Nishant Construction Pvt. Ltd., Ahmedabad V. The Asstt. Commissioner of Income Tax, Circle-5, Ahmedabad

ITA 2732/AHD/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8883 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-07-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 21-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N R SONI
• Keywords: Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Share purchase agreement; Principle of natural justice; Opportunity of cross examination; Source of fund; Question of law; Corroborative evidences; Retraction; Reason to believe; Set aside
• Section: 69C; 143(3); 143(1); 250; 251; 131; 68; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER ITA NO.2732/AHD/2016 (ASSESSMENT YEAR : 2010-11) NISHANT CONSTRUCTION PVT. LTD., 801 802, REGENCY PLAZA, ANAND NAGAR ROAD, SATELLITE, AHMEDABAD 380 015. VS. DCIT, CIRCLE 3(1)(1), AHMEDABAD. [ PAN NO. AAACN 3752 B ] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S.N. SOPARKAR , SR. ADVOCATE WITH MS. URVASHI SODHAN RESPONDENTBY: SHRI N. R. SONI, CIT-D.R. DATE OF HEARING 10.07.2019 DATE OF PRONOUNCEMENT 25 .0 9 . 2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL IS DIRECTED AGAINST THE ORDER DA TED 24.08.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 9, AHMEDABAD ARISING OUT OF THE ORDER DATED 13.03.2015 PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(1), AHMEDAB AD UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2010-11. 2. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 25.09.2010 DECLARING TOTAL INCOME AT ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 2 - RS.99,38,140/- WHICH WAS ACCEPTED BY PASSING INTIMA TION UNDER SECTION 143(1) OF THE ACT ON 24.05.2011. SUBSEQUENTLY ON 19 .05.2011 A SURVEY WAS CONDUCTED BY THE INVESTIGATION WING, AHMEDABAD AT SEVERAL PREMISES OF M/S NISHANT CONSTRUCTION PRIVATE LTD. U PON GOING THROUGH THE SURVEY REPORT DATED 27.07.2012 SENT TO THE CONC ERNED OFFICE AND UPON ANALYSING THE IMPOUNDED DOCUMENTS CERTAIN FACTS CLA IMED TO HAVE BEEN EMERGED BEFORE THE REVENUE AUTHORITIES FOR WHICH UL TIMATELY ADDITIONS ON FOLLOWING 3 COUNTS WERE MADE: A. ADDITION ON ACCOUNT OF ALLEGED BOGUS PREMIUM TO THE TUNE OF RS.4 CRORES U/S 68 OF THE ACT. B. RS.18,05,87,658/- ON ACCOUNT OF ON MONEY PAYMENT/ UNACCOUNTED INVESTMENT IN PURCHASE OF LAND OF THE A PPELLANTS PROJECT RATNAKAR IV AND C. ON MONEY RECEIPTS TO THE TUNE OF RS.17,85,79,435/- THE ADDITION, HOWEVER, WAS CONFIRMED BY THE FIRST A PPELLATE AUTHORITY, HENCE THE ASSESSEE IS BEFORE US. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED SR. COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT HE DOES NOT WANT TO PROCEED WITH THE GROUND NO.1 BEING THE MAIN TAINABILITY OF THE PROCEEDING. HENCE, THE FIRST GROUND PREFERRED BY TH E ASSESSEE IS DISMISSED AS NOT PRESSED. 4. WE NOW PROPOSE TO DEAL WITH THE GROUNDS RELATING TO THE ADDITION MADE ON EACH COUNT. ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 3 - GROUND NO.2: ADDITION ON ACCOUNT OF ALLEGED BOGUS PREMIUM TO THE TUNE OF RS 4 CRORE. 5. THE BRIEF FACTS LEADING TO THIS ADDITION IS THIS THAT THE ASSESSEE WAS ALLEGED TO HAVE BEEN IN RECEIPT OF INVESTMENT AMOUN TING TO RS. 4 CRORE FROM ONE M/S ANKUSH FINSTOCK LTD WHEREUPON THE DIRE CTOR OF THE SAID COMPANY NAMELY SHRI BHARAT M. SHAH WAS SUMMONED UND ER SECTION 131 OF THE ACT AND HIS STATEMENT WAS RECORDED ON 27.06. 2011. ACCORDING TO THE STATEMENT OF SHRI BHARAT M. SHAH UPON RECEIVING THE SAID AMOUNT OF RS.4 CRORE FROM THE DIRECTOR OF THE ASSESSEE COMPAN Y NAMELY SHRI UPENDRA C. SHAH DURING THE YEAR RELEVANT TO ASSESSM ENT YEAR 2010-11 HAS INTRODUCED THE SAME INTO HIS OWN COMPANY M/S ANKUSH FINSTOCK LTD AND SUBSEQUENTLY USED THE SAME TO INVEST IN ASSESSEES COMPANY THROUGH HIS OWN COMPANY. 6. IT FURTHER REVEALED THAT THE ASSESSEE COMPANY AL LOTTED 80,000, 40,000 AND 40,000 NUMBER OF SHARES TO SHRI NISHANT U. SHAH, SHRI UPENDRA C. SHAH AND NILAM U. SHAH RESPECTIVELY. ALL THE SHARES WERE ULTIMATELY PURCHASED BY NILAM U. SHAH. IT WAS FURTH ER CLAIMED TO HAVE BEEN APPEARED FROM THE DOCUMENTS SUBMITTED BY SHRI BHARAT M. SHAH AND ALSO FROM HIS STATEMENT THAT ANKUSH FINANCE LTD PURCHASED 160000 SHARES OF NISHANT CONSTRUCTION PRIVATE LTD AT THE R ATE OF RS.250/- PER SHARE INCLUDING SHARE PREMIUM OF RS.240/- FROM THE SAID NILAM U. SHAH. WHILE EXPLAINING THE SOURCE OF FUNDS TO INVEST ON S HARES OF THE ASSESSEES COMPANY, THE LEARNED ASSESSING OFFICER ALSO NARRATE D THE DETAILS OF ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 4 - TRANSACTION OF RECEIPTS FROM VARIOUS PARTIES TOGETH ERWITH THE APPLICATION OF RS. 4 CRORE IN ORDER TO ESTABLISH THE CO-RELATIO N BETWEEN THE TWO. IT WAS FURTHER MENTIONED BY THE LEARNED AO THAT UPENDRA C. SHAH AND NILAM U. SHAH BOTH INVESTED RS. 1 CRORE EACH IN THE LOAN ACCOUNT OF THE ASSESSEE COMPANY IN THEIR BOOKS OF ACCOUNTS TO INVEST IN ITS SHARES. OUT OF THE AMOUNT OF RS. 4 CRORE SO RECEIVED FROM ANKUSH FINAN CE LTD TOTAL AN AMOUNT OF RS.1,79,96,000/- (RS.1,19,96,000/- BY NIL AM U. SHAH AND RS.60,00,000/- BY UPENDRA C. SHAH) INVESTED IN THE SHARES TO THE ASSESSEE COMPANY THEREBY UNACCOUNTED INCOME WAS INTRODUCED I N THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY BY MAKING SUCH INV ESTMENT IN ITS SHARES TO THE TUNE OF RS.1,79,96,000/-. FURTHER THA T LOAN OF AN AMOUNT OF RS.1,65,50,000/- HAS ALSO BEEN SAID TO BE REPAID TO THE DEBTORS OF THE ASSESSEE COMPANY FROM WHOM THE ASSESSEE TOOK LOANS IMMEDIATELY PRECEDING THE MONTH OF INVESTMENT I.E. DECEMBER 200 8. THUS THE AMOUNT OF RS.1,65,50,000/- HAS BEEN SAID TO BE BROUGHT TO THE BOOKS OF ASSESSEE COMPANY BEING NISHANT CONSTRUCTION PRIVATE LTD. AS OBSERVED BY THE LEARNED ASSESSING OFFICER. THE ENTIRE PATTERN OF TR ANSACTION BY ROTATION OF MONEY ACTUALLY OWNED BY SHRI UPRENDRA C. SHAH IS NOTHING BUT A CLEVER TRICK ADOPTED BY THE ASSESSEE TO INTRODUCE U NACCOUNTED INCOME IN THE GROUP COMPANY AND INDIVIDUALS IN A DISGUISED MA NNER AND ULTIMATELY THE ASSESSMENT WAS FINALISED INTER ALIA BY MAKING A DDITION OF RS.4 CRORE UNDER SECTION 68 OF THE ACT ON ACCOUNT OF UNEXPLAIN ED CREDITS WHICH WAS FURTHER CONFIRMED BY THE FIRST APPELLATE AUTHORITY. HENCE THE INSTANT APPEAL BEFORE US. ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 5 - 7. DURING THE APPELLATE PROCEEDING THE ASSESSEE SUB MITTED THE FOLLOWING BEFORE THE LEARNED FIRST APPELLATE AUTHOR ITY: 5.1 ON THIS ISSUE THE APPELLANT DURING THE COURSE O F APPELLATE PROCEEDINGS SUBMITTED AS UNDER:- '(I) ADDITION ON ACCOUNT OF ALLEGED BOGUS PREMIUM RS. 4,00.00,000/- THE LD. A.O. HAS ERRED IN LAW AND ON FACTS IN MAKIN G HUGE ADDITION OF RS. 400,00,000/- ON ACCOUNT OF ALLEGED BOGUS SHARE PREMIUM IGNORING THE FACT THAT THERE WAS ABSOLUTELY NO EVIDENCE OF S UCH UNDISCLOSED INCOME OF THE APPELLANT NOR ANY CONCERN OF THE APPE LLANT WITH REGARD TO THE SHARE TRANSACTIONS. THE ADDITION MADE MERELY ON ASSUMPTION AND ON THE BASIS OF THE STATEMENT OF DIRECTOR OF ANKUSH FINSTOCK LTD. WHOSE CROSS EXAMINATION WAS SPECIFICALLY ASKED IS PATENTL Y WRONG AND AGAINST THE SANCTION OF LAW. IT BE SO HELD NOW AND THE HUGE ADDITION OF RS.4,00,00,000/- MADE ON THIS ACCOUNT BE DELETED. (II) THE LD AO FURTHER ERRED IN LAW AND ON FACTS T HAT THE APPELLANT HAD FURNISHED ALL THE DETAILS AND EXPLANATION WITH REGARD TO ANKUSH FINSTOCK LTD IN ITS LETTER DATED 11.12.2014 ALONG W ITH DOCUMENTARY EVIDENCES WHICH HAVE BEEN CLEARLY IGNORED AND NOT P ROPERLY CONSIDERED WHILE MAKING ADDITION IN THE HANDS OF THE APPELLANT .THE ADDITION MADE IS UNJUSTIFIED, UNCALLED FOR AND AGAINST THE SANCTI ON OF LAW. IT BE SO HELD NOW AND ADDITION BE DELETED. YOUR APPELLANT SUBMITS THAT THERE IS NO JUSTIFICATI ON AT ALL NOR ANY SANCTION OF LAW FOR THE ADDITION OF RS. 4,00,00,000 /- MADE BY THE LD AO IN THE HANDS OF THE APPELLANT COMPANY. THE ADDITIO N IS MADE ON THE BASIS OF ALLEGED STATEMENT OF MR. BHARAT SHAH OF M/ S ANKUSH FINSTOCK LIMITED (WHOSE CROSS EXAMINATION IS NOT ALLOWED D ESPITE SPECIFIC REQUEST) IN THIS REGARD, YOUR KIND ATTENTION IS INV ITEDTO APPELLANT'S SUBMISSIONS IN LETTER DATED 11.12.2014 ATTACHED WIT H APPEAL MEMO AS EXHIBIT-A AT PAGE 8 IN WHICH IT IS VERY CLEARLY STA TED THAT THERE WAS NO INVESTMENT BY M/S ANKUSH FINSTOCK LIMITED IN THE AP PELLANT COMPANY. THE SAID SUBMISSIONS ARE REITERATED IT IS ALSO ESTA BLISHED FORM THE FACTS AND EVIDENCES IN THE FORM OF VARIOUS DOCUMENTS ATTA CHED WITH THE SAID REPLY THAT THE APPELLANT COMPANY MERELY FOLLOWED PROCEDURE OF TRANSFER OF SHARES IN THE TRANSACTIONS BETWEEN THE SHARE HOLDERS ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 6 - TRANSFERRING THEIR SHARES AS PER THE PROVISIONS OF THE COMPANIES ACT. THE ASSUMPTION DRAWN BY THE ID AO IS THUS WITHOUT C ONSIDERATION OF FACTUAL POSITION AND HENCE EVEN REOPENING BASED ON THESE FACTS WHICH ARE CONTRARY TO THE VIEW TAKEN BY AO IS BAD IN LAW. THE APPELLANT'S EXPLANATION AS REGARDS THE TRANSACT IONS OF SHARE TRANSFER BETWEEN THE SHARE HOLDERS (TRANSFEROR) AND M/S ANKUSH FINSTOCK LIMITED (TRANSFEREE) HAS NOT BEEN REBUTTED BY THE AO AND IS OTHERWISE ESTABLISHED FORM THE RECORDS FURNISHED TO HIM. THE APPELLANT REITERATES THE SUBMISSIONS MADE AT PARA 1 OF THE LE TTER DATED 11.2.2014 (PAGE 8 TO 11 AS ENCLOSED WITH APPEAL MEMO). THE LD AO HAS MISERABLY FAILED TO APPRECIATE THE TR UE POSITION AND ALSO FAILED TO CONSIDER THE SUPPORTING DOCUMENTARY EVIDE NCES IN THE FORM OF SHARE APPLICATIONS, BOARD RESOLUTION ALLOTTING SHAR ES IN THE YEAR 2008- 09, ALLOTMENT OF SHARES AS WELL AS FORM NO 2 FILED WITH ROC, SHARE TRANSFER FORMS, RESOLUTION SANCTIONING TRANSFER OF SHARES FROM BOTH THE COMPANIES ETC (ATTACHED WITH LETTER DATED 11.12.201 4 ). IT IS THEREFORE ABUNDANTLY CLEAR THAT AS FAR AS THE APPELLANT COMPANY IS CONCERNED, THE ADDITION IS MADE MERELY ON THE BASIS OF ASSUMPTION, PRESUMPTION AND SUSPICION ON THE BASIS OF ALLEGED UNCROSS VERIFIED STATEMENT OF MR. BHARAT SHAH OF ANKUSH FINSTOCK LTD . IT IS ALSO CLEAR FROM THE ANALYSIS OF THE TRANSACTI ONS NOTED BY AO IN PARA 4 OF HIS ORDER THAT THE TRANSACTIONS OF SHARE PURCH ASES WERE PERTAINING TO YEAR 2008 AND WERE ALL GENUINE TRANSACTIONS BETW EEN THE VARIOUS PERSONS. MERELY BECAUSE THE SHARES EARLIER ALLOTTED (WHICH WERE ACCEPTED AS GENUINE TRANSACTIONS) WERE TRANSFERRED BY THE SHARE HOLDERS DURING LATER YEARS, IT CANNOT BE PRESUMED THAT THE AMOUNT RECEIVED BY THOSE SHAREHOLDERS THROUGH PROPER BANKING CHANNELS WAS TO BE ADDED IN THE HANDS OF THE APPELLANT COMPANY WHICH HAS NO ROL E TO PLAY IN THOSE TRANSACTIONS IT BE SO HELD NOW AND ADDITION OF RS. 4,00,00,0007- BE DELETED, AND ADDITION. IT IS ALSO FURTHER SUBMITTED THAT THE ID AO HAS MAD E HALF HEARTED ERRONEOUS ADDITION-SINCE IN PARA 4.1.18, IT IS OBSE RVED THAT ALLEGED UNACCOUNTED INCOME IS TO BE ADDED PROTECTIVELY IN T HE HANDS OF SHRI UPENDRA SHAH AND NILAM U SHAH.THIS SHOWS THAT THERE IS NO 'REASON TO BELIEVE' AS THE AO HIMSELF HAS DOUBTS WITH REGAR D TO THE SATISFACTION WHICH IS ENVISAGED IN SECTION 147. ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 7 - IT IS FURTHER SUBMITTED WITHOUT PREJUDICE TO THE AB OVE THAT THE ALLEGED STATEMENT OF MR. BHARAT SHAH IS RELIED UPON FOR WHI CH NO CROSS EXAMINATION IS GIVEN THOUGH SPECIFICALLY REQUESTED BY THE APPELLANT. (PARA 13 OF LETTER DATED 11.12.2014 PAGE 11 OF THE EXHIBIT-A ATTACHED WITH APPEAL MEMO). THE APEX COURT IN THE CASE OF KISHINCHANMD CHELLARA M VS CIT 125 ITR 713(SC) THAT ADDITION BASED BY RELYING ON THE STATE MENT OF THIRD PARTY WITHOUT PERMITTING THE ASSESSEE TO CROSS EXAMINATIO N IS NOT VALID. IT IS ALSO SUBMITTED THAT AS IS VERY CLEAR FORM THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT IN ITS LETTER DATE D 11.12.2014 ALONG WITH DOCUMENTARY EVIDENCES RELATING TO SHARE APPLIC ATIONS , BOARD RESOLUTIONS ETC , THE APPELLANT COMPANY HAD NO CONC ERN WITH THE TRANSACTION OF SHARES BETWEEN BHARAT M SHAH OR ANKU SH FINSTOCK LTD AND THE SHAREHOLDERS AND THERE BEING NO CASH CREDIT IN THE BOOKS OF THE APPELLANT SO FAR AS THE SAID TRANSACTIONS ARE CONCE RNED, THE ADDITION IN THE HANDS OF THE APPELLANT IS NOT AT ALL JUSTIFIED OR PERMISSIBLE BY ANY PROVISION OF THE ACT. IT BE SO HELD NOW AND ADDITIO N BE DELETED. IT IS SUBMITTED THAT THE OBSERVATIONS OF THE AO IN PARA 4 TO 4.1.18 TO CONCLUDE THAT THAT MODUS OPERANDI OF APPELLANT WAS ROUTING THE ALLEGED UNACCOUNTED MONEY TO DIRECTORS BANK ACCOUNT AND ADV ANCING LOAN TO COMPANY ARE INCORRECT AND BASED ON NO COGENT MATERI AL OR EVIDENCE EXCEPT SUSPICION. THE ID AO HAS MISERABLY FAILED TO RELATE THE AMOUNT OF RS. 4,00,00,000/- AS THE RECEIPT BY THE APPELLANT A S UNEXPLAINED OR UNACCOUNTED INCOME. IT BE SO HELD NOW AND ADDITION OF RS.4,00,00,000/- BE DELETED.' 8. THE LEARNED CIT(A) WHILE CONFIRMING THE ADDITION MADE BY THE LEARNED AO OBSERVED AS FOLLOWS: 5.2 I HAVE CAREFULLY CONSIDERED THE RIVAL CON TENTIONS, OBSERVATION OF THE A.O. AS WELL AS THE CASE LAW RELIED UPON BY THE APPELLANT. IT IS OBSERVED THAT THE A.O HAS MADE AN ADDITION OF RS. 4 CRORE ON ACCOUNT OF UNEXPLAINED CREDITS AS PER SEC.68 OF THE ACT. IT IS OBSERVED FROM PARA- 4.1.18 OF THE ORDER OF ASSESSMENT THAT THE A.O HAS ALSO MADE PROTECTIVE ADDITION OF RS. 4 CRORES IN THE HANDS OF SHRI UPEND RA C. SHAH AND SMT. NILAM U. SHAH. THE ADDITION IN THE HANDS OF THE APP ELLANT HAS BEEN MADE ON SUBSTANTIVE BASIS. THE A.O AT PARA-4.1 TO 4.1.18 HAS DEALT WITH THE ISSUE OF SHARE APPLICATION MONEY RECEIVED BY THE APPELLANT. THE A.O HAS OBSERVED THAT THE APPELLANT HAD ALLOTTED 1, 60,000 SHARES AT THE ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 8 - RATE OF RS. 250 PER SHARE (RS. 10 + PREMIUM OF RS. 240/-) TO THE DIRECTORS/RELATED INDIVIDUALS OF THE DIRECTORS NAME LY NILAM U. SHAH, WIFE OF SHRI UPENDRA SHAH, SHRI UPENDRA SHAH, M.D O F THE APPELLANT COMPANY AND SHRI NISHANT U. SHAH, SON OF SHRI UPEND RA SHAH. 160000 SHARES OF THE APPELLANT WERE ALLOTTED BY THEAPPELLA NT ON 31/3/2009. LATER ON SMT. NILAM U. SHAH PURCHASED THE SHARES SO ALLOTTED TO SHRI UPENDRA C. SHAH AND SHRI NISHANT U. SHAH. IN F.Y. 2009-10,SMT. NILAM U. SHAH SOLD 160000 SHARES AT THE RATE OF RS. 250/- PER SHARES TO ANKUSH FINSTOCK PVT. LTD. DURING THE POST SEARCH EN QUIRIES, ENQUIRIES WERE ALSO MADE WITH REGARD TO THE INVESTMENT MADE B Y ANKUSH FINSTOCK IN THE SHARES OF NISHANT CONSTRUCTION PVT. LTD./APP ELLANT BY WAY OF PURCHASING 160000 SHARES FROM NILAM U. SHAH. SHRI B HARAT MANUBHAI SHAH, DIRECTOR OF ANKUSH FINSTOCK ON 27/6/2011 WAS ASKED ABOUT THE SOURCE OF FUNDS FOR MAKING INVESTMENTS IN THE SHARE S OF APPELLANT. SHRI BHARAT M. SHAH INFORMED AND ADMITTED BEFORE THE TAX AUTHORITIES THAT HE WAS IN THE BUSINESS OF PROVIDING ENTRIES TO VARI OUS GROUPS/COMPANIES/PERSONS. ACCORDING TO SHRI BHARAT SHAH, HE RECEIVED CASH FROM THE BENEFICIARY PARTY AND PROVIDED THE EN TRY TO THEM IN THE FORM OF SHARE CAPITAL/PREMIUM. HE HAD DEVELOPED THE NETWORK OF BANK ACCOUNTS IN THE NAME OF HIS RELATIVES/EMPLOYEES AND DIFFERENT PERSONS IN WHICH THE CASH SO RECEIVED BY THE BENEFICIARY PARTY WAS INTRODUCED. AFTER LAYERING THE CASH IN VARIOUS BANK ACCOUNTS, F INALLY A CHEQUE IS ISSUED IN THE NAME OF THE BENEFICIARY PARTY FOR MAK ING SHARE APPLICATION OR INTRODUCING THE CAPITAL. HE ADMITTED TO THE T AX AUTHORITIES THAT HE HAD RECEIVED RS. 4 CRORE IN CASH FROM SHRI UPENDRA C. SHAHOF THE APPELLANT COMPANY. HE ALSO ISSUED A CHEQUE FROM TH E ACCOUNT OF ANKUSH FINSTOCK FAVOURING NILAM U. SHAH FOR THE PUR CHASE OF SHARES OF THE APPELLANT COMPANY. HE ADMITTED THAT TILL DATE H E HAD NOT BEEN GIVEN ANY SHARE CERTIFICATE OF THE APPELLANT COMPANY AND AT THE SAME TIME THE APPELLANT HAD ALSO TAKEN BLANK SIGNED SHARE TRANSFE R FORMS FROM HIM WHICH ARE IN THE POSSESSION OF THE APPELLANT COMPAN Y. ON 4/7/2011 SHRI BHARAT SHAH RE-AFFIRMED TO THE TAX AUTHORITIES THAT HE HAD RECEIVED RS. 4 CRORES IN CASH IN ORDER TO BUY SHARES OF APPELLANT COMPANY. HE EXPLAIN TO THE TAX AUTHORITIES HOW THE CASH WAS ROUTED THRO UGH VARIOUS BANK ACCOUNTS THROUGH ITS STATEMENTS TO THE BANK ACCOUNT OF ANKUSH FINSTOCK THROUGH BANK STATEMENTS. IT WAS EVIDENT TO THE TA X AUTHORITIES THAT RS. 4 CRORE GIVEN IN CASH BY SHRI UPENDRA C. SHAH TO SHRI BHARAT SHAH FINALLY CAME BACK TO UPENDRA SHAH IN THE FORM OF IN VESTMENT IN SHARES OF NISHANT CONSTRUCTION PVT. LTD. THE A.O AT P ARA-4.1.4 TO PARA- 4.1.17 HAS EXPLAINED THE MODUS OPERANDI OF HOW THE APPELLANT ISSUED SHARES TO SMT. NILAM U. SHAH SHRI UPENDRA C. SHAH A ND NISHANT U. SHAH. IT HAS BEEN OBSERVED BY THE A.O THAT ALL TH E THREE INDIVIDUALS ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 9 - HAVE PASSED JOURNAL ENTRIES IN THEIR INDIVIDUAL BO OKS IN THE LEDGER ACCOUNT OF THE APPELLANT FOR MAKING SHARE APPLICAT ION MONEY. ALL THREE OF THEM HAVE DIVERTED FUNDS FROM THEIR LOAN ACCOUNT TO MAKE INVESTMENTS IN THE SHARE OF THE APPELLANT. THE A. O HAS MENTIONED AT PARA-4.1.6 HOW THE FUNDS CAME TO THESE THREE INDIVI DUALS FOR MAKING INVESTMENTS IN THE SHARES OF THE APPELLANT COMPANY. THE DETAILS OF FUNDS RECEIVED BY THESE THREE INDIVIDUALS ARE MENTIONED A T PARA-4.1.6 TO 4.1.14. IT CAN BE SEEN FROM THESE DETAILS THAT T HROUGH VARIOUS PERSONS THE MONEY WAS BEING INTRODUCED INTO THE ACCOUNTS OF THESE THREE INDIVIDUALS AND ROUTED FOR MAKING INVESTMENTS BY ME ANS OF SHARE APPLICATION MONEY OF THE APPELLANT COMPANY. 16000 0 SHARES OF THE APPELLANT COMPANY WERE THUS CONCENTRATED IN THE HAN DS OF NILAM U. SHAH AND FINALLY WITH THE HELP OF ENTRY OPERATOR NA MELY BHARAT M. SHAH THE MONEY WAS INTRODUCED THROUGH PURCHASE OF SHARES OF THE APPELLANT COMPANY AT A PREMIUM. THEREFORE, AS THE FUNDS OF RS . 4 CRORE IN CASH GIVEN BY SHRI UPENDRA SHAH TO SHRI BHARAT SHAH FINA LLY CAME BACK IN THE FORM OF SHARE APPLICATION MONEY TO THE APPELLAN T COMPANY, ALTHOUGH ANKUSH FINSTOCK PVT. LTD. (COMPANY OF SHRI BHARAT S HAH) HAD PURCHASED THE SHARES OF THE APPELLANT COMPANY FROM NILAM U. SHAH. DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS REITERATED THE SUBMISSION MADE BEFORE THE A.O. IT FURTHER SUBMITTE D THAT THE A.O HAS FAILED TO APPRECIATE THE SUPPORTING DOCUMENTARY EVI DENCE IN THE FORM OF SHARE APPLICATION, BOARD RESOLUTIONS, SHARE TRANSFE R FORMS, RESOLUTION SANCTIONING TRANSFER OF SHARES ETC. THUS, ACCORDING TO APPELLANT IT HAS DISCHARGED ITS DUTIES U/S.68 AND THE A.O HAS FAILED TO PROVE BEYOND DOUBT THAT MONEY BELONG TO THE APPELLANT. ACCORDING TO APPELLANT THE SHARE PURCHASE AND SALES WERE GENUINE TRANSACTIONS. ALL THE MONEY IT RECEIVED WAS THROUGH PROPER BANKING CHANNEL AND IT CANNOT BE SAID THAT RS. 4 CRORE THAT WERE INVESTED BY ANKUSH FINSTOCKPV T LTD. BELONG TO THE APPELLANT. 5.3 I HAVE GONE THROUGH THE SUBMISSIONS MADE BY TH E APPELLANT, THE STAND TAKEN BY THE A.O AS WELL AS THE CASE LAW RELI ED UPON BY THE APPELLANT. THE RECEIPT OF SHARE APPLICATION MONEY B Y THE APPELLANT THROUGH ANKUSH FINSTOCK PVT. LTD. CANNOT BE SAID TO BE A GENUINE TRANSACTION OF SHARE APPLICATION. IN THE INSTANT CA SE THERE WAS EVIDENCE AND MATERIAL AVAILABLE TO SHOW THAT THE SHAREHOLDER COMPANY I.E. ANKUSH FINSTOCK PVT. LTD. WAS ONLY A PAPER COMPANY AND YET IT HAD MADE SUBSTANTIAL AND HUGE INVESTMENTS IN THE FORM O F SHARE APPLICATION MONEY. THE PRIMARY REQUIREMENTS FOR SEC. NAMELY IDE NTIFICATION C CREDITORS/SHAREHOLDERS, CREDITWORTHINESS OF THE CRE DITORS/SHAREHOLDERS AM GENUINENESS OF THE TRANSACTIONS HAVE TO BE DECID ED NOT ONLY ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 10 - SUPERFICIAL BUT II DEPTH HAVING REGARD TO THE MATER IAL AVAILABLE ON RECORD. THE TRANSFER OF FUND: THROUGH BANKING CHANN ELS, SHARE REGISTRATION FORM, CERTIFICATE OF INCORPORATION PAN ARE RELEVANT AS FAR AS THE ISSUE OF IDENTITY GOES, BUT THESE DETAILS HA VE THEIR LIMITATION WHEN THERE IS PREDOMINANT EVIDENCE AND MATERIAL TO SHOW THAT THE SUBSCRIBER COMPANY WAS ONLY A PAPER COMPANY AND NOT A GENUINE INVESTOR. 5.4 HON'BLE SUPREME COURT IN THE CASE OF CIT VS DUR GAPRASAD MORE 82 ITF 540 HAS OBSERVED THAT 'IT IS TRUE THAT THE A PPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE RE ASONS TO BELIEVE THAT APPARENT IS NOT THE REAL.......... LITTLE PROBING WAS SUFFICIENT IN THE PRESENT CASE T O SHOW THAT THE APPARENT WAS NOT THE REAL. THE TAXING AUTHORITIES W ERE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PROD UCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIR CUMSTANCES TO FIND THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS .' HON'BLE SUPREME COURT IN THE CASE OF A. GOVINDARAJULU MUDALIYAR 34 ITR 807 HAS HELD THAT WHETHER RECEIPT IS TO BE TREATED AS INCOME OR NOT, MUST DEPEND VERY LARGELY ON THE FACTS AND CIRCUMSTANCES OF EACH CASE . IN THE INSTANT CASE THE STATEMENT OF ENTRY PROVIDERS I.E. BHARAT M. SHA H EXPLAINING THEIR MODUS OPERANDI TO HELP THE APPELLANT AS WELL AS SHR I UPENDRA C. SHAH, SMT. NILAM U. SHAH AND NISHANT U. SHAH TO CONVERT THEIR UNACCOUNTED MONEY INTO THE ACCOUNTED MONEY BY MEANS OF LAYERING AND LAUNDERING OFFERS SUFFICIENT MATERIAL ON THE BASIS OF WHICH TH E A.O CAN BE SAID TO HAVE BEEN FULFILLED ITS DUTY. THE STATEMENTS OF S HRI BHARAT M. SHAH, REFERS TO THE PRACTICE OF RECEIVING CASH AND ISSUAN CE OF CHEQUES IN A SYSTEMATIC MANNER FOR SUBSCRIPTION TO SHARE CAPITAL FOR A CONSIDERATION I.E. THE COMMISSION. THE INVESTIGATION WING HA S ALREADY RECORDED STATEMENT OF SUCH SHARE APPLICANT SUBSCRIBING THE S HARES OF THE APPELLANT. THIS CONSTITUTES MATERIALS UPON WHICH ON E COULD REASONABLY COME TO THE CONCLUSION THAT THE CASH BELONGED TO TH E APPELLANT COMPANY AND WAS INTRODUCED IN THE FORM OF SHARE CAPITAL BY MEANS OF PURCHASING THE SHARES OF THE APPELLANT FROM SMT. NILAM U. SHAH . HON'BLE HIGH COURT OF DELHI IN THE CASE OF NOVA PROMTERS AND FIN LEASE PVT. LTD. HAS HELD THAT 'WE ARE AFRAID THAT WE CANNOT APPLY THE R ATIO TO A CASE SUCH AS THE PRESENT ONE, (REFERS TO DISMISSAL OF SLP AGAINS T DIVINE LEASING CASE 299 ITR 268, DELHI) WHERE THE A.O IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHES THE PARTICULARS FURNISHED BY THE ASSESSES AND ALSO ESTABLISHES THE LINK BETWEEN SELFCONFESSED 'AC COMMODATION ENTRY PROVIDERS,' WHOSE BUSINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT THEIR UNACCOUNTED MONIES THROUGH THE MED IUM OF SHARE SUBSCRIPTION, AND THE ASSESSEE. THE RATIO IS INAPPL ICABLE TO A CASE, AGAIN ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 11 - SUCH AS THE PRESENT ONE, WHERE THE INVOLVEMENT OF T HE ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDICATED BY VALID MATERI AL MADE AVAILABLE TO THE ASSESSING OFFICER AS A RESULT OF INVESTIGATIONS CARRIED OUT BY THE REVENUE AUTHORITIES INTO THE ACTIVITIES OF SUCH 'EN TRY PROVIDERS'. THE EXISTENCE WITH THE ASSESSING OFFICER OF MATERIAL SH OWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE-MEDIT ATED PLAN - A SMOKESCREEN - CONCEIVED AND EXECUTED WITH THE CONNI VANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABIL ITY OF THE RATIO. IN OUR UNDERSTANDING, THE RATIO IS ATTRACTED TO A CASE WHERE IT IS A SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON HIM UNDER SEC. 68 TO PROVE AND ESTABLISH E IDE NTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GEN UINENESS OF THE TRANSACTION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVI DENCE OR MATERIAL IN HIS POSSESSION AND THEN COME FORWARD TO MERELY REJE CT THE SAME, WITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY IN TO THE MATERIAL PLACED BEFORE HIM. THE CASE BEFORE US DOES NOT FALL UNDER THIS CATEGORY AND IT WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY.' 5.5 IN THE INSTANT CASE, EVEN THOUGH THE FUNDS HA VE BEEN RECEIVED FROM ANKUSH FINSTOCK THROUGH BANKING CHANNELS BUT THEY D O NOT REFLECT THE ACTUAL GENUINE BUSINESS ACTIVITY OF ANKUSH FINSTOCK PVT. LTD. AS MENTIONED BY SHRI BHARAT SHAH M/S. ANKUSH FINSTOCK WAS ONLY A FRONT OR A PAPER COMPANY WHICH WOULD ENABLE HIM TO PROVID E ENTRIES TO VARIOUS BENEFICIARIES WHICH REFLECTS THAT THE SHARE SUBSCRIBER DID NOT HAVE ITS OWN PROFITMAKING APPARATUS AND WAS NOT INV OLVED IN ANY GENUINE BUSINESS ACTIVITY.THE FRONT COMPANY WAS MER ELY INVOLVED IN ROTATION OF MONEY WHICH WAS COMING THROUGH THE BANK ACCOUNTS BUT THIS DOES NOT REFLECT ITS CREDITWORTHINESS OR EVEN GENUI NENESS OF THE TRANSACTIONS. AS MENTIONED BY SHRI BHARAT M. SHAH, HE DID NOT HAVE POSSESSION OF THE SHARES ALLOTTED TO ANKUSH FINSTOC K AND HAD GIVEN THE BLANK SIGNED SHARE TRANSFER FORMS TO THE APPELLANT AND SHRI UPENDRA C. SHAH. IT WOULD BE WORTH MENTIONING THAT HON'BLE DEL HI HIGH COURT IN THE CASE OF N.R. PORTFOLIO PVT. LTD. 206 (2014) DLT 97 (DEL) HAS HELD THAT MERE PRODUCTION OF INCORPORATION DETAILS, PAN, THE FACT THAT 3 RD PERSON OR COMPANY HAD FILED INCOME TAX DETAILS IN C ASE OF A PRIVATE LIMITED COMPANY MAY NOT BE SUFFICIENT WHEN SURROUND ING AND ATTENDING FACTS PROTECT A COVER UP. THESE FACTS INDICATE AND REFLECT PROPER PAPER WORK OR DOCUMENTATION BUT GENUINENESS, CREDITWORT HINESS, IDENTITY ARE DEEPER AND OBTRUSIVE COMPANIES, NO DOU BT, ARE ARTIFICIAL OR JURISTIC PERSONS BUT THEY ARE SOULLESS AND DEPENDEN T UPON THE ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 12 - INDIVIDUALS BEHIND THEM WHO RUN AND MANAGE THE SAIL COMPANIES, IT IS THE PERSONS BEHIND THE COMPANY TO TAKE THE DECISION S, CONTROL AND MANAGE THEM.' ON 16/1/2015 HON'BLE SUPREME COURT HAS DISMISSED THE SLP IN THE CASE OF BY NAVODAYA CASTLE PVT. LTD. VS CIT 230 TAXMAN.COM 268. THE SLP WAS FILED BY NAVODAYA CASTL E PVT. LTD. AGAINST THE RULING OF HON'BLE HIGH COURT OF DELHI T HAT CERTIFICATE OF INCORPORATION, PAN ETC. ARE NOT SUFFICIENT FOR PURP OSE OF IDENTIFICATION OF SUBSCRIBER COMPANY WHEN THERE IS MATERIAL TO SHO W THAT SUBSCRIBER WAS A PAPER COMPANY AND NOT A GENUINE INVESTOR. HO N'BLE DELHI HIGH COURT IN THE CASE OF NAVODAYA CASTLE PVT. LTD. VS C IT IN ITA NO. 320/2012 VIDE THEIR ORDER DATED 25/8/2014 UPHELD TH E ADDITIONS MADE BY THE A.O U/S.68 OF THE ACT. HON'BLE DELHI HIGH CO URT HAS DELIBERATED IN DETAIL THE ISSUE OF ADDITIONS MADE U/S.68 OF THE ACT WITH REGARD TO SHARE APPLICATION MONEY. HON'BLE HIGH COURT HAS DEA LT WITH VARIOUS SUPREME COURT AS WELL AS HIGH COURT DECISIONS WITH REGARD TO ADDITIONS U/S.68 AND GIVEN THE DECISION IN FAVOUR OF REVENUE ESPECIALLY WHEN THE SHARE APPLICATION MONEY HAS BEEN INTRODUCED INTO A COMPANY BY MEANS OF ACCOMMODATION ENTRY. HON'BLE DELHI HIGH COURT HA S REFERRED TO JUDGMENTS SUCH AS CIT VS DURGA PRASAD MORE 82 ITR 5 40 (SC), CIT VS NOVA PROMOTERS AND FINLEASE P. LTD., 342 ITR 169 (D ELHI), CIT VS N R PORTFOLIO P. LTD. 206 DLT 97 (DEL.), CIT VS MAP ACA DEMY P. LTD. 206 DLT 277 (DEL.) ETC. RELYING ON THE JUDGMENT OF HON' BLE SUPREME COURT IN THE CASE OF NAVODAYA CASTLE PVT. LTD. 230 TAXMAN .COM 268 DATED 16/1/2015 BY WHICH IT HAS DISMISSED THE SLP FILED A GAINST THE RULING OF HON'BLE HIGH COURT OF DELHI, I AM OF THE CONSIDERED OPINION THAT IN THE INSTANT CASE ALSO THE APPELLANT HAS INTRODUCED SHAR E CAPITAL OF RS. 4 CRORE IN THE FORM OF SHARE APPLICATION MONEY THROUG H THE ENTRY PROVIDER I.E. M/S. ANKUSH FINSTOCK PVT. LTD. THE ENTRY PROVI DER HAS PURCHASED THE SHARES OF THE APPELLANT FROM MS. NILAM U. SHAH. BUT FINALLY, THE FUNDS HAVE COME BACK TO THE APPELLANT AFTER SYSTEMA TIC LAYERING OF FUNDS. THUS, I HEREBY CONFIRM THE ADDITION OF RS. 4 CRORE ON SUBSTANTIVE BASIS IN THE HANDS OF THE APPELLANT. THUS, GROUND N O.2, IS HEREBY DISMISSED. 9. THE LEARNED SENIOR COUNSEL APPEARING FOR THE ASS ESSEE SUBMITTED BEFORE US THAT THE AUTHORITIES BELOW HAD ERRED IN L AW AND ON FACTS IN MAKING HUGE ADDITION ON ACCOUNT OF ALLEGED BOGUS SH ARE PREMIUM IGNORING THIS PARTICULAR FACT THAT THERE WAS ABSOLU TELY NO SUPPORTING DOCUMENT AND COGENT EVIDENCE OF SUCH UNDISCLOSED IN COME OF THE ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 13 - APPELLANT. SUCH ADDITION HAS BEEN MADE ON AS ASSUMP TION BASIS AND ON THE BASIS OF THE STATEMENT OF THE DIRECTOR OF ANKUS H FINSTOCK LTD WHO WAS NOT BEEN ALLOWED TO BE CROSS-EXAMINED BY THE AS SESSEE IN SPITE OF REPEATED REQUEST MADE TO THAT EFFECT. APART FROM TH AT THE LEARNED SENIOR COUNSEL ALSO ARGUED ON THIS PARTICULAR POINT THAT T HOUGH THE ASSESSEE FURNISHED ALL THE DETAILS AND EXPLANATION WITH REGA RD TO SUCH SHARE TRANSACTION TO ANKUSH BY AND UNDER ITS LETTER DATED 11.12.2014 ALONG WITH ALL THE DOCUMENTARY EVIDENCES INCLUDING THE SHARE A PPLICATIONS, THE SAME HAVE BEEN TOTALLY IGNORED BY THE AUTHORITIES BELOW WHILE MAKING ADDITION WHICH IS NOTHING, BUT THE COLOURABLE EXERCISE OF PO WER, AS ALSO SUBMITTED BY THE LEARNED AR. IN THIS RESPECT HE HAS RELIED UP ON THE SAID LETTER DATED 11.12.2014 BEING EXHIBIT-A AS APPEARING AT PAGE 45 OF THE PAPER BOOK BEFORE US. MORE SO THE LEARNED SENIOR COUNSEL EXPLA INED AS REGARDS TRANSACTION OF SHARE TRANSFERRED BETWEEN THE SHAREH OLDERS AND ANKUSH FINSTOCK LTD. HAS NOT BEEN REBUTTED BY THE LEARNED ASSESSING OFFICER WHICH WAS OTHERWISE ESTABLISHED FROM THE RECORDS FU RNISHED TO HIM. 10. IT WAS FURTHER ARGUED THAT IT IS CLEAR FROM THE ANALYSIS OF THE TRANSACTION NOTED BY THE LEARNED AO IN PARAGRAPH 4 OF HIS ORDER THAT THE TRANSACTION OF SHARE PURCHASES WERE PERTAINING TO T HE YEAR 2008 AND WERE ALL GENUINE TRANSACTIONS BETWEEN THE VARIOUS PERSON S. MERELY BECAUSE THE SHARES EARLIER ALLOTTED THAT TOO WAS ACCEPTED AS GE NUINE TRANSACTIONS WERE TRANSFERRED BY THE SHAREHOLDERS DURING LATER YEARS, IT CANNOT BE PRESUMED THAT THE AMOUNT RECEIVED BY THOSE SHAREHOLDERS THRO UGH PROPER BANKING CHANNELS WAS TO BE ADDED IN THE HANDS OF THE APPELL ANT COMPANY WHICH HAS NO ROLE TO PLAY IN THOSE TRANSACTIONS. FINALLY, IT WAS THE ARGUMENT OF ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 14 - THE LD. SENIOR COUNSEL THAT THE ALLEGED MODUS OPERA NDI OF APPELLANT IN ROUTING THE ALLEGED UNACCOUNTED MONEY TO DIRECTORS BANK ACCOUNT AND ADVANCING LOAN TO COMPANY ARE ABSOLUTELY INCORRECT AND BASED ON NO COGENT MATERIAL AND / OR EVIDENCE ON RECORD EXCEPT ON SUSPICION, CONJECTURE AND SURMISES. THEREFORE, THE AUTHORITIES BELOW MISERABLY FAILED TO RELATE THE AMOUNT OF RS.4 CRORES AS THE R ECEIPT BY THE APPELLANT AS UNEXPLAINED OR UNACCOUNTED INCOME AND THUS, ADDI TION ON THAT BASIS IS LIABLE TO BE DELETED. 11. AT THE TIME OF HEARING OF THE INSTANT APPEAL TH E LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED BEFORE US THAT THE AP PELLANT COMPANY IS ONE OF SUCH ENTITIES WHICH INDULGED IN INTRODUCING ITS OWN UNACCOUNTED MONEY IN THE FORM OF SUBSCRIBED SHARES FROM THE PAP ER ENTITIES WHICH WAS SPECIFICALLY BROUGHT INTO EXISTENCE IN A SYSTEM ATIC MANNER. ACCORDING TO HIM THE DIRECTOR OF THE ANKUSH FINSTOC K LTD NAMELY SHRI BHARAT SHAH ADMITTED BEFORE THE REVENUE AUTHORITIES THAT HE WAS IN THE BUSINESS OF PROVIDING ENTRIES TO VARIOUS GROUPS/COM PANIES/PERSONS. SHRI SHAH FURTHER ADMITTED THAT HE RECEIVED CASH FROM TH E BENEFICIARY PARTY AND PROVIDED THE ENTRY TO THEM IN THE FORM OF SHARE CAPITAL/PREMIUM. THE MAIN CONTENTION OF THE LD DR IS THIS THAT THE RECEI PT OF SHARE APPLICATION MONEY BY THE APPELLANT THROUGH ANKUSH FINSTOCK LTD. CANNOT BE SAID TO BE A GENUINE TRANSACTION OF SHARE APPLICATION. THE EVIDENCES/MATERIALS AVAILABLE WITH THE AUTHORITIES BELOW CLEARLY SHOW T HAT THE SHAREHOLDER COMPANY I.E. ANKUSH FINSTOCK LTD WAS ONLY A PAPER C OMPANY AND YET IT HAD MADE SUBSTANTIAL AND HUGE INVESTMENTS IN THE FO RM OF SHARE APPLICATION MONEY. ACCORDING TO HIM THE PRIMARY REQ UIREMENTS FOR ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 15 - SECTION 68 NAMELY IDENTIFICATION OF CREDITORS/SHARE HOLDERS, CREDITWORTHINESS OF THE CREDITORS/SHAREHOLDERS AND GENUINENESS OF THE TRANSACTION HAVE TO BE DECIDED NOT ONLY SUPERFICIAL LY BUT IN-DEPTH HAVING REGARD TO THE MATERIALS AVAILABLE ON RECORD. HE FUR THER PROCLAIMS THAT TRANSFER OF FUNDS THROUGH BANKING CHANNELS, SHARE R EGISTRATION FORM, CERTIFICATE OF INCORPORATION, PAN BECOME IRRELEVANT SO FAR AS THE ISSUE OF IDENTITY IS CONCERNED WHEN THERE IS PRE-DOMINANT EV IDENCE AND MATERIAL TO SHOW THAT THE SUBSCRIBER COMPANY WAS ONLY A PAPE R COMPANY AND NOT A GENUINE INVESTOR. HE FURTHER RELIED UPON THE STATEM ENT MADE BY THE DIRECTOR OF THE ANKUSH FINSTOCK LTD THAT HE DID NOT HAVE POSSESSION OF THE SHARES ALLOTTED TO HIS COMPANY AND HAD GIVEN TH E BLANK SIGNED SHARES TRANSFER FORMS TO THE APPELLANT AND SHRI UPENDRA C. SHAH. ACCORDING TO THE LD DR THOUGH THE FUNDS HAVE BEEN RECEIVED BY TH E ASSESSEE FROM ANKUSH FINSTOCK LTD THROUGH BANKING CHANNELS, THEY DO NOT REFLECT THE ACTUAL, GENUINE BUSINESS ACTIVITY OF THE SAID COMPA NY; BEING A PAPER COMPANY THE ENTIRE TRANSACTION IS INGENUINE AND THU S HE RELIED UPON THE CONCLUSION MADE BY THE AUTHORITIES BELOW TO THIS EX TENT THAT THE APPELLANT HAS INTRODUCED THE SHARE CAPITAL OF RS. 4 CRORE IN THE FORM OF SHARE APPLICATION MONEY THROUGH THE ENTRY PROVIDER AND HE NCE ADDITION HAS BEEN RIGHTLY MADE. THE LEARNED DR RELIED UPON THE J UDGEMENT PASSED BY THE COORDINATE BENCH IN THE CASE OF AYAANA COMTRADE (P) LTD -VERSUS- INCOME TAX OFFICER, WARD-(1(1)(4), AHMEDABAD, REPOR TED IN (2019) 104 TAXMAN.COM 66 WHEREBY AND WHEREUNDER THE ADDITION I N RESPECT OF UNEXPLAINED SHARE APPLICATION MONEY MADE BY THE LD AO UNDER SECTION 68 OF THE ACT HAS BEEN CONFIRMED. ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 16 - 12. HEARD THE PARTIES, PERUSED THE RELEVANT MATERIA L AVAILABLE ON RECORDS. WE HAVE FURTHER CAREFULLY CONSIDERED THE O RDER PASSED BY BOTH THE AUTHORITIES BELOW. WE HAVE ALREADY DISCUSSED TH E FACT NARRATED BY THE LD AO, CONFIRMED BY THE FIRST APPELLATE AUTHORITY A ND THE CASE MADE OUT BY THE ASSESSEE BEFORE AUTHORITIES BELOW AND BE FORE US AS WELL. WE WOULD LIKE TO FORMULATE THE POINT IN A VERY SHOR T CAMPUS AS TO WHETHER THE ADDITION MADE BY THE AUTHORITIES BELOW HAS BEEN DONE IN DUE PROCESS OF LAW IN THE PRESENT FACT AND CIRCUMSTANCE OF THE CASE. WHILE ANSWERING THE ISSUE WOULD LIKE TO POINT OUT T HE BASIC LACUNA REFLECTING FROM THE ORDERS IMPUGNED BEFORE US. IT I S EVIDENT ON RECORD THAT THE AUTHORITIES BELOW PRIMARILY ON THE BASIS OF THE STATEMENT GIVEN BY THE DIRECTOR OF ANKUSH FINSTOCK LTD NAMELY BHARAT SHAH, WHO ADMITTEDLY NOT BEEN ALLOWED TO BE CROSS-EXAMINED BY THE ASSESSEE D ESPITE REPEATED REQUEST MADE TO THAT EFFECT INCLUDING THE REPRESENT ATION TO THAT EFFECT DATED 11.12.2014 AVAILABLE AT PAGE 55 OF THE PAPER BOOK BEFORE US WHICH CERTAINLY QUESTIONS THE ADMISSIBILITY OF THE ADDITI ON MADE BY THE AUTHORITIES BELOW. IT IS A SETTLED PRINCIPLE OF LAW THAT RELYING UPON THE DEPOSITION MADE BY A PERSON AGAINST THE ASSESSEE, A DDITION CANNOT BE MADE WITHOUT ALLOWING THE ASSESSEE TO CROSS EXAMINE SUCH STATEMENT RECORDED BY THE AUTHORITIES UNDER SECTION UNDER SEC TION 132(4)/131/133A OF THE INCOME TAX ACT, 1961. THUS, THE SAME HAS NO EVIDENTIARY VALUE. APART FROM THAT THE ASSESSEE TIME AND AGAIN FURNIS HED THE RELEVANT DOCUMENTS BEFORE THE AUTHORITIES BELOW IN THE FORM OF THE SHARE APPLICATIONS OF UPENDRA C SHAH, NILAM U SHAH AND N ISHANT SHAH DATED ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 17 - 15.12.2008, THE BOARD RESOLUTION OF THE ASSESSEE CO MPANY DATED 10.02.2009 FOR DETERMINATION OF SHARE PRICE, STATEM ENT SHOWING DETAILS OF PAYMENT MADE BY ANKUSH FINSTOCK LTD AND SHARE TRANS FER FORM ALONG WITH NECESSARY APPLICATION FOR SUCH TRANSFER, THE R ESOLUTION DATED 10.07.2009 PASSED BY THE BOARD OF DIRECTORS OF THE SAID ANKUSH FINSTOCK LTD IN ORDER TO SHOW THAT THE SAID ANKUSH FINSTOCK LTD HAS NOT MADE ANY DIRECT INVESTMENT IN THE SHARES OF THE ASSESSEE COM PANY BUT HAS PURCHASED SHARES WORTH RS. 4 CRORES FROM MRS NILAM U SHAH. HOWEVER, WITH UTTER SURPRISE WE FIND THOUGH THOSE WERE PLACE D BEFORE THE AUTHORITIES BELOW THE SAME WERE NOT TAKEN INTO CONS IDERATION EITHER BY THE LD AO OR BY THE FIRST APPELLATE AUTHORITY FOR THE R EASON BEST KNOWN TO THEM. THUS, THE AUTHORITY HASADMITTEDLY ACTED IN A CLOSED AND BIASED MIND ONLY ON THE BASIS OF THE STATEMENT OF BHARAT C SHAH RECORDED ON OATH UNDER SECTION 133OF THE ACT AND ADDITION MADE THEREON. THE DEFENSE OF THE ASSESSEE HAS NOT BEEN TAKEN INTO CONSIDERATI ON IN ITS PROPER PERSPECTIVE EITHER BY WAY OF EXAMINING THE DOCUMENT PLACED BEFORE IT AS MADE KNOWN TO THE AUTHORITIES BY AND UNDER THE REPR ESENTATION DATED 11.12.2014 OR BY AFFORDING OPPORTUNITY TO CROSS EXA MINE THE SAID BHARAT C SHAH. IT IS A SETTLED PRINCIPLE OF LAW THAT ASSES SMENT ORDER IN WHICH ADDITION IS MADE ON THE BASIS OF ANY SUCH STATEMENT IS A 'NULLITY' AS ALSO HELD BY APEX COURT IN THE CASE OF ANDAMAN TIMBER MA RT V. COMMISSIONER OF CENTRAL EXCISE, KOLKATA [2015]62 TA XMANN.COM 3 (C) WHERE THE APEX COURT HAS OBSERVED THAT : ' ACCORDING TO US, NOT ALLOWING THE ASSESSES TO CRO SS EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 18 - PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED.' THE ADDITION IS THEREFORE, HOWSOEVER BIGGER, ADMIT TEDLY MADE ON SURMISES AND CONJECTURES ON THE BASIS OF STATEMENT MADE BY BHARAT SHAH WHICH HAS NO EVIDENTIARY VALUE WITHOUT ANY SUPPORTI NG COGENT AND / OR VALID DOCUMENT, WHATSOEVER. THE ASSESSEE TIME AND AGAIN DISCHARGED ITS DUTY TO PROVE THE NATURE AND SOURCE OF THE AMOUNT CREDITED IN HIS BOOKS OF A CCOUNTS BY PLACING THOSE DOCUMENTS THEREBY SHIFTED THE ONUS UPON THE D EPARTMENT TO BRING ON RECORD RELEVANT MATERIALS TO SHOW THAT WHY IN SP ITE OF THOSE DOCUMENTS BEING SUBMITTED BY THE ASSESSEE THE ADDITION IS STI LL TO BE MADE IN THE HANDS OF THE ASSESSEE. IT IS, THEREFORE, EVIDENT ON RECORD THAT THE AUTHORITIES HAVE NOT DISCHARGED THEIR DUTIES EITHER BY SCANNING THOSE DOCUMENTS RELIED UPON BY THE ASSESSEE IN SUPPORT OF HIS CASE TO PROVE THE CREDITWORTHINESS OF THE PERSON CONCERNED AND THE GE NUINENESS OF THE TRANSACTION OR TO BRING ANY COGENT DOCUMENT WHICH C OULD JUSTIFY THE CASE AGAINST THE ASSESSEE TO MAKE ADDITION; INACTION APP ARENT ON THEIR PART CANNOT BE ALLOWED BY A COURT OF LAW IN THE PRESENT FACT AND CIRCUMSTANCES OF THE CASE. WITH UTTER SURPRISE WE FIND THAT THE L EARNED CITA HAS OBSERVED THAT WHEN THEY HAVE COME TO A CONCLUSION T HAT THE ANKUSH FINSTOCK LTD IS NOT A GENUINE COMPANY BUT AN ENTRY PROVIDER OR A PAPER COMPANY, INSPITE OF FULFILLING THE CONDITION PRESCR IBED UNDER THE LAW TOWARDS THE CREDITWORTHINESS OF THAT PERSON OR THE GENUINENESS OF THE TRANSACTION BY THE ASSESSEE. IN THIS REGARD WE FIN D THAT THE REVENUE RELIED UPON THE JUDGMENT PASSED BY THE HONBLE APEX COURT IN THE MATTER OF ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 19 - NAVODAYA CASTLES PVT. LTD.-VS-CIT REPORTED IN 230 T AXMAN.COM 268. WE HAVE CAREFULLY CONSIDERED THE SAID JUDGMENT PASSED BY THE HONBLE APEX COURT THE FACT WHEREOF IS ENTIRELY DIFFERENT FROM T HAT OF THE FACT AVAILABLE BEFORE US IN THE CASE IN HAND. IN THAT PARTICULAR C ASE, THE ASSESSEE WAS UNABLE TO PRODUCE DIRECTORS OR PRINCIPLE OFFICERS O F THE SIXTH SHARE HOLDER COMPANIES PLEADING THAT THEY WERE NOT SHAREHOLDERS NOW AND SEVEN YEARS HAD PASSED SINCE THE TRANSACTIONS TOOK PLACE. WE DO NOT HESITATE TO CONCLUDE THAT SUCH AN ATTEMPT BY THE AUTHORITIES BE LOW IN RELYING UPON A JUDGMENT PASSED BY THE HONBLE APEX COURT ON A DIFF ERENT SET OF FACTS IS NOTHING BUT MISLEADING IN ORDER TO MAKE ADDITION AG AINST THE ASSESSEE BY HOOK OR CROOK BY THE REVENUE.IN THIS REGARD WE FURT HER WOULD LIKE TO RELY UPON THE ORDER PASSED BY THE HONBLEJURISDICTIONAL HIGH COURT IN THE MATTER OF PCIT-VS-CHARTERED SPEED PRIVATE LTD IN TA X APPEAL NO. 126 OF 2015 AND TAX APPEAL NO. 127 OF 2015. WHILE DEALING WITH THIS PARTICULAR ASPECT OF THE MATTER THE HONBLE HIGH COURT OBSERVE D AS FOLLOWS: IN THE APPEAL BEFORE THE COMMISSIONER (APPEALS), T HE ORDER OF THE AO WAS CONFIRMED. IN THE FURTHER APPEAL BEFORE THE TRIBUNAL, AT PARAS 17 AND 18, IT WAS OBSERVED THUS '17. WE FIND THAT IN THE INSTANT CASE, THE ADDITION IS MADE U/S. 68 OF THE ACT ON THE GROUND OF UNEXPLAINED CASH CREDIT. A S PER THE PROVISIONS OF SECTION 68, THE INITIAL ONUS LIES UPO N THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF AMOUNT CREDITED IN H IS BOOKS OF ACCOUNT. WE FIND THAT THIS INITIAL ONUS WAS DISCHAR GED IN THE INSTANT CASE BY THE ASSESSEE BY FURNISHING DOCUMENTS LIKE M OA, AOA, SHARE APPLICATION & BOARD RESOLUTION, CERTIFICATE OF INCO RPORATION, CERTIFICATE OF COMMENCEMENT, ACKNOWLEDGEMENTS OF IT RS, AUDITED ACCOUNTS ETC. OF CONCERNED COMPANIES. THEREAFTER, I N OUR VIEW, THE ONUS SHIFTED UPON THE DEPARTMENT AND IT WAS FOR THE DEPARTMENT TO BRING ON RECORD RELEVANT MATERIAL TO SHOW THAT WHY INSPITE OF THE ABOVE STATED DOCUMENTS, THE ADDITION IS STILL TO BE MADE IN THE HANDS OF THE ASSESSEE. IN THE INSTANT CASE, THE DEPARTMEN T HAS ENDEAVOURED ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 20 - TO DISCHARGE ITS BURDEN ON THE BASIS OF STATEMENTS RECORDED BY IT OF THE PERSONS MENTIONED ABOVE. 18. WE FIND THAT THE ASSESSEE REQUESTED FOR CROSS- OBJECTION OF THE MAKER OF THE STATEMENT. FURTHER, WE FIND THAT ASSES SING OFFICER ALSO MADE AN ATTEMPT RE ALLOW THE ASSESSEE OPPORTUNITY TO CRO SS-EXAMINE THE MAKERS OF THE STATEMENT BY ISSUING SUMMONS TO THEM. HOWEVE R, THE CROSS- EXAMINATION COULD NOT TAKE PLACE BECAUSE OF FAILURE ON THE PART OF THE MAKERS OF THE STATEMENTS TO APPEAR ON THE APPOINTED DATE. BUT STRANGELY, THEREAFTER, THE ASSESSING OFFICER DID NOT TAKE ANY STEP TO ALLOW EFFECTIVE OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE MA KERS OF THE STATEMENTS. THE ASSESSING DID NOT PURSUE THE MATTER FURTHER. TH US, WE FIND THAT THE ASSESSEE WAS NOT ALLOWED ANY REAL OPPORTUNITY TO CR OSS-EXAMINE THE PERSONS WHOMADE THE STATEMENT AT THE BACK OF THE AS SESSEE. IN OUR CONSIDERED VIEW, IN THE CIRCUMSTANCES, THE STATEMEN T OF THOSE PERSONS CANNOT BE READ AGAINST THE ASSESSEE. OUR ABOVE VIEW FINDS SUPPORT FROM THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF (I) HEIRS AND LEGAL REPRESENTATIVES OF LATE LAXMAN BHAI S. PATEL VS. COMMISSIONER OF INCOME TAX (SUPRA) (II) CIT VS. INDRAJIT SINGH SURI (SUPRA) (III) DCIT VS. MAHENDRA AMBALAL PATEL (IV) CIT VS. KANTIBHAIREVIDAS PATEL (SUPRA) IN VIE W OF THE ABOVE SETTLED POSITION OF LAW, WE FIND FORCE IN THE ARGUM ENT OF THE ASSESSEE THAT THE STATEMENTS OF THE PERSONS MENTIONED ABOVE ARE N OT ADMISSIBLE EVIDENCE AGAINST THE ASSESSEE. IN ABSENCE OF THESE STATEMENT S, WE FIND THAT NO OTHER MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT WHY STILL THE AMOUNT IN QUESTION SHOULD BE TREATED AS INCOME OF THE ASSESSEE WHEN THE ASSESSEE FURNISHED ALL THE DOCUMENTS WHICH WERE AVAILABLE WITH IT TO DISCHARGE THE ONUS WHICH WAS UPON IT U/S. 68 OF THE ACT. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, THE ADDITION WAS MADE SOLELY BASED ON THE INADMISSIBLE AND UNRELIABLE MATERIAL AND THE REFORE ADDITION SO MADE CANNOT BE SUSTAINED. WE, THEREFORE, DELETE THE ADDI TION OF RS.2,00,00,000/- MADE IN THE CASE OF M/S CHARTED MOTORS PVT. LTD. AS WELL AS ADDITION OF RS.70,00,000/- MADE IN THE CASE OF M/S. CHARTERED S PEED PRIVATE LIMITED.' UNDER THE CIRCUMSTANCES, THE PRESENT TAX APPEALS BE FORE THIS COURT. ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 21 - 4. MR.BHATT, LEARNED COUNSEL APPEARING FOR THE REVE NUE CONTENDED THAT THREE ASPECTS WERE REQUIRED TO BE PROVED. ONE WAS T HE IDENTITY OF THE PERSON CONCERNED FROM WHOM THE SOURCE OF MONEY IS D ISCLOSED. THE ANOTHER WAS THE CREDITWORTHINESS OF THE PERSON CONC ERNED AND THE THIRD WAS THE GENUINENESS OF THE TRANSACTION. HE SUBMITTED TH AT IN THE PRESENT CASE, THE TRIBUNAL HAS COMMITTED ERROR IN NOT CONSIDERING THAT THE CREDITWORTHINESS AS WELL AS GENUINENESS OF THE TRAN SACTION WERE NOT PROVED AND THEREFORE, IRRESPECTIVE OF THE FACT THAT THE PE RSONS WHO HAD GIVEN STATEMENTS WERE NOT MADE AVAILABLE FOR CROSS-EXAMIN ATION, THE TRIBUNAL HAS COMMITTED ERROR IN ACCEPTING THE EXPLANATION AS SUFFICIENT AND THEREBY DELETING THE AMOUNT AS INCOME OF THE ASSESSEE CONCE RNED. HE ALSO RELIED UPON THE DECISION OF THIS COURT IN THE CASE OF UMES H KRISHNANI VS. ITO IN TAX APPEAL NO.800/12 DECIDED ON 15.12.2013 AND HE C ONTENDED THAT AS THE PRELIMINARY BURDEN WAS NOT DISCHARGED BY THE ASSESS EE, THE TRIBUNAL HAS NOT CONSIDERED THE SAID ASPECT AND HENCE, THE MATTE R DESERVES CONSIDERATION ON THE QUESTION RAISED. 5. AS RECORDED BY THE TRIBUNAL, THE TRIBUNAL FOUND THAT THE INITIAL BURDEN WAS DISCHARGED BY THE ASSESSEE. IN OUR VIEW, ONCE THE TRIBUNAL UPON THE APPRECIATION OF THE MATERIAL FOUND AND RECORDE D THE FINDING OF THE FACT THAT THE ASSESSEE HAD DISCHARGED INITIAL BUR DEN, SUCH A FINDING OF FACT WOULD BE OUTSIDE THE JUDICIAL SCRUTINY IN THE APPEA L BEFORE THIS COURT UNLESS THE FINDING OF FACT IS PERVERSE TO THE RECORD. IT I S AN UNDISPUTED POSITION THAT THE STATEMENT OF THE PERSONS CONCERNED WHICH WERE R ECORDED BY THE DEPARTMENT, THOSE PERSONS WERE NOT MADE AVAILABLE F OR CROSS-EXAMINATION, MAY BE FOR ONE REASON OR ANOTHER INSPITE OF THE ATT EMPTS MADE BY THE DEPARTMENT. THEREFORE THE TRIBUNAL HAS RIGHTLY FO UND THAT THE STATEMENT OF THOSE PERSONS CANNOT BE READ AGAINST THE ASSESSEE. 6. THE ATTEMPT MADE TO CONTEND THAT THE BURDEN IS UPON THE ASSESSEE TO PROVE THE IDENTITY OF THE PERSON, CREDITWORTHINESS OF THE PERSON AND THE GENUINENESS OF THE TRANSACTION ARE TO BE EXAMINED I N CONTEXT TO THE EXISTENCE OF THE PERSON CONCERNED, THE FACTUM OF AC TUAL MONEY IN POSSESSION OF THE PERSON AND HAVING PAID TO THE ASS ESSEE AND THE MODE OF PAYMENT. THEREAFTER, IF THE PERSON CONCERNED IS IN EXISTENCE AND HAS ACTUALLY PAID THE AMOUNT FROM HIS ACCOUNT BY CHEQUE , IT CAN BE SAID THAT THE INITIAL BURDEN IS DISCHARGED SO FAR AS EXPLANATION TO BE CONSIDERED UNDER SECTION 68 OF THE ACT. THEREAFTER, THE BURDEN WOULD BE UPON THE REVENUE TO SHOW THAT EITHER THE PERSON WAS BOGUS OR THERE WAS NO FINANCIAL CAPACITY TO MAKE THE PAYMENT AND THE ARRANGEMENT OF MONEY WAS A RTIFICIAL OR THAT THE MONEY HAS NOT PASSED OVER AND IT WAS ONLY BY WAY OF AN EYE WASH. SUCH COULD BE PROVED BY THE REVENUE IN THE PRESENT CASE THROUGH THE STATEMENT ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 22 - OF THOSE PERSONS, BUT UNFORTUNATELY, THEY WERE NOT MADE AVAILABLE FOR CROSS- EXAMINATION ANDTHEREFORE, THE STATEMENTS COULD BE U SED AS AN EVIDENCE AGAINST THE ASSESSEE. NO OTHEREVIDENCE WAS AVAILAB LE WITH THE REVENUE. 7. UNDER THESE CIRCUMSTANCES, IF THE TRIBUNAL HASF OUND THAT THE EXPLANATION UNDER SECTION 68 OF THE ACT WAS ACCEPTA BLE IN ABSENCE OF NON- DISCHARGE OF THE BURDEN UPON THE REVENUE, SUCH A FI NDING OF FACT WOULD NOT CALL FOR INTERFERENCE WHEN THE APPEAL BEFORE THIS C OURT IS LIMITED TO THE SUBSTANTIAL QUESTIONS OF LAW. THE DECISION UPON WHI CH THE RELIANCE HAS BEEN PLACED BY MR.BHATT IN TAX APPEAL NO.800/12 (SUPRA) IS OF NO HELP TO THE REVENUE BECAUSE THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE CANNOT BE EQUATED WITH THE FACTS OF THE SAID CASECONSIDERED B Y THIS COURT. IT IS HARDLY REQUIRED TO BE STATED THAT WHETHER THE EXPLANATION IS SUFFICIENT OR NOT WOULD ESSENTIALLY DEPEND UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE. BUT THE PRINCIPLE REMAINS THAT ONCE THE INITIAL BURDEN IS D ISCHARGED BY THE ASSESSEE, IT WOULD BE FOR THE REVENUE TO SHOW THAT THE TRANSA CTION WAS BOGUS LEADING TO CONCLUSION FOR DISCARDING OF THE EXPLANATION. IN THE PRESENT CASE, AS OBSERVED BY US HEREINABOVE, THE BURDEN WAS NOT DISC HARGED AND THEREFORE THE TRIBUNAL HAS HELD IN FAVOUR OF THE ASSESSEE. WE DO NOT FIND THAT ANY SUBSTANTIAL QUESTION OF LAW WOULD ARISE FOR CONSIDE RATION IN THE PRESENT APPEALS, AS CANVASSED. 8. HENCE, THE APPEALS ARE MERITLESS AND THEREFORE, DISMISSED. THUS, IT APPEARS THAT IN THAT CASE THE ASSESSEE HAS TO PROVE THE NATURE AND SOURCE OF THE AMOUNT CREDITED IN HIS BOOKS OF A CCOUNTS. IT APPEARS FROM THE AFORESAID JUDGEMENT THAT WHEN T HE ASSESSEE HAS ADMITTEDLY DISCHARGED ITS INITIAL BURDEN IT WOULD B E FOR THE REVENUE TO SHOW THAT THE TRANSACTION WAS BOGUS LEADING TO CONC LUSION FOR DISCHARGING OF THE EXPLANATION.SINCE THE SAME WAS N OT DISCHARGED BY THE AUTHORITIES BELOW THE ADDITION MADE ON THAT PREMISE HAS BEEN DELETED BY THE LEARNED TRIBUNAL. IN THE INSTANT CASE BEFORE US WE FIND THAT TIME AND AGAIN THE ASSESSEE PLACED THE DOCUMENTS AS DISCUSSE D ABOVE IN ORDER TO DEFEND HIS CASE TO SHOW THE GENUINENESS OF THE TRAN SACTION BUT THE SAME ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 23 - WERE NOT CONSIDERED BY THE AUTHORITIES BELOW. NEITH ER THE ASSESSEE WAS ALLOWED TO CROSS EXAMINE THE DEPONENT NAMELY BHARAT C SHAH DESPITE REPEATED REQUEST MADE BY THE ASSESSEE. NEITHER ANY EVIDENCE IS FORTHCOMING FROM THE REVENUE TO PROVE THE TRANSACTI ON IS BOGUS BEYOND DOUBT. NEEDLESS TO MENTION THAT THE RATIO LAID DOWN BY THE HONBLE HIGH COURT IS APPLICABLE TO THE INSTANT CASE. 13. WE HAVE CAREFULLY GONE THROUGH THE WRITTEN NOTE S OF SUBMISSIONS FILED BY THE LD. CIT, DEPARTMENTAL REPRESENTATIVE, AS WELL AS THE REJOINDER FILED BY THE ASSESSEE. WE PLACE IT AT THE COST OF REPETITION, THAT WHEN THERE WAS EVIDENCE IN THE FORM OF SHARE APPLIC ATION FORMS, COPY OF BANK STATEMENTS OF THE SHARE SUBSCRIBERS FROM WHERE SUCH SHARE APPLICATION AMOUNT WAS PAID, THE CERTIFICATION OF I NCORPORATION WITH THE COPY OF MEMORANDUM/RESOLUTION OF THE COMPANY PRODUC ED BY THE ASSESSEE TO PROVE THE IDENTITY OF THE SHAREHOLDERS, GENUINENESS OF TRANSACTIONS, NO ROOM WAS LEFT FOR DOUBT AND SUSPIC ION UNLESS OTHERWISE IS PROVED BY THE REVENUE WITH COGENT DOCUMENT THEREOF. ON CAREFUL READING OF THE WRITTEN NOTES OF SUBMISSIONS FILED BY THE LE ARNED CIT DR WE FIND THAT REVENUE HAS PRAYED FOR SETTING ASIDE THE ISSU E WITH THE DIRECTIONS FOR AFFORDING OPPORTUNITY OF CROSS EXAMINATION AT THIS STAGE SINCE REPEATED REQUEST WAS NOT MADE BY THE ASSESSEE BEFORE THE AUT HORITIES BELOW WHICH IS NOT CORRECT AS IT APPEARS FROM PAGE 55 OF THE PA PER BOOK BEING PART OF THE REPRESENTATION MADE TO THE LEARNED DCIT,CIRCLE- 3(1)(1) AS WELL AS THE SUBMISSION MADE BY THE ASSESSEE BEFORE THE FIRS TAPPELLATE AUTHORITY APPEARING AT PAGE 14, PARAGRAPH 5 OF THE ORDER PASS ED BY THE LEARNED CIT(A) AS IMPUGNED BEFORE US. THOSE CLEARLY SHOW TH AT THIS PARTICULAR ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 24 - ASPECT WAS FURTHER POINTED OUT TO THE CIT(A). THUS, IN THE EVENT WE ACCEDE TO SUCH PRAYER MADE BY THE REVENUE, AT THIS STAGE, IT WILL BE NOTHING BUT ADDING PREMIUM TO THE INACTION/OVERACTI ON MADE BY THE AUTHORITIES BELOW PARTICULARLY WHEN WE DO NOT FIND ANY SUCH RECEIPT OF THE APPELLANT DURING THE YEAR UNDER CONSIDERATION A S ADDED UNDER SECTION 68 OF THE ACT, NEITHER WE ENCOURAGE MULTIPLE INNING S TO REVENUE AUTHORITIES AS THE RATIO LAID DOWN IN THE JUDGEMENT PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF RAJESH BAB UBHAI DAMANIA-VS- CIT, REPORTED IN 122 TAXMAN 614(GUJ) WHICH WAS SUBS EQUENTLY FOLLOWED BY THE HONBLE ITAT BENCH, AT DELHI IN THE CASE OF COIM INDIA PRIVATE LTD VERSUS ACIT REPORTED IN 96 TAXMAN.COM 511. IT IS RELEVANT TO MENTION THAT THE JUDGEMENT RELIED UPON BY THE LD. DR HAS NO MANNER OF APPLICATION TO THE INSTANT CASE SINCE THE BASIC FACT IS COMPLETELY DIFFERENT FROM THAT OF THE JUDGEMENT REL IED UPON BEFORE US.PARTICULARLY IN THE SAID JUDGMENT THE ASSESSEE F AILED TO PRODUCE A SHAREAPPLICATIONS BEFORE THE ASSESSING OFFICER WHIC H IS ADMITTEDLY DIFFERENT FROM THE CASE BEFORE US. THUS, THE ENTIRE ACTION OF THE AUTHORITIES BELOW SPEAKS TOTAL NON-APPLICATION OF MIND, LACK OF INQUIRY AND COLOURABLE EXERCISE OF POWER, EXCESSIVE HIGHHANDEDN ESS AS ALSO CLOSE MINDEDNESS RESULTING INTO ADDITION MERELY ON THE BA SIS OF THE STATEMENT MADE BY THE DIRECTOR OF ANKUSH FINSTOCK LTD WHICH W AS NEITHER ALLOWED TO BE CROSS EXAMINED; SUCH ADDITION, THEREFOREIS 'NULLITY' , TOTALLY UNJUST, UNFAIR AND WITHOUT DUE PROCESS OF LAW HAVING NO LEG AL BASIS AND THUS LIABLE TO BE DELETED. HENCE WITH THE ABOVE OBSERVAT IONS WE DELETE THE ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 25 - IMPUGNED ADDITION TO THE TUNE OF RS.4 CRORES MADE O N THE GROUND OF BOGUS PREMIUM. THIS GROUND OF APPEAL, IS THUS, ALLO WED IN FAVOUR OF THE ASSESSEE. GROUND NO. 3: ADDITION OF RS.18,05,87,658/- TOWARDS ALLEGED UNACCOUNTED INVESTMENT IN PURCHASE OF LAND OF THE P ROJECT RATNAKAR -IV OF THE ASSESSEE COMPANY. 14. IT FURTHER REVEALED FROM THE SURVEY ENQUIRY THA T THE ASSESSEE HAD PURCHASED LAND FROM THREE INDIVIDUALS FOR THE CONST RUCTION OF ITS RESIDENTIAL PROJECT AS RATNAKAR IV. THE CASE OF T HE REVENUE IS THIS THAT APART FROM PAYMENT OF RS. 5,25,00,000/- THROUGH CHE QUE, BEING THE AMOUNT AS REFLECTED IN THE DEED OF SALE, AN AMOUNT OF RS.18,05,87,658/- WAS PAID BY THE ASSESSEE BY CASH SINCE THE ACTUAL T OTAL VALUE WAS RS. 23,30,87,658/- AS REFLECTED ON THE NOTING ON THE LO OSE PAPER INVENTORIESED AT PAGE NO. 160 OF ANNEXURE A-2 IMPOUNDED FROM TH E EMPLOYEE OF THE ASSESSEE COMPANY NAMELY SHRI VIRENDRA N THAKKAR AT PREMISES NO. 801, 802, REGENCY PLAZA, SATELLITE ROAD, AHMEDABAD, WHO DEALS WITH MATTERS RELATING TO PURCHASE OF LAND AS ALLEGED. THE SAID C ASH COMPONENT IS UNACCOUNTED INVESTMENT OF THE ASSESSEE AS OBSERVED BY THE LEARNED ASSESSING OFFICER AND THE SAID SUM OF RS.18,05,87,6 58/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE WHICH WAS, IN TURN, CO NFIRMED BY THE LD CIT(A). HENCE, THE INSTANT APPEAL. ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 26 - 15. HEARD THE RESPECTIVE PARTIES, PERUSED THE RECOR DS. WE FIND FROM THE ASSESSMENT ORDER THAT THE DIRECTOR OF THE ASSESSEE COMPANY NAMELY SHRI UPENDRA C SHAH BY AND UNDER HIS STATEMENT DATED 20. 05.2011 HAD ACCEPTED THE DISCREPANCIES IN HIS BOOKS OF ACCOUNTS AND MADE A DISCLOSURE OF RS.15 CRORE ON BEHALF OF THE GROUP. U LTIMATELY, THE LEARNED AO ADDED RS.18,05,87,658/- WHICH HAS BEEN ALLEGED T O HAVE BEEN PAID BY CASH BY THE ASSESSEE IN REGARD TO PURCHASE OF TH E SAID LAND IN QUESTION.IT IS RELEVANT TO MENTION THAT THE ASSESSE E SUBSEQUENTLY RETRACTED FROM HIS STATEMENT BY FILING AN AFFIDAVIT ON 25.05 2011 WHICH WAS MADE KNOWN TO THE AUTHORITIES BEING THE ASSISTANT DIRECT OR OF INCOME TAX, AYKAR BHAWANA, AHMEDABAD, BY AND UNDER AN INTIMATIO N DATED 20.06.2011 AS IT APPEARS AT PAGE 118 OF THE PAPER BOOK BEFORE US. ADMITTEDLY THE AUTHORITIES BELOW WHILE COMING TO TH E CONCLUSION THAT THE ASSESSEE HAD PAID RS.18,05,87,658/- BY CASH RELIED UPON THAT PARTICULAR DOCUMENT WHICH HAS BEEN NARRATED BY THE LEARNED ASS ESSING OFFICER IN THE FOLLOWING MANNER: 4.2.1. DURING THE COURSE OF SURVEY PROCEEDINGS AT THE PREMISES OF NISHANT CONSTRUCTION PVT. LTD. AT 801-802, REGEN CY PLAZA, SATELLITE ROAD, AHMEDABAD A LOOSE PAPER INVENTORIED AS PAGE N O.160 OF ANNEXURE A-2 WAS FOUND AND IMPOUNDED. THERE ARE CERTAIN ROUGH NOTINGS ON THIS PAGE. A FIGURE (RS.23,3 0,87,658/-)IS WRITTEN AT THE TOP OF THIS PAGE WITH REMARKS 'TOTAL'. BELOW TH AT, IN THE SECOND LINE A FIGURE OF RS.14,26,00,000/- IS WRITTEN WITH REMARKS 'CASH PAID'. A FIGURE OF RS.9,04,87,658/- IS WRITTEN AS THE BALANCE FIGUR E IN THE THIRD LINE. A FIGUREOF RS.5,25,00,000/- IS WRITTEN AT THE FOUR LI NE. FURTHER, A FIGURE OF RS.3,79,87,658/ IS WRITTEN AT THE FIFTH LINE WITH R EMARKS 'CASH'. TO UNDERSTAND AND INTERPRET THIS PAPER PROPERLY IT IS NECESSARY, TO HAVE A LOOK AT PAGES 112 TO 128 OFANNEXURE A-IMPOUNDED FRO M THE PREMISES OF NISHANT CONSTRUCTION PVT. LTD. AT 801-802 REGENCY P LAZA, SATELLITE ROAD, AHMEDABAD. PAGE NO. 112 TO 128 OFANNEXURE A-I S THE DEED OF REGISTRATION FOR PURCHASE OF LAND BY NISHANT CONSTR UCTION PVT. LTD FOR LAND BEARING FINAL PLOT NO.43 FROM DASHRATHBHAIPUNJ ABHAI, ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 27 - MAHENDRABHAIDASHRATHBHAI, AND RAJENDRABHAIDASHRATHB HAI. THE SAID LAND WAS PURCHASED BY NISHANT CONSTRUCTION PVT. LTD . IN FY 2009-10 FOR ITS RESIDENTIAL PROJECT KNOWN AT RATNAKAR-IV. 4.2.2. IF THE LOOSE PAPER AT PAGE NO. 160 OF ANNEX URE A-2 IS SEEN IN CONJUNCTION WITH PAGE NO. 112 TO 128 OFANNEXURE A-L , IT CAN BE CLEARLY SEEN THAT THE NOTING ON PAGE NO. 160 OFANNEXURE A-2 ARE NOTHING BUT THE DETAILS OF PAYMENTS MADE FOR THE PURCHASE OF LAND O FRATNAKAR IV. THE NOTINGS REFLECTED OR PAGE NO. 160 CONSIST OF BOTH C ASH AND CHEQUE PAYMENTS MADE FOR THE PURCHASE OF SAID LAND. THE AG REED PRICE FOR TILE LAND REFLECTED IN THE CONVEYANCE DEED DATED 03/02/2 010 IS RS. 5,25,00,000. THIS IS THE FIGURE REFLECTED AT FOURTH LINE OF PAGE NO. 160 OF ANNEXURE A-2. THIS IS NOTHING BUT THE CHEQUE COMPON ENT OF THE AGREED PRICE OF THE LAND AT RS.23,30,87,658/-(THE FIGURE R EFLECTED AT THE TOP OF PAGE NO. 160 OF ANNEXURE A-2). IT IS EVIDENT FROM P AGE NO. 160 OF ANNEXURE A-2 THAT OUT OF THE TOTAL SALT CONSIDERATI ON OF RS.23,30,87,658/- AN AMOUNT OF RS.5,25,00,000/- WHI CH IS REFLECTED IN THE DEED OF CONVEYANCE WAS PAID BY CHEQUE AND THE B ALANCE AMOUNT OF RS.18,05,87,658/- WAS PAID IN CASH THE SAID PAYMENT IN CASH WAS MADE BY NISHANT CONSTRUCTION PVT. LTD. OUT OF ITS UNACCO UNTED INCOME. THE SOURCE FOR THE SAID PAYMENT OFRS. 78,05,87,658/- IS NOT REFLECTED IN THE BOOKS OF ACCOUNTS OF NISHANT CONSTRUCTION PVT. LTD. 1 6. APART FROM THAT THE AUTHORITIES BELOW RELIED UPO N THE STATEMENT MADE BY SHRI UPENDRA C SHAH WHO DISCLOSED INCOME OF RS.15 CRORE ON BEHALF OF THE GROUP AND ALSO ADMITTED DISCREPANCY I N THE BOOKS OF ACCOUNTS AS THE CASE MADE OUT BY THE REVENUE. IT IS RELEVANT TO MENTION THAT THE SAID LOOSE PAPER AVAILABLE AT PAGE 113 OF THE PAPER BOOK FILED BY THE ASSESSEE BEFORE US WAS IMPOUNDED DURING THE SUR VEY PROCEEDINGS FROM THE PREMISES OF THE COMPANY AT 801-802, REGENC Y PLAZA, SATELLITE ROAD, AHMEDABAD AND PARTICULARLY WAS RECOVERED FROM ONE VIRENDRA N THAKKAR, AN EMPLOYEE OF THE ASSESSEE COMPANY WHO HA PPENS TO BE THE LIAISON OFFICER FOR THE COMPANY FOR LAST 23 YEARS. HOWEVER, ACCORDING TO THE AUTHORITIES BELOW THE SAID SHRI THAKKAR DEALS W ITH THE MATTERS RELATED ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 28 - TO LAND. WE HAVE ALSO GONE THROUGH THE DEED OF CONV EYANCE DATED 03.02.2010 AVAILABLE AT PAGE 175 TO 193 OF THE PAPE R BOOK FILED BEFORE US BY THE ASSESSEE WHERE THE TOTAL CONSIDERATION OF TH E SAID SALE PROCEED WAS OF RS. 5,25,00,000 AS REFLECTED AT PAGE 185 OF THE SAID PAPER BOOK. THE CASE OF THE ASSESSEE IS THIS THAT THE SAID LOOS E PAPER AS AFORESAID IS A DUMB DOCUMENT HAVING NO TITLE, DATE OR DETAILS WHICH CAN LEAD TO THE CONCLUSION THAT IT WAS PERTAINING TO THE APPELLANT AND RELATED TO THE ALLEGED PAYMENT MADE BY THE APPELLANT TO DASHARATHB HAIPUNJABHAI, MAHENTABHAIDASHRATHBHAI AND RAJENDRABHAIDASHRATHBHA I FOR PURCHASE OF LAND FOR THE RESIDENTIAL PROJECT OF RATNAKAR VI OF THE ASSESSEE COMPANY. IT IS ONLY PURE GUESS, WITHOUT ANY SUPPORTING EVIDENCE TO REBUT THE EXPLANATION OF THE APPELLANT AND GIVEN WITHOUT ANY INDEPENDENT ENQUIRY FROM THE VENDORS REGARDING ANY SUCH ALLEGED CASH PA YMENT BEING MADE TO THEM AS THE SUBMISSION MADE BY THE LEARNED SENIOR C OUNSEL APPEARING FOR THE ASSESSEE BEFORE US. THE LEARNED COUNSEL FUR THER ARGUED THAT THE CONSIDERATION AMOUNT WAS NOT DISPUTED BY THE REGIST RAR AT THE TIME OF REGISTRATION OF THE DEED OF CONVEYANCE, HENCE THE F ORMATION OF THE OPINION WITHOUT MAKING ENQUIRY IS NOTHING BUT ABSOL UTELY ON SURMISE AND CONJECTURES AND THUS THE ADDITION ON THAT BASIS IS LIABLE TO BE DELETED. THE LEARNED SENIOR COUNSEL FURTHER ARGUED THAT BOTH THE AUTHORITIES BELOW MISERABLY FAILED TO MAKE PROPER ENQUIRY INTO THE MA TTER BEFORE MAKING ADDITION. MERELY ON THE BASIS OF THE FIGURE NOTED O N THE DUMB DOCUMENT SEIZED AND IMPOUNDED PARTICULARLY WHEN TH E CONTENTS WERE NOT CORROBORATED BY ANY MATERIAL EVIDENCE AND WHEN OTHER FIGURES CANNOT ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 29 - BE PRESUMED TO BE CORROBORATED EVIDENCE IN THE ABSE NCE OF ANY ENQUIRY, THE ADDITION IS NOT SUSTAINABLE. IN THIS REGARD THE LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE RELIED UPON THE JUDGEMEN T PASSED BY THE HONBLEAPEX COURT IN THE MATTER OF V. C. SHUKLA REP ORTED IN 1998(3) SCC 410, THE JUDGEMENT PASSED BY HONBLEAPEX COURT IN THE MATTER OF DHAKESHWARI COTTON MILLS REPORTED IN 26 ITR 77. SO FAR AS THE RETRACTION OF THE STATEMENT GIVEN BY THE ASSESSEE IS CONCERNED IT WAS THE CASE OF THE ASSESSEE THAT UNDER PRESSURE AND COERCION THE ASSES SEE ACCEPTED THE DISCREPANCY IN THE BOOKS OF ACCOUNTS AND DISCLOSED RS. 15 CRORE AS IT APPEARS AT PAGE 118 TO 121 OF THE PAPER BOOK FILED BY THE ASSESSEE BEFORE US. IT WAS ARGUED BY THE LEARNED SENIOR COUNSEL FOR THE ASSESSEE THAT DIFFERENT JUDICIAL FORUM PLEASED TO HOLD THAT THE S TATEMENT DURING SURVEY HAS NO EVIDENTIARY VALUE. IN THIS ASPECT HE ALSO TO OK US TO THE JUDGEMENT PASSED BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT-VS.-S. KADER KHAN, REPORTED IN 352 ITR 480. THE JUDGEMENT PASSED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT-VS-SAR DABENK.MODI, REPORTED IN 217 TAXMAN 89 WAS ALSO RELIED UPON IN O RDER TO RELY UPON THE CBDT CIRCULAR DATED 10.03.2003 WHEREBY AND WHEREUND ER THE BOARD HAS CLARIFIED THAT THE REVENUE AUTHORITIES ARE NOT PERM ITTED TO OBTAIN CONFESSIONAL STATEMENT OF DISCLOSURE. 17. ON THE OTHER HAND, THE CRUX OF THE ARGUMENT MAD E BY THE LEARNED CIT-DR IS THIS THAT THE AMOUNT OF RS. 5.5 CRORE IS MENTIONED IN THE DEED OF CONVEYANCE AND ALSO IN THE LOOSE SHEET FOUND, SE IZED AND IMPOUNDED FROM THE EMPLOYEE OF THE APPELLANT COMPANY AND, THE REFORE, IT WAS TO BE ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 30 - CONCLUDED THAT IT IS THAT AMOUNT WHICH IS REFLECTED IN THE SALE DEED. FURTHER THAT THE OTHER FIGURES OF VARIOUS AMOUNTS M ENTIONED IN THE SAID LOOSE PAPER EITHER PAID OR TO BE PAID IN CASH HAS R IGHTLY BEEN CONSIDERED BY THE AUTHORITIES BELOW. IT WAS FURTHER CONTENDED THAT IN THE EVENT THE AFORESAID ARGUMENT IS NOT ACCEPTED BY US THE MATTER BE SET ASIDE TO THE FILE OF THE AUTHORITIES BELOW TO CROSS EXAMINE THE VENDO RS OF THE LAND. THUS, IT APPEARS THAT THE MOOT POINT TO BE CONSIDER ED BY US IS AS TO WHETHER THE REVENUE CAN RELY UPON THE PIECE OF PAPE R IN QUESTION AS PART AND PARCEL OF THE TRANSACTION PERTAINING TO THE LAN D WHICH HAS BEEN ALLEGED TO BE A DUMB DOCUMENT BY THE ASSESSEE IN TH E PRESENT FACTS AND CIRCUMSTANCES OF THE CASE AND AS TO WHETHER THE STA TEMENT GIVEN BY UPENDRA C SHAH AT ALL BEEN TAKEN INTO CONSIDERATION WHILE MAKING ADDITION OF THE AMOUNT OF RS. 18,05,87,658/- AS PAY MENT OF CASH TOWARDS THE PURCHASE OF LAND UNDER SECTION 69C OF THE ACT. 18. FIRSTLY, WE WOULD LIKE TO DEAL WITH THAT PIECE OF PAPER SEIZED AND IMPOUNDED FROM THE EMPLOYEE OF THE ASSESSEE COMPANY NAMELY SHRI VIRENDRA N THAKKAR AT PREMISES NO. 801, 802, REGENC Y PLAZA, SATELLITE ROAD, AHMEDABAD DURING SURVEY PROCEEDING. ADMITTEDL Y, THE SAID DOCUMENT AS IS HAVING NO TITLE OR DATE OR BROAD DET AILS TO DRAW AN INFERENCE THAT IT WAS PARTICULARLY RELATING TO PAYM ENT MADE BY THE APPELLANT TO DASHARATHBHAIPUNJABHAI, MAHENDTABHAIDA SHRATHBHAI AND RAJENDRABHAIDASHRATHBHAI FOR PURCHASE OF LAND FOR T HE RESIDENTIAL PROJECT OF RATNAKAR VI OF THE ASSESSEE COMPANY. IN THIS REG ARD, WE FIND THAT NO INDEPENDENT ENQUIRY HAS BEEN CONDUCTED BY THE REVEN UE BY CROSS ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 31 - VERIFICATION FROM THE VENDORS OF THE LAND IN QUESTI ON; THE REVENUE HAS ONLY COOKED UP A STORY ON THE BASIS OF THE FIGURES APPEARED ON SUCH LOOSE PAPERS ON SURMISES AND CONJECTURES.PURELY ON ASSUMP TION BASIS THE REVENUE HAS DRAWN AN INFERENCE THAT THE SAME IS NOT HING BUT RELATING TO THE PROPERTY DEAL IN QUESTION WHICH REMAINS AN INHE RENT DEFECT WHILE MAKING ADDITION AGAINST THE ASSESSEE. IF THAT BE SO , THEN THE DOCUMENT CAN ONLY BE TITLED AS DUMB DOCUMENTAND NOTHING ELSE. IT IS ALSO A FACT AS THE DEED OF CONVEYANCE REGISTERED WITH THE REGISTRATION AUTHORITIES AT THE PREVAILING JANTRI RATE UPON PAYMENT OF APPROPRIATE STAMP DUTY CHARGES; SUCH STAMP DUTY CHARGES HAS BEEN CALCULATED ON THE BASIS OF THE JANTRI RATE NOT BY THE APPELLANT COMPANY BUT BY THE OFFICE OF THE REGISTRAR AND THUS THE AMOUNT DECLARED IN THE DEED OF REGISTRATIO N CANNOT, AT ALL BE SAID TO BE INCORRECT AND / QUESTIONED PROVIDED THER E IS AN INDEPENDENT ENQUIRY MADE BY THE AUTHORITIES BELOW TO THAT EFFEC T. IN THIS RESPECT, WE WOULD LIKE TO DISCUSS THE JUDGMENT PASSED BY THE HO NBLE DELHI HIGH COURT IN THE MATTER OF CIT, C-1-VS-VATIKA LANDBASE PVT. LTD. IN THAT MATTER, THE ASSESSING OFFICER DID NOT MAKE ANY ENQU IRY FROM THE EMPLOYEE OR FROM BUYERS OF FLATS IN RESPECT OF ACTU AL PRICE PAID BY THEM. IN THAT CIRCUMSTANCES OF THE CASE THE IMPUGNED ADDI TION MADE MERELY ON THE BASIS OF AND UNSIGNED AND UNDATED SEIZED DOCUME NT HAS BEEN HELD TO BE UNSUSTAINABLE IN THE EYE OF LAW. THUS, THE PROPO SITION MADE BY THE REVENUE TOWARDS MAKING ADDITION ON THE BASIS OF THE FIGURES MENTIONED ON THE SAID LOOSE DUMB DOCUMENT, THUS, CANNOT BE CO NSIDERED TO BE VALID EVIDENCE IN THE ABSENCE OF ANY ENQUIRY MADE BY THE AUTHORITIES WHICH OUGHT TO HAVE DONE IN THE MANNER AS ALREADY DEALT W ITH US HEREINABOVE. NO AUTHORITY ACTING JUDICIALLY WOULD HAVE ACTED ON THE BASIS OF A LOOSE ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 32 - PAPER HAVING NO EVIDENTIARY VALUE HAD THERE BEEN MI NIMUM APPLICATION OF MIND. IN THIS REGARD WE HAVE CONSIDERED THE JUDG EMENT RELIED UPON BY THE LEARNED AR PASSED IN THE MATTER OF V. C.SHUKLA, REPORTED IN 1998(3) SCC 410 WHEREIN, IT WAS HELD THAT THE LOOSE SHEET C ANNOT BE SAID TO BE THE BOOK OR ENTRIES THEREIN IS NOT AN ADMISSIBLE EVIDEN CE. IN THE CASE BEFORE US THE SUCH LOOSE PAPER WAS FOUND FROM ONE OF THE E MPLOYEES OF THE ASSESSEE COMPANY NAMELY MR. VIRENDER N. THAKKAR. SH RI THAKKAR DID NOT DEPOSE THAT THIS PARTICULAR LOOSE PAPER BELONGS TO THE APPELLANT COMPANY OR IT RELATES TO THE PAYMENT MADE FOR LAND IN CASH BY THE APPELLANT COMPANY. RELYING ON THE FIGURE MENTIONED IN THAT PARTICULAR LOOSE PAPER AND ASSUMING THAT RELATES TO THE PAYMEN T MADE BY THE APPELLANT IN CASH TOWARDS LAND DEALING IS ULTIMATEL Y IS OF NO VALUE IF THE VERY BASIS OF SUCH CONCLUSION IS NOT HAVING ANY TRU E FORCE IN THE EYE OF LAW. WE HAVE FURTHER CONSIDERED THE JUDGEMENT PASSE D IN THE MATTER OF CIT, DELHI-VI-VS-GIRISH CHOUDHARY, REPORTED IN (200 7) 163 TAXMANN 608 (DELHI) WHERE IN SIMILAR CIRCUMSTANCES A DOCUME NT CONTAINING ENTRY 48 WAS SEIZED FROM THE PREMISES OF THE COMPANY IN WHICH THE ASSESSEE WAS A DIRECTOR. AS ASSESSEE FAILED TO EXPLAIN THE S AID ENTRY, THE ASSESSING OFFICER TREATED RS.48 LAKH AS ASSESSEES UNDISCLOSE D INCOME AND MADE ADDITION.THE HONBLECOURT HELD THAT SINCE THERE WAS NO MATERIAL ON RECORD TO SHOW AS TO ON WHAT BASIS THE ASSESSING OF FICER HAS REACHED AT THE CONCLUSION THAT FIGURE 48 WAS TO BE READ AS 4 8 LAKHS AND THUS DOCUMENT RECOVERED WAS A DUMB DOCUMENT, ADDITION THEREFORE WAS UNJUSTIFIED AND UPHELD THE ORDER PASSED BY THE LEAR NED TRIBUNAL IN DELETING SUCH ADDITION. IN ANOTHER MATTER THE HONB LE ITAT, CHENNAI BENCH IN THE CASE OF M.M.FISHERIES PRIVATE LTD.-VS. -DCIT, REPORTED IN 17 ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 33 - SOT 5 OBSERVED AS FOLLOWS THE DUTY THE ASSESSING OFFICER IS NOT ONLY TO ASSESS THE INCOME BUT ALSO TO INVESTIGATE INTO T HE DETAILS OF SUCH INCOME. THE ASSESSING OFFICER HAD NOT ESTABLISHED N EXUS BETWEEN THE LOOSE SLIPS AND THE SEIZED MATERIAL. THERE WAS NO D ATE OR SIGNATURE IN THE LOOSE SLIPS. NO NARRATIONS OR DESCRIPTIONS WERE WRI TTEN ON THOSESLIPS. SINCE THOSE WERE UNSIGNED AN UNDATED, THE CONTENTS THEREIN WERE INSUFFICIENT TO FASTEN THE LIABILITY ON THE ASSESSE E. THE LEARNED TRIBUNAL FURTHER HELD THAT THE ASSESSING OFFICER FAILED TO E STABLISH THE PAYMENT OF RS. 2.40 CRORES AS PURCHASE CONSIDERATION FOR THE A CQUISITION OF 22 OF LAND AND HE HAD FAILED TO PROVE THE PAYMENT; HENCE THERE WAS NO OTHER ALTERNATIVE BUT TO RELY ON THE BOOKS OF ACCOUNTS MA DE BY THE ASSESSEE ACCORDING TO WHICH THE PURCHASE CONSIDERATION WAS R S.91 LAKH AND THIS HAD PROPERLY TALLIED WITH THE SHOWN STATEMENT OF TH E ASSESSEE. IN THIS RESPECT, WE WOULD FURTHER LIKE TO CONSIDER THE JUDGMENT PASSED BY THE HONBLE APEX COURT IN THE MATTER OF DHAKESHW ARI COTTON MILLS REPORTED IN 26 ITR 775, WHEREIN IT WAS HELD EVEN T HOUGHINCOME TAX AUTHORITIES INCLUDING THE ASSESSING OFFICER HAS UNF ETTERED DISCRETION AND NOT STRICTLY BOUND BY RULES AND PLEADING AS WELL AS MATERIALS ON RECORD AND IS LEGITIMATELY ENTITLED TO ACT ON THE MATERIAL WHICH MAY NOT BE ACCEPTED AS EVIDENCES, NEVERTHELESS SUCH DISCRETION DOES NOT ENTITLED THEM TO MAKE A PURE GUESS AND BASE AN ASSESSMENT EN TIRELY UPON IT WITHOUT REFERENCE TO ANY MATERIAL OR EVIDENCE AT AL L. IF THE RATIO OF THIS PARTICULAR JUDGMENT IS MADE TO BE APPLIED IN THE IN STANT CASE THEN THE ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 34 - ADDITION MADE ON THE BASIS OF THE LOOSE PAPER IMPOU NDED FROM THE OFFICE PREMISES OF THE APPELLANT COMPANY IS OF NO VALUE AT ALL. 19. SECONDLY, WE FIND THAT TIME AND AGAIN THE AUTH ORITIES BELOW HAS RELIED UPON THE STATEMENT MADE BY SHRI UPENDRA C. S HAH RECORDED DURING THE SURVEY ON 20.05.2011 ACCEPTING DISCREPANCY IN T HE BOOKS AND DISCLOSING RS.15 CRORE BUT THE AFFIDAVIT DATED 25.0 5.2011 SHOWN BY THE ASSESSEE WITH A SPECIFIC STATEMENT THAT SUCH STATEM ENT SO RECORDED DURING SURVEY WAS UNDER PRESSURE AND COERCION HAS NOT BEEN TAKEN INTO CONSIDERATION IN ITS PROPER PERSPECTIVE. THE JUDGME NT PASSED BY THE HONBLE MADRAS HIGH COURT IN THE MATTER OF CIT-VS-S . KADARKHAN, REPORTED IN 352 ITR 480 HOLDING THAT STATEMENT DURI NG SURVEY HAS NO EVIDENTIARY VALUE HAS BEEN UPHELD BY THE HONBLE AP EX COURT. THE RATIO HAS ALSO BEEN FOLLOWED BY THE JURISDICTIONAL HIGH C OURT IN THE CASE OF CIT-VS-SARDABEN K. MODI, REPORTED IN 217 TAXMAN 89. IN THE SAID JUDGMENT THE HONBLE COURT WAS PLEASED TO REFER THE CBDT CIRCULAR DATED 10.03.2003 WHEREBY AND WHEREUNDER THE BOARD H AS INSTRUCTED THAT NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSIONAL ST ATEMENT OF DISCLOSURE AND EVIDENCE SHOULD BE COLLECTED. WE FURTHER FIND FROM THE SUBMISSIONS MADE BY THE R EVENUE THAT THEY HAVE PRAYED FOR SETTING ASIDE THE ISSUE TO THE LEARNED AOFOR RE- EXAMINATION OF THE MATTER WHICH, ACCORDING TO US IS NOT PERMISSIBLE AT THIS STAGE. IF THE PRAYER IS GRANTED BY US, THEN TH IS WILL BE NOTHING BUT A PREMIUM ON THE INACTION MADE BY THE AUTHORITIES BEL OW ON THIS ASPECT ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 35 - WHEN THEY FAILED TO AVAIL THE CHANCES TO DO SO AT T HE RELEVANT TIME. BOTH THE LEARNED AO OR BY THE LEARNED CIT(A) FAILED TO D O IT. OPPORTUNITY OF CROSS VERIFICATION FROM THE VENDORS, IN OUR CONSIDE RED VIEW SHOULD NOT BE GIVEN IN THE HANDS OF THE REVENUE ONCE AGAIN WHICH WILL BE OPENING A FURTHER AVENUE FOR MULTIPLE INNINGS WHICH HAS BEEN DEPRECATED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE MATTER OF RAJESH BABUBHAI DAMANIA-VS-CIT, REPORTED IN 251 ITR 54 PARTICULARLY WHEN THE ALLEGED UNACCOUNTED INVESTMENT MADE BY THE ASSESSEE IN RESP ECT OF THE PROPERTY IN QUESTION HAS NOT BEEN ESTABLISHED BY THE REVENUE BEFORE US. THUS, TAKING INTO CONSIDERATION THE ENTIRE ASPECT OF THE MATTER, THE ADDITION MADE ON THE BASIS OF THE DUMB DOCUMENT IS UNJUSTI FIED, UNWARRANTED AND BAD IN LAW WHICH IS LIABLE TO BE SET ASIDE. HEN CE, WITH THE AFORESAID OBSERVATION, WE DELETE THE ADDITION OF RS.18,05,87, 658/- TOWARDS ALLEGED UNACCOUNTED INVESTMENT IN PURCHASE OF LAND OF THE P ROJECT RATNAKAR -IV OF THE ASSESSEE COMPANY. THUS, THIS GROUND OF APPEA L PREFERRED BY THE ASSESSEE IS ALLOWED. GROUND NO.4 : ADDITION ON ACCOUNT OF ON MONEY TO THE TUNE OF RS.17,85,79,435/-. 20. THE 3 RD ADDITION WAS MADE IN RESPECT OF THE DISPUTE RELATI NG TO THE SELL PRICE OF THE FLAT OF RATNAKAR II PROJECT, SOLD TO CUSTOMERS WHICH WAS SHOWN AS RS.1,780/- PER SQUARE FEET IN THE SALE DEE D INSTEAD OF RS. 4,300/- PER SQUARE FEET, AS DISCLOSED AT PAGE 130 OF ANNEXU RE BF17 RECOVERED/IMPOUNDED /INVENTORISED FROM THE SURVEY P REMISES AS THE CASE MADE OUT BY THE REVENUE.ACCORDING TO THE REVENUE IT IS IMPLIED THAT THE ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 36 - ASSESSEE HAD RECEIVED ONLY THE AMOUNT AS PER CIRCLE RATE BY WAY OF CHEQUE PAYMENTS AND ALL THE REMAINING AMOUNT HAD BE EN RECEIVED BY WAY OF CASH PAYMENTS I.E. ON MONEY. WHICH HAS WORKED OU T AT RS.17,85,79,435/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE WHICH WAS FURTHER CONFIRMED BY THE LEARNED CIT(A).HENCE, THE INSTANT APPEAL BEFORE US. 21. THE REVENUE HAS CONCEDED THIS GROUND IN VIEW OF THIS PARTICULAR FACT THAT THE ISSUE HAS ALREADY BEEN EXAMINED BY TH E HONBLE ITAT IN ITA NO.1502/AHD/2017; THE RELEVANT PORTION OF THE W RITTEN NOTES OF SUBMISSION FILED BY THE REVENUE IS AS FOLLOWS: LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION MADE BY AO OF RS.17,85,79,435/- ON ACCOUNT OF ALLEGED ON MONEY RECEIPT FROM RANKER-III/IV SCHEME DEVELOPE D BY THE APPELLANT. LD CIT(A) OUGHT TO HAVE DELETED ADDITION MADE IN ABSENCE OF IOTA OF EVIDENCE REGARDING PRICE CHARGED OR RECEIVED OVER AND ABOVE DOCUMENTED RATES APPROVED BY STAMP V ALUATION AUTHORITY. IT HAS BEEN CONTENDED THAT THIS ISSUE HAS ALREADY B EEN EXAMINED BY THIS BENCH OF HONBLE ITAT IN ITA NO.15 02/AHD/2017 DECIDED IN PURSUANT TO THE SPECIFIC DIRECTION OF TH E HONBLE HIGH COURT IN TAX APPEAL NO.898/2017 AND THE MATTER HAS ATTAINED FINALITY BY DISMISSAL OF THE SLP FILED BY THE REVEN UE AGAINST THE ORDERS OF THE HONBLE HIGH COURT IN TAX APPEAL NOS. 809 AND 898/2017 ARISING OUT OF THE ORDERS OF THE HONBLE T RIBUNALS IN ITA NO.378/AHD/2016 FOR A.Y. 2012-13 AND ITA NO.1502/AH D/2017 FOR A.Y. 2011-12. THEREFORE, THE ISSUE OF ADDITION OF R S.17,85,79,735/- MAY BE DECIDED ACCORDINGLY. ITA NO.2732/AHD/2016 NISHANT CONSTRUCTION PVT. LTD. VS. DCIT ASSESSMENT YEAR 2010-11 - 37 - TAKING INTO CONSIDERATION THE JUDGMENT PASSED BY TH E HONBLE TRIBUNAL, WE FIND THAT THE ISSUE HAS ALREADY BEEN S ETTLED IN FAVOUR OF THE ASSESSEE HENCE, RESPECTFULLY RELYING UPON THE SAME WE ALLOW THIS GROUND OF APPEAL PREFERRED BY THE ASSESSEE BY DELETING THE ADDITION OF RS.17,85,79,435/- ON ACCOUNT OF ON MONEY. 22. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. THIS ORDER PRONOUNCED IN OPEN COURT ON 25/09/2019 SD/- SD/- ( WASEEM AHMED) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 25/09/2019 PRITIYADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-9, AHMEDABAD. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION23.09.2019 (COMPUTER DICTATION) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24.09.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S25.09.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER