ACS Traders (P) Ltd., Howrah V. PCIT-5, Kolkata

ITA 466/KOL/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8317 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-03-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 31-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: IMOKABA JAMIR
• Assessee Lawyers: SANJAY KEJRIWAL
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Principle of natural justice; Source of fund; Question of law; Assessment record; Reassessment proceedings; Borrowed satisfaction; Set aside
• Section: 43CA; 143(3); 50C; 142(1); 133(6); 143(1); 195; 143(2); 64; 13; 22; 147; 131; 68; 148; 263

Judgement Text

ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 1 | P A GE , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI A. T. VARKEY, JM] I.T.A. NO. 466/KOL/2020 ASSESSMENT YEAR: 2010-11 ACS TRADERS PVT. LTD. (PAN: AAHCA 0919 L) VS. PCIT-5, KOLKATA APPELLANT RESPONDENT DATE OF HEARING 12.03.2021 DATE OF PRONOUNCEMENT 26.03.2021 FOR THE APPELLANT SHRI SANJAY KEJRIWAL, A.R FOR THE RESPONDENT SHRI IMOKABA JAMIR, CIT ORDER PER SHRI A. T. VARKEY, JM: THIS APPEAL PREFERRED BY THE ASSESSEE COMPANY IS A GAINST THE ORDER OF LD. PRINCIPAL COMMISSIONER OF INCOME TAX (HEREINAFTER R EFERRED TO AS LD. PCIT)-5, KOLKATA DATED 03.06.2020 FOR AY 2010-11 U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE LD. PCIT DID NOT ENJOY THE REQUISITE JURISDICTION TO INVOKE THE REVISIONAL POW ER U/S 263 OF THE ACT FOR AY 2010- 11, WHICH IS PURELY A LEGAL ISSUE. SO IT NEEDS TO B E ADJUDICATED FIRST. 3. THE LD. A.R SHRI SANJAY KEJRIWAL ASSAILING THE A CTION OF LD. PCIT TO EXERCISE HIS REVISIONAL JURISDICTION U/S 263 OF THE ACT CONTENDED THAT LD. PCIT WITHOUT SATISFYING THE ESSENTIAL CONDITION PRECEDEN T AS STIPULATED BY THE STATUTE ( SECTION 263 OF THE ACT ) COULD NOT HAVE INVOKED THE REVISIONAL JURISDICTIO N TO INTERFERE WITH THE RE-ASSESSMENT ORDER PASSED BY THE AO. ACCO RDING TO HIM, BEFORE THE LD. PCIT INVOKES HIS REVISIONAL JURISDICTION, FIRST OF ALL HE HAS TO SATISFY THAT THE AOS RE- ASSESSMENT ORDER WHICH HE PROPOSES TO INTERFERE WIT H IS ERRONEOUS AS WELL AS ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 2 | P A GE PREJUDICIAL TO THE INTEREST OF REVENUE AS STIPULATED IN SECTION 263 OF THE ACT. ACCORDING TO LD. A.R, THE LD. PCIT HAS MISERABLY FA ILED TO BRING OUT IN THE IMPUGNED ORDER/SHOW-CAUSE NOTICE (SCN) AS TO HOW TH E AOS REASSESSMENT ORDER U/S 147/143(3) OF THE ACT DATED 29.12.2017 FOR AY 2010 -11 IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE REVENUE. ACCORDING TO LD. A.R, T HE LD. PCIT HAS EXPRESSED HIS DESIRE TO EXERCISE HIS REVISIONAL JURISDICTION BY I SSUING SHOW-CAUSE NOTICE (SCN) DATED 22.01.2020 WHICH IS REPRODUCED AS UNDER: RELATED TO THE ASSESSMENT YEAR 2010-11, YOUR CASE WAS COMPLETED U/S 147/143(3) OF THE INCOME TAX ACT, 1961 ON 29/12/2017 AT AN ASSESSED INCOME OF RS. 29,420/- AGAINST THE RETURNED INCOME OF RS. 29,420/-. THE ASSESSMENT ORD ER WAS PASSED WITHOUT MAKING ANY ADDITIONS. IN ORDER TO JUDGE THE MERIT OF THE ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSMENT RECORDS WERE PERUSED. THE RECORDS AVAILABLE REVEALE D THAT THE IDENTITY, CREDITWORTHINESS & GENUINENESS OF TRANSACTION RELATING TO SHARE CAPITA L OF RS. 20,00,000/- AND SHARE PREMIUM AMOUNTING TO RS. 80,00,000/- RECEIVED BY YOUR CONCE RN WERE NOT AT ALL EXAMINED BY THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R U/S 147/143(3) OF THE INCOME TAX ACT, 1961. IN VIEW OF THE ABOVE FACTS, THE ORDER PASSED U/S 14 7/143(3) OF THE INCOME TAX ACT, 1961 ON 29/12/2017 FOR ASSESSMENT YEAR 2010-11 APPEARS TO B E ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS POIN T. IN ORDER TO ELICIT YOUR REACTION, YOUR CASE HAS BEE N FIXED FOR HEARING U/S 263 OF THE INCOME TAX ACT, 1961 AT MY CHAMBER AT AAYAKAR BHAWAN POORV A, 6 TH FLOOR, ROOM NO. 601 ON 31.01.2020 AT 04.00 PM. YOU ARE, THEREFORE, REQUESTED TO APPEAR EITHER IN P ERSON OR THROUGH YOUR AUTHORIZED REPRESENTATIVE TO EXPLAIN THE ABOVE CASE LACUNA IN THE SAID ORDER WITH SUPPORTING DOCUMENTARY EVIDENCE. AS THE PROCEEDING IS GETTING BARRED BY LIMITATION ON 31.03.2020, YOUR FAILURE TO RESPOND TO THIS NOTICE WILL COMPEL THE UNDERSIGNED TO TAKE A DECISION ON THE MERITS OF THE CASE AND THE PAPERS AVAILABLE WITH TH E DEPARTMENT. 4. ACCORDING TO LD. A.R, FROM A PERUSAL OF THE ABOV E SCN ISSUED BY THE LD. PCIT, IT CAN BE DISCERNED THAT THE ISSUE ON WHICH H E CONVEYED HIS DESIRE TO REVISE THE AOS ACTION DATED 29.12.2017 WAS IN RESPECT OF THE SHARE-CAPITAL & SHARE PREMIUM OF RS. 20 LAKHS & RS. 80 LAKHS RESPECTIVELY COLLECTED BY THE ASSESSEE COMPANY FOR AY 2010-11. ACCORDING TO LD. A.R THIS ISSUE REGARDI NG THE SHARE CAPITAL & PREMIUM COLLECTED BY THE ASSESSEE I.E. M/S ACS TRADERS PVT. LTD. HAD UNDERGONE SCRUTINY IN THE HANDS OF AO AND THEREFORE THIS ISSUE HAD BEEN T HOROUGHLY INVESTIGATED BY THE AO, SO THE LD. PCIT ERRED IN HOLDING THAT AO HAS PA SSED THE RE-ASSESSMENT ORDER DATED 29.12.2017 WITHOUT CARRYING OUT ANY ENQUIRIE S. ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 3 | P A GE 5. THE LD. A.R BROUGHT TO OUR NOTICE THAT FOR THIS RELEVANT ASSESSMENT YEAR I.E. AY 2010-11 THE ASSESSEE HAD DULY FILED RETURN OF IN COME ON 20.09.2010 WHEN THE SAME WAS PROCESSED U/S 143(1) OF THE ACT AND DECLAR ING RS. 29,420/-. THEREAFTER ACCORDING TO LD. A.R, THE AO REOPENED THE ORIGINAL ASSESSMENT U/S 147 OF THE ACT BY ISSUING NOTICE U/S 148 OF THE ACT DATED 21.11.2017 AND DREW OUR ATTENTION TO THE ORDER SHEET OF AO WHICH IS PLACED AT PAGE 96 TO 97 OF THE PB. THEREAFTER THE LD. A.R DREW OUR ATTENTION TO THE REASONS RECORDED FOR REOPENING THE ASSESSMENT DATED 27.03.2017 WHICH IS PLACED AT PAGE 94 & 95 OF THE PB WHICH REA D AS UNDER: SUB: REASONS FOR RE-OPENING THE ASSESSMENT PROCEEDINGS U/S 147 FOR THE AY 2010 - 11-MATTER REGARDING REF: YOUR LETTER DATED 28.04.2017 PLEASE REFER TO THE ABOVE. ON THE BASIS OF INFORMATION RECEIVED FROM ADIT (INV ESTIGATION), UNIT-2(4), KOLKATA IT IS FOUND THAT A GROUP LED BY SHRI KUMAR OM PRAKA SH AND HIS ASSOCIATES WERE INVOLVED IN THE BUSINESS OF REAL ESTATES AND OTHER RELATED ACTIVITIES IN HOWRAH. AS PER THE INFORMATION, RECEIVED FROM ADIT(INV) THAT O NE OF THE KEY PERSONS AND ENTITIES OF THE SAID GROUP IS M/S ACS TRADERS PVT. LTD. AS 7 , DR. ABANI DUTTA ROAD, HOWRAH- 711106. IN VIEW OF THE INCOME TAX ACT, 1961, THE GR OUP HAS RAISED SHARE CAPITAL FROM DUBIOUS AND SHELL COMPANIES AND THIS CAPITAL R AISED IS NOTHING BUT UNACCOUNTED CASH OF THE GROUP, REPORTED BY THE INVESTIGATION WI NG. M/S ACS TRADERS HAVING PAN-AAHCA 0919 L DURING THE FY 2009-10 RELEVANT TO THE AY 2010-11 RAISED CAPITAL OF RS. 1,00,00,000/- (AS PER DATA BASE INFORMATION OF SHELL COMPANIES AS DETAILED.) IN THIS REGARD , FURTHER IN VESTIGATION FOR THE CREDITWORTHINESS/GENUINENESS/PROOF OF IDENTITY OF S UCH SHARES CAPITAL (TRANSACTION OF THE ALLOTTEE) WOULD BE REQUIRED AS PER PROVISION OF THE INCOME TAX ACT, 1961 IN THE INTEREST OF REVENUE. THE ASSESSEE COMPANY FIELD ITS IT RETURN FOR THE AS SESSMENT YEAR 2010-11 ON 20.09.2010 SHOWING INCOME OF RS. 29,420/- . CONSEQU ENTLY, THE ASSESSEE CAPITAL WAS RAISED OF RS. 1,00,00,000/-DURING THE FY 2009-10 W HICH IS NOT COMMENSURATE WITH ITS RETURN OF INCOME. IN THIS SITUATION FURTHER INV ESTIGATION FOR THE CREDITWORTHINESS/GENUINENESS OF SUCH SHARES CAPITAL WOULD BE REQUIRED AS PER PROVISION OF THE IT ACT, 1961 . FURTHER, IT IS NOTICED THAT SECOND ALLEGATION RAISE D REGARDING SALE OF ASSETS AND SUPPRESSION OF VALUE OF SUCH ASSETS IN RELATION TO STAMP DUTY ALSO THROUGH LOWER VALUE DEEDS IN RELATION U/S 50C AND U/S 43CA REGARD ING SELLER CHETAN CONSTRUCTION (FIRM) AND CHAITANYA CONSTRUCTION (PROP. KUMAR OM P RAKASH) AS PER INFORMATION PLACED ON RECORD. ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 4 | P A GE IN VIEW OF THE ABOVE REASON RECORDED AS PER ORDER S HEET, YOUR CASE HAS BEEN REOPENED U/S 147.[EMPHASIS GIVEN BY US ] 6. FURTHER IN ORDER TO DEMONSTRATE THAT THE AO EVEN DURING THE RE-ASSESSMENT PROCEEDING ( AFTER RE-OPENING ) HAS CONDUCTED FRESH INVESTIGATION INTO THIS ISSUE OF SHARE-CAPITAL & PREMIUM, THE LD. A.R , DREW OUR ATT ENTION TO PAGE 96 & 97 OF PB WHICH IS THE ORDER SHEET MAINTAINED BY THE AO IN RE SPECT OF THE RE-ASSESSMENT PROCEEDINGS. A PERUSAL OF IT REVEALS THAT THE AO HA D RECORDED THIS REASON FOR RE- OPENING (SUPRA) ON 21.11.2017 AND THEREAFTER HAD IS SUED THE NOTICE U/S 148 OF THE ACT ON THE SAME DATE. IT IS NOTED THAT THE HEARING IN RESPECT OF RE-OPENED ASSESSMENT WAS CONDUCTED BY THE AO ON SEVEN (7) OCCASIONS/DATES AN D THEREAFTER HAS PASSED THE REASSESSMENT ORDER DATED 29.12.2017 U/S 143(3) READ WITH SECTION 147 OF THE ACT. THUS ACCORDING TO THE LD. A.R, THE AO BEFORE THE RE -ASSESSMENT ORDER WAS PASSED ON 29.12.2017, HAD FIXED THE MATTER FOR HEARING ON SE VEN (7) OCCASIONS/DATES; AND DURING THE SAID PROCEEDINGS, HE (AO) HAD ISSUED NOT ICE U/S 143(2) ON 21.11.2017 AND NOTICE U/S 142(1) NOTICE DATED 27.11.2017; AND PURS UANT TO THE ENQUIRIES MADE BY AO THE ASSESSEE HAD FILED REPLY DATED 29.11.2017 ALONG WITH THE FOLLOWING DOCUMENTS (PAGE 4 TO 63 OF PB) TO SUBSTANTIATE ITS CLAIMS ON THE ISSUE OF SHARE-CAPITAL AND PREMIUM TO SEVEN (7) SHARE APPLICANTS I.E. SHARE SU BSCRIBERS IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WITH THE ASSESSE E COMPANY: I) DETAILS OF SHARE CAPITAL RAISED ALONG WITH PREMIUM OF RS. 40/- OF SHARES OF FACE VALUE @ RS. 10: A) NAME OF APPLICANT ALONG WITH MAILING ADDRESS B) PAN OF THE SHARE APPLICANTS (SEVEN) C) ALLOTMENT DESCRIPTION WITH COPY OF SHARE APPLICATIO N FORM D) BOARD RESOLUTION (SEVEN) E) ITR ACKNOWLEDGEMENT OF ALL THE SHARE APPLICANTS (SE VEN) (PB-PAGE 364-376) F) BANK STATEMENTS REFLECTING TRANSACTION (SEVEN) G) COPY OF CERTIFICATE OF INCORPORATION OF SHARE APPLI CANT (SEVEN) H) COPY OF SOURCE OF FUND ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 5 | P A GE I) COY OF AUDITED FINANCIAL STATEMENT FOR FY 2009-10 ( SEVEN) 7. STILL NOT SATISFIED BY THE SUBMISSION OF THE AFO RESAID DOCUMENTS, ACCORDING TO LD. A.R, FURTHER ENQUIRIES WERE MADE BY THE AO WHIC H WAS REPLIED BY LETTER DATED 12.12.2017 (REFER PAGE 64-71) AND THE ASSESSEE FILE D THE FOLLOWING DOCUMENTS ALSO: (I) COPY OF COMPANY MASTER DATA OF ALL APPLICANTS (DIN, CIN, COMPANY STATUS, NAME OF DIRECTORS) (II) COPY OF LEDGER OF SALES AND PURCHASE AND LOAN AND A DVANCE. 8. FURTHER IT WAS BROUGHT TO OUR NOTICE THAT AO HAD ISSUED NOTICE U/S 133(6) OF THE ACT TO ALL THE SEVEN (7) SHARE APPLICANTS DATED 13.12.2017 AND ( AFTER RECEIVING THEIR REPLIES REFER PAGE 72-74 OF PB ) WHICH THREE (3) REPLIES ARE FOUND PLACED IN PB AND SUMMONS WERE ISSUED BY THE AO TO THE ASSESSEE C OMPANY U/S 131 OF THE ACT DATED 21.12.2017 AND AFTER MAKING ENQUIRIES AS STAT ED EARLIER I.E. AFTER SEVEN (7) OCCASIONS / HEARINGS WITH THE LD. A.R OF THE ASSESS EE, THE AO HAS ACCEPTED THE SHARE CAPITAL OF RS. 1 CRORE FROM SEVEN (7) SHARE APPLICA NTS. ACCORDING TO LD. A.R FROM A PERUSAL OF THE REASONS RECORDED BY THE AO (SUPRA) I N ORDER TO RE-OPEN THE INTIMATION U/S 143(1) WHEREIN THE AO ACCEPTED THE RETURN FILED BY THE ASSESSEE DATED 20.09.2010 ITSELF WOULD REVEAL THAT HE PROPOSED TO REOPEN THE ASSESSMENT ON THE BASIS OF AN INFORMATION RECEIVED ON 24.03.2017 FROM ADIT (INV), UNIT-2(4), KOLKATA (PAGE 95 OF PB) THAT GROUP LED BY SHRI KUMAR OM PRAKASH AND HIS ASSOCIATES WERE INVOLVED IN THE BUSINESS OF REAL ESTATE AND OTHER RELATED ACTIV ITIES AT HOWRAH AND ONE OF THE KEY PERSONS AND ENTITIES OF THE SAID GROUP IS ASSESSEE [M/S ACS TRADERS PVT. LTD.] AND BASED ON THE INFORMATION, THAT THE SAID GROUP HAS R AISED SHARE CAPITAL FROM DUBIOUS SHELL COMPANIES; AND THAT SHARE CAPITAL OF RS. 1 CR ORE WHICH THE ASSESSEE HAD RAISED IS NOTHING BUT UNACCOUNTED CASH OF THE COMPANY, THE AO RE-OPENED THE INTIMATION GIVEN U/S 143(1) OF THE ACT AND FURTHER THE AO SPEC IFICALLY NOTED THAT THE SHARE CAPITAL RAISED BY ASSESSEE COMPANY OF RS. 1 CRORES, NEEDS FURTHER INVESTIGATION ESPECIALLY FOR VERIFYING THE CREDITWORTHINESS, GENU INENESS AND PROOF OF IDENTITY OF THE ALLOTTEES WHICH EXERCISE, HE NEEDS TO DO IN THE IN TEREST OF THE REVENUE. AND THE OTHER REASON ACCORDING TO AO, FOR FURTHER INVESTIGATION W AS THAT SHARE CAPITAL OF RS. 1 CRORE IS NOT COMMENSURATE TO THE RETURN OF INCOME FILED B Y THE ASSESSEE. THEREFORE, KEEPING ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 6 | P A GE THESE REASONS/SUSPICION/ALLEGATIONS IN MIND, THE AO PROPOSED TO REOPEN THE ASSESSMENT / INTIMATION U/S 143(1) OF THE ACT AND T HEREAFTER CONDUCTED FURTHER INVESTIGATION AFTER RE-OPENING. SO ACCORDING TO LD. A.R, WHEN THE AO PROPOSED TO REOPEN THE ASSESSMENT/INTIMATION AND HAD CONVEYED HIS INTENTION FOR CONDUCTING FURTHER INVESTIGATION IN RESPECT OF SHARE CAPITAL/ PREMIUM OF RS. 1 CRORE COLLECTED BY THE ASSESSEE; AND HAVING RE-OPENED THE ASSESSMENT; AND THEREAFTER HAVING CONDUCTED HEARINGS ON SEVEN (7) OCCASIONS AND THAT TOO AFTER HAVING INDEPENDENTLY INVESTIGATING/CONFIRMING BY ISSUING SUMMONS U/S 131 DATED 21/12/2017 (REFER PAGE 97 OF PB) AND NOTICE U/S 133(6) OF THE ACT DATED 01 .12.2017 TO ALL THE SHARE APPLICANTS; AND BASED ON ALL THE DOCUMENTS/ MATERIA LS COLLECTED IN THAT PROCESS, THE AO IN THE RE-ASSESSMENT ORDER AFTER RE-OPENING THE ASSESSMENT, HAS ACCEPTED THE IDENTITY, CREDITWORTHINESS AND GENUINETY OF THE SEV EN (7) SHARE SUBSCRIBERS AND THE TRANSACTION OF SHARE CAPITAL & PREMIUM TO THE TUNE OF RS. 1 CRORE IN THE HANDS OF THE ASSESSEE COMPANY FOR AY 2010-11. IN THE LIGHT OF TH E AFORESAID FACTS, ACCORDING TO LD. A.R, THE LD. PCITS FINDING IN THE IMPUGNED OR DER THAT NO ENQUIRY WAS CONDUCTED BY THE AO WHILE PASSING THE RE-ASSESSMENT ORDER DATED 29/12/2017 IS EX- FACIE ERRONEOUS AND FOR THAT HE DREW OUR ATTENTION TO PA GE NO. 4 OF THE LD. PCITS IMPUGNED ORDER DATED 03.06.2020 WHEREIN THE LD. PCI T HAS MADE A FINDING . THE CLAIM OF THE ASSESSEE WAS FOUND TO BE DE STITUTE OF MERIT AS THE RECORDS CLEARLY DEMONSTRATED THAT THE AO MADE ASSESSMENT U/ S 143(3)/147 DATED 29.12.2017 WITHOUT CARRYING OUT ANY INQUIRIES .. FURTHER ACCORDING TO THE LD. A.R, THE FAULTS OF THE AO TAKEN NOTE BY THE LD. PCIT TO INTE RFERE/EXERCISE HIS REVISIONAL JURISDICTION U/S 263 IS THAT DESPITE THERE BEING S PECIFIC INFORMATION FROM THE INVESTIGATION WING OF THE DEPARTMENT THAT THE ASSES SEE HAD COLLECTED SHARE CAPITAL PLUS PREMIUM FROM SHELL/DUBIOUS SOURCE, ACCORDING T O HIM (LD. PCIT), THE AO SHOULD HAVE LOOKED INTO THE CASH TRAIL AND SOURCE O F THE DEPOSIT IN MAKING THE PAYMENT FROM THE BANK ACCOUNT OF THE AFORESAID COMP ANY (SHARE SUBSCRIBERS) AND SECOND FAULT ACCORDING TO LD. PCIT WAS THAT NOTICES ISSUED TO TWO SHARE SUBSCRIBING COMPANIES COULD NOT BE SERVED AND OTHER FIVE (5) DI D NOT REPLY. AND THE ASSESSEE HAD INFORMED WITH THE AID OF MASTER DATA THAT THE NON-S ERVICE OF NOTICE WAS DUE TO CHANGE IN ADDRESS AND THE AO HAD ISSUED NOTICE TO ALL EXCE PT M/S FORTUNE VINCOM PVT. LTD. ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 7 | P A GE WHOSE ADDRESS DID NOT CHANGE AND THIRD FAULT ACCORD ING TO LD. PCIT WAS THAT THE AO HAS NOT CARRIED OUT THE ENQUIRIES AT BANK AFTER N OTING THAT MONEY CAME IN BY RTGS AND ASSESSEE HAD USED IT TO PURCHASE FIXED ASSETS, SO THE ASSESSEE WAS THE BENEFICIARY. THEREFORE THE LD. PCIT CONCLUDED THAT THE ORDER PAS SED BY THE AO U/S 147/143(3) OF THE ACT DATED 29.12.2017 WAS ERRONEOUS AS WELL AS I T IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THEREFORE HE CANCELLED THE REASSESS MENT ORDER DATED 29.12.2017 AND DIRECTED THE AO TO CONDUCT DE NOVO ASSESSMENT AND A LSO ADVISED THE AO TO FOCUS ON THE CASH TRAIL OF ALL THE BANK ACCOUNTS INVOLVED IN THE TRANSACTION OF MONEY FROM THE BANK ACCOUNT OF THE ASSESSEE COMPANY. COUNTERING TH E FAULTS POINTED OUT BY THE LD. PCIT TO INTERFERE WITH THE ORDER PASSED BY THE AO, THE LD. A.R, SUBMITTED THAT IT NEEDS TO BE KEPT IN MIND THAT THE AO HAD RE-OPENED THE INTIMATION ISSUED U/S 143(1) OF THE ACT ON THE BASIS OF THE INFORMATION OF INV ESTIGATION WING TO INVESTIGATE WHETHER THE ASSESSEE HAD RECEIVED THE SHARE-CAPITAL AND PREMIUM FROM DUBIOUS/SHELL ENTITIES AND THEN HE THOROUGHLY INVESTIGATED THE S AME WHICH IS DISCERNIBLE FROM THE PURPOSE FOR WHICH HE RE-OPENED ON PERUSAL OF THE REASONS RECORDED BY THE AO DATED 24.11.2017. SO ACCORDING TO LD. A.R WHEN THE AO HAD REOPENED THE ASSESSMENT FOR FURTHER INVESTIGATION KEEPING IN HIS MIND ALL THESE GRAVE SUSPICION AND THEREAFTER WHEN HE HAD CONDUCTED INVESTIGATION AS DISCUSSED SUPRA ; AND THEREAFTER, BEING SATISFIED WITH THE MATERIAL COLL ECTED DURING INVESTIGATION, THE AO HAD ACCEPTED THE IDENTITY, CREDITWORTHINESS AND GEN UINENESS OF THE SHARE CAPITAL AS WELL AS THE PREMIUM COLLECTED BY THE ASSESSEE COMPA NY. THE LD. A.R, ALSO POINTED OUT THAT IN THE RELEVANT ASSESSMENT YEAR UNDER CONS IDERATION I.E. AY 2010-11, AS PER LAW IN FORCE FOR THIS ASSESSMENT YEAR IS CONCERNED, THE ASSESSEE WAS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE OF THE SHARE CAPITAL COLLECTED OF RS. 1 CRORE, WHICH REQUIREMENT OF LAW WAS ONLY FROM THE ASSESSMENT YEA R I.E. AY 2013-14 ONWARDS. AND THEREFORE THE ASSESSEE IN THIS ASSESSMENT YEAR I.E. AY 2010-11 WAS NOT DUTY BOUND TO ASK THE SOURCE OF SOURCE FROM THE SHARE-SUBSCRIBERS ABOUT SHARE-CAPITAL SUBSCRIBED BY IT. ACCORDING TO LD. A.R, AS PER THE LAW APPLICABLE FOR AY 2010-11, THE ASSESSEE HAD DISCHARGED THE ONUS BY SHARING THE DOCUMENTS WHICH REVEALED THE SOURCE OF THE SHARE CAPITAL AND THE AO HAD EXAMINED THE TRUTH / VERACITY OF THE SAME BY INDEPENDENTLY VERIFYING IT BY ISSUE OF NOTICE U/ S 133(6) AND BY EXAMINING THE ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 8 | P A GE REPLIES TO IT FROM THE SHARE-SUBSCRIBERS AND FINDIN G NOTHING DUBIOUS/BOGUS IN THE TRANSACTION (SHARE), THE AO HAS ACCEPTED THE SAME. BY DOING SO, ACCORDING TO LD. A.R, THE AO HAS DISCHARGED HIS DUTY AS AN INVESTIGA TOR AND ADJUDICATOR IN ACCORDANCE TO LAW APPLICABLE FOR AY 2010-11. ACCORDING TO HIM, THE LD. PCIT BY ISSUING SCN ON 31.01.20120 HAS NOT APPRECIATED THE LEGAL POSITI ON IN RESPECT OF AY 2010-11 AND HAS FOUND FAULT WITH THE ACTION OF AO AS IF THE ASS ESSMENT YEAR UNDER CONSIDERATION IS THAT OF ASSESSMENT YEAR I.E. AY 2013-13 OR THEREAFT ER. SO ACCORDING TO LD. A.R, THE LD. PCIT MISDIRECTED HIMSELF IN LAW AS WELL AS FACT , WHILE FINDING FAULT WITH THE ACTION OF AO IN HIS ROLE AS AN INVESTIGATOR AS WELL AS ADJUDICATOR WHEN THE RELEVANT ASSESSMENT YEAR CONCERNED IS AY 2010-11. THUS, ACC ORDING TO LD. A.R, THE AOS ACTION IN ACCEPTING THE SHARE CAPITAL OF RS. 1 CROR E COLLECTED BY THE ASSESSEE WAS BASED ON THE DOCUMENTARY EVIDENCE FURNISHED BY THE ASSESSEE IN RESPECT OF SEVEN (7) SHARE APPLICANTS AND AFTER THOROUGH INVESTIGATION, CANNOT BE FOUND FAULT WITH AND IN ANY CASE THEIR ( SHARE SUBSCRIBERS ) IDENTITY COULD NOT BE QUESTIONED SINCE ALL THE SH ARE SUBSCRIBING COMPANIES ARE FILING REGULARLY THEIR RE SPECTIVE TAX RETURN AND THEIR PAN & CIN WERE DULY FURNISHED TO THE AO (PAGE 64 TO 71 OF PB AND PAGE 317 OF PB) AND ALL THE SHARE APPLICANTS BEING ASSESSED TO THE INCO ME TAX; AND THE PAYMENTS WERE MADE THROUGH BANKING CHANNELS COULD NOT HAVE BEEN D OUBTED, WHEN THE FACT IS THAT THE AO HAS EXAMINED INDEPENDENTLY THE SAME BY ISSUI NG SUMMONS U/S 131DATED 21.12.2017 AND 133(6) DATED 01.12.2017 OF THE ACT . AND FROM THE PERUSAL OF THE ORDER SHEET ENTRY DATE 28.12.2017 (REFER PAGE 97 OF PB) IT IS EVIDENT THAT THE DIRECTOR SHRI ASHOK KUMAR AGARWAL APPEARED BEFORE THE AO PUR SUANT TO THE SUMMON U/S 131 OF THE ACT ISSUED ON 21.12.2017 AND THE AO HAD RECO RDED HIS STATEMENT AND ACKNOWLEDGED THAT HE PRODUCED PAN & AADHAR CARD & O THER DOCUMENTS CALLED FOR. THEREFORE ACCORDING TO LD. A.R, THE LD. PCITS ACTI ON OF USURPING THE REVISIONAL JURISDICTION ON THE SPECIOUS PLEA THAT NO ENQUIRY WAS CONDUCTED BY THE AO IS PATENTLY ERRONEOUS AND BASED ON WRONG ASSUMPTION O F FACTS AND LAW; AND THUS ACCORDING TO LD. A.R, THE LD. PCIT COULD NOT HAVE I NVOKED REVISIONAL JURISDICTION U/S 263 OF THE ACT. THEREFORE, ACCORDING TO THE LD. A.R , THE VERY INVOCATION OF SECTION 263 JURISDICTION ITSELF IS BAD IN LAW AND THEREFORE IT HAS TO BE QUASHED. PER CONTRA , THE LD. CIT D.R SHRI IMOKABA JAMIR SUPPORTING THE IMPU GNED ORDER OF LD. PCIT ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 9 | P A GE VEHEMENTLY OPPOSED THE PLEA OF THE LD. A.R AND SUBM ITTED THAT THE AO IN THE REASSESSMENT PROCEEDINGS AFTER REOPENING U/S 147 OF THE ACT HAS NOT CONDUCTED THE EXERCISE AS REQUIRED BY THE STATUTE DESPITE INCRIMI NATING INFORMATION AGAINST THE ASSESSEE COMPANY. ACCORDING TO LD. CIT D.R, THE AO FAILED TO ENQUIRE ON THE ISSUE FOR WHICH RE-OPENING WAS MADE AND THEREFORE THE ORD ER OF RE-ASSESSMENT PASSED BY AO WAS ERRONEOUS FOR WANT OF ENQUIRY; AND THEREFORE THE LD. PCIT RIGHTLY INTERFERED BY INVOKING HIS REVISIONAL JURISDICTION U/S 263 OF THE ACT; AND THEREAFTER HE DREW OUR ATTENTION TO PAGE NOS. 4, 5 AND 6 OF THE IMPUGNED O RDER AND CONTENDED THAT THE LD. PCIT HAD SATISFIED THE CONDITION PRECEDENT TO INVOK E THE JURISDICTION U/S 263 OF THE ACT. THEREFORE, HE PRAYS THAT THIS TRIBUNAL SHOULD NOT INTERFERE WITH THE IMPUGNED ORDER OF LD. PCIT. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. BEFORE WE ADVERT TO THE FACTS AND LAW INVOLVED IN THIS LIS BEFORE US, LET US REVISE THE LAW GOVERNING THE ISSUE BEFORE US. THE ASSESSEE HAS CHALLENGED IN THE FIRST PLACE, THE VERY USURPATION OF JURISDICTION BY LD. PRINCIPAL CIT TO INVOKE HIS REV ISIONAL POWERS ENJOYED U/S 263 OF THE ACT. THEREFORE, FIRST WE HAVE TO SEE WHETHER TH E REQUISITE JURISDICTION NECESSARY TO ASSUME REVISIONAL JURISDICTION IS THERE EXISTING BE FORE THE LD PR. CIT TO EXERCISE HIS POWER. FOR THAT, WE HAVE TO EXAMINE AS TO WHETHER I N THE FIRST PLACE THE ORDER OF THE ASSESSING OFFICER FOUND FAULT BY THE PRINCIPAL CIT IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE . FOR THAT, LET US TAKE THE GUIDANCE OF JUDICIAL PRECEDENCE LAID DOWN BY THE HONBLE APEX COURT IN M ALABAR INDUSTRIES LTD. VS. CIT [2000] 243 ITR 83(SC) WHEREIN THEIR LORDSHIP HAVE H ELD THAT TWIN CONDITIONS NEEDS TO BE SATISFIED BEFORE EXERCISING REVISIONAL JURISD ICTION U/S 263 OF THE ACT BY THE CIT. THE TWIN CONDITIONS ARE THAT THE ORDER OF THE ASSES SING OFFICER MUST BE ERRONEOUS AND SO FAR AS PREJUDICIAL TO THE INTEREST OF THE RE VENUE. IN THE FOLLOWING CIRCUMSTANCES, THE ORDER OF THE AO CAN BE HELD TO B E ERRONEOUS ORDER, THAT IS (I) IF THE ASSESSING OFFICERS ORDER WAS PASSED ON INCORRECT A SSUMPTION OF FACT; OR (II) INCORRECT APPLICATION OF LAW; OR (III)ASSESSING OFF ICERS ORDER IS IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE; OR (IV) IF THE ORDER IS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND; (V) IF THE AO HAS NOT INVESTIGATED THE ISSUE BEFORE HIM;[ ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 10 | P A GE BECAUSE AO HAS TO DISCHARGE DUAL ROLE OF AN INVESTI GATOR AS WELL AS THAT OF AN ADJUDICATOR ]THEN IN AFORESAID ANY EVENT, THE ORDER PASSED BY THE ASSESSING OFFICER CAN BE TERMED AS ERRONEOUS ORDER. COMING NEXT TO TH E SECOND LIMB, WHAT IS REQUIRED TO BE EXAMINED IS AS TO WHETHER THE ACTIONS OF THE AO CAN BE TERMED AS PREJUDICIAL TO THE INTEREST OF REVENUE . WHEN THIS ASPECT NEEDS TO BE EXAMINED, ONE HAS TO UNDERSTAND WHAT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES (SUPRA) HEL D THAT THIS PHRASE I.E. PREJUDICIAL TO THE INTEREST OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. THEIR LORDSHIP HEL D THAT IT HAS TO BE REMEMBERED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN O RDER OF ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE RE VENUE. WHEN THE ASSESSING OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND I T HAS RESULTED IN LOSS TO THE REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE AS SESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT B E TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW . 10. IN THE LIGHT OF THE LAW AS DISCUSSED, LET US EX AMINE WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD PCIT HAD SUCCESSFULLY USURPED THE REVISIONAL JURISDICTION TO INTERFERE WITH THE RE-AS SESSMENT ORDER PASSED BY THE AO DATED 29.12.2017. IN THIS REGARD WE NOTE THAT THE A SSESSEE COMPANY WAS ESTABLISHED IN THE YEAR 2007-08 FOR TRADING OF HOSIERY GOODS & KATHA (CATECHU) AND IT ORIGINALLY FILED ITS RETURN OF INCOME FOR AY 2010-11 ON 20.09. 2010 DECLARING RS. 29,420/- AND THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. TH EREAFTER THE ASSESSEES CASE WAS REOPENED BY THE AO U/S 147 OF THE ACT BY ISSUING NO TICE U/S 148 OF THE ACT ON 29.03.2017 BY RECORDING REASONS ON 27.03.2017 WHICH FACT IS NOTICED FROM THE ORDER SHEET PLACED AT PAGE 95 & 96 OF PB. IT IS NOTED THA T THE REASONS FOR REOPENING WAS GIVEN TO THE ASSESSEE BY THE AO VIDE LETTER DATED 24.11.2017 WHICH IS FOUND PLACED AT PAGE 94 OF THE PB (SUPRA). FROM A PERUSAL OF THE REASONS RECORDED IT IS DISCERNED THAT THE AO RECEIVED INFORMATION THAT THE ASSESSEE COMPANY HAS RAISED SHARE CAPITAL OF RS. 1 CRORE FROM DUBIOUS SHELL COMPANIES WHICH I S NOTHING BUT ASSESSEES OWN ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 11 | P A GE MONEY. ACCORDING TO AO, THIS INCRIMINATING FACT WAS DISCOVERED AFTER HE GOT THE INFORMATION FROM ADIT(INVESTIGATION) WHICH FACT NEE D TO BE EXAMINED BY RE-OPENING THE ASSESSMENT AND BY CONDUCTING FURTHER INVESTIGAT ION. THIS FACT LED HIM TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME AND THEREFORE HE PROPOSED TO REOPEN THE ASSESSMENT BY RECORDING THE REASONS WHICH HAS BEEN REPRODUCED SUPRA. THEREAFTER IT IS NOTED THAT THE AO DURING THE RE-ASSESSMENT PR OCEEDINGS HAS GIVEN SEVEN (7) OPPORTUNITIES OF HEARING TO THE ASSESSEE AND THEREA FTER HAD PASSED THE RE-ASSESSMENT ORDER U/S 147/143(3) OF THE ACT DATED 29.12.2017. I T IS ALSO NOTED FROM THE ORDER SHEET WHICH IS PLACED FROM 95 TO 97 THAT THE AO HA D ISSUED NOTICES U/S 133(6) TO THE SHARE APPLICANTS AS WELL AS SUMMONS U/S 131 OF THE ACT TO THE ASSESSEE COMPANY AND EVEN TO THE CHANGED ADDRESSES OF THE SHARE SUBSCRIB ERS. WE NOTE THAT THE STATEMENT OF THE DIRECTOR OF ASSESSEE COMPANY SHRI ASHOK KUMAR A GARWAL WAS RECORDED ON OATH BY AO ON 28.12.2017 U/S 131 OF THE ACT ( REFER PAGE 97 OF PB ). WE NOTE THAT DURING THE REASSESSMENT PROCEEDINGS THE AO HAD ISSUED 143( 2) NOTICE AND 143(1) NOTICE TO THE ASSESSEE AND SUMMONED VARIOUS DOCUMENTS TO SUBS TANTIATE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE TRANS ACTION OF RS. 1 CRORE. WE NOTE THAT THE ASSESSEE HAD FILED FOLLOWING DOCUMENTS BEF ORE THE AO IN THE RE-OPENED / RE- ASSESSMENT ROUND: I) COPY OF AUDITED FINANCIAL STATEMENTS FOR AY 2010 -11 II) DETAILS OF SHARE CAPITAL RAISED: A) NAME OF APPLICANT ALONG WITH MAILING ADDRESS B) PAN OF THE SHARE APPLICANTS C) ALLOTMENT DESCRIPTION WITH COPY OF SHARE APPLICA TION FORM D) BOARD RESOLUTION E) ITR ACKNOWLEDGEMENT OF ALL THE SHARE APPLICANTS F) BANK STATEMENT REFLECTING TRANSACTION G) COPY OF CERTIFICATE OF INCORPORATION OF SHARE AP PLICANTS 11. THEREAFTER PURSUANT TO THE AO CALLING FOR CERTA IN MORE DETAILS THE ASSESSEE HAD FILED ALONG WITH REPLY DATED 12.12.2017 THE FOLLOWI NG MORE DOCUMENTS: I) COPY OF BANK STATEMENT ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 12 | P A GE II) DETAILS OF NATURE OF BUSINESS OF THE COMPANY III) DETAILS OF DIRECTORS OF COMPANY IV) ASSESSEE ALONG WITH ADDRESS AND PAN V) COPY OF MASTER DATA OF ALL APPLICANTS (CIN, REGI STERED ADDRESSES, EMAIL ID, COMPANY STATUS, DIN AND NAME OF DIRECTORS) (REFER P AGE 64 TO 71 OF PB). 12. BASED ON THE AFORESAID DOCUMENTS FILED BY THE A SSESSEE PURSUANT TO NOTICES U/S 142(1) OF THE ACT AND THE AO CONDUCTED FURTHER ENQU IRIES BY ISSUING SUMMONS U/S 131 AND NOTICE 133(6) OF THE ACT, TO THE SEVEN SHAR E SUBSCRIBERS AND AFTER CROSS- CHECKING THE VERACITY OF THE DOCUMENTS FILED BY THE ASSESSEE, THE AO WAS PLEASED TO ACCEPT THE IDENTITY, CREDITWORTHINESS AND GENUINENE SS OF THE SHARE CAPITAL OF RS.1 CRORE. IT IS NOTED ALL THE SEVEN ENTITIES HAVE FURN ISHED THEIR RESPECT CIN & DIN NUMBERS, REGISTERED ADDRESSES, EMAIL-ID, AND THEIR RESPECTIVE STATUS OF THESE COMPANIES ARE SHOWN AS ACTIVE WHICH FACT CAN BE SEEN FROM A PERUSAL OF COMPANY MASTER DATA (REFER PAGE 64 TO 71 OF PB). WE FIND TH AT SHARE SUBSCRIBERS HAVE REPLIED TO THE AO PURSUANT TO NOTICE ISSUED U/S 133(6) OF T HE ACT WHICH IS FOUND PLACED AT PAGE 4-71 OF PB. FROM A PERUSAL OF THE SAME, THE FO LLOWING DETAILS ALONG WITH SUPPORTING DOCUMENTS WERE FILED RESPECTIVELY BY THE M DIRECTLY TO THE AO (I) PAN (II) ASSESSING WARD (III) DETAILS OF SHARE (IV) COPY OF ITR (V) COPY OF AUDITED BALANCE SHEET AND P & L ACCOUNT (VI) COPY OF BANK STATEMENT (VII) SHARE ALLOTMENT ADVICE (VIII) ALLOTMENT LETTER OF SHARES SPECIFYING DISTIN CTION NUMBERS OF SHARE SO ALLOTTED. IN THE LIGHT OF THE AFORESAID ENQUIRES & DOCUMENTS FUR NISHED BY THEM, AND AFTER EXAMINING THE DIRECTOR OF ASSESSEE COMPANY ON OATH U/S 131 OF THE ACT, THE AO HAD ACCEPTED THE SEVEN SHARE SUBSCRIBING COMPANIES IDEN TITY; AND THE ENTIRE TRANSACTION HAS BEEN CARRIED OUT THROUGH THE BANKING CHANNEL AN D SINCE ALL OF THEM HAD FILED BALANCE SHEETS AS WELL AS ALL COMPANIES HAD SUFFICI ENT CREDITWORTHINESS TO SUBSCRIBE FOR THE SHARE CAPITAL OF THE ASSESSEE, THE AO ACCEP TED CREDITWORTHINESS AND GENUINENESS OF THE SHARE TRANSACTION WITH THE ASSES SEE COMPANY. THE IDENTITY OF THE SEVEN (7) SHARE SUBSCRIBERS CAN BE NOTED FROM THE F OLLOWING DETAILS: AND THAT NOTICE U/S 133(6) WERE ISSUED BY AO TO ALL SHARE APPLICANTS FOR FURTHER VERIFICATION AND THE SHARE APPLICANTS HAVE COMPLIED WITH, WHICH THE FOLLOWING DETAILS: FURTHER IT IS NOTED THAT THE AO ISSUED NOTICE U/S 1 31 DATED 21.12.2017 AS PER PB AND THE NOTICE U/S 131 WAS COMPLIED WITH ON 28.12.2 017 BY RECORDING A STATEMENT ON OATH OF THE ASSESSEES DIRECTOR SHRI ASHOK ASSESSEE PRODUCED BOOKS OF ACCOUNTS & AO TEST CHECK ED AS PER NOTING IN ORDER SHEET ITA NO. M/S ACS TRADERS PVT. LTD. AND THAT NOTICE U/S 133(6) WERE ISSUED BY AO TO ALL SHARE APPLICANTS FOR FURTHER VERIFICATION AND THE SHARE APPLICANTS HAVE COMPLIED WITH, WHICH IS DISCERNIBLE FROM FURTHER IT IS NOTED THAT THE AO ISSUED NOTICE U/S 1 31 DATED 21.12.2017 AS PER PB AND THE NOTICE U/S 131 WAS COMPLIED WITH ON 28.12.2 017 BY RECORDING A STATEMENT ON OATH OF THE ASSESSEES DIRECTOR SHRI ASHOK KUMAR AGARWAL (PB ASSESSEE PRODUCED BOOKS OF ACCOUNTS & AO TEST CHECK ED AS PER NOTING IN ORDER SHEET ITA NO. 466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 13 | P A GE AND THAT NOTICE U/S 133(6) WERE ISSUED BY AO TO ALL SHARE APPLICANTS FOR FURTHER IS DISCERNIBLE FROM FURTHER IT IS NOTED THAT THE AO ISSUED NOTICE U/S 1 31 DATED 21.12.2017 AS PER PB -97 AND THE NOTICE U/S 131 WAS COMPLIED WITH ON 28.12.2 017 BY RECORDING A STATEMENT ON KUMAR AGARWAL (PB -97). ALSO THE ASSESSEE PRODUCED BOOKS OF ACCOUNTS & AO TEST CHECK ED AS PER NOTING IN ORDER SHEET DATED 28.12.2017 (PB- 97). THUS, WE NOTE THAT THE AO AFTER VERIFICATION A S AFORESAID FACTS HAS NOT DRAWN ANY ADVERSE OPINION OR DOUBTED THE I APPLICANTS WHICH VIEW OF THE AO IS A PLAUSIBLE VIEW IN THE LIGHT OF THE DOCUMENTS REFERRED TO SUPRA. 13. AND COMING TO THE CREDITWORTHINESS OF THE SHAREHOLD ERS, IT IS NOTED FROM THE DETAILS GIVEN IN THE BALANCE SHEET OF THE SHAREHOLD SHEET AS ON 31.03.2009 & 31.03.2010 AS WELL AS THE SUM INVESTED BY THEM IN THE ASSESSEE IS DISCERNIBLE AS UNDER: 14. IT IS NOTED THAT THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION IS AY 11 AND IN THIS ASSESSMENT YEAR AS PER LAW APPLICABLE T O THIS YEAR IS CONCERNED, THE ASSESSEE IS DUTY BOUND WHEN CALLED UPON BY THE AO T O SHOW HIM (AO) THE EVIDENCE OF THE SOURCE OF THE SHARE CAPITAL WHICH IN THIS CASE THE ASSES SEE HAD DISCHARGED AND NOT SOURCE OF SOURCE WHICH REQUIREMENT OF LAW CAME IN TO EXISTENCE FRO M ASSESSMENT YEAR I.E. AY 2013 THAT AOS ACTION OF ACCEPTING THE CREDIT WORTHINESS OF THE SHARE APPLICANTS CANNOT BE FAULTED. THUS, WE F IND THAT AO AFTER RE AFORESAID ENQUIRIES AS DISCUSSED AND AFTER RECORD ING THE STATEMENT OF THE DIRECTOR OF ASSESSEE COMPANY U/S 131 OF THE ACT HAS ACCEPTED T HE SHARE TRANSACTION, WHICH ACTION OF AO CANNOT BE TER MED AS A CASE OF NO ITA NO. M/S ACS TRADERS PVT. LTD. 97). THUS, WE NOTE THAT THE AO AFTER VERIFICATION A S AFORESAID HAS NOT DRAWN ANY ADVERSE OPINION OR DOUBTED THE I DENTITY OF THE SHARE APPLICANTS WHICH VIEW OF THE AO IS A PLAUSIBLE VIEW IN THE LIGHT OF THE DOCUMENTS AND COMING TO THE CREDITWORTHINESS OF THE SHAREHOLD ERS, IT IS NOTED FROM THE DETAILS GIVEN IN THE BALANCE SHEET OF THE SHAREHOLD ERS, THE NET WORTH AS PER BALANCE SHEET AS ON 31.03.2009 & 31.03.2010 AS WELL AS THE SUM INVESTED BY THEM IN THE ASSESSEE IS DISCERNIBLE AS UNDER: IT IS NOTED THAT THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION IS AY AND IN THIS ASSESSMENT YEAR AS PER LAW APPLICABLE T O THIS YEAR IS CONCERNED, THE ASSESSEE IS DUTY BOUND WHEN CALLED UPON BY THE AO T O SHOW HIM (AO) THE EVIDENCE OF THE SHARE CAPITAL WHICH IN THIS CASE THE ASSES SEE HAD DISCHARGED WHICH REQUIREMENT OF LAW CAME IN TO EXISTENCE FRO M ASSESSMENT YEAR I.E. AY 2013 -14 AND NOT IN THIS RELEVANT AY 2010- 11 THAT AOS ACTION OF ACCEPTING THE CREDIT WORTHINESS OF THE SHARE APPLICANTS CANNOT BE IND THAT AO AFTER RE - OPENING THE ASSESSMENT HAD CONDUCTED THE AFORESAID ENQUIRIES AS DISCUSSED AND AFTER RECORD ING THE STATEMENT OF THE DIRECTOR OF ASSESSEE COMPANY U/S 131 OF THE ACT HAS ACCEPTED T HE SHARE TRANSACTION, WHICH MED AS A CASE OF NO - ENQUIRY AS INCORRECTLY ITA NO. 466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 14 | P A GE 97). THUS, WE NOTE THAT THE AO AFTER VERIFICATION A S AFORESAID DENTITY OF THE SHARE APPLICANTS WHICH VIEW OF THE AO IS A PLAUSIBLE VIEW IN THE LIGHT OF THE DOCUMENTS AND COMING TO THE CREDITWORTHINESS OF THE SHAREHOLD ERS, IT IS NOTED FROM THE ERS, THE NET WORTH AS PER BALANCE SHEET AS ON 31.03.2009 & 31.03.2010 AS WELL AS THE SUM INVESTED BY THEM IN THE IT IS NOTED THAT THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION IS AY 2010- AND IN THIS ASSESSMENT YEAR AS PER LAW APPLICABLE T O THIS YEAR IS CONCERNED, THE ASSESSEE IS DUTY BOUND WHEN CALLED UPON BY THE AO T O SHOW HIM (AO) THE EVIDENCE OF THE SHARE CAPITAL WHICH IN THIS CASE THE ASSES SEE HAD DISCHARGED WHICH REQUIREMENT OF LAW CAME IN TO EXISTENCE FRO M 11 . THUS, WE FIND THAT AOS ACTION OF ACCEPTING THE CREDIT WORTHINESS OF THE SHARE APPLICANTS CANNOT BE OPENING THE ASSESSMENT HAD CONDUCTED THE AFORESAID ENQUIRIES AS DISCUSSED AND AFTER RECORD ING THE STATEMENT OF THE DIRECTOR OF ASSESSEE COMPANY U/S 131 OF THE ACT HAS ACCEPTED T HE SHARE TRANSACTION, WHICH ENQUIRY AS INCORRECTLY HELD BY THE LD. ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 15 | P A GE PCIT. TO SUM UP WE FIND THAT AFTER PROCESSING THE RETURN OF INCOME OF THE ASSESSEE U/S 143(1) OF THE ACT THE AO RE-OPENED THE SAME BY RECORDING THE REASON (SUPRA) AND IT IS NOTED FROM THE REASON TO RE-OPEN WAS PRECISELY FOR THE SAME REASON I.E. [ ON WHICH ISSUE THE LD. PCIT IN THE IMPUGNED ORDER CON CLUDED THAT THE AO FAILED TO ENQUIRE ON THE ISSUE I.E. SHARE CAPITAL RS. 1 CROR E ]. THE AO IN THE REASONS RECORDED HAD EXPRESSED HIS DESIRE TO RE-OPEN ON THE VERY S AME ISSUE I.E. SHARE CAPITAL OF RS. 1 CRORE AND WHICH WAS THE FACTUAL B ASIS FOR FORMING A BELIEF ABOUT THE ESCAPEMENT OF INCOME, WHICH FACT IS CLEARLY DISCERN IBLE FOR REASONS RECORDED TO RE- OPEN (SUPRA) ITSELF. AND WE FIND THAT AFTER RE-OPEN ING, THE AO HAS ENQUIRED BY ISSUING NOTICE U/S 133(6) DIRECTLY TO THE SEVEN SH ARE APPLICANTS WHICH WERE REPLIED BY THEM DIRECTLY TO AO; AND ON SUMMONS U/S 131 OF T HE ACT, THE ASSESSEE COMPANYS DIRECTOR HAD APPEARED BEFORE THE AO AND HIS STATEME NT WAS RECORDED UNDER OATH BY AO U/S 131 OF THE ACT. AND ALL THE SEVEN SHARE SUB SCRIBER ARE INCOME TAX ASSESSEES AND THEIR ENTIRE DETAILS AS DISCUSSED (SUPRA) HAS B EEN FILED BEFORE THE AO PURSUANT TO HIS NOTICES AND THE AO BEING SATISFIED WITH THEIR I DENTITY, CREDITWORTHINESS & GENUINITY HAVE ACCEPTED AFTER ENQUIRY, THE SHARE CA PITAL OF RS. 1 CRORE WHICH IS A PLAUSIBLE VIEW AS FAR AS LAW WAS APPLICABLE FOR AY 2010-11 IS CONCERNED. SO THE LD. PCIT ERRED IN FINDING THAT NO ENQUIRY WAS CONDUCTED . THE LD. PCITS ACTION TO INTERFERE EXERCISE THE REVISIONAL JURISDICTION BY T ERMING THE AOS ACTION AS A FALL OUT OF NO ENQUIRY IS PERVERSE; AND HIS FINDING FAULT WI TH THE AO FOR NOT GOING BEHIND THE CASH-TRAIL IS ALSO ERRONEOUS, FOR THE SIMPLE REASON THAT AS PER THE LAW IN FORCE DURING AY 2010-11, THE ASSESSEE HAD DISCHARGED THE ONUS OF SHARE CAPITAL BY ADDUCING EVIDENCE OF THE SOURCE OF MONEY AND THE AO HAS FO UND IT TO BE SATISFYING AND SO HE ACCEPTED IT AFTER ENQUIRY. SO WE FIND THAT THE AO H AD DISCHARGED THE ROLE OF AN INVESTIGATOR AS FAR AS LAW WAS APPLICABLE FOR AY 20 10-11 IS CONCERNED. AND SINCE THE DOCUMENTS/MATERIAL COLLECTED BY THE AO DURING THE R E-ASSESSMENT PROCEEDINGS ARE IN THE ASSESSMENT FOLDER OF THE ASSESSEE AND WHICH COU LD HAVE BEEN BEFORE THE LD. PCIT, SO BEFORE FINDING FAULT WITH THE AO IN RESPEC T OF ENQUIRY, THE LD. PCIT SHOULD HAVE BROUGHT OUT AS TO WHERE OR HOW, THE AO FAULTED IN HIS ENQUIRY, AND FOR THAT HE (LD PCIT) SHOULD HIMSELF HAVE CONDUCTED ENQUIRY AND BROUGHT OUT ANY DEFICIENCY/INFIRMITY IN THE DOCUMENTS/MATERIAL COLL ECTED BY THE AO, WHICH THE LD. ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 16 | P A GE PCIT HAS NOT DONE. SO THE IMPUGNED ACTION OF LD. PC IT CANNOT BE COUNTENANCED. ACCORDING TO US, THERE SHOULD BE FINALITY OF LIS OR ELSE THERE WILL NEVER BE ANY END TO THE DISPUTES. AND AS WE DISCUSSED IN THE FACTS & C IRCUMSTANCES OF THE CASE THE AOS VIEW ON SHARE CAPITAL & PREMIUM WAS A PLAUSIBLE VIE W AS FAR AS LAW WAS APPLICABLE FOR AY 2010-11 IS CONCERNED SINCE IT IS IN LINE WIT H THE DECISION OF NUMBER OF JUDICIAL PRECEDENTS WHICH ARE AS UNDER: 15. IN THE CASE OF CITV. S. KAMALJEET SINGH [2005] 147 TAXMAN 18(ALL.) THEIR LORDSHIPS, ON THE ISSUE OF DISCHARGE OF ASSESSEE'S ONUS IN RELATION TO A CASH CREDIT APPEARING IN HIS BOOKS OF ACCOUNT, HAS OBSERVED AND HELD AS UNDER:- '4. THE TRIBUNAL HAS RECORDED A FINDING THAT THE AS SESSEE HAS DISCHARGED THE ONUS WHICH WAS ON HIM TO EXPLAIN THE NATURE AND SOURCE O F CASH CREDIT IN QUESTION. THE ASSESSEE DISCHARGED THE ONUS BY PLACING (I) CONFIRM ATION LETTERS OF THE CASH CREDITORS; (II) THEIR AFFIDAVITS; (III) THEIR FULL ADDRESSES A ND GIR NUMBERS AND PERMANENT ACCOUNT NUMBERS. IT HAS FOUND THAT THE ASSESSEE'S BURDEN ST OOD DISCHARGED AND SO, NO ADDITION TO HIS TOTAL INCOME ON ACCOUNT OF CASH CREDIT WAS C ALLED FOR. IN VIEW OF THIS FINDING, WE FIND THAT THE TRIBUNAL WAS RIGHT IN REVERSING THE O RDER OF THE AA C, SETTING ASIDE THE ASSESSMENT ORDER. 16. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HON'BLESUPREME COURT WHILE DISMISSING SLP IN THE CASE OF LOVELY EXPORTS AS HAS BEEN REPORTED AS JUDGMENT DELIVERED BY THE CTR AT 216 CTR 295: 'CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1961? WE FIND NO MERIT IN TH IS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY I S RECEIVED BY THE ASSESSEE- COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAME S ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPU GNED JUDGMENT. 17. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT WHILE RELYING ON THE CASE OF LOVELY EXPORTS, IN THE APPEAL OF COMISSIONER OF INCOME TAX, KOLKATA-IV VS ROSEBERRY MERCANTILE ( P) LTD., ITAT NO. 241 OF 2010 DATED 10- 01-2011 HAS HELD: 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTERED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTE D MONEY AND THE LD. CIT (A) ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 17 | P A GE OUGHT TO HAVE HELD THAT THE ASSESSEE HAD NOT ESTABL ISHED THE GENUINENESS OF THE TRANSACTION. ' IT APPEARS FROM THE RECORD THAT IN THE ASSESSMENT P ROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATIO N HAD BROUGHT RS. 4, 00, 000/- AND RS.20,00,000/- TOWARDS SHARE CAPITAL AND SHARE PREM IUM RESPECTIVELY AMOUNTING TO RS.24,00, 000/- FROM FOUR SHAREHOLDERS BEING PRIVAT E LIMITED COMPANIES. THE ASSESSING OFFICER ON HIS PART CALLED FOR THE DETAILS FROM THE ASSESSEE AND ALSO FROM THE SHARE APPLICANTS AND ANALYZED THE FACTS AND ULTIMATELY OB SERVED CERTAIN ABNORMAL FEATURES, WHICH WERE MENTIONED IN THE ASSESSMENT ORDER. THE A SSESSING OFFICER, THEREFORE, CONCLUDED THAT NATURE AND SOURCE OF SUCH MONEY WAS QUESTIONABLE AND EVIDENCE PRODUCED WAS UNSATISFACTORY. CONSEQUENTLY, THE ASSE SSING OFFICER INVOKED THE PROVISIONS UNDER SECTION 68/69 OF THE INCOME TAX AC T AND MADE ADDITION OF RS.24,00,000/-. ON APPEAL THE LEARNED CIT (A) BY FOLLOWING THE DECI SION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD., R EPORTED IN (2008) 216 CTR 195 ALLOWED THE APPEAL BY HOLDING -THAT SHARE CAPITAL/P REMIUM OF RS. 24,00,000/- RECEIVED FROM THE INVESTORS WAS NOT LIABLE TO BE TREATED UND ER SECTION 68 AS UNEXPLAINED CREDITS AND IT SHOULD NOT BE TAXED IN THE HANDS OF THE APPE LLANT COMPANY. AS INDICATED EARLIER, THE TRIBUNAL BELOW DISMISSED THE APPEAL FILED BY THE REVENUE. AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD. [SUPRA], WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT I NVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISION IN FAVOUR OF THE AS SESSEE AND THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APP EAL IS DEVOID OF ANY SUBSTANCE AND IS DISMISSED. 18. OUR ATTENTION WAS DRAWN TO THE DECISION OF THE HON'BLE HIGH COURT, CALCUTTA IN THE CASE OF COMMISSIONER OF INCOME TAX VS M/S. N ISHAN INDO COMMERCE LTD DATED 2 DECEMBER, 2013 IN INCOME TAX APPEALNO.52 OF 2001 WHEREIN THE COURT HELD AS FOLLOWS: THE ASSESSING OFFICER WAS OF THE VIEW THAT THE INC REASE IN SHARE CAPITAL BY RS.52,03,500/- WAS NOTHING BUT THE INTRODUCTION OF THE ASSESSEE'S OWN UNDISCLOSED FUNDS/INCOME INTO THE BOOKS OF ACCOUNTS OF THE ASSE SSEE COMPANY. THE ASSESSING OFFICER ACCORDINGLY TREATED THE INVESTMENT AS UNEXP LAINED CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFOR E THE COMMISSIONER OF INCOME TAX (APPEALS) BEING THE FIRST APPELLATE AUTHORITY AND C ONTENDED THAT THE ASSESSING OFFICER HAD NO MATERIAL TO SHOW THAT THE SHARE CAPI TAL WAS THE INCOME OF THE ASSESSEE COMPANY AND AS SUCH THE ADDITION MADE BY THE ASSESS ING OFFICER UNDER SECTION 68 OF THE ACT WAS WRONG. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AF TER HEARING THE DEPARTMENT AND THE ASSESSEE COMPANY DELETED THE ADDITION OF RS. 52 , 03,500/- TO THE INCOME OF THE ASSESSEE COMPANY DURING THE ASSESSMENT YEAR IN QUES TION. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS FOUND THAT THERE WERE AS MANY AS 2155 ALLOTTEES, WHOSE NAMES, ADDRESSES AND RESPECTIVE SHARES ALLOCATION H AD BEEN DISCLOSED. ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 18 | P A GE THE COMMISSIONER OF INCOME TAX APPEALS, FURTHER FOU ND THAT THE ASSESSEE COMPANY RECEIVED THE APPLICATIONS THROUGH BANKERS TO THE IS SUE, WHO HAD BEEN APPOINTED UNDER THE GUIDELINES OF THE STOCK EXCHANGE AND THE ASSESS EE COMPANY HAD BEEN ALLOTTED SHARES ON THE BASIS OF ALLOTMENT APPROVED BY THE ST OCK EXCHANGE. THE ASSESSEE COMPANY HAD DULY FILED THE RETURN OF ALLOTMENT WITH THE REGISTRAR OF COMPANIES, GIVING COMPLETE PARTICULARS OF THE ALLOTTEES. THE COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT INQUIRES HAD CONFIRMED THE EXISTENCE OF MOST OF THE SHAREHOLDERS AT THE ADDRES SES INTIMATED TO THE ASSESSING OFFICER, BUT THE ASSESSING OFFICER TOOK THE VIEW TH AT THEIR INVESTMENT IN THE ASSESSEE COMPANY WAS NOT GENUINE, ON THE BASIS OF SOME EXTRA NEOUS REASONS. THE COMMISSIONER OF INCOME TAX (APPEALS) TOOK NOTE OF T HE OBSERVATION OF THE ASSESSING OFFICER THAT ENQUIRY CONDUCTED BY THE INCOME TAX IN SPECTOR HAD REVEALED THAT NINE PERSONS MAKING APPLICATIONS FOR 900 SHARES WERE NOT AVAILABLE AT THE GIVEN ADDRESS AND RIGHTLY CONCLUDED THAT THE TOTAL SHARE CAPITAL ISSUED BY THE ASSESSEE COMPANY COULD NOT BE ADDED AS UNEXPLAINED CASH CREDIT UNDER 'SECTION 68 OF THE INCOME TAX ACT. MOREOVER, IF THE NATURE AND SOURCE OF INVESTME NT BY ANY SHAREHOLDER, IN SHARES OF THE ASSESSEE COMPANY REMAINED UNEXPLAINED, LIABILIT Y COULD NOT BE FOISTED ON THE COMPANY. THE CONCERNED SHAREHOLDERS WOULD HAVE TO E XPLAIN THE SOURCE OF THEIR FUND. THE LEARNED COMMISSIONER ON CONSIDERING THE SUBMISS IONS OF THE, RESPECTIVE PARTIES AND CONSIDERING THE MATERIALS, FOUND THAT THE ASSES SING OFFICER HAD APPLIED THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT ARBI TRARILY AND ILLEGALLY AND IN ANY CASE WITHOUT GIVING THE ASSESSEE ADEQUATE OPPORTUNI TY OF REPRESENTATION AND/OR HEARING. LEARNED TRIBUNAL AGREED WITH THE FACTUAL FINDINGS O F THE LEARNED COMMISSIONER AND ACCORDINGLY THE LEARNED TRIBUNAL DISMISSED THE APPE AL OF THE REVENUE AND AFFIRMED THE DECISION OF THE LEARNED COMMISSIONER. MR. DUTTA APPEARING ON BEHALF OF THE PETITIONERS CI TED JUDGMENT OF THE DIVISION BENCH OF THIS COURT IN COMMISSIONER OF INCOME TAX VS. RUB Y TRADERS AND EXPORTERS LIMITED REPORTED IN 236 (2003) ITR 3000 WHERE A DIVISION BE NCH OF THIS COURT HELD THAT WHEN SECTION 68 IS RESORTED TO, IT IS INCUMBENT ON THE A SSESSEE COMPANY TO PROVE AND ESTABLISH THE IDENTITY OF THE SUBSCRIBERS, THEIR CR EDIT WORTHINESS AND THE GENUINENESS OF THE TRANSACTION. THE AFORESAID JUDGMENT WAS RENDERED IN THE CONTEXT OF THE FACTUAL BACKGROUND OF THE AFORESAID CASE WHERE, DESPITE SEVERAL OPPORTUNITIES BEING GIVEN TO THE ASSESSEE, NOTHING WAS DISCLOSED ABOUT THE IDENTITY OF THE SHA REHOLDERS. IN THE INSTANT CASE, THE ASSESSEE DISCLOSED THE IDENTITY AND ADDRESS AND PAR TICULARS OF SHARE ALLOCATION OF THE SHAREHOLDERS. IT WAS ALSO FOUND ON THE FACTS THAT A LL THE SHAREHOLDERS WERE IN EXISTENCE. ONLY NINE SHAREHOLDERS SUBSCRIBING TO AB OUT 900 SHARES OUT OF 6, 12,000 SHARES WERE NOT FOUND AVAILABLE AT THEIR ADDRESSES, AND THAT TOO, IN COURSE OF ASSESSMENT PROCEEDINGS IN THE YEAR 1994, I.E., ALMO ST 3 YEARS AFTER THE ALLOTMENT. BY AN ORDER DATED 2ND MAY, 2001, THIS COURT ADMITTE D THE APPEAL ON THREE QUESTIONS WHICH ESSENTIALLY CENTRE AROUND THE QUESTION OF WHE THER THE APPELLATE COMMISSIONER ERRED IN LAW IN DELETING THE ADDITION OF RS. 52, 03 , 500/- TO THE INCOME OF THE ASSESSEE AS MADE BY THE ASSESSING OFFICER. WE ARE OF THE VIE W THAT THERE IS NO QUESTION OF LAW INVOLVED IN THIS APPEAL FAR LESS ANY SUBSTANTIAL QU ESTION OF LAW. THE LEARNED TRIBUNAL HAS CONCURRED WITH THE LEARNED COMMISSIONER ON FACTS AND FOUND THAT THERE WERE MATERIALS TO SHOW THAT THE AS SESSEE HAD DISCLOSED THE PARTICULARS OF THE SHAREHOLDERS. THE FACTUAL FINDIN GS CANNOT BE INTERFERED WITH, IN ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 19 | P A GE APPEAL. WE ARE OF THE VIEW THAT ONCE THE IDENTITY A ND OTHER RELEVANT PARTICULARS OF SHAREHOLDERS ARE DISCLOSED, IT IS FOR THOSE SHAREHO LDERS TO EXPLAIN THE SOURCE OF THEIR FUNDS AND NOT FOR THE ASSESSEE COMPANY TO SHOW WHER EFROM THESE SHAREHOLDERS OBTAINED FUNDS. 19. FURTHER, OUR ATTENTION WAS DRAWN TO THE DECISI ON OF THE HON'BLE HIGH COURT, CALCUTTA IN THE CASE OF COMMISSIONER OF INCOME TAX VS M/S.LEONARD COMMERCIAL (P) LTD ON 13 JUNE, 2011 IN ITAT NO 114 OF 2011 WHE REIN THE COURT HELD AS FOLLOWS: THE ONLY QUESTION RAISED IN THIS APPEAL IS WHETHER THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL BELOW ERRED IN LAW IN DE LETING THE ADDITION OF RS.8,52,000/-, RS. 91,50,000/- AND RS. 13,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHARE CAPITAL, SHARE APPLICATION MONEY A ND INVESTMENT IN HTCCL RESPECTIVELY. AFTER HEARING MD. NIZAMUDDIN, LEARNED ADVOCATE APPE ARING ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE MATERIALS ON RECORD, WE FIND THAT ALL SUCH APPLICATION MONEY WERE RECEIVED BY THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES AND THE ASSESSEE ALSO DISCLOSED THE COMPLETE LIST O F SHAREHOLDERS WITH THEIR COMPLETE ADDRESSES AND GIR NUMBERS FOR THE RELEVANT ASSESSME NT YEARS IN WHICH SHARE APPLICATION WAS CONTRIBUTED. IT FURTHER APPEARS THA T ALL THE PAYMENTS WERE MADE BY THE APPLICANTS BY ACCOUNT PAYEE CHEQUES. IT APPEARS FROM THE ASSESSING OFFICERS ORDER THAT H IS GRIEVANCE WAS THAT THE ASSESSEE WAS NOT WILLING TO PRODUCE THE PARTIES WHO HAD ALLE GEDLY ADVANCED THE FUND. IN OUR OPINION, BOTH THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL BELOW WERE JUSTIFIED IN HOLDING THAT AFTER DISCLOSU RE OF THE FULL PARTICULARS INDICATED ABOVE, THE INITIAL ONUS OF THE ASSESSEE WAS SHIFTED AND IT WAS THE DUTY OF THE ASSESSING OFFICER TO ENQUIRE WHETHER THOSE PARTICULARS WERE C ORRECT OR NOT AND IF THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PARTICULARS SUPPLI ED WERE INSUFFICIENT TO DETECT THE REAL SHARE APPLICANTS, TO ASK FOR FURTHER PARTICULA RS. THE ASSESSING OFFICER HAS NOT ADOPTED EITHER OF THE AFORESAID COURSES BUT HAS SIMPLY BLAMED THE ASSESSEE FOR NOT PRODUCING THOSE SHARE A PPLICANTS. IN OUR VIEW, IN THE CASE BEFORE US SO LONG THE ASSE SSING OFFICER WAS UNABLE TO ARRIVE AT A FINDING THAT THE PARTICULARS GIVEN BY THE ASSE SSEE WERE FALSE, THERE WAS NO SCOPE OF ADDING THOSE MONEY UNDER SECTION 68 OF THE INCOM E- TAX ACT AND THE TRIBUNAL BELOW RIGHTLY HELD THAT THE ONUS WAS VALIDLY DISCHARGED. WE, THUS, FIND THAT BOTH THE AUTHORITIES BELOW, ON CONSIDERATION OF THE MATERIALS ON RECORD, RIGHTLY APPLIED THE CORRECT LAW WHICH ARE R EQUIRED TO BE APPLIED IN THE FACTS OF THE PRESENT CASE AND, THUS, WE DO NOT FIND ANY REAS ON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT BASED ON MATERIALS ON RECORD. THE APPEAL IS, THUS, DEVOID OF ANY SUBSTANCE AND IS DISMISSED SUMMARILY AS IT DOES NOT INVOLVE ANY SUBSTANTIAL QUESTION OF LAW. ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 20 | P A GE 20. AS NOTED FROM THE JUDICIAL PRECEDENTS CITED ABO VE, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE THEN THERE IS A DUTY CASTED UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CREDIT FOUND IN HI S BOOKS, WHEN CALLED UPON BY THE AO TO DO SO. IN THE INSTANT CASE, THE CREDIT IS IN THE FORM OF RECEIPT OF SHARE CAPITAL WITH PREMIUM FROM SHARE APPLICANTS. THE NATURE OF R ECEIPT TOWARDS SHARE CAPITAL IS SEEN FROM THE ENTRIES PASSED IN THE RESPECTIVE BALA NCE SHEETS OF THE COMPANIES AS SHARE CAPITAL AND INVESTMENTS. IN RESPECT OF SOURC E OF CREDIT, THE ASSESSEE HAS TO PROVE THE THREE NECESSARY INGREDIENTS I.E. IDENTITY OF SHARE APPLICANTS, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF SHARE APPLICAN TS. FOR PROVING THE IDENTITY OF SHARE APPLICANTS, THE ASSESSEE FURNISHED THE NAME, ADDRESS, PAN OF SHARE APPLICANTS TOGETHER WITH THE COPIES OF BALANCE SHEETS AND INCO ME TAX RETURNS. WITH REGARD TO THE CREDITWORTHINESS OF SHARE APPLICANTS, A PERUSAL OF THEIR RESPECTIVE BALANCE SHEETS REVEALS THAT THESE COMPANIES ARE HAVING ENOUGH CAPI TAL AND THE INVESTMENT MADE IN THE APPELLANT COMPANY IS ONLY A SMALL PART OF THEIR CAPITAL. THESE TRANSACTIONS ARE ALSO DULY REFLECTED IN THE BALANCE SHEETS OF THE SHARE A PPLICANTS, SO CREDITWORTHINESS IS PROVED. EVEN IF THERE WAS ANY DOUBT IF ANY REGARDIN G THE CREDITWORTHINESS OF THE SHARE APPLICANTS WAS STILL SUBSISTING, THEN AO SHOU LD HAVE MADE ENQUIRIES FROM THE AO OF THE SHARE SUBSCRIBERS AS HELD BY HONBLE JURI SDICTIONAL HIGH COURT IN CIT VS DATAWARE (SUPRA) WHICH HAS NOT BEEN DONE, SO NO ADV ERSE VIEW COULD HAVE BEEN DRAWN. THIRD INGREDIENT IS GENUINENESS OF THE TRANS ACTIONS, FOR WHICH WE NOTE THAT THE MONIES HAVE BEEN DIRECTLY PAID TO THE ASSESSEE COMP ANY BY ACCOUNT PAYEE CHEQUES OUT OF SUFFICIENT BANK BALANCES AVAILABLE IN THEIR BANK ACCOUNTS ON BEHALF OF THE SHARE APPLICANTS. THE SHARE APPLICANTS HAVE CONFIRMED THE SHARE APPLICATION IN RESPONSE TO THE NOTICE U/S 133(6) OF THE ACT AND HAVE ALSO CONF IRMED THE PAYMENTS WHICH ARE DULY CORROBORATED WITH THEIR RESPECTIVE BANK STATEM ENTS AND ALL THE PAYMENTS ARE BY ACCOUNT PAYEE CHEQUES. THUS THE ASSESSEE HAS DISCHA RGED THE ONUS ON IT; AND THE AO ENQUIRED ABOUT IT DURING THE REASSESSMENT AFTER REO PENING PROCEEDING FOR THIS ISSUE AND IT HAS BEEN THOROUGHLY ENQUIRED AS DISCUSSED SU PRA AND THE VIEW TAKEN BY AO IS A PLAUSIBLE VIEW IN LINE WITH THE JUDICIAL PRECEDEN CE SUPRA AND SO IT CANNOT BE CALLED ERRONEOUS. SO THE LD PCIT ERRED IN HOLDING THE AOS RE-ASSESSMENT ORDER AS ERRONEOUS. ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 21 | P A GE 21. IN THE LIGHT OF THE AFORESAID JUDICIAL PRECEDEN TS AND IN THE LIGHT OF FACT THAT AO HAS CONDUCTED ENQUIRIES IN RESPECT OF SHARE CAPITAL COLLECTED BY THE ASSESSEE COMPANY BEFORE ACCEPTING THE SHARE SUBSCRIBERS IDENTITY, CR EDITWORTHINESS AND GENUINENESS OF THE TRANSACTION AND BEING SATISFIED DID NOT FIND IT NECESSARY TO MAKE ANY ADDITION U/S 68 OF THE ACT, WHICH ACTION COULD NOT HAVE BEEN INT ERFERED BY THE LD. PCIT U/S 263 OF THE ACT SINCE THE JURISDICTIONAL CONDITION PREC EDENT FOR INVOKING THE SAME IS NOT SATISFIED IN THE FACTS OF THIS CASE AS DISCUSSED SU PRA. HOWEVER IN CASE STILL IF HE (LD. PCIT) WANTED TO EXERCISE HIS JURISDICTION DESPITE T HE AO MAKING ENQUIRIES AS FOUND BY US (SUPRA), THEN HE (LD. PCIT) SHOULD HAVE HIMSE LF CONDUCTED PRELIMINARY ENQUIRY AND SHOULD HAVE BEEN ABLE TO SHOW THAT AOS ENQUIRY WAS NOT CORRECTLY MADE BY FINDING DEFICIENCY/INFIRMITY IN THE DOCUMENTS/ MATE RIAL COLLECTED BY THE AO OR EVEN ABLE TO DISPROVE THE TRANSACTION OF SHARE CAPITAL B Y BRINGING MATERIAL TO SUGGEST THAT THE SHARE TRANSACTION OF ASSESSEE WAS AN EYE WASH. THIS EXERCISE THE LD. PCIT HAS NOT CARRIED OUT. SO ACCORDING TO US, IN THE LIGHT OF T HE ENQUIRIES CONDUCTED BY THE AO IN RESPECT OF SHARE TRANSACTION, THE LD. PCIT COULD NO T HAVE FOUND THE ACTION OF AO TO BE ERRONEOUS FOR WANT OF NO ENQUIRY. AND THE VIEW T AKEN BY THE AO IN RESPECT OF SHARE TRANSACTION IS A PLAUSIBLE VIEW; AND AT ANY R ATE CANNOT BE TERMED AS UN- SUSTAINABLE VIEW. WE NOTE THAT THE LD. PCIT PROCEED ED ON WRONG, ASSUMPTION OF FACTS AND LAW. SINCE THE LD. PCIT HAS INTERFERED BY INVOKING 263 JURISDICTION WITHOUT SATISFYING THE CONDITION PRECEDENT I.E. AOS ORDER TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE REVENUE, THE ISSUANCE OF SCN AND CONSEQUENT IMPUGNED ACTION IS NULL IN THE EYES OF LAW. THEREFORE, THE ASSUMPTION OF REVISIONAL JURISDICTION IS BAD IN LAW AND SO QUASHED. 22. THE ASSESSEE HAD ALSO RAISED ADDITIONAL GROUND OF APPEAL WHICH IS AS UNDER: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, PROCEEDINGS INITIATED BY THE LD. PCIT U/S 263 AND THE IMPUGNED ORDER IS NOT VALI D FOR THIS REASON ALSO THAT THE LD. PCIT WANTS TO REVISE THE REASSESSMENT ORDER PAS SED U/S 147 BUT THAT ORDER ITSELF IS NOT VALID BECAUSE OF VARIOUS JURISDICTIONAL DEFE CTS SUCH AS NO SATISFACTION RECORDED OF THE LD. AO, REOPENING ONLY FOR VERIFICATION, MEC HANICAL SANCTION BY HIGHER AUTHORITIES, BORROWED SATISFACTION, REASONS RECORDE D ARE SCANTY AND VAGUE, REOPENING FOR FISHING AND ROVING INQUIRIES AND HENC E THE IMPUGNED ORDER U/S 263 SHOULD BE SET ASIDE AS VOID. ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 22 | P A GE 2. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, M ODIFY, RESCIND, SUPPLEMENT, OR ALTER THE GROUND STATED HEREIN ABOVE, EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 23. SINCE WE HAVE ALREADY ALLOWED THE LEGAL ISSUE RAISED BY THE ASSESSEE THAT THE LD. PCIT LACKED JURISDICTION TO INVOKE SECTION 263 OF THE ACT, AND THEREFORE THE IMPUGNED ACTION ITSELF IS AB-INITIO VOID THEREFORE WE HAVE QUASHED IT. THEREFORE, WE ARE NOT INCLINED TO ADJUDICATE THE ADDITIONAL GROUN D OF APPEAL (SUPRA) SINCE IT HAS BECOME ACADEMIC AND IS LEFT OPEN. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH, 2021. SD/- SD/- (J.S. REDDY) (A. T . VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26.03.2021 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- ACS TRADERS PVT. LTD. ,7, DR. ABANI DUTT A ROAD, HOWRAH, WEST BENGAL-711106. 2. RESPONDENT PCIT-5, KOLKATA 3. THE PR.CIT-5, KOLKATA 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES, KOLKATA ITA NO.466/KOL/2020 M/S ACS TRADERS PVT. LTD. A.Y. 2010-11 23 | P A GE