NETSCAPE SOFTWARE LTD ( FORMERLY KNOWN AS NETSCAPE SOFTWARE P. LTD), MUMBAI V. DCIT CIR 40, MUMBAI

ITA 3852/MUM/2009

• Counselvise Citation: 385219914 RSA 2009
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 26-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 12-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBACHAM RAM
• Keywords: Unexplained cash credit; Gift; Principle of natural justice; Opportunity of cross examination; Source of fund; Additional evidence; Question of law; Difference of opinion; Onus to prove
• Section: 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F,MUMBAI BEFORE SHRI P.M. JAGTAP (AM) & SHRI N.V. VASUDEVAN (JM) I.T.A.NO.3852/MUM/2009 (A.Y. 2006-07) NETSCAPE SOFTWARE LTD. (FORMERLY KNOWN AS NETSCAPE SOFTWARE PVT.LTD.), BHUPEN CHAMBERS, GR. FLOOR, 9, DALAL STREET, FORT, MUMBAI-400 023. PAN: AAACN9129J. VS. DY. COMMR. OF INCOME-TAX, CENT. CIR. 40, MUMBAI. APPELLANT RESPONDENT APPELLANT BY SHRI RAJIV KHANDELWAL. RESPONDENT BY SHRI S UBACHAM RAM. DATE OF HEARING 26-09-2011 DATE OF PRONOUNCEMENT -10-2011 O R D E R PER N.V. VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 12-03-2009 OF CIT(A), CENTRAL-VII, MUMBAI, RELATING TO ASSESSM ENT YEAR 2006-07. 2. GROUND NO.1 RAISED BY THE ASSESSEE IN THE APPEAL READS AS FOLLOWS : THE COMMISSIONER OF INCOME-TAX(APPEALS), CENTRAL-V II, MUMBAI (HEREINAFTER REFERRED TO AS THE CIT(A)) ERRE D IN UPHOLDING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 40, MUMBAI (HEREINAFTER REFERRED TO AS THE ASSESSING OFFICER) IN MAKING AN ADDITION OF A SUM OF RS.27,61,50,000 AND A SUM OF RS.6,42,00,000, BEI NG AMOUNT RECEIVED ON ALLOTMENT OF PREFERENCE SHARE CA PITAL AND SHARE APPLICATION MONEY RECEIVED (PENDING ALLOT MENT). ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 2 THE APPELLANTS CONTEND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) OU GHT NOT TO HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN MAKING THE IMPUGNED ADDITION INASMUCH AS THE MONIES DO NOT BELONG TO THE APPELLANTS. THE APPELLANTS FURTHER CONTEND THAT THE ASSESSING O FFICER HAS VIOLATED THE PRINCIPLES OF NATURAL JUSTICE IN N OT FURNISHING THE VARIOUS STATEMENTS ON OATH OF DIRECT ORS OF VARIOUS COMPANIES, BEING PREFERENCE SHAREHOLDERS/SH ARE APPLICANTS OF THE APPELLANT-COMPANY BEFORE PASSING THE IMPUGNED ASSESSMENT ORDER AND THE CIT(A) ALSO DID N OT DIRECT THE ASSESSING OFFICER TO FURNISH THE STATEME NTS ON OATH OF DIRECTORS OF THE SHAREHOLDER-COMPANIES/SHAR E APPLICANTS NOT FURNISH TO THE APPELLANTS AND AS SUC H, THE ORDER OF THE CIT(A) IS BAD IN LAW BEING PASSED AGAI NST THE PRINCIPLES OF NATURAL JUSTICE. THE CIT(A) ERRED IN HOLDING THAT ADEQUATE OPPORTUNI TY FOR CROSS EXAMINATION OF SHAREHOLDER-COMPANIES/SHARE APPLICANTS HAS BEEN ALLOWED TO APPELLANTS. THE CIT(A) FURTHER ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER OF RELYING ON THE REPORT OF THE D IRECTORS OF SHAREHOLDER-COMPANIES/SHARE APPLICANTS BY OTHER OFF ICERS OF THE DEPARTMENT INSTEAD OF HIMSELF EXAMINING THE SAID DIRECTORS. 3. THE ASSESSEE IS A COMPANY WHICH IS ENGAGED IN T HE BUSINESS OF TRADING IN SHARES AND SECURITIES. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD REPAID LOAN TO THE TU NE OF RS.16.90 CRORES BY ALLOTTING PREFERENCE SHARES TO PRIVATE CORPORATE BO DIES. THE ASSESSEE HAD RECEIVED SHARE APPLICATION MONEY FOR ALLOTMENT OF 6 8,070 CUMULATIVE REDEEMABLE PREFERENCE SHARES OF RS.1000/- EACH AT A PREMIUM OF RS.4000/- PER SHARE. THE ASSESSEE ALLOTTED 55,230 SHARES TO D IFFERENT PRIVATE CORPORATE BODIES. ON SUCH ALLOTMENT, THE ASSESSEE RECEIVED A SUM OF RS.5,52,30,000/- TOWARDS FACE VALUE OF THE SHARES AND RS.22,09,20,00 0/- TOWARDS SHARE PREMIUM. THUS, THE ASSESSEE RECEIVED A TOTAL AMOUNT OF RS.27,61,50,000/- TOWARDS ALLOTMENT OF 55,230 CUMULATIVE REDEEMABLE P REFERENCE SHARES. APART FROM THE ABOVE, THE ASSESSEE RECEIVED APPLICATION M ONEY PENDING ALLOTMENT OF RS.6.42 CRORES FOR ALLOTMENT OF 12,840 SHARES. THE DETAILS OF INCREASE IN ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 3 SHARE CAPITAL BY ALLOTMENT OF PREFERENCE SHARES INC LUDING PREMIUM IS AS FOLLOWS : ___________________________________________________ _________________________ SR.NO. NAME AND ADDRESS NO. OF SHARES AMOUNT PAI D ALLOTTED AMOU NT ___________________________________________________ ________________________ 1 ANKITA FINVEST PVT LTD 300 1,500,000 2 BANSIDHAR VYAPAAR PVT LTD 1,200 6,000,000 3 GOLDSTONE TRADING CO. PVT LTD 8,240 41,200,000 4 JAISHREE COMMOTRADE PVT LTD 2,100 10,500,000 5 NILHAT PROMOTERS & FISCAL PVT LTD 1,000 5,000,000 6 PENTEX EXPO PVT LTD 780 3,900,000 7 REALSTONE TRADING CO PVT LTD 12,100 60,500,000 8 REGENCY SHARE & HOLDINGS PVT LTD 140 700,000 9 SNEHDEEP IMPEX PVT LTD 200 1,000,000 10 VENTEX TRADE PVT LTD 80 400,000 11 YULAN MARKETING PVT LTD 3,0 00 15,000,000 12 ABHIFLAX TRACON PVT LTD 700 3,500,000 13 M.G. GREENFIELD PVT LTD 500 2,500,000 14 CONCERT TRADELINK LTD 1, 860 9,300,000 15 PLATINUM COMMERCIAL PVT LTD 4,580 22,900,000 16 ALLWORTH COMMODITIES PVT LTD 400 2,000,000 17 GOODVIEW TRADING PVT LTD 1,000 5,000,000 18 IRIS COMMERCIAL PVT LTD 3,5 00 17,500,000 19 CUBE TRAFIN PVT LTD 2,500 12,500,000 20 BAKLIWAL FINVEST PVT LTD 2,90 0 14,500,000 21 NEERAV HOLDINGS PVT LTD 800 4,000,000 ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 4 22 KANODIA VYAPAAR CO. PVT LTD 2,000 10,000,000 23 APSARA FINTRADE PVT LTD 1,40 0 7,000,000 24 COSMIC TRADE & INVST PVT LTD 2,000 10,000,000 25 CLIX SECURITIES PVT LTD 1 ,950 9,750,000 THE DETAILS OF THE SHARE APPLICATION MONEY RECEIVED FOR ALLOTMENT OF 12,840 SHARES WERE AS FOLLOWS : --------------------------------------------------- --------------------------------------- SR.NO. PARTY NAME SHARE QTY AMOUNT --------------------------------------------------- --------------------------------------- 1 STAR TRAFIN PVT LTD 800 4 ,000,000 2 RAJESH VINIMAY & VYAPAAR PVT LTD 1,8 00 9,000,000 3 HOOGHLY VINIMAY PVT LTD 800 4,000,000 4 CHOWDHURY CONSULTANTS PVT LTD 300 1,500,000 5 SUNNY FINCOM PVT LTD 1,000 5,000,000 6 NKP HOLDINGS PVT LTD 1,400 7,00 0,000 7 DABRIWAL INVT. & FINANCIERS PVT LTD 1,000 5,000,000 8 REGAL COMMOTRADE PVT LTD 640 3 ,200,000 9 APSARA TEX PVT LTD 1,000 5,000, 000 10 MACRO LEAFIN PVT LTD 1,700 8,500,000 11 ANKUR SUPPLIERS PVT LTD 400 2,000,000 12 LILY ENCLAVE PVT LTD 400 2,000,000 13 BHANU COMPUTRONICES PVT LTD 1,600 8,000,000 --------- 12,840 64,200,000 ===== 4. ACCORDING TO THE AO, THERE WAS AN INVESTIGATION BY THE SPECIAL TEAM CONSTITUTED BY THE CBDT TO VERIFY THE SOURCE OF FUN DS TAKEN BY THE ASSESSEE FOR REPAYMENT OF ITS DUES TO M/S. MADHAVPURA MERCAN TILE CO-OP. BANK LTD. ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 5 THE AO RECEIVED REPORT FROM THE ADDL. DIT (INV.) UN IY-I, KOLKATA ON 04-12- 2006, 29-12-2006, 23-02-2007 AND 24-04-2007. 5. THE PROCESS OF INVESTIGATION INVOLVED SUMM ONING THE DIRECTORS OF THE VARIOUS COMPANIES WHICH HAD APPLIED FOR ALLOTMENT O F PREFERENCE SHARES U/S.131 OF THE ACT. AS PER THE STATEMENTS OF THE DI RECTORS OF THE VARIOUS COMPANIES WHO MADE APPLICATION FOR ALLOTMENT OF SHA RES, CASH WAS GIVEN TO THE AFORESAID COMPANIES WHICH WAS DEPOSITED IN BANK ACCOUNTS OF CERTAIN PERSON WHO ALLOWED THEIR BANK ACCOUNTS AS WELL AS T HE BANK ACCOUNTS OF THEIR BUSINESSES FOR THE PURPOSE OF DEPOSITING CASH AND IN TURN ISSUED BLANK ACCOUNT PAYEE CHEQUES TO THE COMPANIES WHICH MADE A PPLICATION FOR ALLOTMENT OF SHARES OF THE ASSESSEE COMPANY. THE ST ATEMENTS OF THE PERSONS WHO ALLOWED THEIR BANK ACCOUNTS TO BE USED FOR DEPO SITING CASH AND ISSUING ACCOUNT PAYEE CHEQUES FOR A COMMISSION, NAMELY, MR. KISHAN KUMAR VERMA, MR. MURARI AGARWAL, ETC., WERE RECORDED. IN ANNEXUR E-1 TO THE ORDER OF ASSESSMENT, A CHART HAS BEEN ANNEXED SHOWING AS TO HOW THE TRANSACTIONS WERE ROUTED BY CREATING DIFFERENT LAYERS BEFORE THE MONEY ULTIMATELY CAME IN THE FORM OF SHARE APPLICATION MONEY TO THE ASSESSEE . STATEMENTS OF DIRECTORS OF THE VARIOUS COMPANIES TO WHOM SHARES WERE ALLOTT ED WERE ALSO RECORDED. IN THEIR STATEMENT, THEY WERE ASKED AS TO WHETHER THEY HAD APPLIED FOR SHARES IN CERTAIN COMPANIES, THE ASSESSEE BEING ONE OF THE CO MPANIES. THEY HAD GIVEN THE DETAILS OF THE APPLICATION FOR SHARES THAT THEY HAD MADE FOR ALLOTMENT OF SHARES OF THE ASSESSEE. THEY WERE ALSO ASKED ABOUT THE SOURCE OF FUNDS FOR MAKING THE INVESTMENT IN SHARES OF THE ASSESSEE COM PANY. THEY HAD IN THIS REGARD GIVEN THE FOLLOWING ANSWER : I HAD GOT CASH OF EQUIVALENT AMOUNT FROM THIS C OMPANY AND AGAINST THE SAME THE ABOVE CHEQUE HAS BEEN ISSUED TO THEM. THIS IS THE SUBSTANCE OF THE STATEMENT RECORDED OF THE DIRECTORS OF THE VARIOUS COMPANIES WHO HAD APPLIED FOR ALLOTMENT OF SHARES OF THE ASSESSEE COMPANY. IT IS ALSO PERTINENT TO MENTION THE STAT EMENT OF THE DIRECTORS OF SOME OF THE COMPANIES WAS ONLY RECORDED AND NOT ALL THE COMPANIES WHICH MADE APPLICATION FOR ISSUE OF SHARES. ANNEXURE-1 TO THIS ORDER GIVES THE DETAILS OF THE VARIOUS COMPANIES IN WHOSE CASE THE STATEMENTS OF THE ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 6 DIRECTORS WERE RECORDED. THE STATEMENT ALSO GIVES T HE EVIDENCE FILED BY THE ASSESSEE TO SUBSTANTIATE THE RECEIPT OF SHARE APPLI CATION MONEY FROM THE VARIOUS COMPANIES TO WHICH SHARES WERE ALLOTTED. 6. THE AO CONFRONTED THE ADVERSE EVIDENCE HE HAD C OLLECTED AGAINST THE ASSESSEE. MR. KAUSHIK CHHOTA LAL SHAH, DIRECTOR OF THE ASSESSEE, WAS EXAMINED BY THE ADIT, UNIT-IX(2). IN HIS STATEMENT, HE DENIED HAVING GIVEN CASH TO THE VARIOUS COMPANIES WHICH HAD APPLIED FOR ALLOTMENT OF SHARES OF THE ASSESSEE COMPANY. HE ALSO EXPRESSED HIS INTENTI ON TO CROSS EXAMINE THE DIRECTORS OF THE VARIOUS COMPANIES TO WHOM SHARES H AD BEEN ALLOTTED AND WHO HAD STATED THAT CASH WAS GIVEN TO THEM FOR PURC HASES OF SHARES OF THE ASSESSEE COMPANY. 7. THE AO, IN THE COURSE OF ASSESSMENT PROCEEDINGS, BY LETTER DATED 16- 09-2008, INFORMED THE ASSESSEE THAT IT CAN AVAIL TH E OPPORTUNITY OF CROSS EXAMINING OF THE DIRECTORS OF THE VARIOUS COMPANIES WHO HAD DEPOSED THAT THEY HAD RECEIVED CASH WHICH WERE USED BY THEM TO M AKE APPLICATION FOR ALLOTMENT OF SHARES OF THE ASSESSEE COMPANY. THE AO ALSO AFFORDED OPPORTUNITY TO THE ASSESSEE TO FILE CONFIRMATION FR OM THE VARIOUS SHAREHOLDERS. THE ASSESSEE, VIDE ITS REPLY DATED 08 -10-2008, SUBMITTED AS FOLLOWS : WE REFER TO THE DISCUSSIONS OUR REPRESENTATIVE HAD WITH YOU ON 16 TH SEPTEMBER, 2008 AND THE SHOW CAUSE NOTICE DATED 16.9.2008 REQUIRING US TO PRODUCE THE PREFERE NCE SHAREHOLDERS TO PROVE THE GENUINENESS OF THE RECEIP T OF MONIES FOR ALLOTMENT OF SHARES. IN THIS CONNECTION, WE WOULD LIKE TO INFORM YOU THA T WE HAVE FILED ALL THE RELEVANT DOCUMENTS RECEIVED ON APPLICATION, AND THEREAFTER, AS REQUIRED BY YOU, TO PROVE THE GENUINENESS OF THE TRANSACTIONS PLEASE REFER OUR LETTER DATED 5 TH SEPTEMBER, 2008. IN YOUR AFORESAID LETTER YOU HAVE REQUIRED US TO PRODUCE THE PARTIES; HOWEVE R, AS INDICATED EARLIER AND AS YOU ARE AWARE THE COMPANIE S ARE BASED IN KOLKATA AND HENCE, WE CANNOT INSIST THEM T O TRAVEL TO MUMBAI FOR CROSS EXAMINATION. MOREOVER, T HEY ARE YOUR WITNESS AND HENCE, YOU ARE REQUIRED TO PRO DUCE THEM FOR CROSS EXAMINATION. FURTHER, YOU ARE VESTED WITH POWERS UNDER SECTION 131 TO ISSUE THEM SUMMONS AND PRODUCE THEM FOR CROSS EXAMINATION. ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 7 8. BY ANOTHER LETTER DATED 01-10-2008, THE AO CALL ED UPON THE ASSESSEE TO PRODUCE THE PARTIES TO WHOM THE SHARES WERE ALLOTTE D TO PROVE THE GENUINENESS OF THE TRANSACTIONS. AGAIN, THE ASSESSE E WAS ASKED TO FILE CONFIRMATION. THE ASSESSEE DID NOT COMPLY WITH THE REQUEST OF THE AO. THE ASSESSEE RELIED ON THE VARIOUS EVIDENCE IT HAD FILE D IN SUPPORT OF ESTABLISHING THE IDENTITY OF THE SHAREHOLDERS, THE CAPACITY OF T HE SHAREHOLDERS TO MAKE INVESTMENT IN SHARES AND THE GENUINENESS OF THE TRA NSACTIONS OF PURCHASE OF SHARES. ACCORDING TO THE AO, THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCHARGE ITS BURDEN OF EXPLAINING THE RECEIPT O F SHARE APPLICATION MONEY TO THE SATISFACTION OF THE AO. HE HELD THAT THE MER E FILING OF THE VARIOUS DOCUMENTS BY THE ASSESSEE DOES NOT DISCHARGE THE BU RDEN THAT LAY ON THE ASSESSEE. ACCORDING TO THE AO, THE ASSESSEE FAILED TO PRODUCE THE DIRECTORS OF THE VARIOUS COMPANIES AND ALSO FAILED TO FILE CONFI RMATION FROM THE COMPANIES TO WHOM SHARES WERE ALLOTTED. 8. IN VIEW OF THE ABOVE FACTS AND ALSO RELYING ON T HE REPORT OF ADIT (INV.) UNIT-I, KOLKATA, THE AO HELD THAT THE SOURCE OF INV ESTMENT BY THE VARIOUS COMPANIES OF THE SHARES OF THE ASSESSEE WAS FUNDS P ROVIDED BY THE ASSESSEE ITSELF. FOR ALL THE ABOVE REASONS, THE AO TREATED T HE SHARE APPLICATION MONEY OF RS.6.42 CRORES PENDING ALLOTMENT AND THE SUM OF RS.27,61,50,000/- ON ALLOTMENT OF SHARES WERE UNEXPLAINED CASH CREDITS U /S.68 OF THE ACT. ACCORDINGLY, A SUM OF RS.34,03,50,000/- WAS ADDED T O THE TOTAL INCOME OF THE ASSESSEE. 9. ON APPEAL BY THE ASSESSEE, THE CIT(A) CONFIRMED THE ORDER OF THE AO. THE CIT(A) ALSO FOUND THAT IN ASSESSMENT YEAR 2005- 06, ON IDENTICAL ISSUE, HE HAD CONFIRMED SIMILAR ADDITION. THE CIT(A) ALSO OBSERVED THAT DESPITE SUFFICIENT OPPORTUNITY, NO WRITTEN SUBMISSIONS OR O RAL SUBMISSIONS WERE MADE EXCEPT FILING THE PAPER BOOK. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE HAS RAISED GROUND NO. 1 BEFORE THE TRIBUNA L. 10. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE FILED BEFORE US A COPY OF THE ORDER OF THE TRIBUNAL IN ITA NO.3859/MU M/2009 FOR ASSESSMENT ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 8 YEAR 2006-07 IN THE CASE OF CHAT COMPUTERS LTD. VS. DCIT. IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE FACTS OF THE ASSESSEES CASE AND THOSE OF CHAT COMPUTERS LD. (SUPRA) ARE IDENTICAL. IT WAS HIS SUBMISSION THAT THE ORDERS OF THE CIT(A) AND THE AO WERE VERBATIM T HE SAME IN BOTH THE CASES. IT WAS FURTHER SUBMITTED BY HIM THAT THE ANN UAL RETURN FILED BY THE ASSESSEE BEFORE THE REGISTRAR OF COMPANIES CLEARLY ESTABLISHED THE FACTUM OF ALLOTMENT. IT WAS FURTHER SUBMITTED THAT THE EVIDEN CE FILED BY THE ASSESSEE PRIMA FACIE SHOWED THAT IT HAD DISCHARGED THE ONUS IN EXPLAINING THE CASH CREDITS. IT WAS ALSO SUBMITTED THAT THE STATEMENT O F ONLY SOME OF THE DIRECTORS OF COMPANIES TO WHOM SHARES WERE ALLOTTED WAS RECORDED. IT WAS HIGHLIGHTED THAT EVEN IN RESPECT OF COMPANIES TO WH OM SHARES WERE ALLOTTED, WHOSE DIRECTORS WERE NOT EXAMINED, THE AO HAS DRAWN ADVERSE INFERENCE, WHICH WAS NOT PERMISSIBLE IN LAW. OUR ATTENTION WAS DRAWN TO THE VARIOUS EVIDENCE FILED BY THE ASSESSE TO ESTABLISH THE IDEN TITY AND CAPACITY OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. AS ALREADY STATED, THESE DETAILS ARE AVAILABLE IN ANNEXURE-1 TO THIS ORDER I N THE FORM OF CHART. FURTHER, RELIANCE WAS PLACED BY THE LD. COUNSEL FOR THE ASSESSEE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. CREATIVE WORLD TELEFILM LTD. (333 ITR 116) (BOM) WHEREIN IT WAS HE LD THAT WHEN SHARE APPLICATION IS RECEIVED BY AN ASSESSEE COMPANY AN D IT IS ALLEGED THAT THEY WERE BOGUS SHAREHOLDERS BUT WHEN NAMES AND OTHER DE TAILS ARE GIVEN LIKE PAN NO. ETC., IT WAS FOR THE AO TO FIND OUT THE SHA RE APPLICANTS AND MAKE ASSESSMENT IN THEIR HANDS. IN THIS REGARD, THE HON BLE BOMBAY HIGH COURT HAS ALSO REFERRED TO THE DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS LTD. (319 ITR 5 (SC). 11. THE LD. D.R., HOWEVER, RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. HE SUBMITTED THAT THE DECISION OF THE TRIBUNAL REND ERED IN THE CASE OF CHAT COMPUTERS LTD. (SUPRA) WILL NOT BE APPLICABLE TO TH E FACTS OF THE PRESENT CASE. IN THIS REGARD, HE DREW OUR ATTENTION TO PARA 6 OF THE ORDER OF THE TRIBUNAL IN THE CASE OF CHAT COMPUTERS LTD. (SUPRA) WHEREIN THE TRIBUNAL HAD GIVEN A FINDING THAT THE ASSESSEE WAS NOT AFFORDED OPPORTUN ITY OF CROSS EXAMINATION. IN THIS REGARD, OUR ATTENTION WAS DRAWN TO THE LETT ER DATED 16-09-2008 WHEREBY THE ASSESSEE WAS GIVEN SPECIFIC OPPORTUNITY OF CROSS EXAMINATION OF ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 9 THE DIRECTORS OF THE VARIOUS COMPANIES WHICH HAD AP PLIED FOR ALLOTMENT OF SHARES OF THE ASSESSEE COMPANY. OUR ATTENTION WAS A LSO DRAWN TO THE LETTER DATED 08-10-2008 BY THE ASSESSEE WHEREBY THE ASSESS EE REFUSED TO AVAIL THE RIGHT OF CROSS EXAMINATION. OUR ATTENTION WAS ALSO DRAWN TO THE FACT THAT IN THE CASE OF THE ASSESSEE THERE WAS NO CONFIRMATION FILED BY THE ASSESSEE FROM THE COMPANIES TO WHOM SHARES WERE ALLOTTED. IT WAS POINTED OUT THAT THERE WAS ALSO A COMPLETE FAILURE ON THE PART OF THE ASSE SSEE TO PROVE ITS CASE EVEN BEFORE THE CIT(A). 12. OUR ATTENTION WAS DRAWN TO PARA 6.4 OF THE ORDE R OF THE TRIBUNAL IN CHAT COMPUTERS LTD.S CASE WHEREBY IT WAS HELD THAT THE AO HAD A DUTY TO ESTABLISH THAT THE CASH GIVEN BY THE ASSESSEE HAD U LTIMATELY REACHED THE ASSESSEE IN THE FORM OF SHARE APPLICATION MONEY. AC CORDING TO THE LD. D.R., IN THE CASE OF THE PRESENT ASSESSEE, IN ANNEXURE-1 TO THE ORDER OF ASSESSMENT, THE AO HAD CLEARLY DEMONSTRATED AS TO HOW THE ASSES SEES CASH WENT INTO THE BANK ACCOUNTS OF SEVERAL PERSONS AND CAME BACK TO T HE ASSESSEE IN THE FORM OF SHARE APPLICATION MONEY BY VARIOUS COMPANIES. IT WAS ALSO SUBMITTED THAT THE FINDING BY THE ADIT (INV.), KOLKATA, WAS NOT TH E ONLY BASIS ON WHICH THE AO MADE THE IMPUGNED ADDITION. IT WAS HIGHLIGHTED T HAT EVEN WITHOUT THE ADIT(INV.)S FINDING , THE AO REACHED A CONCLUSION THAT THE CASH CREDITS IN QUESTION REMAINED UNEXPLAINED. OUR ATTENTION WAS DR AWN UPTO PARA 4.8 OF THE AOS ORDER WHERE THE CONCLUSIONS ARRIVED AT BY THE AO ABOUT THE CASH CREDITS NOT BEING GENUINE AND PARA 4.9 WHERE THERE WAS ONLY A PASSING REFERENCE TO THE INVESTIGATION CARRIED OUT BY THE A DIT, KOLKATA. IT WAS SUBMITTED BY HIM THAT BESIDES THE ABOVE, THERE WERE SEVERAL INCONSISTENCIES AND LACUNA IN THE EVIDENCE FILED BY THE ASSESSEE TO SUBSTANTIATE THE IDENTITY, CAPACITY AND GENUINENESS OF THE TRANSACTIONS OF PUR CHASES OF SHARES. TO QUOTE A FEW INSTANCES, THE LD. D.R. POINTED OUT THA T MANY COMPANIES HAD COMMON ADDRESS AND COMMON DIRECTORS. MANY OF THE CO MPANIES ADDRESSES WERE IN MUMBAI. IN SOME OF THE ACKNOWLEDGEMENTS FOR RECEIPT OF SHARE APPLICATION MONEY, THE STAMP OF THE SHARE APPLICANT IS FOUND. ALL THESE THINGS, ACCORDING TO THE LD. D.R., ONLY SHOW THAT A LL THE DOCUMENTS HAVE BEEN PREPARED IN A SYSTEMATIC MANNER. HE ALSO POINTED OU T FROM THE ACCOUNTS OF THE VARIOUS COMPANIES WHICH HAD APPLIED FOR ALLOTME NT OF SHARES THAT THEY ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 10 WERE DOING NO BUSINESS AND THAT THEY HAD NO FUNDS O F THEIR OWN. ACCORDING TO HIM, THE CASE HAS TO BE LOOKED AT FROM THE VIEWP OINT OF HUMAN PROBABILITIES AS LAID DOWN BY THE HONBLE SUPREME C OURT IN THE CASE OF SUMATI DAYAL 214 ITR801 (SC) AND DURGAPRSAD MORE (7 2 ITR 807 (SC). IT WAS ALSO HIS SUBMISSION THAT THERE WAS NO NEED FOR THE AO TO PROVE SIPHONING OF CASH, AS THE PRIMARY ONUS OF ESTABLISH ING THE CREDITS SATISFACTORILY LIES ON THE ASSESSEE. RELIANCE WAS A LSO PLACED ON THE DECISION OF ITAT, AHMEDABAD BENCH, IN THE CASE OF VISHWANATH CL ORINATE & CHEMICALS (P.) LTD. VS. ITO (2011) 9 TAXMANN.COM 206 (AHD.) W HEREIN THE TRIBUNAL HELD THAT IN THE ABSENCE OF DOCUMENTARY EVIDENCE IN SUPP ORT OF INCREASE IN SHARE CAPITAL, THE SAME CAN BE CONSIDERED AS UNEXPLAINED CASH CREDIT. RELIANCE WAS ALSO PLACED IN THE DECISION OF DELHI ITAT BENCH IN THE CASE OF ITO VS. OMEGA BIOTECH LTD. (2010) 4 ITR (TRIB.) 72 (DELHI) WHEREI N SIMILAR PROPOSITION WAS LAID DOWN. RELIANCE WAS PLACED ON THE DECISION OF H ONBLE BOMBAY HIGH COURT IN THE CASE OF ORIENT TRADING CO. LTD. VS. CI T (49 ITR 723 (BOM.) WHEREIN IT WAS HELD THAT THE ASSESSEE SHOULD PRIMA FACIE SHOW THAT THE CASH CREDIT ENTRY IS NOT FICTITIOUS AND THAT THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE. RELIANCE WAS PLACED ON THE DECISION OF MU MBAI ITAT IN THE CASE OF ITO VS. JANAK U. BHATT (2006) 101 TTJ 337 (MUM.) WHEREIN SIMILAR PROPOSITION WAS LAID DOWN. REFERENCE WAS MADE TO TH E DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SOPHIA FINANCE LTD. 70 TAXMANN 69 (DEL.) WHEREIN IT WAS HELD THAT THE AO IS NOT PRECLUDED FR OM MAKING ENQUIRY AS TO THE TRUE NATURE AND SOURCE OF THE CASH CREDIT IN TH E FORM OF RECEIPT OF SHARE APPLICATION MONEY. ACCORDING TO THE LD. D.R., THE D ECISION OF THE DELHI HIGH COURT IN THE CASE OF SOPHIA FINANCE LTD.(SUPRA) WIL L HOLD GOOD EVEN AFTER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F LOVELY EXPORTS LTD. (216 CTR 195 (SC) BECAUSE THE CASE OF LOVELY EXPORTS LTD . (SUPRA) WAS ONLY A DISMISSAL OF THE SLP. BESIDES THE ABOVE, THE LD. D. R. REITERATED THAT THE BURDEN OF PROOF WAS ON THE ASSESSEE AND NON-EXAMINA TION OF WITNESSES BY THE REVENUE WILL NOT BE FATAL TO THE CASE OF THE RE VENUE. 13. IN HIS REJOINDER, THE LD. COUNSEL FOR THE ASSES SEE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ORISSA CEME NT CORPORATION VS. CIT (159 ITR 79) (SC) WHEREIN IT WAS HELD THAT ONCE THE ASSESSEE GIVES THE ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 11 INCOME-TAX PARTICULARS OF THE CREDITORS AND THEIR A DDRESSES, IT WAS FOR THE AO TO MAKE VERIFICATION AND THE ASSESSEE CANNOT BE HEL D NOT TO HAVE DISCHARGED ITS BURDEN OF PROOF OF CASH CREDITS. BESIDES THE AB OVE, RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F LOVELY EXPORTS (P) LTD. (SUPRA) WHEREIN IT WAS HELD THAT ADDITION OF UNEXPL AINED SHARE APPLICATION MONEY CANNOT BE MADE IN THE HANDS OF THE COMPANY BU T ONLY IN THE HANDS OF THE SHAREHOLDERS. 14. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE SU BMISSIONS. AT THE OUTSET IT WILL BE USEFUL TO TAKE A LOOK AT THE LAW WHEN THERE ARE CASH CREDITS IN THE BOOKS OF A COMPANY BY WAY OF INCREASED SHARE CAPITAL. THE APPLICABLE PROVISION OF LAW IN THIS REGARD IS SEC.68 OF THE AC T, WHICH PROVIDES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLA NATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HI M IS NOT, IN THE OPINION OF THE INCOME-TAX OFFICER, SATISFACTORY, THE SUM SO CR EDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. IN A VERY RECENT DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. OASIS HOSPITALITIES PVT.LTD. 333 ITR 119 (DELHI), THE HON BLE DELHI HIGH COURT AFTER CONSIDERING SEVERAL DECISIONS REFERRED TO BY THE LE ARNED D.R. IN HIS ARGUMENTS BEFORE US, SUMMED UP THE APPROACH IN CASE S WHERE CASH CREDITS IN THE BOOKS OF COMPANY BY WAY OF INCREASE IN SHARE CAPITAL IS FOUND: THE INITIAL BURDEN IS UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE SHARE APPLICATION MONEY RECEIVED BY T HE ASSESSEE. IN ORDER TO DISCHARGE THIS BURDEN, THE ASSESSEE IS REQ UIRED TO PROVE (I) THE IDENTITY OF THE SHARE-HOLDER, (II) THE GENUINENESS OF THE TRANSACTION, AND (C) THE CREDITWORTHINESS OF THE SHAREHOLDERS. I N CASE THE INVESTOR/SHAREHOLDER IS AN INDIVIDUAL, SOME DOCUMEN TS WILL HAVE TO BE FILED OR THE SHAREHOLDER WILL HAVE TO BE PRODUCED B EFORE THE ASSESSING OFFICER TO PROVE HIS IDENTITY. IF THE CREDITOR/SUBS CRIBER IS A COMPANY, THEN THE DETAILS IN THE FORM OF REGISTERED ADDRESS OR PAN IDENTITY, ETC., CAN BE FURNISHED. WHEN THE MONEY IS RECEIVED BY CHE QUE AND IS TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE C HANNELS, THE GENUINENESS OF THE TRANSACTION WOULD BE PROVED. OTH ER DOCUMENTS SHOWING THE GENUINENESS OF THE TRANSACTION COULD BE COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHA RE TRANSFER REGISTER, ETC. AS FAR AS THE CREDITWORTHINESS OR FINANCIAL ST RENGTH OF THE CREDITOR/SUBSCRIBER IS CONCERNED, THAT CAN BE PROVE D BY PRODUCING THE BANK STATEMENT OF THE CREDITORS/SUBSCRIBERS SHOWING THAT IT HAD SUFFICIENT BALANCE IN ITS ACCOUNTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 12 CAPITAL. ONCE THESE DOCUMENTS ARE PRODUCED, THE ASS ESSEE WOULD HAVE SATISFACTORILY DISCHARGED THE ONUS CAST UPON HIM. T HEREAFTER, IT IS FOR THE ASSESSING OFFICER TO SCRUTINISE THE SAME AND IN CASE HE NURTURES ANY DOUBT ABOUT THE VERACITY OF THESE DOCUMENTS, TO PROBE THE MATTER FURTHER. HOWEVER, TO DISCREDIT THE DOCUMENTS PRODUC ED BY THE ASSESSEE ON THE ASPECTS, THERE HAVE TO BE SOME COGENT REASON S AND MATERIALS FOR THE ASSESSING OFFICER AND HE CANNOT GO INTO THE REA LM OF SUSPICION. 15. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF C IT VS. CREATIVE WORLD TELEFILMS LTD. 333 ITR 100 (BOM) OBSERVED THAT IF T HE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE-COMPANY FROM ALLE GED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THE N THE DEPARTMENT CAN ALWAYS PROCEED AGAINST THEM AND IF NECESSARY REOPEN THEIR INDIVIDUAL ASSESSMENTS. THE HONBLE COURT FURTHER OBSERVED TH AT IF THE ASSESSEE HAD GIVEN THE DETAILS OF NAMES AND ADDRESSES OF THE SHA REHOLDERS, THEIR PAN/GIR NUMBERS AND HAD ALSO GIVEN THE CHEQUE NUMBERS, NAME OF THE BANKERS. THE ASSESSING OFFICER OUGHT TO HAVE FOUND OUT THEIR DET AILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS SO AS TO REACH THE SHARE-HOLDERS. THE HONBLE COURT FOLLOWED THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF CIT V. LOVELY EXPORTS P. LTD. [2009] 319 IT R (ST.) 5 (SC). 16. IN THE CASE OF LOVELY EXPORTS (SUPRA), THE HON BLE SUPREME COURT DISMISSED SLP AGAINST THE DECISION OF THE HONBLE D ELHI HIGH COURT BY THE REVENUE AGAINST THE JUDGMENT OF THE HONBLE DELHI H IGH COURT IN THE CASE OF CIT VS. DIVINE LEASING & FINANCE LTD. 299 ITR 268(D EL) BY OBSERVING AS FOLLOWS: CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER S.68 OF IT ACT, 1961? WE FIND NO MERIT IN TH IS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE AP PLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMEN T IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN A CCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGED JUDGME NT. SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS DI SMISSED. 17. IN THE CASE OF DIVINE LEASING (SUPRA), THE HON BLE DELHI HIGH COURT SUMMED UP THE APPROACH IN CASES WHERE CASH CREDITS IN THE BOOKS OF COMPANY BY WAY OF INCREASE IN SHARE CAPITAL IS FOUN D AS FOLLOWS: IN THE CASE OF A COMPANY THE FOLLOWING ARE THE PRO POSITIONS OF LAW UNDER SECTION 68. THE ASSESSEE HAS TO PRIMA FACIE P ROVE (1) THE IDENTITY ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 13 OF THE CREDITOR/SUBSCRIBER ; (2) THE GENUINENESS OF THE TRANSACTION, NAMELY, WHETHER IT HAS BEEN TRANSMITTED THROUGH BAN KING OR OTHER INDISPUTABLE CHANNELS ; (3) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER ; (4) IF RELEVANT DETAILS O F THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED T O THE DEPARTMENT ALONG WITH COPIES OF THE SHAREHOLDERS REGISTER, SH ARE APPLICATION FORMS, SHARE TRANSFER REGISTER, ETC., IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSEE ; (5) THE DE PARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY B ECAUSE THE CREDITOR/SUBSCRIBER FAILS OR NEGLECTS TO RESPOND TO ITS NOTICES ; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR/SUB SCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE N OR SHOULD THE ASSESSING OFFICER TAKE SUCH REPUDIATION AT FACE VAL UE AND CONSTRUE IT, WITHOUT MORE, AGAINST THE ASSESSEE ; AND (7) THE ASSESSING OFFICER IS DUTY BOUND TO INVESTIGATE THE CREDITWORTHINESS OF T HE CREDITOR/SUBSCRIBER THE GENUINENESS OF THE TRANSACT ION AND THE VERACITY OF THE REPUDIATION. IN THE CASE OF A PUBLI C ISSUE, THE COMPANY CONCERNED CANNOT BE EXPECTED TO KNOW EVERY DETAIL P ERTAINING TO THE IDENTITY AS WELL AS FINANCIAL WORTH OF EACH OF ITS SUBSCRIBERS. THE COMPANY MUST, HOWEVER, MAINTAIN AND MAKE AVAILABLE TO THE ASSESSING OFFICER FOR HIS PERUSAL, ALL THE INFORMAT ION CONTAINED IN THE STATUTORY SHARE APPLICATION DOCUMENTS. A DELICATE B ALANCE MUST BE MAINTAINED WHILE WALKING THE TIGHTROPE OF SECTIONS 68 AND 69 OF THE INCOME-TAX ACT. THE BURDEN OF PROOF CAN SELDOM BE D ISCHARGED TO THE HILT BY THE ASSESSEE ; IF THE ASSESSING OFFICER HAR BOURS DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTION, HE IS EMPOWERED, TO CARRY OUT THOROUGH INVESTIGATIONS. BUT IF THE ASSESSING OFFICER FAILS TO UNEARTH ANY WRONG OR ILLEGAL DEALINGS, HE CANNOT ADHERE TO HIS SUSPIC IONS AND TREAT THE SUBSCRIBED CAPITAL AS THE UNDISCLOSED INCOME OF THE COMPANY. 18. IN THE LIGHT OF THE LAW LAID DOWN AS ABOVE, LE T US EXAMINE THE EVIDENCE ON RECORD. THE LIST OF DOCUMENTS FILED BY THE ASSESSE E TO SUBSTANTIATE THE INCREASE IN SHARE CAPITAL OF RS.27,61,50,000/- WHIC H HAVE BEEN FILED IN THE PAPER BOOK PAGES 10 TO PAGES 336 AND PAGES 400 TO 5 10 OF THE PAPER BOOK. THE SHARE HOLDERS NAME AND THE NATURE OF THE DOCUM ENTS FILED BY THE ASSESSEE TO SUBSTANTIATE THE IDENTITY, CAPACITY AND GENUINENESS OF THE TRANSACTION ARE GIVEN IN THE CHART ANNEXED TO THIS ORDER. PERUSAL OF THE SAME SHOWS THAT IN RESPECT OF THE 25 DIFFERENT SHAREHOLD ERS, WHO ARE ALL LIMITED COMPANIES, TO WHOM SHARES WERE ALLOTTED, THE ASSESS EE HAD GIVEN COPY OF THE SHARE APPLICATION MADE BY THEM, THE RESOLUTION OF T HE BOARD OF DIRECTORS FOR MAKING INVESTMENTS IN THE SHARES OF THE ASSESSEE, T HE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THESE COMPANIES, ACKNOWL EDGMENT OF RETURN OF INCOME FILED FOR AY 04-05 (EXCEPT IN THE CASE OF PL ATINUM COMMERCIAL PVT.LTD., CUBE TRAFIN PVT.LTD., NEERAV HOLDINGS PVT .LTD., KANODIA VYAPAAR ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 14 CO.PVT.LTD. AND CLIX SECURITIES PVT.LTD.), CERTIFIC ATE OF INCORPORATION OF THESE COMPANIES (EXCEPT IN THE CASE OF GOLDSTONE TRADING CO.PVT.LTD., REALSTONE TRADING CO.PVT.LTD., ABHIFLAX TRACON PVT.LTD., ALLW ORTH COMMODITIES PVT.LTD., GOODVIEW TRADING PVT.LTD., IRIS COMMERCIAL PVT.LTD. , NEERAV HOLDINGS PVT.LTD., APSARA FINTRADE PVT.LTD., COSMIC TRADE AN D INVESTMENT PVT.LTD.). FROM AN ANALYSIS OF THE ABOVE DOCUMENTS, WE FIND TH AT IN THE CASE OF NEERAV HOLDINGS PVT.LTD. WHO IS CLAIMED TO HAVE MADE APPLI CATION FOR ALLOTMENT OF 800 PREFERENCE SHARES OF RS.1,000 EACH AT A PREMIUM OF RS.4,000/- PER SHARE, THE SHARE APPLICATION FORM FOR ALLOTMENT OF 300 SHARES ALONE HAS BEEN FILED. OTHERWISE IN RESPECT OF ALL THE OTHER SHARE HOLDERS THERE IS PROOF OF EITHER FILING RETURN OF INCOME BEFORE INCOME TAX AU THORITIES OR CERTIFICATE OF INCORPORATION ISSUED BY THE REGISTRAR OF COMPANIES. EVEN IN RESPECT OF NEERAV HOLDINGS PVT.LTD., THE APPLICATION FORM FOR ALLOTMENT OF SHARES SHOWS THAT THEY HAVE GIVEN THE INCOME TAX PAN NO. (AABCN 1477C). 19. IN RESPECT OF RECEIPT OF SHARE APPLICATION MON EY OF RS.6,42,00,000 FOR ALLOTMENT OF 12,840 SHARES, FROM 13 DIFFERENT ENTIT IES (ALL ARE LIMITED COMPANIES), THE EVIDENCE PRODUCED BY THE ASSESSEE A RE DISCUSSED ITEMWISE: A) STAR TRAFIN PVT.LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 800 PREFERENCE SHARES AND PAID A SUM O F RS.40,00,000 ALONG WITH THE APPLICATION. THE SUM OF RS.40,00,00 0/- HAD BEEN PAID BY CHEQUE NO.643628 DATED 5.5.2005 DRAWN ON ABN AMR O BANK, BRABOURNE ROAD BRANCH, KOLKATA-1. THE COMPANY IS S TATED TO BE ASSESSED TO INCOME TAX UNDER PAN NO.AADCS5989A. TH E ASSESSEE HAD FILED COPY OF THE APPLICATION FORM FOR ALLOTMEN T OF PREFERENCE SHARES, EXTRACT OF THE MINUTES OF THE BOARD RESOLUT ION AUTHORIZING MR.CHANDRESH KUMAR JAIN, DIRECTOR TO MAKE INVESTMEN TS, CERTIFICATE OF INCORPORATION OF THE COMPANY ON 4.9.96, ACKNOWL EDGEMENT OF HAVING FILED INCOME TAX RETURN FOR A.Y 2006-07 DEC LARING TOTAL INCOME OF RS. 34,349/-, MEMORANDUM AND ARTICLES OF ASSOCIA TION OF THE COMPANY. B)RAJESH VINIMAY & VYAPAR PVT. LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 400 PREFERENCE SHARES AND PAID A SUM OF RS.20,00,000 ALONG WITH THE APPLICATION. THE SUM O F RS.40,00,000/- ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 15 HAD BEEN PAID BY CHEQUE NO.794853 DATED 3.5.2005 DR AWN ON ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLKATA-1. THE C OMPANY IS STATED TO BE ASSESSED TO INCOME TAX UNDER PAN NO.AA BCR 2450B. THIS ASSESSEE HAD ALSO MADE APPLICATION FOR ALLOTME NT OF 1000 PREFERENCE SHARES AND 400 PREFERENCE SHARES AND HAD PAID SUM OF RS.50,00,000/- AND RS.20,00,000/- RESPECTIVELY BY C HEQUE NO.548663 DATED 5/12/2005 AND CHEQUE NO.548671 DATED 7/1/2001 . BOTH THE CHEQUES HAVE BEEN DRAWN ON ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLKATA-1. THE ASSESSEE HAD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINUTES OF THE BOARD RESOLUTION AUTHORIZING MR.NARENDRA KUMAR JAIN, ONE OF ITS DIRECTORS TO MAKE INVESTMENTS ON BEHALF OF THE COMPANY. THE ACKNOWLEDGEMENT OF FILING OF RETURN OF INCOME FOR A.Y 2006-07, WHER EIN GROSS TOTAL INCOME OF RS. 81,573/- HAS BEEN DECLARED HAS ALSO B EEN FILED. CERTIFICATE OF INCORPORATION OF THE COMPANY ON 8/1/ 96, ALONGWITH THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPA NY WAS ALSO FILED. C) HOOGLY VINIMAY PVT. LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 800 PREFERENCE SHARES UNDER TWO DIFFER ENT APPLICATIONS. A SUM OF RS.40,00,000 WAS PAID ALONGWITH THE APPLICAT ION BY TWO CHEQUES FOR RS.20.00 LACS EACH BEARING CHEQUE NO.5 51059 DATED 7/1/2006 AND CHEQUE NO.376956 DATED 3/5/06 BOTH TH E CHEQUES DRAWN ON ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLK ATA-1. THE COMPANY IS STATED TO BE ASSESSED TO INCOME TAX UNDE R PAN NO.AAACH 7761G. THE ASSESSEE HAD FILED COPY OF THE APPLICAT ION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINU TES OF THE BOARD RESOLUTION AUTHORIZING RAJESH JAIN, ITS DIRECTOR TO MAKE INVESTMENTS, CERTIFICATE OF INCORPORATION OF THE COMPANY ON 18/3 /96, ACKNOWLEDGEMENT OF HAVING FILED INCOME TAX RETURN F OR A.Y 2006-07 DECLARING TOTAL INCOME OF RS. 42,624/- ON 23/10/06 HAS ALSO BEEN FILED. BESIDE THE ABOVE MEMORANDUM AND ARTICLES O F ASSOCIATION OF THE COMPANY, DIRECTORSS REPORT AS ON 31/3/06 ALONG WITH AUDITORS REPORT AND BALANCE SHEET AND P&L ACCOUNT AS ON 31/3 /06 ALONGWITH ANNEXURES WAS ALSO FILED. ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 16 D) CHOWDHARY CONSULTANTS PVT. LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 300 PREFERENCE SHARES AND PAID A SUM OF RS.15.00 LACS ALONG WITH THE APPLICATION BY CHEQUE NO.354335 DATED 3.5.2005 DRAWN ON ABN AMRO BANK, BRABOURNE ROAD BRA NCH, KOLKATA-1. THE COMPANY IS STATED TO BE ASSESSED TO INCOME TAX UNDER PAN NO.AABCC1035H. THE ASSESSEE HAD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINUTES OF THE BOARD RESOLUTION DATED 23/8/04 AUTHORIZING MR.CHAND RESH KUMAR JAIN, DIRECTOR TO MAKE INVESTMENTS, CERTIFICATE OF INCORPORATION OF THE COMPANY ON 6/5/96, ACKNOWLEDGEMENT OF HAVING FILED INCOME TAX RETURN FOR A.Y 2006-07 DATED 30/10/06, MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF THE COMPANY HAS ALSO BEEN FILED. E) SUNNY FINCOM PVT. LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 1000 PREFERENCE SHARES AND PAID A SUM OF RS.50.00 LACS ALONG WITH THE APPLICATION BY CHEQUE NO.509741 DAT ED 5.5.2005 DRAWN ON ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLK ATA-1. THE COMPANY IS STATED TO BE ASSESSED TO INCOME TAX UNDE R PAN NO.AAGCS5048H. THE ASSESSEE HAD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINUTES OF THE BOARD RESOLUTION DATED 8/8/04 AUTHORIZING MR.CHANDRESH KU MAR JAIN, DIRECTOR TO MAKE INVESTMENTS, CERTIFICATE OF INCORP ORATION OF THE COMPANY ON 14/7/98, ACKNOWLEDGEMENT OF HAVING FILE D INCOME TAX RETURN FOR A.Y 2004-05 DATED 6/10/04, MEMORANDUM O F ASSOCIATION AND ARTICLES OF ASSOCIATION OF THE COMPANY HAS ALSO BEEN FILED. F) NKP HOLDINGS PVT. LTD.: THIS COMPANY MADE TWO APPLICATIONS FOR ALLOTMENT OF 1000 PREFERENCE SHARES & 400 PREFERENC E SHARES AND PAID A SUM OF RS.70.00 LACS BY TWO CHEQUES VIDE CHEQ UE NO. 996473 DATED 5.5.2005 FOR RS.50,00,000 AND CHEQUE NO.4319 64 DATED 7/1/06 FOR RES.20,00,000 BOTH DRAWN ON ABN AMRO BAN K, BRABOURNE ROAD BRANCH, KOLKATA-1. THE COMPANY IS STATED TO B E ASSESSED TO INCOME TAX UNDER PAN NO.AABCN0557B. THE ASSESSEE H AD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINUTES OF THE BOARD RESOLUTION DATED 28/2/05 AUTHORIZING MR.NARENDRA KUMAR JAIN, DIRECTOR TO MAKE INVESTMENT S, CERTIFICATE OF ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 17 INCORPORATION OF THE COMPANY ON 15/3/91, ACKNOWLED GEMENT OF HAVING FILED INCOME TAX RETURN FOR A.Y 2006-07 DA TED 20/10/2006, MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATI ON OF THE COMPANY HAS ALSO BEEN FILED. G) DABRIWAL INVT.& FINANCIERS PVT. LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 1000 PREFERENCE SHARES AND PAID A SUM OF RS.50.00 LACS ALONG WITH THE APPLICATION BY CHEQU E NO.177482 DATED 5.5.2005 DRAWN ON ABN AMRO BANK, BRABOURNE ROAD BRA NCH, KOLKATA-1. THE COMPANY IS STATED TO BE ASSESSED TO INCOME TAX UNDER PAN NO.AAACD 9089K. THE ASSESSEE HAD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINUTES OF THE BOARD RESOLUTION DATED 15/9/04 AUTHORIZING MR.CHAN DRESH KUMAR JAIN, DIRECTOR TO MAKE INVESTMENTS, CERTIFICATE OF INCORPORATION OF THE COMPANY ON 14/7/98, ACKNOWLEDGEMENT OF HAVING FILE D INCOME TAX RETURN FOR A.Y 2006-07 DATED 20/10/2006, MEMORANDU M OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF THE COMP ANY, DIRECTORS REPORT, AUDITORS REPORT AND AUDITED ACCOUNTS FOR TH E YEAR ENDING 31/3/06 HAS ALSO BEEN FILED. H) REGAL COMMOTRADE PVT. LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 640 PREFERENCE SHARES AND PAID A S UM OF RS.32.00 LACS ALONG WITH THE APPLICATION BY D.D NO.00006 DA TED 22/7/2005. THE ASSESSEE HAD NOT FILED THE PARTICULARS OF PAN O R INCORPORATION CERTIFICATE. THE ASSESSEE HAD FILED COPY OF THE AP PLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINU TES OF THE BOARD RESOLUTION DATED 29/6/03, AUTHORIZING MR.AJAY SING H, DIRECTOR TO MAKE INVESTMENTS AND MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF THE COMPANY HAS BEEN FILED. I) APSARA TREX PVT. LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 1000 PREFERENCE SHARES AND PAID A SUM OF RS.50.00 LACS ALONG WITH THE APPLICATION BY CHEQUE NO.329992 DAT ED 27/7/2005 DRAWN ON ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLK ATA-1. THE COMPANY IS STATED TO BE ASSESSED TO INCOME TAX UNDE R PAN NO.AACCA2015N. THE ASSESSEE HAD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINUTES OF THE BOARD ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 18 RESOLUTION DATED 19/04/2005 AUTHORIZING MR. ITEPR ATA BISWAS & MR.CHANDRESH KUMAR JAIN, DIRECTORS TO MAKE INVESTME NTS, CERTIFICATE OF INCORPORATION OF THE COMPANY ON 11/3/96, ACKNOW LEDGEMENT OF HAVING FILED INCOME TAX RETURN, MEMORANDUM OF ASSO CIATION AND ARTICLES OF ASSOCIATION OF THE COMPANY, DIRECTORS R EPORT, AUDITORS REPORT AND AUDITED ACCOUNTS FOR THE YEAR ENDING 31/ 3/06 HAS ALSO BEEN FILED. J) MACRO LEAFIN PVT. LTD.: THIS COMPANY MADE FOUR APPLICATIONS FOR ALLOTMENT OF 1700 PREFERENCE SHARES AND PAID A SUM OF RS.85.00 LACS ALONG WITH THE APPLICATION BY FOURS CHEQUES VIZ., CHEQUE NO.633238 DATED 10/1/06 FOR RS. 20.00 LACS DRAWN ON ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLKATA-1, CHEQUE NO.003947 DATED 6/1/06 FOR RS.30.00 LACS DRAWN ON STANDARD CHARTED BANK, CHEQUE NO.633236 DATED 6/1/06 FOR RS.20.00 LACS, DRAWN ON ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLKATA-1 AND CHEQUE NO.4459 89 DATED 27//5/05 FOR RS.15.00 LACS DRAWN ON ABN AMRO BANK, BRABOURNE ROAD BRANCH, KOLKATA-1. THE COMPANY IS STATED TO BE ASSESSED TO INCOME TAX UNDER PAN NO.AACCM0345F. THE ASSESSEE H AD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINUTES OF THE BOARD RESOLUTION DATED 10/1/2006 AUTHORIZING MR.HARIAND JAIN, DIRECTOR TO MAKE INVESTMENTS, CERT IFICATE OF INCORPORATION OF THE COMPANY ON 22/8/95, ACKNOWLEDG EMENT OF HAVING FILED INCOME TAX RETURN FOR A.Y 2006-07 DATED 20/10 /2006, MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATI ON OF THE COMPANY HAS ALSO BEEN FILED. K) ANKUR SUPPLIERS PVT. LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 400 PREFERENCE SHARES AND PAID A SUM O F RS.20.00 LACS ALONG WITH THE APPLICATION. THE ASSESSEE HAS NOT FU RNISHED THE PARTICULARS OF BANK, PAN ETC. THE ASSESSEE HAD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES , EXTRACT OF THE MINUTES OF THE BOARD RESOLUTION DATED 30/6/05 AUT HORIZING MR.ANKUSH AGARWAL, DIRECTOR TO MAKE INVESTMENTS. TH E MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF THE C OMPANY HAS BEEN FILED. ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 19 L) LILY ENCLAVE PVT. LTD.: THIS COMPANY MADE AN APPLICATION FOR ALLOTMENT OF 400 PREFERENCE SHARES AND PAID A SUM O F RS.20.00 LACS ALONG WITH THE APPLICATION. THE ASSESSEE HAS NOT FU RNISHED THE PAYMENT DETAILS, PARTICULARS OF BANK, PAN ETC. TH E ASSESSEE HAD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFE RENCE SHARES, EXTRACT OF THE MINUTES OF THE BOARD RESOLUTION DATED 28/6/0 5 AUTHORIZING MR.ANJANI BANGA, DIRECTOR TO MAKE INVESTMENTS, CERT IFICATE OF INCORPORATION OF THE COMPANY ON 24/5/94, ACKNOWLED GEMENT OF HAVING FILED INCOME TAX RETURN, MEMORANDUM OF ASSO CIATION AND ARTICLES OF ASSOCIATION OF THE COMPANY HAS ALSO B EEN FILED. M) BHANU COMPUTRONICES PVT. LTD.: THIS COMPANY MADE TWO APPLICATIONS FOR ALLOTMENT OF 1000 AND 600 PREFEREN CE SHARES AND PAID A SUM OF RS.80.00 LACS ALONG WITH THE APPLICATION BY DD NO.480865 DATED 12/5/05 FRS.50.00 LACS AND DD NO.480884 DATE D 12/05/05 FOR RS. 30.00 LCAS. THE ASSESSEE HAS NOT FILED DET AILS OF BANK, PAN ETC. THE ASSESSEE HAD FILED COPY OF THE APPLICATION FORM FOR ALLOTMENT OF PREFERENCE SHARES, EXTRACT OF THE MINUTES OF THE BO ARD RESOLUTION DATED 11/4/05 AUTHORIZING MR.GOVIND B.SHARMA, DIR ECTOR TO MAKE INVESTMENTS, CERTIFICATE OF INCORPORATION OF THE CO MPANY ON 14/7/98, ACKNOWLEDGEMENT OF HAVING FILED INCOME TAX RETURN FOR A.Y 2006-07 DATED 20/10/2006, MEMORANDUM OF ASSOCIATION AND ART ICLES OF ASSOCIATION OF THE COMPANY HAS ALSO BEEN FILED. 20. WE ARE OF THE VIEW THAT IDENTITY OF THE SHAREH OLDERS HAS BEEN SUFFICIENTLY EXPLAINED BY THE ASSESSEE. THE MODE OF PAYMENT OF APPLICATION MONEY HAS BEEN THROUGH BANKING CHANNELS AND THESE DETAILS ARE AVAILABLE IN THE APPLICATION FORMS. THUS THE GENUINENESS OF THE TRA NSACTION HAS BEEN PRIMA FACIE ESTABLISHED BY THE ASSESSEE. THE ASSESSEE HA S GIVEN THE INCOME TAX PERMANENT ACCOUNT NUMBER (PAN) IN ALMOST ALL THE SH ARE APPLICANTS. THIS WOULD BE PRIMA FACIE PROOF OF THE CREDITWORTHINESS OF THE ASSESSEE. 21. THE HONBLE DELHI HIGH COURT IN THE CASE OF DI VINE LEASING (SUPRA) HAS LAID DOWN THAT IF THE ASSESSEE SATISFIES PRIMA FACI E THE THREE INGREDIENTS AS SET OUT ABOVE THEN WHAT THE AO HAS TO DO. THE HON BLE COURT HAS HELD THAT ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 20 THE ONUS THEREUPON SHIFTS TO THE AO AND HE HAS TO S HOW THAT THE MONEY IN QUESTION IS THAT OF THE ASSESSEE. THE HONBLE COUR T HAS HELD THAT THE ONUS ON THE PART OF THE AO WOULD NOT STAND DISCHARGED IF THE CREDITOR/SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE NOR SHOULD THE ASSESSING OFFICER TAKE SUCH REPUDIATION AT FACE VAL UE AND CONSTRUE IT, WITHOUT MORE, AGAINST THE ASSESSEE AND THE ASSESSIN G OFFICER IS DUTY BOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE CREDITOR /SUBSCRIBER THE GENUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIATION. THE HONBLE COURT HAS ALSO HELD THAT IN THE CASE OF A P UBLIC ISSUE, THE COMPANY CONCERNED CANNOT BE EXPECTED TO KNOW EVERY DETAIL P ERTAINING TO THE IDENTITY AS WELL AS FINANCIAL WORTH OF EACH OF ITS SUBSCRIBE RS. THE COMPANY MUST, HOWEVER, MAINTAIN AND MAKE AVAILABLE TO THE ASSESSI NG OFFICER FOR HIS PERUSAL, ALL THE INFORMATION CONTAINED IN THE STATU TORY SHARE APPLICATION DOCUMENTS. A DELICATE BALANCE MUST BE MAINTAINED WH ILE WALKING THE TIGHTROPE OF SECTIONS 68 AND 69 OF THE INCOME-TAX A CT. THE BURDEN OF PROOF CAN SELDOM BE DISCHARGED TO THE HILT BY THE ASSESSE E ; IF THE ASSESSING OFFICER HARBOURS DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTI ON, HE IS EMPOWERED, TO CARRY OUT THOROUGH INVESTIGATIONS. BUT IF THE ASSES SING OFFICER FAILS TO UNEARTH ANY WRONG OR ILLEGAL DEALINGS, HE CANNOT AD HERE TO HIS SUSPICIONS AND TREAT THE SUBSCRIBED CAPITAL AS THE UNDISCLOSED INCOME OF THE COMPANY. 22. WE SHALL NOW SEE WHAT IS THE EVIDENCE GATHERED BY THE AO AGAINST THE ASSESSEE. IT HAS ALSO TO BE MENTIONED THAT THE DI RECTOR OF THE ASSESSEE WAS EXAMINED BY THE AO AND IN HIS EXAMINATION HE DENIED HAVING GIVEN CASH TO THE COMPANIES WHICH MADE APPLICATION FOR ALLOTMENT OF SHARES OF THE ASSESSEE. THE COPY OF THE STATEMENT OF THE DIRECTO R IS AT PAGE-381 TO 387 OF THE PAPER BOOK. THE OTHER FACTS WITH REGARD TO THE EVIDENCE GATHERED BY THE ASSESSEE ARE IN THE CASE OF THE ASSESSEE ARE IDENTI CAL TO THE CASE OF CHAT COMPUTERS LTD. (SUPRA) AND THE TRIBUNAL HAS ALREADY ANALYSED THE EVIDENCE GATHERED BY THE AO AGAINST THE ASSESSEE AND HAS HEL D AS FOLLOWS: 6. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT TH E ASSESSING OFFICER HAS NOT CONDUCTED ANY INDEPENDENT ENQUIRY DURING TH E ASSESSMENT PROCEEDINGS; BUT SIMPLY RELIED UPON THE REPORT OF T HE ADIT(INV), UNIT 1, KOLKATA AS WELL AS THE STATEMENTS OF THE DIRECTORS OF VARIOUS KOLKATA BASED COMPANIES, WHO HAVE PAID THE APPLICATION MON EY. THE SAID ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 21 INVESTIGATION BY THE ADIT(INV) UNIT 1, KOLKATA WAS NOT CARRIED OUT DURING THE ASSESSMENT PROCEEDINGS; THEREFORE, THE S AID INVESTIGATION WAS NEITHER THE INQUIRY CARRIED OUT DURING THE ASS ESSMENT PROCEEDINGS NOR PART OF THE ASSESSMENT PROCEEDINGS. IT IS CLEAR THAT THE SCRUTINY ASSESSMENT COMMENCED AFTER ABOUT ONE Y EAR FROM THE ALLEGED INVESTIGATION WAS OVER. THE ASSESSING OFFI CER HAS HEAVILY RELIED UPON THE INVESTIGATION REPORT AND PROCEEDINGS AND S PECIFICALLY ON THE POINT THAT THE ASSESSEE WAS GIVEN OPPORTUNITY TO CR OSS EXAMINE THE DIRECTORS OF THE INVESTING COMPANIES, WHO PAID THE APPLICATION MONEY AND FURTHER, THE ASSESSEE WAS ALSO ASKED BY THE ASS ESSING OFFICER TO PRODUCE THE DIRECTORS, WHOSE STATEMENTS WERE RECORD ED BY THE INVESTIGATION UNIT 1, KOLKATA FOR CROSS EXAMINATION OF THEM. 6.1 6.2 SINCE THE INVESTIGATION PROCEEDINGS WERE NOT PA RT OF THE ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE AND EVEN THE INVESTIGATION WAS NOT EITHER U/S 132 OR U/S 133 OF THE I T ACT. IT SEEMS THAT INVESTIGATION BY THE ADIT(INV) UNIT 1, KOLKATA IS PRELIMINARY INVESTIGATION ONLY TO VERIFY THE SUSPICION OF ANY C ONCEALMENT OF INCOME. THE ASSESSING OFFICER, DURING THE COURSE O F ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE TO PRODUCE THE SAID DIRECTORS FOR CROSS EXAMINATION. IT IS EVIDENT FROM THE LETTER OF THE ASSESSING OFFICER DATED 01.10.2008 AS WELL AS DATED 16.9.2008 THAT TH E ASSESSING OFFICER DID NOT SUMMON THESE DIRECTORS TO BE PRESENT IN T HE OFFICE OF THE ASSESSING OFFICER FOR THE PURPOSE OF CROSS EXAMINAT ION BY THE ASSESSEE; BUT ON THE CONTRARY, THE ASSESSEE WAS ASKED TO PROD UCE THESE DIRECTORS FOR CROSS EXAMINATION PURPOSE. THIS IS A GROSS VIO LATION OF PRINCIPLES OF NATURAL JUSTICE WHEN THE ASSESSING OFFICER ASKED TH E ASSESSEE TO PRODUCE THE DIRECTORS FOR AVAILING OPPORTUNITY OF C ROSS EXAMINATION. THE ASSESSING OFFICER RELIED UPON THE STATEMENT OF THE DIRECTORS OF THE INVESTING COMPANY RECORDED DURING THE INVESTIGATION PROCEEDINGS BY THE ADIT(INV) UNIT 1, KOLKATA. INSTEAD OF ENSURING THE PRESENCE OF THESE PERSONS FOR GIVING OPPORTUNITY TO THE ASSESSE E TO CROSS EXAMINE, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THEM, WHICH IN OUR CONSIDERED OPINION IS AN ABSOLUTE UNJUST AND OP POSITE TO THE RULE OF LAW AND WHAT PROCEDURE DEMANDS. THEREFORE, THE RE IS A TOTAL DENIAL OF OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE PERSONS, WHOSE STATEMENTS ARE USED AGAINST THE ASSESSEE. 6.3 FURTHER, WHEN THE DIRECTOR OF THE ASSESSEE CATE GORICALLY DENIED, DURING THE INVESTIGATION, THE ALLEGATION OF GIVING CASH TO THOSE INVESTING COMPANIES THEN THE ONUS IS ON THE REVENUE TO PROVE THAT THE APPLICATION MONEY RECEIVED BY THE ASSESSEE IS ASSE SSES OWN MONEY ROUTED THROUGH THOSE APPLICANTS COMPANIES. THERE IS NO EVIDENCE OR MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER , EXCEPT THE UN- CROSS EXAMINED STATEMENTS OF THE THIRD PARTY, TO SH OW ANY MOVEMENT OF CASH ROUTED BACK TO THE ASSESSEE IN FORM OF APPL ICATION MONEY IN THE ALLEGED ALLOTMENT OF CUMULATIVE PREFERENTIAL SHARES . RATHER, IT IS UNDISPUTED FACT THAT THE APPLICATION MONEY WAS RECE IVED THROUGH ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 22 ACCOUNT PAYEE CHEQUE/BANK DRAFT GIVEN BY THE INVEST ING COMPANIES FROM THEIR RESPECTIVE BANK ACCOUNT. IT IS ALSO AN ACCEPTED FACT THAT SOURCE OF THE APPLICATION MONEY WAS FOUND IN THE BA NK ACCOUNT OF THE INVESTING COMPANIES DEPOSITED THROUGH ACCOUNT PAYEE CHEQUES; THEREFORE, NO CASH TRANSACTION WAS FOUND BY THE ASS ESSING OFFICER IN THE BANK ACCOUNT OF THE INVESTING COMPANIES. 6.4 THE ASSESSING OFFICER DOUBTED THE MOVEMENT OF C ASH FROM THE ASSESSEE AS BEING PASSING THROUGH VARIOUS LEVELS AN D REACHED TO THE ASSESSEE COMPANY. HOWEVER, NO FINDING HAS BEEN GIV EN TO THE EFFECT AS TO HOW THE ALLEGED CASH/MONEY OF THE ASSESSEE COMPA NY ROUTED THROUGH VARIOUS LEVELS FINALLY REACHED TO THE ASSES SEE. NOT AN IOTA OF EVIDENCE OR MATERIAL HAS BEEN BROUGHT ON RECORD TO SHOW EVEN, PRIMA FACIE THAT THE SAID AMOUNT REPRESENTING APPLICATION MONEY MOVED FROM THE ASSESSEE AND REACHED TO THE ASSESSEE. RATHER, DOCUMENTARY EVIDENCE ON RECORD EXHIBITS DIFFERENT FACTS I.E. AS PER BOOKS OF ACCOUNT OF THE ASSESSEE AS WELL AS THOSE OF INVESTING COMPA NIES TOGETHER WITH THE RETURN OF INCOME, BOARD RESOLUTION GO TO PROVE THAT THE SAID APPLICATION MONEY WAS PAID BY THE INVESTING COMPANY TO THE ASSESSEE AGAINST ALLOTMENTS OF THE PREFERENTIAL SHARES. THE INVESTING COMPANIES HAVE SHOWN THE SAID AMOUNT AS INVESTMENT IN THEIR B OOKS OF ACCOUNT. THE MONEY ROUTED THROUGH BANKING CHANNELS AND THROU GH ACCOUNT PAYEE CHEQUES/BANK DRAFT, UNDISPUTED GIVEN BY THE P ARTIES. EVEN, THE SOURCE OF THE APPLICATION MONEY WAS FOUND IN THE BA NK ACCOUNT OF THE INVESTING COMPANIES NOT BY ANY CASH DEPOSIT; BUT TH ROUGH ACCOUNT PAYEE CHEQUES. THEREFORE, WHEN ALL THE DOCUMENTARY EVIDENCE CONTRADICTS THE STATEMENTS OF THE DIRECTORS RECORDE D BY THE INVESTIGATION UNIT OF THE DEPARTMENT THEN SUCH STAT EMENTS ALONE CANNOT BE TAKEN AS THE BASIS MUCH LESS A GOOD OR PR OPER BASIS FOR ANY ADDITION. 6.5 IT IS SETTLED PROPOSITION OF LAW THAT THE STATE MENT RECORDED DURING THE COURSE OF INVESTIGATION WITHOUT CORROBOR ATIVE EVIDENCE HAS NO EVIDENTIARY VALUE. IT IS PERTINENT TO MENTION TH AT THE STATEMENTS RECORDED IN THIS CASE ARE NOT UNDER SEARCH OR SURVE Y OR ASSESSMENT PROCEEDINGS THEREFORE THE SAME CANNOT BE USED AGAIN ST THE ASSESSE WITHOUT FOLLOWING THE DUE PROCESS OF CORROBORATION AND CROSS EXAMINATION. EVEN OTHERWISE, THE STATEMENT WITHOUT CROSS EXAMINATION AND CORROBORATIVE EVIDENCE CANNOT BE USED AGAINST T HE ASSESSEE. 6.6 AS POINTED OUT BY THE LD AR OF THE ASSESSEE TH E CREDIBILITY OF THE STATEMENTS IS ALSO NOT FREE FROM DOUBT AS IT APPEAR S THAT ALL THE STATEMENTS ARE PREPARED BY THE DEPARTMENT IN AN IDE NTICAL FASHION AND MANNER BEFORE THOSE WERE GOT SIGNED ON DIFFERENT DA TES. IT IS APPARENT THAT CERTAIN IDENTICAL MISTAKES ARE APPEARING IN TH OSE STATEMENTS ALLEGEDLY RECORDED ON DIFFERENT DATES. FOR EXAMPLE:- QUESTIONNO.4:- DOES YOU COMPANY HAS TRANSACTION WIT H THE FOLLOWING COMPANIES? IF SO, GIVE DETAILS AND NATURE OF SUCH TRANSACTION: ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 23 THIS MISTAKE DOES YOU IS APPEARING IN QUESTION NO . 4, OF ALL THE STATEMENTS, WHICH SHOWS THAT QUESTIONNAIRE WAS ALRE ADY PREPARED AND ANSWERS WERE ALREADY WRITTEN IN THE SAME MANNER AS IT IS EVIDENT FROM THE ANSWER TO QUESTION NO.6 AS UNDER: QUESTION NO. 6 DO YOU HAVE TO SAY ANYTHING ELSE? ANS: I HAVE GONE THROUGH THE ABOVE STATEMENT AND TH E SAME HAS BEEN RECORDED CORRECTLY AND WITHOUT ANY FABRICATION . THE ABOVE STATEMENT GAS BEEN GIVEN BY ME WITHOUT THE USE OF ANY FORCE, COERCION OR THREAT. THE MISTAKE IN THE ANSWER NO. 6 IS ALSO IDENTICAL I N ALL THE STATEMENTS RECORDED ON DIFFERENT DATES. SINCE THE STATEMENT S WERE RECORDED BY THE INVESTIGATION TEAM OF ADIT(INV) UNIT 1, KOLKATA AND NOT DURING THE PROCEEDINGS BEFORE ANY COURT OF LAW; THEREFORE, ALL THESE FACTS SUGGEST AND INDICATE TO BELIEVE THAT THE SAME ARE NOT RECOR DED AS A VERBATIM OF WHAT THE CONCERNED PERSON STATED; BUT OBTAINED BY T HE DEPARTMENT IN A MECHANICAL MANNER. HOWEVER, WITHOUT GOING INTO V ALIDITY OF THE STATEMENTS WHEN ALL OTHER RECORDS, MATERIAL AND DOC UMENTARY EVIDENCES CONTRADICT AND NULLIFY THE STATEMENTS TH EN THE RELIANCE PLACED BY THE ASSESSING OFFICER ON SUCH STATEMENT I S HIGHLY UNJUSTIFIED AND IMPROPER. 7 EVEN OTHERWISE, IN THE CASE OF THE ASHWANI GUPTA (SUPRA), THE HONBLE DELHI HIGH COURT HAS TAKEN A NOTE OF THE FI NDING OF THE TRIBUNAL IN PARA 2 AS UNDER: 2. THE TRIBUNAL HAS CONFIRMED THE ORDER PASSED BY THE CIT(A) WHICH HELD THE ENTIRE ADDITION MADE BY THE ASSESSIN G OFFICER TO BE INVALID AND HAD DELETED THE SAME. THE CIT(A) HAD CLEARLY HELD THAT THE ASSESSING OFFICER HAD PASSED THE ASSESSME NT ORDER IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE IN A S MUCH AS HE HAD NEITHER PROVIDED COPIES OF THE SEIZED MATERIAL TO T HE ASSESSEE NOR HAD HE ALLOWED THE ASSESSEE TO CROSS-EXAMINE ONE MR . MANOJ AGGARWAL ON THE BASIS OF WHOSE STATEMENT THE SAID A DDITION WAS MADE. THE CIT(A) ALSO HELD THAT THE ENTIRE ADDITION DESERVED TO BE DELETED, PARTICULARLY SO, BECAUSE THE TRANSACTIONS ALSO STOOD DULY REFLECTED IN HIS REGULAR RETURNS. 7.1 THE HONBLE HIGH COURT HAS HELD THAT ONCE THERE IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BY NOT PROVIDING SEIZ ED MATERIAL TO THE ASSESSEE AS WELL AS CROSS EXAMINATION OF THE PERSON S ON WHOSE STATEMENTS, THE ASSESSING OFFICER RELIED UPON, AMOU NTS TO DENIAL OF OPPORTUNITY AND WOULD BE FATAL TO THE PROCEEDINGS. THE HONBLE DELHI HIGH COURT HAS OBSERVED IN PARA 7 AS UNDER: 7. IN VIEW OF THE FOREGOING CIRCUMSTANCES, WE FEEL THAT NO INTERFERENCE WITH THE IMPUGNED ORDER IS CALLED FOR. THE TRIBUNAL HAS CORRECTLY UNDERSTOOD THE LAW AND APPLIED IT TO THE FACTS OF THE CASE. ONCE THERE IS A VIOLATION OF THE PRINCIPLES O F NATURAL JUSTICE IN AS MUCH AS SEIZED MATERIAL IS NOT PROVIDED TO AN AS SESSEE NOR IS CROSS-EXAMINATION OF THE PERSON ON WHOSE STATEMENT THE ASSESSING OFFICER RELIES UPON, GRANTED, THEN, SUCH DEFICIENCIES ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 24 WOULD AMOUNT TO A DENIAL OF OPPORTUNITY AND, CONSEQ UENTLY, WOULD BE FATAL TO THE PROCEEDINGS. FOLLOWING THE APPROACH ADOPTED BY US IN SMC SHARE BROKERS LTD. (SUPRA), WE SEE NO REASON TO INTERFERE WITH THE IMPUGNED ORDER. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. 8 SIMILARLY, IN THE LATEST DECISION, THE HONBLE DE LHI HIGH COURT IN THE CASE OF OASIS HOSPITALITIES P LTD (SUPRA), AFTE R CONSIDERING ALL THE RELEVANT DECISIONS ON THE ISSUE INCLUDING THE DECIS ION OF THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS P LTD ( SUPRA), DECISION OF THE FULL BENCH OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SOPHIA FINANCE LTD REPORTED IN 205 ITR 98 (DEL)(FB) AND TH E DECISION IN THE CASE OF DIVINE LEASING & FINANCE LTD (SUPRA) HAS OB SERVED IN PARAS 11 TO 16 AS UNDER: IT IS CLEAR FROM THE ABOVE THAT THE INITIAL BURD EN IS UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF TH E SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. IN ORDE R TO DISCHARGE THIS BURDEN, THE ASSESSEE IS REQUIRED TO PROVE : (A) THE IDENTITY OF SHAREHOLDER ; (B) THE GENUINENESS OF TRANSACTION ; AND (C) THE CREDITWORTHINESS OF SHAREHOLDERS. 12 IN CASE THE INVESTOR/SHAREHOLDER IS AN INDIVIDUA L, SOME DOCUMENTS WILL HAVE TO BE FILED OR THE SAID SHAREHOLDER WILL HAVE TO BE PRODUCED BEFORE THE AS SESSING OFFICER TO PROVE HIS IDENTITY. IF THE CREDITOR/SUBS CRIBER IS A COMPANY, THEN THE DETAILS IN THE FORM OF REGISTERED ADDRESS OR PAN IDENTITY, ETC., CAN BE FURNISHED. 13 THE GENUINENESS OF THE TRANSACTION IS TO BE DEMONSTRATED BY SHOWING THAT THE ASSESSEE HAD, IN FACT, RECEIVED MONEY FROM THE SAID SHAREHOLDER AND IT CA ME FROM THE COFFERS OF THAT VERY SHAREHOLDER. THE DIVISION BENCH HELD THAT WHEN THE MONEY IS RECEIVED BY CHEQUE AND IS TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS, THE GENUINENESS OF TRANSACTION WOULD BE P ROVED. OTHER DOCUMENTS SHOWING THE GENUINENESS OF TRANSAC TION COULD BE COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHARE TRANSFER REGISTER, ETC. 14 AS FAR AS CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER IS CONCERNED, THAT CAN BE PROV ED BY PRODUCING THE BANK STATEMENT OF THE CREDITOR/SUBSC RIBER SHOWING THAT IT HAD SUFFICIENT BALANCE IN ITS ACCOU NTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE CAPITAL. THIS J UDGMENT FURTHER HOLDS THAT ONCE THESE DOCUMENTS ARE PRODUC ED, THE ASSESSEE WOULD HAVE SATISFACTORILY DISCHARGED THE ONUS CAST UPON HIM. THEREAFTER, IT IS FOR THE ASSESSING OFFICER TO SCRUTINIZE THE SAME AND IN CASE HE NURTURES ANY DOU BT ABOUT THE VERACITY OF THESE DOCUMENTS TO PROBE THE MATTER FURTHER. HOWEVER, TO DISCREDIT THE DOCUMENTS PRODUC ED BY THE ASSESSEE ON THE AFORESAID ASPECTS, THERE HAVE TO BE ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 25 SOME COGENT REASONS AND MATERIALS FOR THE ASSESSING OFFICER AND HE CANNOT GO INTO THE REALM OF SUSPICIO N. 15 AT THIS STAGE, WE WOULD LIKE TO REFER TO THE JUD GMENT OF THE BOMBAY HIGH COURT IN THE CASE OF CIT V. CRE ATIVE WORLD TELEFILMS LTD. (IN I. T. A. NO. 2182 OF 2009 DECIDED ON OCTOBER 12, 2009) [2011] 333 ITR 100. THE RELEVANT PORTION OF THIS ORDER IS REPRODUCED BELOW: 'IN THE CASE IN HAND, IT IS NOT DISPUTED THAT THE ASSESSEE HAD GIVEN THE DETAILS OF NAME AND ADDRESS OF THE SHAREHOLDER, THEIR PA/GIR NUMBER AND HAD ALSO GIVEN THE CHEQUE NUMBER, NAME OF THE BANK. IT WAS EXPECTED ON THE PART OF THE ASSESSING OFFICER T O MAKE PROPER INVESTIGATION AND REACH THE SHAREHOLDERS. THE ASSESSING OFFICER DID NOTHING EXCEPT ISSUING SUMMONS WHICH WERE ULTIMATELY RETURNED BACK WITH AN ENDORSEMENT `NOT TRACEABLE'. IN OUR CONSIDERED VIEW, THE ASSESSING OFFICER OUGH T TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS SO AS TO REACH THE SHAREHOLDERS SINCE ALL THE RELEVANT MATE RIAL DETAILS AND PARTICULARS WERE GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER. IN THE ABOVE CIRCUMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE FAULTED. NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THE APPE AL. IN THE RESULT, THE APPEAL IS DISMISSED IN LIMINE WI TH NO ORDER AS TO COSTS.' ( EMPHASIS SUPPLIED) 16 THE COURT THUS CLEARLY HELD THAT ONCE DOCUMENTS LIKE PAN CARD, BANK ACCOUNT DETAILS OR DETAILS FROM THE BANKERS WERE GIVEN BY THE ASSESSEE , ONUS SHIFTS UPON THE ASSESSING OFFICER AND IT IS ON HIM TO REACH THE SHAREHOLDERS AND THE ASSESSING OFFICER CANNOT BURDEN THE ASSESSEE MERELY ON THE GROUND THAT SUMMONS ISSUES TO THE INVESTORS WERE RETURNED BACK WITH THE ENDORSEMENT 'NOT TRACEABLE' . THE SAME VIEW IS TAKEN BY THE KARNATAKA HIGH COURT IN MADHURI INVESTMENTS PVT. LTD. V. ASST. CIT (IN I . T. A. NO. 110 OF 2004, DECIDED ON FEBRUARY 18, 2006). IN THIS CASE ALSO, SOME OF THE SHARE APPLICANTS DI D NOT APPEAR AND NOTICES SENT TO THEM WERE RETURNED WITH REMARKS 'WITH NO SUCH PERSON'. ADDITION WAS MADE ON THAT BASIS WHICH WAS TURNED DOWN BY THE HIGH COURT IN THE FOLLOWING WORDS : ' 6. HAVING HEARD THE LEARNED COUNSEL FOR THE PARTI ES, WE NOTICE THAT WHENEVER A COMPANY INVITES APPLICATIONS FOR ALLOTMENT OF SHARES FROM DIFFEREN T APPLICANTS, THERE IS NO PROCEDURE CONTEMPLATED TO F IND OUT THE GENUINENESS OF THE ADDRESS OR THE GENUINENESS OF THE APPLICANTS BEFORE ALLOTTING THE SHARES. IF FOR ANY REASON THE ADDRESS GIVEN IN THE ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 26 APPLICATION WERE TO BE INCORRECT OR FOR ANY REASON IF THE SAID APPLICANTS HAVE CHANGED THEIR RESIDENCE O R THE NOTICES SENT BY THE ASSESSING OFFICER HAVE NOT BEEN RECEIVED BY SUCH APPLICANTS, THE ASSESSEE- COMPANY CANNOT BE BLAMED. THEREFORE, WE ARE OF THE VIEW THAT THE TRIBUNAL WAS NOT JUSTIFIED IN ALLOWI NG THE APPEAL OF THE REVENUE ONLY RELYING UPON THE STATEMENT OF SRI ANIL RAJ MEHTA, A CHARTERED ACCOUNTANT.' 8.1 THE HONBLE HIGH COURT FURTHER DISCUSSED THE I SSUE IN PARAS 20 TO 24 AS UNDER: 20 THE OBSERVATIONS OF THE SUPREME COURT IN THE C ASE OF LOVELY EXPORTS P. LTD. [2009] 319 ITR (ST.) 5 (SC) GO TO SUGGEST THAT THE DEPARTMENT IS FREE TO PROCEED TO R EOPEN THE INDIVIDUAL ASSESSMENTS IN THE CASE OF ALLEGED BOGUS SHAREHOLDERS IN ACCORDANCE WITH LAW AND, THUS, NOT REMEDILESS. IT IS, THUS, FOR THE ASSESSING OFFICER TO MAKE FURTHER INQUIRIES WITH REGARD TO THE STATUS OF THE SE PARTIES TO BRING ON RECORD ANY ADVERSE FINDINGS REGARDING T HEIR CREDITWORTHINESS. THIS WOULD BE MORE SO WHERE THE ASSESSEE IS A PUBLIC LIMITED COMPANY AND HAS ISSUED THE SHARE CAPITAL TO THE PUBLIC AT LARGE, AS IN SUCH C ASES THE COMPANY CANNOT BE EXPECTED TO KNOW EVERY DETAIL PERTAINING TO THE IDENTITY AND THE FINANCIAL WORTH OF THE SUBSCRIBERS. FURTHER THE INITIAL BURDEN ON THE ASSE SSEE WOULD BE SOMEWHAT HEAVY IN CASE THE ASSESSEE IS A P RIVATE LIMITED COMPANY WHERE THE SHAREHOLDERS ARE FAMILY FRIENDS/CLOSE ACQUAINTANCES, ETC. IT IS BECAUSE OF THE REASON THAT IN SUCH CIRCUMSTANCE, THE ASSESSEE CANNOT FEI GN IGNORANCE ABOUT THE STATUS OF THESE PARTIES. 21 WE MAY ALSO USEFULLY REFER TO THE JUDGMENT OF TH E SUPREME COURT IN THE CASE OF CIT V. P. MOHANAKALA [2007] 291 ITR 278. IN THAT CASE, THE ASSESSEE HAD RECEIV ED FOREIGN GIFTS FROM ONE COMMON DONOR. THE PAYMENTS W ERE MADE TO THEM BY INSTRUMENTS ISSUED BY FOREIGN BANKS AND CREDITED TO THE RESPECTIVE ACCOUNTS OF THE ASSESSE ES BY NEGOTIATIONS THROUGH BANK IN INDIA. THE EVIDENCE I NDICATED THAT THE DONOR WAS TO RECEIVE SUITABLE COMPENSATION FROM THE ASSESSEES. THE ASSESSING OFFICER HELD THAT THE GIFTS THOUGH APPARENT WERE NOT REAL AND ACCORDINGLY TREA TED ALL THOSE AMOUNTS WHICH WERE CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, AS THEIR INCOME APPLYING SECTION 68 OF THE ACT. THE ASSESSEE DID NOT CONTEND THAT EVEN IF THEI R EXPLANATION WAS NOT SATISFACTORY THE AMOUNTS WERE N OT OF THE NATURE OF INCOME. THE COMMISSIONER OF INCOME-TA X (APPEALS) CONFIRMED THE ASSESSMENT. ON FURTHER APPE AL, THERE WAS A DIFFERENCE OF OPINION BETWEEN THE TWO M EMBERS OF THE APPELLATE TRIBUNAL AND THE MATTER WAS REFERR ED TO THE VICE PRESIDENT WHO CONCURRED WITH THE FINDINGS AND CONCLUSIONS OF THE ASSESSING OFFICER AND THE COMMI SSIONER ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 27 OF INCOME-TAX (APPEALS). ON APPEAL, THE HIGH COURT RE- APPRECIATED THE EVIDENCE AND SUBSTITUTED ITS OWN F INDINGS AND CAME TO THE CONCLUSION THAT THE REASONS ASSIGNE D BY THE TRIBUNAL WERE IN THE REALM OF SURMISES, CONJECT URE AND SUSPICION. ON APPEAL TO THE SUPREME COURT, THE COU RT WHILE REVERSING THE DECISION OF THE HIGH COURT HELD THAT THE FINDINGS OF THE ASSESSING OFFICER, COMMISSIONER OF INCOME- TAX (APPEALS) AND THE TRIBUNAL WERE BASED ON THE MA TERIAL ON RECORD AND NOT ON ANY CONJECTURES AND SURMISES. THAT THE MONEY CAME BY WAY OF BANK CHEQUES AND WAS PAID THROUGH THE PROCESS OF BANKING TRANSACTION AS NOT B Y ITSELF OF ANY CONSEQUENCE. THE HIGH COURT MISDIRECTED ITS ELF AND ERRED IN DISTURBING THE CONCURRENT FINDINGS OF FACT . WHILE DOING SO, THE LEGAL POSITION CONTAINED IN SECTION 68 OF THE ACT WAS EXPLAINED BY THE SUPREME COURT BY ASSESSIN G THAT A BARE READING OF SECTION 68 OF THE ACT SUGGESTS T HAT (I) THERE HAS TO BE CREDIT OF AMOUNTS IN THE BOOKS MAIN TAINED BY THE ASSESSEE ; (II) SUCH CREDIT HAS TO BE A SUM OF MONEY DURING THE PREVIOUS YEAR ; AND (III) EITHER (A) THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDITS FOUND IN THE BOOKS, OR (B) THE EXPLANATION OFFERED BY THE ASSESSEE, IN THE OPINION OF THE ASSESSING OFFIC ER, IS NOT SATISFACTORY. IT IS ONLY THEN THAT THE SUM SO CREDI TED MAY BE CHARGED TOINCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THE EXPRESSION 'THE ASSESSEE OFFERS NO EXPLANATION' MEANS THE ASSESSEE OFFERS NO PROPER, REASONABLE AND ACCEPTABLE EXPLANATION AS REGARDS TH E SUMS FOUND CREDITED IN THE BOOKS MAINTAINED BY THE ASSE SSEE. THE OPINION OF THE ASSESSING OFFICER FOR NOT ACCEP TING THE EXPLANATION OFFERED BY THE ASSESSEE AS NOT SATISFA CTORY IS REQUIRED TO BE BASED ON PROPER APPRECIATION OF MATE RIAL AND OTHER ATTENDING CIRCUMSTANCES AVAILABLE ON THE RECO RD. THE OPINION OF THE ASSESSING OFFICER IS REQUIRED TO BE FORMED OBJECTIVELY WITH REFERENCE TO THE MATERIAL ON RECO RD. APPLICATION OF MIND IS THE SINE QUA NON FOR FORMING THE OPINION. IN CASES WHERE THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE OF THE SUMS F OUND CREDITED IN THE BOOKS IS NOT SATISFACTORY THERE IS , PRIMA FACIE, EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RE CEIPT OF MONEY. THE BURDEN IS ON THE ASSESSEE TO REBUT THE S AME, AND, IF HE FAILS TO REBUT IT, IT CAN BE HELD AGAIN ST THE ASSESSEE THAT IT WAS A RECEIPT OF AN INCOME NATURE . THE BURDEN IS ON THE ASSESSEE TO TAKE THE PLEA THAT EVE N IF THE EXPLANATION IS NOT ACCEPTABLE, THE MATERIAL AND ATT ENDING CIRCUMSTANCES AVAILABLE ON RECORD DO NOT JUSTIFY TH E SUM FOUND CREDITED IN THE BOOKS BEING TREATED AS A REC EIPT OF INCOME NATURE. 22 WE WOULD LIKE TO REFER TO ANOTHER JUDGMENT OF TH E DIVISION BENCH OF THIS COURT IN THE CASE OF CIT V. VALUE CAPITAL SERVICES P. LTD. [2008] 307 ITR 334. THE C OURT IN THAT CASE HELD THAT THE ADDITIONAL BURDEN WAS ON TH E ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 28 DEPARTMENT TO SHOW THAT EVEN IF SHARE APPLICANTS DI D NOT HAVE THE MEANS TO MAKE INVESTMENT, THE INVESTMENT MADE BY THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSE D INCOME OF THE ASSESSEE. IN THE ABSENCE OF SUCH FINDINGS, ADDI TION COULD NOT BE MADE IN THE INCOME OF THE ASSESSEE UND ER SECTION 68 OF THE ACT. 23 IT IS ALSO OF RELEVANCE TO POINT OUT THAT IN CI T V. STELLAR INVESTMENT LTD. [1991] 192 ITR 287 (DELHI) WHERE THE INCREASE IN SUBSCRIBED CAPITAL OF THE RESPONDE NT- COMPANY ACCEPTED BY THE INCOME-TAX OFFICER AND REJE CTED BY THE COMMISSIONER OF INCOME-TAX ON THE GROUND THAT A DETAILED INVESTIGATION WAS REQUIRED REGARDING THE GENUINENESS OF SUBSCRIBERS TO SHARE CAPITAL, AS TH ERE WAS A DEVICE OF CONVERTING BLACK MONEY BY ISSUING SHARES WITH THE HELP OF FORMATION OF AN INVESTMENT WHICH WAS REVERS ED BY THE TRIBUNAL, THIS COURT HELD THAT EVEN IF IT BE A SSUMED THAT THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL WER E NOT GENUINE, UNDER NO CIRCUMSTANCES THE AMOUNT OF SHAR E CAPITAL COULD BE REGARDED AS UNDISCLOSED INCOME OF THE COMPANY. THIS VIEW WAS CONFIRMED BY THE APEX COURT IN CIT V. STELLER INVESTMENT LTD. [2001] 251 ITR 263. 24 HAVING TAKEN NOTE OF THE LEGAL POSITION IN DETAI L, WE NOW PROCEED TO DECIDE EACH APPEAL ON THE APPLICATI ON OF THE AFORESAID PRINCIPLES. I. T. A. NO. 2093 OF 2010 AND I. T. A. NO. 2095 OF 2010 9 IT IS CLEAR FROM THE DECISION OF THE HONBLE DELH I HIGH COURT IN THE CASE OF OASIS HOSPITALITIES P LTD (SUPRA) THAT ONCE THE ASSESSEE FILED COPY OF PAN, ACKNOWLEDGEMENT COY OF THE RETU RN OF INCOME OF THE INVESTING COMPANIES, THEIR BANK ACCOUNTS STATEMENTS FOR THE RELEVANT PERIOD; THEN EVEN THE PARTIES WERE NOT PRODUCED IN SPITE OF THE SPECIFIC DIRECTIONS OF THE ASSESSING OFFICER, THE A DDITION COULD NOT BE SUSTAINED AS THE PRIMARY ONUS WAS DISCHARGED BY THE ASSESSEE BY PRODUCING THE PAN, BALANCE SHEET, COPY OF THE ACKN OWLEDGEMENT COPY OF RETURN OF THE APPLICANTS ETC. 10 IN THE CASE IN HAND, THERE IS NO DISPUTE ABOUT T HE IDENTITY OF THE APPLICANT COMPANIES, WHO HAD PAID THE APPLICATION M ONEY AND THE SOURCE OF THE APPLICATION MONEY WAS ALSO FOUND IN T HE RESPECTIVE BANK ACCOUNTS OF THE INVESTING COMPANIES AND THERE WAS N O TRACE OF CASH DEPOSIT IN THE BANK ACCOUNTS OF THE INVESTING COMPA NIES, THEN, THE ACTION OF THE ASSESSING OFFICER UNDER INFLUENCED OF THE REPORT OF THE INVESTIGATION WING WITHOUT GIVING OPPORTUNITY TO TH E ASSESSEE FOR CROSS EXAMINATION OF THE PERSONS, IS NOT SUSTAINABLE. 11 THE ASSESSING OFFICER HAS RAISED SOME DOUBTS AND SUSPICION ABOUT THE MOVEMENT OF THE MONEY THROUGH VARIOUS LEV ELS BUT COULD NOT ESTABLISH ANY DIRECT OR INDIRECT LINK OF THE SAID O UTWARD MOVEMENT FROM THE ASSESSEE AND THEN AGAIN RECEIVED BY THE ASSESSE E IN THE FORM OF ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 29 APPLICATION MONEY. EVEN THE REVENUE HAS FAILED TO B RING ANYTHING ON RECORD TO SHOW MOVEMENT OF THE ALLEGED CASH FROM TH E ASSESSE. 12 THE HONBLE DELHI HIGH COURT, IN THE CASE OF OAS IS HOSPITALITIES P LTD (SUPRA) IN PARA 33 AND 34 HAS OBSERVED AS UN DER: 33 THE TRIBUNAL WHILE CONFIRMING THE AFORESAID VIE W OF THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS SUMMAR IZED THE DISCUSSION AS UNDER: '9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEF ORE US. THE NECESSARY DETAILS WERE FILED BY THE ASSESS EE WITH THE ASSESSING OFFICER TO SHOW THE IDENTITY OF THE PERSON WHO HAD APPLIED FOR THE SHARES. THE SHARES ALSO BEEN ALLOTTED TO RESPECTIVE PERSONS IN RESPEC T OF WHICH INTIMATION WAS GIVEN TO THE REGISTRAR OF COMPANIES AND NECESSARY EVIDENCE HAS ALSO BEEN PLACED ON RECORD IN THE PAPER BOOK WHICH FOUND PLA CE AT PAGES 23 AND 24 OF THE PAPER BOOK. THE ASSESSEE ALSO HAD PLACED ON RECORD THE EVIDENCE AS WELL AS COPY OF INCOME-TAX RETURNS OF THE SHARE APPLICANTS. KEEPING IN VIEW ALL THESE EVIDENCE IT CANNOT BE HE LD THAT THE ASSESSEE DID NOT ESTABLISH THE IDENTITY O F THE SHARE APPLICANTS. IF IT IS SO, THEN THE LAW AS PRONOUNCED BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. LOVELY EXPORTS P. LTD. [2009] 319 ITR (S T.) 5 IS CLEAR THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE-COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT THE SAME CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. IN THIS VIEW OF THE SITUATION, WE FIND NO INFIRMITY I N THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) VIDE WHICH ADDITION MADE ON ACCOUNT OF SHARE APPLICATION MONEY HAS BEEN DELETED.' 34 HAVING REGARD TO THE DECISIONS NOTED ABOVE, WE A RE OF THE VIEW THAT THE ADDITION WAS RIGHTLY DELETED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBU NAL. REQUISITE DOCUMENTS WERE FURNISHED SHOWING THE EXIS TENCE OF THE SHAREHOLDERS FROM BANK ACCOUNTS AND EVEN THE IR INCOME-TAX DETAILS. FROM BANK ACCOUNTS OF THESE SHAREHOLDERS, IT WAS FOUND THAT THEY HAD DEPOSED C ERTAIN CASH AND SOURCE THEREOF WAS QUESTIONABLE. THE ASSE SSING OFFICER SHOULD HAVE MADE FURTHER PROBE WHICH HE FAI LED TO DO. MOREOVER, THE REMEDY OF THE DEPARTMENT LIES IN REOPENING THE CASE OF THESE INVESTORS AND THE ADDI TION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. THUS IN VIEW OF THE ABOVE OBSERVATION OF HONBLE HI GH COURT WHEN REQUITE DOCUMENT WERE PRODUCED AND AVAILABLE WITH T HE A O TO ESTABLISH THAT NO CASH WAS DEPOSITED IN THE BANK AC COUNTS OF THE ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 30 INVESTING COMPANIES THEN WITHOUT FURTHER PROBE TO P ROVE CONTRARY THE ADDITION IN THE HAND OF THE ASSESSE CANNOT BE MADE. 13.. 13.1.. 13.. 13.1 BEFORE US, THE LD AR OF THE ASSESSEE HAS FORCI BLY URGED THAT IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH COUR T IN THE CASE OF OASIS HOSPITALITIES P LTD (SUPRA) AS WELL AS THE DE CISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF RAJEH BABUBHAI DA MANIA (SUPRA), THE ISSUE MAY BE DECIDED ON MERITS ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. 14 IT IS TO BE NOTED THAT IT IS NOT THE CASE OF ANY ADDITIONAL EVIDENCE OR FRESH MATERIAL PRODUCED BY ANY OF THE PARTIES BE FORE US WHICH REQUIRES EXAMINATION OR INVESTIGATION TO VERIFY THE CORRECTNESS OF THE NEW FACTS FIRST TIME BROUGHT BEFORE US. THE CASE OF THE REVENUE IS THAT THE CASH MOVED FROM THE ASSESSE ROUTED THOUGH VARIO US LEVELAND THEN REACHED TO THE ASSESSE IN THE FORM OF SHARE APPLICA TION MONEY. THE STAND OF THE REVENUE IS NOT IN CONSONANCE WITH THE STATEMENTS OF THE DIRECTORS OF THHE INVESTING COMPANIES WHICH IS THE BASIS OF THE INVESTIGATION REPORT AS WELL AS ADDITION BY THE AO. IN THEIR STATEMENTS THE DIRECTORS STATED TO HAVE RECEIVED CASH FROM ASS ESSE FOR INVESTING IN THE PREFERENTIAL SHARE OF THE ASSESSE COMPANY, WHER EAS, THIS FACT WAS NOT FOUND TO BE CORRECT FROM THE RECORD AND THE REV ENUE ALSO TOOK A STAND THAT THE CASH WAS NOT DIRECTLY GIVEN TO THE I NVESTING COMPANIES BUT ROUTED THROUGH VARIOUS LEVELS. WHEN IT WAS FOUN D BY THE INVESTIGATING UNIT AS WELL AS RECORDED BY THE AO TH AT THE FUND IN THE BANK ACCOUNT OF THE INVESTING COMPANIES WAS DEPOSIT ED THROUGH A/C PAYEE CHEQUES THAN IT IS APPARENT THAT THE STATEMEN TS OF THE DIRECTORS ARE IN TOTAL CONTRADICTION OF THE FACTS EMERGED FRO M THE RECORD AS WELL AS STAND OF THE REVENUE. HENCE THE SAID STATEMENTS DO NOT SUPPORT THE CASE OF THE REVENUE AND THE RELIANCE PLACE BY THE A O ON SUCH STATEMENTS IS HIGHLY MISPLACED AND IMPROPER. WHEN THE STAND OF THE REVENUE IS IN TOTAL CONTRACTION OF THE MATERIAL ON RECORD THEN THEN IN VIEW OF THE LATEST DECISION OF THE HONBLE DELHI HI GH COURT IN THE CASE OF OASIS HOSPITALITIES P LTD (SUPRA), WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE CAN BE DECIDED ON MERIT AND NEED NOT TO BE REMAND TO THE RECORD OF THE AO BECAUSE AT THE TIME OF THE ORD ER FOR THE AY 2005- 06, THE COORDINATE BENCH OF THE TRIBUNAL WAS NOT HA VING THE BENEFIT OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE CITED SUPRA. FURTHER IN VIEW OF THE DECISION OF HONBLE GUJRAT HIGH COURT IN CASE OF RAJEH BABUBHAI DAMANIA (SUPRA), WE SEE NO REASON FO R GIVING THE A.O. ANY FURTHER INNINGS TO FILL UP THE LACUNAS OR LAPSE S IN THE ASSESSMENT WHICH WOULD CAUSE A GREAT INJUSTICE TO THE ASSESSE. 15 IN VIEW OF THE ABOVE DISCUSSION AND THE FACTS AN D CIRCUMSTANCES OF THE CASE, THE SHARE APPLICATION MONEY CANNOT BE TREATED AS INCOME OF THE ASSESSEE COMPANY UNTIL AND UNLESS IT IS PROV ED BEYOND DOUBT ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 31 THAT THE ASSESSES OWN MONEY HAS COME BACK THROUGH SOME CLOSELY RELATED APPLICANT. ONCE THE IDENTITY OF THE APPLIC ANT IS DISCLOSED AND FOUND AS CORRECT THEN, EVEN IF THE SAID TRANSACTION IS SUSPECTED BY THE REVENUE AUTHORITIES, THE SAME CANNOT BE TREATED AS INCOME OF THE ASSESSEE COMPANY WHICH IS A PUBLIC LIMITED COMPANY. ACCORDINGLY, WE DELETE THE ADDITION MADE BY THE ASSESSING OFFICER A ND CONFIRMED BY THE CIT(A) ON THIS ACCOUNT. HOWEVER, WE MAY CLARIFY TH AT OUR FINDINGS ON THE ISSUE ARE BASED ON PARTICULAR FACTS OF THIS ASS ESSMENT YEAR AND THEREFORE, WOULD NOT AFFECT THE RESPECTIVE RIGHTS O F THE PARTIES FOR THE OTHER ASSESSMENT YEARS. 23. THE ABOVE OBSERVATIONS OF THE TRIBUNAL IN OUR VIEW ARE SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE ALSO AS THE STATEMENT OF THE DIRECTORS OF THE COMPANIES WHO APPLIED FOR SHARES WERE ALSO S IMILAR IN THE CASE OF THE ASSESSEE AS WELL AS THE CASE OF CHAT COMPUTERS (SUP RA). THE ORDER OF THE AO AS WELL AS THAT OF THE CIT(A) IN BOTH THE CASES ARE VERBATIM THE SAME. 24. APART FROM THE ABOVE, WE ALSO FIND THAT THE AS SESSEE HAS FILED BEFORE THE REGISTRAR OF COMPANIES RETURN OF ALLOTMENT IN RESPE CT OF THE SHARES WHICH WERE ALLOTTED TO THE APPLICANTS AND THE SAME HAS BE EN TAKEN ON FILE BY THE REGISTRAR OF COMPANIES. PERUSAL OF THE SAME REVEAL S THAT THE SHARES ALLOTTED TO THE VARIOUS COMPANIES TOTALING RS.27,61,50,000/- HAS BEEN DULY SHOWN AS SHARES ALLOTTED IN THOSE RETURNS. THE OBJECTIONS R AISED BY THE LEARNED D.R. BEFORE US AT BEST COULD RAISE DOUBTS ABOUT THE SATI SFACTION OF THE THREE CONDITIONS FOR ACCEPTING CREDIT ENTRY IN THE BOOKS OF ACCOUNTS. THOSE OBJECTIONS CANNOT BE THE BASIS TO HOLD THAT THE ASS ESSEE HAS NOT SATISFACTORILY EXPLAINED CREDIT ENTRY IN ITS BOOKS OF ACCOUNTS. THE INVESTIGATION REFERRED TO BY THE AO IN THE ORDER OF ASSESSMENT, AS WE HAVE ALREADY SEEN HAS BEEN HELD BY THE TRIBUNAL IN THE C ASE OF CHAT COMPUTERS (SUPRA) TO BE INSUFFICIENT TO HOLD THAT THE CREDITS IN QUESTION WERE UNEXPLAINED. WE ARE THEREFORE OF THE VIEW THAT THE ADDITION OF RS. 27,61,50,000/- BEING THE SHARE CAPITAL RECEIVED BY THE ASSESSEE DURING THE PREVIOUS YEAR FOR WHICH ALLOTMENT OF SHARES WERE MA DE AND THE SHARE APPLICATION MONEY RECEIVED PENDING ALLOTMENT OF RS. 6,42,00,000 CANNOT BE TREATED AS UNEXPLAINED AND THE ADDITION MADE IN THI S REGARD IS DIRECTED TO BE DELETED. ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 32 23. GROUND NO.2 WAS NOT PRESSED AND GR.NO.3 WITH R EGARD TO CHARGING OF INTEREST U/S.234-B IS PURELY CONSEQUENTIAL AND THE AO IS DIRECTED TO GIVE CONSEQUENTIAL RELIEF. 24. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED ON THE 19 TH DAY OF OCTOBER, 2011. SD/- SD/- (P.M. JAGTAP) (N.V. VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH OCTOBER, 2011. COPY TO : 1. ASSESSEE. 2. DEPARTMENT. 3 CIT(A), CENTRAL-VII,MUMBAI. 4 CIT, CENTRAL-IV,MUMBAI. 5.DR,F BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. VM. ITA NO.3852/MUM/2009 NETSCAPE SOFTWARE LTD 33 DETAILS DATE INITIALS DESIGN ATION 1. DRAFT DICTATED ON 26-09-11 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 4/10/11 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/A M 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER