M/s. Vee Ess Sales Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 6010/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4836 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 31-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 25-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Share purchase agreement; Question of law; Accommodation entries; Onus to prove
• Section: 143(3); 133(6); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC: NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.6010 & 6011/DEL./2016 ASSESSMENT YEARS 2005-2006 & 2006-2007 M/S. VEE ESS SALES P. LTD., A - 38, 1 ST FLOOR, MAYA PURI INDUSTRIAL AREA, PHASE-II, NEW DELHI110064. PANAAACV9520B VS. THE INCOME TAX OFFICER, WARD-17(2), NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI VED JAIN, C.A. FOR REVENUE : SHRI T. VASANTHAN, SR. D.R. DATE OF HEARING : 21.08.2017 DATE OF P RONOUNCEMENT : 29 .08.2017 ORDER BOTH THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF LD. CIT(A)-9, NEW DELHI, DATED 16 TH SEPTEMBER, 2016 FOR A.YS. 2005-2006 AND 2006-2007. 2. I HAVE HEARD LEARNED REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE MATERIAL ON RECORD. LEARNED REPRESENTATIVES OF BOTH THE PARTIES MAINLY ARGUED I N A.Y. 2005- 2006 AND HAVE SUBMITTED THAT THE ISSUES ARE IDENTIC AL IN BOTH THE APPEALS. FOR THE PURPOSE OF DISPOSAL OF BOTH THE AP PEALS, I TAKE- UP THE APPEAL FOR A.Y. 2005-2006 AS UNDER. 2 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. ITA.NO.6010/DEL./2016 A.Y. 2005-2006 : 3. IN THIS APPEAL, THE ASSESSEE CHALLENGED THE REO PENING OF THE ASSESSMENT UNDER SECTION 147 OF THE I.T. ACT AND ADDITION OF RS.6 LAKHS UNDER SECTION 68 OF THE I.T. ACT. THE RETURN OF INCOME WAS FILED AT RS.1,41,160 ON 26 TH OCTOBER, 2005. THE A.O. RECORDED REASONS THAT ASSESSEES INCOME HAS ESCAPED TO THE TUNE OF RS.6 LAKHS. THEREFORE, NOTICE UNDER SECTION 148 WAS ISSUED. THE ASSESSEE WAS PROVIDED COPY OF THE REASONS. THE ASSESSEE IN RESPONSE TO THE NOTICE SUBMITTED THAT THE RETURN OR IGINALLY FILED MAY BE TREATED AS RETURN AS HAVING BEEN FILED IN RE SPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT. 3.1. THE ASSESSEE-COMPANY IS ENGAGED IN MANUFACTUR ING AND TRADING OF ELECTRICAL GOODS AND COMPONENTS. IN THE INSTANT CASE, INFORMATION HAS BEEN RECEIVED FROM COMMISSION ER OF INCOME TAX, CENTRAL-2, NEW DELHI THAT ASSESSEE HAS TAKEN/RECEIVED ACCOMMODATION ENTRIES TOTALLING TO R S.6 LAKHS FROM COMPANIES FLOATED BY SHRI ASHEEM GUPTA ON 27 TH AUGUST, 2004 THROUGH CORPORATION BANK FOR A SUM OF RS.3 LAK HS EACH FROM M/S. MODERATE CREDIT CORPORATION PVT. LTD. SHR I ASHEEM GUPTA HAS STATED ON OATH AT THE TIME OF SEARCH THAT CASH AND 3 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. OTHER UNEXPLAINED DEPOSITS IN VARIOUS BANK ACCOUNTS OF SEVERAL ENTITIES CONTROLLED BY HIM AND HE WAS MERELY PROVID ING ACCOMMODATION ENTRIES. THE MODUS OPERANDI OF SHRI ASHEEM GUPTA WAS TO ACCEPT CASH FROM THE BENEFICIARIES AND CASH DEPOSITED IN BANK ACCOUNT OF COMPANIES FLOATED BY H IM. THE ASSESSEE SUBMITTED THAT IT HAD RECEIVED TWO CHEQUES OF RS.3 LAKHS EACH TOWARDS SHARE APPLICATION MONEY FROM M/S . MODERATE CREDIT CORPORATION PVT. LTD., ON 27 TH AUGUST, 2004 AND CERTIFICATES WERE ISSUED. IN ORDER TO VERIFY THE GE NUINENESS OF THE TRANSACTIONS, NOTICE UNDER SECTION 133(6) WAS ISSUE D TO M/S. MODERATE CREDIT CORPORATION PVT. LTD., BUT GENUINEN ESS OF THE TRANSACTIONS COULD NOT BE VERIFIED. THE A.O. ACCORD INGLY, MADE ADDITION OF RS.6 LAKHS TO THE INCOME OF ASSESSEE. T HE LD. CIT(A) ON THE SAME REASONING DISMISSED THE APPEAL OF ASSES SEE. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SUFFICIENT EVIDENCES WERE FILED BEFORE A.O. TO PROV E THE GENUINENESS OF THE TRANSACTIONS IN THE MATTER. PAPE R BOOK, PAGE NO.5 IS THE BALANCE-SHEET OF THE ASSESSEE-COMPANY. PAPER BOOK, PAGE NO.18 IS REPLY FILED BEFORE A.O. ALONG WITH AL L DOCUMENTARY EVIDENCES. THE ASSESSEE-COMPANY FILED COPY OF COMPU TATION OF 4 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. INCOME, RETURN OF INCOME, AUDITED BALANCE-SHEET, CO NFIRMATION FROM M/S. MODERATE CREDIT CORPORATION PVT. LTD., WI TH SHARE APPLICATION FORM, COPY OF THEIR INCOME TAX RETURN, BANK STATEMENT OF THIS COMPANY TO SHOW SUBSCRIBER COMPANY INVESTED IN ASSESSEE-COMPANY THROUGH BANKING CHANNEL AND NO CAS H HAVE BEEN DEPOSITED BY THE COMPANY IN THEIR BANK ACCOUNT S. THE NAME OF THE SUBSCRIBER COMPANY WAS EARLIER M/S. SUM A FINANCE & INVESTMENT LTD., WHICH WAS LATER ON CHANGED TO M /S. MODERATE CREDIT CORPORATION PVT. LTD. CERTIFICATE OF REGISTR AR OF COMPANIES (ROC) WAS ALSO FILED. ALL THE AMOUNTS RECEIVED AS SHARE APPLICATION MONEY WERE REPORTED TO ROC. M/S. MODERA TE CREDIT CORPORATION PVT. LTD., IS A LISTED COMPANY WITH DEL HI STOCK EXCHANGE. THE COMPANY IS REGISTERED WITH REGISTRAR OF COMPANIES AND ALSO REGISTERED AS NON-BANKING FINANC E COMPANY WITH RESERVE BANK OF INDIA (RBI). ALL THE TRANSAC TIONS WERE ROUTED THROUGH BANKING CHANNEL. PAPER BOOK PAGE NO. 26 IS REPLY FILED BY M/S. MODERATE CREDIT CORPORATION PVT. LTD. , DIRECTLY TO THE A.O. IN RESPONSE TO THE NOTICE ISSUED UNDER SEC TION 133(6)/131 OF THE I.T. ACT IN WHICH THE SUBSCRIBER COMPANY REITERATED THE SAME FACTS AS EXPLAINED ABOVE AND AL SO FILED THEIR AUDITED ACCOUNTS, SHARE CERTIFICATE, BANK STATEMENT S AND 5 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. CONFIRMATION AND CONFIRMING THE TRANSACTIONS WITH T HE ASSESSEE. ALL THE DOCUMENTS ARE FILED IN THE PAPER BOOK. PAPE R BOOK PAGE NO.45 IS THE BALANCE-SHEET OF THE COMPANY TO SHOW T HAT THEIR SHARE CAPITAL WAS AT RS.9,90,14,800 WHICH IS SUFFIC IENT TO MAKE INVESTMENT IN ASSESSEE-COMPANY. PAPER BOOK PAGE NO. 32 IS THE LIST OF DIRECTORS IN M/S. MODERATE CREDIT CORPORATI ON PVY. LTD., IN WHICH SHRI SHRI ASHEEM GUPTA HAS NO CONNECTION W HATSOEVER AND HE WAS ALSO NOT CONNECTED WITH THE SUBSCRIBER C OMPANY. HE HAS ALSO FILED COPY OF THE ASSESSMENT ORDER UNDER S ECTION 143(3) DATED 23 RD DECEMBER, 2008 FOR A.Y. 2006-2007 IN THE CASE OF M/S. MODERATE CREDIT CORPORATION PVT. LTD., TO SHOW THAT IT WAS A GENUINE COMPANY AND ASSESSED TO TAX BY THE REVENUE DEPARTMENT. HE HAS, THEREFORE, SUBMITTED THAT ASSES SEE-COMPANY HAS PROVED THE IDENTITY OF THE SUBSCRIBER COMPANY, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE PARTY HAS ALSO DIRECTLY CONFIRMED THE GENUINENESS OF THE TRANSACTION TO THE A.O. HE HAS RELIED UPON THE DECISION OF DELHI H IGH COURT IN THE CASE OF CIT-9 ERSTWHILE CIT-VI VS. M/S. VRINDAV AN FARMS P. LTD., 2015 (11) TMI 279 IN WHICH PARAS 3 TO 5 READS AS UNDER : 6 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. 3. MS. SURUCHI AGGARWAL, LEARNED SENIOR STANDING COUNSEL FOR THE APPELLANT, RELIED UPON THE DECISION OF THIS COURT IN CIT V. NOVA PROMOTERS & FINLEASE LTD. 342 ITR 169 AND URGED THAT THE ASSESSING OFFICER (AO) WAS NOT R EQUIRED TO POINT TO THE SOURCE FROM WHICH THE MONEY WAS RECEI VED BY THE ASSESSEE. ON THE OTHER HAND, IT WAS INCUMBENT UPON THE ASSESSEE TO OFFER A SATISFACTORY EXPLANATION REGARD ING NATURE AND SOURCE OF THE FUNDS. 3. THE ITAT HAS IN THE IMPUGNED ORDER NOTICED THA T IN THE PRESENT CASE THE REVENUE HAS NOT DOUBTED THE ID ENTITY OF THE SHARE APPLICANTS. THE SOLE BASIS FOR THE REVENU E TO DOUBT THEIR CREDITWORTHINESS WAS THE LOW INCOME AS REFLEC TED IN THEIR INCOME TAX RETURNS. THE ENTIRE DETAILS OF THE SHARE APPLICANTS WERE MADE AVAILABLE TO THE AO BY THE ASS ESSEE. THIS INCLUDED THEIR PAN NUMBERS, CONFIRMATIONS, THE IR BANK STATEMENTS, THEIR BALANCE SHEETS AND PROFIT AND LOS S ACCOUNTS AND THE CERTIFICATES OF INCORPORATION ETC. IT WAS O BSERVED BY THE ITAT THAT THE AO HAD NOT UNDERTAKEN ANY INVESTI GATION OF THE VERACITY OF THE ABOVE DOCUMENTS SUBMITTED TO HI M. IT HAS BEEN RIGHTY COMMENTED BY THE ITAT THAT WITHOUT DOUB TING THE 7 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. DOCUMENTS, THE AO COMPLETED THE ASSESSMENT ONLY ON THE PRESUMPTION THAT LOW RETURN OF INCOME WAS SUFFICIEN T TO DOUBT THE CREDIT WORTHINESS OF THE SHARE HOLDERS. 4. THE COURT IS OF THE VIEW THAT THE ASSESSEE BY PRODUCED SUFFICIENT DOCUMENTATION DISCHARGED ITS IN ITIAL ONUS OF SHOWING THE GENUINENESS AND CREDITWORTHINESS OF THE SHARE APPLICANTS. IT WAS INCUMBENT TO THE AO TO HAV E UNDERTAKEN SOME INQUIRY AND INVESTIGATION BEFORE CO MING TO A CONCLUSION ON THE ISSUE OF CREDITWORTHINESS. IN PAR A 39 OF THE DECISION IN NOVA PROMOTERS (SUPRA), THE COURT HAS T AKEN NOTE OF A SITUATION WHERE THE COMPLETE PARTICULARS OF TH E SHARE APPLICANTS ARE FURNISHED TO THE AO AND THE AO FAILS TO CONDUCT AN INQUIRY. THE COURT HAS OBSERVED THAT IN THAT EVENT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSE E UNDER SECTION 68 OF THE ACT AND IT WILL BE OPEN TO THE RE VENUE TO MOVE AGAINST THE SHARE APPLICANTS IN ACCORDANCE WIT H LAW. 5. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEALS, THE COURT IS SATISFIED THAT NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEALS ARE DISMISSED. 8 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. 4.1 DECISION OF THE HONBLE DELHI HIGH COURT IN TH E CASE OF PR. CIT VS. M/S. GOODVIEW TRADING PVT. LTD., (2016) (12) TMI 617 IN WHICH PARAS 8 TO 10 READS AS UNDER : 8. IT IS QUITE EVIDENT FROM THE CIT (A)S REASONING IN PARAGRAPH 4.3, THAT THE MATERIALS CLEARLY POIN TED TO THE SHARE APPLICANTS POSSESSING SUBSTANTIAL MEANS T O INVEST IN THE ASSESSEES COMPANY. THE AO SEIZED CERT AIN MATERIAL TO SAY THAT MINIMAL OR INSUBSTANTIAL AMOUNTS WAS PAID AS TAX BY SUCH SHARE APPLICANTS AND DID NOT CARRY OUT A DEEPER ANALYSIS OR RATHER CHOSE TO IGNORE IT. IN THESE CIRCUMSTANCES, THE INFERENCES DRAWN BY THE CI T (A) ARE NOT ONLY FACTUAL BUT FACIALLY ACCURATE. 9. HAVING REGARD TO THESE CIRCUMSTANCES, THE COURT DISCERNS NO QUESTION OF LAW, LEAST A SUBSTANT IAL QUESTION, HAVING REGARD TO THE FACT THAT THE JUDGMENT IN LOVELY EXPORTS (SUPRA) WAS CITED AND APPLIED. 10. FOR THESE REASONS, THERE IS NO MERIT IN THE APPEAL; THE SAME IS ACCORDINGLY DISMISSED. 4.2. HE HAS ALSO RELIED UPON THE ORDER OF THE ITAT , DELHI BENCH IN THE CASE OF PRABHATAM INVESTMENT P. LTD., VS. ACIT 9 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. DATED 17 TH APRIL, 2017 IN WHICH THE TRIBUNAL RELIED UPON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. WINSTRAL PETROCHEMICALS P. LTD., 330 ITR 603 (DEL.) IN WHICH IT WAS HELD AS UNDER : DISMISSING THE APPEAL, THAT IT HAD NOT BEEN DISPUT ED THAT THE SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSE E- COMPANY BY WAY OF ACCOUNT PAYEE CHEQUES, THROUGH NO RMAL BANKING CHANNELS. ADMITTEDLY, COPIES OF APPLICATION FOR ALLOTMENT OF SHARES WERE ALSO PROVIDED TO THE ASSES SING OFFICER. SINCE THE APPLICANT COMPANIES WERE DULY INCORPORATED, WERE ISSUED PAN CARDS AND HAD BANK AC COUNTS FROM WHICH MONEY WAS TRANSFERRED TO THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES, THEY COULD NOT BE SAID TO BE NON- EXISTENT, EVEN IF THEY, AFTER SUBMITTING THE SHARE APPLICATIONS HAD CHANGED THEIR ADDRESSES OR HAD STOPPED FUNCTION ING. THEREFORE, THE COMMISSIONER (APPEALS) AND THE TRIBU NAL WERE JUSTIFIED IN HOLDING THAT THE GENUINENESS OF THE TR ANSACTIONS HAD BEEN DULY ESTABLISHED BY THE ASSESSEE. 4.3. FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. WINSTRAL PETROCHEMICALS P. L TD., (SUPRA), THE 10 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. TRIBUNAL CAME TO THE FINDING THAT INVESTOR COMPANIE S HAVE CONFIRMED MAKING INVESTMENT IN ASSESSEE-COMPANY WHO WERE HAVING SUFFICIENT NET WORTH TO MAKE INVESTMENT IN A SSESSEE COMPANY. THEREFORE, THE ASSESSEE HAS BEEN ABLE TO P ROVE THE IDENTITY OF SHARE APPLICATIONS, THEIR CREDITWORTHIN ESS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THE A PPEAL OF ASSESSEE ON MERIT HAS BEEN ALLOWED. THE LEARNED COU NSEL FOR THE ASSESSEE THEREFORE, SUBMITTED THAT ADDITION MADE MA Y BE DELETED. 5. THE LD. D.R. ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND RELIED UPON THE ORDER OF ITAT, DELHI BENCH IN THE CASE OF ITO VS. M/S. SBS PROPERTIES AN D FINVEST P. LTD., NEW DELHI, DATED 30 TH MAY, 2016 IN WHICH THE TRIBUNAL HELD THAT ASSESSEE HAS NOT DISCHARGED THE BURDEN TO PROVE TH AT LAY ON IT, TO PROVE THE GENUINENESS OF THESE CASH CREDITS AS WELL AS THE CREDITWORTHINESS OF THE SHARE APPLICATION COMPANIES . THEREFORE, ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION WA S VACATED AND DEPARTMENTAL APPEAL IS ALLOWED. HE HAS ALSO RELIED UPON THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING & MARKETING P. LTD., 375 ITR 372 (DEL.) IN WHICH IT WAS HELD THAT IT IS AN OBLIGATION OF THE A.O. TO CONDUCT PROPER 11 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. SCRUTINY OF THE MATERIAL, IN THE EVENT OF A.O. FAIL ING TO DISCHARGE HIS FUNCTION PROPERTY, THE OBLIGATION TO CONDUCT PROPER ENQUIRY SHIFTS TO COMMISSIONER (APPEALS) AND TRIBUNAL AND THEY CANNOT SIMPLY DELETE ADDITION MADE BY A.O. ON GROUND OF LACK OF E NQUIRY. HE HAS ALSO RELIED UPON THE DELHI HIGH COURT DECISION IN T HE CASE OF CIT VS. EMPIRE BUILDTECH P. LTD., (2014) 366 ITR 310 (D EL.) IN WHICH INVESTORS HAVE NOT SUBMITTED CONFIRMATIONS AND REPO RTED FAR LESS INCOME THAN THE AMOUNTS INVESTED. IT WAS, THEREFORE , HELD THAT ASSESSEE HAS NOT DISCHARGED THE BURDEN. THEREFORE, ADDITION IS JUSTIFIED. HE HAS RELIED UPON THE DECISION OF DELHI HIGH COUR T IN THE CASE OF CIT VS. NAVODYA CASTLES PVT. LTD., (201 4) 367 ITR 306 (DEL.) IN WHICH ASSESSEE WAS UNABLE TO PRODUCE THE DIRECTO RS AND PRINCIPAL OFFICERS OF SIX SHARE HOLDER COMPANIES. T HE MATTER WAS THEREFORE, REMITTED BACK TO THE TRIBUNAL FOR FRESH ADJUDICATION. THIS DECISION OF HONBLE DELHI HIGH COURT IS CONFIRMED B Y THE HONBLE SUPREME COURT REPORTED IN (2015) 56 TAXMAN.COM 18 ( SC). 5.1. THE LD. D.R. SUBMITTED THAT EVEN IF A.O. HAS NOT CALLED FOR THE SHARE APPLICANTS FOR EXAMINATION AS NOTED B Y THE LD. CIT(A) IN THE APPELLATE ORDER AND A.O. DID NOT MAKE PROPER 12 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. ENQUIRY, THEN THE MATTER MAY BE REMANDED BACK TO TH E A.O. FOR RE-CONSIDERATION OF THE ISSUE. 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS. DURING THE COURSE OF HEARING OF THE APPEAL, VIDE ORDER DATED 1 0 TH JULY, 2017, THE LD. D.R. WAS DIRECTED TO VERIFY HOW SHRI ASHEEM GUPTA HAS CONNECTION WITH THE LENDER COMPANY I.E., M/S. MODER ATE CREDIT CORPORATION PVT. LTD. THE LD. D.R. DID FILE REPLY C ONTAINING INFORMATION PROVIDED BY CIT (CENTRAL)-2, NEW DELHI TO THE A.O. ON THE BASIS OF WHICH ASSESSMENT WAS REOPENED SUPPORTE D BY LIST OF BENEFICIARIES WHO HAS GIVEN THE NAME OF ASSESSEE AN D M/S. MODERATE CREDIT CORPORATION PVT. LTD. THE LD. D.R. WAS HOWEVER, NOT ABLE TO PROVIDE ANY EVIDENCE OR MATERIAL TO PRO VE AS TO HOW SHRI ASHEEM GUPTA HAS CONNECTION WITH THE SHARE APP LICANT COMPANY. IT WAS MERE INFORMATION TO SHOW THAT ASSES SEE HAS RECEIVED ACCOMMODATION ENTRY. THE LEARNED COUNSEL F OR THE ASSESSEE HAS POINTED OUT TO THE AUDITED ACCOUNTS OF THE SHARE APPLICANT COMPANY M/S. MODERATE CREDIT CORPORATION PVT. LTD., AT PAGE NO.32 OF THE PAPER BOOK THAT IT HAS INDEPEN DENT 05 DIRECTORS WHO HAVE NO CONNECTION WITH SHRI ASHEEM G UPTA. NO EVIDENCE HAS BEEN BROUGHT ON RECORD AS TO HOW SHRI ASHEEM 13 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. GUPTA FLOATED THE SHARE APPLICANT COMPANY. THEREFOR E, NO CONNECTION OF SHRI ASHEEM GUPTA WITH THE SHARE APPL ICANT COMPANY HAVE BEEN PROVED. IT IS AN ADMITTED FACT TH AT ASSESSEE FILED CONFIRMATION OF THE SHARE APPLICANT COMPANY, THEIR INCOME TAX RETURN, BANK ACCOUNT, REGISTRATION WITH ROC AND REGISTERED WITH RBI AND ALSO EXPLAINED M/S. MODERATE CREDIT CO RPORATION PVT. LTD., LISTED WITH DELHI STOCK EXCHANGE AND HAV E BEEN REGULARLY ASSESSED BY THE INCOME-TAX DEPARTMENT. ON E OF THE ORDER DATED 23 RD DECEMBER, 2008 UNDER SECTION 143(3) HAVE BEEN PLACED ON RECORD. NO CASH WAS FOUND DEPOSITED IN TH E ACCOUNT OF M/S. MODERATE CREDIT CORPORATION PVT. LTD., FOR MAK ING INVESTMENT IN ASSESSEE-COMPANY. THE SHARE CERTIFICA TES HAVE BEEN ACTUALLY ISSUED BY THE ASSESSEE TO THE SHARE A PPLICANT COMPANY. THESE EVIDENCES WERE SUFFICIENT TO PROVE T HE IDENTITY OF THE SHARE APPLICANT COMPANY, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE A.O. DID NOT MA KE ANY INVESTIGATION INTO THE DOCUMENTS FILED BY ASSESSEE. THE A.O. ISSUED LETTER UNDER SECTION 133(6)/131 OF THE I.T. ACT DIRECTLY TO M/S. MODERATE CREDIT CORPORATION PVT. LTD., WHO HAV E FILED THEIR REPLY BEFORE A.O. CONFIRMING THE INVESTMENT MADE IN ASSESSEE- COMPANY THROUGH BANKING CHANNEL, SUPPORTED BY ALL T HE 14 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. DOCUMENTARY EVIDENCES. THE A.O. THEREAFTER, DID NOT MAKE ANY ENQUIRY FROM THE SHARE APPLICANT AND DID NOT DOUBT ITS IDENTITY AND CREDITWORTHINESS. THE A.O. HOWEVER, WITHOUT EXP LAINING ANY REASONS NOTED IN THE ASSESSMENT ORDER THAT GENUINEN ESS OF THE TRANSACTION COULD NOT BE VERIFIED. THE A.O. HAS NOT GIVEN ANY REASON WHY THE GENUINENESS OF THE TRANSACTIONS COUL D NOT BE VERIFIED ON THE BASIS OF THE DOCUMENTS AND MATERIAL PRODUCED ON RECORD. THE A.O. NEVER ASKED THE ASSESSEE TO PRODUC E THE DIRECTOR OR PRINCIPAL OFFICER OF THE SHARE APPLICAN T COMPANY FOR EXAMINATION BEFORE HIM. IT IS NOT CLEAR FROM WHERE LD. CIT(A) HAS NOTED THAT ASSESSEE DID NOT PRODUCE THE DIRECTOR/PR INCIPAL OFFICER OF THE COMPANY BEFORE A.O. IT IS WELL SETTL ED LAW THAT ONUS OF PROVING THE CLAIM IS INITIALLY ON THE ASSESSEE B UT THE BURDEN SHIFTS ON THE A.O. WHEN THE ASSESSEE DISCHARGED ITS PRIMARY ONUS. IN THE PRESENT CASE, THE ASSESSEE HAD FULLY D ISCHARGED ITS PRIMARY ONUS BY SUBMITTING THE RELEVANT AND COGENT EVIDENCES BEFORE A.O. TO ESTABLISH THE GENUINENESS OF THE TRA NSACTION IN THE MATTER. THE A.O. HOWEVER, DID NOT DO SO ANYTHING IN THE MATTER AND HAS NOT POINTED OUT HOW THE CLAIM OF ASSESSEE W AS FACTUALLY INCORRECT. SIMPLY BECAUSE THE SHARE APPLICANT COMPA NY DID NOT HAVE SUFFICIENT INCOME WOULD NOT PROVE THE CASE OF THE A.O. 15 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. BECAUSE THE SHARE APPLICANT COMPANY HAS HUGE WORTH TO MAKE INVESTMENT IN ASSESSEE-COMPANY. THE DECISIONS OF DE LHI HIGH COURT RELIED UPON BY LEARNED COUNSEL FOR THE ASSESS EE SQUARELY APPLY TO THE FACTS OF THE CASE. THE ASSESSEE THUS, PROVED THE IDENTITY OF SHARE APPLICANT, ITS CREDITWORTHINESS A ND GENUINENESS OF THE TRANSACTION IN THE MATTER. THE DECISIONS REL IED UPON BY LD. D.R. WOULD NOT SUPPORT THE CASE OF THE REVENUE, SIN CE SUFFICIENT MATERIAL IS AVAILABLE ON RECORD TO PROVE THE GENUIN ENESS OF THE TRANSACTIONS AS THE SHARE APPLICANT HAS ALSO CONFIR MED THE GENUINENESS OF THE TRANSACTIONS TO THE A.O. DIRECTL Y UNDER SECTION 133(6)/131 REPLY. THEREFORE, THERE IS NO NEED TO RE MAND THE MATTER BACK TO THE FILE OF A.O. AS IS ARGUED BY THE LD. D.R. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE, I AM OF THE VIEW THAT ADDITION OF RS.6 LAKHS UNDER SECTION 68 OF THE I.T. ACT, IS WHOLLY UNJUSTIFIED. I, ACCOR DINGLY, SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND DELETE THE A DDITION OF RS.6 LAKHS. 7. LEARNED COUNSEL FOR THE ASSESSEE ALSO CHALLENGE D THE REOPENING OF THE ASSESSMENT AND REFERRED TO REASONS RECORDED BY A.O. UNDER SECTION 147 OF THE ACT AND ALSO CITED SE VERAL 16 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. DECISIONS. SINCE THE ONLY ADDITION MADE BY A.O. IN THE RE- ASSESSMENT ORDER OF RS.6 LAKHS HAVE BEEN DELETED, T HEREFORE, THIS ISSUE LEFT WITH ACADEMIC DISCUSSION ONLY AND NO FUR THER ADJUDICATION IS REQUIRED. IN VIEW OF THE ABOVE, APP EAL OF ASSESSEE IS ALLOWED. ITA.NO.6011/DEL./2016 A.Y. 2006-2007 : 8. IN THIS APPEAL, ASSESSEE CHALLENGED THE REOPENI NG OF THE ASSESSMENT UNDER SECTION 147 AND ADDITION OF RS .7 LAKHS UNDER SECTION 68 OF THE I.T. ACT. LEARNED REPRESENT ATIVES OF BOTH THE PARTIES SUBMITTED THAT THE ISSUE IS SAME AS HAV E BEEN CONSIDERED IN A.Y. 2005-2006. FOLLOWING THE REASONS FOR DECISION FOR A.Y. 2005-2006, I SET ASIDE THE ORDER OF THE AU THORITIES BELOW AND DELETE THE ADDITION OF RS.7 LAKHS MADE UNDER SE CTION 68 OF THE I.T. ACT. THERE IS NO NEED TO DECIDE THE ISSUE OF REOPENING OF THE ASSESSMENT AS IT IS MERELY ACADEMIC IN NATURE. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 17 ITA.NOS.6010 & 6011/DEL./2016 M/S. VEE ESS SALES P. LTD., NEW DELHI. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED 29 TH AUGUST, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH 6. GUARD FILE // BY ORDER // ASST. REGISTRAR ITAT : DELHI BENCHES : DELHI.