M/s A.P. Refinery (P) Ltd., Jagaron V. Addl. CIT, Ludhiana

ITA 572/CHANDI/2015

• Counselvise Citation: 57221514 RSA 2015
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ MISHRA
• Assessee Lawyers: ASHWANI KUMAR
• Keywords: Gross profit estimation; Gift; Depreciation; Income from undisclosed sources; Search and seizure; Share purchase agreement; Opportunity of being heard; Principle of natural justice; Question of law; Tangible material; Wrong claim; Difference of opinion; Accommodation entries; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 32; 147; 131; 68; 148; 132; 69C; 11; 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 572/CHD/2015 ASSESSMENT YEAR: 2009-10 M/S A.P. REFINERY PVT. LTD., VS THE ADD. CIT, VILLAGE SAROUD, RANGE IV, LUDHIANA ROAD, LUDHIANA. MALERKOTLA. (NOW VILLAGE-TAPPAR HARNIA, NAKODAR, JALANDHAR ROAD, JAGRAON. PAN: AAFCA1352B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI MANOJ MISHRA DATE OF HEARING : 20.10.2015 DATE OF PRONOUNCEMENT : 05.11.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS)-II LUDHIANA DATED 27.03.2015 FO R ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS : (1) THAT ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-LL, LUDHIA NA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH HE WAS NOT JUS TIFIED TO UPHOLD THE ACTION OF THE LD. ASSESSING OFFICER IN RESORTING TO THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT, 1961 (2) THAT LD. CIT(A) FURTHER GRAVELY ERRED IN UPHOLDING THE ACTION OF THE LD. ASSESSING OFFICER IN MAKING AN ADDITION OF RS. 3,74,00,000/- RECEIVED BY THE APPELLANT 'COMPANY AS SHARE APPLICA TION MONEY/SHARE CAPITAL/SHARE PREMIUM AS ALLEGED UNEXPLAINED CASH C REDIT U/S 68 OF THE INCOME TAX ACT, 1 961 . (3) THAT HE WAS FURTHER NOT JUSTIFIED TO UPHOLD THE AD DITION OF RS. 8,41,500/-MADE BY THE LD. ASSESSING OFFICER U/S 69C AS ALLEGED PAYMENT OF COMMISSION ON THE ALLEGED ACCOMMODATION ENTRIES. 2 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 30.12.2011 AT LOSS OF RS. 64, 92,340/- AGAINST RETURNED LOSS OF RS. 1,50,37,116/- BY MAKIN G ADDITIONS ON ACCOUNT OF LOW GP, UNDER VALUATION OF CLOSING STOCK, THE DISALLOWANCE OF DEPRECIATION, DISALLOWAN CE OF INTEREST AND DISALLOWANCE OF EXPENSES ETC. (PB- -1) . SUBSEQUENTLY INFORMATION WAS RECEIVED FROM THE INVESTIGATION WING OF INCOME TAX DEPARTMENT AT DELH I THAT THE ASSESSEE COMPANY HAD RECEIVED ACCOMMODATION ENT RIES AS SHARE APPLICATION MONEY/SHARE CAPITAL/SHARE PREM IUM DURING THE YEAR UNDER CONSIDERATION FROM PAPER COMP ANIES CONTROLLED BY ONE PERSON. THE CASE WAS REOPENED UN DER SECTION 148 OF THE ACT BY RECORDING THE REASONS FOR RE- OPENING OF THE ASSESSMENT DATED 17.12.2012. THE CO PY OF THE SAME IS FILED AT PAGES 12 TO 17 OF THE PAPER BO OK AND READS AS UNDER : REASONS FOR ISSUANCE FOR NOTICE U/S 148 OF THE IT A CT,1961 1. NAME & ADDRESS OF THE ASSESSEE M/S A.P. REFINER Y (P) LTD. VILLAGE SAROUD, LUDHIANA ROAD, MALERKOTLA. 2. PAN AABCA1353B 3. ASSESSMENT YEAR 2009-10 THE ASSESSEE FILED ITS RETURN OF INCOME ON 27.09.20 09 DECLARING NIL INCOME. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 30 .12.2011 BY THE INCOME 3 TAX OFFICER, WARD-!V(3), MALERKOTLA AT NIL INCOME. HOWEVER, THE LOSS TO BE CARRIED FORWARD WAS REDUCED FROM RS. 1,50,37,116/- TO RS. 64,92,340/- AS TOTAL ADDITIONS/DISALLOWANCES AMOUNTING TO RS. 85,44,773/ - WERE MADE ON VARIOUS ACCOUNTS. WHILE DEALING WITH THE APPELLATE ORDER OF THE HON'B LE ITAT, CHANDIGARH IN THE CASE OF M/S KISCO CASTINGS (P) LTD., KHANNA FOR THE A.Y.2006-07, IT WAS NOTICED THAT THE INVESTIGATION WING OF THE INCOME T AX DEPARTMENT AT DELHI HAD UNEARTHED A SCANDAL OF PROVIDING ACCOMMODATION ENTR IES IN THE FORM OF SHARE CAPITAL/SHARE APPLICATION MONEY TO THE DESIRING COM PANIES. THE BRIEF FACTS OF THE SAID CASE ARE THAT A SEARCH UNDER SECTION 132(1) WA S CONDUCTED BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT DEL HI AT 13/34 WEA KAROL BAGH, NEW DELHI, WHICH WAS THE OFFICE OF ONE SH. TA RUN GOYAL, C.A. IT WAS NOTICED BY THE INVESTIGATION WING THAT HE HAD FLOAT ED A NUMBER OF COMPANIES FOR THE PURPOSE OF PROVIDING ACCOMMODATION ENTRIES TO THE DESIRING PERSONS. DURING THE STUDY OF THE ASSESSMENT FILE OF M/S KISC O CASTINGS (P) LTD., IT WAS SEEN THAT THE INFORMATION RECEIVED FROM THE INVESTIGATIO N WING AT NEW DELHI CONTAINS REFERENCE TO THE ASSESSEE COMPANY I.E. M/S A.P. REFINERY (P) LTD., ALSO. AS PER THAT, THIS COMPANY HAD ALSO BEEN PROVIDED AC COMMODATION ENTRIES BY SH. TARUN GOYAL DURING THE F.Y. 2008-09 RELEVANT TO A.Y . 2009-10. ON GOING THROUGH THE ASSESSMENT FILE, IT WAS NOTICED THAT THE ASSESS EE COMPANY HAD RAISED AN AMOUNT OF RS. 761.75 LAKHS AS SHARE CAPITAL, SHARE APPLICATION MONEY AND SHARE PREMIUM DURING THE FINANCIAL YEAR 2008-09 AS PER TH E FOLLOWING DETAILS:- 1. M/S CAMPARI FISCAL SERVICES (P)LTD. RS. 62,00, 000/- 2. M/S TAURUS IRON & STEEL CO.(P)LTD. RS.1,05,00, 000/- 3. M/S TEJASVI INVESTMENTS (P)LTD. RS. 27,00,000 /- 4. M/S THAR STEEL (P)LTD. RS. 55,00,000/- 5. SHRI BHUWAN GOYAL RS. 12,00,000/- 6. SMT. ANITA RANI RS. 3,00,000/- 7. SHRI ARUN GOYAL RS. 4,00,000/- 8. M/S KAVERI SHILP KALA LTD. RS. 35,00,000/- 9. M/S RAJASTHAN PLANTATION CO.LTD. RS. 50,00,00 0/- 10. M.S SHALINI HOLDINGS RS.1,25,00,000/- 11. SHRI SHIV GOYAL RS. 5,00,000/- 12. M/S JINDAL PROTEINS RS.2,62,00,000/- 13. MISC.(SHARE APPLICATION) RS. 11,75,000/- ---------------------- RS.7,61,75,000/- ---------------------- 4 OUT OF THESE, THE FOLLOWING COMPANIES BELONG TO THE GROUP CONTROLLED BY SHRI TARUN GOYAL : 1. M/S CAMPARI FISCAL SERVICES (P) LTD. RS. 62, 00,000/- 2. M/S TAURUS IRON & STEEL CO. (P) LTD. RS.1,05,0 0,000/- 3. M/S TEJASVI INVESTMENTS (P) LTD. RS. 27,00,0 00/- 4. M/S THAR STEEL (P) LTD. RS. 55,00,000/- TOTAL RS.2,49,00,000/- THE DETAILED FACTS RELATIANG TO THESE, AS COMING OU T FROM THE REPORT OF THE INVESTIGATION WING AND AS ANALYZED IN THE CASE OF M /S KISCO CASTINGS (P) LTD. ARE AS BELOW: - (I) SH. TARUN GOYAL HAD FLOATED ABOUT 90 COMPA NIES FOR THE PURPOSE OR PROVIDING ACCOMMODATION ENTRIES, (II) NON OF THESE COMPANIES WAS CARRYING OUT A NY GENUINE ACTIVITIES AND WERE MERELY BEING USED TO PROVIDE ACCOMMODATION ENTRIES ONLY. ALL THE COMPANIES WERE OPERATING FROM THE OFFICE OF SH. TARUN GOYAL AT 13/ 34 WEA, ARYA SAMAJ ROAD, KAROL BAGH, NEW DELHI. (III) DURING THE PERIOD 01.04.2002 TO 31.10.2008, C ASH TO THE TUNE OF RS.(APPROXIMATE) 200 CRORES WAS DEPOSITED IN THE BA NK ACCOUNTS OF THESE COMPANIES OR ITS ASSOCIATE PERSONS. THESE AMOUNTS WERE USED T O GIVE ACCOMMODATION ENTRIES DIRECTLY OR BY LAYERING THROUGH DIFFERENT ACCOUNTS, (IV) THE DIRECTORS OF THE ALL THESE COMPANIES WERE ONLY THE FORMER AND THE PRESENT EMPLOYEES OF SH. TARUN GOYAL. SH. TARUN GOYAL HAD B EEN MISUSING HIS POSITION AS THEIR EMPLOYER BY GETTING VARIOUS DOCUMENTS AND BAN K CHEQUES SIGNED BY THEM AND USING THEM FOR TRANSPORTING AND EXCHANGING CASH AND CHEQUES TO PROVIDE ACCOMMODATION ENTRIES. (V) THE EMPLOYEES PRESENT DURING SEARCH ADMITT ED THE ABOVE FACTS IN THEIR STATEMENTS ON OATH AND STATED THAT THEY WERE SIGNIN G VARIOUS DOCUMENTS AS AND WHEN ASKED BY SH. TARUN GOYAL. FOR EXAMPLE AN EMPLOYEE NAMED USHA HAD BEEN MADE DI RECTOR IN SIX COMPANIES. BANK ACCOUNTS HAD BEEN OPENED IN HER NAME AND EVEN RETURN OF INCOME IN HER NAME WAS FILED. HOWEVER SHE HAD NO KNOWLEDGE ABOUT ALL T HESE. EVEN BANK ACCOUNTS IN FICTITIOUS NAMES USING HER PHOTO WERE OPENED REGARD ING WHICH ALSO SHE EXPRESSED TOTAL IGNORANCE. SIMILARLY ANOTHER EMPLOYEE SH. HARPREET SINGH WAS M ADE DIRECTOR IN FIVE COMPANIES. HOWEVER HE DID NOT KNOW ANYTHING ABOUT T HE ACTIVITIES OF THESE 5 COMPANIES. HE CATEGORICALLY STATED THAT HE ONLY SIG NED THE CHEQUES AND DOCUMENTS AS PER DIRECTION OF SH. TARUN GOYAL AND MAIN WORK OF A LL THESE COMPANIES WERE MANAGED BY SH. TARUN GOYAL. HE HAD SIGNED ON THE BLANK CHEQ UES IN ADVANCE FOR USE BY SH. TARUN GOYAL AND THIS WAS STATED TO BE DONE ON THE G UIDANCE OF SH. TARUN GOYAL. FURTHER SMT. RITU SAXENA ANOTHER EMPLOYEE WAS SHOWN AS DIRECTOR IN FIVE COMPANIES. SHE WAS WORKING AS RECEPTIONIST IN THE OFFICE OF SH . TARUN GOYAI AND SHE HAD NO KNOWLEDGE THAT SHE WAS SHOWN AS DIRECTOR IN ANY COM PANY. A BANK ACCOUNT WAS OPENED IN HER NAME BY MISLEADING HER. SHE HAS .CATEGORICAL LY DENIED HER ASSOCIATION WITH ANY OF THE COMPANIES. (VI) ALL THE PASS BOOKS, CHEQUE BOOKS, PAN CARDS OF THESE COMPANIES WERE IN THE POSSESSION OF SH. TARUN GOYAL. ALL THE BANK ACCOUNT OPENING FORMS APPEAR TO BE FILLED-IN IN THE HAND WRITING OF SH. TARUN GOYAL. (VII) ALL THE BOOKS OF ACCOUNTS OF ALL THESE COMPAN IES HAVE BEEN RETRIEVED FROM THE COMPUTERS/ LAPTOP OF SH. TARUN GOYAL. (VIII) SH. TARUN GOYAL GAVE LETTERS FOR RELEASE OF BANK ACCOUNT OF THE COMPANIES WHICH HAD BEEN PUT UNDER RESTRAINT AFTER SEARCH. NO SUCH APPLICATION WAS FROM THE SO CALLED DIRECTORS OF THESE COMPANIES. EVEN TH E VARIOUS PROCEEDINGS IN RESPECT THESE COMPANIES BEFORE THE ASSESSING OFFICERS OR AP PELLATE AUTHORITIES WERE ALSO ATTENDED BY SH. TARUN GOYAL ONLY. (IX) SH. TARUN GOYAL COULD NOT PRODUCE THE DIRECTOR S OF VARIOUS COMPANIES BEFORE THE I.T. AUTHORITIES. (X) EVEN THE AUDITORS OF VARIOUS COMPANIES ADMITTED THAT THEY HAD NO KNOWLEDGE ABOUT THE DIRECTORS OF THE COMPANIES AND THE AUDITS WERE DONE BY THEM AT THE INSTRUCTIONS OF SH, TARUN GOYAL. SH. RA KESH SHARMA, WHO SIGNED THE AUDIT REPORTS OF SEVEN COMPANIES STATED THAT HE CAM E TO KNOW ABOUT THESE COMPANIES THROUGH SH. TARUN GOYAL, HE HAD NO KNOWLE DGE OF THE DIRECTORS OR SHARE HOLDERS OF THESE COMPANIES. SIMILARLY SH. MAHAVIR PRASHAD, ANOTHER AUDITOR, STA TED THAT HE AUDITED 20 COMPANIES. THE ADDRESS OF ALL THESE WAS 13/34 WEA, ARYA SAMAJ ROAD, KAROL BAG, NEW DELHI, WHICH WAS THE OFFICE ADDRESS OF SH. TARU N GOYAL. HE HAD NO KNOWLEDGE ABOUT THE DIRECTORS OR SHARE HOLDING PATTERNS OF TH ESE COMPANIES. HE HAD QUALIFIED THE AUDIT REPORT BY MENTIONING THAT PROPE R RECORDS FOR TRANSACTIONS AND CONTRACTS OF SHARES COULD NOT BE VERIFIED. IT W AS ALSO STATED THAT IT COULD NOT BE VERIFIED AS TO WHETHER THE SHARES WERE ACTUALLY ALLOTTED TO THE COMPANY. 6 SIMILARLY SH. SURESH BHATIA ANOTHER AUDITOR ALSO CO ULD NOT TELL THE NAMES OF DIRECTORS OF THE COMPANIES AUDITED BY HIM. HE STATE D THAT HE DISCUSSED THE MATTERS REGARDING THESE COMPANIES WITH SH. TARUN GOYAL AS T HE DIRECTORS WERE NOT PERSONALLY KNOWN TO HIM. (XI) FROM ALL THE ABOVE FACTS, IT WAS MORE THAN CLE AR THAT THESE COMPANIES WERE STAGE MANAGED BY SH. TARUN GOYAL AND THE ONLY REAL PURPOSE WAS TO PROVIDE ACCOMMODATION ENTRIES BY ACCEPTING CASH, DEPOSITING THE SAME IN THE BANK ACCOUNTS OF VARIOUS COMPANIES AND ISSUING CHEQUES/ DRAFTS TO THE NEEDY BENEFICIARIES. ACCORDINGLY SH. TARUN GOYAT WAS CONF RONTED ABOUT THE ABOVE AND HIS STATEMENT WAS RECORDED ON OATH. IT WA S ADMITTED BY HIM THAT HE WAS PROVIDING ACCOMMODATION ENTRIES AND HIS VARIOUS COMPANIES WERE USED FOR THIS PURPOSE. HE ALSO DESCRIBED THE MODUS-OPERA ND FOR PROVIDING THESE, ACCOMMODATION ENTRIES. HE CONFIRMED THAT THE ACCOUN TS OF M/S MAX WEIL SECURITIES PRIVATE LIMITED AND M/S ADONIS FINANCE L IMITED WERE MOSTLY USED FOR ACCOMMODATION ENTRIES. HE FURTHER ADMITTED THAT THE TOTAL AMOUNT OF ACCOMMODATION ENTRIES GIVEN BY HIM IN THE PRECEDING SIX YEARS WAS AROUND RS.30-35 CRORES. HE DETAILED THE NAMES O F CERTAIN COMPANIES/GROUPS WHICH HAD BEEN GIVEN ACCOMMODATION ENTRIES BY HIM. FROM THE ABOVE FACTS, IT IS CLEAR THAT THE ABOVE CO MPANIES HAD NO REAL WORK OR BUSINESS. THEIR REAL WORTH IS NOT SUCH THAT THEY MA Y BE ABLE TO CONTRIBUTE SUCH HUGE AMOUNTS. THESE-HAVE BEEN FLOATED WITH THE ONLY PURPOSE OF CONVERTING THE UNACCOUNTED FUNDS OF THE DESIRING PERSONS INTO SHAR E CAPITAL THROUGH ACCOMMODATION ENTRIES. THE ABOVE AMOUNTS OF RS. 2,4 9,00,000/- ARE IN FACTS THE UNACCOUNTED FUNDS OF THE ASSESSEE COMPANY. THES E ARE LIABLE TO BE TREATED AS INCOME OF THE ASSESSEE COMPANY UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. IT WOULD BE WORTHWHILE TO NOTE THAT THE ABOVE FACTS AR E SIMILAR TO THE CASE OF CIT VS. NOVA PROMOTERS & FINLEASE PRIVATE LIMITED REPORTED AT 342 ITR 369(DEL). THE OBSERVATION OF THE HON'BLE HIGH COURT ARE REPRODUCED AS BELOW: - 'THE FINDINGS OF THE TRIBUNAL CANNOT BE UPHELD AS T HEY ARE BASED ON IRRELEVANT MATERIAL OR HAVE BEEN ENTERED BY IGNORIN G RELEVANT MATERIAL. THE FINDING THAT THE SHARE APPLICATION MONIES HAVE COME THROUGH ACCOUNT PAYEE CHEQUES IS, AT BEST NEUTRAL. THE QUESTION REQUIRED A THOROUGH EXAMINATION AND NOT A SUPERFICIAL EXAMINATION. IF ANYTHING, IN THE LIGHT OF THE MATERIAL GATHERED BY THE INVESTIGATION WING ABOUT THE MODUS OPERANDI FOLLOWED BY THE ENTRY PROVIDERS, THE STATEMENTS OF MUKESH GUPTA AND RAJAN JASSAL THE PLEA THAT THE MONEY WAS SENT THROUGH BANKING CHANNE LS, LOSES ALL FORCE. THE TRIBUNAL OUGHT TO HAVE SEEN THAT THE MODUS OPERANDI INVOLVES RECEIPT BY THE 7 ENTRY PROVIDERS OF EQUIVALENT AMOUNT OF CASH FROM T HE ASSESSEE. THE FACTS THAT THE COMPANIES WHICH SUBSCRIBED TO THE SHARES W ERE BORNE ON THE FILE OF THE ROC IS AGAIN A NEUTRAL FACT. EVERY COMPANY INCO RPORATED UNDER THE COMPANIES ACT, 1956 HAS TO COMPLY WITH STATUTORY FO RMALITIES. THAT THESE COMPANIES WERE COMPLYING WITH SUCH FORMALITIE S DOES NOT ADD ANY CREDIBILITY OR EVIDENTIARY VALUE. IN ANY CASE, IT D OES NOT IPSO FACTO PROVE THAT THE TRANSACTIONS ARE GENUINE. THE FINDING THAT MU KESH GUPTA AND RAJAN JASSAL WERE INVOLVED WITH ONLY 4 OUT OF THE 16 COMP ANIES WHICH ADVANCED MONIES IS ONLY PART OF THE PICTURE. THEY HAD STATED BEFORE THE INVESTIGATION WING THAT THEIR OPERATIONS WERE ROUTED THROUGH 22 C OMPANIES WHOSE NAMES WERE ALSO GIVEN. FIFTEEN OUT OF THOSE 22 COMPANIES HAVE SUBSCRIBED TO THE SHARES OF THE ASSESSEE. THEREFORE EVEN IF THEY WERE NOT DIRECTORS OF 12 COMPANIES, THE FACTS REMAINS, AS ADMITTED BY THEM, THAT THEIR ENTRY PROVIDING OPERATIONS WERE CARRIED OUT THROUGH 22 CO MPANIES, 15 OF WHICH HAVE SUBSCRIBED TO THE SHARES OF THE ASSESSEE COMPA NY. THE TRIBUNAL HAS IGNORED THIS VITAL ASPECT AND HAS EXAMINED THE ISSU E RATHER SUPERFICIALLY. COMPLIANCE WITH STATUTORY NORMS AND REQUIREMENTS IS ONLY ONE ASPECT, BUT IN THE PRESENT CASE A DEEPER SCRUTINY WAS REQUI RED AND THE CAMOUFLAGE ADOPTED WAS THE PRIMARY ASPECT THAT REQU IRED ADJUDICATION. THIS ASPECT HAS BEEN IGNORED. BONAFID E AND GENUINENESS OF THE TRANSACTIONS WAS THE ISSUE,' '........................:...'......WE ARE AFRAID T HAT WE CANNOT APPLY THE RATIO TO A CASE, SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICE R IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHES THE PARTICUL ARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF -CONFESSED 'ACCOMMODATION ENTRY PROVIDERS', WHOSE BUSINESS IT IS TO HELP ASSE SSES BRING INTO THEIR BOOKS OF ACCOUNT THEIR UNACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION, AND THE ASSESSEE. THE RATIO IS INAPPLICABLE TO A CA SE, AGAIN SUCH AS THE PRESENT ONE, WHERE THE INVOLVEMENT OF THE ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDICATED BY VALID MATERIAL MADE AVAILABLE TO THE ASSESSING OFFICER AS A RESULT OF INVESTIGATIONS CARRIED OUT BY THE REVEN UE AUTHORITIES INTO THE ACTIVITIES OF SUCH 'ENTRY PROVIDERS'. THE EXISTENCE WITH THE ASSESSING OFFICER OF MATERIAL SHOWING THAT THE SHARE SUBSCRIP TIONS WERE COLLECTED AS PERT OF A PRE-MEDITATED PLAN - A SMOKESCREEN - CONCEIVED AND EXECUTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABILITY OF THE RATIO. IN OUR UNDERSTATING, THE RATIO IS ATTRACTED TO A C ASE WHERE IT IS SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHAR GED THE BURDEN PLACED UPON HIM UNDER SEC.68 TO PROVE AND ESTABLISH THE ID ENTITY AND 8 CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GEN UINENESS OF THE TRANSACTION. !N SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS AIL THE EVIDENCE O R MATERIAL IN HIS POSSESSION AND THEN COME FORWARD TO MERELY REJECT T HE SAME, WITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY INTO THE M ATERIAL PLACED BEFORE HIM. THE CASE BEFORE US DOES NOT FALL UNDER CATEGOR Y AND IT WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY.' AFTER GOING INTO THE FACTUAL MATRIX OF THE CASE AS ABOVE, THE HON'BLE HIGH COURT HAS HELD AS BELOW: 'IN THE CASE BEFORE US, NOT ONLY DID THE MATERIAL B EFORE THE ASSESSING OFFICER SHOW THE LINK BETWEEN THE ENTRY PROVIDERS A ND THE ASSESSEE- COMPANY, BUT THE ASSESSING OFFICER HAD ALSO PROVIDE D THE STATEMENTS OF MUKESH GUPTA AND RAJAN JASSAL TO THE ASSESSEE IN CO MPLIANCE WITH THE RULES OF NATURAL JUSTICE. OUT OF THE 22 COMPANIES W HOSE NAME FIGURED IN THE INFORMATION GIVEN BY THEM TO THE INVESTIGATION WING, 15 COMPANIES HAD PROVIDED THE SO-CALLED 'SHARE SUBSCRIPTION MONI ES' TO THE ASSESSEE. THERE WAS THUS SPECIFIC INVOLVEMENT OF THE ASSESSEE - COMPANY IN THE MODUS OPERANDI FOLLOWED BY MUKESH GUPTA AND RAJAN JASSAL. THUS, ON CRUCIAL FACTUAL ASPECTS THE PRESENT CASE STANDS ON A COMPLETELY DIFFERENT FOOTING FROM THE CASE OF THE CIT V OASIS HOSPITALIT IES P. LTD. (SUPRA). IN THE LIGHT OF THE ABOVE DISCUSSION, WE ARE UNABLE TO UPHOLD THE ORDER OF THE TRIBUNAL CONFIRMING THE DELETION OF TH E ADDITION OF RS.1,18,50,000/- MADE UNDER SECTION 68 OF THE ACT A S WELL AS THE CONSEQUENTIAL ADDITION OF RS.2,96,250/-. WE ACCORDI NGLY ANSWER THE SUBSTANTIAL QUESTIONS OF LAW IN THE NEGATIVE AND IN FAVOUR OF THE DEPARTMENT. THE ASSESSEE SHALL PAY COSTS WHICH WE A SSESS AT RS. 30,000/-. ' THE ABOVE FACTS HAVE BEEN ANALYSED IN DETAIL AND PE RUSED IN THE LIGHT OF THE DECISION OF THE HON'BLE DELHI HIGH COURT(SUPRA) . AFTER DETAILED CONSIDERATION OF THE SAME, I HAVE REASON TO BELIEVE THAT THE AMOUNT OF RS. 2,49,00,000/- WHICH WAS LIABLE TO BE TREATED AS THE INCOME OF THE ASSESSEE COMPANY HAD ESCAPED ASSESSMENT WITHIN THE MEANING O F SECTION 147 OF THE INCOME TAX ACT, 1961. ACCORDINGLY IT IS A FIT CASE FOR ISSUANCE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961. (RAVINDER MITTAL) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-IV, LUDHIANA. 9 4. THE ASSESSING OFFICER ACCORDINGLY ISSUED NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT WHICH WAS DULY SE RVED UPON ASSESSEE. THE ASSESSEE FILED RETURN ON 22.01. 2013 IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT DEC LARING LOSS OF RS. 1,50,37,116/-. THE ASSESSING OFFICER A FTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE P ASSED RE-ASSESSMENT ORDER UNDER SECTION 143(3)/147 DATED 11.03.2014 MAKING ADDITION OF RS. 3,74,00,000/- UND ER SECTION 68 OF THE ACT AS WELL AS ADDITION OF RS. 8, 41,500/- UNDER SECTION 69C OF THE ACT. 5. THE ASSESSEE CHALLENGED THE RE-OPENING OF THE ASSESSMENT AND ABOVE ADDITIONS BEFORE LD. CIT(APPEA LS). THE SUBMISSIONS OF THE ASSESSEE ARE INCORPORATED IN THE IMPUGNED ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAI NED THE UNILATERAL ADMISSION OF THIRD PARTY DURING THE COUR SE OF SEARCH CANNOT BY ITSELF LEAD TO THE CONCLUSION A TO THE ESCAPEMENT OF THE INCOME. THERE IS NO TANGIBLE/AFFIRMATIVE/DIRECT EVIDENCE TO THE EFFECT THAT INCOME OF THE ASSESSEE COMPANY HAS ESCAPED ASSESSME NT. THE FACT OF THE MATTER IS THAT A SUM OF RS. 3.74 CR WERE RECEIVED FROM VARIOUS COMPANIES ALLEGEDLY BELONGING TO THE ABOVE PERSONS WHICH STOOD DULY RECORDED IN THE BOOK S OF ACCOUNT AS AN AMOUNT RECEIVED FROM THE SAID ENTITIE S. THE DATE OF FILING OF THE ORIGINAL RETURN IN THE CASE O F ASSESSEE IS 27.09.2009 FOR ASSESSMENT YEAR UNDER APPEAL. TH E DATE OF SEARCH UNDER SECTION 132 OF THE ACT AT THE RESIDENCE/PREMISES OF SHRI TARUN GOYAL IS DATED 10 15.09.2008 AND THE DATE OF SEARCH AT THE PREMISES O F SHRI SURINDER KUMAR JAIN AND VIRENDER JAIN IS DATED 14.09.2010. THE ORIGINAL ASSESSMENT IN THE CASE OF ASSESSEE UNDER SECTION 143(3) FOR ASSESSMENT YEAR U NDER APPEAL WAS COMPLETED ON 30.12.2011. THE PERUSAL OF THE ORIGINAL ASSESSMENT RECORD WILL MAKE IT CLEAR THAT MATTER RELATING TO INCREASE IN SHARE CAPITAL WAS DULY DEAL T WITH, INVESTIGATED AND ENQUIRED INTO BY THE ASSESSING OFF ICER. MOREOVER, THE FACTS OF THE RESULTS OF SEARCH CONDUC TED AT THE PREMISES OF SHRI TARUN GOYAL & SHRI SURINDER KU MAR JAIN & SHRI VIRENDER KUMAR JAIN WAS WELL WITHIN THE KNOWLEDGE OF THE DEPARTMENT AT THE TIME OF ASSESSME NT COMPLETED IN THE CASE OF ASSESSEE. IN FACT, THE SE ARCH IN THE CASE OF SHRI TARUN GOYAL JAIN CONDUCTED ON 15.0 9.2008 I.E. MUCH BEFORE EVEN FILING OF THE ORIGINAL RETURN OF INCOME BY THE ASSESSEE. THUS, RE-ASSESSMENT PROCEEDINGS A RE NOT BASED ON ANY FRESH MATERIAL/TANGIBLE EVIDENCE OR AN Y OTHER INFORMATION. SINCE ASSESSING OFFICER EXAMINED THIS ISSUE AT THE ASSESSMENT STAGE, THEREFORE, RE-ASSESSMENT O N MERE CHANGE OF OPINION IS NOT JUSTIFIED. THE SUBMISSION S OF THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER FO R HIS COMMENTS IN WHICH THE ASSESSING OFFICER REITERATED THE SAME FACTS A HAVE BEEN NOTED IN THE RE-ASSESSMENT O RDER AND EXPLAINED THAT THE INVESTMENT CARRIED OUT AT DE LHI WAS NOT WITHIN THE KNOWLEDGE OF ASSESSING OFFICER AT MALERKOTLA. 6. THE LD. CIT(APPEALS), CONSIDERING THE MATERIAL O N RECORD NOTED THAT THE ASSESSING OFFICER RECEIVED SP ECIFIC 11 INFORMATION WITH REGARD TO ADVANCE OF RS. 2.49 CR I N THE FORM OF SHARE APPLICATION MONEY RECEIVED FROM FOUR PARTIES I.E. M/S CAMPARI FISCAL SERVICES (P) LTD. ( RS.62 L ACS) M/S TAURUS IRON & STEEL CO. P.LTD. ( RS. 1.05 CR) M/S T EJASVI INVESTMENTS (P) LTD. ( RS. 27 LACS) AND M/S THAR S TEEL (P) LTD. ( RS. 55 LACS) (TOTAL RS.2.49 CR). THE LD. CI T(APPEALS) NOTED THAT SHRI TARUN GOYAL AT THE TIME OF SEARCH H AS ADMITTED IN HIS STATEMENT THAT HE WAS IN BUSINESS O F PROVIDING ACCOMMODATION ENTRIES THROUGH VARIOUS COMPANIES FLOATED BY HIM AND AS SUCH BOGUS ENTRIES HAVE BEEN RECEIVED BY ASSESSEE AND ACCORDINGLY, CONFIRME D RE- OPENING OF THE ASSESSMENT. 7. THE LD. CIT(APPEALS) ALSO ON THE SAME REASONING CONSIDERED THE SHARE APPLICATION MONEY RECEIVED BY ASSESSEE TO BE BOGUS IN RESPECT OF 5 PARTIES I.E. 4 MENTIONED ABOVE AND M/S SHALINI HOLDINGS LTD. (RS. 1,25,00,000/-) AND THUS CONFIRMED THE ADDITION OF R S. 3,74,00,000/- AS WELL AS CONFIRMED THE CONSEQUENTIA L ADDITION OF RS. 8,41,500/- UNDER SECTION 69C OF THE ACT. 8. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS SUBMITTED THAT AT THE ORIGINAL ASSESSMENT PROCEEDIN GS, THE ASSESSING OFFICER ISSUED QUERY LETTERS REGARDING RE CEIPT OF SHARE APPLICATION MONEY THROUGH THE NOTICE DATED 13.12.2011 AND DATED 02.11.2011 AS WELL AS ISSUED N OTICE UNDER SECTION 142 CALLING FOR THE INFORMATION REGAR DING RECEIPT OF SHARE APPLICATION MONEY IN RESPECT OF TH E ABOVE 12 PARTIES UNDER REFERENCE. HE HAS SUBMITTED THAT ASSE SSING OFFICER ASKED THE ASSESSEE TO PROVE THE IDENTITY, C REDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION IN TH E MATTER AND ALSO DIRECTED TO FILE EVIDENCE REGARDING THE SAME. HE HAS SUBMITTED THAT ASSESSEE HAS SUBMITTED VARIOUS REPLIES BEFORE ASSESSING OFFICER, COPY OF T HE REPLY DATED 26.12.2011 AND 28.12.2011 ARE PLACED ON RECOR D IN WHICH THE ASSESSEE EXPLAINED THE IDENTITY OF THE SHAREHOLDERS, THEIR CREDIT WORTHINESS AND GENUINENE SS OF THE TRANSACTION. IT WAS ALSO EXPLAINED THAT THESE C OMPANIES HAVE CONFIRMED GIVING SHARE APPLICATION MONEY TO TH E ASSESSEE IN THEIR REPLIES DIRECTLY SUBMITTED TO THE ASSESSING OFFICER. THE TRANSACTIONS WERE CONDUCTED THROUGH BANKING CHANNEL. THE ASSESSEE RELIED UPON V ARIOUS DECISIONS IN SUPPORT OF THE CONTENTION OF RECEIPT O F GENUINE SHARE APPLICATION MONEY INCLUDING THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD. 216 CTR 195. THE ASSESSEE ALSO EXPLAINED THAT ALL THESE COMPANIES HAVE CONFIRMED THEIR TRANSACTIONS W ITH THE ASSESSEE AND ARE EXISTING COMPANIES AND REGISTERED WITH ROC. THE ASSESSEE COMPANY HAS FILED CONFIRMATION F ROM THESE COMPANIES, PROOF OF RETURN FILED, BANK ACCOUN T, PAN AND COMPANY MASTER DETAILS. THESE COMPANIES HAVE CONFIRMED MAKING INVESTMENT IN THE ASSESSEE COMPANY IN RESPONSE TO THE NOTICE UNDER SECTION 133(6) OF THE ACT. 8(I) THE LD. COUNSEL FOR THE ASSESSEE ALSO REFERR ED TO PB-128 TO 151 WHICH ARE THE COPIES OF THE CONFIRMAT ION, BANK ACCOUNTS, ITR OF THE FIVE INVESTEE COMPANIES W HICH 13 WERE FILED BEFORE ASSESSING OFFICER AT THE ORIGINAL ASSESSMENT STAGE. THE LD. COUNSEL FOR THE ASSESSEE , THEREFORE, SUBMITTED THAT ASSESSING OFFICER HAS EXA MINED THE ISSUE OF SHARE APPLICATION MONEY AT ORIGINAL AS SESSMENT STAGE AND ACCEPTED THE CLAIM OF ASSESSEE. HE HAS RE FERRED TO ORIGINAL ASSESSMENT ORDER DATED 30.12.2011 IN WH ICH THE ASSESSING OFFICER AT THE END OF THE ASSESSMENT YEAR HAS APPENDED A NOTE, INFORMATION WITH RESPECT TO INVES TMENT IN THE COMPANY HAS BEEN CONSIDERED AND PASSED ON T O THE RESPECTIVE ASSESSING OFFICER. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT ASSESSING OFFIC ER HAS ACCEPTED THE GENUINENESS OF THE SHARE APPLICATION M ONEY RECEIVED BY THE ASSESSEE FROM THESE FIVE COMPANIES, THEREFORE, IT IS A CASE OF MERE CHANGE OF OPINION L ATER ON AND WITHOUT BRINGING ANY MATERIAL ON RECORD. HE HA S REFERRED TO OBJECTIONS FILED BY ASSESSEE BEFORE ASS ESSING OFFICER IN RE-ASSESSMENT PROCEEDINGS (PB-24) CHALLE NGING THE RE-OPENING OF THE ASSESSMENT IN WHICH SAME FACT S HAVE BEEN PLEADED. THE ORDER OF THE ASSESSING OFFICER O N OBJECTIONS FILED BY ASSESSEE IS DATED 20.05.2013 CO PY OF WHICH IS FILED AT PAGE 34 OF THE PAPER BOOK IN WHIC H THE ASSESSING OFFICER HAS NOTED THE FACT THAT ASSESSMEN T UNDER SECTION 143(3) WAS COMPLETED KEEPING INTO CONSIDERA TION THE FACTS ON RECORD AT THAT TIME WHICH INCLUDED THE INFORMATION CALLED FROM THE SHARE APPLICANTS UNDER SECTION 133(6) OF THE INCOME TAX ACT. THE ASSESSING OFFICE R FURTHER NOTED THAT, HOWEVER, THE SEARCH IN THE CAS E OF SHRI TARUN GOYAL WAS NOT ON RECORD OF ASSESSING OFFICER AND WHATEVER REPLIES HAVE BEEN FILED BY ASSESSEE WOULD NOT 14 DISCLOSE THAT EVERYTHING WAS ALRIGHT. THEREFORE, OBJECTIONS OF THE ASSESSEE WERE REJECTED. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT THE ORDER OF TH E ASSESSING OFFICER ITSELF SHOWS THAT ASSESSING OFFIC ER AT THE ORIGINAL ASSESSMENT STAGE EXAMINED THE ENTIRE MATTE R IN ISSUE WITH REGARD TO ISSUE OF THE SHARE CAPITAL AND AMOUNT RECEIVED BY ASSESSEE FROM VARIOUS COMPANIES INCLUDI NG THE FIVE COMPANIES IN REFERENCE. THEREFORE, ON MERE CH ANGE OF OPINION, ASSESSING OFFICER SHOULD NOT REOPEN THE ASSESSMENT. HE HAS ALSO FILED COPY OF THE STATEMEN T OF SHRI TARUN GOYAL ON THE DAY OF SEARCH DATED 15.09.2 008 AND NEXT DATE 16.09.2008, COPY OF WHICH IS FILED AT PB-36 TO 51 AND SUBMITTED THAT SHRI TARUN GOYAL HAS NOT N AMED THE ASSESSEE COMPANY OF GIVING ANY ACCOMMODATION EN TRY. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON DECISI ON OF THE DELHI HIGH COURT IN THE CASE OF M/S SWAROVSKI INDIA PVT. LTD. V DCIT DATED 29.09.2015 IN WRIT PETITION NO. 1772/2014 IN WHICH IN PARA 16, HON'BLE DELHI HIGH C OURT HELD AS UNDER : 16. IN THE PRESENT CASE, THIS IS EXACTLY WHAT HAS H APPENED AS QUERIES AND ISSUES HAVE BEEN SPECIFICALLY RAISED AND ANSWERED B Y THE ASSESSEE IN THE ORIGINAL ASSESSMENT PROCEEDINGS. THUS, EVEN THOUGH THE ASSESSING OFFICER DID NOT MAKE ANY ADDITION IN THE ASSESSMENT ORDER, IT W OULD HAVE TO BE ACCEPTED THAT THE ISSUE WAS EXAMINED BUT THE ASSESSING OFFIC ER DID NOT FIND ANY GROUND OR REASON TO MAKE ANY ADDITION OR TO REJECT THE STAND OF THE ASSESSEE. CONSEQUENTLY, IT WILL HAVE TO BE PRESUMED THAT THE ASSESSING OFFICER HAD FORMED AN OPINION WHICH IS NOW SOUGHT TO BE CHANGED THROUGH THE RE- ASSESSMENT NOTICE, WHICH CANNOT BE PERMITTED. 9. THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED UPO N DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN 15 THE CASE OF CIT V SMT. PARAMJIT KAUR 311 ITR 38 IN WHICH IT WAS HELD, WHEN ASSESSING OFFICER FAILED TO EXAM INE INFORMATION RECEIVED BEFORE RECORDING SATISFACTION - INCOME HAS ESCAPED ASSESSMENT RE-ASSESSMENT PROCEEDINGS NOT VALID. 10. THE LD. COUNSEL FOR THE ASSESSEE EVEN ON MERIT S SUBMITTED THAT SINCE THE ASSESSEE FILED CONFIRMATIO N FROM ALL THE FIVE COMPANIES ALONGWITH THEIR BANK ACCOUNT S, IT RETURNS AND OTHER DOCUMENTS AND THESE COMPANIES IN RESPONSE TO THE INFORMATION CALLED BY THE ASSESSING OFFICER UNDER SECTION 133(6) CONFIRMED GIVING SHARE APPLICA TION MONEY TO THE ASSESSEE, THE INITIAL BURDEN ON ASSESS EE HAS BEEN DISCHARGED. TO PROVE GENUINE RECEIPT OF SHARE APPLICATION MONEY IN THE MATTER, HE HAS RELIED UPON RECENT ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF M/S L OTUS INTEGRATED TAXPARKS LTD. V DCIT IN ITA 1138/2014 AN D 1139/2014 DATED 01.10.2015 IN WHICH THE IDENTICAL ADDITION ON MERIT HAS BEEN DELETED BY FOLLOWING VAR IOUS JUDGEMENTS AS WELL AS CONSIDERING THE IDENTICAL EVI DENCES ON RECORD. HE HAS, THEREFORE, SUBMITTED THAT EVEN ON MERIT, ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE B Y THE AFORESAID JUDGEMENT OF THE TRIBUNAL, COPY OF WHICH IS PLACED ON RECORD. 11. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SHRI TARUN GOY AL WAS PROVIDING ACCOMMODATION ENTRIES BY FLOATING LARGE N UMBER OF COMPANIES. INVESTIGATION WING CONDUCTED ENQUIRY INTO 16 THE MATTER AND HAS COLLECTED MATERIAL TO SHOW THAT SHRI TARUN GOYAL HAS PROVIDED BOGUS ENTRIES TO THE ASSES SEE AND OTHERS. THEREFORE, RE-OPENING OF THE ASSESSMEN T IS JUSTIFIED ALONGWITH ADDITIONS ON MERIT. HE HAS SUB MITTED THAT ASSESSEE HAS NOT DISCHARGED INITIAL ONUS, THER EFORE, ADDITION IS JUSTIFIED AND RELIED UPON DECISIONS OF DELHI HIGH COURT IN THE CASES OF NOVA PROMOTERS & FINLEAS E 342 ITR 169 AND CIT V/S NAVODAYA CASTLES (P) LTD. 367 I TR 306. THE LD. DR PLACED ON RECORD LETTER DATED 6-8 TH APRIL,2009 ISSUED BY ADIT(INV) UNIT-IV, NEW DELHI T O CIT-I LUDHIANA WITH LIST OF BENEFICIARIES OF ACCOMMODATIO N ENTRIES PROVIDED BY SHRI TARUN GOYAL. 12. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE IMPUGNED ORDERS RE GARDING RE-OPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE ACT. HON'BLE FULL BENCH OF DELHI HIGH COURT IN THE CASE OF KELVINATOR OF INDIA LTD. 256 ITR 1 BY FOLLOWING CIR CULAR NO.549 OF CBDT HELD THAT ON MERE CHANGE OF OPINION OF AO CANNOT BE A GROUND FOR RE-ASSESSMENT AND THAT AMEND MENT OF SEC. 147 W.E.F. 1.4.89 HAS NOT ALTERED THE POSIT ION. HONBLE GUJRAT HIGH COURT IN THE CASE OF GARDEN SIL K MILLS P. LTD. 237 ITR 668 HELD THAT HOWEVER WIDE THE SCO PE OF TAKING ACTION U/S 148 OF IT ACT, IT DOES NOT CONFIR M JURISDICTION ON CHANGE OF THE INTERPRETATION OF A P ARTICULAR PROVISION EARLIER ADOPTED BY THE ASSESSING AUTHORIT Y. FOR COMING TO THE CONCLUSION THAT THERE HAS BEEN EXCESS IVE LOSS OR DEPRECIATION ALLOWANCE OR THAT THERE HAS BEEN UN DER ASSESSMENT OR ASSESSMENT AT A LOWER RATE OR FOR APP LYING 17 OTHER PROVISIONS OF EXPLANATION 2 TO SEC. 147, IT M UST BE ON MATERIAL AND IT SHOULD HAVE NEXUS FOR HOLDING SUCH OPINION CONTRARY TO WHAT HAS BEEN EXPRESSED EARLIER. EVEN A FTER THE AMENDMENT OF SEC. 147, MERE CHANGE OF OPINION DOES NOT CONFIRM JURISDICTION ON THE ITO TO INITIATE PROCEED ING FOR REASSESSMENT MERELY BY RESORTING TO EXPLANATION 1 T O SEC. 147. HONBLE CALCUTTA HIGH COURT IN THE CASE OF BE RGER PAINTS INDIA LTD. 245 ITR 648 HELD WHEN ANY PARTICU LAR ISSUE HAS BEEN CONSIDERED BY THE ITO AND CIT(A) AND WHEN THERE IS NO FAILURE TO DISCLOSE THE FACTS, THE REAS SESSMENT PROCEEDINGS ARE NOT VALID. HON'BLE SUPREME COURT IN THE CASE OF CIT VS. FORANER FRANCE, 264 ITR 566 HELD REASSESSMENT NOT ON BASIS OF MERE CHANGE OF OPINI ON LAW SAME BEFORE AND AFTER AMENDMENT BY DIRECT TAX L AWS. HON'BLE SUPREME COURT IN THE CASE OF INDIAN OIL CORPORATION, 159 ITR 956 HELD THAT NO CASE U/S 148 IS MADE OUT WHEN THE FACTS WERE KNOWN ALL ALONG WITH T O THE REVENUE WHILE MAKING THE ORIGINAL ASSESSMENT. HON'B LE SUPREME COURT IN THE CASE OF ASSOCIATED STONE INDUS TRY LTD., 224 ITR 560 HELD THAT THE ASSESSEE SHALL HAVE TO DISCLOSE ONLY THE PRIMARY FACTS. HON'BLE SUPREME CO URT IN THE CASE OF CIT V KELVINATOR OF INDIA LTD. 320 ITR 561 CONFIRMED THE DECISION OF THE DELHI HIGH COURT IN T HE CASE OF KELVINATOR OF INDIA LTD. HOLDING THAT THE CONCE PT OF CHANGE OF OPINION MUST BE TREATED AS AN IN-BUILT TEST TO CHECK THE ABUSE OF POWER. HON'BLE BOMBAY HIGH COU RT IN 18 THE CASE OF TITANOR COMPONENTS LTD. V ACIT 343 ITR 183 HELD AS UNDER : WHERE A REASSESSMENT IS SOUGHT TO BE MADE AFTER FOU R YEARS THE POWER CONFERRED BY SECTION 147 OF THE INCOME-TAX ACT, 196 1, DOES NOT PROVIDE AFRESH OPPORTUNITY TO THE ASSESSING OFFICER TO CORR ECT AN INCORRECT ASSESSMENT MADE EARLIER UNLESS THE MISTAKE IN THE A SSESSMENT SO MADE IS THE RESULT OF A FAILURE OF THE ASSESSEE TO FULLY AN D TRULY DISCLOSE ALL MATERIALS FACTS NECESSARY FOR ASSESSMENT . THERE IS A DIFFERENCE BETWEEN A WRONG CLAIM MADE BY AN ASSESSEE AFTER DISCLOSING A LL THE TRUE AND MATERIAL FACTS AND A WRONG CLAIM MADE BY THE ASSESSEE BY WI THHOLDING THE MATERIAL FACTS FULLY AND TRULY. IT IS ONLY IN THE LATTER CAS E THAT THE ASSESSING OFFICER WOULD BE ENTITLED TO PROCEED UNDER SECTION 147. HELD, ALLOWING THE PETITION, THAT THE ASSESSING OFF ICER HAD NOT RECORDED THE FAILURE ON THE PART OF THE PETITIONER TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT YEAR 19 97-98. WHAT WAS RECORDED WAS THAT THE PETITIONER HAD WRONGLY CLAIME D CERTAIN DEDUCTIONS WHICH HE WAS NOT ENTITLED TO. THE REASSESSMENT PROC EEDINGS INITIATED IN THE YEAR 2004 WERE NOT VALID. 13. HON'BLE DELHI HIGH COURT ALSO IN THE CASE OF M/ S SWAROVSKI INDIA P.LTD. (SUPRA) DID NOT APPROVE THE RE- OPENING OF THE ASSESSMENT ON MERE CHANGE OF OPINION WHEN THE ASSESSING OFFICER HAS RAISED A QUERY AND ANSWER ED BY THE ASSESSEE AT THE ORIGINAL ASSESSMENT PROCEEDINGS . HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V SMT. PARAMJIT KAUR 311 ITR 38 HELD AS UNDER : HELD, THAT THE ASSESSING OFFICER HAD NOT EXAMINED THE INF ORMATION RECEIVED FROM THE SURVEY CIRCLE BEFORE RECORDING HI S OWN SATISFACTION OF ESCAPED INCOME AND INITIATING REASSESSMENT PROCEEDI NGS. THE ASSESSING OFFICER HAD THUS ACTED ONLY ON THE BASIS OF SUSPICI ON AND IT COULD NOT BE SAID THAT IT WAS BASED ON BELIEF THAT THE INCOME CHARGEA BLE TO TAX HAD ESCAPED INCOME. THE ASSESSING OFFICER HAD TO ACT ON THE BAS IS OF 'REASONS TO BELIEVE' AND NOT ON 'REASONS TO SUSPECT'. THE TRIBUNAL RIGHT LY CONCLUDED THAT THE 19 ASSESSING OFFICER HAD FAILED TO INCORPORATE THE MAT ERIAL AND HIS SATISFACTION FOR REOPENING THE ASSESSMENT AND THEREFORE THE ISSU ANCE OF NOTICE UNDER SEC- TION 148 OF THE ACT FOR REASSESSMENT PROCEEDINGS WA S NOT VALID. 14. HON'BLE DELHI HIGH COURT IN THE CASE OF SIGNATU RE HOTELS P.LTD. V ITO & ANOTHER 338 ITR 51 HELD AS UN DER : HELD, ALLOWING THE PETITION, THAT THE RE-ASSESSMEN T PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME- TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODU CED MONEY AMOUNTING TO RS. 5 LAKHS DURING FINANCIAL YEAR 2002-03 AS STATED IN THE ANNEXURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED F ROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE REASONS DID NOT SATISFY THE REQUIREMENTS OF SEC TION 147 OF THE ACT. THERE WAS NO REFERENCE TO ANY DOCUMENT OR STATEMENT EXCEP T THE ANNEXURE. THE ANNEXURE COULD NOT BE REGARDED AS A MATERIAL OR EVI DENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, THE ASSESSING OFFICER DID NOT APPLY HIS OW N MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATI ON. THERE WAS NO DISPUTE THAT THE COMPANY, S, HAD A PAID-UP CAPITAL OF RS. 9 0 LAKHS AND WAS INCORPORATED ON JANUARY 4, 1989, AND WAS ALSO ALLOT TED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER, 2001. THUS, IT COULD NOT BE HE LD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WER E LIABLE TO BE QUASHED. 15. IT IS NOT IN DISPUTE THAT ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY FROM MANY COMPANIES/PARTIES WHICH ARE RECORDED IN THE REASONS FOR RE-OPENING OF THE ASSES SMENT IN A SUM OF RS. 7.61 CR (APPROX). HOWEVER, THE ASSESS ING OFFICER IN THE REASONS FOR RE-OPENING OF THE ASSESS MENT HAS CONSIDERED FOUR PARTIES I.E. M/S CAMPARI FISCAL SER VICES PVT. LTD., M/S TAURUS IRON & STEEL CO. P.LTD., M/S TEJASVI INVESTMENTS (P) LTD. AND M/S THAR STEEL PVT. CO. FO R CONSIDERING INVESTMENT IN A SUM OF RS.2.49 CR. HOW EVER, 20 AT THE TIME OF PASSING OF THE ASSESSMENT ORDER, ASS ESSING OFFICER MADE ADDITION OF RS.3.74 CR UNDER SECTION 6 8 OF THE INCOME TAX ACT BY INCLUDING M/S SHALINI HOLDINGS FO R MAKING INVESTMENT IN ASSESSEE COMPANY IN A SUM OF R S. 1.25 CR. THE LD. COUNSEL FOR THE ASSESSEE HAS PLACE D ON RECORD COPIES OF THE ENQUIRY LETTERS ISSUED BY THE ASSESSING OFFICER AT THE ORIGINAL ASSESSMENT STAGE IN WHICH T HE ASSESSING OFFICER CALLED FOR THE DETAILS OF ADDITIO NS IN SHARE CAPITAL MONEY BY GIVING THEIR NAMES AND COMPL ETE ADDRESSES OF THE PERSONS ALONGWITH EVIDENCES ON THE IR IDENTITY, CREDIT WORTHINESS, COPIES OF THEIR BANK S TATEMENTS AND THEIR SOURCES. THE ASSESSEE SUBMITTED HIS REPL IES BEFORE ASSESSING OFFICER AT ASSESSMENT STAGE IN WHI CH THE ASSESSEE CLEARLY STATED THAT ASSESSEE HAS ALREADY F ILED COPIES OF THE CONFIRMATIONS OF ALL THESE SHARE APPL ICANT COMPANIES CONFIRMING GIVING OF SHARE APPLICATION MO NEY TO THE ASSESSEE, COPY OF PROOF OF FILING OF INCOME TAX RETURN, COPY OF THEIR BANK STATEMENTS, COPY OF PAN AND COMP ANY MASTER DETAILS. IT WAS ALSO EXPLAINED THAT ALL THE SE ENTRIES ARE EXISTING AND HAVE BEEN REGISTERED WITH THE REGI STRAR OF CMPANIES. COPIES OF ALL THESE EVIDENCES ARE FILED IN THE PAPER BOOK IN RESPECT OF ALL THESE FIVE PARTIES/COM PANIES AT PAGES 128-151 OF THE PAPER BOOK. IN THESE EVIDENCE S, THE SHARE APPLICANT COMPANIES HAVE CONFIRMED MAKING INVESTMENT IN ASSESSEE COMPANY THROUGH THEIR BANKIN G CHANNEL AND THE PARTICULARS HAVE BEEN DISCLOSED IN THEIR RETURN OF INCOME. THE ASSESSING OFFICER CALLED FOR INFORMATION FROM ALL THESE COMPANIES DIRECTLY UNDER SECTION 133(6) OF THE INCOME TAX ACT AND ALL THESE SHARE AP PLICANT 21 COMPANIES CONFIRMED GIVING OF SHARE APPLICATION MON EY TO THE ASSESSEE IN THEIR REPLIES TO THE NOTICE UNDER S ECTION 133(6) OF THE INCOME TAX ACT. THE ASSESSING OFFICE R, THUS, DID NOT DOUBT THE IDENTITY OF THE SHARE APPLICANTS, THEIR CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIO N IN THE MATTER. THE COPY OF THE ORIGINAL ASSESSMENT ORDER UNDER SECTION 143(3) DATED 30.12.2011 IS FILED AT PAGE 1- 10 OF THE PAPER BOOK. IT WOULD REVEAL THAT AT THE END OF THE ASSESSMENT ORDER, ASSESSING OFFICER HAS APPENDED A NOTE TO THE ASSESSMENT ORDER THAT INFORMATION WITH RESPECT TO INVESTMENTS IN THE COMPANY HAS BEEN CONSIDERED AND PASSED ON TO THE RESPECTIVE ASSESSING OFFICER. IT W OULD INDICATE THAT ASSESSING OFFICER WAS SATISFIED WITH THE GENUINENESS OF THE SHARE APPLICATION MONEY RECEIVED BY ASSESSEE THROUGH BANKING CHANNEL. THUS, THE SAME IS SUE COULD NOT BE REOPENED IN RE-ASSESSMENT PROCEEDINGS BECAUSE THERE IS NO FAILURE ON THE PART OF THE ASSE SSEE TO DISCLOSE ALL THE RELEVANT FACTS AND MATERIAL TO THE ASSESSING OFFICER IN THEIR RETURN AS WELL AS AT THE ASSESSMEN T STAGE. THE LETTER DATED 6/8 TH APRIL,2009 OF ADIT (INV ) NEW DELHI WAS RECEIVED BY CIT-I LUDHIANA AND AS SUCH WAS PART OF RECORD EVEN BEFORE ASSESSEE FILED RETURN ON 27.09.2 009. 15(I) IT MAY ALSO BE NOTED HERE THAT ORIGINAL RET URN OF INCOME WAS FILED ON 27.09.2009 AND THE SEARCH UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE CASE OF SHRI TARUN GOYAL ON 15.09.2008. THE ASSESSMENT IN THE CA SE OF ASSESSEE WAS COMPLETED ON 30.12.2011, THEREFORE, TH E INFORMATION REGARDING ACCOMMODATION ENTRY PROVIDED BY 22 SHRI TARUN GOYAL WAS WELL WITHIN THE KNOWLEDGE OF T HE INCOME TAX DEPARTMENT BUT THIS FACT WAS NOT TAKEN I NTO CONSIDERATION AGAINST THE ASSESSEE BECAUSE THE ASSE SSING OFFICER ACCEPTED THE GENUINENESS OF THE SHARE APPLI CATION MONEY IN THE CASE OF ASSESSEE. IT MAY ALSO BE NOTE D HERE THAT COPIES OF THE STATEMENTS OF SHRI TARUN GOYAL R ECORDED ON THE DATE OF SEARCH ON 15.09.2008 AND 16.09.2008 ARE FILED ON RECORD IN WHICH SHRI TARUN GOYAL HAS NOT M ADE ANY SPECIFIC STATEMENT AGAINST THE ASSESSEE COMPANY FOR PROVIDING ACCOMMODATION ENTRY TO THE ASSESSEE COMPA NY. EVEN THE ASSESSING OFFICER HAS NOT EXAMINED THE INFORMATION RECEIVED FROM INVESTIGATION WING BEFORE RECORDING THE REASONS FOR RE-OPENING OF THE ASSESSM ENT. THEREFORE, THERE WAS NOTHING ON RECORD TO JUSTIFY R E- OPENING OF THE ASSESSMENT ON THE BASIS OF THESE MAT ERIALS WHICH WERE WITHIN THE KNOWLEDGE OF THE ASSESSING OF FICER. THUS, THE ASSESSING OFFICER ACTED MERELY ON SUSPICI ON WHICH WOULD NOT PROVE TO BE A CASE OF ESCAPEMENT OF INCOME. IT IS ADMITTED FACT THAT ASSESSEE, AT THE STAGE OF RE-OPENING OF THE ASSESSMENT, OBJECTED TO THE RE-OP ENING OF THE ASSESSMENT AND THE ASSESSING OFFICER PASSED THE ORDER ON 20.05.2013, COPY OF WHICH IS FILED AT PAGE 34 OF THE PAPER BOOK IN WHICH THE ASSESSING OFFICER HAS SPECI FICALLY NOTED THAT THE ORIGINAL ASSESSMENT WAS COMPLETED ON THE BASIS OF EVIDENCES AND MATERIAL ON RECORD WHICH INC LUDED INFORMATION CALLED FROM THE LENDER COMPANY UNDER SE CTION 133(6) OF THE INCOME TAX ACT. IT WOULD, THEREFORE, SHOW THAT ASSESSING OFFICER AT THE ORIGINAL ASSESSMENT, APPLIED HIS MIND TO THE EVIDENCES AND MATERIAL ON RECORD IN CLUDING 23 LETT3ER OF ADIT(INV) NEW DELHI AND THE INVESTIGATIO N REVEALED THAT ASSESSEE COMPANY RECEIVED GENUINE SHA RE CAPITAL MONEY FROM THESE FIVE COMPANIES. THERE WAS , THUS, NO FRESH OR TANGIBLE MATERIAL WITHIN THE KNOWLEDGE OF ASSESSING OFFICER AT THE TIME OF RE-OPENING OF ASSE SSMENT. IT IS, THEREFORE, A CASE OF MERE CHANGE OF OPINION FOR RE- OPENING OF THE ASSESSMENT ON THE ISSUE OF SHARE APP LICATION MONEY WHICH WAS ALREADY EXAMINED AND INVESTIGATED I NTO BY THE ASSESSING OFFICER AT THE ORIGINAL ASSESSMENT STAGE. NO SPECIFIC MATERIAL WAS PRO VIDED BY THE INVESTIGA TION WING TO SHOW HOW THE ASSESSEE HAS RECEIVED ACCOMMODATION ENTRY FROM SHRI TARUN GOYAL. IN THE STATEMENT RECORDED ON THE DATE OF SURVEY DID NOT IN DICATE IF ASSESSEE RECEIVED ANY ACCOMMODATION ENTRY FROM SHRI TARUN GOYAL. IT MAY ALSO BE NOTED HERE THAT THE AS SESSING OFFICER MIGHT NOT HAVE RECEIVED ANY FRESH INFORMATI ON FROM THE INVESTIGATION WING AGAINST THE ASSESSEE BECAUSE IN THE REASONS FOR RE-OPENING OF THE ASSESSMENT, ASSESSING OFFICER HAS REFERRED TO THE STUDY OF THE ASSESSMENT RECORD OF M/S KISCO CASTINGS PVT. LTD. FROM WHERE IT WAS REVEALED THAT INVESTIGATION WING HAS MADE SAME REFERENCE AGAINST THE ASSESSEE BUT THERE IS NO DIRECT REFERENCE OF RECEIP T OF ANY ACCOMMODATION ENTRY BY THE ASSESSEE COMPANY. 16. CONSIDERING THE ABOVE DISCUSSION, IT IS CLEAR T HAT THE ASSESSING OFFICER MERELY ACTED ON SUSPICION AGAINST THE ASSESSEE. IT IS A MERE CASE OF CHANGE OF OPINION A ND THE ASSESSING OFFICER HAS NOT EXAMINED ANY MATERIAL AGA INST THE ASSESSEE FOR RE-OPENING OF THE ASSESSMENT. THE ASS ESSING 24 OFFICER WAS HAVING NO SPECIFIC EVIDENCE OR MATERIAL AGAINST THE ASSESSEE FOR RE-OPENING OF THE ASSESSMENT. NO FRESH MATERIAL HAS BEEN BROUGHT ON RECORD TO JUSTIFY RE-OPENING OF THE ASSESSMENT, THEREFORE, ASSESSING OFFICER HAS NOT VA LIDLY ASSUMED JURISDICTION UNDER SECTION 148 OF THE INCOM E TAX ACT FOR RE-OPENING OF THE ASSESSMENT IN THE MATTER. TH E DECISIONS RELIED UPON BY LD. DR ARE NOT APPLICABLE TO THE FAC TS AND CIRCUMSTANCES OF THE CASE. WE, ACCORDINGLY, SET AS IDE THE RE- OPENING OF THE ASSESSMENT AND QUASH THE IMPUGNED OR DERS UNDER SECTION 147/148 OF THE INCOME TAX ACT. 17. IN VIEW OF THE ABOVE, THERE IS NO NEED TO CONSI DER THE ISSUE OF ADDITIONS ON MERIT IN DETAIL, HOWEVER, THE EVIDENCES ON RECORD, AS NOTED ABOVE AND THE SHARE APPLICANT COMP ANIES IN THEIR REPLY CONFIRMED GIVING SHARE APPLICATION MONE Y TO THE ASSESSEE BEFORE ASSESSING OFFICER CLEARLY SHOW THAT THE INITIAL BURDEN ON ASSESSEE HAS BEEN DISCHARGED TO PROVE THE IDENTITY OF THE SHARE APPLICANT COMPANIES, THEIR CREDIT WORTHIN ESS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THE IDENTICAL ISSUE WAS CONSIDERED BY THIS BENCH IN THE CASE OF M /S LOTUS INTEGRATED TAXPARKS LTD. V DCIT 9SUPRA) IN WHICH IN PARA 10 TO 13, SIMILAR ADDITION HAS BEEN DELETED. THE FINDING S OF THE TRIBUNAL IN PARA 10 TO 13 OF THIS ORDER ARE REPRODU CED AS UNDER 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS ALLOCATED 740000 SHAR ES TO M/S GLACIS INVESTMENT LIMITED AT PREMIUM. THE ASSES SING OFFICER HAS NOT DISPUTED THE SHARES ISSUED TO THIS C OMPANY AT PREMIUM VALUE. NO INVESTMENTS HAVE BEEN MADE IN TH IS REGARD. THE LD. DR ALSO ADMITTED THAT THE REASONS FOR ISSUING THE SHARES TO THE SUBSCRIBER COMPANY AT PAID UP VAL UE AND AT 25 PREMIUM HAVE NOT BEEN INVESTIGATED BY THE ASSESSING OFFICER AT ASSESSMENT STAGE. THE ASSESSEE HAS FILE D COPY OF THE CERTIFICATE OF INCORPORATION OF M/S GLACIS INVE STMENT LIMITED WHICH IS A REGISTERED COMPANY IN REPUBLIC O F MAURITIUS. THE LD. CIT(APPEALS) CONSIDERING THE SUB SCRIBER COMPANY TO BE A COMPANY BEING LEGAL ENTITY HELD THA T THE IDENTITY OF THE SHAREHOLDER IS PROVED. THE ASSESSE E ALSO FILED COPY OF THE TAX RESIDENCE CERTIFICATE ISSUED BY MAURITIUS REVENUE AUTHORITIES, CERTIFYING THAT M/S GLACIS INVESTMENT LIMITED INCORPORATED IN MAURITIUS IS A C OMPANY RESIDENT IN MAURITIUS FOR INCOME TAX PURPOSES UNDER THE INCOME TAX ACT. THE ASSESSEE ALSO PRODUCED THE CER TIFICATE OF RESERVE BANK OF INDIA IN WHICH THE RESERVE BANK OF INDIA BY REFERRING TO LETTER OF THE ASSESSEE HAS REFERRED TO THE TRANSACTION HELD BETWEEN ASSESSEE AND M/S GLACIS INVESTMENT LIMITED, MAURITIUS FOR ISSUING THE SHARE S AT PAID UP VALUE AND PREMIUM FOR 740000 EQUITY SHARES WERE RECORDED BY THE RESERVE BANK OF INDIA IN THEIR RECO RDS. THE LD. DR SUBMITTED THAT THE NAME OF M/S GLACIS INVEST MENT LIMITED IS WRONGLY RECORDED IN THE RESERVE BANK OF INDIA CERTIFICATE. IT APPEARS TO BE TYPOGRAPHICAL ERROR AND IS NOT HAVING MUCH SIGNIFICANCE ON THE SAME BECAUSE THE AS SESSEE HAS ISSUED 740000 EQUITY SHARES TO THE SHAREHOLDER COMPANY WHICH IS THE SAME AND ONLY TRANSACTION CARR IED OUT BETWEEN THE ASSESSEE AND THE SHAREHOLDER COMPANY. THE ASSESSEE ALSO FILED COPY OF THE SHARE CERTIFICATE T O SHOW THAT ACTUAL SHARE CERTIFICATES 740000 IN NUMBER HAVE BEE N ISSUED TO THE SHAREHOLDER COMPANY. THE SHAREHOLDER COMPANY HAS ALSO ISSUED A CONFIRMATORY LETTER IN FA VOUR OF THE ASSESSEE CERTIFYING THAT M/S GLACIS INVESTMENT LIMITED HAS INVESTED RS. 3,70,00,000/- FOR ALLOTMENT OF 740 000 EQUITY SHARES IN ASSESSMENT YEAR UNDER APPEAL. THE REPUBLIC OF MAURITIUS ALSO CERTIFIED THAT GLOBAL BU SINESS LICENSE UNDER FINANCIAL SERVICES ACT HAVE BEEN GRAN TED TO M/S GLACIS INVESTMENT LIMITED. THE BALANCE SHEET O F THE SHAREHOLDER COMPANY M/S GLACIS INVESTMENT LIMITED I S ALSO FILED ON RECORD WHICH IS ADMITTED AS ADDITIONAL EVI DENCE WHICH PROVED THAT THE PRINCIPAL ACTIVITY OF THIS CO MPANY IS 26 THAT OF INVESTMENT HOLDING AND WAS HAVING THE SUFFICIENT FUNDS/ASSETS TO MAKE INVESTMENT IN ASSES SEE COMPANY AND THAT THE INVESTMENT MADE IN ASSESSEE COMPANY HAVE BEEN CERTIFIED IN THE BALANCE SHEET. THE BANK STATEMENT OF THE ASSESSEE IS ALSO FILED ON REC ORD WHICH SUPPORT THE CONTENTION OF THE ASSESSEE THAT R S. 3,70,00,000/- HAVE BEEN INVESTED BY SHAREHOLDER COMPANY IN ASSESSEE COMPANY THROUGH TRANSFER ENTRIE S I.E. BANKING CHANNELS. THE DECISIONS RELIED UPON B Y LD. COUNSEL FOR THE ASSESSEE CLEARLY SUPPORT THE CONTEN TION OF THE ASSESSEE THAT ASSESSEE HAS PROVED THE CREDIT WORTHINESS OF THE SHAREHOLDER COMPANY AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THE DOCUMENTARY EVIDENCES PRODUCED ON RECORD ALSO SUPPO RT THE CONTENTION OF ASSESSEE THAT THE SHAREHOLDER COMPANY M/S GLACIS INVESTMENT LIMITED, MAURITIUS HA S MADE INVESTMENT IN ASSESSEE COMPANY IN 740000 EQUITY SHARES BY INVESTING RS. 3,70,00,000/-. THE SHAREHOLDER COMPANY ALSO FILED CONFIRMATION TO THAT EFFECT WHICH IS SUPPORTED BY TAX RESIDENCE CERTIFIC ATE, ALLOTMENT OF SHARE CERTIFICATES AND GLOBAL BUSINESS LICENSE GRANTED BY REPUBLIC OF MAURITIUS AND THE BA NK STATEMENT OF THE ASSESSEE. 10(I) IN THE CASE OF LOVELY EXPORTS PVT. LTD. (SUPRA), HON'BLE SUPREME COURT HELD THAT IF 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 PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT THIS AMOUNT OF SHARE MONEY CANNOT BE REGARDED AS UNDISCLOSED INCOME UNDER SECTION 68 OF THE ACT OF THE ASSESSEE COMPANY. THE OTHER DECISIONS RELIED UPON BY LD. COUNSEL FOR THE ASSESSEE SUPPORT T HE 27 FACT THAT ASSESSEE HAS RECEIVED GENUINE SHARE APPLICATION MONEY FROM THE SHAREHOLDER COMPANY. 10(II) THE ITAT INDORE BENCH IN THE CASE OF PEOPLES GENERAL HOSPITAL LTD. IN ITA 57/2007 VIDE ORDER DATED 28.09.2007 CONSIDERING THE IDENTICAL ISSUE HELD IN PARA 11 TO 12.2 AS UNDER : 11. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND MATERIA L ON RECORD. WE HAVE BESTOWED OUR CAREFUL CONSIDERATION AN D DO NOT FIND ANY JUSTIFICATION TO INTERFERE IN THE ORDER OF THE LD. CIT (A). 11.1 FULL BENCH OF DELHI HIGH COURT IN THE CASE OF CIT VS. SOPHIA FINANCE LTD. 205 ITR 98 HELD UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961, THE INCOME-TAX OFFICER HAS JURI SDICTION TO MAKE ENQUIRIES WITH REGARD TO THE NATURE AND SOURCE OF A SUM CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND IT IS IMMATE RIAL AS TO WHETHER THE AMOUNT SO CREDITED IS GIVEN THE COLOUR O F A LOAN OR A SUM REPRESENTING SALE PROCEEDS OR EVEN RECEIPT OF SHARE APPLICATION MONEY. THE USE OF THE WORDS ANY SUM FOUND CREDITED IN THE BOOKS. SECTION 68 INDICATES THAT THE SECTION IS VERY WIDEL Y WORDED AND THE INCOME TAX OFFICER IS NOT PRECLUDED FROM MAKING AND ENQUIRY AS TO THE TRUE NATURE AND SOURCE OF A SUM CREDITED IN THE ACCO UNT BOOKS EVEN IF IT IS CREDITED AS RECEIPT OF SHARE APPLICATION MONEY . THE MERE FACT THAT THE (ASSESSEE) COMPANY CHOOSE TO SHOW THE RECEIPT O F THE MONEY AS CAPITAL DOES NOT PRELUDE THE INCOME-TAX OFFICER FROM G OING INTO THE QUESTION WHETHER THIS IS ACTUALLY SO. WHERE, THEREFORE, AN ASSESSEE- COMPANY REPRESENTS THAT IT HAD ISSUED SHARES ON THE RECEIPT OF SHARE APPLICATION MONEY THEN THE AMOUNT SO RECEIVED WOULD BE CREDITED IN THE BOOKS OF ACCOUNT OF THE COMPANY. THE INCOME-TAX OFFICER WOULD BE ENTITLED, AND IT WOULD INDEED BE HIS DUTY, TO ENQUIRE WHE THER THE ALLEGED SHARE HOLDERS DO IN FACT EXIST OR NOT. IF THE S HARE HOLDERS EXIST THEN, POSSIBLY, NO FURTHER ENQUIRY NEED BE MADE. BUT I F THE INCOME-TAX OFFICER FINDS THAT THE ALLEGED SHAREHOLDERS DO NOT EXI ST THEN, IN EFFECT, IT WOULD MEAN THAT THERE IS NO VALID ISSUANCE OF SHAR E CAPITAL. SHARES CANNOT BE ISSUED IN THE NAME OF NON-EXISTING PERSONS . THE USE OF THE WORDS MAY BE CHARGED IN SECTION 68 CLEARLY INDICAT ES THAT THE INCOME-TAX OFFICER WOULD THEN HAVE THE JURISDICTION, IF THE FACTS SO WARRANT, TO TREAT SUCH A CREDIT TO BE THE INCOME OF THE AS SESSEE. 28 IF THE SHARE HOLDERS ARE IDENTIFIED AND IT IS ESTA BLISHED THAT THEY HAVE INVESTED MONEY IN THE PURCHASE OF SHARES, THEN THE AMOUNT RECEIVED BY THE COMPANY WOULD BE REGARDED AS A CAPITA L RECEIPT AND TO THAT EXTENT THE OBSERVATIONS IN CIT V. STELLAR IN VESTMENT LTD., [1991] 192 ITR 287 (DELHI), ARE CORRECT; BUT THE OBSERVATION S IN THAT CASE TO THE EFFECT THAT EVEN IF THE SUBSCRIBERS TO THE CAPIT AL WERE NOT GENUINE UNDER NO CIRCUMSTANCE COULD THE AMOUNT OF SHARE CAP ITAL BE REGARDED AS UNDISCLOSED INCOME OF THE [COMPANY] ARE NOT. M.P. HIGH COURT IN THE CASE OF CIT VS. DHAR ISPAT (P ) LTD., 134 TAX MAN 747 (180 CTR 491) , HELD SEC. 68 IS APPLICABLE IN RESPECT OF SHARE APPLICATION MONEY; HOWEVER, THE QUES TION OF GENUINENESS OF THE ENTRIES REGARDING SHARE APPLICAT ION MONEY IS A QUESTION OF FACT TO BE DECIDED BY THE ASSESSEE AUTHORITY ON THE BASIS OF EVIDENCE AVAILABLE ON RECORD. DELHI HIGH COURT IN THE CASE OF CIT VS. STELLAR INV ESTMENT LTD., 192 ITR 287 , HELD THAT, EVEN IF IT BE ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL WERE NOT G ENUINE, UNDER NO CIRCUMSTANCES COULD THE AMOUNT OF SHARE CAP ITAL BE REGARDED AS UNDISCLOSED INCOME OF THE COMPANY. NO QUE STION OF LAW AROSE OUT OF THE TRIBUNALS ORDER. HON'BLE SUPREME COURT IN THE CASE OF CIT VS. STELLA R INVESTMENT LTD., 251 ITR 263 , HELD WE HAVE READ THE QUESTION WHICH THE HIGH COURT ANSWERED AGAINST THE REVENUE. W E ARE IN AGREEMENT WITH THE HIGH COURT. PLAINLY, THE TRIBUNAL CAME TO A CONCLUSION ON FACTS AND NO INTERFERENCE IS CALLED FOR. THE APPEAL IS DISMISSED. NO ORDER AS TO COSTS. DELHI HIGH COURT IN THE CASE OF CIT VS. DOLPHIN CA NPACK LTD., 283 ITR 190 , HELD IN ITS RETURN FOR THE ASSESSMENT YEAR 1998-99, THE ASSESSEE CLAIMED TO HAVE RECEIVED SHARE APPLICATION MONEY OF RS. 62 LAKHS. THE ASSESSING OFFI CER REJECTED THE EXPLANATION OF THE ASSESSEE AND ADDED THE AMOUNT TO THE TAXABLE INCOME OF THE ASSESSEE. THE TRIBUNAL FO UND THAT THE ASSESSEE HAD FURNISHED COMPLETE DETAILS TO THE AS SESSING OFFICER REGARDING THE TRANSACTIONS IN QUESTION, WHIC H INCLUDED CONFIRMATION DETAILS OF BANK ACCOUNTS AND THE PERMAN ENT ACCOUNT NUMBERS OF THE PARTIES IN WHOSE FAVOUR THE SHARE CAPITAL WAS SUBSCRIBED. THE TRIBUNAL ALSO NOTED THAT ALL TH E PAYMENTS WERE RECEIVED BY THE ASSESSEE BY CHEQUES AN D THAT THE ASSESSEE HAD, IN THE PROCESS, FULLY DISCHARGED THE ON US THAT LAY UPON IT FOR PROVING THE IDENTITY OF THE SUBSCRIBE RS AND THE GENUINENESS OF THE TRANSACTIONS. ON THAT BASIS, IT DELE TED THE ADDITION MADE BY THE AUTHORITIES BELOW. ON APPEAL TO TH E HIGH COURT: HELD, DISMISSING THE APPEAL, THAT IN THE ABSENCE OF ANY PERVERSITY IN THE VIEW TAKEN BY THE TRIBUNAL OR ANYTH ING TO ESTABLISH CONCLUSIVELY THAT THE FINDING REGARDING THE 29 GENUINENESS OF THE SUBSCRIBERS AND THE TRANSACTIONS SUFFERED FROM ANY IRRATIONALITY, NO SUBSTANTIAL QUESTION OF LAW A ROSE FROM THE ORDER OF THE TRIBUNAL. THE DELETION OF THE AMO UNT WAS JUSTIFIED. GAUHATI HIGH COURT IN THE CASE OF CIT VS. DOWN TO WN HOSPITAL PVT. LTD., 267 ITR 439 , HELD THAT REGARDING AMOUNTS RECEIVED AS SHARE APPLICATION MONEYS, THE TRIBUNAL HAD GIVEN CLEAR FINDING AFTER APPRECIATION OF THE MATERIAL ON RE CORD THAT THE ASSESSEE HAD FILED THE DETAILS REGARDING THE SOURC E OF FUNDS OF SHARES AND THEIR INCOME TAX FILE NOS. BEFORE AO. AC CORDING TO THE TRIBUNAL THE ASSESSEE HAD ALSO SUBMITTED BEFORE TH E AO THE CONFIRMATION FROM THE CREDITORS WHERE FULL ADDRESSES, INCOME TAX NO. ETC. WERE GIVEN. THE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITION. RAJASTHAN HIGH COURT IN THE CASE OF SHREE BARKHA SYNTHETICS LTD. VS. CIT, 283 ITR 377 , HELD IF THE TRANSACTIONS ARE MADE THROUGH BANKING CHANNELS AND ONCE THE EXIST ENCE OF PERSONS BY NAME IN THE SHARE APPLICATIONS IN WHOSE NAME THE SHARES HAVE BEEN ISSUED IS SHOWN, THE ASSESSEE-COMPANY CANNOT BE HELD RESPONSIBLE TO PROVE WHETHER THAT PERS ON HIMSELF HAS INVESTED THE SAID MONEY OR SOME OTHER PE RSON HAD MADE INVESTMENT IN THE NAME OF THAT PERSON. THE BURD EN THEN SHIFTS ON THE REVENUE TO ESTABLISH THAT SUCH INVEST MENT HAS COME FROM THE ASSESSEE-COMPANY ITSELF. DELHI HIGH COURT IN THE CASE OF CIT VS. DWARKADHIS H FINANCIAL SERVICES,148 TAXMAN 54 , HELD THE ASSESSEE HAD PRODUCED ALL RELEVANT EVIDENCE TO ESTABLISH THAT THE S HARE APPLICATION MONEY RECEIVED BY THE ASSESSEE WAS A RE SULT OF GENUINE TRANSACTION. IT HAD BEEN NOTICED EVEN IN TH E IMPUGNED ORDER THAT EVIDENCE WAS PRODUCED BY THE ASSESSEE IN CLUDING AFFIDAVITS, COPIES OF THE SHARE APPLICATION FORMS, COP IES OF THE CONFIRMATION FROM THE APPLICANT-COMPANIES, COPIES OF B OARD OF DIRECTORS RESOLUTION APPROVING SUCH TRANSACTIONS AS WELL AS CHEQUE NUMBER, BRANCH AND ADDRESS OF THE BANK THROUGH WH ICH THE INVESTMENT WAS MADE. IT WAS ALSO NOTICED THAT THE ASSESSING OFFICER HIMSELF HAD NOTICED IN HIS ORDER THAT THE APPLICANT-S HARE HOLDERS WERE INCOME-TAX PAYEES. IN SUCH CIRCUMSTANCES , IT COULD NOT BE PRESUMED THAT THE SHARE HOLDER WHO WAS ASSESSED TO TAX WAS NOT IN EXISTENCE. THAT WOULD TANTAM OUNT TO CONTRADICTION IN THE STAND OF THE DEPARTMENT ITSELF. ITAT, JODHPUR BENCH (TM) IN THE CASE OF UMA POLYM ERS (P) LTD. VS. DCIT, 124 TTJ 124 , HELD IN RESPECT OF SHARE CAPITAL MONEY, THE ASSESSEE-COMPANY HAS TO PROVE ONLY THE EX ISTENCE OF THE PERSON IN WHOSE NAME SHARE APPLICATION IS REC EIVED AND THERE IS NO FURTHER BURDEN ON THE ASSESSEE TO PROVE WHETHER THAT PERSON HIMSELF HAS INVESTED THE MONEY OR SOME O THER PERSON HAS MADE THE INVESTMENT IN HIS NAME; DISTINCT ION 30 BETWEEN A PUBLIC COMPANY AND A PRIVATE COMPANY IS N OT VERY MATERIAL FOR THIS PURPOSE. MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. METACHEM INDUSTRIES, 245 ITR 160 , HELD ONCE IT IS ESTABLISHED THAT THE AMOUNT HAS BEEN INVESTED BY A PARTICULAR P ERSON, BE HE A PARTNER OR AN INDIVIDUAL, THEN THE RESPONSIBILITY OF THE ASSESSEE IS OVER. WHETHER THAT PERSON IS AN INCOME-TA X PAYER OR NOT AND WHERE HE HAD BROUGHT THIS MONEY FROM, IS NOT THE RESPONSIBILITY OF THE FIRM. THE MOMENT THE FIRM GIVES A SATISFACTORY EXPLANATION AND PRODUCES THE PERSON WH O HAS DEPOSITED THE AMOUNT, THEN THE BURDEN OF THE FIRM IS DISCHARGED AND IN THAT CASE THAT CREDIT ENTRY CANNOT BE TREATED TO BE THE INCOME OF THE FIRM OR THE PURPOSES OF INCOME-TAX. ITAT INDORE BENCH IN THE CASE OF ACIT VS. M/S VIND HYA SOYA LIMITED, ITA NO. 227/IND/ 2004 , HELD IN THE INSTANT CASE, THE CIT (A) IN ANNEXURE OF HIS ORDER HAS MENTIO NED DETAILS OF THE SHARE HOLDER, THEIR ADDRESSES, HOLDING OF AGRICU LTURAL LAND, PERMANENT ACCOUNT NUMBER OF SOME OF THE SHARE HOLDERS, AMOUNT OF DEPOSIT, THEIR OCCUPATION AND EVIDENCE FILE D IN FORM OF CONFIRMATION LETTER, COPY OF ACKNOWLEDGEMENT RECE IPT OF SOME OF THE SHARE HOLDERS FILING RETURN OF INCOME, EVIDENC E OF AGRICULTURAL HOLDING, ETC. WE HAVE ALSO NOTED THAT THE A SSESSEE COMPANY HAS FURNISHED COMPLETE DETAILS OF ALL THE SHARE HOLDERS. THEREFORE, BEFORE DRAWING ANY CONCLUSION THE AO SHOULD HAVE ISSUED SUMMONS U/S 131 TO THESE SHARE HOLDERS T O ARRIVE AT THE TRUTH ABOUT THE INVESTMENT MADE BY TH EM. HOWEVER, NO SUCH EXERCISE WAS CARRIED OUT BY THE AO AND SIMPLY FOR THE REASON THAT THE AMOUNT WAS DEPOSITED I N CASH, HE HELD THAT THE CREDIT WORTHINESS OF AND GENUINENES S OF TRANSACTION WAS NOT PROVED. THE AO HAS NOT DOUBTED T HE IDENTITY OF THE SHARE HOLDERS. FROM THE ABOVE IT APPEAR S THAT THE AO MADE THE ADDITION ON SURMISES AND CONJECTURES . THEREFORE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTAN CES AND PLACING RELIANCE ON THE DECISIONS DISCUSSED (SUPRA), WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT (A). HENCE, THE APPEAL OF THE REVENUE IS DISMISSED. DELHI HIGH COURT IN THE CASE OF CIT VS. GLOCOM IMPEX P. LTD. , 205 CTR 571 , HELD ONCE IT WAS ESTABLISHED THAT THE SHARE HOLDER WAS A GENUINE PERSON AND ALSO CREDITWORTH Y AND THAT SHE HAD THE REQUISITE AMOUNT FOR MAKING THE INV ESTMENT IN QUESTION, NO ADDITION COULD BE MADE UNDER S. 68 IN THE HANDS OF THE ASSESSEE-COMPANY ; REVENUE COULD NOT GO FURTHE R TO FIND OUT WHETHER THE PERSON FROM WHOM THE SHARE HOLDER HA D RECEIVED MONEY THROUGH CHEQUE WAS ALSO A GENUINE PAR TY AND CREDITWORTHY. HON'BLE GAUHATI HIGH COURT IN THE CASE OF NEMICHAND KOTHARI VS. CIT 264, ITR 254 , HELD THAT THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF THE CREDITORS. THE ASSESSE E HAD ALSO SHOWN, IN ACCORDANCE WITH THE BURDEN, WHICH RESTED ON HIM 31 UNDER SECTION 106 O F THE EVIDENCE ACT, THAT THE SAI D AMOUNTS HAD BEEN RECEIVED BY HIM BY WAY OF CHEQUES FROM THE CREDITORS WHICH WAS NOT IN DISPUTE. ONCE THE ASSESSEE HAD ESTAB LISHED THESE, THE ASSESSEE MUST BE TAKEN TO HAVE PROVED THA T THE CREDITOR HAD THE CREDITWORTHINESS TO ADVANCE THE LOA NS. THEREAFTER, THE BURDEN HAD SHIFTED TO THE ASSESSING OFFICER TO PROVE THE CONTRARY. THE FAILURE ON THE PART OF THE C REDITORS TO SHOW THAT THEIR SUB-CREDITORS HAD CREDITWORTHINESS TO ADVANCE THE SAID LOAN AMOUNTS TO THE ASSESSEE, COULD NOT, UNDE R THE LAW BE TREATED AS THE INCOME FROM UNDISCLOSED SOURCE S OF THE ASSESSEE HIMSELF, WHEN THERE WAS NEITHER DIRECT NOR CIRCUMSTANTIAL EVIDENCE ON RECORD THAT THE SAID LOAN A MOUNTS ACTUALLY BELONGED TO, OR WERE OWNED BY, THE ASSESSEE. TH E ASSESSING OFFICER FAILED TO SHOW THAT THE AMOUNTS, WH ICH HAD COME TO THE HANDS OF THE CREDITORS FROM THE HANDS O F THE SUB- CREDITORS, HAD ACTUALLY BEEN RECEIVED BY THE SUB-CREDI TORS FROM THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER COULD NOT HAVE TREATED THE SAID AMOUNTS AS INCOME DERIVED BY THE A SSESSEE FROM UNDISCLOSED SOURCES. HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. FIRST POINT FINANCE LTD. 286 ITR 477 , HELD THAT IT WAS NOT DENIED THAT ALL THE SHARE HOLDERS/ SHARE APPLICANTS WERE GENU INELY EXISTING PERSONS. IT WAS ALSO NOT DENIED THAT EACH OF THEM WAS AN INCOME-TAX ASSESSEE AND COPIES OF THE RETURN OF THEIR INCOME WERE ALSO PLACE BEFORE THE ASSESSING OFFICER. THERE W AS NO PRESUMPTION THAT THE ASSESSEE WAS THE BENAMI OWNER OF THE INVESTMENT MADE BY THE EXISTING PERSONS. THE TRIBUNA L WAS JUSTIFIED IN DELETING THE ADDITION. HON'BLE DELHI HIGH COURT IN THE RECENT DECISION IN T HE CASE OF CIT VS. ILLAC INVESTMENT PVT. LTD. 287 ITR 135 , HELD THE RESPONDENT-ASSESSEE HAD FOR THE ASSESSMENT YEAR 198 9-90 DISCLOSED IN ITS RETURN SUM OF RS. 4,75,000 RECEIVED AS SHARE APPLICATION MONEY. THE ASSESSING OFFICER ADDED THE SAID AMOUNT TO THE TAXABLE INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961, ON THE GROUND THAT THE IDENTITY OF THE SUBSCRIBERS HAD NOT BEEN ESTABLISHED. IN AN APPE AL FILED BY THE ASSESSEE AGAINST THE SAID ORDER, THE COMMISSIONE R OF INCOME-TAX (APPEALS) HELD THAT THE ASSESSEE HAD SATISF ACTORILY ESTABLISHED IDENTITY OF THE SHARE SUBSCRIBERS. THE VIE W TAKEN WITH THE ASSESSING OFFICER WAS, ACCORDINGLY, REVERSED . THE INCOME-TAX APPELLATE TRIBUNAL HAS IN A FURTHER APPEAL FILED BY THE REVENUE BEFORE IT PLACED RELIANCE UPON THE DECIS ION OF THIS COURT IN CIT V. ANTARCTICA INVESTMENT P. LTD. [2003] 262 ITR 493 AND CIT V. SOPHIA FINANCE LTD. [1994] 205 ITR 98 (DELHI) [FB] TO HOLD THAT THE RESPONDENT ASSESSEE HAD DISCHARGED THE ONUS BY REFERENCE TO THE MATERIAL PRODUCED TO ESTABLISH THE IDENTITY OF THE SUBSCRIBERS. THE TRIBUNAL HAS OBSERVED: ON GOING THROUGH THE VARIOUS ORDERS TO WHICH REFE RENCE HAS BEEN MADE BY THE LEARNED COUNSEL FOR ASSESSEE, IT IS FOUND THAT ON SIMILAR FACTS THE ADDITIONS MADE BY THE ASSESSING OFFICER HAVE BEEN DELETED. SO FAR AS THE 32 PRESENT CASE IS CONCERNED, THE LEARNED COMMISSIONER O F INCOME-TAX (APPEALS) HAS CONSIDERED THE FACTS AND CIRCUMSTANCES IN DETAIL AND HAS RECORDED FINDINGS OF FACT. HE HAS ALSO PLACED RELIANCE ON THE DECISION IN THE CA SE OF CIT V. SOPHIA FINANCE LTD. [1994] 205 ITR 98 (DELHI) [F B]. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ALSO CONSIDERED THE PROVISIONS OF SECTIONS 72,75 AND 77 OF THE COMPANIES ACT AND HAS ALSO TAKEN INTO CONSIDERATION THE DETAILS FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER INCLUDING THE CERTIFICA TE OF INCORPORATION OF SUBSCRIBERS, COPIES OF THEIR BANK STATEMENTS AND COPIES OF THEIR ASSESSMENT ORDERS AS WELL AS THE COPIES OF THEIR AUDITED ACCOUNTS. THE FINDINGS RECORDED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ARE BASED ON A PROPER APPRAISAL OF THE MATER IAL AND WE DO NOT FIND ANY SCOPE TO INTERFERE WITH THE SAME. CONSEQUENTLY, THE ORDER OF THE LEARNED COMMISSIONER O F INCOME-TAX (APPEALS) IS UPHELD. 12. IT IS ADMITTED FACT THAT THE ASSESSEE FILED THE CONFIRM ATION LETTER FROM M/S. ALLIANCE INDUSTRIES LTD. CONFIRMING TH AT IT HAS TRANSFERRED FOREIGN CURRENCY FROM THEIR BANK TO THE ACCOUNT OF THE ASSESSEE AND IN THE SAID CONFIRMATION ALL THE DETAILS OF SEVERAL PAYMENTS ARE MENTIONED. IT IS ALSO ADMITTED FACT THAT THE SAID NRI COMPANY IS REGISTERED COMPANY AND WHICH FACT IS ALSO PROVED BY THE CERTIFICATE OF INCORPORATION OF M/S. ALLIANCE IN DUSTRIES LTD. WHICH IS ALSO CERTIFIED BY THE NOTARY PUBLIC AND IS COUNTERSIGNED BY THE GOVERNOR AND COMMANDER IN CHIEF OF THE CITY O F GIBRALTAR. THESE CERTIFICATES ARE SUPPORTED BY LATER ON BY FAR IA AND ASSOCIATES CHARTERED ACCOUNTANTS. THE IDENTITY OF THE FOREIGN INVESTOR M/S. ALLIANCE INDUSTRIES LTD. IS THEREFORE ES TABLISHED BEYOND DOUBT. THE AO ALSO DID NOT DISPUTE THE IDENTITY AND EXISTENCE OF THE SHAREHOLDER M/S. ALLIANCE INDUSTRIES L TD. THE AO ALSO DID NOT DISPUTE TRANSFER OF MONEY BY M/S. ALLIANCE INDUSTRIES LTD. TO THE ASSESSEE FOR THE PURCHASE OF SHARES OF T HE ASSESSEE COMPANY AND THE AMOUNT INVESTED IN THE ASSESSEE COM PANY ON ACCOUNT OF SHARE CAPITAL/SHARE PREMIUM. THE ASSESSEE FROM THE CERTIFICATE OF THE GOVT. OF INDIA HAS ESTABLISHED THA T M/S. ALLIANCE INDUSTRIES LTD. INVESTED THE MONEY IN THE BUSINESS O F THE ASSESSEE AFTER OBTAINING THE PERMISSION OF THE GOVT. OF INDIA. THE FORMS FILED WITH THE RBI WOULD ALSO INDICATE THAT THE FOREIGN REM ITTANCES RECEIVED FROM M/S. ALLIANCE INDUSTRIES LTD. WERE DULY A PPROVED BY RBI FOR INVESTMENT IN THE SHAREHOLDING OF THE ASSESSE E COMPANY. THE ASSESSEE ALSO FILED SEVERAL CERTIFICATES ISSUED T IME TO TIME BY 33 THE STATE BANK OF INDIA, COMMERCIAL BRANCH, BHOPAL EXPLA INING THEREIN THAT ON SEVERAL DATES THE FOREIGN REMITTANCES WERE ORDERED, TO BE CREDITED TO THE ACCOUNT OF THE ASSESSEE WITH ST ATE BANK OF INDIA, BY M/S. ALLIANCE INDUSTRIES LTD. THE ASSESSEE AT THE APPELLATE STAGE FILED A CONSOLIDATED CERTIFICATE ISSU ED BY STATE BANK OF INDIA, COMMERCIAL BRANCH, BHOPAL EXPLAINING THERE IN THAT STANDARD CHARTERED BANK, DUBAI HAS CONFIRMED THAT ALL THE REMITTANCES SENT IN FAVOUR OF THE ASSESSEE COMPANY B Y M/S. ALLIANCE INDUSTRIES LTD. ARE ROUTED THROUGH THE BANK ACCOUNT OF M/S. ALLIANCE INDUSTRIES LTD. THE DETAILS OF PAYMENTS, D ATE AND USD ARE THE SAME AS HAVE BEEN MENTIONED IN THE CONFI RMATION LETTER OF M/S. ALLIANCE INDUSTRIES LTD. FILED BEFORE THE AO AND ARE ON THE SAME LINE ON WHICH ASSESSEE FILED SEVERAL CERT IFICATES BEFORE THE AO. THE STANDARD CHARTERED BANK ALSO FILED CERTIFICATE CONFIRMING THE ABOVE POSITION AND THAT M/S. ALLIANCE INDUSTRIES LTD. MAINTAINED BANK ACCOUNT WITH THEM AND THE ACCOUN T IS CONDUCTED TO THEIR SATISFACTION. THE AO NEITHER AT T HE ASSESSMENT STAGE NOR AT THE APPELLATE STAGE DISPUTED THE GENUIN ENESS OF THESE DOCUMENTARY EVIDENCES AND ALSO DID NOT MAKE ANY MEAN INGFUL INQUIRY ON SUCH EVIDENCES. STATE BANK OF INDIA, BHOPAL CONFIRMED THE NAME OF M/S. ALLIANCE INDUSTRIES LTD. IN THE CERT IFICATES WHO HAS TRANSFERRED THE USD TO THE ASSESSEE. THE ENTRIES IN THE CONFIRMATION ARE THEREFORE CONFIRMED BY THE STATE B ANK OF INDIA, BHOPAL ALSO. FROM THE ABOVE IT IS CLEARLY PROVED BY THE ASSESSEE THAT THE AMOUNT IN QUESTION HAVE COME TO THE ASSESS EE COMPANY FROM THE BANK ACCOUNT OF M/S. ALLIANCE INDUSTRIES LTD. THROUGH PROPER BANKING CHANNEL AND IT IS THE MONEY OF M/S. ALLIA NCE INDUSTRIES LTD. THAT HAS COME TO THE ASSESSEE AND TH AT M/S. ALLIANCE INDUSTRIES LTD. HAD THE CAPACITY TO INVEST TH IS MUCH OF THE AMOUNT DURING THE FY RELEVANT TO THE AY IN QUESTION. THE TRANSFER OF FOREIGN CURRENCY FROM THE BANK ACCOUNT OF M/S. ALL IANCE INDUSTRIES LTD. CLEARLY PROVED THE CREDITWORTHINESS OF M/S. A LLIANCE INDUSTRIES LTD. IT IS A SETTLED LAW THAT THE INCOME-TA X AUTHORITY CANNOT ASK THE ASSESSEE TO PROVE SOURCE OF THE SOUR CE. ALL THE ISSUE OF THE SHARES TO M/S. ALLIANCE INDUSTRIES LTD. H AVE ALREADY BEEN REPORTED BY THE ASSESSEE TO THE REGISTRAR OF C OMPANIES. AS PER SUBMISSION OF LD. COUNSEL FOR ASSESSEE THOUGH THE DIRECTORATE OF ENFORCEMENT GOVT. OF INDIA CONDUCTED CERTAIN INQU IRIES AGAINST 34 THE ASSESSEE UNDER THE PROVISIONS OF FOREIGN EXCHAN GE MANAGEMENT ACT BUT NO FURTHER INQUIRY HAS BEEN MADE INTO THE MATTER. IT WOULD ALSO PROVE THAT THE MONEY IN QUESTION FLOW FROM M/S. ALLIANCE INDUSTRIES LTD. THEREFORE AO WAS NOT JUS TIFIED IN DRAWING ADVERSE INFERENCE AGAINST THE ASSESSEE. THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD THAT THE SHARE APPLI CATION MONEY RECEIVED BY ASSESSEE FROM M/S. ALLIANCE INDUSTRIES LTD . BELONG TO THE ASSESSEE OR THAT IT WAS THE ASSESSEES OWN MONEY WHICH IT HAD RECEIVED IN THE SHAPE OF DOLLARS FROM THE NRI COM PANY. IT IS THEREFORE NOT IN THE NATURE OF INCOME OF THE ASSESS EE BECAUSE THE MONEY RECEIVED WAS ON ACCOUNT OF SHARE CAPITAL/SHARE PREMIUM. THE LD. CIT(A) HAS GIVEN CATEGORICAL FINDING IN THE IMPUGN ED ORDER THAT THE AO HIMSELF HAD ACCEPTED THE SIMILAR DEPOSITS IN TH E EARLIER AYS 2001-02 AND 2002-03 AS GENUINE. HE ALSO OBSERVED IN FACT ASSESSEE ORDER RELATING TO AY 2001-02 WAS PASSED AFT ER INQUIRY U/S 143(3) WHEREIN SIMILAR INVESTMENT FROM SAME NRI C OMPANY M/S. ALLIANCE INDUSTRIES LTD. TO THE TUNE OF RS.4,64,71,32 2/- WAS ACCEPTED AS GENUINE AND INVESTMENT OF RS.9,47,81,895/- F ROM THE SAME COMPANY WAS ALSO ACCEPTED IN SUBSEQUENT AY 2002 -03 U/S 143(1). LD. COUNSEL FOR ASSESSEE ALSO ARGUED AND MADE TH E ABOVE SUBMISSION BEFORE THE TRIBUNAL AS CONSIDERED BY LD. C IT(A). DURING THE COURSE OF ARGUMENTS, LD. DR DID NOT DISPUTE THE AB OVE FACTS RECORDED BY THE LD. CIT(A) IN THE IMPUGNED ORDER AND TH EREFORE IT STANDS PROVED THAT IN THE EARLIER YEARS THE AO DID N OT DISPUTE THE IDENTITY OF M/S. ALLIANCE INDUSTRIES LTD., GENUINENESS OF TRANSACTION AND ITS CREDITWORTHINESS IN RESPECT OF SHARE APPLICATION MONEY REMITTED BY THE ABOVE FOREIGN INVESTOR. WE DO N OT FIND IF THERE IS ANY DEVIATION OF THE FACTS OF THE INVESTMEN T IN RESPECT OF THE SAME NRI COMPANY M/S. ALLIANCE INDUSTRIES LTD. WE MAY ALSO NOTE THAT IN AY 2001-02, THE ASSESSMENT ORDER U/S 143 (3) WAS PASSED BY THE SAME AO SHRI YOGENDRA DUBEY, ACIT-2(1), B HOPAL ACCEPTING THE IDENTICAL SUBMISSION OF THE ASSESSEE. TH EREFORE, THERE WAS NO JUSTIFICATION ON THE PART OF SAME AO S HRI YOGENDRA DUBEY FOR NOT ACCEPTING THE CREDITS IN THIS YEAR AS G ENUINE. LD. DR SUBMITTED THAT PRINCIPLE OF RES-JUDICATA IS NOT APPLI CABLE AND AO IS COMPETENT TO MAKE INQUIRY ON THE SAME FACTS IN THE S UBSEQUENT YEAR. HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. GODA WARI CORPN. LTD., 156 ITR 835 HELD WITH REGARD TO THE THIRD POINT, WE 35 WOULD LIKE TO SAY THAT THE QUESTION POSED BEFORE US IS NOT WHETHER THE TRIBUNAL HAS COMMITTED AN ERROR OF LAW IN APPLYING THE PRINCIPLES OF RES-JUDICATE. HOWEVER, THOUGH IT IS TRUE THAT THE PRINCIPLES OF RES-JUDICATA DO NOT APPLY, THE RULE OF C ONSISTENCY DOES APPLY. IN THE INSTANT CASE, THE DEPARTMENT HAS FAILED TO POINT OUT THAT THE CIRCUMSTANCES FOR TREATING THE GAIN IN THE TRANSACTIONS FOR THE ASSESSMENT YEAR 1972-73 AS A CAPITAL GAIN WERE DIF FERENT FROM THOSE IN THE ASSESSMENT YEARS 1962-63 AND 1963 -64 AND, AS SUCH, THE FINDING HAS TO BE CONSISTENT. THE TRIBUNAL H AS, THEREFORE, NOT COMMITTED ANY ERROR. IN THIS RESPECT, WE WOULD LI KE TO SET OUT HEREINBELOW AN EXCERPT FROM THE DECISION OF THE ORIS SA HIGH COURT IN CIT VS. BELPAHAR REFRACTORIES LTD. [1981] 128 ITR 610 AT PP. 613-614. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. VIKAS CHEMI GUM INDIA, 276 ITR 32 HELD THAT SINCE THE APPELLANT DID NOT CHALLENGE THE ORDER PASSED BY THE TRIBUNAL IN RELATION TO THE ASSESSMENT YEAR 1986-87 BY WHICH IT CONFIRMED THE ORDER OF THE COMMISSIONER(APPEALS) DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF VALUE OF BARDANA USED FOR STORING C HURI AND KORMA, IT COULD NOT CHALLENGE A SIMILAR ORDER PASSED IN RELATION TO THE AY 1988-89. HONBLE SUPREME COURT IN THE CASE OF BERGER PAINTS IN DIA LTD. VS. CIT, 266 ITR 99 HELD HIGH COURT-DECISION IN THE C ASE OF ONE ASSESSEE-DEPARTMENT ACCEPTING AND NOT CHALLENGING CORRECTNESS-NOT OPEN TO DEPARTMENT TO CHALLENGE IN THE CASE OF OTHER ASSESSEES, WITHOUT JUST CAUSE. IN VIEW OF THE ABOVE FACTS AND DECISIONS NOTED, WE D O NOT FIND ANY MERIT IN THE SUBMISSION OF LD. DR, THE SAME IS THER EFORE REJECTED. LD. DR ALSO SUBMITTED THAT BALANCE SHEET OF M/S. ALLIA NCE INDUSTRIES LTD. IS NOT FILED AS IS CONSIDERED RELEVANT IN THE CASE OF M/S. KALANI INDUSTRIES LTD. (SUPRA). WE DO NOT AGREE WIT H THE SUBMISSION OF LD. DR BECAUSE EVERY CASE HAS ITS OWN FACTS AND THE FINDINGS ARE DEPENDANT UPON THE APPRECIATION OF THE EVIDENCE AVAILABLE ON RECORD. IN THE CASE OF PRESENT ASSESSEE , THE ENTIRE DOCUMENTARY EVIDENCE AVAILABLE ON RECORD AND THE PRE VIOUS HISTORY OF ASSESSEE NOTED ABOVE IN RESPECT OF THE S AME NRI 36 COMPANY M/S. ALLIANCE INDUSTRIES LTD. CLEARLY PROVED THE CASE OF THE ASSESSEE THAT THE SHARE APPLICATION MONEY RECEI VED BY THE ASSESSEE IS NOT IN THE NATURE OF INCOME OF THE ASSE SSEE. THE ASSESSEE ALSO ABLE TO PROVE CREDITWORTHINESS OF M/S. ALLI ANCE INDUSTRIES LTD. THIS CONTENTION OF LD. DR IS ALSO REJEC TED. LD. DR ALSO CONTENDED THAT AO RAISED SERIOUS DOUBT ABOUT TH E GENUINENESS OF TRANSACTION BECAUSE NO PRUDENT BUSIN ESSMAN WOULD MAKE HUGE INVESTMENT FOR GETTING LESSER SHAREH OLDING IN THE COMPANY. IT APPEARS FROM THE ABOVE SUBMISSION FROM TH E LD. DR THAT HE HIMSELF CONTRADICTED HIS SUBMISSION BECAUSE A CCORDING TO HIS SUBMISSION FOR PROVING GENUINE CREDIT U/S 68 TH E ASSESSEE SHALL HAVE TO PROVE IDENTITY OF CREDITOR, GENUINENESS O F TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR WHICH ASSESSEE IN THIS CASE HAS ALREADY PROVED. WHAT THE BUSINESSMAN HAS TAKEN A DECISION IS ENTIRELY DEPENDANT UPON THEIR BUSINESS NEEDS WHI CH IS NOT OPEN TO CHALLENGE BY THE REVENUE THEREFORE IT WAS NOT RELEV ANT CRITERIA TO DISBELIEVE THE VERSION OF THE ASSESSEE. LD. DR ALSO SU BMITTED THAT NRI COMPANY WAS NOT KNOWING MUCH ABOUT THE ASSESSEE BEFORE MAKING THE HUGE INVESTMENT. IT APPEARS THAT LD. DR FORG OT TO NOTE THAT THE SAME NRI COMPANY HAD MADE INVESTMENT IN THE ASSESSEE COMPANY IN THE EARLIER YEARS WHICH IS NOT DISPUTED BY THE AO THEREFORE CONTENTIONS OF THE LD. DR HAVE NO MERITS AND ARE REJ ECTED. THE RELIANCE OF LD. DR ON THE ORDER OF ITAT, DELHI BENCH IN THE CASE OF A-ONE HOUSING COMPLEX LTD.(SUPRA) IS MISPLACED BECAU SE ULTIMATELY IN THIS CASE IT WAS HELD WHETHER ONUS OF ASSESSEE IN THE CASE OF SHARE CAPITAL BY PUBLIC ISSUE IS LIGHTER ONE AND THEREFORE SUCH ONUS WOULD STAND DISCHARGED IF IDENTI TY OF SHARE APPLICANT IS ESTABLISHED-HELD-YES. THIS CASE IS NOT AP PLICABLE IN FAVOUR OF THE REVENUE BECAUSE THE AMOUNT IS NOT REC EIVED FROM CLOSE RELATIVE OR FRIEND. 12.1 ON GOING THROUGH THE ABOVE DOCUMENTARY EVIDENCES ON RECORDS AND THE JUDICIAL PRONOUNCEMENTS REFERRED T O ABOVE, IT IS CLEAR NEITHER THE AO NOR THE LD. DR APPEARING FOR THE REVENUE HAVE DISPUTED THE DOCUMENTARY EVIDENCES FILED BY THE ASSE SSEE BEFORE THE AUTHORITIES BELOW. THE ONLY POINT AGITATED BY THE A O WAS CREDITWORTHINESS OF M/S. ALLIANCE INDUSTRIES LTD. WHICH IS ALSO 37 SATISFACTORILY PROVED BY THE ASSESSEE. THE DECISION OF THE FULL BENCH OF DELHI HIGH COURT IN THE CASE OF M/S. SOPHIA FINANCE LTD. (SUPRA) HOLDS THE FIELD. HONBLE MP HIGH COURT IN THE CA SE OF DHAR ISPAT PVT. LTD. HELD THAT THE QUESTION OF GENUINENESS OF ENTRIES REGARDING SHARE APPLICATION MONEY IS A QUESTION OF FACT TO BE DECIDED ON THE BASIS OF EVIDENCE AVAILABLE ON RECORD. THE A SSESSEE ON THE BASIS OF EVIDENCE AVAILABLE ON RECORD HAS BEEN ABLE T O PROVE CREDITWORTHINESS OF M/S. ALLIANCE INDUSTRIES LTD. THE RATIO OF THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR ASSESSEE AND REFERRED TO BY US IN THIS ORDER ARE SQUARELY APPLICABLE TO TH E FACTS AND CIRCUMSTANCES OF THIS CASE. THE ASSESSEE THROUGH THE EVIDENCES ON RECORD HAS BEEN ABLE TO PROVE THE IDENTITY OF SHAREHO LDER, ITS EXISTENCE AND TRANSFER OF MONEY FROM THE BANK ACCOU NT OF M/S. ALLIANCE INDUSTRIES LTD., WHICH FACT HAVE NOT BEEN DIS PUTED BY THE AO. THE ASSESSEE PRODUCED SUFFICIENT AND RELIABLE MAT ERIAL AND EVIDENCE BEFORE THE AO TO PROVE THAT THE AMOUNT IN QUESTION HAVE BEEN INVESTED BY M/S. ALLIANCE INDUSTRIES LTD. THE LD. CI T(A) ON THE BASIS OF THE MATERIAL ON RECORD WAS JUSTIFIED IN ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THE SHARE APPLICANT IN FACT EXIST. THE CREDITWORTHINESS OF THE SHAREHOLDER IS ALSO PROVED BECAUSE ALL THE PAYMENTS HAVE BEEN MADE THROUGH BANKING CHANNEL THROUGH THE ACCOUNT PAYEE CHEQUE WHICH FACT COULD BE VERIFIE D FROM THE RESPECTIVE BANK AND IN FACT THE RESPECTIVE BANKS NA MELY SBI, BHOPAL AND STANDARD CHARTERED BANK HAVE CERTIFIED TH E SAME FACT. THE GENUINENESS OF THE TRANSACTION IS NOT DISP UTED. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF THE MATERIAL AND EVIDENCE ON RECORD, WE A RE OF THE VIEW THAT ASSESSEE HAS DISCHARGED THE ONUS LAY UPON IT T O PROVE IDENTITY AND EXISTENCE OF THE SHAREHOLDER M/S. ALLIANCE INDUSTRIES LTD., ITS CREDITWORTHINESS AND GENUINENESS OF TRANSACTI ON. THE AO HAS HOWEVER NOT BROUGHT ANY EVIDENCE CONTRARY TO TH E EVIDENCE FILED BY ASSESSEE. THE DECISIONS CITED BY LD. DR HAVE BE EN CONSIDERED IN THE LIGHT OF FACTS AND CIRCUMSTANCES OF THE CASE AND WE ARE OF THE OPINION THAT THE SAME COULD NOT SUPPORT THE CONTENTION OF LD. DR. WE MAY ALSO NOTE THAT HONBLE SUPREME COU RT IN THE CASE OF CIT VS. P. MOHAN KALA, AS RELIED UPON BY LD. DR HAS CONSIDERED THE FACT IN WHICH THE AO HELD THAT THE GI FT THOUGH APPARENT WERE NOT REAL AND ACCORDINGLY TREATED ALL TH E AMOUNTS OF 38 THE GIFT AS INCOME OF THE ASSESSEE U/S 68 OF THE IT ACT. THE ASSESSEE DID NOT CONTEND THAT EVEN IF THERE EXPLANA TION WAS NOT SATISFACTORY, THE AMOUNT WERE NOT OF THE NATURE OF I NCOME. THE LD. CIT(A) CONFIRMED THE ORDER AND THE TRIBUNAL THROUGH M AJORITY VIEW CONFIRMED THE ORDERS OF THE AUTHORITIES BELOW. ON AN APPEAL, THE HIGH COURT RE-APPRECIATED THE EVIDENCE AND SUBSTITUT ED ITS OWN FINDING AND CAME TO THE CONCLUSION THAT THE REASONS ASSIGNED BY THE TRIBUNAL WERE IN THE REALM OF SURMISES, CONJECTU RE AND SUSPICION. HONBLE SUPREME COURT ON SUCH FACTS HELD, RE VERSING THE DECISION OF THE HIGH COURT, THAT THE FINDINGS OF THE AO, THE COMMISSIONER (APPEALS) AND THE TRIBUNAL WERE BASED ON THE MATERIAL ON RECORD AND NOT ON ANY CONJECTURES AND SUR MISES. THAT THE MONEY CAME BY WAY OF BANK CHEQUES AND WAS PAID THROUGH THE PROCESS OF BANKING TRANSACTION WAS NOT BY ITSELF OF ANY CONSEQUENCE. THE HIGH COURT MISDIRECTED ITSELF AND ER RED IN DISTURBING THE CONCURRENT FINDINGS OF FACT. HOWEVER, THE FACTS AND CIRCUMSTANCES OF THE APPEAL BE FORE US ARE CLEARLY DISTINGUISHABLE AS NOTED ABOVE. THE RELIANC E OF LD. DR ON THE CASES REFERRED TO ABOVE ARE THEREFORE MISPLACE D. 12.2 CONSIDERING THE ABOVE DISCUSSION, WE DO NO T FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE APPEAL OF THE REVENUE HAS NO MERIT AND IS ACCORDINGLY DISMISSED. NO OTHER POI NT IS ARGUED OR PRESSED. 11. THE AFORESAID ORDER OF THE INDORE BENCH HAVE BE EN CONFIRMED BY HON'BLE MADHYA PRADESH HIGH COURT IN T HE CASE OF CIT V PEOPLES GENERAL HOSPITAL LTD. 356 ITR 65 IN WHICH THE HON'BLE HIGH COURT FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD. (SUPRA) HELD AS UNDER ; HELD, DISMISSING THE APPEALS, THAT IF THE ASSESSEE HAD RECEIVED SUBSCRIPTIONS TO THE PUBLIC OR RIGHTS ISSUE THROUGH BANKING CHANNELS AND FURNISHED COMPLETE DETAILS OF THE SHARE HOLDERS, NO ADDITION COULD BE MADE UNDER SECTION 68 OF THE INCO ME-TAX ACT, 1961, IN THE ABSENCE OF ANY POSITIVE MATERIAL OR EVIDE NCE TO INDICATE THAT THE SHAREHOLDERS WERE BENAMIDARS OR FI CTITIOUS PERSONS OR THAT ANY PART OF THE SHARE CAPITAL REPRE SENTED THE 39 COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. IT WAS NOBODY'S CASE THAT THE NON-RESIDENT INDIAN COMPANY WA S A BOGUS OR NON-EXISTENT COMPANY OR THAT THE AMOUNT SU BSCRIBED BY THE COMPANY BY WAY OF SHARE SUBSCRIPTION WAS IN FACT THE MONEY OF THE ASSESSEE. THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF THE INVESTOR WHO HAD PROVIDED THE SHARE SUBSCRIPTION AND THAT THE TRANSACTION WAS GENUINE. THOUGH THE ASS ESSEE'S CONTENTION WAS THAT THE CREDITWORTHINESS OF THE CRED ITOR WAS ALSO ESTABLISHED, IN THIS CASE, THE ESTABLISHMENT OF THE IDENTITY OF THE INVESTOR ALONE WAS TO BE SEEN. THUS, THE ADDITION WAS RIGHTLY DELETED. 12. IN THE PRESENT CASE, ASSESSEE COMPANY HAD RECEIVED MONEY ON ALLOTMENT OF SHARES FROM M/S GLACIS INVESTMENT LIMITED THROUGH BANKING CHANNEL AND FURNISHED COMPLETE DETAILS OF THE SHAREHOLDER, NO ADDITION WOULD BE MADE UNDER SECTION 68 OF THE ACT, IN THE ABSENCE OF ANY POSITIVE MATERIAL OR EVIDENCE TO INDICATE THAT THE SHAREHOLDER COMPANY WAS BENAMIDAR OR FICTITIOUS COMPANY OR THAT ANY PART OF THE SHARE CAPITAL REPRESENTED THE ASSESSEE' S OWN INCOME FROM UNDISCLOSED SOURCES. THE ASSESSEE ON THE BASIS OF THE DOCUMENTARY EVIDENCE ON RECORD HAS BEEN ABLE TO PROVE THAT NON RESIDENT COMPANY I.E. M/S GLACIS INVESTMENT LIMITED WAS AN EXISTING COMPANY AND THAT THE SHAREHOLDER COMPANY MADE INVESTMENT IN THE ASSESSEE COMPANY WOULD PROVE THAT ASSESSEE RECEIVED GENUINE SHARE APPLICATION MONEY FROM THIS NON-RESIDENT COMPANY. THUS, ASSESSEE HAD ESTABLISHED THE IDENTITY OF THE SHAREHOLDER COMPANY AND THAT TRANSACTION WAS GENUINE. THE ASSESSEE HAS ALSO PROVED THE CREDIT WORTHINESS OF THE SHAREHOLDER COMPANY, THEREFORE, AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE HUGE ADDITION AGAINST THE ASSESSEE. 40 13. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES ON THE BASIS OF THE EVIDENCES ON RECORD AND IN THE LIGHT OF THE JUDICIAL PRONOUNCEME NTS NOTED ABOVE, WE ARE OF THE VIEW THAT ASSESSEE HAS BEEN ABLE TO PROVE THE IDENTITY OF THE CREDITOR WHI CH IS NOT IN DISPUTE, CREDIT WORTHINESS OF THE SHAREHOLDER COMPANY AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THEREFORE, ADDITION OF R S. 3.70 CR UNDER SECTION 68 OF THE ACT IS WHOLLY UNJUSTIFIED. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE ADDITION OF RS. 3.70 C R. IN THE RESULT, GROUND NO. 1 OF APPEAL OF THE ASSESS EE IS ALLOWED. 18. IN VIEW OF THE ABOVE, WE FIND THAT THE ISSUE ON MERIT IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF M/S LOTUS INTEGRATE D TAXPARKS (SUPRA) AND AS SUCH, NO ADDITION COULD BE MADE AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE FINDING S AND DISCUSSION, WE SET ASIDE THE ORDERS OF THE AUTHORIT IES BELOW AND QUASH THE RE-ASSESSMENT PROCEEDINGS UNDER SECTI ON 148 OF THE INCOME TAX ACT, RESULTANTLY, ALL ADDITIO NS MADE THEREIN STAND DELETED. 19. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05 TH NOV., 2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD