ITO, WARD-10(1), Kolkata, Kolkata V. M/s Mastermind Shoppers, Kolkata

ITA 2278/KOL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3045 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K TULSIYAN
• Assessee Lawyers: P K SRIHARI
• Keywords: Unexplained cash credit; Unexplained investment; Source of fund; Question of law; Accommodation entries; Onus to prove
• Section: 271(1)(c); 143(3); 133(6); 195; 131; 68; 69; 263

Judgement Text

1 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH, C AT KOLKATA () . . , . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 2278/KOL/2016 ASSESSMENT YEAR: 2012-13 ITO, WARD-10 (1), KOLKATA VS. M/S. MASTERMIND SHOPP ERS PVT. LTD. (PAN: AAHCM 3534 B) APPELLANT RESPONDENT DATE OF HEARING 18.12.2018 DATE OF PRONOUNCEMENT 27.02.2019 FOR THE APPELLANT SHRI P.K. SRIHARI, CIT(DR) FOR THE RESPONDENT SHRI A.K. TULSIYAN, FCA ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) 4, KOLKATA DATED 04.10.2016 FOR ASSESSMENT YEAR 2012-1 3. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION MADE BY THE AO ON SHARE CAPITAL AND SHARE PREMIUM ISSUED BY THE ASSES SEE U/S 68 OF THE ACT. 2. THE BRIEF FACT OF THE CASE IS THAT THE AO NOTED THAT THE ASSESSEE COMPANY HAVE RECEIVED SHARE CAPITAL OF RS. 1,05,40,000/- AFTER E QUITY SHARE OF 1 EACH AT A PREMIUM OF RS. 10,95,60,000/-, TOTALING RS. 12,01,00,000/- DURING THE YEAR UNDER CONSIDERATION. ACCORDING TO THE AO FROM THE DOCUMENTS AVAILABLE ON RECORD, I DENTITY AND CREDITWORTHINESS OF THE INVESTOR COULD NOT BE PROPERTY VERIFIABLE, SO HE IS SUED SUMMONS U/S 131 TO THE DIRECTORS OF THE ASSESSEE COMPANY FOR PERSONAL DEPOSITIONS AND A LSO TO PRODUCE THE DETAILS ON 27.02.2015. 1. PROOF OF PHOTO IDENTITY / PAN CARD 2. LIST OF COMPANIES WHERE YOU WERE DIRECTOR/SHAREH OLDERS FROM THE A.Y. 2008-09 TILL DATE WITH DATES OF APPOINTMENTS THERETO WITH YOUR D IN. 3. PROOF OF ACKNOWLEDGMENT OF FILING YOUR PERSONAL IT RETURN, COPIES OF ACCOUNTS. 4. PROOF OF YOUR ADDRESS. 2 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 5. COPY OF BANK STATEMENT OF YOUR COMPANY REFLECTIN G THE ALL TRANSACTION DURING THE PERIOD 01.04.2011 TO 31.03.2012 WITH COMPLETE NARRA TION & SOURCE OF FUND. 6. PRODUCE THE DIRECTOR OF INVESTORS COMPANY ALONG WITH THEIR PROOF OF PHOTO IDENTITY AND COPY OF BANK STATEMENT OF THEIR COMPANY REFLECT ING THE ALL TRANSACTION DURING THE PERIOD 01.04.2011 TO 31.03.2012 WITH COMPLETE NARRA TION & SOURCE OF FUND. 7. A WRITE UP ON JUSTIFICATION OF LARGE SHARE PRE MIUM. 3 ACCORDING TO THE AO, NONE RESPONDED TO THE SUMMON S SO AND ALSO THE ASSESSEE FAILED TO PRODUCE INVESTORS / SHARE SUBSCRIBERS BEF ORE HIM SO HE MADE AN ADDITION OF RS. 12,01,00,000/-. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO DELETE THE SAME. AGGRIEVED THE REVENUE I S BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS ALONG WITH HEAVY PAPER BOOK CONTAINING 299 PAGES. WE NOTE THAT THE ASSESSE E-COMPANY WAS INCORPORATED WITH THE MAIN OBJECT OF INVESTING IN SHARES AND SECURITIES. WE NOTE THAT THE ASSESSEE HAS RAISED AN EQUITY SHARE CAPITAL AMOUNTING TO RS. 1,05,40,000/- AND A PREMIUM OF RS. 10,95,60,000/- WHICH WERE RECEIVED BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES AND DULY REFLECTED IN THE BANK STATEMENT FILED AT PAGE 42, 80, 122, 164, 208, 252, 299 OF PAPER BOOK. BEFORE THE LD. CIT(A) THE ASSESSEE HAD FILED THE RETURN OF ALL OTMENT OF SUCH SHARE WERE FILED WITH THE REGISTRAR OF COMPANIES IN FORM NO. 2 FILED WITH ROC ALONG WITH THE LIST OF ALLOTTEES FROM PAGES 25 TO 36 OF PAPER BOOK. IT WAS BROUGHT TO OUR NOTICE THE DETAILS PERTAINING TO SHARE SUBSCRIBER FILED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HOWEVER THE AO IN THE ASSESSMENT ORDER SAYS ASSESSEE DID NOT CO MPLY WITH THE DIRECTION OF AO. IT WAS BROUGHT TO OUR NOTICE THAT THE SHARE CAPITAL WERE R AISED INCOMPLIANCE WITH THE PROVISIONS OF THE COMPANIES ACT, 1956. FROM THE DETAILS FILED BEF ORE US IT TRANSPIRES THAT THE SHARE SUBSCRIBING ENTITIES WERE INCORPORATED AS PER COMPA NIES ACT, 1956 AND WERE REGULAR INCOME TAX ASSESSEES AND THEIR INCOME IS ASSESSED T O TAX AT CALCUTTA. WE NOTE THAT THE SHARE APPLICATION MONEY WAS RECEIVED THROUGH ACCOUNT PAYE E AND THE RELEVANT BANK STATEMENT HIGHLIGHTING SHARE APPLICATION MONEY RECEIVED BY TH E ASSESSEE-COMPANY HAS BEEN FILED IN THE PAPER BOOK. IT WAS BROUGHT TO OUR NOTICE THAT O NLY BECAUSE THE DIRECTOR OF THE ASSESSEE- COMPANY COULD NOT APPEAR BEFORE THE AO PURSUANT TO THE 131 NOTICE ISSUED BY HIM, THE AO DREW ADVERSE INFERENCE AGAINST THE ASSESSEE. ACCORD ING TO THE ASSESSEE, THE DIRECTOR OF THE COMPANY WAS OUT OF TOWN FOR OFFICIAL TOUR AND THERE FORE, HE COULD NOT APPEAR BEFORE THE 3 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 AO. IT WAS BROUGHT TO OUR NOTICE THAT THE DETAILS C ALLED FOR BY AO WERE AVAILABLE IN THE RECORDS OF THE AO DURING THE COURSES OF ASSESSMENT PROCEEDINGS INCOMPLIANCE TO THE NOTICE ISSUED U/S 142(1). THE LD. CIT(A) HAVE GONE THROUGH THESE DOCUMENTS AFORESTATED AND HAS GIVEN RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER: 4.2 I HAVE CONSIDERED THE ISSUE RAISED IN THE ASSE SSMENT ORDER IN LIGHT OF THE ARGUMENTS MADE BY THE APPELLANT. THE ONLY ISSUE INV OLVED IS WHETHER THE SHARE CAPITAL ALONG WITH SHARE PREMIUM MONEY RECEIVED AMO UNTING TO RS.12,01,00,000/- ON ISSUE OF EQUITY SHARES INVITE THE MISCHIEF OF THE PROVISIONS OF S. 68 OF THE ACT OR NOT. I FIND FROM RECORD THAT DU RING THE YEAR THE ASSESSEE COMPANY RAISED SHARE CAPITAL OF RS. 1,05,40,000/- A S WELL AS SHARE PREMIUM OF RS. 10,95,60,000/- FROM VARIOUS SHARE SUBSCRIBERS W HO ARE CORPORATE ENTITIES. THE AO HAS DISCUSSED THIS ISSUE AT PAGE 1,2 & 3 OF THE ASSESSMENT ORDER. FOR THE SAKE OF BREVITY SECTION 68 OF THE ACT IS REPRODUCED AS FOLLOWS: - '68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESS ING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE A SSESSEE OF THAT PREVIOUS YEAR.' 4.3 ACCORDING TO THIS SECTION, IF IDENTITY, CREDITW ORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION IS NOT PROVED OR THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SA TISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN THE INSTANT CASE, THE APPELLANT HAD DISCLOSED RECEIPT OF SHARE CAPITAL MONEY INCLUDING SHARE PREMIUM MONEY OF RS. 12,01,00,000/- FROM VARIOUS SH ARE SUBSCRIBERS, WHO ARE CORPORATE BODIES. IT IS OBSERVED THAT THE ADDITION WAS MADE WITH THE PREDETERMINED MINDSET THAT SHARE PREMIUM RECEIVED BY THE APPELLAN T IS NOT GENUINE AND THERE IS NO JUSTIFICATION FOR SUCH HIGH SHARE PREMIUM. THE AO A LSO HELD THAT CREDITWORTHINESS OF THE SHAREHOLDERS DID NOT EXIST AND THE TRANSACTIONS WER E AN EYEWASH ONLY FOR BRINGING ITS BLACK MONEY INTO CIRCULATION WITHOUT PAYING ANY TAX TO THE REVENUE. I FIND THAT EACH OF THE SHARE SUBSCRIBERS ARE REGULARLY ASSESSED TO INC OME TAX; AND THE INVESTMENTS MADE BY EACH OF THEM ARE DULY AND FULLY REFLECTED IN THE IR AUDITED ACCOUNTS AS WELL AS THEIR INCOME TAX RETURN FILED IN THE PAPER BOOK. THE APPE LLANT HAD DULY FILED ITS RETURN OF TOTAL INCOME U/S 139(1) OF THE ACT IN RESPECT OF THE ASSE SSMENT YEAR 2012-13. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE, APPELLANT IN RESPO NSE TO THE REQUISITIONS MADE BY THE AO, FROM TIME TO TIME PRODUCED ITS AUDITED BOOKS OF ACCOUNTS, FILED COPIES OF ITS AUDITED ANNUAL ACCOUNTS INCLUDING VARIOUS DETAILS AND OTHER DOCUMENTS AS DESIRED BY THE AO. THE DETAILS AND DOCUMENTS SO PRODUCED AND FILED WIT H THE AO INCLUDED, INTER ALIA, FULL DETAILS OF EACH OF THE SHARE APPLICANTS, WHO HAD SU BSCRIBED TO THE AGGREGATE SHARE CAPITAL AS WELL AS SHARE PREMIUM MONEY RAISED BY TH E APPELLANT DURING THE ASSESSMENT YEAR UNDER APPEAL. THE AO, ON RECEIPT OF THE AFORES AID DETAILS FROM THE APPELLANT, DID NOT CONDUCT ANY ENQUIRY. 4 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 4.4 IT IS FURTHER OBSERVED THAT THE CORPORATE SHARE SUBSCRIBERS ARE REGISTERED UNDER THE COMPANIES ACT, 1956 AND ARE ON THE RECORDS OF REGIS TRAR OF COMPANIES FUNCTIONING UNDER MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA AND THE INDIVIDUALS ARE HAVING PERMANENT ACCOUNT NUMBERS. IN FACT, THE DETA ILS FILED BEFORE THE AO INCLUDED, THEIR PERMANENT ACCOUNT NUMBERS ALONG WITH THE ACKN OWLEDGMENT OF SUBMISSION OF THEIR RETURN OF INCOME AND FURNISHED AUDITED FINANC IAL STATEMENTS WHICH IN MY HUMBLE OPINION PROVES THEIR IDENTITIES. IT IS ALSO OBSERVE D THAT EACH OF THE SHARE APPLICANTS MAINTAINED BANK ACCOUNTS. FURTHER, EACH OF THE SHAR E SUBSCRIBER HAS DULY DISCLOSED THE FACT THAT THEY HAD SUBSCRIBED TO THE SHARES ISSUED BY THE APPELLANT AT A PREMIUM; AND THAT SUCH TRANSACTIONS WERE DULY REFLECTED IN THEIR RESPECTIVE BOOKS OF ACCOUNTS, AS WELL AS IN THEIR AUDITED BALANCE SHEETS. THESE FACTS, IN MY OPINION, CLEARLY PROVE THE GENUINENESS OF THE TRANSACTIONS ALSO. 4.5 THE EVIDENCES FURNISHED ON RECORD BY THE APPELL ANT, IN MY OPINION, CLEARLY PROVE THEIR SOURCE OF FUNDS, AND THEIR CAPACITY FOR MAKIN G SUCH PAYMENTS AND ACCORDINGLY, THE CRITERIA OF THEIR CREDITWORTHINESS IS ALSO PROVED. IT IS ALSO OBSERVED THAT THE APPELLANT HAS FILED FOR ALL THE SHARE SUBSCRIBER COPIES OF TH EIR INCOME TAX ACKNOWLEDGMENTS EVIDENCING FILING OF INCOME TAX RETURNS BY EACH OF THEM, COPIES OF THEIR AUDITED ACCOUNTS INCLUDING BALANCE SHEETS WHEREIN SUCH INVESTMENTS M ADE BY EACH OF THEM IN THE SUBSCRIPTION OF SHARE CAPITAL ISSUED BY THE APPELLA NT ARE DULY REFLECTED AS ALSO COPIES OF THEIR BANK STATEMENTS FOR THE RELEVANT PERIOD FROM WHICH SUCH SUBSCRIPTION MONIES WERE PAID BY THEM RESPECTIVELY AND COPY OF THE ALLOTMENT ADVISE RECEIVED BY THEM FROM THE APPELLANT IN RESPECT OF SHARES ALLOTTED TO THEM. TH E RETURN OF ALLOTMENT AS WELL AS THE ANNUAL RETURN FOR THE ASSESSMENT YEAR 2012-13 FILED BY THE APPELLANT WITH THE REGISTRAR OF COMPANIES, MINISTRY OF CORPORATE AFFAIRS, FURTHE R CATEGORICALLY PROVES THE FACT OF ALLOTMENT OF SHARES TO THE SHARE APPLICANTS. IT IS FURTHER OBSERVED THAT THE NET WORTH OF THE EACH OF THE SHARE APPLICANTS, AS DISCLOSED IN T HEIR BALANCE SHEETS, FAR EXCEEDED THE AMOUNT OF INVESTMENTS MADE BY THEM IN THE SHARES OF THE APPELLANT COMPANY. IT IS ACCORDINGLY OBSERVED THAT IT ADEQUATELY PROVE THEIR CREDITWORTHINESS TO MAKE INVESTMENT IN THE SHARE CAPITAL OF THE APPELLANT. THE AFORESAI D FACTS UNDERLINED BY EVIDENCES CLEARLY PROVE THE IDENTITY ,IF THE SHARE APPLICANTS, THEIR CAPACITY AND SOURCE OF FUNDS, AS WELL AS THE GENUINENESS OF THE TRANSACTIONS IN RELATION TO THE SHARE CAPITAL ISSUED BY THE APPELLANT, WHICH WAS SUBSCRIBED TO BY EACH OF THEM. THUS, IT IS PROVED BEYOND ANY DOUBT OR DISPUTE THAT THE SHARE APPLICANTS ARE ACTU ALLY FOUND TO HAVE SUBSCRIBED TO THE SHARE CAPITAL ISSUED BY THE APPELLANT, IN THE IMPUG NED PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. HOWEVER, THE AO HAD N OT BROUGHT THESE INDISPUTABLE FACTS ON RECORD BUT ACTED ON HIS WHIMS AND FANCIES. IT IS OBSERVED THAT THE BURDEN WHICH LAY ON THE APPELLANT, IN RELATION TO S. 68 OF THE A CT, HAS BEEN DULY DISCHARGED BY IT AND NOTHING FURTHER REMAINS TO BE PROVED BY IT ON THE I SSUE. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE IDENTITIES OF THE SHARE APPLICANTS ARE NOT PROVED AND/OR THAT THE INTRODUCTION OF SHARE CAPITAL BY THEM WAS NOT GENUI NE AND/OR THE SOURCE OF INVESTMENT WAS NOT FULLY EXPLAINED TO THE SATISFACTION OF THE AO. SINCE THE CONDITIONS PRECEDENT FOR DISCHARGING OF BURDEN UNDER THE PROVISIONS OF S. 68 OF THE ACT ARE MET WITH ADEQUATE EVIDENCE, THE ADDITION MADE UNDER SUCH PRETEXT DESE RVES TO BE DELETED. 5 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 4.6 A CLOSE PERUSAL OF OBSERVATIONS AND FINDINGS RE CORDED IN THE ASSESSMENT ORDER DOES NOT SHOW THAT DOCUMENTS FILED BY THE APPELLANT TO E STABLISH IDENTITY AND CREDITWORTHINESS OF SHARE SUBSCRIBERS AS WELL AS GENUINENESS OF TRAN SACTIONS HAVE NEITHER BEEN PROVED TO BE BOGUS NOR THERE IS ANY ATTEMPT TO DISPROVE THESE DOCUMENTS AFTER ENQUIRY. 4.7 A CLOSE PERUSAL OF OBSERVATIONS AND FINDINGS RE CORDED IN THE ASSESSMENT ORDER DOES NOT SHOW THAT DOCUMENTS FILED BY THE APPELLANT TO E STABLISH IDENTITY AND CREDITWORTHINESS OF SHARE SUBSCRIBERS AS WELL AS GENUINENESS OF TRAN SACTIONS HAVE NEITHER BEEN PROVED TO BE BOGUS NOR THERE IS ANY ATTEMPT TO DISPROVE THESE DOCUMENTS AFTER ENQUIRY. 4.8 FURTHER THE HON'BLE SUPREME COURT IN CIT VS. LO VELY EXPORTS LTD. (2008) 216 CTR 195 (SC) WHEREIN HAS HELD AS UNDER: '2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UN DISCLOSED INCOME UNDER SECTION 68 OF IT ACT, 1961? WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITI ON FOR THE SIMPLE REASON THAT 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 F REE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW.' IN OTHER WORDS, IT IS OBSERVED THAT IF SHARE CAPITA L IS RECEIVED BY AN ASSESSEE FROM SUBSCRIBERS, WHOSE NAMES ARE GIVEN TO THE AO, ARE A LLEGEDLY BOGUS, THEN THE REVENUE IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSME NTS IN ACCORDANCE WITH LAW. THE FACTS OF THE PRESENT ARE ON A BETTER FOOTING TO THE ONE A S DECIDED ABOVE. IN THE INSTANT CASE, ALL THE SHARE APPLICANTS HAD CONFIRMED THEIR INVESTMENT WITH THE APPELLANT AND AS SUCH, THERE WAS NO BASIS FOR THE AO TO COME TO ANY ADVERS E CONCLUSION AND ACCORDINGLY, THE ENTIRE AMOUNT RECEIVED BY THE APPELLANT ON ACCOUNT OF SHARE APPLICATION AS WELL AS SHARE PREMIUM MONIES CANNOT BE REGARDED AS UNDISCLO SED INCOME U/S 68 OF THE ACT. 4.9 THEREFORE, CONSIDERING THE TOTALITY OF THE FACT S AND CIRCUMSTANCES OF THE CASE, I FIND SUBSTANCE IN THE ARGUMENT OF THE AR THAT THE APPELL ANT HAS MADE ITS CASE THAT THE IDENTITY OF THE SHARE APPLICANTS ARE ESTABLISHED BE YOND DOUBT AND ON ENQUIRIES MADE BY THE AO THERE IS NO ADVERSE FINDING REACHED ON THIS ASPECT. ADMITTEDLY, ALL THE SHARE APPLICANTS ARE EXISTING ASSESSEES UNDER THE ACT WHI CH ESTABLISH THE IDENTITY AND AUTHENTICITY OF THE SHARE APPLICANTS. ABOUT THE GEN UINENESS OF THE TRANSACTIONS THERE IS NO ANY ADVERSE FINDING IN THE ASSESSMENT ORDER WHIC H IS DISTINCT TO THE FACTS BROUGHT ON RECORD BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDING. THE CREDITWORTHINESS OF THE SHARE APPLICANTS AS REGARDS THEIR SUBSCRIPTION TO THE SHARE CAPITAL IS PROVED BY SUBM ISSION OF THEIR RETURN, AUDITED ANNUAL ACCOUNTS, THEIR BANK STATEMENT FILED BY THE APPELLA NT. THE NET WORTH OF SUCH SUBSCRIBERS IS IN EXCESS OF THE AMOUNT INVESTED BY EACH OF THEM AS EXPLAINED HEREINABOVE. THE ADDITION MADE BY AO IS BASED ON EXTRANEOUS PARAMETE RS NOT GERMANE FOR DECIDING THE ISSUE. THE AO HAD NOT DEALT WITH THE ISSUE JUDICIOU SLY AND CONSISTENTLY WITH THE EVIDENCE ADDUCED DURING THE COURSE OF THE ASSESSMENT PROCEED INGS BY THE APPELLANT AND THE REPLIES OF THE SHARE APPLICANTS IN RESPECT OF THE S HARE CAPITAL DO NOT WARRANT THE INFERENCE THAT SUCH SHARE APPLICATION MONIES RECEIV ED IS UNACCOUNTED CASH CREDIT. HENCE, I AM INCLINED TO ACCEPT THE ARGUMENTS TENDER ED BY THE AR OF THE APPELLANT IN 6 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 THIS RESPECT. IN VIEW OF THE ABOVE, I HAVE NO HESIT ATION TO HOLD THAT THE IMPUGNED ADDITION MADE BY INVOKING THE PROVISIONS OF S. 68 B Y THE AO IS NOT JUSTIFIED IN THE CIRCUMSTANCES. ACCORDINGLY, I DIRECT DELETION OF AD DITION OF RS. 12,01,00,000/- MADE ON ACCOUNT OF SHARE PREMIUM U/S 68 OF THE ACT. THUS, T HESE GROUNDS ARE ALLOWED. 5. THE LD. CIT, DR ASSAILING THE DECISION OF THE LD . CIT(A) DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE FAILED TO PROVE THE CREDITWO RTHINESS OF THE SHARE SUBSCRIBERS THE ADDITION MADE BY THE AO U/S. 68 OF THE ACT IS LEGAL LY TENABLE AND SHOULD NOT HAVE BEEN DELETED. ACCORDING TO LD. CIT, DR MERELY BY DUMPIN G AROUND 300 PAGES PAPER BOOK THE ASSESSEE CANNOT CLAIM TO HAVE DISCHARGED ITS BURDEN OF PROVING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SHARE APPLICANTS. ACCORDIN G TO LD. CIT, DR, IT IS BEYOND LOGIC AND HUMAN PROBABILITIES THAT ANY ONE WOULD SUBSCRIBE SU CH HUGE SHARE CAPITAL AND THAT TOO WITH VERY HIGH SHARE PREMIUM, THE SHARES OF THE ASSESSEE COMPANY WHICH DOES NOT COMMAND ANY EXTRA ORDINARY RESULTS / FINANCES, THEREFORE, THE A CTION OF LD. CIT(A) IN ACCEPTING THE DOCUMENTS PRODUCED BY THE ASSESSEE AS GOSPEL TRUTH IS ERRONEOUS AND HE REFERRED TO THE FOLLOWING DECISIONS TO BOLSTER HIS CONTENTION: I) CIT VS. NOVA PROMOTERS AND FINLEASE PVT. LTD., ITA NO. 342 OF 2001 DATED 15.02.2012 (DELHI HIGH COURT) II) CIT VS. M/S. ORCHID INDUSTRIES PVT. LTD. ITA NO. 14 33 OF 2014 (SC), III) GOPAL IRON & STEEL CO. (GUJRAT) LTD. VS. ITO DATED 12.09.2017 (GUJ. HIGH COURT. IV) PRAGATI FINANCIAL MANAGEMENT PVT. LTD. VS. CIT DATE D 07.02.2017 (KOLKATA HIGH COURT. V) BISHAKHA SALES PVT. LTD. ITA NO. 1493, ASSESSES AP PEALS AGAINST THE ORDER U/S. 263, WERE DISMISSED. VI) A BUNCH OF 1+ 18 CASES, SUBHALAKSHMI VANIJYA PVT. L TD. -V S.- CIT ITA NO.1104/KOL/2014. THE HON'BLE ITAT KOLKATA UPHELD T HE ORDER U/S. 263 CONFIRMED BY THE APEX COURT DISMISSING THE SUBSTANT IAL QUESTION OF LAW OF GENERAL IMPORTANCE RAISED BY THE ASSESSEE COMPANY. VII) M/S. SUKANNYA MERCHANTILES PVT. LTD. - VS.- ITA, IT A NO. 291/KO1/2016. THE ASSESSEE APPEALS DISMISSED UPHOLDING THE ORDER U/S. 263. VIII) ITO -VS.- M/S. BLESSINGS COMMERCIAL PVT. LTD. ITA N O. 271/KO1/2014. THE HON'BLE ITAT REVERSED THE FINDINGS OF CIT APPEALS O N A SIMILAR CASE. 7 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 IX) BUNCH OF NINE (9) APPEALS INVOLVING THE SIMILAR ISS UE M/S AGARWAL COAL CORPORATION PVT. LTD. - VS- ADDITIONAL CIT, ITA NO. 1511IND/2009, INDORE BENCH THE HON'BLE ITAT DISMISSED THE APPEAL OF THE ASSESSEE CONFIRMING THE ACTION OF ASSESSING OFFICER AND CIT APPEALS. X) ADVANCE POWER INFOTECH LTD. -VS.- DCIT ITA NO. 6051 K01L2015. THE ASSESSEE APPEAL AGAINST ADDITION U/S. 68 WAS DISMIS SED. XI) CORNER STONE PROPERTY INVESTMENT PVT. LTD. ITA NO. -665/BANG/2007. THE HON'BLE BANGALORE ITAT DISMISSED THE APPEALS OF THE ASSESSEE ON SIMILAR FACTS AND CIRCUMSTANCES. XII) NAKODA FASHIONS PVT. LTD ITA NO 1716/AHD/2012, REVE NUE APPEALS ARE ALLOWED. XIII) HINDUSTHAN TEA TRADING CO. LTD. VS. CIT 263 ITR 289 (KOL) XIV) CIT VS. NIPUN BUILDERS AND DEVELOPERS PVT. LTD. (20 13) 350 ITR 407 (DEL.), XV) CIT VS. N. R. PORTFOLIO PVT. LTD. (2014) 2 ITR 68 ( DEL) XVI) CIT VS. GOLD LEAF CAPITAL CORPORATION LTD. (2013) 3 53 ITR 164 (DEL). XVII) CIT VS. NAVODAYA CASTLES PVT. LTD. (2014) 367 ITR 3 06 (DEL.) XVIII) ONASSIS AXLES P. LTD. VS. CIF (2014) 364 ITR 53 (DE L). XIX) CIT VS. JAN SAMPARK ADVERTISEMENT & MARKETING PVT. LTD. 2015 TIOL 6000 (DEL) AND HE SUMMED UP THE ARGUMENTS BY STATING THE FOLL OWING MATERIAL POINTS: MERE PRODUCTION OF INCORPORATION DETAILS, PAN OR THE FACT THAT THIRD PERSONS OR COMPANY HAD FILED INCOME TAX DETAILS MAY NOT BE SUFFICIENT WHEN SURROUNDING AND ATTENDING FACTS PREDICATE A COVER UP. PAPER WORK LIKE DETAILS OF PAN, INCOME TAX RETURN , DETAILS OF CHEQUE AND BANK ACCOUNTS INDICATE AND REFLECT PROPER PAPER WORK OR DOCUMENTA TION BUT GENUINENESS, CREDITWORTHINESS AND IDENTITY ARE DEEPER AN OBTRUSIVE. COMPANIES NO DOUBT ARE ARTIFICIAL OR JURISTIC PER SONS BUT THEY ARE SOULLESS AND ARE DEPENDENT UPON INDIVIDUALS BEHIND THEM WHO TAKE THE DECISION MANAGE CONTROL THE SAID COMPANIES. 8 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 IT WOULD BE INCORRECT TO STATE THAT THE AO SHOULD GET THE ADDRESSES FROM REGISTRAR OF THE COMPANIES WEBSITE OR SEARCH FOR THE ADDRESSES OF SH AREHOLDERS AND COMMUNICATE WITH THEM. CREDITWORTHINESS WAS NOT PROVED BY MERE ISSUE OF A CHEQUE OR BY FURNISHING A COPY OF STATEMENT OF BANK ACCOUNTS, CIRCUMSTANCES MIGHT REQ UIRE THAT THERE SHOULD BE SOME EVIDENCE OF POSITIVE NATURE TO SHOW CAUSE THAT THE SAID SUBS CRIBES HAD MADE A GENUINE INVESTMENT, ACTED AS ANGLE INVESTORS, AFTER DUE DILIGENCE OR FO R PERSONAL. WHERE THERE IS ADMISSION BEFORE THE INVESTIGATION WING OF THE DEPARTMENT THAT THE SUBSCRIBERS TO SHARE CAPITAL HAD AVAILED ACCOMMODAT ION FROM BOGUS ENTRY OPERATORS CREDITWORTHINESS MUST BE PROVED AND THESE FACTUAL A SPECTS AND CIRCUMSTANCES AS PROVED BEFORE INVESTIGATION WING CANNOT BE SIMPLE TO IGNOR E. SOURCE OF FUNDING IS IMPORTANT INGREDIENT OF THE ONUS OF THE ASSESSEE. IT IS NOT SUFFICIENT THAT THE IDENTITY OF THE SHA RE APPLICATION OR CREDITORS SHOULD BE ESTABLISHED FOR THE ASSESSEE TO DISCHARGE THE INITI AL ONUS WHICH IS UPON THE/UNDER THE REQUIREMENT OF SECTION 68, THE ASSESSEE HAS TO FURT HER SATISFY THE REVENUE AS TO THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE SHARE APPLICATION OR THE INDIVIDUAL WHO IS ADVANCING AMOUNTS. 6. WE NOTE THAT THE MAIN REASON FOR NOT ACCEPTING T HE CLAIM MADE BY THE ASSESSEE WAS THAT AO WONDERED AS TO HOW THE ASSESSEE HAS RAISED SHARE CAPITAL OF RS. 1,05,40,000/- ALONG WITH SHARE PREMIUM OF RS.10,95,60,000/- WHICH FACT WAS DISBELIEVED BY THE AO BECAUSE ASSESSEE COULD NOT DISCHARGE THE ONUS ON HIM TO PRO VE THE IDENTITY AND CREDITWORTHINESS OF THE TRANSACTION. WE NOTE THAT THE ASSESSEE HAD FIL ED 299 PAGES PAPER BOOK BEFORE THE AO AS WELL AS BEFORE THE LD. CIT(A). WE NOTE THAT THE ASS ESSEE HAD COLLECTED THE SHARE CAPITAL ALONG WITH SHARE PREMIUM FROM THE FOLLOWING CORPORA TE ENTITIES I.E. I) BRIJBHUMI TRADEVIN PVT. LTD. II) BRIJBHUMI MERCHANTS PVT. LTD. III) RECON AGENCIES PVT. LTD. IV) PARIDHI DEALER PVT. LTD. 9 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 V) MOONDHARA MERCANTILE PVT. LTD. VI) FUTTERESOFT SUPPLIERS PVT. LTD. VII)FAIRLINK MERCANTILE PVT. LTD. THE CHART GIVEN BELOW WILL GIVE A PICTURE ABOUT T HE SHARE SUBSCRIBING CORPORATE ENTITIES. SL. NO. NAME INCOME TAX ASSESSEE ITR FILED PAN BANK STATEMENT FILED OR NOT AMOUNT OF SHARE SUBSCRIPTION INCLUDING SHARE PREMIUM (RS.) 1 BRIJBHUMI TRADEVIN PVT. LTD. YES YES AAECB6243M YES 50,00,000 2. BRIJBHUMI MERCHANTS PVT. LTD. YES YES AAECB6242L YES 50,00,000 3. RECON AGENCIES PVT. LTD. YES YES AAFCR4184A YES 1,00,00,000 4. PARIDHI DEALER PVT. LTD. YES YES AAGCP1423K YES 1,00,00,000 5. MOONDHARA MERCANTILE PVT. LTD. YES YES AAGCM5216R YES 1,00,00,000 6. FUTTERESOFT SUPPLIERS PVT. LTD. YES YES AABCF7789D YES 1,00,00,000 7. FAIRLINK MERCANTILE PVT. LTD. YES YES AABCF7790E YES 1,00,00,000 7. WE NOTE THAT THE MAIN GRIEVANCE OF THE REVENUE R AISED IS AGAINST THE CREDITWORTHINESS OF THE SHARE APPLICANTS. THE IDENTITY OF THE CREDI TORS CANNOT BE DISBELIEVED BECAUSE ALL OF THEM HAVE FILED INCOME TAX ACKNOWLEDGMENT FOR AY 20 12-13 WHICH IS EVIDENT FROM THE PAPER BOOK WHICH IS TABULATED AS UNDER: SL. NO. NAME ITR ACKNOWLEDGMENT AVAILABLE AT PAPER BOOK PAGE BANK STATEMENT AVAILABLE AT PAPER BOOK PAGE AMOUNT (BALANCE SHEET AVAILABLE AT PAGE OF PAPER BOOK 1. BRIJBHUMI TRADEVIN PVT. LTD. 1 42 RS.52 LACS FROM OWN MONEY PAGE 15 OF PAPER BOOK 2. BRIJBHUMI MERCHANTS PVT. LTD. 43 80 RS. 51 LACS PAGE 51 OF THE BALANCE SHEET 3. RECON AGENCIES PVT. LTD. 81 122 RS. 51 CR. PAGE 90 OF PAPER BOOK 4. PARIDHI DEALER PVT. LTD. 123 164 RS.47 CR. PAGE 133 OF PAPER BOOK 5. MOONDHARA MERCANTILE PVT. LTD. 165 208 RS.6 CR. PAGE 175 OF PAPER BOOK 6. FUTTERESOFT SUPPLIERS PVT. LTD. 209 252 RS.1.08 CR. PAGE 220 OF PAPER BOOK 7. FAIRLINK MERCANTILE PVT. LTD. 253 299 RS.49 CR. PAGE 267 OF PAPER BOOK 8. WE ALSO NOTE THAT THE SHARE SUBSCRIBING COMPANIE S HAVE ALSO FILED THEIR RESPECTIVE COPIES OF THE AUDITED FINANCIAL STATEMENT FOR THE F INANCIAL YEAR UNDER CONSIDERATION AND ALL OF THEM HAVE FILED THEIR COPIES OF MEMORANDUM AND ARTI CLES OF ASSOCIATION OF THE COMPANY, 10 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 (EXCEPT BRIJBHUMI MERCHANTS PVT. LTD. HAVE FILED IT S COPY OF PAN WHEREAS PAN NUMBER IS AVAILABLE FROM ITR OF THIS COMPANY). WE NOTE THAT ALL THE SHARE SUBSCRIBERS HAVE FILED THEIR DECLARATION OF SOURCE OF FUND TOWARDS PAYMENT OF SH ARE APPLICATION MONEY TO ASSESSEE COMPANY. THUS, THE IDENTITY CANNOT BE DISBELIEVED. THE SHARE SUBSCRIBERS HAVE FILED THEIR RELEVANT PAGE OF BANK STATEMENTS EVIDENCING THE SHA RE APPLICATION MONEY PAID THROUGH CHEQUE AND THE BANK STATEMENT HAVE ALSO BEEN FILED WHICH WE FIND PLACED IN PAGES 42, 80,122, 164, 208, 252 AND 299 OF THE PAPER BOOK WHI CH TALLIES WITH THE COPY OF APPLICATION FOR EQUITY SHARES WHEREIN THE CHEQUE NUMBERS AND AM OUNTS HAVE ALSO BEEN STATED. THEREFORE, THE GENUINENESS CANNOT BE DISBELIEVED UN LESS THE PAPERS FILED BEFORE THE AO/LD. CIT(A) OR BEFORE US IS FOUND TO BE FALSE OR FABRICA TED. 9. COMING TO THE CREDITWORTHINESS, WE NOTE THAT FRO M THE AFORESAID FIGURES WHICH EMANATE FROM THE BALANCE SHEET PLACED ALONG WITH TH E PAPER BOOK OF EACH SUBSCRIBER SHOWN THAT THE SHARE SUBSCRIBERS HAD ENOUGH MONEY TO SUBS CRIBE IN THE SHARE CAPITAL. WE NOTE THAT ALL OF THEM HAVE FILED THEIR INCOME TAX ACKNOWLEDGE MENT WHICH SHOWS THAT THEY ARE INCOME TAX ASSESSEES AND HAD THEIR PAN ALSO DISCLOSED IN T HAT. IN ANY CASE, IF THE AO OF THE ASSESSEE COMPANY HAD ANY DOUBT ABOUT THE CREDITWORTHINESS OF THIS TWO COMPANIES THEN THE AO HAD TO DO THE EXERCISE AS DIRECTED BY THE HONBLE JURIS DICTIONAL HIGH COURT IN CIT VERSUS DATAWARE PRIVATE LIMITED, ITAT NO. 263 OF 2011 DATE D 21ST SEPTEMBER, 2011, WHEREIN THEIR LORDSHIPS HELD THAT IN CASE IF THE AO OF THE ASSESSEE COMPANY HAS DOUBT ABOUT THE CREDITORS CREDITWORTHINESS THEN, HE HAS TO ENQUIRE FROM THE AO OF THE CREDITORS AS TO THEIR CREDITWORTHINESS AND THEN ONLY CAN DRAW ANY ADVERSE INFERENCE, IF ANY. WE NOTE THAT THE ASSESSEE HAD FILED THE ITRS INCLUDING THE PAN WHICH IS AVAILABLE FROM THE ITR DETAILS AS WELL AS THE PAN OF OTHER CORPORATE ENTITIES. WE NO TE THAT IN THE CASE OF DATAWARE PRIVATE LIMITED (SUPRA) THE HONBLE HIGH COURT HAS HELD AS UNDER: IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSI NG OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFTER GETTING TH E PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE AS SESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINE NESS' OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFI CER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSESSING OFFICER HIMSELF COULD NO T ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMI TTED BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OFFICER OF THE ASS ESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE 11 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 WHEN THE IDENTITY OF THE CREDITOR AND THE GENUINENE SS' OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX (A PPEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH ARE REQUIRED TO B E FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIND NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AUTHORITIES. 10. OUR ATTENTION WAS DRAWN BY THE LD. AR TO PAGE N OS. 1 TO 299 OF THE PAPER BOOK FROM WHERE WE NOTE THAT THE AFORESAID SHAREHOLDERS HAD S UBMITTED THE FOLLOWING RELEVANT DETAILS AS CALLED FOR AND HAD CONFIRMED THE TRANSACTION WIT H THE ASSESSEE COMPANY. THE EVIDENCE WHICH WERE FILED BEFORE THE AO INCLUDED THE FOLLOWI NG DETAILS. (A) INCOME TAX RETURN OF THE SHARE HOLDERS (B) AUDITED ACCOUNTS OF THE SHARE HOLDERS (C) SHARE APPLICATION FORMS (D) SHARE ALLOTMENT LETTERS (E) COPY OF THE BANK ACCOUNT OF THE SHARE HOLDERS (F) TRANSACTION WITH THE APPELLANT WAS DULY HIGHLIG HTED IN THE BANK STATEMENT (G) COPY OF ASSESSMENT ORDERS OF THE SHAREHOLDERS (H) EVIDENCES OF SOURCE OF SOURCE OF THE SHARE HOLD ERS 11. TAKING NOTE OF THE AFORESAID DOCUMENTS, THE LD. CIT(A) WAS OF THE OPINION THAT ASSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENT ITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE SUBSCRIBERS AND DELETED THE ADDITION MADE U/S. 68 OF THE ACT. BEFORE WE ADJUDICATE AS TO WHETHER THE LD. CIT(A)S ACTION IS RIGHT OR E RRONEOUS, LET US LOOK AT SECTION 68 OF THE ACT AND THE JUDICIAL PRECEDENTS ON THE ISSUE AT HAN D. 12. SECTION 68 UNDER WHICH THE ADDITION HAS BEEN MA DE BY THE ASSESSING OFFICER READS AS UNDER: '68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NA TURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESS ING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. ' 12 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 THE PHRASEOLOGY OF SECTION 68 IS CLEAR. THE LEGISLA TURE HAS LAID DOWN THAT IN THE ABSENCE OF A SATISFACTORY EXPLANATION, THE UNEXPLAINED CASH CR EDIT MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN TH IS CASE THE LEGISLATIVE MANDATE IS NOT IN TERMS OF THE WORDS SHALL BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR'. THE SUPREME COURT WHILE INTERPRETIN G SIMILAR PHRASEOLOGY USED IN SECTION 69 HAS HELD THAT IN CREATING THE LEGAL FICTION THE PHRASEOLOGY EMPLOYS THE WORD 'MAY' AND NOT 'SHALL'. THUS THE UN-SATISFACTORINESS OF THE EX PLANATION DOES NOT AND NEED NOT AUTOMATICALLY RESULT IN DEEMING THE AMOUNT CREDITED IN THE BOOKS AS THE INCOME OF THE ASSESSEE AS HELD BY THE SUPREME COURT IN THE CASE O F CIT V. SMT. P. K. NOORJAHAN [1999] 237 ITR 570. WE NOTE THAT AGAINST THE SAID DECISION OF HON'BLE GUJARAT HIGH COURT THE SPECIAL LEAVE PETITION FILED BY THE REVENUE HAS ALS O BEEN DISMISSED BY THE HON'BLE APEX COURT. 13. THE MAIN PLANK ON WHICH THE AO MADE THE ADDITIO N WAS BECAUSE THE DIRECTORS OF THE SHARE SUBSCRIBERS DID NOT TURN UP BEFORE HIM. IN S UCH A CASE THE HON'BLE APEX COURT IN THE CASE OF ORISSA CORPN. (P) LTD. (SUPRA) 159 ITR 78 A ND THE HON'BLE GUJARAT HIGH COURT, IN THE CASE OF DY. CIT V. ROHINI BUILDERS [2002] 256 I TR 360 /[2003] 127 TAXMAN 523 , HAS HELD THAT ONUS OF THE ASSESSEE (IN WHOSE BOOKS OF A CCOUNT CREDIT APPEARS) STANDS FULLY DISCHARGED IF THE IDENTITY OF THE CREDITOR IS ESTAB LISHED AND ACTUAL RECEIPT OF MONEY FROM SUCH CREDITOR IS PROVED. IN CASE, THE ASSESSING OFF ICER IS DISSATISFIED ABOUT THE SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNTS OF THE CREDITOR S, THE PROPER COURSE WOULD BE TO ASSESS SUCH CREDIT IN THE HANDS OF THE CREDITOR (AFTER MAK ING DUE ENQUIRIES FROM SUCH CREDITOR). IN ARRIVING AT THIS CONCLUSION, THE HON'BLE COURT HAS FURTHER STRESSED THE PRESENCE OF WORD 'MAY' IN SECTION 68. RELEVANT OBSERVATIONS AT PAGES 369 AND 370 OF THIS REPORT ARE REPRODUCED HEREUNDER:- 'MERELY BECAUSE SUMMONS ISSUED TO SOME OF THE CREDI TORS COULD NOT BE SERVED OR THEY FAILED TO ATTEND BEFORE THE ASSESSING OFFICER, CANNOT BE A GR OUND TO TREAT THE LOANS TAKEN BY THE ASSESSEE FROM THOSE CREDITORS AS NON-GENUINE IN VIE W OF THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE CASE OF ORISSA CORPORATION [19 86] 159 ITR 78. IN THE SAID DECISION THE SUPREME COURT HAS OBSERVED THAT WHEN THE ASSESSEE F URNISHES NAMES AND ADDRESSES OF THE ALLEGED CREDITORS AND THE GIR NUMBERS, THE BURDEN S HIFTS TO THE DEPARTMENT TO ESTABLISH THE REVENUE'S CASE AND IN ORDER TO SUSTAIN THE ADDITION THE REVENUE HAS TO PURSUE THE ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINESS AND MERE NON-COMPLIANCE OF SUMMONS ISSUED BY THE ASSESSING OFFICER UNDER SECTION 131, BY THE ALLEGED CREDITORS WILL NOT BE SUFFICIENT TO DRAW AND ADVERSE INFERENCE AGAINST THE ASSESSEE. IN THE CASE OF SIX CREDITORS WHO APPEARED BEFORE THE ASSESSING OFFICER AND WHOSE STATEMENTS WERE RECORDE D BY THE ASSESSING OFFICER, THEY HAVE ADMITTED HAVING ADVANCED LOANS TO THE ASSESSEE BY A CCOUNT PAYEE CHEQUES AND IN CASE THE 13 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 ASSESSING OFFICER WAS NOT SATISFIED WITH THE CASH A MOUNT DEPOSITED BY THOSE CREDITORS IN THEIR BANK ACCOUNTS, THE PROPER COURSE WOULD HAVE BEEN TO MAKE ASSESSMENTS IN THE CASES OF THOSE CREDITORS BY' TREATING THE CASH DEPOSITS IN THEIR B ANK ACCOUNTS AS UNEXPLAINED INVESTMENTS OF THOSE CREDITORS UNDER SECTION 69. 14. IN THE CASE OF NEMI CHAND KOTHARI 136 TAXMAN 21 3, (SUPRA), THE HON'BLE GUAHATI HIGH COURT HAS THROWN LIGHT ON ANOTHER ASPECT TOUCH ING THE ISSUE OF ONUS ON ASSESSEE UNDER SECTION 68, BY HOLDING THAT THE SAME SHOULD BE DECI DED BY TAKING INTO CONSIDERATION THE PROVISION OF SECTION 106 OF THE EVIDENCE ACT WHICH SAYS THAT A PERSON CAN BE REQUIRED TO PROVE ONLY SUCH FACTS WHICH ARE IN HIS KNOWLEDGE. T HE HON'BLE COURT IN THE SAID CASE HELD THAT, ONCE IT IS FOUND THAT AN ASSESSEE HAS ACTUALL Y TAKEN MONEY FROM DEPOSITOR/LENDER WHO HAS BEEN FULLY IDENTIFIED, THE ASSESSEE/BORROWER CA NNOT BE CALLED UPON TO EXPLAIN, MUCH LESS PROVE THE AFFAIRS OF SUCH THIRD PARTY, WHICH HE IS NOT EVEN SUPPOSED TO KNOW OR ABOUT WHICH HE CANNOT BE HELD TO BE ACCREDITED WITH ANY KNOWLED GE. IN THIS VIEW, THE HON'BLE COURT HAS LAID DOWN THAT SECTION 68 OF INCOME-TAX ACT, SHOULD BE READ ALONG WITH SECTION 106 OF EVIDENCE ACT. THE RELEVANT OBSERVATIONS AT PAGE 260 TO 262, 264 AND 265 OF THE REPORT ARE REPRODUCED HEREIN BELOW:- 'WHILE INTERPRETING THE MEANING AND SCOPE OF SECTIO N 68, ONE HAS TO BEAR IN MIND THAT NORMALLY, INTERPRETATION OF A STATUTE SHALL BE GENE RAL, IN NATURE, SUBJECT ONLY TO SUCH EXCEPTIONS AS MAY BE LOGICALLY PERMITTED BY THE STA TUTE ITSELF OR BY SOME OTHER LAW CONNECTED THEREWITH OR RELEVANT THERETO. KEEPING IN VIEW THESE FUNDAMENTALS OF INTERPRETATION OF STATUTES, WHEN WE READ CAREFULLY THE PROVISIONS OF SECTION 68, WE NOTICE NOTHING IN SECTION 68 TO SHOW THAT THE SCOPE OF THE INQUIRY UNDER SECTION 68 BY THE REVENUE DEPARTMENT SHALL REMAIN CONFINED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR NOR DOE S THE WORDING OF SECTION 68 INDICATE THAT SECTION 68 DOES NOT AUTHORIZE THE REV ENUE DEPARTMENT TO MAKE INQUIRY INTO THE SOURCE(S) OF THE CREDIT AND/OR SUB-CREDITO R. THE LANGUAGE EMPLOYED BY SECTION 68 CANNOT BE READ TO IMPOSE SUCH LIMITATIONS ON THE POWERS OF THE ASSESSING OFFICER. THE LOGICAL CONCLUSION, THEREFORE, HAS TO BE, AND W E HOLD THAT AN INQUIRY UNDER SECTION 68 NEED NOT NECESSARILY BE KEPT CONFINED BY THE ASS ESSING OFFICER WITHIN THE TRANSACTIONS, WHICH TOOK PLACE BETWEEN THE ASSESSEE AND HIS CREDITOR, BUT THAT THE SAME MAY BE EXTENDED TO THE TRANSACTIONS, WHICH HAV E TAKEN PLACE BETWEEN THE CREDITOR AND HIS SUB-CREDITOR. THUS, WHILE THE ASSE SSING OFFICER IS UNDER SECTION 68, FREE TO LOOK INTO THE SOURCE(S) OF THE CREDITOR AND /OR OF THE SUB-CREDITOR, THE BURDEN ON THE ASSESSEE UNDER SECTION 68 IS DEFINITELY LIMITED . THIS LIMIT HAS BEEN IMPOSED BY SECTION 106 OF THE EVIDENCE ACT WHICH READS AS FOLL OWS: 'BURDEN OF PROVING FACT ESPECIALLY WITHIN KNOWLEDGE .-WHEN ANY FACT IS ESPECIALLY WITHIN THE KNOWLEDGE OF ANY PERSON, THE BURDEN) OF PROVING THAT FACT IS UPON HIM. ' ******** WHAT, THUS, TRANSPIRES FROM THE ABOVE DISCUSSION IS THAT WHITE SECTION 106 OF THE EVIDENCE ACT LIMITS THE ONUS OF THE ASSESSEE TO THE EXTENT OF HIS PROVING THE SOURCE FROM WHICH HE HAS RECEIVED THE CASH CREDIT, SECTION 68 GIVES AMPLE FREEDOM TO THE ASSESSING OFFICER TO MAKE INQUIRY NOT ONLY INTO THE SOURCE(S)OF THE CREDITOR BUT ALSO OF 14 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 HIS (CREDITOR'S) SUB-CREDITORS AND PROVE, AS A RESU LT, OF SUCH INQUIRY, THAT THE MONEY RECEIVED BY THE ASSESSEE, IN THE FORM OF LOAN FROM THE CREDITOR, THOUGH ROUTED THROUGH THE SUB-CREDITORS, ACTUALLY BELONGS TO, OR WAS OF, THE ASSESSEE HIMSELF. IN OTHER WORDS, WHILE SECTION 68 GIVES THE LIBERTY TO THE ASSESSING OFFICER TO ENQUIRE INTO THE SOURCE/SOURCE FROM WHERE THE CREDITOR HAS RECEIVED THE MONEY, SECTION 106 MAKES THE ASSESSEE LIABLE TO DISCLOSE ONLY THE SOURCE(S) FROM WHERE HE HAS HIMSELF RECEIVED THE CREDIT AND IT IS NOT THE BURDEN OF THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE SOURCE(S) OF THE SUB-CREDITORS. IF SECTION 106 AND SECTION 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN, THE INTERPRETATION OF SECTIO N 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN THE INTERPRETATION OF SECTION 68 HA S TO BE IN SUCH A WAY THAT IT DOES NOT MAKE SECTION 106 REDUNDANT. HENCE, THE HARMONIOUS C ONSTRUCTION OF SECTION 106 OF THE EVIDENCE ACT AND SECTION 68 OF THE INCOME- TAX ACT WILL BE THAT THOUGH APART FROM ESTABLISHING THE IDENTITY OF THE CREDITOR, THE ASSE SSEE MUST ESTABLISH THE GENUINENESS OF THE TRANSACTION AS WELL AS THE CREDITWORTHINESS OF HIS CREDITOR, THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIO NS AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR MUST REMAIN CONFINED TO THE TRANSAC TIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR. WHAT FOLLOWS , AS A COROLLARY, IS THAT IT IS NOT THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS BETWEEN HIS CREDITOR AND SUB-CREDITORS NOR IS IT THE BURDEN OF THE ASSESSEE TO PROVE THAT THE SUB- CREDITOR HAD THE CREDITWORTHINESS TO ADVANCE THE CA SH CREDIT TO THE CREDITOR FROM WHOM THE CASH CREDIT HAS BEEN. EVENTUALLY, RECEIVED BY THE ASSESSEE. IT, THEREFORE, FURTHER LOGICALLY FOLLOWS THAT THE CREDITOR'S CREDI TWORTHINESS HAS TO BE JUDGED VIS-A-VIS THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN TH E ASSESSEE AND THE CREDITOR, AND IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CREDITOR OR OF THE GENUINENESS OF THE TRANSACTIONS, WHICH TOOK BET WEEN THE CREDITOR AND SUB-CREDITOR AND/OR CREDITWORTHINESS OF THE SUB- CREDITORS, FOR, THESE ASPECTS MAY NOT BE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE. ' ********** ' ... IF A CREDITOR HAS, BY ANY UNDISCLOSED SOURCE, A PARTICULAR AMOUNT OF MONEY IN THE BANK, THERE IS NO LIMITATION UNDER THE LAW ON THE P ART OF THE ASSESSEE TO OBTAIN SUCH AMOUNT OF MONEY OR PART THEREOF FROM THE CREDITOR, BY WAY OF CHEQUE IN THE FORM OF LOAN AND IN SUCH A CASE, IF THE CREDITOR FAILS TO S ATISFY AS TO HOW HE HAD ACTUALLY RECEIVED THE SAID AMOUNT AND HAPPENED TO KEEP THE S AME IN THE BANK, THE SAID AMOUNT CANNOT BE TREATED AS INCOME OF THE ASSESSEE FROM UN DISCLOSED SOURCE. IN OTHER WORDS, THE GENUINENESS AS WELL AS THE CREDITWORTHINESS OF A CREDITOR HAVE TO BE ADJUDGED VIS-A-VIS THE TRANSACTIONS, WHICH HE HAS WITH THE A SSESSEE. THE REASON WHY WE HAVE FORMED THE OPINION THAT IT IS NOT THE BUSINESS OF T HE ASSESSEE TO FIND OUT THE ACTUAL SOURCE OR SOURCES FROM WHERE THE CREDITOR HAS ACCUM ULATED THE AMOUNT, WHICH HE ADVANCES, AS LOAN, TO THE ASSESSEE IS THAT SO FAR A S AN ASSESSEE IS CONCERNED, HE HAS TO PROVE THE GENUINENESS OF THE TRANSACTION AND THE CR EDITWORTHINESS OF THE CREDITOR VIS-A-VIS THE TRANSACTIONS WHICH HAD TAKEN PLACE BE TWEEN THE ASSESSEE AND THE CREDITOR AND NOT BETWEEN THE CREDITOR AND THE SUB-CREDITORS, FOR, IT IS NOT EVEN REQUIRED UNDER THE LAW FOR THE ASSESSEE TO TRY TO FIND OUT AS TO W HAT SOURCES FROM WHERE THE CREDITOR HAD RECEIVED THE AMOUNT, HIS SPECIAL KNOWLEDGE UNDE R SECTION 106 OF THE EVIDENCE ACT MAY VERY WELL REMAIN CONFINED ONLY TO THE TRANSACTI ONS, WHICH HE HAD' WITH THE CREDITOR AND HE MAY NOT KNOW WHAT TRANSACTION(S) HA D TAKEN PLACE BETWEEN HIS CREDITOR AND THE SUB-CREDITOR ' ********** 'IN OTHER WORDS, THOUGH UNDER SECTION 68 AN ASSESSI NG OFFICER IS FREE TO SHOW, WITH THE HELP OF THE INQUIRY CONDUCTED BY HIM INTO THE T RANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND THE SUB-CREDITOR, THAT THE TRANSACTION BETWEEN THE TWO WERE 15 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 NOT GENUINE AND THAT THE SUB-CREDITOR HAD NO CREDIT WORTHINESS, IT WILL NOT NECESSARILY MEAN THAT THE LOAN ADVANCED BY THE SUB-CREDITOR TO THE CREDITOR WAS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE UNLESS THERE IS EV IDENCE, DIRECT OR CIRCUMSTANTIAL, TO SHOW THAT THE AMOUNT WHICH HAS BEEN ADVANCED BY THE SUB-CREDITOR TO THE CREDITOR, HAD ACTUALLY BEEN RECEIVED BY THE SUB-CREDITOR FROM THE ASSESSEE .' ********** 'KEEPING IN VIEW THE ABOVE POSITION OF LAW, WHEN WE TURN TO THE FACTUAL MATRIX OF THE PRESENT CASE, WE FIND THAT SO FAR AS THE APPELLANT IS CONCERNED, HE HAS ESTABLISHED THE IDENTITY OF THE CREDITORS, NAMELY, NEMICHAND NAHATA AND SONS (HUF) AND PAWAN KUMAR AGARWALLA. THE APPELLANT HAD ALSO SHOWN, IN A CCORDANCE WITH THE BURDEN, WHICH RESTED ON HIM UNDER SECTION 106 OF THE EVIDEN CE ACT, THAT THE SAID AMOUNTS HAD BEEN RECEIVED BY HIM BY WAY OF CHEQUES FROM THE CRE DITORS AFOREMENTIONED. IN FACT THE FACT THAT THE ASSESSEE HAD RECEIVED THE SAID AMOUNT S BY WAY OF CHEQUES WAS NOT IN DISPUTE. ONCE THE ASSESSEE HAD ESTABLISHED THAT HE HAD RECEIVED THE SAID AMOUNTS FROM THE CREDITORS AFOREMENTIONED BY WAY OF CHEQUES, THE ASSESSEE MUST BE TAKEN TO HAVE PROVED THAT THE CREDITOR HAD THE CREDITWORTHINESS T O ADVANCE THE LOANS. THEREAFTER THE BURDEN HAD SHIFTED TO THE ASSESSING OFFICER TO PROV E THE CONTRARY. ON MERE FAILURE ON THE PART OF THE CREDITORS TO SHOW THAT THEIR SUB-CR EDITORS HAD CREDITWORTHINESS TO ADVANCE THE SAID LOAN AMOUNTS TO THE ASSESSEE, SUCH FAILURE, AS A COROLLARY, COULD NOT HAVE BEEN AND OUGHT NOT TO HAVE BEEN, UNDER THE LAW , TREATED AS THE INCOME FROM THE UNDISCLOSED SOURCES OF THE ASSESSEE HIMSELF, WHEN T HERE WAS NEITHER DIRECT NOR CIRCUMSTANTIAL EVIDENCE ON RECORD THAT THE SAID LOA N AMOUNTS ACTUALLY BELONGED TO, OR WERE OWNED BY, THE ASSESSEE. VIEWED FROM THIS ANGLE , WE HAVE NO HESITATION IN HOLDING THAT IN THE CASE AT HAND, THE ASSESSING OFFICER HAD FAILED TO SHOW THAT THE AMOUNTS, WHICH HAD COME TO THE HANDS OF THE CREDITORS FROM T HE HANDS OF THE SUB-CREDITORS, HAD ACTUALLY BEEN RECEIVED BY THE SUB-CREDITORS FROM TH E ASSESSEE. IN THE ABSENCE OF ANY SUCH EVIDENCE ON RECORD, THE ASSESSING OFFICER COUL D NOT HAVE TREATED THE SAID AMOUNTS AS INCOME DERIVED BY THE APPELLANT FROM UND ISCLOSED SOURCES. THE LEARNED TRIBUNAL SERIOUSLY FELL INTO ERROR IN TREATING THE SAID AMOUNTS AS INCOME DERIVED BY THE APPELLANT FROM. UNDISCLOSED SOURCES MERELY ON T HE FAILURE OF THE SUB-CREDITORS TO PROVE THEIR CREDITWORTHINESS. 15. FURTHER, IN THE CASE OF CIT V. S. KAMALJEET SIN GH [2005] 147 TAXMAN 18(ALL.) THEIR LORDSHIPS, ON THE ISSUE OF DISCHARGE OF ASSESSEE'S ONUS IN RELATION TO A CASH CREDIT APPEARING IN HIS BOOKS OF ACCOUNT, HAS OBSERVED AND HELD AS U NDER:- '4. THE TRIBUNAL HAS RECORDED A FINDING THAT THE AS SESSEE HAS DISCHARGED THE ONUS WHICH WAS ON HIM TO EXPLAIN THE NATURE AND SOURCE OF CASH CRE DIT IN QUESTION. THE ASSESSEE DISCHARGED THE ONUS BY PLACING (I) CONFIRMATION LETTERS OF THE CASH CREDITORS; (II) THEIR AFFIDAVITS; (III) THEIR FULL ADDRESSES AND GIR NUMBERS AND PERMANENT ACCOUN T NUMBERS. IT HAS FOUND THAT THE ASSESSEE'S BURDEN STOOD DISCHARGED AND SO, NO ADDIT ION TO HIS TOTAL INCOME ON ACCOUNT OF CASH CREDIT WAS CALLED FOR. IN VIEW OF THIS FINDING, WE FIND THAT THE TRIBUNAL WAS RIGHT IN REVERSING THE ORDER OF THE AA C, SETTING ASIDE THE ASSESSMENT ORDER. 16. WE ALSO TAKE NOTE OF THE DECISION OF THE HON' BLE HIGH COURT, CALCUTTA IN THE CASE OF S.K. BOTHRA & SONS, HUF V. INCOME-TAX OFFICER, WARD - 46(3), KOLKATA 347 ITR 347 WHEREIN THE COURT HELD AS FOLLOWS: 16 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 15. IT IS NOW A SETTLED LAW THAT WHILE CONSIDERING THE QUESTION WHETHER THE ALLEGED LOAN TAKEN BY THE ASSESSEE WAS A GENUINE TRANSACTION, THE INIT IAL ONUS IS ALWAYS UPON THE ASSESSEE AND IF NO EXPLANATION IS GIVEN OR THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACTORY, THE ASSESSING OFFICER CAN DISBELIEVE THE ALLEGED TRANSA CTION OF LOAN. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCHARGED BY THE ASS ESSEE BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE LOAN TRANSACTION, THE ONUS SHIFTS UP ON THE ASSESSING OFFICER AND AFTER VERIFICATION, HE CAN CALL FOR FURTHER EXPLANATION F ROM THE ASSESSEE AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE ASSESSING OFFICER TO ASSES SEE. 16. IN THE CASE BEFORE US, THE APPELLANT BY PRODUCI NG THE LOAN-CONFIRMATION-CERTIFICATES SIGNED BY THE CREDITORS, DISCLOSING THEIR PERMANENT ACCOUN T NUMBERS AND ADDRESS AND FURTHER INDICATING THAT THE LOAN WAS TAKEN BY ACCOUNT PAYEE CHEQUES, NO DOUBT, PRIMA FACIE, DISCHARGED THE INITIAL BURDEN AND THOSE MATERIALS D ISCLOSED BY THE ASSESSEE PROMPTED THE ASSESSING OFFICER TO ENQUIRE THROUGH THE INSPECTOR TO VERIFY THE STATEMENTS. 17. IN A CASE WHERE THE ISSUE WAS WHETHER THE ASSE SSEE AVAILED CASH CREDIT AS AGAINST FUTURE SALE OF PRODUCT, THE AO ISSUED SUMMONS TO TH E CREDITORS WHO DID NOT TURN UP BEFORE HIM, SO AO DISBELIEVED THE EXISTENCE OF CREDITORS A ND SADDLED THE ADDITION, WHICH WAS OVERTURNED BY LD. CIT(A). HOWEVER, THE TRIBUNAL RE VERSED THE DECISION OF THE LD. CIT(A) AND UPHELD THE AOS DECISION, WHICH ACTION OF TRIBU NAL WAS CHALLENGED BY THE HON'BLE HIGH COURT, CALCUTTA IN THE CASE OF CRYSTAL NETWORKS (P. ) LTD. V. COMMISSIONER OF INCOME-TAX 353 ITR 171 WHEREIN THE TRIBUNALS DECISION WAS OVE RTURNED AND DECISION OF LD. CIT(A) UPHELD AND THE HONBLE HIGH COURT HAS HELD THAT WH EN THE BASIC EVIDENCES ARE ON RECORD THE MERE FAILURE OF THE CREDITOR TO APPEAR CANNOT B E BASIS TO MAKE ADDITION. THE COURT HELD AS FOLLOWS: 8. ASSAILING THE SAID JUDGMENT OF THE LEARNED TRIBU NAL LEARNED COUNSEL FOR THE APPELLANT SUBMITS THAT INCOME-TAX OFFICER DID NOT CONSIDER TH E MATERIAL EVIDENCE SHOWING THE CREDITWORTHINESS AND ALSO OTHER DOCUMENTS, VIZ., CO NFIRMATORY STATEMENTS OF THE PERSONS, OF HAVING ADVANCED CASH AMOUNT AS AGAINST THE SUPPLY O F BIDIS. THESE EVIDENCE WERE DULY CONSIDERED BY THE COMMISSIONER OF INCOME-TAX (APPEA LS). THEREFORE, THE FAILURE OF THE PERSON TO TURN UP PURSUANT TO THE SUMMONS ISSUED TO ANY WI TNESS IS IMMATERIAL WHEN THE MATERIAL DOCUMENTS MADE AVAILABLE, SHOULD HAVE BEEN ACCEPTED AND INDEED IN SUBSEQUENT YEAR THE SAME EXPLANATION WAS ACCEPTED BY THE INCOME-TAX OFF ICER. HE FURTHER CONTENDED THAT WHEN THE TRIBUNAL HAS RELIED ON THE ENTIRE JUDGMENT OF THE C OMMISSIONER OF INCOME-TAX (APPEALS), THEREFORE, IT WAS NOT PROPER TO TAKE UP SOME PORTIO N OF THE JUDGMENT OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND TO IGNORE THE OTHER PORTIO N OF THE SAME. THE JUDICIAL PROPRIETY AND FAIRNESS DEMANDS THAT THE ENTIRE JUDGMENT BOTH FAVO URABLE AND UNFAVOURABLE SHOULD HAVE BEEN CONSIDERED. BY NOT DOING SO THE TRIBUNAL COMMITTED GRAVE ERROR IN LAW IN UPSETTING THE JUDGMENT IN THE ORDER OF THE COMMISSIONER OF INCOME -TAX (APPEALS). 9. IN THIS CONNECTION HE HAS DRAWN OUR ATTENTION TO A DECISION OF THE SUPREME COURT IN THE CASE OF UDHAVDAS KEWALRAM V. CIT [19671 66 ITR 462. IN THIS JUDGMENT IT IS NOTICED THAT THE SUPREME COURT AS PROPOSITION OF LAW HELD THAT THE T RIBUNAL MUST IN DECIDING AN APPEAL, CONSIDER WITH DUE CARE, ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. 10. WE FIND CONSIDERABLE FORCE OF THE SUBMISSIONS O F THE LEARNED COUNSEL FOR THE APPELLANT THAT THE TRIBUNAL HAS MERELY NOTICED THAT SINCE THE SUMM ONS ISSUED BEFORE ASSESSMENT RETURNED 17 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 UNSERVED AND NO ONE CAME FORWARD TO PROVE. THEREFOR E, IT SHALL BE ASSUMED THAT THE ASSESSEE FAILED TO PROVE THE EXISTENCE OF THE CREDITORS OR F OR THAT MATTER THE CREDITWORTHINESS. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL THAT THE COMMISS IONER OF INCOME-TAX (APPEALS) HAS TAKEN THE TROUBLE OF EXAMINING OF ALL OTHER MATERIALS AND DOCUMENTS, VIZ., CONFIRMATORY STATEMENTS, INVOICES, CHALLANS AND VOUCHERS SHOWING SUPPLY OF B IDIS AS AGAINST THE ADVANCE. THEREFORE, THE ATTENDANCE OF THE WITNESSES PURSUANT TO THE SUM MONS ISSUED, IN OUR VIEW, IS NOT IMPORTANT. THE IMPORTANT IS TO PROVE AS TO WHETHER THE SAID CA SH CREDIT WAS RECEIVED AS AGAINST THE FUTURE SALE OF THE PRODUCT OF THE ASSESSEE OR NOT. WHEN IT WAS FOUND BY THE COMMISSIONER OF INCOME- TAX (APPEALS) ON FACTS HAVING EXAMINED THE DOCUMENT S THAT THE ADVANCE GIVEN BY THE CREDITORS HAVE BEEN ESTABLISHED THE TRIBUNAL SHOULD NOT HAVE IGNORED THIS -FACT FINDING. INDEED THE TRIBUNAL DID NOT REALLY TOUCH THE AFORESAID FACT FI NDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AS RIGHTLY POINTED OUT BY THE LEARNED COU NSEL. THE SUPREME COURT HAS ALREADY STATED AS TO WHAT SHOULD BE THE DUTY OF THE LEARNED TRIBUN AL TO DECIDE IN THIS SITUATION. IN THE SAID JUDGMENT NOTED BY US AT PAGE 464, THE SUPREME COURT HAS OBSERVED AS FOLLOWS: 'THE INCOME-TAX APPELLATE TRIBUNAL PERFORMS A JUDIC IAL FUNCTION UNDER THE INDIAN INCOME-TAX ACT; IT IS INVESTED WITH AUTHORITY TO DE TERMINE FINALLY ALL QUESTIONS OF FACT. THE TRIBUNAL MUST, IN DECIDING AN APPEAL, CONSIDER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. ' 11. THE TRIBUNAL MUST, IN DECIDING AN APPEAL, CONSI DER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL CONTENTIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. IT IS A LSO RULED IN THE SAID JUDGMENT AT PAGE 465 THAT IF THE TRIBUNAL DOES NOT DISCHARGE THE DUTY IN THE MANNER AS ABOVE THEN IT SHALL BE ASSUMED THE JUDGMENT OF THE TRIBUNAL SUFFERS FROM M ANIFEST INFIRMITY. 12. TAKING INSPIRATION FROM THE SUPREME COURT OBSER VATIONS WE ARE CONSTRAINED TO HOLD IN THIS MATTER THAT THE TRIBUNAL HAS NOT ADJUDICATED UPON T HE CASE OF THE ASSESSEE IN THE LIGHT OF THE EVIDENCE AS FOUND BY THE COMMISSIONER OF INCOME-TAX (APPEALS). WE ALSO FOUND NO SINGLE WORD HAS BEEN SPARED TO UP SET THE FACT FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT THERE ARE MATERIALS TO SHOW THE CASH CREDIT WA S RECEIVED FROM VARIOUS PERSONS AND SUPPLY AS AGAINST CASH CREDIT ALSO MADE. 13. HENCE, THE JUDGMENT AND ORDER OF THE TRIBUNAL I S NOT SUSTAINABLE. ACCORDINGLY, THE SAME IS SET ASIDE. WE RESTORE THE JUDGMENT AND ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). THE APPEAL IS ALLOWED. 18. WHEN A QUESTION AS TO THE CREDITWORTHINESS OF A CREDITOR IS TO BE ADJUDICATED AND IF THE CREDITOR IS AN INCOME TAX ASSESSEE, IT IS NOW W ELL SETTLED BY THE DECISION OF THE CALCUTTA HIGH COURT THAT THE CREDITWORTHINESS OF THE CREDITO R CANNOT BE DISPUTED BY THE AO OF THE ASSESSEE BUT THE AO OF THE CREDITOR. IN THIS REGARD S OUR ATTENTION WAS DRAWN TO THE DECISION OF THE HON'BLE HIGH COURT, CALCUTTA IN THE COMMISSI ONER OF INCOME TAX, KOLKA TA-ILL VERSUS DATAWARE PRIVATE LIMITED ITAT NO. 263 OF 2011 DATE: 21ST SEPTEMBER, 2011 WHEREIN THE COURT HELD AS FOLLOWS: IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSI NG OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFTER GETTING TH E PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE AS SESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINE NESS' OF THE TRANSACTION AND WHETHER SUCH 18 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFI CER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSESSING OFFICER HIMSELF COULD NO T ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMI TTED BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OFFICER OF THE ASS ESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND THE GENUINENE SS' OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX (A PPEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH ARE REQUIRED TO B E FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIND NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AUTHORITIES. 19. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HON'BLE SUPREME COURT WHILE DISMISSING SLP IN THE CASE OF LOVELY EXPORTS AS HAS BEEN REPORTED AS JUDGMENT DELIVERED BY THE CTR AT 216 CTR 295: 'CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1961? WE FIND NO MERIT IN THIS SPEC IAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE A SSESSEE- COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE W ITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT. 20. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT WHILE RELYING ON THE CASE OF LOVELY EXPORTS, IN THE APPEAL OF COMISSIONER OF INCOME TAX, KOLKATA-IV VS ROSEBERRY MERCANTILE (P) LTD., I TAT NO. 241 OF 2010 DATED 10- 01-2011 HAS HELD: 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTERED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTED MONEY AND THE LD. CIT (A) OUGHT TO HAVE HELD THAT THE ASSESSEE HAD NOT ESTABLISHED THE GENUINENESS OF THE TRANSACTION. ' IT APPEARS FROM THE RECORD THAT IN THE ASSESSMENT P ROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATION HAD BRO UGHT RS. 4, 00, 000/- AND RS.20,00,000/- TOWARDS SHARE CAPITAL AND SHARE PREMIUM RESPECTIVEL Y AMOUNTING TO RS.24,00, 000/- FROM FOUR SHAREHOLDERS BEING PRIVATE LIMITED COMPANIES. THE A SSESSING OFFICER ON HIS PART CALLED FOR THE DETAILS FROM THE ASSESSEE AND ALSO FROM THE SHARE A PPLICANTS AND ANALYZED THE FACTS AND ULTIMATELY OBSERVED CERTAIN ABNORMAL FEATURES, WHIC H WERE MENTIONED IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER, THEREFORE, CONCLUDED THAT NA TURE AND SOURCE OF SUCH MONEY WAS QUESTIONABLE AND EVIDENCE PRODUCED WAS UNSATISFACTO RY. CONSEQUENTLY, THE ASSESSING OFFICER INVOKED THE PROVISIONS UNDER SECTION 68/69 OF THE I NCOME TAX ACT AND MADE ADDITION OF RS.24,00,000/-. ON APPEAL THE LEARNED CIT (A) BY FOLLOWING THE DECI SION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD., REPORTED IN (2008) 216 CTR 195 ALLOWED THE APPEAL BY HOLDING -THAT SHARE CAPITAL/PREMIUM OF RS. 24,00,00 0/- RECEIVED FROM THE INVESTORS WAS NOT LIABLE TO BE TREATED UNDER SECTION 68 AS UNEXPLAINE D CREDITS AND IT SHOULD NOT BE TAXED IN THE HANDS OF THE APPELLANT COMPANY. 19 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 AS INDICATED EARLIER, THE TRIBUNAL BELOW DISMISSED THE APPEAL FILED BY THE REVENUE. AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD. [SUPRA], WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISION IN FAVOUR OF THE ASSESSEE AND THUS, NO SUB STANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEAL IS DEVOID OF ANY SUBSTANCE AND I S DISMISSED. 21. OUR ATTENTION WAS DRAWN TO THE DECISION OF THE HON'BLE HIGH COURT, CALCUTTA IN THE CASE OF COMMISSIONER OF INCOME TAX VS M/S. NISHAN I NDO COMMERCE LTD DATED 2 DECEMBER, 2013 IN INCOME TAX APPEAL NO.52 OF 2001 W HEREIN THE COURT HELD AS FOLLOWS: THE ASSESSING OFFICER WAS OF THE VIEW THAT THE INC REASE IN SHARE CAPITAL BY RS.52,03,500/- WAS NOTHING BUT THE INTRODUCTION OF THE ASSESSEE'S OWN UNDISCLOSED FUNDS/INCOME INTO THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY. THE ASSE SSING OFFICER ACCORDINGLY TREATED THE INVESTMENT AS UNEXPLAINED CREDIT UNDER SECTION 68 O F THE INCOME TAX ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFOR E THE COMMISSIONER OF INCOME TAX (APPEALS) BEING THE FIRST APPELLATE AUTHORITY AND C ONTENDED THAT THE ASSESSING OFFICER HAD NO MATERIAL TO SHOW THAT THE SHARE CAPITAL WAS THE INC OME OF THE ASSESSEE COMPANY AND AS SUCH THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SE CTION 68 OF THE ACT WAS WRONG. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AF TER HEARING THE DEPARTMENT AND THE ASSESSEE COMPANY DELETED THE ADDITION OF RS. 52, 03 ,500/- TO THE INCOME OF THE ASSESSEE COMPANY DURING THE ASSESSMENT YEAR IN QUESTION. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS FOUND THAT THERE WERE AS MANY AS 2155 ALLOT TEES, WHOSE NAMES, ADDRESSES AND RESPECTIVE SHARES ALLOCATION HAD BEEN DISCLOSED. THE COMMISSIONER OF INCOME TAX APPEALS, FURTHER FOU ND THAT THE ASSESSEE COMPANY RECEIVED THE APPLICATIONS THROUGH BANKERS TO THE ISSUE, WHO HAD BEEN APPOINTED UNDER THE GUIDELINES OF THE STOCK EXCHANGE AND THE ASSESSEE COMPANY HAD BEE N ALLOTTED SHARES ON THE BASIS OF ALLOTMENT APPROVED BY THE STOCK EXCHANGE. THE ASSES SEE COMPANY HAD DULY FILED THE RETURN OF ALLOTMENT WITH THE REGISTRAR OF COMPANIES, GIVING C OMPLETE PARTICULARS OF THE ALLOTTEES. THE COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT INQUIRES HAD CONFIRMED THE EXISTENCE OF MOST OF THE SHAREHOLDERS AT THE ADDRESSES INTIMA TED TO THE ASSESSING OFFICER, BUT THE ASSESSING OFFICER TOOK THE VIEW THAT THEIR INVESTME NT IN THE ASSESSEE COMPANY WAS NOT GENUINE, ON THE BASIS OF SOME EXTRANEOUS REASONS. T HE COMMISSIONER OF INCOME TAX (APPEALS) TOOK NOTE OF THE OBSERVATION OF THE ASSESSING OFFIC ER THAT ENQUIRY CONDUCTED BY THE INCOME TAX INSPECTOR HAD REVEALED THAT NINE PERSONS MAKING APPLICATIONS FOR 900 SHARES WERE NOT AVAILABLE AT THE GIVEN ADDRESS AND RIGHTLY CONCLUDE D THAT THE TOTAL SHARE CAPITAL ISSUED BY THE ASSESSEE COMPANY COULD NOT BE ADDED AS UNEXPLAINED CASH CREDIT UNDER 'SECTION 68 OF THE INCOME TAX ACT. MOREOVER, IF THE NATURE AND SOURCE OF INVESTMENT BY ANY SHAREHOLDER, IN SHARES OF THE ASSESSEE COMPANY REMAINED UNEXPLAINED , LIABILITY COULD NOT BE FOISTED ON THE COMPANY. THE CONCERNED SHAREHOLDERS WOULD HAVE TO E XPLAIN THE SOURCE OF THEIR FUND. THE LEARNED COMMISSIONER ON CONSIDERING THE SUBMISS IONS OF THE, RESPECTIVE PARTIES AND CONSIDERING THE MATERIALS, FOUND THAT THE ASSESSING OFFICER HAD APPLIED THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT ARBITRARILY AND IL LEGALLY AND IN ANY CASE WITHOUT GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF REPRESENTATION AND /OR HEARING. 20 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 LEARNED TRIBUNAL AGREED WITH THE FACTUAL FINDINGS O F THE LEARNED COMMISSIONER AND ACCORDINGLY THE LEARNED TRIBUNAL DISMISSED THE APPE AL OF THE REVENUE AND AFFIRMED THE DECISION OF THE LEARNED COMMISSIONER. MR. DUTTA APPEARING ON BEHALF OF THE PETITIONERS CI TED JUDGMENT OF THE DIVISION BENCH OF THIS COURT IN COMMISSIONER OF INCOME TAX VS. RUBY TRADER S AND EXPORTERS LIMITED REPORTED IN 236 (2003) ITR 3000 WHERE A DIVISION BENCH OF THIS COURT HELD THAT WHEN SECTION 68 IS RESORTED TO, IT IS INCUMBENT ON THE ASSESSEE COMPAN Y TO PROVE AND ESTABLISH THE IDENTITY OF THE SUBSCRIBERS, THEIR CREDIT WORTHINESS AND THE GENUIN ENESS OF THE TRANSACTION. THE AFORESAID JUDGMENT WAS RENDERED IN THE CONTEXT OF THE FACTUAL BACKGROUND OF THE AFORESAID CASE WHERE, DESPITE SEVERAL OPPORTUNITIES BEING GIV EN TO THE ASSESSEE, NOTHING WAS DISCLOSED ABOUT THE IDENTITY OF THE SHAREHOLDERS. IN THE INST ANT CASE, THE ASSESSEE DISCLOSED THE IDENTITY AND ADDRESS AND PARTICULARS OF SHARE ALLOCATION OF THE SHAREHOLDERS. IT WAS ALSO FOUND ON THE FACTS THAT ALL THE SHAREHOLDERS WERE IN EXISTENCE. ONLY NINE SHAREHOLDERS SUBSCRIBING TO ABOUT 900 SHARES OUT OF 6, 12,000 SHARES WERE NOT FOUND A VAILABLE AT THEIR ADDRESSES, AND THAT TOO, IN COURSE OF ASSESSMENT PROCEEDINGS IN THE YEAR 199 4, I.E., ALMOST 3 YEARS AFTER THE ALLOTMENT. BY AN ORDER DATED 2ND MAY, 2001, THIS COURT ADMITTE D THE APPEAL ON THREE QUESTIONS WHICH ESSENTIALLY CENTRE AROUND THE QUESTION OF WHETHER T HE APPELLATE COMMISSIONER ERRED IN LAW IN DELETING THE ADDITION OF RS. 52, 03, 500/- TO THE I NCOME OF THE ASSESSEE AS MADE BY THE ASSESSING OFFICER. WE ARE OF THE VIEW THAT THERE IS NO QUESTION OF LAW INVOLVED IN THIS APPEAL FAR LESS ANY SUBSTANTIAL QUESTION OF LAW. THE LEARNED TRIBUNAL HAS CONCURRED WITH THE LEARNED COMMISSIONER ON FACTS AND FOUND THAT THERE WERE MATERIALS TO SHOW THAT THE ASSESSEE HAD DISCLOSED THE PARTICULARS OF THE SHAREHOLDERS. THE FACTUAL FINDINGS CANNOT BE INTERF ERED WITH, IN APPEAL. WE ARE OF THE VIEW THAT ONCE THE IDENTITY AND OTHER RELEVANT PARTICULA RS OF SHAREHOLDERS ARE DISCLOSED, IT IS FOR THOSE SHAREHOLDERS TO EXPLAIN THE SOURCE OF THEIR F UNDS AND NOT FOR THE ASSESSEE COMPANY TO SHOW WHEREFROM THESE SHAREHOLDERS OBTAINED FUNDS. 22. FURTHER, OUR ATTENTION WAS DRAWN TO THE DECISI ON OF THE HON'BLE HIGH COURT, CALCUTTA IN THE CASE OF COMMISSIONER OF INCOME TAX VS M/S. L EONARD COMMERCIAL (P) LTD ON 13 JUNE, 2011 IN ITAT NO 114 OF 2011 WHEREIN THE COURT HELD AS FOLLOWS: THE ONLY QUESTION RAISED IN THIS APPEAL IS WHETHER THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL BELOW ERRED IN LAW IN DELETING THE ADDITION OF RS.8,52,000/-, RS. 91,50,000/- AND RS. 13,00,000/- MADE BY THE ASSESSING OFFICER O N ACCOUNT OF SHARE CAPITAL, SHARE APPLICATION MONEY AND INVESTMENT IN HTCCL RESPECTIV ELY. AFTER HEARING MD. NIZAMUDDIN, LEARNED ADVOCATE APPE ARING ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE MATERIALS ON RECORD, WE FIN D THAT ALL SUCH APPLICATION MONEY WERE RECEIVED BY THE ASSESSEE BY WAY OF ACCOUNT PAYEE CH EQUES AND THE ASSESSEE ALSO DISCLOSED THE COMPLETE LIST OF SHAREHOLDERS WITH THEIR COMPLETE A DDRESSES AND GIR NUMBERS FOR THE RELEVANT ASSESSMENT YEARS IN WHICH SHARE APPLICATION WAS CON TRIBUTED. IT FURTHER APPEARS THAT ALL THE PAYMENTS WERE MADE BY THE APPLICANTS BY ACCOUNT PAY EE CHEQUES. IT APPEARS FROM THE ASSESSING OFFICERS ORDER THAT H IS GRIEVANCE WAS THAT THE ASSESSEE WAS NOT WILLING TO PRODUCE THE PARTIES WHO HAD ALLEGEDLY AD VANCED THE FUND. IN OUR OPINION, BOTH THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL BELOW WERE JUSTIFIED IN HOLDING THAT AFTER DISCLOSURE OF THE F ULL PARTICULARS INDICATED ABOVE, THE INITIAL ONUS OF THE ASSESSEE WAS SHIFTED AND IT WAS THE DUTY OF THE ASSESSING OFFICER TO ENQUIRE WHETHER THOSE PARTICULARS WERE CORRECT OR NOT AND IF THE AS SESSING OFFICER WAS OF THE VIEW THAT THE 21 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 PARTICULARS SUPPLIED WERE INSUFFICIENT TO DETECT TH E REAL SHARE APPLICANTS, TO ASK FOR FURTHER PARTICULARS. THE ASSESSING OFFICER HAS NOT ADOPTED EITHER OF THE AFORESAID COURSES BUT HAS SIMPLY BLAMED THE ASSESSEE FOR NOT PRODUCING THOSE SHARE APPLICAN TS. IN OUR VIEW, IN THE CASE BEFORE US SO LONG THE ASSE SSING OFFICER WAS UNABLE TO ARRIVE AT A FINDING THAT THE PARTICULARS GIVEN BY THE ASSESSEE WERE FALSE, THERE WAS NO SCOPE OF ADDING THOSE MONEY UNDER SECTION 68 OF THE INCOME- TAX ACT AND THE TRIBUNAL BELOW RIGHTLY HELD THAT THE ONUS WAS VALIDLY DISCHARGED. WE, THUS, FIND THAT BOTH THE AUTHORITIES BELOW, ON CONSIDERATION OF THE MATERIALS ON RECORD, RIGHTLY APPLIED THE CORRECT LAW WHICH ARE REQUIRED TO BE APPLIED IN THE FACTS OF THE PRESENT CASE AND, THUS, WE DO NOT FIND ANY REASON TO INTERF ERE WITH THE CONCURRENT FINDINGS OF FACT BASED ON MATERIALS ON RECORD. THE APPEAL IS, THUS, DEVOID OF ANY SUBSTANCE AND IS DISMISSED SUMMARILY AS IT DOES NOT INVOLVE ANY SUBSTANTIAL QUESTION OF LAW. 23. IN THE LIGHT OF THE AFORESAID DECISIONS OF THE HONBLE APEX AND JURISDICTION HIGH COURT AND OTHER HIGH COURTS LET US EXAMINE THE PRES ENT CASE IN HAND. WE WILL EXAMINE EACH SHARE SUBSCRIBERS TOTALLING SEVEN (7). THE LD. AR TOOK PAINS TO BRING OUT THE RELEVANT FACTS IN RESPECT OF EACH SHARE SUBSCRIBERS WHICH WILL THR OW LIGHT AS TO THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE SUBSC RIBERS. WE NOTE FROM PAGE 1 TO 42 OF PAPER BOOK WHEREIN THE DETAILS OF BRIJBHUMI TRADEVI N PVT. LTD . IS GIVEN. THE DETAILS OF THE ABOVE MENTIONED APPLICANT IS GIVEN AT PAGE NUMBERS 1-42 OF THE PAPER BOOK. WE NOTE THAT THIS COMPANY INVESTED A SUM OF RS. 50,50,000/- IN T HE APPELLANT COMPANY. THE INVESTMENTS WERE MADE IN TWO PARTS. FIRSTLY, 50,000 SHARES WERE PURCHASED AT THE TIME OF INCORPORATION OF THE ASSESSEE COMPANY I.E. THE APPLICANT IS THE P ROMOTER OF THE ASSESSEE. SUBSEQUENTLY 50,00,000 SHARES WERE ALSO ACQUIRED BY THE APPLICAN T THROUGH ALLOTMENT AT RS. 1/ SHARE. IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE PRESENT SHA REHOLDER IS HOLDING 47.91% SHARES OUT OF THE TOTAL SHARES. THE SAME ARE ALSO PRESENT SHARE H OLDERS OF THE ASSESSEE COMPANY HOLDING THE SAME NUMBER OF SHARES. THUS, THE APPLICANT IS A N ASSOCIATE OF THE ASSESSEE COMPANY HOLDING MAJOR NUMBER OF SHARES. THE SHARE APPLICATI ON WAS MADE BY ACCOUNT PAYEE CHEQUE. THIS COMPANY WAS INCORPORATED ON 19.07.2011 AND WAS HAVING COMPANY IDENTIFICATION NUMBER U51909WB2011PTC165056. THIS COMPANY DULY FIL ED ITS RETURN OF INCOME BEFORE ITO WARD 8(1), KOLKATA AND WAS HAVING PAN AAECB6243 M. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF R S. 51,82,293/- AS ON 31.03.2012. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILA BLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE I S NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF 22 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE AP PLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DETAILS FIL ED IN THE PAPER BOOK. WE HAVE ON OUR OWN VISITED THE WEBSITE OF MINISTRY OF CORPORATE AFFAIR S AND FROM A PERUSAL OF THE MASTER DATA, WE NOTE THAT THIS COMPANY IS ACTIVE AS ON 7 TH FEBRUARY, 2019 . WE ALSO NOTE THAT M/S. BRIJBHUMI TRADEVIN PVT. LTD. IS HOLDING 47.91% AS O N 31.03.2018. 24. IN RESPECT OF BRIJBHUMI MERCHANTS PVT. LTD. THE LD. AR DREW OUR ATTENTION TO PAGE 43-80 OF THE PAPER BOOK FROM WHERE WE NOTE THAT THI S COMPANY INVESTED A SUM OF RS. 50,50,000/- IN THE APPELLANT COMPANY. THE INVESTMEN TS WERE MADE IN TWO PARTS. FIRSTLY, 50,000 SHARES WERE PURCHASED AT THE TIME OF INCORPO RATION OF THE ASSESSEE COMPANY I.E. THE APPLICANT IS THE PROMOTER OF THE ASSESSEE. SUBSEQUE NTLY 50,00,000 SHARES WERE ALSO ACQUIRED BY THE APPLICANT THROUGH ALLOTMENT AT RS. 1/- SHARE . IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE PRESENT SHAREHOLDER IS HOLDING 47.91% SHARES OUT OF THE TOTAL SHARES. THE SAME ARE, ALSO PRESENT SHARES HOLDERS OF THE ASSESSEE COMPANY HOLD ING THE SAME NUMBER OF SHARES. THUS, THE APPLICANT IS AN ASSOCIATE OF THE ASSESSEE COMPA NY HOLDING MAJOR NUMBER OF SHARES. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THIS COMPANY WAS INCORPORATED ON 19.07.2011 AND WAS HAVING COMPANY IDENTIFICATION NU MBER U51909WB2011PTC165053. THIS COMPANY DULY FILED ITS RETURN OF INCOME BEFORE ITO WARD T1(4), KOLKATA AND WAS HAVING PAN AAECB6242L. THIS COMPANY WAS HAVING A PA ID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 51,84,193/- AS ON 31.03.2012. TH E COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXA MINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DE TAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVA ILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BO OK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION A RE ALSO AVAILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAP ER BOOK. WE HAVE ON OUR OWN VISITED THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS AND FR OM A PERUSAL OF THE MASTER DATA, WE NOTE THAT THIS COMPANY IS ACTIVE AS ON 7 TH FEBRUARY, 2019 . WE ALSO NOTE THAT M/S. BRIJBHUMI MERCHANTS PVT. LTD. IS HOLDING 47.91% AS ON 31.03.2 018. 23 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 25. IN RESPECT OF M/S. RECON AGENCIES LTD., OUR ATTENTION WAS DRAWN BY THE LD. AR TO PAGES 81-122 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY INVESTED A SUM OF RS.2,00,00,000/- IN THE APPELLANT COMPANY. THE SHAR E APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THIS COMPANY WAS INCORPORATED ON 11.0 8.2011 AND WAS HAVING COMPANY IDENTIFICATION NUMBER U51909WB2011PLC166320. THIS C OMPANY DULY FILED ITS RETURN OF INCOME BEFORE ITO WARD 12(L), KOLKATA AND WAS HAVIN G PAN AAFCR4184A. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESE RVES AND SURPLUS OF RS. 51,01,02,258/- AS ON 31.03.2012. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THI S COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF TH E BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. 26. IN RESPECT OF M/S. PARIDHI DEALER LTD., LD. AR DREW OUR ATTENTION TO PAGES 123- 164 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY INVESTED A SUM OF RS.2,00,00,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MA DE BY ACCOUNT PAYEE CHEQUE. THIS COMPANY WAS INCORPORATED ON 11.08.2011 AND WAS HAVI NG COMPANY IDENTIFICATION NUMBER U51909DL2011PLC299537 . THIS COMPANY DULY FILED ITS RETURN OF INCOME BEFORE ITO WARD 9(3), KOLKATA AND WAS HAVING PAN AAGCP1423K. T HIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 47 ,50,55,897/- AS ON 31/03/2012. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILA BLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE I S NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE AP PLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS F ILED IN THE PAPER BOOK. 27. IN RESPECT OF M/S. MOONDHARA MERCANTILE PVT. LT D., LD. AR DREW OUR ATTENTION TO PAGES 165-208 OF THE PAPER BOOK WHEREIN WE NOTE THA T THIS COMPANY INVESTED A SUM OF RS.1,00,00,000/- IN THE APPELLANT COMPANY. THE SHAR E APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THIS COMPANY WAS INCORPORATED ON 13.0 5.2010 AND WAS HAVING COMPANY IDENTIFICATION NUMBER U51909WB2010PTC147644. THIS C OMPANY DULY FILED ITS RETURN OF INCOME BEFORE ITO WARD 10(2), KOLKATA AND WAS HAVIN G PAN AAGCM5216R. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESE RVES AND SURPLUS OF RS. 6,00,45,359/- AS 24 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 ON 31.03.2012. THE COPY OF THE BANK STATEMENT OF TH E COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THI S COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF TH E BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. 28. IN RESPECT OF M/S. FUTURESOFT SUPPLIERS PVT. LT D ., LD. AR DREW OUR ATTENTION TO PAGES 209-252 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY INVESTED A SUM OF RS.2,00,00,000/- IN THE APPELLANT COMPANY. THE SHAR E APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THIS COMPANY WAS INCORPORATED ON 01.0 8.2011 AND WAS HAVING COMPANY IDENTIFICATION NUMBER U51909WB2011PTC165689. THIS C OMPANY DULY FILED ITS RETURN OF INCOME BEFORE ITO WARD 11(2), KOLKATA AND WAS HAVIN G PAN AABCF7789D. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESE RVES AND SURPLUS OF RS. 38,87,09,882/- AS ON 31.03.2012. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THI S COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF TH E BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. 29. IN RESPECT OF M/S. FAIRLINK MERCANTILE PVT. LT D., LD. AR DREW OUR ATTENTION TO PAGES 253-299 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY INVESTED A SUM OF RS. 4,00,00,000/- IN THE APPELLANT COMPANY. THE SHARE A PPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THIS COMPANY WAS INCORPORATED ON 01.08.2011 AND WAS HAVING COMPANY IDENTIFICATION NUMBER U51909WB2011PTC165688. THIS C OMPANY DULY FILED ITS RETURN OF INCOME BEFORE ITO CIRCLE 2(1), KOLKATA AND WAS HAVI NG PAN AABCF7790E. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 49,99,21,78U- AS ON 31/03/20L2. THE COPY OF THE BANK STATEMENT OF THE C OMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TA KEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMP ANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. 25 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 30. FROM THE DETAILS AS AFORESAID WHICH EMERGES FRO M THE PAPER BOOK FILED BEFORE US AS WELL AS BEFORE THE LOWER AUTHORITIES, IT IS VIVID T HAT ALL THE SHARE APPLICANTS ARE (I) INCOME TAX ASSESSEES, (II) THEY ARE FILING THEIR RETURN OF IN COME, (III) THE SHARE APPLICATION FORM AND ALLOTMENT LETTER IS AVAILABLE ON RECORD, (IV) THE S HARE APPLICATION MONEY WAS MADE BY ACCOUNT PAYEE CHEQUES, (V) THE DETAILS OF THE BANK ACCOUNTS BELONGING TO THE SHARE APPLICANTS AND THEIR BANK STATEMENTS, (VI) IN NONE OF THE TRAN SACTIONS THE AO FOUND DEPOSIT IN CASH BEFORE ISSUING CHEQUES TO THE ASSESSEE COMPANY, (VI I) THE APPLICANTS ARE HAVING SUBSTANTIAL CREDITWORTHINESS WHICH IS REPRESENTED BY A CAPITAL AND RESERVE AS NOTED ABOVE. 31. AS NOTED FROM THE JUDICIAL PRECEDENTS CITED ABO VE, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE THEN THERE IS A DUTY CA STED UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CREDIT FOUND IN HIS BOOKS. IN THE INSTANT CASE, THE CREDIT IS IN THE FORM OF RECEIPT OF SHARE CAPITAL WITH PREMIUM FROM SHARE AP PLICANTS. THE NATURE OF RECEIPT TOWARDS SHARE CAPITAL IS SEEN FROM THE ENTRIES PASSED IN TH E RESPECTIVE BALANCE SHEETS OF THE COMPANIES AS SHARE CAPITAL AND INVESTMENTS. IN RES PECT OF SOURCE OF CREDIT, THE ASSESSEE HAS TO PROVE THE THREE NECESSARY INGREDIENTS I.E. IDENT ITY OF SHARE APPLICANTS, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF SHARE APPLICAN TS. FOR PROVING THE IDENTITY OF SHARE APPLICANTS, THE ASSESSEE FURNISHED THE NAME, ADDRES S, PAN OF SHARE APPLICANTS TOGETHER WITH THE COPIES OF BALANCE SHEETS AND INCOME TAX RETURNS . WITH REGARD TO THE CREDITWORTHINESS OF SHARE APPLICANTS, AS WE NOTED SUPRA, THESE COMPANIE S ARE HAVING CAPITAL IN SEVERAL CRORES OF RUPEES AND THE INVESTMENT MADE IN THE APPELLANT COM PANY IS ONLY A SMALL PART OF THEIR CAPITAL. THESE TRANSACTIONS ARE ALSO DULY REFLECTED IN THE BALANCE SHEETS OF THE SHARE APPLICANTS, SO CREDITWORTHINESS IS PROVED. EVEN IF THERE WAS ANY DOUBT IF ANY REGARDING THE CREDITWORTHINESS OF THE SHARE APPLICANTS WAS STILL SUBSISTING, THEN AO SHOULD HAVE MADE ENQUIRIES FROM THE AO OF THE SHARE SUBSCRIBERS AS H ELD BY HONBLE JURISDICTIONAL HIGH COURT IN CIT VS DATAWARE (SUPRA) WHICH HAS NOT BEEN DONE, SO NO ADVERSE VIEW COULD HAVE BEEN DRAWN. THIRD INGREDIENT IS GENUINENESS OF THE TRANSACTIONS, FOR WHICH WE NOTE THAT THE MONIES HAVE BEEN DIRECTLY PAID TO THE ASSESSEE COMP ANY BY ACCOUNT PAYEE CHEQUES OUT OF SUFFICIENT BANK BALANCES AVAILABLE IN THEIR BANK AC COUNTS ON BEHALF OF THE SHARE APPLICANTS. IT WILL BE EVIDENT FROM THE PAPER BOOK THAT THE APPELL ANT HAS EVEN DEMONSTRATED THE SOURCE OF MONEY DEPOSITED INTO THEIR BANK ACCOUNTS WHICH IN T URN HAS BEEN USED BY THEM TO SUBSCRIBE 26 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 TO THE ASSESSEE COMPANY AS SHARE APPLICATION. HENCE THE SOURCE OF SOURCE OF SOURCE IS PROVED BY THE ASSESSEE IN THE INSTANT CASE THOUGH T HE SAME IS NOT REQUIRED TO BE DONE BY THE ASSESSEE AS PER LAW AS IT STOOD/ APPLICABLE IN THIS ASSESSMENT YEAR. THE SHARE APPLICANTS HAVE CONFIRMED THE SHARE APPLICATION IN RESPONSE TO THE NOTICE U/S 133(6) OF THE ACT AND HAVE ALSO CONFIRMED THE PAYMENTS WHICH ARE DULY CORROBORATED WITH THEIR RESPECTIVE BANK STATEMENTS AND ALL THE PAYMENTS ARE BY ACCOUNT PAYEE CHEQUES. 32. WE ALSO NOTE THAT RECENTLY THE ITAT KOLKATA IN SEVERAL CASES HAS DELETED THE ADDITION ON ACCOUNT OF SHARE APPLICATION IN SIMILAR CIRCUMST ANCES. THE RELEVANT PORTION OF THE DECISIONS ARE AS FOLLOWS: (A) THE LD ITAT KOLKATA. IN DC IT VS GLOBAL MERCANT ILES PVT.LTD IN ITA NO. 1669/KOL/2009 DATED 13-01-2016. IN THIS THE DECISIO N THE LD. TRIBUNAL HELD AS FOLLOWS: 3.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BOOK FILED BY T HE ASSESSEE. THE FACTS STATED HEREINABOVE REMAIN UNDISPUTED ARE NOT REITERATED HE REIN FOR THE SAKE OF BREVITY. WE FIND THAT THE ASSESSEE HAD GIVEN THE COMPLETE DETAI LS ABOUT THE SHARE APPLICANTS CLEARLY ESTABLISHING THEIR IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF TRANSACTION PROVED BEYOND DOUBT AND HAD DULY DISCHARGED ITS ONU S IN FULL. NOTHING PREVENTED THE LEARNED AO TO MAKE ENQUIRIES FROM THE ASSESSING OFF ICERS OF THE CONCERNED SHARE APPLICANTS FOR WHICH EVERY DETAILS WERE VERY MUCH M ADE AVAILABLE TO HIM BY THE ASSESSEE. WE FIND THAT THE RELIANCE PLACED BY THE L EARNED LD. CIT(1) ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS LOV ELY EXPORTS (P) UD REPORTED IN (2008) 216 CTR 195 (SC) IS VERY WELL FOUNDED, WHERE IN, IT HAS BEEN VERY CLEARLY HELD THAT THE ONLY OBLIGATION OF THE COMPANY RECEIVING T HE SHARE APPLICATION MONEY IS TO PROVE THE EXISTENCE OF THE SHAREHOLDERS AND FOR WHI CH THE ASSESSEE HAD DISCHARGED THE ONUS OF PROVING THEIR EXISTENCE AND ALSO THE SOURCE OF SHARE APPLICATION MONEY RECEIVED. 3.4. 1. WE ALSO FIND THAT THE IMPUGNED ISSUE IS ALS O COVERED BY THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS ROSEBERRY MERCANTILE (P) LTD IN GA NO. 3296 OF 2010 ITAT NO. 241 OF 2010 DATED 10.1.2011, WHEREIN THE- QUESTIONS RAISED BEFORE THEIR LORDSHIPS AND DECISION RENDERED THEREO N IS AS UNDER:- 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTE RED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTED MONEY AND THE LD. CIT(A) OUGHT TO HAVE HELD THAT TH E ASSESSEE HAD NOT ESTABLISHED THE GENUINENESS OF THE TRANSACTION. ' IT A NO. 1669/KOI/2009-C-AM M/S. GLOBAL MERCANTILES PVT. LTD 11 HELD AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND A FTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CASES OF CIT VS M/S LOVELV EXPORTS PVT LTD, WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISION IN FAVOUR OF THE ASSESSEE AN D THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEAL IS DEVOI D OF ANY SUBSTANCE AND IS DISMISSED. 3.4.2. IN VIEW OF THE AFORESAID FINDINGS AND RESPEC TFULLY FOLLOWING THE DECISION OF THE APEX COURT (SUPRA) AND JURISDICTIONAL HIGH COURT (S UPRA) , WE FIND NO INFIRMITY IN THE 27 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 ORDER OF THE LEARNED CIT(A) AND ACCORDINGLY, THE GR OUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 4. THE LAST GROUND TO BE DECIDED IN THIS APPEAL OF THE REVENUE IS AS TO WHETHER THE LEARNED CIT(A) IS JUSTIFIED IN DELETING THE ADDITIO N U/S 68 OF THE ACT MADE IN RESPECT OF ALLOTMENT OF SHARES TO 20 INDIVIDUALS FOR AN AMO UNT OF RS.57,00,000/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. 1. THE BRIEF FACT OF THIS ISSUE IS THAT THE ASSE SSEE HAD RECEIVED SHARE APPLICATION MONIES FROM 20 INDIVIDUALS IN THE EARLIER YEAR WHIC H WERE KEPT IN SHARE APPLICATION MONEY ACCOUNT. DURING THE ASST YEAR UNDER APPEAL, T HE ASSESSEE ALLOTTED SHARES TO THESE 20 INDIVIDUALS OUT OF TRANSFERRING THE MONIES FROM SHARE APPLICATION MONEY ACCOUNT TO SHARE CAPITAL ACCOUNT. THE DETAILS OF 20 INDIVIDUALS ARE REFLECTED IN PAGE 6 & 7 OF THE LEARNED CIT(A) ORDER. THE LEARNED AO ASK ED THE ASSESSEE TO PRODUCE THE SHAREHOLDERS BEFORE HIM. HE FOUND THAT THE ASSESSEE DID NOT DO SO BUT FURNISHED COPIES OF PAY ORDERS USED FOR PAYMENTS TO THE ASSES SEE COMPANY AND ALSO FURNISHED INCOME TAX PARTICULARS AND BALANCE SHEETS OF ALL TH E SHAREHOLDERS. THE LEARNED AO ON ANALYZING ALL THE BALANCE SHEETS OBSERVED THAT THE SHAREHOLDERS HAVE PALTRY INCOME AND SMALL SAVINGS AND NONE OF THEM HAVE ANY BANK AC COUNT AND HUGE CASH BALANCES WERE SHOWN IN THEIR HANDS OUT OF WHICH PAY ORDERS W ERE OBTAINED. BASED ON THIS, THE LEARNED AO CONCLUDED THAT THESE SHAREHOLDERS DO NOT HAVE CREDITWORTHINESS TO INVEST IN THE ASSESSEE COMPANY AND BROUGHT THE ENTIRE SUM OF RS. 57,00,000/- TO TAX AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4.2. ON FIRST APPEAL, THE LEARNED CIT(A) OBSERVED T HAT ENTIRE SHARE APPLICATION MONIES OF RS. 57,00,000/- WE RECEIVED DURING THE PR EVIOUS YEAR 2004-05 RELEVANT TO ASST YEAR 2005-06 FROM 20 PERSONS AND THE SHARES WE RE ALLOTTED TO THEM DURING THE ASST YEAR UNDER APPEAL. HE OBSERVED THAT THE ASSESS EE HAD FURNISHED DETAILS OF THE SHARE APPLICANTS GIVING THE DATE WISE RECEIPTS, MOD E OF PAYMENT, AMOUNT, NAME, ADDRESS, INCOME TAX RETURNS, PA NO. OF SHARE APPLIC ANTS ALONG WITH THEIR BALANCE SHEET. THE LEARNED CITA ALSO OBSERVED THAT THE ASSE SSEE IN ITS REPLY TO SHOW CAUSE NOTICE BEFORE THE LEARNED AO HAD REQUESTED HIM TO U SE HIS POWER AND AUTHORITY FOR THE PHYSICAL APPEARANCE OF THE SHAREHOLDERS WHICH W AS NOT EXERCISED BY THE LEARNED AO. INSTEAD THE LEARNED AO CONTINUED TO INSIST ON T HE ASSESSEE TO PRODUCE THE SHAREHOLDERS BEFORE HIM. HE ULTIMATELY CONCLUDED TH AT THE ASSESSEE HAD DULY DISCHARGED ITS ONUS OF PROVIDING COMPLETE DETAILS O F THE SHAREHOLDERS AND IN ANY CASE, NO ADDITION COULD BE MADE U/S 68 OF THE ACT IN THE ASST YEAR UNDER APPEAL AS NO SHARE APPLICATION MONIES WERE RECEIVED DURING THE ASST YE AR UNDER APPEAL. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US BY FILING THE FOLLOW ING GROUND:- 'THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE U/S 68 IN RESPECT OF THE ALLOTMENT OF SHARES TO 20 NUMBERS OF INDIVIDUAL INVESTORS FOR AN AMOUNT OF RS . 57 LAKHS, WHERE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINES S OF THE INVESTORS WERE NOT ESTABLISHED. 4.3. THE LEARNED DR PRAYED FOR ADMISSION OF THE ADD ITIONAL GROUND RAISED BEFORE US AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED A O. IN RESPONSE TO THIS, THE LEARNED AR FAIRLY CONCEDED TO ADMISSION OF THIS ADD ITIONAL GROUND AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). 4.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BOOK FILED BY T HE ASSESSEE. WE FIND THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE SEPARATELY BEFORE US VIDE ITS COVERING LETTER DATED 9. 12.2011 IS ADMITTED AS IT APPEARS TO BE A GENUINE AND BONAFIDE ERROR OF OMISSION ON THE PART OF THE REVENUE FROM NOT RAISIN G THIS GROUND IN THE ORIGINAL 28 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 GROUNDS OF APPEAL FILED ALONG WITH THE MEMORANDUM O F APPEAL. MOREOVER, IT DOES NOT REQUIRE ANY FRESH EXAMINATION OF FACTS. HENCE THE S AME IS ADMITTED HEREIN FOR THE SAKE OF ADJUDICATION. 4.4. 1. WE FIND FROM THE DETAILS AVAILABLE ON RECOR D THAT THE SHARE APPLICATION MONIES FROM 20 INDIVIDUALS IN THE SUM OF RS.57,00,000/- HA S BEEN RECEIVED BY THE ASSESSEE DURING THE FINANCIAL YEAR 2004-05 RELEVANT TO ASST YEAR 2005-06 AND ONLY THE SHARES WERE ALLOTTED TO THEM DURING THE ASST YEAR UNDER AP PEAL. ADMITTEDLY NO MONIES WERE RECEIVED DURING THE ASST YEAR UNDER APPEAL AND HENC E THERE IS NO SCOPE FOR INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. HENCE WE H OLD THAT THE ORDER PASSED BY THE LEARNED CITA IN THIS REGARD DOES NOT REQUIRE ANY IN TERFERENCE. ACCORDINGLY THE GROUND NO. 3 RAISED BY THE REVENUE IS DISMISSED. (B) THE ITAT KOLKATA IN R.B HORTICULTURE & ANIMAL PROJECTS CO. LTD, ITA NO. 632/KOLL2011 DATED 13-01-2016. IN THIS THE DECISION THE LD. TRIBUNAL HELD AS FOLLOWS: 6. WE HAVE HEARD THE LEARNED DR AND WHEN THE CASE WAS CALLED ON FOR HEARING , NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, WE FIND FROM THE FILE THAT THE ASSESSEE HAD FILED A DETAILED PAPER BOOK AND WRITTEN SUBMISSIONS. HENCE THE CASE IS DISPOSED OFF BASED ON THE ARGUMENTS OF THE LEARNED DR AND WRITTEN SUBMISSIONS AND PAPER BOOK ALREADY AVAILABLE ON RECORD. THE FACTS STATED IN THE LEARNED CIT(A) WERE NOT CONTROVERTED BY THE LEARNED DR BEFORE US. WE FIND THAT THE ASSESSEE HAD GIVEN THE COMPLETE DETAILS ABOUT THE SHARE APPLICANTS CLEARLY ESTABLISHING THEIR IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF TRANSACTION PROVED BEYOND DOUBT AND HAD DULY DISCHARGED ITS ONUS IN FU LL. NOTHING PREVENTED THE LEARNED AO TO MAKE ENQUIRIES FROM THE ASSESSING OFFICERS OF THE C ONCERNED SHARE APPLICANTS FOR WHICH EVERY DETAILS WERE VERY MUCH MADE AVAILABLE TO HIM BY THE ASSESSEE. WE FIND THAT THE RELIANCE PLACED BY THE LEARNED CITA ON THE DECISION OF THE H ON'BLE APEX COURT IN THE CASE OF CIT VS LOVELV EXPORTS (P) LTD REPORTED IN (2008) 216 CTR 1 95 (SC) IS VERY WELL FOUNDED, WHEREIN, IT HAS BEEN VERY CLEARLY HELD THAT THE ONLY OBLIGATION OF THE COMPANY RECEIVING THE SHARE APPLICATION MONEY IS TO PROVE THE EXISTENCE OF THE SHAREHOLDERS AND FOR WHICH THE ASSESSEE HAD DISCHARGED THE ONUS OF PROVING THEIR EXISTENCE AND ALSO THE SOURCE OF SHARE APPLICATION MONEY RECEIVED. 6. 1. WE ALSO FIND THAT THE IMPUGNED ISSUE IS ALSO COVERED BY THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS ROSEBERRV MERCANTI LE (P) LTD IN GA NO. 3296 OF 2010 ITAT NO. 241 OF 2010 DATED 10.1.2011, WHEREIN THE QUESTI ONS RAISED BEFORE THEIR LORDSHIPS AND DECISION RENDERED THEREON IS AS UNDER:- - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTERED INT O BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTE D MONEY AND THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSEE HAD NOT ESTABL ISHED THE GENUINENESS OF THE TRANSACTION.' HELD AFTER HEARING THE LEARNED COUNSE L FOR THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CA SES OF CIT VS M/S LOVELY EXPORTS PVT LTD, WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISION IN FAVOU R OF THE ASSESSEE AND THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APP EAL. THE APPEAL IS DEVOID OF ANY SUBSTANCE AND IS DISMISSED. 6.2. WE FIND THAT THE ISSUE IS ALSO COVERED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS VALUE CAPITAL SERVICES P LTD REPORTE D IN (2008) 307 ITR 334 (DEL) , WHEREIN IT WAS HELD THAT: 'IN RESPECT OF AMOUNTS SHOWN AS RECEIVED BY THE ASS ESSEE TOWARDS SHARE APPLICATION MONEY FROM 33 PERSONS, THE ASSESSING OFFICER REQUIR ED THE ASSESSEE TO PRODUCE ALL 29 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 THESE PERSONS. WHILE ACCEPTING THE EXPLANATION AND ITA NO. 632/KOI12011--C-AM M/S. R.B HORTICULTURE 6 & ANIMAL PROJ. CO. LTD THE STATEMENTS GIVEN BY THREE PERSONS THE ASSESSING OFFICER FOUND THAT THE RESPONSE FROM THE OTHERS WAS EITHER NOT AVAILABLE OR WAS INADEQUATE AND ADDED AN AMOUNT OF RS. 46 LAK HS PERTAINING TO 30 PERSONS TO THE INCOME OF THE ASSESSEE. THE COMMISSIONER (APPEALS) UPHELD THE DECISION OF T HE ASSESSING OFFICER. ON APPEAL, THE TRIBUNAL SET ASIDE THE ORDER OF THE COMMISSIONE R (APPEALS) AND DELETED THE ADDITIONS. ON FURTHER APPEAL: HELD, DISMISSING THE APPEAL, THAT THE ADDITIONAL BU RDEN WAS ON THE DEPARTMENT TO SHOW THAT EVEN IF THE SHARE APPLICANTS DID NOT HAVE THE MEANS TO MAKE THE INVESTMENT, THE INVESTMENT MADE BY THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOM E OF THE ASSESSEE. NO SUBSTANTIAL QUESTION OF LAW AROSE. ' 6.3. WE FIND THAT THE ARGUMENT OF THE LEARNED DR TO SET ASIDE THIS ISSUE TO THE FILE OF THE LEARNED AO FOR VERIFICATION OF SHARE SUBSCRIBERS WO ULD NOT SERVE ANY PURPOSE AS THE RATIO DECIDED IN THE ABOVE CASES IS THAT IN ANY CASE, NO ADDITION COULD BE MADE IN THE HANDS OF THE RECIPIENT ASSESSEE. IN VIEW OF THE AFORESAID FINDIN GS AND RESPECTFULLY FOLLOWING THE DECISION OF THE APEX COURT (SUPRA), JURISDICTIONAL HIGH COURT ( SUPRA) AND DELHI HIGH COURT (SUPRA) , WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A ) AND ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. (C) THE LD. ITAT KOLKATA IN ITA NO.1061/KO1/2012 I N THE CASE OF ITO WD.3(2) KOL, VS. M/S. STEEL EMPORIUM LTD DATED 05-02-2016. IN TH IS THE DECISION THE LD. TRIBUNAL HELD AS FOLLOWS: 10. WE HAVE HEARD BOTH THE RIVAL PARTIES AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO. BE FORE US THE LD. AR SUBMITTED THAT THE ASSESSEE RAISED SHARE APPLICATION MONEY DURING THE YEAR FROM 25 APPLICANTS. THE AO WAS FURNISHED WITH THE COPY OF FORM 2 OF ALLOTMENT OF S HARES TO THE APPLICANTS AS FILED WITH THE REGISTRAR OF COMPANIES, WEST BENGAL. ON THE DATE OF RECEIPT OF SHARE APPLICATIONS FROM THE APPLICANTS, THEY FURNISHED THEIR ADDRESSES, WHICH W ERE RECORDED IN THE REGISTER OF MEMBERS. THE AO OBSERVED THAT AS PER ROC RECORDS THE ADDRESS ES OF THE NINE COMPANIES WERE DIFFERENT FROM THE ADDRESS AS PER FORM FILED WITH HIM. THE AO ISSUED NOTICES U/S.133(6) TO ALL THE COMPANIES AT THE ADDRESSES FURNISHED IN FORM 2 AS F ILED WITH HIM, WHICH WERE DULY SERVED AT THE GIVEN ADDRESSES. THE A0 ARGUED THAT THE LETTERS SHOULD NOT HAVE BEEN SERVED AT THE GIVEN ADDRESS BY THE ASSESSEE. HE SERVED A SHOW A CAUSE N OTICE DATED 09.12.2011 ASKING FOR THE EXPLANATION FROM THE ASSESSEE AS TO HOW THE NOTICES U/S. 133(6) COULD BE SERVED TO THESE NINE COMPANIES WHO HAD DIFFERENT ADDRESS AS PER ROC RECO RDS. THE AO WAS EXPLAINED VIDE LETTER DATED 20.12.2011 OF THE ASSESSEE THAT THOSE COMPANI ES HAD CHANGED THEIR ADDRESSES SINCE FILING OF FORM 2 WITH THE REGISTRAR. FURTHER, IT WA S NONE OF THE BUSINESS OF THE ASSESSEE TO QUESTION THE ADDRESSES OF THE APPLICANTS AS LONG AS THEY AFFIRM THE ADDRESS. THE APPLICANTS WERE DULY INCORPORATED BODIES UNDER THE COMPANIES A CT. 1956 SINCE LONG. THEY HAVE BEEN REGULARLY FILING THEIR RETURNS OF INCOME UNDER THE INCOME TAX ACT AND ARE BEING ASSESSED BY THE REVENUE SINCE LONG. SOME OF THEM ARE EVEN REGIS TERED AS NON-BANKING FINANCIAL COMPANIES WITH RESERVE BANK OF INDIA. THEY HAVE BE EN FILING RETURNS REGULARLY WITH REGISTRAR OF COMPANIES AND RBI SINCE LONG. THE LETTERS MIGHT HAVE BEEN RECEIVED AT THEIR OLD ADDRESSES BECAUSE IN CASE OF CHANGE IN THE ADDRESS, PEOPLE IN STRUCT THE INCUMBENTS AT OLD ADDRESSES NOT TO REFUSE THE RECEIPT OF LETTERS AND RECEIVE THE SA ME. JUST BECAUSE, A LETTER WAS RECEIVED AT THE OLD ADDRESS INSTEAD OF PRESENT ADDRESS, IT CANNOT B E SAID THAT THE IDENTITY OF THE APPLICANT HAS NOT BEEN VERIFIED. ALL OF THESE COMPANIES HAD DULY REPLIED TO NOTICE U/S. 133(6) AND CONFIRMED THE TRANSACTION WITH ALL THE EVIDENCES. THE AO HAS NOT RAISED ANY OBJECTION ON ANY OF THE 30 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 INFORMATION FURNISHED BEFORE HIM. THE AO HAS NOT AS KED THE RESPECTIVE COMPANY APPLICANTS ALSO TO EXPLAIN THE ALLEGED DISCREPANCY IN THE ADDR ESS. THE AO HAS NOT BROUGHT ANY MATERIAL ON ACCOUNT OF RECORD TO DISBELIEF THE EVIDENCES FUR NISHED WITH HIM AND TREAT THE TRANSACTION AS NOT GENUINE. THE ASSESSEE SUBMITTED THE FOLLOWING M ATERIAL AT THE TIME OF ASSESSMENT. A) COPY OF SHARE APPLICATIONS FROM THE SHARE APPLIC ANTS (COPIES ENCLOSED) B) COPY OF FORM 2 FILED WITH REGISTRAR OF COMPANIES , WEST BENGAL (COPY ENCLOSED) C) COPY OF FORM 18 ABOUT THE REGISTERED OFFICE OF T HE APPLICANTS FOR CHANGE OF ADDRESS SUBSEQUENT TO THE DATE OF ALLOTMENT, I.E. 31.03.200 9 (COPIES ENCLOSED) D) MEMBERS REGISTER E) SHARE APPLICATION & ALLOTMENT REGISTER F) COPY OF BOARD RESOLUTION. G) REPLIES FROM SHARE APPLICANTS TO THE NOTICE U/S. 133(6) ISSUED TO THEM BY THE AO SEEKING INFORMATION AND DOCUMENTS ABOUT THE SOURCES AND TO EXAMINE THEIR IDENTITY, GENUINENESS OF THE TRANSACTION AND THEIR CREDITWORTHINESS. (COPY E NCLOSED). H) COPY OF AUDITED ACCOUNTS. I) COPY OF BANK STATEMENTS. J) COPY OF INCOME TAX ACKNOWLEDGMENT OF RETURN FILE D FOR AY 2009- K) COPY OF PAN CARD. L) DETAILS OF SOURCES OF FUNDS. M) COPY OF COVERING LETTER FOR DELIVERY OF SHARES. N) COPY OF MASTER DATA AS PER MINISTRY OF COMPANY A FFAIRS RECORDS. O) COPY OF ANNUAL RETURN. P) COPY OF MEMORANDUM AND ARTICLES OF ASSOCIATION. FINALLY THE LD. AR RELIED ON THE ORDER OF THE LD. C IT(A 10. 1 FROM THE AFORESAID DISCUSSION WE FIND THAT THE AO HAS MADE THE ADDITION OF THE SH ARE APPLICATION MONEY BECAUSE ALL THE NINE COMPANIES WERE HAVING THE COMMON ADDRESS AND THE NO TICE SENT UNDER SECTION 133(6) WAS RECEIVED BY THE SINGLE PERSON. ACCORDINGLY THE AO O PINED THAT THE ASSESSEE HAS USED ITS UNACCOUNTED MONEY IN THE SHARE APPLICATION TRANSACT IONS. HOWEVER WE FIND THAT ALL THE MONEY RECEIVED IN THE FORM OF SHARE CAPITAL IS DULY SUPPO RTED WITH THE REQUISITE DOCUMENT AS DISCUSSED ABOVE. TO OUR MIND THE BASIS ON WHICH THE ADDITION WAS MADE BY THE AO IS NOT TENABLE. THE LD. DR ALSO COULD NOT BROUGHT ANYTHING ON RECORD TO CONTROVERT THE FINDINGS OF THE LD. CIT(A). IN VIEW OF ABOVE WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE ID. CIT(A). ACCORDINGLY THE GROUND RAISED BY REVENUE IS DISMISS ED. (D) THE LD ITAT KOLKATA IN ITO VS CYGNUS DEVELOPERS (I) P LTD IN ITA NO. 282/KOL/2012 DATED 2.3.2016. IN THIS THE DECISION THE LD. TRIBUN AL HELD AS FOLLOWS: 6. ON APPEAL BY THE ASSESSEE THE CIT(A) DELETED TH E ADDITION MADE BY THE AO OBSERVING AS FOLLOWS 31 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 '6) I HAVE CONSIDERED THE SUBMISSION OF THE APPELLA NT AND PERUSED THE ASSESSMENT ORDER. I HAVE ALSO GONE THROUGH THE DETAILS AND DOCUMENTS FI LED BY THE APPELLANT COMPANY IN THE COURSE OF ASSESSMENT: PROCEEDINGS VIDE LETTER DT. 3 -10-2007. ON CAREFUL CONSIDERATION OF THE FACTS AND IN LAW I AM OF THE OPINION THAT THE AO WA S NOT JUSTIFIED IN MAKING, THE ADDITION AGGREGATING TO RS.54,00,000/- U/S.68 OF THE ACT BEI NG THE AMOUNT OF SHARE APPLICATION MONEY BY HOLDING THAT THE APPELLANT COMPANY HAS FAILED TO PROVE THE IDENTITY, AND CREDITWORTHINESS OF THE CREDITORS AS WELL AS THE GENUINENESS OF TRANSAC TIONS. IT IS OBSERVED THAT ALL THE THREE SHARE APPLICANT COMPANIES I.E. M/S. SHREE SHYAM TREXIM PV T. LTD., M/S NAVALCO COMMODITIES PVT. LTD. AND M/S. JEWELLOCK TREXIM PVT. LTD. HAD FILED THEIR CONFIRMATIONS WHEREIN EACH OF THEM CONFIRMED THAT THEY HAD APPLIED FOR SHARES OF THE A PPELLANT -COMPANY. ALL THE THREE COMPANIES PROVIDED- THE CHEQUE NUMBER, COPY OF BANK STATEMENT S AND THEIR PAN. IT IS OBSERVED THAT THESE COMPANIES ALSO FILED, COPIES OF THEIR RETURN OF INC OME AND FINANCIAL STATEMENTS FOR AS WELL AS COPY OF THEIR ASSESSMENT ORDER U/S. 143(3) OF THE I . T ACT FOR AY 2005-06. IN THE CASE OF M/S. JEWELLOCK TREXIM PVT. LTD. THE ASSESSMENT FOR AY 20 05-06 WAS COMPLETED BY THE ITO WARD 9(3), KOLKATA AND THE ASSESSMENTS IN THE CASE OF M/ S. NAVALCO COMMODITIES PVT. LTD. AND M/S. SHREE SHYAM TREXIM PVT. LTD. FOR A. Y.2005-06 AND A Y.2004-05 RESPECTIVELY WERE COMPLETED BY THE I TO, WARD 9(4), KOLKATA. UNDER THE CIRCUMST ANCES, I AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE SHARE APPLICA NT COMPANIES WERE NOT IN EXISTENCE. THE ASSESSMENT ORDERS WERE COMPLETED ON THE ADDRESS AS PROVIDED BY THE APPELLANT COMPANY IN THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS NOT KNOWN A S TO HOW THE AO'S INSPECTOR HAD REPORTED THAT THE AFORESAID COMPANIES WERE NOT IN EXISTENCE AT THE GIVEN ADDRESS. SINCE THE APPELLANT COMPANY HAD PROVIDED SUFFICIENT DOCUMENTARY EVIDENC ES IN SUPPORT OF ITS CLAIM OF RECEIPT OF SHARE APPLICATION MONEY, I AM OF THE OPINION THAT T HE NO ADDITION U/S.68 COULD BE MADE IN THE HANDS OF APPELLANT COMPANY. ON GOING THROUGH THE VA RIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT, IT IS OBSERVED THAT THE VIEW TAKEN AS ABOVE IS ALSO SUPPORTED BY THEM. IN VIEW OF ABOVE THE AO IS DIRECTED TO DELETE THE ADDI TION OF RS.54,00,000/ -. THE GROUND NOS. 2 AND 3 ARE ALLOWED, ' 7. AGGRIEVED BY THE ORDER OF CIT{A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED DR , WHO RELIED ON THE ORDER OF AO. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDE R OF CIT(A) AND FURTHER DREW OUR ATTENTION TO THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS RAJ KUMAR AGARWAL VIDE ITA NO. 179/2008, DATED 17. 11.2009 WHEREIN TH E HON 'BLE ALLAHABAD HIGH COURT TOOK A VIEW THAT NON PRODUCTION OF THE DIRECTOR OF A PUBLI C LIMITED COMPANY WHICH IS REGULARLY ASSESSED TO INCOME TAX HAVING PAN, ON THE GROUND TH AT THE IDENTITY OF THE INVESTOR IS NOT PROVED CANNOT BE SUSTAINED. ATTENTION WAS ALSO TO T HE SIMILAR RULING OF THE ITAT KOLKATA BENCH IN THE CASE OF ITO VS DEVINDER SINGH SHANT IN IT A NO.20BIKO112009 VIDE ORDER DATED 17.04.2009. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS., WE A RE OF THE VIEW THAT ORDER OF CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. IT MAY BE SEEN FROM THE GROUNDS OF APPEAL RAISED BY THE REVENUE THAT THE REVENUE DISPUTED ONLY THE PROOF OF IDENTITY OF THE SHAREHOLDER. IN THIS REGARD IT IS SEEN THAT FOR A Y.2004-05 SHREE SHYAM TREXIM PVT. LTD., WAS ASSESSED BY ITO, WARD- 9(4), KOLKATA AND THE ORDER OF ASSESSMENT U/S/143(3 ) DATED 25.01.2006 IS PLACED IN THE PAPER BOOK. SIMILARLY NAVALCO COMMODITIES PVT. LTD., WAS ASSESSED TO TAX U/S 143(3) FOR A Y.2005- 06 BY I TO, WARD- 9(4), KOLKATA BY ORDER DATED 20.0 3.2007. SIMILARLY JEWELLOCK TREXIM PVT. LTD WAS ASSESSED TO TAX FOR A Y.2005-06 BY THE VERY SAME ITO- WARD- 9(3), KOLKATA ASSESSING THE ASSESSEE. IN THE LIGHT OF THE ABOVE FACTUAL POS ITION WHICH IS NOT DISPUTED BY THE REVENUE, IT CANNOT BE SAID THAT THE IDENTITY OF THE SHARE APPLI CANTS REMAINED NOT PROVED BY THE ASSESSEE. THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT AS WELL AS ITA T KOLKATA BENCH ON WHICH RELIANCE WAS PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUPPORTS THE VIEW THAT FOR NON PRODUCTION OF DIRECTORS OF THE INVESTOR COMPANY FOR EXAMINATION BY THE AO IT CANNOT BE HELD THAT THE IDENTITY OF A LIMITED COMPANY HAS NOT BEEN ESTABLISHED. FOR THE REASONS GIVEN ABOVE WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE APPEA L OF THE REVENUE. ' 32 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 33. RELIANCE IN THIS REGARD IS ALSO PLACED ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS GANGESHWARI METAL (P) LTD (ITA NO. 5 97 OF 2012) DATED 21.01.2012. IN THIS CASE THE ASSESSEE HAD RECEIVED SHARE APPLICATION MO NEY OF RS.55.50 LACS DURING THE YEAR IN QUESTION. THE ASSESSEE FILED THE COMPLETE NAMES, AD DRESSES OF THE SHARE APPLICANTS, CONFIRMATORY LETTERS FROM THEM, COPIES OF BANK STAT EMENTS OF BOTH THE COMPANY AS WELL AS THE SHARE APPLICANTS AND COPIES OF SHARE APPLICATIO N FORMS. IN SPITE OF THE AFORESAID DOCUMENTARY EVIDENCES THE AO HELD THE EXPLANATION T O BE UNACCEPTABLE AND TREATED THE SHARE APPLICATION AS UNEXPLAINED CASH CREDIT THEREB Y MAKING ADDITION UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961. ON APPEAL THE CIT(APPEALS ) DELETED THE AFORESAID ADDITION HOLDING THAT THE IDENTITY OF THE SHARE APPLICANTS S TOOD ESTABLISHED BEYOND DOUBT, ALL THE PAYMENTS WERE THROUGH ACCOUNT PAYEE CHEQUES AND THE SHARE APPLICANTS WERE REGULAR INCOME-TAX ASSESSEES. THE CIT(APPEALS) FURTHER HELD THAT THE REVENUE DID NOT BRING ANY EVIDENCE ON RECORD TO SUGGEST THAT THE SHARE APPLIC ATION HAD BEEN RECEIVED BY THE ASSESSEE FROM ITS OWN UNDISCLOSED SOURCES NOR ANY MATERIAL W AS BROUGHT ON RECORD TO SHOW THAT .THE APPLICANTS WERE BOGUS. THE REVENUE WAS NEITHER ABLE TO CONTROVERT THE DOCUMENTARY EVIDENCES FILED BY THE APPELLANT NOR PROVE THAT THE SHARE APPLICATION WERE INGENUINE OR THE APPLICANTS WERE NON-CREDITWORTHY. THE FINDINGS OF T HE CIT(APPEALS) WERE UPHELD BY THE INCOME-TAX APPELLATE TRIBUNAL. ON APPEAL TO THE HIG H COURT, THE REVENUE PLACED STRONG RELIANCE ON THE DECISION OF ANOTHER COORDINATE BENC H OF THE SAME COURT IN THE' CASE OF CIT VS NOVO PROMOTERS & FINLEASE (P) LTD (342 ITR 169). THE HIGH COURT HOWEVER HELD THAT THE AFORESAID JUDGMENT WAS DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. THE COURT OBSERVED THAT IN THAT JUDGMENT THE ASSESSING OFFICE R HAD BROUGHT ON RECORD ENOUGH CORROBORATIVE EVIDENCE TO SHOW THAT THE ASSESSEE HA D ROUTED UNACCOUNTED MONIES INTO ITS BOOKS THROUGH MEDIUM OF SHARE SUBSCRIPTION. THE SHA RE APPLICANTS HAD CONFESSED THAT THEY WERE 'ACCOMMODATION ENTRY PROVIDERS'. THE ASSESSING OFFICER IN THE LATTER CASE WAS ABLE TO PROVE WITH ENOUGH MATERIAL THAT THE SHARE SUBSCRIPT ION WAS A PRE-MEDITATED PLAN TO ROUTE UNACCOUNTED MONIES. IN THE PRESENT CASE HOWEVER THE DEPARTMENT WAS UNABLE TO BRING ANY MATERIAL WHATSOEVER SHOWS THAT SHARE APPLICATION WA S IN THE NATURE OF ACCOMMODATION ENTRIES. THE COURT OBSERVED THAT THE APPELLANT HAD FILED SUFFICIENT DOCUMENTARY EVIDENCES TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GENUINENESS OF THE TRANSACTION. THE AO HOWEVER CHOSE TO SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTED ALL THE EVIDENCE IN HIS POSSESSION AND THEN MERELY REJECT THE SAME WITHOUT CONDUCTING ANY 33 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 INQUIRY OR VERIFICATION WHATSOEVER. THE COURT THUS HELD THAT THE DECISION OF CIT VS NOVO PROMOTERS & FINLEASE (P) LTD (342 ITR 169) WAS NOT APPLICABLE TO THE FACTS OF THE CASE. INSTEAD IT WAS HELD THAT THE ISSUE IN HANDS WAS ON THE LINES OF THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (319 ITR 5). ACCORDINGLY THE ADDITION MADE UNDER SECTION 68 ON ACCOUNT OF SHARE APPLICATI ON WAS DELETED. 34. WE WOULD LIKE TO REPRODUCE THE HON'BLE HIGH CO URT ORDER IN CIT VS. GANGESHWARI METAL P. LTD. IN ITA NO. 597/2012 JUDGEMENT DATED 2 1.1.2013, THE HON'BLE HIGH COURT AFTER CONSIDERING THE DECISIONS IN THE CASE OF NOVA PROMO TERS AND FINLEASE PVT. LTD. 342 ITR 169 AND JUDGEMENT IN THE CASE OF CIT VS. LOVELY EXPORTS 319 ITR (SAT 5)(S.C) HELD AS FOLLOWS:- AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES O F CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSING OFFICER CARRIES OUT THE EXERCISE WHIC H IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER 'SITS BACK WITH FOLDED HANDS' TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COMES FORWARD T O MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRESENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER AFTER NOTING THE FACTS, MERELY REJECTED THE SAME. THIS WO ULD BE APPARENT FROM THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER TO TH E FOLLOWING EFFECT:- ''INVESTIGATION MADE BY THE INVESTIGATION WING OF T HE DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRANSACTION OF ACCOMMOD ATION ENTRY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF RS.1, 11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THA T THERE IS NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS RECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WA S STATED THAT THE ACTUAL AMOUNT RECEIVED WAS RS.55,50,000/- AND NOT RS.1,11,50,000/ - AS MENTIONED IN THE NOTICE. THE ASSESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTION OF THE ASSESSEE IN RESPECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT RS.55,50,000/-. THE ASSESSEE HAS FURTHER TRIES T O EXPLAIN THE SOURCE OF THIS AMOUNT OF RS.55,50,000/- BY FURNISHING COPIES OF SHARE APP LICATION MONEY, BALANCE4 SHEET ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT TH E QUESTION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANA TION OF THE ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REM AINS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS HAS BEEN ARRIVED BY THE INVESTIGATI ON WING OF THE DEPARTMENT. AS SUCH ENTRIES OF RS.5~50/000/- RECEIVED BY THE ASSESSEE A RE TREATED AS AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED TO IT S INCOME. SINCE I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F ITS INCOME/ PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITIATED SEPARAT ELY. THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. ( SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVOUR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CLEARLY DISTINGUISHABLE AND FALL I N THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA). THER E WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISH ED ALL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. IN SUCH AN EVENTUALITY NO ADDITI ON CAN BE MADE UNDER SECTION 68 OF THE INCOME TAX ACT 1961. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBUNAL IS CORRECT IN LAW 34 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 35. THE CASE ON HAND CLEARLY FALLS IN THE CATEGORY WHERE THERE IS LACK OF ENQUIRY ON THE PART OF THE A. O. AS IN THE CASE OF GANJESHWARI MET ALS (SUPRA). B) IN THE CASE OF FINLEASE PVT LTD. 342 ITR 169 (SU PRA) IN ITA 232/2012 JUDGEMENT DT. 22.11.2012 AT PARA 6 TO 8/ IT WAS HELD AS FOLLO WS. '6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE THE DISCUSSION BY THE COMMISSIONER OF INCOME TAX (APPEA LS) WOULD REVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED CO PIES ISSUED BY THE ROC IN RELATION TO THE SHARE APPLICATION AFFIDAVITS OF THE DIRECTOR S, FORM 2 FILED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APPLICANT FOR COMPA NY'S SHARES, CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE ASSESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF T HE INVESTIGATION REPORT AND THE STATEMENT OF MR. MAHES GARG. TO ELEVATE THE INFEREN CE WHICH CAN BE DRAWN ON THE BASIS OF READING OF SUCH MATERIAL INTO JUDICIAL CON CLUSIONS WOULD BE IMPROPER, MORE SO WHEN THE ASSESSEE PRODUCED MATERIAL. THE LEAST T HAT THE ASSESSING OFFICER OUGHT TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NEC ESSARY, INVOKING HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIREC TORS. NO EFFORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCLOSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSING O FFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAIN FA CTS AND THE STATEMENTS OF MR.MAHESH GARG THAT THE INCOME SOUGHT TO BE ADDED F ELL WITHIN THE DESCRIPTION OFS.68 OF THE INCOME TAX ACT 1961. HAVING REGARD TO THE EN TIRETY OF FACTS AND CIRCUMSTANCES, THE COURT IS SATISFIED THAT THE FINDING OF THE TRIB UNAL IN THIS CASE ACCORDS WITH THE RATIO OF THE DECISION OF THE SUPREME COURT IN LOVEL Y EXPORTS (SUPRA). THE DECISION IN THIS CASE IS BASED ON THE PECULIAR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENCE IN SUPPORT OF THE SHARE APPLICATION MONIES, IT IS OPEN TO THE ASSESSING OFF ICER TO EXAMINE IT AND REJECT IT ON TENABLE GROUNDS. IN CASE HE WISHES TO RELY ON THE R EPORT OF THE INVESTIGATION AUTHORITIES, SOME MEANINGFUL ENQUIRY OUGHT TO BE CO NDUCTED BY HIM TO ESTABLISH A LINK BETWEEN THE ASSESSEE AND THE ALLEGED HAWALA OPERATO RS, SUCH A LINK WAS SHOWN TO BE PRESENT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P ) LTD. (SUPRA) RELIED UPON BY THE REVENUE. WE ARE THEREFORE NOT TO BE UNDERSTOOD TO C ONVEY THAT IN ALL CASES OF SHARE CAPITAL ADDED UNDER SECTION THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTRACTED, I RRESPECTIVE OF THE FACTS, EVIDENCE AND MATERIAL. ' 36. IN THIS CASE ON HAND, THE ASSESSEE HAD DISCHAR GED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE APPLI CANTS, THEREAFTER THE ONUS SHIFTED TO AO TO DISPROVE THE DOCUMENTS FURNISHED BY ASSESSEE CAN NOT BE BRUSHED ASIDE BY THE AO TO DRAW ADVERSE VIEW CANNOT BE COUNTENANCED. IN THE ABSENCE OF ANY INVESTIGATION, MUCH LESS GATHERING OF EVIDENCE BY THE ASSESSING OFFICER, WE HOLD THAT AN ADDITION CANNOT BE SUSTAINED MERELY BASED ON INFERENCES DRAWN BY CIRCUMSTANCE. A PPLYING THE PROPOSITIONS LAID DOWN IN THESE CASE LAWS TO THE FACTS OF THIS CASE, WE ARE I NCLINED TO UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 35 ITA NO.2278/KOL/2016 M/S. MASTERMIND SHOPPERS PVT. LTD. AY- 2012-13 37. TO SUM UP SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPLAIN T HE NATURE AND SOURCE SHALL BE ASSESSED AS ITS UNDISCLOSED INCOME. IN THE FACTS OF THE PRESENT CAS E, BOTH THE NATURE & SOURCE OF THE SHARE APPLICATION RECEIVED WAS FULLY EXPLAINED BY THE ASS ESSEE. THE ASSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GE NUINENESS OF THE SHARE APPLICANTS. THE PAN DETAILS, BANK ACCOUNT STATEMENTS, AUDITED FINAN CIAL STATEMENTS AND INCOME TAX ACKNOWLEDGMENTS WERE PLACED ON AO'S RECORD. ACCORDI NGLY ALL THE THREE CONDITIONS AS REQUIRED U/S. 68 OF THE ACT I.E. THE IDENTITY, CRED ITWORTHINESS AND GENUINENESS OF THE TRANSACTION WAS PLACED BEFORE THE AO AND THE ONUS SHIFTED TO AO TO DISPROVE THE MATERIALS PLACED BEFORE HIM. WITHOUT DOING SO, THE ADDITION MADE BY THE AO IS BASED ON CONJECTURES AND SURMISES CANNOT BE JUSTIFIED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE, NO ADDITION WAS WARRANTED UNDER SECTION 68 O F THE ACT. THEREFORE, WE DO NOT WANT TO INTERFERE IN THE IMPUGNED ORDER OF LD. CIT(A) WHICH IS CONFIRMED AND CONSEQUENTLY THE APPEAL OF REVENUE IS DISMISSED. 38. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27TH F EBRUARY, 2019 SD/- SD/- (DR. A. L. SAINI) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27TH FEBRUARY, 2019 BISWAJIT (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO, WARD-10 (1), P-7, CHOWRINGHEE SQUA RE, 3 RD FLOOR, KOLKATA 700069. 2 RESPONDENT M/S. MASTERMIND SHOPPERS PVT. LTD., AD -76, SECTOR-I, SALT LAKE CITY, KOLKATA 700064. 3 . THE CIT(A), 4. 5. CIT , DR, / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR