DCIT CIRCLE-2(1), GWALIOR V. B.P. EDIBLE OIL PVT LTD, GWALIOR

ITA 347/AGR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7188 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 18-08-2017
• Court: TRIBUNAL

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO.347/AGR/2017 ASSESSMENT YEAR: 2011-12 DCIT, CIRCLE 2(1), GWALIOR. (APPELLANT) VS. M/S. B.P. EDIBLE OIL PVT. LTD., 92, JIWAJI GANJ, MORENA. PAN: AADCB1227C) (RESPONDENT) APPELLANT BY SH. WASEEM ARSHAD, SR. DR RESPONDENT BY S/SH. RAJENDRA SHARMA AND MANUJ SHARMA, ADVOCATES ORDER PER LALIET KUMAR, J.M.: THIS APPEAL IS BEING FILED BY THE REVENUE FEELING AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A) ON 09.05.2017 FOR THE ASSE SSMENT YEAR 2011-12 ON THE FOLLOWING GROUND : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN DELETING THE ADDITION O F RS.1,31,50,000/- ON ACCOUNT OF UNEXPLAINED CREDITS IN THE FORM OF SHARE APPLICATIO N MONEY, IN SPITE OF THE FACTS ON RECORDS THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY ADMISSIBLE EVIDENCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE AO AS REQUIRED. 2. THE BRIEF FACTS OF THE PRESENT CASE, AS RECORDED BY THE ASSESSING OFFICER ARE AS UNDER : DATE OF HEARING 03.07.2019 DATE OF PRONOUNCEMENT 30 .07.2019 ITA NO. 347/AGR/2017 2 THE CASE WAS SELECTED FOR SCRUTINY MANUALLY FOR TH E FOLLOWING REASONS : (1). SHARE APPLICATION MONEY OF THE ASSESSEE COMPAN Y HAS INCREASED FROM RS.24,50,000/- TO RS.1,31,50,000/-. THE IDENTITY AN D CREDITWORTHINESS OF THE PERSONS FROM WHOM MONEY HAS BEEN ACCEPTED NEEDS DET AILED VERIFICATION. (2). FIXED ASSETS OF THE ASSESSEE COMPANY HAVE INCR EASED FROM RS.1,42,82,380/- TO RS.1,75,22,202/-. (3). FOLLOWING REQUIRES VERIFICATION OF THE GENUIN ENESS AND CORRECTNESS: (A). SALARY AND WAGES PAID AMOUNTING TO RS.11,34, 125/- (B). CREDITORS AMOUNTING TO RS.1,31,15,424/- (4). THE ASSESSEE HAS SHOWN INCOME OF RS.5,32,602/- EVEN WHEN GROSS RECEIPTS OF THE COMPANY HAS INCREASED FROM 7,16,66,316/- TO RS.12,7 9,02,891/- WHICH REQUIRES DETAILED VERIFICATION. 2.1 THE ASSESSEE WAS CALLED UPON BY THE AO TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SHARE APPLICATION MONEY/SHA RE PREMIUM OF RS.1,31,50,000/-. THE ASSESSEE WAS ALSO ASKED TO PR ODUCE THE (I) COPY OF BANK ACCOUNT IN WHICH THE SHARE PREMIUM MONEY WAS CREDIT ED, (II) COPY OF BANK ACCOUNT OF SHARE APPLICANTS AND (III) COPY OF INCOME-TAX RE TURN OF SHARE APPLICANTS. IN RESPONSE TO THE SHOW AUSE NOTICE, THE ASSESSEE FILE D THE REPLY AND SUBMITTED THE FOLLOWING INFORMATION : (I). COPY OF BANK ACCOUNT OF ASSESSEE COMPANY (II). NAMES AND ADDRESSES OF THE SHARE APPLICANTS (III). PAN DETAILS OF THESE ENTITIES. HOWEVER, THE ASSESSEE HAS NOT FILED THE COPY OF BAN K ACCOUNT AS WELL AS THE RETURN OF INCOME AS SOUGHT BY THE AO. IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAD ITA NO. 347/AGR/2017 3 DISCHARGED THE PRIMARY ONUS BY DISCLOSING THE IDENT ITY OF THE SHARE APPLICANTS. THE ASSESSING OFFICER IN PARAGRAPH NO. 3.2 HAS TABULATE D VARIOUS SHARE APPLICATIONS FOR RS.1,31,50,000/- TO THE FOLLOWING EFFECT : S.NO. NAME OF SHARE APPLICANTS ADDRESS PAN AMOUNT OF SHARE APPLICATION MONEY 1 STARTRANS LOGISTICS PVT. LTD. U -16, SHANKARPUR, DELHI AAJC50491H 8,00,000 2 ACUMEN PAPER BINDERS PVT. LTD A-212, MAHLOTRA COMPLEX, SHAKARPUR, DELHI-92 AAACA2172J 22,00,000 3 SPAM AMUSEMENT PVT LTD D-25A, LAXMI NAGAR, DELHI AACOS2000B 22,00,000 4 SHREE BALAJI SAINATH BUILDWELL PVT LTD B-1058, SHASTRI NAGAR, KAROL BAGH, DELHI AAJCS7086E 2,00,000 6 HAPPENING MOTOR PVT LTD U-18, UPADHYAY BLOCK, SHAKARPUR BLOCK, DELHI-92 AAACH4607F 20,00,000 7 BGR FABRICON INDIA PVT LTD. A-115, GROUND FLOOR, SHAKARPUR, DELHI. AABCB8092K 13,50,000 8 R. J. FABTAX PVT LTD A-115, VAKIL CHAMBER SHAKARPUR, DELHI-92. AADCR3947D 6,00,000 9 STEN BERNIE SURGICAL LASER PVT LTD D-25, FIRST FLOOR, LAXMI NAGAR, DELHI-92. AAICS0183K 26,00,000 10 ANJ FOREX SERVICES PVT LTD. A-215, GROUND FLOOR, SHAKARPUR , DELHI AAGCA8287L 6,00,000 ITA NO. 347/AGR/2017 4 THE ASSESSING OFFICER HAS SENT NOTICE U/S. 133(6) O F THE ACT TO ASCERTAIN THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF 10 SHARE APPLIC ANTS. HOWEVER, THE NOTICES SENT TO 10 SHARE APPLICANTS WERE RETURNED UN-SERVED. AS MENTIONED IN PARA 3.5, IT WAS MENTIONED THAT ONCE THE NOTICE WAS SENT TO SHRI BAL AJI SAINATH BUILDWEL AT B-1058, SHASTRI NAGAR, KAROL BAGH, DELHI, THE POSTAL DEPARTMENT RECORDED THAT NO SUCH COMPANY EXISTED AT THE GIVEN ADDRESS. THE ASSESSING OFFICER IN PARAGRAPH NO. 3.7 HAS REPRODUCED THE ORDER SHEET ENTRY OF THE ASSESSM ENT PROCEEDINGS DATED 27.03.2014 TO THE FOLLOWING EFFECT : '27.03.2014 SHRI CHETRAM GOYAL, DIRECTOR OF THE ASSESSEE COMPAN Y AND SHRI SHYAM GOYAL, CA, ATTENDED. CASE DISCUSSED ON THE FOLLOWING POINTS: THE ISSUE OF RECEIVING RS. L,31,50,000/ - AS SHARE APPLICATION MONEY (WITH SHARE CAPITAL AND SHARE PREMIUM) WAS DISCUSSED. IT WAS AS KED WHETHER THERE HAD BEEN A VALUATION OF THE SHARES OF THE ASSESSEE COMPANY. T HE AR SUBMITTED THAT NO VALUATION HAD BEEN DONE. RATHER, IT WAS A TENTATIVE APPROXIMAT E VALUE OF THE SHARES THAT WAS CALCULATED BASED ON THE NORMS OF THE MARKET. THE AR WAS ASKED WHETHER THE ASSESSEE COMPANY HAD PROJECTED ANY EXPANSION PLANS, OR WAS IN NEED OF CASH / WORKING CAPITAL BECAUS E OF WHICH TAKING SUCH AN AMOUNT AS SHARE PREMIUM WAS NECESSITATED. TO THIS, SHRI CHETRAM GOYAL RESPONDED THAT THE ASSESSEE COMPANY WAS NOT IN NEED OF CASH, BUT THE A MOUNT SO RECEIVED WAS UTILIZED IN WORKING CAPITAL OF THE COMPANY. IT WAS ONLY AN INV ESTMENT OPPORTUNITY PRESENTED BY HIS UNCLE, AND THE ASSESSEE COMPANY RESPONDED BY TAKING SUCH INVESTMENTS. THE DETAILS ABOUT THE INVESTORS WERE ALSO ASKE D. SHRI CHETRAM GOYAL INFORMED THAT ALL THE INVESTING CONCERN BELONG TO THE SAME CO MMUNITY, AND MIGHT BE RELATED TO EACH OTHER. CASE DISCUSSED AND ADJOURNED SINE DIE.' ITA NO. 347/AGR/2017 5 BASED ON THE ABOVE SAID CONCLUSION, THE ASSESSING O FFICER MADE AND CONFIRMED THE ADDITION OF RS.1,31,50,000/- AND THE FINDINGS RECOR DED BY THE ASSESSING OFFICER IN PARA 3.9 TO 3.11 TO THE FOLLOWING EFFECT : 3.9. THE ABOVE DISCUSSION ESTABLISHES THIS BEYOND DOUBT THAT THE COMPANIES HAVE BEEN USED AS CONDUITS TO ROUTE THE A SSESSEE COMPANY'S UNACCOUNTED FUNDS IN THE GUISE OF SHARE PREMIUM. 3.10. IN VIEW OF THE ABOVE DISCUSSION AMOUNT OF RS. 1,31,50,000/- RECEIVED BY THE ASSESSEE COMPANY, DURING THE YEAR UNDER CONSIDERATION, IN FO RM OF SHARE APPLICATION MONEY AND SHARE PREMIUM ARE TREATED AS UNEXPLAINED CREDITS OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT AND ARE ADDED TO THE TOTAL INCOME OF THE ASSESS EE FOR THE YEAR UNDER CONSIDERATION. 3.11. PENALTY PROCEEDINGS ARE SEPARATELY BEING INIT IATED FOR CONCEALMENT OF INCOME / FURNISHING INACCURATE PARTICULARS OF INCOME. (ADDITION OF RS. 1,31,50,OOO/-) 3. THE ASSESSEE FEELING AGGRIEVED BY THE ORDER PASS ED BY THE ASSESSING OFFICER PREFERRED AN APPEAL BEFORE THE COMMISSION. BEFORE T HE COMMISSIONER, THE ASSESSEE HAD FILED VARIOUS WRITTEN SUBMISSIONS AND ALSO FILE D DOCUMENTS. IN ALL FAIRNESS, THE LD. COMMISSIONER HAS FORWARDED THE DOCUMENTS TO THE ASSESSING OFFICER SEEKING HIS COMMENTS/REMAND REPORT. THE ASSESSING OFFICER VIDE LETTER DATED 03.04.2017 HAD SUBMITTED THE REMAND REPORT AND IN THE REMAND REPOR T, WHICH IS PART OF THE APPELLATE ORDER, AT PAGE 30 IT WAS MENTIONED AS UND ER : GROUND NO. 1. ADDITION OF RS.1,31,50,000/- ON ACCO UNT OF UNEXPLAINED SHARE APPLICATION MONEY RECEIVED. REPLY OF GROUND NO. 1. ON GOING THROUGH THE RECORD, IT HAS BEEN NOTED THAT THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED SHARE APPLICATION MONEY FR OM TEN VARIOUS COMPANIES TO THE TUNE OF RS.1,31,50,000/-. DURING THE COURSE OF REMAND PR OCEEDINGS LETTERS HAVE ALSO BEEN ISSUED TO ALL THE TEN SHARE APPLICANTS AND ALL THE APPLICA NTS HAVE CONFIRMED TO HAVE SHARE APPLICATION EXCEPT ONE APPLICANT NAMELY SHREE BALAJ I SAINATH BUILD WELL PVT. LTD. THROUGH THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED SHARE APP LICATION AMOUNTING TO RS.2,00,000/-. THE CONFIRMATION RECEIVED HAS PLACED IN THE ASSESSM ENT FILE. THIS FACT HAS ALSO BEEN EXAMINED BY THE ITO-1, MORENA IN THE A.Y. 2012-13. ITA NO. 347/AGR/2017 6 FURTHER THE CATEGORICAL FINDINGS OF THE A.O. IN THE ASSESSMENT ORDER [PARA 3 TO 3.11] CANNOT BE IGNORED, HENCE, IN VIEW OF THE ABOVE FINDING THE AO HAS RIGHTLY MADE THE ADDITIONS UNDER S. 68 OF THE IT ACT, 1961 AS UNEXPLAINED CREDITS. 3.1 THEREAFTER, THE COMMISSIONER DISCUSSED THE ORDE R PASSED BY THE ASSESSING OFFICER AND REPRODUCED THE ORDER IN PARA 5.1.5 TO 5 .6 AS UNDER : 5.1.5. NOW, FROM THE DISCUSSION IN THE ASSESSMENT ORDER, IT WOULD APPEAR THAT THE ASSESSING OFFICER HAS DISBELIEVED THE GENUINENESS O F THE TRANSACTIONS IN RESPECT OF RECEIPT OF SHARE APPLICATION MONEY AGGREGATING TO RS. 1,31, 50,000/- FROM THE AFORESAID TEN PARTIES TREATING THE TRANSACTIONS AS SUSPICIOUS. THE NON-CO MPLIANCE WITH NOTICES UNDER SEC. 133(6) OF THE ACT BY THE PARTIES LENT SUPPORT TO THE ASSES SING OFFICER TO HOLD THAT THE ENTRIES RELATING TO SHARE APPLICATION MONEY REMAINED UNEXPL AINED. HOWEVER, WHETHER THE CREDIT ENTRIES REPRESENTED THE INCOME OF THE APPELLANT COM PANY HAS TO BE EXAMINED STRICTLY IN THE LIGHT OF THE PROVISIONS OF SECTION 68 OF THE IT ACT . WHETHER THE APPELLANT COMPANY DISCHARGED ITS ONUS PROOF IS TO BE JUDGED FROM THE MATERIAL EVIDENCE BROUGHT ON RECORD. 5.1.6. IN THIS CASE, THE APPELLANT COMPANY HAD FILE D (I) APPLICATION FORMS FOR SHARE APPLICATION MONEY; (II) COPY OF ASSESSEE'S BANK ACC OUNT IN WHICH THE SHARE APPLICATION MONEY WAS CREDITED; (III), NAMES AND ADDRESSES OF T HE SHARE APPLICANTS; AND (IV) PAN OF SHARE APPLICANTS. THUS, IT IS APPARENT THAT THE A PPELLANT COMPANY HAD DISCHARGED ITS PRIMARY ONUS OF PROOF. IT IS FURTHER NOTED THAT THE ASSESSING OFFICER HAVING ISSUED NOTICES U/ S 133(6) OF THE ACT AND SUCH NOTICES HA VING BEEN RETURNED UNSERVED, HAS NOT CONFRONTED THE APPELLANT WITH THE FACTS AND DID NOT REQUIRE IT TO ADDUCE FURTHER EVIDENCE, IF ANY, TO PROVE THE GENUINENESS OF THE TRANSACTIONS. THE FINDING OF THE ASSESSING OFFICER THAT THE TRANSACTION OF SHARE APPLICATION WAS NOT BASED ON ANY FORMAL VALUATION CARRIED OUT BY THE ASSESSEE COMPANY, FOR DETERMINATION OF I TS SHARE PRICE; THAT THE ASSESSEE COMPANY HAD NO EXPANSION PLANS WHICH MADE IT CALL F OR SUCH SUBSTANTIAL INVESTMENT; AND THAT THE ASSESSEE COMPANY WAS IN NO REQUIREMENT OF CASH OF WORKING CAPITAL SO AS TO INVITE SUCH AN INVESTMENT AND THE SHARE AP PLICANTS WERE CLOSELY RELATED DID NOT BY ITSELF PROVE THAT THE CREDITS APPEARING IN THE BOOK S OF THE APPELLANT COMPANY IN THE FORM OF SHARE APPLICATION MONEY AND SHARE PREMIUM REPRE SENTED ITS INCOME OF THE FINANCIAL YEAR RELEVANT FOR THE ASSESSMENT YEAR UNDER CONSIDE RATION. THOUGH THE SHARE APPLICANTS APPARENTLY DID NOT RESPOND TO NOTICES UNDER SEC. 133(6) OF THE ACT, IT IS EVIDENT THAT DURING THE COURSE OF REMAND PROCEEDINGS LETTERS HAVE ALSO BEEN ISSUED TO ALL THE TEN SHARE APPLICANTS AND ALL THE APPLICANTS HAVE CONFIRMED TO HAVE SHARE APPLICATION EXCEPT ONE APPLICANT NAMELY SHREE BALAJI SAINATH BUILD W ELL PVT. LTD, THOUGH THE ASSESSEEE HAS CLAIMED TO HAVE RECEIVED SHARE APPLICATION AMOUNTIN G TO RS. 2.00,000/- THE ASSESSING OFFICER REPORTED THAT CONFIRMATION RECEIVED IS PLAC ED IN THE ASSESSMENT FILE. HE FURTHER REPORTED THAT THIS FACT HAS ALSO BEEN EXAMINED BY T HE I.T.O.-L, MORENA IN THE A.Y. 2012-13. THE INFORMATION PLACED ON RECORD FURTHER SHOWS THAT THE SHARE APPLICANTS WERE IN EXISTENCE IN THE SUBSEQUENT YEARS, THE PRESENT ACIT, CIRCLE-2 (L) HAS GOT CONFIRMATION FROM THEM DURING THE YEAR 2016-17 IN THE COURSE OF REMAND PRO CEEDINGS. THERE IS ALSO MERIT IN SUBMISSION OF THE APPELLANT COMPANY THAT IT HAS MAD E SUBSTANTIAL EXPANSION IN ITS BUSINESS, AS A RESULT OF WHICH THE TURNOVER OF THE APPELLANT INCREASED TO RS. 12,79,02,891/-AS AGAINST ITA NO. 347/AGR/2017 7 THE TURNOVER OF RS. 7,16,66,316/- OF THE IMMEDIATEL Y PRECEDING YEAR, APART FROM NEW INVESTMENT IN STONE BUSINESS. ON THESE FACTS AND CI RCUMSTANCES OF THE APPELLANT, IT IS ABUNDANTLY CLEAR THAT THE APPELLANT COMPANY HAD DIS CHARGED ITS ONUS OF PROVING THE INGREDIENTS OF GENUINE CREDITS UNDER SECTION 68 OF THE IT ACT, 1961. EVEN IN THE CASE OF SHREE BALAJI SAINATH BUILD WELL PVT. LTD, THE APPEL LANT COMPANY HAD FILED CONFIRMATION AND OTHER DOCUMENTS TO ESTABLISH THE IDENTITY AND GENUI NENESS OF THE TRANSACTION OF DEPOSIT OF SHARE APPLICATION MONEY OF RS.2,00,000/-. NEITHER D URING ASSESSMENT PROCEEDINGS, NOR DURING REMAND PROCEEDINGS, DID THE ASSESSING OFFICE R PUT THIS ISSUE TO THE APPELLANT OR UNDERTAKE FURTHER ENQUIRY TO SHOW THAT MONEY HAS BE EN INTRODUCED BY THE APPELLANT IN THE GARB OF SHARE APPLICATION MONEY AND SHARE PREMIUM. THE BASIS OF GRANT OF RELIEF TO THE ASSESSEE IS THA T DURING THE REMAND PROCEEDINGS, ALL THE SHARE APPLICANTS HAVE CONFIRMED TO HAVE SHARE A PPLICATIONS EXCEPT SHREE BALAJI SAINATH BUILDWELL PVT. LTD. IT WAS FURTHER REPORTED THAT THE SHARE APPLICANTS WERE IN EXISTENCE WHICH WAS CONFIRMED BY INCOME-TAX OFFICER , MORENA FOR THE ASSESSMENT YEAR 2012-13. 4. THE LD. DR HAD MADE VARIOUS LEGAL SUBMISSIONS AN D HAD SUBMITTED THAT NEITHER THE IDENTITY OF THE SHARE APPLICANTS NOR TH E GENUINENESS OF THE TRANSACTIONS HAVE BEEN EXAMINED BY THE COMMISSIONER AND HE HAD M ERELY RELIED UPON THE REMAND REPORT WHEREIN THE CONFIRMATION WAS FILED BY THE SHARE APPLICANTS SATING THAT THEY HAVE APPLIED FOR SHARES. THE LD. DR RELIE D UPON THE FOLLOWING JUDGMENTS : (I). CIT VS. VACMET PACKAGING(INDIA) PVT. LTD. ITA NO. 1 OF 2014- ALLD. HC. (II) CIT VS. ULTRA MODERN EXPORTS PVT. LTD., ITA N O. 262/2012 DEL. HC (III). ITO VS. BABU LAL JAIN, 116 TTJ JAB-741-IT AT JABALPUR (IV). CORNERSTONE PROPERTY INVESTMENTS PVT. LTD. V S. ITO-ITAT BANGALORE (V) CIT VS. M/S. SONI HOSPITAL PVT. LTD. ITA NO. 5 88/JP/2011-ITAT JAIPUR ITA NO. 347/AGR/2017 8 4.1. ON THE BASIS OF THE ABOVE SAID, IT IS SUBMITTE D THAT THE DELETION OF THE ADDITIONS MADE BY THE FIRST APPELLATE AUTHORITY IS WITHOUT AN Y BASIS AND IS THEREFORE, REQUIRED TO BE REVERSED BY THIS TRIBUNAL. 5. PER CONTRA, THE LD. AR HAD SUBMITTED THAT THE RE QUIREMENT OF LAW HAD DULY BEEN COMPLIED BY THE ASSESSEE WHICH HAS BEEN VERIFI ED BY THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS. THE CONFIRMATIONS AS RECORD ED BY THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS IS FORMING PART OF THE ORDER OF LD.CIT(A). HOWEVER, OUR ATTENTION WAS DRAWN TO PAPER BOOK FILED BY THE ASSE SSEE WHERE THE ASSESSEE HAS COMPILED THE FOLLOWING DOCUMENTS : (I). CONFIRMATION LETTERS (II). ITRS FOR THE ASSESSMENT YEAR 2012-13 AND 201 1-12 (III). COPY OF BANK ACCOUNT RELEVANT TO THE TRANSAC TIONS IN RESPECT OF ALL THE 10 COMPANIES. 5.1 ON THE BASIS OF THE ABOVE, IT WAS SUBMITTED THA T THE ASSESSEE HAS BROUGHT ON RECORD THE NECESSARY AND SUFFICIENT EVIDENCE TO SA TISFY THAT THE SHARE APPLICATION WAS GENUINE TRANSACTION AND THERE WAS NO ROUTING OF MONEY BY WAY OF SHARE APPLICATION MONEY. 6. DURING THE COURSE OF ARGUMENTS WE HAVE DIRECTED THE LD. DR TO PRODUCE THE (I)COPY OF THE ASSESSMENT ORDER AS MENTIONED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2012-13, WHEREBY THE GENUINENESS OF THESE COMP ANIES WERE CONFIRMED AND ITA NO. 347/AGR/2017 9 EXAMINED BY THE ITO, (II) THE REMAND REPORT AND THE CONTEXT IN WHICH THE REMAND REPORT WAS SOUGHT. PURSUANT TO THE DIRECTION ISSUED BY THE BENCH, THE ASSESSEE HAD FILED COPY OF THE ASSESSMENT ORDER FOR THE ASSESSME NT YEAR 2012-13 AND THE REVENUE HAD ALSO FILED COPY OF THE ASSESSMENT ORDER AND THE REMAND REPORT. FROM THE PERUSAL OF THE ASSESSMENT ORDER FOR A.Y. 2012-1 3, IT IS THE ASSESSING OFFICER IN THE ASSESSMENT ORDER MENTIONED AS UNDER : DJNKRK DEIUH US FORRH; OKZ 2011&12 DS NKSJKU VF/KD LS VF/KD KS;J FIZF;;E IZKIR DJUS DS VK/KKJ DKS TKAPUS GSRQ DGK X;K] FU/KKZJ.K DK;ZOKGH DS NKSJKU LHKH KS;J /KKJDKS DKS VK;DJ VF/KFU;E DH /KKJK 133 ( 6 ) DS RGR TKJH DJ MULS IZKIR I`FV I= ,O- CSAD [KKRK] VK;DJ FOOJ.KH DH DKWIH VKFN IZKIR FD;S FTUGSA TKWPK ,O- F JDKMZ IJ J[KK X;KA 6.1 FROM THE ORDER OF THE ASSESSING OFFICER FOR A.Y . 2012-13, IT IS CLEAR THAT THE ASSESSING OFFICER IN THE F.Y. 2011-12 HAD EXAMINED THE EXISTENCE OF THE SHARE APPLICANTS WHICH WAS SUBJECT MATTER OF THE PRESENT APPEAL. 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE RECORDS AND HAVE ALSO GONE THROUGH THE DECISIONS CITED BY BOTH THE PARTIES. AT THIS STAGE, IT WOULD BE SUFFICIENT TO MENTION HERE THAT FOR THE PURPOSE OF ADJUDICATING T HE LIST PENDING BEFORE US WHAT IS NECESSARY TO DETERMINE IS WHETHER THE ASSESSEE HAS DISCHARGED THE ONUS CAST UPON HIM BY VIRTUE OF SECTION 68 OF THE ACT OR NOT. ESSE NTIALLY, THIS IS A QUESTION OF FACT AND THEREFORE, IT HAS TO BE DECIDED BASED ON THE FACTS AVAILABLE ON RECORD AND THE JUDICIAL DECISIONS CITED BY BOTH THE SIDES WILL BE CONSIDERE D UNDER THE NARROW COMPASS. THE LD. CIT(A) SENT LETTER TO THE ASSESSING OFFICER ALO NG WITH THE DOCUMENTS AND WRITTEN ITA NO. 347/AGR/2017 10 SUBMISSIONS FOR SUBMITTING THE REMAND REPORT. THE A SSESSING OFFICER HAD SUBMITTED THE REMAND REPORT AND IN THE REMAND REPORT, IT WAS MENTIONED THAT THE LETTERS WERE SENT TO ALL THE 10 SHARE APPLICANTS AND ALL THE APP LICANTS HAVE CONFIRMED TO HAVE CONFIRMED TO HAVE MADE THE SHARE APPLICATION EXCEPT ONE BALAJI SAINATH BUILDWELL PVT. LTD., AS THE NOTICE SENT WAS RECEIVED UN-SERVE D. THE CONFIRMATIONS RECEIVED WERE ALSO PLACED ON RECORD BY THE ASSESSING OFFICER IN THE ASSESSMENT FILE. NOW, IN THE PRESENT CASE, THERE WERE TOTAL 10 SHARE APPLICA NTS, THE DETAILS OF WHICH ARE MENTIONED IN PARA 2.1. THE LD. CIT(A) HAD RELIED ON THE DECISION ON VARIOUS PARAMETERS INCLUDING FOLLOWING : (I). THAT THE ASSESSEE HAD PROVIDED THE COPY OF APP LICATION FORMS FOR SHARE APPLICATION MONEY; (II). THAT THE ASSESSEE HAD PROVIDED ITS BANK ACCOU NT IN WHICH SHARE APPLICATION MONEY WAS CREDITED; (III). NAMES AND ADDRESSES OF THE SHARE APPLICANTS WERE PROVIDED; (IV). PANS OF SHARE APPLICANTS WERE PROVIDED; (V). IN THE REMAND PROCEEDINGS, THE ASSESSING OFFI CER HAD CONFIRMED THAT NINE APPLICANTS EXCEPT SHREE BALAJI SAINATH BUILDWE LL PVT. LTD. (SL. NO. 4) HAD CONFIRMED THE SHARE APPLICATIONS MADE BY THEM. 7.1 THE ASSESSING OFFICER IN THE REMAND REPORT HAS NOT BROUGHT ON RECORD OR OTHERWISE AFTER ISSUING NOTICES U/S. 133(6) TO THE SAID SHARE APPLICANTS THAT THE COMPANIES WERE HAVING THE SUFFICIENT FUNDS IN THEIR ACCOUNT BEFORE MAKING ITA NO. 347/AGR/2017 11 APPLICATION FOR ALLOTMENT OF SHARES. THE AO HAS NOT BROUGHT ON RECORD THAT THE CASH AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT BY THESE S HARE APPLICANTS BEFORE APPLYING FOR THE ALLOTMENT OF SHARES. THE AO HAS AL SO NOT BROUGHT ON RECORD THAT THE MONEY BELONGING TO THE ASSESSEE HAVE BEEN ROUTED BY WAY OF SHARE APPLICATION MONEY THROUGH CONDUIT OF THESE SHARE APPLICANTS. IN OUR CONSIDERED OPINION, ONCE THE SHARE APPLICANTS (9) WERE TRACEABLE, THEIR PANS , BANK ACCOUNTS, RETURNS OF INCOME ARE AVAILABLE WITH THE ASSESSING OFFICER AND ALSO AVAILABLE IN THE FORM OF PAPER BOOK BEFORE THE TRIBUNAL, WHERE SPECIFIC SHAR E TRANSACTIONS HAVE BEEN ENTERED AND SHOWN BY THE APPLICANTS, IN THAT EVENTU ALITY, IN OUR CONSIDERED OPINION, THE ASSESSEE WAS ABLE TO DISCHARGE HIS ONUS. FOR TH E PURPOSE OF BRINGING HOME THE ADDITION U/S. 68 OF THE ACT, IT IS NECESSARY THAT T HE ONUS SHIFTED TO THE ASSESSING OFFICER IS REQUIRED TO BE DISCHARGED BY THE ASSESSI NG OFFICER, AS THE PRIMARY ONUS HAD ALREADY BEEN DISCHARGED BY THE ASSESSEE. THERE IS ONE MORE REASON THAT BESIDES CONFIRMING BY WAY OF REMAND REPORT, THE ASSESSING O FFICER IN THE ASSESSMENT YEAR 2012-13 IN THE ASSESSMENT ORDER HAD AGAIN CONFIRMED THAT AFTER ISSUANCE OF NOTICES U/S. 133(6) OF THE ACT, THE SHARE APPLICANTS, THEIR CONFIRMATIONS, ITRS ETC. WERE EXAMINED/VERIFIED AND KEPT ON RECORD. IN VIEW OF TH E ABOVE, IN OUR CONSIDERED OPINION, NOTHING HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER OR BY THE LD. DR BEFORE US WHICH SHOWS THAT THE SHARE APPLICATION S MADE WERE NOT IN ACCORDANCE WITH LAW. THEREFORE, THE ADDITION DELETED BY THE LD . CIT(A) IS REQUIRED TO BE DECLARED VOID. IN FACT, THE ASSESSING OFFICER IS BESTOWED WI TH AMPLE POWERS U/S. 133(6) AS ITA NO. 347/AGR/2017 12 WELL AS SECTION 142(2) OF THE ACT. THE ASSESSING OF FICER SHOULD HAVE EXERCISED ALL HIS POWERS AT HIS ENDS AND SHOULD HAVE MADE ENQUIRIES A ND BROUGHT ON RECORD SOME COGENT MATERIAL CONTRADICTING THE CONFIRMATIONS MAD E IN THE REMAND REPORT AS WELL AS SUBSEQUENT ASSESSMENT ORDER FOR THE ASSESSMENT Y EAR 2012-13. NOTHING HAS BEEN BROUGHT ON RECORD AND THEREFORE, WE DO NOT FIND ANY PERVERSITY OR ILLEGALITY IN THE ORDER PASSED BY THE LD. CIT(A). OUR VIEW IS SUPPORT ED BY THE DECISION OF DELHI HIGH COURT IN THE MATTER OF FAIR FINVEST LTD., 357 ITR 1 46 (DEL). THE RELEVANT FINDING OF HONBLE HIGH COURT IN PARAGRAPH NO. 6 IS AS UNDER : 6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF THE PARTIES. IN THIS CASE THE DISCUSSION BY THE CIT(APPEALS) WOULD REVEAL THAT THE ASSESSEE H AS FILED DOCUMENTS INCLUDING CERTIFIED COPIES ISSUED BY THE REGISTRAR OF COMPANI ES IN RELATION TO THE SHARE APPLICATION, AFFIDAVITS OF THE DIRECTORS, FORM 2 FI LED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APPLICANT FOR COMPANY'S SHARES , CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE ASSESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF THE INVES TIGATION REPORT AND THE STATEMENT OF MR. MAHESH GARG. TO ELEVATE THE INFERENCE WHICH C AN BE DRAWN ON THE BASIS OF READING OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPER, MORE SO WHEN THE ASSESSEE PRODUCED MATERIAL. THE LEAST THAT THE A SSESSING OFFICER OUGHT TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NECESSARY, IN VOKING HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIRECTORS. NO EFF ORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCL OSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSING OFFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAIN FACTS AND THE STATEMENTS OF MR. M AHESH GARG THAT THE INCOME SOUGHT TO BE ADDED FELL WITHIN THE DESCRIPTION OF SECTION 68. 8. THE LD. DR HAD RELIED UPON THE FOLLOWING JUDGMEN TS IN THE SYNOPSIS : (I). CIT VS. M/S. VACMET PACKAGING (INDIA) PVT. LT D. (ALLD. HC) (II). CIT VS. ULTRA MODERN EXPORTS PVT. LTD.(ITA N O. 262/2012 DEL. HC (III). CORNERSTONE PROPERTY INVESTMENTS PVT. LTD. V S. ITO DATED 09.02.2018 (ITAT BANGALORE) (IV). DCIT VS. M/S. SONI HOSPITAL PVT. LTD.(ITA NO. 588/JP/2011-ITAT JAIPUR ITA NO. 347/AGR/2017 13 (V). PCIT VS. NRA IRON & STEEL PVT. LTD. (SC) (VI). MAHAVEER KUMAR JAIN VS. CIT (CIVIL APPEAL NO. 4166 OF 2006 SC) (VII). JAGMOHAN RAM RAM CHANDRA VS. CIT, 1993 CTR A LL-153(ALLD. HC) 9. WE HAVE GONE THROUGH ALL THE DECISIONS RELIED BY THE LD. DR. THE FACTS OF NONE OF THESE CASES ARE SIMILAR TO THE CASE BEFORE US, A S IN NONE OF THE MATTER, THE ASSESSING OFFICER HAD CONFIRMED THE BANK ACCOUNTS, ITRS AND ISSUANCE OF CERTIFICATES AS IT HAS BEEN DONE IN THE PRESENT CASE OF THE SHAR E APPLICANTS. IN OUR VIEW ONE THE SHARE APPLICANTS ARE TRACEABLE BY WAY OF PAN, ITRS, BANK ACCOUNTS AND ARE ALSO RESPONDING TO THE NOTICES U/S. 133(6) OF THE ACT TH EN IT IS FOR THE ASSESSING OFFICER TO BRING ON RECORD THE MATERIAL IN THE FORM OF EXTRA P REMIUM PAID TO THE ASSESSEE FOR THE SHARES AND THAT THE CASE WAS DEPOSITED PRIOR TO ISSUANCE OF CHEQUES. NOTHING HAS BEEN DONE IN THE PRESENT CASE. THUS, IN THE PECULIA R FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, THE JUDGMENTS RELIED UPON BY THE LD. DR ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DEVOID OF MERITS AND ACCORDINGLY, THE SAME IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. MITHA LAL MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: *AKS*