ACIT, New Delhi V. M/s D.K.B. Infrastructure Pvt. Ltd., New Delhi

ITA 1722/DEL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7307 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 08-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANT GUPTA SENIOR
• Keywords: Unexplained cash credit; Income from undisclosed sources; Principle of natural justice; Opportunity of cross examination; Source of fund; Question of law; Accommodation entries; Assessment record; Onus to prove
• Section: 142(1); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI A.T. VARKEY, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.1722/DEL./2011 (ASSESSMENT YEAR : 2007-08) ACIT, CIRCLE 10 (1), VS. M/S. D.K.B. INFRASTRUCTUR E PVT. LTD., NEW DELHI. 8/53, 1 ST FLOOR, WEA, KAROL BAGH, NEW DELHI. (PAN : AACCD3282G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI CA. REVENUE BY : SHRI HEMANT GUPTA, SENIOR DR O R D E R PER A.T. VARKEY, JUDICIAL MEMBER : THIS APPEAL, AT THE INSTANCE OF THE REVENUE, IS DIR ECTED AGAINST THE ORDER OF THE CIT (APPEALS)-XVIII, NEW DELHI DATED 20.12.2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE G ROUNDS OF APPEAL :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.70 ,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.1, 40,000/- MADE BY THE AO ON ACCOUNT OF 2% COMMISSION. 2 ITA NO.1722/DEL/2011 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY WAS ENGAGED IN INFRASTRUCTURE BUSINESS. THE ASSESSEE FILED E-RETU RN DECLARING TOTAL INCOME UNDER RS.11,43,594.- (AFTER SETTING OFF THE B/F LOS SES OF RS.5,640/-) ON 19.09.2007. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). THE CASE WAS SELECTED FOR COMPULSORY SCRUTINY UNDER CASS NORMS. A NOTICE U/S 143(2) WAS ISSUED ON 24.09 .2008 AND SUBSEQUENTLY, NOTICE U/S 142(1) OF THE ACT ALONG WITH QUESTIONNAI RE WAS ISSUED TO THE ASSESSEE ON 27.08.2009. 3.1 THE AO OBSERVED THAT DURING THE YEAR UNDER CONS IDERATION, THE SHARE CAPITAL OF THE ASSESSEE WAS INCREASED FROM RS.1,00, 000/- TO RS.43,00,000/- I.E. AN INCREASE OF RS.42,00,000/- ALONG WITH AN INCREAS E OF RS.3,78,00,000/- IN THE SHARE PREMIUM ACCOUNT. THE AO ASKED THE ASSESSEE T O PRODUCE THE DETAILS OF THESE INCREASES AND DETAILS OF NEWLY INTRODUCED SHA RE CAPITAL AND TO PROVE THE IDENTITY, CREDITWORTHINESS & GENUINENESS OF THE PAR TIES TO WHOM THE SHARES WERE ALLOTTED. IN RESPONSE TO THE SAME, ASSESSEE FURNISH ED A LIST OF 23 PARTIES TO WHOM THE SHARES WERE ALLOTTED ALONG WITH NUMBER OF SHARE S ALLOTTED TO EACH. HOWEVER, THE AO OBSERVED THAT NO CREDIBLE SUBMISSIONS WERE M ADE WHICH COULD PROVE THE EXISTENCE, IDENTITY, CREDITWORTHINESS AND GENUINENE SS OF THESE TRANSACTIONS. MOREOVER, THE AO OBSERVED THAT A PERUSAL OF THE LIS T OF PARTIES TO WHOM THESE SHARES WERE ALLOTTED REVEALED THAT NAMES OF FOUR PA RTIES FROM THIS LIST FIGURES IN THE INFORMATION ON ACCOMMODATIONS ENTRIES RECEIVED FROM THE DIRECTORATE OF INCOME TAX (INVESTIGATION), NEW DELHI. THE NAMES OF THESE PARTIES ALONG WITH 3 ITA NO.1722/DEL/2011 NUMBER OF SHARES ALLOTTED TO EACH AND THE SHARE APP LICATION MONEY ALONG WITH INCREASED SHARE PREMIUM ARE AS UNDER: SL.NO. NAME OF THE PARTIES SHARES SHARE AP PLICATION ALLOTTED MONEY 1. M/S ARCHIT FINCAP LIMITED 9000 RS. 9,00 ,000/- 2. M/S AT ALL TIME YOUR SECURITIES LTD 42400 RS .42,40,000/- 3. M/S FOCUS INDUSTRIAL RESOURCES LIMITED 6600 RS. 6,60,000/- 4. M/S PARAS FINCAP PVT. LTD. 12000 RS.12,00,000/- TOTAL : 70000 RS.70,00,000/- THE AO OBSERVED THAT THE AFORESAID FOUR PARTIES HAD INVESTED A TOTAL SUM OF RS.70 LAKHS IN THE ASSESSEE COMPANY AS SHARE APPLIC ATION MONEY. BUT THE AO OBSERVED THAT AS PER THE INFORMATION RECEIVED FROM THE DIT (INVESTIGATION), NEW DELHI, EITHER THESE PARTIES ARE IN THE LIST OF BENE FICIARY OF ACCOMMODATION ENTRIES OR IN THE LIST OF ACCOMMODATION ENTRY PROVIDERS TO OTHER COMPANIES. FURTHER, THE AO NOTED THAT THE ENQUIRIES CONDUCTED BY THE INVEST IGATION WING OF THE DEPARTMENT REVEALED THAT MOST OF THE ENTRY OPERATOR S WERE CHARGING COMMISSION @ 2% FOR GIVING THESE ACCOMMODATION ENTRIES. 3.2 THE AO ASKED THE ASSESSEE TO PRODUCE BALANCE SH EETS, STATEMENT OF COMPANIES, BANK ACCOUNTS, COPY OF ITR, CONFIRMATION S OF THE PARTIES AND OTHER EVIDENCES TO ASCERTAIN THE IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF THE PARTIES AND ALSO THEIR PERSONAL APPEARANCE TO PROVE THE EXISTENCE OF THE PARTIES, SPECIALLY THE AFORESAID FOUR PARTIES. IN RESPONSE TO THAT, NOBODY APPEARED ON THE NEXT DATE OF HEARING. THEREFORE, THE AO ISSUED SUM MONS U/S 131 OF THE ACT TO 4 ITA NO.1722/DEL/2011 THE AFORESAID FOUR COMPANIES REQUIRING THEM TO PROD UCE THE AFORESAID DOCUMENTS WITH THEIR PERSONAL APPEARANCE. NONE ATTEND ON THE DATE OF HEARING, HOWEVER, WRITTEN SUBMISSIONS ALONG WITH CONFORMATION OF PART Y AND STATEMENT OF BANK ACCOUNT WERE RECEIVED BY POST FOR ALL FOUR ENTRY OP ERATORS BUT THE BALANCE SHEET AND ITR WERE NOT FILED AND ALSO NO DOCUMENTARY PROO F EVIDENCING THE SOURCE OF FUNDING WAS FURNISHED. THEREFORE, THE AO OBSERVED T HAT THESE SUBMISSIONS WERE GROSSLY INSUFFICIENT TO PROVE THE CREDITWORTHINESS OR GENUINENESS OF THESE TRANSACTIONS AND MOREOVER THE EXISTENCE OF THESE PA RTIES WAS EVEN MORE DOUBTFUL. AFTER PERUSING THE SUBMISSIONS OF THE A SSESSEE AND FAILURE ON THE PART OF THE AFORESAID FOUR COMPANIES TO MAKE REPRESENTAT ION BEFORE HIM, THE AO OBSERVED THAT THESE PARTIES DID NOT EXIST AND THEY WERE PAPER COMPANIES WHO WERE ENGAGED IN THE MALPRACTICE OF PROVIDING ACCOMM ODATION ENTRY AND THE ASSESSEE HAD ROUTED ITS UNACCOUNTED MONEY THROUGH T HEM IN THE GUISE OF APPLICATION MONEY. 3.3 IN THE END, THE AO OBSERVED THAT DESPITE AVAIL ING MORE THAN SUFFICIENT AND FAIR OPPORTUNITY FOR PROVING THE EXISTENCE, IDE NTITY, CREDITWORTHINESS & GENUINENESS OF THE ABOVE FOUR COMPANIES, ASSESSEE F AILED TO PROVIDE ANY SPECIFIC DETAIL I.E. CONFIRMATION FROM THE INVESTOR , COPIES OF ITRS, BALANCE-SHEET AND BANK STATEMENT OF THE PARTIES. HE FURTHER OBSER VED THAT THE ASSESSEE HAS NOT COME FORWARD TO PROVE THE EXISTENCE & CREDITWORTHIN ESS OF THESE PARTIES ON ACCOUNT OF FAILURE TO PRODUCE THE PARTIES FOR VERIF ICATION OF THE TRANSACTIONS. THE ONUS TO DO SO LIES ON THE ASSESSEE WHICH HAS NOT BE EN DISCHARGED BY IT. 5 ITA NO.1722/DEL/2011 THEREFORE, THE AO HELD THAT THE AMOUNT OF RS.70 LAK HS BE TREATED AS UNEXPLAINED CREDIT AS PER THE PROVISIONS OF SECTION 68 ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3.4 DURING THE ENQUIRIES CONDUCTED BY THE INVESTIGA TION WING OF THE DEPARTMENT, THE AO CONCLUDED THAT MOST OF THE ENTRY OPERATORS WERE CHARGING COMMISSION @ 2% FOR GIVING THESE ACCOMMODATION ENTR IES. THE AO OBSERVED THAT THIS COMMISSION HAD NOT BEEN BOOKED BY THE ASS ESSEE AND HAD BEEN GIVEN OUT OF THE UNACCOUNTED INCOME, THEREFORE, THE AO HE LD THAT THE AMOUNT OF RS.1,40,000/- BE ADDED TO THE INCOME OF THE ASSESSE E. 4. AGGRIEVED THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY AND THE LD. CIT (A) DELETED THE ADDITION BY OBSERVI NG AS UNDER :- 4.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER, REMAND REPORT OF THE AO AND WRITTEN SUBMISSIONS MADE BY THE LD. AR. IT IS ARGUED BY THE LD. AR THAT THE IMPUGNED SHARE APPLICATION/PREMIUM MONE Y TOTALING RS.70,00,000/- WAS RECEIVED FROM FOUR COMPANIES, NA MELY, M/S AT ALL TIMES YOURS SECURITIES PVT. LTD. (RS.42,40,000/-), M/S FOCUS INDUSTRIAL RESOURCES LTD. (RS.6,60,000/-), M/S ARCHIT FINCAP L TD. (RS.9,00,000/-), M/S PARAS FINCAP PVT. LTD. (RS,12,00,000/-), BY ACC OUNT PAYEE CHEQUES/DEMAND DRAFT. IT IS ARGUED THAT THE APPELLA NT COMPANY HAD RECEIVED SHARE APPLICATION/PREMIUM AMOUNT FROM A TOTAL 23 PA RTIES (INCLUDING THE ABOVE FOUR PARTIES) DURING THE YEAR UNDER CONSIDERA TION AND HAD SUBMITTED COPIES OF CONFIRMATIONS FROM THE SAID COMPANIES CON FIRMING THE PAYMENT OF THE ABOVE AMOUNT AS SHARE APPLICATION/PREMIUM MO NEY, COPIES OF PAN CARDS OF THE RESPECTIVE COMPANIES, SHARE APPLICATIO N FORMS, SHARE ALLOTMENT DETAILS AND BANK ACCOUNT COPIES ALONGWITH BALANCE S HEET AND P&L ACCOUNT ETC. OF THE ABOVE INVESTOR COMPANIES BEFORE THE AO IN SUPPORT OF ITS CLAIM. IT IS ARGUED BY THE ID. AR THAT THE APPE LLANT HAS DISCHARGED ITS INITIAL ONUS WITH REGARD TO THE ABOVE TRANSACTIONS. IT IS ARGUED THAT THE AO HAS ACCEPTED THE SHARE APPLICATION/PREMIUM AMOUNT R ECEIVED IN RESPECT OF 19 PARTIES AND HAS SELECTIVELY ADDED THE AMOUNTS PE RTAINING TO THE ABOVE FOUR PARTIES ONLY ON THE BASIS OF INFORMATION FROM THE INVESTIGATION WING, ALTHOUGH SIMILAR DETAILS AND DOCUMENTS HAD BEEN FIL ED IN RESPECT OF EACH OF THE ABOVE 23 PARTIES BEFORE THE AO. IT IS FURTHER A RGUED THAT THE AO ALSO ISSUED SUMMONS U/S 131 TO THE ABOVE FOUR PARTIES WH ICH WERE DULY SERVED 6 ITA NO.1722/DEL/2011 AT THE ADDRESSES GIVEN AND REPLIES WERE FILED BY TH E PARTIES ALONGWITH NECESSARY DOCUMENTS BEFORE THE AO. IT IS ARGUED TH AT THE ADDITION HAS BEEN MADE BY THE AO MERELY ON THE BASIS OF INFORMATION R ECEIVED FROM THE INVESTIGATION WING WHICH WAS AT THE BACK OF THE APP ELLANT AND ON ACCOUNT OF INABILITY OF THE APPELLANT TO PRODUCE THE DIRECT ORS OF THE ABOVE FOUR INVESTOR COMPANIES PERSONALLY BEFORE THE AO. IT IS FURTHER ARGUED THAT THE APPELLANT COMPANY WAS INCORPORATED ON 14.02.2006 WI TH THE MAIN OBJECT OF CARRYING OUT BUSINESS OF REAL ESTATE AND INFRASTRUC TURE DEVELOPMENT AND HAS NOT COMMENCED ITS BUSINESS, OTHER THAN RAISING THE SHARE CAPITAL DURING THE YEAR UNDER CONSIDERATION WHICH HAS BEEN INVESTED IN BANK DEPOSITS / LOANS ON WHICH INTEREST INCOME HAS BEEN EARNED WHICH HAS BEEN SHOWN FOR TAXATION. IT IS ARGUED THAT SINCE THIS IS PRACTICAL LY THE FIRST YEAR OF THE COMPANY AND THE BUSINESS HAS NOT COMMENCED, THE IMP UGNED ADDITION U/S 68 IS BAD IN LAW. IT IS ALSO ARGUED THAT CROSS EXAM INATION IN RELATION TO THE EVIDENCES IF ANY WITH THE AO PERTAINING TO THE ABOV E COMPANY WAS NOT PROVIDED TO THE APPELLANT BY THE AO, ALTHOUGH SPECI FICALLY ASKED FOR BY THE APPELLANT. IT IS FURTHER ARGUED THAT THE EVEN IN TH E EVENT OF THE INVESTOR COMPANIES BEING BOGUS, AS ALLEGED, NO ADDITION CAN BE MADE U/S 68 IN THE HANDS OF THE APPELLANT COMPANY. THE LD. AR HAS ACCO RDINGLY ARGUED THAT THE SAID ADDITION OF RS.70,00,000/- U/S 68 AND RS.1 ,40,000/- AS ESTIMATED COMMISSION MADE IN THE HANDS OF THE APPELLANT COMPA NY IS ILLEGAL. THE LD. AR HAS RELIED UPON A PLETHORA OF CASE LAWS IN SUPPO RT OF HIS CLAIM. ON CAREFUL CONSIDERATION OF THE MATTER, I FIND THAT TH E ABOVE CONTENTION OF THE ID. AR CANNOT BE REJECTED ON MERIT. THE AO HAS ALSO NOT BEEN ABLE TO BRING ON RECORD ANY VALID MATERIAL EVIDENCE TO DISPROVE T HE CLAIM OF THE APPELLANT IN THIS REGARD. THE AO HAS ALSO NOT MADE ANY ADVERS E COMMENT IN HIS REMAND REPORT ON THE MERIT OF THE CASE AND THE LARG E NUMBER OF DOCUMENTARY EVIDENCES RELIED UPON BY THE APPELLANT. 4.3.1. FURTHER, I FIND THAT APART FROM THE CASE LAW S RELIED UPON BY THE LD. AR, THE ESTABLISHED LEGAL POSITION ON THE SUBJECT U NDER CONSIDERATION AS ADOPTED IN A LARGE NUMBER OF CASE LAWS IS AS FOLLOW S : 4.3.2. AS HELD IN THE CASE OF R. B. MITTAL V. CIT 2 46 ITR 283 (AP) IN AN ENQUIRY U/S 68, THE RULE OF AUDI ALTERAM PARTEM HAS TO BE OBSERVED AND THE ASSESSEE MUST BE GIVEN A FAIR AND REASONABLE HEARIN G TO DISCHARGE THE BURDEN CAST ON HIM U/S 68 OF THE ACT. 4.3.3. FURTHER, IT IS SETTLED LAW THAT IN THE MATTE R OF CASH CREDIT, THE INITIAL ONUS LIES ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTION ALONGWITH THE IDENTITY OF THE LENDER/INVESTOR AND H IS CREDITWORTHINESS. HAVING DONE SO, THE APPELLANT IN THE INSTANT CASE H AS DISCHARGED THE ONUS CAST UPON IT. BEYOND THIS, FOR THE CHARGE OF UNEXPL AINED CASH CREDIT TO STICK, THE ONUS LIES ON THE AO TO DISPROVE THE CLAIM OF TH E ASSESSEE BY ESTABLISHING THAT THE EVIDENCE FILED BY THE ASSESSE E WAS FALSE AND BY BRINGING NEW MATERIAL ON RECORD AND FAILURE TO DO S O WOULD VITIATE THE ADDITION MADE ON THIS COUNT. REFERENCE IN THIS REGA RD CAN BE MADE THE DECISIONS IN THE CASE OF CIT V. ORISSA CORPORATION PVT. LTD. 158 ITR 78 7 ITA NO.1722/DEL/2011 (SC) AND CIT V. ROHINI BUILDERS 256 ITR 360 (GUJ.). IT WAS ALSO HELD IN THE CASE OF CIT V. BEDI & CO. P. LTD. (1998) 230 IT R 580 (SC) THAT WHERE PRIMA-FACIE THE INFERENCE ON FACTS IS THAT THE ASSE SSEE'S EXPLANATION IS PROBABLE, THE ONUS WILL SHIFT TO THE REVENUE TO DIS PROVE IT AND THE ASSESSEE'S EXPLANATION IN SUCH CASE CANNOT BE REJECTED ON MERE SURMISES. FURTHER, IT WAS HELD IN KHANDELWAL CONSTRUCTIONS V. CIT (1997) 227 ITR 900 (GAU.) THAT SINCE THE SATISFACTION OF THE AO IS THE BASIS FOR INVOCATION OF THE POWERS U/S 68, SUCH SATISFACTION MUST BE DERIVED FR OM RELEVANT FACTORS ON THE BASIS OF PROPER INQUIRY BY THE AO AND SUCH INQU IRY MUST BE REASONABLE AND JUST. 4.3.4. IT IS ALSO SETTLED LAW THAT IT IS MANDATORY FOR THE AO TO CONFRONT THE ASSESSEE WITH ANY MATERIAL COLLECTED BY THE AO AT T HE BACK OF THE ASSESSEE, AND IN CASE OF STATEMENT OF THIRD PARTY RECORDED AT THE BACK OF THE ASSESSEE, OPPORTUNITY OF CROSS EXAMINATION HAS TO BE OFFERED TO THE ASSESSEE, FAILING WHICH THE SAID MATERIAL/STATEMENT ETC. WILL BE REND ERED ON UNRELIABLE AND ADDITIONS MADE ON THE BASIS OF SUCH MATERIAL/STATEM ENT ETC. SHALL BE RENDERED ILLEGAL. REFERENCE IN THIS REGARD CAN BE M ADE TO THE DECISIONS IN THE CASE OF R. B. SHREERAM DURGA PRASAD 176 ITR 169 (SC), 125 ITR 713 (SC), JINDAL VEGETABLE (ORDER OF HON'BLE DELHI HIGH COURT IN ITA NO. 428 OF 2007, 174 TAXMANN 440 (RAJ.) AND LAXMAN BHAI PAT EL (ORDER OF HON'BLE GUJARAT HIGH COURT DATED 22.07.2008 IN ITR NO. 41/1 997). 4.3.5. FURTHER, IN THE CASE OF N.P. GARODIA (ORDER DATED 13.01.2009 OF HON'BLE P & H HIGH COURT IN ITA NO. 808 OF 2008) AN D IN THE CASE OF BRIJ PAL SHARMA (ORDER DATED 17.02.2009 IN ITA NO. 685 O F 2008 OF HON'BLE P & H HIGH COURT) IT WAS HELD THAT WHERE THE ASSESSEE PROVIDES IDENTITY AND DETAILS PERTAINING TO THE LENDERS/CREDITORS AND IS UNABLE TO PRODUCE THEM AND REQUESTS THE AO TO ISSUE SUMMONS U/S 131 FOR TH EIR ATTENDANCE, IT IS THE DUTY OF THE AO TO ISSUE SUCH SUMMONS, FAILING WHICH THE ADDITION WOULD GET DELETED. IT IS ALSO HELD IN CIT V. ORISSA CORP ORATION PVT. LTD. 158 ITR 78 (SC) AND ANIS AHMED 297 ITR 441 (SC) THAT MERE N ON-PRODUCTION OF THE LENDER/SHAREHOLDER CANNOT BE A GROUND FOR MAKIN G ADDITION U/S 68. 4.3.6. SIMILARLY AS HELD IN THE CASE OF CIT V. META CHEM INDUSTRIES (2000) 245 ITR 160 (MP) WHERE A CREDIT IS SHOWN TO HAVE CO ME FROM A PERSON OTHER THAN THE ASSESSEE, THERE IS NO FURTHER RESPON SIBILITY OF THE ASSESSEE TO SHOW THAT IT HAS COME FROM ACCOUNTED SOURCE OF THE LENDER, AS LONG AS THE FACT THAT HE HAD MADE THE ADVANCE AND WAS CAPABLE O F MAKING THE ADVANCE ARE ESTABLISHED. IT WAS HELD BY THE HON'BLE MADRAS HIGH COURT IN HASTIMAL (S) V. CIT (1963) 49 ITR 273 THAT AFTER A LAPSE OF DECADE, THE ASSESSEE SHOULD NOT BE PLACED UPON THE RACK AND CALLED UPON TO EXPLAIN NOT MERELY THE ORIGIN AND SOURCE OF A CAPITAL CONTRIBUTION, BU T ALSO THE ORIGIN OF ORIGIN AND SOURCE OF THE SOURCE. 4.3.7. FURTHER, I FIND THAT THE APEX COURT IN CIT V LOVELY EXPORTS (P) LTD. (2008) 216 CTR 195 HELD THAT THE EVEN IF THE SHARE APPLICATION MONEY RECEIVED BY THE APPELLANT COMPANY IS FROM ALLEGED B OGUS SHAREHOLDER, 8 ITA NO.1722/DEL/2011 WHOSE IDENTITY IS PRODUCED BY THE APPELLANT COMPANY , THE REVENUE CAN ALWAYS PROCEED AGAINST SUCH SHAREHOLDERS AND IF NEC ESSARY REOPEN THEIR INDIVIDUAL ASSESSMENT. SIMILAR DECISION IS ALSO TAK EN IN THE CASE OF CIT V. STELLER INVESTMENT LTD. (1991) 192 ITR 287 (DEL.), (2000) 251 ITR 287 (SC), CIT V. SOPHIA FINANCE LTD. 205 ITR 98 (DEL.)( FB), CIT V. DIVINE LEASING & FINANCE LTD. (SLP NO. CC 375/2008 ARISING OUT OF ITA NO. 53/2005 OF THE HIGH COURT OF DELHI), CIT (KOLKATA) V. M/S SHIPRA RETAILERS (P) LTD. (SLP NO. CC 451/2008 ARISING OUT OF ITA NO . 576/2004 OF THE HIGH COURT OF CALCUTTA), CIT V. PONDY METAL & ROLLI NG MILLS (P) LTD. (SLP NO. CC 12860/2007 ARISING OUT OF ITA NO. 788/2 006 OF THE HIGH COURT OF DELHI) AND CIT V. GENERAL EXPORTS LTD. (SL P NO. 21349/2007 ARISING OUT OF ITA NO. 880/2006 OF THE HIGH COURT O F DELHI). FOLLOWING THE AFORESAID DECISION OF THE APEX COURT IN CIT V. LOVE LY EXPORTS (P) LTD. (SUPRA), THE HON'BLE MUMBAI HIGH COURT IN THE RECEN T JUDGEMENT IN THE CASE OF CIT V CREATIVE WORLD TELIFILMS LTD. (ORDER DATED 12.10.2009 IN ITA(L) NO. 2182 OF 2009) HAS HELD AS UNDER: 'THE QUESTION SOUGHT TO BE RAISED IN THE APPEAL WAS ALSO RAISED BEFORE THE TRIBUNAL AND THE TRIBUNAL WAS PLEASED TO FOLLOW THE JUDGEMENT OF THE APEX COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. REPORTED IN (2008) 216 CTR 195 (SC) WHEREI N THE APEX. COURT OBSERVED THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDER S, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT CAN ALWAYS PROCEED AGAINST THEM AND IF NECESSARY REOPEN THEIR INDIVIDUAL ASSESSMENTS. IN THE CASE IN HAND, IT IS NOT DISPUTED THAT THE ASSESSEE HAS GIVEN THE DETAILS OF NAME AND ADDR ESS OF THE SHAREHOLDERS, THEIR PAN/GIR NUMBER AND HAD ALSO GIV EN THE CHEQUE NUMBER, NAME OF THE BANK. IT WAS EXPECTED ON THE PA RT OF THE ASSESSING OFFICER TO MAKE PROPER INVESTIGATION AND REACH THE SHAREHOLDERS. THE ASSESSING OFFICER DID NOTHING EXC EPT ISSUING SUMMONS WHICH WAS ULTIMATELY RETURNED BACK WITH AN ENDORSEMENT 'NOT TENABLE'. IN OUR CONSIDERED VIEW, THE ASSESSIN G OFFICER OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARD, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS SO AS TO REACH THE SH AREHOLDERS SINCE AL/ THE RELEVANT MATERIAL DETAILS AND PARTICULARS WERE GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER. IN THE ABOVE CIR CUMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE FAULTED. NO SU BSTANTIAL QUESTION OF LAW IS INVOLVED IN THE APPEAL. IN THE R ESULT, THE APPEAL IS DISMISSED IN LIMINE WITH NO ORDER AS TO COSTS. SIMILAR DECISION HAS ALSO BEEN TAKEN BY THE HON'BLE CHHATTISGARH HIGH COURT IN ACIT V. VENKATESHWAR ISPAT PVT. LTD. (2009 ) 319 ITR 393. 4.3.8. FURTHER, THE HON'BLE DELHI HIGH COURT RELYIN G ON THE JUDGEMENT OF THE APEX COURT IN LOVELY EXPORTS PVT. LTD. (SUPRA) HAS DISMISSED THE DEPARTMENT'S APPEALS IN LIMINE VIDE ITS RECENT ORDE RS IN THE CASE OF CIT V. DWARKADHISH INVESTMENT PVT. LTD. AND DWARKADHISH CA PITAL PVT. LTD (ITA 9 ITA NO.1722/DEL/2011 NOS. 911/2010 AND 913/2010 ORDER DATED 02.08.2010), CIT V. GREEN TECH TOWER BUILDERS PVT. LTD. (ITA NO. 1113/2010 ORDER D ATED 12.08.2010) AND CIT V. ULTRATECH FINANCE & INVESTMENT LTD. (ITA NO. 1122/2010 ORDER DATED 12.08.2010). IN THE CASE OF DWARKADHISH INVES TMENT PVT. LTD. AND DWARAKDHISH CAPITAL PVT. LTD. (SUPRA) THE HON'BLE J URISDICTIONAL HIGH COURT VIDE ITS COMMON ORDER DATED 02.08.2010 HAS IN TERALIA OBSERVED AS UNDER: '7. CONSEQUENTLY, THE DOCTRINE OF MERGER WOULD APPL Y AND THE JUDGMENT OF THE SUPREME COURT IN LOVELY EXPORTS (P) LTD. (SUPRA) WOULD COVER THE FIELD WITH REGARD TO INTERPRETATION OF SECTION 68 OF ACT, 1961. 8. IN ANY MATTER, THE ONUS OF PROOF IS NOT A STATIC ONE. THOUGH IN SECTION 68 PROCEEDINGS, THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE YET ONCE HE PROVES THE IDENTITY OF THE CRE DITORS/SHARE APPLICANTS BY EITHER FURNISHING THEIR PAN NUMBER OR INCOME TAX ASSESSMENT NUMBER AND SHOWS THE GENUINENESS OF TRAN SACTION BY SHOWING MONEY IN HIS BOOKS EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT OR BY ANY OTHER MODE, THEN THE ONUS OF PROOF WOULD SHIFT TO THE REVENUE. JUST BECAUSE THE CREDITORS/SHARE APPLICANT S COULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE R EVENUE THE RIGHT TO INVOKE SECTION 68. ONE MUST NOT LOSE SIGHT OF TH E FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSON. MOREOVER, IT IS SETTLED LAW THAT THE ASSESS EE NEED NOT TO PROVE THE 'SOURCE OF SOURCE'. .. 10. WE ARE ALSO INFORMED THAT A SPECIAL LEAVE PETIT ION AGAINST THE AFORESAID DIVISION BENCH JUDGMENT IN THE CASE O F THE RESPONDENT- ASSESSEE HAS BEEN DISMISSED BY THE SUPR EME COURT. ACCORDINGLY, WE ARE OF THE OPINION THAT NO QUESTION OF LAW ARISES IN THE PRESENT CASES AS THE MATTER IS FULLY COVERED BY THE JUDGMENT OF THE SUPREME COURT IN LOVELY EXPORTS (P) LTD. (SUPRA ) AS WELL AS THE DIVISION BENCH JUDGMENT OF THIS COURT IN THE CASE O F THE RESPONDENT-ASSESSEE ITSELF. 11. CONSEQUENTLY, WE ARE OF THE VIEW THAT THE PRESE NT APPEALS AMOUNT TO RELITIGATION. THE SUPREME COURT IN KK MOD I VS. KN. MODI AND ORS., (1998) 3 SEE 573 HAS HELD, 'IT IS AN ABUSE OF THE PROCESS OF THE COURT AND CONTRARY TO JUSTICE AND PU BLIC POLICY FOR A PARTY TO RELITIGATE THE SAME ISSUE WHICH HAS ALREAD Y BEEN TRIED AND DECIDED EARLIER AGAINST HIM. THE REAGITATION MAYOR MAY NOT BE BARRED AS RES JUDICATA. BUT IF THE SAME ISSUE IS SO UGHT TO BE REAGITATED, IT ALSO AMOUNTS TO AN ABUSE OF THE PROC ESS OF THE COURT .... 12. THOUGH WE WERE INITIALLY INCLINED TO IMPOSE COS TS YET WE ARE OF THE OPINION THAT ENDS OF JUSTICE WOULD BE MET BY GIVING A 10 ITA NO.1722/DEL/2011 DIRECTION TO THE REVENUE TO BE MORE CAREFUL BEFORE FILLING APPEALS IN A ROUTINE MANNER. IN OUR VIEW, APPEAL SHOULD NOT BE FILED IN MATTERS WHERE EITHER NO QUESTION OF LAW ARISES OR THE ISSUE OF LAW IS A SETTLED ONE. WE GIVE THIS DIRECTION BECAUSE THE JUDICIAL C APITAL' IN TERMS OF MANPOWER AND RESOURCES IS EXTREMELY LIMITED. 13. REGISTRY IS DIRECTED TO COMMUNICATE COPIES OF T HIS ORDER TO ALL THE CHIEF COMMISSIONERS OF INCOME TAX IN DELHI FOR NECESSARY ACTION. WITH THE AFORESAID DIRECTION, THE PRESENT A PPEALS ARE DISMISSED IN LIMINE BUT WITHOUT ANY ORDER AS TO COS TS. ' 4.3.9. CONSIDERING THE FACTS AND CIRCUMSTANCES OF T HE CASE AS DISCUSSED ABOVE AND RESPECTFULLY FOLLOWING THE PLETHORA OF JU DICIAL PRONOUNCEMENTS ON THE SUBJECT, THE IMPUGNED ADDITION OF RS.70,00,0 00/- U/S 68 AND RS.1,40,000/- AS ESTIMATED COMMISSION IN THE HANDS OF THE APPELLANT COMPANY IS FOUND TO BE LEGALLY UNSUSTAINABLE. IN VI EW OF THE ABOVE, THE ABOVE IMPUGNED ADDITIONS STAND DELETED. 5. LD. DR, RELYING ON THE ORDER OF THE AO, SUBMITTE D THAT AS PER THE INFORMATION RECEIVED FROM INVESTIGATION WING OF THE DEPARTMENT THAT THE AFORESAID FOUR PARTIES ARE INVOLVED IN PROVIDING AC COMMODATION ENTRIES, THE AO ISSUED SUMMONS AND ASKED THE ASSESSEE TO PRODUCE TH EM BUT THE PARTIES WERE NOT REPRESENTED PHYSICALLY. HE FURTHER SUBMITTED T HAT NO DOCUMENTARY PROOF EVIDENCING THE SOURCE OF FUNDING WAS FURNISHED. HE SUBMITTED THAT THE AO OBSERVED THAT THE ASSESSEE FILED COPIES OF PAN CARD S, SHARE APPLICATION MONEY FORM, CONFIRMATION OF PARTY, STATEMENT OF BANK ACCO UNT AND BALANCE SHEET OF 19 OUT OF TOTAL 23 COMPANIES BUT NO DETAILS WERE FILED IN RESPECT OF THE ABOVE SAID FOUR PARTIES WHO ARE ALLEGED ENTRY OPERATORS. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE HAS ROUTED ITS UNACCOUNTED MONEY THROU GH THEM IN THE GUISE OF APPLICATION MONEY. IN THIS VIEW, LD. AR SUBMITTED THAT THE ORDER OF THE LD. CIT (A) BE SET ASIDE AND ORDER OF THE AO BE RESTORED. 11 ITA NO.1722/DEL/2011 6. ON THE OTHER HAND, THE LD. AR FOR THE ASSESSEE R EITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT (A) AND SUBMITTED THAT THE ASSESSEE HAD FURNISHED THE LIST OF SHAREHOLDERS TO WHOM SHARES WERE ISSUED AND ALSO FURNISHED EVIDENCES REGARDING EXISTENCE, IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. HE SUBMITTED THAT ASSESSING OFFICER FAILED TO BRING ANY EVIDENCE ON RECORD BEFORE MAKING ADDITION OF RS.70,00,000/- U/S 68 OF THE ACT ON ACCOUNT OF SHARE CAPITAL RECEIVED AND RS.1,40,000/- ON ACCO UNT OF COMMISSION PAID FOR TAKING ACCOMMODATION ENTRIES. HE FURTHER SUBMITTED THAT AFTER GIVING PROPER EXPLANATION AND ADDUCING EVIDENCE IN RESPECT OF EXI STENCE, IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE RECEIPT OF SHARE CAPITAL BY BOTH THE ASSESSEE AND THE PERSONS TO WHOM SUMMONS WERE ISSUE D, THE AO HAD NOT ISSUED ANY SHOW CAUSE NOTICE BEFORE MAKING ADDITION THAT H E WAS NOT SATISFIED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE. HE SUBMIT TED THAT THE ASSESSEE HAD FURNISHED DETAILS OF SHARE CAPITAL RECEIVED AGGREGA TING TO RS.4,20,00,000/- FROM 23 PARTIES ALONG WITH CONFIRMATIONS VIDE LETTERS DA TED 16.11.2009 AND 08.12.2009 WHICH INTER ALIA INCLUDED PAN AND CONFIR MATION FROM THE SAID FOUR PARTIES ALSO FROM WHOM RS.70 LAKHS WAS RECEIVED ON ACCOUNT OF SHARE CAPITAL. HE FURTHER SUBMITTED THAT THE AO MADE ADDITIONS BAS ED ON DOUBT, SUSPICION, CONJECTURE AND SURMISES; AND THE AO FAILED TO BRING ANY MATERIAL ON RECORD THAT THE CONTENTION OF THE ASSESSEE IS FALSE. HE SUBMITT ED THAT THE ASSESSEE AND THE PERSONS TO WHOM SUMMONS WERE ISSUED HAVE FURNISHED SUFFICIENT DETAILS / DOCUMENTS TO PROVE THE EXISTENCE, IDENTITY, CREDITW ORTHINESS AND GENUINENESS OF 12 ITA NO.1722/DEL/2011 RECEIPT OF SHARE CAPITAL BY SUBMITTING CONFIRMATION , ROC RECORDS, INCOME TAX PARTICULARS OF THE SHARE APPLICANTS AND THEIR BANK STATEMENTS, THEIR AUDITED FINANCIAL STATEMENTS AND EVIDENCE REGARDING ISSUE O F SHARES TO THE SHARE APPLICANTS. HE SUBMITTED THAT ASSESSEE HAD RECEIV ED SHARE APPLICATION MONEY THROUGH PROPER BANKING CHANNEL. HOWEVER, THE AO FA ILED TO APPRECIATE THE EXPLANATION AND DOCUMENTS SUBMITTED BEFORE HIM DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS. HE SUBMITTED THAT THE SAID EXPLANATION AND DOCUMENTS FURNISHED ARE PART OF THE ASSESSMENT RECORDS AND AL SO PLACED BEFORE THE LD. CIT (A). AS REGARDS DECLINE TO PROVIDE INFORMATION OF INVESTIGATION WING, THE LD. AR SUBMITTED THAT THE AO FAILED TO PROVIDE THE COPY OF INFORMATION RECEIVED FROM DIT (INVESTIGATION). THE LD. AR FURTHER SUBM ITTED THAT IN THE REMAND PROCEEDINGS ALSO, THE AO WAS NOT ABLE TO ADDUCE ANY EVIDENCE ON RECORD THAT THE CONTENTIONS OF THE ASSESSEE ARE FALSE. HE ALSO POI NTED OUT THAT IT IS WELL SETTLED LAW THAT NON-APPEARANCE OF PERSONS TO WHOM SUMMONS U/S 131 OF THE ACT WERE ISSUED, DOES NOT MAKE THE ASSESSEE LIABLE TO PRODUC E SUCH PARTIES. HE SUBMITTED THAT THE ASSESSEE DID NOT HAVE THE LEGAL POWER TO E NFORCE THE ATTENDANCE, AS SUCH, HE COULD NOT BE CALLED UPON TO DO SOMETHING WHICH W AS BEYOND HIS POWER AND ANY ADVERSE INFERENCE DRAWN ON THE BASIS OF SUCH FA ILURE OF THE ASSESSEE, COULD NOT BE SUSTAINED. ACCORDINGLY, HE PLEADED TO UPHOL D THE ORDER OF THE LD. CIT (A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. WE FIND THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORPORATED ON 4.02.2006 WITH THE MAIN 13 ITA NO.1722/DEL/2011 OBJECT OF CARRYING OUT BUSINESS OF REAL ESTATE AND INFRASTRUCTURE DEVELOPMENT. THIS IS THE FIRST YEAR OF OPERATION OF THE ASSESSEE AND ACCORDING TO THE ASSESSEE, IT HAS NOT COMMENCED THE BUSINESS OF REAL ESTATE. THE ASSESSEE RECEIVED SHARE CAPITAL INCLUDING SHARE PREMIUM AGGREGATING TO RS.4 .20 CRORES DURING THE ASSESSMENT YEAR WHICH WAS EITHER INVESTED IN BANK D EPOSITS OR USED FOR GIVING LOANS AND IT EARNED INTEREST INCOME THEREON DURING THE FINANCIAL YEAR UNDER CONSIDERATION. THE ASSESSEE HAD ISSUED 4,20,000 EQ UITY SHARES OF RS.10 EACH AT A PREMIUM OF RS.90/- EACH TO 23 COMPANIES INCORPORA TED UNDER THE PROVISIONS OF COMPANIES ACT, 1956 WHICH HAS BEEN DULY REFLECTE D IN THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31.03.2007. THE A O, DURING THE SCRUTINY, ASKED THE ASSESSEE TO FURNISH DETAILS OF SHARES AGG REGATING TO 4,20,000 ISSUED TO AUTHORIZED PERSONS ALONG WITH THE EVIDENCES REGARDI NG EXISTENCE, IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION ENTERED WITH THE SAID SHAREHOLDERS. AS PER THE AO, THE ASSESSEE FURNISHE D LIST OF SHAREHOLDERS ALONG WITH THEIR NAMES, ADDRESSES, PAN, SHARES ALLOTTED A ND AMOUNT RECEIVED VIDE REPLIES DATED 16.11.2009 AND 08.12.2009. THE AO NO TES THAT OUT OF THE 23 SHAREHOLDERS, 4 PARTIES FROM THIS LIST FIGURES IN T HE INFORMATION ON ACCOMMODATION ENTRIES RECEIVED FROM THE DIRECTORATE OF INCOME-TAX (INVESTIGATION), NEW DELHI AND THEY WERE M/S. ARCHI T FINCAP LIMITED RS.9 LAKHS, M/S. AT ALL TIME YOUR SECURITIES LTD. RS.42, 40,000/-, M/S. FOCUS INDUSTRIAL RESOURCES LIMITED RS.6,60,000/- AND M/S. PARAS FINCAP PVT. LTD. RS.12 LAKHS, THUS TOTALING AMOUNT TO RS.70 LAKHS. THEREAFTER, WE FIND THAT THE 14 ITA NO.1722/DEL/2011 AO ASKED THE ASSESSEE TO PROVE THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE AFORESAID 4 PARTIES AND ISSUED SUMMONS U/S 1 31 OF THE ACT TO THE AFORESAID FOUR COMPANIES. THE AO ADMITS THAT WRITT EN SUBMISSIONS ENCLOSING THE CONFIRMATION OF THE 4 PARTIES AND STATEMENT OF BANK ACCOUNT WERE RECEIVED BY POST FROM THE ABOVE SHAREHOLDERS. THE AO, HOWEV ER, WAS NOT SATISFIED BECAUSE NONE APPEARED PERSONALLY BEFORE HIM AND NO DOCUMENTARY EVIDENCE EVIDENCING SOURCE OF FUND WERE FURNISHED BEFORE HIM . THEREFORE, BECAUSE OF NON-APPEARANCE OF 4 PARTIES AND THE SOURCE OF THEIR FUND IN THE BANK ACCOUNTS, THE AO WAS OF THE OPINION THAT THE ASSESSEE FAILED TO PROVE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE BROUGHT TO THE NOTICE OF THE CIT (A) THAT BASED ON SOME REPORT OF THE INVESTIGATION WING, THE AO HAD P REJUDICED MIND AGAINST THE FOUR COMPANIES WHO HAD A SHAREHOLDING OF RS.70 LAKH S AND DID NOT PROVIDE THE ASSESSEE THE COPY OF THE INFORMATION WHICH WAS USED AGAINST IT WITHOUT AFFORDING AN OPPORTUNITY TO REBUT/CROSS EXAMINE VIT IATES THE ENTIRE ADDITION. THE CIT (A) SOUGHT REMAND REPORT OF THE AO WHEREIN THE AO ACCEPTED THAT HE HAS SUBSTANTIALLY RELIED UPON THE INFORMATIONAL INPUTS PROVIDED BY THE INVESTIGATION WING, NEW DELHI FOR THOSE FOUR PARTIES; AND WE FIND THAT THE ASSESSEE IN ORDER TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE 4 PARTIES HAD SUBMITTED CONFIRMATION ROC DOCUMENTS, INCOME-TAX RE TURNS, PARTICULARS OF THE SHARE APPLICANTS AND THEIR BANKS STATEMENTS, THEIR AUDITED FINANCIAL STATEMENTS AND EVIDENCE REGARDING ISSUE OF SHARES TO THE SHARE APPLICANTS. WE FIND THAT IN 15 ITA NO.1722/DEL/2011 THE REMAND REPORT, THE AO HAS FAILED TO BRING ANY M ATERIAL ON RECORD THAT WOULD SUGGEST THAT THESE DOCUMENTS WERE FALSE OR FABRICAT ED. THE AO BY HEAVILY RELYING ON THE INVESTIGATION WING REPORT HAS SIMPLY MADE AN OPINION BECAUSE THE 4 PARTIES DID NOT TURN UP IN FRONT OF HIM AND COULD NOT SUBSTANTIATE ITS SOURCE OF SOURCE, SO HE DISBELIEVED THEM WHICH CANNOT SUSTAIN IN THE EYES OF LAW. THE CIT (A) HAS MADE A FINDING THAT THE AMOUNT TOTALING RS.70 LAKHS WAS RECEIVED FROM 4 PARTIES/COMPANIES FROM ACCOUNT PAYEE CHEQUES /DEMAND DRAFTS. WE TAKE NOTE THAT THE AO HAS ACCEPTED THE SHARE APPLICATION MONEY/PREMIUM AMOUNT RECEIVED FROM 19 PARTIES AND ONLY DOUBTED 4 PARTIES ON THE BASIS OF THE INFORMATION FROM THE INVESTIGATION WING. WE TAKE N OTE THAT THE SUMMONS ISSUED U/S 131 OF THE ACT TO THE AFORESAID 4 PARTIE S WERE DULY SERVED UPON THEM AT THE ADDRESSES PROVIDED BY THE ASSESSEE AND REPLI ES WERE FILED BY THE SAID 4 PARTIES ALONG WITH NECESSARY DOCUMENTS BEFORE THE A O INCLUDING THE CONFIRMATIONS AND THEIR BANK STATEMENTS. THE AO IN HIS REMAND REPORT HAS ADMITTED THAT HE HAS HEAVILY RELIED ON THE INPUTS O F INVESTIGATION WING WHICH PIECE OF EVIDENCE WAS NOT ADMITTEDLY GIVEN TO THE A SSESSEE DURING THE TIME OF THE ASSESSMENT PROCEEDINGS WHICH AMOUNTS TO VIOLATI ON OF NATURAL JUSTICE. IF THE AO WAS HEAVILY RELYING ON THE INVESTIGATION WING RE PORT THEN HE WAS DUTY- BOUND TO HAVE PROVIDED A COPY OF THE SAME TO THE AS SESSEE SO THAT HE CAN REBUT OR BRING EVIDENCES TO PROVE HIS CASE. WHEN OUT OF 23 SHAREHOLDERS 19 SHAREHOLDERS IDENTITY, CREDITWORTHINESS AND GENUIN ENESS WERE PROVED WITH THE SAME SET OF DOCUMENTS, TAKING OUT 4 PARTIES TO MAKE AN ADDITION OF RS.70 LAKHS 16 ITA NO.1722/DEL/2011 OUT OF RS.4.20 CRORES HAS BEEN MADE U/S 68 OF THE A CT CANNOT BE SUSTAINED. THE CIT (A) HAS ALSO RIGHTLY TAKEN NOTE THAT NO ADVERS E COMMENTS WERE MADE BY THE AO ON THE MERIT OF THE CASE AND DID NOT CAST AN Y FINDING THAT WHETHER THE DOCUMENTS FURNISHED BY THE ASSESSEE TO PROVE IDENTI TY, CREDITWORTHINESS AND GENUINENESS OF THE 4 SHAREHOLDERS WERE BOGUS OR FAB RICATED. IN THE LIGHT OF THE ABOVE, WE FIND THAT THE LD. CIT (A) HAS RIGHTLY DIS CUSSED A NUMBER OF JUDICIAL PRECEDENTS TO DELETE THE ADDITION MADE BY THE AO. SO, THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT (A ) AND, THEREFORE, WE DISMISS THE APPEAL OF THE REVENUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS DAY OF 11 TH JANUARY, 2016. SD/- SD/- (PRASHANT MAHARISHI) (A.T.VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 11 TH DAY OF JANUARY, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.