DCIT, New Delhi V. M/s. Hi- Tech Residency Pvt. Ltd., New Delhi

ITA 4707/DEL/2012

• Counselvise Citation: 470720114 RSA 2012
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Capital asset; Search and seizure; Additional evidence
• Section: 143(3); 50C; 131; 68

Judgement Text

ITA NO.4707/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 4707 /DEL/201 2 A.Y. : 200 9 - 10 DCIT, CIRCLE 12(1), NEW DELHI VS. M/S HI - TECH RESIDENCY PVT. LTD., A-12 SWASTHYA VIHAR,. DELHI-92 (PAN:AOBCH5346N) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. T.VASANTHAN, SR. DR ASSESSEE BY : SH. C.S. ANAND, CA DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 09 0909 09- -- -12 1212 12- -- -201 201 201 2015 55 5 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 18 1818 18- -- -12 1212 12- -- -201 201 201 2015 55 5 ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU : : : : J JJ JM MM M THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST T HE IMPUGNED ORDER DATED 18/6/2012 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XV, NEW DELHI ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE HAS DISCHARG ED ITS ONUS OR PROVING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE N INE CORPORATE ENTITIES FROM WHOM SHARE APPLICATION MONEY OF RS.13,00,000/-, SHA RE PREMIUM OF RS.1, 17,00,000/- AND UNSECURED LOANS OF RS.95,00,0 00/- SHOWN TO HAVE BEEN RECEIVED BY THE ASSESSEE. ITA NO.4707/DEL/2012 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE ADVERSE FINDINGS OF THE AO . MENTIONED IN THE ASSESSMENT ORDER. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,30,00,000/- MADE U/S 68 OF THE ACT IN RESPECT OF UNEXPLAINED CREDITS INTRODUCED IN THE GA RB OF SHARE APPLICATION MONEY/SHARE CAPITAL AND SHARE PREMIUM SHOWN TO HAVE BEEN RECEIVED FROM SIX CORPORATE ENTITIES. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND. IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.95,00,000/- MA DE U/S 68 OF THE ACT IN RESPECT OF UNEXPLAINED CREDITS INTRODUCED IN THE GA RB OF UNSECURED LOANS SHOWN TO HAVE BEEN RECEIVED FROM THREE CORPORATE ENTITIES . 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.15,00,000/- MA DE U/S 68 IN RESPECT OF UNEXPLAINED EARNEST MONEY SHOWN TO HAVE BEEN RECEIV ED FROM TWO PARTIES, BY ACCEPTING THE ADDITIONAL EVIDENCE WITHOUT PROVIDING ANY OPPORTUNITY TO THE AO. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.9,50,000/- MAD E U/S 68 IN RESPECT OF UNEXPLAINED CASH DEPOSIT IN BANK ACCOUNT BY ACCEPTI NG THE ADDITIONAL EVIDENCE WITHOUT PROVIDING ANY OPPORTUNITY TO THE AO. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,96,920/- MAD E U/S 50C(1) OF THE ACT. 8. THE APPELLANT CRAVES LEAVE, TO ADD, ALTER-OR AME ND ANY GROUND OF APPEAL RAISED ABOVERAT THE TIME OF THE HEARING. ITA NO.4707/DEL/2012 3 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSEE COMPANY IS ENGAGED IN THE BUSINESS OF REAL ESTATE AND ALSO SHOWN INTEREST INC OME ON LOANS AND ADVANCES GIVEN. THE ASSESSEE FILED E-RETURN DECLARING INCOME OF RS. 32,73,227/- ON 29.9.2009. THE RETURN WAS PROCESSED U/S. 143(1) AN D THE CASE WAS SELECTED FOR SCRUTINY. NOTICE U/S. 143(2) DATED 27.8.2010 WAS I SSUED AND SERVED UPON THE ASSESSEE. SUBSEQUENT NOTICES U/S. 143(2) AND 142(1 ) ALONGWITH QUESTIONNAIRE DATED 11.7.2011 WAS ISSUED AND SERVED UPON THE ASSE SSEE. IN RESPONSE TO THESE NOTICES AUTHORISED REPRESENTATIVE OF THE ASSESSEE A TTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TIME, FILED DETAILS AND PR ODUCED ACCOUNTS AND DOCUMENTS WHICH WERE SEEN ON TEST CHECK BASIS BY TH E ASSESSEE. THEREAFTER, THE ASSESSMENT ORDER WAS PASSED BY THE AO ON 29.12. 2011 U/S. 143(3) OF THE INCOME TAX ACT, 1961, ASSESSING THE TOTAL INCOME A T RS. 2,87,31,150/- FOR THE ASSESSMENT YEAR 2009-10 THEREBY MAKING VARIOUS ADDI TIONS. 3. AGAINST THE ABOVE ASSESSMENT ORDER, THE ASSESSE E APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 18.6.2012 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE T RIBUNAL. 5. AT THE TIME OF HEARING LD. DR RELIED UPON THE OR DER OF THE AO AND REITERATED THE CONTENTIONS RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL. 6. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A). 7. WE HAVE HEARD THE BOTH PARTIES AND PERUSED AND CONSIDERED THE RELEVANT RECORD AVAILABLE WITH US ESPECIALLY THE IMPUGNED OR DER PASSED BY THE LD. CIT(A). REVENUE AUTHORITIES; CASE LAWS CITED BY THE LD. DR AS WELL AS LD. COUNSEL FOR THE ASSESSEE. ITA NO.4707/DEL/2012 4 7.1 WITH REGARD TO ISSUE RAISED IN GROUND NO. 3 REL ATING TO DELETION OF ADDITION OF RS. 1,30,00,000/- MADE U/S. 68 OF THE ACT IN RES PECT OF UNEXPLAINED CREDITS INTRODUCED IN THE GARB OF SHARE APPLICATION MONEY/S HARE CAPITAL AND SHARE PREMIUM SHOWN TO HAVE BEEN RECEIVED FROM SIX CORPO RATE ENTITIES IS CONCERNED, WE FIND THAT LD. CIT(A) HAS ELABORATELY DISCUSSED / GIVEN THE FINDING ON THE ISSUE IN DISPUTE VIDE PARA NO. 5 TO 5.16 FROM PAGE S 13 TO 21 OF THE IMPUGNED ORDER. FOR THE SAKE OF CONVENIENCE, WE ARE REPRODU CING THE FINDINGS OF THE LD. CIT(A) AS UNDER:- 5. I HAVE GONE THROUGH THE ABOVE SUBMISSIONS OF TH E APPELLANT AND CONSIDERED THE FACTS AND EVIDENCES AVAILABLE ON RECORD. I HAVE ALSO PERUSED THE AO'S ORDER AND HAVE CONSIDERED THE CASE LAWS RELIED UPON BOTH BY THE AO AS WELL AS BY THE APPELLANT. 5.2 IT IS AN ESTABLISHED PREPOSITIONS THAT WHENEVE R THERE IS A CASH CREDIT IN THE ASSESSEE'S BOOKS OF ACCOUNT, THE ONUS IS ON THE ASS ESSEE TO PROVE THE THREE THINGS NAMELY, IDENTITY, CREDITWORTHINESS AND GENUINENESS. IF THE ASSESSEE FAILS ON ANY OF THESE PARAMETERS THE AO IS BOUND TO ADD SUCH CAS H CREDIT TO THE INCOME OF THE ASSESSEE. 5.3 IN THE FACTS OF THE CASE IN HAND IT IS SEEN THA T THE APPELLANT WHO IS ENGAGED IN THE BUSINESS OF REAL ESTATE HAD DURING THE YEAR ALLOTTED 1,30,000 SHARES AND COLLECTED RS. 1,30,00,000 FROM THE FOLLOWING 6 CORP ORATE ENTITIES: 1 MIS ZIRCON EXIM PVT. LTD. RS. 25,00,000 2 MIS CHARMINAR IMP EX PVT. LTD. RS.20,OO,OOO ITA NO.4707/DEL/2012 5 3 MIS KPM EXIM PVT. LTD. RS.20,OO,OOO 4 MIS RISHIKESH TREXIM PVT. LTD. RS.20,OO,OOO 5 MIS DINANATH SCRAP DEALER PVT. LTD. RS. 20,00,0 00 6 MIS OPA DISTRIBUTORS PVT. LTD. RS. 25,00,000 DURING THE COURSE OF ASSESSMENT PROCEEDING THE AO R ECEIVED FOLLOWING DOCUMENTS FROM APPELLANT, WHERE IN APPELLANT TRIED TO SATISFY THE IDENTITY, AS WELL AS THE GENUINENESS AND CREDITWORTHINESS OF THE SHAR EHOLDERS. (I) COPY OF CERTIFICATE OF INCORPORATION. (II) COPY OF COMPANY MASTER DETAIL, AS TAKEN OUT FROM MCA SITE. (III) COPY OF ITR ACKNOWLEDGEMENT FOR ASSESSMENT YEAR 2009-10 & 2010-11 (IV) COPY OF BANK STATEMENT, EVIDENCING PAYMENT MA DE TO THE APPELLANT TOWARDS SHARE ALLOTMENT. (V) COPY OF CONFIRMATION (VI) COPY OF BALANCE SHEET AS AT 31.03.2009. 5.3 HOWEVER THE ABOVE EVIDENCES WERE DISREGARDED B Y THE AO AND HE HELD THAT THE IDENTITY, GENUINENESS AND CREDITWORTHINESS IS NOT PROVED AND IT IS THE CASE OF ACCOMMODATION ENTRY, PRIMARILY BECAUSE OF T HE FOLLOWING REASONS: SHARE APPLICANT COMPANIES ARE BOGUS COMPANIES AS THEY ARE NON EXISTENT. THESE ENTITIES ARE NOT DOING ANY BUSINESS THE BANK TRANSACTIONS ARE ALL SHAM IN NATURE AND ONLY ONE PAGE BANK STATEMENT WAS SUBMITTED AND IMMEDIATELY AFTER CREDIT ENTRY, O N THE VERY NEXT DAY THERE IS A ITA NO.4707/DEL/2012 6 DEBIT ENTRY OF THE SAME AMOUNT. THE CREDIT HAS COME FROM THE ACCOUNT OF ONE GOLA SECURITIES LTD., MUMBAI WHICH IS ENGAGED IN TH E BUSINESS OF FINANCE AND INVESTMENT. WHEN SUMMONS WERE ISSUED TO THESE 6 CORPORATE ENT ITIES, THERE PRINCIPAL OFFICER/DIRECTOR DIDN'T APPEAR AND EVEN THE APPELLA NT EXPRESSED ITS INABILITY TO PRODUCE THEM. THE RETURNS OF INCOME FOR ASSESSMENT YEAR 2009-10 AND 2010-11 OF THESE ENTITIES DIDN'T SHOW THE ADEQUATE INCOME ALL THE 6 ENTITIES ARE. ON PAPER AND PROCESS ALL THE FORMALITIES OF PAN, CIN, DIN ETC. TO CLAIM THAT THEY ARE IN EXISTENCE. THUS THE APPELLANT HAS FAILED TO PROVE THE PHYSICAL IDENTITY OF THESE 6 CORPORATE ENTITIES, CREDITWORTHINESS AND GENUINENESS OF TRANS ACTION, HENCE RS. 1,30,000/- REMAINED UNEXPLAINED. . 5.4 FROM THE EVIDENCES PLACED ON RECORD IT IS SEEN THAT THE SHARES WERE ALLOTTED TO 6 CORPORATE ENTITIES BY THE APPELLANT AND THE MO NEY WAS RECEIVED THROUGH CHEQUES AND THE APPELLANT IN ITS SUPPORT OF THESE S HARE CAPITAL PROVIDED THE DETAILS VIZ CERTIFICATE OF INCORPORATION, COPY OF D ETAILS FROM THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS, COPIES OF ITR ACKNOW LEDGEMENTS FOR ASSESSMENT YEAR 2009-10 AND 2010-11, COPIES OF BANK STATEMENTS ETC. EVEN THE APPELLANT PROVIDED THE AO WITH ADDRESSES O F THESE 6 ENTITIES AND REQUESTED AO TO ISSUE THE SUMMONS UNDER SECTION 131 . THE FACTS THAT THE SUMMONS WERE ISSUED BY THE AO AND ALL THE 6 ENTITIE S DID RESPONDED TO THESE SUMMONS PROVES THE FACT THAT THESE ENTITIES ARE IN EXISTENCE AND THUS I HOLD THAT THE IDENTITY OF THE SHAREHOLDERS IS PROVED. ITA NO.4707/DEL/2012 7 5.5 WITH REGARD TO THE CREDITWORTHINESS AND GENUINE NESS OF THE TRANSACTION, IT IS OBSERVED THAT THE BALANCE SHEET OF ALL THE 6 CORPOR ATES WERE ON RECORD AND WERE AVAILABLE WITH THE AO. FROM THE PERUSAL OF SAM E IT IS SEEN THAT ALL THE 6 CORPORATES HAD SUFFICIENT ASSETS AND THEY HAD SUBST ANTIAL INVESTMENTS IN SHARES OF DIFFERENT COMPANIES, OF WHICH AROUND 20% OF INVESTM ENTS ONLY IS INVESTED IN THE APPELLANT COMPANY AS WILL BE EVIDENT FROM BELLOW ME NTIONED TABLE. NAME OF COMPANY TOTAL OF TOTAL TOTAL BALANCE SHEET INVESTMENT IN INVESTMENT AS AT 31.3.2009 EQUITY SHARES IN EQUITY AS ON SHARES IN SHARES IN ASSESSEE ZIRCON EXIM PVT. LTD. 1,63,06,883.57 1,36,50,000 25,00,000 CHARMINAR IMPEX PVT. LTD. 1,26,92,851.53 1,25,00,0 00 20,00,000 KPM EXIM PVT. LTD. 98,05,010.58 80,15,000 20,00,000 RISHIKESH TREXIM PVT. LTD. 2,00,11,754.91 1,90,0 0,000 20,00,000 DINANATH SCRAP DEALER (P) LTD. 1,77,77,052.00 1,74, 95,000 20,00,000 OPA DISTRIBUTORS PVT. LTD. 1,76,65,024.50 1,73,00,000 25,00,000 5.6 IF THE PRINCIPAL OFFICERS / DIRECTORS OF THESE CORPORATES HAVE NOT APPEARED BEFORE THE AO CONSEQUENT TO ISSUE OF SUMMONS UNDER SECTION 131, I FIND FROM THE RECORD THAT NO FURTHER ACTIONS / EFFORTS HAS BEEN T AKEN BY THE AO, BY IMPOSING ANY PENALTY ON THESE CORPORATE OR ANY KIND OF VERIF ICATION IS GOT DONE BY DEPUTING THE INSPECTORS OF THE DEPARTMENT TO VERIFY THE CREDITWORTHINESS AND GENUINENESS OF THESE CORPORATE ENTITIES. ITA NO.4707/DEL/2012 8 I FIND THAT NO INDEPENDENT EVIDENCE IS COLLECTED BY THE AO, NOR ANY ENQUIRY HAS BEEN DONE FROM ANY SOURCES INTERNAL OR EXTERNAL SOU RCES TO COME TO THE CONCLUSION THAT THESE 6 ENTITIES ARE SHAM AND ARE P APER COMPANIES. NO DOUBT THAT THESE 6 CORPORATE ENTITIES HAVE NOT S HOWN THE SUBSTANTIAL INCOME IN THEIR RETURN OF INCOME AND IN THEIR BANK ACCOUNT THERE ARE CREDIT ENTRIES COMING FROM GOLA SECURITIES IMMEDIATELY BEFORE THE MONEY I S INVESTED WITH THE APPELLANT, BUT WITHOUT EXAMINING OR WITHOUT MAKING ANY ENQUIRIES FROM THE GOLA SECURITIES OR FROM 6 CORPORATE ENTITIES AND GOING I NTO SOURCE OF SOURCE, ONE FAILS TO UNDERSTAND ON WHAT BASIS THE AO'S HAS CONCLUDED THAT THE SHARE MONEY COMING FROM 6 CORPORATE ENTITIES IS APPELLANT'S OWN MONEY. AO HAS NEITHER COLLECTED ANY IOTA OF EVIDENCE NOR HAS BROUGHT ANY MATERIAL ON RECORD WHICH CAN PROVE THAT THE SAID SHARE APPLICATION MONEY WAS APP ELLANT'S OWN MONEY. IT IS ALSO NOT A CASE WHERE THE INQUIRIES HAVE BEEN DONE BY THE INVESTIGATION WING OF THE DEPARTMENT WHERE DETAILED INFORMATION REGARD ING ENTRY OPERATORS / ACCOMMODATION PROVIDE WERE PROVIDED TO THE AO. 5.7 THERE ARE PLETHORA OF JUDGMENTS OF VARIOUS JUDI CIAL AUTHORITIES, INCLUDING HON'BLE APEX COURT AND ALSO THE JURISDICTIONAL HIGH COURT WHEREIN IT HAS BEEN HELD THAT IN CASE OF MONEY RECEIVED TOWARDS SHARE C APITAL, ONLY THE IDENTITY OF THE SHAREHOLDERS NEEDS TO BE PROVED. ONCE IDENTITY OF THE SHAREHOLDERS IS ESTABLISHED AND IT IS PROVED THAT THE MONEY DID IN FACT COME FROM THEM, IT IS NOT FOR THE ASSESSEE TO PROVE AS TO HOW THE SHAREHOLDER S CAME TO BE IN POSSESSION OF THE MONEY. 5.8 IN A JUDGMENT DATED 30/01/2009 HON'BLE DELHI HI GH COURT IN THE CASE OF CIT VS. GANGOUR INVESTMENT LTD. (INCOME TAX ACT NO. 34/2007) HAS HELD THAT REVENUE CAN MAKE ADDITION UNDER SECTION 68 OF THE A CT ONLY IF THE ASSESSEE IS ITA NO.4707/DEL/2012 9 UNABLE TO EXPLAIN THE CREDITS APPEARING IN ITS BOOK S OF ACCOUNTS. IN THE SAID CASE THE APPELLANT HAS DULY EXPLAINED THE SAID CREDIT EN TRIES IN THE FORM OF VARIOUS DOCUMENTARY EVIDENCES. THE SAID DOCUMENTARY EVIDENC E CONTAINED DETAILS, WHICH SET OUT NOT ONLY THE IDENTITY OF THE SUBSCRIB ERS, BUT ALSO GAVE INFORMATION, WITH RESPECT TO THEIR ADDRESS, AS WELL AS, PAN, ASS ESSMENT PARTICULARS ETC. BASED ON THESE FACTS, THE HON'BLE DELHI COURT DISMISSED T HE APPEAL OF REVENUE. 5.9 IN YET ANOTHER DECISION AS TO THE CORRECTNESS OF TREATING SHARE APPLICATION MONEY ON PAR WITH CASH CREDIT, THE HON'BLE DELHI HI GH COURT IN CIT VS. VALUE CAPITAL SERVICES P. LTD. (2008) 307 ITR 334 (DELHI) FOUND AFTER REFERRING TO THE TWO OF THE DECISIONS OF THE DELHI HIGH COURT ON THE SUBJECT THAT IN RESPECT OF SHARE CAPITAL AMOUNTS, THEY CANNOT BE ASSESSED IN T HE HANDS OF THE COMPANY, UNLESS THE DEPARTMENT IS ABLE TO SHOW THAT THE AMOU NT RECEIVED TOWARDS SHARE CAPITAL ACTUALLY EMANATED FROM THE COFFERS OF THE A SSESSEE COMPANY. 5.10 FROM THE FACTS OF THE APPELLANT'S CASE, I FIND THAT THE APPELLANT HAS DISCHARGED ITS ONUS BY GIVING THE COMPLETE DETAILS VIZ ADDRESS COPY OF ITR, BANK STATEMENT, BALANCE SHEET ETC. EVEN, WHEN THE APPELL ANT EXPRESSED HIS INABILITY TO PRODUCE THE PRINCIPAL OFFICERS/DIRECTORS, HE REQUES TED THE AO TO ISSUE SUMMONS TO THEM. FURTHER IT IS SEEN THAT WHEN SUMMONS HAVE BEEN ISSU ED TO THE 6 CORPORATE ENTITIES, THESE SUMMONS HAVE NOT ONLY BEEN ACCEPTED BUT THE SHAREHOLDERS HAVE DULY RESPONDED TO THESE SUMMONS AND HAVE GIVEN THE DETAILS TO THE AO. IF THE AO WAS NOT SATISFIED WITH DETAILS SO SUBMITTED BY T HE 6 CORPORATE ENTITIES, THE ONUS WAS ON THE AO TO ENSURE ITS COMPLIANCE AND TAK E THE REQUISITE ACTION. I FIND FROM THE FACTS AND EVIDENCES ON RECORD THAT AO HAS ENTIRELY FAILED TO DISCHARGE ITS ONUS ON THESE FRONTS AND TRIES TO SHIFT THE ENT IRE BURDEN UPON THE APPELLANT AND ITA NO.4707/DEL/2012 10 WITHOUT ANY CONCLUSIVE EVIDENCES COMES TO THE CONCL USION THAT THE SHARE CAPITAL INTRODUCED DURING THE YEAR REPRESENTS APPELLANT'S U NDISCLOSED INCOME. 5.11 IT IS PERTINENT TO MENTION HERE THE HON'BLE DE LHI HIGH COURT'S DECISIONS IN THE CASE OF CLT VS. PRADEEP GUPTA 207 CTR 115, WHICH HA S ALSO BEEN RELIED UPON BY THE DELHI ITAT IN THE RECENT JUDGMENT IN THE CASE O F BABITA GUPTA ITA NO. 2897/06, WHEREIN IT IS HELD THAT 'IN THE FACTS OF T HE CASE BEFORE US IT MAY BE SEEN THAT FROM THE VERY BEGINNING LD AO HAD SHIFTED ENTIRE BURDEN UPON THE ASSESSEE AND NO MATERIAL WAS BROUGHT BY HIM TO PROV E HIS ALLEGATION THAT THE IMPUGNED AMOUNT REPRESENTED ASSESSEE COMPANY'S UNDI SCLOSED INCOME. THEREFORE, ON THIS GROUND ALONE THE ENTIRE ADDITION DESERVES TO BE DELETED AND MAY KINDLY BE HELD SO. 5.12 THE ABOVE VIEW OF MINE ALSO GETS SUPPORT FROM THE DECISION OF HON'BLE HIGH COURT OF DELHI AT NEW DELHI IN THE CASE OF CIT VS. OASIS HOSPITALITIES PVT. LTD [333 ITR 119]. THE HON'BLE COURT HELD AS UNDER:- THE INITIAL BURDEN IS UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF SHARE APPLICATION MONEY RECEIVED BY IT, I N ORDER TO DISCHARGE THIS BURDEN, THE ASSESSEE IS REQUIRED TO PROVE (I) THE IDENTITY OF SHAREHOLDER; (II) THE GENUINENESS OF SHAREHOLDER ; AND (III) THE CREDITWORTHINESS OF SHAREHOLDER. IF THE CREDITOR/ S UBSCRIBERS IS A COMPANY, THEN THE DETAILS IN THE FORM OF REGISTERED ADDRESS OR PAN IDENTITY ETC, CAN BE FURNISHED. WHEN THE MONEY IS RECEIVED BY CHEQUE AND IS TRANSMITTED THROUGH BANKING OR OTHER UNDISPUTABLE CHANNELS, THE GENUINENESS OF THE TRANSACTION WILL BE PROVED. OTHER DOCUMENTS SHOWING THE GENUINENESS OF THE TRANSACTIONS COULD BE COPIES OF THE SHAREHOLDER S REGISTER, SHARE APPLICATION FORMS, SHARE TRANSFER REGISTERS ETC. AS FAR AS CREDIT WORTHINESS OR FINANCIAL STRENGTH OF THE CREDITORS/SUBSCRIBER I S CONCERNED, THAT CAN BE ITA NO.4707/DEL/2012 11 PROVED BY PRODUCING THE BANK STATEMENT OF THE CREDI TORS/SUBSCRIBERS, SHOWING THAT IT HAD SUFFICIENT BALANCE IN ITS ACCOU NTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE CAPITAL. ONCE THESE DOCUMENT S ARE PRODUCED, THE ASSESSEE WOULD HAVE SATISFACTORILY DISCHARGE THE ON US CASTE UPON HIM. THEREAFTER, IT IS FOR THE ASSESSING OFFICER TO SCRU TINIZE THE SAME AND IN CASE HE NURTURES ANY DOUBT ABOUT THE VERACITY OF THESE D OCUMENTS, TO PROBE THE MATTER FURTHER. HOWEVER, TO DISCREDIT THE DOCUMENTS PRODUCED BY THE ASSESSEE ON THE ASPECTS, THERE HAD TO BE SOME COGEN T REASONS AND MATERIALS FOR THE ASSESSING OFFICER AND HE CANNOT G O INTO THE REALM OF SUSPICION. 5.13 IN VIEW OF THE FACTUAL POSITION AS WELL AS THE JUDICIAL PRONOUNCEMENT ON THE SUBJECT, DISCUSSED ABOVE, I AM OF THE CONSIDERED VI EW THAT THE APPELLANT HAS DISCHARGED THE ONUS OF ESTABLISHING THE BONA-FIDES OF THE TRANSACTIONS AND THE AO WAS NOT JUSTIFIED IN IGNORING VARIOUS EVIDENCES PROVIDED TO HIM BY THE APPELLANT. NOTHING ADVERSE HAS BEEN BROUGHT ON RECO RD BY THE AO TO ESTABLISH THAT THE AMOUNT OF SHARE CAPITAL MONEY OF RS. 1,30, 00,000 RECEIVED BY THE APPELLANT FROM THE SAID PARTIES REPRESENTS ITS OWN UNDISCLOSED INCOME. IF THERE WAS DOUBT ABOUT THE SOURCE OF INVESTMENT O F THE SAID 6 CORPORATE ENTITIES, THEN ADDITIONS SHOULD HAVE BEEN MADE IN T HE CASE OF INVESTOR COMPANY AND NOT IN THE HANDS OF THE APPELLANT COMPANY. 5.14 THE DECISIONS RELIED UPON BY THE AO HAVE NO BE ARING ON THE CASE OF THE APPELLANT. IT MAY NOT BE OUT OF PLACE TO MENTION HE RE THAT MOST OF THE DECISIONS RELIED UPON BY THE AO ARE ALREADY REFERRED TO/DISCU SSED IN THE DECISIONS PRONOUNCED SUBSEQUENTLY IN FAVOR OF THE APPELLANT H ON'BLE DELHI HIGH COURT, WHILE DECIDING THE CASES OF DIVINE LEASING & FINANC E LTD., GENERAL EXPORTS & CREDITS LTD. AND LOVELY EXPORTS PVT. LTD. (299 ITR 268), HAD TAKEN CARE OF THE ITA NO.4707/DEL/2012 12 EARLIER DECISIONS IN THE CASES OF STELLAR INVESTMEN T LTD. (251 ITR 263-SC}, SUMATI DAYAL (214 ITR 801-SC}, SOPHIA FINANCE LTD (205 ITR 98-DEL), KORLEY TRADING CO. LTD. (232 ITR 820-CAL), SHANKAR INDUSTRIES (114 ITR 689-CAL), PRECISION FINANCE P. LTD. (208 ITR 465- CAL), UNITED COMMERCI AL AND INDUSTRIAL COMPANY PVT. LTD. (187 ITR S96-CAL). IT MAY BE WORTH POINTI NG OUT HERE THAT THE HON'BLE SUPREME COURT OF INDIA HAS DISMISSED THE REVENUE'S SLP AGAINST THE SAID ORDER OF HON'BLE DELHI HIGH COURT IN LOVELY EXPORTS LTD. OTH ER DECISIONS RELIED UPON BY THE AO ARE NOT RELEVANT TO THE CASE OF THE APPELLAN T. 5.15 RELIANCE IN THIS REGARD IS ALSO PLACED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. PONDY METAL AND ROLLIN G MILL PVT LTD (DELHI) (ITA NO. 788/2006) DATED 19.02.2007, WHEREIN THE HON'BLE COU RT CONCURRED WITH THE FINDINGS OF THE APPELLATE TRIBUNAL, DELHI BENCH 'F' THAT ONCE THE IDENTITY OF THE INVESTOR HAS BEEN MANIFEST AND IS PROVED, THE INVES TMENT CANNOT BE SAID TO BE THE UNDISCLOSED INCOME OF THE ASSESSEE. AT BEST, TH E AMOUNT COULD BE ADDED IN THE HANDS OF THE INVESTOR BUT IT CERTAINLY COULD NO T BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. THE APPEAL FILED AGAINST TH E SAID DECISION, WAS DISMISSED BY THE HON'BLE SUPREME COURT IN CC 12860/ 2007 DATED 08/01/2008. 5.16 IN THE LIGHT OF THE ABOVE DISCUSSI ON, I AM INCLINED TO AGREE WITH THE ARGUMENTS AND EVIDENCES PROVIDED BY THE AP PELLANT TO SUBSTANTIATE THAT THE TRANSACTION REGARDING SHARE CAPITAL RECEIVED BY IT WAS A GENUINE TRANSACTIONS AND THE SAME WAS NOT AN ACCOMMODATION ENTRY. I ALSO DO NOT FIND ANY EVIDENCE COLLECTED BY THE AO WHICH COULD PROVE OTHERWISE. ACCORDINGLY, THE AO IS NOT JUSTIFIED IN TREATING THE AMOUNT OF S HARE CAPITAL MONEY RECEIVED BY THE APPELLANT AS ITS UNDISCLOSED INCOME. IN VIEW OF OUR AFORESAID DISCUSSION, I DELETE THE A DDITION OF RS. 1,30,00,000 MADE BY THE AO UNDER SECTION 68 OF THE INCOME TAX A CT, 1961. ITA NO.4707/DEL/2012 13 7.2 WE NOTE THAT DURING THE HEARING, LD. DR FILED A COPY OF JUDGMENT DATED 27.1.2014 IN THE CASE OF CIT VS. EMPIR BUILDTECH PV T. LTD. OF THE HONBLE HIGH COURT OF DELHI WHERIEN THE APPEAL OF THE REVENUE WA S PARTLY ALLOWED AND STATED THAT THE ISSUE OF DELETION IN DISPUTE IN THE PRES ENT CASE U/S. 68 OF THE I.T. ACT IS SQUARELY COVERED BY THE AFORESAID JUDGMENT OF THE H IGH COURT DATED 27.1.2014, HENCE, HE REQUESTED THAT THE ACTION OF DELETION IN DISPUTE BY THE LD. CIT(A) MAY BE CANCELLED AND ADDITION MADE BY THE AO MAY BE RE STORED. 7.3 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE H AS STATED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED THE CONFIRMATIONS WITH SUPPORTING DOCUMENTS IN RESPECT OF ALL THE SIX COMPANIES. VIDE LETTER DT.22.11.2011 (PAGE 11), THE ASSESSEE HAD STATED TO THE ID. A.O. THAT (I) ALL THE SIX COMPANIES WHO HAD SUBSCRIBED IT'S SHARE CAPITAL DUR ING THE YEAR ARE VERY MUCH AVAILABLE ON THE PRESENT ADDRESSES, AS GIVEN IN THE IR CONFIRMATIONS AND ARE REGULARLY ASSESSED TO INCOME TAX; (II) AO SHOULD MA KE INVESTIGATIONS EITHER BY CORRESPONDENCE OR MAY SUMMON THE DIRECTORS OF SUCH COMPANIES AT YOUR OWN LEVEL; AND (III) ASSESSEE BY SUBMITTING ALL THE DOC UMENTS RELATING TO SHARE CAPITAL SUBSCRIBED BY ALL THE SIX COMPANIES, IT HAS DISCHAR GED ITS ONUS. THE A.O. HAD MADE DIRECT INQUIRIES FROM THESE SIX COMPANIES. THE SUMMONS ISSUED TO ALL THESE SIX COMPANIES WERE SERVED UPON THEM (NO SUMMON WAS RETURNED UNSERVED). AFTER RECEIVING THE LETTERS FROM THE A.O, ALL THESE SIX COMPANIES HAD DIRECTLY FURNISHED THEIR DOCUMENTS TO THE A.O. HE FURTHER STATED THAT THE A.O. HAD SAT BACK WITH FOLDED HANDS ON SUCH INFORMATION/DOCUMENTARY EVIDEN CES AND THEREAFTER HAD MADE ADDITIONS IN THE HANDS OF THE COMPANY. TO SUP PORT HIS CONTENTION, HE FILED A COPY OF JUDGMENT DATED 21.1.2013 OF THE HONBLE D ELHI HIGH COURT IN THE CASE OF CIT VS. GANGESHWARI METAL PVT. LTD. WHERIEN THE HONBLE HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND STA TED THAT THE PRESENT ISSUE IS SQUARELY COVERED BY THE JUDGMENT DATED 21.1.2013. HE FURTHER FILED A COPY OF ITA NO.4707/DEL/2012 14 THE DECISION OF THE ITAT, C BENCH, NEW DELHI IN T HE CASE OF ITO VS. GRG STEELS P LTD. & C.O. NO. 475/DEL/2012 IN THE CASE OF GRG S TEELS P LTD. VS. ITO WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUE IN DISPU TE IN FAVOUR OF THE ASSESSEE BY RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON BLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. GANGESHWARI METAL PVT. LTD. (SUPRA ). 7.4 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENT IN THE CASE OF CIT VS. GANGESHWARI ME TAL PVT. LTD. (SUPRA), WE ARE OF THE OF THE CONSIDERED VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A), BECAUSE TH E LD. CIT(A) HAS DECIDED THE ISSUE IN DISPUTE IN FAVOUR OF THE ASSESSEE AFTE R APPRECIATING THE EVIDENCE FILED BY THE ASSESSEE AS WELL AS VARIOUS DECISIONS RENDER ED BY THE HONBLE SUPREME COURT AS WELL AS HONBLE HIGH COURT AND THE DECISI ONS OF THE ITAT BENCHES. WE ARE OF THE VIEW THAT THE SHARE APPLICATION MONEY RE CEIVED IN THE HANDS OF THE ASSESSEE COMPANY IS PROPERLY EXPLAINED BY THE ASSES SEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS BEFORE THE LD. C IT(A) AND EVEN BEFORE US. THEREFORE, WE FIND NO INFIRMITY IN THE IMPUGNED OR DER PASSED BY THE LD. CIT(A), HENCE, WE UPHOLD THE SAME BY REJECTING THE GROUND NO. 3 RAISED BY THE REVENUE. 8. WITH REGARD TO ISSUE RAISED IN GROUND NO. 4 RELA TING TO DELETION OF ADDITION OF RS. 95,00,000/- MADE U/S. 68 OF THE ACT IN RESP ECT OF UNEXPLAINED CREDITS INTRODUCED IN THE GARB OF UNSECURED LOANS SHOWN TO HAVE BEEN RECEIVED FROM THREE CORPORATE ENTITIES IS CONCERNED, WE FIND THA T LD. CIT(A) HAS ELABORATELY DISCUSSED/GIVEN THE FINDINGS ON THE ISSUE IN DISPU TE VIDE PARA NO. 7 TO 7.7 FROM PAGES 27 TO 30 OF THE IMPUGNED ORDER. FOR THE SAK E OF CONVENIENCE, WE ARE REPRODUCING THE FINDINGS OF THE LD. CIT(A) AS UNDER :- ITA NO.4707/DEL/2012 15 7. I HAVE GONE THROUGH THE ABOVE SUBMISSION OF THE APPELLANT AND HAVE CONSIDERED THE FACTS AND EVIDENCES AVAILABLE ON REC ORD AND HAVE PERUSED THE AO'S ORDER AND THE CASE LAWS RELIED UPON BY THE APP ELLANT. 7.1 AS DISCUSSED EARLIER IN THIS ORDER, THE PRIMAR Y ONUS IS ALWAYS ON THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINE NESS OF THE TRANSACTION THE PERSONS, FROM WHOM THE ASSESSEE OBTAINS THE CASH CR EDIT. ONLY WHEN THE ASSESSEE FAILS ON HIS PART TO SATISFY ANY OF THESE 3 PARAMETERS (NAMELY IDENTITY, CREDITWORTHINESS AND GENUINENESS), ONLY THEN THE AO HAS THE RIGHT TO ADD SUCH CASH CREDIT TO THE ASSESSEE'S INCOME UNDER SECTION 68 OF THE ACT. 7.2 IN THE FACTS OF THE CASE IN HAND, I FIND THAT I N RESPECT OF MR. MANOJ KUMAR FROM WHOM THE APPELLANT RECEIVED RS. 5,01,000 AS CA SH CREDIT ON 03.02.2009, NO DETAILS WHATSOEVER WERE MADE AVAILABLE TO THE AO , NO CONFIRMATION, NO PAN NUMBER, NO DETAILS ETC WERE MADE AVAILABLE WITH THE AO, FROM WHICH ONE COULD ASCERTAIN THE IDENTITY AND CREDITWORTHINESS OF MR. MANOJ KUMAR. THE ONLY DETAILS FILED WITH THE AO WAS THE BANK STA TEMENT OF APPELLANT'S OWN BANK ACCOUNT FOR FINANCIAL YEAR 2009-10, WHICH SHOWS THAT MONEY WAS ALLEGEDLY BEEN RETURNED BACK. HENCE IN VIEW OF THESE FACTS, I AGREE WITH AO, THAT THE APPELLANT HAS NOT DISCHARGED ITS ONUS AND HAS FAILED TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF MR. MANOJ KUMAR, ACCORDINGLY THE ADDITIONS MADE UNDER SECTION 68 IS UPHELD. 7.3 HOWEVER WITH REGARD TO THE 3 CORPORATE ENTITIE S NAMELY ANG AUTOMOTIVE COMPONENTS (P) LTD (RS. 45,00,000), TARA ESTATES (P ) LTD. (RS. 15,00,000), AND SYNFONIA PHARMACEUTICALS (P) LTD. (RS. 35,00,000), I FIND THAT THE APPELLANT FILED THE COPY OF CERTIFICATE OF INCORPORATIONS, DETAILS FROM THE WEBSITE OF MINISTRY OF ITA NO.4707/DEL/2012 16 CORPORATE AFFAIRS, COPY OF INCOME-TAX RETURN, COPY OF BALANCE SHEET, COPY OF CONFIRMATION IN RESPECT OF THESE 3 ENTITIES. APART FROM ABOVE, THE APPELLANT ALSO FILED THE COPY OF ITS OWN BANK STATEMENT FOR ASSESS MENT YEAR 2010-11, EVIDENCING THAT THE LOAN WERE RE-PAID BANK TO THE ABOVE MENTIO NED 3 ENTITIES AND FILE THE COPY OF BANK STATEMENT ONLY IN RESPECT OF TARA ESTA TES (P) LTD. AND NOT THE BANK STATEMENT OF OTHER 2 CORPORATE ENTITIES. 7.4 THE AO ALSO ASKED THE APPELLANT TO PRODUCE THE DIRECTOR/PRINCIPAL OFFICER OF THESE 3 CORPORATE ENTITIES FROM WHOM CASH CREDIT CA ME. THE APPELLANT COULDN'T PRODUCE THESE PARTIES ON THE GROUND THAT SINCE THEI R ACCOUNTS HAVE BEEN SQUARED UP THEREFORE THEY ARE NOT BEEN ABLE TO PERSUADE THE M TO APPEAR BEFORE THE AO, INSTEAD THE APPELLANT PROVIDED THE ADDRESSES OF THE SE ENTITIES AND REQUESTED THE AO TO ISSUE THE SUMMONS TO THEM. 7.5 IN MY CONSIDERED VIEW THE APPELLANT BY FILING THE COPY OF CONFIRMATION, COPY OF INCOME TAX RETURN, AND BY PROVIDING THE LATEST A DDRESSES TO THE AO HAS DISCHARGED THE INITIAL ONUS CAST UPON HIM TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF ITS CREDITOR. THEREFORE IT WAS THE TASK OF THE AO TO MAKE THE ENQUIRIES BY ISSUING SUMMONS OR DEPUTING INSPECTOR ETC. OR OTHER AND EXTERNAL OR INTERNAL SOURCES ETC. BEFORE COMING TO THE CONCLUSI ON THAT THE 3 CORPORATE ENTITIES 'NERE SHAM AND BOGUS, WHICH I AM AFRAID AO HAS NOT DONE. IT IS NOT THE CASE OF THE AO THAT PAYMENTS HAVE NOT BEEN RECEIVED THROUGH ACCOUNT PAYEE'S CHEQUE, THEREFORE WHEN AO WAS HAVING THE FULL ADDRESS AND A PPELLANT WAS NOT HAVING ANY CONTROL OVER THE SQUARED UP CREDITORS, THE ONUS WAS ON THE AO TO CALL FOR THE RESPECTIVE DETAILS FROM THEM, IF THERE WAS ANY DOUB T ABOUT THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS. THOUGH THE BANK STATEMENT OF OTHER 2 PARTIES WERE FILED DURING THE APPELLATE PROCEEDING BUT AS D ISCUSSED THE AO'S CASE IS NOT ITA NO.4707/DEL/2012 17 THAT PAYMENT IS RECEIVED IN CASH, BUT HIS CASE IS T HAT THE 3 CORPORATE ENTITIES WHO HAVE GIVEN AMONG AS CASH CREDITOR ARE SHAM AND BOGU S. 7.6 FROM THE INCOME TAX DETAILS AS WELL AS BALANCE SHEET AND OTHER EVIDENCE OF THESE 3 CORPORATE ENTITIES, I FIND THAT ALL THE CORPORATE ENTITIES ARE ASSESSED TO TAX IN DELHI, THEIR PAN NUMBER AND INCOME TAX RETUR N ARE AVAILABLE ON RECORD. FURTHER THE BALANCE SHEET OF 2 ENTITIES SHOW THAT T HEY HAD SUFFICIENT ASSETS AS WILL BE EVIDENT FROM BELOW, PROVES THAT THEY HAD THE CAP ACITY TO PAY THE AMOUNT TO THE APPELLANT: S. PARTICULARS ASSETS IN BALANCE AMOUNT NO. SHEET ADVANCED TO APPELLANT 1. ANG AUTOMOTIVE COMPONENTS {P} LTD RS.10,90,50,3 60 RS.45,OO,OOO 2. SYNFONIA PHARMACEUTICALS {P} LTD. RS. 3,91,62, 233 RS.35,OO,OOO 7.7 FROM ABOVE DISCUSSION IN MY CONSIDERED VIEW, WH EN THE APPELLANT HAD PROVIDED THE AO WITH THE LATEST ADDRESS OF THE SQUA RED UP CASH CREDITOR (AS THE APPELLANT HAD NO SUCH CONTROL ON THEM THEREFORE THE Y WERE UNABLE TO PRODUCE BEFORE THE AO AND NO FURTHER ENQUIRIES HAVE BEEN DO NE OF ANY KIND BY THE AO) I FIND THAT EVEN THE BASIC STEP I.E. SUMMONS OR QUERY LETTER WERE NOT ISSUED, TO THESE CASH CREDITOR AND NOT AN IOTA OF EVIDENCE HAS BEEN COLLECTED AND BROUGHT ON RECORD WHICH INDICATES OR PROVE THAT THE CASH CR EDIT MONEY WAS APPELLANT'S OWN MONEY, IN SUCH AN EVENT, I HOLD THAT AO IS NOT CORRECT IN HOLDING THE RS. 95,00,000 RECEIVED FROM 3 CORPORATE ENTITIES MENTIO NED ABOVE ARE BOGUS, SHAM AND THEY ARE ENGAGED IN PROVIDING ACCOMMODATIO N ENTRY. ACCORDINGLY, THE ADDITION OF RS. 95,00,000 MADE UNDER SECTION 68 , DESERVES TO BE DELETED. ITA NO.4707/DEL/2012 18 IN COMING TO THE ABOVE CONCLUSION, I CARRY THE SUPP ORT FROM THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS . REAL TIME MARKETING {P} LTD. {306 ITR 35} {DELHI}. 8.1 ON THIS ISSUE , LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 8.2 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT THE SAME MAY BE UPHELD. IN SUPPORT OF HIS CONTENTION, HE SUBMITTED BEFORE US THAT DURING THE COURSE OF A SSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED THE CONFIRMATIONS WITH SUPPO RTING DOCUMENTS IN RESPECT OF THE THREE COMPANIES. HE FURTHER SUBMITTED THAT THE ASSESSEE VIDE LETTER DATED 5.12.2011 & 21.12.2011 REQUESTED THE AO TO MAKE DIRECT INQUIRIE S FROM THESE THREE COMPANIES AT HIS END BY ISSUING SUMMONS U/S. 131 TO THEM, WHILE INFORMING HIM THAT IT HAD ALREADY REPAID SUCH LOANS TO THESE THREE COMPANIES. HE STATED THAT THE AO HAD NEITHER ISSUED SUMMONS TO THESE THR EE COMPANIES, NOR CARRIED OUT ANY INQUIRIES FROM THESE THREE COMPANIES. THE REAFTER, THE AO HAD MADE THE ADDITION IN THE HANDS OF THE ASSESSEE. 8.3 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE WEL L REASONED ORDER PASSED BY THE LD. CIT(A), BECAUSE THE LD. CIT(A) HAS RIGHTLY HELD THAT WHEN THE ASSESSEE HAD PROVIDED THE AO WITH THE LATEST ADDRESS OF THE SQUA RED UP CASH CREDITOR (AS THE ASSESSEE HAD NO SUCH CONTROL ON THEM THEREFORE THEY WERE UNABLE TO PRODUCE BEFORE THE AO AND NO FURTHER ENQUIRIES HAVE BEEN DO NE OF ANY KIND BY THE AO) LD. CIT(A) FOUND THAT EVEN THE BASIC STEP I.E. SUMM ONS OR QUERY LETTER WERE NOT ISSUED, TO THESE CASH CREDITOR AND NOT AN IOTA OF E VIDENCE HAS BEEN COLLECTED AND BROUGHT ON RECORD WHICH INDICATES OR PROVE THAT THE CASH CREDIT MONEY WAS ASSESSEE'S OWN MONEY, IN SUCH AN EVENT, HE RIGHTLY HELD THAT AO IS NOT CORRECT IN ITA NO.4707/DEL/2012 19 HOLDING THE RS. 95,00,000 RECEIVED FROM 3 CORPORATE ENTITIES MENTIONED ABOVE ARE BOGUS, SHAM AND THEY ARE ENGAGED IN PROVIDING A CCOMMODATION ENTRY. THEREFORE, WE FIND NO INFIRMITY IN THE IMPUGNED OR DER PASSED BY THE LD. CIT(A), HENCE, WE UPHOLD THE SAME BY REJECTING THE GROUND NO. 4 RAISED BY THE REVENUE. 9. WITH REGARD TO ISSUE RAISED IN GROUND NO. 5 RELA TING TO DELETION OF ADDITION OF RS. 15,00,000/- MADE U/S. 68 OF THE ACT IN RESPE CT OF UNEXPLAINED EARNEST MONEY SHOWN TO HAVE BEEN RECEIVED FROM TWO PARTIES , BY ACCEPTING THE ADDITIONAL EVIDENCE WITHOUT PROVIDING ANY OPPORTUNI TY TO THE AO IS CONCERNED, WE FIND THAT LD. CIT(A) HAS ELABORATELY DISCUSSED/ GIVEN THE FINDINGS ON THE ISSUE IN DISPUTE VIDE PARA NO. 9 AT PAGE 32 OF THE IMPUGN ED ORDER. FOR THE SAKE OF CONVENIENCE, WE ARE REPRODUCING THE FINDINGS OF THE LD. CIT(A) AS UNDER:- 9. I HAVE GONE THROUGH THE ASSESSMENT ORDER, THE D OCUMENTS FILED BY THE APPELLANT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS AND ALSO THE SUBMISSIONS MADE BY THE AP PELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS. IN MY O PINION, THE AO WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 15,00,000 ON ACCOUNT OF EARNEST MONEY, PARTICULARLY WHEN THE PROPERTY WHICH WAS REFLECTED AS PART OF THE INVENTORY AS ON 31.03.2009 AND THE SAME IS SOLD IN THE SUBSEQUENT Y EAR FOR RS. 35,00,000 AND PROFIT ON THE SAME HAS DULY BEEN REFLECTED IN AND PROFIT AND LOSS ACCOUNT FOR ASSESS MENT YEAR 2010-11. HENCE THE ADDITION OF RS. 15,00,000 MADE O N ACCOUNT OF EARNEST MONEY IS DELETED. 9.1 ON THIS ISSUE , LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. ITA NO.4707/DEL/2012 20 9.2 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT THE SAME MAY BE UPHELD. IN SUPPORT OF HIS CONTENTION, HE SUBMITTED THAT THE ASSESSEE HAD RECEIVED AN EAR NEST MONEY OF RS. 15,00,000/- FROM MS. NEELAM CHUGH AGAINST PROPERTY NO. B-90, RAMPRASTHA, GHAZIABAD THROUGH CHEQUES IN THE YEAR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED THE CONFIRM ATION FROM MS. NEELAM CHUGH IN R/O SUCH EARNEST MONEY OF RS. 15,00,000/-, WHILE INFORMING THE AO THAT IT HAD SOLD THE SAID PROPERTY TO MS. NEELAM CH UGH IN THE NEXT YEAR AGAINST TOTAL SALE OF RS. 35,00,000/-. THE AO HAD MADE ADD ITION OF RS. 15,00,000/- IN THE HANDS OF THE ASSESSEE. ON THE SPECIFIC DIREC TION OF THE LD. CIT(A), THE ASSESSEE HAD FURNISHED THE DETAILS OF SALE / PURCHA SE MADE IN FY 2009-10 AND ALSO THE P&L A/C FOR THE FY 2009-10. AFTER VERIFIC ATION, THE LD. CIT(A) HAD DELETED THE ADDITION. 9.3 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE WEL L REASONED ORDER PASSED BY THE LD. CIT(A), BECAUSE THE LD. CIT(A) HAS RIGHTLY HELD THAT AO WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 15,00,000 ON ACCOUNT OF EARN EST MONEY, PARTICULARLY WHEN THE PROPERTY WHICH WAS REFLECTED AS PART OF TH E INVENTORY AS ON 31.03.2009 AND THE SAME IS SOLD IN THE SUBSEQUENT Y EAR FOR RS. 35,00,000 AND PROFIT ON THE SAME HAS DULY BEEN REFLECTED IN AND P ROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR 2010-11. HENCE THE ADDITION OF RS. 15,00,000 MADE ON ACCOUNT OF EARNEST MONEY WAS RIGHTLY DELETED. THE REFORE, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER PASSED BY THE LD. CIT(A), HENCE, WE UPHOLD THE SAME BY REJECTING THE GROUND NO. 5 RAISED BY THE REVENUE. 10. WITH REGARD TO ISSUE RAISED IN GROUND NO. 6 REL ATING TO DELETION OF ADDITION OF RS. 9,50,000/- MADE U/S. 68 IN RESPECT OF UNEXP LAINED CASH DEPOSIT IN BANK ITA NO.4707/DEL/2012 21 ACCOUNT BY ACCEPTING THE ADDITIONAL EVIDENCE WITHOU T PROVIDING ANY OPPORTUNITY TO THE AO. ON THIS ISSUE , LD. DR RELIED UPON THE O RDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 10.1 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT THE SAME MAY BE UPHELD. IN SUPPORT OF HIS CONTENTION, HE SUBMITTED THAT DURING THE YEAR ASSESSEE HAD SOL D ONE OF ITS PROPERTY (FORMING PART OF ITS STOCK IN TRADE) FOR RS. 9,50,000/- AND DEPOSITED SUCH SALE PROCEEDS IN ITS BANK ACCOUNT. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE ASSESSEE HAD EXPLAINED THIS FACT TO THE AO. THE AO HAD MAD E ADDITION OF RS. 9,50,000/- IN THE HANDS OF THE ASSESSEE. ON THE SPE CIFIC DIRECTION OF THE LD. CIT(A), THE ASSESSEE HAD FURNISHED THE PROPERTY WIS E DETAILS OF SALES MADE IN THE YEAR AND CLOSING STOCK AS ON 31.3.2008, 31.3.2009 A ND 31.3.2010. AFTER VERIFICATION THE LD. CIT(A) HAD DELETED THE ADDITIO N OF RS. 9,50,000/-. 10.2 IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A), BECAUSE THE LD. CIT(A) HAS RIGHTLY OBSERVED THAT DURING THE YEAR TH E ASSESSEE SOLD 2 OF PROPERTIES, NAMELY PROPERTY NO. 11, N.K. II INDIRAP URAM (RS. 75,00,000) AND PROPERTY NO. 392, SHAKTI KHAND-III, INDIRAPURAM (RS .9,50,000). WE FIND THAT BOTH THE PROPERTY SALE ARE DULY BEEN REFLECTED IN A SSESSMENT YEAR 2009-10. THE ASSESSEE HAD RECEIVED THE SALE CONSIDERATION OF RS. 9,50,000 IN CASH AND THE SAME WAS SHOWN AS A SOURCE OF CASH BEING DEPOSITED IN THE BANK ACCOUNT. THE AO HAD ACCEPTED THE SALES OF RS. 84,50,000 DECLARED BY THE ASSESSEE, IN THESE CIRCUMSTANCES THE ACTION OF THE LD. CIT(A) IN DELE TING THE ADDITION OF RS. 9,50,000 ON ACCOUNT OF CASH DEPOSITED IN THE BANK A CCOUNT WAS A RIGHTFUL ONE. THEREFORE, WE FIND NO INFIRMITY IN THE IMPUGNED OR DER PASSED BY THE LD. CIT(A), ITA NO.4707/DEL/2012 22 HENCE, WE UPHOLD THE SAME BY REJECTING THE GROUND NO. 6 RAISED BY THE REVENUE. 11. WITH REGARD TO ISSUE RAISED IN GROUND NO. 7 RE LATING TO DELETION OF ADDITION OF RS. 1,96,920/- MADE U/S. 50C(1) OF THE ACT IS CO NCERNED, WE FIND THAT THE IT IS AN ESTABLISHED FACT THAT THE ASSESSEE IS ENGAGE D IN THE REAL ESTATE BUSINESS, THEREFORE, THE IMMOVABLE PROPERTIES ARE APPEARING I N ASSESSEES BOOKS OF ACCOUNT AS STOCK-IN-TRADE. FURTHER FROM THE PERUSAL OF CIRCULAR NO. 8 OF 2002 WHICH RELATES TO THE PROVISIONS OF SECTION 50C, IT WAS SEEN THAT THE PROVISIONS OF SECTION 50C ARE ONLY APPLICABLE TO THOSE ASSETS WHI CH ARE CAPITAL ASSETS AND ON WHICH CAPITAL GAIN IS TO BE COMPUTED. IN VIEW OF ABOVE, IN OUR CONSIDERED OPINION, LD. CIT(A) HAS RIGHTLY HELD THAT SINCE THE IMMOVABLE PROPERTIES ARE TREATED AS STOCK-IN-TRADE ACCORDINGLY, THE PROVISIO NS OF SECTION 50C(1) ARE NOT APPLICABLE, AND THE ADDITION MADE BY THE AO WAS RIG HTLY DELETED BY THE LD. CIT(A). THEREFORE, WE FIND NO INFIRMITY IN THE IMP UGNED ORDER PASSED BY THE LD. CIT(A), HENCE, WE UPHOLD THE SAME BY REJECTING THE GROUND NO. 7 RAISED BY THE REVENUE. 12. OTHER GROUNDS ARE GENERAL IN NATURE, HENCE THE SAME ARE NOT BEING ADJUDICATED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/12/2015. SD/- SD/- [ [[ [O.P. KANT O.P. KANT O.P. KANT O.P. KANT] ]] ] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 18/12/2015 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR ITA NO.4707/DEL/2012 23 COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO.4707/DEL/2012 24