DCIT 1(2)-2, MUMBAI V. MANAGING EMISSION P.LTD, MUMBAI

ITA 4412/MUM/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8370 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 24-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Keywords: Unexplained cash credit; Revenue expenditure
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G, BENCH MUMBAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER & SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.4412/MUM/2016 ( ASSESSMENT YEAR: 2010-11 ) DCIT-1(2)(2) ROOM NO.535 5 TH FLOOR AAYKAR BHAVAN M.K.ROAD MUMBAI-400 020 VS. MANAGING EMISSION P.LTD. 4 TH FLOOR, PHARMA SEARCH HOUSE, 2173, WORLI HILL ESTATE DR.B.G.ROAD,WORLI MUMBAI-400 018 PAN/GIR NO. AACCT7876N APPELLANT ) .. RESPONDENT ) & CROSS OBJECTION NO.110/MUM/2018 ( ASSESSMENT YEAR: 2010-11 ) MANAGING EMISSION P.LTD. 4 TH FLOOR, PHARMA SEARCH HOUSE, 2173, WORLI HILL ESTATE DR.B.G.ROAD,WORLI MUMBAI-400 018 VS. DCIT-1(2)(2) ROOM NO.535 5 TH FLOOR AAYKAR BHAVAN M.K.ROAD MUMBAI-400 020 PAN/GIR NO.AACCT7876N APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI KIRAN MEHTA, AR REVENUE BY SHRI V.VINOD KUMAR, DR DATE OF HEARING 03/03 /2020 DATE OF PRONOUNCEME NT 20/05 / 20 20 / O R D E R PER G.MANJUNATHA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO NS FILED BY THE ASSESSEE ARE DIRECTED AGAINST ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, MUMBAI, DATED 02/03/2016 FO R THE ITA NO.4412/MUM/2016 CO.NO.110/MUM/2018 MANAGING EMISSION P.LTD. 2 ASST.YEAR 2010-11. SINCE, FACTS ARE IDENTICAL AND I SSUES ARE COMMON FOR THE SAKE OF CONVENIENCE, THE APPEAL FILE D BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE A RE HEARD TOGETHER AND ARE DISPOSED-OFF BY THIS CONSOLIDATED ORDER. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN ALLOWING THE DISALLOWANCE OF RS. 1,92,86,737/- DEBITED TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR AND CLAIMED BY THE ASSESSEE AS REVENUE EXPENDITURE, WITHOUT APPRECIATI NG THE ASSESSING OFFICER'S FINDINGS THAT THE BUSINESS OF THE ASSESSE E WAS NOT YET SET-UP IN THE YEAR IN REFERENCE, FURTHER, PROVISIONS OF SECTI ON 35D SPECIFY THAT ANY EXPENDITURE BEFORE THE COMMENCEMENT OF THE BUSINESS MUST BE AMORTIZED AND THERE IS NOTHING SHOWN BY THE ASSESSE E THAT THE BUSINESS HAS COMMENCED, THEREFORE, THE ASSESSING OFFICER DIS ALLOWED THE EXPENDITURE ACCORDINGLY.' 2. 'WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1,30,21,000/- IN RESPECT OF MONEY RECEIVED FROM FORAM DATTANI KAPOOR, WITHOU T APPRECIATING THE FACT THAT ASSESSEE HAD NOT FILED SIGNED CONFIRMATIO N FROM THE SHARE APPLICANT DURING THE SCRUTINY PROCEEDINGS AND THE A SSESSEE FAILED TO DISCHARGE ITS ONUS TO ESTABLISH THE GENUINENESS OF THE IDENTITY OF THE PARTIES AND THE CREDITWORTHINESS OF THE PARTIES FRO M WHOM THE ASSESSEE RECEIVED MONEY. ' 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF EMISSIO N TECHNOLOGY APPLICATIONS AND ACCESSORIES. THE COMPANY IS ALSO E NGAGED IN THE BUSINESS OF USING THE TECHNOLOGY TO PRODUCE STABLE FUEL EMULSION USING A SYSTEM ADDITIVE AND OFFERS TAILOR MADE PROC ESSING SYSTEM IN A WIDE RANGE OF SIZES FOR EMULSIFICATION OF MICRO L EVEL WATER DROPLETS IN FURNACE OIL AND OTHER HYDRO CARBON FUELS. THE AS SESSEE HAS FILED ITS RETURN OF INCOME FOR AY 2010-11 ON 28/09/2010, DECLARING TOTAL INCOME AT RS. NIL AND CURRENT YEAR LOSS AT RS.1,58,67,531/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT H AS BEEN COMPLETED U/S 143(3) OF THE I.T.ACT, 1961 ON 25/03/ 2013 DETERMINING ITA NO.4412/MUM/2016 CO.NO.110/MUM/2018 MANAGING EMISSION P.LTD. 3 THE TOTAL INCOME AT RS.1,49,93,590/- BY MAKING ADDI TIONS TOWARDS DISALLOWANCES OF EXPENDITURE CLAIMED UNDER THE HEAD INCOME FROM BUSINESS AMOUNTING TO RS.1,92,86,737/- AND ADDITION S TOWARDS LEASE RENTAL INCOME OF RS.2,18,588/- UNDER THE HEAD INCOM E FROM OTHER SOURCES AND ALSO, ADDITIONS TOWARDS UNEXPLAINED CAS H CREDITS BEING SHARE APPLICATION MONEY AMOUNTING TO RS.1,47,75,000 /-. THE ASSESSE CARRIED THE MATTER IN APPEAL BEFORE THE FIR ST APPELLATE AUTHORITY. THE LD.CIT(A), FOR THE DETAILED REASONS RECORDED IN IS APPELLATE ORDER, DATED 02/03/2016, PARTLY ALLOWED A PPEAL FILED BY THE ASSESSEE, WHERE HE HAS DELETED ADDITIONS MADE BY TH E LD. AO TOWARDS DISALLOWANCES OF EXPENDITURE, BUT ALLOWED P ARTIAL RELIEF, IN RESPECT OF ADDITIONS MADE TOWARDS UNEXPLAINED CASH CREDIT BEING SHARE APPLICATION MONEY AND ACCORDINGLY, OUT OF TOT AL ADDITION OF RS.1,47,75,000/-, A SUM OF RS.1,30,21,000/- HAS BEE N DELETED AND BALANCE AMOUNT OF RS.17,54,000/- HAS BEEN CONFIRMED . AGGRIEVED BY THE LD.CIT(A) ORDER, THE REVENUE IS IN APPEAL BE FORE US. 4. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO.1 OF REVENUE APPEAL IS DISALLOWANCE OF EXPENDITU RE DEBITED INTO PROFIT AND LOSS ACCOUNT AMOUNTING TO RS.1,92,86,737 /-. THE LD. DR FOR THE REVENUE SUBMITTED THAT THE LD.CIT(A) HAS ER RED IN DELETING ADDITIONS MADE BY THE LD. AO TOWARDS DISALLOWANCES OF EXPENSES, WITHOUT APPRECIATING THE FACT THAT ALTHOUGH, THE BU SINESS OF THE ASSESEE HAS BEEN SET-UP FOR THE YEAR UNDER CONSIDER ATION, BUT THE BUSINESS HAS NOT BEEN COMMENCED, WHICH IS EVIDENT F ROM THE FACT THAT THERE IS NO REVENUE FROM BUSINESS OPERATIONS A ND CONSEQUENTLY, EXPENDITURE INCURRED UNDER THE HEAD INCOME FROM BUS INESS CANNOT BE ALLOWED AS DEDUCTION. THE LD. DR, FURTHER SUBMIT TED THAT AS PER PROVISIONS OF SECTION 35D OF THE I.T.ACT, 1961, ANY EXPENDITURE ITA NO.4412/MUM/2016 CO.NO.110/MUM/2018 MANAGING EMISSION P.LTD. 4 INCURRED BEFORE THE COMMENCEMENT OF THE BUSINESS MU ST BE TREATED AS PRE-OPERATIVE EXPENSES AND TO BE AMORTIZED AFTER COMMENCEMENT OF THE BUSINESS. SINCE, THE BUSINESS O F THE ASSESEE HAS NOT YET COMMENCED, THE RELEVANT EXPENDITURE DEB ITED INTO THE PROFIT AND LOSS ACCOUNT NEEDS TO BE TREATED AS PRE- OPERATIVE OR PRELIMINARY EXPENSES AND SHALL BE AMORTIZED, AS PE R THE PROVISIONS OF SECTION 35D OF THE I.T.ACT, 1961. 5. THE LD. AR FOR THE ASSESEE, ON THE OTHER HAND ST RONGLY SUPPORTING ORDER OF THE LD.CIT(A) SUBMITTED THAT TH E ASSESSEE HAS COMMENCED ITS BUSINESS ACTIVITIES, WHICH IS EVIDENT FROM THE FACT THAT IT HAS SET-UP ITS PLANT AND MACHINERY FOR PRODUCTIO N OF FINISHED GOODS AND HAS ALSO, PURCHASED RAW MATERIAL, WHICH IS EVID ENT FROM THE FACT THAT DURING THE YEAR UNDER CONSIDERATION, IT HAS SH OWN RAW MATERIAL CONSUMPTION OF RS.14,09,071/- AND ALSO, INCURRED VA RIOUS MANUFACTURING AND OTHER ADMINISTRATIVE EXPENSES. TH E LD. AR FOR THE ASSESSEE, FURTHER SUBMITTED THAT THE ASSESSEE H AS ALREADY COMMENCED ITS BUSINESS ACTIVITIES AND HAS STARTED M ANUFACTURING ITS SPECIALIZED MACHINERY, WHICH IS USED IN REDUCTION O F EMISSION. THE ASSESEE HAS ALSO, INSTALLED ITS MACHINERY IN CLIENT S PLACE AND EARNED REVENUE FROM ITS BUSINESS, FOR WHICH NECESSARY EVID ENCES, INCLUDING AGREEMENT BETWEEN THE PARTIES AND BILLS RAISED TO T HE CUSTOMERS HAS BEEN FILED BEFORE THE LD. AO. THE LD.CIT(A) AFTER C ONSIDERING RELEVANT FACTS HAS RIGHTLY DELETED ADDITIONS MADE B Y THE LD. AO AND HIS FINDINGS SHOULD BE UPHELD. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. THE TERM BUSINESS SET-UP AND COMMENCEMENT OF BUSINESS A RE TWO ITA NO.4412/MUM/2016 CO.NO.110/MUM/2018 MANAGING EMISSION P.LTD. 5 DIFFERENT SITUATIONS. IF THE BUSINESS HAS BEEN SET- UP, EVEN THOUGH THE BUSINESS HAS NOT COMMENCED DURING THE PERIOD, THEN NECESSARY EXPENDITURE INCURRED IN RELATION TO SAID BUSINESS N EEDS TO BE ALLOWED AS DEDUCTION. IN ORDER TO DECIDE, WHETHER A PARTICU LAR BUSINESS HAS BEEN SET-UP AND HAS COMMENCED NEEDS TO BE EXAMINED, IN LIGHT OF FACTS OF EACH CASE AND NATURE OF BUSINESS UNDERTAKE N BY THE ENTERPRISES. IN THIS CASE, THE ASSESSEE IS IN THE B USINESS OF MANUFACTURING CERTAIN EQUIPMENT, WHICH ARE WIDELY U SED AS INTEGRAL PART OF MANUFACTURING PROCESS AND ALSO, WOULD HELP IN FUEL SAVINGS. THE EQUIPMENT MANUFACTURED BY THE ASSESSEE NAMELY WINFOX WAS DESIGNED TO ENSURE SUBSTANTIAL SAVINGS OF LIQUID FU ELS LIKE, DIESEL, FURNACE OIL, ETC. THE BUSINESS MODEL FOLLOWED BY T HE ASSESEE IS THAT IT MANUFACTURES THE EQUIPMENTS AND INSTALLED SAID E QUIPMENTS IN DIFFERENT CUSTOMERS PLACES TO REDUCE THEIR FUELS EF FICIENCY, FOR WHICH THE ASSESEE HAS CHARGES THE CUSTOMERS ON THE BASIS OF FUEL CONSUMPTION SAVED BY THE CUSTOMERS. IN THIS BUSINES S MODEL, IF YOU SEE THE FACTS OF PRESENT CASE, ONE HAS TO SEE, WHET HER THE BUSINESS OF THE ASSESSEE HAS BEEN SET-UP AND HAS BEEN COMMEN CED DURING THE YEAR UNDER CONSIDERATION OR NOT. THE ASSESSEE C LAIMS THAT IT HAS STARTED PRODUCTION OF FINISHED GOODS AND HAS ALSO, INSTALLED SAID EQUIPMENTS AT ONE OF ITS CLIENTS SHRI VAISHNAVI ISP AT PVT. LTD. AND SAID EQUIPMENT WAS OPERATIONAL IN THE YEAR OF APPEA L AND BASED ON FUEL SAVINGS EFFECTED BY THE CLIENTS, THE ASSESSE H AD EARNED REVENUES OF RS.2,14,353/-. THE ASSESSEE HAS ALSO CL AIMED THAT IT HAS SET-UP ITS PLANT FOR MANUFACTURING OF FINISHED GOODS AND HAS ALSO, PURCHASED RAW MATERIAL FOR ITS PRODUCTION PUR POSE. THE ASSESSEE, FURTHER CLAIMED THAT IT HAS PRODUCED FIN ISHED GOODS WORTH RS.32.45 LACS IN THE YEAR UNDER APPEAL. ALL THESE E VIDENCES HAS BEEN PLACED BEFORE THE LD. AO AND THE LD.CIT(A). F ROM THE ABOVE, ITA NO.4412/MUM/2016 CO.NO.110/MUM/2018 MANAGING EMISSION P.LTD. 6 IT IS VERY CLEAR THAT THE BUSINESS OF THE ASSESSEE HAS BEEN SETUP AND HAS COMMENCED DURING THE YEAR UNDER CONSIDERATION A ND CONSEQUENTLY, NECESSARY EXPENDITURE INCURRED FOR TH E PURPOSE OF BUSINESS NEEDS TO BE ALLOWED S DEDUCTION, WHETHER O R NOT ANY REVENUE IS GENERATED FOR THE YEAR UNDER CONSIDERATI ON. THE LD.CIT(A) AFTER CONSIDERING RELEVANT FACTS HAS RECO RDED CATEGORICAL FINDINGS THAT THE ASSESSE BUSINESS HAS BEEN SET-UP AND HAS COMMENCED ITS ACTIVITIES AND ACCORDINGLY, ALL EXPEN DITURE INCURRED FOR THE PURPOSE OF BUSINESS NEEDS TO BE ALLOWED. FA CTS REMAINS UNCHANGED. THE REVENUE HAS FAILS TO BRING ON RECORD ANY EVIDENCES TO PROVE THAT THE FINDINGS OF FACTS RECORDED BY THE LD.CIT(A) IS INCORRECT. ON THE OTHER HAND, THE ASSESSEE HAS FILE D NECESSARY EVIDENCES TO PROVE THAT IT HAS COMMENCED ITS BUSINE SS ACTIVITY AND HAS GENERATED INCOME FROM BUSINESS OPERATIONS. THER EFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) WAS RIGHT IN DELETING ADDITIONS MADE TOWARDS DISALLOWANCES OF EXPENDITURE AND HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF LD.CIT(A) AND REJECT GROUND TAKEN BY THE REVENUE. 7. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATIO N FROM GROUND NO. 2 OF REVENUE APPEAL AND GROUND NO.1 OF CROSS O BJECTION FILED BY THE ASSESSE IS ADDITION OF RS.1,47,75,000/- TOWARDS SHARE APPLICATION MONEY RECEIVED FROM SHRI FORAM DATTANI KAPOOR AND FROM GLOBAL EMISSION MANAGEMENT PVT.LTD. THE FACTS WITH REGARD TO THE IMPUGNED DISPUTES ARE THAT THE ASSESSEE HAS REC EIVED SHARE APPLICATION MONEY OF RS.1,30,21,000/- FROM SHRI FOR AM DATTANI KAPOOR AND A FURTHER SUM OF RS.17,54,000/- FROM GLO BAL EMISSION MANAGEMENT PVT.LTD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. AO CALLED UPON THE ASSESSEE TO FILE NECESS ARY EVIDENCES, ITA NO.4412/MUM/2016 CO.NO.110/MUM/2018 MANAGING EMISSION P.LTD. 7 INCLUDING NAME AND ADDRESS OF THE PARTIES FROM WHOM , SHARE APPLICATION MONEY HAS BEEN RECEIVED. IN RESPONSE, T HE ASSESSEE, VIDE LETTER DATED 05/11/2012 HAS SUBMITTED THAT THE NAME AND ADDRESS ALONG WITH CONFIRMATION LETTERS FROM THE PA RTIES. IN ORDER TO VERIFY CORRECTNESS OF CLAIM MADE BY THE ASSESEE, TH E LD. AO HAD ISSUED NOTICE U/S 133(6) OF THE I.T.ACT, 1961 TO BO TH THE PARTIES. THE NOTICE ISSUED TO GLOBAL EMISSION MANAGEMENT PVT.LTD . HAS BEEN RETURNED UNSERVED, HOWEVER THE OTHER NOTICE ISSUED TO SHRI FORAM DATTANI KAPOOR HAS BEEN SERVED TO THE PARTY, FOR W HICH THE CREDITOR HAS FILED NECESSARY EVIDENCES CALLED FOR BY THE LD. AO. THE LD. AO HAVING TAKEN NOTE OF EVIDENCES FILED BY THE ASSESEE , CAME TO THE CONCLUSION THAT THE ASSESSE HAS FAILED TO PROVE SHA RE APPLICATION MONEY RECEIVED FROM TWO PARTIES AND ACCORDINGLY, M ADE ADDITION OF RS. 1,47,75,000/- U/S 68 OF THE I.T.ACT,1961. ON AP PEAL, THE LD.CIT(A) AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESEE HAS DELETED ADDITIONS MADE BY THE LD. AO TOWARDS SHARE APPLICATION MONEY RECEIVED FROM SHRI FORAM DATTANI KAPOOR, HOWE VER CONFIRMED ADDITIONS MADE TOWARDS SHARE APPLICATION MONEY RECEIVED FROM GLOBAL EMISSION MANAGEMENT PVT.LTD. 8. THE LD. DR, SUBMITTED THAT THE LD.CIT(A) HAS ERR ED IN DELETING THE ADDITION OF RS.1,30,21,000/-, IN RESPECT OF SHA RE APPLICATION MONEY RECEIVED FROM SHRI FORAM DATTANI KAPOOR, WITH OUT APPRECIATING THE FACT THAT THE ASSESEE HAD NOT FILE D SIGNED CONFIRMATION LETTER FROM THE SHARE APPLICANT DURING THE ASSESSMENT PROCEEDINGS AND HAS ALSO, FAILED TO DISCHARGE ITS O NUS TO ESTABLISH GENUINENESS OF THE TRANSACTIONS AND THE IDENTITY OF THE PARTIES. ITA NO.4412/MUM/2016 CO.NO.110/MUM/2018 MANAGING EMISSION P.LTD. 8 9. THE LD. AR FOR THE ASSESEE, ON THE OTHER HAND SU BMITTED THAT THE ASSESEE HAS DISCHARGED ITS ONUS BY FILING ENORM OUS DOCUMENTS, INCLUDING NAME AND ADDRESS OF THE CREDITORS, THEIR PAN NUMBER, BANK STATEMENTS AND OTHER RELEVANT DETAILS TO PROVE THE IDENTITY AND GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. THE LD. AR, FURTHER SUBMITTED THAT ALTHOUGH, THE LD.CIT (A) HAS ACCEPTED THE TRANSACTIONS BETWEEN THE ASSESEE AND SHRI FORAM DATTANI KAPOOR IS GENUINE, BUT FAILED TO APPRECIATE THE OTH ER TRANSACTIONS WITH GLOBAL EMISSION MANAGEMENT PVT.LTD. EVEN THOUG H, THE ASSESEE HAS FILED VARIOUS DETAILS, INCLUDING SIGNED CONFIRMATION FROM THE CREDITOR. 10. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. IT IS AN ADMITTED FACT THAT THE SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM CLOSELY HELD COMPANIES AND RELATED PARTIES OF THE ASSESEE. IT IS ALSO, NOT IN DISPUTE THAT ONE OF THE CREDITOR SHRI FORAM DATTANI KAPOOR HAS RESPONDED TO NOTICE ISSUED U/S 133(6) OF THE I.T.ACT, 1961 AND FILED ALL EVIDENCES CALLED FOR BY THE LD. AO, INCLUDING CONFIRMATION LETTER FOR HAVING PAID SHARE APPLICATI ON MONEY TO THE ASSESSEE ALONG WITH BANK STATEMENTS, FINANCIAL STAT EMENTS FOR THE YEAR AND INCOME TAX RETURN FILED ACKNOWLEDGMENT. IN SOFAR AS, GLOBAL EMISSION MANAGEMENT PVT.LTD, ALTHOUGH NOTICE ISSUED U/S 133(6) WAS RETURNED UNSERVED, BUT FACT REMAINS THAT THE AS SESSE HAS SUBSEQUENTLY FILED SIGNED CONFIRMATION LETTER FROM THE PARTY ALONG WITH FINANCIAL STATEMENTS, BANK STATEMENTS AND, ITR FILED FOR THE RELEVANT YEAR. THESE ARE UNDISPUTED FACTS. THE LD.C IT(A) HAS ACCEPTED THE CLAIM OF THE ASSESEE, INSOFAR AS SHARE APPLICATION MONEY RECEIVED FROM MR.FORAM DATTANI KAPOOR, WHERE HE HAD ITA NO.4412/MUM/2016 CO.NO.110/MUM/2018 MANAGING EMISSION P.LTD. 9 RECORDED CATEGORICAL FINDING THAT THE ASSESSE HAS P ROVED, THE INGREDIENTS PROVIDED U/S 68 OF THE I.T.ACT, 1961 AN D CONSEQUENTLY, THE ADDITIONS TOWARDS AMOUNT RECEIVED FROM SAID PAR TY IS UNJUSTIFIED. THE REVENUE FAILS TO BRING ON RECORD ANY EVIDENCES TO PROVE THAT THE FINDINGS OF FACT RECORDED BY THE LD.CIT(A) IS INCOR RECT. RATHER, THE LD. DR HAS RELIED UPON PLETHORA OF JUDICIAL PRECEDE NTS, WHICH ARE NOT AT ALL APPLICABLE TO THE FACTS OF PRESENT CASE. ON THE OTHER HAND, THE ASSESEE HAS FILED COMPLETE SET OF DOCUMENTS, INCLUD ING CONFIRMATION LETTER OBTAINED FROM THE CREDITOR, AS PER WHICH THE CREDITOR HAS ISSUED A SIGNED CONFIRMATION LETTER ALONG WITH NAME AND AD DRESS AND PAN NUMBER. THE ASSESSEE HAS ALSO FILED BANK STATEMENTS OF THE CREDITORS TO PROVE MOVEMENT OF FUNDS THROUGH PROPER BANKING CHANNELS. THE ASSESSEE HAS ALSO FILED FINANCIAL STA TEMENT OF THE CREDITORS AND INCOME TAX RETURN ACKNOWLEDGMENT WHI CH PROVES THE CAPACITY OF THE CREDITORS TO EXPLAIN SOURCE OF INCO ME FOR SHARE APPLICATION MONEY PAID TO THE ASSESSEE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) WAS RIGHT IN DEL ETING ADDITIONS MADE BY THE LD. AO TOWARDS SHARE APPLICATION MONEY RECEIVED FROM SHRI FORAM DATTANI KAPOOR. INSOFAR AS, SHARE APPLIC ATION MONEY RECEIVED FROM GLOBAL EMISSION MANAGEMENT PVT.LTD, T HE ASSESSEE HAS FILED NECESSARY EVIDENCES, INCLUDING SIGNED CON FIRMATION FROM THE CREDITOR, BANK STATEMENTS, AND FINANCIAL STATEM ENTS FOR THE RELEVANT PERIOD AND INCOME TAX RETURN ACKNOWLEDGMEN T COPY. FROM THE ABOVE RECORDS, IT IS VERY CLEAR THAT THE ASSESE E HAS RECEIVED SHARE APPLICATION MONEY THROUGH PROPER BANKING CHAN NELS. THE CREDITOR HAS FILED ITS FINANCIAL STATEMENTS AND ITR ACKNOWLEDGMENT, WHICH CLEARLY SUGGEST THAT THE CREDITOR HAS ENOUGH SOURCE OF INCOME TO EXPLAIN THE CAPACITY TO ADVANCE SHARE APPLICATIO N MONEY. THE OTHER FACTS BROUGHT OUT BY THE LD. AO, AS WELL AS T HE LD.CIT(A) ITA NO.4412/MUM/2016 CO.NO.110/MUM/2018 MANAGING EMISSION P.LTD. 10 REGARDING CHANGE OF NAME AND SUBSEQUENT CLOSER OF T HE COMPANY IS NOT MATERIAL TO DECIDE THE ISSUE, BECAUSE WHAT IS R ELEVANT TO SEE IS WHETHER, THREE INGREDIENTS PROVIDED U/S 68 OF THE I .T.ACT,1961, HAS BEEN SATISFACTORILY EXPLAINED OR NOT. IN THIS CASE , ON PERUSAL OF DETAILS FILED BY THE ASSESSEE, WE FIND THAT THE ASS ESEE HAS DISCHARGED ITS ONUS AND PROVE THE CREDIT BEING SHAR E APPLICATION MONEY RECEIVED FROM GLOBAL EMISSION MANAGEMENT PVT. LTD WITH ALL POSSIBLE EVIDENCES. THEREFORE, WE ARE OF THE CONSID ERED VIEW THAT THE LD. AO, AS WELL AS THE LD.CIT(A) WERE ERRED IN CONFIRMED ADDITIONS MADE TOWARDS SHARE APPLICATION MONEY RECE IVED FROM GLOBAL EMISSION MANAGEMENT PVT.LTD. HENCE, WE DIREC T THE LD. AO TO DELETE ADDITIONS MADE TOWARDS SHARE APPLICATION MONEY RECEIVED FROM GLOBAL EMISSION MANAGEMENT PVT.LTD. 11. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20/0 5/2020 SD/- (RAVISH SOOD) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 20/05/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI