DCIT 6(2)(1), MUMBAI V. CHIRIPAL POLY FILMS LTD., MUMBAI

ITA 5996/MUM/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8713 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 07-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VATSALYA SAXENA
• Keywords: Unexplained cash credit; Bogus Share capital; Depreciation; Share purchase agreement; Source of fund; Question of law; Fair market value; Corroborative evidences; Competent authority; Capital receipt; Onus to prove
• Section: 56(2)(vii)(b); 56(2); 115JB; 133(6); 69A; 64; 43; 48; 73; 13; 22; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , D BENCH MUMBAI BEFORE : HONBLE JUSTICE P.P. BHATT, PRESIDENT & SHRI M.BALAGANESH, AM ITA NO. 5996/ MUM/ 20 16 ( ASSESSMENT YEAR : 2012 - 13 ) DY. COMMISSIONER OF INCOME TAX 6(2)(1), MUMBAI R.NO.5 63, AAYAKAR BHAVAN M.K.ROAD, CHURCHGATE MUMBAI 400 020 VS. M/S. CHIRIPAL POLY FILMS LTD., 109/110, PENINSULA CENTRE DR. S.S. RAO ROAD, PAREL, MUMBAI 400 021 PAN/GIR NO. AADCC7403M (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY MS. VATSALYA SAXENA REV ENUE BY SHRI TUSHAR HEMANI DATE OF HEARING 0 9 /02/2021 DATE OF PRONOUNCEMENT 24 / 03 / 202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 5996/MUM/2016 FOR A.Y. 2012 - 13 ARISES OUT OF THE ORDER BY THE LD. COMMISSION ER OF INCOME TAX (APPEALS) - 12, MUMBAI IN APPEAL NO. CIT(A) - 12/IT 298/DCIT 6(2)(1)/2015 - 16 DATED 31/03/2016 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 31/03/2016 BY THE LD. DCIT - 6(2)(1), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 2 2. THE FIRST ISSUE TO BE DISALLOWED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION OF RS 19,80,00,000/ - ON ACCOUNT OF SHARE CAPITAL AND SHARE PREMIUM AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SA LES OF BI - AXIALLY ORIENTED POLYPROPYLENE AND THE RETURN OF INCOME FOR THE ASST YEAR 2012 - 13 WAS FILED BY THE ASSESSEE COMPANY ON 30.9.2012 DECLARING TOTAL LOSS OF RS 29,25,45,580/ - UNDER NORMAL PROVISIONS OF THE ACT AND BOOK PROFIT OF RS 1,51,56,973/ - U/S 115JB OF THE ACT. THE ASSESSEE COMPANY IS IN THE PROCESS OF CARRYING ON BUSINESS AS MANUFACTURERS, IMPORTERS, EXPORTERS, BUYERS, SELLERS, SUPPLIERS, DISTRIBUTORS, STOCKIEST, DESIGNERS AND DEALERS IN POLYMERS, MONOMERS, ELASTOMERS AND RESINS OF ALL TYPES, GRADES AND COPOLYMER FORMULATIONS AND IN ALL FORMS SUCH AS RESINS / CHIPS, POWDER, FLAKES, GRANULES, FILMS, SHEETS, TUBES, PIPES, FIBRES, LAMINATES OR AS PROCESSED GOODS AND INCLUDING SPECIFICALLY POLYETHYLENE, POLYPROPYLENE, POLYETHYLENE POLYSTYRENE, PO LYVINYL ACETATE, METHACRYLATE, RESINS, ALKIDE RESINS, MELAMINE, POLYESTERS, SUCH AS POLYETHYLENE, TEREPHIHALLATE AND POLYETHYLENE, SPHATHALATE OR ANY OTHER OR NEW SUBSTANCES BEING IMPROVEMENTS UPON, MODIFICATIONS OF OUR BEING DERIVED FROM ADDITIONS TO PETR OCHEMICALS OR OTHER / PRODUCTS OR RESULTING FOR MANY PROCESSES. 2.2. WE FIND THAT THE ASSESSEE WAS IN RECEIPT OF A SUM OF RS 19.80 CRORES ON ACCOUNT OF SUBSCRIPTION OF SHARE CAPITAL FROM ORANGE MAURITIUS INVESTMENTS LTD (OMIL) LOCATED IN THE REPUBLIC OF MAURITIUS WHICH WAS BIFURCATED INTO TWO PARTS : - ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 3 TOWARDS SHARE CAPITAL - RS 19,80,000/ - (FACE VALUE OF RS 10 PER SHARE) TOWARDS SHARE PREMIUM - RS 19,60, 20,000/ - ( PREMIUM OF RS 990 PER SHARE) 2.3. PURSUANT TO THE DETAILS CALLED FOR BY THE LD AO , THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FURNISHED TH E NAME OF THE INVESTOR, COMPLETE ADDRESS, PAN, JURISDICTIONAL ASSESSING OFFICER DETAILS , CERTIFICATE OF INCORPORATION OF OMIL, TAX RESIDENCY CERTIFICATE (TRC) OF OMIL, REGISTRATION DETAILS OF OMIL WITH SEBI AS FOREIGN INSTITUTIONAL INVESTOR, AMOUNT AND DA TE OF RECEIPT, COMPLIANCE DOCUMENTATION WITH RESERVE BANK OF INDIA (RBI) FOR BRINGING FUNDS FROM ABROAD, FOREIGN INWARD REMITTANCE CERTIFICATE (FIRC) ETC, COPY OF AUDITED FINANCIAL STATEMENTS OF OMIL WHEREIN THE INVESTMENT MADE IN ASSESSEE COMPANY IS DULY REFLECTED, COPY OF BANK STATEMENT, COPIES OF SHARE APPLICATION FORMS, SHARE CERTIFICATE ISSUED TO INVESTOR, COPY OF FORM 2 FILED WITH REGISTRAR OF COMPANIES (ROC) FOR ALLOTMENT OF SHARES AT PREMIUM AND ANNUAL RETURNS FILED WITH ROC. WE FIND THAT THE ASSES SEE HAD ALSO FURNISHED DETAILED SUBMISSIONS IN SUPPORT OF THE STATEMENT OF FACTS FOR THE YEAR UNDER CONSIDERATION BY REPRODUCING THE RELEVANT EXTRACTS OF QUESTIONS RAISED BY THE LD AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ITS DETAILED REPLIES SUB MITTED. THE ASSESSEE PLEADED THAT PURSUANT TO THE AFORESAID DOCUMENTS SUBMITTED AND EXPLANATIONS GIVEN THEREON, ALL THE THREE NECESSARY INGREDIENTS OF SECTION 68 OF THE ACT I.E IDENTITY OF THE INVESTOR, CREDITWORTHINESS OF THE INVESTOR AND GENUINENESS OF THE TRANSACTIONS ARE PROVED BEYOND DOUBT. WE FIND THAT THE LD AO NOTICED THAT THE INTRINSIC VALUE OF SHARES BASED ON NET ASSET VALUE METHOD IS ONLY RS 166.54 PER SHARE AND HENCE THE ALLOTMENT OF SHARES AT RS 1000 PER SHARE IS NOT JUSTIFIED BY THE ASSESSE E. THE LD AO ACKNOWLEDGED THE SUBMISSION OF THE ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 4 ASSESSEE IN PAGE 17 OF HIS ASSESSMENT ORDER THAT THE REFERENCE WAS MADE TO CBDT FOREIGN TAX DIVISION TO CHECK THE VERACITY OF THE TRANSACTIONS WITH COMPETENT AUTHORITY OF MAURITIUS TOGETHER WITH THE REAL SOUR CE OF MONEY AS FUNDS ARE ROUTED THROUGH ENTITIES INCORPORATED IN MAURITIUS. BEFORE THE COMPLETION OF ASSESSMENT, NO REPLIES WERE RECEIVED FROM THE SAID COMPETENT AUTHORITY. THE LD AO OBSERVED THAT THE ASSESSEE DID NOT FURNISH THE DETAILS OF SOURCE OF FUN DS FOR OMIL AND ACCORDINGLY CONCLUDED THAT THE ASSESSEE HAD NOT PROVED THE CREDITWORTHINESS OF OMIL TO MAKE INVESTMENT IN ASSESSEE COMPANY. 2.4. WE FIND THAT SIMILAR AMOUNT OF SHARE CAPITAL AND PREMIUM WAS RECEIVED BY THE ASSESSEE COMPANY FROM OMIL IN E ARLIER YEAR I.E ASST YEAR 2011 - 12 IN THE SUM OF RS 4,47,10,385/ - WHICH WAS SOUGHT TO BE ADDED BY THE LD AO AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. WE FIND THAT THE LD CITA HAD DELETED THE SAID ADDITION IN ASST YEAR 2011 - 12 , AGAINST WHICH REVENUE HA D PREFERRED AN APPEAL BEFORE THIS TRIBUNAL FOR ASST YEAR 2011 - 12. WE FIND THAT THE LD CITA HAD DELETED THE ADDITION MADE IN THE YEAR UNDER CONSIDERATION BY PLACING RELIANCE ON THE ORDER OF HIS PREDECESSOR FOR ASST YEAR 2011 - 12 WHEREIN, ON SIMILAR FACTS AN D CIRCUMSTANCES IN RESPECT OF SHARE CAPITAL AND PREMIUM RECEIVED FROM THE SAME PARTY I.E OMIL, THE ADDITION MADE U/S 68 OF THE ACT WAS DELETED. WE FIND THAT THE LD CITA HAD ALSO OBSERVED IN PARA 10.7 OF THE ORDER THAT REFERENCE MADE TO CBDT FOREIGN TAX DI VISION HAD NOT BROUGHT OUT ANY ADVERSE REMARKS ON THE BONAFIDES OF OMIL AND TRANSACTIONS CARRIED OUT BY THEM WITH THE ASSESSEE. WE ALSO FIND THAT THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASST YEAR 2011 - 12 IN ITA NO. 2671/MUM/2016 DATED 19.2.2019 HAD D ELETED THE SAME ADDITION U/S 68 OF THE ACT IN RESPECT OF SHARE CAPITAL AND SHARE PREMIUM RECEIVED FROM OMIL BY HOLDING AS UNDER: - ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 5 11 . WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. AS REGARDS TO THE INTRODUCTION OF S HARE APPLICATION MONEY AMOUNTING TO 4,47,10,385/ - FROM ORANGE MAURITIUS INVESTMENT LTD. OF REPUBLIC OF MAURITIUS, THE SAME WAS RECEIVED BY ASSESSEE ON 25.03.2011. THIS SHARE MONEY WAS PENDING ALLOTMENT AS ON 31.03.2011 IN THE BALANCE SHEET. FROM THE ASSE SSMENT ORDER IT IS NOTICED THAT THE ALLEGATION OF THE AO THAT THE AUTHORIZED SHARE CAPITAL OF THE ASSESSEE WAS ONLY 3 CRORE OUT OF WHICH THE ASSESSEE COMPANY IS ALREADY ISSUED SHARE CAPITAL WORTH 1,78,71,100/ - AS ON 31.03.2011 AND SUBSEQUENTLY ALSO THE COMPANY HAS NOT INCREASED AUTHORIZED SHARE CAPITAL OR FILED ANY APPLICATION FOR INCREASING THE AUTHORIZED SHARE CAPITAL. THE ALLEGATION OF THE AO AS THAT OUT OF THE BALANCED AUTHORIZED SHARE CAPITAL, THE ASSESSEE COULD HAVE ISSUED AND ALLOTTED THE SHARES TO ORANGE MAURITIUS INVESTMENT LTD. TO THE EXTENT OF 1,21,28,900/ - ONLY. THIS ALLEGATION OF THE AO, ACCORDING TO US AND THE FACTS OF THE CASE, THAT THE ASSESSEE IS NOT HAVING SUFFICIENT AUTHORIZED SHARE CAPITAL AND THE WHOLE ALLEGATION FOR TREATING THE INVESTMENT TRANSACTION AS UNEXPLAINED, IS WITHOUT ANY BASIS. FROM THE FACTUAL POSITION, ACCORDING TO US UNDER THE INCOME TAX ACT, THERE IS NO REQUIREMENT FOR INCREASING THE SHARE CAPITAL FOR ALLOTMENT OF SHARES OF 1.98 LAKHS TO ORANGE MAURITIUS INVESTMENT LTD. BUT IN ANY CASE THE SHARES WERE ULTIMATELY ALLOTT ED ONLY ON 11.07.2011 I.E. DURING THE PREVIOUS YEAR RELEVANT TO NEXT ASSESSMENT YEAR. EVEN OTHERWISE, UNDER THE PROVISIONS OF SECTION 68 OF THE ACT, THE ONLY REQUIREMENT IS THAT THE TRANSACTION SHOULD BE GENUINE, IDENTITY OF THE PARTY SHOULD BE ESTABLISHED AND CREDIT WORTHINESS OF THE PARTY SHOULD BE PROVED. WE FIND THAT THE ASSESSEE ENTERED INTO SHARE HOLDER AGREEMENT DATED 15.03.2011 WITH ORANGE MAURITIUS INVESTMENT LTD. IS TO BE ALLOTTED 1.98 LAKH SHARES OF 10 EACH AT A PREMIUM OF 990 BY THE ASSESSEE COMPANY. THE ALLOTMENT OF EQUITY SHARES WAS TO BE MADE BY THE ASSESSEE COMPANY TO THE INVESTOR ON RECEIPT OF FULL PAYMENT OF 19.8 CRORES. WE ALSO FIND THAT THE ASSESSEE HAS FILED ALL THE REQUIREMENTS COMPLYING WITH RBI GUIDELINES BY FILING FIRE WITH RBI AND ALSO FILED UNIQUE IDENTIFICATION NO. FROM RBI. FURTHER, IT HAS ALSO FILED FCGPR WITH RBI IN THIS CONNECTION. HENCE, THERE WAS NO REQUIREMENT OF INCREASING THE AUTHORIZED SHARE CAPITAL AS THE ASSESSEE WAS HAVING SUFFICIENT AUTHORIZED SHARE CAPITAL TO I SSUE SHARES TO THE INVESTOR. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED FUND OF 4,47,10,385/ - ON 25.03.2011 OUT OF TOTAL INVESTMENT OF 19.80 CRORES. THE BALANCED FUNDS WERE REMITTED BY THE INVESTOR IN SUBSEQUENT YEARS, WHICH IS ALREADY MENTIONED IN FCGPR ATTACHED IN ASSESSEES PAPER BOOK. WE FIND FROM THE CASE RECORDS AND THE ASSE SSMENT ORDER AND THE ORDER OF CIT(A) THAT THE ASSESSEE HAS FILED COMPLETE PAPER BOOK IN RESPECT TO THESE INVESTMENTS LIKE THE FOLLOWING DETAILS: - ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 6 SR. NO. NAME OF THE SHAREHOLDERS NO. OF SHARE AMOUNT OF PREMIUM DETAILS SUBMITTED PARTICULARS PAPER BO OK 1 PAPER BOOK 2 PAPER BOOK 3 PAGE NO. PAGE NO. PAGE NO 1. M/S ORANGE MAURITIUS INVESTMENT LTD. (SHARE APPLICATION MONEY 44,710,385 1. LETTER ISSUED BY RBI IN CONNECTION WITH FCGPR 232 - 239 2. FIRC ISSUED BY IDBI IN THE CASE OF NR INVESTORS 240 - 245 3. COMPLETE ADDRESS 513 4. SHAREHOLDERS AGREEMENT 514 - 552 666 - 704 5. SHARE APPLICATION FORM RECEIVED FROM INVESTOR 553 - 554 705 - 706 6. FIRC ISSUED BY BANK 555 - 560 7. LETTER ISSUED BY RBI ALLOTTING UIN NO. 246 - 249 561 - 564 8. SHARE ALLOTMENT CERTIFICATE ISSUED TO INVESTOR 565 707 9. FCGPR SUBMITTED TO RBI 566 - 574 12 . T HE ASSESSEE FILED ALL THESE DETAILS BEFORE THE AO AND BEFORE CIT(A), IT MEANS THAT THE ASSESSEE HAS ESTABLISHED THE NATURE AND GENUINENESS OF TRANSACTION AND THE SOURCE OF THE MONEY AFTER FULFILLING ALL THE MANDATORY REQUIREMENT OF THE RBI. TO PROVE THE GENUINENESS OF TRANSACTION, THE ASSESSEE HAS FILED THE DETAILS THAT THE ENTIRE TRANSACTION IS DONE THROUGH BANKING CHANNELS ONLY. THE IDENTIT Y OF THE PARTIES, THE FINANCIAL CAPACITY AND THE SOURCES, HAS FULLY BEEN EXPLAINED BY THE ASSESSEE COMPANY. ACCORDING TO US, IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASERECORDS, DOCUMENTARY EVIDENCES, ARGUMENTS OF BOTH THE SIDES CLEARLY ESTABLISHED THA T THIS TRANSACTION CARRIED OUT BY ASSESSEE RECEIVING SHARE APPLICATION MONEY PARTY TO THE EXTENT OF 4,47,10,385/ - SEEMS TO BE GENUINE AND EXPLAINED. FURTHER, THE AO HAS NOT CARRIED OUT ANY FURTHER INQUIRY EXCEPT THE FACT RECORDED THAT THERE IS NO AUTHORIZ ED SHARE CAPITAL TO THAT EXTENT AND MOREOVER, THE AO ALSO NOTED THAT THERE IS UNJUSTIFIABLE AMOUNT OF SHARE PREMIUM AND HENCE, ENTIRE TRANSACTIONS IS NOT GENUINE. WE HAVE NOTED THAT FOR THE PURPOSE OF SECTION 68 OF THE ACT, THREE REQUIREMENTS ARE REQUIRED TO BE FULFILLED WHICH IS THE GENUINENESS OF TRANSACTION, SOURCE OF ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 7 MONEY I.E. CREDITWORTHINESS OF THE PARTY AND IDENTITY OF THE PARTY. ACCORDING TO US, THE ASSESSEE HAS FULFILLED ALL THE THREE INGREDIENTS OF SECTION 68 OF THE ACT. WE ALSO NOTED THAT SHARE PREMIUM CAN ONLY BE ADDED UNDER SECTION 56(2)(VII)(B) OF THE ACT WHICH WAS INSERTED BY THE FINANCE ACT, 2013 WITH EFFECT FROM 01.04.2013 I.E. FOR AND FROM THE AY 2013 - 14. WE WILL DEALT WITH THE CASE LAWS IN THE NEXT PART OF THIS ORDER WHICH WAS CITED BEFOR E US BY BOTH THE SIDES. 13 . AS REGARDS TO THE ADDITION OF SHARE APPLICATION MONEY OF 23,47,38,900/ - BY THE AO AND DELETED BY CIT(A), THE FACTS RELATING TO THIS DISPUTE IS THAT THE ASSESSEE HAS ISSUED 2,37,100 SHARES TO TEN DIFFERENT SHAREHOLDERS ALONG WITH EVIDENCES FILED BY ASSESS EE ARE AS UNDER: - GROUND OF APPEAL NO. (II) - SHARE PREMIUM ON ISSUE OF SHARES 23,47,38,900 1. M/S DESERT DIAMOND GENERAL TRADING LLC 12,977 12,847,230 1. PAN AND COMPLETE ADDRESS 20 377 2. SHAREHOLDERS AGREEMENT 378 - 413 3. SHARE APPLIC ATION FORM RECEIVED FROM INVESTOR 414 - 415 663 - 664 4. FIRC ISSUED BY RBI IN THE CASE OF NR INVESTORS 43 - 45 416 - 418 5. LETTER ISSUED BY RBI ALLOTTING UIN NO. 48 - 51 419 - 422 6. SHARE ALLOTMENT CERTIFICATE ISSUED TO INVESTOR 423 665 7. LETTER ISSUED BY RBI IN CONNECTION WITH FCGPR 52 - 53 424 - 430 8. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 54 - 55 2 MRS. NEELAM SHARMA 13,462 13,327,380 1. PAN AND COMPLETE ADDRESS 20 431 2. LETTER ISSUED BY RBI IN CONNECTION WITH FCGPR 52 - 53 3. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 56 - 58 4. SHAREHOLDERS AGREEMENT 432 - 465 708 - 741 5. SHARE APPLICATION FORM RECEIVED FROM INVESTOR 466 - 467 742 - 743 6. FIRC ISSUED BY BANK 46 - 47 468 7. SHARE ALLOTMENT CERTIFICATE ISSUED TO INVESTOR 469 744 8. FCGPR SUBMITTED TO RBI 470 - 471 3. MR. SHYAMSUNDER SHARMA 4,171 4,129,290 1. PAN AND COMPLETE ADDRESS 20 472 2. LETTER ISSUED BY RBI IN CONNECTION WITH FCGPR 52 - 53 473 - 506 3. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 56 - 58 507 - 508 4. SHAREHOLDERS AGREEMENT 473 - 506 745 - 778 5. SHARE APPLICATION FORM RECEIVED FROM INVESTOR 507 - 508 779 - 780 6. FIRC ISSUED BY BANK 46 - 47 509 7. SHARE ALLOT MENT CERTIFICATE ISSUED TO INVESTOR 510 781 ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 8 8. FCGPR SUBMITTED TO RBI 511 - 512 4.. MS/S SPARROW EXPORTS PVT. LTD. 70,000 69,300,000 1. PAN AND COMPLETE ADDRESS 20 2. CONFIRMATION OF ACCOUNTS 21 3. RETURN OF INCOME 28 4. LETTE R ISSUED BY RBI IN CONNECTION WITH FCGPR 52 - 53 5. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 59 - 67 6. SHARE APPLICATION FROM RECEIVED FROM INVESTOR 70 - 73 7. SHARE ALLOTMENT CERTIFICATE ISSUED TO INVESTOR 89 - 90 7. NOTICE 01.11.2013, 24.12.2013 AND 04.02.2014 ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT. 828 - 833 8. RESPONSE TO NOTICE ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT. 834 - 845 5. M/S BHUSHANPETROFILS PVT. LTD. 35,000 34,650,000 1. PAN A ND COMPLETE ADDRESS 20 2. CONFIRMATION OF ACCOUNTS 22 3. RETURN OF INCOME 29 4. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 59 - 64 5 SHARE APPLICATION FROM RECEIVED FROM INVESTOR 74 - 75 6. SHARE ALLOTMENT CERT IFICATE ISSUED TO INVESTOR 87 7. RESPONSE TO NOTICE ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT. 846 - 856 6. M/S SHANTI EDUCATIONAL INITIATIVES LTD. 5,500 5,445,000 1. PAN AND COMPLETE ADDRESS 20 2. CONFIRMATION OF ACCOUNTS 23 3. RETURN OF INCOME 30 4. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 59 - 64 5 SHARE APPLICATION FROM RECEIVED FROM INVESTOR 68 - 69 6. SHARE ALLOTMENT CERTIFICATE ISSUED TO INVESTOR 84 7. RESPONSE TO NOTICE ISSUED U NDER SECTION 133(6) OF THE INCOME TAX ACT. 8. RESPONSE TO NOTICE ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT. 7. M/S CHIRIPAL TEXTILE MILLS PVT. LTD 30,000 29,700,000 1. PAN AND COMPLETE ADDRESS 20 2. CONFIRMATION OF ACCOUNTS 24 3. RETURN OF INCOME 31 4. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 59 - 64 ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 9 5 SHARE APPLICATION FROM RECEIVED FROM INVESTOR 76 - 77 6. SHARE ALLOTMENT CERTIFICATE ISSUED TO INVESTOR 88 7. NOTICES DATED 01.11.2 013, 24.12.2013 AND 04.02.2014 ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT. 789 - 792 8. RESPONSE TO NOTICE ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT. 793 - 801 8. M/S DINDAYAL PROCESSORS PVT. LTD. 35,000 34,650,000 1. PAN AND COMPLET E ADDRESS 20 2. CONFIRMATION OF ACCOUNTS 25 3. RETURN OF INCOME 32 4. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 59 - 64 5 SHARE APPLICATION FROM RECEIVED FROM INVESTOR 78 - 79 6. SHARE ALLOTMENT CERTIFICATE IS SUED TO INVESTOR 86 7. RESPONSE TO NOTICE ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT. 857 - 865 9. M/S PRAKASH CALENDAR PVT. LTD. 30,000 29,700,000 1. PAN AND COMPLETE ADDRESS 20 2. CONFIRMATION OF ACCOUNTS 26 3. RETURN OF INC OME 33 4. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 59 - 64 5 SHARE APPLICATION FROM RECEIVED FROM INVESTOR 80 - 81 6. SHARE ALLOTMENT CERTIFICATE ISSUED TO INVESTOR 85 7. NOTICES DATED 01.11.2013, 24.12.2013 AND 04. 02.2014 ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT. 802 - 805 8. RESPONSE TO NOTICE ISSUED UNDER SECTION 133(6) OF THE INCOME TAX ACT. 806 - 815 10. M/S VIJAY SUBHAMCONTRADE PVT. LTD. 1,000 990,000 1. PAN AND COMPLETE ADDRESS 20 2. CO NFIRMATION OF ACCOUNTS 27 3. RETURN OF INCOME 34 4. MINUTES RECORDED IN BOARD MEETING FOR ALLOTMENT OF SHARES 59 - 64 5 SHARE APPLICATION FROM RECEIVED FROM INVESTOR 82 - 83 6. SHARE ALLOTMENT CERTIFICATE ISSUED TO INVESTOR 91 ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 10 WE ALSO FIND THAT THE ASSESSEE HAS FILED DETAILS WITH RESPECT TO BALANCE WITH ROC FOR SHARE ISSUANCE IN TERM OF FORM NO. 2 AND ANNUAL RETURN FILED WITH ROC. AS REGARDS TO NON - RESIDENT INVESTORS I.E. NAMELY (I) DESERT DIAMOND GENERAL TRADING LLC (II) MRS. NEELAM SHARMA (III) MR. SHYAMSUNDER SHARMA, THE ASSESSEE HAS FILED THE DETAILS IN FORM NO. 2 AND ANNUAL RETURN FILED WITH ROC IN RESPECT OF SHARE ALLOTTED TO THESE NON - RESIDENTS. 14 . WE HAVE NOTED THAT THE AO HAS SIMPLY RELIED ON THE PROVISIONS OF SECTION 56(2 )(VIIB) OF THE ACT FOR TREATING THE SHARE PREMIUM AS UNEXPLAINED. WE FIND THAT CLAUSE (VIIB) OF SUB SECTION (2) OF SECTION 56 WAS INSERTED VIDE FINANCE ACT, 2013 W.E.F 01 .04.2013 I.E. FOR AND FROM A. Y. 2013 - 14 TO PROVIDE THAT WHERE A CLOSELY HELD COMPANY ISSUES ITS SHARES AT A PRICE WHICH IS MORE THAN ITS FAIR MARKET VALUE THEN THE AMOUNT RECEIVED IN EXCESS OF FAIR MARKET VALUE OF SHARES WILL BE CHARGED TO TAX IN THE HAND OF THE COMPANY AS INCOME FROM OTHER SOURCES. THIS AMENDMENT WAS MADE KEEPING IN VIEW THE PRACTICE OF CLOSELY HELD COMPANIES TO BROUGHT IN UNDISCLOSED MONEY OF PROMOTERS/DIRECTORS BY ISSUING SHARES AT HIGH PREMIUM WHICH IS NORMALLY OVER AND ABOVE THE BOOK VALUE OF SHARE OF THE COMPANY, AND MOREOVER WHICH ESCAPED THE PROVISIONS OF SECTION 6 8 OF THE ACT. MOREOVER, IN CASE OF MANY CLOSELY HELD COMPANIES AND EVEN IN NEW COMPANIES PROMOTERS USED TO ISSUE SHARE AT PREMIUM WITH THE MAIN PURPOSE OF KEEPING SHARE CAPITAL LOW, YET CAPITAL BASE STRONGER SO THAT BREAKUP VALUE AND MARKET VALUE IS HIGH. THIS LEADS TO ADVANTAGE OF LOW COST OF SERVICING SHARE CAPITAL AND ALSO IMPROVED PROSPECTS TO ISSUE SHARE AT PREMIUM IN FUTURE BY WAY OF INITIAL ISSUE OF OFFERING BY PROMOTERS. ONE MORE PRACTICAL ADVANTAGE WAS TO SAVE ON ACCOUNT OF COST OF FEES PAYABLE ON INCREASE OF AUTHORIZED CAPITAL. WHEN SHARES ARE ISSUED AT PREMIUM, NUMBER OF SHARES AND AUTHORIZED CAPITAL INCREASE LESSER IN COMPARISON OF CAPITAL RAISED BY WAY OF CAPITAL AND PREMIUM. THESE PROVISIONS ARE DEEMING PROVISIONS AS OTHERWISE SHARE PREMIUM AND CAPITAL IS A CAPITAL RECEIPT WHICH CANNOT BE TAXED AS INCOME. HOWEVER, W.E.F A. Y. 2013 - 14 FOR CLOSELY HELD COMPANIES SHARE PREMIUM OR SHARE CAPITAL IS DEEMED TO BE NORMAL INCOME IF SHARES ARE ISSUED EXCEEDING FAIR MARKET VALUE OF SHARES. BUT, IN ANY CASE THE AMENDMENT WILL APPLY FOR AND FROM AY 2013 - 14 AND NOT TO EARLIER ASSESSMENT YEAR BECAUSE THE AMENDMENT IS PROSPECTIVE AND NOT RETROSPECTIVE. HENCE, ON THE ISSUE OF SHARE PREMIUM, THE PROVISIONS OF SECTION 56(2) (VIIB) OF THE ACT CANNOT BE APPLIED FOR M AKING ADDITION EVEN UNDER SECTION 68 OF THE ACT. 15 . NOW LET US GO THROUGH THE DECISION RELIED ON BY THE ASSESSEE OF HON'BLE BOMBAY HIGH COURT IN CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE (P) LTD. (2017) 394 ITR 680 (BOM) WHICH READS AS UNDER: - (C) BEING AGG RIEVED, THE REVENUE CARRIED THE ISSUE IN THE APPEAL TO THE TRIBUNAL. THE IMPUGNED ORDER OF THE TRIBUNAL HOLDS THAT THE RESPONDENT ASSESSEE HAD ESTABLISHED THE IDENTITY, GENUINENESS ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 11 AND CAPACITY OF THE SHAREHOLDERS WHO HAD SUBSCRIBED TO ITS SHARES. THE IDEN TITY WAS ESTABLISHED BY THE VERY FACT THAT THE DETAILED NAMES, ADDRESSES OF THE SHAREHOLDERS, PAN NUMBERS, BANK DETAILS AND CONFIRMATORY LETTERS WERE FILED. THE GENUINENESS OF THE TRANSACTION WAS ESTABLISHED BY FILING A COPY OF SHARE APPLICATION FORM, THE FORM FILED WITH THE REGISTRAR OF COMPANIES AND AS ALSO BANK DETAILS OF THE SHAREHOLDERS AND THEIR CONFIRMATIONS WHICH WOULD INDICATE BOTH THE GENUINENESS AS ALSO THE CAPACITY OF THE SHAREHOLDERS TO SUBSCRIBE TO THE SHARES. FURTHER THE TRIBUNAL WHILE UPHOLD ING THE FINDING OF CIT(A) ALSO THAT THE AMOUNT RECEIVED ON ISSUE OF SHARE CAPITAL ALONG WITH THE PREMIUM RECEIVED THEREON, WOULD BE ON CAPITAL RECEIPT AND NOT IN THE REVENUE FIELD. FURTHER RELIANCE WAS ALSO PLACED UPON THE DECISION OF APEX COURT IN LOVELY EXPORTS (P) LTD. (SUPRA) TO UPHOLD THE FINDING OF THE CIT(A) AND DISMISSING THE REVENUE'S APPEAL. 16 . WE FIND THAT IN THE GIVEN FACTS OF THE CASE THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF GAGANDEEP INFRASTRUCTURE P. LTD. (SUPRA) SQUARELY AP PLIES TO THE ASSESSEE'S CASE. THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. GREEN INFRA LTD [2017] 392 ITR 7 (BOMBAY) IS SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE. DESPITE BEING THE SPECIFIC ARGUMENT OF THE CIT - DR THAT THE SHAR E PREMIUM DEFIES COMMERCIAL PRUDENCE, HON'BLE JURISDICTIONAL HIGH COURT HAS HELD THAT GENUINENESS OF THE TRANSACTION IS PROVED SINCE THE ENTIRE TRANSACTION IS RECORDED IN THE BOOKS OF THE ASSESSEE AND THE TRANSACTION HAS TAKEN PLACE THROUGH BANKING CHANNEL S. THE DECISION OF THE HONBLE HIGH COURT HAS SPECIFICALLY HELD THAT IT IS A PREROGATIVE OF THE BOARD OF DIRECTORS OF A COMPANY TO DECIDE THE PREMIUM AMOUNT AND IT IS THE WISDOM OF THE SHAREHOLDERS WHETHER THEY WANT TO SUBSCRIBE TO SUCH A HEAVY PREMIUM. TH E REVENUE AUTHORITIES CANNOT QUESTION THE CHARGING OF SUCH OF HUGE PREMIUM WITHOUT ANY BAR FROM ANY LEGISLATED LAW OF THE LAND. THE TRIBUNAL AFTER EXAMINING THE INGREDIENTS OF SECTION 68 OF THE ACT HELD THAT THE ADDITION OF SHARE PREMIUM UNDER SECTION 68 O F THE ACT CANNOT BE SUSTAINED. WE HEREUNDER REPRODUCE THE RELEVANT PARAGRAPH OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN EASE OF GREEN INFRA (SUPRA) FOR READY REFERENCE: 3.REGARDING QUESTION NO.(II): (A)BEFORE THE TRIBUNAL, THE REVENUE RAISE D A NEW PLEA VIZ. THAT THE SO CALLED SHARE PREMIUM HAS ALSO TO BE JUDGED ON THE TOUCHSTONE OF SECTION 68 OF THE ACT WHICH PROVIDES FOR CASH CREDIT BEING CHARGED TO TAX. THE IMPUGNED ORDER OF THE TRIBUNAL ALLOWED THE ISSUE TO BE RAISED BEFORE IT FOR THE FIR ST TIME, OVERRULING THE OBJECTION OF THE RESPONDENT - ASSESSEE. ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 12 (B)THE IMPUGNED ORDER EXAMINED THE APPLICABILITY OF SECTION 68 OF THE ACT ON THE PARAMETERS OF THE IDENTITY OF THE SUBSCRIBER TO THE SHARE CAPITAL, GENUINENESS OF THE TRANSACTION AND THE CAPACI TY OF THE SUBSCRIBER TO THE SHARE CAPITAL. IT FOUND THAT THE IDENTITY OF THE SUBSCRIBERS WAS CONFIRMED BY VIRTUE OF THE ASSESSING OFFICER ISSUING A NOTICES UNDER SECTION 133(6) OF THE ACT TO THEM. FURTHER, IT HOLDS THAT THE REVENUE ITSELF MAKES NO GRIEVANC E OF THIS IDENTITY OF THE SUBSCRIBERS. SO FAR AS THE GENUINENESS OF THE TRANSACTION OF SHARE SUBSCRIBER IS CONCERNED, IT CONCLUDES AS THE ENTIRE TRANSACTION IS RECORDED IN THE BOOKS OF ACCOUNTS AND REFLECTED IN THE FINANCIAL STATEMENTS OF THE ASSESSEE SINC E THE SUBSCRIPTION WAS DONE THROUGH THE BANKING CHANNELS AS EVIDENCED BY BANK STATEMENTS WHICH WERE EXAMINED BY THE TRIBUNAL. WITH REGARD TO THE CAPACITY OF THE SUBSCRIBERS THE IMPUGNED ORDER RECORDS A FINDING THAT 98% OF THE SHARES IS HELD BY IDFC PRIVATE EQUITY FUND WHICH IS A FUND MANAGER OF IDFC LTD. MOREOVER, THE CONTRIBUTIONS IN IDFC PRIVATE EQUITY FUND - II ARE ALL BY PUBLIC SECTOR UNDERTAKINGS. (C) MR.CHHOTARAY THE LEARNED COUNSEL FOR THE REVENUE STATES THAT THE IMPUGNED ORDERITSELF HOLDS THAT SHARE PREMIUM OF RS.490/ PER SHARE DEFIES ALL COMMERCIAL PRUDENCE. THEREFORE IT HAS TO BE CONSIDERED TO BE CASH CREDIT. WE FIND THAT THE TRIBUNAL HAS EXAMINED THE CASE OF THE REVENUE ON THE PARAMETERS OF SECTION 68 OF THE ACT AND FOUND ON FACTS THAT IT IS NOT S O HIT. THEREFORE, SECTION 68 OF THE ACT CANNOT BE INVOKED. THE REVENUE HAS NOT BEEN ABLE TO SHOW IN ANY MANNER THE FACTUAL FINDING RECORDED BY THE TRIBUNAL IS PERVERSE IN ANY MANNER. (D) THUS, QUESTION NO.(II) AS FORMULATED DOES NOT GIVE RISE TO ANY SUBST ANTIAL QUESTION OF LAW AND THUS NOT ENTERTAINED. 17 . IN VIEW OF THE AFORESAID, WE ARE OF THE VIEW THAT VALUATION IS NOT RELEVANT FOR DETERMINING GENUINENESS OF THE TRANSACTION FOR THE PURPOSE OF SECTION 68 OF THE ACT. WE ARE OF THE VIEW THAT CIT(A) HAS RIGHTL Y DELETED THE ADDITION ON ACCOUNT OF THE SHARE PREMIUM RELYING ON THE DECISION OF HON'BLE JURISDICTIONAL TRIBUNAL IN CASE OF GREEN INFRA LTD. (SUPRA). IT IS A SETTLED POSITION THAT WHAT IS APPARENT IS REAL UNLESS PROVED OTHERWISE. IT IS A SETTLED LEGAL P OSITION THAT 'APPARENT IS REAL' AND THE ONUS TO PROVE THAT THE APPARENT IS NOT THE REAL IS ON THE PARTY WHO CLAIMS IT TO BE SO AS HELD BY HON'BLE SUPREME COURT IN CASE OF CIT VS. DAULAT RAM RAWATMULL (1973) 87 ITR 349. 18 . IN THE PRESENT CASE, THE OVERWHELMING EVIDENCE PROVES THAT THE 'NATURE' OF RECEIPT IS SHARE PREMIUM AND SHARE APPLICATION MONEY. THE AUDITED ACCOUNTS OF BOTH PARTIES, THE STATUTORY SINCE IT WAS THE DEPARTMENT WHICH CLAIMED THAT THE SHARE PREMIUM IS NOT IN FACT SO, DESPITE THE STATUTORY FORMS VIZ. FORM 2 FOR RETURN OF ALLOTMENT AND FORM 20B FOR ANNUAL RETURN FILED WITH THE ROC ALL ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 13 SHOW THE 'NATURE' AS SHARE PREMIUM. IF THE DEPARTMENT WANTS TO CONTEND THAT WHAT IS APPARENT IS NOT REAL, IT IS THE ONUS OF THE DEPARTMENT TO PROVE THAT IT WAS ASSES SEE'S OWN MONEY WHICH WAS ROUTED THROUGH A THIRD PARTY. ONLY THEN CAN THE PROVISIONS OF SECTION 68 OF THE ACT BE INVOKED. THIS ASPECT IS CONSIDERED IN THE DECISION OF MUMBAI TRIBUNAL IN CASE OF GREEN INFRA LTD. VS. ITO (2013) 145 LTD 240, WHEREIN TRIBUNAL HAS HELD THAT IT IS A PREROGATIVE OF THE BOARD OF DIRECTORS OF A COMPANY TO DECIDE THE PREMIUM AMOUNT AND IT IS THE WISDOM OF THE SHAREHOLDERS WHETHER THEY WANT TO SUBSCRIBE TO SUCH A HEAVY PREMIUM. THE REVENUE AUTHORITIES CANNOT QUESTION THE CHARGING OF SUCH OF HUGE PREMIUM WITHOUT ANY BAR FROM ANY LEGISLATED LAW OF THE LAND. THE SAID DECISION HAS BEEN AFFIRMED BY HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF GREEN INFRA LTD (SUPRA). 19 . THE LD. COUNSEL FOR THE ASSESSEE MADE ANOTHER ARGUMENT THAT THE POWER OF CARRYING VALUATION IS NOT ENVISAGED BY THE LEGISLATURE FOR THE PURPOSE OF SECTION 68 OF THE ACT. HE ARGUED THAT, WHEREVER THE LEGISLATURE INTENDED TO GIVE THE POWER TO DETERMINE THE VALUE TO THE AO, IT EITHER PRESCRIBES RULE FOR VALUATION OF A PARTICULAR THING OR VESTED UPON THE AO THE POWER TO REFER TO THE VALUATION OFFICER. THE POWER OF AO TO MAKE A REFERENCE TO THE VALUATION OFFICER IS CONTAINED IN SECTION 142A OF THE ACT. SECTION 142A OF THE ACT AS IT STOOD FOR THE YEAR UNDER CONSIDERATION READS AS U NDER: 142. (1) FOR THE PURPOSES OF MAKING AN ASSESSMENT OR REASSESSMENT UNDER THIS ACT, WHERE AN ESTIMATE OF THE VALUE OF ANY INVESTMENT REFERRED TO IN SECTION 69 OR SECTION 6911 OR THE VALUE OF ANY BULLION, JEWELLERY OR OILIER VALUABLE ARTICLE REFERRED T O IN SECTION 69A OR SECTION 6911 OR FAIR MARKET VALUE OF ANY PROPERTY REFERRED TO IN SUB - SECTION (2) OF SECTION 56 IS REQUIRED TO BE MADE, THE ASSESSING OFFICER MAY REQUIRE THE VALUATION OFFICER TO MAKE AN ESTIMATE OF SUCH VALUE AND REPORT THE SAME TO HIM . 20 . WE HAVE CONSIDERED THE ISSUE AND FIND THAT THIS SECTION DOES NOT COVER SECTION 68 OF THE ACT. THUS, THE LEGISLATURE DOES NOT ENVISAGE ANY SORT OF VALUATION FOR THE PURPOSE OF SECTION 68 OF THE ACT. INDEED, VALUATION OF PREFERENCE SHARES IS A COMPLETELY D IFFERENT EXERCISE AS COMPARED TO VALUATION OF EQUITY SHARES. THE AO MAKES THE MENTION OF THE RESERVES AND LOSS WHILE CHALLENGING THE CHARGE OF SHARE PREMIUM ON PREFERENCE SHARES. 'RESERVES' COULD BE RELEVANT FOR VALUING EQUITY SHARES. THEY ARE NOT RELEVANT FOR VALUING PREFERENCE SHARES. PREFERENCE SHAREHOLDERS GET PRIORITY OVER THE EQUITY SHAREHOLDERS IN TERMS OF PAYMENT OF DIVIDEND AND DURING WINDING UP. THEY GET ONLY A FIXED RATE OF DIVIDEND. THE REDEMPTION AMOUNT DEPENDS ON THE TERMS OF ISSUE. THE CONVER SION DEPENDS ON THE TERMS OF ISSUE. THE TERMS OF ISSUE ARE RELEVANT FOR VALUING PREFERENCE SHARES. EVEN THE PRESENT RULE 11UA OF THE INCOME TAX RULES 1962 ARE APPLICABLE ONLY TO SECTION 56(2) OF THE ACT, REQUIRES VALUATION OF PREFERENCE SHARES BY THE MERCH ANT BANKERS. THE AO HAS NOT EVEN ATTEMPTED TO DO ANY SORT OF VALUATION OF PREFERENCE SHARES. HIS ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 14 ADDITION IS BASED ENTIRELY ON CONJECTURES AND SURMISES. IT IS SETTLED LAW THAT THE ASSESSMENT CANNOT HE MADE ON MERE SUSPICION, CONJECTURES AND SURMISES. 21 . EVEN AMENDMENT TO SECTION 68 BROUGHT BY FINANCE ACT, 2012 DOES NOT REFER TO VALUATION. THE INSERTION OF THE PROVISO TO SECTION 68 OF THE ACT BY FINANCE ACT, 2012 CASTS AN ADDITIONAL ONUS ON THE CLOSELY HELD COMPANIES TO PROVE SOURCE IN THE SHAREHOLDERS SUBSCR IBING TO THE SHARES OF COMPANIES. DURING THE COURSE OF THE HEARING, THE LD COUNSEL EXPLAINED THAT THE EXPLANATORY MEMORANDUM TO THE FINANCE BILL 2012 MAKES IT CLEAR THAT THE ADDITIONAL ONUS IS ONLY WITH RESPECT TO SOURCE OF FUNDS IN THE HANDS OF THE SHAREH OLDERS BEFORE THE TRANSACTION CAN BE ACCEPTED AS A GENUINE ONE. EVEN THE AMENDED SECTION DOES NOT ENVISAGE THE VALUATION OF SHARE PREMIUM. THIS IS FURTHER EVIDENT FROM A PARALLEL AMENDMENT IN SECTION 56(2) OF THE ACT WHICH BRINGS IN ITS AMBIT SO MUCH OF TH E SHARE PREMIUM AS CHARGED BY A COMPANY, NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED, AS IT EXCEEDS THE FAIR MARKET VALUE OF THE SHARES. IF ONE ACCEPTS THE LD CIT - DR'S CONTENTIONS THAT SECTION 68 OF THE ACT CAN HE APPLIED WHERE THE TRANSACTION IS PROVED TO BE THAT OF A SHARE ALLOTMENT THAT HERE THE VALUATION FOR CHARGING PREMIUM IS NOT JUSTIFIED, IT WILL MAKE THE PROVISIONS OF SECTION 56(2)(VIIB) OF THE ACT REDUNDANT AND NUGATORY. THIS CANNOT BE THE INTENTION OF THE LEGISLATURE ESPE CIALLY WHEN THE AMENDMENTS IN THE TWO SECTIONS ARE BROUGHT IN AT THE SAME TIME. 22 . IN VIEW OF THE MATTER, THE LD COUNSEL EXPLAINED THAT IT IS A SETTLED LAW THAT WHERE TWO VIEWS ARE POSSIBLE, THE VIEW FAVORABLE TO THE ASSESSEE SHOULD BE ADOPTED AS HELD BY HON BLE SUPREME COURT IN CASE OF CIT VS. VEGETABLE PRODUCTS LTD. (1973) 88 ITR 192. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED ITS ONUS BY ADEQUATELY DISCLOSING THE TRANSACTION IN ITS BOOKS OF ACCOUNTS, F ILING STATUTORY FORMS AS REGARDS ALLOTMENT OF SHARES, PROVIDING NAME, ADDRESS AND PAN OF THE SHAREHOLDERS, ETC. THE ASSESSEE HAS SUFFICIENTLY DISCHARGED THE ONUS CAST UPON IT FOR THE PURPOSE OF SECTION 68 OF THE ACT AND NO ADDITION CAN BE MADE ON THIS ACCO UNT. HENCE, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AND WE CONFIRM THE SAME. THESE TWO COMMON ISSUES OF REVENUES APPEAL ARE DISMISSED. ' 2.5. WE FIND THAT THE DECISION RENDERED BY THIS TRIBUNAL FOR ASST YEAR 2011 - 12 IN ASSESS EES OWN CASE ON THE SIMILAR SET OF FACTS SHALL APPLY MUTATIS MUTANDIS TO THE YEAR UNDER CONSIDERATION ALSO. HENCE , RESPECTFULLY FOLLOWING THE SAME, THE GROUND NO. I RAISED BY THE REVENUE IS DISMISSED. ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 15 3. THE NEXT ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS 17,29,780/ - MADE ON ACCOUNT OF DEPRECIATION ON INTANGIBLE ASSETS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILA BLE ON RECORD. WE FIND THAT THE LD AO OBSERVED THAT THE ASSESSEE HAD SHOWN ADDITION OF INTANGIBLE ASSETS OF RS 3,45,95,600/ - AS RIGHTS IN INFRASTRUCTURE AND CLAIMED DEPRECIATION THEREON DURING THE YEAR UNDER CONSIDERATION. THE LD AO OBSERVED THAT THIS ADDITION DOES NOT FALL UNDER THE LIST OF INTANGIBLE ASSETS U/S 32(1)(II) OF THE ACT AND ACCORDINGLY DENIED THE DEPRECIATION THEREON. WE FIND THAT THE ASSESSEE HAD PLEADED THAT IT HAD ACQUIRED RIGHTS IN INFRASTRUCTURE DURING THE YEAR UNDER CONSIDERATION AND SINCE SUCH RIGHTS WERE FOR USAGE OF COMMON INFRASTRUCTURE AND ADMINISTRATIVE FACILITIES FOR PLOTS ALLOTTED IN VRAJ INFRASTRUCTURE TEXTILE PART (VITP) , THE SAME WERE AKIN TO AND HAVING INEXTRICABLE LINK WITH EXCESS AND EFFECTIVE UTILIZATION OF FACTOR Y BUILDING AND OTHER FACILITIES ESTABLISHED BY THE ASSESSEE IN VITP. WE FIND THAT THE ASSESSEE HAD FURTHER PLEADED THAT DESPITE THE FACT THAT SUCH RIGHTS WERE SHOWN AS INTANGIBLE ASSETS ELIGIBLE FOR DEPRECIATION AT 25% IN THE TAX AUDIT REPORT, THE ASSE SSEE HAD ADOPTED RATE OF DEPRECIATION APPLICABLE TO FACTORY BUILDING AT 10% AND SINCE THE ASSETS WERE ACQUIRED IN THE SECOND HALF OF THE YEAR, IT HAD CLAIMED DEPRECIATION AT THE RATE OF 5% AMOUNTING TO RS 17,29,780/ - (3,45,95,600 * 10%* 50%). WE FIND THAT THE LD AO HAD DENIED DEPRECIATION ON THE ONLY GROUND THAT THE ASSESSEE HAD SELF - CONTRADICTED ITS CLAIM BY SAYING THAT SUCH RIGHTS WERE INTANGIBLE ASSETS ON ONE HAND AND BY CLAIMING DEPRECIATION AT THE RATE APPLICABLE TO FACTORY BUILDING ON THE OTHER HAND. WE FIND THAT THE LD CITA HAD GRANTED RELIEF TO THE ASSESSEE BY CATEGORICALLY HOLDING THAT THE RIGHTS IN INFRASTRUCTURE ACQUIRED ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 16 BY THE ASSESSEE IN VITP IS HAVING DIRECT NEXUS WITH EFFECTIVE UTILIZATION OF ITS FACTORY PREMISES IN ITS TEXTI LE PARK. THIS FACTUAL FINDING HAS NOT BEEN CONTROVERTED BY THE REVENUE BEFORE US . EITHER WAY, THE INCURRENCE OF EXPENDITURE TOWARDS ACQUIRING RIGHTS IN INFRASTRUCTURE IN VITP HAS NOT BEEN DOUBTED BY THE REVENUE. THE ONLY ISSUE IS THE RATE OF DEPRECIA TION THEREON. THE LD CITA HAD ALSO OBSERVED THAT THE ASSESSEE IS ELIGIBLE FOR 25% DEPRECIATION BUT HAD CLAIMED ONLY 10% AND ACCORDINGLY DELETED THE DISALLOWANCE MADE BY THE LD AO. HENCE WE DO NOT DEEM IT FIT TO INTERFERE IN THE ORDER OF THE LD CITA. ACCO RDINGLY, THE GROUND NO. II RAISED BY THE REVENUE IS DISMISSED. 4. THE LAST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION MADE IN THE SUM OF RS 6,12,92,931/ - U/S 56(2)(VIIA) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE BECAME MEMBER IN VRAJ INTEGRATED TEXTILE PARK LTD (VITPL) FORMED ON THE BASIS OF SCHEME OF INTEGRATED TEXTILE PA RK (SITP) OF MINISTRY OF TEXTILES, GOVERNMENT OF INDIA. THE MAIN OBJECTIVE OF THE SAID SCHEME IS TO PROVIDE STATE OF THE ART INFRASTRUCTURE AND SUPPORT TO THE MEMBERS, WHO ARE SETTING UP UNITS IN THE TEXTILE PARK. AS PER THE SITP POLICY, SPECIAL PURPOSE VEHICLE (SPV) SHALL INVARIABLY BE A CORPORATE BODY REGISTERED UNDER THE COMPANIES ACT . TO BECOME A MEMBER IN THE SAID TEXTILE PARK, THE INVESTOR (IE CORPORATE BODY) SHOULD ACQUIRE SHARE CAPITAL IN THE TEXTILE PARK. ACCORDINGLY, THE ASSESSEE ACQUIRED 469 318 SHARES AT A FACE VALUE OF RS 10 EACH DURING THE YEAR UNDER CONSIDERATION. WE FIND THAT THE LD AO HAD MADE ADDITION U/S 56(2)(VIIA) OF THE ACT ON THE GROUND THAT ASSESSEE HAD ACQUIRED SHARES OF VITPL AT A PRICE LESS THAN FAIR MARKET VALUE OF SUCH SHARE S. WE FIND THAT ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 17 THE LD CITA BY PLACING RELIANCE ON THE DECISION OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR THE ASST YEAR 2011 - 12 ON THE SIMILAR SET OF FACTS , DELETED THE ADDITION MADE U/S 56(2)(VIIA) OF THE ACT. WE FIND THAT THIS TRIBUNAL HAD ALSO D ISMISSED THE REVENUES APPEAL ON THIS GROUND FOR THE ASST YEAR 2011 - 12 IN ITA NO. 2671/MUM/2016 DATED 19.2.2019 BY HOLDING AS UNDER: - 23 . THE THIRD ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY AO BY INVOKING THE PROVISIONS OF SECTION 56(2)(VII)(A) OF THE ACT. FOR THIS REVENUE HAS RAISED THE FOLLOWING GROUND NO. 3: - II. THE LEARNED CIT(A) HAS ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF 1,18,67,508/ - UNDER SECTION 56(2)( VIIA) OF THE INCOME TAX ACT, 1961. 24 . BRIEF FACTS ARE THAT THE ASSESSEE COMPANY BECAME MEMBER IN VRAJ INTEGRATED TEXTILE PARK LTD. (VITPL), WHICH IS SPECIAL PURPOSE VEHICLE, TEXTILE PARK FORMED ON THE BASIS OF THE SCHEME OF INTEGRATED TEXTILE PARK (SLTP) OF THE MINISTRY OF TEXTILE, GOVERNMENT OF INDIA. THE MAIN OBJECTIVE OF THIS SCHEME IS TO PROVIDE STATE OF THE ART INFRASTRUCTURE AND SUPPORT TO THE MEMBERS WHO ARE SETTING UP UNITS IN THE TEXTILE PARK. TO BECOME A MEMBER IN THE SAID TEXTILE PARK, THE ASSESSE E WAS REQUIRED TO SUBSCRIBE TO THE SHARE CAPITAL BEING TOTAL 2,45,450 SHARES OF THE FACE VALUE OF RS.10 PER SHARE. THESE SHARES HAVE BEEN ALLOTTED TO THE APPELLANT - COMPANY AT THE FACE VALUE AND THUS A TOTAL CONSIDERATION OF RS.24,54,500/ - WAS PAID BY THE A SSESSEE. THE ASSESSING OFFICER EXAMINED THIS ISSUE AND WAS OF THE VIEW THAT THE SHARES HAVE BEEN ACQUIRED BY THE ASSESSEE AT A VALUE WHICH IS LESS THAN THE FAIR MARKET VALUE. ACCORDING TO THE ASSESSING OFFICER, BY VIRTUE OF THE PROVISIONS OF SECTION 56(2)( VII)(A) THE MARKET VALUE OF THE SHARES HAS TO BE ESTIMATED UNDER RULE 11UA OF THE I.T. RULES. THE ASSESSING OFFICER WORKED OUT SUCH MARKET VALUE AT RS.58.35 PER SHARE AND, THEREFORE, HELD THE VIEW THAT THE DIFFERENCE OF RS.48.35 PER SHARE WAS REQUIRED TO B E BROUGHT TO THE CHARGE OF TAX AS INCOME FROM OTHER SOURCES AS STIPULATED U/S.56(2)(VII)(A). ACCORDINGLY, THE AO ADDED THE AMOUNT BEING DIFFERENT IN CONSIDERATION WHICH IS PAID LESS IN COMPARISON TO THE FAIR MARKET VALUE IN EXCESS OF 50,000/ - I.E. AMOUNTING TO 1,18,67,508/ - AS TAXABLE IN THE HANDS OF THE ASSESSEE COMPANY UNDER SECTION 56(2)(VIIA) OF THE ACT. FOR THIS, THE AO OBSERVED IN PARA 6.4 AS UNDER: - 'A. AS PER TH E PROVISIONS OF SECTION 56(2)(VII)(A) OF THE ACT, WHERE A COMPANY RECEIVES, IN ANY PREVIOUS YEAR, FROM ANY ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 18 PERSON OR PERSONS ON OR AFTER THE 1' DAY OF JUNE, 2010, ANY PROPERTY BEING SHARES OF A COMPANY FOR A CONSIDERATION WHICH IS LESS THAN THE AGGREGATE F AIR MARKET VALUE BY AN AMOUNT EXCEEDING FIFTY THOUSAND RUPEES SHALL BE CHARGEABLE TO INCOME TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. B. THE APPELLANT IS COMPANY WHICH HAS EITHER PURCHASED OR RECEIVED ON ALLOTMENT THE SHARES IN QUESTION AFTER 01.06.201 0 WHICH IS AFTER THE PROVISIONS OF THE SAID SECTION CAME INTO EFFECT. C. THE VALUATION AS CONTENDED BY APPELLANT IS NOT SUPPORTED BY ANY CORROBORATIVE EVIDENCES. THE METHOD AS PRESCRIBED UNDER THE RULE 11UA FOR VALUATION OF EQUITY SHARES OF AN UNLISTED COM PANY IS EITHER NET ASSET VALUATION METHOD OR THE DISCOUNTED CASH FLOW METHOD. THE APPELLANT'S SUBMISSION IS NOT IN ACCORDANCE WITH ANY OF THE ABOVE METHODS AND HENCE REJECTED. D. AS PER RULE 11UA OF IT RULES, THE APPELLANT HAS AN OPTION TO CHOOSE THE METHO DS AS PRESCRIBED THEREIN WITH REGARD TO VALUATION OF EQUITY SHARES. SUCH VALUATION SHALL BE SUPPORTED BY A REPORT ISSUED BY AN ACCOUNTANT SPECIFIED U/S.288 OF THE IT ACT, 1961. THE APPELLANT HAS HOWEVER NOT EXERCISED ANY SUCH OPTION OR SUBMITTED ANY SUCH V ALUATION REPORT ISSUED BY AN ACCOUNTANT. THEREFORE, THE UNSIGNED VALUATION WORKING WITHOUT EVEN THE BASIC SUPPORTING DOCUMENTS IS CONSIDERED AS INVALID AND NOT ACCEPTABLE. E. AS REGARDS THE MODE OF RECEIPTS OF THE SHORES BY APPELLANT, THE SECTION SPECIFIES ONLY 'RECEIPT OF SHARE'. IT DOES NOT SPECIFY THE MODE OF RECEIPT. THEREFORE, THE MODE OF RECEIPT OF SHARES CAN BE EITHER BY TRANSFER OR BY ALLOTMENT. WHAT IS IMPORTANT HERE FOR INVOKING THE SECTION IS THE RECEIPT OF AN ASSET AND NOT THE MORE OF RECEIPT. T HE APPELLANT ADMITTEDLY RECEIVED THE SHARES FOR A CONSIDERATION WHICH IS BELOW THE FAIR MARKET VALUE AS POINTED OUT IN THE SHOW CAUSE NOTICE. F. IN VIEW OF THE ABOVE STATED FACTS AND LEGALITIES, THE AMOUNT OF RS.1,18,67,508 BEING THE DIFFERENCE IN THE CONS IDERATION WHICH IS PAID LESS IN COMPARISON TO FAIR MARKET VALUE IN EXCESS OF RS. 50,000 IS TAXABLE IN THE HANDS OF APPELLANT COMPANY U/S.56(2)(VIA9(A) OF THE ACT. ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 19 G. ACCORDINGLY AN AMOUNT OF RS.1,18,67,508 IS TAXED IN THE HANDS OF APPELLANT UNDER THE HEAD INCOME FROM OTHER SOURCES.' 25 . AGGRIEVED, ASSESSEE PREFERRED THE APPEAL BEFORE CIT(A), WHO DELETED THE ADDITION BY OBSERVING IN PARA 9.25 AND 9.26 AS UNDER: - 9.25 IT IS SEEN THAT THE ASSESSING OFFICER WAS ALLOWED OPPORTUNITY DURING THE COURSE OF THE ASSESS MENT PROCEEDINGS AND HE HAS FILED A REMAND REPORT. IN THE REMAND REPORT NO SUBMISSIONS HAVE BEEN MADE BY THE ASSESSING OFFICER ON THIS ISSUE. THEREFORE, THE LOGICAL ASSUMPTION IS THAT THE ASSESSING OFFICER HAS BEEN UNABLE TO FIND OUT ANY DISCREPANCY IN THE SUBMISSIONS MADE BY THE APPELLANT - COMPANY. AS MENTIONED ABOVE, THE MAIN CONTENTION OF THE APPELLANT - COMPANY IS THAT THE RESERVES AND SURPLUS APPEARING IN THE BALANCE SHEET AS ON 1 APRIL, 2010 AND AMOUNTING TO RS.23,94,41,958/ - ENTIRELY COMPRISES OF GRANT /SUBSIDY RECEIVED FROM THE GOVERNMENT OF INDIA AND, THEREFORE, THIS AMOUNT CANNOT BE TAKEN INTO ACCOUNT WHILE DETERMINING THE FAIR MARKET VALUE OF SHARES UNDER RULE 11UA. IN THE SUBMISSIONS WHICH HAVE BEEN REPRODUCED ABOVE, THE APPELLANT - COMPANY HAS PROVID ED CALCULATION OF FAIR MARKET VALUE AFTER IGNORING THE SAID SUBSIDY AND ON THIS BASIS HAS CONTENDED THAT THE FAIR MARKET VALUE DOES NOT EXCEED THE FACE VALUE OF RS.10. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, IT HAS BEEN SUBMITTED ON BEHALF OF THE A PPELLANT - COMPANY, THAT IT IS ONLY A MATTER OF PRESENTATION IN THE BALANCE SHEET AS TO HOW THE GOVERNMENT GRANT IS REFLECTED. BY FOLLOWING SOME DIFFERENT METHOD, THE GOVERNMENT GRANT COULD HAVE BEEN DIRECTLY REDUCED FROM THE COST OF THE ASSETS AND IF THE AP PELLANT HAD FOLLOWED THIS METHOD, THE FAIR MARKET VALUE OF THE SHARES WOULD HAVE AUTOMATICALLY COME TO A LEVEL WHICH IS NOT MORE THAN THE FACE VALUE OF RS.10. IT I S, THEREFORE, CONTENDED THAT HAVING REGARD TO THE ENTIRE FACTS AND CIRCUMSTANCES AND THE OBJECTIVE OF THESCHEME OF INTEGRATED TEXTILE PARK NO INCOME CAN BE BROUGHT TO THE CHARGE OF TAX U/S 56(2)(VII)(A) OF THE IT ACT. 9.26 I HAVE CAREFULLY CONSIDERED THE F ACTS AND CIRCUMSTANCES RELEVANT TO THIS ISSUE. I HAVE ALSO DULY CONSIDERED THE BASIS PROVIDED IN THE ASSESSMENT ORDER FOR MAKING THIS ADDITION AND ALSO THE DETAILED SUBMISSIONS MADE ON BEHALF OF THE APPELLANT - COMPANY WHICH HAVE BEEN REPRODUCED ABOVE. I FIN D CONSIDERABLE FORCE IN THE SUBMISSION THAT THE FAIR MARKET VALUE UNDER RULE 11UA ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 20 MUST BE DETERMINED IN AN OBJECTIVE MANNER SO AS TO REFLECT THE CORRECT MARKET VALUE OF THE SHARES. VITPL, AS MENTIONED ABOVE, IS A SPECIAL PURPOSE VEHICLE FORMED TO FACILITAT E THE SCHEME OF INTEGRATED TEXTILE PARK MOOTED BY THE MINISTRY OF TEXTILES, GOVERNMENT OF INDIA. IT IS NOT A PROFIT MAKING ENTITY. THE ENTIRE RESERVES AND SURPLUS APPEARING IN THE BALANCE SHEET AS ON 1.4.2010 ARE ONLY ON ACCOUNT OF THE GRANT RECEIVED FROM THE GOVERNMENT OF INDIA AND NOT ON THE BASIS OF ANY BUSINESS PROFIT EARNED BY THE COMPANY. IN THESE CIRCUMSTANCES, IN MY VIEW, THERE CAN BE NO INFERENCE THAT THE SHARES OF VITPL HAVE BEEN ACQUIRED BY THE APPELLANT - COMPANY AT A PRICE WHICH IS LESS THAN ITS FAIR MARKET VALUE. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES THE ADDITION OF RS.1,18,67,508/ - IS DELETED. GROUND APPEAL NO.4 IS ALLOWED. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE TRIBUNAL. 26 . WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE GONE THROUGH THE FINDINGS OF CIT(A) AND NOTED THAT THE ENTIRE RESERVES AND SURPLUS APPEARING IN THE BALANCE SHEET AS ON 1.4.2010 ARE ONLY ON ACCOUNT OF THE GRANT RECEIVED FROM THE GOVERNMENT OF INDIA AND NOT ON THE BA SIS OF ANY BUSINESS PROFIT EARNED BY THE COMPANY. IN THESE CIRCUMSTANCES, IN MY VIEW, THERE CAN BE NO INFERENCE THAT THE SHARES OF VITPL HAVE BEEN ACQUIRED BY THE ASSESSEE AT A PRICE WHICH IS LESS THAN ITS FAIR MARKET VALUE. HENCE, WE FIND NO REASON TO REV ERSE THE FINDINGS OF CIT(A) AND ACCORDINGLY, THE SAME IS UPHELD. 4.2. WE FIND THAT THE DECISION RENDERED BY THIS TRIBUNAL FOR ASST YEAR 2011 - 12 IN ASSESSEES OWN CASE ON THE SIMILAR SET OF FACTS SHALL APPLY MUTATIS MUTANDIS TO THE YEAR UNDER CONSIDERATI ON ALSO. HENCE RESPECTFULLY FOLLOWING THE SAME, THE GROUND NO. III RAISED BY THE REVENUE IS DISMISSED. 5. THE GROUND NOS. IV AND V RAISED BY THE REVENUE ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. ITA NO . 5966/MUM/2016 M/S. CHIRIPAL POLY FILMS LTD., 21 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 24 / 03 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( JUSTICE P P BHATT ) SD/ - (M.BALAGANESH) PRESIDENT ACCOUNTANT MEMBER MUMBAI ; DATED 24 / 03 / 2021 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//