M/s Tulip Engineering P. Ltd., New Delhi V. ITO, New Delhi

ITA 4120/DEL/2013

• Counselvise Citation: 412020114 RSA 2013
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 12-06-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 05-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMAL GARG
• Keywords: Unexplained cash credit; Additional evidence; Accommodation entries; Onus to prove; Reason to believe
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI S. V. MEHROTRA, ACCOUNTANT MEM BER I.T.A .NO. 4120 /DEL/2013(AY-2008- 09) TULIP ENGINEERING P. LTD. C/O LUNAWAT & CO., 54, DARYAGANJ, NEW DELHI AABCT6237A (APPELLANT) VS ITO WARD 16(4) NEW DELHI (RESPONDENT) APPELLANT BY SHRI PRAMOD JAIN, CA. RESPONDENT BY SH. AMAL GARG, SR. D.R. ORDER THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF LD. CIT(A) XIX, NEW DELHI DATED 31 TH MARCH, 2013 FOR A. Y 2004-05. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA D FILED ITS RETURN OF INCOME DECLARING INCOME OF RS. 444/-. IT WAS PROCESSED U/S 143(1). L ATER ON NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE AFTER RECORDING FOLLOWING REASONS, AS RE-PRODUCED IN PARA 3.2 OF LD. COMMISSIONER OF INCOME TAX (APPEALS) ORDER :- CERTAIN INVESTIGATIONS WERE CARRIED OUT BY THE DIRECTORATE OF INVESTIGATION, JHANDEWALAN, NEW DELHI IN RESPECT OF THE BOGUS/ACCOMMODATION ENTRIES PROVIDED BY CERTAIN INDIVIDUAL/COMPANIES. THE NAME OF THE ASSESSEE FIGU RES AS ONE OF THE BENEFICIARIES OF THESE ALLEGED BOGUS TRANSACTIONS G IVEN BY THE DIRECTORATE AFTER MAKING THE NECESSARY ENQUIRIES. I T HAS BEEN ITA NO.4120//DEL/13 2 REVEALED THAT THE FOLLOWING ENTRIES HAVE BEEN RECEI VED BY THE ASSESSEE. BENIFICIAR YS NAME BENIFICIA RY BANK NAME BENIFICI ARY BANK BRANCH VALU E OF ENTRY TAKEN INSTRUM ENT NO. BY WHICH ENTRY TAKEN DATE ON WHICH ENTRY TAKEN NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT BAN K FROM WHIC H ENTR Y GIVI NG BAN K BRANC H OF ENTRY GIVING BANK A/C NO. ENTRY GIVIN G ACCOU NT TULIP ENGINEERI NG P. LTD. CORPORATI ON BANK PASCHIM VIHAR 2340 00 235680 18/10/20 03 RAGHUBI R SINGH CORP N BAN K PASCHI M VIHAR 1227 6 TULIP ENGINEERI NG P. LTD. CORPORATI ON BANK PASCHIM VIHAR 2500 00 242601 18/10/20 03 SIMRANJ EET KAUR CORP N BAN K PASCHI M VIHAR 1736 7 THE ABOVE AMOUNT OF RS. 4,84,000/- HAS BEEN CREDIT ED INTO ASSESSEES BANK ACCOUNT ON VARIOUS DATES. INVESTIGATION MADE BY THE INVESTIGATION WING OF THE DEPARTMENT HAS FOUND THAT ASSESSEE IS A BENEFICIARY OF TAKING THE AFORESAID ACCOMMODATION ENTRIES. I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK AC COUNT BY WAY OF ABOVE ACCOMMODATION ENTRIES. THEREFORE, I HAVE REASON TO BELIEVE THAT THE INCOME OF THE ITA NO.4120//DEL/13 3 ASSESSEE COMPANY AMOUNTING TO RS. 4,84,000/- HAS ES CAPED ASSESSMENT. THE ESCAPEMENT OF INCOME HAS BEEN CLARLY ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE COMPANY TO TRULY AND FULLY DISCLOSED ALL M ATERIALS FACTS NECESSARY FOR ASSESSMENT. THUS, IT IS FIT CASE FOR INITIATION OF PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961. 3. BEFORE THE ASSESSING OFFICER IT WAS SUBMI TTED BY THE ASSESSEE THAT THE RECEIPT OF MONEY FROM BOTH THE PERSONS VIZ. SHRI RAGHUBIR SING H RS. 2,34,000/- AND SMT. SIMRANJEET KAUR 2,50,000/- WAS AGAINST SALE OF SHAR ES TO THEM. THE ASSESSING OFFICER CALLED FOR THE BANK STATEMENTS OF BOTH THESE PERSON S FROM CORPORATION BANK, PASCHIM VIHAR AND NOTICED THAT CASH OF RS. 2,50,000 /- AND RS. 2,34,000/- WAS DEPOSITED IN THE SAVING BANK ACCOUNTS OF SMT. SIMRA NJEET KAUR AND SHRI RAGHUBIR SINGH RESPECTIVELY ON 18.10.2003 WHEN THE CHEQUE IS SUED TO THE ASSESSEES COMPANY WAS CLEARED. THE ASSESSING OFFICER HAS FURTHER OBSE RVED THAT SUMMONS WERE ISSUED TO BOTH THESE PARTIES. THE COVER CONTAINING SUMMONS AD DRESSED TO SHRI RAGHUBIR SINGH WAS RECEIVED BACK WITH THE REMARK LEFT AND SMT. S IMRANJEET KAUR DID NOT COMPLY. HE, FURTHER, OBSERVED THAT FROM THE PERUSAL OF THE RETURN FILED BY THESE PERSONS FOR ASSESSMENT YEAR 2004-05 FOLLOWING FACTS EMERGED :- (A) SHRI RAGHUBIR SINGH WAS ABOUT 35 YEARS OLD AND WAS SALARIED EMPLOYEE AND HIS SALARY DURING FINANCIAL YEAR 2003 -04 WAS ONLY RS. 44,280. SIMILARLY IN CASE OF SMT. SIRANJEET KAUR, HE FOUND THAT SHE WAS ONLY 25 YEARS OF AGE AND HAD RETURNED INCOME OF RS. 81,075/- AS PER PROFIT AND LOSS ACCOUNT. HOW EVER, IN THE REPLY DATED 2.12.2011, IN RESPONSE TO INQUIRY U/S 133(6), SHE S TATED THAT NO P & L ACCOUNT WAS MAINTAINED. KEEPING IN VIEW THE MEAGER MEANS AT TH E DISPOSAL OF BOTH THESE LENDERS, HE MADE AN ADDITION OF RS. 4,48,000/-, INTER ALIA, OBSERVING THAT THE AMOUNT HAD BEEN ARRANGED THROUGH THESE INNOCUOUS PERSONS. ITA NO.4120//DEL/13 4 4. BEFORE LD. CIT(A), THE ASSESSEE HAD ASSAILED T HE INITIATION OF PROCEEDINGS U/S 148AND HAD ALSO ASSAILED THE ADDITION MADE U/S 68. LD. CIT(A)UPHELD THE PROCEEDING U/S 148 RELYING ON FOLLOWING 2 DECISIONS :- 1. CIT V. SAFETAG INTERNATIONAL INDIA (P.) LTD. {2012} 332 ITR 622(DELHI) 2. A.G.HOLDINGS (P.) LTD. V. ITO [2012] 207 TAXMAN 117 (DELHI) 5. ON MERITS, LD. CIT(A) CONFIRMED THE AOS ACTIO N FOR THE FOLLOWING REASONS :- (I) THE ASSESSING OFFICER HAD MADE EFFORTS TO ASCER TAIN THE CORRECTNESS OF ASSESSEES DEBT AND CAME TO THE CONCLUSION THAT BOTH THE PERSO NS DID NOT HAVE THE CAPACITY TO GIVE THESE AMOUNTS TO THE ASSESSEE. (II) THE TRANSACTION WAS NOT GENUINE AND REPRESENTE D BOGUS ACCOMMODATION ENTRIES. (III) THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED HUG E AMOUNTS BY SALE OF SHARES NOT ONLY UNDER YEAR OF THE CONSIDERATION, BUT YEAR AFTE R YEAR, IN ASSESSMENT YEAR 2002-03, 2003-04, 2004-05 AND 2005-06. 6. IN VIEW OF THE DECISIONS OF HONBLE SUPREME COURT IN SUMATI DAYAL V. CIT (1995) 214 ITR 801, CIT VS. NOVA PROMOTORS & FINLEA SE (P.) LTD. [2012] 342 ITR 169 (DELHI), THE EVIDENCE ADDUCED BY THE ASSESSEE H AD TO BE EXAMINED NOT SUPERFICIALLY BUT IN DEPTH HAVING REGARD TO THE TES T OF HUMAN PROBABILITIES AND NORMAL COURSE OF HUMAN CONDUCT. LD. CIT APPEAL ALSO RELIED ON FOLLOWING DECISIONS :- 1. CIT V. NOVA PROMOTERS & FINLEASE (P.) LTD. [2 012] 342 ITR 169 (DELHI) 2. CIT V. GOLD LEAF CAPITAL CORPN LTD. [2012] 20 5 TAXMAN 16 (DELHI) 3. ITO V. DIZA HOLDINGS (P.) LTD. (2002) 255 ITR 5 73 (KER) ITA NO.4120//DEL/13 5 4. CIT V. UNITED COMMERCIAL & INDL. CO.(P.) LTD. (1991) 187 ITR 596 (CAL) 5. CIT V. NEELKANTH ISPAT UDHYOG PVT. LTD 2012 TIOL-606-HC- DEL-IT 6. ITO V. ONASSIS AXIES PVT LTD 2012-TIOL-415-ITA T-DEL 7. DHINGRA GLOBAL CREDENCE (P.) LTD. V. ITO [2010 ] 1 ITR (TRIB) 529 (DELHI) 8. CIT V. N.R.PORTFOLIO P. LTD. [2013] 29 TAXMANN. COM 291 (DELHI) 9. CIT V. NIPUN BUILDERS & DEVELOPERS P. LTD. [2013 ] 30 TAXMANN. COM. 292 (DELHI) 10. RAJAT BANSAL V. CIT (2011) 200 TAXMAN 72 (P.&H ). 7. AS REGARDS THE ASSESSEES SUBMISSION THAT I N ASSESSMENT YEAR 2002-03 SIMILAR ADDITION HAD BEEN DELETED BY LD. CIT(A) AND ITAT, L D. CIT(A)OBSERVED THAT IN THE SAID ASSESSMENT YEAR, NO INQUIRY HAD BEEN CONDUCTED BY ASSESSING OFFICER. HOWEVER, IN PRESENT ASSESSMENT YEAR, ENQUIRIES WERE CONDUCTED BY AO . SIMILARLY FOR ASSESSMENT YEAR 2003-04 ALSO LD. CIT(A) RELIED ON THE SAME REASONING. ACCORDINGLY, LD. CIT(A) CONFIRMED THE ADDITION, INT ER ALIA, OBSERVING IN PARA 4.12 AS UNDER :- IN THE ASSESSMENT ORDER, THE A.O. HAS GIVEN DETAILS OF THE OPPORTUNITIES GIVEN TO THE ASSESSEE. THE APPELLANT HAS BEEN GIVEN DUE OPPORTUNITY TO REBUT THE INFORMATION RECEIVED F ROM THE INVESTIGATION WING. NOTWITHSTANDING THE INFORMATION RECEIVED, IN CASE OF CREDITS, THE BURDEN OF PROVING THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANTS AND THE GE NUINENESS OF THE TRANSACTIONS IS ON THE APPELLANT. IT IS INCORRECT T O SAY THAT THE BURDEN WAS ON THE A.O. HAS REFERRED TO THE INFORMATION REC EIVED FROM THE INVESTIGATION WING WHICH SHOWED THAT THE APPELLANT HAD TAKEN ACCOMMODATION ENTRIES TO INTRODUCE HIS OWN UNDISCLO SED INCOME IN THE BOOKS OF ACCOUNT. IN THE FACE OF THIS INFORMATI ON, A HEAVY BURDEN ITA NO.4120//DEL/13 6 LAY ON THE APPELLANT TO PROVE THAT THE CREDITS WERE GENUINE. THE ONUS HAD CLEARLY SHIFTED TO THE APPELLANT. IN VIEW OF T HE ABOVE OF THE FACTWS DISCUSSED ABOVE, THE APPELLANT HAS CLEARLY F AILED TO DISCHARGE HIS ONUS OF PROOF. THE ADDITION MADE U/S 68 IS THER EFORE, JUSTIFIED AND IS UPHELD. THE GROUNDS ARE DISMISSED. 8. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE LOWER REVENUE AUTHORITIES AND FURTHER SUBMITTED THAT CRED ITWORTHINESS OF PURCHASER NEED NOT BE PROVED BY ASSESSEE AND ONLY IDENTITY IS TO BE ES TABLISHED. IN THIS REGARD, LD. COUNSEL RELIED ON THE DECISION OF TRIBUNAL IN ITO W ARD 16(4) VS. TULIP ENGINEERING P. LTD. ITA NO.3737/DEL/2011 A.Y. 2003-04 WHEREIN I T WAS HELD AS UNDER :- THIS IS A CASE OF SALE OF SHARES. UNLIKE THE C ASE WHERE THE ASSESSEE ISSUES SHARES AND COLLECTS MONEY, IN A CASE OF SALE OF SHOES THE DEGREE OF BURDEN OF PROOF IS NOT THE SAME. IN CASE OF SALE OF SHARES, ONE ASSET I.E. SHOES IS CONVERTED INTO ANOTHER ASSET I.E. CAS H. NO NEW ASSET IS ACQUIRED BY THE ASSESSEE. IF SOLD AT A HIGHER RATE, THE DIFFERENCE IS PROFIT SUBJECT TO TAX. SO IN OUR VIEW, IF THE ASSES SEE GIVE THE IDENTITY OF THE PERSON, IT SHOULD BE SUFFICIENT. 9. LD. COUNSEL FURTHER, RELIED ON THE DECISI ON OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MEDSHAVE HEALTH CARE LTD. ITA 1 24/2010 LD. COUNSEL ALSO RELIED ON THE DECISION IN THE CASE OF CIT VS. VALUE CAPITAL SERVICES P. LTD. 307 I TR 334. LD. COUNSEL, FURTHER, RELIED ON ITAT ORDER UND ER ITA NO. 4629 (DEL) / 2010 ITO VS. TULIP ENGINEERING P. LTD. FOR A.Y. 2002-03 LD. COUNSEL ALSO POINTED OUT THAT ASSESSEE HAD DULY ESTABLISHED THE IDENTITY OF THE PERSONS WHO HAD PURCHASED THE SHARES FROM ASSESSEE AND THERE WAS NO DISPUTE THAT THE PROCEEDS CREDITED IN BOOKS OF ACCOUNT OF THE ASSESSEE WERE OUT OF SALE OF SHARES HELD BY IT. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ASSESSEE HAS NOT BEEN ESTABLISHED THE PURCHASERS CREDITWORTHINESS AND, THEREFORE, THE ADDITION WAS S USTAINED BY LD. CIT(A). 10. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH T HE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE, THE ASSESSING OFFICER HAS GIVEN CLEAR FINDING IN PARA 3 OF HIS ITA NO.4120//DEL/13 7 ORDER THAT CASH OF RS. 2,50,000/- AND RS. 2,34,000 /- WAS DEPOSITED IN THE SAVING BANK ACCOUNTS OF SMIRANJEET KAUR AND SHRI RAGHUBIR SINGH RESPECTIVELY ON 18.10.2008 WHEN THE CHEQUE ISSUED TO THE ASSESSEE C OMPANY WAS CLEARED. THE ASSESSING OFFICER HAD ISSUED SUMMONS TO BOTH THE PA RTIES. THE COVER CONTAINING SUMMONS ADDRESSED TO SHRI RAGHUBIR SINGH WAS RECEIV ED BACK WITH THE REMARK LEFT AND SMT. SIMRANJEET KAUR DID NOT COMPLY. IT IS WELL SETTLED LAW THAT ONUS LIES ON THE ASSESSEE TO ESTABLISH THE GENUINENESS AND CR EDITWORTHINESS OF THE TRANSACTION. WHENEVER THERE IS PROXIMITY OF DEPOSIT OF CASH IN T HE LENDERS ACCOUNT WITH THE ISSUANCE OF CHEQUE, THE BURDEN ON ASSESSEE IS MUCH MORE TO ESTABLISH THE GENUINENESS AND CREDITWORTHINESS OF TRANSACTION BEC AUSE OF THE PREVALENT PRACTICE OF PROVIDING ACCOMMODATION ENTRIES BY PERSONS OF MEAGE R MEANS WHICH TRIGGERS THE ENQUIRY REGARDING CREDITWORTHINESS OF LENDERS. 11. IN THE PRESENT CASE THE ASSESSING OFFICER HAS POINTED OUT THAT SHRI RAGHUBIR SINGH IS ABOUT 35 YEARS OLD AND HIS SALARY WAS ONLY RS. 44,280 DURING FINANCIAL YEAR 2003-04. THEREFORE, WHEN CONSIDERED ON THE TOUCH-ST ONE OF PREPONDERANCE OF PROBABILITIES, IT IS DIFFICULT TO ACCEPT THAT A PER SON OF SUCH MEAGER MEANS WOULD DEPOSIT RS. 2,34,000/- IN CASH JUST BEFORE THE ALLE GED PURCHASE OF SHARES. SIMILARLY, SMT. SIMRANJEET KAUR WAS ONLY 25 YEARS OF AGE AND H AD RETURNED AN INCOME OF RS. 81,075/- ONLY WHICH WAS ALLEGEDLY AS PER PROFIT AND LOSS INCOME. HOWEVER, AS PER REPLY SUBMITTED ON 2 ND DECEMBER, 2011 BY HER IN RESPONSE TO INQUIRY U/S 1 33(6), SHE STATED THAT NO PROFIT & LOSS ACCOUNT WAS MAINTAINED . THUS, APART FROM MEAGER INCOME OF RS. 81,000 ONLY EARNED BY HER, THERE WAS CONTRADICTION ALSO IN HER STATEMENT AND CONSIDERING HER AGE IT WAS MOST UNLIK ELY THAT SHE WOULD HAVE DEPOSITED CASH OF RS. 2,50,000/- OUT OF HER AVAILAB LE RESOURCES. UNDER SUCH ITA NO.4120//DEL/13 8 CIRCUMSTANCES, BOTH THE LOWER REVENUE AUTHORITIES W ERE FULLY JUSTIFIED IN DOUBTING THE GENUINENESS AND CREDITWORTHINESS OF PURCHASERS. NO DOUBT, IDENTITY OF THE PURCHASERS WAS ESTABLISHED BUT THAT PER SE CAN NOT TAKE OUT TH E TRANSACTION FROM THE RELM OF INQUIRY ABOUT GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS OF THE PURCHASER. IT IS INTERESTING TO NOTE THAT IN EARLIER YEARS ALSO THE PURCHASES WERE DOUBTED. HOWEVER SINCE A.O. HAD NOT MADE ANY ENQUIRIES, TRIBUNAL CAM E TO THE CONCLUSION THAT THE ASSESSEES CLAIM WAS JUSTIFIED. THE FACTS IN THE PR ESENT CASE ARE, HOWEVER, CLEARLY DISTINGUISHABLE AS WOULD BE CLEAR FROM THE ENSUING DISCUSSION. IN ASSESSMENT YEAR 2002-03, TRIBUNAL IN PARA 2.3, INTER ALIA, NOTED AS UNDER WITH REFERENCE TO THE FINDINGS OF LD. CIT APPEAL :- IN THE CASE OF SALE PROCEEDS OF THE SHARES OF UTTR ANCHAL FINANCE LTD, IT HAS BEEN MENTIONED THAT THE AO HAS NOT DISPUTED THE ACQUISITION OF SHARES BY THE ASSESSEE AND THE PURCHASE CONSIDERATI ON HAS BEEN PAID THROUGH CHEQUES. NECESSARY EVIDENCE IN RESPECT OF S ALE OF 186550 SHARES HAS ALSO BEEN PLACED ON RECORD OF THE ASSESS ING OFFICER. THE ASSESSING OFFICER HAS NOT CONTROVERTED THESE FACTS EXCEPT STATING THAT THE TRANSACTIONS WERE NOT BELIEVABLE. THE LD. CIT(A ) HELD THAT THE IDENTITY OF THE PURCHASERS HAS BEEN PROVED. THE TRA NSACTIONS OF SALE HAVE BEEN SETTLED BY PAYMENT THROUGH CHEQUES. THERE IS NOTHING UNUSUAL ABOUT THESE TRANSACTIONS. THEREFORE, THE AD DITION OF RS. 18,65,500/- HAS ALSO BEEN DELETED. 12. FURTHER, IN PARA 4.4 TRIBUNAL, INTER ALIA, O BSERVED AS UNDER :- THE CASE OF THE LD. DEPARTMENTAL REPRESENTATIVE I S THAT THE ASSESSEE HAS NOT FURNISHED BANK STATEMENT OF THE CO NTRIBUTORS OR PURCHASERS OF SHARES. THEREFORE, CREDITWORTHINESS O F THE PARTIES HAS NOT BEEN ESTABLISHED. EVEN IF THERE WAS SOME LAPSE ON THE PART OF THE ASSESSING OFFICER IN MAKING FULL ENQUIRY, THE POWER S VESTED IN THE CIT(A) ARE CO-TERMINUS WITH THE POWERS OF THE ASSES SING OFFICER AND, THEREFORE, HE SHOULD HAVE MADE FURTHER ENQUIRI ES OR CAUSED FURTHER ENQUIRY TO BE MADE IN THE MATTER. IN THE CA SE OF SALE OF SHARES, IT IS SUBMITTED THAT ADDITIONAL EVIDENCE WA S FILED REGARDING PURCHASE OF TWO LAKH SHARES OF UTRANCHAL FINANCE LT D. THIS EVIDENCE WAS NOT FORWARDED TO THE ASSESSING OFFICER FOR HIS REBUTTAL. ITA NO.4120//DEL/13 9 THE BALANCE-SHEET OF UTRANCHAL FINANCE LTD. HAS NOT BEEN FILED AND, THEREFORE, THE VALUE OF ITS SHARES ON THE DATE OF T HE SALE IS NOT KNOWN. IT IS ALSO NOT KNOWN WHETHER THE SHARES ARE QUOTED OR UNQUOTED, THOSE WERE IN MATERIAL OR DEMAT FORM AND WHO WAS TH E BROKER. THEREFORE, THE MATTER REGARDING PURCHASE AND SALE O F SHARES SHOULD HAVE BEEN REMANDED TO THE ASSESSING OFFICER. THUS, IT IS URGED THAT THE RODER OF THE ASSESSING OFFICER MAY BE UPHELD OR THE MATTER MAY BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FO R FURTHER ENQUIRY . 13. THUS, IT IS EVIDENT FROM THE AFOREMENTIONE D FINDINGS THAT THE ASSESSING OFFICER DID NOT MAKE ANY INQUIRY FROM ANY OF THE PU RCHASERS OF THE SHARES. THE WHOLE EVIDENCE WAS DISBELIEVED WITHOUT MAKING ANY I NQUIRY. THUS, IT IS EVIDENT THAT THE FACTS IN THE PRESENT ASSESSMENT YEAR ARE DIFFER ENT INASMUCH AS ASSESSING OFFICER HAD MADE DUE ENQUIRIES FROM THE BANKS OF THE PURCHA SERS. IN ASSESSMENT YEAR 2003- 04, TRIBUNAL HAS NOTICED IN PARA 3 THAT LD. CIT(A) CONSIDERED THE EVIDENCES FILED BY THE ASSESSEE AND ON THE GROUND THAT THE ASSESSEE HA D DISCHARGED ITS BURDEN OF PROVIDING BASIC DETAILS WHICH WERE REQUIRED FOR VER IFICATION AND TO FULFIL THE CONDITION WITH RESPECT TO IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE CREDITORS, GRANTED RELIEFS. TRIBUANL HAS NOTICED IN PARA 8 AS UNDER :- THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS PURCH ASED SHARES AS INVESTMENTS IN THE EARLIER AYS AND HELD THEM AS SUC H. THIS FACT THAT THE ASSESSEE HAS PURCHASED SHARES IN THE EARLIER AY S AND HAS CLASSIFIED THE SAME AS INVESTMENTS IN ITS BALANCE S HEET IS NOT IN DISPUTE. THE ONLY DISPUTE IS WHETHER THE GENUINENES S OF THE SALE OF THE SHARES, HAS BEEN DEMONSTRATED BY THE ASSESSEE OR NO T. THE ASSESSEE IN THIS CASE HAS FILED COPIES OF THE CONFIRMATION LETT ERS, AFFIDAVIT, CONFIRMATION OF ACCOUNT ETC. IN SUPPORT OF THE FACT THAT THE SALES MADE WERE GENUINE. PAN NUMBER OF THE PURCHASERS OF SHARE S WAS ALSO GIVEN. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ITA NO.4120//DEL/13 10 SUMMARIZED THE EVIDENCES AT PARA 10 AT PAGES 3 AND 4 OF HIS ORDER. FOR THE SAKE OF BREVITY WE DO NOT EXTRACT THE SAME. IN FACT THE ASSESSEE PRODUCED THESE DOCUMENTS BEFORE THE ASSESSING OFFIC ER, IS EVIDENT FROM THE RECORDING IN PAGE 2 OF THE ASSESSMENT ORDE R. THE DEFECTS POINTED OUT BY THE LD. ASSESSING OFFICER IN THE EVI DENCES FILED, WERE EXPLAINED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 14. IN THE BACKGROUND OF ABOVE FACTUAL ASPECT S, TRIBUNAL OBSERVED THAT IN CASE OF SALE OF SHARES NORMALLY IT SHOULD BE SUFFICIENT IF THE IDENTITY OF THE PERSON IS ESTABLISHED. HOWEVER, TRIBUNAL HAS NOT RULED THAT I F THE IDENTITY IS ESTABLISHED, THE ASSESSING OFFICER CAN NOT EXAMINE THE GENUINENESS O F TRANSACTION AND CREDITWORTHINESS OF PURCHASERS. IT ALL DEPENDS UPON FACTS OF EACH CASE WHETHER THE EVIDENCE AVAILABLE ON RECORD MEETS THE LEGAL REQUIR EMENTS OR NOT. 15. LD. COUNSEL HAS ALSO RELIED ON THE DECISI ON OF HONBLE DELHI HIGH COURT IN THE CASE OF MEDSHAVE HEALTH CARE LTD. (SUPRA). IN T HIS CASE THE ASSESSEE COMPANY WAS ENGAGED IN THE SALE AND PURCHASE OF THE SHARES HELD AS INVESTMENT. ACCORDING TO THE ASSESSEE IT HAD SOLD SHARES OF VIKAS FITTING LT D. TO RAMESH CHAND INDUSTRIES LTD. AND SHARES OF M/S USHAN INFRASTRUCTURES LTD. TO M/S SILVER STREAKS TRADING PVT. LTD. THESE SHARES HAD BEEN PURCHASED DURING THE FINANCIA L YEARS 1997-98 BY THE ASSESSEE AND WERE REFLECTED IN THE AUDITED FINANCIAL STATEME NTS. ACCORDING TO THE ASSESSEE, SINCE M/S RAMESH CHAND INDUSTRIES LTD. WAS HAVING A CURRENT ACCOUNT WITH M/S SILVER STREAKS TRADING PVT. LTD., BOTH COMPANIES AG REED TO ADJUST THE AMOUNT INTERNALLY. AS A RESULT OF THIS ADJUSTMENT, THE ENT IRE AMOUNT TOWARDS SALE OF THE SHARES ITA NO.4120//DEL/13 11 WAS PAID TO ASSESSEE BY M/S SILVER STREAK TRADING P VT. LTD. IN THE BACKDROP OF THESE FACTS HONBLE HIGH COURT OBSERVED IN PARA 5 AS UNDE R :- THE TRIBUNAL NOTICED THAT THE ASSESSEE HAD FILED T HE CONFIRMATION LETTER OF M/S RAMESH CHAND INDUSTRIES LTD. BEFORE T HE COMMISSIONER OF INCOME TAX (APPEALS). FURTHER, THE ASSESSEE HAD PRO DUCED A COPY OF THE LEDGER ACCOUNT IN THE CASE OF M/S RAMESH CHAND INDUSTRIES LTD. IN THE BOOKS OF M/S SILVER STREAKS TRADING PVT. LTD. B EFORE THE ASSESSING OFFICER IN REMAND PROCEEDINGS. FURTHERMORE, IT WAS NOTICED BY THE TRIBUNAL THAT THE SALE OF SHARES TO M/S SILVER STRE AKS TRADING PVT. LTD. WAS REFLECTED IN THE BOOKS OF THE ASSESSEE AND THAT THESE AMOUNTS WERE ALSO SHOWN AS ADVANCE IN THE BALANCE SHEET OF THE A SSESSEE COMPANY AND AS A CREDIT IN THE BALANCE OF M/S SILVER STREAK S TRADING PVT. LTD. AS ON THE 31 ST MARCH, 2003. CONCERNING THE PAYMENT MADE BY M/S SI LVER STREAKS TRADING PVT. LTD., IT WAS FOUND THAT THE SA ME WAS MADE IN OCTOBER-NOVEMBER,2003 BY ACCOUNT PAYEE CHEQUES AND A CERTIFICATE FROM CORPORATE BANK IN THIS REGARD WAS PRODUCED BEF ORE THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS, WHICH WAS FORWAR DED TO THE COMMISSIONER OF INCOME TAX (APPEALS) BY THE ASSESSI NG OFFICER. THEREFORE, THE TRIBUNAL CAME TO THE CONCLUSION THAT IT WAS CLEAR THAT THE ASSESSEE COMPANY HAD BEEN HOLDING THE SHARES WH ICH WERE SOLD BY IT DURING THE YEAR AND THAT IT WAS ON THIS BASIS TH AT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAD ARRIVED AT A CONCLUSION THAT THERE WAS NO REASON TO HOLD THAT THE ASSESSEE COMPANY DID NOT OWN THESE SHARES. THEREFORE, THE TRIBUNAL OBSERVED THAT THERE WAS NO REASON TO HOLD THESE TRANSACTIONS TO BE SHAM TRANSA CTIONS OR THE CREDITS TO BE UNEXPLAINED CASH CREDITS. 16. FROM THE ABOVE OBSERVATIONS, IT IS EVIDEN T THAT THE FACTS IN THIS CASE ARE ENTIRELY DISTINGUISHABLE FROM THE FACTS IN THE PRES ENT CASE. LD. COUNSEL HAS ALSO RELIED ON THE DECISION IN THE CASE OF VALUE CAPITAL PVT. LTD. SUPRA. IN THIS CASE, IT WAS HELD THAT THE ADDITIONAL BURDEN IS ON THE REVENUE T O SHOW THAT EVEN IF THE APPLICANT DID NOT HAVE THE MEANS TO MAKE THE INVESTMENT, THE INVESTMENT MADE BY THE ITA NO.4120//DEL/13 12 APPLICANT ACTUALLY EMNATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. THIS BURDEN HAD NOT BEEN DISCHARGED IN THE SAID CASE. HOWEVER, IN THE PRESEN T CASE, ASSESSING OFFICER HAS CLEARLY DEMONSTRATED, CONSIDERING THE CREDITWORTHIN ESS OF PURCHASERS, THAT THE CASH WAS DEPOSITED IN THEIR ACCOUNTS WHICH HAD ITS SOURC E FROM THE ASSESSEE AS HE HAD BENEFITTED BY THE SAID DEPOSIT OF CASH AND, THEREF ORE, ADVERSE INFERENCE HAS TO BE DRAWN AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE D ISCUSSION, I CONFIRM THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS). 17. IN THE RESULT THE ASSESSEES APPEAL IS D ISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2014. SD/- (S.V.MEHROTRA) ACCOUNTANT MEMBER DATED: 30/06/2014 B.RUKHAIYAR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT AR, ITAT NEW DELHI ITA NO.4120//DEL/13 13