ITO, New Delhi V. M/s Neelkhanth, New Delhi

ITA 1932/DEL/2009

• Counselvise Citation: 193220114 RSA 2009
• Duration Of Justice: 5 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 26-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 08-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MODY
• Assessee Lawyers: P DAM KANUNJNA
• Keywords: Unexplained cash credit; Bogus Share capital; Unexplained expenditure; Gift; Depreciation; Opportunity of being heard; Source of fund; Accommodation entries
• Section: 133(6); 131; 68

Judgement Text

1 ITA NO. 1932/DEL/09 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBE R AND SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A NO. 1932 /DEL/2009 (ASSESSMENT YEAR:- 2005-06) ITO WARD 13(2) NEW DELHI (APPELLANT) VS NEELKHANTH FINBUILD PVT. LTD. E 281, GREATER KAILASH, NEW DELHI AAACN3882C (RESPONDENT) APPELLANT BY SHRI O.P. MODY, ADV. RESPONDENT BY SH. P. DAM KANUNJNA , SR. DR DATE OF HEARING: 26/03/2015 ORDER PRONOUNCED ON: ORDER PER H.S. SIDHU, JM REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IM PUGNED ORDER DATED 27/2/2009 FOR THE ASSESSMENT YEAR 2005-06 ON THE FO LLOWING GROUNDS:- 1. THE LD. CIT(A) ERRED IN LAW IN DELETING THE ADDITIO N OF RS. 20,00,000/- MADE U/S 68 WITH RESPECT TO THE MONEY CLAIMED TO HA VE BEEN RECEIVED AS SHARE APPLICATION MONEY WITHOUT APPRECIATING THE FA CTS AND THE 2 ITA NO. 1932/DEL/09 CIRCUMSTANCES OF THE CASE WHICH PROVED THAT THE TRA NSACTIONS WERE NOTHING BUT ACCOMMODATION ENTRIES, IN THE RIGHT PERSPECTIVE . 2. THE LD. CIT(A) FURTHER ERRED IN LAW IN DELETING THE ADDITION OF RS.22,450/- MADE AS UNEXPLAINED EXPENDITURE WITH RESPECT TO COM MISSION FOR ARRANGING THE SHARE APPLICATION ACCOMMODATION ENTRI ES, WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CAS E IN THE RIGHT PERSPECTIVE. 3. THE LD. CIT (A) ALSO ERRED IN LAW IN DELETING THE A DDITION OF RS.5,00,000/- MADE U/S 68 OF THE ACT WITHOUT APPRECIATING THE CIR CUMSTANCES AND THE FACT THAT NEITHER THE ASSESSEE NOR THE SHARE APPLICANT F URNISHED ANY EVIDENCE IN SUPPORT OF CREDIT WORTHINESS OF THE SHARE APPLICANT AND THE GENUINENESS OF THE TRANSACTION. 4. THE APPELLANT CRAVES TO BE ALLOWED TO ADD, DELETE O R AMEND ANY OTHER GROUNDS OF APPEAL. 2. THE ASSESSEE FILED ITS RETURN OF INCOME AND DECL ARING AN INCOME OF RS.62.400 ON 31/10/2005 WHICH WAS PROCESSED BY THE ASSESSING OFFICER U/S 143(1) OF THE INCOME TAX ACT 1961 (HEREINAFTER CALLED THE ACT) ON 31/3/2007. THE ASSESSING OFFICER SELECT THE CASE OF ASSESSEE FOR SCRUTINY AN D ISSUE NOTICE U/S 143 (2) OF THE ACT ON 4/10/2006, IN RESPONSE TO THE SAME AUTHORITI ES REPRESENT ASSESSEE APPEARED AND FILED REQUISITE DETAILS. THE ASSESSEE COMPANY IS NON-BANKING FINANCE COMPANY ENGAGE IN THE ACTIVITIES OF FINANCE AND INVESTMENT. DURING THE YEAR IT HAS EARNED INCOME BY WAY OF INTEREST, RENT AND CAPITAL GAINS. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE COMPANY INCREASED ITS SHARE CAPITAL BY RS. 2,97,50,000/-. FROM THE PERUSAL OF DETAILS FURNISHED BY THE ASSESS EE COMPANY THE ASSESSING OFFICER NOTICED THAT THE SAID SHARE APPLICATION WAS ALLEGED LY RECEIVED FROM FOLLOWING THREE PARTIES. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE COMPANY INCREASED ITS SHARE CAPITAL BY RS. 2,97,50,000/-. FROM THE PERUS AL OF DETAILS FURNISHED BY THE ASSESSEE COMPANY, IT WAS NOTICED THAT THE SAID SHARE, APPLICATION WAS ALLEGEDLY RECEIVED FROM, AMONG OTHERS, THE FOLLOWIN G PERSONS/PARTIES: SL NO. NAME AMOUNT RECEIVED (RS.) CHEQUE NO AND DATE DRAWN ON BANK 1 M/S ONYZ EXIM & SALES LTD, 2842, 5,00,000 737511 DATED ABN AMRO BANK, 3 ITA NO. 1932/DEL/09 CLASSIC APARTMENTS, STREET MOTI MAHAL, DARYA GANJ DELHI 28/10/2004 CONNAUGHT PLACE, NEW DELHI 2 M/S SHRINIWAS LEASING & FINANCE LTD., 63, SHANKAR MARKET, CANNOUGHT PLACE, NEW DELHI 10,00000 431170 DATED 6/10/2004 AND 431198 DATED 8/10/2004 (FOR RS. 5,00,000/- EACH) STATE BANK OF BIKANER & JAIPUR, NEW ROHTAK ROAD, NEW DELHI 3 M/S RAPID IMPEX PVT LTD., H. 16/332, BAPA NAGAR, KAROL BAGH, DELHI 5,00,000 783670 DATED 28/10/2004 ABN AMRO BANK CANNAUGHT PLACE, NEW DELHI 3. AS PER INFORMATION RECEIVED FROM THE INVESTIGATI NG WING OF THE DEPARTMENT FOUND THAT THESE 3 PARTIES HAVE NO CREDITWORTHINESS NOR DO THEY HAVE ANY WORTHWHILE SOURCES OF INCOME. THEY ARE CORPORATE ENTITIES IN THE NAME ONLY AS THEY ARE NOT ENGAGED IN ANY ACTUAL BUSINESS ACTIVITIES. IT HAS BEEN FOUND BY THE WING THAT THEY ARE ONLY ENGAGED IN THE ACTIVITY OF RAISING ACCOMMO DATION ENTRIES TO THE OTHERS. THE BANK ACCOUNTS EXISTING IN THE NAME OF THESE PERSONS ARE BEING USED AS CONDUITS FOR THE PURPOSE OF RAISING ACCOMMODATION ENTRIES. A PER SON/PARTY WHO PROVIDES SUCH ENTRY IS KNOWN AS ENTRY OPERATOR AND THE PRESENT PA RTY TAKING SUCH ENTRY IS CALLED BENEFICIARY. ACCORDING TO THE ASSESSING OFFICER A PERSON INTERESTED IN INTRODUCING ITS UNDISCLOSED MONEY INTO HIS/HER/ITS BUSINESS APP ROACHES THE ENTRY OPERATOR AND HANDS OVER THE CASH ALONG WITH COMMISSION AND TAKE CHEQUES/DD/PO. THE CASH IS DEPOSITED BY THE ENTRY OPERATOR IN A BANK ACCOUNT E ITHER IN HIS OWN NAME OR IN THE NAME OF RELATIVES/FRIENDS OR OTHER PERSON HIRED HIM FOR THE PURPOSE OF OPENING BANK ACCOUNT. THE OTHER PERSON, IN WHOSE NAME THE ACCOU NT IS OPENED, ONLY SIGNS THE BLANK CHEQUE BOOK AND HANDS OVER THE SAME TO THE MA IN ENTRY OPERATOR. THE ENTRY OPERATOR, IN TURN, ISSUES CHEQUE/DD/POS IN THE NAM E OF BENEFICIARY EITHER FROM THE 4 ITA NO. 1932/DEL/09 ACCOUNT IN WHICH THE CASH IS DEPOSITED OR AFTER MUL TI LAYERING AND FURTHER OBSCURING THE TRIAL BY ROTATING ITS THROUGH OTHER ACCOUNT OR ACCOUNT WHICH ARE USED ONLY AS CONDUITS AND IN WHICH THE FUNDS ARE TRANSFERRED THR OUGH COLOURING INTO OR MORE STAGES. THUS, THE BENEFICIARIES UNACCOUNTED MONEY SAILS THROUGH SEVERAL ACCOUNTS BEFORE ROUND TRAPPING BACK TO IT, ONLY DISGUISE IN THE FORM OF SHARE APPLICATION MONEY UNSECURE RENT, GIFT ETC. INTERESTINGLY MOST O F THE CONCERNED/INDIVIDUAL HAVE OBTAIN PAN FROM THE DEPARTMENT AND ARE FILING RETUR N AS WELL. BUT WHAT IT SHOWN IN RETURN AS NOT ACCRUAL STATES OF AFFAIRS. THE ASSES SING OFFICER FURTHER OBSERVED THAT WHERE MONEY WAS ROUTED THROUGH THE ENTRY OPERATOR IN THE GARB OF CAPITAL APPLICATION MONEY. THESE SH ARES ARE ULTIMATELY BOUGHT BACK IN A YEAR OR TWO, BY SOME FAMILY MEMBER OF THE DIRECTO RS AT HUGE DISCOUNT, SOME TIME AT ONE TENTH OR ELEVEN EVEN LESS OF THE ISSUE PRICE . 4. THE ABOVE SAID THREE COMPANIES FROM WHOSE IN TH E SHARE APPLICATION MONEY AMOUNTING TO RS. 20 LAKHS HAS ALLEGED BEING RECEIVE D BELONGING TO S. H. MALLICK GROUP AND MAHESH GARG GROUP OF ENTRY OPERATOR. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE PRINCIPAL OFFICER/DIRECTORS OF THE SAID COMPANIES ALONG WITH THEIR BOOKS OF ACCOUNTS, COPIES OF ALL BANK ACCOUNT S ETC AND THE CASE WAS FIXED FOR BY 22/10/2007. THE AR OF THE ASSESSEE EXPRESSED HI S INABILITY TO PRODUCE THEM. THE AO ISSUED SUMMONS U/S 131 OF THE ACT TO THE PRI NCIPAL OFFICER/DIRECTORS OF THE SAID INVESTOR COMPANIES REQUIRING THEM TO APPEAR AL ONG WITH THEIR BOOKS OF ACCOUNTS, EVIDENCE IS SUPPORTED OF SOURCES OF INVES TMENT IN THE ASSESSEE COMPANY ETC AND MATTER WAS FIXED FOR HEARING FOR 13/10/2007 . SUMMON ADDRESS TO M/S SHRI NIWAS LEASING AND FINANCE LTD. WERE RECEIVED WITH P OSTAL REMARKS TO THE EFFECT THAT THE SHOP IS CLOSED AS SOON AS A LONG TIME BAC K. SINCE THE SAID PERSON HAD NOT BEEN PRODUCE BY THE AR NOR DO THEY APPEAR IN RESPON SE TO THE SUMMONS. THE ASSESSING OFFICER HANDED OVER THE COPIES OF STATEM ENTS OF FOLLOWING PERSONS TO LD. AR ON 13/10/2007. 5 ITA NO. 1932/DEL/09 A) STATEMENT DATED 10/09/200322/9/2003 AND 28/ 1/2003 OF SHRI MAHESH GARG S/O F R. S. GARG, RESIDENT OF G -8/94, SECTOR 15, ROHI NI, DELHI. B) STATEMENT DATED 9/9/2003 OF SHRI VINOD GARG, S/O R. S. GARG, R/O G-8 94, SECTOR 15, ROHINI, DELHI. C) STATEMENT DATED 10/10/2003 OF SHRI RAJIV KUMAR A GRAWAL S/O R. S. AGRAWAL, R/O 1444, GALI NO. 5, NAWAL PARK, ALIPUR DELHI. D) STATEMENT DATED 23/6/2004 TO S.H MALLICK SON OF N. H. MALLICK R/O 2842, CLASSIC APARTMENTS, DARYA GANJ, DELHI 5. THE ASSESSEE HAS ALSO FILED REPLY TO THE SHOW CA USE NOTICE ALONG WITH CONFIRMATIONS, COPIES OF ITRS AND COPIES OF BANK ST ATEMENT OF SAID SHARE APPLICANTS AND DISCHARGED ITS ONUS BY FILING THESE DOCUMENTARY EVIDENCE. AFTER EXAMINING THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE, THE A SSESSING OFFICER HAD HELD THAT THE SOURCE/AVAILABILITY OF FUNDS DO NOT STAND SUBS TANTIATED IN ANY WAY BY THE ASSESSEE. THE ASSESSEE HAS ALSO NOT ESTABLISH THAT WHY BY THE PAYMENT WAS NOT ROOTED THROUGH NORMAL BANKING CHANNELS. LASTLY, TH E ASSESSING OFFICER HAS HELD THAT AS PER THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE, ASSESSEE HAS NOT ESTABLISH ITS CASE TO PROVE CREDITWORTHINESS/ IDENT ITY ETC. AND THE ALLEGED TRANSACTION REMAIN SUBSTANTIATED. THEREFORE AN AMOUNT RS.20,0 0,000 HE ADDED AS UNEXPLAINED SHARE CAPITAL 68 OF THE ACT SECONDLY RS. 50,000/- AS COMMISSION PAID ON THE SAME AND RS. 5,00,000 U/S 68 OF I. T ACT ON ACCOUNT OF S HARE CAPITAL MONEY RECEIVED FROM SH. V. K. ANGAMI AND COMPLETE ASSESSMENT U/S 4 3(3) OF THE ACT ON 28/12/2007. 6. AGGRIEVED BY THE ASSESSMENT ORDER DATED 28/12/20 07 ASSESSEE FILED AN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE I MPUGNED ORDER DATED 27/2/2009 DELETED THE ADDITIONS INDISPUTE BY PARTLY ALLOWING THE APPEAL FILED BY THE ASSESSEE. 6 ITA NO. 1932/DEL/09 NOW THE REVENUE IS AGGRIEVED AGAINST THE IMPUGNED O RDER DATED 27/2/2009 FILED THE PRESENT APPEAL. 7. AT THE TIME OF HEARING LD. DR RELIED UPON THE OR DER PASSED UPON THE ASSESSING OFFICER AND CONTENTION RAISED BY THE REVE NUE IN THE GROUNDS OF APPEAL. HE REQUESTED THAT THE IMPUGNED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY MAY BE CANCELLED AND THE ORDER OF THE ASSESSING OFF ICER MAY BE UPHELD BY ALLOWING THE APPEAL FILED BY THE REVENUE. 8. LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORD ER PASSED BY THE FIRST APPELLATE AUTHORITY. HE HAS ALSO FILED A PAPER BOO K CONTAINING PAGE 174 PAGES IN WHICH HE HAS ATTACHED VARIOUS DOCUMENTARY EVIDENCE SUPPORTING THE CLAIM OF ASSESSEE AND HE REQUESTED THAT APPEAL FILED BY THE REVENUE MAY BE DISMISSED. 9. WE HAVE HEARD BOTH THE PARTIES PERUSED THE RECOR D AVAILABLE WITH US SPECIALLY ORDERS PASSED BY THE REVENUE AUTHORITY ALONG WITH T HE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE. WE ARE OF THE VIEW THAT THE ASSES SING OFFICER DURING THE COURSE THE ASSESSMENT PROCEEDINGS HAS MADE THE FOLLOWING OBSER VATION IN THE ASSESSMENT ORDER ON THE ISSUE IN DISPUTE. 'DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY INCREASED ITS SHARE CAPITAL BY RS. 2,97.50,000/-. FROM THE PERUSAL OF DETAILS FURNISH ED BY THE ASSESSEE COMPANY, IF WAS NOTICED THAT THE SAID SHARE APPLICATION WAS ALLEGEDLY RECEIVED FROM, AMON G OTHERS, THE FOLLOWING PERSONS/PARTIES: S.NO. NAME AMOUNT CHEQUE NO. DRAWN ON BANK RECEIVED AND DATE (RS.) 1 MIS ONYX EXIM & SALES LTD. 5,00,000 737511 DAT ED ABN AMRO 2842, CLASSIC APARTMENTS 28.10. 2004 BANK, STREET MOTI MAHAL, DARYA GANJ CO NNAUGHT DELHI PLACE, NEW DELHI 2 MIS SHRINIWAS LEASING & 10,00000 431170 DATED STATE BANK OF FINANCE LTD., 63, SHANKAR 06.10.200 4 AND BIKANER & JAIPUR, NEW ROHTAK MARKET, CONNAUGHT PLACE, 431198 DATE D ROAD, NEW DELHI. NEW DELHI. 08.10.2004 (FOR 3 MIS RAPID IMPEX PVT LTD., H RS. 5,00,000/- EACH) 7 ITA NO. 1932/DEL/09 BEFORE PROCEEDING FURTHER, IT IS WORTH MENTIONING T HAT THE AFOREMENTIONED PERSONS/ENTITIES HAVE BEEN SUBJECT OF CERTAIN INQUIRIES AND INVESTIGATION BY T HE INVESTIGATION WING WHEREIN IT HAS BEEN FOUND THA T THEY HAVE NO CREDITWORTHINESS NOR DO THEY HAVE ANY WORTHWHILE SOURCES OF INCOME. THEY ARE CORPORATE ENTITIES IN NAME ONLY AS THEY ARE NOT ENGAGED IN AN Y ACTUAL BUSINESS ACTIVITIES. IT HAS BEEN FOUND BY THE WING THAT THEY ARE ONLY ENGAGED IN THE ACTIVITY OF ARRANGING ACCOMMODATION ENTRIES TO THE OTHERS. THE BANK ACCOUNTS EXISTING IN THE NAMES OF THESE PERSON S ARE BEING USED AS CONDUITS FOR THE PURPOSE OF ARRANGING ACCOMMODATION ENTRIES. A PERSON/PARTY WH O PROVIDES SUCH ENTRY IS KNOWN A ENTRY OPERATOR AND THE PERSON/PARTY TAKING SUCH ENTRY IS CALLED BE NEFICIARY. AN ENTRY OPERATOR OPERATES A NUMBER OF ACCOUNTS IN THE SAME BANK/BRANCH OR IN DIFFERENT BRANCHES IN TH E NAMES OF COMPANIES, FIRMS, PROPRIETARY CONCERNS AND INDIVIDUALS. FOR THE OPERATION OF THESE BANK ACCOUNTS FILING INCOME TAX RETURNS ETC. PERSONS ARE HIRED. EXCEPT FOR TWO OR THREE PERSONS WHO ARE REQUIRED TO REGULARLY VISIT BANK AND TO DO OTHER SP ADE WORK LIKE COLLECTION OF CASH ETC., MOST OF THE OTHER PERSON INVOLVED ARE ON PART TIME BASIS. THE PART TI ME EMPLOYEES ARE CALLED AS AND WHEN REQUIRED TO SI GN DOCUMENTS, CHEQUE BOOKS ETC. A PERSON INTERESTED IN INTRODUCING ITS UNDISCLOSED MONEY INTO HIS/HER/ITS BUSINESS APPROACHES THE ENTR Y OPERATOR AND HANDS OVER THE CASH, ALONG WITH COMMIS SION AND TAKES CHEQUES/DD/PO. THE CASH IS DEPOSITED BY THE ENTRY OPERATOR IN A BANK ACCOUNT E ITHER IN HIS OWN NAME OR IN THE NAME OF RELATIVE/FRIENDS OR OTHER PERSON HIRED HIM FOR THE PURPOSES OF OPENING BANK ACCOUNT. THE OTHER PERSON, IN WHOSE NAME THE ACCOUNT IS OPENED, ONLY SIGNS THE BL ANK CHEQUE-BOOK AND HANDS OVER THE SAME TO THE MAIN ENTRY OPERATOR. THE ENTRY OPERATOR, IN TURN, ISSUES CHEQUES/DD/POS IN THE NAME OF THE BENEFICIAR Y EITHER FROM THE ACCOUNT IN WHICH THE CASH IS DEPOS ITED OR AFTER MULTI-LAYERING AND FURTHER OBSCURING THE TRAIL BY ROTATING IT THROUGH OTHER ACCOUNT OR ACCOU NTS, WHICH ARE USED ONLY AS CONDUITS AND IN WHICH T HE FUNDS ARE TRANSFERRED THROUGH CLEARING IN TWO OR MO RE STAGES. THUS, THE BENEFICIARY'S UNACCOUNTED MONEY SAILS THR OUGH SEVERAL ACCOUNTS BEFORE ROUND-TRIPPING BACK TO IT, ONLY DISGUISED IN THE FORM OF SHARE APPLICATION MON EY, UNSECURED LOAN, GIFT ETC. INTERESTINGLY, MOST OF THE CONCERNS/INDIVIDUAL HAVE OBTAINED PAN FROM THE DEPA RTMENT AND ARE FILING RETURNS AS WELL. BUT WHAT IS SHOWN IN THE RETURN ARE NOT ACTUAL STATE OF AFFAIRS . IT HAS BEEN FURTHER OBSERVED THAT WHERE MONEY WAS R OUTED THROUGH THE ENTRY OPERATOR IN THE GARB OF SHARE CAPITAL/SHARE APPLICATION MONEY THESE SHARES ARE ULTIMATELY BOUGHT BACK, IN A YEAR OR TWO, BY SO ME FAMILY MEMBER OF THE DIRECTORS AT HUGE DISCOUNT, SO METIME AT ONE TENTH OR EVEN LESS OF THE ISSUE PRICE . THE BANK STATEMENTS AND THE ACCOUNT OPENING FORMS O F THE ABOVE 'COMPANIES' WERE OBTAINED FROM THEIR RESPECTIVE BANKS. THE PARTICULARS OF THE BANK ACCOU NTS AND THE DIRECTORS (AUTHORIZED SIGNATORIES TO OPERATE THE ACCOUNTS) ARE AS UNDER: S.NO. NAME BANK & BRANCH ACCOUNT NO. AUTHORIZED SIGNATORIES 1 M/S ONYX EXIM AMN AMRO BANK 1020083 SH. S.H. MA LLICK & SALES LTD. CONNAUGHT PLACE, 2 M/S SHRINIWAS STATE BANK OF BIKANER 024657 SH . VINOD GARG & LEASING & FINANCE LTD. & JAIPUR, NEW ROHTAK SH. RAJEEV AGGARWAL NEW DELHI 3 M/S RAPID IMPEX ABN AMRO BANK, 1024592 SH. SHIV LAL & PVT. LTD. CONNAUGHT PLACE, SH. SATYENDRA KUMAR 8 ITA NO. 1932/DEL/09 NEW DELHI. SINGH THE ABOVE COMPANIES/PERSONS FROM WHOM THE SHARE A PPLICATION MONEY AMOUNTING TO RS.20,00,000/- HAS ALLEGEDLY BEEN RECEIVED BELONG TO THE S.H. MALL ICK GROUP AND MAHESH GARG GROUP OF ENTRY OPERATORS. THE COMPANIES/PERSONS MENTIONED AT (1) AND (3) AB OVE BELONG TO THE S. H. MALLICK GROUP AND THE COMPANY/PERSONS AT (2) ABOVE BELONG TO THE MAHESH GARG GROUP. THESE PERSONS ALONG WITH THEIR OTHER ASSOCIATES HAVE BEEN GIVEN SWORN STATEMENTS U/S 131 BEFORE THE ADDL. DIRECTOR OF INCOME TAX (INVESTIGATION),UNIT-1, NEW DELHI. IN THE SAID STA TEMENTS THEY HAVE ADMITTED THAT THE SAID COMPANIES AND OTHER SUCH CONCERNS OWNED/CONTROLLED BY THEM A RE NOT CARRYING ON ANY ACTUAL BUSINESS ACTIVITIES. THEY HAVE CATEGORICALLY ADMITTED THAT THEY ARE ENGA GED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES. THE DEPOSITS REFLECTED IN THE BANK ACCOUN TS EXISTING IN THE NAMES OF THESE COMPANIES ACTUAL LY BELONG TO THE PERSONS APPROACHING THEM FRO TAKING A CCOMMODATION ENTRIES. THESE BANK ACCOUNTS EXISTING IN THEIR NAMES HAVE BEEN USED ONLY AS CONDUITS FOR THE PURPOSE OF ARRANGING ACCOMMODATION ENTRIES FO R OTHERS IN THE BARB OF SHARE CAPITAL ETC. AS DESCRIB ED ABOVE. IN VIEW OF THESE FACTS, THE AR WAS ASKED ON 10/10/ 2007 TO ARRANGE TO PRODUCE THE PRINCIPAL OFFICERS/DIRECTORS OF THE SAID COMPANIES(HEREINAF TER REFERRED TO AS INVESTOR COMPANIES) ALONG WITH THEIR BOOKS OF ACCOUNTS, COPIES OF ALL THE BANK STA TEMENTS ETC. THE CASE WAS FIXED FOR 22.10.2007. THE AR APPEARED ON 22.10.2007 AND 05.12.2007 BUT WITHOUT A NYBODY ON BEHALF OF THE SAID 'INVESTOR COMPANIES '. THE AR, HOWEVER, EXPRESSED HIS INABILITY TO PRODUCE THEM. ON 05.12.2007, ON THE REQUEST OF THE AR, SUMMONS U/S 131 OF THE ACT WERE ISSUED TO THE PRINC IPAL OFFICERS DIRECTOR OF THE SAID 'INVESTOR COMPAN IES' ( AT THE FOLLOWING ADDRESSES MENTIONED IN THE 'CONF IRMATIONS' PROVIDED BY THE ASSESSEE), REQUIRING THE M TO APPEAR ALONG WITH THEIR BOOKS OF ACCOUNTS, EVIDENCE IN SUPPORT OF THE SOURCES OF INVESTMENT IN THE ASSESSEE COMPANY ETC. SL. NO. NAME ADDRESS 1 M/S ONYX EXIM & SALES LTD. 2824, CLASSIC APARTMENT, STREET MOTI MAHAL, DARYA GANJ, DELHI 2 M/S SHRINIWAS LEASING & FINANCE LTD. 63, SHANKAR MARKET, CANNAUGHT PLACE, NEW DELHI 3 M/S RAPID IMPEX PVT LTD. H - 16/332, BAPA NAGAR, KAROL BAGH, DELHI THE MATTER WAS FIXED FOR 13/11/2007. THE SUMMONS A DDRESSED TO M.S SHRINIWAS LEASING & FINANCE LTD. WERE RECEIVED BACK UNSERVED WITH POSTA L REMARKS TO THE EFFECT THAT THE SHIP IS CLOSED SINCE A LONG TIME BACK:]. THE SUMMONS SEN T TO THE OTHER TWO PARTIES WENT UNCOMPLIED WITH UN. SINCE THE SAID PERSONS HAD NOT BEEN PRODU CED BY THE AR NOR HAD THEY APPEARED IN RESPONSE TO THE SUMMONS, THE AR ON 13/11/2007 WAS P ROVIDED COPIES OF THE AFORESAID STATEMENTS OF THE FOLLOWING PERSONS. A) STATEMENT DATED 10/09/200322/9/2003 AND 28/ 1/2003 OF SHRI MAHESH GARG S/O F R. S. GARG, RESIDENT OF G -8/94, SECTOR 15, ROHINI, DELHI. B) STATEMENT DATED 9/9/2003 OF SHRI VINOD GARG, S/O R. S. GARG, R/O G-8 94, SECTOR 15, ROHINI, DELHI. C) STATEMENT DATED 10/10/2003 OF SHRI RAJIV KUMAR A GRAWAL S/O R. S. AGRAWAL, R/O 1444, GALI NO. 5, NAWAL PARK, ALIPUR DELHI. 9 ITA NO. 1932/DEL/09 D) STATEMENT DATED 23/6/2004 TO S.H MALLICK SON OF N. H. MALLICK R/O 2842, CLASSIC APARTMENTS, DARYA GANJ, DELHI THE AR WAS REQUIRED TO EXPLAIN AS TO WHY ADVERSE IN FERENCE MAY NOT BE DRAWN FROM THE ABOVE STATEMENTS AND THE FACT THAT THE PARTIES ARE EITHER NOT AVAILABLE OR WERE EVADING COMPLIANCE WITH THE SUMMONS SENT TO THEM REQUIRING THEM TO PRODUCE THEIR BOOKS OF ACCOUNTS AND OTHER EVIDENCE IN SUPPORT OF THE SOURCES OF INVESTMENT IN THE ASSE SSEE COMPANY. IN REPLY TO THE SHOW-CAUSE, THE AR FURNISHED HIS RE PLY VIDE WRITTEN SUBMISSION DATED 04.12.2007. SINCE THE ASSESSEE COMPANY HAD EXPRESSED ITS INABILITY TO PRO DUCE THE SAID PARTIES, FRESH SUMMONS/NOTICE WERE SE NT TO THE PRINCIPAL OFFICERS/DIRECTORS OF THE SAID INV ESTOR COMPANIES '. FIXING THE CASE FOR 11.12.2007. THE SUMMONS AGAIN MET THE SAME FACT, WITH THE ONE ADDRE SSED TO M/S SHRINIWAS LEASING & FINANCE LTD HAVING BEEN RECEIVED BACK UNSERVED AND NOBODY ATTENDING IN RESPONSE THE ONES ADDRESSED TO THE OTHER TWO PARTIES. HOWEVER, ON J 4.12.2007 LETTERS FROM THE M /S RAPID IMPEX PVT. LTD. AND M/SS- ONYX EXIM & SALE S LTD. SAID 'INVESTOR COMPANIES' WERE RECEIVED CONFIR MING THE INVESTMENT IN THE SHARE CAPITAL OF THE COMPANY. INTERESTINGLY. THOUGH THE SUMMONS ADDRESSE D TO M SHRI' NIWAS LEASING & FINANCE LTD. HAD BEEN RECEIVED BACK UNSERVED. A 'CONFIRMATION' WAS RECEIV ED FROM THIS ART AS WELL. COMING BACK TO THE REPLY OF THE AR ON THE SHOW-CAUS E. THE SUBSTANCE OF THE REPLY IS AS UNDER: A) THE ASSESSEE COMPANY HAS FILED CONFIRMATIONS. CO PIES OF THE ITRS AND COPIES OF THE BANK STATEMENTS OF THE SAID SHARE APPLICANTS. THE SAID S HARE APPLICANTS ARE COMPANIES INCORPORATED UNDER TH E COMPANIES ACT. THE ASSESSEE COMPANY HAS DISCHARGED ITS ONUS BY FILING ABOVE DOCUMENT EVIDENCING THEIR IDENTITY. A) THE STATEMENTS GIVEN BY THE ABOVE PERSONS ARE VA GUE AND GENERAL IN NATURE AND THESE PERSONS HAVE NOT SPECIFICALLY MENTIONED T HE NAME OF THE ASSESSEE COMPANY. THE ASSESSEE'S CONTENTIONS IN SUPPORT 0F THE GENUIN ENESS OF THE TRANSACTIONS AND THE DOCUMENTS PURPORTING TO BE CONFIRMATION ETC OF THE ABOVE SHA RE APPLICANTS HAVE BEEN CONSIDERED. BUT HAVE NOT BEEN FOUND TO BE SUFFICIENT IN VIEW OF THE ABOVE DOCUMENTS FILED B Y IT IN SUPPORT OF THE IDENTITIES OF THE SHARE APPLICANT S. THIS RATHER SIMPLISTIC CONTENTION OF THE ASSESS EE HAS NO LEGAL BASIS. THE HONBLE HIGH COURT OF DELHI IN TH E CASE CIT V. M/S HIMALAYA INTERNATIONAL LTD. (REND ERED ON 30/7/2007 IN ITA 1509 OF 2006) HAS CLEARLY HELD THAT THE ONUS IS ON THE ASSESSEE TO ESTABLISH THE IDENTITY & CREDITWORTHINESS OF THE SUBSCRIBERS OF S HARES AS WELL AS THE GENUINENESS OF THE TRANSACTION . 10 ITA NO. 1932/DEL/09 BEFORE EVALUATING THE CREDIBILITY OF THE PURPORTED EVIDENCE SOUGHT TO BE RELIED ON BY THE ASSESSEE AGA INST THE OVERWHELMING CIRCUMSTANTIAL EVIDENCE (AS DETAIL ED BELOW)EXPOSING THE REAL NATURE OF THE TRANSACTIO NS, THE IMPORT AND INGREDIENTS OF SECTION 68 MAY BE BRI EFLY DISCUSSED. IT HAS BEEN JUDICIALLY ESTABLISHED THAT THE PRIMARY ONUS IS ON THE ASSESSSEE TO PROVE THE I DENTITY & CREDITWORTHINESS OF THE PARTY AND THE GENUINENESS OF TRANSACTIONS IN RESPECT OF CASH CRED ITS IN ITS BOOKS OF ACCOUNT. THE IDENTITY AND CREDITWORTHINESS , IN THE CONTEXT OF THE PROVISIONS OF SECTION 68, CANNOT BE SEEN AS TWO SEPARATE ELEM ENTS BUT AS TWO SIDES OF THE SAME COIN. THE PAN OR OTHE R ASSESSMENT PARTICULARS ARE, AT BEST, ONLY PERIPHE RAL DOCUMENTS AS WHILE ALLOTTING PAN OR PROCESSING THE RETURNS, THE ACTUAL AFFAIRS ARE SELDOM VERIFIED. T HE CREDITWORTHINESS ESSENTIALLY MEANS SOME FINANCIAL S TANDING IN ONES OWN RIGHT BACKED BY ONES INHERENT CAPACITY TO EARN INCOME OR THE CAPACITY OF SOME PRO FIT MAKING APPARATUS AVAILABLE TO ONE. THE GENUINENESS OF THE TRANSACTION MEANS THAT IT WAS AC TUATED BY PRUDENT COMMERCIAL CONSIDERATIONS ON BOTH SIDES AND THERE WAS NOTHING IN THE CIRCUMSTANCES BE FORE DURING AND AFTER THE TRANSACTION THAT STRONGLY SUGGEST THAT IT WAS JUST A MAKE BELIEVE AFFAIR OR W AS HEAVILY LOADED IN THE FAVOUR OF ONE OF THE PARTI ES. IT IS NOW PROPOSED TO CONSIDER THE PURPORTED EVIDEN CE SOUGHT TO BE RELIED UPON BY THE ASSESSEE IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. (1) AS DISCUSSED ABOVE, SIMPLY FURNISHING THE PAN O R ASSESSMENT PARTICULARS IS NOT ENOUGH. THE SO - CA LLED EVIDENCE IN THE FORM OF RETURN OF INCOME ETC. DOES NOT FACILITATE CROSS VERIFICATION. SUMMONS SENT TO THESE PERSONS HAVE NOT BEEN COMPLIED WITH. INSTEAD, IETRT ERS HAVE BEEN RECEIVED FROM THEM BY POST ON 14.12.200 PURPORTING TO BE CONFIRMATIONS' OF INVEST MENTS. THESE SO-CALLED CONFIRMATIONS ARE JUST SELF- SERVING DOCUMENTS. THE ACKNOWLEDGEMENT OF RETURN ET C., BY THEMSELVES ARE NOT SUFFICIENT TO PROVE THE TRUE IDENTITY OF A PERSON OR TO DO DISCLOSE A TRUE ADDRESS. THIS IS NOT A CASE WHERE SOME LEGAL PROCE EDINGS ARE SHOWN TO HAVE BEEN MADE IN THE HANDS OF THE SAI D PERSONA AT THESE ADDRESSES AND THEY ARE SHOWN TO HAVE ATTENDED THE PROCEEDINGS. THEREFORE, THE ALLE GED DOCUMENTS FILED BY THE ASSESSEE ARE NOT SUFFICI ENT FOR ESTABLISHING THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS. THE IDENTITY SHOULD BE SEEN IN PERSPECTIVE THAT THE PERSON HAS GOT TO HAVE SOME ST ANDING IN A PARTICULAR LINE OF ACTIVITY. IDENTITY IS DEFINED IN THE NEW SHORTER OXFORD DICTIONARY AS TH E CONDITION OR FACT OF A PERSON OR THING BEING THAT SPECIFIED UNIQUE PERSON OR THING THE PERSON HAS TO HAVE SOME SIGN OF IDENTIFICATION OTHER THAN MERELY ON PAPER. THESE SIGNS COULD BE THE INFRASTRUCTURE OF BUSINESS, PLACE OF WORK STAFF MEMBERS, BOOKS OF ACCOUNTS, SUBSTANTIVE EVIDENCE OF THE BUSINESS CARR IED BY THE PERSONS IN THE FORM OF TOOLS AND APPARAT US OF BUSINESS, INPUTS OF THE BUSINESS, PROCESS INVOLV ED ETC. OR ANYTHING WHICH CAN PROVE THAT SOME ACTUA L ACTIVITY IS GOING ON. INSPECTOR WAS DEPUTED TO MAK E LOCK INQUIRIES AT THE GIVEN ADDRESSES. AS PER TH E REPORT OF THE INSPECTOR, NO ENTITIES BY THE SAID NA MES WERE FOUND TO BE EXISTING AT THE GIVEN ADDRESSE S. CLEARLY, THE ADDRESSES ARE BEING USED ONLY AS A POS T-BOX. HAVING PAN OR ASSESSMENT PARTICULAR IS MERE LY A RESPONSE TO THE APPLICATIONS AND RETURNS FILED. TH ESE TYPES OF IDENTITY ARE MERELY ON PAPER. THE AUT HORITY ALLOTTING PAN OR PROCESSING THE RETURN OF INCOME SE LDOM VERIFY THE ACTUAL IDENTITY OF THE PERSON. THE SE TOOLS ARE BEING EMPLOYED INTENTIONALLY FOR THE PURP OSE OF PROVING EXISTENCE, HOWEVER ACTUAL IDENTITY O F THE BUSINESS AND ITS GENUINENESS DO NOT AUTOMATICALLY G ET PROVED BY THESE PASSIVE DOCUMENTS WHEN IN FACT N O ACTUAL AND ACTIVE BUSINESS IS BEING CARRIED OUT. THE PERSONS HAVE NEITHER BEEN PRODUCED NOR HAS ANY SUBSTANTIVE EVIDENCE PRODUCED IN SUPPORT OF THEIR ACTUAL AFFAIRS, THEIR TRUE IDENTITY AND THEIR CREDI TWORTHINESS THAT COULD ONLY BE EXAMINED, GIVEN THE FACTS OF THE CASE, IF THEY ARE PRODUCED ALONG WITH NECESSARY EVIDENCE OF THE NATURE AND DETAILS OF THEIR ACTIVI TIES ON THE GROUND, THE SOURCES OF DEPOSITS AND THEIR BOOKS OF ACCOUNT. FOR ACCEPTING THE IDENTITY AND THE AVAILABILITY OF FUNDS IN THEIR HANDS IN THEIR OWN C APACITY, IT IS NECESSARY TO HAVE AT LEAST SOME IDEA , IF NOT 11 ITA NO. 1932/DEL/09 COMPLETE DETAILS, OF THE ACTUAL BUSINESS IN WHICH THEY ARE SAID TO BE ENGAGED. IT WOULD BE RELEVANT TO DISCUSS THE ELEMENTS OF THE SO-CALLED BALANCE SHEET S AS ON 31/3/2005 OF TWO OF THESE ENTITIES (COPIES OF WHICH HAVE BEEN ENCLOSED WITH THE SO-CALLED CONFIRM ATIONS) VIS-A-VIS THE NATURE AND VOLUME OF TRANSACTIONS REFLECTED IN THEIR BANK ACCOUNTS: (A) M/S RAPID 1MPEX PVT LTD. THE INCOME SIDE OF THE P & L ACCOUNT SHOWS AN INCOME OF RS. 1,95, 781/-) 'INTEREST '. THE EXPENDITURE SIDE SHOWS, INTER ALIA , 'PERSONNEL EXPENSES' OF RS. 96.793 -, 'ADMINISTR ATIVE EXPENSES' OF RS. 71`,244/-- AND 'DEPRECIATION' OF RS11,588. AS AGAINST THIS, THE TOTAL OF THE DEPOSIT SIDEIN THE SAID BANK ACCOUNT ALONE IS TO THE TUNE OF RS. 9 1,41,820/-. THERE IS A UNIFORM PATTERN TO IRAN 'ACTIONS IN THAT INVARIABLY THE ISSUE OF CHEQUES (MOSTLY IN EXACT R OUND FIGURES OF RS. 1 LAC, 1. 5 LAC, 2 LAC, 2.5 LAC, 3 L AC, 5 LAC ETC.) IS IMMEDIATELY PRECEDED BY (WITHIN A DAY OR TWO) THE DEPOSITS OF EQUIVALENT AMOUNTS IN THE ACCOUNT T HROUGH CHEQUE TRANSFER ENTRIES. THE BALANCE SHEET A S ON 31.03.2005 SHOWS 'INVESTMENTS' OF RS. 43,50,000/ - (AS AGAINST 39,00,000/- AS ON 31.03.2004) BUT THERE IS NO SCHEDULE SHOWING THE COMPOSITION OF INVESTMENTS. (B) M/S ONYX EXIM & SALES LTD.: THE TOTAL 'TURNOVER ' OF THE ENTITY DURING F. Y. 2004-05 IS RS. 1,21,49 9/- (COMPRISING OF 'INTEREST ON LOAN' OF RS. 18,219/- A ND 'OTHER INCOME' OF RS. 1,03,28 0 -. THE EXPENDITU RE SIDE SHOWS, INTER ALIA, 'PERSONNEL EXPENSES' OF RS. 5 8,362 -. 'ADMINISTRATIVE & OTHER EXPENSES' OF RS.50, 053/- AND 'DEPRECIATION OF RS. 25,711. AS AG AINST THIS, THE TOTAL OF THE DEPOSIT SIDE IN THE SA ID BANK ACCOUNT ALONE (DURING THE YEAR) IS TO THE TUNE OF R S. 69,73,409/-. THERE IS A UNIFORM PATTERN TO TRANS ACTIONS IN THAT INVARIABLY THE ISSUE OF CHEQUES (MOSTLY IN EXACT ROUND FIGURES OF RS. 1 LAC, 1.5 LAC, 2 LAC, 2 .5 LAC, 3 LAC, 5 LAC ETC.) IS IMMEDIATELY PRECEDED BY (WITHIN A DAY OR TWO) THE DEPOSITS OF EQUIVALENT AMOUNTS I N THE ACCOUNT THROUGH CHEQUE/TRANSFER ENTRIES. THE BALANCE SHEET AS ON 31.03.2005 SHOWS 'INVESTMEN TS' OF RS. 24,75,000/- (AS AGAINST 25,00,000/- AS O N 31.03.04 BUT THERE I NO SCHEDULE SHOWING THE COMPO SITION OF INVESTMENTS. IN FACT, THERE ARE SPECIFIC REASONS FOR NOT MAINTAI NING/PRODUCING BOOKS OF ACCOUNTS AND ANNEXURE SHOWI NG COMPOSITION OF INVESTMENTS IN SUCH CASES. FOR ONE, THE AMOUNTS GIVEN AS SHARE APPLICATION MONEY ARE L OST FOREVER (AS THEY ARE ON TIME ENTRIES). ANOTHER REA SON FOR NOT FILING THE SCHEDULE OF INVESTMENT IS TH AT WHILE THE AMOUNT SHOWN IN THE BALANCE SHEET MAY BE LESS, THE ACTUAL AMOUNTS MAY BE MORE. FOR EXAMPLE, IF ONE CRORE HAS BEEN ACTUALLY ROUTED THROUGH THE BANK ACCOUNTS THE AMOUNT SHOWN IN THE BALANCE SHEET MAY BE JUST TWENTY OR THIRTY LAKHS. (2) THE ASSESSEE COMPANY IS PRIVATE LIMITED COMPANY . IN THE CASE OF SUCH COMPANIES, THERE IS CLOSE AND PROXIMATE RELATIONSHIP BETWEEN THE PROMOTERS/DI RECTORS AND THE SHAREHOLDERS. THE CLOSELY-HELD COMPANIES ARE PERMITTED TO ACCEPT THE SUBSCRIPTIONS OF SHARE CAPITAL OR DEPOSITS ONLY FROM THE FRIENDS OR RELATIVES OF THE PROMOTERS/DIRECTOR S AND SUCH COMP ANIES ARE NOT ALLOWED TO ACCEPT SUBSCRIPTIONS OR DEPOSITS FROM THE GENERAL PUBLIC. THE SHARES ARE, THEREFORE, SUBSCRIBED BY A SMALL NUMBER OF PERSONS WHO ARE KNOWN TO THE PROMOTERS ARE RELATED TO THEM BY F AMILY MEMBERS. AS SUCH, THERE SHOULD HAVE BEEN NO DIFFICULTY ON THE PART OF THE ASSESSEE TO PRODUCE T HE SO-CALLED INVESTORS, HAD THE WHOLE APPARATUS NOT BEEN MERELY A CONDUIT TO PLOUGH BACK THE UNACCOUNTED MON EY OF THE ASSESSEE-COMPANY IN THE GARB OF SHARE APPLICATION MONEY. 12 ITA NO. 1932/DEL/09 INDEED, IN THE CASE OF SHARE CAPITAL RECEIVED BY A PRIVATE LIMITED COMPANY. THE TRANSACTIONS PARTAKE THE CHARACTER OF CASH CREDITS. THEREFORE, THE ASSESSEE' S BURDEN TO ESTABLISH THE GENUINENESS OF FUNDS FLO WN IN THE GUISE OF SHARE CAPITAL SUBSCRIPTION AND THE CRE DITWORTHINESS OF THE INVESTOR IS AT PAR WITH THE C ASH CREDITS. EVEN IF IT IS PRESUMED FOR THE SAKE OF AR GUMENT, THAT THE ASSESSEE COMPANY HAS NO CONTACT OR RELATIONSHIP WITH THEM, IF IS NECESSARY T0 EXAMINE AS TO HOW THE 'INVESTORS' CAME TO KNOW OF THE REQUIREMENTS OF FUNDS BY THE ASSESSEE-COMPANY IN TH E ABSENCE OF {( PUBLIC ISSUE OR ANY ADVERTISEMENT B Y THE ASSESSEE-COMPANY. ,FOR ACCEPTING THE IDENTITY A ND THE AVAILABILITY OF FUNDS IN THEIR HANDS IN THEI R OWN CAPACITY, IT IS NECESSARY TO HAVE AT IEAST SOME IDE A. IF NOT COMPLETE DETAILS, OF THE ACTUAL 'BUSINESS ' IN WHICH THEY ARE SAID TO BE ENGAGED. (3) MERE PAYMENT BY ACCOUNT- PAYEE CHEQUE IS NOT S ACROSANCT NOR CAN IT MAKE A NON-GENUINE TRANSACTION GENUINE. THE NATURE AND VOLUME OF TRANSACTIONS REFL ECTED IN THE BANK STATEMENT TRANSACTIONS HAS ALREAD Y BEEN DISCUSSED BRIEFLY ABOVE. THEREFORE, UNLESS THE CREDITWORTHINESS OF THESES PERSONS AND THE TRANSACTIONS REPRESENTED BY THE ENTRIES IN THE BANK ARE CORRELATED WITH THE 'BUSINESS ACTIVITY' OR THE IR SOURCES OR INCOME, THE ABOVE PATTERN AND THE FREQUE NCY OF DEPOSITS AND WITHDRAWALS AT SHORT INTERVALS ONLY CORROBORATES THE FACT THAT THE ACCOUNT HAS BEE N USED ONLY FOR THE PURPOSE OF PROVIDING ACCOMMODATION ENTRIES. THE EVIDENCE AFFORDED BY TH E ABOVE FACTS IS ONLY FORTIFIED BY THE AFORESAID STATEMENTS OF SH. MUKESH GUPTA,S H. S.H MALLICK AND THEIR OTHER ASSOCIATES THE ARGUMENT THAT THE MONEY HAS COME THROUGH BANKING CHANNEL AND HENCE THE SAME IS GENUINE IS FARCE IN ITSELF. THE NATURE OF DEPOS ITS IN ITS ACCOUNTS CANNOT BE EXPLAINED EXCEPT BY THE TRUTH THAT THESE AMOUNTS REPRESENT THE MONEY OF THE BENEFICIARY ROUTED THROUGH IT. THE BENEFICIA RY HAS TO HAVE THE MONEY IN ITS ACCOUNT THROUGH NOR MAL BANKING CHANNEL. THIS IS THE SOLE REASON FOR ARRANG ING THE ENTIRE TRANSACTION. IN THE LIGHT OF THE ABOVE, THE ONUS LAY HEAVILY ON THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS AND THE TRUE IDENTITY & CREDITWORTHINE SS OF THE ALLEGED SHARE APPLICANTS. CONSIDERING TH E TOTALITY OF THE CIRCUMSTANCES, IT IS OBVIOUS THAT T HE TRANSACTIONS WERE ONLY A CAMOUFLAGE. THE TOTA L AMOUNT OF RS. 20,00,000/- STATED TO HAVE BEEN RECEI VED FROM THE SAID INVESTOR COMPANIES REPRESENTS T HE ASSESSSEES OWN UNACCOUNTED MONEY WHICH HAS SOUGHT TO BE INTRODUCED INTO ITS BUSINESS IN THE GARB OF SHARE APPLICATION MONEY. THUS, KEEPING IN VIEW THE TOTALITY OF THE FACTS, THE AMOUNT OF RS. 20,00,000 /- IS ADDED BACK TO THE INCOME OF THE ASSESSESE COMPANY U /S 68 OF THE IT ACT. .......... AS PER THE DETAILS FILED, THE ASSESSEE HAS ALSO REC EIVED A SUM OF RS. 5,00,000/- FROM SH. V. K. ANGAMI , R/O 21/2, MILE, DIMAPUR, ASSAM. THE ASSESSEE HAS FILED A COPY OF THE SAME APPLICATION FORM OF SH. ANGAMI WHICH REVEALS THAT THE ENTIRE AMOUNT OF RS. 5,00,00 0/- HAS BEEN RECEIVED IN CASH. NOTICE U/S 133(6) WA S SENT TO SH. ANGAMI ON 6/9/2007, CALLING FOR THE FOL LOWING: A) CONFIRMED COPY OF ACCOUNT OF THE ASSESSEE IN HIS BO OKS OF ACCOUNTS FOR THE YEAR UNDER CONSIDERATION B) SOURCE OF INVESTMENT IN SHARE CAPITAL OF THE ASSESS EE COMPANY WITH COPIES OF THE BANK STATEMENT C) HIS PAN AND I. T. PARTICULARS WITH COPY OF ACKNOWLE DGEMENT FOR I.T. RETURN FOR THE A. Y 2005-06 THERE WAS NO RESPONSE TO THIS LETTER. VIDE ORDER S HEET ENTRY DATED 11/12/2007, THE AR WAS INFORMED THAT THE NOTICE U/S 133(6) TO SH. ANGAMI REMAINED U N-COMPLIED WITH. VIDE ORDER SHEET ENTRY DATED 17/12/2007, THE AR WAS ASKED TO SHOW CAUSE AS TO WH EY THE AMOUNT RECEIVED FROM SH. ANGAMI BE NOT 13 ITA NO. 1932/DEL/09 TREATED AS UNEXPLAINED AS THE GENUINENESS OF THE TR ANSACTION, AND THE IDENTITY & CREDITWORTHINESS OF T HE SHARE APPLICANT REMAINED UNVERIFIED. ON 27/12/2007 , THE AR FURNISHED A CONFIRMATION OF SH. ANGAMI, ALONG WITH HIS IDENTITY DOCUMENT. IT HAS ALSO BEEN STATED THAT SH. ANGAMI BELONGS TO A SCHEDULE TRIBE OF NAGALAND AND, THEREFORE, HIS INCOME IS EXEMPT AND H E HAS NO PAN. PERUSAL OF THE DETAILS CONFIRMATION OF SH. VK. ANGA MI FILED REVEALS THAT THE SOURCE, AVAILABILITY, FINANCIAL CAPACITY DO NOT STAND SUBSTANTIATED IN AN Y WAY. THE PRESSING NEED FOR THIS PAYMENT HAVING BE EN MADE IN CASH BY SH. ANGAMI IS HIGHLY SUSPECT AS THE RE IS NO REASON WHY THE SAME WAS NOT ROUTED THROUGH NORMAL BANKING CHANNEL. THIS ASSUMES GREATER SIGNIF ICANCE AS IT IS HIGHLY IMPROBABLE THAT SH. ANGAMI O R ANY OTHER PERSON ON HIS BEHALF ACTUALLY CARRIED THI S AMOUNT ALL THE WAY FROM MIZORAM TO DELHI. AS PER THE DOCUMENTS FILED, THE ENTIRE CREDITWORTHINESS IS BEI NG OUGHT TO BE ESTABLISHED MERELY ON THE BASIS OF M ERE SELF-SERVING ASSERTIONS WHICH ARE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS FINANCIA L STATUS AND THE IMMEDIATE SOURCE OF THE SAID AMOUNT. THE ALLEGED HARE APPLICANT HAS CHOSEN TO REMAIN SILENT ABOUT THE SOURCE OF THIS AMOUNT 0F RS. -5,00 ,000/- WHICH HAD SPECIFICALLY BEEN ASKED FOR VIDE N OTICE ULS 133(6) D T 06.09.2007 . IN VIEW OF THE ABOVE, THE CREDITWORTHINESS OF THE ALLEGED SHARE APPLICANT AND THE GENUINENESS OF THE TRANSACTION REMAIN UNSUBSTAN TIATED. THEREFORE, THIS AMOUNT OF RS. 5,00,000/- IS TREATED AS UNEXPLAINED AND ADDED TO THE INCOME OF T HE ASSESSEE U/S 68 OF THE ACT. 10. ON THE APPEAL FILED BY THE ASSESSEE, LD. FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER HAD ADJUDICATED THE ISSUE IN DISPUTE THE FINDINGS OF THE LD. CIT(A) IS AS UNDER:- DECISION: I HAVE GONE THROUGH THE FACTS AND CIRCUMS TANCES OF THE CASE, OBSERVATION OF THE A.O. AS CONTAINED IN THE ASSESSMENT ORDER, SUBMISSI ONS OF THE AR OF THE APPELLANT AND JUDICIAL PRONOUNCEMENTS ON THIS ISSUE. DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT COMPANY HAD INCREASED ITS SHARE CAPITAL BY RS. 2,97,50,000/- FROM VARIOUS PARTIES. THE ASSESSING O FFICER, IN THE ASSESSMENT ORDER HAS ADDED THE SHARE APPLICATION MO NEY RECEIVED FROM 4 PARTIES, NAMELY M/S ONYX EXIM & SALES LTD. (RS. 5,00,000/-), M/S SRINIWAS LEASING & FINANCE LTD. (RS.10, 00\, 000/-), M/S RAPID IMPE X PVT. LTD. (RS. 5,00,000/-) AND SHRI V K. ANGAMI (RS. 5,0 0,000/-) AS UNEXPLAINED CASH CREDIT IN THE HANDS OF THE APPELLANT COMPANY. THE ADDITION IN RESPECT OF FIRST THREE CASES WAS MADE ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTM ENT AND ON THE STATEMENT OF SHRI MAHESH GARG, S/O R.S. GARG, SH. VINOD GARG, S/O R.S. GARG SH. RAJEEV KUMAR AGGARWAL, S/O R.S. AGGARWAL, AND SH. S.H. MALLICK, S/O .NH. MALLICK GIVEN BEFORE THE OFFICERS OF THE INVESTIGATION WING, WHEREAS THE ADDITION IN RESPECT OF V. K. ANGAMI WAS MADE AS THE SAID PAYMEN T WAS RECEIVED IN CASH AND WAS NOT SUPPORTED BY ANY IMMEDIATE SOURCE OF THE SAID CASH. THE ASSESSING OFFICER HAS ASKED THE APPELLANT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS TO PRODUCE T HE DIRECTORS OF THE COMPANIES FROM WHOM SHARE APPLICAT ION MONEY WAS RECEIVED, FOR EXAMINATION. THE 14 ITA NO. 1932/DEL/09 APPELLANT COMPANY TO SUBSTANTIATE THAT THE AMOUNT O F SHARE APPLICATION MONEY RECEIVED FROM THE SAID PARTIES WAS GENUINE, PROVIDED VARIOUS SUPPORTING EV IDENCE, TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE PARTY IN THE FORM OF CONFIRMATION FROM THE SAID PARTIES COPY OF CERTIFICATE OF INCORPORATION OF T HE SAID COMPANIES, COPY OF PAN CARD, COPY 0F RESOLUTIONS, C OPY OF AUDITED BALANCE SHEET AS ON 31.3.2005, COPY OF I.TR. ACKNOWLEDGEMENT COPY OF SHARE APPLICATION FORM, COPY OF BANK STATEMENTS OF THE SUBSCRIBER AND DOCUM ENTARY EVIDENCE IN RESPECT OF MR. ANGAMI, SHOWING HIS FINANCIAL AND SOCIAL TAT WELL AS HIS IDENTITY. THE AO DISREGARDED THESE EVIDENCES AND EMPHASIZED T HAT IDENTITY AND CREDITWORTHINESS OF THE INVESTORS WAS NOT PROVED. HE ACCORDINGLY HELD THAT THE AMOUNT O F RS.25,00,000/- RECEIVED BY THE APPELLANT AS SHARE A PPLICATION MONEY FROM THE AID FOUR PARTIES CANNOT BE TREATED AS GENUINE AND IS ONLY AN ACCOMMODATION ENT RY. ON GOING THROUGH THE FACTS OF THE CASE AND KEEPIN G IN VIEW THE VARIOUS PRONOUNCEMENTS OF THE COURTS, IT IS CLEAR THAT THAT THE APPELLANT HAD DI SCHARGED THE INITIAL ONUS OF ESTABLISHING THE EXIST ENCE, IDENTITY AND CREDITWORTHINESS OF THE INVESTOR COMPA NY. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. PR ADEEP GUPTA 207 CTR 115, WHICH HAS ALSO BEEN RELIED UPON BY THE DELHI ITA T IN THE RECENT JUDGEM ENT IN THE CASE OF BABITA GUPTA ITA NO. 2897/06, WHEREIN IT IS HELD THAT IN THEFACTS OF THE CASE BE FORE US IT MAY BE SEEN THAT FROM THE VERY BEGINNIN G LD A.O. HAD SHIFTED ENTIRE BURDEN UPON THE ASSESSEE AN D NO MATERIAL WAS BROUGHT BY HIM TO PROVE HIS ALLEGATION THAT THE IMPUGNED AMOUNT REPRESENTED ASS ESSEE COMPANY' UNDISCLOSED INCOME. THEREFORE, ON THIS GROUND ALONE THE ENTIRE ADDITION DESERVES TO B DELETED AND MAY KINDLY BE HELD SO. IN THE ASSESSMENT ORDER ALSO THE AO HAS NOT GIVEN A NY DETAILS ABOUT THE ENQUIRY CONDUCTED BY HIM ON THE BASIS OF WHICH IT WAS HELD THAT THE SAID PARTIES WERE INVOLVED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRY. THE HON'BLE DELHI HIGH COURT I N THE CASE J.T. (INDIA) EXPORTS AND ANOTHER VS. UOI AND ANOTHER (2003) 262 ITR 269 (DEL-FB) HAS HELD TH AT THE ASSESSING OFFICER MUST PASS A SPEAKING ORDER GIVING REASONS FOR THE CONCLUSIONS ARRIVED AT, AND OPPORTUNITY OF BEING HEARD MUST BE PROVIDED TO THE ASSESSEE BEFORE PASSING ANY ADVERSE ORDER. IT HAS B EEN FURTHER HELD THAT IN THE NOTICE ISSUED BY THE A.O. SPECIFIC REQUIREMENT SHOULD BE INDICATED AND R EASONABLE, OPPORTUNITY MUST BE GRANTED. IT WAS HELD BY THE HORI'BLE DELHI HIGH COURT THAT IN ABSENCE OF A NOTICE OF THE KIND AND SUCH REASONABLE OPPORTUNITY, THE ORDER PASSED AGAINST THE PERSON IN ABSENTIA AND BEC OMES WHOLLY VITIATED. THE AO IN HIS ASSESSMENT ORDER HAS NOT BROUGHT ANY MATERIAL ON RECORDS, WHICH CAN PROVE THAT THIS MONEY WAS APPELLANTS OWN UNDISCLOSED INCOME. H E HAS SIMPLY RELIED UPON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT WITHO UT MAKING ANY EFFORT TO VERIFYING THE FACTS STATED THEREIN. IT HAS ALSO BEEN HELD BY THE VARIOUS COURT S THAT AO MUST BRING ON RECORD SOME POSITIVE MATERI AL OR EVIDENCE TO INDICATE THAT THE SHARE HOLDERS WERE BE NAMIDARS, FICTITIOUS PERSONS OR THAT ANY PART OF TH E SHARE CAPITAL MONEY REPRESENTED THE COMPANIES OWN I NCOME FROM UNDISCLOSED SOURCES. THE APPELLANT HAS CITED VARIOUS CASE LAX S IN THE ITS SUBMISSIONS WHE REIN IT HAS BEEN HELD THAT THE SHARE CAPITAL ISSUED CANNOT BE TREATED AS UNDISCLOSED INCOME OF THE APPELLANT A ND CANNOT BE ADDED U/S 68 OF THE INCOME TAX ACT. TH E FACTS OF THE CASES CITED BY THE APPELLANT ARE IDENT ICAL WITH THAT OF THE INSTANT CASE. FURTHER, THE RE LIANCE IS ALSO PLACED ON FOLLOWING DECISIONS OF VARIOUS COURT S :- 15 ITA NO. 1932/DEL/09 1. DIVINE LEASING & FINANCE LTD. 299 ITR, DELHI. 2. GENERAL EXPORTS & CREDITS PVT. LID. 880/2006 (SC) 3. LOVELY EXPORTS PVT. LTD. (2008) 299 ITR 268 (SC ) 4. A-ONE HOUSING COMPLEX LTD. V. ITO WARD 1(1),110 ITD 361 (DELHI) 5. CIT VS. VALUE CAPITAL SERVICE PVT. LTD 307- ITR 334 (DELHI). 6. CIT VS. ORISSA CORPORATION PVT. LTD. 159 ITR7 8 (S C). 7. CIT VS SOPHIA FINANCE LTD. (1994)ITR 98 (DEL) IN THE LATEST JUDGEMENT OF THE APE X COURT IN THE C ASE OF CIT \VS LOVELY EXPORT 299 ITR 268 (SC) WHICH HAS CONFIRMED THE ORDER 0F THE DELHI HIGH CO URT. IT HAS BEEN HELD THAT ONCE THE IDENTIFY OF THE SHARE HOLDER HAVE BEEN ESTABLISHED. EVEN IF THERE IS A CA SE OF BOGUS SHARE CAPITAL, IT CANNOT BE ADDED IN TH E HANDS OF THE COMPANY UNLESS ANY ADVERSE EVIDENCE IS NOT ON RECORD. IN THE INSTANT CASE. THE APPELLANT HAS PROVIDED CONFIRMATIONS FROM THE SAID PARTIES AS W EII AS VARIOUS EVIDENCES TO ESTABLISH THE GENUINE NESS OF THE TRANSACTION. THE BALANCE SHEETS OF THE SAID COMPANIES AND OTHER DOCUMENTARY EVIDENCE FILED BY THE APPELLANT, SHOWS THE FINANCIAL STRENGTH OF THE SAID PARTIES. M OREOVER, IT IS SETTLED LAW IN VIEW OF THE DECISION IN THE CASE OF S . HASTIMAL 49 ITR 273(MAD) AND DAULATRAM RAWATMULL (1973) 871TR 349(SC), THAT SOURCE OF TH E SOURCE CANNOT BE ENQUIRED FROM AN ASSESSEE WHICH UN FORTUNATELY SEEMS TO BE THE CASE IN THE INSTANT CASE. IN A RECENT JUDGMENT DATED 30/1/2009 HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GANGOUR INVESTMEN T LTD. (ITA NO. 34/2007) HAS HELD THAT REVENUE CAN MA KE ADDITION U/S 68 OF THE ACT ONLY IF THE ASSESSEE IS UNABLE TO EXPLAIN THE CREDITS APPEARING IN ITS BOOK S OF ACCOUNTS. IN THE SAID CASE THE APPELLANT HAS DULY EXPLAINED THE SAID CREDIT ENTRIES IN THE FORM OF VA RIOUS DOCUMENTARY EVIDENCE FILED. THE SAID DOCUMEN TARY EVIDENCE CONTAINED DETAILS, WHICH SET OUT NOT ONLY THE IDENTITY OF THE SUBSCRIBERS, BUT ALSO GAVE INFORMATION, WITH RESPECT TO THEIR ADDRESS, AS WELL AS, PAN NUMBERS, ASSESSMENT PARTICULARS ETC. BASED ON THESE FACTS, THE HONBLE DELHI COURT DISMISSED THE APPEAL OF REVENUE. IN YET ANOTHER DECISION AS TO THE CORRECTNESS OF TR EATING SHARE APPLICATION MONEY ON PAR WITH CASH CREDIT, THE HONBLE DELHI HIGH COURT IN CIT VS. VALU E CAPITAL SERVICES P. LTD. (2008) 307 ITR 334 (DELH I) FOUND AFTER REFERRING TO THE TWO OF THE DECISIONS O F THE DELHI HIGH COURT ON THE SUBJECT THAT IN RESPE CT OF SHARE CAPITAL AMOUNTS, THEY CANNOT BE ASSESSED IN T HE HANDS OF THE COMPANY, UNLESS THE DEPARTMENT IS ABLE TO SHOW THAT THE AMOUNT RECEIVED TOWARDS HARE CAPITAL ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE COMPANY. AFTER GOING THROUGH VARIOUS FACTS OF THE CASE AND J UDICIAL PRONOUNCEMENT ON THIS ISSUE, CITED SUPRA IT IS SEEN THAT THE APPELLANT'S CASE IS COVER ED BY THE ABOVE JUDGMENTS. 16 ITA NO. 1932/DEL/09 AFTER GOING THROUGH THE FACTS OF THE CASE AND THE J UDICIAL PRONOUNCEMENTS ON THIS ISSUE. I AM OF THE OPINION THAT THE APPELLANT HAS DISCHARGED THE I NITIAL ONUS OF ESTABLISHING THE BONAFIDE OF THE TRANSACTIONS AND THE AO WAS NOT JUSTIFIED IN IGNORI NG VARIOUS EVIDENCES PROVIDED TO HIM BY THE APPELLA NT. IT IS SEEN THAT THE ASSESSING OFFICER HAD NOT ANY I NVESTIGATION / ENQUIRY, DURING THE COURSE OF ASSESS MENT PROCEEDINGS. THE ASSESSMENT ORDER HAS BEEN FRAMED B Y THE ASSESSING OFFICER ONLY ON THE BASIS OF THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT, WITHOUT MAKING ANY FURTHER INVESTIGATION. NOTHING ADVERSE HA BEEN BROUGHT ON R ECORD BY THE AO TO ESTABLISH THAT THE SHARE APPLICATION MONEY RECEIVED B THE APPELLANT, REPRESE NTED ITS OWN UNDISCLOSED INCOME. FURTHER, IF THERE WAS DOUBT ABOUT THE SOURCE OF INV ESTMENT OF THE SAID COMPANIES, THEN ADDITIONS SHOULD HAVE BEEN MADE IN THE CASE OF THE SAID COMPA NIES AND NOT IN THE HANDS OF THE APPELLANT COMPANY. IT IS ALSO SEEN THAT ASSESSING OFFICER H N GIVEN TH E APPELLANT ANY OPPORTUNITY TO CROSS EXAMINE THE PERSONS I/ENTRY OPERATOR, ON THE BASIS OF WHOM, AD VERSE INFERENCE WAS TAKEN IN THE CASE OF THE APPELLANT. RATHER IT IS OBSERVED THAT THE A .0. HAD SHIFTED ENTIRE BURDEN UPON THE APPELLANT AND DID N OT MADE ANY FURTHER INVESTIGATION ON THE ISSUE. THE A. O. HAS NOT BROUGHT ANY MATERIAL ON RECORD OR PROVE HIS ALLEGATION THAT THE IMPUGNED AMOUNT REPRESENTED ASS ESSEE COMPANY- UNDISCLOSED INCOME AND HAS COMPLETED THE ASSESSMENT ON THE BASIS OF INFORMATIO N RECEIVED FROM THE INVESTIGATION DIRECTORATE. IN THE LIGHT OF THE ABOVE DISCUSSION. I AM INCLINED TO AGREE WITH THE ARGUMENTS AND EVIDENCES PROVIDED BY THE APPELLANT TO SUBSTANTIATE THAT THE TRANSACTION REGARDING SHARE APPLICATION MONEY RECEIVED BY IT WE RE GENUINE TRANSACTIONS AND THE SAME WERE NOT ACCOMMOD ATION ENTRIES. I ALSO DO NOT FIND ANY EVIDENCE COLLECTED BY THE A.O. WHICH COULD PROVE OTHERWISE. ACCORDINGLY. THE A. 0 WAS NOT JUSTIFIED IN TREATING THE AMOUNT OF SHARE APPLICATION MONEY RECEIVED BY THE A PPELLANT A ITS UNDISCLOSED INCOME. IN VIEW OF THE AFORESAID DISCUSSION. I DELETE THE A DDITION OF RS. 25,00,000/-MADE BY THE A.O. U/S 68 OF THE 1. T. ACT, 1961. 11. KEEPING IN VIEW OF THE FINDINGS GIVEN SO ASSESS ING OFFICER AS WELL AS THE LD. FIRST APPELLATE AUTHORITY AND THE DOCUMENTARY FINDI NG BY THE ASSESSEE BEFORE US. WE ARE OF THE CONSIDERED VIEW THAT LD. FIRST APPELL ATE AUTHORITY HAS DELETED THE ADDITION IN DISPUTE ON THE BASIS OF VARIOUS DOCUMEN TARY EVIDENCE FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS WELL AS BE FORE HIM. HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. EXPORT LOVELY 299 ITR 261 (SC) WHICH HAS CONFIRMED THE ORDER OF HONBLE DELHI HIGH COURT HAS HELD THAT ONCE THE IDENTITY OF THE SHARE HOLDER HAVE BEEN ESTABLISHED, EVEN IF THE RE IS A CASE OF BOGUS SHARE CAPITAL, 17 ITA NO. 1932/DEL/09 IT CANNOT BE ADDED IN THE HANDS OF COMPANY UNLESS A NY ADVERSE EVIDENCE IS NOT ON RECORD. LD. FIRST APPELLATE AUTHORITY HAS EXAMINED THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSING OFFICER AS WELL AS BEFORE HIM AND HELD THAT THE ASSESSEE HAS PROVIDED CONFIRMATIONS FROM ALL THE PARTIES AS WELL AS VARIOUS EVIDENCES TO ESTABLISH THE GENUINENESS OF THE TRANSACTION ASSESSEE HAS ALS O RELIED UPON THE JUDGMENT OF NEMI CHAND KOTHARI VS. CIT 264 ITR 254(GAUHATI) WHE REIN IT HAS HELD THAT IT IS A CERTAIN LAW THAT THE OF THE ASSESSEE IS TO PROVE T HE GENUINENESS OF TRANSACTION AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR MUST R EMAIN CONFINED TO THE TRANSACTIONS WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND TH E CREDITOR. IT IS NOT THE BUSINESS OF ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF CRED ITORS. SIMILAR OBSERVATION HAS ALSO BEEN GIVEN IN THE CASE OF HONBLE SUPREME COUR T OF INDIA IN THE CASE OF HASTIMAL 49 ITR 273 (MADR) AND DAULATRAM RAWATMAL ( 1973) 87 ITR 349 (SC). LD. FIRST APPELLATE AUTHORITY HAS CITED VARIOUS DEC ISIONS RENDERED BY THE HONBLE SUPREME COURT OF INDIA AS WELL AS THE HONBLE JURIS DICTION HIGH COURT IN THE IMPUGNED ORDER AND FINALLY HAS HELD THAT THE ASSESS EE HAS SUBSTANTIATED THE TRANSACTION REGARDING SHARE APPLICATION MONEY RECEI VED BY IT WAS GENUINE TRANSACTION AND THE SAME WERE NOT ACCOMMODATION ENT RIES HE DID NOT FIND ANY EVIDENCE COLLECTED BY THE AO WHICH COULD PROVE OTHE RWISE AND DELETED THE ADDITIONS IN DISPUTE. AS REGARD TO DELETION OF COM MISSION BY THE LD. FIRST APPELLATE AUTHORITY. WE ARE OF THE VIEW THAT WHEN THE ADDITI ON OF RS. 20 LAKHS HAS ALREADY BEEN DELETED BY THE LD. FIRST APPLLATE AUTHORITY TH EN THE QUESTION OF COMMISSION ON THE SAME DOES NOT RISE. THEREFORE, WE UPHOLD THE I MPUGNED ORDER ON THE ISSUE INVOLVING GROUND NO. 2 RAISE BY THE REVENUE AND DIS MISS THE SAME. 12. KEEPING IN VIEW ALL THE FACTS AND CIRCUMSTANCES , WE ARE OF THE CONSIDERED VIEW THAT THE LD. FIRST APPELLATE AUTHORITY HAS PAS SED THE IMPUGNED ORDER UNDER THE LAW AND ACCORDING TO THE FACTS OF THE PRESENT CASE AND HAS RIGHTLY DELETED THE ADDITION IN DISPUTE. WE FIND NO INFIRMITY IN THE I MPUGNED ORDER AND UPHELD THE IMPUGNED ORDER BY DISMISSING THE APPEAL FILED BY TH E REVENUE. 18 ITA NO. 1932/DEL/09 13. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 ST APRIL 2015. SD/- SD/- (N. K. SAINI) (H. S. SIDHU) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 01 /04/2015 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGIS TRAR ITAT NEW DELHI 19 ITA NO. 1932/DEL/09 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 26.03.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER