M/s Abhijeet Enterprise Ltd., Kolkata V. ITO, Ward 2(2), Kolkata, Kolkata

ITA 308/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0872 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 15-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI
• Assessee Lawyers: M D SHAH
• Keywords: Unexplained cash credit; Gift; Question of law; Non compliance; Set aside
• Section: 143(3); 142(1); 80G; 205; 195; 68

Judgement Text

1 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 308/KOL/2017 ASSESSMENT YEARS: 2013-14 M/S. ABHIJEET ENTERPRISE LTD. (PAN: AAJCA4713C) VS. INCOME-TAX OFFICER, WD-2(2), KOLKATA APPELLANT RESPONDENT FOR THE APPELLANT SHRI M. D. SHAH, AR FOR THE RESPONDENT SHRI P. K. SRIHARI, CIT, DR DATE OF HEARING 08.03.2019 DATE OF PRONOUNCEMENT 27.03.2019 ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL OF THE ASSESSEE, A PRIVATE LIMITED COMP ANY, ARISES OUT OF ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1, K OLKATA FOR AY 2013-14DATED 30.12.2016. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST TH E ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.3,862.36 CRORES BY WAY OF UNEXPL AINED CASH CREDIT U/S. 68 OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 3. BRIEF FACTS OF THE CASE NOTED BY THE AO AT PAGE 3 OF THE ASSESSMENT ORDER IS REPRODUCED AS UNDER: SHORT NOTE ON THE FACTS OF THE CASE 2 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 IT IS SEEN FROM THE SUBMISSION OF THE ASSESSEE THAT ON ASSESSEES INSTRUCTION M/S. ABHIJIT PROJECTS LTD. GAVE SHARE APPLICATION MONEY OF RS.21 8,00,00,000/- TO M/S. ABHIJEET VENTURES LTD. IT IS FURTHER SEEN FROM THE SUBMISSION OF THE ASSES SEE THAT RS.3644,36,44,300/- WAS PAID ON ASSESSEES BEHALF BY M/S. ABHIJEET PROJECTS LTD. FO R THE PURPOSE OF PURCHASE OF INVESTMENTS. IT IS ALSO SEEN FROM THE SUBMISSION OF THE ASSESSEE THAT THE CUMULATIVE AMOUNT OF RS.(218,00,00,000 + 3644,36,44,300) = RS.3862,36,44 ,300/- HAS BEEN SHOWN AS OTHER PAYABLES ASSESSEE OWES THIS MONEY TO HOLDING COMPAN Y (NOTE 5 OTHER CURRENT LIABILITIES OF THE AUDITED ACCOUNTS). UNEXPLAINED CASH CREDIT U/S. 68 IT IS STATED IN SECTION 68 OF THE I. T. ACT, 1961 WHERE ANY SUM IS CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERE D BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITE D MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN T HE INSTANT CASE, THE SUMMONS ISSUED TO THE ASSESSEE COMPANY HAS NOT BEEN FULLY COMPLIED WITH. THE VERIFICATION OF THE SOURCE OF THE SHARE APPLICATION MONEY OF RS.218,00,00,000/- GIVEN TO M/ S. ABHIJEET VENTURES DURING THE PREVIOUS YEAR COULD NOT BE MADE DUE TO NON COMPLIANCE ON THE PART OF THE ASSESSEE. SIMILARLY THE VERIFICATION OF THE SOURCE OF RS.3644,36,44,300/- F OR THE PURPOSE OF PURCHASE OF INVESTMENTS COULD NOT BE MADE DUE TO NON COMPLIANCE ON THE PAR T OF THE ASSESSEE. THUS VERIFICATION OF THE CUMULATIVE AMOUNT OF RS.(218,00,00,000 + 3644,36,44 ,300) RS.3862,36,44,300/- SHOWN AS OTHER PAYABLES (NOTE 5 OTHER CURRENT LIABILITIES OF THE AUDITED ACCOUNTS) COULD NOT BE MADE DUE TO NON COMPLIANCE FROM THE PART OF THE ASSESSEE . PRIMARILY, DUE TO FAILURE ON PART OF THE ASSESSEE, THE IDENTITY OF THE SUNDRY CREDITOR IS QUESTIONABLE. IF THE IDENTITY OF THE CREDITORS HAD NOT BEEN CONCLUSIVELY ESTABLISHED, CONSEQUENTLY THE QUESTION OF ESTABLISHMENT OF THE G ENUINENESS OF THE TRANSACTIONS OR THE CREDITWORTHINESS OF THE CREDITORS DID NOT AND COULD NOT ARISE. IN VIEW OF THE ABOVE THE ENTIRE AMOUNT OF RS.3862,3 6,44,300/- SHOWN AS OTHER PAYABLES (NOTE 5-OTHER CURRENT LIABILITIES OF THE AUDITED ACCOUNTS ) WHICH IS REMAINED UNEXPLAINED IS ADDED BACK U/S. 68. 4. AGGRIEVED BY THE ABOVE ADDITION SADDLED BY AO U/ S. 68 OF THE ACT, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS P LEASED TO CONFIRM THE SAME. AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE US. 5. THE LD. AR ASSAILING THE ORDER OF THE LD. CIT(A) DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY WHICH IS ENGAGED IN THE BUSINESS OF TRADING AND INVESTMENT IN SHARES. THE LD. AR FIRST DREW OUR ATT ENTION TO THE NOTE NO. 21 FORMING PART OF ACCOUNTS WHEREIN THE DETAILS OF THE ASSOCIATED ENTE RPRISES HAD BEEN SET OUT IN THE ANNUAL 3 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 REPORT. IT IS NOTED THAT M/S. ABHIJEET VENTURES LTD . (HEREINAFTER M/S. AVL) WAS THE ULTIMATE HOLDING COMPANY AND M/S APL WAS THE IMMEDIATE HOLDI NG COMPANY OF THE ASSESSEE COMPANY WHICH HELD MORE THAN 95% STAKE IN THE ASSES SEE COMPANY. THE LD. AR THEREAFTER EXPLAINED THAT THE HOLDING COMPANY M/S. APL WAS FAC ED WITH ACUTE FINANCIAL CRUNCH AND HAD APPROACHED BANKS/FIS FOR LOAN/CREDIT FACILITIES . SINCE APL HAD SUBSTANTIAL FUNDS LOCKED UP IN ILLIQUID INVESTMENTS BEING SHARES & SECURITIE S OF GROUP COMPANIES, THE LENDERS OF M/S APL ADVISED THAT THE INVESTMENTS BE OFF-LOADED AND THE APL SHOULD ENSURE THAT THE BALANCE SHEET CONTAINS MAJORLY BUSINESS ASSETS WHICH REFLEC T ITS MAIN BUSINESS I.E. STEEL AND AVIATION. THE LENDERS THUS ADVISED M/S. APL TO TRANSFER THE E NTIRE INVESTMENT HOLDINGS TO ITS SUBSIDIARIES & GROUP COMPANIES WHICH WOULD LEND THE M ASSURANCE THAT THE ADDITIONAL LOAN FUNDS WHICH WOULD BE INFUSED BY THEM WOULD NOT GET DIVERTED IN THE FORM OF INVESTMENTS RATHER IT WOULD BE UTILIZED ONLY IN THE FIELD OF ST EEL AND AVIATION. THE LD. AR SUBMITTED THAT IN THIS FACTUAL BACKGROUND THE ABHIJEET GROUP UNDER TOOK THE RESTRUCTURING EXERCISE WHEREBY THE INVESTMENTS HELD BY M/S. APL TO THE TUNE OF RS. 3644.36 CR. WAS TRANSFERRED TO THE ASSESSEE COMPANY. THE INVESTMENTS OF RS.3644.36 CR ORES WAS PURCHASED BY THE ASSESSEE COMPANY ON CREDIT AND THEREFORE THE AMOUNT PAYABLE TO M/S APL WAS REFLECTED IN THE BOOKS AS ON 31.03.2013 UNDER THE HEAD OTHER PAYABLES. I N ADDITION TO THE FOREGOING THE INVESTMENT OF RS.218 CRORES MADE BY M/S APL IN THE ULTIMATE PARENT COMPANY, M/S AVL IN THE FORM OF SHARE APPLICATION MONIES PENDING ALLOTM ENT ALSO STOOD TRANSFERRED TO THE ASSESSEE COMPANY. IN SUM & SUBSTANCE THEREFORE THE ASSESSEE ACQUIRED INVESTMENTS IN FORM OF SHARES, THE RIGHT IN THE SHARE APPLICATION GIVEN TO M/S. AVL; AGGREGATING TO RS.3862.36 CRORES FROM ITS HOLDING COMPANY M/S. APL AND SUCH A MOUNT REMAINED DUE AND PAYABLE AT THE YEAR-END. THE LD. AR FURTHER DREW OUR ATTENTION TO NOTE NO. 5 & 7 OF THE AUDITED ACCOUNTS WHEREIN THE AFORESAID TRANSACTIONS HAD BEE N DULY REFLECTED AND REPORTED BY THE ASSESSEE COMPANY. THE LD. AR SUBMITTED THAT THE ENT IRE SEQUENCE OF TRANSACTION IN QUESTION INVOLVING TRANSFER OF SHARES HAD TAKEN PLACE INTRA- GROUP AND THAT NEITHER ANY UNRELATED OR OUTSIDE BODIES CORPORATE WERE INVOLVED, NOR ANY ACT UAL SUM OR CASH WAS PAID AND/OR TRANSFERRED INTER-SE GROUP COMPANIES. THE LD. AR TH EREFORE SUBMITTED THAT THE INITIAL PREMISE OF THE AO THAT THE ASSESSEE WAS UNABLE TO E STABLISH THE IDENTITY OF SUNDRY CREDITOR 4 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 I.E. M/S. ABHIJIT PROJECTS LTD. (M/S. APL) WAS MISP LACED AND THE ACTION OF THE LOWER AUTHORITIES HOLDING THAT SUCH TRANSACTION FELL WITH IN THE KEN OF SECTION 68 WAS ALSO UNJUSTIFIED. 6. IT WAS FURTHER POINTED OUT BY THE LD. AR THAT T HE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRADING IN SHARES AND MAKING INVESTMENTS THEREFO RE THE ACT OF ACQUISITION OF SHARES & RIGHTS IN SHARES BY THE ASSESSEE COMPANY WAS DULY R EFLECTED IN THE BOOKS OF ACCOUNTS. HE THUS SUBMITTED THAT WHEN THE AO HAD ACCEPTED THE TR ANSACTION INVOLVING PURCHASE OF SHARES & RIGHTS IN SHARES FROM M/S APL, THEN THE AO COULD NOT QUESTION THE GENUINENESS OF THE AMOUNT OUTSTANDING AGAINST THE LEDGER OF THE CREDIT OR I.E. M/S APL. THE LD. AR SUBMITTED THAT TRANSACTION OF CREDIT PURCHASE RESULTING IN A PAYABLE COULD NOT BE EQUATED WITH A CREDIT ENTRY OF A FINANCIAL TRANSACTION INVOLVING RECEIPT OF MONEY SO AS TO INVOKE THE RIGORS OF SECTION 68 OF THE ACT. IT THIS REGARDS THE LD. AR D REW OUR ATTENTION TO THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MANO J AGARWAL VS DCIT REPORTED AS 113 ITD 377 WHEREIN THE TRIBUNAL HAD EXPLAINED THE DIFFERE NCE BETWEEN THE RECEIPT OF ANY SUM FOR THE PURPOSE OF SECTION 68 OF THE I T ACT 1961 VERSU S THE LIABILITY TO PAY AMOUNT REPRESENTING OUTSTANDING PURCHASE CONSIDERATION. ACCORDING TO LD . AR THEREFORE THE AO ERRED IN EQUATING AMOUNT DUE ON ACCOUNT OF PURCHASE I.E. OUTSTANDING PURCHASE PRICE WITH SUM CREDITED I.E. RECEIPT OF MONEY SO AS TO INVOKE SECTION 68 OF THE ACT THE ASSESSING OFFICER FAILED TO APPRECIATE THE DIFFERENCE BETWEEN THE TWO. HE SUBM ITTED THAT THERE WAS NO RECEIPT OR INVOLVEMENT OF ANY SUM OR CASH IN THE ENTIRE SEQUEN CE OF TRANSACTION AND THEREFORE URGED THAT THE PROVISIONS OF SECTION 68 WAS NOT APPLICA BLE IN THE GIVEN SET OF FACTS. ON QUERY FROM THE BENCH, THE LD. AR CLARIFIED THAT THE SUM WHICH REMAINED OUTSTANDING AS ON 31. 03. 2013 WAS SUBSEQUENTLY SATISFIED BY THE ASSESSEE COM PANY BY WAY OF ISSUANCE OF DEBENTURES OF EQUIVALENT AMOUNT TO M/S APL. HE POINTED OUT T HAT THIS ASPECT WAS ALSO ENQUIRED INTO BY THE AO IN THE REMAND PROCEEDINGS AND IN HIS REMA ND REPORT FURNISHED BEFORE THE LD. CIT(A), EVEN THE AO HAD STATED THAT THE OUTSTANDIN G DUES WERE SETTLED BY ISSUANCE OF DEBENTURES. IN THIS REGARD HE DREW OUR ATTENTIO N TO PAGES 7 OF THE LD. CIT(A)S ORDER WHERE THIS FINDING IS AVAILABLE. RELYING ON THE JU DGMENTS OF THE HONBLE SUPREME COURT IN 5 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 THE CASE OF H.H. SRI RAMA VERMA VS CIT (187 ITR 308 ), HONBLE CALCUTTA HIGH COURT IN THE CASE OF JATIA INVESTMENT CO VS CIT (306 ITR 718 ) & HONBLE MADRAS HIGH COURT IN THE CASE OF V.R. GLOBAL ENERGY PVT LTD VS ITO (96 TAXMA NN.COM 647) HE URGED THAT THE AOS INVOCATION OF SECTION 68 IN THE GIVEN SET OF FACTS WAS WHOLLY UNSUSTAINABLE ON FACTS AND IN LAW. 7. THE LD. AR ALTERNATIVELY STRESSED ON THE FACT TH AT AO HAD ACTED ON THE SPECIOUS PLEA THAT THE IDENTITY OF SUNDRY CREDITOR, M/S. APL COUL D NOT BE ESTABLISHED AND THAT HE HAD WRONGLY INVOKED SECTION 68 TO MAKE THIS HUMUNGOUS A DDITION, WHICH WAS PER-SE NOT WARRANTED. HE SUBMITTED THAT ADMITTEDLY THE TRANSAC TION IN QUESTION WAS BETWEEN GROUP ENTITIES AND THAT M/S APL & M/S AVL WAS OPERATIONAL BODIES CORPORATE BELONGING TO THE SAME ABHIJEET GROUP AND WHICH ARE REGULARLY TAXED. HE THEREFORE PLEADED THAT ALL THE INGREDIENTS OF SECTION 68 ALSO STOOD SATISFIED AND HENCE PRAYED THAT THE IMPUGNED ADDITION BE DELETED. 8. PER CONTRA, THE LD. CIT DR STATED THAT THE IMPUGNED ADDITION WAS A RESULT OF THE EVASIVE CONDUCT OF THE ASSESSEE DURING ASSESSMENT P ROCEEDING. THE LD. DR BROUGHT TO OUR ATTENTION THAT THE AO HAD ISSUED SEVERAL SUMMONS / NOTICES AND ALLOWED SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE, HOWEVER THE ASSESSEE NEITHER COMPLIED WITH THE REQUISITIONS NOR EXPLAINED THE TRANSACTIONS IN QUES TION, RESULTING IN THE IMPUGNED ADDITION U/S 68 OF THE ACT, THE AO MADE THE ADDITION U/S. 68 OF THE ACT. ACCORDING TO THE LD. CIT DR THE AVERMENTS OF THE ASSESSEE THAT DURING THE ASSES SMENT YEAR UNDER CONSIDERATION (A.Y. 2013-14) THE ASSESSEE HAD RECEIVED SHARES WORTH OF RS. 3644.56 CRORES FROM M/S. APL ON CREDIT AND THAT THIS AMOUNT WAS SHOWN OUTSTANDING C URRENT LIABILITY TO M/S. APL WAS NOT FULLY DISCERNIBLE FROM THE AUDITED FINANCIAL STATEM ENTS AS THE NAME OF M/S APL HAS NOT BEEN SPECIFICALLY MENTIONED IN NOTE NO.5 OF THE ANN UAL ACCOUNTS. HE FURTHER DREW OUR ATTENTION TO THE AOS ORDER WHEREIN HE HAD TAKE NOT E OF THE FACT THAT IN NOTE 5 -OTHER PAYABLESIT WAS MENTIONED AS MAINLY RELATING TO PU RCHASE OF INVESTMENTS BUT THERE WAS NO WHISPER IN RESPECT TO ANY LIABILITY OF RS.218 CRORE S PAYABLE IN RELATION TO ACQUISITION OF 6 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 RIGHTS IN SHARE APPLICATION MONIES PAID BY M/S APL TO M/S AVL. THE LD. DR FURTHER SUBMITTED THAT IT WAS ALSO NOT FULLY CLEAR THAT WHE THER THE ASSESSEE HAD ACTUALLY RECEIVED ANY SUM OR NOT IN THIS ENTIRE SEQUENCE OF TRANSACTIONS. ACCORDING TO THE LD. DR, THE ASSESSEE HAD GIVEN CONTRADICTORY STATEMENTS BY STATING ON ONE HA ND THAT THE ASSESSEE RECEIVED SHARE WORTH RS. 3644.36 CRORES FROM M/S. APL ON CREDIT AND THIS AMOUNT WERE SHOWN AS OUTSTANDING CURRENT LIABILITY TO M/S. APL AND THAT APL HAD TRAN SFERRED RIGHTS IN THE SHARE APPLICATION AMOUNT OF RS.218 CRORES IN AVL TO AEL AND THAT THIS AMOUNT WAS ALSO SHOWN AS OUTSTANDING CURRENT LIABILITY TO APL. ASSAILING TH E LD. ARS CONTENTION THAT PROVISIONS OF SECTION 68 CANNOT BE INVOKED WHERE NO ACTUAL SUM OR CASH IS RECEIVED/CREDITED IN THE BOOKS OF ACCOUNTS, THE LD. DR TOOK US THROUGH THE PROVISI ONS OF SECTION 68 OF THE ACT AND SUBMITTED THAT THE PHRASE ANY SUM CREDITED ALSO I NCLUDED BOOK ENTRIES & OUTSTANDING DUES. HE SUBMITTED THAT THE ASSESSEES RELIANCE ON THE JU DGMENT OF HONBLE SUPREME COURT IN THE CASE OF H.H. SRI RAMA VERMA VS CIT (SUPRA) WAS DIST INGUISHABLE SINCE IN THAT DECISION THE PROVISION IN QUESTION WAS SECTION 80G AND NOT SECTI ON 68 OF THE ACT. THE LD. DR ALSO TRIED TO DISTINGUISH EACH OF THE CASE LAWS RELIED UPON BY THE ASSESSEE ON THEIR RESPECTIVE FACTS. 9. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE H AD MISERABLY FAILED TO EXPLAIN THE NATURE AND SOURCE OF THE SUMS IN QUESTION, SO THE A O HAS RIGHTLY ADDED THE SUMS U/S. 68 OF THE ACT. HE INVITED OUR ATTENTION TO THE JUDGMENT O F THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF J.J. DEVELOPERS PVT. LTD. VS CIT (100 TAXMA NN.COM 101) WHEREIN THE HIGH COURT HAD AFFIRMED THE ADDITION THAT WAS MADE BY THE AO U /S 68 OF THE ACT. HE FURTHER BROUGHT TO OUR ATTENTION THAT THE SLP FILED BY THE ASSESSEE AG AINST THE DECISION OF THE HONBLE HIGH COURT HAD SINCE BEEN DISMISSED. ACCORDING TO HIM, T HE FACTS OF THE PRESENT CASE ARE ANALOGOUS TO THE AFORESAID JUDGMENT AND THEREFORE U RGED THAT THE ORDERS OF THE LOWER AUTHORITIES DID NOT WARRANT ANY INTERFERENCE. 7 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE RECORDS. FROM THE MATERIAL PLACED BEFORE US IT IS NOTED THAT THE ASSE SSEE IS ENGAGED IN THE BUSINESS OF TRADING IN SHARES & SECURITIES. DURING THE YEAR THE ASSESSEE C OMPANY HAD ACQUIRED SHARES AND RIGHTS IN SHARES PENDING ALLOTMENT ON CREDIT BY WAY OF INVEST MENTS FROM ITS HOLDING COMPANY, M/S APL FOR AN AGGREGATE CONSIDERATION OF RS.3862.36 LA CS. IT IS NOTED THAT CONSIDERATION TOWARDS THESE SHARES SO ACQUIRED REMAINED OUTSTANDI NG AS ON 31.03.2013. FROM THE DETAILS OF OTHER PAYABLES NOTE NO. 5 OF THE ANNUAL ACCO UNTS FOR THE YEAR ENDED 31.03.2013, WE NOTE THAT THE AMOUNT OF RS. 3862.36 CRORES INTER AL IA COMPRISED OF THE SUM OF RS.3644.36 CRORES & RS.218 CRORES PAYABLE BY THE ASSESSEE TO M /S APL IN RESPECT OF SHARES AND RIGHT IN SHARE APPLICATION MONIES RESPECTIVELY. WE FURTHER N OTE THAT THE AFORESAID LIABILITY WHICH AROSE AS A CONSEQUENCE OF ACQUISITION OF INVESTMENT S, WAS SUBSEQUENTLY MET BY WAY OF ISSUE OF DEBENTURES IN SUBSEQUENT YEAR AND THEREAFTER NO LIABILITY REMAINED SUBSISTING. PRIMA FACIE THEREFORE IT IS APPARENT THAT THERE WAS NO PA YMENT OF ANY SUM IN CASH OR CHEQUE INVOLVED IN THE ENTIRE SEQUENCE OF TRANSACTIONS. IN FACT IN THE RELEVANT YEAR ONLY BOOK ENTRY WAS PASSED IN THE BALANCE SHEET WHEREBY THE ASSESSE E RECORDED THE VALUE OF INVESTMENTS ACQUIRED ON CREDIT IN THE ASSET SIDE AND THE CORR ESPONDING PAYABLE WAS REFLECTED IN THE LIABILITY SIDE UNDER THE HEAD OTHER PAYABLES. I T IS THEREFORE NOTED THAT THE RECORDING OF THE ACQUISITION OF INVESTMENTS FROM M/S APL AND THE CORRESPONDING ACCOUNTING OF THE SUM DUE TO M/S APL WAS NOTHING BUT A JOURNAL ENTRY PASS ED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY. ON THESE FACTS THE ISSUE NOW BEFO RE US IS WHETHER THE AO COULD HAVE ADDED SUCH OUTSTANDING BALANCE REFLECTED IN THE BAL ANCE SHEET UNDER THE HEAD OTHER PAYABLES UNDER SECTION 68 OF THE ACT. IN THIS REGA RD IT WOULD FIRST BE RELEVANT TO EXAMINE THE BARE PROVISIONS OF SECTION 68 OF THE ACT WHICH READS AS UNDER: WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NA TURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESS ING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE A SSESSEE OF THAT PREVIOUS YEAR. 11. IT IS NOTED THAT THE LEGISLATURE HAS EMPLOYED T HE PHASE ANY SUM IN THE ABOVE PROVISION. IT WOULD BE PERTINENT HERE TO REFER TO T HE DECISION OF HON'BLE SUPREME COURT IN 8 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 THE CASE OF SHRI H.H. RAMA VARMA VS. CIT (SUPRA) WH EREIN IT WAS HELD THAT 'ANY SUM' MEANS 'SUM OF MONEY'. THE RELEVANT EXTRACTS OF THE JUDGME NT IS AS FOLLOWS: ONE OF THE DICTIONARY MEANINGS OF THE EXPRESSION ' SUM' MEANS ANY INDEFINITE AMOUNT OF MONEY. THE CONTEXT IN WHICH THE EXPRESSION 'SUMS PAID BY T HE ASSESSEE' HAS BEEN USED MAKES THE LEGISLATIVE INTENT CLEAR THAT IT REFERS TO THE AMOU NT OF MONEY PAID BY THE ASSESSEE AS DONATION. THE ACT PROVIDES FOR ASSESSMENT OF TAX ON THE INCOM E DERIVED BY AN ASSESSEE DURING THE ASSESSMENT YEARS; THE INCOME RELATES TO THE AMOUNT OF MONEY EARNED OR RECEIVED BY AN ASSESSEE. THEREFORE, FOR PURPOSES OF CLAIMING DEDUCTION FROM INCOME-TAX UNDER SECTION 80G(2)(A), THE DONATION MUST BE A SUM OF MONEY PAID BY THE ASSESSE E. 12. IN VIEW OF THE ABOVE DECISION WE ARE OF THE CO NSIDERED VIEW THAT THE PHRASE ANY SUM EMPLOYED IN SECTION 68,CANNOT BE EXTENDED TO I NCLUDE ANY BOOK ENTRY, NOTIONAL ADJUSTMENT, PAYMENT IN KIND ETC. THE LD. ARS RELIA NCE ON THE FINDINGS RECORDED IN THE CONTEXT OF THE INTERPRETATION OF THE PROVISIONS OF SECTION 68 IN THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL COMPRISING OF FIVE MEMBERS I N THE CASE OF MANOJ AGARWAL VS. CIT (SUPRA) IS ALSO FOUND TO BE OF MUCH RELEVANCE, WHER EIN THIS TRIBUNAL HAD HELD AS UNDER: THE ARGUMENT THAT SECTION 68 IS NOT APPLICABLE WH ERE AN ASSET IS SOLD AND THE SALE PROCEEDS ARE CREDITED IN THE BOOKS OF ACCOUNT CANNOT BE ACCE PTED HAVING REGARD TO THE SETTLED LEGAL POSITION THAT IT IS ALWAYS FOR THE ASSESSEE TO EXPL AIN THE NATURE AND SOURCE OF THE SUMS CREDITED IN HIS BOOKS OF ACCOUNT. THE SECTION DOES NOT RECOG NIZE ANY DISTINCTION BETWEEN AMOUNTS CREDITED IN THE BOOKS AS GIFTS OR LOANS OR PURE REC EIPTS, ON THE ONE HAND, AND AMOUNTS CREDITED AS SALE PROCEEDS. IN EITHER CASE, WHEN CALLED UPON, THE ASSESSEE IS BOUND TO EXPLAIN THE NATURE AND SOURCE OF THE AMOUNTS CREDITED. THERE MAY BE A FEW EXCEPTIONS TO THIS GENERAL RULE. FOR EXAMPLE, IN THE CASE OF CREDIT PURCHASES, THE ACCOU NT OF THE SUPPLIER IS CREDITED WITH THE AMOUNT PAYABLE. IN SUCH A CASE, WHERE THE PURCHASE IS ALLOWED AS EXPENDITURE, IT MAY NOT BE POSSIBLE FOR THE ASSESSING OFFICER TO AGAIN CALL UP ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF THE CREDIT, FOR THE REASON THAT THE PURCH ASE ITSELF WAS ALLOWED AS EXPENDITURE ONLY ON BEING SATISFIED THAT IT WAS A GENUINE PURCHASE ON C REDIT. IMPLICITLY, THE NATURE AND SOURCE OF THE AMOUNT CREDITED HAS ALSO TO BE TAKEN AS HAVING BEEN EXPLAINED SATISFACTORILY. ANOTHER POSSIBLE ARGUMENT CAN BE THAT IN SUCH A CASE, THE A MOUNT CREDITED IS NOT A CASH CREDIT IN THE SENSE THAT SOME MONIES HAVE BEEN RECEIVED BY THE AS SESSEE, BUT THE CREDIT REPRESENTS A MERE LIABILITY PAYABLE BY THE ASSESSEE IN FUTURE. UNDER ACCOUNTING PRINCIPLES, A LIABILITY CAN ONLY BE BROUGHT INTO ACCOUNT BY MAKING A CREDIT ENTRY IN TH E BOOKS OF ACCOUNT IN FAVOUR OF THE PERSON TO WHOM THE MONEY IS PAYABLE. THUS, THERE IS MARKED DIFFERENCE BETWEEN A CREDIT REPRESENTING ALIABILITY PAYABLE BY THE ASSESSEE AND A CREDIT REP RESENTING MONIES RECEIVED FROM ANOTHER PERSON. IT IS BECAUSE OF THIS DISTINCTION, A LIABIL ITY FOR PURCHASE WHICH HAS BEEN CREDITED IN THE ACCOUNT OF THE SUPPLIER CANNOT BE ADDED UNDER SECTI ON 68 OF THE ACT, MORE SO WHEN THE PURCHASE HAS BEEN ACCEPTED AS GENUINE AND A DEDUCTI ON THEREFOR HAS BEEN ALLOWED. IN ALL OTHER CASES INCLUDING THE CASE OF A CREDIT REPRESEN TING THE SALE PROCEEDS OF AN ASSET, THE PROVISIONS OF SECTION 68 ARE APPLICABLE AND IT IS F OR THE ASSESSEE TO PROVE SATISFACTORILY THE NATURE AND SOURCE OF THE MONIES.. 9 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 13. FROM A BARE READING OF THE AFORESAID DICTUM OF LAW AS MADE BY THE SPECIAL BENCH, WE NOTE THAT THERE IS A DIFFERENCE BETWEEN CREDIT REPR ESENTING A LIABILITY PAYABLE BY THE ASSESSEE AND A CREDIT REPRESENTING MONIES RECEIVED FROM ANOT HER PERSON. IT IS BECAUSE OF THIS DISTINCTION A LIABILITY WHICH ARISES AS A CONSEQUEN CE OF ANY PURCHASE RESULTING IN A CORRESPONDING CREDIT TO THE ACCOUNT OF THE SUPPLIER CANNOT BE ADDED U/S. 68 OF THE ACT, MORE SO, WHEN THE PURCHASE HAS BEEN ACCEPTED AS GENUINE. IN OTHER CASES INVOLVING ACTUAL RECEIPT OF MONEY, THE PROVISIONS OF SEC. 68 ARE APPLICABLE AND THEN THE ONUS IS ON THE ASSESSEE TO PROVE SATISFACTORILY THE NATURE AND SOURCE OF THE M ONIES. IN THE PRESENT CASE, WE NOTE THAT BOTH THE TRANSACTIONS BETWEEN THE ASSESSEE AND M/S APL INVOLVING PURCHASE OF SHARES FOR RS.3644.36 CRORES AND THE RIGHT/TITLE OF THE SHARE APPLICATION MADE IN M/S. AVL FOR RS.218 CR HAS BEEN CLAIMED TO BE CARRIED OUT ON CREDIT AND THAT NO SUM WHATSOEVER WAS RECEIVED IN RELATION THEREOF. IT IS NOTED THAT THE LIABILITY OF RS.3862.36 CRORES REFLECTED UNDER THE HEAD OTHER PAYABLE HAS ARISEN AS A CONSEQUENCE OF THE AFORESAID PURCHASE TRANSACTION AND THAT IT DOES NOT REPRESENT ANY RECEIPT OF ACTUAL MONIES. TH E ASSESSEE COMPANY HAVING PURCHASED THESE INVESTMENTS ON CREDIT FROM THE HOLDING COMPAN Y M/S. APL, IS SHOWN AS THE SUNDRY DEBTOR IN THE BOOKS OF THE HOLDING COMPANY M/S. APL AND CORRESPONDINGLY M/S. APL IS THE SUNDRY CREDITOR IN THE BOOKS OF THE ASSESSEE COMPAN Y, WHICH IS YET TO RECEIVE THE SALE CONSIDERATION. IT IS THEREFORE NOTED THAT THE SUM O F RS.3862.36 CRORES REPRESENTED THE LIABILITY TO PAY THE HOLDING COMPANY M/S. APL TOWAR DS THE PURCHASE CONSIDERATION OF THE SHARES WHICH IT HAS PARTED WITH TO THE ASSESSEE COM PANY. APPLYING THE OBSERVATIONS MADE BY THE SPECIAL BENCH OF THIS TRIBUNAL (SUPRA) IN TH E CONTEXT OF SECTION 68 AND THE MEANING ASSIGNED TO THE TERM ANY SUM BY THE HONBLE SUPRE ME COURT (SUPRA); WE FIND SUBSTANTIAL MERIT IN THE CLAIM OF THE APPELLANT THAT THE PROVIS IONS OF SECTION 68 WAS WRONGLY INVOKED IN THE PRESENT CASE IN RESPECT OF THE OUTSTANDING LIAB ILITY PAYABLE BY THE ASSESSEE TO ITS HOLDING COMPANY, M/S APL TOWARDS THE INVESTMENTS ACQUIRED D URING THE RELEVANT YEAR. 10 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 14. IN THIS REGARD, WE ALSO RELY ON THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF JATIA INVESTMENT CO. VS CIT (SUPRA) WHI CH IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE. IN THE DECIDED CASE THE COURT HELD: WE HAVE PERUSED THE ASSESSMENT ORDER CAREFULLY. WE FIND THAT CASH DID NOT PASS AT ANY STAGE THOUGH ENTRIES WERE MADE IN THE CASH BOOK SHOWING P AYMENTS AND RECEIPTS ; BUT SINCE THE ENTRIES MADE A COMPLETE ROUND, NO PASSING OF CASH W AS NECESSARY FOR THE PURPOSE OF MAKING THE ENTRIES. THAT THERE WAS NO PASSING OF CASH IS ALSO ADMITTED BY THE INCOME-TAX OFFICER HIMSELF. WE HAVE ALREADY EXTRACTED THE OBSERVATION OF THE IN COME-TAX OFFICER IN PARAGRAPH 14 OF HIS ASSESSMENT ORDER. THE INCOME-TAX OFFICER HAS CLEARL Y OPINED THAT ALL THE RESPECTIVE PARTIES DID NOT RECEIVE CASH NOR DID PAY CASH AS NONE HAD ANY C ASH FOR THE PURPOSE. THE ONLY POINT IN THE ASSESSMENT ORDER IS THAT THE ENTRIES NOT INVOLVING THE PASSING OF CASH SHOULD NOT HAVE FOUND A PLACE IN THE CASH BOOK, BUT IN THE LEDGER ACCOUNT T HROUGH JOURNAL ENTRIES. THERE IS ANOTHER SELF- CONTRADICTION IN THE INCOME-TAX OFFICER'S FINDING T HAT, IF THERE WAS NO REAL CASH ENTRY ON THE CREDIT SIDE OF THE CASH BOOK, BUT MERELY A NOTIONAL OR FICTITIOUS CASH ENTRY, AS ADMITTED BY HIM, THERE IS NO REAL CREDIT OF CASH TO ITS CASH BOOK ; THE QUESTION OF INCLUSION OF THE AMOUNT OF THE ENTRY AS UNEXPLAINED CASH CREDIT CANNOT ARISE. ONE OF THE GROUNDS OF THE TRIBUNAL FOR DISBELIEVING THE ASSESSEE'S CASE IS THAT THE ADJUSTMENT ENTRIES WERE MADE BY NOTIONAL CASH ENTRIES WITH A V IEW TO BRINGING DOWN THE DEBT-AND-CAPITAL RATIO, I.E., THAT WHILE BEING DISCHARGED OF THE DEB T THE SAID COMPANIES ALSO JETTISONED THEIR ASSETS, I.E., THE SHARES HELD BY THEM OF EQUIVALENT SUM WITHOUT ACHIEVING THE AVOWED PURPOSE. HERE THE TRIBUNAL CERTAINLY MISDIRECTED ITSELF. THE RATIO TO BE REDUCED IS OF THE LOAN IN RELATION TO THE SHARE CAPITAL AND THE RESERVES. JETTISONING THE SHARES HAD THE DESIRED EFFECT OF REDUCING THE BORROWED CAPITAL. AGAIN, AS REGARDS THE TRIBUNAL'S REFUSAL TO TAKE NO TICE OF THE DIRECTIONS OF THE RESERVE BANK, IT IS NOT CORRECT FOR THE TRIBUNAL TO HOLD THAT THE SAID DOCUMENT WAS A NEW EVIDENCE IN THE TRUE SENSE OF THE TERM. THE ASSESSEE HAS BEEN CONSISTENTLY PLE ADING BEFORE THE LOWER AUTHORITIES THAT THE ENTRIES HAD TO BE MADE IN ORDER TO BRING THE COMPAN IES IN CONFORMITY WITH THE SAID DIRECTION. MOREOVER, THE DIRECTION OF THE RESERVE BANK IS A PU BLIC DOCUMENT WITHIN THE MEANING OF SECTION 74 OF THE EVIDENCE ACT, 1872. DOCUMENTS OF A PUBLIC NATURE AND PUBLIC AUTHORITY ARE GENERALLY ADMISSIBLE IN EVIDENCE SUBJECT TO THE MODE OF PROVI NG THEM AS LAID DOWN IN SECTIONS 76 AND 78 OF THE EVIDENCE ACT. IN OUR VIEW, THE EFFECT AND IMPORT OF THE TRANSACTI ONS IS THAT THE ASSESSEE TOOK OVER THE LIABILITY OF THE AFORESAID NON-FINANCIAL COMPANIES TO GB AND CO. IN EXCHANGE FOR THE SHARES AS AFORESAID. IN THE PREMISES, WE ANSWER ALL THE QUESTIONS, IN TH E AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 11 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 15. WE ALSO RELY ON THE JUDGMENT OF THE HONBLE MAD RAS HIGH COURT IN THE CASE OF V R GLOBAL ENERGY PVT LTD. VS ITO (SUPRA) WHICH IS SQUA RELY APPLICABLE IN THE PRESENT CASE. IN THE DECIDED CASE THERE WAS AN OUTSTANDING DUE OF RS .60.67 CRORES PAYABLE TO ONE MRS. VR BY THE ASSESSEE COMPANY. INSTEAD OF PAYING CASH, TH E ASSESSEE COMPANY ALLOTTED ITS SHARES TO MRS. VR IN SATISFACTION OF THE OUTSTANDING DUES. TH E AO ASSESSED THE INCREASE IN SHARE CAPITAL BY WAY OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. ON APPEAL THE HONBLE HIGH COURT OBSERVED THAT THERE WAS NO ACTUAL INVOLVEMENT OF MONEY BUT THE ALLOTMENT OF SHARES IN LIEU OF OUTSTANDING DUES WAS ONLY A BOOK ADJUSTMENT AND THEREFORE HELD THAT PROVISIONS OF SECTION 68 COULD NOT BE INVOKED IN THE GIVEN FACTS OF THE CASE. THE RELEVANT EXTRACTS OF THE JUDGMENT ARE AS UNDER: 26. THIS CASE IS DISTINGUISHABLE FROM THE CASE OF CIT V. LOVELY EXPORT (P.) LTD. [2008] 216 CTR 195 (SC) IN THAT THE TRANSACTIONS WERE ONLY BOO K TRANSACTIONS, AND THERE WAS NO CASH RECEIPT. THE DECISIONS IN (I) CIT V. FOCUS EXPORTS (P.) LTD. [2014] 51 TAXMANN.COM 46/228 TAXMAN 88 (DELHI) (MAG.); (II) CIT V. GLOBUS SECURI TIES & FINANCE PVT. LTD. [2014] 41 TAXMANN.COM 465/224 TAXMAN 237 (DELHI); (III) ONASS IS AXLES (P.) LTD. V. CIT [2014] 364 ITR 53/224 TAXMAN 80 (MAG.)/44 TAXMANN.COM 408 (DELHI); (IV) OLWIN TILES INDIA (P.) LTD. V. DY. CIT [2016] 382 ITR 291/237 TAXMAN 342/66 TAXMANN.CO M 8 (GUJ.); (V) B.R. PETROCHEM (P.) LTD. V. ITO [2017] 81 TAXMANN.COM 424 (MAD.); AND ( VI) RAJMANDIR ESTATES (P.) LTD. V. PR. CIT [2016] 386 ITR 162/240 TAXMAN 306/70 TAXMANN.COM 12 4 (CAL.), CITED ON BEHALF OF THE RESPONDENT ARE DISTINGUISHABLE, IN THAT THE CASH CR EDITS TOWARDS SHARE CAPITAL WERE ADMITTEDLY ONLY BY WAY OF BOOK ADJUSTMENT AND NOT ACTUAL RECEI PTS WHICH COULD NOT BE SUBSTANTIATED AS RECEIPTS TOWARDS SHARE SUBSCRIPTION MONEY. 27. THE APPEAL IS, THUS, ALLOWED AND THE JUDGMENT A ND ORDER OF THE LEARNED TRIBUNAL DATED 1.9.2016 IS SET ASIDE, FOR THE REASONS DISCUSSED AB OVE. ADDITIONS UNDER SECTION 68 OF THE 1961 ACT ARE ALSO SET ASIDE. THE QUESTIONS OF LAW ARE AN SWERED AGAINST THE REVENUE. 16. SIMILAR VIEW WAS ALSO TAKEN BY THE HON'BLE DELH I HIGH COURT IN THE CASE OF CIT US. RITU ANURAG AGARWAL REPORTED AS 2009 (7) TMI 1247WH EREIN THE HONBLE HIGH COURT HELD: 'THIS FINDING OF AO REMAINED UNDISTURBED BEFORE THE CIT(A) AS WELL AND HAS BEEN ACCEPTED BY THE ITAT. PROCEEDING ON THIS BASIS, THE ITAT OBSERVED THAT THE SOLES, PURCHASES AS WELL AS GROSS PROFITS AS DISCLOSED BY THE ASSESSEE HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. ONCE THIS IS ACCEPTED, WE AR E OF THE OPINION THAT THE APPROACH OF THE ITAT WAS CORRECT INASMUCH AS THE ASSESSING O FFICER DID NOT CONSIDER THIS 12 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 ASPECT WHILE MAKING ADDITIONS OF SUNDRY CREDITORS U NDER SECTION 68 OF THE INCOME TAX ACT. AS THERE WAS NO CASE FOR DISALLOWANCE FOR CORRESPONDING PURCHASE, NO ADDITION COULD BE MADE UNDER SECTION 68 INASMUCH AS IT IS NOT IN DISPUTE THAT THE CREDITORS OUTSTANDING RELATED TO PURCHASES AND THE TRADING RESULTS WERE ACCEPTED BY THE AO. WE ARE, THEREFORE, OF THE OPINION THAT NO S UBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION IN THIS CASE. THE APPEAL IS ACCOR DINGLY DISMISSED. ' 17. WE ALSO RELY ON THE DECISION OF THE HON'BLE ALL AHABAD HIGH COURT IN THE CASE OF CIT -VS.- PANCHAM DAS JAIN (205 CTR 444) WHEREIN IT WAS HELD AS UNDER: 6. WE HAVE HEARD SRI SHAMBHOO CHOPRA, LEARNED STAND ING COUNSEL FOR THE REVENUE. 7. HE SUBMITTED THAT AS THE RESPONDENT-ASSESSEE WAS UNABLE TO PRODUCE THE ALLEGED CREDITORS THE PROVISIONS OF SECTION 68 OF THE ACT W AS SQUARELY ATTRACTED IN THE PRESENT CASE AND THE ASSESSING AUTHORITY HAS RIGHTLY ADDED THE TWO AMOUNTS AT THE HANDS OF THE RESPONDENT-ASSESSEE. ACCORDING TO HIM SECTION 6 8 OF THE ACT ALSO COVERS UP THE CASE OF PURCHASES MADE ON CREDIT. 8. THE SUBMISSION IS MISCONCEIVED. THE TRIBUNAL HAS RECORDED A CATEGORICAL FINDING OF FACT BASED ON APPRECIATION OF MATERIALS AND EVID ENCE ON RECORD THAT THE ASSESSING OFFICER HAD ACCEPTED THE PURCHASES, SALES AS ALSO T HE TRADING RESULT DISCLOSED BY THE RESPONDENT-ASSESSEE. IT HAD RECORDED A FINDING THAT THE AFORESAID TWO ACCOUNTS REPRESENTED THE PURCHASES MADE BY THE ASSESSEE ON C REDIT AND, THEREFORE, THE PROVISIONS OF SECTION 68 OF THE ACT COULD NOT BE AT TRACTED IN THE PRESENT CASE. WE FULLY AGREE WITH THE VIEW TAKEN BY THE TRIBUNAL ON THIS I SSUE, INASMUCH AS, ON THE BO.SIS OF THE FINDINGS RECORDED BY IT THAT THESE TWO AMOUNTS REPRESENTED PURCHASES MADE BY THE RESPONDENT-ASSESSEE ON CREDIT AND THE PURCHASES AND SALES HAVING BEEN ACCEPTED BY THE DEPARTMENT, THE QUESTION OF ADDITION OF THE AFORESAID TWO AMOUNTS UNDER SECTION 68 OF THE ACT DID NOT ARISE INASMUCH AS THE PROVISIONS OF SECTION 68 OF THE ACT WOULD NOT BE ATTRACTED ON THE PURCHASES MADE ON CRE DIT. 9. WE, ACCORDINGLY, ANSWER THE QUESTION REFERRED TO US IN AFFIRMATIVE, I,E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THERE WILL BE NO ORDER AS TO COSTS. 18. WE ALSO RELY ON THE FINDINGS RECORDED IN THE DE CISION OF THE HON'BLE PUNJAB HIGH COURT IN THE CASE OF PCIT VS SH. KULWINDER SINGH 2017 (7) TMI 957 WHEREIN THE HONBLE COURT HELD AS UNDER: 13 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 4. A PERUSAL OF THE ORDER PASSED BY THE TRIBUNAL SH OWS THAT THE ASSESSEE HAD SHOWN NUMEROUS SUNDRY CREDITORS ALONG WITH DETAILS IN HIS BALANCE SHEET. THE ASSESSEE BEING A ROAD CONTRACTOR RECEIVED MATERIAL FOR THE CONSTRUCT ION OF THE ROAD. THE AMOUNTS IN QUESTION REPRESENTED PURCHASES MADE ON CREDITS. ACCORDING TO SECTION 68 OF THE ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF ACCOUNT OF AN ASSESS EE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE SAME OR THE EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY IN T HE OPINION OF THE ASSESSING OFFICER, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INC OME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IT HAS BEEN CATEGORICALLY RECORDED BY THE TRI BUNAL THAT THE PROVISIONS OF SECTION 68 OF THE ACT U)ERE CLEARLY NOT ATTRACTED TO THE AMOUNT R EPRESENTING PURCHASES MADE ON CREDITS. FURTHER THE TRADE CREDITORS IN THE EARLIER GEARS I. E. ASSESSMENT YEARS 2007-08 AND 2008-09 STOOD ACCEPTED IN SCRUTINY ASSESSMENTS. THUS, THE G ENUINENESS OF EXPENSES UNDER CONSIDERATION COULD NOT BE DOUBTED. THE RELEVANT FI NDINGS RECORDED BY THE TRIBUNAL IN THIS REGARD READ THUS:- 'HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD, IT IS SEEN THAT IN PARA-3 OF THE ASSESSMENT ORDER, THE AO OBSERVED THAT THE ASSESSEE HAD SHOWN NUMEROUS SUNDRY CREDITORS ALONG WITH DETAILS AS WAS AVAILABLE FROM THE EXAMINATION OF THE ASSESSEE'S BOOKS OF ACCOUNT VIS- A-VIS HIS BALANCE SHEET. THE ASSESSEE IS A ROAD CONTRACTOR. HE RECEIVED MATERIAL FOR THE CONSTRUCTION OF THE ROAD. THE AMOUNTS IN QUESTION REPRESENTED PURCHASES MADE ON CREDITS. THE PROVISIONS OF SECTION 68 OF THE ACT ARE CLEARLY NOT ATTRACTED TO AMOUNT REPRESENTING PURCHASES MADE ON CREDITS, AS IS ALSO HELD IN 'CIT VS. PANCHAMDASS JAIN', 205 CTR 444 (ALL). THE ASSESSEE RAISED THIS ISSUE BY WAY OF WRITTEN SUBMIS SIONS (APB 37 TO 160, RELEVANT PORTION AT PARA-5, ON PAGE 43) DATED 10.05.2014 FIL ED BEFORE THE CIT(A). THE LD. CIT(A) HAS, HOWEVER, NOT ADDRESSED THIS GRIEVANT AT ALL AND MERELY UPHELD THE ADDITION MADE UNDER SECTION 68 OF THE ACT ON BEHALF OF THE ASSESSEE, A COMPARATIVE CHART OF NET PROFIT RATE OF THE ASSESSEE FOR THE AS SESSMENT YEARS 2005-06 TO 2011-2012 HAS BEEN FILED BEFORE US. IN THE EARLIER YEARS ALSO , NO SUCH ADDITION WAS MADE. FOR THE ASSESSMENT YEAR 2007-08, UNDER SCRUTINY ASSESSMENT, THE ASSESSMENT WAS MADE AT 8%. THE POSITION REMAINED MUCH THE SAME FOR THE ASSESSM ENT YEAR 2008-09. THE YEAR UNDER CONSIDERATION IS ASSESSMENT YEAR 2009-10. THE MATERIAL SUPPLIED TO THE ASSESSEE BY THE CONCERNED DEPARTMENT IS PART OF THE ASSESSEE 'S TURNOVER. THE NET PROFIT RATE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION U)AS IN LINE WITH THE PRECEDING ASSESSMENT YEAR. FURTHER, THE TRADE CREDITORS IN TH E EARLIER YEARS, I.E. ASSESSMENT YEARS 2007-08 AND 2008-09 STANDS ACCEPTED IN SCRUTINY ASS ESSMENTS. THUS, THE GENUINENESS OF THE EXPENSES UNDER CONSIDERATION CANNOT BE DOUBT ED. MOREOVER, THE GENUINENESS OF THE EXPENDITURE WAS NOT AT ALL CALLED INTO QUESTION . IT WAS ONLY THAT NO-VERIFICATION THEREOF RAISED DOUBT OF THE INCURRENCE THEREOF. THE N, EVEN IF THE CREDITS CONCERNING THE PURCHASES AND TRANSPORTATION OF THE MATERIAL ARE NO T TO BE ACCEPTED, AS DISCUSSED, STILL, THE PROVISIONS OF SECTION 68 OF THE ACT CANN OT BE INVOKED TO MAKE THE ADDITION. 5. LEARNED COUNSEL FOR THE APPELLANT-REVENUE HAS NO T BEEN ABLE TO SHOW THAT THE FINDINGS RECORDED BY THE TRIBUNAL ARE ILLEGAL OR PERVERSE OR BASED ON MISREADING OF ANY MATERIAL 14 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 ONRECORD, WARRANTING INTERFERENCE BY THIS COURT. TH US, NO SUBSTANTIAL QUESTION OF LAW ARISES. CONSEQUENTLY, THE APPEAL STANDS DISMISSED. 19. WE ARE ALSO UNABLE TO AGREE WITH THE LD. CIT DR S INTERPRETATION OF THE PROVISIONS OF SECTION 68 OF THE ACT. WE NOTE THAT HIS ARGUMENT TH AT THE PROVISIONS OF SECTION 68 ARE APPLICABLE TO ANY AND EVERY CREDIT ENTRY IN THE BOO KS OF ACCOUNTS INTER ALIA INCLUDING BOOK ENTRIES, BARTER TRANSACTIONS, OUTSTANDING LIABILITY PAYABLE IN RESPECT OF PURCHASES HAS BEEN SPECIFICALLY NEGATED BY COORDINATE BENCH OF THIS TR IBUNAL IN THE CASE OF ANAND ENTERPRISES LTD (ITA-1614/KOL/2016), BY OBSERVING AS UNDER: 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. AT THE OUT SET, WE FIND THAT THE ASSESSEE HAD NOT RAISED ANY SHARE CAPITAL BY RECEIPT OF CASH CONSIDERATION IN THE INSTANT CASE. THE SHARES WERE ISSUED FOR CONSIDERATION OTHER THAN CASH IN LIEU OF ASSESS EE COMPANY MAKING INVESTMENT IN SHARES IN SOME OTHER COMPANY. EFFECTIVELY, THE ASSESSEE PURCH ASED CERTAIN SHARES FROM THE AFORESAID SIX SHAREHOLDERS AND INSTEAD OF PAYING CASH TO THEM, TH E ASSESSEE COMPANY ISSUED SHARES IN ITS OWN COMPANY TO THOSE SHAREHOLDERS. HENCE THE ASSESSEE H AD MADE INVESTMENTS IN SHARES OF ANOTHER COMPANY FOR WHICH CONSIDERATION WAS SETTLED THROUGH ISSUANCE OF ITS SHARES TO THOSE SHAREHOLDERS. NOW THE CRUCIAL POINT IS WHETHER THE PROVISIONS OF SECTION 68 COULD BE INVOKED IN THE INSTANT CASE FOR MAKING INVESTMENT TOWARDS SHAR E CAPITAL. THERE WAS NO RECEIPT OF ANY SUM AS PROVIDED U/S 68 OF THE ACT IN THE INSTANT CASE. IT WOULD BE PERTINENT HERE TO REFER TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SH RI H.H. RAMA VARMA VS. CIT REPORTED IN 187 ITR 308 (SC) WHEREIN IT WAS HELD THAT 'ANY SUM' MEANS 'SUM OF MONEY'. WE FIND THAT LD. CIT(A) HAD DELETED THE ADDITION BY OBSERVING AS UND ER: '6. ON CONSIDERATION OF THE AR'S SUBMISSION, ESPECI ALLY THE PORTION REPRODUCED ABOVE, IT IS SEEN THAT SECTION 68 OF I.T. ACT, 1961 DOES NOT APPLY TO CASES OF PURCHASE OF SHARE ASSETS AND ALLOTMENT OF SHARES BY THE APPELLANT WHEN PURCHASE AND ALLOTMENT ARE UNDER A BARTER SYSTEM. THE AO HAS NOT REFUTED THE APPELLANT'S CLAIM THAT S HARES WERE ALLOTTED IN EXCHANGE FOR ACQUISITION OF SHARES BY THE APPELLANT FROM THE COM PANIES WHICH SURRENDERED SUCH SHARES TO THE APPELLANT. THOUGH AS PER THE AO TO APPLY SECTION 68 TO MAKE THE SAID ADDITION IN THE APPELLANT'S HAND. TRANSACTIONS PURPORTEDLY EXECUTED BY ENTRY OP ERATORS INVOLVE MULTIPLE LAYERS AND OTHER COMPLEXITIES, INTRODUCING DELAYS IN INTRODUCTION OF UNACCOUNTED CASH/MONEY AND MULTIPLE PLAYERS BEING INCORPORATED ENTITIES. MEASURES TAKEN BY THE AO IN THE COURSE OF THE ASSESSMENT PROCEEDING FALLS MUCH SHORT OF WHAT IS REQUIRED TO BE DONE IN SUCH CASE LAWS, WHICH HAVE EVOLVED ON THIS ISSUE, CALL FOR CONCERTED ACTIONS O N THE PART OF THE AO PINPOINTING UTILIZATION OF UNEXPLAINED/UNACCOUNTED/UNTAXED MONEY AND THE PLAYE RS AND THE BENEFICIARIES EFFECTIVELY USING THE WEBLIKE SCHEME TO PLUNDER BLACK MONEY. FOR EXAM PLE INTRODUCTION AND USE OF BLACK MONEY IN THE PRESENT CASE MAY BE AT A DIFFERENT POINT OF TIME AND IN DIFFERENT HANDS. THE AO'S ACTION IN 15 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 THE PRESENT CASE CANNOT BE UPHELD IN LAW. I, THEREF ORE, DELETE THE ADDITIONS AND GROUNDS OF APPEAL NOS. 3 & 4 ARE ALLOWED.' 4.1. WE FIND THAT THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. SOHANLAL SINGHANIA REPORTED IN 235 ITR 616 (ALL) HAD HELD IN THE CONTE XT OF ALLOWABILITY OF DONATION AS DEDUCTION U/S 80G OF THE ACT THAT THE EXPRESSION 'ANY SUM PAI D' USED IN THE SAID SECTION DENOTES ' SUM OF MONEY PAID' . HENCE IF CERTAIN SHARES WERE DONATED BY A PERSON, THEN THE SAME WOULD NOT FALL ELIGIBLE FOR DEDUCTION U/S 80G OF THE ACT. WE ALSO FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JATIA INVESTMENT COMPANY- (CO. ) VS. CIT REPORTED IN 206 ITR 718 (CAL) ALSO SUPPORTS THE CASE OF THE ASSESSEE HEREIN, WHER EIN IT WAS HELD AS UNDER: 'IT IS FINALLY EMPHASISED BY LEARNED COUNSEL FOR TH E ASSESSEE THAT THE ULTIMATE RESULT IS THAT THE FIRM BECOMES A DEBTOR TO GB AND CO. AND THE THREE N ON-FINANCIAL COMPANIES OF THE GROUP GOT DISCHARGED. LEARNED COUNSEL ALSO EMPHASISED THAT, A T THE WORST, IT CAN BE SAID THAT THE ASSESSEE- FIRM HAS RECEIVED VALUABLE ASSETS BEING THE SAID SH ARES OF THE EQUIVALENT VALUE OF THE DEBT TAKEN OVER BY IT FROM THE COMPANIES, I.E., RS. 11.20 LAKH S. THEREFORE, THE QUESTION OF CASH CREDIT DOES NOT COM E IN, THERE BEING NO ACTUAL PASSING OR RECEIPT OF CASH. IN OTHER WORDS, THE TRANSACTIONS ARE MERE BOOK ENTRIES. IT WAS CONTENDED THAT THE FACT THAT THE ENTRIES PASSED THROUGH THE CASH BOOK COULD NOT DETRACT FROM OR EFFACE THE ESSENTIAL NATURE OF THE ENTRIES. IT WAS ALSO URGED THAT THE E NTRIES WERE PASSED THROUGH THE CASH BOOK SO THAT THE REPAYMENT OF LOANS BY THE SAID THREE COMPA NIES COULD BE ESTABLISHED BEFORE THE RESERVE BANK OF INDIA. BUT, ACCORDING TO SHRIBAJORIA, THAT DOES NOT MEAN THAT IT AMOUNTS TO AN ARTIFICE EMPLOYED TO DECEIVE ANY AUTHORITIES, BECAUSE THE TR ANSACTIONS SHOWING THE AMOUNT AS RECEIVED IN CASH AND PAID AWAY SPONTANEOUSLY AND SIMULTANEOU SLY WERE NOT ACTUAL BUT ONLY NOTIONAL. HE, HOWEVER, STATED THAT, AS FAR AS THE QUESTION OF SEC TION 68 IS CONCERNED, THE NATURE OF THE TRANSACTIONS AND THE ENTRIES CLEARLY SHOW THAT NO C ASH, IN FACT, FLOWED. IT WAS FURTHER STRESSED THAT THE TRANSACTIONS ARE ABOVE BOARD. NO OUTSIDER IS INVOLVED. THE ENTRIES WERE MADE IN THE BOOKS OF THE CONCERNS OF THE SAME GROUP. THE SHARES IN QUESTION WERE ALSO OF THE COMPANIES OF THE GROUP. THERE WAS NO ATTEMPT AT HIDING THE TRANS ACTIONS. NOR IS IT THE CASE OF ANY OF THE PARTIES TO THE TRANSACTION THAT THERE WAS ANY PASSI NG OF CASH. EVERY PARTY UNEQUIVOCALLY STATED THAT THE TRANSACTIONS WERE CARRIED INTO EFFECT MERE LY BY WAY OF ADJUSTMENTS OF THE SAID LOANS AND THE SHARE TRANSFERS. SHRI A. C. MOITRA, THE LEARNED ADVOCATE FOR THE REV ENUE, REITERATED THE GROUNDS ON WHICH THE TRIBUNAL HAS AFFIRMED THE ADDITION OF THE AMOUNT OF RS.11.20 LAKHS AS UNEXPLAINED CASH CREDIT. HE PARTICULARLY EMPHASISED THAT THE ASSESSEE'S CONT ENTION THAT THE ENTRIES ARE ONLY ADJUSTMENT ENTRIES IS NOT ACCEPTABLE, BECAUSE THE ADJUSTMENT E NTRIES ARE NOT MADE THROUGH THE CASH BOOK. IT IS AN ACCEPTED PRINCIPLE OF ACCOUNTING THAT BOOK AD JUSTMENTS AND THE ENTRIES IN EFFECTING THEM ARE MADE BY JOURNAL ENTRIES AND NOT CASH ENTRIES. H E URGED THAT THE PURPORTED MOTIVE OF THE ENTRIES BEING THE REDUCTION OF LOANS OF THE THREE L IMITED COMPANIES DOES NOT EXPLAIN THE WHOLE MATTER, BECAUSE THE ENTRIES ARE CASH ENTRIES. THE F ACT REMAINS THAT, AT EVERY STAGE, THE PARTIES SHOWED THE PAYMENTS AND RECEIPTS OF CASH EVEN WHEN THERE WAS NO CASH AVAILABLE FOR SUCH ENTRIES. THIS QUITE JUSTIFIES THE ADDITION AS SUSTA INED BY THE TRIBUNAL. 16 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 WE HAVE PERUSED THE ASSESSMENT ORDER CAREFULLY. WE FIND THAT CASH DID NOT PASS AT ANY STAGE THOUGH ENTRIES WERE MADE IN THE CASH BOOK SHOWING P AYMENTS AND RECEIPTS; BUT SINCE THE ENTRIES MADE A COMPLETE ROUND, NO PASSING OF CASH WAS NECES SARY FOR THE PURPOSE OF MAKING THE ENTRIES. THAT THERE WAS NO PASSING OF CASH IS ALSO ADMITTED BY THE INCOME- TAX OFFICER HIMSELF. WE HAVE ALREADY EXTRACTED THE OBSERVATION OF THE INCOME- TA X OFFICER IN PARAGRAPH 14 OF HIS ASSESSMENT ORDER. THE INCOME- TAX OFFICER HAS CLEARLY OPINED T HAT ALL THE RESPECTIVE PARTIES DID NOT RECEIVE CASH NOR DID PAY CASH AS NONE HAD ANY CASH FOR THE PURPOSE.THE ONLY POINT IN THE ASSESSMENT ORDER IS THAT THE ENTRIES NOT INVOLVING THE PASSING OF CASH SHOULD NOT HAVE FOUND A PLACE IN THE CASH BOOK, BUT IN THE LEDGER ACCOUNT THROUGH JOURNA L ENTRIES. THERE IS ANOTHER SELF- CONTRADICTION IN THE INCOME-TAX OFFICER'S FINDING T HAT, IF THERE WAS NO REAL CASH ENTRY ON THE CREDIT SIDE OF THE CASH BOOK, BUT MERELY A NOTIONAL OR FICTITIOUS CASH ENTRY, AS ADMITTED BY HIM, THERE IS NO REAL CREDIT OF CASH TO ITS CASH BOOK ; THE QUESTION OF INCLUSION OF THE AMOUNT OF THE ENTRY AS UNEXPLAINED CASH CREDIT CANNOT ARISE. ONE OF THE GROUNDS OF THE TRIBUNAL FOR DISBELIEVING THE ASSESSEE'S CASE IS THAT THE ADJUSTMENT ENTRIES WERE MADE BY NOTIONAL CASH ENTRIES WITH A V IEW TO BRINGING DOWN THE DEBT-AND-CAPITAL RATIO, I.E., THAT WHILE BEING DISCHARGED OF THE DEB T THE SAID COMPANIES ALSO JETTISONED THEIR ASSETS, I.E., THE SHARES HELD BY THEM OF EQUIVALENT SUM WITHOUT ACHIEVING THE AVOWED PURPOSE. HERE THE TRIBUNAL CERTAINLY MISDIRECTED ITSELF. THE RATIO TO BE REDUCED IS OF THE LOAN IN RELATION TO THE SHARE CAPITAL AND THE RESERVES. JETTISONING THE SHARES HAD THE DESIRED EFFECT OF REDUCING THE BORROWED CAPITAL. AGAIN, AS REGARDS THE TRIBUNAL'S REFUSAL TO TAKE NO TICE OF THE DIRECTIONS OF THE RESERVE BANK, IT IS NOT CORRECT FOR THE TRIBUNAL TO HOLD THAT THE SAID DOCUMENT WAS A NEW EVIDENCE IN THE TRUE SENSE OF THE TERM. THE ASSESSEE HAS BEEN CONSISTENTLY PLE ADING BEFORE THE LOWER AUTHORITIES THAT THE ENTRIES HAD TO BE MADE IN ORDER TO BRING THE COMPAN IES IN CONFORMITY WITH THE SAID DIRECTION. MOREOVER, THE DIRECTION OF THE RESERVE BANK IS A PU BLIC DOCUMENT WITHIN THE MEANING OF SECTION 74 OF THE EVIDENCE ACT, 1872. DOCUMENTS OF A PUBLIC NATURE AND PUBLIC AUTHORITY ARE GENERALLY ADMISSIBLE IN EVIDENCE SUBJECT TO THE MODE OF PROVI NG THEM AS LAID DOWN IN SECTIONS 76 AND 78 OF THE EVIDENCE ACT. IN OUR VIEW, THE EFFECT AND IMPORT OF THE TRANSACTI ONS IS THAT THE ASSESSEE TOOK OVER THE LIABILITY OF THE AFORESAID NON-FINANCIAL COMPANIES TO GB AND CO. IN EXCHANGE FOR THE SHARES AS AFORESAID. IN THE PREMISES, WE ANSWER ALL THE QUESTIONS, IN TH E AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE.' 4.2. IT WOULD BE PERTINENT TO NOTE THAT IN THE INST ANT CASE, THE LD. AO HAD NOT DOUBTED THE INVESTMENT MADE IN SHARES BY THE ASSESSEE COMPANY. THERE IS NO DISPUTE RAISED BY THE LD. AO WITH REGARD TO NUMBER OF SHARES; VALUE THEREON INVE STED BY THE ASSESSEE COMPANY. WE ALSO FIND THAT THE CO-ORDINATE BENCH DECISION OF PUNE TRIBUNA L IN THE CASE OF KANTILAL AND BROS. VS. ACIT REPORTED IN 52 ITD 412 (PUNE TRIB.) ALSO SUPPORTS T HE CASE OF THE ASSESSEE. 4.3. IN VIEW OF THE AFORESAID OBSERVATIONS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRECE DENTS RELIED UPON HEREINABOVE, WE HOLD THAT 17 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 THE LD. AO HAD ERRONEOUSLY INVOKED THE PROVISIONS O F SECTION 68 OF THE ACT TO THE FACTS OF THE INSTANT CASE, WHICH, IN OUR CONSIDERED OPINION, ARE NOT AT ALL APPLICABLE HEREIN. THIS IS A SIMPLE CASE OF ACQUIRING SHARES OF CERTAIN COMPANIES FROM CERTAIN SHAREHOLDERS WITHOUT PAYING ANY CASH CONSIDERATION AND INSTEAD THE CONSIDERATION WA S SETTLED THROUGH ISSUANCE OF SHARES TO THE RESPECTIVE PARTIES. MOREOVER, IN THE BALANCE SHEET OF THE ASSESSEE COMPANY IN THE SCHEDULE TO SHARE CAPITAL, IT IS VERY CLEARLY MENTIONED BY WAY OF NOTE THAT THE FRESH SHARE CAPITAL WAS RAISED DURING THE YEAR FOR CONSIDERATION OTHER THAN CASH. HENCE WE HOLD THAT PROVISION OF SECTION 68 OF THE ACT ARE NOT APPLICABLE IN THE INSTANT CASE AND ACCORDINGLY THE ENTIRE ADDITION DESERVES TO BE DELETED WHICH HAS RIGHTLY BEEN DONE BY THE LD. CIT( A) WHICH DOES NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISM ISSED. 20. WE ALSO FIND THE LD. CIT DRS RELIANCE ON THE J UDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF J.J. DEVELOPERS (SUPRA) I S MISPLACED AND IS CLEARLY DISTINGUISHABLE ON FACTS IN AS MUCH AS IN THAT CASE THE ASSESSEE CO MPANY HAD ACTUALLY RECEIVED MONIES FROM THE SHARE APPLICANTS; UNLIKE THE FACTS OF THE PRESE NT CASE WHEREIN THE CREDIT REPRESENTED LIABILITY TO BE PAID ON ACCOUNT OF OUTSTANDING DUES TOWARDS PURCHASE OF INVESTMENTS. HENCE THE ABOVE JUDGEMENT IS FACTUALLY DISTINGUISHED AND NOT APPLICABLE TO THE FACTS OF THIS CASE. 21. IN THE FACTS OF THE PRESENT CASE THE ENTIRE TRA NSACTION IN QUESTION WAS BETWEEN GROUP COMPANIES I.E. THE HOLDING COMPANY AND THE SUBSIDIA RY COMPANY I.E. THE ASSESSEE COMPANY. ALSO THERE IS NO RECEIPT OF MONEY RATHER THERE IS A LIABILITY ON THE ASSESSEE COMPANY TO PAY OUTSTANDING PURCHASE AMOUNT TO M/S. APL. WE FURTHER NOTE FROM THE MATERIAL ON RECORD THAT THERE WAS NO CASH INVOLVED IN ANY STAGE OF THE TRAN SACTION AND THAT IN THE SUBSEQUENT ASSESSMENT YEAR ITSELF THE TRANSACTION HAS BEEN SQU ARED UP BY THE ASSESSEE COMPANY BY ISSUE OF DEBENTURES. IN OUR CONSIDERED VIEW THEREFORE TH E DECISION HONBLE APEX COURT IN THE CASE OF H.H. SRI RAMA VERMA (SUPRA), HONBLE JURISD ICTIONAL HIGH COURT IN THE CASE OF M/S. JATIA INVESTMENT CO. (SUPRA) AND THE HONBLE MADRAS HIGH COURT IN THE CASE OF V R GLOBAL ENERGY PVT LTD (SUPRA) IS SQUARELY APPLICABLE TO TH E FACTS AND CIRCUMSTANCES OF THIS CASE. WE NOTE THAT THE AO ERRED IN UNDERSTANDING THE NUANCES OF THE NOTES FORMING PART OF THE AUDITED ACCOUNTS AND PROCEEDED ON AN ALTOGETHER WRONG FOOTI NG HOLDING THAT THE OUTSTANDING SUM REFLECTED TO BE PAYABLE TO M/S APL IN RELATION TO T HE INVESTMENTS PURCHASED FROM WAS REQUIRED TO SATISFY THE RIGORS OF SECTION 68 OF THE ACT. IN OUR CONSIDERED VIEW THEREFORE THE IMPUGNED ADDITION MADE U/S 68 WAS WHOLLY UNTENABLE ON THE GIVEN FACTS AND IN LAW. WE 18 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 HOWEVER ARE OF THE VIEW THAT THE AFORESAID ERROR HA D CREPT INTO THE ORDER OF THE AO SINCE THERE WAS NO PROPER COMPLIANCE AT THE ASSESSMENT ST AGE, SINCE THE ASSESSEE HAD OBJECTED TO THE VERY JURISDICTION OF ITO- WARD 51(4) WHO HAD I SSUED THE STATUTORY NOTICES. THOUGH THE LD CIT (A) HAS CALLED FOR A REMAND REPORT, AND THE AO HAD FURNISHED HIS REPORT, HOWEVER THE AO REMAINED SILENT ON THE ISSUE OF RECEIPT OF A CTUAL MONEY/ SUM IN HIS REPORT. THEREFORE, IN ALL FAIRNESS AND FITNESS OF THE MATTER, AND IN T HE GIVEN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE IMPUGNED ADDITION BACK TO TH E AO WITH A LIMITED DIRECTION TO VERIFY AND ASCERTAIN THE FACT AS TO WHETHER THE ASSESSEE H AD ACTUALLY RECEIVED ANY MONEY/CASH PURSUANT TO THIS TRANSACTION FROM ITS HOLDING COMPA NY DURING AY 2013-14. IF IT IS FOUND THAT THERE THE ASSESSEE COMPANY HAS NOT RECEIVED MONEY/C ASH FROM THE HOLDING COMPANY IN THE RELEVANT AY 2013-14, THEN IN OUR CONSIDERED VIEW SE CTION 68 OF THE ACT CANNOT BE APPLIED AND HENCE THE IMPUGNED ADDITION SHALL STAND DELETED . HOWEVER, IF ANY ELEMENT OF MONEY/CASH IS FOUND TO HAVE BEEN RECEIVED BY THE AS SESSEE COMPANY FROM M/S APL IN THIS TRANSACTION INVOLVING ACQUISITION OF INVESTMENTS, T HEN THE AO IS GRANTED FULL LIBERTY TO ASCERTAIN WHETHER THE ASSESSEE IS ABLE TO SATISFY T HE THREE INGREDIENTS CONTAINED IN SECTION 68 AND THEREAFTER MAKE ADDITION, IF ANY, AS PER LAW. A CCORDINGLY THE ORDER OF THE LD. CIT(A) STANDS SET ASIDE BACK ON THIS LIMITED ASPECT TO THE AO WITH THE SPECIFIC DIRECTIONS AS SET OUT IN THE FOREGOING. THE AO SHALL LIMIT HIMSELF TO THE INQUIRY AS DIRECTED HEREIN ABOVE. NEEDLESS TO SAY, THE AO SHALL ALLOW THE ASSESSEE SU FFICIENT OPPORTUNITY OF HEARING BEFORE PASSING THE ORDER. 22. BEFORE PARTING, IT IS RELEVANT TO MENTION THAT THE ASSESSEE HAD RAISED ADDITIONAL GROUNDS CHALLENGING THE LEGAL VALIDITY OF THE IMPUG NED ORDER WHICH WAS ADMITTED SINCE IT PURELY INVOLVED QUESTION OF LAW. ACCORDINGLY TO LD. AR OF THE APPELLANT THE NOTICES U/S 143(2) & 142(1) WAS NOT ISSUED BY THEIR JURISDICTIO NAL AO AND THEREFORE THE PROCEEDINGS CONDUCTED U/S 143(3) STOOD VITIATED AND THE IMPUGNE D ORDER WAS BAD IN LAW. THE LD. AR SUBMITTED THAT THE NOTICES U/S 143(2) & 142(1) WERE ISSUED BY ITO WARD 51(4) WHO DID NOT ENJOY THE JURISDICTION OF CORPORATE ENTITIES; LIKE ASSESSEE COMPANY AND WHEN THIS FACT WAS BROUGHT TO HIS NOTICE; HE TRANSFERRED THE FILE OF A SSESSEE TO THE ITO, WARD-2(2), KOLKATA WHO 19 ITA NO. 308/KOL/2017 ABHIJEET ENTERPRISE LTD. , AY 2013-14 NEVER ISSUED THE NOTICE U/S 143(2) WITHIN THE PERMI SSIBLE TIME LIMIT. WE ARE HOWEVER NOT INCLINED TO GO INTO THIS LEGAL ISSUE RAISED BY THE ASSESSEE, SINCE WE HAVE ALREADY ADJUDICATED THE MERITS OF THE ADDITION MADE IN THE FACTS AND CI RCUMSTANCES BY INVOKING SEC. 68 OF THE ACT AND, THEREFORE, THE LEGAL ISSUE RAISED BY THE ASSES SEE COMPANY IS LEFT OPEN. 23. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27/03/201 9 SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27TH MARCH, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT M/S. ABHIJEET ENTERPRISES LTD., 10, PRIN CEP STREET, 1 ST FLOOR, KOLKATA-700 072. 2 RESPONDENT ITO, WARD-2(2), KOLKATA. 3 4 5 CIT(A)-1, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR