Income Tax Officer, Ward-4(1)(1), Ahmedabad V. Tradebulls Holdings Private Limited, Ahmedabad

ITA 408/AHD/2022

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9341 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-12-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 27-10-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIDARSISUMANRATNAM
• Assessee Lawyers: SHRISNSOPARKAR
• Keywords: TDS

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनायपीप INTHEINCOMETAXAPPELLATETRIBUNAL, “B”BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRISIDDHARTHANAUTIYAL,JUDICIALMEMBER आयकरअपीलसं ./ITANo.408/Ahd/2022 With C.ONo.33/Ahd/2022 निर्धररवरध/Asstt.Year:2018-19 IncomeTaxOfficer, Ward-4(1)(1), Ahmedabad. Vs. TradebullsHoldingPrivateLimited, TradebullsHouse, SindhubhawanRoad, Bodakdev, Ahmedabad-380054. PAN:AAFCT2243L (Applicant)(Respondent) Revenueby:ShriDarsiSumanRatnam,CIT.D.R Assesseeby:ShriSNSoparkar,A.R सुिव्ईकीत्रीख /DateofHearing:14/12/2023 घोरर्कीत्रीख /DateofPronouncement:29/12/2023 आदेश /ORDER PERBENCH: ThecaptionedappealandC.Ohasbeenfiledattheinstanceofthe RevenueandtheAssesseeagainsttheorderoftheNationalFacelessAppeal Centre(NFAC)Delhi,(inshort“Ld.CIT(A)”)arisinginthematterofassessment orderpassedunders.143(3)oftheIncomeTaxAct1961(here-in-afterreferred toas"theAct").TheassesseehasfiledC.Oinrevenue’sappealbearingITA No.408/Ahd/2022relevanttotheAssessmentYear2018-19. ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 2 2.Therevenuehasraisedfollowinggroundsofappeal: (a)TheLd.CIT(A)haserredinlawandonfactsindeletingtheadditionofRs. 14,00,00,000/-madeonaccountofunexplainedcashcreditsu/s68oftheAct. (b)Onthefactsandcircumstancesofthecase,LdCIT(A)oughttohaveupheldtheorder oftheAssessingOfficer. (c)Itis,therefore,prayedthattheorderofLdCIT(A)maybesetasideandthatofthe AssessingOfficerberestored. (d)Theappellantcravesleavetoadd,alterand/ortoamendalloranyoftheground beforethefinalhearingoftheappeal. 3.TheonlyissueraisedbytheRevenueisthatthelearnedCIT(A)erredin deletingtheadditionofRs.14croresmadeundersection68oftheActonaccount ofcreditofpreferencesharecapital. 4.Thefactsinbriefarethattheassesseeinthepresentcase,aprivate company,isholdingstrategicinvestmentsinsubsidiariesandassociatecompanies aswellasprovidingconsultancyandotherservicestothegroupcompanies.The assesseeduringtheyearallotted1.4croreconvertiblepreferenceshares@Rs.10 eachtoM/sCapaxoLogisticsPvtLtd(hereafterCLPL)andtheproceedsfrom impugnedallotmentofpreferenceshareswereutilizedformakinginvestmentinor extendingloanstosubsidiarygroupcompanies.TheAOfoundthattheinvesting companywasshowingverymeagerincomeinthelastthreeassessmentyearsand theprofitdeclaredwasalsoverylowascomparedtogrossrevenuedeclared.The amountcreditedfromtheinvestorcompanywasimmediatelydebitedtoother companies.Therefore,theAOwasoftheviewthatthegenuinenessoftransaction wasalsonotestablishedbasedonsurroundingcircumstancesandhuman probabilities.Thedocumentaryevidenceplacedonrecordcannotbeblindlyrelied uponforholdingthegenuinenessoftransactioninthelightoftheprevalent conceptofpapercompanies.Thus,theAOheldthattheassesseefailedto establishthecreditworthinessofthepartyandgenuinenessoftransaction. Accordingly,theAOtreatedtheamountofpreferencesharecapitalforRs.14 ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 3 croresasunexplainedcashcreditundersection68oftheActandaddedtothe totalincomeoftheassessee. 5.Onappealbytheassessee,thelearnedCIT(A)foundthattheassessee duringtheassessmentproceedinghadprovidedfollowingdetails: (a)Auditedfinancialstatementofinvestorcompanyi.e.CLPLfor3years. (b)ITRofCLPLfor3years. (c)BankstatementofCLPLfor3years. (d)Form26ASofCLPL. (e)BoardresolutionpassedbyCLPLformakinginvestmentinassessee company. (f)MCAfilingregardingallotmentofpreferenceshares. (g)Sharescertificateetc. 5.1ThelearnedCIT(A)furthernoticedthattheinvestorcompanyCLPLwas incorporatedintheyear2003andhasbeenengagedinthebusinessofproviding warehousingfacilityandhavingshareholderfundofRs.14.80croresattheendof yearunderconsideration.Theinvestorcompanyhasgraduallyreducedits warehousingfacilitybusinessanditsidlefundintheformofshareholderfundhas beeninvestedinassesseecompany.Further,theinvestorcompanyhasextended certainloans&advancesintheFY2016-17whichwerereceivedbackintheFY 2017-18(yearunderreview)andthesamehasbeenutilizedformaking investmentinassesseecompany.ThelearnedCIT(A)inviewoftheabovefacts andafterreferringtovariouscaselawsheldthattheAOfailedtoappreciatethe documentaryevidenceprovidedbytheassesseeandaccordinglydeletedthe additionmadebytheAO.TherelevantfindingofthelearnedCIT(A)readsas under: 6.2.3Ihaveattentivelyperusedthewrittensubmissionwithreferencetothedocuments uploadedwhichhavebeenplacedbeforetheAssessingOfficerduringtheassessment proceedings.Ifindthattheincometaxreturns,financialstatements&Form26ASof accountingyears2015-16,2016-17&2017-18relevanttoassessmentyears2016-17, 2017-18&2018-19andstatementofbankaccountNo.00060340023388maintainedwith ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 4 HDFCBankofM/s.CapaxoLogisticsPrivateLimitedhaveadequatelyestablishedthe identityoftheinvestor,M/s.CapaxoLogisticsPrivateLimited.Further,thebalancesheetof A.Y.2018-19showsthatM/s.CapaxoLogisticsPrivateLimitedhasownfundatRs.14.70 crores.AsperP&La/c,totalreceiptscreditedcomprisesof62,61,149/-fromsalesof servicesandRs.1,56,87,018/-ofinterestreceipts.Form26ASexhibitsreceiptssubjectedto TDSu/s.194A,194IB&194Jfrom17parties.Goingbytheabove,Ifindmeritinthe contentionofappellantthat,theinvestorcompany,viz.,M/s.CapaxoLogisticsPrivate Limitediscreditworthy. 6.2.4Further,itisseenfromtheperusalofthestatementsofbankaccount,M/s.Capaхо LogisticsPrivateLimited,hastransactionsofvaryingamountsofloansgivenandreceived atintervaloftimethroughouttheaccountingyearrelevanttoimpugnedassessmentyear, 2018-19andthefundsforacquiringthepreferentialshareoftheappellantcompanyhas beentransferredtoappellant'saccountbyaccountpayeecheque.IntheAnnexureto IndependentAuditor'sReportdated4thSeptember2018,atClauseNo.13,itisstatedthat "thecompanyhasenteredintotransactionswithrelatedpartiesincompliancewiththe provisionsofsection177and188oftheAct.Thedetailsofsuchrelatedtransactionshave beendisclosedinthefinancialstatementsasrequiredunderAccountingStandard(AS)18, RelatedPartyDisclosurespecifiedundersection133oftheAct,readwithRule7ofthe Companies(Accounts)Rules,2014.Besidesthesharecertificatedated22September2017 issuedtoM/s.CapaxoLogisticsPrivateLimitedandresolutionpassedatthemeetingof BoardofDirectorsoftheappellantheldon13thdayofJanuary2020toprocess dematerialisationofsharesindicatesthatM/s.CapaxoLogisticsPrivateLimitedhas acquireditspreferencesharesatRs.14,00,00,000/-andistheholderofthesameason 13.01.2020.Dematerialisationistheprocessofconvertingphysicalsharesintoelectronic format.Aninvestorwhowantstodematerialisehissharesneedstoopenademataccount withDepositoryParticipant.Investorsurrendershisphysicalsharesandinturngets electronicsharesinhisdemataccount.Alltheseestablishthegenuinenessofthe transaction.Consideringtheabovefactsanddocuments,Iamoftheopinionthatappellant hasdischargedtheinitialonuscastontheAssesseetoestablishbycogentevidencethe identity.genuinenessofthetransaction,andcreditworthinessoftheinvestorsasper requirementofSection68oftheAct,1961.Asamatteroffact,alltheabovedocuments havebeensubmittedtotheAssessingOfficerduringtheassessmentproceedingsas broughtoutintheassessmentorderandstatedinthewrittensubmissionoftheappellant filedduringtheappellateproceedings.Inthesaidfactsandcircumstances,iftheAssessing Officerwasdissatisfiedwiththeexplanationanddocumentssubmittedregardingthe aforesaidtransactionsofpreferencesharesacquiredbythesaidinvestor,itwasforthe AssessingOfficertoresorttotherelevantprovisionsoftheIncomeTaxActsuchas Sections131,133(6)etc.tomakefurtherenquiriesandinvestigationwhichhasnotbeen doneinthiscase.Itisnotunderstoodorelaboratedintheassessmentorderunderwhat contexttheAssessingOfficerstatedinPara5,page6oftheassessmentorder,that "..........duringthecourseofVideoConferencing,theARoftheassesseeexplainedthe issuesregardingidentity.genuinenessandcreditworthinessofthetransactions.Thesame hasbeenconsideredbutfoundpartiallytrue." 6.2.5Inthisregard,recentlyinthecaseofPrincipalCommissionerofIncome-taxvs.Gopal Heritage(P.)Ltd.[2021]133taxmann.com173(Gujarat),[2022]284Taxman,406,the Hon'bleGujaratHighCourtinitsorderdated13.09.2021adjudicatedthefollowing substantialquestionsoflawraisedintheaforesaidappealasunder: "(A)WhethertheAppellateTribunalhaserredinlawonfactsindeletingtheadditionofRs. 3,25,29,000/-madeundersection68oftheActonaccountofunexplainedcashcreditin thenatureofunsecuredloanreceivedfromthreeentities,namely,ShaanLeisureLtd., GSMInfraProjectsLtd.andManibhadraTradelinkPvt.Ltd.? ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 5 (B)WhethertheAppellateTribunalhaserredinnotappreciatingthatmerefactumoffiling returnofincomedoesnotipsofactolendscredencetothecreditworthinessofaparty? (C)WhethertheAppellateTribunalhaserredinlawandonfactsindeletingtheaddition byignoringthatthelendershadfiledReturnofIncomedeclaringverymeagre taxable/operationalincomewhichcastsaspersionsonthecapacityofsuchlendersto advancesuchhugeamountstotheassessee?" 4.WecouldnoticethattheassesseeandtheRevenuepreferredcrossappealsagainstthe orderofCIT(Appeals),Ahmedabad-IIfortheassessmentyear2012-13.InRevenue's appeals,theTribunalexaminedthegrievanceoftheRevenueofCIT(Appeals)having deletedtheadditionofRs.4,03,34,000/-whichwasaddedbytheAssessingOfficerwith theaidofsection68oftheAct.ItwasrevealedtotheAssessingOfficerthatassesseehad takenunsecuredloansofthesaidamountfromthefollowingpersons:-(1)MitG.Shah- Rs.5,75,000/-,(2)SejalShah-Rs.67,30,000/-,(3)ShaanLeisureLtd.-Rs.1,07,05,000/-, (4)GSMInfraProjectsLtd.-Rs.92,60,000/-,(5)YuvaSportsAcademyPvt.Ltd.-Rs. 5,00,000/-,and(6)ManibhadraTradelinkPvt.Ltd.-Rs.1,25,64,000/-.TheAssessing Officerdirectedtosubmittheidentityofthecreditors,theircreditworthinessand genuinenessofthetransactionsandsincewhenhedisbelievedthecreditworthinessofthe creditors,hemadetheadditions. 4.1TheCIT(Appeals),ascouldbenoticed,threadbareexaminedtheentirematerialin caseofeachofthesepersonsandentitiesandeventuallyheldthattheidentityofthe depositorshadbeenprovedastheyhadfiledthereturnofincomealongwiththePAN. Moreover,loanshavebeengrantedthroughbankingchannelsandinrespectofthesame copyofthebankstatementalsohasbeenprovidedandhence,genuinenessalsohasbeen believedbytheCIT(Appeals)andfurtherthereturnofincomehadbeenfiledbythesaid depositorsandhence,thecreditworthinessalsohasbeenproved.Theappellantprovideda copyofauditedbalancesheetandprofitandlossaccountfortheyearunderconsideration inrespectofdepositorstotheAssessingOfficerandafterverification,theAssessingOfficer hastheonlyobjectionthatthecompanywasnothavingfreshfundsinitsbooksof accountsandnegligibleoperationalincomewasderived. 4.2TheCIT(Appeals)hasrightlyopinedthatsincethedepositorcompanyhadduly recordedthedeposits/loansgiventotheappellantinitsbooksofaccountsoutofitsown fundsorborrowedfunds,noadditioninthehandsoftheappellantispermissiblesofaras thetransactionsarerecordedinthebooksofdepositorcompany. 4.3ItreliedonthejudgmentoftheApexCourtincaseofCITv.OrissaCorpn.(P.)Ltd. [1986]25Taxman80F/159ITR78toholdthatoncetheappellantdulydischargesthe primaryonuscastuponitbymakingavailablethedetailsandcopiesofsupporting documentsintheformofconformation,copyofbankaccountandreturnofincome,itis fortheAssessingOfficerthentomakefurtherinquiresthroughissuingsummonsand noticesundersection133(6)tothedepositorsforfurtherverification,whichintheinstant case,hasnotbeendoneandforwhichtheappellantcouldnotbeheldresponsible.Incase ofeverypersonandentity,ithasgoneintothesedetailsandaccordinglyallowedthe appealoftheappellant. 4.4TheITATondetailedrepresentationofthis,concludedthus:—"11.Aperusalofthe findingoftheld.CIT(A)extracted(supra)itwouldrevealthattheld.CIT(A)hasexamined eachtransactionindetailinthelightofconditionsenumeratedinsection68.Forexample, inthecaseofShriMitGopalbhaiisconcernedasumofRs.5,75,000/-wastakenbythe assesseeasunsecuredloanduringthisyear.Theld.CIT(A)asamatterfactfoundthat ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 6 therewasanopeningbalanceason1-4-2011atRs.1,77,24,000/-.Sourceofthisopening balancewasnotdoubtedintheearlierassessmentyear.Hehasconfirmedthetransaction. Hehasgivenhisidentityandotherdetails.Theld.CIT(A)wasoftheviewthatwhensuch ahugeamountreceivedfromthispersoninthelastyearcanbetreatedasgenuine,then whytodoubtasmallamountofRs.5,75,000/-inthisyear.Itisalsopertinenttonotethat theassessmentorderofShriMitG.ShahfortheAsstt.Year2012-13passedundersection 143(3)r.w.s.147oftheActhasbeenplacedonrecordbytheld.DR.Thisorderhasbeen passedon3-10-2019i.e.afterdecisionoftheld.CIT(A)andnothingadversecouldbe collectedbytheAO.Similarly,theld.CIT(A)hasexaminedthefactswithregardtoSejalG. Shahandobservedthattheassesseehasfulfilledallnecessaryconditionscontemplatedin section68oftheAct.Wealsofindthattheld.CIT(A)hasexaminedthesedetailsinlight ofdecisionsoftheHon'bleGujaratHighCourtaswellasofHon'bleSupremeCourt.Theld. CIT(A)hasmadereferencetotheratiooflawlaiddowninallthesedecisionsfrompages no.22to27oftheimpugnedorder,andwehavegonethroughthepropositioninthese decisionsandexaminedastohowtheld.CIT(A)hasappreciatedthefactsofthe assessee'scaseinthelightofthesepropositions.Afterlookingtothewellreasonedfinding oftheld.CIT(A)coupledwithabsenceofanyincriminatingevidenceinthesubsequent assessmentordersofthecreditors,weareoftheviewthatnointerferenceiscalledforin thefindingoftheld.CIT(A).ThisgroundofRevenueisdismissed." 5.Wecouldnoticetheconcurrentfindingsofboththeauthoritiesonfactswhichdeserve nointerferencefromthisCourt.TheITATasafinalfactfindingbody,inabsenceofany materialundersection133(6)withtheAO,haschosentoupholdtheversionof CIT(Appeals)whichalsoelaboratelytreatedthematerialevidenceandconcludedwith soundreasoning.Wedonotseeanyreasonforustointerfereasadditioncontemplation wasundersection68oftheITActwhichprovidesthatanysumfoundcreditedinthe booksofaccountofanassesseemaintainedforanypreviousyearandiftheassesseedoes notofferanyexplanationaboutthenatureandsourcethereoforevenwhenexplanationis givenandtheAssessingOfficer(AO)isdissatisfied,thesumshowncreditedinthe accountscanbequestionedbyhim.Alltheingredientscontemplatedundersection68 havebeendulysatisfiedontheaspectofidentityofthecreditors,genuinenessofthe transactionsandtheircreditworthiness.6.WeseenoreasontoentertainthisTaxAppeal whichisinliminedismissed.” 6.2.6Takingintoconsiderationthefactsofthecaseandthedocumentsonrecordas discussedintheforegoingparasandplacingrelianceonthedecisionheldinthecaselaw citedaboveinPara6.2.5,inmyconsideredopiniontheadditionof14croresmadeunder section68oftheIncomeTaxActisnotsustainable.I,therefore,directtheAssessing Officertodeletetheadditionof14croresmadeundersection68.Accordingly,ground2is allowed. 6.ThelearnedDRbeforeussubmittedthattherewasnotenoughcredit worthinessofthepartyjustifyingtheinvestmentintheassesseecompanyby acquiringtheshares.Furthermore,thetransactiononhandisacircular transaction.Therefore,thegenuinenessofthetransactionisnotfreefromdoubt. Likewise,thereisanincreaseofloanofthepartyinthebooksoftheassesseeas evidentfromthefinancialstatementoftheassessesandthepartywhichare availableinthepaperbook.Butthesamewasnotverifiedandthereforethe ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 7 mattershouldbesetasidetotheAOforfreshverification.Theld.DRsupported theorderoftheAO. 7.Ontheotherhand,thelearnedARbeforeusfiledapaperbookrunning frompages1to271andcompilationofcaselaws.Itwascontendedbytheld.AR thattheassesseehasdischargedtheonusimposedundersection68oftheActby furnishingthenecessarydetails,justifyingtheidentity,creditworthinessand genuinenessofthetransactions.Besidestheabove,itwasalsosubmittedbythe ld.ARthattherewasrunningaccountbetweentheassesseeandthepartyas evidentfromtheledger.Therefore,thetransactiononhandcannotberegarded ascirculartransaction.Nevertheless,thecirculartransactiononhandcannotbe treatedasunexplainedcashcreditundersection68oftheAct.Theld.AR supportedtheorderoftheld.CIT-A. 8.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Theissueonhandhasbearingontheprovisionof section68oftheAct.Theprovisionofsection68oftheActsuggeststhatifthere isanysumcreditedinthebooksofaccountmaintainedforanypreviousyear, thentheassesseeisrequiredtoofferproperandreasonableexplanation regardingnatureandsourcesofsuchcredittothesatisfactionoftheAO.Thus, theprimaryonuslieswiththeassesseetoexplainthesourceofcreditinthebook ofaccounts.Overtheperiod,theHon’bleCourtshavelaiddownthattheassessee todischargeitsonusisrequiredtofurnishevidencewithrespecttoidentityofthe creditor,genuinenessoftransactionandcreditworthinessofthecreditor.Ifthe assesseefailedtodischargetheprimaryonuscastortheexplanationand evidencesubmittedbytheassesseewasnotfoundsatisfactorybytheAO,then thesumcreditedinthebookofaccountsshallbedeemedasincomeofthe assessee.TheHon’bleSupremeCourtinthecaseofCITvs.P.Mohanakala reportedin291ITR278whiledealingwithscopeofprovisionofthesection68of theActheldthat“theopinionoftheAOthattheexplanationfurnishedbythe ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 8 assesseeasnotsatisfactoryisrequiredtobebasedonproperappreciationof materialandotherattendingcircumstancesavailableonrecord.Theopinionofthe AssessingOfficerisrequiredtobeformedobjectivelywithreferencetothe materialavailableonrecord.Applicationofmindisthesinequanonforforming theopinion.”Inotherwords,oncetheassesseesubmitsprimaryevidencewith regardtoidentityandcreditworthinessofcreditorandthegenuinenessofthe transaction,theonusshiftsontheAOtoconsiderthematerialprovidedandmake independentinquiryinordertofindoutgenuinenessoftheevidenceorbring materialcontrarytothefactexplainedbytheassessee.TheAOcannotrejectthe primaryevidencefurnishedbytheassesseewithoutappreciatingthefacts availableonrecordorwithoutbringingcontrarymaterialtofromthebeliefthat primarydocumentorexplanationfurnishedbytheassesseeisnotsatisfactory. 8.1Undeniably,theassesseeduringtheassessmentproceedinginsupportof genuinenessofcreditofpreferencesharecapitalhasfurnishedcopiesofaudited financialstatements,ITRsandbanksstatementsfor3yearsoftheinvestor companyCLPL,copyofboardresolutionapprovingtheinvestmentintheassessee companyetc.Themoneycreditedinthebooksoftheassesseewasthroughthe bankingchannel.ThelearnedCIT(A)basedonevidenceprovidedbytheassessee foundthattheinvestorcompanyhasbeenengagedinthebusinessofproviding warehousingfacilitysinceyear2003andhavingshareholderfund(sharecapital+ Reserve)atRs.14.8crores.Theinvestorcompanyhasbeengraduallyclosingits warehousingbusiness.Still,thecompanyCLPLhasshownrevenuefromoperation formorethan2croresintheyearunderconsiderationaswellasintheimmediate 2precedingyears.ThelearnedCIT(A)alsofoundthattheinvestorcompany,after reducingitsbusinessoperationofwarehousingfacilitydecidedtoinvestidle shareholderfundintheassesseecompany.WenotethatthelearnedDRbeforeus hasnotbroughtanymaterialcontrarytofindingofthelearnedCIT(A).Wefurther notethattheAOinassessmentorderhasnowherereferredtoanyindependent inquirywhatsoevermadetodisprovetheprimaryevidenceprovidedbythe ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 9 assesseeandnotpointedoutanyinfirmityintheevidenceproducedbeforehim. Assuch,theAOmerelyafterreferringthattheinvestorcompanyhasdeclaredlow nettaxableincomeandthefundreceivedwereimmediatelytransferredtoother partiesheldthattheassesseefailedtoproperlyexplainthenatureandsourcesof creditofsharecapital.Inourconsideredopinion,theapproachtakenbytheAOis notjustified.Assuch,theAOfailedtoappreciatethefacts/materialsprovidedby theassesseecompany.Itispertinenttomentionedthattheassesseecompanyis mainlyengagedinmakingstrategicinvestmentinsubsidiaryorgroupcompanies andthisfactwasalsoexplainedthattheamountcollectedfromallotmentof preferencesharehasbeenutilizedformakinginvestmentin/extendingloansto subsidiaryorgroupcompanies.Thus,inourconsideredopiniontheassesseehas providednecessarydetailandtheonusshiftedontherevenuetocarryout independentinquiry/investigationandbringcontrarymaterial,buttheAOfailedto doso. 8.2Beforeparting,wenotethatthelearnedDRbeforeushascontendedthat transactionofpreferencesharecapitaliscircularinnature.Assuchthelearned DRcontendedthattheinvestorcompanyformakinginvestmentintheassessee companyreceivedfundfromM/sTradebullsSecuritiesPvtLtd(hereafterTSPL) andtheassesseecompanyafterreceivingamountofpreferencesharecapital transferredthesametotheTSPL.Inotherwords,TSPLgivesfundofRs.14 CrorestoCLPLwhichCLPLtransferredtoassesseecompanyandfinallyassessee transferredthesametoTSPL.Thus,thefundreachedfromwhereitwas originated.Inthisregard,wehaveperusedthefinancialstatementsofCLPL placedonpages147to196ofthepaperbookandtheledgercopyofCLPLinthe booksofTSPL.Fromtheabove,wenotethattheCLPLinearlieryearshad extendedloans&advancestotheTSPL,andtheoutstandingopeningbalanceof suchloans&advanceswasofRs.16.2crores.Duringtheyearunder considerationcertainamountsofloans&advancesreceivedbackonvariousdates includingtheamountofRs.14croreson22-09-2017whichwastransferredto ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 10 assesseecompanyonthesameday.Similarly,therewerealsofreshloans& advancesextendedbytheCLPLtoTSPLondifferentdates.Assuchason22-09- 2017,therewasstilloutstandingloan&advancesof32LakhsfromTSPLand thereafterfurtherfreshloanswasextendedandclosingbalanceofthesamewas atRs.22.2crores.Fromtheaboveitistranspiredthatifweseethetransaction onaparticulardayi.e.22-09-2017thenitseemslikethetransactioniscircularin nature.Butifwelookatthetransactionaswholefromthebeginningoftheyear totheend,thenwefindthattherewereregulartransactionsofloans&advances betweenCLPLandTSPL.AssuchtheCLPLhadextendedloans&advancestothe TSPLonearlieroccasionoutofwhichitreceivedbackamountofRs.14croresfor thepurposeofinvestmentinthepreferenceshareofassesseecompanyand thereafterfurtherextendfreshloanstotheTSPL.Therefore,inourconsidered opinion,noinferencecanbedrawnagainsttheassesseeinthegivenfactsand circumstances.Therefore,weherebyconfirmthefindingofthelearnedCIT(A) anddirecttheAOtodeletetheadditionmadebyhim.Hence,thegroundof appealoftherevenueisherebydismissed. 8.3Intheresult,theappealoftheRevenueisherebydismissed. ComingtoCONo.33/Ahd/2022bytheassessee. 9.Theissueraisedbytheassesseeincaptionedcrossobjectionisthatthe learnedCIT(A)erredinnotadjudicatingthegroundofappealinrelationto taxationofadditionmadeundersection68oftheAct@60%undersection 115BBEoftheActandinterestchargedundersection234BoftheAct. 10.Attheoutset,wenotethatoncetheadditionmadebytheAOunder section68oftheActhasbeendeleted,thequestionofcalculatingthetaxunder section115BBEoftheActdoesnotarise.Likewise,theissueforcharginginterest undersection234BoftheActdoesnotrequireanyseparateadjudication. ITAno.408/Ahd/2022with C.ONo.33/Ahd/2022 Asstt.Year2018-19 11 Furthermore,theld.DRatthetimeofhearingdidnotmakeanysubmissionon theissueraisedintheCOandjustsubmittedthattheCOisjustsupportingthe findingoftheld.CIT-A.Assuch,wedon’tanyreasontoadjudicatetheCOraised bytheassesseeandaccordinglydismissthesameasinfructuous. 10.1IntheresulttheCOisdismissedasinfructuous. 11.Inthecombinedresult,theappealoftheRevenueisdismissed,andtheCO oftheassesseeisalsodismissedasinfructuous. OrderpronouncedintheCourton29/12/2023atAhmedabad. Sd/-Sd/- (SIDDHARTHANAUTIYAL)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated 29/12/2023 Manish