DCIT 12(1)(1), MUMBAI V. ADHUNIK TRNASPORT ORGANISATION LTD, MUMBAI

ITA 3725/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3668 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 22-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITHA LD
• Assessee Lawyers: D V LAKHANI LD
• Keywords: Unexplained cash credit; Share purchase agreement; Principle of natural justice; Source of fund; Valuation report; Accommodation entries; Onus to prove; Retraction
• Section: 143(3); 131; 68; 132

Judgement Text

ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.3725/MUM/2017 ( / ASSESSMENT YEAR:2012-13 ) D CIT - 12(1)(1) ROOM NO.223, 2 ND FLOOR, AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020. / VS. M/S. ADHUNIK TRANSPORT ORGANISATION LTD. 115, UDYOG BHAVAN SONAWAT ROAD, GOREGAON (E) MUMBAI-400 063. '# ./ ./PAN/GIR NO. AAACA-4457-G ( #% /APPELLANT ) : ( &'#% / RESPONDENT ) REVENUE BY : MS. R. KAVITHA-LD. DR ASSESSEE BY : SHRI D.V. LAKHANI-LD. AR / DATE OF HEARING : 01/08/2019 / DATE OF PRONOUNCEMENT : 22/08/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AS PER THE PROVISIONS OF SECTION 68 OF THE INCOM E TAX ACT, 1961 WHERE ANY SUM IS FOUND CREDITED IN THE ASSESSEES B OOKS AND ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION FURNISHED IS FOUND TO BE UNSATISFACTORY , THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE A SSESSEE OF THAT PREVIOUS YEAR. A PROVISO HAS BEEN INSERTED TO THE S AID SECTION BY FINANCE ACT, 2012 W.E.F. 01/04/2013 TO PROVIDE THAT WHERE THE ASSESSEE ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 2 IS A COMPANY AND THE SUM SO CREDITED CONSISTS OF SH ARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM ETC., THE EXPLA NATION FURNISHED BY THE ASSESSEE SHALL BE DEEMED TO BE NOT SATISFACTORY UNLESS THE PERSON IN WHOSE NAME SUCH CREDIT IS RECORDED ALSO OFFERS AN E XPLANATION ABOUT AND NATURE AND SOURCE OF SUM SO CREDITED AND SUCH E XPLANATION IS FOUND TO BE SATISFACTORY. HOWEVER, THIS PROVISO IS APPLIC ABLE ONLY FROM AY 2013- 14 AND THE SAME IS NOT RETROSPECTIVE IN NATURE AS H ELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE PRIVATE LIMITED [80 TAXMANN.COM 272]. 2. IT IS SETTLED POSITION OF LAW THAT TO AVOID THE RIGORS OF SECTION 68, THE ASSESSEE MUST PROVE THE IDENTITY, CREDITWORTHINESS OF THE LENDERS / INVESTORS TO ADVANCE SUCH MONIES AND GENUINENESS OF THE TRANSACTIONS. ONCE THESE THREE INGREDIENTS ARE FULFILLED BY THE A SSESSEE, THE PRIMARY ONUS CASTED UPON HIM, IN THIS REGARD, COULD BE SAID TO HAVE BEEN DISCHARGED AND ACCORDINGLY, THE ONUS WOULD SHIFT UP ON REVENUE TO DISLODGE THE ASSESSEES CLAIM BY BRINGING ON RECORD MATERIAL EVIDENCES AND UNLESS THIS ONUS IS DISCHARGED BY THE REVENUE, NO ADDITION COULD BE SUSTAINED U/S 68. THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS P. LTD. [319 ITR 5], DISMISSING REVENUES APPEAL, OBSERVED AS UNDER: - 2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF IT ACT, 1961? WE FIND NO MERIT IN THI S SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY I S RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAME S ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR I NDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WI TH THE IMPUGNED JUDGMENT. 3. SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS DI SMISSED. ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 3 THE RATIO OF SAID DECISION HAS SUBSEQUENTLY BEEN FO LLOWED BY VARIOUS JUDICIAL AUTHORITIES IN CATENA OF JUDICIAL PRONOUNC EMENTS. THE SAID DECISION HAS BEEN FOLLOWED BY HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE PRIVATE LIMITED [8 0 TAXMANN.COM 272] & SUBSEQUENTLY IN CIT VS. ORCHID INDUSTRIES PRIVATE LIMITED [88 TAXMANN.COM 502]. THE HONBLE DELHI HIGH COURT FOLLOWED THE SAID DECISION IN PR.CIT V/S ADAMINE CONSTRUCTION PVT. LTD. [107 TAXMANN.COM 84] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION WAS DISMISSED BY HONBLE SUPREME COURT REPORTED AT 107 TAXMANN.COM 85. SIMILAR IS THE POSITION OF DECISION OF HONBLE DELH I HIGH COURT RENDERED IN PR. CIT V/S HIMACHAL FIBERS LTD. [98 TAXMANN.COM 72 ] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION WAS DISMISSED BY H ONBLE SUPREME COURT REPORTED AT 98 TAXMANN.COM 173. SIMILAR IS TH E DECISION OF HONBLE HIGH COURT OF MADHYA PRADESH IN PR. CIT V/S CHAIN HOUSE INTERNATIONAL PVT. LTD. [98 TAXMANN.COM 47] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION HAS RECENTLY BEEN DISMISSED BY HONBLE SUPREME COURT ON 18/02/2019 REPORTED AT 103 TAXMANN.COM 435 . 3. FURTHER, AS A PRINCIPLE OF NATURAL JUSTICE, IT I S OBLIGATORY ON THE PART OF REVENUE AUTHORITIES TO CONFRONT THE ADVERSE MATE RIAL USED AGAINST THE ASSESSEE AND PROVIDE AN OPPORTUNITY TO REBUT THE SA ME. THE FAILURE TO DO SO WOULD RENDER THE ASSESSMENT PROCEEDINGS NULLITY IN THE EYES OF LAW. THE ADDITIONS MADE MERELY ON THE BASIS OF THIRD-PAR TY STATEMENTS AND THE DENIAL TO PROVIDE AN OPPORTUNITY TO CROSS-EXAMI NE THE CONCERNED PARTIES WOULD LEAD TO VIOLATION OF PRINCIPLE OF NAT URAL JUSTICE RENDERING THE ASSESSMENT PROCEEDINGS NULLITY AS HELD BY HONBLE A PEX COURT IN ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 4 ANDAMAN TIMBER INDUSTRIES [CIVIL APPEAL NO.4228 OF 2006 02/09/2015]. 4. KEEPING IN VIEW THE ABOVE LEGAL POSITION IN MIND , WE FIND THAT REVENUE IS UNDER APPEAL BEFORE US FOR AY 2012-13 AG AINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-20, MUMBAI [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-20/DCIT-12(1)(1)/IT-95/2015- 16 DATED 03/02/2017 QUA DELETION OF ADDITION U/S 68. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE ADDITION U/S. 68 OF SHARE PRE MIUM AND SHARE CAPITAL WITHOUT APPRECIATING THE FACT THAT THE PARTIES HAD NO CREDI TWORTHINESS TO JUSTIFY SUCH HIGH AMOUNT OF SHARE PREMIUM. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT (A) ERRED IN NOT APPRECIATING THE FACT THAT THE SHARES WHICH WERE SUBSCRIBED BY BOGUS CONCERNS FOR HIGH PREMIUM WERE RESOLD BY THEM TO PR OMOTERS OF ASSESSEE COMPANY AT FACE VALUE WITHOUT CHARGING ANY PREMIUM THUS QUESTIONING THE AMOUNT OF HIGH PREMIUM PAID. 5.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE WAS SADDLED WITH IMPUGNED ADDITI ON OF RS.250 LACS IN THE YEAR UNDER CONSIDERATION IN AN ASSESSME NT FRAMED U/S 143(3) ON 30/03/2015. DURING ASSESSMENT PROCEEDINGS , UPON PERUSAL OF ASSESSEES FINANCIAL STATEMENTS, IT TRAN SPIRED THAT THE ASSESSEE HAD ISSUED 1 LACS EQUITY SHARES OF FACE VA LUE OF RS.10/- EACH AT A PREMIUM OF RS.240/- PER SHARE TO VARIOUS CONCERNS AND ACCORDINGLY RECEIVED SHARE PREMIUM OF RS.240 LACS. THE DETAILS OF THESE PARTIES, FOR EASE OF REFERENCE, COULD BE EXTR ACTED IN THE FOLLOWING MANNER: - ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 5 NO. NAME NO. OF SHARES ISSUED AMOUNT OF SHARE CAPITAL AMOUNT OF SHARE PREMIUM 1. CASPER ENTERPRISES PVT. LTD 10,000 RS.1.00 LACS RS. 24.00 LACS 2. KUSH HINDUSTAN ENTERTAINMENT LTD 16,000 RS.1.60 LACS RS. 38.40 LACS 3. OLIVE OVERSEAS PVT. LTD 22,000 RS.2.20 LACS RS. 52.80 LACS 4. NAKSHATRA BUSINESS PVT. LTD. 16,000 RS.1.60 LACS RS. 38.40 LACS 5. RIGVEDA PROPERTIES LTD 10,000 RS.1.00 LACS RS. 24.00 LACS 6. AQUASTEL WATER PURIFICATION SYSTEM P. LTD 6,000 RS.0.60 LACS RS. 14.40 LACS 7. UTKANTHA TRADING AND PROPERTIES LTD. 6,000 RS.0.60 LACS RS. 14.40 LACS 8. A&A SHELTERS PVT. LTD. 14,000 RS.1.40 LACS RS. 33.60 LACS TOTAL 1,00,000 RS.10 LACS RS.240 LACS ACCORDINGLY, THE ASSESSEE WAS DIRECTED TO FILE THE REQUISITE DETAILS THEREOF AND DOCUMENTARY EVIDENCES TO SUBSTANTIATE T HE FULFILLMENT OR PRIMARY INGREDIENTS OF SECTION 68. IN RESPONSE, THE ASSESSEE, VIDE SUBMISSIONS DATED 23/01/2015, INTER-ALIA, SUBMITTED THAT FOLLOWING DOCUMENTS IN SUPPORT OF THE TRANSACTIONS: - -ADDRESS, PAN OF THE SHAREHOLDERS, NUMBER OF SHARES ISSUED -COPIES OF SHARE APPLICATION FORM -DETAILS OF PAYMENT MADE BY THE SHARE APPLICANTS -CONFIRMATION OF SHARE APPLICANTS ALONG WITH THEIR RESPECTIVE BANK STATEMENT, FINANCIAL STATEMENTS, BOARD RESOLUTIONS, INCOME TAX RETURNS E TC. 5.2 HOWEVER, UPON VERIFICATION OF DETAILS, IT TRANS PIRED THAT THE ENTITIES LISTED AT SERIAL NOS. 1 TO 4 WERE MANAGED AND OPERATED BY ONE MR. PRAVEEN K. JAIN WHO, UNDER SEARCH PROCEEDIN GS U/S 132 CARRIED OUT BY THE DEPARTMENT, ADMITTED TO BE INDUL GING IN PROVIDING ACCOMMODATION ENTRIES. THE ENTITIES LISTED AT SERIA L NOS. 5 TO 7 WERE STATED TO BE ENTITIES CONTROLLED BY ONE MR. ABHISHE K MORARKA WHO ADMITTED BEFORE SALES TAX AUTHORITIES THAT NO GENUI NE ACTIVITIES WERE BEING CARRIED OUT BY THESE ENTITLES. NO REPLY WAS R ECEIVED FROM ENTITY LISTED AT SERIAL NO. 8. UPON CONFRONTATION OF SAID FACTS, THE ASSESSEE DEMANDED COPY OF STATEMENTS / DOCUMENTS RELIED UPON BY LD. AO IN ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 6 CASE OF SHRI PRAVIN KUMAR JAIN. THE ASSESSEE DENIED HAVING ANY DEALING WITH SHRI PRAVIN KUMAR JAIN. SIMILARLY, THE ASSESSEE DEMANDED COPY OF STATEMENT OF SHRI ABHISHEK MORARKA GIVEN BEFORE THE SALES TAX AUTHORITIES. THE ATTENTION WAS ALSO D RAWN TO THE FACT THAT IN RESPONSE TO SUMMONS ISSUED BY LD. AO, SHRI ABHISHEK MORARKA VISITED THE OFFICE OF LD. AO ON 17/03/2015 AND ON 20/03/2015. THE ASSESSEE REITERATED THAT THE DOCUME NTARY EVIDENCES ALREADY SUBMITTED BY THE ASSESSEE WOULD E STABLISH THAT ALL THE ENTITIES WERE GENUINE AND INDEPENDENT ENTITIES WHO APPLIED TO ASSESSEES SHARE CAPITAL. IN THE SAID BACKGROUND, I T WAS SUBMITTED THAT INVOCATION OF PROVISIONS OF SECTION 68 WAS NOT JUSTIFIED SINCE THE ASSESSEE ESTABLISHED THE PRIMARY INGREDIENTS OF THE TRANSACTIONS. RELIANCE WAS PLACED, INTER-ALIA, ON THE DECISION OF HONBLE SUPREME COURT RENDERED IN LOVELY EXPORTS P. LTD. [319 ITR 5]. 5.3 THE ASSESSEE, VIDE FURTHER SUBMISSIONS DATED 25 /03/2015, DREW ATTENTION TO THE RETRACTION DATED 15/05/2014 I N THE SHAPE OF AN AFFIDAVIT FILED BY SHRI PRAVIN KUMAR JAIN BEFORE IN VESTIGATION WING WHEREIN IT WAS STATED THAT STATEMENT DURING SEARCH OPERATIONS WAS RECORDED UNDER COERCION, FORCE AND MENTAL DURESS. H E CONFIRMED THAT THE ACTIVITIES OF ALL THE ENTITIES WERE GENUINE AND ALL THE ENTITIES WERE CARRYING ON LEGAL BUSINESS. TO SUBSTANTIATE THE GEN UINENESS OF THE TRANSACTIONS, THE ASSESSEE FILED COPIES OF THE AFFI DAVITS EXECUTED BY THE DIRECTORS OF ENTITIES LISTED AT SERIAL NOS. 1 T O 4 CONFIRMING THE TRANSACTIONS OF SHARE CAPITAL WITH ASSESSEE COMPANY . 5.4 AT THE SAME TIME, THE ASSESSEE ALSO SUBMITTED C OPY OF INCOME TAX RETURN, FINANCIAL STATEMENT OF ENTITY LISTED AT SERIAL NO.8 IN ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 7 SUPPORT OF GENUINENESS OF THE TRANSACTION WITH RESP ECT TO THE SAID PARTY. THE ASSESSEE ALSO FILED VALUATION REPORT TO JUSTIFY THE PREMIUM RECEIVED ON THE SHARE TRANSACTIONS. 5.5. IN THE ABOVE CIRCUMSTANCES, THE ASSESSEE PLEAD ED FOR ACCEPTANCE OF THE STATED TRANSACTIONS. 5.6 HOWEVER, THE LD. AO, AT PARA 5.2, OBSERVED THAT MERE FILING OF DECLARATIONS BY DIRECTORS OF ENTITIES LISTED AT SER IAL NOS. 1 TO 4 THAT THE SHARES HAVE BEEN SUBSCRIBED WOULD NOT SERVE ANY PUR POSE SINCE SHRI PRAVIN KUMAR JAIN HAS NOT PROVED THE SOURCE OF FUNDING AND ALSO NOT MADE ANY ATTEMPT TO COUNTER EVIDENCES UNEA RTHED DURING THE SEARCH PROCEEDINGS AND THEREFORE, THESE AFFIDAV ITS WOULD HAVE NO VALUE IN THE EYES OF LAW. THE LD. AO ALSO DISREGARD ED THE VALUATION ARRIVED AT BY THE ASSESSEE USING DISCOUNTED CASH FL OW METHOD. AT PARA 5.4, LD. AO OBSERVED THAT ALL THE SHARES SUBSC RIBED DURING THE YEAR WERE TRANSFERRED IN FINANCIAL YEAR 2013-14 TO MR. RAJENDER K. AGARWAL, PROMOTER SHAREHOLDER AND MANAGING DIRECTOR OF THE ASSESSEE COMPANY AT FACE VALUE. NO SATISFACTORY REP LY COULD BE RECEIVED FROM MR. RAJENDER K. AGARWAL IN RESPONSE T O NOTICE U/S 131. SUMMONS ISSUED U/S 131 TO DIRECTORS OF CONCERNS MAN AGED AND CONTROLLED BY SHRI PRAVIN KUMAR JAIN THROUGH WARD I NSPECTOR REVEALED THAT NONE OF THE PARTY WAS AVAILABLE AT TH E GIVEN ADDRESSES. 5.7 THE SEARCH ACTION U/S 132 ON 01/10/2013 ON SHRI PRAVIN KUMAR JAIN, IN THE OPINION OF LD. AO, ESTABLISHED BEYOND DOUBT THAT THE SAID GROUP WAS ENGAGED IN THE BUSINESS OF PROVIDING ACCO MMODATION ENTRIES OF VARIOUS TYPES THROUGH NUMEROUS SELF-CONT ROLLED BUSINESS ENTITIES. THE FINDINGS OF THE SEARCH HAVE BEEN EXTR ACTED ON PARA ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 8 5.7.1 OF THE QUANTUM ASSESSMENT ORDER. FURTHER, THE RETRACTION STATEMENTS FILED IN THE SHAPE OF AFFIDAVITS WERE TE RMED AS A PLANNED MOVE TO THWART THE PROCESS OF INVESTIGATION IN THE CASES OF BENEFICIARIES OF ACCOMMODATION ENTRIES. IN THE ABOV E BACKGROUND, LD. AO, AT PARA 5.7.3 CAME TO A CONCLUSION THAT SHR I PRAVIN KUMAR JAIN WAS PROVIDING ACCOMMODATION ENTRIES THROUGH NU MEROUS ENTITIES RUNNING IN THE NAMES OF VARIOUS NAME SAKE DIRECTORS / PROPRIETORS. ALL THESE ENTITIES WERE NOT CARRYING O UT ANY GENUINE BUSINESS BUT SOLELY USED AS CONDUITS FOR PROVIDING ACCOMMODATION ENTRIES. THE REAL OBJECTIVE OF THESE SHARE SUBSCRIP TION WAS TO INTRODUCE UNACCOUNTED MONEY OF THE ASSESSEE COMPANY IN THE GARB OF SHARE CAPITAL. ANOTHER FACT NOTED WAS THAT DURI NG THE YEAR 50,000 SHARES WERE ISSUED TO MR. RITESH AGARWAL AND MR. RA JENDER K AGARWAL AT FACE VALUE OF RS.10/- EACH AS AGAINST TH E FACT THAT SUCH SHARES WERE ISSUED TO THE APPLICANT AT A PREMIUM OF RS.240/- PER SHARE. FURTHER, THE SHARES, IN LATER YEAR, WAS TRAN SFERRED BY THE SHARE APPLICANTS TO THE PROMOTER SHAREHOLDERS AT FACE VAL UE. 5.8 FINALLY, CITING VARIOUS JUDICIAL PRONOUNCEMENTS , THE SAID AMOUNT OF RS.250 LACS REPRESENTING SHARE CAPITAL & SHARE P REMIUM WAS ADDED IN THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT U/S 68 BY LD. AO BY OBSERVING AS UNDER: - 5.13 CREDITWORTHINESS IS NOT PROVED BY SHOWING ISSU E AND RECEIPT OF A CHEQUE OR BY FURNISHING A COPY OF STATEMENT OF BANK ACCOUN T, WHEN CIRCUMSTANCES REQUIRES THAT THERE SHOULD BE SOME MORE EVIDENCE OF POSITIVE NATURE TO SHOW THAT THE SUBSCRIBERS HAD MADE GENUINE INVESTMENT OR HAD, ACTED AS ANGEL INVESTORS AFTER DUE DILIGENCE OR FOR PERSONAL REASO NS. THE FINAL CONCLUSION MUST BE PRAGMATIC AND PRACTICAL, WHICH TAKES INTO ACCOUN T HOLISTIC VIEW OF THE ENTIRE EVIDENCE INCLUDING THE DIFFICULTIES, WHICH THE ASSE SSEE MAY FACE TO UNIMPEACHABLY ESTABLISH CREDITWORTHINESS OF THE SHA REHOLDERS. ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 9 5.14 ON THE QUESTION OF CREDITWORTHINESS AND GENUIN ENESS, THERE IS NO DOUBT THAT THE MONEY WAS RECEIVED THROUGH BANKING CHANNEL S, BUT DID NOT REFLECT ACTUAL GENUINE BUSINESS ACTIVITY. THE SHARE SUBSCRI BERS DO NOT HAVE THEIR OWN PROFIT-MAKING APPARATUS AND WERE NOT INVOLVED IN BU SINESS ACTIVITY. THEY MERELY ROTATED MONEY, WHICH WAS COMING THROUGH THE BANK AC COUNTS, WHICH MEANS DEPOSITS BY WAY OF CASH AND ISSUE OF CHEQUES. THE B ANK ACCOUNTS, THEREFORE, DID NOT REFLECT THEIR CREDITWORTHINESS OR EVEN GENU INENESS OF THE TRANSACTION. 5.15 CORRECT POSITION OF LAW IS THAT THE REVENUE AU THORITIES OR THE JUDICIARY SHOULD BE CONVINCED ABOUT THE IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE TRANSACTIONS. THE ONUS TO PROVE THE THREE FACTUM IS ON THE ASSESSEE AS THE FACTS ARE WITHIN THE ASSESSEES KNOWLEDGE. MERE PRODUCTIO N OF INCORPORATION DETAILS, PAN NOS. OR THE FACT THAT THIRD PERSONS OR COMPANY HAD FILED INCOME TAX DETAILS IN CASE OF A PRIVATE LIMITED COMPANY MAY NOT BE SUF FICIENT WHEN SURROUNDING AND ATTENDING FACTS PREDICATE A COVER UP. 5.16 RESPECTFULLY RELYING ON THE FACTS OF THE CASE AND AFORESAID JUDGMENTS, THE APPARENT WAS NOT REAL IN THE PRESENT CASE. THE VARI OUS JUDGMENTS RELIED UPON BY ME LEND FULL SUPPORT TO THE FINDINGS. THEREFORE, THE ADDITION IS MADE AT RS.2,50,00,000/- BEING SHARE CAPITAL RAISED BY THE ASSESSEE, U/S 68 OF THE I.T.ACT, 1961. 6.1 AGGRIEVED, THE ASSESSEE CONTESTED THE QUANTUM A DDITIONS WITH SUCCESS BEFORE LD. FIRST APPELLATE AUTHORITY BY WAY OF ELABORATE WRITTEN SUBMISSIONS, WHICH HAS ALREADY BEEN EXTRACT ED IN THE IMPUGNED ORDER AND THEREFORE, NOT REPEATED HERE FOR THE SAKE OF BREVITY. IN THE SUBMISSIONS, THE ASSESSEE DREW ATTE NTION TO THE ELABORATE DOCUMENTARY EVIDENCES SUBMITTED BY IT TO PROVE THE IDENTITY, CREDITWORTHINESS OF THE INVESTORS AND GEN UINENESS OF THE TRANSACTIONS. IN THE SAID CIRCUMSTANCES, THE ASSESS EE PLEADED THAT IT HAD DISCHARGED THE ONUS BY FURNISHING THE IDENTITY OF THE INVESTOR, THEIR ADDRESS, PAN, FINANCIAL STATEMENTS, CONFIRMAT IONS, DETAILS OF BANK ACCOUNT, BANK STATEMENTS, REGISTRATION NUMBER OF THE COMPANY WITH THE REGISTRAR OF COMPANIES, DOCUMENTS FILED BY THE INVESTORS WITH THE REGISTRAR OF COMPANIES TO COMPLY WITH STAT UTORY OBLIGATIONS, INTIMATION TO THE REGISTRAR OF COMPANIES ABOUT THE ISSUE OF SHARES ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 10 GIVING THE FULL DETAILS OF THE INVESTORS, THE PAYME NT OF STAMP DUTY ON ISSUE OF SHARES, DETAILS OF THE DISTINCTIVE NUMBERS AND SHARE CERTIFICATE NUMBERS OF THE SHARES WHICH WERE ISSUED ALONG WITH INCOME TAX RETURNS OF ALL THE ENTITIES. THE ASSESSE E DENIED HAVING MADE ANY DEALING WITH SHRI PRAVIN KUMAR JAIN. THE A TTENTION WAS AGAIN DRAWN TO THE FACT THAT LD. AO COULD NOT RELY UPON ANY MATERIAL WITHOUT CONFRONTING THE SAME TO THE ASSESSEE AND WI THOUT PROVIDING AN OPPORTUNITY TO THE ASSESSEE TO MEET THE EVIDENCE WHICH IS ALLEGED TO BE AGAINST THE ASSESSEE. RELIANCE WAS AGAIN PLAC ED, INTER-ALIA, ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS P. LTD. [SUPRA]. THE ATTENTION WAS ALSO DRAWN TO THE RETRACTION STAT EMENT FILED BY SHRI PRAVIN KUMAR JAIN SUBSEQUENT TO SEARC H PROCEEDINGS WHEREIN THE IT WAS STATED THAT STATEMENT WAS RECORD ED UNDER COERCION, FORCE AND MENTAL DURESS AND HE DENIED HAVING GIVEN ANY ACCOMMODATION ENTRIES AND FURTHER STATED THAT ALL T HE ENTITIES WERE CARRYING OUT GENUINE BUSINESS ACTIVITIES AND COMPLY ING WITH APPLICABLE LAWS. THE ALLEGATION OF LD. AO THAT THE SHARES WERE SUBSEQUENTLY BOUGHT BACK BY THE PROMOTERS WAS SOUGHT TO BE REBUTTED IN THE STRENGTH THAT THOSE TRANSACTIONS HAPPENED IN AY 2014-15 AND THE I NVESTORS HAD THE OPTION TO LIQUIDATE THE INVESTMENT DEPENDING UPON T HE MARKET SITUATION AND VARIOUS OTHER RELEVANT FACTORS. THEREFORE, THE SUBSEQUENT EVENTS WOULD NOT CHANGE THE CHARACTER OF TRANSACTIONS THAT TOOK PLACED IN AY 2012-13. SINCE THE ASSESSEE FULFILLED THE PRIMARY I NGREDIENTS AS ENVISAGED BY SECTION 68, THE SAID PROVISIONS COULD NOT BE INVOKED TO MAKE ADDITIONS IN THE HANDS OF THE ASSESSEE. IT WAS ALSO PLEADED THAT THE LD. AO DID NOT CONTRADICTED THE EVIDENCES PRODU CED BEFORE HIM AND ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 11 MERELY RELIED UPON THE STATEMENT OF CERTAIN PERSON IGNORING THE FACT THAT THESE STATEMENTS WERE RETRACTED LATER ON. 6.2 THE LD. FIRST APPELLATE AUTHORITY, AFTER DUE CO NSIDERATION OF DOCUMENTARY EVIDENCES SUBMITTED BY THE ASSESSEE IN SUPPORT OF THE TRANSACTIONS, OBSERVED THAT THE PECULIAR FACTS MAY HAVE CAUSED SUSPICION IN THE MIND OF LD. AO, BUT THERE WAS NO E VIDENCE OR ANY OTHER MATERIAL ON RECORD TO HOLD THAT THE ASSESSEE HAD ROUTED ITS OWN MONEY IN THE GARB OF SHARE CAPITAL. IT WAS ALSO NOT ED THAT THE ASSESSEE FILED SUFFICIENT DOCUMENTARY EVIDENCES AS TABULATED BY US IN PARA 5.1 ABOVE AND THEREFORE, IT SUCCESSFULLY FU LFILLED THE PRIMARY INGREDIENTS VIZ. IDENTITY OF THE INVESTORS, CREDITW ORTHINESS OF THE INVESTORS AND GENUINENESS OF THE TRANSACTIONS. MORE SO, THERE WAS NO CASH TRANSACTION WHICH WOULD COMPEL ONESELF TO A SSUME THAT THE TRANSACTIONS WERE NOT GENUINE. THE RATIO OF THE FOL LOWING JUDICIAL DECISIONS WAS NOTED IN THE CONTEXT OF FACTUAL MATRI X: - (I) HONBLE DELHI HIGH COURT IN OASIS HOSPITALITY P VT. LTD. 333 ITR 119 (II) HONBLE BOMBAY HIGH COURT IN CIT V/S CREATIVE WORLD TELEFILMS LTD. 333 ITR 100 (III) HONBLE SUPREME COURT IN CIT V/S P. MOHANKALA 291 ITR 278 (IV) HONBLE DELHI HIGH COURT IN STELLAR INVESTMENT LTD. 192 ITR 287 (V) HONBLE DELHI HIGH COURT IN CIT V/S GANGESHWARI METAL PVT. LTD. 361 ITR 10 6.3 FINALLY, THE MATTER WAS CONCLUDED IN ASSESSEES FAVOR BY OBSERVING AS UNDER: - 5.12 IN VIEW OF THE LEGAL POSITION EMANATING FROM L EGAL PRECEDENTS AND THE OBSERVATIONS OF HONBLE DELHI HIGH COURT, IN THE CA SE OF GANGESHWARI METAL P. LTD. AS DISCUSSED ABOVE IT IS NOTED THAT WHEN REQUI SITE DOCUMENTS SUCH AS PAN, BANK ACCOUNTS, BALANCE SHEET ETC. WERE AVAILABLE WI TH THE A.O., TO ESTABLISH THAT NO CASH TRANSACTIONS WERE INVOLVED IN THE BANK ACCOUNTS OF THE INVESTING COMPANY THEN WITHOUT FURTHER PROBE TO PROVE CONTRAR Y THE ADDITION U/S 68 IN THE HANDS OF THE ASSESSEE CANNOT BE MADE. IN VIEW OF TH E ABOVE DISCUSSION ON THE ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 12 FACTS OF THE CASE AND HAVING REGARD TO THE DECISION S OF THE COURTS AND JUDICIAL PRECEDENTS AS NOTED ABOVE, THE ADDITION MADE BY THE A.O. OF THE SHARE CAPITAL AND PREMIUM OF RS.2,50,00,000/- UNDER SECTION 68 OF THE INCOME TAX ACT 1961 CANNOT BE SUSTAINED IN APPEAL AND IS DIRECTED TO BE DELETED. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED. AGGRIEVED AS AFORESAID, THE REVENUE IS IN FURTHER A PPEAL BEFORE US. 7. THE LD. DEPARTMENTAL REPRESENTATIVE FOR ASSESSEE [DR] RELYING UPON THE FINDINGS OF LD. AO PLACED RELIANCE ON THE DECISION OF HONBLE APEX COURT IN PR.CIT V/S NRA IRON & STEEL PVT. LTD. [103 TAXMANN.COM 48], DECISION OF HONBLE DELHI HIGH COURT IN CIT V/S N.R. PORTFOLIO PVT. LTD. [222 TAXMAN 157] & CIT V/S MAF ACADEMY PVT. LTD. [42 TAXMANN.COM 377] AND THE DECISION OF AHMEDABAD TRIBUNAL IN PAVANKUMAR M.SANGHVI V/S ITO [81 TAXMANN.COM 308]. ON THE OTHER HAND, LD. AUTHORISED REPRESENTATIVE FO R ASSESSEE [AR], DISTINGUISHING THE FACTS OF CASE LAWS CITED B Y THE REVENUE, RELIED UPON THE FINDINGS AND CONCLUSION OF LD. FIRST APPEL LATE AUTHORITY. RELIANCE HAS SIMILARLY BEEN PLACED ON NUMEROUS JUDI CIAL PRONOUNCEMENTS FAVORING THE ASSESSEE. 8.1 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS, RELEVANT MATERIAL ON RECORD AND DELIBERATED ON JUDICIAL PRON OUNCEMENTS AS CITED BEFORE US. FROM PERUSAL OF FACTUAL MATRIX, TH E UNDISPUTED POSITION THAT EMERGES IS THE FACT THE ASSESSEE HAS ISSUED SHARE CAPITAL TO AS MANY AS 8 CORPORATE ENTITIES DURING T HE YEAR AT CERTAIN PREMIUM. IN SUPPORT OF THE TRANSACTIONS, THE ASSESS EE PLACED ON RECORD PLETHORA OF DOCUMENTS AS TABULATED BY US IN PARA 5.1. ON THE STRENGTH OF THIS SAME, IT WAS PLEADED THAT THE ASSE SSEE PROVED THE IDENTITY OF THE INVESTOR, CREDITWORTHINESS OF THE T RANSACTIONS AND ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 13 GENUINENESS OF THE TRANSACTIONS. WE ALSO FIND THAT OUT OF 8 ENTITIES, 4 ENTITIES ARE STATED TO BE BELONGING TO SHRI PRAVIN KUMAR JAIN WHEREAS 3 ENTITIES ARE STATED TO BE BELONGING TO SHRI ABHIS HEK MORARKA GROUP. ONE ENTITY IS STATED TO BE AN INDEPENDENT ENTITY. F ROM THE PERUSAL OF QUANTUM ASSESSMENT ORDER, WE FIND THAT LD. AO HAS H EAVILY RELIED UPON THE STATEMENTS GIVEN BY SHRI PRAVIN KUMAR JAIN DURING SEARCH PROCEEDINGS. RELIANCE WAS ALSO PLACED ON THE STATEM ENT GIVEN BY SHRI ABHISHEK MORARKA BEFORE SALES TAX AUTHORITIES. HOWE VER, NOTHING ON RECORD WOULD ESTABLISH THAT THE SAID STATEMENTS WER E EVER CONFRONTED TO THE ASSESSEE DESPITE BEING SPECIFICALLY BEING AS KED BY THE ASSESSEE IN HIS SUBMISSIONS. NO OPPORTUNITY TO REBU T THE SAME WAS EVER PROVIDED TO THE ASSESSEE. THIS BECOME ALL THE MORE IMPORTANT WHEN THE STATEMENTS WERE RETRACTED LATER ON. 8.2 UPON PERUSAL OF QUANTUM ASSESSMENT ORDER, IT TR ANSPIRES THAT THE ASSESSEE PLACED ON RECORD PLETHORA OF DOCUMENTS IN THE SHAPE OF NAME, ADDRESSES, PAN OF THE INVESTORS, THEIR FINANC IAL STATEMENTS REFLECTING AFORESAID INVESTMENT MADE IN THE ASSESSE E COMPANY, COPY OF THEIR RESPECTIVE INCOME TAX RETURNS, RELEVANT BO ARD RESOLUTIONS AUTHORIZING SUCH INVESTMENTS, COPY OF SHARE APPLICA TION FORMS, DETAILS OF PAYMENT, RESPECTIVE BANK STATEMENTS FROM WHERE T HE INVESTMENT WERE MADE IN THE INVESTEE COMPANY AND CONFIRMATION OF THE INVESTORS WHICH IS EVIDENT FROM THE FOLLOWING SUBMISSIONS / E XPLANATIONS FURNISHED BY THE ASSESSEE BEFORE LOWER AUTHORITIES: - AS REGARDS RIGVEDA PROPERTIES LTD. IS CONCERNED PLE ASE REFER TO PAGES 55 TO 110 OF THE PAPER BOOK. WE ARC ENCLOSING HEREWITH THE FOLLO WING INFORMATION. ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 14 (A) THE TOTAL NUMBER OF SHARE ISSUED IS 10,000 AND OUR CLIENT RECEIVED RS. 25,00,000/- OUT OF THIS RS. 1,00,000/- TOWARDS SHAR E CAPITAL AND RS. 24,00,000/- TOWARDS SHARE PREMIUM. B) SHARE APPLICATION FORM -PAGE NO. 55 TO 56 C)DETAILS OF THE PAYMENTS MADE BY THE PARTY GIVING CHEQUE NO., DATE, NAME OF THE BANK& THE BRANCH PAGE NO. 57 D)PARTY CONFIRMATION GIVING CHEQUE NO., DATE, NAME OF THE BANK, BRANCH, FUNDING CONFIRMATION, PAN NO. -PAGE NO. 58 E)THE COPIES OF THE BANK STATEMENT WHERE SUCH INVES TMENTS ARE REFLECTED - PAGE NO. 59 (F) COPY OF PAN CARD-PAGE NO. 60 (G) AUDITED FINANCIAL STATEMENTS FOR YEAR ENDING 31 .3.2012-PAGE NO, 61 TO 78. (H) BOARD RESOLUTION PASSED AT THE MEETING OF THE B OARD OF DIRECTORS HELD ON 05/03/2012 FOR MAKING INVESTMENTS IN THE SHARES OF THE CLIENT -PAGE NO. 79 (I) COPY OF INCOME TAX RETURN FILED FOR A.Y. 2011-1 2 & FOR A. K 2012-13-PAGE NO. 80 TO 81 (J) PLEASE NOTE THAT THE NET WORTH OF THE INVESTOR COMPANY AS ON 31.3.2011 IS RS. 45 , 57,62,438/- AND AS 31.3.2012 IS RS. 45,94,91,972/-. BOTH THESE FIGURES ARE REFLECTED IN THE BALANCE SHEET OF THE COMPANY WHICH ARE ON PAGES NO. 63 OF THE PAPER BOOK. (K) IN THE BALANCE SHEET OF THE COMPANY AS ON 31.3. 2012. THE TOTAL INVESTMENTS ARE REFLECTED AT RS. 37,66,93,889/-. PLEASE REFER TO PA GE NO. 63. THE BREAK UP OF THE SAME IS ON PAGE NO. 66. 6. AS AQUASTEL WATER PURIFICATION SYSTEMS PVT. LTD. IS CONCERNED PLEASE REFER TO PAGES 111 TO 154 OF THE PAPER BOOK WE ARE ENCLOSI NG HEREWITH THE FOLLOWING INFORMATION. (A) THE TOTAL NUMBER OF SHARE ISSUED IS 6,000 AND O UR CLIENT RECEIVED RS. 15,00,000/- . OUT OF THIS RS. 60,000/- TOWARDS SHARE CAPITAL AN D RS. 14,40,000/- TOWARDS SHARE PREMIUM. (B) SHARE APPLICATION FORM -PAGE NO.LLL TO 112. (C) DETAILS OF THE PAYMENTS MADE BY THE PARTY GIVIN G CHEQUE NO., DATE, NAME OF THE BANK & THE BRANCH -PAGE NO. 113. (D) PARTY CONFIRMATION GIVING CHEQUE NO., DATE, NAM E OF THE BANK, BRANCH, FUNDING CONFIRMATION, PAN NO. -PAGE NO. 114. (E) THE COPIES OF THE BANK STATEMENT -WHERE SUCH IN VESTMENTS ARE REFLECTED - PAGE NO.115. (F) COPY OF PAN CARD - PAGE NO. 116. (G) AUDITED FINANCIAL STATEMENTS FOR YEAR ENDING 31 .3.2012 -PAGE NO.117 TO 127. (H) BOARD RESOLUTION PASSED AT THE MEETING OF THE B OARD OF DIRECTORS HELD ON 09/03/2012 FOR MAKING INVESTMENTS IN THE SHARES OF THE CLIENT -PAGE NO. 128. (I) COPY OF INCOME TAX RETURN FILED FOR A.Y. 2011-1 2 & FOR A.Y. 2012-13 -PAGE NO.129 TO 130. (J) THE COMPANY HAD BORROWED THE FUNDS IN EARLIER A SSESSMENT YEARS AND THE AMOUNT OF BORROWING AS ON 31.3.2011 WAS RS. 7,81,24 ,101/- AND AS ON 31.3.2012 IT WAS RS. 9,00,00,901/-. THE COMPANY ALSO HAD THE SHA RE CAPITAL OF RS. 33, 75.987/- AS ON 31.3.2011 AND THE SHARE CAPITAL AS ON 31.3.20 12 OF RS. 35,94,111/-. THE COMPANY HAD ALSO RECEIVED SHARE APPLICATION OF RS. 5,00,000/- ALL THESE DETAILS ARE REFLECTED IN THE BALANCE SHEET AS ON 31.3.2012 WHIC H IS ON PAGE NO.119. ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 15 7. AS REGARDS UTKANTHA TRADING & PROPERTIES LIMITED IS CONCERNED PLEASE REFER TO PAGES 155 TO 174 OF THE PAPER BOOK. WE ARE ENC LOSING HEREWITH THE FOLLOWING INFORMATION. (A) THE TOTAL NUMBER OF SHARE ISSUED IS 6,000 AND O UR CLIENT RECEIVED RS. 15,00,000/- . OUT OF THIS RS. 60,000/-TOWARDS SHARE CAPITAL AND RS. 14,40,000/-TOWARDS SHARE PREMIUM. B)SHARE APPLICATION FORM -PAGE NO. 155 TO 156. C)DETAILS OF THE PAYMENTS MADE BY THE PARTY GIVING CHEQUE NO., DATE, NAME OF THE BANK & THE BRANCH -PAGE NO. 157. D)PARTY CONFIRMATION GIVING CHEQUE NO., DATE, NAME OF THE BANK, BRANCH, FUNDING INFORMATION, PAN NO. -PAGE NO. 158. E)THE COPIES OF THE BANK STATEMENT WHERE SUCH INVES TMENTS ARE REFLECTED - PAGE NO. 159. (I) COPY OF PAN CARD-PAGE NO. 160. (M) AUDITED FINANCIAL STATEMENTS FOR YEAR ENDING 31 .3.2 012-PAGE NO.161 TO 172. (N) BOARD RESOLUTION PASSED AT THE MEETING OF THE B OARD OF DIRECTORS HELD ON . 15/03/2012 FOR MAKING INVESTMENTS IN THE SHARES OF THE CLIENT -PAGE NO. 173. (O) COPY OF INCOME TAX RETURN FILED FOR A. Y. 2011-12-P AGE NO. 174. (P) THE NET WORTH OF THE COMPANY AS ON 31.3.2011 WA S RS. 2,46,11,393/- AND AS ON 31.3.2012 WAS RS. 2,50,31.09S/-. PLEASE REFER TO THE BALANCE SHEET AS ON 31.3.2012 WHICH IS ON PAGE NO.164. (Q) THE INVESTMENTS REFLECTED IN THE BALANCE SHEET OF THE COMPANY AS ON 31.3.2012 IS RS. 52,81,53,550/-. PLEASE REFER TO PAGE NO.164 AND INE BREAKUP OF THE SAME IS ON PAGE NO. 167. (R) THE COMPANY HAS RECEIVED ADVANCES AMOUNTING TO RS, 68,50,00,000/- AND THE SAME IS REFLECTED IN THE BALANCE SHEET AS ON PAGE N O. 166. 8. AS REGARDS KUSH HINDUSTAN ENTERTAINMENT LTD. IS CONCERNED PLEASE REFER TO PAGES 175 TO 230_ OF THE PAPER BOOK. WE ARE ENCLOSING HER EWITH THE FOLLOWING INFORMATION. (A) THE TOTAL NUMBER OF SHARE ISSUED IS 16,000 AND OUR CLIENT RECEIVED RS. 40,00,000/-. OUT OF THIS RS. 1,60,000/- TOWARDS SHA RE CAPITAL AND RS. 38,40,000/- TOWARDS SHARE PREMIUM. (B) SHARE APPLICATION FORM -PAGE NO. 175. (C) DETAILS OF THE PAYMENTS MADE BY THE PARTY GIVIN G CHEQUE NO., DATE, NAME OF THE BANK & THE BRANCH -PAGE NO. 176. (D) PARTY CONFIRMATION GIVING CHEQUE AA, DATE, NAME : THE BANK, BRANCH, FUNDING CONFIRMATION, PAN NO. -PAGE NO. 177. (E) THE COPIES OF THE BANK STATEMENT WHERE SUCH INV ESTMENTS ARE REFLECTED ~ PAGE NO. 178. (F) COPY OF PAN CARD -PAGE NO. 179. (G) THE COPY OF THE FORM NO. 23AC FOR THE YEAR ENDI NG 31.03.2012 BEING THE FORM FILED BY THE COMPANY DISCLOSING THE FINANCIAL STATE MENTS TO THE REGISTRAR OF COMPANY IN FORM XBRL IS ENCLOSED. PLEASE REFER TO PAGE . NO . 180 TO 207. (H) BOARD RESOLUTION PASSED AT THE MEETING OF THE B OARD OF DIRECTORS HELD ON 03.01.2012 FOR MAKING INVESTMENTS IN THE SHARES OF THE CLIENT -PAGE NO. 208, (I) COPY OF INCOME TAX RETURN FILED FOR A.Y. 2011-1 2-PAGE NO.209 TO 210. (J) PLEASE NOTE THAT THE NET -WORTH OF THE INVESTOR COMPANY AS ON 31.3.2011 IS RS. 3,94,43,600/- AND AS 31.3.2012 IS RS. 4,08,01,953/- . BOTH THESE FIGURES ARE REFLECTED IN THE BALANCE SHEET OF THE COMPANY WHICH ARE ON PA GES NO. 220 OF THE PAPER BOOK. ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 16 (K) IN THE BALANCE SHEET OF THE COMPANY AS ON 31.3. 2012 THE SUM OF RS. 94,08,068/- IS REFLECTED. PLEASE REFER TO PAGE NO. 220. 9. AS REGARDS A & A SHELTERS PRIVATE LTD. IS CONC ERNED PLEASE REFER TO PAGES NO.231 TO 277 OF THE PAPER BOOK. WE ARE ENCLOSING HEREWITH THE FOLLOWING INFORMATION. (A) THE TOTAL NUMBER OF SHARE ISSUED IS 14.000 AND OUR CLIENT RECEIVED RS.35,00,000- OUT OF THIS RS.1,40,000/- TOWARDS SHARE CAPITAL AND RS.33.60.000/- TOWARDS SHARE PREMIUM. B) SHARE APPLICATION FORM-PAGE NO.231 TO 234. C) DETAILS OF THE PAYMENTS MADE BY THE PARTY GIVING CHEQUE NO., DATE, NAME OF THE BANK & THE BRANCH -PAGE NO.235 TO 236. D) PARTY CONFIRMATION GIVING CHEQUE NO., DATE, NAME OF THE BANK, BRANCH, FUNDING CONFIRMATION, PAN NO, -PAGE NO. 237 TO 238. E) COPY OF PAN CARD-PAGE NO. 239. (F) BOARD RESOLUTION PASSED AT THE MEETING OF THE B OARD OF DIRECTORS HELD ON 23.03.2012 FOR MAKING INVESTMENTS IN THE SHARES OF THE CLIENT - PAGE NO. 240. 10. AS REGARDS CASPER ENTERPRISES PVT. LTD. IS CONC ERNED PLEASE REFER TO PAGES NO. 278 TO 356 OF THE PAPER BOOK.WE ARE ENCLOSING HEREW ITH THE FOLLOWING INFORMATION. (A) THE TOTAL NUMBER OF SHARE ISSUED IS 10,000 AND OUR CLIENT RECEIVED RS. 25,00,000/-. OUT OF THIS RS. 1,00,000/- TOWARDS SHA RE CAPITAL AND RS. 24,40,000/- TOWARDS SHARE PREMIUM. (B) SHARE APPLICATION FORM -PAGE NO. 278. (C) DETAILS OF THE PAYMENTS MODE BY THE PARTY GIVIN G CHEQUE NO., DATE, NAME OF THE BANK & THE BRANCH -PAGE NO. 279. (D) PARTY CONFIRMATION GIVING CHEQUE NO., DATE, NAM E OF THE BANK, BRANCH, FUNDING CONFIRMATION, PAN NO. -PAGE NO. 280. (E) THE COPIES OF THE BANK STATEMENT WHERE SUCH INV ESTMENTS ARE REFLECTED- PAGE NO. 281 TO 282. (F) COPY OF PAN CARD-PAGE NO. 283. (G) THE COPY OF THE FORM NO. 23AC FOR THE YEAR ENDI NG 31.03.2012 BEING THE FORM FILED BY THE COMPANY DISCLOSING THE FINANCIAL STATE MENTS TO THE REGISTRAR OF COMPANY IN FORM XBRL IS ENCLOSED - PAGE NO. 284 TO 331. (H) BOARD RESOLUTION PASSED AT THE MEETING OF THE B OARD OF DIRECTORS HELD ON 02.01.2012 FOR MAKING INVESTMENTS IN THE SHARES OF THE CLIENT-PAGE NO. 332. I) COPY OF INCOME TAX RETURN FILED FOR A. Y. 2011-1 2 -PAGE NO. 333 TO334. J) THE COPY OF THE FORM NO.23AC BEING THE FORM FILE D BY THE COMPANY DISCLOSING THE FINANCIAL STATEMENTS TO THE REGISTRAR OF COMPANY IN FORM XBRL IS ENCLOSED. IN THE BALANCE SHEET THE COMPANY HAS BORROWED FUNDS OF RS. 70,77,19,419/-AS ON 31.3.2011 AND RS. 56,61,48,543/- AS ON 31.3.2012. P LEASE REFER TO PAGE NO. 346. THE COMPANY HAS MADE INVESTMENTS IN SHARES OF OTHER COMPANIES AMOUNTING TO RS. 35,57,77,437/-. PLEASE REFER TO PAGE NO. 346. 11. AS REGARDS OLIVE OVERSEAS PVT. LTD. IS CONCERNE D PLEASE REFER TO PAGES 357 TO 425 OF THE PAPER BOOK WE ARE ENCLOSING HEREWITH THE FOLLOWING INFORMATION. (A) THE TOTAL NUMBER OF SHARE ISSUED IS 22,000 AND OUR CLIENT RECEIVED RS. 55,00,000/-. OUT OF THIS RS. 2,20,0007- TOWARDS SHA RE CAPITAL AND RS. 52,80,000/- TOWARDS SHARE PREMIUM. ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 17 (B) SHARE APPLICATION FORM -PAGE NO. 357 TO 358. (C) DETAILS OF THE PAYMENTS MADE BY THE PARTY GIVIN G CHEQUE NO., DATE, NAME OF THE BANK & THE BRANCH -PAGE NO. 359 TO 360. (D) PARTY CONFIRMATION GIVING CHEQUE NO,, DATE, NAM E OF THE BANK, BRANCH, FUNDING CONFIRMATION, PAN NO. -PAGE NO. 361 TO 362_. (E) THE COPIES OF THE BANK STATEMENT WHERE SUCH INV ESTMENTS ARE REFLECTED - PAGE NO. 363 TO 364. F) COPY OF PAN CARD-PAGE NO. 365_. G)COPY OF THE FORM NO. 2 3AC BEING THE FORM FILED F OR THE YEAR ENDING 31.03.2012 BY COMPANY DISCLOSING THE FINANCIAL STATEMENTS TO THE REGISTRAR OF COMPANY IN FORM IS ENCLOSED. - PAGE NO. 366 TO 398. H)RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS HELD ON 02.01.2012 MAKING INVESTMENTS IN THE SHARES OF THE CLIENT -PAG E NO. 399. I)COPY OF INCOME TAX RETURN FILED FOR A.Y. 2011-12 -PAGE NO. 400 TO 401. J)PLEASE NOTE THAT THE NET WORTH OF THE INVESTOR CO MPANY AS ON 31.3.2011 IS RS.2,79,44,320/- AND AS 31.3.2012 IS RS. 3,03,49,52 0/-. BOTH THESE FIGURES ARE REFLECTED IN THE BALANCE SHEET OF THE COMPANY WHICH ARE ON PAGES 414 OF THE PAPER BOOK THE COMPANY ALSO RECEIVED SHARE APPLICATION OF RS, 6,50,00,000/- AS ON 31,3.2012. PLEASE REFER TO PAGE NO. 414. (K) THE COMPANY HAS MADE INVESTMENTS IN SHARES AMOU NTING TO RS. 4,74,80,084/-. PLEASE REFER TO PAGE NO. 414. 12. AS REGARDS NAKSHATRA BUSINESS PVT. LTD. IS CO NCERNED PLEASE REFER TO PAGES 426 TO 489 OF THE PAPER BOOK. WE ARE ENCLOSING HE REWITH THE FOLIO-WING INFORMATION. (A) THE TOTAL NUMBER OF SHARE ISSUED IS 16,000 AND OUR CLIENT RECEIVED RS. 40,00,000/-, OUT OF THIS RS. I,60,000/- TOWARDS SHA RE CAPITAL AND RS. 38,40,000/- TOWARDS SHARE PREMIUM. (B) SHARE APPLICATION FORM -PAGE NO. 426 TO 427. (C) DETAILS OF THE PAYMENTS MADE BY THE PARTY GIVIN G CHEQUE NO., DATE, NAME OF THE BANK & THE BRANCH -PAGE NO. 428. (D) PARTY CONFIRMATION GIVING CHEQUE NO., DATE, NAM E OF. THE BANK, BRANCH, FUNDING CONFIRMATION, PAN NO. -PAGE NO. 429. (E) THE COPIES OF THE BANK STATEMENT WHERE SUCH INV ESTMENTS ARE REFLECTED - PAGE NO. 430 TO 431. (F) COPY OF PAN CARD-PAGE NO. 432. (G) THE COPY OF THE FORM NO. 23AC BEING THE FORM FI LED FOR THE YEAR ENDING 31.03.2012 BY THE COMPANY DISCLOSING THE FINANCIAL STATEMENTS TO THE REGISTRAR OF COMPANY IN FORM XBRL IS ENCLOSED, PAGE NO. 433 TO 463. (H) BOARD RESOLUTION PASSED AT THE MEETING OF THE B OARD OF DIRECTORS HELD ON 02.01.2012 FOR MAKING INVESTMENTS IN THE SHARES OF THE CLIENT -PAGE NO. 464. (I) COPY OF INCOME TAX RETURN FILED FOR A.Y. 2011-1 2-PAGE NO. 465 TO 466. D) THE COMPANY HAS BORROWED THE FUNDS AMOUNTING TO RS. 22,11,22,751/- AS ON 31.3,2011 AND FDS. 15,50,34,000/- AS ON 31.3.2012 P AGE NO. 478. (K) THE COMPANY HAS MADE INVESTMENT IN SHARES AMOUN TING TO RS. 3,91,68,8951- AS ON 31.3.2012. PLEASE REFER TO PAGE NO. 478. ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 18 UPON PERUSAL OF THE SAME, WE FIND THAT THE ASSESSEE HAD, INTER-ALIA, NOT ONLY FURNISHED COPIES OF BANK STATEMENTS BUT AL SO PLACED ON RECORD FINANCIAL STATEMENTS REFLECTING THE SOURCE S TATED INVESTMENTS IN THE ASSESSEE COMPANY. THIS IS COUPLED WITH THE ADMI TTED FACT THAT SHRI ABHISHEK MORARKA, DIRECTOR OF AS MANY AS 3 ENT ITIES VISITED THE OFFICE OF LD. AO TWICE BUT STILL NOTHING ADVERSE CO ULD BE BROUGHT ON RECORD BY LD. AO TO CONTRADICT THE CLAIM THE ASSESS EE. IN FACT, NONE OF THE EVIDENCES SUBMITTED BY THE ASSESSEE WERE EVER R EBUTTED BY LD. AO BUT HEAVY RELIANCE WAS PLACED ON THIRD PARTY STA TEMENTS WHICH WERE NEVER CONFRONTED TO THE ASSESSEE AND NO OPPORT UNITY OF CROSS- EXAMINATION WAS EVER PROVIDED TO THE ASSESSEE. NOTH ING HAS BEEN BROUGHT ON RECORD TO ESTABLISH THE FACT THAT ANY CA SH GOT EXCHANGED BETWEEN THE ASSESSEE AND INVESTORS WHICH WOULD CORR OBORATE THE FACT THAT ASSESSEES UNACCOUNTED MONEY GOT ROUTED BACK I N THE GARB OF SHARE CAPITAL. THE LD. AO, WHILE CONFIRMING THE ADD ITION, HAS ALREADY ADMITTED THAT THE BANK STATEMENTS OF THE INVESTORS WERE DULY FURNISHED AND THERE IS NO ALLEGATION OF ANY IMMEDIATE CASH DE POSITS IN THOSE ACCOUNTS. 8.3 PROCEEDING FURTHER, WE ARE OF THE CONSIDERED OP INION THAT NO ADVERSE INFERENCE COULD BE DRAWN ON BARE FACTS THAT SHARES WERE SUBSEQUENTLY REPURCHASED BY THE PROMOTERS OR SIMILA R SHARES WERE ISSUED TO THE PROMOTERS AT FACE VALUE DURING THE YE AR UNLESS THE SAID FACTS WERE CORROBORATED BY ANY ADVERSE EVIDENCES, W HICH WE ARE UNABLE TO FIND. SIMILARLY, SO FAR AS THE VALUATION OF SHARES IS CONCERNED, WE FIND THAT THE ASSESSEE HAD JUSTIFIED THE VALUATION BY ADOPTING DISCOUNTED CASH FLOW METHOD AND THE ONUS WAS ON REVENUE ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 19 TO REBUT THE METHOD OF VALUATION. WE ARE UNABLE TO FIND ANY SUCH EXERCISE BY REVENUE. 8.4 LASTLY, IT IS TRITE LAW THAT NO ADDITION COULD BE MADE MERELY ON THE BASIS OF SUSPICION, CONJECTURES OR SURMISES. TH E EXTENT AND DEGREE OF INVESTIGATION CARRIED OUT BY LD. AO DO NO T INSPIRE US TO CONCUR WITH THE SUBMISSIONS MADE BY LD. DR BEFORE U S. 8.5 THEREFORE, ON THE FACTS AND CIRCUMSTANCES, THE CASE LAWS BEING CITED BY US IN THE OPENING PARAGRAPHS AND RELIED UP ON BY LD. FIRST APPELLATE AUTHORITY WERE APPLICABLE TO THE FACTS OF THE CASE AND WE ARE OF THE CONSIDERED OPINION THAT THE REVENUE WAS NOT ABLE TO DISCHARGE THE BURDEN OF DISPROVING THE GENUINENESS OF THE STA TED TRANSACTIONS. 8.6 THE LD. DR HAS RELIED UPON THE JUDGEMENT OF HON BLE APEX COURT RENDERED IN PCIT VS. NRA IRON & STEEL PVT. LTD. [412 ITR 161] WHICH WE HAVE CAREFULLY STUDIED. UPON PERUSAL, WE NOTE CERTA IN DISTINGUISHING FEATURES VIS--VIS FACTUAL MATRIX OF THE PRESENT CA SE. UPON PERUSAL OF PARA 3.7 & 3.8 OF THE SAID JUDGEMENT, IT IS NOTED THAT L D. AO HAD ISSUED SUMMONS TO AS MANY AS 19 INVESTOR ENTITIES BUT NOBO DY APPEARED ON BEHALF OF THE INVESTOR COMPANIES. THE SUBMISSIONS W ERE RECEIVED THROUGH DAK ONLY WHICH CREATED A DOUBT ABOUT THE IDENTITY O F THE INVESTOR COMPANY. FURTHER, LD. AO INDEPENDENTLY GOT FIELD IN QUIRIES CONDUCTED AT THE LOCATION OF INVESTOR COMPANIES, THE RESULT OF W HICH HAS BEEN TABULATED IN THE SAID PARA. NOTICE WAS SERVED ON FEW ENTITIES BUT THE SAME WERE NOT REPLIED TO. IN FEW CASES, THE NOTICES WERE RETURNED BACK. SUBMISSIONS WERE RECEIVED IN FEW CASES THOUGH DAK WHEREIN THE C OMPANY ONLY PROVIDED THE MODE OF INVESTMENT BUT NO REASONS WERE SUPPLIED FOR PAYING A HUGE PREMIUM OF RS.190/- PER SHARE. ANOTHER STRIK ING FEATURE WAS THAT ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 20 MOST OF THE INVESTORS HAD REFLECTED MEAGRE INCOME D URING ASSESSMENT YEAR UNDER DISPUTE. THE TWO COMPANIES IN MUMBAI AS WELL AS GUWAHATI WERE FOUND TO BE NON-EXISTENT. WITH RESPECT TO KOLK ATA COMPANIES, THE RESPONSE CAME THROUGH DAK ONLY AND NOBODY APPEARED. FURTHER, THE BANK STATEMENTS WERE NOT PRODUCED IN MOST OF THE CA SES TO ESTABLISH THE SOURCE OF FUNDS FOR MAKING HUGE INVESTMENTS. HOWEVE R, THE FACTUAL MATRIX, BEFORE US, IN THE PRESENT CASE IS QUITE DIF FERENT. AS NOTED IN EARLIER PARAGRAPHS, THE ASSESSEE HAS DULY DISCHARGED THE IN ITIAL ONUS OF PROVING THE IDENTITY OF THE INVESTORS, CREDITWORTHINESS OF THE TRANSACTIONS AND GENUINENESS OF THE TRANSACTIONS. THEREFORE, THE RAT IO OF AFORESAID DECISION, IN OUR RESPECTFUL SUBMISSION, DO NOT APPL Y TO THE FACTS OF THE CASE. 8.7 THE DECISION OF HONBLE DELHI HIGH COURT IN CIT V/S N.R. PORTFOLIO PVT. LTD. [SUPRA] HAS BEEN RENDERED IN PECULIAR CIRCUMSTANCES WHEREIN THE ASSESSEE COMPANY ADOPTED NON- COOPERATIVE ATTITUDE BEFORE LD. AO WITH A VIEW TO T HWART THE INVESTIGATION, WHICH IS NOT THE CASE HERE. THE PERU SAL OF FACTS IN THE CASE OF CIT V/S MAF ACADEMY PVT. LTD. [SUPRA] WOULD REVEAL THAT THERE WAS IMMEDIATE CASH DEPOSIT BEFORE MAKING INVE STMENT IN THE ASSESSEE COMPANY, WHICH IS NOT THE ALLEGATIONS HERE . SIMILARLY, THE DECISION OF AHMEDABAD TRIBUNAL IN PAVANKUMAR M.SANGHVI V/S ITO [81 TAXMANN.COM 308] DEALS WITH THE TRANSACTIONS OF LOANS AND THE PERUSAL OF BANK STATEMENT OF LENDER ENTITIES REVEAL ED HIGH TRANSACTIONS DURING THE DAY AND A CONSISTENTLY MINIMAL BALANCE A T END OF WORKING DAY. THE JUDGMENT WAS RENDERED AFTER EXTENSIVE ANALYSIS OF THE BANK TRANSACTIONS. NO SUCH FACTS HAVE BEEN SHOWN TO HAVE EXISTED BEFORE US ITA NO.3725/MUM/2017 M/S. ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR :2012-13 21 AND NO SUCH ALLEGATIONS OF IMMEDIATE CASH DEPOSIT H AVE BEEN LEVELED BY LD. AO AGAINST THE ASSESSEE. THEREFORE, THE SAID DE CISIONS, IN OUR RESPECTFUL SUBMISSION, WOULD NOT APPLY TO THE FACTS OF THE CASE. 8.8 KEEPING IN VIEW THE ENTIRETY OF FACTS AND CIRCUMSTA NCES, WE ARE OF THE CONSIDERED OPINION THAT THE IMPUGNED ORDER, ON THE STATED ISSUE OF ADDITION U/S 68, WOULD REQUIRE NO INTERFERENCE ON O UR PART. THEREFORE, FINDING NO INFIRMITY IN THE SAME, WE DISMISS THE AP PEAL. 9. IN RESULT THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND AUGUST, 2019. SD/- SD/- (MAHAVIR SINGH) (MA NOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 22/08/2019 SR.PS, JAISY VARGHESE !'! / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &'#% / THE RESPONDENT 3. . ( ) / THE CIT(A) 4. . / CIT CONCERNED 5. /0 &)1 , 1 , / DR, ITAT, MUMBAI 6. 0234 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.