Income Tax Officer-4(1), Agra V. M/s AVM Cycle Manufacturers Pvt. Ltd., Agra

ITA 618/LKW/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100481 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 10-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJEET KUMAR SINGH
• Keywords: Unexplained cash credit; Bogus Share capital; Share purchase agreement; Question of law; Non compliance; Assessment record; Onus to prove
• Section: 153A; 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.618/LKW/2015 ASSESSMENT YEAR:2011-12 INCOME TAX OFFICER-4(1) AGRA V. M/S AVM CYCLE MANUFACTURERS PVT. LTD 48/6, B-3, PUNEET VRIDAVAN BUILDING SANJAY PLACE, AGRA TAN/PAN:AAECA0995M (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AJEET KUMAR SINGH, CIT (DR) RESPONDENT BY: SHRI. RAKESH GARG, ADVOCATE DATE OF HEARING: 29 10 2015 DATE OF PRONOUNCEMENT: 11 12 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,14,00,000/- MADE UNDER SECTION 68 INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') WITHOUT PROPERLY APPRECIATING THE FACTS ESPECIALLY THAT THE ASSESSEE FAILED TO DISCHARGE ITS ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION OF RECEIPT OF SHARE APPLICATION MONEY AT HUGE PREMIUM, IDENTITY & CREDITWORTHINESS OF THE SHARE APPLICANT COMPANIES WHICH ARE IN FACT NON- EXISTENT PAPER COMPANIES. 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE-COMPANY HAS RECEIVED A SUM OF RS.4.14 CRORES AS SHARE APPLICATION MONEY FROM TWO COMPANIES VIZ. SPIDERMAN FLORICULTURE PVT. :- 2 -: LTD. AND VOLGA CRESEC PVT. LTD. THE DETAILS OF SHARE APPLICATION MONEY RECEIVED ARE AS UNDER:- 1. SPIDERMAN FLORICULTURE PVT. LTD. - RS.1.89 CRORES 2. VOLGA CRESEC PVT. LTD. - RS.2.25 CRORES 3. IN ORDER TO DISCHARGES ITS ONUS OF PROVING THE SHARE APPLICATION MONEY TO BE GENUINE, THE ASSESSEE HAS SUBMITTED VARIOUS DOCUMENTS BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ALSO ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO THE INVESTORS/SHARE APPLICANTS, WHICH WERE DULY SERVED UPON THEM AND THE INVESTORS HAVE ALSO RESPONDED BY PUTTING THEIR PERSONAL APPEARANCE. THE ASSESSING OFFICER, THEREAFTER, ISSUED A COMMISSION UNDER SECTION 131(1)(D) OF THE ACT TO THE ADDL. DIT(INV.), DELHI WHO AFTER ISSUING SUMMONS TO BOTH THE INVESTOR COMPANIES SENT A REPORT. RELYING UPON THE REPORT OF THE ADDL. DIT(INV.), DELHI, THE ASSESSING OFFICER HAS OBSERVED THAT THE AMOUNT COMING INTO THE BANK ACCOUNT IS ROUTED THE VERY NEXT DAY AND THE ASSESSEE HAS CIRCULATED ITS OWN INCOME BY UNDISCLOSED SOURCES THROUGH THESE COMPANIES. HAVING TREATED THIS SHARE APPLICATION MONEY TO BE BOGUS, THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.4.14 CRORES TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FURNISHED PANS OF THE SHARE APPLICANTS, WHO ARE REGULARLY ASSESSED TO TAX AND THEIR FINANCIAL STATEMENTS FROM THE REGISTRAR OF COMPANIES. THE ENTIRE SHARE APPLICATION MONEY HAS BEEN RECEIVED THROUGH NORMAL BANKING CHANNELS. BESIDES, THE ASSESSEE HAS FILED CONFIRMATION FROM THE SHARE APPLICANTS DULY CONFIRMING THE SHARE APPLICATION MONEY; SHARE APPLICATION FORMS SUBMITTED BY SHARE :- 3 -: APPLICANTS; CERTIFICATE OF INCORPORATION OF SHARE APPLICANTS; RECEIPTS OF SHARE CERTIFICATE DULY INDICATING THE CERTIFICATE NO. & DISTINCTIVE NOS. OF SHARES ALLOTTED IN THE CASE OF ALLOTMENT OF SHARES; AUDITED FINANCIAL STATEMENTS I. E. PROFIT & LOSS A/C AND BALANCE SHEET OF THE COMPANY DULY EVIDENCING THE INVESTMENT MADE IN THE ASSESSEE COMPANY & ALSO ITS CREDIT WORTHINESS; BANK STATEMENTS OF SHARE APPLICANTS; AFFIDAVITS FROM DIRECTOR OF SHARE APPLICANT COMPANIES REGARDING INVESTMENT IN SHARES OF ASSESSEE-COMPANY. IT WAS FURTHER CONTENDED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ALSO CALLED FOR INFORMATION UNDER SECTION 133(6) OF THE ACT FROM THE RESPECTIVE SHARE APPLICANTS BY SENDING THEM NOTICES BY REGISTERED POST. THE NOTICES WERE DULY RECEIVED BY THE SHARE APPLICANTS AND WERE DULY RESPONDED BY THEM CONFIRMING THEIR INVESTMENT OF SUCH SHARE APPLICATION MONEY. ALL THE EVIDENCE WERE ALSO PLACED BEFORE THE LD. CIT(A) AND BEING CONVINCED WITH THE EXPLANATIONS FURNISHED BY THE ASSESSEE, THE LD. CIT(A) HAS DELETED THE ADDITION. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- 5. I HAVE CAREFULLY CONSIDERED THE MATTER AND EXAMINED THE ASSESSMENT RECORDS, SUBMISSIONS OF THE APPELLANT AND REMAND REPORT. 5.1 REGARDING THE SHARE APPLICATION MONEY OF RS.1,89,00,000 RECEIVED FROM SPIDERMAN FLORICULTURE PVT. LTD. IT IS NOTED THAT THE INVESTOR COMPANY IS A BODY CORPORATE REGISTERED WITH THE REGISTRAR OF COMPANIES AND IS AN INCOME-TAX ASSESSEE. IT IS REGULARLY FILING ITS RETURN WITH THE INCOME TAX DEPARTMENT AS WELL AS WITH THE REGISTRAR OF COMPANIES. THE SHARE APPLICATION MONEY HAS BEEN RECEIVED THROUGH BANKING CHANNEL. THE APPELLANT HAS FILED A NO. OF DOCUMENTS BEFORE THE AO SUCH AS SHARE APPLICATION FORMS SUBMITTED BY THE SHARE APPLICANT, CERTIFICATE OF :- 4 -: INCORPORATION OF THE SHARE APPLICANT, AUDITED FINANCIAL STATEMENTS OF THE SHARE APPLICANT, BANK STATEMENT OF THE SHARE APPLICANT, AFFIDAVIT OF THE DIRECTOR OF THE SHARE APPLICANT COMPANY, CONFIRMATION FROM THE SHARE APPLICANT, COPY OF ACCOUNT, INCOME TAX RETURNS ETC. 5.1.1 IT IS ALSO NOTED THAT THE DIRECTORS OF THE INVESTOR COMPANY ARE SHRI KAMAL KUMAR KESHWANI & SHRI MAHENDRA KUMAR KESHWANI WHO ARE THE DIRECTORS OF THE APPELLANT COMPANY AS WELL. THE REGISTERED OFFICE OF THE INVESTOR COMPANY IS SITUATED AT 195, PATPARGANJ INDUSTRIAL AREA, NEW DELHI WHICH IS OWNED BY ONE OF THE DIRECTORS, SHRI MAHENDRA KUMAR KESHWANI. THE CORPORATE OFFICE OF THE INVESTOR COMPANY IS SITUATED AT 48/6, B-3, PUNEET VRINDAVAN BUILDING, SANJAY PLACE, AGRA. THE SAID ADDRESS AT AGRA IS ALSO THE PLACE WHERE THE REGISTERED OFFICE OF THE APPELLANT COMPANY HAS BEEN SHIFTED FROM LUCKNOW. 5.1.2 THE INVESTMENT OF RS.1,89,00,000 MADE BY THE INVESTOR COMPANY IS DULY SHOWN IN THE BALANCE SHEET OF THE INVESTOR COMPANY AS SHARE APPLICATION MONEY PAID TO THE APPELLANT COMPANY IN SCHEDULE-C OF THE BALANCE SHEET. FURTHER ON PERUSAL OF SCHEDULE-C OF THE BALANCE SHEET OF THE INVESTOR COMPANY IT IS EVIDENT THAT THE INVESTOR COMPANY WAS HOLDING SHARES WORTH RS.9,78,00,000 AS INVESTMENT ON 31.03.2010. OUT OF SUCH INVESTMENT OF RS.9,78,00,000 SHARES AMOUNTING TO RS.3,09,00,000 HAS BEEN SOLD BY THE INVESTOR COMPANY, OUT OF WHICH A SUM OF RS.1,89,00,000 HAVE BEEN GIVEN AS SHARE APPLICATION MONEY TO THE APPELLANT COMPANY. THESE SHARES HAVE BEEN SOLD TO VARIOUS PERSONS AND THE SALE PROCEEDS HAVE BEEN REALISED BY BANKING CHANNELS IN THE BANK ACCOUNTS OF THE INVESTOR COMPANY. THE COMPLETE DETAILS OF CREDIT ENTRIES APPEARING IN THE BANK ACCOUNT OF :- 5 -: THE INVESTOR COMPANY ON ACCOUNT OF SALE PROCEEDS OF SHARES WAS FILED BY THE INVESTOR COMPANY BEFORE THE DDIT (INV.), NEW DELHI WHICH IS PART OF THE ASSESSMENT RECORD. 5.1.3 IT IS SEEN THAT THE AO HAS ISSUED NOTICES U/S 133(6) TO THE INVESTOR COMPANY AT THE ADDRESSES OF ITS REGISTERED OFFICE AT NEW DELHI AND ITS CORPORATE OFFICE AT AGRA. WHILE THE NOTICE SENT TO AGRA OFFICE WAS DULY DELIVERED, THE NOTICE SENT TO DELHI WAS RETURNED BACK UNSERVED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS EXPLAINED THAT THE PREMISES OF REGISTERED OFFICE AT DELHI BELONGS TO ONE OF THE DIRECTORS OF THE INVESTOR COMPANY AND IT IS DUE TO SOME MISTAKE THAT THIS NOTICE HAS RETURNED BACK UNSERVED. THE APPELLANT ALSO FILED THE COPY OF THE PURCHASE DEED OF THE SAID PREMISES, I FIND THAT THE PROPERTY WAS PURCHASED BY SHRI MAHENDRA KUMAR KESHWANI WHO IS A DIRECTOR OF BOTH THE APPELLANT AS WELL AS THE INVESTOR COMPANY. THE INVESTOR COMPANY HAS DULY FURNISHED THE INFORMATION CALLED FOR U/S 133(6) OF THE ACT AND THE PAYMENT OF SHARE APPLICATION MONEY WAS DULY CONFIRMED BY IT. 5.1.4 IT IS ALSO SEEN THAT THE APPELLANT COMPANY, ON 24.03.2014 HAS PRODUCED SHRI KAMAL KUMAR KESHWANI, DIRECTOR OF THE INVESTOR COMPANY BEFORE THE AO. BOOKS OF ACCOUNT OF THE INVESTOR COMPANY WERE ALSO PRODUCED. THE AO NOT ONLY VERIFIED THE BOOKS OF ACCOUNT BUT ALSO ORALLY EXAMINED THE DIRECTOR. THE ATTENDANCE OF THE DIRECTOR IS DULY RECORDED ON THE ORDER SHEET AND THERE IS NO QUERY OR DISSATISFACTION RECORDED BY THE AO WITH REGARD TO THE INVESTMENT MADE BY THE INVESTOR COMPANY. THE APPELLANT COMPANY HAS FILED THE AFFIDAVIT OF THE DIRECTOR OF THE INVESTOR COMPANY CONFIRMING THE INVESTMENT MADE WHICH WAS IGNORED BY THE AO. :- 6 -: 5.1.5 IT IS NOTED THAT AFTER THE HEARING WAS CLOSED ON 24.03.2014 THE AO ON 28.03.2014 RECEIVED THE REPORT OF THE DDIT (INV.), NEW DELHI. THE REPORT WAS NEVER CONFRONTED BY THE AO TO THE APPELLANT. FROM THE REPORT OF DDIT (INV.), WHICH IS REPRODUCED IN THE ASSESSMENT ORDER IT EMERGES THAT THE SUMMONS DATED 18.03.2014 WERE DULY SERVED AT THE REGISTERED OFFICE OF THE COMPANY AT DELHI. THE AR OF THE INVESTOR COMPANY HAS FILED A NUMBER OF DETAILS WHICH ARE LISTED IN THE REPORT. AS DISCUSSED EARLIER THE BANK ACCOUNT OF THE COMPANY ALONG WITH THE BALANCE SHEET OF THE COMPANY CLEARLY DEPICTS THE SOURCES OF INVESTMENTS MADE BY THE INVESTOR COMPANY. THE ADDRESS OF THE COMPANY IS GENUINE. IT WAS ALSO EXPLAINED BY LD. AR THAT THE BUSINESS OF THE INVESTOR COMPANY IS MAKING INVESTMENT HENCE THERE IS NO DAY TO DAY BUSINESS ACTIVITY AT THE REGISTERED OFFICE OF THE COMPANY. THE INVESTOR COMPANY HAS ALSO FILED ITS PROFIT AND LOSS ACCOUNT & BALANCE SHEET FOR FY 2012-13 FROM WHICH IT WAS OBSERVED THAT THE SHARE APPLICATION MONEY HAS BEEN REFUNDED BACK BY THE APPELLANT TO THE INVESTOR COMPANY. FURTHER THE CONCLUSION OF THE DDIT(INV.) THAT THE AMOUNT CREDITED IN THE BANK ACCOUNT WAS ROUTED AS SHARE INVESTMENT THE NEXT DAY TO GIVE IT A LEGAL CHARACTER IS NOT JUSTIFIED AS THE INFERENCE DRAWN IS NOT BASED ON ANY MATERIAL EVIDENCE. 5.2 REGARDING SHARE APPLICATION MONEY OF RS.2,25,00,000 RECEIVED FROM VOLGA CRESEC PVT. LTD. IT IS NOTED THAT THE INVESTOR COMPANY IS A BODY CORPORATE REGISTERED WITH THE REGISTRAR OF COMPANIES AND IS AN INCOME-TAX ASSESSEE. IT IS FILING ITS RETURN WITH THE INCOME-TAX DEPARTMENT AS WELL AS WITH THE REGISTRAR OF COMPANIES. THE SHARE APPLICATION MONEY HAS BEEN RECEIVED THROUGH BANKING CHANNEL. THE APPELLANT HAS FILED A NUMBER OF DOCUMENTS BEFORE THE AO SUCH AS SHARE APPLICATION FORMS :- 7 -: SUBMITTED BY THE SHARE APPLICANT, CERTIFICATE OF INCORPORATION OF THE SHARE APPLICANT, AUDITED FINANCIAL STATEMENTS, BANK STATEMENTS OF THE SHARE APPLICANT, AFFIDAVIT FROM THE DIRECTOR OF THE SHARE APPLICANT COMPANY, CONFIRMATION FROM THE SHARE APPLICANT, COPY OF ACCOUNT, INCOME TAX RETURNS ETC. THE SHARES OF THE APPELLANT COMPANY WERE DULY ALLOTTED TO THE INVESTOR COMPANY AND THE INVESTOR COMPANY HAS CONFIRMED RECEIPT OF SUCH SHARES AND DETAILS OF LEDGER FOLIO NO., DISTINCTIVE NO. OF SHARES AND THE CERTIFICATE NO. WERE ALSO FURNISHED. 5.2.1 ON PERUSAL OF THE BALANCE SHEET OF THE INVESTOR COMPANY IT IS EVIDENT THAT THE INVESTOR COMPANY HAS INCREASED ITS SHARE CAPITAL BY ALLOTTING FRESH SHARES DURING THE FY 2010-11. AS ON 31.03.2010 THE PAID UP CAPITAL OF THE INVESTOR COMPANY WAS RS.48,21,000 AND THE SHARE PREMIUM WAS RS.6,55,29,000 TOTALING TO RS. 7,03,50,000. DUE TO ALLOTMENT OF FRESH SHARES DURING THE FY 2010-11 THE PAID UP CAPITAL OF THE INVESTOR COMPANY HAS INCREASED TO RS.50,57,500 AND THE SHARE PREMIUM HAS INCREASED TO RS.30,17,92,500 WHICH TOTALS TO RS.30,68,50,000. THE INVESTOR COMPANY HAS GENERATED FUNDS AMOUNTING TO RS.23,65,00,000 BY ISSUING FRESH SHARE CAPITAL DURING THE YEAR. DURING THE YEAR UNDER CONSIDERATION THE INVESTOR COMPANY HAS MADE FRESH INVESTMENTS WHICH ARE SHOWN IN SCHEDULE-D OF ITS BALANCE SHEET. THE INVESTMENT OF RS.2,25,00,000 MADE BY THE INVESTOR COMPANY IN 50,000 SHARES OF THE APPELLANT COMPANY IS DULY REFLECTED IN THE SAID SCHEDULE- D. 5.2.2 FROM THE EXAMINATION OF THE ASSESSMENT RECORDS IT WAS OBSERVED THAT THE AO HAS ISSUED NOTICES U/S 133(6) TO THE INVESTOR COMPANY AT ITS ADDRESS OF REGISTERED OFFICE AT NEW DELHI. THE NOTICE HAS BEEN DULY SERVED AND THE INFORMATION CALLED FOR U/S :- 8 -: 133(6) WAS FURNISHED AND THE PAYMENT OF SHARE APPLICATION MONEY WAS CONFIRMED BY THE INVESTOR COMPANY. 5.2.3 THE APPELLANT COMPANY, ON 24.03.2014 PRODUCED SHRI A.K. SINGH, DIRECTOR OF THE INVESTOR COMPANY BEFORE THE AO. BOOKS OF ACCOUNT WERE ALSO PRODUCED/THE AO WAS REQUESTED TO EXAMINE THE DIRECTOR AND TO VERIFY THE BOOKS OF ACCOUNTS OF THE INVESTOR COMPANY. THE AO NOT ONLY VERIFIED THE BOOKS OF ACCOUNT BUT ALSO ORALLY EXAMINED THE DIRECTOR. THE ATTENDANCE OF THE DIRECTOR IS RECORDED ON THE ORDER SHEET BUT THERE IS NO QUERY OR DISSATISFACTION RECORDED BY THE AO WITH REGARD TO THE INVESTMENT MADE BY THE INVESTOR COMPANY. FURTHER, THE APPELLANT COMPANY HAS FILED AFFIDAVIT OF THE DIRECTOR OF THE INVESTOR COMPANY CONFIRMING THE INVESTMENT MADE WHICH WAS IGNORED BY THE AO. 5.2.4 IT IS NOTED THAT AFTER THE HEARING WAS CLOSED ON 24.03.2014 THE AO ON 28.03.2014 RECEIVED THE REPORT OF THE DDIT (INV.), NEW DELHI. THE REPORT WAS NEVER CONFRONTED BY THE AO TO THE APPELLANT. FROM THE REPORT OF THE DDIT (INV.), WHICH IS REPRODUCED IN THE ASSESSMENT ORDER IT EMERGES THAT THE SUMMONS DATED 18.03.2014 SERVED AT THE REGISTERED OFFICE OF THE INVESTOR COMPANY AT DELHI. HENCE THE ADDRESS OF THE COMPANY IS GENUINE. IT WAS ALSO EXPLAINED BY LD. AR THAT SINCE THE BUSINESS OF THE INVESTOR COMPANY IS THAT OF INVESTMENT THERE IS NO DAY TO DAY BUSINESS ACTIVITY AT THE REGISTERED OFFICE OF THE COMPANY. IN MY CONSIDERED OPINION NON COMPLIANCE ON PART OF THE INVESTOR COMPANY BEFORE THE DDIT (INV.) CANNOT BE A GROUND FOR ASSUMING THAT THE INVESTOR COMPANY WAS A PAPER COMPANY. THE CONCLUSION OF THE DDIT (INV.) THAT THE AMOUNT CREDITED IN THE BANK ACCOUNT WAS ROUTED AS SHARE INVESTMENT THE NEXT DAY TO GIVE IT A LEGAL CHARACTER IS NOT JUSTIFIED AS THE INFERENCE DRAWN IS NOT BASED ON :- 9 -: ANY MATERIAL EVIDENCE. I ALSO FIND THAT THE INVESTOR COMPANY HAS DULY COMPLIED IN RESPONSE TO NOTICE U/S 133(6) OF THE ACT ISSUED BY THE AO. THE DIRECTOR OF THE INVESTOR COMPANY, SHRI A.K. SINGH ATTENDED BEFORE THE AO AND WAS ORALLY EXAMINED. FURTHER THE BOOKS OF ACCOUNT OF THE INVESTOR COMPANY WERE DULY PRODUCED BEFORE THE AO. THE AO HAD FULL OPPORTUNITY TO EXAMINE THE DIRECTOR OF THE INVESTOR COMPANY AS WELL AS ITS BOOKS OF ACCOUNT. 5.3 AFTER CONSIDERING THE FACTS OF THE CASE, ASSESSMENT RECORDS, THE SUBMISSIONS FILED, REMAND REPORT AND THE LEGAL POSITION I FIND THAT THE APPELLANT HAS FULLY DISCHARGED THE ONUS OF PROVING RECEIPT OF SHARE APPLICATION MONEY. IN THE PRESENT CASE, THE IDENTITY OF THE INVESTOR COMPANIES HAS BEEN PROVED BEYOND DOUBT. ALTHOUGH CONSIDERING THE JUDGMENT OF HON'BLE APEX COURT IN LOVELY EXPORTS (P) LTD. (2008) 216 CTR (SC) 195 AND OTHER JUDGMENTS OF HON'BLE ALLAHABAD HIGH, THERE IS NO REQUIREMENT ON THE PART OF THE APPELLANT COMPANY TO PROVE ANYTHING FURTHER, YET IN THE PRESENT CASE THE APPELLANT COMPANY HAS ALSO PROVED GENUINENESS OF THE TRANSACTION. IN THE CASE OF SPIDERMAN FLORICULTURE SHARE APPLICATION MONEY WAS SUBSEQUENTLY RETURNED BY THE APPELLANT COMPANY AND IN THE CASE OF VOLGA CRESEC SHARES WERE ALLOTTED AND SUCH ALLOTMENT WAS ACKNOWLEDGED BY IT WITH COMPLETE DETAILS. THE CREDITWORTHINESS OF THE INVESTOR COMPANIES HAS ALSO BEEN PROVED BY FILING THE AUDITED BALANCE SHEETS OF THE INVESTOR COMPANIES WHICH SHOW THAT THE INVESTOR COMPANIES HAVE SUFFICIENT SOURCES TO MAKE SUCH INVESTMENT AND THE INVESTMENT MADE BY THEM IS APPEARING IN THE SCHEDULES TO THE BALANCE SHEETS. NOTICES U/S 133(6) ISSUED BY THE AO WERE DULY SERVED AND COMPLIED WITH BY THE INVESTOR COMPANIES. SUMMONS U/S 131 ISSUED BY DDIT (INV.) WERE DULY SERVED AT THE ADDRESS GIVEN BY THE INVESTOR COMPANIES. :- 10 -: NOT ONLY ALL THE DOCUMENTS TO DISCHARGE THE ONUS WERE FURNISHED BUT EVEN THE BOOKS OF ACCOUNT OF THE INVESTOR COMPANIES AND THE DIRECTORS OF THE INVESTOR COMPANIES WERE PRODUCED BEFORE THE AO FOR EXAMINATION AND VERIFICATION. THE EVIDENCES FILED AND THE WITNESSES PRODUCED HAVE NOT BEEN CONTROVERTED BY THE AO. THE AO HAS ALSO FAILED TO BRING ANY MATERIAL ON RECORD TO DISPROVE THE IDENTITY AND CAPACITY OF THE INVESTOR COMPANIES AND GENUINENESS OF THE TRANSACTIONS WITH THEM. EVEN THE REPORT OF THE DDIT (INV.), WHICH WAS NOT CONFRONTED TO THE APPELLANT, HAS NOT BOUGHT ANY ADVERSE MATERIAL TO SUBSTANTIATE THE ADDITION MADE BY THE AO. UNDER THE CIRCUMSTANCES IT IS HELD THAT THE APPELLANT HAS DISCHARGED THE ONUS OF ESTABLISHING THE IDENTITY AND CAPACITY OF THE INVESTOR COMPANIES, THEIR CREDIT WORTHINESS AND GENUINENESS OF SHARE APPLICATION MONEY INVESTED BY THEM IN THE APPELLANT COMPANY. RELIANCE IS PLACED ON THE FOLLOWING JUDGMENTS: A. CIT V. JAYDEEP SECURITIES AND FINANCE LTD. [2013] 350 ITR 220(A1I.) UNEXPLAINED INCOME- SHARE APPLICATION MONEY - ASSESSEE PRODUCING RETURNS FILED BY RELEVANT APPLICANT SHAREHOLDERS AND ALSO PRODUCING CONFIRMATION OF SHAREHOLDERS - BURDEN OF PROVING SOURCE OF SHARE APPLICATION MONEY DISCHARGED - ADDITIONS TO BE DELETED. B. CIT V. MISRA PRESERVERS (P.) LTD. [2013] 350 ITR 222 (ALL.) UNEXPLAINED INCOME-SHARE APPLICATION MONEY - ASSESSEE PRODUCING RELEVANT EVIDENCE AND ESTABLISHING THAT ALL SHARE APPLICANTS NOT FICTITIOUS PERSONS - ADDITION RIGHTLY DELETED. C. CIT V. KAMNA MEDICAL CENTRE (P.) LTD. [2013] 35 TAXMANN.COM 470 (ALL.) :- 11 -: SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT [SHARE APPLICATION MONEY] - ASSESSMENT YEAR 2005-06 - DURING YEAR ASSESSEE-COMPANY RECEIVED FROM SHAREHOLDERS CERTAIN AMOUNT ON ACCOUNT OF SHARE APPLICATION MONEY - ASSESSING OFFICER ADDED SAID AMOUNT TO INCOME OF ASSESSEE ON GROUND THAT IT HAD FAILED TO PROVE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF SHAREHOLDERS - COMMISSIONER (APPEALS) RELYING UPON DECISION OF SUPREME COURT RENDERED IN CASE OF CIT V. STELLER INVESTMENT LTD. [2001] 115 TAXMAN 99 DELETED IMPUGNED ADDITION MADE BY ASSESSING OFFICER - HE HELD THAT IN CASE OF CAPITAL CONTRIBUTED BY A SHAREHOLDER, IDENTITY OF SHAREHOLDER WAS ONLY REQUIRED TO BE PROVED - TRIBUNAL UPHELD ORDER OF COMMISSIONER (APPEALS) - WHETHER INSTANT CASE WAS SQUARELY COVERED BY DECISION OF .SUPREME COURT IN CASE OF STELLER INVESTMENT LTD. (SUPRA) - HELD, YES [PARA 3] D. CIT V. SOM TOBACCO INDIA LTD. [2014] 42 TAXMANN.COM 310 (AIL.) SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDITS [SHARE APPLICATION MONEY] -ASSESSMENT YEAR 2005-06 - IN COURSE OF ASSESSMENT, ASSESSING OFFICER MADE ADDITION TO ASSESSEE'S INCOME IN RESPECT OF SHARE APPLICATION MONEY RECEIVED FROM VARIOUS PERSONS TRIBUNAL FIND THAT NAMES, ADDRESSES AND PAN OF DEPOSITORS WERE PROVIDED TO ASSESSING OFFICER, WHICH WERE SUFFICIENT TO PROVE THEIR IDENTITY AND CREDITWORTHINESS, SET ASIDE IMPUGNED ADDITION - WHETHER, ON FACTS, IMPUGNED ORDER PASSED BY TRIBUNAL DID NOT REQUIRE ANY INTERFERENCE - HELD, YES [PARA 9] E. CIT V. VACMET PACKAGING INDIA PRIVATE LIMITED [2014] 367 ITR 217 (ALL.) :- 12 -: THE ASSESSING OFFICER, IN THE COURSE OF AN ORDER OF ASSESSMENT UNDER SECTION 153A OF THE INCOME TAX ACT, 1961, MADE AN ADDITION UNDER SECTION 68 AN AMOUNT OF RS.8.50 CRORES WHICH WAS RECEIVED BY THE ASSESSEE AS SHARE APPLICATION MONEY FROM A COMPANY. THE COMMISSIONER (APPEAL) DELETED THE ADDITION WHICH WAS PRIMARILY BASED ON A BLACK DIARY IMPOUNDED DURING THE COURSE OF AN INCOME-TAX SURVEY. THIS WAS CONFIRMED BY THE TRIBUNAL THE TRIBUNAL OBSERVED THAT THE ASSESSEE HAD FILED DOCUMENTARY EVIDENCE IN ORDER TO PROVE THE GENUINENESS OF THE SHARE APPLICATION MONEY CONSISTING OF; (I) SHARE APPLICATION FORMS; (II) COPIES OF BANK ACCOUNTS OF THE SHARE APPLICANTS; (IN) COPIES OF THE INCOME TAX RETURNS OF THE SHARE ALLOTTEES; (IV) BALANCE SHEETS AND; (V) COPIES OF SHARE ALLOTMENT CERTIFICATES AND OF THE BOARD'S RESOLUTION OF THE SHARE APPLICANTS. THE IDENTITY OF THE APPLICANTS WAS HELD TO BE ESTABLISHED BY THE PRODUCTION OF COPIES OF THEIR PAN CARDS AND CERTIFICATES OF REGISTRATION WITH THE REGISTRAR OF COMPANIES. THEIR FINANCIAL CAPACITY WAS HELD TO BE PROVED BY THE FILING OF COPIES OF THE BANK ACCOUNTS FROM WHERE THE SHARE APPLICATION MONEY WAS TRANSFERRED THROUGH BANKING CHANNELS TO THE ASSESSEE. FINALLY, IT WAS HELD THAT THE GENUINENESS OF THE TRANSACTION HAD BEEN ESTABLISHED BY FILING THE DOCUMENTS AND IN VIEW OF THE CONFIRMATION BY BOTH THE COMPANIES OF RESPECTIVE TRANSACTIONS. THE BLACK DIARY CONTAINED ENTRIES BETWEEN FEBRUARY AND MARCH, 2005, WHICH WERE RELEVANT TO THE ASSESSMENT YEAR 2005-06 AND NOT FAR THE ASSESSMENT YEAR 2007-08 WHICH WAS UNDER CONSIDERATION. ON APPEAL TO THE HIGH COURT: HELD, DISMISSING THE APPEAL THAT THE ASSESSEE HAD DISCHARGED THE ONUS OF ESTABLISHING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS WHICH HAD FORMED THE BASIS OF :- 13 -: THE ADDITION THAT WAS MADE UNDER SECTION 68. ULTIMATELY, WHETHER THE DOCUMENTARY MATERIALS WHICH HAD BEEN PRODUCED BY THE ASSESSEE WERE SUFFICIENT TO DISPLACE THE ONUS IS A MATTER TO BE DECIDED UPON THE FACTS OF EACH CASE. BOTH THE COMMISSIONER (APPEAL) AND THE TRIBUNAL HAVING HELD THAT THE ASSESSEE HAD FULLY DISCHARGED THE ONUS, NO SUBSTANTIAL QUESTION OF LAW AROSE. F. HON'BLE ITAT AGRA BENCH IN THE CASE OF M/S. JAI HOSPITALS & RESEARCH CENTRE (P.) LTD., AGRA (ITA NO. 160/A/2004) HAS HELD 'THUS IT BECOMES EVIDENTLY CLEAR THAT IF THE COMPANY ESTABLISHES THE IDENTITY OF SHARE APPLICANTS AND THAT THEY HAVE INVESTED IN SHARES, NO SUCH MONEY CAN BE ADDED IN COMPANY'S HAND U/S 68 AS ITS UNDISCLOSED INCOME. IN THE GIVEN CASE THE ASSESSEE COMPANY HAS ESTABLISHED THE IDENTITY AND THE INVESTMENT BY THEM IN SHARES. IN VIEW OF THE ABOVE SETTLED LEGAL POSITION, THERE IS MERITS IN THE SUBMISSION OF THE LD. A.R. THAT SINCE ALL THE SHARE HOLDERS HAVE BEEN IDENTIFIED ON RECORD BY THE ASSESSEE COMPANY, NO ADDITION ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL CAN BE MADE IN THE HANDS OF THE ASSESSEE COMPANY' G. CIT V. MIQ STEELS (P.) LTD. [2013] 36 TAXMANN.COM 422 (ALL.) H. CIT V. AL ANAM AGRO FOODS (P.) LTD. [2013] 38 TAXMANN.COM 375 (ALL.) I. CIT (CENTRAL) .V. L.D.K. SHARES AND SECURITIES P. LTD. AND ORS, 71 DTK 371 (ALL.) IN VIEW OF THE ABOVE DISCUSSIONS ADDITION OF RS.4,14,00,000 MADE BY THE AO IS DELETED. GROUND NOS. 4 TO 8 OF THE APPEAL ARE ALLOWED IN FAVOUR OF THE APPELLANT. :- 14 -: 5. BEING NOT SATISFIED WITH THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND DURING THE COURSE OF HEARING, THE LD. D.R. HAS PLACED RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER. BESIDES, IT WAS ALSO CONTENDED THAT THE ENTIRE TRANSACTIONS ARE BOGUS TRANSACTIONS, AS IT IS THE MANAGED AFFAIRS OF THE ASSESSEE TO INTRODUCE ITS OWN FUNDS IN THE FORM OF SHARE APPLICATION MONEY IN THE NAME OF ITS OWN SISTER CONCERNS. 6. IN OPUGNATION, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE ENTIRE TRANSACTIONS ARE ROUTED THROUGH BANKING CHANNELS. BEFORE THE LOWER AUTHORITIES ALSO, THE ASSESSEE HAS FILED ALL THE RELEVANT EVIDENCE IN ORDER TO PROVE THE GENUINENESS OF THE TRANSACTIONS, CREDITWORTHINESS AND IDENTITY OF THE CREDITORS. ALL THESE DOCUMENTS WERE PROPERLY EXAMINED BY THE LD. CIT(A) WHILE ADJUDICATING THE ISSUE IN FAVOUR OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT ALL THE RELEVANT EVIDENCE FILED BEFORE THE LOWER AUTHORITIES ARE ALSO BEING FILED BEFORE THE TRIBUNAL IN THE FORM OF PAPER BOOK. THE ASSESSING OFFICER HAS MADE DISALLOWANCE ON THE BASIS OF CONJECTURES AND SURMISES WITHOUT ESTABLISHING THE TRANSACTION OF RECEIPT OF SHARE APPLICATION MONEY TO BE BOGUS. SINCE THE LD. CIT(A) HAS ADJUDICATED THE ISSUE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS, NO INTERFERENCE THEREIN IS CALLED FOR. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS, COPIES OF WHICH ARE PLACED ON RECORD:- 1 INCOME TAX OFFICER & ORS. VS. FIRM MADAN MOHAN DAMMA MAL & ANR., (1968) 70 ITR 293 (ALL) 2 DINA NATH HEM RAJ VS. COMMISSIONER OF INCOME TAX , 1927 AIR (ALD) 299 :- 15 -: 3 MEHTA PARIKH & CO. VS. COMMISSIONER OF INCOME TAX, (1956) 30 ITR 181 (SC) 4 L. SOHAN LAL GUPTA VS. COMMISSIONER OF INCOME TAX, (1958) 33 ITR 786 (ALL) 5 DEPUTY COMMISSIONER OF INCOME TAX VS. ROHINI BUILDERS, (2002) 256 ITR 360 (GUJ) 6 COMMISSIONER OF INCOME TAX VS. DAULATRAM RAWATMUIL, (1973) 87 ITR 349 (SC) 7 SAROGI CREDIT CORPORATION VS. COMMISSIONER OF INCOME TAX, (1976) 103 ITR 344 (PAT) 8 TOLARAM DAGA VS. COMMISSIONER OF INCOME TAX, (1966) 59 ITR 632 (ASSAM) 9 COMMISSIONER OF INCOME TAX VS. LOVELY EXPORTS (P) LTD., (2008) 216 CTR (SC) 195 10 COMMISSIONER OF INCOME TAX VS. STELLER INVESTMENT LTD., (1991) 192 ITR 287 (DEL) 11 NATHU RAM PREMCHAND VS. COMMISSIONER OF INCOME TAX, (1963) 49 ITR 561 (ALL) 12 UNION OF INDIA VS. T.R.VARNA, AIR 1957 (SC) 882 13 C. VASANTLAL & CO. VS. COMMISSIONER OF INCOME TAX, (1962) 45 ITR 206 (SC) 14 DHAKESWARI COTTON MILLS LTD. VS. COMMISSIONER OF INCOME TAX, (1954) 26 ITR 775 (SC) 15 GOPINATH NAIK VS. COMMISSIONER OF INCOME TAX, (1936) 4 ITR 1 (ALL) 16 COMMISSIONER OF INCOME TAX VS. VACMET PACKAGING (INDIA) PVT. LTD., (2014) 367 ITR 217 (ALL) 17 JAYA SECURITIES LTD. VS. COMMISSIONER OF INCOME TAX, (2008) 166 TAXMAN 7 (ALL) 18 COMMISSIONER OF INCOME TAX VS. M/S SURYA PACKAGING PVT. LTD., ITA NO. 14/2011 :- 16 -: 19 COMMISSIONER OF INCOME TAX VS. MRSRA PRESERVERS PVT LTD., (2013) 31 TAXMANN.COM 214 (ALL) 20 COMMISSIONER OF INCOME TAX VS. JAY DEE SECURITIES AND FINANCE LTD., (2013) 350 ITR 220 (ALL) 21 COMMISSIONER OF INCOME TAX (CENTRAL) VS. LDK SHARES & SECURITIES PVT. LTD. & ORS., (2012) 71 DTR (ALL) 371 22 COMMISSIONER OF INCOME TAX VS. M/S BANARAS SWARN KALA KENDRA PVT. LTD., ITA NO. 282/2009 23 COMMISSIONER OF INCOME TAX VS. NOVA PROMOTERS AND FINLEASE PVT. LTD., (2012) 342 ITR 169 (DELHI) 24 COMMISSIONER OF INCOME TAX VS. JAI HOSPITAL AND RESEARCH CENTRE, ITA NO. 81/2009 25 COMMISSIONER OF INCOME TAX VS. SOM TOBACCO INDIA LTD., (2D14) 42 TAXMANN.COM 310 (ALL) 26 COMMISSIONER OF INCOME TAX VS. AL ANAM AGRO FOODS PVT. LTD., (2013) 38 TAXMANN.COM 375 (ALL) 27 COMMISSIONER OF INCOME TAX VS. DIVINE LEASING & FINANCE LTD., (2008) 299 ITR 268 (DEL) 28 COMMISSIONER OF INCOME TAX VS. MIQ STEELS PVT. LTD., (2013) 36 TAXMANN.COM 422 (ALL) 29 COMMISSIONER OF INCOME TAX VS. STELLER INVESTMENT LTD., (2001) 251 ITR 263 (SC) 30 COMMISSIONER OF INCOME TAX VS. KAMNA MEDICAL CENTRE PVT. LTD., (2013) 35 TAXMANN.COM 470 (ALL) 31 K.N. AGARWAL VS. COMMISSIONER OF INCOME TAX, (1991) 189 ITR 769 (ALL) 32 AGRAWAL WAREHOUSING & LEASING LTD. VS. COMMISSIONER OF INCOME TAX, (2002) 257 ITR 235 (MP) 33 UNION OF INDIA VS. KAMALAKSHI FINANCE CORPORATION LTD., AIR 1992 (SC) 711 34 COMMISSIONER OF INCOME TAX VS. ELECTRO POLYCHEM LTD., (2008) 217 CTR (MAD) 371 :- 17 -: 35 COMMISSIONER OF INCOME TAX VS. FIRST POINT, FINANCE LTD., (2006) 286 ITR 477 (RAJ) 36 BARKHA SYNTHETICS LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, (2005) 197 CTR (RAJ) 432 37 COMMISSIONER OF INCOME TAX VS. DOWN TOWN HOSPITAL (P) LTD., (2004) 267 ITR 439 (GAU) 38 NEMI CHAND KOTHARI VS. COMMISSIONER OF INCOME TAX, (2003) 264 ITR 254 (GAU) 39 COMMISSIONER OF INCOME TAX VS. METACHEM INDUSTRIES, (2000) 245 ITR 160 (MP) 40 KISHINCHAND CHELLARAM VS. COMMISSIONER OF INCOME TAX, (1980) 125 ITR 713 (SC) 41 SMT. PANNA DEVI CHOWDHARY VS. COMMISSIONER OF INCOME TAX, (1994) 208 ITR 849 (BOM) 42 COMMISSIONER OF INCOME TAX VS. BHARAT ENGINEERING & CONSTRUCTION & CO., (1972) 83 ITR 187 (SC) 43 INDIA RICE MILLS VS. COMMISSIONER OF INCOME TAX, (1996) 218 ITR 508 (ALL) 7. HE HAS ALSO PLACED RELIANCE UPON THE ORDER OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF DY. CIT, CIRCLE, GONDA VS. M/S TULSYAN VASTRALAYA (P) LTD., BASTI IN I.T.A. NO. 473/LKW/2011, IN WHICH UNDER IDENTICAL CIRCUMSTANCES, INTRODUCTION OF SHARE APPLICATION MONEY WAS CONSIDERED TO BE GENUINE AND ADDITION WAS DELETED. 8. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY THE ASSESSEE HAS INTRODUCED SHARE APPLICATION MONEY OF RS.1.89 CRORES IN THE NAME OF SPIDERMAN FLORICULTURE PVT. LTD. AND RS.2.25 CRORES IN THE NAME OF VOLGA CRESEC PVT. LTD., IN ITS BOOKS OF ACCOUNT. IN ORDER TO PROVE THE AFORESAID RECEIPT OF SHARE APPLICATION MONEY FROM THE AFORESAID INVESTMENT COMPANIES TO BE GENUINE, THE ASSESSEE HAS PLACED :- 18 -: CONFIRMATION FROM THE SHARE APPLICANTS DULY CONFIRMING THE SHARE APPLICATION MONEY, SHARE APPLICATION FORMS SUBMITTED BY SHARE APPLICANTS; CERTIFICATE OF INCORPORATION OF SHARE APPLICANTS; RECEIPTS OF SHARE CERTIFICATE DULY INDICATING THE CERTIFICATE NO. & DISTINCTIVE NOS. OF SHARES ALLOTTED IN THE CASE OF ALLOTMENT OF SHARES; AUDITED FINANCIAL STATEMENTS I. E. PROFIT & LOSS A/C AND BALANCE SHEET OF THE COMPANY DULY EVIDENCING THE INVESTMENT MADE IN THE ASSESSEE COMPANY & ALSO ITS CREDIT WORTHINESS; BANK STATEMENTS OF SHARE APPLICANTS; AFFIDAVITS FROM DIRECTOR OF SHARE APPLICANT COMPANIES REGARDING INVESTMENT IN SHARES OF ASSESSEE-COMPANY. IT IS ALSO EVIDENT FROM THE RECORD THAT THE SHARE APPLICANTS ARE DULY INCORPORATED COMPANIES UNDER THE COMPANIES ACT AND THEY ARE REGULARLY ASSESSED TO TAX. THE DETAILS OF THEIR BANK ACCOUNT AND PAN WERE ALSO FURNISHED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ALSO ISSUED NOTICES UNDER SECTION 133(6) OF THE ACT TO THE SHARE APPLICANTS AND THE NOTICES WERE DULY RESPONDED BY THE SHARE APPLICANTS CONFIRMING THE INVESTMENT IN THE ASSESSEE-COMPANY. IT IS ALSO EVIDENT FROM THE RECORD THAT THE ASSESSING OFFICER HAS ALSO ISSUED A COMMISSION TO THE DDIT (INV.), NEW DELHI AND LATER ON SUMMONS UNDER SECTION 131 OF THE ACT TO THE SHARE APPLICANT COMPANIES AT THEIR REGISTERED OFFICE AND IN RESPONSE THERETO THE DIRECTORS OF THE SHARE APPLICANT COMPANIES WERE APPEARED ALONG WITH THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER. THEIR STATEMENTS WERE DULY RECORDED, IN WHICH THEY HAVE CONFIRMED THE INVESTMENT IN THE ASSESSEE-COMPANY. THE ASSESSEE HAS ALSO PLACED COPY OF FINANCIAL STATEMENT OF THE SHARE APPLICATION MONEY, IN WHICH IT IS NOTICED THAT THE SHARE APPLICANTS WERE HAVING SUFFICIENT FUNDS FOR MAKING INVESTMENT IN THE ASSESSEE-COMPANY TOWARDS SHARE APPLICATION MONEY. IT IS OBVIOUS FROM THE RECORD THAT THE SHARE CERTIFICATES WERE ALSO ISSUED TO THE SHARE APPLICANTS. IT IS ALSO EVIDENT FROM THE RECORD THAT THE ASSESSEE HAS FILED ENORMOUS EVIDENCE :- 19 -: BEFORE THE LOWER AUTHORITIES TO ESTABLISH THE CREDITWORTHINESS AND IDENTITY OF THE SHARE APPLICANTS. SINCE THE TRANSACTION WAS EFFECTED THROUGH BANKING CHANNEL, THE GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED. WHATEVER DOUBT IS CREATED BY THE ASSESSING OFFICER, THAT WAS ON THE BASIS OF THE REPORT OF THE DDIT (INV.), NEW DELHI, WHICH ARE RECEIVED BY THE ASSESSING OFFICER AFTER CONCLUSION OF THE HEARING AND THE REPORT WAS RELIED ON BY THE ASSESSING OFFICER WITHOUT CONFRONTING IT TO THE ASSESSEE AND WHEN THE MATTER WAS TRAVELLED TO THE LD. CIT(A), THE LD. CIT(A) HAS TAKEN INTO ACCOUNT ALL THE RELEVANT EVIDENCE AND THE REPORT OF THE DDIT (INV.), NEW DELHI AND AFFIDAVITS OF THE DIRECTORS OF THE SHARE APPLICANTS AND KEEPING IN VIEW ALL THE RELEVANT EVIDENCE AVAILABLE ON RECORD, THE LD. CIT(A) WAS OF THE VIEW THAT INVESTMENT MADE BY THE SHARE APPLICANTS IN THE ASSESSEE-COMPANY TOWARDS CAPITAL ARE GENUINE TRANSACTION. HE ACCORDINGLY DELETED THE ADDITION. NOW DURING THE COURSE OF HEARING OF THE APPEAL, THE REVENUE HAS SIMPLY PLACED RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER. THEY HAVE NOT BROUGHT OUT ANYTHING ON RECORD TO ESTABLISH THAT THE ASSESSEES OWN MONEY HAS BEEN ROUTED THROUGH ALLEGED BANKING CHANNELS TO INCREASE THE CAPITAL OF THE ASSESSEE-COMPANY. 9. OUR ATTENTION WAS ALSO INVITED TO VARIOUS JUDICIAL PRONOUNCEMENTS REFERRED TO BY THE ASSESSEE DURING THE COURSE OF HEARING AND FROM ITS CAREFUL PERUSAL WE FIND THAT IN THE CASE OF PRIVATE LIMITED COMPANIES WHERE SHARE APPLICATION MONEY WAS INTRODUCED, THE ASSESSEE IS AT THE MOST REQUIRED TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANTS BESIDES ESTABLISHING THE GENUINENESS OF THE TRANSACTION. IN THE INSTANT CASE, THE ASSESSEE HAS FILED ENORMOUS EVIDENCE ON RECORD TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANTS AND GENUINENESS OF THE TRANSACTION. THEREFORE, IN THE LIGHT OF THESE FACTS, WE ARE OF THE :- 20 -: CONSIDERED VIEW THAT THE ASSESSEE HAS DULY DISCHARGED ITS ONUS, WHICH PRIMARILY LAY ON IT. 10. OUR ATTENTION WAS ALSO INVITED TO THE ORDER OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF DY. CIT, CIRCLE, GONDA VS. M/S TULSYAN VASTRALAYA (P) LTD., BASTI (SUPRA), IN WHICH UNDER IDENTICAL CIRCUMSTANCES, THE TRANSACTION WAS CONSIDERED TO BE GENUINE AND ADDITION WAS DELETED. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- 6. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE RECORD, WE FIND THAT THE ASSESSEE COMPANY ISSUED FOR SUBSCRIPTION OF 50,000 EQUITY SHARES OF FACE VALUE OF RS.100/- EACH WITH A PREMIUM OF RS.100/- PER SHARE AND THE TOTAL AMOUNT RECEIVED BY THE ASSESSEE COMPANY WAS RS. ONE CRORE (RS.50 LAKHS TOWARDS SHARE CAPITAL AND RS. 50 LAKHS TOWARDS SHARE PREMIUM), WHICH WAS TREATED TO BE UNEXPLAINED BY THE ASSESSING OFFICER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS PLACED THE COPIES OF THE AUDITED ACCOUNTS OF THE INVESTORS SHARE APPLICATION FORM, CHEQUE NUMBER AND BANK, PAN ETC. OTHER DETAILS OF THESE COMPANIES WERE ALSO PLACED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER MADE AN ENQUIRY THROUGH INSPECTOR WHO REPORTED THAT THE SIGNBOARDS OF THE COMPANIES WERE NOT DISPLAYED AT THE OFFICE PREMISES OF THOSE COMPANIES AND MOST OF THE COMPANIES OFFICE ADDRESS IS SAME. HE HAS ALSO REPORTED THAT THE PHYSICAL COPY OF THE SHARES WERE NOT SHOWN BY THESE COMPANIES. THESE FACTORS CREATED DOUBT IN THE MIND OF THE ASSESSING OFFICER BUT WHILE DOUBTING THE GENUINENESS OF THE TRANSACTIONS, THE ASSESSING OFFICER HAS IGNORED THE OTHER POINTS MENTIONED IN THE INSPECTORS REPORT THAT THE ACCOUNT OF THESE COMPANIES, TO WHOM THE SHARES WERE ALLOTTED, WERE PRODUCED BY THE CHARTERED :- 21 -: ACCOUNTANTS. THE REASONS FOR NOT FURNISHING THE COPY OF SHARES WAS ALSO EXPLAINED TO THE INSPECTOR THAT THE SHARES WERE SOLD TO OTHER COMPANIES. 6.1 OUR ATTENTION WAS INVITED TO VARIOUS JUDICIAL PRONOUNCEMENTS RENDERED UPON THE SUBJECT. IN THE CASE OF CIT VS. LOVELY EXPORTS (SUPRA), THEIR LORDSHIPS OF THE APEX COURT HAVE HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO REOPEN THE INDIVIDUAL ASSESSMENT IN ACCORDANCE WITH LAW BUT THE AMOUNT OF SHARE MONEY CANNOT BE REGARDED AS UNDISCLOSED INCOME U/S 68 OF THE ACT. THE JUDGMENT OF APEX COURT WAS EXAMINED BY VARIOUS HIGH COURT. 6.2 IN THE CASE OF CIT VS. DWARKADHISH INVESTMENT (SUPRA), THEIR LORDSHIPS OF HON'BLE DELHI HIGH COURT HAVE OBSERVED THAT THOUGH IN SECTION 68 PROCEEDINGS, THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE YET ONCE HE PROVES THE IDENTITY OF THE CREDITORS BY EITHER FURNISHING THEIR PAN OR INCOME TAX ASSESSMENT NUMBER AND SHOWS THE GENUINENESS OF TRANSACTION BY SHOWING MONEY IN HIS BOOKS OF ACCOUNT EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT, THEN THE ONUS OF PROOF SHIFTS TO THE REVENUE. JUST BECAUSE THE CREDITORS COULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE SECTION 68 OF THE ACT. ONE MUST LOSE SIGHT OF THE FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWERS TO TRACE ANY PERSON. MOREOVER, IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT TO PROVE THE SOURCE OF SOURCE. SIMILAR VIEW WAS AGAIN EXPRESSED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAMIR BIO-TECH (SUPRA) BY HOLDING THAT WHERE THE IDENTITIES OF THE SHARE SUBSCRIBERS WERE NOT IN DOUBT AND THE TRANSACTIONS HAD ALSO BEEN UNDERTAKEN THROUGH BANKING CHANNELS AND THE :- 22 -: CREDITWORTHINESS HAS BEEN ESTABLISHED BESIDES FURNISHING COMPLETE DETAILS WITH REGARD TO ASSESSMENT, THE DEPARTMENT COULD NOT DRAW AN ADVERSE INFERENCE AGAINST THE ASSESSEE ONLY BECAUSE THE SUBSCRIBERS DID NOT INITIALLY RESPOND TO THE SUMMONS. 6.3 IN THE CASE OF JAYA SECURITIES (SUPRA) WHILE DEALING AN ISSUE ON ADDITION U/S 68 OF THE ACT IN RESPECT OF SUBSCRIPTION AMOUNTS TOWARDS THE SHARE CAPITAL OF A COMPANY, THEIR LORDSHIPS OF HON'BLE ALLAHABAD HIGH COURT OBSERVED AS UNDER: '4. LEARNED COUNSEL FOR THE APPELLANT SUBMITTED THAT NO ADDITION UNDER SECTION 68 COULD BE MADE IN RESPECT OF THE SUBSCRIPTION AMOUNT TOWARDS THE SHARE CAPITAL OF A COMPANY LIMITED BY SHARES WHETHER IT IS PRIVATE OR PUBLIC AND IN SUPPORT THEREOF A DIVISION BENCH DECISION OF DELHI HIGH COURT HAS BEEN REFERRED IN THE CASE OF CIT VS. STELLER INVESTMENT LTD. [1991] 192 ITR 287 WHICH DECISION HAS BEEN UPHELD BY THE APEX COURT IN THE CASE OF CIT VS. STELLER INVESTMENT LTD. [2001] 251 ITR 263. 5. SHRI R.K. UPADHYA ON THE OTHER HAND SUBMITTED THAT THE DEHLI HIGH COURT HAD ONLY DECLINED TO CALL FOR A REFERENCE ON THE GROUND THAT NO QUESTION OF LAW ARISES WHICH ORDER HAS BEEN UPHELD BY THE APEX COURT WHICH DOES NOT BENEFIT THE APPELLANT. 6. THE SUBMISSION OF SHRI R.K. UPADHYA IS NOT CORRECT. THE DELHI HIGH COURT WHILE DECLINING TO CALL FOR REFERENCE HAD GIVEN THE FOLLOWING REASONS: 'IT IS EVIDENT THAT EVEN IF IT BE ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL WERE NO GENUINE, NEVERTHELESS, UNDER NO CIRCUMSTANCES, CAN THE AMOUNT OF :- 23 -: SHARE CAPITAL BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. IT MAY BE THAT THERE ARE SOME BOGUS SHAREHOLDERS IN WHOSE NAME SHARES HAD BEEN ISSUED AND THE MONEY MAY HAVE BEEN PROVIDED BY SOME OTHER PERSONS. IF THE ASSESSMENT OF THE PERSONS WHO ARE ALLEGED TO HAVE ASSESSMENT OF THE PERSONS WHO ARE ALLEGED TO HAVE REALLY ADVANCED THE MONEY IS SOUGHT TO BE REOPENED, THAT WOULD HAVE MADE SOME SENSE BUT WE FAIL TO UNDERSTAND AS TO HOW THIS AMOUNT OF INCREASED SHARE CAPITAL CAN BE ASSESSED IN THE HANDS OF THE COMPANY ITSELF.' 7. THE MATTER WAS CARRIED BY THE REVENUE BEFORE THE APEX COURT IN CIVIL APPEAL NO. 7668 OF 1996. THE APEX COURT WHILE DISMISSING THE APPEAL HAD CLEARLY HELD THAT 'WE ARE IN AGREEMENT WITH THE HIGH COURT'. IT CLEARLY MEANS THAT THE REASONING GIVEN BY THE DELHI HIGH COURT REPRODUCED ABOVE, STAND CONFIRMED BY THE APEX COURT AND, THEREFORE, THE PRINCIPLE WHICH EMERGES IS THAT NO ADDITION TO SECTION 68 CAN BE MADE IN THE INVESTMENT IN THE SHARE CAPITAL OF A COMPANY LIMITED BY SHARES WHETHER PUBLIC OR PRIVATE. 8. IT MAY BE MENTIONED HERE THAT THE APEX COURT HAD DECIDED THE CIVIL APPEAL AND HAD NOT PASSED THE ORDER WHILE CONSIDERING THE SPECIAL LEAVE PETITION. WHILE DECIDING THE SPECIAL LEAVE PETITION, IT MAY NOT HAVE AMOUNTED TO CONFIRMATION OF THE REASONING GIVEN BY THE DELHI HIGH COURT BUT AS THE APEX COURT HAS DECIDED THE CIVIL APPEAL EXPRESSING IN AGREEMENT WITH REASONING GIVEN BY THE DELHI HIGH COURT, IT WOULD AMOUNT TO CONFIRMATION OF THE PRINCIPLES LAID DOWN BY THE DELHI HIGH COURT.' 6.4 SIMILAR VIEW WAS AGAIN EXPRESSED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. WINDSTRAL PETROCHEMICAL (P) LTD. (SUPRA). :- 24 -: 6.5 IN THE CASE OF CIT VS. ORBITAL COMMUNICATION (P) LTD.[2010] 327 ITR 560 (DELHI), THEIR LORDSHIPS OF DELHI HIGH COURT HAVE HELD THAT WHERE SUBSTANTIAL EVIDENCE WAS PRODUCED BY THE ASSESSEE COMPANY TO PROVE CREDITWORTHINESS OF CREDITOR AND GENUINENESS OF THE SHARE APPLICATION, FAILURE TO PRODUCE CREDITOR IS NOT MATERIAL AND ADDITION TO SHARE APPLICATION MONEY IS NOT SUSTAINABLE. 6.6 IN THE CASE OF CIT VS. JAY DEE SECURITIES AND FINANCE LTD. (SUPRA), THEIR LORDSHIPS OF JURISDICTIONAL HIGH COURT HAVE HELD THAT IF THE ASSESSEE PRODUCES THE NAMES, ADDRESSES AND PERMANENT ACCOUNT NUMBERS OF THE SHAREHOLDERS, THE ONUS ON THE ASSESSEE TO PROVE THE SOURCE OF SHARE APPLICATION MONEY STANDS DISCHARGED. IF THE ASSESSING AUTHORITY IS NOT SATISFIED WITH THE CREDITWORTHINESS OF THE SHAREHOLDERS, IT IS OPEN TO THE ASSESSING AUTHORITY TO VERIFY THE SAME IN THE HANDS OF THE SHAREHOLDERS CONCERNED. 6.7 AGAIN IN THE CASE OF CIT VS. MISHRA PRESERVERS (P) LTD. 350 ITR 220 (ALL), THEIR LORDSHIPS OF ALLAHABAD HIGH COURT HAVE HELD THAT WHERE THE ASSESSEE PRODUCES RELEVANT EVIDENCE BEFORE THE CIT(A) ESTABLISHING THAT ALL THE PERSONS WHO HAD DEPOSITED THE SHARE APPLICATION MONEY WERE NOT FICTITIOUS PERSONS, ADDITION MADE HAS TO BE DELETED. 6.8 FOLLOWING THE AFORESAID JUDGMENTS, THE TRIBUNAL HAS TAKEN A SIMILAR VIEW IN THE CASE OF ACIT VS. DEVENDRA SHEETGRAH PVT. LTD. IN I.T.A.NO.533/LKW/2011. IN THAT CASE THERE WAS NOTHING TO DISPUTE THE FACT OF THE ASSESSEE HAVING RECEIVED THE MONEY AS SHARE CAPITAL BUT DOUBTS HAVE BEEN RAISED TO MAKE THOSE INVESTMENTS. THE TRIBUNAL, WHILE DELETING THE ADDITIONS, HAVE OBSERVED THAT NOTHING PREVENTED THE ASSESSING OFFICER TO SUMMON THESE SHAREHOLDERS AND SATISFY HIMSELF ABOUT THEIR CAPACITY WHERE ALL THE RELEVANT DETAILS WERE BEFORE HIM. :- 25 -: 6.9 IN THE CASE OF CIT VS. KAMDHENU STEEL & ALLOYS LTD. [2012] 206 TAXMAN 254 TAXMANN.COM 26 (DELHI), THE HON'BLE DELHI HIGH COURT HAS HELD THAT WHERE ASSESSEE HAD GIVEN PARTICULARS OF REGISTRATION OF INVESTING/APPLICANT COMPANIES, CONFIRMATION FORM OF SHARE APPLICANTS, BANK ACCOUNTS DETAILS AND SHOWN PAYMENT THROUGH ACCOUNT PAYEE CHEQUES ETC., IT COULD NOT BE SAID THAT ASSESSEE HAD DISCHARGED ITS INITIAL ONUS AND JUST BECAUSE SOME OF THE CREDITORS/SHARE APPLICANT COULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE REVENUE A RIGHT TO INVOKE SECTION 68 WITHOUT ANY ADDITIONAL MATERIAL TO SUPPORT SUCH A MOVE. 6.10 OUT ATTENTION WAS ALSO INVITED BY THE REV TO THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD. AND CIT VS. GANGESHWARI METALS (P.) LTD. [2013] 214 TAXMAN 423 TAXMANN.COM 328 (DELHI). IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD., THE SHARE CAPITAL INTRODUCED WAS CONSIDERED TO BE THE BOGUS AND ADDITION MADE U/S 68 BY THE REVENUE AUTHORITIES WAS CONFIRMED. WHILE ANSWERING THE QUESTION, THEIR LORDSHIPS OF DELHI HIGH COURT HAVE EXAMINED VARIOUS ASPECTS. IN THAT CASE THE ASSESSMENT WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED AND THEREAFTER THE ASSESSEE WAS ASKED TO PRODUCE THE SHARE APPLICANTS AND THE ASSESSEE COULD NOT PRODUCE THE SAME. BESIDES OTHER INFORMATION AS SOUGHT BY THE ASSESSING OFFICER WERE NOT FURNISHED. WHILE ADJUDICATING THE ISSUE, THEIR LORDSHIPS OF DELHI HIGH COURT HAVE OBSERVED THAT THE MATERIAL PLACED BY THE ASSESSEE TO PROVE THE GENUINENESS OF HIS CLAIM WAS NOT SUFFICIENT AND ACCORDINGLY THE HON'BLE HIGH COURT DID NOT APPROVE THE GROUND ON WHICH THE TRIBUNAL HAD CANCELLED THE ADDITION AND OBSERVED THAT THE JUDGMENT OF FULL BENCH OF DELHI HIGH COURT IN COMMISSIONER OF INCOME-TAX VS SOPHIA FINANCE LTD. [1994] 205 ITR 98 (DEL) COULD NOT BE UNDERSTOOD :- 26 -: THAT WHEN IDENTITY OF THE SHAREHOLDER IS PROVED, THERE COULD NOT BE ANY ADDITION IN THE HANDS OF THE COMPANY WHICH RECEIVED THE SHARE APPLICATION MONEY. THIS JUDGMENT WAS CONSIDERED BY HON'BLE DELHI HIGH COURT IN THE CASE OF GANGESHWARI (SUPRA) AND THEIR LORDSHIPS OF HON'BLE DELHI HIGH COURT VIDE JUDGMENT DATED 21/01/2013 HAVE HELD THAT WHERE ASSESSEE IN SUPPORT OF TRANSACTION OF RECEIPT OF SHARE APPLICATION MONEY BROUGHT ON RECORD VARIOUS DOCUMENTS SUCH AS NAMES AND ADDRESSES OF SHARE APPLICANTS, THEIR CONFIRMATORY LETTERS, COPIES OF BANK STATEMENTS ETC., THE SAID TRANSACTION WAS TO BE REGARDED AS GENUINE AND, CONSEQUENTLY NO ADDITION COULD BE MADE IN RESPECT OF SAME U/S 68 OF THE ACT. 7. TURNING TO THE FACTS OF THE CASE, WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHENEVER ASSESSEE WAS ASKED TO PRODUCE THE DETAILS WITH REGARD TO THE SHARE APPLICANTS, THE COPIES OF AUDITED ACCOUNTS OF THE INVESTORS COMPANY, SHARE APPLICATION FORM, CHEQUE NUMBER AND BANK, PAN ETC. WERE FILED. THE CONFIRMATION FORM OF THE SHARE APPLICANTS IN RESPECT OF SHARE MONEY RECEIVED AND SHARE ALLOTTED WERE FILED. DURING THE COURSE OF INDEPENDENT ENQUIRIES BY THE INSPECTOR, THE CHARTERED ACCOUNTANT OF THE CONCERNED SHARE APPLICANTS HAVE ALSO FURNISHED THE COPIES OF THE AUDITED ACCOUNTS OF THE INVESTOR COMPANY GIVING CHEQUE NUMBER AND BANK ETC. THE ASSESSING OFFICER HAS SIMPLY DOUBTED THE GENUINENESS OF THESE TRANSACTIONS ON THE BASIS OF THE INSPECTORS REPORT WHO STATED IN HIS REPORT THAT SIGNBOARDS OF THE COMPANY WERE NOT AVAILABLE AND ADDRESSES OF THE SHARE APPLICANTS ARE COMMON AND THE OFFICE WERE OWNED IN ONE PROPERTY. BESIDES, HE HAS NOT BROUGHT ANY OTHER EVIDENCE ON RECORD TO DOUBT THESE TRANSACTIONS. NOTHING HAS BEEN BROUGHT ON RECORD TO DISPUTE THE IDENTITY OF THE SHARE APPLICANTS AND THEIR CREDITWORTHINESS. THE ASSESSING OFFICER HAS SIMPLY DOUBTED ON THE BASIS OF THE ENQUIRY :- 27 -: REPORT BUT NO FURTHER INVESTIGATION OR ENQUIRY WAS MADE TO COLLECT MORE EVIDENCE TO DISBELIEVE THE GENUINENESS OF THESE TRANSACTIONS. ONE OF THE REASONS FOR DOUBTING OF THE GENUINENESS IS THAT THE SHARE APPLICANT HAVE SOLD THEIR SHARES TO SOME OTHER COMPANIES, WHO AFTER SOMETIME SOLD IN TURN TO THE DIRECTORS OF THE ASSESSEE COMPANY. THERE IS NO LEGAL BAR THAT SHARE APPLICANTS CANNOT SELL ITS SHARE AFTER ITS PROPER ALLOTMENT IN HIS FAVOUR. THE INITIAL SHARES WERE ALLOTTED IN NOVEMBER AND DECEMBER 2006, WHICH WERE LATER ON SOLD TO SOME OTHER COMPANIES IN 2007 AND 2008 AND THOSE COMPANIES IN TURN FURTHER SOLD TO DIRECTORS OF THE ASSESSEE COMPANY. BEFORE HOLDING THESE TRANSACTIONS TO BE BOGUS, THE ASSESSING OFFICER IS REQUIRED TO BRING SOME MORE EVIDENCE ON RECORD TO ESTABLISH THAT THE INVESTMENT IN FACT BELONGS TO THE ASSESSEE WHICH HAS ROUTED THROUGH THESE SHARE APPLICANTS IN INVESTMENT IN SHARES OF THE ASSESSEE COMPANY BUT NOTHING HAS BEEN BROUGHT ON RECORD IN THIS REGARD. THROUGH VARIOUS JUDICIAL PRONOUNCEMENTS IT HAS REPEATEDLY BEEN HELD BY THE JURISDICTIONAL HIGH COURT AND OTHER HIGH COURTS THAT WHERE THE ASSESSEE HAS PRODUCED THE RELEVANT EVIDENCE BEFORE THE REVENUE AUTHORITIES TO ESTABLISH THAT ALL THE PERSONS WHO HAVE DEPOSITED THE SHARE APPLICATION MONEY WERE NOT FICTITIOUS PERSONS AND MOST OF THEM WERE IDENTIFIABLE AND THE PAYMENTS WERE MADE THROUGH CHEQUE AND MOST OF THEM WERE ASSESSED TO INCOME TAX, THE ADDITION IS LIABLE TO BE DELETED. IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS, WE ARE OF THE VIEW THAT IN THE INSTANT CASE, THE ASSESSEE HAS PLACED MATERIAL ON RECORD TO ESTABLISH IDENTITY, CREDITWORTHINESS OF THE SHARE APPLICANTS. THEREFORE, THERE IS NO VALID REASON TO HOLD THE SHARE APPLICATION MONEY AS BOGUS AND UNEXPLAINED CREDIT U/S 68 OF THE ACT. WE HAVE ALSO EXAMINED THE ORDER OF CIT(A) AND FIND THAT HE HAS PROPERLY ADJUDICATED THE ISSUE. SINCE WE DO NOT FIND INFIRMITY THEREIN, WE UPHOLD HIS ORDER. :- 28 -: 11. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE LD. CIT(A) HAS PROPERLY ADJUDICATED ISSUE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS REFERRED TO BEFORE HIM. SINCE WE DO NOT FIND ANY INFIRMITY THEREIN, WE CONFIRM HIS ORDER. 12. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:11 TH DECEMBER, 2015 JJ:1811 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR