ITO, New Delhi V. M/s Blisswood Green Infrastructure and Developers Pvt. Ltd., New Delhi

ITA 5120/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4410 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 29-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D C AGARWAL; R N POONIA
• Keywords: Unexplained cash credit; Bogus Share capital; Capital asset; Gift; Depreciation; Share purchase agreement; Question of law; Corroborative evidences; Accommodation entries; Non compliance; Competent authority
• Section: 131; 68; 143(3); 133(6); 195

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH A, NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 5120/DEL/2016 ASSESSMENT YEAR: 2012-13 INCOME - TAX OFFICER, WARD 5(1), NEW DELHI. (APPELLANT) VS. BLISSWOOD GREEN INFRASTRUCTURE AND DEVELOPERS PVT. LTD., 289-CHHATARPUR PAHARI ROAD, NEW DELHI. PAN AADCB 2384A (RESPONDENT) APPELLANT BY SH. AMIT KATOCH, SR. DR RESPONDENT BY S/SH. D.C. AGARWAL, R.N. POONIA, AR SH. SUDESH GARG, ADVOCATE ORDER PER L.P. SAHU, A.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-2, NEW DELHI DATED 24.06.2016 FOR THE ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,30,00,000/- MADE U/S. 68 OF THE I.T. ACT, ON ACCOUNT OF UNEXPLAINED CREDIT S IN THE FORM OF SHARE CAPITAL/SHARE PREMIUM DURING THE YEAR. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE HA D DISCHARGED THE ONUS OF DATE OF HEARING 04.02.2019 DATE OF PRONOUNCEMENT 15.02.2019 ITA NO. 5120/DEL/2016 2 PROVING THE IDENTITY AND CREDITWORTHINESS OF THE SH ARE SUBSCRIBERS AND THE GENUINENESS OF THE SUBSCRIPTION. 2. BRIEFLY STATED, SOME PRIMARY FACTS OF THE CASE A RE THAT THE ASSESSEE COMPANY, INCORPORATED ON 14.02.2006, WAS ENGAGED IN THE BUSINESS OF REAL ESTATE AGENTS, DEALERS IN LAND, PLOTS, BUILDINGS ET C. AND ALSO IN GENERATION OF POWER THROUGH WIND MILL AND AGRICULTURAL ACTIVITY. THE RETURN OF INCOME WAS FILED ON 28.09.2012 AT AN INCOME OF RS, 66,95,817/- AND AFTER SETTING OFF OF BROUGHT FORWARD LOSSES, THE INCOME WAS TAKEN AS NIL . IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED SHARE CAPITAL/PREMIUM AMOUNTING TO RS.2,69 ,00,000/- AS FOLLOWS : (I). FROM TWO DIRECTORS - 190000 SHARES @ RS.10 EAC H RS.19,00,000 (II).FROM COMPANY HAVING COMMON DIRECTORS 150000 SHARES @RS.10 EACH RS.1,50,00,000 (III).FROM UNRELATED CORPORATE ENTITIES- 100000 SHA RES OF RS.10 EACH AT A PREMIUM OF RS.90/- PER SHARE, TO TAL RS.100/-PER SHARE RS.1,00,00,000 __________________ RS.2,69,00,000 __________________ 3. THE ASSESSING OFFICER, AFTER SCRUTINY OF DETAILS , HOWEVER, MADE AN ADDITION OF RS. 1,30,00,000 U/S 68 AS BOGUS SHARE CAPITAL AN D AFTER SETTING OFF OF BROUGHT FORWARD LOSSES, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.83,06,310/-. THE ADDITION OF RS.1,30,00,000/- COMPRISED OF RS.1, 00,00,000/- IN RESPECT OF SHARE CAPITAL RAISED FROM 10 UNRELATED ENTITIES AND OF RS. 30,00,000/-IN RESPECT OF SHARE CAPITAL RAISED FROM A GROUP COMPANY, HI-FI INFOTECH PVT. LTD. THE ITA NO. 5120/DEL/2016 3 DETAILS OF THE COMPANIES IN RESPECT TO WHOM THE IMP UGNED ADDITION WAS MADE BY THE ASSESSING OFFICER ARE AS UNDER : S. NO. NAME & ADDRESS OF INVESTORS AMOUNT (IN RS.) 1. GEEMAD PROMOTERS PVT. LTD. F-6, VIJAY CHOWK, LAXMI NAGAR, NEW DELHI-110092 5,00,000 2. HARI REALTECH PVT. LTD. F-6, VIJAY CHOWK, LAXMI NAGAR, NEW DELHI-110092 5,00,000 3 . EDWARD IMPEX PVT. LTD. F-6, VIJAY CHOWK, LAXMI NAGAR, NEW DELHI-110092 15,00,000 4 . SARA FUN AND SHOW BIZ PVT. LTD. F-6, VIJAY CHOWK, LAXMI NAGAR, NEW DELHI-110092 5,00,000 5 . DWARKA FABRICS PVT. LTD. F-6, VIJAY CHOWK, LAXMI NAGAR, NEW DELHI-110092 15,00,000 6. HIGHTECH VALUATION CONSULTANTS PVT. LTD. C-62, BASEMENT SOUTH EXTN. PART-1, NEW DELHI 10,00,000 7 . RUDRA AVTAR STEEL PVT. LTD. 15,00,000 31/10, BHIKAM SINGH COLONY, VISHWAS NAGAR, SHAHDARA , NEW DELHI - 110032 8 . NEW AGE INFRA BUILDERS PVT. LTD. 3317/2, MAHINDRA PARK, RANI BAGH, NEW DELHI - 110034 10,00,000 9 . WIZARD DEVELOPERS PVT. LTD. 1403, KATRA JHAJJAR WALA, CHANDNI CHOWK, DELHI - 110006 10,00,000 10 . ACROSS MARKETING SERVICES PVT. LTD. 3317/2, MAHINDRA PARK, RANI BAGH, NEW DELHI - 110034 10,00,000 11 . HI - FI INFOTECH PVT. LTD. 289, CHHATARPUR PAHARI ROAD, NEW DELHI - 110074 30,00,000 TOTAL: 1,30,00,000 THE REASONS ASSIGNED BY THE ASSESSING OFFICER FOR H OLDING THE INVESTMENT IN SHARES BY FORMER 10 UNRELATED COMPANIES AS BOGUS AR E SUMMARIZED AS UNDER : (I). NON-COMPLIANCE/PART COMPLIANCE TO OR NON-SERVI CE OF NOTICE U/S. 133(6) ON THE SUBSCRIBERS COMPANIES. (II). INSPECTORS SPOT ENQUIRY REPORT REGARDING NON -EXISTENCE OF SUBSCRIBERS COMPANIES AT THE GIVEN ADDRESS. (III). NON-ESTABLISHMENT OF PHYSICAL IDENTITY OF IN VESTORS AND NON PRODUCTION OF DIRECTORS OF THE SUBSCRIBING COMPANIE S. (IV). ABSENCE OF PROFIT MAKING APPARATUS OF SUBSCR IBING COMPANIES. ITA NO. 5120/DEL/2016 4 (V). NO BUSINESS ACTIVITIES OF INVESTORS COMPANIES , HAVING LOW INCOME SHOWING THEIR LACK OF CREDITWORTHINESS. (VII). ROTATION OF MONEY IN BANK ACCOUNTS OF INVES TORS. (VIII). NO JUSTIFICATION FOR CHARGING HIGH PREMIUM BY ASSESSEE AND FOR INVESTMENT BY UNKNOWN ENTITIES AT SUCH A HUGE AMOUN T OF SHARES. IN ORDER TO SUPPORT THE AFORESAID CONCLUSION FOR AD DITION U/S. 68, THE ASSESSING OFFICER RELIED ON VARIOUS DECISIONS, AS INCORPORATE D IN THE ASSESSMENT ORDER. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, ATTEND ING FACTS OF THE CASE, AND VARIOUS CASE LAWS, ALLOWED THE APPEAL OF THE ASSESS EE AND DELETED THE IMPUGNED ADDITION VIDE IMPUGNED ORDER. AGGRIEVED, THE REVEN UE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIE S ON THE ISSUE INVOLVED IN THIS APPEAL AND HAVE GONE THROUGH THE ENTIRE MATERI AL AVAILABLE INCLUDING THE ORDERS OF THE AUTHORITIES BELOW AND VARIOUS CASE LA WS RELIED BY BOTH THE PARTIES AND RELEVANT PROVISIONS OF LAW. BOTH THE PARTIES HA VE FILED THEIR WRITTEN SYNOPSIS, WHICH ARE ALSO CONSIDERED AND PLACED ON RECORD. 5. IN THE FACTUAL MATRIX OF THE PRESENT CASE, AS NA RRATED ABOVE AND ARGUMENTS OF BOTH THE PARTIES, WE FIND THAT THE ONLY DISPUTE WHICH NEEDS ADJUDICATION IS WHETHER THE LD. CIT(A) WAS JUSTIFIED TO DELETE THE ADDITION MADE U/S. 68 OF THE ACT ON MERITS THEREOF. 6. BEFORE WE PROCEED TO ADJUDICATE UPON THE ISSUE O N MERITS, WE FEEL IT APPROPRIATE TO MENTION THAT AS PER SECTION 68 OF TH E ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FO R ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE SAME OR THE ITA NO. 5120/DEL/2016 5 EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY IN T HE OPINION OF THE ASSESSING OFFICER, THE SUM SO CREDITED MAY BE CHARGED TO INCO ME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. A BARE PERUSAL OF A BOVE SECTION MAKES IT CLEAR THAT THE BASIC PRECONDITION FOR INVOCATION OF SECTI ON 68 IS THAT THERE SHOULD BE ABSENCE OF EXPLANATION OF ASSESSEE AS TO THE SOURCE AND NATURE OF CREDIT AND THE DISSATISFACTION OF THE ASSESSING OFFICER AS TO THE CREDIBILITY OF ASSESSEES EXPLANATION, IF FURNISHED BY HIM. THE FACTUAL MATRI X OF THE PRESENT CASE, IF EXAMINED ON THE ANVIL OF ABOVE SECTION, WE FIND THA T THE ASSESSEE, IN ORDER TO DISCHARGE THE ONUS CAST UPON HIM BY THIS SECTION, H AS FURNISHED DETAILED EXPLANATION BEFORE THE ASSESSING OFFICER AS TO THE NATURE AND SOURCE OF CREDITS, BEING SHARE APPLICATION MONEY RECEIVED FROM DIFFERE NT COMPANIES, WHOSE DETAILS WERE ALSO FILED BEFORE THE ASSESSING OFFICER. IN SU PPORT OF HIS EXPLANATION, THE ASSESSEE ADMITTEDLY FILED FOLLOWING DOCUMENTARY EVI DENCES: (I). PHOTOCOPY OF SHARE APPLICATIONS FORMS DULLY FI LLED IN. (II). CONFIRMED STATEMENT OF ACCOUNT FROM SHAREHOLD ER. (III). COPIES OF ITRS OF THE SHARE SUBSCRIBERS. (IV). COPIES OF THEIR BANK STATEMENTS (V). CERTIFICATES OF INCORPORATION, MEMORANDUM AND ARICLE OF ASSOCIATION OF THE INVESTOR COMPANIES. (VI). BALANCE SHEETS OF THE INVESTORS. (VII). COPIES OF SHARE CERTIFICATES ISSUED TO THE I NVESTORS WHICH HAVE BEEN DULY STAMPED BEFORE THE COMPETENT AUTHORITY. 7. THE CONTENTION OF THE LD. AR HAS BEEN THAT THE A SSESSING OFFICER HAS MISERABLY FAILED TO POINT OUT ANY DEFECTS IN THESE DOCUMENTS SO AS TO DOUBT THE EXPLANATIONS OF THE ASSESSEE REGARDING THREE INGRED IENTS OF SECTION 68 NOR IS THERE REFERENCE OF ANY ENQUIRY CONDUCTED BY THE ASS ESSING OFFICER AS TO THE AUTHENTICITY OF THESE DOCUMENTS. THE CONTENTION OF THE LD. DR HAS BEEN THAT THE ITA NO. 5120/DEL/2016 6 ASSESSEE HAS FAILED TO MEET OUT THE OBJECTIONS OF T HE ASSESSING OFFICER WHILE HOLDING THE IMPUGNED SHARE CAPITAL AS BOGUS. IN OUR CONSIDERED OPINION, ONCE, ALL THE ABOVE DOCUMENTARY EVIDENCES ARE PRODUCED, THE A SSESSEE HAD DISCHARGED THE ONUS CAST UPON HIM. THEREAFTER, IT WAS FOR THE ASSESSING OFFICER TO EXAMINE THE SAME AND TO PROBE THE MATTER, IF HE NURTURES AN Y DOUBT ON THE VERACITY/AUTHENTICITY OF THESE DOCUMENTS, WHICH IS COMPLETELY LACKING IN THE INSTANT CASE. IN OUR OPINION, IN ORDER TO DISBELIEV E THE DOCUMENTS PRODUCED BY THE ASSESSEE, THERE SHOULD BE SOME INQUIRY AND COGE NT MATERIAL ON RECORD, WHICH TOO IS LACKING IN THE INSTANT CASE. HONBLE GUJRAT HIGH COURT IN A RECENT DECISION OF PCIT VS. D&H ENTERPRISES, (2016) 72 TAXMANN.COM 91 (GUJRAT) ON SUCH ISSUE HELD AS UNDER : 7. THUS, FROM THE FACTS NOTED HEREINABOVE, IT IS EVIDEN T THAT THE ASSESSEE HAD PRODUCED ALL RELEVANT DETAILS IN ITS POSSESSION, NA MELY, NAMES, PERMANENT ACCOUNT NUMBERS, INCOME TAX RETURNS, AND BANK STATE MENTS OF ALL THE INVESTORS. THE AMOUNTS IN QUESTION HAD BEEN RECEIVED BY WAY OF ACCOUNT PAYEE CHEQUES. HAVING REGARD TO THE FACT THAT THE P ERMANENT ACCOUNT NUMBERS AND THE INCOME TAX RETURNS OF ALL THE INVES TORS HAD BEEN FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER COULD HAVE E ASILY VERIFIED THE SAME. HE, HOWEVER, PLACED RELIANCE UPON THE FACT THAT THE SUM MONS ISSUED TO THE PARTIES UNDER SECTION 131 OF THE ACT COULD NOT BE S ERVED AND HENCE, DID NOT ACCEPT THE GENUINENESS OF THE TRANSACTIONS. IN THE OPINION OF THIS COURT, TAKING INTO ACCOUNT THE CONCURRENT FINDINGS OF FACT RECORDED BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL, IT CANNOT B E SAID THAT THE CONCLUSION ARRIVED AT BY THE TRIBUNAL IS, IN ANY MAN NER, CONTRARY TO THE RECORD OR THAT THE SAME SUFFERS FROM ANY LEGAL INFI RMITY SO AS TO GIVE RISE TO ANY QUESTION OF LAW, MUCH LESS A SUBSTANTIAL QUESTI ON OF LAW WARRANTING INTERFERENCE. IN SUCH VIEW OF THE MATTER, IN OUR CONSIDERED OPINI ON, THE DISSATISFACTION OF THE ASSESSING OFFICER CANNOT BE SUSTAINED ONLY ON THE B ASIS OF SUSPICION. ITA NO. 5120/DEL/2016 7 8. THE ASSESSING OFFICER HAS LAID MUCH EMPHASIS ON THE NON-SERVICE/NON COMPLIANCE OF NOTICES U/S. 133(6) OF THE ACT. THE C ONTENTION OF THE ASSESSEE HAS BEEN THAT THE ASSESSING OFFICER IGNORED THAT THE NO TICES WERE RETURNED DUE TO CHANGE IN ADDRESSES OF THE COMPANY, WHICH WERE SUBS EQUENTLY COMPLIED WITH. IT WAS ALSO SUBMITTED THAT 8 COMPANIES OUT OF 11 RESPO NDED TO THE NOTICE AND SUBMITTED RELEVANT DOCUMENTS OF THEIR RESPECTIVE IN VESTMENT IN THE ASSESSEE COMPANY. IT WAS ALSO SUBMITTED THAT THREE PARTIES TO WHOM NOTICES WERE NOT DIRECTLY SERVED FILED THE RELEVANT DOCUMENTS AT THE REQUEST OF THE ASSESSEE. THE LEARNED DR SUBMITTED THAT THE NOTICES SENT ON CHANG ED ADDRESS OF SOME OF THE COMPANIES WERE NOT SERVED/COMPLIED WITH, BUT THE DO CUMENTS WERE FILED BY THE ASSESSEE. HAVING CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND GOING THROUGH THE ASSESSMENT ORDER, WE FIND THAT ALL THE RELEVANT DOCUMENTS ARE AVAILABLE ON THE RECORD OF ASSESSING OFFICER AS IS EVIDENT FROM PARA 3.11 AND 4.1 TO 4.11 OF THE ASSESSMENT ORDER. MOREOVER, THE ASS ESSING OFFICER IS VESTED WITH AMPLE POWERS TO ENFORCE AND COMPEL THE APPEARANCE O F THE CREDITORS. THEREFORE, IN OUR OPINION, EVEN IF ON THE EFFORTS OF THE ASSES SEE, THE SHARE HOLDERS HAD FILED ALL THE REQUIRED EVIDENCES AND DETAILS PERTAINING T HE IMPUGNED SHARE CAPITAL, IT CANNOT BE SAID THAT IT WAS OWN MONEY OF THE ASSESSE E WHICH ROUTED THROUGH THE SHARE APPLICANTS, WHEN THE ASSESSING OFFICER HAS FA ILED TO BRING ANY COGENT MATERIAL ON RECORD TO JUSTIFY BOGUS NATURE OF SHARE CAPITAL ON RECORD. IN PRESENCE OF THESE FACTS ON RECORD, IN OUR CONSIDERE D OPINION, THE DISSATISFACTION OF ASSESSING OFFICER ON THIS COUNT HAS RIGHTLY BEEN DISCARDED BY THE LD. CIT(A). 09. IT IS NOT DISPUTED THAT ALL THE SHARE APPLICANT S ARE COMPANIES REGISTERED UNDER THE COMPANIES ACT, THEY ARE INCOME-TAX ASSESS EES AND HAVE REFLECTED THE ITA NO. 5120/DEL/2016 8 IMPUGNED SHARE INVESTMENTS IN THEIR RESPECTIVE BALA NCE SHEETS. IT IS ALSO AN UNDISPUTED FACT THAT THE SHARE APPLICATION MONEY WA S OBTAINED THROUGH ACCOUNT PAYEE CHEQUES OF THE INVESTING COMPANIES AND WERE C REDITED TO THE BANK ACCOUNT OF ASSESSEE. THE ASSESSING OFFICER OBSERVED FROM THE BANK STATEMENTS THAT PARALLEL ENTRIES OF DEPOSITS BEFORE ISSUE OF C HEQUES WERE FOUND. HOWEVER, IN OUR OPINION, WITHOUT MAKING ANY ENQUIRY IN RESPECT THEREOF, IT IS HARD TO STATE THAT THE CREDIT ENTRIES IN THE BANK ACCOUNTS OF THE INVESTOR COMPANIES, WERE ROUTED THROUGH THE COFFERS OF ASSESSEE AND SUCH A P RESUMPTION CANNOT BE SUSTAINED AT ALL, PARTICULARLY, WHEN THE SHARE SUBS CRIBERS HAVE DECLARED THEIR INVESTMENTS IN THEIR RESPECTIVE BALANCE SHEETS. 10. THE NEXT OBJECTION OF THE ASSESSING OFFICER REG ARDING NON-EXISTENCE OF INVESTOR COMPANIES IS BASED ON THE INSPECTORS REPO RT WHO ON SPOT ENQUIRY REPORTED ABOUT NON-EXISTENCE OF THE INVESTOR COMPAN IES. THE CONTENTION OF THE LD. AR HAS BEEN THAT THE BUILDING WHERE THE INSPECT OR VISITED IS A BIG COMMERCIAL COMPLEX HAVING SEVERAL OFFICES AND SHOPS; THAT HE E NQUIRED FROM UNKNOWN PERSONS AND NOT FROM THE OFFICE OF M/S. ASHOK TYAGI AND COMPANY, A CA FIRM WHO AND HIS RELATIVES WERE DIRECTORS IN THESE COMPA NIES; THAT ENQUIRY DONE FROM UNKNOWN PERSONS LACKS CREDIBILITY AS ONE CANNOT BE SURE AS TO THE EXTENT, NUMBERS, NAMES OF THE CONCERNS, WHICH WERE WORKING IN THAT PREMISES; THAT NO ASSESSING OFFICER OF ANY INVESTOR COMPANY WAS APPRO ACHED TO ENQUIRE THE EXISTENCE OF SUCH COMPANIES, PARTICULARLY WHEN THEI R CERTIFICATES OF INCORPORATION PROVE THE EXISTENCE OF DIRECTORS AND THEIR DIN ISSUED BY MINISTRY OF CORPORATE AFFAIRS AND THE THEIR ASSESSMENTS BEIN G MADE BY REVENUE AUTHORITIES. NEITHER LD. DR NOR THE ASSESSING OFFIC ER COULD BE ABLE TO CONTROVERT THE AFORESAID DOCUMENTARY EVIDENCES SUBMITTED BY TH E ASSESSEE SO AS TO PROVE ITA NO. 5120/DEL/2016 9 THE EXISTENCE OF INVESTOR COMPANIES, ESPECIALLY WHE N THE INQUIRY REPORT OF THE INSPECTOR HAS BEEN CHALLENGED BY THE ASSESSEE AS NO T CONDUCTED IN RIGHT DIRECTION AND THUS, INCREDIBLE. THUS, BASED ON THE IMPUGNED INSPECTORS REPORT, IT CAN HARDLY BE SAID THAT THE INVESTOR COMPANIES, IN THE PRESENT SITUATION, WERE THE PAPER COMPANIES. IT IS NOWHERE THE CASE OF THE REVENUE AUTHORITIES THAT THE INVESTOR COMPANIES WERE BEING CONTROLLED BY ANY ONE PERSONS OR THAT THE IMPUGNED INVESTMENTS WERE MADE ON THE DICTATES OF A NY SUCH PERSON. 11. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT ONE OF THE GRAVE OBJECTIONS OF THE ASSESSING OFFICER HAS BEEN THAT THE INVESTOR COMPANIES HAVE SHOWN VERY LOW INCOME TO JUSTIFY THE INVESTMENT, SHOWING LACK OF THEIR CREDITWORTHINESS. IN THIS CONTEXT, WE ARE CONVINCED WITH THE CONTENTION OF THE ASSESSEE THAT MERE LOW PROFIT/INCOME DECLARED BY THE INVESTOR COMPANIES, W OULD NOT BE A REASONABLE BASIS TO TREAT THE CREDIT ENTRIES AS FICTITIOUS OR ACCOMMODATION ENTRIES. IN FACT, SOME NEXUS MUST BE ESTABLISHED BETWEEN THE DEPOSITS IN THE BANK ACCOUNTS OF INVESTOR COMPANIES AND THE INCOME OF THE ASSESSEE A ND NO SUCH NEXUS HAVING BEEN ESTABLISHED, THE ADDITIONS MADE ON THIS COUNT HAVE RIGHTLY BEEN DELETED BY THE LD. CIT(A). IN THIS CONTEXT, WE ARE IN AGREEMEN T WITH THE CONTENTION OF THE ASSESSEE THAT INCOME/LOSSES DECLARED BY THE INVESTO R COMPANIES IS NOT A SOLE CRITERION TO EXAMINE THE CREDITWORTHINESS OF THE SH AREHOLDERS. WE HAVE GONE THROUGH THE PAPER BOOK FILED BY THE ASSESSEE AND FO UND THAT IN MOST OF THE CASES, THE INVESTOR COMPANIES HAD SUFFICIENT INTERNAL AND EXTERNAL FUNDS, SO AS TO COVER THE INVESTMENTS MADE WITH THE ASSESSEE COMPANY AND THE AO HAS FAILED TO ENQUIRE INTO SUCH FACTS BEFORE DOUBTING THE CREDITW ORTHINESS OF THE SHARE HOLDERS. FOR THIS VIEW, WE STAND FORTIFIED BY RECEN T DECISION OF HONBLE ITA NO. 5120/DEL/2016 10 JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. VRI NDAVAN FARMS (P) LTD., IN ITA NO. 71 OF 2015 DATED DATED 12 AUGUST 2015, RELIED BY THE LD. AR, WHERE, THE HONBLE COURT HAS HELD AS UNDER : 3. THE ITAT HAS IN THE IMPUGNED ORDER NOTICED THAT I N THE PRESENT CASE THE REVENUE HAS NOT DOUBTED THE IDENTITY OF THE SHARE A PPLICANT. THE SOLE BASIS FOR THE REVENUE TO DOUBT THEIR CREDITWORTHINESS WAS THE LOW INCOME AS REFLECTED IN THEIR INCOME TAX RETURNS. THE ENTIRE DETAILS OF THE SHARE A PPLICANTS WERE MADE AVAILABLE TO THE AO BY THE ASSESSEE. THIS INCLUDED T HEIR PAN NUMBERS, CONFIRMATIONS, THEIR BANK STATEMENTS, THEIR BALANCE SHEETS AND PROFIT AND LOSS ACCOUNTS AND THE CERTIFICATE OF INCORPORATION ETC. IT WAS OBSERVED BY THE ITAT THAT THE AO HAD NOT UNDERTAKEN ANY INVESTIGATION OF THE VERACITY OF THE ABOVE DOCUMENTS SUBMITTED TO HIM. IT HAS BEEN RIGHTLY COM MENTED BY THE ITAT THAT WITHOUT DOUBTING THE DOCUMENTS, THE AO COMPLETED TH E ASSESSMENT ONLY ON THE PRESUMPTION THAT LOW RETURN OF INCOME WAS SUFFICIEN T TO DOUBT THE CREDITWORTHINESS OF THE SHARE HOLDERS. SIMILAR VIEW HAS BEEN TAKEN BY HONBLE JURISDICTION AL HIGH COURT IN ANOTHER DECISION IN THE CASE OF PCIT VS. M/S. GOODVIEW TRAD ING PVT. LTD. DATED 21 NOVEMBER, 2016 REPORTED IN 2016 (12) TMI 617 DELH I HIGH COURT, OBSERVING AS UNDER : 8. IT IS QUITE EVIDENT FROM THE CIT(A)S REASONING I N PARAGRAPH 4.3, THAT THE MATERIALS CLEARLY POINTED TO THE SHARE APPLICANTS POSSESSING SUBSTANTIAL MEANS TO INVEST IN THE ASSESSEES COMPANY. THE AO SEIZED CERT AIN MATERIAL TO SAY THAT MINIMAL OR INSUBSTANTIAL AMOUNTS WAS PAID AS TAX BY SUCH SHARE APPLICANTS AND DID NOT CARRY OUT A DEEPER ANALYSIS OR RATHER CHOSE TO IGNORE IT. IN THESE CIRCUMSTANCES, THE INFERENCES DRAWN BY THE CIT(A) AR E NOT ONLY FACTUAL BUT FACIALLY ACCURATE. 12. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO RELIE D ON THE DECISION OF HONBLE DELHI HIGH COURT IN CIT VS. VALUE CAPITAL SERVICES (P) LTD. (2008) 307 ITR 334 (DEL) AND OF ITAT DELHI BENCH IN PRABHATAM INVESTME NT (P) LTD. VS. ACIT (ITA ITA NO. 5120/DEL/2016 11 NO. 2523 TO 2425/DEL/2015 DATED 17.04.2017, WHICH G O TO SUPPORT THE CONTENTIONS OF THE ASSESSEE AND NEGATE THE OBJECTIO NS OF THE ASSESSING OFFICER. 13. THE SATISFACTION OF THE ASSESSING OFFICER AS TO THE CREDIBILITY OF EXPLANATION OF ASSESSEE IS THE BASIS OF INVOCATION OF PROVISION S OF SECTION 68. HOWEVER, SUCH SATISFACTION MUST NOT BE ILLUSORY OR IMAGINARY BUT MUST HAVE BEEN DERIVED FROM RELEVANT FACTS AND EVIDENCES AND ON THE BASIS OF PR OPER ENQUIRY AND MATERIAL BEFORE HIM. IN VIEW OF AFORESAID FACTS AND PLETHORA OF EVIDENCES SUBMITTED BY THE ASSESSEE, ON WHICH NO REASONABLE DOUBTS HAVE BEEN C REATED BY THE AO, THE ONUS THAT LAY ON THE ASSESSEE UNDER SECTION 68, STANDS C OMPLETELY DISCHARGED ON THE PART OF THE ASSESSEE. THE IDENTITY OF THE INVESTING COMPANIES IS DISCERNIBLE FROM THE EVIDENCES SUBMITTED BY ASSESSEE. THEY ARE FILIN G THEIR RETURNS WITH IT DEPARTMENT AS WELL AS BEFORE ROC, BEING PROPERLY RE GISTERED WITH ROC. ONCE NO INSTANCE OF ANY CASH DEPOSIT IN THE BANK ACCOUNTS O F INVESTING COMPANY WAS POINTED OUT AND THE INVESTMENT HAS BEEN MADE THROUG H BANKING CHANNEL AND THEREFORE, FOR WANT OF ANY CORROBORATIVE EVIDENCES, THE LD. ASSESSING OFFICER WAS NOT JUSTIFIED TO DOUBT THE CREDITWORTHINESS OF THE INVESTING COMPANIES MERELY BECAUSE THEY HAVE SHOWN LOW INCOME. WE, THEREFORE, OBSERVE THAT THE INGREDIENTS OF SECTION 68 STAND SATISFIED ON THE PA RT OF THE ASSESSEE. 14. THE LD. COUNSEL FOR THE ASSESSEE IN SUPPORT OF ITS CONTENTIONS HAS ALSO RELIED ON THE FOLLOWING DECISIONS : (I) CIT V. LOVELY EXPORTS (P.) LTD. [2008] 216 CTR 195 (SC) (II) ACIT V. SHYAM INDUS POWER SOLUTIONS (P.) LTD. [2018 ] 90 TAXMANN.COM 424 (DELHI - TRIB.) (III) CIT V. KAMDHENU STEEL &. ALLOYS LTD. [2014] 361 ITR 220/19 TAXMANN.COM 26 (DELHI) ITA NO. 5120/DEL/2016 12 (IV) CIT V. WINSTRAL PETROCHEMICALS (P.) LTD. [2011] 10 TAXMANN.COM 137 (DELHI) (V) CIT VS. GANGOUR INVESTMENT LTD. (2009) 18 DTR (DEL) 242: (2009) 179 TAXMAN 1 (DEL) (VI) CIT V. KAMNA MEDICAL CENTRE (P.) LTD. [2013] 35 TAX MANN.COM 470 (ALLAHABAD) (VII) CIT V. MIQ STEELS (P.) LTD. [2013] 36 TAXMANN.COM 4 22 (ALLAHABAD) (VIII) CIT V. GAGANDEEP INFRASTRUCTURE (P.) LTD. [2017] 80 TAXMANN.COM 272 (BOMBAY) (IX) DCIT V. RCP INFRATECH (P.) LTD. [2018] 95 TAXMANN.C OM 163 (RAIPUR - TRIB.) (X) ACIT V. VENKATESHWAR ISPAT (P.) LTD. [2009] 319 ITR 393 (CHHATTISGARH) (XI) CIT V. MISRA PRESERVERS (P.) LTD. [2013] 31 TAXMANN .COM 214 (ALLAHABAD) (XII) AGRAWAL COAL CORPORATION (P.) LTD. V. ADDL. CIT [20 12] 19 TAXMANN.COM 209 (INDORE) (XIII) ACIT V. AMR HOSPITALITY SERVICES LTD [2013] 40 TAXM ANN.COM 96 (HYDERABAD - TRIB.) (XIV) CIT V. PEOPLES GENERAL HOSPITAL LTD. [2013] 35 TAX MANN.COM 444 (MADHYA PRADESH) (XV) CIT V. PEOPLES GENERAL HOSPITAL LTD. [2013] 35 TAX MANN.COM 444 (MADHYA PRADESH) (XVI) CIT VS DOWN TOWN HOSPITALS (P) LTD. (2004) 267 ITR 439 (GAU) (XVII) CIT VS CREATIVE WORLD TELEFILMS LTD. (2011) 333 IT R 100 (BOM.) 15. AS FAR AS THE CONTENTION OF THE ASSESSING OFFIC ER, WHICH HAVE BEEN SUPPORTED BY LD. DR, REGARDING NON-PRODUCTION OF DI RECTORS IS CONCERNED, WE FIND SUBSTANTIAL FORCE IN THE CONTENTION OF THE ASSESSEE ON THIS SCORE THAT THE ASSESSEE COULD AT THE MOST REQUEST THE DIRECTORS OF INVESTOR COMPANIES TO APPEAR BEFORE THE ASSESSING OFFICER, BUT HAS NO POWER TO COMPEL T HEM TO DO SO. THUS, IT WAS FOR THE DEPARTMENT TO ENFORCE THEIR ATTENDANCE AND ON F AILURE TO TAKE ACTION AGAINST THEM AS PER LAW. THUS, IN OUR OPINION, THIS CANNOT BE A VALID GROUND FOR HOLDING THE INVESTMENT MADE BY THE INVESTORS AS NON-GENUINE IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN CIT VS. ORCHID INDUSTR IES (P) LD. (2017) 88 TAXMANN.COM 502, WHERE THE ASSESSEE HAD PRODUCED ON RECORD DOCUMENTS TO ESTABLISH GENUINENESS OF PARTY SUCH AS PAN OF ALL C REDITORS ALONG WITH CONFIRMATION, THEIR BANK STATEMENTS SHOWING PAYMENT OF SHARE APPLICATION MONEY, ONLY BECAUSE THOSE PERSONS HAD NOT APPEARED BEFORE THE ASSESSING OFFICER WOULD NOT NEGATE THE CLAIM OF ASSESSEE. ITA NO. 5120/DEL/2016 13 16. THE LD. DR HAS ALSO RELIED PLETHORA OF JUDGMENT S IN ITS WRITTEN SYNOPSIS AS UNDER : (I). CIT VS. NAVODAYA CASTLE PVT. LTD. (2014) 367 I TR 306 (DEL)(SLP DISMISSED BY HONBLE SUPREME COURT) (II). DRB EXPORTS (P) LTD. VS. CIT(2018) 93 TAXMAN N.COM 490 (CAL.) (III). CIT VS. NIPUN BUILDERS & DEVELOPERS (P) LTD ., 30 TAXMANN.COM 292. (IV). CIT VS. NOVA PROMOTERS & FINLEASE(P) LTD., 1 8 TAXMANN.COM 217. (V). CIT VS. ULTRA MODERN EXPORTS (P) LTD., 40 TAX MANN.COM 458. (VI). CIT VS. FROSTAIR (P) LTD. 26 TAXMANN.COM 11 (VII). CIT VS. NR PORTFOLIO PVT. LTD., 42 TAXAMANN .COM 339 (VIII). CIT VS. EMPIRE BUILTECH (P) LTD., 366 ITR 110. (IX). CIT V. FOCUS EXPORTS (P) LTD. 51 TAXMANN.COM 46 (DEL.) (X). PCIT V. BIKRAM SINGH (ITA NO. 55/2017)(DELHI) (XI). PCIT VS. NDR PROMOTERS PVT. LTD. (ITA NO. 49 /2018)(DELHI) ON GOING THROUGH THE SAME, WE FIND THAT IN THE PECU LIAR FACTS AND CIRCUMSTANCES ATTENDING TO THE PRESENT CASE, AS NARRATED ABOVE, T HE SAID DECISIONS RELIED BY THE LD. DR ARE NOT APPLICABLE, BEING BASED ON DIFFERENT SET OF FACTS. MOST OF THE DECISIONS RELIED BY THE LD. DR HAVE ALSO BEEN RELIE D BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND THE ASSESSEE IN HIS WRITTE N SYNOPSIS HAS GIVEN THEIR DISTINGUISHING FEATURES AS UNDER, WHICH STAND UN-RE BUTTED ON BEHALF OF THE REVENUE BEFORE US : S. NO CITATION FACTS OF THE CASE LAW CITED WHY NOT APPLICABLE TO THE APPELLANT 1 A GOVINDRAJULA MUDALIAR V. CIT [1958] 34 ITR 807 (SC) IN THIS CASE ASSESSEE STATED THAT CERTAIN AMOUNT, WAS GIFTED TO HIM BY HIS FATHER AND SECONDLY, THE PROFITS EARNED IN A PARTNERSHIP CONCERN WHICH CARRIED ON BUSINESS IN ARRACK, IN WHICH T WAS ONLY A BENAMIDAR FOR HIM. BOTH THE FACTS WERE FOUND INCORRECT FACTS ARE NOT EVEN REMOTELY SIMILAR IN THE PRESENT CASE. ITA NO. 5120/DEL/2016 14 2 CIT V. DURGA PRASAD MORE [1971] 82 ITR 540 (SC) IN THIS CASE THE ASSESSEE WAS RECEIVING SOME INCOME. HE SAYS THAT IT IS NOT HIS INCOME BUT HIS WIFE'S INCOME. HIS WIFE IS SUPPOSED TO HAVE HAD TWO LAKHS OF RUPEES NEITHER DEPOSITED IN BANKS NOR ADVANCED TO OTHERS BUT SAFELY KEPT IN HER FATHER'S SAFE. ASSESSEE IS UNABLE TO SAY FROM WHAT SOURCE SHE BUILT UP THAT AMOUNT. HELD THAT THE INCOME TAX AUTHORITIES WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS. FACTS ARE NOT EVEN REMOTELY SIMILAR IN THE PRESENT CASE. 3 CIT V. DAULAT RAM RAWATMULL [1973] 87 ITR 349 (SC) IN THIS CASE ASSESSEE FIRM OBTAINED OVERDRAFT UPON SECURITY OF FIXED DEPOSIT RECEIPT ISSUED IN NAME OF SON OF PARTNER. HELD THAT WHEN DEPARTMENT COULD NOT PROVE THAT RESPONDENT WAS OWNER OF AMOUNT, DESPITE FA CT THAT RECEIPT WAS IN NAME OF SON OF PARTNER, AMOUNT IN QUESTION COULD NOT BE TREATED AS CONCEALED INCOME OF RESPONDENT- FIRM. FACTS ARE NOT . EVEN REMOTELY SIMILAR IN THE PRESENT CASE. 4 CIT V. NOVA PROMOTERS & FINLEASE (P.) LTD. [2012] 342 ITR 169/206 TAXMAN 207/18 TAXMANN.CO M 217 ASSESSING OFFICER ISSUED SUMMONS TWO PERSONS AND THE AO ALSO ISSUED SUMMONS TO SOME OTHER COMPANIES. THERE WAS NO RESPONSE TO THOSE SUMMONS, WHICH WERE SERVED AND MANY OF THEM HAD BEEN RETURNED UNSERVED. IN THE PRESENT CASE, THERE DOES NOT EXIST ANY ENQUIRY MADE BY THE LD. ASSESSING OFFICER BY ISSUE OF SUMMONS UNDER SECTION 131 OF THE INCOME TAX ACT, EITHER TO THE ASSESSEE OR TO THE ANY OF THE DIRECTORS OF INVESTING COMPANIES. THE LD. ASSESSING OFFICER DID NOT 5 CIT V. NIPUN BUILDERS & DEVELOPERS (P.) LTD. [2013] 350 ITR 407/214 TAXMAN429 (DELHI) THE ASSESSING OFFICER ISSUED SUMMONS TO THE SUBSCRIBER COMPANIES WHICH WERE RETURNED UNSERVED WITH REMARK THAT NO SUCH COMPAN Y EXIST. THE INSPECTORS WERE ALSO SENT FOR VERIFICATION OF THE ADDRESS OF THE ABOVE COMPANIES WHO ALSO CONFIRMED THE SAME. NO INQUIRY INTO THE INVESTING COMPANIES. IN THE PRESENT CASE THERE IS NO ENQUIRY MADE BY THE LD. ASSESSING OFFICER BY ISSUE SUMMONS U NDER SECTION 131 OF THE INCOME TAX ACT OR ISSUING ENQUIRY LETTER UNDER SECTION 133 (6) OF THE INCOME TAX ACT TO THE INVESTING COMPANIES. ITA NO. 5120/DEL/2016 15 6 CIT V. N.R. PORTFOLIO (P.) LTD. [2014] 222 TAXMAN 157/42 TAXMANN.CO M 339 (DELHI) IN THIS CASE THE SUBSCRIBERS BELONGED TO A GROUP OF ENTRY OPERATORS, WHICH INCLUDED 51 COMPANIES/PERSONS, WHO WERE OPERATING MORE THAN 100 BANK ACCOUNTS IN DIFFERENT BANKS/BRANCHES. THEIR MODUS OPERANDI WAS TO PROVIDE ACCOMMODATION ENTRIES TO DIFFERENT PERSONS/BENEFICIARIES. IN THE PR ESENT CASE NO SUCH FACTS ARE PUT ON RECORD THAT INVESTOR COMPANIES BELONG TO A GROUP, OR THAT ANY KIND OF ACCOMMODATION ENTRY WAS PROVIDED. FURTHER, SUMMONS ON DIRECTORS OF 8 COMPANIES WERE SERVED AND ALL THE 11 COMPANIES HAD MADE COMPLIANCES. 7 CIT V. FOCUS EXPORTS P LTD. [2014] 51 TAXMANN.CO M 46 (DELHI) IN THIS CASE ADDRESS AND PAN WERE NOT PROVIDED FOR ALL PARTIES WHEREAS IN CASE OF SOME OF SHARE APPLICANTS, THERE WERE TRANSACTIONS OF DEPOSITS AND IMMEDIATE WITHDRAWALS OF MONEY. IN THE PRESENT CASE ID . AO ACCEPTS THAT THE DETAILS ABOUT ADDRESS AND PAN WERE PROVIDED. FURTHER THERE IS NO FINDING THAT THERE WAS IMMEDIATE WITHDRAWAL OF MONEY. 8 SUMATI DAYAL V. CIT 214 ITR 801 (CAL.) IN THIS CASE EXPLANATION FURNISHED BY THE ASSESSEE IS CONSIDERED PRACTICALLY IMPROBABLE TO HAPPEN LIKE PURCHASING THREE WINNING TICKETS CONSEQUENTLY FOR EARNING JACKPOT NO SUCH IMPROBABLE CIRCUMSTANCES OR HAPPENING IS POINTED BY LD. AO 9 CIT V. L.N. DALMIA 207 ITR 89 (CAL.) IN THIS CASE ASSESSEE HAVING ACQUIRED CONTROLLING INTEREST IN A COMPANY, SOLD SHARES OF THAT COMPANY AT LOWER RATE TO A COMPANY FORMED BY HIMSELF - TRANSACTION OF SALE WAS MADE ON CREDIT AND THERE WAS NO POSITIVE PROOF THAT PURCHASING COMPANY HAD SUFFICIENT FUNDS TO ACQUIRE SAID SHARES - FOR M ONEY BORROWED FOR ACQUISITION OF SHARES, ASSESSEE WAS PAYING HUGE INTEREST WITHOUT ANY EARNING THEREFROM AND ASSET ITSELF WOULD BE DISPOSED OF WITHOUT GETTING ANY PAYMENT FOR ALLEGED SALE OF SHARES FROM PURCHASING COMPANY WAS HELD THAT IT WAS MERELY A PAPER TRANSFER FACTS ARE NOT EVEN REMOTELY SIMILAR IN THE PRESENT CASE. 10 SUNIL SIDDHARTHBH AI V. CIT [1985] 156 ITR 507/23 TAXMAN 14W (SC) IN THIS CASE IT WAS HELD THAT ON PARTNER'S BRINGING IN HIS CAPITAL ASSET INTO PARTNERSHIP AS CAPITAL CONTRIBUTION, NO CONSIDERATION IS RECEIVED BY PARTNER WITHIN MEANING OF SECTION 48, NOR DOES ANY PROFIT OR GAIN ACCRUE TO HIM IN COMMERCIAL SENSE, AND, THEREFORE, NO CAPITAL GAIN CHARGEABLE UNDER SECTION 45 ARISES FACTS ARE NOT EVEN REMOTELY SIMILAR IN THE PRESENT CASE. ITA NO. 5120/DEL/2016 16 11 MITTAL BELTING AND MACHINERY STORES V. CIT 253 ITR 341 (P&H) IN THIS CASE ASSESSEE PURCHASED A TRUCK IN RELEVANT ASSESSMENT YEAR FOR RS. 2 LAKHS. WITHIN A WEEK OF PURCHASING, AMOUNT OF RS. 2 LAKHS HAD COME BACK TO ASSESSEE AND AFTER SOME TIME TRUCK WAS ALSO TRANSFERRED TO BROTHER OF SELLER. IT WAS HELD THAT THERE IS NO GENUINE TRANSACTION BETWEEN PARTIES AND THERE IS A PURE PAPER TRANSACTION ONLY, DEPRECIATION IN RESPECT OF SUCH ASSET WOULD NOT BE ALLOWED. FACTS ARE NOT EVEN REMOTELY SIMILAR IN THE PRESENT CASE. 12 ME DOWELL & CO. 154 ITR 148 (SC) IN THIS CASE SALES TAX WAS PAID BY APPELLANT TO SALES TAX AUTHORITIES ON BASIS OF TURNOVER WHICH EXCLUDED EXCISE DUTY. IT WAS HELD THAT EXCISE DUTY WHICH WAS PAYABLE BY APPELLANT BUT HAD BEEN PAID BY BUYER WAS ACTUALLY A PART OF TURNOVER OF APPELLANT AND WAS, THEREFORE, LIABLE TO BE SO INCLUDED FOR DETERMINING LIABILITY TO SALES TAX. FACTS ARE NOT EVEN REMOTELY SIMILAR IN THE PRESENT CASE. 13 CIT V. BIJU PATNAIK 160 ITR 674 (SC) IN THIS CASE ITO HELD THAT SHARE S PURCHASED BY CERTAIN PERSONS IN A COMPANY OF ASSESSEE'S GROUP ACTUALLY BELONGED TO ASSESSEE AS THEY WERE HIS BENAMIDARS. TRUST WAS ALLEGED TO HAVE BEEN CREATED THROUGH DONATION BUT THERE WAS NO EVIDENCE AS TO WHO WERE DONORS. TRIBUNAL DELETED ADDITIONS M ADE BY ITO. IT WAS HELD THAT A QUESTION OF LAW AROSE. FACTS ARE NOT EVEN REMOTELY SIMILAR IN THE PRESENT CASE. 14 ITO V. K. JAYARAMAM [1987] 168 ITR 757 (MAD.) IN THIS CASE IT WAS HELD THAT WHERE AN ASSESSEE OR A PARTY BEFORE THE ITO OR OTHER AUTHORITIES UNDER THE ACT RELIES IN SUPPORT OF HIS CLAIM ON A WILL OR FOR THAT MATTER ON ANY OTHER DOCUMENT, IT IS NOT OBLIGATORY ON THE AUTHORITIES TO ACCEPT THESE DOCUMENTS WITHOUT ANY INQUIRY. THE AUTHORITIES ARE BOUND TO GO INTO THE QUESTION AS TO WHETHER THEY SHO ULD OPEN THE DOCUMENT PRODUCED BEFORE THEM. THIS WOULD NECESSARILY IMPLY AN INQUIRY INTO THE GENUINENESS OR OTHERWISE OF THE DOCUMENT, IF NECESSARY. FACTS ARE NOT EVEN REMOTELY SIMILAR IN THE PRESENT CASE. ITA NO. 5120/DEL/2016 17 15 CIT V. NEELKANTH ISPAT UDYOG PVT. LTD. ITA NO. 427/2012 (DELHI) IN THIS CASE THE AMOUNTS WERE GIVEN BY MUKESH GUPTA AND HIS ASSOCIATES, A GROUP OF ENTRY OPERATORS. THESE NOTICES WERE EITHER NOT COMPLIED WITH OR RETURNED WITH THE REMARK 'LEFT'. MUKESH GUPTA, RANJAN JASSAL ETC STATED THAT THEY WERE ACCO MMODATION ENTRY PROVIDERS. THE AMOUNT IS DEPOSITED IN CASH AND THEN ROUTED THROUGH THE MULTIPLE ACCOUNTS. FACTS ARE DIFFERENT, THERE IS NO EVIDENCE OF ANY ENTRY OPERATOR IN THE PRESENT CASE. ALL THE SUMMONS AND NOTICES HAVE BEEN COMPLIED AND REPLIES SUBMIT TED. NO CASH IS DEPOSITED IN THE ACCOUNT OF INVESTORS. THE CASE LAW IS NOT APPLICABLE. 16 BISAKHA SALES (P.) LTD. V. CIT [2014] 52 TAXMANN.CO M 305 (KOLKATA - TRIB.) IN THIS CASE ASSESSEE - COMPANY RECEIVED SHARE APPLICATION MONEY WITH HUGE SHARE PREMIUM FROM CORPORATE ENTITIES, MERELY BECAUSE SAID AMOUNT WAS RECEIVED THROUGH BANKING CHANNEL, ASSESSING OFFICER WAS NOT JUSTIFIED IN ACCEPTING SAID TRANSACTIONS AS GENUINE WITHOUT MAKING PROPER ENQUIRIES AND, THEREFORE, IMPUGNED REVISIONAL ORDER PASSED BY COMM ISSIONER SETTING ASIDE ASSESSMENT WAS TO BE UPHELD. THIS WAS A CASE OF DIRECTING AO TO ENQUIRE INTO INVESTING COMPANIES AND NOT A CASE WHERE ADDITION WAS UPHELD. THE LD. AO COULD NOT FIND ANYTHING SUBSTANTIVE AGAINST THE ASSESSEE. IN VIEW OF AFORESAID DISCUSSION, THE ADDITION MADE U/S. 68 IN RESPECT OF 10 UNRELATED INVESTOR COMPANIES, AS NOTED ABOVE, IS NO T FOUND JUSTIFIED AT ALL. 17. REGARDING THE INVESTMENT MADE BY HI-FI INFOTECH , THE LD. AR HAS CONTENTED THAT IT IS A GROUP COMPANY HAVING THREE COMPANIES A S SHARE HOLDERS, NAMELY GEEMAD PROMOTERS PVT. LTD., HIGHTECH VALUATION CONS ULTANT AND M/S. WIZARD DEVELOPERS PVT. LTD. AND THE FUND RECEIVED AS SHARE CAPITAL FROM THESE THREE COMPANIES BY HI FI INFOTECH WAS INVESTED INTO ASSES SEE COMPANY. THE INVESTMENT MADE IN M/S. HI-FI INFOTECH HAS BEEN ACC EPTED BY THE ASSESSING OFFICER OF THAT COMPANY AND THEREFORE, THERE IS NO VALID REASON TO DOUBT THE INVESTMENT MADE BY M/S. HI-FI INFOTECH INTO THE ASS ESSEE COMPANY. THE LD. AR OF THE ASSESSEE HAS PRODUCED COPY OF ORDER PASSED U/S. 143(3) IN THE CASE OF THIS INVESTOR COMPANY, WHICH WAS ALSO STATED TO HAVE BEE N SUBMITTED BEFORE THE ITA NO. 5120/DEL/2016 18 ASSESSING OFFICER. IN PRESENCE OF THESE FACTS, ONCE THE INVESTMENT IN THE SAID COMPANY STANDS ACCEPTED BY THE REVENUE AUTHORITIES, IT IS NOT JUSTIFIED TO DOUBT THE INVESTMENT MADE BY THE SAME COMPANY INTO THE AS SESSEE COMPANY ON THE BASIS OF SUSPICION AND PRESUMPTION OF BOGUS SHARE C APITAL. THE CONTENTIONS OF THE ASSESSEE COULD NOT BE CONTROVERTED ON BEHALF OF THE REVENUE. WE, THEREFORE, ARE OF THE OPINION, THAT THE LD.CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE U/S. 68 WITH RESPECT TO THIS COMPANY. 18. IN VIEW OF THE ABOVE DISCUSSION, WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) WHILE DELETING THE IMPUGNED ADDITION. ACCORDINGLY, THE APPEAL OF THE REVENUE DE SERVES TO BE DISMISSED. 19. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.02.2019. SD/- SD/- (BHAVNESH SAINI) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15.02.2019 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI ITA NO. 5120/DEL/2016 19 DATE 1. DRAFT DICTATED (D IRECTLY ON COMPUTER ) 08.02.19 PS 2. DRAFT PLACED BEFORE AUTHOR 12.02.19 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. ORDER UPLOADED ON PS/SR PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.