Dolphin Goods Pvt. Ltd., Kolkata V. I.T.O.,Ward-6(1), Kolkata

ITA 240/KOL/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5424 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 24-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VINOD KUMAR JAIN
• Keywords: Unexplained cash credit; Unexplained investment; Sale consideration of property below Jantri Value; Source of fund; Additional evidence; Question of law; Competent authority; Onus to prove; Set aside
• Section: 271(1)(c); 143(3); 142(1); 133(6); 143(1); 195; 143(2); 264; 43; 48; 13; 22; 147; 131; 68; 263; 144

Judgement Text

1 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VA RKEY, JM] I.T.A. NO. 240/KOL/2020 ASSESSMENT YEAR: 2009-10 DOLPHIN GOODS (P) LTD. (PAN: AADCD0480B) VS. INCOME-TAX OFFICER, WD-6(1), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 08.04.2021 DATE OF PRONOUNCEMENT 05.05.2021 FOR THE APPELLANT SHRI VINOD KUMAR JAIN, AR FOR THE RESPONDENT SHRI JOHN VINCENT DONKUPAR LONGS TICH, CIT, DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF LD. CIT(A)-23, KOLKATA DATED 08.08.2019 FOR A Y 2009-10. 2. AT THE OUTSET, THE LD. AR DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE HAS FILED ADDITIONAL GROUNDS OF APPEAL WHICH IS CHALLEN GING THE JURISDICTION OF THE AO TO HAVE PASSED THE ORDER WHICH IS AS UNDER: 1. THAT ON FACTS AND CIRCUMSTANCES OF CASE, THE A SSESSMENT ORDER DATED 25.03.2015 PASSED BY THE INCOME TAX OFFICER WARD 6(1}/KOLKATA UNDER SECTION144 IS BAD IN LAW, ILLEGAL AND WITHOUT JURISDICTION AND / OR IN EXCESS OF JURISDICTION AS PER PROVISIONS OF SECTION 127 OF THE ACT AND ON THE GROUNDS AMONGST O THERS, THAT HE FAILED TO ESTABLISH THAT HE POSSESSED LEGAL AND VALID JURISDICTION UNDE R THE ACT TO PASS THE ASSESSMENT ORDER, HENCE THE SAID ASSESSMENT ORDER PASSED U/S 1 44 OF THE ACT BE QUASHED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSMENT ORDER PASSED U/S 144 OF THE ACT BY ITO WARD 6(1}/KOLKATA IS BAD IN LAW A S SAME IS NOT AS PER THE PROVISIONS OF THE ACT TO ASSUME THE JURISDICTION U/S 144 OF TH E ACT AND PASSED ORDER AS BEST JUDGEMENT. 3. FROM A PERUSAL OF THE ADDITIONAL GROUNDS OF APPE AL, WE NOTE THAT THIS IS A LEGAL ISSUE WHICH IF FOUND TO BE CORRECT, THEN IT GOES TO THE ROOT OF THE MATTER. AND SINCE IT 2 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 IS A LEGAL ISSUE IT CAN BE RAISED ALSO FOR THE FIRS T TIME BEFORE THIS TRIBUNAL AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. VS. CIT 229 ITR 383 (SC). 4. IN RESPECT OF THE LEGAL ISSUE (SUPRA) THE LD. AR SUBMITTED THAT THE ASSESSEE'S CASE WAS ASSESSED U/S 147 R.W. SECTION 143(3) OF TH E INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) ON 12.05.2011 BY ASSESSING OFFICER, ITO -W- L(2)/KOLKATA. DURING ORIGINAL ASSESSMENT PROCEEDING S, THE AO VERIFIED THE SHARE TRANSACTIONS WHICH ASSESSEE HAD RECEIVED BY ISSUING NOTICE U/S 133(6) OF THE ACT FROM ALL THE SHAREHOLDERS AND SINCE THE ASSESSEE COULD S ATISFY THE AO, THE NATURE AND SOURCE OF RECEIVING THE SHARE CAPITAL AND PREMIUM, THE AO ACCEPTED THE TRANSACTION AS GENUINE. 5. THEREAFTER, THE LD CIT-1, KOLKATA PASSED REVISI ON ORDER U/S 263 ON 07.03.2014 SETTING ASIDE THE ASSESSMENT ORDER 12.05 .2011 WITH CERTAIN SPECIFIC DIRECTIONS TO AO I.E. ITO WARD 1(2)/KOLKATA, WHICH WE WILL DISCUSS ( INFRA ). 6. PURSUANT TO THE ORDER OF LD. CIT-1, KOLKATA IN THE RE-ASSESSMENT PROCEEDING ITO WARD 1(2)/KOL ISSUED NOTICES U/S. 142(1) OF THE ACT ON 22.09.2014, WHICH WAS DULY RESPONDED BY THE ASSESSEE. 7. AGAIN A NOTICE U/S 142(1) OF THE ACT DT 17.03.2 015 SEEKING DETAILS FOR NEXT ASSESSMENT YEAR I.E. 2010-11 WAS ALSO ISSUED BY THE ITO, WARD-1(2). PURSUANT TO THE SAME, THE ASSESSEE SUBMITTED EXPLANATIONS ON QUERIE S RAISED IN NOTICE AND FILED DOCUMENTS ON 24.03.2015 FOR AY 2009-10. 8. THEREAFTER, THE AO ISSUED A SHOW CAUSE NOTICE O N HIGH SHARE PREMIUM AND ALSO MENTIONS ABOUT THE NON-APPEARANCE OF DIRECTORS OF SHARE SUBSCRIBERS U/S 131 OF THE ACT, BUT DID NOT SEEK ANY RESPONSE FROM THE ASS ESSEE EITHER TO PRODUCE DIRECTORS OR TO SUBSTANTIATE THE CLAIM ON GENUINENESS OF CASH CREDIT. ACCORDING TO THE ASSESSEE, IT WAS NOT INFORMED OR INTIMATED ABOUT THE SUDDEN C HANGE OF JURISDICTION FROM ITO WARD 1(2)/KOLKATA WHICH FALLS UNDER PR. CIT-L, KOLK ATA TO ITO WARD 6(1)/KOLKATA WHICH FALLS UNDER PR. CIT-2, KOLKATA. 3 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 9. ACCORDING TO LD. AR, A PERUSAL OF RE-ASSESSMENT ORDER IT CAN BE SEEN THAT THE JURISDICTION OF THE ASSESSEE WAS SHIFTED TO ITO-W-6 (1)/KOLKATA ON THE PLEA OF RESTRUCTURING. ACCORDING TO HIM, NO ORDER OR INTIM ATION OR INFORMATION OR NOTICE U/S 127 OF THE ACT WAS SERVED UPON THE ASSESSEE. AND TH ERE IS MERELY A PASSING REFERENCE FOR CHANGE OF JURISDICTION PURPORTEDLY UNDER ' RESTRUCTURING EXERCISE '. ACCORDING TO LD. AR, EVEN THE NOTIFICATION NO. 50/2014 ISSUED B Y CBDT DID NOT DISPENSE WITH THE LEGAL REQUIREMENT OF ORDERS IN WRITING BY PR. CIT/C IT AND CONSEQUENTLY IN TURN BY ADDL/JT CIT AND DREW OUR ATTENTION TO THE CBDT CIRC ULAR. ACCORDING TO LD. AR, THE NOTIFICATION DID NOT OVERRIDE THE JURISDICTION OF P R. CIT TO TRANSFER THE CASES AND INTIMATION OF SAME TO THE ASSESSEE AS STIPULATED U/ S 127 OF THE ACT. 10. AND LATER, THE ITO WARD 6(1)/KOLKATA HAD PASSED AN ORDER IN HURRY ( WITHIN 45 DAYS, AFTER STATING TO HAVE ISSUED SECTION 142(1) N OTICE ) ON 25.03.2015 U/S 144 R.W. 263 R.W. 147 R.W.143(3) OF THE ACT ADDING THE SHARE CAPITAL AND SHARE PREMIUM OF RS.11,10,00,000/- TO THE RETURNED INCOME. IT WAS PO INTED OUT BY LD. AR THAT OUT OF THE 15 PAGES ASSESSMENT ORDER, AO REPRODUCED IN 11 PAGES THE LD CIT'S REVISION ORDER AND 2 PAGES ON ISSUE OF NOTICES/SHOW CAUSE NO TICE. THE REASON STATED BY THE ITO WARD 6(1)/KOLKATA IN THE RE-ASSESSMENT ORDER WE RE:- A. NO RESPONSE TO QUESTIONNAIRE DATED 03.02.2015, B. NON-APPEARANCE PURSUANT TO SUMMONS C. NON-COMPLIANCE TO NOTICES D. HIGH SHARE PREMIUM. 11. ACCORDING TO LD. AR, THE ASSESSEE HAD NOT RECE IVED ANY NOTICE DATED 03.02.2015. WHEREAS NOTICE AND SCN DATED 17.03.2015 WERE RECEIVED AND DULY RESPONDED. THE AO IGNORED HIS OWN NOTICE DATED 17.0 3.2015 AND THE ASSESSEE'S RESPONSE FILED ON 24.03.2015, TO PASS THE RE-ASSESS MENT ORDER ON 25.03.2015 MAKING THE ADDITION. 4 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 12. ACCORDING TO LD AR, THE ASSESSEES DIRECTORS W ERE NOT SERVED WITH ANY SUMMON TO APPEAR BEFORE THE ITO WARD 6(1)/KOLKATA. FURTHER ACCORDING TO LD AR, THE RE-ASSESSMENT ORDER DID NOT MENTION THE BASIC D ETAILS SUCH AS DATE(S) OF SUMMON, NAMES OF SUMMONED PERSONS, ANY ACTION TAKEN BY THE AO FOR NON-APPEARANCE THE ASSESSEES DIRECTORS. 13. ACCORDING TO THE LD. AR, SINCE THERE WAS NO ORD ER PASSED U/S. 127 OF THE ACT BY THE COMPETENT AUTHORITY, THE ITO, WARD-6(1) COUL D NOT HAVE EXERCISED HIS JURISDICTION OVER THE ASSESSEE. ACCORDING TO THE L D. AR, SINCE THERE IS NO ORDER PASSED BY THE LD. PR. CIT U/S. 127 OF THE ACT, THE JURISDICTION OF THE ASSESSEE WHICH WAS UNDER THE JURISDICTION OF THE PR. CIT-1, THE JU RISDICTION OF ITO, WARD-1(2) COULD NOT HAVE BEEN TRANSFERRED TO THE ANOTHER JURISDICTI ON OF PR. CIT-2, SINCE ITO, WARD- 6(1) WAS UNDER PR CIT-2, THEREFORE, THE ASSESSMENT ORDER PASSED BY ITO, WARD-6(1) ON 25.03.2015 PASSED U/S. 144 READ WITH SECTION 147 /143(3) OF THE ACT IS WHOLLY WITHOUT JURISDICTION AND SO BAD IN LAW. 14. COMING TO THE MERITS OF THE CASE, THE FACTS BRO UGHT TO OUR NOTICE ARE THAT THE ASSESSEE HAD FILED RETURN OF INCOME ON 07.07.2009. LATER THE SAME WAS PROCESSED U/S. 143(1) OF THE ACT. THEREAFTER, THE ASSESSEES CASE WAS REOPENED U/S. 147 OF THE ACT AND AFTER ISSUING NOTICE U/S. 143(2) OF THE ACT THE AO NOTED THAT ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR HAD ISSUED SHARE CAPIT AL OF RS.28,72,500/- (287250 NUMBER OF SHARES AT THE FACE VALUE OF RS. 10/- EACH ) AND SHARE PREMIUM OF RS.10,81,27,500/-. THE AO NOTES THAT HE HAD ISSUED NOTICE U/S. 133(6) OF THE ACT TO THE SHARE APPLICANTS. AND THEREAFTER THE AO DID NO T DRAW ANY ADVERSE INFERENCE AGAINST THE ASSESSEE BEING SATISFIED WITH THE NATUR E AND SOURCE OF THE SHARE CAPITAL AND PREMIUM RAISED BY THE ASSESSEE DURING THE ASSES SMENT YEAR 2009-10 AND PASSED THE REASSESSMENT ORDER VIDE ORDER DATED 12.05.2011 ( HEREIN AFTER THE FIRST ROUND OF ASSESSMENT). THEREAFTER, THE LD. PR. CIT-1, KOLKAT A ISSUED NOTICE U/S. 263 OF THE ACT AND THEREAFTER, AFTER HEARING THE ASSESSEE THE LD. PR. CIT-1, KOLKATA VIDE ORDER DATED 07.03.2014 WAS PLEASED TO SET ASIDE THE ORDER OF TH E AO DATED 12.05.2011 WITH THE FOLLOWING DIRECTION: 5 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 A. TO CONDUCT INDEPENDENT, DETAILED AND COMPLETE EN QUIRIES INTO SUBSCRIPTION TO THE SHARE CAPITAL AND SHARE PREMIUM AND INVESTME NT MADE AND TO VERIFY THE DOCUMENTS FILED. B. TO TRACE THE SOURCE OF SHARE CAPITAL BY INQUIRIN G INTO VARIOUS LAYERS. C. TO EXAMINE THE DIRECTORS OF THE SUBSCRIBER-COMPA NIES AS WELL AS DIRECTORS OF ASSESSEE-COMPANY BY ISSUING SUMMONS U/S 131 OF T HE ACT AND TAKE STATEMENT UNDER OATH. D. TO INFORM AO OF SUBSCRIBERS-COMPANIES REGARDING INVESTMENTS MADE BY THEM WITH THE ASSESSEE-COMPANY. 15. PURSUANT TO THE LD CITS ORDER U/S 263 OF THE A CT, THE MATTER WAS REMANDED BACK BEFORE THE ITO, WARD-1(2) WHICH FACT IS DISCER NABLE FROM A PERUSAL OF THE ORDER SHEET ENTRY PLACED AT PAGE 449 OF PAPER BOOK WHICH SSHOWS THAT THE ITO, WARD-1(2) RECEIVED THE FILE IN RESPECT OF THE ASSESSEES CASE ON 20.03.2014. THEREAFTER, THE ORDER SHEET SHOWS THAT THE ASSESSEES FILE WAS TRAN SFERRED TO ITO, WD-6(1), KOLKATA. FROM A PERUSAL OF THE ORDER SHEET IT IS NOTED THAT THE NEW ITO, WARD-6(1), KOLKATA SENT SECTION 142(1) NOTICE THROUGH E-MAIL AND ALSO ISSUED SUMMONS U/S. 131 OF THE ACT TO THE DIRECTORS OF THE INVESTOR COMPANIES AS W ELL AS THE DIRECTOR OF THE ASSESSEE COMPANY. THEREAFTER, HE NOTED THAT THERE WAS NO CO MPLIANCE TO THE NOTICES TO THE ASSESSEE AND THEREAFTER ON 25.03.2015 PASSED THE RE ASSESSMENT U/S. 144/263 OF THE ACT MAKING AN ADDITION OF RS.11,10,00,000/-. IN TH IS CONTEXT, THE LD. A.R BROUGHT TO OUR NOTICE THAT IN THE ASSESSMENT FOLDER WHICH WAS TRANSFERRED TO THE NEW AO, ALL THE DOCUMENTS TO PROVE THE NATURE AND SOURCE OF THE SHA RE TRANSACTION IN QUESTION WAS AVAILABLE AND THE ACTIONS/INVESTIGATION CARRIED OUT BY THE ITO, WARD-1(2) WHEREIN THE EARLIER AO HAD ACCEPTED THE SHARE TRANSACTION AS GE NUINE WERE AVAILABLE. MOREOVER, PURSUANT TO THE RECEIPT OF SCN DATED 17.03.2015 WER E RECEIVED AND DULY RESPONDED ON 24.03.2015. HOWEVER, THE AO [ITO, WARD-6(1)], WI THOUT SERVING SUMMONS/NOTICES OTHER THAN THE SCN ON 17.03.2015, H URRIEDLY ( WITHIN 45 DAYS AFTER GETTING THE FILE OF ASSESSEE ON TRANSFER ) PASSED THE RE-ASSESSMENT ORDER IGNORING THE 6 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 DOCUMENTS FURNISHED BY ASSESSEE AND SHARE SUBSCRIBE RS PURSUANT TO NOTICES ISSUED BY THE EARLIER AO [ITO, WARD-1(2)] IN THE FIRST ROUND OF SCRUTINY ASSESSMENT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A). BEFORE THE LD. CIT(A) THE ASSESSEE FILED ADDITIONAL EVIDENCE ON 22.02.2017 AS WELL AS ON 23.02.2017, SINCE ASSESSEE NEITHER RECEIVED ANY NOTICES/SUMMONS OTHER THAN THE SCN ON 17.3.2015 FROM THE NEW AO, WHICH WAS DULY RESPONDED ON 24.3.2 015 AND HE PASSED THE ORDER THE VERY NEXT DAY ON 25.3.2015. APPRECIATING THESE FACTS, THE LD CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO AND IT WAS FILED BY THE AO ON 19.07.2018 AND 07.08.2017 WHICH ARE FOUND PLACED AT PAGES 42 TO 46 OF THE PAPER BOOK. THE ASSESSEE THEREAFTER FILED THE REJOINDER BEFORE THE LD. CIT(A) ON 02.08.2019 WHICH IS FOUND PLACED AT PAGE 47 TO 50 OF THE PAPER BOOK. IN THIS CASE, THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST THE ACTION OF THE LD. CIT(A ) IN CONFIRMING THE ADDITION MADE BY THE AO U/S. 68 OF THE ACT IN RESPECT OF SHARE CA PITAL AND PREMIUM RECEIVED BY THE ASSESSEE TO THE TUNE OF RS.11,10,00,000/- IN THE AY 2009-10 WHEN IT WAS ACCEPTED BY THE AO IN THE FIRST ROUND OF SCRUTINY ASSESSMENT AN D NO INFIRMITY CAN BE ATTRIBUTED TO THE DOCUMENTS FILED TO SUBSTANTIATE THE IDENTITY, C REDITWORTHINESS AND GENUINENESS OF THE SHARE TRANSACTION IN QUESTION. FOR EXAMINING TH E MERIT OF THE ADDITION SUSTAINED BY THE LD CIT(A), LET US HAVE A LOOK AT SECTION 68 OF THE ACT WHICH READS AS UNDER: '68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINI ON OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. ' 16. THE PHRASEOLOGY OF SECTION 68 IS CLEAR. THE LEG ISLATURE HAS LAID DOWN THAT IN THE ABSENCE OF A SATISFACTORY EXPLANATION, THE UNEX PLAINED CASH CREDIT MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN THIS CASE THE LEGISLATIVE MANDATE IS NOT IN TERMS OF THE WORDS SHALL BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR'. THE HONBLE SUPREME COURT WHILE INTERPRETING SIMILAR PHRASEOLOG Y USED IN SECTION 68 HAS HELD THAT IN CREATING THE LEGAL FICTION THE PHRASEOLOGY EMPLOYS THE WORD 'MAY' AND NOT 'SHALL'. THUS THE UN-SATISFACTORINESS OF THE EXPLAN ATION DOES NOT AND NEED NOT 7 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 AUTOMATICALLY RESULT IN DEEMING THE AMOUNT CREDITED IN THE BOOKS AS THE INCOME OF THE ASSESSEE AS HELD BY THE SUPREME COURT IN THE CA SE OF CIT V. SMT. P. K. NOORJAHAN [1999] 237 ITR 570. 17. WE NOTE THAT IN THE PRESENT CASE, THE ASSESSEE HAD SUBMITTED THE FOLLOWING RELEVANT DETAILS TO SUBSTANTIATE THE IDENTITY, CRED ITWORTHINESS AND GENUINENESS OF THE SHARE TRANSACTION IN QUESTION AND THE EVIDENCE INTER-ALIA WHICH WERE FILED BEFORE THE AO INCLUDED THE FOLLOWING DETAILS. (A) INCOME TAX RETURN OF THE SHARE HOLDERS (B) AUDITED ACCOUNTS OF THE SHARE HOLDERS (C) SHARE APPLICATION FORMS (D) SHARE ALLOTMENT LETTERS (E) COPY OF THE BANK ACCOUNT OF THE SHARE HOLDERS (F) TRANSACTION WITH THE ASSESSEE WAS DULY HIGHLIGH TED IN THE BANK STATEMENT (G) EVIDENCES OF SOURCE OF SOURCE OF THE SHARE H OLDERS. 18. EVEN THOUGH THE AFORESAID DOCUMENTS WERE FILED BEFORE THE AO IN THE FIRST ROUND [ AFTER PERUSAL OF WHICH THE AO IN THE FIRST ROUND AC CEPTED THE NATURE AND SOURCE OF SHARE TRANSACTION IN QUESTION AFTER ISSUING OF NOTICES TO SHARE SUBSCRIBERS ] AND WHICH WERE AVAILABLE IN THE ASSESSMENT FOLDER, AND SINCE THE NEW AO [ITO, WARD-6(1)], MADE THE ADDITION HURRIEDLY, THE ASSESS EE AGAIN HAD FILED THE DOCUMENTS BEFORE THE LD. CIT(A), WHO CALLED FOR REMAND REPORT FROM AO WAS OF THE OPINION THAT ASSESSEE HAD NOT PROVED THE IDENTITY, CREDITWO RTHINESS AND GENUINENESS OF THE SHARE SUBSCRIBERS AND CONFIRMED THE ADDITION MADE U /S. 68 OF THE ACT. SO, WHILE EXAMINING THE LD. CIT(A)S ACTION IS RIGHT OR ERRON EOUS, I.E, SUSTAINING THE ADDITION SECTION 68 OF THE ACT [ THE LAW AS IT STOOD IN THIS ASSESSMENT YEAR 2009-10 ] HAVING REPRODUCED SECTION 68 OF THE ACT (SUPRA) LET US HA VE A LOOK AT THE JUDICIAL PRECEDENTS ON THE ISSUE IN HAND. 19. ONE OF THE MAIN PLANK ON WHICH THE AO MADE THE ADDITION WAS BECAUSE OF NON-COMPLIANCE OF THE DIRECTORS OF THE SHARE SUBSCR IBERS TO TURN UP BEFORE HIM DURING RE-ASSESSMENT/REMAND PROCEEDINGS. IN SUCH A CASE THE HON'BLE APEX COURT IN THE CASE OF ORISSA CORPN. (P) LTD. (SUPRA) 159 I TR 78 AND FOLLOWING THE SAME, 8 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 THE HON'BLE GUJARAT HIGH COURT, IN THE CASE OF DY. CIT V. ROHINI BUILDERS [2002] 256 ITR 360 /[2003] 127 TAXMAN 523 , HAS HELD THAT ONUS OF THE ASSESSEE (IN WHOSE BOOKS OF ACCOUNT CREDIT APPEARS) STANDS FULLY DISCH ARGED IF THE IDENTITY OF THE CREDITOR IS ESTABLISHED AND ACTUAL RECEIPT OF MONEY FROM SUCH CREDITOR IS PROVED. IN CASE, THE ASSESSING OFFICER IS DISSATISFIED ABOUT T HE SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNTS OF THE CREDITORS, THE PROPER COURSE W OULD BE TO ASSESS SUCH CREDIT IN THE HANDS OF THE CREDITOR (AFTER MAKING DUE ENQUIRI ES FROM SUCH CREDITOR). IN ARRIVING AT THIS CONCLUSION, THE HON'BLE COURT HAS FURTHER S TRESSED THE PRESENCE OF WORD 'MAY' IN SECTION 68. RELEVANT OBSERVATIONS AT PAGES 369 AND 370 OF THIS REPORT ARE REPRODUCED HEREUNDER:- 'MERELY BECAUSE SUMMONS ISSUED TO SOME OF THE CREDI TORS COULD NOT BE SERVED OR THEY FAILED TO ATTEND BEFORE THE ASSESSING OFFICER, CANN OT BE A GROUND TO TREAT THE LOANS TAKEN BY THE ASSESSEE FROM THOSE CREDITORS AS NON-G ENUINE IN VIEW OF THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE CASE OF ORISSA COR PORATION [1986] 159 ITR 78. IN THE SAID DECISION THE SUPREME COURT HAS OBSERVED TH AT WHEN THE ASSESSEE FURNISHES NAMES AND ADDRESSES OF THE ALLEGED CREDITORS AND TH E GIR NUMBERS, THE BURDEN SHIFTS TO THE DEPARTMENT TO ESTABLISH THE REVENUE'S CASE AND IN ORDER TO SUSTAIN THE ADDITION THE REVENUE HAS TO PURSUE THE ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINESS AND MERE NON-COMPLIANCE OF SUMMONS ISSUED BY THE ASSESS ING OFFICER UNDER SECTION 131, BY THE ALLEGED CREDITORS WILL NOT BE SUFFICIENT TO DRA W AND ADVERSE INFERENCE AGAINST THE ASSESSEE. IN THE CASE OF SIX CREDITORS WHO APPEARED BEFORE THE ASSESSING OFFICER AND WHOSE STATEMENTS WERE RECORDED BY THE ASSESSING OFF ICER, THEY HAVE ADMITTED HAVING ADVANCED LOANS TO THE ASSESSEE BY ACCOUNT PAYEE CHE QUES AND IN CASE THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE CASH AMOUNT DEPO SITED BY THOSE CREDITORS IN THEIR BANK ACCOUNTS, THE PROPER COURSE WOULD HAVE BEEN TO MAKE ASSESSMENTS IN THE CASES OF THOSE CREDITORS BY' TREATING THE CASH DEPOSITS IN T HEIR BANK ACCOUNTS AS UNEXPLAINED INVESTMENTS OF THOSE CREDITORS UNDER SECTION 69. 20. IN THE CASE OF NEMI CHAND KOTHARI 136 TAXMAN 21 3, (SUPRA), THE HON'BLE GUAHATI HIGH COURT HASTHROWN LIGHT ON ANOTHER ASPEC T TOUCHING THE ISSUE OF ONUS ON ASSESSEE UNDER SECTION 68, BY HOLDING THAT THE SAME SHOULD BE DECIDED BY TAKING INTO CONSIDERATION THE PROVISION OF SECTION 106 OF THE EVIDENCE ACT WHICH SAYS THAT A PERSON CAN BE REQUIRED TO PROVE ONLY SUCH FACTS W HICH ARE IN HIS KNOWLEDGE. THE HON'BLE COURT IN THE SAID CASE HELD THAT, ONCE IT I S FOUND THAT AN ASSESSEE HAS ACTUALLY TAKEN MONEY FROM DEPOSITOR/LENDER WHO HAS BEEN FULLY IDENTIFIED, THE ASSESSEE/BORROWER CANNOT BE CALLED UPON TO EXPLAIN, MUCH LESS PROVE THE AFFAIRS OF SUCH THIRD PARTY, WHICH HE IS NOT EVEN SUPPOSED TO KNOW OR ABOUT WHICH HE CANNOT BE HELD TO BE ACCREDITED WITH ANY KNOWLEDGE. IN THI S VIEW, THE HON'BLE COURT HAS 9 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 LAID DOWN THAT SECTION 68 OF INCOME-TAX ACT, SHOULD BE READ ALONG WITH SECTION 106 OF EVIDENCE ACT. THE RELEVANT OBSERVATIONS AT PAGE 260 TO 262, 264 AND 265 OF THE REPORT ARE REPRODUCED HEREIN BELOW:- 'WHILE INTERPRETING THE MEANING AND SCOPE OF SECTIO N 68, ONE HAS TO BEAR IN MIND THAT NORMALLY, INTERPRETATION OF A STATUTE SHA LL BE GENERAL, IN NATURE, SUBJECT ONLY TO SUCH EXCEPTIONS AS MAY BE LOGICALLY PERMITTED BY THE STATUTE ITSELF OR BY SOME OTHER LAW CONNECTED THEREWITH OR RELEVANT THERETO. KEEPING IN VIEW THESE FUNDAMENTALS OF INTERPRETATION OF STATUT ES, WHEN WE READ CAREFULLY THE PROVISIONS OF SECTION 68, WE NOTICE NOTHING IN SECTION 68 TO SHOW THAT THE SCOPE OF THE INQUIRY UNDER SECTION 68 BY THE REVENU E DEPARTMENT SHALL REMAIN CONFINED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLAC E BETWEEN THE ASSESSEE AND THE CREDITOR NOR DOES THE WORDING OF SECTION 68 IND ICATE THAT SECTION 68 DOES NOT AUTHORIZE THE REVENUE DEPARTMENT TO MAKE INQUIR Y INTO THE SOURCE(S) OF THE CREDIT AND/OR SUB-CREDITOR. THE LANGUAGE EMPLOYED B Y SECTION 68 CANNOT BE READ TO IMPOSE SUCH LIMITATIONS ON THE POWERS OF TH E ASSESSING OFFICER. THE LOGICAL CONCLUSION, THEREFORE, HAS TO BE, AND WE HO LD THAT AN INQUIRY UNDER SECTION 68 NEED NOT NECESSARILY BE KEPT CONFINED BY THE ASSESSING OFFICER WITHIN THE TRANSACTIONS, WHICH TOOK PLACE BETWEEN THE ASSE SSEE AND HIS CREDITOR, BUT THAT THE SAME MAY BE EXTENDED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND HIS SUB-CREDITOR. THUS, WH ILE THE ASSESSING OFFICER IS UNDER SECTION 68, FREE TO LOOK INTO THE SOURCE(S) O F THE CREDITOR AND/OR OF THE SUB-CREDITOR, THE BURDEN ON THE ASSESSEE UNDER SECT ION 68 IS DEFINITELY LIMITED. THIS LIMIT HAS BEEN IMPOSED BY SECTION 106 OF THE E VIDENCE ACT WHICH READS AS FOLLOWS: 'BURDEN OF PROVING FACT ESPECIALLY WITHIN KNOWLEDGE .-WHEN ANY FACT IS ESPECIALLY WITHIN THE KNOWLEDGE OF ANY PERSON, THE BURDEN) OF PROVING THAT FACT IS UPON HIM. ' ******** WHAT, THUS, TRANSPIRES FROM THE ABOVE DISCUSSION IS THAT WHITE SECTION 106 OF THE EVIDENCE ACT LIMITS THE ONUS OF THE ASSE SSEE TO THE EXTENT OF HIS PROVING THE SOURCE FROM WHICH HE HAS RECEIVED THE C ASH CREDIT, SECTION 68 GIVES AMPLE FREEDOM TO THE ASSESSING OFFICER TO MAKE INQU IRY NOT ONLY INTO THE SOURCE(S)OF THE CREDITOR BUT ALSO OF HIS (CREDITOR' S) SUB-CREDITORS AND PROVE, AS A RESULT, OF SUCH INQUIRY, THAT THE MONEY RECEIVED BY THE ASSESSEE, IN THE FORM OF LOAN FROM THE CREDITOR, THOUGH ROUTED THROUGH THE S UB-CREDITORS, ACTUALLY BELONGS TO, OR WAS OF, THE ASSESSEE HIMSELF. IN OTH ER WORDS, WHILE SECTION 68 GIVES THE LIBERTY TO THE ASSESSING OFFICER TO ENQUI RE INTO THE SOURCE/SOURCE FROM WHERE THE CREDITOR HAS RECEIVED THE MONEY, SECTION 106 MAKES THE ASSESSEE LIABLE TO DISCLOSE ONLY THE SOURCE(S) FROM WHERE HE HAS HIMSELF RECEIVED THE CREDIT AND IT IS NOT THE BURDEN OF THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE SOURCE(S) OF THE SUB-CREDITORS. IF SECTION 106 AND SECTION 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN, THE INTERPRETATION OF SECTION 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN THE INTERPRETATION OF SECTION 68 HAS TO BE IN SUCH A WAY THAT IT DOES NOT MAKE SECTION 106 REDUND ANT. HENCE, THE HARMONIOUS CONSTRUCTION OF SECTION 106 OF THE EVIDE NCE ACT AND SECTION 68 OF THE INCOME- TAX ACT WILL BE THAT THOUGH APART FROM ESTABLISHING THE IDENTITY OF THE CREDITOR, THE ASSESSEE MUST ESTABLISH THE GENUI NENESS OF THE TRANSACTION AS 10 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 WELL AS THE CREDITWORTHINESS OF HIS CREDITOR, THE B URDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR MUST REMAIN CONFINED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR. WHAT FOLLOWS , AS A COROLLARY, IS THAT IT IS NOT THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINE NESS OF THE TRANSACTIONS BETWEEN HIS CREDITOR AND SUB-CREDITORS NOR IS IT TH E BURDEN OF THE ASSESSEE TO PROVE THAT THE SUB-CREDITOR HAD THE CREDITWORTHINES S TO ADVANCE THE CASH CREDIT TO THE CREDITOR FROM WHOM THE CASH CREDIT HAS BEEN. EVENTUALLY, RECEIVED BY THE ASSESSEE. IT, THEREFORE, FURTHER LOGICALLY FOLLOWS THAT THE CREDITOR'S CREDITWORTHINESS HAS TO BE JUDGED VIS-A-VIS THE TRA NSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR, AND IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CRE DITOR OR OF THE GENUINENESS OF THE TRANSACTIONS, WHICH TOOK BETWEEN THE CREDITOR A ND SUB-CREDITOR AND/OR CREDITWORTHINESS OF THE SUB- CREDITORS, FOR, THESE ASPECTS MAY NOT BE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE. ' ********** ' ... IF A CREDITOR HAS, BY ANY UNDISCLOSED SOURCE, A PARTICULAR AMOUNT OF MONEY IN THE BANK, THERE IS NO LIMITATION UNDER THE LAW ON THE PART OF THE ASSESSEE TO OBTAIN SUCH AMOUNT OF MONEY OR PART THE REOF FROM THE CREDITOR, BY WAY OF CHEQUE IN THE FORM OF LOAN AND IN SUCH A CAS E, IF THE CREDITOR FAILS TO SATISFY AS TO HOW HE HAD ACTUALLY RECEIVED THE SAID AMOUNT AND HAPPENED TO KEEP THE SAME IN THE BANK, THE SAID AMOUNT CANNOT B E TREATED AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE. IN OTHER WORDS, T HE GENUINENESS AS WELL AS THE CREDITWORTHINESS OF A CREDITOR HAVE TO BE ADJUD GED VIS-A-VIS THE TRANSACTIONS, WHICH HE HAS WITH THE ASSESSEE. THE R EASON WHY WE HAVE FORMED THE OPINION THAT IT IS NOT THE BUSINESS OF THE ASSE SSEE TO FIND OUT THE ACTUAL SOURCE OR SOURCES FROM WHERE THE CREDITOR HAS ACCUM ULATED THE AMOUNT, WHICH HE ADVANCES, AS LOAN, TO THE ASSESSEE IS THAT SO FA R AS AN ASSESSEE IS CONCERNED, HE HAS TO PROVE THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITOR VIS-A-VIS THE TRANSACTIONS WHICH HAD T AKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR AND NOT BETWEEN THE CREDI TOR AND THE SUB-CREDITORS, FOR, IT IS NOT EVEN REQUIRED UNDER THE LAW FOR THE ASSESSEE TO TRY TO FIND OUT AS TO WHAT SOURCES FROM WHERE THE CREDITOR HAD RECEIVED T HE AMOUNT, HIS SPECIAL KNOWLEDGE UNDER SECTION 106 OF THE EVIDENCE ACT MAY VERY WELL REMAIN CONFINED ONLY TO THE TRANSACTIONS, WHICH HE HAD' WI TH THE CREDITOR AND HE MAY NOT KNOW WHAT TRANSACTION(S) HAD TAKEN PLACE BETWEE N HIS CREDITOR AND THE SUB- CREDITOR ' ********** 'IN OTHER WORDS, THOUGH UNDER SECTION 68 AN ASSESSI NG OFFICER IS FREE TO SHOW, WITH THE HELP OF THE INQUIRY CONDUCTED BY HIM INTO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND THE SUB-CREDITOR, THAT THE TRANSACTION BETWEEN THE TWO WERE NOT GENUINE AND TH AT THE SUB-CREDITOR HAD NO CREDITWORTHINESS, IT WILL NOT NECESSARILY MEAN THAT THE LOAN ADVANCED BY THE SUB-CREDITOR TO THE CREDITOR WAS INCOME OF THE ASSE SSEE FROM UNDISCLOSED SOURCE UNLESS THERE IS EVIDENCE, DIRECT OR CIRCUMST ANTIAL, TO SHOW THAT THE AMOUNT WHICH HAS BEEN ADVANCED BY THE SUB-CREDITOR TO THE CREDITOR, HAD ACTUALLY BEEN RECEIVED BY THE SUB-CREDITOR FROM THE ASSESSEE .' ********** 11 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 'KEEPING IN VIEW THE ABOVE POSITION OF LAW, WHEN WE TURN TO THE FACTUAL MATRIX OF THE PRESENT CASE, WE FIND THAT SO FAR AS THE APPELLANT IS CONCERNED, HE HAS ESTABLISHED THE IDENTITY OF THE CREDITORS, NAME LY, NEMICHAND NAHATA AND SONS (HUF) AND PAWAN KUMAR AGARWALLA. THE APPELLANT HAD ALSO SHOWN, IN ACCORDANCE WITH THE BURDEN, WHICH RESTED ON HIM UND ER SECTION 106 OF THE EVIDENCE ACT, THAT THE SAID AMOUNTS HAD BEEN RECEIV ED BY HIM BY WAY OF CHEQUES FROM THE CREDITORS AFOREMENTIONED. IN FACT THE FACT THAT THE ASSESSEE HAD RECEIVED THE SAID AMOUNTS BY WAY OF CHEQUES WAS NOT IN DISPUTE. ONCE THE ASSESSEE HAD ESTABLISHED THAT HE HAD RECEIVED THE S AID AMOUNTS FROM THE CREDITORS AFOREMENTIONED BY WAY OF CHEQUES, THE ASS ESSEE MUST BE TAKEN TO HAVE PROVED THAT THE CREDITOR HAD THE CREDITWORTHINESS T O ADVANCE THE LOANS. THEREAFTER THE BURDEN HAD SHIFTED TO THE ASSESSING OFFICER TO PROVE THE CONTRARY. ON MERE FAILURE ON THE PART OF THE CREDIT ORS TO SHOW THAT THEIR SUB- CREDITORS HAD CREDITWORTHINESS TO ADVANCE THE SAID LOAN AMOUNTS TO THE ASSESSEE, SUCH FAILURE, AS A COROLLARY, COULD NOT H AVE BEEN AND OUGHT NOT TO HAVE BEEN, UNDER THE LAW, TREATED AS THE INCOME FRO M THE UNDISCLOSED SOURCES OF THE ASSESSEE HIMSELF, WHEN THERE WAS NEITHER DIR ECT NOR CIRCUMSTANTIAL EVIDENCE ON RECORD THAT THE SAID LOAN AMOUNTS ACTUA LLY BELONGED TO, OR WERE OWNED BY, THE ASSESSEE. VIEWED FROM THIS ANGLE, WE HAVE NO HESITATION IN HOLDING THAT IN THE CASE AT HAND, THE ASSESSING OFF ICER HAD FAILED TO SHOW THAT THE AMOUNTS, WHICH HAD COME TO THE HANDS OF THE CRE DITORS FROM THE HANDS OF THE SUB-CREDITORS, HAD ACTUALLY BEEN RECEIVED BY TH E SUB-CREDITORS FROM THE ASSESSEE. IN THE ABSENCE OF ANY SUCH EVIDENCE ON RE CORD, THE ASSESSING OFFICER COULD NOT HAVE TREATED THE SAID AMOUNTS AS INCOME D ERIVED BY THE APPELLANT FROM UNDISCLOSED SOURCES. THE LEARNED TRIBUNAL SERI OUSLY FELL INTO ERROR IN TREATING THE SAID AMOUNTS AS INCOME DERIVED BY THE APPELLANT FROM. UNDISCLOSED SOURCES MERELY ON THE FAILURE OF THE SUB-CREDITORS TO PROVE THEIR CREDITWORTHINESS. 21. FURTHER, IN THE CASE OF CITV. S. KAMALJEET SING H [2005] 147 TAXMAN 18(ALL.) THEIR LORDSHIPS, ON THE ISSUE OF DISCHARGE OF ASSES SEE'S ONUS IN RELATION TO A CASH CREDIT APPEARING IN HIS BOOKS OF ACCOUNT, HAS OBSER VED AND HELD AS UNDER:- '4. THE TRIBUNAL HAS RECORDED A FINDING THAT THE AS SESSEE HAS DISCHARGED THE ONUS WHICH WAS ON HIM TO EXPLAIN THE NATURE AND SOURCE O F CASH CREDIT IN QUESTION. THE ASSESSEE DISCHARGED THE ONUS BY PLACING (I) CONFIRM ATION LETTERS OF THE CASH CREDITORS; (II) THEIR AFFIDAVITS; (III) THEIR FULL ADDRESSES A ND GIR NUMBERS AND PERMANENT ACCOUNT NUMBERS. IT HAS FOUND THAT THE ASSESSEE'S BURDEN ST OOD DISCHARGED AND SO, NO ADDITION TO HIS TOTAL INCOME ON ACCOUNT OF CASH CREDIT WAS C ALLED FOR. IN VIEW OF THIS FINDING, WE FIND THAT THE TRIBUNAL WAS RIGHT IN REVERSING THE O RDER OF THE AA C, SETTING ASIDE THE ASSESSMENT ORDER. 22. WE ALSO TAKE NOTE OF THE DECISION OF THE HON'BL E HIGH COURT, CALCUTTA IN THE CASE OF S.K. BOTHRA & SONS, HUF V. INCOME-TAX OFFIC ER, WARD- 46(3), KOLKATA 347 ITR 347 WHEREIN THE COURT HELD AS FOLLOWS: 15. IT IS NOW A SETTLED LAW THAT WHILE CONSIDERING THE QUESTION WHETHER THE ALLEGED LOAN TAKEN BY THE ASSESSEE WAS A GENUINE TRANSACTION, TH E INITIAL ONUS IS ALWAYS UPON THE ASSESSEE AND IF NO EXPLANATION IS GIVEN OR THE EXPL ANATION GIVEN BY THE APPELLANT IS NOT 12 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 SATISFACTORY, THE ASSESSING OFFICER CAN DISBELIEVE THE ALLEGED TRANSACTION OF LOAN. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURD EN IS DISCHARGED BY THE ASSESSEE BY PRODUCING SUFFICIENT MATERIALS IN SUPPORT OF THE LO AN TRANSACTION, THE ONUS SHIFTS UPON THE ASSESSING OFFICER AND AFTER VERIFICATION, HE CA N CALL FOR FURTHER EXPLANATION FROM THE ASSESSEE AND IN THE PROCESS, THE ONUS MAY AGAIN SHI FT FROM THE ASSESSING OFFICER TO ASSESSEE. 16. IN THE CASE BEFORE US, THE APPELLANT BY PRODUCI NG THE LOAN-CONFIRMATION-CERTIFICATES SIGNED BY THE CREDITORS, DISCLOSING THEIR PERMANENT ACCOUNT NUMBERS AND ADDRESS AND FURTHER INDICATING THAT THE LOAN WAS TAKEN BY ACCOU NT PAYEE CHEQUES, NO DOUBT, PRIMA FACIE, DISCHARGED THE INITIAL BURDEN AND THOSE MATE RIALS DISCLOSED BY THE ASSESSEE PROMPTED THE ASSESSING OFFICER TO ENQUIRE THROUGH T HE INSPECTOR TO VERIFY THE STATEMENTS. 23. IN A CASE WHERE THE ISSUE WAS WHETHER THE ASSE SSEE AVAILED CASH CREDIT AS AGAINST FUTURE SALE OF PRODUCT, THE AO ISSUED SUMMO NS TO THE CREDITORS WHO DID NOT TURN UP BEFORE HIM, SO AO DISBELIEVED THE EXISTENCE OF CREDITORS AND SADDLED THE ADDITION, WHICH WAS OVERTURNED BY LD. CIT(A). HOWE VER, THE TRIBUNAL REVERSED THE DECISION OF THE LD. CIT(A) AND UPHELD THE AOS DECI SION, WHICH ACTION OF TRIBUNAL WAS CHALLENGED BEFORE THE HON'BLE HIGH COURT, CALCU TTA IN THE CASE OF CRYSTAL NETWORKS (P.) LTD. V. COMMISSIONER OF INCOME-TAX 35 3 ITR 171 WHEREIN THE TRIBUNALS DECISION WAS OVERTURNED AND DECISION OF LD. CIT(A) UPHELD AND THE HONBLE HIGH COURT HAS HELD THAT WHEN THE BASIC EV IDENCES ARE ON RECORD THE MERE FAILURE OF THE CREDITOR TO APPEAR CANNOT BE BASIS T O MAKE ADDITION. THE HONBLE HIGH COURT HELD AS FOLLOWS: 8. ASSAILING THE SAID JUDGMENT OF THE LEARNED TRIBU NAL LEARNED COUNSEL FOR THE APPELLANT SUBMITS THAT INCOME-TAX OFFICER DID NOT CONSIDER TH E MATERIAL EVIDENCE SHOWING THE CREDITWORTHINESS AND ALSO OTHER DOCUMENTS, VIZ., CO NFIRMATORY STATEMENTS OF THE PERSONS, OF HAVING ADVANCED CASH AMOUNT AS AGAINST THE SUPPLY OF BIDIS. THESE EVIDENCE WERE DULY CONSIDERED BY THE COMMISSIONER OF INCOME- TAX (APPEALS). THEREFORE, THE FAILURE OF THE PERSON TO TURN UP PURSUANT TO THE SU MMONS ISSUED TO ANY WITNESS IS IMMATERIAL WHEN THE MATERIAL DOCUMENTS MADE AVAILAB LE, SHOULD HAVE BEEN ACCEPTED AND INDEED IN SUBSEQUENT YEAR THE SAME EXPLANATION WAS ACCEPTED BY THE INCOME-TAX OFFICER. HE FURTHER CONTENDED THAT WHEN THE TRIBUNA L HAS RELIED ON THE ENTIRE JUDGMENT OF THE COMMISSIONER OF INCOME-TAX (APPEALS), THEREF ORE, IT WAS NOT PROPER TO TAKE UP SOME PORTION OF THE JUDGMENT OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND TO IGNORE THE OTHER PORTION OF THE SAME. THE JUDICIAL PROPRIETY AND FAIRNESS DEMANDS THAT THE ENTIRE JUDGMENT BOTH FAVOURABLE AND UNFAVOURABL E SHOULD HAVE BEEN CONSIDERED. BY NOT DOING SO THE TRIBUNAL COMMITTED GRAVE ERROR IN LAW IN UPSETTING THE JUDGMENT IN THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). 9. IN THIS CONNECTION HE HAS DRAWN OUR ATTENTION TO A DECISION OF THE SUPREME COURT IN THE CASE OF UDHAVDAS KEWALRAM V. CIT [19671 66 ITR 462. IN THIS JUDGMENT IT IS NOTICED THAT THE SUPREME COURT AS PROPOSITION OF LA W HELD THAT THE TRIBUNAL MUST IN 13 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 DECIDING AN APPEAL, CONSIDER WITH DUE CARE, ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND T HE COMMISSIONER IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. 10. WE FIND CONSIDERABLE FORCE OF THE SUBMISSIONS O F THE LEARNED COUNSEL FOR THE APPELLANT THAT THE TRIBUNAL HAS MERELY NOTICED THAT SINCE THE SUMMONS ISSUED BEFORE ASSESSMENT RETURNED UNSERVED AND NO ONE CAME FORWAR D TO PROVE. THEREFORE, IT SHALL BE ASSUMED THAT THE ASSESSEE FAILED TO PROVE THE EXIST ENCE OF THE CREDITORS OR FOR THAT MATTER THE CREDITWORTHINESS. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS TAKEN THE TROUBLE OF EXAMINING OF ALL OTHER MATERIALS AND DOCUMENTS, VIZ., CONFIRMATORY STATEME NTS, INVOICES, CHALLANS AND VOUCHERS SHOWING SUPPLY OF BIDIS AS AGAINST THE ADV ANCE. THEREFORE, THE ATTENDANCE OF THE WITNESSES PURSUANT TO THE SUMMONS ISSUED, IN OU R VIEW, IS NOT IMPORTANT. THE IMPORTANT IS TO PROVE AS TO WHETHER THE SAID CASH C REDIT WAS RECEIVED AS AGAINST THE FUTURE SALE OF THE PRODUCT OF THE ASSESSEE OR NOT. WHEN IT WAS FOUND BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON FACTS HAVIN G EXAMINED THE DOCUMENTS THAT THE ADVANCE GIVEN BY THE CREDITORS HAVE BEEN ESTABL ISHED THE TRIBUNAL SHOULD NOT HAVE IGNORED THIS -FACT FINDING. INDEED THE TRIBUNAL DID NOT REALLY TOUCH THE AFORESAID FACT FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL. THE SUPREME COURT HAS ALREADY STAT ED AS TO WHAT SHOULD BE THE DUTY OF THE LEARNED TRIBUNAL TO DECIDE IN THIS SITUATION. I N THE SAID JUDGMENT NOTED BY US AT PAGE 464, THE SUPREME COURT HAS OBSERVED AS FOLLOWS : 'THE INCOME-TAX APPELLATE TRIBUNAL PERFORMS A JUDIC IAL FUNCTION UNDER THE INDIAN INCOME-TAX ACT; IT IS INVESTED WITH AUTHORIT Y TO DETERMINE FINALLY ALL QUESTIONS OF FACT. THE TRIBUNAL MUST, IN DECIDING A N APPEAL, CONSIDER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. ' 11. THE TRIBUNAL MUST, IN DECIDING AN APPEAL, CONSI DER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL CONTENTIONS RAI SED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. IT IS ALSO RULED IN THE SAID JUDGMENT AT PAGE 465 THAT IF THE TRIBUNAL DOES NOT DISCHARGE THE DUTY IN THE MANNER AS ABOVE THEN IT SHALL BE ASSUMED THE JUDGME NT OF THE TRIBUNAL SUFFERS FROM MANIFEST INFIRMITY. 12. TAKING INSPIRATION FROM THE SUPREME COURT OBSER VATIONS WE ARE CONSTRAINED TO HOLD IN THIS MATTER THAT THE TRIBUNAL HAS NOT ADJUDICATE D UPON THE CASE OF THE ASSESSEE IN THE LIGHT OF THE EVIDENCE AS FOUND BY THE COMMISSIONER OF INCOME-TAX (APPEALS). WE ALSO FOUND NO SINGLE WORD HAS BEEN SPARED TO UP SET THE FACT FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT THERE ARE MATERIALS TO SH OW THE CASH CREDIT WAS RECEIVED FROM VARIOUS PERSONS AND SUPPLY AS AGAINST CASH CRE DIT ALSO MADE. 13. HENCE, THE JUDGMENT AND ORDER OF THE TRIBUNAL I S NOT SUSTAINABLE. ACCORDINGLY, THE SAME IS SET ASIDE. WE RESTORE THE JUDGMENT AND ORDE R OF THE COMMISSIONER OF INCOME- TAX (APPEALS). THE APPEAL IS ALLOWED. 24. WHEN A QUESTION AS TO THE CREDITWORTHINESS OF A CREDITOR IS TO BE ADJUDICATED AND IF THE CREDITOR IS AN INCOME TAX ASSESSEE, IT I S NOW WELL SETTLED BY THE DECISION OF THE CALCUTTA HIGH COURT THAT THE CREDITWORTHINES S OF THE CREDITOR CANNOT BE 14 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 DISPUTED BY THE AO OF THE ASSESSEE BUT THE AO OF TH E CREDITOR. IN THIS REGARDS OUR ATTENTION WAS DRAWN TO THE DECISION OF THE HON'BLE HIGH COURT, CALCUTTA IN THE CIT, KOLKATA-ILL VERSUS DATAWARE PVT LTD ITAT NO. 263 OF 2011 DATE: 21ST SEPTEMBER, 2011 WHEREIN THE HONBLE HIGH COURT HELD AS FOLLOWS: IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSI NG OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS AC COUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFT ER GETTING THE PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESS ED UNDER THE ACT, THE ASSESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CR EDITOR AS TO THE GENUINENESS' OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN A CCEPTED BY THE ASSESSING OFFICER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, T HE ASSESSING OFFICER HIMSELF COULD NOT ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMI TTED BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OFFICER OF THE ASSESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR A ND THE GENUINENESS' OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX (A PPEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH ARE REQU IRED TO BE FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIN D NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AU THORITIES. 25. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HON'BLESUPREME COURT WHILE DISMISSING SLP IN THE CASE OF LOVELY EXPORTS AS HAS BEEN REPORTED AS JUDGMENT DELIVERED BY THE CTR AT 216 CTR 295: 'CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1961? WE FIND NO MERIT IN TH IS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY I S RECEIVED BY THE ASSESSEE- COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GI VEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPU GNED JUDGMENT. 26. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT WHILE RELYING ON THE CASE OF LOVELY EXPORTS, IN THE APPEAL OF CIT, KOLKATA-IV VS ROSEBERRY MERCANTILE (P) LTD., ITAT NO. 241 OF 2 010 DATED 10- 01- 2011 HAS HELD: 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTERED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTE D MONEY AND THE LD. CIT (A) OUGHT TO HAVE HELD THAT THE ASSESSEE HAD NOT ESTABLISHED THE GENUINENESS OF THE TRANSACTION. ' 15 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 IT APPEARS FROM THE RECORD THAT IN THE ASSESSMENT P ROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATIO N HAD BROUGHT RS. 4, 00, 000/- AND RS.20,00,000/- TOWARDS SHARE CAPITAL AND SHARE PREM IUM RESPECTIVELY AMOUNTING TO RS.24,00, 000/- FROM FOUR SHAREHOLDERS BEING PRIVAT E LIMITED COMPANIES. THE ASSESSING OFFICER ON HIS PART CALLED FOR THE DETAILS FROM THE ASSESSEE AND ALSO FROM THE SHARE APPLICANTS AND ANALYZED THE FACTS AND ULTIMATELY OB SERVED CERTAIN ABNORMAL FEATURES, WHICH WERE MENTIONED IN THE ASSESSMENT ORDER. THE A SSESSING OFFICER, THEREFORE, CONCLUDED THAT NATURE AND SOURCE OF SUCH MONEY WAS QUESTIONABLE AND EVIDENCE PRODUCED WAS UNSATISFACTORY. CONSEQUENTLY, THE ASSE SSING OFFICER INVOKED THE PROVISIONS UNDER SECTION 68/69 OF THE INCOME TAX ACT AND MADE ADDITION OF RS.24,00,000/-. ON APPEAL THE LEARNED CIT (A) BY FOLLOWING THE DECI SION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD., R EPORTED IN (2008) 216 CTR 195 ALLOWED THE APPEAL BY HOLDING -THAT SHARE CAPITAL/PREMIUM O F RS. 24,00,000/- RECEIVED FROM THE INVESTORS WAS NOT LIABLE TO BE TREATED UNDER SECTIO N 68 AS UNEXPLAINED CREDITS AND IT SHOULD NOT BE TAXED IN THE HANDS OF THE APPELLANT C OMPANY. AS INDICATED EARLIER, THE TRIBUNAL BELOW DISMISSED THE APPEAL FILED BY THE REVENUE. AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD. [SUPRA], WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT I NVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISION IN FAVOUR OF THE ASSESS EE AND THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEAL IS DE VOID OF ANY SUBSTANCE AND IS DISMISSED. 27. OUR ATTENTION WAS DRAWN TO THE DECISION OF THE HON'BLE HIGH COURT, CALCUTTA IN THE CASE OF COMMISSIONER OF INCOME TAX VS M/S. N ISHAN INDO COMMERCE LTD DATED 2 DECEMBER, 2013 IN INCOME TAX APPEALNO.52 OF 2001 WHEREIN THE COURT HELD AS FOLLOWS: THE ASSESSING OFFICER WAS OF THE VIEW THAT THE INC REASE IN SHARE CAPITAL BY RS.52,03,500/- WAS NOTHING BUT THE INTRODUCTION OF THE ASSESSEE'S OWN UNDISCLOSED FUNDS/INCOME INTO THE BOOKS OF ACCOUNTS OF THE ASSE SSEE COMPANY. THE ASSESSING OFFICER ACCORDINGLY TREATED THE INVESTMENT AS UNEXPLAINED C REDIT UNDER SECTION 68 OF THE INCOME TAX ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFOR E THE COMMISSIONER OF INCOME TAX (APPEALS) BEING THE FIRST APPELLATE AUTHORITY AND C ONTENDED THAT THE ASSESSING OFFICER HAD NO MATERIAL TO SHOW THAT THE SHARE CAPITAL WAS THE INCOME OF THE ASSESSEE COMPANY AND AS SUCH THE ADDITION MADE BY THE ASSESSING OFFI CER UNDER SECTION 68 OF THE ACT WAS WRONG. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AF TER HEARING THE DEPARTMENT AND THE ASSESSEE COMPANY DELETED THE ADDITION OF RS. 52 , 03,500/- TO THE INCOME OF THE ASSESSEE COMPANY DURING THE ASSESSMENT YEAR IN QUES TION. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS FOUND THAT THERE WERE AS MANY AS 2155 ALLOTTEES, WHOSE NAMES, ADDRESSES AND RESPECTIVE SHARES ALLOCATION HAD BEEN DISCLOSED. THE COMMISSIONER OF INCOME TAX APPEALS, FURTHER FOU ND THAT THE ASSESSEE COMPANY RECEIVED THE APPLICATIONS THROUGH BANKERS TO THE IS SUE, WHO HAD BEEN APPOINTED UNDER THE GUIDELINES OF THE STOCK EXCHANGE AND THE ASSESS EE COMPANY HAD BEEN ALLOTTED 16 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 SHARES ON THE BASIS OF ALLOTMENT APPROVED BY THE ST OCK EXCHANGE. THE ASSESSEE COMPANY HAD DULY FILED THE RETURN OF ALLOTMENT WITH THE REGISTRAR OF COMPANIES, GIVING COMPLETE PARTICULARS OF THE ALLOTTEES. THE COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT INQUIRES HAD CONFIRMED THE EXISTENCE OF MOST OF THE SHAREHOLDERS AT THE ADDRES SES INTIMATED TO THE ASSESSING OFFICER, BUT THE ASSESSING OFFICER TOOK THE VIEW TH AT THEIR INVESTMENT IN THE ASSESSEE COMPANY WAS NOT GENUINE, ON THE BASIS OF SOME EXTRA NEOUS REASONS. THE COMMISSIONER OF INCOME TAX (APPEALS) TOOK NOTE OF THE OBSERVATIO N OF THE ASSESSING OFFICER THAT ENQUIRY CONDUCTED BY THE INCOME TAX INSPECTOR HAD R EVEALED THAT NINE PERSONS MAKING APPLICATIONS FOR 900 SHARES WERE NOT AVAILABLE AT T HE GIVEN ADDRESS AND RIGHTLY CONCLUDED THAT THE TOTAL SHARE CAPITAL ISSUED BY TH E ASSESSEE COMPANY COULD NOT BE ADDED AS UNEXPLAINED CASH CREDIT UNDER 'SECTION 68 OF THE INCOME TAX ACT. MOREOVER, IF THE NATURE AND SOURCE OF INVESTMENT BY ANY SHAREHOL DER, IN SHARES OF THE ASSESSEE COMPANY REMAINED UNEXPLAINED, LIABILITY COULD NOT B E FOISTED ON THE COMPANY. THE CONCERNED SHAREHOLDERS WOULD HAVE TO EXPLAIN THE SO URCE OF THEIR FUND. THE LEARNED COMMISSIONER ON CONSIDERING THE SUBMISS IONS OF THE, RESPECTIVE PARTIES AND CONSIDERING THE MATERIALS, FOUND THAT THE ASSES SING OFFICER HAD APPLIED THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT ARBI TRARILY AND ILLEGALLY AND IN ANY CASE WITHOUT GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF REPRESENTATION AND/OR HEARING. LEARNED TRIBUNAL AGREED WITH THE FACTUAL FINDINGS O F THE LEARNED COMMISSIONER AND ACCORDINGLY THE LEARNED TRIBUNAL DISMISSED THE APPE AL OF THE REVENUE AND AFFIRMED THE DECISION OF THE LEARNED COMMISSIONER. MR. DUTTA APPEARING ON BEHALF OF THE PETITIONERS CI TED JUDGMENT OF THE DIVISION BENCH OF THIS COURT IN COMMISSIONER OF INCOME TAX VS. RUB Y TRADERS AND EXPORTERS LIMITED REPORTED IN 236 (2003) ITR 3000 WHERE A DIVISION BE NCH OF THIS COURT HELD THAT WHEN SECTION 68 IS RESORTED TO, IT IS INCUMBENT ON THE A SSESSEE COMPANY TO PROVE AND ESTABLISH THE IDENTITY OF THE SUBSCRIBERS, THEIR CR EDIT WORTHINESS AND THE GENUINENESS OF THE TRANSACTION. THE AFORESAID JUDGMENT WAS RENDERED IN THE CONTEXT OF THE FACTUAL BACKGROUND OF THE AFORESAID CASE WHERE, DESPITE SEVERAL OPPORTUNITIES BEING GIVEN TO THE ASSESSEE, NOTHING WAS DISCLOSED ABOUT THE IDENTITY OF THE SHAREHOLDER S. IN THE INSTANT CASE, THE ASSESSEE DISCLOSED THE IDENTITY AND ADDRESS AND PARTICULARS OF SHARE ALLOCATION OF THE SHAREHOLDERS. IT WAS ALSO FOUND ON THE FACTS THAT A LL THE SHAREHOLDERS WERE IN EXISTENCE. ONLY NINE SHAREHOLDERS SUBSCRIBING TO ABOUT 900 SHA RES OUT OF 6, 12,000 SHARES WERE NOT FOUND AVAILABLE AT THEIR ADDRESSES, AND THAT TO O, IN COURSE OF ASSESSMENT PROCEEDINGS IN THE YEAR 1994, I.E., ALMOST 3 YEARS AFTER THE ALLOTMENT. BY AN ORDER DATED 2ND MAY, 2001, THIS COURT ADMITTE D THE APPEAL ON THREE QUESTIONS WHICH ESSENTIALLY CENTRE AROUND THE QUESTION OF WHE THER THE APPELLATE COMMISSIONER ERRED IN LAW IN DELETING THE ADDITION OF RS. 52, 03 , 500/- TO THE INCOME OF THE ASSESSEE AS MADE BY THE ASSESSING OFFICER. WE ARE OF THE VIEW T HAT THERE IS NO QUESTION OF LAW INVOLVED IN THIS APPEAL FAR LESS ANY SUBSTANTIAL QU ESTION OF LAW. THE LEARNED TRIBUNAL HAS CONCURRED WITH THE LEARNED COMMISSIONER ON FACTS AND FOUND THAT THERE WERE MATERIALS TO SHOW THAT THE ASSESSEE HAD DISCLOSED THE PARTICULARS OF THE SHAREHOLDERS. THE FACTUAL FINDINGS CANNOT BE INTERF ERED WITH, IN APPEAL. WE ARE OF THE VIEW THAT ONCE THE IDENTITY AND OTHER RELEVANT PART ICULARS OF SHAREHOLDERS ARE DISCLOSED, IT IS FOR THOSE SHAREHOLDERS TO EXPLAIN THE SOURCE OF THEIR FUNDS AND NOT FOR THE ASSESSEE COMPANY TO SHOW WHEREFROM THESE SHAREHOLDERS OBTAIN ED FUNDS. 17 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 28. FURTHER, OUR ATTENTION WAS DRAWN TO THE DECISI ON OF THE HON'BLE HIGH COURT, CALCUTTA IN THE CASE OF COMMISSIONER OF INCOME TAX VS M/S.LEONARD COMMERCIAL (P) LTD ON 13 JUNE, 2011 IN ITAT NO 114 OF 2011 WHE REIN THE COURT HELD AS FOLLOWS: THE ONLY QUESTION RAISED IN THIS APPEAL IS WHETHER THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL BELOW ERRED IN LAW IN DE LETING THE ADDITION OF RS.8,52,000/-, RS. 91,50,000/- AND RS. 13,00,000/- MADE BY THE ASS ESSING OFFICER ON ACCOUNT OF SHARE CAPITAL, SHARE APPLICATION MONEY AND INVESTMENT IN HTCCL RESPECTIVELY. AFTER HEARING MD. NIZAMUDDIN, LEARNED ADVOCATE APPE ARING ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE MATERIALS ON RECORD, WE FIND THAT ALL SUCH APPLICATION MONEY WERE RECEIVED BY THE ASSESSEE BY WAY OF ACCOU NT PAYEE CHEQUES AND THE ASSESSEE ALSO DISCLOSED THE COMPLETE LIST OF SHAREHOLDERS WI TH THEIR COMPLETE ADDRESSES AND GIR NUMBERS FOR THE RELEVANT ASSESSMENT YEARS IN WHICH SHARE APPLICATION WAS CONTRIBUTED. IT FURTHER APPEARS THAT ALL THE PAYMENTS WERE MADE BY THE APPLICANTS BY ACCOUNT PAYEE CHEQUES. IT APPEARS FROM THE ASSESSING OFFICERS ORDER THAT H IS GRIEVANCE WAS THAT THE ASSESSEE WAS NOT WILLING TO PRODUCE THE PARTIES WHO HAD ALLE GEDLY ADVANCED THE FUND. IN OUR OPINION, BOTH THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL BELOW WERE JUSTIFIED IN HOLDING THAT AFTER DISCLOSURE OF THE FULL PARTICULARS INDICATED ABOVE, THE INITIAL ONUS OF THE ASSESSEE WAS SHIFTED AND IT WAS THE DUTY OF THE ASSESSING OFFICER TO ENQUIRE WHETHER THOSE PARTICULARS WERE CORRECT OR N OT AND IF THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PARTICULARS SUPPLIED WERE INSU FFICIENT TO DETECT THE REAL SHARE APPLICANTS, TO ASK FOR FURTHER PARTICULARS. THE ASSESSING OFFICER HAS NOT ADOPTED EITHER OF THE AFORESAID COURSES BUT HAS SIMPLY BLAMED THE ASSESSEE FOR NOT PRODUCING THOSE SHARE A PPLICANTS. IN OUR VIEW, IN THE CASE BEFORE US SO LONG THE ASSE SSING OFFICER WAS UNABLE TO ARRIVE AT A FINDING THAT THE PARTICULARS GIVEN BY THE ASSESSE E WERE FALSE, THERE WAS NO SCOPE OF ADDING THOSE MONEY UNDER SECTION 68 OF THE INCOME- TAX ACT AND THE TRIBUNAL BELOW RIGHTLY HELD THAT THE ONUS WAS VALIDLY DISCHARGED. WE, THUS, FIND THAT BOTH THE AUTHORITIES BELOW, ON CONSIDERATION OF THE MATERIALS ON RECORD, RIGHTLY APPLIED THE CORRECT LAW WHICH ARE R EQUIRED TO BE APPLIED IN THE FACTS OF THE PRESENT CASE AND, THUS, WE DO NOT FIND ANY REAS ON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT BASED ON MATERIALS ON RECORD. THE APPEAL IS, THUS, DEVOID OF ANY SUBSTANCE AND IS DISMISSED SUMMARILY AS IT DOES NOT INVOLVE ANY SUBSTANTIAL QUESTION OF LAW. 29. SO, IN THE LIGHT OF THE CASE LAWS DISCUSSED, LET US SEE WHETHER THE ASSESSEE HAS BEEN ABLE TO DISCHARGE THE PRIMARY ONUS ON IT TO PR OVE THE NATURE AND SOURCE OF THE CREDIT FOUND IN THE BOOKS OF THE ASSESSEE BY PROVIN G THE IDENTITY, CREDITWORTHINESS AND 18 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 GENUINENESS OF THE PARTIES AND THE SHARE TRANSACTIO N IN QUESTION. IN THIS RESPECT IT WAS BROUGHT TO OUR NOTICE THAT THESE TWENTY ONE (21) SH ARE SUBSCRIBING COMPANIES WERE REGULARLY ASSESSED TO TAX AND THE PAYMENTS IN QUEST IONS WERE MADE THROUGH THE BANK ACCOUNTS WHICH FACT IS DISCERNABLE ON A PERUSAL OF THE COPY OF BANK STATEMENT DEPICTING TRANSACTION; AND WHEN CALLED UPON BY THE AO DURING ASSESSMENT PROCEEDINGS [ DURING THE FIRST ROUND] AND ALSO DURING REMAND PROCEEDINGS [ IN THE FORM OF ADDITIONAL EVIDENCE], THE ASSESSEE HAD FURNISHED THE REQUISITE DOCUMENTARY EVIDENCES TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION I.E, THE ASSESSEE HAD FILED THE SHARE APPLICANTS AUDITED FINANCIAL STATEMENTS AND INCOME-TAX ACKNOWLEDGEMENT FOR FILING OF RETURN FOR A.Y 2009-10 ALONG WITH THE PAN DETAILS AND THE JURISDICTION OF AO UNDER WHOM THEY WERE ASSESSED AND THE SCRUTINY ASSESSMENT ORDERS PASSED U/S 143(3) OF THE ACT IN THE CASE OF FOURTEEN (14) SHAR E SUBSCRIBERS OUT OF TOTAL TWENTY ONE (21) SHARE SUBSCRIBERS AND IN RESPECT OF THE OTHER SEVEN (7) SHARE SUBSCRIBERS, INTIMATION BY THE DEPARTMENT ACCEPTING THEIR RESPEC TIVE RETURN OF INCOME U/S 143(1) OF THE ACT WERE FILED. THUS, THE ASSESSEE STATES THAT IT HAD DISCHARGED ITS ONUS TO PROVE THE IDENTITY OF THE SHARE SUBSCRIBERS. ACCORDING TO ASS ESSEE FROM A PERUSAL OF THE BANK STATEMENTS FILED IT IS DISCERNIBLE THAT THE TRANSAC TIONS I.E. SHARE CAPITAL AND PREMIUM WERE TRANSFERRED THROUGH PROPER BANKING CHANNEL AND ACCORDING TO ASSESSEE IT WAS NOT THE CASE OF THE A.O THAT THERE WAS ANY CASH DEPOSIT PRIOR TO THE ISSUE OF CHEQUES TO THE ASSESSEE COMPANY. THUS THE ASSESSEE CLAIMS THAT THE GENUINENESS OF THE TRANSACTION CANNOT BE DISPUTED. AND IN ORDER TO PROVE THE CREDI TWORTHINESS OF THE SHARE SUBSCRIBERS, THE LD. A.R DREW OUR ATTENTION TO AUDITED BALANCE S HEET OF THE SHARE SUBSCRIBING COMPANIES AND CONTENDED THAT SHAREHOLDERS POSSESS S UFFICIENT CAPITAL AND RESERVES OUT OF WHICH SHARE SUBSCRIPTION AMOUNTS WERE PAID THROU GH ACCOUNT PAYEE CHEQUES. SO ACCORDING TO ASSESSEE, IT HAS DISCHARGED THE BURDEN OF PROOF CASTED UP ON BY SECTION 68 OF THE ACT IN RESPECT OF SHARE CAPITAL & PREMIUM IT COLLECTED. AND ACCORDING TO ASSESSEE, WITHOUT FINDING ANY INFIRMITY IN THE DOCU MENTS PRODUCED BY THE ASSESSEE IN RESPECT OF IDENTITY, CREDITWORTHINESS AND GENUINENE SS OF THE TRANSACTION, NO ADDITION U/S 68 OF THE ACT WAS WARRANTED AND THE LD CIT(A) ERRED IN CONFIRMING IT. 19 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 30. WE ALL READY HAD RE-PRODUCED SECTION 68 OF THE ACT AND HAS GONE THROUGH THE JUDICIAL PRECEDENTS (SUPRA). AND WE NOTE THAT WHILE INTERFERING WITH THE FIRST RE- ASSESSMENT ORDER DATED 12.5.2011, THE LD CIT WHILE EXERCISING HIS REVISIONAL POWERS U/S 263 OF THE ACT, HAD MAINLY FOUND FAULT WITH THE ITO WARD 2(1) NOT TO HAVE LOOKED IN TO THE SOURCE OF SOURCE OF THE SHARE SUBSCRIPTION, WHICH REQUIREMENT OF LA W CAME IN TO FORCE ONLY AFTER THE INSERTION OF PROVISO BY FI NANCE ACT 2012 W.E.F. 01.04.2013 IN SECTION 68 OF THE ACT WHICH IS APPLICABLE THEREFORE FROM AY 2013-14 ONWARDS AND FOR READY REFERENCE THE AFORESAID PROVISO IS ALSO REPR ODUCED AS UNDER [ THOUGH NOT APPLICABLE TO THIS ASSESSMENT YEAR]: CASH CREDITS SECTION 68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINI ON OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. '[PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY ( N OT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED), AND THE SUM SO CREDI TED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EXPLANATION OFFERED BY SUCH ASSESSEE-COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS - (A) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUCH CRE DIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALSO OFFERS AN EXPLANATION AB OUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED; AND (B) SUCH EXPLANATION IN THE OPINION OF THE ASSESSIN G OFFICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY:' 31. WE NOTE THAT EVEN THOUGH THE PARLIAMENT HAS INS ERTED BY THE FINANCE ACT, 2012, W.E.F. 01.04.2013 THE PROVISO TO SECTION 68 OF THE ACT, WE MUST BEAR IN MIND THAT THERE IS NO CHANGE OR AMENDMENT IN THE SUBSTANTIVE PROVIS ION OF SECTION 68 OF THE ACT WHEREIN IF ANY SUM IS FOUND BY THE AO TO HAVE BEEN CREDITED IN THE BOOKS OF AN ASSESSEE IN THE RELEVANT FINANCIAL YEAR, THEN WHEN CALLED UPON BY HIM (AO) TO THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE CR EDIT; AND PURSUANT TO WHICH IF THE ASSESSEE FAILS TO EXPLAIN TO THE SATISFACTION OF AO THE NATURE AND SOURCE OF THE CREDIT, THEN THE AO MAY TREAT THE CREDIT AS INCOME CHARGEAB LE TO TAX. IN OTHER WORDS, IF THE 20 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 ASSESSEE IS ABLE TO EXPLAIN THE NATURE AND SOURCE O F THE CREDIT TO THE SATISFACTION OF AO, THEN AO CANNOT USE THIS PROVISION TO CHARGE THE CRE DIT APPEARING IN THE BOOKS OF THE ASSESSEE AS INCOME FOR THE PURPOSE OF TAXATION UNDE R THE ACT. IT IS SETTLED POSITION OF LAW THAT SATISFACTION CONTEMPLATED IN SECTION 68 OF THE ACT IS THAT OF A REASONABLE PRUDENT PERSON (AO) AND NOT THAT OF AN UNREASONABLE PERSON. SO, WHEN THE AO CALLS UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE CREDIT FOUND IN ASSESSEES BOOK, THEN INITIAL BURDEN IS ON THE ASSESSEE TO BRI NG MATERIAL ON RECORD TO SHOW THE NATURE AND SOURCE OF THE CREDIT I.E. IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN QUESTION. AND ONCE AN ASSESSEE IS A BLE TO DISCHARGES THE INITIAL BURDEN WHICH LIES UPON IT, THEN THE ONUS SHIFTS TO THE AO TO DISPROVE/REBUT THE MATERIAL ADDUCED BY THE ASSESSEE TO SUBSTANTIATE THE NATURE AND SOURCE OF THE CREDIT TRANSACTION. AND IF THE AO IS NOT ABLE TO DISPROVE/REBUT THE EVI DENCE BROUGHT ON RECORD BY THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF THE CRED IT ENTRY, THEN SECTION 68 OF THE ACT CANNOT BE USED BY THE AO TO CHARGE THE CREDIT APPEA RING IN THE BOOKS OF THE ASSESSEE AS INCOME FOR TAXATION. THIS POSITION OF LAW WE NOTE REMAINS THE SAME EVEN AFTER THE INSERTION OF FINANCE ACT 2012, WHEREIN ADDITIONAL R EQUIREMENT/BURDEN IS BROUGHT IN BY THE PARLIAMENT IN THE CASES OF AN ASSESSEE WHICH IS A CORPORATE ENTITY ( NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTER ESTED ) CLAIMS TO HAVE RECEIVED SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMI UM OR ANY SUCH AMOUNT, THEN WITH EFFECT FROM 01.04.2013 , WHILE GIVING THE EXPLANATION TO THE AO REGARDING THE NATURE AND SOURCE OF SUCH SUM CREDITED IN ITS BOOKS, THE S HARE SUBSCRIBERS HAS TO OFFER THE PROOF OF SOURCE OF SOURCE OF THE SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM . SO, WE NOTE THAT TILL AY 2012-13, THE REQUIREMENT OF LAW AS PER SECTION 68 OF THE ACT WAS THAT WHEN THERE IS A CREDIT ENTRY IN TH E BOOKS, THEN ASSESSEE WAS REQUIRED TO SATISFY THE AO IN RESPECT OF THE NATURE AND SOURCE (I.E. FIRST SOURCE FROM WHICH IT RECEIVED) AND THAT POSITION OF LAW REMAINS IN FORCE TILL NOW ALSO, EXCEPT THAT AFTER 01.04.2013 (I.E. AY 2013-14) ONWARDS IT IS APPLICAB LE WHEN AN ASSESSEE COMPANY ( NOT PUBLIC COMPANY ) COLLECT SHARE APPLICATION MONEY, SHARE CAPITAL, S HARE PREMIUM THEN AN ADDITIONAL BURDEN IS IMPOSED BY THE FIRST PROVISO TO BRING TO THE NOTICE OF AO THE SOURCE OF SOURCE OF THE CREDIT ENTRY I.E. SOURCE OF THE SHARE APPLICANT WHICH HAD BEEN 21 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 INVESTED IN THE ASSESSEE COMPANY. IN OTHER WORDS F ROM AY 2013-14 ONWARDS, IN THE EVENT IF AN ASSESSEE COMPANY WHEN CALLED UPON BY TH E AO TO EXPLAIN THE NATURE OF THE CREDIT IN ITS BOOKS CLAIMS THAT THE CREDIT ENTRY IS SHARE APPLICATION MONEY, SHARE CAPITAL AND SHARE PREMIUM, THEN THE ADDITIONAL REQUIREMENT OF LAW AS PER THE PROVISO TO SECTION 68 OF THE ACT KICKS IN AND SHARE SUBSCRIBER SHOULD BE ABLE TO SHOW THE SOURCE FROM WHICH IT WAS ABLE TO INVEST IN THE ASSESSEE COMPANY . AND IF THE SOURCE OF SOURCE OF SHARE APPLICATION/CAPITAL/PREMIUM IS SHOWN TO AO AN D IF HE IS SATISFIED WITH THE EXPLANATION, THEN THE DEEMING PROVISION WILL NOT AP PLY. THIS PROVISO IS NOT APPLICABLE IN ASSESSEES CASE SINCE THE RELEVANT ASSESSMENT YE AR IS AY 2009-10 AND WAS ONLY DISCUSSED FOR COMPLETENESS SINCE LD CIT WHILE SETTI NG ASIDE THE FIRST RE-ASSESSMENT ORDER DIRECTED THE AO TO LOOK BEYOND THE FIRST SOUR CE OF CREDIT, WHICH THE ASSESSEE WAS NOT OBLIGED TO DO AS FAR AS THE LAW WAS DURING AY 2 009-10. HOWEVER WE NOTE THAT ASSESSEE HAD FILED CONFIRMATION OF SOURCE OF SOURCE AND IT IS EVIDENT FROM THE BANK STATEMENT OF THE SHARE SUBSCRIBERS WHICH WILL BE DI SCUSSED (INFRA). 32. SO, IN THIS RELEVANT ASSESSMENT YEAR, AS NOTED THE ASSESSEE COMPANY HAD ISSUED SHARE CAPITAL TO TWENTY ONE (21) SHARE HOLDING COMP ANIES, SHARES AT A FACE VALUE OF RS.10/- EACH WITH A PREMIUM OF RS.390/- WHEREIN THE A.O IN THE FIRST ROUND U/S 147/143(3) OF THE ACT VIDE ORDER DATED 12.5.2011 HA S ACCEPTED THE SHARE CAPITAL AND PREMIUM OF ALL TWENTY ONE (21) SHARE HOLDING COMPAN IES. HOWEVER THE LD CIT PURSUANT TO SECTION 263 ORDER DATED 7.3.2014 HAS SE T ASIDE THE AOS ORDER DATED 12.5.2011 AND DIRECTED TO FRAME DE-NOVO ASSESSMENT AFTER PROPERLY VERIFYING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE S HARE TRANSACTION. PURSUANT TO THE LD CIT ORDER, THE AO [ITO WARD 6(1)] HAD STATED TO HAV E ISSUED NOTICE U/S 142 (1) ON 3.2.2015 TO ASSESSEE AND SINCE ACCORDING TO AO THER E WAS NON-COMPLIANCE ON THE PART OF ASSESSEE TO IT, HE ISSUED SHOW CAUSE NOTICE TO A SSESSEE COMPANY GIVING LAST OPPORTUNITY ON 24.03.2015 AND ACCORDING TO AO SINCE NO-COMPLIANCE WAS MADE BY ASSESSEE/SHARE SUBSCRIBERS HE DREW ADVERSE VIEW AGA INST THE SHARE TRANSACTION AND MADE AN ADDITION OF RS 11,10,00,000/-. IT HAS BEEN POINTED OUT BY THE LD. AR THAT IN THE SECOND ROUND THE AO HAS PASSED THE ORDER MAKING ADDITION WITHIN LESS THAN 45 DAYS AFTER ISSUING NOTICE U/S 142(1), WHICH THE ASSESSEE STATES TO HAVE NOT RECEIVED AND THE 22 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 ASSESSEE RECEIVED AT THE FAG END ON 17.3.2015 SCN W HICH WAS DULY REPLIED ON 24.3.2015 AND WITHOUT ASKING/CONFRONTING THE ASSESS EE AND WITHOUT FINDING ANY INFIRMITY OF THE DOCUMENTS AO PASSED THE SECOND RE- ASSESSMENT ORDER ON THE NEXT DAY I.E, 25.3.2015. IT WAS BROUGHT TO OUR NOTICE THAT D URING THE FIRST ROUND, THE ASSESSEE/SHARE SUBSCRIBERS HAD FILED ALL THE DOCUME NTS TO SUBSTANTIATE THEIR [SHARE SUBSCRIBERS] IDENTITY, CREDITWORTHINESS ALONG WITH THE GENUINENESS OF THE TRANSACTION WERE ALREADY FILED BEFORE THE AO DURING THE FIRST R OUND [ SO IT IS AVAILABLE IN THE ASSESSMENT FOLDER] AND WHICH WAS INVESTIGATED BY TH E AO IN THE FIRST ROUND BY ISSUING NOTICES U/S 133(6), WHICH WOULD REVEAL ESPECIALLY T HE SOURCE OF SOURCE OF THE SHARE SUBSCRIBERS TO INVEST IN THE ASSESSEES SHARE CAPI TAL AND PREMIUM I.E. THE BANK STATEMENT OF THE SHARE SUBSCRIBERS WERE FILED WHICH CLEARLY SHOWS THE SOURCE OF MONEY FROM WHERE THOSE SHARE SUBSCRIBERS COULD INVEST/SUB SCRIBE IN ASSESSEE COMPANY IS CLEARLY DISCERNIBLE. THUS ACCORDING TO LD AR, EVEN THOUGH THE SOURCE OF SOURCE REQUIREMENT OF LAW WAS NOT REQUIRED IN THIS RELEVAN T ASSESSMENT YEAR, STILL ASSESSEE FILED DOCUMENTS/CONFIRMATION ABOUT THEIR SOURCE OF SOURCE . AND SINCE THE SOURCE OF SOURCE OF THE SUM OF MONEY CREDITED IN THE ASSESSEES BOO KS FOR SHARE SUBSCRIBING (CAPITAL AND PREMIUM) HAS BEEN SHOWN TO THE A.O, EV EN THE PROVISO TO SECTION 68 STANDS SATISFIED, THOUGH IT WAS NOT THE REQUIREMENT OF LAW AND IT WAS ONLY TO SATISFY THE LD CITS ORDER U/S 263 THE ASSESSEE/SHARE SUBSCRIBE RS FILED THESE ADDITIONAL DOCUMENTS. THEREFORE, ACCORDING TO LD AR, IN THE AFORESAID FAC TS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED, IT CANNOT BE HELD THAT THE ASSESSEE HAD NOT DISCHARGED ITS ONUS OF PROVING THE SOURCE OF SOURCE OF THE SHARE CAPITAL AND PREMIUM AS DIRECTED BY LD CIT TO ENQUIRE BY ORDER DATED 7.3.2014. 33. WE NOTE THAT IN THIS RELEVANT AY 2009-10, THE ASSESSEE RECEIVED SHARE CAPITAL AND PREMIUM FROM THE FOLLOWING TWENTY ONE (21) CORP ORATE ENTITIES AND THE DETAILS ARE REVEALED FROM THE CHART BELOW : 23 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 -10 24 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 -10 34. IT IS NOTED THAT THESE ARE CORPORATE ENTITIES WHICH FILES REGULARLY ITRS AND ARE ASSESSED TO TAX, THEIR PAN AND CIN AND THE FACT OF THEM FILING THE ITR IS AS BELOW: 25 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 THESE ARE CORPORATE ENTITIES WHICH FILES REGULARLY ITRS AND ARE ASSESSED TO TAX, THEIR PAN AND CIN AND THE FACT OF THEM FILING THE ITR IS AS BELOW: ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 -10 THESE ARE CORPORATE ENTITIES WHICH FILES REGULARLY ITRS AND ARE ASSESSED TO TAX, THEIR PAN AND CIN AND THE FACT OF THEM FILING THE ITR IS AS BELOW: 35. FURTHER IT IS NOTED THAT AMONG THE TWENTY ONE (21) SHARE SUBSCRIBERS/HO LDERS, FOURTEEN (14) SHARE HO LDER HAS UNDERGONE SCRUTINY ASSESSMENT U/S 143(3) O F THE ACT, THE DETAILS OF THEM ARE AS UNDER: 36. FROM THE AFORESAID DETAILS, IT IS NOTED THAT THE ID ENTITY OF THE AFORESAID SHARE SUBSCRIBERS/HOLDERS CANNOT BE DOUBTED. 37. COMING TO THE CREDITWORTHIN EVIDENT FROM THE FOLLOWING FACTS 26 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 THAT AMONG THE TWENTY ONE (21) SHARE SUBSCRIBERS/HO LDERS, LDER HAS UNDERGONE SCRUTINY ASSESSMENT U/S 143(3) O F THE ACT, THE DETAILS OF THEM ARE AS UNDER: FROM THE AFORESAID DETAILS, IT IS NOTED THAT THE ID ENTITY OF THE AFORESAID SHARE SUBSCRIBERS/HOLDERS CANNOT BE DOUBTED. COMING TO THE CREDITWORTHIN ESS, WE NOTE THE FOLLOWING DETAILS WHICH IS EVIDENT FROM THE FOLLOWING FACTS SHOWN IN THE CHART BELOW: ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 -10 THAT AMONG THE TWENTY ONE (21) SHARE SUBSCRIBERS/HO LDERS, LDER HAS UNDERGONE SCRUTINY ASSESSMENT U/S 143(3) O F THE ACT, FROM THE AFORESAID DETAILS, IT IS NOTED THAT THE ID ENTITY OF THE AFORESAID SHARE ESS, WE NOTE THE FOLLOWING DETAILS WHICH IS 27 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 -10 28 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009 -10 29 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 38. SO, FROM A PERUSAL OF THE ABOVE CHART, WE NOTE THAT THE ASSESSEE AND THE SHAREHOLDERS HAVE BROUGHT TO THE NOTICE OF AO&CIT(A ) THAT THEY (SHARE SUBSCRIBERS) HAVE ENOUGH NET WORTH TO INVEST IN THE ASSESSEE COM PANY AND MOREOVER THE SHARE SUBSCRIBERS HAVE ALSO FILED THE SOURCE FROM WHICH THEY SUBSCRIBED TO SHARES OF ASSESSEE ( BANK STATEMENT, AUDITED BALANCE SHEET, CONFIRMATION ETC ). THUS THE ASSESSEE HAD DISCHARGED THE ONUS ON IT ABOUT THE CREDITWORTH INESS OF THE SHARE- HOLDERS. SO WE NOTE THAT THE SOURCE OF THE INVESTMENTS I.E., SOURC E OF SOURCE OF SHARE SUBSCRIBERS TO SUBSCRIBE FOR SHARE PREMIUM IN ASSESSEES COMPANY A S REQUIRED BY PROVISO TO SECTION 68 OF THE ACT STANDS SATISFIED SINCE IT IS CLEARLY DISCERNIBLE FROM THE BANK STATEMENT & CONFIRMATION FILED IN THE PB FILED. THESE BANK STAT EMENTS REVEALED THAT THE SHARE CAPITAL AND PREMIUM HAVE BEEN SUBSCRIBED BY THEM TH ROUGH BANKING CHANNEL (NEFT OR CHEQUE) WHICH GOES ON TO SHOW THAT THE ASSESSEE HAS DISCHARGED THE ONUS IN RESPECT OF GENUINENESS OF THE TRANSACTION. AND WE NOTE THAT REVENUE HAS NOT BROUGHT ON RECORD ANY MATERIAL TO CHALLENGE THE VERACITY OF THE DOCUMENTS AS DISCUSSED SUPRA. MOREOVER, BEFORE THE AO COULD HAVE BRANDED THESE SH ARE SUBSCRIBERS AS UN-WORTHY OF CREDIT, THE AO/LD CIT(A) OUGHT TO HAVE CONDUCTED TH E EXERCISE AS MANDATED BY THE JURISDICTIONAL HONBLE HIGH COURT IN THE CASE OF DA TA WARE LTD, WHICH THE AO IN THIS CASE HAS NOT DONE, SO NO ADVERSE VIEW IN RESPECT OF CREDITWORTHINESS COULD HAVE BEEN TAKEN AGAINST THEM. SO WE NOTE THAT THE ASSESSEE HA S DISCHARGED THE BURDEN ON IT ABOUT THE CREDITWORTHINESS OF THE SHAREHOLDERS AND BEFORE WE PART, FOR COMPLETENESS, WE WOULD LIKE TO DISCUSS/EXAMINE ABOUT EACH SHARE S UBSCRIBER TOTALLING TWENTY ONE (21) AS FOLLOWS: I) WE NOTE FROM PAGES 71 TO 89 OF THE PAPER BOOK WH EREIN THE DETAILS OF M/S KARNIMATA COMMERCE PVT. LTD. IS GIVEN. THIS COMPANY WAS INCORPORATED ON 01/10/1996 AND IS HAVING COMPANY IDENTIFICATION NUM BER U51909WB1996PTC081544. THIS COMPANY IS HAVING PAN A ABCK 1656 J. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RES ERVES AND SURPLUS OF RS. 23,69,70,631/- AS ON 31/03/2009. WE NOTE THAT THIS COMPANY INVESTED A SUM OF RS. 34,00,000/- IN THE ASSESSEE COMPANY. THE SHARE APPL ICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN 30 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMEN T IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DETAILS FILED IN THE PAPER BOOK. (I.A) THE LD. AR ALSO TOOK PAINS TO DRAW OUR ATTEN TION TO RECORDS ON THE PRESENT STATUS OF THIS COMPANY. AS PER RECORDS, THI S COMPANY IS MANAGED BY MR. SUNIL KUMAR AGARWAL AND MR. MITHLESH KUMAR PATEL. T HE COMPANY IS A REGISTERED NBFC WITH RBI AND SHARE SUBSCRIBER IS REGULAR IN ST ATUTORY COMPLIANCE. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTEREST IN IRON & STEEL, INFRASTRUCTURE AND REAL ESTATE. THE REGISTERED OFFICE OF THE COMPANY I S SITUATED AT 9/12, LAL BAZAR STREET, BLOCK-A, 1ST FLOOR, ROOM NO.16, KOLKATA-700001. THE TOTAL REVENUE BY INTEREST FOR THE YEAR ENDED ON 31.03.2019 IS RS. 24,14,957 (PAGE NO. 770-789 IN PB). II) IN RESPECT OF M/S. CHIRAG TREXIM PVT. LTD., THE LD. AR DREW OUR ATTENTION TO PAGE 90 TO 105 OF THE PAPER BOOK FROM WHERE WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 01/08/2008 AND IS HAVING COMPAN Y IDENTIFICATION NUMBER U51909WB2008PTC128132. THIS COMPANY IS HAVING PAN A ADCC4340F. THE COMPANY FILED ITS RETURN OF INCOME FOR AY 2009-10 B EFORE ITO WARD 6(1), KOLKATA (SAME ITO OF THE APPELLANT). THIS COMPANY WAS HAVIN G A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 19,94,00,376/- AS ON31/ 03/2009. WE TOOK NOTE THAT THE COMPANY HAVE INVESTED THE SUMS OF RS.41,00,000/- AN D RS.40,00,000 IN TWO TRANCHES IN THE APPELLANT COMPANY. THE SHARE APPLICATIONS WE RE MADE BY ACCOUNT PAYEE CHEQUES. THE COPY OF THE BANK STATEMENT OF THE COMP ANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (II.A) THE LD. AR ALSO TOOK PAINS TO DRAW OUR ATTE NTION TO RECORDS ON THE PRESENT STATUS OF THIS COMPANY. AS PER RECORDS, THI S COMPANY IS MANAGED BY MR. KAMAL AGARWAL AND MR. ANKIT TODI. THE BUSINESS GROU P OF THE COMPANY IS HAVING 31 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 INTEREST IN LEASING AND HIRE PURCHASE. THE REGISTER ED OFFICE OF THE COMPANY IS SITUATED AT 9/12, LAL BAZAR STREET, 3RD FLOOR, BLOC K-E, KOLKATA-700001. THE TOTAL REVENUE FOR THE YEAR ENDED ON 31.03.2019 IS RS. 60, 000. (PAGE NO. 790-811 IN PB) (III) IN RESPECT OF M/S. TOUCHSTONE SUPPLIERS PRI VATE LIMITED, OUR ATTENTION WAS DRAWN BY THE LD. AR TO PAGES 108 TO 123OF THE P APER BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 29/08/2008 AND IS HAVING COMPANY IDENTIFICATION NUMBER U51909WB2008PTC128931. THIS COMPANY IS HAVIN G PAN: AADCT0150C. THIS COMPANY FILED ITS RETURN OF INCOME FOR AY 2009-10 BEFORE ITO WARD 4(1), KOLKATA. WE NOTE THAT THIS COMPANY WAS H AVING A PAID UP , CAPITAL WITH FREE RESERVES AND SURPLUS OF RS.37,49,01,426/- AS O N 31/03/2009 AND HAS INVESTED THE SUMS OF RS.30,00,000/- AND RS.39,00,000/- IN TWO TR ANCHES IN THE APPELLANT COMPANY. THE SHARE APPLICATIONS WERE MADE BY ACCOUNT PAYEE C HEQUES. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE P APER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DE POSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHAR E APPLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCU MENTS FILED IN THE PAPER BOOK. (III.A) THE LD. AR TOOK OUR ATTENTION TO THE PRES ENT STATUS OF THIS COMPANY. THIS COMPANY IS MANAGED BY MR. CHINTAN MAHESHBHAI N ANDRAJOG AND MR. VINOD. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTERES T IN INVESTMENTS AND FINANCIAL ACTIVITIES. THE REGISTERED OFFICE OF THE COMPANY IS SITUATED AT SY NO-599, PLOT NO- 189 T.P.7, SHOP NO-7, MEZZANINE FLOOR, RING ROAD, S URAT-395002. THE TOTAL REVENUE FOR THE YEAR ENDED ON 31.03.2019 IS RS. 7.4 1 LAC. (PAGE NO. 812-836 IN PB) (IV) THE LD. AR DRAW OUR ATTENTION TO PAGES 124 T OL37 OF THE PAPER BOOK WHEREIN WE NOTE THAT M/S ALLIANCE DEALCOMM PRIVATE LIMITED WAS INCORPORATED ON 16/10/2008 AND IS HAVING COMPANY IDENTIFICATION NUM BER U51101WB2008PTC130015. THIS COMPANY IS HAVING PAN A AHCA3846Q. THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009 -10 BEFORE ITO WARD 4(3), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 11,97,00,504/- AS ON 31/03/2009. THE COMPANY HA S INVESTED A SUM OF 32 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 RS.30,00,000/-IN THE APPELLANT COMPANY. THE SHARE A PPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMEN T IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (IV.A) THE LD. AR ALSO TOOK PAINS TO DRAW OUR ATT ENTION TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER. ALLIANCE DEALCOM PVT LTD IS MANAGED BY MISS. SHASHI SONTHALIA, MR. OM PRAKASH SONTHALIA AND MR. VANDAN CHURIWAL. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTEREST IN BIOTECH, AGRO BASED INDUSTRY, INFRASTRUCTURE DEVELOPMENT AND REAL ESTATE. THE REGISTERED OFFICE OF THE COMPANY IS SITUATED AT 29, LALA LAJPAT RAI SARANI, 4TH FLOOR, KOLKATA-700020. THE TOTAL REVENUE FOR THE YEAR ENDED ON 31.03.2019 IS RS. 46.15 LAC. THE COMPANYS INVESTMENT IN A PARTNERSHIP FIRM AS PARTNER IS RS. 1413.00 LAC, WHICH IS ALSO E NGAGED IN AGRO BUSINESS (PAGE NO. 837-864 IN PB) . (V) IN RESPECT OF M/S. MASHAAL SUPPLIERS PVT. LTD . , THE LD. AR DREW OUR ATTENTION TO PAGES 138 TO 154 OF THE PAPER BOOK WHE REIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 16/10/2008 AND IS HAVING COMPAN Y IDENTIFICATION NUMBER. THE COMPANY IS HAVING PAN AAFCM8009H. THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009-10 BEFORE ITO WARD 4(2), KOLKATA . THIS COMPANY WAS HAVING A PAID UP CAPITAL OF RS. 34,25,000 WITH FREE RESERVES AND SURPLUS OF RS. 12,96,75,298/- AS ON 31/03/2009. THIS COMPANY HAVE INVESTED THE SU MS OFRS.44,00,000/- AND RS. 40,00,000 IN TWO TRANCHES IN THE APPELLANT COMPANY. THE SHARE APPLICATIONS WERE MADE BY ACCOUNT PAYEE CHEQUES. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVA ILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAP ER BOOK. 33 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 (V.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTION TO THE PRESENT STATUS OF THIS COMPANY. MASAAL SUPPLIERS PVT LTD IS MANAGED B Y MR. AJAY KUMAR DOKANIA AND MR. RAVI KEDIA. THE COMPANY BELONGS TO AN INDUS TRIAL GROUP SOMANI GROUP, HAVING INTEREST IN HINDUSTAN SANITARYWARE, SOMANI P ILKINGTON ETC. THE COMPANY WAS AMALGAMATED WITH PACO EXPORTS PVT LTD ON 12.12.2018 BY NATIONAL COMPANY LAW TRIBUNAL, KOLKATA BENCH. THE REGISTERED OFFICE OF T HE AMALGAMATED COMPANY IS SITUATED AT 2, RED CROSS PLACE, KOLKATA-700001. THE TOTAL REVENUE FOR THE YEAR ENDED ON 31.03.2018 IS RS. 1.59 LAC. DURING THE YEAR THE COMPANY HAD A DIVIDEND INCOME OF RS. 1.58LAC. THE COMPANY INVESTMENT IN QUOTED SH ARES AND SECURITIES IS OF RS. 41.13 LAC.(PAGE NO. 865-949 IN PB) (VI) COMING TO M/S. SKYLARK VINCOM PRIVATE LTD, LD. AR DRAW OUR ATTENTION TO PAGES 158 TO 173 OF THE PAPER BOOK WHE REIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 22/01/2008 AND IS HAVING COMPAN Y IDENTIFICATION NUMBER U51109WB2008PTC121992.THIS COMPANY IS HAVING PAN AA LCS5272L.THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009 -10 BEFORE ITO WARD 5(4), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 19,62,00,660/- AS ON 31/03/2009. THE COMPANY HA VE INVESTED THE SUMS OF RS.47,00,000/- AND RS. 30,00,000/- IN TWO TRANCHES IN THE APPELLANT COMPANY. THE SHARE APPLICATIONS WERE PAID BY ACCOUNT PAYEE CHEQU ES. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE P APER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DE POSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCU MENTS FILED IN THE PAPER BOOK. (VI.A) THE LD. AR DREW OUR ATTENTION TO THE PRESE NT STATUS OF THIS COMPANY. SKYLARK VINCOM PVT LTD IS MANAGED BY MR. RAMESH KUM AR AGARWAL AND MR. FANTUSH SHARMA. THE REGISTERED OFFICE OF THE COMPAN Y IS SITUATED AT 27, BRABOUME ROAD, KOLKATA-700001. THE TOTAL REVENUE FOR THE YEA R ENDED ON 31.03.2019 IS RS. 30,000. THE COMPANY ENGAGED IN THE INVESTMENT ACTIV ITIES, (PAGE NO. 950-970 IN PB). 34 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 (VII) IN RESPECT OF M/S. HILTON EXIM PVT. LTD. , THE LD. AR DREW OUR ATTENTION TO PAGES 176 TO 188 OF THE PAPER BOOK WHEREIN WE NO TE THAT THIS COMPANY WAS INCORPORATED ON 01/08/2008 WAS HAVING COMPANY IDENT IFICATION NUMBER U51109WB2008PTC128131. THE COMPANY IS HAVING PAN AA CCH0780P.THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009 -10 BEFORE ITO WARD 5(4), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 17,63,00,362/- AS ON 31/03/2009. THIS COMPANY H AS INVESTED A SUM OFRS.44,00,000/- IN THE APPELLANT COMPANY. THE SHAR E WAS APPLICATION WAS MADE PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMEN T IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (VII.A) THE LD. AR DREW OUR ATTENTION TO THE PRES ENT STATUS OF THIS COMPANY HILTON EXIM PVT LTD IS MANAGED BY MR. NIRAJKUMAR VE DPRAKASH MEHRA AND MR. CHINTAN MAHESHBHAI NANDRAJOG. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTEREST IN LEASING AND HIRE PURCHASE. THE REGISTER ED OFFICE OF THE COMPANY IS SITUATED AT 154, LENIN SARANI, 3RD FLOOR, ROOM NO. 304, BESIDE KAMALALAYA CENTER, KOLKATA-700013. THE TOTAL REVENUE FOR THE YEAR ENDE D ON 31.03.2019 IS RS. 191.69 LAC. (PAGE NO. 971-993 IN PB) (VIII) COMING TO M/S. TIRUPATI TRADEVIN PRIVATE L IMITED , THE LD. AR DREW OUR ATTENTION TO PAGES 197 TO 210 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 08/09/2008 AND IS HAVIN G COMPANY IDENTIFICATION NUMBER U51909WB2008PTC284865.THIS COMPANY IS HAVING PAN AADCT0249G.THIS COMPANY DULY FILED ITS RETURN OF IN COME FOR AY 2009-10 BEFORE ITO WARD 4(1), KOLKATA. THIS COMPANY WAS HAVING A P AID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS.9,57,00,432/- AS ON 31/0 3/2009. THIS COMPANY HAS INVESTED A SUM OFRS:35,00,000/- IN THE APPELLANT CO MPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS 35 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVA ILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAP ER BOOK. (VIII.A) THE LD. AR TOOK PAINS TO DRAW ATTENTION T O PRESENT STATUS OF THIS SHARE SUBSCRIBER TIRUPATI TRADEVIN PVT LTD IS MANAGED BY MR. ANUJ KOHLI AND MR. DHARAM BIR KOHLI. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTEREST IN REAL ESTATE, HOTEL INDUSTRY AND POLYMERS. THE COMPANY WA S AMALGAMATED WITH GOLDEN WINGS POLYMER PVT LTD ON 24.06.2020 BY NATIONAL COM PANY LAW TRIBUNAL, KOLKATA BENCH. THE REGISTERED OFFICE OF THE COMPANY IS SITU ATED AT A-92, PRIYADARSHINI VIHAR, DELHI- 110092. (PAGE NO. 994-1034 IN PB). (IX) IN RESPECT OF M/S. RIDHISIDHIVINTRADE PRIVAT E LIMITED , THE LD. AR DREW OUR ATTENTION TO PAGES 211 TO 226 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 08/09/2008 AND IS HAVIN G COMPANY IDENTIFICATION NUMBER U51909WB2008PTC129156. THIS COMPANY IS HAVIN G PAN AAECR1123J. THIS COMPANY FILED ITS RETURN OF INCOME FOR AY 2009 -10 BEFORE ITO WARD 9(3), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 11,37,00,200/- AS ON 31/03/2009. THIS COMPANY H AVE INVESTED THE SUMS OF RS.49,00,000/- AND RS.35,00,000/- IN TWO TRANCHES I N THE APPELLANT COMPANY. THE SHARE APPLICATIONS WERE MADE BY ACCOUNT PAYEE CHEQU ES. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE P APER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DE POSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCU MENTS FILED IN THE PAPER BOOK. (IX.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTIO N TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER. RIDHISIDHI VINTRADE PVT LTD IS MANAGED BY MR. NEHAL NANDKISHORE DIXIT AND MR. VIVEK SHARWANKUMAR GUPTA. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTEREST IN LEASING AND HIRE PURC HASE. THE REGISTERED OFFICE OF THE COMPANY IS SITUATED AT 3, KEHTRA DAS LANE, P.O. BOW BAZAR, KOLKATA-700012. THE 36 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 TOTAL REVENUE FOR THE YEAR ENDED ON 31.03.2019 IS R S. 16.77 LAC. THE COMPANY NON- CURRENT ASSETS (TANGIBLE ASSETS) AS ON 31.03.2019 I S RS. 14.34 LAC. THE COMPANY CURRENT ASSETS (ICD & LOAN) AS ON 31.03.2019 IS RS. 905.03 LAC AND RESIDENTIAL PROPERTIES SHOP AND FLATS IS RS. 198.31 LAC (PAGE N O. 1035-1076 IN PB). (X) THE LD. AR DRAW OUR ATTENTION TO PAGES 229 TO 242 OF THE PAPER BOOK FOR M/S. ICON TREXIM PRIVATE LIMITED , WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 26/08/2008 AND IS HAVING COMPANY ID ENTIFICATION NUMBER U51909WB2008PTC128752. THIS COMPANY IS HAVING PAN A ABCI9429D. THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009 -10 BEFORE ITO WARD 6(2), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. L1,10,00,408/- AS ON 31/0312009.THE COMPANY HAS INVESTED A SUM OF RS.35,00,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMEN T IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (X.A) THE LD. AR DREW OUR ATTENTION TO THE PRESEN T STATUS OF THIS COMPANY ICON TREXIM PVT LTD IS MANAGED BY MR. SURAJDEO BHAG AT AND MISS. MANORMA SHARMA. THE REGISTERED OFFICE OF THE COMPANY IS SIT UATED AT 9/12, LAL BAZAR STREET, 2ND FLOOR, KOLKATA-700001. THE COMPANY ENGAGED IN B USINESS ACTIVITIES IN INVESTMENT AND FINANCE (PAGE NO. 1077-1095 IN PB). (XI) IN RESPECT OF M/S. SEAVIEW AGENCIES PRIVATE L IMITED , THE LD. AR DREW OUR ATTENTION TO PAGES 246 TO 259 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 29/08/2008 AND IS HAVIN G COMPANY IDENTIFICATION NUMBER U51909WB2008PTC128936. THIS COMPANY IS HAVIN G PAN AAMCS3862P. THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009-10 BEFORE ITO WARD 9(3), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS.15,65,00,291/- AS ON 31/03/2009.THIS COMPANY HAS INVESTED THE SUMS OF 37 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 RS.30,00,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMEN T IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (XI.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTIO N TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER, SEAVIEW AGENCIES PVT LTD IS MANAGED BY MR. HEMANT GOYAL AND MR. DINESH GOYAL. THE COMPANY WAS AMALGAMATED W ITH NARSINGHLSPAT LTD ON 07.02.2019 BY NATIONAL COMPANY LAW TRIBUNAL, KOLKAT A BENCH. THE REGISTERED OFFICE OF THE AMALGAMATED COMPANY IS SITUATED AT 50 , J.L. NEHRU ROAD, 2ND FLOOR, MIDDLETON ROW, KOLKATA-700071. THE TOTAL REVENUE FO R THE YEAR ENDED ON 31.03.2018 IS RS. 4.26 LAC. THE COMPANY ENGAGED IN BUSINESS ACTIVITIES IN INVESTMENT AND FINANCE (PAGE NO. 1096-1190 IN PB). (XII) COMING TO M/S. RELIABLE COMMODEAL PRIVATE LI MITED , OUR-ATTENTION WAS DRAWN BY THE LD. AR TO PAGES 264 TO 277 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 01/08/2008 AND IS HAVING COMPANY IDENTIFICATION NUMBER U51909WB2008PTC128133. THE COMPANY IS HAVING PAN AAECR0641K.THIS COMPANY DULY FILED ITS RETURN OF IN COME FOR AY 2009-10 BEFORE ITO WARD 4(1), KOLKATA. THIS COMPANY WAS HAVING A P AID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 17,25,00,433/-AS ON 31/ 03/2009. THIS COMPANY HAS INVESTED A SUM OF RS.49,00,000/- IN THE APPELLANT C OMPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE B ANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVA ILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAP ER BOOK. (XII.A) THE LD. AR DREW OUR ATTENTION TO THE PRES ENT STATUS OF THIS SHARE SUBSCRIBER, RELIABLE COMMODEAL PVT LTD IS MANAGED B Y MR. HEMANT GOYAL AND MR. 38 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 DINESH GOYAL. THE COMPANY WAS AMALGAMATED WITH NARS INGH ISPAT LTD ON 07.02.2019 BY NATIONAL COMPANY LAW TRIBUNAL, KOLKAT A BENCH. THE REGISTERED OFFICE OF THE AMALGAMATED COMPANY IS SITUATED AT 50 , J.L. NEHRU ROAD, 2ND FLOOR, MIDDLETON ROW, KOLKATA-700071. THE COMPANY ENGAGED IN BUSINESS ACTIVITIES IN INVESTMENT AND FINANCE (PAGE NO. 1191-1290 IN PB). (XIII) IN RESPECT OF M/S. AMARNATH VANIJYA PRIVAT E LIMITED , THE LD. AR DREW OUR ATTENTION TO PAGES 282 TO 295 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 27/08/2008 AND IS HAVIN G COMPANY IDENTIFICATION NUMBER U51909WB2008PTC128862. THIS COMPANY IS HAVIN G PAN AAHCA2394M.THIS COMPANY DULY FILED ITS RETURN OF IN COME FOR AY 2009-10 BEFORE ITO WARD 4(3), KOLKATA. THIS COMPANY WAS HAVING A P AID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 13,24,00,231/- AS ON 31 /03/2009. THIS COMPANY INVESTED THE SUMS OF RS.48,00,000/- IN THE APPELLANT COMPANY . THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVA ILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAP ER BOOK. (XIII.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENT ION TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER AMAMATH VANIJYA PVT LTD IS MA NAGED BY MR. DINESH KUMAR MITTAL, MR. PRAMOD KUMAR MITTAL, MR. VINOD KUMAR MI TTAL AND MR. SANJEET MITTAL. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTERES T IN FUEL. THE REGISTERED OFFICE OF THE COMPANY IS SITUATED AT 209, BENTINCK CHAMBER , 37/A, BENTINCK STREET, KOLKATA-700069. THE TOTAL REVENUE FOR THE YEAR ENDE D ON 31.03.2019 IS RS. 275.62 LAC. THE COMPANY NON-CURRENT ASSETS (TANGIBLE ASSET S) AS ON 31.03.2019 IS RS. 243 LAC. THE COMPANY CURRENT ASSETS (LOANS & ADVANC ES) AS ON 31.03.2019 IS RS. 324.10 LAC (PAGE NO. 1291-1323 IN PB.) (XIV) COMING TO M/S. VEDANT VINCOM PRIVATE LIMITE D , OUR ATTENTION WAS DRAWN BY THE LD. AR TO PAGES 298 TO 311 OF THE PAPE R BOOK WHEREIN WE NOTE THAT THIS 39 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 COMPANY WAS INCORPORATED ON 16/10/2008 AND WAS HAVI NG COMPANY IDENTIFICATION NUMBER U51909WB2008PTC130020. THIS COMPANY IS HAVIN G PAN AACCV8715E.THIS COMPANY DULY FILED ITS RETURN OF IN COME FOR AY 2009-10 BEFORE ITO WARD 5(4), KOLKATA. THIS COMPANY WAS HAVING A P AID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 13,24,00,217/- AS ON 31 /03/2009. THIS COMPANY HAS INVESTED A SUM OF RS.46,00,000/- IN THE APPELLANT C OMPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE B ANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVA ILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAP ER BOOK. (XIV.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTIO N TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER. VEDANT VINCOM PVT LTD IS MAN AGED BY MR. PUNEET GUPTA AND MR. PRAMOD KUMAR DHANUKA. THE COMPANY WAS AMALGAMAT ED WITH BAKSHIRAM UDERAM HOLDINGS PVT. LTD ON 09.05.2019 BY NATIONAL COMPANY LAW TRIBUNAL, KOLKATA BENCH. THE REGISTERED OFFICE OF THE COMPANY IS SITUATED AT 50, CHOWRINGH.EE ROAD, 2ND FLOOR, KOLKATA-700071. THE TOTAL REVENUE FOR THE YEAR ENDED ON 31.03.2018 IS RS. 6.24 LAC. THE COMPANY ENGAGED IN INVESTMENT AND FINANCE BUSINESS ACTIVITIES (PAGE NO. 1324-1432 IN PB). (XV) IN RESPECT OF M/S. INNOVA TIEUP PRIVATE LIMI TED , THE LD. AR DREW OUR ATTENTION TO PAGES 312 TO 325 OF THE PAPER BOOK WHE REIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 27/08/2008 AND WAS HAVING COMPA NY IDENTIFICATION NUMBER U51909WB2008PTC128780. THIS COMPANY IS HAVING PAN A ABCI9438A. THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009 -10 BEFORE ITO WARD 6(2), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS.13,32,00,159/- AS ON 31/03/2009. THIS COMPANY HA S INVESTED THE SUM OF RS.49,00,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WASMADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMEN T IT IS TAKEN NOTE THAT THERE IS NO 40 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (XV.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTIO N TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER INNOVA TIE-UP PVT LTD IS SUM MARIZED, THE COMPANY IS MANAGED BY MR. DEEPAK KUMAR SARAF AND MR. ANAND KEJ RIWAL. THE COMPANY WAS AMALGAMATED WITH DELTA DEALERS PVT. LTD ON 04.04.20 19 BY NATIONAL COMPANY LAW TRIBUNAL, KOLKATA BENCH (PAGE NO. 1433-1545 IN PB). (XVI) COMING TO M/S. MARINA DEALERS PRIVATE LIMIT ED , OUR ATTENTION WAS DRAWN BY THE LD. AR TO PAGES 328 TO 341 OF THE PAPE R BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 22/12/2008 AND WAS HAVI NG COMPANY IDENTIFICATION NUMBER U51909WB2008PTC131401. THIS COMPANY IS HAVIN G PAN AAFCM8486N. THIS COMPANY DULY FILED ITS RETURN OF I NCOME FOR AY 2009-10 BEFORE ITO WARD 4(2), KOLKATA. THIS COMPANY WAS HAVING A P AID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS.8,29,00,359/- AS ON 31/0 312009. THIS COMPANY HAS INVESTED A SUM OF RS.45,00,000/- IN THE APPELLANT C OMPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE B ANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS HO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVA ILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAP ER BOOK. (XVI.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTIO N TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER. MARINA DEALERS PVT LTD IS MA NAGED BY MR. PRAVEEN KUMAR AND MR. JITENDER WADHAWAN. THE COMPANY WAS AMALGAMATED WITH J.D.S. FINANCE SERVICES PVT. LTD ON 11.10.2019 BY NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI BENCH. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTEREST IN THE HOTEL INDUSTRY AND REAL ESTATE. THE REGISTERED OFFICE OF THE COMPA NY IS SITUATED AT 134A, 1ST FLOOR, KISHANGANJ MARKET OLD ROHTAK ROAD, NEW NORTH DELHI, DELHI-110007. THE TOTAL REVENUE FOR THE YEAR ENDED ON 31.03.2019 IS RS. 2.7 1 LAC. THE COMPANY NON-CURRENT 41 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 ASSETS (TANGIBLE ASSETS) AS ON 31.03.2019 IS RS. 18 1.26 LAC (PAGE NO. 1546-1579 IN PB). (XVII) IN RESPECT OF M/S. SENSITIVE OVERSEAS PRIV ATE LIMITED , THE LD. AR DREW OUR ATTENTION TO PAGES 346 TO 361 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 21/01/2008 AND IS HAVIN G COMPANY IDENTIFICATION NUMBER U51109WB2008PTC287121. THIS COMPANY IS HAVIN G PAN AALCS5183N. THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009-10 BEFORE ITO WARD 9(4), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS.8,62,00,372/- AS ON 31/03/2009.THIS COMPANY HAS INVESTED THE SUM OF RS.49,00,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMEN T IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (XVII.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTIO N TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER. SENSITIVE OVERSEAS PVT LTD I S SUMMARIZED, THE COMPANY IS MANAGED BY MR. PRAVEEN KUMAR AND MR. JITENDER WADHA WAN. THE COMPANY WAS AMALGAMATED WITH J.D.S. FINANCE SERVICES PVT. LTD O N 11.10.2019 BY NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI BENCH. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTEREST IN THE HOTEL INDUSTRY AND REAL ESTA TE. THE REGISTERED OFFICE OF THE COMPANY IS SITUATED AT 134A, 1ST FLOOR, KISHANGANJ MARKET, NEW RAILWAY COLONY, OLD ROHTAK ROAD, NEW NORTH DELHI, DELHI-110007 (PAG E NO. 1580-1613 IN PB). (XVIII) COMING TO M/S. JAGUAR MERCHANDISE PRIVATE LIMITED , OUR ATTENTION WAS DRAWN BY THE LD. AR TO PAGES 362 TO 376 OF THE PAPE R BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 27/08/2008 AND WAS HAVI NG COMPANY IDENTIFICATION NUMBER U51909KA2008PTC085952. THIS COMPANY IS HAVIN G PAN AACCJ0577E. THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009-10 BEFORE ITO WARD 6(2), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF 42 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 RS.29,30,00,882/-AS ON 31/0312009. THIS COMPANY HAS INVESTED A SUM OF RS.49,00,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMEN T IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (XVIII.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTI ON TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER. JAGUAR MERCHANDISE PVT LTD I S SUMMARIZED, THE COMPANY IS MANAGED BY MR. NARESH JHUNJHUWALA AND MR. PAYANNA R ANJAN. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTEREST IN IRON & STEEL A ND REAL ESTATE. THE REGISTERED OFFICE OF THE COMPANY IS SITUATED AT 71/72, 5 BLOCK , INDUSTRIAL LAYOUT JYOTI NIVAS COLLEGE ROAD, KORAMANGALA, BANGALORE-560095 (PAGE N O. 1614-1647 IN PB). (XIX) IN RESPECT OF M/S. TULSI COMMODEAL PRIVATE L IMITED , THE LD. AR DREW OUR ATTENTION TO PAGES 379 TO 392 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 22/12/2008 AND IS HAVIN G COMPANY IDENTIFICATION NUMBER U51109WB2008PTC131399. THE COMPANY IS HAVING PAN: AADCT0891N. THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009-10 BEFORE ITO WARD 4(1), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS.9,33,00,179/- AS ON 31/03/2009. THIS COMPANY HAS INVESTED THE SUM OF RS.47,00,000/- IN THE APPELLANT COMPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMEN T IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FRO M WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PER USAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (XIX.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTIO N TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER TULSI COMMODEAL PVT LTD IS M ANAGED BY MR. RAJESH KUMAR GUPTA AND MISS. RITU GUPTA. THE COMPANY WAS AMALGAM ATED WITH J.D.S. FINANCE 43 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 SERVICES PVT. LTD ON 11.10.2019 BY NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI BENCH. THE BUSINESS GROUP OF THE COMPANY IS HAVING INTEREST IN THE HOTEL INDUSTRY AND REAL ESTATE. THE REGISTERED OFFICE OF THE AMALG AMATED COMPANY IS SITUATED AT 108, 1ST FLOOR, VIKAS SURYA PLAZA, PLOT NO. 7, ROAD NO. 44, RANI BAGH, DELHI- 110034. THE TOTAL REVENUE FOR THE YEAR ENDED ON 31. 03.2019 IS RS. 3 LAC (PAGE NO. 1648-1679 IN PB). (XX) COMING TO M/S. LANDMARK VINTRADE PRIVATE LIMI TED , OUR ATTENTION WAS DRAWN BY THE LD. AR TO PAGES 395 TO 407 OF THE PAPER BOOK WHEREIN WE NOTE THAT THIS COMPANY WAS INCORPORATED ON 27/08/2008 IS WAS HAVIN G COMPANY IDENTIFICATION NUMBER U51909WB2008PTC128815. THE COMPANY IS HAVING PAN AABCL5094P.THIS COMPANY DULY FILED ITS RETURN OF IN COME FOR AY 2009-10 BEFORE ITO WARD 9(3), KOLKATA. THIS COMPANY WAS HAVING A P AID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS. 10,90,00,224/- AS ON 31 /0312009. THIS COMPANY HAS INVESTED A SUM OF RS.41,00,000/- IN THE APPELLANT C OMPANY. THE SHARE APPLICATION WAS MADE BY ACCOUNT PAYEE CHEQUE. THE COPY OF THE B ANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMPANY HAD MADE THE SHARE APPLICATION ARE ALSO AVA ILABLE FROM A PERUSAL OF THE BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAP ER BOOK. (XX.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTION TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER. LAND MARK VINTRADE PVT LTD IS MANAGED BY MR. SHAMBHU KUMAR SINGH AND MR. KAUSHAL KUMAR AGARWAL. THE BUSINESS GROUP O F THE COMPANY IS HAVING INTEREST IN PLYWOOD, ELECTRIC & ELECTRONICS INDUSTR IES. THE REGISTERED OFFICE OF THE COMPANY IS SITUATED AT 20B, BRITISH INDIA STREET, 5 TH FLOOR, ROOM NO. 1A, KOLKATA- 700069. THE TOTAL REVENUE FOR THE YEAR ENDED ON 31. 03.2019 IS RS. 37.33 LAC. THE COMPANY NON-CURRENT ASSETS (TANGIBLE ASSETS) AS ON 31.03.2019 IS RS. 149.78 LAC (PAGE NO. 1680-1711 IN PB). (XXI) IN RESPECT OF M/S. ACCORD COMMODITIES PRIVAT E LIMITED , THE LD. AR DREW OUR ATTENTION TO PAGES 411 TO 428 OF THE PAPER BOOK WHE REIN WE NOTE THAT THIS COMPANY 44 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 WAS INCORPORATED ON 21/01/2008 AND IS HAVING COMPAN Y IDENTIFICATION NUMBER U51109WB2008PTC121926. THIS COMPANY IS HAVING PAN A AGCA7510A.THIS COMPANY DULY FILED ITS RETURN OF INCOME FOR AY 2009 -10 BEFORE ITO WARD 4(3), KOLKATA. THIS COMPANY WAS HAVING A PAID UP CAPITAL WITH FREE RESERVES AND SURPLUS OF RS.9,42,00,428/- AS ON 31/03/2009. THIS COMPANY HAV E INVESTED THE SUMS OF RS.41,00,000/- RS. 42,00,000/-AND RS.41,00,000/- IN THREE TRANCHES IN THE APPELLANT COMPANY. THE SHARE APPLICATIONS WERE MADE BY ACCOUN T PAYEE CHEQUES. THE COPY OF THE BANK STATEMENT OF THE COMPANY IS DULY AVAILABLE IN THE PAPER BOOK. ON EXAMINATION OF THE BANK STATEMENT IT IS TAKEN NOTE THAT THERE IS NO DEPOSIT OF CASH. THE DETAILS OF SOURCE OF FUNDS FROM WHICH THIS COMP ANY HAD MADE THE SHARE APPLICATION ARE ALSO AVAILABLE FROM A PERUSAL OF TH E BANK STATEMENT AND OTHER DOCUMENTS FILED IN THE PAPER BOOK. (XXI.A) THE LD. AR TOOK PAINS TO DRAW OUR ATTENTIO N TO THE PRESENT STATUS OF THIS SHARE SUBSCRIBER ACCORD COMMODITIES PVT LTD IS MANAGED BY MR. UPENDRA NATH RAI AND MR. SOMNATH GHOSH. THE BUSINESS GROUP OF TH E COMPANY IS HAVING INTEREST IN INFORMATION TECHNOLOGY, REAL ESTATE. THE REGISTE RED OFFICE OF THE COMPANY IS SITUATED AT HO CHI MINH SARANI, 2ND FLOOR, SUIT NO. 2E, KOLKATA-700071. THE TOTAL REVENUE FOR THE YEAR ENDED ON 31.03.2019 IS RS. 1.3 9 LAC. THE COMPANY NON- CURRENT ASSETS (PROPERTY & LAND) AS ON 31.03.2019 I S RS. 185 LAC (PAGE NO. 1712- 1741 IN PB). 39. THUS IN THIS CASE WE NOTE THAT ASSESSEE HAS DIS CHARGED THE ONUS ON IT TO PRIMA FACIE PROVE THE NATURE AND SOURCE OF THE CREDIT/SHA RE CAPITAL AND PREMIUM. AND THEREAFTER, THE ONUS SHIFTED ON AO/LD CIT(A) TO DIS PROVE IT, WHICH THEY HAVE FAILED TO DO SO. SO IN SUCH A SCENARIO, BASED ON CONJECTUR ES AND SURMISES NO ADVERSE VIEW WAS SUSTAINABLE. RELIANCE IN THIS REGARD IS ALSO PL ACED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS GANGESHWARI METAL (P) LTD (ITA NO. 597 OF 2012) DATED 21.01.2012. IN THIS CASE THE ASSESSEE HAD RECEIVED SHARE APPLICATION MONEY OF RS.55.50 LACS DURING THE YEAR IN QUESTION. THE ASSESSEE FILED THE COMPLETE NAMES, ADDRESSES OF THE SHARE APPLICANTS, CONFIRMAT ORY LETTERS FROM THEM, COPIES OF 45 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 BANK STATEMENTS OF BOTH THE COMPANY AS WELL AS THE SHARE APPLICANTS AND COPIES OF SHARE APPLICATION FORMS. IN SPITE OF THE AFORESAID DOCUMENTARY EVIDENCES THE AO HELD THE EXPLANATION TO BE UNACCEPTABLE AND TREATED THE SHARE APPLICATION AS UNEXPLAINED CASH CREDIT THEREBY MAKING ADDITION UNDER SECTION 6 8 OF THE ACT. ON APPEAL THE LD CIT(APPEALS) DELETED THE AFORESAID ADDITION HOLDING THAT THE IDENTITY OF THE SHARE APPLICANTS STOOD ESTABLISHED BEYOND DOUBT, AND ALL THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES AND THE SHARE APPLICANTS WERE REGULAR INCOME-TAX ASSESSEES. THE LD CIT(APPEALS) FURTHER HELD THAT THE REVENUE D ID NOT BRING ANY EVIDENCE ON RECORD TO SUGGEST THAT THE SHARE APPLICATION HAD BE EN RECEIVED BY THE ASSESSEE FROM ITS OWN UNDISCLOSED SOURCES NOR ANY MATERIAL WAS BR OUGHT ON RECORD TO SHOW THAT .THE APPLICANTS WERE BOGUS. THE REVENUE WAS NEITHER ABLE TO CONTROVERT THE DOCUMENTARY EVIDENCES FILED BY THE APPELLANT NOR PROVE THAT THE SHARE APPLICATION WERE INGENUINE OR THE APPLICANTS WERE NON-CREDITWORTHY. THE FINDIN GS OF THE LD CIT(APPEALS) WERE UPHELD BY THE INCOME-TAX APPELLATE TRIBUNAL. ON APP EAL TO THE HIGH COURT, THE REVENUE PLACED STRONG RELIANCE ON THE DECISION OF A NOTHER COORDINATE BENCH OF THE SAME COURT IN THE CASE OF CIT VS NOVO PROMOTERS & F INLEASE (P) LTD (342 ITR 169). THE HIGH COURT HOWEVER HELD THAT THE AFORESAID JUDG MENT WAS DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. THE COURT OBSERVED T HAT IN THAT JUDGMENT THE ASSESSING OFFICER HAD BROUGHT ON RECORD ENOUGH CORROBORATIVE EVIDENCE TO SHOW THAT THE ASSESSEE HAD ROUTED ITS OWN UNACCOUNTED MONIES INTO ITS BOOKS THROUGH MEDIUM OF SHARE SUBSCRIPTION. AND THE SHARE APPLICANTS HAD CO NFESSED THAT THEY WERE 'ACCOMMODATION ENTRY PROVIDERS'. THE ASSESSING OFFI CER IN THE LATTER CASE WAS ABLE TO PROVE WITH ENOUGH MATERIAL THAT THE SHARE SUBSCR IPTION WAS A PRE-MEDITATED PLAN TO ROUTE UNACCOUNTED MONIES. IN THE PRESENT CASE [GANG ESHWARI METAL] HOWEVER THE DEPARTMENT WAS UNABLE TO BRING ANY MATERIAL WHATSOE VER SHOWS THAT SHARE APPLICATION WAS IN THE NATURE OF ACCOMMODATION ENTR IES. THE COURT OBSERVED THAT THE APPELLANT HAD FILED SUFFICIENT DOCUMENTARY EVIDENCE S TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GEN UINENESS OF THE TRANSACTION. THE AO HOWEVER CHOSE TO SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTED ALL THE EVIDENCE IN HIS POSSESSION AND THEN MERELY REJECTED THE SAME WITHOUT CONDUCTING ANY 46 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 INQUIRY OR VERIFICATION WHATSOEVER. THE COURT THUS HELD THAT THE DECISION OF CIT VS NOVO PROMOTERS & FINLEASE (P) LTD (342 ITR 169) WAS NOT APPLICABLE TO THE FACTS OF THE CASE. INSTEAD IT WAS HELD THAT THE ISSUE IN HAN DS WAS ON THE LINES OF THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPO RTS PVT LTD (319 ITR 5). ACCORDINGLY THE ADDITION MADE UNDER SECTION 68 ON A CCOUNT OF SHARE APPLICATION WAS DELETED. 40. WE WOULD LIKE TO REPRODUCE THE HON'BLE HIGH CO URT ORDER IN CIT VS. GANGESHWARI METAL P.LTD. IN ITA NO. 597/2012 JUDGEM ENT DATED 21.1.2013, THE HON'BLE HIGH COURT AFTER CONSIDERING THE DECISIONS IN THE CASE OF NOVA PROMOTERS AND FINLEASE PVT. LTD. 342 ITR 169 AND JUDGEMENT IN THE CASE OF CIT VS. LOVELY EXPORTS 319 ITR (SAT 5)(5. C) HELD AS FOLLOWS:- AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES O F CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSING OFFICER CARRIES OUT THE EXERCISE WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER 'SITS BACK WITH FOLDED HANDS' TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN H IS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIO NS. THE PRESENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER AFTER N OTING THE FACTS, MERELY REJECTED THE SAME. THIS WOULD BE APPARENT FROM THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER TO THE FOLLOWING EFFECT:- ''INVESTIGATION MADE BY THE INVESTIGATION WING OF T HE DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRA NSACTION OF ACCOMMODATION ENTRY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF RS.1,11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS RECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WAS STATED THAT THE ACTUAL AMOUNT RECEIVE D WAS RS.55,50,000/- AND NOT RS.1,11,50,000/- AS MENTIONED IN THE NOTICE. THE AS SESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTION OF THE ASSESSEE IN RESPECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT RS.55,50,000/-. THE ASSESSEE HAS FURTHER TRIES TO EXPLAIN THE SOURC E OF THIS AMOUNT OF RS.55,50,000/- BY FURNISHING COPIES OF SHARE APPLIC ATION MONEY, BALANCE4 SHEET ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED TH AT THE QUESTION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXP LANATION OF THE ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REMAINS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS HAS BEE N ARRIVED BY THE INVESTIGATION WING OF THE DEPARTMENT. AS SUCH ENTRI ES OF RS.5~50/000/- RECEIVED BY THE ASSESSEE ARE TREATED AS AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED TO ITS INCOME. SINCE I AM SATISF IED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME/ PEN ALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITIATED SEPARATELY. 47 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. ( SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVO UR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CLEARLY DISTINGUISHABLE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA). THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISHED ALL THE MATERIAL WHICH WE HAVE ALREADY RE FERRED TO ABOVE. IN SUCH AN EVENTUALITY NO ADDITION CAN BE MADE UNDER SECTION 6 8 OF THE INCOME TAX ACT 1961. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGAT IVE. THE DECISION OF THE TRIBUNAL IS CORRECT IN LAW 41. THE CASE ON HAND CLEARLY FALLS IN THE CATEGORY WHERE THERE IS LACK OF ENQUIRY ON THE PART OF THE AO [DURING SECOND ROUND AND IN R EMAND PROCEEDINGS] AS IN THE CASE OF GANJESHWARI METALS (SUPRA). A) IN THE CASE OF FINLEASE PVT LTD. 342 ITR 169 (SU PRA) IN ITA 232/2012 JUDGEMENT DT. 22.11.2012 AT PARA 6 TO 8/ I T WAS HELD AS FOLLOWS. '6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE THE DISCUSSION BY THE COMMISSIONER OF INCOME T AX (APPEALS) WOULD REVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CER TIFIED COPIES ISSUED BY THE ROC IN RELATION TO THE SHARE APPLICATION AFFIDAVITS OF THE DIRECTORS, FORM 2 FILED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY TH E APPLICANT FOR COMPANY'S SHARES, CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY , THE ASSESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF THE INVESTIGATION REPORT AND THE STATEMENT OF MR. M AHES GARG. TO ELEVATE THE INFERENCE WHICH CAN BE DRAWN ON THE BASIS OF READIN G OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPER, MORE SO WHE N THE ASSESSEE PRODUCED MATERIAL. THE LEAST THAT THE ASSESSING OFFICER OUGH T TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NECESSARY, INVOKING HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIRECTORS. NO EFF ORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCLOSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSING O FFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAI N FACTS AND THE STATEMENTS OF MR.MAHESH GARG THAT THE INCOME SOUGHT TO BE ADDED F ELL WITHIN THE DESCRIPTION OFS.68 OF THE INCOME TAX ACT 1961. HAVING REGARD TO THE ENTIRETY OF FACTS AND CIRCUMSTANCES, THE COURT IS SATISFIED THAT THE FIND ING OF THE TRIBUNAL IN THIS CASE ACCORDS WITH THE RATIO OF THE DECISION OF THE SUPRE ME COURT IN LOVELY EXPORTS (SUPRA). THE DECISION IN THIS CASE IS BASED ON THE PECULIAR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSE SSEE ADDUCES EVIDENCE IN SUPPORT OF THE SHARE APPLICATION MONIES, IT IS OPEN TO THE ASSESSING OFFICER TO EXAMINE IT AND REJECT IT ON TENABLE GROUNDS. IN CAS E HE WISHES TO RELY ON THE REPORT OF THE INVESTIGATION AUTHORITIES, SOME MEANI NGFUL ENQUIRY OUGHT TO BE CONDUCTED BY HIM TO ESTABLISH A LINK BETWEEN THE AS SESSEE AND THE ALLEGED HAWALA OPERATORS, SUCH A LINK WAS SHOWN TO BE PRESE NT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA) RELIED UPON B Y THE REVENUE. WE ARE 48 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 THEREFORE NOT TO BE UNDERSTOOD TO CONVEY THAT IN AL L CASES OF SHARE CAPITAL ADDED UNDER SECTION THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTRACTED, I RRESPECTIVE OF THE FACTS, EVIDENCE AND MATERIAL. ' 42. IN THIS CASE ON HAND, AS WE HAVE SEEN, THE ASS ESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE SHARE APPLICANTS, THEREAFTER THE ONUS SHIFTED TO AO TO DISPROVE THE D OCUMENTS FURNISHED BY ASSESSEE; AND FURTHER THE AO COULD NOT HAVE BRUSHED ASIDE THE DOCUMENTS PRODUCED BY ASSESSEE/SHARE SUBSCRIBERS WITHOUT POINTING OUT ANY INFIRMITIES; AND WITHOUT DOING THIS EXERCISE, THE AO COULD NOT HAVE DRAWN ADVERSE VIEW AGAINST THE SHARE SUBSCRIBERS AND THEREFORE, FOR THE SAME REASONS THE IMPUGNED ACTION OF LD CIT(A) TO SUSTAIN THE ADDITION ALSO CANNOT BE COUNTENANCED BECAUSE THE VERY SAME EXERCISE THE LD CIT(A) COULD HAVE RESORTED TO EXERCISING HIS CO-TERMINUS POWERS, WHICH HE DID NOT DO. IN THE ABSENCE OF ANY FRUITFUL INVESTIG ATION, MUCH LESS GATHERING OF EVIDENCE BY THE ASSESSING OFFICER/LD CIT(A), WE ARE OF THE OPINION THAT ADDITION COULD NOT HAVE BEEN SUSTAINED MERELY BASED ON INFER ENCES DRAWN BY CIRCUMSTANCE/CONJECTURES/SURMISES. 43. TO SUM UP SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPL AIN 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 FULL Y EXPLAINED BY THE ASSESSEE. THE ASSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENT ITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE APPLICANTS. THE PAN DETAIL S, BANK ACCOUNT STATEMENTS, AUDITED FINANCIAL STATEMENTS AND INCOME TAX ACKNOWL EDGMENTS, CONFIRMATION OF SOURCE OF SOURCE AND FOURTEEN (14) SHARE SUBSCRIBER S SCRUTINY ASSESSMENTS PASSED U/S 143(3) OUT OF TWENTY ONE (21) SHARE SUBSCRIBERS WERE PLACED ON AO/LD CIT(A)'S RECORD. ACCORDINGLY ALL THE THREE CONDITIONS AS REQ UIRED U/S. 68 OF THE ACT I.E. THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION WERE PLACED BEFORE THE AO/LD CIT(A) AND THE ONUS SHIFTED TO AO/LD CIT(A) T O DISPROVE THE MATERIALS PLACED BEFORE HIM. WITHOUT DOING SO, THE ADDITION MADE BY THE AO AND SUSTAINED BY LD CIT(A) WAS BASED ON CONJECTURES AND SURMISES, SO IT CANNOT BE JUSTIFIED. IN 49 ITA NO.240/KOL/2020 DOLPHIN GOODS (P) LTD., AY 2009-10 THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSE D ABOVE, NO ADDITION WAS SUSTAINABLE UNDER SECTION 68 OF THE ACT. THEREFORE, THE IMPUGNED ORDER OF LD. CIT(A) IS SET ASIDE AND THE AO IS DIRECTED TO DELET E THE ADDITION AND CONSEQUENTLY THE APPEAL OF ASSESSEE STANDS ALLOWED. 44. BEFORE WE PART, WE NOTE THAT EVEN THOUGH THE AS SESSEE HAS RAISED THE ADDITIONAL GROUND CHALLENGING THE JURISDICTION OF ITO, WARD-6( 1), KOLKATA TO FRAME THE ASSESSMENT ORDER, WE ARE NOT INCLINED TO ADJUDICATE THE SAME, SINCE IT HAS BECOME ACADEMIC BECAUSE WE HAVE DECIDED THE ADDITION MADE BY HIM ON MERITS. THEREFORE, THE LEGAL ISSUE IS LEFT OPEN. 45. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 5 TH MAY, 2021. SD/- SD/- (J. S. REDDY) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 5 TH MAY, 2021 JD (SR. PS.) COPY FORWARDED TO 1. M/S. DOLPHIN GOODS PVT. LTD., C/O RSVPC & COMPANY, 41A, A.J.C. BOSE ROAD, SUITE NO. 613, 6 TH FLOOR, KOLKATA-700 017. 2. ITO, WARD-6(1), KOLKATA. 3. CIT(A)-23, KOLKATA. (SENT THROUGH E-MAIL) 4. CIT- , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA.