ITO 12(2)(3), MUMBAI V. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD., MUMBAI

ITA 5867/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1789 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 14-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH
• Assessee Lawyers: KIRNA MEHTA
• Keywords: Bogus purchase; Unexplained cash credit; Share purchase agreement; Source of fund; Question of law
• Section: 143(3); 133(6); 143(1); 13; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.5867/M/2017 ASSESSMENT YEAR: 2011-12 ITO 12(2)(3), ROOM NO.226, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD., 507, 5 TH FLOOR, WESTERN EDGE-1, WESTERN EXPRESS HIGHWAY, BORIVALI (E), MUMBAI 400 066 PAN: AADCG2125N (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI KIRNA MEHTA, C.A. REVENUE BY : SHRI CHAUDHARY ARUN KUMAR SINGH, D. R. DATE OF HEARING : 15.07.2019 DATE OF PRONOUNCEMENT : 22.08.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 09.06.2017 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE DELETION OF ADDITION BY LD. CIT(A) IN RESPECT OF SHARE APPLI CATION MONEY WHICH WAS ADDED BY THE AO UNDER SECTION 68 OF THE A CT AS UNEXPLAINED CASH CREDIT. ITA NO.5867/M/2017 M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD. 2 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED R ETURN OF INCOME ON 27.09.2011 DECLARING INCOME OF RS.2,77,00 1/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THE REAFTER, THE CASE OF THE ASSESSEE WAS REOPENED BY ISSUING NOTICE UNDER SECTION 148 DATED 23.03.2016 AFTER THE AO RECEIVED THE INFORMATION FROM INVESTIGATION WING OF THE DEPARTME NT THAT THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY FROM THOSE ENTITIES WHICH ARE MANAGED AND CONTROLLED BY ENTRY PROVIDER FROM SHRI SIRISH CHANDRAKANTH SHAH. THE AO ALSO IS SUED NOTICES UNDER SECTION 133(6) TO SIX PARTIES TO WHOM THE ASSESSEE ALLOTTED SHARES DURING THE YEAR WHICH WAS DULY RESP ONDED BY THOSE INVESTORS BY FILING THEIR BANK STATEMENTS, I TRS, AUDITED ANNUAL STATEMENTS, LEDGER ETC. ALONG WITH SHARE CER TIFICATES. IT IS PERTINENT TO STATE THAT THE ASSESSEE HAS RECEIVED S HARE APPLICATION MONEY OF RS.2,25,00,000/- DURING THE YE AR FROM SIX PARTIES AND ALLOTTED SHARES OF FACE VALUE OF RS.10 AT A PREMIUM OF RS.240/-. THE AO, INSTEAD OF CARRYING ON THE IN VESTIGATION HIMSELF AND RELYING ON THE PROOFS AND EVIDENCES SUB MITTED BY THE ASSESSEE AND BY THE INVESTORS ,SOLELY RELIED ON THE STATEMENT OF SHRI SIRISH CHANDRAKANTH SHAH AND TREATED THE EN TIRE SHARE APPLICATION MONEY OF RS.2,25,00,000/- AS AN UNEXPLA INED CASH CREDIT UNDER SECTION 68 AND ADDED THE SAME TO THE I NCOME OF THE ASSESSEE BY FRAMING ASSESSMENT VIDE ORDER DATED 13. 12.2016 PASSED UNDER SECTION 143(3) READ WITH SECTION 147. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) ALL OWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS AND GENUINENESS OF THE TRANSACTIONS BY FILING ALL THE N ECESSARY ITA NO.5867/M/2017 M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD. 3 EVIDENCES. THE LD. CIT(A) ALSO NOTED THAT THE NOTI CES ISSUED UNDER SECTION 133(6) OF THE ACT WERE DULY RESPONDED BY FILING THE NECESSARY DETAILS SUCH AS COPY OF ITR CONFIRMAT ION, BANK STATEMENTS, ANNUAL AUDIT ACCOUNTS AND LEDGER COPIES ETC. HOWEVER, THE AO INSTEAD OF CARRYING OUT FURTHER VER IFICATION RELIED SOLELY ON THE STATEMENT OF SHRI SIRISH CHAND RAKANTH SHAH AND THUS DELETED THE ADDITION MADE BY THE AO. 5. THE LD. A.R., AT THE OUTSET, POINTED OUT THAT TH E IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN OWN CASE OF THE ASSESSEE IN ITA NO.3969/M/2017 A .Y. 2012- 13 VIDE ORDER DATED 24.10.2018 WHEREIN THE ISSUE OF SHARE APPLICATION MONEY WAS DECIDED BY THE CO-ORDINATE BE NCH OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY DELETING THE ADDITION MADE BY THE AO. THE LD. A.R. PRAYED BEFORE THE BENCH TH AT IN THE CURRENT YEAR ALSO THE ADDITION MAY KINDLY BE DELETE D BY FOLLOWING THE SAME DECISION AS THE FACTS ARE MATERIALLY SAME. 6. THE LD. D.R., ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF AO AND SUBMITTED THAT THE ASSESSEE IS CLEARLY BE NEFICIARY OF HAWALA SHARE CAPITAL ENTRIES WHICH WERE RIGHTLY ADD ED BY THE AO OBSERVED THAT ENTITIES BELONGING TO SHRI SIRISH CHANDRAKANTH SHAH HAVE INVESTED IN THE ASSESSEE COMPANY BY WAY O F HAWALA TRANSACTIONS. THE LD DR ARGUED THAT THOUGH THE AO H AS NOT FURTHER INVESTIGATED THE MATTER FURTHER, BUT HE MAD E THE ADDITIONS ONLY AFTER SATISFYING ON THE BASIS OF REC ORDS AND CIRCUMSTANTIAL EVIDENCES. THE LD DR SUBMITTED THAT IF ALL FURTHER INVESTIGATION ARE REQUIRED TO BE CARRIED OUT THE MA TTER MAY KINDLY BE RESTORED TO AO BY SETTING ASIDE THE ORDER OF LD. CIT(A). THE LD. D.R. ALSO RELIED HEAVILY ON THE DECISION OF THE APEX ITA NO.5867/M/2017 M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD. 4 COURT IN THE CASE OF PR. CIT VS. NRI IRON STEEL PVT . LTD., CIVIL APPEAL NO.2019 (ARISING OUT OF SLP) 29855 OF 2018 O RDER DATED 05.03.2019. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE SIMILAR ADDITION WAS MA DE BY THE AO IN THE EARLIER YEAR IN THE ASSESSEES OWN CASE WHIC H WAS DELETED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NO.3969/M/2017 A.Y. 2012-13 (SUPRA). THE OPERATIVE PART IS REPRODUCED AS UNDER: 14. WE HEARD RIVAL CONTENTIONS AND PERUSED THE REC ORD. AS NOTICED EARLIER, THE ASSESSEE HAS RECEIVED MONEY TOWARDS SHARE APPLICATI ON FROM TWO COMPANIES, VIZ., M/S SPECIALITY PAPERS LTD AND M/S SAMGUINE MEDIA LT D AGGREGATING TO RS.370 LAKHS. BOTH THE COMPANIES ARE PUBLIC LIMITED COMPANIES LIS TED IN STOCK EXCHANGES. THE AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ISSUED NOTICE U/S 133(6) OF THE ACT TO BOTH THE ABOVE SAID SHARE APPLICANTS. IT IS PERTINE NT TO NOTE THAT BOTH THE SHARE APPLICANT COMPANIES HAVE DULY RESPONDED TO THE NOTI CES AND HAVE FURNISHED RELEVANT DETAILS LIKE COPY OF BANK STATEMENTS, COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME, COPY OF AUDITED ACCOUNTS, LEDGER ACCOUNT COPIES, COPIES OF SHARE CERTIFICATES. IT IS ALSO PERTINENT TO NOTE THAT THE AO DID NOT FIND FAULT WITH ANY OF THE DOCUMENTS FURNISHED BY THESE PARTIES. ONLY IN RESPE CT OF TRANSACTIONS FOUND IN THE BANK STATEMENTS OF THESE SHARE APPLICANT COMPANIES, THE AO HAS COMMENTED THAT THE FUNDS HAVE COME FROM OTHER COMPANIES BELONGING TO THE SAME GROUP. ULTIMATELY, THE AO HAS PLACED RELIANCE ON THE STATE MENT GIVEN BY SHRI SHIRISH CHANDRAKANT SHAH AND HELD THAT THE ASSESSEE HAS FAI LED TO PROVE THE THREE MAIN INGREDIENTS. 15. THE LD CIT(A) HAS NOTICED THAT BOTH THE SHARE A PPLICANT COMPANIES ARE DOING BUSINESS AND HAVE ALSO FILED ITS TAX RETURNS REGULA RLY. THEY HAVE ALSO PAID TAXES ON THE INCOME DECLARED BY THEM. ACCORDINGLY, THE LD CI T(A) HELD THAT THE ASSESSEE HAS DISCHARGED ONUS PLACED UPON IT, AS OBSERVED BY HON BLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD (SUPRA). ACCORDIN GLY THE LD CIT(A) HELD THAT THE PECULIAR FACTS OF THE CASE MAY HAVE CAUSED SUSPICIO N IN THE MIND OF THE AO, BUT THERE IS NO EVIDENCE OR OTHER MATERIAL TO HOLD THAT THE ASSESSEE HAS ROUTED ITS OWN MONEY. THE LD CIT(A) HAS ALSO HELD THAT THE ASSESSE E HAS DISCHARGED THE THREE INGREDIENTS IN THIS MATTER. THE FOLLOWING OBSERVATI ONS MADE BY LD CIT(A) ARE RELEVANT:- 5.6 ON AN ANALYSIS OF THE FACTS ON RECORDS, IT IS SEEN THAT THE SHARE APPLICATION MONEY OF `3,70,00,000/-HAS COME FROM SH ARE SUBSCRIBERS. IT IS NOTED THAT THE SHARE APPLICANTS ARE EXISTING AND HA VE CONFIRMED THAT THEY HAD CONTRIBUTED TO THE SHARE CAPITAL OF THE ASSESSE E COMPANY. THE NEXT ITA NO.5867/M/2017 M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD. 5 ASPECT IS CREDITWORTHINESS. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE AO HAS ISSUED NOTICES U/S. 133(6) OF THE ACT TO THE AFORESAID PARTIES. IN RESPONSE, THE SAID PARTIES HAVE FILED COPIES OF PAN CARD, BANK STATEMENT, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT, SHARE AP PLICATION FORM, BOARD RESOLUTION OF ASSESSEE COMPANY EMPOWERING THE APPLI CANTS TO INVEST IN THE ASSESSEE COMPANY. IT EMERGES OUT FROM THE RECORD TH AT THE APPLICANTS HAVE DULY RECORDED THE INVESTMENTS IN THEIR BOOKS OF ACC OUNTS. THUS, THE SHARE APPLICANTS HAD DEMONSTRATED THESE BALANCE IN THEIR BALANCE SHEETS IN THE SHAPE OF INVESTMENT AS WELL LOAN AND ADVANCES. THE NEXT ISSUE IS ABOUT THE GENUINENESS OF THE TRANSACTION. ON RESPONSE TO NOTI CE U/S 133(6) OF THE ACT, THE SHARE APPLICANTS HAVE SUBMITTED THE BANK STATEM ENTS. THE SHARE APPLICATION MONEY HAS BEEN PAID THROUGH BANKING CHA NNEL. THE AO HAS OBSERVED THAT THE SOURCE OF FUNDS OF THE SHARE APPL ICANTS IS BY WAY OF ISSUE OF PREFERENCE SHARE CAPITAL. THUS, THERE IS NO CASH TRANSACTION WHICH COULD COMPEL ONESELF TO ASSUME THAT THE TRANSACTIONS WERE NOT GENUINE. THE ONUS CAST UPON THE ASSESSEE UNDER SECTION 68 OF THE ACT; IS TO SATISFY THE DEPARTMENT ABOUT THE TRUE IDENTITY OF AN INVESTOR, ITS CREDITWORTHINESS AND GENUINENESS OF A TRANSACTION WAS EXPLAINED BY THE S UPREME COURT IN CIT VS. LOVELY EXPORTS (P) LTD., 216 CTR 295. THE OBJECTIVE OF SECTION 68 IS TO AVOID INCLUSION OF AMOUNT WHICH ARE SUSPECT. THEREFORE, T HE EMPHASIS IS ON ALL THE THREE ASPECTS, IDENTITY, CREDITWORTHINESS AND GENUI NENESS OF THE TRANSACTION WHICH ISPROVED BY THE ASSESSEE BEYOND DOUBT. 16. WE NOTICE THAT THE LD CIT(A) HAS GIVEN A CATEGO RICAL FINDING THAT THE ASSESSEE HAS PROVED ALL THE THREE INGREDIENTS VIZ., THE IDEN TITY OF THE SHARE APPLICANTS, THE CREDIT WORTHINESS OF SHARE APPLICANTS AND THE GENUI NENESS OF TRANSACTIONS. BEFORE US, THE REVENUE COULD NOT CONTROVERT THE FINDING GI VEN BY LD CIT(A). 17. WE NOTICE THAT THE LD CIT(A) HAS ALSO TAKEN SUP PORT OF THE DECISION RENDERED BY HONBLE DELHI HIGH COURT IN THE CASE OF OASIS HOSPI TALITIES P LTD (333 ITR 119), WHEREIN THE DECISION RENDERED BY HONBLE SUPREME CO URT IN THE CASE OF LOVELY EXPORTS P LTD (SUPRA) WAS ALSO DISCUSSED. THE HONB LE DELHI HIGH COURT HAS HELD THAT THE ASSESSEE IS REQUIRED TO PROVE THE THREE INGREDI ENTS MENTIONED ABOVE IN RESPECT OF SHARE APPLICATION MONEY ALSO. THE HONBLE DELHI HIGH COURT FURTHER HELD THAT ONCE THE ASSESSEE DISCHARGES THE ONUS PLACED UPON I TS SHOULDERS, THEREAFTER, IT IS FOR THE ASSESSING OFFICER TO SCRUTINIZE THE SAME AN D IN CASE HE NURTURES ANY DOUBT ABOUT THE VERACITY OF THESE DOCUMENTS TO PROBE THE MATTER FURTHER. HOWEVER, TO DISCREDIT THE DOCUMENTS PRODUCED BY THE ASSESSEE ON THE AFORESAID ASPECTS, THERE HAVE TO BE SOME COGENT REASONS AND MATERIALS FOR TH E ASSESSING OFFICER AND HE CANNOT GO INTO THE REALM OF SUSPICION. 18. IN THE INSTANT CASE, ADMITTEDLY, THE ASSESSING OFFICER HAS FAILED TO PROBE THE MATTER FURTHER. HE HAS NOT FOUND FAULT WITH THE DOC UMENTS FURNISHED BY THE SHARE APPLICANTS TO PROVE THEIR IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE TRANSACTIONS. AS NOTICED EARLIER, THE AO HAS SIMPLY RELIED UPON BY THE STATEMENT GIVEN BY SHRI SHIRISH CHANDRAKANT SHAH. THE RELEVAN T PORTION OF STATEMENT EXTRACTED IN THE ASSESSMENT ORDER DOES NOT SHOW THA T THE ABOVE SAID PERSON HAS SPECIFICALLY IMPLICATED THE TRANSACTIONS ENTERED BY THE SHARE APPLICANTS WITH THE ITA NO.5867/M/2017 M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD. 6 ASSESSEE COMPANY. AS CONTENDED BY THE ASSESSEE BEFO RE TAX AUTHORITIES, THE STATEMENT GIVEN BY THE ABOVE SAID PERSON APPEARS TO BE TOO GENERAL IN NATURE. 19. FURTHER, IT IS PERTINENT TO NOTE THAT THE ASSES SEE HAS ASKED FOR COPY OF STATEMENT GIVEN BY SHRI SHIRISH CHANDRAKANT SHAH BE FORE THE INVESTIGATION AUTHORITIES IN ORDER TO REBUT THE SAME. WE NOTICE T HAT THE ASSESSING OFFICER HAS NOT FURNISHED COPIES OF THE STATEMENT GIVEN BY SHIRISH CHANDRAKANT SHAH, THOUGH HE HAS HEAVILY RELIED UPON THE SAME TO DISCREDIT THE D OCUMENTS FURNISHED BY THE ASSESSEE. IT IS A WELL SETTLED PROPOSITION OF LAW T HAT THE DOCUMENTS/STATEMENTS, WHICH WERE NOT CONFRONTED WITH THE ASSESSEE, COULD NOT HAVE BEEN RELIED UPON BY THE ASSESSING OFFICER. 20. WE NOTICE THAT THE LD CIT(A) HAS ALSO PLACED RE LIANCE ON THE DECISION RENDERED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CREATIVE WORLD TELEFILMS LTD (2011)(333 ITR 100), WHEREIN ALSO IDENTICAL VIEWS A S THAT OF HONBLE DELHI HIGH COURT HAS BEEN EXPRESSED. THE RELEVANT OBSERVATIONS MADE BY HONBLE JURISDICTIONAL HIGH COURT ARE EXTRACTED BELOW:- IN THE CASE IN HAND, IT IS NOT DISPUTED THAT THE A SSESSEE HAD GIVEN THE DETAILS OF NAME AND ADDRESS OF THE SHAREHOLDER, THE IR PA/GIR NUMBER AND HAD ALSO GIVEN THE CHEQUE NUMBER, NAME OF THE BANK. IT WAS EXPECTED ON THE PART OF THE ASSESSING OFFICER TO MAKE PROPER IN VESTIGATION AND REACH THE SHAREHOLDER. THE ASSESSING OFFICER DID NOTHING EXCE PT ISSUING SUMMONS WHICH WERE ULTIMATELY RETURNED BACK WITH AN ENDORSE MENT NOT TRACEABLE. IN OUR CONSIDERED VIEW, THE ASSESSING OFFICER OUGHT TO HAVE FOUND OUT THEIR DETAILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS SO AS TO REACH THE SHARE HOLDERS SINCE ALL THE RELEVANT M ATERIAL DETAILS AND PARTICULARS WERE GIVEN BY THE ASSESSEE TO THE ASSES SING OFFICER. IN THE ABOVE CIRCUMSTANCES, THE VIEW TAKEN BY THE TRIBUNAL CANNO T BE FAULTED. NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THE APPE AL. IN THE RESULT, THE APPEAL IS DISMISSED IN LIMINE WITH NO ORDER AS TO C OSTS. 21. THE FACTS AVAILABLE IN THE PRESENT CASE ARE, IN OUR VIEW, BETTER THAN THE FACTS AVAILABLE IN THE CASE CONSIDERED BY THE HONBLE BOM BAY HIGH COURT (REFERRED SUPRA). IN THE INSTANT CASE, THE NOTICESISSUED BY T HE AO U/S 133(6) OF THE ACT HAVE BEEN RESPONDED BY BOTH THE SHARE APPLICANTS. BOTH T HE PARTIES HAVE FURNISHED ALL THE DETAILS THAT WERE CALLED FOR BY THE ASSESSING O FFICER. THE DETAILS SO FURNISHED BY THEM PROVED THEIR IDENTITY AND CREDITWORTHINESS AND ALSO THE GENUINENESS OF TRANSACTIONS. HOWEVER, THE ASSESSING OFFICER DID NO T EXAMINE THEM AT ALL NOR DID HE CARRY OUT ANY FURTHER ENQUIRY TO DISPROVE THOSE DOC UMENTS. 22. BEFORE US, THE LD A.R PLACED RELIANCE ON THE DE CISION RENDERED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S ACQUATIC REMED IES P LTD (SUPRA). FOLLOWING OBSERVATIONS MADE BY HONBLE JURISDICTIONAL BOMBAY HIGH COURT WITH REGARD TO THE THREE INGREDIENTS ARE WORTH EXTRACTING HERE:- (B). SO FAR AS THE IDENTITY IS CONCERNED, WE FIND T HAT THE PERSONS WHO INVESTED IN THE SHARES OF THE RESPONDENT-ASSESSEE H AD PAN NUMBERS ITA NO.5867/M/2017 M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD. 7 ALLOTTED TO THEM WHICH WAS MADE AVAILABLE BY THE RE SPONDENT TO THE ASSESSING OFFICER. BESIDES, THE SHAREHOLDERS HAD AL SO FILED AFFIDAVITS BEFORE THE ASSESSING OFFICER POINTING OUT THAT THEY HAD IN VESTED IN THE SHARES OF THE RESPONDENT ASSESSEE OUT OF THEIR OWN BANK ACCOUNTS. COPIES OF ACKNOWLEDGEMENT OF RETURN OF INCOME OF THE SHAREHOL DERS WAS ALSO FILED. THE RESPONDENT ALSO REQUESTED THE ASSESSING OFFICER TO SUMMON THE SHAREHOLDERS. THESE EVIDENCES HAVE NOT BEEN SHOWN T O BE INCORRECT. THEREFORE, THIS OBJECTION WITH REGARD TO IDENTITY O F THE SHAREHOLDERS NOT BEING ESTABLISHED DOES NOT SURVIVE. (C) SO FAR AS, THE CREDITWORTHINESS OF THE INVESTORS IS CONCERNED, MR. MOHANTY SEEKS TO RELY U PON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INC OME-TAX VS. NIPUN BUILDERS & DEVELOPERS PVT. LTD. 350 ITR 407. THIS, IN SUPPORT OF HIS SUBMISSION THAT THE SOURCE OF THE FUNDS OF THE SHAR EHOLDER-INVESTOR IN THE RESPONDENT-ASSESSEE'S COMPANY WAS NOT CONSIDERED BY THE TRIBUNAL. THUS, WHERE THE CREDITWORTHINESS OF THE INVESTOR IS NOT E STABLISHED BY FINDING OUT THE SOURCE OF THE SOURCE, THE DELETION OF CASH CRED IT WAS NOT JUSTIFIED. WE ARE CONCERNED IN THESE APPEALS WITH ASSESSMENT YEAR S PRIOR TO ASSESSMENT YEAR 2013-14. IT WAS ONLY WITH EFFECT FROM 1ST APRI L, 2013 I.E. FROM THE ASSESSMENT YEAR 2013-14 THAT A PROVISO WAS ADDED TO SECTION 68 OF THE ACT WHICH REQUIRED THE PERSON INVESTING IN SHARES OF AN Y COMPANY TO SATISFY, IF REQUIRED BY THE ASSESSING OFFICER, THE SOURCE OF TH E FUNDS WHICH ENABLED THE INVESTMENTS IN SHARES. INFACT, OUR COURT IN COMMISS IONER OF INCOME TAX-1 V/S. M/S. GAGANDEEP INFRASTRUCTURE PVT. LTD. (INCOM E TAX APPEAL NO. 1613OF 2014) RENDERED ON 20TH MARCH, 2017 AND IN THE PR. C OMMISSIONER OF INCOME TAX-5 V/S. M/S. SDB ESTATE PVT. LTD. (INCOME TAX APPEAL NO. 1356 OF 2015) RENDERED ON 27TH MARCH, 2018 HAS HELD THAT TH E REQUIREMENT TO EXPLAIN THE SOURCE OF THE SOURCE OF THE FUNDS IN RE SPECT OF THE INVESTMENT AS SHAREHOLDERS IN WHICH THE PUBLIC ARE NOT SUBSTANTIA LLY INTERESTED AS SHARE APPLICATION MONEY IS ONLY PROSPECTIVE AS IT IS INTR ODUCED W.E.F. 1ST APRIL, 2013. THE DELHI HIGH COURT IN THE CASE OF NIPUN BUI LDERS AND DEVELOPERS (SUPRA), HELD THE CREDITWORTHINESS OF THE SHAREHOLD ER WAS NOT ACCEPTED, AS THE SOURCE OF THE FUNDS OF THE SHAREHOLDER WAS NOT EXPLAINED. THIS WAS FOR A PERIOD PRIOR TO ASSESSMENT YEAR 2013-14 AND THE SUB SEQUENT INTRODUCTION OF THE PROVISO TO SECTION 68 OF THE ACT WAS NOT CON SIDERED BY THE DELHI HIGH COURT. WE ARE BOUND BY THE DECISIONS OF THIS COURT IN GAGANDEEP INFRASTRUCTURE PVT. LTD. (SUPRA). BESIDES, BEFORE T HE DELHI HIGH COURT IN NIPUN BUILDERS AND DEVELOPERS (SUPRA), THE IDENTITY OF THE SHAREHOLDERS WAS NOT ESTABLISHED AS THE SUMMONS SENT WERE RETURNED W ITH A REMARK 'NO SUCH COMPANY AND THE SAME WAS CONFIRMED BY THE INSPECTO R OF THE INCOME-TAX DEPARTMENT. NO PAN OF THE SHAREHOLDER WAS ALSO SUBM ITTED BEFORE THE ASSESSING OFFICER. IT WAS IN THE ABOVE CONTEXT, THA T THE DELHI HIGH COURT DECISION WAS RENDERED. THUS, COMPLETELY DIFFERENT F ACTS FROM THE PRESENT CASE, WHERE EVEN AFFIDAVITS OF THE SHAREHOLDERS WER E FILED WHO ON OATH STATED THAT THE INVESTMENT IN THE RESPONDENTS WAS M ADE FROM THEIR BANK ACCOUNTS. THUS, THE INITIAL BURDEN WAS DISCHARGED B Y THE RESPONDENT IN RESPECT OF CREDITWORTHINESS OF THE INVESTOR AND NOT HING HAS BEEN SHOWN BY THE REVENUE TO DOUBT THE SAME AND/OR STEPS TAKEN AN D RESULT THEREOF. THUS, THIS OBJECTION OF LACK OF CREDITWORTHINESS OF THE S HAREHOLDER ALSO DOES NOT ITA NO.5867/M/2017 M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD. 8 SURVIVE. (D). SO FAR AS THE GENUINENESS OF THE INVE STMENT BY THE SHAREHOLDERS IS CONCERNED, MR. MOHANTY PLACED RELIANCE UPON THE STATEMENT DATED 9TH SEPTEMBER, 2010 OF KAMLESH JAIN WHO WAS AN EMPLOYEE , AS WELL AS, THESHAREHOLDER OF THE RESPONDENT-ASSESSEE AND ON TH E FACT THAT DURING THE COURSE OF THE SEARCH, CERTAIN BLANK TRANSFER FORMS WERE FOUND IN THE POSSESSION OF THE RESPONDENT-ASSESSEE. BESIDES, IT IS SUBMITTED THAT THE SHARES WERE SUPPOSED TO BE FINALLY TRANSFERREDTO TH E FAMILY MEMBERS OF THE DIRECTORS OF THE RESPONDENT ASSESSEE COMPANY AT A D ISCOUNTED PRICE. WE NOTE THAT, THE IMPUGNED ORDER OF THE TRIBUNAL RECOR DS THE FACT THAT COPIES OF THE SHARE APPLICATION FORM, SHARE ALLOTMENT REGISTE R AND BANK STATEMENTS SHOWING RECEIPT OF FUNDS WERE ON RECORD. MOREOVER, ALL THE SHAREHOLDERS HAD FILED AFFIDAVITS DECLARING THE FACT THAT THEY A RE INVESTING IN THE RESPONDENT-COMPANY BY ISSUING OF CHEQUES FROM THEIR ACCOUNTS. AS POINTED EARLIER, THE PAN DETAILS OF THE SHAREHOLDERS WAS AL SO SUBMITTED TO THE ASSESSING OFFICER. MOREOVER, THE STATEMENT OF KAMLE SH JAIN DATED 9THSEPTEMBER, 2010 RELIED UPON BY THE REVENUE IN TE RMS, DEALS WITH HIS INVESTMENT IN A GROUP COMPANY VIZ. AQUA FORMATIONS (P) LTD AND NOT WITH THE INVESTMENT MADE IN RESPONDENT-ASSESSEE COMPANY. IN FACT, THE STATEMENT VERY CATEGORICALLY STATES THAT, HE DID NO T INTEND TO PURCHASE ANY SHARES OF AQUA FORMULATIONS (P) LTD. BUT NO SUCH DE CLARATION IS MADE IN RESPECT OF THE INVESTMENT MADE BY HIM IN THE RESPON DENT-ASSESSEE COMPANY. THE STATEMENT DATED 9TH SEPTEMBER, 2010 MA DE BY KAMLESH JAIN DOES NOT IN ANY MANNER, STATE THAT THE INVESTMENT M ADE IN THE RESPONDENT- ASSESSEE COMPANY WAS AN INVESTMENT WHICH HE DID NOT WANT TO MAKE. SO FAR AS THE SHARES ALLEGEDLY/SUPPOSEDLY BEING TAKEN BY T HE MEMBERS OF THE FAMILY OF THE DIRECTOR OF THE RESPONDENT IS CONCERN ED, THE STATEMENT MADE BY MR. JAIN DATED 9TH SEPTEMBER, 2010 IS NOT WITH R EGARD TO THE RESPONDENT, COMPANY BUT IN RESPECT OF ITS SISTER COMPANY. THUS, THERE IS NO CONCLUSIVE EVIDENCE IN SUPPORT OF THE ABOVE SUBMISSION IN THE CONTEXT OF THE RESPONDENT. IN ANY CASE, THIS WOULD NOT NECESSARILY LEAD TO A CONCLUSION THAT THE ORIGINAL INVESTMENT MADE BY THE SHAREHOLDER IN THE RESPONDENT- ASSESSEE WAS NOT GENUINE. THIS, AT THE HIGHEST, MAY GIVE RISE TO SUSPICION BUT IT DOES NOT PROVE THAT THE INVESTMENT MADE ORIGINAL LY IN THE RESPONDENT ASSESSEE'S COMPANY WAS NOT GENUINE. THUS, NOT IN TH E NATURE OF CASH CREDIT AS ALLEGED BY THE REVENUE. (E). IN FACT, THE IMPUGN ED ORDER OF THE TRIBUNAL, ON EXAMINATION OF FACTS, HAS COME TO THE CONCLUSION THAT THE INVESTMENT MADE BY THE SHAREHOLDERS IS NOT HIT BY SECTION 68 O F THE ACT. IT RECORDS, THAT THE ENTIRE BASIS OF THE REVENUE'S CASE IS BASED ON SURMISE THAT THE RESPONDENT WAS TAKING BOGUS PURCHASE BILLS AND CASH WAS INTRODUCED IN THE FORM OF SHARE CAPITAL WITHOUT ANY EVIDENCE IN SUPPO RT. THEREFORE, THE VIEW TAKEN BY THE IMPUGNED ORDER OF THE TRIBUNAL ON FACT S IS A POSSIBLE VIEW. (F). THUS, THIS QUESTION AS PROPOSED DOES NOT GIVE RISE TO SUBSTANTIAL QUESTION OF LAW. THUS, NOT ENTERTAINED. 23. THE FACTS PREVAILING IN THE INSTANT CASE ARE ID ENTICAL. THE ASSESSING OFFICER HAS COLLECTED THE RELEVANT DETAILS TO PROVE THE THREE I NGREDIENTS, DIRECTLY FROM THE SHARE APPLICANTS. HE COULD NOT FOUND FAULT WITH THOSE DOC UMENTS. INSTEAD, HE HAS PLACED RELIANCE ON THE STATEMENT GIVEN BY SHRI SHIRISH CHA NDRAKANT SHAH, THAT TOO WITHOUT ITA NO.5867/M/2017 M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD. 9 CONFRONTING THE SAID STATEMENT WITH THE ASSESSEE. T HE ASSESSING OFFICER HAS NOT DISPROVED THE CONTENTION OF THE ASSESSEE THAT SHIRI SH CHANDRAKANT SHAH IS NOT A DIRECTOR OR EMPLOYEE OF THE SHARE APPLICANT COMPANI ES AND FURTHER THE ASSESSEE WAS NOT AWARE OF SUCH A PERSON. THE AO HAS ALSO NOT SHOWN THAT THE ABOVE SAID PERSON, HAS IMPLICATED THE TRANSACTIONS ENTERED BET WEEN THESE TWO SHARE APPLICANT COMPANIES AND THE ASSESSEE. THE FACT THAT BOTH THE SHARE APPLICANT COMPANIES ARE LISTED COMPANIES HAVING HUGE SHARE CAPITAL WAS IGNO RED BY THE ASSESSING OFFICER. THE FINANCIAL STATEMENTS FURNISHED BY THESE TWO COM PANIES TO PROVE THEIRCREDIT WORTHINESS HAVE ALSO BEEN IGNORED BY THE AO. HENCE, IN OUR VIEW, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN PLACING FULL RELIANCE ON THE GENERAL STATEMENT GIVEN BY SHIRISH CHANDRAKANT SHAH. 24. IN VIEW OF THE FOREGOING DISCUSSIONS, WE ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN DELETING THE IMPUGNED ADDITION, AS THE ASSESSEE HAS DISCHARGED THE ONUS PLACED UPON IT U/S 68 OF THE ACT. ACCORDINGLY WE UP HOLD THE ORDER PASSED BY LD CIT(A). 25. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 8. IN THE PRESENT CASE BEFORE US, THE FACTS ARE MAT ERIALLY SAME AS IN THE SUBSEQUENT YEAR. WE OBSERVE FROM THE REC ORDS BEFORE US THAT ASSESSEE HAS FILED ALL THE EVIDENCES BEFORE THE AO, HOWEVER, THE AO HAS NOT BOTHERED TO FURTHER INVESTI GATE THE MATTER. SIMILARLY, THE NOTICES ISSUED UNDER SECTIO N 133(6) OF THE ACT TO THE VARIOUS INVESTORS WERE DULY RESPONDED WH O FILED THE CONFIRMATIONS OF THE INVESTMENTS, PANS, BANK STATEM ENTS, COPY OF AUDITED FINANCIAL STATEMENT AND LEDGER ETC. HOW EVER, THE AO BRUSHED ASIDE ALL THESE EVIDENCES AND SOLELY RELIED ON THE STATEMENT OF SHRI SIRISH CHANDRAKANTH SHAH. THE FA CTS OF THE CASE AS DECIDED BY THE HONBLE APEX COURT IN THE CA SE OF PR. CIT VS. NRI IRON AND STEEL PVT. LTD. (SUPRA) IS DIFFERE NT FROM THE PRESENT CASE AND THEREFORE THE SAME IS NOT APPLICAB LE. IN THAT CASE, THE AO HAS CARRIED OUT FURTHER ENQUIRY AND AP POINTED THE INSPECTOR TO FURTHER VERIFY THE MATTER. DURING THE COURSE OF FURTHER VERIFICATION IT WAS PROVED THAT THE ENTITIE S WERE NONEXISTENT. HOWEVER, THIS IS NOT THE CASE IN THE PRESENT CASE. WE ARE, THEREFORE, RESPECTFULLY FOLLOWING THE DECIS ION OF THE CO- ITA NO.5867/M/2017 M/S. GREEKSOFT INSTITUTE OF FINANCIAL MARKET PVT. LTD. 10 ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CA SE UPHOLD THE ORDER OF LD. CIT(A) BY DISMISSING THE APPEAL OF THE REVENUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.08.2019. SD/- SD/- (AMARJIT SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 22.08.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.