ACIT CIR 6(3)2, MUMBAI V. KHYATI REALTORS P.LTD, MUMBAI

ITA 2356/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6849 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 03-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS
• Keywords: Unexplained cash credit; Depreciation
• Section: 143(3); 37(1); 32; 68; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H , BENCH MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI AMARJIT SINGH, JM ITA NO. 2356 /MUM/201 7 ( ASSESSMENT YEAR : 2012 - 13) DCIT CIR 6(3)2 19 TH FLOOR, R.NO.522 5 TH FLOOR, AAY AKAR BHAVAN M.K. ROAD, MUMBAI 400 020 VS. M/S. KHYATI REALTORS P.LTD. 301/68, MANEK BHAVAN 1 ST HINDU COLONY DADAR (E) MUMBAI 400 014 PAN/GIR NO. AACCM6461E (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI B. SRINIVAS ASSESSEE BY SHRI VIJAY MEHTA & SHRI ANUJ KISNADWALA DATE OF HEARING 19 / 06 /2019 DATE OF PRONOUNCEMENT 26 / 07 /2019 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 2356/MUM/2017 FOR A.Y. 2012 - 13 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) - 12, MUMBAI IN APPEAL NO. CIT(A) - 12/DCIT - 6(3)(2)/151/15 - 16 DATED 23/01/2017 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 27/03/2015 BY THE LD. DY. C OMMISSIONER OF INCOME TAX 6(3)(2), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 2 2. THE ONLY ISSUE TO BE DECIDED IN THIS A PPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION OF RS 93,09,47,000/ - MADE BY THE LD AO U/S 68 OF THE ACT IN T HE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE, TRADING OF TRANSFERABLE DEVELOPMENT RIGHTS AND FINANCE SERVICES. THE RETURN OF INCOME FOR THE ASST YEAR 2012 - 13 WA S FILED BY THE ASSESSEE ON 28.9.2012 DECLARING TOTAL INCOME OF RS 4,87,88,670/ - . DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SHOWED A SUM OF RS 65,00,28,000/ - AS RECEIVABLE TOWARDS SALE OF RIGHTS UNDER THE HEAD OTHER NON - CURRENT ASSETS IN THE B ALANCE SHEET. THE LD AO OBSERVED THAT NO INCOME WAS OFFERED BY THE ASSESSEE COMPANY ON THIS COUNT. THE ASSESSEE EXPLAINED AS UNDER: - A) M/S ADITYA THERMAL ENERGY P LTD ACQUIRED 1013 EQUITY SHARES OF M/S ALFA INFRPORP P LTD FROM THE PROMOTERS OF M/S AL FA INFRPROP P LTD , ALONG WITH ATTACHED RIGHTS BEING CLEARANCES / LICENSES / PERMITS AND ALL INTANGIBLE ASSETS (HEREINAFTER REFERRED TO AS ATTACHED RIGHTS) ASSOCIATED WITH COAL BASED THERMAL POWER PROJECT OF UPTO 2640 MW CAPACITY IN THE STATE OF ANDHRA P RADESH TO BE SET UP , AS PER TERMS OF ARTICLE 5A AND 5B OF ARTICLES OF ASSOCIATION OF M/S ALFA INFRPROP P LTD. B) THE ASSESSEE PURCHASED THE SAID SHARES ALONG WITH ATTACHED RIGHTS FROM M/S ADITYA THERMAL ENERGY P LTD FOR RS 94,41,16,000/ - ON 8.12.2011 AT THE RATE OF RS 9,32,000/ - EACH. IT WAS FURTHER SUBMITTED THAT AS PER ARTICLE 5A AND 5B OF ARTICLES OF ASSOCIATION OF M/S ALFA INFRPROP P LTD , THE SHAREHOLDER OF M/S ALFA INFRPROP P LTD I.E THE ASSESSEE, WAS HOLDING CERTAIN RIGHTS ASSOCIATED WITH COAL BASED THERMAL POWER PROJECT. ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 3 C) THE ASSESSEE SOLD 1 SHARE ALONG WITH RIGHTS ON 24.3.2012 FOR RS 9,32,000/ - TO MR SUDHIR VALIA. HENCE AT THIS STAGE, THE ASSESSEE ALONG WITH MR SUDHIR VALIA WERE HOLDING THE SHARES OF M/S ALFA INFRPROP P LTD WITH ATTACHE D RIGHTS THEREON. D) AS PER THE REQUEST OF ALFA INFRPROP P LTD, THE ASSESSEE COMPANY AGREED TO DELETE THE SAID ARTICLES 5A AND 5B OF ARTICLES OF ASSOCIATION AND CONSEQUENTLY TO RELEASE TO ALFA INFRPROP P LTD ALL THE RIGHTS AND ASSETS ATTACHED TO THE SHAE RS, BEING CLEARANCES/ PERMITS/LICENSES AND ALL INTANGIBLE ASSETS, RIGHTS AND BENEFITS WHICH ARE ASSOCIATED WITH ANY PROJECT BEING SET UP OR TO BE SET UP BY ALFA INFRPROP P LTD. E) SUBSEQUENTLY, ON 26.3.2012, THE RIGHTS WERE DETACHED FROM THE SHARES AND ASSESSEE SOLD RIGHTS IN 1012 SHARES SEPARATELY TO M/S ALFA INFRPROP P LTD FOR A CONSIDERATION OF RS 93,00,28,000/ - AT RS 9,19,000/ - EACH. SIMILARLY, MR SUDHIR VALIA ALSO SOLD HIS RIGHT IN 1 SHARE AT RS 9,19,000/ - EACH TO M/S ALFA INFRPROP P LTD. BY THI S PROCESS, M/S ALFA INFRPROP P LTD WAS ABLE TO PURCHASE THE INTANGIBLE ASSETS IN THE FORM OF VARIOUS RIGHTS AS DETAILED ABOVE AND CAPITALIZE THE SAME IN ITS BOOKS AND THEREBY MAKING IT ELIGIBLE TO CLAIM DEPRECIATION THEREON. THE TOTAL OF SALE CONSIDERATI ON IN RESPECT OF THESE TRANSACTIONS OF SALE OF RIGHTS WAS RS 93,09,47,000/ - WHICH INCLUDED MR SUDHIR VALIAS SHARE ALSO FOR RS 9,19,000/ - . F) LATER ON 27.3.2012, THE ASSESSEE SOLD HIS 1012 SHARES (WITHOUT ANY RIGHTS) OF M/S ALFA INFRPROP P LTD TO 4 LIMITED COMPANIES AS UNDER: - FAMILY INVESTMENTS LTD 91 SHARES SOLD AT RS 13000 PER SHARE FOR RS 11,83,000/ - VISION FINSTOCK LTD 304 SHARES SOLD AT RS 13000 PER SHARE FOR RS 39,52,000/ - ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 4 VIRTUOUS FINANCE LTD 526 SHARES SOLD AT RS 13000 PER SHARE FOR R S 68,38,000/ - VIDITI INVESTMENTS LTD 91 SHARES SOLD AT RS 13000 PER SHARE FOR RS 11,83,000/ - 3.1. HENCE THE TOTAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE IS AS UNDER: - SALE OF RIGHTS TO ALFA INFRPROP P LTD (1012 * 919000) 93,00,28,000 SALE OF SHARES WITH RIGHTS TO MR SUDHIR VALIA (1 * 932000) 9,32,000 SALE OF SHARES WITHOUT RIGHTS TO A) FAMILY INVESTMENTS LTD (91 * 13000) 11,83,000 B) VISION FINSTOCK LTD (304 * 13000) 39,52,000 C) VIRTUOUS FINANCE LTD (526 * 13000) 68,38,000 D) VIDITI INVESTMENTS LTD (91 * 13000) 11,83,000 ------------------ 94,41,16,000 ========= OUT OF THESE, RS 28 CRORES WAS PAID TO THE ASSESS EE DURING THE YEAR AND HENCE THE BALANCE SUM OF RS 65,00,28,000/ - WAS SHOWN BY THE ASSESSEE IN ITS BALANCE SHEET AS ON 31.3.2012 AS RECEIVABLE TOWARDS SALE OF RIGHTS IN SCHEDULE 10 UNDER THE HEAD OTHER NON - CURRENT ASSETS. 3.2. SINCE THE PURCHASE CON SIDERATION OF SHARES WITH RIGHTS FOR THE ASSESSEE WAS ALSO RS 94,41,16,000/ - , THE ASSESSEE REPORTED NIL CAPITAL GAINS ON SALE OF SHARES WITH RIGHTS IN RESPECT OF THESE TRANSACTIONS. 3.3. THE LD AO OBSERVED THAT THE DETAILS OF SHAREHOLDERS / DIRECTORS OF THE ENTITIES INVOLVED SHOWS THAT ALL PARTIES ARE OF THE SAME PROMOTERS GROUP WITH COMMON ADDRESS / SHAREHOLDERS AS UNDER: - ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 5 S.N O. NAME OF THE COMPANY SHAREHOLDERS % HOI DIN 9 DIRECTORS 1 ADITYA THERMAL ENERGY P LTD FAMILY INVESTMENT P LTD 38 .94% SUDHIR VALIA DILIP SHANTIL AL SANGH VI TEJASKLRAN PHARMACHEM INDIA P LTD 38.94% VISION FINSTOCK LTD 10.26% 2 KHYATI REALTORS P LTD LAKSHDEEP INVESTMENT AND FINANCE P LTD 100% NILESH GANDHI RAKSH A VALIA 3 FAMILY INV ESTMENT P LTD GROUP CONCERNS OF MR.SUDHIR VALIA 100% PARAS B MEHTA MILIND V GORAD IA 4 TEJASKLRAN PHARMACHEM INDIA P LTD GROUP CONCERNS OF MR.SUDHIR VALIA 100% CHANRA KANT K AGRAW AL MILIND V GORAD IA 5 VISION FINSTOCK LTD SURAKSHA REALTY LTD & OTHERS 100% PARESH PAREKH KHYATI VALIA 6 VIRTUOUS FINANCE PLTD GROUP CONCERNS OF MR.SUDHIR VALIA 100% DINESHK UMAR DESAI ASHOK I BHUTA 7 VIDIFI INVESTMENT PLTD GROUP CONCERNS OF MR.SUDHIR VAL IA 100% SUNIL R AJMERA MILIND V GORAD IA 3.4. THE LD AO OBSERVED THAT ALL THE PARTIES, THE ORIGINAL SELLER ADITYA THERMAL ; THE COMPANY WHOSE SHARES ARE SUBJECT MATTER OF TRANSFER ALFA INFRPROP P LTD ; THE ASSESSEE COMPANY AND THE BUYE RS OF SHARES OF ALFA INFRPROP P LTD FROM THE ASSESSEE COMPANY , ALL BELONG TO THE SAME GROUP WITH COMMON DIRECTORS AND / OR ADDRESS. ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 6 3.5. THE LD AO OBSERVED THAT WITHOUT PAYMENT BEING MADE IN FULL, THE SHARES WERE PURPORTEDLY RECEIVED FROM ADITYA THERMA L. SIMILARLY WITHOUT PAYMENT BEING RECEIVED IN FULL FROM ALFA INFRPROP P LTD FOR PARTING WITH SO CALLED RIGHTS ETC, THE SHARES OF ALFA INFRPROP P LTD WERE PURPORTEDLY TRANSFERRED BY THE ASSESSEE COMPANY TO OTHER PARTIES. 3.6. THE LD AO OBSERVED THAT PU RSUANT TO THE AFORESAID TRANSACTIONS, EFFECTIVELY, A SUM OF RS 94 CRORES WAS PAID FROM THE BOOKS OF ALFA INFRPROP P LTD TO THE ULTIMATE BENEFIT OF ORIGINAL PROMOTERS WHICH IS BEING SHOWN AS INTANGIBLE ASSETS IN THE BOOKS OF ADITYA AS ON 31.3.2011. THE EFF ECTIVE RIGHTS OF SHAREHOLDERS OF ALFA INFRPROP P LTD REMAINS UNCHANGED SINCE THE SAID LICENSES ETC IF ANY, CONTINUES TO BE THE PROPERTY OF ALFA INFRPROP P LTD. 3.7. THE LD AO OBSERVED THAT THE DEFINITION OF SHARES CARRIED THE FOLLOWING RIGHTS AND A LIM ITED LIABILITY : - A) RIGHT TO PARTICIPATE IN THE PROFITS OF THE COMPANY . B) RIGHT TO PARTICIPATE IN THE SURPLUS OF THE COMPANY AT THE TIME OF WINDING UP. C) LIABILITY TO PAY TO THE COMPANY OVER AND ABOVE THE PAID UP CAPITAL ON THE EVENT OF DEFICIT WHICH I S LIMITED TO THE EXTENT OF UNPAID SHARE CAPITAL ON THE SHARES HELD BY THEM. 3.8. THE LD AO FURTHER OBSERVED THAT THE RIGHTS, DUTIES AND LIABILITIES OF ALL SHAREHOLDERS ARE CLEARLY DEFINED AT THE TIME OF ISSUE OF THE SHARES. ONCE THE RIGHTS OF SHAREHOLDER S ARE FIXED, THEY CANNOT BE ALTERED UNLESS THE PROVISIONS OF THE COMPANIES ACT FOR THIS PURPOSE ARE COMPLIED WITH. HE OBSERVED THAT IT IS INCOMPREHENSIBLE AS TO HOW AS A SHAREHOLDER OF ALFA INFRPROP P LTD, THE ASSESSEE COMPANY, WITHOUT PARTING WITH THE S HARE PER ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 7 SE, CAN ALIENATE ANY RIGHT OR ASSET OF ALFA INFRPROP P LTD, MORE SO WHEN SUCH ASSET WAS NOT EVEN REFLECTED IN THE BALANCE SHEET OF ALFA INFRPROP P LTD, AND TRANSFER IT IN FAVOUR OF ALFA INFRPROP P LTD ITSELF. THE LICENSES ETC WERE PURPORTEDLY IN THE NAME OF ALFA INFRPROP P LTD AND THE OWNERSHIP, IF ANY, OVER SUCH RIGHTS VESTS WITH ALFA INFRPROP P LTD IN ITS OWN RIGHT AS A SEPARATE LEGAL ENTITY. THE ASSESEE COMPANY, EVEN AS A SHAREHOLDER HAS NO SEPARATE RIGHT OR EXCLUSIVE RIGHT OVER EACH AND EVERY SUCH ASSET OF THE COMPANY, WHETHER TANGIBLE OR NOT. THE WHOLE CHAIN OF EVENTS SMACKS OF A DUBIOUS ARRANGEMENT WITH A VIEW TO EVADE TAXES ON THE PAYMENT OF RS 93.09 CRORES RECEIVED BY THE ASSESSEE COMPANY FROM ALFA INFRPROP P LTD. IT IS NOTHING BUT A COLO RABLE DEVICE TO EVADE TAXES ON THE SUM RECEIVED BY THE ASSESSEE COMPANY. ACCORDINGLY, THE LD AO STATED THAT THE ONUS IS ON THE ASSESSEE COMPANY TO PROVE THE CASH CREDITS FOUND IN ITS BOOKS IN THE SUM OF RS 93.09 CRORES WHICH IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE COMPANY AS AMOUNT RECEIVED / RECEIVABLE ON SALE OF RIGHTS. THERE ARE NO SUCH ALIENABLE RIGHTS LEGALLY AVAILABLE TO THE ASSESSEE COMPANY. HENCE THE VERY NATURE OF RECEIPT STANDS UNPROVED. BASED ON THESE OBSERVATIONS, THE LD AO ADDED THE SUM OF RS 93,09,47,000/ - AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT IN THE ASSESSMENT. 4. BEFORE THE LD CITA, THE ASSESSEE SUBMITTED THAT THE LD AO DID NOT APPRECIATE THE FACT THAT THERE COULD BE SHARES GIVING CERTAIN SPECIFIC RIGHTS TO THE SHAREHOLDER S OF THE COMPANY. IT WAS FURTHER SUBMITTED THAT THE RIGHTS AND SHARES ARE SEPARATE ASSETS. IT WAS FURTHER SUBMITTED THAT THE SAID TRANSACTION WAS REFLECTED UNDER THE HEAD INVESTMENTS AND SINCE THERE WAS NO GAIN OR LOSS FROM THE ENTIRE TRANSACTION, THE SAME WAS NOT REFLECTED IN PROFIT AND LOSS ACCOUNT. THE LD CITA APPRECIATED ALL THESE CONTENTIONS OF THE ASSESSEE AND DELETED THE ADDITION MADE BY THE LD AO U/S 68 OF THE ACT IN THE SUM OF RS 93,09,47,000/ - . ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 8 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 6. THE LD DR DREW OUR ATTENTION TO THE RELEVANT PORTION OF THE ASSESSMENT ORDER AND THE CONCLUSIONS DRAWN THEREON FOR JUSTIFYING THE ADDITION U/S 68 OF THE ACT. HE VEHEMENTLY ARGUED THAT THE RIGHTS IN THE FORM OF INTANGIBLES I.E LICENSES / PERMITS E TC CANNOT BE DETACHED FROM THE SHARES PER SE. MOREOVER, M/S ALFA INFRPROP P LTD HAD NOT REFLECTED THESE RIGHTS IN THE FORM OF LICENSES / PERMITS ETC IN ITS BALANCE SHEET AND HENCE THE SAME COULD NOT HAVE BEEN SOLD TO THE ASSESSEE THROUGH ADITYA THERMAL EN ERGY P LTD. PER CONTRA, THE LD AR VEHEMENTLY SUPPORTED THE ORDER OF THE LD CITA BY NARRATING THE ENTIRE FACTS IN A TABULAR FORM. HE SUBMITTED THAT THE LD AO HAD NOT TREATED THE TRANSACTION OF SALE OF SHARES OF ALFA INFRPROP P LTD AND DETACHMENT OF CERTA IN RIGHTS WHICH WERE ORIGINALLY ATTACHED TO THE SHARES AS PER THE TERMS OF ARTICLES 5A AND 5B OF ARTICLES OF ASSOCIATION OF ALFA INFRPROP P LTD, AS A GENUINE TRANSACTION AND ACCORDINGLY ADDED THE SAME U/S 68 OF THE ACT. HE STATED THAT THE LD AO HAD CONTE NDED THAT THERE CANNOT BE ANY RIGHT ENTAILING A PROPORTIONATE RIGHT IN RESPECT OF EACH ASSET OF THE COMPANY AND THE SHAREHOLDER CANNOT ENTER INTO A CONTRACT BY ITSELF. IN THIS REGARD, HE SUBMITTED THAT THERE COULD BE SPECIFIC RIGHTS ATTACHED TO THE SHARES AND THIS FACT IS ALSO RECOGNIZED BY THE INCOME TAX ACT 1961 WHICH IS EVIDENT FROM SECTIONS 27 AND 269UA OF THE ACT. HE VEHEMENTLY ARGUED THAT THERE IS NO BENEFIT THAT HAS ACCRUED TO THE ASSESSEE IN THE ENTIRE TRANSACTION. THE ASSESSEE HAS NOT GAINED OR LOST ANYTHING FROM THE ENTIRE TRANSACTION. HE SUBMITTED THAT SINCE NO INCOME WAS ARISING FROM THE SAID TRANSACTION, THERE IS NO QUESTION OF EVASION OF TAX. MOREOVER, NO INCOME OR EVASION OF TAX WAS PROVED BY THE REVENUE IN THE INSTANT CASE. HE FURTHE R SUBMITTED THAT MERELY BECAUSE THE TRANSACTIONS WERE BETWEEN RELATED PARTIES, IT CANNOT ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 9 BE CONSIDERED THAT THE TRANSACTIONS ARE NON - GENUINE. THE ONUS IS HEAVILY ON THE DEPARTMENT TO PROVE WITH THE HELP OF EVIDENCE THAT THE TRANSACTION IS NON - GENUINE. HE SUBMITTED THAT IN THE PRESENT CASE, THE LD AO HAD NOT BROUGHT ANYTHING ON RECORD TO PROVE THAT THE TRANSACTION IS NON - GENUINE OR ANY BENEFIT HAS ARISEN TO THE ASSESSEE AS A RESULT OF THE SAID TRANSACTION. 6.1. THE LD. DR ALSO FILED WRITTEN SUBMISSIONS FROM THE LD. AO WHEREIN THE LD. AO APART FROM REITERATING WHAT HAS BEEN STATED IN THE ASSESSMENT ORDER HAD ALSO POINTED OUT THE FOLLOWING FACTS: - IN THE ABOVE TRANSACTIONS, ASSESSEE COMPANY ALONG WITH ASSOCIATED ENTITIES PROMOTERS AND DIRECTORS HAVE CRE ATED A MAZE OF TRANSACTIONS WHERE AN INTANGIBLE ASSET HAS BEEN CREATED TO MERELY TRANSFER OF FUNDS TO THE PROMOTERS. THIS HAS BEEN HIGHLIGHTED DURING THE ASSESSMENT PROCEEDINGS TOO. ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS FAILED TO PROVE T HE GENUINENESS OF THE TRANSACTION OF INTANGIBLE ASSET CREATED. THE VALUATION AND SUBSEQUENT TRANSFER ARE NOT JUSTIFIED BY THE ASSESSEE THOUGH THE ONUS IS SQUARELY ON ASSESSEE. 10. WITH RESPECT TO ASSESSEE SUBMISSION THAT THERE COULD BE SPECIFIC RIGHTS ATT ACHED TO THE SHARES AND THIS FACT IS EVIDENT FROM SECTION 27 AND SECTION 269UA OF THE INCOME TAX ACT, 1961, THE CONTENTIONS ARE COMPLETELY MISPLACED AS THE SECTION 27 AND 269UA DEALS WITH OWNERSHIP OF HOUSE PROPERTY AND REGISTRATION OF TRANSFER OF IMMOVABL E PROPERTY. THE INTANGIBLE ASSETS (MOVEABLE PROPERTY) HAVE NOT BEEN CONSIDERED IN THESE PROVISIONS. 11. THE AO IN ITS DISCUSSION HAS ASKED THE ASSESSEE TO SUBSTANTIATE THE TRANSACTION BY PROVING THE GENUINENESS OF THE TRANSACTION WHICH ASSESSEE HAS FAILED . IF THERE WAS NO UNDERLYING ASSET OR ASSESSEE FAILS TO PROVE THE GENUINENESS OF THE TRANSFER WHERE THE ONUS IS ON THE ASSESSEE, IT ATTRACTS PROVISIONS OF SECTION 68 OF THE ACT WHICH AO HAS DUTIFULLY CARRIED AND MADE ADDITION AS ASSESSEE HAS FAILED TO SUBS TANTIATE THE GENUINENESS. 12. MOREOVER IT IS NOT MERELY THE CREATION OF INTANGIBLE ASSET OR CLAIM OF DEPRECIATION BUT ALSO THE POSSIBILITY OF TRANSFER OF SUCH ASSET OR WRITE OFF WILL CAUSE LOSS TO THE REVENUE. THE ENTIRE MAZE OF TRANSACTIONS IS CREATED TO FACILITATE SIPHONING OFF FUNDS FROM LIMITED LIABILITY COMPANIES TO PROMOTERS ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 10 OF GROUP COMPANY. IT IS PERTINENT TO NOTE THAT THERE WAS WHISTLE BLOWER COMPLAINT AGAINST THE DIRECTOR SUDHIR VALIA AND GROUP COMPANIES FOR INSIDER TRADING , SIPHONING OF FUNDS I N SUN PHARMA GROUP OF COMPANIES WHICH IS AVAILABLE IN PUBLIC DOMAIN. THIS BACKGROUND MAY BE CONSIDERED WHILE DECIDING ON THE MERITS OF THE CASE. 13. ALSO IT IS REQUESTED THAT THE HON'BLE ITAT MAY CONSIDER THE BENEFICIAL OWNERSHIP OF THESE ENTITIES BY LIFT ING THE CORPORATE VEIL AND DECIDE THE MATTER AS THE SET OF TRANSACTIONS ASSESSEE CREATED ARE NON GENUINE AND SHAM. 7. LATER WHEN THE BENCH POSED A QUESTION TO THE LD AR REGARDING IF ASSESSEE HAD NOT BENEFITTED FROM THIS TRANSACTION, THEN WHAT IS THE PUR POSE OF DOING THE ENTIRE CIRCULAR TRANSACTIONS. IN THIS REGARD, THE BENCH DIRECTED THE LD AR TO FURNISH THE AUDITED FINANCIAL STATEMENTS OF ALFA INFRPROP P LTD FROM ASST YEARS 2012 - 13 TO 2015 - 16 WHICH WERE DULY FURNISHED. 8. WE HAVE HEARD THE RIVAL SUB MISSIONS. THE PRIMARY FACTS CONTAINING THE SEQUENCE OF EVENTS NARRATED ABOVE REMAIN UNDISPUTED AND HENCE , THE SAME ARE NOT REITERATED FOR THE SAKE OF BREVITY HEREIN. AT THE OUTSET, WE FIND THAT THERE IS NO DISPUTE ON SALE PRICE OF SHARES OR SALE PRICE OF RIGHTS. WE FIND THAT THE ADDITION MADE IN THE SUM OF RS 93,09,47,000/ - ADMITTEDLY INCLUDES SALE PROCEEDS OF RIGHTS BY MR SUDHIR VALIA IN THE SUM OF RS 9,19,000/ - WHICH WE HEREBY DIRECT TO BE DELETED FROM THE HANDS OF THE ASSESSEE. HENCE THE ONLY ISSU E THAT ARISES FOR OUR CONSIDERATION IS AS TO WHETHER THE SUMS RECEIVED BY THE ASSESSEE TO THE TUNE OF RS 93,00,28,000/ - TOWARDS SALE OF RIGHTS COULD BE TAXED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. IN THIS REGARD, WE FIND THAT THE LD CITA HAD DELET ED THE ADDITION BY OBSERVING AS UNDER: - 7.2 I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. IT IS FOUND THAT THE AO HAS MADE THE ADDITION U/S 68 OF THE ACT, THE APPELLANT HAS PROVED THE IDENTITY, CREDITWORTHINESS OF THE PARTY ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 11 FROM WHOM THE SAID AMOUNT OF RS 93,09,47,000 / - WAS RECEIVED. IT IS FOUND THAT THE AO HAS NOT TREATED THE TRANSACTION OF SALE OF SHARES OF ALFA INFRAPROP P LTD AND DETACHMENT OF CERTAIN RIGHT BEING CLEARANCES/ LICENSES/ PERMITS AND ALL INTANGIBLE ASS ETS ASSOCIATED WITH COAL BASED THERMAL POWER PROJECT OF UP TO 2640MW CAPACITY TO BE SET UP AS PER THE TERM OF ARTICLE 5A AND 5B OF ARTICLES OF ASSOCIATION OF ALFA AS GENUINE TRANSACTION. THE MAIN CONTENTION OF THE AO IS THAT THERE CANNOT BE ANY RIGHT ENTAI LING A PROPORTIONATE RIGHT IN RESPECT OF EACH ASSET OF THE COMPANY AND SHAREHOLDER CANNOT ENTER INTO A CONTRACT BY ITSELF. THE AO HELD THIS TRANSACTION AS A DUBIOUS ARRANGEMENT WITH A VIEW TO EVADE TAXES ON PAYMENT OF RS 93.09 CR RECEIVED BY THE APPELLANT COMPANY FROM ALFA. IT IS FOUND THAT THE AO HAS NOT EXPLAINED IN WHAT WAY THE APPELLANT HAS EVADED TAXES. AS PER THE APPELLANT IT WAS JUST THE TRANSACTION OF PURCHASE OF SALE OF SHARES OF ALFA AND CERTAIN RIGHTS ATTACHED TO SUCH SHARE. THE APPELLANT FURTHER CLAIMED THAT AS PER INCOME TAX ACT. IT IS PROVED THAT THERE CAN BE CERTAIN RIGHTS ATTACHED TO THE SHARES WHICH THE AO FAILED TO APPRECIATES. THE APPELLANT HAS GIVEN THE REFERENCE OF SECTION 27 AND SECTION 269UA OF THE INCOME TAX ACT AND CLAIMED THAT IT WA S EVIDENT FROM THESE SECTIONS THAT THE THERE COULD BE CERTAIN SPECIFIC RIGHTS TO THE SHAREHOLDERS OF THE COMPANY. IT IS HELD THAT THE AO HAS RAISED THE TECHNICAL ISSUE, BUT HAS NOT DEMONSTRATED AS TO HOW THE TRANSACTIONS INVOLVED LEADS TO THE EVASION OF T AX. IF THE APPELLANT HAS NOT DETACHED THE CERTAIN RIGHTS OF THE SHAREHOLDERS AND ONLY SHARES WERE TRANSFERRED THEN THERE WAS NO OBJECTION OF THE AO. IT IS PERTINENT TO QUESTION AS TO WHETHER ONLY THE DETACHMENT OF CERTAIN RIGHTS OF SHAREHOLDER FROM ITS SHA RES LEADS ONE TO THE VIEW THAT THE TRANSACTION IS DUBIOUS. THE QUESTION THAT ARISES IS THAT SUCH A TRANSACTION DOES NOT SHOW THAT IT IS A DUBIOUS TRANSACTION SINCE THERE IS NO EFFECT OF THE SALE TRANSACTION EVEN THOUGH THERE IS A TRANSACTION OF PURCHASES O F SHARES OF ALFA BY THE APPELLANT. THE MONEY IS NOT LYING WITH THE APPELLANT. THE SALE CONSIDERATION RECEIVED FROM THE ALFA HAS TO BE TRANSFERRED AGAINST THE LIABILITY WHICH AROSE ON ACCOUNT OF PURCHASE OF SHARES AND SINCE THERE WAS NOTHING LEFT WITH THE A PPELLANT HENCE THERE WAS NO GAIN TO THE APPELLANT. THEN, IT IS STRANGE AS TO HOW THE A.O. IS HOLDING THE VIEW THAT THE RECEIPT CLAIMED AS SALE CONSIDERATION IS FALLING WITHIN THE AMBIT OF 'INCOME'. THEREFORE, IN THE LIGHT OF THE DISCUSSION ABOVE SINCE THER E IS NO 'INCOME' ARISING TO THE APPELLANT/ THE ISSUE OF ADDITION U/S. 68 DOES NOT ARISE. T HE ADDITION OF RS. 93,09,47,000/ - U/S, 68 IS DELETED. GROUND NO. 2 IS ALLOWED. 8.1. WE FIND THAT THE LD CITA HAD OBSERVED ABOVE THAT IT IS PERTINENT TO QUESTION AS TO WHETHER ONLY THE DETACHMENT OF CERTAIN RIGHTS OF SHAREHOLDER FROM ITS SHARES LEADS ONE TO THE VIEW THAT THE TRANSACTION IS ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 12 DUBIOUS. IN THIS REGARD, WE FIND THAT THERE WOULD BE NO DIFFERENCE IN THE SALE CONSIDERATION AS FAR AS THE ASSESSEE IS CONCERNED AS TO WHETHER IT IS ON ACCOUNT OF SALE OF RIGHTS OR SALE OF SHARES. THERE MAY NOT BE ANY IMPACT IN THE HANDS OF THE ASSESSEE. BUT IT WOULD HAVE DRASTIC IMPACT IN THE HANDS OF THE PURCHASER OF RIGHTS I.E ALFA INFRPROP P LTD WHEREIN THIS CIRCULAR TRANSACT ION HAD ENABLED THEM TO CAPITALIZE THE INTANGIBLES IN THE FORM OF LICENSES / PERMITS ETC IN ITS BOOKS AND CLAIM DEPRECIATION THEREON , WHICH IS EXPLAINED IN DETAIL HEREINBELOW UNDER THE HEADING COLOURABLE DEVICE. WE HAVE GONE THROUGH THE FINANCIALS OF ALFA INFRPROP P LTD FROM ASST YEARS 2012 - 13 TO 2015 - 16 WHICH WERE PLACED ON RECORD BY THE LD AR AT THE INSTANCE OF THE BENCH AS STATED HEREINABOVE. FROM THE SAME, THE FOLLOWING THINGS EMERGE : - A) ALFA INFRPROP P LTD CHARGED DEPRECIATION OF RS 3,06,065/ - IN ASST YEAR 2012 - 13 AND CAPITALIZED THE SAME TO CAPITAL WORK IN PROGRESS AS THE PROJECT HAD NOT COMMENCED DURING THAT YEAR. HENCE THERE IS NO QUESTION OF CLAIMING ANY DEDUCTION / ALLOWANCE / BENEFIT IN THE RETURN OF INCOME BY ALFA INFRPROP P LTD. B) ALF A INFRPROP P LTD CHARGED DEPRECIATION OF RS 3,72,37,880/ - IN ASST YEAR 2013 - 14 AND CAPITALIZED THE SAME TO CAPITAL WORK IN PROGRESS AS THE PROJECT HAD NOT COMMENCED DURING THAT YEAR. THE LD AO IN THE SCRUTINY PROCEEDINGS U/S 143(3) OF THE ACT DATED 30.3.2 016 DISAPPROVED THE CAPITALIZATION OF THE SAID DEPRECIATION OF RS 3,72,37,880/ - TO THE CAPITAL WORK IN PROGRESS. THE LD AO IN THE SAID ASSESSMENT ORDER HAD CATEGORICALLY OBSERVED THAT THE ASSESSEE HAD NOT CLAIMED ANY DEPRECIATION U/S 32 OF THE ACT AS THE BUSINESS OF THE ASSESSEE HAD NOT YET COMMENCED. HOWEVER, SUBSEQUENT YEAR, PURSUANT TO THE COMMENCEMENT OF BUSINESS, THE ASSESSEE SHALL CLAIM THE DEPRECIATION ON SUCH APPROVAL / AGREEMENT ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 13 WITH THE SHAREHOLDERS EVEN U/S 32 OF THE ACT. THE SAID AGREEMENT W ITH THE SHARESHOLDERS FOR GIVING UP THE RIGHTS SHALL NOT FALL UNDER DEFINITION OF INTANGIBLE ASSETS AS THE RIGHT HAS TO BE COMMERCIAL IN NATURE, FURTHER THE SAME SHOULD BE OF SIMILAR NATURE OF KNOW - HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENSES, FRANCHISES . IN THE ASSESSEES CASE, THE APPROVAL OF GIVING THE RIGHTS IN THE ASSETS OF THE COMPANY BY THE SHAREHOLDERS CANNOT BE TREATED AS INTANGIBLE A S SETS AS PER THE DEFINITION U/S 32 OF THE ACT DOES NOT FALL IN ANY CATEGORIES OF THE NATURE MENTIONED IN THE SECT ION. THUS, THE DEPRECIATION U/S 32 WHICH IN CASE CLAIMED BY THE ASSESSEE IN SUBSEQUENT YEAR SHALL NOT BE ALLOWED. FURTHER THE SAID EXPENSES SHALL BE JUST REGARDED AS CAPITAL EXPENSES WHICH BE EVEN NOT BE ALLOWED U/S 37(1) OF THE IT ACT. C) ALFA INFRPROP P LTD CHARGED DEPRECIATION OF RS 1,75,73,296/ - IN ASST YEAR 2014 - 15 AND CAPITALIZED TO CAPITAL WORK IN PROGRESS. A SUM OF RS 1,96,64,584/ - WAS CHARGED AS DEPRECIATION TO THE PROFIT AND LOSS ACCOUNT BY ALFA INFRPROP P LTD ( I.E BOOK DEPRECIATION) WHICH WAS DULY ADDED BACK IN THE COMPUTATION OF INCOME. HENCE THE TOTAL BOOK DEPRECIATION FOR THE YEAR ENDED 31.3.2014 WAS RS 3,72,37,880/ - . WE FIND FROM THE COMPUTATION OF INCOME FOR ASST YEAR 2014 - 15, ALFA INFRPROP P LTD HAD ADDED BACK THE BOOK DEPRECIATION CH ARGED TO PROFIT AND LOSS ACCOUNT IN THE SUM OF RS 1,96,64,584/ - AND DID NOT CLAIM INCOME TAX DEPRECIATION ON THE SAME. BUT IT IS PERTINENT TO NOTE THAT ALFA INFRPROP P LTD HAD RETAINED A SUM OF RS 6,00,66,631/ - TOWARDS DEPRECIATION AND INCLUDED THE SAME UNDER THE HEAD EXPENDITURE DURING CONSTRUCTION PERIOD AS ON 31.3.2014. D) THE ASSESSEE CHARGED DEPRECIATION OF RS 3,57,55,819/ - IN ASST YEAR 2015 - 16 AND DEBITED TO PROFIT AND LOSS ACCOUNT ( I.E BOOK DEPRECIATION) WHICH WAS DULY ADDED BACK IN THE COMPU TATION OF INCOME BY THAT ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 14 ASSESSEE. WE FIND FROM THE COMPUTATION OF INCOME FOR ASST YEAR 2015 - 16, THE ASSESSEE HAD ADDED BACK THE BOOK DEPRECIATION CHARGED TO PROFIT AND LOSS ACCOUNT IN THE SUM OF RS 3,57,55,819/ - AND DID NOT CLAIM INCOME TAX DEPRECIATION ON THE SAME. BUT IT IS PERTINENT TO NOTE THAT ALFA INFRPROP P LTD HAD RETAINED A SUM OF RS 6,03,01,900/ - TOWARDS DEPRECIATION AND INCLUDED THE SAME UNDER THE HEAD EXPENDITURE DURING CONSTRUCTION PERIOD AS ON 31.3.2015. 8.2. WE FIND THAT THE SUBMISSION S OF THE LD. DR ON THE ASPECT OF COLOURABLE DEVISE AND TR EAT ING THE TRANSACTION AS SHAM BY LIFTING THE CORPORATE VI EL HAD BEEN ADDRESSED BY US HEREINBELOW SEPARATELY. WITH REGARD TO THE SUBMISSION MADE IN PARA 12 OF THE WRITTEN SUBMISSIONS OF THE LD. AO IN HIS WRITTEN SUBMISSION REGARDING THE WHISTLE BLOWER COMPLAINT AGAINST THE DIRECTOR SUDHIR VALIA AND GROUP COMPANIES FOR INSIDER TRA D ING, SIPHONING OF FUNDS IN SUN PHARMA GROUP OF COMPANIES ETC., WE ARE NOT INCLINED TO GIVE ANY OPINION ON THE SAME AS THOSE FACTS DOES NOT EMANATE FROM THE FACTS AVAILABLE ON RECORD BEFORE US. 8. 3 . WE HOLD THAT THE ASSESSEE HAD DULY PROVED THE NATURE AND SOURCE OF CREDIT IN THE FORM OF SALE PROCEEDS OF SHARES AND RIGHTS AND HENCE NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE U/S 68 OF THE ACT. EVEN THE IDENTITY OF THE PARTIES, CREDITWORTHINESS OF THE PARTIES AND GENUINENESS OF TRANSACTIONS WITH REGARD TO RECEIPT OF SALE PROCEEDS OF SHARES ARE PROVED IN THE INSTANT CASE. HENCE THE THREE NECESSARY INGREDIENTS OF SECTIO N 68 OF THE ACT HAVE BEEN DULY PROVED BY THE ASSESSEE IN THE INSTANT CASE AND HENCE NO ADDITION U/S 68 OF THE ACT COULD BE MADE IN THE HANDS OF THE ASSESSEE. BUT THE MOST EXCRUCIATING FACT IS THAT THIS CIRCULAR TRANSACTION HAD ENABLED THE OTHER PARTY I.E ALFA INFRPROP ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 15 P LTD AND THE ORIGINAL PROMOTERS OF SHARES OF SUCH COMPANY TO BENEFIT SUBSTANTIALLY WHICH IS EXPLAINED BELOW. THIS IS WHERE THE ROLE OF THE ASSESSEE WOULD BE VITAL AS WITHOUT ITS ASSISTANCE, THE CIRCULAR TRANSACTIONS COULD NOT HAVE BEEN CARR IED OUT SO AS TO ENABLE ULTIMATE BENEFITS TO THE INTERESTED PARTIES AS DETAILED BELOW. 8. 4 . ON COLOURABLE DEVICE BY DOING THIS CIRCULAR TRANSACTION, THE FOLLOWING THINGS EMERGE : - A) THE ORIGINAL PROMOTERS OF ALFA INFRPROP P LTD COULD CAPITALIZE ON THE INTANGIBLES OF ALFA INFRPROP P LTD ( IN THE FORM OF VARIOUS LICENCES AND APPROVALS) BY SELLING THEIR SHARES WITH THE RIGHTS ATTACHED THEREON TO THE ASSESSEE HEREIN (I.E KHYATI REALTORS PVT LTD) AT A HEFTY PRICE OF RS 94.41 CRORES. B) ALFA INFRPROP P LTD BY AGAIN PURCHASING THE INTANGIBLES ( IE LICENCES ) ALONE FROM THE ASSESSEE FOR RS 93,09,28,000/ - WAS ABLE TO CAPITALIZE THOSE INTANGIBLES IN ITS BOOKS AND CLAIM DEPRECIATION THEREON (DETAILS OF THE SAME ARE STATED HEREINABOVE). IN THIS REGARD, THE ARGU MENT OF THE LD AR THAT ALFA INFRPROP P LTD HAD ALSO NOT CLAIMED ANY DEPRECIATION ON THESE INTANGIBLES WOULD NOT HOLD GOOD AS THE DEPRECIATION AMOUNT IS INCLUDED AS PART OF THE EXPENDITURE DURING CONSTRUCTION PERIOD AND ALFA INFRPROP P LTD WOULD BE OBVIO USLY CLAIMING DEPRECIATION ON THE TOTAL CAPITALIZED COST IN THE YEAR OF COMPLETION OF THEIR PROJECT. HENCE THE ALLOWANCE OF DEPRECIATION ON INTANGIBLES WOULD GET SHOWERED ON ALFA INFRPROP P LTD WHICH EMANATED OUT OF THE ARRANGEMENT ENTERED INTO IN EARLIER YEARS WITH THE CONDUIT OF THE ASSESSEE HEREIN. HENCE THE TRANSACTIONS HAD TO BE SEEN IN TOTALITY FROM ITS ORIGIN TILL THE END. ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 16 8. 4 .1. APPARENTLY , THERE MAY NOT BE ANY PROFIT OR INCOME ARISING IN ANYBODYS HANDS, BUT PURSUANT TO THE AFORESAID ARRANGEMEN T, THE ABOVE TWO PARTIES WERE BENEFITTED I.E (A) THE PROMOTERS WHILE SELLING THE SHARES AT A HEFTY PRICE AND (B) ALFA INFRPROP P LTD CLAIMING DEPRECIATION ON INTANGIBLES. HENCE THE ENTIRE TRANSACTIONS WERE CARRIED OUT TO ENABLE THE ORIGINAL PROMOTERS OF ALFA INFRPROP P LTD TO SELL THE SHARES IN ALFA AT A HEFTY PRICE AND TO ENABLE ALFA INFRPROP P LTD TO CLAIM DEPRECIATION ON ITS INTANGIBLES IN LATER YEARS , THEREBY PROVING THE COLORABLE DEVICE. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SRI MEENAKSH I MILLS LTD REPORTED IN 63 ITR 609 (SC) HAD HELD THAT AT TIMES IT WOULD BE NECESSARY TO LIFT THE CORPORATE VEIL AND PIERCE THROUGH THE TRANSACTION TO UNDERSTAND THE UNDERLYING INTENTION OF THE PARTIES TO THE ARRANGEMENT ENTERED INTO. THE RELEVANT OBSERVATI ON OF THE HONBLE APEX COURT IN THIS REGARD ARE AS UNDER: - IT IS WELL - ESTABLISHED THAT IN A MATTER OF THIS DESCRIPTION THE INCOME - TAX AUTHORITIES ARE ENTITLED TO PIERCE THE VEIL OF CORPORATE ENTITY AND TO LOOK AT THE REALITY OF THE TRANSACTION. IT IS TRU E THAT FROM THE JURISTIC POINT OF VIEW THE COMPANY IS A LEGAL PERSONALITY ENTIRELY DISTINCT FROM ITS MEMBERS AND THE COMPANY IS CAPABLE OF ENJOYING RIGHTS AND BEING SUBJECTED TO DUTIES WHICH ARE NOT THE SAME AS THOSE ENJOYED OR BORNE BY ITS MEMBERS. BUT IN CERTAIN EXCEPTIONAL CASES THE COURT IS ENTITLED TO LIFT THE VEIL OF CORPORATE ENTITY AND TO PAY REGARD TO THE ECONOMIC REALITIES BEHIND THE LEGAL FAADE. FOR EXAMPLE, THE COURT HAS POWER TO DISREGARD THE CORPORATE ENTITY IF IT IS USED FOR TAX EVASION OR T O CIRCUMVENT TAX OBLIGATIONS . THE AFORESAID OBSERVATION OF HONBLE APEX COURT WOULD BE SQUARELY APPLICABLE TO THE ARRANGEMENT OF CIRCULAR TRANSACTIONS CARRIED OUT BY THE ASSESSEE HEREIN. 8. 4 .2. BE THAT AS IT MAY, THE NATURE AND SOURCE OF CREDIT OF SALE PROCEEDS OF SHARES HAD BEEN DULY PROVED IN THE CASE OF THE ASSESSEE AND HENCE NO ADDITION COULD BE MADE U/S 68 OF THE ACT. BUT IT CANNOT BE BRUSHED ASIDE ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 17 THAT THE ASSESSEE HAD ALSO ACTED AS A CONDUIT IN THE ENTIRE ARRANGEMENT BY ALLOWING THE AFORESAID TW O BENEFITS TO BE CONFERRED ON THE ABOVE TWO PARTIES. 8. 5 . IN VIEW OF THE AFORESAID OBSERVATIONS, WE HOLD THAT THE ADDITION HAS BEEN RIGHTLY DELETED U/S 68 OF THE ACT IN THE HANDS OF THE ASSESSEE HEREIN. BUT WE HOLD THAT THE ASSESSEE HAD INDEED ACTED A S A CONDUIT FOR ENTERING INTO AN ARRANGEMENT WHICH IS ACTUALLY A COLOURABLE DEVICE AS DETAILED HEREINABOVE. WITH THESE OBSERVATIONS, WE DISMISS THE GROUNDS RAISED BY THE REVENUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER P RONOUNCED IN THE OPEN COURT ON THIS 26 / 07 /201 9 SD/ - ( AMARJIT SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 26 / 07 / 2019 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// ITA NO. 2356/MUM/2017 M/S. KHYATI REALTORS PVT. LTD., 18 ( ASSTT. REGISTRAR) ITAT, MUMBAI