M/s. Lakshit Construction Pvt. Ltd., Faridabad V. ACIT, Faridabad

ITA 2262/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7183 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 27-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB SENIOR
• Assessee Lawyers: D C GARG
• Keywords: Unexplained expenditure; Opportunity of being heard; Source of fund; Additional evidence; Set aside
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.2262/DEL./2016 (ASSESSMENT YEAR : 2011-12) M/S. LAKSHIT CONSTRUCTIONS P. LTD., VS. ACIT, CIRCL E II, PLOT NO.37, SECTOR 21-C, NEW DELHI. MARBLE MARKET, FARIDABAD. (PAN : AABCL2562N) ITA NO.2787/DEL./2016 (ASSESSMENT YEAR : 2011-12) ACIT, CIRCLE II, VS. M/S. LAKSHIT CONSTRUCTIONS P. LTD., NEW DELHI. PLOT NO.37, SECTOR 21-C, MARBLE MARKET, FARIDABAD. (PAN : AABCL2562N) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI D.C. GARG, CA REVENUE BY : MS. ASHIMA NEB, SENIOR DR DATE OF HEARING : 16.07.2019 DATE OF ORDER : 29.07.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : PRESENT CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE ARE BEING DISPOSED OFF BY WAY OF COMPOSITE ORDER TO AVOID REPETITION OF DISCUSSION. ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 2 2. APPELLANT, M/S. LAKSHIT CONSTRUCTIONS P. LTD., (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL BEING ITA NO.2262/DEL/2016 SOUGHT TO SET ASIDE THE IMPUGNED O RDER DATED 14.03.2016 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS), FARIDABAD QUA THE ASSESSMENT YEAR 2011-12 ON THE GR OUNDS INTER ALIA THAT :- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), FARIDABAD, HAS ERRED IN LAW AS WELL AS O N FACTS AND IN CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ADDITION OF RS.45,00,000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 WITHOUT APPRECIATING THE F ACT THAT THE APPELLANT HAS FULLY DISCHARGED ITS ONUS BY PROVIDING ALL THE INFORMATION SO AS TO PROVE IDENTI TY OF THE SHAREHOLDERS, GENUINENESS OF THE TRANSACTIONS A ND CREDIT WORTHINESS OF THE SHAREHOLDERS. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), FARIDABAD, HAS ERRED IN LAW AS WELL AS O N FACTS AND IN CIRCUMSTANCES OF THE CASE IN UPHOLDING ADDITION UNDER SECTION 68 MADE BY THE ASSESSING OFF ICER WITHOUT CONSIDERING THE VERDICTS OF VARIOUS COURTS INCLUDING HON'BLE SUPREME COURT IN CIT VS LOVELY EXPORTS 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), FARIDABAD, HAS ERRED IN LAW AS WELL AS O N FACTS AND IN CIRCUMSTANCES OF THE CASE IN UPHOLDING ADDITION UNDER SECTION 68 WITHOUT APPRECIATING THE MATERIAL AVAILABLE ON RECORD. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), FARIDABAD, HAS ERRED IN LAW AS WELL AS O N FACTS AND IN CIRCUMSTANCES OF THE CASE IN UPHOLDING ADDITION UNDER SECTION 68 BY RELYING ON THE DECISIO NS WHICH ARE NOT APPLICABLE TO THE FACTS OF THE CASE. ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 3 3. APPELLANT, ACIT, CIRCLE II, FARIDABAD (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL BEIN G ITA NO.2787/DEL/2016 SOUGHT TO SET ASIDE THE IMPUGNED O RDER DATED 14.03.2016 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS), FARIDABAD QUA THE ASSESSMENT YEAR 2011-12 ON THE GR OUNDS INTER ALIA THAT :- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS RIGHT IN DELETING THE DISALLOWANCE OF RS.1,19,63,668/- WHICH WAS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED EXPENDITURE BY IGNORIN G THE FACTS THAT ASSESSEE HIMSELF ADMITTED THAT HE HA S NOT DONE ANY DEVELOPMENT WORK FOR PACL LTD. 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE ISSUES AT HAND RAISED IN BOTH THE APPEALS ARE : THE ASSESSEE IS INTO THE BUSINESS OF INFRASTRUCTURE DEVELOPMENT, REAL ES TATE PROMOTION AND CONTRACTOR-SHIP WHO HAVE CLAIMED RETURNED INCOM E OF RS.87,90,500/- AND CONSEQUENTLY ASSESSMENT WAS FRAM ED AT THE INCOME OF RS.2,52,54,170/- UNDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT). ASSESSING OFFICER (AO) MADE ADDITION OF RS.45,00,000/- ON ACCOUNT OF ASSESSEES UNDISCLOSED INCOME FOR THE PREVIOUS YEAR RELEVANT TO THE YEAR U NDER ASSESSMENT ON THE GROUND THAT SHARE APPLICATION AND SHARE PREM IUM MONEY RECEIVED BY THE ASSESSEE FROM THE SO-CALLED INVESTO R COMPANY, NAMELY, M/S. C.J. EXIM PVT. LTD. AND M/S. MASS SECU RITY PVT. LTD. ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 4 IS NOTHING BUT ACCOMMODATION ENTRY AS THE ASSESSEE HAS FAILED TO BRING ON RECORD REQUISITE EVIDENCE TO SUBSTANTIATE THE CLAIM QUA RECEIPT OF SHARE APPLICATION MONEY/SHARE PREMIUM FR OM AFORESAID TWO COMPANIES BY PRODUCING THEIR PRINCIPAL OFFICERS . 5. AO ALSO MADE ADDITION OF RS.1,19,63,668/- ON ACC OUNT OF DISALLOWANCE OF UNEXPLAINED EXPENDITURE QUA THE CON TRACT OBTAINED FROM M/S. PACL LTD. FOR DEVELOPMENT OF 1507538 CUM OF LAND @ RS.199/- PER CUM ON THE GROUND THAT THE CONTRACT RECEIVED BY THE ASSESSEE FROM M/S. PACL LTD. HAS BEEN FURTHER G IVEN TO TWO PARTIES, NAMELY, M/S. RAJESH PROJECTS INDIA PVT. LT D. AND M/S. GUPTA INFRASTRUCTURE LTD. FOR EQUIVALENT AREAS WHER EAS BEFORE THE INVESTIGATION WING ASSESSEE DEPOSED THAT IT HAS GIV EN CONTRACT FOR DEVELOPMENT OF LAND OF 15,99,814 CUM OF AREA FOR VA LUE OF RS.31,19,63,730/- TO ONLY ONE PARTY I.E. M/S. RAJES H PROJECTS INDIA PVT. LTD.. 6. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITION OF RS.1,19 ,63,668/- MADE BY THE AO ON ACCOUNT OF EXCESSIVE EXPENDITURE, HOWE VER CONFIRMED THE ADDITION OF RS.45,00,000/- MADE BY TH E AO ON ACCOUNT OF UNDISCLOSED INCOME RECEIVED FROM BOGUS S HARE APPLICATION AND SHARE PREMIUM MONEY BY PARTLY ALLOW ING THE ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 5 APPEAL. FEELING AGGRIEVED, BOTH THE ASSESSEE AS WE LL AS REVENUE HAVE COME UP BEFORE THE TRIBUNAL BY WAY OF FILING T HE PRESENT APPEALS. 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. REVENUES APPEAL ITA NO.2787/DEL/2016 GROUND NO.1 8. THE LD. DR FOR THE REVENUE CHALLENGING THE IMPUG NED ORDER PASSED BY THE LD. CIT (A) CONTENDED INTER ALIA THAT LD. CIT (A) HAS IGNORED THE ADMISSION MADE BY SHRI DEEPAK NIMESH, D IRECTOR OF THE ASSESSEE COMPANY; THAT NO WORK HAS BEEN PERFORM ED BY THE ASSESSEE COMPANY RATHER IT WAS PERFORMED BY A SUB-C ONTRACTOR AND AS SUCH, QUESTION OF INCURRING EXPENSES DOES NOT AR ISE; THAT THE LD. CIT (A) HAS NOT CONDUCTED ANY ENQUIRY ON THE BASIS OF STATEMENT OF SHRI DEEPAK NIMESH; THAT THE LD. CIT (A) FURTHER CO NTENDED THAT THIS ISSUE BE REMANDED BACK TO THE LD. CIT (A) TO D ECIDE AFRESH AND RELIED UPON THE DECISION RENDERED BY HONBLE DELHI HIGH COURT IN CIT VS. M/S. JANSAMPARK ADVERTISING AND MARKETING ( P) LTD. IN ITA 525/2014 ORDER DATED 11.03.2015 . ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 6 9. HOWEVER, ON THE OTHER HAND, IN ORDER TO REPEL TH E ARGUMENTS ADDRESSED BY THE LD. DR FOR THE REVENUE, LD. AR FOR THE ASSESSEE CONTENDED INTER ALIA THAT THE AO HAS WRONGLY CONSID ERED THE FIGURE OF CONTRACT CHARGES PAID TO M/S. RAJESH PROJECTS IN DIA P. LTD. IN BOTH THE PROJECTS WHICH WERE REQUIRED TO BE CONSIDE RED IN ONE PROJECT ONLY; THAT THE AO HAS MADE ADDITION ON THE BASIS OF INCORRECT FACTS AND THERE IS ONLY MISMATCH IN THE A CCOUNTING NUMBERS AND RELIED UPON THE ORDER PASSED BY THE LD. CIT (A). 10. UNDISPUTEDLY, ASSESSEE COMPANY HAS GOT CONTRACT FROM M/S. PACL LTD. FOR DEVELOPMENT OF 1507538 CUM OF LAND @ RS.199 PER CUM. IT IS ALSO NOT IN DISPUTE THAT DURING TH E POST-SEARCH ENQUIRY, STATEMENT OF SHRI DEEPAK NIMESH, DIRECTOR OF ASSESSEE COMPANY WAS RECORDED BY THE DDIT, INVESTIGATION. I T IS ALSO NOT IN DISPUTE THAT ADDITION OF RS.1,19,63,668/- HAS BEEN MADE BY THE AO ON ACCOUNT OF UNEXPLAINED/EXCESSIVE EXPENDITURE ON FAILURE OF THE ASSESSEE TO FURNISH ANY EXPLANATION OR EVIDENCE NOR THE BOOKS OF ACCOUNT HAVE BEEN PRODUCED FOR VERIFICATION. 11. IN THE BACKDROP OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN WE EXAMINE THE IMPUGNED ORDER, IT HAS COME ON RECORD THAT THE LD. CIT (A) HAS DELETED THE ADDITION BY ENTERTA INING THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE COMPAN Y AFTER CALLING ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 7 FOR THE REMAND REPORT. PERUSAL OF THE IMPUGNED ORD ER PASSED BY THE LD. CIT (A) FURTHER SHOWS THAT THERE IS NOT EVEN A WHISPER AS TO THE STATEMENT OF SHRI DEEPAK NIMESH, DIRECTOR OF THE AS SESSEE COMPANY RECORDED BY THE DDIT, INVESTIGATION DURING POST SEARCH ENQUIRIES WHEREIN HE HAS ADMITTED THAT THE ASSESSEE COMPANY HAS NOT PERFORMED ANY CONTRACT WORK ALLOWED BY M/S. PAC L LTD. RATHER IT WAS SUB-CONTRACTED TO M/S. RAJESH PROJECT S INDIA P. LTD. AND M/S. GUPTA INFRASTRUCTURE LTD. FOR EQUIVALENT A REA. FOR READY PERUSAL, OPERATIVE PART OF THE FACTS NARRATED BY AO QUA RECORDING OF STATEMENT OF SHRI DEEPAK NIMESH AS TO THE CATEGORIC ADMISSION IS EXTRACTED AS UNDER :- IN THIS CASE INFORMATION WAS RECEIVED FROM INVESTIGATION WING, GURGAON THAT DURING THE COURSE OF SEARCH AND SURVEY PROCEEDINGS ON M/S PACL EVIDENCES HAVE BEEN FOUND WITH REFERENCE TO BOOKING OF BOGUS EXPENSES BY M/S PACL THROUGH CONTRACTORS FOR LAND DEVELOPMENT WORK. THE DDIT (INV.) HAS INFORMED THAT DURING THE COURSE OF POST SEARCH ENQUIRIES THE STAT EMENT OF SHRI DEEPAK NIMESH, DIRECTOR OF THE ASSESSEE COMPAN Y WAS RECORDED WHEREIN SH. DEEPAK NIMESH INFORMED THAT TH EY HAVE RECEIVED CONTRACT FOR AGRICULTURAL LAND DEVELO PMENT FOR AN AMOUNT OF F 30 CRORES WITH PACL LIMITED. IT WAS ADMITTED THAT NO AGRICULTURAL LAND DEVELOPMENT WORK WAS ACTUALLY DONE BY THEM AND THAT SOME AGENT APPROACHE D THEM AND OFFERED A MARGIN OF AROUND 1 %, HAS MADE AVAILABLE AGREEMENTS FOR CONTRACT AND SUB CONTRACT. THE SAID AGENT GOT THOSE AGREEMENT SIGNED FROM BOTH THE PARTIES. THAT AGENT MANAGED ALL THE PAPER WORK RELATED TO TH OSE CONTRACTS. IT WAS ADMITTED THAT THEY HAVE NEVER MET ANY REPRESENTATIVE OF PACL LIMITED AND HE CANNOT CONFIR M WHETHER ANY ACTUAL WORK HAD BEEN DONE RELATED TO AGRICULTURAL LAND DEVELOPMENT FOR PACL LTD. IT WAS FURTHER ADMITTED THAT THEY DO NOT HAVE DETAILS OF THE AGRIC ULTURAL ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 8 LAND TO BE DEVELOPED FOR PACL LTD. DURING THE STATE MENT SH. DEEPAK NIMESH WAS ASKED TO EXPLAIN THE DISCREPA NCY THAT THE COMPANY HAS BEEN AWARDED A CONTRACT FOR DEVELOPING AGRICULTURAL LAND ON 01.10.2010 FOR AN A REA OF 15,07,538 CUM FOR RS.30 CRORES HOW IT IS POSSIBLE TO AWARD FURTHER A SUB CONTRACT FOR AN AREA WHICH IS MUCH MO RE THAN YOU HAVE BEEN AWARDED I.E. 15,99,814 CUM FOR A VALU E OF RS.31,19,63,730/-. ON BEING CONFRONTED THAT IN THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS CLAIMED TO HAVE RECEIV ED CONTRACT FOR 1507538 CUM AND GIVEN CONTRACT TO TWO PARTIES I.E. M/S RAJESH PROJECTS INDIA P. LTD AND TO M/S GU PTA POWER INFRASTRUCTURE LTD FOR EQUIVALENT AREA WHEREA S IN THE INVESTIGATION WING, THE ASSESSEE HAS DEPOSED THAT I T HAS GIVEN CONTRACT FOR DEVELOPMENT OF LAND OF 15,99,814 CUM OF AREA FOR A VALUE OF RS.31,19,63,730/- TO ONLY ONE P ARTY I.E. M/S RAJESH PROJECTS INDIA P. LTD. THE ASSESSEE REIT ERATED ITS EARLIER STAND VIDE LETTER DATED 28.03.2014 YET NO C ONCRETE EVIDENCE IN SUPPORT OF ITS CONTENTION HAS BEEN SUBM ITTED TO AUTHENTICATE ITS CLAIM. 12. FROM THE ENQUIRY CONDUCTED BY DDIT, INVESTIGATI ON, FARIDABAD, U/S 131 OF THE ACT, AVAILABLE AT PAGE 82 OF THE PAPER BOOK, IT IS PROVED THAT ASSESSEE HAS FAILED TO RECO RD HIS REMAINING STATEMENT BEFORE DDIT DESPITE GIVEN REPEATED TELEPH ONIC CALLS WHICH WAS STOPPED TEMPORARILY AT HIS REQUEST ON 19. 11.2013 AT 11.00 AM BUT EXPLAINED THE ADMISSION MADE BY SHRI D EEPAK NIMESH AS TO SUB-CONTRACTING THE AGRICULTURAL LAND DEVELOPMENT WORK TO M/S. RAJESH PROJECTS INDIA P. LTD. AND M/S. GUPTA INFRASTRUCTURE LTD., THESE FACTS SHOW THAT THE ASSE SSEE HAS INTENTIONALLY SUPPRESSED THE MATERIAL FACTS RATHER BASED HIS ENTIRE ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 9 CASE ON THE BASIS OF SMART PAPER WORK. AT THE SAME TIME, LD. CIT (A) HAS LOST SIGHT OFF OF ALL THESE FACTS AND HAS N OT PREFERRED TO CONDUCT ANY ENQUIRY. 13. WE ARE OF THE CONSIDERED VIEW THAT WHEN SHRI DE EPAK NIMESH, DIRECTOR OF THE ASSESSEE COMPANY HAS CATEGO RICALLY ADMITTED THE FACT BEFORE DDIT, INVESTIGATION THAT T HE ASSESSEE COMPANY HAS SUB-CONTRACTED AGRICULTURAL AND DEVELOP MENT WORK OF RS.30 CRORES ALLOTTED BY M/S. PACL LTD. TO M/S. RAJ ESH PROJECTS INDIA P. LTD. AND M/S. GUPTA INFRASTRUCTURE LTD. FO R EQUIVALENT AREA, THE LD. CIT (A) WAS REQUIRED TO MAKE A DISCREET ENQ UIRY INTO THE VERACITY AND IMPLICATION OF THE STATEMENT OF SHRI D EEPAK NIMESH QUA ADDITION OF RS.1,19,63,668/-. WITHOUT CATEGORI C FINDING BY THE LD. CIT (A) ON THIS ISSUE, THE DELETION MADE BY THE LD. CIT (A) CANNOT BE UPHELD. SO, WE ARE OF THE CONSIDERED VIE W THAT THE ORDER OF LD. CIT (A) DELETING THE ADDITION OF RS.1,19,63, 668/- IS LIABLE TO BE SET ASIDE TO DECIDE AFRESH BY MAKING DISCREET EN QUIRY INTO THE STATEMENT MADE BY SHRI DEEPAK NIMESH RECORDED BY DD IT, INVESTIGATION BY PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SO, GROUND NO.1 IS DETERMINED IN FAV OUR OF THE REVENUE FOR STATISTICAL PURPOSES. ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 10 ASSESSEES APPEAL ITA NO.2262/DEL/2016 GROUND NO.1, 2, 3 & 4 14. UNDISPUTEDLY, THE ASSESSEE COMPANY HAS RAISED S HARE CAPITAL TO THE TUNE OF RS.95,00,000/- DURING THE YEAR UNDER ASSESSMENT DETAILED AS UNDER :- SL.NO. NAME AND ADDRESS OF THE SHAREHOLDER PAN TOTAL AMOUNT RECEIVED RS. 1 DEEPAK NIMESH ACYPN4733B 30,00,000 2 RENU NIMESH ADRPN5294K 20,00,000 3 C.J. EXIM PVT. LTD. AACCC1609E 30,00,000 4 MASS SECURITIES PVT. LTD. AAECM6987B 15,00,000 TOTAL 95,00,000 15. UNDISPUTEDLY, AO HAS ACCEPTED SHARE CAPITAL RAI SED FROM SHRI DEEPAK NIMESH AND RENU NIMESH TO THE TUNE OF RS.50,00,000/- BUT MADE ADDITION OF RS.45,00,000/- ON ACCOUNT OF CAPITAL RAISED FROM C.J. EXIM PVT. LTD. AND MASS SE CURITIES PVT. LTD. I.E. RS.30,00,000/- AND RS.15,00,000/- RESPECT IVELY ON THE GROUND THAT ASSESSEE HAS FAILED TO FILE REQUISITE E VIDENCE TO SUBSTANTIATE ITS CLAIM BECAUSE SUMMON SENT TO M/S. C.J. EXIM PVT. LTD. AND MASS SECURITIES PVT. LTD. RECEIVED BACK UN SERVED FROM NOTICE SERVER WITH THE REPORT THAT NO SUCH COMPANY EXISTS AT THE GIVEN ADDRESS NOR THE ADDRESS OF THESE COMPANIES CO ULD BE LOCATED ON LOCAL ENQUIRIES. ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 11 16. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNE D ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT (A) CON TENDED INTER ALIA THAT DURING THE ASSESSMENT PROCEEDINGS, ASSESS EE COMPANY HAS FILED COMPLETE DETAILS VIZ. PAN, COPY OF INCOME-TAX RETURN, AUDITED BALANCE SHEET, BANK STATEMENT, CONFIRMATION STATEME NT IN RESPECT OF ALL THE SHAREHOLDERS, BUT THE AO HAS MADE SELF-CONT RADICTORY FINDINGS WHICH ARE VAGUE AND AMBIGUOUS; THAT RETURN OF SUMMON ISSUED TO THE SAID COMPANIES CANNOT BE THE SOLE FAC TOR TO INVOKE SECTION 68 OF THE ACT AND RELIED UPON THE DECISION RENDERED BY HONBLE APEX COURT IN CASE OF CIT VS. ORISSA CORPOR ATION PVT. LTD. (1986) 52 CTR (SC) 138; THAT DURING THE APPELL ATE PROCEEDINGS, ASSESSEE HAS FILED PROFILE OF THE COMP ANIES, COPY OF INCOME-TAX RETURN, COPY OF AUDITED FINANCIAL STATEM ENTS, COPY OF BANK STATEMENTS AND CONFIRMATION FROM SHAREHOLDERS QUA BOTH THE COMPANIES; THAT THE ASSESSEE COMPANY HAS DISCHARGED ITS ONUS BY PROVING IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE AFORESAID TWO COMPANIES; THAT THE LD. CIT (A) HAS CONFIRMED T HE ADDITION ON THE BASIS OF SURMISES AND RELIED UPON THE DECISION RENDERED BY HONBLE APEX COURT IN CASE OF CIT VS. LOVELY EXPORT S PVT. LTD. 315 ITR 5 AND ALSO RELIED UPON THE DECISIONS IN CIT VS DOLPHIN CANPACK LTD. [283 ITR 190], CIT VS WINSTRAL PETROCH EMICALS PVT ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 12 LTD.[330 ITR 603], CIT VS PRANAV FOUNDATION LTD. [1 17 ITR 227] , CIT VS DATAWARE PVT LTD., UMBRELLA PROJECTS PVT. LTD. VS ITO (ITA NO. 5955-DEL-2014, DATE OF ORDER 23.02.201 8) AND MOTI ADHESIVE PVT. LTD. VS ITO (ITA NO. 3133-DEL-2018, D ATE OF ORDER 25.06.2018) . 17. HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVE NUE TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR FOR THE ASSES SEE CONTENDED INTER ALIA THAT WHEN THE ASSESSEE HAS FAILED TO PRO VE THE EXISTENCE OF M/S. C.J. EXIM PVT. LTD. AND MASS SECURITIES PVT. L TD. REPORTED TO BE NOT EXISTING AT THE GIVEN ADDRESS, THE QUESTION OF THEIR GENUINENESS AND CREDITWORTHINESS DOES NOT ARISE; TH AT ASSESSEE HAS ALSO FAILED TO PRODUCE DIRECTORS OF THE SAID COMPAN IES DESPITE AVAILING NUMEROUS OPPORTUNITIES; THAT MERELY COMPLE TING THE PAPER WORK DOES NOT PROVE THE GENUINENESS OF THE TRANSACT ION; THAT FROM THE BANK STATEMENT OF M/S. C.J. EXIM PVT. LTD., IT IS NOTICED THAT THIS COMPANY HAS MADE PAYMENT OF RS.30,00,000/- BY RTGS ON 21.02.2011 TO THE ASSESSEE COMPANY AS SHARE CAPITAL ; THAT M/S. C.J. EXIM PVT. LTD. RECEIVED FUNDS OF RS.30,00,000/- ON TRANSFER FROM DIFFERENT ACCOUNTS ON 21.02.2011 ITSELF WHICH IS NO THING BUT CIRCULATION OF ASSESSEES OWN MONEY WHICH PROVED TH AT THE ENTIRE ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 13 TRANSACTION WAS BOGUS; AND SUPPORTED THE ORDER PASS ED BY THE AO AND CONFIRMED BY THE LD. CIT (A). 18. PERUSAL OF THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) PARTICULARLY PARA NOS.21, 22 & 23 GO TO PROVE THAT A DETAILED ENQUIRY HAS BEEN CONDUCTED BY THE LD. CIT (A) WHICH PROVES INTER ALIA THAT M/S. C.J. EXIM PVT. LTD. WHICH ALLEGED TO HAVE INVESTED AN AMOUNT OF RS.30,00,000/- IN THE SHARE CAPITAL IN TH E ASSESSEES COMPANY AND HAS MAINTAINED ITS ACCOUNT WITH DENA BA NK, FARIDABAD; THAT FROM THE BANK STATEMENT PERUSED BY THE LD. CIT (A), EXTRACTED AT PAGES 16 TO 19 OF THE IMPUGNED ORDER, IT IS PROVED THAT THOUGH M/S. C.J. EXIM PVT. LTD. HAS TRANSFERRED THE AMOUNT OF RS.30,00,000/- TO THE ASSESSEE COMPANY THROUGH RTGS ON 21.02.2011 BUT FURTHER ENQUIRY REVEALED THAT M/S. C .J. EXIM PVT. LTD. HAS RECEIVED RS.30,00,000/- ON 21.02.2011 ITSE LF BY WAY OF FIVE DIFFERENT ENTITIES IN WHOSE ACCOUNT CASH AMOUN T OF RS.30,00,000/- WAS DEPOSITED ON 21.02.2011 ITSELF; THAT WHEN THE ASSESSEE HAS CONFRONTED WITH ALL THESE FACTS BY THE DL. CIT (A) ON 07.03.2016 NO EXPLANATION HAS BEEN FURNISHED; THAT IT HAS ALSO COME ON RECORD THAT ALL FIVE CHEQUES ISSUED BY DIFF ERENT PERSONS/ ENTITIES IN FAVOUR OF M/S. C.J. EXIM PVT. LTD. WERE IN THE SAME HANDWRITING; THAT WHEN THE NOTICE WAS ISSUED TO M/S . C.J. EXIM ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 14 PVT. LTD. AND MASS SECURITIES PVT. LTD. THROUGH A N OTICE SERVER, THE SAME WAS RETURNED BACK WITH THE REPORT THAT NO SUCH COMPANIES/ ENTITIES ARE IN EXISTENCE AT THE GIVEN ADDRESS; THA T THE ASSESSEE COMPANY DESPITE AVAILING NUMEROUS OPPORTUNITIES HA S FAILED TO PRODUCE PRINCIPAL OFFICER OF M/S. C.J. EXIM PVT. LT D. AND MASS SECURITIES PVT. LTD. BEFORE THE AO TO RECORD THEIR STATEMENTS; THAT PREMIUM OF RS.40 PER SHARE HAS BEEN PAID ON THE SHA RE OF RS.10 PER SHARE BY THE ASSESSEE COMPANY WHICH IS A 10 YEAR OL D COMPANY ONLY. 19. THE CONTENTION OF THE LD. AR FOR THE ASSESSEE T HAT THE ASSESSEE COMPANY IS NOT SUPPOSED TO PROVE THE SOURC E OF SOURCE WHO HAS DULY PROVED GENUINENESS, IDENTITY AND CREDI TWORTHINESS OF THE INVESTOR COMPANY IS NOT TENABLE BECAUSE EXCEPT THE SMART PAPER WORK THERE IS NOT AN IOTA OF EVIDENCE APPEALING THE ORDINARY HUMAN MIND THAT THE COMPANIES WHICH ARE HAVING NO PHYSICA L EXISTENCE HAVE INVESTED HUGE AMOUNT WITH THE ASSESSEE COMPANY WHO HAVE RECEIVED MONEY BY WAY OF CHEQUES FROM FIVE PERSONS, IN WHOSE ACCOUNT CASH DEPOSIT WAS MADE OF THE EQUIVALENT AMO UNT A DAY PRIOR TO ISSUANCE OF THE CHEQUE. 20. SO FAR AS ADDITION OF RS.30,00,000/- BY M/S. C. J. EXIM PVT. LTD. IS CONCERNED, WE ARE OF THE CONSIDERED VIEW TH AT DEPOSIT OF ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 15 RS.30,00,000/- BY M/S. C.J. EXIM PVT. LTD. AS SHARE APPLICATION MONEY/PREMIUM WITH THE ASSESSEE COMPANY IS NOTHING BUT A ROUND TRIPPING OF ASSESSEES OWN MONEY BECAUSE PHYSICAL E XISTENCE OF M/S. C.J. EXIM PVT. LTD. HAS NOT BEEN PROVED NOR DI RECTOR/PRINCIPAL OFFICER OF COMPANY HAS BEEN PRODUCED BEFORE THE AO WHICH LEADS TO THE CONCLUSION THAT THE TRANSACTION IS BOGUS. 21. IDENTICAL ISSUE HAS BEEN DECIDED BY HONBLE APE X COURT AGAINST THE ASSESSEE IN CIT VS. NRA IRON AND STEEL (P.) LTD. (2019) 412 ITR 161 (SC) CASE BY RETURNING FOLLOWING FINDINGS :- HELD, ALLOWING THE APPEAL, THAT THE ASSESSING OFFI CER HAD CONDUCTED DETAILED ENQUIRY WHICH REVEALED THAT (I) THERE WAS NO MATERIAL ON RECORD TO PROVE, OR EVEN REMOTELY SUGGE ST, THAT THE SHARE APPLICATION MONEY WAS RECEIVED FROM INDEPENDE NT LEGAL ENTITIES. THE SURVEY REVEALED THAT SOME OF THE INVE STOR COMPANIES WERE NON-EXISTENT, AND HAD NO OFFICE AT THE ADDRESS MENTIONED BY THE ASSESSEE. THE GENUINENESS OF THE TRANSACTION WA S FOUND TO BE COMPLETELY DOUBTFUL. (II) THE ENQUIRIES REVEALED TH AT THE INVESTOR COMPANIES HAD FILED RETURNS FOR A NEGLIGIBLE TAXABL E INCOME, WHICH WOULD SHOW THAT THE INVESTORS DID NOT HAVE TH E FINANCIAL CAPACITY TO INVEST FUNDS RANGING BETWEEN RS. 90,00, 000 TO RS. 95,00,000 IN THE ASSESSMENT YEAR 2009-10, FOR PURCH ASE OF SHARES AT SUCH A HIGH PREMIUM. (III) THERE WAS NO EXPLANAT ION WHATSOEVER OFFERED AS TO WHY THE INVESTOR COMPANIES HAD APPLIED FOR SHARES OF THE ASSESSEE AT A HIGH PREMIUM OF RS. 190 PER SHARE, EVEN THOUGH THE FACE VALUE OF THE SHARE WAS RS. 10 PER SHARE. (IV) FURTHERMORE, NONE OF THE SO-CALLED INVE STOR COMPANIES ESTABLISHED THE SOURCE OF FUNDS FROM WHIC H THE HIGH SHARE PREMIUM WAS INVESTED. (V) THE MERE MENTION OF THE INCOME-TAX FILE NUMBER OF AN INVESTOR WAS NOT SUFFI CIENT TO DISCHARGE THE ONUS UNDER SECTION 68 OF THE ACT. THE APPELLATE AUTHORITIES HAD IGNORED THE DETAILED FINDINGS OF TH E ASSESSING OFFICER FROM THE FIELD ENQUIRY AND INVESTIGATIONS C ARRIED OUT BY HIS OFFICE AND ERRONEOUSLY HELD THAT MERELY BECAUSE THE ASSESSEE HAD FILED ALL THE PRIMARY EVIDENCE, THE ONUS ON THE ASSESSEE STOOD DISCHARGED. THE INVESTOR COMPANIES WHICH HAD FILED INCOME-TAX RETURNS WITH A MEAGRE OR NIL INCOME HAD TO EXPLAIN HOW THEY HAD INVESTED SUCH HUGE SUMS OF MONEY IN THE ASSESSEE. C LEARLY THE ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 16 ONUS TO ESTABLISH THE CREDITWORTHINESS OF THE INVES TOR COMPANIES WAS NOT DISCHARGED. THE ENTIRE TRANSACTION SEEMED B OGUS, AND LACKED CREDIBILITY. THE FIELD ENQUIRY CONDUCTED BY THE ASSESSING OFFICER REVEALED THAT IN SEVERAL CASES THE INVESTOR COMPANIES WERE FOUND TO BE NON-EXISTENT, AND THE ONUS TO ESTA BLISH THE IDENTITY OF THE INVESTOR COMPANIES, WAS NOT DISCHAR GED BY THE ASSESSEE. ON THE FACTS, THE ASSESSING OFFICER WAS J USTIFIED IN ADDING BACK THE AMOUNTS TO THE ASSESSEE'S INCOME. 22. SO, IN THESE CIRCUMSTANCES, WE HAVE NO OPTION E XCEPT TO UPHOLD THE ORDER PASSED BY THE LD. CIT (A) WHO HAS RIGHTLY CONFIRMED THE ADDITION QUA SHARE APPLICATION/ SHARE PREMIUM OF RS.30,00,000/- IN CASE OF M/S. C.J. EXIM PVT. LTD. 23. HOWEVER, SO FAR AS ADDITION MADE BY THE AO AND CONFIRMED BY LD. CIT (A) QUA AMOUNT OF RS.15,00,000/- INVESTE D BY MASS SECURITIES PVT. LTD. IS CONCERNED, THE LD. CIT (A) HAS NOT DISCUSSED ANY EVIDENCE BY CONDUCTING THE ENQUIRY RATHER CONFI RMED THE ADDITION MADE BY THE AO MERELY BY APPLYING THE EVID ENCE AVAILABLE ON RECORD IN CASE OF M/S. C.J. EXIM PVT. LTD. IN OTHER WORDS, THE LD. CIT (A) HAS NOT DECIDED THE ISSUE AS TO CONFIRMING THE ADDITION OF RS.15,00,000/- INVESTED BY MASS SEC URITIES PVT. LTD. BY PASSING A SPEAKING ORDER. CASE LAWS RELIED UPON BY THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS AND CIRCUM STANCES OF THE CASE. SO, IN THESE CIRCUMSTANCES, THIS ISSUE IS SE T ASIDE TO THE FILE OF LD. CIT (A) TO DECIDE AFRESH BY PROVIDING ADEQUATE OPPORTUNITY OF ITA NO.2262/DEL./2016 ITA NO.2787/DEL./2016 17 BEING HEARD TO THE ASSESSEE. SO, GROUNDS NO.1, 2, 3 & 4 ARE PARTLY DETERMINED IN FAVOUR OF THE ASSESSEE FOR STATISTICA L PURPOSES. 24. RESULTANTLY, THE APPEAL FILED BY THE REVENUE IN ITA NO. 2787/DEL/2016 IS ALLOWED FOR STATISTICAL PURPOSES A ND THE APPEAL FILED BY THE ASSESSEE IN ITA NO.2262/DEL/2016 IS AL SO PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF JULY, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 29 TH DAY OF JULY, 2019/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), FARIDABAD. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.