ITO, Jaipur V. LAND MARK DILSAY P LTD, Jaipur

ITA 178/JPR/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6109 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 23-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Unexplained cash credit; Bogus Share capital; Search and seizure; Share purchase agreement; Opportunity of being heard; Principle of natural justice; Opportunity of cross examination; Question of law; Third party statement; Accommodation entries; Assessment record; Onus to prove; Reason to believe; Reassessment proceedings
• Section: 143(3); 133A; 153A; 133(6); 147; 131; 148; 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 178/JP/2015 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-2(2), JAIPUR. CUKE VS. M/S LAND MARK DEALERS (P) LTD., 411, 3 RD FLOOR, SHALIMAR COMPLEX, CHURCH ROAD, M.I. ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACL 2002 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT IZR;K{KSI.K @ C.O. NO. 18/JP/2015 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 177/JP/2015) FU/KZKJ.K O'KZ @ ASSESSMENT YEAR 2006-07 M/S LAND MARK DEALERS (P) LTD., 411, 3 RD FLOOR, SHALIMAR COMPLEX, CHURCH ROAD, M.I. ROAD, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD-2(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA- @ PAN/GIR NO.: AAACL 2002 N IZR;K{KSID @ OBJECTOR IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. SEEMA MEENA (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06/06/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 08/06/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THE APPEAL BY REVENUE AND CROSS OBJECTION BY ASSESS EE ARISE FROM THE ORDER DATED 30/12/2014 OF LD. CIT (A)-I, JAIPUR PERTAINING TO THE A.Y. 2006-07. ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 2 2. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30/11/ 2006 DECLARING NIL INCOME WITH ITO, WARD 6(1), JAIPUR. ALONGWITH THE RET URN, THE ASSESSEE FILED FINANCIAL STATEMENTS INCLUDING THE DETAILS OF THE SHARE CAPITAL. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT). NOTICE U/S 148 OF THE ACT WAS ISSUED ON 29/03/ 2012 BY THE ITO, WARD 4(3), NEW DELHI ON THE BASIS OF INFORMATION RECEIVED FROM O/O CIT(C)-II, NEW DELHI. DURING THE YEAR, THE ASSESSEE HAS RAISED SHARE CAPITAL OF RS. 1,10,00,000/- FROM VARIOUS PARTIES. THE ASSESSING OF FICER HAS CONSIDERED THE SHARE CAPITAL OF RS. 1,09,00,000/- RECEIVED FRO M FOURTEEN (14) COMPANIES AS UNEXPLAINED AND MADE THE ADDITION. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), WHO AFTER C ONSIDERING THE FACTS AND SUBMISSIONS OF THE CASE, DELETED THE ADDITION B Y HOLDING AS UNDER: 3.3.2 I HAVE DULY CONSIDERED A/OS CONTENTION AND APPELLANTS SUBMISSION, PERUSED THE MATERIALS ON RECORD, FACTUAL MATRIX OF THE CASE AND ALSO APPLICABLE LEGAL POSITION. THE CASE WAS RE-OPENED ON 30/03/2012 ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING DELHI, WITH REGARD TO SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. ASSESSEE HAS FILED ITS OBJECTION F OR RE-OPENING OF ASSESSMENT ON 20.02.2013 BUT AO WAS UNCONVINCED WITH THAT AND REJ ECTED THE SAME. DURING THE REASSESSMENT PROCEEDING, ASSESSEE PROVIDED ALL PRIMA FACIE DETAILS SUCH AS NAME WITH COMPLETE ADDRESS, PAN, CONFIRMATION, BANK STATEMENT, SHARE APPLICATION FROM & ALLOTMENT ETC. ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 3 ASSESSEE VIDE LETTER DATED 25.03.2013 HAS REQUESTE D AO TO PROVIDE AN OPPORTUNITY TO CROSS-EXAMINE SH. ASEEM GUPTA AND OT HER DIRECTORS OF THESE BENEFICIARY COMPANIES. HOWEVER, THE SAME WAS NOT OF FERED BY THE AO. IN VIEW OF THESE FACTS, THE REFERENCE TO THE STATEMENTS MAD E BY SOME OF THE PERSONS RELATED WITH THE SAID INVESTING COMPANIES IS OF NO EFFECT/USE BECAUSE SUCH STATEMENTS COULD NOT HAVE BEEN UTILIZED AGAINST THE ASSESSEE-COMPANY WITHOUT PROVIDING AN OPPORTUNITY OF CROSS-EXAMINATION, WHIC H WAS NOT AFFORDED BY THE AO IN THIS CASE. IT IS ALSO FOUND THAT THE AO COULD NOT BRING OUT ANY MATERIAL TO DISAPPROVE THE GENUINENESS OF CONFIRMATIONS ALONG W ITH OTHER PRIMA FACIE DETAILS FILED BY THE ASSESSEE. THEREFORE, THE DECIS ION GIVEN BY THE HON'BLE SUPREME COURT, IN THE CASE OF CIT V. LOVELY EXPORTS (P.) LTD. [2008] 216 CTR 195, WILL APPLY HERE AND ADDITION MADE BY THE AO IS UNCALLED FOR. 3.3.2.1 BURDEN OF PROOF IS NOT STATIC. ONCE THE ASS ESSEE HAS PROVIDED RELEVANT EVIDENCES THEN THE BURDEN SHIFTS ON THE AO TO DISAP PROVE THEIR GENUINENESS WITH NEW FACTS. HOWEVER ON THE BASIS OF DOCUMENTARY EVIDENCES SUCH AS (I) PANS OF ALL FOURTEEN (14) CON CERNS WHO HAVE SUBSCRIBED TO THE SHARE CAPITAL (II) BANK STATEMENT S (III) CHEQUE DETAILS (IV) CONFIRMATIONS RECEIVED FROM SHARE HOLDERS (V) COPY OF ROC RETURN FILED AND (VI) SHARE ALLOTMENT DETAILS , IT CAN BE CONCLUDED THAT ASSESSEE HAD BEEN ABLE TO PROVE ITS CASE AND THAT AO COULD NOT S HIFT THE BURDEN BACK ON TO THE ASSESSEE WITHOUT PRODUCING ANY TANGIBLE M ATERIAL TO DOUBT THE VERACITY OF DOCUMENTS FURNISHED BY THE ASSESSEE. TH EREFORE, ASSESSEE HAS BEEN ABLE TO DISCHARGE ITS BURDEN TO ESTABLISH THEI R IDENTITY, CREDITWORTHINESS AND GENUINENESS AS REGARDS THE TRA NSACTIONS CONCERNING THE ALLOTMENT OF SHARES. FROM ROC RETURN, IT IS ALS O SEEN THAT ONCE SHARE ALLOTMENT IS DONE, WHOLE PROCESS OF SHARE CAPITAL S UBSCRIPTION STARTING FROM SHARE CAPITAL APPLICATION RECEIVED FROM AFOREM ENTIONED FOURTEEN (14) CONCERNS, HAS REACHED ITS FINALITY. EVEN IN VI EW OF THESE DOCUMENTARY FACTUAL EVIDENCES, AO WAS NOT ABLE TO PROVE HIS CON TENTION THAT ASSESSEES OWN MONEY WAS PLOUGHED BACK IN FORM OF S HARE CAPITAL ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 4 RECEIVED FROM THESE FOURTEEN (14) CONCERNS WHOSE RE FERENCES WERE FOUND IN THE SEARCH & SEIZURE REPORT OF SK JAIN GRO UP. THE IMMEDIATE SOURCE IN THE BANK ACCOUNT OF THE SHAREHOLDERS IS T HROUGH TRANSFER, NOT BY CASH. APART FROM THESE FACTS, ASSESSEE HAS ALSO REL IED UPON RATIO OF FOLLOWING DECISIONS WHICH ARE DIRECTLY IN ITS FAVOU R: AMBRESHWAR GRIH NIRMAN SAMITI 84 ITD 139 STARPTEX INDIA P LTD 84 ITD 320 T.S VENKETATION 74 ITD 298 AMARJIT SINGH BAKSHI (HUF) 263 ITR 75 SMC SHARE BROKER LTD 159 TAXMAN 306 JAFFERALI K RATTONSEY 53 SOT 220 NIPUAN AUTO P LTD 89 DTR 342 KAMDHENU STEEL & ALLOYS LTD AND OTHERS 68 DTR 38 DOLPHINE MARBLES (P) LTD 57 DTR 58 DADHIMATI SYNTEX P LTD 259/JODH/2013 DT 31/7/13. H ONBLE ITAT JODHPUR BENCH BHARTI SYNTEX LTD 52 DTR 73 ( HONBLE ITAT JAIPUR BENCH) 3.3.2.2 FURTHER, I ALSO FIND THAT THE ESTABLISHED L EGAL POSITION ON THE SUBJECT UNDER CONSIDERATION AS ADOPTED IN A LARGE NUMBER OF CASE LAWS IS AS FOLLOWS:- (I) AS HELD IN THE CASE OF R.B. MITTAL V. CIT 246 ITR 283 (AP) IN AN ENQUIRY U/S 68 OF THE ACT, THE RULE OF AUDI ALTERAM PARTERM HAS TO BE OBSERVED AND THE ASSESSEE MUST BE GIVEN A FAIR AND REASONABLE HE ARING TO DISCHARGE THE BURDEN CAST ON HIM U/S 68 OF THE ACT. (II) JURISDICTIONAL ITAT BENCH JAIPUR IN CASE OF BH ARTI SYNTEX LTD 52 DTR 73 HAS HELD INTER ALIA AS UNDER: .. HELD THAT CERTIFICATE OF INCORPORATION OF INVESTOR COMPA NIES WAS PLACED ON RECORD. IT MEANS THAT THEY WERE REGISTERE D COMPANIES UNDER THE COMPANIES ACT. PANS OF ALL THE THREE PARTIES HAD BE EN GIVEN AND SURPRISINGLY NO ENQUIRY HAD BEEN MADE BY THE DEPARTMENT FROM ITS OWN DEPARTMENT WHETHER THE PANS ALLOTTED TO THESE PARTIES WERE COR RECT OR NOT OR THESE COMPANIES WERE ASSESSED TO TAX OR NOT. THE ASSESSEE -COMPANY HAD FILED COPY OF ITS BALANCE SHEET ALSO SHOWING THE SHARES O F THE ASSESSEE-COMPANY IN THEIR BOOKS OF ACCOUNT ON SAID ASSETS. YEAR-WISE THESE SHARES HAD BEEN ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 5 SHOWN IN THEIR BALANCE SHEET AND THEY HAD STATED TH AT THEY WERE REGULARLY ASSESSED TO TAX. COPY OF CONFIRMATION ALONG WITH AF FIDAVIT AND SHARE CERTIFICATES ISSUED WERE ALSO PLACED ON RECORD. THE REFORE, BY MERELY SAYING THAT THESE PARTIES WERE NOT TRACEABLE AND TREATING THE SHARE APPLICATION MONEY AS UNEXPLAINED MONEY UNDER SECTION 68 WAS NOT CORRECT. THE ASSESSEE HAD FILED NECESSARY DETAILS FOR THE PURPOS E OF PROVING THAT IT HAD RECEIVED ACTUAL SHARE APPLICATION MONEY AND THE SHA RES HAD BEEN ALLOTTED. SHARES HAD BEEN ALLOTTED TO THE RESPECTIVE COMPANIE S. THE ASSESSEE- COMPANY WAS SHOWING THE SHAREHOLDERS IN ITS BALANCE SHEET AND THESE COMPANIES WERE ALSO SHOWING THE ASSETS IN THEIR BAL ANCE SHEET IN THE SHAPE OF SHARES IN THE ASSESSEE-COMPANY. ALL THESE COMPANIES WERE ASSESSED TO TAX AND, THEREFORE, THE ADDITION SUSTAINED BY THE C OMMISSIONER (APPEALS) WAS NOT JUSTIFIED.(STRESS SUPPLIED) FURTHER, ITAT JODHPUR BENCH IN CASE OF DADHIMATI SY NTEX P LTD 259/JODH/2013 DATED 31/7/13 HAS ALSO ENDORSED THIS VIEW. (III) IT IS ALSO SETTLED LAW THAT IT IS MANDATORY F OR 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 R ECORDED 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 RENDERED ON UNRELIABLE AND ADDITIONS MADE ON THE BASIS OF SU CH MATERIAL/STATEMENT ETC. SHALL BE RENDERED ILLEGAL. IT IS FACT THAT AO DID NOT PROVIDE ANY OPPORTUNITY TO CROSS- EXAMINE ANY OF TH E PERSONS NAMELY, SH. S K JAIN OR SH. V K JAIN OR SH. ASSEM KUMAR GUPTA O R SH. RAJESH AGRAWAL WHOSE STATEMENTS HAVE REFERRED/RELIED IN THE ASSESS MENT ORDER. REFERENCE IN THIS REGARD CAN BE MADE TO THE DECISIO NS 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 O F 2007, 174 TAXMANN 440 (RAJ.) AND LAXMAN BHAI PATEL (ORDER OF HON'BLE GUJARAT HIGH COURT DATED 22/07/2008 IN ITR NO. 41/1997). ADMITTEDLY, THESE STATEMENTS WERE NOT RECORDED BY THE AO BUT WERE RECORDED BY THE INVESTIGATION WING DELHI AT THE BAC K OF THE ASSESSEE. AO ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 6 HAS EVEN NOT REFERRED TO THE RELEVANT PORTION OF SU CH STATEMENT SO AS TO ESTABLISH THE COLLUSIVE ARRANGEMENT THE ASSESSEE CO MPANY HAD WITH THESE PERSONS. (IV) FURTHER, IN THE CASE OF N.P. GARODIA (ORDER DATED13/01/2009 OF HON'BLE P & H HIGH COURT IN ITA NO. 808 OF 2008) AND IN THE C ASE OF BRIJ PAL SHARMA (ORDER DATED 17.02.2009 IN ITA NO. 685 OF 2008 OF H ON'BLE P & H HIGH COURT) IT WAS HELD THAT WHERE THE ASSESSEE PROVIDES IDENTITY AND DETAILS PERTAINING TO THE LENDERS/CREDITORS BUT IS UNABLE T O PRODUCE THEM AND REQUESTS THE AO TO ISSUE SUMMONS U/S 131 OF THE ACT FOR THEIR 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 CORPORATION PVT. LTD. 158 ITR 78 (SC) AND ANIS AHMED 297 ITR 441 (SC) THAT MERE NON- PRODUCTION OF THE LENDER/SHAREHOLDER CANNOT BE A GR OUND FOR MAKING ADDITION U/S 68 OF THE ACT. (V) SIMILARLY AS HELD IN THE CASE OF CIT V. METACHEM INDUSTRIES (2000) 245 ITR 160 (MP) WHERE A CREDIT IS SHOWN TO HAVE COME FROM A PERSON OTHER THAN THE ASSESSEE, THERE IS NO FURTHER RESPONSIBILITY OF THE ASSESSEE TO SHOW THAT IT HAS COME FROM ACCOUNTED SOURCE OF THE LENDE R, AS LONG AS THE FACT THAT HE HAD MADE THE ADVANCE AND WAS CAPABLE OF MAK ING 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. (VI) FURTHER, I FIND THAT THE HONBLE APEX COURT IN CIT V LOVELY EXPORTS (P) LTD. (2008) 216 CTR 195 HAS HELD THAT THE EVEN IF THE SHARE APPLICATION MON EY RECEIVED BY THE APPELLANT COMPANY IS FROM ALLEGED B OGUS SHAREHOLDER, WHOSE IDENTITY IS PRODUCED BY THE APPELLANT COMPANY , THE REVENUE CAN ALWAYS PROCEED AGAINST SUCH SHAREHOLDERS AND IF NEC ESSARY REOPEN THEIR ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 7 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 R ETAILERS (P) LTD. SLP NO. CC 451/2008 ARISING OUT OF ITA NO. 576/2004 OF THE HIGH COURT OF CALCUTTA), CIT V. PONDY METAL & ROLLING MILLS (P) L TD. (SLP NO. CC 12860/2007 ARISING OUT OF ITA NO. 788/2006 OF THE H IGH COURT OF DELHI) AND CIT V. GENERAL EXPORTS LTD. (SLP NO. 21349/2007 ARISING OUT OF ITA NO. 880/2006 OF THE HIGH COURT OF DELHI). FOLLOWING THE AFORESAID DECISION OF THE APEX COURT IN CIT V. LOVELY EXPORTS (P) LTD. (S UPRA), THE HON'BLE BOMBAY HIGH COURT IN THE RECENT JUDGMENT IN THE CAS E OF CIT V CREATIVE WORLD TELIFILMS LTD. (ORDER DATED 12.10.2009 IN ITA (L) NO. 2182 OF 2009) HAS HELD INTER ALIA 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 JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD . REPORTED IN (2008) 216 CTR 195 (SC) WHEREIN THE APEX COURT OBSERVED THAT IF TH E SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BO GUS SHAREHOLDERS, 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 ASSES SEE HAS GIVEN THE DETAILS OF NAME AND ADDRESS OF THE SHAREHOLDERS, THEIR PANIGIR NUMBER AND HAD ALSO GIVEN THE CHEQUE NUMBER, NAME OF THE BANK. IT WAS E XPECTED ON THE PART OF THE ASSESSING OFFICER TO MAKE PROPER INVESTIGATION AND REACH THE SHAREHOLDERS. THE ASSESSING OFFICER DID NOTHING EXCEPT ISSUING SU MMONS WHICH WAS ULTIMATELY RETURNED BACK WITH AN ENDORSEMENT 'NOT T ENABLE'. IN OUR CONSIDERED VIEW, THE ASSESSING OFFICER OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARD, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS SO AS TO REACH THE SHAREHOLDERS SINCE ALL THE RELEVANT MATERIAL DETAIL S AND PARTICULARS WERE GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER. IN THE AB OVE CIRCUMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE FAULTED. NO SUBSTAN TIAL QUESTION OF LAW IS INVOLVED IN THE APPEAL. IN THE RESULT, THE APPEAL I S DISMISSED IN LIMINNI WITH NO ORDER AS TO COSTS. ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 8 SIMILAR DECISION HAS ALSO BEEN TAKEN BY THE HON'BL E CHHATTISGATH HIGH COURT IN ACIT V VENKATESHWAR ISPAT PVT. LTD. (2009) 319 ITR 393. (VII) FURTHER, THE HON'BLE DELHI HIGH COURT RELYING ON THE JUDGMENT OF THE APEX COURT IN LOVELY EXPORTS PVT. LTD. (SUPRA) HAS DISMISSED THE DEPARTMENTS APPEALS IN LIMINE VIDE ITS RECENT ORDERS IN THE CASE OF CIT V. DWARKA DHISH INVESTMENT PVT. LTD. AND DWARKDHISH CAPITAL PVT. LTD (ITA NOS. 911/2010 AND 913/2010 ORDER DATED 02/08/2010, CIT VS. GREEN TECH TOWER BUILDERS PVT. LTD. (ITA NO. 1113/2010 ORDER DATED 1 2.08.2010) AND CIT V. ULTRATECH FINANCE & INVESTMENT LTD. (ITA NO. 1122/2010 ORDER DATED 12.08.2010). IN THE CASE OF DWARKADHISH INVESTMENT PVT. LTD. AND DWARAKDHISH CAPITAL PVT. LTD. ( SUPRA) THE HON'BLE DELHI HIGH COURT VIDE ITS COMMON ORDER DATED 02.08.2010 HAS INTER ALIA OBSERV ED 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 STATI C ONE. THOUGH IN SECTION 68 PROCEEDINGS, THE INITIAL BURDEN OF PROOF LIES ON TH E ASSESSEE YET ONCE HE PROVES THE IDENTITY OF THE CREDITORS/SHARE APPLICAN TS BY EITHER FURNISHING THEIR PAN NUMBER OR INCOME TAX ASSESSMENT NUMBER AN D SHOWS THE GENUINENESS OF TRANSACTION 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 CREDIT ORS/SHARE APPLICANTS, COULD NOT BE FOUND AT THE ADDRESS GIVEN. IT WOULD N OT GIVE THE REVENUE THE RIGHT TO INVOKE SECTION 68. ONE MUST NOT LOSE SIGHT OF THE FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSON. MOREOVER, IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT TO PROVE THE SOURCE OF SOURCE'. .. 10. WE ARE ALSO INFORMED THAT A SPECIAL LEAVE PET ITION AGAINST THE AFORESAID DIVISION BENCH JUDGMENT IN THE CASE OF THE RESPONDE NT- ASSESSEE HAS BEEN DISMISSED BY THE SUPREME 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 ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 9 AS THE DIVISION BENCH JUDGMENT OF THIS COURT IN THE CASE OF THE RESPONDENT- ASSESSEE ITSELF. 11. CONSEQUENTLY, WE ARE OF THE VIEW THAT THE PRE SENT APPEALS AMOUNT TO RELITIGATION. THE SUPREME COURT IN KK MODI VS. KN. MODI AND ORS., (1998) 3 SCC 573 HAS HELD, 'IT IS AN ABUSE OF THE PROCESS OF THE COURT AND CONTRARY TO JUSTICE AND PUBLIC POLICY FOR A PARTY TO RELITIGATE THE SAME ISSUE WHICH HAS ALREADY BEEN TRIED AND DECIDED EARLIER AGAINST HIM. THE RE-AGITATION MAY OR MAY NOT BE BARRED AS RES JUDICATA. BUT IF THE SAME ISSUE IS SOUGHT TO BE RE AGITATED, IT ALSO AMOUNTS TO AN ABUSE OF THE PROCES S OF THE COURT . 12. THOUGH WE WERE INITIALLY INCLINED TO IMPOSE C OSTS YET WE ARE OF THE OPINION THAT ENDS OF JUSTICE WOULD BE MET BY GIVING A DIRECTION TO THE REVENUE TO BE MORE CAREFUL BEFORE FILING APPEALS IN A ROUTINE MANNER. IN OUR VIEW, APPEAL SHOULD NOT BE FILED IN MATTERS WHERE E ITHER NO QUESTION OF LAW ARISES OR THE ISSUE OF LAW IS A SETTLED ONE. WE GIV E THIS DIRECTION BECAUSE THE JUDICIAL CAPITAL IN TERMS OF MANPOWER AND RESOURCE S IS EXTREMELY LIMITED. 13. REGISTRY IS DIRECTED TO COMMUNICATE COPIES OF THIS ORDER TO ALL THE CHIEF COMMISSIONERS OF INCOME TAX IN DELHI FOR NECESSARY ACTION. WITH THE AFORESAID DIRECTION, THE PRESENT APPEALS ARE DISMIS SED IN LIMINE BUT WITHOUT ANY ORDER AS TO COSTS. ' (VIII) IN THE CASE OF CIT VS. FAIR FINVEST LTD . ITA NO. 232/2012 DATED 22-11- 2012, HONBLE DELHI HIGH COURT HAS HELD AS UNDER:- 6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE THE DISCUSSION BY THE CIT(APPEALS) WOULD REVEAL THAT TH E ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED COPIES ISSUED BY THE REGISTRAR OF COMPANIES IN RELATION TO THE SHARE APPLICATION, AFFIDAVITS OF TH E DIRECTORS, FORM 2 FILED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APP LICANT FOR COMPANYS 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 INVESTIGATION REPORT AND THE STATEMENT OF MR . MAHESH GARG. TO ELEVATE THE INFERENCE WHICH CAN BE DRAWN ON THE BASIS OF RE ADING OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPER, MORE S O WHEN THE ASSESSEE PRODUCED MATERIAL. THE LEAST THAT THE ASSESSING OFF ICER OUGHT TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NECESSARY, IN VOKING HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIREC TORS. NO EFFORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCLOSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSI NG OFFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CER TAIN FACTS AND THE ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 10 STATEMENTS OF MR. MAHESH GARG THAT THE INCOME SOUGH T TO BE ADDED FELL WITHIN THE DESCRIPTION OF SECTION 68. 7. HAVING REGARD TO THE ENTIRETY OF FACTS AND CIR CUMSTANCES, THE COURT 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). 8. THE DECISION IN THIS CASE IS BASED ON THE PEC ULIAR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENCE IN SUPPORT OF THE SHARE APPLICATION MONIES, IT IS OPEN TO THE ASSESSING OFFICER TO EXAMINE IT AND REJECT IT ON TENABLE GROUNDS. IN CAS E HE WISHES TO RELY ON THE REPORT OF THE INVESTIGATION AUTHORITIES, SOME MEANI NGFUL ENQUIRY OUGHT TO BE CONDUCTED BY HIM TO ESTABLISH A LINK BETWEEN THE AS SESSEE AND THE ALLEGED HAWALA OPERATORS; SUCH A LINK WAS SHOWN TO BE PRESE NT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA) RELIED UPON B Y THE REVENUE. WE ARE THEREFORE NOT TO BE UNDERSTOOD TO CONVEY THAT IN AL L CASES OF SHARE CAPITAL ADDED UNDER SECTION 68, THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTRACTED, IRRESPECTIVE OF THE FACTS, EVIDENCE AND MATERIAL. N O SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEAL IS ACCORDINGLY DISMISSED. (IX) RECENTLY, IN THE CASE OF ITO WARD (2) NEW DELHI VS. M/S RAKAM MONEY MATTERS P LTD ITA NO. 2821/DEL/2011 DATED 16/10/201 4, THE HONBLE ITAT BENCH DELHI HAS DELETED THE ENTIRE ADDITION MADE ON ACCOUNT OF SHARE APPLICATION MONEY BY THE ASSESSEE U/S 68 OF THE ACT , RELEVANT EXTRACT OF WHICH ARE REPRODUCED AS UNDER:- . 16. IN THE PRESENT CASE, AS NOTED ABOVE, THE AO HAS NOT BEEN ABLE TO BRING ON RECORD ANY VALID MATERIAL OR EVIDENCE TO DISCREDIT THE EVI DENCES AND THE EXPLANATION GIVEN BY THE ASSESSEE COMPANY. THE ONLY EVIDENCE WH ICH HAS BEEN REFERRED BY THE AO IS STATEMENT OF THIRD PARTIES RECORDED BY TH E INVESTIGATION WING. ADMITTEDLY THESE STATEMENTS WERE NOT RECORDED BY TH E AO BUT WERE RECORDED BY THE INVESTIGATION WING AT THE BACK OF THE ASSESSEE. THE AO HAS NOT EVEN REFERRED TO THE RELEVANT PORTION OF SUCH STATEMENT SO AS TO ESTABLISH THE COLLUSIVE ARRANGEMENT THE ASSESSEE COMPANY HAD WITH THESE PER SONS. 17. ACCORDINGLY WE ARE OF THE VIEW THAT THE CIT(A ) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. 18. IN THE RESULT, THE APPEAL OF THE REVENUE STAN DS DISMISSED.. ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 11 3.3.2.3 FURTHER, IN VIEW OF THE DECISIONS OF THE J URISDICTIONAL HIGH COURT IN BARKHA SYNTHETICS LTD. VS ASSTT. CIT (2005) 197 XTR (RAJ) 432 & CIT VS AKJ GRANITES P LTD. 301 ITR 298, WHERE THE SHARE APPLIC ATIONS ARE RECEIVED FROM DIFFERENT PLACES ACCOMPANIES WITH SHARE APPLIC ATION MONEY, NO PRESUMPTION CAN BE DRAWN THAT THE SAME BELONG TO TH E ASSESSEE; AND THE APPLICATION MONEYS CANNOT BE ASSESSED IN ASSESSEES HANDS AS ITS UNDISCLOSED INCOME UNLESS SOME NEXUS IS ESTABLISHED THAT SHARE APPLICATION MONEY FOR AUGMENTING THE INVESTMENT IN BUSINESS HAS FLOWN FROM THE ASSESSEES OWN MONEY. IN VIEW OF THE FACTS AND CIRCUMSTANCES AS DISCUSSE D AND ALSO RATIO OF THE ABOVE DECISION IN FAVOUR OF THE APPELLANT AS DISCUS SED IN ABOVE PARAS, THE ADDITION OF RS. 1,09,00,000/- MADE U/S 68 OF THE AC T CANNOT BE JUSTIFIED, HENCE DELETED. ASSESSEE GETS A RELIEF OF RS. 1,09,0 0,000/-. 4. NOW THE REVENUE IS IN APPEAL BEFORE THE ITAT BY TA KING FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASES AND IN LAW THE LD. CIT(APPEAL)-I, JAIPUR HAS ERRED IN:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS. 1,09,00,000/- MADE U/S 68 ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN THE FORM OF SHARE CAPITAL ISSUED BY THE ASSESSEE . 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT ASSESS EE HAS DISCHARGED ITS ONUS OF ESTABLISHING THE IDENTITY, CREDITWORTHI NESS AND GENUINENESS AS REGARDS THE TRANSACTIONS CONCERNING THE ALLOTMENT OF SHARES IGNORING THE FACTS THAT CONTRARY EVIDENCE S IN THE FORM OF CASH PAID AND CHEQUES RECEIVED WERE FOUND AND SEIZE D DURING THE COURSE OF SEARCH PROCEEDINGS IN THE SKJ GROUP. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE AS SESSEE WAS NOT ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 12 CONFRONTED WITH THE EVIDENCES COLLECTED AND IGNORIN G THE FACT THAT NECESSARY EVIDENCES AND DETAILS IN THE FORM OF STAT EMENTS RECORDS DURING THE COURSE OF SEARCH OPERATION AS WELL AS CO PIES OF BANK ACCOUNTS AND RELATED DOCUMENTS WERE PROVIDED TO THE ASSESSEE. 4. THE APPELLANT CRAVES THE INDULGENCE TO MODIFY, A LTER, ADD AND AMEND ANY OTHER GROUND OF APPEAL. 5. THE ONLY ISSUE INVOLVED IN THE REVENUES APPEAL I S AGAINST DELETING THE ADDITION OF RS. 1,09,00,000/- LACS MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT AS UNEXPLAINED CASH CREDIT IN THE FORM O F SHARE CAPITAL ISSUED BY THE ASSESSEE. THE LD. CIT(A) HAS ALLOWED THE APPEAL O F THE ASSESSEE BY HOLDING THAT THE ASSESSEE HAS DISCHARGED ITS ONUS B Y ESTABLISHING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS WITH REGAR D TO THE TRANSACTIONS FOR ALLOTMENT OF SHARES. 6. WHILE PLEADING ON BEHALF OF THE REVENUE WITH REGA RD TO THE GROUNDS RAISED IN THE APPEAL, THE LD DR HAS RELIED ON THE O RDERS OF THE ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSEE HAS NOT DIS CHARGED THE ONUS. THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION . SHE SUBMITTED THAT THE ASSESSING OFFICER HAS ISSUED INQUIRY LETTERS U/S 13 3(6) OF THE ACT TO THE ADDRESSES PROVIDED BY THE ASSESSEE. NO RESPONSE WAS RECEIVED IN RESPECT OF TEN COMPANIES WHO HAS INVESTED IN THE SHARES. SH RI ASEEM KUMAR GUPTA, C.A. HAS CONFESSED IN HIS STATEMENT DATED 24/11/201 1 AND 25/11/2011 THAT ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 13 HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES TH ROUGH NUMBER OF ENTITIES CONTROLLED/MANAGED BY HIM. THE EXPLANATION GIVEN BY THE ASSESSEE WAS NOT SATISFACTORY AND IT LACKS CREDITWORTHINESS AN D GENUINENESS. HENCE THE ADDITION MADE U/S 68 OF THE ACT MADE BY THE ASS ESSING OFFICER MAY BE CONFIRMED AND THE ORDER OF LD. CIT(A) MAY BE QUASHED . 7. ON THE OTHER HAND, ON THIS ISSUE, THE LD AR OF T HE ASSESSEE HAS SUBMITTED AS UNDER: 1. DURING THE YEAR, ASSESSEE RAISED SHARE CAPITAL O F RS.1,10,00,000/- FROM VARIOUS PARTIES. IN THE COURSE OF REASSESSMENT PROCEEDINGS, ASSESSEE VIDE LETTER DATED 26.02.2013 (PB 33) FILED THE CONFIRMATION, COPY OF SHARE APPLICATION FORM AND THE BANK STATEMENT OF THESE PARTIES. AGAIN VIDE LET TER DATED 05.03.2013 (PB 34- 35) ASSESSEE PRODUCED REGISTER OF SHAREHOLDERS, MINUTE BOOKS AND THE DATE OF ALLOTMENT OF SHARES AND PARTICULARS OF SHARES ALLOT TED. 2. THE AO ISSUED LETTER U/S 133(6) ON 26.02.2013 TO ALL THE ABOVE PARTIES SEEKING FURTHER INFORMATION AS MENTIONED AT PG 10, PARA 17 OF THE ASSESSMENT ORDER. THE FATE OF THE SUMMONS ISSUED AND THE REASONS FOR WHIC H THE AO CONSIDERED THE SHARE CAPITAL RECEIVED FROM THESE COMPANIES AS UNEX PLAINED IS TABULATED AS UNDER:- S.NO NAME, ADDRESS AND PAN OF THE COMPANY AMOUNT INVESTED (RS.) REASONS FOR MAKING ADDITION 1. M/S SAM PORTFOLIO PVT. LTD. WP-501,3 RD FLOOR, SHIV MARKET, WAZIRPUR, ASHOK VIHAR, DELHI-110052 NEW ADDRESS: 2-G, MIG DDA FLATS, GULAB BAGH, 5,00,000 - IN RESPONSE TO SUMMONS, BALANCE SHEET FILED BUT IT DID NOT FURNISH SCHEDULE-5 OF THE BALANCE SHEET WHICH SHOWS INVESTMENT OF RS.93,60,900/- TO VERIFY WHETHER IT HAS INVESTED IN SHARE CAPITAL OF THE ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 14 DELHI-110007 PAN: AAHCS6810N ASSESSEE OR NOT. - SH. ASEEM KUMAR GUPTA IN HIS STATEMENT HAS STATED THAT HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES THROUGH THIS COMPANY. - ASSESSEE HAS NOT PRODUCED THE DIRECTOR. 2. M/S KMC PORTFOLIO PVT. LTD. RZH-266, RAJ NAGAR, PART-II, PALAM, NEW DELHI-110045 NEW ADDRESS: 2-G, MIG DDA FLATS, GULAB BAGH, DELHI-110007 PAN: AACCP5345A 5,00,000 - ANNEXURE 3 OF THE BALANCE SHEET SHOWS INVESTMENT IN SHARE APPLICATION MONEY IN DIFFERENT COMPANIES BUT THE NAME OF THE ASSESSEE DOES NOT APPEAR. - SH. ASEEM KUMAR GUPTA IN HIS STATEMENT HAS STATED THAT HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES THROUGH THIS COMPANY. - ASSESSEE HAS NOT PRODUCED THE DIRECTOR. 3. M/S RAVNET SOLUTIONS PVT. LTD. DA-4, VIKAS MARG, SHAKARPUR, DELHI-110092 NEW ADDRESS: 305, AGARWAL ARCADE, PLOT NO.6, SECTOR- 12, DWARKA, DELHI-110075 PAN: AAEER6878G 10,00,000 - IN RESPONSE TO SUMMONS BALANCE SHEET FILED BUT IT DID NOT FURNISH SCHEDULE-5 OF THE BALANCE SHEET WHICH SHOWS INVESTMENT OF RS.2,11,76,030/- TO VERIFY WHETHER IT HAS INVESTED IN SHARE CAPITAL OF THE ASSESSEE OR NOT - SH. ASEEM KUMAR GUPTA IN HIS STATEMENT HAS STATED THAT HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES THROUGH THIS COMPANY. - ASSESSEE HAS NOT PRODUCED THE DIRECTOR. 4. M/S S.G. PORTFOLIO PVT. LTD. WP-501, III RD FLOOR, SHIV MARKET, ASHOK VIHAR, NEW DELHI-110052 NEW ADDRESS: HOUSE NO.191. IIND FLOOR, NAYA BANS, DELHI-110006 PAN: AAHCS6809H 20,00,000 - COMPANY HAS SHOWN ITS INABILITY IN FURNISHING THE REQUISITE INFORMATION AND REQUESTED TO GRANT TWO MONTHS TIME WHICH IS NOT POSSIBLE AS THE ASSESSEE WAS ONLY REQUIRED TO FURNISH THE ROUTINE INFORMATION. - SH. ASEEM KUMAR GUPTA IN HIS STATEMENT HAS STATED THAT HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES THROUGH THIS COMPANY. - ASSESSEE HAS NOT PRODUCED THE DIRECTOR. 5. M/S GEEFCEE FINANCE LTD. GEEFCEE HOUSE, 13/34, W.E.A. IV TH FLOOR, MAIN ARYA SAMAJ ROAD, KAROL BAGH, NEW DELHI- 11005 PAN: AAACG1103H 10,00,000 NO RESPONSE WAS GIVEN BY THESE COMPANIES. THE ASSESSEE FAILED TO PROVE THE IDENTITY OF THE SHARE CAPITAL SUBSCRIBERS DUE TO NON FURNISHING OF LATEST CONFIRMATION WITH CORRECT ADDRESS AND IT IS HARD TO BELIEVE THAT GENUINE COMPANIES WOULD DISAPPEAR AND THEIR INVESTMENTS WILL GO WASTE. 6. M/S NEWAGE EXIM PVT. LTD. H-003, SARASWATI APPT., 97 I.P. EXTN., PATPARGANJ, DELHI- 110092 10,00,000 ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 15 PAN: AAEFN3888R 7. M/S TELSTAR EDITING & STUDIO PVT. LTD. 228A, POCKET A, MAYUR VIHAR-II, DELHI-110091 PAN:AAACT8962B 5,00,000 8. M/S CHHOTI LEASING & FINANCE PVT. LTD. D-11, NANDA DEVI TOWER, 2 ND FLOOR, CENTRAL MARKET, PRASHANT VIHAR, NEW DELHI- 85 PAN: AABCC8851H 10,00,000 9. M/S B.T. TECHNET PVT. LTD. 16B/9, BOLNI CHAMBERS, D.B GUPTA ROAD, DEV NAGAR, NEW DELHI-110005 PAN:AABCB9573F 10,00,000 10. M/S PRITI MERCHANTILE PVT. LTD. 15/76, OLD RAJINDER NAGAR, II ND FLOOR, NEW DELHI-110060 PAN: AADCP1611J 5,00,000 11. M/S TIME COMPUTECH SERVICES 2727/102, I ST FLOOR, CHALLAN STREET, DARYAGANJ, NEW DELHI-11002 PAN: AAACT2715L 5,00,000 12. M/S JOVIAL SUPPLIERS PVT. LTD. 208, MUKAND HOUSE, COMM. COMPLEX, AZADPUR, DELHI-110033 PAN: AAACJ3250A 4,00,000 13. M/S SOFTGATE TECHNOLOGIES PVT. LTD 228A, POCKET A, MAYUR VIHAR-II, DELHI-110091 PAN: AAECS1083E 5,00,000 14. M/S TEJASVI INVESTMENTS (P) LTD. 13/34, W.E.A. IV TH FLOOR, MAIN ARYA SAMAJ ROAD, KAROL BAGH, NEW DELHI- 11005 PAN: AABCT3249G 5,00,000 3. THE LD. CIT(A) DELETED THE ADDITION AS PER HIS F INDINGS GIVEN AT PAGE 16-26 OF THE ORDER. ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 16 SUBMISSION:- 1. THE AO HAS TREATED THE SHARE CAPITAL AMOUNT RECEIVE D FROM SAM PORTFOLIO PVT. LTD. AS UNEXPLAINED FOR THE REASON THAT THE COMPANY HAS NOT FURNISHED SCHEDULE- 5 OF THE BALANCE SHEET WHICH SHOWS THE DETAILS OF I NVESTMENTS. ONLY BECAUSE SCHEDULE-5 TO THE BALANCE SHEET IS NOT FURNISHED BY THE COMPANY, THE INVESTMENT MADE BY IT IN THE SHARE CAPITAL OF THE A SSESSEE CANNOT BE CONSIDERED AS UNEXPLAINED. THIS COMPANY HAS MADE INVESTMENT IN THE SHARE CAPITAL OF THE ASSESSEE THROUGH J&K BANK. FROM THIS BANK ACCOUNT ( PB 40) INVESTMENT OF RS.5,00,000/- MADE BY IT IS FULLY VERIFIABLE. EVEN ASEEM GUPTA IN HIS STATEMENT WHILE PROVIDING THE LIST OF ENTITIES PROVIDING THE ACCOMMODATION ENTRIES HAS NOT STATED THAT J&K BANK OF SAM PORTFOLIO PVT. LTD. HAS BEEN USED BY HIM FOR PROVIDING THE ACCOMMODATION ENTRIES. FURTHER INSPIT E OF THE SPECIFIC REQUEST MADE BY THE ASSESSEE VIDE LETTER DATED 18.03.2013 ( PB 37), THE AO HAS NOT UTILISED HIS POWER UNDER THE ACT TO ENFORCE THE ATT ENDANCE OF THE DIRECTOR. THE ASSESSEE WAS ALSO NOT PROVIDED AN OPPORTUNITY TO CR OSS EXAMINE SH. ASEEM KUMAR GUPTA WHO IS ALLEGED TO HAVE STATED TO PROVID E ACCOMMODATION ENTRY INSPITE OF THE SPECIFIC REQUEST OF THE ASSESSEE VID E LETTER DATED 05.03.2013 AND 25.03.2013 (PB 34-36). IT MAY BE NOTED THAT IN RESP ECT OF THIS COMPANY ASSESSEE HAS FILED THE SHARE APPLICATION FORM, CONFIRMATION AND THE BANK STATEMENT (PB 38-40). THUS, ASSESSEE HAS DISCHARGED HIS PRIMARY B URDEN OF PROVING THE IDENTITY OF THE SHARE APPLICANT, GENUINENESS OF THE TRANSACT ION AND CREDITWORTHINESS OF THE CREDITOR. THUS, THE SHARE CAPITAL MONEY RECEIVE D FROM THIS COMPANY IS FULLY EXPLAINED AND THE ADDITION MADE BY THE AO IS RIGHTL Y DELETED BY THE CIT(A). 2. IN CASE OF M/S KMC PORTFOLIO PVT. LTD. THE AO TR EATED THE SHARE CAPITAL AMOUNT AS UNEXPLAINED BECAUSE IN ANNEXURE-3 OF THE BALANCE SH EET FURNISHED BY THE COMPANY WHICH SHOWS THE DETAILS OF THE INVESTMENTS MADE IN SHARE APPLICATION MONEY IN DIFFERENT COMPANIES, THE NAME OF THE ASSES SEE DOES NOT APPEAR. HOWEVER, AO HAS NOT MADE ANY FURTHER ENQUIRY FROM T HE COMPANY MORE PARTICULARLY WHEN THE INVESTMENT IS VERIFIABLE FROM ITS BANK ACCOUNT (PB 43). FURTHER IN RESPECT OF THIS COMPANY ASSESSEE HAS FIL ED THE SHARE APPLICATION FORM ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 17 AND CONFIRMATION (PB 41-42). THE AO IN SPITE OF THE REQUEST OF THE ASSESSEE HAS NOT ISSUED SUMMON TO THE DIRECTOR OF THIS COMPANY F OR HIS PERSONAL PRESENCE AND NO OPPORTUNITY TO CROSS EXAMINE SH. ASEEM KUMAR GUPTA WAS GIVEN. THUS, THE ADDITION OF RS.5 LACS MADE BY AO IS RIGHTLY DEL ETED BY THE CIT(A). 3. THE SHARE CAPITAL AMOUNT RECEIVED BY ASSESSEE FROM M/S RAVNET SOLUTIONS PVT. LTD. WAS TREATED AS UNEXPLAINED BY THE AO BECAUSE T HE COMPANY HAS NOT FURNISHED SCHEDULE-5 OF THE BALANCE SHEET WHICH SHO WS THE DETAILS OF INVESTMENTS. ONLY BECAUSE SCHEDULE-5 TO THE BALANCE SHEET IS NOT FURNISHED BY THE COMPANY, THE INVESTMENT MADE BY IT IN THE SHARE CAPITAL OF THE ASSESSEE CANNOT BE CONSIDERED AS UNEXPLAINED PARTICULARLY WH EN SUCH INVESTMENT IS VERIFIABLE FROM ITS BANK ACCOUNT (PB 46), ASSESSEE HAS FILED THE CONFIRMATION AND SHARE APPLICATION FORM (PB 44-45), NO OPPORTUNITY W AS GIVEN TO CROSS EXAMINE SH. ASEEM KUMAR GUPTA AND THE AO IN SPITE OF THE RE QUEST OF THE ASSESSEE HAS NOT ISSUED SUMMON TO THE DIRECTOR OF THIS COMPANY F OR HIS PERSONAL PRESENCE. THUS, THE SHARE CAPITAL MONEY RECEIVED FROM THIS CO MPANY IS FULLY EXPLAINED AND THE ADDITION MADE BY THE AO IS RIGHTLY DELETED BY T HE CIT(A). 4. IN CASE OF M/S S.G. PORTFOLIO PVT. LTD. IT IS TO S UBMIT THAT THE ASSESSEE HAD FURNISHED THE CONFIRMATION, SHARE APPLICATION FORM AND COPY OF BANK ACCOUNT (PB 47-50). FROM THE STATEMENT OF SH. ASEEM KUMAR GUPTA IT CAN BE NOTED THAT THE BANK ACCOUNT NO. 5982, 247, 03, 4996 OF CORPORATION BANK AND BANK ACCOUNT NO. 10400, 563 OF JAMMU & KASHMIR BANK WAS USED BY HIM FOR PROVIDING ACCOMMODATION ENTRIES WHEREAS ASSESSEE HAS RECEIVED THE AMOUNT FROM BANK A/C NO. 0241 OF JAMMU & KASHMIR BANK AS EVIDENT FRO M THE BANK STATEMENT PLACED AT PB 50. THUS, THIS ACCOUNT IS A DIFFERENT ACCOUNT THAN THE ACCOUNT USED BY ASEEM GUPTA FOR PROVIDING ACCOMMODATION ENTRIES. IN THESE CIRCUMSTANCES, ASSESSEE HAS DISCHARGED HIS PRIMARY BURDEN OF PROVI NG THE IDENTITY OF THE SHARE APPLICANT, GENUINENESS OF THE TRANSACTION AND CREDI TWORTHINESS OF THE CREDITOR. THUS, THE SHARE CAPITAL MONEY RECEIVED FROM THIS CO MPANY IS FULLY EXPLAINED AND THE ADDITION MADE BY THE AO IS RIGHTLY DELETED BY T HE CIT(A). ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 18 5. IN RESPECT OF PARTIES MENTIONED AT S. NO. 5 TO 14 IT IS TO SUBMIT THAT ASSESSEE HAS GIVEN THE LATEST ADDRESS AVAILABLE WITH HIM. THIS I S PROVED FROM THE FACT THAT THE SUMMONS ISSUED TO THEM IS NOT RETURNED BACK UNSERVE D. IF THESE PARTIES DID NOT TURN UP THEN NECESSARY ACTIONS SHOULD HAVE BEEN TAK EN AGAINST THESE COMPANIES AND FOR THAT REASON NO ADVERSE VIEW CAN BE TAKEN IN CASE OF THE ASSESSEE. THE ASSESSEE HAD FURNISHED COMPLETE DETAILS TO THE AO R EGARDING THE TRANSACTIONS IN QUESTION, WHICH INCLUDE CONFIRMATION, SHARE APPLICA TION FORM, COPY OF BANK ACCOUNT AND THEIR PERMANENT ACCOUNT NUMBERS (PB 51- 78). THESE COMPANIES ARE NOT REFERRED AS PROVIDING ACCOMMODATION ENTRIES IN THE NOTICE ISSUED U/S 148. THESE COMPANIES (EXCEPT M/S CHHOTI LEASING & FINANC E PVT. LTD.) ARE ALSO NOT COVERED IN THE LIST GIVEN BY SH. ASEEM GUPTA IN HIS STATEMENT AS BEING USED FOR PROVIDING ACCOMMODATION ENTRIES (PB 21-30). FURTHER AS PER HIS STATEMENT THE BANK ACCOUNT NO. 252 OF CORPORATION BANK OF M/S CHH OTI LEASING & FINANCE PVT. LTD. WAS USED FOR PROVIDING ACCOMMODATION ENTRIES W HEREAS ASSESSEE HAS RECEIVED THE AMOUNT FROM BANK A/C NO. 5043 ON 08.09 .2005 AS EVIDENT FROM HIS BANK STATEMENT PLACED AT PB 62.THUS, THIS ACCOUNT I S A DIFFERENT ACCOUNT THAN THE ACCOUNT USED BY ASEEM GUPTA FOR PROVIDING ACCOMMODA TION ENTRIES. IN THESE CIRCUMSTANCES, ASSESSEE HAS DISCHARGED HIS PRIMARY BURDEN OF PROVING THE IDENTITY OF THE SHARE APPLICANT, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR. THUS, THE SHARE C APITAL MONEY RECEIVED FROM THESE TEN PARTIES AGGREGATING TO RS.69 LACS IS FULL Y EXPLAINED AND THE ADDITION MADE BY THE AO IS RIGHTLY DELETED BY THE CIT(A). 6. THE AO WITHOUT PROVIDING ANY OPPORTUNITY TO CROSS EXAMINE SH. ASSEM GUPTA HAS MADE THE ADDITION WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND ILLEGAL & BAD IN LAW. EVEN FROM THE ASSESSMENT ORDER IT IS NO T DISCERNIBLE THAT ANY OF THESE PERSONS HAD STATED THAT INVESTMENT MADE BY THESE CO MPANIES IN THE SHARE CAPITAL OF THE ASSESSEE IS BOGUS/ ACCOMMODATION ENT RIES. THEREFORE, THE ADDITION MADE BY THE AO AT THE THRESHOLD IS LIABLE TO BE QUA SHED. RELIANCE IN THIS CONNECTION IS PLACED ON SUPREME COURT DECISION DATE D 02.09.2015 IN CASE OF ANDAMAN TIMBER INDUSTRIES VS. CCE 127 DTR 0241 WHER EIN IT WAS HELD THAT ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 19 DENIAL OF OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAM INE THE WITNESSES WHOSE STATEMENTS WERE MADE THE SOLE BASIS OF THE ASSESSME NT IS A SERIOUS FLAW RENDERING THE ORDER A NULLITY IN AS MUCH AS IT AMOU NTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THEREFORE, ADDITION OF RS. 1,09 ,00,000/- MADE BY THE AO IS RIGHTLY DELETED BY THE LD. CIT(A). 7 . APART FROM THE DECISIONS ALREADY SUBMITTED BEFORE THE CIT(A), RELIANCE IS FURTHER PLACED ON FOLLOWING CASES:- CIT VS. VACMET PACKAGING (INDIA) PVT. LTD. 367 ITR 0217 (ALL.) (HC) DECISION DATED 11.02.2014 FACTS OF THE CASE A SURVEY U/S 133A WAS CARRIED OUT AND IT WAS ALLEG ED BY THE REVENUE THAT A CHARTERED ACCOUNTANT BY THE NAME OF ASEEM KUMAR GUPTA WAS INV OLVED IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES UNDE R THE GUISE OF SHARE APPLICATION MONEY. SUMMONS WAS ISSUED TO ASEEM KUMAR GUPTA AND HE WAS CONFRONTED WITH THE NOTINGS CONTAINED IN A BLACK DIARY WHICH HAD BEEN I MPOUNDED DURING THE COURSE OF SURVEY. AO IN THE ASSESSMENT U/S 153A, MADE AN ADDI TION OF AN AMOUNT WHICH WAS RECEIVED BY ASSESSEE AS SHARE APPLICATION MONEY FRO M M/S KMC PORTFOLIO PVT. LTD. ON THE GROUND THAT AMOUNT WAS ONLY A MOVEMENT OF MONE Y BELONGING TO THE ASSESSEE THROUGH VARIOUS CHANNELS IN A COLOURABLE MANNER. CI T(A) DELETED THE ADDITION BY HOLDING THAT AO HAD ERRED IN RELYING UPON THE CONTE NTS OF THE BLACK DIARY, AS IT CONSISTED OF ENTRIES WHICH RELATED TO AY 2005-06 AN D NOT TO CURRENT AY 2007-08. FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE AO HAD ISSUED NOTICE U/S 133(6) INTER ALIA TO M/S KMC PORTFOLIO PVT. LTD. AS WELL AS TO ANOTHER COMPANY IN RESPONSE WHERETO BOTH THE COMPANIES HAD CONFIRMED I NVESTMENTS MADE BY THEM AND FILED SHARE RECEIPT CONFIRMATION, BANK STATEMENTS O F THE RELEVANT PERIOD, ACKNOWLEDGMENTS OF THE INCOME TAX RETURNS AND BALAN CE SHEET. TRIBUNAL WHILE SUSTAINING THE VIEW OF THE CIT(A) OBSERVED THAT ASS ESSEE HAD FILED DOCUMENTARY EVIDENCE TO PROVE GENUINENESS OF SHARE APPLICATION MONEY CONSISTING OF (I) SHARE APPLICATION FORMS; (II) COPIES OF BANK ACCOUNTS OF SHARE APPLICANTS; (III) COPIES OF INCOME TAX RETURNS OF SHARE ALLOTTEES; (IV) BALANCE SHEETS; AND (V) COPIES OF SHARE ALLOTMENT CERTIFICATES AND OF BOARD'S RESOLUTION OF THE SHARE APPLICANTS. IDENTITY OF APPLICANTS WAS ESTABLISHED BY PRODUCTION OF COPIES OF PAN CARDS AND REGISTRATION CERTIFICATE WITH THE REGISTRAR OF COMPANIES. FINANC IAL CAPACITY WAS ALSO PROVED BY FILING OF COPIES OF THE BANK ACCOUNTS FROM WHERE TH E SHARE APPLICATION MONEY WAS TRANSFERRED THROUGH BANKING CHANNELS TO THE ASSESSE E. THE GENUINENESS OF THE TRANSACTION HAD BEEN ESTABLISHED BY FILING OF THE D OCUMENTS AND IN VIEW OF THE CONFIRMATION BY BOTH THE COMPANIES OF THE RESPECTIV E TRANSACTION. ON THIS BASIS, THE TRIBUNAL HELD THAT THE ASSESSEE HAD DISCHARGED THE ONUS PLACED UPON HIM BY SEC. 68. FINDINGS OF THE CASE ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 20 THE ASSESSEE UNDOUBTEDLY HAD TO DISCHARGE THE ONUS OF ESTABLISHING THE IDENTITY AND CREDIT WORTHINESS OF THE APPLICANT COMPANIES AND TH E GENUINENESS OF THE TRANSACTION. IN THIS REGARD, BOTH THE CIT(A) AND THE TRIBUNAL HA D NOTED THAT THE ASSESSEE HAD ESTABLISHED ALL THE THREE ASPECTS BY PRODUCING, DUR ING THE COURSE OF THE ASSESSMENT, NECESSARY DOCUMENTARY MATERIAL SUCH AS THE SHARE AP PLICATION FORMS, COPIES OF BANK ACCOUNTS, INCOME TAX RETURNS AND BALANCE SHEETS. TH E VIEW WHICH WAS TAKEN BY THE CIT(A) AND WHICH WAS SUSTAINED BY THE TRIBUNAL WOUL D THUS HAVE TO BE REGARDED AS BEING, AT LEAST, A POSSIBLE VIEW TO TAKE IN THE CIR CUMSTANCES OF THE CASE. IT MAY BE NOTED THAT IN ASSESSEES CASE ALSO, THE A DDITION IS MADE WITH REFERENCE TO THE SURVEY/SEARCH CARRIED OUT IN CASE OF SH. ASSEM KUMAR GUPTA AND OTHERS. THEREFORE, IN VIEW OF THE ABOVE DECISION, WHICH IS DIRECTLY APPLICABLE IN THE ASSESSEES CASE, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. ACIT VS. VIP GROWTH FUND PVT. LTD. 46 CCH 0231 (DEL .) (TRIB.) DECISION DATED 04.03.2016 FACTS OF THE CASE IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF INC OME DECLARING CERTAIN INCOME. SCRUTINY ASSESSMENT U/S 143(3) WAS MADE ON 28.02.2006. IN TH E COURSE OF THE SAID PROCEEDINGS, THE DETAILS OF SHARE APPLICATION MONEY/SHARE CAPITA L WERE FURNISHED. THE AO RECEIVED INFORMATION FROM THE INVESTIGATION WING OF THE DEPA RTMENT, THAT THE COMPANIES / PERSONS WHICH CONTRIBUTED TOWARDS SHARE APPLICATION MONEY / SHARE CAPITAL WERE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES. IN VIE W OF THE SPECIFIC INFORMATION, THE AO INITIATED ACTION U/S 148 AND COMPLETED THE ASSESSME NT DISBELIEVING A PART OF SHARE APPLICATION MONEY/SHARE CAPITAL OF RS. 40,00,000/- . FINDINGS OF THE CASE THE HONBLE ITAT AFFIRMED THE FINDINGS OF THE LD. CIT(A) WHO DELETED THE ADDITION BY HOLDING THAT NOTHING ADVERSE WAS FOUND IN THE DETAI LS OF SHARE APPLICATION MONEY/SHARE CAPITAL FURNISHED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO HAS NOT VERIFIED THE DETAILS FURNISHED BY THE ASSESSEE AND I.T. RECORDS OF THE SHAREHOLDERS/INVESTING COMPANIES. THE ASSESSEE HAS DISCHARGED ITS BURDEN OF PROVIDING BASIC DETAILS WHICH WERE REQUIRED FOR VERIFICATION TO FULFILL THE CONDITIONS VIZ. IDENTITY OF THE CREDITOR, CREDIT WORTHINESS OF THE CREDITOR AND GENUINENESS OF TRANSACTION. THE ASSESSEE HAS PROVIDED NECESSARY DETAILS INCLUDING T HE WARD/CIRCLE WHERE THE SHARE APPLICANTS/ INVESTING COMPANIES WERE ASSESSED TO IN COME TAX AND DISCHARGED THE ONUS CAST ON IT. ALL THE AMOUNTS WERE RECEIVED, THROUGH BANKING CHANNELS BY WAY OF CHEQUES ISSUED IN FAVOUR OF THE APPELLANT COMPANY TOWARDS S HARE APPLICATION MONEY. THE SHARES WERE ALLOTTED AS PER THE DOCUMENTS FURNISHED BEFORE ROC. THE ASSESSEE HAS PRODUCED POSSIBLE/BEST EVIDENCE TO SUPPORT ITS CLAIM. THE AO HAS SIMPLY ACTED ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING WITHOUT VERIFY ING THE DETAILS FURNISHED BY THE ASSESSEE COMPANY AND ALSO NOT PLACING BEFORE THE AS SESSEE THE INFORMATION AND FINDINGS OF THE INVESTIGATION WING VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. IF THERE IS ANY ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 21 DISCREPANCY IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE INVESTING COMPANIES, THERE IS A CASE FOR REOPENING OF THE ASSESSMENT OF THE RESPECT IVE SHAREHOLDERS/INVESTING COMPANIES. THE ASSESSEE CANNOT BE PENALIZED FOR THE MISTAKES/FAULTS COMMITTED BY THE SHARE HOLDERS. THE AO HAS NOT FOUND ANY DISCREPANCY IN THE BOOKS OF ACCOUNT AND BANK ACCOUNTS MAINTAINED BY THE ASSESSEE. CIT VS. SUPERTECH DIAMOND TOOLS PVT. LTD. 229 TAXMA N 62 (RAJ.) (HC) AO MADE ADDITION U/S 68 ON ACCOUNT OF AMOUNT RECEIV ED FOR SHARE CAPITAL, ITS PREMIUM AND AMOUNT PAID AS COMMISSION FOR ARRANGING IT ON B ASIS OF STATEMENT MADE BY THIRD PARTIES WHO WERE RELATED TO PURCHASING COMPANIES ST ATING THAT THESE COMPANIES WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES IN LIEU OF COMMISSION. IT WAS HELD THAT THE SAID THIRD PARTY STATEMENT WAS MADE BEHIND BACK OF ASSESSEE AND NO OPPORTUNITY OF BEING HEARD OR CROSS-EXAMINING THIRD PARTIES WAS PR OVIDED TO ASSESSEE. FURTHER, AO COULD NOT BRING ANY MATERIAL TO DISAPPROVE GENUINEN ESS OF CONFIRMATION AND AFFIDAVITS FILED BY ASSESSEE. ALL TRANSACTIONS WERE THROUGH AC COUNT PAYEE CHEQUES. ALL THESE COMPANIES HAD PAN NUMBERS, WERE REGULARLY ASSESSED TO TAX, WERE REGISTERED UNDER COMPANIES ACT AND FORM NO.2 FOR ALLOTMENT WAS ALSO FILED. THEREFORE, APPELLATE AUTHORITIES HAVE RIGHTLY DELETED THE ADDITION. ITO VS. RAKAM MONEY MATTERS P. LTD. (2014) 41 CCH 0 155 (DEL.) (TRIB.) DECISION DATED 16.10.2014 IN THIS CASE, RETURN OF INCOME WAS SUBMITTED DECLAR ING CERTAIN INCOME. THE CASE WAS REOPENED U/S 148 OF THE IT ACT, 1961 ON THE BASIS O F INFORMATION RECEIVED FROM THE INVESTIGATION WING THAT ASSESSEE HAS RECEIVED ACCOM MODATION ENTRIES BY WAY OF SHARE APPLICATION MONEY FROM CERTAIN COMPANIES. THE AO RE QUIRED THE ASSESSEE TO PROVE THE GENUINENESS OF THE SHARE APPLICATION MONEY RECEIVED BY IT. IN RESPONSE TO SAME, THE ASSESSEE FILED DETAILS IN THE FORM OF SHARE APPLICA TION FORM, PAN, AFFIDAVIT OF THE DIRECTORS OF SHAREHOLDER COMPANIES, CONFIRMATION, B ANK STATEMENT ETC. THE AO, HOWEVER, HELD THAT AS ASSESSEE HAS NOT PRODUCED THE DIRECTOR OF THE COMPANIES FROM WHOM THE SHARE APPLICATION MONEY HAS BEEN RECEIVED, IT HAS FAILED TO DISCHARGE ITS ONUS TO PROVE THE GENUINENESS OF THE SHARE APPLICATION A ND ACCORDINGLY MADE ADDITION U/S 68 OF THE IT ACT, 1961. THE LD. CIT(A) OBSERVED THAT A SSESSEE COMPANY HAS FILED ALL THE NECESSARY DETAILS WHICH INCLUDE COPIES OF SHARE APP LICATION FORM, COPIES OF BANK STATEMENTS, COPIES OF INCOME TAX RETURNS, COPIES OF PAN CARDS, BALANCE SHEET, COPY OF CERTIFICATE OF INCORPORATION AND MEMORANDUM OF ARTI CLES OF ASSOCIATION OF THE COMPANIES, THAT THE STATUS OF THESE COMPANIES IS A CTIVE ON THE ROC WEBSITE AND THAT THE OPPORTUNITY OF CROSS EXAMINATION WAS NOT PROVID ED TO THE APPELLANT IN RESPECT OF THE ALLEGATION OF THE INVESTIGATION WING. THUS, ON THE BASIS OF THE ABOVE FACTS AND BY RELYING UPON THE VARIOUS JUDGMENTS, THE LD. CIT(A) HELD THA T ASSESSEE HAS DISCHARGED ITS ONUS AND ACCORDINGLY DELETED THE ADDITION. THE HONBLE I TAT HELD AS UNDER:- ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 22 13. WE HAVE HEARD BOTH THE PARTIES. THE ONLY ISSUE HERE IS THE ADDITION OF RS.60 LACS MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CREDIT ON ACCOUNT OF THE SHARE APPLICATION MONEY. ON GOING THROUGH THE FACTS OF THE CASE, WE N OTICE THAT ASSESSEE HAS FILED THE RELEVANT DETAILS WHICH IT COULD HAVE FILED IN SUPPO RT OF ITS CONTENTION OF HAVING RECEIVED THE SHARE APPLICATION MONEY FROM EACH OF THESE SHAR EHOLDER COMPANIES. 14. THE ASSESSING OFFICER HAS ISSUED SUMMONS TO TH E DIRECTORS OF THESE SHAREHOLDER COMPANIES. IN RESPONSE THERE TO, THE DIRECTORS HAVE NOT ATTENDED. ASSESSING OFFICER HAS NOT CONDUCTED ANY FURTHER INQUIRY FOR NON-ATTENDANC E OF THE PERSONS. NON-ATTENDANCE ON ISSUING SUMMONS ITSELF CANNOT BE A GROUND FOR REJEC TING ALL THE RELEVANT DOCUMENTS FURNISHED BY THE ASSESSEE COMPANY. SUMMONS ISSUED B Y ASSESSING OFFICER HAVE NOT BEEN RECEIVED BACK AS UNSERVED. THEREFORE, IT CANNOT BE SAID THAT THESE COMPANIES WERE NOT IN EXISTENCE AT THE GIVEN ADDRESSES. THE DOCUMENTS FIL ED WITH THE REGISTRAR OF COMPANIES SHOW THAT THESE COMPANIES WERE ACTIVE DURING THE RE LEVANT PERIOD. ASSESSING OFFICER HAS NOT VERIFIED ANY OF THE RELEVANT DOCUMENTS SUBMITTE D BY ASSESSING OFFICER FOR DISCHARGING ONUS U/S 68 OF THE ACT. WE ALSO NOTE TH AT THE ASSESSING OFFICER HAS NOT REFERRED NOR DISCUSSED ABOUT THE SO-CALLED ALLEGED STATEMENT OF ENTRY PROVIDERS AGAINST THE ASSESSEE COMPANY. IT IS ALSO NOT KNOWN WHETHER ASSESSEES NAME FIGURED IN THAT STATEMENT. THE CONTENTION OF THE ASSESSEE HAS BEEN REJECTED WITHOUT EXAMINATION AND VERIFICATION OF THE DOCUMENTS SUBMITTED BY THE ASSE SSEE. THE INFORMATION RECEIVED BY HIM FROM THE INVESTIGATION DEPARTMENT HAS BEEN MADE THE BASIS OF ADDITION WITHOUT ANY FURTHER INVESTIGATION IN THIS REGARD. EVEN THE PROC ESS OF EXAMINATION OF THE DIRECTORS BY ISSUE OF SUMMONS HAS NOT BEEN TAKEN TO THE LOGICAL END AS AFTER THE FAILURE OF THE DIRECTORS TO ATTEND IN RESPONSE TO THE SUMMONS ISSU ED TO THEM NO FURTHER STEPS WERE TAKEN. THE ASSESSING OFFICER COULD HAVE DONE CROSS VERIFICATION ABOUT THE STATUS OF THESE COMPANIES WITH THE RESPECTIVE ASSESSING OFFICER OF THESE SHAREHOLDER COMPANIES. 16. IN THE PRESENT CASE, AS NOTED ABOVE, THE AO HA S NOT BEEN ABLE TO BRING ON RECORD ANY VALID MATERIAL OR EVIDENCE TO DISCREDIT THE EVIDENC ES AND THE EXPLANATION GIVEN BY THE ASSESSEE COMPANY. THE ONLY EVIDENCE WHICH HAS BEEN REFERRED BY THE AO IS STATEMENT OF THIRD PARTIES RECORDED BY THE INVESTIGATION WING. A DMITTEDLY THESE STATEMENTS WERE NOT RECORDED BY THE AO BUT WERE RECORDED BY THE INVESTI GATION WING AT THE BACK OF THE ASSESSEE. THE AO HAS NOT EVEN REFERRED TO THE RELEV ANT PORTION OF SUCH STATEMENT SO AS TO ESTABLISH THE COLLUSIVE ARRANGEMENT THE ASSESSEE COMPANY HAD WITH THESE PERSONS. 17. ACCORDINGLY WE ARE OF THE VIEW THAT THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO. JADAU JEWELLERS & MANUFACTURING (P) LTD. VS. ACIT 4 5 CCH 0442 (JPR.) (TRIB.) DECISION DATED 14.12.2015 ASSESSEE WAS ENGAGED IN BUSINESS OF TRADING AND MAN UFACTURING OF JEWELLERYSEARCH AND SEIZURE OPERATION WAS CARRIED BY DEPARTMENT U/S 132 AND SURVEY U/S 133A WAS MADE ON MEMBERS OF X OF WHICH ASSESSEE WAS ON E OF MEMBERSAO ISSUED NOTICE ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 23 U/S 153A AND ASSESSEE WAS ASKED TO FILE TRUE AND CO RRECT RETURN OF INCOME AS PRESCRIBED UNDER R 12 OF THE INCOME TAX RULES, 1962IN RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A NO DISCLOSED INCOME PERTAINING TO R ELEVANT YEAR WAS DECLARED BY ASSESSEEAO OBSERVED THAT DURING YEAR UNDER CONS IDERATION, ASSESSEE SHOWED TOTAL TURNOVER OF RS. 2.05 CRORES ON WHICH ASSESSEE RETUR NED A NET LOSS OF RS. 13,29,220AO OBSERVED THAT ASSESSEE HAD OBTAINED SHARE CAPITAL A ND SHARE APPLICATION MONEY FROM VARIOUS COMPANIESAO HELD THAT AMOUNT RECEIVED FROM STATED COMPANIES IN FORM OF SHARE CAPITAL WAS ONLY ACCOMMODATION ENTRIES AND GE NUINENESS OF SHARE CAPITAL RECEIVED BY ASSESSEE COMPANY COULD NOT BE ACCEPTED AO PASSED ORDER U/S 153 AND MADE ADDITION OF RS. 60,00,000 ON ACCOUNT OF ALLEGE D UNEXPLAINED SHARE CAPITAL RECEIVED BY ASSESSEE COMPANY FROM FOLLOWING PERSONSCIT(A) U PHELD ADDITION MADE BY AO HELD, AO COULD ISSUE NOTICE U/S 143(2)IN ASSESSEE S CASE, SEARCH WAS CONDUCTED ON 06/5/2010 AND AO ISSUED NOTICE ON 16/09/2011 U/S 15 3A READ WITH S 143(2)DURING COURSE OF SEARCH, NO INCRIMINATING DOCUMENTS WERE F OUND THEREFORE, NO NOTICE COULD BE ISSUED U/S 153A READ WITH S 143(3) BECAUSE NO PROCE EDING WAS PENDING BEFORE AO WHICH ABATED FOR ISSUE OF NOTICE ON DATE OF INITIAT ION OF SEARCHTHUS, ON TECHNICAL GROUND, ORDER PASSED U/S 153A READ WITH S 143(3) WA S HELD VOID AB INITIOFURTHER ASSESSEE BEFORE AO HAD PRODUCED COPY OF SHARE APPL ICATION, CONFIRMATION OF CASH CREDITORS, COPY OF PAN, COPY OF BOARD RESOLUTION, C OPY OF DIRECTORS REPORT, AUDITORS REPORT, COPY OF BALANCE SHEET, COPY OF P&L ACCOUNT, COPY OF BANK ACCOUNT TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF CASH CREDITORSAO MADE ADDITION ON BASIS OF INVESTIGATION CONDUCTED BY ITO, BUT AO DID NOT CLARIFY WHAT INQUIRY HAD BEEN CONDUCTED AND WHAT EVIDENCES COLLECTED WHICH HAD GO NE AGAINST ASSESSEEALSO ALTHOUGH NOTICE U/S 131 WAS ISSUED BY ITO, INVESTIG ATION WERE SERVED IN CASE OF X AND Y BUT COMPLIANCE COULD NOT BE MADE ON GIVEN DATE BECA USE CONCERNED OFFICER WAS ON LEAVECOPY OF INQUIRY HAD NOT BEEN PROVIDED BY AO T O ASSESSEE AND INVESTIGATION OFFICER HAD NOT DEPUTED INSPECTOR TO ENQUIRE WHEREA BOUTS OF COMPANYTHUS ORDER OF CIT(A) WAS REVERSEDASSESSEES APPEAL ALLOWED ON TE CHNICAL GROUND AS WELL AS ON MERIT. GANGA PROJECTS (P) LTD. AND B.S. TRADERS (P.) LTD. IN ITA NO. 175 & 176/JP/15 AND 179/JP/15 AND CO NO. 15 & 16/JP/15 AND 19/JP/15 ORD ER DATED 22.06.2016 HONBLE ITAT, JAIPUR BENCH IN THE SIMILAR FACTS OF THE CASE INVOLVING THE SAME COMPANIES HAVE DELETED THE ADDITION (REFERRED ABOVE). ANCHAL FINTRADE PVT. LTD. VS. ITO IN ITA NO. 131/JP /16 FOR A.Y. 05-06 IN THIS CASE ALSO, WHERE ADDITION OF RS. 5 LACS WAS MADE ON THE BASIS OF THE INFORMATION RECEIVED FROM INVESTIGATION WING, NEW DELHI THAT AS SESSEE WAS ONE OF THE BENEFICIARY OF THE ACCOMMODATION ENTRY PROVIDED BY S.K. JAIN GROUP , THE HONBLE ITAT AFTER ELABORATE DISCUSSION ON PAGE 12-17 OF THE ORDER AFTER CONSIDE RING THE DECISION OF JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. SUPERTECH DIAMOND TOL LS PVT. LTD. 229 TAXMAN 460 AND THE ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 24 DECISION OF ALLAHABAD HIGH COURT IN CASE OF CIT VS. VACMET PACKAGING INDIA PVT. LTD. 367 ITR 217 DELETED THE ADDITION CONFIRMED BY CIT(A). IN VIEW OF ABOVE, THE LD. CIT(A) HAS RIGHTLY DELETE D THE ADDITION AND THUS THE GROUNDS OF THE DEPARTMENT BE DISMISSED. THE LD. AR HAS ALSO RELIED ON THE RECENT DECISION OF THE HONBLE ITAT, JAIPUR BENCH IN THE CASE OF ITO VS M/S ALOK FINTRADE (P) LT D. IN ITA NO. 180/JP/2015 ORDER DATED 14/5/2018 AND IN THE CASE O F M/S CHOICE BUILDSTATE PVT. LTD. VS ITO IN ITA NO. 431/JP/2016 ORDER DATED 28/3/2018. 8. THE BENCH HAVE HEARD BOTH THE SIDES ON THIS ISSUE AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSING OFFI CER HAS TREATED THE SHARE CAPITAL RECEIVED FROM M/S SAM PORTFOLIO PVT.L TD. AS UNEXPLAINED FOR THE REASON THAT THE COMPANY HAS NOT FURNISHED SCHED ULE-5 OF THE BALANCE SHEET, WHICH SHOWS THE DETAILS OF INVESTMENTS. ONLY B ECAUSE SCHEDULE-5 TO THE BALANCE SHEET IS NOT FURNISHED BY THE COMPANY, THE INVESTMENT MADE BY IT IN THE SHARE CAPITAL OF THE ASSESSEE CANNOT B E CONSIDERED AS UNEXPLAINED. THIS COMPANY HAS MADE INVESTMENT IN THE SHARE CAPITAL OF THE ASSESSEE THROUGH J&K BANK. FROM THIS BANK ACCOUNT, INVESTMENT OF RS. 5,00,000/- MADE BY IT IS FULLY VERIFIABLE. EVEN ASE EM GUPTA IN HIS STATEMENT WHILE PROVIDING THE LIST OF ENTITIES PROVIDING THE A CCOMMODATION ENTRIES HAS NOT STATED THAT J&K BANK OF SAM PORTFOLIO PVT. LTD. HAS BEEN USED BY HIM FOR PROVIDING THE ACCOMMODATION ENTRIES. FURTHER IN SPITE OF THE SPECIFIC REQUEST MADE BY THE ASSESSEE, THE AO HAS NOT UTILIS ED HIS POWER UNDER THE ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 25 ACT TO ENFORCE THE ATTENDANCE OF THE DIRECTOR OF TH E COMPANY. THE ASSESSEE WAS ALSO NOT PROVIDED AN OPPORTUNITY TO CROSS EXAMIN E SH. ASEEM KUMAR GUPTA WHO IS ALLEGED TO HAVE STATED TO PROVIDE ACCOM MODATION ENTRY. THE ASSESSEE HAS FILED THE SHARE APPLICATION FORM, CONF IRMATION AND THE BANK STATEMENT WITH REGARD TO THIS COMPANY. THUS, ASSESSE E HAS DISCHARGED HIS PRIMARY BURDEN OF PROVING THE IDENTITY OF THE SHARE APPLICANT, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDI TOR. THUS, THE SHARE CAPITAL MONEY RECEIVED FROM THIS COMPANY IS FULLY E XPLAINED. SIMILARLY IN CASE OF M/S KMC PORTFOLIO PVT. LTD. THE AO TREATED THE SHARE CAPITAL AMOUNT AS UNEXPLAINED BECAUSE IN ANNEXURE-3 OF THE BALANCE SHEET FURNISHED BY THE COMPANY WHICH SHOWS THE DETAILS OF THE INVESTMENT S MADE IN SHARE APPLICATION MONEY IN DIFFERENT COMPANIES, THE NAME OF THE ASSESSEE DOES NOT APPEAR. HOWEVER, THE AO HAS NOT MADE ANY FURTHER ENQUIRY FROM THE COMPANY MORE PARTICULARLY WHEN THE INVESTMENT IS VER IFIABLE FROM ITS BANK ACCOUNT. THE ASSESSEE HAS FILED THE SHARE APPLICATIO N FORM AND CONFIRMATION REGARDING THIS COMPANY. THE AO IN SPITE OF THE REQUE ST OF THE ASSESSEE HAS NOT ISSUED SUMMON TO THE DIRECTOR OF THIS COMPANY F OR HIS PERSONAL PRESENCE. THE SHARE CAPITAL AMOUNT RECEIVED BY ASS ESSEE FROM M/S RAVNET SOLUTIONS PVT. LTD. WAS TREATED AS UNEXPLAINED BY TH E AO BECAUSE THE COMPANY HAS NOT FURNISHED SCHEDULE-5 OF THE BALANCE SHEET WHICH SHOWS THE DETAILS OF INVESTMENTS. ONLY BECAUSE SCHEDULE-5 TO THE BALANCE SHEET IS ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 26 NOT FURNISHED BY THE COMPANY, THE INVESTMENT MADE B Y IT IN THE SHARE CAPITAL OF THE ASSESSEE CANNOT BE CONSIDERED AS UNE XPLAINED PARTICULARLY WHEN SUCH INVESTMENT IS VERIFIABLE FROM ITS BANK ACC OUNT. THE ASSESSEE HAS FILED CONFIRMATION AND SHARE APPLICATION FORM. IN S PITE OF THE REQUEST OF THE ASSESSEE TO THE AO TO ISSUE SUMMON TO THE DIRECTOR OF THIS COMPANY FOR HIS PERSONAL ATTENDANCE, THE SAME WAS NOT ISSUED. IN CAS E OF M/S S.G. PORTFOLIO PVT. LTD., THE ASSESSEE HAD FURNISHED THE CONFIRMAT ION, SHARE APPLICATION FORM AND COPY OF BANK ACCOUNT. FROM THE STATEMENT O F SH.ASEEM KUMAR GUPTA, IT HAS BEEN VERIFIED THAT THE BANK A/C NO. 5 982, 247, 03, 4996 OF CORPORATION BANK AND BANK A/C NO. 10400, 563 OF J&K BANK WAS USED BY HIM FOR PROVIDING ACCOMMODATION ENTRIES WHEREAS ASSE SSEE HAS RECEIVED THE AMOUNT FROM BANK A/C NO. 0241 OF J&K BANK AS EV IDENT FROM THE BANK STATEMENT PLACED AT PAGE NO.50 OF THE PAPER BOOK. I N THESE CIRCUMSTANCES, ASSESSEE HAS DISCHARGED HIS PRIMARY BURDEN OF PROVI NG THE IDENTITY OF THE SHARE APPLICANT, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR.IN RESPECT OF TEN COMPANIES MENTIONED AT S .NO. 5 TO 14 OF THE CHART MENTIONED IN EARLIER PARAGRAPHS, IT HAS BEEN STATED THAT THE ASSESSEE HAS GIVEN THE LATEST ADDRESS AVAILABLE WITH HIM. THIS IS PROVED FROM THE FACT THAT THE SUMMONS ISSUED TO THEM IS NOT RETURNED BAC K UNSERVED. THE ASSESSEE HAD FURNISHED COMPLETE DETAILS TO THE AO R EGARDING THE TRANSACTIONS IN QUESTION, WHICH INCLUDE CONFIRMATIO N, SHARE APPLICATION ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 27 FORM, COPY OF BANK ACCOUNT AND THEIR PERMANENT ACCO UNT NUMBER. THESE COMPANIES (EXCEPT M/S CHHOTI LEASING & FINANCE PVT. LTD.) ARE ALSO NOT COVERED IN THE LIST GIVEN BY SH. ASEEM GUPTA IN HIS STATEMENT AS BEING USED FOR PROVIDING ACCOMMODATION ENTRIES. AS PER TH E STATEMENT OF SHRI ASEEM GUPTA, THE BANK ACCOUNT NO. 252 OF CORPORATIO N BANK OF M/S CHHOTI LEASING & FINANCE PVT. LTD. WAS USED FOR PROVIDING A CCOMMODATION ENTRIES WHEREAS ASSESSEE HAS RECEIVED THE AMOUNT FROM BANK A /C NO. 5043 ON 08.09.2005 AS EVIDENT FROM HIS BANK STATEMENT PLACE D AT PAGE NO. 62 OF THE PAPER BOOK. BY FILING NUMBER OF IDENTITY OF THESE SHARE APPLICA NTS AND THE ASSESSEE HAS SPECIFICALLY REQUESTED THE ASSESSI NG OFFICER TO ENFORCE THE ATTENDANCE OF DIRECTOR OF THESE COMPANIES. THE ASSES SEE HAS PRIMA FACIE DISCHARGED THE ONUS ON IT. FURTHER THE STATEMENT OF SHRI ASEEM KUMAR GUPTA WAS NOT PROVIDED TO THE ASSESSEE AND NO OPPORT UNITY TO CROSS EXAMINE WAS ALSO GIVEN IN SPITE OF THE SPECIFIC REQU EST OF THE ASSESSEE. THUS, NOT PROVIDING THE OPPORTUNITY TO CROSS EXAMINE , THERE IS A VIOLATION OF PRINCIPLES OF NATURE JUSTICE. THE HON'BLE SUPREME CO URT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. CCE (SUPRA) HAS CLEARL Y HELD THAT DENIAL OF OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE WIT NESSES WHOSE STATEMENTS WERE MADE THE SOLE BASIS OF THE ASSESSMEN T IS A SERIOUS FLAW RENDERING THE ORDER A NULLITY. THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VACMET PACKAGING (INDIA) PVT. LTD. (SUPRA ) HAS HELD AS UNDER: ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 28 THE ASSESSEE UNDOUBTEDLY HAD TO DISCHARGE THE ONU S OF ESTABLISHING THE IDENTITY AND CREDIT WORTHINESS OF THE APPLICANT COMPANIES AND TH E GENUINENESS OF THE TRANSACTION. IN THIS REGARD, BOTH THE CIT(A) AND THE TRIBUNAL HA D NOTED THAT THE ASSESSEE HAD ESTABLISHED ALL THE THREE ASPECTS BY PRODUCING, DUR ING THE COURSE OF THE ASSESSMENT, NECESSARY DOCUMENTARY MATERIAL SUCH AS THE SHARE AP PLICATION FORMS, COPIES OF BANK ACCOUNTS, INCOME TAX RETURNS AND BALANCE SHEETS. TH E VIEW WHICH WAS TAKEN BY THE CIT(A) AND WHICH WAS SUSTAINED BY THE TRIBUNAL WOUL D THUS HAVE TO BE REGARDED AS BEING, AT LEAST, A POSSIBLE VIEW TO TAKE IN THE CIR CUMSTANCES OF THE CASE. SIMILARLY IN THE CASE OF ACIT VS. VIP GROWTH FUND PVT . LTD. (SUPRA), THE ITAT, DELHI BENCH HAS HELD AS UNDER: FACTS OF THE CASE IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF INCO ME DECLARING CERTAIN INCOME. SCRUTINY ASSESSMENT U/S 143(3) WAS MADE ON 28.02.2006. IN TH E COURSE OF THE SAID PROCEEDINGS, THE DETAILS OF SHARE APPLICATION MONEY/SHARE CAPITA L WERE FURNISHED. THE AO RECEIVED INFORMATION FROM THE INVESTIGATION WING OF THE DEPA RTMENT, THAT THE COMPANIES / PERSONS WHICH CONTRIBUTED TOWARDS SHARE APPLICATION MONEY / SHARE CAPITAL WERE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES. IN VIE W OF THE SPECIFIC INFORMATION, THE AO INITIATED ACTION U/S 148 AND COMPLETED THE ASSESSME NT DISBELIEVING A PART OF SHARE APPLICATION MONEY/SHARE CAPITAL OF RS. 40,00,000/- . FINDINGS OF THE CASE THE HONBLE ITAT AFFIRMED THE FINDINGS OF THE LD. CIT(A) WHO DELETED THE ADDITION BY HOLDING THAT NOTHING ADVERSE WAS FOUND IN THE DETAI LS OF SHARE APPLICATION MONEY/SHARE CAPITAL FURNISHED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO HAS NOT VERIFIED THE DETAILS FURNISHED BY THE ASSESSEE AND I.T. RECORDS OF THE SHAREHOLDERS/INVESTING COMPANIES. THE ASSESSEE HAS DISCHARGED ITS BURDEN OF PROVIDING BASIC DETAILS WHICH WERE REQUIRED FOR VERIFICATION TO FULFILL THE CONDITIONS VIZ. IDENTITY OF THE CREDITOR, CREDIT WORTHINESS OF THE CREDITOR AND GENUINENESS OF TRANSACTION. THE ASSESSEE HAS PROVIDED NECESSARY DETAILS INCLUDING T HE WARD/CIRCLE WHERE THE SHARE APPLICANTS/ INVESTING COMPANIES WERE ASSESSED TO IN COME TAX AND DISCHARGED THE ONUS CAST ON IT. ALL THE AMOUNTS WERE RECEIVED, THROUGH BANKING CHANNELS BY WAY OF CHEQUES ISSUED IN FAVOUR OF THE APPELLANT COMPANY TOWARDS S HARE APPLICATION MONEY. THE SHARES WERE ALLOTTED AS PER THE DOCUMENTS FURNISHED BEFORE ROC. THE ASSESSEE HAS PRODUCED POSSIBLE/BEST EVIDENCE TO SUPPORT ITS CLAIM. THE AO HAS SIMPLY ACTED ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING WITHOUT VERIFY ING THE DETAILS FURNISHED BY THE ASSESSEE COMPANY AND ALSO NOT PLACING BEFORE THE AS SESSEE THE INFORMATION AND FINDINGS OF THE INVESTIGATION WING VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. IF THERE IS ANY DISCREPANCY IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE INVESTING COMPANIES, THERE IS A ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 29 CASE FOR REOPENING OF THE ASSESSMENT OF THE RESPECT IVE SHAREHOLDERS/INVESTING COMPANIES. THE ASSESSEE CANNOT BE PENALIZED FOR THE MISTAKES/FAULTS COMMITTED BY THE SHARE HOLDERS. THE AO HAS NOT FOUND ANY DISCREPANCY IN THE BOOKS OF ACCOUNT AND BANK ACCOUNTS MAINTAINED BY THE ASSESSEE. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. SUPERTECH DIAMOND TOOLS PVT. LTD. (SUPRA) HAS HELD AS UNDER: AO MADE ADDITION U/S 68 ON ACCOUNT OF AMOUNT RECE IVED FOR SHARE CAPITAL, ITS PREMIUM AND AMOUNT PAID AS COMMISSION FOR ARRANGING IT ON B ASIS OF STATEMENT MADE BY THIRD PARTIES WHO WERE RELATED TO PURCHASING COMPANIES ST ATING THAT THESE COMPANIES WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES IN LIEU OF COMMISSION. IT WAS HELD THAT THE SAID THIRD PARTY STATEMENT WAS MADE BEHIND BACK OF ASSESSEE AND NO OPPORTUNITY OF BEING HEARD OR CROSS-EXAMINING THIRD PARTIES WAS PR OVIDED TO ASSESSEE. FURTHER, AO COULD NOT BRING ANY MATERIAL TO DISAPPROVE GENUINEN ESS OF CONFIRMATION AND AFFIDAVITS FILED BY ASSESSEE. ALL TRANSACTIONS WERE THROUGH AC COUNT PAYEE CHEQUES. ALL THESE COMPANIES HAD PAN NUMBERS, WERE REGULARLY ASSESSED TO TAX, WERE REGISTERED UNDER COMPANIES ACT AND FORM NO.2 FOR ALLOTMENT WAS ALSO FILED. THEREFORE, APPELLATE AUTHORITIES HAVE RIGHTLY DELETED THE ADDITION. THE ITAT, DELHI BENCH IN THE CASE OF ITO VS. RAKAM MO NEY MATTERS P. LTD. (SUPRA) HAS HELD AS UNDER: IN THIS CASE, RETURN OF INCOME WAS SUBMITTED DECL ARING CERTAIN INCOME. THE CASE WAS REOPENED U/S 148 OF THE IT ACT, 1961 ON THE BASIS O F INFORMATION RECEIVED FROM THE INVESTIGATION WING THAT ASSESSEE HAS RECEIVED ACCOM MODATION ENTRIES BY WAY OF SHARE APPLICATION MONEY FROM CERTAIN COMPANIES. THE AO RE QUIRED THE ASSESSEE TO PROVE THE GENUINENESS OF THE SHARE APPLICATION MONEY RECEIVED BY IT. IN RESPONSE TO SAME, THE ASSESSEE FILED DETAILS IN THE FORM OF SHARE APPLICA TION FORM, PAN, AFFIDAVIT OF THE DIRECTORS OF SHAREHOLDER COMPANIES, CONFIRMATION, B ANK STATEMENT ETC. THE AO, HOWEVER, HELD THAT AS ASSESSEE HAS NOT PRODUCED THE DIRECTOR OF THE COMPANIES FROM WHOM THE SHARE APPLICATION MONEY HAS BEEN RECEIVED, IT HAS FAILED TO DISCHARGE ITS ONUS TO PROVE THE GENUINENESS OF THE SHARE APPLICATION A ND ACCORDINGLY MADE ADDITION U/S 68 OF THE IT ACT, 1961. THE LD. CIT(A) OBSERVED THAT A SSESSEE COMPANY HAS FILED ALL THE NECESSARY DETAILS WHICH INCLUDE COPIES OF SHARE APP LICATION FORM, COPIES OF BANK STATEMENTS, COPIES OF INCOME TAX RETURNS, COPIES OF PAN CARDS, BALANCE SHEET, COPY OF CERTIFICATE OF INCORPORATION AND MEMORANDUM OF ARTI CLES OF ASSOCIATION OF THE COMPANIES, THAT THE STATUS OF THESE COMPANIES IS A CTIVE ON THE ROC WEBSITE AND THAT THE OPPORTUNITY OF CROSS EXAMINATION WAS NOT PROVID ED TO THE APPELLANT IN RESPECT OF THE ALLEGATION OF THE INVESTIGATION WING. THUS, ON THE BASIS OF THE ABOVE FACTS AND BY RELYING UPON THE VARIOUS JUDGMENTS, THE LD. CIT(A) HELD THA T ASSESSEE HAS DISCHARGED ITS ONUS AND ACCORDINGLY DELETED THE ADDITION. THE HONBLE I TAT HELD AS UNDER:- 13. WE HAVE HEARD BOTH THE PARTIES. THE ONLY ISSUE HERE IS THE ADDITION OF RS.60 LACS MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CREDIT ON ACCOUNT OF THE SHARE APPLICATION ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 30 MONEY. ON GOING THROUGH THE FACTS OF THE CASE, WE N OTICE THAT ASSESSEE HAS FILED THE RELEVANT DETAILS WHICH IT COULD HAVE FILED IN SUPPO RT OF ITS CONTENTION OF HAVING RECEIVED THE SHARE APPLICATION MONEY FROM EACH OF THESE SHAR EHOLDER COMPANIES. 14. THE ASSESSING OFFICER HAS ISSUED SUMMONS TO TH E DIRECTORS OF THESE SHAREHOLDER COMPANIES. IN RESPONSE THERE TO, THE DIRECTORS HAVE NOT ATTENDED. ASSESSING OFFICER HAS NOT CONDUCTED ANY FURTHER INQUIRY FOR NON-ATTENDANC E OF THE PERSONS. NON-ATTENDANCE ON ISSUING SUMMONS ITSELF CANNOT BE A GROUND FOR REJEC TING ALL THE RELEVANT DOCUMENTS FURNISHED BY THE ASSESSEE COMPANY. SUMMONS ISSUED B Y ASSESSING OFFICER HAVE NOT BEEN RECEIVED BACK AS UNSERVED. THEREFORE, IT CANNOT BE SAID THAT THESE COMPANIES WERE NOT IN EXISTENCE AT THE GIVEN ADDRESSES. THE DOCUMENTS FIL ED WITH THE REGISTRAR OF COMPANIES SHOW THAT THESE COMPANIES WERE ACTIVE DURING THE RE LEVANT PERIOD. ASSESSING OFFICER HAS NOT VERIFIED ANY OF THE RELEVANT DOCUMENTS SUBMITTE D BY ASSESSING OFFICER FOR DISCHARGING ONUS U/S 68 OF THE ACT. WE ALSO NOTE TH AT THE ASSESSING OFFICER HAS NOT REFERRED NOR DISCUSSED ABOUT THE SO-CALLED ALLEGED STATEMENT OF ENTRY PROVIDERS AGAINST THE ASSESSEE COMPANY. IT IS ALSO NOT KNOWN WHETHER ASSESSEES NAME FIGURED IN THAT STATEMENT. THE CONTENTION OF THE ASSESSEE HAS BEEN REJECTED WITHOUT EXAMINATION AND VERIFICATION OF THE DOCUMENTS SUBMITTED BY THE ASSE SSEE. THE INFORMATION RECEIVED BY HIM FROM THE INVESTIGATION DEPARTMENT HAS BEEN MADE THE BASIS OF ADDITION WITHOUT ANY FURTHER INVESTIGATION IN THIS REGARD. EVEN THE PROC ESS OF EXAMINATION OF THE DIRECTORS BY ISSUE OF SUMMONS HAS NOT BEEN TAKEN TO THE LOGICAL END AS AFTER THE FAILURE OF THE DIRECTORS TO ATTEND IN RESPONSE TO THE SUMMONS ISSU ED TO THEM NO FURTHER STEPS WERE TAKEN. THE ASSESSING OFFICER COULD HAVE DONE CROSS VERIFICATION ABOUT THE STATUS OF THESE COMPANIES WITH THE RESPECTIVE ASSESSING OFFICER OF THESE SHAREHOLDER COMPANIES. 16. IN THE PRESENT CASE, AS NOTED ABOVE, THE AO HA S NOT BEEN ABLE TO BRING ON RECORD ANY VALID MATERIAL OR EVIDENCE TO DISCREDIT THE EVIDENC ES AND THE EXPLANATION GIVEN BY THE ASSESSEE COMPANY. THE ONLY EVIDENCE WHICH HAS BEEN REFERRED BY THE AO IS STATEMENT OF THIRD PARTIES RECORDED BY THE INVESTIGATION WING. A DMITTEDLY THESE STATEMENTS WERE NOT RECORDED BY THE AO BUT WERE RECORDED BY THE INVESTI GATION WING AT THE BACK OF THE ASSESSEE. THE AO HAS NOT EVEN REFERRED TO THE RELEV ANT PORTION OF SUCH STATEMENT SO AS TO ESTABLISH THE COLLUSIVE ARRANGEMENT THE ASSESSEE COMPANY HAD WITH THESE PERSONS. 17. ACCORDINGLY WE ARE OF THE VIEW THAT THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO. THE COORDINATE BENCH OF ITAT, JAIPUR BENCH IN THE CAS E OF JADAU JEWELLERS & MANUFACTURING (P) LTD. VS. ACIT (SUPRA) HAS HELD A S UNDER: ASSESSEE WAS ENGAGED IN BUSINESS OF TRADING AND M ANUFACTURING OF JEWELLERYSEARCH AND SEIZURE OPERATION WAS CARRIED BY DEPARTMENT U/S 132 AND SURVEY U/S 133A WAS MADE ON MEMBERS OF X OF WHICH ASSESSEE WAS ON E OF MEMBERSAO ISSUED NOTICE U/S 153A AND ASSESSEE WAS ASKED TO FILE TRUE AND CO RRECT RETURN OF INCOME AS PRESCRIBED UNDER R 12 OF THE INCOME TAX RULES, 1962IN RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A NO DISCLOSED INCOME PERTAINING TO R ELEVANT YEAR WAS DECLARED BY ASSESSEEAO OBSERVED THAT DURING YEAR UNDER CONS IDERATION, ASSESSEE SHOWED TOTAL TURNOVER OF RS. 2.05 CRORES ON WHICH ASSESSEE RETUR NED A NET LOSS OF RS. 13,29,220AO OBSERVED THAT ASSESSEE HAD OBTAINED SHARE CAPITAL A ND SHARE APPLICATION MONEY FROM ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 31 VARIOUS COMPANIESAO HELD THAT AMOUNT RECEIVED FROM STATED COMPANIES IN FORM OF SHARE CAPITAL WAS ONLY ACCOMMODATION ENTRIES AND GE NUINENESS OF SHARE CAPITAL RECEIVED BY ASSESSEE COMPANY COULD NOT BE ACCEPTED AO PASSED ORDER U/S 153 AND MADE ADDITION OF RS. 60,00,000 ON ACCOUNT OF ALLEGE D UNEXPLAINED SHARE CAPITAL RECEIVED BY ASSESSEE COMPANY FROM FOLLOWING PERSONSCIT(A) U PHELD ADDITION MADE BY AO HELD, AO COULD ISSUE NOTICE U/S 143(2)IN ASSESSEE S CASE, SEARCH WAS CONDUCTED ON 06/5/2010 AND AO ISSUED NOTICE ON 16/09/2011 U/S 15 3A READ WITH S 143(2)DURING COURSE OF SEARCH, NO INCRIMINATING DOCUMENTS WERE F OUND THEREFORE, NO NOTICE COULD BE ISSUED U/S 153A READ WITH S 143(3) BECAUSE NO PROCE EDING WAS PENDING BEFORE AO WHICH ABATED FOR ISSUE OF NOTICE ON DATE OF INITIAT ION OF SEARCHTHUS, ON TECHNICAL GROUND, ORDER PASSED U/S 153A READ WITH S 143(3) WA S HELD VOID AB INITIOFURTHER ASSESSEE BEFORE AO HAD PRODUCED COPY OF SHARE APPL ICATION, CONFIRMATION OF CASH CREDITORS, COPY OF PAN, COPY OF BOARD RESOLUTION, C OPY OF DIRECTORS REPORT, AUDITORS REPORT, COPY OF BALANCE SHEET, COPY OF P&L ACCOUNT, COPY OF BANK ACCOUNT TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF CASH CREDITORSAO MADE ADDITION ON BASIS OF INVESTIGATION CONDUCTED BY ITO, BUT AO DID NOT CLARIFY WHAT INQUIRY HAD BEEN CONDUCTED AND WHAT EVIDENCES COLLECTED WHICH HAD GO NE AGAINST ASSESSEEALSO ALTHOUGH NOTICE U/S 131 WAS ISSUED BY ITO, INVESTIG ATION WERE SERVED IN CASE OF X AND Y BUT COMPLIANCE COULD NOT BE MADE ON GIVEN DATE BECA USE CONCERNED OFFICER WAS ON LEAVECOPY OF INQUIRY HAD NOT BEEN PROVIDED BY AO T O ASSESSEE AND INVESTIGATION OFFICER HAD NOT DEPUTED INSPECTOR TO ENQUIRE WHEREA BOUTS OF COMPANYTHUS ORDER OF CIT(A) WAS REVERSEDASSESSEES APPEAL ALLOWED ON TE CHNICAL GROUND AS WELL AS ON MERIT. SIMILAR VIEW HAS ALSO BEEN AFFIRMED BY THE ITAT, JAIP UR BENCH IN ITS ORDER DATED 22/06/2016 IN THE CASE OF GANGA PROJECTS (P) LTD. AND B.S. TRADERS (P) LTD. (SUPRA) AND ANCHAL FINTRADE PVT. LTD. VS I TO (SUPRA). THE COORDINATE BENCH OF ITAT, JAIPUR IN THE CASE OF ITO V S. M/S ALOK FINTRAE (P) LTD. VIDE ORDER DATED 14/05/2018 HAS DECIDED AS UNDER: 20. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. WE FIND THAT A SIMILAR ISS UE HAS COME UP BEFORE THIS BENCH IN THE CASE OF M/S CHOICE BUILDSTATE PVT. LTD . VS ITO (SUPRA) WHEREIN WE HAVE HELD AS UNDER: 10. NOW, COMING TO THE MERITS OF ADDITION OF RS 35 LACS MADE BY THE AO UNDER SECTION 68 OF THE ACT. ON CAREFUL EXAMINATION OF MA TERIAL AVAILABLE ON RECORD, WE FIND THAT IT IS A CASE WHERE THE AO HAS RELIED BLINDLY ON INFORMATION SUPPLIED BY THE INVESTIGATION WING MUMBAI WITHOUT CARRYING OUT ANY FURTHER EXAMINATION OF DOCUMENTS SUBMITTED DU RING THE COURSE OF ASSESSMENT PROCEEDINGS AND INDEPENDENT INVESTIGATION OF THESE INVESTOR COMPANI ES. AS WE HAVE NOTED ABOVE, THE INFORMATION SO RECEIVED FROM THE INVESTIGATION WING, MUMBAI AND AFTER DUE ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 32 EXAMINATION THEREOF, THE AO HAS FORMED A PRIMA FACI E VIEW AND A REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT AND HAS THUS ASSUMED JURISDICTION U/S 147 OF THE ACT. AT THE SAME TIME, SUCH A PRIMA FACIE VIEW HAS TO BE FINALIZED AND A FIRM VIEW HAS TO BE TAKEN ON BAS IS OF EXAMINATION OF DOCUMENTS SO BROUGHT ON RECORD AND FURTHER INVESTIG ATION TO BE CARRIED OUT BEFORE ANY TAX LIABILITY IS FASTENED ON THE ASSESSE E. IN THE INSTANT CASE, WE FIND THAT THE ASSESSEE COMPANY HAS SUBMITTED DETAIL DOCU MENTATION IN REGARD TO THESE COMPANIES FROM WHOM A TOTAL AMOUNT OF RS.35 L AKHS WAS RECEIVED NAMELY (I) SHARE APPLICATION FORM (II) COPY OF BOARD RESOL UTION (III) COPY OF BANK STATEMENTS REFLECTING PAYMENT THROUGH CHEQUE (IV) A UDITED STATEMENT OF ACCOUNTS AND ACKNOWLEDGEMENT OF ITR (V) COPY OF CER TIFICATE OF INCORPORATION AND CERTIFICATE OF COMMENCEMENT OF BUSINESS (VI) CO PY OF PAN CARD. WHERE THE ASSESSEE FURNISHES THE DOCUMENTATION AND NECESSARY EXPLANATION, THE AO SHOULD EXAMINE WHETHER THE DOCUMENTS SO SUBMITTED AND EXPL ANATION SO OFFERED ESTABLISHES THE THREE INGREDIENTS I.E. IDENTITY OF THE INVESTOR COMPANY, CREDITWORTHINESS OF INVESTOR COMPANY AND GENUINENES S OF THE TRANSACTION. WHETHER EXPLANATION OF THE ASSESSEE IS RELIABLE OR ACCEPTABLE? IF YES, NO FURTHER ACTION IS REQUIRED AND THE SUM SO CREDITED MAY NOT BE CHARGED TO INCOME TAX. IF THE EXPLANATION SO OFFERED BY THE ASSESSEE IS NOT A CCEPTABLE OR RELIABLE, THE AO SHOULD GIVE A DETAILED REASONING IN THE ASSESSMENT ORDER FOR NOT ACCEPTING THE SAME. THE ORDER PASSED BY THE AO SHOULD BE SPEAKING ONE BRINGING ON RECORD ALL THE FACTS, EXPLANATION FURNISHED BY THE ASSESSEE IN RESPECT OF NATURE AND SOURCE OF THE CREDIT IN ITS BOOKS OF ACCOUNTS AND REASONS FOR NOT ACCEPTING THE EXPLANATION OF THE ASSESSEE. IN THE INSTANT CASE, WE FIND THAT THE AO HAS NOT TAKEN ANY EFFORTS TO EXAMINE THESE DOCUMENTS SO SUBMITTED BY THE ASSE SSEE COMPANY DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAS SIMPLY GON E BY HIS PRIMA FACIE VIEW FORMED AT THE TIME OF ASSUMPTION OF JURISDICTION U/ S 147 AND SUCH A PRIMA FACIE VIEW WITHOUT FURTHER EXAMINATION/INVESTIGATION CANN OT BE A BASIS FOR FORMING A FINAL VIEW OF MAKING THE ADDITION IN THE HANDS OF T HE ASSESSEE COMPANY. IT IS A CASE WHERE THE AO WAS IN RECEIPT OF MATERIAL INFORM ATION FROM THE INVESTIGATION WING, MUMBAI THAT THE ASSESSEE COMPANY HAS RECEIVED ACCOMMODATION ENTRIES IN FORM OF SHARE APPLICATION/INVESTMENT FROM SEVEN COMPANIES WHO ARE NOT DOING GENUINE BUSINESS ACTIVITIES AS DIVULGED DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS IN CASE OF PRAVEEN JAIN GROUP. IN THESE SITUATIONS, THE COURTS HAVE HELD THAT THE ASSESSING OFFICER CANNOT SIT BACK WITH FOL DED HANDS AND THEN COME FORWARD TO MERELY REJECT THE EXPLANATION SO MADE, W ITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY INTO THE MATERIAL PLACED BE FORE HIM BY THE ASSESSEE. IF THE ASSESSING OFFICER HARBOURS ANY DOUBTS OF THE LEGITI MACY OF ANY SUBSCRIPTION HE IS EMPOWERED, NAY DUTY-BOUND, TO CARRY OUT THOROUGH IN VESTIGATIONS. BUT IF THE ASSESSING OFFICER FAILS TO UNEARTH ANY WRONG OR ILL EGAL DEALINGS, HE CANNOT OBDURATELY ADHERE TO HIS SUSPICIONS AND TREAT THE S UBSCRIBED CAPITAL AS THE UNDISCLOSED INCOME OF THE COMPANY. WE THEREFORE AGREE WITH THE CONTENTIONS OF THE ID AR THAT IN ABSENCE OF ANY FALSITY WHICH HAVE BEEN FOUND IN THE DOCUMENTS ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 33 SO SUBMITTED BY THE ASSESSEE COMPANY TO PROVE THE I DENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE TRANSACTION, THESE DOCUMEN TS CANNOT BE SUMMARILY REJECTED AS HAS BEEN DONE BY THE AO IN THE INSTANT CASE. FURTHER, WE FIND THAT THERE IS NO ACTION TAKEN BY THE AO IN TERMS OF CALL ING INFORMATION FROM THESE COMPANIES UNDER SECTION 133(6) AND/OR ISSUING SUMMO NS TO DIRECTORS OF THESE COMPANIES UNDER SECTION 131 OF THE ACT. FURTHER, WH ERE THE AO RELIES UPON THE STATEMENT OF THIRD PARTIES (PRAVEEN JAIN AND OTHERS) RECORDED U/S 132(4), WITHOUT GETTING INTO CONTROVERSY WHETHER THE SAID STATEMENT WAS RETRACTED SUBSEQUENTLY, THE FACT REMAINS THAT THE ASSESSEE DESERVES AN OPPO RTUNITY TO CROSS EXAMINE SUCH PERSONS AS HELD BY THE HON'BLE SUPREME COURT IN CAS E OF ANDAMAN TIMBER INDUSTRIES (SUPRA). DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COMPANY HAS MADE SPECIFIC REQUEST TO THE AO TO ALLO W CROSS EXAMINATION OF THESE PERSONS WHICH HAS HOWEVER NOT BEING PROVIDED TO THE ASSESSEE COMPANY. IN LIGHT OF ABOVE DISCUSSIONS, WE DON'T FIND ANY BASIS FOR M AKING ADDITION UNDER SECTION 68 OF THE ACT. IN THE RESULT, GROUND NO.2 TAKEN BY THE ASSESSEE COMPANY IS ALLOWED. 21. IN THE INSTANT CASE, WE FIND THAT THE ASSESSING OFFICER HAS RELIED SOLELY ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING DE LHI WITHOUT CARRYING OUT ANY FURTHER EXAMINATION OF DOCUMENTS SUBMITTED DURI NG THE COURSE OF REASSESSMENT PROCEEDINGS AND WITHOUT CARRYING ANY I NDEPENDENT INVESTIGATION OF THESE COMPANIES. THE INFORMATION SO RECEIVED FR OM THE INVESTIGATION WING DELHI IS SUFFICIENT TO FORM A PRIMA FACIE VIEW AND ACQUIRING JURISDICTION UNDER SECTION 147 OF THE ACT. HOWEVER, SUCH A PRIMA FACI E VIEW HAS TO BE FINALIZED AND A FIRM VIEW HAS TO BE TAKEN ON BASIS OF EXAMINA TION OF DOCUMENTS SO BROUGHT ON RECORD AND FURTHER INVESTIGATION TO BE C ARRIED OUT BEFORE ANY TAX LIABILITY IS FASTENED ON THE ASSESSEE. IN THE INSTA NT CASE, WE FIND THAT THE ASSESSEE COMPANY HAS SUBMITTED DOCUMENTATION IN RES PECT OF THESE COMPANIES FROM WHOM A TOTAL AMOUNT OF RS. 46 LAKHS WAS RECEIV ED NAMELY SHARE APPLICATION FORM, RETURN OF ALLOTMENT FILED WITH RE GISTRAR OF COMPANIES EVIDENCING ALLOTMENT OF SHARES, COPY OF BANK STATEM ENTS REFLECTING PAYMENT THROUGH CHEQUE, CONFIRMATION OF THESE COMPANIES OF HAVING INVESTED IN THE ASSESSEE COMPANY AND OF THE FACT THAT THERE ARE ASS ESSED TO TAX AND HAVE BEEN ALLOTTED PAN NUMBER. WE FIND THAT THE AO HAS NOT T AKEN ANY EFFORTS TO EXAMINE THESE DOCUMENTS SO SUBMITTED BY THE ASSESSE E COMPANY DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAS SIMPLY GON E BY HIS PRIMA FACIE VIEW FORMED AT THE TIME OF ASSUMPTION OF JURISDICTION U/ S 147 AND SUCH A PRIMA FACIE VIEW WITHOUT FURTHER EXAMINATION/INVESTIGATION CANN OT BE A BASIS FOR FORMING A FINAL VIEW FOR MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE COMPANY. FURTHER, WE NOTE THAT IN RESPECT OF THREE COMPANIES FROM WHOM RS 20 LACS HAS BEEN RECEIVED AS SHARE CAPITAL, THE ADDITION HAS BE EN MADE BY THE AO WITHOUT EVEN ASKING THE ASSESSEE TO SUBMIT THE DESIRED INFO RMATION DURING THE ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 34 REASSESSMENT PROCEEDINGS WHICH CANNOT BE ACCEPTED A T FIRST PLACE. IT IS THUS A CASE WHERE THE AO WAS IN RECEIPT OF MATERIAL INFORM ATION FROM THE INVESTIGATION WING, DELHI THAT THE ASSESSEE COMPANY HAS RECEIVED ACCOMMODATION ENTRIES IN FORM OF SHARE APPLICATION/ INVESTMENT FROM TWO COMPANIES AS DIVULGED DURING THE COURSE OF SEARCH A ND SEIZURE OPERATIONS IN CASE OF S K JAIN GROUP. IN THESE SITUATIONS, THE CO URTS HAVE HELD THAT THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS AND THEN COME FORWARD TO MERELY REJECT THE EXPLANATION SO MADE, WITHOUT CARR YING OUT ANY VERIFICATION OR ENQUIRY INTO THE MATERIAL PLACED BEFORE HIM BY THE ASSESSEE. IF THE ASSESSING OFFICER HARBOURS ANY DOUBTS OF THE LEGITIMACY OF AN Y SUBSCRIPTION HE IS EMPOWERED, NAY DUTY-BOUND, TO CARRY OUT THOROUGH IN VESTIGATIONS. BUT IF THE ASSESSING OFFICER FAILS TO UNEARTH ANY WRONG OR ILL EGAL DEALINGS, HE CANNOT OBDURATELY ADHERE TO HIS SUSPICIONS AND TREAT THE S UBSCRIBED CAPITAL AS THE UNDISCLOSED INCOME OF THE COMPANY. WE ARE THEREFORE OF THE VIEW THAT THERE IS NO INFIRMITY IN THE FINDINGS OF THE LD CIT(A) THAT IN ABSENCE OF ANY FALSITY WHICH HAVE BEEN FOUND IN THE DOCUMENTS SO SUBMITTED BY TH E ASSESSEE COMPANY TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE SHARE TRANSACTION AND ANY SATISFACTION TO THAT EFFECT RECORDED BY THE AO, THESE DOCUMENTS CANNOT BE SUMMARILY REJECTED AS HAS BEEN DONE BY THE AO IN THE INSTANT CASE. FURTHER, WE FIND THAT THERE IS NO ACTION TAKEN BY THE AO IN TERMS OF CALLING INFORMATION FROM THESE COMPANIES UNDER SECTION 133(6) AND/OR IS SUING SUMMONS TO DIRECTORS OF THESE COMPANIES UNDER SECTION 131 OF T HE ACT. 22. FURTHER, BEING THE REASSESSMENT PROCEEDINGS, WH ERE THE AO IS CEASED OF CERTAIN INFORMATION AND DOCUMENTS, IT IS INCUMBENT UPON HIM TO CONFRONT THE SAME TO THE ASSESSEE AND ALLOW THE LATTER TO FILE ITS OBJEC TIONS AND REBUTTAL. THE ADDITIONS MADE, MERELY RELYING ON THESE INFORMATION AND DOCUMENTATION, WITHOUT CONFRONTING THE ASSESSEE CANNOT BE ACCEPTED . BESIDES FURNISHING THE REASONS FOR REOPENING THE ASSESSMENT TO THE ASSESSE E COMPANY, THERE IS NOTHING ON RECORD THAT SUCH INFORMATION/DOCUMENTATI ON WAS CONFRONTED TO THE ASSESSEE. FURTHER, THE AO HAS RELIED UPON THE STATE MENT OF THIRD PARTIES NAMELY, SHRI S.K. JAIN, SHRI V.K. JAIN, SHRI ASSEM KUMAR GUPTA AND SHRI RAJESH AGARWAL, THE ASSESSEE AGAIN DESERVES AN OPPORTUNITY TO CROSS EXAMINE SUCH PERSONS AS HELD BY THE HON'BLE SUPREME COURT IN CAS E OF ANDAMAN TIMBER INDUSTRIES (SUPRA). 23. FURTHER, HONBLE RAJASTHAN HIGH COURT IN CASE O F AKJ GRANITES (P) (LTD) (SUPRA), IN CONTEXT OF ADDITION OF SHARE APPLICATION MONEY U NDER SECTION 68, HAS HELD AS UNDER: ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 35 SO FAR AS QUESTION NO. 1 IS CONCERNED, IT IS STATE D BY LEARNED COUNSEL FOR THE APPELLANT THAT THE ISSUE EMBEDDED IN THE SAID QUEST ION HAS ALREADY BEEN DECIDED BY THIS COURT AND GOVERNED BY THE RATIO LAID DOWN IN S HREE BARKHA SYNTHETICS LTD. V. ASST. CIT [2005] 197 CTR 432 ; [2006] 283 ITR 377 . IT HAS BEEN POINTED OUT THAT SHARE APPLICATIONS ARE MADE BY A NUMBER OF PERSONS, MAY BE IN THEIR OWN NAMES OR BENAMI, BUT THE FACT THAT SHARE APPLICATIONS RECEIV ED FROM DIFFERENT PLACES ACCOMPANIED BY SHARE APPLICATION MONEY, NO PRESUMPT ION CAN BE DRAWN THAT THE SAME BELONGS TO THE ASSESSEE AND CANNOT BE ASSESSED IN HIS HANDS AS HIS UNDISCLOSED INCOME UNLESS SOME NEXUS IS ESTABLISHED THAT THE SHARE APPLICATION MONEY FOR AUGMENTING THE INVESTMENT IN BUSINESS HAS FLOWED FROM THE ASSESSEE'S OWN MONEY. IN COMING TO THIS CONCLUSION, THE COURT RELIED ON CTT V. STELLAR INVESTMENT LTD. [1991] 192 ITR 287 (DELHI) WHICH HAS SINCE BEEN AFFIRMED BY THE SUPREME COURT IN CIT V. STELLER INVESTMENT LTD. [2001] 251 ITR 263 . IN VIEW THEREOF, THIS QUESTION NEED NOT BE DECIDED AGAIN. 24. IN THE INSTANT CASE, NO SUCH NEXUS HAS BEEN EST ABLISHED BY THE REVENUE AND THE SUSPICION HOWEVER STRONG CANNOT BE BASIS FOR MAKING THE ADDITION. THEREFORE, NO PRESUMPTION CAN BE DRAWN WITHOUT ESTABLISHING TH E NECESSARY NEXUS THAT SHARE APPLICATION MONEY RECEIVED IS ASSESSEES OWN UNDISCLOSED MONEY. 25. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIRE TY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DON'T FIND ANY BASIS FOR MAKING ADDITI ON UNDER SECTION 68 OF THE ACT AND THE FINDINGS OF THE LD CIT(A) ARE HEREBY CO NFIRMED. IN THE RESULT, GROUNDS TAKEN BY THE REVENUE ARE HEREBY DISMISSED. THE ITAT, JAIPUR BENCH IN THE CASE OF M/S CHOICE BUIL DSTATE PVT. LTD. VS. ITO IN ITA NO. 431/JP/2016 ORDER DATED 28/03/2018 HA S HELD AS UNDER 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE LEGAL AUTHORITIES RELIED UPON BY BOTH THE PARTIES. ON PERUSAL OF THE REASONS RECORDED BEFORE ISSUANCE OF NOTICE U NDER SECTION 148, IT IS STATED THEREIN THAT ON THE BASIS OF INFORMATION BROUGHT ON RECORD, THE ASSESSEE COMPANY HAS TAKEN ACCOMMODATION ENTRIES OF RS 35 LA CS IN THE NATURE OF BOGUS INVESTMENTS/SHARE APPLICATION FROM SEVEN COMPANIES WHOSE COMPLETE DETAILS IN TERMS OF NAME, ADDRESS, DATE OF PAYMENT, AMOUNT OF INVESTMENT, BANK ACCOUNT AND THE BRANCH THROUGH WHICH THE PAYMENT HAS BEEN M ADE WERE STATED THEREIN THE REASONS. IT WAS FURTHER STATED IN THE REASONS T HAT THESE COMPANIES ARE INDULGED IN PROVIDING ACCOMMODATION ENTRIES IN LIEU OF CASH OBTAINED FROM THE BENEFICIARIES AND NOT DOING ANY GENUINE BUSINESS AC TIVITY AS DIVULGED DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS IN CASE OF PRAVEEN JAIN GROUP, ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 36 MUMBAI. IT WAS FURTHER STATED IN THE REASONS SO REC ORDED THAT THE ASSESSEE COMPANY IS A BENEFICIARY WHO HAS TAKEN THE ACCOMMOD ATION ENTRIES IN THE NATURE OF BOGUS INVESTMENT/SHARE APPLICATION AND TH E INVESTOR COMPANIES ARE NOT CARRYING ON ANY GENUINE BUSINESS ACTIVITIES AND WAS PROVIDING ACCOMMODATION ENTRIES IN LIEU OF CASH OBTAINED FROM THE BENEFICIARIES. IN VIEW OF THE SAME, IT WAS HELD BY THE AO THAT HE HAS REASONS TO BELIEVE THAT INCOME TO THE EXTENT OF RS 35 LACS HAS ESCAPED ASSESSMENT WIT HIN THE MEANING OF SECTION 147 OF THE ACT. IN OUR CONSIDERED OPINION, IN THE I NSTANT CASE WHERE THE RETURN FILED BY THE ASSESSEE WAS NOT SUBJECTED TO SCRUTINY ASSESSMENT AND THE ENTRIES ARE AVAILABLE IN THE CASE OF THE ASSESSEE FROM THE COMPANIES WHICH WERE NAMED BY SHRI PRAVEEN JAIN TO PROVIDING ACCOMMODATION ENT RIES AND THE AMOUNTS RECORDED IN THE ASSESSEE'S FINANCIAL STATEMENTS ARE ALSO THE SAME AS DISCLOSED BY SHRI PRAVEEN JAIN, THE BELIEF FORMED BY THE AO AFTE R DUE EXAMINATION OF THE MATERIAL ON RECORD THAT THE INCOME OF THE ASSESSEE CHARGEABLE TO TAX DURING THE RELEVANT ASSESSMENT YEAR HAS ESCAPED ASSESSMENT CAN NOT BE SAID TO BE ARBITRARY OR IRRATIONAL AND IT CANNOT BE SAID THAT THERE EXIS TS NO RATIONAL AND INTELLIGIBLE NEXUS BETWEEN THE REASONS AND THE BELIEF. IT IS TRU E THAT THE REASONS RECORDED OR THE MATERIAL AVAILABLE ON RECORD MUST HAVE NEXUS TO THE SUBJECTIVE OPINION FORMED BY THE AO REGARDING THE ESCAPEMENT OF THE IN COME BUT THEN, WHILE RECORDING THE REASONS FOR BELIEF FORMED, THE AO IS NOT REQUIRED TO FINALLY ASCERTAIN THE FACTUM OF ESCAPEMENT OF THE TAX AND I T IS SUFFICIENT THAT THE AO HAD CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT. IT IS ALSO WELL SETTLED THE SUFFICIENCY AND ADEQUACY OF THE REASONS WHICH HAVE LED TO FORMATION OF A BELIEF BY THE ASSE SSING OFFICER THAT THE INCOME HAS ESCAPED THE ASSESSMENT CANNOT BE EXAMINED FOR T HE PURPOSES OF DETERMINING THE ASSUMPTION OF JURISDICTION BY THE A O U/S 147 OF THE ACT. THE DECISION OF THE HON'BLE DELHI HIGH COURT IN CASE OF SINGATURE HOTELS (P) LTD (SUPRA) IS DISTINGUISHABLE ON FACTS AS IN THAT CASE , THE COURT OBSERVED THAT THE INFORMATION AND THE REASONS ARE EXTREMELY SCANTY AN D VAGUE AND THERE IS NO REFERENCE TO ANY DOCUMENT OR STATEMENT EXCEPT CERTA IN ANNEXURE WHICH CANNOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FA CIE SHOWS OR ESTABLISHES ESCAPEMENT OF INCOME. SIMILARLY, OTHER DECISIONS QU OTED BY THE ID AR WHICH ARE RENDERED BY THE COORDINATE BENCHES IN CASE OF M/S T RN ENERGY PVT LTD AND M/S SUPERLINE CONSTRUCTION P LTD WERE RENDERED IN PECUL IAR FACTS AND CIRCUMSTANCES IN THOSE CASES AND ARE THUS DISTINGUISHABLE ON FACT S. THE DECISION OF HON'BLE DELHI HIGH COURT IN CASE OF RAJAT EXPORTS INDIA (SU PRA) AMONG OTHERS RELIED UPON BY THE ID DR SUPPORTS THE CASE OF THE REVENUE. IN V IEW OF THE SAME, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO ILLEGALITY IN ACTION OF THE AO IN ASSUMING ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 37 JURISDICTION UNDER SECTION 147 IN THE INSTANT CASE. IN THE RESULT, GROUND NO. 1 OF THE ASSESSEE'S APPEAL IS HEREBY DISMISSED. 10. NOW, COMING TO THE MERITS OF ADDITION OF RS 35 LACS MADE BY THE AO UNDER SECTION 68 OF THE ACT. ON CAREFUL EXAMINATION OF MA TERIAL AVAILABLE ON RECORD, WE FIND THAT IT IS A CASE WHERE THE AO HAS RELIED BLIN DLY ON INFORMATION SUPPLIED BY THE INVESTIGATION WING MUMBAI WITHOUT CARRYING OUT ANY FURTHER EXAMINATION OF DOCUMENTS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND INDEPENDENT INVESTIGATION OF THESE INVESTOR COMPANI ES. AS WE HAVE NOTED ABOVE, THE INFORMATION SO RECEIVED FROM THE INVESTI GATION WING, MUMBAI AND AFTER DUE EXAMINATION THEREOF, THE AO HAS FORMED A PRIMA FACIE VIEW AND A REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSES SMENT AND HAS THUS ASSUMED JURISDICTION U/S 147 OF THE ACT. AT THE SAM E TIME, SUCH A PRIMA FACIE VIEW HAS TO BE FINALIZED AND A FIRM VIEW HAS TO BE TAKEN ON BASIS OF EXAMINATION OF DOCUMENTS SO BROUGHT ON RECORD AND FURTHER INVES TIGATION TO BE CARRIED OUT BEFORE ANY TAX LIABILITY IS FASTENED ON THE ASSESSE E. IN THE INSTANT CASE, WE FIND THAT THE ASSESSEE COMPANY HAS SUBMITTED DETAIL DOCU MENTATION IN REGARD TO THESE COMPANIES FROM WHOM A TOTAL AMOUNT OF RS.35 L AKHS WAS RECEIVED NAMELY (I) SHARE APPLICATION FORM (II) COPY OF BOARD RESOL UTION (III) COPY OF BANK STATEMENTS REFLECTING PAYMENT THROUGH CHEQUE (IV) A UDITED STATEMENT OF ACCOUNTS AND ACKNOWLEDGEMENT OF ITR (V) COPY OF CER TIFICATE OF INCORPORATION AND CERTIFICATE OF COMMENCEMENT OF BUSINESS (VI) CO PY OF PAN CARD. WHERE THE ASSESSEE FURNISHES THE DOCUMENTATION AND NECESSARY EXPLANATION, THE AO SHOULD EXAMINE WHETHER THE DOCUMENTS SO SUBMITTED AND EXPL ANATION SO OFFERED ESTABLISHES THE THREE INGREDIENTS I.E. IDENTITY OF THE INVESTOR COMPANY, CREDITWORTHINESS OF INVESTOR COMPANY AND GENUINENES S OF THE TRANSACTION. WHETHER EXPLANATION OF THE ASSESSEE IS RELIABLE OR ACCEPTABLE? IF YES, NO FURTHER ACTION IS REQUIRED AND THE SUM SO CREDITED MAY NOT BE CHARGED TO INCOME TAX. IF THE EXPLANATION SO OFFERED BY THE ASSESSEE IS NOT A CCEPTABLE OR RELIABLE, THE AO SHOULD GIVE A DETAILED REASONING IN THE ASSESSMENT ORDER FOR NOT ACCEPTING THE SAME. THE ORDER PASSED BY THE AO SHOULD BE SPEAKING ONE BRINGING ON RECORD ALL THE FACTS, EXPLANATION FURNISHED BY THE ASSESSEE IN RESPECT OF NATURE AND SOURCE OF THE CREDIT IN ITS BOOKS OF ACCOUNTS AND REASONS FOR NOT ACCEPTING THE EXPLANATION OF THE ASSESSEE. IN THE INSTANT CASE, W E FIND THAT THE AO HAS NOT TAKEN ANY EFFORTS TO EXAMINE THESE DOCUMENTS SO SUB MITTED BY THE ASSESSEE COMPANY DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAS SIMPLY GONE BY HIS PRIMA FACIE VIEW FORMED AT THE TIME OF ASSUMPTI ON OF JURISDICTION U/S 147 AND SUCH A PRIMA FACIE VIEW WITHOUT FURTHER EXAMINATION /INVESTIGATION CANNOT BE A BASIS FOR FORMING A FINAL VIEW OF MAKING THE ADDITI ON IN THE HANDS OF THE ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 38 ASSESSEE COMPANY. IT IS A CASE WHERE THE AO WAS IN RECEIPT OF MATERIAL INFORMATION FROM THE INVESTIGATION WING, MUMBAI THA T THE ASSESSEE COMPANY HAS RECEIVED ACCOMMODATION ENTRIES IN FORM OF SHARE APPLICATION/INVESTMENT FROM SEVEN COMPANIES WHO ARE NOT DOING GENUINE BUSI NESS ACTIVITIES AS DIVULGED DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS IN CASE OF PRAVEEN JAIN GROUP. IN THESE SITUATIONS, THE COURTS HAVE HELD THAT THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS AND THEN COME FORWARD TO MER ELY REJECT THE EXPLANATION SO MADE, WITHOUT CARRYING OUT ANY VERIFICATION OR E NQUIRY INTO THE MATERIAL PLACED BEFORE HIM BY THE ASSESSEE. IF THE ASSESSING OFFICER HARBOURS ANY DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTION HE IS EMPOWER ED, NAY DUTY-BOUND, TO CARRY OUT THOROUGH INVESTIGATIONS. BUT IF THE ASSESSING O FFICER FAILS TO UNEARTH ANY WRONG OR ILLEGAL DEALINGS, HE CANNOT OBDURATELY ADH ERE TO HIS SUSPICIONS AND TREAT THE SUBSCRIBED CAPITAL AS THE UNDISCLOSED INC OME OF THE COMPANY. WE THEREFORE AGREE WITH THE CONTENTIONS OF THE ID AR T HAT IN ABSENCE OF ANY FALSITY WHICH HAVE BEEN FOUND IN THE DOCUMENTS SO SUBMITTED BY THE ASSESSEE COMPANY TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINE NESS OF THE SHARE TRANSACTION, THESE DOCUMENTS CANNOT BE SUMMARILY REJECTED AS HAS BEEN DONE BY THE AO IN THE INSTANT CASE. FURTHER, WE FIND THAT THERE IS NO ACTION TAKEN BY THE AO IN TERMS OF CALLING INFORMATION FROM THESE COMPANIES U NDER SECTION 133(6) AND/OR ISSUING SUMMONS TO DIRECTORS OF THESE COMPANIES UND ER SECTION 131 OF THE ACT. FURTHER, WHERE THE AO RELIES UPON THE STATEMENT OF THIRD PARTIES (PRAVEEN JAIN AND OTHERS) RECORDED U/S 132(4), WITHOUT GETTING IN TO CONTROVERSY WHETHER THE SAID STATEMENT WAS RETRACTED SUBSEQUENTLY, THE FACT REMAINS THAT THE ASSESSEE DESERVES AN OPPORTUNITY TO CROSS EXAMINE SUCH PERSO NS AS HELD BY THE HON'BLE SUPREME COURT IN CASE OF ANDAMAN TIMBER INDUSTRIES (SUPRA). DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COMPANY HAS MADE SPECIFIC REQUEST TO THE AO TO ALLOW CROSS EXAMINATION OF THESE PERSONS WHICH HAS HOWEVER NOT BEING PROVIDED TO THE ASSESSEE COMPANY. IN LIGHT OF ABOVE DISCUSSIONS, WE DON'T FIND ANY BASIS FOR MAKING ADDITION UNDER SECTION 68 OF THE ACT. IN THE RESULT, GROUND NO.2 TAKEN BY THE ASSESSEE COMPANY IS ALLOWE D. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DISMISS THE APPEAL OF THE REVENUE. ITA 178/JP/2015 & C.O. 18/JP/2015_ ITO VS M/S LAND MARK DEALERS (P) LTD. 39 9. SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENUE ON MERIT, THEREFORE, THE C.O. FILED BY THE ASSESSEE BECOMES A CADEMIC AND THE SAME IS HEREBY DISMISSED. 10. IN THE RESULT, BOTH, APPEAL OF THE REVENUE AND THE C.O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/06/2018. SD/- SD/- FOT; IKY JKO HKKXPAN (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08 TH JUNE, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD-2(2), JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S LAND MARK DEALERS (P) LTD., JAIP UR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 178/JP/2015 & C.O. 18/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR