ITO, Ward - 1(4) , Kolkata V. M/s. Sri Ganesh Cement Pvt. Ltd., , Kolkata

ITA 2466/KOL/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3376 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 26-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: IMOKABA JAMIR
• Assessee Lawyers: BISWESWAR GHOSH
• Keywords: Unexplained cash credit; Income from undisclosed sources; Source of fund; Question of law; Corroborative evidences; Assessment record; Set aside
• Section: 143(3); 14A; 260A; 201; 251; 264; 13; 22; 131; 68

Judgement Text

ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 1 | P A GE S , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI A. T. VARKEY, JM] I.T.A. NO. 2466/KOL/2018 ASSESSMENT YEAR: 2012-13 ITO, WARD-1(4), KOLKATA VS. M/S SHRI GANESH CEMENT PVT. LTD. (PAN: AFDPK 3120 M) APPELLANT RESPONDENT DATE OF HEARING 17.02.2021 DATE OF PRONOUNCEMENT 25.02.2021 FOR THE APPELLANT SHRI IMOKABA JAMIR, CIT FOR THE RESPONDENT SHRI BISWESWAR GHOSH, A.R ORDER PER SHRI A. T. VARKEY, JM: THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. CIT(A)-5, KOLKATA DATED 31.08.2018 FOR ASSESSMENT YEAR 2012-1 3. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE R EADS AS UNDER: I) THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 50,30, 00,000/- UNDER SECTION 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MON EY RECEIVED DURING THE FY.- 2011-12 RELATED TO AY.2012-13. II) THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 50,30, 00,000/- UNDER SECTION 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MON EY RECEIVED DURING THE FY.- 2011-12 RELATED TO AY.2012-13 WITHOUT CONSIDERING T HE FACT THAT THE EXPLANATIONS REGARDING NATURE AND SOURCE OF SHARE APPLICATION MO NEY WAS NOT FOUND TO BE SATISFACTORY BY THE ASSESSING OFFICER. III) THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT SECTION 68 WOULD NOT A PPLY ON THESE TRANSACTIONS AS THEY COME WITHIN THE DEFINITION OF BARTER/EXCHANGE BY MISINTERPRETING THE PROVISIONS OF THE SAID SECTION. ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 2 | P A GE IV) THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 3. FROM A PERUSAL OF THE AFORESAID THREE GROUNDS O F APPEAL IT IS DISCERNED THAT THE SOLE ISSUE RAISED BY THE REVENUE, IS AGAINST THE DE LETION OF ADDITION OF RS. 50.30 CRORES MADE BY THE AO U/S 68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON ACCOUNT OF UNEXPLAINED SHARE APPLICATIO N MONEY. 4. BRIEF FACTS AS NOTED BY THE AO ON THIS ISSUE IS THAT IN RESPONSE TO THE NOTICES ISSUED TO THE ASSESSEE COMPANY, THE LD. A.R SHRI BI SWESWAR GHOSH APPEARED BEFORE HIM AND PRODUCED BOOKS OF ACCOUNTS, COPY OF AUDITED ACCOUNTS AND OTHER RELATED DETAILS AND DOCUMENTS. ACCORDING TO AO, THE SAME WA S TEST CHECKED. FURTHER HE OBSERVED THAT THE ASSESSEE COMPANY HAS SHOWN RECEIP T OF FRESH SUBSCRIPTION TO ITS SHARE CAPITAL OF RS. 50.30 CRORES DURING THE RELEVA NT ASSESSMENT YEAR (AY 2012-13). ACCORDING TO AO FOR THE PURPOSE OF PROPER VERIFICAT ION AND EXAMINATION INTO THE EXISTENCE, AND CREDITWORTHINESS OF THE SHARE SUBSCR IBERS AND GENUINENESS OF THE SHARE SUBSCRIPTION TRANSACTION CLAIMED BY THE ASSESSEE CO MPANY, HE ISSUED SUMMONS U/S 131 OF THE ACT ( NO DATES GIVEN ) TO THE DIRECTORS OF THE ASSESSEE COMPANY DIRECT ING THEM TO APPEAR PERSONALLY ALONG WITH COMPLETE SETS OF BOOKS OF ACCOUNT AND ALL THE RELEVANT DETAILS / DOCUMENTS FOR THE PURPOSE OF EXA MINATION AND VERIFICATION. THEREAFTER THE AO NOTES THAT HE ISSUED FURTHER SUM MONS TO THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANIES FROM WHOM THE ASSESSEE COMPAN Y HAD CLAIMED TO HAVE RECEIVED SHARE SUBSCRIPTION AND THEY WERE ALSO DIR ECTED TO APPEAR PERSONALLY ALONG WITH COMPLETE SETS OF BOOKS OF ACCOUNTS AND ALL THE RELEVANT DETAILS / DOCUMENTS TO SUBSTANTIATE (I) THEIR IDENTITY, (II) CREDITWORTHIN ESS AND SOURCE OF FUNDS (III) GENUINENESS. ACCORDING TO AO FURTHER HE SENT THE FI NAL REMINDER LETTER TO THE PRINCIPAL OFFICER OF THE ASSESSEE COMPANY REQUESTIN G HIM TO APPEAR BEFORE HIM [ DATE NOT DISCLOSED ]. ACCORDING TO AO EVEN THOUGH REPEATED SUMMONS, NO TICES AND FINAL REMINDER LETTERS WERE ISSUED, NEITHER THE DIRECTORS OF THE ASSESSEE COMPANY NOR THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANY APPEARED BEFORE HIM TO SUBSTANTIATE THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION. THEREFORE AO WAS OF THE OPINION THAT THE ASSESSEE FAILED TO SATISFY THE IDENTITY, CREDITWORTHINESS AND SOURCE ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 3 | P A GE OF FUNDS OF SHARE SUBSCRIBER COMPANY AND ALSO THE G ENUINENESS OF THE SHARE SUBSCRIPTION OF TRANSACTION, SO HE ARE MADE AN ADDI TION OF RS. 50.30 CRORES. 5. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE LD. CIT(A) WHO DELETED THE ADDITION [ AFTER RE-PRODUCING THE REMAND REPORT FROM AO ] BY HOLDING AS UNDER: DURING THE COURSE OF APPELLATE PROCEEDINGS, A REMA ND REPORT WAS SOUGHT FROM THE AO VIDE LETTER DATED 30.08.2016 IN WHICH T HE AO WAS DIRECTED TO VERIFY THE AUTHENTICITY OF THE DOCUMENTS FILED WITH WRITTEN SUBMISSION FILED BY THE APPELLANT. IN THE FORWARDING LETTER THE AO WAS DIRECTED TO SUBMIT HIS COMMENTS ON THE CLAIM MADE BY THE APPELLANT THAT AL L THE DIRECTORS HAD APPEARED SEVERAL TIME IN RESPONSE TO NOTICE U/S 131 OF THE I T ACT BUT THE DEPOSITION WAS NOT TAKEN. THE DIRECTORS THEREFORE H AD NO ALTERNATIVE BUT TO FILE WRITTEN SUBMISSION ON 23.02.2015 ALONG WITH PAPERS AS PER DIRECTION OF THE AO. THE REMAND REPORT WAS FILED BY THE AO ON 27.09. 2016 IN WHICH HE HAD SUBMITTED THAT THE APPELLANT WAS NEVER PREVENTED FR OM PRODUCING ANY EVIDENCE BEFORE THE AO. THE AO HAD ALSO REQUESTED THAT NO FR ESH EVIDENCE BE ADMITTED UNDER RULE 46A IN THE COURSE OF APPELLATE PROCEEDIN GS. THE REMAND REPORT WAS SUBMITTED THROUGH ADDL. CIT, RANGE-1, KOLKATA VIDE LETTER DATED 04.10.2016. SUBSEQUENTLY A SECOND REMAND REPORT WAS SOUGHT FROM THE AO VIDE LETTER DATED 21.09.2017 FOR VERIFICATION OF THE SUBMISSIONS MADE BY THE APPELLANT. THE AO WAS DIRECTED TO SUBMIT A PARA-WISE REPORT ON THE FO LLOWING POINTS: I) TO VERIFY THE GENUINENESS OF THE SOURCES OF ADDITIO N TO THE SHARE CAPITAL/PREMIUM AMOUNTING TO RS.50,30,00,000/- DURI NG THE A.Y. 2012- 13 AFTER ISSUE OF SUMMONS U/S 131 TO VERIFY THE GEN UINENESS OF THE IMPUGNED CASH CREDITORS IN RESPECT OF PAYMENTS MADE BY THE DIRECTORS/SUBSCRIBERS TO SHARE CAPITAL, THEIR IDENT ITY, CAPACITY/SOURCES AND MODE OF PAYMENTS FOR IMPUGNED AMOUNTS ADDED U/S 68 TO THE TOTAL INCOME OF THE ASSESSEE COMPANY. II) TO MAKE INDEPENDENT ENQUIRIES AS TO VERIFY THE AUTHENTICITY OF THE DOCUMENTS FILED BY THE APPELLANT COMPANY IN RESPECT OF PROOF OF SUBSCRIPTION TO SHARE CAPITAL/SHARE PREMIUM OF RS. 50.30 CRORES RAISED BY THE APPELLANT COMPANY DURING THE RELEVANT F.Y. ENDING 31.03.2012 FROM ALL THE SUBSCRIBERS SO AS TO ASCERT AIN THE GENUINENESS OF THE TRANSACTIONS. THE AO HAD SUBMITTED REMAND REPORT VIDE LETTER DATE D 13.10.2017 FORWARDED BY ADDL. CIT, RANGE-1, KOLKATA VIDE LETTER DATED 06 .11.2017. THE SALIENT POINT OF THE SAID REMAND REPORT ARE AS FOLLOWS: 'THE WRITTEN SUBMISSION DATED 09.10.2017 MADE BY TH E APPELLANT ASSESSEE COMPANY ALONG WITH THE ENCLOSED DOCUMENTS IN SUPPORT OF ITS CLAIM WERE GONE THROUGH AND THE RESULTS OF SUCH VER IFICATION AND PROBE ARE ENUMERATED BELOW FOR YOUR KIND PERUSAL. ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 4 | P A GE IN THE PRESENT CASE, THE SOLITARY IMPUGNED ISSUE IS THE ACTION OF THE A.O. IN MAKING ADDITION OF THE SHARE CAPITAL/ PREMIUM AM OUNTING TO RS. 50,30,00,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. DURING THE ASSESSMENT STAGE, THE A.O. MADE THE AFORESAID ADDIT ION ON THE GROUND OF NON- COMPLIANCE ON THE PART OF ITS OWN DIRECTORS AS WELL AS THE 'SHARE SUBSCRIBER PARTIES' AND DIRECTORS OF THE 'SHARE SUB SCRIBER COMPANIES' TO THE SUMMONS U/S 131 OF THE ACT TO DISCHARGE ITS BUR DEN OF PROOF TO SUBSTANTIATE ITS CLAIM OF INTRODUCTION OF FRESH SHA RE CAPITAL, EVEN AFTER SEVERAL OPPORTUNITIES PROVIDED TO IT AND FORCING TH E A.O. TO CONCLUDE THAT 'ITS PURPORTED FRESH SHARE CAPITAL, AMOUNTING TO RS. 50,30,00,000/- IS NOTHING BUT ASSESSEE'S OWN MONEY CONDUCTED UNDER THE GRAB OF FRESH SHARE CAPITAL INTO ITS BOOKS OF ACCOUNT. ON PERUSAL OF RELEVANT RECORDS, IT IS OBSERVED THAT DURING THE REMAND STAGE WHILE SEEKING REMAND REPORT FROM THE THEN A.O ., THE A.R. OF THE APPELLANT ASSESSEE COMPANY, SRI R. DUBEY APPEARED A ND FILED DETAILS AND DOCUMENT IN SUPPORT OF THE CLAIM WHICH IS DULY RECORDED IN THE ORDER SHEET NOTING DATED 19.09.2016. FURTHER, AS PE R THE ORDER SHEET NOTING DATED 19.01.2017, THE PROMOTER DIRECTORS OF THE APPELLANT ASSESSEE COMPANY, NAMELY SRI HANSRAJ JAIN, SRI SANJ AY JAIN, SRI AJAY KR. JAIN AND SRI NAVIN KR. JAIN APPEARED BEFORE THE THEN A.O. IN SUPPORT OF ITS CLAIM AND HAD FURNISHED COPY OF RESP ECTIVE AADHAR CARDS TO SUBSTANTIATE THEIR IDENTITIES WHICH WERE KEPT ON RECORD. DURING THE PRESENT REMAND STAGE, THE APPELLATE ASSE SSEE COMPANY FILED ONE WRITTEN SUBMISSION ALONG WITH RELEVANT ANNEXURE VIDE ITS LETTER RECEIVED BY THIS OFFICE ON 09.10.2017 WHEREIN IT HA D BEEN ENCLOSED COPIES OF RELEVANT PAN CARDS, COPY OF ITR FOR THE R ELEVANT ASSESSMENT YEAR 2012-13, COPY OF RELEVANT BALANCE SHEET, COMPU TATION OF TOTAL INCOME, COPY OF RELEVANT LEDGER SHOWING INVESTMENT IN SHARES OF M/S GANESH CEMENT PVT LTD AND ALSO COPY OF LETTER DISCL OSING SOURCE OF FUNDS FOR PAYMENT OF RELEVANT SHARES APPLICATION IN RESPECT OF ALL THE FOUR DIRECTORS OF THE APPELLANT ASSESSEE COMPANY. IN RESPECT OF OTHER SHARE SUBSCRIBING COMPANY VIZ. M/S SKJ COKE INDUSTR IES LTD., THE APPELLANT ASSESSEE COMPANY VIDE ITS AFORESAID WRITT EN SUBMISSION MADE CERTAIN STATEMENT, THE RELEVANT PORTION OF WHICH IS REPRODUCED AS UNDER: A. THAT EARLIER SKJ COKE INDUSTRIES LIMITED WAS PR OPRIETOR OF JUPITER CEMENT INDUSTRIES THEREAFTER CONVERTED THE SAID PROPRIETORSHIP INTO PARTNERSHIP BUSINESS BY TAKING SRI GANESH CEME NT PRIVATE LIMITED AS PARTNER. THEREAFTER, BY MUTUAL DISCUSSION THE SA ID PARTNERSHIP FIRM HAS BEEN DISSOLVED AND SRI GANESH CEMENT PVT LTD HA S BECOME THE PROPRIETOR OF JUPITER CEMENT INDUSTRIES BY TAKEN OV ER ALL ASSETS AND LIABILITIES OF PARTNERSHIP. B. THAT SKJ COKE INDUSTRIES LIMITED WAS MADE THE I NVESTMENT IN SAID PROPRIETORSHIP BUSINESS SINCE FINANCIAL YEAR 2 006-07 ON WARD AND SAID INVESTMENT WAS CONVERTED INTO EQUITY SHARES OF SRI GANESH CEMENT PRIVATE LIMITED WHICH ARE AS UNDER: ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 5 | P A GE SOURCE OF INVESTMENT AMOUNT FINANCIAL YEAR 2006-07 RS.1,22,60,319/- 2007-08 RS. 3,65,04,344/- 2008-09 RS. 1,05,22,926/- 2009-10 RS. 2,83,49,372/- 2010-11 RS. 7,10,33,701/- 01.04.11 TO 26.11.11 RS. 34,13,29,338/- ----------------------- TOTAL RS. 50,00,00,000/- IT WAS STATED THAT M/S SKJ COKE INDUSTRIES LTD. HAD AGREED TO TRANSFER THE PROPERTY OF M/S JUPITER CEMENT INDUSTRIES TO M/S GA NESH CEMENT PVT LTD VIDE A DEED OF AGREEMENT DATED 28.11.2011. IT WAS FURTHER STATED THAT M/S GANESH CEMENT PVT LTD AGREED TO SATISFY THE LIABILITIES OF M/S SKJ COKE INDUSTRIES LIMITED AS ON DATE OF DISSOLUTION (28.11.2011) BY A LLOTTING EQUITY SHARE OF THE COMPANY TO M/S GANESH CEMENT PVT LTD. THE APPELLANT ASSESSEE COMPANY HAD SUBMITTED THE RE LEVANT AUDITED ACCOUNTS OF THE RELEVANT ASSESSMENT YEAR 2012-13 OF M/S SKJ COKE INDUSTRIES LIMITED ALONG WITH COPY OF ASSESSMENT ORDER U/S 143(3) OF T HE ACT, PASSED BY DC1T, CIRCLE-1(2), KOLKATA. THE APPELLANT ASSESSEE COMPAN Y ALSO ENCLOSED THE COPY OF RELEVANT ITR, COPY OF PAN. FROM THE RELEVANT AUD ITED ACCOUNT OF M/S SKJ COKE INDUSTRIES LTD. IT IS FURTHER REVEALED THAT SR I HANSRAJ JAIN, SANJAY JAIN, AJAY JAIN AND NAVIN JAIN WERE SHOWN AS SHAREHOLDERS HAVING SUBSTANTIAL SHAREHOLDINGS IN THE COMPANY. ON PERUSAL OF THE REMAND REPORT, IT IS CRYSTAL CLEA R THAT THE PROMOTERS/DIRECTORS OF THE COMPANY HAD APPEARED BEFORE THE AO AND HAD FURNISHE D COPY OF THE AADHAR CARDS TO SUBSTANTIATE THEIR IDENTITIES. THE PROMOTERS/DIRECT ORS HAD SUBMITTED THE COPIES OF PAN CARDS, ITR, BALANCE SHEET, COPY OF RELEVANT LEDGER SHOWING INVESTMENT IN SHARES OF M/S SRI GANESH CEMENT PVT LTD AND ALSO DETAILS OF DISCL OSING SOURCE OF FUNDS FOR PAYMENT OF RELEVANT SHARE APPLICATION BY THE FOUR DIRECTORS OF THE APPELLANT COMPANY. ALL THESE DETAILS WERE CONFIRMED DURING THE APPELLATE PROCEED INGS FROM THE ASSESSMENT RECORDS. AS REGARDS THE SOLE CORPORATE SHARE SUBSCRIBERS M/S SKJ COKE INDUSTRIES LTD, THE AO HAD SUBMITTED THAT SKJ COKE INDUSTRIES LTD WAS PROP RIETOR OF JUPITER CEMENT INDUSTRIES WHICH WAS CONVERTED INTO THE PARTNERSHIP BUSINESS BY TAKING THE APPELLANT COMPANY AS PARTNER. SKJ COKE INDUSTRIES LTD HAD MAD E INVESTMENT AMOUNTING TO RS.50 CRORES IN JUPITER CEMENT INDUSTRIES FROM A.Y. 2007-08 TO A.Y. 2012-13. THE SAID INVESTMENT WAS CONVERTED INTO EQUITY SHARES OF SRI GANESH CEMENT PVT LTD AS PER AGREEMENT DATED 28.11.2011. THE INVESTMENTS MADE BY SKJ COKE INDUSTRIES IN JUPITER CEMENT INDUSTRIES WERE REFLECTED IN THE BALANCE SHE ET OF SKJ COKE INDUSTRIES FROM A.Y. 2007-08 TO A.Y. 2012-13. IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSMENT OF SKJ COKE INDUSTRIES FOR A.Y. 2012-13 WAS COMPLETED U/S 143(3) OF THE I T ACT, 1961 VIDE ORDER DATED 23/03/2015 BY THE DCIT, CIRCLE-1(2), KO LKATA UNDER THE JURISDICTION OF ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 6 | P A GE RANGE-1, KOLKATA UNDER WHOM THE APPELLANT COMPANY W AS ALSO ASSESSED. THE AO HAD NOT MADE ANY ADVERSE COMMENTS ABOUT THE INVESTMENT MADE BY THE SKJ COKE INDUSTRIES LTD IN THE APPELLANT COMPANY AND HAD MAD E DISALLOWANCE U/S 14A OF THE I T ACT ON INVESTMENT OF RS.50 CRORES IN SHARES OF SRI GANESH CEMENT PVT LTD. THEREFORE, IN LIGHT OF THE ABOVE REMAND REPORT, IT CANNOT BE H ELD THAT THE APPELLANT HAD FAILED TO DISCHARGE ITS RESPONSIBILITY FOR PROVING THE IDENTI TY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. THE AO HAD NOT MADE FURTHER EN QUIRIES BUT HAD PREMATURELY CONCLUDED THAT FRESH CAPITAL AMOUNTING TO RS.50,30, 00,000/- IS NOTHING BUT THE APPELLANT'S OWN MONEY CONDUCTED UNDER THE GARB OF F RESH CAPITAL INTO ITS BOOKS OF ACCOUNT.' IN THIS REGARD, REFERENCE MAY BE MADE TO THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS DATAWARE PVT LTD I N I.T.A.T NO. 263 OF 2011, GA NO. 2856 OF 2011 WHERE IT WAS HELD THAT THE AO CANNOT T AKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITORS WHEN THE C REDITORS THEMSELVES ARE THE INCOME TAX ASSESSEE. THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED HEREUNDER: IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSI NG OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME T AX ASSESSEE. AFTER GETTING THE PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE ASSESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINENESS OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER OF THE C REDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSESSING OFFICER HIMSELF COULD NOT ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORT HY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMITTED 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 CREDIT OR AND THE GENUINENESS OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN E STABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX(APPEAL) 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 FIND NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECO RDED BY BOTH THE AUTHORITIES. THE APPEAL IS THUS DEVOID OF ANY SUBSTANCE AND IS S UMMARILY DISMISSED.' THERE IS NO MATERIAL ON RECORD PRODUCED BY THE AO D URING THE ASSESSMENT AND REMAND STAGE WHICH COULD REBUT THE DOCUMENTS PRODUCED BY T HE APPELLANT AND SHARE SUBSCRIBERS AS DISCUSSED HEREINABOVE. THE SHARE SUB SCRIBERS HAD SUBMITTED THE WRITTEN SUBMISSION ALONG WITH SUPPORTING EVIDENCE TO THE AO DURING ASSESSMENT STAGE. THE SHARE SUBSCRIBERS HAD ALSO APPEARED BEFORE THE AO D URING THE REMAND STAGE. AS REGARDS THE SOLE CORPORATE SHARE SUBSCRIBER, ALL DE TAILS OF INVESTMENTS ARE REFLECTED IN THE COMPANY'S AUDITED BALANCE SHEET. THE COMPANY'S RETURN WAS ASSESSED U/S 143(3) OF THE I T ACT, 1961 FOR A.Y. 2012-13. THEREFORE, THERE COULD BE NO GROUND ON WHICH IT COULD BE HELD THAT THE SHARE APPLICANTS WERE BOGUS OR THAT THE SHARE CAPITAL WAS THE APPELLANT'S OWN MONEY ROUTED THROUGH THE SHARE HOLD ERS. THE IDENTITY, CAPACITY AND GENUINENESS OF THE FOUR PROMOTERS/DIRECTORS/SHARE A PPLICANTS COULD NOT BE DOUBTED; ALL FOUR ARE INCOME TAX ASSESSEE'S WHO HAVE BEEN REGULA RLY FILING INCOME TAX RETURN REFLECTING SUBSTANTIAL INCOME. THE AO COULD NOT EST ABLISH THE LACK OF CREDITWORTHINESS AND MERE ALLEGED NONE COMPLIANCE OF SUMMONS ISSUED BY THE AO U/S 131 OF THE ACT, PER SE WILL NOT BE A SUFFICIENT GROUND TO DRAW ANY ADVERSE INFERENCE AGAINST THE APPELLANT. ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 7 | P A GE THERE ARE CATENA OF LAWS WHICH HAVE HELD THAT NO AD DITION CAN BE MADE ON THE BASIS OF SUSPICION, CONJECTURES AND SURMISE. THE AO HAS TO B RING MATERIAL ON RECORD IN SUPPORT OF HIS FINDINGS, THAT THE TRANSACTIONS ARE BOGUS AN D REPRESENTS THE ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES. THE APEX COURT IN THE CAS E OF K.P. VARGHESE VS. INCOME TAX OFFICER (SC) (1981) 131 ITR 0597 HAS HELD THAT THE BURDEN OF PRO VING CONCEALMENT OR UNDERSTATEMENT OF INCOME IS ON THE R EVENUE. 'THIS BURDEN MAY BE DISCHARGED BY THE REVENUE BY ES TABLISHING FACTS AND CIRCUMSTANCES FROM WHICH A REASONABLE INFERENCE CA N BE DRAWN THAT THE ASSESSEE HAS NOT CORRECTLY DECLARED OR DISCLOSED TH E CONSIDERATION RECEIVED BY HIM AND THERE IS AN UNDERSTATEMENT OR CONCEALMENT O F THE CONSIDERATION IN RESPECT OF THE TRANSFER.' THE AO IN THE ASSESSMENT ORDER HAD NOT TAKEN INTO C ONSIDERATION, THE EVIDENCE SUBMITTED BY THE APPELLANT DURING THE COURSE OF ASS ESSMENT PROCEEDING WHILE INVOKING THE PROVISIONS OF 68 OF THE I T ACT, 1961. THE COND ITIONS UNDER WHICH SECTION 68 OF THE ACT COULD BE TRIGGERED HAS BEEN SUCCINCTLY EXPLAINE D BY THE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. P. MOHANAKALA (2007) 291 ITR 278 ,ORDER DATED 15.05.2007 WHERE THE HON'BLE COURT HAS HELD THAT: 'THE QUESTION IS WHAT IS THE TRUE NATURE AND SCOPE OF SECTION 68 OF THE ACT? WHEN AND IN WHAT CIRCUMSTANCES SECTION 68 OF THE AC T WOULD COME INTO PLAY? THAT A BARE READING OF SECTION 68 SUGGESTS THAT THE RE HAS TO BE CREDIT OF AMOUNTS IN THE BOOKS MAINTAINED BY AN ASSESSEES SUC H CREDIT HAS TO BE OF A SUM DURING THE PREVIOUS YEAR; AND THE ASSESSEES OFF ER NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDIT FOUND IN THE BOOKS ; OR THE EXPLANATION OFFERED BY THE ASSESSEES IN THE OPINION OF THE ASSESSING OF FICER IS NOT SATISFACTORY, IT IS ONLY THEN THE SUM SO CREDITED MAY BE CHARGED TO INC OME-TAX AS THE INCOME OF THE ASSESSEES OF THAT PREVIOUS YEAR. THE EXPRESSION THE ASSESSEES OFFER NO EXPLANATION MEANS WHERE THE ASSESSEES OFFER NO PROP ER, REASONABLE AND ACCEPTABLE EXPLANATION AS REGARDS THE SUMS FOUND CR EDITED IN THE BOOKS MAINTAINED BY THE ASSESSEES. IT IS TRUE THAT THE OPINION OF THE ASSESSING OFFICE R FOR NOT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEES AS NOT SATISFA CTORY IS REQUIRED TO BE BASED ON PROPER APPRECIATION OF MATERIAL AND OTHER ATTEND ING CIRCUMSTANCES AVAILABLE ON RECORD. THE OPINION OF THE ASSESSING O FFICER IS REQUIRED TO BE FORMED OBJECTIVELY WITH REFERENCE TO THE MATERIAL A VAILABLE ON RECORD. APPLICATION OF MIND IS THE SINE QUA NON FOR FORMING THE OPINION. ' THE APPELLANT COMPANY HAS ABIDED WITH ALL CODAL FOR MALITIES UNDER THE COMPANIES ACT, 1956, IN INCREASING AUTHORISED SHARE CAPITAL A ND FOR THE ALLOTMENT OF SHARES BY CASH AND CONSIDERATION OTHER THAN CASH. THE APPELLA NT COMPANY SRI GANESH CEMENT PVT LTD. WAS INCORPORATED ON 25.11.2011 AS PER CERTIFICATE OF INCORPORATION ISSUED BY ROC WEST BENGAL WITH AUTHORISED SHARE CAPITAL OF RS.20 LAKHS. THE DIRECTORS OF THE COMPANY ARE SHRI HANSRAJ JAIN, SRI SANJAY JAIN, SRI AJAY KUMAR JAM AND SRI NAVIN KUMAR JAIN. THESE FOUR DIRECTORS ARE ALSO THE DIRECTORS OF SKJ COKE INDUSTRIES PVT LTD. THE BOARD OF DIRECTORS OF THE COMPANY VIDE RESOLUT ION DATED 26.11.2011 RESOLVED TO INCREASE THE AUTHORISED SHARE CAPITAL F ROM RS.20 LAKHS TO ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 8 | P A GE RS.50,50,00,000/-. FORM NO. 5 WAS FILED WITH ROC WE ST BENGAL ON 28.11.2011. THE APPELLANT COMPANY HAD PAID ROC FEES OF RS.25,85,000 /- FOR INCREASING AUTHORISED SHARE CAPITAL BY RS.50,30,00,000/-. THE PAYMENT WAS MADE VIDE DEMAND DRAFT NO. 024621 DATED 26.11.2011 WHICH WAS DEPOSITED ON 28.1 1.2011. THE BOARD OF DIRECTORS SUBSEQUENTLY VIDE RESOLUTION DATED 28.11.2011 HAD R ESOLVED TO ISSUE 5 CRORES EQUITY SHARES OF RS.10/- EACH EQUIVALENT TO SHARE CAPITAL OF RS.50 CRORES IN FAVOUR OF SKJ COKE INDUSTRIES LTD IN LIEU OF PURCHASE OF THE UNDE RTAKING NAMELY M/S JUPITER CEMENT INDUSTRIES FROM THE SAID COMPANY. THE RESPECTIVE FO RM 2 HAS BEEN FILED WITH ROC WEST BENGAL AND ROC FEES PAID ON 07.12.2011. IN FOR M NO. 2, IT WAS CLEARLY MENTIONED THAT THE SHARES WERE ALLOTTED FOR CONSIDE RATION OTHERWISE THAN CASH. THE APPELLANT COMPANY HAD ALSO AMENDED ITS OBJECT LAWS IN THE MEMORANDUM OF ASSOCIATION OF THE COMPANY TO INCORPORATE THE ACQUI SITION OF M/S JUPTIER CEMENT INDUSTRIES AND FILED RESPECTIVE FORM 23 ALONG WITH FEES WITH ROC WEST BENGAL ON 19.12.2011. THE EVIDENCE PRODUCED BY THE APPELLANT DURING ASSES SMENT, APPELLATE AND REMAND STAGES, ALL POINT TO THE FACT THAT THE IDENTITY OF THE SHARE APPLICANTS, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE APPLICANTS COULD NOT BE DISPUTED. THERE IS NO EVIDENCE ON RECORD TO HOLD SUCH EVIDENCE TO BE PERV ERSE. THE BOMBAY HIGH COURT AT GOA IN THE MATTER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX VS. M/S PARADISE INLAND SHIPPING PVT. LTD. , TAX APPEAL NO. 66 OF 20 16, ORDER DATED 10.04.2017, THE COURT HELD THAT: '7. THE APPELLANTS HAVE FAILED TO EXPLAIN AS TO HOW SUCH COMPANIES HAVE BEEN ASSESSED THOUGH ACCORDING TO THEM SUCH COMPANIES AR E NOT EXISTING AND ARE FICTITIOUS COMPANIES. BESIDES THE DOCUMENTS ALSO IN CLUDED THE REGISTRATION OF THE COMPANY WHICH DISCLOSES THE REGISTERED ADDRESS OF SUCH COMPANIES. THERE IS NO MATERIAL ON RECORD PRODUCED BY THE APPELLANTS WHICH COULD REBUT THE DOCUMENTS PRODUCED BY THE RESPONDENTS HEREIN. IN SU CH CIRCUMSTANCES, THE FINDING OF FACT ARRIVED AT BY THE AUTHORITIES BELOW WHICH ARE BASED ON DOCUMENTARY EVIDENCE ON RECORD CANNOT BE SAID TO BE PERVERSE. LEARNED COUNSEL APPEARING FOR THE APPELLANTS WAS UNABLE TO POINT OUT THAT ANY OF SUCH FINDINGS ARRIVED AT BY THE AUTHORITIES BELOW WERE O N THE BASIS OF MISLEADING OF EVIDENCE OR FAILURE TO EXAMINE ANY MATERIAL DOCUMEN TS WHILST COMING TO SUCH CONCLUSIONS. UNDER THE GUISE OF THE SUBSTANTIAL QUE STION OF LAW, THIS COURT IN AN APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT CANNOT RE-APPRECIATE THE EVIDENCE TO COME TO ANY CONTRARY EVIDENCE. CONSIDER ING THAT THE AUTHORITIES HAVE RENDERED THE FINDINGS OF FACTS BASED ON DOCUME NTS WHICH HAVE NOT BEEN DISPUTED, WE FIND THAT THERE IS NO SUBSTANTIAL QUES TION OF LAW WHICH ARISES IN THE PRESENT APPEAL FOR CONSIDERATION. ' THE REVENUE HAD FILED SLP WITH THE APEX COURT AGAIN ST THE ORDER OF THE BOMBAY HIGH COURT WHICH HAS BEEN DISMISSED BY THE APEX COURT VI DE SLP DIARY (CIVIL) NO. 12644/2018, ORDER DATED 23.04.2018 WITH THE OBSERVA TION THAT: 'WE DO NOT FIND ANY GROUND TO INTERFERE WITH THE IM PUGNED ORDER. THE SPECIAL LEAVE PETITION IS, ACCORDINGLY, DISMISSED.' THE A/R OF THE APPELLANT HAD CITED THE DECISION OF THE JURISDICTIONAL TRIBUNAL IN THE CASE OF M/S STAR GRIHA PRAVESH PVT LTD VS CIT, I.T. A NO. 1244/KOL/2013 AND M/S ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 9 | P A GE BISAKHA SALES PVT LTD V CIT, I.T.A. NO,1493/KOL/201 3, IN THE ASSESSMENT ORDER TO HOLD THAT SHARE CAPITAL OF RS.50,30,00,000/- IS UNEXPLAI NED CASH CREDIT FOUND IN THE BOOKS OF THE APPELLANT. THESE TWO CASE LAWS OF THE JURISDICT IONAL TRIBUNAL ARE DISTINGUISHED. THEY RELATE TO THE REVISIONARY POWERS OF THE CIT U/ S 263 OF THE ACT. IN BOTH CASES, THE JURISDICTIONAL TRIBUNAL HAD ADJUDICATED ON THE JURI SDICTION OF THE COMMISSIONER TO PASS AN ORDER U/S 263 OF THE I T ACT. THEY HAVE NOT ADJUDICATED ON THE FACTS OF THE CASE. SECONDLY, IN BOTH CASES CITED BY THE AO, THE SHARES WERE ISSUED AT PREMIUM AS NO SPECIFIC INVESTIGATION HAS BEEN DONE BY THE AO ON S HARE APPLICATION RECEIVED FROM ALLEGED SHELL COMPANIES. IN CONCLUSION, IT HAS TO BE HELD THAT THE AO HAS NO T BROUGHT ANY CLINCHING EVIDENCE ON RECORD IN SUPPORT OF HIS FINDINGS THAT THE APPELLAN T HAD USED THE ROUTE OF FRESH SHARE CAPITAL TO INTRODUCE HIS UNACCOUNTED MONEY INTO THE BOOKS OF ACCOUNTS. THE ASSESSMENT ORDER HAS BEEN MADE WITHOUT TAKING INTO CONSIDERATION THE DOCUMENTS SUBMITTED BY THE APPELLANT AND THE SHARE HOLDERS DU RING ASSESSMENT PROCEEDINGS. IT COULD NOT BE UNDERSTOOD UNDER WHAT CIRCUMSTANCES TH E AO CONCLUDED THAT THE APPELLANT HAD FAILED TO DISCHARGE ITS BURDEN OF PRO OF IN THE LIGHT OF VOLUMINOUS DOCUMENTS SUBMITTED DURING ASSESSMENT PROCEEDINGS. THE ADDITION OF RS.50,30,00,000/- HAS BEEN MADE PRIMARILY BECAUSE T HE AO HAD HELD THAT THE SHARE HOLDERS DID NOT RESPONDED TO SUMMONS ISSUED U/S 131 OF THE ACT. HOWEVER, THE AO HAD NOT TAKEN INTO CONSIDERATION THE WRITTEN SUBMISSION GIVEN BY THE SHAREHOLDERS DURING ASSESSMENT PROCEEDINGS. THE AFFIDAVITS SUBMITTED BY THE SHAREHOLDERS DURING THE APPEAL PROCEEDINGS AND RELEVANT SUBMISSIONS DURING ASSESSMENT PROCEEDINGS INCLUDING REMAND REPORT, CLEARLY ABSOLVES THE APPEL LANT OF NON COOPERATION, AS HELD BY THE AO IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT, WHICH WAS THE MAIN PLANK FOR THE ADDITION OF SHARE CAPITAL AS UNE XPLAINED CASH CREDIT U/S 68 OF THE I T ACT, 1961 . A CONSPECTUS OF THE TRANSACTIONS INVOLVED INDICAT ES THAT M/S SKJ COKE INDUSTRIES LTD HAS TRANSFERRED STAKE IN ITS UNIT M/ S JUPITER CEMENT INDUSTRIES IN LIEU OF SHARES OF THE APPELLANT COMPANY. THESE TRANSACTIONS COME WITHIN THE DEFINITION OF BARTER/EXCHANGE. SECTION 68 WOULD THEREFORE NOT APP LY ON THESE TRANSACTIONS AS DISCUSSED HEREINABOVE. THIS IS NOT A CASE WHERE SHA RES HAVE BEEN SUBSCRIBED BY SHELL COMPANIES AT A PREMIUM. THEREFORE, IN LIGHT OF THE SUBMISSION MADE BY THE A/R OF THE APPELLANT, RELEVANT JUDICIAL DECISIONS AND PERUSAL OF THE REMAND REPORT AND ASSESSMENT RECORDS, THE ADDITION OF RS.50,30,00,000/- IS DELET ED. THESE GROUNDS OF APPEAL SUCCEED AND ARE THEREFORE ALLOWED. THE A.O. IS DIRECTED ACC ORDINGLY. 4. IN THE RESULT, THE APPEAL IS ALLOWED.[EMPHASIS GIVEN BY US ] 6. AGGRIEVED BY THE AFORESAID ACTION OF LD. CIT(A), THE REVENUE IS BEFORE US BY RAISING THE GROUNDS OF APPEALS (SUPRA). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. WE NOTE THAT AO HAS MADE THE ADDITION ON THE BASIS THAT DESPITE SENDING NOTICES/SUMMONS, NONE OF THE DIRECTORS OF THE ASSESSEE COMPANY NOR THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANIES APPEARED BEFORE HIM, THEREFORE HE MADE AN ADDITION OF RS. 50.30 CRORES. ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 10 | P A GE ON APPEAL THE LD. CIT(A) HAS CALLED FOR REMAND REPO RT ( TWICE ) AND HAS REPRODUCED THE REMAND REPORT ( FINAL REMAND REPORT ) (SUPRA) FROM WHICH IT IS DISCERNED THAT THE LD. A.R OF THE ASSESSEE SHRI R. DUBEY APPEARED BEFO RE THE AO AND HAD FILED DETAILS AND DOCUMENTS IN SUPPORT OF CLAIM AND THEREAFTER ON 19.01.2017, THE PROMOTER DIRECTORS OF THE ASSESSEE COMPANY NAMELY SHRI HANSR AJ JAIN, SHRI SANJAY JAIN, SHRI AJAY KUMAR JAIN AND SHRI NAVIN KR. JAIN APPEARED BEFORE THE AO AND IN SUPPORT OF ITS CLAIM HAD FURNISHED COPY OF RESPECTIVE AADHAR C ARDS TO SUBSTANTIATE THEIR IDENTITIES. FURTHER, THE AO NOTES THAT THE ASSESSEE HAD FILED ON 19.10.2017 (I) COPY OF RELEVANT PAN CARDS, (II) COPY OF ITR FOR AY 2012-13 , (III) COPY OF RELEVANT BALANCE SHEET ALONG WITH COPY OF COMPUTATION OF TOTAL INCOM E, COPY OF LEDGER SHOWING INVESTMENT IN SHARES OF M/S SHRI GANESH CEMENT PVT. LTD. AND (IV) COPY OF LETTER DISCLOSING SOURCE OF FUNDS FOR PAYMENT OF RELEVANT APPLICATION IN RESPECT OF ALL THE FOUR DIRECTORS OF THE ASSESSEE COMPANY. BE THAT AS IT MAY BE, WE NOTE THE FOLLOWING FACTS AS FOUND BY THE LD CIT(A) THAT THE ASSESSEE C OMPANY HAS ABIDED WITH ALL THE LEGAL FORMALITIES/REQUIREMENTS UNDER THE COMPANIES ACT, 1956, WHILE INCREASING ITS AUTHORIZED SHARE CAPITAL AND FOR THE ALLOTMENT OF S HARES BY CASH AND CONSIDERATION OTHER THAN CASH . THE ASSESSEE COMPANY SRI GANESH CEMENT PVT LTD. W AS INCORPORATED ON 25.11.2011 AS PER CERTIFICATE OF IN CORPORATION ISSUED BY ROC WEST BENGAL WITH AUTHORIZED SHARE CAPITAL OF RS.20 LAKHS. AND THE DIRECTORS OF THE ASSESSEE COMPANY ARE SHRI HANSRAJ JAIN, SRI SANJAY JAIN, SRI AJAY KUMAR JAM AND SRI NAVIN KUMAR JAIN. THESE FOUR DIRECTORS ARE ALSO THE DIRECTORS OF M/S SKJ COKE INDUSTRIES PVT LTD. [ SHARE-ALLOTTED COMPANY ]. SO, IT IS AN INTRA-GROUP INCIDENT, SO QUESTION OF IDENTITY OF THE DIRECTORS OF M/S SKJ CO KE INDUSTRIES PVT LTD NEED NOT BE DOUBTED SINCE ALL OF THEM ARE DIRECTORS OF ASSESSEE COMPANY AND IS AN INTRA-GROUP ARRANGEMENT . FURTHER IT IS NOTED THAT THE BOARD OF DIRECTORS O F THE ASSESSEE COMPANY VIDE RESOLUTION DATED 26.11.2011 RESOLVED TO INCREA SE THE AUTHORIZED SHARE CAPITAL FROM RS.20 LAKHS TO RS.50,50,00,000/-. AND FORM NO. 5 WAS DULY FILED WITH ROC WEST BENGAL ON 28.11.2011. THE ASSESSEE COMPANY HAD PAID ROC FEES OF RS.25,85,000/- FOR INCREASING AUTHORIZED SHARE CAPI TAL BY RS.50,30,00,000/-. THE PAYMENT WAS MADE VIDE DEMAND DRAFT NO. 024621 DATED 26.11.2011 WHICH WAS DEPOSITED ON 28.11.2011. THE BOARD OF DIRECTORS SUB SEQUENTLY VIDE RESOLUTION DATED ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 11 | P A GE 28.11.2011 HAD RESOLVED TO ISSUE 5 CRORES EQUITY SH ARES OF RS.10/- EACH EQUIVALENT TO SHARE CAPITAL OF RS.50 CRORES IN FAVOUR OF M/S SKJ COKE INDUSTRIES LTD IN LIEU OF PURCHASE OF THE UNDERTAKING NAMELY M/S JUPITER CEME NT INDUSTRIES FROM THE SAID COMPANY. THE RESPECTIVE FORM 2 HAS BEEN FILED WITH ROC WEST BENGAL AND ROC FEES PAID ON 07.12.2011. IN FORM NO. 2, IT WAS CLEA RLY MENTIONED THAT THE SHARES WERE ALLOTTED FOR CONSIDERATION OTHERWISE THAN BY C ASH . THE ASSESSEE COMPANY HAD ALSO AMENDED ITS OBJECTS IN THE MEMORANDUM OF ASSOC IATION OF THE COMPANY TO INCORPORATE THE CONTROL/MANAGEMENT OF M/S JUPTIER C EMENT INDUSTRIES AND FILED RESPECTIVE FORM 23 ALONG WITH FEES WITH ROC WEST BE NGAL ON 19.12.2011. THE LD CIT(A) HAS GIVEN A FINDING OF FACT BASED ON THE AFO RESAID FACTS THAT EVIDENCE PRODUCED BY THE ASSESSEE DURING ASSESSMENT, APPELLA TE AND REMAND STAGES, ALL POINT TO THE FACT THAT THE IDENTITY OF THE SHARE APPLICAN TS, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE APPLICANTS COULD NOT BE DISPUTED . WE NOTE THE REVENUE HAS NOT CONTROVERTED OR ASSAILED THESE FINDING OF F ACTS AND MOREOVER, THERE IS NO EVIDENCE/MATERIAL ON RECORD TO HOLD SUCH FINDING OF LD CIT(A) TO BE PERVERSE. 8. IN THE AFORESAID FACTUAL BACK GROUND WE FURTHER EXAMINED ABOUT THE SHARE SUBSCRIBING COMPANY NAMELY M/S SKJ COKE INDUSTRIES LTD. IN THE FINAL REMAND REPORT, THE AO NOTES THAT THE ASSESSEE COMPANY HAS FILED THE WRITTEN SUBMISSION FROM WHICH FOLLOWING FACTS CAN BE DISCERNED WHICH IS SEE N AT PAGE 39 OF LD. CIT(A)S IMPUGNED ORDER WHEREIN REMAND REPORT OF AO BEING RE PRODUCED AGAIN FOR READY REFERENCE: A. THAT EARLIER SKJ COKE INDUSTRIES LIMITED WAS PR OPRIETOR OF JUPITER CEMENT INDUSTRIES THEREAFTER CONVERTED THE SAID PROPRIETORSHIP INTO PARTNERSHIP BUSINESS BY TAKING SRI GANESH CEME NT PRIVATE LIMITED AS PARTNER. THEREAFTER, BY MUTUAL DISCUSSION THE SA ID PARTNERSHIP FIRM HAS BEEN DISSOLVED AND SRI GANESH CEMENT PVT LTD HA S BECOME THE PROPRIETOR OF JUPITER CEMENT INDUSTRIES BY TAKEN OV ER ALL ASSETS AND LIABILITIES OF PARTNERSHIP. B. THAT SKJ COKE INDUSTRIES LIMITED WAS MADE THE I NVESTMENT IN SAID PROPRIETORSHIP BUSINESS SINCE FINANCIAL YEAR 2 006-07 ON WARD AND SAID INVESTMENT WAS CONVERTED INTO EQUITY SHARES OF SRI GANESH CEMENT PRIVATE LIMITED WHICH ARE AS UNDER: SOURCE OF INVESTMENT AMOUNT ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 12 | P A GE FINANCIAL YEAR 2006-07 RS.1,22,60,319/- 2007-08 RS. 3,65,04,344/- 2008-09 RS. 1,05,22,926/- 2009-10 RS. 2,83,49,372/- 2010-11 RS. 7,10,33,701/- 01.04.11 TO 26.11.11 RS. 34,13,29,338/- ----------------------- TOTAL RS. 50,00,00,000/- IT WAS STATED THAT M/S SKJ COKE INDUSTRIES LTD. HAD AGREED TO TRANSFER THE PROPERTY OF M/S JUPITER CEMENT INDUSTRIES TO M/S GA NESH CEMENT PVT LTD VIDE A DEED OF AGREEMENT DATED 28.11.2011. IT WAS FURTHER STATED THAT M/S GANESH CEMENT PVT LTD AGREED TO SATISFY THE LIABILITIES OF M/S SKJ COKE INDUSTRIES LIMITED AS ON DATE OF DISSOLUTION (28.11.2011) BY A LLOTTING EQUITY SHARE OF THE COMPANY TO M/S GANESH CEMENT PVT LTD. THE APPELLANT ASSESSEE COMPANY HAD SUBMITTED THE RE LEVANT AUDITED ACCOUNTS OF THE RELEVANT ASSESSMENT YEAR 2012-13 OF M/S SKJ COKE INDUSTRIES LIMITED ALONG WITH COPY OF ASSESSMENT ORDER U/S 143(3) OF T HE ACT, PASSED BY DC1T, CIRCLE-1(2), KOLKATA. THE APPELLANT ASSESSEE COMPAN Y ALSO ENCLOSED THE COPY OF RELEVANT ITR, COPY OF PAN. FROM THE RELEVANT AUD ITED ACCOUNT OF M/S SKJ COKE INDUSTRIES LTD. IT IS FURTHER REVEALED THAT SR I HANSRAJ JAIN, SANJAY JAIN, AJAY JAIN AND NAVIN JAIN WERE SHOWN AS SHAREHOLDERS HAVING SUBSTANTIAL SHAREHOLDINGS IN THE COMPANY. 9. FROM A PERUSAL OF AFORESAID FACTS IT IS DISCERNE D THAT THE SHARE APPLICANT M/S SKJ COKE INDUSTRIES LTD. HAD COMMON DIRECTORS AND H AD MADE INVESTMENT AMOUNTING TO RS. 50 CRORES IN M/S JUPITER CEMENT IN DUSTRIES LTD. FOR AY 2007-08 TO AY 2012-13 (UPTO 26/11/2011) AND AGREED TO GIVE CON TROL/MANAGEMENT OF M/S JUPITER CEMENT INDUSTRIES TO THE ASSESSEE COMPANY ( M/S SHRI GANESH CEMENT PVT. LTD.) IN LIEU OF ALLOTMENT OF FIVE CRORE EQUITY SHA RES OF FACE VALUE OF RS 10/- EACH VIDE DEED OF AGREEMENT DATED 28.11.2011 [ WHEREIN THERE WAS A MISTAKE AT PAGE 3 OF PB-II ]WHICH READS AS UNDER: 4. THAT THE SECOND PARTY AGREED TO SATISFY THE LIAB ILITIES OF FIRST PART AS ON DATE OF DISSOLUTION BY ALLOTTING EQUITY SHARE OF THE COMPAN Y TO THE SECOND PARTY. 4. THAT THE SECOND PART AGREED TO SATISFY THE LIABI LITIES OF FIRST PART AS ON DATE OF DISSOLUTION BY ALLOTTING 5,00,00,000 EQUITY SHARES OF RS. 10.00 EACH OF THE COMPANY TO THE FIRST PART. ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 13 | P A GE 10. THE AFORESAID MISTAKE HAS BEEN CORRECTED BY DE ED OF AGREEMENT DATED 09.12.2011, WHEREIN THE FOLLOWING HAS BEEN ADDED ( CORRECTED THE MISTAKE IN THE ORIGINAL AGREEMENT DATED 28.11.2011 ) WHICH READS AS UNDER: WHEREAS A DEED OF AGREEMENT HAS BEEN MADE BETWEEN THE TWO PARTIES FIRST & SECOND PART WHICH IS EXECUTED ON 28.11.2011 AND BOT H THE PARTIES HAVE DECIDED FURTHER TO MODIFY / RECTIFY THE TERMS AND CONDITIONS AS MEN TIONED IN ORIGINAL DEED OF AGREEMENT. WHEREAS THE PARTIES HERE TO HAVE CONSIDERED IT DESI RABLE TO HAVE WRITTEN INSTRUMENT OF EMBODYING THE TERMS AND CONDITIONS ALREADY SETTLED AGREED UPON THEM. NOW THIS INDENTURE OF AGREEMENT WITNESSTH AS FOLLOW S: 1. THAT THIS SUPPLEMENTAL DEED OF AGREEMENT SHALL BE E FFECTIVE FROM 09.12.2011 FROM WHICH DATE THE PARTIES ARE ABIDING BY THE TERMS AND CONDITION OF THIS DOCUMENTS. 2. THAT THE PARTY OF THE FIRST PART M/S SKJ COKE INDUS TRIES LIMITED AGREED TO TRANSFER THE PROPERTY OF BOTH TANGIBLE & INTANGIBLE M/S JUPITER CEMENT INDUSTRIES TO THE SECOND PART. 3. THAT ON THE DATE OF DISSOLUTION, ALL THE LIABILITIE S OF M/S JUPITER CEMENT INDUSTRIES APPROX ASSESSED VALUE OF RS. 50.00 CRORE (RUPEES FIFTY CRORE ONLY) AND ASSETS OF M/S JUPITER CEMENT INDUSTRIES APPROX ASS ESSED VALUE OF RS. 50.00 CRORE TRANSFERRED TO THE SECOND PART. 4. THAT THE SECOND PART AGREED TO SATISFY THE LIABILIT IES OF FIRST PART AS ON DATE OF DISSOLUTION BY ALLOTTING 5,00,00,000 EQUITY SHARES OF RS. 10.00 EACH OF THE COMPANY TO THE FIRST PART. 5. THAT THE FIRST PART AGREED THE TERMS AS MENTIONED I N PARA NO. 4. 6. THAT THE GOODWILL OF THE SAID BUSINESS AND ALL LICE NSE PERMITS AND TRADE MARK CONNECTED THEREWITH HAVE AUTOMATICALLY TRANSFERRED TO THE SECOND PART. 7. THAT THIS SUPPLEMENTAL DEED OF AGREEMENT IS INTEGRA L PART OF THE ORIGINAL DEED OF AGREEMENT DATED 28.11.2011. FROM A PERUSAL OF THE AGREEMENT [28.11.2011 AND 09. 12.2011] IT IS NOTED THAT THE ASSESSEE COMPANY [M/S SHRI GANESH CEMENT PVT. LTD.] ISSUED /ALLOTTED ON 28.11.2011 RS. 50 CRORES WORTH EQUITY SHARES OF FACE VALUE OF RS. 10/- EACH TO M/S SKJ COKE INDUSTRIES IN LIEU OF TANGIBLE AND INTANGIBLE ASSET S OF M/S JUPITER CEMENT INDUSTRIES. FROM THE REMAND REPORT IT IS NOTED THAT THE AO HAS TAKEN NOTE OF THE AUDITED ACCOUNTS OF M/S SKJ COKE INDUSTRIES LTD. FOR AY 2012-13 ALON G WITH COPY OF SCRUTINY ASSESSMENT ORDER U/S 143(3) OF THE ACT PASSED BY DC IT, CIRCLE-1(2), KOLKATA. THE AO NOTES THAT THE COPY OF RELEVANT ITR, COPY OF PAN WAS ALSO BROUGHT TO HIS NOTICE. THE AO NOTES FROM THE AUDITED ACCOUNTS OF M/S SKJ COKE INDUSTRIES LTD. THAT SHRI HANSRAJ JAIN, SHRI SANJAY JAIN, SHRI AJAY KUMAR JAI N AND SHRI NAVIN KR. JAIN WERE SHARE HOLDERS IN THE SAID COMPANY HAVING SUBSTANTIA L SHARE HOLDINGS IN THE COMPANY, SO IT PROVES THAT IT WAS ARRANGEMENT WITHIN THE GRO UP. BASED ON THE AFORESAID REMAND REPORT AS WELL AS DOCUMENTS PRODUCED BEFORE HIM THE LD. CIT(A) HAS NOTED THAT THE ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 14 | P A GE PROMOTERS/DIRECTORS OF THE ASSESSEE COMPANY IN ORDE R TO SUBSTANTIATE THEIR IDENTITIES HAD SUBMITTED I) AADHAR CARDS, II) PAN CARDS, III) ITRS, IV) BALANCE SHEET AND V) COPY OF RELEVANT LEDGER SHOWING INVESTMENT IN SHARE S OF M/S GANESH CEMENT PVT. LTD.; AND ALSO DETAILS WERE FILED DISCLOSING SOURCE OF FUNDS OF PAYMENT OF RS 30 LAKHS WHICH WERE SUBSCRIBED BY THE FOUR DIRECTORS O F THE COMPANY. THE LD. CIT(A) HAS MADE A FINDINGS THAT ALL THE DETAILS AS DISCLOS ED WERE CORROBORATED/CONFIRMED BY HIM DURING THE APPELLATE PROCEEDINGS BEFORE HIM WHI CH ARE ALREADY AVAILABLE IN THE ASSESSMENT RECORDS. THE LD. CIT(A) ALSO FINDS THAT THE SOLE CORPORATE SHARE SUBSCRIBERS M/S SKJ COKE INDUSTRIES LTD. HAS MADE I NVESTMENT AMOUNTING TO RS. 50 CRORES IN M/S JUPITER CEMENT INDUSTRIES LTD. FOR AY 2007-08 TO AY 2012-13 AND THE SAID INVESTMENT WAS CONVERTED IN TO THE EQUITY SHAR ES OF ASSESSEE COMPANY [M/S SHRI GANESH CEMENT PVT. LTD.] AS PER THE AGREEMENT DATED 28.11.2011 WHICH FACT OF INVESTMENT MADE BY M/S SKJ COKE INDUSTRIES LTD. IN M/S JUPITER CEMENT INDUSTRIES WERE DULY REFLECTED IN THE BALANCE SHEET OF M/S SKJ COKE INDUSTRIES FROM AY 2007- 08 TO AY 2012-13. THE LD. CIT(A) ALSO TOOK NOTE OF THE FACT THAT THE SCRUTINY ASSESSMENT IN RESPECT OF THE SHARE SUBSCRIBING COMP ANY M/S SKJ COKE INDUSTRIES LTD. FOR THE RELEVANT AY 2012-13 WAS COMPLETED U/S 143(3) OF THE ACT BY ORDER DATED 23.03.2015 BY THE DCIT, CIRCLE-1(2), KOLKATA WHO IS UNDER THE JURISDICTION OF RANGE-1, KOLKATA UNDER WHOM THE ASSESSEE COMPANY WA S ALSO ASSESSED. THE LD. CIT(A) TOOK NOTE OF THE FACT THAT THE AO OF THE SHA RE SUBSCRIBING COMPANY M/S SKJ COKE INDUSTRIES LTD. HAS NOT MADE ANY ADVERSE INFER ENCE/VIEW ABOUT THE INVESTMENT MADE BY SHARE SUBSCRIBING COMPANY IN THE ASSESSEE C OMPANY AND IN THE SCRUTINY ASSESSMENT HAS MADE DISALLOWANCE U/S 14A OF THE ACT ON INVESTMENT OF RS. 50 CRORES WHICH THE SHARE SUBSCRIBING COMPANY HAS MADE IN THE SHARES OF THE ASSESSEE COMPANY. THE LD. CIT(A) IN THE LIGHT OF THE AFORESA ID FACTS EMANATING FROM THE REMAND REPORT (SUPRA) AND THE DOCUMENTS FILED BY TH E ASSESSEE WHICH IS AVAILABLE IN THE ASSESSMENT RECORDS CORROBORATING THESE FACTS, T HE LD. CIT(A) WAS OF THE OPINION THAT THE ASSESSEE HAD DISCHARGED ITS RESPONSIBILITY TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE LD. CIT(A) FURTHER NOTES THAT THE AO HAS NOT MADE ANY ENQUIRIES IN RESPECT O F THIS ADDITION MADE. THE LD. CIT(A) TOOK NOTE OF THE DECISION OF THE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 15 | P A GE OF CIT VS. DATA WARE PVT. LTD. IN ITAT NO. 263 OF 2 011 [GA NO. 2856 OF 2011] WHEREIN THE HONBLE HIGH COURT HAS STATED THAT WHEN THE ASSESSEE HAS GIVEN THE PAN DETAILS OF THE SHARE SUBSCRIBERS, THE AO COULD NOT DRAW ADVERSE INFERENCE AGAINST THE SHARE SUBSCRIBERS WHO ARE INCOME TAX ASSESSEE, UNLE SS THE AO OF THE SHARE SUBSCRIBING COMPANIES REJECTED THEIR RETURN OF INCO ME AND CANNOT BRAND SHARE SUBSCRIBERS AS UNWORTHY OF CREDENCE. IN THE WORDS O F HONBLE HIGH COURT .AFTER GETTING THE PAN NUMBER AND GETTING THE I NFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE ASSESSING OFFICER SHOUL D ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINENESS OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER OF THE CREDITOR B UT INSTEAD OF ADOPTING SUCH COURSE, THE 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 ESTABLIS HED THAT THE RETURN SUBMITTED 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 IDENTI TY OF THE CREDITOR AND THE GENUINENESS OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEE N ESTABLISHED THE LD. CIT(A) HAS NOTED THAT SINCE THE ASSESSEE COMPANY AN D SHARE SUBSCRIBING COMPANY OF RS. 50 CRORES IS UNDER THE SAME RANGE HEAD AND SINC E THE SHARE SUBSCRIBING COMPANYS RETURN OF INCOME HAS BEEN SCRUTINIZED U/S 143(3) OF THE ACT AND SINCE THERE WAS NO ADVERSE FINDING MADE BY AO OF THE SHAR E SUBSCRIBING COMPANY (M/S SKJ COKE INDUSTRIES LTD.) THE AO OUGHT NOT TO HAVE BRANDED IT UNWORTHY OF CREDENCE. THE LD. CIT(A) FOUND THAT AO DURING THE O RIGINAL ASSESSMENT AND DURING THE REMAND PROCEEDINGS COULD NOT FIND ANY FAULT IN THE DOCUMENTS SUBMITTED BY THE ASSESSEE TO SUBSTANTIATE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE SUBSCRIBERS INCLUDING (I) M/S SKJ COKE INDUSTRIES ( 50 CRORES) (II) THE DIRECTORS OF THE ASSESSEE COMPANY (30 LAKHS). IN THE LIGHT OF THE AF ORESAID FINDINGS, THE LD. CIT(A) REPELLED THE AOS OBSERVATION THAT THE SHARE APPLIC ANTS WERE BOGUS. THE LD. CIT(A) HAS RIGHTLY OBSERVED THAT AO COULD NOT HAVE MADE TH E ADDITION ONLY ON THE REASON THAT THE DIRECTORS OF THE ASSESSEE / SHARE SUBSCRIB ING COMPANIES DID NOT TURN UP BEFORE HIM. HOWEVER, THE LD. CIT(A) HAS NOTED THAT THE DIR ECTORS OF THE ASSESSEE COMPANY HAD APPEARED BEFORE THE AO IN THE REMAND PROCEEDING S AS WELL AS FILED ALL THE DETAILS TO SUBSTANTIATE THEIR IDENTITY, CREDITWORTHINESS AN D GENUINITY OF THE SHARE SUBSCRIBING ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 16 | P A GE WHICH THEY HAD MADE THE THEIR INDIVIDUAL CAPACITY O F RS. 30 LAKHS AS WELL AS THE FACT THAT THE SOLE CORPORATE SUBSCRIBER M/S SKJ COKE IN DUSTRIES HAS BEEN ASSESSED U/S 143(3) OF THE ACT FOR AY 2012-13 UNDER THE SAME RAN GE HEAD, SO HE ACCEPTED THE SHARE SUBSCRIPTION RECEIVED BY THE ASSESSEE COMPANY TO THE TUNE OF RS. 50.30 CRORES, WHICH FINDING WE CONCUR AND MORE OVER, WE FIND THAT BOTH THE ASSESSEE COMPANY AND THE SHARE-SUBSCRIBING COMPANY HAD COMMON DIRECTORS, AND BEFORE US, THE REVENUE FAILED TO DEMONSTRATE THAT THE FACTUAL FINDING OF L D CIT(A) IN THIS RESPECT IS PERVERSE. SO, WE UP-HOLD THE ACTION OF LD CIT(A) AND FOR THAT WE RELY ON THE DECISION OF HONBLE GUJRAT HIGH COURT IN PCIT VS. GYSCOL ALLOYS LTD. IN TAX APPEAL NO. 1180/ 2018 DECIDED ON 01.10.2018, WHEREIN THE HONBLE HIG H COURT DECLINED THE REVENUES IDENTICAL STAND SEEKING TO JUSTIFY SIMILA R ADDITION U/S 68 OF THE ACT TREATING IT AS CASH CREDIT IN THE NATURE OF SHARE A PPLICATION /PREMIUM COMING FROM GROUP ENTITIES AS UNDER: REVENUE IS IN APPEAL AGAINST THE JUDGMENT OF THE I NCOME TAX APPELLATE TRIBUNAL, AHMEDABAD BENCH {'TRIBUNAL' FOR SHORT} RAISING THE FOLLOWING SUBSTANTIAL QUESTION FOR OUR CONSIDERATION : 'WHETHER APPELLATE TRIBUNAL HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF RS. 9,99,99, 900/= AS PER THE PROVISION OF SECTION 68 OF THE INCOME-TAX ACT, WITHOUT PROPERLY APPRECIA TING THE FACTS OF CASE AND THE MATERIAL BROUGHT ON RECORD ?' THE ISSUE PERTAINS TO THE SHARE APPLICATION MONEY RECEIVED BY THE RESPONDENT-ASSESSEE- COMPANY. THE ASSESSING OFFICER ADDED A SUM OF RS. 9 .99 CRORES [ROUNDED OFF] IN THE HANDS OF THE ASSESSEE WITH THE AID OF SECTION 68 OF THE INCOME-TAX ACT, 1961 ['THE ACT' FOR SHORT]. CIT [A] DELETED SUCH ADDITION PRIMARILY ON THE GROUND THAT THE ASSESSEE HAD ESTABLISHED THE SOURCE, GENUINENESS OF THE TRANSACT IONS AND THE CREDITWORTHINESS OF THE INVESTORS. IN FURTHER DETAILED CONSIDERATION, THE T RIBUNAL CONFIRMED THE VIEW OF CIT [A], MAKING THE FOLLOWING OBSERVATIONS :- 'I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT. THE APPELLANT HAS RECE IVED AN AMOUNT OF RS. 9,99,99,900/- ON ACCOUNT OF SHARE CAPITAL AND SHARE PREMIUM FROM M/S. GENERAL CAPITAL AND HOLDING CO. PVT. LTD, AHMEDABAD DURING THE YEAR. THE AO HEL D THAT THE CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTION WERE NOT PROVED BY T HE APPELLANT AND ACCORDINGLY MADE THE ADDITION UNDER SECTION 68 OF THE ACT FOR THE AB OVE AMOUNT. THE APPELLANT HAS SUBMITTED THAT ALL THREE INGREDIENTS SUCH AS, CREDI T WORTHINESS, GENUINENESS AND THE IDENTITY OF THE SHARE APPLICANT HAVE BEEN PROVED AN D THEREFORE, THE ADDITION SHOULD NOT HAVE BEEN MADE BY THE AO. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE A SSESSMENT RECORDS WERE ALSO OBTAINED FROM AO AND THE SAME HAVE ALSO BEEN EXAMINED BY ME TO ASCERTAIN THE FACTS CORRECTLY. THE SHARE APPLICANT COMPANY M/S. GENERAL CAPITAL HA S BEEN DULY CONFIRMED THE FACT OF MAKING INVESTMENT IN THE APPELLATE COMPANY. THE AMO UNTS HAVE BEEN RECEIVED THROUGH ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 17 | P A GE BANKING CHANNEL. THE SAME ARE DULY REFLECTED IN THE ANNUAL ACCOUNTS OF THAT COMPANY. THE EXTRACTS OF THE BANK STATEMENT WHICH HAVE BEEN FILED BEFORE ME DURING THE COURSE OF APPELLATE PROCEEDINGS AS WELL AS BEFORE THE AO CLEA RLY SHOW THAT THERE ARE NO CASH DEPOSITS AS MENTIONED BY THE AO IN THE ASSESSMENT O RDER. THE OBSERVATION OF THE AO THAT THE CASH HAS BEEN DEPOSITED AND SUBSEQUENTLY CHEQUE S WERE ISSUED IS FACTUALLY INCORRECT. THE DIRECTOR OF THE COMPANY ALSO ATTENDED BEFORE AO AND CONFIRMED THE FACT. IT IS ALSO NOTED THAT BOTH THE COMPANIES, THAT IS THE APPELLAN T COMPANY AS WELL AS THE SHARE APPLICANT ARE MANAGED BY THE SAME GROUP OF PERSONS. HONOURABLE HIGH COURT OF GUJARAT HAS CONSISTENTLY H ELD THAT IF THE ASSESSEE HAS GIVEN SUFFICIENT PROOF IN RESPECT OF THE SHARE APPLICATIO N, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. IF THE AO HAS ANY DOUBT ABOUT THE SOURCE OF THE SHARE APPLICANT FURTHER INVESTIGATION CAN BE MADE IN THE HANDS OF THE SHARE APPLICANT, BUT NOT IN THE CASE OF THE APPELLANT. .' IT CAN THUS BE SEEN THAT THE ENTIRE ISSUE IS BASE D ON APPRECIATION OF MATERIAL ON RECORD. CIT [A] AND THE TRIBUNAL CONCURRENTLY CAME TO THE C ONCLUSION THAT THE ASSESSEE HAD DISCHARGES ITS BASIC ONUS. THE INVESTORS HAVE CONFI RMED THE TRANSACTIONS. SUCH TRANSACTIONS WERE CARRIED OUT THROUGH THE BANKING C HANNEL. THE DIRECTOR OF THE INVESTING COMPANY HAD ALSO APPEARED BEFORE THE ASSESSING OFFI CER AND ALSO CONFIRMED THE TRANSACTIONS. THE CIT [A] AND THE TRIBUNAL ALSO DID NOT CONFIRM THE ASSESSING OFFICER'S FINDING THAT THE ASSESSEE FAILED TO ESTABLISH THE C REDITWORTHINESS OR GENUINENESS OF THE TRANSACTIONS. NO QUESTION OF LAW ARISES. TAX APPEAL IS DISMISSED. [ EMPHASIS GIVEN BY US ] 11. FURTHER THE LD. CIT(A) HAS NOTED THAT THE TRANS ACTION INVOLVED IN THIS CASE THAT M/S SKJ COKE INDUSTRIES LTD. HAS TRANSFERRED ITS ST AKE IN ITS UNIT M/S JUPITER CEMENT INDUSTRIES IN LIEU OF SHARES OF ASSESSEE COMPANY TO THE TUNE OF RS. 50 CRORES. THUS, THIS TRANSACTIONS ARE BARTER/EXCHANGE AND THEREFORE SECTION 68 OF THE ACT IS NOT APPLICABLE. WE NOTE THAT SIMILAR ISSUE HAD ARISEN I N THE CASE OF M/S V R GLOBAL ENERGY PVT. LTD. VS. ITO IN TAX CASE (APPEAL) NO. 246 OF 2017 BEFORE THE HON;BLE MADRAS HIGH COURT AND BY JUDGMENT DATED 06.08.2018 IT WAS DECIDED I N FAVOR OF THE ASSESSEE. THE FACTS OF THE CASE [M/S V R GLOBAL ENERGY PVT. LTD] IS THAT THE ASSESSEE WAS A COMPANY CARRYING ON BUSINESS OF MANUFACTURE OF WIND ELECTRIC GENERATORS AND PARTS OF WIND ELECTRIC GENERATORS. T HE ASSESSEE M/S VR GLOBAL ENERGY PVT. LTD. HAD FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 30.9.2012 DECLARING INCOME OF RS.40,46,570/-. IN TH E BALANCE SHEET, THE ASSESSEE SHOWED RS.90,18,00,000/-AS SHARE PREMIUM AS ON 31.0 3.2012. THE ASSESSEE HAD ALSO INTRODUCED SHARE CAPITAL OF RS.16,70,000/-. DURING THE AFORESAID ASSESSMENT YEAR, THE ASSESSEE HAD ISSUED SHARE CAPITAL OF TOTAL VALUE OF RS.90.34 CRORES, OUT OF WHICH, THE ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 18 | P A GE PAID UP VALUE OF SHARES ALLOTTED WAS RS.16.7 LAKHS. AND THE BALANCE OF RS.90.18 CRORES WAS SHOWN IN THE SHARE PREMIUM ACCOUNT. AND IT IS AN ADMITTED FACT THAT THE ENTIRE SHARE PREMIUM AND THE PAID UP VALUE WAS APPA RENTLY BY BOOK ADJUSTMENT. ACCORDING TO THE ASSESSEE, ONE SMT. VATHASALA RANGA NATHAN WAS A PARTNER HOLDING 50% SHARE IN THE FIRM M/S.SHRIRAM AUTO FINANCE, WHO HAD PAID VARIOUS ADVANCE AMOUNTS TO BANKS AND OTHER INSTITUTIONS ON BEHALF O F THE COMPANIES AS PER THE PARTICULARS GIVEN BELOW: NAME OF THE COMPANY AMOUNT CENTURY WOOD LIMITED 8.52 TTG INDUSTRIES LIMITED 34.15 OTHER 18.00 12. IN THE BOOKS OF ACCOUNTS OF M/S.SHRIRAM AUTO FI NANCE, A TOTAL AMOUNT OF RS.60.67 CRORES WAS SHOWN AS RECEIVABLE FROM THE CO MPANIES NAMED ABOVE. THIS WAS REFLECTED IN THE BALANCE SHEET OF M/S.SHRIRAM AUTO FINANCE AS ON 1.3.2012. THE ABOVE SAID COMPANIES ASSIGNED THEIR LIABILITY PAYAB LE TO M/S.SHRIRAM AUTO FINANCE TO THE ASSESSEE BY AN AGREEMENT DATED 1.3.2012. TH EREFORE, IN THE BOOK OF ACCOUNTS, THE ASSESSEE HAD SHOWN THE AMOUNTS AS DUE FROM THE VARIOUS COMPANIES AND CORRESPONDING AMOUNT AS PAYABLE TO M/S.SHRIRAM AUTO FINANCE. SMT. VATHSALA RANGANATHAN RETIRED FROM THE PARTNERSHIP OF M/S.SHR IRAM AUTO FINANCE. ON RETIREMENT OF SMT. VATHSALA RANGANATHAN, M/S.SHRIRA M AUTO FINANCE ASSIGNED THE SAID AMOUNT OF RS.60.67 CRORES PAYABLE BY THE ASSE SSEE TO M/S.SHRIRAM AUTO FINANCE TO SMT. VATHSALA RANGANATHAN. CONSEQUENTLY, IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THE SAID AMOUNT WAS SHOWN AS DUE TO S MT. VATHSALA RANGANATHAN. 13. ON RETIREMENT OF SMT. VATHSALA RANGANATHAN FROM M/S.SHRIRAM AUTO FINANCE, IN ALL, A SUM OF RS.65.95 CRORES BECAME PAYABLE BY THE ASSESSEE TO SMT. VATHSALA RANGANATHAN. THE ASSESSEE THEREFORE, DECIDED TO AL LOT ITS SHARES TO SMT. VATHSALA RANGANATHAN IN SETTLEMENT OF THE AMOUNT DUE TO HER. THE ASSESSEE ALLOTTED 1,19,000 SHARES WITH FACE VALUE OF RS.10/- AT A PREMIUM OF R S.5400/- AND, THEREFORE, THE ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 19 | P A GE ALLOTMENT OF SHARES BY THE APPELLANT TO SMT.VATHSAL A RANGANATHAN WAS IN SETTLEMENT OF THE PRE-EXISTING LIABILITY OF THE ASSESSEE COMPA NY TO SMT.VATHSALA RANGANATHAN. 14. ACCORDING TO THE ASSESSEE, SHARES WERE ALLOTTE D AGAINST THE LIABILITY THAT HAD ACCRUED TO THE ASSESSEE FROM TRANSFER TO IT OF THE ASSETS BEING RECEIVABLES AND PREFERENCE SHARES OF EQUAL VALUE AND CORRESPONDINGL Y THERE WAS A LIABILITY CREATED IN FAVOUR OF THE TRANSFERORS, VIZ., M/S.SHRIRAM AUTO F INANCE. FURTHER IT WAS STATED THAT THE APPORTIONMENT BETWEEN THE PAID UP CAPITAL AND T HE SHARE PREMIUM WAS ON THE BASIS OF THE AGREEMENT BETWEEN THE SHAREHOLDERS AND THE COMPANY AND HENCE THERE IS NO SCOPE FOR ADDITION UNDER SECTION 68 OF THE SAID ACT. ACCORDING TO ASSESSEE, WHEN LIABILITY HAS BEEN CREATED EQUAL TO AMOUNT OF ASSET S TRANSFERRED AND SHARES ALLOTTED IN SETTLEMENT OF THIS LIABILITY, THERE CAN BE NO ADDIT ION UNDER SECTION 68 OF THE SAID ACT AS UNEXPLAINED CASH CREDIT. IT WAS AN ADMITTED FACT THAT THE TRANSACTIONS HAVE BEEN CONFIRMED BY THOSE COMPANIES AND, THEREFORE, THE LI ABILITY OF THE ASSESSEE TO THE SAID COMPANIES WAS GENUINE AND HAD ACCRUED ON TRANSFER B Y THE THREE PERSONS OF THE ASSETS BY WAY OF RECEIVABLES/SHARES OF EQUAL VALUE AND, TH EREFORE, THE CONVERSION OF THESE LIABILITIES INTO SHARE CAPITAL ACCOUNT CANNOT BE AS SESSED AS UNEXPLAINED CREDIT. 15. THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY WHEREIN THE AO ON 31.3.2015 DETERMINED THE TOTAL INCOME OF THE ASSES SEE FOR THE ASSESSMENT YEAR 2012- 13 AT RS.91,06,12,134/-.THE ASSESSING OFFICER, VIDE THE ASSESSMENT ORDER DATED 31.3.2015, ADDED THE SHARE PREMIUM AND THE SHARE CA PITAL FOR THE FRESH ALLOTMENT OF 167000 SHARES AND TREATED THE SAME AS UNEXPLAINED C ASH CREDITS UNDER SECTION 68 OF THE SAID ACT, WHILE HOLDING THAT THE METHOD OF VALU ATION WAS NOT ACCEPTABLE AND THAT THE SHARE PREMIUM OF RS.5400/- WAS UNREASONABLE. TH E ASSESSING OFFICER HELD THAT THE ASSIGNMENT AGREEMENT FURNISHED BY THE APPELLANT ASSESSEE WAS ONLY A PURPORTED AGREEMENT WITHOUT ANY SUBSTANCE AND THE TRANSACTION WAS A MERE BOOK ADJUSTMENT. 16. AGGRIEVED BY THE ORDER OF ASSESSMENT, THE ASSES SEE APPEALED TO THE COMMISSIONER OF INCOME TAX (APPEALS), WHO HELD THAT THE ASSESSEE HAD NOT SHOWN ANY CONVINCING REASON AS TO HOW THE SHARE WITH A FA CE VALUE OF RS.10/- COULD BE ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 20 | P A GE VALUED AT RS.5,400/- PER SHARE, DESPITE SEVERAL OPP ORTUNITIES GRANTED TO IT, AND THAT THE ASSESSEE HAD NOT SUBMITTED THE PARTICULARS OF ITS N ET WORTH. IN EFFECT, THE COMMISSIONER OF INCOME TAX (APPEALS HELD THAT THE A SSESSEE HAD NOT PROVED THE GENUINENESS AND CREDIT WORTHINESS OF THE CREDIT ENT RIES IN ITS BOOKS OF ACCOUNTS. THUS, CIT(A) UPHELD THE ADDITION OF SHARE PREMIUM AND SHA RE CAPITAL AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE SAID ACT AND DISMISS ED THE APPEAL OF THE ASSESSEE. 17. ON FURTHER APPEAL, THE TRIBUNAL, HELD THAT BY WAY OF INTRODUCING CASH CREDIT IN THE NAME OF SHARE PREMIUM AND SHARE CAPITAL, THE AP PELLANT ASSESSEE IS MAKING ATTEMPTS TO REDUCE THE TAX LIABILITY. THE TRIBUNAL FURTHER HELD THAT WHEN THE ASSESSING OFFICER FOUND CREDIT IN THE BOOKS OF ACCOUNT AND TH E APPELLANT ASSESSEE COULD NOT OFFER ANY SATISFACTORY EXPLANATION, THEN THE ENTRIE S FOUND IN THE BOOKS HAVE TO BE TREATED AS INCOME OF THE APPELLANT ASSESSEE AND, TH US, DISMISSED THE APPEAL BY CONFIRMING THE ORDERS PASSED BY THE AUTHORITIES BEL OW. WHEN THE ASSESSEE ASSAILED THE DECISION OF THE TRIBUNAL, ON THE AFORESAID FACT S, THE HONBLE MADRAS HIGH COURT OVER-TURNED THE DECISION OF THE LOWER AUTHORITIES, AND ALLOWED THE APPEAL OF ASSESSEE BY DELETING THE ADDITION OF RS.91,06,12,134/-HAS HE LD AS UNDER: 18. ASSAILING THE SAID ORDER, THE APPELLANT ASSESS EE HAS FILED THE PRESENT APPEAL RAISING, INTER ALIA, THE FOLLOWING QUESTIONS OF LAW: (I) WHETHER THE LEARNED TRIBUNAL ERRED IN CONFIRMIN G THE VALUATION OF SHARES ALLOTTED IN SETTLEMENT OF THE PRE-EXISTING LIABILIT Y TAXABLE AS UNEXPLAINED CASH CREDIT? (II) WHETHER THE LEARNED TRIBUNAL ERRED IN HOLDING THAT VALUE OF SHARES ALLOTTED TO INDIVIDUALS WOULD AMOUNT TO UNEXPLAINED CASH CREDIT ? 19. THE LEARNED COUNSEL FOR THE APPELLANT ASSESSES CONTENDED THAT SHARES WERE ALLOTTED TO SMT VATHASALA RANGANATHAN AND OTHERS IN SETTLEMENT OF PRE-EXISTING LIABILITY AND, THEREFORE, IT WILL NOT AMOUNT TO UNE XPLAINED CASH CREDIT. 20. COUNSEL ARGUED, AND RIGHTLY, THAT WHEN THERE WA S NO CASH INVOLVED IN THE TRANSACTION OF ALLOTMENT OF SHARES, PROVISIONS OF S ECTION 68 OF THE SAID ACT TREATING IT AS UNEXPLAINED CASH CREDIT ARE NOT ATTRACTED. 21. LEARNED COUNSEL FOR THE APPELLANT ASSESSEE EMPH ATICALLY ARGUED THAT INASMUCH AS THE SOURCE OF CREDIT IN WHICH SHARES WE RE ALLOTTED WAS CLEARLY EXPLAINABLE, THE SAME CANNOT BE TREATED AS UNEXPLAI NED CASH CREDIT. MOREOVER, THE IDENTITY OF THE SHARE HOLDERS AND THE LIABILITY OF THE COMPANY TO SHAREHOLDERS HAS BEEN ESTABLISHED AND, THEREFORE, THE ALLOTMENT OF SHARES CANNOT BE TREATED AS UNEXPLAINED CASH CREDIT. ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 21 | P A GE 22. IN COMMISSIONER OF INCOME TAX V. ELECTRO POLYCH EM LTD., REPORTED IN (2007) 294 ITR 661, CITED ON BEHALF OF THE APPELLANT, A DI VISION BENCH OF THIS COURT HELD THAT IN CASE OF CASH CREDIT OF SHARE APPLICATION MONEY E VEN IF IT WERE TO BE ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL WERE NOT GENUINE, THE AMOUNT OF SHARE CAPITAL WOULD IN NO CIRCUMSTANCES BE REGARD AS UNDI SCLOSED INCOME OF THE COMPANY. 23. IN COMMISSIONER OF INCOME TAX V. STELLER INVEST MENT LTD., REPORTED IN (2001) 251 ITR 263, ALSO CITED ON BEHALF OF THE APPELLANT, THE SUPREME COURT HELD THAT EVEN IF THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL OF A SSESSEE-COMPANY WERE NOT GENUINE, THE AMOUNT COULD NOT BE REGARDED AS UNDISCLOSED INC OME OF THE COMPANY. 24. THE QUESTION OF WHETHER THE LEARNED TRIBUNAL ER RED IN CONFIRMING THE VALUATION OF SHARES ALLOTTED IN SETTLEMENT OF THE P REEXISTING LIABILITY TAXABLE AS UNEXPLAINED CASH CREDIT, DOES NOT INVOLVE ANY QUEST ION OF LAW, FAR LESS ANY SUBSTANTIAL QUESTION OF LAW. 25. HOWEVER, THE SECOND QUESTION IS ANSWERED IN FAV OUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE JUDGMENT OF THE DIVISION BENCH OF THIS COURT IN COMMISSIONER OF INCOME TAX V. ELECTRO POLYCHEM LTD. , SUPRA, AND COMMISSIONER OF INCOME TAX V. STELLER INVESTMENT LTD., SUPRA. 26. THIS CASE IS DISTINGUISHABLE FROM THE CASE OF C .I.T. V. LOVELY EXPOS PVT. LTD., REPORTED IN 216 CTR 195, IN THAT THE TRANSACTIONS W ERE ONLY BOOK TRANSACTIONS, AND THERE WAS NO CASH RECEIPT. THE DECISIONS IN (I) COM MISSIONER OF INCOME TAX V. FOCUS EXPORTS PVT. LTD., REPORTED IN (2014) 90 CCH 0105 ( DELHI); (II) COMMISSIONER OF INCOME TAX V. GLOBUS SECURITIES & FINANCE PVT. LTD. , REPORTED IN (2014) 264 CTR 481 (DELHI); (HI) ONASSIS AXLES PRIVATE LIMITED V. COMM ISSIONER OF INCOME TAX, REPORTED IN (2014) 364 ITR 53 (DELHI); (IV) OLWIN TILES INDI A (P) LTD. V. DEPUTY COMMISSIONER OF INCOME TAX, REPORTED IN (2016) 382 ITR 291 (GUJA RAT); (V) B.R. PETROCHEM PVT. LTD. V. THE INCOME TAX OFFICER, (ORDER DATED 24.4.2 017 IN T.C.(A) NO. 1498 OF 2007; AND (VI) RAJMANDIR ESTATES PRIVATE LIMITED V. PRINC IPAL COMMISSIONER OF INCOME TAX, REPORTED IN (2016) 386 ITR 162 (CALCUTTA), CITED ON BEHALF OF THE RESPONDENT ARE DISTINGUISHABLE, IN THAT THE CASH CREDITS TOWARDS S HARE CAPITAL WERE ADMITTEDLY ONLY BY WAY OF BOOK ADJUSTMENT AND NOT ACTUAL RECEIPTS WHIC H COULD NOT BE SUBSTANTIATED AS RECEIPTS TOWARDS SHARE SUBSCRIPTION MONEY. 28. THE APPEAL IS, THUS, ALLOWED AND THE JUDGMENT A ND ORDER OF THE LEARNED TRIBUNAL DATED 1.9.2016 IS SET ASIDE FOR THE REASONS DISCUSS ED ABOVE. ADDITIONS UNDER SECTION 68 OF THE 1961 ACT ARE ALSO SET ASIDE. THE QUESTION S OF LAW ARE ANSWERED AGAINST THE REVENUE. NO COSTS. CONSEQUENTLY, CMP NO.9496 OF 201 7 IS CLOSED. 18. ON SIMILAR ISSUE, THE HONBLE CALCUTTA HIGH COU RT IN THE CASE OF M/S JATIA INVESTMENT CO VS. CIT REPORTED IN 206 ITR HELD AS F OLLOWS: 6. THE MATTER CAME UP IN APPEAL BEFORE THE TRIBUNAL AND IT WAS ALSO ARGUED THAT THE COMPANIES HAD TO REDUCE THEIR INDEBTEDNESS IN VIEW OF RULE 58 A OF THE COMPANIES ACT . THE TRIBUNAL HELD AS FOLLOWS : 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE CASE SOUGHT TO BE MADE OUT IN FAVOUR OF THE ASSESSEE IS RATHER STRANGE. THE ASSESSEE MAINTAINS REGULAR BOOKS OF ACCOUNT AND MAKES ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 22 | P A GE CERTAIN ENTRIES. THE ASSESSEE IS NOW TRYING TO CONV INCE US THAT THE ENTRIES MADE IN THE BOOKS WERE FALSE AND NO VALUE SHOULD BE ATTACHED TO THEM. IT IS IMPOSSIBLE FOR US TO HOLD THAT WE HAVE TO DISREGARD THE ENTRIES IN THE BOOKS OF ACCOU NT MERELY BECAUSE IT SUITS THE ASSESSEE. IF THE IDEA WAS TO REDUCE THE INDEBTEDNESS OF THE COMP ANIES WE DO NOT UNDERSTAND HOW IT HAS BEEN BROUGHT OUT WHEN CORRESPONDING ASSETS HAVE ALS O BEEN JETTISONED BY THOSE COMPANIES MAKING THE OVERALL RATIO OF INDEBTEDNESS THE SAME A S BEFORE. WE DO NOT ALSO SEE HOW RULE 58 A OF THE INDIAN COMPANIES ACT COMES INTO THE PICTURE. ALSO, IF THOSE ENTRIES WER E MERELY ADJUSTMENT ENTRIES WE DO NOT UNDERSTAND WHY JOURNAL ENTRIES WERE NOT PASSED MAKING HAVALAS WHICH SHOULD HAVE BROUGHT THE SAME RESULT. THE VERY FACT THAT CASH ENTRIES ARE MADE FOR THE PURCHASE OF SHARES BY THE ASSESSEE WOULD SH OW THAT THE ASSESSEE HAD PAID CASH FOR THE PURCHASE OF SHARES. OBVIOUSLY, THE ASSESSEE IS NOT ABLE TO SHOW HOW THE CASH WAS PROVIDED. THE CONCERNS FROM WHOM CASH ALLEGEDLY PAS SED DID NOT HAVE ENOUGH CASH BALANCE TO LEND MONEY TO THE ASSESSEE. IN THESE CIRCUMSTANC ES, THE INCOME-TAX OFFICER WAS FULLY JUSTIFIED IN DRAWING THE CONCLUSION THAT THE ASSESS EE BROUGHT CASH INTO THE BOOKS OF ACCOUNT FOR THE PURCHASE OF SHARES BUT THE SOURCE THEREOF W AS UNEXPLAINED. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) WAS FULLY JUST IFIED IN ENDORSING THE FINDINGS OF THE INCOME-TAX OFFICER. WE, THEREFORE, DO NOT SEE ANY R EASON TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. THE APPEAL ACCORDINGLY FAILS AND IS DISMISSED.' 7. A MISCELLANEOUS APPLICATION WAS FILED URGING THA T SOME ARGUMENTS ADVANCED BY THE ASSESSEE WERE NOT CONSIDERED BY THE TRIBUNAL. THE T RIBUNAL GAVE ITS FINDINGS AS FOLLOWS : 'THE ASSESSEE'S REPRESENTATIVE, AS IS CLEAR FROM OU R LOG BOOKS, CLEARLY REFERRED TO RULE 58A AT THE TIME OF HEARING. AS THERE WAS NO SUCH RULE IN T HE COMPANIES ACT , THE ARGUMENT HAD TO BE IGNORED. FURTHER, THE DOCUMENT AT PAGE 7 OF THE PAP ER BOOK BEING THE DIRECTION OF THE RESERVE BANK TO NON-FINANCIAL COMPANIES, WAS NOT CO NSIDERED AS IT WAS NOT PRODUCED BEFORE THE AUTHORITIES BELOW. IT WAS ALSO NOT THE CASE OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW THAT THE ENTRIES WERE MADE IN PURSUANCE OF THE RESE RVE BANK'S DIRECTION. THE LETTERS ADDRESSED BY THE THREE LIMITED COMPANIES ATTEMPTING TO EXPLAIN THAT THE ENTRIES IN THEIR BOOKS WERE ADJUSTMENT ENTRIES WERE NOT BELIEVED BY THE INSPECTING ASSISTANT COMMISSIONER, AS THEY WERE CONTRARY TO FACTS. THE COMMISSIONER OF INCOME-TAX (APPEALS) ALSO TOLD THAT, HAVING REGARD TO THE CLEAR NARRATION IN THE STOCK A CCOUNT OF THE VARIOUS CONCERNS, THE ASSESSEE'S STORY THAT NO CASH PASSED BUT ONLY CONTR A ENTRIES WERE MADE HAD TO BE REJECTED. THE TRIBUNAL AGREED WITH THIS FINDING. IN FACT, THE NOTICE WITH WHICH THE LIMITED COMPANIES ATTEMPTED TO REDUCE THEIR BORROWINGS DOES NOT EXPLA IN THE CASH ENTRIES. WHAT THE ASSESSEE WAS REQUIRED IS TO PROVE THE SOURCE FOR THE PURCHAS E OF SHARES. IN THIS ATTEMPT, THE ASSESSEE HAS FAILED. WE, THEREFORE, DO NOT FIND ANY MISTAKE IN OUR ORDER.' 8. AT THE HEARING, MR. BAJORIA, LEARNED COUNSEL APP EARING FOR THE ASSESSEE, SUMMED UP THE FACTS AT THE OUTSET. 9. THE PARTNERS OF THE ASSESSEE-FIRM ARE MEMBERS OF THE JATIA FAMILY RUNNING SEVERAL BUSINESSES AND INDUSTRIES THROUGH NUMEROUS FIRMS, C ONCERNS AND COMPANIES COMMONLY KNOWN AS THE JATIA GROUP. THE THREE COMPANIES OF TH E GROUP, VIZ., JATIA INDUSTRIES PVT. LTD., PRAISE CO. PVT LTD., AND ONKAR INDUSTRIES PVT. LTD. , BORROWED LARGE SUMS FROM MESSRS. GAZANAND BISSWESWARLAL AND CO. (FOR SHORT GB AND CO .), A SOLE CONCERN OF SHRI J. M. JATIA- -ONE OF THE PARTNERS OF THE ASSESSEE. THE RATIO OF THE SAID BORROWING TO THE PAID-UP SHARE CAPITAL AND RESERVES EXCEEDED THE PERMISSIBLE LIMIT UNDER THE CIRCULAR ISSUED BY THE RESERVE BANK OF INDIA IN EXERCISE OF ITS POWERS UNDER THE RESERVE BANK OF INDIA ACT , 1934. ACCORDING TO THE DIRECTIONS OF THE RESERVE BANK OF INDIA, THE SAID THREE COMPANIES OF THE GROUP BEING NON-FINANCIAL COMPANIES WERE REQUIRED T O KEEP DOWN THE RATIO OF THE LOAN TO SHARE CAPITAL AND FREE RESERVES TO THE CEILING LIMI T OF 25% (LATER REDUCED TO 15%). LEARNED COUNSEL SUBMITTED THAT FOR THE REQUIREMENT OF CONFO RMING TO THIS PRESCRIBED CEILING LIMIT OF THE VOLUME OF LOANS, THE SAID THREE COMPANIES WERE TO LIQUIDATE THE LOANS BORROWED FROM THE ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 23 | P A GE SAID PROPRIETARY CONCERN OF SHRI J. M. JATIA. BUT T HE SAID COMPANIES HAD NOT THE REQUISITE LIQUIDITY TO DISCHARGE THE LOANS. SINCE THE LENDING PROPRIETARY CONCERN OF SHRI J. M. JATIA BELONGED TO THE SAME GROUP, AN ARRANGEMENT WAS MADE FOR REDUCTION OF THE VOLUME OF BORROWING OF THE COMPANIES TO THE REQUISITE LIMIT. THEREFORE, A PARTNERSHIP FIRM, I.E., THE ASSESSEE, WAS CONSTITUTED ON APRIL 20, 1975, WITH T HE MEMBERS OF THE JATIA FAMILY AS ITS PARTNERS. WITHIN THREE DAYS FROM THE DATE OF CONSTI TUTION OF THE FIRM, THE SAID THREE COMPANIES SHOWED SALE OF SHARES WHICH IT HAD BEEN H OLDING IN VARIOUS COMPANIES OF THE JATIA GROUP TO THE FIRM. IN EXCHANGE, AS CONSIDERAT ION, THE FIRM MADE A CREDIT ENTRY IN THE CASH BOOK OF AN AGGREGATE SUM OF RS. 11.20 LAKHS IN FAVOUR OF THE SAID THREE COMPANIES. THE SAID THREE COMPANIES, IN TURN, SHOWED THE CREDIT EN TRIES IN THE CASH BOOKS AS REPAYMENT OF LOAN AGGREGATING IN ALL TO RS. 11.20 LAKHS. THE ASS ESSEE-FIRM SHOWED THE AMOUNT OF CONSIDERATION PAYABLE TO THE THREE COMPANIES AS PAI D OUT OF THE LOAN FROM THE SAID SOLE CONCERN OF SHRI ). M. JATIA, VIZ., GB AND CO., BY M AKING A DEBIT ENTRY IN THE CASH BOOK WITHOUT, HOWEVER, RECEIVING ANY CASH. NECESSARY ENT RIES RELATING TO THE TRANSACTIONS WERE PASSED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, GB AND CO., AND THE THREE COMPANIES THROUGH THEIR RESPECTIVE CASH BOOKS. THUS, THE CASH BOOK SHOWED THAT THERE WAS MERELY A CIRCULATION OF CASH ENDING AT THE POINT IT BEGAN, T HE CUMULATIVE EFFECT BEING THAT THE ASSESSEE BECAME A DEBTOR TO GB AND CO. IN PLACE OF THE SAID THREE COMPANIES OF THE GROUP. 10. THIS IS THE CRUX OF THE WHOLE MATTER. THE INCOM E-TAX OFFICER'S CASE IS THAT THE TRANSACTIONS WERE RECORDED IN THE CASH BOOK THROUGH A CIRCUIT, BUT AT NO POINT IN THE CIRCUIT THERE WAS CASH. IN THE WORDS OF THE INCOME-TAX OFFI CER, THE POSITION FOUND BY HIM THAT WARRANTED THE ADDITION OF THIS AMOUNT OF RS. 11.20 LAKHS IN THE HANDS OF THE ASSESSEE IS AS UNDER : 'IN VIEW OF THE TRANSACTIONS RECORDED ABOVE, IT IS APPARENT THAT THE MONEY FLOWING AMONGST THE PARTIES INCLUDING THE ASSESSEE-FIRM CANNOT BE E XPLAINED AS BELONGING TO MESSRS. GB AND CO. THE SAME CANNOT BE SAID TO HAVE BELONGED TO MES SRS. JATIA INDUSTRIES PVT. LTD., MESSRS. ONKAR INDUSTRIES PVT. LTD., AND MESSRS. PRAISE CO. P. LTD., AS THEY DID NOT HAVE THEIR OWN CASH BALANCE FOR ADVANCING MONEY TO MESSRS. GB AND CO.' 11. WHAT THE OFFICER DRIVES AT IS THAT EACH OF THE PARTIES MADE ENTRIES IN THE CASH BOOK IN SPITE OF THEIR NOT HAVING ANY CASH TO PASS ON. 12. THEREFORE, THE ADVANCE OF LOAN IN CASH BY GB AN D CO. TO THE ASSESSEE-FIRM, AS REFLECTED IN THE ENTRY IN THE CASH BOOK OF THE ASSESSEE-FIRM, IS UNEXPLAINED CASH CREDIT, WHICH ATTRACTS THE PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT, 1961. 13. ACCORDING TO SHRI BAJORIA, THE WHOLE MATTER BOI LS DOWN TO THE FACT THAT THOUGH THE ENTRIES WERE MADE IN THE CASH BOOK IN THE CASE, THE RE WAS NO PASSAGE OF CASH AT ANY STAGE. THE WHOLE THING WAS ARRANGED BY THE ENTRIES TO SHOW THAT GB AND CO. NOTIONALLY ADVANCED CASH TO THE ASSESSEE-FIRM THOUGH NOT HAVING CASH TO PASS ON. THE ASSESSEE-FIRM, IN TURN, PAID AS CONSIDERATION FOR THE SHARES TO THE SAID THREE C OMPANIES THE SAME NONEXISTENT CASH AS THE AGGREGATE PURCHASE VALUE OF THE SHARES HELD BY THE SAID COMPANIES IN THE OTHER COMPANIES OF THE GROUP WITHOUT, HOWEVER, ANY PASSAGE OF CASH AND THE SAID COMPANIES IN THEIR TURN PASSING ON THE SAID NON-EXISTENT CASH TO GB AND CO. 14. SHRI BAJORIA EMPHASISED THAT, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE INCOME-TAX OFFICER EXAMINED THE TRANSACTIONS AND FOUND THAT TH ESE ARE ONLY ENTRIES NOT INVOLVING AT ANY STAGE ANY CASH. HE POINTED OUT THAT THE ENTIRE TRAN SACTIONS WERE EFFECTED BETWEEN THE ASSESSEE-FIRM AND THE CONCERNS BELONGING TO THE JAT IA GROUP ONLY FOR THE REQUIREMENT OF COMPLYING WITH THE DIRECTIONS OF THE RESERVE BANK O F INDIA THAT CAST ON THE COMPANIES A STATUTORY OBLIGATION TO REDUCE THEIR BORROWING TO M AINTAIN PARITY WITH THE LOAN AND CAPITAL ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 24 | P A GE RATIO AS PRESCRIBED. THE ASSESSEE-COMPANY MERELY SU BSTITUTED THE SAID THREE COMPANIES AS DEBTORS TO GB AND CO. AND RECEIVED THE SHARES FOR U NDERTAKING THE LIABILITY. 15. CONFRONTED WITH THE QUESTION WHY THE REDUCTION OF LOAN COULD NOT BE ACHIEVED BY STRAIGHTAWAY TRANSFER OF THE SHARES IN QUESTION BY THE SAID THREE COMPANIES TO GB AND CO. IN DISCHARGE OF THE LOANS, WITHOUT CREATING A CIRCUIT, SHRI BAJORIA EXPLAINED THAT SUCH A COURSE WAS NOT ACCEPTABLE TO ALL THE MEMBERS OF THE FAMILY AS THE LENDER, GB AND CO., IS THE SOLE CONCERN OF SHRI J.M. JATIA. TO AVOID THE JEOPARDY O F THE OTHER MEMBERS OF THE JATIA FAMILY THIS ARRANGEMENT HAD TO BE MADE, AND THE ASSESSEE-F IRM HAD TO BE CREATED AS A DEVICE TO PROTECT THE INTEREST OF ALL MEMBERS OF THE GROUP. I N ANY CASE, IT. WAS URGED THAT THE TRANSACTIONS AS ALSO THE CREATION OF THE ASSESSEE-F IRM WERE DEVICES TO AVOID THE MISCHIEF OF THE CEILING IMPOSED BY THE RESERVE BANK OF INDIA ON THE AFORESAID THREE NON-FINANCIAL COMPANIES. THE ASSESSEE-FIRM STEPPED INTO THE SHOES OF THE SAID THREE COMPANIES. THE COMPANIES CEASED TO BE DEBTORS AND, TO THAT EXTENT, THE MAGNITUDE OF ITS LOAN FELL WITHIN THE PRESCRIBED RATIO. 16. IT IS FINALLY EMPHASISED BY LEARNED COUNSEL FOR THE ASSESSEE THAT THE ULTIMATE RESULT IS THAT THE FIRM BECOMES A DEBTOR TO GB AND CO. AND THE THR EE NON-FINANCIAL COMPANIES OF THE GROUP GOT DISCHARGED. LEARNED COUNSEL ALSO EMPHASIS ED THAT, AT THE WORST, IT CAN BE SAID THAT THE ASSESSEE-FIRM HAS RECEIVED VALUABLE ASSETS BEING THE SAID SHARES OF THE EQUIVALENT VALUE OF THE DEBT TAKEN OVER BY IT FROM THE COMPANI ES, I.E., RS. 11.20 LAKHS. 17. THEREFORE, THE QUESTION OF CASH CREDIT DOES NOT COME IN, THERE BEING NO ACTUAL PASSING OR RECEIPT OF CASH. IN OTHER WORDS, THE TRANSACTIONS A RE MERE BOOK ENTRIES. IT WAS CONTENDED THAT THE FACT THAT THE ENTRIES PASSED THROUGH THE C ASH BOOK COULD NOT DETRACT FROM OR EFFACE THE ESSENTIAL NATURE OF THE ENTRIES. IT WAS ALSO UR GED THAT THE ENTRIES WERE PASSED THROUGH THE CASH BOOK SO THAT THE REPAYMENT OF LOANS BY THE SAI D THREE COMPANIES COULD BE ESTABLISHED BEFORE THE RESERVE BANK OF INDIA. BUT, ACCORDING TO SHRI BAJORIA, THAT DOES NOT MEAN THAT IT AMOUNTS TO AN ARTIFICE EMPLOYED TO DECEIVE ANY AUTH ORITIES, BECAUSE THE TRANSACTIONS SHOWING THE AMOUNT AS RECEIVED IN CASH AND PAID AWA Y SPONTANEOUSLY AND SIMULTANEOUSLY WERE NOT ACTUAL BUT ONLY NOTIONAL. HE, HOWEVER, STA TED THAT, AS FAR AS THE QUESTION OF SECTION 68 IS CONCERNED, THE NATURE OF THE TRANSACTIONS AND T HE ENTRIES CLEARLY SHOW THAT NO CASH, IN FACT, FLOWED. IT WAS FURTHER STRESSED THAT THE TRAN SACTIONS ARE ABOVE BOARD. NO OUTSIDER IS INVOLVED. THE ENTRIES WERE MADE IN THE BOOKS OF THE CONCERNS OF THE SAME GROUP. THE SHARES IN QUESTION WERE ALSO OF THE COMPANIES OF THE GROUP . THERE WAS NO ATTEMPT AT HIDING THE TRANSACTIONS. NOR IS IT THE CASE OF ANY OF THE PART IES TO THE TRANSACTION THAT THERE WAS ANY PASSING OF CASH. EVERY PARTY UNEQUIVOCALLY STATED T HAT THE TRANSACTIONS WERE CARRIED INTO EFFECT MERELY BY WAY OF ADJUSTMENTS OF THE SAID LOA NS AND THE SHARE TRANSFERS. 18. SHRI A.C. MOITRA, THE LEARNED ADVOCATE FOR THE REVENUE, REITERATED THE GROUNDS ON WHICH THE TRIBUNAL HAS AFFIRMED THE ADDITION OF THE AMOUN T OF RS. 11.20 LAKHS AS UNEXPLAINED CASH CREDIT. HE PARTICULARLY EMPHASISED THAT THE ASSESSE E'S CONTENTION THAT THE ENTRIES ARE ONLY ADJUSTMENT ENTRIES IS NOT ACCEPTABLE, BECAUSE THE A DJUSTMENT ENTRIES ARE NOT MADE THROUGH THE CASH BOOK. IT IS AN ACCEPTED PRINCIPLE OF ACCOU NTING THAT BOOK ADJUSTMENTS AND THE ENTRIES IN EFFECTING THEM ARE MADE BY JOURNAL ENTRI ES AND NOT CASH ENTRIES. HE URGED THAT THE PURPORTED MOTIVE OF THE ENTRIES BEING THE REDUCTION OF LOANS OF THE THREE LIMITED COMPANIES DOES NOT EXPLAIN THE WHOLE MATTER, BECAUSE THE ENTR IES ARE CASH ENTRIES. THE FACT REMAINS THAT, AT EVERY STAGE, THE PARTIES SHOWED THE PAYMEN TS AND RECEIPTS OF CASH EVEN WHEN THERE WAS NO CASH AVAILABLE FOR SUCH ENTRIES. THIS QUITE JUSTIFIES THE ADDITION AS SUSTAINED BY THE TRIBUNAL. 19. WE HAVE PERUSED THE ASSESSMENT ORDER CAREFULLY. WE FIND THAT CASH DID NOT PASS AT ANY STAGE THOUGH ENTRIES WERE MADE IN THE CASH BOOK SHO WING PAYMENTS AND RECEIPTS ; BUT SINCE THE ENTRIES MADE A COMPLETE ROUND, NO PASSING OF CA SH WAS NECESSARY FOR THE PURPOSE OF ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 25 | P A GE MAKING THE ENTRIES. THAT THERE WAS NO PASSING OF CA SH IS ALSO ADMITTED BY THE INCOME-TAX OFFICER HIMSELF. WE HAVE ALREADY EXTRACTED THE OBSE RVATION OF THE INCOME-TAX OFFICER IN PARAGRAPH 14 OF HIS ASSESSMENT ORDER. THE INCOME-TA X OFFICER HAS CLEARLY OPINED THAT ALL THE RESPECTIVE PARTIES DID NOT RECEIVE CASH NOR DID PAY CASH AS NONE HAD ANY CASH FOR THE PURPOSE. THE ONLY POINT IN THE ASSESSMENT ORDER IS THAT THE ENTRIES NOT INVOLVING THE PASSING OF CASH SHOULD NOT HAVE FOUND A PLACE IN THE CASH B OOK, BUT IN THE LEDGER ACCOUNT THROUGH JOURNAL ENTRIES. THERE IS ANOTHER SELF-CONTRADICTIO N IN THE INCOME-TAX OFFICER'S FINDING THAT, IF THERE WAS NO REAL CASH ENTRY ON THE CREDIT SIDE OF THE CASH BOOK, BUT MERELY A NOTIONAL OR FICTITIOUS CASH ENTRY, AS ADMITTED BY HIM, THERE IS NO REAL CREDIT OF CASH TO ITS CASH BOOK ; THE QUESTION OF INCLUSION OF THE AMOUNT OF THE ENTRY AS UNEXPLAINED CASH CREDIT CANNOT ARISE. 20. ONE OF THE GROUNDS OF THE TRIBUNAL FOR DISBELIE VING THE ASSESSEE'S CASE IS THAT THE ADJUSTMENT ENTRIES WERE MADE BY NOTIONAL CASH ENTRI ES WITH A VIEW TO BRINGING DOWN THE DEBT-AND-CAPITAL RATIO, I.E., THAT WHILE BEING DISC HARGED OF THE DEBT THE SAID COMPANIES ALSO JETTISONED THEIR ASSETS, I.E., THE SHARES HELD BY T HEM OF EQUIVALENT SUM WITHOUT ACHIEVING THE AVOWED PURPOSE. HERE THE TRIBUNAL CERTAINLY MISDIRE CTED ITSELF. THE RATIO TO BE REDUCED IS OF THE LOAN IN RELATION TO THE SHARE CAPITAL AND THE R ESERVES. JETTISONING THE SHARES HAD THE DESIRED EFFECT OF REDUCING THE BORROWED CAPITAL. 21. AGAIN, AS REGARDS THE TRIBUNAL'S REFUSAL TO TAK E NOTICE OF THE DIRECTIONS OF THE RESERVE BANK, IT IS NOT CORRECT FOR THE TRIBUNAL TO HOLD TH AT THE SAID DOCUMENT WAS A NEW EVIDENCE IN THE TRUE SENSE OF THE TERM. THE ASSESSEE HAS BEEN C ONSISTENTLY PLEADING BEFORE THE LOWER AUTHORITIES THAT THE ENTRIES HAD TO BE MADE IN ORDE R TO BRING THE COMPANIES IN CONFORMITY WITH THE SAID DIRECTION. MOREOVER, THE DIRECTION OF THE RESERVE BANK IS A PUBLIC DOCUMENT WITHIN THE MEANING OF SECTION 74 OF THE EVIDENCE ACT, 1872. DOCUMENTS OF A PUBLIC N ATURE AND PUBLIC AUTHORITY ARE GENERALLY ADMISSIBLE IN EV IDENCE SUBJECT TO THE MODE OF PROVING THEM AS LAID DOWN IN SECTIONS 76 AND 78 OF THE EVIDENCE ACT. 22. IN OUR VIEW, THE EFFECT AND IMPORT OF THE TRANS ACTIONS IS THAT THE ASSESSEE TOOK OVER THE LIABILITY OF THE AFORESAID NON-FINANCIAL COMPANIES TO GB AND CO. IN EXCHANGE FOR THE SHARES AS AFORESAID. 23. IN THE PREMISES, WE ANSWER ALL THE QUESTIONS, I N THE AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 24. THERE WILL BE NO ORDER AS TO COSTS. 19. SO IN THE CASE ON HAND OF THE PRESENT ASSESSEE IS CONCERNED, WE FIND THAT THERE WAS NO SUM OF MONEY/CASH WAS INVOLVED IN THE TRANSA CTION OF ALLOTMENT OF SHARES TO M/S SKJ COKE INDUSTRIES LTD. THEREFORE PROVISIONS O F SECTION 68 OF THE ACT [ UN- EXPLAINED CASH CREDIT ] IS NOT ATTRACTED AS HELD BY HONBLE MADRAS HIGH C OURT IN M/S V R GLOBAL ENERGY PVT. LTD. VS. ITO (SUPRA) AND HON BLE CALCUTTA HIGH COURT IN M/S JATIA INVESTMENT CO VS. CIT (SUPRA). SO, LOOKIN G FROM ANY ANGLE AS DISCUSSED SUPRA, THE ADDITION U/S 68 OF RS. 50.30 CRORES WAS NOT FACTUALLY OR LEGALLY SUSTAINABLE AND SO IN THE FACTS AND CIRCUMSTANCES AS DISCUSSED ABOVE THE ADDITION WAS NOT WARRANTED. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) AND ITA NO.2466/KOL/2018 M/S SHRI GANESH CEMENT PVT. LTD. A.Y. 2012-13 26 | P A GE THEREFORE WE CONFIRM THE ORDER OF LD. CIT(A) AND DO NOT FIND ANY MERIT IN THE REVENUE APPEAL, SO, THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DISMISSED. 20. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 25 TH FEBRUARY, 2021. SD/- SD/- (J.S. REDDY) (A. T . VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.02.2021 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- ITO, WARD-1(4), KOLKATA 2. RESPONDENT M/S SHRI GANESH CEMENT PVT. LTD., 5F, ELECTRONIC CENTRE, 1/1A, BIPLABI ANUKUL CHANDRA STREET, KOLKATA, WEST BENGAL -700072 3. THE CIT(A)- 5, KOLKATA (SENT THROUGH E-MAIL) 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES, KOLKATA