DCIT, Circle-1(1)(1), Surat, Surat V. Mahotsav Creation (P) Ltd, Surat, Surat

ITA 238/SRT/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1758 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-06-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 22-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Business income; Source of fund; Additional evidence; Reasonable cause; Corroborative evidences; Onus to prove
• Section: 131; 68; 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 238/SRT/2020 (AY: 2012-13) (Physical hearing) The Deputy Commissioner of Income Tax, Circle-1(1)(1), Surat. Vs. Mahotsav Creation (P) Ltd., 101-102, 1 st Floor, Sakar Textile Market, Ring Road, Surat-395002. Email: [e-mail] PAN : AAECM2394Q (APPELLANT)/(REVENUE) (RESPONDEDNT)/(ASSESSEE) Appellant by Shri SBG Mahapatra, Sr. DR Respondent by Shri Hardik Vora, Advocate Date of hearing 17/06/2022 Date of pronouncement 18/08/2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the Revenue is directed against the order of the ld. Commissioner of Income Tax, Appeals-3 [in short “the CIT(A)-3”], Surat, dated 15/09/2020 for Assessment Year (AY) 2012-13, which in turn arises against the assessment order dated 31.03.2015 passed by Assessing Officer under section143(3) of the Income Tax Act, 1961 (in short ‘Act’). The Revenue has raised the following grounds:- “1. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) is justified in deleting the addition of Rs.2,29,00,000/- made by the AO on account of unexplained cash credit u/s 68 of the act as the assessee has failed to prove bonafide of the transaction within the meaning of Section 68 of the I.T. Act, 1961. 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) is in admitting the additional evidence without appreciating that there was no sufficient and reasonable cause for the assessee for not filling the reply or submitting the supporting document before the AO during the assessment proceedings. 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 2 3. Whether on the facts and circumstance of the case, the Ld. CIT(A) is justified in deleting the addition of Rs.2,29,00,000/- made on account of bogus share premium and share capital without appreciating the fact that the director of the investor company had not brought on record any documentary evidence to corroborate the source of investment in the assessee company. 4. Whether on the facts and circumstances of the case, the decision of the Ld. CIT(A) is perverse in the light that Ld. CIT(A) has simply relied upon the statement of the investor company that source of investment is sale of assets/investment ignoring the fact that on verification of the books of investors company it is seen that no sale of asset/investments made during the year. 5. Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in deleting the addition of Rs.2,29,00,000/- made u/s 68 of the Act on account of bogus share premium and share capital by relying upon the statement of the director of promoter of the investors company that source of investment is sale of own investment which in incorrect fact as no sale of assets or investment has been recorded in the books of the investor company during the year under consideration. 6. It is therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of assessing officer may be restored to the above extent. 7. The appellant craves leave to add, alter, amend and/or withdraw any grounds of appeal either before or during the course of hearing of the appeal.” 2. Brief facts of the case are that assessee-company is engaged in the business of manufacturing of trading of art silk cloths. The assessee filed its return of income for assessment year 2012-13 on 29.02.2012 declaring total income of Rs.58,54,510/-. The assessee in its computation of income has shown total turnover of Rs.74.745 crore and have shown gross profit of Rs.6.899 crore and net profit of Rs.56,45,185/-. The case was selected for scrutiny. During the assessment, the Assessing Officer noted that assessee has received share application money and share premium of Rs.2.290 crore. The 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 3 share application money and premium is received from M/s. Kum Kum Suppliers Pvt. Ltd. The Assessing Officer issued show cause notice to the assessee and asked the assessee to furnish certain details to prove the identity, creditworthiness and genuineness of investor. The contents of show cause notice are recorded at page no. 3 to 5. In the show cause notice, the Assessing Officer asked to furnish the supporting material to establish identity, creditworthiness and genuineness of the transaction. The Assessing Officer also mentioned in his show cause notice that he issued notice under section 133(6) to the investor company, which was not served at the address of the investor and returned back with the remark “ addressee cannot be located”. 3. The assessee filed its reply to the said show cause notice vide reply dated 05.03.2015. The assessee in its reply submitted that assessee has issued 1145000 shares of having face value of Rs.10 at a premium of Rs.190 to Kum Kum Supplier Pvt. Ltd. Thus, the assessee received share capital of Rs.11,45,000/- and share premium of Rs.2,17,55,000/-.The assessee contended that they have submitted various details to prove the genuineness of share capital and share premium and credited in the books of the assessee. The assessee filed confirmation of investor along with the details of banks of investor and cheque number through which share application premium were received, copy of bank statement showing the transaction, copy of return of income showing that investor has an income bill, copy of 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 4 balance sheet, capital gain and profit and loss account to show the creditworthiness and copy of bank statement of assessee, highlighting the credited in the bank which was received from the investor to prove that no money either before or after the transaction has been returned back to the investor. So far as return of notice under section 133(6) issued by the Assessing Officer to the Investor Company, the assessee submitted that they have discharged the onus to prove the transaction of genuineness by proving complete details. The assessee also stated that issue price of share including the share premium is the subject matter of financial planning and negotiation between the assessee-company and its shareholders. The assessee also contended that share premium is a capital receipt which has to be shown in reserves and surplus as an item on liabilities side of balance sheet and these reserves can be used only in a limited manner permitted by the law. The premium receipt genuinely in share capital or reduction of some specified liabilities on capital account, a use of security is also to strengthen, rather to say keep the strength of financial structure undiluted. Therefore, the security premium cannot be considered remaining at any stage like at the time of receipt or at the time of use. The assessee also relied on certain case laws. 4. The reply of assessee was not accepted by the Assessing Officer. The Assessing Officer was of the view that Investor Company is based in Kolkata and is Shell Company. On the identity, the Assessing Officer held that notice was issued under section 133(6) on the address given by assessee, was returned back. On the creditworthiness, the source 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 5 of investor is from the share capital, share premium on similar other investor funded by borrower. The funds was generated and again invested either in current investment and short term loans and advances or both. The investor company is not found to have any tangible assets. From analysis of bank statement, the Assessing Officer was of the view that the assessee-companies merely acts as conduit for movement of capital from one concern to another. On the genuineness of transaction, the Assessing Officer held that even if it is to be believed that the money in question belonged actually to the alleged investors, there is no reason, apparent on latent, as to why these investors were so mesmerized as to subscribe to the shares of the private limited assessee-company, whose shares would fetch dividends and have no liquid tradability in the market, instead of parking their money with much safer and more rewarding financial avenues available in the market. The financial position of the company, earning of its share is low and Nil. The decision of investment in shares itself is not fully justifiable in its inception. No prudent businessman would ever divert its funds to an avenue that runs much higher risk and promises low or nil returns. The assessee company has not declared notable dividend during the year under consideration or preceding years. The Assessing Officer by referring various decisions held that onus was on assessee to prove the identity, creditworthiness and genuineness of transaction. The assessee failed to prove all the ingredients, the Assessing Officer accordingly made addition of Rs.2.290 crore under section 68 while 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 6 passing assessment order dated 31.03.2015 passed under section 143(3). 5. Aggrieved by the addition in the assessment order, the assessee failed the appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed additional evidences, which were remanded to the Assessing Officer to furnish his remand report. The Assessing Officer vide his letter dated 05.10.2017 furnished his remand report. In the remand report, the Assessing Officer reported that notice under section 133(6) was issued at the new address of M/s. Kum Kum Suppliers Pvt. Ltd. /Investor-Company and was called upon to provide the list of shareholders, balance sheet, books of account, share transfer register, details of investment with copy of bank statement, ITR, balance sheet and source of investment with supporting evidences. In response to such notice, the investor company filed reply on 08.05.2017. The investor company filed confirmation to the bank statement from 02.04.2011 to 27.04.2012 highlighting the investment made by the investment company, acknowledgement of ITR with computation of income for assessment year 2012-13 and audit report along with this enclosure. The Assessing Officer further reported that assessee during the period under consideration, the assessee received share application and share premium at Rs.2.29 crore. During the remand proceeding, the notice under section 133(6) was served at the address but the similar notice could not be served during assessment. On perusal of details of Directors of Investor Company, the Assessing 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 7 Officer reported that the Directors of investor companies are Naresh S. Chopra and his mother Mrs. Parmeshawari C. Chopra. Naresh S. Chopra is common Director in both companies i.e. Investor- Company as well as the assessee-company. Hence, Investor Company is a family company. The assessing officer further reported that on perusal bank statement of investor company, he find that before issuing cheque to the assessee, the investor have brought funds two or three days before issuing cheque to the assessee-company which shows that investor company merely acts as conduit for movement of capital from one concern to another with no reason or rhyme. The only precipitating factor seems to be some sudden investment in a distant unrelated entity which again has yielded Nil return in their entire life cycle till date. It was further reported that balance sheet of the investor company and its source of fund is from share capital, share premium only. So far as profit and loss account is concerned, it was reported that there is no business activity of the investor company and there is negligible receipt either interest receipt of Rs.10,357/- as reflected as nominal expenses which claimed and loss is shown by investor company. On the creditworthiness of investor, the Assessing Officer reported that it is necessary of properly extendable fund as on the date of investment and not the investment potency of the company as emanating from the balance sheet. On the genuineness of investment, the Assessing Officer reported that investment made of reserve and surplus and there is no business activity of Investor Company during the year under consideration. No dividend is declared by the assesse- 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 8 company to the investor company and that no prudent businessman would ever divert its funds to an avenue to take higher risk on the premises of low return. 6. On furnishing remand report by Assessing Officer, the ld. CIT(A) issued notice to the assessee to provide the details of Directors and Promoters of the investors companies and the Assessing Officer was directed to verify the identity, creditworthiness and genuineness of transaction from the Directors. On the direction of ld. CIT(A), the assessee furnished requisite details of Directors of the investors company. The Assessing Officer furnished his remand report after examination of Directors of Investors Company. The contents of second remand report dated 18.04.2018 is recorded at page nos. 4 and 5 of the order of ld. CIT(A). In the second remand report, the Assessing Officer reported that in response to his notice, the Dilip Chopra, Director of Investor Company appeared before him and statement was recorded under section 131 of Income Tax Act. On asking about source of investment, he replied that old investment of the company was sold, and the same amount was invested Mahotsov Creations Pvt. Ltd. in the form of share application money. He also furnished the minutes of meeting of Mahotsov Creations dated 08.008.2011, the application for equity share, share certificate, attendance register and bank statement of investor company. On the basis of statement of Director of Investor Company and the document furnished before him, the Assessing Officer reported that Dilip C. 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 9 Chopra is the real brother of Naresh C. Chopra who is the Director of assessee-company. Another Director is mother of Naresh Chopra, Ms. Parmeshawari Chopra Rest of the contents in the second remand report is similarly worded as that of first remand report. 7. After receipt of second remand report, the ld. CIT(A) asked the assessee to submit its rejoinder. The assessee filed its rejoinder dated 18.06.2018, contents of which is recorded on page nos. 6 to 11 of his order. In the rejoinder, the assessee contended that on perusal of para-1 of remand report furnished by Assessing Officer, it is clear that Assessing Officer carried necessary enquiry and investigation by issuing notice under section 131 to the investor company, regarding genuineness of the investment made by that company in the shares of assessee-company, para 3 of the remand report clearly states that in response to notice under section 131, the Director of investor company appeared and confirmed that during the period they have made investment of Rs.2.29 crores. They have also filed confirmation, bank statements from 02.04.2011 to 27.03.2012 highlighting the payments made to assessee-company, acknowledgment of ITR with computation of their income. The documents furnished by investor company clearly proved that the genuineness of transaction of the investments made by that company. The confirmation filed by investor-company supported by the bank statement which contained necessary entries in the form of investment to the assessee-company. The Director of investor-company are Dilip Chopra and Parmeshawari 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 10 Chopra, the Assessing Officer himself reported that Dilip Chopra is real brother of Naresh Chopra who is the Director of assessee- company and another Director of investor-company is Parmeshawari Chopra, who is the mother of one of the Director of assessee-company. Thus, investor-company is the family company of Directors of the assesse-company. Thus, the genuineness of investment stand proved. The assessee also stated that identity of investor not in disputes in all. On the observation on the bank statement by Assessing Officer, that fund were brought two to three days before issue the cheques, the assessee stated that observation of Assessing Officer has no relevance for the determination of investor company. No prudent businessman will keep the money either in the bank account that does not yield interest, and the books of account according to his business income. On the observation on profit or loss amount of Investor Company, the assessee submitted that such observation has no bearing for the purpose of determination of genuineness of investment in the share of assessee. The balance sheet of Investor Company clearly shows that said company has sufficient funds for making investment in question. The assessee reiterated that they have proved identity, creditworthiness and genuineness of transaction and requested to believe the addition. 8. The assessee vide his another submission submitted that assessee is in the business of trading of sarees and having head Office at Surat and Branch Office at Kolkata. The Assessing Officer made addition 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 11 under section 68 of Rs.2.29 crore on account of share application money received from its group company, wherein another brother mother are Directors in the investor-company. During the assessment, the Assessing Officer required the supporting details. All supporting details were furnished before the Assessing Officer. The assessee also stated that investor-company made a total investment of Rs.15.75 crores. The assessee received Rs.5.00 Crore in AY.2010-11, Rs.8.46 Crore in AY.2011-12 and only Rs.2.29 crores in the present financial year. No addition in proceeding assessment year on account of similar transaction was made, though in AY.2010-11, the assessment was completed under section 143(3) r.w.s 147. 9. The Ld. CIT(A) after considering the submission of the assessee held that on analyzing the various evidences and the audited books of account and ITRs and it cannot be said that M/s. Kum Kum Suppliers Pvt. Ltd. is a paper company. It is regularly assessed to income tax since 2006-2007 and accounts are audited up to 31.03.2017 as per the documents filed before the Ministry of Corporate Affairs (MCA). The Assessing Officer cross-examined the Director of investor- company on oath on 04.04.2018. In the statement, Director of the investor-company stated that he is the real brother of Naresh K. Chopra, Director of the assesse-company. Their mother is also Director in both the companies. These facts clearly prove that investor-company and Directors Company have common Director belonging to the same family. This fact clearly proves beyond doubt 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 12 the genuineness of investor-company. On the creditworthiness of Directors, the Director of investor-company stated that funds were received on sale of share of other companies. There is no cash deposit in the bank account of Investor Company. Such entries proved the creditworthiness of the investor-company. The ld. CIT(A) recorded that Assessing Officer has not doubted the source in his remand report. On genuineness of transaction, the contention of the assessee are that they are group companies and the transaction is made through banking channels by following the procedure prescribed by Registrar of Companies, which is reflected in the books of account of both the companies. The ld. CIT(A) recorded that nowhere cash was introduced in any of the bank account. The ld. CIT(A) further recorded that investor-company filed its return of income showing investment in the assessee-company. Assessee’s produced books of account before Assessing Officer to show the genuineness of transactions. On the objection of Assessing Officer that notice under section 133(6) issued by Assessing Officer were returned back, ld. CIT(A) noted that report of remark on the postal authority “address cannot be located”, carried suspension on the minds of the Assessing Officer on which he asked to produce the Director. However, during remand report proceeding, Shri Dilip Chopra appeared before the Assessing Officer, he was examined on oath on 04.04.2018. In reply to specific question, he stated that he invested the share of assessee with premium of Rs.190/- on assessee’s face value of Rs.10/-. In another reply, he stated that source of funds for this investment is through RTGS on 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 13 sale of investment which is not doubted by the Assessing Officer. There is no cash deposit in the bank account of investor-company, thus the source has been found explained in the account of investor- company. No further question is asked by the Assessing Officer during his further cross-examination. The ld. CIT(A) on the basis of his aforesaid observation concluded that assessee has proved all three ingredient as required under section 68 of the Income Tax Act, hence, deleted the entire addition. Aggrieved by the order of ld. CIT(A), the Revenue has filed present appeal before this Tribunal. 10. We have heard the submission of Learned Authorized Representative (ld. AR) and Learned Senior Departmental Representative (ld. Sr. DR) for the Revenue and having gone through the order of lower authorities carefully. The ld. Sr. DR for the Revenue supported the order of Assessing Officer. The ld. Sr. DR for the revenue submits that during the assessment notice under section 133(6) was issued to the investor-company, which was returned back unanswered. The assessee was asked to produce the Director of investor-company. The Assessing Officer concluded that assessee failed to discharge the primary onus cast upon the assessee to prove identity, creditworthiness and genuineness of transaction about investment as share of assessee. The ld. CIT(A) granted relief to the assessee by accepting the contention of assessee that Director of investor- company was examined and that he explained the source and source of investment was not doubted by the Assessing Officer. The ld. CIT(A) 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 14 allowed additional evidence without any justified reasons. The assessee has not shown any good cause for admission of additional evidences as to why such evidence was not produce before the Assessing Officer. The Director of investor-company was produced only during the course of remand report. The observation of ld. CIT(A) that no cash deposit in the bank account of investor is seen and that the source has been explained by the investor-company and the Assessing Officer has not asked any further question on the issue, at the time of examination of Director of investor-company. The Ld. Sr DR submits that observation of ld. CIT(A) is factually incorrect that Assessing Officer never accepted and found the amount credited as explained. The ld. Sr. DR for the Revenue submits that he has filed statement of fact which may be considered in toto. 11. On the other hand, Ld. AR of the assessee supported the order of ld. CIT(A). The Ld. AR of the assessee submits that the assessee received share application money and share premium from its group company. Merely the assessee of Group Company is situated in Kolkata, that credit suspicious in the mind of the Assessing Officer; the assessee instead of appreciating the fact in a constructive perspective considered the investor-company has Share Company. The assessee is well-known company, having turnover of around 75 crore during the year, the gross profit of assessee was more than 9%. The investor- company is a group company wherein there is common Director between the assessee as well as in the investor-company. The mother 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 15 of Dilip Kumar Chopra and Parmeshwari Chopra are Director in the investor-company, Dilip Kumar Chopra is the real brother and Parameshwari Chopra is the mother of Naresh Kumar Chopra. Thus, there is no dispute about the identity of the Director order, the investor-company. In earlier years, the assessee receipts similar share capital and share application money at the similar rate but no such addition was made and assessment was completed under section 143(3) r.w.s 147 in AY.2010-11. During the appellate stage, on the submission of assessee, the ld. CIT(A) called remand report of the Assessing Officer. The Assessing Officer thoroughly investigated the fact and examined the Directors of investor’s company. In the remand report, the Assessing Officer clearly stated that confirmation was filed. On the creditworthiness, the Assessing Officer examined the bank statement of investor-company as well as assessee-company. The investment was made after selling the share made in investment in other companies and loss invested to the assessee-company through banking channel. The investor-company also furnished bank resolution and the necessary formality furnished in accordance with law to company’s Act. the Ld. AR of the assessee submitted that the ld. CIT(A) granted relief after thoroughly examined the al three ingredients, identity, creditworthiness and genuineness of transaction. The Ld. AR of the assessee prayed for the dismissal of the appeal filed by the Revenue. The assessee has placed on record the following documents on record; 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 16  Written submission dated 21.11.2016 (page nos.1 to 34)  Written submission dated 07.02.2018 (page nos. 35 to 61)  Written submission dated 11.03.2020 (page nos.62 to 70)  Remand Report by DCIT, Circle-1(1)(2), dated 18.04.2018 (page nos.71 to 78)  Rejoinder to the Remand Report dated 18.06.2018 (vide paper book page no.79 to 85)  Kum Kum Suppliers Pvt. Ltd. ITR & Audit Report (F.Y.2011-12) (page nos.86 to 96)  Kum Kum Suppliers Pvt. Ltd. Assessment Order (AY.2006-07 and AY.2017-18) (page nos.97 to 101)  Kum Kum Suppliers Pvt. Ltd. Ledger Confirmation (F.Y.2011- 12)(vide paper book page no.102)  Kum Kum Suppliers Pvt. Ltd. Bank Statement (F.Y.2011-12)( page nos. 103 to 104)  Appellant’s Bank Statement (F.Y.2011-12)( page nos.105 to127)  Appellant’s Audit Report (F.Y.2011-12)( page nos.128 to 150) 12. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We have also deliberated on various documentary evidences placed before Tribunal. The assessing officer made addition of Rs. 2.29 Crore under section 68 by taking view that Investor Company is based in Kolkata and is Shell Company. On the identity, the Assessing Officer held that notice was issued under section 133(6) on the address given by assessee, was returned back. On the creditworthiness, the source of investor is from the share capital, share premium on similar other investor funded by borrower. It was held that funds was generated and again invested either in current investment and short term loans and advances or both. The investor company has no tangible assets. On the genuineness 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 17 of transaction, the Assessing Officer held that even if it is to be believed that the money in question belonged actually to the alleged investors, there is no reason, apparent on latent, as to why these investors were so mesmerized as to subscribe to the shares of the private limited assessee-company, whose shares would fetch dividends and have no liquid tradability in the market, instead of parking their money with much safer and more rewarding financial avenues available in the market. A prudent businessman will not divert its funds to an avenue that runs much higher risk and promises low or nil returns as the assessee company has not declared dividend during the year under consideration or in any preceding years. 13. As recorded above before ld CIT(A) the assessee filed detailed written submission. On the submissions of the assessee, the ld CIT(A) called the remand report of the assessing officer. The assessing officer furnished his remand report twice. In the first remand report the assessing reported that notice under section 133(6) was issued at the new address of investor company and they were called upon to provide the list of shareholders, balance sheet, books of account, share transfer register, details of investment with copy of bank statement, ITR, balance sheet and source of investment with supporting evidences. In response to such notice, the investor company filed reply on 08.05.2017. The investor company filed confirmation to the bank statement from 02.04.2011 to 27.04.2012 highlighting the investment made by the investment company, acknowledgement of ITR with 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 18 computation of income for assessment year 2012-13 and audit report along with this enclosure. On perusal of details of Directors of Investor Company, the Assessing Officer reported that the Directors of investor companies are Naresh S. Chopra and his mother Mrs. Parmeshawari C. Chopra. Naresh S. Chopra is common Director in both companies i.e. Investor- Company as well as the assessee-company. Hence, Investor Company is a family company. 14. We find that on furnishing first remand report the ld CIT(A) directed the assessee to the details of Directors and Promoters of the investors companies and the Assessing Officer was directed to verify the identity, creditworthiness and genuineness of transaction from the Directors. On the direction of ld. CIT(A), the assessee furnished requisite details of Directors of the investors company. The Assessing Officer furnished his second remand report after examination of Directors of Investors Company. We find that in the second remand report, the Assessing Officer reported that in response to his notice, the Dilip Chopra, Director of Investor Company appeared before him and statement was recorded under section 131 of Income Tax Act. On the inquiry of source of investment, he replied that old investment of the company was sold, and the same amount was invested Mahotsov Creations Pvt. Ltd (assessee company) in the form of share application money. He also furnished the minutes of meeting of Mahotsov Creations dated 08.008.2011, the application for equity share, share certificate, attendance register and bank statement of investor company. On the 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 19 basis of statement of Director of Investor Company and the document furnished before him, the Assessing Officer reported that Dilip C. Chopra is the real brother of Naresh C. Chopra who is the Director of assessee-company. 15. We further find that before ld CIT(A) the assessee vide it’s another submission submitted that assessee is in the business of trading of sarees and having head Office at Surat and Branch Office at Kolkata. The Assessing Officer made addition under section 68 of Rs.2.29 crore on account of share application money received from its group company, wherein another brother mother are Directors in the investor-company. During the assessment, the Assessing Officer required the supporting details. All supporting details were furnished before the Assessing Officer. The assessee brought on record that investor-company made a total investment of Rs.15.75 crores. The assessee received Rs.5.00 Crore in AY.2010-11, Rs.8.46 Crore in AY.2011-12 and only Rs.2.29 crores in the present financial year. No addition in proceeding assessment year on account of similar transaction was made, though in AY.2010-11, the assessment was completed under section 143(3) r.w.s 147. 16. The Ld. CIT(A) after considering the submission of the assessee held that on analyzing the various evidences and the audited books of account and ITRs and it cannot be said that investor company is a paper company. It is regularly assessed to income tax since 2006-2007 and accounts are audited up to 31.03.2017 as per the documents filed 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 20 before MCA and the Assessing Officer cross-examined the Director of investor-company on oath on 04.04.2018. In the statement, Director of the investor-company clearly stated that he is the real brother of Naresh K. Chopra, Director of the assessee-company. Their mother is also Director in both the companies. The ld CIT(A) held that these facts clearly prove that investor-company and Directors Company have common Director belonging to the same family. This fact clearly proves beyond doubt the genuineness of investor-company. On the creditworthiness of Directors, the ld CIT(A) held that Director of investor-company proved by showing evidence that funds were received on sale of share of other companies. Further there is no cash deposit in the bank account of Investor Company, which proves the creditworthiness of the investor-company. 17. The ld. CIT(A) recorded that Assessing Officer has not doubted the source in his remand report. On genuineness of transaction, the ld CIT(A) held that contention of the assessee is that investor company is group companies and the transaction is made through banking channels by following the procedure prescribed by Registrar of Companies, which is reflected in the books of account of both the companies. The ld. CIT(A) recorded that nowhere cash was introduced in any of the bank account. The ld. CIT(A) further recorded that investor-company filed its return of income showing investment in the assessee-company. Assessee’s produced books of account before Assessing Officer to show the genuineness of transactions. On the 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 21 objection of Assessing Officer that notice under section 133(6) issued by Assessing Officer were returned back, ld. CIT(A) noted that report of remark on the postal authority “address cannot be located”, carried suspension on the minds of the Assessing Officer on which he asked to produce the Director. It was held that during remand report proceeding before assessing officer, Dilip Chopra one of the Director of Investor Company appeared, he was examined on oath on 04.04.2018. In reply to specific question, he confirmed that he invested the share of assessee with premium of Rs.190/- on assessee’s face value of Rs.10/-. In another reply, he stated that source of funds for this investment is through RTGS on sale of investment which is not doubted by the Assessing Officer. There is no cash deposit in the bank account of investor-company, thus the source has been found explained in the account of investor-company. No further question is asked by the Assessing Officer during his further cross-examination. The ld. CIT(A) on the basis of his aforesaid observation concluded that assessee has proved all three ingredient as required under section 68 of the Income Tax Act, hence, deleted the entire addition. 18. We find that the assessee claimed that investor-company made a total investment of Rs.15.75 crores. The assessee received Rs.5.00 Crore in AY.2010-11, Rs.8.46 Crore in AY.2011-12 and only Rs.2.29 crores in the present financial year. No addition in proceeding assessment year on account of similar transaction was made, although in AY.2010-11, the assessment was completed under section 143(3) r.w.s 147. These 238/SRT/2020/AY.2012-13 Mahotsav Creations Pvt. Ltd. 22 investments by same investor company are not disputed or controverted by the revenue in their submission. Therefore, on the principal of consistency no addition on similar transaction, which has been accepted by the revenue, no addition under section 69n was warranted. There is no finding or allegation of the assessing officer that the investor company was indulging in providing accommodation entry. The only ground of suspicion by assessing officer was that the address of the investor company is of Kolkata. Thus, in view of aforesaid factual discussions, we do not find any illegality or infirmity in the order passed by ld CIT(A), which we affirm. No contrary fact or law is brought to our notice to take other view. In the result, the grounds of appeal raised by the revenue are dismissed. 19. In the result, the appeal of the revenue is dismissed. Order pronounced on 18/08/2022, in open court and the result was placed on the notice board. Sd/- Sd/- DR. A. L. SAINI PAWAN SINGH (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Surat, Dated: 18/08/2022 SAMANTA Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR /True copy/ By order // TRUE COPY // Sr.PS/PS ITAT, Surat