ITO 5(1)(2), MUMBAI V. GENESIS TRADING P. LTD, MUMBAI

ITA 5332/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3259 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Department
• Bench Allotted: G
• Next Hearing Date: 28-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 22-08-2014
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Assessee Lawyers: N R AGRAWAL
• Keywords: Bogus Share capital; Unexplained investment; Income from undisclosed sources; Search and seizure; Share purchase agreement; Source of fund; Capital receipt
• Section: 143(3); 131; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAMLAL NEGI , JM ./ ITA NO. 5332 TO 5334 / MUM/20 1 4 ( / ASSESSMENT YEAR : 200 5 - 06 TO 20 07 - 08 ) ITO - 5(1)(2), MUMBAI VS. M/S GENESIS TRADING PVT. LTD., OCEANIC, 3 RD FLOOR, FLAT NO.34, RAJAB ALI ROAD, MUMBAI - 400026 ./ ./ PAN/GIR NO. : A ACCG 1820 B ( / APPELLANT ) .. ( / RESPONDENT ) AND CROSS OBJECTION N O. 40 / MUM/20 1 6 (ARISING OUT OF ITA NO.5334/MUM/2014) ( / ASSESSMENT YEAR : 2007 - 08 ) M/S GENESIS TRADING PVT. LTD., OCEANIC, 3 RD FLOOR, FLAT NO.34, RAJAB ALI ROAD, MUMBAI - 400026 VS. ITO - 5(1)(2), MUMBAI ./ ./ PAN/GIR NO. : A ACCG 1820 B ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI S.K.BEPARI /ASSESSEE BY : SHRI N.R.AGRAWAL / DATE OF HEARING : 28/04/2016 / DATE OF PRONOUNC EMENT 08/06 / 2016 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEAL S FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - MUMBAI, FOR THE ASSESSMENT YEAR 2005 - 06 TO 2007 - 08, IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S.147 OF THE I.T.AC T. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION. ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 2 2. COMMON GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN ALL THE YEARS UNDER CONSIDERATION. GROUNDS TAKEN IN THE ASSESSMENT YEAR 2005 - 06 READ AS UNDER: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION RS.1,22,00,000/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S.68 OF THE ACT WITHOUT APPRECIATING THE FACTS OF THE CASE ELABORATELY DISCUSSED BY THE AO IN THE ASSESSMENT ORDER U/S.143(3) R.W. S.147 OF THE ACT. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION BY PLACING RELIANCE ON THE DECISION IN THE CASE OF LOVELY EXPORTS PVT. LTD. A S THE FACTS IN THE CASE DIFFER WITH THE LOVEL Y EXPORTS PVT. LTD. 3) THE APPELLANT PRAYS THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THE ORDER OF AO BE RESTORED. 3 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE ACTION U/S.132(1) OF THE A CT WAS CONDUCTED IN CHANDBIBI ZAIDI GROUP OF CASES ON 20.8.2009 AND ON SUBSEQUENT DATES BY D C LT (INV), UNIT - 1(3), MUMBAI. THE ASSESSEE COMPANY WAS INCORPORATED IN MAY 2003 AS A CLOSELY HELD COMPANY OF MS CHANDBIBI ZAIDI. POST SEARCH ENQUIRIES CONDUCTED REG ARDING THE GENUINENESS OF THE SHARE CAPITAL INTRODUCED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE COMPA NY LEAD TO THE ADDITION U/ S 68 OF THE ACT T REATING THE SAM E AS UNEXPLAINED SHARE CAPITAL. THE DETAILS OF THE SUMS INTRODUCED IN THE BOOKS OF ACCOUNT AS INVE STMENT IN SHARES IN RESPECT OF EACH OF THE ASSESSMENT YEARS ARE GIVEN AS UNDER: - F.Y. SHARE CAPITAL SHARE PREMIUM SHARE APPLICATION 2003 - 04 1,00,000 -- 44,00,000 2004 - 05 4,40,000 39,60,000 78,00,000 2005 - 06 -- -- 1,95,00,000 2006 - 07 31,70,000 2,85,30, 000 23,00,000 ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 3 THE ABOVE INVESTMENTS IN THE SHARES ARE MADE BY 30 SHARE HOLDERS WHOSE DETAILS ARE GIVEN IN THE ASSESSMENT ORDER. OUT OF THE SAID 30 SHARE HOLDERS 7 SHARE HOLDERS HAVE GIVEN MUMBAI ADDRESS AND THE SUMMONS WERE ISSUED TO THESE 7 SHARE HOLDERS BY THE DEPUTY DIRECTOR OF INCOME - TAX, INVESTIGATION, MUMBAI IN RESPONSE TO WHICH THE REPLIES WERE RECEIVED ENCLOSING THE BANK ACCOUNTS HELD WITH ABN AMRO BANK, MUMBAI THROUGH WHICH THE TRANSACTIONS HAVE TAKEN PLACE. THE FURTHER ENQUIRIES REVEAL THAT THE S OURCES OF FUNDS FOR THESE 7 PARTIES CAME FROM 2 OTHER ACCOUNTS HELD IN THE NAMES OF 'M / S S.S SECURITIES' AND 'M / S S.S SECURITIES CLIENT ACCOUNT'. THESE ACCOUNTS ARE OPERATED BY ONE SHRI SANJAY KUMAR SARAWGI, WHO IS A MEMBER OF GUWAHATI STOCK EXCHANGE WITH TRADE NAME M / S S.S SECURITIES. THE TRANSFER OF MONEY TO THESE TWO ACCOUNTS IS FLOWING FROM CURRENT ACCOUNT IN THE NAME OF SHRI R.K. PAREKH, PROPRIETOR M / S R.K.P. SECURITIES. THE A.O. ALSO POINTED OUT THAT THE SUMS DEBITED EXACTLY MATCHED WITH THE SUMS CRED ITED IN THE BANK ACCOUNT OF SHRI R.K PAREKH PROP. R.K.P. SECURITIES SUGGESTING THAT THE FLOW OF MONEY FROM ONE ACCOUNT TO THE OTHER WAS ONLY WITH A VIEW TO LAYER THE UNACCOUNTED MONEY OF THE ASSESSEE COMPANY. SUMMONS ISSUED TO THE SHRI R.K. PAREKH WERE RET URNED UNSERVED. THE SOURCES OF FUND TO MLS R.K.P. SECURITIES ORIGINATE FROM THREE ACCOUNTS IN THE NAMES OF (I) MAHALAXMI COMMODITY TRADERS (II) M / S PANCHANAN TRADERS AND (III) MLS VIKASH TRADE & COMMERCE. IT WAS FOUND IN THE ENQUIRY THAT THE ABOVE 3 ACCOUN TS WERE CLOSED IN THE YEAR 2006. THE ENQUIRY CONDUCTED BY THE INSPECTOR IN THE LOCAL ADDRESS GIVEN IN MUMBAI REVEALED THAT THE WHEREABOUTS OF THE SAID PARTIES WERE NOT ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 4 KNOWN TO THE NEIGHBOURS. THE PERMANENT ADDRESS IS LOCATED IN WEST BENGAL. IT IS MENTIONE D IN THE ASSESSMENT ORDER THAT THE INCOME RETURNED BY THE ABOVE MENTIONED 3 PARTIES IS VERY NOMINAL IN COMPARISON TO HUGE TRANSFER OF MONEY. FURTHER ENQUIRIES WERE CONDUCTED TO SHOW THAT THE SOURCES OF MONEY IN THE ABOVE SAID 3 COMPANIES ARE ORIGINATED FRO M 8 OTHER ACCOUNTS MAINTAINED BY 8 DIFFERENT PARTIES AS MENTIONED IN PARAGRAPH NO. 7.17 OF THE ASSESSMENT ORDER. FURTHER ENQUIRIES REVEAL THAT THE FUNDS HAVE FLOWN TO THESE 8 ACCOUNTS FROM 9 OTHER ACCOUNTS MAINTAINED BY 9 DIFFERENT PARTIES AS MENTIONED IN PARAGRAPH NO . 7.18 OF THE ASSESSMENT ORDER. 4. THE INVESTIGATION WING IN GUWAHATI CONDUCTED ENQUIRIES IN RESPECT OF 3 SHARE HOLDERS LOCATED IN GUWAHATI. IT IS MENTIONED IN THE ASSESSMENT ORDER THAT THE SAID 3 SHARE HOLDERS HAVE ONLY FILED REPLIES IN RESPON SE TO THE SUMMONS ISSUED WITHOUT APPEARING IN PERSON THOUGH THE SUMMONS WERE ISSUED REQUESTING FOR PERSONAL APPEARANCE. THE FIELD ENQUIRY CONDUCTED BY THE INSPECTOR OF INCOME - TAX REVEALED THAT THE SAID 3 COMPANIES DID NOT EXIST IN THE ADDRESS GIVEN. SIMILA R ENQUIRES WERE ALSO CONDUCTED IN RESPECT OF 9 SHARE HOLDERS LOCATED IN KOLKATA BY THE INVESTIGATION WING KOLKATA. THE SUMMONS ISSUED RETURNED UNSERVED WITH THE POSTAL REMARK 'NOT KNOWN' IN RESPECT OF 2 SHARE HOLDERS. IN RESPECT OF 7 OTHER SHARE HOLDERS, I T IS MENTIONED IN THE ASSESSMENT ORDER THAT ONLY SUBMISSIONS WERE RECEIVED AND NO ONE APPEARED THOUGH PERSONAL APPEARANCE WAS REQUESTED. THE FIELD ENQUIRIES CONDUCTED BY THE INSPECTOR OF INCOME - TAX REVEALED THAT NO SUCH COMPANIES EXISTED IN THE ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 5 GIVEN ADDRE SSES. IT IS ALSO MENTIONED IN THE ASSESSMENT ORDER THAT THE RETURNED INCOME IS DISPROPORTIONATE TO THE INVESTMENTS MADE BY TH E COMPANIES LOCATED IN KOLKATA. 5. I T IS ALSO MENTIONED IN THE ASSESSMENT ORDER THAT IN THE ABSENCE OF ADVERTISEMENT PUBLISHED OR P ERSONAL SERVICES UTILISED IT IS DIFFICULT TO ACCEPT THAT THE COMPANIES LOCATED IN HOWRAH OR CALCUTTA HAVE MADE HUGE INVESTMENTS IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY IN MUMBAI. THE AO. ALSO MENTIONED THAT THE ASSESSEE COMPANY FAILED TO FURNISH INFOR MATION REGARDING THE BASIS FOR THE DETERMINATION OF VALUE OF SHARE PREMIUM. THE AO. ANALYZED THE RETURNED INCOME DETAILS OF ALL THE SHARE HOLDERS AND HELD THAT THE INCOME RETURNED BY THE SAID SHARE HOLDERS IS DISPROPORTIONATE TO THE INVESTMENTS MADE, DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SUBMITTED BY THE ASSESSEE THAT THE SHARE HOLDERS HAVE SUFFICIENT RESERVES AND SURPLUS TO INVEST IN THE ASSESSEE COMPANY. THE AO. OBSERVED THAT THE HUGE RESERVES AND SURPLUS IS NOTHING BUT SHARE APPLICATION MONE Y AND PREMIUM RECEIVED FROM OTHER COMPANIES. IN VIEW OF THE ENQUIRIES CONDUCTED BY TH E INVESTIGATION WING IN MUMBAI I N COORDINATION WITH THE INVESTIGATION WING AT GUWAHATI AND KOLKATA AS MENTIONED IN PARAGRAPH NOS. 5.2 TO 5.4 ABOVE, THE AO. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS GRANTED OPPORTUNITY TO THE ASSESSEE COMPANY TO PRODUCE THE SHAREHOLDERS FOR EXAMINATION. IT IS MENTIONED IN PARA 7.40 OF THE ASSESSMENT ORDER THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE COMPANY SHRI N R AGARWAL, C.A PROD UCED THE PARTIES FOR VERIFICATION. IN THE ASSESSMENT ORDER THE NAMES OF THE ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 6 PARTIES WHERE THE DIRECTORS OF THE COMPANIES ATTENDED FOR EXAMINATION IS REFERRED TO AS ANNEXURE 'A' AND WHERE THE AUTHORIZED REPRESENTATIVES OF THE SHARE HOLDER COMPANIES ATTENDED WITH THE AUTHORITY LETTER IS REFERRED TO AS ANNEXURE '8'. THE AO. RECORDED THE STATEMENT OF THE SHA REHOLDERS U/S 131 OF THE ACT. I N THE STATEMENTS RECORDED THE SHAREHOLDERS CONFIRMED THE INVESTMENT IN SHARES OF THE ASSESSEE COMPANY. IT IS ALSO MENTIONED T HAT THE SHAREHOLDERS PRODUCED THE COPIES OF THE RETURNS OF INCOME FILED BY THEM, BANK STATEMENTS SHOWING THE RELEVANT TRANSACTIONS AND THE BALANCE SHEET (BOOKS OF ACCOUNT) IN WHICH THE SAID TRANSACTIONS WERE REFLECTED. 6. IN VIEW OF THE ABOVE THE A.O. HEL D THAT THOUGH THE ASSESSEE COMPANY PRODUCED THE SHAREHOLDERS AND THOUGH THE SHAREHOLDERS HAVE CONFIRMED THE INVESTMENTS, HOWEVER, THE ASSESSEE FAILED TO SATISFY THE MOST IMPORTANT 'CONDITION I.E. GENUINENESS OF THE TRANSACTION. .LT IS MENTIONED IN THE ASSE SSMENT ORDER THAT THE ASSESSEE RELIED UPON THE DECISION OF SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS (P) LTD. [216 CTR 195]. THE A.O. DID NOT ACCEPT THE DECISION IN THE CASE OF LOVELY EXPORTS (P) LTD. ON THE GROUND THAT THE DECISION IN THE CASE OF LOVELY 'EXPORTS (P) LTD. AND ALSO IN SOME OTHER CASES RELATE TO PUBLIC LIMITED COMPANY AND HAVE RECEIVED THE SUBSCRIPTION THROUGH THE PUBLIC ISSUE AS PER SEBL'S GUIDELINES WHEREAS THE ASSESSEE COMPANY IS A PRIVATE LIMITED COMPANY. IT IS ALSO MENTIONED THA T THE SHARE APPLICANTS ARE AWARE OF THE EXISTENCE OF THE COMPANY CALLED AS LOVELY EXPORTS (P) LTD.' AND THE SAME CANNOT BE SAID IN THE CASE OF THE ASSESSEE COMPANY. IT WAS ALSO MENTIONED THAT NO INVESTIGATION WAS C ARRIED OUT IN THE CASE OF L O VELY ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 7 EXPORTS (P) LTD., BUT THE INVESTIGATION CARRIED OUT IN THE CASE OF ASSESSEE COMPANY REVEALS THAT THE ASSESSEE FAILED TO DISCHARGE THE BURDEN OF G ENUINENESS OF THE SHARE CAPITAL. ON THE CONTRARY THE AO. HEAVILY RELIED ON THE DECISION OF HON'BLE ITAT, MUMBAI IN THE CASE OF PRATIKSHA MERCANTILE PVT. LTD. I.T.A N O. 2096/M/11 DATED 10.8.2012. THE AO. ALSO RELIED UPON THE DECISION OF HON'BLE ITAT DELHI IN THE CASE OF BEAUTEX INDIA (P) LTD. [34 SOT 465]. THE AO. FINALLY RELIED ON THE D ECISION OF HON'BLE ITAT, DELHI IN TH E CASE OF HERSH W CHADDA VS DCIT [(2011) 43 SOT 544] WHEREIN IT IS HELD THAT IT IS HARD TO UNEARTH DIRECT EVIDENCE OR DEMONSTRATIVE PROOF, CIRCUMSTANTIAL EVIDENCE AND ITS APPRECIATION THEREOF WOULD ACQUIRE IMPORTANCE AND IT IS THE DUTY OF THE REVENUE AUTHO RITIES TO BE MINDFUL OF CLUES AND COINCIDENCES AND BRING INTO THEM TO LOGICAL CONCLUSIONS OTHERWISE CLANDESTINE TAX EVASION THROUGH SHADY ECONOMIC DEALS WILL GO UNDETECTED AND THEREFORE CIRCUMSTANTIAL EVIDENCE AND APPRECIATION THEREOF ACQUIRES GREAT IMPORT ANCE. IN VIEW OF THE ABOVE DISCUSSION THE AO BROUGHT TO TAX THE INVESTMENT IN SHARES AS UNEXPLAINED U/S 68 OF THE A CT. 7. BY THE IMPUGNED ORDER, THE CIT(A) DELETED THE ADDITION SO MADE ON ACCOUNT OF SHARE CAPITAL IN ALL THE 3 YEARS UNDER CONSIDERATION AFTE R OBSERVING AS UNDER : - DECISION: 7 .0 IN GROUND NO. 1 THE APPELLANT CONTESTED ADDITION U / S 68 OF RS.1 ,22,00,000/ - FOR A .Y. 2005 - 06, RS. 1,95,00,000 / 1 - FOR A.Y. 2006 - 07 AND R S. 3,40,00,000/ - FOR AY. 2007 - ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARE CAPI TAL. THE AO. BROUGHT ON RECORD THE INVESTIGATION CARRIED BY THE INVESTIGATION WING, MUMBAI TO SHOW ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 8 THAT THE SHARE CAPITAL IN RESPECT OF 7 OUT OF 30 SHARE HOLDERS HAVE BEEN ROUTED FROM ONE COMPANY TO THE OTHER AND SINCE THE FUND HAS BEEN FLOWING FROM ONE CO MPANY TO THE OTHER THE AO CAME TO THE CONCLUSION THAT THE UNACCOUNTED INCOME OF THE APPELLANT COMPANY HAS BEEN LAYERED THROUGH THE ABOVE MEN TIONED COMPANIES. THE AO BROUGHT ON RECORD THE INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING AT GUWAHATI TO SH O W THAT 3 OUT 30 SHARE HOLDERS ARE NOT IN EXISTENCE SINCE THE REPORT OF THE INSPECTOR WHO CONDUCTED THE FIELD ENQUIRY MENTIONS THAT NONE OF THE THREE COMPANIES EXISTED IN THE ADDRESS GIVEN. SIMILAR ENQUIRES CONDUCTED IN RESPECT OF 9 SHARE HOLDERS LOCATED I N KOLKATA BY THE INVESTIGATION WING KOLKATA ALSO REVEAL THAT THE PARTIES ARE NOT EXISTING IN THE ADDRESS GIVEN THOUGH REPLIES HAVE BEEN RECEIVED FROM 7 SHARE HOLDERS. 7.1 THE ASSESSMENT ORDER CAN BE DIVIDED INTO TWO PARTS, THE FIRST PART OF THE ASSESSMEN T ORDER BRINGS OUT THE INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING AND THE SECOND PART OF THE ASSESSMENT ORDER MENTIONS ABOUT THE ENQUIRIES CONDUCTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS MENTIO NED IN PARAGRAPH NO. 7.40 OF THE ASSESSMENT ORDER THE APPELLANT COMPANY PRODUCED THE SHARE HOLDERS FOR EXAMINATION BY THE AO. AND THE AO. RECORDED THEIR STATEMENTS U/S 131 OF THE ACT. SINCE THE SHARE HOLDERS HAVE BEEN PRODUCED DURING THE COURSE OF ASSESSME NT PROCEEDINGS ANY REFERENCE TO THE EARLIER ENQUIRY CONDUCTED BY THE INVESTIGATION WING STATING THAT THE SHARE HOLDERS COULD NOT BE LOCATED IS OF LITTLE - CONSEQUENCE. THESE PERSONS HAVE APPEARED BEFORE THE AO. THEREBY ESTABLISHING THEIR IDENTITY BEFORE TH E AO. IN THE STATEMENT RECORDED U/S131 OF THE ACT ALL PERSONS HAVE CONFIRMED THAT THEY HAVE INVESTED IN THE SHARES OF THE APPELLANT COMPANY. IN SUPPORT OF THEIR ASSERTION THEY ALSO PRODUCED COPIES OF THE RETURNS OF INCOME FILED, BANK STATEMENTS SHOWING THE RELEVANT TRANSACTIONS AND THE BALANCE SHEET IN WHICH THE SAID TRANSACTIONS ARE REFLECTED. IN SUCH CIRCUMSTANCES I AM OF THE VIEW THAT THE DECISIONS IN THE CASE OF LOVELY EXPORTS (P) LTD. 216 CTR 195 AND STELLER INVESTMENTS LTD. 115 TAXMAN 99 BY TH E HON'BL E SUPREME COURT OF INDIA ARE APPLICABLE IN THE CASE OF APPELLANT. 7 .2 I IS HELD IN THE CASE OF LOVELY EXPORTS (P) LTD. THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY ASSESSEE COMPANY FROM THE ALLEGED BOGUS SHARE HOLDERS WHOSE A E GIVEN TO THE AO. THE N THE DEPARTMENT IS FREE TO PROCEED TO RE - OPEN THEIR AL ASSESSMENTS IN ACCORDANCE WITH LAW BUT THIS AMOUNT OF SHARE MONEY CANNOT BE REGARDED AS UNDISCLOSED INCOME U/S 68 OF THE APPELLANT COMPANY. IN THE ASSESSMENT ORDER THE AO MENTIONED THAT THE SAID DECIS ION IS NOT APPLICABLE. ONE OF THE G ROUNDS ON WHICH THE AO REFUSED TO ACCEPT THE SAID DECISION IS THAT IT WAS RENDERED IN A CASE RELATING TO PUBLIC LIMITED COMPANY WHEREAS THE CASE OF APPELLANT IS PRIVATE LIMITED COMPANY. IN THIS REGARD IT IS CLARIFIED THAT THE OBSERVATION OF THE A.O. IS NOT CORRECT AS THE NAME LOVELY EXPORTS (P) LTD. COMPRISES ACRONYM (P) LTD., WHICH MEANS PRIVATE LIMITED COMPANY ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 9 AND THE DECISION OF SUPREME COURT WAS RENDERED ONLY IN THE CASE OF A PRIVATE LIMITED COMPANY AND THEREFORE I AM OF THE VIEW THAT THE SAID DECISION IS APPLICABLE IN THE CASE OF APPELLANT. THE ANOTHER REASON GIVEN BY THE A.O IS THAT IN THE CASE OF LOVELY EXPORTS (P) LTD. NO INVESTIGATION WAS CARRIED BY THE A.O. WHEREAS IN THE CASE OF THE APPELLANT COMPANY THE INVESTIG ATION CARRIED OUT SHOWS THAT THE UNACCOUNTED INCOME OF THE APPELLANT COMPANY HAS BEEN LAYERED THROUGH MANY COMPANIES WHOSE EXISTENCE IS QUESTIONABLE. THE A.O'S RELIANCE THAT NO INVESTIGATION WAS CARRIED OUT BY THE A.O. IN THE CASE OF LOVELY EXPORTS (P) LTD . IS NOT SIGNIFICANT TO THE FINDING OF THE SUPREME COURT WHICH SIMPLY HELD THAT IN THE CASE OF ALLEGED BOGUS SHARE HOLDERS WHOSE NAMES ARE GIVEN TO THE A.O. THEN THE DEPARTMENT IS FREE TO PROCEED TO RE - OPEN THE INDIVIDUAL ASSESSMENTS. 7.3 THE A.O'S RELIA NCE ON THE DECISION OF ITAT, MUMBAI IN THE CASE OF PRATIKSHA MERCANTILE (P) LTD. IS NOT APPLICABLE TO THE FACTS OF THE APPELLANT'S CASE. IN THE CASE OF M/S.PRATIKSHA MERCANTILE (P) LTD., THE INVESTIGATION CARRIED OUT SHOW THAT THE GENUINENESS OF THE TRANSA CTION WAS NOT PROVED. SHRI PARESH MAHAJAN, DIRECTOR OF THE ASSESSEE COMPANY M/S.PRATIKSHA MERCANTILE (P) LTD. ADMITTED THAT HE HAS BEEN MADE DIRECTOR FOR MEAGER CHARGES AND WAS NOT HAVING ANY KNOWLEDGE OF THESE T RANSACTIONS. HE ALSO STATED THAT VARIOUS TRA NSACTIONS WERE MERE ENTRIES AND NOT REAL T RANSACTIONS AND THESE TRANSACTIONS ARE BACKED BY CASH RECEIPTS AND CASH PAYMENTS FOR VARIOUS ENTRIES. THEREFORE, THE ITAT HELD THAT SINCE THE GENUINENESS OF THE TRANSACTION WAS NOT ESTABLISHED IN THE CASE OF PRATIK SHA MERCANTILE (P) LTD THE CASE WAS DISTINGUISHED FROM THAT OF LOVELY EXPORTS (P) LTD. IN THE CASE OF THE APPELLANT COMPANY NO STATEMENTS HAVE BEEN BROUGHT ON RECORD TO SHOW THAT THE TRANSACTIONS ARE NOT GENUINE. THE ENQUIRIES CONDUCTED IN RESPECT OF 7 SHA RE HOLDERS ONLY SHOWS THAT THE FUNDS HAVE FLOWN FROM ONE COMPANY TO THE OTHER COMPANY AND THE INCOME RETURNED BY THE SAID COMPANIES IS NO T MATCHING WITH THE THE INVESTMENTS MADE. THE FINDING OF THE ENQUIRY IS NOT SUFFICIENT TO HOLD THAT THE ABOVE MENTIONED COMPANIES ARE MERE ENTRY PROVIDERS. THERE IS NO STATEMENT TO THIS EFFECT. THERE IS NO CASH DEPOSIT PRIOR TO TRANSFER OF FUNDS. EXCEPT IN THE CASE OF ACCOUNT HELD BY SHRI R.K PAREKH NOTHING IS BROUGHT ON RECORD TO SHOW THAT THE DEBIT AMOUNTS ARE MATCHING W ITH THE CREDIT AMOUNTS. IF THE SOURCE FOR SHRI R.K PAREKH IS DOUBTED THE SAME WILL BE AN ISSUE IN HIS CASE AND NOT IN THE CASE OF THE APPELLANT. IF SHRI R.K PAREKH IS PROVED TO BE NOT IN EXISTENCE THEN HE BEING THE FIRST SOURCE FOR THE DEPOSITS IN THE NAME S OF M/S S.S.SECURITIES AND M/ S S.S.SECURITIES CLIENT ALC WHICH ARE OPERATED BY SHRI SANJAY KUMAR SARAWGI WHO IS THE MEMBER OF GAWAHATI STOCK EXCHANGE, FURTHER INVESTIGATION COULD HAVE BEEN CARRIED OUT IN RESPECT OF THESE TWO ACCOUNTS AND SHRI SANJAY KUMAR SARAWGI TO KNOW ABOUT THE GENUINENESS OF THE TRANSACTION. NO EFFORTS WERE MADE TO LOCATE OR RECORD THE STATEMENT OF SHRI SANJAY KUMAR SARAWGI. THERE IS NO FINDING AS TO THE AVAILABILITY OF SHRI SANJAY KUMAR SARAWGI. SINCE SHRI SANJAY KUMAR SARAWGI IS THE MEMBER ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 10 OF GAWAHATI STOCK EXCHANGE, HE MUST HAVE BEEN AVAILABLE FOR VERIFICATION. IF THE SOURCE OF FUNDS IN HIS CASE WAS DOUBTED, THEN IT IS A MATTER OF INVESTIGATION IN THE CASE OF SHRI SANJAY KUMAR SARAWGI AND NOT IN THE CASE OF APPELLANT. AS FOR AS THE A PPELLANT COMPANY IS CONCERNED, ALL THE SHARE HOLDERS HAVE BEEN PRODUCED BEFORE THE AO. AND THEY HAVE ADMITTED TO BE THE GENUINE SHARE HOLDERS AND IN SUPPORT PRODUCED THE RETURN OF INCOME FILED, BANK STATEMENTS AND THE BALANCE SHEET. THE INVESTIGATION WHICH LEAD TO THE EXAMINATION OF SOURCE OF SOURCE ONLY RAISES DOUBTS ABOUT THE GENUINENESS OF THE TRANSACTION IN VIEW OF TRANSFER OF FUNDS INVOLVING MULTIPLE COMPANIES, HOWEVER, NOTHING HAS BEEN ESTABLISHED SHOWING THAT THE TRANSFER OF FUNDS ARE MERE ACCOMMODAT ION ENTRIES AND NOT GENUINE TRANSFER OF FUNDS. THE SUSPICION CANNOT REPLACE EVIDENCE; THEREFORE, THE DECISION IN THE CASE OF PRATIKSHA MERCANTILE (P) LTD IS DISTINGUISHED. 7.4 THE DECISION IN THE CASE OF BEAUTEX (I) P LTD. 34 SOT 465 BY ITAT DELHI IS ALS O NOT APPLICABLE TO THE FACTS OF THE APPELLANT COMPANY. IN THE CASE OF BEAUTEX (I) P. LTD. THE ASSESSEE HAD NOT PRODUCED 6 OF ITS SHARE HOLDERS FOR VERIFICATION AND TWO SHARE HOLDERS DENIED OF HAVING INVESTED ANY SHARE IN THE COMPANY. THE SIGNATURE APPEARI NG ON THE CONFIRMATION FILED BY THE ASSESSEE AND AFFIDAVIT ARE FORGED AND FABRICATED. ALL TR ANSACTIONS IN BANK BY WAY OF CIRCULAR ENTRIES, IDENTITY OF SHARE HOLDERS NOT PROVED. IN THESE CIRCUMSTANCES, IT WAS HELD THAT THE SHARE HOLDERS ARE NOT IN EXISTENCE AND ACCORDINGLY THE SHARE CAPITAL WAS BROUGHT TO TAX U/S 68 OF THE ACT BUT IN THE CASE OF THE APPELLANT COMPANY THE SHARE HOLDERS APPEARED BEFORE THE A.G. AND CONFIRMED THE SHARE INVESTMENTS IN THE APPELLANT COMPANY AND THE SAME WAS SUPPORTED BY COPIES OF BANK ACCOUNT, BALANCE SHEET, RETURNS OF INCOME ETC. THE FACTS ARE NOT SIMILAR. 7.5 THE LEGAL POSITION REGARDING THE ASSESSMENT OF BOGUS SHARE CAPITAL HAS BEEN LAID OUT IN THE FOLLOWING JUDGEMENTS: 7.5.1 THE SUPREME COURT IN THE CASE OF STELLER INVESTM ENTS LTD. 115 TAXMAN 99 DISMISSED THE SLP THEREBY UPHOLDING THE DECISION OF THE DELHI HIGH COURT WHICH HELD THAT EVEN IF IT BE ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL WERE NOT GENUINE, NEVERTHELESS, UNDER NO CIRCUMSTANCES, COULD THE AMO UNT OF SHARE CAPITAL BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. IT WAS HELD THAT IT MIGHT BE THAT THERE WERE SOME BOGUS SHAREHOLDERS IN WHOSE NAMES SHARES HAD BEEN ISSUED AND THE MONEY MIGHT HAVE BEEN PROVIDED BY SOME OTHER PERSONS AND IF THE ASSES SMENT OF THE PERSONS WHO ALLEGED TO HAVE REALLY ADVANCED THE MONEY WAS SOUGHT TO BE REOPENED, THAT WOULD HAVE MADE SOME SENSE BUT THERE WAS NO REASON WHY THIS AMOUNT OF INCREASED SHARE CAPITAL COULD BE ASSESSED IN THE HANDS OF THE COMPANY ITSELF. 7.5.2 I T IS HELD IN THE CASE OF LOVELY EXPORTS (P) LTD. THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY ASSESSEE COMPANY FROM THE ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 11 ALLEGED BOGUS SHARE HOLDERS WHOSE NAMES ARE GIVEN TO THE A. O . THEN THE DEPARTMENT IS FREE TO PROCEED TO RE - OPEN THEIR INDIVIDUAL A SSESSMENTS IN ACCORDANCE WITH LAW BUT THIS AMOUNT OF SHARE MONEY CANNOT BE REGARDED AS UNDISCLOSED INCOME U/S 68 OF THE APPELLANT COMPANY. THE BOMBAY HIGH COURT IN THE CASE OF CREATIVE WORLD TELEFILMS LTD., 333 ITR 100 ALSO FOLLOWED THE ABOVE DECISION OF S UPREME COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD. IT WAS HELD BY THE BOMBAY HIGH COURT THAT THE ASSESSING OFFICER OUGHT TO HAVE FOUND OUT THE DETAILS OF SHARE HOLDERS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS SO AS TO REACH THEM. 7 .5.3 THE DELHI HIGH COURT (FULL BENCH) IN THE CASE OF SOPHIA FINANCE LTD 205 ITR 98 HELD THAT IF THE SHAREHOLDERS ARE IDENTIFIED AND IT IS ESTABLISHED THAT THEY HAVE INVESTED MONEY IN THE PURCHASE OF SHARES THEN THE AMOUNT RECEIVED BY THE COMPANY WOULD BE REGARDED AS A CAPITAL RECEIPT AND TO THAT EXTENT THE OBSERVATIONS IN THE CASE OF STELLAR INVESTMENT LTD. [1991] 192 ITR 287 (DELHI), ARE CORRECT BUT IF, ON THE OTHER HAND, THE ASSESSED OFFERS NO EXPLANATION AT ALL OR THE EXPLANATION OFFERED IS NOT SATISFAC TORY THEN THE PROVISION OF SECTION 68 MAY BE INVOKED. 7.6 THE LEGAL PROPOSITION WHICH COMES OUT OF THE ABOVE DECISIONS IS THAT WHERE THE SHARE HOLDER IS IDENTIFIED AND THE SHARE HOLDER CONFIRMS THE INVESTMENT IN SHARES, THEN ANY ASSESSMENT RELATING TO SU CH INVESTMENT CAN ONLY BE MADE IN THE CASE OF SHARE HOLDER HIMSELF OR ITSELF AND NOT IN THE CASE OF THE ASSESSEE COMPANY, BUT, IN A CASE WHERE THE SHARE HOLDER IS NOT IN EXISTENCE OR THE ASSESSEE OFFERS NO EXPLANATION THEN THE SAME WILL BE BROUGHT TO TAX A S UNEXPLAINED SHARE CAPITAL IN THE CASE OF ASSESSEE COMPANY U/S.68 OF THE ACT. THIS RULE IS EQUALLY APPLICABLE FOR BOTH PUBLIC LIMITED COMPANY AS WELL AS THE PRIVATE LIMITED COMPANY THOUGH IN THE CASE OF PRIVATE LIMITED COMPANY, THE ONUS OF PROVING THE GEN UINENESS OF THE CREDITS IN THE BOOKS OF ACCOUNT IN THE NAME OF SHARE CAPITAL IS HIGHER IN COMPARISON TO THE PUBLIC LIMITED COMPANY WHICH IS MONITORED BY STOCK EXCHANGE AND SEBI. IN THE CASE OF APPELLANT COMPANY, THE SHARE HOLDERS HAVE APPEARED BEFORE THE A O AND PRODUCED THE BANK ACCOUNTS AND THE BALANCE SHEET AND A COPY OF THE RETURN OF INCOME FILED TO PROVE THE REAL NATURE OF THE TRANSACTION. THE APPELLANT DISCHARGED THE ONUS CASTE UPON IT. THE ENQUIRIES RELATING TO SOURCE OF SOURCE IN RESPECT OF SHARE HOL DERS ALSO DID NOT PROVE THE CASE OF THE DEPARTMENT THAT THEY ARE MERE ACCOMMODATION ENTRY PROVIDERS AS IN THE CASE OF M/S.PRATIKSHA MERCANTILE (P) LTD. IF THE AO FINDS THAT THE SOURCE FOR ANY PERSON IN THE CHAIN OF INVESTIGATION CONDUCTED ABOUT SOURCE OF S OURCE IS NOT GENUINE, IT WOULD BE APPROPRIATE FOR HIM TO TAKE ACTION IN THAT CASE BUT NOT IN THE CASE OF THE APPELLANT. 7.7 IN VIEW OF THE LEGAL POSITION AND FACTS AS MENT IONED ABOVE THE ADDITION MADE OF RS.1, 22,00,000 / - FOR AY. 2005 - 06, RS. 1,95,00,000 / - FOR AY. 2006 - 07 AN D RS.3,40,00,000/ - FOR ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 12 A.Y.2007 - 08 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARE CAPITAL U/S.68 OF THE ACT ARE HEREBY DELETED. 8. AGAINST THE ABOVE ORDER OF CIT(A), REVENUE IS IN FURTHER APPEAL BEFORE US. 9. WE HAVE CONSIDERED RIVAL CON TENTIONS AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO DELIBERATED THE RATIO LAID DOWN IN THE JUDICIAL PRONOUNCEMENTS REFERRED BY LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS CITED BY LD. AR AND LD. DR DURING THE COURSE OF HEARI NG BEFORE US IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE AND FOUND FROM THE RECORD THAT ALL THE SHAREHOLDERS IN RESPECT OF WHICH ADDITION WAS MADE BY AO U/S.68 HAD PRODUCED BOOKS OF ACCOUNTS IN PROCEEDINGS U/S.131. THEY HAD ALSO FILED THEIR BALANCE SHEET, NET WORTH STATEMENT ETC. WE FOUND THAT SOURCE IN THE HANDS OF ALL THE SHAREHOLDERS WERE ALSO PROVED BY AO HIMSELF AS PER HIS OBSERVATION IN PARA 7.4 OF HIS ORDER. DEPOSITS FROM S.S. SECURITIES, PROPRIETOR MR. SANJAY KUMAR SARAOGI, WHO IS MEMBER OF GAWAHAT I STOCK EXCHANGE. THE ASSESSEE HAS FILED STOCK EXCHANGE CARD AND HIS PAN NUMBER BEFORE THE AO. THUS, THE SOURCE OF FUNDS WERE DULY EXPLAINED. WE ALSO FOUND THAT THE FUNDS IN S.S. SECURITIES BANK ACCOUNT HAVE COME FROM M/S RPK SECURITIES AND IN THE BANK ACC OUNT OF M/S RPK ENTERPRISES, FUNDS HAVE COME FROM THREE CONCERNS. AFTER GIVING DETAILED FINDING WITH REGARD TO IDENTITY OF THE SHAREHOLDERS, GENUINENESS OF THE TRANSACTION AS WELL AS CAPACITY OF THE SHAREHOLDERS TO INVEST IN THE SHARES OF THE ASSESSEE COMP ANY, THE CIT(A) HAS DELETED THE ADDITION. THE DETAILED FINDING SO RECORDED BY CIT(A) ARE AS PER MATERIAL ON RECORD. FROM ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 13 THE RECORD WE ALSO FOUND THAT IN THE CASE OF ASSESSEE ALL SHARE HOLDERS ARE PRODUCED BEFORE A.O., MOST OF THEM ARE ASSESSED U/ S 143(3) , SIX COMPANIES ARE LISTED IN STOCK EXCHANGE, M/ S HILL CREST PVT. LTD. IS PART OF WELL KNOWN BUILDER GROUP KNOWN BY NAME OF 'MONARCH BUILDERS'. ONE MR. AJAY GURTOO IS A CHARTERED ACCOUNTANT OF 1976 BATCH WHO WAS WORKING AS SENIOR FINANCE CONTROLLER WITH DU BAL ALLUMINIUM, DUBAI, SINCE LAST 30 YEARS IN A MULTINATIONAL COMPANY EARNING SALARY OF RS. 25,00,0001 - PER MONTH. THE A.O. KEPT MUM ON THESE ASPECTS. HE WENT ON ENQUIRING ABOUT SOURCE OF SOURCE AND ON AND ON BUT NEVER ENQUIRED WITH THE RESPECTIVE ASSESSIN G OFFICERS WHEN ORDERS U/S.143(3) ARE PRODUCED BEFORE HIM. HENCE, HIS OBSERVATION THAT SHARE HOLDERS ARE BOGUS IS TOTALLY UNCALLED FOR. WHEN SHARE HOLDERS ARE FILLING RETURNS REGULARLY SINCE LAST 10 TO 15 YEARS, AO COULD HAVE EASILY INFORMED THE ASSESSING OFFICER CONCERNED. HOWEVER, THE AO HAS JUST ADDED THE SHARE CAPITAL BY RELYING ON THE DECISION OF SMUTI DAYAL, WHEREIN FACTS ARE TOTALLY DIFFERENT. WHEN THERE ARE NUMBER OF JUDGEMENTS FROM DIFFERENT HIGH COURTS AND THE SUPREME COURT ON SHARE APPLICATION, THE A.O. IS BOUND TO STICK TO THOSE AND FOLLOW THESE JUDGEMENTS. THE LIST OF SUCH JUDGEMENTS ARE GIVEN AS UNDER : IN HON'BLE SUPREME COURT CIT V / S STELLAR INVESTMENT LTD. 164 CTR 287 ( SC) CIT V / S LOVELY EXPORTS (P) LTD. 216 CTR 195 (SC), 6 DTR 308) C IT V / S GUJRATH HEAVY CHEMICALS LTD. 256 ITR 795 (S.C.) IN HONBLE HIGH COURT CIT V / S CREATIVE WORLD TELEFILMS LTD 333 ITR 100 (BOMBAY.) CIT V/ S ROHINI BUILDERS 256 ITR 360 (GUJ) SARAOGI CREDIT CORPORATION VIS CIT 103 ITR 344 (PATNA) CIT V/ S MISRA PRES ERVERS (P) LTD., 350 ITR 222 (ALL) ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 14 CIT V / S JAY DEE SECURITIES & FINANCE LTD. 350 ITR 220 (ALL) CIT V. SAMIR BIO - TECH P. LTD .. 325 ITR 294 (DELHI) CIT V/ S VICTOR ELECTRODES LTD 329 ITR 271 (DEL) CIT V/ S K.C.FIBRES LTD 332 ITR 481 (DEL) CIT V/ S STL EX TRUSION PVT.LTD 333 ITR 269 (M.P.) CIT V/ S ARUNANANDA TEXTILES PVT. LTD 333 ITR 116 (KARN) CIT V/ S ASK BROTHERS LTD 333 ITR 111 (KARN) CIT V/S KAMDHENU SHEL & ALLOYS LTD. 361 ITR 220 (DEL) C IT V/ S OASIS HOSPITALITIES PVT. LTD 333 ITR 119 (DEL) CIT V. ORBITAL COMMUNICATION (P) LTD. (DELHI) 3271TR 560 CIT V. AMBUJA GINNING, PRESSING AND OIL CO. P. LTD . 332 ITR 434 (GUJ) CIT KOLKATA III V/ S DATAWARE PRIVATE ITD. DATED 21/9/2011 REPORTED IN C.A. JOURNAL APRIL 2012 PAGE 111 CIT V/ S DWARIKADHISH INVESTM ENT LTD. 167 TAXMAN 321 (DEL) S.C. DISMISSED SPECIAL LEAVE PETITION 314 ITR 3 CIT V/ S UJALA DYING & PRINTING MILL LTD. 328 ITR 437 (GUJ) S.C. DISMISSED SPECIAL LEAVE PETITION 317 ITR (STA) 1 10. IN VIEW OF THE FINDINGS RECORDED BY CIT(A) , A LL SHARE HOLDE RS ARE PRODUCED WITH THEIR BOOKS & BANK STATEMENTS, HENCE COVERE D BY BOMBAY HIGH COURT IN CIT V/ S TANIA INVESTMENT 322 ITR 394 (BOM). ALL ARE ASSESSED SINCE LAST 10 YEARS. ACKNOWLEDGEMENTS OF FILLING RETURNS FILED BY SHARE HOLDERS WITH AO UNDER PROCEEDINGS U/ S 131 . MAJORI TY SHARE HOLDERS ARE ASSESSED U/ S 143(3) & BEFORE CIT(APPEAL) & TRIBUNAL . SIX COMPANIES ARE LISTED IN RECOGNISED STOCK EXCHANGES . COPY OF SHARE CERTIFICATE WAS FILED BY SHARE HOLDERS WITH AO. UNDER PROCEEDINGS U/ S 131. NET WORTH OF SHARE HO LDERS WERE FROM 142 LACS TO 50 CRORES . THE SHARE HOLDERS ARE IDENTIFIED COVERE D BY BOMBAY HIGH COURT IN CIT V/ S CREATIVE WORLD TELE FILMS LTD 333 ITR 100 (BOMBAY.). SHARE HOLDERS HAVE THEIR BANK ACCOUNTS, S.S.SECURITIES ALSO HAVE BANK ACCOUNTS, OTHER CREDITO RS MENTIONED BY AO. WHO GAVE FUNDS TO S.S.SECURITIES ALSO HAVE BANK ACCOUNTS. NO CASH WAS DEPOSITED ANYWHERE. UNDER KYC NORMS BANKS ARE INSTRUCTED BY RBI TO COLLECT PHOTO, ADDRESS PROOF, PAN CARDS PHOTO ID ITA NO. 5332 - 5334 /1 4 & CO NO.40/16 15 ETC. THE A.O. IS TOTALLY SILENT ON THESE FACTS. SH ARE HOLDERS FILED THEIR BALANCE SHEETS ALONG WITH LIST OF INVESTMENTS WHERE INVESTMENT IN ASSESSEE COMPANY IS CLEARLY SHOWN IN SCHEDULE OF INVESTMENT. 11. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE ADDITION MADE ON ACCOUNT OF SHARE CAPITAL. THE DETAILED FINDINGS RECORDED BY CIT(A) HAVE NOT BEEN CONTROVERTED BY DEPARTMENT BY BRINING ANY POSITIVE MATERIAL ON RECORD. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING SO RECORDED BY CIT(A) RESULTI NG INTO DELETION OF ADDITION MADE ON ACCOUNT OF SHARE CAPITAL. 12. SINCE WE HAVE ALREADY DISMISSED THE APPEALS OF THE REVENUE, THE CROSS OBJECTION OF THE ASSESSEE HAS BECOME INFRUCTUOUS, AND THE SAME IS THEREFORE DISMISSED. 1 3 . IN THE RESULT, ALL THE THR EE APPEALS OF THE REVENUE AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 08/06 / 201 6 . SD/ - ( RAMLAL NEGI ) SD/ - ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 08/06 / 201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER , / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESP ONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//