DCIT 5 (1), Indore V. M/s Sanverwala Jewellers Pvt. Ltd, Indore

ITA 384/Ind/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4835 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-03-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 26-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJEEB JAIN
• Assessee Lawyers: S N AGRAWAL; BHAV ESH AGRAWAL ARS
• Keywords: Capital asset converted into stock in trade; Capital asset; Income from undisclosed sources; Retrospective amendment; Question of law
• Section: 143(3); 195; 274; 264; 64; 43; 48; 13; 22; 131; 69; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI MANISH BORAD,ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER VIRTUAL HEARING ITA NO.384/IND/2018 ASSESSMENT YEAR:2012-13 DCIT - 5 ( 1 ) INDORE / VS. M/S. SANVERWALA JEWELLERS PVT. LTD. 12, CHHOTA SARAFA INDORE (APPELLANT) (R E VENUE ) P.A. NO. AAOCS7650K APPELLANT BY SHRI RAJEEB JAIN , SR. DR RE SPONDENT BY S/SHRI S.N. AGRAWAL & BHAV ESH AGRAWAL , ARS DATE OF HEARING: 22.06.2021 DATE OF PRONOUNCEMENT: 22.09.2021 / O R D E R PER MANISH BORAD, A.M: THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE O F THE REVENUE FOR ASSESSMENT YEAR 2012-13 IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-II (IN SHORT L D. CIT], INDORE M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 2 DATED 15.01.2018 WHICH ARE ARISING OUT OF THE ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT 1961 ( IN SHORT THE A CT) DATED 30.03.2015 FRAMED BY ACIT-5(1) INDORE. 2. GROUND NOS.1 TO 3 RELATES TO DELETION OF ADDITI ON OF RS.3,17,39,640/- U/S 68 OF THE I.T. ACT AS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE COMPANY IN RESPECT OF INCREASE IN THE SHARE CAPITAL. 3. BRIEF FACTS AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE FILED E-RETURN OF INCOME DECLARING TOTAL INCOME AT RS.42,50,050/- ON 29.9.2012. WHILE GOING THROUGH THE AUDITED TAX REPO RT AND ANNEXURES THEREOF, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD RECEIVED SHARE CAPITAL AND SHARE PREMIUM MONEY OF RS.3,35,39,640/- DURING THE YEAR UNDER CONSIDERATIO N. ACCORDINGLY, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE RELEVANT INFORMATION. IN RESPONSE, THE ASSESSEE FURNISHED TH E LIST OF SHARE APPLICANTS AND THE ASSESSING OFFICER ISSUED SUMMONS U/S 131 TO THE SHARE APPLICANTS. THE ASSESSING OFFICER NOTED T HAT SOME OF THEM APPEARED IN OFFICE ON VARIOUS DATES AND STATEMENT O N OATH WAS RECORDED. THE ASSESSING OFFICER NOTED THAT SOME SHA RE APPLICANTS M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 3 DENIED TO HAVE BEEN ALLOTTED OR HAVE PURCHASED THE SHARES OF THE ASSESSEE COMPANY. ULTIMATELY, THE ASSESSING OFFICER MADE THE ADDITION OF RS.3,17,39,640/- U/S 68 OF THE I.T. ACT TO THE TOTAL INCOME OF THE ASSESSEE COMPANY IN RESPECT OF INCREA SE IN THE SHARE CAPITAL. 4. BEING AGGRIEVED, THE ASSESSEE CHALLENGED THE AC TION OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A). THE LD. CI T(A) SUMMARIZED THE BREAKUP OF THE SHARE CAPITAL AND HAVING GONE TH ROUGH THE FACTS, SUBMISSIONS AND JUDICIAL PRONOUNCEMENTS THEREOF DEL ETED THE ADDITION. THE RELEVANT DISCUSSION MADE BY LD. CIT(A ) IS REPRODUCED HEREUNDER: THE ASSESSEE COMPANY HAD ISSUED SHARE CAPITAL OF R S 30,39,640/- TO SHRI SURENDRA SONI IN LIEU OF TRANSFER OF HIS RUNNI NG BUSINESS TO THE ASSESSEE COMPANY. THE ASSESSEE COMPANY IN CONSIDERA TION OF BUSINESS ASSETS ISSUED SHARES AND THEREFORE THE ASS ESSING OFFICER WAS NOT JUSTIFIED IN ADDING THE SAME TO THE TOTAL I NCOME OF THE APPELLANT. THE BUSINESS ASSETS AS TRANSFERRED FROM SHRI SURENDRA SONI WAS DULY CONSIDERED BY THE ASSESSING OFFICER A S GENUINE. IN SUCH A SITUATION, THERE WAS NO REASON FOR AO TO DISBELIE VE THE SHARE CAPITAL AS ISSUED TO HIM. I HEREBY DIRECT THE ASSESSING OFF ICER TO DELETE THE ADDITION OF RS 30,39,640/- AS MADE TO THE TOTAL INC OME OF THE APPELLANT. 4.1.2.1] THE APPELLANT COMPANY ALSO RECEIVED SHARE CAPITAL OF RS 2,87,00,000/- FROM THE THIRTY-ONE SHARE APPLICANTS, MOST OF THE SHARE M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 4 APPLICANTS PERSONALLY APPEARED BEFORE THE ASSESSING OFFICER AND THEIR STATEMENT WAS ALSO RECORDED ON OATH. IN THE STATEME NT AS RECORDED BEFORE THE ASSESSING OFFICER, ALL THE SHARE APPLICA NT DULY ACCEPTED THAT THEY HAVE INVESTED AMOUNT IN THE SHARE CAPITAL OF T HE APPELLANT COMPANY AND ALSO EXPLAINED THE SOURCE OF INVESTMENT MADE IN THE SHARE CAPITAL. IN THE SHAREHOLDER- WISE CHART AS PR EPARED BY THE APPELLANT, IT HAS DISCUSSED ENTIRE DOCUMENTS AS FIL ED BY THEM AND ALSO GIVING REFERENCE OF THE STATEMENT AS RECORDED, THE SAID CHART SO PREPARED IS REPRODUCED AS UNDER:- S.NO NAME OF THE SHARE APPLICANT PA NO AMOUNT [RS ] 1 SHRI ANAR SINGH PARIHAR N.A. RS 950000/- 1.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 1.2 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY. 1.3 DRIVING LICENCE 1.4 COPY OF HIS STATEMENT AS RECORDED U/S 131 OF TH E INCOME TAX ACT 2 SHRI ANKIT VERMA AHLPV9818R RS 8,00,000 2.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED 2.2 COPY OF PAN CARD 2.3 COPY OF HIS INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13 2.4 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY 2.5 COPY OF HIS STATEMENT AS RECORDED U/S 131 OF TH E INCOME TAX ACT 3 SHRI ANOOP SINGH RAJPUT N.A. RS 950000/- 3.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 3.2 COPY OF HIS BANK ACCOUNT WITH BANK OF INDIA DUL Y HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY 3.3 AADHAR CARD 3.4 COPY OF HIS STATEMENT AS RECORDED DURING THE CO URSE OF SEARCH M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 5 4 SHRI ASHISH KUMAR SONI DDKPS8760M RS 14,00,000 4.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 4.2 COPY OF PAN CARD 4.3 COPY OF INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13 4.4 COPY OF HIS STATEMENT AS RECORDED U/S 131 OF TH E INCOME TAX ACT. 5 SHRI HARISH SINGH MANDLOI N.A. RS 10,00,000 5.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 5.2 COPY OF VOTER CARD 5.3 COPY OF HIS BANK PASSBOOK WITH INDORE PREMIER C O-OPERATIVE BANK LIMITED DULY HIGHLIGHTED THE AMOUNT OF SHARE APPLIC ATION MONEY. 5.4 COPY OF HIS STATEMENT AS RECORDED U/S 131 IN AS SESSMENT PROCEEDING 5.5 COPY OF HIS DRIVING LICENSE 6 SHRI HUKUM SINGH N.A. 10,00,000 6.1 SHARE APPLICATION MONEY FORM DULY SIGNED 6.2 COPY OF PAN CARD 6.3 COPY OF HIS BANK ACCOUNT 6.4 COPY OF HIS STATEMENT AS RECORDED DURING THE CO URSE OF ASSESSMENT PROCEEDING 6.5 COPY OF VOTER ID CARD 7 SMT KAMLA BAI VERMA AOKPV5411J RS 900000/- 7.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 7.2 PAN CARD 7.3 COPY OF HIS INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13. 7.4 COPY OF HER BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY. 7.5 SHRI ANKIT VERMA IN HIS STATEMENT DULY ACCEPTED INVESTMENT MADE BY SMT KAMLA BAI VERMA IN THE SHARE APPLICATION MONEY 8 SMT KAUSHALYA BAI N.A. RS 500000/- 8.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 8.2 AADHAR CARD M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 6 8.3 COPY OF BANK ACCOUNT WITH BANK OF BARODA 8.4 STATEMENT OF HER HUSBAND SHRI BABULAL WAS RECOR DED ON OATH WHEREIN HE HAS CATEGORICALLY ACCEPTED ABOUT THE INVESTMENT MADE IN THE SHARE APPLICATION MONEY OF THE ASSESSEE COMPANY 8.5 COPY OF DRIVING LICENCE OF HER HUSBAND SHRI BAB ULAL 9 SMT KUSUM VERMA AOLPV1256L RS 800000/- 9.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 9.2 PAN CARD 9.3 COPY OF HIS INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13. 9.4 COPY OF HER BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY. 10 SHRI MESAR SINGH MOURYA N.A. RS 1150000 10.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 10.2 VOTER ID 10.3 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE ENTRY RELATED TO INVESTMENT IN THE SHARE APPLICATION MONEY. 10.4 NIHAL SINGH IN HIS STATEMENT HAS ACCEPTED ABOU T THE INVESTMENT MADE BY SHRI MESAR SINGH MOURYA 11 SHRI MOHAN MANDLOI BGBPM4765J RS 950000/- 11.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 11.2 PAN CARD 11.3 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE ENTRY RELATED TO THE INVESTMENT IN THE SHARE APPLICATION MONEY. 11.4 COPY OF HIS STATEMENT AS RECORDED U/S 131 OF T HE ACT 11.5 COPY OF DRIVING LICENCE 12 SMT NIDHI VERMA ANPPV4738E RS 600000/- 12.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 12.2 PAN CARD 12.3 COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN A S FILED. 12.4 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE ENTRY RELATED TO THE INVESTMENT IN THE SHARE APPLICATION MONEY M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 7 12.5 COPY OF AFFIDAVIT AS FILED DURING THE COURSE O F ASSESSMENT 13 SHRI NIHAL SINGH N.A. RS 1950000 13.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 13.2 VOTER ID 13.3 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE ENTRY RELATED TO THE INVESTMENT IN THE SHARE APPLICATION MONEY. 13.4 COPY OF HIS STATEMENT AS RECORDED U/S 131 OF T HE ACT 14 SHRI RAMESH SEMRE DUEPS1511R RS 300000/- 14.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED 14.2 PAN CARD 15 SHRI RAMESH CHAND CHOUHAN, NAWADA ANNPC4310R RS 1000000 15.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 15.2 VOTER ID 15.3 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE ENTRY RELATED TO THE INVESTMENT IN THE SHARE APPLICATION MONEY. 15.4 COPY OF PAN CARD 15.5 COPY OF HIS STATEMENT AS RECORDED U/S 131 OF T HE ACT 16 SHRI SHANKAR LAL BAGANNA N.A. RS 500000/- 16.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 16.2 VOTER ID 16.3 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE ENTRY RELATED TO THE INVESTMENT IN THE SHARE APPLICATION MONEY. 16.4 COPY OF HIS STATEMENT RECORDED U/S 131 IN ASSE SSMENT PROCEEDING 17 SHRI SHUBHAM VERMA AOKPV5410K RS 400000/- 17.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED 17.2 PAN CARD . 17.3 COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN A S FILED. 17.4 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY. M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 8 17.5 THE CHEQUE PRIOR TO INVESTMENT RECEIVED FROM S HRI AMIT SONI. 18 SHRI SHYAM SINGH MOURYA N.A. RS 1950000/ 18.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 18.2 VOTER ID 18.3 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE ENTRY RELATED TO THE INVESTMENT IN THE SHARE APPLICATION MONEY. 18.4 NIHAL SINGH IN HIS STATEMENT HAS ACCEPTED ABOU T THE INVESTMENT MADE BY SHRI SHYAM SINGH MOURYA 19 SHRI SODAN SINGH N.A. RS 1000000 19.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 19.2 VOTER ID 19.3 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE ENTRY RELATED TO THE. INVESTMENT IN THE SHARE APPLICATION MONEY. 19.4 COPY OF HIS STATEMENT AS RECORDED ON OATH U/S 131 OF THE ACT 19.5 COPY OF HIS DRIVING LICENCE 20 SMT SONA VERMA AOLPV1274N RS 1100000 20.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 20.2 PAN CARD 20.3 COPY OF HER INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13. 20.4 COPY OF HER BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY. 20.5 COPY OF HER AFFIDAVIT FILED AS DISCUSSED IN PA RA 2.16 OF THE ASSESSMENT ORDER 21 SMT SUMAN VERMA AOKPV5412M RS 800000/- 21.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 21.2 PAN CARD 21.3 COPY OF HER INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13. 21.4 COPY OF HER BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY. 21.5 PRIOR TO THE ISSUANCE OF THE CHEQUES AMOUNT WE RE RECEIVED FROM THE BANK ACCOUNT OF SHRI AMIT SONI M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 9 22 SHRI VED PRAKASH VERMA ADFPV5995H RS 1100000 22.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 22.2 PAN CARD 22.3 COPY OF HIS INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13. 22.4 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY. 22.5 PRIOR TO THE ISSUANCE OF THE CHEQUE AMOUNT WAS RECEIVED FROM SHRI AMIT SONI 23 SMT VIDHI VERMA AMYPV5139K RS 800000/- 23.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 23.2 PAN CARD 23.3 COPY OF HER INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13. 23.4 COPY OF HER BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY. 23.5 COPY OF AFFIDAVIT WAS FILED AND ALSO DISCUSSED IN PARA 2.16 24 SHRI SANJAY SHARMA CKPPS0242H RS 2050000 24.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 24.2 PAN CARD 24.3 COPY OF HIS BANK ACCOUNT 24.4 COPY OF HIS STATEMENT AS RECORDED U/S 131 OF T HE ACT 25 SHRI VIJAY SEMRE AYPPS8021E RS 200000/- 25.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 25.2 COPY OF HIS INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13. 25.3 COPY OF HIS STATEMENT AS RECORDED U/S 131 OF T HE ACT 26 SHRI MANOJ PATEL CBWPM2597R RS 1400000 26.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 26.2 VOTER ID 26.3 PAN CARD 26.4 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 10 APPLICATION MONEY. 26.5 COPY OF HIS STATEMENT AS RECORDED U/S 131 OF T HE ACT DURING THE ASSESSMENT PROCEEDING 27 SHRI MUKESH MORYA N.A. RS 950000/- 27.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 27.2 VOTER ID 27.3 COPY OF HIS BANK ACCOUNT DULY HIGHLIGHTING THE AMOUNT OF SHARE APPLICATION MONEY. 27.4 COPY OF HIS STATEMENT RECORDED U/S 131 OF THE ACT 28 SHRI GAUTAM VERMA ALLPV7829C RS 200000/- 28.1 COPY OF SHARE APPLICATION MONEY FORM 28.2 COPY OF STATEMENT OF SHRI GAUTAM VERMA AS RECOR DED U/S 131 OF THE ACT 28.3 COPY OF PAN CARD 29 SMT KHUSBHO SONI DEVPS7529N 9,00,000 29.1 HER HUSBAND SHRI ASHISH SONI IN HIS STATEMENT HAS ALSO CONFIRMED THE INVESTMENT MADE BY HER 30 SMT CHANDRA SEMRE DUEPS1510Q RS 3,00,000 30.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 30.2 COPY OF PAN CARD 30.3 COPY OF HIS INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13 31 SHRI RAJESH SONI BOGPS9852H 8,00,000 31.1 COPY OF SHARE APPLICATION FORM DULY SIGNED AND FILLED. 31.2 COPY OF PAN CARD 31.3 COPY OF HIS INCOME TAX RETURN AS FILED FOR THE ASST YEAR 2012-13 4.1.2.2] THE ASSESSING OFFICER IN PARA 2.9 OF THE A SSESSMENT ORDER CATEGORICALLY ACCEPTED THAT MOST OF THE SHARE APPLI CANTS HAD APPEARED BEFORE HIM AND THEIR STATEMENTS WERE ALSO RECORDED. PARA 2.9 OF THE ORDER IS REPRODUCED AS UNDER:- M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 11 2.9 IN RESPONSE TO WHICH SHRI AMIT SONI PRODUCED MOST OF SHARE APPLICANTS ON VARIOUS DATES. STATEMENT ON OATH WAS ALSO RECORDED OF THOSE PERSONS. IN THE PROCESS OF RECORDING STATEMEN T, IT IS LEARNT THAT THE MOST OF SHARE APPLICANTS ARE FARMERS RESIDING A T OUTSKIRTS OF INDORE CITY. THEY CONFIRMED TO HAVE INVESTED MONEY IN THE FORM OF SHARE WITH THE ASSESSEE COMPANY. THEY HAVE ALSO STA TED THAT SOURCE OF SUCH INVESTMENT IS INCOME FROM AGRICULTURAL ACTI VITY, BUT THEY HAVE NOT SUBMITTED COPY OF PI AND PII TO ESTABLISH THE P ROOF OF AGRICULTURAL ACTIVITY DONE BY THEM AND QUANTUM OF AGRICULTURE IN COME WHICH HAS BEEN INVESTED IN THE ASSESSEE COMPANY. THE ASSESSING OFFICER REFERRED TO THE BANK ACCOUNTS OF SMT KAMLA BAI VERMA, SMT SUMAN VERMA, SHRI SHUBHAM VERMA AND SHR I VED PRAKASH VERMA AND ALSO OBSERVED THAT AFFIDAVIT WERE FILED IN CASE OF MS SONA VERMA, MS NIDHI VERMA ,MS VIDHI VERMA ,GAUT AM VERMA , ANKIT VERMA AND VIJAY SEMRE. ON PERUSAL OF THE DOCU MENTS AS FILED BY THE APPELLANT COMPANY AND OBSERVATION OF THE ASS ESSING OFFICER, IT IS CLEAR THAT MOST OF THE SHARE APPLICANTS PERSONAL LY APPEARED BEFORE THE ASSESSING OFFICER AND THEIR STATEMENT WERE ALSO RECORDED WHEREIN THEY HAVE CLEARLY ACCEPTED ABOUT THE INVESTMENT MAD E IN THE SHARE CAPITAL OF THE APPELLANT COMPANY. THE APPEAL RELATE S TO THE ASST YEAR 2012-13 I.E. PRIOR TO THE INSERTION OF THE EXPLANAT ION TO SECTION 68 OF THE ACT. IN CASES OF SHARE APPLICATION / SHARE CAPI TAL PRIOR TO THE INSERTION OF THE EXPLANATION THE APPELLANT COMPANY NEEDS TO PROVE IDENTITY OF THE SHARE APPLICANT ONLY. HOWEVER, IN T HE PRESENT CASE IN HAND THE APPELLANT HAS NOT ONLY PROVED THE IDENTITY OF THE SHARE APPLICANTS BUT ALSO PROVED THE CREDITWORTHINESS OF THE SHARE APPLICANT AND GENUINENESS OF THE TRANSACTIONS. HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PEOPLE GENERAL HOSPITAL L IMITED [ APPEAL NO ITA NO 89/ 2011] HAS HELD THAT THE ASSESSEE HAS TO PROVE ONLY IDENTITY OF THE INVESTOR WHICH IN THE CASE IN HAND IS PROVED BEYOND M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 12 DOUBT. AS REGARD THE OBSERVATION OF THE ASSESSING OFFICER IN RESPECT OF FEW OF THE SHARE APPLICANTS, THE APPELLANT COMPANY VIDE ITS SUBMISSION IN PARAS 1.13.1 TO 1.13.6 HAS DEALT THE SAME IN GREAT DETAILS, AND THE SAME IS AGAIN REPRODUCED FOR SAKE OF CLARITY:- 1.13.1] THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ON INNER PAGE NO 8 AND 9 HAS DISCUSSED ABOUT THE SHARE APPLICATIO N MONEY OF RS 20,50,000/- AS RECEIVED FROM SHARE APPLICANT SHRI S ANJAY SHARMA. THE ASSESSING OFFICER OBSERVED THAT THE AMOUNT AS I NVESTED BY SHRI SANJAY SHARMA WAS NOT REFLECTED IN HIS BANK ACCOUNT AS FILED DURING THE COURSE OF ASSESSMENT PROCEEDING. IN THIS RESPEC T, WE WOULD LIKE TO CLARIFY AS UNDER:- [A] SHARE APPLICATION FORM DULY SIGNED BY SHRI SAN JAY SHARMA WAS FILED [B] THE AMOUNT OF SHARE APPLICATION MONEY WAS RECEI VED THROUGH AN ACCOUNT PAYEE CHEQUES. [C] COPY OF HIS PAN CARD IS ALSO FILED. HE IS REGUL ARLY ASSESSED TO TAX VIDE PA NO, THE SAME IS AS UNDER:- CKPPS0242H [D] COPY OF HIS BANK ACCOUNT WITH ALLAHABAD BANK, C ASH CREDIT ACCOUNT NO 2177088462 SINCE, THE CHEQUE WAS ISSUED BY SHRI SANJAY SHARMA FROM HIS SAVING ACCOUNT FOR THIS REASON, THE SAME WAS NOT REFLECTED IN HIS CASH CREDIT LOAN ACCOUNT. THE AMOUNT OF CHEQUE AS ISSUED TO THE ASSESSEE COMPANY DULY FOUND REFLECTED IN THE SAVING BANK ACC OUNT OF THAT SHARE APPLICANT AND HE HAS ALSO ACCEPTED IN HIS STA TEMENT ABOUT THE INVESTMENT IN SHARE APPLICATION/SHARE CAPITAL OF TH E ASSESSEE COMPANY. THUS, THE AMOUNT OF SHARE APPLICATION REQU IRES TO BE ACCEPTED AS GENUINE. M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 13 1.13.2] THE ASSESSING OFFICER IN PARA 2.12 AND IN 2 .13 ON INNER PAGE NO 10 OF THE ASSESSMENT ORDER HAS OBSERVED THAT SMT . KAMLA BAI HAD DEPOSITED CASH OF RS 3,00,000/- IN HER BANK ACCOUNT AND TRANSFERRED THE SAME TO THE BANK ACCOUNT OF SHRI AMIT SONI EX- DIRECTOR OF THE ASSESSEE COMPANY AND THEN RECEIVED AN AMOUNT OF RS 8,00,000/- BY WAY OF TRANSFER FROM THE REFERENCE NO 1011- 2723 AN D THEN INVESTED THE SAME IN THE SHARES OF THE ASSESSEE COMPANY. THE ASSESSING OFFICER HAS DOUBT ABOUT THE REFERENCE NO 1011-2723 AND ALSO THE AMOUNT AS INVESTED BY THE SHARE APPLICANT. IN THIS RESPECT, W E WOULD LIKE TO CLARIFY AS UNDER:- [A] SHARE APPLICATION FORM DULY SIGNED BY THE APPL ICANT HAS BEEN FILED. [B] COPY OF PAN CARD HAS ALSO BEEN FILED [C] COPY OF HER INCOME TAX RETURN HAS ALSO BEEN FIL ED WHEREIN TOTAL INCOME WAS DECLARED BY HER OF RS 451930/- AND PAID LEGITIMATE AMOUNT OF TAX OF RS 21340/-. [D] COPY OF HER BANK ACCOUNT WITH BANK OF INDIA A/C NO 880010110006560 [E] THE CASH AS DEPOSITED BY HER IN HER BANK ACCOUN T PRIOR TO ISSUANCE OF THE CHEQUE TO SHRI AMIT SONI IS OUT OF HER INCOM E AND SAVING. [F] THE AMOUNT AS INVESTED BY HER IN THE SHARE APPL ICATION MONEY OF THE ASSESSEE COMPANY WAS RECEIVED BY HER FROM SHRI AMIT SONI AND IN TURN SHRI AMIT SONIT RECEIVED AMOUNT FROM SHRI S URENDRA SONI, AU COMMODITIES P LIMITED AND M/S SANVERWALA JEWELLERS P LIMITED. HENCE, SOURCE OF AMOUNT AS RECEIVED BY SMT KAMLA BA I AND SHRI AMIT SONI DULY EXPLAINED. M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 14 [G] COPY OF BANK ACCOUNT OF SHRI AMIT SONI, EX- DI RECTOR OF THE ASSESSEE COMPANY IS ENCLOSED FOR YOUR KIND REFERENC E. THE SOURCE OF CHEQUE AS RECEIVED BY SMT KAMLA BAI W AS DULY EXPLAINED AS RECEIVED FROM SHRI AMIT SONI AND SOURC E OF AMOUNT RECEIVED BY SHRI AMIT SONI WAS ALSO EXPLAINED. HENC E, THERE WAS NO JUSTIFICATION FOR HAVING ANY DOUBT ABOUT THE SOURCE OF AMOUNT AS FOUND CREDITED IN THE BANK ACCOUNT OF THE SHARE APP LICANT AND THEREFORE THE AMOUNT OF SHARE APPLICATION MONEY AS RECEIVED FROM SMT KAMLA BAI STAND EXPLAINED. 1.13.3] THE ASSESSING OFFICER FURTHER OBSERVED IN P ARA 2.14 ON INNER PAGE NO 11 OF THE ASSESSMENT ORDER THAT AN AMOUNT O F RS 800000/- WAS CREDITED THROUGH TRANSFER IN THE BANK ACCOUNT O F SUMAN VERMA VIDE REFERENCE NO 1011-2723.THE ASSESSING OFFICER H AS SERIOUS DOUBT ABOUT THE TRANSFER OF AMOUNT THROUGH REFERENCE NO 1 011-2723. IN THIS RESPECT WE WOULD LIKE TO CLARIFY AS UNDER:- [A] SHARE APPLICATION FORM DULY SIGNED BY THE APPL ICANT HAS BEEN FILED. [B] COPY OF PAN CARD HAS ALSO BEEN FILED [C] COPY OF HER INCOME TAX RETURN HAS ALSO BEEN FIL ED WHEREIN TOTAL INCOME WAS DECLARED BY HER OF RS 397580/- AND PAID LEGITIMATE AMOUNT OF TAX OF RS 21970/-. [D] COPY OF HER BANK ACCOUNT WITH BANK OF INDIA A/C NO 880010110006562 [E] THE AMOUNT AS INVESTED BY HER IN THE SHARE APPL ICATION MONEY OF THE ASSESSEE COMPANY WAS OUT OF THE AMOUNT AS RECEI VED BY HER FROM SHRI AMIT SONI. M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 15 [F] THAT ON PERUSAL OF THE BANK ACCOUNT OF SHRI AM IT SONI IT IS EVIDENT THAT HE HAS RECEIVED AMOUNT FROM SHRI SURENDRA SONI , AU COMMODITIES P LIMITED AND M/S SANVERWALA JEWELLERS P LIMITED PRIOR TO ISSUANCE OF THE CHEQUES TO SMT SUMAN VERMA. HENC E, SOURCE OF AMOUNT AS RECEIVED BY SMT SUMAN VERMA AND IN THE BA NK ACCOUNT OF SHRI AMIT SONI ARE DULY EXPLAINED. [G] COPY OF BANK ACCOUNT OF SHRI AMIT SONI, EX- DI RECTOR OF THE ASSESSEE COMPANY IS ENCLOSED FOR YOUR KIND REFERENC E. THE SOURCE OF CHEQUE AS RECEIVED BY SMT SUMAN VERMA WAS DULY EXPLAINED AS RECEIVED FROM SHRI AMIT SONI AND SOURC E OF AMOUNT RECEIVED BY SHRI AMIT SONI WAS ALSO EXPLAINED. HENC E, THERE WAS NO JUSTIFICATION FOR HAVING ANY DOUBT ABOUT THE SOURCE OF AMOUNT AS FOUND CREDITED IN THE BANK ACCOUNT OF THE SHARE APP LICANT AND THEREFORE THE AMOUNT OF SHARE APPLICATION MONEY AS RECEIVED FROM SMT SUMAN VERMA STAND EXPLAINED. 1.13.4] THE ASSESSING OFFICER FURTHER OBSERVED IN P ARA 2.15 ON INNER PAGE NO 11 OF THE ASSESSMENT ORDER THAT AN AMOUNT O F RS 800000/- AND RS 400000/- WAS FOUND CREDITED THROUGH TRANSFER IN THE BANK ACCOUNT OF SHRI VED PRAKASH VERMA AND SHRI SHUBHAM VERMA RESPECTIVELY VIDE REFERENCE NO 1011-2723.THE ASSESS ING OFFICER HAS SERIOUS DOUBT ABOUT THE TRANSFER OF AMOUNT THROUGH REFERENCE NO 1011-2723. IN THIS RESPECT WE WOULD LIKE TO CLARIFY AS UNDER:- [A] SHARE APPLICATION FORM DULY SIGNED BY THE APPL ICANT HAS BEEN FILED. [B] COPY OF PAN CARD HAS ALSO BEEN FILED [C] COPY OF HER INCOME TAX RETURN HAS ALSO BEEN FIL ED BY SHRI VED PRAKASH VERMA AND SHRI SHUBHAM VERMA DECLARING TOTA L INCOME AT M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 16 RS 379608/- AND RS 378953/- RESPECTIVELY AND PAID L EGITIMATE AMOUNT OF TAX DUE ON THEIR INCOME. [D] COPY OF BANK ACCOUNT OF SHRI VZED PRAKASH VERMA WITH BANK OF INDIA A/C NO 880010110006561 AND COPY OF BANK ACCO UNT OF SHRI SHUBHAM VERMA WITH BANK OF INDIA A/C NO 88001011000 6564 HAS ALSO BEEN FILED DURING THE COURSE OF ASSESSMENT AND ENCLOSED WITH THIS SUBMISSION. [E] THE AMOUNT AS FOUND CREDITED VIDE REFERENE NO 1 011-2723 IS THE BANK ACCOUNT OF SHRI AMIT SONI EX- DIRECTOR OF THE ASSESSEE COMPANY AND THEREFORE THE SOURCE OF AMOUNT AS INVES TED BY THEM ARE DULY EXPLAINED. [F] THAT ON PERUSAL OF THE BANK ACCOUNT OF SHRI AMI T SONI IT IS EVIDENT THAT HE HAS RECEIVED AMOUNT FROM SHRI SURENDRA SONI , AU COMMODITIES P LIMITED AND M/S SANVERWALA JEWELLERS P LIMITED PRIOR TO ISSUANCE OF THE CHEQUES TO SHRI VED PRAKASH VERM A AND SHRI SHUBHAM VERMA. HENCE, SOURCE OF AMOUNT AS RECEIVED BY SHRI VED PRAKASH VERMA AND SHRI SHUBHAM VERMA FROM THE BANK ACCOUNT OF SHRI AMIT SONI ARE DULY EXPLAINED. [G] COPY OF BANK ACCOUNT OF SHRI AMIT SONI, EX- DI RECTOR OF THE ASSESSEE COMPANY IS ENCLOSED FOR YOUR KIND REFERENC E. THE SOURCE OF CHEQUE AS RECEIVED BY SHRI VED PRKASH VERMA AND SHRI SHUBHAM VERMA ARE DULY EXPLAINED AS RECEIVED FROM S HRI AMIT SONI AND SOURCE OF AMOUNT RECEIVED BY SHRI AMIT SONI WAS ALSO EXPLAINED. HENCE, THERE WAS NO JUSTIFICATION FOR HAVING ANY DO UBT ABOUT THE SOURCE OF AMOUNT AS FOUND CREDITED IN THE BANK ACCO UNT OF THE SHARE APPLICANT AND THEREFORE THE AMOUNT OF SHARE APPLICA TION MONEY AS RECEIVED FROM SHRI VED PRAKASH VERMA AND SHRI SHUBH AM VERMA. M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 17 1.13.5] THE ASSESSING OFFICER IN PARA 2.16 OF THE A SSESSMENT ORDER ON INNER PAGE NO 12 HAS REFERRED THE AFFIDAVIT AS FILE D BY SHRI AMIT SONI IN RESPECT OF SHARE APPLICATION MONEY AS RECEIVED F ROM SONA VERMA, NIDHI VERMA AND VIDHI VERMA. IN THIS RESPECT WE WOU LD LIKE TO CLARIFY AS UNDER:- [A] DETAIL OF SHARE APPLICATION MONEY AS RECEIVED B Y THE ASSESSEE FROM THE ABOVE SHARE APPLICANT IS AS UNDER:- S.NO NAME OF SHARE APPLICANT AMOUNT [RS] INCOME REMARKS 1 SONA VERMA 1100000 333770 RS 800000/- INVESTED OUT OF TRANSFER FROM AMIT SONI BANK ACCOUNT AND BALANCE OUT OF HER SAVING 2 NIDHI VERMA 600000 380430 RS 500000/- INVESTED OUT OF TRANSFER FROM AMIT SONI BANK ACCOUNT AND BALANCE OUT OF HER SAVING 3 VIDHI VERMA 800000 376430 RS 500000/- INVESTED OUT OF TRANSFER FROM AMIT SONI BANK ACCOUNT AND BALANCE OUT OF HER SAVING [B] SHARE APPLICATION FORM DULY SIGNED BY THE APPL ICANT HAS BEEN FILED. [C] COPY OF PAN CARD HAS ALSO BEEN FILED [D] COPY OF THEIR INCOME TAX RETURN [E] COPY OF THEIR BANK ACCOUNT WITH BANK OF INDIA. [F] THE MAJOR AMOUNT WAS RECEIVED PRIOR TO THE ISSU ANCE OF THE CHEQUES FROM SHRI AMIT SONI [G] THAT ON PERUSAL OF THE BANK ACCOUNT OF SHRI AM IT SONI IT IS EVIDENT THAT HE HAS RECEIVED AMOUNT FROM SHRI SURE NDRA SONI, AU M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 18 COMMODITIES P LIMITED AND M/S SANVERWALA JEWELLERS P LIMITED PRIOR TO ISSUANCE OF THE CHEQUES TO SONA VERMA, NI DHI VERMA AND VIDHI VERMA. HENCE, SOURCE OF AMOUNT AS RECEIVED F ROM THE BANK ACCOUNT OF SHRI AMIT SONI ARE DULY EXPLAINED. [H] COPY OF BANK ACCOUNT OF SHRI AMIT SONI, EX- DI RECTOR OF THE ASSESSEE COMPANY IS ENCLOSED FOR YOUR KIND REFERENC E. THE SOURCE OF AMOUNT TRANSFER IN THE BANK ACCOUNT O F SONA VERMA, NIDHI VERMA AND VIDHI VERMA ARE DULY EXPLAINED AS R ECEIVED FROM SHRI AMIT SONI AND SOURCE OF AMOUNT RECEIVED BY SHR I AMIT SONI WAS ALSO EXPLAINED. HENCE, THERE WAS NO JUSTIFICATION F OR HAVING ANY DOUBT ABOUT THE SOURCE OF AMOUNT AS FOUND CREDITED IN THE BANK ACCOUNT OF THE SHARE APPLICANT AND THEREFORE THE AMOUNT OF SHA RE APPLICATION MONEY AS RECEIVED FROM SONA VERMA, NIDHI VERMA AND VIDHI VERMA. 1.13.6] THE ASSESSING OFFICER IN PARA 2.18 OF THE A SSESSMENT ORDER ON INNER PAGE NO 12 HAS DISCUSSED ABOUT THE SHARE APPL ICANT SHRI GAUTAM VERMA, SHRI ANKIT VERMA AND SHRI VIJAY SEMRE . THE ASSESSING OFFICER HIMSELF ACCEPTED THAT THEY HAVE A CCEPTED ABOUT THE INVESTMENT MADE BY THEM. THE ASSESSING OFFICER HAS DOUBTED THE CAPACITY OF THESE SHARE HOLDERS. IN THIS RESPECT WE WOULD LIKE TO CLARIFY AS UNDER:- [A] DETAIL OF SHARE APPLICATION MONEY AS RECEIVED B Y THE ASSESSEE FROM THE ABOVE SHARE APPLICANT IS AS UNDER:- S.NO NAME OF SHARE APPLICANT AMOUNT [RS] INCOME REMARKS 1 GAUTAM VERMA 200000 OUT OF INCOME AND SAVING 2 ANKIT VERMA 800000 380710 RS 500000/- INVESTED OUT OF TRANSFER FROM AMIT M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 19 SONI BANK ACCOUNT AND BALANCE OUT OF HIS SAVING 3 VIJAY SEMRE 200000 268890 OUT OF HIS INCOME AND SAVING [B] SHARE APPLICATION FORM DULY SIGNED BY THE APPL ICANT HAS BEEN FILED. [C] COPY OF PAN CARD HAS ALSO BEEN FILED [D] COPY OF THEIR INCOME TAX RETURN [E] COPY OF THEIR BANK ACCOUNT WITH BANK OF INDIA. [F] THE MAJOR AMOUNT WAS RECEIVED PRIOR TO THE ISSU ANCE OF THE CHEQUES FROM SHRI AMIT SONI [G] THAT ON PERUSAL OF THE BANK ACCOUNT OF SHRI AM IT SONI IT IS EVIDENT THAT HE HAS RECEIVED AMOUNT FROM SHRI SUREN DRA SONI, AU COMMODITIES P LIMITED AND M/S SANVERWALA JEWELLERS P LIMITED PRIOR TO ISSUANCE OF THE CHEQUES TO ANKIT VERMA. HENCE, S OURCE OF AMOUNT AS RECEIVED FROM THE BANK ACCOUNT OF SHRI AMIT SONI ARE DULY EXPLAINED. [H] COPY OF BANK ACCOUNT OF SHRI AMIT SONI, EX- DI RECTOR OF THE ASSESSEE COMPANY IS ENCLOSED FOR YOUR KIND REFERENC E. THE SOURCE OF AMOUNT TRANSFER IN THE BANK ACCOUNT O F ANKIT VERMA IS DULY EXPLAINED AS RECEIVED FROM SHRI AMIT SONI AND SOURCE OF AMOUNT RECEIVED BY SHRI AMIT SONI WAS ALSO EXPLAINED. HENC E, THERE WAS NO JUSTIFICATION FOR HAVING ANY DOUBT ABOUT THE SOURCE OF AMOUNT AS FOUND CREDITED IN THE BANK ACCOUNT OF THE SHARE APP LICANT AND THEREFORE THE AMOUNT OF SHARE APPLICATION MONEY AS RECEIVED FROM ANKIT VERMA AND AS REGARD GAUTAM VERMA AND VIJAY SE MRE IS CONCERNED. THEY HAVE EXPLAINED THE SOURCE OF AMOUNT INVESTED BY M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 20 THEM IN THE SHARE APPLICATION MONEY OUT OF THEIR IN COME AND SAVING. HENCE, THE AMOUNT AS RECEIVED BY THE ASSESSEE BE TR EATED AS EXPLAINED. 4.1.2] THE DOCUMENTS AND EXPLANATION AS FILED / PRO VIDED BY THE APPELLANT COMPANY WAS FORWARDED TO THE ASSESSING OF FICER BUT IN THE REMAND REPORT NOTHING ADVERSE WAS SUBMITTED BY THE ASSESSING OFFICER. FROM THE DOCUMENTS AND EXPLANATION AS FILE D/ PROVIDED BY THE APPELLANT, IDENTITY AND SOURCE OF SHARE APPLICA TION WAS DULY EXPLAINED BY IT IN RESPECT OF ALL THE THIRTY ONE SH ARE APPLICANTS. COPY OF STATEMENT AS RECORDED, AFFIDAVIT, SHARE APPLICAT ION FORMS, BANK STATEMENT ETC. WERE FILED WHICH WAS ALSO ACCEPTED B Y THE ASSESSING OFFICER BUT HE SIMPLY REJECTED THE SAME AND ADDITIO N WAS MADE WHICH WAS NOT CONSIDERED PROPER. THE APPELLANT PROPERLY D ISCHARGED THE ONUS LYING ON IT. IDENTITY OF THE SHARE APPLICANTS WERE PROVED BEYOND DOUBT AS THEY HAD PERSONALLY APPEARED BEFORE THE AS SESSING OFFICER AND ACCEPTED THE AMOUNT AS INVESTED IN SHARE CAPITA L. IN CASE OF AFFIDAVIT, THE ASSESSING OFFICER HAS NOT CONTRAVERT THE SAME, WHERE THE SOURCE OF SHARE APPLICATION WAS DULY EXPLAINED AND INCOME TAX RETURN AS FILED WAS ALSO PROVIDED. I AM THEREFORE OF THE V IEW THAT THE APPELLANT COMPANY HAS PROPERLY DISCHARGED ONUS IN R ESPECT OF SHARE APPLICATION MONEY OF RS 2,87,00,000/- AS RECEIVED F ROM THE ABOVE THIRTY ONE SHARE APPLICANT. THE DECISION AS RELIED BY THE APPELLANT ARE ALSO SQUARELY APPLICABLE IN THE CASE OF THE APPELLA NT. THE DECISION OF THE HONBLE APEX COURT IN LOVELY EXPORTS (P) LTD.(S UPRA), HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PEOPLE GEN ERAL HOSPITAL LIMITED (SUPRA) AND HONBLE JURISDICTIONAL BENCH OF ITAT IN THE CASE OF RAJSHREE FINSEC P. LTD. (SUPRA) DIRECTLY SUPPORT THE CASE OF THE APPELLANT COMPANY. I THEREFORE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS 2,87,00,000/- AS MADE IN RESPECT OF ABOVE THIRTY M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 21 ONE SHARE APPLICANTS. THE APPELLANT GET RELIEF ACCO RDINGLY IN SO FAR AS THESE THIRTY ONE SHARE APPLICANTS ARE CONCERNED. 4.1.3] THE APPELLANT COMPANY HAD RECEIVED SHARE CAP ITAL OF RS 18,00,000/- FROM TEN PERSONS. THE ASSESSING OFFICER IN PARA 2.4 TO 2.8 OF THE ASSESSMENT ORDER HAS DISCUSSED THAT STATEMEN T OF SHRI NAVIN RAGHUVANSHI , SHRI ANKUR SONI AND SHRI RUPESH DAVE RECORDED ON OATH AND THEY HAVE DENIED MAKING ANY INVESTMENT IN THE SHARE APPLICATION MONEY/SHARE CAPITAL OF THE ASSESSEE COM PANY BY THEM OR BY THEIR OTHER FAMILY MEMBERS, LIST OF SUCH PERSONS IS AS UNDER:- S. NO NAME OF THE SHARE HOLDERS AMOUNT [RS] 1 ANKUR SONI 2,00,000 2 NAVIN RAGHUVANSHI 1,00,000 3 GAJENDRA SINGH RAGHUVANSHI 1,00,000 4 SMT SHEETAL RAGHU VANSHI 2,00,000 5 ROOPESH DAVE 1,00,000 6 SHRI B S DAVE 2,00,000 7 SMT SHAKUNTALA DAVE 1,50,000 8 SMT SONAL DAVE 2,00,000 9 SMT PREMLATA DAVE 3,00,000 10 KAVITA JOSHI 2,50,000 18,00,000 THE APPELLANT HAS EXPLAINED THAT DUE TO SOME DISPUT E WITH THESE PERSONS THEY HAVE GIVEN NEGATIVE STATEMENT EVEN WHE N AMOUNT WAS INVESTED BY THEM IN THE SHARE CAPITAL OF THE APPEL LANT COMPANY. IT WAS ALSO ARGUED BY THE APPELLANT THAT ENTIRE AMOUNT OF SHARE CAPITAL FROM THE ABOVE PERSONS WERE RECEIVED PRIOR TO THE C OMMENCEMENT OF THE BUSINESS BY THE APPELLANT COMPANY AND THEREFORE THERE WAS NO JUSTIFICATION FOR MAKING ADDITION TO THE TOTAL INCO ME OF THE APPELLANT. THE APPELLANT DURING THE COURSE OF HEARING REFERRED THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF M/S FIV E VISION PROMOTERS P LIMITED [ APPEAL NO ITA 234/ 2015 DT 27 -11-2015] M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 22 ESPECIALLY PARA 36 OF THE DECISION. CONSIDERING THE OVERALL FACTS OF THE CASE AND SUBMISSION MADE BY THE APPELLANT COMPANY T HOUGH THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL WA S RECEIVED BY THE APPELLANT COMPANY PRIOR TO THE COMMENCEMENT OF THE BUSINESS BUT SHARE APPLICANTS PERSONALLY APPEARED AND ACCEPT ED THAT NEITHER THEY NOR THEIR RELATIVES LISTED ABOVE IN THE TABLE HAVE INVESTED IN THE SHARE APPLICATION MONEY OF THE APPELLANT COMPANY. H ENCE, THERE IS NO MERIT IN THE CONTENTION OF THE APPELLANT SUBMISSION . I THEREFORE CONFIRM THE ADDITION TO THE TUNE OF RS. 18,00,000/- . 4.1.4] THE APPELLANT IN THIS GROUND OF APPEAL GETS RELIEF TO THE TUNE OF RS.3,17,39,640/- AND ADDITION OF RS18,00,000/- IS H EREBY CONFIRMED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 5. FEELING DISSATISFACTION, THE REVENUE IS IN APPE AL BEFORE THIS TRIBUNAL. LD. DEPARTMENTAL REPRESENTATIVE(DR) VEHEM ENTLY ARGUED SUPPORTING THE ORDER OF THE ASSESSING OFFICER. 6. PER CONTRA LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE FINDING OF LD. CIT(A). REFERENCE WAS ALSO MADE TO T HE PAPER BOOK AND WRITTEN SUBMISSION/JUDICIAL PRONOUNCEMENTS CONTENDI NG THAT LD. CIT(A) HAVING APPRECIATED THE FACTS AND MATERIAL ON RECORD IN THE LIGHT OF THE RELEVANT JUDICIAL PRONOUNCEMENTS RIGHT LY DELETED THE ADDITION. LEARNED COUNSEL FOR THE ASSESSEE RELIED U PON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 23 HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT V S LOVELY EXPORTS (P.) LTD. AS REPORTED IN [2008] 216 CTR 195 (SC) THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE O F CIT, BHOPAL V. PEOPLES GENERAL HOSPITAL LTD. AS REPORTED IN [2013] 356 ITR 65 (MADHYA PRADESH) THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE O F CIT V. METACHEM INDUSTRIES AS REPORTED IN [2000] 24 5 ITR 160 (MADHYA PRADESH) THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PR. CI T- 1 V. AMI INDUSTRIES (INDIA)(P.) LTD. AS REPORTED IN [2020] 116 TAXMANN.COM 34 (BOMBAY) THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. VALUE CAPITAL SERVICES (P.) LTD. AS REPORTED IN [20 08] 307 ITR 334 (DELHI); THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT, CENTRAL CIRCLE, SALEM V. VICTORY SPINNING MILLS LTD . AS REPORTED IN [2014] 50 TAXMANN.COM 416 (MADRAS); THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V. FIRST POINT FINANCE LTD. AS REPORTED IN [2006] 286 ITR 477 (RAJASTHAN); THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V. DEEN DAYAL CHOUDHARY AS REPORTED IN [2017] 293 CTR 468 (RAJASTHAN). M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 24 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DECISIONS REFERRED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. WE FIND THAT THE ASSE SSEE COMPANY ISSUED 4,56,464 EQUITY SHARES DURING THE YEAR UNDER CONSIDERATION. A SUMMARY SHOWING INCREASE THE IN THE AMOUNT OF SHARE CAPITAL AND SECURITIES PREMIUM OF THE ASSESSEE COMPANY DURING T HE YEAR UNDER CONSIDERATION IS AS UNDER: S. NO P ARTICULARS AMOUNT AS ON 31 ST MARCH, 2012 [IN RS.] AMOUNT AS ON 31 ST MARCH, 2011 [IN RS.] AMOUNT OF INCREASE [IN RS.] 1 SHARE CAPITAL 62,89,640 17,25,000 45,64,640 2 SECURITIES PREMIUM 2,89,75,000 NIL 2,89,75,000 TOTAL 3,35,39,640 DETAILS OF SHARE APPLICANTS AND SHARE APPLICATION M ONEY OF RS. 3,35,39,640/- AS RECEIVED BY THE ASSESSEE COMPANY D URING THE YEAR UNDER CONSIDERATION IS AS UNDER: S. NO NAME OF THE SHARE APPLICANTS PAN NO. OF SHARES AMOUNT [IN RS.] 1 SURENDRA KUMAR SONI APVPS6832A 3,03,9 64 30,39,640 2 ANAR SINGH PARIHAR N.A. 4,750 9,50,000 3 ANKIT VERMA AHLPV9818R 4,000 8,00,000 M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 25 4 ANOOP SINGH RAJPUT N.A. 4,750 9,50,000 5 ASHISH KUMAR SONI DDKPS8760M 7,000 14,00,000 6 HARISH CHANDRA MANDLOI N.A. 5,000 10,00,000 7 HUKUM SINGH FPNPS39 66C 5,000 10,00,000 8 KAMLA BAI VERMA AOKPV5411J 4,500 9,00,000 9 KAUSHALYA BAI N.A. 2,500 5,00,000 10 KUSUM VERMA AOLPV1256L 4,000 8,00,000 11 MANOJ PATEL CBWPM2597R 7,000 14,00,000 12 MESAR SINGH MOURYA N.A. 5,750 11,50,000 13 MOHAN MANDLOI BGBPM47 65J 4,750 9,50,000 14 NIDHI VERMA ANPPV4738E 3,000 6,00,000 15 NIHAL SINGH MOURYA N.A. 9,750 19,50,000 16 RAMESH CHAND CHOUHAN ANNPC4310R 5,000 10,00,000 17 SHANKAR LAL BAGANNA N.A. 2,500 5,00,000 18 SHUBHAM VERMA AOKPV5410K 2,000 4,00,000 19 SHYAM SINGH MOURYA N.A. 9,750 19,50,000 20 SODAN SINGH N.A. 5,000 10,00,000 21 SONA VERMA AOLPV1274N 5,500 11,00,000 22 SUMAN VERMA AOKPV5412M 4,000 8,00,000 23 VED PRAKASH VERMA ADFPV5995H 5,500 11,00,000 24 VIDHI VERMA AMYPV5139K 4,000 8,00,000 25 SANJAY SHARMA CKPPS0242H 10,250 20,50,000 26 CHANDRA SEMRE DUEPS1510Q 1,500 3,00,000 27 GAUTAM VERMA ALLPV7829C 1,000 2,00,000 M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 26 28 RAMESH SEMRE DUEPS1511R 1,500 3,00,000 29 VIJAY SEMRE AYPPS8021E 1,000 2,00,000 30 MUKESH MOURYA N.A. 4,750 9,50,000 31 RAJESH SONI BOGPS9852H 4,000 8,00,000 32 KHUSHBOO SONI DEVPS7925N 4,500 9,00,000 33 ANKUR SONI CSYPS3860A 1,000 2,00,000 34 NAVIN RAGHUVANSHI AKNPR8248Q 500 1,00,000 35 GAJENDRA SINGH RAGHUVANSHI ACCPR1018F 500 1,00,000 36 SHEETAL RAGHUVANSHI AQHPR2594K 1, 000 2,00,000 37 ROOPESH DAVE AHKPD39834 500 1,00,000 38 BHAVANI SHANKAR DAVE ADQPD7121E 1,000 2,00,000 39 SHAKUNTALA DAVE BFZPD0037B 750 1,50,000 40 SONAL DAVE BAFPD4474D 1,000 2,00,000 41 PREMLATA DAVE N.A. 1,500 3,00,000 42 KAVITA JOSHI ASIPJ046 6R 1,250 2,50,000 TOTAL 4,56,464 3,35,39,640 FROM ABOVE, IT IS CLEAR THAT THE ASSESSING OFFICER MADE ADDITION OF ENTIRE AMOUNT OF RS. 3,35,39,640/- TO THE TOTAL INC OME OF THE ASSESSEE CO. ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED DURING THE YEAR UNDER CONSIDERATION. WE FIND THAT THE LD. CIT(A) DELETED THE ADDITION OF RS. 3,17,39,640/- IN RESPECT OF SHA RE APPLICANTS/SHARE APPLICATION MONEY AS SHOWN ON SL. NO.1 TO 32 M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 27 AND SUSTAINED THE REMAINING ADDITION OF RS. 18,00,0 00/- IN RESPECT OF SHARE APPLICANTS/SHARE APPLICATION MONEY AS SHOW N ON SL. NO.33 TO 42. HENCE, THE GRIEVANCE OF THE REVENUE RE LATES TO THE AMOUNT OF ADDITION TO THE TUNE OF RS. 3,17,39,640/- WHICH WAS DELETED BY THE LD. CIT(A) AS REPRODUCED ABOVE. WE F IND FROM THE MATERIAL AVAILABLE ON RECORD THAT THE ASSESSEE COMP ANY WAS INCORPORATED ON 23-09-2009. HOWEVER, NO BUSINESS WA S CARRIED ON BY THE ASSESSEE COMPANY TILL 09-10-2011. IT WAS ONL Y FROM 10-10- 2011 THAT ENTIRE BUSINESS CARRIED ON BY SHRI SUREND RA KUMAR SONI IN HIS PROPRIETORSHIP CONCERN M/S SANVERWALA, WAS S UCCEEDED BY THE ASSESSEE COMPANY W.E.F. 10-10-2011. THE BALANCE OF CAPITAL OF SHRI SURENDRA KUMAR SONI IN HIS PROPRIETORSHIP CONC ERN, M/S SANVERWALA AS ON 09-10-2011 WAS OF RS. 30,39,644/-. A MEMORANDUM OF UNDERSTANDING WAS ENTERED INTO BETWEE N SHRI SURENDRA KUMAR SONI AND THE ASSESSEE COMPANY WHEREI N IT WAS AGREED THAT THE ASSESSEE COMPANY WOULD ISSUE SHARES AT FACE VALUE OF RS. 10/- EACH TO THE EXTENT OF CAPITAL OF SHRI S URENDRA KUMAR SONI AS ON THE DATE OF TRANSFER OF THE BUSINESS. AS A CONSEQUENCE THERETO, TOTAL 3,03,964 EQUITY SHARES OF RS. 10/- E ACH WERE ISSUED M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 28 BY THE ASSESSEE COMPANY TO SHRI SURENDRA KUMAR SONI AT PAR IN LIEU OF BALANCE OF CAPITAL OF RS. 30,39,644/- OUTST ANDING AS ON THE DATE OF TRANSFER. WE FIND THAT THERE WAS NO INFLOW OF FUNDS IN RESPECT OF 3,03,964 EQUITY SHARES ISSUED BY THE ASS ESSEE COMPANY TO SHRI SURENDRA KUMAR SONI AS THESE SHARES WERE IS SUED IN LIEU OF TRANSFER OF BUSINESS. FURTHER, THE ASSESSING OFFICE R HIMSELF DID NOT GIVE ANY ADVERSE FINDING IN RESPECT OF THESE 3,03,9 64 EQUITY SHARES ISSUED TO SHRI SURENDRA KUMAR SONI. WE ALSO FIND TH AT THE SCRUTINY ASSESSMENT IN THE CASE OF SHRI SURENDRA KUMAR SONI FOR THE ASSESSMENT YEAR 2012-13 WAS COMPLETED BY THE SAME A SSESSING OFFICER WHEREIN ALSO THE ASSESSING OFFICER DID NOT MAKE ANY ADDITION TO THE TOTAL INCOME OF SHRI SURENDRA KUMAR SONI ON ACCOUNT OF INVESTMENT MADE IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY. THUS, WE DO NOT FIND ANY REASON FOR MAKING ADDITION OF RS. 30,39,640/- TO THE TOTAL INCOME OF THE ASSESSEE COMPANY IN RESPECT OF SHARES ISSUED TO SHRI SURENDRA KUMAR SON I. THEREFORE, THE FINDINGS OF LD. CIT(A) ON THIS POINT ARE CONFIR MED. M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 29 8. THE REMAINING SHARE APPLICATION MONEY OF RS. 2,8 7,00,000/- WAS RECEIVED FROM 31 INDIVIDUAL SHARE APPLICANTS AS PER LIST ABOVE. WE FIND THAT THE ASSESSEE CO. FILED AMPLE DOCUMENTA RY EVIDENCES SO AS TO JUSTIFY THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS AS E NTERED INTO THEM. A LIST OF DOCUMENTS WHICH WERE FILED BY THE A SSESSEE COMPANY BEFORE THE ASSESSING OFFICER IN RESPECT OF THESE SHARE APPLICANTS IS REPRODUCED HEREUNDER FOR READY REFERE NCE: S. NO DESCRIPTION OF DOCUMENTS PAGE NO. OF COMPILATION 1 SHRI ANAR SINGH PARIHAR RS. 9,50,000/- 1.1 SHARE APPLICATION FORM DULY SIGNED 76 -77 1.2 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT INV ESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 78 -79 1.3 DRIVING LICENSE 80 1.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 8183 2 SHRI ANKIT VERMA [PAN: AHLPV9818R] - RS. 8,00,000 /- 2.1 SHARE APPLICATION FORM DULY SIGNED 84-85 2.2 PAN CARD 86 2.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN FOR THE ASS ESSMENT YEAR 2012-13 87 2.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT INV ESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 88-89 2.5 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 90-93 M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 30 3 SHRI ANOOP SINGH RAJPUT RS. 9,50,000/- 3.1 SHARE APPLICATION FORM DULY SIGNED 94-95 3.2 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT INV ESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 96-101 3.3 AADHAR CARD 102 3.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 103-105 4 SHRI ASHISH KUMAR SONI [PAN: DDKPS8760M] RS. 14,00,000/- 4.1 SHARE APPLICATION FORM DULY SIGNED 106-107 4.2 PAN CARD 108 4.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 109-111 4.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 112-114 5 SHRI HARISH CHANDRA MANDLOI - RS. 10,00,000/- 5.1 SHARE APPLICATION FORM DULY SIGNED 115-116 5.2 VOTER CARD 117 5.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT INV ESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 118-126 5.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 127-128 5.5 DRIVING LICENSE 129 6 SHRI HUKUM SINGH [PAN: FPNPS3966C] RS. 10,00,00 0/- 6.1 SHARE APPLICATION FORM DULY SIGNED 130-131 6.2 PAN CARD 132 6.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT INV ESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 133-134 6.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 135-136 6.5 AADHAR CARD 137 7 SMT. KAMLA BAI VERMA [PAN: AOKPV5411J] RS. M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 31 9,00,000/- 7.1 SHARE APPLICATION FORM DULY SIGNED 138-139 7.2 PAN CARD 140 7.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 141-143 7.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT INV ESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 144-145 8 SMT. KAUSHALYA BAI RS. 5,00,000/- 8.1 SHARE APPLICATION FORM DULY SIGNED 146-147 8.2 AADHAR CARD 148 8.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT INV ESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 149-151 8.4 STATEMENT OF HER SPOUSE, SHRI BABULAL AS RECORD ED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 152-153 8.5 DRIVING LICENSE OF HER SPOUSE, SHRI BABULAL 154 9 SMT. KUSUM VERMA [PAN: AOLPV1256L] RS. 8,00,000 /- 9.1 SHARE APPLICATION FORM DULY SIGNED 155-156 9.2 PAN CARD 157 9.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 158-160 9.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT INV ESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 161 10 SHRI MANOJ PATEL [PAN: CBWPM2597R] RS. 14,00,0 00/- 10.1 SHARE APPLICATION FORM DULY SIGNED 162-163 10.2 VOTER ID 164-165 10.3 PAN CARD 166 10.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 167-168 10.5 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 169-170 11 SHRI MESAR SINGH MOURYA RS. 11,50,000/- M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 32 11.1 SHARE APPLICATION FORM DULY SIGNED 171-172 11.2 VOTER ID 173 11.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 174-177 12 SHRI MOHAN MANDLOI [PAN: BGBPM4765J] RS. 9,50,000/- 12.1 SHARE APPLICATION FORM DULY SIGNED 178-179 12.2 PAN CARD 180 12.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 181-197 12.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 198-199 12.5 DRIVING LICENSE 200 13 SMT. NIDHI VERMA [PAN: ANPPV4738E] RS. 6,00,00 0/- 13.1 SHARE APPLICATION FORM DULY SIGNED 201-202 13.2 PAN CARD 203 13.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 204-206 13.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT INVESTE D IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 207-208 14 SHRI NIHAL SINGH MOURYA RS. 19,50,000/- 14.1 SHARE APPLICATION FORM DULY SIGNED 209-210 14.2 VOTER ID 211 14.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 212-215 14.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 216-218 15 SHRI RAMESH CHAND CHOUHAN, NAWADA [PAN: ANNPC4310R] RS. 10,00,000/- 15.1 SHARE APPLICATION FORM DULY SIGNED 219-220 15.2 VOTER ID 221 15.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE 222-230 M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 33 SHARE CAPITAL OF THE RESPONDENT ASSESSEE 15.4 PAN CARD 231 15.5 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 232-234 16 SHRI SHANKAR LAL BAGANNA RS. 5,00,000/- 16.1 SHARE APPLICATION FORM DULY SIGNED 235-236 16.2 VOTER ID 237 16.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 238-240 16.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 241-243 17 SHRI SHUBHAM VERMA [PAN: AOKPV5410K] RS. 4,00,000/- 17.1 SHARE APPLICATION FORM DULY SIGNED 244-245 17.2 PAN CARD 246 17.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 247-249 17.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 250-251 18 SHRI SHYAM SINGH MOURYA RS. 19,50,000/- 18.1 SHARE APPLICATION FORM DULY SIGNED 252-253 18.2 VOTER ID 254-255 18.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 256-261 19 SHRI SODAN SINGH RS. 10,00,000/- 19.1 SHARE APPLICATION FORM DULY SIGNED 262-263 19.2 VOTER ID 264 19.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 265-268 19.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 269-270 19.5 DRIVING LICENSE 271 M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 34 20 SMT. SONA VERMA [PAN: AOLPV1274N] RS. 11,00,00 0/- 20.1 SHARE APPLICATION FORM DULY SIGNED 272-273 20.2 PAN CARD 274 20.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 275-276 20.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 277-278 21 SMT. SUMAN VERMA [PAN: AOKPV5412M] RS. 8,00,00 0/- 21.1 SHARE APPLICATION FORM DULY SIGNED 279-280 21.2 PAN CARD 281 21.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 282-284 21.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 285-286 22 SHRI VED PRAKASH VERMA [PAN: ADFPV5995H] RS. 11,00,000/- 22.1 SHARE APPLICATION FORM DULY SIGNED 287-288 22.2 PAN CARD 289 22.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 290-292 22.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 293-294 23 SMT. VIDHI VERMA [PAN: AMYPV5139K] RS. 8,00,00 0/- 23.1 SHARE APPLICATION FORM DULY SIGNED 295-296 23.2 PAN CARD 297 23.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 298-300 23.4 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 301-302 24 SHRI SANJAY SHARMA [PAN: CKPPS0242H] RS. 20,50,000/- M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 35 24.1 SHARE APPLICATION FORM DULY SIGNED 303-304 24.2 PAN CARD 305 24.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 306-315 24.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 316-318 25 SMT. CHANDRA SEMRE [PAN: DUEPS1510Q] RS. 3,00,000/- 25.1 SHARE APPLICATION FORM DULY SIGNED 319-320 25.2 PAN CARD 321 25.3 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 322-324 26 SHRI GAUTAM VERMA [PAN: ALLPV7829C] RS. 2,00,0 00/- 26.1 SHARE APPLICATION FORM DULY SIGNED 325-326 26.2 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 327-328 26.3 PAN CARD 329 27 SHRI RAMESH SEMRE [PAN: DUEPS1511R] RS. 3,00,0 00/- 27.1 SHARE APPLICATION FORM DULY SIGNED 330-331 27.2 PAN CARD 332 28 SHRI VIJAY SEMRE [PAN: AYPPS8021E] RS. 2,00,00 0/- 28.1 SHARE APPLICATION FORM DULY SIGNED 333-334 28.2 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 335-337 28.3 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCO ME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 338-340 28.4 PAN CARD 341 29 SHRI MUKESH MOURYA RS. 9,50,000/- 29.1 SHARE APPLICATION FORM DULY SIGNED 342-343 29.2 VOTER ID 344 M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 36 29.3 BANK STATEMENT DULY HIGHLIGHTING THE AMOUNT IN VESTED IN THE SHARE CAPITAL OF THE RESPONDENT ASSESSEE 345-347 29.4 STATEMENT AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS 348-349 29.5 DRIVING LICENSE 350 30 RAJESH SONI [PAN: BOGPS9852H] RS. 8,00,000/- 30.1 ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2012- 13 452-454 30.2 PAN CARD 455 31 KHUSHBOO SONI [PAN: DEVPS7925N] RS. 9,00,000/- 31.1 STATEMENT OF HER SPOUSE, SHRI ASHISH KUMAR SON I AS RECORDED UNDER SECTION 131 OF THE INCOME TAX ACT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS WHEREIN HE ACCEPTE D ABOUT THE INVESTMENT MADE BY SMT. KHUSHBOO SONI 112-114 31.2 ACKNOWLEDGMENT OF INCOME-TAX RETURN FOR THE AS SESSMENT YEAR 2012-13 456 31.3 PAN CARD 457 9. IN ADDITION TO THE ABOVE, THE ASSESSEE COMPANY ALSO FILED RETURN OF ALLOTMENT OF SHARES IN FORM NO. 2 AS AVAI LABLE WITH THE REGISTRAR OF COMPANIES ALONG WITH ITS ANNEXURES BEF ORE THE ASSESSING OFFICER WHICH HAVE BEEN FILED BEFORE US A T PAGE NO. 365- 381 OF THE PAPER BOOK. THE PROVISION OF SECTION 68 OF THE INCOME- TAX ACT, 1961 WHICH WAS IN FORCE FOR THE PREVIOUS Y EAR RELEVANT TO PRESENT ASSESSMENT YEAR 2012-13 IS REPRODUCED HEREU NDER FOR READY REFERENCE: M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 37 CASH CREDITS. 68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR: 10. THE RELEVANT EXTRACT OF THE PROVISO TO SECTION 68 OF THE INCOME-TAX ACT, 1961 WHICH WAS INSERTED BY THE FINA NCE ACT, 2012 W.E.F. 1-4-2013 READS AS UNDER: PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY (NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED), AND THE SUM SO CREDITED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EXPLANATION OFFERED BY SUCH ASSESSEE-COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS (A) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUCH CREDIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALSO OFFERS AN EXPLANATION M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 38 ABOUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED; AND (B) SUCH EXPLANATION IN THE OPINION OF THE ASSESSING OFFICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY: FROM THE ABOVE, WE FIND THAT AN ASSESSEE WAS ONLY R EQUIRED TO ESTABLISH THE IDENTITY OF SHARE APPLICANTS PRIOR TO THE ASSESSMENT YEAR 2013-14. IT WAS ONLY AFTER THE INSERTION OF PR OVISO TO SECTION 68 OF THE ACT W.E.F. ASSESSMENT YEAR 2013-14 THAT T HE ASSESSEE WAS REQUIRED TO FURNISH AN EXPLANATION REGARDING NATURE AND SOURCE OF SUM INVESTED BY THE SHARE APPLICANT. HONBLE BOMBAY HIGH COURT IN ITS LANDMARK JUDGMENT IN THE CASE OF CIT-1 V. GA GANDEEP INFRASTRUCTURE (P.) LTD. AS REPORTED IN [2017] 394 ITR 680 (BOMBAY) HAS CATEGORICALLY HELD THAT PROVISO TO SECTION 68 I NTRODUCED BY FINANCE ACT 2012 WITH EFFECT FROM 1-4-2013, WOULD N OT HAVE RETROSPECTIVE EFFECT. WE FIND THAT THE HONBLE SUPR EME COURT OF INDIA IN THE CASE OF CIT VS LOVELY EXPORTS (P.) LTD . AS REPORTED IN [2008] 216 CTR 195 (SC) HAD CATEGORICALLY HELD AS U NDER: 2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDISCLOSED INCOME UNDER SECTION 68 OF IT ACT, 1961 ?. WE M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 39 FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FOR TH E SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEI VED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDER S, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMEN T IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSME NTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WI TH THE IMPUGNED JUDGMENT. 11. THE HONBLE MADHYA PRADESH HIGH COURT IN THE C ASE OF CIT, BHOPAL V. PEOPLES GENERAL HOSPITAL LTD. AS REP ORTED IN [2013] 356 ITR 65 (MADHYA PRADESH) HAS CATEGORICALLY HELD THAT: 16. THE AFORESAID JUDGMENT HAS BEEN FOLLOWED BY AL L THE COURTS AND THE JUDGMENTS RELIED ON BY THE APPELLANT S RELATES TO THE PERIOD PRIOR TO THE JUDGMENT IN LOVE LY EXPORTS (P.) LTD.'S CASE (SUPRA). AS THE APEX COURT HAS SPE CIFICALLY HELD THAT IF THE IDENTITY OF THE PERSON PROVIDING S HARE APPLICATION MONEY IS ESTABLISHED THEN THE BURDEN WA S NOT ON THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF TH E SAID PERSON. HOWEVER, THE DEPARTMENT CAN PROCEED AGAINST THE SAID COMPANY IN ACCORDANCE WITH LAW. THE POSITION O F THE PRESENT CASE IS IDENTICAL. IT IS NOT THE CASE OF AN Y OF THE PARTIES THAT M/S ALLIANCE INDUSTRIES LIMITED, SHARJ AH IS A BOGUS COMPANY OR A NON-EXISTENT COMPANY AND THE AMO UNT WHICH WAS SUBSCRIBED BY THE SAID COMPANY BY WAY OF SHARE SUBSCRIPTION WAS IN FACT THE MONEY OF THE RES PONDENT ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF INVESTOR WHO HAD PROVID ED THE M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 40 SHARE SUBSCRIPTION AND IT WAS ESTABLISHED THAT THE TRANSACTION WAS GENUINE THOUGH AS PER CONTENTION OF THE RESPONDENT THE CREDITWORTHINESS OF THE CREDITOR WAS ALSO ESTABLISHED. IN THE PRESENT CASE, IN THE LIGHT OF T HE JUDGMENT OF LOVELY EXPORTS (P.) LTD.'S (SUPRA) WE H AVE TO SEE ONLY IN RESPECT OF THE ESTABLISHMENT OF THE IDE NTITY OF THE INVESTOR. THE DELHI HIGH COURT ALSO IN DIVINE L EASING & FINANCE LTD.'S CASE (SUPRA), CONSIDERING THE SIMILA R QUESTION HELD THAT THE ASSESSEE COMPANY HAVING RECE IVED SUBSCRIPTIONS TO THE PUBLIC/RIGHTS ISSUE THROUGH BA NKING CHANNELS AND FURNISHED COMPLETE DETAILS OF THE SHAREHOLDERS, NO ADDITION COULD BE MADE UNDER SECTI ON 68 IN THE ABSENCE OF ANY POSITIVE MATERIAL OR EVIDENCE TO INDICATE THAT THE SHAREHOLDERS WERE BENAMIDARS OR FICTITIOUS PERSONS OR THAT ANY PART OF THE SHARE CA PITAL REPRESENTED COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. THE SIMILAR VIEW HAS BEEN TAKEN BY THE OTH ER HIGH COURTS. 17. AS THE APEX COURT HAS CONSIDERED THE LAW IN LOV ELY EXPORTS (P.) LTD.'S CASE (SUPRA) AND IN VIEW OF LAW LAID DOWN BY THE APEX COURT, WE FIND THAT THE SUBSTANTIA L QUESTIONS FRAMED IN THESE APPEALS DO NOT ARISE FOR OUR CONSIDERATION. ACCORDINGLY, ALL THESE APPEALS ARE D ISMISSED WITH NO ORDER AS TO COSTS. 12. THE HONBLE MADHYA PRADESH HIGH COURT IN THE C ASE OF CIT V. METACHEM INDUSTRIES AS REPORTED IN [2000] 24 5 ITR 160 (MADHYA PRADESH) HAS HELD THAT: M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 41 4. ON APPEAL, THE COMMISSIONER (APPEALS) EXAMINED THE MATTER IN DETAIL AND FOUND THAT SHRI S.K. GUPTA WAS THE REAL OWNER OF THE BUSINESS. THE EXPLANATION GIVEN B Y THE ASSESSEE WAS FOUND TO BE SATISFACTORY AND HE DELETE D THE AFORESAID THREE ENTRIES. THE SAME FINDING OF FACT H AS BEEN AFFIRMED BY THE TRIBUNAL. ONCE IT IS ESTABLISHED TH AT THE AMOUNT HAS BEEN INVESTED BY A PARTICULAR PERSON, BE HE A PARTNER OR AN INDIVIDUAL, THEN THE RESPONSIBILITY O F THE ASSESSEE-FIRM IS OVER. THE ASSESSEE-FIRM CANNOT ASK THAT PERSON WHO MAKES INVESTMENT WHETHER THE MONEY INVES TED IS PROPERLY TAXED OR NOT. THE ASSESSEE IS ONLY TO E XPLAIN THAT THIS INVESTMENT HAS BEEN MADE BY THE PARTICULA R INDIVIDUAL AND IT IS RESPONSIBILITY OF THAT INDIVID UAL TO ACCOUNT FOR THE INVESTMENT MADE BY HIM. IF THAT PER SON OWNS THAT ENTRY, THEN THE BURDEN OF THE ASSESSEE-FI RM IS DISCHARGED. IT IS OPEN FOR THE ASSESSING OFFICER TO UNDERTAKE FURTHER INVESTIGATION WITH REGARD TO THAT INDIVIDUAL WHO HAS DEPOSITED THIS AMOUNT. 5. SO FAR AS THE RESPONSIBILITY OF THE ASSESSEE IS CONCERNED, IT IS SATISFACTORILY DISCHARGED. WHETHER THAT PERSO N IS INCOME-TAX PAYER OR NOT OR FROM WHERE HE HAS BROUGH T THIS MONEY IS NOT THE RESPONSIBILITY OF THE FIRM. THE MO MENT THE FIRM GIVES SATISFACTORY EXPLANATION AND PRODUCES TH E PERSON WHO HAS DEPOSITED THE AMOUNT, THEN THE BURDE N OF THE FIRM IS DISCHARGED AND IN THAT CASE THAT CREDIT ENTRY CANNOT BE TREATED TO BE INCOME OF THE FIRM FOR THE PURPOSES OF INCOME-TAX. IT IS OPEN FOR THE ASSESSING OFFICER TO TAKE APPROPRIATE ACTION UNDER SECTION 69 OF THE ACT AGAI NST THE PERSON WHO HAS NOT BEEN ABLE TO EXPLAIN THE INVESTM ENT. IN M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 42 THE PRESENT CASE, THERE IS THE CONCURRENT FINDING O F BOTH THE COMMISSIONER (APPEALS) AS WELL AS OF THE TRIBUNAL T HAT THE FIRM HAS SATISFACTORILY EXPLAINED THE AFORESAID ENT RIES. 6. WE ARE, THEREFORE, OF THE OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL IS CORRECT AND THE AFORESAID QUESTION IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 13. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF P R. CIT-1 V. AMI INDUSTRIES (INDIA)(P.) LTD. AS REPORTED IN [ 2020] 116 TAXMANN.COM 34 (BOMBAY) VIDE ORDER DATED 29-01-2020 HAS CATEGORICALLY DISTINGUISHED THE DECISION OF THE HON BLE SUPREME COURT OF INDIA IN THE CASE OF NRA IRON & STEEL (P.) LTD. AND HAS HELD THAT: 21. FROM THE ABOVE, IT IS SEEN THAT IDENTITY OF TH E CREDITORS WERE NOT IN DOUBT. ASSESSEE HAD FURNISHED PAN, COPI ES OF THE INCOME TAX RETURNS OF THE CREDITORS AS WELL AS COPY OF BANK ACCOUNTS OF THE THREE CREDITORS IN WHICH THE S HARE APPLICATION MONEY WAS DEPOSITED IN ORDER TO PROVE GENUINENESS OF THE TRANSACTIONS. IN SO FAR CREDIT W ORTHINESS OF THE CREDITORS WERE CONCERNED, TRIBUNAL RECORDED THAT BANK ACCOUNTS OF THE CREDITORS SHOWED THAT THE CRED ITORS HAD FUNDS TO MAKE PAYMENTS FOR SHARE APPLICATION MO NEY AND IN THIS REGARD, RESOLUTIONS WERE ALSO PASSED BY THE BOARD OF DIRECTORS OF THE THREE CREDITORS. THOUGH, ASSESSEE WAS NOT REQUIRED TO PROVE SOURCE OF THE SOURCE, M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 43 NONETHELESS, TRIBUNAL TOOK THE VIEW THAT ASSESSING OFFICER HAD MADE INQUIRIES THROUGH THE INVESTIGATION WING O F THE DEPARTMENT AT KOLKATA AND COLLECTED ALL THE MATERIA LS WHICH PROVED SOURCE OF THE SOURCE. 22. IN NRA IRON & STEEL (P.) LTD. (SUPRA), THE ASSE SSING OFFICER HAD MADE INDEPENDENT AND DETAILED INQUIRY INCLUDING SURVEY OF THE INVESTOR COMPANIES. THE FIE LD REPORT REVEALED THAT THE SHAREHOLDERS WERE EITHER NON-EXIS TENT OR LACKED CREDIT-WORTHINESS. IT IS IN THESE CIRCUMSTAN CES, SUPREME COURT HELD THAT THE ONUS TO ESTABLISH IDENT ITY OF THE INVESTOR COMPANIES WAS NOT DISCHARGED BY THE ASSESSEE. THE AFORESAID DECISION IS, THEREFORE, CLE ARLY DISTINGUISHABLE ON FACTS OF THE PRESENT CASE. 23. THEREFORE, ON A THOROUGH CONSIDERATION OF THE M ATTER, WE ARE OF THE VIEW THAT THE FIRST APPELLATE AUTHORI TY HAD RETURNED A CLEAR FINDING OF FACT THAT ASSESSEE HAD DISCHARGED ITS ONUS OF PROVING IDENTITY OF THE CRED ITORS, GENUINENESS OF THE TRANSACTIONS AND CREDIT-WORTHINE SS OF THE CREDITORS WHICH FINDING OF FACT STOOD AFFIRMED BY THE TRIBUNAL. THERE IS, THUS, CONCURRENT FINDINGS OF FA CT BY THE TWO LOWER APPELLATE AUTHORITIES. APPELLANT HAS NOT BEEN ABLE TO SHOW ANY PERVERSITY IN THE AFORESAID FINDIN GS OF FACT BY THE AUTHORITIES BELOW. 24. UNDER THESE CIRCUMSTANCES, WE FIND NO ERROR OR INFIRMITY IN THE VIEW TAKEN BY THE TRIBUNAL. NO QUESTION OF L AW, MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW, ARISES FROM T HE ORDER OF THE TRIBUNAL. CONSEQUENTLY, THE APPEAL IS DISMIS SED. HOWEVER, THERE SHALL BE NO ORDER AS TO COST. M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 44 14. WE HAVE ALSO GONE THROUGH THE RATIO LAID DOWN IN THE RELEVANT FOLLOWING DECISIONS: - 1. HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. VALU E CAPITAL SERVICES (P.) LTD. AS REPORTED IN [2008] 307 ITR 33 4 (DELHI); 2. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT, C ENTRAL CIRCLE, SALEM V. VICTORY SPINNING MILLS LTD. AS REP ORTED IN [2014] 50 TAXMANN.COM 416 (MADRAS); 3. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V. FIRST POINT FINANCE LTD. AS REPORTED IN [2006] 286 ITR 47 7 (RAJASTHAN); 4. HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V. DEEN DAYAL CHOUDHARY AS REPORTED IN [2017] 293 CTR 468 (RAJAST HAN). 15. IN VIEW OF THE ABOVE DISCUSSION AND RATIO LAID DOWN IN THE AFORESAID JUDICIAL PRONOUNCEMENT, IT IS APPARENT TH AT THE ASSESSEE COMPANY IN THE FACTS OF THE PRESENT CASE DULY ESTAB LISHED THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICAN TS AND GENUINENESS OF THE TRANSACTIONS AS ENTERED INTO WIT H THEM. THE ASSESSING OFFICER WAS THEREFORE NOT JUSTIFIED IN DO UBTING THE AMOUNT OF SHARE APPLICATION MONEY RECEIVED FROM THE SE SHARE M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 45 APPLICANTS MERELY FOR THE REASON THAT THE SHARE APP LICANTS COULD NOT FURNISH DOCUMENTARY EVIDENCES SO AS TO SUBSTANT IATE THE AGRICULTURAL INCOME EARNED BY THEM AS IT WOULD TANT AMOUNT TO SEEKING AN EXPLANATION WITH REGARD TO SOURCE OF FUN DS INVESTED BY THE SHARE APPLICANTS WHICH WAS OUTSIDE THE DOMAIN A ND PURVIEW OF THE PROVISION OF SECTION 68 OF THE INCOME-TAX ACT, 1961 AS APPLICABLE FOR THE YEAR UNDER CONSIDERATION PRIOR T O THE INSERTION OF PROVISO TO SECTION 68 OF THE ACT. FURTHER, THE ASSE SSING OFFICER HIMSELF OBSERVED IN THE ASSESSMENT ORDER THAT MOST OF THE SHARE APPLICANTS APPEARED BEFORE HIM PERSONALLY AND ACCEP TED THAT THEY HAD MADE INVESTMENT IN THE SHARES OF THE RESPONDENT ASSESSEE COMPANY BUT THESE SHARE APPLICANTS COULD NOT FURNIS H SUPPORTING DOCUMENTARY EVIDENCES SO AS TO SUBSTANTIATE THE AGR ICULTURAL INCOME EARNED BY THEM OUT OF WHICH THEY HAS MADE IN VESTMENT IN THE SHARES OF THE RESPONDENT ASSESSEE COMPANY. BUT, THE ASSESSING OFFICER FAILED TO APPRECIATE THE FINDINGS LAID DOWN IN THE JUDICIAL PRECEDENTS (SUPRA) AND THE FACT THAT IT IS QUITE EV IDENT THAT THE ASSESSEE COMPANY ESTABLISHED THE IDENTITY OF THE SH ARE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS ENTERED INTO WI TH THEM BEYOND M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 46 ANY DOUBT. THE ASSESSEE COMPANY CANNOT BE PUT IN A DISADVANTAGEOUS POSITION MERELY BECAUSE THE SHARE A PPLICANTS COULD NOT SATISFACTORILY SUBSTANTIATE THE SOURCE OF INVESTMENT MADE BY THEM IN THE SHARES OF THE ASSESSEE COMPANY. IF T HE ASSESSING OFFICER HAD ANY DOUBT REGARDING THE SOURCE OF INVES TMENT MADE BY THEM THESE SHARE APPLICANTS, THE ASSESSING OFFICER WAS FREE TO PROCEED AGAINST THESE SHARE APPLICANTS BUT BY NO ST RETCH OF IMAGINATION CAN THE SHARE APPLICATION MONEY RECEIVE D FROM EXISTING INDIVIDUALS DULY ACCEPTED BY THEM, BE TAXED AS INCO ME OF THE ASSESSEE COMPANY UNLESS THE ASSESSING OFFICER ESTAB LISHES THE FACT THAT SUCH MONEY HAS EMANATED FROM THE COFFERS OF TH E RESPONDENT ASSESSEE COMPANY. FURTHER, WE FIND THAT THE ASSESSI NG OFFICER NOTED THAT CASH WAS DEPOSITED IN THE BANK ACCOUNTS OF THE SHARE APPLICANTS AND THEREAFTER CHEQUES WERE ISSUED IN FA VOUR OF THE ASSESSEE COMPANY. BUT, THE ASSESSING OFFICER FAILED TO CONSIDER THE FACT THAT IT IS UNCONTROVERTED FACT THAT MOST OF TH E SHARE APPLICANTS WHO INVESTED MONEY IN THE SHARES OF THE RESPONDENT ASSESSEE COMPANY WERE FARMERS WHOSE SOURCE OF INCOME WAS FRO M AGRICULTURAL ACTIVITIES AND AS A MATTER OF GENERAL TRADE PRACTICE, THE M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 47 AMOUNT OF AGRICULTURAL INCOME IS RECEIVED BY SUCH F ARMERS IN CASH. IN THE FACTS OF THE PRESENT CASE, THE SHARE APPLICA NTS BEING FARMERS CATEGORICALLY ACCEPTED THE FACT THAT THEY MADE INVE STMENT IN THE SHARES OF THE ASSESSEE COMPANY OUT OF AGRICULTURAL INCOME EARNED BY THEM. THESE SHARE APPLICANTS DEPOSITED THE AMOUN T OF AGRICULTURAL INCOME EARNED BY THEM IN CASH IN THEIR RESPECTIVE BANK ACCOUNTS AND THEREAFTER ISSUED CHEQUES IN FAVO UR OF THE ASSESSEE COMPANY. THE AMOUNT OF INVESTMENT MADE IN THE SHARES OF THE ASSESSEE COMPANY IS DULY OWNED BY THESE SHAR E APPLICANTS. HENCE, THERE WAS NO BASIS TO DRAW ANY ADVERSE INFER ENCE IN THE CASE OF THE ASSESSEE COMPANY MERELY FOR THE REASON THAT CASH WAS DEPOSITED IN THE BANK ACCOUNTS OF SUCH SHARE APPLIC ANTS PRIOR TO INVESTING THE AMOUNT IN THE SHARES OF THE ASSESSEE COMPANY UNLESS ANY MATERIAL EVIDENCING SUCH FLOW OF CASH FROM THE ASSESSEE IS BROUGHT ON RECORD BY THE ASSESSING OFFICER. OUR VIE W IS SUPPORTED BY THE RATIO LAID DOWN IN THE FOLLOWING JUDICIAL PR ONOUNCEMNTS: 1. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT , AJMER V. H.S. BUILDERS (P.) LTD. AS REPORTED IN [2012] 26 TA XMANN.COM 86 (RAJ.); M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 48 2. THE ITAT INDORE BENCH IN THE CASE OF LATE SHRI SANJ AY PALIYA VS. DCIT AS REPORTED IN (2017) 50 CCH 0198 INDORETRIB; HAS CATEGORICALLY HELD THAT: 3. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT , AJMER V. JAI KUMAR BAKLIWAL AS REPORTED IN [2014] 366 ITR 21 7 (RAJASTHAN). 16. WE FIND THAT THE ASSESSING OFFICER ALSO NOTED THAT THE AMOUNT WAS TRANSFERRED FROM THE SAME REFERENCE NUMBER BEIN G 1011-2723 IN THE BANK ACCOUNTS OF SMT. KAMLA BAI, SMT. SUMAN VERMA, SHRI SHUBHAM VERMA AND SHRI VED PRAKASH VERMA, THEREFORE, SOMEON E ELSE WAS OPERATING THESE BANK ACCOUNTS AND NAME OF THESE PER SONS WERE ONLY FOR NAMESAKE. THE ASSESSING OFFICER FURTHER NOTED THAT SONA VERMA, NIDHI VERMA AND VIDHI VERMA HAD INVESTED THE AMOUNT IN SH ARES IN CASH ALSO. HOWEVER, WE FIND FROM THE MATERIAL AVAILABLE ON REC ORD THAT THE MEMBERS OF THE VERMA FAMILY ARE RELATIVES OF DIRECTORS OF T HE RESPONDENT ASSESSEE COMPANY. THE EX-DIRECTOR OF THE ASSESSEE COMPANY, S HRI AMIT SONI IN HIS STATEMENT RECORDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS CATEGORICALLY MENTIONED ABOUT HIS RELATIONSHIP WITH THE MEMBERS OF THE VERMA FAMILY AND ALSO THE FACT THAT SHARES WERE PUR CHASED BY THE MEMBERS OF THE VERMA FAMILY. THE STATEMENT OF SHRI AMIT SONI, EX- M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 49 DIRECTOR OF THE RESPONDENT ASSESSEE COMPANY AS RECO RDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS BEEN FILED ON PAGE NO. 382-385 OF THE PAPER BOOK. FURTHER, THE SAID REFERENCE IN THE BANK ACCOUNTS OF THE MEMBERS OF VERMA FAMILY WAS ACTUALLY THE REFERENCE OF THE BANK ACCOUNT OF SHRI AMIT SONI. THE COPY OF BANK STATEMENT OF SH RI AMIT SONI HAS BEEN FILED ON PAGE NO. 386-389 OF THE PAPER BOOK. THEREF ORE, IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS PROVED THE SOURCE OF SOURC E OF FUNDS IN THE CASE OF MEMBERS OF VERMA FAMILY BY FILING THE COPY OF BANK STATEMENT OF SHRI AMIT SONI ALSO. HENCE, THERE REMAINS NO DOUBT REGARDING THE INVESTMENT MADE BY MEMBERS OF THE VERMA FAMILY. HEN CE, THE OBSERVATION OF THE ASSESSING OFFICER THAT THESE BAN K ACCOUNTS WERE OPERATED BY SOMEONE ELSE AND INVESTMENT IN SHARES W AS ALSO MADE IN CASH IS A BASELESS OBSERVATION. WE ALSO FIND THAT T HE ASSESSING OFFICER RECORDED THE STATEMENT OF SHRI AMIT SONI, EX-DIRECT OR OF THE ASSESSEE COMPANY DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH IS ALSO FILED BEFORE THIS TRIBUNAL AT PAGE NO. 382-385 OF THE PAP ER BOOK. IN VIEW OF THE AMPLE DOCUMENTARY EVIDENCES AS FILED BEFORE THE REV ENUE AUTHORITIES AS LISTED HEREINABOVE, IT IS CLEARLY EVIDENT THAT THE ASSESSEE COMPANY SATISFACTORILY DISCHARGED THE PRIMARY ONUS CAST UPO N IT UNDER SECTION 68 M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 50 OF THE INCOME-TAX ACT, 1961 BY NOT ONLY ESTABLISHIN G THE IDENTITY OF THE SHARE APPLICANTS BUT ALSO THEIR CREDITWORTHINESS AN D GENUINENESS OF THE TRANSACTIONS ENTERED INTO WITH THEM. WE FIND THAT M OST OF THE SHARE APPLICANTS PERSONALLY APPEARED BEFORE THE ASSESSING OFFICER AND THEIR STATEMENTS WERE RECORDED ON OATH WHEREIN, THEY CATE GORICALLY ACCEPTED THE FACT THAT THEY HAD INVESTED MONEY IN THE SHARES OF THE ASSESSEE COMPANY AND THE ASSESSING OFFICER IN PARA 2.9 OF TH E ASSESSMENT ORDER HAS HIMSELF ACKNOWLEDGED THE FACT THAT MOST OF THE SHARE APPLICANTS WERE PRODUCED BEFORE HIM AND THEIR STATEMENTS WERE RECOR DED ON OATH WHEREIN THEY CONFIRMED THAT THEY HAD INVESTED MONEY IN THE SHARES OF THE RESPONDENT ASSESSEE COMPANY OUT OF INCOME EARNED FR OM AGRICULTURAL ACTIVITIES. THE RELEVANT EXTRACT SCANNED FROM THE A SSESSMENT ORDER IS REPRODUCED HEREUNDER FOR READY REFERENCE: M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 51 FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSING OFFI CER MERELY DOUBTED THE INVESTMENT MADE BY THE SHARE APPLICANTS FOR THE REASON THAT THEY DID NOT SUBMIT ANY PROOF REGARDING AGRICULTURAL ACTIVITIES DONE BY THEM. IT IS THEREFORE QUITE EVID ENT THAT THE ASSESSING OFFICER HIMSELF ACCEPTED THE IDENTITY OF THE SHARE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS AS E NTERED INTO WITH THEM. IN VIEW OF THESE FACTS, WE ARE OF THE VI EW THAT THE ASSESSEE COMPANY SATISFACTORILY DISCHARGED THE PRIM ARY ONUS AS CAST UPON IT UNDER SECTION 68 OF THE INCOME-TAX ACT , 1961 BY ESTABLISHING THE IDENTITY AND CREDITWORTHINESS OF T HE SHARE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS AS E NTERED INTO WITH THEM AND THEREFORE, ADDITION MADE BY THE ASSES SING OFFICER ON M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 52 ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM RE MAINING SHARE APPLICANTS WAS NEITHER LEGAL NOR PROPER AND WAS RIG HTLY DELETED BY THE LD CIT(A). THE ACTION OF THE LD CIT(A) IS THERE FORE, CONFIRMED. ACCORDINGLY, GROUND NOS.1 TO 3 WITH REGARD TO DELET ION OF ADDITION OF RS.3,17,39,640/- ARE DISMISSED. 17. NOW, THE ONLY GROUND LEFT IS GROUND NO.4 WITH REGARD TO DISALLOWANCE OF INTEREST OF RS.9,73,742/- MADE BY T HE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAS NOT CHA RGED INTEREST ON LOAN AND ADVANCE BUT PAID INTEREST TO OTHERS. FACTS , IN BRIEF, ARE THAT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE COMPANY DID NOT CHARGE ANY INTEREST ON THE AMOUNT OF LOANS AND ADVA NCES TO THE TUNE OF RS. 81,14,522/- WHEREAS THE COMPANY PAID IN TEREST OF RS. 13,43,525/- AND THEREFORE, THE ASSESSING OFFICER DI SALLOWED AN AMOUNT OF RS. 9,73,742/- BEING 12% OF RS. 81,14,522 /- AND ADDED IT TO THE TOTAL INCOME OF THE ASSESSEE COMPANY. BEI NG AGGRIEVED, THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFF ICER BEFORE THE LD. CIT(A) WHO DELETED THE ADDITION OBSERVING AS UN DER: 5] IN GROUND NO 2 OF THE APPEAL, THE APPELLANT HAS CHALLENGED THE DISALLOWANCE OF INTEREST OF RS 9,73,742/- AS CALCUL ATED BY THE ASSESSING OFFICER ON THE AMOUNT OF ADVANCES AS GIVEN TO THE F OUR PARTIES BY M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 53 CALCULATING THE RATE OF INTEREST AT 12% ON THE SAME . THE APPELLANT CLAIMED THAT OUT OF TOTAL LOAN OF RS 81,14,522/- , LOAN OF RS 78,91,106/- WAS TRANSFERRED FROM THE PROPRIETORSHIP CONCERN OF SHRI SURENDRA SONI. THE APPELLANT FURTHER CLARIFIED THAT AGAINST THE LO AN OF RS 2,24,91,018/- IN THE BALANCE SHEET OF THE APPELLANT COMPANY , AN AMOUNT OF RS 8,67,76,794/- WAS INVESTED FOR THE PURPOSE OF BUSIN ESS. THE APPELLANT COMPANY WAS ALSO HAVING INTEREST FREE FUNDS TO THE TUNE OF RS. 4,99,09,986/- AND THEREFORE AMOUNT AS SHOWN AS ADVA NCE OF RS. 81,14,522/- WAS OUT OF INTEREST FREE FUNDS OF THE A PPELLANT COMPANY. THE APPELLANT RELIED ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF M/S S.A BUILDERS VS CIT AS REPORTED IN 288 ITR 1[SC], THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS RELIANCE UTILITIES & POWER LTD AS REPORTED IN 313 ITR 340 AN D ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF HERO CYCLES P LIMITED AS REPORTED IN 379 ITR 0347. CONSI DERING THE OVERALL FACTS OF THE CASE AND DECISIONS AS REFERRED BY THE APPELLANT, IT IS PROVED THAT THE INTEREST BEARING FUNDS IN POSSESSION OF TH E APPELLANT COMPANY WERE HIGHER THAN THE AMOUNT AS ADVANCED BY IT. FURT HER, MOST OF THE ADVANCES WERE CARRIED FORWARDS FROM THE ERSTWHILE F IRM WHERE NO INTEREST BEARING FUNDS WERE USED. I THEREFORE DIREC T THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS 9,73,742/- MADE OUT OF INTEREST PAID. THE APPELLANT ACCORDINGLY GET RELIEF OF RS 9,73,742/-. THIS GROUND OF APPEAL IS ALLOWED. 18. BEING AGGRIEVED, THE REVENUE HAS CHALLENGED TH E ACTION OF THE LD. CIT(A) BEFORE THIS TRIBUNAL. BEFORE US, LD. CIT-DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE IMPUGNED ORD ER. M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 54 19 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE FIND THAT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE CLAIMED THAT OUT OF TOTAL LOAN OF RS 81,14,522/-, LOAN OF RS 78,91,1 06/- WAS TRANSFERRED FROM THE PROPRIETORSHIP CONCERN OF SHRI SURENDRA SONI AND THE ASSESSEE CLARIFIED THAT AGAINST THE LOAN OF RS 2,24,91,018/- IN THE BALANCE-SHEET OF THE ASSESSEE, AN AMOUNT OF RS 8,67,76,794/- WAS INVESTED FOR THE PURPOSE OF BUSIN ESS. LD. CIT(A) NOTED THAT THE ASSESSEE COMPANY WAS ALSO HAVING IN TEREST FREE FUNDS TO THE TUNE OF RS. 4,99,09,986/- AND THEREFOR E AMOUNT AS SHOWN AS ADVANCE OF RS. 81,14,522/- WAS OUT OF INTE REST FREE FUNDS OF THE ASSESSEE COMPANY. IN VIEW OF FINDING OF FACT RECORDED BY LD. CIT(A) IN THE LIGHT OF THE JUDICIAL PRONOUNCEMENTS CITED (SUPRA), WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS JUSTIFIED I N DELETING THE ADDITION BECAUSE THE INTEREST BEARING FUNDS IN POSS ESSION OF THE ASSESSEE COMPANY WERE HIGHER THAN THE AMOUNT AS ADV ANCED BY IT AND MOST OF THE ADVANCES WERE CARRIED FORWARDS FROM THE ERSTWHILE FIRM WHERE NO INTEREST BEARING FUNDS WERE USED. THE RATIO LAID DOWN IN THE DECISIONS OF THE HONBLE APEX COURT IN THE CASE OF M/S M/S. SANVERWALA JEWELLERS PVT. LTD. ITANO.384/IND/2018 55 S.A BUILDERS VS CIT AS REPORTED IN 288 ITR 1[SC], H ONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS RELIANCE UTILITIES & POWER LTD AS REPORTED IN 313 ITR 340 AND ALSO THE HONBLE APEX C OURT IN THE CASE OF HERO CYCLES P LIMITED AS REPORTED IN 379 IT R 0347 FURTHER SUPPORTS THE CASE OF THE ASSESSEE. THUS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) AN D CONFIRM THE DELETION OF ADDITION OF RS.9,73,742/- MADE OUT OF I NTEREST PAID. ACCORDINGLY, GROUND NO.4 RAISED BY THE REVENUE IS A LSO DISMISSED. 20. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISM ISSED. ORDER WAS PRONOUNCED AS PER RULE 34 OF THE I.T.A.T. RULES 1963 ON 22 .9.2021. SD/- (MADHUMITA ROY) SD/- (MANISH BORAD) JUDICIAL MEMBER A CCOUNTANT MEMBER INDORE; DATED : 22/8/2021 !VYAS! COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE