M/s Shreenath Holdings Pvt. Ltd., Howrah V. I.T.O.,Ward-5(1), Kolkata

ITA 2390/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4370 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-02-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 04-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Keywords: Unexplained cash credit; Source of fund; Retrospective amendment; Question of law; Accommodation entries; Onus to prove; Set aside
• Section: 143(3); 260A; 250; 22; 147; 131; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA [BEFORE SHRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER] I.T.A. NO. 2390/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. SHREENATH HOLDING PVT. LTD...............APPELLANT 33/34, RAMLAL MUKHERJEE LANE 2 ND FLOOR ROOM NO. 2D HOWRAH - 711106 [PAN: AADCS 5887 P] VS. INCOME TAX OFFICER, WARD-5(1), KOLKATA..........................RESPONDENT APPEARANCES BY: SHRI SUNIL SURANA, A/R, APPEARED ON BEHALF OF THE ASSESSEE. SHRI JAYANTA KHANRA, JCIT, SR. D/R, APPEARING ON BEHALF OF THE REVENUE DATE OF CONCLUDING THE HEARING : FEBRUARY 24 TH , 2020 DATE OF PRONOUNCING THE ORDER : FEBRUARY 26 TH , 2020 O R D E R PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 17/10/2019, FOR THE ASSESSMENT YEAR 2012-13. 2. THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE BUSINESS OF TRADING AND DISTRIBUTION OF GOODS. IT FILED ITS RETURN OF INCOME ON 16/08/2012 DECLARING TOTAL INCOME OF RS.15,500/-. DURING THE YEAR, THE ASSESSEE RAISED SHARE CAPITAL INCLUDING PREMIUM AMOUNTING TO RS.1,13,55,000/-. THE ASSESSING OFFICER CONDUCTED ENQUIRIES AND THE ASSESSEE PRESENTED THE SHARE HOLDERS INCLUDING THE DIRECTORS OF THE SHARE HOLDING COMPANIES BEFORE THE ASSESSING OFFICER. AFTER DUE ENQUIRY, THE ASSESSING OFFICER ACCEPTED THE EXPLANATIONS OF THE ASSESSEE THAT THE CASH CREDITS IN THE FORM OF SHARE CAPITAL WERE GENUINE, EXCEPT IN THE CASE OF M/S. SEACOM MERCHANTS, WHICH HAD APPLIED FOR SHARES. AN AMOUNT OF RS. 20,00,000/- PERTAINING TO M/S. SEACOM MERCHANTS, WAS ADDED. 2.1. THE CASE OF THE ASSESSEE IS THAT M/S. SEACOM MERCHANTS IS ASSESSED TO TAX AND THE VERY SAME AMOUNT OF RS.20,00,000/- HAS BEEN BROUGHT TO TAX IN THE HANDS OF M/S. SEACOM MERCHANTS IN THE SAME ASSESSMENT YEAR BY THE DEPARTMENT I.E. 2012-13. COPY OF THE ASSESSMENT ORDER PASSED U/S 144 R.W.S. 147 OF THE ACT, DT. 28/12/2019, IS FI LED BEFORE US. A PERUSAL OF THIS ORDER RS.20,00,000/- WITH M/S. UNDISCLOSED INCOME OF M/S. SEA THE SAME AMOUNT CAN BE TAXED ONCE AGAIN THE HANDS OF THE ASSESSEE COMPANY. 3. THIS BENCH OF THE TRIBUNAL IN THE CASE OF IN ITA NO. 1977/KOL/2016, ORDER DT. MAY 22 7. THE ASSESSEE ALSO FURNISHED COPY OF THE ASSESSMENT ORDERS PASSED U/S 143(3) OF THE ACT ON 26.03.2015 IN THE CASE OF AGGRESSIVE VINCOM PVT. LTD. BY ITO, WD- 1(1), KOLKATA BRINGING TO TAX THE SHARE CAPITAL AND SHARE PREMIUM ALLOTTED DURING THE YEAR. SIMILARLY ORDER PASSED U/S 143(3) DATED 10.03.2015 BY ITO,WARD FILED WHEREIN THE ENTIRE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE INCLUDING SHARE PREMIUM WAS BROUGHT TO TAX U/S 68 WHETHER UNDER SUCH CIRCUMSTANCES, I.E. WHEN THE SHARE APPLICANT COMPANIES HAVE BEEN TAXED ON THE SOURCE OF FUNDS IN THEIR ACCOUNTS THEN AN ADDITION CAN BE MADE U/S 68 OF THE ACT. 8. THIS BENCH OF THE TRIBUNAL UNDER SIMILAR CIRC M/S. MAA AMBA TOWERS LTD.; ITA NO.1381/KOL/2015; ASSESSMENT YEAR 2012 12 TH OCTOBER, 2018, HAD HELD AS FOLLOWS: 3. MR. CHOUDHURY VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT THE ASSESSING OFFICER HAD FAILED TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SHARE PREMIUM MONEY. HE TERMS THE IMPUGNED SHARE SUBSCRIPTION PREMIUM PER SHARE HAVING FACE VALUE OF LAWS SUMATI DAYAL VS. CIT MORE (1971) 82 ITR 540 (SC) IS FURTHER QUOTED DURING THE COUR THE RELEVANT EVIDENCE SUBMITTED DURING THE COURSE OF ASSESSMENT HAS TO BE CONSIDERED AS PER THE HUMAN PROBABILITIES BY REMOVING ALL BLINKERS. OUR ATTENTION IS THEREAFTER INVITED TO THE RELEVANT NUANCES OF SUCH SHARE SUBSCRIPTION ROUTING INVOLVING MULTIPLE LAYERS TO PLOUGH BACK UNACCOUNTED MONIES BACK TO THE BOOKS. WE FIND NO MERIT IN THE REVENUE'S INSTANT GRIEVANCE IN THE LIGHT OF RELEVANT FACTS ON RECORD. THERE IS NO DISPUTE ABOUT THE ASSESSEE'S HAVING DECLARED ITS SHARE SUBSCRIPTION PRE LTD., CROWN MANSION PVT. LTD., LIBERAL INFRASTRUCTURE PVT. LTD., DARSHAN ENCLAVE PVT. LTD., SNOW FALL IMPEX PVT. LTD. INVOLVING CORRESPONDING SUMS OF 27,60,000/-, 55,20,000/ 48,30,000/- IN LAST ENTITY'S CASE; RESPECTIVELY TOTALLING TO FILE SUGGESTS THAT THE ASSESSEE HAS PLACED ON RECORD THEIR INCOME TAX ACKNOWLEDGEMENT OF THE IMPUGNED ASSESSMENT YEAR 2012 ALONG WITH AUDITE INVESTMENTS, BANK STATEMENTS, SHARE APPLICATION FORMS AND BOARD'S RESOLUTION(S) FOLLOWED BY THEIR RESPECTIVE REGULAR ASSESSMENT ORDERS PERTAINING TO VERY ASSESSMENT YEAR U/S. 143(3) OF THE ACT. THEIR UNEXPLAINED CASH CREDITS ADDITIONS OF SHARE PREMIUM AMOUNTING TO 67,03,00,000, 2 ASSESSMENT ORDER PASSED U/S 144 R.W.S. 147 OF THE ACT, DT. 28/12/2019, IS LED BEFORE US. A PERUSAL OF THIS ORDER DEMONSTRATES THAT THE TRANSACTION OF WITH M/S. SHREENATH HOLDINGS PVT. LTD. WAS ASSESSED AS THE UNDISCLOSED INCOME OF M/S. SEA COM MERCHANTS . ON THESE FACTS, THE ISSUE IS WHETHER THE SAME AMOUNT CAN BE TAXED ONCE AGAIN THE HANDS OF THE ASSESSEE COMPANY. THIS BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S. HAPPY STRUCTURE PVT. LTD. IN ITA NO. 1977/KOL/2016, ORDER DT. MAY 22 ND , 2019, HELD AS FOLLOWS:- THE ASSESSEE ALSO FURNISHED COPY OF THE ASSESSMENT ORDERS PASSED U/S 143(3) OF THE ACT ON 26.03.2015 IN THE CASE OF AGGRESSIVE VINCOM PVT. LTD. BY ITO, 1(1), KOLKATA BRINGING TO TAX THE SHARE CAPITAL AND SHARE PREMIUM ALLOTTED DURING THE YEAR. SIMILARLY , IN THE CASE OF FLABBY SALES PVT. LTD., THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 10.03.2015 BY ITO,WARD - 2(2), KOLKATA HAS BEEN FILED WHEREIN THE ENTIRE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE INCLUDING SHARE PREMIUM WAS BROUGHT TO TAX U/S 68 OF THE ACT. THE QUESTION IS WHETHER UNDER SUCH CIRCUMSTANCES, I.E. WHEN THE SHARE APPLICANT COMPANIES HAVE BEEN TAXED ON THE SOURCE OF FUNDS IN THEIR ACCOUNTS THEN AN ADDITION CAN BE MADE THIS BENCH OF THE TRIBUNAL UNDER SIMILAR CIRC UMSTANCES, IN THE CASE OF DCIT VS. M/S. MAA AMBA TOWERS LTD.; ITA NO.1381/KOL/2015; ASSESSMENT YEAR 2012 - OCTOBER, 2018, HAD HELD AS FOLLOWS: - 3. MR. CHOUDHURY VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT THE ASSESSING OFFICER HAD RIGHTLY MADE THE IMPUGNED ADDITION SINCE THE TAXPAYER HAD FAILED TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SHARE PREMIUM MONEY. HE TERMS THE IMPUGNED SHARE SUBSCRIPTION PREMIUM PER SHARE HAVING FACE VALUE OF 10/- EACH AS HIGHLY EXORBITANT. CASE SUMATI DAYAL VS. CIT (1995) 214 ITR 801 ( SC) AND CIT VS. DURGA PRASAD (1971) 82 ITR 540 (SC) IS FURTHER QUOTED DURING THE COUR SE OF HEARING THAT THE RELEVANT EVIDENCE SUBMITTED DURING THE COURSE OF ASSESSMENT HAS TO BE CONSIDERED AS PER THE HUMAN PROBABILITIES BY REMOVING ALL BLINKERS. OUR ATTENTION IS THEREAFTER INVITED TO THE RELEVANT NUANCES OF SUCH SHARE SUBSCRIPTION INVOLVING MULTIPLE LAYERS TO PLOUGH BACK UNACCOUNTED MONIES BACK TO THE BOOKS. WE FIND NO MERIT IN THE REVENUE'S INSTANT GRIEVANCE IN THE LIGHT OF RELEVANT FACTS ON RECORD. THERE IS NO DISPUTE ABOUT THE ASSESSEE'S HAVING DECLARED ITS SHARE SUBSCRIPTION PRE MIUM FROM M/S AGRANI CREDIT & FINVEST PVT. LTD., CROWN MANSION PVT. LTD., LIBERAL INFRASTRUCTURE PVT. LTD., DARSHAN ENCLAVE PVT. LTD., SNOW FALL IMPEX PVT. LTD. INVOLVING CORRESPONDING SUMS OF 55,20,000/ -, 82,80,000/- IN CASE OF THIRD AND F IN LAST ENTITY'S CASE; RESPECTIVELY TOTALLING TO 3,01,00,000/ FILE SUGGESTS THAT THE ASSESSEE HAS PLACED ON RECORD THEIR INCOME TAX ACKNOWLEDGEMENT OF THE IMPUGNED ASSESSMENT YEAR 2012 - 13, DIRECTORS' REPORT ALONG WITH AUDITE D FINANCIAL STATEMENTS, EXPLANATION REGARDING SOURCE OF INVESTMENTS, BANK STATEMENTS, SHARE APPLICATION FORMS AND BOARD'S RESOLUTION(S) FOLLOWED BY THEIR RESPECTIVE REGULAR ASSESSMENT ORDERS PERTAINING TO VERY ASSESSMENT YEAR U/S. 143(3) OF THE ACT. THEIR ASSESSING OFFICER(S) MADE U/S 68 UNEXPLAINED CASH CREDITS ADDITIONS OF SHARE PREMIUM AMOUNTING TO 67,03,00,000, 44,85,00,000/-, 24,42,00,000/- & 21,70,00,000/ I.T.A. NO. 2390/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. SHREENATH HOLDING PVT. LTD ASSESSMENT ORDER PASSED U/S 144 R.W.S. 147 OF THE ACT, DT. 28/12/2019, IS DEMONSTRATES THAT THE TRANSACTION OF SHREENATH HOLDINGS PVT. LTD. WAS ASSESSED AS THE . ON THESE FACTS, THE ISSUE IS WHETHER THE SAME AMOUNT CAN BE TAXED ONCE AGAIN THE HANDS OF THE ASSESSEE COMPANY. ITO VS. M/S. HAPPY STRUCTURE PVT. LTD. THE ASSESSEE ALSO FURNISHED COPY OF THE ASSESSMENT ORDERS PASSED U/S 143(3) OF THE ACT ON 26.03.2015 IN THE CASE OF AGGRESSIVE VINCOM PVT. LTD. BY ITO, 1(1), KOLKATA BRINGING TO TAX THE SHARE CAPITAL AND SHARE PREMIUM ALLOTTED , IN THE CASE OF FLABBY SALES PVT. LTD., THE ASSESSMENT 2(2), KOLKATA HAS BEEN FILED WHEREIN THE ENTIRE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE OF THE ACT. THE QUESTION IS WHETHER UNDER SUCH CIRCUMSTANCES, I.E. WHEN THE SHARE APPLICANT COMPANIES HAVE BEEN TAXED ON THE SOURCE OF FUNDS IN THEIR ACCOUNTS THEN AN ADDITION CAN BE MADE UMSTANCES, IN THE CASE OF DCIT VS. - 13, ORDER DT. 3. MR. CHOUDHURY VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT THE HAD RIGHTLY MADE THE IMPUGNED ADDITION SINCE THE TAXPAYER HAD FAILED TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SHARE PREMIUM MONEY. HE TERMS THE IMPUGNED SHARE SUBSCRIPTION PREMIUM 690/- EXORBITANT. CASE SC) AND CIT VS. DURGA PRASAD SE OF HEARING THAT THE RELEVANT EVIDENCE SUBMITTED DURING THE COURSE OF ASSESSMENT HAS TO BE CONSIDERED AS PER THE HUMAN PROBABILITIES BY REMOVING ALL BLINKERS. OUR ATTENTION IS THEREAFTER INVITED TO THE RELEVANT NUANCES OF SUCH SHARE SUBSCRIPTION INVOLVING MULTIPLE LAYERS TO PLOUGH BACK UNACCOUNTED MONIES BACK TO THE BOOKS. WE FIND NO MERIT IN THE REVENUE'S INSTANT GRIEVANCE IN THE LIGHT OF RELEVANT FACTS ON RECORD. THERE IS NO DISPUTE ABOUT THE ASSESSEE'S HAVING MIUM FROM M/S AGRANI CREDIT & FINVEST PVT. LTD., CROWN MANSION PVT. LTD., LIBERAL INFRASTRUCTURE PVT. LTD., DARSHAN ENCLAVE PVT. LTD., SNOW FALL IMPEX PVT. LTD. INVOLVING CORRESPONDING SUMS OF IN CASE OF THIRD AND F OURTH AND 3,01,00,000/ -. CASE FILE SUGGESTS THAT THE ASSESSEE HAS PLACED ON RECORD THEIR INCOME TAX 13, DIRECTORS' REPORT D FINANCIAL STATEMENTS, EXPLANATION REGARDING SOURCE OF INVESTMENTS, BANK STATEMENTS, SHARE APPLICATION FORMS AND BOARD'S RESOLUTION(S) FOLLOWED BY THEIR RESPECTIVE REGULAR ASSESSMENT ORDERS PERTAINING TO VERY ASSESSING OFFICER(S) MADE U/S 68 UNEXPLAINED CASH CREDITS ADDITIONS OF SHARE PREMIUM AMOUNTING TO 21,70,00,000/ - IN CASE OF FIRST FOUR ENTITIES AND ACCEPTED SIMILAR CREDITS OF SATISFYING ALL PARAMETERS OF IDENTITY, GENUINENESS AND CREDITWORTHINESS. IT CAN THEREFORE BE SAFELY ASSUMED THAT ALL THESE ADDITIONS SUMS FORMING SUBJECT MATTER OF THE IMPUGNED ADDITIONS TO BE ACCEPTED AS GENUINE IN RESPECTIVE INVESTORS ENTITIES' END AS T 3,01,00,000/- . LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THAT THE SAME VERY AMOUNT CANNOT BE ADDED TWICE IN PAYEES AND RECIPIENTS' HANDS U/S 68 OF THE ACT. WE THEREFORE SEE NO REASON TO ACCEPT RE SUBSTANTIVE GROUND. WE AFFIRM CIT(A)'S FINDINGS UNDER CHALLENGE QUA THE INSTANT FORMER ISSUE. 9. THIS BENCH OF THE TRIBUNAL UNDER SIMILAR CIRCUMSTANCES, IN THE CASE OF M/S C.P. RE- ROLLERS LTD. VS. DCIT.; ITA NO.1811/KOL/2017; ASSES 03.04.2019, HAD HELD AS FOLLOWS: 46. WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF M/S EARTH METAL ELECTRICALS P LTD VS CIT & ANR. REPORTED IN 2010 (7) TMI 1137 IN CIVIL APPEAL NO. 21073 / 2009 DATED 30.7.2010 ARISI COURT HAD HELD AS UNDER: ORDER DELAY CONDONED. LEAVE GRANTED. HEARD LEARNED COUNSEL ON BOTH SIDES. WE HAVE EXAMINED THE POSITION. WE FIND THAT THE SHAREHOLDERS ARE GENUINE PARTIES. THEY ARE NOT BOGUS AND FICTITIOUS. THEREFORE, THE IMPUGNED ORDER IS SET ASIDE. THE APPEAL IS ALLOWED ACCORDINGLY. NO ORDER AS TO COSTS. 47. IN THE INSTANT CASE BEFORE US, W ARE DULY ASSESSED TO INCOME TAX. THE LD AR HAD PLACED ON RECORD THE COPIES OF THE ASSESSMENT ORDERS FRAMED IN THE CASES OF THE SHARE SUBSCRIBING COMPANIES, AS NOTED ABOVE. IT THEREFORE CANNOT BE DISPUTED THA IN EXISTENCE. FROM THE ASSESSMENT ORDERS, IT IS NOTED THAT THE SHARE SUBSCRIBING COMPANIES ARE DULY ASSESSED TO INCOME TAX AND THEIR INCOME TAX PARTICULARS TOGETHER WITH THE COPIES OF RESPECTIVE INCOME TAX RETURNS ARE ALREADY ON RECORD. WE ALSO FIND THAT THE LD. CIT(A) HAD CATEGORICALLY STATED THAT THE SCRUTINY ASSESSMENTS WERE FRAMED ON THE SHARE SUBSCRIBING COMPANIES FOR THE ASST YEAR 2010 CARRIED OUT BY THEM WERE THE SUBJECT MATTER OF EXAMINATION BY THE INCOME TAX DEPARTMENT IN SCRUTINY PROCEEDINGS. THIS FACT HAS NOT BEEN CONTROVERTED BY THE REVENUE BEFORE US. 48. WE MAY GAINFULLY REFER TO THE JUDGMENT IN THE CASE OF PR. CIT VS P SHIPPING (P) LTD (84 TAXMANN.COM 58) WHEREIN THE BOMBAY HIGH COURT HAD DELETED SIMILAR ADDITION ON SIMILAR SET OF FACTS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS AND THE SLP FILED BY THE REVENUE AGAINST THE JUDGMENT HAS BEEN DISMISSED BY T HONBLE SUPREME COURT. THE RELEVANT EXTRACTS OF THE JUDGMENT IS AS FOLLOWS: 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATIONS TO THE RIVAL CONTENTIONS OF THE LEARNED COUNSEL AND WE HAVE ALSO GONE THROUGH THE RECORDS. THE BASIC CONTENTION OF THE LEARNED C OUNSEL APPEARING FOR THE APPELLANTS REVOLVES UPON THE STAND TAKEN BY THE APPELLANTS WHETHER THE SHAREHOLDERS WHO HAVE INVESTED IN THE SHARES OF THE RESPONDENTS ARE FICTITIOUS OR NOT. IN THIS CONNECTION, THE RESPONDENTS IN SUPPORT OF THEIR STAND ABOUT THE G COMPANIES HAS PRODUCED VOLUMINOUS DOCUMENTS WHICH, INTER ALIA, HAVE BEEN NOTED AT PARA 3 OF THE JUDGMENT OF THE CIT APPEALS WHICH READS THUS : 3 FIRST FOUR ENTITIES AND ACCEPTED SIMILAR CREDITS OF 20,45,00,000/- TO BE GENUINE SATISFYING ALL PARAMETERS OF IDENTITY, GENUINENESS AND CREDITWORTHINESS. IT CAN THEREFORE BE SAFELY ASSUMED THAT ALL THESE ADDITIONS SUMS FORMING SUBJECT MATTER OF THE IMPUGNED ADDITIONS TO BE ACCEPTED AS GENUINE IN RESPECTIVE INVESTORS ENTITIES' END AS T HE SOURCE OF THE AMOUNT(S) IN ISSUE TOTALLING TO . LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THAT THE SAME VERY AMOUNT CANNOT BE ADDED TWICE IN PAYEES AND RECIPIENTS' HANDS U/S 68 OF THE ACT. WE THEREFORE SEE NO REASON TO ACCEPT RE VENUE'S INSTANT FORMER SUBSTANTIVE GROUND. WE AFFIRM CIT(A)'S FINDINGS UNDER CHALLENGE QUA THE INSTANT THIS BENCH OF THE TRIBUNAL UNDER SIMILAR CIRCUMSTANCES, IN THE CASE OF M/S C.P. ROLLERS LTD. VS. DCIT.; ITA NO.1811/KOL/2017; ASSES SMENT YEAR 2013- 14, ORDER DT. 03.04.2019, HAD HELD AS FOLLOWS: - 46. WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF M/S EARTH METAL ELECTRICALS P LTD VS CIT & ANR. REPORTED IN 2010 (7) TMI 1137 IN CIVIL APPEAL NO. 21073 / 2009 DATED 30.7.2010 ARISI NG FROM THE ORDER OF HONBLE BOMBAY HIGH COURT HAD HELD AS UNDER: - HEARD LEARNED COUNSEL ON BOTH SIDES. WE HAVE EXAMINED THE POSITION. WE FIND THAT THE SHAREHOLDERS ARE GENUINE PARTIES. THEY ARE NOT BOGUS AND FICTITIOUS. THEREFORE, THE IMPUGNED ORDER IS SET ASIDE. THE APPEAL IS ALLOWED ACCORDINGLY. NO ORDER AS TO COSTS. 47. IN THE INSTANT CASE BEFORE US, W E ALSO NOTE THAT THE SHARE SUBSCRIBING COMPANIES ARE DULY ASSESSED TO INCOME TAX. THE LD AR HAD PLACED ON RECORD THE COPIES OF THE ASSESSMENT ORDERS FRAMED IN THE CASES OF THE SHARE SUBSCRIBING COMPANIES, AS NOTED ABOVE. IT THEREFORE CANNOT BE DISPUTED THA T THE SHARE SUBSCRIBING COMPANIES ARE NOT IN EXISTENCE. FROM THE ASSESSMENT ORDERS, IT IS NOTED THAT THE SHARE SUBSCRIBING COMPANIES ARE DULY ASSESSED TO INCOME TAX AND THEIR INCOME TAX PARTICULARS TOGETHER WITH THE COPIES OF RESPECTIVE INCOME TAX RETURNS WITH THEIR BALANCE SHEETS ARE ALREADY ON RECORD. WE ALSO FIND THAT THE LD. CIT(A) HAD CATEGORICALLY STATED THAT THE SCRUTINY ASSESSMENTS WERE FRAMED ON THE SHARE SUBSCRIBING COMPANIES FOR THE ASST YEAR 2010 - 11 WHICH SHOWS THEIR EXISTENCE IS GENUINE AND TRA CARRIED OUT BY THEM WERE THE SUBJECT MATTER OF EXAMINATION BY THE INCOME TAX DEPARTMENT IN SCRUTINY PROCEEDINGS. THIS FACT HAS NOT BEEN CONTROVERTED BY THE REVENUE BEFORE US. 48. WE MAY GAINFULLY REFER TO THE JUDGMENT IN THE CASE OF PR. CIT VS P ARADISE INLAND SHIPPING (P) LTD (84 TAXMANN.COM 58) WHEREIN THE BOMBAY HIGH COURT HAD DELETED SIMILAR ADDITION ON SIMILAR SET OF FACTS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS AND THE SLP FILED BY THE REVENUE AGAINST THE JUDGMENT HAS BEEN DISMISSED BY T HONBLE SUPREME COURT. THE RELEVANT EXTRACTS OF THE JUDGMENT IS AS FOLLOWS: 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATIONS TO THE RIVAL CONTENTIONS OF THE LEARNED COUNSEL AND WE HAVE ALSO GONE THROUGH THE RECORDS. THE BASIC CONTENTION OUNSEL APPEARING FOR THE APPELLANTS REVOLVES UPON THE STAND TAKEN BY THE APPELLANTS WHETHER THE SHAREHOLDERS WHO HAVE INVESTED IN THE SHARES OF THE RESPONDENTS ARE FICTITIOUS OR NOT. IN THIS CONNECTION, THE RESPONDENTS IN SUPPORT OF THEIR STAND ABOUT THE G ENUINENESS OF THE TRANSACTION ENTERED INTO WITH SUCH COMPANIES HAS PRODUCED VOLUMINOUS DOCUMENTS WHICH, INTER ALIA, HAVE BEEN NOTED AT PARA 3 OF THE JUDGMENT OF THE CIT APPEALS WHICH READS THUS : I.T.A. NO. 2390/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. SHREENATH HOLDING PVT. LTD TO BE GENUINE SATISFYING ALL PARAMETERS OF IDENTITY, GENUINENESS AND CREDITWORTHINESS. IT CAN THEREFORE BE SAFELY ASSUMED THAT ALL THESE ADDITIONS SUMS FORMING SUBJECT - MATTER OF THE IMPUGNED ADDITIONS TO BE ACCEPTED AS GENUINE IN RESPECTIVE HE SOURCE OF THE AMOUNT(S) IN ISSUE TOTALLING TO . LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THAT THE SAME VERY AMOUNT CANNOT BE ADDED TWICE IN PAYEES AND RECIPIENTS' HANDS U/S 68 VENUE'S INSTANT FORMER SUBSTANTIVE GROUND. WE AFFIRM CIT(A)'S FINDINGS UNDER CHALLENGE QUA THE INSTANT THIS BENCH OF THE TRIBUNAL UNDER SIMILAR CIRCUMSTANCES, IN THE CASE OF M/S C.P. 14, ORDER DT. 46. WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF M/S EARTH METAL ELECTRICALS P LTD VS CIT & ANR. REPORTED IN 2010 (7) TMI 1137 IN CIVIL APPEAL NO. NG FROM THE ORDER OF HONBLE BOMBAY HIGH WE HAVE EXAMINED THE POSITION. WE FIND THAT THE SHAREHOLDERS ARE GENUINE PARTIES. THEY ARE NOT BOGUS AND FICTITIOUS. THEREFORE, THE IMPUGNED ORDER IS SET ASIDE. E ALSO NOTE THAT THE SHARE SUBSCRIBING COMPANIES ARE DULY ASSESSED TO INCOME TAX. THE LD AR HAD PLACED ON RECORD THE COPIES OF THE ASSESSMENT ORDERS FRAMED IN THE CASES OF THE SHARE SUBSCRIBING COMPANIES, AS NOTED T THE SHARE SUBSCRIBING COMPANIES ARE NOT IN EXISTENCE. FROM THE ASSESSMENT ORDERS, IT IS NOTED THAT THE SHARE SUBSCRIBING COMPANIES ARE DULY ASSESSED TO INCOME TAX AND THEIR INCOME TAX PARTICULARS WITH THEIR BALANCE SHEETS ARE ALREADY ON RECORD. WE ALSO FIND THAT THE LD. CIT(A) HAD CATEGORICALLY STATED THAT THE SCRUTINY ASSESSMENTS WERE FRAMED ON THE SHARE SUBSCRIBING COMPANIES FOR 11 WHICH SHOWS THEIR EXISTENCE IS GENUINE AND TRA NSACTIONS CARRIED OUT BY THEM WERE THE SUBJECT MATTER OF EXAMINATION BY THE INCOME TAX DEPARTMENT IN SCRUTINY PROCEEDINGS. THIS FACT HAS NOT BEEN CONTROVERTED BY THE ARADISE INLAND SHIPPING (P) LTD (84 TAXMANN.COM 58) WHEREIN THE BOMBAY HIGH COURT HAD DELETED SIMILAR ADDITION ON SIMILAR SET OF FACTS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS AND THE SLP FILED BY THE REVENUE AGAINST THE JUDGMENT HAS BEEN DISMISSED BY T HE HONBLE SUPREME COURT. THE RELEVANT EXTRACTS OF THE JUDGMENT IS AS FOLLOWS: 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATIONS TO THE RIVAL CONTENTIONS OF THE LEARNED COUNSEL AND WE HAVE ALSO GONE THROUGH THE RECORDS. THE BASIC CONTENTION OUNSEL APPEARING FOR THE APPELLANTS REVOLVES UPON THE STAND TAKEN BY THE APPELLANTS WHETHER THE SHAREHOLDERS WHO HAVE INVESTED IN THE SHARES OF THE RESPONDENTS ARE FICTITIOUS OR NOT. IN THIS CONNECTION, THE RESPONDENTS IN SUPPORT OF ENUINENESS OF THE TRANSACTION ENTERED INTO WITH SUCH COMPANIES HAS PRODUCED VOLUMINOUS DOCUMENTS WHICH, INTER ALIA, HAVE BEEN NOTED 'THE ASSESSMENT IS COMPLETED WITHOUT REBUTTING THE 550 PAGE UNFLINCHING RECORDS OF THE COMPANIES. THE LIST OF DOCUMENTS SUBMITTED ON 09.03.2015 ARE AS FOLLOWS : 1. SONY FINANCIAL SERVICES LTD. DATE OF REGISTRATION 09/05/1995 6. ON GOING THROUGH THE DOCUMENTS WHICH HAVE BEEN PRODUCED WHICH ARE BASICALLY FROM THE PUBLIC OFFICES, WHICH MAINTAIN THE RECORDS OF THE COMPANIES. THE DOCUMENTS ALSO INCLUDE ASSESSMENT ORDERS FOR LAST THREE PRECEDING YEARS OF SUCH COMPANIES. 7. THE APP ELLANTS HAVE FAILED TO EXPLAIN AS TO HOW SUCH COMPANIES HAVE BEEN ASSESSED THOUGH ACCORDING TO THEM SUCH COMPANIES ARE NOT EXISTING AND ARE FICTITIOUS COMPANIES. BESIDES THE DOCUMENTS ALSO INCLUDED THE REGISTRATION OF THE COMPANY WHICH DISCLOSES THE REGIST MATERIAL ON RECORD PRODUCED BY THE APPELLANTS WHICH COULD REBUT THE DOCUMENTS PRODUCED BY THE RESPONDENTS HEREIN. IN SUCH CIRCUMSTANCES, THE FINDING OF FACT ARRIVED AT BY THE AUTHORITIES BELOW WHICH ARE BASED ON RECORD CANNOT BE SAID TO BE PERVERSE. LEARNED COUNSEL APPEARING FOR THE APPELLANTS WAS UNABLE TO POINT OUT THAT ANY OF SUCH FINDINGS ARRIVED AT BY THE AUTHORITIES BELOW WERE ON THE BASIS OF MISLEADING OF EVIDENCE OR FAILURE TO EXAMI MATERIAL DOCUMENTS WHILST COMING TO SUCH CONCLUSIONS. UNDER THE GUISE OF THE SUBSTANTIAL QUESTION OF LAW, THIS COURT IN AN APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT CANNOT REAPPRECIATE THE EVIDENCE TO COME TO ANY CONTRARY EVIDENCE. CONSIDERING THAT THE AUTHORITIES HAVE RENDERED THE FINDINGS OF FACTS BASED ON DOCUMENTS WHICH HAVE NOT BEEN DISPUTED, WE FIND THAT THERE ARE NO SUBSTANTIAL QUESTION OF LAW WHICH ARISES IN THE PRESENT APPEAL FOR CONSIDERATION. 49. WE ALSO FIND THAT THE HONBLE APEX VAISHNODEVI REFOILS & SOLVEX REPORTED IN (2018) 96 TAXMANN.COM 469 (SC) WHEREIN THE SLP OF THE REVENUE HAS BEEN DISMISSED BY THE HONBLE APEX COURT. THE BRIEF FACTS OF THAT CASE WERE THAT THE ADDITION U/S 68 O ASSESSING OFFICER IN RESPECT OF CAPITAL CONTRIBUTED BY THE PARTNER OF THE FIRM. THE HONBLE GUJARAT HIGH COURT NOTED THAT WHEN THE CONCERNED PARTNER HAD CONFIRMED BEFORE THE ASSESSING OFFICER ABOUT HIS FACT OF MAKING CAPITAL CONTR FIRM AND THAT THE SAID INVESTMENT IS ALSO REFLECTED IN HIS INDIVIDUAL BOOKS OF ACCOUNTS, THEN NO ADDITION COULD BE MADE U/S 68 OF THE ACT. THE DECISION OF HONBLE GUJARAT HIGH COURT IS REPORTED IN (2018) 89 TAXMANN.COM 80 (GUJ HC) . THE SLP THE REVENUE AGAINST THIS JUDGMENT WAS DISMISSED BY THE HONBLE SUPREME COURT. 50. WE MAY GAINFULLY REFER TO THE FOLLOWING DECISIONS OF THE HONBLE HIGH COURT IN THE CASES AS UNDER: (A) IN THE CASE OF PR. CIT VS CHAIN HOUSE INTERNATIONAL (P) LTD [201 TAXMANN.COM 47)THE AO HAD ADDED THE SHARE APPLICATION BY WAY OF UNEXPLAINED CASH CREDITS WAS THAT THE ASSESSEE WAS UNABLE TO GIVE ANY JUSTIFIABLE REASON FOR ISSUING SHARES AT A PREMIUM. THE HONBLE MADHYA PRADESH HIGH COURT DID NOT AGREE WITH THIS R EASONING GIVEN BY THE AO FOR MAKING ADDITION U/S 68, HOLDING AS UNDER: ISSUING THE SHARE AT A PREMIUM WAS A COMMERCIAL DECISION. IT IS THE PREROGATIVE OF THE BOARD OF DIRECTORS OF A COMPANY TO DECIDE THE PREMIUM AMOUNT AND IT IS THE WISDOM OF SHAREHOLDE PREMIUM OR NOT. THIS WAS A MUTUAL DECISION BETWEEN BOTH THE COMPANIES. IN DAY TO DAY MARKET, UNLESS AND UNTIL, THE RATES IS FIXED BY ANY GOVT. AUTHORITY OR UNLESS 4 'THE ASSESSMENT IS COMPLETED WITHOUT REBUTTING THE 550 PAGE DOCUMENTS WHICH ARE UNFLINCHING RECORDS OF THE COMPANIES. THE LIST OF DOCUMENTS SUBMITTED ON 09.03.2015 ARE AS FOLLOWS : 1. SONY FINANCIAL SERVICES LTD. - CIN U74899DL1995PLC068362- DATE OF REGISTRATION 09/05/1995 6. ON GOING THROUGH THE DOCUMENTS WHICH HAVE BEEN PRODUCED WHICH ARE BASICALLY FROM THE PUBLIC OFFICES, WHICH MAINTAIN THE RECORDS OF THE COMPANIES. THE DOCUMENTS ALSO INCLUDE ASSESSMENT ORDERS FOR LAST THREE PRECEDING YEARS OF SUCH ELLANTS HAVE FAILED TO EXPLAIN AS TO HOW SUCH COMPANIES HAVE BEEN ASSESSED THOUGH ACCORDING TO THEM SUCH COMPANIES ARE NOT EXISTING AND ARE FICTITIOUS COMPANIES. BESIDES THE DOCUMENTS ALSO INCLUDED THE REGISTRATION OF THE COMPANY WHICH DISCLOSES THE REGIST ERED ADDRESS OF SUCH COMPANIES. THERE IS NO MATERIAL ON RECORD PRODUCED BY THE APPELLANTS WHICH COULD REBUT THE DOCUMENTS PRODUCED BY THE RESPONDENTS HEREIN. IN SUCH CIRCUMSTANCES, THE FINDING OF FACT ARRIVED AT BY THE AUTHORITIES BELOW WHICH ARE BASED ON DOCUMENTARY EVIDENCE ON RECORD CANNOT BE SAID TO BE PERVERSE. LEARNED COUNSEL APPEARING FOR THE APPELLANTS WAS UNABLE TO POINT OUT THAT ANY OF SUCH FINDINGS ARRIVED AT BY THE AUTHORITIES BELOW WERE ON THE BASIS OF MISLEADING OF EVIDENCE OR FAILURE TO EXAMI MATERIAL DOCUMENTS WHILST COMING TO SUCH CONCLUSIONS. UNDER THE GUISE OF THE SUBSTANTIAL QUESTION OF LAW, THIS COURT IN AN APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT CANNOT REAPPRECIATE THE EVIDENCE TO COME TO ANY CONTRARY EVIDENCE. THAT THE AUTHORITIES HAVE RENDERED THE FINDINGS OF FACTS BASED ON DOCUMENTS WHICH HAVE NOT BEEN DISPUTED, WE FIND THAT THERE ARE NO SUBSTANTIAL QUESTION OF LAW WHICH ARISES IN THE PRESENT APPEAL FOR CONSIDERATION. 49. WE ALSO FIND THAT THE HONBLE APEX COURT RECENTLY IN THE CASE OF PRINCIPAL CIT VS VAISHNODEVI REFOILS & SOLVEX REPORTED IN (2018) 96 TAXMANN.COM 469 (SC) WHEREIN THE SLP OF THE REVENUE HAS BEEN DISMISSED BY THE HONBLE APEX COURT. THE BRIEF FACTS OF THAT CASE WERE THAT THE ADDITION U/S 68 O F THE ACT WAS MADE BY THE ASSESSING OFFICER IN RESPECT OF CAPITAL CONTRIBUTED BY THE PARTNER OF THE FIRM. THE HONBLE GUJARAT HIGH COURT NOTED THAT WHEN THE CONCERNED PARTNER HAD CONFIRMED BEFORE THE ASSESSING OFFICER ABOUT HIS FACT OF MAKING CAPITAL CONTR IBUTION IN THE FIRM AND THAT THE SAID INVESTMENT IS ALSO REFLECTED IN HIS INDIVIDUAL BOOKS OF ACCOUNTS, THEN NO ADDITION COULD BE MADE U/S 68 OF THE ACT. THE DECISION OF HONBLE GUJARAT HIGH COURT IS REPORTED IN (2018) 89 TAXMANN.COM 80 (GUJ HC) . THE SLP THE REVENUE AGAINST THIS JUDGMENT WAS DISMISSED BY THE HONBLE SUPREME COURT. 50. WE MAY GAINFULLY REFER TO THE FOLLOWING DECISIONS OF THE HONBLE HIGH COURT IN THE CASES AS UNDER: (A) IN THE CASE OF PR. CIT VS CHAIN HOUSE INTERNATIONAL (P) LTD [201 TAXMANN.COM 47)THE AO HAD ADDED THE SHARE APPLICATION BY WAY OF UNEXPLAINED CASH CREDITS WAS THAT THE ASSESSEE WAS UNABLE TO GIVE ANY JUSTIFIABLE REASON FOR ISSUING SHARES AT A PREMIUM. THE HONBLE MADHYA PRADESH HIGH COURT DID NOT EASONING GIVEN BY THE AO FOR MAKING ADDITION U/S 68, HOLDING AS ISSUING THE SHARE AT A PREMIUM WAS A COMMERCIAL DECISION. IT IS THE PREROGATIVE OF THE BOARD OF DIRECTORS OF A COMPANY TO DECIDE THE PREMIUM AMOUNT AND IT IS THE WISDOM OF SHAREHOLDE R WHETHER THEY WANT TO SUBSCRIBE THE SHARES AT SUCH A PREMIUM OR NOT. THIS WAS A MUTUAL DECISION BETWEEN BOTH THE COMPANIES. IN DAY TO DAY MARKET, UNLESS AND UNTIL, THE RATES IS FIXED BY ANY GOVT. AUTHORITY OR UNLESS I.T.A. NO. 2390/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. SHREENATH HOLDING PVT. LTD DOCUMENTS WHICH ARE UNFLINCHING RECORDS OF THE COMPANIES. THE LIST OF DOCUMENTS SUBMITTED ON 6. ON GOING THROUGH THE DOCUMENTS WHICH HAVE BEEN PRODUCED WHICH ARE BASICALLY FROM THE PUBLIC OFFICES, WHICH MAINTAIN THE RECORDS OF THE COMPANIES. THE DOCUMENTS ALSO INCLUDE ASSESSMENT ORDERS FOR LAST THREE PRECEDING YEARS OF SUCH ELLANTS HAVE FAILED TO EXPLAIN AS TO HOW SUCH COMPANIES HAVE BEEN ASSESSED THOUGH ACCORDING TO THEM SUCH COMPANIES ARE NOT EXISTING AND ARE FICTITIOUS COMPANIES. BESIDES THE DOCUMENTS ALSO INCLUDED THE REGISTRATION OF THE ERED ADDRESS OF SUCH COMPANIES. THERE IS NO MATERIAL ON RECORD PRODUCED BY THE APPELLANTS WHICH COULD REBUT THE DOCUMENTS PRODUCED BY THE RESPONDENTS HEREIN. IN SUCH CIRCUMSTANCES, THE FINDING OF FACT DOCUMENTARY EVIDENCE ON RECORD CANNOT BE SAID TO BE PERVERSE. LEARNED COUNSEL APPEARING FOR THE APPELLANTS WAS UNABLE TO POINT OUT THAT ANY OF SUCH FINDINGS ARRIVED AT BY THE AUTHORITIES BELOW WERE ON THE BASIS OF MISLEADING OF EVIDENCE OR FAILURE TO EXAMI NE ANY MATERIAL DOCUMENTS WHILST COMING TO SUCH CONCLUSIONS. UNDER THE GUISE OF THE SUBSTANTIAL QUESTION OF LAW, THIS COURT IN AN APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT CANNOT REAPPRECIATE THE EVIDENCE TO COME TO ANY CONTRARY EVIDENCE. THAT THE AUTHORITIES HAVE RENDERED THE FINDINGS OF FACTS BASED ON DOCUMENTS WHICH HAVE NOT BEEN DISPUTED, WE FIND THAT THERE ARE NO SUBSTANTIAL COURT RECENTLY IN THE CASE OF PRINCIPAL CIT VS VAISHNODEVI REFOILS & SOLVEX REPORTED IN (2018) 96 TAXMANN.COM 469 (SC) WHEREIN THE SLP OF THE REVENUE HAS BEEN DISMISSED BY THE HONBLE APEX COURT. THE BRIEF F THE ACT WAS MADE BY THE ASSESSING OFFICER IN RESPECT OF CAPITAL CONTRIBUTED BY THE PARTNER OF THE FIRM. THE HONBLE GUJARAT HIGH COURT NOTED THAT WHEN THE CONCERNED PARTNER HAD CONFIRMED IBUTION IN THE FIRM AND THAT THE SAID INVESTMENT IS ALSO REFLECTED IN HIS INDIVIDUAL BOOKS OF ACCOUNTS, THEN NO ADDITION COULD BE MADE U/S 68 OF THE ACT. THE DECISION OF HONBLE GUJARAT HIGH COURT IS REPORTED IN (2018) 89 TAXMANN.COM 80 (GUJ HC) . THE SLP OF THE REVENUE AGAINST THIS JUDGMENT WAS DISMISSED BY THE HONBLE SUPREME COURT. 50. WE MAY GAINFULLY REFER TO THE FOLLOWING DECISIONS OF THE HONBLE HIGH COURT IN (A) IN THE CASE OF PR. CIT VS CHAIN HOUSE INTERNATIONAL (P) LTD [201 8] (98 TAXMANN.COM 47)THE AO HAD ADDED THE SHARE APPLICATION BY WAY OF UNEXPLAINED CASH CREDITS WAS THAT THE ASSESSEE WAS UNABLE TO GIVE ANY JUSTIFIABLE REASON FOR ISSUING SHARES AT A PREMIUM. THE HONBLE MADHYA PRADESH HIGH COURT DID NOT EASONING GIVEN BY THE AO FOR MAKING ADDITION U/S 68, HOLDING AS ISSUING THE SHARE AT A PREMIUM WAS A COMMERCIAL DECISION. IT IS THE PREROGATIVE OF THE BOARD OF DIRECTORS OF A COMPANY TO DECIDE THE PREMIUM AMOUNT AND IT IS THE R WHETHER THEY WANT TO SUBSCRIBE THE SHARES AT SUCH A PREMIUM OR NOT. THIS WAS A MUTUAL DECISION BETWEEN BOTH THE COMPANIES. IN DAY TO DAY MARKET, UNLESS AND UNTIL, THE RATES IS FIXED BY ANY GOVT. AUTHORITY OR UNLESS THERE IS ANY RESTRICTION ON THE AMOUNT THE SHARES IS DECIDED ON THE MUTUAL UNDERSTANDING OF THE PARTIES CONCERNED. [PARA 52] ONCE THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF INVESTORS ARE ESTABLISHED, THE REVENUE SHOULD NOT JUSTIFIABLY CLAIM BUSINESSMAN OR IN THE POSITION OF THE BOARD OF DIRECTORS AND ASSUME THE ROLE OF ASCERTAINING HOW MUCH IS A REASONABLE PREMIUM HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE. [PARA 53] THERE IS NO DISPUTE ABOUT THE RECEI ANY DISPUTE ABOUT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE INVESTORS AND, THEREFORE, THE SAME HAS BEEN ESTABLISHED BEYOND ANY DOUBT AND THERE SHOULD NOT HAVE BEEN ANY QUESTION OR DISPUTE ABOUT P THEREFORE, UNLESS THERE IS A LIMITATION PUT BY THE LAW ON THE AMOUNT OF PREMIUM, THE TRANSACTION SHOULD NOT BE QUESTIONED MERELY BECAUSE THE ASSESSING AUTHORITY THINKS THAT THE INVESTOR COULD HAVE MANAGED BY PAYING A LESSER AM AS A PRUDENT BUSINESSMAN. THE TEST OF PRUDENCE BY SUBSTITUTING ITS OWN VIEW IN PLACE OF THE BUSINESSMAN'S HAS NOT BEEN APPROVED BY THE SUPREME COURT. [PARA 54] (B) IN THE CASE OF CIT V. GAGANDEEP INFRASTRUCTURE (P.) LTD. [2017] 80 272/247 TAXMAN 245/394 ITR 680 THE REVENUE CONTENDED THAT THE FACT THAT THE SHARES WERE ISSUED AT HIGH PREMIUM RAISED SUSPICION ON THE GENUINENESS OF THE TRANSACTIONS. WHILE DISMISSING THIS PLEA RAISED BY THE REVENUE, THE HONBLE BOMBAY HIGH CO URT HELD AS UNDER: (E) WE FIND THAT THE PROVISO TO SECTION 68 OF THE ACT HAS BEEN INTRODUCED BY THE FINANCE ACT 2012 WITH EFFECT FROM 1ST APRIL, 2013. THUS IT WOULD BE EFFECTIVE ONLY FROM THE ASSESSMENT YEAR 2013 YEAR. IN FACT, BEFORE THE TRIBUNAL, IT WAS NOT EVEN THE CASE OF THE REVENUE THAT SECTION 68 OF THE ACT AS IN FORCE DURING THE SUBJECT YEARS HAS TO BE READ/UNDERSTOOD AS THOUGH THE PROVISO ADDED SUBSEQUENTLY EFFECTIVE ONLY FROM 1ST APRIL, 2013 WAS ITS NORMAL MEANING. THE PARLIAMENT DID NOT INTRODUCE TO PROVISO TO SECTION 68 OF THE ACT WITH RETROSPECTIVE EFFECT NOR DOES THE PROVISO SO INTRODUCED STATES THAT IT WAS INTRODUCED 'FOR REMOVAL OF DOUBTS' OR THAT IT IS 'DECLARATORY'. THEREFORE IT IS NOT OPEN TO GIVE IT RETROSPECTIVE EFFECT, BY PROCEEDING ON THE BASIS THAT THE ADDITION OF THE PROVISO TO SECTION 68 OF THE ACT IS IMMATERIAL AND DOES NOT CHANGE THE INTERPRETATION OF SECTION 68 OF THE ACT BOTH BEFORE AND AFTER THE ADDING OF THE PROVISO. IN ANY VIEW O PROVISO SECTION 68 OF THE ACT LAID DOWN BY THE COURTS NAMELY THE GENUINENESS OF THE TRANSACTION, IDENTITY AND THE CAPACITY OF THE INVESTOR HAVE ALL BEEN EXAMINED BY THE IMPUGNED ORDER OF THE T SUBMISSION ON BEHALF OF THE REVENUE THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIVES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAREHOLDERS I.E. THEY ARE BOGUS. THE APEX COURT IN LOVEL AMENDED SECTION 68 OF THE ACT HAS HELD THAT WHERE THE REVENUE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM BOGUS SHAREHOLDERS THEN IT IS FOR THE INCOME TAX OFFICER TO PROCEED B SHAREHOLDERS AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW. IT DOES NOT ENTITLE THE REVENUE TO ADD THE SAME TO THE ASSESSEE'S INCOME AS UNEXPLAINED CASH CREDIT. (F) IN THE ABOVE CIRCUMSTANCES AND PARTICULARLY IN VIEW FACT ARRIVED AT BY THE CIT(A) AND THE TRIBUNAL, THE PROPOSED QUESTION OF LAW DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THUS NOT ENTERTAINED. 5 THERE IS ANY RESTRICTION ON THE AMOUNT OF SHARE PREMIUM UNDER ANY LAW, THE PRICE OF THE SHARES IS DECIDED ON THE MUTUAL UNDERSTANDING OF THE PARTIES CONCERNED. [PARA ONCE THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF INVESTORS ARE ESTABLISHED, THE REVENUE SHOULD NOT JUSTIFIABLY CLAIM TO PUT ITSELF IN THE ARMCHAIR OF A BUSINESSMAN OR IN THE POSITION OF THE BOARD OF DIRECTORS AND ASSUME THE ROLE OF ASCERTAINING HOW MUCH IS A REASONABLE PREMIUM HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE. [PARA 53] THERE IS NO DISPUTE ABOUT THE RECEI PT OF FUNDS THROUGH BANKING CHANNEL NOR THERE IS ANY DISPUTE ABOUT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE INVESTORS AND, THEREFORE, THE SAME HAS BEEN ESTABLISHED BEYOND ANY DOUBT AND THERE SHOULD NOT HAVE BEEN ANY QUESTION OR DISPUTE ABOUT P REMIUM PAID BY THE INVESTORS; THEREFORE, UNLESS THERE IS A LIMITATION PUT BY THE LAW ON THE AMOUNT OF PREMIUM, THE TRANSACTION SHOULD NOT BE QUESTIONED MERELY BECAUSE THE ASSESSING AUTHORITY THINKS THAT THE INVESTOR COULD HAVE MANAGED BY PAYING A LESSER AM OUNT AS SHARE PREMIUM AS A PRUDENT BUSINESSMAN. THE TEST OF PRUDENCE BY SUBSTITUTING ITS OWN VIEW IN PLACE OF THE BUSINESSMAN'S HAS NOT BEEN APPROVED BY THE SUPREME COURT. [PARA 54] (B) IN THE CASE OF CIT V. GAGANDEEP INFRASTRUCTURE (P.) LTD. [2017] 80 TAXMANN.COM 272/247 TAXMAN 245/394 ITR 680 THE REVENUE CONTENDED THAT THE FACT THAT THE SHARES WERE ISSUED AT HIGH PREMIUM RAISED SUSPICION ON THE GENUINENESS OF THE TRANSACTIONS. WHILE DISMISSING THIS PLEA RAISED BY THE REVENUE, THE HONBLE BOMBAY URT HELD AS UNDER: (E) WE FIND THAT THE PROVISO TO SECTION 68 OF THE ACT HAS BEEN INTRODUCED BY THE FINANCE ACT 2012 WITH EFFECT FROM 1ST APRIL, 2013. THUS IT WOULD BE EFFECTIVE ONLY FROM THE ASSESSMENT YEAR 2013 - 14 ONWARDS AND NOT FOR THE SUBJECT ASSESS YEAR. IN FACT, BEFORE THE TRIBUNAL, IT WAS NOT EVEN THE CASE OF THE REVENUE THAT SECTION 68 OF THE ACT AS IN FORCE DURING THE SUBJECT YEARS HAS TO BE READ/UNDERSTOOD AS THOUGH THE PROVISO ADDED SUBSEQUENTLY EFFECTIVE ONLY FROM 1ST APRIL, 2013 WAS ITS NORMAL MEANING. THE PARLIAMENT DID NOT INTRODUCE TO PROVISO TO SECTION 68 OF THE ACT WITH RETROSPECTIVE EFFECT NOR DOES THE PROVISO SO INTRODUCED STATES THAT IT WAS INTRODUCED 'FOR REMOVAL OF DOUBTS' OR THAT IT IS 'DECLARATORY'. THEREFORE IT IS NOT GIVE IT RETROSPECTIVE EFFECT, BY PROCEEDING ON THE BASIS THAT THE ADDITION OF THE PROVISO TO SECTION 68 OF THE ACT IS IMMATERIAL AND DOES NOT CHANGE THE INTERPRETATION OF SECTION 68 OF THE ACT BOTH BEFORE AND AFTER THE ADDING OF THE PROVISO. IN ANY VIEW O F THE MATTER THE THREE ESSENTIAL TESTS WHILE CONFIRMING THE PRE PROVISO SECTION 68 OF THE ACT LAID DOWN BY THE COURTS NAMELY THE GENUINENESS OF THE TRANSACTION, IDENTITY AND THE CAPACITY OF THE INVESTOR HAVE ALL BEEN EXAMINED BY THE IMPUGNED ORDER OF THE T RIBUNAL AND ON FACTS IT WAS FOUND SATISFIED. FURTHER IT WAS A SUBMISSION ON BEHALF OF THE REVENUE THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIVES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAREHOLDERS I.E. THEY ARE BOGUS. THE APEX COURT IN LOVEL Y EXPORTS (P.) LTD.(SUPRA) IN THE CONTEXT TO THE PRE AMENDED SECTION 68 OF THE ACT HAS HELD THAT WHERE THE REVENUE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM BOGUS SHAREHOLDERS THEN IT IS FOR THE INCOME TAX OFFICER TO PROCEED B Y REOPENING THE ASSESSMENT OF SUCH SHAREHOLDERS AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW. IT DOES NOT ENTITLE THE REVENUE TO ADD THE SAME TO THE ASSESSEE'S INCOME AS UNEXPLAINED CASH CREDIT. (F) IN THE ABOVE CIRCUMSTANCES AND PARTICULARLY IN VIEW OF THE CONCURRENT FINDING OF FACT ARRIVED AT BY THE CIT(A) AND THE TRIBUNAL, THE PROPOSED QUESTION OF LAW DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THUS NOT ENTERTAINED. I.T.A. NO. 2390/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. SHREENATH HOLDING PVT. LTD OF SHARE PREMIUM UNDER ANY LAW, THE PRICE OF THE SHARES IS DECIDED ON THE MUTUAL UNDERSTANDING OF THE PARTIES CONCERNED. [PARA ONCE THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF INVESTORS ARE ESTABLISHED, TO PUT ITSELF IN THE ARMCHAIR OF A BUSINESSMAN OR IN THE POSITION OF THE BOARD OF DIRECTORS AND ASSUME THE ROLE OF ASCERTAINING HOW MUCH IS A REASONABLE PREMIUM HAVING REGARD TO THE PT OF FUNDS THROUGH BANKING CHANNEL NOR THERE IS ANY DISPUTE ABOUT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE INVESTORS AND, THEREFORE, THE SAME HAS BEEN ESTABLISHED BEYOND ANY DOUBT AND THERE SHOULD REMIUM PAID BY THE INVESTORS; THEREFORE, UNLESS THERE IS A LIMITATION PUT BY THE LAW ON THE AMOUNT OF PREMIUM, THE TRANSACTION SHOULD NOT BE QUESTIONED MERELY BECAUSE THE ASSESSING AUTHORITY THINKS OUNT AS SHARE PREMIUM AS A PRUDENT BUSINESSMAN. THE TEST OF PRUDENCE BY SUBSTITUTING ITS OWN VIEW IN PLACE OF THE BUSINESSMAN'S HAS NOT BEEN APPROVED BY THE SUPREME COURT. [PARA 54] TAXMANN.COM 272/247 TAXMAN 245/394 ITR 680 THE REVENUE CONTENDED THAT THE FACT THAT THE SHARES WERE ISSUED AT HIGH PREMIUM RAISED SUSPICION ON THE GENUINENESS OF THE TRANSACTIONS. WHILE DISMISSING THIS PLEA RAISED BY THE REVENUE, THE HONBLE BOMBAY (E) WE FIND THAT THE PROVISO TO SECTION 68 OF THE ACT HAS BEEN INTRODUCED BY THE FINANCE ACT 2012 WITH EFFECT FROM 1ST APRIL, 2013. THUS IT WOULD BE EFFECTIVE ONLY 14 ONWARDS AND NOT FOR THE SUBJECT ASSESS MENT YEAR. IN FACT, BEFORE THE TRIBUNAL, IT WAS NOT EVEN THE CASE OF THE REVENUE THAT SECTION 68 OF THE ACT AS IN FORCE DURING THE SUBJECT YEARS HAS TO BE READ/UNDERSTOOD AS THOUGH THE PROVISO ADDED SUBSEQUENTLY EFFECTIVE ONLY FROM 1ST APRIL, 2013 WAS ITS NORMAL MEANING. THE PARLIAMENT DID NOT INTRODUCE TO PROVISO TO SECTION 68 OF THE ACT WITH RETROSPECTIVE EFFECT NOR DOES THE PROVISO SO INTRODUCED STATES THAT IT WAS INTRODUCED 'FOR REMOVAL OF DOUBTS' OR THAT IT IS 'DECLARATORY'. THEREFORE IT IS NOT GIVE IT RETROSPECTIVE EFFECT, BY PROCEEDING ON THE BASIS THAT THE ADDITION OF THE PROVISO TO SECTION 68 OF THE ACT IS IMMATERIAL AND DOES NOT CHANGE THE INTERPRETATION OF SECTION 68 OF THE ACT BOTH BEFORE AND AFTER THE ADDING OF THE F THE MATTER THE THREE ESSENTIAL TESTS WHILE CONFIRMING THE PRE - PROVISO SECTION 68 OF THE ACT LAID DOWN BY THE COURTS NAMELY THE GENUINENESS OF THE TRANSACTION, IDENTITY AND THE CAPACITY OF THE INVESTOR HAVE ALL BEEN EXAMINED BY THE RIBUNAL AND ON FACTS IT WAS FOUND SATISFIED. FURTHER IT WAS A SUBMISSION ON BEHALF OF THE REVENUE THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIVES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAREHOLDERS I.E. THEY ARE Y EXPORTS (P.) LTD.(SUPRA) IN THE CONTEXT TO THE PRE - AMENDED SECTION 68 OF THE ACT HAS HELD THAT WHERE THE REVENUE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM BOGUS SHAREHOLDERS Y REOPENING THE ASSESSMENT OF SUCH SHAREHOLDERS AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW. IT DOES NOT ENTITLE THE REVENUE TO ADD THE SAME TO THE ASSESSEE'S INCOME AS UNEXPLAINED CASH CREDIT. OF THE CONCURRENT FINDING OF FACT ARRIVED AT BY THE CIT(A) AND THE TRIBUNAL, THE PROPOSED QUESTION OF LAW DOES (C) IN CIT VS ANSHIKA CONSULTANTS PVT LTD (62 TAXMANN.COM 192), THE AO THE SHARE APPLICATION MONIES TREATING IT TO BE THEIR UNACCOUNTED MONIES ROUTED THOUGH ACCOMMODATION ENTRIES SINCE THE SHARES WERE ISSUED AT A HIGH PREMIUM. THE HONBLE DELHI HIGH COURT DID NOT AGREE WITH THIS CONTENTION PUT FORTH BY THE REVENUE, BY OBSERVING AS UNDER: WHETHER THE ASSESSEE BEEN THE SUBJECT MATTER OF THE ENQUIRY IN THE FIRST INSTANCE. INSTEAD, THE ISSUE WAS WHETHER THE AMOUNT INVESTED BY THE SHARE APPLICANTS WERE FROM THE OBJECTIVE OF SECTION 68 IS TO AVOID INCLUSION OF AMOUNT WHICH ARE SUSPECT. THEREFORE, THE EMPHASIS ON GENUINENESS OF ALL THE THREE ASPECTS, IDENTITY, CREDITWORTHINESS AND THE TRANSACTION. WHAT IS DISQUIETING IN THE PRESENT CASE IS W HEN THE ASSESSMENT WAS COMPLETED, THE INVESTIGATION REPORT WHICH WAS SPECIFICALLY CALLED FROM THE CONCERNED DEPARTMENT WAS AVAILABLE BUT NOT DISCUSSED BY THE ASSESSING OFFICER. HAD HE CARED TO DO SO, THE IDENTITY OF THE INVESTORS, THE GENUINENESS OF THE TR WOULD HAVE BEEN APPARENT. EVEN OTHERWISE, THE SHARE APPLICANTS' PARTICULARS WERE AVAILABLE WITH THE ASSESSING OFFICER IN THE FORM OF BALANCE SHEETS INCOME RETURNS, PAN DETAILS ETC. WHILE ARRIVI OFFICER DID NOT CONSIDER IT WORTHWHILE TO MAKE ANY FURTHER ENQUIRY BUT BASED HIS ORDER ON THE HIGH NATURE OF THE PREMIUM AND CERTAIN FEATURES WHICH APPEARED TO BE SUSPECT, TO DETERMINE THAT THE AMOUNT HAD BEE TO THE SHARE APPLICANTS' ACCOUNT. AS HELD CONCURRENTLY BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL, THESE CONCLUSIONS WERE CLEARLY BASELESS AND FALSE. THIS COURT IS CONSTRAINED TO OBSERVE THAT THE ASSESSING OFFICER U WITH HIS DUTY CONSIDERS ALL THE MATERIALS ON RECORD, IGNORING SPECIFICALLY THE MOST CRUCIAL DOCUMENTS. 51. WE ALSO RELY ON THE FOLLOWING JUDGMENTS OF THE COORDINATE BENCH OF ITAT KOLKATA, WHERE BASED ON SAME FACTS, AND IDENTICAL A COORDINATE BENCH DELETED THE ADDITION: (1) M/S JAGANNATH BANWARILAL TEXOFABS PVT LTD, IN ITA NO. 1762/KOL/2016, FOR A.Y. 2012- 13, ORDER DATED 26.10.2018. (2) M/S WIZ- TECH SOLUTIONS PVT LTD, IN ITA NO.1162/KOL/2015,FOR A.Y. 2012 ORDER DATED 14.06.2018. 52. TO CONCLUDE, SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPLAIN THE NATURE AND SOURCE SHALL BE ASSESSED AS ITS UNDISCLOSED INCOME. IN THE FACTS OF THE & SOURCE OF THE SHARE APPLICATION RECEIVED WAS FULLY EXPLAINED BY THE ASSESSEE. WE NOTE THAT THE SHARE APPLICATION MONEY AND SHARE PREMIUM MONEY WHICH WERE RECEIVED BY THE ASSESSEE COMPANY FROM THE TWO SHARE APPLICANT COMPANI PRISM VINTRADE PRIVATE LIMITED, AND M/S. GANNET THE PERIOD DECEMBER, 2012 TO MARCH, 2013 HAD ALREADY BEEN SUFFERED DISALLOWANCE UNDER SECTION 68 OF THE ACT. AS THESE TWO SHARE APPLICANT COMPANIES INVESTED THE S AME MONEY IN THE ASSESSEE COMPANY, THEREFORE, NO FURTHER DISALLOWANCE IS WARRANTED IN THE HANDS OF THE ASSESSEE COMPANY. ONCE TAXED INCOME CANNOT BE TAXED AGAIN. IN THE CASE OF THIRD COMPANY, M/S HAVEN VINCOM PVT. LTD, THE ASSESSMENT, PERTAINING TO THE A HAVEN VINCOM PVT. LTD HAS RAISED SHARE CAPITAL AND SHARE PREMIUM WHICH HAS NOT BEEN TREATED BY THE DEPARTMENT AS CASH CREDIT UNDER SECTION 68 OF THE ACT AND HAS NOT BEEN DISALLOWED BY THE ASSESSING 6 (C) IN CIT VS ANSHIKA CONSULTANTS PVT LTD (62 TAXMANN.COM 192), THE AO THE SHARE APPLICATION MONIES TREATING IT TO BE THEIR UNACCOUNTED MONIES ROUTED THOUGH ACCOMMODATION ENTRIES SINCE THE SHARES WERE ISSUED AT A HIGH PREMIUM. THE HONBLE DELHI HIGH COURT DID NOT AGREE WITH THIS CONTENTION PUT FORTH BY THE BY OBSERVING AS UNDER: WHETHER THE ASSESSEE - COMPANY CHARGED A HIGHER PREMIUM OR NOT, SHOULD NOT HAVE BEEN THE SUBJECT MATTER OF THE ENQUIRY IN THE FIRST INSTANCE. INSTEAD, THE ISSUE WAS WHETHER THE AMOUNT INVESTED BY THE SHARE APPLICANTS WERE FROM LEGITIMATE SOURCES. THE OBJECTIVE OF SECTION 68 IS TO AVOID INCLUSION OF AMOUNT WHICH ARE SUSPECT. THEREFORE, THE EMPHASIS ON GENUINENESS OF ALL THE THREE ASPECTS, IDENTITY, CREDITWORTHINESS AND THE TRANSACTION. WHAT IS DISQUIETING IN THE PRESENT CASE IS HEN THE ASSESSMENT WAS COMPLETED, THE INVESTIGATION REPORT WHICH WAS SPECIFICALLY CALLED FROM THE CONCERNED DEPARTMENT WAS AVAILABLE BUT NOT DISCUSSED BY THE ASSESSING OFFICER. HAD HE CARED TO DO SO, THE IDENTITY OF THE INVESTORS, THE GENUINENESS OF THE TR ANSACTION AND THE CREDITWORTHINESS OF THE SHARE APPLICANTS WOULD HAVE BEEN APPARENT. EVEN OTHERWISE, THE SHARE APPLICANTS' PARTICULARS WERE AVAILABLE WITH THE ASSESSING OFFICER IN THE FORM OF BALANCE SHEETS INCOME RETURNS, PAN DETAILS ETC. WHILE ARRIVI NG AT THE CONCLUSION THAT HE DID, THE ASSESSING OFFICER DID NOT CONSIDER IT WORTHWHILE TO MAKE ANY FURTHER ENQUIRY BUT BASED HIS ORDER ON THE HIGH NATURE OF THE PREMIUM AND CERTAIN FEATURES WHICH APPEARED TO BE SUSPECT, TO DETERMINE THAT THE AMOUNT HAD BEE N ROUTED FROM THE ASSESSEE'S ACCOUNT TO THE SHARE APPLICANTS' ACCOUNT. AS HELD CONCURRENTLY BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL, THESE CONCLUSIONS WERE CLEARLY BASELESS AND FALSE. THIS COURT IS CONSTRAINED TO OBSERVE THAT THE ASSESSING OFFICER U TTERLY FAILED TO COMPLY WITH HIS DUTY CONSIDERS ALL THE MATERIALS ON RECORD, IGNORING SPECIFICALLY THE MOST CRUCIAL DOCUMENTS. 51. WE ALSO RELY ON THE FOLLOWING JUDGMENTS OF THE COORDINATE BENCH OF ITAT KOLKATA, WHERE BASED ON SAME FACTS, AND IDENTICAL A ND COMMON GROUNDS AND COORDINATE BENCH DELETED THE ADDITION: (1) M/S JAGANNATH BANWARILAL TEXOFABS PVT LTD, IN ITA NO. 1762/KOL/2016, FOR A.Y. 13, ORDER DATED 26.10.2018. TECH SOLUTIONS PVT LTD, IN ITA NO.1162/KOL/2015,FOR A.Y. 2012 ORDER DATED 14.06.2018. 52. TO CONCLUDE, SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPLAIN THE NATURE AND SOURCE SHALL BE ASSESSED AS ITS UNDISCLOSED INCOME. IN THE FACTS OF THE PRESENT CASE, BOTH THE NATURE & SOURCE OF THE SHARE APPLICATION RECEIVED WAS FULLY EXPLAINED BY THE ASSESSEE. WE NOTE THAT THE SHARE APPLICATION MONEY AND SHARE PREMIUM MONEY WHICH WERE RECEIVED BY THE ASSESSEE COMPANY FROM THE TWO SHARE APPLICANT COMPANI PRISM VINTRADE PRIVATE LIMITED, AND M/S. GANNET - VINTRADE PRIVATE LIMITED, DURING THE PERIOD DECEMBER, 2012 TO MARCH, 2013 HAD ALREADY BEEN SUFFERED DISALLOWANCE UNDER SECTION 68 OF THE ACT. AS THESE TWO SHARE APPLICANT COMPANIES INVESTED THE AME MONEY IN THE ASSESSEE COMPANY, THEREFORE, NO FURTHER DISALLOWANCE IS WARRANTED IN THE HANDS OF THE ASSESSEE COMPANY. ONCE TAXED INCOME CANNOT BE IN THE CASE OF THIRD COMPANY, M/S HAVEN VINCOM PVT. LTD, THE ASSESSMENT, PERTAINING TO THE A Y. 2010- 11 WAS NOT REVISED BY THE DEPARTMENT. THAT IS, M/S HAVEN VINCOM PVT. LTD HAS RAISED SHARE CAPITAL AND SHARE PREMIUM WHICH HAS NOT BEEN TREATED BY THE DEPARTMENT AS CASH CREDIT UNDER SECTION 68 OF THE ACT AND HAS NOT BEEN DISALLOWED BY THE ASSESSING OFFICER IN THE ASSESSMENT OF M/S HAVEN VINCOM I.T.A. NO. 2390/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. SHREENATH HOLDING PVT. LTD (C) IN CIT VS ANSHIKA CONSULTANTS PVT LTD (62 TAXMANN.COM 192), THE AO HAD ADDED THE SHARE APPLICATION MONIES TREATING IT TO BE THEIR UNACCOUNTED MONIES ROUTED THOUGH ACCOMMODATION ENTRIES SINCE THE SHARES WERE ISSUED AT A HIGH PREMIUM. THE HONBLE DELHI HIGH COURT DID NOT AGREE WITH THIS CONTENTION PUT FORTH BY THE COMPANY CHARGED A HIGHER PREMIUM OR NOT, SHOULD NOT HAVE BEEN THE SUBJECT MATTER OF THE ENQUIRY IN THE FIRST INSTANCE. INSTEAD, THE ISSUE WAS LEGITIMATE SOURCES. THE OBJECTIVE OF SECTION 68 IS TO AVOID INCLUSION OF AMOUNT WHICH ARE SUSPECT. THEREFORE, THE EMPHASIS ON GENUINENESS OF ALL THE THREE ASPECTS, IDENTITY, CREDITWORTHINESS AND THE TRANSACTION. WHAT IS DISQUIETING IN THE PRESENT CASE IS HEN THE ASSESSMENT WAS COMPLETED, THE INVESTIGATION REPORT WHICH WAS SPECIFICALLY CALLED FROM THE CONCERNED DEPARTMENT WAS AVAILABLE BUT NOT DISCUSSED BY THE ASSESSING OFFICER. HAD HE CARED TO DO SO, THE IDENTITY OF THE INVESTORS, THE ANSACTION AND THE CREDITWORTHINESS OF THE SHARE APPLICANTS WOULD HAVE BEEN APPARENT. EVEN OTHERWISE, THE SHARE APPLICANTS' PARTICULARS WERE AVAILABLE WITH THE ASSESSING OFFICER IN THE FORM OF BALANCE SHEETS INCOME -TAX NG AT THE CONCLUSION THAT HE DID, THE ASSESSING OFFICER DID NOT CONSIDER IT WORTHWHILE TO MAKE ANY FURTHER ENQUIRY BUT BASED HIS ORDER ON THE HIGH NATURE OF THE PREMIUM AND CERTAIN FEATURES WHICH APPEARED TO BE N ROUTED FROM THE ASSESSEE'S ACCOUNT TO THE SHARE APPLICANTS' ACCOUNT. AS HELD CONCURRENTLY BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL, THESE CONCLUSIONS WERE CLEARLY BASELESS AND FALSE. THIS TTERLY FAILED TO COMPLY WITH HIS DUTY CONSIDERS ALL THE MATERIALS ON RECORD, IGNORING SPECIFICALLY THE MOST 51. WE ALSO RELY ON THE FOLLOWING JUDGMENTS OF THE COORDINATE BENCH OF ITAT ND COMMON GROUNDS AND (1) M/S JAGANNATH BANWARILAL TEXOFABS PVT LTD, IN ITA NO. 1762/KOL/2016, FOR A.Y. TECH SOLUTIONS PVT LTD, IN ITA NO.1162/KOL/2015,FOR A.Y. 2012 -13, 52. TO CONCLUDE, SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPLAIN THE NATURE AND SOURCE SHALL BE PRESENT CASE, BOTH THE NATURE & SOURCE OF THE SHARE APPLICATION RECEIVED WAS FULLY EXPLAINED BY THE ASSESSEE. WE NOTE THAT THE SHARE APPLICATION MONEY AND SHARE PREMIUM MONEY WHICH WERE RECEIVED BY THE ASSESSEE COMPANY FROM THE TWO SHARE APPLICANT COMPANI ES VIZ: M/S. VINTRADE PRIVATE LIMITED, DURING THE PERIOD DECEMBER, 2012 TO MARCH, 2013 HAD ALREADY BEEN SUFFERED DISALLOWANCE UNDER SECTION 68 OF THE ACT. AS THESE TWO SHARE APPLICANT COMPANIES INVESTED THE AME MONEY IN THE ASSESSEE COMPANY, THEREFORE, NO FURTHER DISALLOWANCE IS WARRANTED IN THE HANDS OF THE ASSESSEE COMPANY. ONCE TAXED INCOME CANNOT BE IN THE CASE OF THIRD COMPANY, M/S HAVEN VINCOM PVT. LTD, THE ASSESSMENT, 11 WAS NOT REVISED BY THE DEPARTMENT. THAT IS, M/S HAVEN VINCOM PVT. LTD HAS RAISED SHARE CAPITAL AND SHARE PREMIUM WHICH HAS NOT BEEN TREATED BY THE DEPARTMENT AS CASH CREDIT UNDER SECTION 68 OF THE ACT AND HAS OFFICER IN THE ASSESSMENT OF M/S HAVEN VINCOM PVT. LTD ( VIDE ASSESSMENT ORDER VINCOM PVT. LTD HAS UTILIZED THE SAME MONEY ( WHICH IT RECEIVED BY RAISING SHARE CAPITAL/PREMIUM AND NOT DISALLOWED BY AO, U/S 68) T AND SHARE PREMIUM IN THE ASSESSEE COMPANY (M/S C.P. RE ROLLERS LTD) THEREFORE IT SHOULD NOT BE DISALLOWED UNDER SECTION 68 OF THE ACT, IN THE HANDS OF THE ASSESSEE COMPANY, AS THE DEPARTMENT ITSELF ACCEPTED GENUINE MONEY IN THE HAVEN VINCOM PVT. LTD. HENCE, IN THE CASE OF M/S HAVEN VINCOM PVT. LTD, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS HAVE BEEN PROVED BEYOND DOUBT. IN CASE OF SUSHMA CHAWALA FOR SHARE APPLICATION OF RS.4,22,500/ RS.4,22,500/- , THE LD COUNSEL EXPLAINED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS THEREFORE NO DISALLOWANCE CAN BE MADE. BESIDES, THE ASSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE THESE THREE SHARE APPLI 1) RETURN OF ROC, THAT IS, FORM NO. 2 SUBMITTED BEFORE R.O.C. 2) PAN NUMBER COPIES OF EACH SHARE SUBSCRIBER. 3) COPY OF BALANCE SHEET, PROFIT AND LOSS ACCOUNT OF ALL SHARE APPLICANT COMPANIES. 4) DETAILS OF INVESTMENTS SOLD BY ALL SHARE APPLICANT COMPANIES. 5).TRANSACTION WITH THE ASSESSEE WAS DULY HIGHLIGHTED IN THE BANK STATEMENT 6). EXPLANATION ALONG WITH EVIDENCE OF SOURCE OF SOURCE OF THE FUNDS OF THE SHARE APPLICANT COMPANIES. 7). AUDI TED ACCOUNTS OF THE SHARE HOLDERS. 8) RELEVANT ADDRESS PROOFS / FORM FILED BY THE SHARE APPLICANTS WITH ROC. 9). INCOME TAX RETURN OF SHARE APPLICANT COMPANIES. 10) COPY OF THE BANK STATEMENT OF SHARE APPLICANT COMPANIES WHERE FROM THE AMOUNT WAS DEBITE THE SHARE APPLICATION MONEY AND PREMIUM WERE CREDITED. 12). CHEQUE NUMBER, THE AMOUNTS SUBSCRIBED BY SHAREHOLDERS ALONG WITH THE NAME OF BANK ITS BRANCH ADDRESS AND THE NUMBER OF SHARES ALLOTTE VALUE ON THE DATE OF ALLOTMENT. 13) COMMON DIRECTOR OF THE SHARE APPLICANT COMPANIES ( WHO IS DIRECTOR IN ASSESSEE COMPANY AS WELL AS SHARE APPLICANT COMPANIES) APPEARED BEFORE THE ASSESSING OFFICER IN RESPONSE TO NOTICE U/S 131 OF THE DOCUMENTS AND EVIDENCES BEFORE THE AO. THUS, ALL ABOVE DOCUMENTS THAT IS, THE PAN DETAILS, BANK ACCOUNT STATEMENTS, AUDITED FINANCIAL STATEMENTS, BALANCE SHEET, PROFIT AND LOSS ACCOUNT, INCOME TAX ACKNOWLEDGMENTS, AND ROC STATEMENTS ETC WERE PLACED ON AO'S RECORD. ONE OF THE DIRECTORS OF SHARE SUMMON U/S131 OF THE ACT AND EXPLAINED THE GENUINENESS OF THREE SHARE APPLICANTS. THEREFORE, CONSIDERING THIS FACTUAL POSITION AND PRECEDENTS RELIED ON THE SUBJECT, AS NOTED ABOVE, WE DELETE THE ADD TO THE TUNE OF RS.17,49,95,000/ 53. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 10. APPLYING THE PROPOSITION OF LAW LAID DOWN IN THE ABOVE REFERRED CASES TO THE FACTS OF THIS CASE AND KEEPING IN VIEW THE FACT FOR THE SHARE APPLICANT COMPANY HAVE BEEN ASSESSED TO TAX U/S 143(3) OF THE ACT AND THE SOURCE OF MONEY IN QUESTION WAS BROUGHT TO THAT NO ADDITIONS CAN BE MADE IN THE CASE OF THE ASSESSEE COMPANY. 7 PVT. LTD ( VIDE ASSESSMENT ORDER - PAPER BOOK PG.173) . WE NOTE THAT M/S HAVEN VINCOM PVT. LTD HAS UTILIZED THE SAME MONEY ( WHICH IT RECEIVED BY RAISING SHARE CAPITAL/PREMIUM AND NOT DISALLOWED BY AO, U/S 68) T O PURCHASE THE SHARE CAPITAL AND SHARE PREMIUM IN THE ASSESSEE COMPANY (M/S C.P. RE ROLLERS LTD) THEREFORE IT SHOULD NOT BE DISALLOWED UNDER SECTION 68 OF THE ACT, IN THE HANDS OF THE ASSESSEE COMPANY, AS THE DEPARTMENT ITSELF ACCEPTED GENUINE MONEY IN THE HANDS OF M/S HAVEN VINCOM PVT. LTD. HENCE, IN THE CASE OF M/S HAVEN VINCOM PVT. LTD, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS HAVE BEEN PROVED BEYOND DOUBT. IN CASE OF SUSHMA CHAWALA FOR SHARE APPLICATION OF RS.4,22,500/ - AND SHARE PREMIUM OF RS. , THE LD COUNSEL EXPLAINED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS THEREFORE NO DISALLOWANCE CAN BE MADE. BESIDES, THE ASSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE THESE THREE SHARE APPLI CANTS BY SUBMITTING THE FOLLOWING DOCUMENTS AND EVIDENCES: 1) RETURN OF ROC, THAT IS, FORM NO. 2 SUBMITTED BEFORE R.O.C. 2) PAN NUMBER COPIES OF EACH SHARE SUBSCRIBER. 3) COPY OF BALANCE SHEET, PROFIT AND LOSS ACCOUNT OF ALL SHARE APPLICANT COMPANIES. 4) DETAILS OF INVESTMENTS SOLD BY ALL SHARE APPLICANT COMPANIES. 5).TRANSACTION WITH THE ASSESSEE WAS DULY HIGHLIGHTED IN THE BANK STATEMENT 6). EXPLANATION ALONG WITH EVIDENCE OF SOURCE OF SOURCE OF THE FUNDS OF THE SHARE APPLICANT COMPANIES. TED ACCOUNTS OF THE SHARE HOLDERS. 8) RELEVANT ADDRESS PROOFS / FORM FILED BY THE SHARE APPLICANTS WITH ROC. 9). INCOME TAX RETURN OF SHARE APPLICANT COMPANIES. 10) COPY OF THE BANK STATEMENT OF SHARE APPLICANT COMPANIES WHERE FROM THE AMOUNT WAS DEBITE D. 11) COPIES OF BANK STATEMENT OF THE ASSESSEE COMPANY WHERE THE SHARE APPLICATION MONEY AND PREMIUM WERE CREDITED. 12). CHEQUE NUMBER, THE AMOUNTS SUBSCRIBED BY SHAREHOLDERS ALONG WITH THE NAME OF BANK ITS BRANCH ADDRESS AND THE NUMBER OF SHARES ALLOTTE D TO THEM WITH FACE VALUE ON THE DATE OF ALLOTMENT. 13) COMMON DIRECTOR OF THE SHARE APPLICANT COMPANIES ( WHO IS DIRECTOR IN ASSESSEE COMPANY AS WELL AS SHARE APPLICANT COMPANIES) APPEARED BEFORE THE ASSESSING OFFICER IN RESPONSE TO NOTICE U/S 131 OF THE INCOME TAX ACT AND SUBMITTED DOCUMENTS AND EVIDENCES BEFORE THE AO. THUS, ALL ABOVE DOCUMENTS THAT IS, THE PAN DETAILS, BANK ACCOUNT STATEMENTS, AUDITED FINANCIAL STATEMENTS, BALANCE SHEET, PROFIT AND LOSS ACCOUNT, INCOME TAX ACKNOWLEDGMENTS, AND ROC STATEMENTS ETC WERE PLACED ON AO'S RECORD. ONE OF THE DIRECTORS OF SHARE APPLICANT COMPANIES APPEARED BEFORE THE AO IN RESPONSE TO SUMMON U/S131 OF THE ACT AND EXPLAINED THE GENUINENESS OF THREE SHARE APPLICANTS. THEREFORE, CONSIDERING THIS FACTUAL POSITION AND PRECEDENTS RELIED ON THE SUBJECT, AS NOTED ABOVE, WE DELETE THE ADD ITION MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT TO THE TUNE OF RS.17,49,95,000/ - 53. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. APPLYING THE PROPOSITION OF LAW LAID DOWN IN THE ABOVE REFERRED CASES TO THE FACTS OF THIS CASE AND KEEPING IN VIEW THE FACT FOR THE SHARE APPLICANT COMPANY HAVE BEEN ASSESSED TO TAX U/S 143(3) OF THE ACT AND THE SOURCE OF MONEY IN QUESTION WAS BROUGHT TO TAX IN THEIR HANDS, WE UPHOLD THE ORDER OF THE LD. CIT(A) THAT NO ADDITIONS CAN BE MADE IN THE CASE OF THE ASSESSEE COMPANY. I.T.A. NO. 2390/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. SHREENATH HOLDING PVT. LTD PAPER BOOK PG.173) . WE NOTE THAT M/S HAVEN VINCOM PVT. LTD HAS UTILIZED THE SAME MONEY ( WHICH IT RECEIVED BY RAISING SHARE O PURCHASE THE SHARE CAPITAL AND SHARE PREMIUM IN THE ASSESSEE COMPANY (M/S C.P. RE ROLLERS LTD) THEREFORE IT SHOULD NOT BE DISALLOWED UNDER SECTION 68 OF THE ACT, IN THE HANDS OF THE ASSESSEE HANDS OF M/S HAVEN VINCOM PVT. LTD. HENCE, IN THE CASE OF M/S HAVEN VINCOM PVT. LTD, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS HAVE BEEN PROVED BEYOND DOUBT. IN CASE AND SHARE PREMIUM OF RS. , THE LD COUNSEL EXPLAINED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS THEREFORE NO DISALLOWANCE CAN BE MADE. BESIDES, THE ASSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE CANTS BY SUBMITTING THE FOLLOWING DOCUMENTS AND EVIDENCES: 3) COPY OF BALANCE SHEET, PROFIT AND LOSS ACCOUNT OF ALL SHARE APPLICANT COMPANIES. 5).TRANSACTION WITH THE ASSESSEE WAS DULY HIGHLIGHTED IN THE BANK STATEMENT 6). EXPLANATION ALONG WITH EVIDENCE OF SOURCE OF SOURCE OF THE FUNDS OF THE SHARE 8) RELEVANT ADDRESS PROOFS / FORM FILED BY THE SHARE APPLICANTS WITH ROC. 10) COPY OF THE BANK STATEMENT OF SHARE APPLICANT COMPANIES WHERE FROM THE D. 11) COPIES OF BANK STATEMENT OF THE ASSESSEE COMPANY WHERE 12). CHEQUE NUMBER, THE AMOUNTS SUBSCRIBED BY SHAREHOLDERS ALONG WITH THE NAME D TO THEM WITH FACE 13) COMMON DIRECTOR OF THE SHARE APPLICANT COMPANIES ( WHO IS DIRECTOR IN ASSESSEE COMPANY AS WELL AS SHARE APPLICANT COMPANIES) APPEARED BEFORE THE ASSESSING INCOME TAX ACT AND SUBMITTED THUS, ALL ABOVE DOCUMENTS THAT IS, THE PAN DETAILS, BANK ACCOUNT STATEMENTS, AUDITED FINANCIAL STATEMENTS, BALANCE SHEET, PROFIT AND LOSS ACCOUNT, INCOME TAX ACKNOWLEDGMENTS, AND ROC STATEMENTS ETC WERE PLACED ON AO'S RECORD. ONE OF THE APPLICANT COMPANIES APPEARED BEFORE THE AO IN RESPONSE TO SUMMON U/S131 OF THE ACT AND EXPLAINED THE GENUINENESS OF THREE SHARE APPLICANTS. THEREFORE, CONSIDERING THIS FACTUAL POSITION AND PRECEDENTS RELIED ON THE SUBJECT, AS ITION MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT APPLYING THE PROPOSITION OF LAW LAID DOWN IN THE ABOVE REFERRED CASES TO THE FACTS OF THIS CASE AND KEEPING IN VIEW THE FACT FOR THE SHARE APPLICANT COMPANY HAVE BEEN ASSESSED TO TAX U/S 143(3) OF THE ACT AND THE SOURCE OF MONEY IN TAX IN THEIR HANDS, WE UPHOLD THE ORDER OF THE LD. CIT(A) 4. RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE CO TRIBUNAL, WE DELETE THIS ADDITION OF RS.20,00,000/ THIS GROUND OF THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE DATED : 26.02.2020 {SC SPS} C OPY OF THE ORDER FORWARDED TO: 1. M/S. SHREENATH HOLDING PVT. LTD 33/34, RAMLAL MUKHERJEE LANE 2 ND FLOOR ROOM NO. 2D HOWRAH - 711106 2. INCOME TAX OFFICER, WARD- 5(1), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 8 RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE CO - ORDINATE BENCH OF THE TRIBUNAL, WE DELETE THIS ADDITION OF RS.20,00,000/ - MA DE U/S 68 OF THE ACT AND ALLOW IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 26 TH DAY OF FEBRUARY, 2020. SD/- [J. SUDHAKAR REDDY] ACCOUNTANT MEMBER OPY OF THE ORDER FORWARDED TO: M/S. SHREENATH HOLDING PVT. LTD 33/34, RAMLAL MUKHERJEE LANE 5(1), KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES I.T.A. NO. 2390/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. SHREENATH HOLDING PVT. LTD ORDINATE BENCH OF THE DE U/S 68 OF THE ACT AND ALLOW MEMBER TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES