THE DCIT, 3(1), Indore V. M/S. SWIFT INTERMEDIA CONVERGANCE LTD., Indore

ITA 566/IND/2013

• Counselvise Citation: 56622714 RSA 2013
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 29-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHNEY; R A VERMA DRS
• Assessee Lawyers: SHRI; S N AGRAWAL
• Keywords: Unexplained cash credit; Bogus Share capital; Depreciation; Income from undisclosed sources; Search and seizure; Share purchase agreement; Opportunity of being heard; Principle of natural justice; Opportunity of cross examination; Additional evidence; Question of law; Accommodation entries; Retraction; Revised return; Revenue expenditure
• Section: 69C; 143(3); 133A; 115JB; 133(6); 131; 68; 132

Judgement Text

ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.566/IND/2013 A.Y. 2009-10 DCIT-3(1), INDORE ... APPELLANT VS M/S. SWIFT INTERMEDIA CONVERGENCE LTD., INDORE PAN AAGCS 1866 D ... RESPONDENT ITA NO.564/IND/2013 A.Y. 2009-10 DCIT-3(1), INDORE ... APPELLANT VS M/S. KANIKA DIGITAL PRINTS P. LTD., INDORE PAN ACCK 7896 B ... RESPONDENT ITA NO.543/IND/2013 A.Y. 2009-10 DCIT-5(1), INDORE ... APPELLANT VS ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 2 M/S. AD MENUM PACKAGING LTD., INDORE PAN AABCA 4240 L ... RESPONDENT APPELLANT BY SHRI RAJEEV VARSHNEY & SHRI R.A. VERMA, DRS RESPONDENT BY SHRI S.N. AGRAWAL & SHRI PANKAJ MOGRA, CAS DATE OF HEARING 14.09.2015 DATE OF PRONOUNCEMENT 09 .12.2015 O R D E R PER SHRI D.T. GARASIA, JM ITA NO.566/IND/2013(M/S. SWIFT INTERMEDIA CONVERGE NCE LTD.) 1.1 THIS APPEAL IS BY THE REVENUE CHALLENGING THE O RDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)7-MUMBAI (CONCUR RENT JURISDICTION OVER THE CHARGE OF CIT(A)-I, INDORE), DATED 22.3.20 13. 1.2 GROUND NOS.1 & 2 OF REVENUE RELATE TO THE ADDIT ION OF RS.4,79,00,000/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY WHEREAS GROUND NO.3 RELATES TO ADMISSION OF ADDITIONAL EVIDENCE VIOLATING RULE 46A OF THE I.T. RULES. 1.3 FACTS OF THE CASE AS NOTED BY THE ASSESSING OFF ICER ARE AS UNDER: SHARE CAPITAL AND SHARE PREMIUM: ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 3 DURING THE YEAR COMPANY HAS ISSUED 47,900 EQUITY S HARES OF RS.10 EACH AT A PREMIUM OF RS.990/- AGGREGATING TO RS.1,000 PER SHARES. THE SHARE PREMIUM EARNED FROM SUCH ISSUED OF RS.4,74,21,000/- AND SHARE CAPITAL WAS RS.4,79,000/ - TOTAL SHARE CAPITAL AND SHARE PREMIUM WAS RECEIVED AT RS.4,79,00,000/-. THE ASSESSEE HAS ISSUED THE FRESH SHARES TO FOLLOWING COMPANIES:- LIST OF NEW SHAREHOLDERS IN THE YEAR 2008-2009 SR. NO. NAME ADDRESS NUMBER @ SHARE CAPITAL SHARE PREMIUM 1 MIHIR AGENCIES PVT. LTD. BLOCK-H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SHANTACRUZ (E) MUMBAI- 400055 2000 10 20000 1980000 2 SUMUKH COMMERCIAL (P) LTD. (FORMALY KNOWN AS CAPTOWN MARCANTILE CO. PVT.LTD.) CHAMBER NO.06, BIG THREE BUILDING, 1 ST MERINE STREET, MUMBAI-400002 1000 10 10000 990000 3 BUNIYAD CHEMICAL LTD. BLOCK-H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SHANTACRUZ (E), MUMBAI- 400055 2000 10 20000 1980000 4 LUXER PROPERTIES PVT. LTD. C-104, RAHUL APPT., S.V.ROAD, ANDHERI (W) MUMBAI-400058 1500 10 15000 1485000 5 SURESH RATHOD CONSULTANT PVT. LTD. C-104, RAHUL APPT., S.V.ROAD, ANDHERI (W) MUMBAI-400058 2500 10 25000 2475000 6 ELDERADD PROPERTIES PVT. LTD. C-104, RAHUL APPT., S.V.ROAD, ANDHERI (W), MUMBAI-400058 1000 10 10000 990000 7 ECRO ARTISONS PVT. LTD. 26/28, NIRNAY SAGAR, 9/C, SATGURU BABA, KADAM LANE, M.B. VELKAR STREET, 1500 10 15000 1485000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 4 KALBADEVI, MUMBAI 8 PURSUIT SECURITIES LTD. 3/1, F-FAIRY MANJORI-13, RUSTOM SINDHWA MARG, (GANOBOW STREET) FORT MUMBAI-400001 2200 10 22000 2178000 9 TRIBHUVAN HOUSING LTD. 23, JALARAM SOCIETY, CHAMUNDA CIRCLE, BORIWALI (W), MUMBAI- 400092 1000 10 1000 990000 10 MILLENEIUM CYBERTECH LTD. 38, GANGA VIAHR, 3 RD FLOOR ROKADIA LANE BORIVALI (W), MUMBAI-400092 1000 10 10000 990000 11 WINFOTECH SYSTEMS PVT. LTD. 26/28, NIRNAY SAGAR, 9/C, SATGURU BABA, KADAM LANE, M.B. VELKAR STREET KALABADEVI, MUMBAI- 400002 3000 10 30000 2970000 12 ACUMEN PAPER BINDERS PVT. LTD. 109, VAKIL CHAMBER, GALI NO.1, SHAKARPUR, DELHI- 110092 2000 10 20000 1980000 13 BHAGIRATHI INDUSTRIES LTD. 201, MALHOTRA COMPLEX, IIND FLOOR, CHALA WALI GALI, SHAKARPUR, DELHI- 110092 2000 10 20000 1980000 14 HAPPENING MOTORS PVT. LTD. 5-205, KANISHA COMPLEX, SAINI ENCLAVE, DELHI- 110092 2000 10 20000 1980000 15 STARVISION MEDIA PVT. LTD. C-3, 64, YAMUNA VIAHR, DELHI-110053 2000 10 20000 1980000 16 STARANS LOGISTICS PVT. LTD. 5, 204, KANISHA COMPLEX, SAINI ENCLAVE, DELHI 110092 2000 10 20000 1980000 17 SAYAM SHARES 201, MALHOTRA COMPLEX, 2000 10 20000 1980000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 5 &SECURITIES PVT. LTD. CHAWLA WALI GALI, SHAKARPUR, DELHI 1100092 18 SHREE BALAJI SAINATH BUILDERS PVT. LTD. B-1058, SHASTRI NAGAR, KAROL BAGH, NEW DELHI 110005 1500 10 15000 1485000 19 SURBHI NETWORKING & BROADCASTING PVT. LTD.(FORMALY KNOWN AS R.J. FABTEX PVT. LTD.) A-115, GROUND FLOOR, VAKIL CHAMBER, SHAKARPUR, DELHI 110092 4000 10 40000 3960000 20 UNIWORD BARTER (P) LTD. 206, M.J. SHOPPING CENTRE, 3, VEER SAWARKAR, BLOCK, SHAKARPUR, DELHI 110092 900 10 9000 891000 21 ACIL COTTON INDUSTRIES PVT. LTD. (FORMALY KNOWN AS ADESHWAR COTTON INDUSTRIES LTD.) 87/404, NATRAJ TOWNSHIP PART-2, PARSURAM NAGAR SOCIETY ROAD, SAYAJI GANJ, VADODARA 390005 1000 10 10000 990000 22 ALPHA GRAPHIC INDIA LTD. B7/403, NATRAJ TOWNSHIP PART-2, PARSURAM NAGAR, SOCIETY ROAD, SAYAJI GANJ, VADODARA 390005 500 10 5000 495000 23 MANGAL MURTI INFRAREAL (P) LTD. (FORMALLY KNOWN AS CONVENT HOUSING FINANCE LIMITED) 241, APOLLO TOWER, M. G. ROAD, INDORE 1000 10 10000 990000 24 NAMAN EQUIPMENTS AND CONSTRUCTIONS (INDIA) PVT. LTD. (FORMALLY KNOWN AS 115, DIAMOND TRADE CENTRE, 3-4, DIAMOND COLONY, NEW PALASIA, INDORE (M.P.) 452008 500 10 5000 495000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 6 MEWAR EQUIPMENTS PVT. LTD.) 25 KINESCOPE INDIA PVT. LTD. SHOP NO.220, LABH CHAMBERS, STATION ROAD, AURANGABAD (MH) 1500 10 15000 1485000 26 BOLPLANST LTD. 5/856, KAMLA APPT. SECOND FLOOR, GAHISHERE, MAHIDARPURA, GHASHERI, SURAT 395009 2300 10 23000 2277000 27 GALAXY DEVCOM PVT. LTD. GANESH BHAWAN CHAWADI BAZAR, LASHKAR, GWALIOR (M.P.) 2500 10 25000 2475000 28 ROLL GOLD INDUSTRIES LTD. 15, VIDHYA SAGAR APPT., 18, MAHAVIR NAGAR, INDORE (M.P.) 1500 10 15000 1485000 SURVEY U/S 133A OF I.T. ACT, 1961 CONDUCTED ON THE BUSINESS PREMISES OF ASSESSEE ON 08-10-2009. DURING THE COURSE OF SURVEY STATEMENT O F SHRI RAJESH JAIN, DIRECTOR OF M/S. SWIFT INTERMEDIA CONVERGENCE LTD. AND KANIKA DIGITALS PRI NTS PVT. LTD. RECORDED ON OATH ON 08.10.2009, IN WHICH HE HAS DISCLOSED ENTIRE SHARE CAPITAL AND SHARE PREMIUM RECEIVED DURING THE YEAR AMOUNTING TO RS.4,79,00,000/- AS UNDISCLOS ED INCOME FOR THE A. YR. 2009-10. LATER ON ASSESSEE HAS NOT REVISED THE RETURN AND R ETRACTED THE STATEMENTS GIVEN ON 08- 10-2009 DURING THE SURVEY AND AMOUNT DISCLOSED OF R S.4,79,00,000/- ON ACCOUNT OF INVESTMENT MADE IN THE SHARE CAPITAL FROM UNDISCLOSED INCOME. ASSESSEE HAS NOT FILED ANY COMMUNICATION IN THIS REGARD TO THE DEPARTMENT. WHEN THE CASE WAS TAKEN UP FOR SECURITY IT WAS REVEALED THAT ASSESSEE HAS NOT REVISED THE RETURN AND NOT OFFERED THE INCOME DISCLOSED AT RS.4,79,00,000/- ON ACCOUNT OF SHARE CAPITAL AND SHARE PREMIUM FOR T AXATION. 2.2 THAT IN THE PRESENT CASE, THE ASSESSEE HAD FILE D COMPLETE DETAILS AS TO JUSTIFY THE GENUINENESS OF THE SHARE APPLICATION MONEY. THAT IN RESPECT OF SHARE HOLDERS ASSESSEE HAD FILED SUFFICIENT DOCUMENTS IN FORM OF SHARE APPLICA TION MONEY, BANK STATEMENTS, AFFIDAVIT, MEMORANDUM, ARTICLES OF ASSOCIATION, ROC DETAIL AND PAN DETAIL AS TO JUSTIFY THE IDENTITY, GENUINENESS AND CREDITWORTHINESS. HENCE, THE ENTIRE AMOUNT OF SHARE APPLICATION MONEY IS TREATED AS EXPLAINED. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 7 2.3 THE AMOUNT OF SHARE CAPITAL AS RECEIVED BY THE ASSESSEE IS LEGAL AND PROPER. FOR THIS REASON, REVISED RETURN WAS NOT FILED BY THE ASSESSE E COMPANY. THE SUBMISSION OF THE ASSESSEE IS CONSIDERED. IT I S EVIDENT FROM THE STATEMENT OF SHRI RAJESH JAIN, MANAGING DIRECTOR OF THE COMPANY THAT AMOUNT ON ACCOUNT OF SHARE CAPITAL INVESTED DURING THE YEAR WAS DISCLOSED BY HIM, WHEN HE FAILED TO EXPLAIN THE SOURCE OF INVESTMENT IN SHARE CAPITAL MADE DURING THE YEAR. S TATEMENT WAS RECORDED WITHOUT ANY UNDUE PRESSURE, DURESS, COERCION ETC. AND IT WAS ADMITTED BY THE ASSESSEE AT THE END OF THE STATEMENT. IF ASSESSEE HAS FELT THAT THE DIRECTOR HAS GIVEN ST ATEMENT UNDER PRESSURE OF THE DEPARTMENT, IT COULD BRING THIS FACT IN TO THE NOTICE OF THE DEPAR TMENT IMMEDIATELY AFTER THE SURVEY. NO SUCH LETTER WAS FILED BY THE ASSESSEE TILL THE DATE OF A SSESSMENT AND TRIED TO JUSTIFY ITS STAND VAGUELY WHEN IT WAS SPECIFICALLY ASKED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ASSESSMENT PROCEEDINGS WERE TAKEN UP IN THE CASE OF THE ASSESS EE AFTER TWO YEARS OF THE SURVEY, THEREFORE, RETRACTION WITHOUT ANY NOTICE TO THE DEPARTMENT IS NOT VALID AND AS PER LAW. . 4.1.1.2 IN THIS CONTEXT IT WOULD ALSO BE NECESSARY TO MENTION THAT IT IS A SETTLED LAW THAT THE ONUS HEAVILY LIES UPON THE ASSESSEE TO FURNISH NECESSARY DETAILS/EVIDENCES TO ESTABLIS H FOLLOWINGS INGREDIENTS TO ESTABLISH THAT THE CREDIT APPEARING IN THE BOOKS OF ACCOUNTS IS GENUINE. SINCE ASSESSEE HAS NOT DISCLOSED THE AMOUNT ADMITT ED DURING THE SURVEY ON ACCOUNT OF SHARE CAPITAL INTRODUCED DURING THE YEAR, DETAILED INVESTIGATION WERE MADE TO FIND OUT THE GENUINENESS OF THE SHARE CAPITAL AND SHARE PREMIUM. IN THIS REGARD INFORMATION U/S 133(6) IS CALLED FO R IN THE CASE OF ASSESSEE, WHO HAS SECURED SHARE CAPITAL AND SHARE PREMIUM OF RS.4.79 CRORES FROM AFORESAID COMPANIES. COMMISSION U/S 131 (1)(D) WAS ISSUED TO ADDL. DIT ( INV.) UNIT-I, MUMBAI AND ADDL. DIT (INV.) UNIT-III, NEW DELHI AND ADDL. DIT, VADODARA ON 12-0 9-2011 TO MAKE INDEPENDENT ENQUIRY IN RESPECT OF AFORESAID COMPANIES WHOM ASSESSEE HAS RE CEIVED THE SHARE CAPITAL DURING THE YEAR. LETTER SENT U/S 133(6) IS RETURNED BACK UNSERVED I N THE FOLLOWING CASES: 1. ROL GOLD INDUSTRIES LTD., INDORE 2. WINFOTECH SYSTEM PVT. LTD., MUMBAI 3. LUXER PROPERTIES PVT. LTD., MUMBAI 4. SURESH RATHORE CONSULTANT PVT. LTD., MUMBAI 5. ELEDERADO PROPERTIES PVT. LTD., MUMBAI 6. ECRO ARTISONS PVT. LTD., MUMBAI 7. STAR VISION MEDIA PVT. LTD., DELHI; 8. UNIWARD BARTER PVT. LTD., DELHI 9. MAGAL MURTI INFRAREAL PVT. LTD., INDORE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 8 10. PURSUIT SECURITIES LTD., MUMBAI NO INFORMATION WAS RECEIVED IN RESPECT OF FOLLOWIN G COMPANIES WHOM NOTICES U/S 133(6) WERE SEND:- 1. SUMUKH COMMERCIAL PVT. LTD. 2. KINESCOPE INDIA PVT. LTD., AURANGABAD (MH) 3. VOL PLAST LTD., SURAT 4. GALAXY DEVCON PVT. LTD., GWALIOR 5. TRIBHUVAN HOUSING PVT. LTD., INDORE 6. ACIL COTTON INDUSTRIES PVT. LTD., VADODARA 7. ACUMEN PAPER WINDERS PVT. LTD., NEW DELHI 8. STARTRANS LOGISTICS PVT. LTD., DELHI 9. MILLENNIUM CYBERTECH LTD., MUMBAI 10. SHREE BALAJI SAI NATH BUILDERS PVT. LTD., DELH I 11. ALPHA INDIA LTD., VADODARA 12. SURBHI NETWORKING AND BROAD CASTING PVT. LTD., DELHI INFORMATION U/S 133(6) IS RECEIVED FROM THE FOLLOWI NG PARTIES BEFORE COMING TO THE CONCLUSION OF THE CREDIT WORTH INESS AND GENUINENESS OF THE TRANSACTION WITH THESE PARTIES, IT IS WORTHWHILE TO ANALYZE THE NETWORTH OF AFORESAID COMPANIES FROM WHOM ASSESSEE HAS RECEIVED SHARE CAPITAL AND SHARE PREMI UM DURING THE YEAR. NAME OF THE COMPANY SHARE CAPITAL SHARE PREMIUM LOANS AND ADVANCES NET PROFIT BHAGIRATHI INDUSTRIES LTD. NEW DELHI 4079290 1.26 CRORE 3530000 3625 HAPPINING MOTORS PVT. LTD., DELHI 1660000 6240000 -- 36540 SHYAM SHARE & SECURITIES PVT. LTD., DELHI 100000 -- -- NIL NAMAN EQUIPMENTS AND CONSTRUCTIONS (INDIA) PVT. 4250000 -- 1605665 NIL MIHIR AGENCIES PVT. LTD. MUMBAI AND BUNIYAD CHEMIC AL LTD., MUMBAI IN RESPONSE TO U/S 133(6) AS SUBMITTED THAT THEIR ACCOUNTING DATA HAS BEEN IMPOUNDED BY THE INCOME TAX DEPARTMENT IN THE SEARCH ACTION CARRIED IN THEIR OF FICE PREMISES BY DDIT-UNIT-I(IV) ON 25-11- 2009. HENCE, THEY ARE UNABLE TO PROVIDE ANY INFORMA TION IN THIS MATTER. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 9 FROM THIS IT IS VERY CLEAR THAT THESE ARE THE COMP ANIES WHO ARE INVESTING HUGE AMOUNTS AS SHARE CAPITAL AND SHARE PREMIUM, BUT THEIR BALAN CE SHEET ARE SHOWING THE FACT. THESE COMPANIES ARE TAKING HUGE PREMIUM FOR THEIR SHARE C APITAL BUT, THEIR SOURCES ARE A SUBJECT MATTER OF INVESTIGATION. IN RECENT YEARS INVESTIGAT ION WING AS WELL AS FIELD OFFICERS HAVE COME ACROSS CASES, WHERE COMPANIES REGISTERED MAINLY IN KALKATTA AS ALSO MUMBAI, DELHI AND SURAT ARE PROVIDING ACCOMMODATION ENTRIES TO INDORE BASED , AS ALSO OTHER COMPANIES IN INDIA. THE PURPOSE OF ACCOMMODATION IS MAINLY TO LAUNDER MONIE S BY INTRODUCING IN INTO THE MAIN STREAM ECONOMY. AT TIMES, SUCH COMPANIES ALSO ISSUE BILLS TO ENTITIES SO, THAT THEY CAN CLAIM BOGUS EXPENSES AND REDUCED TAXABLE PROFITS. DURING THE COURSE OF ASSESSMENT PROCEEDING WHEN TH IS FACT BROUGHT IN TO THE NOTICE OF THE ASSESSE, IT HAS PERSUADE THE MATTER WITH THE SO CALLED COMPANIES, WHOSE LETTER RETURNED BACK UNSERVED AND ASKED THEM TO FILE THE INFORMATIO N U/S 133(6). MR. RAJIV BANSAL C.A. ALSO APPEARED ALONGWITH MR. S.N.AGRAWAL, C.A. ON BEHALF OF THE DELHI COMPANIES NAMELY SURBHI NETWORKING AND BROAD CASTING PVT. LTD., STAR VISION MEDIA PVT. LTD. HAPPENING MOTORORS, ACUMEN BINDERS PVT. LTD., STARTRANS LOGISTIC PVT. L TD., UNIWORD BARTER CARD PVT. LTD. AND SHRI BALAJI SAI NATH PVT. LTD. HE HAS FILED THE APPLICAT ION FOR SHARES, ROC DETAILS AND COPY OF BANK ACCOUNT AND MEMORANDUM & ARTICLE OF ASSOCIATION IN RESPECT OF THESE COMPANIES AND ALSO FILED A COPY OF RETURN FOR THE A.Y. 2010-11 OF R.J. FABTE X PVT. LTD. NOW KNOWN AS SURBHI NETWORKING AND BROAD CASTING PVT. LTD. AS CLAIMED BY THE ASSES SEE AND UNIWORD BARTER CARD PVT. LTD. STARTRANS LOGISTICS PVT. LTD., ACUMEN PAPER BINDERS PVT. LTD. AND HAPPENING MOTORS PVT. LTD. BUT NO EVIDENCE HAS BEEN BROUGHT ON RECORD IN SUPPO RT OF CHANGE IN THE NAME OF THE COMPANY R. J. FEBTAX PVT. LTD. COPY OF RETURNS ARE FURNISHE D FOR A.Y. 2010-11 THAT IS NOT RELEVANT FOR THE YEAR UNDER CONSIDERATION. MEANWHILE REPORT FROM ADDITIONAL DIT (INV.), UNIT- I, MUMBAI AND ADDL. DIT (INV.), UNIT-III, DELHI AND ADDL. DIT, VADODARA RECEIVED ON 21-10-201 1, 09-12-2011 AND 20-12-2011 RESPECTIVELY. COPY OF REPORT PROVIDED TO THE ASSESS EE AND ASKED HIM TO EXPLAIN THE POSITION IN RESPECT OF SHARE CAPITAL AND SHARE PREMIUM IN THE L IGHT OF ABOVE REPORT AS RECEIVED FROM INVESTIGATION UNIT, DELHI. THE RELEVANT PORTION OF THE REPORT IS REPRODUCED AS UNDER:- AS DESIRED SUMMON U/S 131(1)(A) OF THE I. T. ACT. 1961 WERE ISSUED TO THE 9 COMPANIES OF DELHI AFTER TAKING NECESSARY APPROVAL OF ADDL. D IRECTOR OF INCOME TAX (INVESTIGATION) UNIT-III, NEW DELHI AND THE INSPECTOR OF THE UNIT WAS DEPUTED TO THE PERSONALLY SERVE THESE SUMMONS TO THE PRINCIPLE OFFICER OF THE AFORESAID COMPANIES AF TER CONFORMING THE ANTECEDENTS W.R.T. THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 10 IDENTITY OF THE COMPANIES. HE WAS ALSO DIRECTED TO SUBMIT A COMPLIANCE REPORT IN RESPECT OF EACH COMPANY AS TO WHETHER THE COMPANY EXITS AT THE GIVE N ADDRESS AND WHO ARE THE DIRECTORS OF THE COMPANY WITH A BRIEF NOTE ON THE ACTIVITY CONDUCTED BY THE COMPANY IN THE IMMEDIATE PRECEDING A. Y. AS REPORT BY THE INSPECTOR SUMMONS U/S 131-A OF I.T. ACT COULD BE SERVED IN ONLY 2 CASES I.E. M/S. SHYAM SHARE AND SECURITIES PVT. LTD. AND M/S. BHAGIRATHI INDUSTRIES LTD. THE SUMMONS IN THE REMAINING 7 CASES COULD NOT BE SERVED AS NEI THER THESE 7 COMPANIES WERE PHYSICALLY FOUND TO BE EXISTED AT THE GIVEN ADDRESS NOR ANY IN FORMATION OF THEIR EXISTENCE IN THE PAST AT THE GIVEN ADDRESS COULD BE CONFIRMED. STATEMENT OF MR. ARUN JAIN, DIRECTOR OF M/S SHYAM SECURITIES LTD. WAS RECORDED BY ITO (INV.) UNIT-III (1), NEW DELHI. THE RELEVANT PORTIO N OF THE REPORT IS REPRODUCED AS UNDER: MR. ARUN JAIN WAS SPECIFICALLY ASKED AS TO HOW THE COMPANY M/S. SWIFT INTERMEDIA CONVERGENCE LTD. OF INDORE CAME IN YOUR CONTACT AND WHY THE SHARES OF UNLISTED COMPANY WERE TAKEN ON PREMIUM. IN REPLY TO THIS HE INFORMED THAT THE COMPANY M/S. SWIFT INTERMEDIA CONVERGENCE LTD. OF INDORE IS KNOWN TO HIM THROUGH A FRIEND MR. ATUL JAIN WHO IS A C.A. IN INDORE AND INVESTMENT OF RS.20,00,000/- WAS MADE IN THE 2000 SHARES OF THE COMPANY OF THE FACE VALUE OF RS.10 EACH. THUS RS.20,000/- ARE SHAR E APPLICATION MONEY AND RS.19,80,000/- AS SHARE PREMIUM WERE PAID IN THE YEAR 2009 FROM THE F UND OF THE COMPANY M/S. SHYAM SHARES AND SECURITIES PVT. LTD. INCORPORATE IN THE YEAR 20 09. NO SATISFACTORY AND CONVINCING REPLY WAS GIVEN AS TO WHY SHARES OF UNLISTED COMPANY WERE TAK EN ON PREMIUM. THE ONLY REASON GIVEN WAS THAT M/S. SWIFT INTERMEDIA CONVERGENCE LTD. OF INDO RE IS A MEDIA COMPANY AND HAVING BRIGHT FUTURE. MOREOVER, HE COULD NOT TELL THE SOURCES OF THE F UND OF THE COMPANY MAKING INVESTMENT OF HUGE SOME IN UNLISTED CO. THAT TO ON PREMIUM. NO REFEREN CE WAS GIVEN AS TO WHETHER HE HAD CONSULTED ANY MERCHANT OR VALUER HE WAS NOT IN A PO SITION TO TELL THE VALUE OF THE SHARE OF THE COMPANY M/S. SWIFT INTERMEDIA CONVERGENCE LTD. OF I NDORE AS ON 31-03-2009 AND 31-03-2011. THE ANOTHER SURPRISING FACT IS THAT A COMPANY IN CORPORATED IN THE YEAR 2009 RECEIPT SHARE APPLICATION MONEY IN THE SAME YEAR DETAILS OF WHICH COULD NOT BE GIVEN BY THE DIRECTOR OF THE COMPANY AND INVEST IN ANOTHER UNLISTED COMPANY IN T HE YEAR 2009 AGAIN THE SHAKE OF SHARE APPLICATION MONEY AND SHARE PREMIUM. COPY OF REPORT AS RECEIVED FROM DELHI INVESTIGATION WING IN RESPECT OF NINE COMPANIES WERE PROVIDED TO THE ASSESSEE FOR ITS COM MENT. THE ASSESSEE VIDE ITS LETTER ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 11 DT. 20-12-2011 FILED DETAILED REPLY, THE RELEVANT P ARAS OF THE SAME IS REPRODUCED AS UNDER:- THAT YOU HAVE PROVIDED REPORT AS RECEIVED FROM THE INCOME TAX OFFICER (INV), UNIT-III (1), NEW DELHI IN RESPECT OF SHARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE FROM THE FOLLOWING NINE COMPANIES. S.NO NAME OF THE COMPANY ADDRESS PAN NO AMOUNT 1 ACUMEN PAPER BINDER PVT.LTD. 109,VAKIL CHAMBER, GALI NO.1, SHAKARPUR, DELHI AAACA2172J 2000000 2 BHAGIRATHI INDUSTRIES LTD. 201,MALHOTRA COMPLEX 2ND FLOOR, CHAWLA GALI, SHAKARPUR,DELHI AAACB2254N 2000000 3 HAPPENING MOTORS PVT.LTD. S-205,KANISHKA COMPLEX, SAINI ENCLAVE DELHI AAACH4607F 2000000 4 STARVISION MEDIA PVT.LTD. D-25, IST FLOOR ,LAXMI NAGAR, DELHI AAKCS8003N 2000000 5 STARTRANS LOGISTICS PVT. LTD. S-205,KANISHKA COMPLEX, SAINI ENCLAVE DELHI AAJCS0491H 2000000 6 SAYAM SHARES & SECURITIES PVT.LTD. 201,MALHOTRA COMPLEX 2ND FLOOR, CHAWLA GALI, SHAKARPUR, DELHI AALCS9567N 2000000 7 SHREE BALAJI SAINATH BUILDERS PVT.LTD. B-1058, SHASTRI NAGAR, KAROL BAGH, NEW DELHI AAJCS7086E 1500000 8 SURBHI NETWORKING & BROADCASTING PVT.LTD.(FORMALLY KNOWN AS R.J. FABTEX PVT.LTD.) A-115, GROUND FLOOR, VAKIL CHAMBER, SHAKARPUR, DELHI AADCR3947D 4000000 9 UNIWORD BARTERCARD PVT.LTD. D-25, IST FLOOR ,LAXMI NAGAR, DELHI AAACU9640D 900000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 12 18400000 THAT ON PERUSAL OF THE SAID REPORT, IT IS NOTICED THAT IN THE CASE OF BHAGIRATHI INDUSTRIES LIMITED AND M/S SAYAM SHARES & SECURITIES P LIMITED , SUMMONS WERE SERVED AND STATEMENT OF THE DIRECTORS OF THESE COMPANIES WERE ALSO RECORDED . THAT DIRECTOR OF THESE COMPANIES HAVE CATEGORICALLY ACCEPTED ABOUT THE INVESTMENT MADE IN THE SHARE APPLICATION MONEY OF THE ASSESSEE COMPANY. THAT IN THE STATEMENT THEY HAVE C ATEGORICALLY EXPLAINED THE SOURCE OF AMOUNT INVESTED IN THE SHARE APPLICATION/ SHARE CAP ITAL OF THE ASSESSEE COMPANY. THAT IN THE REPORT ALSO THE AUTHORIZED OFFICER ALSO ACCEPTED TH E RECEIPT OF DIVIDEND BY THESE COMPANIES FROM THE ASSESSEE COMPANY. HENCE, THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY OR SHARE CAPITAL AS RECEIVED FROM THESE TWO COMPANIES STAND PROVED. THAT IN THE CASE OF THE SHARE APPLICATION MONEY/ S HARE CAPITAL, IF THE ASSESSEE HAS PROVED THE IDENTITY OF THE SHARE HOLDERS AND THEY H AVE ACCEPTED THE INVESTMENT MADE IN THE SHARE APPLICATION/ SHARE CAPITAL OF THE ASSESSEE CO MPANY. IN THAT CASE, NO ADDITION IS TO BE MADE IN THE CASE OF THE ASSESSEE COMPANY BUT IF THE ASSESSING OFFICER IS NOT SATISFIED WITH THE SOURCE OF INVESTMENT MADE IN THE SHARE APPLICATION MONEY BY THOSE SHARE HOLDERS. IN THAT CASE, NECESSARY ADDITION IS TO BE MADE IN THE CASE OF THE SE SHARE HOLDERS BUT NOT IN THE CASE OF THE ASSESSEE COMPANY. THAT IN VIEW OF THE ABOVE, THE AMOUNT OF SHARE APP LICATION MONEY AS RECEIVED FROM BHAGIRATHI INDUSTRIES LIMITED AND SAYAM SHARES & SE CURITIES P LIMITED OF RS 20,00,000/- EACH TOTALING TO RS 40,00,000/- REQUIRES TO BE ACCEPTED AS GENUINE. THAT AS REGARD SHARE APPLICATION MONEY AS RECEIVED FROM ALL OTHER SEVEN COMPANIES ARE CONCERNED. THE AUTHORIZED OFFICER ON THE BASIS OF R EPORT OF HIS INSPECTOR REACHED TO A CONCLUSION THAT THESE COMPANIES DOES NOT FOUND EXIST ON THE GI VEN ADDRESSES. THAT ON PERUSAL OF THE INSPECTOR REPORT, IT IS NOT ICED THAT THE SAID SUMMON WAS NOT AFFIXED ON THE GIVEN PREMISES. SIGNATURE AND ADDRES S OF TWO INDEPENDENT WITNESSES AS REQUIRED WAS ALSO NOT OBTAINED. THE LETTER AS ISSUED U/S 133 (6) OF THE INCOME TAX ACT WAS DULY SERVED ON THESE SHAREHOLDERS. REPLIES FROM THESE SHAREHOLD ERS HAVE ALSO BEEN RECEIVED DIRECTLY IN YOUR OFFICE. THUS, PROBABLY AT THE TIME OF VISIT OF THE INSPECTOR, MAY BE THE AUTHORIZED PERSON OF THESE COMPANIES MAY NOT FOUND AVAILABLE ON THE GIVE N ADDRESS. THAT AS FAR AS SIGN BOARD IS CONCERNED. IN THIS RESPECT IT IS CLARIFIED THAT MOS T OF THESE COMPANIES BEING THE FINANCE AND INVESTMENT COMPANIES DEAL WITH THE CLOSE AND ASSOCI ATE PERSONS AND NOT WITH THE GENERAL ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 13 PUBLIC AT LARGE. FOR THIS REASON THEY NEED NOT REQU IRES TO DISPLAY THERE SIGN BOARD ON THEIR PREMISES. THAT DURING THE COURSE OF ASSESSMENT PROCEEDING, Y OU HAVE PROVIDED LIST OF TEN COMPANIES TO WHICH LETTER WAS ISSUED U/S 133(6) BUT THE SAME WAS NOT SERVED. IN THE SAID LIST NAME OF TWO COMPANIES FOUND AS LOCATED AT DELHI VIZ , UNIWORD BARTER CARD P LIMITED AND STAR VISION MEDIA P LIMITED. THAT AS STATED IN THE EARLI ER LETTER THAT ADDRESSES OF THESE COMPANIES HAVE BEEN CHANGED AND NEW ADDRESS WAS ALSO PROVIDED VIDE OUR EARLIER LETTER DT 28-11-2011. THAT THE ASSESSEE HAS ALSO REQUESTED TO ALL THE TEN COMPANIES TO WHICH LETTER WAS ISSUED AND NOT SERVED TO FILE REPLY DIRECTLY TO YOUR OFFICE. THE ASSESSEE HAD FILED COMPLETE DETAILS AS TO JUST IFY THE GENUINENESS OF THE SHARE APPLICATION/ SHARE CAPITAL. THE ASSESSEE HAD FILED FOLLOWING DOCUMENTS WHICH INCLUDE:- (I) SHARE APPLICATION FORM (II) COPY OF BOARD RESOLUTION (III) MASTER DETAILS OF ROC (IV) PAN DETAIL (V) COPY OF AFFIDAVIT (VI) COPY OF BANK STATEMENT OF THE SHARE HOLDERS (VII) COPY OF MEMORANDUM AND ARTICLE OF ASSOCIATIO N THE ASSESSEE COMPANY HAD DECLARED INTERIM AND FINA L DIVIDEND TO ITS ALL THE SHARE HOLDERS WHICH WAS DULY CREDITED IN THEIR BANK ACCOU NT. HENCE, THE ONUS LYING ON THE ASSESSEE HAS PROPERLY BEEN DISCHARGED. IN THE CASE OF M/S BHAGIRATHI INDUSTRIES LTD AND M /S SAYAM SHARES & SECURITIES PVT. LTD., DIRECTORS OF BOTH THESE COMPANIES WERE APPEAL RED BEFORE THE AUTHORISED OFFICERS AND ACCEPTED THE INVESTEMENT OF RS. 20,00,000/- EACH MA DE BY THEM IN THE SHARE APPLICATION MONEY OF THE ASSESSEE COMPANY. THUS, SHARE APPLICATION MO NEY OF RS. 40,00,000/- RECEIVED FROM THESE COMPANIES TREATED AS EXPLAINED. THE SUBMISSION OF THE ASSESSEE IS CONSIDERED. IT IS EVIDENT FROM THE REPORT OF INVESTIGATION UNIT, DELHI THAT MOST OF THE COMPANIE S ARE NOT EXISTING AT THE GIVEN ADDRESS AND MR. ARUN JAIN WHO HAS MADE THE INVESTMENT IN THE CA PACITY OF THE DIRECTOR OF M/S SHYAM SHARES SECURITIES FAILED TO EXPLAIN THE SOURCE OF THE FUND S FROM WHERE HE HAS MADE THE INVESTMENT OF RS. 20,00,000/- IN THE COMPANY M/S SWIFT INTERMEDIA CONVERGENCE LTD. OF INDORE. HE COULD NOT GIVE THE SATISFACTORY REPLY WHY HE HAS INVESTED IN INDORE COMPANY ON SUCH A HIGH PREMIUM. SIMILARLY, NETWORTH OF THE BHAGIRATHI INDUSTRIES LT D. IS EVIDENT FROM THE ABOVE CHART. THIS ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 14 COMPANY HAS SHOWN NET PROFIT RS. 3,625/- AND HAVING SHARE CAPITAL OF RS. 40,79,290/-. ON THE BASIS OF THE BALANCE SHEET AND PROFITABILITY CREDIT WORTHINESS OF THE COMPANY IS NOT PROVED AND MOREOVER, INVESTMENT IS NOT APPEARING IN THE NAME O F M/S SWIFT INTERMEDIA CONVERGENCE LTD. OF INDORE IN THE BALANCE SHEET. REPORT FROM ADDL. DIT, MUMBAI WAS RECEIVED ON 21.1 0.2011, COPY OF THE REPORT IS PROVIDED TO THE ASSESSEE. RELEVANT PORTION OF THE R EPORT IS REPRODUCED AS UNDER:- INVESTIGATION WING, MUMBAI HAS RECORDED THE STATEM ENT OF MR. MUKESH CHOKSI WORKING IN THE CAPACITY OF DIRECTOR M/S MAHASAGAR SECURITIES P VT. LTD. AND OTHER COMPANIES AT BLOCK NO. H, SHRI SADASHIV CHS, 6 TH ROAD, SANTA CRUZ (EAST), MUMBAI DURING THE COURSE O F SEARCH U/S 132 OF THE INCOME TAX ACT, 1961 ON 25.11.2009. IN CASE OF SEVEN COMPANIES, MUMBAI INVESTIGATION W ING SUBMITTED ITS REPORT WHEREIN REFERENCE OF THE SURVEY AND SEARCH ACTION ON THE PR EMISES OF SHRI KAMAL KISHORE RATHI AND SHRI MUKESH CHOKSI WAS GIVEN AND STATED THAT BOTH THESE PERSONS HAVE ACCEPTED TO INVOLVED IN PROVIDING ACCOMMODATION ENTRIES. THE SAID REPORT WA S PROVIDED TO THE ASSESSEE FOR HIS COMMENTS. THE ASSESSEE IN REPLY TO THE SAID REPORT SUBMITTED AS UNDER:- THAT YOU HAVE ASKED COMMENTS OF THE ASSESSEE ON THE LETTER AS RECEIVED FROM THE MUMBAI INVESTIGATION WING IN RESPECT OF SHARE APPLI CATION MONEY RECEIVED FROM THE FOLLOWING COMPANIES:- S.NO NAME OF THE COMPANY AMOUNT (RS) 1 WINFOTECH SYSTEMS P LIMITED 3000000 2 LUXER PROPERTIES P LIMITED 1500000 3 SURESH RATHOD CONSULTANTS P LIMITED 2500000 4 ELDERADD PROPERTIES P LIMITED 1000000 5 ECRO ARTISONS P LIMITED 1500000 6 MIHIR AGENCIES P LIMITED 2000000 7 BUNIYAD CHEMICALS LIMITED 2000000 13500000 THAT THE DDIT IN HER LETTER REFERRED THE STATEMENT OF SHRI KAMAL KISHORE RATHI IN RESPECT OF FIRST FIVE COMPANIES OF THE ABOVE TABLE. HOWEVER , ON PERUSAL OF THE STATEMENT OF SHRI KAMAL KISHORE RATHI, IT IS EVIDENT THAT HE HAS ACCEPTED H IS INVOLVEMENT MAINLY IN THE ARRANGEMENT OF LONG TERM/ SHORT TERM CAPITAL GAIN ON SALE OF SHARE S. THAT ON THE CONTRARY, IDENTITY OF ALL THESE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 15 COMPANIES STAND PROVED FROM THE SURVEY PROCEEDING A ND STATEMENT OF SHRI KAMAL KISHORE RATHI AS RECORDED U/S 131 OF THE INCOME TAX ACT. THAT STATEMENT OF SHRI KAMAL KISHORE RATHI WAS RECO RDED ON 22-10-2010. HOWEVER, IN THE YEAR 2011, THE ASSESSEE COMPANY HAD OBTAINED AF FIDAVIT FROM ALL THE ABOVE SHARE HOLDERS DULY CONFIRMING THE INVESTMENT IN THE SHARE APPLICA TION MONEY OF THE ABOVE COMPANY. THE ASSESSEE HAD FILED COMPLETE DETAILS AS TO JUSTI FY THE GENUINENESS OF THE SHARE APPLICATION MONEY. THE IDENTITY OF THE SHARE HOLDER S ALSO STAND ESTABLISHED FROM THE SURVEY PROCEEDING U/S 133A OF THE INCOME TAX ACT AND SUBSE QUENT STATEMENT OF THE DIRECTOR. THAT IN THE CASE OF THE PRESENT ASSESSEE, ALL THESE SHARE H OLDERS STILL HOLDS SHARES OF THE ASSESSEE COMPANY. THE ASSESSEE COMPANY HAD ALSO DECLARED DIV IDEND AND PAID LEGITIMATE TAX DUE ON IT. THE AMOUNT OF DIVIDEND SO DECLARED ALSO CREDITED IN THE BANK ACCOUNT OF ALL THE ABOVE SHARE HOLDERS. HENCE,THERE IS NO JUSTIFICATION FOR MAKING ANY ADDITION IN RESPECT OF SHARE APPLICATION MONEY AS RECEIVED FROM FIRST FIVE COMPANIES. THAT THE DDIT IN HER REPORT REFERRED THE SEARCH & S EIZURE ACTION U/S 132 OF THE INCOME TAX ACT IN RESPECT OF LAST TWO COMPANIES. THAT STAT EMENT OF SHRI MUKESH CHOKSI WAS RECORDED ON 25-11-2009 WHEREIN HE HAS MAINLY ACCEPTED HIS IN VOLVEMENT IN THE ARRANGEMENT OF LONG TERM/ SHORT TERM CAPITAL GAIN ON SALE OF SHARES. THAT STATEMENT OF JAYESH KRISHNARAJ SAMPAT WAS ALSO RECORDED ON 14-05-2010 WHEREIN HE HAS EXPLAINED THAT HE HAS MANAGED CERTAIN AFFAIR S.THAT IN REPLY TO THE QUESTION NO 11, HE HAS EXPLAINED THE MODE OF INVESTMENT IN THE SHARE A PPLICATION MONEY FOR SHORT PERIOD OF 6 MONTHS AND AGAIN BUY BACK AT MUCH LOWER RATE. THAT IN THE PRESENT CASE IN HAND, THE SHARE CAPITAL AS ISSUED STILL HOLD BY THESE SHARE HOLDERS. THE ASSESSEE HAD ALSO DECLARED DIVIDEND WH ICH WAS ALSO CREDITED IN THE BANK ACCOUNT OF THESE SHARE HOLDERS. HENCE, THE MODUS OPERANDI A S EXPLAINED BY SHRI SAMPAT NOT APPLICABLE IN THE CASE OF THE ASSESSEE COMPANY. THAT IN THE CASE OF INVESTMENT IN THE SHARE APPLICA TION MONEY BY M/S BUNIYAD CHEMICALS LIMITED AND M/S MIHIR AGENCIES P LIMITED, THE ASSES SEE HAD OBTAINED AFFIDAVIT DULY SIGNED BY SHRI JAYESH SAMPAT DULY NOTARIZED IN THE YEAR 2011. THAT SEARCH U/S 132 WAS EXECUTED IN THE YEAR 2009 IN THE CASE OF THESE COMPANIES. HENCE, ID ENTITY OF THESE SHARE HOLDERS STAND PROVED. THAT THESE COMPANIES STILL HOLDS SHARE OF THE ASSES SEE COMPANY AND DIVIDEND AS DECLARED WAS ALSO CREDITED IN THEIR BANK ACCOUNT. HENCE, IN ANY CASE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY CANNOT BE DOUBTED. THAT YOU ARE ALSO REQUESTED TO PROVIDE THE COMPLETE DETAILS AS RECEIVED IN RESPONSE TO LETTER ISSUED U/S 133(6) OF THE INCOME TAX ACT OR A NY OTHER INFORMATION AS COLLECTED BY YOU IN ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 16 RESPECT OF SHARE APPLICATION MONEY AS RECEIVED BY T HE ASSESSEE FROM ITS ALL SHARE HOLDERS. THAT IT WAS INFORMED BY MOST OF THE SHARE HOLDERS THAT T HEY HAVE FILED THEIR REPLY IN RESPONSE TO LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX ACT. THAT IN CASE LETTER AS ISSUED U/S 133(6) OF THE INC OME TAX ACT RECEIVED UN-SERVED, IN THAT CASE, YOU ARE REQUESTED TO PROVIDE COPY OF THE SAID LETTER TO THE ASSESSEE COMPANY. SO, NECESSARY COMPLIANCE OF THE SAID LETTER IS ENSURE F ROM ALL THESE SHARE HOLDERS. THAT IN VIEW OF THE ABOVE, THE AMOUNT OF SHARE APPL ICATION MONEY AS RECEIVED BY THE ASSESSEE BE TREATED AS GENUINE AND ADDITION AS PROP OSED IS NOT ACCEPTABLE TO THE ASSESSEE. THE REPLY OF THE ASSESSEE TAKEN INTO CONSIDERATION , IN THE SAID REPLY IT WAS ARGUED THAT LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX ACT W AS DULY SERVED ON ALL THE ABOVE ASSESSEE. HENCE, IDENTITY OF THESE SHARE HOLDERS STAND PROVED . IT IS EVIDENT FROM THE STATEMENT OF KAMAL KUMAR RATHI, MUKESH CHOKSI AND JAYESH SAMPAT, AS RE CORDED DURING THE COURSE OF SURVEY/SEARCH, THEY HAVE CATEGORICALLY ACCEPTED THA T THEY HAVE PROVIDED ACCOMMODATION ENTRIES IN FORM OF CAPITAL GAIN, BOGUS BILL AND SHA RE APPLICATION / SHARE CAPITAL. HENCE, THE CONTENTION OF THE ASSESSEE NOT FOUND ACCEPTABLE. TH ESE COMPANIES ARE BEING RUN BY THE C. A'S FOR THE PURPOSE OF BOGUS SHARE CAPITAL INTRODUCTION , BOGUS GAIN AND BOGUS COMMISSION ETC. THE CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSAC TION IS DOUBTFUL. REPORT IS ALSO RECEIVED FROM ADIT, BARODA ON 08.12 .2011. RELEVANT PORTION OF THE REPORT IS REPRODUCED AS UNDER:- 'IN THIS REGARD, IT IS STATED THAT AS PER ITD DATA BASED INFORMATION, IT IS FOUND THAT ALPHA GRAPHIC INDIA LTD. B7/403, NATRAJ TOWNSHIP PART-2, PARSURAM NAGAR SOCIETY, SIYAGANJ, BARODA IS ASSESSED WITH THE ITO, WD 1(1), AHMEDABAD, WHEREAS ACIL COTTON INDUSTRIES PVT. LTD., B7/404, NATRAJ TOWNSHIP PART-2, PARSURAM NAGAR SOCIETY, SIY AGANJ, BARODA IS ASSESSED WITH THE DCIT, SURENDRANAGAR. HOWEVER, ON THE BASIS OF THE TERRITORIAL, WHICH RE STED WITH THIS OFFICE, SUMMON NOTICES DATED 19.10.2011 WERE ISSUED BY THIS OFFICE IN THE CASE OF' ALPHA GRAPHIC INDIA LTD, BARODA AND ACIL COTTON INDUSTRIES PVT. LTD. BARODA, CALLING FO R RELEVANT INFORMATION AND TO APPEAR BEFORE THIS OFFICE ON 25.10.2011. NOBODY ATTENDED IN RESPONSE T O THE ABOVE MENTIONED SUMMONS. SEPARATE INQUIRY WAS CONDUCTED THROUGH INSPECTOR OF THIS OFFICE, WHEREIN IT IS STATED THAT THE OFFICES REMAIN CLOSED. ONE OF' THE OFFICES HAS ALRE ADY BEEN RENTED. THE MOBILE NUMBER OF THE ACCOUNTANT OF THE COMPANY WAS GATHERED AND HE WAS A SKED TO PRODUCED THE DIRECTORS OF THE COMPANY IN THE OFFICE OF THE ADIT (INV), BARODA, AL ONGWITH COPY OF BALANCE SHEET, P&L ACCOUNT, DIRECTORS REPORT AND SHARE TRANSACTION DETAILS. HOW EVER, NO ONE APPEARED AND ONE OF THE STAFF RELATED TO THE ACCOUNTANT SUBMITTED THE COPY OF ANN UAL REPORT OF THESE COMPANIES. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 17 ON PERUSAL OF THE ANNUAL REPORT FOR F. Y. 2008-09 IT IS EVIDENT THAT NO INVESTMENT IN THE NAME OF' SWIFT INTERMEDIA CONVERGENCE LTD. IS VISIB LE IN THE SCHEDULE OF THE BALANCE SHEET OF ADESHWAR COTTON INDUSTRIES LTD. (ACIL). THE COPY OF THE ANNUAL REPORT OF THESE COMPANIES ARE ENCLOSED HEREWITH FOR KIND PERUSAL AND NECESSARY AC TION AT YOUR END.' COPY OF REPORT AS RECEIVED FROM VADODARA INVESTIGA TION WING FOR TWO COMPANIES WERE PROVIDED TO THE ASSESSEE FOR ITS COMMENT. THE ASSES SEE VIDE ITS LETTER DATED 20.12.2011 FILED DETAILED REPLY, THE RELEVANT PARAS OF THE SAME IS R EPRODUCED AS UNDER:- THAT YOU HAVE PROVIDED REPORT AS RECEIVED FROM THE OFFICE OF THE ADIT ( INV)-I, BARODA IN RESPECT OF SHARE APPLICATION MONEY / SHARE CAPITAL AS RECEIVED BY THE ASSESSEE FROM ACIL COTTON INDUSTRIES P LIMITED AND ALPHA GRAPHIC INDIA LIMITED OF RS 10,00,000/- AND RS 5,00,000/- TOTALING TO RS 15,00,000/- RESPECTIVELY. THAT ON PERUSAL OF THE REPORT AS RECEIVED, IT IS CL EAR THAT SUMMONS TO BOTH THESE PARTIES HAVE PROPERLY BEEN SERVED. HENCE, IDENTITY OF BOTH THESE PARTIES STAND PROVED. IT IS UNDOUBTED FACTS THAT PAN NO OF BOTH THESE COMPANIES HAVE ALSO BEEN PROVIDED, THE AMOUNT OF SHARE APPLICATION MONEY WAS RECEIVED THROUGH AN ACCOUNT P AYEE CHEQUE, ALL OTHER RELEVANT DOCUMENTS HAVE ALSO BEEN FILED AS TO JUSTIFY THE GE NUINENESS OF THE SHARE APPLICATION MONEY/ SHARE CAPITAL. THE AMOUNT OF DIVIDEND AS DECLARED B Y THE ASSESSEE HAS ALSO BEEN CREDITED IN THEIR BANK ACCOUNT. THE AUTHORIZED OFFICER IN HIS REPORT MENTIONED THAT IN THE CASE OF ADESHWAR COTTON INDUSTRIES LIMITED ( NOW KNOWN AS ACIL COTTON INDUS TRIES P LIMITED ) , THE AMOUNT OF INVESTMENT MADE IN THE ASSESSEE COMPANY WAS NOT SEP ARATELY REFLECTED UNDER THE SCHEDULE OF INVESTMENT. IN THIS RESPECT IT IS CLARIFIED THAT AL L THE PAPERS AS TO JUSTIFY THE INVESTMENT MADE BY THE SAID COMPANY IN THE SHARE APPLICATION / SHARE C APITAL OF THE ASSESSEE COMPANY HAS DULY FILED. THE AMOUNT OF INVESTMENT IN SHARE OF THE ASS ESSEE COMPANY WAS REFLECTED UNDER THE HEAD OF LOANS & ADVANCES AS EXPLAINED TO US. COPY O F RELEVANT CERTIFICATE AS DEMANDED FROM THE SHARE HOLDER IS TO BE FILED WITHIN TWO TO THREE DAYS. THAT ON PERUSAL OF THE BALANCE SHEET AS ON 31.03.2010, YOU WILL FIND THAT THE AMOUNT OF INV ESTMENT WAS INCREASED SUBSTANTIALLY AS COMPARED TO THAT OF 31.03.2009. HENCE, THE AMOUNT A S RECEIVED BY THE ASSESSEE WAS PROPERLY INCLUDED IN THE FIGURE OF LOANS & ADVANCES. THAT AS REGARD INVESTMENT MADE BY M/S ALPHA GRAPHIC S INDIA LIMITED IS CONCERNED. ON PERUSAL OF THE BALANCE SHEET AS ON 31.03.2009 AS AT TACHED WITH THE REPORT AS RECEIVED FROM THE ADIT (INV), BARODA, THE NAME OF THE ASSESSEE COMPAN Y WAS DULY REFLECTED IN THE LIST OF INVESTMENT. THE SAID COMPANY HAS INVESTED , AN AMO UNT OF RS 500000/- IN THE SHARE APPLICATION MONEY/ SHARE CAPITAL OF THE ASSESSEE CO MPANY. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 18 THAT IN VIEW OF THE, THE AMOUNT OF SHARE APPLICATIO N MONEY AS RECEIVED OF RS 15,00,000/- FROM THESE TWO COMPANIES ASSESSEE VIDE HIS LETTER DATED 20-12-2011 FURTHER SUBMITTED AS UNDER:- THAT IN THE PRESENT CASE, THE ASSESSEE HAD FILED CO MPLETE DETAILS AS TO JUSTIFY THE GENIUNENESS OF THE SHARE APPLICATION MONEY. THAT IN RESPECT OF THE SHSRAHOLDERS ASSESSEE HAD FILED SUFFICIENT DOCUMENTS IN FORM OF SHARE APPLICA TION MONEY, BANK STATEMENT AND AFFIDAVIT, MEMORANDUM, ARTICLE OF ASSOCIATION, ROC DETAILS AND PAN DETAILS AS TO JUSTIFY THE IDENTITY, GENIUNENESS AND CREDITWORTHINESS. HENCE THE ENTIRE AMOUNT OF SHARE APPLICATION MONEY IS TREATED AS EXPLAINED. THE AMOUNT OF SHARE CAPITAL AS RECEIVED BY THE ASSE SSEE IS LEGAL AND PROPER. FOR THIS REASON, REVISED RETURN WAS NOT FILED BY THE ASSESSE E COMPANY. THE ASSESSEE HAD RECEIVED SHARE APPLICATION MONEY O F RS. 15,00,000/- FROM M/S NEEMA INVESTMENT P LIMITED, INDORE. IN THIS RESPECT YOU HAVE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY NOT BE TREATED AS NON-GENIUNE. IN THIS RESPE CT, IT IS SUBMITTED THAT THE ASSESSEE HAD RECEIVED SHARE APPLICATION MONEY FROM THE SAID COMP ANY THROUGH AN ACCOUNT PAYEE CHEQUE, NECESSARY DOCUMENTS AS TO JUSTIFY THE GENIUNENESS O F THE SHARE APPLICATION HAS ALSO BEEN FILED. THE SAID COMPANY IS ALSO REGULARLY ASSESSED TO TAX IN INDORE ITSELF. HENCE, THERE IS NO REASON TO TAX THE SHARE APPLICATION MONEY IN THE HANDS OF THE ASSESSEE COMPANY. IF YOU ARE NOT SATIFIED WITH THE SOURCE OF SHARE APPLICATION MONEY AS RECEI VED BY THE ASSESSEE, IN THAT CASE, IN THAT CASE NECESSARY ADDITION IS MADE IN THE HANDS OF THE SHAREHOLDER BUT NOT IN ANY CASE IN THE HAND OF THE ASSESSEE. THAT IN THE PRESENT CASE, THE ASSESSEE HAD FILED SU FFICIENT DOCUMENTS AS TO JUSTIFY THE IDENTITY OF THE SHARE HOLDERS AND GENUINENESS OF TH E TRANSACTIONS. THE AMOUNT AS INVESTED BY THE SHARE APPLICANT ALSO DULY REFLECTED IN THEIR BA LANCE SHEET . THAT, FOR ANY REASON THE ASSESSING OFFICER IS NOT SATISFIED WITH THE SOURCE OF AMOUNT INVESTED BY THESE SHARE-HOLDERS IN THAT CASE, NECESSARY ADDITION IF ANY BE MADE IN THE CASE OF THE SHARE-HOLDERS BUT IN NO CASE ANY ADDITION IS JUSTIFIED IN THE CASE OF THE ASSESSEE C OMPANY. THE ASSESSEE HAS PROVED THE IDENTITY AND GENUINENES S OF THE SHARE HOLDER REGARDING SHARE APPLICATION MONEY RECEIVED BY IT. THE AMOUNTS OF SHARE APPLICATION MONEY/ SHARE CAPITAL WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES. THE AS SESSEE HAD FILED COMPLETE DETAILS AS TO JUSTIFY THE AMOUNT OF SHARE APPLICATION MONEY RECEI VED BY IT. ONCE, THE ASSESSEE HAD FILED DOCUMENTS AS TO JUSTIFY THE IDENTITY OF THE SHARE H OLDER IN THAT CASE IF THE ASSESSING OFFICER HAS ANY DOUBT ABOUT THE SOURCE OF SHARE APPLICATION MON EY IN THAT CASE THE ASSESSING OFFICER IS FREE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 19 TO TAKE ACTION AGAINST THE PERSONS WHO HAVE CONTRIB UTED THE SAME BUT IN NO CASE THE SAME IS TO BE ADDED TO THE INCOME OF THE ASSESSEE. .. IN THE BACKDROP OF ABOVE FACTS, IT IS APPARENT THAT THE AFORESAID CONCERNS HAD PROVIDED ONLY THE ACCOMMODATION ENTRIES TO THE ASSESSEE AND THE TRANSACTIONS OF THE SHARE CAPITAL WERE NOT GENUINE. ASSESSEE HAS ALSO ADMITTED ITS UNDISCLOSED INVESTM ENT IN SHARE CAPITAL DURING THE SURVEY AND RETRACTED THE SAME WITHOUT GI VING ANY PLAUSIBLE REASONS. THE PERSONS WHO HAVE PROVIDED BOGUS CAPITAL INTRODUCTION TO THE ASSESSEE THEMSELVES HAVE ADMITTED BEFORE INVESTIGATION UNIT, THAT THEY USED TO PROVIDE ACCOM MODATION ENTRIES BY OPENING VARIOUS BANK ACCOUNTS & RECEIVING CASH FROM THE PARTIES, GENUINE NESS OF TRANSACTION COULD NOT CLAIMED TO BE PROVED. ONLY FURNISHING INFORMATIONS I.E. COPY OF R ETURN, ROC DETAIL, BANK A/C ETC. COULD NOT MAKE THE TRANSACTION GENUINE. SIMILARLY WHEN COMPAN IES DID NOT FIND AT THE GIVEN ADDRESS AFTER MAKING INDEPENDENT ENQUIRY BY THE DEPARTMENT, THEIR IDENTITY COULD NOT BE TREATED AS ESTABLISHED. HENCE, CONSIDERING THE ENTIRE FACTS I TREAT THE INTRODUCTION OF SHARE CAPITAL OF RS. 4,79,00,000/- AS UNEXPLAINED U/S 68 OF THE I.T. ACT. THUS, CONSIDERING THE ALL THE FACTS DISCUSSED ABOV E, I HOLD SHARE APPLICATION MONEY OF RS. 4,79,00,000/- CLAIMED TO HAVE BEEN RECEIVED IN THE NAME OF CONCER N(S) APPEARING AT SERIAL NO. 1 TO 28 AS UNEXPLAINED AND HENCE THE SAME IS AD DED TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE I.T. ACT. I AM SATISFIED THAT THE ASSESSEE HAD CONCEALED THE CORRECT PARTICULARS OF ITS INCOME AND FURNISHED INACCURATE PARTICULARS OF ITS INCOME WITHIN THE MEANING OF THE PROVISIONS OF SECTION 271(1) (C) OF THE I.T. ACT. T HEREFORE, THE PENALTY PROCEEDINGS U/S 271(1) (C) OF THE I.T. ACT ARE SEPARATELY BEING INI TIATED ON THIS POINT. 1.4 MATTER CARRIED TO LD. CIT(A), WHO DELETED THE A DDITION OBSERVING AS UNDER: 5.8 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE A PPELLANTS A/R SUBMISSION. I HAVE ALSO TAKEN NOTE OF VARIOUS DOCUMENTS FILED BY THE APPELL ANT IN THE COURSE OF APPELLATE PROCEEDINGS. FURTHER TO THAT, I ALSO TOOK NOTE OF ALL THE JUDICI AL PRONOUNCEMENTS EITHER RELIED BY THE A.O. IN HER SUPPORT OR FURNISHED/REFERRED BY THE APPELLANTS A/ R IN HIS SUBMISSION IN SUPPORT OF HIS CONTENTION SO RAISED AS EXTRACTED ABOVE. HAVING TAK EN NOTE OF ALL THE FACTS AND SUBMISSION AVAILABLE ON RECORD, I AM OF THE CONSIDERED VIEW TH AT THE A.O. MADE THE ADDITION OF AFORESAID SUM OF RS.4,79,00,000/- AS UNEXPLAINED CREDIT IN TH E FORM OF SHARE APPLICATION MONEY IN THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 20 HANDS OF THE APPELLANT INVOKING THE PROVISIONS OF S ECTION 68 OF THE IT ACT. BESIDES THIS, SHE ALSO BASED HER DECISION MAINLY ON THIS PROPOSITION THAT THE APPELLANT COMPANYS IN THE STATEMENT RECORDED DURING THE COURSE OF SURVEY MADE THE DISCL OSURE OF ADDITIONAL INCOME OFFERED SO. SHE ALSO STRESSED UPON THE FACT THAT THE APPELLANT DID NOT RETRACT SUCH DISCLOSURE BY ANY FORM OF COMMUNICATION OR LETTER SUBSEQUENTLY. HENCE SHE OPI NED THAT THE APPELLANT WAS BOUND BY THE DECLARATION SO MADE DURING SURVEY PROCEEDINGS. HENC E AFTER TAKING NOTE OF REPORTS RECEIVED BY HER IN RESPECT OF ENQUIRIES SO CONDUCTED BY HER THR OUGH ISSUING COMMISSION U/S 131(1)(D) OF THE ACT FROM INVESTIGATION WING I.E. MUMBAI, DELHI, BAR ODA IN RESPECT OF SUCH SHARE HOLDERS AND ALSO TAKING REFERENCE OF UN-SERVED LETTER IN FEW CASES I SSUING NOTICES U/S 133(6) OF THE ACT BY HER, SHE HELD THAT THE ENTIRE SHARE APPLICATION MONEY IS UNEXPLAINED AND ACCORDINGLY SHE ADDED THE SAME UNDER SECTION 68 OF THE ACT TO THE APPELLANTS INCOME KEEPING RELIANCE ON VARIOUS DECISIONS AS STATED IN PARA OF THIS ORDER. SHE MAIN LY KEPT HER RELIANCE ON A JURISDICTIONAL ITAT DECISION IN THE CASE OF M/S AGRAWAL COAL CORPORATIO N LTD.(SUPRA). 5.9 HOWEVER AFTER TAKING NOTE OF ALL THE FACTS AND SUBM ISSION AVAILABLE ON RECORD AND ALSO AFTER TAKING NOTE OF APPELLANTS CASE IN THE ENTIRE TY, I FIND THAT THE A.O. WAS NOT CORRECT AND JUSTIFIED IN HER DECISION AS SHE DID NOT TOOK NOTE OF THE FACTS AND THE SUBMISSION MADE BY THE APPELLANT CORRECTLY. I FIND THAT THE APPELLANT COMP ANY HAS MADE A DETAILED SUBMISSION WITH DOCUMENTS AND ALSO SUBMISSION IN THE FORM OF STATUT ORY COMPLIANCE MADE BY EITHER THE APPELLANT OR SUCH SHARE HOLDERS, WHICH CLEARLY SUGG ESTS THAT THESE COMPANIES WHO MADE THE INVESTMENT IN THE APPELLANT COMPANY IN THE FORM OF SHARE APPLICATION MONEY WERE IN EXISTENCE. SUCH DOCUMENTS AND DETAILS, WHICH WERE FILED BY THE APPELLANT COMPANY BEFORE THE A.O. AND ALSO WERE SUBSEQUENTLY FILED IN THE APPELLANT PROCE EDINGS ESTABLISHED THE APPELLANT CONTENTION OF PROVING THE IDENTITY OF SUCH SHARE APPLICANT I.E . SHARE APPLICATION FORM, COPY OF BOARD RESOLUTION AS PASSED BY THE SHARE HOLDER COMPANY, N AME AND ADDRESS CHANGE CERTIFICATE FROM ROC IF ANY (IN CASE OF SHARE APPLICANT), MASTER DET AILS OF ROC, PAN DETAIL, COPY OF BANK STATEMENT OF THE SHAREHOLDER, COPY OF MEMORANDUM AN D ARTICLE OF ASSOCIATION, BALANCE SHEET & COPY OF AFFIDAVIT AS SIGNED BY THE DIRECTOR OF TH E SHARE HOLDER COMPANY. FURTHER TO THAT, I AM ALSO NOT IN AGREEMENT WITH A.O.S THIS PROPOSITION THAT THE APPELLANT WAS BOUND BY ITS DECLARATION AS IT WAS MADE IN THE SURVEY PROCEEDINGS. MY THIS V IEW GETS SUPPORT FROM A RECENT DECISION OF HONBLE CHATTISGARH HIGH COURT IN THE CASE OF ITO V S. VIJAY KUMAR REPORTED IN 327 ITR 497 & HONBLE MADRAS HIGH COURT DECISION IN THE CASE OF M . NAYAYANAN & BROS VS. ACIT REPORTED IN 339 ITR 192. EVEN I ALSO FIND THAT THE A.O. RELIANC E TO THE REPORTS OF INVESTIGATION WING ALSO LACK OF CORRECTNESS IN HER DECISION, AS IT IS EVIDENT FR OM THE APPELLANTS SUBMISSION THAT THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 21 INVESTIGATION IN MUMBAI DID NOT MAKE ANY SUBSEQUEN T ENQUIRY SUBSEQUENT TO REFERENCE MADE TO THE A.O. THROUGH COMMISSION DATED 12/09/2011. TH E DDIT(INV.)-1(2), MUMBAI SUBMITTED HIS REPORT MERELY BASED ON A STATEMENT WHICH WERE RECOR DED BY THE WING PRIOR TO THE REFERENCE MADE BY THE A.O. THUS, IT IS EVIDENT THAT NO SPECIF IC ENQUIRY WAS CONDUCTED CONSEQUENT TO REFERENCE SO MADE BY THE A.O. REFERRED AS ABOVE. EV EN I FIND THAT THE APPELLANT COMPANY FILE AFFIDAVIT DATED 16/08/2011 & 24/08/2011 FROM THE DI RECTOR OF SEVEN COMPANIES WHO MADE INVESTMENT FROM MUMBAI IN THE APPELLANT COMPANY, WH EREIN THE DIRECTOR OF THE COMPANIES HAVE ACCEPTED FOR MAKING SUCH INVESTMENT IN THE APPELLAN T COMPANY IN THE FORM OF SHARE APPLICATION MONEY. ON THIS ACCOUNT ITSELF, THE A.O.S ACTION WA S INCORRECT TO THE EXTENT SHE RELIED ON THE REPORTS IN TOTALITY WITHOUT ASCERTAINING THE CORREC TNESS OF ASCERTAINING THE FACT THAT WHETHER THE WING COMPLIED TO HER REQUEST AS AUTHORIZED BY HER U /S 131 (1)(D) OF THE ACT. EVEN I FIND THAT ON SIMILAR SET OF FACTS IN THE CASE OF SHARE APPLICATI ON MONEY ITSELF MADE BY ONE OF THE APPLICANT WHICH IS COMMON IN THE CASE OF THE APPELLANT ALSO I .E. M/S BUNIYAD CHEMICALS LTD. HAS BEEN HELD AS GENUINE BY THE HONBLE JAIPUR ITAT BENCH IN THE CASE OF BHARTI SYNTEX LTD. REPORTED IN 52 DTR 73. EVEN I FIND THAT IN THE CASE OF SHARE AP PLICANT, WHO HAPPENED TO BE FROM DELHI, THE ENQUIRY CONDUCTED BY INVESTIGATION WING, DELHI FIND STATEMENT RECORDED OF THE TWO DIRECTORS BY THE WING IN THE CASE OF NAMELY M/S BHAGIRATHI INDUS TRIES LTD. AND M/S SAYAM SHARES & SECURITIES PVT. LTD. IN SUCH STATEMENT THE DIRECTOR S OF THESE COMPANIES HAVE ASSERTED POSITIVELY IN MAKING THE INVESTMENT IN THE APPELLANT COMPANY. EVEN I FIND THAT ONCE THE A.O. CONFRONTED THE APPELLANTS A/R WITH THE REPORT OF THE INVESTIG ATION WING, DELHI DATED 09/12/2011, THE APPELLANTS A/R SUBMITTED THAT CONSEQUENT TO THAT A N AUTHORIZED REPRESENTATIVE OF ALL SUCH SHARE APPLICANT FROM DELHI AND VALID POWER OF ATTORNEY HO LDER CA SHRI RAJIV BANSAL OF APPELLANT PERSONALLY ATTENDED THE OFFICE OF THE A.O. AND FILE D COMPLETE SET OF PAPER TO JUSTIFY THE IDENTITY OF SHARE HOLDERS AND ALSO GENUINENESS OF THE TRANSACTI ON. EVEN THE APPELLANTS A/R ALSO SUBMITTED THAT THE A.O. RECEIVED REPLY FROM SUCH COMPANIES IN RESPECT TO NOTICE ISSUED U/S 133(6) OF THE ACT, WHICH SHE DID NOT TOOK NOTE OF THE SAME OF SUC H COMPLIANCES, WHICH CLEARLY ESTABLISHES THE IDENTITY OF SUCH PARTIES. EVEN I FIND THAT THE REPO RT FROM INVESTIGATION WING, BARODA WAS ALSO NOT SPEAKING THE HALF TRUTH AS THE A.O. CONCLUDED SUCH SHARE APPLICATION UNEXPLAINED MERELY ON THIS PRESUMPTION THAT THE NAME OF THE APPELLANT COMPANY WAS NOT APPEARING IN THE BALANCE SHEET OF SUCH SHARE APPLICANT WHEREAS THE APPELLANTS CLAIM THAT THE APPELLANTS NAME WAS APPEARING IN THE SCHEDULE OF BALANCE SHEET AND ALSO IN ANOTHER C OMPANY THE CONSOLIDATED AMOUNT WERE SHOWN IN THE BALANCE SHEET AND IF THE COMPANY NOT SHOWN THE NAME OF THE APPELLANT IN THE BALANCE SHEET IT WILL NOT AMOUNT TO UNEXPLAINED WHE N THE EXISTENCE OF THE SAID COMPANY IS PROVEN IS ASSESSED TO TAX ON SPECIFIC PAN AND ALSO MAKING INVESTMENT IN THE FORM OF SHARE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 22 APPLICATION WITH THE COMPANY THROUGH ACCOUNT PAYEE CHEQUE. EVEN IT IS EVIDENT WITH THE APPELLANTS SUBMISSION BOTH COMPANY I.E. ACIL COTTO N INDUSTRIES PVT. LTD. (FORMERLY KNOWN AS ADESHWAR COTTON INDUSTRIES LTD.) AND ALPHA GRAPHIC INDIA LTD. ARE ASSESSED TO INCOME TAX WITH SPECIFIC PAN WITH TWO DIFFERENT A.O. WHICH HAS BEEN ASSERTED BY THE INVESTIGATION WING IN ITS REPORT. EVEN IN THE CASE OF REMAINING OTHER SHARE A PPLICANT THE APPELLANT HAS DULY FILED DETAILED SUBMISSION AS STATED ABOVE IN PARA-5.9 OF THIS ORDE R. FURTHER TO THAT IT IS ALSO EVIDENT THAT ALL SUCH COMPANIES ARE HAVING SPECIFIC PAN AND BANK ACC OUNTS. EVEN THE SHARE APPLICATION MONEY WAS PAID THROUGH ACCOUNT PAYEE CHEQUE TO THE COMPAN Y. THESE ALL FACTS PROVE THAT IDENTITY OF THE SHARE APPLICATION MONEY MADE BY DIFFERENT SHARE APPLICANT IN THE APPELLANT COMPANY IS ESTABLISHED. 5.10 EVEN I FIND THAT THE APPELLANT COMPANY SUBSEQUENT F INANCIAL RESULT AND THE ACTION SO REFLECTED BY THE APPELLANT COMPANY ALSO ESTABLISHED THE TRANSACTION GENUINE AND CORRECT. AS WITH THE APPELLANTS SUBMISSION, IT IS EVIDENT THAT APPELLANT COMPANY ISSUED INTERIM DIVIDEND AND FINAL DIVIDEND SUBSEQUENT TO SURVEY OPERATION, WHIC H WAS DULY DISTRIBUTED BY THE APPELLANT COMPANY AND EVEN THE PROVISION OF SECTION 115O HAS ALSO BEEN COMPLIED WITH BY THE APPELLANT COMPANY. SUCH DIVIDEND WERE DULY DEBITED IN THE ACC OUNTS OF THE APPELLANT AT THE TIME OF DISTRIBUTION OF SUCH DIVIDEND AND CONSEQUENTLY CRED ITED TO THE BANK ACCOUNT OF SUCH SHARE APPLICANT AS IT IS EVIDENT WITH APPELLANTS SUBMISS ION EXTRACTED AS ABOVE. EVEN THE APPELLANT COMPANY SUBSEQUENTLY ISSUE BONUS SHARES TO ALL ITS SHARE HOLDERS AND FILED SUBSEQUENTLY STATUTORY PRESCRIBED FORM TO THIS EFFECT TO THE REG ISTRAR OF THE COMPANIES. THESE ALL ACT OF THE APPELLANT LEADS TO HOLD ME THAT THE TRANSACTION OF SHARE APPLICATION MONEY IN THE CASE OF THE APPELLANT IS JUSTIFIED AND GENUINE. 5.11 EVEN I FIND THAT THE APPELLANT HAD FILED AFFIDAVITS IN RESPECT OF ALL THE SHARE APPLICANT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND ALSO I N THE APPELLANT PROCEEDINGS, CONTENT OF WHICH WAS NOT CONTROVERTED BY THE A.O. IN THESE NOT ARISED AFFIDAVITS THE SHARE APPLICANTS CATEGORICALLY CONFIRMED THAT THEY HAD MADE INVESTME NT IN SHARES OF THE APPELLANT COMPANY. THUS HENCE, CONTENT OF THESE AFFIDAVIT HAS TO BE AC CEPTED AS IT WAS AS HELD BY THE HONBLE APEX COURT IN THE CASE OF MEHTA PARIKH & CO AS REPO RTED IN 30 ITR 181 AND ALSO FOLLOWED BY THE HONBLE JURISDICTIONAL ITAT AND HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF STL EXTRUSIONS P LIMITED [333 ITR 269]. EVEN I FIND THAT WHEN THE APPELLANT HAD RECEIVED THE AMOUNT OF SHARE APPLICATION MONEY THROUGH ACCOUNT PAYEE CHEQUES, SP ECIFIC PAN NO. OF THE INVESTING COMPANY HAS ALSO BEEN PROVIDED BY THE APPELLANT WITH OTHER DOCUMENTS AS DISCUSSED IN AFORESAID PARA OF ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 23 THIS ORDER. THE IDENTITY OF THE SHARE HOLDERS, GENU INENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE SHAREHOLDERS STAND PROVED. MY VIEW FURTHER SUPPORTED BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF OASIS H OSPITALITIES (P) LTD [SUPRA], ROCK FORT METAL & MINERAL [SUPRA], WINSTRAL PETROCHEMICALS (P) LTD [SUPRA], GANGOUR INVESTMENT LTD [SUPRA] AND TULIP FINANCE LTD [SUPRA]. EVEN I FIND THAT THE AO WAS NOT CORRECT IN DOUBTING THE IDENTITY OF THE SHARE HOLDERS COMPANY MERELY FOR THE REASON THAT LE TTER AS ISSUED U/S 133(6) OF THE INCOME TAX ACT WAS RETURNED UNSERVED AND INSPECTOR IN HIS REPO RT IN THE COMMISSION PROCEEDING NOT FOUND PROPER ADDRESSES OF THE SHARE HOLDERS COMPANIES. TH E APPELLANT HAS PROVIDED THE SPECIFIC PA NO OF THE SHARE APPLICANT AND THE AMOUNT OF THE SHA RE APPLICATION MONEY WERE RECEIVED THROUGH AN ACCOUNT PAYEE CHEQUE. THE AO WAS NOT OF THE OPIN ION THAT PA NO AS PROVIDED BY THE APPELLANT WAS WRONG. I FIND THAT IF THE AO HAS ANY DOUBT ABOUT THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE SHARE APPLICATION MONEY. I N THAT CASE, HE COULD HAVE REFERRED THE MATTER TO HIS COUNTER PART WHERE THE SHAREHOLDER IS REGULA RLY ASSESSED TO TAX AND OF THEN AO WAS NOT SATISFIED IN THAT CASE, NECESSARY ADDITION IS TO BE MADE IN THE CASE OF THE SHARE HOLDERS BUT NOT IN THE CASE OF THE APPELLANT COMPANY. THIS WAS THE CATEGORICALLY FINDING OF THE HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED [SUPR A] AND MY VIEW ALSO FIND SUPPORT FROM THE DECISIONS OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF GOEL SONS GOLDEN ESTATES P LIMITED [SUPRA], KAMDHENU STEELS & ALLOYS LIMITED [248 CTR 33] [THE SLP AS FILED AGAINST THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KAMD HENU STEEL & ALLOYS LIMITED HAS ALSO BEEN REJECTED BY THE HONBLE APEX COURT VIDE ORDER DATED 17-09-2012] AND HONBLE ITAT DELHI BENCH IN THE CASE OF M/S EXCELLENCE TOWN PLANNER P LIMITE D [SUPRA]. 5.12 EVEN I FIND THAT THE AO WAS NOT CORRECT IN IGNORING THE INFORMATION AS PROVIDED BY THE APPELLANT IN FORM OF COPY OF INCOME TAX RETURN, ROC DETAIL AND BANK ACCOUNT OF THE SHARE APPLICANT COMPANY. THE APPELLANTS ACT OF DISTRIBUT ING DIVIDEND AND ALSO ISSUING BONUS SHARES SUBSEQUENTLY ESTABLISHES THE GENUINENESS AND IDENTI TY OF TRANSACTION. THUS, ALL THESE DOCUMENTS ARE VERY IMPORTANT WHICH WERE FILED WITH THE DIFFERENT GOVERNMENT DEPARTMENTS AND ACCEPTED BY THEM AS TRUE AND CORRECT BY THESE DEPAR TMENTS. HENCE, COGNIZANCE OF ALL THESE DOCUMENTS HAS TO BE TAKEN INTO ACCOUNT BY THE AO WH ILE REACHING A JUDICIOUS CONCLUSION. I FIND THAT THE AO ACTED MERELY ON PRESUMPTION AND IGNORIN G THE REPLY AS RECEIVED IN RESPONSE TO THE LETTER AS ISSUED U/S 133(6) OF THE ACT, STATEMENT O F THE SOME OF THE DIRECTOR OF THE INVESTING COMPANY UNDER 131(1)(D) PROCEEDING AND AFFIDAVIT AS FILED BY THE APPELLANT COMPANY. EVEN I FIND THAT THE FACTS OF CASE OF M/S AGRAWAL COAL COR PORATION LIMITED [SUPRA] AND OTHER DECISION AS RELIED BY THE AO ARE DISTINGUISHABLE ON THE FACT S OF THE PRESENT CASE. AFTER PERUSAL OF FACTS OF ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 24 THE CASE I FIND THAT ON THE CONTRARY THE DECISION O F THE HONBLE JURISDICTIONAL TRIBUNAL IN THE CASE OF M/S AGRAWAL COAL CORPORATION LIMITED [SUPRA] SUP PORT THE CASE OF THE APPELLANT. IN THAT DECISION HONBLE TRIBUNAL HAS HELD TO PROVE THE IDE NTITY OF THE SHARE APPLICANT COMPANY WHICH IN THE PRESENT APPEAL IN HAND HAS BEEN PROVED BY THE A PPELLANT COMPANY WITH THE AMPLE DOCUMENTS, DIVIDEND AND BONUS AS DECLARED IN PERIOD ICAL INTERVALS. THUS, I FIND THE DECISION OF THE HONBLE JURISDICTIONAL ITAT IN THE CASE OF M/S AGRAWAL COAL CORPORATION LIMITED ON THE CONTRARY SUPPORT THE CASE OF THE APPELLANT. THE ORD ER DECISIONS AS RELIED BY THE AO IN HER ORDER ARE ON GENERAL PRINCIPLE AND CLEARLY DISTINGUISHABL E ON THE FACTS OF THE PRESENT CASE. I ALSO FIND THAT THE APPELLANT HAD FILED AMPLE DOCUMENTS AS TO JUSTIFY THE IDENTITY OF THE SHARE HOLDERS, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE SHARE HOLDERS WHICH INCLUDES BANK ACCOUNT, PA NO , SHARE APPLICATION FORM AND AFFIDAV IT OF THE SHARE APPLICANT. THE APPELLANT HAS PROPERLY DISCHARGED ONUS LYING ON IT. MY VIEW FIND SUPPORT FROM THE DECISIONS OF THE HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED [SUPRA], DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF STL EXTRUS IONS P LIMITED [SUPRA] AND HONBLE ITAT, INDORE BENCH IN THE CASE OF M/S RAJSHREE FINSEC P L IMITED [SUPRA]. 5.12 THUS TAKING NOTE OF ALL THE AFORE-STATED FACTS AND SUBMISSION AND APPRECIATION OF THE FACTS OF THE A.O.S ORDER AS WELL AS APPELLANTS A/R SUBM ISSION AND ALSO AFTER TAKING NOTE OF DECISION OF APEX COURT IN THE CASE OF LOVELY EXPORTS PVT. LT D. REPORTED IN 216 CTR 195 AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE GANGESHWARI METAL PVT. LTD. DATED 21/01/2013 AND ALSO AFTER TAKING NOTE OF A DECISION OF APEX COURT IN TH E CASE OF KISHAN CHAND CHELLARAM VS. CIT AS REPORTED IN 125 ITR 713, I CONSIDER IT PROPER AND A PPROPRIATE TO HOLD THAT THE A.O. WAS NOT CORRECT AND JUSTIFIED IN HER ACTION, WHILE HOLDING SHARE APPLICATION MONEY OF RS.4,79,00,000/- AS UNEXPLAINED U/S 68 OF THE IT ACT, 1961. ACCORDINGLY THE ADDITION SO MADE BY THE A.O. IS DELETED. THUS, APPELLANTS THIS GROUND OF APPEAL IS ALLOWED. 1.5 LD. DR SUBMITTED BEFORE US THAT ASSESSEE HAS IS SUED 47900 EQUITY SHARES OF 10 EACH AT PREMIUMS OF RS.990 AGGREGATING TO 1000 PER SHARE. THE ASSESSEE HAS ON THE SHARE PREMIUM FROM SUCH ISS UE RS.4,74,21,000. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 25 THE SURVEY WAS CONDUCTED AND STATEMENT OF ONE SHRI RAJESH JAIN WAS RECORDED AND DURING THE COURSE OF SURVEY, ASSESSEE HAS DECLARED THE ADDL. INCOME OF RS. 4,79,00,000/- IN HIS STATEMENT BUT WH ILE FILING THE RETURN, ASSESSEE HAS NOT OFFERED THIS AMOUNT, THEREFORE, TH E ASSESSING OFFICER TRIED TO VERIFY THE GENUINENESS OF THE SHARE APPLICATION MONEY. THE ASSESSEE HAS RECEIVED 4.79 CRORES FROM 10 COMPANIES WHICH IS MENTIONED ON PAGE 11 OF THE ASSESSMENT ORDER. 133(6) NOTICES WERE ISS UED AND NO INFORMATION WAS RECEIVED IN RESPECT OF 10 COMPANIES AND IN RESP ECT OF SOME OF THE COMPANIES, THE INFORMATION WAS RECEIVED AND SOME OF THE PARTIES MENTIONED ON PAGE 12 OF THE ASSESSMENT ORDER HAVE P ROVIDED THE INFORMATION. THE DEPARTMENT HAS CARRIED OUT THE IN VESTIGATION BY INVESTIGATION WING ACROSS OF THE INDIA WHERE THE CO . IS REGISTERED AT CALCUTTA, MUMBAI, DELHI AND SURAT AND THE ASSESSING OFFICER WAS OF THE VIEW THAT THEY WERE ALL PROVIDING ACCOMMODATION ENT RY. IN SOME OF THE CASES, THE CO. HAS FILED SOME OF THE INFORMATION AN D IN ONE CASE, THE DIRECTOR OF SHYAM SECURITIES WHEREIN THE STATEMENT WAS RECORDED AND FROM HIS STATEMENT, THE ASSESSING OFFICER WAS OF THE VIE W THAT THE ASSESSEE HAS NOT PROVED BY PROVIDING THE INFORMATION LIKE BALANC E-SHEET AND PROFITABILITY OF THE CO. WAS NOT PROVED. SIMILARLY, IN CASE OF SO ME OF THE COMPANIES, THE INFORMATIONTHEY HAVE ACCEPTED THAT THEY HAVE PROVID ED ENTRY, THEREFORE, ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 26 ASSESSING OFFICER WAS OF THE VIEW THAT ASSESSEE HAS PROVED GENUINENESS AND CREDITWORTHINESS OF SHARE PREMIUM RECEIVED BY THE ASSESSEE CO. BUT ASSESSING OFFICER WAS OF THE VIEW THAT PERSON WHO H AS PROVIDED BOGUS CAPITAL INTRODUCED TO THE ASSESSEE HAS ADMITTED THA T THEY USED TO PROVIDE ACCOMMODATION ENTRY BY OPERATIVE VARIOUS ACCOUNTS A ND RECEIVING CASH FROM THE PARTIES AND ASSESSING OFFICER WAS OF THE V IEW THAT COPY OF RETURN ROC AND BANK ACCOUNT CANNOT MAKE TRANSACTION GENUIN E. THE LD. CIT(A) HAS,WITHOUT ANY JUSTIFICATION,IGNORED THE DECISION IN THE CASE OF M/S. AGRAWAL COAL CORPORATION. THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY RELIED UPON THE DECISION OF DELHI HIGH COUR T IN THE CASE OF OASIS HOSPITALITY AND JUDGMENT OF LOVELY EXPORT IS WRONGL Y RELIED ON BY THE LD. CIT(A) AND ORDER OF THE ASSESSING OFFICER MAY BE UP HELD. 1.6 THE AR OF THE ASSESSEE HAS FILED THE WRITTEN SU BMISSION, WHICH READS AS UNDER: THE ASSESSEE IN THE PRESENT CASE ASSESSEE COMPANY HAD FILED ITS RETURN OF TOTAL INCOME FOR THE A.Y. 2009-10 ON 30-09-2009 DECLARING TOTAL INCOME AT RS 9835850/-. INCOME TAX SURVEY WAS EXECUTED AT THE BUSINESS PRE MISES OF THE ASSESSEE ON 08-10- 2009 I.E. AFTER THE FILING OF THE RETURN OF TOTAL I NCOME FOR THE A.Y. 2009-10. THAT DURING THE COURSE OF SURVEY PROCEEDING STATEM ENT OF ONE OF THE DIRECTOR OF THE COMPANY SHRI RAJESH JAIN WAS RECORDED BY THE INCOME TAX DEPARTMENT WHEREIN HE HAS AGREED TO PAY TAX ON THE AMOUNT OF SHARE APPLICATIO N MONEY RECEIVED BY THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATION EVEN WH EN THE SAME WAS GENUINELY RECEIVED BY THE ASSESSEE. THAT IN THAT STATEMENT IT WAS ALSO STATED THAT REVISED RETURN ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 27 SHALL BE FILED BY IT SO AS TO INCORPORATE THE ADDIT IONAL AMOUNT OF INCOME DECLARED DURING THE COURSE OF SURVEY. THAT FROM THE STATEMENT OF SHRI RAJESH JAIN IT IS CLEAR THAT THE ADDITIONAL INCOME AS ACCEPTED BY THE ASSESSEE COMPANY WAS COMPLETE ONLY AFTER FILING OF THE REVISED RETURN OF TOTAL INCOME BUT THE ASSESSEE HAS NOT FILED REVI SED RETURN AS TO ACCEPT THE ADDITIONAL INCOME AS ACCEPTED DURING THE COURSE OF SURVEY HENC E IT WAS IMMEDIATE RETRACTION BY THE ASSESSEE COMPANY. THAT IN THE PRESENT CASE THE ASSESSEE COMPANY HAD FILED ITS RETURN OF TOTAL INCOME FOR THE ASST YEAR 2009-10 ON 30-09-2009 I.E PRIOR TO TH E DATE OF SURVEY. HENCE, THE ASSESSEE HAS TO REVISE ITS RETURN OF TOTAL INCOME F OR ACCEPTING THE ADDITIONAL INCOME AS ADMITTED BY IT DURING THE COURSE OF SURVEY ON ACCOU NT OF SHARE APPLICATION MONEY/ SHARE CAPITAL. HOWEVER, THE ASSESSEE HAS NOT ACCEPTED THE ADDITIONAL INCOME AS DECLARED BY IT DURING THE COURSE OF SURVEY HENCE IT HAS NOT REVISE D ITS RETURN OF INCOME. THE ACCEPTANCE OF AMOUNT DECLARED BY IT WILL NOT BE COM PLETED UNTIL AND UNLESS THE REVISED RETURN WAS FILED BY THE ASSESSEE BUT THE ASSESSEE I N THIS CASE HAS NOT FILED REVISED RETURN HENCE, THE ADDITIONAL INCOME AS DECLARED DUR ING THE COURSE WAS RETRACTED IMMEDIATELY. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROC EEDING VIDE ITS LETTER DT 13-09-2011 HAS CATEGORICALLY EXPLAINED THE REASON FOR NON- FIL ING OF THE REVISED RETURN AND RETRACTION OF ADDITION INCOME ITSELF. THE SAID LETTER IS ON RE CORD WITH THE ASSESSING OFFICER. THAT IN THE PRESENT CASE WHEN THE ASSESSEE COMPANY HAD NOT REVISED ITS RETURN AND THE SAID FACT WAS VERY WELL IN THE NOTICE OF THE ASSESSING O FFICER HENCE, ADDITIONAL INCOME WAS NOT ACCEPTED BY THE ASSESSEE IN THIS CASE. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ON T HE BASIS OF CERTAIN DECISIONS , THOUGH NOT APPLICABLE ON THE FACTS OF THE CASE OF THE ASSE SSEE,HAS ADDED THE ADDITIONAL INCOME MERELY ON THE BASIS OF STATEMENT AS RECORDED DURING THE COURSE OF SURVEY. THE FACTS OF THE DECISIONS AS RELIED BY THE ASSESSING OFFICER WE RE ON DIFFERENT FACTS THE SAME ARE DISCUSSED HEREUNDER:- DR S C GUPTA VS CIT REPORTED IN 248 ITR 782 [ALL] THE ASSESSEE IN THAT DECISION HAS NOT EXPLAINED TH E REASON FOR DENIAL OF THE ADDITIONAL INCOME DECLARED DURING THE COURSE OF SURVEY AND PUT EXTRA BURDEN ON THE AO. HOWEVER, IN THE PRESENT CASE UNDER APPEAL, THE ASSESSEE HAS PROPERLY EXPLAINED THE SOURCE OF SHARE APPLICATION MONEY AS RECEIVED AND CREDITED IN ITS BOOKS OF ACCOUNT. HENCE, THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 28 SAID DECISION IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE.THE ASSESSEE HAS RETRACTED THE SAID DECLARATION IMMEDIATELY BY NOT F ILING THE REVISED RETURN AS COMMITTED DURING THE COURSE OF SURVEY. THAT ALL OTHER DECISIONS AS RELIED BY THE AO WAS W ITH REFERENCE TO THE STATEMENT AS RECORDED DURING THE COURSE OF SEARCH AND NOT WITH R EFERENCE TO THE SURVEY AS EXECUTED U/S 133A OF THE INCOME TAX ACT. THE REFERENCE OF AL L THE DECISIONS AS REFERRED ARE AS UNDER:- 1 MANMOHAN SINGH VIG VS DCIT 006 SOT 018(MUMBAI) STATEMENT U/S 132(4)- NOT APPLICABLE IN THE CASE OF SURVEY AND ALSO DISTINGUISHABLE ON THE FACTS OF THE CASE 2 RAMJAS NAWAL VS CIT 131 TAXMAN 525 (RAJ) STATEMENT U/S 132(4)- NOT APPLICABLE IN THE CASE OF SURVEY AND ALSO DISTINGUISHABLE ON THE FACTS OF THE CASE 3 ACIT VS JAGAT EXPLOSIVES 098 ITD 050(JD BENCH) [TM] FACTS OF THAT CASE WERE TOTALITY DISTINGUISHABLE. HENCE, THE SAID DECISION IS NOT APPLICABLE 4 HOTEL KIRAN VS ACIT 082 ITD 453 ( PUNE) STATEMENT U/S 132(4)- NOT APPLICABLE IN THE CASE OF SURVEY AND ALSO DISTINGUISHABLE ON THE FACTS OF THE CASE 5 V KUNHAMBU AND SONS VS CIT 219 ITR 235 ( KER) STATEMENT U/S 132(4)- NOT APPLICABLE IN THE CASE OF SURVEY AND ALSO DISTINGUISHABLE ON THE FACTS OF THE CASE 6 PRANAV CONSTUCTION CO VS ACIT 061 TTJ 145 ( MUMBAI) STATEMENT U/S 132(4)- NOT APPLICABLE IN THE CASE OF SURVEY AND ALSO DISTINGUISHABLE ON THE FACTS OF THE CASE 7 RAMESH SALVE VS ACIT 075 ITD 075 ( MUMBAI) STATEMENT U/S 132(4)- NOT APPLICABLE IN THE CASE OF SURVEY AND ALSO DISTINGUISHABLE ON THE FACTS OF THE CASE 8 SMT VASANTI SETHI VS ACIT 045 TTJ 503 ( DELHI) STATEMENT U/S 132(4)- NOT APPLICABLE IN THE CASE OF SURVEY AND ALSO DISTINGUISHABLE ON THE FACTS OF THE CASE 9 HIRALAL MAGANLAL AND CO VS DCIT 096 ITD 113 ( MUMBAI) STATEMENT U/S 132(4)- NOT APPLICABLE IN THE CASE OF SURVEY AND ALSO DISTINGUISHABLE ON THE FACTS OF THE CASE 10 DCIT VS BHOGILAL MULCHAND KANDOI 096 ITD 344 ( AHD BENCH) STATEMENT U/S 132(4)- NOT APPLICABLE IN THE CASE OF SURVEY AND ALSO DISTINGUISHABLE ON THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 29 FACTS OF THE CASE THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEE DING COUNTER THE DECISIONS AS REFERRED BY THE ASSESSING OFFICER. THE DECISIONS AS RELIED UPON BY THE ASSESSEE ARE AS UNDER:- [I] ITO VS VIJAY KUMAR KESAR REPORTED IN 327 ITR 49 7. [II] M NARAYANAN & BROS VS ACIT REPORTED IN 339 ITR 192. [III] M/S RANK SHIPPING AGENCY P LIMITED [ APPEAL N O ITA NO 5946/ MUM/ 2008 DT 21-11-2012]. [IV] ACIT VS LAKSHMI FLOAT GLASS LIMITED [ ITA NO 535/ DEL/ 2009 DT 31.03.2005] [V] PAUL MATHEWS & SONS VS CIT AS REPORTED IN 263 ITR 101. THAT FROM THE JUDICIAL PRONOUNCEMENTS REPORTED AT PAUL MATHEWS & SONS 263 ITR 10 1 (KER); ASHOK MANILAL THAKKAR 279 ITR (AT) 143 (AHM) , MUKUND V. KAPADIA 82 ITD 489 (MUM.), HYUNDAI ENGINEERING CO. LTD ITA NO. 3006/D/ 2003' (DEL) IT IS CLEAR THAT INCOME TAX AUTHORITIES HAVE NO JURISDICTION TO RECORD SWOR N STATEMENT U/S, 133A OF THE ACT DURING THE COURSE OF SURVEY. SINCE THE AUTHORITY HAD NO JU RISDICTION TO ADMINISTER OATH AND RECORD SWAM STATEMENT SO STATEMENT U/S, 133A(3) IN THE ABSENCE OF ANY SUPPORTING MATERIAL HAS NO EVIDENTIARY VALUE AND COULD BE SAID TO BE USEFUL OR RELEVANT TO ASSESSMENT PROCEEDINGS ONLY WHEN THERE WAS MATERIAL ON RECORD TO PROVE THE BASIS ON WHICH DISCLOSURE WAS STATED TO BE MADE. THUS, IT CO ULD NOT BE SAID SOLELY ON THE BASIS OF STATEMENT DURING SURVEY AND WITHOUT ANY SUPPORTING MATERIAL ANY INCOME WAS ASSESSABLE AS LAWFUL INCOME. THE AFORESAID TRITE LA W IS ALSO REITERATED BY CBDT AT CBDT CIRCULAR NO. F.NO.286/2/2003-IT (INV.II) DATED 10TH MARCH 2003 IN THE FOLLOWING WORDS 'INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHE RE ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH AND SEIZURE AND SURVEY OPERATIONS. SUCH CONFESSIONS , IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSE SSEE WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, CONFESSIONS DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE O F INCOME, WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME-TAX ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 30 DEPARTMENT. SIMILARLY, WHILE RECORDING STATEMENTS D URING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSIONS AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. THE LD CIT DR DURING THE COURSE OF HEARING BEFORE THE HONBLE BENCH PLACED RELIANCE ON THE STATEMENT OF THE ASSESSEE AS RECORDED DURING THE COURSE OF ASSESSMENT AND ALSO REFERRED THE FOLLOWING DECISIONS:- S.NO REFERENCE OF DECISION CITATION OF DECISION 1 ZIKRULLAH CHAUDHARY ITA NO 669/PN/2012 DT 18-02-2 014 2 MAHESH B SHAH VS ACIT 103 TAXMAN 91[ KER] 3 WESTERN AUTOMOBILES (INDIA) VS CIT 112ITR 1048 [ BOM] [I] PUNE BENCH OF ITAT IN THE CASE OF ZIKRULLAH CH AUDHARY [ APPEAL NO ITA NO 669/PN/ 2012. [II] HONBLE KERALA HIGH COURT IN THE CASE OF MAHE SH B SHAH VS ACIT AS REPORTED IN 103 TAXMAN 91. [III] HONBLE HIGH COURT OF BOMBAY IN THE CASE OF W ESTERN AUTOMOBILES (INDIA) V CIT AS REPORTED IN 112 ITR 1048. THE LD CIT[A] VIDE HIS ORDER DT 22-03-2013 IN PARA 5.6 ON INNER PAGE NO 10 OF THE APPELLATE ORDER HAS DEALT WITH THE SAID ISSUE IN DE TAIL AND UPHOLD THE CONTENTION OF THE ASSESSEE. THAT IN VIEW OF THE ABOVE AND ON THE BASIS OF THE W RITTEN SUBMISSION FILED BEFORE THE HONBLE BENCH FROM TIME TO TIME AND ON THE BASIS OF DECISIONS AS RELIED, IT IS SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADD ING THE AMOUNT OF SHARE APPLICATION MONEY TO THE INCOME OF THE ASSESSEE MERELY ON THE B ASIS OF STATEMENT OF AS RECORDED DURING THE COURSE OF SURVEY EVEN WHEN THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON IT BY FURNISHING THE AMPLE DOCUMENTS AS TO JUSTI FY THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SHARE HOLDERS. THAT IT IS S ETTLED POSITION OF LAW, IN THE CASE OF SHARE APPLICATION MONEY/ SHARE CAPITAL, THE ASSESSE E HAS TO PROVE THE IDENTITY OF THE SHARE HOLDERS ONLY. THE DECISIONS AS REFERRED IN T HE ASSESSMENT ORDER ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. THE DE CISION OF THE HONBLE CHATTISGARH HIGH COURT IN THE CASE OF ITO VS VIJAY KUMAR KESAR REPOR TED IN 327 ITR 497 HAS HELD THAT ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 31 CONFESSION MADE BY THE ASSESSEE DURING SURVEY PROCE EDINGS IS NOT CONCLUSIVE AND IT IS OPEN TO THE ASSESSEE TO ESTABLISH THAT THE SAME WAS NOT TRUE AND CORRECT BY FILING THE COGENT EVIDENCE. HONBLE HIGH COURT ALSO REFERRED T HE DECISION AS RELIED BY THE ASSESSING OFFICER IN THE CASE OF DR S C GUPTA VS CI T. ACCORDINGLY, ADDITION MADE ON THE BASIS OF STATEMENT OF DIRECTOR OF THE ASSESSEE COMP ANY AS RECORDED DURING THE COURSE OF SURVEY IS NOT BINDING AND CANNOT BE SOLE BASIS OF A DDITION TO THE INCOME OF THE ASSESSEE. THUS, THE ORDER OF THE LD CIT[A] APPROVING THE CONT ENTION OF THE ASSESSEE REQUIRES TO BE MAINTAINED/ APPROVED. SYNOPSIS ON MERIT OF THE APPEAL THAT ON MERIT OF THE CASE, THE ASSESSING OFFICER H AS ADDED THE ENTIRE AMOUNT OF SHARE APPLICATION MONEY EVEN WHEN THE ASSESSEE HAS PROVID ED AMPLE DOCUMENTS AS TO JUSTIFY THE IDENTITY AND GENUINENESS OF THE SHARE APPLICATI ON MONEY. LIST OF SUCH INVESTORS HAS BEEN GIVEN ON PAGE NOS 2 & 3 OF THE ASSESSMENT ORDE R AS PASSED U/S 143(3) OF THE INCOME TAX ACT. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS R ECEIVED SHARE APPLICATION MONEY OF RS 47900000/- FROM THE FOLLOWING PARTIES:- S.NO NAME OF THE COMPANY ADDRESS PAN NO AMOUNT (RS) 1. MIHIR AGENCIES PVT. LTD BLOCK-H SHRI SADASHIV C HS LTD, 6 TH ROAD SHANTACRUZ (E) MUMBAI -400055 AABCH7898H 20,00,000 2. SUMUKH COMMERCIAL PVT LIMITED (FORMERLY KNOWN AS CAPE TOWN MERCANTILE CO. PVT LIMITED ) CHAMBER NO.06, BIG THREE BUILDING, 1 ST MARINE STREET MUMBAI-400002 AACCC7400M 10,00,000 3. BUNIYAD CHEMICAL LIMITED BLOCK-H, SHRI SADASHIV CHS LIMITED 6 TH ROAD SHANTACRUZ (E) MUMBAI -400055 AABCB6954G 20,00,000 4. LUXER PROPERTIES PVT. LIMITED C-104, RAHUL APT., S.V ROAD, ANDHERI (W) MUMBAI -400058 AAACL1462A 20,00,000 5. SURESH RATHOD CONSULTANTS P LIMITED 312,KALBADEVI ROAD, IIIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAFCS5844Q 25,00,000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 32 6. ELDERADO PROPERTIES P LIMITED 312,KALBADEVI ROAD, IIIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAACE1957F 10,00,000 7. ECRO ARTISANS P LIMITED 312,KALBADEVI ROAD, IIIR D FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAACE8119M 15,00,000 8. PURSUIT SECURITIES LIMITED 312,KALBADEVI ROAD, I IIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAACP3800E 22,00,000 9. TRIBHUVAN HOUSING LIMITED 23,JALARAM SOCIETY CHAMUNDA CIRCLE BORIWALI (W) MUMBAI - 40001 AAACT7299M 10,00,000 10. MILLENIUM CYBERTECH LIMITED 38,GANGA VIAHAR,3 RD FLOOR ROKANDIA LANE BORIVALIE,(W) MUMABAI-400092 AABCMB8712D 10,00,000 11. WINFOTECH SYSTEMS P LIMITED 312,KALBADEVI ROAD, IIIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAACW3541K 30,00,000 12. ACUMEN PAPER BINDER PVT.LTD. 109,VAKIL CHAMBER, GALI NO.1, SHAKARPUR, DELHI AAACA2172J 20,00,000 13. BHAGIRATHI INDUSTRIES LTD. 201,MALHOTRA COMPLEX 2ND FLOOR, CHAWLA GALI, SHAKARPUR,DELHI AAACB2254N 20,00,000 14. HAPPENING MOTORS PVT.LTD. S-205,KANISHKA COMPLEX, SAINI ENCLAVE DELHI AAACH4607F 20,00,000 15. STARVISION MEDIA P LIMITED D-25A, FIRST FLOOR, LAXMI NAGAR, DELHI AAKCS8003N 20,00,000 16. STARTRANS LOGISTICS PVT. LTD. S-205,KANISHKA COMPLEX, SAINI ENCLAVE DELHI AAJCS0491H 20,00,000 17. SAYAM SHARES & SECURITIES PVT.LTD. 201,MALHOTRA COMPLEX 2ND FLOOR, CHAWLA GALI, SHAKARPUR, DELHI AALCS9567N 20,00,000 18. SHREE BALAJI SAINATH BUILDERS PVT.LTD. B-1058, SHASTRI NAGAR, KAROL BAGH, NEW DELHI AAJCS7086E 15,00,000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 33 19. SURBHI NETWORKING & BROADCASTING PVT.LTD.(FORMALLY KNOWN AS R.J. FABTEX PVT.LTD.) A-115, GROUND FLOOR, VAKIL CHAMBER, SHAKARPUR, DELHI AADCR3947D 40,00,000 20. UNIWORD BARTERCARD P LIMITED D-25A, FIRST FLOOR, LAXMI NAGAR, DELHI AAACU9640D 9,00,000 21 ACIL COTTON INDUSTRIES PVT LIMITED (FORMARLY KNOWN AS ADESHWAR COTTON INDUSTRIES LIMITED ) 87/404, NATRAJ TOWNSHIP PART-2 PARSURAM NAGAR, SOCIETY ROAD SAYAJI GANJ VADODADRA -39005 AABCA7788F 10,00,000 22 ALPHA GRAPHIC INDIA LIMITED B7/403, NATRAJ TOWNSHIP PART- 2 PARSURAM NAGAR, SOCIETY ROAD SAYAJI GANJ VADODADRA - 39005 AABCA8299H 5,00,000 23 MANGAL MURTI INFRAREAL P LIMITED 241,APOLLO TOWER, M.G.ROAD INDORE AAACC6705H 10,00,000 24 NAMAN EQUIPMENTS AND CONSTRUCTIONS (INDIA ) PVT LIMITED FORMARLY KNOWN AS HOUSING FINANCE LIMITED 115, DIAMOND TRADE CENTRE, NEW PALASIA INDORE AABCM1733A 5,00,000 25. KINESCOPE INDIA PVT LIMITED SHOP NO.220, LABH CHAMBERS, STATION ROAD AURANGABAD M.S. AABCK0527E 15,00,000 26 VOLPLAST LIMITED 5/856,KAMLA APT. SECOND FLOOR , GHASHERI SURAT-395009 AABCV8410D 23,00,000 27 GALAXY DEVCOM PVT LIMITED GANESH BHAWAN, CHWADI BAZAAR GWALIOR AAECM8933D 25,00,000 28 NIMBUS STOCK INVEST LIMITED ( FORMALLY KNOWN AS ROLLEDGOLD INDUSTRIES LIMITED 207,AKANSHA TRADE CENTRE ,156 KANCHANBAGH INDORE AADCR4275J 15,00,000 47900000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 34 THE ASSESSING OFFICER ON PAGE NOS 11 AND 12 OF THE ASSESSMENT ORDER HAS DISCUSSED ABOUT THE FACTUAL PART OF ALL THE COMPANIES FROM WH OM SHARE APPLICATION MONEY WERE ACTUALLY RECEIVED BY THE ASSESSEE. THE ASSESSING OF FICER ON PAGE NO 11 ALSO LIST OUT THE NAME OF TEN COMPANIES TO WHOM NOTICE U/S 133(6) WAS ISSUED BUT NOT SERVED TO THE ASSESSEE. THE ASSESSING OFFICER ON PAGE NOS 11 & 12 ALSO LIST OUT THE NAME OF 12 (TWELVE ) COMPANIES TO WHICH LETTER WAS ISSUED U/S 133(6) OF THE INCOME TAX ACT AND THE SAME WAS SERVED TO THEM BUT NO REPLY WAS RECEIV ED FROM THESE COMPANIES AND ON PAGE NO 12 OF THE ASSESSMENT ORDER, LIST O F FOUR COMPANIES TO WHOM LETTERS WERE ISSUED U/S 133(6) OF THE INCOME TAX ACT AND TH E SAME WAS DULY SERVED AND REPLY WERE ALSO RECEIVED FROM THESE INVESTORS COMPANIES. THE ASSESSING OFFICER LATER-ON ISSUED COMMISSION T O THE MUMBAI, DELHI AND BARODA OFFICES ASKED TO INVESTIGATE THE GENUINENESS OF THE SHARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE EVEN WHEN IN MOST OF THE CASES LETT ER ISSUED U/S 133(6) WAS ISSUED BY THE AO AND THE SAME WAS DULY SERVED UPON THEM. THAT REPORT FROM ALL THE OFFICES WERE RECEIVED AND DULY CONFRONTED TO THE ASSESSEE. THAT FEW OF THE SHARE HOLDERS WERE APPEARED BEFORE THE ASSESSING OFFICER AND SUBMITTED THEIR REPLY IN DETAILED. HOWEVER, THE ASSESSING OFFICER ADDED THE ENTIRE AMOUNT OF SH ARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE AS ITS INCOME. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROC EEDING HAD FILED THE SUFFICIENT DOCUMENTS AS TO JUSTIFY THE IDENTITY, GENUINENESS A ND CREDITWORTHINESS OF THE SHARE APPLICATION MONEY AS RECEIVED BY IT. HOWEVER, THE A SSESSING OFFICER IGNORED THE SAID SUBMISSION AND ADDED THE ENTIRE AMOUNT OF SHARE APP LICATION MONEY AS INCOME OF THE ASSESSEE. THE ASSESSEE HAS ALSO DECLARED INTERIM DIVIDEND AN D FINAL DIVIDEND, DETAIL OF THE SAME IS AS UNDER:- S.NO INTERIM/ FINAL DIVIDEND DATE OF DECLARATION % OF DIVIDEND 1 INTERIM DIVIDEND 03.11.2009 12.50 2 FINAL DIVIDEND 25.10.2010 17.50 THE ASSESSEE IN ADDITION TO THE DIVIDEND, THE ASSE SSEE COMPANY ALSO DECLARED BONUS SHARES ON DATED 30 TH MARCH2012 IN THE RATIO OF 1:10 I.E ONE SHARE FOR EVERY 10 SHARES ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 35 HELD BY THE SHARE HOLDERS. COPY OF RETURN OF ALLOTM ENT AS FILED WITH THE REGISTRAR OF COMPANIES FOR ALLOTMENT OF BONUS SHARE IS ALSO ENCL OSED FOR YOUR READY REFERENCE. THAT IN THE CASE OF THE ABOVE ASSESSEE FOLLOWING F ACTS WERE DULY ACCEPTED BY THE ASSESSING OFFICER AND THESE FACTS ARE NOT IN DISPUT E:- S.NO FACTS OF THE CASE NOT IN DISPUTE BY THE AO 1 THE AMOUNT OF SHARE APPLICATION MONEY WERE RECEIV ED THROUGH AN ACCOUNT PAYEE CHEQUES 2 PAN NO IN RESPECT OF ALL THE SHARE HOLDERS HAVE B EEN PROVIDED 3 COPY OF BANK STATEMENT OF ALL THE SHAREHOLDERS HA VE BEEN PROVIDED 4 COPY OF BALANCE SHEET OF THE SHARE HOLDERS COMPAN Y ALSO BEEN PROVIDED AS FAR AS POSSIBLE 5 COPY OF AFFIDAVIT AS SIGNED BY THE DIRECTOR HAS A LSO BEEN PROVIDED 6 MEMORANDUM AND ARTICLE OF ASSOCIATION HAS ALSO BE EN PROVIDED 7 DETAIL AS FURNISHED BY THE ASSESSEE WAS FOUND COR RECT AND PROPER. THE DOCUMENTS AS FILED BY THE ASSESSEE NOT FOUND WRONG OR FABRICATED. 8 THE SHARE OF THE ASSESSEE COMPANY STILL LYING IN POSSESSION OF THESE SHARE HOLDER 9 DIVIDEND WAS DECLARED AND DULY CREDITED IN THE BA NK ACCOUNT OF THE SHARE HOLDERS AND DEBITED IN THE BANK ACCOUNT OF THE ASSE SSEE COMPANY 10 1(ONE) BONUS SHARES WERE ALLOTTED TO THE SHARE H OLDERS HAVING 10( TEN) SHARES OF THE ASSESSEE COMPANY THE ASSESSING OFFICER SIMPLY ON THE BASIS OF PRESU MPTION ADDED THE AMOUNT OF SHARE APPLICATION MONEY TO THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER IN THE CASE OF FOLLOWING SEVE N COMPANIES, THE AMOUNT OF SHARE APPLICATION MONEY WAS ADDED TO THE INCOME OF THE ASSESSEE BASED ON THE REPORT OF THE INVESTIGATION WING OF THE MUMBAI:- S.NO NAME OF THE COMPANY AMOUNT (RS) 1 WINFOTECH SYSTEMS P LIMITED 3000000 2 LUXER PROPERTIES P LIMITED 1500000 3 SURESH RATHOD CONSULTANTS P LIMITED 2500000 4 ELDERADD PROPERTIES P LIMITED 1000000 5 ECRO ARTISONS P LIMITED 1500000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 36 6 MIHIR AGENCIES P LIMITED 2000000 7 BUNIYAD CHEMICALS LIMITED 2000000 13500000 THE LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX A CT WAS DULY SERVED UPON THE ABOVE COMPANIES. REPLY TO THE SAID LETTER WAS A LSO RECEIVED WHEREIN IT WAS POINTED OUT THAT DUE TO SEARCH IN THEIR PREMISES, ENTIRE RE CORD OF THE INVESTOR COMPANIES WERE LYING WITH THE INCOME TAX DEPARTMENT. THAT REPLY AS FILED IN RESPONSE TO THE LETTER ISSUED U/S 133(6) OF THE INCOME TAX ACT AND ALSO FROM SEAR CH ACTION OF THE INCOME TAX DEPARTMENT, THE IDENTITY OF THE SHARE HOLDERS COMPA NY STAND PROVED. THE REPORT AS RECEIVED IN RESPONSE TO THE COMMISSIO N DT 12-09-2011 FROM THE INVESTIGATION WING OF THE MUMBAI WAS DEFECTIVE AND NOT PROPER. THE AO ISSUED COMMISSION ON 12-09-2011. HOWEVER, NO FRESH INQUIRY WAS MADE BY THE INVESTIGATION WING BUT SIMPLY ON THE BASIS OF INFORMATION AVAILAB LE IN THEIR POSSESSION , REPORT WAS PREPARED AND SUBMITTED TO THE ASSESSING OFFICER. ST ATEMENT OF SHRI KAMAL KISHORE RATHI AS RECORDED ON 22-10-2010 MAINLY IN RESPECT OF LONG TERM CAPITAL GAIN, STATEMENT OF SHRI MUKESH CHOKSI AS RECORDED ON 25-11-2009, ON 11-12-2 009 AND ON 03-02-2010 AND STATEMENT OF SHRI JAYESH SAMPAT AS RECORDED ON 14-0 5-2010 WERE REFERRED IN THE REPORT AS SUBMITTED BY THE AO. THAT IN ALL THEIR STATEMENT NAME OF THE ASSESSEE COMPANY WAS NOT REFERRED. IN THE CASE OF THE ASSESSEE, AFFIDAVI T FROM ALL THE ABOVE COMPANIES WERE TAKEN EVEN AFTER THE DATE OF STATEMENT AS REFERRED BY THE INVESTIGATION WING:- S.NO NAME OF THE COMPANIES NAME OF THE DIRECTOR DATE OF AFFIDAVIT 1 WINFOTECH SYSTEMS P LIMITED MANISH RATHI 24-08-2 011 2 LUXER PROPERTIES P LIMITED MANISH RATHI 24-08-20 11 3 SURESH RATHOD CONSULTANTS P LIMITED MANISH RATHI 24-08-2011 4 ELDERADD PROPERTIES P LIMITED MANISH RATHI 24-08- 2011 5 ECRO ARTISONS P LIMITED MANISH RATHI 24-08-2011 6 MIHIR AGENCIES P LIMITED JAYESH SAMPAT 16-08-201 1 7 BUNIYAD CHEMICAL LIMITED JAYESH SAMPAT 16-08-201 1 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 37 MUMBAI BENCH OF ITAT IN THE CASE OF ACIT VS KRISHNA SHEET PROCESSORS P LIMITED [ APPEAL NO ITA NO 546/ MUM/ 2013 DT 30-06-2015 FOR T HE ASST YEAR 2009-10. JAIPUR BENCH OF ITAT IN THE CASE OF BHARTI SYNTEX P LIMITED AS REPORTED IN 52 DTR 73/ 137 TTJ 82. AHMEDABAD BENCH OF ITAT IN THE CASE OF CHARTERED MO TORS P LIMITED VS ACIT [ APPEAL NO IT (SS)A NO 26/ AHD/ 2012 DT 28-08-2014 FOR THE ASST YEAR 2008-09]. MUMBAI BENCH OF ITAT IN THE CASE OF M/S SDB ESTATE PRIVATE LIMITED VS ITO [ APPEAL NO ITA NO 584/ M/ 2015 DT 15-04-2015 ] FOR THE ASST YEAR 2008-09. THAT EVEN OTHERWISE IN ANY CASE, STATEMENT RECORDED BEHIND AND BACK OF THE ASSESSEE CANNOT BE RELIED IN THE CASE OF THE ASSESSEE UNTIL AND UNLESS OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE ASSESSEE AS HELD BY THE HONBLE AP EX COURT IN THE CASE OF KISHAN CHAND CHELLARAM VS CIT AS REPORTED IN 125 ITR 713. THE LD CIT[A] VIDE HIS ORDER DT 22-03-2013 HAS DISC USSED THE SAID ISSUE IN DETAIL IN PARAS 5.8 TO 5.12 OF HIS ORDER ON INNER PAGE NOS 38 TO 44 OF THE ORDER. THAT IN VIEW OF THE ABOVE, THE ADDITION OF RS 13500 000/- MADE TO THE INCOME OF THE ASSESSEE IN RESPECT OF SEVEN COMPANIES OF MUMBAI WI THOUT MAKING ANY INDEPENDENT INQUIRY WAS WRONG, THE SAME NOW REQUIRES TO BE DELE TED IN FULL. THE ASSESSING OFFICER HAS ADDED AN AMOUNT OF RS 184 00000/- TO THE INCOME OF THE ASSESSEE IN RESPECT OF AMOUNT RECEIVED FROM THE FOLLOWING COMPANIES:- S.NO NAME OF THE COMPANY PAN NO AMOUNT 1 ACUMEN PAPER BINDER PVT.LTD. AAACA2172J 2000000 2 BHAGIRATHI INDUSTRIES LTD. AAACB2254N 2000000 3 HAPPENING MOTORS PVT.LTD. AAACH4607F 2000000 4 STARVISION MEDIA PVT.LTD. AAKCS8003N 2000000 5 STARTRANS LOGISTICS PVT. LTD. AAJCS0491H 2000000 6 SAYAM SHARES & SECURITIES PVT.LTD. AALCS9567N 200 0000 7 SHREE BALAJI SAINATH BUILDERS PVT.LTD. AAJCS7086E 1500000 8 SURBHI NETWORKING & BROADCASTING PVT.LTD.(FORMALLY KNOWN AS R.J. FABTEX PVT.LTD.) AADCR3947D 4000000 9 UNIWORD BARTERCARD PVT.LTD. AAACU9640D 900000 18400000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 38 THAT IN CASE OF ABOVE COMPANIES IN MOST OF THE CASE S LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX ACT WAS SERVED TO THESE COMPANIES, REPLI ES WERE ALSO RECEIVED BY THE ASSESSING OFFICER DIRECTLY EITHER IN RECEIPT OF THE LETTER U/S 133(6) OF THE INCOME TAX ACT OR ON REQUEST OF THE ASSESSEE. HOWEVER, THE ASSESSI NG OFFICER ISSUED COMMISSION TO THE INVESTIGATION WING, DELHI. THAT INSPECTOR OF WING V ISITED TO SERVE SUMMON TO THESE COMPANIES, SUMMON TO BHAGIRATHI INDUSTRIES LIMITED AND SAYAM SHARES & SECURITIES P LIMITED WERE SERVED AND STATEMENT OF DIRECTORS OF B OTH THE COMPANIES WERE RECORDED. HOWEVER, COPY OF THE SAID STATEMENT WAS NOT PROVIDE D TO THE ASSESSEE. IT WAS INFORMED BY THE DIRECTORS OF THESE COMPANIES THAT THEY HAVE PERSONALLY APPEARED BEFORE THE AUTHORIZED OFFICER AND CATEGORICALLY ACCEPTED ABOUT THE INVESTMENT MADE BY THEM IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY. THE ASSESSIN G OFFICER HIMSELF ON INNER PAGE NO 15 OF THE ORDER HAS STATED THAT SHRI ARUN JAIN DIRE CTOR OF M/S SAYAM SECURITIES LIMITED WAS PERSONALLY APPEARED BEFORE THE AUTHORISED OFFIC ER AND ACCEPTED ABOUT THE INVESTMENT MADE IN THE SHARES OF THE ASSESSEE COMPA NY. THE ASSESSEE IN ITS REPLY AS REPRODUCED ON INNER PAGE NO 18OF THE ASSESSMENT ORD ER IN PARA 2.1.1 HAS STATED THAT DIRECTOR OF M/S BHAGIRATHI INDUSTRIES LIMITED AND M /S SAYAM SHARES & SECURITES P LIMITED WERE APPEARED TO WHICH THE ASSESSING OFFICE R HIMSELF HAS NOT DISPUTED. THE INSPECTOR IN HIS REPORT HAS SUBMITTED THAT OTHE R SEVEN COMPANIES WERE NOT FOUND ON THE ADDRESSES AS PROVIDED BY THE ASSES SEE. THE SAID FACTUAL FINDING OF THE INSPECTOR WAS NOT CORRECT. THAT WHEN LETTER WAS ISS UED BY THE ASSESSING OFFICER U/S 133(6) OF THE INCOME TAX ACT, THE SAID LETTER WAS D ULY SERVED BUT INSPECTOR HAS SUBMITTED HIS NEGATIVE REPORT WHICH IS CONTRARY TO THE FACTS OF THE PRESENT CASE. HOWEVER, THE ASSESSING OFFICER ACTED ON THE REPORT AS SUBMITTED BY THE INVESTIGATION WING OF THE DELHI AND ADDED THE ENTIRE AMOUNT OF SH ARE CAPITAL AS RECEIVED FROM ALL THE NINE COMPANIES OF DELHI AS NON- GENUINE. THAT ON PERUSAL OF THE INSPECTOR REPORT, IT IS NOTI CED THAT THE SAID SUMMON WAS NOT AFFIXED ON THE GIVEN PREMISES. SIGNATURE AND ADDRES S OF TWO INDEPENDENT WITNESSES AS REQUIRED WAS ALSO NOT OBTAINED. THE LETTER AS ISSUE D U/S 133(6) OF THE INCOME TAX ACT WAS DULY SERVED ON THESE SHAREHOLDERS. REPLIES FROM THESE SHAREHOLDERS HAVE ALSO BEEN RECEIVED DIRECTLY IN THE OFFICE OF THE ASSESSI NG OFFICER. THUS, PROBABLY AT THE TIME OF VISIT OF THE INSPECTOR, MAY BE THE AUTHORIZED PERSO N OF THESE COMPANIES MAY NOT FOUND AVAILABLE ON THE GIVEN ADDRESS. THAT AS FAR AS SIGN BOARD IS CONCERNED. IN THIS RESPECT IT IS CLARIFIED THAT MOST OF THESE COMPANIES BEING THE FINANCE AND INVESTMENT COMPANIES ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 39 DEAL WITH THE CLOSE AND ASSOCIATE PERSONS AND NOT W ITH THE GENERAL PUBLIC AT LARGE. FOR THIS REASON THEY NEED NOT REQUIRES TO DISPLAY THEIR SIGN BOARD ON THEIR PREMISES. + THE ASSESSEE VIDE ITS LETTER DT 28-11-2011 HAS PROV IDED NEW CHANGED ADDRESS OF THE FOLLOWING TWO COMPANIES:- THE ASSESSEE HAS ALSO REQUESTED TO THE ASSESSING OF FICER TO PROVIDE COPY OF REPLY AS DIRECTLY RECEIVED FROM ALL THE SHARE APPLI CANT BUT THE SAME WAS NOT PROVIDED. IT WAS INTIMATED BY THE MOST OF THE SHAREHOLDERS THAT THEY HAVE DIRECTLY FILE REPLY TO THE ASSESSING OFFICER. THAT CA SHRI RAJIV BANSAL FROM DELHI APPEARED ON BE HALF OF THESE COMPANIES PERSONALLY BEFORE THE ASSESSING OFFICER. HE HAS SUBMITTED ENTI RE PAPERS AS TO JUSTIFY THEINVESTMENT MADE BY THESE COMPANIES IN THE SHARE APPLICATION MO NEY/ SHARE CAPITAL OF THE ASSESSEE COMPANY. DOCUMENTS AS FILED BY SHRI RAJIV BANSAL AR E ENCLOSED FOR YOUR KIND REFERENCE. THAT AUTHORITY LETTER IN FAVOUR OF SHRI BANSAL AS E XECUTED ON STAMP PAPER IS ALSO ENCLOSED WITH THESE DOCUMENTS. THAT FROM THE PERSON AL PRESENCE OF CA SHRI RAJIV BANSAL, THE IDENTITY OF THE SHARE HOLDER COMPANY ST AND PROVED. THE ASSESSING OFFICER ADDED AN AMOUNT OF RS 15,00,0 00/- TO THE INCOME OF THE ASSESSEE IN RESPECT OF THE FOLLOWING TWO COMPANIES ON THE BASIS OF REPORT AS RECEIVED FROM THE INVESTIGATION WING OF THE VADODARA:- S.NO NAME OF THE SHARE HOLDER AMOUNT (RS ) 1 ACIL COTTON INDUSTRIES P LTD [ FORMERLY KNOWN AS ADESHWAR COTTON INDUSTRIES LIMITED ] 10,00,000 2 ALPHA GRAPHIC INDIA LIMITED 5,00,000 15,00,000 THE LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX A CT WAS DULY SERVED UPON THE SHARE APPLICANT AND REPLY FOR THE SAME WAS ALSO FILED BY THE INVEST OR COMPANIES. THAT IN COMMISSION PROCEEDING BALANCE SHEET AND ASSESSMENT DETAILS WERE OBTAINED AND PROVIDED BY THE INVESTIGATION WING IN S.NO NAME OF THE COMPANY 1 M/S UNIWORD BARTER CARD P LIMITED 2 M/S STAR VISION MEDIA P LIMITED ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 40 ITS REPORT. HENCE, IDENTITY OF BOTH THESE COMPANIES STAND PROVED. THAT IN THE REPORT AS RECEIVED FROM THE INVESTIGATION WING IT WAS POINTED OUT THAT THE INVESTMENT MADE IN THE ASSESSEE COMPANY WAS NOT SEPARATELY REFLECTED IN THE BALANCE SHEET. HOWEVER, ON PERUSAL OF THE AUDITED BALANCE SHEET IT WAS NOTICED THAT THE NAME OF THE A SSESSEE COMPANY WAS SEPARATELY REFLECTED IN THE AUDITED BALANCE SHEET OF M/S ALPHA GRAPHIC I NDIA LIMITED. HENCE, THE VERY BASIS OF ADDITION AS PROPOSED BY THE ASSESSING OFFICER WAS N OT CORRECT. THE ASSESSEE HAD FILED SUFFICIENT DOCUMENTS AS TO JUSTIFY THE AMOUNT OF SHARE APPLICA TION MONEY. HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDITION OF RS 15,00,00 0/- TO THE INCOME OF THE ASSESSEE. THAT IN VIEW OF THE ABOVE, ADDITION OF RS 15,00,000 /- MADE TO THE INCOME OF THE ASSESSEE BY THE ASSESSING OFFICER MERELY ON THE BASIS OF REPORT OF THE INVESTIGATION WING WAS NOT CORRECT BY IGNORING THE DOCUMENTS AS FIELD BY THE ASSESSEE. THE ASSESSING OFFICER IN THE CASE OF FOLLOWING COMP ANIES SIMPLY ADDED THE AMOUNT TO THE INCOME OF THE ASSESSEE EVEN WHEN THE ASSESSEE HAD F ILED COMPLETE DETAILS AS TO JUSTIFY THE AMOUNT OF SHARE APPLICATION MONEY:- S.NO NAME OF THE COMPANY ADDRESS PAN NO AMOUNT (RS ) 1. SUMUKH COMMERCIAL PVT LIMITED (FORMERLY KNOWN AS CAPE TOWN MERCANTILE CO. PVT LIMITED ) CHAMBER NO.06, BIG THREE BUILDING, 1 ST MARINE STREET MUMBAI-400002 AACCC7400M 10,00,000 2. PURSUIT SECURITIES LIMITED 312,KALBADEVI ROAD, I IIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAACP3800E 22,00,000 3 TRIBHUVAN HOUSING LIMITED 23,JALARAM SOCIETY CHA MUNDA CIRCLE BORIWALI (W) MUMBAI - 40001 AAACT7299M 10,00,000 4 MILLENIUM CYBERTECH LIMITED 38,GANGA VIAHAR,3 RD FLOOR ROKANDIA LANE BORIVALIE,(W) MUMABAI-400092 AABCMB8712D 10,00,000 5 MANGAL MURTI INFRAREAL P LIMITED 241,APOLLO TOWER, M.G.ROAD INDORE AAACC6705H 10,00,000 6 NAMAN EQUIPMENTS AND CONSTRUCTIONS (INDIA ) PVT LIMITED FORMARLY KNOWN AS HOUSING FINANCE LIMITED 115, DIAMOND TRADE CENTRE, NEW PALASIA INDORE AABCM1733A 5,00,000 7 KINESCOPE INDIA PVT LIMITED SHOP NO.220, LABH CH AMBERS, STATION ROAD AURANGABAD M.S. AABCK0527E 15,00,000 8 VOLPLAST LIMITED 5/856,KAMLA APT. SECOND FLOOR , AABCV8410D 23,00,000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 41 GHASHERI SURAT-395009 9 GALAXY DEVCOM PVT LIMITED GANESH BHAWAN, CHWADI BAZAAR GWALIOR AAECM8933D 25,00,000 10 NIMBUS STOCK INVEST LIMITED ( FORMALLY KNOWN AS ROLLEDGOLD INDUSTRIES LIMITED 207,AKANSHA TRADE CENTRE ,156 KANCHANBAGH INDORE AADCR4275J 15,00,000 1,45,00,000 THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DING FILED COMPLETE DETAIL AS TO JUSTIFY THE GENUINENESS OF THE SHARE APPLICATION RE CEIVED BY IT BY FILING AMPLE DOCUMENTS. THE ASSESSING OFFICER SIMPLY REJECTED THE SUBMISSIO N OF THE ASSESSEE AND ADDED THE ENTIRE AMOUNT OF SHARE APPLICATION MONEY TO THE INC OME OF THE ASSESSEE WHICH IN ANY CASE WAS NOT CORRECT. THAT HONBLE INDORE BENCH OF ITAT IN THE CASE OF M/ S AGRAWAL COAL CORPORATION , AS DISCUSSED BY THE AO, HAS CATEGORICALLY HELD THAT IF THE IDENTITIES OF THE SHARE HOLDERS STAND PROVED. IN THAT CASE, NO ADDITION IS TO BE MA DE TO THE INCOME OF THE ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAD PROVED THE IDENT ITY OF THE SHARE HOLDERS BY FILING THE PAN NO AND PROVIDING THE BANK DETAILS OF THE SHARE HOLDERS. HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING THE AMOUNT OF S HARE APPLICATION MONEY AS RECEIVED BY IT FROM ALL THE SHARE HOLDERS. IN VIEW OF THE ABOVE , ADDITION OF RS 14500000/- MADE TO THE INCOME OF THE ASSESSEE WAS NOT JUSTIFIED. THAT IN THE PRESENT CASE THE ASSESSING OFFICER HIM SELF HAS NOT DOUBTED THE IDENTITY INRESPECT OF ALL THE SHARE HOLDERS OF THE ASSESSEE COMPANY. HENCE, THE FOLLOWING THE DECISION OF THE HONBLE CO-ORDINATE BENCH IN THE CA SE OF M/S AGRAWAL COAL CORPORATION, THE AMOUNT OF SHARE APPLICATION MONEY AS RECEIVED B Y THE ASSESSEE REQUIRES TOBE ACCEPTED AS GENUINE. THE ASSESSEE IN ADDITION TO THE ABOVE, ALSO PLACED RELIANCE ON THE FOLLOWING DECISIONS:- LOVELY EXPORTS P LIMITED AS REPORTED IN 11 ITJ 357. CIT VS PEOPLE GENERAL HOSPITAL LTD [ APPEAL NO M.A. I.T NO 27/ 2008 DT 27-06-2013]. THE INDORE BENCH IN THE CASE OF STL EXTRUSION (P) L IMITED VIDE ORDER DATED 10.05.2010 BEING ITA NO.(SS) 259, 260 /IND/2008 AFTER CONSIDER ING THE JUDGEMENT OF HONBLE MP HIGH COURT IN THE CASE OF RATHI FINLEASE LTD. REPOR TED IN 215 CTR 429 (MP). THAT THE ABOVE ORDER OF ITAT INDORE BENCH HAS ALSO BEEN CONFIRMED BY THE HONBLE M.P. HIGH COURT IN THE CASE OF CIT V/S STL EXTRUSION (P) LTD REPORTED IN 53 DTR 97(2011). ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 42 THAT ITAT, INDORE BENCH IN THE CASE OF M/S RAJSHREE FINSEC P LTD [APPEAL NO 545/ IND/2010 DT 06-02-2012 FOR THE ASST YEAR 2007-08 ]. THAT ITAT, INDORE BENCH, INDORE VIDE ITS ORDER DT 2 8-03-2012 IN THE CASE OF M/S MITTAL APPLIANCES LIMITED FOR THE ASST YEAR 2004-05. THAT JODHPUR BENCH OF ITAT IN THE CASE OF ACIT VS M /S SUPERTECH DIAMOND TOOLS P LTD [ APPEAL NO ITA NO 211/ JODH/ 2009 DT 19-01-2012 FO R THE ASST YEAR 2004-05 ]. THAT ITAT DELHI BENCH IN THE CASE OF M/S EXCELLANCE TOWN PLANNER P LIMITED [ APPEAL NO ITA NO 871/DEL/ 2010 DT 25-05-2012 FOR THE ASST YEAR 2003-04]. THAT GANGESHWARI METAL PVT LTD [ APPEAL NO ITA NO 5 97/2012]. THAT CIT VS. OASIS HOSPITALITIES (P) LTD REPORTED I N 333 ITR 119 (2011). COUNTER SUBMISSION ON THE ARGUMENTS OF THE LD CIT DR THE LD CIT DR DURING THE COURSE OF HEARING BEFORE THE HONBLE BENCH ARGUED THAT SHARE PREMIUM OF RS 90/- PER SHARE WAS RECEIVED BY THE AS SESSEE. THE LD CIT DR ALSO REFERRED THE BLANK TRANSFER DEED OF THE SHARE APPLI CANT. THE LD CIT DR AND SR DR PLACED RELIANCE ON THE FOLLOWING DECISIONS:- S.NO REFERENCE OF DECISION CITATION OF THE DECISIO N 1 CIT VS KORLAY TRADING CO. LTD 232 ITR 820 [ CALCU TTA] 2 N TARIKA PROPERTY INVEST (P) LTD 51 TAXMANN.COM 387 [SC] 3 CIT VS N R PORTFOLIO (P) LTD 42 TAXMANN.COM 339 [ DELHI] 4 GAYATHRI ASSOCIATES 41 TAXMANN.COM 526 [ AP 5 CIT VS FOCUS EXPORTS (P) LTD 51 TAXMANN.COM 46 [ DELHI] 6 CIT VS P MOHANKALA 291 ITR 278 [SC] 7 CIT VS MAF ACADEMY (P) LTD 42 TAXMANN.COM 377 [D ELHI] 8 SUBHLAKSHMI VANIJYA (P) LTD 60 TAXMANN.COM 60 [ KOLKATA] 9 AGRAWAL COAL CORPORATION (P) LTD 19 TAXMANN.COM 209 [ INDORE] 10 CIT VS NOVA PROMOTERS & FINLEASE [P] LTD 342 I TR 169 [DELHI] THAT AS REGARD SHARE PREMIUM OF RS 990/- PER SHARE IS CONCERN, THE ASSESSEE COMPANY IS A BIG PLAYER IN THE MEDIA SEGMENT AND ENGAGED IN THE PRINT AND BOARDING BUSINESS. THE ASSESSEE COMPANY WAS INCORPORATED ON 05-04-1989 AND THEREFORE HAVING MORE THAN 20 YEARS EXPERIENCE OF THIS LINE OF BUSINESS. THE ASSESSEE COMPANY DECLARED TOTAL INCOME IN ITS BOOKS OF ACCOUNT PRIOR TO DEPRECIATIO N WAS OF RS 9995881/- AS ON 31.03.2008 AND THE SAME WAS INCREASED TO RS 1248983 8/- AS ON 31.03.2009. THAT CONSIDERING THE LONG STANDING IN THE BUSINESS AND H UGE PROFIT THE AMOUNT OF SHARE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 43 PREMIUM IS DULY JUSTIFIABLE. THAT IN CASE OF PRIVAT E LIMITED COMPANY THE AMOUNT OF SHARE PREMIUM IS MUTUALLY DECIDED BETWEEN THE MANAGEMENT OF THE COMPANY AND SHARE APPLICANT. HENCE, THE ISSUE IN DISPUTE SHOULD NOT B E THE AMOUNT OF SHARE PREMIUM BUT THE IDENTITY OF THE SHARE HOLDERS WHO HAS APPLIED I N THE SHARE APPLICATION MONEY OF THE ASSESSEE COMPANY. THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT (C ENTRAL)-III VS ANSHIKA CONSULTANTS P LIMITED [ APPEAL NO ITA 467/ 2014 DT 16-04-2015 ] H AS HELD. IN THE CASE OF ACIT VS M/S KRISHNA SHEET PROCESSORS P LIMITED [ APPEAL NO ITA NO 546/ MUM/ 2013 DT 30-06-2015] THE AMOUNT OF SHARE PREMIUM OF RS 1000/- WAS DULY ACCEPTED AS GENUINE. THAT IN VIEW OF THE ABOVE, ONCE THE ASSESSEE HAS ES TABLISHED THE IDENTITY OF THE SHARE HOLDER IN THAT CASE THE AMOUNT OF SHARE PREMIUM IS NOT AN ISSUE. IF THE ASSESSING OFFICER HAS NOT SATISFIED WITH THE EXPLANATION OF THE SHARE APPLICANT, NECESSARY ADDITION IS TO BE MADE IN THE HAND OF THE SHARE APPLICANT BUT NOT IN THE CASE OF THE ASSESSEE. THAT AS REGARD THE BLANK TRANSFER DEED DULY SIGNED BY THE SHARE APPLICANT AS FOUND DURING THE COURSE OF SURVEY. THE ASSESSING OFFICER HIMSELF AFTER BEING SATISFIED NOT TAKING ANY COGNIZANCE FOR THE SAME. SINCE, BY THE TIME OF ASSESSMENT PROCEEDING THESE TRANSFER DEED WAS NOT USED BY THE ASSESSEE AND THER EFORE AFTER THE DATE OF ANNUAL GENERAL MEETING , OLD DATE TRANSFER DEED HAS NO LEG AL VALUE. GROUND NO 2 OF DEPARTMENTS APPEAL THE DEPARTMENT IN THIS GROUND OF APPEAL HAS CHALLE NGED THE RULE 46A OF THE INCOME TAX RULES. THAT DURING THE COURSE OF HEARING ALSO THEY HAVE F AILED TO PIN POINT ABOUT THE ADDITIONAL EVIDENCE FILED BEFORE THE LD CIT[A]. SIN CE, ALL THE DOCUMENTS AS REFERRED BY THE LD CIT[A] HAS ALREADY BEEN FILED BEFORE THE LD ASSESSING OFFICER. THAT IN VIEW OF THE ABOVE, THE PRESENT GROUND OF AP PEAL AS TAKEN BY THE DEPARTMENT IS FACTUALLY NOT CORRECT. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 44 1.7 WE HAVE HEARD RIVAL CONTENTIONS OF BOTH PARTIES . LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE PARTIES, THE ADMITTED FACT S IN THIS CASE ARE AS UNDER: THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS RE CEIVED SHARE APPLICATION MONEY OF RS 47900000/- FROM THE FOLLOWI NG PARTIES:- S.NO NAME OF THE COMPANY ADDRESS PAN NO AMOUNT (RS) 1. MIHIR AGENCIES PVT. LTD BLOCK-H SHRI SADASHIV C HS LTD, 6 TH ROAD SHANTACRUZ (E) MUMBAI -400055 AABCH7898H 20,00,000 2. SUMUKH COMMERCIAL PVT LIMITED (FORMERLY KNOWN AS CAPE TOWN MERCANTILE CO. PVT LIMITED ) CHAMBER NO.06, BIG THREE BUILDING, 1 ST MARINE STREET MUMBAI-400002 AACCC7400M 10,00,000 3. BUNIYAD CHEMICAL LIMITED BLOCK-H, SHRI SADASHIV CHS LIMITED 6 TH ROAD SHANTACRUZ (E) MUMBAI -400055 AABCB6954G 20,00,000 4. LUXER PROPERTIES PVT. LIMITED C-104, RAHUL APT., S.V ROAD, ANDHERI (W) MUMBAI -400058 AAACL1462A 20,00,000 5. SURESH RATHOD CONSULTANTS P LIMITED 312,KALBADEVI ROAD, IIIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAFCS5844Q 25,00,000 6. ELDERADO PROPERTIES P LIMITED 312,KALBADEVI ROAD, IIIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAACE1957F 10,00,000 7. ECRO ARTISANS P LIMITED 312,KALBADEVI ROAD, IIIR D FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAACE8119M 15,00,000 8. PURSUIT SECURITIES LIMITED 312,KALBADEVI ROAD, I IIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI AAACP3800E 22,00,000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 45 MUMBAI 9. TRIBHUVAN HOUSING LIMITED 23,JALARAM SOCIETY CHAMUNDA CIRCLE BORIWALI (W) MUMBAI - 40001 AAACT7299M 10,00,000 10. MILLENIUM CYBERTECH LIMITED 38,GANGA VIAHAR,3 RD FLOOR ROKANDIA LANE BORIVALIE,(W) MUMABAI-400092 AABCMB8712D 10,00,000 11. WINFOTECH SYSTEMS P LIMITED 312,KALBADEVI ROAD, IIIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAACW3541K 30,00,000 12. ACUMEN PAPER BINDER PVT.LTD. 109,VAKIL CHAMBER, GALI NO.1, SHAKARPUR, DELHI AAACA2172J 20,00,000 13. BHAGIRATHI INDUSTRIES LTD. 201,MALHOTRA COMPLEX 2ND FLOOR, CHAWLA GALI, SHAKARPUR,DELHI AAACB2254N 20,00,000 14. HAPPENING MOTORS PVT.LTD. S-205,KANISHKA COMPLEX, SAINI ENCLAVE DELHI AAACH4607F 20,00,000 15. STARVISION MEDIA P LIMITED D-25A, FIRST FLOOR, LAXMI NAGAR, DELHI AAKCS8003N 20,00,000 16. STARTRANS LOGISTICS PVT. LTD. S-205,KANISHKA COMPLEX, SAINI ENCLAVE DELHI AAJCS0491H 20,00,000 17. SAYAM SHARES & SECURITIES PVT.LTD. 201,MALHOTRA COMPLEX 2ND FLOOR, CHAWLA GALI, SHAKARPUR, DELHI AALCS9567N 20,00,000 18. SHREE BALAJI SAINATH BUILDERS PVT.LTD. B-1058, SHASTRI NAGAR, KAROL BAGH, NEW DELHI AAJCS7086E 15,00,000 19. SURBHI NETWORKING & BROADCASTING PVT.LTD.(FORMALLY KNOWN AS R.J. FABTEX PVT.LTD.) A-115, GROUND FLOOR, VAKIL CHAMBER, SHAKARPUR, DELHI AADCR3947D 40,00,000 20. UNIWORD BARTERCARD P LIMITED D-25A, FIRST FLOOR, LAXMI NAGAR, DELHI AAACU9640D 9,00,000 21 ACIL COTTON INDUSTRIES PVT LIMITED (FORMARLY KNOWN AS ADESHWAR 87/404, NATRAJ TOWNSHIP PART-2 PARSURAM NAGAR, SOCIETY ROAD AABCA7788F 10,00,000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 46 COTTON INDUSTRIES LIMITED ) SAYAJI GANJ VADODADRA -39005 22 ALPHA GRAPHIC INDIA LIMITED B7/403, NATRAJ TOWNSHIP PART- 2 PARSURAM NAGAR, SOCIETY ROAD SAYAJI GANJ VADODADRA - 39005 AABCA8299H 5,00,000 23 MANGAL MURTI INFRAREAL P LIMITED 241,APOLLO TOWER, M.G.ROAD INDORE AAACC6705H 10,00,000 24 NAMAN EQUIPMENTS AND CONSTRUCTIONS (INDIA ) PVT LIMITED FORMARLY KNOWN AS HOUSING FINANCE LIMITED 115, DIAMOND TRADE CENTRE, NEW PALASIA INDORE AABCM1733A 5,00,000 25. KINESCOPE INDIA PVT LIMITED SHOP NO.220, LABH CHAMBERS, STATION ROAD AURANGABAD M.S. AABCK0527E 15,00,000 26 VOLPLAST LIMITED 5/856,KAMLA APT. SECOND FLOOR , GHASHERI SURAT-395009 AABCV8410D 23,00,000 27 GALAXY DEVCOM PVT LIMITED GANESH BHAWAN, CHWADI BAZAAR GWALIOR AAECM8933D 25,00,000 28 NIMBUS STOCK INVEST LIMITED ( FORMALLY KNOWN AS ROLLEDGOLD INDUSTRIES LIMITED 207,AKANSHA TRADE CENTRE ,156 KANCHANBAGH INDORE AADCR4275J 15,00,000 47900000 THE ASSESSING OFFICERWANTED TO VERIFY THE SHARE PRE MIUM AMOUNT RECEIVED BY THE ASSESSEE ARE BY WAY OF SHARE PREMIUM EARNED FROM THE ABOVE COMPANIES. THE ASSESSEE CO. HAD ISSUED 47900 EQUITY SHARES OF 10 EACH AT PREMIUM OF 990 AGGREGATING TO 1000 PER SHARE, TH US, THE ASSESSEE HAS RECEIVED THE SHARE CAPITAL AND SHARE PREMIUM AT RS. 4.79 CRORES.THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 47 ASSESSING OFFICER WANTED TO VERIFY THE IDENTITY, GE NUINENESS AND CREDITWORTHINESS OF THE CREDITORS U/S 68 OF THE I.T . ACT. THE ASSESSEE HAS FILED THE RETURN OF INCOME PRIOR TO DATE OF SURVEY AND WHEREIN THE ASSESSEE CO. HAS DECLARING THE TOTAL INCOME OF RS.9835850 ON 3.9.2009. THERE WAS INCOME-TAX SURVEY EXECUTED AT BUSINESS PR EMISES OF THE ASSESSEE ON 8.10.2009. DURING THE COURSE OF SURVEY PROCEEDINGS, ONE OF THE DIRECTORS MR. RAJESH JAIN STATEMENT WAS RECORDE D WHEREIN HE AGREED TO PAY THE TAX ON AMOUNT OF SHARE APPLICATION MONEY RE CEIVED BY ASSESSEE CO. DURING THE YEAR UNDER CONSIDERATION. THE ASSESS EE STATED THAT ASSESSEE WILL FILE THE REVISED RETURN AND HE WILL I NCORPORATE ADDITIONAL INCOME DURING THE COURSE OF SURVEY. WE FIND FROM TH E RECORD THAT ASSESSEE HAS NOT FILED THE REVISED INCOME BUT ASSESSEE HAS R ETRACTED FROM THE STATEMENT AND ON THE IMMEDIATE RETRACTION OF THE AS SESSEE CO., THE LD. ASSESSING OFFICER ON THE BASIS OF STATEMENT AND ON THE BASIS OF THE STATEMENT RECORDED BY THE INVESTIGATION WING IN RES PECT OF VARIOUS COMPANIES RECORDED BY INVESTIGATION WING AT CALCUTT A, MUMBAI, DELHI, BARODA AND INDORE. WE FIND FROM THE ASSESSMENT ORDE R THAT THE ASSESSING OFFICER HAS RELIED UPON VARIOUS DECISIONS IN HIS AS SESSMENT ORDER WHICH PERTAIN TO THE ADMISSION MADE BY THE ASSESSEE UNDER THE STATEMENT RECORDED U/S 132(4) OF THE I.T. ACT. THE ASSESSING OFFICER HAS NOT CITED ANY ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 48 DECISION WITH RESPECT TO THE STATEMENT RECORDED DUR ING THE COURSE OF SURVEY. WE FIND THAT THERE ARE AMPLE JUDGMENTS IN R ESPECT OF THE SURVEY CONFESSION AND IN FOLLOWING CASES, IT WAS HELD THAT NO ADDITION CAN BE MADE MERELY ON THE BASIS OF THE INCOME AS DECLARED DURIN G THE COURSE OF SURVEY. WE GET THE SUPPORT FROM FOLLOWING DECISIONS: HONBLE CHATTISGARH HIGH COURT IN THE CASE OF ITO V S VIJAY KUMAR KESAR REPORTED IN 327 ITR 497 HAS HELD THAT C ONFESSION MADE BY THE ASSESSEE DURING SURVEY PROCEEDINGS IS N OT CONCLUSIVE AND IT IS OPEN TO THE ASSESSEE TO ESTABL ISH THAT THE SAME WAS NOT TRUE AND CORRECT BY FILING THE COGENT EVIDENCE. HONBLE MADRAS HIGH COURT IN THE CASE OF M NARAYANA N & BROS VS ACIT REPORTED IN 339 ITR 192 HAS HELD THAT EVEN IN THE CASE OF STATEMENT AS RECORDED DURING THE COURSE OF SEARC H AS RECORDED U/S 132(4) OF THE INCOME TAX ACT - THAT ON CE THE ASSESSEE HAD EXPLAINED HIS STATEMENT AS INCORRECT I N THE CONTEXT OF THE MATERIAL PRODUCED BY HIM, THE TRIBUN AL WAS NOT JUSTIFIED IN ITS CONCLUSION THAT THE STATEMENT MADE BY THE ASSESSEE CLOTHED THE ASSESSMENT WITH LEGALITY. HONBLE KERALA HGH COURT IN THE CASE OF PAUL MATHEW S & SONS VS CIT AS REPORTED IN 263 ITR 101 HAS HELD IN PARA 11 HAS HELD:- 11..... SECTION 133A(3)(III) ENABLES THE AUTHORITY TO RECORD THE STATEMENT OF ANY PERSON WHICH MAY BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THE ACT. SECTION 133A HOWEVER, ENABLES ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 49 THE IT AUTHORITY ONLY TO RECORD ANY STATEMENT OF AN Y PERSON WHICH MAY BE USEFUL, BUT DOES NOT AUTHORIZE FOR TAK ING ANY SWORN IN STATEMENT. ON THE OTHER HAND, WE FIND THAT SUCH A POWER TO EXAMINE A PERSON ON OATH IS SPECIFICALLY C ONFERRED ON THE AUTHORISED OFFICER ONLY UNDER SECTION 132(4) OF THE IT ACT IN THE COURSE OF ANY SEARCH OR SEIZURE. THUS, THE IT ACT , WHENEVER IT THOUGHT FIT AND NECESSARY TO CONFER SUCH POWER T O EXAMINE A PERSON ON OATH, THE SAME HAS BEEN EXPRESSLY PROVIDE D WHEREAS SECTION 133A DOES NOT EMPOWER ANY ITO TO EXAMINE ANY PERSON ON OATH. THUS, IN CONTRA-DISTINCTION TO THE POWER UNDER SECTION 133A , SECTION 132(4) OF THE IT ACT ENABLES THE AUTHORISED OFFICER TO EXAMINE A PERSON ON OATH AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATI ON CAN ALSO BE USED IN EVIDENCE UNDER THE IT ACT . ON THE OTHER HAND, WHATEVER STATEMENT RECORDED UNDER SECTION 133A OF THE IT ACT IS NOT GIVEN ANY EVIDENTIARY VALUE OBVIOUSLY FOR TH E REASON THAT THE OFFICER IS NOT AUTHORISED TO ADMINISTER OATH AN D TO TAKE ANY SWORN IN STATEMENT WHICH ALONE HAS THE EVIDENTIARY VALUE AS CONTEMPLATED UNDER LAW. THEREFORE, THERE IS MUCH FO RCE IN THE ARGUMENT OF THE LEARNED COUNSEL FOR THE APPELLANT T HAT THE STATEMENT, ELICITED DURING THE SURVEY OPERATION HAS NO EVIDENTIARY VALUE AND THE ITO WAS WELL AWARE OF THI S. FROM THE JUDICIAL PRONOUNCEMENTS REPORTED AT PAUL M ATHEWS & SONS 263 ITR 10 1 (KER); ASHOK MANILAL THAKKAR 279 ITR ( AT) 143 (AHM), MUKUND V. KAPADIA 82 ITD 489 (MUM.), HYUNDAI ENGINE ERING CO. LTD ITA NO. 3006/D/2003' (DEL) IT IS CLEAR THAT INCOME TAX AUTHORITIES HAVE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 50 NO JURISDICTION TO RECORD SWORN STATEMENT U/S, 133A OF THE ACT DURING THE COURSE OF SURVEY. SINCE THE AUTHORITY HAD NO JU RISDICTION TO ADMINISTER OATH AND RECORD SWAM STATEMENT SO STATEM ENT U/S, 133A(3) IN THE ABSENCE OF ANY SUPPORTING MATERIAL H AS NO EVIDENTIARY VALUE AND COULD BE SAID TO BE USEFUL OR RELEVANT TO ASSESSMENT PROCEEDINGS ONLY WHEN THERE WAS MATERIAL ON RECORD TO PROVE THE BASIS ON WHICH DISCLOSURE WAS STATED TO BE MADE. TH US, IT COULD NOT BE SAID SOLELY ON THE BASIS OF STATEMENT DURING SUR VEY AND WITHOUT ANY SUPPORTING MATERIAL ANY INCOME WAS ASSESSABLE A S LAWFUL INCOME. THE AFORESAID TRITE LAW IS ALSO REITERATED BY CBDT AT CBDT CIRCULAR NO. F.NO.286/2/2003-IT (INV.II) DATED 10TH MARCH 2003 IN THE FOLLOWING WORDS 'INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHE RE ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE SEA RCH AND SEIZURE AND SURVEY OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEE WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, CONFESSIONS DURING THE COURSE OF SEA RCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEF UL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCU S AND CONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME, WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 51 BE DISCLOSED BEFORE THE INCOME-TAX DEPARTMENT. SIMI LARLY, WHILE RECORDING STATEMENTS DURING THE COURSE OF SEARCH AN D SEIZURE AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSIONS AS TO THE UNDISCLOSED INCOME. ANY ACTIO N ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FROM THE ABOVE, DECISIONS OF HONBLE VARIOUS HIGH C OURTS, WE ARE OF THE VIEW THAT AS PER THE KERALA HIGH COURT, THE SURVEY PARTY IS ENTITLED TO RECORD THE STATEMENT OF ANY PERSON, MAY BE USEFUL FOR RELE VANT TO ANY PROCEEDINGS UNDER THE ACT. WE ALSO FIND SUPPORT FROM THE HONBL E CHHATISGARH HIGH COURT WHEREIN IT IS HELD THAT ASSESSEE DURING THE S URVEY PROCEEDINGS, ANY CONFESSION MADE BY HIM IS NOT CONCLUSIVE AND IT IS OPEN THE ASSESSEE TO ESTABLISH THAT SAME WAS NOT TRUE AND CORRECT BY FIL ING COGENT EVIDENCE. WE FIND THAT IN THIS CASE, THE ASSESSEE HAS GIVEN THE STATEMENT ONLY BUT AFTER THE STATEMENT, ASSESSEE HAS RETRACTED FROM THE STAT EMENT, THEREFORE, HE HAS NOT FILED THE REVISED RETURN, THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE IS JUSTIFIED IN NOT FILING REVISED RETURN AND WE ARE DECIDING THE APPEAL ON MERIT. THE LD CIT DR DURING THE COURSE OF HEARING BEFORE T HE HONBLE BENCH PLACED RELIANCE ON THE STATEMENT OF THE ASSESSEE AS RECORDED DURING THE COURSE OF ASSESSMENT AND ALSO REFERRED THE FOLLOWIN G DECISIONS:- ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 52 S.NO REFERENCE OF DECISION CITATION OF DECISION 1 ZIKRULLAH CHAUDHARY ITA NO 669/PN/2012 DT 18-02-2 014 2 MAHESH B SHAH VS ACIT 103 TAXMAN 91[ KER] 3 WESTERN AUTOMOBILES (INDIA) VS CIT 112ITR 1048 [ BOM] PUNE BENCH OF ITAT IN THE CASE OF ZIKRULLAH CHAUDHA RY [ APPEAL NO ITA NO 669/PN/ 2012 DT 18-02-2014] , A SEARCH U/ S 132 OF THE ACT WAS EXECUTED ON 24-10-2007. THAT NO SURREND ERED WAS MADE IN SEARCH PROCEEDING. HOWEVER, THE ASSESSEE DU RING THE COURSE OF ASSESSMENT PROCEEDING SURRENDERED LONG TE RM CAPITAL GAIN AS HIS ADDITIONAL INCOME AND DISPUTED THE SAME IN APPEAL. IN THE PRESENT CASE THE ASSESSEE BY NOT FILING THE REVISED RETURN OF TOTAL INCOME IMMEDIATELY RETRACTED FROM HIS STAT EMENT AND THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDING MAKE DETAILED INQUIRY. HENCE, THE FACT OF THAT CASE IS NOT APPLICABLE WITH THE FACT OF THE PRESENT CASE OF THE ASSESSEE. KERALA HIGH COURT IN THE CASE OF MAHESH B SHAH VS ACIT AS REPORTED IN 103 TAXMAN 91 HAS OBSERVED THAT THE ASS ESSEE HIMSELF DURING THE COURSE OF ASSESSMENT PROCEEDING ACCEPTED THE CONTRIBUTIONS TO THE STOCK EXCHANGE BUILDING FU NDS AS CAPITAL IN NATURE EVEN WHEN THE SAME WAS ORIGINALLY CLAIMED AS REVENUE EXPENDITURE. THE ASSESSEE AGAIN CLAIMED THE SAME AS REVENUE EXPENDITURE IN REVISION PROCEEDING. THE SAI D CLAIM OF THE ASSESSEE WAS NOT ACCEPTED. IN THE PRESENT CASE THE ASSESSEE NEVER ACCEPTED THE AMOUNT OF SHARE APPLICA TION MONEY AS ITS INCOME DURING THE COURSE OF ASSESSMENT ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 53 PROCEEDING. HENCE, FACT OF THAT DECISION AS RELIED BY THE LD CIT DR IS ALSO DISTINGUISHABLE ON THE FACT OF THE PRESE NT CASE OF THE ASSESSEE. HIGH COURT OF BOMBAY IN THE CASE OF WESTERN AUTOMO BILES (INDIA) V CIT AS REPORTED IN 112 ITR 1048 HAS MAINT AIN THE PENALTY ON THE BASIS OF INCOME ACCEPTED BY THE ASSE SSEE DURING THE COURSE OF ASSESSMENT PROCEEDING AND NOT AVAIL THE OPPORTUNITY TO EXPLAIN THE SAME IN PENALTY PROCEEDI NG.IN THE PRESENT CASE IN HAND THE ASSESSEE HAS AVAILED THE O PPORTUNITY TO EXPLAIN THE AMOUNT OF SHARE APPLICATION MONEY A S RECEIVED BY IT WITH THE AMPLE DOCUMENTS. HENCE, ON THE CONTR ARY THE SAID DECISION SUPPORT THE CONTENTION OF THE ASSESSEE. LD. CIT(A) VIDE ORDER DT 22-03-2013 IN PARA 5.6 ON INNER PAGE NO 10 OF THE APPELLATE ORDER HAS DEALT WITH THE SAID ISSUE IN DE TAIL AND UPHOLD THE CONTENTION OF THE ASSESSEE. THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING T HE AMOUNT OF SHARE APPLICATION MONEY TO THE INCOME OF THE ASSESSEE MER ELY ON THE BASIS OF STATEMENT OF AS RECORDED DURING THE COURSE OF SURVE Y EVEN WHEN THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON IT B Y FURNISHING THE AMPLE DOCUMENTS AS TO JUSTIFY THE IDENTITY, GENUINENESS A ND CREDITWORTHINESS OF THE SHARE HOLDERS. THAT IT IS SETTLED POSITION OF L AW, IN THE CASE OF SHARE APPLICATION MONEY/ SHARE CAPITAL, THE ASSESSEE HAS TO PROVE THE IDENTITY OF THE SHARE HOLDERS ONLY. THE DECISIONS AS REFERRED IN THE ASSESSMENT ORDER ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE . THE DECISION OF THE HONBLE CHATTISGARH HIGH COURT IN THE CASE OF ITO V S VIJAY KUMAR KESAR ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 54 REPORTED IN 327 ITR 497 HAS HELD THAT CONFESSION MA DE BY THE ASSESSEE DURING SURVEY PROCEEDINGS IS NOT CONCLUSIVE AND IT IS OPEN TO THE ASSESSEE TO ESTABLISH THAT THE SAME WAS NOT TRUE AND CORRECT BY FILING THE COGENT EVIDENCE. HONBLE HIGH COURT ALSO REFERRED THE DECI SION AS RELIED BY THE ASSESSING OFFICER IN THE CASE OF DR S C GUPTA VS CI T. ACCORDINGLY, ADDITION MADE ON THE BASIS OF STATEMENT OF DIRECTOR OF THE A SSESSEE COMPANY AS RECORDED DURING THE COURSE OF SURVEY IS NOT BINDING AND CANNOT BE SOLE BASIS OF ADDITION TO THE INCOME OF THE ASSESSEE. ON MERIT, THE ASSESSING OFFICER HAS ON PAGE 10 & 12 OF THE ASSESSMENT ORDER, HAS DISCUSSED THE FACTUAL PART OF ALL THE CO MPANIES FROM WHOM THE SHARE APPLICATION WAS RECEIVED BY THE ASSESSEE. OUT OF 28 COMPANIES, THE NOTICE WAS NOT SERVED TO TEN COMPANIES. IN RESPECT OF 12 COMPANIES, THE NOTICES WERE SERVED BUT THE REPLY WAS NOT RECEIVED. IN RESPECT OF REMAINING COMPANIES, THE REPLY WAS RECEIVED. THE ASSESSING OFFICER LATER-ON ISSUED COMMISSION TO THE MUMBAI, DELHI AND BARODA OFFICES ASKED TO INVESTIGATE THE GENUINENESS OF THE SHARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE EVEN WHEN IN MOST OF THE CASES LETTER ISSUED U/S 133(6) WAS ISSUED BY THE AO AND THE SAME WAS DULY SERVED UPON THEM. THAT REPORT FROM ALL THE OFF ICES WERE RECEIVED AND DULY CONFRONTED TO THE ASSESSEE. THAT FEW OF THE SH ARE HOLDERS WERE APPEARED BEFORE THE ASSESSING OFFICER AND SUBMITTED THEIR REPLY IN DETAILED. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 55 HOWEVER, THE ASSESSING OFFICER ADDED THE ENTIRE AMO UNT OF SHARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE AS IT S INCOME. THE ASSESSEE HAS ALSO DECLARED INTERIM DIVIDEND AND FINAL DIVIDEND, DETAIL OF THE SAME IS AS UNDER:- S.NO INTERIM/ FINAL DIVIDEND DATE OF DECLARATION % OF DIVIDEND 1 INTERIM DIVIDEND 03.11.2009 12.50 2 FINAL DIVIDEND 25.10.2010 17.50 THE ASSESSEE IN ADDITION TO THE DIVIDEND, THE ASSES SEE COMPANY ALSO DECLARED BONUS SHARES ON DATED 30 TH MARCH2012 IN THE RATIO OF 1:10 I.E ONE SHARE FOR EVERY 10 SHARES HELD BY THE SHARE HOLDERS . COPY OF RETURN OF ALLOTMENT AS FILED WITH THE REGISTRAR OF COMPANIES FOR ALLOTMENT OF BONUS SHARE IS ALSO ENCLOSED FOR YOUR READY REFERENCE. IN THE CASE OF THE ABOVE ASSESSEE FOLLOWING FACTS W ERE DULY ACCEPTED BY THE ASSESSING OFFICER AND THESE FACTS ARE NOT IN DI SPUTE:- S.NO FACTS OF THE CASE NOT IN DISPUTE BY THE AO 1 THE AMOUNT OF SHARE APPLICATION MONEY WERE RECEIV ED THROUGH AN ACCOUNT PAYEE CHEQUES 2 PAN NO IN RESPECT OF ALL THE SHARE HOLDERS HAVE B EEN PROVIDED 3 COPY OF BANK STATEMENT OF ALL THE SHAREHOLDERS HA VE BEEN PROVIDED 4 COPY OF BALANCE SHEET OF THE SHARE HOLDERS COMPAN Y ALSO BEEN PROVIDED AS FAR AS POSSIBLE 5 COPY OF AFFIDAVIT AS SIGNED BY THE DIRECTOR HAS A LSO BEEN PROVIDED 6 MEMORANDUM AND ARTICLE OF ASSOCIATION HAS ALSO BE EN PROVIDED ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 56 7 DETAIL AS FURNISHED BY THE ASSESSEE WAS FOUND COR RECT AND PROPER. THE DOCUMENTS AS FILED BY THE ASSESSEE NOT FOUND WRONG OR FABRICATED. 8 THE SHARE OF THE ASSESSEE COMPANY STILL LYING IN POSSESSION OF THESE SHARE HOLDER 9 DIVIDEND WAS DECLARED AND DULY CREDITED IN THE BA NK ACCOUNT OF THE SHARE HOLDERS AND DEBITED IN THE BANK ACCOUNT OF THE ASSE SSEE COMPANY 10 1(ONE) BONUS SHARES WERE ALLOTTED TO THE SHARE H OLDERS HAVING 10( TEN) SHARES OF THE ASSESSEE COMPANY THE ASSESSING OFFICER IN THE CASE OF FOLLOWING SEVE N COMPANIES, THE AMOUNT OF SHARE APPLICATION MONEY WAS ADDED TO THE INCOME OF THE ASSESSEE BASED ON THE REPORT OF THE INVESTIGATION W ING OF THE MUMBAI:- S.NO NAME OF THE COMPANY AMOUNT (RS) 1 WINFOTECH SYSTEMS P LIMITED 3000000 2 LUXER PROPERTIES P LIMITED 1500000 3 SURESH RATHOD CONSULTANTS P LIMITED 2500000 4 ELDERADD PROPERTIES P LIMITED 1000000 5 ECRO ARTISONS P LIMITED 1500000 6 MIHIR AGENCIES P LIMITED 2000000 7 BUNIYAD CHEMICALS LIMITED 2000000 13500000 THE LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX A CT WAS DULY SERVED UPON THE ABOVE COMPANIES. REPLY TO THE SAID LETTER WAS ALSO RECEIVED WHEREIN IT WAS POINTED OUT THAT DUE TO SEARCH IN TH EIR PREMISES, ENTIRE RECORD OF THE INVESTOR COMPANIES WERE LYING WITH TH E INCOME TAX DEPARTMENT. THAT REPLY AS FILED IN RESPONSE TO THE LETTER ISSUED U/S 133(6) OF THE INCOME TAX ACT AND ALSO FROM SEARCH ACTION OF T HE INCOME TAX DEPARTMENT, THE IDENTITY OF THE SHARE HOLDERS COMPA NY STAND PROVED. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 57 THE REPORT AS RECEIVED IN RESPONSE TO THE COMMISSIO N DT 12-09-2011 FROM THE INVESTIGATION WING OF THE MUMBAI WAS DEFECTIVE AND NOT PROPER. THE AO ISSUED COMMISSION ON 12-09-2011. HOWEVER, NO FRESH INQUIRY WAS MADE BY THE INVESTIGATION WING BUT SIMPLY ON THE BASIS OF I NFORMATION AVAILABLE IN THEIR POSSESSION, REPORT WAS PREPARED AND SUBMITTED TO THE ASSESSING OFFICER. STATEMENT OF SHRI KAMAL KISHORE RATHI AS R ECORDED ON 22-10-2010 MAINLY IN RESPECT OF LONG TERM CAPITAL GAIN, STATEM ENT OF SHRI MUKESH CHOKSI AS RECORDED ON 25-11-2009, ON 11-12-2009 AND ON 03-02-2010 AND STATEMENT OF SHRI JAYESH SAMPAT AS RECORDED ON 14-0 5-2010 WERE REFERRED IN THE REPORT AS SUBMITTED BY THE AO. THAT IN ALL T HEIR STATEMENT NAME OF THE ASSESSEE COMPANY WAS NOT REFERRED. IN THE CASE OF T HE ASSESSEE, AFFIDAVIT FROM ALL THE ABOVE COMPANIES WERE TAKEN EVEN AFTER THE DATE OF STATEMENT AS REFERRED BY THE INVESTIGATION WING:- S.NO NAME OF THE COMPANIES NAME OF THE DIRECTOR DATE OF AFFIDAVIT 1 WINFOTECH SYSTEMS P LIMITED MANISH RATHI 24-08-2 011 2 LUXER PROPERTIES P LIMITED MANISH RATHI 24-08-20 11 3 SURESH RATHOD CONSULTANTS P LIMITED MANISH RATHI 24-08-2011 4 ELDERADD PROPERTIES P LIMITED MANISH RATHI 24-08- 2011 5 ECRO ARTISONS P LIMITED MANISH RATHI 24-08-2011 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 58 6 MIHIR AGENCIES P LIMITED JAYESH SAMPAT 16-08-201 1 7 BUNIYAD CHEMICAL LIMITED JAYESH SAMPAT 16-08-201 1 IN VIEW OF THE ABOVE, THE ADDITION OF RS 13500000/- MADE TO THE INCOME OF THE ASSESSEE IN RESPECT OF SEVEN COMPANIES OF MUMBA I WITHOUT MAKING ANY INDEPENDENT INQUIRY WAS WRONG, THEREFORE, LD. C IT(A) HAS DELETED THE ADDITION. THE ASSESSING OFFICER HAS ADDED AN AMOUNT OF RS 18 400000/- TO THE INCOME OF THE ASSESSEE IN RESPECT OF AMOUNT RECEIVE D FROM THE FOLLOWING COMPANIES:- S.NO NAME OF THE COMPANY PAN NO AMOUNT 1 ACUMEN PAPER BINDER PVT.LTD. AAACA2172J 2000000 2 BHAGIRATHI INDUSTRIES LTD. AAACB2254N 2000000 3 HAPPENING MOTORS PVT.LTD. AAACH4607F 2000000 4 STARVISION MEDIA PVT.LTD. AAKCS8003N 2000000 5 STARTRANS LOGISTICS PVT. LTD. AAJCS0491H 2000000 6 SAYAM SHARES & SECURITIES PVT.LTD. AALCS9567N 200 0000 7 SHREE BALAJI SAINATH BUILDERS PVT.LTD. AAJCS7086E 1500000 8 SURBHI NETWORKING & BROADCASTING PVT.LTD.(FORMALLY KNOWN AS R.J. FABTEX PVT.LTD.) AADCR3947D 4000000 9 UNIWORD BARTERCARD PVT.LTD. AAACU9640D 900000 18400000 IN CASE OF ABOVE COMPANIES IN MOST OF THE CASES LET TER AS ISSUED U/S 133(6) OF THE INCOME TAX ACT WAS SERVED TO THESE CO MPANIES, REPLIES WERE ALSO RECEIVED BY THE ASSESSING OFFICER DIRECTLY EIT HER IN RECEIPT OF THE LETTER ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 59 U/S 133(6) OF THE INCOME TAX ACT OR ON REQUEST OF T HE ASSESSEE. HOWEVER, THE ASSESSING OFFICER ISSUED COMMISSION TO THE INVE STIGATION WING, DELHI. THAT INSPECTOR OF WING VISITED TO SERVE SUMMON TO T HESE COMPANIES, SUMMON TO BHAGIRATHI INDUSTRIES LIMITED AND SAYAM S HARES & SECURITIES P LIMITED WERE SERVED AND STATEMENT OF DIRECTORS OF B OTH THE COMPANIES WERE RECORDED. HOWEVER, COPY OF THE SAID STATEMENT WAS N OT PROVIDED TO THE ASSESSEE. IT WAS INFORMED BY THE DIRECTORS OF THESE COMPANIES THAT THEY HAVE PERSONALLY APPEARED BEFORE THE AUTHORIZED OFFI CER AND CATEGORICALLY ACCEPTED ABOUT THE INVESTMENT MADE BY THEM IN THE S HARE CAPITAL OF THE ASSESSEE COMPANY. THE ASSESSING OFFICER HIMSELF ON INNER PAGE NO 15 OF THE ORDER HAS STATED THAT SHRI ARUN JAIN DIRECTOR O F M/S SAYAM SECURITIES LIMITED WAS PERSONALLY APPEARED BEFORE THE AUTHORIS ED OFFICER AND ACCEPTED ABOUT THE INVESTMENT MADE IN THE SHARES OF THE ASSESSEE COMPANY. THE ASSESSEE IN ITS REPLY AS REPRODUCED ON INNER PAGE NO 18OF THE ASSESSMENT ORDER IN PARA 2.1.1 HAS STATED THAT DIRECTOR OF M/S BHAGIRATHI INDUSTRIES LIMITED AND M/S SAYAM SHARES & SECURITES P LIMITED WERE APPEARED TO WHICH THE ASSESSING OFFICER HIMSEL F HAS NOT DISPUTED. THE INSPECTOR IN HIS REPORT HAS SUBMITTED THAT OTHE R SEVEN COMPANIES WERENOT FOUND ON THE ADDRESSES AS PROVIDED BY THE A SSESSEE. THE SAID FACTUAL FINDING OF THE INSPECTOR WAS NOT CORRECT. T HAT WHEN LETTER WAS ISSUED ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 60 BY THE ASSESSING OFFICER U/S 133(6) OF THE INCOME T AX ACT, THE SAID LETTER WAS DULY SERVED BUT INSPECTOR HAS SUBMITTED HIS NEG ATIVE REPORT WHICH IS CONTRARY TO THE FACTS OF THE PRESENT CASE. HOWEVER, THE ASSESSING OFFICER ACTED ON THE REPORT AS SUBMITTED BY THE INVESTIGATI ON WING OF THE DELHI AND ADDED THE ENTIRE AMOUNT OF SHARE CAPITAL AS RECEIVE D FROM ALL THE NINE COMPANIES OF DELHI AS NON- GENUINE. ON PERUSAL OF THE INSPECTOR REPORT, IT IS NOTICED T HAT THE SAID SUMMON WAS NOT AFFIXED ON THE GIVEN PREMISES. SIGNATURE AND AD DRESS OF TWO INDEPENDENT WITNESSES AS REQUIRED WAS ALSO NOT OBTA INED. THE LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX ACT WAS DULY SE RVED ON THESE SHAREHOLDERS. REPLIES FROM THESE SHAREHOLDERS HAVE ALSO BEEN RECEIVED DIRECTLY IN THE OFFICE OF THE ASSESSING OFFICER. TH US, PROBABLY AT THE TIME OF VISIT OF THE INSPECTOR, MAY BE THE AUTHORIZED PERSO N OF THESE COMPANIES MAY NOT FOUND AVAILABLE ON THE GIVEN ADDRESS. THAT AS FAR AS SIGN BOARD IS CONCERNED. IN THIS RESPECT IT IS CLARIFIED THAT MOS T OF THESE COMPANIES BEING THE FINANCE AND INVESTMENT COMPANIES DEAL WITH THE CLOSE AND ASSOCIATE PERSONS AND NOT WITH THE GENERAL PUBLIC AT LARGE. F OR THIS REASON THEY NEED NOT REQUIRES TO DISPLAY THEIR SIGN BOARD ON THEIR P REMISES. + ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 61 THE ASSESSEE VIDE ITS LETTER DT 28-11-2011 HAS PROV IDED NEW CHANGED ADDRESS OF THE FOLLOWING TWO COMPANIES:- THE ASSESSEE HAS ALSO REQUESTED TO THE ASSESSING OF FICER TO PROVIDE COPY OF REPLY AS DIRECTLY RECEIVED FROM ALL THE SHARE AP PLICANTS BUT THE SAME WAS NOT PROVIDED. IT WAS INTIMATED BY THE MOST OF THE S HAREHOLDERS THAT THEY HAVE DIRECTLY FILE REPLY TO THE ASSESSING OFFICER. CA SHRI RAJIV BANSAL FROM DELHI APPEARED ON BEHALF OF THESE COMPANIES PERSONA LLY BEFORE THE ASSESSING OFFICER. HE HAS SUBMITTED ENTIRE PAPERS A S TO JUSTIFY THEINVESTMENT MADE BY THESE COMPANIES IN THE SHARE APPLICATION MONEY/ SHARE CAPITAL OF THE ASSESSEE COMPANY. DOCUMENTS AS FILED BY SHRI RAJIV BANSAL ARE ENCLOSED FOR YOUR KIND REFERENCE. THAT A UTHORITY LETTER IN FAVOUR OF SHRI BANSAL AS EXECUTED ON STAMP PAPER IS ALSO E NCLOSED WITH THESE DOCUMENTS. THAT FROM THE PERSONAL PRESENCE OF CA SH RI RAJIV BANSAL, THE IDENTITY OF THE SHARE HOLDER COMPANY STAND PROVED. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER WAS N OT CORRECT IN ADDING THE ENTIRE AMOUNT OF SHARE APPLICATION MONEY OF RS 18400000/- TO THE INCOME OF THE ASSESSEE BY IGNORING THE DETAILED SUBMISSIONS AND S.NO NAME OF THE COMPANY 1 M/S UNIWORD BARTER CARD P LIMITED 2 M/S STAR VISION MEDIA P LIMITED ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 62 DOCUMENTS AS FILED DURING THE COURSE OF THE ASSESSM ENT PROCEEDING , REPLY AS RECEIVED U/S 133(6) AND STATEMENT AS RECORDED U/ S 131 OF THE INCOME TAX ACT, THEREFORE, LD. CIT(A) HAS DELETED THE ADDI TION AND OUR INTERFERENCE IS NOT CALLED FOR. THE ASSESSING OFFICER ADDED AN AMOUNT OF RS 15,00 ,000/- TO THE INCOME OF THE ASSESSEE IN RESPECT OF THE FOLLOWING TWO COMPANIES ON THE BASIS OF REPORT AS RECEIVED FROM THE INVESTIGATION WING OF THE VADODARA:- S.NO NAME OF THE SHARE HOLDER AMOUNT (RS ) 1 ACIL COTTON INDUSTRIES P LTD [ FORMERLY KNOWN AS ADESHWAR COTTON INDUSTRIES LIMITED ] 10,00,000 2 ALPHA GRAPHIC INDIA LIMITED 5,00,000 15,00,000 THE LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX A CT WAS DULY SERVED UPON THE SHARE APPLICANT AND REPLY FOR THE SAME WAS ALSO FILED BY THE INVESTOR COMPANIES. THAT IN COMMISSION PROCEEDING B ALANCE SHEET AND ASSESSMENT DETAILS WERE OBTAINED AND PROVIDED BY TH E INVESTIGATION WING IN ITS REPORT. HENCE, IDENTITY OF BOTH THESE COMPANIES STAND PROVED. THAT IN THE REPORT AS RECEIVED FROM THE INVESTIGATION WING IT WAS POINTED OUT THAT THE INVESTMENT MADE IN THE ASSESSEE COMPANY WAS NOT SEPARATELY REFLECTED IN THE BALANCE SHEET. HOWEVER, ON PERUSAL OF THE AUDITED BALANCE SHEET IT WAS NOTICED THAT THE NAME OF THE ASSESSEE COMPANY WAS SEPARATELY REFLECTED IN THE AUDITED BALANCE SHEET O F M/S ALPHA GRAPHIC ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 63 INDIA LIMITED. HENCE, THE VERY BASIS OF ADDITION AS PROPOSED BY THE ASSESSING OFFICER WAS NOT CORRECT. THE ASSESSEE HAD FILED SUFFICIENT DOCUMENTS AS TO JUSTIFY THE AMOUNT OF SHARE APPLICA TION MONEY. HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDIT ION OF RS 15,00,000/- TO THE INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE, ADDITION OF RS 15,00,000/- MA DE TO THE INCOME OF THE ASSESSEE BY THE ASSESSING OFFICER MERELY ON THE BAS IS OF REPORT OF THE INVESTIGATION WING WAS NOT CORRECT BY IGNORING THE DOCUMENTS AS FIELD BY THE ASSESSEE. THE ASSESSING OFFICER IN THE CASE OF FOLLOWING COMP ANIES SIMPLY ADDED THE AMOUNT TO THE INCOME OF THE ASSESSEE EVEN WHEN THE ASSESSEE HAD FILED COMPLETE DETAILS AS TO JUSTIFY THE AMOUNT OF SHARE APPLICATION MONEY:- S.NO NAME OF THE COMPANY ADDRESS PAN NO AMOUNT (RS ) 1. SUMUKH COMMERCIAL PVT LIMITED (FORMERLY KNOWN AS CAPE TOWN MERCANTILE CO. PVT LIMITED ) CHAMBER NO.06, BIG THREE BUILDING, 1 ST MARINE STREET MUMBAI-400002 AACCC7400M 10,00,000 2. PURSUIT SECURITIES LIMITED 312,KALBADEVI ROAD, I IIRD FLOOR,ROOM NO.1, NEAR SWDESHI MARKET KALBA DEVI MUMBAI AAACP3800E 22,00,000 3 TRIBHUVAN HOUSING LIMITED 23,JALARAM SOCIETY CHA MUNDA CIRCLE BORIWALI (W) MUMBAI - 40001 AAACT7299M 10,00,000 4 MILLENIUM CYBERTECH LIMITED 38,GANGA VIAHAR,3 RD FLOOR ROKANDIA LANE BORIVALIE,(W) MUMABAI-400092 AABCMB8712D 10,00,000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 64 5 MANGAL MURTI INFRAREAL P LIMITED 241,APOLLO TOWER, M.G.ROAD INDORE AAACC6705H 10,00,000 6 NAMAN EQUIPMENTS AND CONSTRUCTIONS (INDIA ) PVT LIMITED FORMARLY KNOWN AS HOUSING FINANCE LIMITED 115, DIAMOND TRADE CENTRE, NEW PALASIA INDORE AABCM1733A 5,00,000 7 KINESCOPE INDIA PVT LIMITED SHOP NO.220, LABH CH AMBERS, STATION ROAD AURANGABAD M.S. AABCK0527E 15,00,000 8 VOLPLAST LIMITED 5/856,KAMLA APT. SECOND FLOOR , GHASHERI SURAT-395009 AABCV8410D 23,00,000 9 GALAXY DEVCOM PVT LIMITED GANESH BHAWAN, CHWADI BAZAAR GWALIOR AAECM8933D 25,00,000 10 NIMBUS STOCK INVEST LIMITED ( FORMALLY KNOWN AS ROLLEDGOLD INDUSTRIES LIMITED 207,AKANSHA TRADE CENTRE ,156 KANCHANBAGH INDORE AADCR4275J 15,00,000 1,45,00,000 THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DING FILED COMPLETE DETAIL AS TO JUSTIFY THE GENUINENESS OF THE SHARE A PPLICATION RECEIVED BY IT BY FILING AMPLE DOCUMENTS. THE ASSESSING OFFICER SIMPL Y REJECTED THE SUBMISSION OF THE ASSESSEE AND ADDED THE ENTIRE AMO UNT OF SHARE APPLICATION MONEY TO THE INCOME OF THE ASSESSEE WHI CH IN ANY CASE WAS NOT CORRECT. HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED AS REPORTED IN 11 ITJ 357 HAS HELD THAT:- '2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UN DISCLOSED INCOME UNDER S. 68 OFIT ACT, 1961? WE FIND NO MERIT IN THI S SPECIAL LEAVE PETITION FOR THE SIMPLE REASONTHAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGEDBOGUS SHAREHOLDERS, WH OSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TOPROC EED TO REOPEN THEIR ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 65 INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENC E, WEFIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT.' THAT LOVELY EXPORTS P LIMITED BYNAME REPRESENT IS A PRIVATE LIMITED COMPANY AND NOT A PUBLIC LIMITED COMPANY. HENCE, IN CASE OF SHARE APPLICATION MONEY THE ASSESSEE NEED TO PROVE ONLY I DENTITY OF THE SHARE HOLDERS. HONBLE JURISDICITONAL HIGH COURT IN THE CASE OF CI T VS PEOPLE GENERAL HOSPITAL LTD [ APPEAL NO M.A.I.T NO 27/ 2008 DT 27- 06-2013] HAS HELD THAT [ REFER PARA 16] :- 16. THE AFORESAID JUDGMENT HAS BEEN FOLLOWED BY A LL THE COURTS AND THE JUDGMENTS RELIED ON BY THEAPPELLANTS RELATES TO THE PERIOD PRIOR TO THE JUDGMENT IN LOVELY EXPORTS. AS THE APEX COURT HAS S PECIFICALLY HELD THAT IF THE IDENTITY OF THE PERSON PROVIDING SHARE APPLICAT ION MONEY IS ESTABLISHED THEN THE BURDEN WAS NOT ON THE ASSESSEE TO PROVE TH E CREDITWORTHINESS OF THE SAID PERSON. HOWEVER, THE DEPARTMENT CAN PROCEE D AGAINST THE SAID COMPANY IN ACCORDANCE WITH LAW. THE POSITION OF THE PRESENT CASE IS IDENTICAL. IT IS NOT THE CASE OF ANY OF THE PARTIES THAT M/S ALLIANCE INDUSTRIES LIMITED,SHARJAH IS A BOGUS COMPANY OR A NON-EXISTEN T COMPANY AND THE AMOUNT WHICH WAS SUBSCRIBED BYTHE SAID COMPANY BY W AY OF SHARE SUBSCRIPTION WAS IN FACT THE MONEY OF THE RESPONDEN T ASSESSEE. INTHE PRESENT CASE, THE ASSESSEE HAD ESTABLISHED THE IDEN TITY OF INVESTOR WHO HAD PROVIDED THE SHARESUBSCRIPTION AND IT WAS ESTAB LISHED THAT THE TRANSACTION WAS GENUINE THOUGH AS PER CONTENTION OF THERESPONDENT THE CREDITWORTHINESS OF THE CREDITOR WAS ALSO ESTABLISH ED. IN THE PRESENT CASE, IN THE LIGHT OF THE JUDGMENT OF LOVELY EXPORTS (P) LTD., WE HAVE TO SEE ONLY IN RESPECT OF THE ESTABLISHMENT OF THE IDENTITY OF THE INVESTOR. THE DELHI ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 66 HIGH COURT ALSO IN DIVINE LEASING & FINANCE LTD. (S UPRA),CONSIDERING THE SIMILAR QUESTION HELD THAT THE ASSESSEE COMPANY HAV ING RECEIVED SUBSCRIPTIONS TOTHE PUBLIC/RIGHTS ISSUE THROUGH BAN KING CHANNELS AND FURNISHED COMPLETE DETAILS OF THESHAREHOLDERS, NO A DDITION COULD BE MADE UNDER SECTION 68 IN THE ABSENCE OF ANY POSITIVE MAT ERIAL OREVIDENCE TO INDICATE THAT THE SHAREHOLDERS WERE BENAMIDARS OR F ICTITIOUS PERSONS OR THAT ANY PART OFTHE SHARE CAPITAL REPRESENTED COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. THE SIMILAR VIEW HASBEEN TAKEN BY THE OTHER HIGH COURTS. AS THE APEX COURT HAS CONSIDERED THE LAW IN LOVELY EXPORTS (SUPRA) AND IN VIEW OF LAW LAID DOWNBY THE APEX COURT, WE FIND THA T THE SUBSTANTIAL QUESTIONS FRAMED IN THESE APPEALS DO NOT ARISE FORO UR CONSIDERATION. ACCORDINGLY, ALL THESE APPEALS ARE DISMISSED WITH N O ORDER AS TO COSTS. HONBLE DELHI HIGH COURT VIDE ORDER DT 21-01-2013 I N THE CASE OF GANGESHWARI METAL PVT LTD [ APPEAL NO ITA NO 597/20 12] HAS DISCUSSED THE SIMILAR ISSUE IN DETAIL AND AFTER CON SIDERING THE DECISION IN THE CASE OF NOVA PROMOTERS P LIMITED HAS HELD THAT :- MR. SABHARWAL, APPEARING ON BEHALF OF THE REVENUE/ APPELLANT SOUGHT TO PLACE RELIANCE ON A DIVISION BENCH DECISION OF THIS COURT IN CIT V. NOVA PROMOTERS AND FINLEASE (P) LTD. : (2012) 342 ITR 169 (DEL.). HOWEVER, ON GOING THROUGH THE SAID DECISION IN NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) WE FIND THAT THE FACTS ARE CLEARLY DISTINGUISHABLE. 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 UNDER: - ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 67 THE RATIO OF A DECISION IS TO BE UNDERSTOOD AND AP PRECIATED IN THE BACKGROUND OF THE FACTS OF THAT CASE. SO UNDERSTOOD , IT WILL BE SEEN THAT WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICA NTS SUCH AS THEIR NAMES AND ADDRESSES, INCOME TAX FILE NUMBERS, THEIR CREDI TWORTHINESS, SHARE APPLICATION FORMS AND SHARE HOLDERS REGISTER, SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO THE ASSESSING OFFICER AND THE ASSE SSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATER IAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY UN DER 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 A PPLY THE RATIO TO A CASE, SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHE S THE PARTICULARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF- CONFESSED ACCOMMODATION ENTRY PROVIDERS, WHOSE BU SINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT THEIR U NACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION, AND THE A SSESSEE. THE RATIO IS INAPPLICABLE TO A CASE, AGAIN SUCH AS THE PRESENT O NE, 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 AUTHORITI ES INTO THE ACTIVITIES OF SUCH ENTRY PROVIDERS. THE EXISTENCE WITH THE ASSE SSING OFFICER OF MATERIAL SHOWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE- MEDITATED PLAN - A SMOKESCREEN - CONCEIVED AND EXEC UTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABILITY OF THE RATIO. IN OUR UNDERSTANDING, THE RATIO IS ATTRACTED TO A CASE WHERE IT IS A ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 68 SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHAR GED THE BURDEN PLACED UPON HIM UNDER SEC.68 TO PROVE AND ESTABLISH THE ID ENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GEN UINENESS OF THE TRANSACTION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVI DENCE OR MATERIAL IN HIS POSSESSION AND THEN COME FORWARD TO MERELY REJECT T HE SAME, WITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY INTO THE M ATERIAL PLACED BEFORE HIM. THE CASE BEFORE US DOES NOT FALL UNDER THIS CATEGOR Y AND IT WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY. (EMPHASIS SUPPLIED) AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES OF CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSING OFFICER CARRI ES OUT THE EXERCISE WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSES SING OFFICER SITS BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MAT ERIAL IN HIS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRESENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER, AFTER NOTING THE FACTS, MERELY R EJECTED 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 ENTRY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF 1,11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN RE SPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CREDIT IN THE B OOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS RECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WAS STATED THAT THE ACTUAL AMOUNT RECEIVED WAS ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 69 55,50,000/- AND NOT 1,11,50,000/- AS MENTIONED IN T HE 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 55,50,000/-. T HE ASSESSEE HAS FURTHER TRIED TO EXPLAIN THE SOURCE OF THIS AMOUNT OF 55,50,000/- BY FURNISHING COPIES OF SHARE APPLICATION MONEY, BALAN CE SHEET, ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT THE QUEST ION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANA TION OF THE ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REMAINS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS HAS BEE N ARRIVED BY THE INVESTIGATION WING OF THE DEPARTMENT. AS SUCH ENTRI ES OF `55,50,000/- RECEIVED BY THE ASSESSEE ARE TREATED AS AN UNEXPLAI NED CASH CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED TO ITS INCOME. SINC E I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F ITS INCOME, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITI ATED SEPARATELY. THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVO UR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CL EARLY DISTINGUISHABLE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LIN E WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA) . THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISHED A LL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. IN SUCH AN EVENT UALITY NO ADDITION CAN BE MADE UNDER SECTION 68 OF THE ACT. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBU NAL IS CORRECT IN LAW. THE APPEAL IS DISMISSED. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 70 HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. OAS IS HOSPITALITIES (P) LTD REPORTED IN 333 ITR 119 (2011) HAS HELD AS UNDER:- (I) SECTION 68 PROVIDES THAT IF THE ASSESSEE IS NO T ABLE TO GIVE SATISFACTORY EXPLANATION AS TO THE NATURE AND SOUR CE OF A SUM FOUND CREDITED IN HIS BOOKS, THE SUM MAY BE TREATED AS TH E UNDISCLOSED INCOME OF THE ASSESSEE. THE INITIAL BURDEN IS ON THE ASSES SEE TO EXPLAIN THE NATURE AND SOURCE OF THE CREDIT AND TO DO SO, THE ASSESSEE IS REQUI RED TO PROVE (A) IDENTITY OF THE SHAREHOLDER (B) GENUINENESS OF TRANSACTION AND (C) CREDIT WORTHINESS OF SHAREHOLDERS ; (A) THE IDENTITY OF THE SHAREHOLDER CAN BE PROVED BY EITHER (IF INDIVIDUAL) PRODUCING HIM BEFORE THE AO OR BY WAY OF DOCUMENTS, REGISTERED ADDRESS, PAN ETC; (B) THE GENUINENESS OF THE TRANSACTION CAN BE SHOW N FROM THE FACT THAT THE MONEY HAS BEEN RECEIVED FROM THE SHAREHOLDER. IF THE MONEY IS RECEIVED BY CHEQUE AND IS TRANSMITTED THROUGH BANKI NG OR OTHER INDISPUTABLE CHANNELS, THE GENUINENESS OF TRANSACTI ON WOULD BE PROVED . OTHER DOCUMENTS SHOWING THE GENUINENESS OF TRANSACT ION COULD BE THE COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICAT ION FORMS, SHARE TRANSFER REGISTER, ETC; (C) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR / SUBSCRIBER CAN BE PROVED BY PRODUCING THE BANK STATEMENT OF TH E CREDITORS / SUBSCRIBERS SHOWING THAT IT HAD SUFFICIENT BALANCE IN ITS ACCOUNTS TO ENABLE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 71 IT TO SUBSCRIBE TO THE SHARE CAPITAL. ONCE THESE DO CUMENTS ARE PRODUCED, THE ASSESSEE WOULD HAVE SATISFACTORILY DISCHARGE TH E ONUS CAST UPON HIM. THE AO CAN DISCREDIT THE DOCUMENTS PRODUCED BY THE ASSESSEE WITH COGENT REASONS AND MATERIALS BUT NOT ON THE REALM O F SUSPICION; (II) IF THE ASSESSEE HAS PRODUCED DOCUMENTS LIKE PA N CARD, BANK ACCOUNT DETAILS OR DETAILS FROM THE BANKERS THE ONU S SHIFTS UPON THE AO AND IT IS FOR HIM TO REACH THE SHAREHOLDERS AND THE AO CANNOT BURDEN THE ASSESSEE MERELY ON THE GROUND THAT SUMMONS ISSUED T O THE INVESTORS WERE RETURNED BACK WITH THE ENDORSEMENT NOT TRACEABLE (V) THERE IS AN ADDITIONAL BURDEN ON THE DEPARTMEN T TO SHOW THAT EVEN IF SHARE APPLICANTS DID NOT HAVE THE MEANS TO MAKE INV ESTMENT, THE INVESTMENT MADE BY THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UN DISCLOSED INCOME OF THE ASSESSEE. IN THE ABSENCE OF SUCH FINDING, ADDITION CANNOT BE MADE U/S 68 IN THE HANDS THE ASSESSEE. (VI) THE DEPARTMENT IS FREE TO REOPEN THE INDIVIDU AL ASSESSMENT IN CASE OF ALLEGED BOGUS SHAREHOLDERS IN ACCORDANCE WITH LA W AND, THUS, NOT REMEDY-LESS. AS REGARD SHARE PREMIUM OF RS 990/- PER SHARE IS CO NCERNED, THE ASSESSEE COMPANY IS A BIG PLAYER IN THE MEDIA SEGME NT AND ENGAGED IN THE PRINT AND BOARDING BUSINESS. THE ASSESSEE COMPA NY WAS INCORPORATED ON 05-04-1989 AND THEREFORE HAVING MORE THAN 20 YEA RS EXPERIENCE OF THIS LINE OF BUSINESS. THE ASSESSEE COMPANY DECLARED TOT AL INCOME IN ITS BOOKS OF ACCOUNT PRIOR TO DEPRECIATION WAS OF RS 9995881/ - AS ON 31.03.2008 AND ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 72 THE SAME WAS INCREASED TO RS 12489838/- AS ON 31.03 .2009. THAT CONSIDERING THE LONG STANDING IN THE BUSINESS AND H UGE PROFIT THE AMOUNT OF SHARE PREMIUM IS DULY JUSTIFIABLE. THAT IN CASE OF PRIVATE LIMITED COMPANY THE AMOUNT OF SHARE PREMIUM IS MUTUALLY DECIDED BET WEEN THE MANAGEMENT OF THE COMPANY AND SHARE APPLICANT. HENC E, THE ISSUE IN DISPUTE SHOULD NOT BE THE AMOUNT OF SHARE PREMIUM B UT THE IDENTITY OF THE SHARE HOLDERS WHO HAS APPLIED IN THE SHARE APPLICAT ION MONEY OF THE ASSESSEE COMPANY. HONBLE DELHI HIGH COURT IN THE CASE OF CIT (CENTRA L)-III VS ANSHIKA CONSULTANTS P LIMITED [ APPEAL NO ITA 467/ 2014 DT 16-04-2015 ] HAS HELD THATWHETHER THE ASSESSEE COMPANY CHARGED A HIGHER P REMIUM OR NOT, SHOULD NOT HAVE BEEN THE SUBJECT MATTER OF THE ENQU IRY IN THE FIRST INSTANCE. INSTEAD, THE ISSUE WAS WHETHER THE AMOUNT INVESTED BY THE SHARE APPLICANTS WERE FROM LEGITIMATE SOURCES. THE OBJECT IVE OF SECTION 68 IS TO AVOID INCLUSION OF AMOUNT WHICH ARE SUSPECT. THEREF ORE, THE EMPHASIS ON GENUINENESS OF ALL THE THREE ASPECTS, IDENTITY, CRE DITWORTHINESS AND THE TRANSACTION. WHAT IS DISQUIETING IN THE PRESENT CAS E IS WHEN THE ASSESSMENT WAS COMPLETED ON 31.12.2007, THE INVESTI GATION REPORT WHICH WAS SPECIFICALLY CALLED FROM THE CONCERNED DEPARTME NT IN KOLKATA WAS AVAILABLE BUT NOT DISCUSSED BY THE AO. HAD HE CARED TO DO SO, THE IDENTITY OF THE INVESTORS, THE GENUINENESS OF THE TRANSACTIO N AND THE CREDITWORTHINESS OF THE SHARE APPLICANTS WOULD HAVE BEEN APPARENT. EVEN OTHERWISE, THE SHARE APPLICANTS PARTICULARS WERE A VAILABLE WITH THE AO IN THE FORM OF BALANCE SHEETS INCOME TAX RETURNS, PAN DETAILS ETC. WHILE ARRIVING AT THE CONCLUSION THAT HE DID, THE AO DID NOT CONSIDER IT WORTHWHILE TO MAKE ANY FURTHER ENQUIRY BUT BASED HIS ORDER ON THE HIGH NATURE OF THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 73 PREMIUM AND CERTAIN FEATURES WHICH APPEARED TO BE S USPECT, TO DETERMINE THAT THE AMOUNT HAD BEEN ROUTED FROM THE ASSESSEES ACCOUNT TO THE SHARE APPLICANTS ACCOUNT. AS HELD CONCURRENTLY BY THE CI T (APPEALS) AND THE ITAT, THESE CONCLUSIONS WERE CLEARLY BASELESS AND F ALSE. THIS COURT IS CONSTRAINED TO OBSERVE THAT THE AO UTTERLY FAILED T O COMPLY WITH HIS DUTY CONSIDERS ALL THE MATERIALS ON RECORD, IGNORING SPE CIFICALLY THE MOST CRUCIAL DOCUMENTS. WE PLACE THESE OBSERVATIONS ON THE RECOR D AND DIRECT A COPY OF THE JUDGMENT TO BE FURNISHED TO THE CONCERNED IN COME TAX AUTHORITIES FOR APPROPRIATE ACTION TOWARDS REFLECTING THESE OBSERVA TIONS SUITABLY IN SERVICE RECORD OF THE CONCERNED AO TO AVOID SUCH INSTANCES IN THE FUTURE. FOR THE ABOVE REASONS, THIS COURT IS OF THE OPINION THAT THE CONCURRENT FINDINGS OF FACT, AS TO THE TRUE IDENTITY OF THE SH ARE APPLICANTS, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION , ARE BASED ON SOUND REASONING AND DO NOT CALL FOR INTERFERENCE. NO SUBS TANTIAL QUESTION OF LAW ARISES. THE APPEALS ARE DISMISSED. IN THE CASE OF ACIT VS M/S KRISHNA SHEET PROCESSORS P LIMITED [ APPEAL NO ITA NO 546/ MUM/ 2013 DT 30-06-2015] THE AMOUNT OF SHARE PREMIUM OF RS 1000/- WAS DULY ACCEPTED AS GENUINE. IN VIEW OF THE ABOVE, ONCE THE ASSESSEE HAS ESTABLI SHED THE IDENTITY OF THE SHARE HOLDER IN THAT CASE THE AMOUNT OF SHARE PREMI UM IS NOT AN ISSUE. IF THE ASSESSING OFFICER HAS NOT SATISFIED WITH THE EX PLANATION OF THE SHARE APPLICANT, NECESSARY ADDITION IS TO BE MADE IN THE HAND OF THE SHARE APPLICANT BUT NOT IN THE CASE OF THE ASSESSEE. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 74 AS REGARD THE BLANK TRANSFER DEED DULY SIGNED BY TH E SHARE APPLICANT AS FOUND DURING THE COURSE OF SURVEY. THE ASSESSING O FFICER HIMSELF AFTER BEING SATISFIED NOT TAKING ANY COGNIZANCE FOR THE SAME. SINCE, BY THE TIME OF ASSESSMENT PROCEEDING THESE TRANSFER DEED WAS NO T USED BY THE ASSESSEE AND THEREFORE AFTER THE DATE OF ANNUAL GEN ERAL MEETING , OLD DATE TRANSFER DEED HAS NO LEGAL VALUE. DELHI BENCH OF ITAT IN THE CASE OF ITO VS NEELKANTH FINBUILD LIMITED [ APPEAL NO ITA NO 2821/ DEL/ 2009 DT 01-04-2015] FOR THE ASST YEAR 2006- 07 HAS HELD THATIT IS NOT THE BUSINESS OF ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF CREDITORS. SIMILAR OBSERVATION HAS ALSO BE EN GIVEN IN THE CASE OF HASTIMAL 49 ITR 273 (MADR) AND DAULATRAMRAWATMAL (1 973) 87 ITR 349 (SC). LD. FIRST APPELLATE AUTHORITY HAS CITED VARIO US DECISIONS RENDERED BY THE HON'BLE SUPREME COURT OF INDIA AS WELL AS THE H ON'BLE JURISDICTIONAL HIGH COURT IN THE IMPUGNED ORDER AND FINALLY HAS HE LD THAT THE ASSESSEE HAS SUBSTANTIATED THE TRANSACTION REGARDING SHARE A PPLICATION MONEY RECEIVED BY IT WAS GENUINE TRANSACTION AND THE SAME WERE NOT ACCOMMODATION ENTRIES. HE DID NOT FIND ANY EVIDENCE COLLECTED BY THE AO WHICH COULD PROVE OTHERWISE AND DELETED THE ADDITIO NS IN DISPUTE. AS REGARD TO THE ADDITION OF RS.12,500/- MADE ON ACCOU NT OF COMMISSION WHICH WAS PRESUMED TO HAVE BEEN ALLOWED BY THE ASSE SSEE FOR OBTAINING THE HAWALA ENTRY IN DISPUTE, THE LD. CIT(A) OBSERVE D THAT THE ASSESSING OFFICER WAS NOT ABLE TO BROUGHT ANYTHING ON RECORD THAT IT WAS ASSESSEE'S OWN MONEY WHICH WAS ROOTED IN THE FORM OF SHARE APP LICATION MONEY AND HAS RIGHTLY DELETED THE SAME. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 75 IN THE CASE OF CIT VS KORLAY TRADING CO LIMITED AS REPORTED IN 232 ITR 820, HONBLE CALCUTTA HIGH COURT OBSERVED THAT IN C ASE OF UNSECURED LOAN MERE PROVIDING OF PA NO WAS NOT SUFFICIENT. IN THAT CASE THE ASSESSEE UTTERLY FAILED TO FURNISH EVEN CONFIRMATION LETTER. IN THE PRESENT APPEAL, THE MATTER IN DISPUTE IS NOT UNSECURED LOAN BUT SHARE C APITAL AND IT WAS CATEGORICALLY HELD THAT THE ASSESSEE NEED TO PROVE THE IDENTITY OF THE SHARE HOLDERS ONLY. THE ASSESSEE IN PRESENT CASE NOT ONLY FILED CONFIRMATION LETTER BUT AMPLE DOCUMENTS AS TO DISCHARGED THE ONUS LYING ON THE ASSESSEE. HENCE, DECISION OF THE HONBLE CALCUTTA HIGH COURT ARE DISTINGUISHABLE ON THE FACT OF THE PRESENT CASE. IN CASE OF N TARIKA PROPERTY INVESTMENT (P) LTD , H ONBLE DELHI HIGH COURT AS REPORTED IN 40 TAXMANN.COM 525 AND BY THE HONBL E APEX COURT AS REPORTED IN 51 TAXMANN.COM 387 HAS OBSERVED THAT TH E BANK ACCOUNT AS PROVIDED WAS FORGED AND FABRICATED BANK ACCOUNT. IN THE PRESENT APPEAL IN HAND THE ASSESSEE HAS PROVIDED COPY OF BANK STATEME NT, PA NO AND VARIOUS OTHER DOCUMENTS AND THE ASSESSING OFFICER F AILED TO POINTED OUT ANY DEFECTS IN THESE DOCUMENTS. HENCE, THE FACTS OF THE CASE OF N TARIKA PROPERTY INVESTMENT [P] LTD IS DISTINGUISHABLE WITH THE FACTS OF THE PRESENT APPEAL IN HAND. IN CASE OF CIT VS N R PORTOFLIO (P ) LIMITED AS REP ORTED IN 42 TAXMANN.COM 339, HONBLE HIGH COURT HAS OBSERVED THAT MERE PROV IDING THE PA NO BY THE APPELLANT AND NOT COOPERATED WITH THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDING.IN THE PRESENT APPEAL, THE AS SESSEE COMPANY NOT ONLY PROVIDE THE PA NO BUT ALSO PROVIDE AMPLE DOCUM ENTS TO SUBSTANTIATE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 76 ITS CLAIM OF SHARE APPLICATION MONEY. THERE WAS NO ALLEGATION WHAT SO EVER OF THE ASSESSING OFFICER ABOUT NON- CO-OPERATION OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT OR APPELLATE PROCEEDING. HENCE , THE FACT OF THE PRESENT CASE IS DISTINGUISHABLE WITH THE FACT OF N R PORTFOLIO (P) LIMITED. IN CASE OF GAYATHRI ASSOCIATES AS REPORTED IN 41 TA XMANN.COM 526, HONBLE ANDHRA PRADESH HIGH COURT HAS OBSERVED THAT EXCEPT BANK ACCOUNT NO OTHER DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFICER EVEN NO AFFIDAVIT WAS FILED.IN THE PRESENT APPEAL IN HAND T HE ASSESSEE NOT ONLY THE BANK ACCOUNT BUT ALSO THE AFFIDAVIT AND VARIOUS OTH ER DOCUMENTS WERE FILED. IN ADDITION TO THE DOCUMENTS THE ASSESSEE COMPANY A LSO DECLARED DIVIDEND AND BOGUS. HENCE, ONUS LYING ON THE ASSESSEE HAS PR OPERLY BEEN DISCHARGED. THUS, FACT OF THE PRESENT CASE IS DISTI NGUISHABLE WITH THE FACT OF THE CASE OF M/S GAYATHRI ASSOCIATES. IN CASE OF CIT VS FOCUS EXPORTS (P) LTD AS REPORTE D IN 51 TAXMANN.COM 46,HONBLE DELHI HIGH COURT HAS OBSERVED THAT ADDRE SS AND PA NO OF THE SHARE APPLICANT WAS NOT PROVIDED.IN THE PRESENT APP EAL IN HAND THE APPELLANT COMPANY HAS PROVIDED THE COMPLETE ADDRESS , PA NO AND VARIOUS OTHER DOCUMENTS AS TO DISCHARGED ONUS LYING ON IT. HENCE, FACT OF THE PRESENT APPEAL IS DISTINGUISHABLE WITH THE FACT OF FOCUS EXPORTS (P) LTD. IN CASE OF CIT VS P MOHANKALA AS REPORTED IN 291 IT R 278, HONBLE APEX COURT HAS ANALYSIS THE PROVISION OF SECTION 68 OF T HE INCOME TAX ACT AND OBSERVED THAT EXPLANATION OF THE ASSESSEE NOT ACCEP TED BY THE ASSESSING DOES NOT TANTAMOUNT TO INCOME OF THE ASSESSEE. IN T HAT CASE THE LD CIT[A] AND HONBLE ITAT ALSO APPROVED THE ORDER OF THE ASS ESSING OFFICER.IN THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 77 PRESENT APPEAL IN HAND, THE ASSESSEE COMPANY HAS EX PLAINED THE CORRECT NATURE OF TRANSACTIONS THOUGH THE SAME WAS NOT ACCE PTED BY THE ASSESSING OFFICER BUT BY THE LD CIT[A]. SINCE, THE ASSESSEE C OMPANY HAS FILED AMPLE DOCUMENTS TO SUPPORT ITS CLAIM. HENCE, RATHER DECIS ION OF THE HONBLE APEX COURT SUPPORT THE CASE OF THE ASSESSEE COMPANY. IN THE CASE OF MAF ACADEMY (P) LIMITED AS REPORTED IN 42 TAXMANN.COM 377, HONBLE DELHI HIGH COURT ON THE BASIS OF ITS F INDING IN THE CASE OF N R PORTFOLIO [P] LIMITED [ SUPRA] REACHED TO A CONCLUS ION THAT THE ASSESSEE HAS FAILED TO PROVIDE THE IDENTITY, GENUINENESS AND CRE DITWORTHINESS OF THE SHARE APPLICATION MONEY.IN THE PRESENT CASE AS STATED THE ASSESSEE HAS EXTEND ITS FULL CO-OPERATION AND ALSO FILED AMPLE DOCUMENT S AS TO PROVE THE INGREDIENTS OF PROVISION OF SECTION 68 OF THE ACT. THE SHARE OF THE ASSESSEE COMPANY STILL IN POSSESSION OF THE SHARE HOLDERS AN D DIVIDEND AND BONUS WAS DECLARED BY THE ASSESSEE COMPANY. HENCE, FACT O F THE CASE OF MAF ACADEMY (P) LIMITED WAS DISTINGUISHABLE WITH THE FA CT OF THE PRESENT CASE OF THE ASSESSEE. IN THE CASE OF SUBHLAKSHMI VANIJYA ( P) LTD AS REPO RTED IN 60 TAXMANN.COM 60 , HONBLE KOLKATA BENCH OBSERVED THAT INSERTION OF THE PROVISO TO SECTION 68 WAS RETROSPECTIVE IN NATURE.THAT PROVISO TO SECT ION 68 OF THE INCOME TAX ACT WAS INSERTED BY THE FINANCE ACT 2012 W.E.F 01-0 4-2013. SINCE, THE DATE OF APPLICABILITY WAS CLEARLY MENTIONED WITH THIS AM ENDMENT, HENCE, THE SAID INSERTION OF THE PROVISO HAVE PROSPECTIVE APPLICABI LITY. THAT HONBLE MUMBAI BENCH OF ITAT IN THE CASE OF VEEDHATA TOWER P LIMIT ED [ ITA NO 7070/ MUM/ 2014 ] DT 21-01-2015 HAS DISCUSSED THE ISSUE O F SHARE APPLICATION MONEY IN DETAIL AND HELD THAT THE ASSESSEE PRIOR TO THE AMENDMENT BY THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 78 FINANCE ACT, 2012 NEED TO PROVE ONLY IDENTITY OF TH E SHARE HOLDERS AND THE ASSESSEE ALSO NEED NOT REQUIRES TO BE PROVED SOURCE OF SOURCE. IN THE CASE OF AGRAWAL COAL CORPORATION (P) LIMITED AS REPORTED IN 19 TAXMANN.COM 209, HONBLE INDORE BENCH OF ITAT HAS C ATEGORICALLY HELD THAT THE ASSESSEE NEEDS TO PROVE THE IDENTITY OF TH E SHARE HOLDER ONLY.IN THE PRESENT APPEAL IN HAND THE ASSESSEE HAS PROVED THE IDENTITY OF THE SHARE APPLICANT WITH THE AMPLE DOCUMENTS. HENCE, RATHER T HE SAID DECISION SUPPORTS THE CASE OF THE ASSESSEE COMPANY. IN CASE OF CIT VS NOVA PROMOTERS & FINLEASE (P) LIM ITED AS REPORTED IN 342 ITR 169, HONBLE DELHI HIGH COURT HAS OBSERVED THAT THE ASSESSING OFFICER HAS RECORDED STATEMENT OF THE SHARE APPLICANT IN TH AT CASE AND CONFRONTED WITH THE ASSESSEE BUT THE ASSESSEE FAILED TO SUBSTA NTIATE ITS CONTENTION.IN THE PRESENT APPEAL THE STATEMENT AS RECORDED IN CAS E OF SHARE APPLICANT OF DELHI BOTH THE SHARE APPLICANT DULY CONFIRMED THE I NVESTMENT MADE IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY. IN THE SHARE APPLICANT OF BOMBAY, THE AUTHORISED OFFICER SIMPLY REFERRED THE OLD STAT EMENT AS RECORDED IN THE YEAR 2009 EVEN WHEN COMMISSION WAS ISSUED IN THE YE AR 2011. THAT IN PARA 35 TO 38 OF ITS ORDER RATHER SUPPORT THE CASE OF THE ASSESSEE.IN THE PRESENT APPEAL, THE ASSESSEE COMPANY HAS PROPERLY D ISCHARGED ITS ONUS AS LYING U/S 68 OF THE INCOME TAX ACT. THE AMOUNT OF DIVIDEND AS DECLARED AND CREDITED IN THE BANK ACCOUNT OF THE SHARE APPLI CANT, THE BONUS SHARES WERE ALSO ISSUED BY THE ASSESSEE COMPANY AND THE EN TIRE SHARE APPLICANT STILL POSSESSED THE SHARE OF THE ASSESSEE COMPANY. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 79 WE ARE OF THE VIEW THAT THE LD. CIT(A) IN HIS ORD ER HAS RELIED UPON THE DECISION HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORT P. LTD., 216 CTR 195 AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF GANGESHWARI METAL P. LTD. DATED 21.1.2013 AND AL SO AFTER TAKING NOTE OF A DECISION OF APEX COURT IN THE CASE OF KISHAN CHAN D CHELLARAM VS. CIT, 125 ITR 713. THEREFORE, LD. CIT(A) HAS DELETED THE ADDITION AND OUR INTERFERENCE IS NOT REQUIRED. WE ALSO GET SUPPORT F ROM THE DECISION OF ITAT, INDORE BENCH IN THE CASE OF STL EXTRUSION (P) LIMIT ED VIDE ORDER DATED 10.05.2010 BEING ITA NO.(SS) 259, 260 /IND/2008 AFT ER CONSIDERING THE JUDGEMENT OF HONBLE MP HIGH COURT IN THE CASE OF R ATHI FINLEASE LTD. REPORTED IN 215 CTR 429 (MP) HELD AS UNDER:- PAGE 7 IN THE PRESENT APPEAL, SINCE THE ASSESSEE HAS DISCHARGED ITS ONUS BY PROVING THE IDENTITY OF SUBSCRIBERS AND EVE N OTHERWISE HAD ANY SUSPICION STILL REMAINED IN HIS MIND, NOTHING P REVENTED HIM TO INITIATE ACTION AS PER THE PROVISIONS OF THE ACT. T HE EXISTENCE OF SUBSCRIBER TO SHARE APPLICATION IS NOT IN DOUBT AS THE ASSESSEE DULY FURNISHED THEIR NAMES, AGE, ADDRESS, DATE OF FILING THE APPLICATION, NUMBER OF SHARES FOR WHICH RESPECTIVE APPLICATIONS WERE MADE, AMOUNT GIVEN AND THE SOURCE OF INCOME OF THE APPLIC ANT. IN VIEW OF THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO JUSTIFICATION FOR MAKING THE IMPUGNED ADDITION BECA USE ONCE THE EXISTENCE OF THE INVESTOR/SHARE SUBSCRIBERS IS PROV ED, ONUS SHIFTS ON ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 80 THE REVENUE TO ESTABLISH THAT EITHER THE SHARE APPL ICANTS ARE BOGUS OR THE IMPUGNED MONEY BELONGS TO THE ASSESSEE COMPANY ITSELF. ONCE THE CONFIRMATION LETTERS ARE FILED, NO ADDITION CAN BE MADE ON ACCOUNT OF SHARE APPLICATION IN THE HANDS OF THE COMPANY. O UR VIEW FINDS SUPPORT FROM THE DECISION IN SHRI BARKHA SYNTHETICS LTD. V/S ACIT 155 TAXMAN 289 (RAJ). THE CASES LIKE CIT V/S GP INTERNA TIONAL LTD.229 CTR (P&H) 86, CIT V STELLER INVESTMENT LIMITED 192 ITR 287 AND SOPHIA FINANCE LIMITED 205 ITR 98 (DEL) SUPPORTS TH E CASE OF THE ASSESSEE. THE ABOVE ORDER OF ITAT INDORE BENCH HAS ALSO BEEN CONFIRMED BY THE HONBLE M.P. HIGH COURT IN THE CASE OF CIT V/S STL EXTRUSION (P) LTD REPORTED IN 53 DTR 97(2011) AFTER REFERRING ITS EARLIER ORDER IN THE CASE OF CIT V/S RATHI FINLEASE LTD. REPORTED IN 215 CTR 429 HAS DECIDED IN FAVOUR OF THE ASSESSEE WHEREIN HONBLE J URISDICTIONAL HIGH COURT ALSO RELIED ON THE DECISION OF THE HONBLE AP EX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED. HONBLE JURISDICITONAL HIGH COURT IN THE CASE OF CI T VS PEOPLE GENERAL HOSPITAL LTD [ APPEAL NO M.A.I.T NO 27/ 200 8 DT 27-06-2013] HAS HELD THAT [ REFER PARA 16] :- 16. THE AFORESAID JUDGMENT HAS BEEN FOLLOWED BY A LL THE COURTS AND THE JUDGMENTS RELIED ON BY THE APPELLANTS RELATES T O THE PERIOD PRIOR TO THE JUDGMENT IN LOVELY EXPORTS. AS THE APEX COURT H AS SPECIFICALLY HELD THAT IF THE IDENTITY OF THE PERSON PROVIDING S HARE APPLICATION MONEY IS ESTABLISHED THEN THE BURDEN WAS NOT ON THE ASSESSEE TO ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 81 PROVE THE CREDITWORTHINESS OF THE SAID PERSON. HOWE VER, THE DEPARTMENT CAN PROCEED AGAINST THE SAID COMPANY IN ACCORDANCE WITH LAW. THE POSITION OF THE PRESENT CASE IS IDENT ICAL. IT IS NOT THE CASE OF ANY OF THE PARTIES THAT M/S ALLIANCE INDUST RIES LIMITED, SHARJAH IS A BOGUS COMPANY OR A NON-EXISTENT COMPAN Y AND THE AMOUNT WHICH WAS SUBSCRIBED BY THE SAID COMPANY BY WAY OF SHARE SUBSCRIPTION WAS IN FACT THE MONEY OF THE RESPONDEN T ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF INVESTOR WHO HAD PROVIDED THE SHARE SUBSCRIPTION AN D IT WAS ESTABLISHED THAT THE TRANSACTION WAS GENUINE THOUGH AS PER CONTENTION OF THE RESPONDENT THE CREDITWORTHINESS O F THE CREDITOR WAS ALSO ESTABLISHED. IN THE PRESENT CASE, IN THE LIGHT OF THE JUDGMENT OF LOVELY EXPORTS (P) LTD., WE HAVE TO SEE ONLY IN RES PECT OF THE ESTABLISHMENT OF THE IDENTITY OF THE INVESTOR. THE DELHI HIGH COURT ALSO IN DIVINE LEASING & FINANCE LTD. (SUPRA), CONS IDERING THE SIMILAR QUESTION HELD THAT THE ASSESSEE COMPANY HAVING RECE IVED SUBSCRIPTIONS TO THE PUBLIC/RIGHTS ISSUE THROUGH BA NKING CHANNELS AND FURNISHED COMPLETE DETAILS OF THE SHAREHOLDERS, NO ADDITION COULD BE MADE UNDER SECTION 68 IN THE ABSENCE OF ANY POSITIV E MATERIAL OR EVIDENCE TO INDICATE THAT THE SHAREHOLDERS WERE BEN AMIDARS OR FICTITIOUS PERSONS OR THAT ANY PART OF THE SHARE CA PITAL REPRESENTED COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. THE SIMILAR VIEW HAS BEEN TAKEN BY THE OTHER HIGH COURTS. 17. AS THE APEX COURT HAS CONSIDERED THE LAW IN LOV ELY EXPORTS (SUPRA) AND IN VIEW OF LAW LAID DOWN BY THE APEX CO URT, WE FIND THAT THE SUBSTANTIAL QUESTIONS FRAMED IN THESE APPEALS D O NOT ARISE FOR OUR ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 82 CONSIDERATION. ACCORDINGLY, ALL THESE APPEALS ARE D ISMISSED WITH NO ORDER AS TO COSTS. HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED AS REPORTED IN 11 ITJ 357 HAS HELD THAT:- '2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UN DISCLOSED INCOME UNDER S. 68 OF IT ACT, 1961? WE FIND NO MERI T IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SH ARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLE GED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT.' ON CONSIDERATION OF ABOVE AND RESPECTFULLY FOLLOWIN G THE DECISION OF THE JURISDICATIONAL HIGH COURT IN THE CASE OF CIT VS. S TL EXTRUSION, 53 DTR 97 AND DECISION OF JURISDICATIONAL HIGH COURT IN THE C ASE OF CIT VS. PEOPLES GENERAL HOSPITAL (APPEAL NO.27/2008) (SUPRA) AND TH E DECISION OF HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORT (SUPRA), 11 TTJ 357, DISMISS THE DEPARTMENTAL APPEAL ON THE ISSUE OF SHARE APPLI CATION MONEY. LD. CIT(A) IS JUSTIFIED IN HOLDING THE SHARE APPLICATIO N MONEY OF RS.4.79 CRORES AS EXPLAINED U/S 68 OF THE I.T. ACT. GROUND NO.2 IS REGARDING ADMITTING THE ADDITIONAL DOCUMENTARY EVIDENCE ON THE GROUND THAT THIS EVIDENCE WAS NOT P RODUCED BEFORE THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 83 ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS, TH EREFORE, THERE WAS VIOLATION OF RULE 46A OF THE I.T. ACT. DURING THE COURSE OF HEARING, WE FIND THAT THE AS SESSEE HAS SUBMITTED ALL THE DOCUMENTARY EVIDENCE BEFORE THE A SSESSING OFFICER AND THE LD. DR HAS NOT DISPUTED THIS FACT, THEREFORE, W E ARE OF THE VIEW THAT THIS DEPARTMENTAL GROUND DESERVES TO BE DISMISSED. WE DI SMISS THE SAME. DEPARTMENTAL ITA NO.564/IND/2013 (KANIKA DIGITAL PR INTS P. LTD.) 2. THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)7-MUMBAI (CONCUR RENT JURISDICTION OVER THE CHARGE OF CIT(A)-I, INDORE), DATED 22.3.20 13. 2.1 GROUND NOS.1 & 2 OF REVENUE RELATE TO THE ADDIT ION OF RS.85,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED SHARE APPLICATION MONEY WHEREAS GROUND NO.3 RELATES TO ADMISSION OF A DDITIONAL EVIDENCE VIOLATING RULE 46A OF THE I.T. RULES. 2.2 BOTH THE PARTIES SUBMITTED THAT FACTS AND CIRCU MSTANCES OF KANIKA DIGITAL PRINTS P. LTD. ARE SIMILAR TO THE CASE OF S WIFT INTERMEDIA CONVERGENCE LTD. WE FIND THAT MATTER IS COVERED BY THE FINDING RECORDED ABOVE IN THE CASE OF SWIFT INTERMEDIA CONVERGENCE L TD., THEREFORE, ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 84 FOLLOWING THE SAME, DEPARTMENTAL APPEAL IN THE CASE OF KANIKA DIGITAL PRINTS P. LTD. IS ALSO DISMISSED. ITA NO.543/IND/2013 (AD-MENUM PACKAGING LTD.) 3.1 THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-II, INDORE, DAT ED 31.5.2013. 3.2 FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVEN UE: LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS OF RS1,75,00,000/- AND RS. 2,00,00,000/- TOTALING TO RS. 3,75,00,000/- MA DE BY THE LD. A.O. U/S 68 ON ACCOUNT OF SHARE APPLICATION MONEY RECEIV ED BY THE ASSESSEE COMPANY. 3.3 THE SHORT FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE COMPANY IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF HDPE/PP WOVEN SACKS/FABRIC. IT HAS FILED ITS RETURN OF TOTAL INCOME FOR THE YEAR UNDER CONSIDERATION ON 29.09.20 09 DECLARING TOTAL INCOME AT RS.37,23,060/- U/S 28 TO 44 D OF THE INCOME TAX ACT AND RS. 1,90,60,610/- U/S 115JB OF THE INCOME TAX ACT ALONG WITH ITS AUDITED ACCOUNTS. THE CASE OF THE ASSESSEE COMPANY WAS SELECTED FOR SCRUTINY AND ASSESSMENT ORDER U/S 143(3) WAS PASSED ASSESSING TOTAL INCOME OF RS 4,14,23,060/-. THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT ORDE R HAD ADDED THE FOLLOWING AMOUNT TO THE TOTAL INCOME OF THE APPELLANT:- S.NO NATURE OF ADDITION AMOUNT (RS) 1 U/S 68 IN RESPECT OF SHARE CAPITAL RECEIVED FROM 1,75,00,000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 85 3 PARTIES FOR THE REASON THAT NOTICE ISSUED U/S 133(6) WERE RECEIVED UNSERVED BUT CHARTERED ACCOUNTANT APPEARED 2 U/S 68 IN RESPECT OF SHARE CAPITAL RECEIVED FROM 7 PARTIES RELATED TO THE ONE SHRI MUKESH CHOKSHI 2,00,00,000 3. U/S 69C BEING COMMISSION EXPENSES ALLEGED TO HAVE BEEN PAID FOR OBTAINING ABOVE SHARE CAPITAL 2,00,000 3,77,00,000 3.4 MATTER CARRIED TO LD. CIT(A), WHO DELETED THE A DDITION BY OBSERVING AS UNDER: 4] CONSIDERING THE OVERALL FACTS OF THE CASE AND T AKING INTO CONSIDERATION THE WRITTEN SUBMISSION AND VERBAL ARGUMENTS PUT FURTHER BY THE APPELLANT, AND ON PERUSAL OF THE ASSESSMENT ORDER AS PASSED BY THE ASSESSING OFFICER , I FIND THAT THE APPELLANT IN THE GROUND NO 1 OF THE PRESENT APPEAL HAS CHALLENGED TH E ADDITION OF RS 3,75,00,000/- MADE ON ACCOUNT OF SHARE APPLICATION MONEY / SHARE CAPITAL. I ALSO FIND THAT THE AO HAS ADDED AN AMOUNT OF RS 1,75,00,000/- AS RECEIVED FRO M THREE DIFFERENT COMPANIES VIZ M/S DOLDRUM INVESTMENT & FINANCE P LIMITED OF -., R S 50,00,000/-, M/S. SIDH HOUSING DEVELOPMENT CO LIMITED [ NOW KNOWN AS BHADRAWATI IS PAT & ENERGY LIMITED], OF RS 75,00,000/- AND M/S GYANESHWAR TRADING. & FINANCE C O LIMITED [ NOW KNOWN AS M/S BHADRAWATI STEEL URJA LIMITED] OF RS 50,00,000/-. T HE AO WHILE ADDING THE AMOUNT OF SHARE CAPITAL/OF RS 1,75,00,000/- TO THE INCOME OF THE APPELLANT OBSERVED THAT INCOME TAX RETURN AND BALANCE SHEET FOR THE YEAR ENDED ON 31.03.2009 I.E. ASSESSMENT YEAR UNDER CONSIDERATION WERE NOT FILED. HOWEVER, I FIND THAT INCOME TAX RETURN AND BALANCE SHEET WERE FILED FOR THE YEAR ENDED ON 31.03.2009 B EFORE THE AO AND ALSO IN THE APPELLATE PROCEEDINGS. THE DIRECTORS OF THESE THREE COMPANIES IN THEIR AFFIDAVIT HAVE CATEGORICALLY ACCEPTED ABOUT THE INVESTMENT MADE BY THEM IN THE SHARE CAPITAL OF THE APPELLANT COMPANY. HENCE, THERE WAS NO REASON FOR H AVING ANY DOUBT ABOUT THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 86 INVESTMENT MADE BY THESE SHARE HOLDERS. AS REGARD L OW INCOME SHOWN BY THE SHARE HOLDERS ARE CONCERNED, ALL THESE SHARE HOLDERS ARE REGULARLY ASSESSED TO TAX AND ALSO FILED THEIR INCOME TAX RETURN REGULARLY. COPIES OF INCOME TAX RETURN WERE FILED BEFORE THE AO AND ALSO IN THE APPELLATE PROCEEDING. NO ADVERSE FINDING ABOUT THE INCOME AND INVESTMENT WAS RECORDED BY THE ASSESSING OFFICER WH ERE THE SHARE HOLDERS ARE REGULARLY ASSESSED. THE AO ALSO FAILED TO COLLECT ANY INFORMA TION FROM HIS COUNTERPART ABOUT THE GENUINENESS OF THE INVESTMENT MADE BY THESE SHARE H OLDERS. THE AO ALSO FAILED TO POINT OUT CASH DEPOSITED IF ANY IN THE BANK ACCOUNT OF ANY OF THESE SHARE HOLDERS COMPANIES DIRECTLY OR FAILED TO REFER TO ANY OTHER ACCOUNT IN WHICH CASH WAS DEPOSITED BY THESE COMPANIES. THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDING PROVIDED COMPLETE DETAILS WHICH ALSO INCLUDES SHARE APPLICATION MONEY FORM, CONFIRMATION, AFFIDAVIT, BANK STATEMENT, INCOME TAX RETURN AND AUDITED BALANCE SHEET, MEMORANDUM AND ARTICLE OF ASSOCIATION ETC. THE AO C OULD HAVE FORWARDED THESE INFORMATION TO THE ASSESSING OFFICER WHERE THE SHAR E HOLDERS COMPANY ARE REGULARLY ASSESSED TO TAX AND OBTAINED FACTUAL REPORT WHERE T HE INVESTMENT WAS SHOWN BY THESE COMPANIES IN THE NAME OF THE APPELLANT COMPANY WERE REFLECTED IN THEIR BOOKS OF ACCOUNT OR NOT BUT THE AO FAILED TO DO THE BASIC EX ERCISE. AS REGARD INVESTMENT ON PREMIUM IS CONCERNED, THE SAME IS DEPENDING UPON TH E VARIOUS FACTOR AND IT WAS MUTUALLY DECIDED BY THE APPELLANT COMPANY AND THE S HARE APPLICANT. IT IS WORTH NOTING THAT SHRI PURSHOTTAM AGARWAL, FATHER OF ONE OF THE DIRECTOR SHRI PRAVEEN AGARWAL ALSO APPLIED ON SAME PREMIUM. IN THE CASE OF M/S UBS ENT ERPRISES P LIMITED, THE AMOUNT OF SHARE APPLICATION MONEY OF RS 1,00,00,000/- AS RECE IVED ON SAME PREMIUM HAS DULY BEEN ACCEPTED AS GENUINE BY THE AO, HENCE THEREIN I S NO REASON TO DOUBT THE PREMIUM RECEIVED FROM OTHER SHARE APPLICANTS. THE APPELLANT COMPANY IS CONTINUOUSLY EARNING HUGE PROFIT AND ALSO HAVING GROWING BUSINESS MARKET . THE ADDRESS ON WHICH INQUIRY WAS CONDUCTED WAS OLD ADDRESS OF THE SHARE APPLICANT CO MPANIES. THE AO CONDUCTED INQUIRY IN THE YEAR 2011-12 AND TILL THAT TIME INCO ME TAX RETURN FOR THE ASST YEAR 2011-12 WAS ALSO FILED BY ALL THESE SHARE APPLICANT WHEREIN DIFFERENT ADDRESSES WERE PROVIDED IN RESPECT OF M/S SIDH HOUSING DEVELOPMENT COMPANY LIM ITED AND M/S GYANESHWAR TRADING & FINANCE CO LIMITED, NAME OF THESE COMPANI ES HAVE ALSO BEEN CHANGED. BUT INQUIRY WAS MADE IN THE OLD NAME AND ALSO ON OLD AD DRESSES. IF THE AO OPTED TO COLLECT ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 87 THE INFORMATION FROM THE ASSESSING OFFICER WHERE TH E SHARE APPLICANT IS REGULARLY ASSESSED TO TAX, IN THAT CASE, CORRECT AND PROPER I NQUIRY COULD HAVE BEEN DONE. HOWEVER, THE AO SIMPLY ON THE BASIS OF NON- SERVICE OF THE LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX DISBELIEVED THE GENUINENESS OF TH E SHARE APPLICATION WHICH IN MY CONSIDERED OPINION WAS NOT CORRECT APPROACH. THE SH ARE APPLICANT COMPANIES ALSO APPOINTED ONE CHARTERED ACCOUNTANTS SHRI SUNIL KUMA WAT WHO PERSONALLY APPEARED WITH THE VALID POWER OF ATTORNEY AND SUBMITTED ALL THE PAPERS AS DEMANDED TOY THE AO IN THE LETTER AS IS SUED, U/S 133(6) OF THE INCOME TAX ACT. THUS, IN TOTALITY OF THE FACTS; WHEN THE AFFIDAVIT HAS ALREADY BEEN FILED BY THE AP PELLANT WHICH WAS NOT CONTROVERTED BY THE AO, THERE WAS NO REASON FOR DISBELIEVING ON THE SAME. THE DECISION OF THE HON'BLE INDORE BENCH IN THE CASE OF STL EXTRUSION (P) LIMIT ED, IS DIRECTLY APPLICABLE ON THE FACTS OF THE PRESENT CASE, THE SAID DECISION WAS ALSO APP ROVED BY THE HON'BLE JURISDICTIONAL HIGH COURT AS REPORTED IN 333 ITR 269 / 215 CTR 429 . THE DECISIONS OF HON'BLE DELHI HIGH COURT IN THE CASE OF OASIS HOSPITALITIES (P) L IMITED 333 ITR 19(DEL) IS ALSO SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT CAS E BECAUSE IN THAT CASE DIRECTORS OF SAID COMPANIES WERE NOT PRODUCED AND THERE WAS ADV ERSE FINDING REGARDING SUCH SHARE HOLDERS BY INVESTIGATION WING, YET THE ADDITI ON OF SHARE APPLICATION COULD NOT BE SUSTAINED AS THE HON'BLE HIGH COURT HELD THAT PRIMA RY ONUS WAS DISCHARGED BY ASSESSEE BY PRODUCING PAN, BANK ACCOUNT DETAILS COP IES OF INCOME TAX RETURNS OF SHARE APPLICANTS ETC. HON'BLE GUJARAT HIGH COURT IN THE C ASE OF RANCHOD JIVABHAI KANHAVA REPORTED ON 21 TAXMANN.COM 159 ALSO DEFINES THE PRO CEDURES FOR MAKING ADDITION U/S 68 WHEREIN IT WAS CATEGORICALLY MENTIONED BY THE HO N'BLE COURT THAT THE ASSESSING OFFICER OF THE APPELLANT COMPANY MUST REFER THE MAT TER TO THE ASSESSING OFFICER OF THE SHARE HOLDERS COMPANY AND ON RECEIPT OF THE NEGATIV E FINDING THE SAME WAS. MADE AVAILABLE TO THE ASSESSEE FOR HIS COMMENTS AND PROC EED ACCORDINGLY BUT IN THE PRESENT CASE, THE AO UTTERLY FAILED TO EXAMINE THE ISSUE IN RIGHT PROSPECT AND MERELY ON ACCOUNT OF NON- SERVICE OF THE LETTER U/S 133(6) OF THE ACT , TAKEN A NEGATIVE NOTE WHICH IN MY CONSIDERED OPINION WAS NOT JUSTIFIABLE. I AM THEREF ORE OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN IGNORING THE DOCUMENTS AS FILED BY THE APPELLANT WHICH PRIMA FACIE PROVED THE IDENTITY AND GENUINENESS OF THE SHARE APPLICATION M ONEY. THE ADDITION FOR RS 1,75,00,000/- MADE BY THE AO IS THEREFORE NOT MAINT AINABLE AND HEREBY DELETED. . ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 88 4.1] THE AO WHILE MAKING ADDITION FOR RS 2,00,00,00 0/- IN RESPECT OF 7 [ SEVEN ] COMPANIES BASED ON THE REPORT OF THE ADD! DIT(INVES TIGATION] AND DDIT (INVESTIGATION] MUMBAI AND STATEMENT OF SHRI MUKESH CHOKSI AND SHRI JAYESH SAMPAT. IN THE PRESENT CASE, THE AO ISSUED LETTER U/S 133(6) OF THE INCOME TAX ACT WHICH WERE DULY SERVED AND REPLIES WERE ALSO RECEIVED. HOWEVER, THEY HAVE STAT ED THAT THEIR DATA ARE IN POSSESSION OF THE INCOME TAX DEPARTMENT BUT THE LETTER WAS DUL Y SERVED AND REPLIES WERE RECEIVED. THE DDIT(INVESTIGATION] ON THE BASIS OF STATEMENT O F SHRI MUKESH CHOKSI AND SHRI JAYESH SAMPAT AS RECORDED IN THE YEAR 2009 AND 2010 PREPARED THEIR REPORT AND SUBMITTED TO THE AO. THE AO ON THE BASIS OF REPORT AS RECEIVED FROM HIS COUNTERPART ADDED ENTIRE AMOUNT OF SHARE CAPITAL OF RS 2,00,00, 000/- TO THE INCOME OF THE APPELLANT. I FIND THAT THE APPELLANT DURING THE COURSE OF ASSE SSMENT AND APPELLATE PROCEEDING OBJECTED TO THE REPORT AND ADDITION AS MADE TO THE INCOME OF THE APPELLANT. THE MAIN POINTS AS RAISED FOR OBJECTING THE ADDITIONS ARE SU MMERISED AS UNDER :- [I] COMMISSION WAS ISSUED BY AO TO THE ADDL. DIT ( INVESTIGATION ] IN THE YEAR 2011- 12. HOWEVER, ON RECEIPT OF THE COMMISSION NO SEPARA TE INQUIRY WAS CONDUCTED BY HIS COUNTERPART OF MUMBAI. [II] THE STATEMENT OF SHRI MUKESH CHOKSI AND SHRI JAYESH SAMPAT AS REFERRED IN THE REPORT WAS RECORDED IN THE YEAR 2009 AND IN 2010. H OWEVER, NO FRESH STATEMENT WERE RECORDED AFTER ISSUANCE OF THE COMMISSION. [III] THE STATEMENT AS REFERRED WAS RECORDED BEHIN D AND BACK OF THE ASSESSEE WHEREIN OPPORTUNITY OF CROSS EXAMINATION WAS NOT ALLOWED TO THE APPELLANT. HENCE, THESE STATEMENT CANNOT BE RELIED AGAINST THE APPELLANT AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF KISHAN CHAND CHELLARAM VS CIT AS REP ORTED IN 125 ITR 713. [IV] IN THE STATEMENT OF SHRI MUKESH CHOKSI AND SH RI JAYESH SAMPAT AS REFERRED DOES NOT MENTION THE NAME OF THE ASSESSEE. HENCE, NO ADV ERSE INFERENCE CAN BE DRAWN FROM THE SAME. I FIND THAT-THE ADDL DIT (INVESTIGATION) MUMBAI GRO SSLY ERRED IN NOT MAKING SEPARATE, INQUIRY ON RECEIPT OF THE COMMISSION. HE SIMPLY REL IED ON THE STATEMENT PREVIOUSLY RECORDED WHICH IN MY VIEW IS NOT THE CORRECT APPROA CH. IT IS ALSO SETTLED POSITION OF LAW ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 89 THAT HO STATEMENT CAN BE USED AGAINST THE ASSESSEE; -UNTIL AND UNLESS AN OPPORTUNITY FOR CROSS EXAMINATION WAS ALLOWED. ACCORDINGLY, STATEME NTS OF SHRI MUKESH CHOKSI AND SHFI JAYESH SAMPAT AS RECORDED BEHIND THE BACK OF T HE APPELLANT CANNOT BE VALIDLY USED AGAINST APPELLANT AS THE PRINCIPAL OF NATURAL JUSTICE IS NOT SATISFIED. FOR THIS PROPOSITION RELIANCE IS PLACED ON THE DECISION OF A PEX COURT IN CASE OF KISHAN CHAND CHELARAM 125 ITR 713 (SC). THE ; APPELLANT HAD FILED COPY OF SHARE APPLICATION FORM , CONFIRMATION LETTER, COPY OF BANK ACCOUNT OF THE SH ARE HOLDERS, MEMORANDUM AND ARTICLE OF ASSOCIATION AND INCOME TAX RETURN. THE AO ALSO F AILED TO REFER THE MATTER TO THE ASSESSING OFFICER WHERE SUCH SHARE APPLICANTS .ARE REGULARLY ASSESSED TO TAX. THE APPELLANT ALSO RELIED ON THE DECISION OF THE HON'BL E MUMBAI BENCH IN THE CASE OF MRS RASILA N GADA [ APPEAL NO ITA NO 1773/MUM/ 2010 DT 08-08-2012 ], IN THAT CASE ON THE BASIS OF STATEMENT OF SHRI MUKESH CHOKSI, THE AMOUN T OF LONG TERM CAPITAL GAIN WAS ASSESSED AS NON- GENUINE AND ADDED TO THE INCOME OF THAT ASSESSEE. HOWEVER, HON'BLE BENCH WHILE DECIDING THE APPEAL REFERRING THE OTHER DECISIONS OBSERVED THAT THE AO HAD NOT AFFORDED OPPUTNITUNIY OF CROSS EXAMINATION OF S HRI MUKESH CHOKSI TO THE APPELLANT AND ALSO NOTED THAT NAME OF THE APPELLANT WAS NOT M ENTIONED AS BENEFICIARY IN HIS STATEMENT AND THEREFORE HON'BLE BENCH HAS ACCEPTED THE AMOUNT OF LONG TERM CAPITAL GAIN AS GENUINE ONE. SIMILAR VIEW WAS EXPRESSED BY HON'BLE MUMBAI BENCH IN THE CASE OF SMT DURGA DEVI MUNDRA [ APPEAL NO ITA NO 1175/MU M/ 2012 DT 01-06-2012 ]. HON'BLE JAIPUR BENCH OF ITAT IN THE CASE OF BHARTI SYNTEX LIMITED VS DCIT AS REPORTED IN 19 TAXMANN.COM 361 ON SOME WHAT SIMILAR FACTS AS OF THE ASSESSEE HAS HELD THAT, NO CROSS EXAMINATION WAS ALLOWED TO THE ASSESSEE. T HEREFORE, ADVERSE INFERENCE CANNOT BE DRAWN ONLY ON THE STATEMENT OF SHRI MUKES H CHOKSI. HON'BLE BENCH FURTHER NOTED THAT ALL OTHER NECESSARY DETAILS HAVE BEEN FI LED BEFORE THE AO, THE AMOUNT WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUE, SHARE APPLIC ANT COMPANIES ARE ASSESSED TO TAX IN MUMBAI, CONFIRMATION ALONGWITH COPIES OF SHA RE CERTIFICATE, BANK STATEMENT, MEMORANDUM AND ARTICLE OF ASSOCIATION HAVE ALSO BEE N FILED. HON'BLE BENCH ALSO REFERRED THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF KISHANCHAND CHELLARAM VS CIT AS REPORTED IN 125 ITR 713 AND HELD THAT ADDITI ON U/S 68 IS NOT JUSTIFIED IN THE CASE OF THAT COMPANY. THE FACTS OF THE PRESENT APPEAL IN HAND IS ALSO SIMILAR, THE APPELLANT HAS PROPERLY DISCHARGED ONUS LYING ON IT. THE IDENT ITY OF THE SHARE HOLDERS COMPANIES ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 90 ALSO STAND PROVED. IF THE AO HAS ANY DOUBT ABOUT TH E GENUINENESS OF THE SHARE APPLCIATION MONEY, IN THAT CASE, NECESSARY ADDITION IS TO BE MADE IN THE CASE OF SHARE APPLICANT COMPANIES BUT IN NO CASE IN THE HAND OF T HE ASSESSEE COMPANIES AS HELD BY HON'BLE APEX COURT IN CASE OF LOVELY EXPORT P. LTD. 216 CTR 195 (SC). THE DECISIONS OF THE HON'BLE DELHI HIGH COURT, HON'BLE GUJARAT HIGH COURT AND VARIOUS OTHER BENCHES ALSO SUPPORT THE CASE OF THE APPELLANT. THE APPELLANT AL SO FILED THE LIST OF SHARE ALLOTTED WHICH SHARE CERTIFICATE NOS AND FOLIO NUMBER AND RETURN O F ALLOTMENT AS FILED WITH THE REGISTRAR OF COMPANIES WHEREIN NAME OF ALL THE SHARE HOLDERS HAVE DULY BEEN INCORPORATED. I AM THEREFORE OF THE CONSIDERED OPINION THAT THE AO ON THE FACTS OF THE PRESENT CASE WAS NOT JUSTIFIED IN ADDING THE AMOUNT OF SHARE APPLICATION MONEY OF RS 2,00,00,000/- TO THE INCOME OF THE APPELLANT. I THEREFORE DIRECT THE AO TO DELETE THE ADDITION SO MADE TO THE INCOME OF THE APPELLANT BECAUSE WITHOUT ANY FURTHER EXAMINATION BY AO FINDING OF INVESTIGATION WING CANNOT BE TAKEN AS GOSPEL TRUTH WHEN NAME OF ASSESSEE DOES NOT APPEAR IN STATEMENT AS HELD IN CASE OF EXCELLENCE T OWN PLANNING P. LTD. [APPEAL NO. ITA NO. 871/DEL/2010 DATED 25.02.2012], OASIS HOSPI TALITIES P. LTD. 333 ITR 119 (DEL) AND GANGESHWARI METAL P. LTD. ITA NO. 597/2012 DATE D 21/01/2013 REPORTED IN 84 CCIT 037.THE APPELLANT ACCORDINGLY GET RELIEF OF RS 2,00 ,00,000/-. 4.2] IN GROUND NO 2 OF THE PRESENT APPEAL, THE APPE LLANT HAS CHALLENGED THE ADDITION OF RS 2,00,000/- MADE ON ACCOUNT OF ALLEGED EXPENSE S AS INCURRED FOR ARRANGING THE SHARE CAPITAL OF RS 2,00,00,000/- FROM SEVEN COMPAN IES OF SHRI MUKESRI CHOKSI. THE SAID ADDITION WAS MADE BY THE AO ON MERE; PRESUMPTI ON WHICH IN ANY CASE IS NOT SUSTAINABLE, I THEREFORE DIRECT THE AO TO DELETE TH E ADDITION SO MADE TO THE INCOME OF THE APPELLANT COMPANY. 3.5 THE LD CIT DR DURING THE COURSE OF HEARING BEFO RE THE BENCH ARGUED THAT SHARE PREMIUM OF RS 90/- PER SHARE WAS RECEIVE D BY THE ASSESSEE. THE LD. DR SUBMITTED BEFORE US THAT IN THIS CASE, T HE STATEMENT OF MR. JAYESH SAMPAT WAS RECORDED AND JAYANT SAMPAT HAS AD MITTED THAT ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 91 ASSESSEE HAS INTRODUCED HIS OWN UNACCOUNTED CASH TH ROUGH 7 COMPANIES AND PAID COMIISSION @30 PAISE TO 1 RUPEE. MR. JAYES H SAMPAT IS A PERSON WHO SIGNGS THE SHARE APPLICATION DOCUMENT. HE HIMSE LF HAS UNCOVERED THE ENTIRE PROCESS. THE STATEMENT OF MUKESH CHOUKSEY, K AMAL KISHORE RATHI WERE RECORDED AND ON THE BASIS OF THIS, THE ADDITIO N HAS BEEN MADE, THEREFORE, AS PER FOLLOWING DECISIONS, THE LD. CIT( A) IS NOT JUSTIFIED IN HIS ACTION. AS REGARD SHARE PREMIUM OF RS 90/- PER SHAR E IS CONCERN, THE ASSESSEE COMPANY IS BELONGING TO THE AGRAWAL GROUP OF INDORE. THE TOTAL TURNOVER AND PROFIT OF THE ASSESSEE COMPANY IS REGU LARLY INCREASING FROM YEAR TO YEAR. THAT IN CASE OF A PRIVATE LIMITED COM PANY, THE AMOUNT OF SHARE PREMIUM IS TO BE DECIDED MUTUALLY BY THE SHAR E APPLICANT AND THE ASSESSEE COMPANY DEPENDING UPON THE VARIOUS FACTORS . BUT, IN THIS CASE, THE ASSESSEE HAS INTRODUCED UNACCOUNTED MONEY BY SH ARE PREMIUM AND THAT HAS BEEN PROVED BY THE STATEMENT OF THREE PERS ONS. THE ASSESSING OFFICERS ACTION MAY BE UPHELD. S.NO REFERENCE OF DECISION CITATION OF THE DECISION 1 CIT VS KORLAY TRADING CO. LTD 232 ITR 820 [ CALCU TTA] 2 N TARIKA PROPERTY INVEST (P) LTD 51 TAXMANN.COM 387 [SC] 3 CIT VS N R PORTFOLIO (P) LTD 42 TAXMANN.COM 339 [ DELHI] 4 GAYATHRI ASSOCIATES 41 TAXMANN.COM 526 [ AP 5 CIT VS FOCUS EXPORTS (P) LTD 51 TAXMANN.COM 46 [ DELHI] ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 92 6 CIT VS P MOHANKALA 291 ITR 278 [SC] 7 CIT VS MAF ACADEMY (P) LTD 42 TAXMANN.COM 377 [D ELHI] 8 SUBHLAKSHMI VANIJYA (P) LTD 60 TAXMANN.COM 60 [ KOLKATA] 9 AGRAWAL COAL CORPORATION (P) LTD 19 TAXMANN.COM 209 [ INDORE] 10 CIT VS NOVA PROMOTERS & FINLEASE [P] LTD 342 ITR 169 [DELHI] 3.6 THE LD. AR HAS FILED WRITTEN SUBMISSION WHICH R EADS AS UNDER: AS MENTIONED ABOVE THAT LD. ASSESSING OFFICER HAS ADDED AN AMOUNT OF RS. 1,75,00,000/- BEING SHARE APPLICATION MONEY/ SHARE CAPITAL RECEIVED FROM PERSONS MENTIONED IN S.NO. 1 TO S. NO. 3 OF ABOVE T ABLE FOR THE REASON THAT NOTICE ISSUED BY HIM U/S 133 (6) OF THE INCOME TAX ACT WERE RECEIVED UNSERVED.THE ASSESSEE HAD CAME TO KNOW THAT IN CASE OF SHARE APPLICANTS MENTIONED AT S.NO. 1 OF THE ABOVE MENTIONED TABLE T HERE WAS TYPOGRAPHICAL ERROR IN MENTIONING THE POSTAL ADDRESS. AS REGARDS PARTIE S MENTIONED IN S.NO. 2 & 3 IT WAS SUBMITTED TO THE LD. A.O. THAT NAME OF THE SAID COMPANIES AND POSTAL ADDRESS BOTH HAVE BEEN CHANGED HENCE IT WAS REQUEST ED TO THE AO. TO ISSUE FRESH NOTICE U/S 133(6) TO THE SAID PARTIES. HOWEVE R, THE LD. A.O. HAD NOT ISSUED THE SAME.THAT INVESTMENT OF RS 50,00,000/- ,RS. 75, 00,000/- AND RS. 50,00,000/- WERE MADE IN THE SHARE CAPITAL OF THE ASSESSEE COMP ANY BY M/S DOLDRUM INVESTMENT & FINANCE LIMITED, M/S SIDH HOUSING DEVE LOPMENT CO. LTD. AND M/S GYANESHWAR TRADING & FINANCE CO. LTD.THE ASSESSEE D URING THE COURSE OF ASSESSMENT PROCEEDING AND ALSO BEFORE THE LD. CIT(A ) THE ASSESSEE HAD FILED COMPLETE DOCUMENTS TO JUSTIFY THE IDENTITY AND GENU INENESS OF THE AMOUNT RECEIVED BY IT FROM SAID PARTY. COPIES OF THE SAME ARE ALSO FILED BEFORE THE HONBLE BENCH ON PAGE 141 TO 413 OF THE PAPERBOOK. COMPANY WISE DETAILS OF DOCUMENTS ARE FILED ON FOLLOWING PAGES:- S.NO. NAME OF SHARE APPLICANT AMOUNT PAGES OF ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 93 ADDED U/S 68 PAPER BOOK 01. M/S DOLDRUM INVESTMENT & FINANCE P. LTD. 50,00,000 141 TO 197 02. M/S SIDH HOUSING DEVELOPMENT CO. LTD. (NAME CHANGED TO BHADRAWATI ISPAT & ENERGY LTD.) 75,00,000 208 TO 304 03. M/S GYANESHWAR TRADING & FINANCE CO. LTD. (NAME CHANGED TO BHADRAWATI STEEL & URJA LTD.) 50,00,000 314 TO 413 TOTAL (1 TO 3) 1,75,00,000 THUS WHEN THE ASSESSEE HAD FILED COMPLETE SETS OF PAPERS WHICH ALSO INCLUDES INCOME TAX RETURN AND BALANCE SHEET FOR THE YEAR UN DER APPEAL AND MORE SO ON PERUSAL OF THE BALANCE SHEET YOUR HONOUR WILL FIND THAT THE INVESTMENT IN THE UNQUOTED EQUITY SHARES AS SHOWN BY THE SHARE INCLUD ES THE AMOUNT INVESTED INVESTMENT IN THE ASSESSEE COMPANY THE IDENTITY OF SAID SHARE APPLICANT IS NOT AT ALL DOUBTFUL. HENCE, THERE IS NO DOUBT ABOUT THE IN VESTMENT MADE BY THE SAID COMPANY IN THE SHARE CAPITAL OF THE ASSESSEE COMPAN Y. THE INCOME TAX RETURN AS FILED WITH THE INCOME TAX DEPARTMENT ON REGULAR BASIS ALSO PROVED THE IDENTITY OF THE SHAREHOLDER AND GENUINENESS OF THE SHARE CAP ITAL.THAT IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT POSTAL ADDRESS ON WHICH INQUIRY WAS MADE WAS OLD. THE DEPARTMENT HAS ALSO NEW ADDRESS IN ITS POSSESSI ON FROM THE INCOME TAX RETURN OF THAT SHAREHOLDERS COMPANY AND ALSO FROM T HE ROC WEBSITE. THE ASSESSEE FROM THE DOCUMENTS ALSO PROVED THE GENUINE NESS OF THE SHARE CAPITAL. HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN A DDING THE SAME TO THE INCOME OF THE ASSESSEE. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING HAS REQUESTED TO THE SAID SHARE APPLICANTS TO APPEAR PE RSONALLY BEFORE THE A.O. AND PROVIDE ALL THE INFORMATION AS DEMANDED BY THE ASSE SSING OFFICER WHO IN TURN HAD APPOINTED A C.A. HAVING VALID POWER OF ATTORNEY ON THEIR BEHALF TO APPEAR ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 94 BEFORE A.O. THAT SHRI SUNIL KUMAWAT C.A. , AS APPO INTED BY ALL THESE THREE COMPANIES HAD PERSONALLY APPEARED BEFORE THE A.O. O N BEHALF OF THESE SHARE APPLICANTS AND FILED CONFIRMATION LETTERS, PHOTOCOP IES OF INCOME TAX RETURNS, BALANCE SHEETS AND BANK STATEMENTS OF THESE COMPANI ES AS DEMANDED IN THE LETTER AS ISSUED U/S 133(6) OF THE INCOME TAX ACT. THAT IN THE CASE OF THE ABOVE ASSESSEE FOLLOWING FACTS WERE DULY ACCEPTED BY THE ASSESSING OFFICER AND THESE FACTS ARE NOT IN DISPUTE:- S.NO FACTS OF THE CASE NOT IN DISPUTE BY THE AO 1 THE AMOUNT OF SHARE APPLICATION MONEY WERE RECEIV ED THROUGH AN ACCOUNT PAYEE CHEQUES 2 PAN NO IN RESPECT OF ALL THE SHAREHOLDERS HAVE BE EN PROVIDED 3 COPY OF BANK STATEMENT OF ALL THE SHAREHOLDERS HA VE BEEN PROVIDED 4 COPY OF BALANCE SHEET OF THE SHAREHOLDERS COMPANY ALSO BEEN PROVIDED AS FAR AS POSSIBLE 5 COPY OF AFFIDAVIT AS SIGNED BY THE DIRECTOR HAS A LSO BEEN PROVIDED 6 MEMORANDUM AND ARTICLE OF ASSOCIATION HAS ALSO BE EN PROVIDED 7 DETAIL AS FURNISHED BY THE ASSESSEE WAS FOUND COR RECT AND PROPER. THE DOCUMENTS AS FILED BY THE ASSESSEE NOT FOUND WR ONG OR FABRICATED. THUS THE ASSESSEE THROUGH ITS CHARTERED ACCOUNTANT S HAD FILED SUFFICIENT DOCUMENTS AS TO JUSTIFY THE IDENTITY OF THE SHAREHO LDERS AND GENUINENESS OF THE SHARE APPLICATION MONEY RECEIVED FROM THE SHARE APP LICANTS HOWEVER THE A.O DID NOT RELIED UPON THE DOCUMENTS FILED DURING THE COUR SE OF ASSESSMENT PROCEEDING AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. M UMBAI BENCH OF ITAT IN ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 95 THE CASE OF ACIT VS KRISHNA SHEET PROCESSORS P LIMI TED [ APPEAL NO ITA NO 546/ MUM/ 2013 DT 30-06-2015 FOR THE ASST YEAR 2009 -10 ]. THAT IN VIEW OF THE ABOVE IT IS SUBMITTED THAT ADDITION OF RS 1,75,00,0 00/- IN RESPECT OF SHARE CAPITAL RECEIVED BY THE ASSESSEE COMPANY FROM THE ABOVE THR EE PARTIES AS MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT WAS NOT CORRECT AND ASSESSEE HAS PROPERLY DISCHARGED THE ONUS LYING ON HIM . THE SAM E HAS THEREFORE RIGHTLY BEEN DELETED BY THE LD. CIT(A). THE ASSESSING OFFICER HA S FURTHER ADDED AN AMOUNT OF RS 2,00,00,000/- RECEIVED FROM FOLLOWING SEVEN (7) COMPANIES AS SHARE APPLICATION MONEY BY RELYING UPON THE STATEMENTS OF THE DIRECTORS/ AUTHORIZED PERSON RECORDED BY DDIT (INV). MUMBAI DURING THE SE ARCH ACTIONS CARRIED OUT AT THEIR PREMISES. S.NO. NAME OF SHARE APPLICANT AMOUNT ADDED U/S 68 01 M/S BUNIYAD CHEMICAL LTD. AABCB6954G 50,00,000 02. M/S ALPHA CHEMIE TRADE AGENCIES P. LTD. AADCA9890L 25,00,000 03. M/S GOLD STAR FINVEST P. LTD. AAACG3432H 25,00,000 04. M/S MAHASAGAR SECURITIES P. LTD. AABCR1593B 25,00,000 05. M/S MIHIR AGENCIES P. LTD. AABCH7898H 25,00,000 06. M/S ALLIANCE INTERMEDIATERIES & NETWORK P. LTD. AACCA9750E 25,00,000 07. M/S TALENT INFOWAY LTD. AACCT9444L 25,00,000 TOTAL 2,00,00,000 THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DINGS HAD FILED COMPLETE DETAILS IN RESPECT OF SHARE APPLICATION MONEY RECEI VED FROM ALL THE SAID PARTIES INCLUDING THE FOLLOWING:- S.NO. PARTICULARS 1 BALANCE SHEET & PROFIT & LOSS ACCOUNT ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 96 2 COPY OF PAN CARD 3 ACKNOWLEDGMENT OF INCOME TAX RETURN 4 COPY OF ITS BANK ACCOUNT DULY REFLECTING THE SHAR E APPLICATION MONEY RECEIVED FROM SAID COMPANIES. 5 COPY OF SHARE APPLICATION FORM ALONG WITH ENCLOSU RES LIKE BOARD RESOLUTION. THUS THE ASSESSEE HAD FILED SUFFICIENT DOCUMENTS AS TO JUSTIFY THE IDENTITY OF THE SHAREHOLDERS AND GENUINENESS OF THE SHARE APPLICATI ON MONEY RECEIVED FROM THE SAID SHARE APPLICANTS DURING THE ASSESSMENT PROCEED INGS AS WELL BEFORE THE LD. CIT(A) ALSO HOWEVER, THE A.O DID NOT RELIED UPON TH E DOCUMENTS FILED BY THE ASSESSEE AND ADDED THE SAME TO THE INCOME OF THE AS SESSEE. THE PARTY WISE DOCUMENT AS FILED BY THE ASSESSEE IN SUPPORT OF THE GENUINENESS OF THE SHARE APPLICATION MONEY ARE ALSO FILED ON PAGE 426 TO 868 OF OUR PAPER BOOK AS FILED BEFORE YOUR HONOUR. S.NO. NAME OF SHARE APPLICANT AMOUNT ADDED U/S 68 PAGE NOS. 01. M/S BUNIYAD CHEMICAL LTD. 50,00,000 426 TO 549 02. M/S ALPHA CHEMIE TRADE AGENCIES P. LTD. 25,00,0 00 550 TO 603 03. M/S GOLD STAR FINVEST P. LTD. 25,00,000 604 TO 627 04. M/S MAHASAGAR SECURITIES P. LTD. 25,00,000 628 TO 668 05. M/S MIHIR AGENCIES P. LTD. 25,00,000 669 TO 712 06. M/S ALLIANCE INTERMEDIATERIES & NETWORK P. LTD. 25,00,000 713 TO 745 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 97 07. M/S TALENT INFOWAY LTD. 25,00,000 746 TO 868 TOTAL ADDITION 2,00,00,000 THAT IN COMPANIES WHERE NOTICES U/S 133(6) WERE ISS UED BY THE A.O. BUT THEY WERE RETURNED UNSERVED, THE ASSESSEE HAS PRODUCED T HE AUTHORIZED REPRESENTATIVE OF THE COMPANY BEFORE A.O. IN REST O F THE CASE THE NOTICE ISSUED U/S 133(6) OF THE INCOME TAX ACT WERE DULY SERVED A ND REPLIED BY THE SHARE APPLICANTS. THE SAID THING ALSO PROVES THE IDENTITY AND CAPACITY OF THE SHARE APPLICANTS.THE ENTIRE AMOUNT OF SHARE APPLICATION M ONEY WAS RECEIVED BY THE ASSESSEE THROUGH AN ACCOUNT PAYEE CHEQUES. CONFIRMA TION LETTER HAVE ALSO BEEN FILED. SHARE APPLICATION FORM WERE ALSO FILED NOTIC E U/S 133(6) HAS ALSO BEEN SERVED OR WHERE IT HAS NOT BEEN SERVED THE AUTHORIZ ED REPRESENTATIVE HAS APPEARED PERSONALLY BEFORE THE LD. A.O. THUS THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF SHARE APPLICATION MONEY AS RECEIVED B Y THE ASSESSEE. MERELY BECAUSE THE DIRECTORS OF THE APPLICANTS COMPANIES H AVE STATED IN THE STATEMENT RECORDED THAT THEY ARE INVOLVED IN PROVIDING CERTAI N ACCOMMODATION ENTRIES IN LTCG AND STCG ETC. IT CANNOT BE PRESUMED THEY HAVE PROVIDED ACCOMMODATION ENTRY TO THE APPELLANT ALSO IN THE FORM OF SHARE AP PLICATION MONEY. THE LD. A.O. HAD PROVIDED COPY OF STATEMENT OF SHRI KAMAL KISHOR E RATHI ,SHRI SHRI MUKESH CHOWKSI AND SHRI JAYESH SAMPAT TO THE ASSESSEE FOR ITS COMMENTS.THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS ITSE LF HAS CLARIFIED THE POSITION THAT IT HAS NOT RECEIVED ANY SHARE APPLICATION MONE Y FROM ANY OF THE COMPANIES BELONGING TO SHRI KAMLAL KISHORE RATHI. THUS HIS ST ATEMENT HAS NOT RELEVANT FOR MAKING ANY ADDITION IN ITS HANDS.5.7.3] SHRI MUKESH CHOKSI ALSO HIS STATEMENT ALSO HAS NOWHERE COMMITTED THAT HE HAS GIVEN ANY AC COMMODATION ENTRY TO THE ASSESSEE COMPANY. THUS NO ADDITION IS JUSTIFIABLE O N THE BASIS OF HIS STATEMENT. LIKEWISE SHRI JAYESH SAMPAT HAS ALSO IN HIS STATEME NTS HAS NOWHERE MENTIONED TO HAVE ENTERED INTO ANY BOGUS TRANSACTION WITH THE ASSESSEE. THE ASSESSING OFFICER ISSUED COMMISSION IN FAVOUR OF ADDL DIT [I NVESTIGATION] ,MUMBAI. THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 98 REPORT WAS ALSO RECEIVED FROM THE INVESTIGATION WIN G MUMBAI. ON THE BASIS OF THAT REPORT, THE ASSESSING OFFICER ADDED ENTIRE AMO UNT OF SHARE CAPITAL TO THE INCOME OF THE ASSESSEE. THE REPORT AS RECEIVED IN R ESPONSE TO THE COMMISSION IN THE YEAR 2011 FROM THE INVESTIGATION WING OF THE MU MBAI WAS DEFECTIVE AND NOT PROPER. THE AO ISSUED COMMISSION IN THE YEAR 2011. HOWEVER, NO FRESH INQUIRY WAS MADE BY THE INVESTIGATION WING BUT SIMPLY ON TH E BASIS OF INFORMATION AVAILABLE IN THEIR POSSESSION, REPORT WAS PREPARED AND SUBMITTED TO THE ASSESSING OFFICER. STATEMENT OF SHRI KAMAL KISHORE RATHI AS RECORDED ON 22-10- 2010 MAINLY IN RESPECT OF LONG TERM CAPITAL GAIN, S TATEMENT OF SHRI MUKESH CHOKSI AS RECORDED ON 25-11-2009, ON 11-12-2009 AND ON 03-02-2010 AND STATEMENT OF SHRI JAYESH SAMPAT AS RECORDED ON 14-0 5-2010 WERE REFERRED IN THE REPORT AS SUBMITTED BY THE AO. THAT IN ALL THEI R STATEMENT NAME OF THE ASSESSEE COMPANY WAS NOT REFERRED. THAT IT IS ALSO SETTLED POSITION OF THAT STATEMENT RECORDED BEHIND AND BACK OF THE ASSESSEE CANNOT BE RELIED AGAINST THE ASSESSEE. THE HONBLE SUPREME COURT IN THE CASE OF KISHINCHAND CHELLARAM V. CIT [1980] 19 CTR (SC) 360 /[1980] 125 ITR 713 (SC). THAT IN THE PRESENT CASE, NO INQUIRY WAS MADE INDEPENDENTLY AND THE ASS ESSING OFFICER SIMPLY RELIED ON THE REPORT AS SUBMITTED BY HIS COUNTERPART OF TH E MUMBAI WHICH WAS NOT PROPER. THE SAID REPORT WAS PREPARED ON THE BASIS O F INFORMATION ALREADY IN POSSESSION OF THE DEPARTMENT IN SOME OTHER PROCEEDI NG AND NOT COLLECTED IN THE CASE OF THE ASSESSEE. HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING THE ENTIRE AMOUNT OF SHARE CAPITAL TO THE INCOME OF THE ASSESSEE MERELY ON THE BASIS OF REPORT OF THE ADDL DIT(INVESTIGATION ), MUMBAI.T HE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER, TOTALLY IGNORED THE F ACTS OF THE PRESENT CASE. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING AND IN REPLY DURING THE APPELLATE PROCEEDING HAS SUBMITTED THAT:- S.NO NATURE OF DOCUMENTS 1 THE ASSESSEE HAD RECEIVED THE AMOUNT OF SHARE APP LICATION MONEY THROUGH AN ACCOUNT PAYEE CHEQUES ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 99 2 COPY OF BANK ACCOUNT OF THE SHAREHOLDERS COMPANY HAS ALSO BEEN FILED 3 PAN NO OF ALL THE COMPANIES HAVE BEEN PROVIDED 4 COPY OF AFFIDAVIT OF THE SOME OF THE DIRECTORS OF THE SHAREHOLDERS COMPANIES HAVE BEEN FILED 5 MEMORANDUM AND ARTICLE OF ASSOCIATION 6 BALANCE SHEET OF ALL THE COMPANIES HAVE BEEN FILE D 7 INCOME TAX RETURNS OF ALL THE COMPANIES HAVE BEEN FILED THE ASSESSEE HAS ALSO FILED A CHART OF THE SHARE C APITAL AS RECEIVED BY THE ASSESSEE COMPANY IN THE YEAR UNDER CONSIDERATION WI TH THE FOLLOWING INFORMATION IS ENCLOSED:- S.NO PARTICULARS 1 PA NO OF THE SHARE APPLICANT 2 NO OF SHARES ALLOTTED 3 BREAKUP OF SHARE CAPITAL AND SHARE PREMIUM 4 FOLIO NO OF THE SHAREHOLDER 5 CERTIFICATE NO 6 DISTINCTIVE NOS OF THE SHARE CERTIFICATE COPY OF RETURN OF ALLOTMENT AS FILED WITH THE REGI STRAR OF COMPANIES WHEREIN THE NAME OF ALL THE SHARE APPLICANT HAD DULY BEEN REFLE CTED IS ALSO ENCLOSED. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 100 THAT MUMBAI BENCH OF ITAT IN THE CASE OF ACIT VS K RISHNA SHEET PROCESSORS P LIMITED [ APPEAL NO ITA NO 546/ MUM/ 2013 DT 30-06- 2015 FOR THE ASST YEAR 2009-10 ]. THAT JAIPUR BENCH OF ITAT IN THE CASE OF BHARTI SY NTEX P LIMITED AS REPORTED IN 52 DTR 73/ 137 TTJ 82. AHMEDABAD BENCH OF ITAT IN T HE CASE OF CHARTERED MOTORS P LIMITED VS ACIT [ APPEAL NO IT (SS)A NO 2 6/ AHD/ 2012 DT 28-08-2014 FOR THE ASST YEAR 2008-09 ] MUMBAI BENCH OF ITAT IN THE CASE OF M/S SDB ESTATE PRIVATE LIMITED VS ITO [ APPEAL NO ITA NO 584/ M/ 2015 DT 15-04-2015 ] FOR T HE ASST YEAR 2008-09. MUMBAI BENCH OF ITAT IN THE CASE OF SMT DURGA DEVI MUNDRA [ APPEAL NO ITA NO 1175/MUM/ 2012 DT 01-06-2012 ]. MUMBAI BENCH OF ITAT IN THE CASE OF MRS. RASILA N G ADA [ APPEAL NO ITA NO 1773/ MUM/ 2010 DT 08-08-12. THE ASSESSING OFFICER WHILE ADDING THE SHARE CAPITA L OF RS 3,75,00,000/- TO THE INCOME OF THE ASSESSEE HAS MADE FOLLOWING OBSER VATION IN THE ASSESSMENT ORDER :- THAT 1] THE APPELLANT HAD FILED BALANCE S HEETS, P & L ACCOUNT, IT RETURNS OF ALL THE REMAINING 11 PERSONS FILED WERE FOR THE EARLIER YEARS I.E ASSESSMENT YEARS 2007-08 OR 2008-09. HOWEVER, THE ASSESSEE HAD FILED BALANCE SHEET FOR THE YEAR ENDED ON 31.03.2009 IN THE CASE OF -: (I) M/S DOLDRUM INVESTMENT & FINANCE LIMITED, (II) M/S SIDH HOUSING DEVELOPMENT COMPANY [ NOW KNO WN AS M/S BHADRAWATIISPAT& ENERGY LIMITED] (III) M/S GYANESHWAR TRADING & FINANCE CO LIMITE D [ NOW KNOWN AS M/S BHADRAWATI STEEL URJA LIMITED ]. HOWEVER, THE ASSESSING OFFICER HAS ADDED THE AMOU NT OF SHARE CAPITAL OF THESE COMPANIES TO THE INCOME OF THE ASS ESSEE. HENCE, THIS WAS NOT THE VALID REASON FOR MAKING THE ADDITION TO THE INCOME OF THE ASSESSEE. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 101 THE ASSESSING OFFICER OBSERVED THAT THE BALANCE SHE ET AS FILED BEING OLD, THE NAME OF THE ASSESSEE COULD NOT BE REFLECTED IN THE SAME. HOWEVER, WITH THE BALANCE SHEET AS ENCLOSED FOR THE YEAR ENDED ON 31. 03.2009, THE AMOUNT OF CONSOLIDATED INVESTMENT MADE BY THESE COMPANIES WER E REFLECTED WHICH ALSO INCLUDES THE AMOUNT OF INVESTMENT MADE BY THOSE COM PANIES IN THE SHARES OF THE ASSESSEE COMPANY. BREAKUP OF THE SAME IS AS UNDER:- S.NO NAME OF THE COMPANIES INVESTMENT IN THE UNQUOTED EQUITY SHARES SHOWN BY THE SHAREHOLDER COMPANY INVESTMENT IN THE EQUITY SHARES OF THE ASSESSEE COMPANY WAS MADE 1 DOLDDRUM INVESTMENT & FINANCE P LIMITED 24,05,62,507 50,00,000 2 M/S SIDH HOUSING DEVELOPMENT CO LIMITED 45,83,90,000 75,00,000 [NOW KNOWN AS BHADRAWATIISPAT& ENERGY LTD] 3 M/S GYANESHWAR TRADING & FINANCE LTD 48,08,55,000 50,00,000 [NOW KNOWN AS M/S BHADRAWATI STEEL &URJA LTD] THE ASSESSING OFFICER OBSERVED ATHT THE BANK STATEM ENTS OF THESE INVESTORS SHOW VERY PETTY CREDIT BALANCES IN THE BANK ACCOUNT S AND ONLY AT THE TIME OF ISSUE OF CHEQUE TO THE ASSESSEE THE BALANCES GET PO PULATED BY DEPOSIT IF EQUAL AMOUNT. HOWEVER, THE AMOUNT AS CREDITED IN THE BANK STATEMENT IS THROUGH CHEQUES. THE SHAREHOLDERS COMPANIES PLANNED THEIR A FFAIRS IN SUCH A MANNER THAT THEIR FUNDS NOT KEPT IDLE IN THEIR BANK ACCOUN T. HENCE, NOTHING WRONG WAS DONE IN IT. THAT NO CASH WERE DEPOSITED, PRIOR TO I SSUANCE OF THE CHEQUES TO THE ASSESSEE COMPANY. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 102 THE ASSESSING OFFICER OBSERVED THAT THE INCOME TAX RETURN OF THE SHARE APPLICANT SHOW VERY NEGLIGIBLE OR NIL INCOME IN MAJORITY OF T HE CASES. HOWEVER, THAT INCOME WAS DECLARED OR NOT DEPENDING UPON THE NATURE OF BU SINESS OF THE SHAREHOLDERS. THE ASSESSEE COMPANY CANNOT INTERFERE IN THEIR DAY TO DAY AFFAIRS. HOWEVER, FROM THEIR BALANCE SHEET, THE AMOUNT AVAILABLE IN F ORM OF SHARE CAPITAL AND RESERVE ARE DULY JUSTIFIED INVESTMENT MADE BY THESE COMPANIES IN THE CASE OF THE ASSESSEE COMPANY. A CHART IN TABULAR FORM, JUSTIFIE D THE GENUINENESS OF THE SHARE APPLICATION MONEY/ SHARE CAPITAL IS AS UNDER: - S.NO NAME OF THE COMPANIES SHARE CAPITAL & RESERVE AS ON 31.03.2009 OF THE SHARE APPLICANT INVESTMENT IN THE EQUITY SHARES OF THE ASSESSEE COMPANY WAS MADE 1 DOLDDRUM INVESTMENT & FINANCE P LIMITED 24,05,62,507 50,00,000 2 M/S SIDH HOUSING DEVELOPMENT CO LIMITED 45,83,90,000 75,00,000 [NOW KNOWN AS BHADRAWATIISPAT& ENERGY LTD] 3 M/S GYANESHWAR TRADING & FINANCE LTD 48,08,55,000 50,00,000 [NOW KNOWN AS M/S BHADRAWATI STEEL &URJA LTD] THE INCOME AS DECLARED BY THESE COMPANIES AS ON 31 .03.2009 AND 31.03.2011 ARE AS UNDER:- S.NO NAME OF THE COMPANIES INCOME AS ON 31.03.2009 INCOME AS ON 31.03.2011 1 DOLDDRUM INVESTMENT & FINANCE P LIMITED 40,523 1,92,95,186 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 103 2 M/S SIDH HOUSING DEVELOPMENT CO LIMITED 47,569 22,441 [ NOW KNOWN AS BHADRAWATIISPAT& ENERGY LTD] 3 M/S GYANESHWAR TRADING & FINANCE LTD 46,163 40,921 [NOW KNOWN AS M/S BHADRAWATI STEEL &URJA LTD] THE ASSESSING OFFICER OBSERVED THAT THE SHARE APPLI CANT HAD INVESTED THE AMOUNT IN HAFTY PREMIUM OF RS 90/- PER SHARE OF FAC E VALUE OF RS 10/- WITHOUT EXPECTING ANY RETURN FOR THE SAME. HOWEVER, THE ASS ESSEE COMPANY IS BELONGING TO THE AGRAWAL GROUP OF INDORE. THE TOTAL TURNOVER AND PROFIT OF THE ASSESSEE COMPANY IS REGULARLY INCREASING FROM YEAR TO YEAR. THAT IN CASE OF A PRIVATE LIMITED COMPANY, THE AMOUNT OF SHARE PREMIUM IS TO BE DECIDED MUTUALLY BY THE SHARE APPLICANT AND THE ASSESSEE COMPANY DEPENDING UPON THE VARIOUS FACTORS. IN THE PRESENT CASE, SHRI PURSHOTTM AGRAWAL, FATHER OF ONE OF THE DIRECTOR SHRI PRAVIN AGRAWAL, HIMSELF APPLIED SHARES AT A SAME PR EMIUM ON WHICH THESE WERE ALLOTTED TO THE OTHER SHARE APPLICANT. THE TURNOVER AND THE PROFIT OF THE ASSESSEE COMPANY FOR THE YEAR ENDED ON 31.03.2007, 31.03.200 8 AND 31.03.2009 ARE AS UNDER:- S.NO PARTICULARS 31.03.2007 31.03.2008 31.03.2009 1 TURNOVER 41,01,01,607 48,80,12,857 52,14,26,045 2 PROFIT 1,95,06,994 2,02,78,267 1,89,96,279 3 EPS 5.15 5.35 5.01 4 SHARE CAPITAL 14,77,76,366 15,70,29,868 22,18,58, 472 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 104 &RESERVE 5 BOOK VALUE PER SHARE RS 39/- RS 41/- RS 51/- ACIT VS M/S KRISHNA SHEET PROCESSORS P LIMITED [ AP PEAL NO ITA NO 546/ MUM/ 2013 DT 30-06-2015]. CIT (CENTRAL)-III V/S ANSHIKA CONSULTANTS P LIMITED [APPEAL NO ITA 467/ 2014 DT 16-04-2015 ]. IT IS SUBMITTED THAT THE ASSESSEE HAD FILED SUFFIC IENT DOCUMENTS AS TO JUSTIFY THE IDENTITY OF THE SHAREHOLDERS AND GENUINENESS OF THE TRANSACTIONS. THE AMOUNTS OF SHARE APPLICATION MONEY/ SHARE CAPITAL WERE RECEIVE D THROUGH ACCOUNT PAYEE CHEQUES. THAT, IF FOR ANY REASON THE ASSESSING OFFI CERS WAS NOT SATISFIED WITH THE SOURCE OF AMOUNT INVESTED BY THESE SHARE-HOLDERS IN THAT CASE, NECESSARY ADDITION SHOULD HAVE BEEN MADE IN THE CASE OF THE S HARE-HOLDERS BUT IN NO CASE ANY ADDITION IS JUSTIFIED IN THE CASE OF THE ASSESS EE COMPANY. THE ASSESSING OFFICER INSTEAD OF HAVING ACCEPTING THE SHARE APPLI CATION MONEY AS GENUINE AS IN FACT ADDED THE SAME TO THE TOTAL INCOME OF THE ASSE SSEE. THE SAID VERSION OF THE ASSESSING OFFICER IS NOT CORRECT KEEPING IN CONSIDE RATION THE DECISION OF HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS (P) LIMITE D WHEREIN THE HONBLE APEX COURT HAS CATEGORICALLY HELD THAT EVEN IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM THE ALLEGED BOGUS SHAR EHOLDERS , WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT I N NO CASE THE SAME IS TO BE ADDED TO THE INCOME OF THE ASSESSEE. APEX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED AS REPORTED IN 11 ITJ 357. JURISDICITONAL HIGH COURT IN THE CASE OF CIT VS PEO PLE GENERAL HOSPITAL LTD [ APPEAL NO M.A.I.T NO 27/ 2008 DT 27-06-2013]. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 105 INDORE BENCH IN THE CASE OF STL EXTRUSION (P) LIMIT ED VIDE ORDER DATED 10.05.2010 BEING ITA NO.(SS) 259, 260 /IND/2008. M.P. HIGH COURT IN THE CASE OF CIT V/S STL EXTRUSI ON (P) LTD REPORTED IN 53 DTR 97(2011). ITAT, INDORE BENCH IN THE CASE OF M/S RAJSHREE FINS EC P LTD [APPEAL NO 545/ IND/2010. ITAT, INDORE BENCH, INDORE VIDE ITS ORDER DT 28-03- 2012 IN THE CASE OF M/S MITTAL APPLIANCES LIMITED FOR THE ASST YEAR 2004-05. HONBLE DELHI HIGH COURT VIDE ORDER DT 21-01-2013 IN THE CASE OF GANGESHWARI METAL PVT LTD [ APPEAL NO ITA NO 597/20 12]. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. OAS IS HOSPITALITIES (P) LTD REPORTED IN 333 ITR 119 (2011). THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISIONS AS REPRODUCED ON INNER PAGE NOS 10 TO 28 AND 37 TO 45 OF THE ORDER OF THE LD CIT[A]. LIST OF FEW DECISIONS ALSO ENCLOSED WITH THIS SYNOPSIS ON WHICH THE ASSESSEE ALSO PLACED RELIANCE. GROUND NO. (3) OF DEPARTMENTAL APPEAL THAT IN THE SAID GROUND OF APPEAL THE DEPARTMENT H AS CHALLENGED ADDITION OF RS.2,00,000/- ALLEGED TO HAVE BEEN MADE BY THE ASSE SSEE IN RESPECT OF EXPENSES INCURRED @ 1 % FOR ARRANGING THE ALLEGED A CCOMMODATION ENTRY IN RESPECT OF SHARE CAPITAL RECEIVED BY IT OF RS. 2,00 ,00,000/- U/S 69C OF THE INCOME TAX ACT. IT IS SUBMITTED THAT THE SAID ADDIT ION HAS BEEN MADE U/S 69C NOTIONALLY WITHOUT ANY PROOF AND PURELY ON SURMISES AND CONJECTURES BY ALLEGING THAT THE ASSESSEE MUST HAVE INCURRED ABOUT 1% OF EX PENSES TOWARDS THE SHARE APPLICATION AND SHARE PREMIUM MONEY RECEIVED BY IT OF RS.2,00,00,000. THE LD. A.O. HAS DISCUSSED THE ISSUE RELATED TO ADDITION MA DE U/S 69C ON PAGE 10 PARA 2.13 OF THE ASSESSMENT ORDER. IT SEEMS THAT SAID A DDITION WAS MADE BY THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 106 ASSESSING OFFICER ON THE BASIS OF STATEMENT RECORDE D BY THE INCOME TAX DEPARTMENT IN SEARCH PROCEEDINGS AT MUMBAI AT CHOKS I GROUP OF COMPANIES INSPITE OF THE FACT THAT THEY HAVE NOT COMMITTED AN Y SUCH FACT IN THE CASE OF ASSESSEE AND ASSESSEE HAS ALSO NOT CONFRONTED ANY O F THE ABOVE PERSONS IN RESPECT OF THE SUCH CHARGE. THE SAID ADDITION WAS M ADE PURELY ON PRESUMPTIONS AND CONJECTURES AND WITHOUT ANY BASIS.THE LD. CIT(A ) HAS DISCUSSED THE SAID ISSUE ON PAGE 51 AND 52 INM PARA 4.2 OF HIS ORDER. THE LD. CIT(A) HAS DELETED THE SAID ADDITION BY OBSERVING THAT SAID ADDITION W AS MADE BY THE LD. A.O. PURELY ON PRESUMPTION. THAT IN VIEW OF THE ABOVE IT IS SUB MITTED THAT ADDITION OF RS.2,00,000/- MADE BY THE ASSESSING OFFICER ON HIS OWN THEORY IS PATENTLY WRONG AND HAS RIGHTLY BEEN DELETED BY THE LD. CIT(A). THA T ADDITION OF RS 2,00,000/- MADE TO THE INCOME OF THE ASSESSEE WAS IN CONSEQUEN CE TO THE ADDITION TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF SHARE APPLICAT ION. THUS, HONBLE BENCH IS HEREBY REQUESTED TO APPROV THE ORDER OF THE LD CIT[ A}. 3.7 WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS RECEIVED SHARE APPLICATION/SHARE CAPITAL IN THE YEAR UNDER C ONSIDERATION WHICH READS AS UNDER: S.NO. NAME OF SHARE APPLICANT PAN NO. AMOUNT ADDED U/S 68 01. M/S DOLDRUM INVESTMENT & FINANCE P. LTD. AACCD5604L 50,00,000 02. M/S SIDH HOUSING DEVELOPMENT CO. LTD. AAKCS6606 H 75,00,000 03. M/S GYANESHWAR TRADING & FINANCE CO. LTD. AACCG7998L 50,00,000 TOTAL (1 TO 3) (A) 1,75,00,000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 107 S.NO. NAME OF SHARE APPLICANT AMOUNT ADDED U/S 68 04. M/S BUNIYAD CHEMICAL LTD. AABCB6954G 50,00,000 05. M/S ALPHA CHEMIE TRADE AGENCIES P. LTD. AADCA9890L 25,00,000 06. M/S GOLD STAR FINVEST P. LTD. AAACG3432H 25,00,000 07. M/S MAHASAGAR SECURITIES P. LTD. AABCR1593B 25,00,000 08. M/S MIHIR AGENCIES P. LTD. AABCH7898H 25,00,000 09. M/S ALLIANCE INTERMEDIATERIES& NETWORK P. LTD. AACCA9750E 25,00,000 10. M/S TALENT INFOWAY LTD. AACCT9444L 25,00,000 TOTAL ( 4 TO 10) (B) 2,00,00,000 TOTAL ADDITION (A + B) 3,75,00,000 3.8 IN RESPECT OF ADDITION OF RS.1,75,00,000/- BEIN G THE SHARE APPLICATION MONEY/SHARE CAPITAL RECEIVED FROM VARIOUS PERSONS, THE NOTICE U/S 133(6) OF THE I.T. ACT WAS NOT SERVED. THE ASSESSEE APPEARED AND REQUESTED THE ASSESSING OFFICER TO ISSUE FRESH NOTICE AND ASSESSE E HAS GIVEN THE POSTAL ADDRESS BUT ASSESSING OFFICER HAS NOT ISSUED THE NO TICES. 3.9 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE HAS FILED THE COMPLETE DOCUMENTS FOR IDENTITY AND GENUINENESS OF THE AMOUNT RECEIVED FROM THE PARTY. ASSESSEE HAS FILED THE SET OF PAPERS WHICH INCLUDE INCOME-TAX RETURNS, BALANCE-SHEET FOR THE YEAR UNDE R APPEAL. THE ASSESSEE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 108 HAS FILED THE INCOME-TAX RETURNS ON REGULAR BASIS A ND PROVED THE IDENTITY OF SHAREHOLDERS AND GENUINENESS OF SHARE CAPITAL. BEFO RE ASSESSING OFFICER, ONE SHRI SUNIL KUMAWAT, CA APPEARED FOR THREE COMPA NIES BEFORE ASSESSING OFFICER AND HE HAS FILED CONFIAMTION LETT ERS, PHOTOCOPIES OF INCOME-TAX RETURNS, BALANCE-SHEET AND BANK STATEMEN T OF THE COMPANY. THE LD. CIT(A) CONSIDERING THE SHARE APPLICATION MO NEY RECEIVED BY THE ASSESSEE HAS DELETED THE ADDITION. THE LD. ASSESSIN G OFFICER HAS FURTHER ADDED AN AMOUNT OF RS 2,00,00,000/- RECEIVED FROM F OLLOWING SEVEN (7) COMPANIES AS SHARE APPLICATION MONEY BY RELYING UPO N THE STATEMENTS OF THE DIRECTORS/ AUTHORIZED PERSON RECORDED BY DDIT ( INV). MUMBAI DURING THE SEARCH ACTIONS CARRIED OUT AT THEIR PREMISES. S.NO. NAME OF SHARE APPLICANT AMOUNT ADDED U/S 68 01 M/S BUNIYAD CHEMICAL LTD. AABCB6954G 50,00,000 02. M/S ALPHA CHEMIE TRADE AGENCIES P. LTD. AADCA98 90L 25,00,000 03. M/S GOLD STAR FINVEST P. LTD. AAACG3432H 25,00,000 04. M/S MAHASAGAR SECURITIES P. LTD. AABCR1593B 25,00,000 05. M/S MIHIR AGENCIES P. LTD. AABCH7898H 25,00,000 06. M/S ALLIANCE INTERMEDIATERIES& NETWORK P. LTD. AACCA9750E 25,00,000 07. M/S TALENT INFOWAY LTD. AACCT9444L 25,00,000 TOTAL 2,00,00,000 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 109 3.10 THE ASSESSEE DURING THE COURSE OF ASSESSMENT P ROCEEDINGS HAD FILED COMPLETE DETAILS IN RESPECT OF SHARE APPLICATION MO NEY RECEIVED FROM ALL THE SAID PARTIES INCLUDING THE FOLLOWING:- S.NO. PARTICULARS 1 BALANCE SHEET & PROFIT & LOSS ACCOUNT 2 COPY OF PAN CARD 3 ACKNOWLEDGMENT OF INCOME TAX RETURN 4 COPY OF ITS BANK ACCOUNT DULY REFLECTING THE SHAR E APPLICATION MONEY RECEIVED FROM SAID COMPANIES. 5 COPY OF SHARE APPLICATION FORM ALONG WITH ENCLOSU RES LIKE BOARD RESOLUTION. 3.11 THUS THE ASSESSEE HAD FILED SUFFICIENT DOCUMEN TS AS TO JUSTIFY THE IDENTITY OF THE SHAREHOLDERS AND GENUINENESS OF THE SHARE APPLICATION MONEY RECEIVED FROM THE SAID SHARE APPLICANTS DURIN G THE ASSESSMENT PROCEEDINGS AS WELL BEFORE THE LD. CIT(A ) ALSO HOWEVER, THE A.O DID NOT RELIED UPON THE DOCUMENTS FILED BY THE ASSESSEE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. THE P ARTY WISE DOCUMENT AS FILED BY THE ASSESSEE IN SUPPORT OF THE GENUINENESS OF THE SHARE APPLICATION MONEY ARE ALSO FILED ON PAGE 426 TO 868 OF THE PAPER BOOK. S.NO. NAME OF SHARE APPLICANT AMOUNT ADDED U/S 68 PAGE NOS. 01. M/S BUNIYAD CHEMICAL LTD. 50,00,000 426 TO 549 02. M/S ALPHA CHEMIE TRADE AGENCIES P. LTD. 25,00,0 00 550 TO 603 03. M/S GOLD STAR FINVEST P. LTD. 25,00,000 604 TO 627 04. M/S MAHASAGAR SECURITIES P. LTD. 25,00,000 628 TO 668 05. M/S MIHIR AGENCIES P. LTD. 25,00,000 669 TO 712 06. M/S ALLIANCE INTERMEDIATERIES& NETWORK P. LTD. 25,00,000 713 TO 745 ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 110 07. M/S TALENT INFOWAY LTD. 25,00,000 746 TO 868 TOTAL ADDITION 2,00,00,000 3.12 THAT IN COMPANIES WHERE NOTICES U/S 133(6) WER E ISSUED BY THE A.O. BUT THEY WERE RETURNED UNSERVED, THE ASSESSEE HAS P RODUCED THE AUTHORIZED REPRESENTATIVE OF THE COMPANY BEFORE A.O . IN REST OF THE CASE THE NOTICE ISSUED U/S 133(6) OF THE INCOME TAX ACT WERE DULY SERVED AND REPLIED BY THE SHARE APPLICANTS. THE SAI D THING ALSO PROVES THE IDENTITY AND CAPACITY OF THE SHARE APPLI CANTS.THE ENTIRE AMOUNT OF SHARE APPLICATION MONEY WAS RECEIVED BY T HE ASSESSEE THROUGH AN ACCOUNT PAYEE CHEQUES. CONFIRMATION LETT ER HAVE ALSO BEEN FILED. SHARE APPLICATION FORM WERE ALSO FILED NOTICE U/S 133(6) HAS ALSO BEEN SERVED OR WHERE IT HAS NOT BEEN SERVE D THE AUTHORIZED REPRESENTATIVE HAS APPEARED PERSONALLY BEFORE THE L D. A.O. THUS THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF S HARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE. MERELY BECAUSE T HE DIRECTORS OF THE APPLICANTS COMPANIES HAVE STATED IN THE STATEME NT RECORDED THAT THEY ARE INVOLVED IN PROVIDING CERTAIN ACCOMMODATIO N ENTRIES IN LTCG AND STCG ETC. IT CANNOT BE PRESUMED THEY HAVE PROVI DED ACCOMMODATION ENTRY TO THE APPELLANT ALSO IN THE FO RM OF SHARE APPLICATION MONEY.THE LD. A.O. HAD PROVIDED COPY OF STATEMENT OF ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 111 SHRI KAMAL KISHORE RATHI ,SHRI SHRI MUKESH CHOWKSI AND SHRI JAYESH SAMPAT TO THE ASSESSEE FOR ITS COMMENTS.THE ASSESSE E AT THE TIME OF ASSESSMENT PROCEEDINGS ITSELF HAS CLARIFIED THE POSITION THAT IT HAS NOT RECEIVED ANY SHARE APPLICATION MONEY FROM ANY O F THE COMPANIES BELONGING TO SHRI KAMLAL KISHORE RATHI. T HUS HIS STATEMENT HAS NOT RELEVANT FOR MAKING ANY ADDITION IN ITS HANDS.SHRI MUKESH CHOKSI ALSO HIS STATEMENT ALSO HAS NOWHERE C OMMITTED THAT HE HAS GIVEN ANY ACCOMMODATION ENTRY TO THE ASSESSE E COMPANY. THUS NO ADDITION IS JUSTIFIABLE ON THE BASIS OF HIS STATEMENT. LIKEWISE SHRI JAYESH SAMPAT HAS ALSO IN HIS STATEMENTS HAS N OWHERE MENTIONED TO HAVE ENTERED INTO ANY BOGUS TRANSACTIO N WITH THE ASSESSEE.THE ASSESSING OFFICER ISSUED COMMISSION IN FAVOUR OF ADDL DIT [INVESTIGATION] ,MUMBAI. THE REPORT WAS ALSO R ECEIVED FROM THE INVESTIGATION WING MUMBAI. ON THE BASIS OF THAT REP ORT, THE ASSESSING OFFICER ADDED ENTIRE AMOUNT OF SHARE CAPITAL TO THE INCOME OF THE ASSESSEE. THE REPORT AS RECEIVED IN RESPONSE TO THE COMMISSION IN THE YEAR 2011 FROM THE INVESTIGATION WING OF THE MU MBAI WAS DEFECTIVE AND NOT PROPER. THE AO ISSUED COMMISSION IN THE YEAR 2011. HOWEVER, NO FRESH INQUIRY WAS MADE BY THE INV ESTIGATION WING BUT SIMPLY ON THE BASIS OF INFORMATION AVAILABLE IN THEIR POSSESSION, ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 112 REPORT WAS PREPARED AND SUBMITTED TO THE ASSESSING OFFICER. STATEMENT OF SHRI KAMAL KISHORE RATHI AS RECORDED O N 22-10-2010 MAINLY IN RESPECT OF LONG TERM CAPITAL GAIN, STATEM ENT OF SHRI MUKESH CHOKSI AS RECORDED ON 25-11-2009, ON 11-12-2009 AND ON 03-02- 2010 AND STATEMENT OF SHRI JAYESH SAMPAT AS RECORDE D ON 14-05- 2010 WERE REFERRED IN THE REPORT AS SUBMITTED BY TH E AO. THAT IN ALL THEIR STATEMENT NAME OF THE ASSESSEE COMPANY WAS NO T REFERRED. IT IS ALSO SETTLED POSITION OF THAT STATEMENT RECORDED BE HIND AND BACK OF THE ASSESSEE CANNOT BE RELIED AGAINST THE ASSESSEE. IN THE PRESENT CASE, NO INQUIRY WAS MADE INDEPENDENTLY AND THE ASS ESSING OFFICER SIMPLY RELIED ON THE REPORT AS SUBMITTED BY HIS COU NTERPART OF THE MUMBAI WHICH WAS NOT PROPER. THE SAID REPORT WAS PR EPARED ON THE BASIS OF INFORMATION ALREADY IN POSSESSION OF THE D EPARTMENT IN SOME OTHER PROCEEDING AND NOT COLLECTED IN THE CASE OF T HE ASSESSEE. HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN A DDING THE ENTIRE AMOUNT OF SHARE CAPITAL TO THE INCOME OF THE ASSESS EE MERELY ON THE BASIS OF REPORT OF THE ADDL DIT(INVESTIGATION), MUM BAI.THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER, TOTALLY IGNORED THE FACTS OF THE PRESENT CASE. THE ASSESSEE DURING THE COURSE OF ASSESSMENT ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 113 PROCEEDING AND IN REPLY DURING THE APPELLATE PROCEE DING HAS SUBMITTED THAT:- S.NO NATURE OF DOCUMENT S 1 THE ASSESSEE HAD RECEIVED THE AMOUNT OF SHARE APPLI CATION MONEY THROUGH AN ACCOUNT PAYEE CHEQUES 2 CO PY OF BANK ACCOUNT OF THE SHARE HOLDERS COMPANY HAS ALSO BEEN FILED 3 PAN NO OF ALL THE COMPANIES HAVE BEEN PROVIDED 4 COPY OF AFFIDAVIT OF THE SOME OF THE DIRECTORS OF THE SHAREHOLDERS COMPANIES HAVE BEEN FILED 5 MEMORANDUM AND ARTICLE OF ASSOCIATION 6 BALANCE SHEET OF ALL THE COMPANIES HAVE BEEN FILED 7 INCOME TAX RETURNS OF ALL THE COMPANIES HAVE BEEN F ILED 3.13 THE ASSESSEE HAS ALSO FILED A CHART OF THE SHA RE CAPITAL AS RECEIVED BY THE ASSESSEE COMPANY IN THE YEAR UNDER CONSIDERA TION WITH THE FOLLOWING INFORMATION:- S.NO PARTICULARS 1 PA NO OF THE SHARE APPLICANT 2 NO OF SHARES ALLOTTED 3 BREAKUP OF SHARE CAPITAL AND SHARE PREMIUM ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 114 4 FOLIO NO OF THE SHAREHOLDER 5 CERTIFICATE NO 6 DISTINCTIVE NOS OF THE SHARE CERTIFICATE COPY OF RETURN OF ALLOTMENT AS FILED WITH THE REGIS TRAR OF COMPANIES WHEREIN THE NAMES OF ALL THE SHARE APPLICANTS HAD D ULY BEEN REFLECTED. THEREFORE, WE ARE OF THE VIEW THAT LD. C IT(A) IS JUSTIFIED IN HIS ACTION AND OUR INTERFERENCE IS NOT REQUIRED. WE ALSO GET SUPPORT FROM THE DECISION OF ITAT, IN DORE BENCH IN THE CASE OF STL EXTRUSION (P) LIMITED VIDE ORDER DA TED 10.05.2010 BEING ITA NO.(SS) 259, 260/IND/2008 AFTER CONSIDERI NG THE JUDGEMENT OF HONBLE MP HIGH COURT IN THE CASE OF RATHI FINLE ASE LTD. REPORTED IN 215 CTR 429 (MP) HELD AS UNDER:- PAGE 7 IN THE PRESENT APPEAL, SINCE THE ASSESSEE HAS DISCHARGED ITS ONUS BY PROVING THE IDENTITY OF SUBSCRIBERS AND EVE N OTHERWISE HAD ANY SUSPICION STILL REMAINED IN HIS MIND, NOTHING P REVENTED HIM TO INITIATE ACTION AS PER THE PROVISIONS OF THE ACT. T HE EXISTENCE OF SUBSCRIBER TO SHARE APPLICATION IS NOT IN DOUBT AS THE ASSESSEE DULY FURNISHED THEIR NAMES, AGE, ADDRESS, DATE OF FILING THE APPLICATION, NUMBER OF SHARES FOR WHICH RESPECTIVE APPLICATIONS WERE MADE, AMOUNT GIVEN AND THE SOURCE OF INCOME OF THE APPLIC ANT. IN VIEW OF THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO JUSTIFICATION FOR MAKING THE IMPUGNED ADDITION BECA USE ONCE THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 115 EXISTENCE OF THE INVESTOR/SHARE SUBSCRIBERS IS PROV ED, ONUS SHIFTS ON THE REVENUE TO ESTABLISH THAT EITHER THE SHARE APPL ICANTS ARE BOGUS OR THE IMPUGNED MONEY BELONGS TO THE ASSESSEE COMPANY ITSELF. ONCE THE CONFIRMATION LETTERS ARE FILED, NO ADDITION CAN BE MADE ON ACCOUNT OF SHARE APPLICATION IN THE HANDS OF THE COMPANY. O UR VIEW FINDS SUPPORT FROM THE DECISION IN SHRI BARKHA SYNTHETICS LTD. V/S ACIT 155 TAXMAN 289 (RAJ). THE CASES LIKE CIT V/S GP INTERNA TIONAL LTD.229 CTR (P&H) 86, CIT V STELLER INVESTMENT LIMITED 192 ITR 287 AND SOPHIA FINANCE LIMITED 205 ITR 98 (DEL) SUPPORT THE CASE OF THE ASSESSEE. THE ABOVE ORDER OF ITAT INDORE BENCH HAS ALSO BEEN CONFIRMED BY THE HONBLE M.P. HIGH COURT IN THE CASE OF CIT V/S STL EXTRUSION (P) LTD REPORTED IN 53 DTR 97(2011) AFTER REFERRING ITS EARLIER ORDER IN THE CASE OF CIT V/S RATHI FINLEASE LTD. REPORTED IN 215 CTR 429 HAS DECIDED IN FAVOUR OF THE ASSESSEE WHEREIN HONBLE J URISDICTIONAL HIGH COURT ALSO RELIED ON THE DECISION OF THE HONBLE AP EX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED. HONBLE JURISDICITONAL HIGH COURT IN THE CASE OF CI T VS PEOPLE GENERAL HOSPITAL LTD [ APPEAL NO M.A.I.T NO 27/ 200 8 DT 27-06-2013] HAS HELD THAT [ REFER PARA 16] :- 16. THE AFORESAID JUDGMENT HAS BEEN FOLLOWED BY A LL THE COURTS AND THE JUDGMENTS RELIED ON BY THE APPELLANTS RELATES T O THE PERIOD PRIOR TO THE JUDGMENT IN LOVELY EXPORTS. AS THE APEX COURT H AS SPECIFICALLY HELD THAT IF THE IDENTITY OF THE PERSON PROVIDING S HARE APPLICATION MONEY IS ESTABLISHED THEN THE BURDEN WAS NOT ON THE ASSESSEE TO ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 116 PROVE THE CREDITWORTHINESS OF THE SAID PERSON. HOWE VER, THE DEPARTMENT CAN PROCEED AGAINST THE SAID COMPANY IN ACCORDANCE WITH LAW. THE POSITION OF THE PRESENT CASE IS IDENT ICAL. IT IS NOT THE CASE OF ANY OF THE PARTIES THAT M/S ALLIANCE INDUST RIES LIMITED, SHARJAH IS A BOGUS COMPANY OR A NON-EXISTENT COMPAN Y AND THE AMOUNT WHICH WAS SUBSCRIBED BY THE SAID COMPANY BY WAY OF SHARE SUBSCRIPTION WAS IN FACT THE MONEY OF THE RESPONDEN T ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF INVESTOR WHO HAD PROVIDED THE SHARE SUBSCRIPTION AN D IT WAS ESTABLISHED THAT THE TRANSACTION WAS GENUINE THOUGH AS PER CONTENTION OF THE RESPONDENT THE CREDITWORTHINESS O F THE CREDITOR WAS ALSO ESTABLISHED. IN THE PRESENT CASE, IN THE LIGHT OF THE JUDGMENT OF LOVELY EXPORTS (P) LTD., WE HAVE TO SEE ONLY IN RES PECT OF THE ESTABLISHMENT OF THE IDENTITY OF THE INVESTOR. THE DELHI HIGH COURT ALSO IN DIVINE LEASING & FINANCE LTD. (SUPRA), CONS IDERING THE SIMILAR QUESTION HELD THAT THE ASSESSEE COMPANY HAVING RECE IVED SUBSCRIPTIONS TO THE PUBLIC/RIGHTS ISSUE THROUGH BA NKING CHANNELS AND FURNISHED COMPLETE DETAILS OF THE SHAREHOLDERS, NO ADDITION COULD BE MADE UNDER SECTION 68 IN THE ABSENCE OF ANY POSITIV E MATERIAL OR EVIDENCE TO INDICATE THAT THE SHAREHOLDERS WERE BEN AMIDARS OR FICTITIOUS PERSONS OR THAT ANY PART OF THE SHARE CA PITAL REPRESENTED COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. THE SIMILAR VIEW HAS BEEN TAKEN BY THE OTHER HIGH COURTS. 17. AS THE APEX COURT HAS CONSIDERED THE LAW IN LOV ELY EXPORTS (SUPRA) AND IN VIEW OF LAW LAID DOWN BY THE APEX CO URT, WE FIND THAT THE SUBSTANTIAL QUESTIONS FRAMED IN THESE APPEALS D O NOT ARISE FOR OUR ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 117 CONSIDERATION. ACCORDINGLY, ALL THESE APPEALS ARE D ISMISSED WITH NO ORDER AS TO COSTS. HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED AS REPORTED IN 11 ITJ 357 HAS HELD THAT:- '2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UN DISCLOSED INCOME UNDER S. 68 OF IT ACT, 1961? WE FIND NO MERI T IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SH ARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLE GED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT.' ITAT, INDORE BENCH IN THE CASE OF M/S RAJSHREE FINS EC P LTD [APPEAL NO 545/ IND/2010 DT 06-02-2012 FOR THE ASST YEAR 20 07-08 ] HAD AN OCCASIONED TO DISCUSSED THE DECISION IN THE CASE OF M/S AGRAWAL COAL CORPORATION AND HELD THAT :- 5. DURING HEARING THE LEARNED SENIOR DR CONTENDED THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S AGRAWAL COAL CORPORATION DECIDED BY THIS BENCH ON 31ST OCTOBER, 2011 IN ITA NOS. 151/IND/2009,283,136AND34/IND/2010,190/IND/09,158/I ND/2010 ETC. WE ARE NOT AGREEING WITH THIS PROPOSITION BECA USE IN THAT CASE THE IDENTITY OF SUCH SHARE APPLICANTS WAS NOT PROVED AND EVEN THE ADDRESSES OF SUCH SHARE APPLICANTS WERE FO UND NON- EXISTENT/BOGUS. IN VIEW OF THOSE FACTS, THIS BENCH CONCLUDED ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 118 THAT THE DECISION FROM HON'BLE APEX COURT PRONOUNCE D IN LOVELY EXPORTS PRIVATE LIMITED IS NOT APPLICABLE AND THE A DDITION WAS CONFIRMED IN THE HANDS OF THE ASSESSEE. HOWEVER, IN THE PRESENT APPEAL, SINCE THE IDENTITY OF SUCH SHARE SU BSCRIBERS, AS WE HAVE DISCUSSED ABOVE, WAS ESTABLISHED, THEREFORE , NO ADDITION U/S 68 IS WARRANTED IN THE CASE OF THE ASS ESSEE COMPANY. SO FAR AS THE DECISION FROM HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE OF CIT VS. RATHI FINLEASE LIMITED (2008) 215 CTR (MP) 249 IS CONCERNED, IN THAT CASE, DESPITE SE VERAL OPPORTUNITIES, THE ASSESSEE WAS UNABLE TO PROVIDED CONFIRMATIONS FROM THE CONCERNED PARTIES, THEREFORE , THE HON'BLE COURT REACHED TO A PARTICULAR CONCLUSION, WHEREAS I N THE PRESENT APPEALS, THE IDENTITY OF SHARE APPLICANTS, NAMELY, M/S. SHRILAL TRADERS PRIVATE LIMITED, M/S LAKEVIEW VINIM AY PRIVATE LIMITED, M/S SAHARSH SUPPLIERS PRIVATE LIMITED AND M/S AMBITIONS TIE UP PRIVATE LIMITED WAS ESTABLISHED, T HEREFORE, IN VIEW OF THE DECISION FROM HON'BLE APEX COURT IN THE CASE OF LOVELY EXPORTS PRIVATE LIMITED (SUPRA), THIS JUDICI AL DECISION FROM HON'BLE HIGH COURT MAY NOT HELP THE REVENUE. 6.SO FAR AS THE ARGUMENT OF THE LEARNED SR. DR AND THE OBJECTIONS / OBSERVATIONS OF THE LEARNED ASSESSING OFFICER/LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) THAT THESE ARE PAPER COMPANIES ONLY, THE CONTENTION RAIS ED ON BEHALF OF THE ASSESSEE IS THAT THE NET WORTH (AS ON 31.3.2007) OF SUCH SHARE SUBSCRIBERS IS RS. 317.31 LACS, RS. 424. 58 LACS, RS. 385.71 LACS AND RS. 289.01 LACS. WE ARE NOT GOING O N THE ISSUE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 119 OF WORTH OF THESE SHARE APPLICANTS BECAUSE THE HON' BLE APEX COURT IN THE CASE OF LOVELY EXPORTS PRIVATE LIMITED (SUPRA) HELD THAT EVEN IF SUCH SHARE APPLICANTS ARE BOGUS, BUT T HEIR IDENTITY IS PROVED, THEN NO ADDITION IS WARRANTED IN THE CASE O F THE ASSESSEE. SO FAR AS THE DECISIONS CITED IN THE IMPU GNED ORDER ARE CONCERNED, IN VIEW OF THE DECISION FROM HON'BLE APEX COURT IN THE CASE OF LOVELY EXPORTS (SUPRA), HAS REMAINED FOR ACADEMIC INTEREST ONLY, BEING ON DIFFERENT FACTS, T HEREFORE, WE ARE REFRAINING OURSELVES IN DEALING WITH EACH AND E VERY CASE INDIVIDUALLY, ESPECIALLY IN THE LIGHT OF THE EVIDEN CES, FILED BY THE ASSESSEE, EVIDENCING THAT THE IDENTITY OF SUCH SHAR E APPLICANTS WAS VERY MUCH PROVED BY FURTHER FILING OF CONFIRMAT ION BY THEM. 7. IN VIEW OF THESE FACTS, THE DECISION FROM HON'BL E APEX COURT IN LOVELY EXPORTS (SUPRA) AND UNCONTROVERTED FACT T HAT THE SUMMONS ISSUED TO THE IMPUGNED SHARE APPLICANTS WER E DULY RECEIVED BY THEM WITH FURTHER FILING OF CONFIRMATIO N BY SUCH SHARE APPLICANTS, AT LEAST THEIR IDENTITY IS PROVED , THEREFORE, THIS APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. OAS IS HOSPITALITIES (P) LTD REPORTED IN 333 ITR 119 (2011) HAS HELD AS UNDE R:- (I) SECTION 68 PROVIDES THAT IF THE ASSESSEE IS NOT ABLE TO GIVE SATISFACTORY EXPLANATION AS TO THE NATURE AND SOURCE OF A SUM FOUND CREDITED IN HIS BOOKS, THE SUM MAY BE TREATED AS THE UNDISCLOSED I NCOME OF THE ASSESSEE. THE INITIAL BURDEN IS ON THE ASSESSEE TO EXPLAIN TH E NATURE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 120 AND SOURCE OF THE CREDIT AND TO DO SO, THE ASSESSEE IS REQUI RED TO PROVE (A) IDENTITY OF THE SHAREHOLDER (B) GENUINENESS OF TRANSACTION AND (C) CREDIT WORTHINESS OF SHAREHOLDERS ; (A) THE IDENTITY OF THE SHAREHOLDER CAN BE PROVED BY EITHER (IF INDIVIDUAL) PRODUCING HIM BEFORE THE AO OR BY WAY O F DOCUMENTS, REGISTERED ADDRESS, PAN ETC; (B) THE GENUINENESS OF THE TRANSACTION CAN BE SHOWN FROM THE FACT THAT THE MONEY HAS BEEN RECEIVED FROM THE SHAREHOLD ER. IF THE MONEY IS RECEIVED BY CHEQUE AND IS TRANSMITTED THROUGH BANKI NG OR OTHER INDISPUTABLE CHANNELS, THE GENUINENESS OF TRANSACTI ON WOULD BE PROVED . OTHER DOCUMENTS SHOWING THE GENUINENESS OF TRANSACT ION COULD BE THE COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICAT ION FORMS, SHARE TRANSFER REGISTER, ETC; (C) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER CAN BE PROVED BY PRODUCING THE BANK STATEMENT OF THE CREDITORS/SUBSCRIBERS SHOWING THAT IT HAD SUFFICIEN T BALANCE IN ITS ACCOUNTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE CAPITAL. ONCE THESE DOCUMENTS ARE PRODUCED, THE ASSESSEE WOULD HAVE SATISFACTORILY DI SCHARGE THE ONUS ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 121 CAST UPON HIM . THE AO CAN DISCREDIT THE DOCUMENTS PRODUCED BY TH E ASSESSEE WITH COGENT REASONS AND MATERIALS BUT NOT ON THE REALM OF SUSPICION; (II)IF THE ASSESSEE HAS PRODUCED DOCUMENTS LIKE PAN CARD, BANK ACCOUNT DETAILS OR DETAILS FROM THE BANKERS THE ONUS SHIFTS UPON THE AO AND IT IS FOR HIM TO REACH THE SHAREHOLDERS AND THE AO CANNOT BURDEN THE ASSESSEE MERELY ON THE GROUND THAT SUMMONS ISSUED TO THE INV ESTORS WERE RETURNED BACK WITH THE ENDORSEMENT NOT TRACEABLE (V) THERE IS AN ADDITIONAL BURDEN ON THE DEPARTME NT TO SHOW THAT EVEN IF SHARE APPLICANTS DID NOT HAVE THE MEANS TO MAKE INV ESTMENT, THE INVESTMENT MADE BY THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSE D INCOME OF THE ASSESSEE. IN THE ABSENCE OF SUCH FINDING, ADDITION CANNOT BE MADE U/S 68 IN THE HANDS THE ASSESSEE . (VI) THE DEPARTMENT IS FREE TO REOPEN THE INDIVIDU AL ASSESSMENT IN CASE OF ALLEGED BOGUS SHAREHOLDERS IN ACCORDANCE WITH LA W AND, THUS, NOT REMEDY-LESS. HONBLE DELHI HIGH COURT VIDE ORDER DT 21-01-2013 I N THE CASE OF GANGESHWARI METAL PVT LTD [ APPEAL NO ITA NO 597/20 12] HAS ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 122 DISCUSSED THE SIMILAR ISSUE IN DETAIL AND AFTER CON SIDERING THE DECISION IN THE CASE OF NOVA PROMOTERS P LIMITED HAS HELD THAT :- MR. SABHARWAL, APPEARING ON BEHALF OF THE REVENUE/ APPELLANT SOUGHT TO PLACE RELIANCE ON A DIVISION BENCH DECISION OF THIS COURT IN CIT V. NOVA PROMOTERS AND FINLEASE (P) LTD. : (2012) 342 ITR 169 (DEL.). HOWEVER, ON GOING THROUGH THE SAID DECISION IN NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) WE FIND THAT THE FACTS ARE CLEARLY DISTINGUISHABLE. 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 UNDER: - THE RATIO OF A DECISION IS TO BE UNDERSTOOD AND AP PRECIATED IN THE BACKGROUND OF THE FACTS OF THAT CASE. SO UNDERSTOOD , IT WILL BE SEEN THAT WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICA NTS SUCH AS THEIR NAMES AND ADDRESSES, INCOME TAX FILE NUMBERS, THEIR CREDI TWORTHINESS, SHARE APPLICATION FORMS AND SHARE HOLDERS REGISTER, SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO THE ASSESSING OFFICER AND THE ASSE SSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATER IAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY UN DER 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 A PPLY THE RATIO TO A ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 123 CASE, SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHE S THE PARTICULARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF- CONFESSED ACCOMMODATION ENTRY PROVIDERS, WHOSE BU SINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT THEIR U NACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION, AND THE A SSESSEE. THE RATIO IS INAPPLICABLE TO A CASE, AGAIN SUCH AS THE PRESENT O NE, 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 AUTHORITI ES INTO THE ACTIVITIES OF SUCH ENTRY PROVIDERS. THE EXISTENCE WITH THE ASSE SSING OFFICER OF MATERIAL SHOWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE- MEDITATED PLAN - A SMOKESCREEN - CONCEIVED AND EXEC UTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABILITY OF THE RATIO. IN OUR UNDERSTANDING, THE RATIO IS ATTRACTED TO A CASE WHERE IT IS A SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHAR GED THE BURDEN PLACED UPON HIM UNDER SEC.68 TO PROVE AND ESTABLISH THE ID ENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GEN UINENESS OF THE TRANSACTION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVI DENCE OR MATERIAL IN HIS ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 124 POSSESSION AND THEN COME FORWARD TO MERELY REJECT T HE SAME, WITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY INTO THE M ATERIAL PLACED BEFORE HIM. THE CASE BEFORE US DOES NOT FALL UNDER THIS CATEGOR Y 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 OFFICER CARRI ES OUT THE EXERCISE WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSES SING OFFICER SITS BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MAT ERIAL IN HIS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRESENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER, AFTER NOTING THE FACTS, MERELY R EJECTED 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 ENTRY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF `1,11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN R ESPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CREDIT IN THE B OOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS RECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WAS STATED THAT THE ACTUAL AMOUNT RECEIVED WAS ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 125 `55,50,000/- AND NOT `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 `55,50,000/-. THE ASSESSEE HAS FURTHER TRIED TO EXPLAIN THE SOURCE OF THIS AMOUNT OF `55,50,000/- BY FURNISHING COPIES OF SHARE APPLICATION MONEY, BALAN CE SHEET, ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT THE QUEST ION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANA TION OF THE ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REMAINS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS HAS BEE N ARRIVED BY THE INVESTIGATION WING OF THE DEPARTMENT. AS SUCH ENTRI ES OF `55,50,000/- RECEIVED BY THE ASSESSEE ARE TREATED AS AN UNEXPLAI NED CASH CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED TO ITS INCOME. SINC E I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F ITS INCOME, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITI ATED SEPARATELY. THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVO UR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CL EARLY DISTINGUISHABLE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LIN E WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA) . THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 126 ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISHED A LL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. IN SUCH AN EVENT UALITY NO ADDITION CAN BE MADE UNDER SECTION 68 OF THE ACT. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBU NAL IS CORRECT IN LAW. THE APPEAL IS DISMISSED. HONBLE DELHI HIGH COURT IN THE CASE OF CIT (CENTRA L)-III VS ANSHIKA CONSULTANTS P LIMITED [ APPEAL NO ITA 467/ 2014 DT 16-04-2015 ] HAS HELD THATWHETHER THE ASSESSEE COMPANY CHARGED A HIGHER P REMIUM OR NOT, SHOULD NOT HAVE BEEN THE SUBJECT MATTER OF THE ENQU IRY IN THE FIRST INSTANCE. INSTEAD, THE ISSUE WAS WHETHER THE AMOUNT INVESTED BY THE SHARE APPLICANTS WERE FROM LEGITIMATE SOURCES. THE OBJECT IVE OF SECTION 68 IS TO AVOID INCLUSION OF AMOUNT WHICH ARE SUSPECT. THEREF ORE, THE EMPHASIS ON GENUINENESS OF ALL THE THREE ASPECTS, IDENTITY, CRE DITWORTHINESS AND THE TRANSACTION. WHAT IS DISQUIETING IN THE PRESENT CAS E IS WHEN THE ASSESSMENT WAS COMPLETED ON 31.12.2007, THE INVESTI GATION REPORT WHICH WAS SPECIFICALLY CALLED FROM THE CONCERNED DEPARTME NT IN KOLKATA WAS AVAILABLE BUT NOT DISCUSSED BY THE AO. HAD HE CARED TO DO SO, THE IDENTITY OF THE INVESTORS, THE GENUINENESS OF THE TRANSACTIO N AND THE CREDITWORTHINESS OF THE SHARE APPLICANTS WOULD HAVE BEEN APPARENT. EVEN ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 127 OTHERWISE, THE SHARE APPLICANTS PARTICULARS WERE A VAILABLE WITH THE AO IN THE FORM OF BALANCE SHEETS INCOME TAX RETURNS, PAN DETAILS ETC. WHILE ARRIVING AT THE CONCLUSION THAT HE DID, THE AO DID NOT CONSIDER IT WORTHWHILE TO MAKE ANY FURTHER ENQUIRY BUT BASED HIS ORDER ON THE HIGH NATURE OF THE PREMIUM AND CERTAIN FEATURES WHICH APPEARED TO BE S USPECT, TO DETERMINE THAT THE AMOUNT HAD BEEN ROUTED FROM THE ASSESSEES ACCOUNT TO THE SHARE APPLICANTS ACCOUNT. AS HELD CONCURRENTLY BY THE CI T (APPEALS) AND THE ITAT, THESE CONCLUSIONS WERE CLEARLY BASELESS AND F ALSE. THIS COURT IS CONSTRAINED TO OBSERVE THAT THE AO UTTERLY FAILED T O COMPLY WITH HIS DUTY CONSIDERS ALL THE MATERIALS ON RECORD, IGNORING SPE CIFICALLY THE MOST CRUCIAL DOCUMENTS. WE PLACE THESE OBSERVATIONS ON THE RECOR D AND DIRECT A COPY OF THE JUDGMENT TO BE FURNISHED TO THE CONCERNED IN COME TAX AUTHORITIES FOR APPROPRIATE ACTION TOWARDS REFLECTING THESE OBSERVA TIONS SUITABLY IN SERVICE RECORD OF THE CONCERNED AO TO AVOID SUCH INSTANCES IN THE FUTURE. 7. FOR THE ABOVE REASONS, THIS COURT IS OF THE OPIN ION THAT THE CONCURRENT FINDINGS OF FACT, AS TO THE TRUE IDENTITY OF THE SH ARE APPLICANTS, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION , ARE BASED ON SOUND REASONING AND DO NOT CALL FOR INTERFERENCE. NO SUBS TANTIAL QUESTION OF LAW ARISES. THE APPEALS ARE DISMISSED. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 128 IN THE CASE OF ACIT VS M/S KRISHNA SHEET PROCESSORS P LIMITED [ APPEAL NO ITA NO 546/ MUM/ 2013 DT 30-06-2015] THE AMOUNT OF SHARE PREMIUM OF RS 1000/- WAS DULY ACCEPTED AS GENUINE. IN VIEW OF THE ABOVE, ONCE THE ASSESSEE HAS ESTABLI SHED THE IDENTITY OF THE SHARE HOLDER IN THAT CASE THE AMOUNT OF SHAR E PREMIUM IS NOT AN ISSUE. IF THE ASSESSING OFFICER HAS NOT SATISFIED W ITH THE EXPLANATION OF THE SHARE APPLICANT, NECESSARY ADDITION IS TO BE MADE I N THE HAND OF THE SHARE APPLICANT BUT NOT IN THE CASE OF THE ASSESSEE. IN THE CASE OF CIT VS KORLAY TRADING CO LIMITED AS REPORTED IN 232 ITR 820, HONBLE CALCUTTA HIGH COURT OBSERVED THAT IN C ASE OF UNSECURED LOAN MERE PROVIDING OF PA NO WAS NOT SUFFICIENT. IN THAT CASE THE ASSESSEE UTTERLY FAILED TO FURNISH EVEN CONFIRMATION LETTER. IN THE PRESENT APPEAL, THE MATTER IN DISPUTE IS NOT UNSECURED LOAN BUT SHARE C APITAL AND IT WAS CATEGORICALLY HELD THAT THE ASSESSEE NEED TO PROVE THE IDENTITY OF THE SHARE HOLDERS ONLY. THE ASSESSEE IN PRESENT CASE NOT ONLY FILED CONFIRMATION LETTER BUT AMPLE DOCUMENTS AS TO DISCHARGED THE ONUS LYING ON THE ASSESSEE. HENCE, DECISION OF THE HONBLE CALCUTTA HIGH COURT ARE DISTINGUISHABLE ON THE FACT OF THE PRESENT CASE. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 129 IN CASE OF N TARIKA PROPERTY INVESTMENT (P) LTD , H ONBLE DELHI HIGH COURT AS REPORTED IN 40 TAXMANN.COM 525 AND BY THE HONBL E APEX COURT AS REPORTED IN 51 TAXMANN.COM 387 HAS OBSERVED THAT TH E BANK ACCOUNT AS PROVIDED WAS FORGED AND FABRICATED BANK ACCOUNT. IN THE PRESENT APPEAL IN HAND THE ASSESSEE HAS PROVIDED COPY OF BANK STATEME NT, PA NO AND VARIOUS OTHER DOCUMENTS AND THE ASSESSING OFFICER F AILED TO POINTED OUT ANY DEFECTS IN THESE DOCUMENTS. HENCE, THE FACTS OF THE CASE OF N TARIKA PROPERTY INVESTMENT [P] LTD IS DISTINGUISHABLE WITH THE FACTS OF THE PRESENT APPEAL IN HAND. IN CASE OF CIT VS N R PORTOFLIO (P ) LIMITED AS REP ORTED IN 42 TAXMANN.COM 339, HONBLE HIGH COURT HAS OBSERVED THAT MERE PROV IDING THE PA NO BY THE APPELLANT AND NOT CO-OPERATED WITH THE ASSESSIN G OFFICER IN THE ASSESSMENT PROCEEDING. IN THE PRESENT APPEAL, THE A SSESSEE COMPANY NOT ONLY PROVIDE THE PA NO BUT ALSO PROVIDE AMPLE DOCUM ENTS TO SUBSTANTIATE ITS CLAIM OF SHARE APPLICATION MONEY. THERE WAS NO ALLEGATION WHAT SO EVER OF THE ASSESSING OFFICER ABOUT NON- CO-OPERATION OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT OR APPELLATE PROCEEDING. HENCE , THE FACT OF THE PRESENT CASE IS DISTINGUISHABLE WITH THE FACT OF N R PORTFOLIO (P) LIMITED. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 130 IN CASE OF GAYATHRI ASSOCIATES AS REPORTED IN 41 TA XMANN.COM 526, HONBLE ANDHRA PRADESH HIGH COURT HAS OBSERVED THAT EXCEPT BANK ACCOUNT NO OTHER DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFICER EVEN NO AFFIDAVIT WAS FILED.IN THE PRESENT APPEAL IN HAND T HE ASSESSEE NOT ONLY THE BANK ACCOUNT BUT ALSO THE AFFIDAVIT AND VARIOUS OTH ER DOCUMENTS WERE FILED. HENCE, ONUS LYING ON THE ASSESSEE HAS PROPERLY BEEN DISCHARGED. THUS, FACT OF THE PRESENT CASE IS DISTINGUISHABLE WITH TH E FACT OF THE CASE OF M/S GAYATHRI ASSOCIATES. IN CASE OF CIT VS FOCUS EXPORTS (P) LTD AS REPORTE D IN 51 TAXMANN.COM 46, HONBLE DELHI HIGH COURT HAS OBSERVED THAT ADDR ESS AND PA NO OF THE SHARE APPLICANT WAS NOT PROVIDED.IN THE PRESENT APP EAL IN HAND THE APPELLANT COMPANY HAS PROVIDED THE COMPLETE ADDRESS , PA NO AND VARIOUS OTHER DOCUMENTS AS TO DISCHARGED ONUS LYING ON IT. HENCE, FACT OF THE PRESENT APPEAL IS DISTINGUISHABLE WITH THE FACT OF FOCUS EXPORTS (P) LTD. IN CASE OF CIT VS P MOHANKALA AS REPORTED IN 291 IT R 278, HONBLE APEX COURT HAS ANALYSIS THE PROVISION OF SECTION 68 OF T HE INCOME TAX ACT AND OBSERVED THAT EXPLANATION OF THE ASSESSEE NOT ACCEP TED BY THE ASSESSING DOES NOT TANTAMOUNT TO INCOME OF THE ASSESSEE. IN T HAT CASE THE LD CIT[A] ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 131 AND HONBLE ITAT ALSO APPROVED THE ORDER OF THE ASS ESSING OFFICER.IN THE PRESENT APPEAL IN HAND, THE ASSESSEE COMPANY HAS EX PLAINED THE CORRECT NATURE OF TRANSACTIONS THOUGH THE SAME WAS NOT ACCE PTED BY THE ASSESSING OFFICER BUT BY THE LD CIT[A]. SINCE, THE ASSESSEE C OMPANY HAS FILED AMPLE DOCUMENTS TO SUPPORT ITS CLAIM. HENCE, RATHER DECIS ION OF THE HONBLE APEX COURT SUPPORTS THE CASE OF THE ASSESSEE COMPANY. IN THE CASE OF MAF ACADEMY (P) LIMITED AS REPORTED IN 42 TAXMANN.COM 377, HONBLE DELHI HIGH COURT ON THE BASIS OF ITS F INDING IN THE CASE OF N R PORTFOLIO [P] LIMITED [ SUPRA] REACHED TO A CONCLUS ION THAT THE ASSESSEE HAS FAILED TO PROVIDE THE IDENTITY, GENUINENESS AND CRE DITWORTHINESS OF THE SHARE APPLICATION MONEY.IN THE PRESENT CASE AS STATED THE ASSESSEE HAS EXTEND ITS FULL CO-OPERATION AND ALSO FILED AMPLE DOCUMENT S AS TO PROVE THE INGREDIENTS OF PROVISION OF SECTION 68 OF THE ACT. THE SHARE OF THE ASSESSEE COMPANY WAS NOT BUY BACK BY THE ASSESSEE COMPANY BU T THE TRANSACTIONS WERE EXECUTED BETWEEN THE SHARE HOLDERS IN THE PREV IOUS YEAR RELEVANT TO THE ASST YEAR 2006-07. HENCE, FACT OF THE CASE OF M AF ACADEMY (P) LIMITED WAS DISTINGUISHABLE WITH THE FACT OF THE PR ESENT CASE OF THE ASSESSEE. ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 132 IN THE CASE OF SUBHLAKSHMI VANIJYA ( P) LTD AS REPO RTED IN 60 TAXMANN.COM 60 , HONBLE KOLKATA BENCH OBSERVED THAT INSERTION OF THE PROVISO TO SECTION 68 WAS RETROSPECTIVE IN NATURE.THAT PROVISO TO SECT ION 68 OF THE INCOME TAX ACT WAS INSERTED BY THE FINANCE ACT 2012 W.E.F 01-0 4-2013. SINCE, THE DATE OF APPLICABILITY WAS CLEARLY MENTIONED WITH THIS AM ENDMENT, HENCE, THE SAID INSERTION OF THE PROVISO HAVE PROSPECTIVE APPLICABI LITY. THAT HONBLE MUMBAI BENCH OF ITAT IN THE CASE OF VEEDHATA TOWER P LIMIT ED [ ITA NO 7070/ MUM/ 2014 ] DT 21-01-2015 HAS DISCUSSED THE ISSUE O F SHARE APPLICATION MONEY IN DETAIL AND HELD THAT THE ASSESSEE PRIOR TO THE AMENDMENT BY THE FINANCE ACT, 2012 NEED TO PROVE ONLY IDENTITY OF TH E SHARE HOLDERS AND THE ASSESSEE ALSO NEED NOT REQUIRES TO BE PROVED SOURCE OF SOURCE. IN THE CASE OF AGRAWAL COAL CORPORATION (P) LIMITED AS REPORTED IN 19 TAXMANN.COM 209, HONBLE INDORE BENCH OF ITAT HAS C ATEGORICALLY HELD THAT THE ASSESSEE NEEDS TO PROVE THE IDENTITY OF TH E SHARE HOLDER ONLY.IN THE PRESENT APPEAL IN HAND THE ASSESSEE HAS PROVED THE IDENTITY OF THE SHARE APPLICANT WITH THE AMPLE DOCUMENTS. HENCE, RATHER T HE SAID DECISION SUPPORTS THE CASE OF THE ASSESSEE COMPANY. IN CASE OF CIT VS NOVA PROMOTERS & FINLEASE (P) LIM ITED AS REPORTED IN 342 ITR 169, HONBLE DELHI HIGH COURT HAS OBSERVED THAT THE ASSESSING OFFICER ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 133 HAS RECORDED STATEMENT OF THE SHARE APPLICANT IN TH AT CASE AND CONFRONTED WITH THE ASSESSEE BUT THE ASSESSEE FAILED TO SUBSTA NTIATE ITS CONTENTION.IN THE PRESENT APPEAL THE ASSESSING OFFICER DID NOT MA KE ANY INQUIRY. HENCE, RATHER DECISIONS OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS NOVA PROMOTERS & FINLEASE (P) LIMITED [SUPRA] SUPPORT TH E CASE OF THEASSESSEE. 3.16 ON CONSIDERATION OF ABOVE AND RESPECTFULLY FOL LOWING THE DECISION OF THE JURISDICATIONAL HIGH COURT IN THE CASE OF CIT V S. STL EXTRUSION, 53 DTR 97 AND JURISDICATIONAL HIGH COURT IN THE CASE OF CI T VS. PEOPLES GENERAL HOSPITAL (APPEAL NO.27/2008) (SUPRA) AND THE DECISI ON OF HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORT (SUPRA), 11 TTJ 357 AND OTHER DECISIONS AS REPRODUCED ABOVE, WE DISMISS THE DEPARTMENTAL AP PEAL. GROUND NO.3 OF THE DEPARTMENTAL APPEAL IS WITH REGARD TO DELET ION OF ADDITION OF RS.2 LACS MADE ON ACCOUNT OF UNACCOUNTE D COMMISSION PAID FOR ARRANGEMENT OF ACCOMMODATION ENTRIES. THE SHORT FAC TS OF THE CASE ARE THAT ASSESSING OFFICER HAS MADE ADDITION OF RS.2 LACS ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL, WHICH WAS CHALLENGED BEF ORE THE LD. CIT(A). AS WE HAVE ALREADY HELD ON THE ABOVE PARAGRAPHS THAT T HE ADDITIONS OF RS.1.75 CRORE & RS.2 CRORES ARE DELETED, THEREFORE, WE ARE OF THE VIEW THAT ITA NO.566, 564 AND 543 OF 2013 SWIFT INTERMEDIA CONVERGENCE & OTHERS 134 LD. CIT(A) IS JUSTIFIED IN ALLOWING THE APPEAL OF T HE ASSESSEE ON THIS GROUND. GROUND NO.3 IS ALSO DISMISSED. FINALY, DEPARTMENTAL APPEALSARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 09.12 .2015. SD/- SD/- (B.C.MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09.12.2015 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE