DCIT, New Delhi V. M/s. Sanco Plastics Pvt. Ltd., New Delhi

ITA 4921/DEL/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7027 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 31-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MOHANTY
• Assessee Lawyers: D P BANSAL
• Keywords: Principle of natural justice
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER I.T.A. NO.4921/DEL/2009 ASSESSMENT YEAR : 2006-07 DCIT, M/S SANCO PLASTIC CO. LTD., CIRCLE-7 (1), 9/51, BAZAR GALI VISHWAS NAGAR, NEW DELHI. V. DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAACS AAACS AAACS AAACS- -- -1021 1021 1021 1021- -- -N NN N DEPARTMENT BY : SMT. S. MOHANTY, SR. DR. RESPONDENT BY : SHRI D.P. BANSAL, C.A. ORDER PER B.K. HALDAR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE OR DER OF LD CIT(A) X, NEW DELHI DATED 26.12.2008 FOR ASSESSMENT YEAR 2006 -07. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEALS:- 1. LD CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUM STANCES OF THE CASE IN DELETING THE ADDITION OF `.41 LAKHS MADE BY T HE ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT, 1961. 2. THE APPELLANT CRAVES TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING THE H EARING OF THE APPEAL. ITA NO.4921/DEL/09 2 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF PVC COMPOUND, PIPES & CABLES WHICH ARE USED FOR ELECTRICAL FITTINGS. DURING THE ASSESSMENT PROC EEDINGS, IT WAS NOTED BY THE ASSESSING OFFICER THAT AN AMOUNT OF `.50 L AKHS WAS RECEIVED BY THE ASSESSEE TOWARDS AUTHORIZED SHARE CAPITA L MONEY. WHEN ASKED TO FURNISH DETAILS REGARDING THE SAME, THE A SSESSEE FURNISHED CONFIRMATIONS OF SHARE HOLDERS ALONG WITH COP IES OF THEIR INCOME TAX RETURNS AND BALANCE SHEET FOR THE RELEVANT ASSESSMENT YEAR. AS THE DETAILS FURNISHED BY THE ASSESSEE WERE INCOM PLETE, THE ASSESSING OFFICER SOUGHT FURTHER INFORMATION FROM THE SHA RE APPLICANTS U/S 133(6) OF THE INCOME TAX ACT, 1961. THE REPLIES W ERE NOT RECEIVED WITHIN THE TIME SPECIFIED IN SUCH NOTICES. THE ASSESSEE WA S, THEREFORE, ASKED TO SHOW CAUSE AS TO WHY IN ABSENCE OF REPLY BEING RECEIVED FROM THE SHARE APPLICANTS, THE IMPUGNED TRANSACTIONS SHOULD N OT BE CONSIDERED INGENUINE AND ADDED BACK TO THE TOTAL INC OME OF THE ASSESSEE. THEREAFTER, SOME CONFIRMATIONS WERE RECEIVED BY THE ASSESSING OFFICER. 3. ON THE BASIS OF INFORMATION ON RECORD, THE ASSESSING O FFICER WAS OF THE OPINION THAT SOME OF THE IMPUGNED TRANSACTIO NS WERE IN-GENUINE AND FAKE FOR THE REASONS MENTIONED HEREUNDER:- I) WHILE COMPARING THE CONFIRMATIONS FILED BY THE ASSE SSEE OF SHAREHOLDERS AND CONFIRMATIONS RECEIVED IN RESPONSE OF N OTICE U/S 133(6), IT IS NOTICED THAT THE LETTER HEADS OF THE SE SHAREHOLDERS COMPANIES ARE NOT SAME. THE LETTER HEAD OF MOST OF THE COMPANIES ARE PRINTED IN BLACK INK WHILE THE LAT TER RECEIVED IS IN RED COLOR. ITA NO.4921/DEL/09 3 II) IT IS ALSO NOTICED THAT 5 OUT OF SIX CONFIRMATIONS HAVE BEEN SIGNED BY THE SAME PERSON IN SAME SIGNATURE IN CAPACITY OF THE DIRECTOR. III) IT IS ALSO NOTICED THAT TWO OF THE INVESTOR COMPA NIES HAVING SAME ADDRESSES AS REGISTERED OFFICE. IV) THE LANGUAGE, PATTERN & STYLE OF ALL THE CONFIRM ATIONS FILED ARE SAME AND WITHOUT DATE. V) IN MOST OF THE CONFIRMATIONS, IT IS WRITTEN AS ' AP PLIED FOR THE ALLOTMENT OF (NO) EQUITY SHARES OF RS.100 EACH . . WE WERE ALLOTTED EQUITY SHARES OF RS.10/- EACH. IT IS NOT UNDERSTANDABLE THAT HOW SHARES HAVE BEEN PURCHASED 100 /- EACH AND ALLOTTED OF RS.10/- EACH AND IF IT IS ISSUED O N PREMIUM, ASSESSEE HAS NEVER STATED THIS FACT. VI) DURING A PERUSAL OF THE CONFIRMATIONS RECEIVED F ROM THE SHAREHOLDERS AND THEIR COPIES OF RETURN OF INCOME FILE D, IT IS REVEALED THAT THE CREDITWORTHINESS OF THESE SHAREHOLDER S HAS NOT BEEN PROVEN. THE DETAILS OF THE SAME IS AS UNDER: S.NO. NAME OF SHAREHOLDERS AMOUNT INVESTED IN SHARES RETURNED INCOME 1 AKIK EDUCATION CENTRE (P) LTD 500000 6,452 2 AGROHA SAVINQS LTD 600000 31,310 3 PARSANDI LEASING FINANCE PVT LTD 1000000 13,280 4 PARAS FINCAP PVT LTD 500000 10,140 5 LOKPRIYA TEA COMPANY LTD 1400000 23,960 6 SHRI GIRIRAJ FINCAP PVT LTD 100000 NIL TOTAL 41,00,000 ITA NO.4921/DEL/09 4 VII) DURING THE PERUSAL OF ABOVE MENTIONED DETAILS, I T IS PARTICULARLY SEEN THAT ASSESSEE HAS EITHER NIL OR BELOW T AXABLE INCOME AND HAS BEEN CLAIMED TO INVEST/PURCHASE SHARE FO R HUGE CONSIDERATION. FROM ANY STRETCH OF IMAGINATION, IT IS UNBELIEVABLE THAT SUCH ASSESSES CAN ACTUALLY INVEST IN SUCH HUGE AMOUNT . THIS AGAIN POINTS TO THE LACK OF CREDIT WORTHINESS OF THESE ASSESSEES. VIII) THE COPIES OF BANK ACCOUNTS OF SOME OF THE SHAR EHOLDERS PROVIDED BY THE ASSESSES REVEALS THAT MANY TRANSACTIONS OF DEPOSITING CASH OR CREDITING THE AMOUNT THROUGH CHEQU ES HAS OCCURRED WELL BEFORE THE TRANSACTION DATE AND SOME ON THE DATE OF TRANSACTION ITSELF. IX) TO FURTHER INVESTIGATE UPON THE CREDITWORTHINESS O F THE ALLEGED SHAREHOLDERS, INFORMATION FROM VARIOUS BANKS W AS' SOUGHT U/S 133(6) REGARDING THE CREDIT ENTRIES IN THESE BANK ACCOUNTS FOR APPX. 2 MONTHS JUST BEFORE THE SAID TRANSAC TION DATE AND ALSO THE BANK OPENING FORMS OF THE SAME. IN RESPON SE TO THIS, ONLY 2 BANKS HAVE RESPONDED. FROM THE INFORMATIO N SO RECEIVED, IT IS GATHERED THAT IN TWO CASES NAMELY M/S A KIK EDUCATION CENTRE (P) LTD AND M/S PARAS LEASING & FINAN CE (P) LTD WHOSE ACCOUNTS ARE IN SAME BANK I.E STATE BANK OF INDI A, ROOP NAGAR, NEW DELHI, THERE ARE NO TRANSACTION IN THE MO NTH OF MARCH. AS PER COPIES OF BANK ACCOUNTS OF ABOVE SHAREHOL DERS FURNISHED BY THE ASSESSEE, CHEQUES HAVE BEEN CLEARED ON 15.4.2006 & 28.4.2006. THERE IS A GROSS MISMATCH IN T HE INFORMATION PROVIDED BY THE ASSESSEE AND THE BANK, X) THE INFORMATION REQUIRED U/S 133(6) FROM BANKS HAS NOT BEEN COMPLIED FULLY. IN THIS, IT IS PARTICULARLY NOTE D THAT EVEN ITA NO.4921/DEL/09 5 WHERE BANKS HAVE PARTED WITH INFORMATION, THEY HAVE NOT GIVEN THE NARRATION AND CREDIT ENTRIES IN THE ALLEGED SHARE HOLDERS BANK ACCOUNTS. IN ABSENCE OF SUCH INFORMATION, AN ADVERSE V IEW REGARDING THE WHOLE TRANSACTION IS TAKEN. XI) THE BANK ACCOUNT OPENING FORMS IN THE CASE OF M/S PARAS FINCAP PVT LTD & M/S AKIK EDUCATION CENTRE PVT LTD W HOSE ACCOUNTS ARE IN BANK OF BARODA, MODEL TOWN BRANCH, & SBI, ROOP NAGAR BRANCH SHOWS THAT THE SAME PERSON I.E. SHRI SUBOD H KUMAR KHANDELWAL HAS BEEN AUTHORIZED TO OPERATE THE BANK ON BEHALF OF BOTH THE COMPANY. XII) FROM THE PERUSAL OF BALANCE SHEET OF THE ASSESSEE, IT IS SEEN THAT THE PATTERN OF B/S & PROFIT & LOSS ACCOUNT A RE EXACTLY ON SAME PATTERN IN MOST OF THE SHAREHOLDERS ACCOUNTS SHOW ING THE INCOME AND EXPENDITURE UNDER SAME HEADS. SUCH AS UNDER THE HEAD OF INCOME HAS MOSTLY INCOME FROM INTEREST AND MISCELLANEOUS INCOME ETC. THIS PATTERN CLEARLY INDICAT IVE THAT THE BALANCE SHEETS ARE FORGED AND CREATED ONLY FOR THE PU RPOSE OF THE ALLEGED TRANSACTIONS. THERE ARE NO SUCH COMPANIES A CTUALLY EXISTING AND THEY ARE MERELY COMPANIES ON PAPER. 4. THE ASSESSING OFFICER, THEREFORE, HELD THAT THE SHARE HOLDERS HOLDING SHARE WORTH `.41 LAKHS DID NOT HAVE CREDITWOR THINESS AND THE IMPUGNED TRANSACTIONS WERE IN-GENUINE. HE ADDED `.41 LAKHS AS INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE FILED APPE AL BEFORE THE LD CIT(A). 5. IN THE APPEAL BEFORE THE LD CIT(A), THE ASSESSEE CON TENDED AS UNDER:- ITA NO.4921/DEL/09 6 I) THE ASSESSEE HAD DISCHARGED ITS ONUS WITH REGARD TO THE SHA RE CAPITAL RAISED DURING THE YEAR UNDER CONSIDERATION BY FILING SHAREHOLDERS CONFIRMATIONS CONTAINING FULL DETAILS SUCH AS ADDRESS, MODE OF PAYMENT, INCOME TAX PARTICULARS, COPY OF IT RETURNS, COPY OF BANK STATEMENT, AND AUDITED BALANCE- SHEET. II) THE ASSESSING OFFICER ISSUED NOTICES TO THE SHAREHOLDERS AND REPLIES THEREOF WERE RECEIVED BY THE ASSESSING OFFICER A FTER THE STIPULATED TIME. THE ASSESSEE COULD NOT BE BLAMED FO R THE SAME AS HELD IN THE JUDGMENT OF HON'BLE BOMBAY HIGH C OURT IN THE CASE OF CIT V. U.M. SHAH 141 ITR 396. III) THE OBSERVATIONS OF THE ASSESSING OFFICER THAT THE ASSESSEE COULD NOT PROVIDE ADEQUATE INFORMATION/DETAILS AS DESI RED, WAS WITHOUT ANY BASIS. THE ASSESSING OFFICER HAS NOT SPECIF IED THE DEFICIENCIES. IV) THE OBSERVATIONS OF THE ASSESSING OFFICER THAT THE LETTER HEADS USED IN THE CONFIRMATIONS FURNISHED BY THE ASSESSEE AND T HOSE RECEIVED IN RESPONSE TO NOTICE U/S 133(6) OF THE ACT W ERE DIFFERENT IS NOT MATERIAL AS IN BOTH OF THESE THE PART IES CONFIRMED THAT THE IMPUGNED TRANSACTIONS WERE ENTERED INTO BY THEM. V) THE OBSERVATION OF THE ASSESSING OFFICER THAT THE SAME PE RSON HAD SIGNED FIVE CONFIRMATIONS DOES NOT HAVE ANY BEARIN G ON THE ISSUE INVOLVED AS THERE IS NO BAR UNDER THE COMPANI ES ACT FOR A PERSON TO BE A DIRECTOR IN FIVE OR MORE COMPAN IES. IF THE ASSESSING OFFICER HAD ANY DOUBT IN THIS REGARD, SHE COULD HAVE GOT THE SAME CLARIFIED EITHER FROM THE COMPANIES OR F ROM THE ASSESSEE. BUT SHE DID NOT DO EITHER. AS SUCH THE ASSESSEE WAS REQUIRED TO BE GIVEN AN OPPORTUNITY BEFORE DRAWI NG ANY ADVERSE CONCLUSION ON MATERIAL OBTAINED BY THE ASSESSING ITA NO.4921/DEL/09 7 OFFICER. AS NO SUCH OPPORTUNITY WAS ALLOWED, IT AMOUNT ED TO VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. RELIANCE WAS PLACED IN THE CASE OF GARGI BEN JAWALA PRASAD V. CIT 96 ITR 97 (ALLD.). VI) AS REGARDS THE REGISTERED ADDRESS OF TWO COMPANIES BEING THE SAME, THE SAME WOULD NOT MAKE ANY DIFFERENCE TO THE GENUINENESS OF THE TRANSACTION ENTERED INTO. VII) AS REGARDS THE OBSERVATION OF THE ASSESSING OFFICER THAT THE CONFIRMATIONS FILED IN SAME LANGUAGE, PATTERN AND STYL E, IT WAS SUBMITTED THAT THE SAME ALSO DO NOT EFFECT THE GENUINE NESS OF THE TRANSACTION. VIII) THE ASSESSING OFFICER DID NOT ACCEPT THE CREDITWORTHINE SS OF THE SHAREHOLDERS ON THE BASIS OF INCOME DISCLOSED BY THEM . THE SAME IS INCORRECT. AVAILABILITY OF FUNDS WITH THE SHAREHOLDERS IS MATERIAL FOR DETERMINING THEIR CREDITWORTHINESS. IX) THE TRANSACTIONS IN THE BANK ACCOUNT OF THE SHARE HOLD ERS MAY BE ROUTINE TRANSACTIONS AND WITHOUT ANY ADVERSE MATER IAL OR INFORMATION, NO ADVERSE INFERENCE SHOULD HAVE BEEN DR AWN BY THE ASSESSING OFFICER. X) THE OBSERVATION OF THE ASSESSING OFFICER THAT THE SAME PE RSON WAS AUTHORIZED TO OPERATE BANK ACCOUNTS OF TWO SHAREHO LDER COMPANIES WOULD NOT MAKE SUCH TRANSACTIONS IN-GENUINE UNTIL AND UNLESS THERE WERE SOME CORROBORATIVE ADVERSE MATERI AL ON RECORD. XI) SCHEDULE-VI OF COMPANIES ACT HAS STANDARD PATTERN WHIC H ALL THE COMPANIES WERE REQUIRED TO FOLLOW. THE SAME WOUL D NOT AFFECT THE GENUINENESS OF THE TRANSACTION. XII) THE OBSERVATIONS AND ALLEGATIONS MADE BY THE ASSESSING OFFICER ARE BASED ON CONJECTURE OR SURMISES. ITA NO.4921/DEL/09 8 XIII) THE ASSESSING OFFICER HAS DISREGARDED THE MATERIAL FURNIS HED BY THE ASSESSEE AND SHAREHOLDERS WITHOUT BRINGING ANY MATERIAL CONTRARY TO THE SAME ON RECORD. 6. ON THE BASIS OF ABOVE SUBMISSIONS, IT WAS CONTENDED BY THE ASSESSEE THAT THE IMPUGNED ADDITION SHOULD BE DELETED. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- 1. CIT V. LOVELY EXPORTS (P) LTD. 216 CTR 195 (SC). 2. CIT V. DIVINE LEASING & FINANCE LTD., SPL CIVIL2007 CC 6698/2007 ORDER DATED 10.8.2007 (SC). 3. CIT V. VALUE CAPITAL SERVICES (P) LTD. I.T.A. NO.348 /2008) 221 CTR 511 ((DEL.). 4. CIT V. GENERAL EXPORTS CREDITS LTD. (SC) ORDER DATED 10.3.2008 SPL CIVIL NO.21349/2007. 5. CIT V. DWARKADISH FINANCIAL SERVICES (P) LTD. 197 CTR 202 (DEL.). 6. CIT V. DIVINE LEASING & FINANCE LTD. I.T.A. NO.880/2 006, GENERAL EXPORTS & CREDITS LTD. (I.T.A. NO.953/2006, LOVELY EXPORTS (P) LTD., (DELHI HIGH COURT DATE OF DECISION 16.11.2006) . 7. CIT V. ACHAL INVESTMENT LTD. 268 ITR 211 (DEL.). 8. CIT V. DOLPHIN CANPACK LTD., 204 CTR 50 (DEL.). 9. SHREE BARKHA SYNTHETICS LTD. V. ACIT 155 TAXMANN 20 9 (RAJ.). 10. CIT V. SHREE BARKHA SYNTHETICS LTD. 270 ITR 477 (RAJ.). 11. CIT V. SOPHIA FINANCE LTD. 205 ITR 98 (DEL.). 12. DCIT V. ROHINI BUILDERS 256 ITR 360 (GUJ.). 7. A REMAND REPORT WAS CALLED FOR BY THE LD CIT(A). IN THE SAID REMAND REPORT, THE ASSESSING OFFICER MADE OUT THE FOLLO WING ADDITIONAL POINTS:- ITA NO.4921/DEL/09 9 I) IN FIVE OUR OF SIX SHARE APPLICANT COMPANIES, SHRI SUB ODH KUMAR KHANDELWAL IS THE DIRECTOR. OUT OF THESE COMPA NIES, PARAS FINCAP PVT. LTD., AKIK EDUCATION CENTRE PVT. L TD. AND PARASANDI LEASING FINANCE PVT. LTD. HAD RECEIVED MONE Y FROM TWO CONCERNS NAMELY ACHAL INVESTMENT AND RANI ENTERPR ISES JUST BEFORE APPLYING FOR SHARE CAPITAL. FROM THE BANK ACCOUNTS OF THESE TWO CONCERNS, IT WAS NOTICED THAT CASH WERE DEPOSITED JUST BEFORE ISSUING CHEQUES TO THE THREE SHARE APPLICANTS. THE ASSESSING OFFICER, THEREFORE, ISSUED SUMMO NS TO SHRI PRADEEP KUMAR JINDAL TWICE BUT THERE WERE N O COMPLIANCE. THE ASSESSING OFFICER, THEREFORE, OBSERVED A S UNDER:- THE ENTIRE CHAIN OF DEPOSITING CASH AND THE ISSUING CHEQUES TO THE SHARE APPLICANTS HAS BEEN ESTABLISHED. THEREFORE, FINDING OF ASSESSING OFFICER REGARDING CREDITWORTHINESS OF SHAREHOLDER IS AGAIN ESTABLISHED WITH THE HELP OF MONEY TRAIL. ALSO THE GENUINENESS OF THE TRANSACTION AS CLAIMED BY THE ASSESSEE, IS SHAM. THIS EXERCISE OF DEPOSITING CASH AND GETTING CHEQUES FOR SHA RE APPLICATION WAS ENTIRELY TO INTRODUCE MONEY TO ITS BO OKS. 8. WHEN CONFRONTED WITH THE REMAND REPORT OF ASSESSING OFFICER, THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER CANNOT GO INTO SOURCE OF SOURCE. EVEN OTHERWISE, THE MATERIAL RELIED ON BY THE ASSESSING OFFICER CANNOT BE SAID TO BE ADVERSELY IMPACTIN G ON THE ISSUE INVOLVED. RELIANCE WAS PLACED ON THE FOLLOWING C ASE LAWS:- 1. NEMICHAND KOTHARI V. CIT 264 ITR 254 (GAUHATI). 2. CIT V. DAULAT RAM RAWAT MAL. 87 ITR 349 (SC). ITA NO.4921/DEL/09 10 9. WITH REFERENCE TO NON APPEARANCE OF THE PERSON, I T WAS SUBMITTED THAT THE SAME CANNOT BE CONSIDERED TO BE FAU LT OF THE ASSESSEE. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: - 1. CIT V. U.M. SHAH (SUPRA). 2. NATHU RAM PREM CHAND V. CIT 49 ITR 561 (ALLD.). 10. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) OBSERVED THAT THE OBSERVATIONS MADE BY THE ASSESSI NG OFFICER IN THE ASSESSMENT ORDER HAVE BEEN CLARIFIED BY THE ASSESSEE D URING THE APPELLATE PROCEEDINGS. THUS, THESE DO NOT APPEAR TO BE SUFFICIENT AND REASONABLE GROUNDS FOR ADDITION ESPECIALLY WHEN THE SA ME HAVE NOT BEEN CONFRONTED TO THE APPELLANT. 11. THE ASSESSEE CONTENDED THAT FOLLOWING FACTS HAVE BEE N ESTABLISHED BY RELEVANT EVIDENCES :- - ALL SHARE APPLICANTS ARE COMPANIES HAVING SEPARATE EX ISTENCE AND ARE REGISTERED WITH THE REGISTRAR OF COMPANIES. - THEY ARE REGULAR INCOME TAX ASSESSEE. - THEY HAVE THEIR OWN BANK ACCOUNT. - THEY WERE ISSUED AND SERVED NOTICE U/S 133(6) OF THE ACT. - THEY HAVE RESPONDED TO THE NOTICES BY WAY OF CONFIR MING THE INVESTMENTS IN THE APPELLANT COMPANY. THE LD CIT(A) HELD THAT ON THE BASIS OF THE SAME, THE IDENTITY OF THE PARTIES HAVE BEEN ESTABLISHED. 12. THE LD CIT(A) TOOK NOTE OF THE FOLLOWING FACTS:- ITA NO.4921/DEL/09 11 --------------------------------------------------- ----------------------------------------------- SL. NAME OF THE SHAREHOLDER INVESTMENT IN CAPITAL/ NO. APPELLANT CO. FUND 1. AKIK EDU., CENTRE PVT. LTD. 500000 32678033 2. AGROHA SAVINGS LTD. 600000 5000000 3. PARSANDI LEASING FIN.(P) LTD. 1000000 64442577 4. PARAS FINCAP PVT. LTD. 500000 17368420 5. LOKPRIYA TEA CO. LTD. 1400000 10000000 6. SHRI GIRIRAJ FINCAP PVT. LTD. 100000 25667 00 HE, THEREFORE, HELD THAT THE PARTIES WERE CREDITWORT HY. 13. AS THE IMPUGNED AMOUNTS WERE RECEIVED BY THE ASSESSEE THROUGH BANKING TRANSACTIONS AND AS DISCREPANCIES NOTED BY THE ASSESSING OFFICER HAVE BEEN RECONCILED, THE LD CIT(A) H ELD THE TRANSACTIONS TO BE GENUINE. 14. IN THE ABOVE FACTS AND CIRCUMSTANCES AND PLACING RELIANCE ON THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF CIT V. LOVELY EXPORTS PVT. LTD. 216 CTR 195 (SC) AND HON'BLE JURISDICTIONA L HIGH COURTS DECISION IN THE CASE OF CIT V. VALUE CAPITAL SERVICES PVT. LTD. 221 ITR 511 (DEL.), THE LD CIT(A) DELETED THE IMPUGNED ADDI TION OF `.41 LAKHS. AGGRIEVED, THE REVENUE HAS FILED APPEAL BEFORE THE T RIBUNAL. 15. BEFORE US, THE LD DR IN ADDITION TO RELYING ON T HE ORDER OF THE ASSESSING OFFICER, SUBMITTED THAT IT IS CLEAR FROM THE RE MAND REPORT OF THE ASSESSING OFFICER THAT IT IS NOT THE SOURCE OF SOURCE WHICH THE ASSESSING OFFICER WENT INTO BUT MERELY TRACED THE MONEY TRAIL OF THE ITA NO.4921/DEL/09 12 IMPUGNED SHARE INVESTMENTS. ACCORDING TO THE LD DR, T HE SAME IS VERY RELEVANT FOR DECIDING THE ISSUE AT HAND. 16. IT WAS FURTHER SUBMITTED BY HER THAT THE RATIO LA ID DOWN BY THE HON'BLE APEX COURT IN LOVELY EXPORTS (P) LTD. (SUPRA ) WAS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE IN SO FAR A S IT WAS NOT A CASE OF PUBLIC ISSUE OF SHARES. THE SHARES WERE PRIVATELY P LACED AND THUS MERELY ESTABLISHMENT OF IDENTITY OF SHARE APPLICANT W AS NOT SUFFICIENT FOR THE ADDITION TO BE DELETED. 17. THE LD AR FOR THE ASSESSEE, ON THE OTHER HAND, RELI ED ON THE ORDER OF THE LD CIT(A). IT WAS EMPHASIZED BY HIM THAT THE IDENTITY OF THE SHARE APPLICANTS HAVE BEEN PROVED BY THE ASSESSEE AND THEREFORE NO ADDITION ON THIS ACCOUNT WAS CALLED FOR. 18. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. WE HAVE ALSO GONE THROUGH THE CASE LAWS CITED BY BOTH THE PARTIES. WE FIND THAT THE IMPUGNED SHARE HOLDERS/APPLICANTS HAD VERY MEAGER IN COME. HOWEVER, THE COMPANIES HAD SUFFICIENT RESOURCES FROM WH ICH THE IMPUGNED AMOUNTS COULD HAVE BEEN PAID. EVIDENCE ON RECORD SHOW THAT THE AMOUNTS WERE PAID BY THE PARTIES TO THE ASSESSE E THROUGH THEIR RESPECTIVE BANK ACCOUNTS. THE LD CIT(A) HAD CAT EGORICALLY FOUND THAT THE IDENTITY OF THE PARTIES WERE PROVED, THE PA RTIES HAD CREDITWORTHINESS AND THE EVIDENCE ON RECORD PROVED TH E GENUINITY OF THE TRANSACTION. THE ABOVE FACTUAL FINDINGS OF THE L D CIT(A) HAVE NOT BEEN DISLODGED BY THE REVENUE BY BRINGING ON RECORD ANY CONTRARY EVIDENCE. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) ON THE ISSUE INVOLVED AND CONF IRM THE SAME. 19. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ITA NO.4921/DEL/09 13 20. ORDER PRONOUNCED IN THE OPEN COURT ON THE 25 TH DAY OF NOVEMBER, 2011. SD/- SD/- (DIVA SINGH) (B.K. HALD AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 25.11.2011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING DATE OF DICTATION DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. DATE OF ORDER SENT TO THE CONCERNED BENCH ITA NO.4921/DEL/09 14