DCIT 4(3)(1), MUMBAI V. PATODIA FILAMENTS P. LTD, MUMBAI

ITA 5684/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9183 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 07-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKEYAN
• Keywords: Unexplained cash credit; Transfer pricing; Question of law; Fair market value; Accommodation entries; Capital receipt
• Section: 115JB; 133(6); 195; 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJEET SINGH, JUDICIAL MEMBER ITA NO.5684/M/2017 ASSESSMENT YEAR: 2010-11 DCIT 4(3)(1), ROOM NO.649, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. PATODIA FILAMENTS P. LTD., A-604, 6 TH FLOOR, EXPRESS ZONE, OPP. OBEROI MALL, WESTERN EXPRESS HIGHWAY, GOREGAON (E), MUMBAI 400 063 PAN: AABCP8673J (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI MANI JAIN, A.R. REVENUE BY : SHRI ABI RAMA KARTIKEYAN, D.R. DATE OF HEARING : 25.02.2019 DATE OF PRONOUNCEMENT : 26.03.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 20.04.2016 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION OF RS.4,76,00,000/- AS MADE BY THE AO U/S 68 OF THE ACT TOWARDS BOGUS SHARE APPLICATIO N MONEY RECEIVED AS ACCOMMODATION ENTRIES FROM PRAVEEN KUMA R JAIN GROUP ENTITIES. 2 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE, BEING MANUFACTURER OF YARD AND FABRIC, FILED ITS RETURN OF INCOME ON 2 5.9.2008 DECLARING NIL INCOME UNDER NORMAL PROVISIONS AND RS.1,21,19,535/- UNDER SECTION 115JB OF THE ACT. TH E CASE OF THE ASSESSEE WAS RE-OPENED AFTER THE AO RECEIVED IN FORMATION FROM DGIT(INV) MUMBAI THAT THE ASSESSEE IS BENEFICI ARY OF ACCOMMODATION ENTRIES IN THE FORM OF SHARE CAPITAL TO THE TUNE OF RS.4,76,00,000/- FROM VARIOUS ENTITIES CONTROLLE D AND OPERATED BY SHRI PRAVEEN KUMAR JAIN DETAILS WHEREOF ARE GIVEN ON PAGE 2 OF THE ASSESSMENT ORDER. THE AO ISSUED NO TICE U/S 148 OF THE ACT ON 8.4.2015 WHICH WAS DULY SERVED UP ON THE ASSESSEE. THE AO ISSUED SHOW CAUSE NOTICE TO THE AS SESSEE TO PROVE THE SHARE CAPITAL TAKEN FROM 9 COMPANIES WHIC H WAS REPLIED BY THE ASSESSING BY SUBMITTING THE NECESSAR Y EVIDENCES COPIES OF CONFIRMATION LETTERS, ITRS, BANK STATEME NT AND ANNUAL ACCOUNTS OF THE INVESTORS WERE FILED. HOWEVE R RELYING ON THE STATEMENT OF SHRI PRAVEEN KUMAR JAIN DURING SEA RCH ON HIM AND RELATED ENTITIES, THE AO DISBELIEVED THE DOCUME NTS FILED BY THE ASSESSEE AND TREATED THE MONEY RAISED AS UNEXPL AINED CASH CREDIT AND ADDED TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT FOR THE REASONS THAT ASSESSEE HAS FAILED TO PROVE T HE THREE INGREDIENTS OF SECTION 68 OF THE ACT WITHOUT CARRYI NG OUT FURTHER ENQUIRIES/ INVESTIGATION. 4. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) ALL OWED THE APPEAL OF THE ASSESSEE AFTER CONSIDERING THE VARIOU S CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE BY OBSERVING AND HO LDING AS UNDER:- 6.3.1. I HAVE CONSIDERED THE ENTIRE FACTS OF THE C ASE AS WELL AS STAND OF THE AO, RIVAL SUBMISSION OF THE APPELLANT AND EVIDENCES ON RECORD . DURING THE YEAR, THE APPELLANT 3 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. IN THE PROCESS OF EXPANSION OF ITS BUSINESS AND FAC ILITATION WORKING CAPITAL IN FURTHERANCE OF ITS BUSINESS HAS ISSUED EQUITY SHARE CAPITAL AMOUNTING TO RS.68,00,000/- OF FACE VALUE OF RS.10/- EACH AT A P REMIUM OF RS.60/- EACH AMOUNTING TO RS.4,08,00,000/-, THUS AGGREGATING TO SUM OF RS.4,76,00,000/- AND NO SHARE APPLICATION MONEY IS OUTSTANDING FROM THE SAI D FIVE PARTIES AT THE YEAREND AS ON 31/03/2010. 6.3.2. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ID. AR APPELLANT HAD SUBMITTED THAT DETAILS OF THE SAID NINE PARTIES CON TAINING COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME FILED FOR THE AY 2010-11, AUDIT ED BALANCE SHEET AND COPY OF BANK STATEMENTS EVIDENCING AMOUNT OF SHARE APPLICAT ION RECEIVED THROUGH BANKING CHANNELS AND COPY OF SAME HAVE ALSO BEEN SUBMITTED DURING THE APPELLATE PROCEEDINGS. ON GOING THROUGH THE DETAILS SUBMITTED IT IS OBSERVED THAT ALL THE NINE COMPANIES HAVE FILED THEIR RESPECTIVE RETURN OF INC OME AND THE BALANCE SHEET WHICH SHOW SUBSTANTIAL NET WORTH. THE INVESTMENT AMOUNT M ADE IN THE APPELLANT COMPANY BY THE RESPECTIVE SAID NINE COMPANIES IS VE RY SMALL AS COMPARED TO THE NET WORTH. THE SAID COMPANIES HAVE DECLARED INCOME IN THEIR RETURN AND HAVE PAID TAXES. FURTHER, IT HAS BEEN EXPLAINED THAT IN NONE OF THE COMPANY MR. PRAVIN KUMAR JAIN IS A DIRECTOR. THE ABOVE DOCUMENTS ARE EITHER FILED WITH THE DEPARTMENT OR ARE AVAILABLE ON THE PUBLIC DOMAIN OF MINISTRY OF CORPO RATE AFFAIRS EXCEPT TO BANK STATEMENT. THE MOST IMPORTANT THING THAT IT IS SEEN THAT ALL THE PARTIES HAVE REPLIED TO THE NOTICES ISSUED BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HENCE, THEIR IDENTITY IS PROVED. 6.3.3. ON THE FACE OF THE BALANCE SHEET AND DETAILS SUBMITTED MERE IS NOTHING INCRIMINATING THAT CAN BE DRAWN TO INFER THAT THE S AID TRANSACTIONS IS MERELY ACCOMMODATING ENTRIES AND NOT GENUINE. MORE IMPORTA NTLY, NO DIRECT AND CORROBORATIVE EVIDENCE HAS BEEN BROUGHT ON RECORD B Y THE AO. NO NEXUS IS ESTABLISHED AS TO CIRCULATING OF FUNDS OR THAT CASH WAS PAID BY THE APPELLANT COMPANY TO OBTAIN THE CHEQUES FOR SHARE APPLICATION . 6.3.4. THE APPELLANT HAS PROVIDED THE IDENTIFICATIO N OF THE PARTIES. THE SAME IS SUPPORTED BY THE INCOME TAX RETURNS FILED BY THE RE SPECTIVE PARTIES. THE ALLEGATION OF THE AO THAT PAN IS ISSUED WITHOUT VERIFICATION O F THE APPLICANT IS NOT CORRECT. THE AO COULD HAVE VERIFIED THE JURISDICTION OF THE RESP ECTIVE PARTIES AND COULD HAVE MADE ENQUIRIES WITH THE RESPECTIVE AO'S ABOUT THE S AID NINE PARTIES FROM THE PAN AVAILABLE WITH HIM. 6.3.5. THE APPELLANT HAS SUBMITTED BALANCE SHEET AN D DETAILS OF THE SAID NINE PARTIES TO PROVE CREDENTIALS AND GENUINENESS O F THE TRANSACTIONS. THE THREE INGREDIENTS VIZ. IDENTITY, CREDENTIALS AND GENUI NENESS CANNOT BE DOUBTED. 6.3.6. THE AO HAS HEAVILY RELIED ON INFORMATION REC EIVED FROM DDIT (INV), MUMBAI AND THAT OF THE STATEMENT OF MR. PRAVIN KUMAR JAIN. THE AO HAS NOT CARRIED OUT INDEPENDENT ENQUIRIES TO PROVE THE CASE. ON READING FROM THE ASSESSMENT ORDER THERE IS NOTHING CORROBORATIVE BROUGHT ON RECORD TO PROVE THAT THE SHARE APPLICATION MONEY RECEIVED ARE ACCOMMODATING ENTRIE S OR RECEIVED FROM BOGUS SHARE HOLDERS. IT IS SUBMITTED BY THE APPLICANT THA T ON GIVING THE NAMES OF THE SHARE 4 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. HOLDERS THAN THE ONUS ON THE PART OF THE APPLICANT IS DISCHARGED AND THAT ADDITION, IF ANY TO BE MADE IS TO BE IN THE HANDS OF THE INVESTO R AND NOT APPLICANT. IN THE CASE OF CIT V. LOVELY EXPORTS (P) LTD [2008] 216 CTR 195 IT HAS BEEN HELD THAT; 'IF SHARE APPLICATION MONEY IS RECEIVED BY ASSESSEE -COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO ASSESS ING OFFICER, THEN DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT THIS AMOUNT OF SHARE MONEY CANNOT BE REGARDED AS UNDISCLOSED INCOME UNDER SECTION 68 OF ASSESSEE-COM PANY.' 6.3.7. IN THE CASE OF CIT VS. CREATIVE WORLD TELE FILMS LTD. [2011](333 ITR 100)(BOMBAY) THE COURT HAS HELD AS UNDER:- 'IN THE CASE IN HAND, IT WAS NOT DISPUTED THAT THE ASSESSEE HAD GIVEN THE DETAILS OF NAME AND ADDRESS OF THE SHAREHOLDER, THE IR PAN/GIR NUMBER AND HAD ALSO GIVEN THE CHEQUE NUMBER, NAME OF THE BANK. IT WAS EXPECTED ON THE PART OF THE ASSESSING OFFICER TO MAKE PROPER IN VESTIGATION AND REACH THE SHAREHOLDERS. THE ASSESSING OFFICER DID NOTHING EXC EPT ISSUING SUMMONS WHICH WERE ULTIMATELY RETURNED BACK WITH AN ENDORSE MENT 'NOT TRACEABLE'. THE ASSESSING OFFICER OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS S O AS TO REACH THE SHAREHOLDERS SINCE ALL THE RELEVANT MATERIAL DETAIL S AND PARTICULARS WERE GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER, IN THE ABOVE CIRCUMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL COULD NOT BE FAULTED. NO SUBSTANTIA L QUESTION OF LAW WAS INVOLVED IN THE APPEAL. IN THE RESULT, T HE REVENUE'S APPEAL WAS TO BE DISMISSED IN LIMINE. (PARA 2}' 6.3.8. THE A.O. HAS MERELY BASED ON THE INFORMATIO N RECEIVED FROM THE DDIT AND THE STATEMENT OF THIRD PARTY MR PRAVEEN KUMAR JAIN HAS FORMED OPINION THAT THE APPELLANT IS ONE OF THE BENEFICIARIES WHO HAS TAKEN ALLEGED ACCOMMODATION ENTRY. IT IS NOT SHOWN MAT COPY OF THE STATEMENT OF MR. PAVEE N KUMAR JAIN HAS BEEN PROVIDED TO THE APPELLANT AND THAT OPPORTUNITY OF C ROSS EXAMINING HAS BEEN GRANTED. THERE IS NO MENTION IN THE ASSESSMENT ORD ER THAT SHRI PRAVEEN KUMAR JAIN HAS CATEGORICALLY STATED HAVING PROVIDED ACCOMMODAT ION ENTRY TO THE APPELLANT. 6.3.9. IN THE CASE OF M/S. SDB ESTATE PVT LTD VS. ITO-(5)(3)(2) IN ITA NO. 584/MUM/2015 ON SIMILAR GROUND IT HAS BEEN DECIDED THAT:- 'IN VIEW OF THE ABOVE STATED LEGAL POSITION AND IN THE LIGHT OF RELIABLE EVIDENCES BROUGHT ON RECORD BY ASSESSEE TO SUBSTANTIATE IDENT ITY, GENUINENESS AND CREDITWORTHINESS OF SHAREHOLDERS, WHICH HAVE NOT BE EN CONTROVERTED BY THE REVENUE, THE ADDITIONS MADE SOLELY ON THE BASIS OF GENERAL STATEMENT OF SHRI MUKESH CHOKSHI CANNOT BE HELD TO BE JUSTIFIED AND T HE SAME ARE ACCORDINGLY ORDERED TO BE DELETED.' 5 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. 6.3.10. AS REGARDS ISSUE INVOLVING ADDITION OF SHAR E PREMIUM AMOUNT ALONG WITH SHARE APPLICATION MONEY/SHARE CAPITAL MONEY, THE JU RISDICTIONAL ITAT, MUMBAI HAS DECIDED IN MANY CASES THAT IT CANNOT BE ADDED. FURT HER, THE HON'BLE HIGH COURT HAS ALSO DECIDED THE ISSUE THAT THE ADDITION OF SHARE P REMIUM AMOUNT CANNOT BE MADE IN EARLIER YEARS PRIOR TO AMENDMENT IN THE RELEVANT PROVISIONS IN THE I.T. ACT, 1961. IN THIS REGARD, REFERENCE IS MADE AND RELIANCE IS P LACED TO THE VARIOUS JUDICIAL PRONOUNCEMENTS ON THE ISSUE RELATED TO ADDITIONS FO R SHARE PREMIUM AMOUNT INCLUDED IN THE SHARE APPLICATION MONEY/SHARE CAPIT AL MONEY. THESE ARE AS UNDER: (I) IN THE CASE OF M/S. VODAFONE INDIA SERVICES PVT. LTD VS. ADDL. CIT REPO RTED IN 368 ITR 001, HON'BLE BOMBAY HIGH COURT DECIDED THAT:- 'THE AMOUNTS RECEIVED ON ISSUE OF SHARE CAPITAL INC LUDING THE PREMIUM ARE UNDOUBTEDLY ON CAPITAL ACCOUNT. SHARE PREMIUM HAVE BEEN MADE TAXABLE BY A LEGAL FICTION UNDER SECTION 56(2)(VIIB) OF THE ACT AND TH E SAME IS ENUMERATED AS INCOME IN SECTION 2(24)(XVI) OF THE ACT. HOWEVER, WHAT IS BOUGHT INTO THE AMBIT OF INCOME IS THE PREMIUM RECEIVED FROM A RESIDENT IN EXCESS O F THE FAIR MARKET VALUE OF THE SHARES. IN THIS CASE WHAT IS BEING SOUGHT TO BE TAX ED IS CAPITAL NOT RECEIVED FROM A NON-RESIDENT I.E. PREMIUM ALLEGEDLY NOT RECEIVED ON APPLICATION OF ALP. THEREFORE, ABSENT EXPRESS LEGISLATION, NO AMOUNT RECEIVED, ACC RUED OR ARISING ON CAPITAL ACCOUNT TRANSACTION CAN BE SUBJECTED TO TAX AS INCO ME. COURT FINDS CONSIDERABLE SUBSTANCE IN THE PETITIONER'S CASE THAT NEITHER THE CAPITAL RECEIPTS RECEIVED BY THE PETITIONER ON ISSUE OF EQUITY SHARES TO ITS HOLDING COMPANY, A NON- RESIDENT ENTITY, NOR THE ALLEGED SHORT-FALL BETWEEN THE SO CALLED FA IR MARKET PRICE OF ITS EQUITY SHARES AND THE ISSUE PRICE OF THE EQUITY SHARES CAN BE CON SIDERED AS INCOME WITHIN THE MEANING OF THE EXPRESSION AS DEFINED UNDER THE ACT. ' (II) THE CBDT VIDE INSTRUCTIONS NO- 02/2015 DATED 29/1/2015 DIRECTED THE REVENUE NOT TO FILE THE SLP BEFORE HON'BLE TO SUPREME COURT AND DIRECTED AOS TO ACCEPT THE HIGH COURT ORDER. THE RELEVANT INSTRUCTIONS IS AS U NDER:- 'IN REFERENCE TO THE ABOVE CITED SUBJECT, I AM DIRE CTED TO DRAW YOUR ATTENTION TO THE DECISION OF THE HIGH COURT OF BOMBAY IN THE CASE OF VODAFONE INDIA SERVICES PVT. LTD FOR A.Y. 2009-IO (WP NO.871/20I4) = 20I4-TH-I9-HC-M UM-TP, WHEREIN IN THE COURT HAS HELD, INTER-ALIA, THAT THE PREMIUM ON SHARE ISS UE WAS ON ACCOUNT OF A CAPITAL ACCOUNT TRANSACTION AND DOES NOT GIVE RISE TO INCOM E AND, HENCE, NOT LIABLE TO TRANSFER PRICING ADJUSTMENT. .. IT IS HEREBY INFORM ED THAT THE BOARD HAS ACCEPTED THE DECISION OF THE HIGH COURT OF BOMBAY IN THE ABOVE M ENTIONED WRIT PETITION. IN VIEW OF THE ACCEPTANCE OF THE ABOVE JUDGEMENT, IT IS DIR ECTED THAT THE RATIO DECIDED OF THE JUDGEMENT MUST BE ADHERED TO BY THE FIELD OFFIC ERS IN ALL CASES WHERE THIS ISSUE IS INVOLVED. THIS MAY ALSO BE BROUGHT TO THE NOTICE OF THE ITAT, DRPS AND CSLT (APPEALS).' (III) IN THE CASE OF ACIT VS. GAGANDEEP INFRASTRUCT URE PVT. LTD BEARING ITA NO., 578VMUM/2011 DATED 23/2014, HON'BLE MUMBAI ITAT DE CIDED THAT: 'WE HAVE CAREFULLY PERUSED THE ORDERS O F THE LOWER AUTHORITIES. IN OUR CONSIDERED VIEW, THE ISSUE OF SHARES AT PREMIUM IS ALWAYS A COMMERCIAL DECISION 6 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. WHICH DOES NOT REQUIRE ANY JUSTIFICATION. FURTHER THE PREMIUM IS A CAPITAL RECEIPT WHICH HAS TO BE DEALT WITH IN ACCORDANCE WITH SEC. 78 OF THE COMPANIES ACT, I 956. FURTHER, THE COMPANY IS NOT REQUIRED TO PROVE TH E GENUINENESS, PURPOSE OR JUSTIFICATION FOR CHARGING PREMIUM OF SHARES, SHARE PREMIUM BY ITS VERY NATURE IN A CAPITAL RECEIPTS AND IS NOT INCOME FOR ITS ORDINARY SENSE... .... THE ENTIRE DISPUTE REVOLVES AROUND THE FACT THAT THE ASSESSEE HAS CHAR GED A PREMIUM OF RS. 190/-PER SHARE. NO DOUBT A NON-EST COMPANY OR A ZERO BALANCE SHEET COMPANY ASKING FOR RS.190/- PER SHARE DEFIES ALL COMMERCIAL PRUDENCE B UT AT THE SAME TIME WE CANNOT IGNORE THE FACT THAT IT IS A PREROGATIVE OF THE BOA RD OF DIRECTORS OF THE COMPANY TO DECIDE THE PREMIUM AMOUNT AND IT IS THE WISDOM OF T HE SHARE HOLDERS WHETHER THEY WANT TO SUBSCRIBE TO SUCH A HEAVY PREMIUM. TH E REVENUE AUTHORITIES CANNOT QUESTION THE CHARGING OF SUCH HUGE PREMIUM WITHOUT ANY BAR FROM ANY LEGISLATED LAW OF THE LAND. THE AMENDMENT HAS BEEN BROUGHT IN THE INCOME TAX ACT UNDER THE HEAD 'INCOME FROM OTHER SOURCES' BY INSERTING CLAUS E (VIIB) TO SEC.56 OF THE ACT WHEREIN IT HAS BEEN PROVIDED THAT ANY CONSIDERATION FOR ISSUE OF SHARES, THAT EXCEEDS THE FAIR VALUE OF SUCH SHARES, THE AGGREGAT E CONSIDERATION RECEIVED FOR SUCH SHARES AS EXCEEDS THE FAIR MARKER VALUE OF THE SHAR ES SHALL BE TREATED AS THE INCOME OF THE ASSESSEE BUT THE LEGISLATURE IN ITS WISDOM H AS MADE THIS PROVISION APPLICABLE W.E.F 1.4.2013 I.E. ON AND FROM A.Y 2013-14. IN SO FAR AS THE YEAR UNDER CONSIDERATION IS CONCERNED, THE TRANSACTION HAS TO BE CONSIDERED IN THE LIGHT OF THE PROVISION OF SEC.68 OF THE ACT. THERE IS NO DISPUTE THAT THE ASSESSEE HAS GIVEN DETAILS OF NAMES AND ADDRESSES OF THE SHARE HOLDERS , THEIR PAN NOS, THE BANK DETAILS AND THE CONFIRMATORY LETTERS ... CONSIDERIN G ALL THESE UNDISPUTED FACTS, IT CAN BE SAFELY CONCLUDED THAT THE INITIAL BURDEN OF PROO F AS RESTED UPON THE ASSESSEE HAS BEEN SUCCESSFULLY DISCHARGED BY THE ASSESSEE. EVEN IF IT IS HELD THAT EXCESS PREMIUM HAS BEEN CHARGED, IT DOES NOT BECOME INCOME AS IT I S A CAPITAL RECEIPT. THE RECEIPT IS NOT IN THE REVENUE FIELD. WHAT IS TO BE PROBED BY T HE AO IS WHETHER THE IDENTITY OF THE ASSESSEE IS PROVED OR NOT. IN THE CASE OF SHARE CAPITAL, IF THE IDENTITY IS PROVED, NO ADDITION CAN BE MADE U/S.68 OF THE ACT. WE DRAW SUPPORT FROM THE DECISION OF THE HON 'WE SUPREME COURT IN THE CASE OF LOVELY EXP ORTS PVT LTD. 317ITR 218. WE, THEREFORE DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). GROUND NO.1 IS ACCORDINGLY DISMISSED. ' (IV) IN THE CASE OF GREEN INFRA LTD VS. ITO REPORTE D IN 38 TAXMANN.COM 253 (MUM- ITAT) DATED 23/8/2013, HON'BLE MUMBAI ITAT DECIDED THAT: 'DURING PREVIOUS YEAR ENDING ON 31-3-2009, IT HAD C OLLECTED SHARE PREMIUM ON ALLOTMENT OF SHARES OF FACE VALUE OF RS. 10 EACH AT A PREMIUM OF RS. 490 PER SHARE - IT HAD CREDITED SAID AMOUNT IN BALANCE-SHEET UNDER HEAD SHARE PREMIUM ACCOUNT- IT CLAIMED THAT SHARE PREMIUM WAS A CAPITAL RECEIPT NO T EXIGIBLE TO TAX-ASSESSING OFFICER HAD TAXED SHARE PREMIUM UNDER SECTION 56(1) AS ASSESSEE'S INCOME FROM OTHER SOURCES - WHETHER SINCE EXPENDITURE AND RECEI PTS DIRECTLY RELATING TO SHARE CAPITAL OF A COMPANY ARE OF CAPITAL IN NATURE, SHAR E PREMIUM COLLECTED BY ASSESSEE COULD NOT BE TAXED UNDER SECTION 56(1) AS INCOME FR OM OTHER SOURCES - HELD, YES - WHETHER SINCE ENTIRE TRANSACTION RELATING TO ALLOTM ENT OF SHARES HAD BEEN DONE THROUGH BANKING CHANNEL AND ASSESSEE HAD INVESTED S HARE PREMIUM IN ITS THREE SUBSIDIARY COMPANIES, PROVISIONS OF SECTION 68 AS S UGGESTED BY REVENUE HAD ALSO NOT APPLICABLE TO INSTANT CASE- HELD, YES .... NO D OUBT A NON EST COMPANY OR A ZERO 7 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. BALANCE COMPANY ASKING FOR A SHARE PREMIUM OF RS.49 0 PER SHARE DEFIES ALL COMMERCIAL PRUDENCE, BUT AT THE SAME TIME ONE CANNO T IGNORE THE FACT THAT IT IS A PREROGATIVE OF THE BOARD OF DIRECTORS OF A COMPANY TO DECIDE THE PREMIUM AMOUNT AND IT IS THE WISDOM OF THE SHAREHOLDERS WHETHER THEY WANT TO SUBSCRIBE TO SUCH A VELY PREMIUM. THE REVENUE AUTHORITIES CANNOT QUESTI ON THE CHARGING OF SUCH OF HUGE PREMIUM WITHOUT ANY BAR FROM ANY LEGISLATED LA W OF THE LAND ' (V) IN THE CASE OF CIT VS. GOA SPONGE AND POWER LTD REPORTED IN APPEAL NO. 16 OF 2012, HON'BLE BOMBAY HIGH COURT DECIDED THAT: 'ONCE THE AUTHORITIES HAVE GOT ALL THE DETAILS, INC LUDING THE NAME AND ADDRESSES OF THE SHAREHOLDERS, THEIR PAN/GIR NUMBER, SO ALSO THE NAME OF THE BANK FROM WHICH THE ALLEGED INVESTORS RECEIVED MONEY AS SHARE APPLI CATION, THEN, IT CANNOT BE TERMED AS 'BOGUS'. THE CONTROVERSY IS COVERED BY TH E JUDGEMENTS RENDERED BY THE HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD, VS. CIT, (2008) 216 CTR (SC) 195, AS ALSO BY THIS COURT IN CIT VS. CREA TIVE WORLD TELEFILMS LTD, (2011) 333 ITR 100 (BOM). IN SUCH CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE TRIBUNAL'S FINDING THAT THERE IS NO JUSTIFICATION IN THE ADDIT ION MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 NEITHER SUFFERS FROM ANY PERVE RSITY NOR GIVES RISE TO ANY SUBSTANTIAL QUESTION OF LAW.' (VI) IN THE CASE OF CIT VS. CREATIVE WORLD TELEF ILMS LTD REPOTTED IN 333 ITR 100. HON'BLE BOMBAY HIGH COURT DECIDED THAT: ' ...THE TRIBUNAL WAS PLEASED TO FOLLOW THE JUDGMEN T OF THE APEX COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. (2008) 216 CTR (SC) 195: (2008) 6 DTR (SC) 308: (2009) 319 ITR 5 (ST.) WHEREIN THE APEX COURT OBSER VED THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE-COMPANY FROM ALLE GED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMEN T CAN ALWAYS PROCEED AGAINST THEM AND IF NECESSARY REOPEN THEIR INDIVIDU AL ASSESSMENTS. IN THE CASE IN HAND, IT IS NOT DISPUTED THAT THE ASSESSEE HAD GIVE N THE DETAILS OF NAME AND ADDRESS OF THE SHAREHOLDER, THEIR PANIGIR NUMBER AND HAD AL SO GIVEN THE CHEQUE NUMBER, NAME OF THE BANK, IT WAS EXPECTED ON THE PART OF TH E AO TO MAKE PROPER INVESTIGATION AND REACH THE SHAREHOLDERS. THE AO DI D NOTHING EXCEPT ISSUING SUMMONS WHICH WERE, WERE ULTIMATELY RETURNED BACK W ITH AN ENDORSEMENT 'NOT TRACEABLE'. IN OUR CONSIDERED VIEW, THE AO OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THE IR BANKERS SO AS TO REACH THE SHAREHOLDERS SINCE ALL THE RELEVANT MATERIAL DETAIL S AND PARTICULARS WERE GIVEN BY THE ASSESSEE TO THE AO. IN THE ABOVE CIRCUMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE FAULTED.' (VII) IN THE CASE OF CIT VS. LOVELY HON'BLE AP EX COURT DECIDED THAT: 'IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO , THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS I N ACCORDANCE -WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF ASSESSE E COMPANY ' 8 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. (VIII)IN THE CASE OF CIT VS. STELLER INVESTMENT LTD REPORTED IN 251 ITR 263, HON'BLE APEX COURT DECIDED THAT: 'THAT THE INCREASE IN SUBSCRIBED CAPITAL OF THE RES PONDENT-COMPANY COULD NOT BE A DEVICE OF CONVERTING BLACK MONEY INTO WHITE WITH TH E HELP OF FORMATION OF AN INVESTMENT COMPANY, ON THE ROUND THAT, EVEN IF IT B E ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED CAPITAL WERE NOT GENUINE, UNDER NO CIRCUMSTANCES COULD THE AMOUNT OF SHARE CAPITAL BE REGARDED AS UNDISCLOSED INCOME, AN APPEAL WAS TAKEN BY THE DEPARTMENT TO THE SUPREME COURT. THE SUPREME COURT DISMISSED THE APPEAL HOLDING THAT THE TRIBUNAL HAD COME TO A CONCLUSION ON FACTS AND NO INTERFERENCE WAS CALLED FOR. (IX) IN THE CASE OF CIT V. VACMET PACKAGING (INDIA) PVT LTD REPORTED IN HON'BLE ALLAHABAD HIGH COURT DECIDED THAT: 'HELD, ASSESSEE HAD FILED DOCUMENTARY EVIDENCE TO P ROVE GENUINENESS OF SHARE APPLICATION MONEY CONSISTING OF (I) SHARE APPLICATI ON FORMS; (II) COPIES OF BANK ACCOUNTS OF SHARE APPLICANTS; (III) COPIES OF INCOM E TAX RETURNS OF SHARE ALLOTTEES; (IV)BALANCE SHEETS; AND (V) COPIES OF SHARE ALLOTME NT CERTIFICATES AND OF BOARD'S RESOLUTION OF THE SHARE APPLICANTS- IDENTITY OF APP LICANTS WAS ESTABLISHED BY PRODUCTION OF COPIES OF PAN CARDS AND REGISTRATION CERTIFICATE WITH THE REGISTRAR OF COMPANIES FINANCIAL CAPACITY WAS ALSO PROVED BY F ILING OF COPIES OF THE BANK ACCOUNTS JI-0111 WHERE THE SHARE APPLICATION MONEY WAS TRANSFERRED THROUGH BANKING CHANNELS TO THE ASSESSEE- ASSESSEE HAD DISC HARGED ONUS PLACED UPON HIM BY 68-CONCURRENT FINDING OF FACTS ALSO RENDERED BY CIT(A) AND TRIBUNAL IN THIS REGARD- NO SUBSTANTIAL QUESTION OF LAW ARISES- REVE NUE'S APPEAL DISMISSED' (X) IN THE CASE OF JAYA SECURITIES LTD. VS. CIT REP ORTED IN 166 TAXMAN 7 (SLP FILED BY DEPARTMENT DISMISSED), HON'BLE ALLAHABAD HIGH COURT DECIDED THAT: 'WHETHER ANY ADDITION UNDER SECTION 68 CAN BE MADE IN RESPECT OF INVESTMENT MADE BY DIFFERENT PERSONS IN SHARE CAPITAL OF ASSES SEE COMPANY, LIMITED BY SHARES, WHETHER PUBLIC OR PRIVATE- HELD, NO. 6.3.11. THUS, IN THE LIGHT OF THE ABOVE FACTUAL NAR RATION, VARIOUS REFERENCES AND JUDICIAL M PRONOUNCEMENTS AS WELL AS BINDING DECISIONS OF JURI SDICTIONAL HIGH COURT OF BOMBAY AND HON'BLE ITAT, MUMBAI, IT WILL BE DIFF ICULT TO SUSTAIN THE ADDITION MADE BY THE AO U/S. 68 OF THE ACT ON ACCOUNT OF SHA RE APPLICATION MONEY AND THE APPELLANT HAY ESTABLISHED THE GENUINENESS OF THE TR ANSACTION AND THAT THE SAME CANNOT BE TREATED AS UNEXPLAINED CREDITS. THEREFORE , THE ADDITION MADE BY THE AO OF RS.4,76,00,000/- IS TO BE DELETED. 5. THE LD. D.R., VEHEMENTLY SUBMITTED BEFORE THE BE NCH THAT THE ORDER PASSED BY THE LD. CIT(A) IS TOTALLY WRONG AND WAS PASSED WITHOUT CONSIDERING THE RATIO LAID DOWN BY V ARIOUS 9 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. JUDICIAL FORUMS/COURTS. THE LD. D.R. SUBMITTED THA T ASSESSEE RAISED A SUM OF RS.4.76 CRORES FROM 9 PRIVATE COMPA NIES RELATED TO SHRI PRAVIN KUMAR JAIN GROUP WHO WERE PART OF HA WALA RACKET WHICH CAME TO LIGHT DURING SEARCH ON THE SAID PERS ON AND HIS ASSOCIATED CONCERNS THAT THE ENTIRE BUSINESS BEING RUN AND OPERATED BY THE PRAVIN KUMAR JAIN GROUP WAS ONLY BOGUS/HAWALA AS THEY WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES IN THE FORM OF UNSECURED LOAN , SHARE APPLICATION MONEY AND LONG TERM CAPITAL GAIN ETC. THE LD DR CONTENDED THAT MERE FACT THAT ALL THE LENDERS COMPA NIES WERE REGISTERED COMPANIES AND HAVE BEEN FILING THEIR RET URNS OF INCOME REGULARLY BEFORE THE INCOME TAX AS WELL AS ROC OR FILED CONFIRMATIONS, PANS, BANK STATEMENTS AND ANNUAL AUD ITED ACCOUNTS ETC WOULD NOT MAKE THE BOGUS TRANSACTIONS AS GENUINE ONES. THE LD DR ARGUED THAT FINDINGS OF THE LD. C IT(A) THAT AO HAS NOT CONDUCTED ANY ENQUIRY DESPITE ASSESSEE HAVI NG FILED VARIOUS DOCUMENTS SUCH AS PANS, CONFIRMATION LETTER S, COPIES OF BANK STATEMENTS, COPY OF ITRS ETC IS NOT OF ANY LEG AL SIGNIFICANCE AS PRAVEEN KUMAR JAIN GROUP WAS A HAWALA OPERATOR. THE LD. D.R. SUBMITTED THAT THE DECISIONS RELIED UPON BY TH E LD CIT(A) ARE DISTINGUISHABLE ON FACTS AND THEREFORE SHOULD N OT BE FOLLOWED. THE LD. D.R. HEAVILY RELIED ON THE DECIS ION OF HONBLE DELHI HIGH COURT IN THE CASE OF M/S. JANSAMPARK ADV ERTISING & MARKETING P LTD. 56 TAXMAN 286 WHEREIN THE HONBLE COURT HELD THAT LD. CIT(A) SHOULD HAVE MADE PROPER ENQUIRY IF AO FAILS TO MAKE ENQUIRIES. THE LD. D.R. SUBMITTED THAT LD. C IT(A) MERELY RELIED UPON THE FACT THAT ASSESSEE FILED BANK STATE MENTS, ITRS, PAN NUMBERS AND CONFIRMATIONS. THE LD. D.R. CONTE NDED THAT MERE FILING ALL THESE DOCUMENTS WOULD NOT PROVE THE IDENTITY, 10 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINES S OF THE LENDERS AUTOMATICALLY. FINALLY, THE LD. D.R. PRAYE D BEFORE THE BENCH THAT IN VIEW OF THE DETAILED SUBMISSIONS AND ARGUMENTS, THE ORDER PASSED BY THE LD. CIT(A) MAY BE REVERSED . 6. THE LD. A.R., ON THE OTHER HAND, WHILE OPPOSING THE ARGUMENTS OF THE LD. D.R. VEHEMENTLY SUBMITTED THAT THE APPELLATE ORDER WAS PASSED BY THE LD. CIT(A), AFTER GIVING A DETAILED FINDINGS AND REASONING AND AFTER TAKING I NTO ACCOUNT VARIOUS DECISIONS OF HONBLE JURISDICTIONAL HIGH C OURT AND OTHER JUDICIAL FORUMS, IS AS PER LAW AND THEREFORE DOES N OT REQUIRE ANY INTERFERENCE FROM THE HON'BLE TRIBUNAL. THE LD. A. R. VEHEMENTLY SUBMITTED BEFORE US THAT ASSESSEE HAS FILED ALL THE NECESSARY EVIDENCES BEFORE THE AO DURING THE COURSE OF RE-ASS ESSMENT PROCEEDINGS BUT AO HAS NOT MADE ATTEMPT TO MAKE AN Y FURTHER ENQUIRY/INVESTIGATION AND HAD JUST ACTED ON THE BAS IS OF SUSPICION AND CONJECTURES THAT SHRI PRAVIN KUMAR JA IN AND ASSOCIATES WERE PROVIDING BOGUS ENTRIES WHEREAS IN THE STATEMENT OF SHRI PRAVIN KUMAR JAIN NOWHERE ASSESSE ES NAME HAS BEEN MENTIONED. MOREOVER, THE EVIDENCES FILED IN THE FORM OF BANK STATEMENTS, ITRS, LOAN CONFIRMATIONS AND P AN NUMBERS ALL COLLECTIVELY PROVED THAT ALL THESE LOAN TRANSAC TIONS WERE GENUINE AND DULY REFLECTED BY THE LENDERS COMPANIE S IN THEIR RESPECTIVE BOOKS OF ACCOUNTS. THE LD. A.R. SUBMIT TED THAT AO HAS MERELY RELIED ON THE SUSPICION THAT SHRI PRAVI N KUMAR JAIN AND ASSOCIATED COMPANIES WERE ENGAGED IN THE ACCOMM ODATION ENTRIES AND ASSESSEE IS A BENEFICIARY OF THAT RACKE T. THE AOS CONCLUSION IS WITHOUT ANY CORROBORATION OR VERIFICA TION OR ESTABLISHING THAT CASH AMOUNT HAS CHANGED HAND BETW EEN THE 11 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. ASSESSEE AND THE LENDER COMPANIES. THE LD. A.R. HE AVILY RELIED ON THE ORDER OF LD. CIT(A) AND CITED FOLLOWING DEC ISIONS IN DEFENSE OF HIS ARGUMENTS : 1. PCIT VS. VIDHATA TOWER LTD. 819 ITR 2015 (BOM.- HC) 2. RELIANCE CORPORATION VS. ITO (ITA NO.1069 TO 1071/M/2017 (MUM) 3. ITO VS. SHREEDHAM CONSTRUCTIONS P. LTD. ITA NO.3754 AND 3756/M/2017 (MUM) 4. CONCEPT COMMUNICATION LTD. VS. DCIT (ITA NO.3026/M/2016) FINALLY, THE LD. A.R. SUBMITTED THAT IN VIEW OF THE FACTS OF THE CASE OF THE ASSESSEE AND VARIOUS JUDICIAL PRONOUNCE MENTS AS CONSIDERED BY THE LD. CIT(A) AND AS BROUGHT BEFORE THE BENCH DURING THE COURSE OF HEARING, THE ORDER OF LD. CIT( A) DOES NOT REQUIRE ANY INTERFERENCE AS HE HAS RIGHTLY DELETED THE ADDITION WHICH WAS MADE SOLELY ON THE BASIS OF A STATEMENT W HICH HAS BEEN RETRACTED JUST 3 DAYS AFTER RECORDING THEREOF AND IN VIEW OF THE FACT THAT DESPITE ASSESSEE DISCHARGING ITS ONUS BY FILING ALL THE NECESSARY EVIDENCES , THE AO HAS NOT DONE ANYTH ING TO VERIFY THE EVIDENCES FILED BY THE ASSESSEE BY CONDUCTING ANY FURTHER INVESTIGATION/ENQUIRY DURING THE ASSESSMENT PROCEED INGS. THEREFORE, THE ORDER OF LD. CIT(A) MAY BE CONFIRMED . 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD ALONG WITH VARI OUS CASE LAWS REFERRED AND RELIED BY BOTH THE PARTIES. THE CASE OF THE ASSESSEE WAS RE-OPENED U/S 147 OF THE ACT ON THE BA SIS OF INFORMATION RECEIVED FROM DGIT(INVESTIGATION) THAT ASSESSEE HAS 12 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. TAKEN ACCOMMODATION ENTRIES IN THE FORM OF SHARE CA PITAL/SHARE PREMIUM FROM NINE ENTITIES BELONGING TO SHRI PRA VIN KUMAR JAIN WHICH CAME TO LIGHT DURING THE COURSE OF THE SEARCH ACTION ON SHRI PRAVIN KUMAR JAIN ON 1.10.2013 AND GROUP EN TITIES AND HE ADMITTED BEFORE THE SEARCH TEAM IN THE COURSE O F SEARCH PROCEEDINGS THAT HE AND HIS ASSOCIATED CONCERNS WER E PROVIDING ACCOMMODATION ENTRIES ONLY IN THE FORM OF SHARE APP LICATION, SHARE CAPITAL, UNSECURED LOANS AND LONG TERM CAPITA L GAINS. HOWEVER, LATER ON SHRI PRAVIN KUMAR JAIN RETRACTED HIS STATEMENT GIVEN DURING SEARCH. IN THIS CASE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED COPI ES OF BANK STATEMENTS, ITRS, CONFIRMATIONS, PAN NUMBERS AND AN NUAL AUDITED ACCOUNTS ETC OF THE INVESTORS COMPANIES A ND THUS THE ASSESSEE HAS FULLY DISCHARGED THE ONUS CAST UPON I T AND THUS THE ADDITION UNDER SECTION 68 OF THE ACT CAN NOT BE MADE IN THE SAID CIRCUMSTANCES QUA THE UNSECURED LOANS RAISED BY THE ASSESSEE. THE AO HAS MERELY RELIED ON THE STATEMEN T OF SHRI PRAVIN KUMAR JAIN BY IGNORING THE FACT THAT THE ST ATEMENT GIVEN BY SHRI PRAVIN KUMAR JAIN STOOD RETRACTED. AFTER PERUSING THE ORDER OF LD. CIT(A) WHO HAS DEALT WITH THE FACTS I N GREAT DETAIL AND ALSO DISCUSSED THE VARIOUS DECISIONS WHEREIN IT HAS BEEN HELD THAT NO SUCH ADDITION CAN BE MADE UNDER SECTIO N 68 OF THE ACT WHERE THE ASSESSEE HAS FILED ALL THE NECESSARY EVIDENCES BEFORE THE AO WHEN AO HAS NOT MADE ANY FURTHER ENQ UIRY TO DIG OUT THE TRUTH OR PROVED OTHERWISE. THE ALLEGATION OF THE AO THAT ASSESSEE HAS NOT PROVED IDENTITY AND CREDITWORTHIN ESS OF THE INVESTORS AND GENUINENESS OF THE TRANSACTIONS IS W ITHOUT ANY BASIS AS STATED ABOVE. THE ASSESSEE FILED THE NECE SSARY EVIDENCES IN THE FORM OF LOAN CONFIRMATIONS, BALANC E SHEETS AND 13 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. PROFIT AND LOSS ACCOUNTS, ITRS, BANK STATEMENTS AND PAN CARDS OF THE INVESTORS. MOREOVER , THE INVESTORS COMPANIE S WERE FILING THEIR ITRS AND ROC RETURNS REGULARLY AND HAVE DULY SHOWN THE AMOUNT LENT TO THE ASSESSEE IN THEIR RESPECTIVE BAL ANCE SHEETS. ENTIRE TRANSACTIONS WERE ROUTED THROUGH THE BANKING CHANNELS AND THUS THE ASSESSEE HAS DISCHARGED THE PRIMARY ON US OF PROVING THE IDENTITY, CREDITWORTHINESS AND GENUINEN ESS OF THE TRANSACTIONS. WE ALSO NOTE THAT THE NOTICES ISSUED U/S 133(6) WERE RESPONDED BY THE INVESTORS. ON THE ISSUE THAT THESE LENDERS ARE SHOWING LOW INCOME OR LOSSES IN THE RET URN OF INCOME FILED, WE OBSERVE THAT IN THE BALANCE SHEETS INVEST MENTS BY THE COMPANIES WERE DULY REFLECTED AND THUS THERE IS NO INCOME IN THE PARTICULAR YEAR HAS NO RELEVANCE WHEN THERE WE RE SUFFICIENT SOURCES. UNDER THESE CIRCUMSTANCES, WE, AFTER TAKI NG INTO CONSIDERATION THE CONTENTIONS AND SUBMISSIONS OF BOTH THE PARTIES AND AFTER ANALYZING THE VARIOUS CASE LAWS R ELIED UPON BY THE RIVAL PARTIES, ARE OF THE VIEW THAT ORDER PASS ED BY THE LD. CIT(A) IS WELL REASONED AND THERE IS NO REASONS TO DEVIATE FROM THE FINDINGS OF THE LD CIT(A). WE ARE, THEREFORE, INCLINED TO UPHOLD THE ORDER OF CIT(A) BY DISMISSING THE APPEAL OF THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 26.03.2019. SD/- SD/- (RAJESH KUMAR) (AMARJEET SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 26.03.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI 14 ITA NO.5684/M/2017 M/S. PATODIA FILAMENTS P. LTD. THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/A SSTT. REGISTRAR, ITAT, MUMBAI.