ACIT, SATNA V. M/s. Ramkumar Suresh Kumar, SATNA

ITA 46/JAB/2010

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0887 (ITAT-JABALPUR)
• Duration Of Justice: 8 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 07-06-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 08-07-2010
• Court: TRIBUNAL
• Keywords: Bogus Share capital; Unexplained investment; Search and seizure; Loose papers; Document seized; Share purchase agreement; Source of fund; Retrospective amendment; Additional evidence; Question of law; Corroborative evidences; Onus to prove; Revised return; Documents seized; TDS
• Section: 40(a)(ia); 139(5); 205; 195; 131; 68; 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R. C. SHARMA, ACCOUNTANT MEMBER I.T.A. NO.44/JBP/2010 ASSESSMENT YEAR:2008-09 A.C.I.T., VS. MR. RAM KUMAR GOYAL, CIRCLE- SATNA, C/O RAMKUMAR SURESH KUMAR, SATNA. BIRLA ROAD, SATNA. PAN:ADDPG5334P (APPELLANT) (RESPONDENT) I.T.A. NO.45/JBP/2010 ASSESSMENT YEAR:2008-09 A.C.I.T., VS. M/S JSM FINANCE PVT. LTD. CIRCLE- SATNA, BIRLA ROAD, SATNA SATNA. PAN:AAACJ5856G (APPELLANT) (RESPONDENT) I.T.A. NOS.46 TO 48/JBP/2010 ASSESSMENT YEARS:2006-2007 TO 2008-2009 A.C.I.T., VS. M/S RAM KUMAR SURESH KUMAR CIRCLE- SATNA BIRLA ROAD, SATNA. SATNA. PAN NO.AAFFR3899D (APPELLANT) (RESPONDENT) REVENUE BY : SMT. HARSHVARDHINI BUTI, CIT/DR SHRI ABHISHEK SHUKLA, SR. DR RESPONDENT BY : SHRI VED JAIN, ADVOCATE DATE OF HEARING : 11.09.2013 DATE OF PRONOUNCEMENT : 30.10.2013 2 O R D E R PER JOGINDER SINGH: THESE APPEALS ARE BY THE REVENUE AGAINST THE RESPEC TIVE ORDERS OF THE LEARNED FIRST APPELLATE AUTHORITY FOR DIFFERENT ASS ESSMENT YEARS AND PERTAIN TO DIFFERENT ASSESSEES. FIRST WE SHALL TAKE UP I.T.A. N O.44/JBP/2010 (ASSESSMENT YEAR 2008-2009) WHEREIN THE ONLY GROUND RAISED PERT AINS TO DELETING THE ADDITION OF RS.15 LAKHS. 2. DURING THE HEARING WE HAVE HEARD DR. HARSHVARDHIN I BUTI, LD. CIT/DR AND SHRI ABHISHEK SHUKLA, LEARNED SR. D.R. FOR THE REVE NUE AND SHRI VED JAIN, LEARNED COUNSEL FOR THE ASSESSEE. THE CRUX OF ARGUM ENT ADVANCED BY SHRI SHUKLA IS THAT ORIGINAL RETURN WAS FILED ON 10 TH SEPTEMBER, 2009 WHICH WAS REVISED ON 2 ND NOVEMBER, 2009, THEREFORE, THE ADDITION WAS MADE ON THE BASIS OF REVISED RETURN WHICH WAS IGNORED BY THE LEARNED CIT(A ) WHILE DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. IT WAS ALSO PLEADED THAT IN THE REVISED RETURN THE SURRENDERED AMOUNT WAS WITHDRAWN. ON THE O THER HAND MR. JAIN STRONGLY DEFENDED THE IMPUGNED ORDER BY INVITING OU R ATTENTION TO THE IMPUGNED ORDER AND THE FINDING CONTAINED THEREIN. IT WAS ALS O POINTED OUT THAT ASSESSMENT WAS MADE ON THE BASIS OF REVISED RETURN IN RAM KUMAR SURESH KUMAR AND THE FACTS ARE IDENTICAL. 3. WE HAVE CONSIDERED THE SUBMISSIONS ADVANCED FROM BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE RECORD, WE FOUND THAT 3 ASSESSING OFFICER HAS ASSESSED RS.15 LACS IN THE HA NDS OF THE ASSESSEE ON THE PLEA THAT IN THE ORIGINAL RETURN, FILED U/S 139(4), THE ASSESSEE HAS OFFERED THIS INCOME AND SINCE REVISED RETURN COULD NOT BE FILED IN TERMS OF SEC. 139(5), THE INCOME OFFERED BY THE ASSESSEE IN THE REVISED RETUR N WAS NOT ACCEPTED BY THE ASSESSING OFFICER. HOWEVER, WHILE ASSESSING THIS INCO ME IN HANDS OF THE ASSESSEE, THE ASSESSING OFFICER HAS IGNORED THE REV ISED RETURN FILED IN CASE OF FIRM M/S. RAMKUMAR SURESHKUMAR WHEREIN THIS INCOME WA S INCORPORATED IN THE REVISED RETURN AND ASSESSMENT WAS ALSO MADE ON THE B ASIS OF THIS REVISED RETURN. MERE FILING OF REVISED RETURN BELATEDLY CANNOT BE M ADE REASON FOR NOT ACCEPTING THE ASSESSEES CLAIM WHEN SAME INCOME HAVE BEEN OFFE RED IN THE HANDS OF FIRM AND ALSO ACCEPTED BY THE DEPARTMENT WHILE FRAMING A SSESSMENT. THE LD. CIT(A) DELETED THE ADDITION IN THE HAND OF THE ASSESSEE IN INDIVIDUAL CAPACITY AFTER HAVING FOLLOWING OBSERVATIONS: ON PERUSAL OF RECORD OF M/S RAM KUMAR SURESH KUMAR IT IS FOUND THAT THE INCOME FOR AY 2008-09 OF THE FIRM WAS ASSE SSED BASED ON THE REVISED RETURN FILED ON 2.11.2009 INSTEAD OF TH E ORIGINAL RETURN FILED ON 10.9.2009. THE FACTS OF THE CASE OF THE AP PELLANT AND THE FIRM M/S RAM KUMAR SURESH KUMAR WERE IDENTICAL AND THE RETURN IN THAT CASE ALSO WAS ORIGINALLY FILED U/S 139(4) THER EFORE IN THE PRESENT CASE IF THE ASSESSMENT COULD NOT BE COMPLET ED BASED ON THE REVISED RETURN, IT WAS NOT CORRECT FOR THE ASSE SSING OFFICER TO ASSESS THE INCOME OF THE APPELLANT BASED ON THE REV ISED RETURN IN THE CASE OF THE FIRM. IF IN THE FIRMS CASE, THE AS SESSMENT WAS COMPLETED ON THE BASIS OF REVISED RETURN, THEN IN A LL FAIRNESS, THE SAME YARDSTICK SHOULD HAVE BEEN ADOPTED IN THE CASE OF THE APPELLANT TOO. AS PER LAW IT WAS THE ORIGINAL RETUR N IN THE BOTH THE CASES WHICH WAS FILED U/S 139(4), THEREFORE, THE AS SESSMENT SHOULD HAVE BEEN COMPLETED IN BOTH THE CASES ON THE BASIS OF SAID RETURN ONLY. AS A MATTER OF FACT THE ONLY REASON FOR REVIS ING THE RETURN OF 4 THE APPELLANT AS WELL AS OF THE FIRM M/S RAM KUMAR SURESH KUMAR WAS THAT THE AMOUNT ORIGINALLY SURRENDERED AT THE T IME OF SEARCH IN THE NAME OF THE APPELLANT, ACTUALLY WAS REQUIRED TO BE SURRENDERED IN THE HANDS OF THE FIRM M/S RAM KUMAR SURESH KUMAR . IT IS SO BECAUSE THE SURRENDER WHICH WAS BASED ON THE LOOSE PAPERS/DOCUMENTS AND OTHER SEIZED MATERIAL PERTAINE D TO THE FIRM AND NOT TO THE APPELLANT SHRI RAM KUMAR GOYAL. IT I S NOT THE CASE OF THE ASSESSING OFFICER THAT THIS SURRENDER OF RSW .15,00,000/- WAS ON ACCOUNT OF ANY SPECIFIC UNDISCLOSED INCOME OF TH E APPELLANT, WHICH COULD BE WELL CO-RELATED WITH THE SEIZED DOCU MENTS/ASSETS RELATED WITH THE APPELLANT. THE AMOUNT OF SURRENDER HAD BEEN TAXED BY THE ASSESSING OFFICER, SIMPLY BECAUSE IT W AS ORIGINALLY INCLUDED IN THE INCOME OF THE APPELLANT AND ACCORDI NGLY THE RETURN WAS FILED, INITIALLY AND THE APPELLANTS REVISED RE TURN COULD NOT BE TAKEN INTO ACCOUNT BECAUSE OF LEGAL INFIRMITY. THE ASSESSING OFFICER WAS CORRECT ON ADOPTING THE ORIGINAL RETURN FILED O N 8.9.2009 BECAUSE OF THE FIRST RETURN WAS FILED U/S 139(4) AN D NOT U/S 139(1) AND THEREFORE COULD NOT BE REVISED AGAIN U/S 139(4) . AS PER THE PROVISION OF SECTION 139(5) ONLY THAT RETURN WHICH WAS FILED WITHIN THE PRESCRIBED TIME LIMIT U/S 139(1) CAN BE REVISED AND NOT THE RETURN FILED U/S 139(4). HOWEVER IT WAS THE DUTY OF THE ASSESSING OFFICER TO TAX ONLY TRUE AND CORRECT INCOME OF THE APPELLANT AND THEREFORE IF SURRENDER OF RS.15,00,000/- INADVERTEN TLY MADE IN THE HANDS OF APPELLANT WAS EXCLUDED IN HIS RETURN, IT S HOULD HAVE BEEN EXCLUDED AND ONLY THE BALANCE AMOUNT SHOULD HAVE BE EN TAXED AS APPELLANTS INCOME. MORE SO BECAUSE THE IDENTICAL A MOUNT OF RS,.15,00,000/- HAD BEEN TAXED IN THE HANDS OF M/S RAM KUMAR SURESH KUMAR, OVER AND ABOVE THE ORIGINAL DECLARED INCOME OF RS.1,89,84,034/-. AS THE ASSESSMENT IN THE CASE OF M/S RAM KUMAR SURESH KUMAR WAS BASED ON THE REVISED RETURN, THERE BY ADOPTING THE RETURN INCOME OF RS.2,05,19,850/-, THIS SURREND ERED AMOUNT INHERENTLY STOOD INCLUDED IN THE REVISED RETURN FOR AY 2008-09. THUS TAXATION OF RS.15,00,000/- IN THE HANDS OF THE APPELLANT WOULD TANTAMOUNT TO DOUBLE ADDITION WHICH IS AGAINST THE FACTS OF THE CASE. ACCORDINGLY, REMOVAL/DEDUCTION OF RS.15,00,00 0/- FROM THE RETURNED INCOME OF RS.23,15,320/- WAS IMPERATIVE SO AS TO TAX, INSTEAD, TRUE AND CORRECT INCOME OF THE APPELLANT F OR THE PRESENT AY. THUS WHAT COULD BE TAXED WAS ONLY RS.8,15,320/- AND NOT RS.23,15,320/-. ACCORDINGLY ADDITION OF RS.15,00,00 0/- IS HEREBY DELETED. IF THE ASSERTION MADE BY THE LEARNED RESPECTIVE CO UNSELS, OBSERVATION MADE IN THE ASSESSMENT ORDER, CONCLUSION DRAWN IN THE IMPUG NED ORDER ARE KEPT IN 5 JUXTAPOSITION AND ANALYZED, THERE IS UNCONTROVERTED FINDING IN THE IMPUGNED ORDER THAT IN THE CASE OF M/S RAM KUMAR SURESH KUMA R, THE INCOME FOR ASSESSMENT YEAR 2008-2009 OF THE FIRM WAS FINALIZED ON THE BASIS OF REVISED RETURN FILED ON 2 ND NOVEMBER, 2009 INSTEAD OF ORIGINAL RETURN FILED ON 10 TH SEPTEMBER, 2009 MORE SPECIFICALLY WHEN THE FACTS OF THE PRESENT ASSESSEE ARE IDENTICAL TO THE FACTS IN M/S RAM KUMAR SURESH KUMA R AS THE RETURN WAS ORIGINALLY FILED U/S 139(4). IN THE ABSENCE OF ANY CONTRARY MATERIAL, NO DIFFERENT YARDSTICK CAN BE APPLIED IN THE CASE OF THE ASSESSE E, MORE SPECIFICALLY WHEN THE REASON FOR REVISING THE ORIGINAL RETURN WAS THAT TH E SURRENDERED AMOUNT WAS TO BE SURRENDERED IN THE HANDS OF THE FIRM BECAUSE THE LOOSE PAPERS / DOCUMENTS, SEIZED BY THE DEPARTMENT PERTAIN TO THE FIRM AND NO T TO THE PRESENT ASSESSEE. WE FURTHER NOTE THAT IT IS NOT THE CASE OF THE DEPA RTMENT THAT THE SURRENDERED AMOUNT RELATES TO THE PRESENT ASSESSEE, THEREFORE, IT WAS THE DUTY OF THE ASSESSING OFFICER TO ASSESS THE CORRECT INCOME. IN THE CASE OF M/S RAM KUMAR SURESH KUMAR, IN THE REVISED RETURN THE INCOME WAS A DOPTED AT RS.2,05,19,850/- WHICH INCLUDES THE SURRENDERED INCOME OF RS.15 LAKHS MEANING THEREBY IF THE CONTENTION OF THE REVENUE IS ACCEPTED IT TANTAMOUNT S TO DOUBLE ADDITION. IN VIEW OF THE UNCONTROVERTED FACT RECORDED BY THE LEAR NED CIT(A), WE FIND NO INFIRMITY IN THE SAME. THUS, THE STAND OF THE LEARN ED CIT(A) IS AFFIRMED, THEREFORE, APPEAL OF THE REVENUE IS DISMISSED. 6 4. NOW WE SHALL TAKE UP THE APPEAL IN I.T.A. NO.45/JB B/2010 (ASSESSMENT YEAR 2008-2009) WHEREIN THE SOLITARY GROUND RAISED B Y THE REVENUE PERTAINS TO DELETING THE ADDITION OF RS.10,986,048/- WHICH WAS M ADE U/S 40(A)(IA) OF THE ACT OUT OF BROKERAGE AND COMMISSION. THE CRUX OF ARGUME NT ON BEHALF OF THE REVENUE IS IN SUPPORT OF THE ASSESSMENT ORDER WHEREI N THE ADDITION WAS MADE. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSE SSEE DEFENDED THE IMPUGNED ORDER. 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSI ON WE ARE SUMMARIZING HEREUNDER THE DETAILS OF COMMISSION WHICH WAS CLAIME D TO BE LIABLE FOR TDS AND SUBJECT MATTER OF DISALLOWANCE: PAYEES NAME DT. OF PAYMENT AMOUNT PAID (RS.) DT. OF DEDUCTION OF TDS DT. OF DEPOSIT OF TDS ACHORMAN FASTNERS 28.2.2008 263469 31.3.2008 29.5.2008 KESHAV ENTERPRISES 28.2.2008 130250 31.3.2008 29.5.2008 LANDMARK PLYWOOD & LAMINATES 28.2.2008 49622 31.3.2008 29.5.2008 PRAKASH PLY CENTRE 28.2.2008 32971 31.3.2008 29.5.2008 RAMA PANELS PVT. LTD. 28.2.2008 4864 31.3.2008 29.5.2008 RAMA PANELS PVT. LTD. 28.2.2008 8607 31.3.2008 2 2 . 9 .2008 RAM KUMAR SURESH KUMAR 28.2.2008 75189 31.3.2008 29.5.2008 VARUN PLYWOOD 28.2.2008 16835 31.3.2008 29.5.2008 RAMA PANELS PVT. LTD. 28.2.2008 44234 31.3.2008 29.5.2008 RIDHI SIDHI ASSOCIATREXS 28.2.2008 307 31.3.2008 2 9 . 5 .2008 KANCHAN EXPORTS PVT. LTD. 28.2.2008 295200 31.3.2008 2 1 . 8 .2008 KESHAV ENTERPRISES 28.2.2008 174500 31.3.2008 29.5.2008 TOTAL: 1096048 4.2 IF THE AFORESAID TABLE IS ANALYZED, ONE FACT IS OOZING OUT THAT THE TOTAL AMOUNT OF RS.10,96,048/- WAS PAID ON OR BEFORE 28/08 /2008 I.E. PRIOR TO DUE 7 DATE OF FILING THE RETURN. THE DISALLOWANCE U/S 40(A) (IA) OF THE ACT CAN ONLY BE MADE IN RESPECT OF EXPENDITURE WHICH ARE PAYABLE AN D IF SUCH EXPENDITURE IS ALREADY PAID BEFORE LAST DATE OF FILING RETURN OF I NCOME, NO DISALLOWANCE CAN BE MADE. THE RELEVANT RECORD WAS MADE AVAILABLE BY THE ASSESSEE RIGHT FROM ASSESSMENT STAGE UNTIL THE SECOND APPELLATE STAGE. EVEN AS PER THE DECISION FROM HON'BLE APEX COURT IN THE CASE OF ORISSA STATE WAREHOUSING CORPORATION VS. CIT 237 ITR 589, THE PROVISION HAS TO BE INTERPRETED STRICTLY THAT TOO ON THE BASIS OF LANGUAGE USED IN THE SECTION. THE LEGAL FICTION, IF ANY, HAS TO BE SEEN FOR A DEFINITE PURPOSE I.E. FOR A LIMITED PURPOSE FOR WHIC H THEY ARE CREATED. AS PER FINANCE ACT, 2008 THE AMENDMENT WAS MADE, AS SUB CLA USE (A) TO CLAUSE (IA) WAS BROUGHT INTO STATUTE, WITH RETROSPECTIVE EFFECT F ROM 01/04/2005 AS PER WHICH IT WAS PROVIDED THAT IF THE TDS IS PAID BEFORE THE DU E DATE SPECIFIED IN SECTION 139(1) THEN THE PROVISIONS OF SECTION 40(A)(IA) WILL NOT ATTRACT. IN THE PRESENT APPEAL THE TAX WAS PAID WELL BEFORE THE DUE DATE OF F ILING OF RETURN I.E. 30/10/2008. THUS, WE FIND NO INFIRMITY IN THE CONCLU SION DRAWN BY THE LEARNED CIT(A). OUR VIEW GETS SUPPORT FROM THE DECISION IN I NCOME TAX OFFICER VS. ANIL KUMAR & COMPANY 344 ITR 170 (KAR), CIT VS. VIRGIN CRE ATION (ITA NO.302 OF 2011 DATED 23/11/2011) (CAL) AND THE DECISION IN CI T VS. TALBROS P. LTD. (ITA NO.218 OF 2013 ORDER DATED 06/09/2013) (DEL). AS A LL THE PAYMENTS WERE MADE BEFORE DUE DATE OF FILING OF RETURN I.E. 28.8.2008 AND NOTHING REMAINED OUTSTANDING, THEREFORE, PROVISIONS OF SECTION 40(A) (IA) OF THE ACT CANNOT BE 8 INVOKED AS PER AMENDMENT BROUGHT IN STATUTE, WHICH WAS HELD TO BE CURATIVE IN NATURE, THEREFORE, APPLICABLE RETROSPECTIVELY AS WAS HELD BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF VIRGIN CREATION (SUPRA). EVEN AS PER SECTION 200(1), THE TIME LIMIT PRESCRIBED AS PER RULE 30 OF I.T. RULES, ALL SUMS DEDUCTED UNDER DIFFERENT SECTIONS LIKE 192 TO 194, 190 ETC. SHALL BE CREDITED TO THE ACCOUNT OF THE CENTRAL GOVERNMENT WITHIN THE LAST DATE OF FILING RE TURN IN WHICH DEDUCTION WAS MADE UNDER RULE 30(2) AND SINCE THE ASSESSEE DEPOSI TED THE AMOUNTS WITHIN THE PRESCRIBED LIMIT, THEREFORE, THE ENTIRE EXPENDITURE , CLAIMED AS DEDUCTION, IS ALLOWABLE. FINALLY, WE FIND NO MERIT IN THE APPEAL O F THE REVENUE. THIS APPEAL IS ALSO DISMISSED. 5. NOW WE SHALL TAKE UP I.T.A. NO.46/JBP/2010 (ASSESSM ENT YEAR 2006- 2007). THE FIRST GROUND RAISED PERTAINS TO DELETING ADDITION OF RS.6,33,00,000/- MADE U/S 69 OF THE ACT ON PROTECTIVE BASIS. THE LD. COUNSEL FOR THE REVENUE DEFENDED THE ADDITION MADE ON PROTECTIVE BASIS WHERE AS THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT NO PROTECTIVE ADDITION IS WARRANTED IN THIS CASE. IT WAS POINTED OUT THAT ON THE BASIS OF DETAILED SUBMISSION MADE FOR AY 2008-09 AS SUBSTANTIVE ADDIT ION IS MADE IN THAT YEAR, THEREFORE, NO PROTECTIVE ADDITION CAN BE MADE. 5.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. ASSESSING OFFICER MADE PROTECTIVE ADDITION OF RS.6,33,00,000/- IN THE CASE OF THE PRESENT ASSESSE E IN THIS YEAR AND SUBSTANTIVE 9 ADDITION FOR AY 2008-09 (ITA NO.48/JAB/2010). FOR T HE DETAILED REASONS DELIBERATED UPON BY US WHILE DEALING WITH THE ADDITIO N MADE ON SUBSTANTIVE BASIS FOR AY 2008-09, WE ARE OF THE CONSIDERED OPINION THA T NO PROTECTIVE ADDITION IS WARRANTED OTHERWISE IT WILL AMOUNT TO DOUBLE ADDITION. THE JABALPUR BENCH OF THE TRIBUNAL IN THE CASE OF RAMSEWAK SHARMA IN ITA NOS. 3 46 & 347/JAB/2007 DELETED THE ADDITIONS MADE ON PROTECTIVE BASIS. EVE N OTHERWISE, WHEN SUBSTANTIVE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER, THE PROTECTIVE ADDITION, SO MADE, CANNOT STAND ON ITS LEGS. THEREFO RE, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. CIT(A). 6. SO FAR AS GROUND NO. (II) IS CONCERNED, OUR VIEW TAKEN IN I.T.A. NO.45/JBP/2010 (ASSESSMENT YEAR 2008-2009) WILL ALSO BE APPLICABLE TO THIS APPEAL ALSO. IN THIS GROUND THE ADDITION OF RS.3,7 1,706/- MADE U/S 40(A)(IA) OF THE ACT OUT OF THE BROKERAGE AND COMMISSION, HAS BE EN CHALLENGED, WHICH WAS DELETED BY THE LEARNED CIT(A). SINCE THE FACTS ARE IDENTICAL, FOLLOWING THE SAME REASONING AS DISCUSSED HEREINABOVE, WE FIND NO INFIR MITY IN THE CONCLUSION DRAWN BY LEARNED CIT(A). 7. THE LAST GROUND RAISED IN THIS APPEAL PERTAIN TO DELETING THE ADDITION OF RS.92,853/- MADE ON ACCOUNT OF NON-PAYMENT OF FBT WIT HIN THE PRESCRIBED TIME LIMIT. THE CRUX OF ARGUMENT ON BEHALF OF THE REVENU E IS THAT THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER. ON THE OTHE R HAND, THE LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. 10 7.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. DURING HEARING THE LEARNED COU NSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO PAGE 23 OF THE PAPER BOOK EVIDENCI NG THAT THE FBT AMOUNT WAS DEBITED TO THE PROFIT AND LOSS ACCOUNT, WHICH THE A SSESSEE HIMSELF HAS ADDED TO COMPUTATION (PAPER BOOK PAGE 2). THUS, WE ARE OF THE VIEW THAT THERE CAN BE NO DISALLOWANCE OF AN EXPENSE WHICH HAS NOT BEEN CLAI MED BY THE ASSESSEE. THUS, APPEAL OF THE DEPARTMENT IS DISMISSED. 8. NOW WE SHALL TAKE UP I.T.A.NO.47/JBP/20100 (ASSESSM ENT YEAR 2007- 2008). IN THIS APPEAL BOTH THE GROUNDS RAISED BY T HE REVENUE ARE NON-PAYMENT OF FBT AND THE DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT OUT OF BROKERAGE AND COMMISSION. THE LEARNED COUNSEL FOR THE ASSESSEE CO NTENDED THAT BOTH THESE ISSUES WILL BE COVERED BY THE DECISION OF EARLIER AP PEALS. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. WHILE DISPOSING O F THE APPEAL IN EARLIER PART OF THIS ORDER BOTH THESE GROUNDS HAVE BEEN DEALT WITH I N ITA NO.46/JAB/2010 (AY 2006-07). DETAILED FINDING HAS BEEN RECORDED BY THE LD. CIT(A) AT PAGE 5 OF THE APPELLATE ORDER ACCORDING TO WHICH THE ASSESSEE HAD PAID ENTIRE AMOUNT OF RS.12,56,924/- ON 26.12.2006 AND 24.1.2007 WHICH WAS PRIOR TO THE CLOSE OF THE FY. AFTER REFERRING THE AMENDMENT BROUGHT IN SEC. 4 0(A)(IA) BY AMENDING THE ACT W.E.F. 1.4.2005, THE LD. CIT(A) HAS DELETED THE ADDIT ION. FINDING RECORDED BY THE LD. CIT(A) HAS NOT BEEN CONTROVERTED BY THE DEPARTME NT BY BRINGING ANY POSITIVE MATERIAL ON RECORD. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE 11 FINDING RECORDED BY THE LD. CIT(A). BY FOLLOWING THE SAME REASONING AS DISCUSSED HEREINABOVE, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN IN THE IMPUGNED APPEAL. THUS, WE DISMISS THIS APPEAL OF THE REVENUE. 9. NOW WE SHALL TAKE UP THE APPEAL IN I.T.A. NO.48/JBP /2008 (ASSESSMENT YEAR 2008-2009). THE FIRST GROUND RAISED IN THIS A PPEAL PERTAINS TO DELETING THE ADDITION OF RS.6,33,00,000/- MADE U/S 69 OF THE ACT (INVESTMENT MADE IN SHARES). THE CRUX OF ARGUMENTS ADVANCED ON BEHALF OF THE REVENUE IS THAT THIS INVESTMENT WAS MADE OUT OF UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSMENT ORDER WAS DEFENDED. IT WAS PLEADED THAT E VEN AFTER CONSIDERABLE TIME-GAP, FROM THE DATE OF ISSUANCE OF SHARE CERTIF ICATE, NO CONVINCING EXPLANATION WAS OFFERED BY THE ASSESSEE. IT WAS ALSO PLEADED THAT THE ASSESSEE FIRM DID NOT PRODUCE ANY DOCUMENTARY PROOF IN THE S HAPE OF ANY RESOLUTION PASSED BY THE COMPANY I.E. RAMA PANELS, TO THE EFFE CT THAT THE ORIGINAL SHARE CERTIFICATES, ISSUED BY IT, WERE CANCELLED AND FRESH CERTIFICATES WERE ISSUED. THE CONCLUSION DRAWN IN THE ASSESSMENT ORDER FOR MAKING ADDITION ON SUBSTANTIVE BASIS U/S 69 OF THE ACT WAS DEFENDED. 9.1 ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE SUPPORTED THE CONCLUSION DRAWN IN THE IMPUGNED ORDER BY SUBMITTING THAT SINCE THE DOCUMENTS WERE NOT FOUND FROM THE POSSESSION OF THE ASSESSEE, THEREFORE, THE PRESUMPTION U/S 292-C OF THE ACT IS NOT AVAILABLE TO THE DEPART MENT, MORE SPECIFICALLY WHEN THE SHARE CERTIFICATES WERE NOT FOUND IN THE POSSESS ION OF THE ASSESSEE. PLEA WAS 12 ALSO RAISED THAT THE PREMISES, WHICH WAS SEARCHED, WAS IN THE POSSESSION AND IN THE CONTROL OF VARIOUS CONCERNS, THEREFORE, IT WAS A COMMON BUSINESS PREMISES. IT WAS CONTENDED THAT THIS CLAIM OF THE ASSESSEE CAN BE VERIFIED FROM THE COPY OF THE PANCHNAMA. OUR ATTENTION WAS INVITED TO THE INVE NTORY IN WHICH IT HAS BEEN MENTIONED THAT THE DOCUMENTS, BOOKS OF ACCOUNTS ETC . WERE SEIZED FROM VARIOUS BUSINESS CONCERNS AND SUCH INDIVIDUALS HAVE BEEN DU LY NAMED IN THE PANCHNAMA. THE CRUX OF THE ARGUMENTS ON THIS ASPECT IS THAT THE PREMISES WHICH WAS SEARCHED BELONGED TO VARIOUS BUSINESS CONCERNS/G ROUP OF INDIVIDUALS. MR. JAIN FURTHER CONTENDED THAT PRESUMPTION CANNOT BE D RAWN THAT THE DOCUMENTS WERE BELONGING TO ONE CONCERN, NAMED IN THE PANCHNAM A, WERE FOUND IN THE POSSESSION OF OTHER CONCERN WITHIN THE SAME PREMISES . IT WAS ALSO PLEADED THAT THERE MUST BE SOME MATERIAL ON RECORD TO HOLD THAT THE SHARE CERTIFICATES RELATED TO M/S. RAMA PANELS PVT. LTD. WERE FOUND FROM THE PO SSESSION OF THE ASSESSEE. RELIANCE WAS PLACED UPON THE DECISION IN ACIT VS. VAT IKA GREEN FIELDS P. LTD. (2009) 121 TTJ (DEL) 208. SO FAR AS PRESUMPTION U/ S 292-C OF THE ACT IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE CONTEND ED THAT IT IS A REBUTTABLE PRESUMPTION, THEREFORE, DEEMING PROVISIONS CANNOT B E MECHANICALLY APPLIED TO THE FACTS OF THE PRESENT APPEAL. OUR ATTENTION WAS I NVITED TO THE DECISIONS FROM HON'BLE APEX COURT IN THE CASE OF P.R. METRANI VS. CIT (297 ITR 209) (SC) AND CIT VS. RAJPAL SINGH RAM AVTAR (288 ITR 498) (ALL). S O FAR AS SURROUNDING CIRCUMSTANCES ARE CONCERNED, RELIANCE WAS PLACED UPO N THE DECISION IN NIRMAL 13 FASHION (P) LTD. VS. DCIT (2009) 123 TTJ 180 (CAL) A LONG WITH THE DECISION IN USHAKANT N. PATEL VS. CIT (282 ITR 553) (GUJ). 9.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT T HE ASSESSEE IS A PARTNERSHIP FIRM. SEARCH AND SEIZURE OPERATION WAS CARRIED OUT A T THE BUSINESS PREMISES OF RAMKUMAR SURESHKUMAR GOYAL GROUP ALONG WITH THE PREM ISES OF THE ASSESSEE. SIMULTANEOUSLY, SEARCH AND SEIZURE OPERATION WERE CA RRIED OUT AT THE RESIDENTIAL PREMISES OF THE PARTNERS. THE ASSESSEE DECLARED TOT AL INCOME OF RS.1,89,84,034/- IN ITS RETURN FILED ON 10.9.2009 WHICH WAS REVISED T O RS.2,05,19,850/- ON 2.11.2009. HOWEVER, THE ASSESSMENT WAS FRAMED ON A TO TAL INCOME OF RS.8,63,81,991/- WHEREIN ADDITION WAS RS.6,33,00,000/ - WAS MADE U/S 69 OF THE ACT HOLDING THE SHARE CERTIFICATES BELONGING TO THI RD PARTIES BELONGED TO THE ASSESSEE ALONG WITH OTHER ADDITIONS AND DISALLOWANCES . THE BUSINESS PREMISES LOCATED AT BIRLA ROAD WAS COVERED BY THE SEARCH PART Y AND THE SEARCH WARRANTS WERE ISSUED IN THE NAMES OF VARIOUS BUSINESS CONCERN S WHICH WERE OPERATING FROM THAT COMMON PREMISES. THE OTHER BUSINESS CONCER NS WERE M/S. RAMA PANELS P. LTD., M/S. JAGDAMBA SHAH MILLS AND M/S. J SM FINANCE P. LTD. DURING THE COURSE OF THE SEARCH, ORIGINAL SHARE CERTIFICAT ES, ISSUED BY M/S. RAMA PENAL P. LTD. IN FAVOUR OF VARIOUS OUTSIDE SHAREHOLDERS, WORT H RS.633 LACS, WERE FOUND. DURING COURSE OF ASSESSMENT PROCEEDINGS, IT WAS CLAI MED THAT THESE DOCUMENTS BELONG TO M/S. RAMA PANEL P. LTD. AND NOT TO THE AS SESSEE. RIGHT FROM 14 ASSESSMENT STAGE, THE CLAIM OF THE ASSESSEE IS THAT SINCE THE ASSESSEE AS WELL AS M/S. RAMA PANEL P. LTD. AND OTHER CONCERNS WERE OPER ATING FROM THE COMMON BUSINESS PREMISES, PRESUMPTION CANNOT BE DRAWN THAT THESE CERTIFICATES BELONG TO THE ASSESSEE AND NO MATERIAL WAS FOUND, DURING SE ARCH, SUGGESTING THAT THE INVESTMENT WAS MADE BY THE ASSESSEE IN THE ALLEGED S HARES OF M/S. RAMA PANEL P. LTD. THE LD. ASSESSING OFFICER MADE THE ADDITION U/S 69 OF THE ACT IN THE CASE OF THE ASSESSEE AND ALSO MADE PROTECTIVE ADDITION I N AY 2006-07. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION AGAINST WHICH THE RE VENUE IS IN APPEAL BEFORE THIS TRIBUNAL. BEFORE COMING TO ANY CONCLUSION, WE ARE REP RODUCING HEREUNDER THE RELEVANT PORTION OF THE CONCLUSION DRAWN IN THE IMPU GNED ORDER: THE CONTENTIONS OF THE APPELLANT ARE FOUND TO BE CO RRECT. THE PANCHNAMA PREPARED ON 22.12.2007 MAKES IT ABUNDANTLY CLEAR THAT THE COMMON WARRANT OF SEARCH WAS ISSUED IN THE CASES OF FOLLOWING PERSONS WHOSE NAME ARE FOUND TOGETHER IN THE PANCHNAMAM/S RAMKUMAR SURESH KUMAR, M/S RAMA PAANELS PVT.LTD. M/S RAMA PLYWOOD P VT., M/S. JAGADAMBA SAW MILLS, M/S. JSM FINANCE PVT. M/S SANJAY TRANSPORT. RAMAWOOD CRAFT LTD. RAMKUMAR GOYA L .NARESH GOYAL .SURESH GOYAL SANJAY GOYAL ETC. WHOSE BUSINESS PREMISES IS SITUATED AT BIRLA ROAD SATNA. EVEN THE LISTS /INVENTORIES OF BOOKS OF ACCOUNT AND DOCUMENT S SEIZED ETC. ANNEXED WITH THE PANCHANAMA. REVEAL ALL THESE NAME MEANING THEREBY THAT BELONGED TO ALL THESE PERSONS OR ANY ONE OF THEM .IT DOES NOT SPECIFY AS TO WHICH PARTIC ULAR PERSON THESE SEIZED DOCUMENTS BELONG TO .THIS MAKE CLEAR T HAT THE PREMISE SITUATED AT BIRLA ROAD, SATNA WAS A COMMON BUSINESS PREMISES AND WAS BEING USED BY VARIOUS PERSONS/BUSINESS CONCERNS COMMONLY. NOW THE SEIZED DOCUMENTS I.E. THESE SPECIFIC SHARE CERTIFICATES MA KE IT AMPLY CLEAR THAT THEY BELONGED TO RAMA PANELS PVT. LTD. A SEPARATE AND INDEPENDENT ENTITY. A COMPANY INCORPORATED UNDE R THE COMPANIES ACT 1956 .IF THE A, O. WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE ABOUT THE OWNERSHIP OF THESE 15 SHARE CERTIFICATES. HE COULD HAVE DIRECTLY EXAMINED THE SHARE HOLDERS SO AS TO0 ASCERTAIN AS TO WHOM THESE CERTIF ICATES BELONGED TO. ENQUIRIES FROM REGISTRAR OF COMPANIES ALSO HAVE CONFIRMED THE CORRECT FACTS. AS LTD. A MATTER OF FACT, IN POST SEARCH ENQUIRIES THE RAMA PANELS PVT. LTD. ALS O ADMITTED THE OWNERSHIP OF SHARE CERTIFICATES AND WE LL EXPLAINED THE REASONS FOR HAVING THE SAME IN THEIR POSSESSION. THESE FACTS COULD HAVE VERY WELL BEEN V ERIFIED FROM THE RECORDS OF THE REGISTRAR OF COMPANIES AND UNLESS SOME EVIDENCE WAS BROUGHT ON RECORD TO PROVE THAT T HESE BELONGED TO THE ASSESSEE. IT COULD NOT BE HELD CONC LUSIVELY THAT THEY BELONGED TO THE ASSESSEE AND INVESTMENT M ADE IN RESPECT OF THESE SHARE WAS OUT OF UNDISCLOSED INCOM E OF THE APPELLANT .IT IS FOUND THAT NOT EVEN AN IOTA OF EVI DENCE HAS BEEN BROUGHT ON RECORD TO PROVE THAT THE INVESTMENT IN THE THESE SHARE CERTIFICATES WAS MADE BY THE APPELLANT TO REBUT THE PRESUMPTION OF THE AO. THAT THEY BELONGED TO T6 HE APPELLANT BECAUSE OF THEWHICH ALSO IT CANNOT BE HEL D THAT THE INVESTMENT MADE WAS OUT OF UNDISCLOSED INCOME OF TH E APPELLANT. BECAUSE OF THESE REASONS ADDITION OF RS6,33,00,000/- IN THE HANDS OF THE APPELLANT WAS N OT IN ACCORDANCE WITH THE LAW .SECONDLY THE CONTENTS OF T HE SHARE CERTIFICATES THEMSELVES REVEAL THAT INVEST ME IN PU RCHASER OF THESE SHARES WAS MADE DURING THE F.Y.2005-06 AND TH EREFORE COULD CORRECTLY BE TAXED AS PER LAW FOR .A Y.2006-0 7 ONLY AND FOR NOT FOR ANY OTHER OR THE PRESENT ASSESSMENT YEA R. FURTHER THE APPELLANT HAD SUBMITTED SUFFICIENT DOCUMENTARY EVIDENCES TO PROVE THAT THE INVESTORS IN THESE SHAR E CERTIFICATES WERE THE COMPANIES REGISTERED UNDER TH E COMPANIES ACT.1956 IN RESPECT OF EACH SHARE HOLDER. THE APPELLANT HAS SUBMITTED COPIES OF CERTIFICATE OF IN CORPORATION, MEMORANDUM OF ASSOCIATION AND ARTICLE, COPY OF SHAR E APPLICATION FROM AND PAN OF THESE COMPANIES. THUS T HESE DOCUMENTS ESTABLISH THE IDENTITY OF THESE SHARE HOL DERS WERE INDEPENDENT ENTITIES DISTINCTLY IDENTIFIABLE PERSON S. THE INCOME TAX RETURNS FILED BY THESE DIFFERENT COMPANI ES ALSO PROVE THEIR INDEPENDENT IDENTITY. APART FROM ESTAB LISHING THEIR IDENTITY, THE APPELLANT HAS ALSO SUBMITTED B ANK ACCOUNT OF THESE INVESTOR COMPANIES AND OF AUDITE D ACCOUNTS OF THESE COMPANIES SO AS TO PROVE THE AVAI LABILITY OF FUNDS WITH THEM AND ITS SOURCE, THEIR CREDITWOR THINESS AND THE GENUINENESS OF THE TRANSACTION. IN FACT THE SE 18 DIFFERENT COMPANIES WERE THE SHARE HOLDERS WHO HAD INVESTED FUNDS OUT OF THE KNOWN SOURCES AVAILABLE WITH THEM AND THE APPELLANT FIRM HAD NOTHING TO DO WITH INVESTMENT IN THESE SHARE. ONCE THE IDENTITY WAS ESTABLISHED POSSIBLY N O FURTHER 16 ENQUIRIES NEEDED TO BE MADE .SINCE THE SHARE HOLDE RS OF THE ASSESSEE COMPANY WERE IN EXISTENCE. THEY WERE ASSES SED TO TAX, COMPLETE DETAILS WERE AVAILABLE, SHARE CAPITAL MONEY WAS RECEIVED THROUGH A/C PAYEE CHEQUES AND WERE CLEARED THROUGH PROPER BANKING CHANNELS THE, A.O. WAS NOT J USTIFIED IN DISBELIEVING THE CAPITAL INVESTED BY THE SHARE HOLDER COMPANIES. AS HELD BY THE HONBLE DELHI HIGH COURT (FULL BENCH ) IN THE CASE OF CIT VS SOPHIYA FINANCE LTD. 1994 205 ITR 98(DELHI) (FB), THAT IF SHARE HOLDERS ARE IDENTIFIED AND IT IS ESTABLISHED THAT THEY HAD INVESTED MONEY IN THE PURCHASE OF SHARE ,THEN POSSIBLY NO FURTHER ENQUIR Y NEED BE MADE ,IN THE INSTANT CASE THE IDENTITY ,THE CREDITW ORTHINESS AND THE SOURCE FOR SHARE CAPITAL ALL PROVED .EVEN I F THE ASSESSING OFFICER HAD ANY DOUBT ABOUT THE GENUINENE SS OF THE SOURCE OF FUNDS AVAILABLE WITH EACH SHARE HOLDERS IN THEIR BOOKS, IT WAS THEIR ONUS TO PROVE THE SOURCE TO THE IR RESPECTIVE ASSESSING OFFICERS BUT IT WAS NOT THE RE SPONSIBILITY OF THE ASSESSEE COMPANY TO PROVE THE SOURCE OF THE SOURCE .SIMILARLY AS HELD BY THE SAME HIGH COURT IN THE CA SE OF CIT VS STELLAR INVESTMENT LTD. 1991 1992 ITR 287 (DELHI ) THAT EVEN IF IT BE PRESUMED THAT THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL WERE NOT GENUINE UNDER NO CIRCUMSTANC ES THE AMOUNT OF SHARE CAPITAL BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE COMPANY .HERE IS THE CASE WHERE EVE N IF THE SHARE CAPITAL WAS CONSIDERED NOT TO BE GENUINE , TH E ADDITION COULD NOT HAVE BEEN MADE IN THE HANDS OF THE ASSESS EE COMPANY . IT COULD VERY WELL HAVE BEEN MADE IN RESP ECT OF THE INDIVIDUAL SHARE PURCHASERS ALMOST IDENTICAL IS SUE HAS BEEN DECIDED BY THE HONBLE JURISDICTIONAL ITAT I.E . ITAT JABALPUR BENCH ,JABALPUR IN THE CASE OF MEERA ENGI NEERING COMMERCIAL LIMITED COMPANY PVT. LTD. ACIT, JABALPUR IN ITA NO.508/JAB/94( A.Y.1991-92 ) REPORTED IN 1997 2 5 ITC 200 THAT THE SHARE APPLICATION MONEY RECEIVED FROM SHARE- HOLDERS FOR ALLOTMENT OF SHARES AND THE ASSESSING O FFICER FOUND SUCH APPLICATIONS EXIST BUT MONEY UN-PROVED, NO FURTHER ENQUIRY NEEDED TO BE MADE NOR THE ASSESSEE WAS REQUIRED TO PROVE CREDITWORTHINESS OF SHARE-HOLDERS FOR INVESTMENT IN SHARE CAPITAL. NOW HERE IN THE PRESEN T CASE ALSO THE EXISTENCE OF SHAREHOLDERS WAS BEYOND DOUBT AND WAS WELL ACCEPTABLE TO THE ASSESSING OFFICER ALSO T HAT SUCH SHARE APPLICANTS EXISTED AND EVEN IF THE SOURCE OF MONEY REMAINED UNPROVED, NO ADDITION COULD BE MADE IN THE HANDS OF THE APPELLANT WERE AS IN THE INSTANT CASE EVEN T HE SOURCE WAS PROVED. FURTHER, AS HELD BY THE HON'BLE DELHI H IGH COURT IN THE CASE OF CIT VS. VALUE CAPITAL SERVICES PVT. LTD. REPORTED IN 2008 307 ITR 334 (DELHI) THAT THE DEPAR TMENT 17 MUST SHOW THAT THE INVESTMENT MADE BY THE SUBSCRIBE RS AS SHARE APPLICATION MONEY ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE TO BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. NOW IN THE PRESENT CASE NO SUCH EVIDENCE HAS BEEN BROUGHT ON RECORD TO MAKE OUT A CASE THAT THE SOURC E OF SHARE APPLICATION MONEY EMANATED FROM THE COFFERS O F THE ASSESSEE HIMSELF AND UNDER SUCH FACTS AND CIRCUMSTA NCES OF THE CASE, THE ADDITION MADE WAS UN-CALLED FOR. IT WOULD BE WORTHWHILE TO REFER TO THE FOLLOWING CA SE LAWS:- 1. CIT VS. DWARIKADHISH INVESTMENT (P.) LTD. - [2008] 167 TAXMAN 321 (DELHI) - SECTION 68 OF THE INCOME-TAX A CT. 1961 -- CASH CREDIT _ ASSESSMENT YEAR 1997-98 - ASSESSIN G OFFICER MADE ADDITIONS ON ACCOUNT OF SHARE APPLICATION MONE Y RECEIVED BY ASSESSEE ON FINDING THAT NONE OF SHARE APPLICANTS WERE FOUND TO EXIST AT ADDRESS GIVEN IN CONFIRMATIO NS OF SHARE APPLICANTS COMMISSIONER (APPEALS) ADMITTED ADDITIONAL EVIDENCE FURNISHED BY ASSESSEE AND, INTE R ALIA, OBSERVED THAT SHARE APPLICANTS CONCERNED WERE IDENT IFIED AND THEY CONFIRMED PAYMENT OF MONIES TO ASSESSEE FO R PURPOSE OF SHARES; TRANSACTIONS IN QUESTION WERE BY CHEQUES; THERE WAS NO GROUND FOR DISBELIEVING CONTENTS OF AF FIDAVITS OF SUBSCRIBERS; ASSESSING OFFICER HAD NOT ISSUED SUMMO NS TO SUBSCRIBERS OR HAD ASKED ASSESSEE TO PRODUCE THEM A ND MOST OF SUBSCRIBERS WERE COMPANIES INCORPORATED WIT H REGISTRAR OF COMPANIES - COMMISSIONER (APPEALS) ACCORDINGLY, DELETED ADDITION - TRIBUNAL UPHELD ORD ER OF COMMISSIONER (APPEALS) - WHETHER TRIBUNAL WAS JUSTI FIED - HELD, YES. 2. JAYA SECURITIES LTD. VS. COMMISSIONER OF INCOME-TAX -II, KANPUR - [2008] 166 TAXMAN 7 (ALL.) - SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDITS - ASSESSMENT YE ARS 1996-97 AND 199798 - WHETHER ANY ADDITION UNDER SEC TION 68 CAN BE MADE IN RESPECT OF INVESTMENT MADE BY DIF FERENT PERSONS IN SHARE CAPITAL OF ASSESSEE-COMPANY, LIMIT ED BY SHARES, WHETHER PUBLIC OR PRIVATE - HELD, NO. 3. ALLEN BRADLEY INDIA LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX - [2002] 74 TTJ 604 (DELHI) - INCOME - CASH CREDIT SUBSCRIPTION TO SHARE CAPITAL AND LOAN - IN CASE OF LIMITED COMPANIES JURISDICTION OF AO WOULD BE LIMIT ED ONLY TO SEE WHETHER IDENTITY OF SHAREHOLDERS IS ESTABLISHED AND WHETHER THEY EXIST OR NOT - ONCE IDENTITY IS ESTABL ISHED, THEN, POSSIBLY NO FURTHER ENQUIRIES NEED TO BE MADE - SIN CE THE SHAREHOLDERS OF ASSESSEE-COMPANY WERE IN EXISTENCE, THEY 18 WERE ASSESSED TO TAX, COMPLETE DETAILS WERE AVAILAB LE, SHARE CAPITAL MONEY AS WELL AS LOAN WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND THEY WERE CLEARED THROUGH PROPER BANKING CHANNELS, AO WAS NOT JUSTIFIED IN DISBELIEV ING THE CAPITAL INVESTED BY THE SHAREHOLDER COMPANIES - SIM ILARLY, AO WAS NOT JUSTIFIED IN DISBELIEVING THE LOAN TAKEN FROM DTL AS THE CHEQUES WERE CLEARED THROUGH BANK CHANNELS A ND CONFIRMATION AND SUPPORTING EVIDENCE WAS FILED - CI T(A) WAS JUSTIFIED IN DELETING THE ADDITIONS. 4. ACIT VS. VENKATESHWAR ISPAT P. LTD. - [2009] 319 ITR 393 (CHHATTISGARH) - UNEXPLAINED INVESTMENT - SHARE APP LICATION MONEY - NOTICES TO SHARE APPLICANTS - INVESTMENT NO T CONFIRMED BY SOME APPLICANTS - NOT UNDISCLOSED INCO ME OF ASSESSEE - INCOME TAX ACT, 1961,S.68. 5. CIT VS. VALUE CAPITAL SERVICES PVT LTD [2008] 30 7 ITR 334 (DEL) THE ASSESSEE BEFORE THE HON. DELHI HIGH COUR T IN THE APPEAL PREFERRED BY THE REVENUE WAS PRIVATE LIMITED COMPANY. FOR THE ASSESSMENT YEAR 2001-02 THE ASSESS ING OFFICER SOUGHT ASSESSEE'S EXPLANATION WITH RESPECT TO THE APPLICATION MONEY RECEIVED BY IT AMOUNTING TO RS. 5 1 LACS FROM 33 PERSONS. DURING THE COURSE OF THE INVESTIGA TIONS CONDUCTED PENDING THE ASSESSMENT OUT OF 33 PERSONS 3 HAD RESPONDED TO THE SUMMONS. THUS, THE LD. ASSESSING O FFICER ADDED RS.46 LAKHS CONTRIBUTED BY THE REMAINING 30 P ERSONS AS SHARE APPLICATION MONEY AS UNEXPLAINED CASH CRED IT U/S 68 OF THE ACT. BEING AGGRIEVED BY THE ASSESSMENT OR DER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE FIRST APPELLATE AUTHORITY CONFIRMED THE ASSESSMENT ORDER. ON AN FURTHER APPEAL TO THE APPELLATE TRIBUNAL THE ADDITI ON WAS DELETED RELYING ON THE DECISIONS OF HON. DELHI HIGH COURT IN THE CASE OF CIT VS. STELLAR INVESTMENT LTD. [1991] 192 ITR 287 AND CIT VS. SOFIA FINANCE LTD. [1994] 205 ITR 9 8 (DEL.). THE HON. COURT OBSERVED THAT IT IS QUITE OBVIOUS TH AT IT IS VERY DIFFICULT FOR THE ASSESSEE TO SHOW THE CREDITW ORTHINESS OF STRANGERS. IF THE REVENUE HAS ANY DOUBT WITH REGARD TO THEIR ABILITY TO MAKE THE INVESTMENT, THEIR RETURNS MAY B E REOPENED BY THE DEPARTMENT. IN ANY CASE, WHAT IS CL INGING IS THE ADDITIONAL BURDEN ON THE REVENUE. IT MUST SHOW THAT EVEN IF THE APPLICANT DOES NOT HAVE THE MEANS TO MA KE THE INVESTMENT, THE INVESTMENT MADE BY THE APPLICANT AC TUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSE SSEE. THIS HAS NOT BEEN DONE IN SO FAR AS THE PRESENT CASE IS CONCERNED 19 AND THAT HAS BEEN NOTED BY THE TRIBUNAL ALSO. 6. CIT VS. ELECTRO POLYCHEM LTD.- (2007) 294 ITR 6 61 (MAD) CASH CREDIT SHARE APPLICATION MONEY EVEN IF SUB SCRIBERS TO THE INCREASED SHARE CAPITAL WERE NOT GENUINE, SH ARE CAPITAL CANNOT BE REGARDED AS UNDISCLOSED INCOME. 7. ITO VS. LANYARD FOODS LTD. ITA NO. 5549 AND 5550/M/2003, ORD. DTD. 31.1.2007 ITAT MUMBAI D BENCH MUMBAI [2007] JUNE, SECTION 68 OF THE I.T. ACT. 1961 - UNEXPLAINED SHARE CAPITAL - NO FURTHER ENQUI RY NEED TO BE MADE WHERE IDENTITY OF THE SHAREHOLDERS ESTAB LISHED IN THE PRESENT CASE, THE AO RANDOMLY SELECTED 9 6 SHAREHOLDERS OUT OF THE LIST CONTAINING NAMES OF 19 6 SHAREHOLDERS AND ISSUED THEM THE SUMMONS. OUT OF TH E SAME, 22 SUMMONS COULD NOT BE SERVED AND FROM THE REMAINING, ALL EXCEPT 3 PERSONS, CONFIRMED HAVING SUBSCRIBED TO THE SHARE CAPITAL. HELD : ACCORDING TO THE TRIBUNAL, THE RATIO LAID DOWN IN T HE CASE OF SOPHIA FINANCE LTD. COULD ONLY BE APPLIED WHERE THE IDENTITY OF THE SHAREHOLDER WAS NOT ESTABLISHED. IT FURTHER OBSERVED THAT THE SHAREHOLDERS EXISTED, THEN NO FURTHER ENQU IRY NEED BE MADE. ACCORDINGLY, THE ADDITION WAS DELETED. 8. CIT VS. A.R. LEASING P. LTD. - [2006] 194 TAXA TION 323 (DEL) - IT WAS HELD THE IDENTITY OF THE SUBSCRIBERS WAS ESTABLISHED AND ADDITION U/S 68 OF THE ACT WAS NOT CALLED FOR 9. P.K. SETHI VS. CIT (2006) 286 ITR 318 (GUWAHAT I) - THE HON'BLE HIGH COURT HELD THAT OUT OF THREE CONDITION S. I.E. (1) IDENTITY OF CREDITORS; (2) THEIR CREDITWORTHINE SS AND (3) GENUINENESS OF THE TRANSACTIONS, TWO CONDITIONS WERE SATISFIED, THEY ARE IDENTIFIED AND THEIR CREDITWORT HINESS HAD BEEN ESTABLISHED. AS FAR AS GENUINENESS OF TRANSACT IONS ASSESSEE PROVED THAT ENTIRE AMOUNT INVOLVED WAS REC EIVED BY ACCOUNT PAYEE CHEQUES. THERE WAS NO MATERIAL TO SHO W THAT TRANSACTIONS ARE SHOWN FALSE SO TRIBUNAL'S FINDING WAS TOTALLY WRONG AND ADDITION WAS DELETED. 10. CIT VS. ILLAC INVESTMENTS P. LTD. [2006] 287 ITR 135 (DELHI) - THE TRIBUNAL HELD THAT THE ADDITION MADE U/S 68 BY THE AO ON THE GROUND THAT THE IDENTITY OF THE SUBSC RIBERS NOT ESTABLISHED, BUT ASSESSEE DISCHARGED THE ONUS BY RE FERENCE 20 TO THE MATERIAL PRODUCED TO ESTABLISH THE IDENTITY OF THE SUBSCRIBERS. 11. CIT VS. FIRST POINT FINANCE LTD. [2006] 286 I TR 477(RAJ.) - ON APPEAL BY THE REVENUE, THE HIGH COUR T UPHELD THE DECISION OF THE TRIBUNAL AND HELD AS UNDER: (I) IN A CASE OF AMOUNT SHOWN AS SHARE CAPITAL, THE BURDEN OF PROOF ON THE ASSESSEE COMPANY LIES TO THE EXTE NT OF MAKING OUT A CASE THAT THE INVESTORS EXIST AND THER EAFTER IT IS NOT FOR THE ASSESSEE TO FURTHER PROVE WHERE THEY HA VE BROUGHT MONEY FROM TO INVEST WITH IT. (II) IT WAS NOT DENIED THAT ALL THE SHAREHOLDERS / SHARE APPLICANTS WERE GENUINELY EXISTING PERSONS. IT WAS ALSO NOT DE NIED THAT EACH OF THEM WAS AN INCOME-TAX ASSESSEE AND COPIES OF THE RETURN OF THEIR INCOME WERE ALSO PLACED BEFORE THE ASSESSING OFFICER. THERE WAS NO PRESUMPTION THAT THE ASSESSEE WAS THE BENAMI OWNER OF THE INVESTMENT MADE BY THE EXISTING PERSONS. THE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITION. 12. BARKHA SYNTHETICS LTD. V. ACIT, [2006] 197 CTR 432 (RAJ.) CASH CREDIT - COMPANY - SHARE APPLICATION MO NEY RECEIVED THROUGH BANKING CHANNEL - BURDEN APPROVED ON ASSESSEE IS TO PROVE THE EXISTENCE OF THE PERSON IN WHOSE NAME SHARE APPLICATION IS RECEIVED -NO BURDEN TO PR OVE CREDITWORTHINESS. 13. DY. CIT VS. ROHINI BUILDERS -- [2002] 256 ITR 3 60 (GUJ.) - THE IDENTITY OF CREDITORS WERE PROVED AND THE AMOUN TS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES. THE INITIAL BURD EN OF PROVING CREDITS WERE DULY DISCHARGED AND THE SOURCE OF CREDITS NEED NOT BE PROVED. THE FACT THAT THE EXPLA NATION WAS NOT SATISFACTORY WOULD NOT AUTOMATICALLY RESULT IN DEEMING AMOUNTS AS INCOME OF ASSESSEE. THE SECTION USES THE WORD 'MAY' AND NOT 'SHALL' [SLP DISMISSED BY SUPREME COU RT - (2002) 254 ITR (ST.) 275]. 14. ITO VS. SURESH KALMADI - [1988] 73 CTR 80 (PUNE TRIB) (TM) : [1988] 32 TTJ 300 (PUNE) (TM) - IDENTIFY OF CREDITOR ESTABLISHED AND ENTRY SHOWN TO BE NOT FICTITIOUS. A SSESSEE CANNOT BE CALLED UPON TO PROVE THE WORTH OF THE CRE DITORS' CREDITOR. 15. SHRI SURINDRA SINGH PROP.: M/S.DHAWALA SERVICE STATION V. DY.CIT [1993] 113 TAXATION 11 (JAI. TRIB .) - CASH 21 CREDIT: ASSESSEE HELD NOT TO PROVE SOURCE OF SOURCE : IDENTITY AND CREDITWORTHINESS OF CREDITORS HAVING BEEN PROVE D. SINCE THE AVAILABILITY OF FUNDS STAND ESTABLISHED, EVEN IF THERE WAS ANY DOUBT ABOUT ITS SOURCES, IT WERE THES E COMPANIES WHO WERE ACCOUNTABLE TO EXPLAIN THE SAME BUT NOT THE APPELLANT FIRM. BECAUSE OF THESE REASONS TH E ADDITION OF RS.6,33,00,000/- MADE IN THE HANDS OF THE APPELL ANT FIRM ON SUBSTANTIVE BASIS FOR A.Y. 2008-09 IS HEREBY DEL ETED. 9.3 IF THE OBSERVATIONS MADE IN THE ASSESSMENT ORDE R, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD AND TH E ASSERTION MADE BY THE LD. RESPECTIVE COUNSEL ARE KEPT IN JUXTAPOSITION AND AN ALYSED, WE FIND THAT FOR MAKING THE ADDITION U/S 69 OF THE ACT, THE LD. ASSE SSING OFFICER HAS DISCUSSED THE ISSUE AT LAST PARA ONWARDS OF PAGE 11 OF THE ASSESSM ENT ORDER WHEREAS THE LD. CIT(A) HAS DELIBERATED UPON AT PAGE 14 ONWARDS. FROM PAGE 45 OF THE PAPER BOOK, ONE UNDISPUTED FACT IS OOZING OUT THAT NAME O F M/S. RAMA PANELS P. LTD. IS ALSO MENTIONED ALONG WITH ITS ADDRESS. THE SEIZED DOC UMENTS NOWHERE SPECIFICALLY MENTIONED THE NAME OF THE ASSESSEE BUT CONTAINS THE NAME OF M/S. RAMA PANELS, A COMPANY INCORPORATED UNDER THE COMPA NIES ACT, WHICH IS AN INDEPENDENT ENTITY. IT IS ALSO NOTED THAT THE LD. A SSESSING OFFICER HAS NEITHER MADE ANY INDEPENDENT INQUIRY EITHER FROM RAMA PANEL S OR THE SHAREHOLDERS, WHOSE NAMES ARE APPEARING IN THE SEIZED DOCUMENTS/SH ARE CERTIFICATES NOR MADE ANY INQUIRY FROM THE REGISTRAR OF COMPANIES REGARDI NG OWNERSHIP OF THESE SHARES. THE LD. COUNSEL FOR THE ASSESSEE, POINTED O UT THAT DURING POST-SEARCH PROCEEDINGS, M/S. RAMA PANELS, HAS ACCEPTED THAT TH ESE DOCUMENTS BELONGS TO IT 22 AND SUCH SHARE CERTIFICATES ARE DULY RECORDED IN TH EIR BOOKS. FOR THIS ASSERTION, OUR ATTENTION WAS INVITED TO PAGES 75, 81 AND 88 OF THE PAPER BOOK. IT IS ALSO NOTED THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD B Y THE ASSESSING OFFICER THAT THE ASSESSEE IN FACT MADE ANY INVESTMENT IN SUCH SH ARES. WE ALSO NOTE THAT THERE WAS NO INFORMATION OR EVIDENCE WITH THE ASSESSI NG OFFICER THAT BOGUS ENTRY HAS BEEN MADE IN THE SHARE CERTIFICATES IN THE NAME OF THE ASSESSEE OR ANY STATEMENT WAS RECORDED REGARDING THE OWNERSHIP OF THE SE SHARE CERTIFICATES QUA- ASSESSEE. IT IS ALSO NOT WORTHY THAT FOLLOWING DOCUME NTS WERE FILED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW TO PROVE THE I DENTITY, GENUINENESS AND CREDITWORTHINESS OF SHAREHOLDERS: S.NO. NAME OF THE SHAREHOLDER SEIZED MATERIAL PAGE NO. PAPER BOOK PAGE NO. 1 MANI MUDA VINCAN P. LTD. 51 & 52 313 TO 347 2 - DO - - DO - - DO - 3 BRAIN TRUST SECURITIES P. LTD. 53 & 54 195 TO 238 4 AKASH GANGA SUPPLIERS LTD. 55 126 TO 159 5 SAHAJ RESOURCES P. LTD. 56 522 - 558 6 ORIENTAL HOLDING LTD. 57 383 - 444 7 LOVELLA VYAPAR P. LTD. 58 282 - 312 8 TEKMIN TRADING P. LTD. 59 607 - 650 9 SILVER TONE SECURITIES P. LTD. 60 559 - 606 10 TIMES TRADELINK P. LTD. 61 651 - 686 11 VARSHA TRADERS P. LTD. 62 732 - 762 12 AFFLUENT DEALCOM P. LTD. 63 94 - 125 13 OPULENT AGENTS P. LTD. 64 348 - 382 14 RIGHT AID CONSULTANTS P. LTD. 65 487 - 519 15 UTPAL VIRCAN P. LTD. 66 687 - 731 16 FORWARD LOOKING ADVISORY SERVICES P. LTD. 67 239 - 281 17 PATKIN TRACEM P. LTD. 68 445 - 486 18 BAZIGAR TRADING P. LTD. NO ADDITION MADE 23 IF THE AFORESAID DETAILS ARE ANALYSED, IT IS SEEN T HAT ALL THE SHAREHOLDERS ARE COMPANIES HAVING SHARES IN THE SCHEDULE INVESTMENT ACCOUNTS WHICH ARE COMING FROM THE BANK ACCOUNT OF SHAREHOLDERS. THE ASSESSING OFFICER NEITHER COMMENTED UPON THE CLAIM OF THE ASSESSEE NOR CONTRO VERTED THE SAME BY FINDING ANY ADVERSE MATERIAL. IT IS ALSO NOT WORTHY THAT AFT ER GETTING THE EXPLANATION FROM THE ASSESSEE, NO INVESTIGATION WAS CARRIED OUT REGARDING THESE DETAILS. EVEN IN THE ASSESSMENT ORDER, NO ALLEGATION HAS BEEN MAD E AGAINST THE SHAREHOLDERS. IT IS ALSO NOT THE CASE THAT SUCH SHAREHOLDERS ARE NOT AVAILABLE OR THE NOTICE/SUMMONS, IF ANY ISSUED, RETURNED BACK UNSERV ED. IN SUCH A SITUATION, THE RATIO LAID DOWN IN FOLLOWING DECISIONS IS WORTH QUOTI NG: (A) CIT VS. SOPHIYA FINANCE LTD., 205 ITR 98 (DEL), (B) CIT VS. OASIS HOSPITALITIES P. LTD., 333 ITR 119 (DEL ), (C) CIT VS. DIVINE LEASING & FINANCE LTD., 299 ITR 268 (D EL), (D) CIT VS. STELLER INVESTMENT LTD., 251 ITR 263 (SC), (E) CIT VS. STELLER INVESTMENT LTD., 192 ITR 298 (DEL), (F) CIT VS. ACHAL INVESTMENT LTD., 268 ITR 211 (DEL), (G) CIT VS. VALUE CAPITAL SERVICES P. LTD., 307 ITR 334 ( DEL), (H) CIT VS. LOVELY EXPORT P. LTD., 319 ITR 5 (SC), (I) CIT VS. KAMDHENU STEELS AND ALLOYS LTD., 248 CTR 33 ( DEL), (J) CIT VS. DOLPHINE CANPACK, 283 ITR 190 (DEL), (K) MAKHANI & TYAGI P. LTD., 267 ITR 433 (DEL), (L) CIT VS. ANTARKTICA INVESTMENT P. LTD., 262 ITR 493 (D EL), (M) CIT VS. K.C. FIBRES LTD., 332 ITR 481 (DEL), AND (N) CIT VS. WINSTRAL PETROCHEMICALS LTD., 330 ITR 603 (DE L), IN THE CASE OF CIT VS. FAIR FINVEST LTD. (ITA NO.232 /2012, ORDER DATED 22.11.2012 AT PAGE 7 PARA 6 ONWARDS), IT WAS OBSERVED AS UNDER: 24 6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE, THE DISCUSSION BY THE CIT(APPEALS) WO ULD REVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIE D COPIES ISSUED BY THE REGISTRAR OF COMPANIES IN RELATION TO THE SH ARE APPLICATION, AFFIDAVITS OF THE DIRECTORS, FORM 2 FILED WITH THE ROC BY SUCH APPLICANTS, CONFIRMATION BY THE APPLICANT FOR COMPA NYS SHARES, CERTIFICATE BY AUDITOR ETC. UNFORTUNATELY, THE ASSE SSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFEREN CE TO BE DRAWN FROM THE READING OF THE INVESTIGATION REPORT AND THE STATEMENT OF MR. MAHESH GARG. TO ELEVATE THE INFERE NCE, WHICH CAN BE DRAWN ON THE BASIS OF READING OF SUCH MATERI AL INTO JUDICIAL CONCLUSIONS, WOULD BE IMPROPER, MORESO WHEN THE ASS ESSEE PRODUCED MATERIAL. THE LEAST THAT ASSESSING OFFICER OUGHT TO HAVE DONE WAS TO INQUIRE INTO THE MATTER BY, IF NECESSAR Y, INVOKING HIS POWERS U/S 131 OF THE ACT SUMMONING THE SHARE APPLI CANTS OR DIRECTORS. NO EFFORTS WERE MADE IN THIS REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCLOSED WAS UN TRUSTWORTHY OR LACKED CREDIBILITY, THE ASSESSING OFFICER MERELY CO NCLUDED ON THE BASIS OF INQUIRY REPORT, WHICH COLLECTED THE CERTAI N FACTS AND THE STATEMENT OF MR. MAHESH GARG THAT THE INCOME SOUGHT TO THE ADDED FELL WITHIN THE DESCRIPTION OF SEC. 68 OF THE ACT. 7. HAVING REGARD TO THE ENTIRETY OF FACTS AND CIRCU MSTANCES, THE COURT IS SATISFIED THAT THE FINDING OF THE TRIB UNAL IN THIS CASE ACCORDS WITH THE RATIO OF THE DECISION OF THE SUPRE ME COURT IN LOVELY EXPORTS (SUPRA). 8. THE DECISION IN THIS CASE IS BASED ON THE PECULI AR FACTS WHICH ATTRACTS THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENCE IN SUPPORT OF THE SHARE A PPLICATION MONEYS, IT IS OPEN TO THE ASSESSING OFFICER TO EXAM INE IT AND REJECT IT ON TENABLE GROUNDS. IN CASE, HE WISHES TO RELY ON THE REPORTS OF THE INVESTIGATION AUTHORITIES, SOME MEAN INGFUL INQUIRY OUGHT TO BE CONDUCTED BY HIM TO ESTABLISH A LINK BE TWEEN THE ASSESSEE AND THE ALLEGED HAWALA OPERATORS, SUCH A L INK WAS SHOWN TO BE PRESENT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA) RELIED UPON BY THE REVENUE. WE ARE, TH EREFORE, NOT TO BE UNDERSTOOD TO CONVEY THAT IN ALL CASES OF SHA RE CAPITAL, ADDED UNDER 68, THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTRACTED, IRRESPECTIVE OF THE FACTS, EVIDENCE AND MATERIAL. N O SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEAL IS ACCORDINGLY D ISMISSED. 25 IN THE CASE OF CIT VS GOYAL SONS GOLDEN STATE PVT L TD. (ITA NO. 212/2012 ORDER DATED 11.04.2012, IDENTICAL VIEW WAS TAKEN BY HONBLE DELHI HIGH COURT. THE DELHI BENCH OF THE TR IBUNAL PLACING RELIANCE UPON THE AFORESAID DECISION, IN THE CASE O F ACIT VS. PANCHANAN INTERNATIONAL PVT. LTD. ( ITA NO. 50/D/20 11 DATED 23.11.2012 IN PARA 8 AND 9 AT PAGE 5 HELD AS UNDER) WE HAVE HEARD THE RIVAL SUBMISSION OF BOTH PARTI ES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAD ACCEPTED SHARE APPLICATION MO NEY OF 10,00,000/- THROUGH BANKING CHANNEL AND HAD FILED DETAILS/DOCUMENTS REGARDING THE ABOVE SAID COMPANIE S. THE ASSESSING OFFICER WITHOUT GOING INTO THE DOCUMENTS AND WITHOUT CONDUCTING ANY ENQUIRY REJECTED THE DETAILS AND MADE THE ADDITION. THE LD CIT(A) AFTER GOING THROUGH THE SUBMISSIONS MADE BY THE LD AR HAD RIGHTLY DELETED T HE ADDITION. THE JUDGMENT OF HONBLE HIGH COURT IN THE CASE OF GOEL SONS GOLDEN ESTATE PVT LTD. SQUARELY FITS IN T HE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN THAT CASE, TH E ASSESSEE HAD ACCEPTED 30 LACKHS AS SHARE APPLICATION MONEY F ROM FIVE COMPANIES AND HAD FILED CONFIRMATIONS. PAN NUMBERS BANK STATEMENT, BALANCE SHEET ETC. WITH THE ASSESSING OFF ICER. THE ASSESSING OFFICER DID NOT CONDUCT ANY ENQURIES AND MADE THE ADDITION. THE RELEVANT OBSERVATION OF HONBLE HIGH C OURT ARE REPRODUCED BELOW:- WE HAVE EXAMINED THE SAID CONTENTION AND FIND THA T THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S HAS FILED CONFIRMATION LETTERS FROM THE COMPANIES, THEI R PAN NUMBER COPY OF BANK STATEMENTS, AFFIDAVITS AND BALA NCE SHEET. THEREAFTER THE ASSESSING OFFICER HAD ASKED T HE ASSESSEE TO PRODUCE THE SAID DIRECTORS/PARTIES. ASS ESSEE EXPRESSED ITS INABILITY TO PRODUCE THEM. THE ASSESSI NG OFFICER DID NOT CONSEQUENT THERETO CONDUCT ANY INQUIRY AND CLOSED THE PROCEEDINGS. THIS IS A CASE WHERE THE ASSESSING OFFICER 26 HAS FAILED TO CONDUCT NECESSARY INQUIRY VERIFICATIO N AND DEAL WITH THE MATTER IN DEPTH SPECIALLY AFTER THE AFFIDAV IT /CONFIRMATIONS ALONG WITH THE BANK STATEMENTS ETC WER E FILED. IN CASE THE ASSESSING OFFICER HAD CONDUCTED THE SAI D ENQUIRIES AND INVESTIGATION PROBABLY THE CHALLENGE MADE BY TH E REVENUE WOULD BE JUSTIFIED. IN THE ABSENCE OF THESE INQUIRIE S AND NON VERIFICATION OF THE DETAILS AT THE TIME OF ASSESSME NT PROCEEDINGS THE FACTUAL FINDINGS RECORDED BY THE AS SESSING OFFICER WERE INCOMPLETE AND SPARSE. THE IMPUGNED ORDE R PASSED CANNOT BE TREATED AND REGARDED ASPERVERSE. TH E APPEAL IS DISMISSED AS NO SUBSTANTIAL QUESTION OF L AW ARISES. 9. FOLLOWING THE VARIOUS JUDICIAL PRONOUNCEMENTS INC LUDING ABOVE WE ARE OF THE OPINION THAT THE CASE OF THE ASS ESSEE IS SQUARELY COVERED BY THE ABOVE JUDGMENT AND THEREFOR E THE LD. CIT (A) HAD RIGHTLY DELETED THE ADDITION. IN VIE W OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD CIT (A). IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, CO NCLUSION DRAWN IN THE IMPUGNED ORDER, ASSERTION MADE BY THE LD. RESPECTIV E COUNSEL AND THE AFORESAID DECISIONS ARE KEPT IN JUXTAPOSITION AND ANALYSED, T HE AVAILABILITY OF FUNDS IS ESTABLISHED AND EVEN IF THERE WAS ANY DOUBT ABOUT TH E SOURCES, THE COMPANIES ARE ACCOUNTABLE TO EXPLAIN THE SOURCE, IF ANY, AND NOT THE ASSESSEE. IF THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANAT ION OF THE ASSESSEE ABOUT THE OWNERSHIP OF SHARE CERTIFICATES, HE WAS DUTY BOU ND TO EXAMINE SUCH SHAREHOLDERS SO AS TO ASCERTAIN TO WHOM THESE CERTIF ICATES ACTUALLY BELONG. INQUIRIES FROM THE REGISTRAR OF COMPANIES ALSO COUL D HAVE CONFIRMED THE TRUE OWNERSHIP/FACTS. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSEE CLAIMED THAT IN POST SEARCH INQUIRIES, RAMA PANELS P. LTD. ALSO ADM ITTED THE OWNERSHIP OF SHARE 27 CERTIFICATES AND THE REASON FOR HAVING THE SAME IN THEIR POSSESSION. THE TOTALITY OF FACTS COULD HAVE BEEN VERIFIED FROM THE RECORD O F THE REGISTRAR OF THE COMPANIES. NO EVIDENCE HAS BEEN BROUGHT ON RECORD B Y THE REVENUE PROVING THAT THE INVESTMENT IN THESE SHARE CERTIFICATES WAS MADE BY THE ASSESSEE FIRM. THE DOCUMENTARY EVIDENCE PUT FORTH BY THE ASSESSEE C LEARLY REBUTS THE PRESUMPTION OF THE ASSESSING OFFICER. THE CONTENTS O F THE SHARE CERTIFICATES THEMSELVES REVEAL THAT INVESTMENT IN PURCHASE WAS MA DE DURING THE FY 2005-06. IN VIEW OF THESE FACTS, WE FIND NO INFIRMITY IN THE C ONCLUSION DRAWN BY THE LD. CIT(A), MORE SPECIFICALLY, WHEN THE EXPLANATION GIVEN BY THE ASSESSEE WAS NOT REBUTTED BY THE REVENUE. 10. SO FAR AS THE CONTENTION OF THE REVENUE THAT SU RROUNDING CIRCUMSTANCES HAS BEEN IGNORED BY THE LD. CIT(A), WHILE ARRIVING AT A PARTICULAR CONCLUSION, ARE CONCERNED, WE ARE OF THE VIEW THAT SURROUNDING CIRCUM STANCES ARE TO BE CONSIDERED WHEN THE PRIMARY FACTS ARE NOT CLEAR. IN THE PRESENT APPEAL, SINCE THE FACTS ARE CRYSTAL CLEAR, THERE WAS NO NEED TO GO INT O SURROUNDING CIRCUMSTANCES. EVEN OTHERWISE, THE MANDATE OF THE ACT IS TO COLLECT LEGITIMATE TAXES ONLY, AND THAT TOO, FROM THE RIGHTFUL PERSON. SEC. 69 OF THE I.T. ACT, 1961 OPENS WITH THE WORDS WHEREIN THE FINANCIAL YEAR IMMEDIATELY PRECEDI NG THE AY, THE ASSESSEE HAS MAD INVESTMENT --------, THEREFORE, IN THE FIR ST INSTANCE, IT IS INCUMBENT UPON THE AUTHORITY TO ESTABLISH THAT THERE WERE INVESTMEN TS MADE BY THE ASSESSEE; THAT SUCH INVESTMENTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS MAINTAINED BY 28 THE ASSESSEE; AND THAT, SUCH INVESTMENTS HAVE BEEN MADE IN THE FY IMMEDIATELY PRECEDING THE AY IN QUESTION. A PLAIN READING OF SU B-SECTION (4A) OF SEC. 132, IT IS APPARENT THAT CLAUSES (I) AND (II) RAISE A PRESU MPTION THAT BOOKS OF ACCOUNTS BELONGED TO THE PERSON SEARCHED, OR THE PERSON FROM WHOSE POSSESSION OR CONTROL THE BOOKS ARE RECOVERED OR FOUND, AND THAT THE CONTENTS OF THE SUCH BOOKS ARE TRUE. HOWEVER, WHEN IT COMES TO CLAUSE (II I) OF SEC. 132(4A) OF THE ACT, THE DISTINGUISHING FEATURE IS THAT THE CLAUSE DOES NOT NECESSARILY RAISE PRESUMPTION QUA THE PERSON SEARCHED OR FROM WHOSE PO SSESSION THE BOOKS ARE FOUND. AS AGAINST THAT THE LANGUAGE EMPLOYED BY CLA USE (III) TALKS OF RAISING A PRESUMPTION IN RELATION TO ANY PARTICULAR PERSON WHO MAY NOT NECESSARILY BE THE PERSON THE SEARCHED. IN THE PRESENT APPEAL, THE EXPLANATION GIVEN BY THE ASSESSEE WAS NEITHER CONTROVERTED NOR EXAMINED BY TH E ASSESSING OFFICER AS WE HAVE DISCUSSED HEREINABOVE, THEREFORE, ON THIS COUN T ALSO, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. THIS GRO UND OF THE REVENUE IS, THEREFORE, HAVING NO MERIT, CONSEQUENTLY, DISMISSED . 11. SO FAR AS GROUND NO. 2 RAISED IN THIS APPEAL IS CONCERNED, WHICH PERTAINS TO THE DELETING THE ADDITION OF RS.12,56,924/- MADE U/ S 40(A)(IA) OF THE ACT OUT OF BROKERAGE AND COMMISSION INCOME. THIS ISSUE HAS AL READY BEEN ADJUDICATED UPON BY US IN THE EARLIER PARA OF THIS ORDER. ON T HE BASIS OF SAME REASONING, THAT TOO ON IDENTICAL FACT, WE FIND NO MERIT IN THIS GROUND OF THE REVENUE, 29 CONSEQUENTLY, WE AFFIRM THE CONCLUSION DRAWN BY THE L EARNED CIT(A) ON THIS ISSUE. THUS, THE APPEAL OF THE REVENUE IS DISMISSED. FINALLY, ALL THE APPEALS OF THE REVENUE ARE DISMISS ED. (ORDER PRONOUNCED IN THE OPEN COURT ON 30 .10 .2013) SD/- SD/- ( R. C. SHARMA ) ( JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:30/10/2013 COPY FORWARDED TO THE: - 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR