ITO, Ward-1(1)(3), Surat V. M/s. Hanu Creation Pvt Limited, Surat

ITA 358/SRT/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1674 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-06-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 08-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus Share capital; Income from undisclosed sources; Source of fund; Question of law; Competent authority; Set aside
• Section: 68; 143(3); 133(6)

Judgement Text

आयकर अपीलȣय अͬधकरण,स ु रत Ûयायपीठ,स ु रत INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND Dr ARJUN LAL SAINI, ACCOUNTANT MEMBER आ.अ.सं./ITA No.358/SRT/2019(AY 2012-13) (Hearing in Physical Court) Income Tax Officer Ward- 1(1)(3),Room No.113, Aaykar Bhavan, Majura Gate, Surat-395001 Vs Hanu Creation Pvt. Ltd.H- 4532, Radha Krishan Textile Market, Ring Road, Surat-395007 PAN : AACCH 2959 N अपीलाथȸ/Appellant Ĥ×यथȸ /Respondent Ǔनधा[ǐरतीकȧओरसे /Assessee by Shri Ramesh Malpani, C.A राजèवकȧओरसे /Revenue by ShriVinod Kumar, Sr-DR सुनवाई की तारीख/Date of hearing 01.07.2022 उɮघोषणा कȧ तारȣख/Date of pronouncement 19.09.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of ld. Commissioner of Income-tax (Appeals)-3, Surat[for short to as “Ld.CIT(A)”dated 01.04.2019for assessment year (AY) 2012-13, which in turn arises out of an assessment order passed under section 143(3) of Income-Tax Act (Act) dated 30.03.2015. The Revenue has raised the following grounds of appeal: - “1.Whether on the facts and in circumstances of the case and as per law, the ld. CIT(A) was justified in deleting the addition made by the ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 2 Assessing Officer without appreciating the facts in the Chapter IX of the Finance Act 2016, it was clearly mentioned that a declarant under this scheme shall not be entitled in respect of undisclosed income declared or any amount of tax and surcharge paid thereon, to re-open any assessment or reassessment made under the Income- tax Act or the Wealth-tax Act, 1957 (27 of 1957), or claim any set off or relief in any appeal, reference or other proceedings in relation to any such assessment or reassessment?. 2.Whether on the facts and in circumstances of the case and as per law, the ld. CIT(A) was justified in deleting the addition made by the Assessing Officer of bogus Share Application money on relying on the CBDT Circular no.29 of 2016 by ignoring the fact that the disclosure on account of fictitious liability can only be made by the assessee only? 3.Whether on the facts and in circumstances of the case and as per law, the ld. CIT(A) was justified in deleting the addition made by the Assessing Officer of bogus Share Application money on relying on ethe CBDT Circular no. 29 of 2016 and merely appreciated that the directors and its relative have filed Form of IDS, ignoring the facts that such investment has been shown by the declarant in their respective balance sheet or not?. 4. Whether on the facts and in circumstances of the case and as per law, the ld. CIT(A) was justified in deleting the addition made by the Assessing Officer of bogus Share Application money on relying on the CBDT Circular no. 29 of 2016 (Answer to Q.No.2) by ignoring the fact that the disclosure shall not affect the finality of completed assessment and also the fact that a subsequent year transaction after the declaration under the Scheme can be explained before the AO in assessment proceedings and not before the Appellate Authorities and that too to explain the transaction of the same year? ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 3 5.Whether on the facts and in circumstances of the case and as per law, the ld. CIT(A) was justified in deletion of the addition made by the Assessing Officer without appreciating the facts that the assessee has not submitted any evidences that directors and their relatives have routed their unaccounted income in the form of Share Application money in the assessee company? 6. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of Assessing Officer may be restored to the above extent.” 2. Brief facts of the case are that assessee is a Private Limited Company, engaged in the business of manufacturing industry textile handloom & power looms. The assessee-company filed its return of income for assessment year 2012-13 on 26.09.2012 declaring income at Rs.4,37,680/-. The case was selected for scrutiny. During the assessment, the Assessing Officer on verification of record found that assessee has received share premium and share application money from fifteen companies aggregating to Rs.2.53 crores. The details of all investors companies were recorded by assessing officer in para-4.1 of the assessment order. The Assessing Officer recorded that on the basis of details available on record, a commission under section 131(1)(d) of the Act was issued to Kolkata to verify the identity, creditworthiness and ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 4 genuineness of all the fifteen investors companies. The Assessing Officer recorded that enquiry was conducted by ITO(Inv.), Unit-III, Kolkata who reported that all fifteen entities are not found/ non-exists. The Assessing Officer issued show cause notice to the assessee on 02.03.2015 asking the assessee as to why the credit entries of all fifteen investors companies be not treated as unexplained cash credits under section 68 of the Act and added to the income of assessee. The assessee was also asked to produce the directors of all fifteen investor companies. The contents of show cause notice are recorded in para-5 of the assessment order. The Assessing Officer noted that assessee has received share capital on share of Rs.10/- at a premium of Rs.490/- per share from all the investor companies and that all the fifteen companies were not having creditworthiness to finance such huge amount. 3. The assessee filed its reply on 17.03.2015. The contents of reply filed by assessee are referred in para-5.1 of the assessment order. In the reply, the assessee contended that they have already furnished the document & evidence to prove the nature of source of sum received i.e., details of share ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 5 applications and share premium, share application form, certificate of the company showing the source of investment made, resolution passed by the investor company to invest the fund, bank statement of the investor company, copy of the PAN card of the respective investor-company, copy of acknowledgment of the income tax return (ITR) filed by the respective investor-company, directors report, audit report of the respective investor-company, Memorandum of Article of Association and audit report of assessee-company. By furnishing such document, the assessee has proved the identity of the investors as they are registered under the company law and are regularly assessed under the income tax with their respective Assessing Officer which proved the existence of all shareholders. The assessee further contended that they are informed by the investor companies that a notice under section 133(6) of the Act was issued by the Assessing Officer and that those notices were replied in confirming the transactions and all the sums were received through banking channel. On the amount of premium, the assessee submitted that there are no statutory provisions to be fixed by the Private ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 6 Limited Companies to determine the share premium in case of Private Limited Company. On the quantum of premium, the assessee contended that there is no statutory provision applicable in case of Private Limited Company for fixing or determining the rate of premium on share company. The assessee-company was set up by well known persons in the textile industries having own brand value and goodwill in the market that any new investor joining the assessee-company has to pay the premium for the above benefits. The assessee furnished the details of net-work of investor companies and the amount of investment with the assessee-company in the following manner: S. No Name of the shareholders Net worth (Capital + Genres) Amount (Rs) Amount of investment in our company 1 Plazma Tradecom Pvt. Ltd 12,35,63,950 10,00,000 2 Santusthi Vanijya Pvt. Ltd 6,78,12,503 15,00,000 3 Rupa Tradecom Pvt.Ltd. 16,06,34,051 28,00,000 4 Santusthi Mercantile Pvt. Ltd 6,11,79,699 15,00,000 5 Fastmove Vintrade Pvt. Ltd. 11,25,74,120 15,00,000 6 Deep Commosales Pvt. Ltd 18,37,037,58 10,00,000 7 Appolo Vintrade Pvt.Ltd 13,41,91,072 15,00,000 8 Surya Dealtade Pvt. Ltd 14,17,21,830 10,00,000 9 Access TradeLink Pvt. Ltd 6,39,78,664 25,00,000 10 Adhunik Deal Mark Pvt Ltd 9,43,49,721 22,00,000 11 Axiom Commodeal Pvt Ltd 15,67,53,832 25,00,000 12 Target Vincom Pvt Ltd 12,68,85,160 10,00,000 13 Devang Commercial Pvt Ltd 9,75,61,443 20,00,000 ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 7 14 Aspolight Vincom Pvt Ltd 7,94,18,641 20,00,000 15 Zigma Dealmark Pvt Ltd 11,02,37,106 10,00,000 4. On the basis of aforesaid details, the assessee contended that assessee has proved the identity and creditworthiness of invertor and genuineness of transaction. The reply of assessee was not accepted by Assessing Officer. On the identity of the investors, the Assessing Officer concluded that all the companies are existing only on paper as well as orchestrated arrangement. The arrangement has been made by filing reply in dak / tapals, however on physical inquiry they were not found at the given address. Thus, the identity of investors was not proved. On the submission of assessee that share capital was received through baking channel. The Assessing Officer concluded that mere routing the transaction through banking channel is not sacrosanct and it is a just a colourable device. So the mere fact is that the investors received funds from banking channel and in turn invested in assessee-company through banking channel is of no consequence in determining the genuineness and creditworthiness. The assessing officer also held that on perusal of bank statement of investor ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 8 companies, he found one characteristic invariably emerges that consistently in all the cases, same pattern of equivalent deposits was made immediately prior to the issue of cheque of investment in the share application, which proved that accounts are irrigated with need based temporary creditworthiness required the funds. From the pattern of deposits and issuing of cheque, it is proved that not only the alleged share applications are devoid of any truth or creditworthiness, they are merely account lenders providing accommodation entries through their bank accounts on commission. Thus, the assessee’s case fails on the test of creditworthiness of source of funds. Most of creditworthiness, the Assessing Officer held that all the investor companies are actually showing only nominal income from other sources only. The balance-sheet of the investor companies show that all the companies are having sources of fund from share capital / share premium only and most of the funds are invested in a current investment or short term loan and advances or both. Thus all these are paper based companies. On the basis of aforesaid observation, the Assessing Officer ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 9 treated the entire share application / share premium as cash credits and added to the income of assessee. 5. Aggrieved by the addition, in the assessment order, the assessee filed appeal Ld.CIT(A). Before Ld. CIT(A) the assessee filed detailed written submission. The submission of assessee are recorded in para-5 in the order of Ld. CIT(A). The assessee in sum and substance submitted that correct figure of share capital / share premium received from fifteen companies is at Rs.2.50 crores and not Rs.2.53 crores. The assessee has received Rs.22 lakhs from Adhunik Dealmark Pvt. Ltd., which is wrongly mentioned at Rs.25 lakhs by Assessing Officer. Thus, the correct figure is Rs.2.50 crores only. The assessee further submitted that in all 15 investor companies, the director and their family members made investment of their unaccounted money, which was invested in the assessee company. The directors of assessee-company and their family members made application under Income Declaration Scheme, 2016 (“IDS’ for short), wherein they have declared that investment made in the share capital / share premium received from fifteen companies are their unaccounted income. ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 10 The assessee enclosed the statement containing details of names, address, PAN of director’s / family members / relatives and the share subscribed by each of them, total amount subscribed by each of them and the companies through whom the amounts were received. The application in IDS-2016 has been accepted. The assessee also furnished the copy of challan of tax paid under IDS-2016. The investment in the share capital / share premium amounting to Rs.2.50 crores was made by the directors / family members through and in the name of so-called fifteen companies have accepted under IDS- 2016. The assessee also furnished copy of application form of IDS-2016 and form-3 & 4, issued by competent officer. On the basis of such submission, the assessee submitted that share capital / share premium were duly explained i.e., investment was actually made by the directors / family members out of their income / funds, which have been declared under IDS- 2016 and which has been accepted by the Department. 6. The Ld. CIT(A) after considering the submission of the assessee called for remand report from Assessing Officer, directing him to verify the share capital / share premium ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 11 added under section 68 of the Act and the claim of assessee that the directors / shareholders of assessee-company made declaration under IDS-2016. The Assessing Officer furnished his remand report vide letter dated 07.02.2018. The contents of the remand report of Assessing Officer is referred to in para- 6.1.3 of the order of Ld. CIT(A), wherein the Assessing Officer reported that on verification of details, he noted that the following persons made declaration under IDS-2016 and paid tax thereon: - Sr. No. Name of the person Amount declared under IDS Scheme,2016 Nature of undisclosed income shown in Form No.1 1 Sarika Agrawal (Tulsyan) 5,00,000,00 Invested in Hanu Creation Pvt. Ltd. 2 Nishadevi Manojkumar Tulsyan 50,00,000.00 Invested in Hanu Creation Pvt. Ltd 3 Niraj Agarwal (HUF) 43,00,000.00 Invested in Hanu Creation Pvt. Ltd. 4 Chanadevi 47,00,000.00 Invested in Hanu Creation Pvt. Ltd. 5 Manish Kumar Tulsyan (HUF) 25,00,000.00 Invested in Hanu Creation Pvt. Ltd 6 Niraj Kumar Agarwal 35,00,000.00 Invested in Hanu Creation Pvt. Ltd 7. The Assessing Officer also reported that during the assessment the assessee claimed that the share application / share premium received from the fifteen companies are ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 12 genuine, however, now the assessee has changed his stand after making declaration under IDS-2016. The amount of share premium was received in assessment year 2012-13 and declaration under IDS-2016 made in assessment year 2016-17 i.e., after five years. Thus, the assessee-company is not covered the addition made by Assessing Officer under section 68 of the Act by taking shelter of declaration made IDS-2016 by director’s / family members. It was also reported that no nexus between the income declared by the director and the family members and the share capital / share premium claim to have been received by assessee-company. Therefore, the declaration under IDS-2016, cannot be treated as sufficient explanation. The copy of remand report was provided to the assessee. The assessee in its objection / rejoinder submitted that Assessing Officer in his report has accepted that correct amount of share capital / share premium is at Rs.2.50 crores and not Rs.2.53 crores. 8. The Ld. CIT(A) after considering the submission of assessee, remand report of the Assessing Officer held that the declaration made by directors and their family members / ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 13 relatives of the assessee-company under IDS-2016, have accepted that investment made in the assessee-company was made by directors / family members in the form of share capital /share premium through Kolkata based companies. In the IDS-2016 declaration all the persons have accepted and declared that they have invested in share capital / share premium in assessee-company through and in the name of fifteen Kolkata based companies. The declaration disclosed in the IDS-2016 was made in the following manner: Sr. No. Name of Director Family Member/Relative (Real Investor) Amount declared under IDS Scheme,2016(Rs) Declared amount invested in the form of share capital/share premium of Appellant company held in the names of following companies 1 Sarika Agrawal (Tulsyan) 50,00,000 Zigma Dealmark P Ltd. Rs.10,00,000 Plazma Tradecom P Ltd. Rs.10,00,000 Devang Commercial P Ltd. Rs.20,00,000 Target Vincom P Ltd. Rs.10,00,000 2 Nishadevi Manojkumar Tulsyan 50,00,000 Aspolight Vincom P.Ltd.Rs.20,00,000 Fastmove Vintrade P. Ltd. Rs.15,00,000 Apollo Vintrade P Ltd. Rs.15,00,000 3 Niraj Agarwal (HUF) 43,00,000 Rupa Tradecom P.Ltd. Rs.28,00,000 Santusthi Vanijya P Ltd. ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 14 Rs.15,00,000 4 Chanadevi 47,00,000.00 Axiom Commodeal P Ltd. Rs.25,00,000 Adhunik Dealmark P Ltd. Rs.22,00,000 5 Manish Kumar Tulsyan (HUF) 25,00,000.00 Santusthi Mercantile P. Ltd.Rs.15,00,000 Deep Commosales P Ltd. Rs.10,00,000 6 Niraj Kumar Agarwal 35,00,000.00 Access Trade Link P. Ltd. Rs.25,00,000 Surya Deal Trade P Ltd. Rs.10,00,000 9. The ld CIT(A) further held that the aforesaid directors / family members, themselves have mentioned that the declared income was invested in the share capital / share premium of the assessee-company in the name of fifteen companies, which has been accepted by Ld. PCIT-1 and PCIT-II respectively; by issuing Form No. 2 and 4 and the share had been transferred subsequently in the names of directors / family members who are real owners. The Ld. CIT(A) further held that the comments of the Assessing Officer in remand report dated 07.02.2018 is erroneous as he is failed to take into account the consideration of the source of the investment made in the form of share capital / share premium through Kolkata based companies, which were routed through their own disclosed income of fifteen companies. The observation that name of the ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 15 directors and family members are not reflected in the balance- sheet of companies for financial year 2011-12 is incorrect appreciation of fact. The investment was made of undisclosed income through fifteen companies and complete nexus of the amount of declaration made by the director’s / family members vis-à-vis fifteen companies are totally established. The declaration of IDS-2016 has been accepted by the Competent Authority. The declaration of IDS-2016 made by directors / family members cover the entire addition made by the Assessing Officer and the nexus of unaccounted income declared by promoters / directors in respect of source of funds introduced in the assessee-company in the name of various company entities by way of share capital / share premium have been accepted under IDS-2016. Thus, the addition under section 68 of the Act is covered by the declaration made by “real owners” of the funds / income introduced as share capital. The Ld. CIT(A) further held that income has been declared in the name of “real owners” of undisclosed income it is not justifiable to tax again the amount introduced in the name of assessee as the share capital / share premium ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 16 otherwise it would amount to ‘double taxation’, which is not permissible. 10. The ld CIT(A) by refereeing the Circular No. 29 of 2016 of Central Board of Direct Taxes (‘CBDT’ in short) dated 18.08.2016 observed that in the Circular it was clarified by CBDT that appellant can make disclosure of undisclosed income reflected as loan/ advance, creditors, share capital etc., which is fictitious in nature. It was also clarified that amount declared under the IDS-2016 for earlier years can be taken into account to explain the transaction of subsequent years also. On the aforesaid basis, the Ld. CIT(A) deleted the addition of Rs.2.50 crores made under section 68 of the Act. Aggrieved by the order of Ld. CIT(A) the Revenue has filed present appeal before the Tribunal. 11. We have heard the submission of Ld. Senior Departmental Representative (Ld. Sr. DR) for the revenue and Ld. Authorized Representative (AR) for the assessee and have gone through the orders of lower authorities carefully. The Ld. Sr-DR for the revenue submits that Assessing Officer made the addition under section 68 of the Act against the share premium / share ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 17 capital received by assessee-company from Kolkata based companies and all the companies through which the assessee received share capital / share premium were paper based companies. The Assessing Officer after making full-fledged inquiry made the addition. The Ld. CIT(A) accepted the version of assessee that the directors / family members declared the similar income under IDS-2016. The Ld. CIT(A) has not gone through the root of the case and not verified the fact that such investments have been shown in the balance- sheet of the companies or not. The Ld. CIT(A) has not appreciated the provisions mentioned in Chapter-IX of Finance Act, 2016 for IDS-2016, wherein it was mentioned that undisclosed income declared not to affect the finality of completed assessment and assessee was not entitled to claim any set off or relief in any appeal, reference or other proceeding in relation to any such assessment or re- assessment. 12. On the other hand, Ld. AR for the assessee supported the order of Ld. CIT(A). The ld. AR for the assessee submits that six of the family members of directors / directors of the ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 18 assessee-company made the investment in assessee-company through fifteen share subscriber companies, the names of which are mentioned in the assessment order. All six family members of the directors of the assessee-company made a declaration under IDS, 2016 and accepted that the investment made through investor companies are their undisclosed money. The application made in the IDS, 2016, has been accepted by the Ld. PCIT-I and PCIT-II, Surat and issued Form 2 & 4 of said IDS, 2016. Copy of IDS-2016 declaration of directors / family members of Sarika Agarwal (Tulsiyan), Nishadevi Manojkumar Tulsyan, Niraj Agarwal (HUF), Chandadevi, Manish Kumar Tulsyan (HUF) and Niraj Kumar Agarwal are filed on record. During first appellate stage, the ld. CIT(A) obtained remand report from the Assessing Officer and the Assessing Officer has not disputed about the quantum of income declared by all the directors / family members in IDS- 2016. The Ld. CIT(A) on perusal of income declaration under IDS-2016 and the investment made by the six family members / directors of the assessee-company accepted that investments were made through fifteen Kolkata based companies which ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 19 were their personal undisclosed income, and such income was declared under IDS-2016, which has been accepted by the Department and the assessee-company has paid necessary tax and penalty thereon. Once the directors of assessee company and their family members paid tax on the share application and share premium, the same amount cannot be taxed twice. The Ld. AR for the assessee submits that Hon'ble jurisdictional High Court in the case of M. R. Shah Logistics (P.) Ltd. Vs. DCIT (2018) 97 taxmann.com 211 (Guj) on similar set of facts held that where the Assessing Officer held share application money received by assessee from one Garg Logistics Pvt. Ltd. (for short to as ‘GL’) as undisclosed cash received of assessee, since the said amount was disclosed by GL under Income Declaration Scheme-2016 and the same was accepted by the Department, pursuant to which GL has paid penalty, assessing same amount in the hands of assessee would amount to “double taxation”. The ld. AR for the assessee submits that it is settled position in law that same income cannot be taxed twice. The ld. AR for the assessee further submits that similar additions were made in case other ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 20 assessee including Peninsula Builders Pvt. Ltd. [PAN No. AACCP 6860G], Shree Laxmi Fashions Private Limited [PAN No. AAGCS3719R] and in Prime Embroideries Private Limited [PAN No. AAFCP 5361D], on account of share application from Kolkata based entities by the Assessing Officer. Those directors in the said investor company made declaration in the IDS-2016 and paid required tax due and penalty. The addition in the assessment order was deleted by Ld. CIT(A) in order dated 09.06.2017, 23.05.2017 and 09.06.2017 respectively and no further appeal is filed by Department in the said cases. The ld. AR for the assessee submits that if the Revenue has not challenged the similar addition deleted in case of other assessee which was based on similar allegations and the Directors of those investor companies has also declared their undisclosed income and consequent upon the Ld. CIT(A) deleted the additions, then it is not open for the Department to file appeal in a pick & choose manner. 13. To support his submission, Ld. AR for the assessee relied upon the decision of Hon'ble Supreme Court in the case of Berger Paints India Ltd. vs. CIT (2004) 266 ITR 99 (SC), CIT vs. ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 21 Excel Industries Ltd. (2013) 358 ITR 295 (SC) and order of ITAT Ahmedabad Benches in the case of ITO vs. Tanvi Textiles (P.) Ltd. [ITA No.1713/Ahd/2004 dated 29.02.2008. 14. The ld. AR for the assessee also relied upon the decision of Hon'ble jurisdictional High Court in the case of Associated Transrail Structure Ltd. vs. ACIT (2018) 99 taxmann.com 407 (Guj). The ld. AR for the assessee finally submits that he places on record the copy of Income Declaration Scheme, 2016, CBDT Circular No. 29 of 2016 dated 18.08.2016 and copy of declaration Forms by all the family-members of the directors of the assessee-company showing the investment made in those investor companies, which ultimately made investment in shares of assessee-company. The ld. AR for the assessee by referring all IDS-2-16 Forms, shown us, the name of all fifteen investor companies in Form-I, in the IDS-2016. 15. We have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. The ld. AR submits that the order of Ld. CIT(A) is based on the fact that the investment made by the assessee- company was undisclosed income of various directors / ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 22 family-members of the directors of the assessee-company, which has been accepted by them in IDS-2016 on which due penalty has been paid, once the amount has been taxed, same cannot be taxed in the hands of assessee again. 16. We have considered the rival submissions of both the parties and have gone through the orders of authorities below. We have also deliberated on various case law relied by Ld. AR for the assessee. We find that during the assessment, the Assessing Officer made addition on account of share application money and share premium by treating it as unexplained cash credits under section 68 of the Act by taking view that all the investor companies are Kolkata based companies and the identity, creditworthy and genuineness of transaction is not proved by the assessee. The assessing officer also held that mere transfer of share premium through banking channel is not sufficient to prove the transaction as genuine. We find that before ld CIT(A) the assessee took plea that the directors of the assessee-company and /or their relatives filed application under IDS-2016, wherein they have admitted that the investment by way of share premium is ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 23 made by them through Calcutta based entity, and that it was their unaccounted income. The IDS-2016 applications of all the family members of the directors were accepted by the Principal Commissioner-1 & 2, Surat and that they have paid the due tax and the amount of penalty demanded/ calculated by the department. The ld. CIT(A) deleted the addition by taking view that the investment and complete nexus of undisclosed income made through fifteen companies by the director’s / family members vis-à-vis fifteen companies are totally established. The declaration of IDS-2016 made by directors / family members cover the entire addition made by the Assessing Officer and the nexus of unaccounted income declared by promoters / directors in respect of source of funds introduced in the assessee-company in the name of various company entities by way of share capital / share premium have been accepted under IDS-2016. It was held that the addition under section 68 of the Act is covered by the declaration made by “real owners” of the funds / income introduced as share capital. We find that the Ld. CIT(A) further held that income has been declared in the name of “real ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 24 owners” of undisclosed income it is not justifiable to tax again the amount introduced in the name of assessee as the share capital / share premium otherwise it would amount to ‘double taxation’, which is not permissible. 17. Before us Ld. AR for the assessee made similar arguments as made in written submissions before Ld. CIT(A) and also filed details of various directors / family-members / relatives of directors of assessee-company, who invested the amount in the form of share premium in various Kolkata based companies, and who ultimately made investment in assessee- company. We find that Sarika Agrawal (Tulsiyan) made investment in Zigma Dealmark Pvt. Ltd., Plazma Tradecom P Ltd., Targer Vincom Pvt. Ltd. of Rs.10 lakh each and Devang Commercial Pvt. Ltd. of Rs.20 lakh; Nishadevi Manojkumar Tulsyan made investment in Aspolight Vincom Pvt. Ltd. of Rs.20 lakh, Fastmove Vintrade Pvt. Ltd. and in Apollo Vintrade Pvt Ltd. of Rs.15 lakh each; Niraj Agarwal (HUF) made investment in Rupa Tradecom Pvt. Ltd. of Rs.28 lakh and Santusthi Vanijya Pvt. Ltd. of Rs.15 lakh respectively; Chandadevi made investment in Axiom Commodeal Pvt. Ltd. of ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 25 Rs.25 lakh and Adhunik Dealmark Pvt.Ltd. of Rs.22 lakh respectively; Manish Kuamr Tulsyan (HUF) made investment in Santusthi Mercantile Pvt. Ltd. of Rs.15 lakh and Deep Commosales Pvt. Ltd. of Rs.10 lakh respectively and Niraj Kumar Agarwal made investment in Access Trade Link Pvt. Ltd., of Rs.25 lakh and Surya Deal Trade Pvt.Ltd. of Rs.10 lakh respectively. On perusal of Form-I of IDS, 2016, we find that all the names of investor companies, wherein six members / directors or relatives of the directors of assessee- company made investment are clearly shown in their corresponding Form-I of IDS-2016. We further find that each of the IDS, 2016 was accepted either by Ld. PCIT-I or Ld. PCIT-II of Surat to determining taxes, surcharge and penalty payable on their declared undisclosed income under IDS- 2016. 18. We find that the assessing officer while filing appeal has not raised dispute or grounds of appeal that due tax, cess or penalty on the declared income is not paid by all such directors / family-members of directors of the assessee- company. ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 26 19. We find that Hon'ble jurisdictional High Court in the case of M.R. Shah Logistic (P) Ltd. (supra) on almost similar set of facts and on similar question of law allowed the appeal of that assessee by holding that where Assessing Officer held share application money received by assessee-firm from (GL) as undisclosed by the said (GL) under IDS-2016, which was accepted by the Department, pursuant to which that assessee had paid penalty, assessing the same amount in the hands of assessee would amount to “double taxation” and deleted the entire addition. The relevant finding of the decision of Hon’ble High Court is extracted below; “11. We have also perused the scheme. Section 183 of the Finance Act, 2016 ("the Act of 2016" for short) pertains to declaration of undisclosed income. Sub-section(1) of section 183 envisages declaration to be made by any person within specified time, of any income chargeable to tax for which he had failed to furnish return or he had failed to disclose any return filed or which had escaped assessment by reason of his omission or failure to fully and truly disclose all material facts. Section 184 of the Act of 2016 is a charging provision providing for basic tax rate at the rate of thirty per cent and surcharge at the prescribed rate on the income so disclosed. Section 185 provides that notwithstanding anything contained in the Income-tax Act, the person making a declaration of undisclosed income would be liable to pay penalty at the rate of twenty-five per cent of such tax in addition to tax and surcharge. Section 186 prescribes the manner of declaration. Section 188 provides that amount of undisclosed income declared in accordance with section 183 shall not be included in ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 27 the total income of the declarant for any assessment year under the Income-tax Act, if the declarant makes the payment of tax and surcharge referred to in section 184 and the penalty under section 185 by the specified date. Section 190 of the Act of 2016 provides that the provisions of the Benami Transactions (Prohibition) Act, 1988 shall not apply in respect of declaration of undisclosed income made in the form of investment in any asset, if the asset existing in the name of benamidar is transferred to the declarant within the prescribed period. Section 197 of the Act of 2016 is a clarificatory provision and inter-alia provides for removal of doubt. It is declared that where any declaration has been made under section 183 but no tax, surcharge or penalty has been paid within the prescribed time, the undisclosed income shall be chargeable to tax under the Income-tax Act in the previous year in which such declaration is made. 12. The Scheme thus makes detailed provisions for declaration of income which hitherto was either undisclosed or not charged to tax. Upon such declaration being accepted, declarant would pay tax at the prescribed rate with surcharge and penalty. Upon such amounts being paid, declarant would receive certain immunities. The income so declared would not be included in the total income of any assessment year. Even Benami transactions would not be targeted. The scheme thus appears to have been framed to encourage disclosures of unaccounted income. Upon acceptance of such disclosure, Revenue would collect tax, surcharge and penalty at the prescribed rates. In turn, the declarant would have peace of mind and certain immunities. 13. In the present case, same amount which the Assessing Officer wishes to tax in the hands of the petitioner company by resorting to reopening of assessment was declared by Garg Logistics Pvt. Ltd. under such declaration. Declaration was accepted by the competent authority pursuant to which Garg Logistics Pvt. Ltd. in three instalments also deposited the entire amount of tax with surcharge and penalty. Any attempt on part of the Assessing Officer to assess the same income in the hands of assessee would amount to charging the same income twice. 14. This Court in case of B. Nanji Enterprise Ltd. v. Dy. CIT [2017] 84 taxmann.com ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 28 155/249 Taxman 599 (Gujarat) noticed that cash was seized from the bank lockers of assessee company during search action. The Assessing Officer added such sum by way of undisclosed cash receipt of the assessee. Director of the company had filed settlement application owning up such amount as his undisclosed income and paid tax on such income. The Court held that the department should not levy tax from the company again. 15. In case of Pr. CIT v. Kanubhai Maganlal Patel [2017] 79 taxmann.com 257 (Gujarat), the Court noticed that certain income was taxed in case of a partnership firm, same therefore, could not be taxed in the hands of partner again. 16. We further notice that CBDT in its circulars has been clarifying various issues cropping up out of the scheme from time to time. In one such circular dated 1.9.2016, following question was addressed : "Question No. 10 : Where certain income has been charged to tax in the hands of two different persons or where it has been charged to tax in the case of same person in two different assessment year, one on substantive basis and the other on the protective basis, will the declarant or the other person get advantage in respect of additions made both substantively and protectively?" It was answered in the following manner : "Answer: The assessees are advised to make declarations in cases or for assessment years where the additions are made on substantive basis. The protective demand is not subjected to recovery unless it is finally upheld. Once the declaration in a substantive case or year is accepted, the tax arrear in protective case/year would not longer be valid and will be rectified by suitable orders in the normal course." 17. It can thus be seen that upon an assessee in whose hands the income is charged, files a declaration, the protective assessment in hands of another assessee would automatically abate, clearly indicating the intention of charging tax on the same income only once. 18. In the result, impugned notice is set aside. Petition is allowed and disposed of.” ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 29 20. Before, us the ld AR for the assessee also raised pleas that in similar case in Peninsula Builders P Ltd, Shree Laxmi Fashions Private Limited and in Prime Embroideries Private Limited (supra), similar additions were made by assessing officer on account of share premium. Later on their directors accepted by filing application under IDS-16 and paid due tax of their own money, which was also infused through same modus operandi, and the ld CIT(A) deleted the addition, but no appeal is filed in such cases. We find that no contrary material is filed or shown to us by ld SR DR for the revenue that any further appeal is filed in all such similar cases by the revenue. Thus, in our considered view, the revenue cannot treat the similar situated assessee on similar additions in different way. So far as the objection of ld Sr DR for the revenue is concerned that undisclosed income declared in IDS-16, not to affect finality of completed assessment. We may note that the appeal is continuation of its original proceedings and the assessee cannot be deprived of the benefit, if it was available at the time of assessment, if the appeal of assessee is pending adjudication either at first or second appeal stage. ITA No.358/SRT/2019 (A.Y 12-13) M/s Hanu Creation Pvt. Ltd. 30 21. Considering the totality of the facts and circumstances of the case, we find that once the undisclosed income declared under IDS-2016 have been accepted by the Department including accepting the fact that ultimate amount was taxed, same therefore, cannot be taxed in the hands of assessee-company again. Thus, with these additional observation, we affirm the order of Ld. CIT(A). in the result, all the grounds of appeal raised by the revenue are dismissed. 22. In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 19/09/2022 and the result was also placed on the Notice Board. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) [लेखा सद᭭य/ACCOUNTANT MEMBER] [᭠याियक सद᭭य JUDICIAL MEMBER] Surat, Dated: 19/09/2022 Dkp. Out Sourcing Sr.P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)- 4. CIT 5. DR 6. Guard File True copy/ By order // True Copy // Sr.P.S./Assistant Registrar, ITAT, Surat