ACIT, CC-XXIV, Kolkata, Kolkata V. M/s. Bajrangbali Rolling Mills Pvt. Ltd., Kolkata

ITA 258/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54526 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2011
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 02-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 15-02-2011
• Court: TRIBUNAL
• Department Lawyers: M BHATTACHARYA; S SINHA
• Assessee Lawyers: D S DAMLE
• Keywords: Unexplained cash credit; Unexplained investment; Question of law; Reasonable cause; Corroborative evidences; Accommodation entries; Onus to prove; Retraction
• Section: 68; 132; 133(6)

Judgement Text

1 , B , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B , KO LKATA [ . . . . . .. . , ,, , . .. . ! ! ! !. .. . , , , , '# ] BEFORE SHRI B.R.MITTAL, JUDICIAL MEMBER & SRI C.D. RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO. 258 (KOL) OF 2011 %& '( / ASSESSMENT YEAR 2004-05 ASSTT.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-XXIV, KOLKATA. BAJRANGBALI ROLLING MILLS P.LTD. KOLKATA. (PAN-AACCB1534D) (+, / APPELLANT ) - % - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 '/ FOR THE APPELLANT: / S/SRI S.SINHA & M.BHATTACHARYA /0+, 1 2 ' / FOR THE RESPONDENT: / SRI D.S. DAMLE '3 / ORDER ( . . . . . .. . ), (B.R.MITTAL), JUDICIAL MEMBER : THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSME NT YEAR 2004-05 AGAINST ORDER OF LD. C.I.T.(A), CENTRAL-III, KOLKATA DATED 29/11/ 2010 ON FOLLOWING GROUND :- 1. THAT IN THE FACTS AND CIRCUMSTANCES O F THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.30,00,000/- MA DE U/S. 68 OF THE ACT WITHOUT PROPER APPRECIATION OF THE EVIDENCES BROUGHT ON REC ORD BY THE DEPARTMENT THAT IT WAS ASSESSEES OWN UNACCOUNTED MONEY INTRODUCED AS SUBS CRIPTION OF SHARES IN ASSESSEE COMPANY BY OTHER COMPANIES ARRANGED THROUGH ACCOMMO DATION ENTRIES IN THE BOOKS OF THE COMPANIES FOR WHICH THE DIRECTORS OF THE BUY ER COMPANIES HAD CONFESSED TO THE INCOME TAX AUTHORITIES. 2. THE APPEAL OF THE REVENUE IS BARRED BY ONE DAY. THE A.C.I.T., C.C.-XXIV, KOLKATA VIDE HIS PETITION DATED 15/2/2011 HAS EXPLA INED THE REASON FOR SUCH DELAY. AFTER CONSIDERING THE SAME AND HEARING THE PARTIES, WE FI ND THAT THE DEPARTMENT WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE IN FILING THE AP PEAL BELATEDLY BY ONE DAY BEYOND THE STIPULATED DATE. WE, THEREFORE, CONDONE THE SAID DE LAY AND ADMIT THE APPEAL FOR DISPOSAL ON MERIT. 3. THE RELEVANT FACTS GIVING RISE TO THIS APPEAL A RE THAT THERE WAS A SEARCH & SEIZURE OPERATION CONDUCTED U/S. 132 OF THE ACT ON 08/12/20 06 IN THE CASE OF AGARWAL GROUP OF COMPANIES AND THE ASSESSEE HEREIN IS ONE OF THE COM PANIES OF THE SAID GROUP. 2 SIMULTANEOUSLY, THERE WAS A SEARCH IN THE CASE OF S RI ARUN KR. KHEMKA. SRI KHEMKA IN HIS STATEMENT RECORDED U/S. 132(4) OF THE ACT ON 09 /12/2006 STATED THAT HE WAS PROVIDING ACCOMMODATION ENTRIES TO THE ASSESSEE-COMPANY AND O THER GROUP COMPANIES IN LIEU OF CASH RECEIPTS. DURING THE COURSE OF POST-SEARCH IN VESTIGATION AND AT THE TIME OF MAKING THE ASSESSMENT, THE A.O. HAS STATED THAT THE COMPAN IES, WHO APPLIED FOR SHARES OF THE ASSESSEE-COMPANY, SUBMITTED LETTERS DATED 20/12/200 6 GIVING DESCRIPTION OF THE CHEQUES ISSUED TOWARDS SHARE CAPITAL/SHARE APPLICATION BY R ECEIVING CASH AND ISSUING CHEQUES IN LIEU THEREOF. THE A.O. HAS STATED THAT THE TRANSAC TIONS INVOLVED ARE THUS BOGUS. HE HAS GIVEN THE DETAILS OF THE SHARES APPLIED BY THE APPL ICANT-COMPANIES AGGREGATING TO RS.30,00,000/- AT PAGE-3 OF THE ASSESSMENT ORDER AN D THE SAME ARE REPRODUCED AS UNDER:- SL.NO. SHARES APPLIED BY DETAILS OF CHEQUE AMOUNT(RS.) 01. DIPANKAR SALES PVT. LTD. CHEQUE NO. 063043 DATED 18-06-03 5,00,000/- 02. PNC CAPITAL TRUST LTD. CHEQUE NO. 338661 DATED 17-06-03 5,00,000/- 03. WITTHAL DISTRIBUTORS PVT. LTD. CHEQUE NO. 31934 8 DATED 18-06-03 5,00,000/- 04. LOKESH COMMERCIAL PVT. LTD. CHEQUE NO. 354570 DATED 18-06-03 5,00,000/- 05. SYNCRON COMMERCIAL PVT. LTD. CHEQUE NO. 174038 DDATED 17-06-03 5,00,000/- 06. SUMEE TRADING PVT. LTD. CHEQUE NO. 246376 DATED 31-05-03 5,00,000/- TOTAL 30,00,000/- THE A.O. HAS STATED THAT DURING THE ASSESSMENT PROC EEDINGS, THE ASSESSEE WAS AFFORDED AN OPPORTUNITY TO EXAMINE THE STATEMENT OF SRI ARUN KR. KHEMKA AS WELL AS THE LETTERS DATED 20/1/2006 (AT PAGE-5, A.O. HAS MENTIONED LETT ERS DATED 20/12/2006) FILED BY THE SAID SHARE-APPLICANT COMPANIES. THE A.O. HAS STATE D THAT NOTICES U/S. 133(6) OF THE ACT WERE ISSUED TO THE ABOVE-MENTIONED COMPANIES CALLIN G FOR INFORMATION REGARDING DETAILS OF SHARE APPLICATIONS MADE WITH RESPECT TO SHARES O F THE ASSESSEE-COMPANY DURING THE FINANCIAL YEARS 2000-01 TO 2006-07 ALONG WITH COPIE S OF RELEVANT BANK STATEMENTS. THE A.O. HAS FURTHER STATED THAT IN REPLY THERETO, THE SAID COMPANIES FURNISHED DETAILS OF SHARE APPLICATIONS MADE AND ALSO FURNISHED COPIES O F AFFIDAVITS PURPORTEDLY FILED BY THEIR RESPECTIVE DIRECTORS ON 01/3/2007 AND RETRACT ING THE CONTENTS OF THE AFORE- MENTIONED LETTERS DATED 20/12/2006. THE A.O. HAS R EPRODUCED THE CONTENTS OF ONE OF THE 3 AFFIDAVITS AT PAGE 5 OF THE ASSESSMENT ORDER WHEREI N IT IS, INTER ALIA, STATED THAT D.D.I.T. (INVESTIGATION) HAD PUT UNDUE INFLUENCE AND PRESSUR E AND THREATENED OF DIRE CONSEQUENCES AS A RESULT OF WHICH THE DIRECTOR(S) W AS COMPELLED TO MAKE STATEMENT U/S. 132(4) IN ACCORDANCE WITH THE DIRECTION OF THE SEAR CHING OFFICERS. IT IS FURTHER STATED THAT THE STATEMENTS RECORDED BY THE SEARCHING TEAM DO NO T STATE THE CORRECT STATE OF AFFAIRS AND THE SAID STATEMENTS WERE RECORDED BY USING COER CION AND THREAT. 3.1. THE A.O. DID NOT ACCEPT THE SAID RETRACTION O F THE SHARE-APPLICANT COMPANIES OR SRI ARUN KR. KHEMKA AND RELYING ON THE STATEMENTS R ECORDED AT THE TIME OF SEARCH U/S. 132(4) OF THE ACT, CONSIDERED THE SAID SHARE APPLIC ATION MONEY OF RS.30 LAKHS AS APPEARING IN THE BOOKS OF THE ASSESSEE-COMPANY NOT GENUINE AND ADDED TO THE INCOME OF THE ASSESSEE U/S. 68 OF THE ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIR ST APPELLATE AUTHORITY. 4. THE LD. C.I.T.(A) IN HIS APPELLATE ORDER HAS ST ATED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE ARE SIMILAR TO THOSE DI SCUSSED IN THE APPEAL OF M/S. R.S.ISPAT LTD. FOR ASSESSMENT YEAR 2003-04 AND THE REASONS GI VEN BY THE A.O. IN HIS REMAND REPORT AND FOR MAKING ADDITION U/S. 68 OF THE ACT IN THE P RESENT CASE ARE ALSO VERBATIM SAME. HE FURTHER OBSERVED THAT THE NATURE OF DOCUMENTS PL ACED IN SUPPORT OF SHARE SUBSCRIPTION IS ALSO SIMILAR AS IN THE CASE OF M/S. R.S. ISPAT L TD. HE, THEREFORE, FOLLOWING HIS OWN ORDER DATED 29/11/2010 IN THE CASE OF M/S. R.S. ISP AT LTD. FOR ASSESSMENT YEAR 2003-04 DELETED THE ADDITION OF RS.30 LAKHS IN THE CASE OF THE ASSESSEE BY HOLDING AS UNDER :- 4. THE APPEAL OF M/S. R.S. ISPAT LTD. FOR A.Y. 20 03-04 WAS DECIDED BY ME IN APPEAL NO.262/CC-XXIV/CIT(A)/C-III/08-09. THE REASONS ADVO CATED BY THE AO, FOR MAKING ADDITION U/S 68 IN ASSESSEES CASE ARE VERBATIM SAM E AS DISCUSSED BY THE SAME AO IN THE CASE OF R.S. ISPAT LTD FOR THE A.Y. 2003-04. THE RE ASONS GIVEN BY THE AO IN THE REMAND REPORT JUSTIFYING THE ADDITION U/S 68 ARE ALSO IDEN TICALLY SAME BOTH IN CASE OF R.S. ISPAT LTD. AND THE APPELLANT. I ALSO FIND THAT THE A/R OF THE ASSESSEE ALSO MADE IDENTICAL SUBMISSIONS AND ADVANCED ALMOST SAME ARGUMENTS IN B OTH THE CASES. THE NATURE OF DOCUMENTS PLACED IN SUPPORT OF SHARE SUBSCRIPTION A MOUNTS RECEIVED ALSO APPEARED TO BE SIMILAR AND THEREFORE I FIND THAT THE ISSUES INVOLV ED IN BOTH APPEALS ARE COMMON AND INVOLVE IDENTICAL QUESTION OF LAW AS TO WHETHER THE AO WAS JUSTIFIED IN MAKING ADDITION U/S 68 IN RESPECT OF SUBSCRIPTION AMOUNTS RECEIVED TOWARDS SHARE CAPITAL. 5. IN THE APPELLATE ORDER OF THE EVEN DATE IN THE CASE OF R. S. ISPAT LTD IN APPEAL NO.262/CC-XXIV/CIT(A)/C-III/08-09 I HAVE DEALT AT L ENGTH WITH SUBMISSIONS OF BOTH THE PARTIES. AFTER EXAMINING THE SUBMISSIONS, LEGAL ARGUMENTS AND THE DOCUMENTARY EVIDENCES PLACED BEFORE ME, I HAVE HELD THAT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION U/S 68 OF THE AC IN RESPECT OF SHARE SUBSC RIPTION AMOUNTS. THE REASONS GIVEN BY 4 ME FOR DELETING ADDITION U/S 68 IN THAT ORDER, ARE EQUALLY APPLICABLE TO THE APPELLANTS CASE BECAUSE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE IDENTICAL. IN THE PRESENT CASE ALSO THE AO HAD ISSUED NOTICES U/S 133(6) TO S HAREHOLDERS. THE NOTICES WERE SERVED AT THE ADDRESSES PROVIDED BY THE ASSESSEE WHICH PRO VED IDENTITY OF SHAREHOLDERS. IN RESPONSE TO THE NOTICES EACH SHARE SUBSCRIBERS NOT ONLY CONFIRMED THE TRANSACTIONS BUT SUPPORTED THE TRANSACTIONS BY FURNISHING I.T. ACKNO WLEDGEMENTS, COPIES OF THE BALANCE- SHEETS & BANK STATEMENTS. IT APPEARED FROM THE BALA NCE-SHEETS OF THE SHAREHOLDER COMPANIES THAT EACH ONE OF THEM HAD SUBSTANTIAL NET OWN FUNDS OUT OF WHICH INVESTMENT IN ASSESSEES SHARES WERE MADE. THE BANK STATEMENTS CONTAINED ENTRIES RELATING TO SHARE SUBSCRIPTION AMOUNTS PAID AND THERE WAS NO CASH DEP OSIT PRIOR TO ENCASHMENT OF CHEQUES BY THE ASSESSEE. IN THE LIGHT OF THESE DOCU MENTS THE ONLY CONCLUSION THAT ONE CAN DRAW IS THAT THE ASSESSEE PROVED THAT THERE WAS VALID ISSUANCE OF THE SHARE CAPITAL. THE ASSESSEE DISCHARGED THE ONUS OF PROVING IDENTIT Y, GENUINENESS AND CREDITWORTHINESS OF THE CREDITS APPEARING IN ITS BOOKS. FOLLOWING T HE REASONING GIVEN IN MY ORDER OF THE EVEN DATE IN THE CASE OF R.S. ISPAT LTD., I THEREFO RE HOLD THAT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION U/S 68 OF THE ACT. THE ADDITION OF RS.30 LACS IS ACCORDINGLY DELETED. HENCE THIS APPEAL BY THE DEPARTMENT. 5. BEFORE US, BOTH THE PARTIES REITERATED THEIR SU BMISSIONS AS MADE IN THE CASE OF M/S. R.S. ISPAT LTD. FOR ASSESSMENT YEAR 2003-04 IN I.T.A.NO. 246 (KOL)/2011. THE EVIDENCES/DOCUMENTS PRODUCED ARE ALSO SIMILAR IN NA TURE. IN OUR ORDER OF 5 TH SEPTEMBER, 2011 IN RESPECT OF THE AFORESAID APPEAL, WE HAVE UP HELD THE ORDER OF LD. C.I.T.(A) IN DELETING THE ADDITION MADE BY THE A.O. U/S. 68 OF T HE ACT BY HOLDING AS UNDER :- 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF TH E PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE FACTS OF THE CASE HAVE BEEN NARRATED ABOVE. AFTER PERUSING THE ASSESSMENT ORDER, WE OBSERVE THAT THE IMPUGNED ADDITION U/S. 68 OF THE ACT OF RS.95 LAKHS WAS MADE BY THE A.O. MAINLY RELYING ON THE ST ATEMENT OF SHRI KHEMKA RECORDED ON 9/12/2006 U/S. 132(4) OF THE ACT IN WHICH HE HAD CLAIMED TO HAVE ADMITTED THAT THE ASSESSEE-COMPANY WAS PROVIDED ACCOMMODATION ENTRIES BY THE COMPANIES CONTROLLED BY HIM IN LIEU OF CASH RECEIPT. SIMILAR STATEMENTS WER E ALSO CLAIMED TO HAVE BEEN MADE BY THE DIRECTORS OF THE SHARES SUBSCRIBING COMPANIES I N THE LETTERS FILED BEFORE ADIT (INV) DATED 20.12.2006. EXCEPT THESE STATEMENTS OF SRI KH EMKA AND DIRECTORS OF THE SHARE- APPLICANT COMPANIES, NO OTHER CORROBORATIVE OR SPEC IFIC EVIDENCE COULD BE BROUGHT ON RECORD BY THE A.O. TO JUSTIFY THE DEPTH OF AUTHENTI CITY OF SUCH STATEMENTS AND SUBSEQUENT ACTION THEREUPON AS PER LAW, WHICH WERE SUBSEQUENTL Y RETRACTED BY THOSE PERSONS BY FILING LETTER AND/OR AFFIDAVITS STATING THEREIN THA T THE SEARCHING TEAM RECORDED THE STATEMENT OF SRI AURN KR. KHEMKA BY USING COERCION AND THREAT AND FURTHER IT WAS DUE TO UNDUE INFLUENCE, PRESSURE AND THREAT OF DIRE CON SEQUENCES BY THE DDIT THAT THE DIRECTORS OF THE SHARE-APPLICANT COMPANIES WERE COM PELLED TO MAKE STATEMENTS, WHICH WERE BEYOND THE CORRECT STATE OF AFFAIRS. WE OBSERV E THAT THE LD. C.I.T.(A) NOT ONLY CONSIDERED THE RETRACTED STATEMENT BUT ALSO CONSIDE RED THE EVIDENCES FILED IN SUPPORT OF PAYMENTS MADE TOWARDS SHARE APPLICATION MONEY IN RE SPONSE TO NOTICE U/S. 133(6) OF THE ACT. WE OBSERVE FROM THE ASSESSMENT ORDER THAT THE A.O. DID NOT EXAMINE SRI KHEMKA OR THE DIRECTORS OF THE SHARE-APPLICANT COMPANIES O N THEIR RETRACTION FROM THE EARLIER STATEMENTS TO ESTABLISH THAT THE CASH WAS GIVEN BY THE ASSESSEE BEFORE INTRODUCTION OF THE SAME IN THE SHAPE OF SHARE APPLICATION MONEY FOR TH E SHARES OF THE ASSESSEE-COMPANY. 5 HE HAS ALSO NOT MADE ANY EFFORTS TO LINK THE CASH R ECEIVED AND DEPOSITED BY SRI KHEMKA IN HIS BANK ACCOUNT TO ESTABLISH THAT THE MONEY WAS , IN FACT, CAME FROM THE COFFER OF THE ASSESSEE. THEREFORE, THE SHARE APPLICATION MONEY WA S THE UNDISCLOSED MONEY OF THE ASSESSEE, AS ALLEGED BY THE A.O. IS NOT BASED ON AN Y INDEPENDENT EVIDENCE GATHERED PRIOR TO OR DURING THE COURSE OF ASSESSMENT PROCEED INGS. IT IS ALSO AN ESTABLISHED POSITION IN LAW THAT THE INITIAL BURDEN TO PROVE THAT THE CO NFESSION WAS VOLUNTARY IN NATURE WOULD BE ON THE DEPARTMENT, WHICH, IN OUR OPINION, HAS NO T BEEN DISCHARGED BY THE DEPARTMENT. THE LD. A/R RELIED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF VINOD SOLANKI VS. UNION OF INDIA (SUPRA) AND DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. UTTAMCHAND JAIN (SUPRA). THE HONBLE BOMBA Y HIGH COURT IN THE CASE OF CIT VS. UTTAMCHAND JAIN (SUPRA) FOLLOWING THE SAID DECI SION OF HONBLE APEX COURT HAS HELD THAT THE RETRACTED CONFESSION OF A PERSON CAN BE RE LIED UPON ONLY IF THERE IS INDEPENDENT AND COGENT EVIDENCE TO CORROBORATE THE STATEMENT OF THAT PERSON MADE EARLIER. IN THE PRESENT CASE, THE DIRECTORS OF THE SHARE-APPLICANT COMPANIES NOT ONLY RETRACTED THEIR STATEMENTS RECORDED EARLIER BY FILING AFFIDAVITS BU T ALSO FILED AUDITED ACCOUNTS, EVIDENCE OF FILING OF I.T. RETURN, BANK STATEMENT, DETAILS O F CHEQUES AND SHARE APPLICATION ETC. IN SUPPORT OF GENUINENESS OF SHARE APPLICATION MONEY. THEREFORE, IN OUR CONSIDERED OPINION, THE LD. C.I.T.(A) ACTED JUDICIOUSLY IN TAK ING INTO CONSIDERATION THE RETRACTED STATEMENTS CORROBORATED BY THE EVIDENCES REFERRED T O ABOVE. 7. NOW LET US EXAMINE WHETHER ADDITION OF RS.95 L AKHS IS WARRANTED IN THE HANDS OF THE ASSESSEE ON THE GIVEN FACTS AND CIRCUMSTANCES OF TH E CASE AS ALSO EVIDENCE ON RECORD. PROVISIONS OF SEC.68 OF THE ACT HAVE BEEN JUDICIALL Y CONSIDERED BY SEVERAL COURTS OF LAW, AS PER WHICH AN ADDITION U/S. 68 CAN BE MADE W HERE AN ASSESSEE FAILS TO PROVE IDENTITY OF THE CREDITOR; HIS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IN THE PRESENT CASE IT WAS NECESSARY FOR A.O. TO PROVE THA T ON ALL 3 INGREDIENTS THE ASSESSEE HAD FAILED AND, THEREFORE, ADDITION WAS WARRANTED. IT W AS THEREFORE, NECESSARY THAT THE AO PROVED INFIRMITY IN THE DOCUMENTS TO WARRANT ADDITI ON U/S. 68 OF THE ACT. IN THIS CASE, THE A.O. HAD ISSUED NOTICES U/S. 133(6) OF THE ACT TO ALL THE SHARE-APPLICANT COMPANIES, WHICH WERE DULY SERVED AT THE ADDRESSES FURNISHED B Y THE ASSESSEE. THIS PROVES THE IDENTITY OF THE SHARE APPLICANTS. FURTHER, IN RESPO NSE TO THE SAID NOTICE U/S. 133(6) OF THE ACT, EACH OF THE SHARE-APPLICANTS FURNISHED THEIR R EPLIES CONFIRMING THE TRANSACTIONS WITH THE ASSESSEE-COMPANY. THE SHARE-APPLICANT COMPANIES NOT ONLY ADMITTED THE FACT OF MAKING INVESTMENTS IN THE SHARE CAPITAL OF THE ASSE SSEE-COMPANY, BUT ALSO SUBSTANTIATED THEIR CONFIRMATION BY FILING COPIES OF THE AUDITED ACCOUNTS, BANK STATEMENTS, ACKNOWLEDGEMENT OF FILING OF I.T. RETURNS FOR THE A SSESSMENT YEAR UNDER CONSIDERATION, DETAILS OF CHEQUE AND SHARE APPLICATION. IN THE AUD ITED ACCOUNTS OF THE SHARE APPLICANTS AND ALSO IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, T HE IMPUGNED SHARE TRANSACTIONS BY ACCOUNT PAYEE CHEQUES HAVE BEEN DULY REFLECTED. THE SHARE-APPLICANT COMPANIES HAVE ALSO EXPLAINED THE IMMEDIATE SOURCE OUT OF WHICH TH EY HAVE CLAIMED TO HAVE MADE INVESTMENTS IN THE SHARES OF THE ASSESSEE-COMPANY. WE FURTHER OBSERVE FROM THE BANK STATEMENTS OF THE SHARE-APPLICANTS THAT NO CASH WAS DEPOSITED IN THE ACCOUNTS OF THE SHARE-APPLICANTS PRIOR TO ACKNOWLEDGEMENT OF CHEQUE S FOR SHARE APPLICATION MONEY. IT IS PERTINENT TO MENTION HERE THAT THE A.O. OF HIS O WN COLLECTED THE ABOVE INFORMATION/ EVIDENCE DIRECTLY FROM THE SHARE-APPLICANT COMPANIE S U/S. 133(6) OF THE ACT. THESE FACTS WITH SUPPORTING EVIDENCE, THEREFORE, CUMULATI VELY PROVE THE IDENTITY OF THE SHARE APPLICANTS, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. THEREFORE, THE ONUS CAST ON THE ASSESSEE U/S. 68 OF THE ACT, IN OU R CONSIDERED OPINION, WAS DULY DISCHARGED BY IT. ON THE OTHER HAND, THE A.O. NOT ONLY FAILED TO PROVE ANY INFIRMITY OR INACCURACY IN ANY OF THE DOCUMENTS COLLECTED BY HIM BUT ALSO IGNORED SUCH EVIDENCE 6 MERELY ON SURMISE AND CONJECTURE. THEREFORE, WHEN A LL THE INGREDIENTS CONTAINED IN SEC. 68 ARE FULFILLED, THERE IS HARDLY ANY SCOPE TO INVO KE THAT SECTION ALLEGING INTRODUCTION OF UNEXPLAINED FUND BY WAY OF SHARE APPLICATION, MORE SO WHEN NO EVIDENCE COULD BE BROUGHT ON RECORD BY THE DEPARTMENT TO THE CONTRARY . 7.1. THE HONBLE RAJASTHAN HIGH COURT HAS HELD IN THE CASE OF BARKHA SYNTHETICS LTD. VS. ACIT [2005] 197 CTR 432 (RAJ.) THAT THE PRINCIP LE RELATING TO BURDEN OF PROOF CONCERNING ASSESSEE IS THAT WHETHER THE MATTER CONC ERNS THE MONEY RECEIPTS BY WAY OF SHARE APPLICATION FROM INVESTORS, THROUGH BANKING C HANNELS, ASSESSEE HAS TO PROVE EXISTENCE OF PERSONS IN WHOSE NAME THE SHARE APPLIC ATION IS RECEIVED. ONCE THE EXISTENCE OF INVESTOR IS PROVED, IT IS NO FURTHER B URDEN OF THE ASSESSEE TO PROVE WHETHER THAT PERSON ITSELF HAS INVESTED THE SAID MONEY OR S OME PERSON MADE INVESTMENT IN THE NAME OF THAT PERSON. THE BURDEN THEN SHIFTS ON REVE NUE TO ESTABLISH THAT SUCH INVESTMENT HAS COME FROM ASSESSEE-COMPANY ITSELF. IN THE CASE BEFORE US, DEPARTMENT DOUBTS INTRODUCTION OF SHARE CAPITAL BY THE SHARE APPLICAN TS WHEN IT IS STATED BY THE A.O. THAT THE SHARES OF THE ASSESSEE-COMPANY HAVE BEEN SUBSCR IBED BY VARIOUS COMPANIES THROUGH CERTAIN BOGUS TRANSACTIONS IN WHICH CHEQUES WERE IS SUED TO THE ASSESSEE-COMPANY IN LIEU OF CASH GIVEN. HOWEVER, AS STATED ABOVE, NO EVIDENC E IS BROUGHT ON RECORD BY THE DEPARTMENT THAT THE SHARE APPLICATION MONEY HAS BEE N BROUGHT IN THE NAME OF THE SHARE APPLICANTS BY THE ASSESSEE-COMPANY. HONBLE APEX C OURT IN THE CASE OF CIT VS. DAULAT RANT RAWATMULI [87 ITR 349 (SC)] HAS HELD THAT ONUS TO PROVE THAT THE APPARENT IS NOT THE REAL IS ON THE PERSON WHO CLAIMS IT TO BE SO. T HEREFORE, THE ONUS IS ON THE DEPARTMENT TO PROVE THAT THE SHARE APPLICATION MONEY SUBSCRIBE D TO THE SHARE CAPITAL OF THE ASSESSEE- COMPANY BY THE ABOVE NAMED SHARE APPLICANTS IS NOT THE MONEY OF THE SHARE APPLICANTS BUT OF THE ASSESSEE-COMPANY, IS ON THE DEPARTMENT. HOWEVER, THE DEPARTMENT HAS NOT BROUGHT ANY MATERIAL ON RECORD TO ESTABLISH THE SAM E. WE ARE OF THE CONSIDERED VIEW THAT THE A.O. DOUBTED THE GENUINENESS OF THE SHARE APPLI CATION MONEY ON SURMISES AND CONJECTURE AND HAS NOT BROUGHT COGENT MATERIAL ON R ECORD TO ESTABLISH THE BOGUS NATURE OF TRANSACTION. 7.2. WE MAY FURTHER REFER TO THE THIRD MEMBER DEC ISION OF I.T.A.T., JODHPUR BENCH IN THE CASE OF POLYMERS (P) LTD. VS. DCIT [111 TTJ 112 ] WHEREIN IT WAS HELD THAT IN RESPECT OF SHARE APPLICATION MONEY, ASSESSEE-COMPAN Y HAS TO PROVE EXISTENCE OF PERSONS IN WHOSE NAME SHARE APPLICATION IS RECEIVED. NO BUR DEN IS CAST ON THE ASSESSEE TO PROVE WHETHER THAT PERSON HIMSELF HAS INVESTED OR SOME OT HER PERSON HAS MADE INVESTMENT IN HIS NAME. THE BURDEN TO PROVE THAT THE MONEY DID NO T BELONG TO HIM BUT TO SOME BODY ELSE IS ON THE REVENUE. IT WAS FURTHER HELD THAT IF ANY OF THE SHAREHOLDERS IS FOUND TO HAVE MADE UNEXPLAINED INVESTMENT, THEN ADDITION OF SUCH INVESTMENT IS REQUIRED TO BE MADE IN THE HANDS OF THE SHAREHOLDERS AND NOT IN THE HAN DS OF THE ASSESSEE. ACCORDINGLY, IT WAS HELD THAT THE A.O. WAS NOT JUSTIFIED IN TREATIN G THE INVESTMENT MADE BY THE SEVERAL SHAREHOLDERS IN THE ASSESSEE-COMPANY AS BOGUS AND T O MAKE ADDITION U/S. 68 OF THE ACT. 7.3. THE HONBLE APEX COURT HAS CONSIDERED THE SI MILAR ISSUE IN THE CASE OF CIT VS. M/S. LOVELY EXPORTS (P) LTD. [216 C.T.R. 195 (SC)] AND HELD AS UNDER :- CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDISC LOSED INCOME UNDER S. 68 OF I.T. ACT, 1961? WE FIND NO MERIT IN THIS SPECIA L LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEI VED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GI VEN TO THE A.O., THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN 7 ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY W ITH THE IMPUGNED JUDGMENT. IN THE CASE UNDER CONSIDERATION BEFORE US, AS STATE D ABOVE, THE ASSESSEE HAS FURNISHED THE DETAILS OF SHAREHOLDERS WITH COMPLETE ADDRESS, PAN DETAILS, BANK STATEMENTS, DETAILS OF I.T. RETURNS ETC. THE TRANSACTIONS ARE ADMITTEDLY R ECORDED IN THE AUDITED BOOKS OF ACCOUNTS OF BOTH THE ASSESSEE-COMPANY AS WELL AS SH ARE-APPLICANT COMPANIES, WHO PURCHASED SHARES OF THE ASSESSEE-COMPANY. THEREFORE , NO ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT IS WARRANTED IN THE CASE OF THE ASSESSEE ON THE GIVEN FACTS AND CIRCUMSTANCES AS DISCUSSED ABOVE. IN VIEW OF THE AB OVE, IN OUR OPINION, THE ACTION OF THE A.O. IS CONTRARY TO THE DECISION OF HONBLE APEX CO URT IN THE CASE OF CIT VS. M/S. LOVELY EXPORTS (P) LTD. (SUPRA). 7.4. IN VIEW OF ABOVE FACTS AND THE DECISIONS CITE D SUPRA, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD. C.I.T.(A) IN DELETING THE ADDITION RS. 95 LAKHS MADE BY THE A.O. U/S. 68 OF THE ACT. HENCE, WE UPHOLD HIS ORDER AND REJECT THE GROUND OF APPEAL TAKEN BY THE DEPARTMENT. THEREFORE, FOLLOWING OUR AFORESAID ORDER OF 5 TH SEPTEMBER, 2011, WE HOLD THAT THERE IS NO INFIRMITY IN THE ORDER OF LD. C.I.T.(A) IN DELETING THE ADDITION OF RS.30 LAKHS MADE BY THE A.O. U/S. 68 OF THE ACT. HENCE, WE UPHOLD HIS ORDE R AND REJECT THE GROUND OF APPEAL TAKEN BY THE DEPARTMENT. 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. 4 '3 #5' 6 5% 7 48 THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 06-09 -2011 SD/- SD/- ( . .. . ! ! ! !. .. . ) '# ( . . . . . .. . ) (C.D.RAO) , ACCOUNTANT MEMBER (B.R.MITTAL) , JUDICIAL MEMBER ( (( (!# !# !# !#) )) ) DATE: 06-09-2011 '3 1 /9 :'9';- COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT : A.C.I.T., CENTRAL CIRCLE-XXIV, KOLKATA. 2 /0+, / THE RESPONDENT : M/S.BAJRANGBALI ROLLING MILLS PVT. LTD., B-401, CIT Y CENTRE, SALT LAKE, KOLKATA-700 064. 3. 3% () : THE C.I.T.(A), CENTRAL-III, KOLKATA. 4. 3% : THE C.I.T., CENTRAL-III, KOLKATA. 5. ?7 /% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 . GUARD FILE . 09 // TRUE COPY, '3%5/ BY ORDER, (DKP) @ A / DY/ASSTT. REGISTRAR .