M/s. R.P. Singh & Co. Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 5710/DEL/2012

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6470 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 05-01-2017
• Assessment Year: 2000-2001
• Appeal Filed On: 09-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: SSH J S KOCHAR; U S KOCHAR S
• Keywords: Unexplained cash credit; Gift; Income from undisclosed sources; Search and seizure; Salary income; Share purchase agreement; Question of law; Difference of opinion; Assessment record; Onus to prove
• Section: 147; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F NEW DELHI BEFORE SH. H.S. SIDHU , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 5710 /DEL/ 2012 ASSESSMENT YEAR: 2000 - 01 M/S. R.P. SINGH & CO. PVT. LTD., 382, BHERA ENCLAVE PACHIM VIHAR, NEW DELHI VS. THE A CIT, CIRCLE - 15(1), C.R. BUILDING, I.P. ESTATE, NEW DELHI PAN : AAACR5778B (APPELLANT) (RESPONDENT) APPELLANT BY S/SH. J.S. KOCHAR & U.S. KOCHAR, ADVOCATES. RESPONDENT BY SH. F.R. MEENA, SR.DR DATE OF HEARING 05.01.2017 DATE OF PRONOUNCEMENT 10.03.2017 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XVIII, NEW DELHI, DATED 14.08.2012, FOR ASSESSMENT YEAR 2000 - 01 RAISING THE FOLLOWING GROUNDS : 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW BY CONFIRMING THE ADDITION OF RS.13,90,000/ - RECEIVED AS SHARE APPLICATION MONEY, DESPITE THE FACT THAT OUT OF A TOTAL OF 29 SHARE APPLICANTS. I. 19 APPLICANTS WHOSE AGGREGATE INVESTMENTS WERE RS. 10,15,000 WERE PRODUCED BEFORE THE A.O. AND THEY CONFIRMED THEIR INVESTMENTS. II. 2 APPLICANTS WITH AGGREGATE INVESTMENTS OF RS.90,000 HAD SINCE DIED AND THEIR DEATH CERTIFICATES WERE FILED. III. REQUEST WAS MADE TO THE ASSESSING OFFICER TO ISSUE SUMMONS U/S 131 TO 4 APPLICANTS WITH AGGREGATE INVESTMENT 2 ITA NO. 5710/DEL/2012 AY: 2000 - 01 OF RS.1,20,000 BUT THE SAME WAS IGNORED BY THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) DID NOT ADJUDICATE THIS SPECIFIC GROU ND RAISED BEFORE HER, AND IV. REQUEST WAS MADE TO ISSUE COMMISSIONS TO 4 APPLICANTS WITH AGGREGATE INVESTMENT OF RS.1,65,000 WHO WERE AGED AND INFIRM BUT SUCH REQUEST WAS IGNORED BY THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) DID NOT AD JUDICATE THIS GROUND. 2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT RS.13,90,000 RECEIVED BY THE ASSESSEE TOWARDS SHARE APPLICATION MONEY CANNOT BE REGARDED AS SHARE APPLICATION MONEY, DESPITE THE FACT THAT THE A.O. NEVER DISPUTED THIS FACT EITHER IN THE ORIGINAL ASSESSMENT PROCEEDINGS OR IN THE REMAND ASSESSMENT PROCEEDINGS OR IN THE VARIOUS APPEALS FILED BEFORE THE ITAT AND THE HIGH COURT. 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW BY HOLDING THAT PAID UP SHARE CAPITAL AND SHARE APPLICATION MONEY CANNOT EXCEED AUTHORIZED SHARE CAPITAL, IN TOTAL IGNORANCE OF THE PROVISIONS OF COMPANIES ACT, 1956, 4) THE LEARNED CIT(A) FAILED TO CONSIDER AND EXAMINE THE ORAL AS WELL AS DOCUMENTARY EVIDENCES FILED AND PRODUCED BY THE A SSESSEE DURING THE ASSESSMENT PROCEEDINGS. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE, A PRIVATE LIMITED COMPANY , FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2000 - 01 ON 30.11.2000 DECLARING TOTAL INCOME OF RS.1,33,220/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) . T HE ASSESSMENT WAS THEREAFTER REOPENED U/S 147 OF THE ACT AFTER ISSUING NOTICE U/S 148 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT , THE ASSESSEE COMPANY DISCLOSED RECEIPT O F RS.13,90,000 / - AS SHARE APPLICATION MONEY FROM 29 PERSONS. THE ASSESSING OFFICER OBSERVED THAT AT THE RESIDENCE OF SH. RP SINGH, DIRECTOR OF THE COMPANY, A SEARCH WAS CONDUCTED BY THE CENTRAL BUREAU OF INVESTIGA TION (CBI) ON 12/05/2000 AND CASH OF RS. 2 LACS AND INDIRA VIKAS PATRAS (IV P) OF RS. 8, 97, 500/ - (PURCHASED DURING THE PERIOD FROM 12/07/1999 TO 15/07/1999 ) WERE FOUND . IT WAS EXPLAINED BEFORE THE CBI THAT SOURCE OF AFORESAID CASH AND INVESTMENT IN IVP S WAS OUT OF SHARE APPLICATION MONEY OF RS. 1 3, 90,000 3 ITA NO. 5710/DEL/2012 AY: 2000 - 01 BY THE ASSESSEE COMPANY FROM 29 INDIVIDUALS RECEIVED BETWEEN THE PERIOD FROM APRIL 1999 TO AUGUST 1999. 2.1 IN ASSESSMENT COMPLETED, THE AMOUNT RAISED BY WAY OF SHARE APPLICATION MONEY WAS TREATED AS INCOME FROM UNDISCLOSED SOURCES U/S 68 OF TH E ACT BY THE ASSESSING OFFICER BY OBSERVING: (I) THAT W HOLE OF THE SHARE APPLICATION MONEY OF RS.13, 90,000 / - WAS RECEIVED IN CASH ; (II) THAT O UT OF THE 29 INDIVIDUALS, ONLY FIVE P ERSONS WERE ASSESSED TO INCOME TAX; (III) THAT THE AUTHORIZED SHARE CAPITAL OF THE COMPANY AT THE TIME OF RECEIPT OF SHARE APPLICATION MONEY WAS ONLY RS. 1.00 LAKHS AND NECESSARY APPROVAL FOR INCREASE IN AUTHORIZED SHARE CAPITAL WAS SOUGHT ONLY ON 04.01.2002 , WHICH IS MUCH AFTER THE DATE OF RECEIPT OF SHARE APPLICA TION MONEY ; (IV) THAT FOUR PERSONS WHOSE STATEMENTS WERE RECORDED ON OATH BY THE ITO ON 26.02.2004 DURING ASSESSMENT PROCEEDINGS OF AY 2002 - 03 , ACCEPTED THAT THEY HAD PAID MONEY TO SH . R . P . SINGH , BUT DENIED HAVING RECEIVED SHARE CERTIFIC ATES; (V) THAT T HE SHARE A PPLICATION FORM ( DULY SIGNED ) IN RESPECT OF THE ABOVE 4 SHARE APPLICANTS WERE FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER , SUBSEQUENT TO THEIR DENIAL IN THE STATEMENT DATED 26/02/2004 THAT THEY HAD NOTHING TO DO WITH THE SHARES OF THE COMPANY ; (VI) THAT ONLY ONE SHAREHOLDER I.E. SH . VIJAY VEER SINGH WAS PRODUCED F OR EXAMINATION BEFORE THE ASSESSING OFFICER , WHO STATED PAYMENT OF RS. 30,000 IN CASH TO SH. RP SINGH BUT DENIED ANY KNOWLEDGE OF SHARES, HIS ROLE IN THE AFFAIRS OF THE COMPANY AND KNOWLE DGE OF BENEFIT OR RISK ASSOCIATED WITH THE AMOUNT INVESTED IN THE SHARE OF THE COMPANY AND; 4 ITA NO. 5710/DEL/2012 AY: 2000 - 01 (VII) THAT THE SHARE APPLICATION MONEY WAS INTRODUCED IN NAMES OF BOGUS SHARE HOLDERS TO EXPLAIN THE SOURCE OF INVESTMENTS IN IVPS IN THE RETURN OF INCOME FILED SUBSEQU ENT TO THE SEARCH BY THE CBI. 2.2 AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE LEARNED CIT(A) , WHO VIDE ORDER DATED 02/07/2008 DELETED THE ADDITION BY OBSERVING THAT ALL THE PERSONS FILED THEIR AFFIDAVIT AND FILED COPIES OF SHARE APPLICATION FORM. 2.3 ON FURTHER APPEAL BEFORE THE I NCOME T AX APPELLATE TRIBUNAL ( FOR SHORT THE TRIBUNAL ), THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER BY THE TRIBUNAL VIDE ORDER DATED 07/07/2009 WITH FOLLOWING OBSERVATIONS: WE ARE OF THE CONSIDERED OPINION THAT THE PARTIES WERE REQUIRED TO BE EXAMINED ON THEIR AFFIDAVITS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE NARRATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND DISCUSSED ABOVE IN THE FOREGOING PARAGRAPHS. WE ARE THEREFORE OF THE CONSIDERED OPINION THAT THE ISSUE IS REQUIRED TO BE RESTORED TO THE FILE OF THE A.O. WITH THE DIRECTION THAT HE SHOULD ALLOW THE ASSESSEE FURTHER OPPORTUNITY TO PRODUCE THE PARTIES AND DECIDED THE ISSUE AFRESH AFTER MAKING SUCH ENQUIRIES AS ARE CON SIDERED NECESSARY BY HIM AND GIVING PROPER OPPORTUNITY TO THE ASSESSEE. 2. 4 I N COMPLIANCE TO THE DIRECTION OF THE TRIBUNAL, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE ALL 29 SHARE APPLICANTS FOR EXAMINATION. THE ASSESSEE PRODUCED 19 SHARE APPLI CANTS BETWEEN 16/12/2010 TO 22/12/2010 HAVING SHARE APPLICATION MONEY OF RS.10, 15,000/ - . THE ASSESSEE PRODUCED DEATH CERTIFICATES IN RESPECT OF 2 PERSONS. THE ASSESSING OFFICER SUMMARISED THE STATEMENTS OF THE SHARE APPLICANT IN PARA - 7.6 AND 7.7 OF THE ASS ESSMENT ORDER , EXTRACT OF WHICH, IS REPRODUCED AS UNDER: 5 ITA NO. 5710/DEL/2012 AY: 2000 - 01 7.6 FROM THE STATEMENTS RECORDED ABOVE IT IS CLEAR THAT STATEMENTS GIVEN BY ALL OF THE ABOVE PERSONS WERE ALMOST IDENTICAL. ALL OF THEM ARE RELATIVES/CLOSE FRIENDS OF SHRI R.P. SINGH, MOST OF THEM D OE NOT HAVE THE CREDIT WORTHINESS TO EXTEND SHARE CAPITAL. NONE OF THEM ARE NOT REGULAR SHARE INVESTORS. THEY HAVE NOT MADE INVESTMENT IN SHARES OTHER THAN THIS. THEY HAVE ALSO STATED THAT THEY HAVE NEVER RECEIVED ANY LETTERS OR ANY CORRESPONDENCE FROM THE COMPANY WITH RESPECT TO MEETINGS OF ANY SORT. IT IS MANDATORY FOR ANY COMPANY TO HOLD ITS AGM AND SEND LETTER TO ALL OF THEIR SHAREHOLDERS WELL IN TIME BUT THESE SHARE HOLDERS HAVE NEVER RECEIVED ANY LETTER FROM THE COMPANY. IT IS THUS CLEAR THAT THESE AR E SHARE HOLDER ONLY ON PAPER AND NO COMMUNICATION HAD EVER BEEN MADE WITH THEM. 7.7 FURTHER, MANY OF THEM HAVE CHANGED THEIR STATEMENTS FROM THOSE ORIGINALLY GIVEN. IT IS EVIDENT THAT THEY HAVE BEEN TUTORED. IT APPEARS THAT SH. R.P. SINGH HAS COLLECTED SEVERAL OF HIS RELATIVES, AND CLOSE FRIENDS AND IS PRESENTING THEM AS SHARE HOLDERS OF HIS COMPANY. 2.5 THE ASSESSING OFFICER REFERRED TO VARIOUS DECISIONS OF THE COURTS AND FINALLY HELD THE SHARE APPLICATION MONEY OF RS.13, 90,000/ - AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT WITH FOLLOWING OBSERVATIONS: 9.8 TO REITERATE, THE ONUS IS ON THE ASSESSEE TO SATISFACTORILY PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF A CASH CREDIT. THE GENUINENESS OF THE TRANSACTION IS TO BE CONSIDERED O N THE BASIS OF SURROUNDING CIRCUMSTANCES, HUMAN PROBABILITIES AND THE CONDUCT OF THE CONNECTED PARTIES. THUS THE TRANSACTION CANNOT BE SAID TO BE GENUINE IN THE LIGHT OF HUMAN PROBABILITIES. A TRANSACTION DOES NOT BECOME GENUINE MERELY BECAUSE A PAPER TRAI L HAS BEEN CREATED/FILED. THE ASSESSING OFFICER WHILE EXERCISING HIS POWER AS AN INVESTIGATION OFFICER HAS A RIGHT TO GO BEYOND WHAT IS APPARENT. EVEN THOUGH THE DOCUMENT MAY BE IN ORDER, IF THERE IS ENOUGH MATERIAL TO RAISE A VERY STRONG SUSPICION THAT TH ERE IS SOMETHING NOT QUITE RIGHT WITH THE NATURE OF TRANSACTION, THE AUTHORITY UNDER THE ACT MAY REJECT THE DOCUMENT AND REQUIRE THE ASSESSEE TO SHOW THAT THE TRANSACTION IS REALLY ONE WHICH IS ABOVE BOARD. 