I.T.O.,Ward-1(4), Kolkata, Kolkata V. M/s Jellotic Supply Pvt. Ltd., Kolkata

ITA 1972/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6037 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 06-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Keywords: Unexplained cash credit
• Section: 68; 263; 144

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1972/KOL/2016 ASSESSMENT YEARS: 2005-06 INCOME-TAX OFFICER, WD-1(4), KOLKATA. VS. M/S. JEL LOTIC SUPPLY PVT. LTD. (PAN: AABCJ9581H) APPELLANT RESPONDENT DATE OF HEARING 14.06.2018 DATE OF PRONOUNCEMENT 05.07.2018 FOR THE APPELLANT SHRI G. HANGSHING, CIT FOR THE RESPONDENT SHRI SUBHAS AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-1, KOLKATA DATED 13.07.2016 FOR AY 2005-06. 2. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION MADE BY THE AO IN CONSEQUENCE TO THE D IRECTION GIVEN BY THE LD. CIT U/S. 263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT). 3. BRIEFLY STATED FACTS ARE THAT IN THIS CASE, THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 147/143(3) OF THE ACT THROUGH ORDER DATED 17.05.201 0.SUBSEQUENTLY, THE CASE WAS SET-ASIDE BY THE C.I.T, KOKATA-1 VIDE ORDER U/S 263 OF THE AC T BY HOLDING THE ASSESSMENT ORDER DATED 17.5.2010 PASSED BY THE AO AS ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF REVENUE. SUBSEQUENTLY, PURSUANT TO THE ORDER U/S 263 OF ACT, ASSESSMENT WAS COMPLETED BY THE AO U/S 144 OF THE ACT ON 21/03/2014 MAKING ADDITION OF RS. 54,95,00,000/- BY TREATING THE FRESH SHARE CAPITAL AND SHARE PREMIUM FOR THE YEAR ENDING 31.3.2005 AS UNEXPLAINED CASH CREDIT. ACCORDING TO AO, THE ASSESSEE WAS UNABLE TO DISCHAR GE ITS ONUS TO SUBSTANTIATE ITS CLAIM OF INTRODUCTION OF FRESH SHARE CAPITAL INCLUDING PREMI UM AMOUNTING TO RS.54,95,00,000/- DURING THE TIME PERIOD FOR WHICH SUCH SHARE APPLICA TION MONEY WAS RECEIVED BY ASSESSEE I.E. THE ALLEGED SHARE SUBSCRIPTIONS WERE ALLEGEDLY RECE IVED DURING EARLIER PREVIOUS YEAR ENDED ON 31.03.2000 AND NOT DURING THE CURRENT PREVIOUS Y EAR ENDED ON 31. 03.2005AND THUS 2 ITA NO.1972/KOL/2016 JELLOTIC SUPPLY PVT. LTD., AY 2005-06 2 TREATED THE IMPUGNED AMOUNT AS 'UNEXPLAINED CASH CR EDIT' FOUND IN THE ACCOUNTS OF ASSESSEE COMPANY FOR THE 'CURRENT PREVIOUS YEAR ENDED ON 31. 03.2005' RELEVANT TO THE ASSESSMENT YEAR 2005-06' BY RELYING ON THE RATIO OF VARIOUS CA SE LAWS. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO DELETE THE SAME AFTER TAKING INTO CONSIDERATION THE REMAND REPORT OF THE AO BY OBSERVING AS UNDER: THE APPELLANT'S A.R HAS MAINLY CONTENDED THROUGH THE WRITTEN SUBMISSIONS THAT THE COMPANY HAD DURING THE FINANCIAL YEAR 1999-2000 RELEVANT TO ASSTT. YEAR 2000-2001 HAD ISSUED 49,65,000 EQUITY SHARES OF RS. 10/- EACH AT A PREMI UM OF RS.90/- PER SHARE BEING RS.5,49,50,000/- TOWARDS SHARE CAPITAL AND RS. 49,4 5,50,000/- TOWARDS SHARE PREMIUM AGGREGATING TO RS. 54,95,00,000/- TO 11 APPLICANT C OMPANIES. THAT THE APPELLANT COMPANY HAD DULY RECEIVED THE CONSIDERATION FOR ISSUE OF SHARES BEING SHARE CAPITAL AND SHARE PREMIUM BY ACCOUNT PAYEE CHEQUES DURING THE RELEVANT FINANCIAL YEAR 1999-2000 RELEVANT TO THE ASST. YEAR 2000-2001 AND SAME WAS DULY CREDITED IN THE BOOKS O F ACCOUNTS OF THE APPELLANT COMPANY AND AUDITED ACCOUNTS AS ON 31.3.2000 ACCORDINGLY. THE APPELLANT HAD SUBMITTED VARIOUS DOCUMENTARY EVIDENCES INCLUDING AUDITED ACCOUNTS, C OPY OF FORM NO.5, BANK STATEMENTS/PASS BOOK FOR THE PERIOD 01.4.1999 TO 31.03.2000, SHARE APPLICATIONS ALONG WITH COPY OF BANK STATEMENTS OF RESPECTIVE SHARE HOLDERS WITH A UDITED ACCOUNTS FOR YEAR ENDING 31.3.2000, COPY OF FORM NO.2 (RETURN OF ALLOTMENT) WITH LIST O F ALLOTEES FOR ALLOTMENT OF 49,65,000 SHARES ON 31.10.1999, ANNUAL RETURN FILED WITH ROC FOR AGM ON 28/09/2000.MOREOVER, IT WAS ARGUED THAT THESE DOCUMENTARY EVIDENCES PROVE THAT THE IMPUGNED SHARE APPLICATION MONEY OF RS.49,65,50,000/- WERE RECEIVED BY CHEQUES BY THE A PPELLANT COMPANY DURING FINANCIAL YEAR 1999-2000 AND WERE DULY CREDITED IN ITS BOOKS OF AC COUNTS INCLUDING BANK BOOK DURING THE PREVIOUS YEAR ENDED ON 31.3.2000 RELEVANT TO THE AS SMT. YEAR 2000-2001. IT WAS ALSO AVERRED THAT ONCE IT IS PROVED THAT THE IMPUGNED SUMS WERE RECEIVED IN PREVIOUS YEAR 1999-2000, THE A.O HAS ERRED IN FACTS AND LAW TO BRING THESE TO TA X IN PREVIOUS YEAR 2004-05 RELEVANT TO ASSESSMENT YEAR 2005-06. THE APPELLANT'S A. R HAS ALSO RELIED UPON JUDGEMENT S OF THE HIGH COURTS IN THE CASE OF CIT VS USHA STUD AGRICULTURAL FARMS LTD. 301 ITR 3 84 (DELHI) AND IN CIT V. PARAMESHWAR BOHRA 301 ITR 404 (RAJASTHAN) FOR THE PROPOSITION T HAT WHERE A SUM WAS FOUND CREDITED IN EARLIER YEARS BUT ADDITIONS WERE MADE IN SUBSEQUENT YEAR, IT WAS CLEARLY HELD THAT SAME AMOUNT OF SHARE CAPITAL WHICH IS COMING AS OPENING BALANCE BEING BROUGHT FORWARD FROM EARLIER YEAR CANNOT BE ADDED IN LATER YEAR U/S 68 O F THE ACT AS UNEXPLAINED CASH CREDITS. ON CONSIDERING THE TOTALITY OF FACTS OR' THE CASE A ND THE CITED CASE LAWS, IT IS FOUND THAT IN VIEW OF THE CATEGORICAL FINDING BY THE A.O IN TH E REMAND REPORT THAT THE AMOUNT OF RS.54,95,00,000/-, WHICH WAS TREATED AS 'UNEXPLAINE D CASH CREDITS' FOR THE A. Y 2005-06 UNDER CONSIDERATION, WERE IN FACT CREDITED TO THE A PPELLANT COMPANY'S BOOKS OF ACCOUNTS AS SHARE CAPITAL AND SHARE PREMIUM DURING THE FINANCIA L YEAR 1999-2000 RELEVANT TO THE ASSESSMENT YEAR 2000-2001.HENCE,THE IMPUGNED AMOUNT S ARE FOUND TO COMPRISE THE BROUGHT- FORWARD BALANCE IN THE BOOKS AND CAPITAL ACCOUNT OF THE APPELLANT COMPANY AS ON 31.3.2005. I AM OF THE CONSIDERED VIEW THAT THE FACTS OF THE APP ELLANT'S CASE ARE SQUARELY COVERED BY THE DECISIONS OF THE HON'BLE DELHI HIGH COURT IN CIT VS USHA STUD AGRICULTURAL FARMS LTD. (SUPRA) AND RAJASTHAN HIGH COURT IN CIT V. PARAMESH WAR BOHRA (SUPRA). THEREFORE, ONCE IT IS ESTABLISHED THAT THE IMPUGNED AMOUNT PERTAINED TO T HE PREVIOUS YEAR 1999-2000 RELEVANT TO THE A. Y. 2000-01, THE A.O WAS NOT JUSTIFIED IN LAW IN BRINGING THE SAME AMOUNT OF RS.54,95,00,000/- TO TAX AS UNEXPLAINED CASH CREDIT S FOR A. Y 2005-06. THE A.O IS DIRECTED TO DELETE THE ADDITION OF RS. 54,95,00,000/- MADE TO T HE TOTAL INCOME OF THE APPELLANT COMPANY. THESE GROUNDS ARE ALLOWED. 3 ITA NO.1972/KOL/2016 JELLOTIC SUPPLY PVT. LTD., AY 2005-06 3 AGGRIEVED, THE REVENUE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSEE IS AN INCOME TAX A SSESSEE UNDER PAN AABCJ9581H OF THE TAX WARD 1(4), KOLKATA. THE AO HAS PASSED THE ASSE SSMENT ORDER DATED 21.03.2014 U/S. 147/143(3)/263/144 OF THE ACT. THE AO HAS MADE THE ADDITION U/S. 68 OF THE ACT, THEREFORE, WE WOULD LIKE TO REPRODUCE SEC. 68 OF THE ACT WHICH READS AS UNDER: WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF A N ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT T HE NATURE AND SOURCES THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INC OME OF THE ASSESSEE OF THAT PREVIOUS YEAR. 5. ON PERUSAL OF THE AFORESAID PROVISION OF LAW SHO WS THAT AN ADDITION U/S. 68 OF THE ACT FOR MAKING ADDITION U/S. 68 AS UNEXPLAINED CASH CRE DIT THE FOLLOWING CONDITION HAS TO BE SATISFIED : (A) SUM MUST BE FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR; (B) ON BEING NOT SATISFACTORILY EXPLAINED, SUM SO C REDITED MAY BE TREATED AS INCOME OF THAT PREVIOUS YEAR. THEREFORE, FOR THE PURPOSE OF SEC. 68 OF THE ACT TH E YEAR IN WHICH THE SUM IS CREDITED IN THE BOOKS OF THE ASSESSEE IS VERY RELEVANT. THE MAIN C ONTENTION OF THE ASSESSEE WAS THAT THE IMPUGNED ADDITION AMOUNT/SUM WAS CREDITED IN THE BO OKS OF THE ASSESSEE FOR FINANCIAL YEAR/PREVIOUS YEAR 1999-2000 RELEVANT AY 2000-01. WE NOTE THAT THE AMOUNT ADDED IN THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT I N THE AY 2005-06 WAS THE SAME AMOUNT WHICH WAS CREDITED IN THE BOOKS OF ACCOUNT OF THE A SSESSEE IN THE PREVIOUS YEAR ENDING ON 31.03.2000. IT IS NOT THE CASE OF THE REVENUE THAT THIS AMOUNT OF CREDIT ENTERED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE DURING THE YEAR ENDING O N 31.03.2005. THE ASSESSEES CASE IS THAT THIS IS THE CLOSING CAPITAL AS ON 31.03.2000 AND ON 01.04.2000 IT WAS AN OPENING BALANCE. THEREFORE, THE LD. CIT(A) CONCLUDED THAT WHAT WAS A LREADY CREDITED IN THE BOOKS OF ACCOUNT ENDING ON 31.03.2000 FOR AY 1999-2000 RELEVANT TO A Y 2000-01 CANNOT BE AN UNEXPLAINED CASH CREDIT IN THE BOOKS OF ACCOUNT MAINTAINED FOR THE FY 2004-05 RELEVANT TO AY 2005-06 SO AS TO WARRANT THIS CONSIDERATION AS UNEXPLAINED CASH CREDIT FOR RELEVANT AY 2005-06. 4 ITA NO.1972/KOL/2016 JELLOTIC SUPPLY PVT. LTD., AY 2005-06 4 6. WE ALSO NOTE THAT THE LD. CIT(A) HAD CALLED FOR THE REMAND REPORT FROM THE AO AND AFTER VERIFICATION OF THE DOCUMENTS HAS GIVEN THE R EPORT AS UNDER: 1) IN THE INSTANT CASE, LD. CIT-1, KOLKATA SET A SIDE THE ORDER V/S 147/143(3) DATED 17.05.2010 VIDE HIS ORDER U/S 263 DATED 11.03.2013. IT WAS HELD IN THE ORDER U/S 263 THAT 'THE ASSESSING OFFICER HAS NOT ONLY ILLEGALLY ASSUMED TH E JURISDICTION FOR PASSING ASSESSMENT ORDER FOR THE ASST YEAR 2005-06 BUT HE HAS ALSO GONE ONE STEP FURTHER BY GIVING A BLATANT AN ILLEGAL FINDING IN HIS ASSESSMENT ORDER THAT HE HAS VERIFIE D THE SUBSCRIPTION TO SHARE CAPITAL OF THE COMPANY IN THE ASST YEAR 2000-01 AND FOUND THAT THE RE WAS INVOLVEMENT OF RS.54,95,00,000/- THEREBY ATTEMPTING TO GIVE CERTIFICATE OF LEGITIMAC Y TO THE DUBIOUS CONTRIBUTION TO SHARE CAPITAL CLAIMED TO HAVE BEEN RECEIVED BY THE COMPANY IN THE ASST YEAR 200-01. CONSIDERING THE ABOVE FACTS, ORDER PASSED BY THE A O. IS ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF REVENUE AND THEREFORE, SET ASIDE. THE AO SHALL PASS AFRESH ASSE SSMENT ORDER AS PER LAW'. 2) FOLLOWING THE DIRECTION OF THE LD. PR. CIT-L, KO LKATA THE ASSESSEE COMPANY WAS REQUESTED IN THE SET ASIDE ASSESSMENT PROCEEDING TO PROVE THE YEAR OF RECEIPT OF SHARE CAPITAL AND SHARE PREMIUM AND GENUINENESS OF SUCH TRANSACTION. THE NO TICES WERE ALSO ISSUED TO THE SUBSCRIBER COMPANIES FOR VERIFICATION OF CLAIM OF THE ASSESSEE COMPANY. BUT THERE WAS NO COMPLIANCE ON THE PART OF THE ASSESSEE COMPANY AS WELL AS SUBSCRI PTION COMPANIES AND ACCORDINGLY, THE EX- PARTE ORDER U/S 147/143(3)/263/144 DATED 21.03.201. 4 WAS PASSED AND THE CLAIM OF RECEIPT OF SHARE CAPITAL ALONG WITH SHARE PREMIUM FOR THE TOTA L SUM OF RS. 54,95,00,000/- WAS ADDED TO THE TOTAL INCOME OF ASST YEAR 2005-06 AS UNEXPLAINE D CASH CREDIT OF PREVIOUS YEAR 2004-05. 3) FOLLOWING THE ABOVE ORDER U/S 147/143(3)/263/144 DATED 21.03.2014 THE ASSESSEE COMPANY HAS PREFERRED APPEAL BEFORE YOU AND IN THE COURSE O F APPELLATE PROCEEDING THE REPORT HAS BEEN ASKED FROM THIS OFFICE ON THE SUBMISSION OF THE ASS ESSEE COMPANY MADE BEFORE YOU AND A COPY OF WHICH WAS SENT TO THIS OFFICE. THE FOLLOWING DIR ECTIONS WERE ISSUED BY YOUR HONOUR: '(I) TO SEND YOUR COMMENTS ON THE PAPERS BOOK/WRITT EN SUBMISSION FILED BY AR. OF THE APPELLANT WITHIN 10-DAYS AND/OR (II) TO VERIFY WHETHER APPELLANT'S CONTENTION IS CO RRECT THAT THE IMPUGNED SHARE CAPITAL/UNEXPLAINED CASH CREDITS OF RS.54,95,00,000 /- BROUGHT TO TAX U/S 68 WERE RECEIVED/CREDITED IN BOOKS OF THE APPELLANT COMPANY FOR PREVIOUS YEAR 1999-2000 RELEVANT TO AY. 2000-01.' 4) AS DIRECTED, THE ASSESSEE COMPANY WAS REQUESTED TO FURNISH EVIDENCES IN SUPPORT OF THE CLAIM MADE BEFORE YOU THAT SHARE CAPITAL ALONG WITH SHARE PREMIUM FOR THE TOTAL SUM OF RS.54,95,00,000/- WAS ACTUALLY RECEIVED DURING THE F. Y. 1999-2000. THE ASSESSEE COMPANY FURNISHED COPY OF THE SHARE APPLICATION, COPY OF FO RM 2 BEING DATE OF ALLOTMENT 31.10.1999, A COPY OF BANK STATEMENT FOR THE F. Y. 1999-2000 AND COPY OF THE BANK STATEMENT OF THE SHARE APPLICANTS FOR F. Y. 1999-2000, A COPY OF THE AUDIT ED ACCOUNTS FOR THE F. Y. 1999-2000 TO 2004-05 ALONG WITH THE COPY OF THE ANNUAL RETURN FO R AGM 28.09.2000 FILED WITH THE REGISTRAR COMPANIES IN SUPPORT OF CLAIM. THE ABOVE CLAIM OF T HE ASSESSEE COMPANY WAS ALSO VERIFIED FROM THE SUBSCRIBER COMPANIES THAT THE SHARE CAPITA L ALONG WITH SHARE PREMIUM FOR THE TOTAL SUM OF RS. 54,95,00,000/- WAS ACTUALLY RECEIVED BY THE ASSESSEE COMPANY DURING THE F. Y. 1999-2000 RELEVANT TO AY 2000-01 . 7. FROM A PERUSAL OF THE AFORESAID REMAND REPORT, W E NOTE THAT THE AO HAS PREPARED THE REMAND REPORT AFTER TAKING NOTE OF THE EVIDENCE IN SUPPORT OF THE CLAIM MADE BY THE ASSESSEE 5 ITA NO.1972/KOL/2016 JELLOTIC SUPPLY PVT. LTD., AY 2005-06 5 THAT SHARE CAPITAL ALONG WITH THE SHARE PREMIUM FOR THE TOTAL SUM OF RS.54,95,00,000/- WAS ACTUALLY RECEIVED BY THE ASSESSEE COMPANY DURING TH E FY 1999-2000 I.E. AY 2000-01. THE AO NOTES THAT THE ASSESSEE COMPANY HAD FURNISHED BE FORE HIM THE FOLLOWING DOCUMENTS TO SUBSTANTIATE ITS CLAIM: I) COPY OF THE SHARE APPLICATION, II) COPY OF FORM 2 BEING DATE OF ALLOTMENT ON 31.1 0.1999, III) COPY OF BANK STATEMENT FOR FY 1999-2000 AND IV) COPY OF BANK STATEMENT OF THE SHARE APPLICANTS FOR FY 1999-2000, V) A COPY OF THE AUDITED ACCOUNTS FOR THE FY 1999-2 000 TO 2004-05 ALONG WITH THE VI) COPY OF THE ANNUAL REPORT OF AGM DATED 28.0-9.2 000 FILED WITH THE REGISTRAR OF COMPANIES IN SUPPORT OF THE CLAIM. THE AO HAS ALSO STATED THAT THE AFORESAID CLAIM OF THE ASSESSEE COMPANY WAS ALSO VERIFIED FROM THE SUBSCRIBER COMPANIES THAT THE SHARE CAPITA L ALONG WITH THE SHARE PREMIUM FOR THE TOTAL SUM OF RS.54,95,00,000/- WAS ACTUALLY RECEIVE D BY THE ASSESSEE COMPANY DURING THE FY 1999-2000 RELEVANT TO AY 2000-01. WE NOTE THAT THE ASSESSMENT HAS TO BE DONE ON THE RIGHT PERSON, RIGHT YEAR AND ON RIGHT INCOME AS HEL D BY THE HONBLE SUPREME COURT IN ITO VS. CH. ATCHAIAH 218 ITR 239 (SC). AS PER THE CONS TITUTION OF INDIA, MANDATE (ARTICLE 265) NO TAX SHALL BE LEVIED OR COLLECTED WITHOUT A UTHORITY OF LAW. SO, TAX CAN BE LEVIED ONLY WITH AUTHORITY OF LAW AND IT CAN BE COLLECTED ONLY WITH AUTHORITY OF LAW OR TAX CANNOT BE LEVIED OR COLLECTED IN THE ABSENCE OF THE AUTHORITY OF LAW. THE AUTHORITY OF LAW FLOWS FROM LAW MADE BY PARLIAMENT. EQUALLY IMPORTANT TO KEEP IN MIND THE PRINCIPLE OF RULE OF LAW WHICH IS ONE OF THE BASIC FEATURE OF THE CONSTITUTI ON. THE HONBLE SUPREME COURT IN GLASSROCK ESTATE (P) LTD. VS. STATE OF TN 2010 (10) SCC 96 HAS EXPLAINED THE PRINCIPLE OF RULE OF LAW WHICH IS AS UNDER: THE EXPRESSION RULE OF LAW DESCRIBES A SOCIETY IN WHICH GOVERNMENT MUST ACT IN ACCORDANCE WITH LAW. A SOCIETY GOVERNED BY LAW IS THE FOUNDATION OF PERSONAL LIBERTY. IT IS ALSO THE FOUNDATION OF ECONOMIC DEVELOPMENT. INVES TMENT WILL NOT TAKE PLACE WHERE RIGHTS ARE NOT RESPECTED. IT IS IN THAT SENSE THAT THE EXPRESS ION RULE OF LAW CONSTITUTES AN OVER ARCHING 6 ITA NO.1972/KOL/2016 JELLOTIC SUPPLY PVT. LTD., AY 2005-06 6 PRINCIPLE EMBODIED IN ARTICLE 21, ONE ASPECT OF WHI CH IS EQUALITY. IT IS IN THAT CONTEXT THE HONBLE SUPREME COURT HAS USED THE PHRASE ARTICLE 2 1 READ WITH ARTICLE 14 OF THE CONSTITUTION OF INDIA. 8. THEREFORE, THE PRINCIPLE OF RULE OF LAW MANDATES THE GOVERNMENT I.E, IN THIS CASE THE AO TO ACT ONLY IN ACCORDANCE TO LAW. THE RULE OF LAW IS AN OVER-ARCHING PRINCIPLE OF LAW, WHICH IS A BASIC FEATURE OF THE CONSTITUTION. SO R EAD TOGETHER WITH ARTICLE 265 OF THE CONSTITUTION, THAT NO. TAX SHALL BE LEVIED OR COLL ECTED WITHOUT AUTHORITY OF LAW, MEANS THAT AO SHOULD ASSESS THE INCOME OF THE ASSESSEE ONLY IN ACCORDANCE TO LAW AND, THEREFORE, THE ADDITION U/S. 68 OF THE ACT COULD NOT HAVE BEEN LEG ALLY ADDED IN THE HANDS OF THE ASSESSEE COMPANY IN THIS ASSESSMENT YEAR, SO CONSIDERING THE AOS REMAND REPORT ALL THE DOCUMENTS FILED BY ASSESSEE FOR SUBSTANTIATING THAT SHARE SUB SCRIPTION RELATES TO EARLIER ASSESSMENT YEARS, WE FIND NO INFIRMITY IN THE ORDER OF LD CIT( A) AND CONFIRM THE IMPUGNED ORDER OF LD. CIT(A). 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 05.07.201 8 SD/- SD/- (DR. A.L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 5TH JULY, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-1(4), KOLKATA. 2 RESPONDENT M/S. JELLOTIC SUPPLY PVT. LTD., 8/1, PRINCEP STREET, 3 RD FLOOR, KOLKATA-700 072. 3. THE CIT(A) -1, KOLKATA. (SENT THROUGH E-MAIL) 4. 5. CIT KOLKATA DR , ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY