ITO 3(2)(4), MUMBAI V. PUSHPAK HOSIERIES (EXPORTS) P. LTD, MUMBAI

ITA 2813/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4087 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 19-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKEYAN
• Assessee Lawyers: S C TIWARI
• Keywords: Reopening of assessment; Bogus purchase; Unexplained cash credit; Bogus Share capital; Search and seizure; Opportunity of being heard; Diversion of income; Accommodation entries; Onus to prove; Reason to believe; Set aside
• Section: 143(3); 142(1); 143(1); 143(2); 64; 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAVISH SOOD, JM ITA NO.2813/MUM/2017 (ASSESSMENT YEAR: 2011-12) ITO - 3(2)(4) ROOM NO.673, 6 TH FLOOR AAYKAR BHAWAN, M.K. ROAD MUMBAI-400 020 VS. M/S. PUSHPAK HOSIERIES (EXPORTS) PRIVATE LIMITED 17 TH FLOOR, 210-B WING MITTAL CHAMBERS, NARIMAN POINT MUMBAI-400 021 PAN/GIR NO. AAACP3347G ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI ABI RAMA KARTIK E Y A N RESPONDENT BY : S.C. TIWARI & MS. RUTUJA N. PAWAR DATE OF HEARING : 19.12.201 8 DATE OF PRONOUNCEMENT : 11 .03.2019 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-8, MUM BAI (LD.CIT(A) FOR SHORT) DATED 27.01.2017 AND PERTAINS TO THE ASS ESSMENT YEAR (A.Y.) 2011-12. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.3,20,00,00 0/- MADE U/S. 68 OF THE I.T.ACT, 1961 ON ACCOUNT OF RECEIPT OF SHARE APPLICATION MONEY AND SHARE PREMIUM WITHOUT APPRECIATING THE FACT THA T THE ASSESSEE HAD FAILED TO ESTABLISH THE GENUINENESS AND CREDITW ORTHINESS OF THE INVESTMENT MADE BY THE SHARE APPLICANTS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.3,20,00,00 0/- MADE U/S 68 OF THE I.T.ACT, 1961 ON ACCOUNT OF RECEIPT OF SHARE APPLICATION MONEY AND SHARE PREMIUM WITHOUT APPRECIATING THE FACT THA T SPECIFIC 2 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. INFORMATION WAS RECEIVED FROM DGIT (INV.)., MUMBAI THAT THE ALLEGED PARTIES BELONGING TO PRAVIN JAIN GROUP HAD CONFESSE D TO PROVIDING ACCOMMODATION ENTRIES WITHOUT CONDUCTING ANY BUSINE SS ACTIVITY AND THAT THE ASSESSEE WAS ONE OF THE BENEFICIARY OF SUC H ACCOMMODATION ENTRIES. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.3,20,00,00 0/- MADE U/S. 68 OF THE I.T.ACT, 1961 ON ACCOUNT OF RECEIPT OF SHARE APPLICATION MONEY AND SHARE PREMIUM WITHOUT APPRECIATING THE FACT THA T THE ASSESSEE HAD FAILED TO JUSTIFY THE ISSUE PRICE OF SHARES AND PREMIUM RECEIVED. 4. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE REST ORED. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3. BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE COMPANY HAS BEEN ENGAGED IN THE BUSINE SS OF MANUFACTURER OF COTTON SPORTS SOCKS. HOWEVER, THE F ACTORY WHERE MANUFACTURING WAS CARRIED OUT WAS SOLD IN THE YEAR 2007 AND THE ASSESSEE HAS NOT CARRIED OUT ANY BUSINESS DURING THE YEAR UN DER CONSIDERATION AND HAS NOT SHOWN ANY INCOME IN THE PROFIT & LOSS ACCOU NT. THE ASSESSEE HAS CLAIMED NOMINAL EXPENSES ON ACCOUNT OF BANK CHARGES , GENERAL EXPENSES AND AUDIT FEES TO THE P&L ACCOUNT AND HAS SHOWN CUR RENT YEARS LOSS OF RS. 3,915/-. THE APPELLANT HAD FILED THE RETURN OF INCOME ON 30/ 09/2007 DECLARING TOTAL INCOME AT TUESDAY. THE RETURN WAS P ROCESSED UNDER SECTION 143(1) OF THE ACT. 3 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. SUBSEQUENTLY, INFORMATION WAS RECEIVED FROM DGIT (I NVESTIGATION), MUMBAI IN RESPECT OF CASES OF BENEFICIARIES OF ACCO MMODATION VIDE LETTER DATED 7/TREE/2014 AND 13/3/2014. ON THE BASIS OF TH E INFORMATION RECEIVED FROM THE DGIT(INV.), MUMBAI IT WAS FOUND T HAT MR. PRAVEEN JAIN, ONE OF THE LEADING ENTRY PROVIDER OPERATING IN MUMB AI INDULGED IN PROVIDING ACCOMMODATION ENTRIES LIKE BOGUS PURCHASE , SALE, UNSECURED LOANS, SHARE CAPITAL, ETC. A SEARCH AND SEIZURE ACT ION WAS CARRIED ON MR. PRAVEEN KUMAR JAIN GROUP ON 1/10/2030. EVIDENCES CO LLECTED AND STATEMENTS OF VARIOUS PERSONS RECORDED INCLUDING TH AT OF MR. PRAVEEN JAIN DURING THE SEARCH ESTABLISHED THE MODUS OPERANDI AN D LEAD TO SELECTION OF ACCOMMODATION ENTRIES. IT WAS FOUND THAT THE APPELL ANT COMPANY WAS ONE OF THE BENEFICIARIES OF THE ACCOMMODATION ENTRIES I N THE NATURE OF BOGUS INVESTMENTS/SHARE APPLICATION MONEY AND HAD CLAIMED ACCOMMODATION ENTRIES AMOUNTING TO RS. 3.20 CRORES FROM THE FOLLO WING PARTIES DURING THE UNDER CONSIDERATION CONTROLLED AND MANAGED AND MR. PRAVEEN KUMAR JAIN. NAME OF THE CONCERN CONTROLLED & MANAGED BY PRAVEEN KUMAR JAIN AMOUNT OF PAYMENT (RS.) CASPER ENTERTAINMENT PVT.LTD. 45,00,000 CASPER ENTERTAINMENT PVT.LTD. 5,00,000 CASPER ENTERTAINMENT PVT.LTD. 75,00,000 OLIVE OVERSEAS-PVT.LTD. 45,00,000 TRIANGULAR INFOCOM LTD. 50,00,000 TRIANGULAR INFOCOM LTD. 35,00,000 TRIANGULAR INFOCOM LTD. 15,00,000 VENGUARD JEWELS LTD. 50,00,000 3,20,00,000 4 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. FROM THE ABOVE FACTS AND ON PERUSAL OF THE INFORMAT ION THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT INCOME CHARGEABL E TO TAX HAD ESCAPED ASSESSMENT FOR THE YEAR UNDER CONSIDERATION TO THE INDENT OF RS. 3.20 CRORES AND ACCORDINGLY THE CASE WAS REOPENED U/S. 1 47 OF THE ACT AFTER DULY RECORDING THE REASONS. SUBSEQUENTLY, THE EARNE D ASSESSING OFFICER ISSUED NOTICE U/S 146 OF THE ACT ON 18.03.2015. THE APPELLANT IN RESPONSE TO THE SAID NOTICE, VIDE ITS LETTER DATED 15.08.201 5 REQUESTED TO CONSIDER THE RETURN FILED ON 30.09 .2011 AS RETURN FILED IN PURSUANCE TO NOTICE ISSUED U/S 148. IN THE SAID LETTER APPELLANT ALSO R EQUESTED THE ASSESSING OFFICER TO PROVIDE THE REASONS TAR REOPENING THE AS SESSMENT. THE SAME WAS PROVIDED TO THE APPELLANT ALONG WITH NOTICE U/S.142 (1) DATED 9/9/2015. THE APPELLANT OBJECTED TO THE REOPENING RIDE LETTER DATED 20/1012015 WHICH WAS DISPOSED-OFF BY THE ASSESSING OFFICER VID E ORDER DATED 26/10/2015 AND ALSO PROVIDED THE APPELLANT WITH THE COPIES OF STATEMENT AT MR. PRAVEEN KUMAR JAIN ALONG WITH OTHER RELEVANT MATERIAL RECEIVED. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICES NO T 143(2) AND 142(1) ALONG WITH QUESTIONNAIRE AND CALLING FOR VARIOUS DE TAILS AND DOCUMENTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER PROVIDED THE APPELLANT WITH THE COPY OF STATEMENT O F MR. PRAVEEN KUMAR JAM ALONG WITH OTHER RELEVANT DOCUMENTS TO AFTER CO MMENTS AND INFORMATION ON LIST OF BOGUS INVESTMENT/SHARE APPL ICATIONS CONTROLLED AND MANAGED BY MR. PRAVEEN KUMAR JAM AND ALSO TO SH OW CAUSE AS TO 5 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. WHY THE ENTRIES OBTAINED FROM THE PARTIES AMOUNTING TO RS. 3.20 CRORES SHOULD NOT BE TREATED AS BOGUS AND NOT GENUINE ENTR IES. IN RESPONSE, THE APPELLANT VIDE LETTER DATED 4/11/2015 MADE SUBMISSI ONS WHICH WAS CONSIDERED BY THE ASSESSING OFFICER BUT THE SAME WA S NOT ACCEPTABLE. THE ASSESSING OFFICER STATED THAT THE INFORMATION WAS S PECIFICALLY RECEIVED FROM THE INVESTIGATION WING ALONG WITH THE LIST OF ASSES SEE WHO HAVE BEEN ONE OF THE BENEFICIARIES OF THE ACCOMMODATION ENTRIES A ND THE NAME OF THE APPELLANT COMPANY WAS ALSO MENTIONED IN THE LIST TH AT WAS PROVIDED TO THE APPELLANT ALONG WITH ORDER DISPOSING OBJECTIONS TO REOPENING OF ASSESSMENT. FURTHER, THE NAMES OF THE PARTIES IN W HOSE NAME THE ACCOMMODATION ENTRIES WERE RECORDED WERE ALSO MENTI ONED IN THE LIST AND THE APPELLANT WAS ALSO ONE OF THE BENEFICIARIES WHO HAD BEEN MAKING ACCOMMODATION ENTRIES IN THE NATURE OF BOGUS PURCHA SE AND/OR INVESTMENT AND/OR SHARE APPLICATION MONEY, ETC. ALS O, MR. PRAVEEN KUMAR JAIN HAD ADMITTED OF PROVIDING ACCOMMODATION ENTRIE S THROUGH ITS COMPANIES MENTIONED IN THE STATEMENT IN WHICH THE A PPELLANT WAS ONE OF THE ENTITIES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT W AS ALSO OBSERVED THAT ACCOMMODATION ENTRIES FROM M/S. CASPER ENTERTA INMENT PVT. LTD., M/S. OLIVE OVERSEAS PVT.LTD. AND M/S. TRIANGULAR IN FOCOM LTD, THE CONCERNS MANAGED AND CONTROLLED BY MR. PRAVEEN KUMA R JAIN ARE REFLECTED IN THE BOOKS OF THE APPELLANT. THE BALANCE SHEET AS ON 31/3/2011 SHOWED 6 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. INCREASED SHARE CAPITAL BEING RECEIPT OF SHARE APPL ICATION MONEY OF RS. 64 LAKHS ON ACCOUNT OF 64,000 SHARES ALLOTTED AT FACE VALUE OF 100/-PER SHARE. THERE WAS ALSO INCREASE IN SHARE PREMIUM AMO UNT OF RS. 2.56 CRORES AT THE RATE OF RS 400/- PER SHARE. THUS THE ASSESSING OFFICER OBSERVED THAT THE APPELLANT HAD NEITHER CONDUCTED A NY BUSINESS EITHER DURING THE YEAR UNDER CONSIDERATION NOR IN THE IMME DIATELY PRECEDING YEAR, HOWEVER, STILL IT HAD RECEIVED SUBSTANTIAL AM OUNT OF SHARE APPLICATION MONEY AND SHARE PREMIUM. ONGOING THROUGH THE BALANC E SHEET AS ON 31/3/2011, IT WAS OBSERVED THAT THE BASIC AND DILUT ED, EARNINGS PER SHARE BY THE APPELLANT COMPANY WAS A NEGATIVE FIGURE. AS PER PROFIT AND LOSS ACCOUNT, THE APPELLANT HAD NOT SHOWN ANY RECEIPT/SA LE/TURNOVER AND HAD DECLARED LOSS. HENCE, THE APPELLANT WOULD NOT HAVE COMMANDED HIGH SECURITY PREMIUM PER SHARE. THE APPELLANT ALSO FAIL ED TO ESTABLISH THE IDENTITY AND GENUINENESS OF THE TRANSACTION FOR ACC EPTING SUCH HIGH PREMIUM AMOUNT RECEIVED OF RS. 400/-IF THE FACE VAL UE OF THE SHARE WAS RS. 100/-. THE APPELLANT ON JUSTIFICATION OF ITS CLAIM OF PRI CE ISSUE OF SHARES PREMIUM RECEIVED MADE SUBMISSION BY LETTER DATED 4/ 11/2015 BUT FAILED TO SUBMIT THE RELEVANT DOCUMENTS IN TERMS OF BOARD RESOLUTION FOR ISSUE OF SHARES, AT CETERA. HENCE, THE AO HELD THAT GENUINEN ESS AND CREDIT WORTHINESS OF THE TRANSACTIONS COULD NOT BE PROVED. AO FURTHER HELD THAT SINCE THE APPELLANT HAD CLAIMED TO HAVE MADE IT A T RANSACTION IT WAS THE 7 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. ONUS OF THE APPELLANT TO PROVE THE GENUINENESS AND CREDITWORTHINESS WHICH THE APPELLANT FAILED TO DISCHARGE. MOREOVER, IT WAS CLEAR AND WELL ESTABLISHED THAT M/S. CASPER ENTERTAINMENT PVT. LTD ., M/S. OLIVE OVERSEAS PVT.LTD. AND M/S. TRIANGULAR INFOCOM LTD, WERE THE CONCERNS MANAGED AND CONTROLLED BY MR. PRAVEEN KUMAR JAIN DID OT ENGAGED IN ANY GENUINE BUSINESS ACTIVITY BUT WAS ENGAGED ONLY IN PROVIDING ACCOMMODATION ENTRIES. THE APPELLANT HAD ALSO FAILED TO EXPLAIN T HE GENUINENESS OF TRANSACTIONS MADE. IN VIEW OF THE FACTS AND CIRCUMSTANCES, THE ASSESSI NG OFFICER CONCLUDED THAT THE SHARE ALLOTMENT MONEY AND SHARE PREMIUM SHOWN IN THE BOOKS OF THE ACCOUNTS OF THE APPELLANT COMPANY WAS NOT ESTABLISHED AS GENUINE AND THERE WAS SUBSTANTIAL UNDER REPORTIN G OF INCOME AND DIVERSION OF INCOME AND CONSEQUENT EVASION OF TAXES BY THE APPELLANT COMPANY. THE APPELLANT COMPANY ALSO FAILED TO SATIS FACTORILY EXPLAIN THE NATURE AND SOURCES OF THE TRANSACTION AND HAD NOT D ISCHARGE THE ONUS TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF ITS C LAIM. FURTHER, THE ASSESSING OFFICER STATED THAT THE APPELLANT HAD ACT UALLY OBTAINED ACCOMMODATION ENTRIES FROM M/S. CASPER ENTERTAINMEN T PVT. LTD., M/S. OLIVE OVERSEAS PVT.LTD. AND M/S. TRIANGULAR INFOCOM LTD, THE CONCERNS MANAGED AND CONTROLLED BY MR. PRAVEEN KUMAR JAIN AM OUNTING TO RS.3.20 CORES AND, THEREFORE, THE SAME WAS TREATED AS BOGUS AND ACCORDINGLY BROUGHT TO TAX UNDER SECTION 68 OF THE ACT. 8 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. 3.8 THE ASSESSING OFFICER COMPLETED THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 147 OF THE ACT AND PASSED ORDER DATED 26/11/2015 ASSESSING THE TOTAL INCOME AT RS.1,91,67,520/-. 4. UPON ASSESSEES APPEAL LD. CIT(A) UPHELD THE VAL IDITY OF REOPENING, BUT DELETED THE ADDITION ON MERITS BY HOLDING THAT ASSESSEE HAS DISCHARGED ITS ONUS. 5. LD. CIT(A) HAS HELD AS UNDER: 5.2.5 IT IS NOTED THAT DURING THE COURSE OF ORI GINAL ASSESSMENT PROCEEDINGS, THE APPELLANT FILED LETTER DATED 04/11 /2015 WHEREBY FOLLOWING INFORMATION W.R.T. ABOVE SHAREHOLDERS WERE PROVIDED : A) COPY OF ACKNOWLEDGMENT OF RETURN OF INCOME FILED BY THE ABOVE SHAREHOLDERS; B) COPY OF AUDITED FINANCIALS FOR THE YEAR ENDED 3 1.03.2011 OF THE ABOVE SHAREHOLDERS. C) CERTIFICATE OF INCORPORATION ISSUED BY REGISTRA R OF COMPANIES FOR THE ABOVE SHAREHOLDERS; D) COPY OF RELEVANT EXTRACTS OF BANK STATEMENT SU BMITTED BY THE ABOVE SHAREHOLDERS EVIDENCING AMOUNT PAID AND SOURCE OF S UCH INVESTMENTS; E) AFFIDAVIT SWORN ON OATH BY THE ABOVE SHAREHOLDER S CONFIRMING THE SUBSCRIPTION OF SHARE; F) CONFIRMATION BY THE ABOVE SHAREHOLDERS FOR PAYME NT MADE FOR ISSUE OF EQUITY SHARES BY THE ASSESSEE COMPANY. 5.2.6 NONE OF THESE EVIDENCES OR FACTS HAVE BEEN DISPUTED BY THE ASSESSING OFFICER NOR HAS HE DISPROVED THE VALIDITY OF THE SA ME. ONCE IT IS ACCEPTED BY THE ASSESSING OFFICER THAT BOOKS OF ACCOUNT OF SHAR E APPLICANTS ARE AVAILABLE AND GENUINE AND IT IS NOT DISPUTED THAT THE IMPUGNE D AMOUNT WAS TRANSFERRED TO THE APPELLANT COMPANY TROUGH BANKING CHANNEL, THE APPELLANT HAS DISCHARGED ONUS TO ESTABLISH IDENTIFY AND CAPAC ITY TO PAY ON PART OF THE CREDITOR. IN THE HANDS OF THE APPELLANT, THE AMOUNT AND SOURCE BECOMES EXPLAINED. THE OVERALL CIRCUMSTANCES AND THE BACKGR OUND OF PKJ GROUP OF COMPANIES MAY BE EXTREMELY SUSPICIOUS BUT IT IS TRI TE LAW THAT SUSPICION OF THE HIGHEST DEGREE CANNOT TAKE PLACE OF EVIDENCE. T HE ONLY EVIDENCE AVAILABLE ON RECORD IS THAT CEPL, TIL, VJL & OOPL E XIST, THAT THE IMPUGNED AMOUNT CAME FROM THEIR AUDITED BOOKS OF ACCOUNTS TH ROUGH BANKING CHANNELS AND WAS DULY RECORDED IN THE APPELLANTS A UDITED ACCOUNTS. UNDER THE CIRCUMSTANCES, THERE IS NO BASIS FOR TREATING T HIS AMOUNT AS UNEXPLAINED CREDIT IN THE HANDS OF THE APPELLANT. 9 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. 6. IN THIS REGARD LEARNED CIT(A) PLACED RELIANCE UP ON SEVERAL CASE LAWS INCLUDING THAT FROM HONBLE APEX COURT IN THE CASE OF P. MOHANKALA 291 ITR 278 AND KALE KHAN MOHD. HANIF 50 ITR 1. 7. HE FURTHER OBSERVED THAT OPPORTUNITY WAS NOT GIV EN TO THE ASSESSEE TO CROSS EXAMINE SHRI PRAVEEN KUMAR JAIN. HE CONCLU DED AS UNDER: 5.2.16 . IN THE INSTANT CASE ALSO, THE ASSESSING OFFICER H AS NOT POINTED OUT ANY SPECIFIC DEFECTS IN THE ACCOUNTS OF THE APPELLA NT. HIS DECISION IS MERELY BASED ON THE APPELLANT TAKING SHARE APPLICAT ION MONEY FROM PKJ GROUP COMPANIES. THERE IS NO OTHER INCRIMINATIN G EVIDENCE AGAINST THE APPELLANT. IN THE FACTS AND CIRCUMSTANCES OF TH E CAE AND IN VIEW OF THE RATIOS OF JUDGMENTS CITED ABOVE, THE ADDITION O F RS.3.20 CRORES U/S 68 IS DELETED. THIS GROUND IS DELETED. 8. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEAL BE FORE US. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE HAVE ALSO GONE THROUGH THE PRECEDENTS RELIED UPON BY THE PARTIES. LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE UPON SEVERAL CASE LAWS INC LUDING THAT FROM HONBLE BOMBAY HIGH COURT FOR THE PROPOSITION THAT IF THE ASSESSEE HAS PROVIDED THE NECESSARY FORMATION, THE ONUS OF THE A SSESSEE IS DISCHARGED AN ADVERSE INFERENCE AGAINST THE ASSESSEE SHOULD NO T BE TAKEN. 9. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT IN THE PRESENT CASE AO HAS CLEARLY HELD THAT THE CREDITWOR THINESS, AND GENUINENESS OF THE TRANSACTIONS AND THE SHARE APPLI CATION IS NOT PROVED. HENCE HE SUBMITTED THAT AOS ORDER SHOULD BE CONFIR MED. 10 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. 10. UPON CAREFUL CONSIDERATION WE FIND THAT LD. CIT (A) HAS MENTIONED THAT AO HAS NOT DISPUTED/ DISPROVED THE VALIDITY OF DOCUMENTS SUBMITTED BY THE ASSESSEE. THAT AO HAS ACCEPTED THE BOOKS OF ACCOUNT OF SHARE APPLICANTS AS GENUINE AND HAS NOT DISPUTED ANYTHING . HE HAS HELD THAT THE ADDITION IS NOT SUSTAINABLE. THIS HE HAS HELD D ESPITE OBSERVING THAT OVERALL CIRCUMSTANCES AND BACKGROUND AND EXTREMELY SUSPICIOUS AND EVEN AFTER REFERRING TO HONBLE APEX COURT DECISION IN P . MOHANKALA AND KALE KHAN MOHD. HANIF, WHICH ARE ADMITTEDLY IN FAVOUR OF REVENUE. 11. IN THIS REGARD WE NOTE THAT THE AO HAS UNEQUIVO CALLY HELD THAT FROM THE EXAMINATION OF THE SUBMISSIONS HE IS NOT SATISF IED ABOUT THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S OF THE SHARE APPLICANTS. HENCE HE HAS MADE THE ADDITION U/S 68 O F THE I.T.ACT. 12. WE ARE OF THE CONSIDERED OPINION THAT LD. CIT(A ) HAS CLEARLY NOT APPRECIATED THE DOCUMENTS BROUGHT ON RECORD BY THE ASSESSEE. 13. THE DOCUMENTS SUBMITTED BY THE ASSESSEE SHOW TH AT THE SHARE APPLICANTS ARE CONCERNS PRIMARILY ENGAGED CIRCULATI ON OF BOGUS SHARE CAPITAL & PREMIUM. THEIR BALANCE SHEET COMPRISES OF HUGE AMOUNT OF SHARE CAPITAL AND SHARE PREMIUM ON THE LIABILITY SI DE. AND ON THE ASSET SIDE THEY SHOW INTER CORPORATE DEPOSIT OF SIMILARLY HUGE AMOUNT WITHOUT ANY DETAIL OF THEREOF. THE PROFIT/LOSS DECLARED BY THESE SHARE APPLICANTS IS EXTREMELY MINIMAL. BY NO STRETCH OF IMAGINATION, TH E BUSINESS OF THE ASSESSEE COMMANDS THE CREDITWORTHINESS FOR GRANTING SUCH A HUGE AMOUNT 11 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. OF SHARE CAPITAL AND SHARE PREMIUM. WE FURTHER NOTE THAT THE SHARE APPLICANTS COMPANY HAVE ALSO COMMON DIRECTORS, WHI CH FURTHER PROVE THAT THEY ARE PART OF A GROUP OF BOGUS CAPITAL CIRCULATI ON. REFERENCE IN THIS REGARD MADE TO SHRI MANISH JAIN WHO IS COMMON DIRE CTOR IN SEVERAL OF THE SHARE APPLICANTS. LD. CIT(A) HAS EVEN DRAWN ADVERS E INFERENCE THAT AO HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO CR OSS EXAMINE SHRI PRAVEEN KUMAR JAIN. WE ARE TOTALLY AMAZED BY THIS O BSERVATION OF THE LD. CIT(A). IN FACT, IN ONE OF THE SHARE APPLICANTS THA T IS OLIVE OVERSEAS PVT.LTD, IT IS SHRI PRAVEEN JAIN HIMSELF AS DIRECTOR WHO HAS GIVEN THE AFFIDAVIT OF THE DOCUMENTS SUBMITTED AND THE CONFIRMATION OF SHA RE APPLICATION WHICH THE ASSESSEE HAS HIMSELF SUBMITTED BEFORE THE AO. H ENCE MAKING A CASE THAT ASSESSING OFFICER SHOULD HAVE GIVEN AN OPPORTU NITY TO CROSS EXAMINE THE PERSON WHO IS HIMSELF ASSESSEES WITNESS IS VER Y BIZARRE AND STRANGE. IN THESE CIRCUMSTANCES IN OUR CONSIDERED OPINION LD . CIT(A) HAS TOTALLY ERRED AND HAS MISLED HIMSELF IN APPRECIATING THE DO CUMENTS ON RECORD. 14. IN THE CASE OF KOPURCHAND SHRIMAL. HONBLE APE X COURT HAS HELD THAT IT IS THE DUTY AS WELL AS RESPONSIBILITY OF TH E APPELLATE AUTHORITY TO CORRECT THE ERRORS IN THE ORDERS OF THE AUTHORITIES BELOW AND REMIT THE MATTER FOR THE ADJUDICATION WITH OR WITHOUT DIRECTI ONS IF NECESSARY UNLESS PROHIBITED BY LAW. IN FACT LD. CIT(A) HAS EXPOSED HIMSELF TO THE ODIUM OF GIVING A MISLEADING FINDING OF FACT BY PUTTING ON B LINKERS IN CONTRAVENTION 12 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. TO THE HONBLE APEX COURT DECISION IN THE CASE OF S UMATIDAYAL 214 ITR 801 AND DURGA PRASAD MORE 82 ITR 540. 15. IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN O UR CONSIDERED OPINION LD. CIT(A) HAS NOT AT ALL REFERRED TO THE CONTENTS OF THE DOCUMENTS SUBMITTED BY THE ASSESSEE MUCH LESS APPRECIATED THE SAME. IT IS SETTLED LAW THAT POWER OF LD. CIT(A) ARE CO-TERMINUS WITH T HAT OF A.O. 16. IN THIS VIEW OF THE MATTER WE REMIT THE ISSUE T O THE FILE OF THE LD. CIT(A) TO PASS A SPEAKING ORDER AFTER PROPERLY APPR ECIATING THE DOCUMENTS ON RECORD. NEEDLESS TO ADD ASSESSEE SHOULD BE GRANT ED ADEQUATE OPPORTUNITY OF BEING HEARD. 17. AS REGARDS THE CASE LAW BEING REFERRED IN THIS APPEAL ARE CONCERNED AT IS TRITE THAT THEY WILL BE CONSIDERED ONLY AFTER PROPER FACTUAL EXAMINATION OF THE RECORDS. 18. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 11 TH MARCH, 2019. SD/- SD/- (RAVISH SOOD) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 11.03.2019 THIRUMALESH , SR. PS 13 ITA NO.2813/MUM/2017 PUSHPAK HOSIERIES (EXPORTS) PVT.LTD. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI