BEFORE THE ASSE SSING OFFICER AND FURNISHED DOCUMENTARY EVIDENCES THEN TH E A.O. IN QUESTION HAS NO JUSTIFICATION TO DISBELIEVE THE TRA NSACTION REFLECTED BY THE SHARE APPLICANT. THEREFORE, WE ARE OF THE VIEW THAT THE A.O. HAS DISPROVED THE ENTIRE SHARE APPLIC ANT, MERELY, ON PRESUMPTION BASIS THAT WE FIND SHARE APPLICATION S ARE FRIENDS AND RELATIVES OF THE ASSESSEE HAVE APPEARED BEFORE THE AO AND THEIR STATEMENT O OATH U/S.131 OF THE ACT WA S RECORDED. IN SOME OF THE CASES, SOURCE OF EXPLANATION BY THE ASSESSEE AS REPLIED FURNISHED DURING THE REMAND PROCEEDINGS. TH EREFORE, IDENTITY OF THE SHARE APPLICANT HAS BEEN ESTABLISHE D THEN THERE IS NO CASE OF THE A.O. THAT THE ASSESSEE HAS FAILED TO PROVE SOURCE OF SUCH INVESTMENT, THE SAME CANNOT BE ADDED IN THE CASE OF THE ASSESSEE AS HELD IN GUJARAT HIGH COURT IN THE CASE M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 20 OF 24 OF HINDUSTAN INKS & RESINS LTD. VS. DCIT WHEREIN IT WAS 7,8 AND 9 AS UNDER : FROM THE CONCURRENT FINDINGS RECORDED BY THE AUTHO RITIES BELOW, IT IS APPARENT THAT NONE OF THE PARTIES HAVE RECORDED ANY FINDINGS TO THE EFFECT THAT THE IDENTITY OF THE DEPOSITORS HAD NOT BEEN ESTABLISHED BY THE ASSESSEE. THE CASE OF THE RESPONDENT IS THAT THE ASSESSEE HAS FAILED TO EXPLA IN THE SOURCE OF SUCH CASH AS WELL AS CREDITWORTHINESS OF THE DEPOSITORS. IT IS NOT THE CASE OF THE REVENUE THAT THE SUBSCRIBERS ARE BOGUS. THE CASE OF THE REVENUE IS T HAT THE SOURCE OF SUCH CASH AS WELL AS CREDITWORTHINESS OF THE DEPOSITORS HAS NOT BEEN EXPLAINED. IN THE CIRCUMSTA NCES, THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THE IND IVIDUAL ASSESSMENTS OF THE DEPOSITORS NAMED BY THE ASSESSEE , HOWEVER, UNDER NO CIRCUMSTANCES, CAN THE AMOUNT OF SHARE CAPITAL BE REGARDED AS THE UNDISCLOSED INCOME OF TH E ASSESSEE. THE TRIBUNAL WAS THEREFORE NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.4,30,760 ON ACCOUNT O F UNEXPLAINED CASH CREDITS IN THE CASE OF THE ASSESSE E.- CIT VS. LOVELY EXPORTS (P) LTD. (2008) , 216 CTR (SC) 1 95: (2008) 6 DTR (SC) 308; CIT VS. STELLER INVESTMENT L TD. (1991) 99 CTR (DEL) 40: (1991) 192 ITR 287 (DEL) AN D CIT VS. STELLER INVESTMENT LTD. (2000) 164 CTR (SC) 287 : (2001) 251 ITR 263 (SC) RELIED ON. 16. WE FURTHER FIND SUPPORT FROM THE ORDER OF HONBLE G UJARAT HIGH COURT IN THE CASE OF CIT VS. HIMATSU BIMET LTD . (SUPRA) WHEREIN IT WAS HELD THAT SIMILARLY, THE HONBLE M.P . HIGH COURT CIT VS. STL EXTRUSION PVT. LTD. [333 ITR 0269] HA S HELD THAT WHERE THE ASSESSEES AGE ADDRESS, DATE OF FILING OF APPLICATION, NUMBER OF SHARE, ARE MADE AS A TABLE THEN THERE ARE NO JUSTIFICATION FOR MAKING THE ADDITION U/S. 68 OF TH E ACT. M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 21 OF 24 SIMILARLY, HONBLE DELHI HIGH COURT CIT VS. KAMDH ENU STEEL & ALLOYS LTD. & ORS. [ 361 ITR 0220 ] (SUPRA) HAS H ELD THAT ONE ADEQUATE MATERIAL IS GIVEN, WHICH IS PRIMA FACIE DI SCHARGE THE BURDEN OF IDENTITY OF THE SHAREHOLDER, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS IN SUCH EVIDENCE I S TO BE DISCARDED IT HAS CREATED EVIDENCE, THE REVENUE IS S UPPORTED TO MAKE THROUGH PROBE BEFORE IT COULD NAIL THE ASSESSE E AND FASTEN THE ASSESSEE WITH SUCH LIABILITY U/S. 68, A .O. FAILED TO CARRY OUT HIS SUSPICION TO LOGICAL CONCLUSION BY FU RTHER INVESTIGATION, ADDITION U/S.68 AND THEREFORE ADDIT ION U/S.68 IS NOT SUSTAINABLE. IN THE PRESENT CASE, THE ASSESSEE HAS FURNISHED ALL THE DOCUMENTARY EVIDENCE IN FORM OF R ETURN, COPY OF CAPITAL ACCOUNT, BANK STATEMENT, CONCERNED IDENT ITY AND INVESTOR EVEN APPEARED IN PERSON BEFORE THE AO, THE REFORE, THE A.O. CANNOT DISCARD THESE EVIDENCES WITHOUT MAKING FURTHER INVESTIGATION TO ESTABLISH THAT IT WAS A CREATED EV IDENCE. IN CASE OF SAROGI CREDIT CORPORATION VS. CIT [ 103 ITR 0344 ] (PATNA) (HC) IT WAS HELD THAT ONCE THE IDENTITY OF THIRD PARTY CREDIT ESTABLISHED BEFORE THE ITO AND THE CREDITORS HAVE PLEDGED THEIR OATH THAT THEY HAVE THE ADVANCED THE AMOUNT I N QUESTION TO THE ASSESSEE, THE BURDEN IMMEDIATELY SHIFTS ON T O THE M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 22 OF 24 DEPARTMENT TO SHOW AS TO WHY THE ASSESSEES CASE CO ULD NOT BE ACCEPTED AND AS TO WHY IT MUST BE HELD THAT THE ENT RY, THOUGH PURPORTING TO BE IN THE NAME OF A THIRD PARTY, STIL L REPRESENTED THE INCOME OF THE ASSESSEE FROM A SUPPRESSED SOURCE S. 17. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V S. D & H ENTERPRISE [2016] [72 TAXMANN.COM 87] HELD ALL RE LEVANT DETAILS CUSTOMERS WHO CAME BOOKING ADVANCE. HE COU LD HAVE PAID TO THE ASSESSEE BUILDER IF SOME OF THEM DID NO T NONGENUINE. SIMILARLY, THE LEARNED COUNSEL CIT VS. ROHINI BUILDERS (SUPRA) OF WHICH SLP HAS ALSO BEEN DISMISS ED IT WAS QUESTION OF LAW WHERE THAT TRIBUNAL HAVING DELETED THE ADDITION U/S. 68 OF THE ACT BY ACCEPTING GENUINENESS OF THE LOAN AND WAS RECEIVED AND REPAID BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUE ESTABLISH THE IDENTITY OF CREDITWORTHINESS, COMPLETE ADDRESS, GIT NO. / PAN, CONFIRMATION ALONG WITH COP Y OF ASSESSMENT ORDER AVAILABLE. 18. FURTHER, THE HON`BLE SUPREME COURT HAS DISMISSED TH E SLP AGAINST THE ORDER OF DELHI HIGH COURT ORDER IN THE CASE OF PR. CIT V. HI- TECH RESIDENCY PVT. LTD. [2018] 96 T AXMANN.COM 402 ((DELHI) IN THE CASE OF PR. CIT -4 V. HI-TECH R ESIDENCY (P) M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 23 OF 24 LTD. REPORTED IN [2018] 96 TAXMANN.COM 403 (SC) OF WHICH HEAD NOTE READS AS FOLLOWS : SECTIO N 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT (SHA RE CAPITAL) - ASSESSMENT YEAR 2009-10 - SECTION 68 ADD ITION WAS MADE IN HANDS OF ASSESSEE ON GROUND THAT ASSESS EE COMPANY WAS NOT ABLE TO PRODUCE ANY OF DIRECTOR, SHAREHOLDERS OR PRINCIPAL OFFICER OF COMPANIES TO W HOM SHARES WERE ALLOTTED AND LENDERS FROM WHOM UNSECURE D LOANS WAS TAKEN - HIGH COURT DELETED SAID ADDITION HOLDING THAT ASSESSEE HAD DISCHARGED ITS ONUS OF ESTABLISHING IDENTITY, GENUINENESS AND CREDITWORTHI NESS OF BOTH INVESTORS AS WELL AS LENDERS - WHETHER, ON FAC TS, SLP AGAINST SAID ORDER WAS TO BE DISMISSED - HELD, YES [PARAS 4 TO 6] [IN FAVOUR OF ASSESSEE] 19. SIMILARLY, IN THE CASE OF ASSESSEE, ALL THE DETAILS HAVE BEEN FURNISHED BY THE ASSESSEE AND TRANSACTION ACCOUNT P AYEE CHEQUE AND INVESTORS HAVE BEEN APPEARED BEFORE THE A.O. AND WHOSE COMPLETE ADDRESS, COPY OF ACKNOWLEDGEMENT OF RETURN AND BALANCE SHEET HAVE BEEN FILED AND THE TRANSACTI ONS REFLECTED IN THE BALANCE SHEET, THEREFORE, THE ADDI TION MADE BY M/S. KAMAL RAYON PVT. LTD. VS ITO, WARD.1((1)(3)/I.T. A. NO. 161/SRT/2018/12-13 PAGE 24 OF 24 THE A.O. IS NOT SUSTAINABLE IN LAW IN THE LIGHT OF ABOVE DOCUMENTARY EVIDENCES AND WHERE THE ASSESSEE HAS PR OVIDED ALL THE DETAILS OF INVESTORS AND WHO HAVE PERSONALL Y APPEARED BEFORE THE A.O. THE ADDITION MADE WAS NOT JUSTIFIED IN LAW. IN THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION OF RS.1,44,15,000/- IS NOT SUSTAINABLE IN LAW AND SAME IS DIRECTED TO BE DELETED. ACCORDINGLY, ALL TH E ABOVE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 21. ORDERED PRONOUNCED IN THE OPEN COURT ON 04.10.2018. SD/- SD/- ( . . /C.M. GARG) ( . . /O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER / SURAT, DATED : 4 TH OCTOBER,2018/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT