ITO 7(1)(4), MUMBAI V. LISHA TRADING P.LTD, MUMBAI

ITA 5845/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2766 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2012-2013
• Appeal Filed On: 30-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources; Question of law; Valuation report; Accommodation entries; Onus to prove
• Section: 142(1); 56(2); 133(6); 131; 68; 12; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER & SHRI G MANJUNATHA, ACCOUNTANT MEMBER ITA NO.5845/MUM/2016 ASSESSMENT YEAR : 2012-13 ITO 7(1)(4), MUMBAI VS. LISHA TRADING P. LTD., GROUND FLOOR, RAJGURU APARTMENT, BABURAO PARULEKAR MARG, DADAR (W), MUMBAI 400 028 PAN AABCL6135F (APPELLANT) RESPONDENT) APPELLANT BY : SHRI ANOOP HIWASE RESPONDENT BY : SHRI VIMAL PUNAMIYA DATE OF HEARING : 14 .0 6 .201 8 DATE OF PRONOUNCEMENT : .0 8 . 201 8 O R D E R PER G MANJUNATHA, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST ORDER OF THE CIT(A)-13, MUMBAI, DATED 12.07.2016, AND IT PERTAINS TO ASSESS MENT YEAR 2012-13. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING ADDITION OF RS.3,14,50,000 /- IN RESPECT OF HUGE SHARE PREMIUM CHARGED @490/- FROM SEVEN DIFFERENT S UBSCRIBING COMPANIES U/S. 68 OF THE INCOME TAX ACT WITHOUT APP RECIATING THAT THE SAME SHARES WERE ALLOTTED TO THE DIRECTORS, THEIR C LOSE RELATIVES AND ASSOCIATE CONCERNS AT PAR AND HUGE CASH DEPOSITS WE RE IDENTIFIED IN THE THREE SUBSCRIBER COMPANIES ACCOUNTS. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF TRADING IN TEXTILE, FABR ICS, INVESTMENT AND TRADING IN ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 2 SECURITIES. IT FILED ITS RETURN OF INCOME FOR A.Y. 2012-13 ON 11.09.2012 DECLARING TOTAL INCOME AT ` 25,68,990/-. THE CASE WAS SELECTED FOR SCRUTINY A ND NOTICES U/S. 143(2) AND 142(1) WERE ISSUED. IN RESPONSE TO NOTI CES, THE LEARNED AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FURNISHED T HE DETAILS AS CALLED FOR. DURING THE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICE R NOTICED THAT THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY FROM SEVEN DIFFERE NT APPLICANTS AND ALLOTTED EQUITY SHARES OF ` 10 EACH AT A PREMIUM OF ` 490 PER SHARE. THE ASSESSING OFFICER FURTHER OBSERVED THAT DURING THE SAME PERIOD THE COMPANY HA S ALLOTTED EQUITY SHARES TO ITS DIRECTORS/PROMOTERS SHARES HOLDERS @ 10 PER SHARE. IN ORDER TO VERIFY THE GENUINENESS OF SHARE APPLICATION MONEY RECEIVED FRO M SEVEN INVESTORS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNI SH NECESSARY EVIDENCE TO PROVE THE IDENTITY, GENUINENESS OF THE TRANSACTIONS AND C REDITWORTHINESS OF THE INVESTORS. IN RESPONSE TO NOTICE, THE ASSESSEE VIDE ITS LETTER DATED 28.08.2014 FILED VARIOUS DETAILS INCLUDING APPLICATION FOR ALLOTMENT OF EQUI TY SHARES, BOARD RESOLUTION AUTHORIZING ISSUE OF SHARES AT PREMIUM, BALANCE-SHE ET OF ALL INVESTOR COMPANIES TO ESTABLISH THE NATURE AND SOURCE OF INVESTMENT, INCO ME-TAX RETURN ACKNOWLEDGMENT COPIES ALONG WITH THEIR PAN DETAILS, RETURN OF ALLO TMENT FILED IN FORM -2 BEFORE ROC. THE ASSESSEE FURTHER FILED VALUATION REPORT, DATED 30.08.2011, IN SUPPORT OF CHARGING PREMIUM OF ` 490 PER SHARE AND AS PER WHICH VALUE OF SHARES HAS BEEN DETERMINED ON NET ASSET VALUE METHOD WHICH WORKS OU T TO ABOUT ` 500 PER SHARE. THE ASSESSEE ALSO FILED DETAILED SUBMISSIONS VIDE L ETTER DATED 23.03.2015 TO JUSTIFY ISSUE OF SHARES AT PREMIUM AND ALSO TO ARGUE THAT I T HAS SATISFIED ALL CONDITIONS ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 3 PRESCRIBED U/S 68 OF THE ACT TO PROVE GENUINENESS O F TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. 3. THE ASSESSING OFFICER AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALSO ANALYZING DETAILS FILED BY THE ASSESSEE LI KE FINANCIAL STATEMENT OF INVESTORS, OBSERVED THAT ALTHOUGH THE ASSESSEE HAS FILED CERTA IN EVIDENCES TO PROVE THE IDENTITY OF INVESTORS, ON PERUSAL OF THE DETAILS FI LED BY THE ASSESSEE ONE UNDOUBTED FACT EMERGE FROM THESE TRANSACTIONS IS THAT THE ASS ESSEE HAS RECEIVED HUGE SHARE CAPITAL FROM SEVEN UNKNOWN COMPANIES, WHO ARE NOT R ELATED TO THE ASSESSEE. THE ASSESSING OFFICER FURTHER OBSERVED THAT FROM THE BA NK STATEMENT OF THE SUBSCRIBING COMPANIES, IT IS NOTICED THAT THE SUBSCRIBING COMPA NIES HAVE DEPOSITED HUGE AMOUNTS OF CASH IN THEIR BANK ACCOUNT, WHICH IS OVE R AND ABOVE THE TURNOVER RECORDED FOR THE RELEVANT FINANCIAL YEAR. THERE IS NO COMMUNICATION ON RECORD PLACED EITHER BY THE SUBSCRIBING COMPANY OR BY THE ASSESSEE TO DEMONSTRATE AS TO HOW WHOLE TRANSACTION WAS CONCEPTUALIZED, DISCUSSED AND CONCLUDED. THERE IS NO BASIS FOR JUSTIFICATION FOR THE PREMIUM CHARGED BY THE ASSESSED. NO DOUBT THE ASSESSEE HAS FILED VARIOUS DOCUMENTS TO PROVE THE I DENTITY INCLUDING BANK STATEMENTS, BUT THE FACT REMAINS THAT MERE PRODUCTI ON OF PAN DETAILS AND BANK ACCOUNT DETAILS DO NOT ESTABLISH THE IDENTITY OF TH E PERSON. THE ACTUAL AND TRUE IDENTITY OF THE PERSON OR A COMPANY IS THE BUSINESS UNDERTAKEN BY THEM AND IN THE PRESENT CASE NO BUSINESS ACTIVITY IS BEING CARRIED OUT BY THE INVESTING COMPANIES EXCEPT PROVIDING THE ENTRIES BY WAY OF UNSECURED LO AN AND SHARE APPLICATION MONEY. THE ASSESSING OFFICER HAS EXTENSIVELY DISCUSSED THE DOCUMENTS FILED BY THE ASSESSEE AND OBSERVED THAT NONE OF THE SEVEN COMPANIES HAVE ANY CREDIBLE BUSINESS TO ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 4 ESTABLISH THE SOURCE OF INVESTMENT MADE IN THE ASSE SSEE COMPANY. ALTHOUGH, THE COMPANIES ARE CARRYING ON HUGE RESERVES AND SURPLUS IN THEIR BALANCE SHEET, WHEN COMPARED TO THE NATURE OF BUSINESS AND TURNOVER FOR THE RELEVANT FINANCIAL YEAR INCLUDING FOR THE EARLIER PERIOD, IT IS VERY CLEAR THAT ALL THESE COMPANIES HAVE SHOWN MEAGER TURNOVER OF ONE OR TWO LACS RUPEES PER ANNUM AND NET PROFIT OF LESS THAN ` 10,000/-. THE ASSESSING OFFICER ALSO OBSERVED THA T THESE COMPANIES HAVE DEPOSITED HUGE CASH IN THEIR BANK ACCOUNT AND ROUTE D THE TRANSACTIONS THROUGH A WEB OF COMPANIES TO GIVE ACCOMMODATION ENTRIES TO V ARIOUS ENTITIES. THEREFORE, THE ASSESSING OFFICER OPINED THAT THE TRANSACTIONS BETW EEN THE ASSESSEE COMPANY AND INVESTORS ARE NOT GENUINE TRANSACTIONS AND, ACCORDI NGLY, AFTER CONSIDERING RELEVANT FACTS AND ALSO BY FOLLOWING CERTAIN JUDICIAL PRECED ENTS INCLUDING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. N R PORTFOLIO PVT. LTD. (ITA 1018/2011) HELD THAT THE TRANSACTIONS BETWEEN THE A SSESSEE AND THE INVESTOR COMPANIES FAILS ON THE TEST OF GENUINENESS BECAUSE THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE INVESTING COMPANIES WERE GENUINE INVESTORS. THE ASSESSING OFFICER FURTHER OBSERVED THAT INVESTING COMPANIES H AVE BEEN USED BY THE ASSESSEE FOR INTRODUCTION OF CAPITAL INTO THE ASSESSEE COMPA NY THROUGH THE PROCESS OF LAYERING TRANSACTIONS AND THE WHOLE TRANSACTION IN THE GRAB OF SHARE APPLICATION MONEY IS ONLY A COLOURABLE DEVICE USED BY THE ASSES SEE TO MAKE THE TRANSACTION APPEAR GENUINE. ACCORDINGLY, HE MADE ADDITION OF ` 3,14,50,000/- U/S. 68 OF THE INCOME TAX ACT, 1961 TO THE TOTAL INCOME OF THE ASS ESSEE. ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 5 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE HAS FILED ELABORATE WRITTEN SU BMISSIONS ON THE ISSUE, WHICH HAS BEEN REPRODUCED IN PARA 4 AT PAGES 10-13 OF THE ORD ER OF THE LEARNED CIT(A). THE ASSESSEE ALSO RELIED UPON VARIOUS JUDICIAL PRECEDEN TS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. (2008)216 CTR 195. THE ASSESSEE REITERATED ITS ARGUMENTS MADE BE FORE THE ASSESSING OFFICER TO ARGUE THAT IT HAS PROVED THE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES BY FILING VARIOUS D OCUMENTS INCLUDING FINANCIAL DETAILS OF THE SUBSCRIBING COMPANY, PAN, BANK STATEMENTS AL ONG WITH ASSESSEES FINANCIAL STATEMENTS TO JUSTIFY CHARGING PREMIUM OF ` 490/- PER SHARE. THE ASSESSEE HAS ALSO TAKEN A PLEA THAT ONCE THE ASSESSEE HAS DISCHARGED ITS INITIAL BURDEN CAST UPON U/S. 68 OF THE ACT, THEN THE BURDEN SHIFTS TO THE REVENU E TO PROVE OTHERWISE. IN THIS CASE, THE ASSESSING OFFICER REJECTING ALL EVIDENCES FILED BY THE ASSESSEE MADE ADDITION U/S. 68 OF THE ACT, ONLY ON THE GROUND THA T THE TRANSACTION BETWEEN THE ASSESSEE AND THE INVESTOR COMPANY ARE NON-GENUINE T RANSACTIONS. 5. THE CIT(A) AFTER CONSIDERING RELEVANT SUBMISSION S OF THE ASSESSEE AND ALSO RELYING UPON VARIOUS JUDICIAL PRECEDENTS HELD THAT THE ASSESSEE HAS FURNISHED SUFFICIENT MATERIAL TO PROVE THE IDENTITY, GENUINEN ESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE SUBSCRIBING COMPANIES. THE CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HAS ALSO FILED VARIOUS DETAILS TO JUST IFY CHARGING OF SHARE PREMIUM OF ` 490 PER SHARE INCLUDING VALUATION REPORT TAKEN FROM TWO INDEPENDENT VALUERS AS PER WHICH THE ASSESSEES SHARE VALUE IS APPROXIMATELY ` 500 PER SHARE. THE CIT(A) HAS ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 6 DISCUSSED THE ISSUE AT LENGTH AND NEGATED ALL OBSER VATIONS MADE BY THE ASSESSING OFFICER INCLUDING APPLICABILITY OF PROVISO TO SECTI ON 68 OF THE INCOME TAX ACT, 1961. ACCORDING TO THE CIT(A), PROVISO INSERTED TO SECTIO N 68 OF THE INCOME TAX ACT, 1961 HAS NO APPLICATION FOR THE IMPUGNED ASSESSMENT YEAR AS IT CAME INTO FORCE FROM 01.04.2013. ACCORDINGLY, HE HELD THAT THE ASSESSIN G OFFICER HAS ERRED IN MAKING ADDITION TOWARDS SHARE PREMIUM CHARGED BY THE ASSES SEE. THE RELEVANT PORTION OF THE ORDER OF CIT(A) IS EXTRACTED BELOW: 5. DECISION - I HAVE CAREFULLY CONSIDERED THE AO'S ORDER AS WE LL AS THE DETAILED SUBMISSIONS MADE BY THE AR. I HAVE ALREADY SUMMARIZED THEIR ARGUMENTS IN THE PRECEDING PARAGRAPHS. BROADLY, TH E AO FELT THAT THE MODUS AND THE FACTUM OF INVESTMENT WOULD GO ON TO S HOW THAT THE SHARE PREMIUM RECEIVED BY THE APPELLANT WOULD BE ASSESSAB LE UNDER SECTION 68 OF THE ACT. PER CONTRA, THE AR ARGUED THAT THERE WA S NOTHING IRREGULAR ABOUT THE APPELLANT'S COLLECTION OF SHARE PREMIUM, WHICH CANNOT BE SUBJECTED TO ADDITION UNDER SECTION 68 OF THE ACT. FURTHER, HE ARGUED THAT SHARE PREMIUM BY ITS VERY DEFINITION IS A CAPITAL R ECEIPT AND AS SUCH NOT CHARGEABLE TO TAX. 5.1 FOR THE SAKE OF CLARITY AND EASE OF UND ERSTANDING, I WOULD LIKE TO DEAL WITH THE POINTS RAISED BY THE AO AND REBUTT ED BY THE AR IN THE SAME ORDER THAT THEY HAVE BEEN PRESENTED IN THE PRE CEDING TWO PARAGRAPHS. THE FIRST POINT MADE BY THE AO WAS ABO UT THE FACT THAT THE APPELLANT WAS A CLOSELY HELD PRIVATE LIMITED COMPAN Y, ALLEGING THEREBY THAT IT WOULD BE EASIER TO ACCEPT SHARE PREMIUM EVE N WHEN IT WAS NOT REQUIRED TO BE PAID. I AM UNABLE TO ACCEPT THIS PRO POSITION. IT IS NOT THAT BY ITS VERY DEFINITION EVERY LISTED COMPANY IS ABOV E BOARD AND EVERY CLOSELY HELD PRIVATE LIMITED COMPANY A TARGET OF SU SPICION. ALL TOLD, COMPANIES ARE BY THEMSELVES MERE LEGAL CONSTRUCTS A ND ARE RUN BY PEOPLE WHO CAN TAKE COMPANIES EITHER WAY, REGARDLES S OF WHETHER ARE LISTED OR NOT. 5.2 THE SECOND POINT MADE BY THE AO IS ABOUT THE DIRECTORS OR THE PERSONS BEHIND THE INVESTING COMPANIES NOT BEING RE LATED TO THE APPELLANT. THE AO HAS BASICALLY INDICATED HIS INCRE DULITY AT A MUMBAI- BASED PRIVATE LIMITED COMPANY BEING ABLE TO OBTAIN INVESTMENTS WITH SUBSTANTIAL PREMIUM FROM KOLKATA-BASED ENTITIES. TH E AR HAS POINTED OUT THAT HE HAD FILED BEFORE THE AO THE DETAILS OF THE COMMON DIRECTORSHIPS OF TWO OF THE APPELLANT'S DIRECTORS VIZ. S/SHRI R. K. SARASWAT AND NIRMAL ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 7 KUMAR MANNA. NOT ONLY WERE THESE TWO GENTLEMEN DIRE CTORS IN THE APPELLANT-COMPANY, EITHER THEY OR THEIR RELATIVES W ERE DIRECTORS IN THE INVESTOR-COMPANIES. I AM ACCORDINGLY UNABLE TO GIVE MUCH CREDENCE TO THIS PARTICULAR OBSERVATION OF THE AO. 5.3 THIRDLY, THE AO HAS REPRODUCED PARTIAL B ANK ACCOUNTS OF THE RELEVANT PREVIOUS YEAR OF TWO OF THE INVESTOR-COMPA NIES VIZ. SPRINT AND SREEHARI IN HIS ORDER. HE APPEARS TO HAVE ALSO EXAM INED THE BANK ACCOUNTS OF SWAPNAPURI AND LARICA, THOUGH THEY HAVE NOT BEEN REPRODUCED IN THE ORDER. HE HAS CONCLUDED THAT CASH DEPOSITS TO THE TUNE OF ` 6.67 LAKHS, ` 15.17 LAKHS AND ` 28.04 LAKHS RESPECTIVELY HAD BEEN MADE IN THE CASES OF SPRINT, SWAPNAPURI AND LARICA. BEFORE ME, THE AR ARGUED THAT THE GENERAL TRANSACTIONS OF ANY OF THE INVESTOR- COMPANIES SHOULD NOT BE THE SUBJECT-MATTER OF THE AO'S INQUIR Y, AS HE WAS NOT ASSESSING THE INVESTOR-COMPANIES. INSOFAR AS THE IN VESTMENTS IN THE APPELLANT-COMPANY ARE CONCERNED, HE SUBMITTED THAT EVEN IF THERE HAD BEEN SOME CASH DEPOSITS IN THE BANK ACCOUNTS OF SOM E OF THE INVESTOR- COMPANIES, THERE IS HO ONE-TO-ONE RELATIONSHIP OF A NY OF THE INVESTMENTS IN THE APPELLANT-COMPANY WITH ANY CASH DEPOSITS. IN FACT THE PRECEDING PAYMENTS IN THE TWO BANK ACCOUNTS REPRODUCED BY THE AO IN HIS ORDER HAVE BEEN NECESSARILY BY CHEQUE AND NOT A SINGLE PR ECEDING DEPOSIT HAD BEEN BY CASH. 5.4 THE FOURTH POINT MADE BY THE AO WAS THAT NO C OPIES OF COMMUNICATION MADE BETWEEN THE APPELLANT AND THE IN VESTOR-COMPANIES HAD BEEN PLACED BEFORE THE AO. WHAT THE AO MEANT WA S THAT HE DOUBTED THE INVESTMENTS AS THEY APPEARED TO HAVE MATERIALIZ ED OUT OF THIN AIR. HERE, THE AR MADE A DUAL SUBMISSION. FIRSTLY, THE C OMMONALITY OF DIRECTORS / THEIR RELATIVES IN THE INVESTOR AND INV ESTEE COMPANIES MAKES THIS ISSUE OF COMMUNICATION REDUNDANT. SECONDLY, TH E AO HAD NEVER SOUGHT THIS PARTICULAR INFORMATION FROM THE APPELLA NT, WHO HAD NOT FILED IT BEFORE HIM EITHER. AFTER CAREFUL CONSIDERATION, FIN D MYSELF IN AGREEMENT WITH THE AR. 5.5 THE FIFTH POINT MADE BY THE AO WAS THAT NO BASIS OR JUSTIFICATION FOR CHARGE O PREMIUM HAS BEEN PRODUCED BY THE APPEL LANT. ON THIS COUNT, THE AR SOUGHT TO AGGRESSIVELY DEFEND THE APPELLANT, STATING THAT VALUATION REPORTS OF THE APPELLANT-COMPANY WHICH HAD BEEN DUL Y FILED BEFORE THE AO (THEY HAVING BEER PLACED ON THE APPELLATE ORDER TOO) WOULD INDICATE THAT THE PREMIUM CHARGED WAS IN ORDER. THE FIRST VA LUATION WAS DONE IN TERMS OF RULE 11UA OF THE RULES WHICH HAS COMPUTED THE VALUE OF THE APPELLANT'S SHARES AT ` 462/- PER SHARE. THE SECOND; VALUATION DONE BY M/S MAHESHWARI & CO., CAS HAD PEGGED THE VALUATION OF SHARES OF THE APPELLANT AT ` 1,583/- PER SHARE AS PER THE DCF (DISCOUNTED CASH FLOW) METHOD, WHILE AS PER THE P/E (PRICE / EARNINGS) MET HOD IT CAME TO ` ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 8 417/- PER SHARE. ON THIS BACKGROUND, THE APPELLANT' S OWN VALUATION OF ` 500/- PER SHARE CERTAINLY DOES NOT APPEAR TO BE EXC ESSIVE. 5.6 THE SIXTH POINT MADE BY THE AO WAS THAT NO JUSTIFICATION WAS PROVIDED BY THE APPELLANT FOR THE SHARES ISSUED AT PAR AFTER ISSUING SHARES AT PREMIUM. ONCE MORE, THE AR POINTED OUT THAT DUE SUBMISSIONS HAD INDEED MADE BEFORE THE AO, WHICH HE HAD SIMPLY GLOS SED OVER. WHILE THE INVESTOR-COMPANIES WERE WILLING TO INVEST IN THE AP PELLANT-COMPANY, THEY WANTED THE DIRECTORS OF THE APPELLANT-COMPANY, OTHE R KEY PERSONNEL AND THEIR ASSOCIATED ENTITIES WHIP WOULD BE EXECUTING T HE APPELLANT'S PROJECTS TO ALSO HAVE A STAKE IN THE APPELLANT. ACCORDINGLY, SHARES HAD BEEN ISSUED AT PAR TO THOSE PERSONS. 5.7 THE SEVENTH POINT MADE BY THE AO WAS AB OUT INVESTMENTS IN THE APPELLANT COMPANY NOT HAVING BEEN MADE WITHOUT A PROFIT MOTIVE. THE AO MEANT THAT A COMPANY LIKE THE APPELLANT WHIC H HAD NO PROVEN TRACK RECORD WOULD HARDLY MERIT ANY INVESTMENTS. BE FORE ME, THE AR STATED THAT THE AO HAD OBSERVED IN THIS FASHION AS HE WAS TRYING TO GET INTO THE SHOES OF THE INVESTORS - WHICH THE AR RESP ECTFULLY SUBMITTED - WAS NOT SUPPOSED TO BE DONE. THE INVESTORS HAD PUT IN THEIR MONEY AS THEY HAD FOUND THE PROPOSED PROJECTS OF THE APPELLA NT TO BE SUFFICIENTLY LUCRATIVE. THIS IS A BUSINESS DECISION AND CAN POSS IBLY NOT BE QUESTIONED. THE AR POINTED OUT THAT THE DETAILS OF THE PROJECTS HAD BEEN FILED BEFORE THE AO, WHO HAD DISMISSED THEM AS GLOSSY BROCHURES. WHILE THE FIRST PROJECT OF THE APPELLANT WAS KNOWN AS 'EMERALD WATE R FRONT' WHEREBY A REAL ESTATE PROJECT ACROSS 20 ACRES WAS TO COME UP AT ANKLAV, VADODARA IN GUJARAT ON THE BANKS OF MAHI RIVER. THE SECOND P ROJECT WAS ANOTHER REAL ESTATE PROJECT OF VISHNUPURAM WHICH WAS TO COM E ON A 30 ACRE AREA AT PALGHAR, NEAR MUMBAI. THE THIRD AND FOURTH PROJE CTS WERE JOINT VENTURES WITH M/S PETROMAR ENGINEERING SOLUTIONS PV T. LTD. (HEREINAFTER REFERRED TO AS 'PETROMAR') AND M/S METHODEX SYSTEMS LTD. (HEREINAFTER REFERRED TO AS 'METHODEX') WHICH WERE SEEKING TO EX PAND THEIR CAPACITIES THROUGH JOINT VENTURES WITH THE APPELLANT FOR MANUF ACTURING OIL FILTERS AND CURRENCY HANDLING EQUIPMENT. THE APPELLANT HAD ALRE ADY INVESTED A TOTAL AMOUNT OF ` 5.73 CRORES IN EMERALD WATER FRONT DURING THE RELE VANT PREVIOUS YEAR AND THE FOLLOWING TWO PREVIOUS YEARS. INVESTMENTS TO THE TUNE OF ` 0.33 CRORE, ` 3.8 CRORES AND ` 0.95 CRORE TOO HAD BEEN MADE IN VISHNUPURAM AND THE JOINT VENTURES WITH PETROMAR AN D METHODEX RESPECTIVELY, ACROSS THE SAME PERIOD. AFTER GOING T HROUGH THE ABOVE DATA, I AM OF THE CONSIDERED VIEW THAT THE AO'S OBSERVATI ONS IN THIS REGARD NEED TO BE DISCOUNTED. 5.8 THE EIGHTH POINT MADE BY THE AO WAS THAT THE IN VESTOR- COMPANIES WERE MERE NAME-LENDERS WITH NO BUSINESS R ECEIPTS. IN THIS CONTEXT, THE AR HAS OBSERVED THAT THE AO HAD COLLEC TED CERTAIN INFORMATION FROM THE ROC AND FROM THE INVESTORS' BA NKS. THAT DID NOT GIVE HIM SUFFICIENT INFORMATION TO UNDERSTAND THE B USINESS OF THE ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 9 INVESTORS. GIVEN THE SOURCES AND THE EXTENT OF THE AO'S INFORMATION, I AM UNABLE TO AGREE WITH THE AO'S OBSERVATIONS IN THIS REGARD. 5.9 THE NINTH POINT TOO IS A RELATED ONE. THE AO HA D. HELD THAT MERE PRODUCTION OF PANS AND BANK ACCOUNT DETAILS OF THE INVESTORS DID NOT ESTABLISH THEIR IDENTITY, WHICH COULD ONLY BE ESTAB LISHED THROUGH THEIR BUSINESS RECEIPTS. THE AR POINTED OUT THAT HE HAD D ULY FILED BEFORE THE AO EXTENSIVE DOCUMENTATION TO PROVE THE IDENTITY AN D THE GENUINENESS OF THE INVESTORS. THE ONLY WAY TO ASCERTAIN DETAILS OF THEIR BUSINESSES AND THEIR RECEIPTS WOULD BE BY STEPPING INTO THE SHOES OF THEIR AOS. AFTER CAREFUL CONSIDERATION, I FEEL COMPELLED TO SEE THE LOGIC OF THIS AVERMENT. 5.10 COMING TO THE CASE-LAWS RELIED ON AND EX TRACTED BY THE AO IN HIS ORDER, THE AR STATED THAT THE AO WAS IN ERROR I N RELYING ON THEM AS THEIR FACTS SPOKE FOR THEMSELVES. HE SUBMITTED THAT THE EXTRACT OF THE AO WAS SELF-SERVING IN THAT IT DID NOT BRING OUT THE C RUCIAL DIFFERENCES IN THE CASE OF THE APPELLANT AND THOSE OF THE TWO ASSESSEE S. IN THE CASE OF CIT V. N. R. PORTFOLIO PVT. LTD. (SUPRA), THE AR SUBMIT TED THAT THE DEPARTMENT HAD RECEIVED INFORMATION FROM THE INVESTIGATION WIN G THAT THE ASSESSEE WAS ONE OF THE BENEFICIARIES WHO HAD PROCURED SHARE APPLICATION MONEY FROM 24 ENTRY-PROVIDERS. IN THAT CASE, THE ASSESSEE HAD NOT AT ALL CO- OPERATED WITH THE DEPARTMENT. THE SOLE ACTIVITY OF THE SHARE-APPLICANTS, TOO WAS DEPOSIT OF CASH INTO THE BANK ACCOUNT AND D IRECT ISSUE OF CHEQUES AS SHARE APPLICATION MONEY. NO SUPPORTING D OCUMENTS WHATSOEVER - EXCEPT FOR PANS OF THE APPLICANTS - HA D BEEN SUBMITTED TO THE DEPARTMENT. NO AUDITED ACCOUNTS OF THE INVESTOR -COMPANIES WERE SUBMITTED TO THE DEPARTMENT EITHER. THE DIRECTOR O F THE ASSESSEE- COMPANY TOO WAS NOT ABLE TO GIVE SATISFACTORY REPLI ES TO QUERIES ABOUT THE SHAREHOLDERS. LASTLY, MOST OF THE SUMMONSES TO THE SHARE-APPLICANTS REMAINED UNSERVED FOR WANT OF CORRECT ADDRESSES. AC CORDING TO THE AR, EACH AND EVERY ONE OF THESE ISSUES HAD BEEN DIFFERE NTLY DEALT WITH BY THE APPELLANT, WHOSE COMPLIANCE AND DOCUMENTATIO N HAD BEEN IMMACULATE AND WHOSE CO-OPERATION ABSOLUTE. COMING TO THE SECOND AND LAST CASE RELIED ON BY THE AO VIZ. ONASSIS AXLES PV T. LTD. V. CIT (SUPRA), THE AR POINTED OUT THE FOLLOWING DISTINGUISHING FAC TORS. IN SPITE OF BEING ASKED, THE ASSESSEE FAILED TO PROVIDE INFORMATION A BOUT THE INVESTORS. IT HAD FAILED TO SUBMIT DETAILS OF THE BANK ACCOUNTS O F THE INVESTOR- COMPANIES, NAMES OF THEIR DIRECTORS AND COPIES OF T HEIR AUDITED ACCOUNTS IN SPITE OF BEING SPECIFICALLY ASKED TO DO SO. FURT HER, IT WAS FOUND OUT THAT THE SHARE-APPLICANTS HAD NO BANK ACCOUNTS AT ALL ON THE DATE OF ISSUE OF THE PAY ORDERS FOR THE SHARE-APPLICATIONS, THE SAID ACCOUNTS HAVING BEEN OPENED LATER TO REGULARIZE THE MATTER. MOST OF THE SUMMONSES ISSUED TO THE SHARE-APPLICANTS TOO WENT UNSERVED FOR WANT OF CORRECT ADDRESSES. ONCE MORE, THE AR WAS AT PAINS TO POINT OUT THE COM PLETE CONTRAST IN THE CASES; OF THAT ASSESSEE AND THE APPELLANT. AFTER CA REFUL CONSIDERATION, IT IS CLEAR THAT THE RELIANCE OF THE AO ON THE AFORECITED DECISIONS IS MISPLACED, ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 10 THEIR FACTS BEING AT COMPLETE VARIANCE WITH THE FAC TS OF THE APPEAL UNDER CONSIDERATION. 5.11 AFTER CAREFULLY CONSIDERING THE ORDER OF THE A O AND THE SUBMISSIONS OF THE AR, I HAVE COME TO THE CONCLUSIO N THAT SUFFICIENT MATERIAL HAS BEEN PUT FORTH BY THE AR TO COMPELLING LY PROVE THE PROVENANCE AS WELL AS THE GENUINENESS OF THE SHARE- APPLICATION MONEY RECEIVED BY THE APPELLANT BY WAY OF PREMIUM. I AM A LSO SATISFIED THAT THE IDENTITY, CREDITWORTHINESS AND THE GENUINENESS OF T HE SHARE-APPLICANTS HAS BEEN ADEQUATELY SUBSTANTIATED. EVEN THE DECISIO NS RELIED ON BY THE AO AND DISCUSSED IN THE PRECEDING SUB-P ARAGRAPH STAND DISTINGUISHED ON FACTS. 5.12 COMING TO THE CASE-LAWS CITED BY THE AR ON THE ISSUE CHARGEABILITY OF SHARE PREMIUM TO TAX, THE HON'BLE SUPREME COURT HAD APPROVED THE DECISION OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF CIT V. STELLAR INVESTMENT LTD. (SUPRA)'. THE HON'BL E HIGH COURT OF DELHI (IN ITS DECISION REPORTED IN 192 ITR 287) HAD HELD THAT EVEN IF THE SUBSCRIPTION TO THE SHARE-CAPITAL WAS NOT GENUINE, THE SAID AMOUNT COULD NOT BE REGARDED AS THE UNDISCLOSED INCOME OF THE AS SESSEE-COMPANY. THE HON'BLE HIGH COURT OF MADRAS HAD HELD SIMILARLY IN ITS DECISION IN THE CASE OF CIT V. ELECTRO POLYCHEM LTD. (SUPRA). FURTH ER, THE MUMBAI BENCH OF THE HON'BLE TRIBUNAL - IN THE CASE OF GREEN INFR A LTD. V. ITO (SUPRA) - HAD HELD THAT THE SHARE PREMIUM REALIZED FROM THE I SSUE OF SHARES WAS CAPITAL IN NATURE AND THAT IT FORMED PART OF THE SH ARE CAPITAL OF THE COMPANY AND COULD THEREFORE NOT BE TAXED AS A REVEN UE RECEIPT. IT IS HENCE CLEAR THE ISSUE OF CHARGEABILITY OF SHARE PRE MIUM TO TAX HAS BEEN CONSISTENTLY HELD IN THE ASSESSEE'S FAVOUR BY VARIO US SUPERIOR JUDICIAL AUTHORITIES WHICH HAVE OBSERVED THAT IT IS A RECEIP T ON CAPITAL ACCOUNT. HERE IS ALSO NOTEWORTHY THAT THE AMENDMENT BY WAY O F INSERTION OF CLAUSE (VIIB) IN EXPLANATION TO SECTION 56(2) OF TH E ACT - WHEREBY SHARE PREMIUM HAS MADE BEEN CHARGEABLE TO TAX UNDER CERTA IN CIRCUMSTANCES - HAS COME INTO FORCE WITH EFFECT FROM 1 ST APRIL 2013 AND IS HENCE NOT APPLICABLE TO THE ASSESSMENT YEAR UNDER CONSIDERATI ON. 5.13 IN VIEW OF THE DISCUSSION IN THE PRECEDI NG SUB-PARAGRAPHS AND AFTER RESPECTFULLY FOLLOWING THE AFORECITED DECISIO NS OF THE SUPERIOR JUDICIAL AUTHORITIES, IT IS HELD THAT THE SHARE PREMIUM OF ` 3,14,50,000/- RECEIVED BY THE APPELLANT IS NOT CHARGEABLE TO TAX. THE ADDI TION MADE BY THE AO ON THIS COUNT IS ACCORDINGLY DELETED. 6. THE LEARNED DR SUBMITTED THAT THE LEARNED CIT (A ) ERRED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER TOWARDS UNE XPLAINED CREDIT U/S. 68 OF THE ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 11 INCOME TAX ACT, 1961 IN RESPECT OF SHARE APPLICATIO N MONEY RECEIVED BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASS ESSING OFFICER HAS BROUGHT OUT CLEAR FACTS IN THE LIGHT OF EVIDENCE FILED BY THE A SSESSEE THAT THESE TRANSACTIONS ARE NON-GENUINE TRANSACTIONS. THE ASSESSEE HAS CIRCULA TED CAPITAL USING LAYERED TRANSACTIONS THROUGH VARIOUS COMPANIES. THE DR FUR THER SUBMITTED THAT MERE PRODUCTION OF CERTAIN EVIDENCE TO PROVE THE IDENTIT Y OR BANK STATEMENT TO PROVE THAT SAID TRANSACTIONS IS ROUTED THROUGH BANK ACCOUNT IS NOT SUFFICIENT TO COME OUT OF THE CLUTCHES OF SECTION 68 OF THE INCOME TAX ACT, 1961 AND WHAT NEEDS TO BE ASCERTAINED IS WHETHER THE TRANSACTIONS ARE GENUINE AND THE SUBSCRIBER COMPANIES HAVE ENOUGH SOURCE TO ESTABLISH AMOUNT INVESTED IN THE ASSESSEES COMPANY. IN THIS CASE, THE ASSESSING OFFICER HAS BROUGHT OUT CL EAR FACTS TO THE AFFECT THAT THE ASSESSEE HAS FAILED TO PASS THE TEST OF GENUINENESS AS ALL SEVEN INVESTOR COMPANIES DOES NOT HAVE ANY CREDIBLE BUSINESS ACTIVITY TO PRO VE THAT THEY ARE HAVING CAPACITY TO SUBSCRIBE SHARE CAPITAL OF THE ASSESSEE COMPANY. THE CIT(A) WITHOUT APPRECIATING THESE FACTS SIMPLY DELETED THE ADDITIO NS MADE BY THE ASSESSING OFFICER. 7. THE LEARNED AR FOR THE ASSESSEE, ON THE OTHER HA ND STRONGLY SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE CIT(A) H AS APPRAISED THE FACTS IN RIGHT PERSPECTIVE IN THE LIGHT OF THE EVIDENCES PLACED BY THE ASSESSEE INCLUDING FINANCIAL POSITION OF SEVEN COMPANIES WHO SUBSCRIBED TO SHARE CAPITAL OF THE ASSESSEE COMPANY WHICH PROVE THE CAPACITY OF THE INVESTORS A ND GENUINENESS OF TRANSACTIONS. THE ASSESSING OFFICER NEVER DOUBTED IDENTITY OF INV ESTORS. THIS IS EVIDENT FROM THE FACT THAT HE ACCEPTED ENORMOUS DETAILS FILED BY THE ASSESSEE TO PROVE THE IDENTITY AND ALSO HE HIMSELF HAS OBTAINED NECESSARY DETAILS FROM THE COMPANIES BY ISSUING ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 12 NOTICE U/S. 133(6) IN RESPONSE TO WHICH ALL THE SEV EN INVESTORS HAVE FILED DETAILS AS WAS CALLED FOR BY THE ASSESSING OFFICER. THE ASSES SING OFFICER HAS ONLY POINTED OUT THAT THESE TRANSACTIONS ARE NOT GENUINE IN NATURE O N THE BASIS OF HIS OWN APPRAISAL OF FACTS. BUT FACT REMAINS THAT ASSESSEE HAS FILED VARIOUS DOCUMENTS TO PROVE THAT THESE TRANSACTIONS ARE GENUINE AND THAT THE ASSESSE E COMPANY HAS ENTERED INTO INVESTMENT AGREEMENT WITH ALL SEVEN COMPANIES FOR E XPANSION OF EXISTING BUSINESS FOR WHICH NECESSARY EVIDENCES HAVE BEEN PLACED BEFO RE THE ASSESSING OFFICER IN THE FORM OF FEASIBILITY REPORT. THE AR FURTHER SUBMITT ED THAT ONCE THE ASSESSEE HAS DISCHARGED INITIAL BURDEN BY FILING NECESSARY EVIDE NCE, THE ONUS SHIFTS ON THE REVENUE TO PROVE OTHERWISE. IN THIS CASE, THE ASSE SSING OFFICER IGNORING ALL EVIDENCES FILED BY THE ASSESSEE MADE ADDITION TOWAR DS SHARE CAPITAL U/S. 68 OF THE ACT, 1961, ONLY ON SUSPICION AND SURMISES BY DOUBTI NG THE GENUINENESS OF TRANSACTIONS MERELY FOR A SIMPLE REASON THAT THE IN VESTMENT COMPANY DOES NOT HAVE REGULAR BUSINESS INCOME AND THEY ARE INVOLVED IN PR OVIDING ACCOMMODATION ENTRIES. BUT, FACT REMAINS THAT ALL THESE COMPANIES ARE HAVI NG REGULAR BUSINESS AND THEY ARE ACTIVE COMPANIES FILING REGULAR RETURN BEFORE THE I NCOME TAX AUTHORITIES AS WELL AS ROC FOR WHICH ASSESSEE HAS FILED A REPORT OBTAINED AS PER WHICH ALL THESE COMPANIES ARE ACTIVE IN THE WEBSITE OF ROC AND FILED FINANCIA L STATEMENTS UP TO F.Y. 2016-17. THEREFORE, THE LEARNED AR CONTENDED THERE IS NO REA SON FOR THE ASSESSING OFFICER TO MAKE ADDITIONS AND, ACCORDINGLY, THE CIT(A) HAS RIG HTLY DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER AND HIS ORDER SHOULD BE UP HELD. TO SUPPORT HIS ARGUMENTS, THE LEARNED AR RELIED UPON THE FOLLOWING CASE LAWS: CIT VS. LOVELY EXPORTS (P.) LTD. [2008] 216 CTR 195 (SC) DATED 11 TH JANUARY 2008 ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 13 CIT VS. GAGANDEEP INFRASTRUCTURE PVT LTD. ITA NO.16 13 OF 2014 (BOMBAY HIGH COURT DATED 20 TH MARCH 2017 CIT VS. ORCHID INDUSTRIES PVT. LTD. ITA NO. 1433 OF 2014 (BOMBAY HIGH COURT DATED 5 TH JULY 2017 JASAMRIT CONSTRUCTION PRIVATE LTD. VS. ITO ITA NO. 1091/MUM/2011 (ITAT, MUMBAI) ORDER DATED 8 TH FEBRUARY 2018 PR CIT VS. M/S. APEAK INFOTECH, NAGPUR, ITA NO.26/2 017 (BOMBAY HIGH COURT) DATED 8 TH JULY 2017 UMBRELLA PROJECTS PVT. LTD. VS. ITO ITA NO.5955/DEL /2014 (ITAT DELHI) ORDER DATED 23 RD FEBRUARY 2018 PR. CIT VS. M/S. PARADISE INLAND SHIPPING PVT. LTD. ITA NO.66 OF 2016 (BOMBAY HIGH COURT) DATED 10 TH APRIL 2017 DCIT VS. ALCON BIOSCIENCES P. LTD. ITA NO.1946/MUM/ 2016 (ITAT MUMBAI) DATED 28 TH FEBRUARY 2018 PR CIT VS. ROYAL FINVEST PVT LTD ITA NO.359/2018 & CM APPL 11642 (DELHI HIGH COURT) DATED 23 RD MARCH, 2018 CIT VS. GREEN INFRA LTD. ITA NO.1162 OF 2014 (BOMBA Y HIGH COURT) DATED 16 TH JANUARY 2017 ITO VS. M/S. SRINGERI TECHNOLOGIES PVT. LTD. ITA NO .3924/MUM/2014 (ITAT- MUMBAI BENCH E) DATED 29 TH DECEMBER 2017 ARCELI REALTY LIMITED (FORMERLY KNOWN AS ELLORA ELE CTRICAL LTD. ) VS. ITO ITA NO.6492/MUM/2016 (ITAT MUMBAI BENCH A) DATED 21 ST APRIL 2017 PCIT VS. VEEDHATA TOWER PVT LTD ITA NO.819 OF 2015 (BOMBAY HIGH COURT) DATED 17 TH APRIL 2018 PCIT VS. M/S. TRN ENERGY PVT. LTD. CO NO.96/DEL/201 6 ARISING OUT OF ITA NO.543/DEL/2016 (ITAT-DELHI BENCH B , ORDER DATED 1 ST JANUARY 2018 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED M ATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ONLY ISSUE THAT NEEDS TO BE RESOLVED IS WHETHER, ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE, ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 14 SHARE APPLICATION MONEY RECEIVED FROM 7 COMPANIES I S UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME-TAX ACT, 1961. THE AO HAS MADE ADDITION OF RS. 3,14,50,000/- TOWARDS SHARE CAPITAL FROM 7 COMPANIE S AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAS ESTABLISHED IDENTITY OF SUBSCRIBER TO THE SHARE CAPITAL, BUT FAILED T O PROVE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE PARTIES. THE AO HAS BRO UGHT OUT VARIOUS REASONS TO COME TO THE CONCLUSION THAT THE ALLEGED SUBS CRIBER TO THE SHARE CAPITAL ARE PAPER COMPANIES AND THEY DID NOT HAVE ANY BUSINESS ACTIVITY TO SUBSTANTIATE SUBSCRIPTION OF HUGE SHARE CAPITAL TO THE ASSESSEE COMPANY. ACCORDING TO THE AO, ALL THESE COMPANIES ARE PAPER COMPANIES, DID NOT HAVE ANY ACTUAL BUSINESS ACTIVITY. THE AO FURTHER OBSERVED THAT THESE COMPAN IES DID NOT HAVE ANY CAPACITY TO ESTABLISH CREDITWORTHINESS TO PROVE SUBSCRIPTION OF SHARE CAPITAL. THE AO FURTHER OBSERVED THAT THE ASSESSEE IS ALSO NOT JUSTIF IED IN ISSUING SHARE CAPITAL AT A PREMIUM OF RS.490 PER SHARE FOR SHARES HAVING FACE VALUE OF RS.10 PER SHARE. ACCORDING TO THE AO, ALL THESE SEQUENCE OF EVENTS P ROVES AN UNDOUBTED FACT THAT THESE COMPANIES ARE PAPER COMPANIES AND THE ASS ESSEE IS NOT ABLE TO PROVE THE GENUINENESS OF TRANSACTION AND CREDITWORTHINE SS OF THE PARTIES AND HENCE, HE OPINED THAT THE ALLEGED SHARE CAPITAL RECEIVED FROM 7 COMPANIES IS UNEXPLAINED CASH CREDIT WHICH REPRESENTS UNACCOUNTED INCOME OF THE A SSESSEE AND ACCORDINGLY, MADE ADDITIONS U/S 68 OF THE ACT. 9. THE AO MADE ADDITION TOWARDS SHARE CAPITAL U/S 68 OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAS FAILED TO OFFER ANY EX PLANATION WITH REGARD TO THE CREDITS FOUND IN THE NATURE OF SHARE CAPITAL AND SHARE PREMIUM. THE PROVISIONS OF SECTION 68, DEALS WITH A CASE, WHERE ANY SUM FOUND CREDITED IN THE ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 15 BOOKS OF ACCOUNT OF THE ASSESSEE IN THE FIN ANCIAL YEAR FOR WHICH THE ASSESSEE, OFFERS NO EXPLANATION OR EXPLANATION OFFE RED BY THE ASSESSEE, IN THE OPINION OF THE AO IS NOT SATISFACTORY, THEN SUM FOU ND CREDITED MAY BE TREATED AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. A PLA IN READING OF SECTION 68, MAKES IT VERY CLEAR THAT TO FIX ANY CREDIT WITHIN THE AMBIT OF SECTION 68 OF THE ACT, THE AO HAS TO EXAMINE 3 INGREDIENTS, I.E. IDENTITY, GENUINENES S OF TRANSACTION AND CREDITWORTHINESS OF THE PARTIES. IF, THE ASSESSEE PROVES ALL 3 INGREDIENTS, THEN THE ONUS SHIFTS TO THE AO TO PROVE OTHERWISE. SIMILARLY , THE PROVISO INSERTED BY THE FINANCE ACT, 2012 WEF 01-04-2013 DEALS WITH THE CAS E WHERE THE SUM SO CREDITED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM, BY WHATEVER NAME CALLED AND EXPLANATION OFFERED BY SUCH A SSESSEE SHALL BE DEEMED TO BE NOT SATISFACTORY UNLESS SUCH PERSON BEING A RECIPIENT IN WHOSE NAME SUCH CREDIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALS O OFFERS AN EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITE D. AS PER THE PROVISO, IF THE ASSESSEE FAILS TO EXPLAIN THE SOURCE OF SOURC E OF SHARE CAPITAL OR SHARE APPLICATION MONEY, THEN THE ADDITION CAN BE MADE TO WARDS SHARE CAPITAL, AND SHARE APPLICATION MONEY IN THE HANDS OF THE ASSESSEE U/S 68 OF THE INCOME-TAX ACT, 1961. WHETHER PROVISO INSERTED BY THE FINANCE ACT W.E.F. 01-04-2013 IS APPLICABLE PROSPECTIVELY OR RETROSPECTIVELY, HAS BEEN DECIDED BY VARIOUS COURTS. ACCORDING TO THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COUR T IN THE CASE OF CIT VS GAGANDEEP INFRASTRUCTURE LTD (2017) 394 ITR 680 (BOM), THE HONBLE COURT OBSERVED THAT PROVISO INSERTED TO SECTION 68 W.E.F. 01-04-2013 IS CONSIDERED TO BE PROSPECTIVE IN NATURE AND APPLICABLE FROM A.Y.20 13-14 ONWARDS. THEREFORE, WE ARE OF THE VIEW THAT NO ADDITION CAN BE MADE U/S 68 OF THE INCOME-TAX ACT, ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 16 1961 IN RESPECT OF SHARE CAPITAL AND SHARE APPLICAT ION MONEY OR SHARE PREMIUM BEFORE INSERTION OF PROVISO TO SECTION 68, IF SOURC E OF SOURCE IS NOT EXPLAINED BY THE ASSESSEE. 10. HAVING SAID SO, LET US EXAMINE WHETHER THE AS SESSEE HAS DISCHARGED BURDEN CAST UPON IT UNDER SECTION 68 OF THE INCOME-TAX ACT , 1961 IN RESPECT OF SHARE CAPITAL RECEIVED FROM SUBSCRIBERS. THE AO HAS NOT DISPUTED THE FACT THAT THE ASSESSEE HAS FURNISHED VARIOUS EVIDENCES TO PROVE IDENTITY OF THE SUBSCRIBERS. THE AO CATEGORICALLY ADMITTED IN HIS ASSESSMENT ORDER THAT THE ASSESSEE HAS FILED VARIOUS DETAILS INCLUDING PAN, CIN MASTER DATA AND IT ACKNO WLEDGEMENT RECEIPT OF SUBSCRIBERS TO PROVE THE IDENTITY. THE AO HAS DISP UTED GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. ACCORDING TO T HE AO, THE SUBSCRIBERS TO THE SHARE CAPITAL ARE NOT HAVING CAPACITY TO PRO VE CREDITWORTHINESS AND ALSO THE TRANSACTION WITH THE ASSESSEE COMPANY ARE NOT GENUI NE. THE AO HAS GIVEN VARIOUS REASONS TO COME TO THE CONCLUSION THAT THE ASSESSEE HAS FAILED TO DISCHARGE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE PARTIES. ACCORDING TO THE AO, MERE FURNISHING OF INCOME-TAX RETURNS AND BALANCE-SHEETS OF SUBSCRIBERS WOULD NOT BE SUFFICIENT COMPLIANCE OF DISCHARGING G ENUINENESS OF TRANSACTIONS, THAT TOO, IN A CASE WHERE NOTICE ISSUED U/S 133( 6) TO THE SUBSCRIBERS TO THEIR GIVEN ADDRESSES WERE REMAIN UN SERVED. THE AO ALSO DOUBTED CONFIRMATION FILED BY THE ASSESSEE AND ALSO SHARE APPLICATION FORMS. T HE AO HAS DOUBTED APPLICATION FORM FOR ISSUE OF SHARE AND AUDIT REPORTS TO COME T O THE CONCLUSION THAT THE SHARE APPLICATION FORMS ISSUED BY THE ASSESSEE ARE STEREO TYPED. THE AO FURTHER HELD THAT THE TRANSACTIONS BETWEEN THE ASSESSEE AND THE INVES TOR COMPANIES FAIL ON THE TEST OF GENUINENESS BECAUSE THE ASSESSEE HAS FAILED TO E STABLISH THAT THE INVESTING ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 17 COMPANIES WERE GENUINE INVESTORS. THE ASSESSING OF FICER FURTHER OBSERVED THAT INVESTING COMPANIES HAVE BEEN USED BY THE ASSESSEE FOR INTRODUCTION OF CAPITAL INTO THE ASSESSEE COMPANY THROUGH THE PROCESS OF LAYERIN G TRANSACTIONS AND THE WHOLE TRANSACTION IN THE GRAB OF SHARE APPLICATION MONEY IS ONLY A COLORABLE DEVICE USED BY THE ASSESSEE TO MAKE THE TRANSACTION APPEAR GENUINE . 11. HAVING CONSIDERED ARGUMENTS OF BOTH THE SIDES AND MATERIALS AVAILABLE ON RECORD, WE DO NOT FIND ANY MERIT IN THE REASONS GIVEN BY THE AO TO COME TO THE CONCLUSION THAT THE ASSESSEE HAS FAILED TO P ROVE THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE PARTIES ON THE GROUND THAT THE ASSESSEE HAS FILED ENORMOUS DETAILS IN RESPECT OF 7 COMPA NIES INCLUDING THEIR PAN DETAILS, CIN MASTER DATA, BANK STATEMENTS, AUDITED FINANCIAL STATEMENTS, FORM 2 FILED WITH ROC AND STATUS REPORT OF COMPANIES. THE AO ALSO ISS UED NOTICES U/S 133(6) TO ALL 7 COMPANIES FOR WHICH ALL SEVEN COMPANIES HAVE FILED NECESSARY DETAILS AND CONFIRMED PURCHASE OF SHARES. THE ASSESSEE ALSO FILED A C ERTIFICATE FROM A CHARTERED ACCOUNTANT, CERTIFYING THE ACTIVE STATUS OF THE C OMPANY IN THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS. ON GOING THROUGH VARIOUS DETA ILED FILED BY THE ASSESSEE, WE FIND THAT THERE IS NO REASON FOR THE AO TO DO UBT THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIE S. WE, FURTHER NOTICE THAT ALL 7 COMPANIES ARE ACTIVE IN THE WEBSITE OF ROC AND ALS O THEY HAVE FILED THEIR BALANCE- SHEET UP TO 31-03-2016 AND IN SOME CASES UP TO 31-0 3-2017. WE FURTHER NOTICE THAT THE ASSESSEE HAS FILED BALANCE-SHEET OF ALL 7 SUBSCRIBERS WHEREIN THEY HAVE HUGE SHARE CAPITAL AND RESERVES AND SURPLUS TO ESTA BLISH CREDITWORTHINESS OF THE PARTIES. ON PERUSAL OF THE BALANCE-SHEET FILED BY T HE ASSESSEE, WE FIND THAT THE AGGREGATE OF SHARE CAPITAL AND RESERVES OF 7 COMPAN IES IS AT RS.142.16 CRORES, ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 18 WHEREAS INVESTMENT IN ASSESSEE COMPANY IS ONL Y RS.3,14,50,000/-. WE FURTHER NOTICE THAT ALL COMPANIES ARE HAVING REGULAR BUSINE SS ACTIVITIES AND THEY ARE FILING REGULAR INCOME TAX RETURNS. ALL THESE EVIDENCES GO TO PROVE AN UNDOUBTED FACT THAT THESE COMPANIES ARE NOT PAPER COMPANIES AND ARE ACT IVELY INVOLVED IN BUSINESS ACTIVITY. WE, FURTHER OBSERVE THAT THE ASSESSEE AL SO FILED CONFIRMATION FROM ALL SEVEN PARTIES AND IN FACT THEY HAVE RESPONDED TO 13 3(6) NOTICES AND FILED NECESSARY CASE DETAILS. WE, FURTHER NOTICE THAT THE ASSE SSEE HAS FURNISHED BANK STATEMENT OF SUBSCRIBERS WHEREIN WE DO NOT FIND ANY INSTANCE OF CASH DEPOSITS OR TRANSFER FROM OTHER COMPANIES PRIOR TO THE DATE OF TRANSFER TO THE ASSESSEE COMPANY, EXCEPT ONE OR TWO CASH DEPOSITS. THEREFORE , WE ARE OF THE VIEW THAT THE AO WAS INCORRECT IN TREATING SHARE CAPITAL ALONG WI TH SHARE PREMIUM AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME-TAX ACT, 1961. 12. COMING TO THE OBSERVATION OF THE AO WITH REGAR D TO THE ISSUE OF SHARES AT A PREMIUM. THE AO HAS QUESTIONED THE ISSUE OF SHARES AT A PREMIUM OF RS.490 PER SHARE WITH A FACE VALUE OF RS.10 PER SHARE ON THE G ROUND THAT THE ASSESSEE IS NEW COMPANY WITHOUT ANY BUSINESS, NOT ABLE TO JUSTIFY I SSUE OF SHARES AT A PREMIUM OF RS.490 PER SHARE. WE DO NOT FIND ANY MERIT IN THE F INDINGS OF THE AO FOR THE REASON THAT THE ISSUE OF SHARES AT A PREMIUM AND SUBSCRIPT ION TO SUCH SHARES IS WITHIN THE KNOWLEDGE OF THE COMPANY AND THE SUBSCRIBERS TO THE SHARE CAPITAL AND THE AO DOES NOT HAVE ANY ROLE TO PLAY AS LONG AS THE ASSESSEE H AS PROVE THE GENUINENESS OF TRANSACTIONS. IN THIS CASE, THE ASSESSEE HAS FILE D VALUATION REPORT FROM TWO INDEPENDENT VALUES WHO HAD DETERMINED VALUE OF SHAR E AT RS. 500 TO RS. 1500 PER SHARE ON NAV METHOD AND DCF METHOD. THEREFORE, WE A RE OF THE CONSIDERED VIEW THAT THE AO CANNOT QUESTION THE ISSUE OF SHARES A T A PREMIUM AND ALSO CANNOT ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 19 BRING TO TAX SUCH SHARE PREMIUM WITHIN THE PRO VISIONS OF SECTION 68 OF THE ACT, BEFORE INSERTION OF PROVISO TO SECTION 68 BY THE FINANCE ACT, 2012 WEF 01-04- 2013 WHICH IS EVIDENT FROM THE FACT THAT THE HONBLE BOMBAY HIGH COURT HAS HELD THAT PROVISO INSERTED TO SECTION 68 IS NOT PRO SPECTIVE IN NATURE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN TREATING SHARE CAPITAL AND SHARE PREMIUM AS UNEXPLAINED CREDIT U/S 68 OF THE ACT, ON FLIMSY GROUNDS IGNORING ALL EVIDENCES FILED BY THE ASSESSEE. 13. THE PRIMARY ONUS TO PROVE CREDITS FOUND IN THE BOOKS OF ACCOUNT IS ON THE ASSESSEE. WHETHER THE ASSESSEE HAS DISCHARGED ITS ONUS OR NOT IS DEPENDS UPON THE FACTS OF EACH CASE. IT DEPENDS UPON WHETHER TH E TWO PARTIES ARE RELATED OR KNOWN TO EACH OTHER; THE MANNER IN WHICH PARTIES AP PROACH EACH OTHER; WHETHER THE TRANSACTION WAS ENTERED INTO THROUGH WRITTEN DO CUMENTATION TO PROTECT THE INVESTMENT; WHETHER THE INVESTOR PROFESSES AND WAS AN ANGEL INVESTOR; THE QUANTUM OF MONEY, CREDITWORTHINESS OF THE RECIPIENT AND THE OBJECT AND PURPOSE FOR WHICH PAYMENT/INVESTMENT WAS MADE ETC. IF YOU COLLECTIVE LY EXAMINE THESE ASPECTS IN THE LIGHT OF EVIDENCES FILED BY THE ASSESSEE INCLUDING CERTIFICATE OF INCORPORATION OF COMPANY, PAYMENT BY BANKING CHANNEL, PAN AND THEIR INCOME TAX RETURN, ESTABLISHES THE FACT THAT THE ASSESSEE HAS PROVED I DENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE CREDITORS. THE FACT OF THE PRESET CASE NOTICED ABOVE SPEAKS ABOUT THESE ASPECTS. IN THIS C ASE, NO DOUBT, THE ASSESSEE HAS PROVED IDENTITY BY FILING VARIOUS DOCUMENTS AND IN FACT THE ASSESSING OFFICER NEVER DISPUTED IDENTITY OF SEVEN INVESTOR COMPANIES. THE ASSESSEE ALSO FILED EVIDENCES LIKE BANK STATEMENTS TO PROVE THAT THESE TRANSACTIO NS WERE TOUTED THROUGH BANKING CHANNELS. ON PERUSAL OF THE DETAILS FILED BY THE AS SESSEE, ONE THING CLEARLY EMERGES ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 20 IS THAT TRANSACTION IS GENUINE AND THEY PASS THE TE ST OF GENUINENESS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS DI SCHARGED ITS BURDEN CAST U/S. 68 OF THE ACT TO PROVE IDENTITY, GENUINENESS OF TRANSA CTION AND CREDITWORTHINESS OF THE PARTIES. THE ASSESSING OFFICER HAS MADE ADDITION T OWARDS SHARE CAPITAL U/S. 68 OF THE ACT SIMPLY ON SUSPICIOUS AND SURMISE MANNER. 14. COMING TO THE CASE LAWS RELIED UPON BY THE ASS ESSEE. THE ASSESSEE HAS RELIED UPON PLETHORA OF JUDGEMENTS INCLUDING THE DEC ISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (2008) 216 CTR 195 (SC). IN THE CASE LAWS RELIED UPON BY THE ASSESSEE, THE ISSUE HAS BEE N DEALT AS UNDER:- CIT VS. GOA SPONGE AND POWER LTD (13/02/2012) TAX A PPEAL NO. 16 OF 2012 (HIGH COURT-BOMBAY) 'ONCE THE AUTHORITIES HAVE GOT ALL THE DETAI LS, INC LUDING THE NAME AND ADDRESSES OF THE SHAREHOLDERS, THEIR PAN/GIR NUMBER , SO ALSO THE NAME OF THE BANK FROM WHICH THE ALLEGED INVESTORS RECEIVED MONEY A S SHARE APPLICATION, THEN, IT CANNO T BE TERMED AS 'BOGUS'. THE CONTROVERSY IS COVERED BY THE JUDGEMENTS RENDERED B Y THE HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PVT LTD, VS. CIT, (2008) 216 CTR (SC) 195, AS ALSO BY THIS COURT IN C IT VS. CREATIVE WORLD TELE FILMS LTD, (2011) 333 ITR 100 (BOM). IN SUCH CIRCUMSTANCE S, WE ARE OF THEVIEW THAT THE TRIBUNAL'S FINDING THAT THERE IS NO JUSTIFICA TION IN THE ADDITION MADE UNDER SECTION 68 OF THE INCOME TAX ACT,, 1961 NEI THER SUFFERS FROM ANY PERVERSITY NOR GIVES RISE TO ANY SUBSTANTIAL QUESTION OF LAW.' CIT VS. CREATIVE WORLD TELE FILMS LTD (2011) 333 IT R 100 (BORN-HIGH COURT) 'THE QUESTION SOUGHT TO BE RAISED IN THE AP PEAL WAS ALSO RAISED BEFORE THE TRIBUNAL AND THE TRIBUNAL WAS PLEASED TO FOLL OW THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. (2008 ) 216 CTR (SC) 195. WHEREIN THE APEX COURT OBSERVED THAT IF THE SHARE APPLICA TION MONEY IS REC EIVED BY THE ASSESSEE-COMPANY FROM ALLEGED BOGUS SHAREHOLDER S, W HOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT CAN ALWAYS PROCEED AG AINST THEM AND IF NECESSARY REOPEN THEIR INDIVIDUAL ASSESSMENTS. IN THE CA SE IN HAND, IT IS NOT DISPUTED THAT THE ASSESSEE HAD GIVEN THE DETAILS OF N AME AND ADDRESS OF THE SHAREHOLDER, THEIR PAN/GIR NUMBER AND HAD ALS O GIVEN THE CHEQUE NUMBER, NAME OF THE BANK. IT WAS EXPECTED ONTHE PART OF THE AO TO MAKE PROPER INVESTIGATION AND REACH THE SHAREHOLDERS. THE AO DID NOTHING EXCEPT ISSUING SUMMONS WHICH WERE ULTIMATELY RETURNED BACK WIT H AN ENDORSEMENT 'NOT TRACEABLE IN OUR CONSIDERED VIEW, THE AO OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THE IR BANKERS SO AS TO REACH THE SHAREHOLDERS SINCE ALL THE RELEVANT MATERIAL D ETAILS AND PARTICULARS WERE GIVEN BY ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 21 THE ASSESSEE TO THE AO. IN THE ABOVE CIRCUMSTANCES , THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE FAULTED.' CIT VS. LOVELY EXPORTS (P) LTD (2008) 216 CTR 195 ( SC) 'IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO , THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSME NTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF ASSESSEE COMPANY.' CIT VS. STELLER INVESTMENT LTD (2001) 251 ITR 263 ( SC) (CIVIL APPEAL) 'THAT THE INCREASE IN SUBSCRIBED CAPITAL OF THE RESPONDENTCOMPANY COULD NOT BE A DEVICE OF CONVERTING BLACK MONEY INTO WHITE WITH THE HELP OF FORMATION OF AN INVESTMENT COMPANY, ON THE ROUND THAT, EVEN IF IT BE ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED CAPITAL WERE NOT GENUINE, TINDE R NO CIRCUMSTANCES COULD THE AMOUNT OF SHARE CAPITAL BE REGARDED AS UN DI SCLOSED INCOME, AN APPEAL WAS TAKEN BY THE DEPARTMENT TO TH E SUPREME COURT . THE SUPREME COURT DISMISSED THE APPEAL HOLDING THAT THE TRIBUNAL HAD COME TO A CONCLUSION ON FACTS AND NO INTERFERENCE WAS CALLED FOR.' CIT VS. NAV BHARAT DUOLEX LTD (2013) 35 TAXMANN.COM 289 (ALL-HIGH COURT) 'WE HAVE CONSIDERED THE ARGUMENTS OF THE COUNSEL FO R THE PARTIES. CIT(A) FOUND THAT FIVE COMPANIES SUBSCRIBING THE EQUITY SHARES A MOUNTING TO RS. 25,00.000/- WERE IDENTIFIED AND THEY HAD SUBMITTED THEIR BANK STA TEMENTS, CASH EXTRACTS AND RETURNS FILING RECEIPTS. AS SUCH IDENTITY OF THE SHAR E APPLICANT C OMPANIES AND PURCHASE OF SHARE HAD BEEN PROVED BY THE ASSESSEE. SU PREME COURT IN THE CASES OF CIT V. STELLER INVESTMENTS LTD. [2001] 251 ITR 263 A ND LOVELY EXPORTS CASE (SUPRA), HAS HELD THAT THE IDENTITY OF THE SHAREHOLDER ALO NE IS REQUI RED TO BE PROVED, IN CASE OF THE CAPITAL CONTRIBUTED BY THE SHARE HOLDERS. ACCORDINGLY CIT(A) AND THE TRIBUNAL HAS NOT COMMITTED ANY ILLEGALITY IN AL LOWING THE APPEAL OF THE ASSESSEE. WE DO NOT FIND ANY ILLEGALITY IN THE JUDGMENT OF THE C IT(A) AND THE TRIBUNAL.' CIT VS. JAYDEE SECURITIES & FINANCE LTD (2013) 32 T AXMANN.COM91 (ALL-HIGH COURT) 'THE TRIBUNAL RECORDED FINDINGS THAT THE ASSE SSEE HAD PRODUCED THE RETURN OF INCOME FILED BY THE RELEVANT SHAREHOLDERS WHO HAD P AID SHARE APPLICATION MONEY. THE ASSESSEE HAD ALSO PRODUCED THE CONFIRMATIO N OF SHARE HOLDERS INDICATING THE DETAILS OF ADDRESSES, PAN AND PARTICULARS OF CHEQUES THROUGH WHICH THE AMOUNT WAS PAID TOWARDS THE SHARE APPLICATION MONEY. THE TRIBUNAL THEREAFTER RELIED UPON THE JUDGMENT OF THE SUPREME COURT IN C IT V. LOVELY EXPORTS (P.) LTD WHEREIN IT WAS HELD THAT IF THE ASSESSEE PROD UCES THE NAMES, ADDRESSES, PAN DETAILS OF THE SHARE HOLDERS THEN THE ONUS ON T HE ASSESSEE TO PROVE THE SOURCE O F SHARE APPLICATION MONEY STANDS DISCHARGED. IF THE ASSESSI NG AUTHORITY WAS NOT SATISFIED WITH THE CREDITWORTHINESS OF TH E SHAREHOLDERS, IT WAS OPEN TO THE ASSESSING AUTHORITY TO VERIFY THE SAME IN THE H ANDS OF THE SHAREHOLDERS CONCERNED, THE TRIBUNAL HAS RELIED UPON AN ORDER OF THE SUPREME COURT IN CASE O F CIT V. DIVINE LEASING & FINANCE LTD. IN VIEW OF TH E DECISION 'OF THE SUPREME COURT, WE DISMISS THE APPEALS WITH OBSERVATIONS THAT THE D EPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS OF THE SHA REHOLDERS WHOSE NAMES AND DETAILS WERE GIVEN TO THE ASSESSING OFFICER.' ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 22 ACIT VS. VENKATESHWARLSPAT PVT LTD (2009) 319 ITR 3 93 (CHHATISGARH-HIGH COURT) 'IF THE SHARE APPLICATIONS ARE RECEIVED BY THE ASSE SSEE FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSIN G OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUA L ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS THE UNDISCLOSED INCOME OF THE ASSESSEE.' MOD CREATIONS PVT LTD VS. /TO (2013) 354 ITR 282 (D EL-HIGH COURT) 'HELD, ALLOWING THE APPEAL, (I) THAT THE ASS ESSEE HAD DISCHARGED THE INITIAL ONUS PLACED ON IT. IN THE EVENT THE REVENUE STILL HAD A DOUBT WITH REGARD TO THE GENUINENESS OF THE TRANSAC TIONS IN IS SUE OR AS R EGARDS THE CREDITWORTHINESS OF THE CREDITORS, IT WOULD HAVE HAD TO DISCHARGE THE ONUS WHICH HAD SHIFTED ON TO IT. A BALD ASSERTION BY THE ASSESSING OFFICER THAT THE CREDITS WERE A CIRCULAR ROUTE ADOPTED BY THE ASSESSEE TO PLOUGH BACK ITS OWN UNDISCLOSED INCOME INTO ITS ACCOUNTS, COULD BE OF N O AVAIL. THE REVENUE WAS REQUIRED TO PROVE THIS ALLEGATION. AN ALLEGATION BY ITSELF WHICH IS BASED ON ASSUMPTIO N WILL NOT PASS MUSTER IN LAW. THE REVENUE WOULD BE REQUIRED TO BRIDGE THE GAP BETWEEN THE SUSPICIONS AND PROOF IN ORDER TO BRING HOME THIS ALLEGATION. THE TRIBUNA L WITHOUT ADVERTING TO THE PRINCIPLE LAID STRESS ON THE FACT THAT DESPITE OPPORTUNITIE S, THE ASSESSEE AND/OR THE CREDITORS HAD NOT PROVED THE GENUINENESS OF T HE TRANSACTION. BASED ON THIS IT CONSTRUED THE INTENTIONS OF THE ASSESSEE AS BEING MALA FIDE. THE TRIBUNAL OUGHT TO HAVE ANALYSED THE MATERIAL RATHER THAN BE BURD ENED BY THE FACT THAT SOME OF THE CREDITORS HAD CHOSEN NOT TO MAKE A PERSONAL APPEARA NCE BEFORE THE ASSESSING OFFICER. IF THE ASSESSING OFFICER HAD ANY DOUBT ABOUT THE MATERIAL PLACED ON RECORD, WHICH WAS LARGELY BANK STATEMENTS OF THE CR EDITORS AND THEIR INCOME-TAX RETURNS, IT COULD GATHER THE NECES SARY INFORMATION FROM T HE SOURCES TO WHICH THE INFORMATION WAS ATTRIBUTABLE......IF IT HAD ANY DOUBTS WITH REGARD TO THEIR CREDITWORTHINESS, THE REVENUE COULD ALWAYS BRI NG THE SUM IN QUESTION TO TAX IN THE HANDS OF THE CREDITORS OR SUB- CREDITORS.' CIT VS. AL ANAM AGRO FOODS (P.) LTD (2013) 38 TAXMA NN.CORN 375 (ALL-HIGH COURT) TR IB U N A L, H O WE V E R , H E LD TH A T S I N C E ID E N TITY O F S H A R E H O LD E R S S T O O D P R O V E D O N RECORD, AMOUNT OF SHAR E APPLICATION MONEY COU LD NOT BE ADDED TO INCOME OF A SSESSEE. ACCORDING TO TRIBUNAL, IN SUCH A CASE AMOUNT COULD BE TAXED IN HANDS OF PERSONS WHO HAD INVESTED' CIT VS. DWARKADHISH INVESTMENT (P) LTD (2011) 330 I TR 298 (DEL-HIGH COURT) 'JUST BECAUSE THE CREDITORS/SHARE APPLICANTS C OULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIG HT TO INVOKE S. 68 REVENUE HAS ALL THE POWE R AND WHEREWITHAL TO TRACE ANY PERSONMOREOVER, IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT TO PROVE THE 'SOURCE OF SOURCE' IN THE INSTANT CASE, THE TRIBUNAL HAS CONFIRMED THE OR DER OF THE CIT( A) DELETING THE IMPUGNED ADDITION HOLDING T HAT THE ASSESSEE HAS BEEN ABLE TO PROVE THE IDENTITY OF THE SHARE APPLICANTS AND THE SHARE APPLICATION MONEY HAS BEENRECEIVED BY WAY OF ACCOUNT PAYEE CHEQUES.' CIT VS. NAMASTEY CHEMICALS PVT LTD (2013) 33 TAXMAN N.COM271 (GUJ-HIGH COURT) ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 23 'IN THE PRESENT CASE ALSO, THE RESPONDENT AS SESSEE HAS RECEIVED SHARE APPLICATION MONEY FROM DIFFERENT SUB SCRIBERS. IT W AS FOUND THAT LARGE NUMBER OF SUBSCRIBERS HAD R ESPONDED TO THE LETTERS ISSUE D BY THE ASSESSING OFFICER OR S UMMONS ISSUED BY HIM AND SUBMITTED THEIR AFFI DAVITS. IN SO ME CASES SUCH REPLIES WERE NOT RECEIVED THROUGH POSTS. RS. 9 LACS REPRESENTED THOSE ASSESSEES WHO DENIED HAVING MADE ANY INVESTMENT ALTOGETH ER. THE ISSUE THUS WOULD FALL SQ UARELY WITHIN THE AMBIT OF THE JUDGMENT OF THE S UPREME COURT IN THE CASE NF LOVELY EXPORTS (SUPRA). NO ERROR OF LAW CAN BE STATED TO HAVE BEEN COMMITTED BY THE TRIBUNAL. TAX APPEAL IS THEREFORE DISMISSED.' CIT VS. PEOPLES GENERAL HOSPITAL LTD (2013) 356 ITR 65 (MP-HIGH COURT) ' HELD , D IS MIS S IN G TH E A P P EA LS , TH A T IT TH E A S S E S S EE H A D R E CE IV ED SUBSCRIPTIONS TO THE PUBLIC OR RIGHTS ISS U E THROUGH BANKING CHANNELS AND FURNISHED COMPLETE DET AILS OF THE SHAREHOLDERS, NO ADDITION COULD BE MADE TINDER SECTION 68 OF THE INCOME-TAX ACT, 1961, IN TH E ABSENCE OF ANY POSITIVE MATERIAL OR EVIDENCE TO INDICATE THAT THE SHAREHOLDERS WERE BENAMIDARS OR FICTITIOUS PERSONS OR THAT ANY PART O F THE SHARE CAPIT AL REPRESENTED THE COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. IT WAS NOBODY 'S CASE THAT THE NONRESIDENT INDIAN COMPANY WAS A BOGUS OR NON-EXISTENTCOM PANY OR THAT THE AMOUNT SUBSCRIBED BY THE COMPAN Y BY WAY OF SHARE S UBSCRIPTION WAS IN FACT THE MONEY OF THE ASSESSEE. THE ASSESSEE HAD ESTAB LISHED THE IDENTITY OF THE INVESTOR WHO HAD PROVIDED THE SHARE SUBSCRIPTION AN D THAT T HE TRANSACTION WAS GENUINE. THOUGH THE ASSESSEE'S CONT ENTION WAS THAT THE CREDITWORTHINESS OF THE CREDITOR WAS A LSO ESTABLISHED, IN THIS CASE, THE ESTABLISH MENT OF THEIDENTITY OF THE INVESTOR ALONE WAS TO BE SEEN. THUS, THE ADDITION WAS RIGHTL Y DELETED.' CIT VS. SHREE RAMA MULTI TECH LTD (2013) 34 TAXMANN .COM177 (GUJ-HC) 'IT IS NOTED THAT COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL HAVE DULY CONSIDERED ISSUE AND HAVING FOUND COMPLETE DET AILS OF THE RECEIPTS OF SHARE APPLICATION MONEY, A/ON GWITH THE FORM NAMES AND ADDRESSES, PAN AND OTHER REQUISITE DETAILS, THEY FOUND COMPLETE ABSENCE OF T HE GROUNDS NOTED FOR INVOKING THE PROVISION OF SECTION 68. MOREOVER, BOTH RIG HTLY HAD APPLIED THE DECISION OF CIT VS. LOVELY EXPORTS (P) LTD TO THE CASE OF THE ASSES SEE. THEREFORE, NO REASON WAS FOUND IN ABSENCE OF ANY ILLEGALITY MUCH LESS ANY PERVERSITY TOO TO INTERFERE WITH THE ORDER OF THE BOTH THESE AUTHORITIES, WHO HAD CONCURRENTLY HELD THE DUE DETAILS HAVING BEEN PROVED. THE ASSESSEE COMPANY HAD PRES ENTED THE NECESSARY WORTH PROOF BEF ORE BOTH THE AUTHORITIES AND IT WAS NOT EXPECTED BY THE ASSESSEECOMPANY TO FURTHER PROVE THE SOURCE OF THE DECEASED.' CIT VS. NIKUNJ EXIMP ENTERPRISES (P.) LTD (2013) 35 TAXRNANN.COM384 (BOM) 'WHETHER MERELY BECAUSE SUPPLIERS HAD NOT APP EARED BEFORE ASSESSING OFFICER OR COMMISSIONER (APPEALS), IT COU LD NOT BE C ONCLUDED THAT PURCHASES WERE NOT MADE BY ASSESSEE - HELD, YES.... FURTHER, THE RE WERE CONFIRMATION LETTERS FILED BY THE SUPPLIERS, COPIES OF INVOICES FOR PURC HASES AS WELL AS COPIES OF BANK STATEMENT ALL OF WHICH WOULD INDICATE THAT T HE PURCHASES WERE IN FACT MADE. IN OUR VIEW, MERELY BECAUSE THE SUPPLIERS HAVE N OT APPEARED BEFORE THE ASSESSING OFFICER OR THE CIT(A), ONE CANNOT CONCLUDE TH AT THE PURCHASES WERE NOT MADE BY THE RESPON DENT- ASS ESSEE' ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 24 CIT VS. SAMIR BIO- TECH PVT LTD (2010) 325 ITR 294 (DEL-HIGH COURT) 'IDENTITIES OF THE SUBSCRIBERS ARE NOT IN DO UBT. THE TRANSACTIONS HAVE ALSO BEEN UNDERTAKEN THROUGH BANKING CHANNELS INASMUCH AS THE APPLICATION MONEY FOR THE SHARES WAS GIVEN THROUGH ACCOUNT PAYEE CHEQUES. THE CREDITWORTHINESS HAS ALSO BEEN ESTABLISHED, AS INDICATED BY THE TRIBUNAL. THE SUBSCRIBERS HAVE GIVEN THEIR COMPLETE DETAILS WITH REGARD TO THEIR TAX RETURNS A ND ASSESSMENTS. IN THESE CIRCUMSTANCES, THE DEPARTMENT COULD NOT DR AW AN AD VERSE INFERENCE AGAINST THE ASSESSEE ONLY BECAUSE THE SUB SCRIBERS DID NOT INITIALLY RESPOND TO THE SUMMONS. THE SUBSCRIBERS, HOWEVER, SUBSEQUENTLY GAVE THEIR CONFIRMATION LETTERS AS WOULD BE APPARENT FROM THE IMPUGNED ORDER. THE IDENTITY OF THE SUBSCRIBERS STANDS ESTABLISHED AND IT IS ALSO A FACT THAT THEY HAVE SHOWN THE SAID AMOUNTS IN THEIR AUDITED BALANCE SHEETS AND HAVE ALSO FILED RE TURNS BEFORE THE IT AUTHORITIES. THE DECISION OF THE TRIBUNAL DELETING THE ADDIT ION CANNOT BEFAULTED. 15. THE ASSESSEE HAS ALSO RELIED UPON THE DECISION OF ITAT, MUMBAI HBENCH IN CASE OF M/S ALCON BIOSCIENCE PRIVATE LIMITED IN ITA . NO. 1946/M/2016, WHEREIN THE COORDINATE BENCH HAS CONSIDERED SIMILAR ISSUE AND A FTER FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. GAGAND EEP INFRASTRUCTURE PRIVATE LIMITED (2017) 394 ITR 680(BOM) AND ALSO THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE CIT VS. LOVELY EXPORTS PVT LTD(2008) 21 6 CTR 195 (SC) HELD AS UNDER. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE AO MADE ADDITIONS TOWARDS SHARE APPLICATION MONEY U/S 68 OF THE ACT ON THE GROUND T HAT THE ASSESSEE HAS FAILED TO DISCHARGE IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE PARTIES WHICH IS EVIDENT FROM THE FACT THAT THE AO HAS BROUGHT OU T CERTAIN FACTS WITH REGARD TO THE SHARE APPLICANTS BY ISSUING NOTICE U/S 133(6) OF TH E INCOME-TAX ACT, 1961. ACCORDING TO THE AO, THE ASSESSEE HAS RAISED SHARE APPLICATION M ONEY FROM THREE COMPANIES AND ALL THE THREE COMPANIES ARE HAVING BANK ACCOUNTS IN BAN K OF BARODA WHERE A SINGLE PERSON HAS OPERATED THE ACCOUNTS OF ALL THE COMPANIES. THE AO FURTHER OBSERVED THAT THE SHARE APPLICANTS HAVE RECEIVED MONEY FROM CERTAIN INDIVID UALS BEFORE THE DATE OF TRANSFER OF MONEY TO THE ASSESSEE COMPANY AND THOSE INDIVIDUALS HAVE DEPOSITED CASH ON THE SAME DAY OR A DAY BEFORE THE DATE ON WHICH THE MONEY HAS BEEN TRANSFERRED TO SHARE ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 25 APPLICANTS BANK ACCOUNT. THE AO FURTHER OBSERVED T HAT NOTICE U/S 133(6) WERE NOT SERVED AND THE PARTIES REFUSED TO ACCEPT THE NOTICE . THE AO ALSO OBSERVED THAT THE ASSESSEE FAILED TO EXPLAIN HOW IT HAS ISSUED SHARE HAVING FACE VALUE OF RS.10 WITH A HUGE PREMIUM OF RS.990 PER SHARE WHEN IT WAS AN UNL ISTED COMPANY. THEREFORE, THE AO OPINED THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES FROM SO-CALLED SHARE APPLICANTS TO CONVERT ITS OWN UNDISCLOSED INCOME IN THE GUISE OF SHARE APPLICATION MONEY. ACCORDINGLY TREATED SHARE APPLICATION MONEY RECEIVED FROM ALL THE THREE PARTIES AS UNEXPLAINED CREDIT AND BROUGHT TO TAX U/S 68 OF THE ACT. 8. THE AO HAS MADE ADDITION TOWARDS SHARE APPLICATI ON MONEY ON THE BASIS OF ANALYSIS OF BANK STATEMENTS OF SHARE APPLICANTS AND THE SOUR CE OF APPLICANTS BANK ACCOUNTS. THE ASSESSEE HAS FILED VARIOUS DETAILS INCLUDING SHARE APPLICATION FORMS, INCORPORATION CERTIFICATE OF THE SHARE APPLICANTS AND THEIR BANK STATEMENT. THE ASSESSEE ALSO FURNISHED COPY OF INCOME-TAX RETURN ACKNOWLEDGMENT IN RESPECT OF M/S HEMANG FINCAP SERVICES PVT LTD. ON VERIFICATION OF DETAILS FILED BY THE AS SESSE, WE FIND THAT THE SHARE APPLICANTS HAVE PAID SHARE APPLICATION MONEY TO THE ASSESSEE T HROUGH BANK ACCOUNTS AND ALSO DISCLOSED INVESTMENTS IN THEIR FINANCIAL STATEMENTS FOR THE RELEVANT FINANCIAL YEAR. THOUGH TWO SHARE APPLICANTS HAVE NOT FILED THEIR IN COME-TAX RETURNS, FURNISHED COPY OF PAN AND THEIR BANK STATEMENTS. ONCE THE ASSESSEE HA S DISCHARGED ITS INITIAL BURDEN CAST U/S 68 BY FILING DOCUMENTS TO PROVE IDENTITY, GENUI NENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES, THEN THE BURDEN SH IFTS TO THE REVENUE TO PROVE OTHERWISE. IN THIS CASE, THE AO DOES NOT HAVE ANY E VIDENCE WHICH COULD REBUT THE DOCUMENTS PRODUCED BY THE ASSESSEE. THE AO MADE ADD ITION ONLY ON THE BASIS OF SUSPICION AND SURMISES ON THE GROUND THAT THE SHARE APPLICANTS DO NOT HAVE ANY CAPACITY TO EXPLAIN AMOUNT TRANSFERRED TO THEIR ACC OUNT. 9. HAVING CONSIDERED FACTS, WE DO NOT FIND ANY MERI T IN THE ARGUMENTS OF THE REVENUE FOR THE REASON THAT ONCE THE ASSESSEE HAS FURNISHED NECESSARY EVIDENCE TO PROVE THE IDENTITY OF THE SHARE APPLICANTS AND THEIR PAN DETA ILS TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSME NTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASS ESSEE. THIS LEGAL PROPOSITION IS ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 26 SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (SUPRA), WHEREIN IT WAS CATEGORICAL LY HELD THAT THE AO CANNOT MAKE ADDITION TOWARDS SHARE APPLICATION MONEY, IF THE NA MES AND ADDRESSES AND PAN OF THE CREDITORS HAVE BEEN FURNISHED TO THE AO. THIS LEGAL PROPOSITION IS SUPPORTED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CI T VS ORISSA CORPORATION LTD (SUPRA). THE JURISDICTIONAL HIGH COURT OF BOMBAY IN THE CASE OF CIT VS M/S GAGANDEEP INFRASTRUCTURE PVT LTD (SUPRA) AND CIT VS PARADISE INLAND SHIPPING PVT LTD IN ITA NO. 66 OF 2016 DATED 10-04- 2017, HAS REITERATED THE LEGAL POSITION LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (SUPRA). THE SUM AND SUBSTANCE OF THE RATIOS OF THE HONBLE SUPREME COUR T AND JURISDICTIONAL HIGH COURT, IS THAT ONCE THE ASSESSEE HAS FURNISHED NAMES AND ADDR ESSES ALONGWITH PAN OF SUBSCRIBERS, THEN THE AO IS FREE TO REOPEN THE ASSE SSMENT OF SUBSCRIBERS IN ACCORDANCE WITH LAW, BUT THE SHARE APPLICATION MONEY CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 10. INSOFAR AS THE ARGUMENT OF THE LD.DR IN THE LIG HT OF COMPANY MASTER DATA TAKEN FROM ROC WEBSITE THAT THE NAMES OF TWO COMPANIES HA VE BEEN STRUCK OFF BY THE ROC, WE FIND THAT THE ROC HAS STRUCK OFF THE NAMES OF TW O COMPANIES FOR THE REASON THAT THOSE TWO COMPANIES HAVE NOT FILED THEIR ANNUAL ACC OUNTS FOR FEW YEARS, BUT FACT REMAINS THAT THE ASSESSEE HAS FURNISHED LETTERS FRO M THOSE TWO COMPANIES WHEREIN THEY HAVE ADMITTED THAT THEIR NAMES HAVE BEEN STRUCK OFF BY THE ROC FOR NON FILING OF ANNUAL ACCOUNTS, BUT THEY ARE IN THE PROCESS OF RESTORING THE NAMES BY FILING AN APPLICATION BEFORE NCLT. AS REGARDS THE AOS OBSERVATION WITH RE GARD TO THE ISSUE OF SHARES AT A FACE VALUE OF RS.10/- ISSUED AT A PREMIUM OF RS.990 PER SHARE, WE FIND THAT THERE IS NO MERIT IN THE FINDINGS OF THE AO FOR THE REASON THAT THE ISSUE OF SHARES AT A PREMIUM AND SUBSCRIPTION TO SUCH SHARES IS WITHIN THE KNOWLEDGE OF THE COMPANY AND THE SUBSCRIBERS TO THE SHARE APPLICATION MONEY AND THE AO DOES NOT HAVE ANY ROLE TO PLAY AS LONG AS THE ASSESSEE HAS PROVED GENUINENESS OF TRANSACTIONS. WE FURTHER NOTICE THAT THE AO CANNOT QUESTION ISSUE OF SHARES AT A PREMIUM AND ALSO CANN OT BRING TO TAX SUCH SHARE PREMIUM WITHIN THE PROVISIONS OF SECTION 68 OF THE ACT, BEF ORE INSERTION OF PROVISO TO SECTION 68 ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 27 BY THE FINANCE ACT, 2012 W.E.F. 1-04- 2013 AS THE H ONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS M/S GAGANDEEP INFRASTRUCTURE PVT LTD (SUPRA) HELD THAT PROVISO INSERTED TO SECTION 68 IS PROSPECTIVE IN NATURE. 11. IN THIS VIEW OF THE MATTER AND CONSIDERING THE RATIOS OF THE CASE LAWS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSES SEE HAS PROVED IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE PARTIES INSOFAR AS 3 SHARE APPLICANTS ARE CONCERNED. THE CIT(A), AFTER CONSIDE RING RELEVANT FACTS HAS RIGHTLY DELETED ADDITION MADE BY THE AO. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE CIT(A); HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF TH E CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE IS DISMISSED. 16. COMING TO THE CASE LAWS RELIED UPON BY THE REVE NUE. THE ASSESSING OFFICER HAS RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. N R PORTFOLIO PVT. LTD. (SUPRA), WHEREIN FACTS ARE EXAC TLY SIMILAR TO THE FACTS OF THE PRESENT CASE AND THE HONBLE HIGH COURT, AFTER CONS IDERING THE FACTS, HELD THAT MERE FURNISHING OF CERTAIN EVIDENCES TO PROVE IDENTITY I S NOT SUFFICIENT COMPLIANCE TO OVERCOME THE CLUTCHES OF THE PROVISIONS OF SECTION 68 OF THE ACT AND WHAT NEEDS TO BE DONE IS TO PROVE BEYOND DOUBT IDENTITY, CREDITWO RTHINESS AND GENUINENESS OF TRANSACTIONS. THE REVENUE HAS ALSO RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF KONARK STRUCTURAL ENGINEE RING (P) LTD. 90 TAXMANN.COM 56. THE HONBLE HIGH COURT, ON SIMILAR SET OF FACT S HELD THAT WHERE ASSESSEE COMPANY RECEIVES CERTAIN AMOUNT AS SHARE CAPITAL FR OM VARIOUS SHARE HOLDERS, IN VIEW OF FACT THAT SUMMONS SERVED TO SHAREHOLDERS UN DER SECTION 131 WERE UNSERVED WITH REMARK THAT ADDRESSES WERE NOT AVAILABLE, AND, MOREOVER, THOSE SHAREHOLDERS WERE FIRST TIME ASSESSEES AND WERE NOT EARNING ENOU GH INCOME TO MAKE DEPOSITS IN QUESTION, IMPUGNED ADDITION MADE BY ASSESSING OFFIC ER UNDER SECTION 68 WAS TO BE CONFIRMED. WE HAVE GONE THROUGH CASE LAWS RELIED U PON BY THE REVENUE IN THE LIGHT ITA NO.5845/MUM/2016 LISHA TRADING PRIVATE LTD. 28 OF FACTS OF PRESENT CASE AND FIND THAT FACTS OF THI S CASE IS ALTOGETHER DIFFERENT FROM THOSE CASES AND HENCE, THE CASE LAWS RELIED UPON BY THE REVENUE ARE NOT FOLLOWED. 17. IN THIS VIEW OF THE MATTER AND CONSIDERING THE RATIOS OF THE CASE LAWS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS PROVED IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORT HINESS OF PARTIES INSOFAR AS 7 SHARE APPLICANTS ARE CONCERNED. THE CIT(A), AFTER C ONSIDERING RELEVANT FACTS HAS RIGHTLY DELETED ADDITION MADE BY THE AO. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE CIT(A); HENCE, WE ARE INCLINED TO UPHOLD FINDIN GS OF THE CIT(A) AND DISMISS APPEAL FILED BY THE REVENUE. 18. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 3 RD AUGUST, 2018. SD/- SD/- (JOGINDER SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED : 23 RD AUGUST, 2018. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. THE CIT 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI