ACIT, New Delhi V. M/s Lakshmi Float Glass Ltd, New Delhi

ITA 535/DEL/2009

• Counselvise Citation: 53520114 RSA 2009
• Duration Of Justice: 6 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-12-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 12-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAMKAUNJM A
• Keywords: Unexplained cash credit; Bogus Share capital; Unexplained investment; Unexplained expenditure; Search and seizure; Corroborative evidences; Accommodation entries; Retraction
• Section: 133A; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI. PRAMOD KUMAR ITA NO. 535/DEL/2009 ASSESSMENT YEAR: 2000-01 ASSISTANT CIT, VS. LAKSHMI FLOAT GLASS LTD., CIRCLE-4(1), A-2/10, WHS, DDA MARBLE NEW DELHI. MARKET, KIRTI NAGAR, NEW DELHI. (PAN: NIL ) (APPELLANT) (RESPONDENT) CROSS OBJ. NO. 28/DEL/2009 ( IN ITA NO. 535/DEL/2009 ) ASSESSMENT YEAR: 2000-01 LAKSHMI FLOAT GLASS LTD., VS. ASSISTANT CIT, A-2/10, WHS, DDA MARBLE CIRCLE-4(1), MARKET, KIRTI NAGAR, NEW DELHI. NEW DELHI. (PAN: NIL ) (APPELLANT) (RESPONDENT) REVENUE BY: SHRI P. DAMKAUNJM A, SR. DR ASSESSEE BY: SHRI VED JAIN, CA DATE OF HEARING : 29.01.2015 DATE OF PRONOUNCEMENT: 31 :03.2015 ORDER PER I.C. SUDHIR: JUDICIAL MEMBER ITA NO.535/DEL/2009 : THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRONE OUS & CONTRARY TO FACTS AND LAW. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING ADDITION MADE U/ S. 68 OF RS.3,85,00,000 & OF RS.96,250 ON ACCOUNT OF UNEXPLA INED EXPENDITURE IGNORING: A) THAT DURING THE SURVEY OPERATION U/S. 133A CARR IED OUT IN THIS CASE, SH. ARVIND KUMAR GUPTA, DIRECTOR MADE A VOLUNTARY SURRENDER OF RS.3.85 CRORES ON ACCOUNT OF RECEIPT O F BOGUS SHARE APPLICATION MONEY AS RECORDED IN THE STATEMENT ON O ATH. THE SAID SURRENDER WAS MADE AS THE DIRECTOR ADMITTED TH AT THE CONCERNED SHARE APPLICANTS WERE NOT KNOWN TO HIM PE RSONALLY & HE ALSO SHOWED HIS INABILITY TO PRODUCE THEM. THE DIRECTOR WAS ALSO NOT ABLE TO EXPLAIN THE REASONS WHY THESE APPLICANTS WOULD INVEST MONEY IN THEIR CONCERNS WHICH WERE NOT LISTED IN THE STOCK EXCHANGE NOR HAD THEY FLOATED ANY PUBLIC ISSUE. B) THE STATEMENT ON OATH OF ENTRY OPERATORS NAMELY MR. MUKESH GUPTA, SURINDER PAL SINGH & RAJAN LASAL WHO HAVE CATEGORICALLY ADMITTED ON OATH THAT THEY HAD FLOATE D THE IMPUGNED ENTITIES FROM WHOM THE SAID AMOUNT OF RS.3 .85 CRORES WAS SHOWN TO BE RECEIVED BY ASSESSEE ONLY FO R GIVING ACCOMMODATION ENTRIES & NO REAL BUSINESS WAS DONE B Y THESE ENTITIES. C) THAT THE ASSESSEE FAILED TO PRODUCE THE ALLEGED SHARE APPLICANT FOR VERIFICATION. MERE SUBMISSION OF DOCU MENTS & MATERIAL IS HELD TO BE INSUFFICIENT IN THE CASE OF HINDUSTAN TEA TRADING CO. VS. CIT 263 ITR 289. D) THE DICTUM GIVEN BY THE HON'BLE SUPREME COURT I N CIT VS. DURGA PRASAD MORE 82 ITR 540 & SUMATI DAYAL VS. CIT 3 214 ITR 801 IN WHICH APEX COURT HAS LAID DOWN THE PROPOSITION THAT THE COURTS & TRIBUNALS SHOULD SEE THE PREPONDERANCE OF PROBABILITIES WHILE CONSIDERING TH E EVIDENCE FURNISHED BY THE ASSESSEE. E) THAT IN RESPECT OF THIS CASE, THE RATIO OF CASE LAWS RELIED UPON BY THE FIRST APPELLATE AUTHORITY ARE NOT APPLI CABLE AT ALL. THE LEARNED CIT(APPEALS) BASED HIS DECISION ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN DIVINE LEASING & FI NANCE LTD. & LOVELY EXPORTS IGNORING THAT THE FACTS ARE E SSENTIALLY DIFFERENT INASMUCH AS THIS CASE THE ASSESSEE IS A P VT. COMPANY AND NO MEMBER OF THE PUBLIC PARTICIPATED. ON THE OT HER HAND IN THE CASE OF DIVINE LEASING & FINANCE LTD. & LOVELY EXPORTS, THE SHARE APPLICATIONS WERE MADE BY WAY OF PUBLIC I SSUES. F) THE FINDING OF FACTS RECORDED BY THE A.O. & THE INVESTIGATION WING OF THE DEPARTMENT THAT THE ASSES SEE INDULGED IN A NOTORIOUS PRACTICE OF RESORTING TO ACCOMMODATI ON ENTRIES IN ORDER TO EVADE PAYMENT OF LEGITIMATE TAX. G) THAT THE A.O. IS DUTY BOUND U/S. 68 TO ENQUIRE INTO THE CREDITWORTHINESS, IDENTITY OF THE CREDITORS & GENUI NENESS OF THE TRANSACTIONS. THE CIT(A) HAS ERRED IN IGNORING SUCH FINDINGS RECORDED BY THE A.O. IN THE ASSESSMENT ORDER. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY T HE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILA BLE ON RECORD AND THE DECISIONS RELIED UPON. 4 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN TRADING OF VARIOUS TYPES OF GLASSES. ON 10.08.2006, SURVEY PROCEEDINGS UNDER SEC. 133A OF THE INCOME-TAX ACT, 1961 WERE CONDUCTED BY THE DIT(INV.) AT THE PREMISES OF THE ASSESSEE WHICH RESULTED IN DISCLOSU RE OF A SUM OF RS.3.85 CRORES WHICH WAS RECEIVED BY THE ASSESSEE AS A SHAR E APPLICATION MONEY FROM VARIOUS CONCERNS. NOTICE UNDER SEC. 148 WAS I SSUED AND ASSESSMENT WAS FRAMED UNDER SEC. 147/143(3) OF THE INCOME-TAX ACT, 1961 ON 17.12.2007. THE ASSESSING OFFICER MADE ADDITION OF RS.3,85,00,000 UNDER SEC. 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH C REDITS. A FURTHER ADDITION OF RS.96,250 WAS MADE ON ACCOUNT OF UNEXPLAINED EXP ENDITURE BEING COMMISSION @ 25 PAISE PER HUNDRED RUPEES PAID FOR A RRANGING ENTRY OF RS.3,85,00,000. THE LEARNED CIT(APPEALS) HAS DELET ED THESE ADDITIONS AGAINST WHICH THE REVENUE IS IN APPEAL. 4. THE LEARNED CIT(APPEALS), HOWEVER, DID NOT ALLOW THE OBJECTION OF THE ASSESSEE ON THE VALIDITY OF NOTICE ISSUED UNDER SEC. 148 OF THE ACT AND THE ASSESSMENT MADE IN FURTHERANCE THERETO. AGAINST THI S ACTION OF THE LEARNED CIT(APPEALS), THE ASSESSEE HAS PREFERRED CROSS-OBJE CTION BEFORE THE ITAT. 5 5. IN SUPPORT OF THE GROUNDS, THE LEARNED SR. DR HA D REITERATED THE CONTENTS OF THE GROUNDS AND HAS PLACED RELIANCE ON THE ASSESSMENT ORDER. HE SUBMITTED THAT THE ASSESSEE COULD NOT DISCHARGE ITS ONUS TO ESTABLISH THE GENUINENESS OF THE CLAIMED SHARE CAPITAL , THE ASSE SSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION OF THE CLAIMED SHARE CAPITAL INVESTMENT UNDER SEC. 68 OF THE INCOME-TAX ACT, 1961. 6. THE LEARNED AR ON THE OTHER HAND TRIED TO JUSTIF Y THE FIRST APPELLATE ORDER WITH THIS SUBMISSION THAT ALL THE NECESSARY E VIDENCE TO ESTABLISH THE GENUINENESS OF THE CLAIMED INVESTMENT OF SHARE CAPI TAL BY THE PARTIES WERE FURNISHED AND IN ABSENCE OF REBUTTAL THEREOF BY THE ASSESSING OFFICER, THE LEARNED CIT(APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION BY PASSING A DETAILED ORDER AND DISCUSSING THE OBJECTIONS RAISED BY THE ASSESSING OFFICER AND SUBMISSIONS OF THE ASSESSEE MEETING THOSE OBJEC TIONS. HE CONTENDED THAT ISSUE IS COVERED BY THE JUDGMENT OF HON'BLE JURISDI CTIONAL DELHI HIGH COURT IN THE FOLLOWING CASES WHEREBY IT HAS BEEN HELD THA T IN CASE THE ASSESSING OFFICER DOES NOT CARRY OUT INDEPENDENT INVESTIGATIO N AFTER THE ASSESSEE HAS SUBMITTED THE EVIDENCES, ADDITIONS CANNOT BE MADE: 1. CIT VS. GANGASHWARI METAL PVT. LTD. (ITA NO.567 OF 2012); 2. CIT VS. FAIR FINVEST LTD. ( ITA NO. 232 OF 2012 ); 3. CIT VS. EXPO GLOBE INDIA LTD. ( ITA NO. 1257 OF 2011); 6 4. CIT VS. GOEL SONS GOLDEN ESTATES PVT. LTD. ( ITA NO.212 OF 2012); & 5. ACIT VS. PANCHANAN INTERNATINAL (P) LTD. (BENCH BENCH) (ITA NO. 50/DEL/2011). 6.1 THE LEARNED AR ALSO REFERRED PAGE NOS. 1 TO 425 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE TO SUPPORT ITS CLAI M. THESE DOCUMENTS ARE COPIES OF AUDITED BALANCE SHEET WITH AUDIT REPORT F OR THE YEARS ENDING 31.3.2000, ACKNOWLEDGMENT OF RETURN OF INCOME WITH COMPUTATION OF INCOME FOR THE YEAR, STATEMENTS OF MR. ARVIND KUMAR GUPTA DURING THE COURSE OF SURVEY OPERATION, SWORN RETRACTION STATEM ENT BY ARVIND KUMAR GUPTA DATED 31.8.2006, BOARDS RESOLUTION ADOPTING RETRACTION STATEMENT OF MR. GUPTA DATED 31.4.2006, STATEMENTS OF DEPARTMENT S WITNESSES, SHRI MUKESH GUPTA, RAJAN JASSAL AND SURENDER PAL SINGH, LETTERS OF DIFFERENT DATES COMMENTING UPON THE STATEMENTS OF THE ABOVE P ERSONS SUBMITTED BEFORE THE ASSESSING OFFICER, SEVERAL CORRESPONDENC ES WITH THE DEPARTMENT, LATEST CONFIRMATION OF THE TRANSACTIONS FROM THE S HAREHOLDERS AND STATEMENTS OF SHARE CAPITAL FROM THE COMPANIES ALONG WITH SUPP ORTING DOCUMENTS PROVING IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. 7 7. WE FIND THAT THE ASSESSEE HAD FILED RETURN DECLA RING THE INCOME OF RS.11,59,090 WHICH WAS PROCESSED UNDER SEC. 143(1) OF THE ACT. SURVEY UNDER SEC. 133A OF THE ACT WAS CONDUCTED BY THE INV ESTIGATION WING OF THE DEPARTMENT WHEREIN DIRECTOR OF THE ASSESSEE COMPANY OFFERED RS.3.85 CRORES FOR TAXATION IN THE HANDS OF THE COMPANY. THE ASSES SING OFFICER INITIATED REOPENING PROCEEDINGS AND MADE THE ADDITIONS IN QUE STION BEING NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE IN THIS REGARD . 8. ON PERUSAL OF ORDERS OF THE AUTHORITIES BELOW, W E FIND THAT DURING THE COURSE OF SURVEY, IT WAS REVEALED THAT THE ASSESSEE COMPANY HAD RECEIVED A SUM OF RS.3.85 CRORES AS SUBSCRIPTION TO ITS SHARE CAPITAL FROM 16 PARTIES DURING THE RELEVANT PERIOD UNDER CONSIDERATION. 38 ,50,000 SHARES OF RS.10 EACH WERE ALLOTTED TO SUCH PARTIES. THE ASSESSING O FFICER HAS NOTED THAT THE ISSUED AND SUBSCRIBED SHARE CAPITAL INCREASED FROM RS.6,62,45,000 TO RS. 14,12,54,000 WAS RESULTED INTO AN ADDITION OF RS.7, 50,00,000. OUT OF THE TOTAL ADDITION, A SUM OF RS.3.85 CRORES WAS FOUND T O HAVE BEEN RECEIVED FROM VARIOUS OUTSIDE PARTIES ABOUT WHICH THE DIRECTOR OF THE ASSESSEE PLEADED IGNORANCE IN THE STATEMENT RECORDED AT THE TIME OF THE SURVEY. THE ASSESSING OFFICER HAD NOTED FURTHER THAT THE SURVEY ACTION WA S BASED ON THE STATEMENTS OF VARIOUS ENTRY OPERATORS, NAMELY, MR. MUKESH GUPT A, SURENDER PAL SINGH 8 AND RAJAN JASSAL, WHEREIN SUCH ENTRY OPERATORS CATE GORICALLY ADMITTED OPERATING VARIOUS CONCERNS AS DUMMY/FAKE ENTERPRISE S USING NAME TO GIVE ACCOMMODATION ENTRIES AGAINST CASH RECEIVED FROM TH E RECIPIENT OF SUCH ACCOMMODATION ENTRIES. THEY ALSO ADMITTED TO HAVE C HARGED A COMMISSION OF 25 PAISE PER HUNDRED RUPEES OF SUCH CONVERSION O F UNDISCLOSED INCOME BY THE RECIPIENT OF THE RELEVANT ACCOMMODATION ENTRIES . THE ASSESSING OFFICER DISCUSSING THE EXPLANATION OF THE ASSESSEE ON THE I SSUE HOLD THAT THE ONUS IS ON THE ASSESSEE AND NOT ON THE DEPARTMENT TO ESTABL ISH THAT THE ENTRIES ROUTED THROUGH SUCH COMPANIES WERE NOT BOGUS ENTRIES AS TH E ENTRY-OPERATOR HAD CATEGORICALLY ADMITTED THE FACT TO THE PREJUDICE OF THE ASSESSEE. THE ASSESSING OFFICER NOTED FURTHER THAT THE ASSESSEE H AD PROVIDED EVIDENCES OF MERE EXISTENCE OF SUCH PAPER COMPANIES WHICH FACT W AS ADMITTED BY THE ENTRY-OPERATORS THEMSELVES. NO DETAILS OF THE SOURC ES FROM WHICH THE SAID PAPER COMPANIES OR BOGUS CAPITAL CONTRIBUTORS RECEI VED FUNDS WHICH WERE SPONTANEOUSLY TRANSFERRED TO THE ASSESSEE COMPANY A S SHARE CAPITAL WERE PROVIDED BY THE ASSESSEE. THE ASSESSING OFFICER NOT ED FURTHER THAT THE ASSESSEE HAS ALSO FAILED TO ESTABLISH THE GENUINENE SS OF THE TRANSACTIONS BY FAILING TO PRODUCE THE SECRETARIAL RECORDS WHEREBY PRESENCE OF SUCH SHAREHOLDERS IN ANY OF THE MEETINGS HELD OF THE COM PANY COULD HAVE BEEN ASCERTAINED. THE ASSESSING OFFICER NOTED THAT IT MA Y BE TRUE THAT IN THE CASE 9 OF A PUBLIC ISSUES, THE COMPANY CONCERNED CANNOT BE EXPECTED TO KNOW EVERY DETAIL PERTAINING TO THE IDENTITY AS WELL AS FINANC IAL WORTH OF EACH OF ITS SUBSCRIBERS. THE COMPANY MUST, HOWEVER, MAINTAINED AND MAKE AVAILABLE TO THE ASSESSING OFFICER FOR HIS PERUSAL ALL THE INFOR MATION CONTAINED IN THE STATUTORY SHARE APPLICATION DOCUMENTS. IN THE CASE OF PRIVATE PLACEMENT, THE LEGAL REGIME WOULD NOT BE THE SAME. THE ASSESSING O FFICER HAS ULTIMATELY MADE THE ADDITION UNDER SEC. 68 OF THE ACT WITH THI S FINDING THAT THE ASSESSEE HAS FAILED TO SATISFACTORILY EXPLAIN THE REAL IDENT ITY, CREDITWORTHINESS AND GENUINENESS OF PERSONS IN WHOSE NAMES SUMS WERE FOU ND CREDITED IN THE BOOKS OF ACCOUNT. 9. THE LEARNED CIT(APPEALS) HAS DISCUSSED THE CASES OF ASSESSEE AS WELL AS OF THE ASSESSING OFFICER ON THE ISSUES AND HAS D ELETED THE ADDITIONS VIDE CONCLUDING PARA NO.50 OF THE FIRST APPELLATE ORDER. FOR A READY REFERENCE THE SAID PARA NO 50 OF THE FIRST APPELLATE ORDER IS BEING REPRODUCED HEREUNDER: 50. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND TH E DOCUMENTARY SUPPORTING EVIDENCES IN PAPER BOOK. ON CAREFUL PERU SAL OF THE ABOVE THE FOLLOWING MATERIAL FACTS HAVE EMERGED, CONSIDER ED AND ARE PERTINENT FOR DECISION ON THESE GROUNDS: COMPANIES AS CASH CREDIT U/S. 68 IS DULY ACCOUNTED FOR AS SHARE CAPITAL IN THE BO OKS OF ACCOUNTS 1. THE ADDITION OF RS. 3.85 CRORES CONSIDERING THE IMPUGNED SHARE CAPITAL RAISED FROM 16 AS CASH CREDIT U/S 68 IS ACC OUNTED FOR AS SHARE CAPITAL IN THE BOOKS OF ACCOUNTS DULY DISCLOSED AS SHARE CAPITAL IN THE 10 AUDITED BALANCE SHEET FILED ALONG WITH THE RETURN O F INCOME FOR THE PERTINENT ASSESSMENT YEAR BEFORE THE DATE OF SURVEY . 2. AS REGARDS THE STATEMENTS OF MUKESH GUPTA, SURE NDER PAL SINGH, RAJJAN JASSAL IT IS SEEN THAT IN THE SAID ST ATEMENTS THE THREE DEPONENTS DID NOT NAMED THE APPELLANT COMPANY AS HA WALA OPERATOR AND HAVE NOT DENIED THE INVESTMENT IN THE ASSESSEE COMPANY. THE STATEMENTS ARE DEFINITELY EVIDENCE BUT EVIDENCE BEF ITTING TO TAKE UP THE ASSESSMENT OR REASSESSMENT OR INITIATE INVESTIGATIO N HOWEVER THESE STATEMENTS CANNOT BE THE BASIS TO MAKE THE ADDITION S IN ASSESSMENT SPECIFICALLY WHEN ASSESSEE HAS SHOWN THAT CONTENTS OF THE SAID STATEMENTS ARE DOUBTFUL AND DISTINGUISHED FROM THE FACTS OF ASSESSEE COMPANY AND THAT ALL THE SIXTEEN SHAREHOLDER COMPAN IES I HAVE CONFIRMED THE TRANSACTIONS WITH ASSESSEE COMPANY VI DE LATEST CONFIRMATIONS. COPIES AVAILABLE AT PAGE NUMBER 256 TO 271 OF PAPER BOOK AND ALL CONFIRMATIONS ARE AFTER THE DATE OF TH REE DEPONENTS STATEMENTS. AND THE SAME REMAINED UNDISPUTED BY ANY FINDING OR MATERIAL BROUGHT ON RECORD DURING THE ASSESSMENT. I T IS ALSO SEEN THAT AS REGARDS THE 5 INVESTORS M/S. HARPAL ASSOCIATES P . LTD. M/S. CHITRAGANDHA INVESTMENT & CONSULTANTS P. LTD. MRS. PARVANTRA CAPITAL AND FIN SERVICES P. LTD, M/S. VIMKA IMPEX P . LTD AND SGC PUBLISHING P. LTD THESE DON'T FIND ANY MENTION IN T HE STATEMENT OF MUKESH GUPTA, SURENDER PAL SINGH, RAJJAN JASSAL AND NO MATERIAL IN AVAILABLE ON RECORD DURING ASSESSMENT PROCEEDINGS F OR THE BASIS TO JUSTIFY ANY ADDITION IN THESE COMPANIES. 3. AS REGARDS THE SURVEY U/S. 133A IT CORRECTLY INV OLVES A COMPREHENSIVE & EXTENSIVE VIEW OF THE BUSINESS ACTI VITIES OF THE ASSESSEE & IS CARRIED ONLY AT PLACES WHERE THE BUSI NESS IS CARRIED AND THE BOOKS OF ACCOUNTS ETC ARE MAINTAINED. IN THE PR ESENT CASE NOTHING WAS FOUND AND BOUGHT ON RECORD TO SUGGEST INCRIMINA TING OR DEFECTIVE BOOKS OF ACCOUNTS OR ANY INCRIMINATING DOCUMENT OR MATERIAL THAT IS FOUND OR ANY EXCESS CASH, INVENTORY OR OTHER VALUAB LES MAY HAVE BEEN FOUND SO AS TO SUGGEST ANY UNDISCLOSED INCOME OR UN DISCLOSED SOURCE OF INCOME OR UNEXPLAINED NATURE OF SHARE CAPITAL. T HERE IS NO NEXUS BETWEEN THE ADDITIONS OF RS. 3.85 CRORES AND SURVEY MATERIAL THAT COULD SUPPORT THE ADDITION. THEREFORE, THE ADDITION IS MADE NOT ON BASIS OF ANY EVIDENCE DURING SURVEY BUT ON THE BASI S OF STATEMENT OF ARVIN KUMAR GUPTA RECORDED DURING THE COURSE OF SUR VEY. 11 4. ARVIN KUMAR GUPTA ON THE BASIS OF WHOSE STATEME NT THE ADDITION OF RS. 3.85 CRORES IS MADE HAS SPECIFICALL Y ADMITTED AT QUESTION NUMBER 18 AND 21 OF THE STATEMENT THAT DET AILS AND , GENUINENESS OF THE SHARE CAPITAL IS AS PER THE SHAR E HOLDERS REGISTER AND THERE IS NO INCRIMINATING MATERIAL DURING SURVEY TO DISREGARD THE ABOVE REPLIES. ALSO, IT IS NOTED THAT THE VERY BASIS OF Q UESTION NO. 22 THAT CHEQUES ARE 'ACCOMMODATING ENTRIES IN LIEU OF CASH DEPOSITS WITH THEM IN ANY OF THEIR ACCOUNTS' AND THERE IS NO MATERIAL OR BANK STATEMENT OF ANY ACCOUNT PRODUCED ON RECORD EITHER DURING SURVEY OR ASSESSMENT TO JUSTIFY THAT QUESTION NUMBER 22 WAS FACTUAL AND BON AFIDE. AS PER MATERIAL PRODUCED BY ASSESSEE (PAGE NO 253 -255 OF PAPER BOOK) THE SUB- SOURCE OF SHARE CAPITAL RS. 3.85 CRORES, EXCEP T A INSIGNIFICANT AMOUNT OF RS.84,858 THAT TOO IS SUM TOTAL OF MISCEL LANEOUS SMALL AMOUNTS, HAVE BEEN MADE THROUGH CHEQUES DULY CREDIT ED IN BANK ACCOUNTS OF SHARE HOLDERS. 5. FROM THE JUDICIAL PRONOUNCEMENTS REPORTED AT PA UL MATHEWS & SONS 263 ITR 10 1 (KER); ASHOK MANILAL THAKKAR 279 ITR (AT) 143 (AHM), MUKUND V. KAPADIA 82 ITD 489 (MUM.), HYUNDAI ENGINEERING CO. LTD ITA NO. 3006/D/2003' (DEL) IT I S CLEAR THAT INCOME TAX AUTHORITIES HAVE NO JURISDICTION TO RECO RD SWORN STATEMENT U/S, 13JA OF THE ACT DURING THE COURSE OF SURVEY. S INCE THE AUTHORITY HAD NO JURISDICTION TO ADMINISTER OATH AND RECORD S WAM STATEMENT SO STATEMENT U/S, 133A(3) IN THE ABSENCE OF ANY SUPPOR TING MATERIAL HAS NO EVIDENTIARY VALUE AND COULD BE SAID TO BE USEFUL OR RELEVANT TO ASSESSMENT PROCEEDINGS ONLY WHEN THERE WAS MATERIAL ON RECORD TO PROVE THE BASIS ON WHICH DISCLOSURE WAS STATED TO B E MADE. THUS, IT COULD NOT BE SAID SOLELY ON THE BASIS OF STATEMENT DURING SURVEY AND WITHOUT ANY SUPPORTING MATERIAL ANY INCOME WAS ASSE SSABLE AS LAWFUL INCOME. THE AFORESAID TRITE LAW IS ALSO REITERATED BY CBDT AT CBDT CIRCULAR NO. F.NO.286/2/2003-IT (INV.II) DATED 10TH MARCH 2003 IN THE FOLLOWING WORDS 'INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHE RE ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH AND SEIZURE AND SURVEY OPERATIONS. SUCH CONFESSIONS, IF NOT BAS ED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCE RNED ASSESSEE WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTA NCES, 12 CONFESSIONS DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATIO N ON COLLECTION OF EVIDENCE OF INCOME, WHICH LEADS TO IN FORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME-TAX DEPARTMENT. SIMILARLY, WHILE RECORDING STATEMENTS DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONF ESSIONS AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRA RY SHALL BE VIEWED ADVERSELY. FURTHER IN RESPECT OF PENDING ASSESSMENT PROCEEDING S ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCE / MATERIALS GATHERED DURING THE COURSE OF SEARCH / SURVEY OPERA TIONS OR THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT OR DERS. THEREFORE, THE STATEMENT OF ARVIN KUMAR GUPTA AND W HICH IN THIS CASE IS ALSO BEEN FOUND TO BE FORCEFULLY RETRA CTED LATER ON BY ASSESSEE WOULD NOT HAVE MUCH EVIDENTIARY VALUE IN Q UASI- JUDICIAL PROCEEDINGS SINCE NOT CORROBORATED WITH MA TERIAL FINDING AND DOCUMENTARY EVIDENCES EITHER FOUND DURI NG SURVEYOR EVEN BROUGHT ON RECORD LATER DURING ASSESS MENT PROCEEDINGS TO INDICATE OR SUPPORT THAT ASSESSEE HA D UNDISCLOSED OR UNEXPLAINED INCOME OR ASSESSEE OWN FUNDS HAVE BE EN REROUTED TO ITS OWN COFFERS IN THE FORM OF SHARE CA PITAL IN THE NAME OF NON-EXISTING OR FICTITIOUS ENTITIES OR UNID ENTIFIABLE LEGAL ENTITIES. THESE ESSENTIAL INGREDIENTS ARE LACKING I N THE INSTANT CASE. ON THE CONTRARY THE ASSESSEE HAS FILED DETAIL ED PARTICULARS AND DOCUMENTS OF THE 16 SHAREHOLDERS TO CORROBORATE THE SUBMISSIONS AND HIGHLIGHT THE IDENTITY AND CREDITWO RTHINESS OF SHAREHOLDERS AND GENUINENESS OF SHARE SUBSCRIPTION TRANSACTION AS TABULATED HEREUNDER: S. NO. NAME, ADDRESS AND ROC COMPANY IDENTIFICATION NO. (CIN) OF SHAREHOLDER DATE OF INCORP. STATUS AS PER ROC RECORD INCOME TAX ASSESSING OFFICER NO. OF SHARE APPLIED APPLICATION MONEY AMOUNT (RS.) CHEQ NO. CHEQ DATE BANK A/C NO., BANK NAME & ADDRESS 1. M V MARKETING PVT. LTD. A-24, TAGORE MARKET, KIRTI NAGAR, NEW DELHI CIN: U51109DL1992PTC051334 11/12/92 ACTIVE WARD 6(1) DELHI 250,000 2,500,000 276327 19/01/2000 07CA1106624 BANK OF PUNJAB LTD. SECTOR-8, ROHINI, DELHI 13 2. FNS CONSULTANCY PVT. LTD. 70/5391, REGHAR PURA, KAROL BAGH, NEW DELHI CIN: U74140DL1989PTC035249 27/02/89 ACTIVE WARD 11(3) DELHI 100,000 1,000,000 799694 30/03/2000 2296 VIJAYA BANK RAM NAGAR, PAHARGANJ, NEW DELHI 3. ETHNIC CREATIONS PVT. LTD. WZ- 134, PLOT NO.-170, VISHNU GARDEN NEW DELHI CIN :151493DL1995PTC067204 06/04/95 ACTIVE WARD 11(2) DELHI 250,000 2,500,000 280103 17/02/2000 2834 VIJAYA BANK RAM NAGAR, PAHARGANJ, NEW DELHI 4. SGC PUBLISHING PVT. LTD. A- 2/46C, MIG FLATS, PASCHIM VIHAR, NEW DELHI CIN :U22110DL1996PTC083625 ARUN FINVEST PVT. LTD. 50/12, ASHOK NAGAR, NEW DELHI CIN:U67120DL1997PTC084638 04/12/96 24/01/97 ACTIVE ACTIVE WARD 8(1) DELHI CIRCLE 1(3) DELHI 250,000 250,000 2,500,000 820470 28/02/2000 2,500,000 820470 24/02/2000 2840 VIJAYA BANK RAM NAGAR, PAHARGANJ, NEW DELHI 2841 VIJAYA BANK RAM NAGAR, PAHARGANJ, NEW DELHI 5. BALDEV HARISH ELECTRICALS PVT. LTD.50/12, 3 RD FLOOR, ASHOK NAGAR, NEW DELHI CIN:U29303DL1990PTC040992 26/07/90 ACTIVE CIRCLE 1(5) DELHI 250,000 2,500,000 111007 11/03/2000 51887 CORPORATION BANK PASCHIM VIHAR, NEW DELHI. 6. CHITRAGANDHA INVESTMENTS & CONSULTANTS H-23, VIKAS MARG, LAXMI NAGAR, NEW DELHI CIN:U65993DL1988PLC030924 11/03/88 ACTIVE CIRCLE 1(5) DELHI 250,000 2,500,000 376685 14/03/2000 450833 INDIAN BANK MAIN BRANCH, DELHI. 7. POLO LEASING & FINANCE PVT. LTD. A-4/181, SECTOR 17, ROHINI, NEW DELHI CIN:U74899DL1995PTC071396 03/08/95 ACTIVE WARD 14(3) DELHI 250,000 2,500,000 821361 15/03/2000 2846 VIJAYABANK RAM NAGAR PAHARGANJ, NEW DELHI. 8. RAJKAR ELECTRICALS & ELECTRONICS PVT. LTD. 16B/9, DB GUPTA ROAD, DEV NAGAR, NEW DELHI CIN:U99999DL1996PTC084137 30/12/96 ACTIVE WARD 15(2) DELHI 250,000 2,500,000 454267 25/03/2000 2242 VIJAYABANK RAM NAGAR PAHARGANJ, NEW DELHI 9. MAESTRO MARKETING & ADVERTISING P. LTD W/58, JANKI VIHAR, PREM NAGAR, NANGLOI, NEW DELHI. CIN:U99999DL1997PTC086268 31/03/97 ACTIVE WARD 6(1) DELHI 250,000 2,500,000 55833 28/03/2000 07CA1106866 BANK OF PUNJAB LTD. SECTOR-8, ROHINI, DELHI 10. FAIR AND SQUARE EXPORT PVT. LTD. A-24, TAGORE GARDEN EXT., NEW DELHI CIN:U51909DL1989PTC037147 28/07/89 ACTIVE WARD11(2) DELHI 250,000 2,500,000 884907 04/02/2007 VIJAYABANK RAM NAGAR PAHARGANJ, NEW DELHI 11. SATWANT SINGH SODHI CONSTRUCTIONS PVT. LTD. W2-134, PLOT NO.170, VISHNU GARDEN., NEW DELHI CIN:U45201DL1988PTC030886 08/03/88 ACTIVE WARD 7(4) DELHI 250,000 2,500,000 275275 31/01/2000 07CA1106425 BANK OF PUNJAB LTD. SECTOR-8, ROHINI, DELHI 12. TASHI CONSTRUCTORS PVT. LTD. 8 NAT RAJ, APARTMENTS, PLOT NO.67, I.P. EXT., NEW DELHI CIN:U99999DL1996PTC080536 22/07/96 ACTIVE WARD 16(1) DELHI 250,000 2,500,000 820378 21/02/2000 2837 VIJAYABANK RAM NAGAR PAHARGANJ, NEW DELHI 14 13. VIMKA IMPEX PVT. LTD. 1756, NAI BASTI, NAYA BAZAR, DELHI - 6 CIN:U99999DL1994PTC59246 26/05/94 ACTIVE WARD 9(4) DELHI 250,000 2,500,000 625260 01/03/2000 19982/10 PUNJAB NATIONAL BANK CHANDI CHOWK, DELHI 14. PARIVARTAN CAPITAL & FINANCIAL SERVICES PVT. 1798/52, H S ROAD, NAI WALA, KAROL BAGH, NEW DELHI CIN:U99999DL1994PTC063475 14/12/94 ACTIVE WARD 15(1) DELHI 250,000 2,500,000 491564 03/03/2000 01/003317 CORPORATION BANK KAMLA NAGAR, DELHI 15. HARPAL ASSOCIATES PVT. LTD. A-24, II-F, TAGORE MARKET, NEW DELHI-29 CIN:U33111DL1995PTC064906 01/02/95 ACTIVE WARD 12(1) DELHI 250,000 2,500,000 821380 21/03/2000 2047 VIJAYA BANK RAM NAGAR PAHARGANJ, NEW DELHI I HAVE NOTED FROM ABOVE THAT ALL THE SHARE HOLDERS ARE INCORPORATED AND REGISTERED WITH THE CONCERNED REGI STRAR OF COMPANIES, UNDER THE COMPANIES ACT, 1956AND ARE ALLOTTED UNIQU E COMPANY IDENTIFICATION NUMBER BY THE ROC, MINISTRY OF CORPO RATE AFFAIRS, GOVERNMENT OF INDIA AFTER THEY HAVING COMPLETED NEC ESSARY FORMALITIES AND THERE STATUS SHOWN IS ACTIVE. THIS INDICATES THAT COMPANY ARE REGULARLY GETTING ACCOUNTS AUDITED AND FILING WITH ROC AND ALSO INDICATES THAT COMPANIES WERE EXISTING AT THEIR ADDRESSES AT THE MATERIAL TIME. ALL THE SHAREHOLDERS ARE INCOME TAX ASSESSEE AND ARE ASSESSED TO TAX UNDER JURISDICTION OF DIFFERENT ASS ESSING OFFICER AS TABULATED ABOVE. THE GENUINENESS OF THE SHARE SUBSC RIPTION TRANSACTION IS VERIFIABLE FROM IT RECORDS, BANK STATEMENTS OF T HE SUBSCRIBERS AND ALL THE SHAREHOLDERS SHARE APPLICATION FORMS, BOARD RESOLUTION ETC. MOST IMPORTANT OF ALL THAT THE SHAREHOLDERS THROUGH LATEST CONFIRMATIONS CONFIRMED SHARE MONEY TRANSACTIONS, W HICH WERE FILED BEFORE AO AND ARE ALSO AVAILABLE AT PAGE NUMBER 256 -271 OF PAPER BOOK. THE ASSESSEE'S RETRACTION AND ABOVE SUBMISSIO NS AND DOCUMENTARY EVIDENCES HAVE REMAINED UNCONTROVERTED FROM AO AND THERE IS NOTHING ON RECORD FROM AO TO DISBELIEVE TH E IT ASSESSMENT STATUS OR THE BANK ACCOUNT STATEMENTS OR THE ROC CE RTIFICATE OR SHARE APPLICATION FORMS OR THE LATEST CONFIRMATIONS OF TR ANSACTIONS OF THE SHAREHOLDERS. IN THE FACTS AND CIRCUMSTANCES I CONC UR WITH THE DECISION OF GUJRAT HIGH COURT AT KAILASHBEN MANHARLAL CHOKSH I 174 TAXMAN 466 (GUJ) THOUGH RENDERED IN CONTEXT OF ADMISSION U /S, 132(4) AND WHICH HAS GREATER LEGAL SANCTITY THAN ADMISSION U/S . 133A WHICH IS NOT ON OATH THAT ASSESSEE COULD NOT BE SUBJECTED TO ADD ITION MERELY ON THE 15 BASIS OF ADMISSION WHICH IS RETRACTED AND WHERE REV ENUE COULD NOT FURNISH ANY CORROBORATIVE EVIDENCE IN SUPPORT OF SU CH ADMISSION. NOW, I PROCEED TO CHECK MATERIAL FACTS W.R.T SECTIO N 68 WHICH PROVIDES WHERE ANY SUM IS FOUND CREDITED IN THE BOO KS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE O FFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OR EXPLANAT ION OFFERED BY HIM IS NOT SATISFACTORY IN THE OPINION OF AO THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF ASSESSEE OF THAT PREVIOUS YEAR. THEREFORE, TILT: SECTION DEAL WITH CIRCUMSTANCES IN WHICH THE AO MAY CONSIDER SUCH SUM AS CASH CREDIT DUE TO LACK OF SUF FICIENT EVIDENCE. IN THIS BACKGROUND AND REGARDING THE CIRCUMSTANCES AND SUFFICIENT EVIDENCES, IT IS NOTEWORTHY THAT SUPREME COURT HAS HELD IN THE CASE OF ROHINI BUILDERS 254 ITR (ST) 275 (SC) THAT IT IS NO T THE BUSINESS OF THE ASSESSEE TO FIND OUT SOURCE OF MONEY OF HIS CREDITO RS OR GENUINENESS OF THEIR TRANSACTIONS IN CASE THE AO WAS NOT SATISFIED WITH THE CASH AMOUNT DEPOSITED BY THOSE ALLEGED CREDITORS IN THEI R BANK ACCOUNTS, THE PROPER COURSE WOULD HAVE BEEN TO MAKE ASSESSMEN TS IN THE CASES OF THOSE CREDITORS BY TREATING THE CASH DEPOSITS IN THEIR BANK ACCOUNTS AS UNEXPLAINED INVESTMENTS OF THOSE CREDITORS UNDER S. 69. THE ASSESSEE HAD FURNISHED COMPLETE DETAILS OF THE CRED ITORS ALONG WITH THEIR GIR NUMBERS AND THE PAN NUMBERS, AS WELL AS T HE CONFIRMATIONS WITH THE COPIES OF THE ASSESSMENT ORDERS OF THE IND IVIDUAL CREDITORS. THE CASH CREDITS COULD NOT BE SAID TO BE NON-GENUIN E ON THE GROUND THAT THE SUMMONS THAT HAD BEEN ISSUED TO SOME OF TH E CREDITORS COULD NOT BE SERVED OR THEY FAILED TO APPEAR BEFORE THE A O. THE ASSESSEE HAS DISCHARGED HIS ONUS. IN NEMI CHAND KOTHARI 264 ITR 254 (GAU) IT WAS HELD THAT WHERE ASSESSEE HAD GIVEN FULL PARTICU LARS OF THE CREDITORS AND THE CREDITED AMOUNTS WERE PAID BY CREDITORS BY ACCOUNT PAYEES CHEQUE AND THE ASSESSEE HAS ESTABLISHED THE IDENTIT Y OF CREDITORS, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF CREDITORS. THE BURDEN HAS SHIFTED TO AO TO PROVE THE CONTRARY. THE SAME HIGH COURT IN THE CASE JALAN TIMBERS 223 ITK 11 (GAU) HAS HELD THAT WHERE ITO ACCEPTED RETURNS OF CREDITORS IT SHOULD GO TO MEAN THAT THE AMOUNTS GIVEN BY CREDITORS ARE GENUINE. THE SAME COURT IN T HE CASE KHANDELWAL CONSTRUCTIONS 227 ITR 900 (GAU) HAS LAID DOWN THAT SECTION 68 EMPOWERS AO TO MAKE ENQUIRY REGARDING CA SH CREDIT. IF HE IS SATISFIED THAT THESE ENTRIES ARE NOT GENUINE HE HAS EVERY RIGHT TO ADD THESE AS INCOME FROM OTHER SOURCES. BUT BEFORE REJE CTING THE ASSESSEE EXPLANATION THE AO MUST MAKE PROPER ENQUIRIES. AND IN THE ABSENCE 16 OF PROPER ENQUIRIES ADDITION CANNOT BE SUSTAINED IN APPEAL. ALSO, IN THE STATED CASE LOVELY EXPORTS P. LTD 216 CTR 195 (SC) SUPREME COURT HELD THAT WHERE THE ASSESSEE HAD GIVEN DETAILS OF T HE SUBSCRIBING SHARE APPLICANTS. IN CASE THE DEPARTMENT ALLEGED THAT APP LICANTS WERE BOGUS, IT WAS FREE TO PROCEED AGAINST THE APPLICANTS. THE SHARE APPLICATION MONEY RECEIVED COULD NOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE COMPANY. AFTER CONSIDERING THE MATERIAL FACTS AND FOLLOWING PRONOUNCEMENTS OF COURTS IN SIMILAR FACTS AND CIRCU MSTANCES, I AM OF THE VIEW THAT ASSESSEE HAS ESTABLISHED THE IDENTITY OF THE 16 SHARE SUBSCRIBER'S, THEIR CREDITWORTHINESS AND THE GENUIN ENESS OF THE SHARE TRANSACTION WITH DOCUMENTARY EVIDENCE AND AS PER LA W. ALSO, THE ASSESSEE EXPLAINED AND SUBSTANTIATED THE NATURE AND SOURCE OF CREDITS FOUND CREDITED IN THE BOOKS OF ACCOUNTS DURING THE RELEVANT FINANCIAL YEAR AS PER REQUIREMENTS OF SECTION 68 OF THE IT AC T,1961. I THEREFORE HOLD THAT ADDITION OFRS. 3.85 CRORES AS UNEXPLAINED CASH CREDITS IS NOT MAINTAINABLE AS PER LAW AND FACTS OF THE CASE. ACCO RDINGLY, THE SAID ADDITION OF RS.3,85,00,000/- IS DIRECTED TO BE DELE TED. 51. GROUND NOS.6 & 7 ARE IN RESPECT OF ADDITION OF RS.96,250/- AS UNEXPLAINED EXPENDITURE BEING COMMISSION @ 25 PAISE PER 100 RUPEES PAID FOR ARRANGING ENTRIES OF RS.3,85,00,000/-. SIN CE THIS ADDITION IS CONSEQUENTIAL TO THE ADDITION OF RS.3,85,00,000/- B EING THE ACCOMMODATION ENTRY, SAME IS DIRECTED TO BE DELETED AS THE MAIN ADDITION OF RS.3,85,00,000/- HAS ALREADY BEEN DIRE CTED TO BE DELETED IN VIEW OR THE DETAILED REASONS CONTAINED IN MY PRE CEDING PARAS. 10. ON PERUSAL OF THE FIRST APPELLATE ORDER ON THE ISSUE, WE FIND THAT THE LEARNED CIT(APPEALS) HAS DISCUSSED THE ISSUE IN DET AIL AND HAS INCORPORATED THE CASE OF THE ASSESSING OFFICER AND OF THE ASSESS EE MEETING OUT THE OBJECTIONS RAISED BY THE ASSESSING OFFICER JUSTIFYI NG THE ADDITIONS WHICH RUNS IN PAGE NOS. 1 TO 42 OF THE FIRST APPELLATE OR DER. IN HIS FINDINGS, IN PARA NO. 50 WHICH ALSO RUNS IN SEVEN PAGES, THE LEARNED CIT(APPEALS) HAS MET 17 OUT THE EVERY IMPORTANT ASPECT OF THE CASE SATISFYI NG THE INGREDIENTS OF SEC. 68 OF THE ACT TO JUSTIFY THE DELETION OF THE ADDITI ON. HE NOTED THAT THE SHARE CAPITAL OF RS.3.85 CRORES RAISED FROM SIXTEEN COMPA NIES IS DULY ACCOUNTED FOR AS SHARE CAPITAL IN THE BOOKS OF ACCOUNT DULY DISCL OSED AS SHARE CAPITAL IN THE AUDITED BALANCE SHEET FILED ALONG WITH THE RETURN O F INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION BEFORE THE DATE OF SURVEY. S/SHRI MUKESH GUPTA, SURENDER PAL SINGH AND RAJAN JASSAL I N THEIR STATEMENTS HAS NOT NAMED THE ASSESSEE COMPANY AS HAWALA OPERATOR A ND THEY HAVE NOT DENIED THE INVESTMENT IN THE ASSESSEE COMPANY. HE N OTED THAT THE STATEMENT OF THE ABOVE PARTIES CANNOT BE THE BASIS TO MAKE TH E ADDITIONS IN ASSESSMENTS ESPECIALLY WHEN ASSESSEE HAS SHOWN THAT CONTENTS OF THE SAID STATEMENTS ARE DOUBTFUL AND DISTINGUISHED FROM THE FACTS OF THE AS SESSEE COMPANY AND THAT ALL THE SIXTEEN SHAREHOLDER COMPANIES HAVE CONFIRME D THE TRANSACTION WITH THE ASSESSEE COMPANY VIDE LATEST CONFIRMATION AND A LL CONFIRMATIONS ARE AFTER THE DATE OF THE STATEMENTS OF THE ABOVE THREE PERSO NS. HE NOTED FURTHER THAT THOSE CONFIRMATIONS REMAINED UNDISPUTED. THE LEARNE D CIT(APPEALS) HAS NOTED FURTHER THAT FIVE INVESTORS, NAMELY, HARPAL A SSOCIATES (P) LTD., CHITRAGANDHA INVESTMENTS & CONSULTANTS (P) LTD., PA RVANTRA CAPITAL & FIN SERVICES (P) LTD., VIMKA IMPEX (P) LTD. AND SGC PUB LISHING (P) LTD. DO NOR FIND ANY MENTION IN THE STATEMENTS OF ABOVE THREE P ERSONS AND NO MATERIAL IS 18 AVAILABLE ON RECORD DURING ASSESSMENT PROCEEDINGS F OR THE BASIS TO JUSTIFY ANY ADDITION IN THESE COMPANIES. THE LEARNED CIT(AP PEALS) HAS NOTED FURTHER THAT THERE IS NO NEXUS BETWEEN THE ADDITION S OF RS.3.85 CRORES AND SURVEY MATERIAL THAT COULD SUPPORT THE ADDITION. TH E ADDITION WAS MADE NOT ON THE BASIS OF ANY EVIDENCE FOUND DURING THE COURS E OF SURVEY BUT ON THE BASIS OF STATEMENTS OF SHRI ARVIND KUMAR GUPTA RECO RDED DURING THE SURVEY. SHRI ARVIND KUMAR GUPTA ON THE BASIS OF WHOSE STATE MENTS, THE ADDITION IS MADE HAS SPECIFICALLY ADMITTED IN QUESTION NOS. 18 & 21 OF THE STATEMENTS THAT DETAILS AND GENUINENESS OF SHARE CAPITAL IS AS PER THE SHAREHOLDERS REGISTER AND THERE IS NO INCRIMINATING MATERIAL FOU ND DURING SURVEY. ALSO THAT THE VERY BASIS OF QUESTION NO. 22 THAT CHEQUES ARE ACCOMMODATION ENTRIES IN LIEU OF CASH DEPOSIT WITH THEM IN ANY OF THEIR ACCO UNTS IS NOT SUPPORTED BY MATERIAL OR BANK STATEMENT OF ANY ACCOUNT PRODUCED ON RECORD EITHER DURING SURVEY OR ASSESSMENT TO JUSTIFY THAT QUESTION NO.22 WAS FACTUAL AND BONA FIDE. THE LEARNED CIT(APPEALS) HAS NOTED FURTHER TH AT AS PER MATERIAL PRODUCED BY ASSESSEE (PAGE NOS. 253 TO 255 OF THE P APER BOOK ), THE SUB- SOURCE OF SHARE CAPITAL OF RS.3.85 CRORES, EXCEPT A N INSIGNIFICANT AMOUNT OF RS. 84,858 THAT TOO IS SUM TOTAL OF MISCELLANEOUS S MALL AMOUNTS HAVE BEEN MADE THROUGH CHEQUES DULY CREDITED IN BANK ACCOUNTS OF SHAREHOLDERS. THEREAFTER THE LEARNED CIT(APPEALS) AT PAGE NOS.44 TO 46 OF THE FIRST 19 APPELLATE ORDER HAS NOTED ABOUT THE PARTICULARS AND DOCUMENTS OF 16 SHAREHOLDERS FURNISHED BY THE ASSESSEE TO CORROBORA TE THE SUBMISSIONS AND HIGHLIGHTING THE IDENTITY AND CREDITWORTHINESS OF T HE SHAREHOLDERS AND GENUINENESS OF SHARES SUBSCRIPTION TRANSACTIONS. TH E LEARNED CIT(APPEALS) HAS NOTED FURTHER THAT ALL THE SHAREHOLDERS ARE INC ORPORATED AND REGISTERED WITH THE CONCERNED REGISTAR OF COMPANIES UNDER THE COMPANIES ACT, 1956 AND ARE ALLOTTED COMPANY IDENTIFICATION NUMBER BY T HE ROC, MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA AFTER THEY H AVING COMPLETED NECESSARY FORMALITIES AND THEIR STATUS SHOWN IS ACT IVE. HE NOTED FURTHER THAT ALL THE SHAREHOLDERS ARE INCOME-TAX ASSESSEES AND A RE ASSESSED TO TAX UNDER JURISDICTION OF DIFFERENT ASSESSING OFFICERS. THE G ENUINENESS OF THE SHARE SUBSCRIPTION TRANSACTION IS VERIFIABLE FROM I.T. RE CORDS, BANK STATEMENTS OF THE SUBSCRIBERS AND ALL THE SHARE HOLDERS SHARE APP LICATION FORM, BOARDS RESULATION ETC. BESIDES, THE SHAREHOLDERS HAVE CONF IRMED THE SHARE MONEY TRANSACTION WHICH WERE PRODUCED BEFORE THE ASSESSIN G OFFICER. AT THE CONCLUSION OF THE PARAGRAPH, THE LEARNED CIT(APPEAL S) HAS DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION ON THE BAS IS THAT THE ASSESSEE HAS ESTABLISHED THE IDENTITY OF THE 16 SHARE-SUBSCRIBER S, THEIR CREDITWORTHINESS AND GENUINENESS OF THE SHARE TRANSACTIONS WITH DOCU MENTARY EVIDENCE AS PER LAW. ALSO THAT THE ASSESSEE EXPLAINED AND SUBSTANTI ATED THE NATURE AND SOURCE 20 OF CREDITS FOUND CREDITED IN THE BOOKS OF ACCOUNT D URING THE RELEVANT FINANCIAL YEAR. IN ABSENCE OF REBUTTAL OF THESE MAT ERIAL FINDINGS OF THE LEARNED CIT(APPEALS) BY THE REVENUE, WE DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. THE GROUNDS ARE ACCORDINGLY REJECTED. 11. IN RESULT, THE APPEAL IS DISMISSED. C.O. NO.28/DEL/2009 : 12. DURING THE COURSE OF HEARING, THE LEARNED AR DI D NOT PRESS THIS CROSS- OBJECTION. WE THUS DISMISS THE CROSS OBJECTION AS H AVING BEEN WITHDRAWN. 13. IN RESULT, BOTH THE APPEAL AND CROSS-OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.03.201 5 SD/- SD/- ( PRAMOD KUMAR ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31/03/2015 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 21 DATE DRAFT DICTATED ON COMPUTER 18.03.2015 DRAFT PLACED BEFORE AUTHOR 18.03.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 31.03.2015 KEPT FOR PRONOUNCEMENT ON 31.03.2015 FILE SENT TO THE BENCH CLERK 31.03.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.