2.6 ON FURTHER APPEAL, BEFORE THE LEARNE D COMMISSIONER OF INCOME - TAX (APPEALS), THE DETAILED SUBMISSIONS FILED BY THE ASSESSEE WERE 6 ITA NO. 5710/DEL/2012 AY: 2000 - 01 FORWARDED TO THE ASSESSING OFFICER CALLING FOR REMAND REPORT. IN THE REMAND REPORT THE ASSESSING OFFICER OBSERVED THAT MOST OF THE SHAREHOLDERS WERE FARMERS AND IT W AS N OT PRACTICALLY POSSIBLE FOR A FA RMER WHO EARN AROUND RS. 50,000 / - TO 60,000 PER ANNUM , TO INVEST RS. 30,000 / - OUT OF THE TOTAL EARNING IN THE SHARE CAPITAL. HE ALSO FURTHER OBSERVED THAT IN COPIES OF THE SHARE CERTIFICATES FILED BY THE ASSESSEE COMPANY , THERE WAS NO MENTION OF NAME OF THE COMPANY ALSO. THE LD. COMMISSIONER OF INCOME - TAX ( APPEALS) AFTER CONSIDERING THE REMAND REPORT AND SUBMISSION OF THE ASSESSEE CONCLUDED THAT THE FINANCIAL STRENGTH OF THE PERSONS WHO ALLEGEDLY MADE THE INVESTMENT HAD N OT BEEN ESTABLISHED AND THE ASSESSEE FAILED TO DISCHARGE THE PRIMARY ONUS OF PROVING THE CAPACITY TO MAKE INVESTMENT IN THE SHARE APPLICATION MONEY AND TO PROVE THE GENUINENESS OF THE TRANSACTIONS. IN SUPPORT OF THE FINDING, THE LD. COMMISSIONER OF INCOME - TAX ( APPEALS) ALSO RELIED ON THE FOLLOWING DECISIONS: 1. INDUS VALLEY P ROMOTERS LTD . VS. COMMISSIONER OF INCOME T AX , (2008) 305 ITR 202 (DELHI) 2. COMMISSIONER OF INCOME T AX VS. P MOHANA K ALA , 291 ITR 278 (SC) 3. COMMISSIONER OF INCOME T AX VS. NOVA PROMOTERS AND FINLEASE PRIVATE L IMITED , (2012) 342 ITR 169 (DELHI). 2.7 AGGRIEVED WITH THE ABOVE FINDING OF THE LD. COMMISSIONER OF INCOME - TAX (APPEALS), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. AT THE TIME OF HEARING B EFORE US, THE LD. COUNSEL OF THE ASSESSEE ARGUED CHALLENGING THE ADDITION OF RS.13, 90,000/ - AND NO ARGUMENTS WERE MADE SPECIFICALLY IN RESPECT OF GROUND NO. 2 AND 3 RAISED IN THE APPEAL . THE EFFECTIVE GROUND OF APPEAL IN THE CASE IS THUS AGAINST CONFIRMING OF ADDITION OF RS. 13, 90,000 / - BY THE LD. COMMISSIONER OF INCOME - TAX (APPEALS). 7 ITA NO. 5710/DEL/2012 AY: 2000 - 01 4. INVITING OUR ATTENTION TO THE GROUND S RAISED, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE AS PER THE DIRECTION OF THE TRIBUNAL OUT OF 29 SHARE APPLICANT S , THE ASSESSEE PRODUCED 19 SHARE APPLICANTS , WHOSE AGGREGATE INVESTMENT IS OF RS.10, 15,000 / - , BEFORE THE ASSESSING OFFICER AND THE Y CONFIRMED THEIR INVESTMENTS. HE FURTHER SUBMITTED THAT TWO SHARE APPLICANTS W ITH AGGREGATE INVESTMENT OF RS 90,000/ - HAD SINCE DIED AND THEIR DEATH CERTIFICATE WERE FILED. HE FURTHER SUBMITTED THAT IN RESPECT OF FOUR SHARE APPLICANTS WITH AGGREGATE INVESTMENT OF RS.1,20,000/ - , THE ASSESSING OFFICER WAS REQUESTED TO ISSUE SUMMONS UNDER SECTION 131 OF THE ACT , HOWEVER , SAME WAS IGN ORED BY THE ASSESSING OFFICER. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER WAS REQUESTED TO ISSUE COMMISSIONS IN RESPECT OF FOUR APPLICANTS WITH AGGREGATE INVESTMENT OF RS.1, 65,000/ - WHO WERE AGED AND INFIRM BUT SUCH REQUEST WAS IGNORED BY THE ASSESSIN G OFFICER. THE LD. COUNSEL SUBMITTED A DETAILED PAPER BOOK HAVING PAGES 1 TO 209 , WHICH CONTAIN ALL DOCUMENTARY EVIDENCE IN RESPECT OF MONEY RECEIVED FROM 29 APPLICANTS . THE LD. COUNSEL SUBMITTED THAT CIT ( A ) VENTURED INTO FINDING WHETHER THE AMOUNTS WERE S HARE APPLICATION MONEY OR CURRENT LIABILITY OR LOANS WHEREAS AS PER THE TERMS OF REMAND THE ISSUE TO BE GONE INTO IN THE FRESH ASSESSMENT WAS TO EXAMINE THE GENUINENESS OF THE CREDITS AFTER EXAMINING THE PARTIES ON THEIR AFFIDAVITS. IT WAS SUBMITTED THAT I N CASE OF EIGHT PERSONS, IN RESPECT OF WHOM, REQUEST WAS MADE TO ISSUE SUMMONS AND COM MISSION HOWEVER THE AO DID NOT A CT UPON THE REQUEST OF THE ASSESSEE AND THUS NO ADDITION COULD HAVE BEEN MADE IN RESPECT OF SHARE APPLICATION MONEY RECEIVED FROM THEM. IN CASE OF THE TWO PERSONS, WHO DIED DURING THE COURSE OF ASSESSMENT AND APPEAL PROCEEDINGS, THE ASSESSEE CANNOT BE PENALIZED. FURTHER , HE SUBMITTED THAT OUT OF THE 19 PERSONS EXCEPT TWO PERSONS I.E. SH. KRISHAN KUMAR ( RS. 1.00 LAKHS) AND 8 ITA NO. 5710/DEL/2012 AY: 2000 - 01 SH. DEEPAK KUMAR ( RS. 2.50 LAKHS) ALL OF THEM INVESTED MEAGER AMOUNT OF RS. 30,000 TO RS. 50,000/ - . THE LEARNED COUNSEL REFERRED TO THE STATEMENT OF THE PERSONS AND SUBMITTED THAT THE ASSESSING OFFICER HAS NOT IMPEACHED THE STATEMENT IN THE CROSS EXAMINAT ION THAT THOSE PERSONS WERE MERE NAME LENDER AND IT WAS ASSESSEE S OWN MONEY. WITH REGARD TO THE IDENTITY OF THE PERSONS, THE LD. COUNSEL SUBMITTED THAT 9 PERSONS WERE ALREADY PRODUCED BEFORE THE ASSESSING OFFICER AND THEIR IDENTITY STANDS PROVED. FURTHER IN RESPECT OF THE TWO PERSONS, DEATH CERTIFICATE WAS ALSO PRODUCED, WHICH PROVED THEIR IDENTITY. IN RESPECT OF THE REMAINING EIGHT PERSONS, THE ASSESSEE FURNISHED THEIR AFFIDAVITS AND REQUESTED FOR ISSUE OF SUMMON/COMMISSIONS, THEIR IDENTITY ALSO STAND PRO VED. THE LD. COUNSEL FURTHER RELYING ON THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY E XPORTS (P) LTD. 216 CTR 195(SC) SUBMITTED THAT ONCE THE NAME S AND ADDRESSES OF THE SHAREHOLDERS ARE GIVEN, EVEN IF THEY ARE ALLEGED TO BE BOGUS , NO ADDITION COULD BE MADE IN THE HAND OF THE ASSESSEE. IN SUPPORT OF DISCHARGE OF ONUS OF CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION, THE LEARNED COUNSEL SUBMITTED THAT ORAL TESTIMONIES OF 19 PERSONS WERE RECORDED BY THE ASSESSING OFFICER AND AL L OF THEM HAVE CONFIRMED HAVING INVESTED IN THE SHARES OF THE ASSESSEE COMPANY AND ALSO CONFIRMED THEIR SOURCE OF INCOME AND WEALTH IN RELATION TO THE AMOUNT INVESTED. IN SUPPORT OF THE CONTENTION, THE LD. COUNSEL RELIED ON FOLLOWING DECISIONS: 1. CIT VS. PRA YAG HOSPITAL AND R ESEARCH IN ITA NO. 917/2010(DELHI) 2. CIT VS. JJ JINDAL INFIN P . LTD . IN ITA NO. 1507/2010 (DELHI) 3. CIT VS. TDI MARKETING PRIVATE LIMITED IN ITA NO. 340/2009(DELHI) 4.1 THE LD. COUNSEL ARGUED THAT THE ASSESSEE HAS ALREADY SUBMITTED ALL THE DOCUMENTS WITH REGARD TO THE IDENTITY OF PERSONS , GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PERSONS AND EVEN PRODUCED 19 PERSONS FOR EXAMINATION BEFORE THE ASSESSING OFFICER AND THU S THE 9 ITA NO. 5710/DEL/2012 AY: 2000 - 01 ASSESSEE HAS DISCHARGED ITS BURDEN OF PROOF UNDER SECTION 68 OF THE ACT AND THUS THE ADDITION CANNOT BE SUSTAINED IN THE CASE OF THE ASSESSEE. 5. ON THE OTHER HAND, THE LEARNED SR. DEPARTMENTAL R EPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE F AILED TO ESTABLISH CREDITWORTHINESS OF THE MOST OF THE PERSONS AND THE GENUINENESS OF THE TRANSACTIONS COULD NOT BE ESTABLISHED KEEPING IN VIEW THE FACTS THAT PAYMENTS SHOWN TO HAVE BEEN MADE IN CASH, NO EXPLANATION BY THE MOST OF THE PERSONS A S WHY THE MO NEY REMAIN INVESTED IN THE COMPANY WITHOUT ANY DIVIDEND OR PROFIT FOR LAST MORE THAN 10 YEARS . IN SUPPORT OF THE CONTENTION, THE LD. SENIOR DR RELIED ON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF SUMATI DAYAL 214 ITR 801 AND SUBMITTED THAT THE GE NUINENESS OF THE TRANSACTION IS TO BE CONSIDERED ON THE BASIS OF SURROUNDING CIRCUMSTANCES, HUMAN PROBABILITIES AND THE CONDUCT OF THE CONNECTED PARTIES AND A TRANSACTION DOES NOT BECOME GENUINE MERELY BECAUSE A PAPER TRAIL HAS BEEN CREATED . 6. WE HAVE HE ARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE PAPER BOOK FILED BEFORE US, T HE LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED , A LIST OF ALL THE 29 SHARE APPLICANTS ALONGWITH THE AMOUNT INVESTED AND THE DOCUMENTS FILED IN SUPPORT OF THE REQUIREMENTS OF SECTION 68 OF THE ACT , WHICH WERE FILED BEFORE THE LOWER AUTHORITIES . 7. THE ISSUE IN DISPUTE BEFORE US IS WHETHER THE ASSESSEE HAS DISCHARGED ITS ONUS IN TERMS OF REQUIREMENT S OF SECTION 68 IN RESPECT OF EACH OF THE PERSON S , WHO HAVE ALLEGED TO HAVE PAID MONEY TO THE ASSESSEE COMPANY . T HE LD. COUNSEL SUBMITTED BEFORE US THAT IN THE PRESENT CASE THE ASSESSEE SUBMITTED NAME AND ADDRESS OF THE PERSONS, WHO ACCORDING TO THE ASSES SEE INVESTED IN SHARE APPLICATION MONEY, AND THUS RELYING ON THE DECISION IN THE CASE OF L OVELY EXPORT P RIVATE L IMITED 10 ITA NO. 5710/DEL/2012 AY: 2000 - 01 (SUPRA), IT HAS DISCHARGED ITS ONUS UNDER SECTION 68 OF THE ACT AND IT IS NOT REQUIRED TO FURTHER SUBSTANTIATE THE CREDITWORTHINESS OR GENUINENESS OF THE TRANSACTION. FINDING S OF THE HON BLE HIGH COURT IN CASES CITED BY THE ASSESSEE ARE A L S O EXTRACTED AS UNDER: (A) CIT VS. PRAYAG HOSPITAL & RESEARCH (SUPRA) IN OUR CONSIDERED VIEW, RELIANCE PLACED BY THE TRIBUNAL ON THE SAID DECISION IN THE OBTAINING FACTUAL MATRIX IS TOTALLY JUSTIFIED. IN THE CASE AT HAND, THE IDENTITY OF THE CREDITORS IS KNOWN AND HENCE THE ASSESSING OFFICER CAN PROCEED AS HAS BEEN HELD IN LOVELY EXPORTS (P) LTD. (SUPRA) AGAINST SUCH CREDITORS IN ACCORDANCE WITH LAW. (B) CIT VS. J. J . JINDAL INFIN PVT. LTD.(SUPRA) KEEPING IN VIEW THE MANDATE OF LAW IN COMMISSIONER OF INCOME TAX VS. LOVELY EXPORTS (P) LTD., 216 CTR 195 (SC) AND THE CONCURRENT FINDINGS OF FACT ARRIVED AT BY THE TWO AUTHORITIES BELOW, THE SHA RE APPLICATION MONEY CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT. CONSEQUENTLY, THE PRESENT APPEAL, BEING BEREFT OF MERIT, IS DISMISSED IN LIMINE. (C) CIT VS. TDI MARKETING PVT. LTD. (SUPRA) IT WILL BE USEFUL TO CLARIFY THAT CIT VS. DIVINE LEASING AND FINANCE LTD. [2008] 299 ITR (DELHI) HAS BEEN AFFIRMED BY THE SUPREME COURT OF INDIA IN CIT VS. LOVELY EXPORTS (P) LTD., 6DTR (SC) 308. THEIR LORDSHIPS HAVE SUCCINCTLY COMMENTED THAT THERE WAS NO MERIT IN THE SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO P ROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT. 8. ALTERNATIVELY, THE AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS DISCHARGED THE ONUS OF C R E D I T W O R T H I N E S S AND GENUINENESS OF TRANSACTION ALSO, A ND THUS NO ADDITION IN TERMS OF SECTION 68 OF THE ACT, COULD BE MADE IN THE CASE OF THE ASSESSEE. AS REGARD TO FIRST ARGUMENT 11 ITA NO. 5710/DEL/2012 AY: 2000 - 01 OF THE ASSESSEE, WE MAY LIKE TO NOTE THAT I N THE CASE OF CIT VS. D IVINE L EASING AND FINANCE PRIVATE L IMITED REPORTED IN 299 ITR 268 , HON BLE DELHI HIGH COURT HAS EXAMINE D THE ISSUE OF ONUS UNDER SECTION 68 OF THE ACT IN CASE OF PUBLIC LIMITED COMPANIES VIZ - A - VIZ PRIVATE LIMITED COMPANIES. IN THE SAID CASE, THE ASSESSEE WAS A PUBLIC LIMITED COMPANY. THE CASE OF LOVELY EXPORTS (P) LT D IN ITA NO. 953/2006 WAS ALSO HEARD ALONGWITH THE CASE OF DIVINE LEASING & FINANCE LTD., HAVING ITA NO. 53/200 5, 56/2005 AND 305/2006. THE HON BLE HIGH COURT IN PARA 6 OF THE JUDGMENT REFERRED TO THE JUDGMENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VERSUS SOPHIA FINANCE LTD. ( 1994) 205 ITR 98 (DEL) (FB) AND DECISION OF THE SUPREME COURT IN THE CASE OF ORISSA CORPORATION PRIVATE LIMITED (1986) 159 ITR 78 (SC), WHEREIN IT IS OBSERVED THAT THE ASSESSEE HAD GIVEN NAMES AND ADDRESS OF THE ALLEGED CR EDITORS AND SAID CREDITORS WERE INCOME TAX ASSESSEES AND IF THE ASSESSEE COULD NOT PRODUCE THE PARTIES OR DID NOT ATTEND IN RESPONSE TO SUMMONS ISSUED UNDER SECTION 131 OF THE ACT, IN THE CIRCUMSTANCES THE ASSESSEE COULD NOT DO ANYTHING FURTHER AND TRIBUNA L CAME TO THE CONCLUSION THAT THE ASSESSEE HAS DISCHARGED THE BURDEN THAT LAY ON HIM AND HELD THAT SUCH A CONCLUSION WAS NOT UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IN SUBSEQUENT PART OF PARAGRAPH 6, THE HON BLE HIGH COURT HAS AGREED THAT ABOVE R EASONING MUST APPLY TO CASES OF LARGE SCALE SUBSCRIPTION OF SHARES OF A PUBLIC COMPANY AND MAY NOT APPLY TO THE CIRCUMSTANCES WHERE SHARES WERE ALLOTTED DIRECTLY TO THE SHARE APPLICANTS. THE RELEVANT FINDING OF THE HON BLE COURT IS REPRODUCED AS UNDER: TH IS REASONING MUST APPLY A FORTIORI TO LARGE - SCALE SUBSCRIPTIONS TO THE SHARES OF A PUBLIC COMPANY WHERE THE LATTER MAY HAVE NO MATERIAL OTHER THAN THE APPLICATION FORMS AND BANK TRANSACTION DETAILS TO GIVE SOME INDICATION OF THE IDENTITY OF THESE SUBSCRIBE RS. IT MAY NOT APPLY IN CIRCUMSTANCES WHERE THE SHARES ARE ALLOTTED DIRECTLY BY THE COMPANY/ASSESSEE OR TO CREDITORS OF THE 12 ITA NO. 5710/DEL/2012 AY: 2000 - 01 ASSESSEE. THIS IS WHY THIS COURT HAS ADOPTED A VERY STRICT APPROACH TO THE BURDEN BEING LAID ALMOST ENTIRELY ON AN ASSESSEE WHICH RE CEIVES A GIFT. 9 . THEREAFTER, IN PARAS - 7 TO 10 OF THE JUDGMENT, HON BLE HIGH COURT CONSIDERED THE DECISION OF THE HON BLE OF SUPREME COURT IN THE CASE OF SUMATI DAYAL VERSUS CIT (1995) 214 ITR 801 (SC), DECISION OF THE HON BLE DELHI HIGH COURT IN THE CA SE OF GEE VEE ENTERPRISES VERSUS ADDITIONAL CIT (1975) 99 ITR 375 (DEL) AND FULL BENCH DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF SOPHIA FINANCE (SUPRA). IN PARAGRAPH 12, THE HON BLE HIGH COURT HAS CONSIDERED THE DECISION IN THE CASE OF CIT VERSUS PRECISION FINANCE PRIVATE LIMITED (SUPRA). AFTER CONSIDERING ALL THE ABOVE DECISIONS, THE HON BLE HIGH COURT IN PARA 13, CONCLUDED AS UNDER: 13. THERE CANNOT BE TWO OPINIONS ON THE ASPECT THAT THE PERNICIOUS PRACTICE OF CONVERSION OF UNACCOUNTED MONEY TH ROUGH THE MASQUERADE OR CHANNEL OF INVESTMENT IN THE SHARE CAPITAL OF A COMPANY MUST BE FIRMLY EXCORIATED BY THE REVENUE. EQUALLY, WHERE THE PREPONDERANCE OF EVIDENCE INDICATES ABSENCE OF CULPABILITY AND COMPLEXITY OF THE ASSESSEE IT SHOULD NOT BE HARASSED BY THE REVENUE S INSISTENCE THAT IT SHOULD PROVE THE NEGATIVE. IN THE CASE OF A PUBLIC ISSUE, THE COMPANY CONCERNED CANNOT BE EXPECTED TO KNOW EVERY DETAIL PERTAINING TO THE IDENTITY AS WELL AS FINANCIAL WORTH OF EACH OF ITS SUBSCRIBERS. THE COMPANY MUST, HOWEVER, MAINTAIN AND MAKE AVAILABLE TO THE AO FOR HIS PERUSAL, ALL THE INFORMATION CONTAINED IN THE STATUTORY SHARE APPLICATION DOCUMENTS. IN THE CASE OF PRIVATE PLACEMENT THE LEGAL REGIME WOULD NOT BE THE SAME. A DELICATE BALANCE MUST BE MAINTAINED WHIL E WALKING THE TIGHTROPE OF SS. 68 AND 69 OF THE IT ACT. THE BURDEN OF PROOF CAN SELDOM BE DISCHARGED TO THE HILT BY THE ASSESSEE; IF THE AO HARBOURS DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTION HE IS EMPOWERED, NAY DUTYBOUND, TO CARRYOUT THOROUGH INVESTIGA TIONS. BUT IF THE AO FAILS TO UNEARTH ANY WRONG OR ILLEGAL DEALINGS, HE CANNOT OBDURATELY ADHERE TO HIS SUSPICIONS AND TREAT THE SUBSCRIBED CAPITAL AS THE UNDISCLOSED INCOME OF THE COMPANY. ( EMPHASIS SUPPLIED) 10 . FURTHER, AFTER CONSIDERING THE VARIOUS DECISIONS OF THE HON BLE HIGH COURTS IN PARAGRAPH 14 AND 15 OF THE JUDGMENT, THE HON BLE HIGH COURT CONSIDERED THE DECISION OF THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF HINDUSTAN TEA TRADING COMPANY LIMITED VS. C IT (2003) 263 ITR 289 (CAL), WHEREIN THE BENCH OPINED THAT IN CASE OF A SUBSCRIPTION TO SHARE CAPITAL, SECTION 68 OF THE ACT IS TO BE RESORTED, IT IS NECESSARY FOR THE 13 ITA NO. 5710/DEL/2012 AY: 2000 - 01 ASSESSEE TO PROVE AND ESTABLISH THE IDENTITY OF THE SUBSCRIBER, THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTION AND ONCE MATERIAL TO PROVE THESE INGREDIENTS ARE PRODUCED IT IS FOR THE AO TO FIND OUT AS TO WHETHER, ON THESE MATERIAL, THE ASSESSEE HAS SUCCEEDED IN ESTABLISHING THE INGREDIENTS MENTIONED ABOVE AND THE AO CAN LIFT THE VEIL ON ENQUIRY INTO THE REAL NATURE OF TRANSACTIONS. 10.1 AFTER CONSIDERING THE DECISIONS AVAILABLE IN THE CONTEXT OF SECTION 68 OF THE ACT, THE HON BLE HIGH COURT CONCLUDED IN PARA 16 OF THE JUDGMENT, THE REQUIREMENT OF SECTION 68 AS UNDER: 16. I N THIS ANALYSIS, A DISTILLATION OF THE PRECEDENTS YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN THE CONTEXT OF S. 68 OF THE IT ACT. THE ASSESSEE HAS TO PRIMA FACIE PROVE (1) THE IDENTITY OF THE CREDITOR/SUBSCRIBER; (2) THE GENUINENESS OF THE TRANSACTION, NAM ELY, WHETHER IT HAS BEEN TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER; (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONG WITH COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHARE TRANSFER REGISTER, ETC. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSEE; (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/SUBSCRIBER FAILS OR NEGLECTS TO RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR/SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE NOR SHOULD THE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT, WITHOUT MORE, AGAINST THE ASSESSEE; (7) THE AO IS DUTYBOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE CREDITOR/ SUBSCRIBER, THE GENUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIATION. 10.2 THE HON B LE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTERS REPORTED IN 342 ITR 169 (DELHI) HAS CONSIDERED THE DECISION OF HON BLE SUPREME C OURT IN THE CASE OF LOVELY EXPORTS (P) LTD. (SUPRA) AND OBSERVED THAT THE RATIO OF A DECISION IS TO BE UNDERSTOOD AND APPRECIATED IN THE FACTS OF THE CASE . S O UNDERSTOOD, IT WILL BE SEEN THAT WHERE COMPLETE PARTICULARS OF THE SHARE APPLICANTS IN RESPECT OF THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS ARE FURNISHED TO THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAD NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW THAT 14 ITA NO. 5710/DEL/2012 AY: 2000 - 01 THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY U/S 68 OF THE ACT AND THE REMEDY OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE WITH LAW. THE RELEVANT PART OF THE DECISION IS REPRODUCED AS UNDER: 35. THE FACTS OF LOVELY EXPORTS P. LTD., AS NOTED BY THIS COURT, ARE THESE. THE ASSESSEE - COMPANY IN THAT CASE HAD FURNISHED THE NECESSARY D ETAILS SUCH AS PAN NO./INCOME TAX WARD NO./RATION CARD OF THE SHARE APPLICANTS AND SOME OF THEM WERE ASSESSED TO TAX. THE MONIES WERE RECEIVED THROUGH BANKING CHANNELS. IN SOME CASE, AFFIDAVITS/CONFIRMATIONS OF THE SHARE APPLICANTS CONTAINING THE ABOVE INF ORMATION WERE FILED. THE ASSESSING OFFICER DID NOT CARRY OUT ANY INQUIRY INTO THE INCOME TAX RECORDS OF THE PERSONS WHO HAD GIVEN THEIR FILE NUMBERS IN ORDER TO ASCERTAIN WHETHER THEY WERE EXISTENT OR NOT. HE NEITHER CONTROVERTED NOR DISAPPROVED THE MATERIAL FILED BY THE ASSESSEE. FURTHER, THE ASSESSEE HAD SPECIFICALLY INVITED THE ASSESSING OFFICER TO CARRY OUT AN ENQUIRY AND EXAMINE THE ASSESSMENT RECORDS OF THE SHARE APPLICANTS WHOSE INCOME TAX FILE NUMBERS WERE GIVEN. THOUGH TH E ASSESSING OFFICER HAD SUFFICIENT TIME TO CARRY OUT THE EXAMINATION, HE DID NOT DO SO, BUT PUT FORTH AN EXCUSE THAT THE ASSESSEE WAS TAKING SEVERAL ADJOURNMENTS. THIS COURT OBSERVED THAT IT IS FOR THE ASSESSING OFFICER TO MANAGE HIS SCHEDULE AND HE SHOULD HAVE ENSURED THAT BECAUSE OF THE ADJOURNMENTS HE DID NOT RUN OUT OF TIME FOR DISCHARGING THE DUTIES CAST ON HIM BY LAW. IT WAS HELD THAT WHEN DETAILS WERE FURNISHED BY THE ASSESSEE, THE BURDEN SHIFTED TO THE ASSESSING OFFICER TO INVESTIGATE INTO THE CREDI TWORTHINESS OF THE SHARE APPLICANTS WHICH HE WAS UNABLE TO DISCHARGE. THUS, THE ORDER OF THE TRIBUNAL DELETING THE ADDITION WAS HELD NOT GIVING RISE TO ANY QUESTION OF LAW, MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW. 36. IT IS NOT ONLY RELEVANT TO NOTE THE ABOVE FACTS, WHICH DISTINGUISH THOSE THREE CASES (SUPRA) FROM THE CASE BEFORE US, BUT IT IS ALSO RELEVANT TO NOTE THE FOLLOWING OBSERVATIONS MADE BY THIS COURT IN THE ABOVE THREE CASES: 'THERE CANNOT BE TWO OPINIONS ON THE ASPECT THAT THE PERNICIOUS PRACTI CE OF CONVERSION OF UNACCOUNTED MONEY THROUGH THE MASQUERADE OR CHANNEL OF INVESTMENT IN THE SHARE CAPITAL OF A COMPANY MUST BE FIRMLY EXCORIATED BY THE REVENUE. EQUALLY, WHERE THE PREPONDERANCE OF EVIDENCE INDICATES ABSENCE OF CULPABILITY AND COMPLEXITY O F THE ASSESSED IT SHOULD NOT BE HARASSED BY THE REVENUES INSISTENCE THAT IT SHOULD PROVE THE NEGATIVE. IN THE CASE OF A PUBLIC ISSUE, THE COMPANY CONCERNED CANNOT BE EXPECTED TO KNOW EVERY DETAIL PERTAINING TO THE IDENTITY AS WELL AS FINANCIAL WORTH OF EAC H OF ITS SUBSCRIBERS. THE COMPANY MUST, HOWEVER, MAINTAIN AND MAKE AVAILABLE TO THE AO FOR HIS PERUSAL, ALL THE INFORMATION CONTAINED IN THE STATUTORY SHARE APPLICATION DOCUMENTS. IN THE CASE OF PRIVATE PLACEMENT THE LEGAL REGIME WOULD NOT BE THE SAME. A D ELICATE BALANCE MUST BE MAINTAINED WHILE WALKING THE TIGHTROPE OF SECTIONS 68 AND 69 OF THE IT ACT. THE BURDEN OF PROOF CAN SELDOM BE DISCHARGED TO THE HIL T BY THE ASSESSED; IF THE AO HARBOURS DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTION HE IS EMPOWERED, NAY 15 ITA NO. 5710/DEL/2012 AY: 2000 - 01 DUTY BOUND, TO CARRYOUT THOROUGH INVESTIGATIONS. BUT IF THE AO FAILS TO UNEARTH ANY WRONG OR ILLEGAL DEALINGS, HE CANNOT OBDURATELY ADHERE TO HIS SUSPIC IONS AND TREAT THE SUBSCRIBED CAPITAL AS THE UNDISCLOSED INCOME OF THE COMPANY.' WE MAY ALSO NOTE THAT A REFERENCE WAS MADE BY THIS COURT TO SEVERAL AUTHORITIES, INCLUDING AT LEAST SEVEN JUDGMENTS OF THIS COURT ON THE QUESTION OF APPLICABILITY OF SECTION 68 TO SHARE APPLICATION MONIES, AND THE POSITION WAS PITHILY SUMMED UP AS FOLLOWS AT PAGE 282 (OF 299 ITR): 'IN THIS ANALYSIS, A DISTILLATION OF THE PRECEDENTS YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN TH E CONTEXT OF SECTION 68 OF THE IT ACT. THE ASSESSED HAS TO PRIMA FACIE PROVE (1) THE IDENTITY OF THE CREDITOR/SUBSCRIBER; (2) THE GENUINENESS OF THE TRANSACTION, NAMELY, WHETHER IT HAS BEEN TRANSMITTED THR OUGH BANKING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER. (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONG WITH COPIES OF T HE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHARE TRANSFER REGISTER ETC. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSED. (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDI TOR/SUBSCRIBER FAILS OR NEGLECTS TO RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR/SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSED NOR SHOULD THE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT , WITHOUT MORE, AGAINST THE ASSESSED. (7) THE ASSESSING OFFICER IS DUTY - BOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE CREDITOR/SUBSCRIBER THE GENUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIATION.' 37. THE JUDGMENT OF THIS COURT IN THE ABOV E THREE CASES WAS CARRIED IN APPEAL TO THE SUPREME COURT BY THE REVENUE WHICH FILED SLP NO.11993/2007. THE PETITION FOR LEAVE TO APPEAL WAS DISMISSED BY THE SUPREME COURT OBSERVING AS BELOW: - 'DELAY CONDONED. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS U NDISCLOSED INCOME UNDER S.68 OF IT ACT , 1961? WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGU S SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT. SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS D ISMISSED.' 38. THE RATIO OF A DECISION IS TO BE UNDERSTOOD AND APPRECIATED IN THE BACKGROUND OF THE FACTS OF THAT CASE. SO UNDERSTOOD, IT WILL BE SEEN THAT WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICANTS SUCH AS THEIR NAMES AND ADDRESSES, INCOME TAX FILE NUMBE RS, THEIR CREDITWORTHINESS, SHARE APPLICATION FORMS AND SHARE HOLDERS' REGISTER, SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CAN BE MADE IN 16 ITA NO. 5710/DEL/2012 AY: 2000 - 01 THE HANDS OF THE COMPANY UNDER SEC.68 AND THE REMEDY OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE WITH LAW. WE ARE AFRAID THAT WE CA NNOT APPLY THE RATIO TO A CASE, SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHES THE PARTICULARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF - CONFESSED 'ACCOMMODATION EN TRY PROVIDERS', WHOSE BUSINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT THEIR UNACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION, AND THE ASSESSEE. THE RATIO IS INAPPLICABLE TO A CASE, AGAIN SUCH AS THE PRESENT ONE, WHERE THE INVO LVEMENT OF THE ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDICATED BY VALID MATERIAL MADE AVAILABLE TO THE ASSESSING OFFICER AS A RESULT OF INVESTIGATIONS CARRIED OUT BY THE REVENUE AUTHORITIES INTO THE ACTIVITIES OF SUCH 'ENTRY PROVIDERS'. THE EXISTENCE WITH THE ASSESSING OFFICER OF MATERIAL SHOWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE - MEDITATED PLAN - A SMOKESCREEN - CONCEIVED AND EXECUTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABILITY OF THE RATIO. I N OUR UNDERSTANDING, THE RATIO IS ATTRACTED TO A CASE WHERE IT IS A SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON HIM UNDER SEC.68 TO PROVE AND ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GENUI NENESS OF THE TRANSACTION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COME FORWARD TO MERELY REJECT THE SAME, WITHOUT CARRYING OUT ANY VERIFICAT ION OR ENQUIRY INTO THE MATERIAL PLACED BEFORE HIM. THE CASE BEFORE US DOES NOT FALL UNDER THIS CATEGORY AND IT WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY. 11 . IN THE PRESENT CASE, ONLY ONE PERSON PROVIDED PAN AND HE ALSO NOT FILED RETURN OF INCOME OF RELEVANT PERIOD AND EVIDENCE OF CREDITWORTHINESS HAVE NOT BEEN FIL E D IN CASE OF MOST OF THE PERSONS. THUS, THE RATIO OF THE DECISION IN THE CASE OF M/S. LOVELY EXPORTS (P) L TD. CANNOT BE APPLIED. IN VIEW OF ABOVE POSITION OF T HE LAW, THE DECISION CITED BY THE LD. COUNSEL TO SUPPORT ITS CONTENTION , ARE NOT APPLICABLE OVER THE FACTS OF THE INSTANT CASE, WHICH IS A PRIVATE LIMITED COMPANY AND INVESTMENT HAS BEEN SHOWN TO BE MADE FROM RELATIVES AND FRIENDS OF THE PROMOTERS OF THE AS SESSEE COMPANY AND IN SUCH A CASE THE STANDARD OF A PUBLIC LIMITED COMPANY WHERE LARGE - SCALE SUBSCRIPTION TO THE SHARES OF THE COMPANY ARE MADE BY THE PUBLIC, CANNOT BE APPLIED. 1 2 . IN THE PRESENT CASE, IRRESPECTIVE OF THE FACT WHETHER THE MONEY INVESTED IN THE COMPANY WAS SHARE APPLICATION MONEY OR LOAN , THE ASSESSEE IS REQUIRED TO PROVE AND ESTABLISH, THE IDENTITY OF THE PERSONS 17 ITA NO. 5710/DEL/2012 AY: 2000 - 01 INVESTED, THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTION AND ONCE THE MATERIAL TO PROVE THESE INGREDIENTS ARE PRODUCED BEFORE THE ASSESSING OFFICER, IT IS FOR THE ASSESSING OFFICER TO FIND OUT WHETHER ON THAT MATERIAL THE ASSESSEE SUCCEEDED IN ESTABLISHING THE INGREDIENTS MENTIONED ABOVE. IN THE LIGHT OF THE DISCUSSION, WE ARE EXAMINING NO W THE ALTERNATE ARGUMENT OF THE LEARNED COUNSEL THAT THE ASSESSEE HAS DISCHARGED ITS ONUS OF CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. 13 . WE F IND THAT THE LD. COMMISSIONER OF INCOME - TAX ( APPEALS) HAS SUMMARIZED THE COMMENTS OF THE ASSESSING OFFICER IN RESPECT OF THE PERSONS AS UNDER: IN ALL, ONLY 19 PERSONS WERE PRODUCED BY THE ASSESSEE. IN TWO CASES, THE DEATH CERTIFICATE WAS SUBMITTED. THE STATEMENT GIVEN BY ALL THE PERSONS WERE MORE OR LESS THE SAME. THEY WERE NOT AWARE ABOUT THE DIVIDEND ETC. TO BE RECEIVED OR WHAT IS DIVIDEND. THEY SIMPLY STATED THAT THEY HAVE RECEIVED SHARE CERTIFICATES AND NOT AWARE ABOUT THE BENEFITS OF THE SHARES. NO LETTER WAS RECEIVED BY THEM FOR ANY MEETING ETC. MOST OF THE PERSONS WERE CLOSE RELATIVES OF THE ASSESSEE AND DID NOT HAVE CREDITWORTHINESS TO EXTEND THE SHARE CAPITAL. NONE OF THE THEM WERE REGULAR SHARE INVESTORS, THEY HAD NOT INVESTED IN ANY OTHER COMPA NY OTHER THAN THIS. THERE WAS CHANGE IN THE STATEMENT OF PERSONS WHOSE STATEMENT HAD BEEN RECORDED EARLIER. EARLIER THEY HAD DENIED HAVING RECEIVED ANY SHARE CERTIFICATES. IT WAS CLEAR THAT THE PERSONS WERE TUTORED. THE APPELLANT FAILED TO PRODUCE ALL THE PERSONS IN SPITE OF SPECIFIC DIRECTIONS OF THE HON BLE INCOME TAX APPELLATE TRIBUNAL. 18 ITA NO. 5710/DEL/2012 AY: 2000 - 01 IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER EXPLAINED THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF INVESTMENT IN IVPS WORTH RS.9,00,000/ - WHICH WER E FOUND DURING THE COURSE OF SEARCH BY CBI AT THE RESIDENCE OF SH. R.P. SINGH. THE APPELLANT HAD INTRODUCED SHARE APPLICATION MONEY IN THE NAME OF BOGUS SHAREHOLDERS TO SHOW AVAILABILITY OF FUNDS OF INVESTMENT IN IVPS. 14 . THE LD. COMMISSIONER OF INCOME - TAX ( APPEALS), FINALLY CONCLUDED THAT THE ASSESSEE FAILED TO DISCHARGE THE PRIMARY ONUS OF PROVIDING THE CAPACITY TO MAKE INVESTMENT IN THE SHARE APPLICATION MONEY AND TO PROVE THE GENUINENESS OF THE TRANSACTION. 15 . ON PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES AND DOCUMENTARY EVIDENCES FILED BEFORE US BY THE ASSESSEE , WE FIND THAT OUT OF 29 PERSONS , THE ASSESSEE HAS PRODUCED 19 PERSONS BEFORE THE ASSESSING OFFICER IN COMPLIANCE TO THE DIRECTION OF THE TRIBUNAL. IN RESPECT OF OTHER PERSONS, THE ASSESS EE HAS SUBMITTED BEFORE US COPY OF LETTER S FILED BEFORE THE ASSESSING OFFICER, REQUESTING TO ISSUE SUMMONS TO THOSE PERSONS. THE EVIDENCE S FILED BY THE ASSESSEE BEFORE US IN RESPECT OF THE PERSON S AND OUR OBSERVATION IN RESPECT OF THOSE EVIDENCES ARE SUMMA RIZED AS UNDER: (I) SH. NANU SINGH (RS. 40,000/ - ): T HE ASSESSEE HAS SUBMITTED A COPY OF STATEMENT ON OATH DATED 16/12/2010, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE , RATION CARD BEFORE US, WHICH ARE AVAILABLE ON PAGE S 10 TO 17 OF THE ASSESSE E S PAPER BOOK. ON PERUSAL OF THE RATION CARD, WE FIND THAT NAME OF THE ASSESSEE IS APPEARING AS HEAD OF THE FAMILY, WHICH CONFIRMS THE IDENTITY OF THE ASS ESSEE. HIS FAMILY CONSIST S OF FOUR MAJOR MEMBER S AND ONE MINOR MEMBER. HOWEVER, ON PERUSAL OF THE RATIO N CARD , ON PAGE 16 OF THE PAPER BOOK , WE FIND THAT ANNUAL INCOME OF SH. NANU SINGH 19 ITA NO. 5710/DEL/2012 AY: 2000 - 01 HAS BEEN MENTIONED AS RS. 2000 PER ANNUM. IN OUR OPINION, THIS DOCUMENTARY EVIDENCE CANNOT ESTABLISH CREDITWORTHINESS OF THE PERSON TO MAKE INVESTMENT OF RS. 40,000 IN THE A SSESSEE COMPANY. FURTHER IN THE COPY OF AFFIDAVIT, WHICH IS AVAILABLE ON PAGE 13 OF THE PAPER BOOK, THE PERSON HAS DEPOSED THAT HE PAID CASH OF RS. 40,000 FOR ALLOTMENT OF SHARES, HE HAD AGRICULTURE INCOME, HE INVESTED FOR GETTING GOOD RETURN AS DIVIDEND, HE KNEW THIS THE GROUP OF CONTACTORS ( I.E. THE ASSESSEE COMPANY AND ITS PROMOTERS) AND HE WAS NOT INCOME TAX ASSESSEE AS HIS INCOME WAS NOT TAXABLE. WE FIND THAT CONTENTS OF THE AFFIDAVIT ARE ALMOST IDENTICAL TO THE CONTENTS OF THE AFFIDAVIT FILED BY OTH ER PERSON . IN THE STATEMENT RECORDED ON 16/12/2010, THE PERSON STATED THAT HE WAS WORKING AS A TEACHER AND RETIRED IN THE YEAR 2006 AND SINCE RETIREMENT HE WAS NOT FILING A TAX RETURN, BUT NO COPY OF RETURN OF INCOME FOR RELEVANT PERIOD WAS FILED EITHER BE FORE THE LOWER AUTHORITIES OR BEFORE US . HE ALSO STATED THAT BESIDES HIS JOB AS A TEACHER, HE OWNED 40 BIGHAS OF LAND AND GREW WHEAT , SUGARCANE ETC. AND SAID SUM OF RS. 40,000 WAS INVESTED OUT OF SALE OF CROPS, BUT NO EVIDENCE IN SUPPORT OF AGRICULTURE LAN D HOLDING OR SALE OF CROPS WAS SUBMITTED EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE US. THE PERSON STATED OF HAVING MADE INVESTMENT IN SHARE APPLICATION OF THE ASSESSEE COMPANY ONLY , HOWEVER WAS NOT AWARE ABOUT THE PROFITABILITY OF THE ASSESSEE COMPANY AND ON BEING ASKED BY THE ASSESSING OFFICER WHETHER HE RECEIVED ANY PROFIT FROM THE COMPANY, THE PERSON REPLIED THAT HE RECEIVED MONEY SOMETIMES ON MARRIAGE ETC KIND OF OCCASIONS. . (II) SH . VIJAY VEER SINGH ( RS. 40 ,000/ - ): T HE ASSESSEE SUBMITTED A COPY OF STATEMENTS RECORDED ON 26/02/2004 AND 16/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE 20 ITA NO. 5710/DEL/2012 AY: 2000 - 01 CERTIFICATE, VOTER IDENTITY CARD AND PROOF OF AGRICULTURE LAND HOLDIN G, WHICH ARE AVAILABLE ON PAGE 18 TO 30 OF THE PAPER BOOK. WE FIND THAT THE PERSON HAS SUBMITTED A COPY OF THE VOTER IDENTITY CARD ISSUED BY THE ELECTION COMMISSION OF INDIA AND HE HIMSELF ATTENDED BEFORE THE LD. ASSESSING O FFICER AND THUS IDENTITY OF THE PERSON IS NOT IN DOUBT. IN RESPECT OF CREDITWORTHINESS, THE PERSON STATED SOURCE OF INCOME AS AGRICULTURE INCOME . IN HIS STATEMENT DATED 16/12/2010 THE PERSON STATED AGRICULTURE LAND HOLDING OF EIGHT ACRES. IN T HE STATEMENT DATED 26/02/2004 , THE PERSON STA TED OF HAVING PAID RS. 30,000 IN CASH TO THE ASSESSEE COMPANY , OUT OF SALE OF SUGARCANE CROP, HOWEVER NO EVIDENCE IN SUPPORT OF THE SALE WAS SUBMITTED BEFORE THE ASSESSING OFFICER OR BEFORE US. THE ASSESSEE HAS PRODUCED EVIDENCE IN SUPPORT OF AGRICULTURE L AND HOLDING OF THE SHARE APPLICANT FROM PAGE 27 TO 29 OF THE PAPER BOOK. IN THE S TATEMENT RECORDED ON 26/02/2004 , THE PERSON DECLINED TO HAVE RECEIVED THE SHARES HOWEVER IN HIS STATEMENT DATED 16/12/2010, HE STATED THAT HE RECEIVED 3000 SHARES . IN THE AFFI DAVIT AS WELL AS IN THE STATEMENT, THE PERSON STATED THAT THE MONEY WAS INVESTED FOR GETTING PROFIT IN THE FORM OF DIVIDEND, HOWEVER FOR THE LAST 10 YEARS HE DID NOT RECEIVE ANY PROFIT FROM THE COMPANY. IN OUR OPINION, NO GENUINE INVESTOR WILL KEEP HIS INV ESTMENT WITH ANY PERSON WITHOUT ANY RETURN FOR SUCH A LONG PERIOD. THE PERSON WAS ALSO NOT AWARE OF THE FACT THAT THE COMPANY WAS IN CONTINUES LOSSES. THE CONTENT OF THE AFFIDAVIT OF THE PERSON IS IDENTICAL TO THE CONTENTS OF AFFIDAVIT S GIVEN BY OTHER PERSON S . (III) SH. KARAMPAL SINGH ( RS. 50,000/ - ) : T HE ASSESSEE HAS FILED A COPY OF STATEMENT DATED 16/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTER OF SHARE CERTIFICATE AND VOTER IDENTITY CARD, 21 ITA NO. 5710/DEL/2012 AY: 2000 - 01 WHICH ARE AVAILABLE ON PAGE 31 TO 37 OF THE PAP ER BOOK. THE PERSON IN THE STATEMENT RECORDED ON 16/12/2010, WHICH IS AVAILABLE ON PAGE 31 TO 33 OF THE PAPER BOOK, STATED HIS SOURCE OF INCOME AS AGRICULTURE INCOME AND NOT FILED RETURN OF INCOME. NO EVIDENCE IN SUPPORT OF LAND HOLDING WAS FILED. THE IMME DIATE SOURCE OF INVESTMENT OF RS. 50,000 WAS EXPLAINED AS SALE OF SUGARCANE, RICE AND WHEAT CROPS HOWEVER NO EVIDENCE IN SUPPORT OF SUCH SALE WAS FILED EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE US. THE PERSON ADMITTED THAT NO PROFIT WAS RECEIVED FROM THE COMPANY EXCEPT RECEIPT OF SHARES. IT IS VERY UNUSUAL THAT INVESTOR HAS KEPT INVESTMENT IN THE COMPANY ALTHOUGH NO PROFIT OR DIVIDEND HAS BEEN RECEIVED FROM THE COMPANY FOR LAST 10 YEARS. IN NORMAL CIRCUMSTANCES NO INVESTOR WILL KEEP HIS MONEY IN THE COMPANY FOR SUCH A LONG PERIOD WITHOUT ANY RETURN. THE CONTENT OF AFFIDAVITS SUBMITTED BY THE PERSON ARE IDENTICAL TO THE AFFIDAVITS OF OTHER PERSONS , WHO HAS SHOWN THEIR INCOME AS AGRICULTURE INCOME. (IV) SH GUR U PRASA D SINGH (RS. 35,000/ - ): T HE ASSESSEE HAS FILED A COPY OF STATEMENT DATED 16/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTER OF SHARE CERTIFICATE AND VOTER IDENTITY CARD, WHICH ARE AVAILABLE ON PAGE 38 TO 44 OF THE PAPER BOOK. IN THE STATEM ENT RECORDED, WHICH ARE AVAILABLE ON PAGE 38 TO 40 OF THE PAPER BOOK, THE PERSON STATED THAT HE RETIRED AS JCO FROM RAJPUTANA RIFLES AND HIS SOURCE OF INCOME W AS PENSION BUT NO EVIDENCE IN SUPPORT THEREOF WAS FILED. IN THE AFFIDAVIT FILED , HE HAS SHOWN SO URCE OF INCOME FROM AGRICULTURE BUT NO EVIDENCE IN SUPPORT OF LAND HOLDING OR SALE OF CROPS WAS FILED . THE PERSON ADMITTED THAT HE WAS NOT MAKING INVESTMENT IN COMPANIES AND ONLY INVESTED IN THE ASSESSEE COMPANY. THE PERSON ALSO ADMITTED THAT THOUGH THE I NVESTMENT WAS MADE FOR PROFIT HOWEVER NO BENEFIT OR 22 ITA NO. 5710/DEL/2012 AY: 2000 - 01 DIVIDEND WAS RECEIVED BY HIM. IN OUR OPINION, PERSON IN NORMAL CIRCUMSTANCES, WILL KEEP HIS MONEY INVESTED FOR A PERIOD OF 10 YEARS WITHOUT ANY RETURN. (V) SH.YOGRAJ SINGH (RS. 45,000/ - ): T HE ASSESSEE HAS FILED A COPY OF HIS STATEMENTS DATED 26/02/2004 AND 16/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE, VOTER IDENTITY CARD AND PR OOF OF AGRICULTURE LAND HOLDING, WHICH ARE AVAILABLE ON PAGE 45 TO 5 5 OF THE PAPER BOOK. THE PERSON STATED HIS INCOME FROM AGRICULTURE AND IMMEDIATE SOURCE OF INVESTMENT IN THE COMPANY WAS EXPLAINED AS MONEY RECEIVED ON SALE OF SUGARCANE AND MUSTARD, HOWEVER NO EVIDENCE IN SUPPORT OF SUCH SALE WAS FILED. HE ALSO STATED OF INVESTMENT MADE IN SHARES OF MAHINDRA AND MAHINDRA AND MUTUAL FUND IN THE YEAR 2010. THE CONTENTS OF THE AFFIDAVIT FILED BY THE PERSON ARE IDENTICAL WITH THE AFFIDAVIT OF OTHER PERSONS HAVING AGRICULTURE INCOME. THE PERSON SAID THAT HE DID NOT KNOW WHAT IS MEAN BY THE SHARE APPLICATION MONEY . H E SAID THAT RS. 45,000 WAS INVESTED FOR PROFIT HOWEVER NO PROFIT WAS RECEIVED EXCEPT 4500 SHARES. (VI) SH. MAN GE RAM DABAS (RS. 50,000/ - ) : T HE ASSESSEE HAS SUBMITTED A COPY OF THE STATEMENT DATED 16/12/2010, CONFIRMA TORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND VOTER IDENTITY CARD , WHICH ARE AVAILABLE ON PAGE 56 TO 62 OF THE PAPER BOOK. THE PERSON STATED OF HAVING PAID RS. 50,000/ - IN CASH TO THE ASSESSEE COMPANY. IN THE AFFIDAVIT, THE PERSON STATED THAT HIS INCOME IS FROM SALARY BUT HE HAS NOT GIVEN ANY DETAIL OF THE AMOUNT OF SALARY AND WHETHER HE WAS ASSESSED TO INCOME TAX. THE PERSON STATED THAT HE INVESTS IN PRIVATE COMPANIES BUT DETAIL OF INVESTMENT OTHER THAN ASSESSEE COMPANY WAS NOT GIVEN. THE ASSESSEE HAS NOT FILED ANY EVIDENCE IN SUPPORT OF CREDITWORTHINESS 23 ITA NO. 5710/DEL/2012 AY: 2000 - 01 OF THE PERSON . THE PERSON ALSO ADMITTED THAT HE DID NOT RECEIVE ANY DIVIDEND SO FAR, THOUGH THE INVESTMENT WAS MADE FOR GETTING DIVIDEND. IN OUR OPINION, IN NORMAL CIRCUMSTAN CES , NO INVESTOR WILL KEEP HIS MONEY IN THE COMPANY FOR SUCH A LONG PERIOD WITHOUT RECEIVING ANY RETURN ON THE MONEY INVESTED . THE CONTENTS OF THE AFFIDAVIT SUBMITTED BY THE PERSON ARE IDENTICAL TO THE AFFIDAVITS FILED BY OTHER PERSONS . (VII) SH KRIS HAN PAL GEH LOT (RS. 40,000/ - ): T HE ASSESSEE HAS FILED A COPY OF STATEMENT DATED 16/12/2000, COPY OF CONFIRMATORY AFFIDAVIT, COPY OF SHARE APPLICATION FORM, COPY OF COUNTERFOIL OF SHARE CERTIFICATE AND COPY OF DRIVING LICENSE, WHICH ARE AVAILABLE ON PAGE 63 TO 69 OF T HE PAPER BOOK. THE PERSON STATED OF HAVING PAID RS. 40,000 IN CASH TO THE COMPANY OUT OF SALE OF CROPS. THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE IN SUPPORT OF THE SOURCE OF INCOME OF THE PERSON . THE PERSON ADMITTED THAT HE HAD NOT MADE INVESTMENT IN ANY COMPANY OTHER THAN THE ASSESSEE. THE PERSON ALSO ADMITTED THAT THE INVESTMENT WAS MADE FOR GETTING PROFIT, HOWEVER NO PROFIT WAS RECEIVED EXCEPT ONE LETTER FOR INVESTMENT OF 4000 SHARES. THE PERSON WAS ALSO NOT AWARE WITH A TERM SHARE APPLICATION MONEY . THE CONTENT S OF AFFIDAVIT OF THE PERSON FILED ARE IDENTICAL WITH THE AFFIDAVIT OF OTHER PERSONS . THE ASSESSEE HAS NOT FILED ANY CREDIBLE EVIDENCE IN SUPPORT OF CREDITWORTHINESS OF THE PERSON AND GENUINENESS OF THE TRANSACTION. (VIII) SH K ARMVEER SINGH ( RS. 35,000/ - ): T HE ASSESSEE HAS FILED A COPY OF STATEMENT DATED 16/12/2010, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE, WHICH ARE AVAILABLE ON PAGE 70 TO 74 OF THE PAPER BOOK. THE PERSON STATED OF GIVING RS. 35,000 IN CASH IN THE YEAR 1999 TO THE ASSESSEE COMPANY OUT OF SALE OF THE CROPS. THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE IN SUPPORT OF THE 24 ITA NO. 5710/DEL/2012 AY: 2000 - 01 AGRICULTURE LAND HOLDING OR IMMEDIATE SOURCE OF SALE OF CROPS BY THE PERSON . THE PERSON ADMITTED THA T HE HAD NOT MADE ANY INVESTMENT IN COMPANIES OTHER THAN THE ASSESSEE COMPANY. THE PERSON ALSO ADMITTED THAT HE DID NOT RECEIVE ANY PROFIT FROM THE COMPANY NOR ANY LETTER FOR MEETING OF THE COMPANY. IN OUR OPINION, I N NORMAL CIRCUMSTANCES, NO PRUDENT PERSO N WILL KEEP INVESTMENT IN THE COMPANY FOR A PERIOD OF 10 YEARS WITHOUT ANY RETURN ON THE INVESTMENT. (IX) SH CHANDER SAIN ( RS. 30,000/ - ) : T HE ASSESSEE HAS FILED A COPY OF STATEMENT DATED 20/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND VOTER IDENTITY CARD, WHICH ARE AVAILABLE ON PAGE 75 TO 81 OF THE PAPER BOOK. IN THE STATEMENT RECORDED THE PERSON STATED HIS INCOME A S RS. 45,000 PER ANNUM FROM AGRICULTURE AND ANIMAL HUSBANDRY IN THE YEAR 1999. THE PERSON ADMITTED THAT HE HAD NOT INVESTED IN COMPANIES AND HE ONLY PAID TO RS. 30,000 IN CASH TO THE ASSESSEE COMPANY OUT OF HIS AGRICULTURE INCOME. HE ACCEPTED THAT HE DID NOT RECEIVE ANY PROFIT FROM THE INVESTMENT IN THE ASSESSEE COMPANY. THE ASSESSING OFFICER ASKED WHETHER THE COMPANY WAS IN CONTINUED LOSS SINCE 1999 - 2000, THE PERSON REPLIED THAT THE COMPANY WAS GOING IN PROFIT AND HE WOULD GET THE PROFIT WHENEVER ACCOUNTS WOULD BE SETTLED. HE ADMITTED THAT THOUGH THE MONEY WAS INVESTED FOR PROFIT BUT NO PROFIT WAS RECEIVED. THE CONTENTS OF AFFIDAVIT OF THE PERSON FILED BY THE ASSESSEE COMPANY ARE IDENTICAL WITH THE CONTENTS OF THE AFFIDAVITS OF OTHER PERSONS FILED BY THE ASSESSEE COMPANY. (X) SH . ASHOK KUMAR S/O GAJRAJ SINGH( RS. 30,000/ - ) : T HE ASSESSEE HAS FILED A COPY OF STATEMENT DATED 20/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND 25 ITA NO. 5710/DEL/2012 AY: 2000 - 01 VOTER IDENTITY CARD, WHICH ARE AVAILABLE ON PAGE 82 TO 88 OF THE PAPER BOOK . IN THE STATEMENT RECORDED, THE PERSON STATED THAT HE WAS AN AGRICULTURIST AND OWNED 50 - 55 BIGHAS OF LAND . HE FURTHER STATED THAT HE PAID RS. 30,000 / - IN CASH OUT OF AGRICULTURE INCOME BUT NO EVIDENCE IN SUPPORT OF EITHER AGRICULTURE LAND HOLDING OR SALE OF CROPS WAS FILED . THE PERSON ADMITTED THE HE H AD NOT INV ESTED IN ANY COMPANY OTHER THAN THE ASSESSEE COMPANY. HE ALSO ADMITTED THAT NO PROFIT WAS RECEIVED FROM THE INVESTMENT IN SHARE APPLICATION MONEY. (XI) SH. KRISHAN KUMAR ( RS. 1,00,000/ - ) : T HE ASSESSEE HAS FILED A COPY OF STATEMENT DATED 20/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE , VOTE R IDENTITY CARD AND PAN CARD , WHICH ARE AVAILABLE ON PAGE 89 TO 96 OF THE PAPER BOOK. IN THE STATEMENT RECORDED, SH KRISHAN KUMAR STATED OF HAVING PAID RS. 1,00,000/ - IN CASH TO THE ASSESSEE COMPANY. HE FURTHER STATED HIS SOURCE OF INCOME AS SALARY FOR LAST SIX YEARS AND HE ADMITTED OF FILING INCOME TAX RETURN FOR LAST FOUR YEARS. IN RESPECT OF SOURCE OF INVESTMENT OF RS. 1 LAKH , HE EXPLAINED THAT HE WAS IN EMPLOYMENT S INCE 1987 AND THE MONEY INVESTED WAS ACCUMULATED OUT OF THE INCOME EARNED FROM EMPLOYMENT. BUT IN SUPPORT OF THESE CLAIM S , NO DOCUMENTARY EVIDENCE WAS FILED BY SH. KRISHAN KUMAR. THE ASSESSEE HAS ALSO NOT FILED ANY DOCUMENT IN SUPPORT OF CREDITWORTHINESS OF SH. KRISHNA KUMAR. HE STATED THAT HE WAS INVESTING IN COMPANIES SINCE 1997 BUT HE DID NOT SUBMIT NAMES OF THE COMPANIES IN WHICH HE INVESTED. HE STATED THAT INVESTMENT IN THE COMPANY WAS MADE FOR BECOMING PARTNER, HOWEVER HE DID NOT EXPLAIN WHETHER THE COMPANY WAS IN PROFIT OR LOSS AND HE ALSO ADMITTED THAT NO PROFIT WAS RECEIVED FROM THE COMPANY. HE ALSO 26 ITA NO. 5710/DEL/2012 AY: 2000 - 01 ADMITTED THAT NO INFORMATION WAS RECEIVED FROM THE COMPANY IN RESPECT OF THE MEETINGS OF THE COMPANY. (XII) SH. ASHOK KUMAR SON OF JAIPAL SINGH( RS. 40,000/ - ) : T HE ASSESSEE HAS FILED A COPY OF STATEMENT DATED 20/12/2010, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIF ICATE , AND VOTER IDENTITY CARD, WHICH ARE AVAILABLE ON PAGE 97 TO 102 OF THE PAPER BOOK. SH. ASH OK KUMAR ADMITTED OF GIVING RS .40,000/ - IN CASH TO THE ASSESSEE COMPANY OUT OF THE AGRICULTURE INCOME. IN THE STATEMENT , HE STATED OF HAVING 10 - 12 ACRES OF AGRICULTURE LAND, HOWEVER NO DOCUMENTARY EVIDENCE IN SUPPORT OF AGRICULTURE HOLDING WAS FILED EITHER BY SH. ASHOK KUM AR OR BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. NO SUCH EVIDENCE WAS ALSO FILED BEFORE US. SH. SURESH KUMAR ADMITTED THAT HE WAS NOT AWARE ABOUT THE SHARES INVESTMENTS AND MONEY WAS INVESTED FOR THE FIRST TIME IN THE ASSESSEE COMPANY. HE STATED THAT HE WAS NOT AWARE ABOUT THE SHARE APPLICATION MONEY. ON BEING ASKED BY THE ASSESSING OFFICER ABOUT RECEIPT OF ANY PROFIT OR DIVIDEND FROM THE ASSESSEE COMPANY, SH. ASHOK KU MAR STATED THAT HE RECEIVED RS. 4000 / - IN CASH FROM SH. RP SINGH. THE ASSESSEE COMPANY H AS NOT CONFIRMED ANY PAYMENT OF SUCH AMOUNT TO SH. ASHOK KUMAR. (XIII) SH . DEEPAK KUMAR (RS. 2,50,000/ - ): T HE ASSESSEE HAS FILED A COPY OF STATEMENT DATED 20/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, C OUNTERFOIL OF SHARE CERTIFICATE , VOTER IDENTITY CARD AND CERTIFICATE FROM THE DEPARTMENT OF CUSTOMS AND EXCISE , WHICH ARE AVAILABLE ON PAGE 103 TO 110 OF THE PAPER BOOK. IN THE STATEMENT RECORDED, SH DEEPAK KUMAR, STATED THAT HE PAID RS. 2.5 LAKH IN CASH FOR PURCHASE OF SHARES OF THE ASSESSEE COMPANY , OUT OF THE RS. 3 LAKH WHICH WAS RECEIVED AS A REWARD FROM THE CUSTOM AND CENTRAL EXCISE DEPARTMENT IN THE YEAR 1997 AND LYING 27 ITA NO. 5710/DEL/2012 AY: 2000 - 01 IN THE HIS HOUSE FOR LAST TWO YEARS. HOWEVER ON PERUSAL OF THE CERTIFICATE ISSUED BY THE C USTOM AND CENTRAL E XCISE DEPARTMENT , AVAILABLE ON PAGE 110 OF THE PAPER BOOK, THE NAME OF THE RECIPIENT OF THE REWARD IS NOT MENTIONED. IN THE AFFIDAVIT FILED, SH. DEEPAK KUMAR STATED OF HAVING AGRICULTURE INCOME, HOWEVER NO EVIDENCE IN SUPPORT OF AGRICULTURE LAND HOLDING WAS SUBMITTED EITHER BY HIM OR BY THE ASSESSEE COMPANY IN SUPPORT OF CREDITWORTHINESS OF SH DEEPAK KUMAR. HE WAS ALSO NOT AWARE ABOUT THE PROFIT OF THE ASSESSEE COMPANY AND HE ADMITTED THAT HE DID NOT RECEIVE ANY PROFIT FROM THE ASSESSEE COMPANY. (XIV) SH. SU RESH SHOKEEN (RS. 50,000/ - ) : T HE ASSESSEE SUBMITTED A COPY OF STATEMENT DATED 22/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND VOTER IDENTITY CARD, WHICH ARE AVAILABLE ON PAGE 111 TO 117 OF THE PAPER BOOK. IN THE STATEMENT REC ORDED, SH. SURESH SHOKEEN STATED OF GIVING RS. 50,000 IN CASH TO SH. RP SINGH. HE STATED OF HAVING ENGAGED IN PROPERTY DEALING FOR LAST 10 YEARS. IN THE AFFIDAVIT FILED , HE CLAIMED TO BE A BUSINESSMAN, HOWEVER NO EVIDENCE IN SUPPORT OF SOURCE OF INCOME OR CREDITWORTHINESS WAS FILED EITHER BY HIM OR BY THE ASSESSEE COMPANY. SH. SURESH SHAUKEEN ADMITTED THAT HE HAD NOT MADE INVESTMENT IN ANY COMPANY EXCEPT THE ASSESSEE COMPANY AND NOT RECEIVED ANY DIVIDEND OR PROFIT FROM THE COMPANY. (XV) SH. SURESH MARWAH (RS. 40 ,000/ - ) : T HE ASSESSEE SUBMITTED A COPY OF STATEMENT DATED 22/12/2010, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND VOTER IDENTITY CARD, WHICH ARE AVAILABLE ON PAGE 118 TO 123 OF THE PAPER BOOK. SH. SURESH MARWAHA STATED OF THE HAVING GIVEN RS. 40,000 IN CASH TO THE ASSESSEE COMPANY. HE STATED OF HAVING ENGAGED IN BUSINESS OF REAL ESTATE. HE STATED THAT 28 ITA NO. 5710/DEL/2012 AY: 2000 - 01 HE WAS FILING RET URN OF INCOME FOR LAST 10 YEARS . BUT NO EVIDENCE IN SUPPORT OF SOURCE OF INCOME OR CREDITWORTHINESS WAS FILED EITHER BY SH. SURESH KUMAR MARWAHA OR BY THE ASSESSEE COMPANY. HE WAS NOT AWARE ABOUT THE TERM SHARE APPLICATION MONEY AND WHETHER THE COMPANY WAS IN PROFIT AND LOSS. HE ALSO ADMITTED THAT NO PROFIT WAS RECEIVED FROM THE ASSESSEE COMPANY THOUGH THE MONEY WAS INVESTED FOR EARNING PROFIT. (XVI) SH . RAJE NDRA SHOKEEN ( RS.40,000/ - ) : T HE ASSESSEE SUBMITTED COPY OF STATEMENT DATED 22/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE, WHICH ARE AVAILABLE ON PAGE 124 TO 128 OF THE PAPER BOOK. IN THE STATEMENT, SH RAJENDRA SINGH STATED HIS SOURCE OF I NCOME FROM PROPERTY DEALING AND AGRICULTURE, HOWEVER IN THE AFFIDAVIT AND IN THE SHARE APPLICATION FORM , SOURCE OF INCOME IS MENTIONED AS AGRICULTURE INCOME. NO EVIDENCE IN SUPPORT OF THE SOURCE OF INCOME OR LAND HOLDING OR CREDITWORTHINESS FILED EITHER BY SH. RAJENDRA SINGH OR BY THE ASSESSEE. IN THE STATEMENT SH RAJENDRA SINGH ADMITTED THAT HE WAS NOT KNOWING ABOUT THE SHARE APPLICATION MONEY AND MONEY WAS INVESTED FOR GETTING PROFIT BUT NO PROFIT WAS RECEIVED. (XVII) SH. RANVIR SINGH ( RS. 35,000/ - ): T HE ASSES SEE SUBMITTED A COPY OF STATEMENT DATED 22/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND VOTER IDENTITY CARD, WHICH ARE AVAILABLE ON PAGE 129 TO 135 OF THE PAPER BOOK. IN THE STATEMENT RECORDED, SH. RANVEER SINGH STATED OF HAVING INVESTED RS. 35,000 / - IN CASH IN THE ASSESSEE COMPANY.. HE STATED THAT IN 1999 HIS INCOME WAS AROUND RS. 40,000 FROM AGRICULTURE BUT NO EVIDENCE IN SUPPORT OF AGRICULTURE LAND HOLDING WAS FILED EITHER BY SH RANVIR SINGH OR BY THE ASSE SSEE IN SUPPORT OF CREDITWORTHINESS OF SH. RANVIR SINGH. HE WAS ALSO NOT KNOWING 29 ITA NO. 5710/DEL/2012 AY: 2000 - 01 ABOUT THE SHARE APPLICATION MONEY AND STATED THAT NO PROFIT WAS RECEIVED FROM THE COMPANY EXCEPT FOOD EXPENSES DURING THE MEETING WITH SH. RP SINGH. HE ALSO STATED THAT MONEY WAS GIVEN FOR EARNING THE COMPANY. (XVIII) SH S ANJAY SHARMA ( RS. 25,000/ - ) : T HE ASSESSEE SUBMITTED A COPY OF STATEMENT DATED 22/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND VOTER IDENTITY CARD, WHICH ARE AVAILABLE ON PAGE 136 TO 142 OF THE PAPER BOOK. IN THE STATEMENT RECORDED, SH. SANJAY SHARMA STATED THAT HE PAID RS. 25,000 / - OUT OF MONEY RECEIVED FROM HIS FATHER. HE DID NOT GIVE DETAIL OF HIS SOURCE OF INCOME, HOWEVER IN THE AFFIDAVIT FILED; HE STATED HIS SOURCE OF INCOME AS SALARY INCOME . IN THE SHARE APPLICATION FORM, THE OCCUPATION HAS BEEN MENTIONED AS BUSINESS . BUT NEITHER SH. SANJAY SHARMA NOR THE ASSESSEE FILED ANY EVIDENCE IN SUPPORT OF SOURCE OF INCOME OR CREDITWO RTHINESS OF SHR I SANJAY SHARM A OR HIS FATHER. HE ALSO STATED THAT NO INVESTMENT WAS MADE IN ANY OTHER COMPANY EXCEPT THE ASSESSEE COMPANY. HE WAS ALSO NOT AWARE ABOUT THE MEANING OF TERM SHARE APPLICATION MONEY AND STATED THAT MONEY WAS INVESTED FOR GETT ING PROFIT HOWEVER NO PROFIT WAS RECEIVED FROM THE COMPANY. (XIX) SH MAHIPAL SINGH ( RS. 50,000/ - ) : T HE ASSESSEE SUBMITTED A COPY OF STATEMENT DATED 22/12/2010, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE, VOTER IDENTITY CARD, AND PROOF OF AGRICULTURE LAND HOLDING , WHICH ARE AVAILABLE ON PAGE 143 TO 154 OF THE PAPER BOOK. IN THE STATEMENT, S H MAHIPAL SINGH STATED OF HAVING GIVEN RS. 50,000 IN CASH TO SH. RP SINGH. HE WAS ALSO NOT AWARE ABOUT THE TERM SHARE APPLICATION MONEY AND HE STATED THAT INVESTMENT WAS MADE FOR EARNING PROFIT BUT TILL DATE NO PROFIT OR DIVIDEND WAS RECEIVED. 30 ITA NO. 5710/DEL/2012 AY: 2000 - 01 (XX) SH . BRAHM P RAKASH ( RS. 50,000/ - ) : T HE ASSESSEE SUBMITTED A COPY OF DEATH CERTIFICATE, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM AND COUNTERFOIL OF SHARE CERTIFICATE IN RESPECT OF SH. BRAHM PARKASH , WHICH ARE AVAILABLE ON PAGE 155 TO 158 OF THE PAPER BOOK . IN T HE DEATH CERTIFICATE, DATE OF DEATH OF SH . BRAHM PRAKASH IS RECORDED AS 01/08/2007, WHEREAS ON PERUSAL OF THE PHOTOCOPY OF AFFIDAVIT OF SH . BRAHM PRAKASH FILED BY THE ASSESSEE, WHICH IS AVAILABLE ON PAGE 156 OF THE PAPER BOOK , WE FIND THAT IT IS STAMPED I N THE MONTH OF AUGUST 2007, THOUGH THE EXACT DATE IS NOT READABLE. THIS RAISES DOUBT O N THE AUTHENTICITY OF THE AFFIDAVIT OF THE PERSON. (XXI) SH RAJIV KUMAR (RS.40,000/ - ) : T HE ASSESSEE HAS SUBMITTED A COPY OF STATEMENT ON OATH DATED 26/02/2004, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND DEATH CERTIFICATE IN RESPECT OF SRI RAJIV KUMAR , WHICH ARE AS AVAILABLE ON PAGE 159 TO 163 OF THE PAPER BOOK . IN THE STATEMENT RECORDED , THE PERSON STATED OF GIVING RS. 40,000 IN CAS H TO SH. RP SINGH. HE STATED THAT SAID MONEY WAS INVESTED OUT OF SALE OF SUGARCANE CROPS, HOWEVER NO EVIDENCE IN SUPPORT OF SUCH SALE WAS FILED EITHER BY THE ASSESSEE OR BY SH. RAJIV KUMAR BEFORE THE ASSESSING OFFICER. HE ALSO STATED THAT HE DID NOT RECEIV E ANY PROFIT OR DIVIDEND AGAINST THE SAID INVESTMENT. (XXII) SH HARPAL SINGH (RS. 35,000/ - ) : T HE ASSESSEE FURNISHED A COPY OF CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE, RATION CARD AND PROOF OF AGRICULTURE LAND HOLDING IN R ESPECT OF SRI HARPAL SINGH , WHICH ARE AVAILABLE ON PAGE 164 TO 172 OF THE PAPER BOOK . THE ASSESSEE COULD NOT PRODUCE THE SAID PERSON BEFORE THE ASSESSING OFFICER AND REQUESTED FOR ISSUE OF SUMMON TO HIM. ACCORDING TO THE COPY OF RATION CARD, WHICH IS AVAIL ABLE ON PAGE 167 OF THE PAPER BOOK, ANNUAL INCOME OF FAMILY 31 ITA NO. 5710/DEL/2012 AY: 2000 - 01 SH HARPA LSINGH HAS BEEN RECORDED AS RS. 9500/ - , WHICH IS IN OUR OPINION IS NOT SUFFICIENT TO EXPLAIN THE INVESTMENT SHOWN BY HIM . (XXIII) SH OM PRAKASH SINGH (RS. 40,000/ - ): I N RESPECT TO THE PERSON, THE ASSESSEE FILED A COPY OF CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE , WHICH ARE AVAILABLE ON PAGE 173 TO 175 OF THE PAPER BOOK . THE ASSESSEE COULD NOT PRODUCE THE PERSON BEFORE THE ASSESSING OFFICER AND REQUESTED FOR ISSUE OF SUMMON. NO DOCUMENT IN SUPPORT OF CREDITWORTHINESS OF THE PERSON WAS FILED BY THE ASSESSEE. (XXIV) SH RAM PRASAD SINGH (RS. 40,000/ - ) : IN RESPECT OF THE PERSON, THE ASSESSEE FILED A COPY OF CONFIRMATORY AFFIDAVIT, SHARE APPLIC ATION FORM, COUNTERFOIL OF SHARE CERTIFICATE, VOTER ID CARD AND PROOF OF AGRICULTURE LAND HOLDING , WHICH ARE AVAILABLE ON PAGE 176 TO 184 OF THE PAPER BOOK. THE PERSON WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER AND THE ASSESSEE REQUESTED FOR ISSUE OF SU MMON. (XXV) S H KHOOB SINGH ( RS. 40,000/ - ): I N RESPECT OF THE PERSON, THE ASSESSEE FILED A COPY OF CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE, VOTER ID CARD AND PROOF OF AGRICULTURE LAND HOLDING WHICH ARE AVAILABLE ON PAGE 1 85 TO 193 OF THE PAPER BOOK. THE PERSON WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER AND THE A SSESSEE REQUESTED FOR ISSUE OF SU MMON TO THE SAID PERSON. (XXVI) SH RAKESH KUMAR TYAGI (RS. 40,000/ - ) : T HE ASSESSEE SUBMITTED A COPY OF CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND VOTER ID CARD WHICH ARE AVAILABLE ON PAGE 194 TO 197 OF THE PAPER BOOK. THE ASSESSEE DID NOT PRODUCE THE PERSON BEFORE THE ASSESSING OFFICE R AND REQUESTED FOR 32 ITA NO. 5710/DEL/2012 AY: 2000 - 01 ISSUE OF SUMMON TO THE SAID PERSON. THE ASSESSEE ALSO HAS NOT FILED ANY EVIDENCE IN SUPPORT OF CREDITWORTHINESS OF THE SAID PERSON. (XXVII) SH SUDHIR K UMAR PRASHAR ( RS. 35,000/ - ) : T HE ASSESSEE HAS FILED A COPY OF CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM AND COUNTERFOIL OF SHARE CERTIFICATE, WHICH ARE AVAILABLE ON PAGE 198 TO 200 OF THE PAPER BOOK. NO EVIDENCE IN SUPPORT OF CREDITWORTHINESS OF THE PERSON WAS FILED WITH ASSESSEE AND THE PERSON WAS ALSO NOT PRODUCED BEFORE THE ASSESSING OFF ICER. (XXVIII) SH RAJESH KUMAR (RS. 15,000/ - ) . THE ASSESSEE FILED A COPY OF CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM AND COUNTERFOIL OF SHARE CERTIFICATE, WHICH ARE AVAILABLE ON PAGE 201 TO 203 OF THE PAPER BOOK. THE PERSON WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER AND THE ASSESSEE REQUESTED FOR ISSUE OF SUMMON TO HIM. (XXIX) SH RO OP RAM SINGH (RS. 30,000/ - ) : T HE ASSESSEE FILED A COPY OF STATEMENT DATED 26/02/2004, CONFIRMATORY AFFIDAVIT, SHARE APPLICATION FORM, COUNTERFOIL OF SHARE CERTIFICATE AND VOTER ID CARD WHICH ARE AVAILABLE ON PAGE 204 TO 209 OF THE PAPER BOOK. IN THE STATEMENT THE PE RSON STATED OF HAVING GIVEN RS. 30,000 TO SHRI R . P . SINGH EXPECTING SOME RETURN ON THE MONEY HOWEVER NEITHER ANY SHARES NOR ANY BENEFIT WERE RECEIVED. THE PERSON STATED THAT MONEY WAS INVESTED OUT OF AGRICULTURE INCOME; HOWEVER NO EVIDENCE OF LAND HOLDING OR EVIDENCE IN SUPPORT OF CREDITWORTHINESS WAS FILED BY THE ASSESSEE. 16 . ON PERUSAL OF THE DOCUMENTS AND OBSERVATIONS MENTIONED ABOVE IN RESPECT OF THE 29 PERSONS , WE FIND THAT IN SUPPORT OF THE IDENTITY OF THESE PERSONS, THE ASSESSEE HAS SUBMITTED COPY OF EITHER RATION CARD OR VOTER IDENTITY CARD OR DRIVING LICENCE ETC AND OUT OF 29 PERSONS, 19 PERSONS WERE PRODUCED BEFORE THE ASSESSING OFFICER ALSO, THUS, THE IDE NTITY OF THOSE PERSONS CANNOT BE DOUBTED. 33 ITA NO. 5710/DEL/2012 AY: 2000 - 01 17 . HOWEVER , IN SUPPORT OF CREDITWORTHINESS, THE ASSESSEE HAS SUBMITTED COPY OF PROOF OF AGRICULTURE LAND HOLDING IN CASE OF ONLY SIX PERSONS , NAMELY , SHREE VI JAY VEER SINGH, SH YOGRAJ SINGH, SH MAHIPAL SINGH , SH HARPAL SINGH, SH RAM PRASAD SINGH, AND SH. KHOOB SINGH. ONLY ONE PERSON, SH KRIS NA KUMAR FILED COPY OF PAN CARD . THOUGH IN THE STATEMENTS , IT IS CLAIMED BY SH. VIJAY VEER SINGH, SH KARMAPAL SINGH, SH KRISHNAPAL GEHLOT, SH KARMA VEER SINGH ETC . THAT MON EY WAS INVESTED OUT OF SALE OF CROPS, BUT NO EVIDENCE IN SUPPORT OF SALE OF CRO PS WAS FILED BEFORE EITHER THE LOWER AUTHORITIES OR BE FORE US . IN CASE OF SH. NANU SINGH, THE COPY OF RATION CARD AVAILABLE ON PAGE 16 OF THE PAPER BOOK, SHOWS ANNUAL INCOME OF THE FAMILY AT RS. 2000 ONLY AND WHICH IN OUR OPINION IS NOT SUFFICIENT TO EXPLAIN THE INVESTMENT OF RS 30,000/ - BY HIM. SIMILARLY, SH HARPAL SINGH HAS SHOWN INVESTMENT OF RS. 35000/ - IN SHARE APPLICATION MONEY, WHEREAS IN THE RATION CARD OF SH. HARPAL SINGH , ANNUL INCOME OF RS. 9500 HAS BEEN SHOWN, WHICH IS NOT SUFFICIENT TO EXPLAIN HIS INVESTMENT . SH. DEEPAK KUMAR MADE INVESTMENT OF RS. 2.5 LAKH IN THE SHARE APPLICATION MONEY AND STATED THAT SAID INVESTMENT WAS OUT OF REWARD OF RS. 3 LAKH FROM CUSTOM AND CENTRAL EXCISE DEPARTMENT. IN SUPPORT OF THE CREDITWORTHINESS OF SH. DEEPAK KUMAR, THE ASSESSEE HAS SUBMITTED A CERTIFICATE FROM OFFICE OF THE CUSTOMS AND CENTRAL EXCISE, WHICH IS AVAILABLE ON PAGE 110 OF THE ASSESSES PAPER BOOK. ON PERUSAL OF THE CERTIFIC ATE WE FIND THAT NAME OF SH DEEPAK KUMAR, IS NOT APPEARING IN THE SAID CERTIFICATE. NO OTHER EVIDENCE LIKE COPY OF RETURN OF INCOME ETC WAS FILED SUPPORTING THE RECEIPT OF SUCH INCOME IN THE HAND OF SH. DEEPAK KUMAR. 18 . AS FAR AS GENUINENESS OF THE TRA NSACTION IS CONCERNED, WE HAVE OBSERVED FOLLOWING FACTS: (I) THAT T HE TRANSACTION S OF SHARE APPLICATION MONEY BY ALL THE 29 PERSONS HAVE BEEN CLAIMED TO BE MADE IN CASH AND T HE PERSONS 34 ITA NO. 5710/DEL/2012 AY: 2000 - 01 CLAIMED THAT THEY WERE NOT HAVING ANY BANK ACCOUNT. IN OUR OPINION, T HIS IS QUITE UNCOMMON IN NORMAL CIRCUMSTANCES AS NEITHER A SINGLE PERSON WAS HAVING BANK ACCOUNT NOR UTILIZED BANK FACULTIES FOR ISSUING DRAFT OR BANKER S CHEQUE FOR PAYMENT TO THE COMPANY. (II) THAT T HE INDIRA VIKAS PATRAS (IVP) OF RS. 8,97,500/ - AND CASH OF RS. 2 .00 LAKHS WERE FOUND FROM LO C KER OF SH RP SINGH AND HIS WIFE IN SEARCH CARRIED OUT BY THE CBI ON 12/05/2000 . THESE IVPS WERE PURCHASED DURING THE PERIOD FROM 12/07/1999 AND 15/07/99 AND WERE NOT BEARING NAME OF ANY PURCHASER. IT WAS EXPLAINED BEFORE THE C BI, THAT THESE IVPS WERE PURCHASED BY THE ASSESSEE COMPANY IN CASH OUT OF THE SHARE APPLICATION MONEY RECEIVED FROM 29 APPLICANTS BETWEEN APRIL, 1999 TO AUGUST, 1999 . IN OUR OPINION, I N NORMAL CIRCUMSTANCES, ANY COMPANY WOULD HAVE DEPOSITED THE SHARE APPLICATION MONEY OR SHARE CAPITAL RECEIVED , IN ITS BANK ACCOUNT AND THEN ANY INVESTMENT IN IVPS ETC WOULD HAVE BEEN MADE THROUGH BANKING CHANNEL AS THE COMPANY WAS HAVING BANK ACCOUNT FACILITIES . (III) THAT T HE INTE REST ACCRUED ON THE INDIRA VIKAS PATRAS FOR THE RELEVANT YEAR WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE COMPANY. IN OUR OPINION, THAT CANNOT BE A C O I N C I D E N C E . (IV) THAT T HE ASSESSEE HAS CLAIMED TO HAVE RECEIVED SHARE APPLICATION MONEY OF RS. 13, 90,000 / - IN THE MONTH OF APRIL, 1999 TO AUGUST , 1999 . HOWEVER, TILL 20/12/2001 , T HE COMPANY WAS HAVING AUTHORIZED CAPITAL OF RS. 1 LAKH ONLY . IN OUR OPINION, I T IS QUITE ABNORMAL THAT WITHOUT HAVING AUTHORIZED SHARE CAPITAL, THE COMPANY WILL INVITE SHARE APPLICATION MONEY AND INVESTOR WILL INVEST WITHOUT LOOKING INTO THIS FACT. 35 ITA NO. 5710/DEL/2012 AY: 2000 - 01 (V) THAT A LL THE PERSONS CLAIMED TO BE SHARE APPLICANTS , ARE FRIENDS AND RELATIVES OF SRI RP SINGH. (VI) THAT T HE ASSESSEE HAS NOT FILED ANY EVI DENCE THAT ANY SUCH SHARE APPLICATION S FORM WERE FOUND DURING THE COURSE OF SEARCH BY THE CBI AND T HE COPY OF SHARE CERTIFICATES FILED BEFORE INCOME - TAX AUTHORITIES IN THE NAME OF THESE PERSONS , HAVE BEEN ISSUED SUBSEQUENT TO THE SEARCH BY THE CBI. (VII) THAT T HE ASSESSEE FILED AFFIDAVITS OF ALL THE PERSONS, EXCEPT THREE PERSONS , NAMELY , SH KARAMVEER SINGH, SH ASHOK KUMAR S/O SH JAI PAL SINGH AND SH SURESH MARWAH , BEFORE THE ASSESSING OFFICER. THE STAMP PAPER S USED FOR FILING AFFIDAVIT S OF ALL THESE PERSONS HAVE BEEN PURCHASE D IN BULK , WHICH ARE BEARING SERIAL NUMBER AA 514170 TO AA 514198 ( EXCEPT S. NO. AA514172, AA514190 AND AA514196). ALL THE SE AFFIDAVITS ARE MORE OR LESS SIMILARLY WORDED AND WRITTEN IN ENGLISH LANGUAGE. (VIII) THAT I N THE STATEMENT GIVEN BEFOR E THE ASSESSING OFFICER , THE ANSWERS GIVEN BY THE PERSONS IN RESPONSE TO THE QUESTIONS RAISED BY THE AO, ARE MORE OR LESS SAME AND THEY ARE NOT AWARE ABOUT THE SHARE APPLICATION M O N E Y AND PROFITABILITY OF THE COMPANY ETC. NONE OF THE PERSON H AS RECEIVED ANY DIVIDEND OR PROFIT FROM THE COMPANY FOR MORE THAN LAST 1 0 YEARS. IN OUR OPINION, IT IS VERY STRANGE AS N O PRUDENT MAN WILL KEEP HIS MONEY INVESTED IN THE COMPANY WITHOUT ANY RETURN FOR MORE THAN 10 YEARS 19 . T HE LD. COUNSEL SUBMITTED THAT TESTIMONIES OF T HE PERSONS WERE NOT CHALLENGED BY THE ASSESSING OFFICER IN THE CROSSS - EXAMINATION AND NOT EVEN SUGGESTION WAS PUT TO THEM THAT THEY WERE NOT TELLING THE TRUTH OR THAT THEY WERE MERE NAME OF THE ASSESSES MONEY AND THUS THE TESTIMONIES SHOULD BE ACCEPTED . WE ARE NOT AGREED WITH THIS ARGUMENT OF 36 ITA NO. 5710/DEL/2012 AY: 2000 - 01 THE LD. COUNSEL BECAUSE, FIRST LY , THE ORAL TESTIMONIES ARE ONE OF THE EVIDENCE AMONG OTHER EVIDENCES AVAILABLE ON RECORD , WHICH HAVE BEEN CONSIDERED BY THE LOWER AUTHORITIES AND SECONDLY THE ASSESSING OFFICER HAS GIVEN HIS FINDING IN RESPECT OF THE TESTIMONIES IN THE ASSESSMENT ORDER THAT THE PERSONS WERE TUTORED FOR THE STATEMENTS WHICH THEY HAVE GIVEN. 20 . IN VIEW OF OUR OBSERVATIONS AND ANALYSIS OF ALL THE EVIDENCES AVAILABLE O N RECORD , THE FACTS AND CIRCUMSTANCES O F THE CASE, WE CONCLUDE THAT THE IMPUGNED TRANSACTIONS ACCEPTING SHARE APPLICATION MONEY BY THE COMPANY DO NOT APPEAR TO BE GENUINE TRANSACTION S . THE HON BLE SUPREME COURT IN THE CASE OF SUMATI DAYAL 214 ITR 801 HAS HELD THAT GENUINENESS OF THE TRANSACTION IS TO BE CONSIDERED ON THE BASIS OF SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITIES. IN SAID CASE , THE ASSESSEE SHOWN INCOME FROM WINNING HORSE RACES AND THERE WAS DIFFERENCE OF OPINION AMONG THE MEMBERS OF THE SETTLEMENT COMMISSION ON GENUINENESS OF THE INCOM E FROM WINNING HORSE RACES . THE RELEVANT FINDING OF THE HON BLE SUPREME COURT IS REPRODUCED AS UNDER: THIS, IN OUR OPINION, IS A SUPERFICIAL APPROACH TO THE PROBLEM. THE MATTER HAS TO BE CONSIDERED IN THE LIG HT OF HUMAN PROBABILITIES : THE CHAIRMAN OF THE SETTLEMENT COMMISSION HAS EMPHASISED THAT THE APPELLANT DID POSSES THE WINNING TICKET WHICH WAS SURRENDERED TO THE RACE CLUB AND IN RETURN A CROSSED CHEQUE WAS OBTAINED. IT IS, IN OUR VIEW , A NEUTRAL CIRCUMSTANCE; BECAUSE IF THE APPELLANT HAD PURCHASED THE WINNING TICKET AFTER THE EVENT SHE WOULD BE HAVING THE WINNING TICKET WITH HER WHICH SHE COULD SURRENDER TO THE RACE CLUB. THE OBSERVATION BY THE CHAIRMAN OF THE SETTLEMENT COMMISSION THA T 'FRAUDULENT SALE OF WINNING TICKET IS NOT A USUAL PRACTICE BUT IS VERY MUCH OF AN UNUSUAL PRACTICE' IGNORES THE PREVALENT MALPRACTICE THAT WAS NOTICED BY THE DIRECT TAXES ENQUIRY COMMITTEE AND THE RECOMMENDATIONS MADE BY THE SAID COMMITTEE WHICH LED TO T HE AMENDMENT OF THE ACT BY THE FINANCE ACT OF 1972 WHEREBY THE EXEMPTION FROM TAX THAT WAS AVAILABLE IN RESPECT OF WINNINGS FROM LOTTERIES, CROSSWORD PUZZLES, RACES, ETC., WAS WITHDRAWN. SIMILARLY THE OBSERVATION BY THE CHAIRMAN THAT IF IT IS ALLEGED THAT THESE TICKETS WERE OBTAINED THROUGH FRAUDULENT MEANS, IT IS UPON THE ALLEGER TO PROVE THAT IT IS SO, IGNORES THE REALITY. THE TRANSACTION ABOUT PURCHASE OF WINNING TICKET TAKES PLACE IN SECRET AND DIRECT EVIDENCE ABOUT SUCH PURCHASE WOULD BE RARELY AVAILAB LE. AN INFERENCE ABOUT SUCH A PURCHASE HAS TO BE DRAWN ON THE BASIS OF THE CIRCUMSTANCES AVAILABLE ON THE RECORD. HAVING REGARD TO THE CONDUCT OF THE APPELLANT AS DISCLOSED IN HER 37 ITA NO. 5710/DEL/2012 AY: 2000 - 01 SWORN STATEMENT AS WELL AS OTHER MATERIAL ON THE RECORD AN INFERENCE COULD R EASONABLY BE DRAWN THAT THE WINNING TICKETS WERE PURCHASED BY THE APPELLANT AFTER THE EVENT. WE ARE, THEREFORE, UNABLE TO AGREE WITH THE VIEW OF THE CHAIRMAN IN HIS DISSENTING OPINION. IN OUR OPINION, THE MAJORITY OPINION AFTER CONSIDERING SURROUNDING CIRC UMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES HAS RIGHTLY CONCLUDED THAT THE APPELLANT'S CLAIM ABOUT THE AMOUNT BEING HER WINNING FROM RACES IS NOT GENUINE. IT CANNOT BE SAID THAT THE EXPLANATION OFFERED BY THE APPELLANT IN RESPECT OF THE SAID AMO UNTS HAS BEEN REJECTED UNREASONABLY AND THAT THE FINDING THAT THE SAID AMOUNTS ARE INCOME OF THE APPELLANT FROM OTHER SOURCES IS NOT BASED ON EVIDENCE. ( EMPHASIS SUPPLIED BY US). 21 . THE HON BLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VERSUS NOVA PROMOTERS AND FINLEASE PRIVATE LIMITED (2012) 342 ITR 0169 OBSERVED THAT MERELY SHARES WERE BORNE ON THE FILE OF THE REGISTRAR OF COMPANIES , WAS A NEUTRAL FACT A N D COMPLYING WITH SUCH FO RMALITIES DID NOT ADD ANY CREDIBILITY OR EVIDENTIARY VALUE. IN VIEW OF ABOVE FINDING OF THE HON BLE DELHI HIGH COURT , WE ARE OF THE OPINION THAT IN THE CASE OF PRESENT ASSESSEE , MERE FILING OF COPY OF SHARE CERTIFICATES IN THE NAME OF PERSONS, CANNOT LEAD TO GENUINENESS OF THE TRANSACTION. 22 . IN VIEW OF ABOVE, THE SURROUNDING CIRCUMSTANCES AND THE HUMAN PROBABILITIES , WE CONCLUDE THAT ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS OF ESTABLISHING GENUINENESS OF THE TRANSACTIONS . 23 . IN VIEW OF THE POSIT ION OF LAW DISCUSSED IN PRECEDING PARAS, T HE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION ARE MAIN INGREDIENT S OF SECTION 68 OF THE ACT, AND THE ASSESSEE HAS FAILED IN DISCHARGING ITS ONUS TO SATISFY THE REQUIREMENT OF SECTION 68 OF THE ACT. W E ALSO NOTE THAT THE TRIBUNAL IN FIRST ROUND OF APPELLATE PROCEEDINGS, RESTORED THE ISSUE FOR EXAMINATION OF THE P ERSON S ONLY. IN THE SE CIRCUMSTANCES, W E UPHOLD THE FINDING OF THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) ON T HE ISSUE IN DISPUTE. THE GROU NDS NO. 1 & 4 OF THE APPEAL ARE ACCORDINGLY D I S M I S S E D . 24 . THE GROUND NO. 2 AND 3 OF THE APPEAL WERE NOT ARGUED SPECIFICALLY BEFORE US. SINCE WE HAVE ALREADY UPHELD THE AMOUNT OF R S .13, 90,000/ - 38 ITA NO. 5710/DEL/2012 AY: 2000 - 01 SHOWN TO BE RECEIVED BY THE ASSESSEE AS SHARE APPLICATION MONE Y AS UNEXPLAINED IN TERMS OF SECTION 68 OF THE ACT, THE ISSUE WHETHER PAID UP SHARE CAPITAL OR SHARE APPLICATION MONEY CANNOT EXCEED AUTHORIZED SHARE CAPITAL AS PER THE PROVISIONS OF THE COMPANIES ACT, IS MERELY ACADEMIC AND THUS BOTH THE GROUNDS NO. 2 AN D 3 ARE DISMISSED AS INFRUCTUOUS. 25 . IN THE RESULT , APPE AL OF THE ASSESSEE IS DISMISSED. THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 1 0 T H MARCH , 201 7 . S D / - S D / - ( H.S. SIDHU ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 0 T H MARCH , 201 7 . RK / - (D.T.D) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI