ITO, New Delhi V. M/s. Rose Wood Buildwell Pvt. Ltd., New Delhi

ITA 5411/DEL/2014

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1645 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 07-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT GOE L
• Assessee Lawyers: SURENDER PAL
• Keywords: Transactions in derivatives; Accommodation entries; Assessment record
• Section: 143(3); 234B; 133(6); 48; 13; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.5958/DEL/2014 ASSESSMENT YEAR: 2011-12 ROSEWOOD BUILDWELL P. LTD., A-12, SWASTHYA VIHAR, NEW DELHI. VS. ITO, WARD-15(4), NEW DELHI. TAN/PAN: AACCR 9241D (APPELLANT) (RESPONDENT) I.T.A. NO.5411/DEL/2014 ASSESSMENT YEAR: 2011-12 ITO, WARD-15(4), NEW DELHI. VS. ROSEWOOD BUILDWELL P. LTD., A-12, SWASTHYA VIHAR, NEW DELHI. TAN/PAN: AACCR 9241D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P. ROY CHOUDHARY, ADV., SHRI RAJ KUMAR GUPTA, CA AND SHRI SUMIT GOEL, CA RESPONDENT BY: SHRI SURENDER PAL, SR.D.R. DATE OF HEARING: 25 09 2019 DATE OF PRONOUNCEMENT: 09 12 2019 O R D E R PER AMIT SHUKLA, JM: THE AFORESAID CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE AGAINST THE IMPU GNED ORDER DATED 25.07.2014, PASSED BY LD. CIT (APPEALS) -XVIII, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S. 143(3) FOR THE ASSESSMENT YEAR 2011-12. I.T.AS. NO.5958 & 5411/DEL/2019 2 2. IN ASSESSEES APPEAL, FOLLOWING GROUNDS HAVE B EEN RAISED: THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, T HE ID. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION / DISALLOWANCE OF RS. 50,12,337/- (BEING THE LOSS SUFFERED BY THE ASSESSE E IN THE DERIVATIVES), AS MADE BY THE ID. A.O. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, CH ARGING OF INTEREST U/S 234A WAS UNJUST & ILLEGAL. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, CH ARGING OF INTEREST U/S 234B WAS UNJUST & ILLEGAL. 2.1 WHEREAS THE REVENUE HAS CHALLENGED THE DELETI ON OF ADDITION OF RS.3,50,00,000/- U/S.68 ON THE FOLLOWIN G GROUNDS: '1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE , THE LEI. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3,5 0,00,000/- U/S. 68 OF THE ACT HOLDING THAT THE ASSESSING OFFIC ER DID NOT CARRY OUT THE EXERCISE REQUIRED UNDER THE LAW'. ' 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. C1T(A) HAS ERRED IN DELETING THE ABOVE ADDITION BY NOT APP RECIATING THE FINDINGS OF THE ASSESSING OFFICER AND MATERIAL EVID ENCE ON RECORD AFTER CONDUCTING PROPER ENQUIRIES BY ISSUING NOTICE S U/S.133(6) OF THE ACT. 3. THE FACTS IN BRIEF QUA THE ISSUE RAISED BY THE A SSESSEE IN ITS APPEAL ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF REAL ESTATE AND DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT ASSES SEE HAS CARRIED OUT F&O / DERIVATIVE TRANSACTIONS IN SHARES IN THIS YEAR. THE ASSESSEE HAS EARNED DERIVATIVE PROFITS OF I.T.AS. NO.5958 & 5411/DEL/2019 3 RS.2,20,000/- AND LOSS OF RS.52,32,337/- AND ACCORD INGLY NET DERIVATIVE LOSS OF RS.50,12,337/- WAS CLAIMED IN TH E P&L ACCOUNT. IN RESPONSE TO THE SHOW CAUSE NOTICE, ASSE SSEE HAS FILED COPY OF BILLS AND CONTRACT NOTES ISSUED BY A BROKER, M/S. TUSHAR COMMODITIES PVT. LTD. LD. ASSESSING OFFICER HAS SENT NOTICE U/S. 133(6) DATED 09.12.2012 TO THE SAID BRO KER AT THE ADDRESS MENTIONED IN THE BILL. HOWEVER, THE SAID NO TICE RETURNED BACK UNSERVED. THEREAFTER, HE SENT NOTICE U/S.133(6) TO NCDEX, IN RESPONSE TO WHICH FOLLOWING INFORMATIO N WAS PROVIDED: THIS HAS REFERENCE TO YOUR LETTER REF. TO/WARD-15(4 )/2013- 14/1004 DATED DECEMBER 2013 REQUESTING THE EXCHANGE (NCDEX) TO PROVIDE TRADING INFORMATION SOUGHT BY YO U PERTAINING TO M/S ROSE WOOD BUILDWELL (P) LTD. (PAN : AACCR9241D) FOR THE FINANCIAL YEAR 2010-11 (01.04.2 010 TO 31.03.2011). WITH REFERENCE TO POINTS 1 & 2 OF YOUR LETTER, WE V ERIFIED THE EXCHANGE RECORDS AND ON VERIFICATION, IT IS OBSERVE D THAT, M/S TUSHAR COMMODITIES P. LTD. (TMID 568) HAS REGISTERE D WITH THE EXCHANGE AS 'MEMBER' AND HAS NOT TRADED DURING PERIOD 01.04.2010 TO 31.03.2011. FURTHER, M/S. ROSE WOOD, BUILDWELL (P) LTD IS NEITHER REGISTERED WITH THE EX CHANGE AS 'MEMBER' NOR 'CLIENT' HENCE WE ARE UNABLE TO PROVID E THE INFORMATION REQUESTED BY YOU VIDE AFOREMENTIONED LE TTER'. ACCORDINGLY, THE ASSESSING OFFICER DISALLOWED THE LOSS CLAIMED ON F&O AND ADDED BACK SUM TO THE INCOME OF THE ASSESSEE. 4. LD. CIT (A) TOO HAS DISMISSED THE ASSESSEES GRO UND ON THE GROUND THAT INQUIRY FROM NCDEX CLEARLY PROVIDED THAT M/S. TUSHAR COMMODITIES PVT. LTD. HAS NOT TRADED DU RING THE I.T.AS. NO.5958 & 5411/DEL/2019 4 PERIOD 01.04.2010 TO 31.03.2011 AND HENCE THE GENUI NENESS OF THE TRANSACTION, COULD NOT BE ESTABLISHED. 5. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT ONE LIMB OF THE SAME TRANSACTION I.E., DERIVATIVE P ROFIT OF RS.2,20,000/- HAS BEEN ACCEPTED AND ONLY THE NET DE RIVATIVE LOSS OF RS.50,12,337/- HAVE BEEN DISALLOWED, AND TH EREFORE, IT CANNOT BE HELD THAT THE LOSS CLAIMED IS NOT GENUINE . OTHERWISE ALSO, THE ASSESSEE HAS FILED THE BILLS AN D THE CONTRACT NOTES ISSUED BY THE BROKER WHICH HAVE NOT BEEN FOUND TO BE FALSE OR NON-GENUINE. THE PAYMENTS HAVE BEEN MADE THROUGH BANKING TRANSACTIONS. FURTHER WHEN THE ASSESSING OFFICER HAD MADE THE INQUIRY FROM THE BRO KER IN THE FINANCIAL YEAR 2013-14, BY WHICH TIME THE ADDRESS O F THE BROKER HAD CHANGED AND THIS FACT WAS NEVER CONFRONT ED BY THE ASSESSING OFFICER TO THE ASSESSEE THAT THE NOTICE S ENT TO THE BROKER HAS COME BACK UNSERVED. THE ASSESSEE IS READ Y TO PROVIDE TO CHANGED ADDRESS OF THE BROKER AND FROM T HEM INQUIRIES CAN BE MADE OTHERWISE ALL THE DOCUMENTARY EVIDENCES PROVING THE TRANSACTIONS HAVE BEEN PRODUC ED, THE SAME CANNOT BE DISREGARDED. 6. ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON T HE ORDER OF THE ASSESSING OFFICER AND LD. CIT (A) AND SUBMIT TED THAT ONCE THE NCDEX HAS CLEARLY STATED THAT THE BROKER H AS NOT TRADED DURING THE PERIOD 01.04.2010 TO 31.03.2011 A ND THE ASSESSEE COMPANY WAS NOT REGISTERED WITH THE EXCHAN GE, THEREFORE, THE ENTIRE DOCUMENTS SUBMITTED BY THE AS SESSEE IS I.T.AS. NO.5958 & 5411/DEL/2019 5 MERE PAPER, AND THEREFORE, THE CLAIM OF LOSS IN THE WAKE OF THE INQUIRY CONDUCTED BY THE ASSESSING OFFICER IS BOGUS AND NON- GENUINE. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON P ERUSAL OF THE RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDE RS AS WELL AS MATERIAL REFERRED TO BEFORE US, WE FIND THAT ASS ESSEE HAD CARRIED OUT F&O/DERIVATIVE TRANSACTION IN SHARES DU RING THE YEAR FROM WHICH IT HAS EARNED DELIBERATIVE PROFIT O F RS.2,20,000/- AND ALSO CLAIMED TO HAVE INCURRED LOS S OF RS.52,32,337/-. ACCORDINGLY, NET OF DERIVATIVE LOSS OF RS.50,12,337/- WAS CLAIMED. THOUGH, THE NOTICE SENT BY THE ASSESSING OFFICER U/S. 133(6) HAD COME BACK UNSERVE D, HOWEVER AS CLAIMED BY THE ASSESSEE, THE FACT THAT T HE NOTICE COULD NOT BE SERVED TO THE BROKER WAS NOT INFORMED DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOR ANY EFFORT WAS MADE TO SEND FURTHER NOTICE TO CALL UPON THE BROKER EVEN AT THE APPELLATE STAGE. THE DOCUMENTARY EVIDENCES FILED BY THE AUTHORITIES BELOW THOUGH SHOWS THAT CERTAIN TRANSAC TIONS HAVE BEEN UNDERTAKEN FROM THE BROKER, M/S. TUSHAR COMMODITIES PVT. LTD. FOR WHICH THE BILLS AND THE C ONTRACT NOTES WERE SUBMITTED ALONG WITH DETAILS OF BANKING TRANSACTION. THE INQUIRY BY THE ASSESSING OFFICER T HOUGH REVEALED THAT M/S. TUSHAR COMMODITIES PVT. LTD. WAS REGISTERED WITH EXCHANGE, BUT THE SAID BROKER HAS N OT TRADED DURING IN THE EXCHANGE FOR THE PERIOD 01.04.2010 TO 31.03.2011. SINCE THE ASSESSEE HAS FURNISHED ALL TH E DOCUMENTS ALONG WITH BANK TRANSACTION DETAILS, THER EFORE, IT I.T.AS. NO.5958 & 5411/DEL/2019 6 CANNOT BE HELD THAT PRIMARY ONUS CAST UPON THE ASSE SSEE HAS NOT BE DISCHARGED. HOWEVER, AT THE SAME TIME THE BR OKER WHO HAS CARRIED OUT SUCH A TRANSACTION COULD NOT CORROB ORATE OR CONFIRM THE TRANSACTION AS THE NOTICE SENT TO THE B ROKER CAME BACK UNSERVED. THUS, THE EXPLANATION AND THE EVIDEN CES SUBMITTED BY THE ASSESSEE COULD NOT BE SUBSTANTIATE D. UNDER THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINIO N THAT THIS ISSUE SHOULD BE REMANDED BACK TO THE ASSESSING OFFI CER TO RE- EXAMINE THE CLAIM OF LOSS AFRESH AND ASSESSEE IS DI RECTED TO SUBSTANTIATE ITS CASE AND PROVIDE NOT ONLY THE CONF IRMATION FROM THE BROKER BUT ALSO THE CORRECT ADDRESS OF THE BROKER AND THE ASSESSING OFFICER WOULD BE AT LIBERTY TO CARRY OUT ANY NECESSARY INQUIRY AS HE DEEM FIT TO VERIFY THE GENU INENESS OF THE TRANSACTION. THE ASSESSEE SHALL COOPERATE WITH THE INQUIRY AS MAY BE ASKED UPON BY THE ASSESSING OFFICER. WE O RDER ACCORDINGLY. 8. THUS, GROUND NO.1 AS RAISED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. 9. GROUNDS NO.2 AND 3 CHALLENGING THE LEVY OF INTER EST U/S.234A AND 234B ARE CONSEQUENTIAL AND ACCORDINGLY THE SAME ARE DISMISSED. 10. IN SO FAR AS REVENUES APPEAL IS CONCERNED, TH E FACTS IN BRIEF ARE THAT DURING THE ASSESSMENT PROCEEDINGS AS SESSEE HAD SHOWN RECEIPT OF SHARE APPLICATION MONEY FROM T HE FOLLOWING FOUR PARTIES: I.T.AS. NO.5958 & 5411/DEL/2019 7 S. NO. NAME OF SHAREHO LDER NO. OF SHARES SHARE CAPITAL (RS.) SHARE PREMIUM (RS.) TOTAL (RS.) 1 NEW INTERNATIONAL STAINLESS PIPE COMPANY LTD. 50,000 5,00,000 45,00,000 50,00,000 2 AUTOMOBILE COMPONENTS INDIA LTS. 1,00,000 10,00,000 90,00,000 1,00,00,000 3 ZOOM DEVEL OPERS SEZ (INDORE) PVT. LTD. 1,00,000 10,00,000 90,00,000 1,00,00,000 4 RANGOLI BUILDTECH PVT. LTD. 1,00,000 10,00,000 90,00,000 1,00,00,000 TOTAL 3,50,000 35,00,000/ - 3,15,00,000 3,50,00,000 11. THUS, THE FACE VALUE OF THE SHARE AT RS.10/- EA CH WAS ISSUED AT A PREMIUM OF RS.90/- PER SHARE. LD. ASSES SING OFFICER THOUGH NOTED THAT ASSESSEE HAD FILED COPY O F CONFIRMATION, COPY OF ITR AND BANK STATEMENT IN RES PECT OF NEW INTERNATIONAL STAINLESS PIPE COMPANY LTD., BUT NO ITR AND BANK STATEMENT WAS FILED IN RESPECT OF ZOOM DEV ELOPERS SEZ (INDORE) PVT. LTD. IN RESPECT OF ONE PARTY, M/S . RANGOLI BUILDTECH PVT. LTD. AGAIN NO BANK STATEMENT WAS FIL ED. THE ASSESSING OFFICER HAD SENT NOTICES U/S. 133(6) TO T HESE PARTIES. HOWEVER IN THE CASE OF THREE PARTIES, THE NOTICE RETURNED BACK UNSERVED EXCEPT IN THE CASE OF M/S. R ANGOLI BUILDTECH PVT. LTD. EVEN THE FRESH NOTICES ISSUED W ERE SENT TO THE OTHER PARTIES AT THE ADDRESS GIVEN BY THE ASSES SEE BUT AGAIN THESE NOTICES REMAIN UNSERVED. THE ASSESSING OFFICER HAD ALSO CALLED FOR COPY OF BANK STATEMENT DIRECTLY FROM THE BANK U/S.133(6) AND ON PERUSAL OF THE BANK STATEMEN T OF ALL THE PARTIES, HE FIND THAT THERE WERE CREDIT ENTRIES OF MORE OR LESS OF EQUAL AMOUNT ON THE SAME DAY OR ONE DAY BEF ORE EVERY DEBIT ENTRIES. ANOTHER FACT NOTED BY HIM WAS THAT T HE SHARES I.T.AS. NO.5958 & 5411/DEL/2019 8 WERE ALLOTTED TO THESE PARTIES ON 30.04.2010. HOWEV ER NONE OF THE ABOVE MENTIONED PARTIES FIGURED IN THE LIST OF SHAREHOLDERS AS ON 31.03.2011. HE ALSO NOTED THOSE SHARES ALLOTT ED TO THE AFORESAID FOUR PARTIES WERE PURCHASED BACK BY THE S ISTER CONCERN OF THE ASSESSEE, M/S. GMA CONSTRUCTION PVT. LTD. IN SUBSEQUENT YEAR WHERE SHRI GULSHAN SHETTY WAS COMMO N DIRECTOR. THE ASSESSING OFFICER HAS ALSO ISSUED SUM MONS U/S.131 TO THE PRINCIPAL OFFICER OF M/S. GMA CONSTR UCTION PVT. LTD. HOWEVER, AS PER HIM, NO COMPLIANCE WAS MA DE. THUS, ON THESE FACTS, HE DEDUCED THAT SHARE ALLOTTE D DURING THE YEAR TO THE FOUR PARTIES AT RS.10 PER EQUITY SH ARE WITH THE PREMIUM OF RS.90/- WERE SOLD BACK BY THESE PARTIES AT RS.5/- PER EQUITY SHARE WITHOUT A PREMIUM FOR WHICH NO PRO PER EXPLANATION OR REASONS HAVE BEEN GIVEN. THUS, HE CO NCLUDED THAT ASSESSEE HAS INTRODUCED ITS OWN UNDISCLOSED IN COME THROUGH FOUR DUMMY COMPANIES IN THE GARB OF SHARE APPLICATION MONEY. HE ALSO OBSERVED THAT THE IDENTI TY AND CAPACITY OF THREE ENTITIES OTHER THAN M/S. RANGOLI BUILDTECH PVT. LTD. REMAIN UNESTABLISHED AND IN CASE OF M/S. RANGOLI BUILDTECH REPLY WAS RECEIVED BUT THE CREDITWORTHINE SS AND GENUINENESS OF THE TRANSACTION COULD NOT BE ESTABLI SHED BY THE ASSESSEE. ACCORDINGLY, THE ADDITION OF RS.3,50, 00,000/- WAS MADE U/S.68. 12. BEFORE THE LD. CIT (A) FOR EACH OF THE FOUR PAR TIES DETAIL SUBMISSION WAS MADE ALONGWITH DOCUMENTARY EVIDENCES AND THE STATUS OF THE INQUIRIES MADE BY THE ASSESSING O FFICER. THESE CAN BE SUMMARISED AS UNDER:- I.T.AS. NO.5958 & 5411/DEL/2019 9 1. M/S. NEW INTERNATIONAL STAINLESS PIPE CO. LTD. (I) THE LD. A. O. HAD CARRIED OUT SUCH INQUIRIES ( EITHER FROM THE SAID M/S NEW INTERNATIONAL STAINLESS PIPE CO. L TD OR FROM THE BANK OF M/S NEW INTERNATIONAL STAINLESS PI PE CO. LTD) AT THE BACK OF THE ASSESSEE. (II) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE LD. A.O. HAD NOT INFORMED THE ASSESSEE THAT THE NOTICE U/S 133(6) ISSUED BY THE LD. A.O. TO THE SAID M/S NEW INTERNATIONAL STAINLESS PIPE CO. LTD HAD RETURNED UNSERVED. (III) ON TAKING INSPECTION OF THE ASSESSMENT FOLDER , THE ASSESSEE HAD NOTED THAT THE NOTICE U/S 133(6) ISSUE D BY THE ID. A. O. TO THE SAID M/S NEW INTERNATIONAL STA INLESS PIPE CO. LTD HAD NOT RETURNED UNSERVED. (IV) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ID. A.O. HAD NOT ASKED THE ASSESSEE TO PROVIDE LATEST A DDRESS OF THE SAID M/S NEW INTERNATIONAL STAINLESS PIPE CO . LTD. (V) SINCE THE ASSESSEE HAD NOT BEEN ASKED TO PROVID E LATEST ADDRESS OF THE SAID M/S NEW INTERNATIONAL STAINLESS PIPE CO. LTD., QUESTION OF PROVIDING ANY OTHER ADDRESS D ID NOT ARISE. (VI) AFTER GETTING THE BANK STATEMENT OF THE SAID M/S. NEW INTERNATIONAL STAINLESS PIPE CO. LTD. FROM THE NAIN ITAL BANK LTD., THE ID. A.O. HAD NOT SOUGHT CLARIFICATIO N REGARDING THE SOURCE OF THE INVESTMENT MADE BY THE SAID I.T.AS. NO.5958 & 5411/DEL/2019 10 M/S. NEW INTERNATIONAL STAINLESS PIPE CO. LTD. IN T HE SHARES OF THE ASSESSEE. 2. M/S. AUTOMOBILE COMPONENTS (INDIA) LTD./AGM PROPERTIES PVT. LTD. (I) THE LD. A. O. HAD CARRIED OUT SUCH INQUIRIES [ EITHER FROM THE SAID M/S AUTOMOBILE COMPONENTS (INDIA) LTD. / A GM PROPERTIES PVT. LTD. OR FROM THE BANK OF M/S AUTOMO BILE COMPONENTS (INDIA) LTD. / AGM PROPERTIES PVT. LTD.] AT THE BACK OF THE ASSESSEE. (II) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. A.O. HAD NOT INFORMED THE ASSESSEE THAT THE NOTICE U/S 133(6) DT. 23.01.2014 ISSUED BY THE LD. A.O. TO THE SAID M/S AUTOMOBILE COMPONENTS (INDIA) LTD. / AGM PROPER TIES PVT. LTD. HAD RETURNED UNSERVED. (III) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. AO HAD NOT ASKED THE ASSESSEE TO PROVIDE THE LA TEST ADDRESS OF THE SAID M/S AUTOMOBILE COMPONENTS (INDI A) LTD./AGM PROPERTIES PVT. LTD. (IV) SINCE THE ASSESSEE HAD NOT BEEN ASKED TO PROV IDE THE LATEST ADDRESS OF THE SAID M/S AUTOMOBILE COMPONENT S (INDIA) LTD./AGM PROPERTIES PVT. LTD., QUESTION OF PROVIDING THE LATEST ADDRESS DID NOT ARISE. (V) THE LD. A.O. HAD CALLED FOR THE BANK STATEMENT OF THE SAID M/S AUTOMOBILE COMPONENTS (INDIA) LTD. / AGM PROPERTIES PVT. LTD. ONLY FROM THE NAINTAL BANK LTD . [FROM I.T.AS. NO.5958 & 5411/DEL/2019 11 WHERE IT HAD MADE PAYMENT OF RS. 19,00,000/- TO THE ASSESSEE]. (VI) AFTER GETTING THE BANK STATEMENT OF THE SAID M /S AUTOMOBILE COMPONENTS (INDIA) LTD./AGM PROPERTIES P VT. LTD. FROM THE NAINITAL BANK LTD., THE ID. A.O. HAD NOT SOUGHT CLARIFICATION REGARDING THE SOURCES OF THE INVESTMENT MADE BY THE SAID M/S AUTOMOBILE COMPONEN TS INDIA LTD./AGM PROPERTIES PVT. LTD. IN THE SHARES O F THE ASSESSEE. (VII) THE LD. A.O. HAD NOT CALLED FOR THE BANK STAT EMENT OF THE SAID M/S AUTOMOBILE COMPONENTS (INDIA) LTD. / AGM PROPERTIES PVT. LTD. FROM THE AXIS BANK LTD. [F ROM WHERE IT HAD MADE PAYMENT OF RS. 81,00,000/- (RS. 23,00,000/- + RS. 58,00,000/-] TO THE ASSESSEE. 3. M/S. ZOOM DEVELOPERS SEZ (INDORE) PVT. LTD. (I) THE LD. ASSESSING OFFICER HAD CARRIED OUT SUCH IN QUIRIES [EITHER FROM THE SAID M/S. ZOOM DEVELOPERS SEZ (IND ORE) PVT. LTD. OR FROM THE BANK OF M/S. ZOOM DEVELOPERS SEZ (INDORE) PVT. LTD.] AT THE BACK OF THE ASSESSEE. (II) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD . ASSESSING OFFICER HAD NOT INFORMED THE ASSESSEE THA T THE NOTICE U/S. 133(6) DATED 23.01.2014 ISSUED BY THE L D. ASSESSING OFFICER TO THE SAID M/S. ZOOM DEVELOPERS SEZ (INDORE) PVT. LTD. HAD RETURNED UNSE RVED. (III) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. A.O. HAD NOT ASKED THE ASSESSEE TO PROVIDE THE LATE ST I.T.AS. NO.5958 & 5411/DEL/2019 12 ADDRESS OF THE SAID M/S ZOOM DEVELOPERS SEZ (INDORE ) PVT. LTD. (IV) SINCE THE ASSESSEE HAD NOT BEEN ASKED TO PROVIDE T HE LATEST ADDRESS OF THE SAID M/S ZOOM DEVELOPERS SEZ (INDORE) PVT. LTD., QUESTION OF PROVIDING THE LATES T ADDRESS DID NOT ARISE. (V) THE LD. A.O. HAD CALLED FOR THE BANK STATEMENT OF THE SAID M/S ZOOM DEVELOPERS SEZ (INDORE) PVT. LTD. FRO M THE NAINTAL BANK LTD. (VI) AFTER GETTING THE BANK STATEMENT OF THE SAID M/S ZOOM DEVELOPERS SEZ (INDORE) PVT. LTD. FROM THE NAINITAL BANK LTD., THE LD. A.O. HAD NOT SOUGHT CLARIFICATION REGARDING THE SOURCE OF THE INVESTMEN T MADE BY THE SAID M/S ZOOM DEVELOPERS SEZ (INDORE) PVT. LTD. IN THE SHARES OF THE ASSESSEE. 4. M/S. RANGOLI BUILDTECH PVT. LTD. (I) THAT DURING THE YEAR UNDER CONSIDERATION, M/S R ANGOLI BUILDTECH PVT. LTD., HOLDING PAN: AACCR8695P HAD APPLIED FOR THE ALLOTMENT OF 100000 SHARES OF RS. 1 0/- EACH ON PREMIUM OF RS. 90/- EACH. IT HAD PAID AN AM OUNT OF RS. 1,00,00,000/- TO THE ASSESSEE ON 27.04.2010 THROUGH TWO DIFFERENT RTGS OF RS. 65,00,000/- AND R S. 35,00,000/- OF THE BANK OF RAJASTHAN LIMITED, NEW DE LHI. (II) THAT DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE ASSESSEE HAD FILED COPIES OF THE CONFIRMATION, ITR FOR I.T.AS. NO.5958 & 5411/DEL/2019 13 A.Y. 2011-12, BALANCE SHEET AS AT 31.03.2011 AND BA NK STATEMENTS ETC. OF M/S RANGOLI BUILDTECH PVT. LTD. (III) THAT DURING THE COURSE OF ASSESSMENT PROCEED INGS, THE ID. A.O. HAD ISSUED NOTICE U/S 133(6) DT. 21.11 .2013 TO M/S RANGOLI BUILDTECH PVT. LTD. (IV) THAT IN RESPONSE TO THE SAID NOTICE, M/S RANG OLI BUILDTECH PVT. LTD. HAD MADE COMPLIANCE VIDE ITS LE TTER DT. 03.12.2013 ALONGWITH ITS ENCLOSURES. (V) THAT ON GETTING THE ASSESSMENT ORDER, THE ASSE SSEE HAD NOTED THAT THE ID. A.O. HAD MENTIONED THAT 'IN CASE OF M/S RANGOLI BUILDTECH PVT. LTD., ALTHOUGH REPLY WAS RECEIVED, THE CAPACITY OF THE PARTY AND GENUINENESS OF THE TRANSACTION HAS NOT BEEN ESTABLISHED. INSPITE OF SP ECIFIC QUERY, IT BLUNTLY REPLIED THAT THE SOURCES OF THEIR INVESTMENT WERE NOT RELEVANT TO THIS ASSESSEE UNDERASSESSMENT'. (VI) THAT THE SAID M/S RANGOLI BUILDTECH PVT. LTD. WAS A COMPANY, WHO WAS IN CONTROL OVER THE FUNDS TO THE T UNE OF RS. 20 CRORES (APPROX.) AND WHOSE INCOME BY WAY OF INTEREST AS ME TUNE OF RS 1 CRORE (APPROX.). OUT OF SUCH FUNDS, THE SAID M/S RANGOLI BUILDTECH PVT. LTD. HAD INVESTED RS.1,00,00,000/- IN 100000 SHARES OF THE ASSESSEE. IT MAY ALSO BE WORTH MENTIONING HERE THAT ITS ASSESSMENT FOR A.Y. 2011-12 HAS BEEN COMPLETED U/S.153C/143(3) BY DCIT, CC-14, NEW DELHI, VIDE ORD ER DATED 28.03.2014. THIS FACT HAD BEEN BROUGHT TO THE I.T.AS. NO.5958 & 5411/DEL/2019 14 KNOWLEDGE OF THE LD. ASSESSING OFFICER DURING THE C OURSE OF ASSESSMENT PROCEEDINGS. 13. LD. CIT (A) AFTER VERIFYING THE ENTIRE RECORDS AND ALSO CALLED UPON THE ASSESSING OFFICER TO EXPLAIN ITS CA SE HAD MADE FOLLOWING OBSERVATION:- ASSESSING OFFICER HAS FAILED TO ESTABLISH THAT THER E WAS CASE OF INVOKING THE PROVISION OF SECTION 68 OF THE I.T. AC T AS UNDER:- (I) IN CASE OF ADDITION OF RS. 50 LACS PERTAINING TO NEW INTERNATIONAL STAINLESS PIPE CO. LTD. IT HAS BEEN A LLEGED BY THE APPELLANT THAT NOTICE U/S 133(6) OF THE I.T. ACT HA S NOT RETURNED UNSERVED. (II) IN THE CASE OF THE ADDITION OF RS. 1 CRORE PE RTAINING TO M/S AUTOMOBILE COMPONENT (INDIA) PVT. LTD., ENQUIRY WAS DONE BY ISSUING NOTICE U/S. 133(6) OF THE I.T. ACT, BUT IT IS FOUND THAT IT HAS NOT REACHED THE HANDS OF SAID M/S AUTOMOBILE COMPON ENT (INDIA) PVT. LTD. IN THIS REGARD OF ORDER SHEET ENTRIES OF ASSESSMENT RECORDS HAS BEEN PERUSED AND IT IS FOUND THAT VIDE ORDER SHEET ENTRY DATED 13/1/2014 ALL THE DETAILS WITH REGARD T O SHARE APPLICANTS HAS BEEN CALLED FOR WHICH HAS BEEN PROVI DED. THE DETAILS HAVE BEEN PRODUCED BEFORE THE UNDERSIGNED I N THE FORM OF PAPER BOOK PERTAINING TO THE FOUR SHARE APPLICANTS AS UNDER :- I NEW INTERNATIONAL STAINLESS PIPE COMPANY LTD( RS. 50,00,000/-) APPLICATION FORM CONFIRMATION ITR FOR 2011-12 BALANCE SHEET BANK STATEMENT NAINITAL BANK LTD. NOTICE U/S 133(6) DATED 20.2.2014 ISSUED BY LEARNED ASSESSING OFFICER TO NAINITAL BANK LTD. I.T.AS. NO.5958 & 5411/DEL/2019 15 LETTER DATED 24.2.2014 FROM NAINITAL BANK LTD. PHOTOCOPY OF CHEQUE OF RS. 20,50,000/- ISSUED BY SHR I KRISHNA FABRIC PHOTOCOPY OF CHEQUE OF RS. 15,50,000/ - ISSUED BY AMAN ENTERPRISE PHOTOCOPY OF CHEQUE OF RS. 14,00,000/- ISSUED BY FAB CARE II AUTOMOBILE COMPONENTS (INDIA) LTD. (RS.1,00,00,000/-) APPLICATION FORM CONFIRMATION ITR FOR 2011-12 BALANCE SHEET BANK STATEMENT NAINITAL BANK LTD. NOTICE U/S 133(6) DATED 20.2.2014 ISSUED BY LEARNED ASSESSING OFFICER TO NAINITAL BANK LTD. LETTER DATED 24.2.2014 FROM NAINITAL BANK LTD. PHOTOCOPY OF CHEQUE OF RS.5,00,000/- ISSUED BY DREAM LIFE CARE MARKETING PVT. LTD. PHOTOCOPY OF CHEQUE OF RS.25,00,000/- ISSUED BY ZDSEZIPL PHOTOCOPY OF CHEQUE OF RS.6,00,000/- ISSUED BY FAB CARE PHOTOCOPY OF CHEQUE OF RS.6,00,000/- ISSUED BY ALIC TECHNOLOGIST RITGS ADVICE FOR RS.4,70,00,000/- FROM BHAGWATI TRADING COMPANY III ZOOM DEVELOPERS SEZ (INDORE) PVT. LTD. (RS.1,00,00,000/-) CONFIRMATION ITR FOR 2011-12 BALANCE SHEET BANK STATEMENT NAINITAL BANK LTD. BANK STATEMENT AXIS BANK LTD. PHOTOCOPY OF CHEQUE OF RS.7,5,0,000/- ISSUED BY LITMAN. PHOTOCOPY OF CHEQUE OF RS.22,50,000/- ISSUED BY GENIUS TRADERS P. LTD. PHOTOCOPY OF CHEQUE OF RS.28,00,000/- ISSUED BY ARROW CHARTER P. LTD. RITGS ADVICE FOR RS.4,70,00,000/- FROM AJAY AGGARWA L (HUF) IV RANGOLI BUILDTECH PVT. LTD. (RS.1,00,00,000/-) I.T.AS. NO.5958 & 5411/DEL/2019 16 APPLICATION FORM CONFIRMATION ITR FOR 2011-12 ANNUAL AUDITED ACCOUNTS NOTICE U/S.133(6) DATED 21.11.2013 ISSUED BY LEARNED AO LETTER DATED 3.12.2013 FROM RANGOLI BUILDTECH PVT. LTD. LEDGER A/C OF ASSESSEE BANK STATEMENT ASSESSMENT ORDER DATED 28.03.2011 PASSED U/S.153C/143(3) FOR A.Y. 2011-12 FROM THE ABOVE SUBMISSION OF THE APPELLANT IT IS AP PARENT THAT APPELLANT HAS FILED IN ALL THE FOUR SHARE APPLICANT S CASES AS UNDER: (I) CONFIRMATION (II) COPY OF INCOME TAX RETURN (III) BALANCE SHEET (IV) BANK STATEMENT FURTHERMORE, NOTICE ISSUED TO NANITAL BANK LTD U/S 133(6) OF THE I.T. ACT WHICH HAS BEEN REPLIED WITH. IN THE CA SE OF RANGOLI BUILDTECH PVT LTD FOR AMOUNT OF RS. 1 CRORES NOTICE U/S 133(6) OF THE I.T. ACT DATED 21/11/2013 HAS BEEN ISSUED WH ICH HAS BEEN REPLIED BY RANGOLI BUILDTECH PVT LTD. VIDE LET TER DATED 3/12/2013 WHICH IS AVAILABLE AT PAGE NO. 110 & 111 OF THE PAPER BOOK. THE COPY OF THE SAME HAS BEEN FURNISHED BEFORE THE UNDERSIGNED WHICH IS SELF-EXPLANATORY SHOWING T HAT IT HAS BEEN REPLIED ALONG WITH ACKNOWLEDGEMENT OF INCOME T AX RETURN AND BALANCE SHEET WITH COMPLETE SCHEDULE. FU RTHER, ASSESSING OFFICER HAS ARRIVED AT THE ADVERSE CONCLU SION BY I.T.AS. NO.5958 & 5411/DEL/2019 17 OBSERVING THAT REPLY WAS RECEIVED AND THE CAPACITY OF THE PARTY AND GENUINENESS OF THE TRANSACTION HAS BEEN N OT BEEN PROVED. IN THIS REGARD IT HAS BEEN OBSERVED AS UNDER:- ASSESSING OFFICER HAS DIRECTED ENQUIRY U/S 133(6) O F THE I.T. ACT FROM NAINITAL BANK LTD. IN THE THREE CASE OF NE W INTERNATIONAL STAINLESS PIPE COMPANY LTD, AUTOMOBIL E COMPONENTS (INDIA) LTD, ZOOM DEVELOPERS SEZ (INDORE ) PVT LTD. IN RESPONSE TO NOTICE U/S 133(6) OF THE I.T. ACT BA NK HAS REPLIED THE QUERY AND SUBMITTED THE BANK STATEMENT THE RELEVANT CREDIT ENTRIES. THESE DETAILS ARE AVAILABL E IN THE PAPER BOOK SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTA TIVE OF THE APPELLANT. IN THIS REGARD, ALL THE BANK DETAILS ARE SHOWING THAT THERE IS SUFFICIENT BALANCE IN THE BANK ACCOUN TS. THE ORDER SHEET HAS ALSO BEEN PERUSED BY ME AND I D O NOT FIND THAT ASSESSING OFFICER HAS DIRECTED THE ASSESSEE TO REDUCE THE PARTIES DURING THE PARTIES DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS NOR ASSESSING OFFICER HAS ISSUED SUMMON U/S 131 OF THE I.T. ACT TO PRODUCE THE ABOVE SAID PARTI ES. WHERE ADDRESS IS NOT CLEAR, ASSESSING OFFICER SHOUL D HAVE ASKED THE ASSESSEE TO PROVIDE THE NEW ADDRESS. FURTHERMORE, IN THE CASE OF RANGOLI BUILDTECH PVT L TD, IT IS FOUND THAT THERE IS SCRUTINY ASSESSMENT ORDER FOR A SSESSMENT YEAR 2011-12, WHEREIN THERE IS NO ADVERSE INFERENCE HAS BEEN POINTED OUT BY THE DCIT CENTRAL CIRCLE 14. THE APPE LLANT HAS PROVIDED COPIES OF SCRUTINY ASSESSMENT ORDER WHICH AVAILABLE AT PAGE NO. 114 - 116 OF THE ORDER. I.T.AS. NO.5958 & 5411/DEL/2019 18 14. HE FURTHER ANALYZED THE EACH AND EVERY TRANSACT ION AND THE BANK DETAILS OF THE PARTIES AND AFTER GIVING DE TAILED FINDING HELD THAT THE ADDITION OF RS.3,50,00,000/- CANNOT B E MADE BECAUSE NOT ONLY THE TRANSACTION WERE GENUINE BUT A LSO THE IDENTITY AND CREDITWORTHINESS OF THE PARTIES HAD AL SO STOOD ESTABLISHED IN THE LIGHT OF THE FACTS AND MATERIAL ON RECORD. 15. BEFORE US, LD. SR. D.R. AFTER REFERRING TO THE VARIOUS OBSERVATIONS MADE BY THE ASSESSING OFFICER SUBMITTE D THAT ONE PECULIAR FACT WHICH HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER IS THAT A SHARE WHICH HAS BEEN SU BSCRIBED BY FOUR PARTIES AT A FACE VALUE OF RS.10/- AND PREM IUM OF RS.90/- PER SHARE HAS BEEN SOLD BACK IN THE SUBSEQU ENT YEAR AT RS.9/- AND IT HAS BEEN BROUGHT BY THE ASSESSEE T HROUGH ITS SISTER CONCERN WHEREIN THE DIRECTORS WERE COMMON. T HIS FACTUM ITSELF GOES TO PROVE THAT IT IS AGAINST THE HUMAN PROBABILITY. HE STRONGLY REFERRED AND RELIED UPON T HE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF PCIT VS. NDR PROMOTERS P. LTD., (2019) 410 ITR 379 (DEL.) AND JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF PCIT VS. NRA IRON & STEEL PVT. LTD. AS REPORTED IN (2019) 103 TAXMANN.COM 48 (SC) . THUS, HE SUBMITTED THAT MERELY BECAUSE THE ASSESS EE HAS FILED ALL THE PRIMARY EVIDENCES WILL NOT SUBSTA NTIATE THE CASE OF THE ASSESSEE BUT IN THE LIGHT OF THE INQUIR Y MADE BY THE ASSESSING OFFICER ALL THESE EVIDENCES CANNOT BE HELD TO BE RELIABLE SO AS TO HOLD THAT ONUS OF THE ASSESSEE ST OOD DISCHARGED. I.T.AS. NO.5958 & 5411/DEL/2019 19 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. SECTION 68 WHICH IS A DEEMING PROVISION CAST A PRIMARY ONUS UPON THE ASSE SSEE IN WHOSE BOOKS ANY SUM HAS BEEN FOUND TO BE CREDITED D URING THE RELEVANT FINANCIAL YEAR TO PROVE THE NATURE AND SOURCE OF THE SAID CREDIT. IN ORDER TO PROVE THE SOURCE OF TH E CREDIT ASSESSEE IS REQUIRED TO ESTABLISH IDENTITY AND CRED ITWORTHINESS OF THE CREDITOR AND ALSO THE GENUINENESS OF THE TRA NSACTION. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DINGS AS WELL AS IN THE APPELLATE PROCEEDINGS HAD FURNISHED VARIOUS DOCUMENTS, WHICH HAS BEEN TABULATED IN THE LD. CIT (A) ORDER AND ALSO INCORPORATED ABOVE. THESE EVIDENCES ARE MO STLY SHARE APPLICATION FORM, CONFIRMATIONS, ITRS, BALANC E-SHEET, BANK STATEMENT RECEIVED IN RESPONSE FROM THE BANK I N COMPLIANCE TO THE NOTICE U/S.133(6), PHOTOCOPY OF C HEQUES ETC. IN CASE OF ONE OF THE PARTY, M/S. RANGOLI BUIL DTECH PVT. LTD., ASSESSMENT ORDER PASSED U/S. 143(3) FOR THE A SSESSMENT YEAR 2011-12 WAS ALSO FURNISHED. IN ORDER TO REBUT THE EVIDENCES FILED BY THE ASSESSEE, THE ASSESSING OFFI CER HAD CONDUCTED INQUIRY BY SENDING NOTICE U/S.133(6) TO T HE BANK IN THE CASE OF THREE PARTIES, NAMELY; (I) NEW INTER NATIONAL STAINLESS PIPE COMPANY LTD.; (II) AUTOMOBILE COMPON ENTS (INDIA) LTD.; AND (III) ZOOM DEVELOPERS SEZ (INDORE ) PVT. LTD. IN RESPONSE, THE BANK HAD PROVIDED THE STATEMENT AND T HE RELEVANT CREDIT ENTRIES ALONG WITH LETTER. ON PERUS AL AND SCRUTINY OF THESE BANK DETAILS, THE LD. CIT (A) HAD FOUND THAT THERE WERE SUFFICIENT BALANCES IN THE BANK ACCOUNT OF THE I.T.AS. NO.5958 & 5411/DEL/2019 20 CREDITORS. THUS, FROM THE INQUIRIES MADE BY THE ASS ESSING OFFICER THE BANK TRANSACTION STOOD CORROBORATED AND WHAT HAS BEEN EXPLAINED BY THE ASSESSEE WAS ALSO CONFIRMED A ND ACCEPTED BY THE PARTIES ALSO. A FINDING HAS BEEN GI VEN BY THE LD. CIT (A) THAT THE ASSESSING OFFICER HAD NEITHER DIRECTED THE ASSESSEE TO PRODUCE THE PARTIES NOR HE HAS ISSUED A NY SUMMONS U/S.131 TO THE SAID COMPANIES TO APPEAR BEF ORE HIM WITH REGARD TO EACH AND EVERY SUBSCRIBING COMPA NIES. THE LD. CIT (A) HAS EXAMINED THE RELEVANT CREDIT EN TRIES APPEARING IN THE BANK ACCOUNT AND ALSO THE BALANCE- SHEETS OF THESE COMPANIES AND FOUND THAT THESE COMPANIES HAVE PAID THE MONEY FROM THEIR DISCLOSED SOURCES DULY REFLECT ED IN THE BOOKS OF ACCOUNT. 17. THE FINDING OF FACT GIVEN BY LD. CIT (A) QUA EACH COMPANY IS SUMMARIZED HEREUNDER. IN THE CASE OF NEW INTERNATIONAL STAINLESS PIPE CO. LTD., LD. CIT (A) HAS NOTED THAT AMOUNT OF RS.50 LAC WHICH WAS GIVEN TO THE ASS ESSEE WAS APPEARING IN THE BALANCE-SHEET AND ALSO THERE WERE ENOUGH CREDIT BALANCE AVAILABLE WITH THE SAID COMPANY AT T HE TIME OF ISSUANCE OF CHEQUE. SIMILAR TRANSACTION WAS REFLECT ED IN THE BALANCE SHEET AND THE BANK STATEMENT OF THE AUTOMOB ILE COMPANY INDIA LTD. AND ZOOM DEVELOPERS SEZ (INDORE) PVT. LTD. ALSO. IN THE CASE OF M/S. RANGOLI BUILDTECH PV T. LTD. NOTICE ISSUED U/S. 133(6) WERE DULY COMPLIED WITH A ND IT WAS CONFIRMED THAT AMOUNT HAS BEEN PAID FROM THEIR OWN SOURCES ALONGWITH THE DOCUMENTARY EVIDENCES. ONCE THE ASSES SEE HAD FURNISHED ALL THE PRIMARY DOCUMENTS TO PROVE THE NA TURE AND I.T.AS. NO.5958 & 5411/DEL/2019 21 SOURCE OF THE CREDIT, THEN WITHOUT ANY FURTHER ADVE RSE MATERIAL ON RECORD SUCH A FINDING OF FACT RECORDED BY THE LD. CIT (A) CANNOT BE REVERSED. FURTHER, IT IS NOT A CA SE WHERE DURING THE COURSE OF SEARCH ANY DOCUMENTARY EVIDENC ES HAVE BEEN FOUND THAT ASSESSEE HAD TAKEN SHARE APPLICATIO N MONEY FROM BOGUS COMPANY OR THROUGH ACCOMMODATION ENTRIES OR THESE COMPANIES WERE MANAGED BY ANY ENTRY PROVIDER. HERE, IN THIS CASE, LD. CIT (A) HAS ANALYZED THE DEBIT AN D CREDIT ENTRIES OF THE BANK ACCOUNT OF THE PARTIES AND ALSO GIVEN THE FINDING THAT HOW THE MONEY HAS COME IN THE BANK ACC OUNT OF THESE PARTIES FROM WHICH THEY HAD MADE INVESTMENT I N THE SHARES OF THE ASSESSEE COMPANY. 18. ANOTHER IMPORTANT FACT NOTED BY THE LD. CIT ( A) ARE AS UNDER: DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER CALLED FOR THE DETAILS REGARDING THE TRANSA CTIONS IN THE BANK ACCOUNTS OF NEW INTERNATIONAL STAINLESS PIPE C OMPANY LTD, AUTOMOBILE COMPONENTS (INDIA) PVT. LTD. AND ZOOM DE VELOPERS SEZ (INDORE) PVT. LTD. FROM THEIR BANKERS. COPIES O F THE DOCUMENTS ARE SUPPLIED BY THE BANKERS OF THESE THRE E COMPANIES ARE PLACED ON PAGE NO. 51 TO 56 , 65 TO 74 AND 86 T O 92. THE PARTY WISE DETAILS OF CREDIT APPEARING IN THE BANK ACCOUNTS OF THESE THREE COMPANIES ARE GIVEN IN REGARDING THE TR ANSACTIONS IN THE BANK ACCOUNT OF AUTOMOBILE COMPONENTS (INDIA) L TD FROM AXIS BANK. THE APPELLANT EXPLAINED VIDE PARA 57 OF ITS SUBMISSIONS DATED 10.10.2014 THAT TWO CREDITS OF RS.50,00,000/- EACH IN THE AXIS BANK ACCOUNT OF AUT OMOBILE COMPONENTS (INDIA) LTD WERE THE RECEIPTS FROM INDIA SALES I.T.AS. NO.5958 & 5411/DEL/2019 22 CORPORATION AND SAI TRADERS. THE APPELLANT FURTHER EXPLAINED THAT OUT OF SUCH FUNDS, AUTOMOBILE COMPONENTS (INDI A) LTD INVESTED RS.81,00,000/- (RS.23,00,000/- AND RS.58,0 0,000/-) IN SHARES OF THE APPELLANT. DURING THE APPELLATE PROCEEDINGS, WHEN THE ASSESSIN G OFFICER APPEARED BEFORE ME ALONG WITH THE ASSESSMENT FOLDER . IT IS GATHERED FROM THE ASSESSMENT RECORD THAT NO NOTICES WERE ISSUED TO THE FOUR PARTIES FROM WHOM MONEY WAS RECE IVED BY THE APPELLANT DURING THE YEAR AND TO WHOM SHARES WERE A LLOTTED BY THE APPELLANT. THE ASSESSING OFFICER DID NOT ASK TH E APPELLANT TO PRODUCE ALL THE FOUR PARTIES FROM WHOM MONEY WAS RE CEIVED BY THE APPELLANT DURING THE YEAR AND TO WHOM SHARES WE RE ALLOTTED BY THE APPELLANT AS IT IS EVIDENT FROM THE ORDER SH EET OF THE ASSESSING OFFICER (PHOTOCOPY IS PLACED ON RECORD). FROM THESE FACTS, IT IS AMPLY CLEAR THAT THE ASSESSING OFFICER DID NOT CARRY OUT THE EXERCISE REQUIRED UNDER THE LAW. HONBLE DE LHI HIGH COURT IN THE CASE OF GANGESHWARI METAL PVT. LTD 361 ITR 10, AFTER TAKING INTO CONSIDERATION ITS EARLIER DECISIO N IN THE CASE OF NOVA PROMOTERS AND FINLEASE PVT. LTD. 342 ITR 169, HELD THAT WHERE THE ASSESSING OFFICER WITHOUT CARRYING OUT TH E EXERCISE REQUIRED IN LAW REJECT THE CLAIM, NO ADDITION CAN B E MADE U/S 68 IN THE HANDS OF THE COMPANY ALLOTTING SHARES. I AM OF THE CONSIDERED VIEW THAT ON THE FACTS OF THE APPELLANT S CASE, ADDITION U/S 68 IS NOT AT ALL JUSTIFIABLE. 19. THE AFORESAID FINDING OF THE LD. CIT (A) IN ABS ENCE OF ANY REBUTTAL OR CONTRARY MATERIAL ON RECORD WHICH COULD HAVE BEEN REVEALED THROUGH INQUIRY MADE BY THE ASSESSING OFFI CER TO DISLODGE THE FINDING CANNOT BE TINKERED WITH. I.T.AS. NO.5958 & 5411/DEL/2019 23 20. MUCH STRESS HAS BEEN GIVEN BY THE LD. DR AND ALSO ADVERSE INFERENCE HAS BEEN DRAWN BY THE ASSESSING O FFICER THAT IN THE SUBSEQUENT YEAR THE SISTER CONCERN OF T HE ASSESSEE HAS BOUGHT BACK THE SHARES AT RS.5/- IN ORDER TO HO LD THAT THE TRANSACTION DURING THE YEAR IS BOGUS OR NON-GENUINE . FIRST OF ALL, UNDER THE DEEMING PROVISION WHAT IS REQUIRED T O BE SEEN WHETHER THE CREDIT APPEARING IN THE BOOKS OF ACCOUN T DURING THE FINANCIAL YEAR, THE ASSESSEE HAS BEEN ABLE TO D ISCHARGE THE ONUS REGARDING THE NATURE AND SOURCE OF CREDIT OR N OT. HERE IN THIS CASE, THE NATURE OF CREDIT IS SHARE APPLICATIO N MONEY AND THE SOURCE HAS FOUND TO BE SATISFACTORILY EXPLAINED BY THE ASSESSEE AS HELD BY LD. CIT (A). THUS, THE ONUS CAS T UPON THE ASSESSEE HAS BEEN FULLY DISCHARGED. SECONDLY, IF A SHARE AT A FACE VALUE OF RS.10/- AND PREMIUM OF RS.90/- HAS BE EN BOUGHT BACK AT RS.5/- THEN ASSESSING OFFICER HAS AL L THE POWERS UNDER THE ACT TO EXAMINE THE ISSUE IN THE YE AR IN WHICH TRANSACTION HAS TAKEN PLACE AND THERE HE CAN DRAW ANY INFERENCE AFTER PROPER SCRUTINY AND INQUIRY. SO FAR AS THIS YEAR IS CONCERNED, WE HAVE TO SEE THE GENUINENESS OF THE TRANSACTION OF THE SHARE APPLICATION MONEY RECEIVED DURING THE YEAR. ACCORDINGLY, THE GROUNDS RAISED BY THE RE VENUE STANDS DISMISSED. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVE NUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DECEMBER, 2019. I.T.AS. NO.5958 & 5411/DEL/2019 24 SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: 9 TH DECEMBER, 2019