ITO, Ward-13(1), Kolkata, Kolkata V. M/s Anand Enterprises Ltd., Howrah

ITA 1614/KOL/2016

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7200 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 11-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Assessee Lawyers: S M SURANA LD
• Keywords: Unexplained cash credit
• Section: 143(3); 133(6); 80G; 131; 2; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & HONBLE S HRI S.S.VISWANETHRA RAVI, JM] I.T.A NO. 1614/KOL/20 16 ASSESSMENT YEAR : 2012-1 3 ITO, WARD-13(1), KOLKATA -VS- M/S ANAND ENTERP RISES LTD. [PAN: AACCA 1175 F] (APPELLANT) (RESPOND ENT) C.O. NO. 56/KOL/2016 (ARISING OUT OF I.T.A NO. 1614/KOL/2017 ) ASSESSMENT YEAR : 2012-1 3 M/S ANAND ENTERPRISES LTD. -VS- ITO, WARD-13(1), KOLKATA [PAN: AACCA 1175 F] (CROSS OBJECTOR) (RE SPONDENT) FOR THE APPELLANT : SHRI G.HANGSHING, CIT DR FOR THE RESPONDENT : SHRI S.M. SURANA, LD. A R DATE OF HEARING : 17.09.2018 DATE OF PRONOUNCEMENT : 26. 09 .2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTI ON BY THE ASSESSEE ARISE OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS)-5, KOLKATA [IN SHORT THE LD CIT(A)] IN APPEAL NO. 29/CIT(A)-5/WD-14(4)/15-16 DA TED 28.06.2016 AGAINST THE ORDER PASSED BY THE ITO, WARD-14(4), KOLKATA [ IN S HORT THE LD AO] UNDER SECTION 2 ITA NO.1614/KOL/2016 & C.O. NO.56/KOL/2016 M/S ANAND ENTERPRISES LTD. A.YR. 2012-13 2 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) DATED 25.03.2015 FOR THE ASSESSMENT YEAR 2012-13. 2. THE ONLY ISSUE TO BE DECIDED IN THE APPEAL OF T HE REVENUE IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF R S. 20,07,60,000/- MADE U/S 68 OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE IS A PUBLIC LIMITED COMPANY ENGAGED IN THE BUSINESS OF TRADING AND INVESTMENT IN SHARES AND SECURITIES AND THE ASSESSEE COMPANY WAS INCORPORATED ON 30.04.1981. THE RETURN OF INCOME FOR ASSESSMENT YEAR 2012-13 WAS FILED BY THE ASSESSEE ON 31.3.2013 DECL ARING TOTAL INCOME OF RS. NIL. THE LD. AO IN PARA 2 OF HIS ASSESSMENT ORDER IN PAGE 1 OBSERVED THAT THE DETAILS CALLED FOR FROM THE ASSESSEE WERE DULY SUBMITTED TOGETHER WITH THE RELEVANT INFORMATION AND DOCUMENTS. THE SAME WERE ALSO SUBJECTED TO CROSS VE RIFICATION U/S 133(6) OF THE ACT AND SUMMONS U/S 131 OF THE ACT WERE ALSO ISSUED WHERE E VER NECESSARY. THE LD. AO OBSERVED THAT DURING THE YEAR THE ASSESSEE COMPANY HAS RAISED CAPITAL BY ISSUE OF SHARES. FROM THE ACCOUNTS OF THE ASSESSEE COMPANY, HE OBSE RVED THAT THE ASSESSEE HAD MADE INVESTMENT OF RS. 20 CRORES APPROXIMATELY IN SHARES DURING THE YEAR. THE PRIMARY FACTS INVOLVED HEREIN ARE THAT THE ASSESSEE COMPANY PURCH ASED SHARES OF ANOTHER COMPANY FROM THE FOLLOWING PARTIES: I) P.S. COMMUNICATION PVT. LTD. II) JHAJHARIA COMPUTER PVT. LTD. III) R.L. LAUNDRY PVT. LTD.(FORMERLY SUNSHINE WASHE RS PVT. LTD.) IV) ARYADEEP SUPPLIERS PVT. LTD. V) PACIFY VINIMAY PVT. LTD. VI) VIRTUAL DEALMARK PVT. LTD. THE ASSESSEE COMPANY DID NOT PAY ANY CASH CONSIDERA TION FOR MAKING THESE INVESTMENTS IN SHARES AND INSTEAD ISSUED SHARES FROM ITS COMPAN Y TO THE AFORESAID SHAREHOLDERS IN 3 ITA NO.1614/KOL/2016 & C.O. NO.56/KOL/2016 M/S ANAND ENTERPRISES LTD. A.YR. 2012-13 3 LIEU OF PURCHASE CONSIDERATION FOR INVESTMENT IN SH ARES. IN OTHER WORDS, THE SHARES WERE ISSUED BY THE ASSESSEE COMPANY TO THE TUNE OF RS. 2 0,07,60,000/- FOR CONSIDERATION OTHER THAN CASH IN LIEU OF MAKING INVESTMENT IN SHARES OF ANOTHER COMPANY. THERE WAS NO RECEIPT OF ANY CASH OR CHEQUE FOR ISSUE OF SHARE CA PITAL BY THE ASSESSEE. THE ASSESSEE PLEADED THAT THERE WAS NO SUM CREDITED IN ITS BOOKS OF ACCOUNTS TOWARDS SHARE CAPITAL. SINCE NO MONEY WAS RECEIVED BY IT TOWARDS THE SAME AND ACCORDINGLY PLEADED THAT PROVISIONS OF SECTION 68 OF THE ACT CANNOT BE MADE APPLICABLE TO IT. THE LD. AO IGNORED THE CONTENTIONS OF THE ASSESSEE AND PROCEEDED TO TR EAT THE ENTIRE RECEIPT OF SHARE CAPITAL AND SHARE PREMIUM AS INGENUINE BY HOLDING THE SHARE HOLDERS DID NOT HAVE SUFFICIENT CREDITWORTHINESS TO MAKE INVESTMENT IN SHARE CAPITA L BY THE ASSESSEE. THE LD. AO HOWEVER OBSERVED IN HIS ORDER THAT THERE WAS NO REC EIPT OF CASH CONSIDERATION OF SHARE CAPITAL AND THE TRANSACTION HAD HAPPENED FOR THE SA ME ONLY THROUGH BOOK ENTRIES. ACCORDINGLY, THE LD. AO OBSERVED THAT THE ASSESSEE HAD ACTUALLY INTRODUCED UNACCOUNTED MONEY IN ITS COMPANY THROUGH ISSUE OF BOGUS SHARES TO VARIOUS SHAREHOLDERS. HE OBSERVED THAT THE ENTIRE SET OF TRANSACTIONS ENTERE D INTO BY THE ASSESSEE SHAREHOLDER, THE ASSESSEE OR COMPANY IN WHICH THE ASSESSEE HAS INVES TED, AS A PRE-DESIGNED SET OF TRANSACTIONS EXECUTED TO INTRODUCE UNACCOUNTED MONE Y IN THE GARB OF SHARE CAPITAL AND SHARE PREMIUM. HE HELD THAT THE THREE NECESSARY ING REDIENTS OF SECTION 68 OF THE ACT VIZ. IDENTITY OF SHAREHOLDER; CREDITWORTHINESS OF T HE SHAREHOLDER AND GENUINENESS OF THE TRANSACTIONS ARE NOT PROVED IN THE INSTANT CASE. AC CORDINGLY, AN ADDITION OF RS. 20,07,60,000/- MADE U/S 68 OF THE ACT IN THE ASSESS MENT. THIS WAS DELETED BY THE LD. CIT(A). AGGRIEVED THE REVENUE IS IN APPEAL BEFORE U S. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. AT THE OUTS ET, WE FIND THAT THE ASSESSEE HAD NOT RAISED ANY SHARE CAPITAL BY RECEIPT OF CASH CONSIDE RATION IN THE INSTANT CASE. THE SHARES WERE ISSUED FOR CONSIDERATION OTHER THAN CASH IN LI EU OF ASSESSEE COMPANY MAKING INVESTMENT IN SHARES IN SOME OTHER COMPANY. EFFECTI VELY, THE ASSESSEE PURCHASED CERTAIN SHARES FROM THE AFORESAID SIX SHAREHOLDERS AND INST EAD OF PAYING CASH TO THEM, THE 4 ITA NO.1614/KOL/2016 & C.O. NO.56/KOL/2016 M/S ANAND ENTERPRISES LTD. A.YR. 2012-13 4 ASSESSEE COMPANY ISSUED SHARES IN ITS OWN COMPANY T O THOSE SHAREHOLDERS. HENCE THE ASSESSEE HAD MADE INVESTMENTS IN SHARES OF ANOTHER COMPANY FOR WHICH CONSIDERATION WAS SETTLED THROUGH ISSUANCE OF ITS SHARES TO THOSE SHAREHOLDERS. NOW THE CRUCIAL POINT IS WHETHER THE PROVISIONS OF SECTION 68 COULD BE INVOK ED IN THE INSTANT CASE FOR MAKING INVESTMENT TOWARDS SHARE CAPITAL. THERE WAS NO REC EIPT OF ANY SUM AS PROVIDED U/S 68 OF THE ACT IN THE INSTANT CASE. IT WOULD BE PERTINE NT HERE TO REFER TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SHRI H.H. RAMA VARMA VS. CIT REPORTED IN 187 ITR 308 (SC) WHEREIN IT WAS HELD THAT ANY SUM MEA NS SUM OF MONEY. WE FIND THAT LD. CIT(A) HAD DELETED THE ADDITION BY OBSERVING AS UNDER: 6. ON CONSIDERATION OF THE ARS SUBMISSION, ESPECI ALLY THE PORTION REPRODUCED ABOVE, IT IS SEEN THAT SECTION 68 OF I.T. ACT, 1961 DOES NOT APPLY TO CASES OF PURCHASE OF SHARE ASSETS AND ALLOTMENT OF SHARES BY THE APPELLANT WHE N PURCHASE AND ALLOTMENT ARE UNDER A BARTER SYSTEM. THE AO HAS NOT REFUTED THE APPELLA NTS CLAIM THAT SHARES WERE ALLOTTED IN EXCHANGE FOR ACQUISITION OF SHARES BY THE APPELL ANT FROM THE COMPANIES WHICH SURRENDERED SUCH SHARES TO THE APPELLANT. THOUGH AS PER THE AO TO APPLY SECTION 68 TO MAKE THE SAID ADDITION IN THE APPELLANTS HAND. TRA NSACTIONS PURPORTEDLY EXECUTED BY ENTRY OPERATORS INVOLVE MULTIPLE LAYERS AND OTHER C OMPLEXITIES, INTRODUCING DELAYS IN INTRODUCTION OF UNACCOUNTED CASH/MONEY AND MULTIPLE PLAYERS BEING INCORPORATED ENTITIES. MEASURES TAKEN BY THE AO IN THE COURSE OF THE ASSESSMENT PROCEEDING FALLS MUCH SHORT OF WHAT IS REQUIRED TO BE DONE IN SUCH C ASE LAWS, WHICH HAVE EVOLVED ON THIS ISSUE, CALL FOR CONCERTED ACTIONS ON THE PART OF TH E AO PINPOINTING UTILIZATION OF UNEXPLAINED/UNACCOUNTED/UNTAXED MONEY AND THE PLAYE RS AND THE BENEFICIARIES EFFECTIVELY USING THE WEBLIKE SCHEME TO PLUNDER BLA CK MONEY. FOR EXAMPLE INTRODUCTION AND USE OF BLACK MONEY IN THE PRESENT CASE MAY BE A T A DIFFERENT POINT OF TIME AND IN DIFFERENT HANDS. THE AOS ACTION IN THE PRESENT CAS E CANNOT BE UPHELD IN LAW. I, THEREFORE, DELETE THE ADDITIONS AND GROUNDS OF APPE AL NOS. 3 & 4 ARE ALLOWED. 4.1. WE FIND THAT THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. SOHANLAL SINGHANIA REPORTED IN 235 ITR 616 (ALL) HAD HELD IN THE CONTEXT OF ALLOWABILITY OF DONATION AS DEDUCTION U/S 80G OF THE ACT THAT THE E XPRESSION ANY SUM PAID USED IN THE SAID SECTION DENOTES SUM OF MONEY PAID . HENCE I F CERTAIN SHARES WERE DONATED BY A PERSON, THEN THE SAME WOULD NOT FALL ELIGIBLE FOR D EDUCTION U/S 80G OF THE ACT. WE ALSO FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JATIA INVESTMENT COMPANY 5 ITA NO.1614/KOL/2016 & C.O. NO.56/KOL/2016 M/S ANAND ENTERPRISES LTD. A.YR. 2012-13 5 (CO.) VS. CIT REPORTED IN 206 ITR 718 (CAL) ALSO SU PPORTS THE CASE OF THE ASSESSEE HEREIN, WHEREIN IT WAS HELD AS UNDER: IT IS FINALLY EMPHASISED BY LEARNED COUNSEL FOR TH E ASSESSEE THAT THE ULTIMATE RESULT IS THAT THE FIRM BECOMES A DEBTOR TO GB AND CO. AND TH E THREE NON-FINANCIAL COMPANIES OF THE GROUP GOT DISCHARGED. LEARNED COUNSEL ALSO EMPH ASISED THAT, AT THE WORST, IT CAN BE SAID THAT THE ASSESSEE-FIRM HAS RECEIVED VALUABLE A SSETS BEING THE SAID SHARES OF THE EQUIVALENT VALUE OF THE DEBT TAKEN OVER BY IT FROM THE COMPANIES, I.E., RS. 11.20 LAKHS. THEREFORE, THE QUESTION OF CASH CREDIT DOES NOT COM E IN, THERE BEING NO ACTUAL PASSING OR RECEIPT OF CASH. IN OTHER WORDS, THE TRANSACTION S ARE MERE BOOK ENTRIES. IT WAS CONTENDED THAT THE FACT THAT THE ENTRIES PASSED THR OUGH THE CASH BOOK COULD NOT DETRACT FROM OR EFFACE THE ESSENTIAL NATURE OF THE ENTRIES. IT WAS ALSO URGED THAT THE ENTRIES WERE PASSED THROUGH THE CASH BOOK SO THAT THE REPAYMENT OF LOANS BY THE SAID THREE COMPANIES COULD BE ESTABLISHED BEFORE THE RESERVE B ANK OF INDIA. BUT, ACCORDING TO SHRI BAJORIA, THAT DOES NOT MEAN THAT IT AMOUNTS TO AN ARTIFICE EMPLOYED TO DECEIVE ANY AUTHORITIES, BECAUSE THE TRANSACTIONS SHOWING THE A MOUNT AS RECEIVED IN CASH AND PAID AWAY SPONTANEOUSLY AND SIMULTANEOUSLY WERE NOT ACTU AL BUT ONLY NOTIONAL. HE, HOWEVER, STATED THAT, AS FAR AS THE QUESTION OF SEC TION 68 IS CONCERNED, THE NATURE OF THE TRANSACTIONS AND THE ENTRIES CLEARLY SHOW THAT NO C ASH, IN FACT, FLOWED. IT WAS FURTHER STRESSED THAT THE TRANSACTIONS ARE ABOVE BOARD. NO OUTSIDER IS INVOLVED. THE ENTRIES WERE MADE IN THE BOOKS OF THE CONCERNS OF THE SAME GROUP. THE SHARES IN QUESTION WERE ALSO OF THE COMPANIES OF THE GROUP. THERE WAS NO AT TEMPT AT HIDING THE TRANSACTIONS. NOR IS IT THE CASE OF ANY OF THE PARTIES TO THE TRA NSACTION THAT THERE WAS ANY PASSING OF CASH. EVERY PARTY UNEQUIVOCALLY STATED THAT THE TRA NSACTIONS WERE CARRIED INTO EFFECT MERELY BY WAY OF ADJUSTMENTS OF THE SAID LOANS AND THE SHARE TRANSFERS. SHRI A. C. MOITRA, THE LEARNED ADVOCATE FOR THE REV ENUE, REITERATED THE GROUNDS ON WHICH THE TRIBUNAL HAS AFFIRMED THE ADDITION OF THE AMOUNT OF RS. 11.20 LAKHS AS UNEXPLAINED CASH CREDIT. HE PARTICULARLY EMPHASISED THAT THE ASSESSEE'S CONTENTION THAT THE ENTRIES ARE ONLY ADJUSTMENT ENTRIES IS NOT ACCE PTABLE, BECAUSE THE ADJUSTMENT ENTRIES ARE NOT MADE THROUGH THE CASH BOOK. IT IS AN ACCEPT ED PRINCIPLE OF ACCOUNTING THAT BOOK ADJUSTMENTS AND THE ENTRIES IN EFFECTING THEM ARE M ADE BY JOURNAL ENTRIES AND NOT CASH ENTRIES. HE URGED THAT THE PURPORTED MOTIVE OF THE ENTRIES BEING THE REDUCTION OF LOANS OF THE THREE LIMITED COMPANIES DOES NOT EXPLAIN THE WH OLE MATTER, BECAUSE THE ENTRIES ARE CASH ENTRIES. THE FACT REMAINS THAT, AT EVERY STAGE , THE PARTIES SHOWED THE PAYMENTS AND RECEIPTS OF CASH EVEN WHEN THERE WAS NO CASH AVAILA BLE FOR SUCH ENTRIES. THIS QUITE JUSTIFIES THE ADDITION AS SUSTAINED BY THE TRIBUNAL . WE HAVE PERUSED THE ASSESSMENT ORDER CAREFULLY. WE FIND THAT CASH DID NOT PASS AT ANY STAGE THOUGH ENTRIES WERE MADE IN THE CASH BOOK SHO WING PAYMENTS AND RECEIPTS ; BUT SINCE THE ENTRIES MADE A COMPLETE ROUND, NO PASSING OF CASH WAS NECESSARY FOR THE PURPOSE OF MAKING THE ENTRIES. THAT THERE WAS NO PA SSING OF CASH IS ALSO ADMITTED BY THE INCOME- TAX OFFICER HIMSELF. WE HAVE ALREADY EXTRAC TED THE OBSERVATION OF THE INCOME- TAX OFFICER IN PARAGRAPH 14 OF HIS ASSESSMENT ORDER . THE INCOME- TAX OFFICER HAS 6 ITA NO.1614/KOL/2016 & C.O. NO.56/KOL/2016 M/S ANAND ENTERPRISES LTD. A.YR. 2012-13 6 CLEARLY OPINED THAT ALL THE RESPECTIVE PARTIES DID NOT RECEIVE CASH NOR DID PAY CASH AS NONE HAD ANY CASH FOR THE PURPOSE. THE ONLY POINT I N THE ASSESSMENT ORDER IS THAT THE ENTRIES NOT INVOLVING THE PASSING OF CASH SHOULD NO T HAVE FOUND A PLACE IN THE CASH BOOK, BUT IN THE LEDGER ACCOUNT THROUGH JOURNAL ENT RIES. THERE IS ANOTHER SELF- CONTRADICTION IN THE INCOME-TAX OFFICER'S FINDING T HAT, IF THERE WAS NO REAL CASH ENTRY ON THE CREDIT SIDE OF THE CASH BOOK, BUT MERELY A NOTI ONAL OR FICTITIOUS CASH ENTRY, AS ADMITTED BY HIM, THERE IS NO REAL CREDIT OF CASH TO ITS CASH BOOK ; THE QUESTION OF INCLUSION OF THE AMOUNT OF THE ENTRY AS UNEXPLAINED CASH CREDIT CANNOT ARISE. ONE OF THE GROUNDS OF THE TRIBUNAL FOR DISBELIEVING THE ASSESSEE'S CASE IS THAT THE ADJUSTMENT ENTRIES WERE MADE BY NOTIONAL CASH ENTRI ES WITH A VIEW TO BRINGING DOWN THE DEBT-AND-CAPITAL RATIO, I.E., THAT WHILE BEING DISC HARGED OF THE DEBT THE SAID COMPANIES ALSO JETTISONED THEIR ASSETS, I.E., THE SHARES HELD BY THEM OF EQUIVALENT SUM WITHOUT ACHIEVING THE AVOWED PURPOSE. HERE THE TRIBUNAL CER TAINLY MISDIRECTED ITSELF. THE RATIO TO BE REDUCED IS OF THE LOAN IN RELATION TO THE SHA RE CAPITAL AND THE RESERVES. JETTISONING THE SHARES HAD THE DESIRED EFFECT OF REDUCING THE B ORROWED CAPITAL. AGAIN, AS REGARDS THE TRIBUNAL'S REFUSAL TO TAKE NO TICE OF THE DIRECTIONS OF THE RESERVE BANK, IT IS NOT CORRECT FOR THE TRIBUNAL TO HOLD TH AT THE SAID DOCUMENT WAS A NEW EVIDENCE IN THE TRUE SENSE OF THE TERM. THE ASSESSE E HAS BEEN CONSISTENTLY PLEADING BEFORE THE LOWER AUTHORITIES THAT THE ENTRIES HAD T O BE MADE IN ORDER TO BRING THE COMPANIES IN CONFORMITY WITH THE SAID DIRECTION. MO REOVER, THE DIRECTION OF THE RESERVE BANK IS A PUBLIC DOCUMENT WITHIN THE MEANING OF SEC TION 74 OF THE EVIDENCE ACT, 1872. DOCUMENTS OF A PUBLIC NATURE AND PUBLIC AUTHORITY A RE GENERALLY ADMISSIBLE IN EVIDENCE SUBJECT TO THE MODE OF PROVING THEM AS LAID DOWN IN SECTIONS 76 AND 78 OF THE EVIDENCE ACT. IN OUR VIEW, THE EFFECT AND IMPORT OF THE TRANSACTI ONS IS THAT THE ASSESSEE TOOK OVER THE LIABILITY OF THE AFORESAID NON-FINANCIAL COMPANIES TO GB AND CO. IN EXCHANGE FOR THE SHARES AS AFORESAID. IN THE PREMISES, WE ANSWER ALL THE QUESTIONS, IN TH E AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 4.2. IT WOULD BE PERTINENT TO NOTE THAT IN THE INS TANT CASE, THE LD. AO HAD NOT DOUBTED THE INVESTMENT MADE IN SHARES BY THE ASSESSEE COMPANY. THERE IS NO DISPUTE RAISED BY THE LD. AO WITH REGARD TO NUMBER OF SHARES; VALUE THERE ON INVESTED BY THE ASSESSEE COMPANY. WE ALSO FIND THAT THE CO-ORDINATE BENCH DE CISION OF PUNE TRIBUNAL IN THE CASE OF KANTILAL AND BROS. VS. ACIT REPORTED IN 52 ITD 4 12 (PUNE TRIB.) ALSO SUPPORTS THE CASE OF THE ASSESSEE. 7 ITA NO.1614/KOL/2016 & C.O. NO.56/KOL/2016 M/S ANAND ENTERPRISES LTD. A.YR. 2012-13 7 4.3. IN VIEW OF THE AFORESAID OBSERVATIONS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRECE DENTS RELIED UPON HEREINABOVE, WE HOLD THAT THE LD. AO HAD ERRONEOUSLY INVOKED THE PR OVISIONS OF SECTION 68 OF THE ACT TO THE FACTS OF THE INSTANT CASE, WHICH, IN OUR CONSID ERED OPINION, ARE NOT AT ALL APPLICABLE HEREIN. THIS IS A SIMPLE CASE OF ACQUIRING SHARES O F CERTAIN COMPANIES FROM CERTAIN SHAREHOLDERS WITHOUT PAYING ANY CASH CONSIDERATION AND INSTEAD THE CONSIDERATION WAS SETTLED THROUGH ISSUANCE OF SHARES TO THE RESPECTIV E PARTIES. MOREOVER, IN THE BALANCE SHEET OF THE ASSESSEE COMPANY IN THE SCHEDULE TO SH ARE CAPITAL, IT IS VERY CLEARLY MENTIONED BY WAY OF NOTE THAT THE FRESH SHARE CAPIT AL WAS RAISED DURING THE YEAR FOR CONSIDERATION OTHER THAN CASH. HENCE WE HOLD THAT P ROVISION OF SECTION 68 OF THE ACT ARE NOT APPLICABLE IN THE INSTANT CASE AND ACCORDINGLY THE ENTIRE ADDITION DESERVES TO BE DELETED WHICH HAS RIGHTLY BEEN DONE BY THE LD. CIT( A) WHICH DOES NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE RE VENUE ARE DISMISSED. 5. THE CROSS OBJECTION FILED BY THE ASSESSEE IS ONL Y SUPPORTIVE OF THE ORDER OF LD. CIT(A) AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 26.09.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [ M.BAL AGANESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 26.09.2018 SB, SR. PS 8 ITA NO.1614/KOL/2016 & C.O. NO.56/KOL/2016 M/S ANAND ENTERPRISES LTD. A.YR. 2012-13 8 COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-13(1), KOLKATA, 3 RD FLOOR, 110, SHANTIPALLY AAYAKAR BHAWAN (POORVA), KOLKATA-700107. 2. M/S ANAND ENTERPRISES LTD., LP 80/5/1, GROUND FL OOR, SHOP NO. 2, 19, ABHOY GUHA ROAD, LILUAH, HOWRAH-711204. 3..C.I.T.(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S