SHREENATH HERITAGE LIQUOR PVT. LTD., JHUNJHUNU V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, JHUNJHUNU

ITA 279/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6285 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 27-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S NEHRA JCIT DR DHK
• Assessee Lawyers: S L PODDAR; EISHA KANOONGO
• Keywords: Income from undisclosed sources; Opportunity of cross examination; Additional evidence; Question of law; Corroborative evidences; Third party statement; Accommodation entries
• Section: 143(3); 5(2); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 279/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2013-14 M/S. SHREENATH HERITAGE LIQUOR PVT LTD. G-1/100, RIICO AREA JHUNJHUNU CUKE VS. THE ACIT CIRCLE JHUNJHUNU LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAICS 3950 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI S.L. PODDAR, ADVOCATE AND MS. EISHA KANOONGO, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY:SHRI A.S. NEHRA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/07/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 19 /07/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE APPEAL FILED BY THE ASSESSEE EMANATES FROM T HE ORDER OF THE LD. CIT(A)-3, JAIPUR DATED 24-01-2018 FOR THE AS SESSMENT YEAR 2013- 14 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DECIDING THE APPE AL EX-PARTE WHEREAS NO NOTICE WAS SERVED TO THE ASSESSEE OR TO THE COUNSEL OF THE ASSESSEE. ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 2 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADD ITION OF RS. 85,23,000/- U/S 68 OF THE I.T. ACT, 1961. 3. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN INVOKING THE PROV ISIONS OF SECTION 115BBE OF THE I.T. ACT, 1961. 4. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE S ET OFF OF CARRIED FORWARD LOSSES AGAINST THE INCOME DETERMINE D FOR THE YEAR. 2.1 DURING THE CASE OF HEARING, THE LD.AR OF THE AS SESSEE HAS NOT PRESSED THE GROUND NO. 1. HENCE, THE SAME IS DISMIS SED BEING NOT PRESSED. 3.1 IN THE WRITTEN SUBMISSION, THE LD.AR OF THE AS SESSEE HAS MENTIONED THE GROUND NO. 3 AND 4 OF THE ASSESSEE AS CONSEQU ENTIAL. HENCE, THE SAME DO NOT REQUIRE ANY ADJUDICATION BY US. 4.1 AT THE OUTSET OF THE HEARING, THE LD.AR OF THE ASSESSEE VIDE ITS APPLICATION DATED 27-06-2018 PRAYED HEREUNDER TO AD MIT THE ADDITIONAL EVIDENCE UNDER RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. 1. WITH REFERENCE TO ABOVE SUBJECT WE WOULD LIKE SUBMIT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS APPELLA TE PROCEEDINGS DUE TO NON- AVAILABILITY OF TIME WE COULD NOT SUBMIT THE VITAL AND NECESSARY EVIDENCES IN SUPPORT OF OUR CLAIM REGARDING SHARE APPLICATION MO NEY RECEIVED FROM SHRI JAGJEET SINGH GABHA WHICH IS BANK STATEMENT. AT THE TIME OF ASSESSMENT PROCEEDING THE SHARE APPLICANT WAS NOT IN INDIA AND IS RESIDING ABROAD. THEREFORE WE COULD NOT PRODUCE THE BANK STATEMENT. NOW WE HAV E OBTAINED ALL THE BANK ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 3 STATEMENT WHICH IS SUBMITTING IN PAPER BOOK PAGE NO . 10 & 11. THUS THE ADDITIONAL EVIDENCES BEING FURNISHED ARE ONLY OF SU PPORTING AND SUPPLEMENTARY NATURE BUT THESE GO TO THE ROOT OF THE MATTER IN SU PPORT OF SHARE APPLICATION MONEY. THE ADDITIONAL EVIDENCES ARE CRUCIAL FOR THE DISCHARGE OF JUSTICE. THEREFORE THESE MAY KINDLY BE ADMITTED. 2. IT IS SUBMITTED THAT WHEN TECHNICALITIES ARE PIT CHED AGAINST THE SUBSTANTIVE DISCHARGE OF JUSTICE, THE LATER HAS TO PREVAIL, IN A CASE WHERE THE BONAFIDES ARE NOT IN DOUBT (MARUTI CIVIL WORKS VS. ITO [2011] 136 TTJ 448 [PUNE]). IT IS FURTHER SUBMITTED THAT ALL THE JUDICIAL INSTI TUTIONS - THE HON'BLE ITAT BEING ONE OF THEM - ARE RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE THESE ARE CAPABLE OF REMOVING INJUSTICE. THE ASSESSEE IS ONLY FURNISHING SUPPORTING EVIDENCES ONLY. THESE ARE NOT COOKED UP OR MANIPULATED IN ANY WAY. IN VIEW OF THIS THE HON'BLE ITAT IS REQUESTED TO ADMIT THE ADDITIONAL E VIDENCE AND CONSIDER THE SAME FAVOURABLY. THE FOLLOWING CASE LAWS ARE QUOTED IN SUPPORT FOR THE ADMISSION OF THE ADDITIONAL EVIDENCE. 3. FAVOURABLE CASE LAWS (I) NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 (SC) - TRIBUNAL HAS JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH ARISES FROM THE FACTS AS FOUND BY THE AUTHORI TIES BELOW AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESS EE, NOTWITHSTANDING THE FACT THAT SAME WAS NOT RAISED BEFORE THE LOWER AUTHORITIES. (II) CIT VS. RAORAIA HANUT SINGH 117 TAXMAN 613 / 252 I TR 0528 : (RAJ) - THE POSITION IS THAT THE TRIBUNAL CAN ADMIT THE ADDITIONAL EVIDENCE IF IT REQUIRES IT TO ENABLE IT TO PASS ORD ERS. (III) ELECTRA (JAIPUR) PVT. LTD. VS. IAC 26 ITD 236 - IF EVIDENCE PRODUCED BY ASSESSEE IS GENUINE, RELIABLE AND PROVE S ASSESSEE'S CASE THAN ASSESSEE SHOULD NOT BE DENIED OPPORTUNITY OF IT BEI NG PRODUCED EVEN IF HE FIRST TIME PRODUCES SAME BEFORE APPELLATE AUTHORITY . (IV) SMT. PRABHAVATI S. SHAH VS. CIT 231 ITR 1 (BOM.) - PRODUCTION OF ADDITIONAL EVIDENCE - ASSESSEE TAKING LOANS FROM TWO CREDITORS - ITO TREATING LOANS AS INCOME FROM UNDIS CLOSED SOURCES AS SUMMONS COULD NOT BE SERVED ON CREDITORS - ASSESSEE WANTING TO PROVE GENUINENESS OF LOAN BY RELYING ON FACT THAT AMOUNT BORROWED AND REPAID BY CHEQUES. ASSESSEE PRODUCING PHOTOSTAT COPIES OF CHE QUES AND CERTIFICATE FROM BANK BEFORE AAC . AAC REFUSING TO ADMIT ADDITI ONAL EVIDENCE. AAC SHOULD HAVE CONSIDERED EVIDENCE PRODUCED BY ASSESSE E REGARDING LOAN. (V) CIT VS. GANI BHAI WAHAB BHAI 232 ITR 900 (MP) - THERE IS NO PROHIBITION FOR TAKING ADDITIONAL EVIDENCE AT THE APPELLATE STAGE, THE ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 4 ONLY CONDITION BEING THAT THE DEPARTMENT SHOULD NOT BE PREJUDICED AND SHOULD BE GIVEN REASONABLE OPPORTUNITY TO REBUT THI S ADDITIONAL EVIDENCE. IN THIS CASE, NO SUCH REQUEST WAS MADE BY THE REPRESEN TATIVE OF THE DEPARTMENT WHETHER THEY DISPUTED THIS CERTIFICATE OR NOT. THER EFORE, THERE IS NO ILLEGALITY COMMITTED BY THE TRIBUNAL WHICH ACCEPTED THE CERTIF ICATE OF 46 PER CENT OF THE YIELD. IN THIS VIEW OF THE MATTER, THE ADDITION AL EVIDENCE ENTERTAINED BY THE TRIBUNAL CANNOT BE SAID TO BE BAD. (VI) SMT. SURINDER KAUR VS. ITO (2008) 118 TTJ 710 (LUCK ) - WHERE ADDITIONAL EVIDENCE SOUGHT TO BE PRODUCED BEF ORE TRIBUNAL WAS A CERTIFICATE RELATING TO ASSESSEE'S CLAIM FOR DEDUCT ION OF A SUM AND IF WAS RELEVANT TO DECIDE CLAIM OF ASSESSEE, SAME WAS TO B E ADMITTED FOR SUBSTANTIAL CAUSE AND TO ENABLE TRIBUNAL TO PASS APPROPRIATE OR DER IN MATTER. (VII) MASCON GLOBAL LTD. VS. ASSISTANT COMMISSIONER OF I NCOME TAX (2010) 37 SOT 202 (CHENNAI) - RULE 29 PERMITS THE TRIBUNAL TO ADMIT THE ADDITIONAL EVIDENCE FOR ANY SUBSTANTIAL C AUSE. IN VIEW OF THE AFORESAID FACTS AND DECISIONS THE HO N'BLE ITAT IS REQUESTED TO ADMIT THE ADDITIONAL EVIDENCE AND DECI DE THE CASE FAVOURABLY.. 4.2 THE LD. DR OPPOSED THE APPLICATION OF THE ASSES SEE AS TO FILING OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITAT, RULE S, 1963. 4.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THROUGH THIS APPLICATION, THE ASSESSEE WANTS TO SUBMIT COPY OF BANK A/C OF SHRI JAGJIT SINGH GABHA WHO HAD MADE SHARE APPLICATION TO ASSESSEE. THE SHARE APPLICANT WAS RE SIDING ABROAD DURING RELEVANT TIME. FURTHER IT IS SUPPORTING AND SUPPLEM ENTARY EVIDENCE WHICH SUPPORTS THE CLAIM OF ASSESSEE. KEEPING THE NATURE OF EVIDENCE AND FACTS OF THE CASE, THE BENCH OBSERVES THAT IN THE INTERES T OF EQUITY AND JUSTICE, THE ASSESSEE DESERVES TO FILE THIS ADDITIONAL EVID ENCE WHICH IS VITAL FOR ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 5 ADJUDICATION OF THIS APPEAL. THUS THE BENCH ALLOWS AND SHALL CONSIDER THIS ADDITIONAL TO DECIDE THE ISSUE IN APPEAL. 5.1 APROPOS GROUND NO. 2 OF THE ASSESSEE, BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS ENGAGED IN THE LIQUOR BUSINESS. THE ASSESSEE COMPANY FILED ITS RET URN OF INCOME ON 19-09-2013 FOR THE ASSESSMENT YEAR 2013-14 DECLARIN G TOTAL INCOME OF RS. NIL AND HAS ALSO DECLARED CURRENT YEAR LOSS OF RS. 50,19,763/-. THE AO COMPLETED THE ASSESSMENT ON 16-03-2016 U/S 143( 3) OF THE ACT DETERMINING TOTAL INCOME OF RS. 85,23,000/- INTER A LIA MAKING THE ADDITION OF RS. 85,23,000/- U/S 68 OF THE ACT. THE RELEVANT OBSERVATIONS OF THE AO ARE AS UNDER:- 4.2 THE REPLY FILED BY THE ASSESSEE HAS BEEN GONE THROUGH AND IS PLACED ON RECORD. IN THIS REGARD, IT IS HERE BY STATED THAT SHRI JAGJIT SINGH URF SHRI JEETJI WHO IS ONE OF THE INVE STOR FOR SHARE CAPITAL AND SECURITY PREMIUM AMOUNTING TO RS. 85,23,000/- I N THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY HAS FILED THAT SHRI JAGJIT SINGH OWNS A SINGLE DIRECTOR COMPANY IN THE NAME OF QUICK FOREX TRANSFER LIMITED WHEREIN HE IS THE ONLY SHARE HOLDER. ON PER USAL OF THE NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31-08-20 13 & 31-08-2014 IN THE CASE OF QUICK FOREX TRANSFER LIMITED, IT IS SEE N THAT UNDER THE HEAD RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUND, THE EARNED PROFIT OF THE COMPANY IS 12065 GBP AND HAS SHOWN DIVIDENDS IS SUED AT 14000 GBP TO SHRI JAGJIT SINGH GABBA URF SHRI JEETJI. THI S CONSISTENCY IS ALSO SEEN IN THE PREVIOUS YEARS. THESE STATEMENTS SHOW T HAT SHRI JAGJIT SINGH URF SHRI JEETJI WHO IS ALSO OWNER OF QUICK FO REX TRANSFER LIMITED IS FAR BEYOND THE CREDITWORTHINESS OF MAKIN G ADVANCE TO THE ASSESSEE IN SHARE CAPITAL AND SECURITY PREMIUM IN THE YEAR RELEVANT TO ASSESSMENT YEAR 2013-14. MERELY PROVING THE IDENTIT Y OF THE CREDITOR DOES NOT DISCHARGE THE ONUS OF THE ASSESSEE IF THE CAPACITY OF CREDITWORTHINESS OF THE CREDITORS IS NOT PROVED. FU RTHER, THE ASSESSEE ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 6 COMPANY HAS NOT FILED ANY EVIDENCE REGARDING HIS WI FES INCOME. IT IS ALSO WORTHWHILE TO SAY THAT THE ASSESSING OFFICER W HEN STARTS ENQUIRY SPECIFICALLY TO SATISFY HIMSELF OF THE SOURCE OF SU CH CREDIT AND IF DURING THE ENQUIRY HE IS SATISFIED THAT THE ENTRIES ARE NO T GENUINE THEN HE HAS EVERY RIGHT TO ADD THE SAID SUM REPRESENTED BY SUCH CREDIT ENTRY AS INCOME OF THE ASSESSEE. HOWEVER, SATISFACTION MUST NOT BE ILLUSORY OR IMAGINARY BUT MUST HAVE BEEN DERIVED FROM THE RELEV ANT FACTS AND EVIDENCES AND ON THE BASIS OF PROPER ENQUIRY OF ALL MATERIAL BEFORE HIM. HENCE, INVESTMENT MADE BY SHRI JAGJIT SINGH AMOUNTI NG TO RS. 85,23,000/- ALSO REMAINS UNPROVED IN CONTEXT TO THE SECTION 68 OF THE ACT AND BECOMES ELIGIBLE FOR ADDITION OF SUCH AMOUN T TO THE RETURNED INCOME OF THE ASSESSEE COMPANY. 5.2 .THE HON'BLE HIGH COURT HAS ALSO HELD THAT TH E ASSESSEE IS REQUIRED TO OFFER EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF AND THE EXPLANATION SO OFFERED SHOULD BE SA TISFACTORY IN THE OPINION OF THE ASSESSING OFFICER. 5.3 HENCE SHARE APPLICATION MONEY RECEIVED FROM SHR I JAGJIT SINGH AMOUNTING TO RS. 85,23,000/-REMAINS UN PROVEN AND FOUND INFIRMITY IN HIS CREDITWORTHINESS AND GENUINENESS A ND THE WHOLE AMOUNT OF RS. 85,23,000/- CREDITED FOR THE SHARE CA PITAL AND PREMIUM SECURITY IS LIABLE TO BE TAXED U/S 68 OF THE ACT. IN FIRST APPEAL, THE LD. CIT(A) HAS CONFIRMED THE A DDITION MADE BY THE AO BY PASSING THE EX-PARTE ORDER AS THE ASSESSEE WAS N OT PRESENT BEFORE THE LD. CIT(A) ON THE DATE OF HEARING. THE RELEVANT OBS ERVATIONS OF THE LD. CIT(A) ARE AS UNDER:- 4. THE PRESENT APPEAL IS AGAINST THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT. I HAVE CAREFULL Y PERUSED THE GROUNDS OF APPEAL AND ASSESSMENT ORDER. AS ALRE ADY DISCUSSED ABOVE, THE APPELLANT HAS FAILED TO OFFER ANY EXPLANATION FOR SUBMISSION IN SUPPORT OF THE GROUND S RAISED IN THIS APPEAL NOR ANY SUPPORTING EVIDENCES WERE PR ODUCED BY HIM DESPITE ADEQUATE OPPORTUNITY HAVING BEEN PRO VIDED. ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 7 IN THIS CONNECTION, RELIANCE MAY BE PLACED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F H.M. ESUFALI ABDULALI (1973) 90 ITR 271 WHEREIN THE HON' BLE COURT HAS HELD THAT THE APPELLATE AUTHORITY CANNOT SUBSTITUTE ITS OWN JUDGEMENT IN PLACE OF THE JUDGEMENT OF THE AO UNLESS IT IS SHOWN THAT THE JUDGEMENT OF THE AO WAS BIASED, IRRATIONAL, VINDICTIVE OR CAPRICIOUS. IN THE INSTANT CASE, THE APPELLANT IS NOT ABLE TO S HOW THAT THE DECISION OF THE AO WAS ARBITRARY, BIASED, IRRATIONAL, VINDICTIVE OR CAPRICIOUS WITHOUT ANY BASIS, I FIND NO REASON TO INTERFERE WITH THE DECISION OF THE AO. 5. IN THE RESULT, THE APPEAL IS DISMISSED. 5.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED FOR DELETION OF ADDITION SUSTAINED BY THE LD. CIT(A) AM OUNTING TO RS. 85.23 LACS U/S 68 OF THE ACT FOR WHICH THE LD.AR OF THE A SSESSEE FILED THE FOLLOWING WRITTEN SUBMISSION. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS ENGAGED IN THE LIQUOR BUSINESS. RETURN WAS FILED ON 19.09.2013 DECLARING TOTAL INCOME OF RS. NIL. THE L EARNED ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT ON 16.03.2016 U/S 143(3) OF THE INCOME TAX ACT, 1961 DETERMINING TOTAL INCOME AT RS. 85,23,000/- INTER A LIA MAKING THE ADDITION OF RS. 85,23,000/- U/S 68 OF TH E INCOME TAX ACT, 1961 IN RESPECT OF SHARE APPLICATIO N MONEY OF SHRI JAGJIT SINGH GABHA. THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) IS UNJUST, UNLAWFUL AND ILLEGAL. THE SAME IS ASSAILED AS UNDER: - 2. SHARE APPLICATION MONEY OF RS. 85,23,000/- OF SHRI JAGJIT SINGH GABHA IS GENUINE: - ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 8 IT IS SUBMITTED THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS THE ASSESSEE SUBMITTED THAT THE SHARE A PPLICATION MONEY OF RS. 85,23,000/-RECEIVED FROM SHRI JAGJIT S INGH GABHA WAS GENUINE. IT WAS SUBMITTED BEFORE THE LEARNED AS SESSING OFFICER THAT SHRI JAGJIT SINGH GABHA WAS A BRITISH CITIZEN. IN SUPPORT OF THIS A COPY OF PASSPORT WAS SUBMITTED. C OPY OF WHICH IS AVAILABLE ON PAPER BOOK PAGE NUMBER 3 TO 7. THIS ESTABLISHES THE IDENTITY OF SHARE APPLICANT. IT WAS FURTHER SUBMITTED THAT SHRI JAGJIT SINGH GABHA WAS OPERATIN G A COMPANY AS A SINGLE DIRECTOR NAME QUICK FOREX TRANSFER LTD. THE COMPANY'S PRINCIPLE ACTIVITY DURING THE YEAR UNDER CONSIDERATION WAS MONEY TRANSFER AND EXCHANGE BUREAU. IN SUPPORT OF THIS COPIES OF FINANCIAL ACCOUNTS FOR THE PERIOD ENDING 31.08.2013 AND 31.08.2014 WERE SUBMITTED BEFORE THE LEARNED AS SESSING OFFICER. COPIES OF THE SAME ARE AVAILABLE ON PAPER BOOK PAGE NUMBER 19 TO 37. THUS THE ACTIVITY WHICH GENERATED INCOME IN THE HANDS OF SHRI JAGJIT SINGH GABHA WAS ALSO ESTAB LISHED. THIS PROVES THE SOURCE OF SOURCE IF AT ALL REQUIRED U/S 68 OF THE INCOME TAX ACT, 1961 AS THE PROVISIONS OF EXPLANATI ON SOURCE OF THE SOURCE ARE NOT APPLICABLE IN THE CASE OF NRI. I T IS FURTHER SUBMITTED THAT THE ENTIRE SHARE APPLICATION MONEY W AS TRANSFERRED THROUGH BANKING CHANNEL. IN THE HANDS O F THE ASSSESSEE THE MONEY STOOD TRANSFERRED FROM THE BANK ACCOUNT OF SHRI JAGJIT SINGH GABHA IN HDFC BANK ACCOUNT NO. 156210660000188, MANSAROVER GARDEN, NEW DELHI. THE COPY OF THIS BANK ACCOUNT FOR THE RELEVANT PERIOD 31.03. 2012 TO 31.03.2014 IS AVAILABLE ON PAPER BOOK PAGE NUMBER 10 TO 11. ASSESSEE ALSO SUBMITTED A DETAILED CONFIRMATION OF SHRI JAGJIT SINGH GABHA REGARDING SHARE APPLICATION MONE Y OF RS. 85,23,000/-. COPY OF THE CONFIRMATION IS AVAILABLE ON PAPER BOOK PAGE NUMBER 8. THUS TO SUMMARIZE THE ASSESSEE FURNISHED THE FOLLOWING IN SUPPORT OF THE GENUINENE SS OF SHARE APPLICATION MONEY BEFORE THE LEARNED ASSESSING OFFI CER: - (I) COPY OF PASSPORT OF SHRI JAGJIT SINGH GABHA EVIDENCING THAT HE IS A NRI R/O 55, WOODLANDS ROAD, SOUTHALL, UBI 1EJ, LONDON PASPORT NO. 508223849. THIS ESTABLI SHES THE EXISTENCE AND IDENTITY OF THE SHARE APPLICANT. (II) COPY OF DRIVING LICENSE OF SHRI JAGJIT SINGH GABHA AVAILABLE ON PAPER BOOK PAGE NUMBER 1. THUS FURTHER SUPPORTS THE EXISTENCE AND IDENTITY OF THE SHARE AP PLICANT. (III) CONFIRMATION IN SUPPORT OF SHARE APPLICATION MONEY OF RS. 85,23,000/- WHICH DISCLOSES THAT THE E NTIRE ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 9 AMOUNT WERE THROUGH BANKING CHANNELS. THIS ESTABLIS HES THE GENUINENESS OF THE TRANSACTION. (IV) COPY OF HDFC BANK ACCOUNT NO. 156210660000188, MANSAROVER GARDEN, NEW DELHI WHICH FURTHER ESTABLISHES THAT THE ENTIRE AMOUNT OF SHARE APPLICATION OF RS. 85,23,000/- FLOWED/TRANSACTED TH ROUGH THIS BANK ACCOUNT. (V) COPIES OF FINANCIAL STATEMENT OF THE COMPANY OWNED BY SHRI JAGJIT SINGH GABHA AS ONE PERSON COMP ANY NAMELY QUICK FOREX TRANSFER LTD FOR THE PERIOD ENDI NG 31.03.2013 & 31.08.2014 HAVE ALSO BEEN FURNISHED. T HESE FINANCIAL STATEMENTS ESTABLISHED BEYOND DOUBT THAT SHRI JAGJIT SINGH GABHA WAS HAVING INCOME SO AS TO DEPOS IT THE SHARE APPLICATION MONEY. THE FINANCIAL CAPACITY AND CAPABILITY IS PROVED. THE COMPANY WAS OWNED BY HIM IS ENGAGED IN THE ACTIVITY OF MONEY TRANSFER AND EXCHA NGE BUREAU. IT IS SUBMITTED THAT THE ENTIRE FUNDS HAVE COME FROM LONDON IN THE ACCOUNT OF THE ASSESSEE. THUS THE ASS ESSEE HAS DISCHARGED HIS ONUS OF PROVING THE GENUINENESS OF THE SHARE APPLICATION MONEY. IN THE FACTS AND CIRCUMSTANCES THERE WAS NO CASE EITHER WITH THE LEARNED ASSESSING OFFICER FOR MAKIN G THE ADDITION OR WITH THE LEARNED CIT(A) FOR CONFIRMING THE SAME. THE ADDITION WAS MADE BY THE LEARNED ASSESSIN G OFFICER AS HE TOTALLY FAILED TO APPRECIATE THE FACT S OF THE CASE. IT IS WORTHWHILE TO QUOTE ON THE ORDER OF THE LEARNED ASSESSING OFFICER AS WHY HE REJECTED THE SHARE APPL ICATION MONEY RECEIVED, THE ASSESSEE HAS NOT FILED ANY EVID ENCE REGARDING HIS WIFE 3. PROVISIONS OF SECTION 68 ARE NOT APPLICABLE: - IT IS SUBMITTED THAT IN PARA 5.2 THE LEARNED ASSESS ING OFFICER HAS REFERRED TO THE PROVISIONS OF SECTION 6 8 AND PROVISION INSURED BY FINANCE ACT, 2012. AS PER THIS PROVISION THE ASSESSEE IS REQUIRED TO OFFER EXPLANA TION ABOUT THE NATURE AND SOURCE OF THE PERSON MAKING THE SHAR E APPLICATION MONEY. THIS IS APPLICABLE ONLY IN CASE THE PERSON MAKING THE SHARE APPLICATION MONEY IS A RESI DENT. BUT THE LEARNED ASSESSING OFFICER CITING THIS PROVI SO AND ALSO REFERRING TO A DECISION OF HON'BLE ANDHRA PRAD ESH HIGH COURT IN THE CASE OF GAYATRI ASSOCIATE VS. INCOME T AX ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 10 OFFICER (2014) 41 TAXMANN.COM 526 HAS CONCLUDED THAT THE ASSESSEE HAS FAILED TO COMPLY WITH THIS PROVISO AND HAS MADE THE ADDITION. IN THIS REGARD IT IS SUBMITTED THAT FIRSTLY THIS PR OVISO IS NOT APPLICABLETO THE CASE OF THE ASSESSEE AS THE SHARE APPLICANT SHRI JAGJIT SINGH GABHA IS A NONRESIDENT. IN SUPPORT OF THIS COPY OF PASSPORT OF SHRIJAGJIT SING H GABHA HAS BEEN FURNISHED. THE PROVISO TO SECTION 68 AS CI TED ABOVE IS APPLICABLE ONLY IN CASE THE SHARE APPLICAN T (PERSON) IS A RESIDENT. SECONDLY WITHOUT ADMITTING HIS APPLICABILITY OF THIS PROVISO IT IS SUBMITTED THAT THE ASSESSEE HAS SUCCESSFULLY ESTABLISHED THE SOURCE OF INCOME IN THE HANDS OF SHRI JAGJIT SINGH GABHA ALSO BY PRO DUCING COPIES OF FINANCIAL STATEMENTS OF THE COMPANY OWNED BY HIM I.E. QUICK FOREX TRANSFER LTD. THUS THE ASSESSE E HAS ALSO MADE COMPLIANCE OF PROVISO TO SECTION 68. IN V IEW OF THIS IT IS SUBMITTED THAT THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER HAS ERRONEOUSLY CONFIRMED BY THE LEARNED CIT(A) DESERVES TO BE DELETED. 4. FAVBOURABLE CASE LAWS: - THE ASSESSEE FURTHER PLACES RELIANCE ON THE FOLLOWING DECISIONS OF THE WHEREIN IN SIMILAR CIRCUMSTANCES SHARE APPLICATION MONEY HAS BEEN ACCE PTED AS GENUINE AND ADDITIONS MADE BY THE REVENUE WERE DELETED: - (I) CIT VS. BHAVAL SYNTHETICS (2013) 84 DTR 449 (RAJ) THE LEARNED COUNSEL FOR THE RESPONDENT-ASSESSEE SUB MITS THAT THE QUESTION AS FORMULATED DOES NOT EVEN ARISE IN THIS CASE BECAUSE IT REMAINS SETTLED WITH THE CONSISTENT DECI SIONS OF THE COURTS THAT EVEN IN CASE OF DOUBT ABOUT SUBSCRIBERS TO THE INCREASED SHARE CAPITAL, THE AMOUNT OF SHARE CAPITA L CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE COMPANY. THE LEARNED COUNSEL HAS REFERRED TO THE DECISION IN THE CASE OF SHREE BARKHA SYNTHETICS PVT. LTD (SUPRA) WHEREIN THIS COURT HAS NOTICED THAT IN STELLER'S CASE [(2001) 251 ITR 263],THE HON'BLE SUPREME COURT HAS AFFIRMED THE VIEW OF DELHI HIGH COURT IN THE CASE OF CIT VS. STELLAR INVESTMENT LIMITED :(1991) 192 ITR 287 (DEL.) THAT READS AS UNDER :- ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 11 'IT IS EVIDENT THAT EVEN IF IT BE ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL WERE NOT GENUINE, NEVERTHELESS, UNDER NO CIRCUMSTANCES, CAN THE AMOUN T OF SHARE CAPITAL BE REGARDED AS UNDISCLOSED INCOME OF THE AS SESSEE. IT MAY BE THAT THERE ARE SOME BOGUS SHAREHOLDERS IN WH OSE NAMES SHARES HAD BEEN ISSUED AND THE MONEY MAY HAVE BEEN PROVIDED BY SOME OTHER PERSONS. IF THE ASSESSMENT O F THE PERSONS WHO ARE ALLEGED TO HAVE REALLY ADVANCED THE MONEY IS SOUGHT TO BE REOPENED, THAT WOULD HAVE MADE SOME SE NSE BUT WE FAIL TO UNDERSTAND AS TO HOW THIS AMOUNT OF INCR EASED SHARE CAPITAL CAN BE ASSESSED IN THE HANDS OF THE COMPANY ITSELF.' (EMPHASIS SUPPLIED) THE LEARNED COUNSEL FOR THE APPELLANT-REVENUE IS NOT IN A POSITION TO DISPUTE T HE PROPOSITION AFORESAID. IN VIEW OF THE ABOVE, WE HAVE NO HESITATION IN UPHO LDING THE OBJECTION OF THE LEARNED COUNSEL FOR THE RESPON DENT THAT THE QUESTION AS FORMULATED DOES NOT ARISE IN THIS CASE BECAUSE SO FAR AS THE ASSESSEE COMPANY IS CONCERNED, THE AMOUNT RE FERABLE TO THE SHARE APPLICATION CANNOT BE ATTRIBUTED TO IT; A ND CANNOT BE ASSESSED IN ITS HANDS. IT IS SUBMITTED THAT THE ABOVE DECISION OF THE TERR ITORIAL HIGH COURT OF RAJASTHAN IS BASED ON THE SUPREME COU RT DECISION CITED THEREIN. THE POSITION BEING SO THE A DDITION DESERVES TO BE DELETED. (II) CIT VS. SUPERTECH DIAMOND TOOLS PVT LTD. (2015) 229 TAXMAN 62 (RAJASTHAN HIGH COURT) ON THE BASIS OF THIRD PARTY STATEMENT ASSESSING OFFICER MADE ADDITIONS U/S 68 ON ACCOUNT OF SHARE C APITAL. IT WAS HELD THAT THIRD PARTY STATEMENT ALLEGING THE SH ARE CAPITAL PURCHASING COMPANY BEING ENGAGED IN PROVIDI NG ACCOMMODATION ENTRIES WERE MADE BEHIND THE BACK AND ASSESSEE HAD NO OPPORTUNITY FOR CROSS EXAMINING THE SAME. ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL TO D ISPROVE THE GENUINENESS OF THE SHARE APPLICATION MONEY. THE SHARE APPLICANTS PAID THROUGH BANKING CHANNELS HAD PAN NU MBER AND REGISTERED UNDER COMPANIES ACT. THE ADDITIONS W ERE RIGHTLY DELETED BY THE ITAT THE RATIO OF THIS DECISION IS SQUARELY APPLICABLE T O THE FACTS OF THE CASE OF THE ASSESSEE. ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 12 (III) SHRI BARAKHA SYNTHETICS LTD VS ACIT (2006) 15 5 TAXMAN 239 (RAJ):- IT HAS BEEN HELD THAT ONCE THE R ECEIPT OF THE CONFIRMATION LETTER FROM THE CREDITOR IS PROVED AND THE IDENTITY AND THE EXISTENCE OF THE INVESTOR HAS NOT BEEN DISPUTED , NO ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY IN THE NAME OF S UCH INVESTOR CAN BE MADE IN THE ASSESSEE'S HANDS. IN RESPECT O F THE SHARE APPLICATION MONEY RECEIVED FROM INVESTORS, THE ASSE SSEE COMPANY HAS ONLY TO PROVETHAT THE EXISTENCE OF THE PERSONS IN WHOSE NAME SHARE APPLICATION IS RECEIVE. NO FURTHER BURDEN IS CAST UPON THE ASSESSEE TO PROVE THAT PERSON HIMSELF HAS INVESTED THE SAID MONEY OR SOME OTHER PERSON MADE INVESTMENT IN HIS NAME. (IV) CIT VS DIVINE LEASING AND FINANCE LTD .299 ITR 268 SC :- THE ASSESSEE HAS TO PRIMA FACIE PROVE THE (1) IDENTIFY OF THE CREDITOR / SUBSCRIBER; (2) THE GENUINENESS OF THE TRANSACTION, NAMELY WHETHER IT HAS BEEN TRANSMITTED THROUGH BANK ING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR / SUBSCRIBER; (4) IF RELEV ANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/ SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONGWITH COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHARE TRANSFER REGISTER ET C. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATI ON BY THE ASSESSEE (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/ SUBSCR IBER FAILS OR NEGLECTS TO RESPOND TO ITS NOTICES; (6) THE ONUS WO ULD NOT STAND DISCHARGED IF THE CREDITOR / SUBSCRIBER DENIES OR R EPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE NOR SHOULD THE A O TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT, WITHOUT MORE, AGAINST THE ASSESSEE; (7) THE AO IS DUTY BOUND TO INVESTIGATE T HE CREDITWORTHINESS OF THE CREDITOR/ SUBSCRIBER, THE G ENUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIATION. IT IS FOR PARLIAMENT TO INTRODUCE LEGISLATION IF THE DUTY PRESENTLY REST ING ON THE DEPARTMENT IS THOUGHT TO BE TOO ONEROUS. THE COURT OUGHT NOT TO TWIST THE LANGUAGE OF A STATUTE TO REMOVE THE BURDE N OF PROOF ALTOGETHER FROM THE DEPARTMENT EVEN THOUGH IT HAS T HE NECESSARY WHEREWITHAL TO DISCHARGE IT. (V) CIT VS STELLER INVESTMENT LTD (2001) 251 ITR 26 3 (SC) :- EVEN IF IT IS ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED CAPITAL WERE NOT GENUINE, UNDER NO CIRCUMSTANCES CO ULD THE AMOUNT OF SHARE CAPITAL BE REGARDED AS UNDISCLOSED INCOME OF THE COMPANY U/S 68. (VI) CIT VS LOVELY EXPORTS (P) LTD (2008) 216 CTR 195 (SC): - EVEN IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM THE ALLEGED BOGUS SHARE HOLDE RS, WHOSE ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 13 NAMES ARE GIVE TO THE AO THEN THE DEPARTMENT IS FRE E TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENT IN ACCORDANCE WI TH LAW BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF ASSESSE E COMPANY. (VII) SMILAX PHARMACEUTICALS LTD ITA NO. 208/JP/2014 DATED 24-04-2016 :- FROM THE MATERIALS AVAILABLE ON RECORD, IT EMERGES THAT THE ASSESSEE DISCHARGED ITS PRIMARY ONUS IN TERMS OF SECTION 68 OF THE ACT. RELYING ON JUDGEMEN T OF ITAT MUMBAI BENCH IN THE CASE OF ITO VS SUPERLINE CONSTR UCTION(P) LTD AND ANOTHER (SUPRA) AND VARIOUS OTHER JUDGEMENT S CITED BY THE ASSESSEE, THE ADDITION IN QUESTION IS DELETED. 5.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF THE LOWER AUTHORITIES. 5.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS GROUND OF APPEAL, THE AO MADE THE ADDITION OF RS. 83.25 LACS U/S 68 OF THE ACT ON THE GROUND T HAT CREDITWORTHINESS OF THE CREDITOR IS NOT PROVED. THE AO NOTED THAT THE I NVESTMENT MADE BY SHRI JAGJIT SINGH AMOUNTING TO RS. 85.23 LACS REMAI NED UNPROVED. IN FIRST APPEAL, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO HOLDING THAT THE ASSESSEE HAS NEITHER OFFERED ANY EXPLANATION IN SUPPORT OF THE GROUNDS RAISED BEFORE HIM NOR FILED ANY SUPPORTING EVIDENCE TO SUPPORT HIS CONTENTION DURING THE COURSE OF HEARING. DURING TH E COURSE OF HEARING, THE LD.AR OF THE ASSESSEE SUBMITTED THAT AT THE TIM E OF ASSESSMENT PROCEEDING, THE SHARE APPLICANT WAS NOT IN INDIA AN D WAS RESIDING IN ABROAD. THEREFORE, THE ASSESSEE COULD NOT PRODUCE T HE BANK STATEMENT. ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 14 NOW THE ASSESSEE HAS OBTAINED ALL THE BANK STATEMEN T VIDE PAPER BOOK PAGES 10 AND 11 AND FURTHER SUBMITTED THAT THE ADDI TIONAL EVIDENCE BEING FURNISHED ARE ONLY OF SUPPORTING AND SUPPLEMENTARY NATURE BUT THESE GO TO THE ROOT OF THE MATTER IN SUPPORT OF THE SHARE APPL ICATION MONEY. THE LD.AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE AD DITIONAL EVIDENCES ARE CRUCIAL FOR THE DISCHARGE OF JUSTICE. DURING THE CO URSE OF HEARING THE LD.AR OF THE ASSESSEE RELIED ON THE CBDT CIRCULAR N O. 05 DATED 20 TH FEB. 1969 (DIRECT TAX ONLINE) WHEREIN IT IS MENTIONED TH AT MONEY BROUGHT INTO INDIA BY NON-RESIDENT FOR INVESTMENT OR OTHER PURPOSES IS NOT LIABLE TO INDIAN INCOME-TAX. THEREFORE, THERE IS NO QUESTI ON OF A REMITTANCE INTO THE COUNTRY BEING SUBJECTED TO INCOME-TAX IN INDIA (PARA 2). IF THE MONEY HAS BEEN BROUGHT INTO INDIA THROUGH BANKING CHANNEL S OR IN THE FORM OF ASSETS LIKE PLANT AND MACHINERY OR STOCK-IN-TRADE, FOR WHICH THE NECESSARY IMPORT PERMITS HAD BEEN OBTAINED, NO QUESTION AT AL L ARE ASKED BY THE ITOS AS TO THE ORIGIN OF THE MONEY OR ASSETS BROUGH T IN (PARA 3). IT IS PERTINENT TO MENTION THAT LD.AR OF THE ASSESSEE REL IED ON THE DECISION OF ITAT DELHI BENCH DATED 12 TH APRIL 2013 IN THE CASE OF RUSSIAN TECHNOLOGY CENTRE (P) LTD. VS DCIT, CIRCLE 13, NE W DELHI (ITA NO.4932, 4933, 5390 & 5391/DEL/2011) WHEREIN THE B ENCH OBSERVED AS UNDER:- ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 15 13IN OUR CONSIDERED OPINION THE CONFLICT BETWEE N THE PROVISIONS IS ONLY WITH REFERENCE TO THE ONUS AND N OT TO THE ISSUE OF TAXABILITY OF INCOME. THE ONUS IS SHIFTED UNDER SS. 68 OR 69 ONLY WITH REFERENCE TO THE INCOME WHICH IS OTHEREWISE TAXABLE IN THE HANDS OF NON-RESIDENT UNDER SECTION 5(2). THEREFORE, THE ISS UE WHETHER THE INCOME OF NON-RESIDENT IS TAXABLE OR NOT IS STILL T O BE DECIDED WITH REFERENCE TO THE PROVISIONS OF SECTION 5(2) AND THE PROVISIONS OF SECTION 68 OR 69 CANNOT ENLARGE THE SCOPE OF SECTION 5(2). WHAT IS NOT TAXABLE UNDER SECTION 5(2) CANNOT BE TAXED UNDER THE PROVIS IONS OF SECTION 68 OR 69. UNDER SECTIONS 5(2), THE INCOME ACCRUING OR ARISING OUTSIDE INDIA IS NOT TAXABLE UNLESS IT IS RECEIVED IN INDIA. SIMI LARLY, IF ANY INCOME IS ALREADY RECEIVED OUTSIDE INDIA, THE SAME CANNOT BE TAXED IN INDIA MERELY ON THE GROUND THAT IT IS BROUGHT IN INDIA BY WAY OF REMITTANCES. REFERENCE CAN BE MADE TO THE JUDGEMENT OF SUPREME C OURT IN THE CASE OF KEHSAV MILLS LTD. (SUPRA). IF SUCH INCOME IS SHO WN IN THE BOOKS OF ACCOUNT THEN IT CANNOT BE TAXED IN INDIA MERELY BEC AUSE THE ASSESSEE IS UNABLE TO PROVE THE SOURCE OF SUCH ENTRY. FOR EXAMP LE, THERE MAY BE APPEARING AN ENTRY OF CASH CREDIT IN THE NAME OF A PERSON OF USA BY WAY OF LOAN RECEIVED THROUGH CHEQUE AND DEPOSITED I N THE BANK ACCOUNT MAINTAINED AT ANY CITY IN USA. SUCH MONEY, BEING RECEIVED OUTSIDE INDIA, CANNOT BE TAXED UNDER SECTION 5(2) U NLESS IT IS PROVED THAT SUCH MONEY IS RELATABLE TO THE INCOME ACCRUED OR ARISING IN INDIA. THEREFORE, THE SAME CANNOT BE TAXED UNDER SECTON 68 MERELY ON THE GROUND THAT ASSESSEE FAILS TO PROVE THE GENUINENESS AND SOURCE OF SUCH CASH CREDIT. THEREFORE, WE ARE OF THE CONSIDERED VI EW THAT THE PROVISIONS OF SECTION 68 OR 69 WOULD BE APPLICABLE IN THE CASE OF NON- RESIDENT ONLY WITH REFERENCE TO THOSE AMOUNTS WHOSE ORIGIN OF SOURCE CAN BE LOCATED IN INDIA. THEREFORE, THE PROVISIONS OF SECTION 68 OR OR 69, IN OUR OPINION, HAVE LIMITED APPLICATION IN THE CASE OF NON- RESIDENT. THE LD.AR OF THE ASSESSEE FURTHER RELIED ON THE HON 'BLE DELHI HIGH COURT JUDGEMENT DATED 15-12-2016 ON THE SIMILAR ISSUE IN THE CASE OF CIT VS RUSSIAN TECHNOLOGY CENTRE (P) LTD. (ITA NO.547, 549 , 555/2013) WHEREIN THE HON'BLE HIGH COURT AFFIRMED THE JUDGEME NT OF THE TRUBUNAL BY HOLDING AS UNDER:- 13. IN VIEW OF THE ABOVE, THIS COURT IS OF THE VI EW THAT THE CONCLUSION OF THE TRIBUNAL IN DELETING THE ADDITIONS MADE CANNOT BE FAULTED. ACCORDINGLY, THE QUESTIONS OF LAW ARE ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 16 ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE A SSESSEE. THE ORDER OF THE TRIBUNAL IS, THEREFORE, AFFIRMED. THE LD.AR OF THE ASSESSEE FURTHER RELIED ON THE DEC ISION OF MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS M/S. PEOP LES GENERAL HOSPITAL (MAIT NO. 27/2008 DATED 27 JUNE 2013) WHEREIN THE H ON'BLE COURT DISMISSED THE APPEALS OF THE REVENUE AS TO THE MAT TER OF PROVING THE IDENTITY AND CREDITWORTHINESS OF THE PERSON PROVI DING SHARE APPLICATION MONEY. THE RELEVANT OBSERVATION OF THE HON'BLE COUR T IS AS UNDER:- 16. THE AFORESAID JUDGEMENT HAS BEEN FOLLOWED BY ALL THE JUDGEMENTS RELIED ON BY THE APPELLANTS RELATES TO T HE PERIOD PRIOR TO THE JUDGEMENT OF LOVELY EXPORTS. AS THE APEX COURT HAS SPECIFICALLY HELD THAT IF THE IDENTITY OF THE PERSON PROVIDING SHARE APPLICATION MONEY IS ESTABLISHED THEN THE BURDEN WAS NOT ON THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE SAID PERSON. THE POSITION O F THE PRESENT CASE IS IDENTICAL. IT IS NOT THE CASE OF ANY OF THE PARTIE S THAT M/S. ALLIANCE INDUSTRIES LIMITED, SHARJAH IS A BOGUS COMPANY OR A NON-EXISTENT COMPANY AND THE AMOUNT WHICH WAS SUBSCRIBED BY THE SAID COMPANY BY WAY OF SHARE SUBSCRIPTION WAS IN FACT THE MONEY OF THE RESPONDENT ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAD EST ABLISHED THE IDENTITY OF INVESTOR WHO HAD PROVIDED THE SHARE SUBSCRIPTION AND IT WAS ESTABLISHED THAT THE TRANSACTION WAS GENUINE THOUGH AS PER CONTENTION OF THE RESPONDENT THE CREDITWORTHINESS OF THE CREDI TOR WAS ALSO ESTABLISHED. IN THE PRESENT CASE, IN THE LIGHT OF T HE JUDGEMENT OF LOVELY EXPORTS (P) LD., WE HAVE TO SEE ONLY IN RESPECT OF THE ESTABLISHMENT OF THE IDENTITY OF THE INVESTOR. THE DELHI HIGH COURT ALSO IN DIVINE LEASING & FINANCE LTD. (SUPRA) CONSIDERING THE SIMI LAR QUESTION HELD THAT THE ASSESSEE COMPANY HAVING RECEIVED SUBSCRIPT ION TO THE PUBLIC/ RIGHTS THROUGH BANKING CHANNELS AND FURNISHED COMPL ETE DETAILS OF THE SHAREHOLDERS, NO ADDITION COULD BE MADE UNDER SECTI ON 68 IN THE ABSENCE OF ANY POSITIVE MATERIAL OR EVIDENCE TO IND ICATE THAT THE SHAREHOLDERS WERE BENAMIDARS OR FICTITIOUS PERSONS OR THAT PART OF THE SHARE CAPITAL REPRESENTED COMPANYS OWN INCOME FROM UNDISCLOSED SOURCES. THE SIMILAR VIEW HAS BEEN TAKEN BY THE HIG H COURTS. 17. AS THE APEX COURT HAS CONSIDERED THE LAW IN LOV ELY EXPORTS (SUPRA) AND IN VIEW OF THE LAW LAID DOWN BY THE APEX COURT , ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 17 WE FIND THAT THE SUBSTANTIAL QUESTIONS FRAMED IN TH ESE APPEALS DO NOT ARISE FOR OUR CONSIDERATION. ACCORDINGLY, ALL THESE APPEALS ARE DISMISSED WITH ORDER AS TO COSTS. LASTLY THE LD.AR OF THE ASSESSEE RELIED ON THE DECI SION OF ITAT HYDERABAD BENCH IN THE CASE OF DCIT, CIRCLE 6,HYD ERABAD VS SHRI MADHUSUDAN RAO (ITA NO.1482/HYD/2014 DATED 18-03-20 15) IN WHICH THE BENCH DISMISSED THE APPEAL OF THE REVENUE BY HO LDING AS UNDER:- 19. IN VIEW OF THE LEGAL PRINCIPLES AS STATED ABO VE, PROVISIONS OF SECTION 5(2) ARE ALSO NOT APPLICABLE AS THE AMOUNT RECEIVED IS FROM ASSESSEE'S OWN ACCOUNT OUTSIDE IND IA AND NO INCOME HAS ACCRUED OR ARISEN IN INDIA. THESE FUNDS WERE AL SO RECEIVED THROUGH BANKING CHANNEL WITH NECESSARY STATUTORY APPROVALS. THEREFORE, ASSESSEE HAS PROVED THE SOURCE OF RECEIPTS AND DISC HARGED THE ONUS. IT IS THE REVENUE WHICH FAILED IN PROVING THAT THIS AM OUNT IS UNEXPLAINED INCOME OF ASSESSEE. IN VIEW OF THESE FACTS OF THE C ASE, WE ARE OF THE OPINION THAT VARIOUS CASE LAWS RELIED ON BY THE REV ENUE DOES NOT APPLY AND THEY ARE CLEARLY DISTINGUISHABLE. IN VIEW OF TH IS, WE HAVE NO HESITATION IN UPHOLDING THE ORDER OF THE CIT(A) AN D REJECTING THE REVENUES GROUNDS. 20. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. IT IS ALSO PERTINENT TO MENTION THAT THE ASSESSEE H AS FILED THE FOLLOWING DOCUMENTS IN SUPPORT OF HIS CONTENTIONS. (I) COPY OF DRIVING LICENSE OF SHRI JAGJIT SINGH (PBP 1- 2) (II) COPY OF PASSPORTOF SHRI JAGJIT SINGH (PBP 3-7) (III) CONFIRMATION OF AMOUNT OF RS. 85.23 LACS WITH RESPE CT TO SHARE APPLICATION MONEY (PBP 8) (IV) BANK STATEMENT OF SHRI JAGJIT SINGH GHABA FOR THE PERIOD31-03-2012 TO 31-03-2014 SHOWING RELEVANT TRANSACTIONS WITH HDFC BANK, MANSARAVAR GARDEN IN A/C NO. 15621060000188 (PBP 10-11) ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 18 (V) BANK STATEMENT OF M/S. SHREENATH HERITAGE LIQUOR PVT. LTD SHOWING THE RELEVANT TRANSACTIONS (PBP 12- 18) (VI) FINANCIAL STATEMENT OF M/S. QUICK FOREX TRANSFER LIMITED BEING ONE PERSON COMPANY FOR THE PERIOD 31- 08-2013 AND 31-08-2014. SHRI JAGJIT SINGH GHABAD IS THE DIRECTOR OF THIS COMPANY. (PBP 19-27 & 28-37) IT IS NOTED FROM THE AVAILABLE RECORDS THAT SHRI JA GJIT SINGH GABHA R/O OF 55, WOODLANDS ROAD, SOUTHHALL UBI, 1 EJ, LONDON HAV ING PASSPORT NO. 508223849 HAD PAID A SUM OF RS. 85.23 LACS THROUGH HIS SAVING BANK A/C NO; 15621060000188 HELD WITH HDFC BANK, MANSAROVAR GARDEN, NEW DELHI TOWARDS SHARE APPLICATION MONEY TO M/S. SHREE NATH HERITAGE LIQUOR PVT LTD. HAVING ITS REGISTERED OFFICE AT G-1 /100, RIICO, INDUSTRIAL AREA, JHUNJHUNU (RAJ) DURING THE ASSESSMENT YEAR 20 13-14. THESE PAYMENTS WERE MADE TO THE ASSESSEE COMPANY THROUGH RTGS (PBP 8). IT IS NOTED THAT MONEY HAD BEEN BROUGHT INTO INDIA THR OUGH BANKING CHANNEL. TAKING INTO CONSIDERATION THE ABOVE FACTS, CIRCUMST ANCES OF THE CASE, CASE LAWS RELIED ON BY THE ASSESSEE (SUPRA) AND THE CBDT CIRCULAR NO. 05 DATED 20-02-1969, WE FIND THAT THE MONEY BROUGHT IN TO INDIA BY NON- RESIDENTS FOR INVESTMENT OR OTHER PURPOSES IS NOT LIABLE TO INDIAN INCOME TAX. IN THIS VIEW OF THE MATTER, THE GROUND NO. 2 O F THE ASSESSEE IS ALLOWED. ITA NO.279/JP/2018 SHREENATH HERITAGE LIQUOR PVT. LTD. VS ACIT,CIRCLE ,JHUNJHUNU 19 6.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19-07-201 8. SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19 /07/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT SHREENATH HERITAGE LIQUOR PVT LTD., JHUNJHUNU 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE , JHUNJHUNU 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.279 /JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR