Tradelink Carrying Pvt. Ltd., Kolkata V. I.T.O.,Ward-4(1), Kolkata

ITA 1636/KOL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0678 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 08-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANNA JCIT LD
• Assessee Lawyers: M D SHAH LD
• Keywords: Unexplained cash credit; Unexplained investment; Question of law; Assessment record; Onus to prove; Set aside
• Section: 271(1)(c); 143(3); 133(6); 195; 264; 113; 13; 131; 68; 69

Judgement Text

1 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD IN THE INCOME TAX APPELLATE TRIBUNAL C-SMCBENCH: KOLKATA [BEFORE SHRI A.T. VARKERY, AM ] I.TA NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING PVT. LTD PAN: AABCT0283A VS. I.T.O., WARD 4(1), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 25-11-2019 DATE OF PRONOUNCEMENT 20.12.2019 FOR THE APPELLANT SHRI M.D. SHAH, ADVOCATE, LD. AR FOR THE RESPONDENT SHRI JAYANTA KHANNA, JCIT, LD.DR ORDER THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF LD. CIT (APPEALS) , 2, KOLKATA DATED 24-06-2019 FOR THE A SSESSMENT YEAR 2013-14. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 5.60,000/- MADE ON A CCOUNT OF UNEXPLAINED CASH CREDIT IN THE BOOKS OF ACCOUNT OF ASSESSEE BEING SHARE APP LICATION MONEY U/S. 68 OF THE INCOME-TAX ACT, 1961 ( IN SHORT, THE ACT HEREINAF TER). 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY FILED ITS E- RETURN FOR THE ASSESSMENT YEAR 2013-14 ON 16-09-2013 DECLARING TOT AL INCOME OF RS. 1,17,810/-. THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY THRO UGH CASS. THE AO NOTES THAT THE ASSESSEE COMPANY IS A NBFC (NON-BANKING FINANCE C OMPANY) ENGAGED IN THE BUSINESS OF TRADING AND INVESTMENTS DURING THE ASSE SSMENT YEAR UNDER CONSIDERATION. THE AO NOTED THAT THE ASSESSEE COMPANY HAS RECEIVED SHARE APPLICATION MONEY TO THE TUNE OF RS.5,60,000/- IN CASH FROM THE FOLLOWING PE RSONS:- 2 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD NAME OF THE PERSON SHARE APPLICATION MONEY BERISAL SINGH 11/04/2012- RS.20,000/- 17/05/2012 - RS.20,000/- 22/06/2012- RS. 20,000/- DASRATHI BISWAL 30/05/2012 - RS.20,000/- 12/02/2013- RS. 20,000/- GAYATRI DEVI PALODE 18/04/2012 - RS.20,000/- 22/06/2012 - RS.20,000/- 16/01/2013 - RS.20,000/- INDU DEVI DADHICH 05/04/2012 - RS.20,000/- 15/06/2012 - RS.20,000/- 12/02/2013 - RS.20,000/- 20/03/2013 - RS.20,000/- MAHAVIR PRASAD PALODE 25/04/2012 - RS.20,000/- 24/05/2012 - RS.20,000/- 10/01/2013 - RS.20,000/- PARMESHWAR LAL TIWARI 25/04/2012 - RS.20,000/- 30/05/2012- RS.20,000/- 10/10/2012- RS. 20,000/- 24/12/2012- RS.20,000/- RAM KUMAR SHARMA 17/07/2012- RS.20,000/- 20/11/2012- RS.20,000/- 18/01/2013- RS.20,000/- SITAM RAM SHARMA 16/05/2012 - RS.20,000/- 12/09/2012 - RS.20,000/- 22/01/2013- RS.20,000/- TIKAM CHAND SHARMA 20/07/2012- RS.20,000/- 13/09/2012 - RS.20,000/- 20/02/2013- RS.20,000/- TOTAL RS.5,60,000/- 4. ACCORDING TO THE AO SINCE ALL THE PAYMENT S WERE MADE IN CASH, HE ISSUED NOTICES U/S. 133(6) OF THE ACT TO ALL THE PARTIES/P ERSONS. THE AO ACKNOWLEDGES THAT PURSUANT TO THE NOTICE ISSUED U/S. 133(6) OF THE AC T, ALL THE SHARE APPLICANTS FILED THE FOLLOWING EVIDENCES:- A. BALANCE SHEET B. ITR ACKNOWLEDGEMENT FOR THE A.Y 2013-14 C. BANK STATEMENTS 5. HOWEVER, ACCORDING TO THE AO THE SHARE SUBSCRIBE RS FAILED TO EXPLAIN SOURCES OF CASH PAYMENTS. SO, HE ADDED BACK THE ENTIRE AMOU NT OF SHARE CAPITAL AND PREMIUM TO THE TUNE OF RS.5,60,000/-. AGGRIEVED, THE ASSES SEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO CONFIRMED THE SAME. THE ASSESSEE BEFORE THE LD. CIT(A) HAD BROUGHT TO 3 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD THE NOTICE OF THE LD. CIT(A) THAT THE PERSONS ARE I NDIVIDUALS AND THAT THEY HAVE FILED THE FOLLOWING DETAILS:- A. PAN NUMBER(S) B. ITR ACKNOWLEDGEMENTS C. ACCOUNTS STATEMENTS OF THE SHARE APPLICANTS D. SHARE APPLICATION FORMS E. COPY OF BANK ACCOUNTS OF THE SHARE APPLICANTS F. BALANCE SHEET 6. IT WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT ALL THE SHARE APPLICANTS WERE CREDITWORTHY FOR MAKING THE PAYMENTS, WHICH ARE SMA LL AMOUNTS (RS. 20,000/- ) GIVEN ON DIFFERENT DATES AND IN ANY CASE TOTAL AMOUNT IS NOT MORE THAN RS. 80,000/-. HOWEVER, THE LD. CIT(A) REITERATED THE STAND OF TH E AO THAT THE SHARE SUBSCRIBERS FAILED TO EXPLAIN THE SOURCE OF CASH PAYMENTS AND E VIDENCE WAS NOT PROVIDED ABOUT THE AVAILABILITY OF CASH ON THE DIFFERENT DATES WHILE MAKING THE PAYMENT. APPLYING THE TEST OF HUMAN PROBABILITIES, HE HELD THAT DEPOSIT F OR SHARE APPLICATION MONEY BY THE SHARE SUBSCRIPTIONS ARE NOT GENUINE AND WAS PLEASED TO DISMISS THE APPEAL OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS BEFORE US. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E RECORDS. WE NOTE THAT ASSESSEE COMPANY WAS INCORPORATED ON 20-01-1986. THE COMPANY HAD A PAID UP CAPITAL REPRESENTED BY 8,60,880 SHARES OF RS. 10/- EACH TOT ALLING RS. 86,08,800/- AS ON 31-03- 2013 AND A FREE RESERVE AND SURPLUS OF RS. 4,25,38, 633/- AS ON 31-03-2013. IN THE A.Y UNDER CONSIDERATION, THE ASSESSEE HAD COLLECTED AN AMOUNT OF RS.5,60,000/- FROM 9 (NINE) INDIVIDUALS NAMED IN THE GIVEN CHART (SUPRA) . WE NOTE THAT THE AO HAD ISSUED 133(6) NOTICES TO ALL THE NINE PARTIES. THE AO ACKN OWLEDGES THAT IN COMPLIANCE OF NOTICE ISSUED U/S. 133(6) ALL THE SHARE APPLICANTS FILED EVIDENCES IN THE FORM OF : A. BALANCE SHEETS B. ITR ACKNOWLEDGEMENTS FOR THE A.Y 2013-14 C. BANK STATEMENTS. 8. ACCORDING TO THE AO SINCE THE ASSESSEE DID NOT F ILE ANY EVIDENCE REGARDING SOURCE OF CASH DEPOSITS, HE MADE AN ADDITION OF RS. 5,60,000/- . BEFORE THE LD. CIT(A) THE ASSESSEE HAD FILED THE FOLLOWING ADDITIONAL DOC UMENTS :- 4 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD I. ACCOUNT STATEMENTS OF THE SHARE APPLICANTS II. SHARE APPLICATION FORMS III. COPY OF BANK ACCOUNT OF THE SHARE APPLICANTS IV. COPY OF LEDGER ACCOUNT OF THE SHARE APPLICANTS . 9. HOWEVER, LD. CIT(A) WITHOUT LOOKING INTO THE BA LANCE SHEETS FILED BY THEM, WHICH SHOWS THAT SHARE SUBSCRIBERS WERE CREDITWORTH Y STILL DID NOT ACCEPT THE GENUINENESS OF THE TRANSACTION. WE NOTE THAT BEFOR E THE LD. CIT(A) THE ASSESSEE HAD BROUGHT TO THE NOTICE THE FOLLOWING DETAILED FACTS ABOUT EACH OF THE SHARE SUBSCRIBERS, WHICH ARE DISCUSSED BELOW:- A) BERISAL SINGH: THIS INDIVIDUAL MADE SHARE APPLIC ATION FOR RS.60,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MADE B Y CASH. THIS INDIVIDUAL HAS DULY FILED HIS RETURN OF INCOME BEFORE ITO WARD 45(3), KOLKATA AND WAS HAVING PAN ALJPS0552K. THIS INDIVIDUAL WAS HAVING A CAPITAL OF RS.8,76,455/- AS ON 31/03/2013 AND RS.7,53,689/- AS ON 31/03/2012 RESPECTIVELY. THE COPY OF THE ACCOUNT STATEMENT END ED 31/03/2013 AND 31/03/2012 WERE MADE AVAILABLE IN THE PAPER BOOK. T HE COPY OF THE LEDGER ACCOUNT WAS ALSO MADE AVAILABLE IN THE PAPER BOOK. THE COPY OF THE IT ACKNOWLEDGEMENT FOR THE ASST. YEAR ENDED 31/03/2012 IS AVAILABLE IN THE PAPER BOOK. THE COPIES OF THE SHARE APPLICATION FORMS ARE ALSO AVAILABLE IN THE PAPER BOOK. ALL THE RELEVANT DOCUMENTS FOR THIS INDIVIDUA L ARE AVAILABLE ON PAGES 67- 74 OF THE PAPER BOOK. (B) DASRATHI BISWAL: THIS INDIVIDUAL MADE SHARE APP LICATION FOR RS.40,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MA DE BY CASH. THIS INDIVIDUAL HAS DULY FILED HIS RETURN OF INCOME BEFO RE ITO WARD 34(3), KOLKATA AND WAS HAVING PAN AGTPD0418Q. THIS INDIVIDUAL WAS HAVING A CAPITAL OF RS. 11,90,273/- AS ON 31/03/2013 AND RS.10,56,355/- AS ON 31/03/2012 RESPECTIVELY. THE COPY OF THE ACCOUNT STATEMENTS FO R THE YEAR ENDED 31/03/2013 AND 31/03/2012 WAS MADE AVAILABLE IN THE PAPER BOO K. THE COPY OF THE LEDGER ACCOUNT ALSO MADE AVAILABLE IN THE PAPER BOOK. THE COPY OF THE IT ACKNOWLEDGEMENT FOR THE ASST. YEAR ENDED 31/03/2012 IS AVAILABLE IN THE PAPER 5 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD BOOK. THE COPIES OF THE SHARE APPLICATION FORMS ARE ALSO AVAILABLE IN THE PAPER BOOK. ALL THE RELEVANT DOCUMENTS FOR THIS INDIVIDUA L ARE AVAILABLE ON PAGES 75- 81 OF THE PAPER BOOK. (C) GAYATRI DEVI PALODE: THIS INDIVIDUAL MADE SHARE APPLICATION FOR RS.60,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MADE BY CASH. THIS INDIVIDUAL HAS DULY FILED HER RETURN OF INCOME BEF ORE ITO WARD 34(4), KOLKATA AND WAS HAVING PAN AEVPP59298. THIS INDIVIDUAL WAS HAVING A CAPITAL OF RS.11,,77,335/- AS ON 31/03/2013 AND RS. 10,46,365/ - AS ON 31/03/2012 RESPECTIVELY. THE COPY OF THE ACCOUNT STATEMENTS JA R THE YEAR ENDED 31/03/2013 AND 31/03/2012 WAS MADE AVAILABLE IN THE PAPER BOO K. THE COPY OF THE LEDGER ACCOUNT ALSO MADE AVAILABLE IN THE PAPER BOOK. THE COPY OF THE IT ACKNOWLEDGEMENT FOR THE ASST YEAR ENDED 31/03/2012 IS AVAILABLE IN THE PAPER BOOK. THE COPIES OF THE SHARE APPLICATION FORMS ARE ALSO AVAILABLE IN THE PAPER BOOK. ALL THE RELEVANT DOCUMENTS FOR THIS INDIVIDUA L ARE AVAILABLE ON PAGES 82- 88 OF THE PAPER BOOK. (D) INDU DEVI DADHICH: THIS INDIVIDUAL MADE SHARE A PPLICATION FOR RS.80,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MADE BY CASH. THIS INDIVIDUAL HAS DULY FILED HER RETURN OF INCOME BEF ORE ITO WARD 35(2), KOLKOTA AND WAS HAVING PAN ADTPD4922C. THIS INDIVIDUAL WAS HAVING A CAPITAL OF RS,12J19,075/- AS ON 31/03/2013 AND RS. 10,93,115/- AS ON 31/03/2012 RESPECTIVELY. THE COPY OF THE ACCOUNT STATEMENTS FO R THE YEAR ENDED 31/03/2013 AND 31/03/2012 WAS MADE AVAILABLE IN THE PAPER BOO K. THE COPY OF THE LEDGER ACCOUNT ALSO MADE AVAILABLE IN THE PAPER BOOK. THE COPY OF THE IT ACKNOWLEDGEMENT FOR THE ASST. YEAR ENDED 31/03/201 2 IS AVAILABLE IN THE PAPER BOOK. THE COPIES OF THE SHARE APPLICATION FOR MS ARE ALSO AVAILABLE IN THE PAPER BOOK. ALL THE RELEVANT DOCUMENTS FOR THIS IND IVIDUAL ARE AVAILABLE ON PAGES 89-97 OF THE PAPER BOOK. (E) MAHABIR PRASAD PALODE: THIS INDIVIDUAL MADE SHA RE APPLICATION FOR RS.60,000/- IN THE APPELLANT COMPANY. THE WAS MADE BY CASH. THIS INDIVIDUAL 6 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD HAS DULY FILED HIS RETURN OF INCOME BEFORE ITO WARD 44(4). KOLKATA AND WAS HAVING PAN AFVPP5929B. THIS INDIVIDUAL WAS HAVING A CAPITAL OF RS.7,91,862/- AS ON 31/03/2013 AND RS.6,84,902/- AS ON 31/03/2012 RESPECTIVELY. THE COPY OF THE ACCOUNT STATEMENTS FO R THE YEAR ENDED 31/03/2013 AND 31/03/2012 WAS MADE AVAILABLE IN THE PAPER BO OK THE COPY OF THE LEDGER ACCOUNT ALSO MADE AVAILABLE IN THE PAPER BOOK. THE COPY OF THE IT ACKNOWLEDGEMENT FOR THE ASST YEARS ENDED 31/03/2012 AND 31/03/2012 WAS MADE AVAILABLE IN THE PAPER BOOK. THE COPIES OF THE SHARE APPLICATION FORMS ARE ALSO AVAILABLE IN THE PAPER BOOK. ALL THE RELEVANT DOCUMENTS FOR THIS COMPANY ARE AVAILABLE ON PAGES 98-105 OF THE PAPER BOOK. (F) PARMESHWAR LAL TIWATI: THIS INDIVIDUAL MADE SHA RE APPLICATION FOR RS.80,000/- IN THE APPELLANT COMPANY. THE SHARE APP LICATION WAS MADE BY CASH. THIS INDIVIDUAL HAS DULY FILED HIS RETURN OF INCOM E BEFORE ITO WARD 45(3), KOLKATA AND WAS HAVING PAN ABUPT4793L. THIS INDIVID UAL WAS HAVING A CAPITAL OF RS.14,03,564/- AS ON 31/03/2013 AND RS.1 2,59,041/- AS ON 31/03/2012 RESPECTIVELY. THE COPY OF THE ACCOUNT STATEMENTS FO R THE YEAR ENDED 31/03/2013 AND 31/03/2012 WAS MADE AVAILABLE IN THE PAPER BO OK THE COPY OF THE LEDGER ACCOUNT ALSO MADE AVAILABLE IN THE PAPER BOOK. THE COPY OF THE IT ACKNOWLEDGEMENT FOR THE ASST YEARS ENDED 31/03/2012 IS AVAILABLE IN THE PAPER BOOK. THE COPIES OF THE SHARE APPLICATION FORMS ARE ALSO AVAILABLE IN THE PAPER BOOK. ALL THE RELEVANT DOCUMENTS FOR THIS INDIVIDUA L ARE AVAILABLE ON PAGES 106- 114 OF THE PAPER BOOK. (G) RAM KUMAR SHARMA: THIS INDIVIDUAL MADE SHARE AP PLICATION FOR RS.60,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MADE BY CASH. THIS INDIVIDUAL HAS DULY FILED HIS RETURN OF INCOME BEFO RE ITO WARD 51(3), KOLKATA AND WAS HAVING PAN AKFPSOI94L. THIS INDIVIDUAL WAS HAVING A CAPITAL OF RS.10,93,010/- AS ON 31/03/2013 AND RS.9,92,050/- AS ON 31/03/2012 RESPECTIVELY. THE COPY OF THE ACCOUNT STATEMENTS FO R THE YEAR ENDED 31/03/2013 AND 31/03/2012 WAS MADE AVAILABLE IN THE PAPER BO OK. THE COPY OF THE LEDGER ACCOUNT ALSO MADE AVAILABLE IN THE PAPER BOOK. THE COPY OF THE IT 7 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD ACKNOWLEDGEMENT FOR THE ASST YEAR ENDED 31/03/2012 IS AVAILABLE IN THE PAPER BOOK. THE COPIES OF THE SHARE APPLICATION FORMS ARE ALSO AVAILABLE IN THE PAPER BOOK. ALL THE RELEVANT DOCUMENTS FOR THIS INDIVIDUA L ARE AVAILABLE ON PAGES 115- 122 OF THE PAPER BOOK. (H) SITA RAM SHARMA: THIS INDIVIDUAL MADE SHARE APP LICATION FOR RS.60,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MA DE BY CASH. THIS INDIVIDUAL HAS DULY FILED HIS RETURN OF INCOME BEFO RE ITO WARD 36(3), KOLKATA AND WAS HAVING PAN ALRPS8387G. THIS INDIVIDUAL WAS HAVING A CAPITAL OF RS. 10,22,585/- AS ON 31/03/2013 AND RS.9,21,665/- AS ON 31/03/2012 RESPECTIVELY. THE COPY OF THE ACCOUNT STATEMENTS FO R THE YEAR ENDED 31/03/2013 AND 31/03/2012 WAS MADE AVAILABLE IN THE PAPER BO OK. THE COPY OF THE LEDGER ACCOUNT ALSO MADE AVAILABLE IN THE PAPER BOOK. THE COPY OF THE IT ACKNOWLEDGEMENT FOR THE ASST. YEAR ENDED 31/03/2012 IS AVAILABLE IN THE PAPER BOOK. THE COPIES OF THE SHARE APPLICATION FORMS ARE ALSO AVAILABLE IN THE PAPER BOOK. ALL THE RELEVANT DOCUMENTS FOR THIS INDIVIDUA L ARE AVAILABLE ON PAGES 123-130 OF THE PAPER BOOK. I) TIKAM CHAND SHARMA: THIS INDIVIDUAL MADE SHORE A PPLICATION FOR RS.60,000/- IN THE APPELLANT COMPANY. THE SHARE APP LICATION WAS MADE BY CASH. THIS INDIVIDUAL HAS DULY FILED HIS RETURN OF INCOM E BEFORE ITO WARD 45(3), KOLKATA AND WAS HAVING PAN BATPS2701. THIS INDIVIDU AL WAS HAVING A CAPITAL OF RS.8,12,516/- AS ON 31/03/2013 AND RS.6, 98,776/- AS ON 31/03/2012 RESPECTIVELY. THE COPY OF THE ACCOUNT STATEMENTS FO R THE YEAR ENDED 31/03/2013 AND 31/03/2012 WAS MADE AVAILABLE IN THE PAPER BOO K. THE COPY OF THE LEDGER ACCOUNT ALSO MADE AVAILABLE IN THE PAPER BOOK. THE COPY OF THE IT ACKNOWLEDGEMENT FOR THE ASST.YEAR ENDED 31/03/2012 IS AVAILABLE IN THE PAPER BOOK. THE COPIES OF THE SHARE APPLICATION FORMS ARE ALSO AVAILABLE IN THE PAPER BOOK. ALL THE RELEVANT DOCUMENTS FOR THIS INDIVIDUA L ARE AVAILABLE ON PAGES 131- 138 OF THE PAPER BOOK 8 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD 10. FROM THE ABOVE DETAILS AND THE PAPER BOOK FILE D WHICH WAS ALSO BEFORE THE ASSESSING OFFICER IT WILL BE EVIDENT THAT IN CASE O F ALL THE SHARE APPLICANTS THE (I) SHARE APPLICATION FORM AND ALLOTMENT LETTER IS AVAILABLE (II) THE SHARE APPLICANTS ARE INCOME TAX ASSESSEE AND ARE FILING THEIR RETURN OF INCOME (III) THE BANK ACCOUNTS BELONGED TO THE APPLICANTS (IV) THE APPLICANTS ARE HAVING CRED ITWORTHINESS WHICH IS REPRESENTED BY THE CAPITAL. 11. WE NOTE THAT AS PER SECTION 68 OF THE ACT A DUT Y IS CASTED UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CREDIT FOUND IN HI S BOOKS. IN THE INSTANT CASE, THE CREDIT IS IN THE FORM OF RECEIPT OF SHARE CAPITAL F ROM THE AFORESAID NINE (9) SHARE APPLICANTS. THE NATURE OF RECEIPT TOWARDS SHARE CAP ITAL IS NOTED FROM THE ENTRIES PASSED IN THE RESPECTIVE BALANCE SHEETS AS SHARE CAPITAL A ND INVESTMENTS. HENCE THE NATURE OF RECEIPT IS NOT DISPUTED. IN RESPECT OF SOURCE OF C REDIT, THE ASSESSEE HAS TO DISCHARGE THE ONUS BY PRIMAFACIE PROVING THE THREE NECESSARY IN GREDIENTS I.E IDENTITY OF SHARE APPLICANTS, GENUINENESS OF TRANSACTIONS AND CREDITW ORTHINESS OF SHARE APPLICANTS. THE IDENTITY OF SHARE APPLICANTS IS PROVED BY FURNISHI NG THE NAME, ADDRESS, PAN OF SHARE APPLICANTS TOGETHER WITH THE COPIES OF THEIR RESP ECTIVE BALANCE SHEETS AND INCOME TAX RETURNS. WITH REGARD TO THE CREDITWORTHINESS OF SHA RE APPLICANTS, THESE INDIVIDUALS ARE HAVING CAPITAL IN LAKHS OF RUPEES AND THE INVESTMEN T MADE IN THE APPELLANT COMPANY IS A SMALL PART OF THEIR CAPITAL. THESE TRANSACTIONS ARE ALSO DULY REFLECTED IN THE BALANCE SHEETS OF THE SHARE APPLICANTS. BY THIS, THE CRED ITWORTHINESS OF THE SHARE APPLICANTS CANNOT BE DOUBTED. THIRD INGREDIENT IS GENUINENES S OF THE TRANSACTIONS. THE MONIES HAVE BEEN DIRECTLY PAID BY THE ASSESSEE COMPANY BY CASH OUT OF SUFFICIENT BANK BALANCES AVAILABLE IN THEIR BANK ACCOUNTS ON BEHALF OF THE SHARE APPLICANTS. THE SHARE APPLICANTS HAVE CONFIRMED THE TRANSACTIONS IN RESP ONSE TO THE NOTICE U/S 133(6) OF THE ACT AND HAVE ALSO CONFIRMED THE PAYMENTS. 12. WE NOTE THAT MAIN CONTENTION OF THE LD. DR THAT THE ADDRESSES OF THE SHARE APPLICANTS ARE SAME I.E 8 LYONS RANGE, GROUND FLOOR , KOLKATA-700 001. WE NOTE THAT THE LD. CIT(A) HAS CALLED FOR THE ASSESSMENT RECORD S AND HAD CONFIRMED THAT PURSUANT TO THE NOTICE ISSUED BY THE AO U/S. 133(6) OF THE A CT TO THE SHARE APPLICANTS THEY HAD CONFIRMED ABOUT THE TRANSACTION WITH THE ASSESSEE. THE SHAREHOLDERS HAD SUBMITTED ALL 9 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD THE RELEVANT DETAILS AND HAD CONFIRMED THE TRANSAC TIONS WITH THE APPELLANT ASSESSEE. HE ALSO NOTES THAT FROM THE SUBMISSIONS OF THE ASSESSE E THAT THE EVIDENCES ARE AVAILABLE IN THE PAPER BOOK PAGES 67-138. ALL THESE EVIDENCES WE RE FILED BEFORE THE LD. CIT(A) AND DESPITE IT HAS BEEN SHOWN TO THE LD. CIT(A) THAT AL L THE 9 (NINE) SHARE APPLICANTS HAD ENOUGH CREDITWORTHINESS TO GIVE AMOUNT RANGING RS.4 0,000/- TO RS. 80,000/- AND THEIR BANK STATEMENTS SHOWING THE AMOUNT BEING WITHDRAWN, THEN ALSO HE DID NOT ACCEPT THE CLAIM OF THE ASSESSEE AND FOUND THAT ASSESSEE FA ILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS. 13. WE NOTE THAT IN THIS CASE ALL THE AFORESAID SHA REHOLDERS HAD SUBMITTED THE FOLLOWING RELEVANT DETAILS AS CALLED FOR AND HAD CO NFIRMED THE TRANSACTION WITH THE ASSESSEE COMPANY. THE EVIDENCE WHICH WERE FILED BE FORE THE AO INCLUDED THE FOLLOWING DETAILS. (A) INCOME TAX RETURN OF THE SHARE HOLDERS (B) CONFIRMATION GIVEN BY THE SHARE HOLDERS (C) SHARE APPLICATION FORMS (D) SHARE ALLOTMENT LETTERS (E) COPY OF THE BANK ACCOUNT OF THE SHARE HOLDERS (F) TRANSACTION WITH THE APPELLANT WAS DULY HIGHLIG HTED IN THE BANK STATEMENT (G) BALANCE SHEET (H)PAN DETAILS 14. TAKING NOTE OF THE AFORESAID DOCUMENTS WE ARE O F THE OPINION THAT ASSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENTITY, CRED ITWORTHINESS AND GENUINENESS OF THE SHARE SUBSCRIBERS AND THE ADDITION MADE U/S . 68 OF THE ACT WAS NOT WARRANTED. TO COME TO THIS CONCLUSION, LET US LOOK AT SECTION 68 OF THE ACT AND THE JUDICIAL PRECEDENTS ON THE ISSUE AT HAND. 15. SECTION 68 UNDER WHICH THE ADDITION HAS BEEN MA DE BY THE ASSESSING OFFICER READS AS UNDER: 10 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD '68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, I N 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. ' 16. THE PHRASEOLOGY OF SECTION 68 IS CLEAR. THE LEG ISLATURE HAS LAID DOWN THAT IN THE ABSENCE OF A SATISFACTORY EXPLANATION, THE U NEXPLAINED CASH CREDIT MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN THIS CASE THE LEGISLATIVE MANDATE IS NOT IN TERMS OF THE WORDS SHALL BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR'. THE SUPREME COURT WHILE INTERPRETING SIMILAR PHRASEOLOGY USED I N SECTION 69 HAS HELD THAT IN CREATING THE LEGAL FICTION THE PHRASEOLOGY EMPLOYS THE WORD 'MAY' AND NOT 'SHALL'. THUS THE UN-SATISFACTORINESS OF THE EXPLAN ATION DOES NOT AND NEED NOT AUTOMATICALLY RESULT IN DEEMING THE AMOUNT CREDITED IN THE BOOKS AS THE INCOME OF THE ASSESSEE AS HELD BY THE SUPREME COURT IN THE CASE OF CIT V. SMT. P. K. NOORJAHAN [1999] 237 ITR 570. WE NOTE THAT AGAINST THE SAID DECISION OF HON'BLE GUJARAT HIGH COURT THE SPECIAL LEAVE PETITION FILED BY THE REVENUE HAS ALSO BEEN DISMISSED BY THE HON'BLE APEX COURT. 17. IN THE CASE OF ORISSA CORPN. (P) LTD. (SUPRA) 1 59 ITR 78 AND THE HON'BLE GUJARAT HIGH COURT, IN THE CASE OF DY. CIT V. ROHIN I BUILDERS [2002] 256 ITR 360 /[2003] 127 TAXMAN 523 , THE HON'BLE APEX COURT HAS HELD THAT ONUS OF THE ASSESSEE (IN WHOSE BOOKS OF ACCOUNT CREDIT APPEARS) STANDS FULLY DISCHARGED IF THE IDENTITY OF THE CREDITOR IS ESTABLISHED AND ACTUAL RECEIPT OF MONEY FROM SUCH CREDITOR IS PROVED. IN CASE, THE ASSESSING OFFICER IS DISSATISFIED ABOUT THE SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNTS OF THE CRED ITORS, THE PROPER COURSE WOULD BE TO ASSESS SUCH CREDIT IN THE HANDS OF THE CREDIT OR (AFTER MAKING DUE ENQUIRIES FROM SUCH CREDITOR). IN ARRIVING AT THIS CONCLUSION , THE HON'BLE COURT HAS FURTHER STRESSED THE PRESENCE OF WORD 'MAY' IN SECTION 68. RELEVANT OBSERVATIONS AT PAGES 369 AND 370 OF THIS REPORT ARE REPRODUCED HER EUNDER:- 'MERELY BECAUSE SUMMONS ISSUED TO SOME OF THE CREDI TORS COULD NOT BE SERVED OR THEY FAILED TO ATTEND BEFORE THE ASSESSING OFFICER, CANN OT BE A GROUND TO TREAT THE LOANS TAKEN BY THE ASSESSEE FROM THOSE CREDITORS AS NON-GENUINE IN VIEW OF THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE CASE OF ORISSA CORPORAT ION [1986] 159 ITR 78. IN THE SAID DECISION THE SUPREME COURT HAS OBSERVED THAT WHEN T HE ASSESSEE FURNISHES NAMES AND 11 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD ADDRESSES OF THE ALLEGED CREDITORS AND THE GIR NUMB ERS, THE BURDEN SHIFTS TO THE DEPARTMENT TO ESTABLISH THE REVENUE'S CASE AND IN O RDER TO SUSTAIN THE ADDITION THE REVENUE HAS TO PURSUE THE ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINESS AND MERE NON-COMPLIANCE OF SUMMONS ISSUED BY THE ASSESS ING OFFICER UNDER SECTION 131, BY THE ALLEGED CREDITORS WILL NOT BE SUFFICIENT TO DRA W AND ADVERSE INFERENCE AGAINST THE ASSESSEE. IN THE CASE OF SIX CREDITORS WHO APPEARED BEFORE THE ASSESSING OFFICER AND WHOSE STATEMENTS WERE RECORDED BY THE ASSESSING OFF ICER, THEY HAVE ADMITTED HAVING ADVANCED LOANS TO THE ASSESSEE BY ACCOUNT PAYEE CHE QUES AND IN CASE THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE CASH AMOUNT DEPO SITED BY THOSE CREDITORS IN THEIR BANK ACCOUNTS, THE PROPER COURSE WOULD HAVE BEEN TO MAKE ASSESSMENTS IN THE CASES OF THOSE CREDITORS BY' TREATING THE CASH DEPOSITS IN THEIR B ANK ACCOUNTS AS UNEXPLAINED INVESTMENTS OF THOSE CREDITORS UNDER SECTION 69. 18. IN THE CASE OF NEMI CHAND KOTHARI 136 TAXMAN 21 3, (SUPRA), THE HON'BLE GUAHATI HIGH COURT HAS THROWN LIGHT ON ANOTHER ASPE CT TOUCHING THE ISSUE OF ONUS ON ASSESSEE UNDER SECTION 68, BY HOLDING THAT THE S AME SHOULD BE DECIDED BY TAKING INTO CONSIDERATION THE PROVISION OF SECTION 106 OF THE EVIDENCE ACT WHICH SAYS THAT A PERSON CAN BE REQUIRED TO PROVE ONLY SU CH FACTS WHICH ARE IN HIS KNOWLEDGE. THE HON'BLE COURT IN THE SAID CASE HELD THAT, ONCE IT IS FOUND THAT AN ASSESSEE HAS ACTUALLY TAKEN MONEY FROM DEPOSITOR/LE NDER WHO HAS BEEN FULLY IDENTIFIED, THE ASSESSEE/BORROWER CANNOT BE CALLED UPON TO EXPLAIN, MUCH LESS PROVE THE AFFAIRS OF SUCH THIRD PARTY, WHICH HE IS NOT EVEN SUPPOSED TO KNOW OR ABOUT WHICH HE CANNOT BE HELD TO BE ACCREDITED WITH ANY KNOWLEDGE. IN THIS VIEW, THE HON'BLE COURT HAS LAID DOWN THAT SECTION 68 OF INCOME-TAX ACT, SHOULD BE READ ALONG WITH SECTION 106 OF EVIDENCE ACT. THE RE LEVANT OBSERVATIONS AT PAGE 260 TO 262, 264 AND 265 OF THE REPORT ARE REPRODUCE D HEREIN BELOW:- 'WHILE INTERPRETING THE MEANING AND SCOPE OF SECTIO N 68, ONE HAS TO BEAR IN MIND THAT NORMALLY, INTERPRETATION OF A STATUTE SHALL BE GENE RAL, IN NATURE, SUBJECT ONLY TO SUCH EXCEPTIONS AS MAY BE LOGICALLY PERMITTED BY THE STA TUTE ITSELF OR BY SOME OTHER LAW CONNECTED THEREWITH OR RELEVANT THERETO. KEEPING IN VIEW THESE FUNDAMENTALS OF INTERPRETATION OF STATUTES, WHEN WE READ CAREFULLY THE PROVISIONS OF SECTION 68, WE NOTICE NOTHING IN SECTION 68 TO SHOW THAT THE SCOPE OF THE INQUIRY UNDER SECTION 68 BY THE REVENUE DEPARTMENT SHALL REMAIN CONFINED TO THE TRA NSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR NOR DOES THE WORDING OF SECTION 68 INDICATE THAT SECTION 68 DOES NOT AUTHORIZE THE REVENUE DEPARTMEN T TO MAKE INQUIRY INTO THE SOURCE(S) OF THE CREDIT AND/OR SUB-CREDITOR. THE LA NGUAGE EMPLOYED BY SECTION 68 CANNOT BE READ TO IMPOSE SUCH LIMITATIONS ON THE PO WERS OF THE ASSESSING OFFICER. THE LOGICAL CONCLUSION, THEREFORE, HAS TO BE, AND WE HO LD THAT AN INQUIRY UNDER SECTION 68 NEED NOT NECESSARILY BE KEPT CONFINED BY THE ASSESS ING OFFICER WITHIN THE TRANSACTIONS, WHICH TOOK PLACE BETWEEN THE ASSESSEE AND HIS CREDI TOR, BUT THAT THE SAME MAY BE EXTENDED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLAC E BETWEEN THE CREDITOR AND HIS SUB- CREDITOR. THUS, WHILE THE ASSESSING OFFICER IS UNDE R SECTION 68, FREE TO LOOK INTO THE SOURCE(S) OF THE CREDITOR AND/OR OF THE SUB-CREDITO R, THE BURDEN ON THE ASSESSEE UNDER SECTION 68 IS DEFINITELY LIMITED. THIS LIMIT HAS BE EN IMPOSED BY SECTION 106 OF THE EVIDENCE ACT WHICH READS AS FOLLOWS: 12 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD 'BURDEN OF PROVING FACT ESPECIALLY WITHIN KNOWLEDGE .-WHEN ANY FACT IS ESPECIALLY WITHIN THE KNOWLEDGE OF ANY PERSON, THE BURDEN) OF PROVING THAT FACT IS UPON HIM. ' ******** WHAT, THUS, TRANSPIRES FROM THE ABOVE DISCUSSION IS THAT WHITE SECTION 106 OF THE EVIDENCE ACT LIMITS THE ONUS OF THE ASSESSEE TO THE EXTENT OF HIS PROVING THE SOURCE FROM WHICH HE HAS RECEIVED THE CASH CREDIT, SECTION 68 GIVES AMPLE FREEDOM TO THE ASSESSING OFFICER TO MAKE INQUIRY NO T ONLY INTO THE SOURCE(S)OF THE CREDITOR BUT ALSO OF HIS (CREDITOR'S) SUB-CREDI TORS AND PROVE, AS A RESULT, OF SUCH INQUIRY, THAT THE MONEY RECEIVED BY THE ASSESS EE, IN THE FORM OF LOAN FROM THE CREDITOR, THOUGH ROUTED THROUGH THE SUB-CREDITO RS, ACTUALLY BELONGS TO, OR WAS OF, THE ASSESSEE HIMSELF. IN OTHER WORDS, WHILE SECTION 68 GIVES THE LIBERTY TO THE ASSESSING OFFICER TO ENQUIRE INTO THE SOURCE /SOURCE FROM WHERE THE CREDITOR HAS RECEIVED THE MONEY, SECTION 106 MAKES THE ASSESSEE LIABLE TO DISCLOSE ONLY THE SOURCE(S) FROM WHERE HE HAS HIMSE LF RECEIVED THE CREDIT AND IT IS NOT THE BURDEN OF THE ASSESSEE TO PROVE THE CRED ITWORTHINESS OF THE SOURCE(S) OF THE SUB-CREDITORS. IF SECTION 106 AND SECTION 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN, THE INTERPRETATION OF SECTION 68 A RE TO STAND TOGETHER, WHICH THEY MUST, THEN THE INTERPRETATION OF SECTION 68 HA S TO BE IN SUCH A WAY THAT IT DOES NOT MAKE SECTION 106 REDUNDANT. HENCE, THE HAR MONIOUS CONSTRUCTION OF SECTION 106 OF THE EVIDENCE ACT AND SECTION 68 OF T HE INCOME- TAX ACT WILL BE THAT THOUGH APART FROM ESTABLISHING THE IDENTITY OF THE CREDITOR, THE ASSESSEE MUST ESTABLISH THE GENUINENESS OF THE TRANSACTION A S WELL AS THE CREDITWORTHINESS OF HIS CREDITOR, THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS AS WELL AS THE CRED ITWORTHINESS OF THE CREDITOR MUST REMAIN CONFINED TO THE TRANSACTIONS, WHICH HAV E TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR. WHAT FOLLOWS, AS A COROL LARY, IS THAT IT IS NOT THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS BETWEEN HIS CREDITOR AND SUB-CREDITORS NOR IS IT THE BURDEN OF THE ASSESSEE TO PROVE THAT THE SUB-CREDITOR HAD THE CREDITWORTHINESS TO ADVANCE TH E CASH CREDIT TO THE CREDITOR FROM WHOM THE CASH CREDIT HAS BEEN. EVENTUALLY, REC EIVED BY THE ASSESSEE. IT, THEREFORE, FURTHER LOGICALLY FOLLOWS THAT THE CREDI TOR'S CREDITWORTHINESS HAS TO BE JUDGED VIS-A-VIS THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR, AND IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CREDITOR OR OF THE GENUINENESS OF THE TRANSACTIONS, WHICH TOOK BETWEEN THE CREDITOR AND SUB-CREDITOR AND/OR CREDIT WORTHINESS OF THE SUB- CREDITORS, FOR, THESE ASPECTS MAY NOT BE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE. ' ********** ' ... IF A CREDITOR HAS, BY ANY UNDISCLOSED SOURCE, A PARTICULAR AMOUNT OF MONEY IN THE BANK, THERE IS NO LIMITATION UNDER THE LAW O N THE PART OF THE ASSESSEE TO OBTAIN SUCH AMOUNT OF MONEY OR PART THEREOF FROM TH E CREDITOR, BY WAY OF CHEQUE IN THE FORM OF LOAN AND IN SUCH A CASE, IF T HE CREDITOR FAILS TO SATISFY AS TO HOW HE HAD ACTUALLY RECEIVED THE SAID AMOUNT AND HAPPENED TO KEEP THE SAME IN THE BANK, THE SAID AMOUNT CANNOT BE TREATED AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE. IN OTHER WORDS, THE GENUIN ENESS AS WELL AS THE CREDITWORTHINESS OF A CREDITOR HAVE TO BE ADJUDGED VIS-A-VIS THE TRANSACTIONS, WHICH HE HAS WITH THE ASSESSEE. THE REASON WHY WE H AVE FORMED THE OPINION THAT IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE ACTUAL SOURCE OR SOURCES FROM WHERE THE CREDITOR HAS ACCUMULATED THE AMOUNT, WHICH HE ADVANCES, AS LOAN, TO THE ASSESSEE IS THAT SO FAR AS AN ASSESSEE IS CONCERNED, HE HAS TO PROVE THE GENUINENESS OF THE TRANSACTION AND THE CREDITWO RTHINESS OF THE CREDITOR 13 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD VIS-A-VIS THE TRANSACTIONS WHICH HAD TAKEN PLACE BE TWEEN THE ASSESSEE AND THE CREDITOR AND NOT BETWEEN THE CREDITOR AND THE SUB-C REDITORS, FOR, IT IS NOT EVEN REQUIRED UNDER THE LAW FOR THE ASSESSEE TO TRY TO F IND OUT AS TO WHAT SOURCES FROM WHERE THE CREDITOR HAD RECEIVED THE AMOUNT, HI S SPECIAL KNOWLEDGE UNDER SECTION 106 OF THE EVIDENCE ACT MAY VERY WELL REMAI N CONFINED ONLY TO THE TRANSACTIONS, WHICH HE HAD' WITH THE CREDITOR AND H E MAY NOT KNOW WHAT TRANSACTION(S) HAD TAKEN PLACE BETWEEN HIS CREDITOR AND THE SUB-CREDITOR ' ********** 'IN OTHER WORDS, THOUGH UNDER SECTION 68 AN ASSESSI NG OFFICER IS FREE TO SHOW, WITH THE HELP OF THE INQUIRY CONDUCTED BY HIM INTO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND THE SUB-CREDIT OR, THAT THE TRANSACTION BETWEEN THE TWO WERE NOT GENUINE AND THAT THE SUB-C REDITOR HAD NO CREDITWORTHINESS, IT WILL NOT NECESSARILY MEAN THAT THE LOAN ADVANCED BY THE SUB-CREDITOR TO THE CREDITOR WAS INCOME OF THE ASSE SSEE FROM UNDISCLOSED SOURCE UNLESS THERE IS EVIDENCE, DIRECT OR CIRCUMSTANTIAL, TO SHOW THAT THE AMOUNT WHICH HAS BEEN ADVANCED BY THE SUB-CREDITOR TO THE CREDITOR, HAD ACTUALLY BEEN RECEIVED BY THE SUB-CREDITOR FROM THE ASSESSEE .' ********** 'KEEPING IN VIEW THE ABOVE POSITION OF LAW, WHEN WE TURN TO THE FACTUAL MATRIX OF THE PRESENT CASE, WE FIND THAT SO FAR AS THE APP ELLANT IS CONCERNED, HE HAS ESTABLISHED THE IDENTITY OF THE CREDITORS, NAMELY, NEMICHAND NAHATA AND SONS (HUF) AND PAWAN KUMAR AGARWALLA. THE APPELLANT HAD ALSO SHOWN, IN ACCORDANCE WITH THE BURDEN, WHICH RESTED ON HIM UND ER SECTION 106 OF THE EVIDENCE ACT, THAT THE SAID AMOUNTS HAD BEEN RECEIV ED BY HIM BY WAY OF CHEQUES FROM THE CREDITORS AFOREMENTIONED. IN FACT THE FACT THAT THE ASSESSEE HAD RECEIVED THE SAID AMOUNTS BY WAY OF CHEQUES WAS NOT IN DISPUTE. ONCE THE ASSESSEE HAD ESTABLISHED THAT HE HAD RECEIVED THE S AID AMOUNTS FROM THE CREDITORS AFOREMENTIONED BY WAY OF CHEQUES, THE ASS ESSEE MUST BE TAKEN TO HAVE PROVED THAT THE CREDITOR HAD THE CREDITWORTHINESS T O ADVANCE THE LOANS. THEREAFTER THE BURDEN HAD SHIFTED TO THE ASSESSING OFFICER TO PROVE THE CONTRARY. ON MERE FAILURE ON THE PART OF THE CREDIT ORS TO SHOW THAT THEIR SUB- CREDITORS HAD CREDITWORTHINESS TO ADVANCE THE SAID LOAN AMOUNTS TO THE ASSESSEE, SUCH FAILURE, AS A COROLLARY, COULD NOT H AVE BEEN AND OUGHT NOT TO HAVE BEEN, UNDER THE LAW, TREATED AS THE INCOME FRO M THE UNDISCLOSED SOURCES OF THE ASSESSEE HIMSELF, WHEN THERE WAS NEITHER DIRECT NOR CIRCUMSTANTIAL EVIDENCE ON RECORD THAT THE SAID LOAN AMOUNTS ACTUALLY BELON GED TO, OR WERE OWNED BY, THE ASSESSEE. VIEWED FROM THIS ANGLE, WE HAVE NO HE SITATION IN HOLDING THAT IN THE CASE AT HAND, THE ASSESSING OFFICER HAD FAILED TO SHOW THAT THE AMOUNTS, WHICH HAD COME TO THE HANDS OF THE CREDITORS FROM T HE HANDS OF THE SUB- CREDITORS, HAD ACTUALLY BEEN RECEIVED BY THE SUB-CR EDITORS FROM THE ASSESSEE. IN THE ABSENCE OF ANY SUCH EVIDENCE ON RECORD, THE ASS ESSING OFFICER COULD NOT HAVE TREATED THE SAID AMOUNTS AS INCOME DERIVED BY THE APPELLANT FROM UNDISCLOSED SOURCES. THE LEARNED TRIBUNAL SERIOUSLY FELL INTO ERROR IN TREATING THE SAID AMOUNTS AS INCOME DERIVED BY THE APPELLANT FROM. UNDISCLOSED SOURCES MERELY ON THE FAILURE OF THE SUB-CREDITORS TO PROVE THEIR CREDITWORTHINESS. 19. FURTHER, IN THE CASE OF CIT V. S. KAMALJEET SIN GH [2005] 147 TAXMAN 18(ALL.) THEIR LORDSHIPS, ON THE ISSUE OF DISCHARGE OF ASSESSEE'S ONUS IN RELATION TO A CASH CREDIT APPEARING IN HIS BOOKS OF ACCOUNT, HA S OBSERVED AND HELD AS UNDER:- 14 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD '4. THE TRIBUNAL HAS RECORDED A FINDING THAT THE AS SESSEE HAS DISCHARGED THE ONUS WHICH WAS ON HIM TO EXPLAIN THE NATURE AND SOURCE O F CASH CREDIT IN QUESTION. THE ASSESSEE DISCHARGED THE ONUS BY PLACING (I) CONFIRM ATION LETTERS OF THE CASH CREDITORS; (II) THEIR AFFIDAVITS; (III) THEIR FULL ADDRESSES A ND GIR NUMBERS AND PERMANENT ACCOUNT NUMBERS. IT HAS FOUND THAT THE ASSESSEE'S BURDEN ST OOD DISCHARGED AND SO, NO ADDITION TO HIS TOTAL INCOME ON ACCOUNT OF CASH CREDIT WAS C ALLED FOR. IN VIEW OF THIS FINDING, WE FIND THAT THE TRIBUNAL WAS RIGHT IN REVERSING THE O RDER OF THE AA C, SETTING ASIDE THE ASSESSMENT ORDER. 20. WE ALSO TAKE NOTE OF THE DECISION OF THE HON' BLE HIGH COURT, CALCUTTA IN THE CASE OF S.K. BOTHRA & SONS, HUF V. INCOME-TAX O FFICER, WARD- 46(3), KOLKATA 347 ITR 347 WHEREIN THE COURT HELD AS FOLLO WS: 15. IT IS NOW A SETTLED LAW THAT WHILE CONSIDERING THE QUESTION WHETHER THE ALLEGED LOAN TAKEN BY THE ASSESSEE WAS A GENUINE TRANSACTION, TH E INITIAL ONUS IS ALWAYS UPON THE ASSESSEE AND IF NO EXPLANATION IS GIVEN OR THE EXPL ANATION GIVEN BY THE APPELLANT IS NOT SATISFACTORY, THE ASSESSING OFFICER CAN DISBELIEVE THE ALLEGED TRANSACTION OF LOAN. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURD EN IS DISCHARGED BY THE ASSESSEE BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE LO AN TRANSACTION, THE ONUS SHIFTS UPON THE ASSESSING OFFICER AND AFTER VERIFICATION, HE CA N CALL FOR FURTHER EXPLANATION FROM THE ASSESSEE AND IN THE PROCESS, THE ONUS MAY AGAIN SHI FT FROM THE ASSESSING OFFICER TO ASSESSEE. 16. IN THE CASE BEFORE US, THE APPELLANT BY PRODUCI NG THE LOAN-CONFIRMATION-CERTIFICATES SIGNED BY THE CREDITORS, DISCLOSING THEIR PERMANENT ACCOUNT NUMBERS AND ADDRESS AND FURTHER INDICATING THAT THE LOAN WAS TAKEN BY ACCOU NT PAYEE CHEQUES, NO DOUBT, PRIMA FACIE, DISCHARGED THE INITIAL BURDEN AND THOSE MATE RIALS DISCLOSED BY THE ASSESSEE PROMPTED THE ASSESSING OFFICER TO ENQUIRE THROUGH T HE INSPECTOR TO VERIFY THE STATEMENTS. 21. IN A CASE WHERE THE ISSUE WAS WHETHER THE ASSE SSEE AVAILED CASH CREDIT AS AGAINST FUTURE SALE OF PRODUCT, THE AO ISSUED SUMMO NS TO THE CREDITORS WHO DID NOT TURN UP BEFORE HIM, SO AO DISBELIEVED THE EXIST ENCE OF CREDITORS AND SADDLED THE ADDITION, WHICH WAS OVERTURNED BY LD. CIT(A). HOWEVER, THE TRIBUNAL REVERSED THE DECISION OF THE LD. CIT(A) AND UPHELD THE AOS DECISION, WHICH ACTION OF TRIBUNAL WAS CHALLENGED BY THE HON'BLE HI GH COURT, CALCUTTA IN THE CASE OF CRYSTAL NETWORKS (P.) LTD. V. COMMISSIONER OF INCOME-TAX 353 ITR 171 WHEREIN THE TRIBUNALS DECISION WAS OVERTURNED AND DECISION OF LD. CIT(A) UPHELD AND THE HONBLE HIGH COURT HAS HELD THAT WH EN THE BASIC EVIDENCES ARE ON RECORD THE MERE FAILURE OF THE CREDITOR TO APPEA R CANNOT BE BASIS TO MAKE ADDITION. THE COURT HELD AS FOLLOWS: 8. ASSAILING THE SAID JUDGMENT OF THE LEARNED TRIBU NAL LEARNED COUNSEL FOR THE APPELLANT SUBMITS THAT INCOME-TAX OFFICER DID NOT CONSIDER TH E MATERIAL EVIDENCE SHOWING THE CREDITWORTHINESS AND ALSO OTHER DOCUMENTS, VIZ., CO NFIRMATORY STATEMENTS OF THE PERSONS, 15 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD OF HAVING ADVANCED CASH AMOUNT AS AGAINST THE SUPPL Y OF BIDIS. THESE EVIDENCE WERE DULY CONSIDERED BY THE COMMISSIONER OF INCOME-TAX ( APPEALS). THEREFORE, THE FAILURE OF THE PERSON TO TURN UP PURSUANT TO THE SUMMONS ISSUE D TO ANY WITNESS IS IMMATERIAL WHEN THE MATERIAL DOCUMENTS MADE AVAILABLE, SHOULD HAVE BEEN ACCEPTED AND INDEED IN SUBSEQUENT YEAR THE SAME EXPLANATION WAS ACCEPTED B Y THE INCOME-TAX OFFICER. HE FURTHER CONTENDED THAT WHEN THE TRIBUNAL HAS RELIED ON THE ENTIRE JUDGMENT OF THE COMMISSIONER OF INCOME-TAX (APPEALS), THEREFORE, IT WAS NOT PROPER TO TAKE UP SOME PORTION OF THE JUDGMENT OF THE COMMISSIONER OF INCO ME-TAX (APPEALS) AND TO IGNORE THE OTHER PORTION OF THE SAME. THE JUDICIAL PROPRIETY A ND FAIRNESS DEMANDS THAT THE ENTIRE JUDGMENT BOTH FAVOURABLE AND UNFAVOURABLE SHOULD HA VE BEEN CONSIDERED. BY NOT DOING SO THE TRIBUNAL COMMITTED GRAVE ERROR IN LAW IN UPS ETTING THE JUDGMENT IN THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). 9. IN THIS CONNECTION HE HAS DRAWN OUR ATTENTION TO A DECISION OF THE SUPREME COURT IN THE CASE OF UDHAVDAS KEWALRAM V. CIT [19671 66 ITR 462. IN THIS JUDGMENT IT IS NOTICED THAT THE SUPREME COURT AS PROPOSITION OF LA W HELD THAT THE TRIBUNAL MUST IN DECIDING AN APPEAL, CONSIDER WITH DUE CARE, ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND T HE COMMISSIONER IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. 10. WE FIND CONSIDERABLE FORCE OF THE SUBMISSIONS O F 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 FORWAR D TO PROVE. THEREFORE, IT SHALL BE ASSUMED THAT THE ASSESSEE FAILED TO PROVE THE EXIST ENCE OF THE CREDITORS OR FOR THAT MATTER THE CREDITWORTHINESS. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS TAKEN THE TROUBLE OF EXAMINING OF ALL OTHER MATERIALS AND DOCUMENTS, VIZ., CONFIRMATORY STATEME NTS, INVOICES, CHALLANS AND VOUCHERS SHOWING SUPPLY OF BIDIS AS AGAINST THE ADVANCE. THE REFORE, THE ATTENDANCE OF THE WITNESSES PURSUANT TO THE SUMMONS ISSUED, IN OUR VI EW, IS NOT IMPORTANT. THE IMPORTANT IS TO PROVE AS TO WHETHER THE SAID CASH CREDIT WAS RECEIVED AS AGAINST THE FUTURE SALE OF THE PRODUCT OF THE ASSESSEE OR NOT. WHEN IT WAS FOU ND BY THE COMMISSIONER OF INCOME- TAX (APPEALS) ON FACTS HAVING EXAMINED THE DOCUMENT S THAT THE ADVANCE GIVEN BY THE CREDITORS HAVE BEEN ESTABLISHED THE TRIBUNAL SHOULD NOT HAVE IGNORED THIS -FACT FINDING. INDEED THE TRIBUNAL DID NOT REALLY TOUCH THE AFORES AID FACT FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AS RIGHTLY POINTED OUT BY T HE LEARNED COUNSEL. THE SUPREME COURT HAS ALREADY STATED AS TO WHAT SHOULD BE THE D UTY OF THE LEARNED TRIBUNAL TO DECIDE IN THIS SITUATION. IN THE SAID JUDGMENT NOTED BY US AT PAGE 464, THE SUPREME COURT HAS OBSERVED AS FOLLOWS: 'THE INCOME-TAX APPELLATE TRIBUNAL PERFORMS A JUDIC IAL FUNCTION UNDER THE INDIAN INCOME-TAX ACT; IT IS INVESTED WITH AUTHORIT Y TO DETERMINE FINALLY ALL QUESTIONS OF FACT. THE TRIBUNAL MUST, IN DECIDING A N APPEAL, CONSIDER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. ' 11. THE TRIBUNAL MUST, IN DECIDING AN APPEAL, CONSI DER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL CONTENTIONS RAI SED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. IT IS ALSO RULED IN THE SAID JUDGMENT AT PAGE 465 THAT IF THE TRIBUNAL DOES NOT DISCHARGE THE DUTY IN THE MANNER AS ABOVE THEN IT SHALL BE ASSUMED THE JUDGME NT OF THE TRIBUNAL SUFFERS FROM MANIFEST INFIRMITY. 12. TAKING INSPIRATION FROM THE SUPREME COURT OBSER VATIONS WE ARE CONSTRAINED TO HOLD IN THIS MATTER THAT THE TRIBUNAL HAS NOT ADJUDICATE D UPON THE CASE OF THE ASSESSEE IN THE LIGHT OF THE EVIDENCE AS FOUND BY THE COMMISSIONER OF INCOME-TAX (APPEALS). WE ALSO 16 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD FOUND NO SINGLE WORD HAS BEEN SPARED TO UP SET THE FACT FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT THERE ARE MATERIALS TO SH OW THE CASH CREDIT WAS RECEIVED FROM VARIOUS PERSONS AND SUPPLY AS AGAINST CASH CRE DIT ALSO MADE. 13. HENCE, THE JUDGMENT AND ORDER OF THE TRIBUNAL I S NOT SUSTAINABLE. ACCORDINGLY, THE SAME IS SET ASIDE. WE RESTORE THE JUDGMENT AND ORDE R OF THE COMMISSIONER OF INCOME- TAX (APPEALS). THE APPEAL IS ALLOWED. 22. WHEN A QUESTION AS TO THE CREDITWORTHINESS OF A CREDITOR IS TO BE ADJUDICATED AND IF THE CREDITOR IS AN INCOME TAX AS SESSEE, IT IS NOW WELL SETTLED BY THE DECISION OF THE CALCUTTA HIGH COURT THAT THE CREDITWORTHINESS OF THE CREDITOR CANNOT BE DISPUTED BY THE AO OF THE ASSESS EE BUT THE AO OF THE CREDITOR. IN THIS REGARDS OUR ATTENTION WAS DRAWN TO THE DECI SION OF THE HON'BLE HIGH COURT, CALCUTTA IN THE COMMISSIONER OF INCOME TAX, KOLKA T A-ILL VERSUS DATAWARE PRIVATE LIMITED ITAT NO. 263 OF 2011 DATE: 21ST SEPTEMBER, 2011 WHEREIN THE COURT HELD AS FOLLOWS: IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSI NG OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS AC COUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFT ER GETTING THE PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESS ED UNDER THE ACT, THE ASSESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CR EDITOR AS TO THE GENUINENESS' OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN A CCEPTED BY THE ASSESSING OFFICER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, T HE ASSESSING OFFICER HIMSELF COULD NOT ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMI TTED BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OFFICER OF THE ASSESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR A ND THE GENUINENESS' OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX (A PPEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH ARE REQU IRED TO BE FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIN D NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AU THORITIES. 23. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HON'BLE SUPREME COURT WHILE DISMISSING SLP IN THE CASE OF LOVELY EX PORTS AS HAS BEEN REPORTED AS JUDGMENT DELIVERED BY THE CTR AT 216 CTR 295: 'CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1961? WE FIND NO MERIT IN TH IS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY I S RECEIVED BY THE ASSESSEE- COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GI VEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPU GNED JUDGMENT. 17 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD 24. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT WHILE RELYING ON THE CASE OF LOVELY EXPORTS, IN THE APPEAL OF COMISSIONER OF INCOME TAX, KOLKATA-IV VS ROSEBERRY MERCANTILE (P) LTD., ITAT NO. 241 OF 2010 DATED 10- 01-2011 HAS HELD: 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTERED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTE D MONEY AND THE LD. CIT (A) OUGHT TO HAVE HELD THAT THE ASSESSEE HAD NOT ESTABL ISHED THE GENUINENESS OF THE TRANSACTION. ' IT APPEARS FROM THE RECORD THAT IN THE ASSESSMENT P ROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATIO N HAD BROUGHT RS. 4, 00, 000/- AND RS.20,00,000/- TOWARDS SHARE CAPITAL AND SHARE PREM IUM RESPECTIVELY AMOUNTING TO RS.24,00, 000/- FROM FOUR SHAREHOLDERS BEING PRIVAT E LIMITED COMPANIES. THE ASSESSING OFFICER ON HIS PART CALLED FOR THE DETAILS FROM THE ASSESSEE AND ALSO FROM THE SHARE APPLICANTS AND ANALYZED THE FACTS AND ULTIMATELY OB SERVED CERTAIN ABNORMAL FEATURES, WHICH WERE MENTIONED IN THE ASSESSMENT ORDER. THE A SSESSING OFFICER, THEREFORE, CONCLUDED THAT NATURE AND SOURCE OF SUCH MONEY WAS QUESTIONABLE AND EVIDENCE PRODUCED WAS UNSATISFACTORY. CONSEQUENTLY, THE ASSE SSING OFFICER INVOKED THE PROVISIONS UNDER SECTION 68/69 OF THE INCOME TAX AC T AND MADE ADDITION OF RS.24,00,000/-. ON APPEAL THE LEARNED CIT (A) BY FOLLOWING THE DECI SION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD., R EPORTED IN (2008) 216 CTR 195 ALLOWED THE APPEAL BY HOLDING -THAT SHARE CAPITAL/P REMIUM OF RS. 24,00,000/- RECEIVED FROM THE INVESTORS WAS NOT LIABLE TO BE TREATED UND ER SECTION 68 AS UNEXPLAINED CREDITS AND IT SHOULD NOT BE TAXED IN THE HANDS OF THE APPE LLANT COMPANY. AS INDICATED EARLIER, THE TRIBUNAL BELOW DISMISSED THE APPEAL FILED BY THE REVENUE. AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD. [SUPRA], WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT I NVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISION IN FAVOUR OF THE AS SESSEE AND THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APP EAL IS DEVOID OF ANY SUBSTANCE AND IS DISMISSED. 25. OUR ATTENTION WAS DRAWN TO THE DECISION OF THE HON'BLE HIGH COURT, CALCUTTA IN THE CASE OF COMMISSIONER OF INCOME TAX VS M/S. NISHAN INDO COMMERCE LTD DATED 2 DECEMBER, 2013 IN INCOME TAX A PPEAL NO.52 OF 2001 WHEREIN THE COURT HELD AS FOLLOWS: THE ASSESSING OFFICER WAS OF THE VIEW THAT THE INC REASE IN SHARE CAPITAL BY RS.52,03,500/- WAS NOTHING BUT THE INTRODUCTION OF THE ASSESSEE'S OWN UNDISCLOSED FUNDS/INCOME INTO THE BOOKS OF ACCOUNTS OF THE ASSE SSEE COMPANY. THE ASSESSING OFFICER ACCORDINGLY TREATED THE INVESTMENT AS UNEXPLAINED C REDIT UNDER SECTION 68 OF THE INCOME TAX ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 18 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFOR E THE COMMISSIONER OF INCOME TAX (APPEALS) BEING THE FIRST APPELLATE AUTHORITY AND C ONTENDED THAT THE ASSESSING OFFICER HAD NO MATERIAL TO SHOW THAT THE SHARE CAPITAL WAS THE INCOME OF THE ASSESSEE COMPANY AND AS SUCH THE ADDITION MADE BY THE ASSESSING OFFI CER UNDER SECTION 68 OF THE ACT WAS WRONG. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AF TER HEARING THE DEPARTMENT AND THE ASSESSEE COMPANY DELETED THE ADDITION OF RS. 52 , 03,500/- TO THE INCOME OF THE ASSESSEE COMPANY DURING THE ASSESSMENT YEAR IN QUES TION. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS FOUND THAT THERE WERE AS MANY AS 2155 ALLOTTEES, WHOSE NAMES, ADDRESSES AND RESPECTIVE SHARES ALLOCATION HAD BEEN DISCLOSED. THE COMMISSIONER OF INCOME TAX APPEALS, FURTHER FOU ND THAT THE ASSESSEE COMPANY RECEIVED THE APPLICATIONS THROUGH BANKERS TO THE IS SUE, WHO HAD BEEN APPOINTED UNDER THE GUIDELINES OF THE STOCK EXCHANGE AND THE ASSESS EE COMPANY HAD BEEN ALLOTTED SHARES ON THE BASIS OF ALLOTMENT APPROVED BY THE ST OCK EXCHANGE. THE ASSESSEE COMPANY HAD DULY FILED THE RETURN OF ALLOTMENT WITH THE REGISTRAR OF COMPANIES, GIVING COMPLETE PARTICULARS OF THE ALLOTTEES. THE COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT INQUIRES HAD CONFIRMED THE EXISTENCE OF MOST OF THE SHAREHOLDERS AT THE ADDRES SES INTIMATED TO THE ASSESSING OFFICER, BUT THE ASSESSING OFFICER TOOK THE VIEW TH AT THEIR INVESTMENT IN THE ASSESSEE COMPANY WAS NOT GENUINE, ON THE BASIS OF SOME EXTRA NEOUS REASONS. THE COMMISSIONER OF INCOME TAX (APPEALS) TOOK NOTE OF THE OBSERVATIO N OF THE ASSESSING OFFICER THAT ENQUIRY CONDUCTED BY THE INCOME TAX INSPECTOR HAD R EVEALED THAT NINE PERSONS MAKING APPLICATIONS FOR 900 SHARES WERE NOT AVAILABLE AT T HE GIVEN ADDRESS AND RIGHTLY CONCLUDED THAT THE TOTAL SHARE CAPITAL ISSUED BY TH E ASSESSEE COMPANY COULD NOT BE ADDED AS UNEXPLAINED CASH CREDIT UNDER 'SECTION 68 OF THE INCOME TAX ACT. MOREOVER, IF THE NATURE AND SOURCE OF INVESTMENT BY ANY SHAREHOL DER, IN SHARES OF THE ASSESSEE COMPANY REMAINED UNEXPLAINED, LIABILITY COULD NOT B E FOISTED ON THE COMPANY. THE CONCERNED SHAREHOLDERS WOULD HAVE TO EXPLAIN THE SO URCE OF THEIR FUND. THE LEARNED COMMISSIONER ON CONSIDERING THE SUBMISS IONS OF THE, RESPECTIVE PARTIES AND CONSIDERING THE MATERIALS, FOUND THAT THE ASSES SING OFFICER HAD APPLIED THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT ARBI TRARILY AND ILLEGALLY AND IN ANY CASE WITHOUT GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF REPRESENTATION AND/OR HEARING. LEARNED TRIBUNAL AGREED WITH THE FACTUAL FINDINGS O F THE LEARNED COMMISSIONER AND ACCORDINGLY THE LEARNED TRIBUNAL DISMISSED THE APPE AL OF THE REVENUE AND AFFIRMED THE DECISION OF THE LEARNED COMMISSIONER. MR. DUTTA APPEARING ON BEHALF OF THE PETITIONERS CI TED JUDGMENT OF THE DIVISION BENCH OF THIS COURT IN COMMISSIONER OF INCOME TAX VS. RUB Y TRADERS AND EXPORTERS LIMITED REPORTED IN 236 (2003) ITR 3000 WHERE A DIVISION BE NCH OF THIS COURT HELD THAT WHEN SECTION 68 IS RESORTED TO, IT IS INCUMBENT ON THE A SSESSEE COMPANY TO PROVE AND ESTABLISH THE IDENTITY OF THE SUBSCRIBERS, THEIR CR EDIT WORTHINESS AND THE GENUINENESS OF THE TRANSACTION. THE AFORESAID JUDGMENT WAS RENDERED IN THE CONTEXT OF THE FACTUAL BACKGROUND OF THE AFORESAID CASE WHERE, DESPITE SEVERAL OPPORTUNITIES BEING GIVEN TO THE ASSESSEE, NOTHING WAS DISCLOSED ABOUT THE IDENTITY OF THE SHAREHOLDER S. IN THE INSTANT CASE, THE ASSESSEE DISCLOSED THE IDENTITY AND ADDRESS AND PARTICULARS OF SHARE ALLOCATION OF THE SHAREHOLDERS. IT WAS ALSO FOUND ON THE FACTS THAT A LL THE SHAREHOLDERS WERE IN EXISTENCE. ONLY NINE SHAREHOLDERS SUBSCRIBING TO ABOUT 900 SHA RES OUT OF 6, 12,000 SHARES WERE NOT FOUND AVAILABLE AT THEIR ADDRESSES, AND THAT TO O, IN COURSE OF ASSESSMENT PROCEEDINGS IN THE YEAR 1994, I.E., ALMOST 3 YEARS AFTER THE ALLOTMENT. 19 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD BY AN ORDER DATED 2ND MAY, 2001, THIS COURT ADMITTE D THE APPEAL ON THREE QUESTIONS WHICH ESSENTIALLY CENTRE AROUND THE QUESTION OF WHE THER THE APPELLATE COMMISSIONER ERRED IN LAW IN DELETING THE ADDITION OF RS. 52, 03 , 500/- TO THE INCOME OF THE ASSESSEE AS MADE BY THE ASSESSING OFFICER. WE ARE OF THE VIEW T HAT THERE IS NO QUESTION OF LAW INVOLVED IN THIS APPEAL FAR LESS ANY SUBSTANTIAL QU ESTION OF LAW. THE LEARNED TRIBUNAL HAS CONCURRED WITH THE LEARNED COMMISSIONER ON FACTS AND FOUND THAT THERE WERE MATERIALS TO SHOW THAT THE ASSESSEE HAD DISCLOSED THE PARTICULARS OF THE SHAREHOLDERS. THE FACTUAL FINDINGS CANNOT BE INTERF ERED WITH, IN APPEAL. WE ARE OF THE VIEW THAT ONCE THE IDENTITY AND OTHER RELEVANT PART ICULARS OF SHAREHOLDERS ARE DISCLOSED, IT IS FOR THOSE SHAREHOLDERS TO EXPLAIN THE SOURCE OF THEIR FUNDS AND NOT FOR THE ASSESSEE COMPANY TO SHOW WHEREFROM THESE SHAREHOLDERS OBTAIN ED FUNDS. 26. FURTHER, OUR ATTENTION WAS DRAWN TO THE DECISI ON OF THE HON'BLE HIGH COURT, CALCUTTA IN THE CASE OF COMMISSIONER OF INCO ME TAX VS M/S. LEONARD COMMERCIAL (P) LTD ON 13 JUNE, 2011 IN ITAT NO 114 OF 2011 WHEREIN THE COURT HELD AS FOLLOWS: THE ONLY QUESTION RAISED IN THIS APPEAL IS WHETHER THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL BELOW ERRED IN LAW IN DE LETING THE ADDITION OF RS.8,52,000/-, RS. 91,50,000/- AND RS. 13,00,000/- MADE BY THE ASS ESSING OFFICER ON ACCOUNT OF SHARE CAPITAL, SHARE APPLICATION MONEY AND INVESTMENT IN HTCCL RESPECTIVELY. AFTER HEARING MD. NIZAMUDDIN, LEARNED ADVOCATE APPE ARING ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE MATERIALS ON RECORD, WE FIND THAT ALL SUCH APPLICATION MONEY WERE RECEIVED BY THE ASSESSEE BY WAY OF ACCOU NT PAYEE CHEQUES AND THE ASSESSEE ALSO DISCLOSED THE COMPLETE LIST OF SHAREHOLDERS WI TH THEIR COMPLETE ADDRESSES AND GIR NUMBERS FOR THE RELEVANT ASSESSMENT YEARS IN WHICH SHARE APPLICATION WAS CONTRIBUTED. IT FURTHER APPEARS THAT ALL THE PAYMENTS WERE MADE BY THE APPLICANTS BY ACCOUNT PAYEE CHEQUES. IT APPEARS FROM THE ASSESSING OFFICERS ORDER THAT H IS GRIEVANCE WAS THAT THE ASSESSEE WAS NOT WILLING TO PRODUCE THE PARTIES WHO HAD ALLE GEDLY ADVANCED THE FUND. IN OUR OPINION, BOTH THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL BELOW WERE JUSTIFIED IN HOLDING THAT AFTER DISCLOSURE OF THE FULL PARTICULARS INDICATED ABOVE, THE INITIAL ONUS OF THE ASSESSEE WAS SHIFTED AND IT WAS THE DUTY OF THE ASSESSING OFFICER TO ENQUIRE WHETHER THOSE PARTICULARS WERE CORRECT OR N OT AND IF THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PARTICULARS SUPPLIED WERE INSU FFICIENT TO DETECT THE REAL SHARE APPLICANTS, TO ASK FOR FURTHER PARTICULARS. THE ASSESSING OFFICER HAS NOT ADOPTED EITHER OF THE AFORESAID COURSES BUT HAS SIMPLY BLAMED THE ASSESSEE FOR NOT PRODUCING THOSE SHARE A PPLICANTS. IN OUR VIEW, IN THE CASE BEFORE US SO LONG THE ASSE SSING OFFICER WAS UNABLE TO ARRIVE AT A FINDING THAT THE PARTICULARS GIVEN BY THE ASSESSE E WERE FALSE, THERE WAS NO SCOPE OF ADDING THOSE MONEY UNDER SECTION 68 OF THE INCOME- TAX ACT AND THE TRIBUNAL BELOW RIGHTLY HELD THAT THE ONUS WAS VALIDLY DISCHARGED. WE, THUS, FIND THAT BOTH THE AUTHORITIES BELOW, ON CONSIDERATION OF THE MATERIALS ON RECORD, RIGHTLY APPLIED THE CORRECT LAW WHICH ARE R EQUIRED TO BE APPLIED IN THE FACTS OF THE PRESENT CASE AND, THUS, WE DO NOT FIND ANY REAS ON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT BASED ON MATERIALS ON RECORD. 20 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD THE APPEAL IS, THUS, DEVOID OF ANY SUBSTANCE AND IS DISMISSED SUMMARILY AS IT DOES NOT INVOLVE ANY SUBSTANTIAL QUESTION OF LAW. 27. IN THE LIGHT OF THE AFORESAID DECISIONS OF THE HONBLE APEX AND JURISDICTION HIGH COURT AND OTHER HIGH COURTS WE HAVE EXAMINED T HE PRESENT CASE IN HAND OF EACH SHARE SUBSCRIBERS TOTALING NINE (9). THE RELE VANT FACTS IN RESPECT OF EACH SHARE SUBSCRIBERS HAS THROWN LIGHT AS TO THE IDENTI TY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE SUBSCRIBERS, WHICH WE HAVE DISCUSSED AT PARA 6 (A) TO (I) SUPRA. 28. FROM THE DETAILS AS AFORESAID WHICH EMERGES FRO M THE PAPER BOOK FILED BEFORE US AS WELL AS BEFORE THE LOWER AUTHORITIES, IT IS VIVID THAT ALL THE SHARE APPLICANTS ARE (I) INCOME TAX ASSESSEES, (II) THEY ARE FILING THEIR RETURN OF INCOME, (III) THE SHARE APPLICATION FORM AND ALLOTMENT LETT ER IS AVAILABLE ON RECORD, (IV) THE DETAILS OF THE BANK ACCOUNTS BELONGING TO THE SHARE APPLICANTS AND THEIR BANK STATEMENTS, (VI) THE APPLICANTS ARE HAVING CREDITWO RTHINESS WHICH IS REPRESENTED BY A CAPITAL AS NOTED ABOVE. 29. AS NOTED FROM THE JUDICIAL PRECEDENTS CITED ABO VE, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE THEN THERE IS A DUTY CASTED UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CREDIT FOUND IN HIS BOOKS. IN THE INSTANT CASE, THE CREDIT IS IN THE FORM OF RECEIPT OF SHARE CAPIT AL WITH PREMIUM FROM SHARE APPLICANTS. THE NATURE OF RECEIPT TOWARDS SHARE CAP ITAL IS SEEN FROM THE ENTRIES PASSED IN THE RESPECTIVE BALANCE SHEETS OF THE COMP ANIES AS SHARE CAPITAL AND INVESTMENTS. IN RESPECT OF SOURCE OF CREDIT, THE A SSESSEE HAS TO PROVE THE THREE NECESSARY INGREDIENTS I.E. IDENTITY OF SHARE APPLIC ANTS, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF SHARE APPLICANTS. FOR PROVI NG THE IDENTITY OF SHARE APPLICANTS, THE ASSESSEE FURNISHED THE NAME, ADDRES S, PAN OF SHARE APPLICANTS TOGETHER WITH THE COPIES OF BALANCE SHEETS AND INCO ME TAX RETURNS. WITH REGARD TO THE CREDITWORTHINESS OF SHARE APPLICANTS, AS WE NOTED SUPRA, THESE COMPANIES ARE HAVING CAPITAL IN SEVERAL CRORES OF RUPEES AND THE INVESTMENT MADE IN THE APPELLANT COMPANY IS ONLY A SMALL PART OF THEIR CAP ITAL. THESE TRANSACTIONS ARE ALSO DULY REFLECTED IN THE BALANCE SHEETS OF THE SH ARE APPLICANTS, SO CREDITWORTHINESS IS PROVED. EVEN IF THERE WAS ANY D OUBT IF ANY REGARDING THE 21 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD CREDITWORTHINESS OF THE SHARE APPLICANTS WAS STILL SUBSISTING, THEN AO SHOULD HAVE MADE ENQUIRIES FROM THE AO OF THE SHARE SUBSCRIBERS AS HELD BY HONBLE JURISDICTIONAL HIGH COURT IN CIT VS DATAWARE (SUPRA ) WHICH HAS NOT BEEN DONE, SO NO ADVERSE VIEW COULD HAVE BEEN DRAWN. THI RD INGREDIENT IS GENUINENESS OF THE TRANSACTIONS, FOR WHICH WE NOTE THAT THE MON IES HAVE BEEN DIRECTLY PAID TO THE ASSESSEE COMPANY BY ACCOUNT PAYEE CHEQUES OUT O F SUFFICIENT BANK BALANCES AVAILABLE IN THEIR BANK ACCOUNTS ON BEHALF OF THE S HARE APPLICANTS. IT WILL BE EVIDENT FROM THE PAPER BOOK THAT THE APPELLANT HAS EVEN DEMONSTRATED THE SOURCE OF MONEY DEPOSITED INTO THEIR BANK ACCOUNTS WHICH I N TURN HAS BEEN USED BY THEM TO SUBSCRIBE TO THE ASSESSEE COMPANY AS SHARE APPLI CATION. HENCE THE SOURCE OF SOURCE OF SOURCE IS PROVED BY THE ASSESSEE IN THE I NSTANT CASE THOUGH THE SAME IS NOT REQUIRED TO BE DONE BY THE ASSESSEE AS PER LAW AS IT STOOD/ APPLICABLE IN THIS ASSESSMENT YEAR. THE SHARE APPLICANTS HAVE CONFIRME D THE SHARE APPLICATION IN RESPONSE TO THE NOTICE U/S 133(6) OF THE ACT AND HA VE ALSO CONFIRMED THE PAYMENTS WHICH ARE DULY CORROBORATED WITH THEIR RES PECTIVE BANK STATEMENTS AND ALL THE PAYMENTS ARE BY ACCOUNT PAYEE CHEQUES. 30. WE ALSO NOTE THAT RECENTLY THE ITAT KOLKATA IN SEVERAL CASES HAS DELETED THE ADDITION ON ACCOUNT OF SHARE APPLICATION IN SIM ILAR CIRCUMSTANCES. THE RELEVANT PORTION OF THE DECISIONS ARE AS FOLLOWS: (A) THE LD ITAT KOLKATA. IN DC IT VS GLOBAL MERCANT ILES PVT.LTD IN ITA NO. 1669/KOL/2009 DATED 13-01-2016. IN THIS THE DECISIO N THE LD. TRIBUNAL HELD AS FOLLOWS: 3.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BOOK FILED B Y THE ASSESSEE. THE FACTS STATED HEREINABOVE REMAIN UNDISPUTED ARE NOT REITER ATED HEREIN FOR THE SAKE OF BREVITY. WE FIND THAT THE ASSESSEE HAD GIVEN THE CO MPLETE DETAILS ABOUT THE SHARE APPLICANTS CLEARLY ESTABLISHING THEIR IDENTIT Y, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION PROVED BEYOND DOUBT AND HAD DULY DISCHARGED ITS ONUS IN FULL. NOTHING PREVENTED THE LEARNED AO TO M AKE ENQUIRIES FROM THE ASSESSING OFFICERS OF THE CONCERNED SHARE APPLICANT S FOR WHICH EVERY DETAILS WERE VERY MUCH MADE AVAILABLE TO HIM BY THE ASSESSE E. WE FIND THAT THE RELIANCE PLACED BY THE LEARNED LD. CIT(1) ON THE DE CISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS LOVELY EXPORTS (P) UD R EPORTED IN (2008) 216 CTR 195 (SC) IS VERY WELL FOUNDED, WHEREIN, IT HAS BEEN VERY CLEARLY HELD THAT THE ONLY OBLIGATION OF THE COMPANY RECEIVING THE SHARE APPLICATION MONEY IS TO PROVE THE EXISTENCE OF THE SHAREHOLDERS AND FOR WHI CH THE ASSESSEE HAD DISCHARGED THE ONUS OF PROVING THEIR EXISTENCE AND ALSO THE SOURCE OF SHARE APPLICATION MONEY RECEIVED. 22 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD 3.4. 1. WE ALSO FIND THAT THE IMPUGNED ISSUE IS ALS O COVERED BY THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS R OSEBERRY MERCANTILE (P) LTD IN GA NO. 3296 OF 2010 ITAT NO. 241 OF 2010 DAT ED 10.1.2011, WHEREIN THE- QUESTIONS RAISED BEFORE THEIR LORDSHIPS AND DE CISION RENDERED THEREON IS AS UNDER:- 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTERED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY IN TO WHITE MONEY OR ACCOUNTED MONEY AND THE LD. CIT(A) OUGHT TO HAVE HE LD THAT THE ASSESSEE HAD NOT ESTABLISHED THE GENUINENESS OF THE TRANSACTION. ' IT A NO. 1669/KOI/2009-C-AM M/S. GLOBAL MERCANTILES PVT. LTD 11 HELD AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND A FTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CASES OF CIT V S M/S LOVELV EXPORTS PVT LTD, WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISION IN FA VOUR OF THE ASSESSEE AND THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEAL IS DEVOID OF ANY SUBSTANCE AND IS DISMISSED. 3.4.2. IN VIEW OF THE AFORESAID FINDINGS AND RESPEC TFULLY FOLLOWING THE DECISION OF THE APEX COURT (SUPRA) AND JURISDICTIONAL HIGH C OURT (SUPRA) , WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND AC CORDINGLY, THE GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 4. THE LAST GROUND TO BE DECIDED IN THIS APPEAL OF THE REVENUE IS AS TO WHETHER THE LEARNED CIT(A) IS JUSTIFIED IN DELETING THE ADD ITION U/S 68 OF THE ACT MADE IN RESPECT OF ALLOTMENT OF SHARES TO 20 INDIVIDUALS FO R AN AMOUNT OF RS.57,00,000/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. 1. THE BRIEF FACT OF THIS ISSUE IS THAT THE ASSE SSEE HAD RECEIVED SHARE APPLICATION MONIES FROM 20 INDIVIDUALS IN THE EARLI ER YEAR WHICH WERE KEPT IN SHARE APPLICATION MONEY ACCOUNT. DURING THE ASST YE AR UNDER APPEAL, THE ASSESSEE ALLOTTED SHARES TO THESE 20 INDIVIDUALS OU T OF TRANSFERRING THE MONIES FROM SHARE APPLICATION MONEY ACCOUNT TO SHARE CAPIT AL ACCOUNT. THE DETAILS OF 20 INDIVIDUALS ARE REFLECTED IN PAGE 6 & 7 OF THE L EARNED CIT(A) ORDER. THE LEARNED AO ASKED THE ASSESSEE TO PRODUCE THE SHAREH OLDERS BEFORE HIM. HE FOUND THAT THE ASSESSEE DID NOT DO SO BUT FURNISHED COPIES OF PAY ORDERS USED FOR PAYMENTS TO THE ASSESSEE COMPANY AND ALSO FURNISHED INCOME TAX PARTICULARS AND BALANCE SHEETS OF ALL THE SHAREHOLDERS. THE LEA RNED AO ON ANALYZING ALL THE BALANCE SHEETS OBSERVED THAT THE SHAREHOLDERS H AVE PALTRY INCOME AND SMALL SAVINGS AND NONE OF THEM HAVE ANY BANK ACCOUNT AND HUGE CASH BALANCES WERE SHOWN IN THEIR HANDS OUT OF WHICH PAY ORDERS WERE O BTAINED. BASED ON THIS, THE LEARNED AO CONCLUDED THAT THESE SHAREHOLDERS DO NOT HAVE CREDITWORTHINESS TO INVEST IN THE ASSESSEE COMPANY AND BROUGHT THE ENTI RE SUM OF RS. 57,00,000/- TO TAX AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4.2. ON FIRST APPEAL, THE LEARNED CIT(A) OBSERVED T HAT ENTIRE SHARE APPLICATION MONIES OF RS. 57,00,000/- WE RECEIVED DURING THE PR EVIOUS YEAR 2004-05 RELEVANT TO ASST YEAR 2005-06 FROM 20 PERSONS AND T HE SHARES WERE ALLOTTED TO THEM DURING THE ASST YEAR UNDER APPEAL. HE OBSERVED THAT THE ASSESSEE HAD FURNISHED DETAILS OF THE SHARE APPLICANTS GIVING TH E DATE WISE RECEIPTS, MODE OF PAYMENT, AMOUNT, NAME, ADDRESS, INCOME TAX RETURNS, PA NO. OF SHARE APPLICANTS ALONG WITH THEIR BALANCE SHEET. THE LEAR NED CITA ALSO OBSERVED THAT THE ASSESSEE IN ITS REPLY TO SHOW CAUSE NOTICE BEFO RE THE LEARNED AO HAD REQUESTED HIM TO USE HIS POWER AND AUTHORITY FOR TH E PHYSICAL APPEARANCE OF THE 23 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD SHAREHOLDERS WHICH WAS NOT EXERCISED BY THE LEARNED AO. INSTEAD THE LEARNED AO CONTINUED TO INSIST ON THE ASSESSEE TO PRODUCE T HE SHAREHOLDERS BEFORE HIM. HE ULTIMATELY CONCLUDED THAT THE ASSESSEE HAD DULY DISCHARGED ITS ONUS OF PROVIDING COMPLETE DETAILS OF THE SHAREHOLDERS AND IN ANY CASE, NO ADDITION COULD BE MADE U/S 68 OF THE ACT IN THE ASST YEAR UN DER APPEAL AS NO SHARE APPLICATION MONIES WERE RECEIVED DURING THE ASST YE AR UNDER APPEAL. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US BY FILING THE FO LLOWING GROUND:- 'THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE U/S 68 IN RESPE CT OF THE ALLOTMENT OF SHARES TO 20 NUMBERS OF INDIVIDUAL INVESTORS FOR AN AMOUNT OF RS. 57 LAKHS, WHERE GENUINENESS OF THE TRANSACTIONS AND CR EDITWORTHINESS OF THE INVESTORS WERE NOT ESTABLISHED. 4.3. THE LEARNED DR PRAYED FOR ADMISSION OF THE ADD ITIONAL GROUND RAISED BEFORE US AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR FAIRLY CONCEDED TO ADMISSIO N OF THIS ADDITIONAL GROUND AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED C IT(A). 4.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BOOK FILED B Y THE ASSESSEE. WE FIND THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE SEPARA TELY BEFORE US VIDE ITS COVERING LETTER DATED 9. 12.2011 IS ADMITTED AS IT APPEARS TO BE A GENUINE AND BONAFIDE ERROR OF OMISSION ON THE PART OF THE REVEN UE FROM NOT RAISING THIS GROUND IN THE ORIGINAL GROUNDS OF APPEAL FILED ALON G WITH THE MEMORANDUM OF APPEAL. MOREOVER, IT DOES NOT REQUIRE ANY FRESH EXA MINATION OF FACTS. HENCE THE SAME IS ADMITTED HEREIN FOR THE SAKE OF ADJUDICATIO N. 4.4. 1. WE FIND FROM THE DETAILS AVAILABLE ON RECOR D THAT THE SHARE APPLICATION MONIES FROM 20 INDIVIDUALS IN THE SUM OF RS.57,00,0 00/- HAS BEEN RECEIVED BY THE ASSESSEE DURING THE FINANCIAL YEAR 2004-05 RELE VANT TO ASST YEAR 2005-06 AND ONLY THE SHARES WERE ALLOTTED TO THEM DURING TH E ASST YEAR UNDER APPEAL. ADMITTEDLY NO MONIES WERE RECEIVED DURING THE ASST YEAR UNDER APPEAL AND HENCE THERE IS NO SCOPE FOR INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. HENCE WE HOLD THAT THE ORDER PASSED BY THE LEARNED CITA IN THIS REGARD DOES NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY THE GROUN D NO. 3 RAISED BY THE REVENUE IS DISMISSED. (B) THE ITAT KOLKATA IN R.B HORTICULTURE & ANIMAL PROJECTS CO. LTD, ITA NO. 632/KOLL2011 DATED 13-01-2016. IN THIS THE DECISION THE LD. TRIBUNAL HELD AS FOLLOWS: 6. WE HAVE HEARD THE LEARNED DR AND WHEN THE CASE WAS CALLED ON FOR HEARING , NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, WE FIND FROM THE FILE THAT THE ASSESSEE HAD FILED A DETAILED PAPER BOOK AND WRITTEN SUBMISS IONS. HENCE THE CASE IS DISPOSED OFF BASED ON THE ARGUMENTS OF THE LEARNED DR AND WRITTE N SUBMISSIONS AND PAPER BOOK ALREADY AVAILABLE ON RECORD. THE FACTS STATED IN TH E LEARNED CIT(A) WERE NOT CONTROVERTED BY THE LEARNED DR BEFORE US. WE FIND T HAT THE ASSESSEE HAD GIVEN THE COMPLETE DETAILS ABOUT THE SHARE APPLICANTS CLEARLY ESTABLISHING THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION PRO VED BEYOND DOUBT AND HAD DULY DISCHARGED ITS ONUS IN FULL. NOTHING PREVENTED THE LEARNED AO TO MAKE ENQUIRIES FROM THE ASSESSING OFFICERS OF THE CONCERNED SHARE APPLI CANTS FOR WHICH EVERY DETAILS WERE VERY MUCH MADE AVAILABLE TO HIM BY THE ASSESSEE. WE FIND THAT THE RELIANCE PLACED BY THE LEARNED CITA ON THE DECISION OF THE HON'BLE APE X COURT IN THE CASE OF CIT VS 24 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD LOVELV EXPORTS (P) LTD REPORTED IN (2008) 216 CTR 1 95 (SC) IS VERY WELL FOUNDED, WHEREIN, IT HAS BEEN VERY CLEARLY HELD THAT THE ONL Y OBLIGATION OF THE COMPANY RECEIVING THE SHARE APPLICATION MONEY IS TO PROVE THE EXISTEN CE OF THE SHAREHOLDERS AND FOR WHICH THE ASSESSEE HAD DISCHARGED THE ONUS OF PROVING THE IR EXISTENCE AND ALSO THE SOURCE OF SHARE APPLICATION MONEY RECEIVED. 6. 1. WE ALSO FIND THAT THE IMPUGNED ISSUE IS ALSO COVERED BY THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS ROSEBERRV MERCANTILE (P) LTD IN GA NO. 3296 OF 2010 ITAT NO. 241 OF 2010 DATED 10.1.2011, WHERE IN THE QUESTIONS RAISED BEFORE THEIR LORDSHIPS AND DECISION RENDERED THEREON IS AS UNDER:- - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTE RED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONE Y OR ACCOUNTED MONEY AND THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE ASSE SSEE HAD NOT ESTABLISHED THE GENUINENESS OF THE TRANSACTION.' HELD AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF T HE SUPREME COURT IN THE CASES OF CIT VS M/S LOVELY EXPORTS PVT LTD, WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COV ERED BY THE SAID SUPREME COURT DECISION IN FAVOUR OF THE ASSESSEE AND THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEAL IS DEVOID OF ANY SUBSTANCE AND IS DISMISSED. 6.2. WE FIND THAT THE ISSUE IS ALSO COVERED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS VALUE CAPITAL SERVICES P LTD REPORTED IN (2008) 307 ITR 334 (DEL) , WHEREIN IT WAS HELD THAT: 'IN RESPECT OF AMOUNTS SHOWN AS RECEIVED BY THE ASS ESSEE TOWARDS SHARE APPLICATION MONEY FROM 33 PERSONS, THE ASSESSING OF FICER REQUIRED THE ASSESSEE TO PRODUCE ALL THESE PERSONS. WHILE ACCEPTING THE E XPLANATION AND ITA NO. 632/KOI12011--C-AM M/S. R.B HORTICULTURE 6 & ANIMAL PROJ. CO. LTD THE STATEMENTS GIVEN BY THREE PERSONS THE ASSESSING OFF ICER FOUND THAT THE RESPONSE FROM THE OTHERS WAS EITHER NOT AVAILABLE OR WAS INA DEQUATE AND ADDED AN AMOUNT OF RS. 46 LAKHS PERTAINING TO 30 PERSONS TO THE INCOME OF THE ASSESSEE. THE COMMISSIONER (APPEALS) UPHELD THE DECISION OF T HE ASSESSING OFFICER. ON APPEAL, THE TRIBUNAL SET ASIDE THE ORDER OF THE COM MISSIONER (APPEALS) AND DELETED THE ADDITIONS. ON FURTHER APPEAL: HELD, DISMISSING THE APPEAL, THAT THE ADDITIONAL BU RDEN WAS ON THE DEPARTMENT TO SHOW THAT EVEN IF THE SHARE APPLICANTS DID NOT H AVE THE MEANS TO MAKE THE INVESTMENT, THE INVESTMENT MADE BY THEM ACTUALLY EM ANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS TH E UNDISCLOSED INCOME OF THE ASSESSEE. NO SUBSTANTIAL QUESTION OF LAW AROSE. ' 6.3. WE FIND THAT THE ARGUMENT OF THE LEARNED DR TO SET ASIDE THIS ISSUE TO THE FILE OF THE LEARNED AO FOR VERIFICATION OF SHARE SUBSCRIBERS WO ULD NOT SERVE ANY PURPOSE AS THE RATIO DECIDED IN THE ABOVE CASES IS THAT IN ANY CAS E, NO ADDITION COULD BE MADE IN THE HANDS OF THE RECIPIENT ASSESSEE. IN VIEW OF THE AFO RESAID FINDINGS AND RESPECTFULLY FOLLOWING THE DECISION OF THE APEX COURT (SUPRA), J URISDICTIONAL HIGH COURT (SUPRA) AND DELHI HIGH COURT (SUPRA) , WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 25 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD (C) THE LD. ITAT KOLKATA IN ITA NO.1061/KO1/2012 I N THE CASE OF ITO WD.3(2) KOL, VS. M/S. STEEL EMPORIUM LTD DATED 05-0 2-2016. IN THIS THE DECISION THE LD. TRIBUNAL HELD AS FOLLOWS: 10. WE HAVE HEARD BOTH THE RIVAL PARTIES AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER O F THE AO. BEFORE US THE LD. AR SUBMITTED THAT THE ASSESSEE RAISED SHARE APPLICATIO N MONEY DURING THE YEAR FROM 25 APPLICANTS. THE AO WAS FURNISHED WITH THE COPY OF F ORM 2 OF ALLOTMENT OF SHARES TO THE APPLICANTS AS FILED WITH THE REGISTRAR OF COMPANIES , WEST BENGAL. ON THE DATE OF RECEIPT OF SHARE APPLICATIONS FROM THE APPLICANTS, THEY FURNISHED THEIR ADDRESSES, WHICH WERE RECORDED IN THE REGISTER OF MEMBERS. THE AO OB SERVED THAT AS PER ROC RECORDS THE ADDRESSES OF THE NINE COMPANIES WERE DIFFERENT FROM THE ADDRESS AS PER FORM FILED WITH HIM. THE AO ISSUED NOTICES U/S.133(6) TO ALL T HE COMPANIES AT THE ADDRESSES FURNISHED IN FORM 2 AS FILED WITH HIM, WHICH WERE D ULY SERVED AT THE GIVEN ADDRESSES. THE A0 ARGUED THAT THE LETTERS SHOULD NOT HAVE BEEN SERVED AT THE GIVEN ADDRESS BY THE ASSESSEE. HE SERVED A SHOW A CAUSE NOTICE DATED 09. 12.2011 ASKING FOR THE EXPLANATION FROM THE ASSESSEE AS TO HOW THE NOTICES U/S. 133(6) COULD BE SERVED TO THESE NINE COMPANIES WHO HAD DIFFERENT ADDRESS AS PER ROC RECO RDS. THE AO WAS EXPLAINED VIDE LETTER DATED 20.12.2011 OF THE ASSESSEE THAT THOSE COMPANIES HAD CHANGED THEIR ADDRESSES SINCE FILING OF FORM 2 WITH THE REGISTRAR . FURTHER, IT WAS NONE OF THE BUSINESS OF THE ASSESSEE TO QUESTION THE ADDRESSES OF THE AP PLICANTS AS LONG AS THEY AFFIRM THE ADDRESS. THE APPLICANTS WERE DULY INCORPORATED BODI ES UNDER THE COMPANIES ACT. 1956 SINCE LONG. THEY HAVE BEEN REGULARLY FILING THEIR R ETURNS OF INCOME UNDER THE INCOME TAX ACT AND ARE BEING ASSESSED BY THE REVENUE SINCE LONG. SOME OF THEM ARE EVEN REGISTERED AS NON-BANKING FINANCIAL COMPANIES WITH RESERVE BANK OF INDIA. THEY HAVE BEEN FILING RETURNS REGULARLY WITH REGISTRAR O F COMPANIES AND RBI SINCE LONG. THE LETTERS MIGHT HAVE BEEN RECEIVED AT THEIR OLD ADDRE SSES BECAUSE IN CASE OF CHANGE IN THE ADDRESS, PEOPLE INSTRUCT THE INCUMBENTS AT OLD ADDR ESSES NOT TO REFUSE THE RECEIPT OF LETTERS AND RECEIVE THE SAME. JUST BECAUSE, A LETTE R WAS RECEIVED AT THE OLD ADDRESS INSTEAD OF PRESENT ADDRESS, IT CANNOT BE SAID THAT THE IDENTITY OF THE APPLICANT HAS NOT BEEN VERIFIED. ALL OF THESE COMPANIES HAD DULY REPL IED TO NOTICE U/S. 133(6) AND CONFIRMED THE TRANSACTION WITH ALL THE EVIDENCES. T HE AO HAS NOT RAISED ANY OBJECTION ON ANY OF THE INFORMATION FURNISHED BEFORE HIM. THE AO HAS NOT ASKED THE RESPECTIVE COMPANY APPLICANTS ALSO TO EXPLAIN THE ALLEGED DISC REPANCY IN THE ADDRESS. THE AO HAS NOT BROUGHT ANY MATERIAL ON ACCOUNT OF RECORD TO DI SBELIEF THE EVIDENCES FURNISHED WITH HIM AND TREAT THE TRANSACTION AS NOT GENUINE. THE A SSESSEE SUBMITTED THE FOLLOWING MATERIAL AT THE TIME OF ASSESSMENT. A) COPY OF SHARE APPLICATIONS FROM THE SHARE APPLIC ANTS (COPIES ENCLOSED) B) COPY OF FORM 2 FILED WITH REGISTRAR OF COMPANIES , WEST BENGAL (COPY ENCLOSED) C) COPY OF FORM 18 ABOUT THE REGISTERED OFFICE OF T HE APPLICANTS FOR CHANGE OF ADDRESS SUBSEQUENT TO THE DATE OF ALLOTMENT, I.E. 31.03.200 9 (COPIES ENCLOSED) D) MEMBERS REGISTER E) SHARE APPLICATION & ALLOTMENT REGISTER F) COPY OF BOARD RESOLUTION. G) REPLIES FROM SHARE APPLICANTS TO THE NOTICE U/S. 133(6) ISSUED TO THEM BY THE AO SEEKING INFORMATION AND DOCUMENTS ABOUT THE SOURCE S AND TO EXAMINE THEIR IDENTITY, GENUINENESS OF THE TRANSACTION AND THEIR CREDITWORT HINESS. (COPY ENCLOSED). 26 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD H) COPY OF AUDITED ACCOUNTS. I) COPY OF BANK STATEMENTS. J) COPY OF INCOME TAX ACKNOWLEDGMENT OF RETURN FILE D FOR AY 2009- K) COPY OF PAN CARD. L) DETAILS OF SOURCES OF FUNDS. M) COPY OF COVERING LETTER FOR DELIVERY OF SHARES. N) COPY OF MASTER DATA AS PER MINISTRY OF COMPANY A FFAIRS RECORDS. O) COPY OF ANNUAL RETURN. P) COPY OF MEMORANDUM AND ARTICLES OF ASSOCIATION. FINALLY THE LD. AR RELIED ON THE ORDER OF THE LD. C IT(A 10. 1 FROM THE AFORESAID DISCUSSION WE FIND THAT THE AO HAS MADE THE ADDITIO N OF THE SHARE APPLICATION MONEY BECAUSE ALL THE NINE COMPANIES WERE HAVING THE COMM ON ADDRESS AND THE NOTICE SENT UNDER SECTION 133(6) WAS RECEIVED BY THE SINGLE PER SON. ACCORDINGLY THE AO OPINED THAT THE ASSESSEE HAS USED ITS UNACCOUNTED MONEY IN THE SHARE APPLICATION TRANSACTIONS. HOWEVER WE FIND THAT ALL THE MONEY RECEIVED IN THE FORM OF SHARE CAPITAL IS DULY SUPPORTED WITH THE REQUISITE DOCUMENT AS DISCUSSED ABOVE. TO OUR MIND THE BASIS ON WHICH THE ADDITION WAS MADE BY THE AO IS NOT TENABL E. THE LD. DR ALSO COULD NOT BROUGHT ANYTHING ON RECORD TO CONTROVERT THE FINDIN GS OF THE LD. CIT(A). IN VIEW OF ABOVE WE FIND NO REASON TO INTERFERE IN THE ORDER O F THE ID. CIT(A). ACCORDINGLY THE GROUND RAISED BY REVENUE IS DISMISSED. (D) THE LD ITAT KOLKATA IN ITO VS CYGNUS DEVELOPERS (I) P LTD IN ITA NO. 282/KOL/2012 DATED 2.3.2016. IN THIS THE DECISION T HE LD. TRIBUNAL HELD AS FOLLOWS: 6. ON APPEAL BY THE ASSESSEE THE CIT(A) DELETED TH E ADDITION MADE BY THE AO OBSERVING AS FOLLOWS '6) I HAVE CONSIDERED THE SUBMISSION OF THE APPELLA NT AND PERUSED THE ASSESSMENT ORDER. I HAVE ALSO GONE THROUGH THE DETAILS AND DOCUMENTS FILED BY THE APPELLANT COMPANY IN THE COURSE OF ASSESSMENT: PROCEEDINGS VIDE LETTER D T. 3-10-2007. ON CAREFUL CONSIDERATION OF THE FACTS AND IN LAW I AM OF THE O PINION THAT THE AO WAS NOT JUSTIFIED IN MAKING, THE ADDITION AGGREGATING TO RS.54,00,000/- U/S.68 OF THE ACT BEING THE AMOUNT OF SHARE APPLICATION MONEY BY HOLDING THAT THE APPE LLANT COMPANY HAS FAILED TO PROVE THE IDENTITY, AND CREDITWORTHINESS OF THE CREDITORS AS WELL AS THE GENUINENESS OF TRANSACTIONS. IT IS OBSERVED THAT ALL THE THREE SHA RE APPLICANT COMPANIES I.E. M/S. SHREE SHYAM TREXIM PVT. LTD., M/S NAVALCO COMMODITIES PVT . LTD. AND M/S. JEWELLOCK TREXIM PVT. LTD. HAD FILED THEIR CONFIRMATIONS WHEREIN EAC H OF THEM CONFIRMED THAT THEY HAD APPLIED FOR SHARES OF THE APPELLANT -COMPANY. ALL T HE THREE COMPANIES PROVIDED- THE CHEQUE NUMBER, COPY OF BANK STATEMENTS AND THEIR PA N. IT IS OBSERVED THAT THESE COMPANIES ALSO FILED, COPIES OF THEIR RETURN OF INC OME AND FINANCIAL STATEMENTS FOR AS WELL AS COPY OF THEIR ASSESSMENT ORDER U/S. 143(3) OF THE I. T ACT FOR AY 2005-06. IN THE CASE OF M/S. JEWELLOCK TREXIM PVT. LTD. THE ASSESSM ENT FOR AY 2005-06 WAS COMPLETED BY THE ITO WARD 9(3), KOLKATA AND THE ASSESSMENTS I N THE CASE OF M/S. NAVALCO COMMODITIES PVT. LTD. AND M/S. SHREE SHYAM TREXIM P VT. LTD. FOR A. Y.2005-06 AND 27 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD AY.2004-05 RESPECTIVELY WERE COMPLETED BY THE I TO, WARD 9(4), KOLKATA. UNDER THE CIRCUMSTANCES, I AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE SHARE APPLICANT COMPANIES WERE NOT IN EXISTENCE. TH E ASSESSMENT ORDERS WERE COMPLETED ON THE ADDRESS AS PROVIDED BY THE APPELLA NT COMPANY IN THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS NOT KNOWN AS TO HOW T HE AO'S INSPECTOR HAD REPORTED THAT THE AFORESAID COMPANIES WERE NOT IN EXISTENCE AT TH E GIVEN ADDRESS. SINCE THE APPELLANT COMPANY HAD PROVIDED SUFFICIENT DOCUMENTARY EVIDENC ES IN SUPPORT OF ITS CLAIM OF RECEIPT OF SHARE APPLICATION MONEY, I AM OF THE OPI NION THAT THE NO ADDITION U/S.68 COULD BE MADE IN THE HANDS OF APPELLANT COMPANY. ON GOING THROUGH THE VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT, IT IS OBSERVED THAT THE VIEW TAKEN AS ABOVE IS ALSO SUPPORTED BY THEM. IN VIEW OF ABOVE T HE AO IS DIRECTED TO DELETE THE ADDITION OF RS.54,00,000/ -. THE GROUND NOS. 2 AND 3 ARE ALLOWED, ' 7. AGGRIEVED BY THE ORDER OF CIT{A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED DR , WHO RELIED ON THE ORDER OF AO. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF CIT(A) AND FURTHER DREW OUR ATTENTION TO THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS RAJ KUMAR AGARWAL VIDE ITA NO. 179/2008, DATED 17. 11.2 009 WHEREIN THE HON 'BLE ALLAHABAD HIGH COURT TOOK A VIEW THAT NON PRODUCTIO N OF THE DIRECTOR OF A PUBLIC LIMITED COMPANY WHICH IS REGULARLY ASSESSED TO INCO ME TAX HAVING PAN, ON THE GROUND THAT THE IDENTITY OF THE INVESTOR IS NOT PROVED CAN NOT BE SUSTAINED. ATTENTION WAS ALSO TO THE SIMILAR RULING OF THE ITAT KOLKATA BENCH IN THE CASE OF ITO VS DEVINDER SINGH SHANT IN IT A NO.20BIKO112009 VIDE ORDER DATED 17.04.2009 . 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS., WE A RE OF THE VIEW THAT ORDER OF CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. IT MAY B E SEEN FROM THE GROUNDS OF APPEAL RAISED BY THE REVENUE THAT THE REVENUE DISPUTED ONL Y 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. SIMIL ARLY 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 DI SPUTED BY THE REVENUE, IT CANNOT BE SAID THAT THE IDENTITY OF THE SHARE APPLICANTS REMA INED NOT PROVED BY THE ASSESSEE. THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT AS WEL L 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 COM PANY FOR EXAMINATION BY THE AO IT CANNOT BE HELD THAT THE IDENTITY OF A LIMITED COMPA NY HAS NOT BEEN ESTABLISHED. FOR THE REASONS GIVEN ABOVE WE UPHOLD THE ORDER OF CIT(A) A ND DISMISS THE APPEAL OF THE REVENUE. ' 31. RELIANCE IN THIS REGARD IS ALSO PLACED ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS GANGESHWARI METAL (P) L TD (ITA NO. 597 OF 2012) DATED 21.01.2012. IN THIS CASE THE ASSESSEE HAD RE CEIVED SHARE APPLICATION MONEY OF RS.55.50 LACS DURING THE YEAR IN QUESTION. THE A SSESSEE FILED THE COMPLETE NAMES, ADDRESSES OF THE SHARE APPLICANTS, CONFIRMAT ORY LETTERS FROM THEM, COPIES OF BANK STATEMENTS OF BOTH THE COMPANY AS WELL AS T HE SHARE APPLICANTS AND COPIES OF SHARE APPLICATION FORMS. IN SPITE OF THE AFORESAID DOCUMENTARY 28 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD EVIDENCES THE AO HELD THE EXPLANATION TO BE UNACCEP TABLE AND TREATED THE SHARE APPLICATION AS UNEXPLAINED CASH CREDIT THEREBY MAKI NG ADDITION UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961. ON APPEAL THE CIT(APPE ALS) DELETED THE AFORESAID ADDITION HOLDING THAT THE IDENTITY OF THE SHARE APP LICANTS STOOD ESTABLISHED BEYOND DOUBT, ALL THE PAYMENTS WERE THROUGH ACCOUNT PAYEE CHEQUES AND THE SHARE APPLICANTS WERE REGULAR INCOME-TAX ASSESSEES. THE C IT(APPEALS) FURTHER HELD THAT THE REVENUE DID NOT BRING ANY EVIDENCE ON RECORD TO SUGGEST THAT THE SHARE APPLICATION HAD BEEN RECEIVED BY THE ASSESSEE FROM ITS OWN UNDISCLOSED SOURCES NOR ANY MATERIAL WAS BROUGHT ON RECORD TO SHOW THAT .THE APPLICANTS WERE BOGUS. THE REVENUE WAS NEITHER ABLE TO CONTROVERT THE DOCU MENTARY EVIDENCES FILED BY THE APPELLANT NOR PROVE THAT THE SHARE APPLICATION WERE INGENUINE OR THE APPLICANTS WERE NON-CREDITWORTHY. THE FINDINGS OF T HE CIT(APPEALS) WERE UPHELD BY THE INCOME-TAX APPELLATE TRIBUNAL. ON APPEAL TO THE HIGH COURT, THE REVENUE PLACED STRONG RELIANCE ON THE DECISION OF ANOTHER C OORDINATE BENCH OF THE SAME COURT IN THE' CASE OF CIT VS NOVO PROMOTERS & FINLE ASE (P) LTD (342 ITR 169). THE HIGH COURT HOWEVER HELD THAT THE AFORESAID JUDG MENT WAS DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. THE COURT OBSER VED THAT IN THAT JUDGMENT THE ASSESSING OFFICER HAD BROUGHT ON RECORD ENOUGH CORR OBORATIVE EVIDENCE TO SHOW THAT THE ASSESSEE HAD ROUTED UNACCOUNTED MONIES INT O ITS BOOKS THROUGH MEDIUM OF SHARE SUBSCRIPTION. THE SHARE APPLICANTS HAD CON FESSED THAT THEY WERE 'ACCOMMODATION ENTRY PROVIDERS'. THE ASSESSING OFFI CER IN THE LATTER CASE WAS ABLE TO PROVE WITH ENOUGH MATERIAL THAT THE SHARE S UBSCRIPTION WAS A PRE- MEDITATED PLAN TO ROUTE UNACCOUNTED MONIES. IN THE PRESENT CASE HOWEVER THE DEPARTMENT WAS UNABLE TO BRING ANY MATERIAL WHATSOE VER SHOWS THAT SHARE APPLICATION WAS IN THE NATURE OF ACCOMMODATION ENTR IES. THE COURT OBSERVED THAT THE APPELLANT HAD FILED SUFFICIENT DOCUMENTARY EVID ENCES TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GENUINENESS OF THE TRANSACTION. THE AO HOWEVER CHOSE TO SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTED ALL THE EVIDENCE IN HIS POSSESSION AND TH EN MERELY REJECT THE SAME WITHOUT CONDUCTING ANY INQUIRY OR VERIFICATION WHAT SOEVER. THE COURT THUS HELD THAT THE DECISION OF CIT VS NOVO PROMOTERS & FINLEA SE (P) LTD (342 ITR 169) WAS NOT APPLICABLE TO THE FACTS OF THE CASE. INSTEA D IT WAS HELD THAT THE ISSUE IN 29 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD HANDS WAS ON THE LINES OF THE DECISION OF THE SUPRE ME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (319 ITR 5). ACCORDINGLY THE ADDITION MADE UNDER SECTION 68 ON ACCOUNT OF SHARE APPLICATION WAS DELE TED. 32. WE WOULD LIKE TO REPRODUCE THE HON'BLE HIGH CO URT ORDER IN CIT VS. GANGESHWARI METAL P.LTD. IN ITA NO. 597/2012 JUDGEM ENT DATED 21.1.2013, THE HON'BLE HIGH COURT AFTER CONSIDERING THE DECISIONS IN THE CASE OF NOVA PROMOTERS AND FINLEASE PVT. LTD. 342 ITR 169 AND JUDGEMENT IN THE CASE OF CIT VS. LOVELY EXPORTS 319 ITR (SAT 5)(5. C) HELD AS FOLLOWS:- AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES O F CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSING OFFICER CARRIES OUT THE EXERCIS E WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER 'SITS BACK WIT H FOLDED HANDS' TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSES SION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRE SENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER AFTER NOTING T HE FACTS, MERELY REJECTED THE SAME. THIS WOULD BE APPARENT FROM THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER TO THE FOLLOWING EFFECT:- ''INVESTIGATION MADE BY THE INVESTIGATION WING OF T HE DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRANSACTION OF ACCOMMOD ATION ENTRY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF RS.1, 11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THA T THERE IS NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS R ECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WAS STATED THAT THE ACTUAL AMOUNT RECEIVED WAS RS.55,50,000/- AND NOT RS.1,11,50,000/- AS MENTIONE D IN THE NOTICE. THE ASSESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTI ON OF THE ASSESSEE IN RESPECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AM OUNT IS TO BE TAKEN AT RS.55,50,000/-. THE ASSESSEE HAS FURTHER TRIES TO E XPLAIN THE SOURCE OF THIS AMOUNT OF RS.55,50,000/- BY FURNISHING COPIES OF SHARE APPLIC ATION MONEY, BALANCE4 SHEET ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT THE Q UESTION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANATION OF TH E ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REMAINS UNEXPL AINED IN THE HANDS OF THE ASSESSEE AS HAS BEEN ARRIVED BY THE INVESTIGATION WING OF TH E DEPARTMENT. AS SUCH ENTRIES OF RS.5~50/000/- RECEIVED BY THE ASSESSEE ARE TREATED AS AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED TO ITS INCOME. SINC E I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME/ PEN ALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITIATED SEPARATELY. THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. ( SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVOUR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CLEARLY DISTINGUISHAB LE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) L TD. (SUPRA). THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER ONCE T HE ASSESSEE HAD FURNISHED ALL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. I N SUCH AN EVENTUALITY NO ADDITION CAN BE MADE UNDER SECTION 68 OF THE INCOME TAX ACT 1961. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TR IBUNAL IS CORRECT IN LAW 30 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD 33. THE CASE ON HAND CLEARLY FALLS IN THE CATEGORY WHERE THERE IS LACK OF ENQUIRY ON THE PART OF THE A. O. AS IN THE CASE OF GANJESHWARI METALS (SUPRA). B) IN THE CASE OF FINLEASE PVT LTD. 342 ITR 169 (SU PRA) IN ITA 232/2012 JUDGEMENT DT. 22.11.2012 AT PARA 6 TO 8/ IT WAS HEL D AS FOLLOWS. '6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE THE DISCUSSION BY THE COMMISSIONER OF INCOME TAX (APPEALS) WOULD R EVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED COPIES ISSUED BY THE ROC IN RELATION TO THE SHARE APPLICATION AFFIDAVITS OF THE DIRECTORS, FORM 2 FIL ED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APPLICANT FOR COMPANY'S SHARES , CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE ASSESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF THE INVES TIGATION REPORT AND THE STATEMENT OF MR. MAHES GARG. TO ELEVATE THE INFERENCE WHICH CAN BE DRAWN ON THE BASIS OF READING OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPER, MORE SO WHEN THE ASSESSEE PRODUCED MATERIAL. THE LEAST THAT THE ASSE SSING OFFICER OUGHT TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NECESSARY, INVOKI NG HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIRECTORS. NO EFF ORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCL OSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSING OFFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAIN FACTS AND THE STATEMENTS OF MR.MA HESH GARG THAT THE INCOME SOUGHT TO BE ADDED FELL WITHIN THE DESCRIPTION OFS.68 OF THE INCOME TAX ACT 1961. HAVING REGARD TO THE ENTIRETY OF FACTS AND CIRCUMSTANCES, THE COU RT IS SATISFIED THAT THE FINDING OF THE TRIBUNAL IN THIS CASE ACCORDS WITH THE RATIO OF THE DECISION OF THE SUPREME COURT IN LOVELY EXPORTS (SUPRA). THE DECISION IN THIS CASE IS BASED ON THE PECULIAR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENC E IN SUPPORT OF THE SHARE APPLICATION MONIES, IT IS OPEN TO THE ASSESSING OFF ICER TO EXAMINE IT AND REJECT IT ON TENABLE GROUNDS. IN CASE HE WISHES TO RELY ON THE R EPORT OF THE INVESTIGATION AUTHORITIES, SOME MEANINGFUL ENQUIRY OUGHT TO BE CONDUCTED BY HI M TO ESTABLISH A LINK BETWEEN THE ASSESSEE AND THE ALLEGED HAWALA OPERATORS, SUCH A L INK WAS SHOWN TO BE PRESENT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA) RELIED UPON BY THE REVENUE. WE ARE THEREFORE NOT TO BE UNDERSTOOD TO CONVEY THAT IN AL L CASES OF SHARE CAPITAL ADDED UNDER SECTION THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTR ACTED, IRRESPECTIVE OF THE FACTS, EVIDENCE AND MATERIAL. ' 34. IN THIS CASE ON HAND, THE ASSESSEE HAD DISCHAR GED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE S HARE APPLICANTS, THEREAFTER THE ONUS SHIFTED TO AO TO DISPROVE THE DOCUMENTS FURNIS HED BY ASSESSEE CANNOT BE BRUSHED ASIDE BY THE AO TO DRAW ADVERSE VIEW CANNOT BE COUNTENANCED. IN THE ABSENCE OF ANY INVESTIGATION, MUCH LESS GATHERING O F EVIDENCE BY THE ASSESSING OFFICER, WE HOLD THAT AN ADDITION CANNOT BE SUSTAIN ED MERELY BASED ON INFERENCES DRAWN BY CIRCUMSTANCE. APPLYING THE PROPOSITIONS LA ID DOWN IN THESE CASE LAWS TO THE FACTS OF THIS CASE, WE ARE INCLINED TO ALLOW THE APPEAL OF THE ASSESSEE. 31 I.T.A NO. 1636/KOL/2019 A.Y 2013-14 M/S. TRADELINK CARRYING P.LTD 35. TO SUM UP SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPLAIN THE NATURE AND SOURCE SHALL BE ASSESSED AS ITS UNDISCLOSED INCOME. IN THE FACTS OF THE PRESENT CASE, BOTH THE NATURE & SOURCE OF THE SHARE APPLICATION RECEIV ED WAS FULLY EXPLAINED BY THE ASSESSEE. THE ASSESSEE HAD DISCHARGED ITS ONUS TO P ROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE APPLI CANTS. THE PAN DETAILS, BANK ACCOUNT STATEMENTS, AUDITED FINANCIAL STATEMENTS AN D INCOME TAX ACKNOWLEDGMENTS WERE PLACED ON AO'S RECORD. ACCORDI NGLY ALL THE THREE CONDITIONS AS REQUIRED U/S. 68 OF THE ACT I.E. THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WAS PLACED BEFORE T HE AO AND THE ONUS SHIFTED TO AO TO DISPROVE THE MATERIALS PLACED BEFORE HIM. WI THOUT DOING SO, THE ADDITION MADE BY THE AO IS BASED ON CONJECTURES AND SURMISES CANNOT BE JUSTIFIED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED AB OVE, NO ADDITION WAS WARRANTED UNDER SECTION 68 OF THE ACT. THEREFORE WE DELETE THE ADDITION OF RS 5,60,000/- AND CONSEQUENTLY THE APPEAL OF ASSESSEE IS ALLOWED . 36. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20TH DECEMBER, 2019 SD/- (ABY. T. VARKEY) JUDICIAL MEMBER DATE D 20-12-2019 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE: M/S. TRADELINK CARRYING PVT. LT D. 113 N.S ROAD, 5 TH FL., KOLKATA-1. 2 RESPONDENT/REVENUE: THE I.T.O WARD 4(1), KOLKATA, P -7 CHOWRINGHEE SQ., KOLKATA-69. 3. CIT, 4. CIT(A), KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPS TRUE COPY BY BY ORDER ASSISTANT REGISTRAR ITAT KOLKATA