DCIT, New Delhi V. M/s. Dia Realtors Pvt. Ltd., New Delhi

ITA 5362/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4333 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIDHI SRIVASTAVA
• Keywords: Share purchase agreement
• Section: 143(3); 133(6); 251; 13; 22; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER I.T.A. NO.5362/DEL/2016 ASSESSMENT YEAR 2010-11 DCIT, CIRCLE-7(2), NEW DELHI V. /S. DIA REALTORS PVT. LTD., 506, SURYA KIRAN BUILDING, 9, K.G. MARG, CONNAUGHT PLACE, NEW DELHI. TAN/PAN: AACCD5882G (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAKESH JOSHI, CA AND SHRI ANUJ JAIN, CA RESPONDENT BY: MS. NIDHI SRIVASTAVA, CIT-D.R. DATE OF HEARING: 04 08 2021 DATE OF PRONOUNCEMENT: 31 08 2021 O R D E R PER AMIT SHUKLA, J. M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 12.07.2016, PASSED BY LD. CIT(APPEALS)-III, DELHI FOR THE QUANTUM OF ASSESSME NT PASSED U/S.143(3) FOR THE ASSESSMENT YEAR 2010-11. IN THE GROUNDS OF APPEAL, THE REVENUE HAS RAISED FOLLOWING GROUNDS . 1. LD. CIT(A) ERRED IN LAW AND ON FACTS OF THE CAS E IN DELETING THE ADDITION OF RS.48,00,00,000/- MADE BY ASSESSING OFFICER U/S.68 OF THE INCOME TAX ACT. 2. LD. CIT(A) ERRED IN LAW AND ON FACTS OF THE CASE IN NOT ALLOWING THE ASSESSING OFFICER AN OPPORTUNITY TO CR OSS EXAMINE THE DIRECTORS OF THE COMPANIES PRODUCED BEFORE HIM. I.T.A. NO.5362/DEL/2016 2 3. LD. CIT(A) ERRED IN LAW AND ON FACTS OF THE CASE IN ALLOWING RELIEF TO THE APPELLANT IN RESPECT OF THE ENTITY I.E. M/S. SUPERSONIC CONSTRUCTION (P) LTD. WHOSE DIRECTOR WAS NOT PRODUCED BEFORE HIM. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF DEVELOPMENT, SALE AND LE ASING OF IMMOVABLE PROPERTY. THE RETURN OF INCOME WAS FILED U/S.139(1) ON 28.09.2010 DECLARING INCOME OF RS.73, 28,873/- WHICH WERE PROCESSED U/S.143(1). THEREAFTER, THE AS SESSEES CASE WAS SELECTED FOR SCRUTINY BY ISSUANCE OF NOTIC E U/S. 143(2). LD. ASSESSING OFFICER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE-COMP ANY HAS RAISED AN EQUITY SHARE CAPITAL OF RS.1,17,50,00 0/- FOR 1175000 EQUITY SHARES BEARING FACE VALUE OF RS.10/- EACH FOR WHICH IT HAS RECEIVED PREMIUM OF 45,82,50,000/- I.E ., THE PREMIUM OF RS.390/- PER SHARE. THE SHARE CAPITAL WA S RECEIVED FROM FOLLOWING INVESTORS: NAME OF INVESTOR AMOUNT INVESTED (RS.) SHARES ALLOTTED 1. M/S. LASER FINANCIAL AND PROJECT CONSULTANTS P. LTD. 7,00,00,000 1,75,000 2. M/S. SUPERSONIC CONSTRUCTION P. LTD. 10,00,00,000 2,50,000 3. M/S. OPERA COMPU SOFT P. LTD. 10,00,00,000 2,50,000 4. M/S. CORTEX SOFTECH P. LTD. 20,00,00,000 5,00,000 TOTAL 47,00,00,000 I.T.A. NO.5362/DEL/2016 3 3. LD. ASSESSING OFFICER REQUIRED THE ASSESSEE TO F URNISH VARIOUS DETAILS AS INCORPORATED BY HIM IN PARAGRAPH 3.2 IN HIS ORDER. THE ASSESSING OFFICER ALSO SENT NOTICES U/S. 133(6) TO ALL THE ABOVE NAMED SHAREHOLDERS OF THE ASSESSEE CO MPANY, CALLING UPON FOLLOWING DETAILS.: A. COPIES OF INCOME TAX RETURNS, COMPUTATION OF INCOME , BALANCE SHEET AND CAPITAL ACCOUNT WITH ANNEXURE AND SCHEDULES THERETO FOR A.Y. 2010-11. B. EXTRACT OF BANK STATEMENT FOR A.Y. 2010-11 REFL ECTING THE RELEVANT ENTRIES IN RELATION TO TRANSACTIONS WI TH THE ABOVE NAMED ASSESSEE COMPANY. C. DETAILS' OF ALL THE DIRECTORS, INCLUDING THEIR INCOME TAX RETURNS, COMPUTATION OF INCOME, CAPITAL ACCOUNTS, I NCOME & EXPENDITURE ACCOUNT AND BALANCE SHEET WITH ANNEXURE S AND SCHEDULES THERETO FOR A.Y. 2010-11. D. ANY OTHER INFORMATION IN CONNECTION WITH THE TRANSACTIONS WITH THE ABOVE NAMED ASSESSEE COMPANY DURING THE YEAR. 4. AFTER DETAILED DISCUSSION AND BASED ON HIS INQUI RY WHICH SHALL BE DISCUSSED IN DETAIL HEREINAFTER IN A SUCCE EDING PARAGRAPHS, ASSESSING OFFICER HAS TREATED THE ENTIR E SHARE CAPITAL AND PREMIUM RECEIPT OF SUMS AGGREGATING TO RS.40 CRORE U/S.68 OF THE IT ACT. 5. BEFORE THE LD. CIT (A), THE ASSESSEE HAS FILED A LL THE RELEVANT EVIDENCES WHICH WERE FILED BEFORE THE ASSE SSING OFFICER AND GAVE REBUTTAL OF EACH AND EVERY OBSERVA TION AND I.T.A. NO.5362/DEL/2016 4 FINDING OF THE ASSESSING OFFICER MADE IN THE ASSESS MENT ORDER. IT WAS BROUGHT ON RECORD BY THE ASSESSEE THAT ALL T HE FOUR COMPANIES HAVE DULY COMPLIED WITH TO THE STATUTORY NOTICES SENT U/S 133(6) AND FILED THE REQUISITE DETAILS DIR ECTLY TO THE ASSESSING OFFICER, WHICH GOES TO ESTABLISH THE IDEN TITY AND CREDITWORTHINESS OF THE INVESTORS AND GENUINENESS O F THE TRANSACTIONS. THE DIRECTORS OF THE COMPANIES WHO AP PEARED BEFORE THE DDIT, INVESTIGATION WING, NEW DELHI WERE NOT EXAMINED NOR ASSESSING OFFICER ISSUED SUMMONS FOR APPEARANCE U/S 131(1)(D) FOR APPEARANCE AS ALL WERE BASED OUTSIDE STATION. LD. CIT (A) THEN DIRECTED THE ASSE SSEE TO PRODUCE THE DIRECTORS OF THE 3 COMPANIES FOR VERIFI CATION AND DEPOSITION AND TO FILE REQUISITE DETAILS TO ESTABLI SH THE IDENTITIES, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IN RESPONSE, ALL THE DIRECTORS WERE DU LY PRODUCED DURING APPELLATE PROCEEDINGS, WHO WERE EXAMINED DUR ING THE COURSE OF APPELLATE PROCEEDINGS. THE RELEVANT OBSER VATION OF THE LD. CIT (A) IN THIS REGARD READS AS UNDER: THE COUNSEL VIDE ORDER SHEET ENTRY DATED 1ST OF FE BRUARY 2016 WAS DIRECTED BY THIS OFFICE TO PRODUCE THE DIR ECTORS OF THE COMPANIES FOR THE VERIFICATION AND FILE REQUISITE D ETAILS TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUIN ENESS OF THE TRANSACTION AS HELD BY HON'BLE JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS. NR PORTFOLIO PVT. LTD. SH. SUND ER LAL JAIN DIRECTOR OF M/S LASER FINANCIAL AND PROJECT CONSULT ANTS PVT. LTD. ATTENDED THE PROCEEDINGS IN THIS OFFICE AND FI LED THE VARIOUS DETAILS. HE CATEGORICALLY STATED THAT THE C OMPANY HAS SUBSCRIBED TO THE SHARE CAPITAL OF THE COMPANY AND THE SHARES I.T.A. NO.5362/DEL/2016 5 WERE ALLOTTED TO THEM AT THE PREMIUM. SH. SUNDER LA I JAIN FILED THE COPY OF THE ASSESSMENT ORDER OF M/S LASER FINANCIAL AND PROJECT CONSULTANTS PVT. LTD. FOR THE A.Y.2010- 11. THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER U NDER SECTION 143(3) OF THE ACT. IT IS WORTH NOTING THAT THE COMPANY FILES THE RETURN OF INCOME IN THE SAME RANGE WHEREI N THE ASSESSING OFFICER HAS ASSESSED THE INCOME OF THE AS SESSEE. THE ASSESSING OFFICER HAS MENTIONED THAT THE COMPAN Y IS A NON BANKING FINANCIAL COMPANY ENGAGED IN THE BUSINE SS OF FINANCE AND INVESTMENT. THE COPY OF THE BALANCE SHE ET FILED SHOWS THAT THERE IS RESERVE AND SURPLUS OF RS.48,52 ,02,414 AS ON 31ST OF MARCH 2010. 6. SH. DEEPAK MITTAL DIRECTOR IN M/S OPERA COMPU SOFT PRIVATE LTD. AND M/S SUPERSONIC CONSTRUCTIONS PVT. LTD. ATTENDED THE PROCEEDINGS ON 10.03.2016 AND FILED TH E REQUISITE DETAILS AND CATEGORICALLY CONFIRMED THAT BOTH THE COMPANIES HAVE MADE THE SUBSCRIPTION TO THE SHARE C APITAL OF THE COMPANY AT THE PREMIUM. IT WAS FURTHER SUBMITTE D THAT THE SHARE HOLDING WAS FURTHER SOLD BY THEM TO M/S GREEN VIEW DISTRIBUTORS PVT. LTD. ON 31.03.2010 AT PREMIUM AND BOTH THE COMPANIES HAVE NO RELATIONSHIP WITH M/S GREENVIEW DISTRIBUTIONS PVT. LTD. THE EVIDENCES ADDUCED DURIN G THE APPELLATE PROCEEDINGS SHOW THAT M/S OPERA COMPUSOFT PVT. LTD. WAS SET UP TO DEAL IN COMPUTER SOFTWARE WITH A HORDE OF OTHER OBJECTS INCLUDING THAT OF INVESTMENT IN PURCH ASE AND SALE OF MOVEABLE/ IMMOVEABLE PROPERTIES /ASSETS / R IGHTS / SHARES AND DEBENTURES ETC. THE COMPANY IS HAVING SH ARE CAPITAL AND RESERVE AND SURPLUS OF RS.43,36,74,657 AS ON I.T.A. NO.5362/DEL/2016 6 31.03.2010. 7. M/S SUPERSONIC CONSTRUCTIONS PVT. LTD. IS REGULA RLY ASSESSED TO THE TAX AND ENGAGED IN THE BUSINESS OF INFRASTRUCTURE DEVELOPMENT, REAL ESTATE PROMOTERS A ND DEVELOPERS, PROJECT MANAGEMENT ETC. THE COMPANY IS HAVING CAPITAL AND RESERVE AND SURPLUS OF RS.47,26,68,876 AS ON 31.03.2010. 8. SH. BHARAT GUPTA DIRECTOR OF M/S CORTEX SOFTECH PRIVATE LTD. ATTENDED THE PROCEEDINGS IN THIS OFFIC E ON 18.03.2016 AND FILED THE VARIOUS DETAILS. HE CATEGO RICALLY STATED THAT THE COMPANY HAS SUBSCRIBED TO THE SHARE CAPITAL OF THE COMPANY AND THE SHARES WERE ALLOTTED TO THEM AT THE PREMIUM. SH. BHARAT GUPTA STATED THAT THE COMPANY I S REGULARLY ASSESSED TO TAX AND FILED THE COPY OF THE ASSESSMENT ORDER FOR THE A.Y.2010-11 MADE UNDER SEC TION 143(3) OF THE ACT. THE ASSESSMENT HAS BEEN MADE BY THE ASSESSING OFFICER ON 13.03.2013. IT HAS BEEN STATED BY THE DIRECTOR THAT THE COMPANY WAS SET UP TO DEAL IN COM PUTER SOFTWARE, SALE AND PURCHASE OF THE MOVEABLE/IMMOVEA BLE PROPERTIES, ASSETS AND SHARES AND DEBENTURES. THE C OPY OF THE BALANCE SHEET FILED BY THE ASSESSEE SHOWS THAT THE COMPANY IS HAVING SHARE CAPITAL AND RESERVES AND SU RPLUS OF RS.48,17,20,318 AS ON 31.03.2010. IT IS FURTHER OBS ERVED THAT THE COMPANY HAS SOLD THE INVESTMENT ON 31.03.2 010 TO M/S GREENVIEW DISTRIBUTORS PVT. LTD., DELHI. 9. HAVING REGARD TO THE ABOVE, I FIND THAT THE ASSE SSEE HAD PLACED ON THE RECORD CONFIRMATIONS, INCOME TAX RETU RNS, COPIES OF THE BANK STATEMENTS AND SHARE- APPLICATIO N FORMS I.T.A. NO.5362/DEL/2016 7 FROM EACH OF THE SHARE-HOLDERS. IT IS NOTED FROM TH E DOCUMENTARY EVIDENCE ADDUCED DURING THE ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS THAT THE COMPANIES WH O SUBSCRIBED TO THE SHARE CAPITAL ARE HAVING THEIR OW N PROFIT MAKING APPARATUS AND REGULARLY FILE THE TAX RETURNS . THE SHARE CAPITAL HAS BEEN SUBSCRIBED FROM THE RESERVE AND SURPLUS AVAILABLE WITH THE COMPANIES. THE SCRUTINY OF THE BANK STATEMENTS REVEALED THAT THERE ARE NO CASH DEP OSITS IN THE BANK ACCOUNTS. THERE ARE NO FRESH BORROWINGS MA DE BY THE COMPANIES FOR SUBSCRIBING TO THE SHARE CAPITAL OF THE ASSESSEE. THE POSITION OF FUNDS WITH THE COMPANIES IS AS UNDER:- S.NO NAME F.Y. 2008-09 F.Y. 2009-10 1 . OPERA COMPUSOFT PVT.LTD. SHARE CAPITAL SHARE PREMIUM 17,440,000.00 416,160,000.00 17,440,000.00 416,160,000.00 2. SUPERSONIC CONSTRUCTION PVT. LTD. SHARE CAPITAL SHARE PREMIUM 451.192.919.00 472.642.919.00 451.218.876.00 472.668.876.00 3. LASER FINANCIAL & PROJECTS CONSULTANTS PVT. LTD. SHARE CAPITAL SHARE PREMIUM 17.072.500.00 484.327.500.00 17.072.500.00 484.327.500.00 4. CORTEX SOFTECH PRIVATE LTD. SHARE CAPITAL SHARE PREMIUM 19,475,000.00 457,545,318.00 24,175,000.00 468,191,857.00 IN THE CASE OF THE COMPANIES AT SERIAL NO.3 & 4 THE ASSESSMENT ORDERS FOR THE ASSESSMENT YEAR 2010-11 HAVE BEEN MA DE BY THE ASSESSING OFFICER U/S.143(3) OF THE ACT. 6. AFTER REFERRING TO THE VARIOUS JUDGMENTS, HE HAS DELETED THE ADDITION IN THE FOLLOWING MANNER: I.T.A. NO.5362/DEL/2016 8 10. IN THE INSTANT CASE, THE APPELLANT HAS FILED T HE CONFIRMATIONS, BANK STATEMENTS, SHARE APPLICATION F ORMS AND OTHER DOCUMENTARY EVIDENCES. THE DIRECTORS OF THE C OMPANIES MADE THE PERSONAL DISPOSITION IN THIS OFFICE AND CA TEGORICALLY CONFIRMED THAT THE COMPANIES ARE DOING THE GENUINE BUSINESS FOR THE LAST MANY YEARS AND HAVE THEIR OWN PROFIT M AKING APPARATUS. THE SHARE CAPITAL HAS BEEN SUBSCRIBED FR OM THE RESERVES AND SURPLUS AVAILABLE WITH THE COMPANIES A ND THERE ARE NO FRESH BORROWINGS MADE DURING THE YEAR TO SUB SCRIBE TO THE SHARE CAPITAL. THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS. SVP BUILDERS (INDIA) LTD. HELD THAT WHERE INVES TOR COMPANIES OF ASSESSEES WERE REGULARLY ASSESSED TO T AX AND THEY HAD CONFIRMED THAT THEY HAD SUBSCRIBED TO SHAR E CAPITAL OF THE ASSESSES, IN VIEW OF FACT THAT ASSESSING OFF ICER HAD NOT UNDERTAKEN ANY PARTICULAR INVESTIGATION INTO AFFAIR S OF SAID COMPANIES APART FROM ISSUANCE OF NOTICES UNDER SECT ION 131 WHICH WERE DULY RESPONDED TO, ADDITION MADE UNDER S ECTION 68 COULD NOT BE SUSTAINED. THE FACTS OF THE CASE ST ATE THAT THE LENDERS HAVE RECEIVED THE SHARE CAPITAL AND SHARE P REMIUM IN THE PRECEDING YEAR TO THE YEAR UNDER CONSIDERATION AND ACCORDINGLY ADDITION UNDER SECTION 68 MAY BE MADE I N THE CASES OF THE LENDERS AS HELD BY HON'BLE APEX COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD. '2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDISCLOSED INCOME UNDER SECTION 68 OF INCOME-TAX A CT, 1961? WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITI ON FORTHE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY I S RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSIN G I.T.A. NO.5362/DEL/2016 9 OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW . HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT....' IN VIEW OF THE AFORESAID FACTS ON THE RECORD, IT IS HELD THAT THE APPELLANT HAS ESTABLISHED THE IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE TRANSACTIONS. THE ASSESSING OFFI CER IS DIRECTED TO DELETE THE ADDITION MADE U/S. 68 OF THE ACT AND MODIFY THE ORDER OF ASSESSMENT ACCORDINGLY. 7. BEFORE US, LD. DR AFTER REFERRING TO VARIOUS OBS ERVATIONS OF THE ASSESSING OFFICER SUBMITTED THAT, FIRST OF A LL, ASSESSING OFFICER HAS GIVEN DETAIL ANALYSIS OF THE NATURE OF INQUIRY CONDUCTED BY HIM IN THE IMPUGNED ORDER WHICH GOES T O ESTABLISHED THAT THESE COMPANIES DID NOT HAVE CREDITWORTHINESS TO GIVE SUCH A HUGE AMOUNT OF SHAR E CAPITAL AND PREMIUM TO THE ASSESSEE-COMPANY AND THEIR VERAC ITY WAS ALSO DOUBTFUL. HE THUS STRICTLY RELIED UPON THE ORD ER OF THE ASSESSING OFFICER. 8. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ASSESSEE-COMPANY BEFORE THE LD. ASSESSING OFFIC ER IN ORDER TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THE INVESTORS AND THE GENUINENESS OF THE TRANSACTION HAS FILED FOLLOW ING DOCUMENTS: THE APPELLANT FILED THE FOLLOWING DOCUMENTS FOR EST ABLISHING IDENTITY OF THE SHARE APPLICANTS: I.T.A. NO.5362/DEL/2016 10 COMPLETE NAMES AND ADDRESSES OF THE NEW SHARE HOLDE R COMPANIES, DULY INTIMATING WHEREVER THERE WAS A CHA NGE IN ADDRESS. RESPECTIVE INVESTOR COMPANY'S MASTER DETAILS, AS PER RECORDS OF THE REGISTRAR OF COMPANIES, SHOWING CIN AND OTHE R LATEST PARTICULARS OF THE RESPECTIVE COMPANY. PHOTOCOPY OF PAN CARD/PAN LETTER OF ALL THE INVE STOR COMPANIES ACKNOWLEDGEMENT PORTION OF THE INCOME TAX RETURN S OF ALL THE INVESTOR COMPANIES AS E-FILED BY THEM FOR THE A.Y. 2010-11 WITH THE INCOME TAX DEPARTMENT. THE APPELLANT FILED THE FOLLOWING DOCUMENTS FOR EST ABLISHING CREDITWORTHINESS OF THE SHARE APPLICANTS: DETAILS OF FUNDS OF THE SHARE APPLICANTS SHOWING THEIR RESPECTIVE NET WORTH AS ON 31.03.2010 AND 31.03.200 9, ALONG WITH THEIR RESPECTIVE AUDITED FINANCIAL STATEMENTS/ FINAL ACCOUNTS AS ON 31.03.2010. A COPY OF THE BANK ACCOUNT STATEMENT OF EACH PAR TY FOR THE RELEVANT ACCOUNTING PERIOD, SHOWING RELEVANT ENTRIE S OF DEBIT AND CREDIT. IN ORDER TO PROVE GENUINENESS OF THE TRANSACTIONS, THE FOLLOWING EVIDENCE WAS FILED BEFORE LD. AO: COPIES OF DULY FILLED-IN SHARE APPLICATION FORMS , AS HAD BEEN SUBMITTED BY ALL THE FOUR SHARE HOLDERS. A COPY OF BANK STATEMENT OF EACH PARTY AS ALSO T HAT OF THE APPELLANT COMPANY FOR THE RELEVANT ACCOUNTING PERIO D SHOWING ENTRIES OF DEBIT AND CREDIT FOR THE INVESTMENT. I.T.A. NO.5362/DEL/2016 11 A COPY OF FORM-2, AS FILED BY THE APPELLANT COMP ANY WITH THE ROC, SHOWING ALLOTMENT OF SHARES TO THE SHARE APPLI CANTS CONCERNED. CONFIRMATION OF INVESTMENT FROM THE RESPECTIVE S HAREHOLDERS. 9. NOWHERE THE ASSESSING OFFICER HAS COMMENTED UPON THESE DOCUMENTARY EVIDENCES, NOR HAS HE DISCUSS IT IN THE ENTIRE ASSESSMENT ORDER, NEITHER HE HAS FOUND ANY DISCREPANCY / FAULT IN THE EVIDENCES FILED BY THE A SSESSEE NOR HAS REJECTED THE SAME. 10. IN SO FAR AS VARIOUS ALLEGATIONS OF THE ASSESSI NG OFFICER AND THE ASSESSEES EXPLANATION BEFORE THE LD. CIT ( A) AND BEFORE US, IS HIGHLIGHTED HEREIN BELOW: NOTICE ISSUED U/S 133(6) OF THE INCOME TAX ACT, 1961 RETURNED UNSERVED IN ONE CASE. THE LD AO ISSUED NOTICES U/S 133(6) OF THE I. T. AC T, 1961 TO ALL THE FOUR NEW SHARE HOLDERS CALLING FOR COPIES OF ITRS, FINAL ACCOUNTS, CAPITAL ACCOUNTS, BANK STATEMENTS, PERSONAL AS WELL AS INCOME TAX RELATED DETAILS OF THE DIRECTORS ETC TO FI LE REPLY BY 12/12/2012. (PG NO 5 PARA 3.4 & 3.5 OF AO) THE N OTICE U/S. 133(6) ISSUED TO M/S. LASER FINANCIAL & PROJECT CONSULTANT PVT. LTD. WAS RETURNED BACK WITH THE REMARK NOT KNOWN. IN THIS REGARD WE SUBMIT THAT IT IS NOT THE CASE THAT THE SAID NOTICE WAS NOT COMPLIED BY THESE PARTIES. THE LD AO ON 3.5 HAS ADMITTED THE FACT THAT THE OFFICE RECEIVED THE REPLY IN RESPONSE TO NOTICE U/S. 133(6) IN ALL THE FOUR SHAREHOLDERS . I.T.A. NO.5362/DEL/2016 12 THEREFORE, THE ABOVE REASON ASSIGNED BY THE LD AO IS WITHOUT ANY BASIS AND SUPPORT. THE AO HAS NOT COMMENTED ANYT HING ON THE ABOVE DOCUMENTS. IT IS WORTHWHILE TO NOTE THAT HE DI D NOT FIND FAULT WITH THE EVIDENCE FILED BY THE INVESTOR COMPANIES, AS DETAILED ABOVE. NEITHER DID HE REJECT THE SAME BEFO RE TAKING AN ADVERSE VIEW IN THE MATTER. ONCE THE ASSESSEE COMP ANY HAS FILED THE NECESSARY DOCUMENTS TO ESTABLISH IDENTITY, CREDITWORTHINESS OF THE SHARE APPLICANTS AS ALSO THE GENUINENESS OF THE TRANSACTIONS AND THE INVESTOR COMPAN IES HAS CONFIRMED IT IN THE INDEPENDENT ENQUIRY DONE BY TH E AO, THEN WHERE IS THE QUESTION OF ADDITION UNLESS AO CONDUC T FURTHER VERIFICATION OF THE DOCUMENTS. PARTIES WERE NOT AVAILABLE AT GIVEN ADDRESS DURING THE COURSE OF ENQUIRY CONDUCTED U/S. 131(1)(D) SUBSEQUENTLY THE LD. AO ISSUED COMMISSION U/S.131(1) (D) DATED 28.01.2013 TO THE DDIT-111(1), NEW DELHI TO MAK E THE ENQUIRY OF THREE SHAREHOLDERS, WHO ARE HAVING THEIR R EGISTERED OFFICE IN DELHI. THE AO FURTHER SURMISES IN THE ASSES SMENT ORDER THAT THE DDIT-III(1), DELHI HAS REPORTED HIM THAT THE PARTIES CONCERNED WERE NOT AVAILABLE AT THE GIVEN ADDRE SSES OF DELHI. SIMILARLY, FOR ONE MUMBAI-BASED SHAREHOLDER, HE STATED THAT THE SAID PARTY, TOO, WAS NOT AVAILABLE AT THE GIVEN ADDRESS. IN THIS REGARD WE SUBMIT THAT AO HAS FURTHER NOTED IN TH E ASSESSMENT ORDER THAT THE DDIT-111(1), NEW DELHI INFORM ED HIM SUBSEQUENTLY THAT ALL THE RELEVANT DIRECTORS OF THE PA RTIES, WHOSE ENQUIRY HAD BEEN MARKED TO HIM U/S 131 (1 )(D) OF THE ACT HAD MADE THEMSELVES PRESENT BEFORE HIM AND REQUESTE D FOR ACCEPTING THE DETAILS IN RESPONSE TO HIS SUMMONS, WHICH THEY HAD BROUGHT WITH THEM. THE DDIT ADVISED THEM TO SEND THE I.T.A. NO.5362/DEL/2016 13 DETAILED DIRECTLY TO THE AO AT MUMBAI, SINCE HE HAD A LREADY SENT HIS REPORT TO HIM. HE ALSO ACKNOWLEDGES THE RECEIP T OF THE SAID DETAILS IN HIS OFFICE FROM THE SAID THREE PARTIES , AS MENTIONED BY HIM IN PARA 3.13 AT PAGE 15 OF THE ASSESS MENT ORDER. THUS, THE ADDITION CANNOT BE MADE ON THE BASIS THAT THE REPLY OF SUMMONS WAS NOT MADE BY THE PARTIES. DIRECTORS OF THE INVESTEE COMPANIES NOT PRODUCED BEFO RE AO IN MUMBAI: INSTEAD OF CONSIDERING THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE COMPANY AS WELL AS BY THE INVESTEE COMPANIE S, THE ASSESSING OFFICER STRAIGHTLY AND DIRECTLY ASKED THE AS SESSEE TO PRODUCE THE DIRECTORS OF THE INVESTOR COMPANIES BEFOR E HIM AT MUMBAI FOR PERSONAL EXAMINATION IN THE FAG END OF M ARCH, 2013. UPON THIS, THE APPELLANT ASKED THE DIRECTORS CONC ERNED OF THE INVESTOR COMPANIES AND REQUESTED THEM TO MAKE THEMSELVES PRESENT BEFORE THE AO FOR PERSONALLY EXAMIN ATION ON 22.03.2013 AS PER HIS DIRECTIONS. THEY TOLD HIM THA T THEY HAD ALREADY PERSONALLY CONTACTED THE DDIT(INV.) AT DELH I ALONG WITH OUR REPLY, WHICH WAS NOT ACCEPTED BY HIM. THEY FURTHER TOLD THAT EVEN THEN, THEY WERE READY TO ATTEND THE OFFICE OF THE AO AT MUMBAI PROVIDED HE ISSUES SUMMONS TO THEM. THEREAFTER, THE APPELLANT ATTENDED THE PROCEEDINGS ON 22.03.2013 AND REQUESTED AO TO ISSUE SUMMONS IN THE N AME OF THE DIRECTORS CONCERNED ENABLING HIM TO PERSUADE T HEM TO ATTEND BEFORE HIM AT MUMBAI. HOWEVER, LD. AO TURNED DOW N THE SAID REQUEST FOR THE REASONS BEST KNOWN TO HIM AND INSTEAD CHOSE TO TAKE RESORT TO THE PROVISIONS OF SECTION 68 OF TH E ACT IN RESPECT OF THE AMOUNTS RECEIVED FROM THE NEW SHARE HOL DERS. I.T.A. NO.5362/DEL/2016 14 WE SUBMIT THAT AO ONLY ORALLY DIRECTED THE APPELLANT TO PRODUCE THE DIRECTORS BEFORE HIM. HERE IT MAY BE APPR ECIATED THAT SINCE THREE OF THE INVESTING COMPANIES EXISTED AT DEL HI, MOST OF THE DIRECTORS WERE NATURALLY DELHI- BASED, WHE REAS THE PLACE OF ASSESSMENT WAS AT MUMBAI. SO, THE AO WAS ASK ING FOR PRODUCING THE DELHI BASED PERSONS AT MUMBAI, WHICH WA S A BIT DIFFICULT TO BE FULFILLED COMMAND. NONETHELESS, THE AP PELLANT REQUESTED THE DIRECTORS TO COME ALONG AND APPEAR BEFOR E THE AO AT MUMBAI. THE DIRECTORS ASKED HIM TO GET THE PROPER SUMMONS ISSUED IN THEIR NAME AND THEN THEY WOULD BE ACCOMPANYING THE APPELLANT TO THE OFFICE OF THE LD. AO. SO, THE APPELLANT MADE A HUMBLE REQUEST TO THE AO TO ISSUE THE SUMMONS, WHICH COULD HAVE BEEN GOT SERVED EVEN WITH THE ASSISTANCE OF THE APPELLANT. HOWEVER, THE AO DID NOT ACC EDE TO THE SAID REQUEST AND PROCEEDED TO MAKE THE ADDITION ALLE GING NON- COMPLIANCE OF HIS DIRECTIONS REGARDING PRODUCTIO N OF DIRECTORS, WHICH WILL NOT SUSTAIN UNDER THE ACT. WE FURTHER SUBMIT THAT THE AO CANNOT HOLD THE TRANSACTIONS UNEXPLAINED SIMPLY BECAUSE THE FACT THAT THE DIRECTORS CO ULD NOT BE PRODUCED. RELIANCE IS PLACED ON THE JUDGEMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DIVINE LEASIN G & FINANCE LTD. 299 ITR 268 (DEL), WHERE IN IT WAS HELD THAT 'THE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITIO N. THE AO PROCEEDED TO MAKE THE IMPUGNED ADDITION ON THE GROU ND THAT IN SOME CASES, SOME SUMMONS ISSUED WERE RETURNED UN-SE RVED AND IN SOME CASES, SUMMONS THOUGH SERVED BUT THERE WAS NO COMPLIANCE. IN THIS CONNECTION, IT MAY BE MENTIONED THAT IN THE CASE OF CIT VS. ORISSA CORPN., 159 ITR 78, THE HON' BLE COURT HAS HELD THAT WHEN THE ASSESSEE BORROWS THE LOAN AN D IF AN I.T.A. NO.5362/DEL/2016 15 ASSESSEE GIVES NAMES AND ADDRESS OF THE CREDITORS, WHO ARE ASSESSED TO TAX AND FULL PARTICULARS ARE FURNISHED, THEN THE ASSESSEE HAS DISCHARGED THE DUTY. IF THE REVENUE ME RELY ISSUES SUMMONS U/S 131 AND DOES NOT PURSUE THE MATT ER FURTHER, THE ASSESSEE DOES NOT BECOME RESPONSIBLE F OR THE SAME EVEN IF THE CREDITORS DO NOT APPEAR. ADDITION CANNO T BE MADE U/S 68. WE FURTHER PLACED OUR RELIANCE ON THE FOLLOWING CASE LAWS WHERE SIMILAR VIEW WAS HELD BY THE COURT: CIT V. MIS VICTOR ELECTRODES LTD, 329 ITR 271 (D ELHI) HIGH COURT OF DELHI (2010) CIT V. ORBITAL COMMUNICATIONS (P) LTD (2010) 327 ITR 560, DELHI HIGH COURT CIT V. ORBITAL COMMUNICATION (P) LTD. (20 I 0) 3 27 ITR 560. DELHI HIGH COURT FURTHER IN THIS CASE LD CIT (A) ASKED ASSESSEE TO PRO DUCE DIRECTORS OF THE COMPANY BEFORE HIM. IN RESPONSE TO THE SAME DIRECTORS OF ALL THE FOUR COMPANIES APPEARED BEFORE L D CIT (A) WHICH IS NOTE DON PAGE 32 & 33 OF THE CIT (A) ORDER. LD CIT (A) NOTED THAT ALL THE FOUR INVESTOR COMPANIES DIRECTORS APP EARED BEFORE HIM AND CONFIRM THE TRANSACTION AND ALSO FILED DESIRED DOCUMENTS. LD CIT(A) ALSO NOTED OUT OF FOUR COMPANIES, TWO OF THEM WERE DULY ASSESSED U/S 143(3) OF THE ACT. THEREFO RE THE SAID GRIEVANCE OF LD AO IS NO LONGER EXIST. THUS, THE ADDITION CANNOT BE MADE ON THE BASIS THAT TH E DIRECTORS WERE NOT PRODUCED BEFORE THE AO. THE AO'S CONCLUSION THAT EITHER A FEW OR ALL OF THE IN VESTOR COMPANIES WERE RELATED TO EACH OTHER AND SELLING OF THE SHARES I.T.A. NO.5362/DEL/2016 16 BY THREE OF THE FOUR _ SHAREHOLDERS A PROFIT, WHICH W AS 'VERY NOMINAL' AS PER THE AO : WE SUBMIT HAT NO ADVERSE VIEW CAN JUSTIFIABLY BE TAKEN ON THE BASIS OF THE RELATIONSHIP OF THE INVESTOR COMPANIES WI TH EACH OTHER AND SHARES SOLD ON INADEQUATE PROFIT. THE SAME VIEW WAS HELD BY THE HON'BLE DELHI HIGH COURT IN A VERY RECEN T JUDGMENT (2016) 65 TAXMANN.COM 71 (DELHI) IN THE CASE OF CIT-3 V FIVE VISION PROMOTERS (P) LTD. AS UNDER: 'MERE FACT THAT SOME OF INVESTORS IN SHARE CAPITAL OF ASSESSEE- COMPANY HAD A COMMON ADDRESS WAS NOT A VALID BASIS TO DOUBT THEIR IDENTITY -OR GENUINENESS, NOR THE FACT THAT SHARES OF THE ASSESSEE WERE SUBSEQUENTLY SOLD AT A REDUCED PR ICE WAS GERMANE TO QUESTION OF GENUINENESS OF INVESTMENT IN SHARE CAPITAL OF ASSESSEE. INCOME RETURNED BY THE INVESTOR COMPANIES TO BE 'ME AGER' AS PER THE AO: THE LD. AO STATED THAT INCOME OF THE INVESTING COMPANIES WAS 'MEAGER' HAS NO RELEVANCE TO THE ISSUE UNDER CONSIDERATI ON. INVESTMENTS ARE NOT ALWAYS MADE OUT OF CURRENT INCOME. T HE CONCLUSIVE POINT, WITH REGARD TO THE INVESTMENT IS, WHETH ER THE INVESTING COMPANY HAD SUFFICIENT FUNDS ON THE DATE OF INVESTMENTS OR NOT. LD. AO HAS NOWHERE HELD THAT THE INV ESTING COMPANIES HAD NO FUNDS IN THEIR BANK ACCOUNTS. HON' BLE ALLAHABAD HIGH COURT HAS EVEN DELETED THE ADDITION U/S 68, WHICH HAD BEEN MADE ON THE GROUND THAT THE ASSESSEE COU LD NOT PROVE THAT SHARE APPLICANTS HAD ENOUGH MONEY ON THE D ATE OF PURCHASE OF ITS SHARES. THE HON'BLE COURT HELD IN THE CASE OF CIT, MEERUT V. NAV BHARAT DUPLEX LTD. (2013) 35 TAXMANN .COM 289 (ALLAHABAD) AS UNDER: 'WE HAVE CONSIDERED THE ARG UMENTS OF I.T.A. NO.5362/DEL/2016 17 THE COUNSEL FOR THE PARTIES. CIT(A) FOUND THAT FIVE COMP ANIES SUBSCRIBING THE EQUITY SHARES AMOUNTING TO RS. 25,00 ,000/- WERE IDENTIFIED AND THEY HAD SUBMITTED THEIR BANK STATE MENTS, CASH EXTRACTS AND RETURNS FILING RECEIPTS. AS SUCH IDEN TITY OF THE SHARE APPLICANT COMPANIES AND PURCHASE OF SHARE HAD BEEN PROVED BY THE ASSESSEE. SUPREME COURT IN THE CASE OF C IT V. STELLER INVESTMENTS LTD. [2001] 251 /TR 263/115 TAXMAN 99 AND LOVELY EXPORTS CASE (SUPRA), HAS HELD THAT THE ID ENTITY OF THE SHAREHOLDER ALONE IS REQUIRED TO BE PROVED, IN CASE OF THE CAPITAL CONTRIBUTED BY THE SHAREHOLDERS. IN VIEW OF THE AUTHORI TATIVE PRONOUNCEMENT OF THE SUPREME COURT IN THE AFORESAID CAS ES, JUDGMENT OF THIS COURT IN RAM LAI AGRAWAL CASE (SUPRA) IS NO LONGER A GOOD LAW. ACCORDINGLY, CIT(A) AND THE TRIBU NAL HAS NOT COMMITTED ANY ILLEGALITY IN ALLOWING THE APPEAL OF THE ASSESSEE. WE DO NOT FIND ANY ILLEGALITY IN THE JUDGMENT OF THE C IT(A) AND THE TRIBUNAL. THE ASSESSING OFFICER HAS NOT BROUGHT ANY ADVERSE MAT ERIAL ON RECORD TO DRAW INFERENCE ON THE ISSUE. HIS DECISION TO HOLD THE SHARE CAPITAL CREDITS AS UNEXPLAINED IS ENTIRELY BASED ON PERSONAL BIASES, PREJUDICES, CONJECTURES AND SURMISE S AS AGAINST ANY SOLID GROUND. 11. IN SO FAR AS THE CASE LAW CITED BY THE ASSESSIN G OFFICER, THE SAME HAS BEEN DISTINGUISHED AND EXPLAINED IN TH E FOLLOWING MANNER: (I) NIPUN BUILDERS & DEVELOPERS PRIVATE LTD. 350 IT R 407 (DELHI HIGH COURT) IN THE CITED CASE, THE FACTS WERE THAT THE ASSESSEE SUMMONS HAD BEEN ISSUED TO INVESTORS, WHICH REMAINED UN-COM PLIED I.T.A. NO.5362/DEL/2016 18 WITH. IN THE CASE OF THE APPELLANT, SUMMONS HAD BEE N ISSUED BY THE DDIT(INV.), DELHI, WHOM THE AO HAD GIVEN COMMIS SION U/S 131(1 )(D). THE DIRECTORS OF THE INVESTOR COMPANIES DID NOT ATTEND ON THE DATE GIVEN IN THE SUMMONS ON ACCOUNT OF NON- RECEIPT OF SUMMONS. THE LEVEL OF THEIR COOPERATIVE ATTITUDE CAN BE GAUGED FROM THE FACT THAT ON HEARING OF ISSUANCE OF SUMMONS FROM INCOME TAX DEPARTMENT, ALL OF THEM APP EARED ON THEIR OWN BEFORE THE DDIT (INV.), DELHI AND PRES ENTED THEIR DETAILED REPLIES. ON ADVICE OF THE DDIT(LNV.), THEY SENT THEIR REPLIES DIRECT TO THE AO AT MUMBAI. AS AGAINST THIS , THE ASSESSEE OF THE CITED CASE WAS ALSO NON-COOPERATIVE IN THE SENSE THAT IN REPLY TO DIRECTION OF THE AO TO PRODU CE THE PRINCIPAL OFFICERS OF THE INVESTING COMPANIES, THE ASSESSEE REPLIED THAT THE AO'S ALL MADE TO THE AO TO ISSUE SUMMONS U/S 131 TO ALL THE PERSONS CONCERNED WHO HAD PROMISED T O ATTEND IN COMPLIANCE ON RECEIPT OF THE SUMMONS. THIS REQUEST, HOWEVER, WAS NOT ACCEDED TO BY THE AO. THE COURT IN THE CITED CASE FURTHER NOTED THAT 'IT WAS NOT OPEN TO THE ASSESSEE, GIVEN THE FACTS OF THIS CASE, TO DIRE CT THE ASSESSING OFFICER TO GO TO THE WEBSITE OF THE COMPA NY LAW DEPARTMENT/ROC AND SEARCH FOR THE ADDRESSES OF THE SHARE- SUBSCRIBERS AND THEN COMMUNICATE WITH THEM FOR PROO F OF THE GENUINENESS OF THE SHARE- SUBSCRIPTION. THAT IS THE ONUS OF THE ASSESSEE, NOT OF THE ASSESSING OFFICER.' APPARENTLY , THE HON'BLE COURT GOT ANNOYED WITH THE EXTREME NON-COOPERATIVE ATTITUDE OF THE ASSESSEE CONCERNED. IN THE CASE OF THE APPELLAN T, THE ATTENDANCE IN THE HEARING WAS DULY MAINTAINED, THE REQUISITE DETAILS WITH EVIDENCE WAS DULY FILED BEFORE THE AO AND ON DIRECTIONS OF THE AO, THE DIRECTORS OF THE INVESTIN G COMPANIES I.T.A. NO.5362/DEL/2016 19 WERE DULY CONTACTED AND REQUESTED TO ATTEND AT MUMB AI BEFORE THE AO. IN THE CITED CASE, THE HON'BLE COURT FURTHER NOTED THAT 'INSTEAD, THE ASSESSEE TOOK AN ADAMANT, ATTITUDE AND FAILED T O COMPLY WITH THE DIRECTION OF THE ASSESSING OFFICER. IT ALS O CHALLENGED THE ASSESSING OFFICER'S FINDING THAT THE SUMMONS SE NT TO THE COMPANIES CAME BACK UNSERVED WITH THE REMARK 'NO SU CH COMPANY', WHICH WAS ALSO SUPPORTED BY THE REPORT OF THE INSPECTOR WHO MADE A VISIT TO THE ADDRESSES. THE AS SESSEE THUS TOOK A VERY EXTREME STAND WHICH WAS NOT JUSTIFIED. SO, THE FINDING IN THE CITED CASE WAS CLEARLY AFFEC TED BY THE EXTREMELY NEGATIVE ATTITUDE OF THE ASSESSEE CONCERN ED. THEREFORE, THE RATIO OF THE CASE OF NIPUN BUILDERS (SUPRA) CANNOT BE APPLIED ON THE APPELLANT'S CASE. (II) CIT V. P. MOHANAKALA [2007] 291 ITR 278(SC) THE ASSESSING OFFICER HAS ALSO CITED THE CASE OF CI T V. P. MOHANAKALA [2007] 291 ITR 278(SC). FROM THE PERUSAL OF THE PORTION OF THE JUDGMENT REPRODUCED IN THE ASSESSMEN T ORDER IN PARA 18 OF IT, IT IS FOUND THAT HON'BLE APEX COURT HAS EXPLAINED THEREIN THE PROS AND CONS OF ADDITION U/S 68. THESE ARE GENERAL AND ROUTINE COMMENTS AND IN NO MANNER HARM THE POSI TION OF THE APPELLANT'S CASE. SIMILARLY, THE AO HAS REPRODUCED ANOTHER PARA (PARA NO.25) FROM THE ABOVE JUDGMENT AT PAGE 22 OF THE ASSESSMENT ORDER. THE SAID PARA MENTIONS THE ADVERS E FINDINGS OF THE AUTHORITIES BELOW ABOUT THE ENTRIES OF CREDI T IN THE BOOKS OF ACCOUNT OF THE ASSESSEE CONCERNED WHICH INDICATE TH AT THE TRANSACTIONS WERE NOT REAL ONE. IT MAY KINDLY BE NO TED THAT LD. AO HAS NOT MADE ANY ADVERSE COMMENT ON THE BOOKS OF ACCOUNT OF THE APPELLANT. SO, THESE GENERAL COMMENTS HAVE N O APPLICATION I.T.A. NO.5362/DEL/2016 20 ON THE APPELLANT'S CASE. (III) VIJAY KUMAR TALWAR V-. CIT (2011 )330 ITR 1 THIS CASE DISCUSSED ABOUT THE PROVISIONS OF SECTION 68 IN A GENERAL AND ROUTINE WAY. HONBLE COURT ALSO MAKES R EFERENCE TO NON-PRODUCTION OF EVIDENCE ON THE PART OF THE ASSES SEE CONCERNED. THERE IS ALSO A MENTION OF FAILURE OF TH E ASSESSEE CONCERNED TO PRODUCE THE PARTIES BEFORE THE AO. THE ABOVE CITED JUDGMENT DOES NOT HELP THE AO AS IN THE CASE OF THE APPELLANT, ALL THE 4 DIRECTORS APPEARED BEFORE THE DDIT(INV.), DELHI WHOM THE AO HAD ISSUED A COMMISSION TO VERIFY THE POSITION. THE AO HIMSELF ACKNOWLEDGED IN THE ASSESS MENT ORDER THAT THE PERSONS CONCERNED I.E. DIRECTORS OF THE IN VESTOR COMPANIED DID APPEAR BEFORE THE SAID OFFICER WITH T HEIR DETAILED REPLIES AND OFFERED THEMSELVES FOR HIS PERSONAL EXAMINATION. WHEN THE AO ASKED THE ASSESSEE TO PRODUCE THE DIREC TORS BEFORE HIM AT MUMBAI, THE APPELLANT IMMEDIATELY CONTACTED AND REQUESTED THE DIRECTORS TO COME ALONG WITH HIM TO A TTEND BEFORE THE AO. THEY PROMISED TO ATTEND PROVIDED SUMMONS AR E ISSUED TO THEM. SINCE THE EARLIER SUMMONS ISSUED BY DDIT(L NV.) WERE NOT RECEIVED BY THEM. THE AO DID NOT ISSUE ANY SUMM ONS. SO, CASE OF THE APPELLANT IS ENTIRELY ON DIFFERENT FOOT ING.' 12. LASTLY, HE SUBMITTED THAT THE APPELLANT HAD FUL LY DISCHARGED ITS ONUS BY FILING PLETHORA OF DOCUMENTS AND ESTABLISHED IDENTITY, CREDITWORTHINESS OF THE CREDI TORS AND GENUINENESS OF THE TRANSACTIONS. THE INVESTING PART IES ARE AVAILABLE AT THE GIVEN ADDRESSES; THEY ARE REGULAR INCOME-TAX ASSESSEES, THEY ARE DULY REGISTERED CORPORATE ENTIT IES, THEY ARE REGULARLY FILING STATUTORY RETURNS WITH THE ROC, TH EY ARE I.T.A. NO.5362/DEL/2016 21 MAINTAINING REGULAR BOOKS OF ACCOUNTS AND THEY MAKE ALL THE BUSINESS DEALINGS THROUGH REGULARLY MAINTAINED BANK ACCOUNTS. THEIR ACCOUNTS ARE STATUTORILY AUDITED BY A QUALIFIED AUDITOR. THE DOCUMENTS FILED BY US BEFORE THE ASSES SING OFFICER FULLY ESTABLISH THEIR IDENTITY. THEIR AUDIT ED BALANCE SHEETS FULLY ESTABLISH THEIR FINANCIAL WORTH. SO, T HEIR CREDITWORTHINESS IS BEYOND DOUBT. ALL THE INVESTING PARTIES HAVE CONFIRMED HAVING MADE THE TRANSACTIONS WITH TH E APPELLANT COMPANY IN RESPONSE TO NOTICES U/S. 133(6 ). IN EXCHANGE TO THE SHARE APPLICATION MONEY, SHARES HAV E DULY BEEN ALLOTTED TO EACH ONE OF THE INVESTOR. WE HAVE FILED COPIES OF SHARE CERTIFICATES ISSUED TO THE INVESTORS. THE INFORMATION OF SUCH ALLOTMENT WAS DULY FILED WITH THE MINISTRY OF CORPORATE AFFAIRS IN THE STATUTORY RETURN MEANT FOR THAT PURPOSE AND IT MUST BE AVAILABLE ON THEIR SITE. SO, GENUINENESS OF THE TRANSACTIONS, TOO, IS ESTABLISHE D. DIRECTORS OF THE INVESTOR COMPANIES ALSO APPEARED BEFORE LD C IT(A) AND CONFIRMED THE TRANSACTIONS ALONGWITH DOCUMENTARY EV IDENCES. DECISION 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO P ERUSED THE RELEVANT MATERIAL PLACED ON RECORD AND ALSO THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER. FROM THE BARE PERUSAL OF THE ENTIRE ASSESSMENT ORDER, WE FIND THAT NOWHERE A SSESSING OFFICER HAS DISCUSSED ABOUT EVIDENCES AND DOCUMENTS FILED BY THE ASSESSEE TO SUBSTANTIATE THE IDENTITY, CREDITWO RTHINESS OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRA NSACTION, I.T.A. NO.5362/DEL/2016 22 AS HAS BEEN REPRODUCED IN THE FOREGOING PARAGRAPH 8 . AT LEAST ASSESSING OFFICER SHOULD HAVE PRIMA FACIE REFERRED TO THESE DOCUMENTS AND THEN BASED ON ANY OF HIS INQUIRY OR A DVERSE MATERIAL SHOULD HAVE DISLODGED THE ASSESSEES EVIDE NCES OR EXPLANATION THAT THESE DOCUMENTS DO NOT SUBSTANTIAT E THE NATURE AND SOURCE OF THE CREDIT. 14. NOW COMING TO THE VARIOUS ALLEGATIONS OF THE ASSESSING OFFICER, I.E., FIRSTLY, THE NOTICE U/S. 133(6) RETU RNED UNSERVED IN CASE OF ONE PARTY. ADMITTEDLY, OUT OF NOTICES SE NT TO FOUR INVESTOR COMPANIES, THE ASSESSING OFFICER HAS ONLY DISCUSSED ABOUT ONE COMPANY, I.E., M/S. LASER FINANCIAL AND P ROJECT CONSULTANT PVT. LTD., THAT IT WAS RETURNED BACK UNS ERVED. THEREAFTER, IN PARAGRAPH 3.5 OF THE ASSESSMENT ORDE R, HE HIMSELF ADMITTED THAT HIS OFFICE HAS RECEIVED THE R EPLY IN RESPONSE TO THE NOTICE U/S. 133(6) IN RESPECT OF AL L THE SHAREHOLDERS WHEREIN THE SHAREHOLDERS HAVE FILED AL L THE REQUISITE DOCUMENTS AND DETAILS AS REQUIRED BY HIM. NOWHERE, HE HAS SAID THAT THESE DOCUMENTS LIKE, BANK STATEME NTS, COPY OF AUDITED BALANCE SHEET, PROFIT AND LOSS ACCOUNT, INCOME TAX RETURNS, DETAILS OF THEIR FUNDS AND THEIR RESPECTIV E NET WORTH AS ON 31.03.2010 AND 31.03.2009 AS DISCLOSED IN THE RESPECTIVE AUDITED FINANCIAL STATEMENTS, ETC. DOES NOT HAVE ANY SUBSTANCE OR THERE IS ANY DISCREPANCY WHICH CAN CREATE ANY DOUBT. ONCE, NOT ONLY THE ASSESSEE-COMPANY HAS FILED ALL THE REQUISITE DOCUMENT TO ESTABLISH IDENTITY, CREDI TWORTHINESS OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTION, BUT ALSO THE SAME SET OF EVIDENCES HAV E BEEN I.T.A. NO.5362/DEL/2016 23 SENT BY THE PARTIES DIRECTLY TO THE ASSESSING OFFIC ER IN RESPONSE TO NOTICE U/S.133(6). THERE CAN BE NO ADVE RSE INFERENCE WHICH CAN BE DRAWN AGAINST THE ASSESSEE; IN FACT SUCH AN INQUIRY GOES IN FAVOUR OF THE ASSESSEE. 15. IN THE ASSESSMENT ORDER AT ONE PLACE IT HAS BEE N STATED THAT PARTIES WERE NOT AVAILABLE AT THE GIVEN ADDRES S DURING THE COURSE OF INQUIRY CONDUCTED U/S. 131(1)(D). THIS HA S ALREADY BEEN COUNTERED AND EXPLAINED BY THE LD. COUNSEL AS REPRODUCED ABOVE. FROM THE FACTS ON RECORD, WE FIND THAT THERE IS A INHERENT FALLACY IN HIS OBSERVATION, BEC AUSE ASSESSING OFFICER HIMSELF HAS NOTED IN THE ASSESSME NT ORDER THAT DDIT, NEW DELHI HAS INFORMED THE ASSESSING OFF ICER THAT ALL THE DIRECTORS OF THE COMPANIES WHOSE INQUIRY WA S MARKED TO HIM U/S. 131(1)(D) HAVE MADE THEMSELVES PRESENT BEFORE HIM AND HAD GOT ALL THE REQUISITE DETAILS AS ASKED FROM THEM. HOWEVER, THE DDIT HAD ADVISED THEM TO SEND THESE DE TAILS DIRECTLY TO THE ASSESSING OFFICER AS HE HAS ALREADY SENT THE REPORT TO HIM. THIS HAS ALSO BEEN ACKNOWLEDGED BY T HE ASSESSING OFFICER IN PARAGRAPH 3.13 AT PAGE 15 OF T HE ASSESSMENT ORDER. 16. IN SO FAR AS THE ALLEGATION THAT THE DIRECTORS WERE NOT PRODUCED, IT HAS BEEN ALREADY CLARIFIED BY THE LD. COUNSEL THAT THEY HAVE DULY APPEARED BEFORE THE DDIT, NEW DELHI, WHO DID NOT EXAMINE THEM AND WAS NOT ACCEPTED BY HIM AS HE HAD ALREADY SENT HIS REPORT TO THE ASSESSING OFFICER IN MUMBAI. THE ASSESSEE SPECIFICALLY REQUESTED THE ASSESSING O FFICER TO I.T.A. NO.5362/DEL/2016 24 DIRECTLY SUMMONS THE DIRECTORS AT HIS OFFICE AS THE Y WERE OUT STATIONED INVESTORS, WHICH REQUEST WAS TURNED DOWN. IN ANY CASE THIS ALLEGATION OF THE ASSESSING OFFICER STAND S WHITTLED DOWN BY THE FACT THAT THE LD. CIT (A) HAD ASKED THE ASSESSEE TO PRODUCE DIRECTORS AND IN RESPONSE ALL THE DIRECT ORS OF FOUR COMPANIES HAD DULY APPEARED BEFORE HIM AND CONFIRME D THE TRANSACTION AND AGAIN FILED THE DESIRED DOCUMENTS. THIS IS EVIDENT FROM THE OBSERVATION AND THE FINDING OF THE LD. CIT (A) AS INCORPORATED ABOVE. OUT OF FOUR COMPANIES, IN FA CT, TWO OF THE COMPANIES WERE DULY ASSESSED U/S. 143(3) FOR TH E SAME ASSESSMENT YEAR AND THE SOURCE OF THE INVESTMENT MA DE IN ASSESSEE COMPANY STOOD EXPLAINED AND ALSO THE TRANS ACTION. UNDER THESE FACTS AND CIRCUMSTANCES, NONE OF THE AL LEGATIONS OF THE ASSESSING OFFICER HAS ANY LEGS TO STAND AND THERE IS NO REASON TO TINKER WITH THE FINDING OF THE LD. CIT (A ) AND THE MATERIAL ON RECORD. 17. LASTLY, BEFORE US, THE LD. DR HAS STRONGLY RE LIED UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF N RA STEELS AND IRON LTD. AND STATED THE RATIO OF THE SAID DECI SION IS SQUARELY APPLICABLE IN THIS CASE. FIRST OF ALL, ON THE FACTS AND MATERIAL AS DISCUSSED ABOVE THAT IN ALL THE INQUIRI ES, I.E., NOTICES U/S.133(6) AND THE REQUIREMENT OF PRODUCING THE DIRECTORS HAVE DULY BEEN COMPLIED WITH AS THE PARTI ES HAVE RESPONDED TO NOTICES U/S.133(6) AND DIRECTORS WERE PRODUCED BEFORE THE LD. CIT(A). IN THE CASE OF NRA STEELS AN D IRON LTD., THERE WAS NO RESPONSE OF NOTICES ISSUED U/S 133(6) OF THE ACT NEITHER ANY PERSON APPEARED BEFORE AO AND AO HAS EN QUIRED I.T.A. NO.5362/DEL/2016 25 ABOUT THE INVESTOR COMPANIES AND PROVED THAT THE SA ME ARE NON-EXISTING COMPANIES. FURTHER, IN THIS CASE ALL T HE THREE PARTIES HAVE DULY REPLIED NOTICE ISSUED U/S 133(6) AND PROVIDED THE DESIRED DETAILS TO THE AO. AO HAS NOT ACTED UPON THE INFORMATION PROVIDED BY THE ASSESSEE AS WELL AS BY THE INVESTOR COMPANIES. THERE IS NO FURTHER INVESTIGATI ON BY THE AO. THEREFORE, THE RELIANCE OF APEX COURT DECISION IS NOT CORRECT. 18. ACCORDINGLY, ON MERITS THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 IS UNSUSTAINABLE AND HAS R IGHTLY BEEN DELETED BY THE LD. CIT (A). THUS, WE DO NOT FI ND ANY SUBSTANCE ON MERITS IN THE GROUNDS RAISED BY THE RE VENUE AND THE SAME ARE DISMISSED. 19. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2021. SD/- SD/- [DR. B.R.R. KUMAR] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST AUGUST, 2021 PKK: