INCOME TAX OFFICER-8(3)(3), MUMBAI V. AMRISE INFRA-CREATORS PRIVATE LIMITED(FORMERLY KNOWN AS M/S.TIRTHA INDUSTRIES PRIVATE LIMITED), MUMBAI

ITA 5366/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2982 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 17-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH CHANDRA RAJORE LD
• Assessee Lawyers: DHARMESH SHAH LD
• Keywords: Unexplained cash credit; Gift; Income from undisclosed sources; Search and seizure; Principle of natural justice; Source of fund; Question of law; Difference of opinion; Accommodation entries; Sham transactions
• Section: 271(1)(c); 143(3); 133(6); 205; 251; 68

Judgement Text

ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.5366/MUM/2017 ( / ASSESSMENT YEAR:2010-11) DCIT 12(1)(1) AAYKAR BHAVAN, M.K ROAD MUMBAI 400 020 / VS. M/S. AMRISE INFRACREATORS PVT LTD. (EARLIER KNOWN AS M/S TIRTHA INDUSTRIES PVT. LTD.) 302, KOSHAL APTS, SHANKAR LANE, KANDIVALI(W) MUMBAI 400 067. :; ./ ./PAN/GIR NO. AAACT-3320-M ( ;= /APPELLANT ) : ( >?;= / RESPONDENT ) REVENUE BY : SHRI SATISH CHANDRA RAJORE LD. DR ASSESSEE BY : SHRI DHARMESH SHAH LD. AR / DATE OF HEARING : 07/08/2019 / DATE OF PRONOUNCEMENT : 22/08/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AS PER THE PROVISIONS OF SECTION 68 OF THE INCOM E TAX ACT, 1961, WHERE ANY SUM IS FOUND CREDITED IN THE ASSESSEES B OOKS AND ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION FURNISHED IS FOUND TO BE UNSATISFACTORY , THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE A SSESSEE OF THAT PREVIOUS YEAR. A PROVISO HAS BEEN INSERTED TO THE S AID SECTION BY ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 2 FINANCE ACT, 2012 W.E.F. 01/04/2013 TO PROVIDE THAT WHERE THE ASSESSEE IS A COMPANY AND THE SUM SO CREDITED CONSISTS OF SH ARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM ETC., THE EXPLA NATION FURNISHED BY THE ASSESSEE SHALL BE DEEMED TO BE NOT SATISFACTORY UNLESS THE PERSON IN WHOSE NAME SUCH CREDIT IS RECORDED ALSO OFFERS AN E XPLANATION ABOUT NATURE AND SOURCE OF SUM SO CREDITED AND SUCH EXPLA NATION IS FOUND TO BE SATISFACTORY. HOWEVER, THIS PROVISO IS APPLICABL E ONLY FROM AY 2013-14 AND THE SAME IS NOT RETROSPECTIVE IN NATURE AS HELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE PRIVATE LIMITED [80 TAXMANN.COM 272]. 2. IT IS SETTLED POSITION OF LAW THAT TO AVOID THE RIGORS OF SECTION 68, THE ASSESSEE MUST PROVE THE IDENTITY, CREDITWORTHINESS OF THE LENDERS / INVESTORS TO ADVANCE SUCH MONIES AND GENUINENESS OF THE TRANSACTIONS. ONCE THESE THREE INGREDIENTS ARE FULFILLED BY THE A SSESSEE, THE PRIMARY ONUS CASTED UPON HIM, IN THIS REGARD, COULD BE SAID TO HAVE BEEN DISCHARGED AND ACCORDINGLY, THE ONUS WOULD SHIFT UP ON REVENUE TO DISLODGE THE ASSESSEES CLAIM BY BRINGING ON RECORD MATERIAL EVIDENCES AND UNLESS THIS ONUS IS DISCHARGED BY THE REVENUE, NO ADDITION COULD BE SUSTAINED U/S 68. THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS P. LTD. [319 ITR 5], DISMISSING REVENUES APPEAL, OBSERVED AS UNDER: - 2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF IT ACT, 1961? WE FIND NO MERIT IN THI S SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY I S RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAME S ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR I NDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WI TH THE IMPUGNED JUDGMENT. 3. SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS DI SMISSED. ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 3 THE RATIO OF SAID DECISION HAS SUBSEQUENTLY BEEN FO LLOWED BY VARIOUS JUDICIAL AUTHORITIES IN CATENA OF JUDICIAL PRONOUNC EMENTS. THE SAID DECISION HAS BEEN FOLLOWED BY HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE PRIVATE LIMITED [8 0 TAXMANN.COM 272] & SUBSEQUENTLY IN CIT VS. ORCHID INDUSTRIES PRIVATE LIMITED [88 TAXMANN.COM 502]. THE HONBLE DELHI HIGH COURT FOLLOWED THE SAID DECISION IN PR. CIT V/S ADAMINE CONSTRUCTION PVT. LTD. [107 TAXMANN.COM 84] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION WAS DISMISSED BY HONBLE SUPREME COURT REPORTED AT 107 TAXMANN.COM 85. SIMILAR IS THE POSITION OF DECISION OF HONBLE DELH I HIGH COURT RENDERED IN PR. CIT V/S HIMACHAL FIBERS LTD. [98 TAXMANN.COM 72 ] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION WAS DISMISSED BY H ONBLE SUPREME COURT REPORTED AT 98 TAXMANN.COM 173. SIMILAR IS TH E DECISION OF HONBLE HIGH COURT OF MADHYA PRADESH IN PR. CIT V/S CHAIN HOUSE INTERNATIONAL PVT. LTD. [98 TAXMANN.COM 47] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION HAS RECENTLY BEEN DISMISSED BY HONBLE SUPREME COURT ON 18/02/2019 REPORTED AT 103 TAXMANN.COM 435 . 3. FURTHER, AS A PRINCIPLE OF NATURAL JUSTICE, IT I S OBLIGATORY ON THE PART OF REVENUE AUTHORITIES TO CONFRONT THE ADVERSE MATE RIAL USED AGAINST THE ASSESSEE AND PROVIDE AN OPPORTUNITY TO REBUT THE SA ME. THE FAILURE TO DO SO WOULD RENDER THE ASSESSMENT PROCEEDINGS NULLITY IN THE EYES OF LAW. THE ADDITIONS MADE MERELY ON THE BASIS OF THIRD-PAR TY STATEMENTS AND THE DENIAL TO PROVIDE AN OPPORTUNITY TO CROSS-EXAMI NE THE CONCERNED PARTIES WOULD LEAD TO VIOLATION OF PRINCIPLE OF NAT URAL JUSTICE RENDERING THE ASSESSMENT PROCEEDINGS NULLITY AS HELD BY HONBLE A PEX COURT IN ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 4 ANDAMAN TIMBER INDUSTRIES [CIVIL APPEAL NO.4228 OF 2006 02/09/2015]. 4. KEEPING IN VIEW THE ABOVE LEGAL POSITION IN MIND , WE FIND THAT REVENUE IS UNDER APPEAL BEFORE US FOR AY 2010-11 AG AINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-20, MUMBAI [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-20/ITO-12(1)(1)/IT- 1006/2015-16 DATED 12/05/2017 QUA DELETION OF ADDITION U/S 68. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE ADDITION OF SHARE CAP ITAL AND PREMIUM OF RS.2,15,00,000/- U/S. 68 OF I.T.ACT WITHOUT APPRECI ATING THE FACT THAT MANY OF THESE PARTIES FROM WHOM SHARE CAPITAL IS RECEIVED, HAD BE EN BANNED BY SEBI FOR INDULGING IN MONEY LAUNDERING ACTIVITIES AND DID NO T RESPOND TO NOTICES OF INQUIRIES. 2. WHETHER O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT (A) ERRED IN DELETING THE ADDITION U/S 68 OF SH ARE PREMIUM AND SHARE CAPITAL WITHOUT APPRECIATING THE FACT THAT THE PARTIES HAD NO CREDITWORTHINESS TO JUSTIFY SUCH HIGH AMOUNT OF SHARE PREMIUM. 5.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE STATED TO BE ENGAGED IN THE BUSI NESS OF TRADING IN SHARES, TOUR AND TRAVEL OPERATORS AND CIVIL CONS TRUCTION WAS ASSESSED FOR IMPUGNED AY U/S 143(3) ON 25/03/2013 W HEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.215.33 LACS, INTER- ALIA, AFTER ADDITION OF RS.215 LACS U/S 68 AS AGAINST NIL RETURN E-FILED BY THE ASSESSEE ON 12/10/2010. 5.2 DURING ASSESSMENT PROCEEDINGS, UPON PERUSAL OF ASSESSEES FINANCIAL STATEMENTS, IT TRANSPIRED THAT THE ASSESS EE HAD ISSUED FRESH EQUITY SHARE CAPITAL CONSISTING OF 1 LACS EQUITY SH ARES OF FACE VALUE OF RS.100/- EACH AT A PREMIUM OF RS.100/- PER SHARE TO AS MANY AS 15 CORPORATE ENTITIES AS PER THE FOLLOWING DETAILS: - ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 5 NO. NAME OF THE INVESTOR PAN NO. OF SHARES SHARE CAPITAL SHARE PREMIUM TOTAL 1. ALKA DIAMOND INDUSTRIES AAACA5236D 10000 1000000 1000000 2000000 2. KUSH HINDUSTAN ENTERTAINMENT LTD. AACCK3597M 5000 500000 500000 1000000 3. TRIANGULAR INFOCOM LTD. AAACL4646G 10000 1000000 1000000 2000000 4. DUKE BUSINESS PVT.LTD. AABCJ6245N 5000 500000 500000 1000000 5. CASPER ENTERPRISES PVT.LTD. AAACO7955M 5000 500000 500000 1000000 6. NAKSHATRA BUSINESS PVT. LTD. AABCH4279G 10000 1000000 1000000 2000000 7. MAJESTIC EXIM PVT.LTD. AAFCM9489H 5000 500000 500000 1000000 8. SPARK FINANCIAL ADVISORS PVT.LTD. AAMCS8638R 10000 1000000 1000000 2000000 9. ALGORITHM FINANCIAL SERVICES PVT.LTD. AAHCA6077B 10000 1000000 1000000 2000000 10. SYNOPSIS FINANCIAL SERVICES PVT.LTD. AAMCS8637A 5000 500000 500000 1000000 11. LILAC MEDICINES PVT LTD. AABCL4309H 5000 500000 500000 1000000 12. SKYLAR CHEMICALS LTD AALCS5301C 5000 500000 500 000 1000000 13. HORMONY ENERGY PVT. LTD. AABCH9957P 5000 500000 500000 1000000 14. ELDOR RETAIL PVT. LTD. AABCE9439P 5000 500000 5 00000 1000000 15. ANSH MERCHANDISE (P.) LTD. AABCN8176E 5000 500000 500000 1000000 TOTAL 10000000 10000000 20000000 5.3 NOTICES U/S 133(6) WERE ISSUED BY LD. AO DURING ASSESSMENT PROCEEDINGS TO EXAMINE THE CLAIM TOWARDS RECEIPT OF SHARE CAPITAL AND SHARE PREMIUM. HOWEVER, THE NOTICES REMAINED UN SERVED IN CASE OF 9 ENTITIES, HOWEVER, 2 ENTITIES FILED CONFI RMATION SUBSEQUENTLY. IT WAS NOTED THAT ENTITIES LISTED AT SERIAL NOS. 1 TO 3 WERE BANNED BY SEBI FROM OPERATING IN STOCK MARKET SINCE THEY WERE FOUND TO BE ENGAGED IN CARRYING OUT SUSPICIOUS BANKING TRANSACTIONS. THE ACTIVITIES OF ENTITY LISTED AT SE RIAL NO. 3 WAS ALSO HELD TO BE NON-GENUINE/ SHAM WHILE FRAMING ASSESSME NT ORDERS FOR VARIOUS YEARS. IN THE ABOVE CIRCUMSTANCES, LD. AO P ROCEEDED TO ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 6 INVOKE THE PROVISIONS OF SECTION 68 AGAINST THE ASS ESSEE AND THE ASSESSEE WAS DIRECTED TO SUBSTANTIATE THE CLAIM OF RECEIPT OF SHARE CAPITAL / SHARE PREMIUM WITH SUPPORTING DOCUMENTARY EVIDENCES. 5.4 THE ASSESSEE DEFENDED THE TRANSACTIONS, VIDE RE PLY DATED 04/03/2013, BY SUBMITTING VARIOUS DOCUMENTS IN THE SHAPE OF SHARE APPLICATION FORMS, LETTER OF ALLOTMENT, PAN OF SHAR EHOLDERS, COPIES OF FORM NO. 2 & 5 FILED WITH REGISTRAR OF COMPANIES IN SUPPORT OF ALLOTMENT OF SHARES, BANK STATEMENT OF SHAREHOLDERS , OWN BANK STATEMENT EVIDENCING RECEIPT OF MONEY THROUGH BANKI NG CHANNELS, BOARD RESOLUTION FOR ALLOTMENT OF SHARES. RELIANCE WAS PLACED ON VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING THE DECIS ION OF HONBLE APEX COURT RENDERED IN LOVELY EXPORTS P. LTD. [319 ITR 5] TO SUBMIT THAT THE SHARE CAPITAL / SHARE PREMIUM COULD NOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 5.5 THE LD. AO, FINDING THAT THE PARTIES LISTED AT SERIAL NOS. 1 TO 3 WERE FOUND BY SEBI TO BE INDULGING IN RIGGING OF SHARE P RICES OF M/S PYRAMID SAIMIRA THEATRE LTD. AND CHARGES OF CARRYING OUT SU SPICIOUS BANKING TRANSACTIONS WERE LEVELLED AGAINST THEM. ACCORDINGL Y, THESE 3 ENTITIES WERE DEBARRED / RESTRAINED FROM DEALING IN SECURITI ES MARKET BY SEBI. AT THE SAME TIME, IT WAS NOTED THAT RECENTLY THE PERMI SSION WAS GRANTED BY THE SEBI TO THESE 3 ENTITIES TO OPERATE IN THE MARK ET. IT WAS ALSO NOTED THAT THE SHARE APPLICATION MONEY RECEIVED BY TWO OT HER ASSESSEES FROM THESE 3 ENTITIES WERE ADDED AS UNDISCLOSED INCOME O F THOSE ASSESSEE WHILE FRAMING THEIR RESPECTIVE ASSESSMENT. ON THE S TRENGTH OF THESE OBSERVATIONS, LD. AO REACHED A CONCLUSION THAT THE ASSESSEE FAILED TO ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 7 DISCHARGE THE ONUS OF PROVING THE GENUINENESS OF TH E TRANSACTIONS AND CREDITWORTHINESS OF THESE 3 ENTITIES. 5.6 WITH RESPECT TO ENTITIES LISTED AT SERIAL NOS. 4 TO 6, IT WAS OBSERVED THAT NO SUPPORTING DOCUMENTS WERE FILED IN SUPPORT OF THE TRANSACTIONS. UPON PERUSAL OF REPLIES RECEIVED AGAINST NOTICES IS SUED U/S 133(6), IT WAS OBSERVED THAT ENTITIES LISTED AT SERIAL NOS. 7 TO 13 HAD MEAGER INCOME AND LACK FINANCIAL STRENGTH TO MAKE INVESTME NT IN THE ASSESSEE COMPANY. 5.7 ANOTHER REASON TO DISBELIEVE THE TRANSACTIONS W AS VALUATION OF SHARES. IT WAS NOTED THAT THE FINANCIAL STRENGTH OF THE ASSESSEE COMPANY WOULD NOT INSPIRE ANY INVESTOR TO PURCHASE SHARES O F RS.100/- FACE VALUE AT A PREMIUM OF RS.100/- PER SHARE. 5.8 FINALLY THE AMOUNT OF RS.2 CRORES WAS TREATED A ND NON-GENUINE AND ADDED TO THE INCOME OF THE ASSESSEE U/S 68. 5.9 IN ADDITION TO ABOVE, IT TRANSPIRED THAT THE AS SESSEE WAS IN RECEIPT OF CALL APPLICATION MONEY OF RS,15,12,500/- DURING THE YEAR UNDER CONSIDERATION FROM 11 ENTITIES AS PER THE FOLLOWING DETAILS: - NO. NAME OF SHAREHOLDER NO. OF SHARES CALL AMOUNT (RS.) AMOUN T (RS.) 1. GEETA J. SALOT 625 20 12,500 2. INVESCO FISCAL SEC.LTD. 5000 20 1,00,000 3. ADHYYAN COMPUTECH PVT.LTD. 10,000 20 2,00,000 4. NAVPARAVA TECHNOLOGIES LTD. 10,000 20 2,00,000 5. ORBIT POLYTECHNIC LTD. 10,000 20 2,00,000 6. JVIN SEC. & FINANCE LTD. 5000 20 1,00,000 7. RIGHTLINE TRD. & INV. CO. PVT.LTD. 5000 20 1,00,000 8. ALKA DIAMOND INDUSTRIES LTD. 10,000 20 2,00,000 9. SHRADHA SABURI MER. PVT.LTD. 5000 20 1,00,000 10. REDSTAR TRADING CO.PVT.LTD. 5000 20 1,00,000 11. SRESTHA LEASING & FIN.LTD. 10,000 20 2,00,000 TOTAL 75,625 15,12,500 ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 8 THE CALL AMOUNT WAS STATED TO BE RECEIVED @RS.20/- PER SHARE AGAINST 75,625 SHARES. THE CALL MONEY OF RS.12,500/- WAS SH OWN TO BE RECEIVED FROM GEETA J. SALOT, ONE OF THE DIRECTORS OF THE AS SESSEE COMPANY WHEREAS THE BALANCE CALL MONEY OF RS.15 LACS WAS ST ATED TO BE RECEIVED FROM 10 OTHER ENTITIES. THE PARTY LISTED AT SERIAL NO. 9, AS PER THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, WAS STATED TO BE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES WHERE AS ENTITY LISTED AT SERIAL NO. 8 IS THE SAME PARTY FROM WHICH FRESH CAPITAL WAS ALSO RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. NOTICE ISSUED U/S 133(6) TO ENTITIES LISTED AT SERI AL NO. 4,5 & 7 WERE STATED TO BE RETURNED BACK UNSERVED BY THE POSTAL A UTHORITIES. THE TWO ENTITIES LISTED AT SERIAL NO. 11 SUBMITTED THAT SHARES WERE PURCHASED DURING FY 2002-03 AND NO AMOUNT WAS PAYAB LE DURING THE YEAR UNDER CONSIDERATION WHEREAS PARTY LISTED A T SERIAL NO. 3 DENIED HAVING DONE ANY TRANSACTION WITH THE ASSESSE E. THE AFORESAID FACTS LED LD. AO TO DISBELIEVE THE TRANSA CTIONS TO THE EXTENT OF RS.15 LACS AND THE SAME WAS ALSO ADDED TO THE IN COME OF THE ASSESSEE U/S 68. 6.1 AGGRIEVED, THE ASSESSEE ASSAILED THE ADDITIONS WITH SUCCESS BEFORE LEARNED FIRST APPELLATE AUTHORITY VIDE IMPUG NED ORDER DATED 12/05/2017. THE ASSESSEE, BY WAY OF DETAILED WRITTE N SUBMISSIONS, DREW ATTENTION TO PLETHORA OF DOCUMENTS SUBMITTED B Y THE ASSESSEE, DURING ASSESSMENT PROCEEDINGS, IN SUPPORT OF THE TR ANSACTION WHICH COULD BE TABULATED IN THE FOLLOWING MANNER: - -FORM NO. 2 & 5 SUBMITTED BEFORE ROC ALONG WITH BOA RD RESOLUTION FOR INCREASE IN SHARE CAPITAL ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 9 -BANK STATEMENT OF THE APPELLANT SHOWING RECEIPT OF SHARE APPLICATION MONEY -ALLOTMENT LETTER ISSUED TO VARIOUS INVESTORS -SHARE APPLICATION FORMS GIVEN BY THE INVESTORS ALO NG WITH BOARD RESOLUTION OF THE INVESTORS -PAN & ADDRESSES OF THE INVESTORS -ITR ACKNOWLEDGEMENT OF THE INVESTORS FOR AY 2010-1 1 -FINANCIAL STATEMENTS OF THE INVESTORS FOR AY 2010- 11 -CONFIRMATION FROM INVESTORS -BANK STATEMENTS OF THE INVESTORS INVESTING IN THE ASSESSEE COMPANY -COPY OF REPLY TO NOTICE U/S 133(6) GIVEN BY INVEST OR TO LD. AO RELIANCE WAS PLACED, INTER-ALIA, ON THE DECISION OF HONBLE SUPREME COURT IN ORISSA CORPORATION PVT. LTD. 159 ITR 78 AND ALSO IN THE CASE OF LOVELY EXPORTS P. LTD. [319 ITR 5] FOR THE SUBMISSION THAT INITIAL ONUS CASTED UPON ASSESSEE STOOD DISCHARGED AND THE ADDIITONS WERE NOT JUSTIFIED. RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN CIT VS. GAGANDEEP INFRASTRUCTURE PRIVATE LIMITED [80 TAXMANN.COM 272] FOR THE SUBMISSIONS THAT PROVISO TO SECTION 68 WAS APPLICABLE ONLY FROM AY 2013-14 AND THE SAME WAS NOT RETROSPECTIVE IN NATURE. RELIANCE WAS ALSO PLACED O N THE DECISION OF HONBLE BOMBAY HIGH COURT IN CIT VS. NIKUNJ EXIMP ENTERPRISES PRIVATE LIMITED [372 ITR 619] FOR THE SUBMISSIONS THAT NON-REPLY TO NOTICE U/S 133(6) WOULD NOT AUTOMATICALLY LEAD TO A CONCLUSION THAT THE PARTIES WERE NOT GENUINE PARTICULARLY WHEN THE ASSE SSEE HAD PROVIDED THE REQUISITE DETAILS. THE DETAILED WRITTEN SUBMISS IONS FURNISHED BY THE ASSESSEE HAS ALREADY BEEN EXTRACTED IN THE IMPUGNED ORDER, WHICH WE HAVE ALREADY CONSIDERED. ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 10 6.2 THE LEARNED FIRST APPELLATE AUTHORITY, AFTER CO NSIDERING THE SAME, CONCURRED WITH ASSESSEES SUBMISSIONS, BY OBSERVING AS UNDER: - 5.8 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND S UBMISSIONS MADE IN THIS REGARD. IT IS NOTED THAT THE ASSESSING OFFICER DOUBTED THE SHARE CAPITAL/PREMIUM MONEY AND TREATED THE SAME AS UNEXPLAINED CASH-CREDIT U/S. 68 OF THE INCOME TAX ACT, 1961. IT IS NOTED THAT THE A.O. HAS HELD-THAT-THE APPELLANT HAS INTRODUCED INCOME FROM UNDISCLOSED SOURCES BROUGHT UNDER THE GARB OF SHARE CAPITAL/PRE MIUM OF RS.2,15,00,0007- AND HENCE THIS AMOUNT OF ISSUE OF THE SHARE CAPITAL/PRE MIUM WAS ASSESSED AS INCOME OF THE APPELLANT U/S 68 OF THE ACT. THE A.O. HAD CONCL UDED THAT BASED ON THE TEST OF HUMAN PROBABILITIES IT IS CLEAR THAT THE ENTIRE TRANSACTI ON IS A PRE-STRUCTURED TRANSACTION AND A COLORABLE DEVICE USED BY THE ASSESSEE COMPANY TO IN TRODUCE UNDISCLOSED INCOME UNDER THE GARB OF SHARE CAPITAL/PREMIUM. THE AR HAS CONTE NDED THAT THE A.O. HAD MISSED THE CRUCIAL FACT THAT THE SHARE APPLICANTS ARE EXISTING ASSESSES AND HAD FILED THEIR TAX RETURNS ON REGULAR BASIS. THE TAXES WERE PAID BY TH EM ON THE INCOME SO EARNED. IN THE LIGHT OF OBSERVATIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. REPORTED IN. 216 CTR 295, THE ONUS ON THE APPELLANT HAS BEEN DULY DISCHARGED. THE PECULIAR FACTS OF THE CASE MAY HAVE CAUSED SUSPICION IN THE MIND OF THE A.O. BUT THERE IS NO EVIDENCE OR OTHER MATERIAL TO HOLD THAT THE APPELLANT HAD ROUTED ITS OWN MONEY. 5.9 ON AN ANALYSIS OF THE FACTS ON RECORDS, IT IS S EEN THAT THE SHARE CAPITAL /PREMIUM OF RS. 2,15,00,000/- HAS COME FROM DIFFERENT COMPAN IES AND INDIVIDUAL TO THE ASSESSEE COMPANY. IT IS NOTED THAT THESE SHARE APPLICANTS AR E EXISTING ASSESSEES AND HAVE CONFIRMED THAT THEY HAVE CONTRIBUTED TO THE SHARE C APITAL OF THE ASSESSEE COMPANY. THE NEXT ASPECT IS THEIR CREDITWORTHINESS. THE ASSESSEE HAS FILED COPY OF PAN CARD, BANK STATEMENT, BALANCE SHEET AND P&L ACCOUNT, SHARE APP LICATION FORM TO INVEST IN THE ASSESSEE CO. ETC. OF THE INVESTORS. IT EMERGES OUT FROM THE RECORD THAT THE INVESTING COMPANIES HAVE DULY RECORDED THE INVESTMENTS IN APP ELLANT COMPANY IN THEIR BOOKS OF ACCOUNTS WHICH WERE DULY AUDITED DURING THE RELEVAN T FINANCIAL YEAR. THUS, THE INVESTOR COMPANIES HAVE DEMONSTRATED THESE BALANCE IN THEIR BALANCE SHEETS IN THE SHAPE OF INVESTMENT AS WELL LOAN AND ADVANCES. THE NEXT ISSU E IS ABOUT THE GENUINENESS OF THE TRANSACTION. THE ASSESSEE HAS PRODUCED THE DETAILS OF BANK ACCOUNTS. THE SHARE APPLICATION MONEY AND SHARE PREMIUM HAS BEEN ISSUED THROUGH BANKING CHANNEL. THERE IS NO CASH TRANSACTION WHICH COULD COMPEL ONESELF T O ASSUME THAT THE TRANSACTIONS WERE NOT GENUINE. THE ONUS CAST UPON THE ASSESSEE UNDER SECTION 68 OF THE ACT IS TO SATISFY THE DEPARTMENT ABOUT THE TRUE IDENTITY OF AN INVEST OR, ITS CREDITWORTHINESS AND GENUINENESS OF A TRANSACTION WAS EXPLAINED BY THE SUPREME COURT IN CIT VS. LOVELY EXPORTS (P) LTD., 216 CTR 295 . WHILST, THE A.O. ACTED LEGITIMATELY IN ENQUIRING INTO THE MATTER, THE INFERENCES DRAWN BY HIM WERE NOT JUSTIF IED AT ALL IN THE CIRCUMSTANCES OF THE CASE. WHETHER THE ASSESSEE COMPANY CHARGED A HIGHER PREMIUM OR NOT, SHOULD NOT HAVE BEEN THE SUBJECT MATTER OF THE ENQUIRY IN THE FIRST INSTANCE. INSTEAD, THE ISSUE HERE WAS WHETHER THE AMOUNT INVESTED BY THE SHARE APPLIC ANT WAS FROM LEGITIMATE SOURCES. THE OBJECTIVE OF SECTION 68 IS TO AVOID INCLUSION O F AMOUNT WHICH ARE SUSPECT. THEREFORE, THE EMPHASIS IS ON GENUINENESS OF ALL TH E THREE ASPECTS, IDENTITY, CREDITWORTHINESS AND THE TRANSACTION. WHAT IS PECUL IAR IN THE PRESENT CASE IS WHEN THE ASSESSMENT WAS BEING COMPLETED THE A.O. HAS NOT MAD E MUCH INVESTIGATION EXCEPT ISSUING OF NOTICE U/S 133 (6) WHICH COULD NOT BE SE RVED ON THE SHARE APPLICANTS IN 2 CASES DUE TO CHANGE OF ADDRESS AND IN 3 CASES PART REPLIES WERE FILED. IT HAS BEEN SUBMITTED THAT THESE DETAILS CALLED FOR BY THE A.O. WERE DULY FILLED BY THE APPELLANT. EVEN ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 11 OTHERWISE, THE DETAILS OF SHARE APPLICANTS PARTICUL ARS WERE AVAILABLE WITH THE A.O. IN THE FORM OF BALANCE SHEETS, INCOME TAX RETURNS, PAN DET AILS ETC. WHILE ARRIVING AT THE CONCLUSION THAT HE DID, THE A.O. DID NOT CONSIDER I T WORTHWHILE TO MAKE ANY FURTHER ENQUIRY BUT BASED HIS ORDER ON THE HIGH VALUE OF TH E SHARE APPLICATION MONEY / SNARE PREMIUM, AND CERTAIN FEATURES WHICH APPEARED TO BE SUSPECT, TO DETERMINE THAT THE AMOUNT HAD BEEN ROUTED FROM, THE ASSESSEE'S ACCOUNT TO THE SHARE APPLICANTS' ACCOUNTS. THERE IS NO FINDING TO THE EFFECT AS TO H OW THE ALLEGED UNACCOUNTED CASH/MONEY OF THE ASSESSEE COMPANY WAS ROUTED THROU GH VARIOUS LEVELS AND IT FINALLY REACHED TO THE ASSESSEE. THERE IS NO EVIDENCE OR MA TERIAL ON RECORD TO SHOW THAT THE SAID AMOUNT REPRESENTING SHARE CAPITAL AND PREMIUM MOVED FROM THE ASSESSEE AND REACHED TO THE ASSESSEE. THE ASSESSEE-COMPANY HAS R ECEIVED THE MONEY THROUGH BANKING CHANNELS AND THE INVESTING COMPANY HAS SHOW N THE SAID AMOUNT AS INVESTMENT IN ITS BOOKS OF ACCOUNT. THE MONEY ROUTED THROUGH B ANKING CHANNELS AND THROUGH ACCOUNT PAYEE CHEQUES/BANK DRAFT, UNDISPUTED GIVEN BY THE PARTY. EVEN, THE SOURCE OF THE APPLICATION MONEY AND SHARE PREMIUM WAS FOUND I N THE BANK ACCOUNT OF THE INVESTING COMPANIES NOT BY ANY CASH DEPOSIT; BUT TH ROUGH ACCOUNT PAYEE CHEQUES. THEREFORE, WHEN ALL THESE DOCUMENTARY EVIDENCES ARE CONSIDERED THERE APPEARS NOT MUCH BASIS FOR ANY ADDITION. 5.10 IT IS SEEN THAT IN THE LATEST DECISION, THE HO N'BLE DELHI HIGH COURT IN THE CASE OF OASIS HOSPITALITIES P LTD (2011) 333 ITR 119 DEL, AFTER CONSIDERING ALL THE RELEVANT DECISIONS ON THE ISSUE INCLUDING THE DECISION OF TH E HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS P LTD (SUPRA), DECISION OF THE FU LL BENCH OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF SOPHIA FINANCE LTD REPORTED IN 205 ITR 98 (DEL)(FB) AND THE DECISION IN THE CASE OF DIVINE LEASING & FINANCE LT D (SUPRA) HAS OBSERVED AS UNDER: 'IT IS CLEAR FROM THE ABOVE THAT THE INITIAL BURDEN IS UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. IN ORDER TO DISCHARGE THIS BURDEN, THE ASSESSEE IS REQUIRED TO PROVE: (A) THE IDENTITY OF SHAREHOLDER; (B) THE GENUINENESS OF TRANSACTION; AND (C) THE CREDITWORTHINESS OF SHAREHOLDERS. 12. IN CASE THE INVESTOR/SHAREHOLDER IS AN INDIVIDU AL, SOME DOCUMENTS WILL HAVE TO BE FILED OR THE SAID SHAREHOLDER WILL HAVE TO BE PRODUCED BEFOR E THE ASSESSING OFFICER TO PROVE HIS IDENTITY. IF THE CREDITOR/SUBSCRIBER IS A COMPANY, THEN THE DETAILS IN THE FORM OF REGISTERED ADDRESS OR PAN IDENTITY, ETC., CAN BE FURNISHED. 13. THE GENUINENESS OF THE TRANSACTION IS TO BE DEM ONSTRATED BY SHOWING THAT THE ASSESSEE HAD, IN FACT RECEIVED MONEY FROM THE SAID SHAREHOLD ER AND IT CAME FROM THE COFFERS OF THAT VERY SHAREHOLDER. THE DIVISION BENCH HELD THAT WHEN THE MONEY IS RECE IVED BY CHEQUE AND IS TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS, THE GENUINENESS OF TRANSACTION WOULD BE PROVED. OTHER DOCUMENTS SHOWING THE GENUINENESS OF TRANSACT ION COULD BE COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHA RE TRANSFER REGISTER, ETC. 14. AS FAR AS CREDITWORTHINESS OR FINANCIAL STRENGT H OF THE CREDITOR/SUBSCRIBER IS CONCERNED, THAT CAN BE PROVED BY PRODUCING THE BANK STATEMENT OF THE CREDITOR/SUBSCRIBER SHOWING THAT IT HAD SUFFICIENT BALANCE IN ITS ACCOUNTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE CAPITAL. THIS JUDGMENT FURTHER HOLDS THAT ONCE THESE DOCUMENTS AR E PRODUCED, THE ASSESSEE WOULD HAVE SATISFACTORILY DISCHARGED THE ONUS CAST UPON HIM. T HEREAFTER, IT IS FOR THE ASSESSING OFFICER TO SCRUTINIZE THE SAME AND IN CASE HE NURTURES ANY DOU BT ABOUT THE VERACITY OF THESE DOCUMENTS TO PROBE THE MATTER FURTHER. HOWEVER, TO DISCREDIT THE DOCUMENTS PRODUCED BY THE ASSESSEE ON THE AFORESAID ASPECTS, THERE HAVE TO BE SOME COG ENT REASONS AND MATERIALS FOR THE ASSESSING OFFICER AND HE CANNOT GO INTO THE REALM O F SUSPICION.' ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 12 THE BOMBAY HIGH COURT IN THE CASE OF CIT V. CREATIV E WORLD TELEFILMS LTD. (IN I. T. A. NO. 2182 OF 2009 DECIDED ON OCTOBER 12, 2009) [2011 ] 333 ITR 100 HAS HELD THAT: - THE RELEVANT PORTION OF THIS ORDER IS REPRODUCED BE LOW: 'IN THE CASE IN HAND, IT IS NOT DISPUTED THAT THE A SSESSEE HAD GIVEN THE DETAILS OF NAME AND ADDRESS OF THE SHAREHOLDER, THEIR PAN/GIR NUMBER AN D HAD ALSO GIVEN THE CHEQUE NUMBER, NAME OF THE BANK. IT WAS EXPECTED ON THE PART OF THE ASSESSING OFFICER T O MAKE PROPER INVESTIGATION AND REACH THE SHAREHOLDERS. THE ASSES SING OFFICER DID NOTHING EXCEPT ISSUING SUMMONS WHICH WERE ULTIMATELY RETURNED BACK WITH AN ENDORSEMENT NOT TRACEABLE. IN OUR CONSIDERED VIEW, THE ASSESSING OFFICER OUGHT TO HAV E FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS S O AS TO REACH THE SHAREHOLDERS SINCE ALL THE RELEVANT MATERIAL DETAILS AND PARTICULARS WERE GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER. IN THE ABOVE CIRCUMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE FAULTED. NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THE APPE AL- IN THE RESULT, THE APPEAL IS DISMISSED IN LIMINE WITH NO ORDER AS TO COSTS. THE HON'BLE BOMBAY HIGH COURT THUS CLEARLY HELD THA T ONCE DOCUMENTS LIKE PAN CARD, BANK ACCOUNT DETAILS OR DETAILS FROM THE BANKERS WE RE GIVEN BY THE ASSESSEE, ONUS SHIFTS UPON THE ASSESSING OFFICER END IT IS ON HIM TO REACH THE SHAREHOLDERS TO ASCERTAIN THE TRUE FACTS. IT IS, THUS, FOR THE ASSESSING OFFI CER TO MAKE FURTHER INQUIRIES WITH REGARD TO THE STATUS OF THESE PARTIES TO BRING ON RECORD A NY ADVERSE FINDINGS REGARDING THEIR CREDITWORTHINESS. THIS WOULD BE MORE SO WHERE THE A SSESSEE IS A PUBLIC LIMITED COMPANY AND HAS ISSUED THE SHARE CAPITAL TO THE PUB LIC AT LARGE, AS IN SUCH CASES THE COMPANY CANNOT BE EXPECTED TO KNOW EVERY DETAIL PER TAINING TO THE IDENTITY AND THE FINANCIAL WORTH OF THE SUBSCRIBERS. FURTHER THE INI TIAL BURDEN ON THE ASSESSEE WOULD BE SOMEWHAT HEAVY IN CASE THE ASSESSEE IS A PRIVATE LI MITED COMPANY WHERE THE SHAREHOLDERS ARE FAMILY FRIENDS/CLOSE ACQUAINTANCES , ETC. IT IS BECAUSE OF THE REASON THAT IN SUCH CIRCUMSTANCE, THE ASSESSEE CANNOT FEIG N IGNORANCE ABOUT THE STATUS OF THESE PARTIES. 5.11 THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CIT V. P, MOHANAKALA [2007] 291 ITR 278 IS ALSO RELEVANT ON THE FACTS OF THE CASE. IN T HAT CASE, THE ASSESSEE HAD RECEIVED FOREIGN GIFTS FROM ONE COMMON DONOR. THE P AYMENTS WERE MADE TO THEM BY INSTRUMENTS ISSUED BY FOREIGN BANKS AND CREDITED TO THE RESPECTIVE ACCOUNTS OF THE ASSESSEES BY NEGOTIATIONS THROUGH BANK IN INDIA. TH E EVIDENCE INDICATED THAT THE DONOR WAS TO RECEIVE SUITABLE COMPENSATION FROM THE ASSES SEES. THE ASSESSING OFFICER HELD THAT THE GIFTS THOUGH APPARENT WERE NOT REAL AND AC CORDINGLY TREATED ALL THOSE AMOUNTS WHICH WERE CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, AS THEIR INCOME APPLYING SECTION 68 OF THE ACT. THE ASSESSEE DID NOT CONTEND THAT EVEN IF THEIR EXPLANATION WAS NOT SATISFACTORY THE AMOUNTS WERE NOT OF THE NATURE OF INCOME. THE COMMISSIONER OF INCOME-TAX (APPEALS) CONFIRMED THE ASSESSMENT. ON F URTHER APPEAL, THERE WAS A DIFFERENCE OF OPINION BETWEEN THE TWO MEMBERS OF TH E APPELLATE TRIBUNAL AND THE MATTER WAS REFERRED TO THE VICE PRESIDENT WHO CONCURRED WI TH THE FINDINGS AND CONCLUSIONS OF THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOM E-TAX (APPEALS). ON APPEAL, THE HIGH COURT RE-APPRECIATED THE EVIDENCE AND SUBSTITU TED ITS OWN FINDINGS AND CAME TO THE CONCLUSION THAT THE REASONS ASSIGNED BY THE TRI BUNAL WERE IN THE REALM OF SURMISES, CONJECTURE AND SUSPICION. ON APPEAL TO THE SUPREME COURT, THE COURT WHILE REVERSING THE DECISION OF THE HIGH COURT HELD THAT THE FINDIN GS OF THE ASSESSING OFFICER, COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUN AL WERE BASED ON THE MATERIAL ON RECORD AND NOT ON ANY CONJECTURES AND SURMISES. THA T THE MONEY CAME BY WAY OF BANK CHEESES AND WAS PAID, THROUGH THE PROCESS OF BANKIN G TRANSACTION AS NOT BY ITSELF OF ANY CONSEQUENCE. THE HIGH COURT MISDIRECTED ITSELF AND ERRED IN DISTURBING THE ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 13 CONCURRENT FINDINGS OF FACT. WHILE DOING SO, THE LE GAL POSITION CONTAINED IN SECTION 68 OF THE ACT WAS EXPLAINED BY THE SUPREME COURT BY ASSE SSING THAT A BARE READING OF SECTION 68 OF THE ACT SUGGESTS THAT (I) THERE HAS T O BE CREDIT OF AMOUNTS IN THE BOOKS LTD. MAINTAINED BY THE ASSESSEE; (II) SUCH CREDIT HAS TO BE A SUM OF MONEY DURING THE PREVIOUS YEAR ; AND (III) EITHER (A) THE ASSESSEE O FFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDITS FOUND IN THE BOOKS, OR ( B) THE EXPLANATION OFFERED BY THE ASSESSEE, IN THE OPINION OF THE ASSESSING OFFICER, IS NOT SATISFACTORY. IT IS ONLY THEN THAT THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THE EXPRESSION 'THE ASSESSEE OF FERS NO EXPLANATION' MEANS THE ASSESSEE OFFERS NO PROPER, REASONABLE AND ACCEPTABL E EXPLANATION AS REGARDS THE SUMS FOUND CREDITED IN THE BOOKS MAINTAINED BY THE ASSES SEE. THE OPINION OF THE ASSESSING OFFICER FOR NOT ACCEPTING THE EXPLANATION OFFERED B Y THE ASSESSEE AS NOT SATISFACTORY IS REQUIRED TO BE BASED ON PROPER APPRECIATION OF MATE RIAL AND OTHER ATTENDING CIRCUMSTANCES AVAILABLE ON THE RECORD. THE OPINION OF THE ASSESSING OFFICER IS REQUIRED TO BE FORMED OBJECTIVELY WITH REFERENCE TO THE MATE RIAL ON RECORD. APPLICATION OF MIND IS THE SINE QUA NON FOR FORMING THE OPINION. IN CASES WHERE THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE OF THE SUMS FO UND CREDITED IN THE BOOKS IS NOT SATISFACTORY THERE IS, PRIMA FACIE, EVIDENCE AGAINS T THE ASSESSEE, VIZ., THE RECEIPT OF MONEY. THE BURDEN IS ON THE ASSESSEE TO REBUT THE S AME, AND, IF HE FAILS TO REBUT IT, IT CAN BE HELD AGAINST THE ASSESSEE THAT IT WAS A RECE IPT OF AN INCOME NATURE. THE BURDEN IS ON THE ASSESSEE TO TAKE THE PLEA THAT EVEN IF TH E EXPLANATION IS NOT ACCEPTABLE, THE MATERIEL AND ATTENDING CIRCUMSTANCES AVAILABLE ON R ECORD DO NOT JUSTIFY THE SUM FOUND CREDITED IN THE BOOKS BEING TREATED AS A RECEIPT OF INCOME NATURE. 5.12 IT IS ALSO OF RELEVANCE TO POINT OUT THAT I N CIT V. STELLAR INVESTMENT LTD. [1991] 192 ITR 287 (DELHI) WHERE THE INCREASE IN SUBSCRIBED CAPITA L OF THE RESPONDENT- COMPANY ACCEPTED BY THE INCOME-TAX OFFICER AND REJE CTED BY THE COMMISSIONER OF INCOME-TAX ON THE GROUND THAT A DETAILED INVESTIGAT ION WAS REQUIRED REGARDING THE GENUINENESS OF SUBSCRIBERS TO SHARE CAPITAL, AS THE RE WAS A DEVICE OF CONVERTING BLACK MONEY BY ISSUING SHARES WITH THE HELP OF FORMATION OF AN INVESTMENT WHICH WAS REVERSED BY THE 'TRIBUNAL, THE DELHI HIGH COURT HEL D THAT EVEN IF IT BE ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL WERE NOT GENUINE, UNDER NO CIRCUMSTANCES THE AMOUNT OF SHARE CAPITAL COULD BE REGARDED AS UN DISCLOSED INCOME OF THE COMPANY. THIS VIEW WAS CONFIRMED BY THE APEX COURT IN CIT V. STELLER INVESTMENT LTD. [2001] 251 ITR 263. IN VIEW OF THIS LEGAL POSITION, THE PRESEN T APPEAL IS TO BE DECIDED. IT IS CLEAR FROM THE DECISION OF THE HON'BLE DELHI HIGH COURT I N THE CASE OF OASIS HOSPITALITIES P.LTD. 2011 333 ITR 119 (DEL.), THAT ONCE THE ASSES SEE FILED COPY OF PAN, ACKNOWLEDGEMENT COPY OF THE RETURN OF INCOME OF THE INVESTING COMPANY, THEIR BANK ACCOUNTS STATEMENTS FOR THE RELEVANT PERIOD; THEN E VEN IF THE PARTIES WERE NOT PRODUCED IN SPITE OF THE SPECIFIC DIRECTIONS OF THE ASSESSIN G OFFICER, THE ADDITION COULD NOT BE SUSTAINED AS THE PRIMARY ONUS WAS DISCHARGED BY THE ASSESSEE BY PRODUCING THE PAN, BALANCE SHEET, COPY OF THE ACKNOWLEDGEMENT COPY OF RETURN OF THE APPLICANTS ETC.. IN THE INSTANT CASE, THERE IS NO DISPUTE ABOUT THE IDENTIT Y OF THE APPLICANT COMPANY, WHO HAD PAID THE APPLICATION MONEY AND THE SOURCE OF THE AP PLICATION MONEY WAS ALSO FOUND IN THE RESPECTIVE BANK ACCOUNTS OF THE INVESTING COMPA NY AND THERE WAS NO TRACE OF CASH DEPOSIT IN THE BANK ACCOUNTS OF THE INVESTING COMPA NY, THEN, THE ACTION OF THE ASSESSING OFFICER DUE TO THE PREMIUM ON SHARES WITH OUT MAKING FURTHER DETAILED ENQUIRY TO ESTABLISH THAT THE PROVISIONS OF SECTION 68 OF T HE INCOME TAX ACT WERE ATTRACTED IN THE PRESENT CASE IS DIFFICULT TO SUSTAIN IN APPEAL. THE ASSESSING OFFICER HAS MADE ADDITION ON SOME DOUBTS AND SUSPICION BUT HAS NOT ESTABLISHE D ANY DIRECT OR INDIRECT LINK OF ASSESSEE'S OWN MONEY FLOWING OUT AND THEN AGAIN REC EIVED BY THE ASSESSEE IN THE FORM ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 14 OF SHARE CAPITAL AND PREMIUM. THE ASSESSEE HAD PLAC ED ON RECORD THE EVIDENCE AS WELL AS COPY OF INCOME-TAX RETURNS OF THE SHARE APPLICAN TS. KEEPING IN VIEW ALL THESE EVIDENCES IT CANNOT BE HELD THAT THE ASSESSEE DID N OT ESTABLISH THE IDENTITY OF THE SHARE APPLICANTS. THE HON'BLE DELHI HIGH COURT IN THE CA SE OF CIT VS GANGESHWARI METAL PVT. LTD 2014 361 ITR 10 HAS HELD THAT:- 'IN FACT, IN NOVA PROMOTERS AND FINLEASE (P) LTD. ( SUPRA) ITSELF THIS COURT HAS OBSERVED, IN THE CONTEXT OF LOVELY EXPORTS (P) LTD. (SUPRA), AS UNDE R: - THE RATIO OF A DECISION IS TO BE UNDERSTOOD AND APP RECIATED IN THE BACKGROUND OF THE FACTS OF THAT CASE. SO UNDERSTOOD, IT WILL BE SEEN, THAT WHE RE THE COMPLETE PARTICULARS OF THE SHARE APPLICANTS SUCH AS THEIR NAMES AND ADDRESSES, INCOM E TAX FILE -NUMBERS, THEIR CREDITWORTHINESS, SHARE APPLICATION FORMS AND SHARE HOLDERS' REGISTER, SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO THE ASSESSING OFFICER AND TH E ASSESSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS PO SSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CA N BE MADE IN THE HANDS OF THE COMPANY UNDER SEC.68 AND THE REMEDY OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE WITH LAW . WE ARE AFRAID THAT WE CANNOT APPLY THE RATIO TO A CASE, SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSS ESSION OF MATERIAL THAT DISCREDITS AND IMPEACHES THE PARTICULARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF-CONFESSED 'ACCOMMODATION ENTRY PROVIDERS', WHO SE BUSINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT THEIR UNACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION, AND THE ASSESSEE. THE RATIO IS INAPPL ICABLE TO A CASE, AGAIN SUCH AS THE PRESENT ONE, WHERE THE INVOLVEMENT OF THE ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDICATED BY VALID MATERIAL MADE AVAILABLE TO THE ASSESSING OFFI CER AS A RESULT OF INVESTIGATIONS CARRIED OUT BY THE REVENUE AUTHORITIES INTO THE ACTIVITIES OF S UCH 'ENTRY PROVIDERS'. THE EXISTENCE WITH THE ASSESSING OFFICER OF MATERIAL SHOWING THAT THE SHAR E SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE- MEDITATED PLAN - A SMOKESCREEN - CONCEIVED AND EXECUTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABIL ITY OF THE RATIO. IN OUR UNDERSTANDING, THE RATIO IS ATTRACTED TO A CASE WHERE IT IS A SIMPLE Q UESTION OF WHETHER THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON HIM UNDER SEC.68 TO PROVE AND ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GEN UINENESS OF THE TRANSACTION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COM E FORWARD TO MERELY REJECT THE SAME, WITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY IN TO THE MATERIAL PLACED BEFORE HIM. THE CASE BEFORE US DOES NOT FAIL UNDER THIS CATEGORY AND IT WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY. AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES OF CASES HAVE BEEN, INDICATED. ONE IN WHICH THE ASSESSING OF FICER CARRIES-OUT THE EXERCISE WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSIN G OFFICER SITS BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIO NS. THE PRESENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER, AFTER NOTING THE FACTS, MERELY REJECTED THE SAME. THIS WOULD BE APPARENT FROM THE OBSERVATIONS OF THE ASSE SSING OFFICER IN THE ASSESSMENT ORDER TO THE FOLLOWING EFFECT:- 'INVESTIGATION MADE BY THE INVESTIGATION WING OF TH E DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRANSACTION OF ACCOMMODATION ENT RY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF RS.1,11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CR EDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS RECEIVED THE SHARE APPLICA TION MONEY FOR ALLOTMENT OF ITS SHARE. IT WAS STATED THAT THE ACTUAL AMOUNT RECEIVED WAS RS. 55,50,000/- AND NOT RS. 1,11,50,000/- AS MENTIONED IN THE NOTICE. THE ASSESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTION OF THE ASSESSEE IN RESPECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT RS. 55,50,000/-. THE ASSESSEE HAS FURTHER TRIED TO EXPLAIN THE SOURCE OF THIS AMOUNT OF RS. 55,50,000/ - BY FURNISHING COPIES OF SHARE APPLICATION MONEY, BALANCE SHEET, ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT THE QUESTION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARI SE. THIS EXPLANATION OF THE ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REMAINS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS HAS BEEN ARRIVED BY THE INVESTIG ATION WING OF THE DEPARTMENT. AS SUCH ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 15 ENTRIES OF RS. 55,50,000/- RECEIVED BY THE ASSESSEE ARE TREATED AS AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED TO IT 'S INCOME. SINCE I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IT S INCOME, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITIATED SEPARATELY.' THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVOUR OF THE REV ENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CLEARLY DISTINGUISHABLE AND FALL I N THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA). THER E WAS A CLEAR LACK OF INQUIRY ON THE PART, OF THE ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISH ED ALL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. IN SUCH AN EVENTUALITY NO ADDITI ON CAN BE MADE UNDER SECTION 68 OF THE ACT. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBUNAL IS CORRECT IN LAW. THE APPEAL IS DISMISSED.' 5.13 IN VIEW OF THE LEGAL POSITION EMANATING FROM L EGAL PRECEDENTS AND THE OBSERVATIONS OF HON'BLE DELHI HIGH COURT, IN THE CASE OF GANGESH WARI METAL P. LTD. AS DISCUSSED ABOVE IT IS NOTED THAT WHEN REQUISITE DOCUMENTS SUC H AS PAN, BANK ACCOUNTS, BALANCE SHEET ETC. WERE AVAILABLE WITH THE A.O., TO ESTABLI SH THAT NO CASH TRANSACTIONS WERE INVOLVED IN THE BANK ACCOUNTS OF THE INVESTING COMP ANIES AND INDIVIDUAL SHARE APPLICANTS THEN WITHOUT FURTHER PROBE TO PROVE CONT RARY THE ADDITION U/S 68 IN THE HAND OF THE ASSESSEE CANNOT BE MADE. IN VIEW OF THE ABOVE D ISCUSSION ON THE FACTS OF THE CASE AND HAVING REGARD TO THE DECISIONS OF COURTS AND JU DICIAL PRECEDENTS AS NOTED ABOVE, THE ADDITION MADE BY THE A.O. OF THE SHARE CAPITAL AND PREMIUM OF RS. 2,15,00,000/- UNDER SECTION 68 OF THE INCOME ACT 1961 CANNOT BE SUSTAIN ED IN APPEAL AND IS DIRECTED TO BE DELETED. ACCORDINGLY, THESE GROUNDS OF APPEAL ARE A LLOWED . AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 7. THE LD. DEPARTMENTAL REPRESENTATIVE [ DR] RELYING UPON THE FINDINGS OF LD. AO, DREW ATTENTION TO THE DECISION OF HONBLE APEX COURT IN PR.CIT V/S NRA IRON & STEEL PVT. LTD. [103 TAXMANN. COM 48], DECISION OF HONBLE DELHI HIGH COURT IN CIT V/S N.R. PORTFOLIO PVT. LTD. [222 TAXMAN 157] AND THE DECISION OF AHMEDABAD TRIBUNAL IN PAVANKUMAR M. SANGHVI V/S ITO [81 TAXMANN.COM 308]. ON THE OTHER HAND, LD. AUTHORISED REPRESENTATIVE FO R ASSESSEE [AR], DISTINGUISHING THE FACTS OF CASE LAW S CITED BY THE REVENUE, RELIED UPON THE FINDINGS AND CONCLUSION OF LD. FIRST APPELLATE AUTHORITY. RELIANCE HAS SIMILARLY BEEN PLACED ON NU MEROUS JUDICIAL PRONOUNCEMENTS FAVORING THE ASSESSEE. ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 16 8.1 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS, RELEVANT MATERIAL ON RECORD AND DELIBERATED ON JUDICIAL PRON OUNCEMENTS AS CITED BEFORE US. FROM PERUSAL OF FACTUAL MATRIX, TH E UNDISPUTED POSITION THAT EMERGES IS THE FACT THE ASSESSEE HAS ISSUED SHARE CAPITAL TO AS MANY AS 15 CORPORATE ENTITIES DURING THE YEAR AT CERTAIN PREMIUM. IN SUPPORT OF THE TRANSACTIONS, THE ASSESS EE PLACED ON RECORD PLETHORA OF DOCUMENTS AS TABULATED / ENUMERA TED BY US IN PRECEDING PARAS 5.4 & 6.1. ON THE STRENGTH OF THIS SAME, IT WAS PLEADED THAT THE ASSESSEE PROVED THE IDENTITY OF TH E INVESTOR, CREDITWORTHINESS OF THE TRANSACTIONS AND GENUINENES S OF THE TRANSACTIONS. WE HAVE CONSIDERED THESE DOCUMENTS. 8.2 UPON PERUSAL OF THESE DOCUMENTS, WE FIND THAT A LL THE INVESTORS ARE CORPORATE ENTITIES HOLDING VALID PAN AND ASSESS ED TO INCOME TAX. THE ACCOUNTS OF ALL THE ENTITIES ARE SUBJECTED TO A UDIT UNDER THE COMPANIES ACT AND THE INVESTMENT MADE BY THESE ENTI TIES WERE DULY REFLECTED IN THEIR RESPECTIVE FINANCIAL STATEMENTS, THE COPIES OF WHICH HAS ALSO BEEN PLACED ON RECORD. UNDISPUTEDLY, THE I NVESTMENT WAS MADE THROUGH BANKING CHANNELS AND THERE ARE NO ALLE GATIONS OF IMMEDIATE CASH DEPOSITS AGAINST THOSE ENTITIES BEFO RE MAKING INVESTMENT IN THE ASSESSEE COMPANY. THE ASSESSEE HA D NOT ONLY FURNISHED COPIES OF OWN BANK STATEMENTS BUT ALSO PL ACED ON RECORD FINANCIAL STATEMENTS REFLECTING THE SOURCE OF STATE D INVESTMENTS IN THE ASSESSEE COMPANY. THIS BEING THE CASE, THE ALLEGATI ON OF LD. AO THAT THESE ENTITIES HAD NO FINANCIAL STRENGTH TO MAKE TH E INVESTMENT IN ASSESSEE COMPANY, WOULD HAVE NO LEGS TO STAND. NOTH ING ON RECORD FORTIFY THE FACT THAT ANY CASH GOT EXCHANGED BETWEE N THE ASSESSEE ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 17 AND THE INVESTOR COMPANY WHICH WOULD SUGGEST THAT A SSESSEES UNACCOUNTED MONEY IN THE GARB OF SHARE CAPITAL WAS ROUTED INTO THE ASSESSEES ACCOUNT THOUGH THESE INVESTORS. THE ALLO TMENT OF SHARES WAS MADE AS PER DUE PROCESS OF LAW AFTER DUE COMPLI ANCE WITH REGISTRAR OF COMPANIES. THE INVESTMENTS WERE DULY S UPPORTED BY THE BOARD RESOLUTIONS OF THE ASSESSEE AS WELL AS INVEST OR ENTITIES. THE BANK STATEMENTS, SHARE APPLICATION FORMS, BOARD RES OLUTION, COPIES OF FORM NO. 2 & FORM NO. 5 AS FILED WITH ROC HAS ALSO BEEN PLACED ON RECORD. NO INFIRMITY COULD BE POINTED OUT BY THE RE VENUE IN THE SAME. ON THE BASIS OF ALL THESE OBSERVATIONS, IT COULD SA FELY BE CONCLUDED THAT THE ASSESSEE HAD DISCHARGED THE PRIMARY ONUS O F PROVING THE IDENTITY, CREDITWORTHINESS & GENUINENESS OF THE TRA NSACTIONS AND THE ONUS HAD SHIFTED UPON REVENUE TO REBUT THE EVIDENCE S FURNISHED BY THE ASSESSEE. EXCEPT FOR ISSUING NOTICES U/S 133(6) , NO FURTHER INVESTIGATION HAS BEEN CARRIED OUT BY LD. AO AND NO THING HAS BEEN BROUGHT ON RECORD TO CONTROVERT THE ASSESSEES EVID ENCES. IT IS TRITE LAW THAT NO ADDITIONS COULD BE MADE MERELY ON THE B ASIS OF SUSPICION, CONJECTURES OR SURMISES. THE EXTENT AND DEGREE OF I NVESTIGATION CARRIED OUT BY LD. AO DO NOT INSPIRE US TO CONCUR W ITH THE SUBMISSIONS MADE BY LD. DR BEFORE US. THIS BEING THE CASE, THE LEGAL PROPOSITION NOTED BY US IN THE INITIAL PARAGRAPHS, SQUARELY APP LIES TO THE FACT OF THE CASE. THE ALLEGATIONS THAT SOME INVESTORS WERE BANN ED BY SEBI FOR CERTAIN PERIOD OR THE FACT THAT SOME ENTITIES WERE HELD TO BE CARRYING OUT SHAM TRANSACTIONS, IN OUR CONSIDERED OPINION, C OULD NOT BE USED TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE UNLESS THESE FACTS WERE CORROBORATED BY ANY SPECIFIC FINDINGS AGAINST THE A SSESSEE. SIMILARLY, ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 18 MERE NON-REPLY TO NOTICE U/S 133(6), AS PER THE DEC ISION OF HONBLE BOMBAY HIGH COURT IN CIT VS. NIKUNJ EXIMP ENTERPRISES PRIVATE LIMITED [372 ITR 619] WOULD NOT AUTOMATICALLY LEAD TO A CONCLUSION THAT THE PARTIES WERE NOT GENUINE PARTICULARLY WHEN THE ASSESSEE HAD FURNISHED THE REQUISITE DETAILS AND DISCHARGED THE ONUS CASTED UPON HIM, IN THIS REGARD. 8.3 SO FAR AS THE ADDITION ON ACCOUNT OF CALL MONEY IS CONCERNED, WE FIND THAT THE SHARES WERE ALREADY ALLOTTED IN EA RLIER YEARS AND SIMILAR CALL MONEY PAID BY ONE OF THE DIRECTORS OF ASSESSEE COMPANY WAS ACCEPTED BY LD.AO. THEREFORE, THERE COULD BE NO OCCASION TO CONSIDER THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 WHEN THE RECEIPTS WERE FROM EXISTING SHAREHOLDERS. 8.4 THEREFORE, ON THE FACTS AND CIRCUMSTANCES, THE CASE LAWS BEING CITED BY US IN THE OPENING PARAGRAPHS AND CASE LAWS RELIED UPON BY LD. FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER WERE APPLICABLE TO THE FACTS OF THE CASE AND WE ARE OF THE CONSIDERED OPINION THAT THE REVENUE WAS NOT ABLE TO DISCHARGE THE BURDEN OF DIS PROVING THE GENUINENESS OF THE STATED TRANSACTIONS. 8.5 THE LD. DR HAS RELIED UPON THE JUDGEMENT OF HON BLE APEX COURT RENDERED IN PCIT VS. NRA IRON & STEEL PVT. LTD. [412 ITR 161] WHICH WE HAVE CAREFULLY STUDIED. UPON PERUSAL, WE NOTE CERTA IN DISTINGUISHING FEATURES VIS--VIS FACTUAL MATRIX OF THE PRESENT CA SE. UPON PERUSAL OF PARA 3.7 & 3.8 OF THE SAID JUDGEMENT, IT IS NOTED THAT L D. AO HAD ISSUED SUMMONS TO AS MANY AS 19 INVESTOR ENTITIES BUT NOBO DY APPEARED ON BEHALF OF THE INVESTOR COMPANIES. THE SUBMISSIONS W ERE RECEIVED THROUGH DAK ONLY WHICH CREATED A DOUBT ABOUT THE IDENTITY O F THE INVESTOR ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 19 COMPANY. FURTHER, LD. AO INDEPENDENTLY GOT FIELD IN QUIRIES CONDUCTED AT THE LOCATION OF INVESTOR COMPANIES, THE RESULT OF W HICH HAS BEEN TABULATED IN THE SAID PARA. NOTICE WAS SERVED ON FEW ENTITIES BUT THE SAME WERE NOT REPLIED TO. IN FEW CASES, THE NOTICES WERE RETURNED BACK. SUBMISSIONS WERE RECEIVED IN FEW CASES THOUGH DAK WHEREIN THE C OMPANY ONLY PROVIDED THE MODE OF INVESTMENT BUT NO REASONS WERE SUPPLIED FOR PAYING A HUGE PREMIUM OF RS.190/- PER SHARE. ANOTHER STRIK ING FEATURE WAS THAT MOST OF THE INVESTORS HAD REFLECTED MEAGRE INCOME D URING ASSESSMENT YEAR UNDER DISPUTE. THE TWO COMPANIES IN MUMBAI AS WELL AS GUWAHATI WERE FOUND TO BE NON-EXISTENT. WITH RESPECT TO KOLK ATA COMPANIES, THE RESPONSE CAME THROUGH DAK ONLY AND NOBODY APPEARED. FURTHER, THE BANK STATEMENTS WERE NOT PRODUCED IN MOST OF THE CA SES TO ESTABLISH THE SOURCE OF FUNDS FOR MAKING HUGE INVESTMENTS. HOWEVE R, THE FACTUAL MATRIX, BEFORE US, IN THE PRESENT CASE IS QUITE DIF FERENT. AS NOTED IN EARLIER PARAGRAPHS, THE INVESTOR ENTITIES WERE ASSESSED TO TAX AND THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS OF PROVING THE IDEN TITY OF THE INVESTORS, CREDITWORTHINESS OF THE TRANSACTIONS AND GENUINENES S OF THE TRANSACTIONS. THEREFORE, THE RATIO OF AFORESAID DECISION, IN OUR RESPECTFUL SUBMISSION, DO NOT APPLY TO THE FACTS OF THE CASE. 8.6 THE DECISION OF HONBLE DELHI HIGH COURT IN CIT V/S N.R. PORTFOLIO PVT. LTD. [SUPRA] HAS BEEN RENDERED IN PECULIAR CIRCUMSTANCES WHEREIN THE ASSESSEE COMPANY ADOPTED NON- COOPERATIVE ATTITUDE BEFORE LD. AO WITH A VIEW TO T HWART THE INVESTIGATION, WHICH IS NOT THE CASE HERE. SIMILARL Y, THE DECISION OF HONBLE BENCH OF AHMEDABAD TRIBUNAL IN PAVANKUMAR M. SANGHVI V/S ITO [81 TAXMANN.COM 308] DEALS WITH THE TRANSACTIONS OF LOANS ITA NO. 5366/MUM/2017 M/S. AMRISE INFRACREATORS PRIVATE LIMITED ASSESSMENT YEAR:2010-11 20 AND THE PERUSAL OF BANK STATEMENT OF LENDER ENTITIE S REVEALED HIGH TRANSACTIONS DURING THE DAY AND A CONSISTENTLY MINI MAL BALANCE AT END OF WORKING DAY. THE JUDGMENT WAS RENDERED AFTER EXTENS IVE ANALYSIS OF THE BANK TRANSACTIONS. NO SUCH FACTS HAVE BEEN SHOWN TO HAVE EXISTED BEFORE US AND NO SUCH ALLEGATIONS OF IMMEDIATE CASH DEPOSI T HAVE BEEN LEVELED BY LD. AO AGAINST THE ASSESSEE. THEREFORE, THE SAID DECISIONS, IN OUR RESPECTFUL SUBMISSION, WOULD NOT APPLY TO THE FACTS OF THE CASE. 8.7 KEEPING IN VIEW THE ENTIRETY OF FACTS AND CIRCUMSTA NCES, WE ARE OF THE CONSIDERED OPINION THAT THE IMPUGNED ORDER, ON THE STATED ISSUE OF ADDITION U/S 68, WOULD REQUIRE NO INTERFERENCE ON O UR PART. THEREFORE, FINDING NO INFIRMITY IN THE IMPUGNED ORDER, WE DISM ISS THE APPEAL. 9. IN RESULT THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND AUGUST, 2019. SD/- SD/- (MAHAVIR SINGH) (MA NOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 22/08/2019 SR.PS, JAISY VARGHESE !'! / COPY OF THE ORDER FORWARDED TO : 1. ;= / THE APPELLANT 2. >?;= / THE RESPONDENT 3. F ( ) / THE CIT(A) 4. F / CIT CONCERNED 5. GH >AI , I , / DR, ITAT, MUMBAI 6. HJK / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.