ACIT, New Delhi V. M/s Pushpanjali Commercial Pvt. Ltd., New Delhi

ITA 4981/DEL/2013

• Counselvise Citation: 498120114 RSA 2013
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 14-07-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 27-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL BAJPAI
• Assessee Lawyers: R JAIN ARS
• Keywords: Unexplained cash credit; Additional evidence; Question of law; Corroborative evidences; Accommodation entries
• Section: 143(3); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI T.S. KAPOOR ITA NO.4981/DEL/2013 ASSESSMENT YEAR: 2004-05 ASSISTANT CIT, VS. M/S. PUSHPANJALI COM MERCIAL CENTRAL CIRCLE 17, PVT. LTD., B-82, DEFENCE COLONY, NEW DELHI. NEW DELHI. (PIN: AAACP0601M) (APPLICANT) (RESPONDENT) CROSS-OBJECTION NO.2/DEL/2014 ( IN ITA NO. 4981/DEL/2013 ) ASSESSMENT YEAR: 2004-05 M/S. PUSHPANJALI COMMERCIAL VS. ASSISTANT CIT, PVT. LTD., B-82, DEFENCE COLONY, CENTR AL CIRCLE-7, NEW DELHI. NEW DELHI. (PIN: AAACP0601M) (CROSS-OBJECTOR) (RESPONDENT) REVENUE BY: SHRI SUNIL BAJPAI, CIT(DR ) ASSESSEE BY: SHRI VED JAIN & MS. R .JAIN, ARS ORDER PER I.C. SUDHIR: JUDICIAL MEMBER ITA NO. 4981/DEL/2013 : THE REVENUE HAS QUESTIONED ON THE FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS: 1. THAT THE LEARNED CIT(APPEALS) ERRED IN LAW AND ON F ACTS OF THE CASE IN DELETING THE ADDITION OF RS.4.03 CRO RES MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED CREDIT. 2. THAT THE LEARNED CIT(APPEALS) ERRED IN ADMITTING ADDITIONAL EVIDENCE. 2 3. (A) THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRONE OUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING T HE COURSE OF THE HEARING OF THE APPEAL. 2. GROUND NO.2 : IN THIS GROUND, THE REVENUE HAS QUESTIONED ADMI SSION OF ADDITIONAL EVIDENCE BY THE LEARNED CIT(APPEALS). IN SUPPORT OF THIS GROUND, LEARNED DR SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SUFFICIENT OPPORTUNITY WAS GRANTED BY THE ASSESSING OFFICER TO THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE CL AIMED SHARE APPLICATION MONEY WHICH THE ASSESSEE DID NOT AVAIL. LEARNED CIT (APPEALS) WAS THUS NOT JUSTIFIED IN ENTERTAINING THE ADDITIONAL EVIDENCE F ILED BY THE ASSESSEE BEFORE HIM I.E. BALANCE SHEET OF SHAREHOLDER, INVESTMENT D ECLARED IN THE NAME OF THE ASSESSEE COMPANY IN THE BALANCE SHEET, ASSESSMENT O RDER OF SHAREHOLDER COMPANY UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961, CERTIFICATE OF INCORPORATION, SOURCE OF DEPOSIT IN BANK ACCOUNT OF SHAREHOLDER, ITR OF THE COMPANY/FIRM FROM WHERE FUNDS CLAIMED IN THE BANK A CCOUNT OF THE SHAREHOLDER AND BANK ACCOUNT OF SOURCE FROM WHERE F UNDS CAME. HE SUBMITTED THAT BEFORE THE ASSESSING OFFICER, THE AS SESSEE WAS ABLE TO FURNISH ONLY THE DOCUMENTS LIKE SHARE APPLICATION FORM WITH NAME, ADDRESS, BANK DETAILS/PAN, ITR OF SHAREHOLDER, BANK ACCOUNT WITH NAME, ACCOUNT NUMBER 3 AND DEBIT IN THE NAME OF THE ASSESSEE COMPANY. NO D OCUMENTS WERE FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DESPITE O F OPPORTUNITY. LEARNED CIT(APPEALS) WAS THUS NOT JUSTIFIED IN ADMITTING AB OVE STATED ADDITIONAL EVIDENCE DURING THE COURSE OF FIRST APPELLATE PROCE EDINGS. 3. LEARNED AR ON THE OTHER HAND SUBMITTED THAT THER E WAS SUFFICIENT REASON FOR NOT FILING THE ABOVE STATED DOCUMENTS IN EVIDENCE BEFORE THE ASSESSING OFFICER AND AFTER CALLING REMAND REPORT F ROM THE ASSESSING OFFICER ON THE APPLICATION FILED BY THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS) FOR THE ADMISSION OF ABOVE STATED ADDITIONAL EVIDENCE, THE LEARNED CIT(APPEALS) BEING SATISFIED WITH THE REASONS SHOWN BY THE ASSESSEE FOR NOT FILING THESE DOCUMENTS BEFORE THE ASSESSING OFFICER , HAD ADMITTED THE ADDITIONAL EVIDENCE. 4. ON HAVING GONE THROUGH THE ORDERS OF THE AUTHORI TIES BELOW IN THIS REGARD, WE FIND THAT THE LEARNED CIT(APPEALS) HAS D EALT WITH THE ISSUE IN DETAIL AND AFTER DISCUSSING THE CASE OF THE ASSESSE E IN SUPPORT OF THE APPLICATION FOR ADMISSION OF THE ADDITIONAL EVIDENC E, AND CALLING THE REMAND REPORT OF THE ASSESSING OFFICER THEREUPON THE LEARN ED CIT(APPEALS) HAS ALLOWED THE APPLICATION OF THE ASSESSEE WITH THE FO LLOWING FINDINGS: 4 9.3.2 AFTER GOING THROUGH THE A.OS REPORT DATED 27.08.2012 AND ALSO HAVING PERUSED THE FACTS AND EVIDENCE ON RECOR D, I FIND THAT THE A.O. GAVE THE SHOW-CAUSE NOTICE IN RESPECT OF THE I SSUE OF SHARE CAPITAL FOR THE FIRST TIME ON 14.12.2011 AND HE GAV E JUST 2 DAYS TO THE APPELLANT TO GIVE DETAILED SUBMISSION/EVIDENCE TO P ROVE THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF THE S HAREHOLDERS WHO HAVE GIVEN RS.4.03 CRORES. IN MY HUMBLE VIEW, THE TIME OF 2 DAYS GIVEN TO THE APPELLANT WAS TOO SHORT AND HAVING SAID THAT, I FIND THAT THE DOCUMENTS FILED DURING THE APPELLATE PROCEEDINGS ARE NOT IN THE NAT URE OF ANY ADDITIONAL EVIDENCE PER SE RATHER THEY ARE OF THE N ATURE OF SUPPORTING EVIDENCES, HENCE, THEY ARE TAKEN ON RECORD AND ARE ADMITTED AS EVIDENCES. THE ISSUE OF GENUINENESS, CREDITWORTHINE SS AND IDENTITY OF SHAREHOLDERS IS DECIDED KEEPING IN LIGHT THESE DOCU MENTS ALSO. TO DECIDE THIS ISSUE IT IS IMPORTANT TO ANALYZE THE FACTS OF EACH SHAREHOLDER. 5. WE, THUS, FIND THAT THERE WAS SUFFICIENT REASON FOR THE ADMISSION OF THE ADDITIONAL EVIDENCE BY THE LEARNED CIT(APPEALS) AS THE ASSESSING OFFICER HAD ISSUED SHOW-CAUSE NOTICE IN RESPECT OF THE ISSU E OF SHARE CAPITAL FOR THE FIRST TIME ON 14.12.2011 AND HAS GIVEN JUST TWO DAY S TO THE ASSESSEE TO GIVE DETAILED SUBMISSIONS/EVIDENCE TO PROVE THE GENUINEN ESS OF THE TRANSACTION, CREDITWORTHINESS AND IDENTITY OF THE SHAREHOLDER WH O HAD GIVEN RS.4.03 5 CRORES. WE CONCUR WITH THE FINDINGS OF THE LEARNE D CIT(APPEALS) THAT THE TIME OF TWO DAYS GIVEN TO THE ASSESSEE WAS NOT SUFF ICIENT AND WE ALSO CONCUR WITH THE FINDING OF THE LEARNED CIT(APPEALS) THAT T HE DOCUMENTS FILED BEFORE THE LEARNED CIT(APPEALS) WERE IN THE NATURE OF SUPPORTING EVIDENCE. UNDER THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT LEARNED CIT(APPEALS) HAS RIGHTLY ALLOWED THE REQUIRED ADMIS SION OF ADDITIONAL EVIDENCE BY THE ASSESSEE BEFORE HIM AFTER AFFORDING OPPORTUNITY TO THE ASSESSING OFFICER IN THIS REGARD. THUS, THERE IS NO ANY VIOLATION OF RULE 46A OF THE INCOME-TAX RULES, 1962. THE GROUND NO.2 IS A CCORDINGLY REJECTED. 6. GROUND NOS. 1 & 3 : THE RELEVANT FACTS ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SEC. 153C/143(3) OF TH E INCOME-TAX ACT, 1961, THE ASSESSING OFFICER NOTICED THAT THE ASSESS EE HAD ISSUED SHARE CAPITAL TO THE FOLLOWING ENTITIES: S.NO. NAME OF THE COMPANY AMOUNT (IN RS.) 1. ROOP YARNS P. LTD. 25,00,000 2. SCHOLARS STEELS P. LTD. 15,00,000 3. ROYAL TRADERS LTD. 10,00,000 4. INNOTECH DISTRIBUTORS P. LTD. 1,45,00,000 5. HUNT COMMERCIAL LTD. 1,00,00,000 6. BMC POLYMERS P. LTD. 5,00,000 7. ROYAL TRADERS LTD. 1,05,00,000 TOTAL 4,03,00,000 6 7. THE ASSESSING OFFICER NOTED THAT AFTER CONDUCTIN G INQUIRY IN RESPECT OF ABOVE ENTITIES, HE COMES TO THE CONCLUSION THAT THE SE ENTITIES WERE SHOWING NEGLIGIBLE PROFIT AND WERE NOT IN ANY REAL BUSINESS DURING THE YEARS BUT ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. THE ASS ESSING OFFICER ACCORDINGLY CAME TO THE CONCLUSION THAT SHARE CAPIT AL ISSUED TO THEM WAS BOGUS AND IT REPRESENTS ASSESSEES OWN MONEY AND MA DE THE ADDITION OF THE ENTIRE AMOUNT OF RS.4.03,00,000 UNDER SEC. 68 OF TH E INCOME-TAX ACT, 1961. LEARNED CIT(APPEALS), HOWEVER, AFTER DISCUSSING THE RESPECTIVE CASES OF THE PARTIES HAS DELETED THE ADDITION AGREEING WITH THE ARGUMENTS AND EVIDENCE PROVIDED BY THE ASSESSEE TO SUBSTANTIATE THAT THE T RANSACTION REGARDING SHARE APPLICATION MONEY RECEIVED BY IT WAS GENUINE TRANSA CTION AND THE SAME WAS NOT ACCOMMODATION ENTRIES AS ALLEGED. THIS ACTION O F THE LEARNED CIT(APPEALS) HAS BEEN IMPUGNED BY THE REVENUE . 8. IN SUPPORT OF THE GROUNDS, LEARNED CIT(DR) HAS B ASICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. HE SUBMITTED THAT THE ASSESSEE HAS THROUGHOUT FAILED TO DISCHARGE ITS ONUS IN ESTABLIS HING THE IDENTITY, CREDITWORTHINESS OF THE SHARE APPLICANTS AS WELL AS GENUINENESS OF THE TRANSACTION, HENCE, LEARNED CIT(APPEALS) WAS NOT JU STIFIED IN DELETING THE 7 ADDITION. HE POINTED OUT THAT AFTER CONDUCTING INQU IRIES IN THE CASE OF ABOVE ENTITIES, THE ASSESSING OFFICER FOUND THAT THESE CO MPANIES WERE NOT DOING REAL BUSINESS AND WERE ENGAGED IN THE BUSINESS OF P ROVIDING ACCOMMODATION ENTRIES. THERE WAS NEGLIGIBLE PROFIT SHOWN BY THESE COMPANIES. THE TRANSACTIONS ENTERED INTO BY THE SUBSCRIBERS COMPA NIES WITH ASSESSEE COMPANY WERE NOT GENUINE AS NO PRUDENT INVESTOR CAN BE EXPECTED TO FIRST PURCHASE THE SHARES AT A PREMIUM AND THEN SELL THE SAME AT THE FACE VALUE ONLY WITHOUT ANY PREMIUM. 9. LEARNED AR ON THE OTHER HAND TRIED TO JUSTIFY TH E FIRST APPELLATE ORDER AND REITERATED THE SUBMISSIONS MADE BEFORE HIM WITH RESPONSE TO THE EVIDENCES IN SUPPORT, COPIES OF WHICH HAVE BEEN MAD E AVAILABLE IN THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE BEFORE THE ITA T. IN THIS REGARD, HE FILED A CHART IN TABULATED FORM STATING ABOUT THE EVIDENC ES FILED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND THEIR AVAILABILITY MADE BEFORE THE TRIBUNAL AT THE GIVEN PAGES OF THE PAPER BOOK. A COPY OF THI S CHART WAS ALSO SUPPLIED TO THE LEARNED CIT(APPEALS). LEARNED AR ALSO PLACED RELIANCE ON THE DECISION CITED BEFORE THE LEARNED CIT(APPEALS). THE COPIES OF DOCUMENTS FILED BEFORE THE AUTHORITIES BELOW IN SUPPORT OF TH E GENUINENESS OF THE 8 CLAIMED TRANSACTIONS BY THE ASSESSEE HAVE BEEN MADE AVAILABLE AT PAGE NOS. 1 TO 346 OF THE PAPER BOOK. 10. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT RS. 93 LACS WERE RECEIVED IN THE EARLIER YEARS FROM FOLLOWING THREE ENTITIES: I) ROOP PVT. LTD. RS.25,00,000 II) SCHOOLARS STEELS (P) LTD. RS.15,00,000 III) INNOTECH DISTRIBUGTORS (P) LTD. RS.53,00,000 TOTAL RS.93,00,000 11. DURING THE YEAR UNDER CONSIDERATION, THE ASSESS EE HAD RECEIVED NEW SHARE APPLICATION MONEY OF RS.3.10 CRORES FROM FOLL OWING FOUR CORPORATE ENTITIES: IV) ROYAL TRADERS LTD. RS.1.15 CRORES V) INNOTECH DISTRIBUTORS P. LTD. RS.0.90 CRORES VI) HUNT COMMERCIAL P. LTD. RS. 1.00 CRORES VII) BMC POLYMERS P. LTD. RS. 0.05 CRORES TOTAL: RS. 3.10 CRORES 12. IN RESPECT OF ALL THE ABOVE SIX SHAREHOLDERS (A S THE ENTITY AT SR. NOS. 3 & 5 ARE SAME ), WHICH CONTRIBUTED IN ALL RS.4.03 CR ORES SHARE CAPITAL, THE 9 ASSESSEE HAD FURNISHED FOLLOWING DOCUMENTS BEFORE T HE ASSESSING OFFICER IN SUPPORT OF THE IDENTITY, CREDITWORTHINESS AND GENUI NENESS OF THE INVESTOR COMPANY: SR. NO . PARTICULARS 1. SHARE APPLICATION FORM WITH NAME 2. ITR OF SHAREHOLDER, ADDRESS, BANK DETAILS/PAN 3. BANK ACCOUNT WITH NAME, ACCOUNT NUMBER & DEBIT IN THE NAME OF ASSESSEE COMPANY. 13. THE ASSESSING OFFICER WAS NOT SATISFIED WITH TH E SUBMISSION OF THE ASSESSEE AND THE EVIDENCE FILED IN SUPPORT THEREOF AND MADE ADDITION BASICALLY ON THE GROUND THAT SHAREHOLDERS COMPANIES WERE NOT IN ANY REAL BUSINESS DURING THE YEAR AND WERE ENGAGED IN THE BU SINESS OF PROVIDING ACCOMMODATION ENTRIES AND THAT THERE WAS NEGLIGIBLE PROFIT SHOWN BY SHAREHOLDER COMPANIES. 14. BEFORE THE LEARNED CIT(APPEALS), THE ASSESSEE A LSO FILED FOLLOWING DOCUMENTS WITH APPLICATION TO ALLOW THE SAME AS ADD ITIONAL EVIDENCE TO SUPPORT THE GENUINENESS OF THE CLAIMED TRANSACTIONS SINCE ASSESSING OFFICER 10 HAD GIVEN JUST TWO DAYS TO THE ASSESSEE TO GIVE DET AILED SUBMISSIONS/EVIDENCE TO PROVE THE GENUINENESS, CRED ITWORTHINESS AND IDENTITY OF THE SHAREHOLDERS WHO HAD GIVEN RS.4.03 CRORES. LEARNED CIT(APPEALS) CALLED REMAND REPORT ON THE APPLICATIO N FROM THE ASSESSING OFFICER AND BEING SATISFIED WITH THE REASONS SHOWN BY THE ASSESSEE, ADMITTED THE FOLLOWING ADDITIONAL EVIDENCES: S.NO. PARTICULARS (I) BALANCE SHEET OF SHAREHOLDER (II) INVESTMENT DECLARED IN THE NAME OF APPELLANT COMPANY IN THE BALANCE SHEET. (III) ASSESSMENT ORDER OF SHAREHOLDER CO. UNDER SEC. 143(3). (IV) CERTIFICATE OF INCORPORATION (V) SOURCE OF DEPOSIT IN BANK ACCOUNT OF SHAREHOLDER. (VI) INCOME-TAX RETURN OF THE COMPANY/FIRM FROM WHERE FUNDS CAME IN THE BANK ACCOUNT OF THE SHAREHOLDER. (VII) BANK ACCOUNT OF SOURCE FROM WHERE FUNDS CAME. 15. LEARNED CIT(APPEALS) THEREAFTER HAS EXAMINED TH E EVIDENCES FILED IN SUPPORT OF THE CLAIMED TRANSACTIONS BY THE ASSESSEE , SHARE-APPLICANTSWISE. FOR A READY REFERENCE, THE RELEVANT EXTRACTS OF THE FIRST APPELLATE ORDER IN THIS REGARD IS BEING REPRODUCED HEREUNDER: 11 9.4 ROYAL TRADERS LTD. (RS. 1.15 CRORE } ON GOING THROUGH THE- PAPER BOOK I FIND ~HAT THE...M ONEY HAS BEEN RECEIVED FROM BANK ACCOUNT OF ROYAL TRADERS LIMITED MAINTAINED WITH ORIENTAL BANK OF COMMERCE, DARYA GANJ, NEW DELHI AN D THERE IS NO DEPOSIT IN CASH IN THIS BANK ACCOUNT BEFORE APPLYIN G FOR SHARES IN THE APPELLANT COMPANY. ROYAL TRADERS LIMITED HAS RECEIV ED VARIOUS PAYMENTS IN THEIR 9ANK ACCOUNT (THE DETAILS OF WHICH ARE FIL ED IN THE PAPER BOOK) OUT OF WHICH THEY HAVE APPLIED TO THE SHARES OF THE APP ELLANT COMPANY. IT IS ALSO SEEN THAT ROYAL TRADERS LIMITED IS ASSESSED TO INCOME TAX AND SO IS THE CASE OF ALL THE COMPANIES FROM -WHOM CREDIT HAS BEEN RECEIVED IN THEIR BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION. F URTHER, THE BALANCE SHEET OF ROYAL TRADERS SHOWS THE NET WORTH OF MORE THAN RS. 9 CRORES. ROYAL TRADERS LIMITED HAS BEEN ASSESSED TO INCOME-T AX UNDER SECTION 143(3) FOR THE ASSESSMENT YEAR 2008-09 VIDE ORDER D ATED 15TH NOVEMBER, 2010, NO ADVERSE INFERENCE HAS BEEN DRAWN AGAINST T HIS COMPANY IN THE ASSESSMENT ORDER. FURTHER, THE AD IN HIS REPORT DAT ED 27.08.2012 HAS ALSO NOT CONTROVERTED ANY OF THE ABOVE FACTS. IN THE ASSESSMENT ORDER PASSED UNDER SECTION 153C/1 43(3), I FIND THAT THERE IS NO SPECIFIC ADVERSE FINDING BY THE AD ON THE BASIS OF WHICH THE AMOUNT RECEIVED FROM ROYAL TRADERS LIMITED IS BEING CONSIDERED AS UNEXPLAINED CREDIT. THE AD IN THE ASSESSMENT ORDER HAS REFERRED TO THE ENQUIRIES CONDUCTED IN THE CASE OF A FEW COMPANIES BUT THE ASSESSMENT ORDER- IS TOTALLY SILENT AS TO WHAT ENQUIRIES HAVE BEEN MADE ON THE STRENGTH OF WHICH HE CAME TO THE CONCLUSION THAT THE INVESTM ENT MADE BY ROYAL TRADERS IS NOT A GENUINE TRANSACTION. ON THE CONTRA RY, I FIND THAT THE APPELLANT HAS PLACED EVIDENCES (PAPER BOOK PAGE 13 0) THAT ~HIS COMPANY HAS CONFIRMED TO ADIT REGARDING ITS INVESTMENT WITH THE APPELLANT COMPANY WHEN THE SUMMONS UNDER SECTION 131 WERE ISS UED DURING THE POST SEARCH INVESTIGATION. AS THE APPELLANT COMPANY HAS EXPLAINED ITS SOURCE A S WELL AS THE SOURCE OF ITS SHAREHOLDER, THEREFORE, IN VIEW OF TH E ABOVE DISCUSSION THE APPELLANT COMPANY HAS ESTABLISHED THE IDENTITY, CRE DITWORTHINESS AND GENUINENESS OF THE TRANSACTION. 9.5 HUNT COMMERCIAL LTD. (RS. 1.00 CRORE} ON GOING THROUGH THE PAPER BOOK, IT IS SEEN THAT TH E AMOUNT HAS BEEN RECEIVED BY CHEQUE FROM THE BANK ACCOUNT OF HU NT COMMERCIAL LIMITED AND THERE ARE NO CASH DEPOSIT IN THIS4JANK ACCOUNT BEFORE APPLYING FOR SHARES IN THE APPELLANT COMPANY. THIS MONEY HAS BEEN PAID OUT OF THE MONEY RECEIVED BY IT FROM DIFFERENT ENTITIES. THE D ETAILS ABOUT SUCH 12 ENTITIES, ITS IDENTITY, INCOME TAX PARTICULARS HAVE ALSO BEEN FILED BY THE APPELLANT. IT IS FURTHER SEEN THAT, HUNT COMMERCIAL LIMITED IS A INCOME TAX ASSESSEE AND THE BALANCE SHEET SHOWS THE NET WORTH OF RS. 9.99 CRORE AND A SUM OF RS.1,00,00,000 HAS BEEN SHOWN AS INVESTMEN T IN THE NAME OF THE APPELLANT COMPANY. FURTHER, THE AD IN THE REMAND RE PORT DATED 27.08.2012 HAS NOT CONTROVERTED ANY OF THESE FACTS. THE AO IN THE ASSESSMENT ORDER HAS REFERRED TO THE ENQUIRIES COND UCTED IN THE CASE OF A FEW COMPANIES BUT THE ASSESSMENT ORDER IS TOTALLY SILENT AS TO WHAT ENQUIRIES HAVE BEEN MADE ON THE 'STRENGTH OF WHICH HE CAME TO THE CONCLUSION THAT, THE INVESTMENT MADE BY HUNT COMMER CIAL IS NOT A GENUINE TRANSACTION. ON THE CONTRARY, I FIND THAT T HE APPELLANT HAS PLACED EVIDENCES (PAPER BOOK PAGE 210) THAT THIS COMPANY H AS CONFIRMED TO ADIT REGARDING ITS INVESTMENT WITH THE APPELLANT CO MPANY WHEN THE SUMMONS UNDER SECTION 131 WERE ISSUED DURING THE PO ST SEARCH INVESTIGATION. AS THE APPELLANT COMPANY HAS EXPLAINED ITS SOURCE A S WELL AS THE SOURCE OF ITS SHAREHOLDER, THEREFORE, IN' VIEW OF T HE ABOVE DISCUSSION THE APPELLANT COMPANY HAS ESTABLISHED THE IDENTITY, CRE DITWORTHINESS AND GENUINENESS OF THE TRANSACTION. 9.6 INNOTECH DISTRIBUTORS (P) LTD. (RS. 40,00,000) THE APPELLANT COMPANY HAS RECEIVED A SUM OF RS.93,0 0,000 FROM INNOTECH DISTRIBUTORS (P) LTD., OF WHICH RS. 40,00, 000 HAS BEEN RECEIVED DURING THE YEAR. ON GOING THROUGH 'THE DOCUMENTS FI LED BY THE APPELLANT COMPANY IT IS SEEN THAT THE MONEY HAVE BEEN RECEIVE D FROM BANKING CHANNELS. THE DETAILS WITH NECESSARY EVIDENCES FILE D ALSO EXPLAINS THE SOURCE FROM WHICH SUCH PAYMENTS HAVE BEEN MADE. THE BALANCE SHEET AND THE INCOME TAX ASSESSMENT ORDER PASSED UNDER, SECTI ON 143(3) FOR ASSESSMENT YEAR 2006-07 DATED 15TH DECEMBER, 2008 I N RESPECT OF INNOTECH DISTRIBUTORS IS ALSO FILED 'AN~ THERE IS NO ADVERSE FINDING AS REGARDS ITS FINANCIALS. THE BALANCE SHEET AS WELL A S PROFIT AND LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION OF THE INN OTECH DISTRIBUTORS (P) LTD. SHOWS TOTAL ASSETS OF RS. 5.00 CRORE AND SALES AND PURCHASES OF RS. 97.14 LACS AND RS. 1.60 CRORE RESPECTIVELY AND A SU M OF RS.93,OO,000 HAS BEEN SHOWN AS INVESTMENT IN THE NAME OF -THE APPELL ANT COMPANY. THE AO (N THE ASSESSMENT ORDER HAS REFERRED TO THE ENQUIRIES CONDUCTED IN THE CASE OF A FEW COMPANIES BUT THE AS SESSMENT ORDER IS TOTALLY SILENT AS TO WHAT ENQUIRIES HAVE: BEEN MADE ON THE STRENGTH OF WHICH HE CAME TO THE CONCLUSION THAT THE INVESTMENT MADE BY INNOTECH DISTRIBUTORS IS NOT A GENUINE TRANSACTION. ON THE C ONTRARY, I FIND THAT THE APPELLANT HAS PLACED EVIDENCES (PAPER BOOK PAGE 155 ) THAT THIS COMPANY 13 HAS CONFIRMED TO ADIT REGARDING ITS INVESTMENT WITH THE APPELLANT COMPANY WHEN THE SUMMONS UNDER SECTION 131 WERE ISS UED DURING THE POST SEARCH INVESTIGATION. ALL THESE ISSUES WERE RAISED BY THE APPELLANT IN TH E WRITTEN SUBMISSIONS AND THE AO IN THE REMAND REPORT DATED 2 7.08.2012 HAS NOT BEEN ABLE TO REBUT OR CONTROVERT ANY OF THESE FACTS . AS THE APPELLANT COMPANY HAS EXPLAINED ITS SOURCE A S WELL AS THE SOURCE OF ITS SHAREHOLDER, THEREFORE, IN VIEW OF TH E ABOVE DISCUSSION THE APPELLANT COMPANY HAS ESTABLISHED THE IDENTITY, CRE DITWORTHINESS AND GENUINENESS OF THE TRANSACTION . 9.7 BMC POLYMERS (RS. 5.00 LACS) A SUM OF RS.5,OO,OOO HAS BEEN RECEIVED FROM THE BAN K ACCOUNT OF BMC POLYMERS PVT. LTD. AND I NOTICE THAT THERE A RE NO IMMEDIATE CASH DEPOSIT IN THIS BANK ACCOUNT BEFORE APPLYING FOR SH ARES OF APPELLANT COMPANY AND THIS MONEY HAS .BEEN PAID OUT OF THE MO NEY RECEIVED BY THE SHAREHOLDER COMPANY FROM PARADISE COMMERCIAL (P) LT D. -FURTHER, IT IS SEEN THAT BMC POLYMERS PVT. LTD. IS ALSO ASSESSED T O INCOME TAX AND ITS ASSESSMENT FOR THE YEAR 2006-07 HAS BEEN COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 21ST AUGUST, 2008 AND T HERE IS NO ADVERSE FINDING OR COMMENT REGARDING ITS FINANCIALS. THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF TH E BMC POLYMERS PVT. LTD. SHOWS ASSETS OF RS. 10CRORE AND SALES AND PURCHASE OF RS. 2 CRORE AND RS. 1.03 CRORE RESPECTIVELY. I ALSO NOTICE THAT THE INDEPENDENT ENQUIRIES HAVE BEEN' CONDUCTED BY ISSUE OF SUMMONS UNDER SECTION 131 DURING. THE POST-SEARCH BY THE ADIT FRO M BMC POLYMERS PVT. LTD. AND IN RESPONSE THERETO (PAPER BOOK PAGE 244) THE SHAREHOLDER COMPANY HAS ACKNOWLEDGED THE FACT OF HAVING MADE TH E INVESTMENT AND HAS ALSO SUBMITTED THE NECESSARY EVIDENCES IN SUPPO RT THEREOF. AFTER SUBMISSION OF THESE REPLIES AND EVIDENCES NO FURTHE R PROCEEDINGS WERE TAKEN ~AGAINST THE SHAREHOLDER COMPANY BY ADIT AS WE LL AS BY THE ASSESSING OFFICER. THE AO IN THE ASSESSMENT ORDER HAS REFERRED TO THE ENQUIRIES CONDUCTED IN THE CASE OF A FEW COMPANIES BUT THE AS SESSMENT ORDER IS TOTALLY SILENT AS TO WHAT ENQUIRIES HAVE BEEN MADE ON THE STRENGTH OF WHICH HE CAME TO THE CONCLUSION THAT THE INVESTMENT MADE BY BMC POLYMERS IS NOT A GENUINE TRANSACTION. 14 ALL THESE ISSUES WERE RAISED BY THE APPELLANT IN TH E WRITTEN SUBMISSIONS AND THE AD IN THE REMAND REPORT DATED 2 7.08.2012 HAS NOT BEEN ABLE TO REBUT OR CONTROVERT ANY OF THESE FACTS . AS THE APPELLANT .COMPANY HAS EXPLAINED ITS SOURCE AS WELL AS THE SOURCE OF ITS SHAREHOLDER, THEREFORE, IN VIEW OF TH E ABOVE DISCUSSION THE APPELLANT COMPANY HAS ESTABLISHED THE IDENTITY, CRE DITWORTHINESS AND GENUINENESS OF THE TRANSACTION. 9.8 ROOP YARN (P) LTD. (RS. 25 LACS): THOUGH THE PAYMENTS HAVE BEEN RECEIVED BY CHEQUE FR OM THE BANK ACCOUNT BUT IT IS IN THE PRECEDING YEAR. HAVING SAI D THAT, I NOTICE THAT NO IMMEDIATE CREDIT OF CASH IN THE BANK ACCOUNT ~AS BEE N THERE BEFORE APPLYING FOR SHARES IN APPELLANTS COMPANY BUT THE SAME IS MADE OUT OF THE MONEY WHICH ROOP YARN (P) LTD. HAS RECEIVED FRO M ITS VARIOUS ENTITIES, THE DETAILS OF WHICH HAVE ALSO BEEN PLACED ON RECOR D BY THE APPELLANT. FURTHER, THE BALANCE SHEET AND PROFIT AND LOSS ACCO UNT OF THE ROOP YARN (P) LTD. FOR THE YEAR UNDER CONSIDERATION SHOWS ASS ETS OF RS. 30.04 CRORE AND SALES AND PURCHASE OF RS. 39.81 LACS AND RS. 23 .05 LACS RESPECTIVELY. THE AO IN THE ASSESSMENT ORDER HAS REFERRED TO THE ENQUIRIES CONDUCTED IN THE CASE OF A FEW COMPANIES BUT THE AS SESSMENT ORDER IS TOTALLY SILENT AS TO WHAT ENQUIRIES HAVE BEEN MADE ON THE STRENGTH OF WHICH HE CAME TO THE CONCLUSION THAT THE INVESTMENT MADE BY ROOP YARN IS NOT A GENUINE TRANSACTION. ALL THESE ISSUES WERE RAISED BY THE APPELLANT IN TH E WRITTEN SUBMISSIONS AND THE AD IN THE REMAND REPORT DATED 2 7.08.2012 HAS NOT BEEN ABLE TO REBUT OR CONTROVERT ANY OF THESE FACTS . AS THE APPELLANT COMPANY HAS EXPLAINED ITS SOURCE A S WELL AS THE SOURCE OF ITS SHAREHOLDER, THEREFORE, IN. VIEW OF T HE ABOVE DISCUSSION APPELLANT COMPANY HAS ESTABLISHED THE IDENTITY, CRE DITWORTHINESS AND GENUINENESS OF THE TRANSACTION. 9.9 SCHOLARS STEEL (P) LTD. (RS. 15 LACS) IN THIS CASE ALSO THE MONEY HAS BEEN RECEIVED FROM THE BANK ACCOUNT OF THE SHAREHOLDER COMPANY BUT IN THE PRECE DING YEAR, IN THE BANKS STATEMENT THERE ARE NO IMMEDIATE CASH DEPOSIT BEFORE APPLYING FOR THE SHARES OF APPELLANT'S COMPANY AND PAYMENT HAS B EEN MADE OUT OF THE MONEY RECEIVED BY THE SHAREHOLDER COMPANY FROM VIKA S HOLDINGS (P) LTD. I HAVE ALSO PERUSED THE BANK ACCOUNT OF THE VIKAS H OLDINGS (P) LTD. WHERE 15 A SUM OF RS.7 LAC AND RS. 10 LACS HAVE BEEN PAID TO THE SHAREHOLDER COMPANY, ON 30.0L03. VIKAS HOLDINGS (P) LTD. IS ALS O BEING ASSESSED TO INCOME TAX. I HAVE ALSO PERUSED THE BALANCE SHEET A ND PROFIT AND LOSS ACCOUNT OF THE SCHOLARS STEEL (P) LTD. WHICH SHOWS ASSETS OF RS. 3 CRORE AND SALES AND PURCHASE OF RS. 36.58 LACS AND RS. 40 .14 LACS RESPECTIVELY. THE AO IN THE 'ASSESSMENT ORDER HAS REFERRED TO THE ENQUIRIES CONDUCTED IN THE CASE OF A FEW COMPANIES BUT THE AS SESSMENT ORDER IS TOTALLY SILENT AS TO WHAT ENQUIRIES HAVE BEEN MADE ON THE STRENGTH OF WHICH HE CAME TO THE CONCLUSION THAT THE INVESTMENT MADE BY SCHOLARS STEEL IS NOT A GENUINE TRANSACTION. THE APPELLANT HAS SUBMITTED ALL EXPLANATION AND EVI DENCES IN SUPPORT OF ITS CONTENTION AND THE AD IN THE REMAND 'REPORT DATED 27.08.2012 HAS NOT BEEN ABLE TO REBUT OR CONTROVERT ANY OF THE EVIDENCES PLACED ON RECORD BY THE APPELLANT. AS THE APPELLANT COMPANY HAS EXPLAINED ITS SOURCE A S WELL AS THE SOURCE OF ,ITS SHAREHOLDER, THEREFORE, IN VIEW OF T HE ABOVE DISCUSSION APPELLANT COMPANY HAS ESTABLISHED THE IDENTITY, CRE DITWORTHINESS AND GENUINENESS OF THE TRANSACTION 16. ON PERUSAL OF THE ABOVE FINDINGS OF THE LEARNED CIT(APPEALS), WHICH HAS NOT BEEN REBUTTED BEFORE US BY THE REVENUE , WE COME TO THE CONCLUSION THAT IN RESPECT OF ALL THE ABOVE SIX SHAREHOLDERS, THE ASSESSEE HAS BEEN ABLE TO FURNISH ON RECORD SUBSTANTIAL EVIDENCES TO ESTABLIS H THE IDENTITY, CREDITWORTHINESS OF THE SHAREHOLDERS AND GENUINENES S OF THE TRANSACTIONS. THE ASSESSEE HAS ALSO GONE TO THE EXTENT OF FURNISH ING THE SOURCE OF IMMEDIATE CREDIT AS WELL AS THE SOURCE OF SUCH CRED ITS IN THE HANDS OF THE SHAREHOLDER COMPANIES. WE ALSO FIND THAT THE ASSESS ING OFFICER AT THE ASSESSMENT STAGE AND AT THE STAGE OF FURNISHING REM AND REPORT HAS NOT GIVEN 16 ANY ADVERSE FINDING EXCEPT THE GENERAL FINDING I.E. THE AMOUNT IN ROUND FIGURE, THE BOARDS RESOLUTION HAS NOT BEEN FILED, ALL THE SHAREHOLDERS ARE TRADING IN UNLISTED COMPANIES ETC. WE ALSO FIND THA T THE LEARNED CIT(APPEALS) WHILE GIVING RELIEF TO THE ASSESSEE HA S PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) CIT VS. ORISSA CORPORATION 159 ITR 78 (S.C); II) CIT VS. DIVINE LEASING & FINANCE LTD. 299 ITR 268 ( S.C); III) CIT VS. DWARKADISH INVESTMENT P. LTD., ITA NO.911 O F 2010 DATED 02.08.2010 (DELHI H.C.); IV) CIT VS. LOVELY EXPORTS 299 ITR 268 (S.C); V) CIT VS. GANGOUR INVESTMENT LTD., ITA NO. 34 OF 2007 DATED 30.1.2009 (DELHI H.C.); VI) VALUE CAPITAL P. LTD. (2008) 307 ITR 334 (DEL.); VII) CIT VS. PONDY METAL & ROLLING MILLS P. LTD. ITA NO. 788 OF 2006 DATED 19.2.2007 (DELHI); VIII) CIT VS. GOYAL SONS GOLDEN STATE P. LTD. ITA NO. 212 OF 2012 DATED 11.4.2012 (DELHI); IX) CIT VS. FROSTAIR PVT. LTD. ITA NO. 183 OF 2002 DATE D 24.8.2012 (DELHI); 17. HON'BLE SUPREME COURT IN THE CASE OF CIT VS. OR ISSA CORPORATION PVT. LTD. (SUPRA) HAS BEEN PLEASED TO HOLD AS UNDER: 17 THAT IN THIS CASE THE RESPONDENT HAD GIVEN THE NAM ES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE O F THE REVENUE THAT THE SAID CREDITORS WERE INCOME-TAX ASSESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES UNDER SEC. 131 AT THE INSTANCE OF THE RESPO NDENT, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER T HEY WERE CREDITWORTHY. THERE WAS NO EFFORT MADE TO PURSUE TH E SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE RESP ONDENT COULD NOT DO ANYTHING FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE RESPONDENT HAD DISCHARGED THE B URDEN THAT LAY ON IT, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSIO N WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION WAS BASED ON SOME EVIDENCE ON WHICH A CONCLUSION COULD NOT BE AR RIVED AT, NO QUESTION OF LAW AS SUCH AROSE. THE HIGH COURT WAS R IGHT IN REFUSING TO STATE A CASE. 18. SIMILARLY IN THE CASE OF CIT VS. GOYAL SONS GOL DEN STATE PVT. LTD. (SUPRA), BEFORE THE HON'BLE DELHI HIGH COURT, ASSES SEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HAD FILED CONFIRMATION LETT ER FROM THE COMPANIES, THEIR PANS, COPY OF BANK STATEMENT, AFFIDAVITS AND BALANCE SHEETS. THEREAFTER, THE ASSESSING OFFICER HAD ASKED THE ASS ESSEE TO PRODUCE THE SAID DIRECTORS/PARTIES. THE ASSESSEE EXPRESSED ITS INABI LITY TO PRODUCE THEM. THE ASSESSING OFFICER DID NOT CONSEQUENT THERETO CONDUC T ANY INQUIRY AND CLOSED 18 THE PROCEEDINGS. HONBLE COURT OBSERVED THAT IT IS THE CASE WHERE THE ASSESSING OFFICER FAILED TO CONDUCT NECESSARY INQUI RIES, VERIFICATION AND DEALT WITH THE MATTER IN DEPTH SPECIALLY AFTER THE AFFIDAVIT/CONFIRMATION ALONG WITH THE BANK STATEMENT ETC. WERE FILED. IT WAS HEL D THAT IN CASE THE ASSESSING OFFICER HAD CONDUCTED THE SAID INQUIRIES AND INVEST IGATION PROBABLY THE CHALLENGED MADE BY THE REVENUE WOULD BE JUSTIFIED. IN THE ABSENCE OF THESE INQUIRIES AND NON-VERIFICATION OF THE DETAILS AT TH E TIME OF ASSESSMENT PROCEEDINGS THE FACTUAL FINDINGS RECORDED BY THE AS SESSING OFFICER WERE INCOMPLETE AND SPARSE. HONBLE HIGH COURT ACCORDING LY DISMISSED THE APPEAL PREFERRED BY THE DEPARTMENT. 19. AGAIN IN THE CASE OF CIT VS. FROSTAIR PVT. LTD. (SUPRA), HON'BLE DELHI HIGH COURT HAS BEEN PLEASED TO OBSERVE THAT THE ASS ESSEE IS UNDER A BURDEN TO EXPLAIN THE NATURE AND SOURCE OF THE SHARE APPLI CATION MONEY RECEIVED IN A GIVEN CASE. FOR DISCHARGING THIS, THE ASSESSEE HAS TO ESTABLISH; A) THE SHAREHOLDERS IDENTITY; B) GENUINENESS OF THE TRANSACTIONS; & C) THE CREDITWORTHINESS OF THE SHAREHOLDERS. IT WAS HELD THAT IF THE CREDITOR/SUBSCRIBER IS A CO MPANY, THE REGISTERED ADDRESS OR PAN IDENTITY, AND OTHER RELEVANT DETAILS ARE TO BE FURNISHED. 19 GENUINENESS CAN ALSO BE PROVED BY DISCLOSING MATERI ALS POINTING TO RECEIPT OF THE SHARE APPLICATION MONEY FROM THE APPLICANTS. COPIES OF SHAREHOLDERS REGISTERED ADDRESS, SHARE APPLICATION FORM, TRANSFE R REGISTER ETC. CAN BE FURNISHED. SO FAR AS THE SHARE APPLICANTS, CREDITW ORTHINESS IS CONCERNED, THE HONBLE HIGH COURT HELD THAT THE ASSESSEE CAN PROVE IT BY PRODUCING BANK STATEMENT. IT WAS HELD THAT PRIMA FACIE THESE MAY S ATISFY THE REQUIREMENT OF LAW. THE ASSESSING OFFICER HAS TO THEN EXAMINE THE MATERIALS TO PROVE THE MATTER FURTHER. HE CAN REJECT THESE DOCUMENTS AND H OLD FOR VALID REASONS, THAT THE TRANSACTION IS NOT GENUINE. THE REASONS SHOULD BE BASED ON MATERIAL AND NOT THE PRODUCT OF CONCLUSIONS BASED ON SUSPICION, HELD THE HIGH COURT. HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DIVINE LEASING & FINANCE LTD. (SUPRA) HAS BEEN PLEASED TO HOLD AS FOLLOWS: WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FO R THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAME S ARE GIVEN TO THE A.O., THEN THE DEPARTMENT, IS FREE TO PROCEED T O REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. 20. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. GANGOUR INVESTMENT LTD. (SUPRA) HAS BEEN PLEASED TO HOLD THAT REVENUE CAN MAKE ADDITION UNDER SEC. 68 OF THE INCOME-TAX ACT, 1961 ONLY IF THE ASS ESSEE IS UNABLE TO EXPLAIN 20 THE CREDITS APPEARING IN ITS BOOKS OF ACCOUNT. IN T HAT CASE, THE ASSESSEE HAD DULY EXPLAINED THE SAID CREDIT ENTRIES IN THE FORM OF VARIOUS DOCUMENTARY EVIDENCE. THE SAID DOCUMENTARY EVIDENCE CONTAINS DE TAILS WHICH SET OUT NOT ONLY THE IDENTITY OF THE CREDITORS WITH RESPECT TO THEIR ADDRESS AS WELL AS PAN, ASSESSMENT PARTICULARS ETC. BASED ON THE FACTS , HON'BLE DELHI HIGH COURT DISMISSED THE APPEAL OF THE REVENUE . 21. AGAIN IN THE CASE OF CIT VS. LOVELY EXPORTS (SU PRA), IT HAS BEEN HELD BY THE HON'BLE SUPREME COURT THAT ONCE THE IDENTITY OF SHAREHOLDERS HAVE BEEN ESTABLISHED, EVEN IF, THERE IS CASE OF BOGUS S HARE CAPITAL, IT CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE COMPANY UNLESS A NY ADVERSE EVIDENCE IS ON RECORD. 22. WHEN WE EXAMINE THE FACTS OF THE PRESENT CASE, IN VIEW OF THE ABOVE RATIOS OF THE DECISIONS, WE FIND THAT THE ASSESSEE IN THE PRESENT CASE HAS PROVIDED EVIDENCE IN THE FORM OF PAN, ROC DETAILS, COPY OF ITR FILED AND COPY OF CONFIRMATION, EXPLAINED SOURCE OF SOURCES A LSO AND EVEN IN THE POST- SEARCH INQUIRIES, THE SHAREHOLDERS HAVE CONFIRMED T HE INVESTMENT BEFORE THE ADIT. THESE MATERIAL FACTS CAN BE UNDERSTOOD FROM T HE FOLLOWING CHART, WITH ASSISTANCE OF WHICH THE LEARNED AR SUBMITTED AND EX PLAINED THAT THE 21 GENUINENESS OF THE CLAIMED TRANSACTIONS HAVE BEEN W ELL ESTABLISHED BY THE EVIDENCES FILED BEFORE THE AUTHORITIES BELOW: PUSHPANJALI COMMERCIAL P. LTD : (A.Y. 2004-05) S.NO. PARTICULARS OF DOCUMENTS ENDURING THE TRANSACTIONS ROYAL TRADERS LTD. (P.B. PAGE NO.) INNOTEOCH DISTRIBUTORS P. LTD., (P.B. PAGE NO.) HUNT COMMERCIAL LTD. (P.B. PAGE NO.) BMC POLYMERS LTD. (P.B. PAGE NO.). ROOP YARNS P. LTD. (P.B. PAGE NO.) SCHOLARS STEELS P. LTD. (P.B. PAGE NO.) 1. SHARE APPLICATION FORM WITH NAME, ADDRESS, BANK DETAILS/PAN 88-92 131-139 191-194 229 40 56-57 2. INCOME-TAX RETURN OF SHAREHOLDER 94 142 197 211 42 59 3. BALANCE SHEET OF SHAREHOLDER 96-106 144-150 198-206 232-241 43-51 60-72 4. INVESTMENT DECLARED IN THE NAME OF APPELLANT COMPANY IN THE BALANCE SHEET. 105 150 205 241 49 67 5. ASSESSMENT ORDER OF SHAREHOLDER CO. UNDER SECTION 143(3) 107 151 NA 242 NA NA 6. CERTIFICATE OF INCORPORATION 95 143 211 232 NA NA 7. BANK ACCOUNT WITH NAME, ACCOUNT NO. AND DEBIT IN THE NAME OF APPELLANT CO. 108-110 152 207 243 52 73 8. SOURCE OF DEPOSIT IN BANK ACCOUNT OF SHAREHOLDER 111 152 207 243 53 74 9. INCOME-TAX RETURN OF THE CO./FIRM FROM WHERE FUNDS CAME IN THE BANK ACCOUNT OF THE 115,117,121,123,125,127 162, 164, 167-170, 172,175, 178, 181, 185, 183, 187, 189 213, 216, 218, 220, 222, 224, 226 245 NA 77 22 SHAREHOLDER 10. BANK ACCOUNT OF SOURCE FROM WHERE FUNDS CAME 116,118, 122, 124, 126, 128 163, 165, 168, 171, 174, 177, 180, 182, 184 212, 214, 217, 219, 221, 223, 2225, 227 246 53 78-79 11. WHETHER INQUIRY CONDUCTED BY ADI POST-SEARCH. YES YES NO. YES NO NO. 12. REPLY SUBMITTED BY THE SHAREHOLDER TO ADI 130 155 NA 244 NA NA 23. SINCE THE LEARNED CIT(DR) HAS NOT BEEN ABLE TO REBUT THESE SUBMISSIONS OF LEARNED AR NOR THE EVIDENCES FILED I N SUPPORT, WE DO NOT FIND ANY INFIRMITY IN THE FIRST APPELLATE ORDER ON THE I SSUE AS THE LEARNED CIT(APPEALS) HAS PASSED A COMPREHENSIVE AND REASONE D ORDER ON THE ISSUE AFTER EXAMINING EVIDENCE RELATING TO EACH OF THE SH ARE APPLICANT COMPANIES TO ARRIVE AT A CONCLUSION THAT THE ASSESSEE WAS ABL E TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . WE ARE THUS NOT INCLINED TO INTERFERE WITH THE FIRST APPELLATE ORD ER IN THIS REGARD. THE SAME IS UPHELD. GROUND NOS. 1 AND 3 ARE THUS REJECTED. 24. IN THE RESULT, THE APPEAL IS DISMISSED. 25. IN ITS CROSS-OBJECTION, THE ASSESSEE HAS BASICA LLY QUESTIONED THE VALIDITY OF THE NOTICE ISSUED UNDER SEC. 153C OF TH E INCOME-TAX ACT, 1961 AND ASSESSMENT MADE IN FURTHERANCE THERETO TO WHICH THE LEARNED CIT(APPEALS) DID NOT AGREE. SINCE WE HAVE DECIDED T HE ABOVE APPEAL ON THE 23 MERITS OF THE ADDITION MADE BY THE ASSESSING OFFICE R AND DELETED BY THE LEARNED CIT(APPEALS) IN FAVOUR OF THE ASSESSEE, THE CROSS-OBJECTION RAISED BY THE ASSESSEE HAS BECOME ACADEMIC ONLY. THE SAME IS THUS DISPOSED OFF AS HAVING BECOME INFRUCTUOUS. THE APPEAL PREFERRED BY THE REVENUE AND CROSS- OBJECTION FILED BY THE ASSESSEE ARE THUS DISMISSED. ORDER PRONOUNCED IN THE ORDER COURT ON 07 .08.201 4. SD/- SD/- ( T.S. KAPOOR ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/08/2014 MOHAN LAL COPY FORWARDED TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT ASSISTANT REGISTRAR