DCIT 1(1)(1), MUMBAI V. ALCON BIOSCIENCES P.LTD, MUMBAI

ITA 1946/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0006 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 29-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH JOTHWANI
• Assessee Lawyers: M C OMI NINGSHEN
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 143(3); 142(1); 133(6); 68

Judgement Text

1 ITA 1946/MUM/2016 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI MAHAVIR SINGH(JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.1946/MUM/2016 (ASSESSMENT YEAR: 2010-11) DY. CIT-1(1)(1), MUMBAI VS M/S ALCON BIOSCIENCES P LTD 112, MARINE CHAMBERS, NEW MARINE LINES, MUMBAI-400 020 PAN : AAACA 5119P APPELLANT BY SHRI MC OMI NINGSHEN REVENUE BY SHRI PRAKASH JOTHWANI DATE OF HEARING 29-01-2018 DATE OF PRONOUNCEMENT 28-02-2018 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST ORDER OF THE CIT(A)-2, MUMBAI DATED 15-12-2015 AND IT PERTAINS T O AY 2010-11. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING, TRADING A ND EXPORTING PHARMACEUTICAL ITEMS, FILED ITS RETURN OF INCOME FO R THE ASSESSMENT YEAR 2010-11 ON 05-10-2010 DECLARING TOTAL INCOME OF RS. 32,81,207. THE CASE HAS BEEN SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO THE NOTICES, T HE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME T O TIME AND FURNISHED 2 ITA 1946/MUM/2016 DETAILS, AS CALLED FOR. THE ASSESSMENT HAS BEEN CO MPLETED U/S 143(3) ON 04-03-2013 DETERMINING TOTAL INCOME AT RS.1,73,6 3,846 INTER-ALIA MAKING ADDITION TOWARDS UNEXPLAINED CASH CREDITS U/ S 68, TOWARDS SHARE APPLICATION MONEY RECEIVED FROM 3 PARTIES AND DISAL LOWANCE OF INTEREST EXPENSES U/S 36(1)(III) OF THE ACT. THE ASSESSEE C ARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) FOR THE DETAI LED REASONS RECORDED IN HIS ORDER DATED 15-12-2015 ALLOWED APPEAL FILED BY THE ASSESSEE, WHEREIN HE HAS DELETED ADDITION MADE BY THE AO TOWA RDS SHARE APPLICATION MONEY U/S 68 OF THE ACT, DISALLOWANCE O F INTEREST U/S 36(1)(III) OF THE ACT. AGGRIEVED BY THE CIT(A)S ORDER, REVEN UE IS IN APPEAL BEFORE US. 3. THE ONLY ISSUE THAT CAME UP FOR OUR CONSIDERATIO N FROM THIS APPEAL IS DELETION OF ADDITION MADE BY THE AO TOWARDS SHAR E APPLICATION MONEY U/S 68 OF THE ACT. THE FACTS WITH REGARD TO THE IM PUGNED ADDITION ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO NOTICED THAT THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY T O THE TUNE OF RS.1.15 CRORES FROM 3 PARTIES, THEREFORE, CALLED UP ON THE ASSESSEE TO FURNISH NECESSARY EVIDENCE INCLUDING SHARE APPLICAT ION FORMS, COPY OF PAN CARD, INCORPORATION CERTIFICATE OF THE SHARE AP PLICANTS AND COPY OF BANK STATEMENTS. IN RESPONSE TO NOTICE, THE ASSESS EE VIDE LETTER DATED 05-09-2010 FURNISHED THE DETAILS CALLED FOR BY THE AO IN RESPECT OF 3 SHARE APPLICANTS, VIZ. (I) HEMANG FINCAP SERVICES P VT LTD; (II) AVDHAN 3 ITA 1946/MUM/2016 TRADELINK PVT LTD; AND (III) ARPITA TRADELINK PVT L TD. IN ORDER TO VERIFY THE GENUINENESS OF DETAILS FILED BY THE ASSESSEE, THE A O ISSUED NOTICE U/S 133(6) TO ALL THE PARTIES CALLING FOR THE DETAILS O F SHARE APPLICATION MONEY PAID TO THE ASSESSEE INCLUDING BANK STATEMENT HIGHL IGHTING THE AMOUNT OF SHARE APPLICATION MONEY PAID ALONG WITH FINANCIA L STATEMENTS FOR THE RELEVANT FINANCIAL YEAR. THE NOTICES ISSUED U/S 13 3(6) TO ALL THREE PARTIES WERE RETURNED UNSERVED AS THE PARTIES REFUSED TO AC CEPT THE NOTICES. THEREAFTER, THE AO ISSUED NOTICE U/S 133(6) TO BANK OF BARODA CALLING FOR THE DETAILS OF BANK ACCOUNT NUMBER FROM WHICH SHARE APPLICATION MONEY HAS BEEN CREDITED TO THE ACCOUNT OF THE ASSESSEE. IN RESPONSE TO NOTICE, BANK OF BARODA, VIDE ITS LETTER DATED 07-12-2012 FU RNISHED THE DETAILS OF CREDITS MADE TO THE ACCOUNT OF THE ASSESSEE. ON VE RIFICATION OF DETAILS, THE AO NOTICED THAT CHEQUE DEPOSITS IN BANK OF BARO DA IN THE NAME OF ALL 3 CONCERNS WERE MADE BY SINGLE PERSON. THEREFO RE, ISSUED FURTHER NOTICES U/S 133(6) TO ICICI BANK, I.E. THE BANK IN WHICH THE SHARE APPLICANTS HELD THEIR ACCOUNTS CALLING FOR STATEMEN TS OF M/S HEMANG FINCAP, AVDHAN TRADELINK PVT LTD; AND ARPITA TRADE LINK PVT LTD.. THE AO, ON VERIFICATION OF BANK STATEMENT FURNISHED BY ICICI BANK LTD, OBSERVED THAT ALL THREE BANK ACCCOUNTS OPERATED BY THESE 3 SHARE APPLICANTS WERE OPERATED ONLY FOR A LIMITED PERIOD DURING WHICH SHARE APPLICATION MONEY HAS BEEN RECEIVED BY THE ASSESSEE AND ALSO THOSE BANK ACCOUNTS HAVE RECEIVED MONEY FROM SOME INDIVID UAL. THE AO 4 ITA 1946/MUM/2016 FURTHER OBSERVED THAT ON FURTHER VERIFICATION OF SO URCE OF MONEY RECEIVED FROM INDIVIDUALS, IT WAS NOTICED THAT THE INDIVIDUA LS HAVE DEPOSITED CASH INTO THEIR BANK ACCOUNT EITHER ON THE SAME DAY OR I MMEDIATELY PRECEDING THE DAY ON WHICH THE FUNDS HAVE BEEN TRANSFERRED TO THE SHARE APPLICANTS BANK ACCOUNTS. THEREFORE, HE OPINED TH AT THE ASSESSEE HAS FAILED TO DISCHARGE THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. ACCORDINGLY, THE AMOUNT RECEIVED B Y THE ASSESSEE FROM 3 PARTIES TO THE EXTENT OF RS.1.15 CRORES HAS BEEN T REATED AS ASSESSEES OWN UNDISCLOSED INCOME AND THE SAME HAS BEEN BROUGH T TO TAX U/S 68 OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), ASSESSEE HAS REITERATED ITS SUBMISSIONS MADE BEFORE THE AO TO ARGUE THAT IT HAS FURNISHED VARIOUS DETAILS INCLUDING SHARE APPLICATION FORMS, PAN CARD , INCORPORATION CERTIFICATE, BANK STATEMENT OF SHARE APPLICANTS AND ALSO THE BANK STATEMENT OF THE PERSONS FROM WHOM SHARE APPLICANTS HAVE RECEIVED MONEY TO THE AO. HOWEVER, THE AO HAS IGNORED ALL E VIDENCES MERELY FOR THE REASON THAT SHARE APPLICANTS HAVE RECEIVED MONEY FROM OTHER PERSONS AND THE OTHER PERSONS HAVE DEPOSITED CASH I NTO THEIR BANK ACCOUNTS WITHOUT APPRECIATING THE FACT THAT ONCE AS SESSEE DISCHARGED ITS ONUS BY FILING IDENTITY, GENUINENESS OF TRANSACTION S, CREDITWORTHINESS OF THE PARTIES, AO CANNOT LOOK INTO THE SOURCE OF SOUR CE. THE ASSESSEE 5 ITA 1946/MUM/2016 FURTHER CONTENDED THAT OUT OF 3 APPLICANTS, M/S HEM ANG FINCAP SERVICES PVT LTD FILED ITS RETURN OF INCOME AND COPY OF ITR ACKNOWLEDGEMENTS HAVE BEEN FURNISHED TO THE AO. THOUGH THE OTHER TW O APPLICANTS HAVE NOT FILED RETURN OF INCOME, THEY HAVE FILED ENOUGH EVIDENCES TO JUSTIFY THE SOURCE OF SHARE APPLICATION MONEY GIVEN TO THE ASSE SSEE, THEREFORE, THE AO WAS INCORRECT IN MAKING ADDITION U/S 68 OF THE A CT. THE CIT(A), AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AN D ALSO RELYING UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F CIT VS LOVELY EXPORTS PVT LTD (2008) 216 CTR (SC) 195, OBSERVED T HAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPA NY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO , THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS U NDISCLOSED INCOME OF THE ASSESSEE. ACCORDINGLY, DIRECTED THE AO TO DELE TE ADDITION MADE TOWARDS SHARE APPLICATION MONEY RECEIVED FROM 3 SHA RE APPLICANTS, HOWEVER, THE CIT(A) FURTHER DIRECTED THE AO TO TAKE PROPER CARE IN PASSING ON THE INFORMATION OF 3 SHARE APPLICANTS TO THE CONCERNED AO WHERE PAN HAVE JURISDICTION AND REQUEST THEM TO MAK E FURTHER ENQUIRY AND SEE TO THAT WHETHER THEY HAVE BEEN PROPERLY ASS ESSED TO TAX AND PAID TAX THEREON. AGGRIEVED BY THE ORDER OF CIT(A) , REVENUE IS IN APPEAL BEFORE US. 5. THE LD.DR SUBMITTED THAT THE LD.CIT(A) WAS ERRED IN DELETING THE 6 ITA 1946/MUM/2016 ADDITION MADE U/S 68 IN RESPECT OF SHARE APPLICATIO N MONEY RECEIVED FROM THE INVESTORS WHEN THE AO GAVE A CLEAR FINDING THAT THE ASSESSEE COULD NOT SATISFACTORILY EXPLAIN THE NATURE AND SOU RCE OF CREDIT IN ITS BOOKS. THE LD.DR FURTHER REFERRING TO THE COMPANY MASTER DATA EXTRACTED FROM ROC WEBSITE SUBMITTED THAT OUT OF TH REE SHARE APPLICANTS, TWO SHARE APPLICANTS, VIZ. AVDHAN TRADE LINK PVT LTD; AND ARPITA TRADELINK PVT LTD, THE NAMES OF THESE TWO CO MPANIES HAVE BEEN STRUCK OFF BY THE ROC FROM THIS, IT IS ABUNDANTLY C LEAR THAT THOSE COMPANIES ARE SHELL COMPANIES ENGAGED IN PROVIDING ACCOMMODATION ENTRIES UNDER THE GUISE OF SHARE APPLICATION MONEY WHICH WAS FURTHER SUPPORTED BY THE FACTS GATHERED BY THE AO DURING TH E COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE CIT(A) ERRE D IN DELETING ADDITION WITHOUT PROPERLY APPRECIATING THE FACTS AN D HENCE, THE ADDITION MADE BY THE AO SHOULD BE SUSTAINED. 6. ON THE OTHER HAND, THE LD.AR FOR THE ASSESSEE ST RONGLY SUPPORTING THE ORDER OF THE CIT(A) HAS SUBMITTED THAT THE ASSE SSEE HAS FURNISHED ENORMOUS DOCUMENTS TO PROVE THE IDENTITY, GENUINENE SS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES INCLUDING SHARE APPLICATION FORMS, PAN, BANK STATEMENTS AND THEIR INCOME-TAX RETURN AC KNOWLEDGMENT COPIES. THEREFORE, THE AO WAS INCORRECT IN MAKING ADDITION MERELY BECAUSE THE NOTICES ISSUED U/S 133(6) WERE RETURNED UNSERVED AND ALSO THE SHARE APPLICANTS HAVE RECEIVED MONEY FROM THIRD PARTIES WHERE THEY 7 ITA 1946/MUM/2016 HAVE DEPOSITED CASH INTO THEIR BANK ACCOUNTS WITHOU T APPRECIATING THE FACT THAT ONCE ASSESSEE PROVES IDENTITY OF THE SHAR E APPLICANTS, THE AO CANNOT QUESTION SOURCE OF SOURCE. THE LD.AR FURTHE R SUBMITTED THAT THE ASSESSEE HAS DISCHARGED ITS INITIAL ONUS CAST U/S 6 8 OF THE ACT BY FILING VARIOUS DOCUMENTS AND ONCE THE INITIAL BURDEN HAS B EEN DISCHARGED, THE ONUS SHIFTS TO THE REVENUE TO PROVE OTHERWISE. THE AO WITHOUT ANY EVIDENCE WHICH COULD REBUT THE DOCUMENTS PRODUCED B Y THE ASSESSEE, MADE ADDITION MERELY ON THE BASIS OF SURMISES AND S USPICION ONLY ON THE BASIS OF BANK STATEMENTS OF SHARE APPLICANTS AND TH EIR CONCERNS. IN THIS REGARD RELIED UPON DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS M/S GAGANDEEP INFRASTRUCTURE PVT LTD (2017) 394 ITR 680 (BOM). THE ASSESSEE ALSO RELIED UPON THE DECISION OF HONB LE SUPREME COURT IN THE CASE OF CIT VS ORISSA CORPORATION PVT LTD 1986 AIR 1849. INSOFAR AS THE ARGUMENTS OF THE LD.DR, THAT THE NAME OF TWO COMPANIES HAVE BEEN STRUCK OFF BY THE ROC, THE LD.AR SUBMITTED LET TERS FROM THOSE COMPANIES STATING THAT THEIR NAMES HAVE BEEN STRUCK OFF BY THE ROC AS THE ANNUAL RETURNS OF THE COMPANIES WERE NOT FILED FOR YEARS. HOWEVER, THEY ARE IN THE PROCESS OF RESTORING THE NAME OF TH E COMPANIES WITH ROC BY FILING A PETITION BEFORE NCLT. THE LD.AR FU RTHER SUBMITTED THAT MERELY BECAUSE THE NAMES FOUND STRUCK OFF FROM THE REGISTER OF REGISTRAR OF COMPANIES, THE GENUINENESS OF TRANSACTIONS CANNO T BE QUESTIONED AS THE NAMES OF COMPANIES CAN BE STRUCK OFF FOR VARIOU S REASONS INCLUDING 8 ITA 1946/MUM/2016 NON FILING OF BALANCE-SHEETS. THE ASSESSEE HAS FIL ED VARIOUS DETAILS, THEREFORE, THERE IS NO REASON FOR THE AO TO MAKE AD DITION TOWARDS SHARE APPLICATION MONEY U/S 68 OF THE ACT. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE AO MADE ADDITIONS TOWARDS SHARE APPLICATION MONEY U/S 68 OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS FAILED TO DISCHARG E IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE PARTIES WHICH IS EVIDENT FROM THE FACT THAT THE AO HAS BROUGHT OUT C ERTAIN FACTS WITH REGARD TO THE SHARE APPLICANTS BY ISSUING NOTICE U/ S 133(6) OF THE INCOME-TAX ACT, 1961. ACCORDING TO THE AO, THE ASS ESSEE HAS RAISED SHARE APPLICATION MONEY FROM THREE COMPANIES AND AL L THE THREE COMPANIES ARE HAVING BANK ACCOUNTS IN BANK OF BAROD A WHERE A SINGLE PERSON HAS OPERATED THE ACCOUNTS OF ALL THE COMPANI ES. THE AO FURTHER OBSERVED THAT THE SHARE APPLICANTS HAVE RECEIVED MO NEY FROM CERTAIN INDIVIDUALS BEFORE THE DATE OF TRANSFER OF MONEY TO THE ASSESSEE COMPANY AND THOSE INDIVIDUALS HAVE DEPOSITED CASH O N THE SAME DAY OR A DAY BEFORE THE DATE ON WHICH THE MONEY HAS BEEN T RANSFERRED TO SHARE APPLICANTS BANK ACCOUNT. THE AO FURTHER OBSERVED THAT NOTICE U/S 133(6) WERE NOT SERVED AND THE PARTIES REFUSED TO A CCEPT THE NOTICE. THE AO ALSO OBSERVED THAT THE ASSESSEE FAILED TO EX PLAIN HOW IT HAS ISSUED SHARE HAVING FACE VALUE OF RS.10 WITH A HUGE PREMIUM OF RS.990 9 ITA 1946/MUM/2016 PER SHARE WHEN IT WAS AN UNLISTED COMPANY. THEREFO RE, THE AO OPINED THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIE S FROM SO-CALLED SHARE APPLICANTS TO CONVERT ITS OWN UNDISCLOSED INC OME IN THE GUISE OF SHARE APPLICATION MONEY. ACCORDINGLY TREATED SHARE APPLICATION MONEY RECEIVED FROM ALL THE THREE PARTIES AS UNEXPLAINED CREDIT AND BROUGHT TO TAX U/S 68 OF THE ACT. 8. THE AO HAS MADE ADDITION TOWARDS SHARE APPLICATI ON MONEY ON THE BASIS OF ANALYSIS OF BANK STATEMENTS OF SHARE APPLI CANTS AND THE SOURCE OF APPLICANTS BANK ACCOUNTS. THE ASSESSEE HAS FIL ED VARIOUS DETAILS INCLUDING SHARE APPLICATION FORMS, INCORPORATION CE RTIFICATE OF THE SHARE APPLICANTS AND THEIR BANK STATEMENT. THE ASSESSEE ALSO FURNISHED COPY OF INCOME-TAX RETURN ACKNOWLEDGMENT IN RESPECT OF M /S HEMANG FINCAP SERVICES PVT LTD. ON VERIFICATION OF DETAILS FILED BY THE ASSESSE, WE FIND THAT THE SHARE APPLICANTS HAVE PAID SHARE APPLICATI ON MONEY TO THE ASSESSEE THROUGH BANK ACCOUNTS AND ALSO DISCLOSED I NVESTMENTS IN THEIR FINANCIAL STATEMENTS FOR THE RELEVANT FINANCIAL YEA R. THOUGH TWO SHARE APPLICANTS HAVE NOT FILED THEIR INCOME-TAX RETURNS, FURNISHED COPY OF PAN AND THEIR BANK STATEMENTS. ONCE THE ASSESSEE HAS D ISCHARGED ITS INITIAL BURDEN CAST U/S 68 BY FILING DOCUMENTS TO PROVE IDE NTITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES, T HEN THE BURDEN SHIFTS TO THE REVENUE TO PROVE OTHERWISE. IN THIS CASE, THE AO DOES NOT HAVE ANY EVIDENCE WHICH COULD REBUT THE DOCUMENTS PRODUCED B Y THE ASSESSEE. 10 ITA 1946/MUM/2016 THE AO MADE ADDITION ONLY ON THE BASIS OF SUSPICION AND SURMISES ON THE GROUND THAT THE SHARE APPLICANTS DO NOT HAVE AN Y CAPACITY TO EXPLAIN AMOUNT TRANSFERRED TO THEIR ACCOUNT. 9. HAVING CONSIDERED FACTS, WE DO NOT FIND ANY MERI T IN THE ARGUMENTS OF THE REVENUE FOR THE REASON THAT ONCE THE ASSESSE E HAS FURNISHED NECESSARY EVIDENCE TO PROVE THE IDENTITY OF THE SHA RE APPLICANTS AND THEIR PAN DETAILS TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE W ITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASS ESSEE. THIS LEGAL PROPOSITION IS SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (SUPRA), WHER EIN IT WAS CATEGORICALLY HELD THAT THE AO CANNOT MAKE ADDITION TOWARDS SHARE APPLICATION MONEY, IF THE NAMES AND ADDRESSES AND P AN OF THE CREDITORS HAVE BEEN FURNISHED TO THE AO. THIS LEGAL PROPOSIT ION IS SUPPORTED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE O F CIT VS ORISSA CORPORATION LTD (SUPRA). THE JURISDICTIONAL HIGH C OURT OF BOMBAY IN THE CASE OF CIT VS M/S GAGANDEEP INFRASTRUCTURE PVT LTD (SUPRA) AND CIT VS PARADISE INLAND SHIPPING PVT LTD IN ITA NO. 66 OF 2016 DATED 10-04- 2017, HAS REITERATED THE LEGAL POSITION LAID DOWN B Y THE HONBLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (SUPRA). THE SUM AND SUBSTANCE OF THE RATIOS OF THE HONBLE SUPREME COUR T AND JURISDICTIONAL HIGH COURT, IS THAT ONCE THE ASSESSEE HAS FURNISHED NAMES AND 11 ITA 1946/MUM/2016 ADDRESSES ALONGWITH PAN OF SUBSCRIBERS, THEN THE AO IS FREE TO REOPEN THE ASSESSMENT OF SUBSCRIBERS IN ACCORDANCE WITH LA W, BUT THE SHARE APPLICATION MONEY CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 10. INSOFAR AS THE ARGUMENT OF THE LD.DR IN THE LIG HT OF COMPANY MASTER DATA TAKEN FROM ROC WEBSITE THAT THE NAMES O F TWO COMPANIES HAVE BEEN STRUCK OFF BY THE ROC, WE FIND THAT THE R OC HAS STRUCK OFF THE NAMES OF TWO COMPANIES FOR THE REASON THAT THOS E TWO COMPANIES HAVE NOT FILED THEIR ANNUAL ACCOUNTS FOR FEW YEARS, BUT FACT REMAINS THAT THE ASSESSEE HAS FURNISHED LETTERS FROM THOSE TWO C OMPANIES WHEREIN THEY HAVE ADMITTED THAT THEIR NAMES HAVE BEEN STRUC K OFF BY THE ROC FOR NON FILING OF ANNUAL ACCOUNTS, BUT THEY ARE IN THE PROCESS OF RESTORING THE NAMES BY FILING AN APPLICATION BEFORE NCLT. AS REG ARDS THE AOS OBSERVATION WITH REGARD TO THE ISSUE OF SHARES AT A FACE VALUE OF RS.10/- ISSUED AT A PREMIUM OF RS.990 PER SHARE, WE FIND TH AT THERE IS NO MERIT IN THE FINDINGS OF THE AO FOR THE REASON THAT THE I SSUE OF SHARES AT A PREMIUM AND SUBSCRIPTION TO SUCH SHARES IS WITHIN T HE KNOWLEDGE OF THE COMPANY AND THE SUBSCRIBERS TO THE SHARE APPLICATIO N MONEY AND THE AO DOES NOT HAVE ANY ROLE TO PLAY AS LONG AS THE A SSESSEE HAS PROVED GENUINENESS OF TRANSACTIONS. WE FURTHER NOTICE THA T THE AO CANNOT QUESTION ISSUE OF SHARES AT A PREMIUM AND ALSO CANN OT BRING TO TAX SUCH SHARE PREMIUM WITHIN THE PROVISIONS OF SECTION 68 O F THE ACT, BEFORE 12 ITA 1946/MUM/2016 INSERTION OF PROVISO TO SECTION 68 BY THE FINANCE A CT, 2012 W.E.F. 1-04- 2013 AS THE HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS M/S GAGANDEEP INFRASTRUCTURE PVT LTD (SUPRA) HELD THAT PROVISO INSERTED TO SECTION 68 IS PROSPECTIVE IN NATURE. 11. IN THIS VIEW OF THE MATTER AND CONSIDERING THE RATIOS OF THE CASE LAWS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS PROVED IDENTITY, GENUINENESS OF TRANSACTION AND CRE DITWORTHINESS OF THE PARTIES INSOFAR AS 3 SHARE APPLICANTS ARE CONCERNED . THE CIT(A), AFTER CONSIDERING RELEVANT FACTS HAS RIGHTLY DELETED ADDI TION MADE BY THE AO. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE CIT(A) ; HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE CIT(A) AND D ISMISS THE APPEAL FILED BY THE REVENUE. 12. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2018. SD/- SD/- (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 28 TH FEBRUARY, 2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER SR.PS, ITAT, MUMBAI