M/s. Prime Telesystems Ltd., New Delhi V. ACIT, Noida

ITA 630/DEL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6758 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 29-09-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 10-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence; Question of law; Set aside
• Section: 271(1)(c); 142(1); 133(6); 195; 207; 131; 144

Judgement Text

66 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI R.C. SHARMA ITA NO. 630/DEL/10 A.Y.: 1999-2000 M/S PRIME TELESYSTEMS LTD., VS. ACIT, NOIDA. 202, NILGIRI, 9, BARAKHAMBA ROAD, NEW DELHI-110001. PAN/ GIR NO. AAACP3838L ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI K. SAMPATH ADV. RESPONDENT BY : SHRI H.K. LAL SR. DR O R D E R PER R.P. TOLANI, J.M : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF CIT( APPEALS), GHAZIABAD DATED 21-12-2009 RELATING TO A.Y. 1999-20 00. SOLE GROUND RAISED IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AUTHORITIES BELOW WRONGLY ADDED A SUM OF RS. 1, 43,37,219/- AS UNEXPLAINED INVESTMENT DESPITE THAT BEING SHARE APPLICATION MONIES AND DESPITE DIRECTIONS OF THE HONBLE TRIBUN AL TO THEM TO CARRY OUT THE VERIFICATION ON THEIR OWN. THE ADD ITION HAS BEEN MADE WITHOUT CARRYING OUT NECESSARY VERIFICATION AN D WITHOUT ABIDING BY THE DIRECTIONS OF THE HONBLE TRIBUNAL. AT ANY RATE THE ISSUE IS NOW SQUARELY COVERED BY THE DECISION O F THE APEX COURT IN THE CASE OF LOVELY EXPORTS 216 CTR 195 AND SO THE ADDITION AS NOW SUSTAINED BY THE AUTHORITIES BELOW MERITS TO BE QUASHED. 2. BRIEF FACTS ARE THAT ASSESSEE IS A LIMITED COMPA NY, ENGAGED IN THE BUSINESS OF TELECOM CONSULTANCY AND TECHNOLOGY PROD UCTS. THE ASSESSEE FILED ITS RETURN ON 31-12-1999 DECLARING INCOME OF RS. 46 ,987/- (30% OF BOOK PROFIT COMPUTED U/S 115JA). THE ASSESSMENT WAS ORIG INALLY COMPLETED ON 22- 03-2002 EX PARTY U/S 144 OF I.T. ACT BY MAKING AN A DDITION OF RS. 1,43,37,219/- AS UNEXPLAINED INVESTMENT IN SHARE CA PITAL U/S 69. ASSESSEE FILED APPEAL BEFORE LD. CIT(A), WHO UPHELD THE EX P ARTY ASSESSMENT IN PRINCIPLE. AS REGARDS THE ADDITION OF RS. 1,43,37,2 19/- AS UNEXPLAINED INVESTMENT, THE LD. CIT(A) REQUIRED THE ASSESSEE TO FILE CERTAIN INFORMATION IN RESPECT OF SHARES ALLOTTED AND SHARE APPLICATION MO NEY LIKE, NAMES/ ADDRESS/ PAN/ DATE AND MODE OF RECEIPT OF MONEY/ COPIES OF S HARE APPLICATION FORMS AND CONFIRMATION, ASSESSEE COMPLIED THEREWITH. CIT( A) DELETED ADDITIONS OF RS. 96,49,219/- WHERE CONFIRMATIONS WERE FILED AND BY HOLDING THAT CONFIRMATIONS WERE NOT PROPER, CONFIRMED THE BALANC E ADDITION OF RS. 46,88,000/-. 2.1. THE DEPARTMENT FILED APPEAL BEFORE ITAT AGAIN ST ORDER OF LD. CIT(A) AGAINST DELETION OF RS. 96,49,219/- WHILE THE ASSES SEE FILED CROSS OBJECTION AGAINST THE ADDITION OF RS. 46,88,000/- CONFIRMED B Y CIT(A). BOTH THE APPEALS AND CROSS OBJECTIONS WERE DISPOSED OFF BY ITAT VIDE ORDER NO. ITA NO. 4565/DEL/03 DATED 13 TH OCTOBER, 2006. VIDE THIS ORDER, ITAT RESTORED THE MATTER TO THE FILE OF AO WITH DIRECTIONS TO EXA MINE THE EVIDENCE ADDUCED BY ASSESSEE BEFORE LD. CIT(A) AND TAKE A DECISION A FRESH IN ACCORDANCE WITH LAW. THE RELEVANT PARA OF ITAT, IS REPRODUCED HEREU NDER: 14. FOR THESE REASONS, WE SET ASIDE THE ORDER OF T HE CIT(A). WE RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO HIM TO EXAMINE THE EVIDENCE ADDUCED BY THE ASSESSEE BEFORE THE CIT(A) AND TAKE A DECISION AFRESH IN ACCORDANCE WIT H LAW. NEEDLESS TO ADD THAT THE ASSESSEE SHALL BE GIVEN AD EQUATE OPPORTUNITY OF BEING HEARD. THUS, BOTH THE APPEALS ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. 2.2. AO CONSEQUENT TO THESE DIRECTIONS PROCEEDED TO REFRAME THE ASSESSMENT PROCEEDINGS AND ISSUED NOTICES U/S 143(2 ) AND 142(1) ON 24-8- 2008. DURING THE COURSE OF THESE PROCEEDINGS, AO DE SIRED THE ASSESSEE TO FILE FOLLOWING MORE DOCUMENTS THAN WHAT WERE ADDUCE D BEFORE CIT(A):- 1. LIST WITH NAMES/ OLD ADDRESS, CURRENT ADDRESS/PAN/CURRENT LANDLINE OR MOBILE NO., PLACE W HERE THEY ARE ASSESSED AT THAT TIME, PLACE WHERE THEY AR E ASSESSED AT PRESENT. 2. LIST CONTAINING DATE OF RECEIPT OF MONEY FROM EA CH PERSON IN QUESTION/ WHETHER IN CASH OR DD OR CHEQUE / IF BY DD OR CHEQUE THEN NO. AND BANK ON WHICH DRAWN AN D DATE OF DRAWN. 3. COPY OF BANK STATEMENT OF EACH PERSON SHOWING DE BIT ENTRY IN BANK FOR DD/ CHEQUE/ CASH., COPY OF BANK STATEMENT SHOWING CREDIT ENTRIES. 4. FOR THOSE WHO GAVE SHARE APPLICATION MONEY- WERE SHARES ALLOTTED OR MONEY RETURNED BACK, EVIDENCE FO R ALLOTMENT/ REFUND IN FORM OF BANK STATEMENT OF YOUR SELF AND PERSON IN QUESTION. 5. COPY OF LAND LINE PHONE BILL/ VOTER ID CARD/ ELE CTRICITY BILL/ DRIVING LICENCE ETC. OF PERSON IN QUESTION (A NY ONE OR TWO OF THESE). 6. COPY OF ITR FOR RELEVANT YEAR IN QUESTION. 2.3. ASSESSEE IN REPLY, VIDE LETTER DATED 28-11-200 8 EXPRESSED ITS DIFFICULTY TO PRODUCE MORE PAPERS AS THE MATTER WAS ABOUT 8 YE ARS OLD AND REQUESTED TO CONSIDER EVIDENCE ADDUCED BEFORE CIT(A). THE CONTEN TS OF THE LETTER ARE AS UNDER: PLEASE NOTE THAT WE ARE NOT IN POSSESSION OF ANY P APERS FOR A.Y. 1999-2000 AS COMPANY LAW OR INCOME TAX GUIDELI NES DO NOT REQUIRE A COMPANY TO MAINTAIN SUPPORTS AND ACCO UNTING PAPERS BEYOND EIGHT YEARS. ALSO KINDLY NOTE THAT CO MPANY MANAGEMENT AND OWNERSHIP CHANGED IN 2001, SUBSEQUEN T TO WHICH MOST OF THE EARLIER SHAREHOLDERS CEASED TO BE SHAREHOLDERS IN THE COMPANY. THE COMPANY HAS NO EMPOWERMENT TO SEEK DETAILS SUCH AS THOSE INDICATED BY YOU (PHONE BILL/ ELECTRICITY BILL/ VOTER ID CARD ETC.) NOR WERE WE REQUIRED TO COLLECT OR MAINTAIN THESE BY PREVALENT LAW WHEN THE SHARE CAPITAL WAS RAISED IN THE NINETIES. ALL DOCUMENTS AS SOUGHT DURING THE APPEAL PROCEEDIN GS WERE SUBMITTED IN ORIGINAL TO THE HONBLE COMMISSIONER ( APPEALS), NEW DELHI INCLUDING DOCUMENTS RELATING TO COURT CAS ES FILED FOR DECLARATION OF ACCOUNTS SINCE THE COMPANY IS NOT EM POWERED BY LAW TO SEEK INFORMATION FROM PAST SHAREHOLDERS. THE SE CASES WERE REPLIED TO PROVING THAT THE PURPOSELESS TO WAI T FOR THE FIFTEEN TO TWENTY YEARS THAT IT WOULD TAKE TO GET A FINAL ORDER IN THIS MATTER AND INSPITE OF NOT BEING AT ANY FAULT W HATSOEVER, WE HAD REQUESTED THE COMMISSIONER (APPEALS) TO TAKE TH E STAND HE DEEMED APPROPRIATE AND CLOSE THE MATTER. THE INCOME TAX DEPARTMENT WOULD DEFINITELY HAVE ACCESS TO THE RECO RDS COLLECTED BY THE HONBLE COMMISSIONER (APPEALS) AN D WE WOULD REQUEST YOU TO ACCESS THOSE FROM THE RECORD R OOMS OF THE INCOME TAX DEPARTMENT AS OUR SETS ARE NOT AVAILABLE . ALL ORIGINAL DOCUMENTS HAD BEEN SUBMITTED. 2.4. AO IN THE ASSESSMENT ORDER AT PARA 8 HAS RECOR DED THE FACT, THE CIT(A) REQUIRED THE ASSESSEE TO FILE SOME EVIDENCE AND IT WAS COMPLIED WITH BY FOLLOWING OBSERVATIONS: (2) DURING THE APPELLATE PROCEEDINGS, THE APPELLAN T COMPANY WAS REQUIRED BY LD C1T(A) TO FILE THE FOLLOWING INF ORMATION IN RESPECT OF THE SHARES ALLOTTED AND ALSO THE SHARE A PPLICATION MONEY: A) COMPLETE NAME AND POSTAL ADDRESS OF THE PERSON TO WHOM THE SHARES HAVE BEEN ALLOTTED/FROM WHOM THE SHARE APPLICATION MONEY HAS BEEN RECEIVED. B) PERMANENT ACCOUNT NUMBER OF THE CONCERNED PERSO N. C) DATE OF RECEIPT OF MONEY AND MODE OF RECEIPT. D) PHOTOCOPY OF THE SHARE APPLICATION AND ALSO THE CONFIRMATIONS OF THE CONCERNED PERSONS. IN RESPONSE THE APPELLANT COMPANY FILED THE DETAILS VIDE THEIR LETTER DATED 5 TH DEC. 2002 IN THE FOLLOWING FORM: - - SUMMARY CHART SHOWING COMPLETE BREAK-UP OF SHARE APPLICATION MONEY AND LIST OF SHAREHOLDERS. - SECTION A: CONFIRMATION FROM COMPANY FOUNDER AND ASSOCIATION TOTALING RS. 38.8 LAKHS. - SECTION B: CONFIRMATION FROM ANGEL INVESTOR GROUP T OTALING RS. 40 LAKHS. - SECTION C: DETAILS OF SHARE APPLICATION MONEY RECEI VED THROUGH BROKER ALONG WITH CHEQUE DETAILS AND COPY O F BANK STATEMENT OF RECEIVING ACCOUNT TOTALING RS. 25.6. L AKHS. - SECTION D: DETAILS OF SHARE APPLICATION IN THE NAME OF B. NAG AND P. LOHIA ALONG WITH PROOF OF THEM NOT BEING CONTACTABLE TOTALING RS. - SECTION E: DETAILS OF SHARE APPLICATION IN THE NAME OF COMPANY STAKEHOLDERS TOTALING RS. 14.2 LAKHS. - SECTION F: CONFIRMATION FROM CURRENT SHAREHOLDER WH O HAS ACQUIRED SHARES FROM APPENDED LIST OF ORIGINAL CONT RIBUTORS RS. 21 LAKHS - SECTION G: ONE OF THE SHAREHOLDERS IS A NON-RESIDEN T INDIANS WHO IS NOT EXIGIBLE TO INCOME TAX IN INDIA. HE IS A WAY ON OVERSEAS ENGAGEMENTS AND CONFIRMATION VIDE E-MAIL I S ENCLOSED TOTAL RS. 2.91. LAKHS (1) MR. SATISH MEHTA (ADDITIONS DURING THE YEAR RS . 3489 LAKHS) AND SH. H. MEHTA (ADDITION DURING THE YEAR R S. 2.91 LAKH). BEFORE LD CIT(A) THE APPELLANT COMPANY HAD FILED CONFIRMATORY LETTERS FROM BOTH OF THESE PERSONS. I N THE CONFIRMATORY LETTERS COMPLETE ADDRESS OF THE PERSON S AND THEIR PANS HAVE ALSO BEEN MENTIONED. LD, CIT(A) HELD THAT FROM THESE LETTERS, THE IDENTITY OF THE PERSONS STANDS E STABLISHED AND THE PERSONS IN QUESTION HAVE ALSO CONFIRMED THAT TH EY HAVE INVESTED IN SHARES OF HE APPELLANT COMPANY. THEREFO RE, THESE INVESTMENTS WERE TREATED TO BE R AND ADDITION TO TH AT EXTENT WAS DELETED BY LD. CLT(A). DURING THE PRESENT ASSESSMENT PROCEEDINGS VIDE QUESTIONNAIRE DATED 24.8.2008, ASSESSEE WAS ASKED T O FILE COPY OF BANK STATEMENT OF EACH PERSON SHOWING DEBIT ENTR Y IN BANK FOR DD/CHEQUE/CASH, COPY OF BANK STATEMENT SHOWING THE CREDIT ENTRY. SHRI SATISH MEHTA ATTENDED THE PROCEEDINGS F ROM TIME TO TIME BUT DID NOT FILE HIS OWN BANK STATEMENT. IN FA CT ASSESSEE MERELY SUBMITTED THAT WE ARE NOT IN POSSESSION OF ANY PAPER FOR A.Y 1999-2000. ASSESSEE FURTHER STATED THAT IT HAS NO EMPOWERMENT TO SEEK DETAILS SUCH AS HOSE INDICATED BY THE ASSESSING OFFICER (PHONE BID/ELECTRICITY BILL/VOTER ID CARD ETC.) NOR WAS IT REQUIRED TO COLLECT OR MAINTAIN THESE BY PREVALENT LAW WHEN THE SHARE CAPITAL WAS RAISED IN THE NINETIES. SHRI SATISH MEHTA WHO ATTENDED THE PROCEEDINGS FROM TIME TO TIM E COULD HAVE FILED THE RELEVANT PAPER WITH RESPECT TO ADDIT ION OF RS.34.89 LAKH MADE BY HIM DURING THE RELEVANT YEAR, BUT HE CHOSE NOT TO DO SO. IN CASE OF SHRI H MEHTA ASSESSE E DID NOT PROVIDE HIS CURRENT ADDRESS AS SOUGHT VIDE THE QUES TIONNAIRE DATED 24.8.2008. HENCE NOTICE U/S 133(6) OR SUMMONS U/S 131 COULD NOT BE ISSUED UND NO INVESTIGATION REGARDING THE GENUINITY OF THE CLAIM OF THE ASSESSEE COULD BE MADE.. IN THE ABSENCE OF THESE, GENUINENESS OF THESE INVESTMENTS IS NOT PROV ED AND ADDITION TO THAT EXTENT IS MADE. (2) MR A SARIN (ADDITION DURING THE YEAR RS. 25.47 LAKHS) MR. N SARIN (ADDITION DURING THE YEAR RS. 12.50 LA KHS) AND MR. D. SARIN (ADDITION DURING THE YEAR RS. 2.50 LAKHS) IN THE CASES OF THESE PERSONS ALSO, CONFIRMATIONS A LONG WITH COMPLETE POSTAL ADDRESS AND PANS HAVE BEEN FIL ED. THEREFORE LD. CIT(A) ACCEPTED THE EXPLANATION OF TH E ASSESSEE WITH REGARD TO INVESTMENT BY THESE PERSONS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE QUESTIONNAIRE DATED 24.8.2008 ASSESSEE WAS REQUIRED TO PROVIDE THE CURRENT ADDRES S, COPY OF BANK ACCOUNT OF EACH PERSONS ETC. HOWEVER ASSESSEE SUBMITTED THAT IT HAS NO EMPOWERMENT TO SEEK DETAILS SUCH AS THOSE INDICATED BY THE ASSESSING OFFICER (PHONE BILL/ ELE CTRICITY BILL/VOTER ID CARD ETC) NOR WAS IT REQUIRED TO COLL ECT OR MAINTAIN THESE BY PREVALENT LAW WHEN THE SHARE CAPITAL WAS R AISED IN THE NINETIES. EVEN IF THE ASSESSEE WAS NOT EMPOWERED TO SEEK THEIR BANK STATEMENT ETC. HE COULD HAVE MADE EFFORT TO SE EK THEIR ADDRESSES, BUT ASSESSEE CHOSE NOT TO DO SO SINCE HE WAS NOT READY TO PUT ANY PERSON TO TEST OF ENQUIRY. ASSESSE E COMPANY HAS A LIMITED NUMBER OF SHAREHOLDERS. VARIOUS TYPES OF INFORMATION/DIVIDEND ETC HAVE TO BE COMMUNICATED/DE LIVERED BY THE COMPANY TO SUCH SHAREHOLDER. ALSO PERSONS WHO H AVE GENUINELY INVESTED THEIR HARD EARNED MONEY IN SHARE S OF THE COMPANY ALWAYS TRACK THE SAME FOR VARIOUS REASONS A ND COMPANY CAN EASILY TRACE THEM IF IT DESIRES SO. HOW EVER ASSESSEE DID NOT PROVIDE THEIR CURRENT ADDRESS AS S OUGHT VIDE THE QUESTIONNAIRE DATED 24.8.2008. HENCE NOTICE U/S 133 (6) OR SUMMONS U/S 131 COULD NOT BE ISSUED AND NO INVESTIG ATION REGARDING THE GENUINITY OF THE CLAIM OF THE ASSESSE E COULD BE MADE. IN HE ABSENCE OF THESE, GENUINENESS OF THESE INVESTMENTS IS NOT PROVED AND ADDITION TO THAT EXTENT IS MADE. (3) K.A.KHAN/ Y.A. KHAN (ADDITION DURING THE YEAR R S. 8.25 JAKHS), RITU DALMIA (ADDITION DURING THE YEAR RS. 3 LAKHS), R. MARWAHA (ADDITION DURING THE YEAR RS. 5 LAKHS), A. VAGHANI (ADDITION DURING THE YEAR RS. 4. 35 LAKHS) AND A.KHURANA (ADDITION DURING THE YEAR RS. 5 LAKHS) THE APPELLANT COMPANY HAS FAILED TO FILE CONFIRMATI ONS IN RESPECT OF THESE PERSONS. INSTEAD OF THEIR POSTAL A DDRESSES, DETAILS OF THE CHEQUES THROUGH WHICH THE AMOUNTS HA VE BEEN RECEIVED AND COPY OF THE BANK STATEMENT OF THE APPE LLANT COMPANY SHOWING THE RECEIPT OF THESE AMOUNTS HAVE BEEN FILED. FURTHER IT IS STATED THAT THE APPELLANT COMPANY HA S FILED A SUIT IN THE COURT AGAINST THESE PERSONS FOR RENDITION OF A CCOUNTS. LD. CIT(A) HAS HELD THAT THE ASSESSEE HAS FAILED TO FIL E ANY CONFIRMATORY LETTERS FROM THESE PERSONS EVEN THOUGH IT WAS ALLOWED MORE THAN ADEQUATE OPPORTUNITY TO DO THE SA ME. LD. CIT(A) HELD THAT AO WAS JUSTIFIED IN TREATING THESE AMOUNTS AS UNEXPLAINED INVESTMENTS OF THE APPELLANT COMPANY FURTHER PERUSAL OF THE BANK STATEMENT TILED BEFORE CIT(A) REVEALS THAT THE NARRATION AGAINST THESE DEPOSITS I N THE BANK ACCOUNT OF THE ASSESSEE ARE AS UNDER: NAME AMOUNT NARRATION MENTIONED REMARKS IN THE BANK STATEMENT A.AKHAN/Y.A.KHAN RS. 2,55,000 CD-582 RS. 70,000 CD-71 RS. 1,00,000 CD-582 RS.4,00,000 TRF.C/D-100582 R.DALMIA RS.3,00,000 CD 622 BANK DEPOSIT OF LAK H. REMAINING 5 LAKH STATED TO BE THAT OF SHRI R. MARWAH. R.MARWAHA ALREADY MENTIONED IN REMARKS COLUMN OF R .DALMIA A.KHURANA RS.2,00,000 TRFCD 622 RS.3,00,000 BY CLG/ZN MI/SET HENCE FROM THE DETAILS OF THE BANK ENTRIES, THE SOU RCE OF THESE CREDITS IS NOT EXPLAINED. BANK STATEMENT MERE LY CONVEYS THAT THE MONEY HAS BEEN CREDITED, BUT DOES NOT INDI CATE THE SOURCE OR THE PERSON FROM WHOM THE SUM HAS BEEN REC EIVED. ON THE BASIS OF MERE CREDIT ENTRY, IT CANNOT BE ACCEPT ED AS INTERRED AS TO WHO HAS GIVEN THIS AMOUNT. ASSESSEE HAD FURTH ER STATED THAT THE APPELLANT COMPANY HAS FILED A SUIT IN THE COURT AGAINST THESE PERSONS FOR RENDITION OF ACCOUNTS. HOWEVER AS SESSEE HAS MADE NO EFFORT TO GET THE CASE EXPEDITED. IF ASSESS EE WAS REALLY INTERESTED, IT SHOULD HAVE TAKEN STEPS TO GET THE H EATING IN THE COURT CASE EXPEDITED. IN FACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE ADMITTED THAT HE HAS NOT PURSU ED THE COURT CASE. ASSESSEE FAILED TO FILE ANY CONFIRMATORY LETT ERS FROM THESE PERSONS EVEN THOUGH IT WAS ALLOWED MORE THAN ADEQUA TE OPPORTUNITY BY LD.CIT(A) TO DO THE SAME. EVEN THE P ANS OF THESE PERSONS HAVE NOT BEEN MENTIONED. EVEN DURING THE CURRENT PROCEEDINGS ASSESSEE DID NOT FILE THEIR CURRENT ADD RESSES, THEREFORE NOT NOTICE U/S 133(6) OR SUMMONS U/S 131 COULD BE ISSUED AND NO INVESTIGATION COULD BE CARRIED OUT. H ENCE IT IS EVIDENT THAT THE ASSESSEE WAS NOT ABLE TO PROVE THE GENUINITY OF HIS CLAIM. THEREFORE THESE AMOUNTS ARE TREATED AS U NEXPLAINED INVESTMENTS OF THE ASSESSEE. (4) R. BEHL (ADDITION DURING THE YEAR RS. 2.20 LAK HS), K SARKAR (ADDITION DURING THE YEAR RS.2 LAKHS), S. RAJKUNDA (ADDITION DURING THE YEAR RS. 4 LAKHS) AND M.SINGH (ADDITION DURING THE YEAR RS, 2 LAKHS) CONFIRMATIONS ALONG WITH COMPLETE POSTAL ADDRESS I N RESPECT OF ALL THESE PERSONS HAVE BEEN FILED BY TH E ASSESSEEE BEFORE LD. CIT(A). LD. CIT(A) HELD THAT THE IDENTIT Y OF THESE PERSONS STANDS ESTABLISHED AND THEY ACCEPT TO HAVE MADE THESE INVESTMENTS IN THE SHARES OF THE APPELLANT COMPANY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE QUESTIONNAIRE DATED 24.8.2008 ASSESSEE WAS REQUIRED TO PROVIDE THE CURR ENT ADDRESS, COPY OF BANK ACCOUNT OF EACH PERSONS ETC. HOWEVER A SSESSEE SUBMITTED THAT IT HAS NO EMPOWERMENT TO SEEK DETAIL S SUCH AS THOSE INDICATED BY THE ASSESSING OFFICER (PHONE BUL L ELECTRICITY BILL/ VOTER ID CARD ETC) NOR WAS IT REQUIRED TO COL LECT OR MAINTAIN THESE BY PREVALENT LAW WHEN THE SHARE CAPITAL WAS R AISED IN THE NINETIES. EVEN IF THE ASSESSEE WAS NOT EMPOWERED T O SEEK THEIR BANK STATEMENT ETC HE COULD HAVE MADE EFFORT TO SEE K THEIR ADDRESSES, BUT ASSESSEE CHOSE NOT TO DO SO SINCE HE WAS NOT READY TO PUT ANY PERSON TO TEST OF ENQUIRY. ASSESSE E COMPANY HAS A LIMITED NUMBER OF SHAREHOLDERS. VARIOUS TYPES OF INFORMATION/ DIVIDEND ETC HAVE TO BE COMMUNICATED/ DELIVERED BY THE COMPANY TO SUCH SHAREHOLDER. ALSO PERSONS WH O HAVE GENUINELY INVESTED THEIR HARD EARNED MONEY IN SHARE S OF THE COMPANY ALWAYS TRACK THE SAME FOR VARIOUS REASONS A ND COMPANY CAN EASILY TRACE THEM IF IT DESIRES SO. HOW EVER ASSESSEE DID NOT PROVIDE THEIR CURRENT ADDRESS AS S OUGHT VIDE THE QUESTIONNAIRE DATED 24.8.2008. HENCE NOTICE U/S 133(6) OR SUMMONS U/S 131 COULD NOT BE ISSUED AND NO INVESTIG ATION REGARDING THE GENUINITY OF THE CLAIM OF THE ASSESSE E COULD BE MADE. IN THE ABSENCE OF THESE, GENUINENESS OF THESE INVESTMENTS IS NOT PROVED AND ADDITION TO THAT EXTENT IS MADE. (5) SH. S. KOCHAR (ADDITION DURING THE YEAR RS. 2 LAKHS), SH. R. JERATH (ADDITION DURING THE YEAR RS. 10 LAKHS). V. TANGRI (ADDITION DURING THE YEAR RS. 2 LAKHS) AND J. AGGARWAL (ADDITION DURING THE YEAR RS. 7 LAKHS) NO CONFIRMATION IN RESPECT OF THESE SHAREHOLDERS HA S BEEN FILED BY THE APPELLANT COMPANY. THEIR PANS HAVE ALSO NOT BEEN MENTIONED. IT IS CLAIMED THAT THESE PERSONS ARE NOT EXIGIBLE T O TAX IN INDIA AS THEY ARE NON RESIDENTS. LD. CIT(A) HELD THAT THE EXPLANA TION OF THE APPELLANT COMPANY CANNOT BE ACCEPTED BECAUSE OF THE ABSENCE OF CONFIRMATIONS AND THE PANS, IT CANNOT BE SAID THAT THEIR IDENTITY HAS BEEN PROVED. HENCE IT IS EVIDENT THAT THE ASSESSEE WAS NOT ABLE TO PROVE THE GENUINITY OF HIS CLAIM. THEREFORE THE THE SE AMOUNTS ARE TREATED AS UNEXPLAINED INVESTMENTS OF THE ASSESSEE. (6) R. DEHMUBED (ADDITION DURING THE YEAR RS. 2,91.000/- LAKHS) SH. R. DEHMUBED IS STATED TO BE RESIDING OVERSEAS. HE OPERATES ON A U.S. GREEN CARD. BEFORE LD. CIT(A), A SSESSEE HAD FILED A COPY OF E-MAIL MASSAGE RECEIVED FROM HI M WHEREBY HE HAS CONFIRMED TO HAVE PAID THE ABOVE MENTIONED AMOUNT FOR THE PURCHASE OF SHARES OF THE ASSESSEE IN THE YEAR 1998-99. HE HAS ALSO STATED THAT HE IS NOT REQUIRED TO FILE ANY TAX RETURNS IN INDIA BECAUSE HE IS ON A GREEN CARD. FILING OF E-MAIL CONFIRMATION IS NOT THE CORRECT M ETHOD OF FILING CONFIRMATION AS ANY PERSON CAN CREATE A E -MAIL IDENTITY. FURTHER NO EVIDENCE REGARDING HIS GREEN CARD STATU S HAS BEEN FILED. HENCE IDENTITY OF THE PERSON IS NOT PROVED. THEREFORE THESE AMOUNTS ARE TREATED AS UNEXPLAINED INVESTMENT S OF THE (7) V. MEHRA (ADDITION DURING THE YEAR RS. 2,91,00 0/- IAKHS) NO INFORMATION / CONFIRMATION WHAT SO EVER HAS BEEN FILED IN RESPECT OF THIS PERSON. HENCE IT IS EVIDEN T THAT THE ASSESSEE WAS NOT ABLE TO PROVE THE GENUINITY OF HIS CLAIM. THEREFORE THE THESE AMOUNTS ARE TREATED AS UNEXPLAI NED INVESTMENTS OF THE ASSESSEE. KEEPING IN VIEW OF THE ABOVE, ADDITION OF RS.1 .43 IS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARE CAPITAL FOR WHICH PENALTY PROCEEDINGS U/S 271(1)(C) ARE ATTRACT ED. ADDITION OF RS. 1,43,37,219/-. 2.5. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL, WH ERE CIT(A) CONFIRMED THE ACTION OF AO BY FOLLOWING OBSERVATIONS: 5. THE ISSUE HAS BEEN CONSIDERED. FACTS ON RECORD SHOW THAT THE HONBLE ITAT HAS SET ASIDE THE ORDER OF CIT(A) AND RESTORED THE MATTER TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE EVIDENCE ADDUCED BY THE ASSESSEE BEFORE THE CIT((A) AND TO TAKE DECISION AFRESH IN ACCORDANCE W ITH LAW AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. RECORD SHOWS THAT THE AO, IN COMPLIANCE TO THE DIRE CTIONS OF THE HONBLE ITAT,. ISSUED STATUTORY NOTICES U/S 143 (2) & 142(1) ALONG WITH A QUERY LETTER DATED 24-08-2008 FIXING T HE CASE FOR 22-09-2008 ON WHICH DATE NO COMPLIANCE WAS MADE. THEREAFTER ALSO THE AO HAD ALLOWED THE ASSESSEE FUR THER OPPORTUNITIES TO COMPLY WITH THE QUERIES RAISED VID E LETTER DATED 24-8-2008. THE AO HAS BROUGHT ON RECORD THAT IN SPI TE OF OPPORTUNITIES PROVIDED, THE ASSESSEE FAILED TO PROV IDE THE CURRENT ADDRESSES OF PERSONS FROM WHOM THE SHARE AP PLICATION MONEY AMOUNTING TO RS. 1,43,37,219/- WAS STATED TO HAVE BEEN RECEIVED. THE AO HAS STATED THAT SINCE THE ASSESSEE DID NOT PROVIDE THE CURRENT ADDRESS OF THESE PERSONS/ PARTI ES AS REQUIRED VIDE QUERY LETTER DATED 24-8-2008, NO NOTICE U/S 13 3(6) OR SUMMONS U/S 131 COULD BE ISSUED TO THOSE PERSONS AN D HENCE NO INVESTIGATION REGARDING THE GENUINENESS OF THE CLAI M OF THE ASSESSEE COULD BE MADE. THE AO HAS FURTHER BROUGHT ON RECORD THAT IN FEW CASES EVEN THE CONFIRMATORY LETTERS HAS NOT BEEN FURNISHED. ALL THESE FACTS CLEARLY SHOW THAT DURING RE- ASSESSMENT PROCEEDINGS U/S 143(3)/254, IN SPITE OF SPECIFIC REQUIREMENT, THE ASSESSEE DID NOT PROVIDE THE AO CU RRENT ADDRESSES OF THE PERSONS FROM WHOM THE SHARE APPLIC ATION MONEY AMOUNTING TO RS. 1,43,37,219/- WAS CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE, WHICH PREVENTED THE AO IN MAKING ENQUIRIES FROM THESE PERSONS REGARDING THE G ENUINENESS OF ASSESSEES CLAIM. THUS, ADMITTEDLY, THE AO HAD N O OPTION BUT TO TREAT THE SUM OF RS. 1,43,37,219/- AS UNEXPLAINE D INVESTMENT. EVEN DURING APPELLATE PROCEEDINGS THE DIRECTOR OF T HE ASSESSEE COMPANY WHO ATTENDED BEFORE ME COULD NOT FURNISH AN Y COGENT MATERIAL/ EXPLANATION TO CONTROVERT THE FINDINGS GI VEN BY THE AO IN THE ASSESSMENT ORDER. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS HELD THAT THE AO W AS JUSTIFIED IN MAKING ADDITION OF RS. 1,43,37,219/- AS UNEXPLAINED INVESTMENT. THE ADDITION SO MADE IS, THEREFORE, HER EBY CONFIRMED. 3. AGGRIEVED, ASSESSEE IS BEFORE US. LEARNED COUNSE L FOR THE ASSESSEE CONTENDS THAT : (I) ITAT HAD SET ASIDE THIS CASE WITH CLEAR DIRECTION TO CONSIDER THE EVIDENCE ADDUCED BY THE ASSESSEE BEFORE CIT(A). THE RE ARE REASONS FOR THIS DIRECTIONS INASMUCH AS THAT THE OR IGINAL ASSESSMENT WAS FRAMED EX PARTE U/S 144, THEREFORE, THE ASSESSE E WAS UNDER COMPULSION TO FILE ADDITIONAL EVIDENCE BEFORE THE C IT(A). ADDITIONAL EVIDENCE WAS DULY FORWARDED TO AO FOR RE MAND REPORT. AO OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE AND ALTERNATIVELY CLAIMED THAT IN CASE EVIDENCE WAS ADM ITTED, AO SHOULD BE GIVEN AN OPPORTUNITY TO MAKE FURTHER ENQU IRIES. AO SHOULD HAVE EXAMINED THE EVIDENCE AS THE PURPOSE OF REMANDING THE PAPERS WAS TO EXAMINE AND MAKE NECESSARY ENQUIR IES AND SUBMIT A REMAND REPORT. INSTEAD, AO RETAINED VOLTE- FACE AND ONLY OBJECTED TO THE ADMISSION OF EVIDENCED AND WITHOUT CARRYING FURTHER ENQUIRIES ISSUED A CAVEAT THAT IN CASE MATE RIAL IS ADMITTED HE MAY BE GIVEN FURTHER TIME TO ENQUIRY. CIT(A) IS A SUPERIOR AUTHORITY AND APART FROM DECIDING THE APPEAL, HAS INDEPENDENT POWERS OF FURTHER INQUIRY AND ENHANCING THE ASSESSM ENT ALSO. AO HAS HIMSELF OBSERVED THAT SOME DOCUMENTS WERE REQUE STED BY CIT(A), IMPLYING THEREBY THAT CIT(A) INVOKED HIS PO WERS OF INQUIRY. CIT(A) DECIDED THE ISSUE ABOUT ADMISSION O F ADDITIONAL EVIDENCE AND REJECTED THE AOS ALTERNATIVE REQUEST INASMUCH IT WAS AO FAILED TO CARRY THE NECESSARY INQUIRIES FOR SUB MITTING THE REMAND REPORT. A LOWER FUNCTIONARY CANNOT ASK THE S UPERIOR APPELLATE FORUM TO DECIDE ONE ISSUE FIRST AND THEN GIVE FURTHER TIME FOR ANOTHER ISSUE AS IT WILL RESULT INTO WASTE OF T IME AND DELAYING THE JUSTICE. CIT(A) THEREAFTER PASSED AN ORDER ON M ERITS. ITAT IN THIS BACKGROUND ONLY IN THE INTEREST OF NATURAL JUS TICE SET ASIDE THE MATTER BACK TO AO WITH SPECIFIC DIRECTIONS TO EXAMI NE THE MATERIAL ADDUCED BEFORE CIT(A) WHICH WAS IN POSSESSION OF AO ALSO FOR REMAND REPORT. LEARNED COUNSEL, THEREFORE, CONTENDS THAT THE SCOPE OF ITAT DIRECTION WAS CLEAR THAT AO SHOULD CAR RY OUT FURTHER INQUIRIES ON THE BASIS OF WHICH REVENUE ACCEPTED TH E ORDER OF ITAT SETTING ASIDE THE MATTER BACK TO THE FILE OF AO. (II) LEARNED COUNSEL VEHEMENTLY ARGUES THAT IN THE MEAN WHILE BY THE TIME FRESH PROCEEDINGS COULD BE TAKEN UP A LONG PER IOD OF ABOUT 8 YEARS ELAPSED. AO INSTEAD OF CARRYING OUT THE DIREC TIONS OF ITAT INSISTED FOR MORE EVIDENCE FROM THE ASSESSEE, WHIC H WAS BEYOND THE DIRECTIONS OF THE ITAT ORDER. ASSESSEE BROUGHT THIS FACT TO THE NOTICE OF AO AND REQUESTED THAT THE MATTER BEING O LD, ASSESSEE WAS NOT IN A POSITION TO SUPPLY FURTHER DOCUMENTS. AO H AS HIMSELF RECORDED IN HIS ORDER THAT ASSESSEE HAD FILED A LIS T OF DOCUMENTS BEFORE CIT(A). HAVING ACCEPTED THIS LIST ON RECORD, IT WAS NOT FAIR ON HIS PART TO OVERLOOK THE SAME AND MAKE THE ADDIT ION ON THE REASON THAT ASSESSEE DID NOT FILE FRESH EVIDENCE. L EARNED COUNSEL, THEREFORE, CONTENDS THAT AOS ORDER IN THIS BEHALF IS BEYOND THE DIRECTION OF SETTING ASIDE BY ITAT IN THE PECULIAR FACTS OF THIS CASE. ANY ADDITION MADE ON THE REASONING OF NON-PRODUCTIO N OF NEW EVIDENCE DESERVES TO BE QUASHED. (III) COMING TO CIT(A)S ORDER LEARNED COUNSEL CONTENDS T HAT IN EARLIER YEAR CIT(A) HAD GIVEN SUBSTANTIAL RELIEF AND THIS T IME AO NOT ONLY OVERLOOKED THE OBSERVATIONS OF EARLIER CIT(A) IN GI VING THE SUBSTANTIAL RELIEF, HOWEVER, DISALLOWED THE ENTIRE AMOUNT. ASSESSEE GAVE PROPER REASONS BEFORE CIT(A) PLEADING THAT THE AO COULD NOT HAVE INSISTED FOR FRESH DOCUMENTS AFTER ELAPSE OF 8 YEARS AND SHOULD HAVE CONFINED HIS OBSERVATIONS AND FINDINGS TO THE MATERIAL AVAILABLE ON RECORD AS DIRECTED BY ITAT. CIT(A) HA S NEITHER CONSIDERED THIS VITAL ASPECT NOR CONSIDERED THE MER ITS OF THE OTHER ARGUMENTS AND SUMMARILY UPHELD THE ORDER OF AO BY M ERELY REPRODUCING HIS OBSERVATIONS. LEARNED COUNSEL THEN CONTENDS THAT APROPOS EACH AND EVERY SHAREHOLDER, ASSESSEE FILED SUFFICIENT DOCUMENTSIN ORIGINAL PROCEEDINGS TO ESTABLISH THEI R IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF APPLICANTS. ASSESSEE IS A TECHNO MANAGED COMPANY AND THE MD HAS A VERY ILLUSTRIOUS RECORD WHO CAME IN INDIA TO START THE BUSINESS OF TELECOM CONSULTANCY AND TECHNOLOGY PRODUCTS. THE SH AREHOLDERS ARE PROMINENT PROFESSIONALS HAVING SOUND CREDENTIA LS. THERE IS NO WHISPER IN THE ORDERS OF THE ENTIRE PROCEEDINGS THA T ASSESSEE HAD ANY RELATION WHAT-SO-EVER WITH THE ACCOMMODATION EN TRIES. AOS FINDINGS ARE TOTALLY BASELESS INASMUCH AS ALL THE O BSERVATIONS MADE ARE CONTRARY TO RECORD. THE NAME OF SHARE-SUBSCRIBE RS AOS VIEW AND EVIDENCE ON RECORD I.E. PAPER BOOK PLEADED TO B E AS UNDER: SUBSCRIBER AMOUNT (LAKHS) EVIDENCE AOS VIEW 1. SATISH MEHTA 34.89 PARTY IS FOUNDER OF COMPANY.(PB 124) (1) THIS PARTY WAS BEFORE THE AO HERSELF.(2) PB-126- CONFIRMATION WITH PAN AND ADDRESS FILED WITH LETTER DATED 05-12-02.(3) PB A-7-CIT(A) HAS DISCUSSED THIS ISSUE AND HELD THAT IDENTITY STOOD PROVED.(4) PB 67 R.W. PB 60-MODE OF PAYMENT CONVEYED.(5) PB 81-82-COPY OF SHARE APPLICATION REGISTER.(6) PB 83-DETAILS OF SHARES ISSUED AGAINST INDIVIDUAL PAYMENTS, NOTICES CONFIRMATION FROM RECORD, THAT IT HAS COMPLETE ADDRESS AND PAN. ASKS FOR BANK STATEMENT, PHONE BILL, VOTER ID. THIS PARTY APPEARED BEFORE THE AO HIMSELF. TRANSFERS, ETC. (7) PB 115 R.W. 114-SHARE ALLOTMENT FORM PROMOTER QUOTA. 2. H. MEHTA 4 PARTY IS A DIRECTOR.(PB 124) (1) PB-129- CONFIRMATION WITH PAN AND ADDRESS FILED WITH LETTER DATED 05-12-02. (2) PB A- 7-CIT(A) DISCUSSED THIS ISSUE AND HELD THAT IDENTITY STOOD PROVED. (3) PB66 R.W. PB 60- MODE OF PAYMENT CONVEYED. (4) PB 81-82- COPY OF SHARE APPLICATION REGISTER.(5) PB 93- DETAILS OF SHARE ISSUED AGAINST INDIVIDUAL PAYMENTS, TRANSFERS, ETC. (6) PB 118 R.W. 114- SHARE ALLOTMENT FORM PROMOTER QUOTA. NOTICES CONFIRMATION FROM RECORD, THAT IT HAS COMPLETE ADDRESS AND PAN. ASKS FOR BANK STATEMENT, PHONE BILL, VOTER ID. STATES THAT CURRENT ADDRESS NOT PROVIDED BY ASSESSEE, SO SUMMONS COULD NOT BE ISSUED. 3. A. SARIN. 25.47 INVESTMENT THROUGH ANGEL INVESTMENT GROUP. (PB131) NOW DIRECTOR (PB 19) (1) PB- 133- CONFIRMATION WITH PAN AND ADDRESS FILED WITH LETTER DATED 05-12-02. (2) PBA-7- CIT(A) DISCUSSED THIS ISSUE AND HELD THAT IDENTITY STOOD PROVED. (3) PB66 R.W. PB 60-MODE OF PAYMENT CONVEYED. (4) PB 81- 82- COPY OF SHARE APPLICATION REGISTER.(5) PB 87- DETAILS OF SHARES ISSUED AGAINST INDIVIDUAL PAYMENTS, TRANSFERS ETC. (6) PB 117 R.W. 114- SHARE ALLOTMENT FORM ANGEL INVESTOR QUOTA. NOTICES CONFIRMATION FROM RECORD, THAT IT HAS COMPLETE ADDRESS AND PAN. ASKS FOR BANK STATEMENT, PHONE BILL, VOTER ID. STATES THAT CURRENT ADDRESS NOT PROVIDED BY ASSESSEE, SO SUMMONS COULD NOT BE ISSUED. 4. N. SARIN 12.5 INVESTMENT THROUGH ANGEL INVESTMENT GROUP. (PB131) (1) PB-136- CONFIRMATION WITH PAN AND ADDRESS FILED WITH LETTER DATED 05-12-02. (2) PBA- 7-CIT(A) DISCUSSED THIS ISSUE AND HELD THAT IDENTITY STOOD PROVED. (3) PB102- DETAILS OF SHARE TRANSFER AS PER ROC RECORD. (4) PB-67 R.W. PB 60- MODE OF PAYMENT CONVEYED. (5) PB 81-82- COPY OF SHARE APPLICATION REGISTER. (6) PB 117 R.W. 114- SHARE ALLOTMENT FORM ANGEL INVESTOR QUOTA. NOTICES CONFIRMATION FROM RECORD, THAT IT HAS COMPLETE ADDRESS AND PAN. ASKS FOR BANK STATEMENT, PHONE BILL, VOTER ID. STATES THAT CURRENT ADDRESS NOT PROVIDED BY ASSESSEE, SO SUMMONS COULD NOT BE ISSUED. 5. D.SARIN 2.5 INVESTMENT THROUGH ANGEL NOTICES CO NFIRMATION INVESTMENT GROUP. (PB131) (1) PB-134- CONFIRMATION WITH PAN AND ADDRESS FILED WITH LETTER DATED 05-12-02. (2) PBA- 7-CIT(A) DISCUSSED THIS ISSUE AND HELD THAT IDENTITY STOOD PROVED. (3) PB-109 DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (4) PB 81-82- COPY OF SHARE APPLICATION REGISTER. (5) PB 117 R.W. 114- SHARE ALLOTMENT FORM ANGEL INVESTOR QUOTA. FROM RECORD, THAT IT HAS COMPLETE ADDRESS AND PAN. ASKS FOR BANK STATEMENT, PHONE BILL, VOTER ID. STATES THAT CURRENT ADDRESS NOT PROVIDED BY ASSESSEE, SO SUMMONS COULD NOT BE ISSUED. 6. K.A. KHAN 8.25 INVESTMENT THROUGH BROKER AS PER WAIVER OF PROMOTER QUOTA (PB 139) (1) PB-2-PAN GIVEN VIDE LETTER DATED 15-09-03, ALONG WITH CHEQUE DETAILS. (2) PB-5- COPY OF SUIT FILED. SAME ADDRESS @ PB-8, COUNSEL APPEARS FOR PARTY. (3) PB-39-ORDER IN SUIT PB 45, 46, 47 RELEVANT AND TELLING (4) AFFIDAVIT OF K.A. KHAN IN SUIT (5) PB 67 R.W.. PB 60-MODE OF PAYMENT CONVEYED. (6) PB-81-82 COPY OF SHARE APPLICATION REGISTER (7) PB 91- DETAILS OF SHARES ISSUED AGAINST INDIVIDUAL PAYMENTS, TRANSFERS ETC. (8) PB 139- CHEQUE DETAILS. (9) PB 140-143- COPY OF OUR BANK STATEMENT. POSTAL ADDRESS, CHEQUE DETAILS, AND COPY OF ASSESSEES BANK STATEMENT FILED. NO CONFIRMATION OR PAN GIVEN. SINCE CURRENT ADDRESS NOT GIVEN, SUMMONS COULD NOT BE ISSUED. ASSESSEE STATES CASES HAVE BEEN FILED AGAINST PARTY FOR RENDITION OF ACCOUNTS, BUT AO HOLDS THAT THEY HAVE NOT BEEN PURSUED. 7. RITU DALMIA. 3 SHARES ISSUED THROUGH BROKER. (PB-140)(1) PB-2- PAN GIVEN VIDE LETTER DATED 15-09-03, ALONG WITH CHEQUE DETAILS. (2) PB-152- AD SLIP OF LETTER TO PARTY ASKING FOR CONFIRMATION. (3) PB 155- COPY OF LETTER. (4) PB-103- DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (5) PB 81-82- COPY OF SHARE APPLICATION REGISTER. (6) PB-152-153- DETAILS OF CHEQUE RECEIVED THROUGH BROKER WITH OUR BANK STATEMENT. POSTAL ADDRESS, CHEQUE DETAILS, AND COPY OF ASSESSEES BANK STATEMENT FILED. NO CONFIRMATION OR PAN GIVEN. SINCE CURRENT ADDRESS NOT GIVEN, SUMMONS COULD NOT BE ISSUED. ASSESSEE STATES CASES HAVE BEEN FILED AGAINST PARTY FOR RENDITION OF ACCOUNTS, BUT AO HOLDS THAT THEY HAVE NOT BEEN PURSUED. 8. R. MARWAHA 5 INVESTMENT THROUGH BROKER (PB- 152)-(1) PB 104- DETAILS OF SHARE TRANSFER AS PR ROC RECORDS. (2) PB 65 R.W. PB 60- POSTAL ADDRESS, CHEQUE DETAILS, AND COPY OF ASSESSEES BANK STATEMENT FILED. NO SUIT FOR RENDITION OF ACCOUNT HAD BEEN FILED.(3) PB 67 R.W. PB 60- MODE OF PAYMENT CONVEYED. (4) PB 81-82 COPY OF SHARE APPLICATION REGISTER. (5) PB-151- ADDRESS GIVEN. (6) PB-152-153- DETAILS OF CHEQUE RECEIVED THROUGH BROKER WITH OUR BANK STATEMENT. CONFIRMATION OR PAN GIVEN. SINCE CURRENT ADDRESS NOT GIVEN, SUMMONS COULD NOT BE ISSUED. ASSESSEE STATES CASES HAVE BEEN FILED AGAINST PARTY FOR RENDITION OF ACCOUNTS, BUT AO HOLDS THAT THEY HAVE NOT BEEN PURSUED. 9. A. VAGHANI 4.35 INVESTMENT THROUGH BROKER AS PER WAIVER OF PROMOTER QUOTA (PB 146) (1) PB-9- COPY OF SUIT FILED. SAME ADDRESS. @ PB12, COUNSEL APPEARS FOR PARTY.(2) PB-15- ORDER IN VAGHANIS CASE. PB 21, 22, 23 RELEVANT AND TELLING. (3) AJAY VAGHANIS AFFIDAVIT IN THE SUIT. (4) PB 66 R.W. PB 60- MODE OF PAYMENT CONVEYED. (5) PB 81-82- COPY OF SHARE APPLICATION REGISTER. (6) PB 146-148- PAYMENT DETAILS & COPY OF OUR BANK STATEMENT. POSTAL ADDRESS, CHEQUE DETAILS, AND COPY OF ASSESSEES BANK STATEMENT FILED. NO CONFIRMATION OR PAN GIVEN. SINCE CURRENT ADDRESS NOT GIVEN, SUMMONS COULD NOT BE ISSUED. ASSESSEE STATES CASES HAVE BEEN FILED AGAINST PARTY FOR RENDITION OF ACCOUNTS, BUT AO HOLDS THAT THEY HAVE NOT BEEN PURSUED. 10. A. KHURANA 5 INVESTMENT THROUGH BROKER AS PER WAIVER OF PROMOTER QUOTA (PB 158) (1) PB-3- PAN GIVEN VIDE LETTER DATED 15-09-03, ALONG WITH CHEQUE DETAILS. (2) PB-60- PARTY IS IN BALTIMORE, USA (3) PB 106- DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (4) PB 65 R.W. PB 60- SUIT FOR RENDITION OF ACCOUNTS HAD BEEN FILED. (5) PB 66 R.W. PB 60- MODE OF PAYMENT CONVEYED. (6) PB 81- 82- COPY OF SHARE APPLICATION REGISTER. (7) PB 158-160- CHEQUE DETAILS AND COPY OF OUR BANK STATEMENT POSTAL ADDRESS, CHEQUE DETAILS, AND COPY OF ASSESSEES BANK STATEMENT FILED. NO CONFIRMATION OR PAN GIVEN. SINCE CURRENT ADDRESS NOT GIVEN, SUMMONS COULD NOT BE ISSUED. ASSESSEE STATES CASES HAVE BEEN FILED AGAINST PARTY FOR RENDITION OF ACCOUNTS, BUT AO HOLDS THAT THEY HAVE NOT BEEN PURSUED. 11. R. BEHL 4 ALLOTTEE IS COMPANY STAKEHOLDER (PB 175) (1) PB-A-8-CIT(A) NOTICES CONFIRMATION FROM PARTY WITH FULL ADDRESS, AND HOLDS THAT IDENTITY STANDS ESTABLISHED. (2) PB 179- CONFIRMATION WITH ADDRESS. (3) PB 81-82- COPY OF SHARE APPLICATION REGISTER. CONFIRMATION ALONG WITH COMPLETE ADDRESS ON RECORD. FURTHER ASKED TO PROVIDE CURRENT ADDRESS, COPY OF BANK ACCOUNT, VOTER ID, ETC. ASSESSEE AHS NOT EVEN PROVIDED THE CURRENT ADDRESS, SO SUMMONS COULD NOT BE ISSUED. 12. M. KAPOOR 2.2. ALLOTTEE IS COMPANY STAKEHOLDER (PB 175) (1) PB-A-8-CIT(A) NOTICES CONFIRMATION FROM PARTY WITH FULL ADDRESS, AND HOLDS THAT IDENTITY STANDS ESTABLISHED. (2) PB 176- CONFIRMATION WITH ADDRESS.(3) PB 99- DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (4) PB 81-82- COPY OF SHARE APPLICATION REGISTER. CONFIRMATION ALONG WITH COMPLETE ADDRESS ON RECORD. FURTHER ASKED TO PROVIDE CURRENT ADDRESS, COPY OF BANK ACCOUNT, VOTER ID, ETC. ASSESSEE AHS NOT EVEN PROVIDED THE CURRENT ADDRESS, SO SUMMONS COULD NOT BE ISSUED. 13. K. SARKAR 2 ALLOTTEE IS COMPANY STAKEHOLDER (PB 175) (1) PB-A-8-CIT(A) NOTICES CONFIRMATION FROM PARTY WITH FULL ADDRESS, AND HOLDS THAT IDENTITY STANDS ESTABLISHED. (2) THIS PARTY WAS BEFORE AO. (3) PB-177- CONFIRMATION WITH FULL ADDRESS. (4) PB 100- DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (5) PB 81-82- COPY OF SHARE APPLICATION REGISTER. CONFIRMATION ALONG WITH COMPLETE ADDRESS ON RECORD. FURTHER ASKED TO PROVIDE CURRENT ADDRESS, COPY OF BANK ACCOUNT, VOTER ID, ETC. ASSESSEE AHS NOT EVEN PROVIDED THE CURRENT ADDRESS, SO SUMMONS COULD NOT BE ISSUED. 14. S. RAJKUNDRA 4 ALLOTTEE IS COMPANY STAKEHOLDER (PB 175) (1) PB-A-8-CIT(A) NOTICES CONFIRMATION FROM PARTY WITH FULL ADDRESS, AND HOLDS THAT IDENTITY STANDS ESTABLISHED. (2) PB 181- CONFIRMATION WITH FULL ADDRESS. (3) PB 68 R.W. PB 60- MODE OF PAYMENT CONVEYED. (4) PB 81-82- COPY OF SHARE APPLICATION REGISTER. (5) PB 113- DETAILS OF SHARES ISSUED AGAINST INDIVIDUAL PAYMENTS, TRANSFERS, ETC. CONFIRMATION ALONG WITH COMPLETE ADDRESS ON RECORD. FURTHER ASKED TO PROVIDE CURRENT ADDRESS, COPY OF BANK ACCOUNT, VOTER ID, ETC. ASSESSEE AHS NOT EVEN PROVIDED THE CURRENT ADDRESS, SO SUMMONS COULD NOT BE ISSUED. 15. M. SINGH 2 ALLOTTEE IS COMPANY STAKEHOLDER (PB 175) (1) PB-A-8-CIT(A) NOTICES CONFIRMATION FROM PARTY WITH FULL ADDRESS, AND HOLDS THAT IDENTITY STANDS ESTABLISHED. (2) PB 180- CONFIRMATION WITH FULL ADDRESS. (3) PB 105- DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (4) PB 67 R.W. PB 60- MODE OF PAYMENT CONVEYED. (5) PB 81-82- COPY OF SHARE APPLICATION REGISTER. CONFIRMATION ALONG WITH COMPLETE ADDRESS ON RECORD. FURTHER ASKED TO PROVIDE CURRENT ADDRESS, COPY OF BANK ACCOUNT, VOTER ID, ETC. ASSESSEE AHS NOT EVEN PROVIDED THE CURRENT ADDRESS, SO SUMMONS COULD NOT BE ISSUED. 16. S. KOCHAR 2 (1) PB-3-PAN GIVEN VIDE LETTER NO CONFIRMATION FILED, DATED 15-09-03. (2) PB-60- PARTY IS IN PORTLAND, OREGON, USA (3) PB 81-82- COPY OF SHARE APPLICATION REGISTER. (4) PB 111-DETAILS OF SHARE ISSUED AGAINST INDIVIDUAL PAYMENTS, TRANSFERS, ETC. (5) PB 183-LETTER FROM BROKER ASKING FOR TRANSFER OF SHARES. NO PAN. ASSESSEE CLAIMS THEY ARE NRIS AND NOT EXIGIBLE TO TAX IN INDIA. IN ABSENCE OF CONFIRMATION AND PAN, IDENTITY NOT PROVED. 17. R. JERATH 10 (1) PB-3-PAN GIVEN VIDE LETTER DATED 15-09-03.ALONG WITH CHEQUE DETAILS. (2) PB-101- DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (3) PB 81-82- COPY OF SHARE APPLICATION REGISTER. (4) PB 183-LETTER FROM BROKER ASKING FOR TRANSFER OF SHARES. CONFIRMATION ALONG WITH COMPLETE ADDRESS ON RECORD. FURTHER ASKED TO PROVIDE CURRENT ADDRESS, COPY OF BANK ACCOUNT, VOTER ID, ETC. ASSESSEE AHS NOT EVEN PROVIDED THE CURRENT ADDRESS, SO SUMMONS COULD NOT BE ISSUED. 18. V. TANGRI 2 (1) PB-3-PAN GIVEN VIDE LETTER DATED 15-09-03. (2) PB-60- PARTY IS IN OTTAWA, CANADA. (3) PB-96 DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (4) PB 68 R.W. PB 60- MODE OF PAYMENT CONVEYED. (5) PB 81-82- COPY OF SHARE APPLICATION REGISTER. (4) PB 183-LETTER FROM BROKER ASKING FOR TRANSFER OF SHARES. CONFIRMATION ALONG WITH COMPLETE ADDRESS ON RECORD. FURTHER ASKED TO PROVIDE CURRENT ADDRESS, COPY OF BANK ACCOUNT, VOTER ID, ETC. ASSESSEE AHS NOT EVEN PROVIDED THE CURRENT ADDRESS, SO SUMMONS COULD NOT BE ISSUED. 19. J. AGGARWAL 7 (1) PB-3-PAN GIVEN VIDE LETTER DATED 15-09-03.ALONG WITH CHEQUE DETAILS. (2) PB-60- PARTY IS IN MILAN, ITALY. (3) PB-97- DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (4) PB 66 R.W. PB 60- MODE OF PAYMENT CONVEYED. (5) PB 81-82- COPY OF SHARE APPLICATION REGISTER. (6) PB 183- LETTER FROM BROKER ASKING FOR TRANSFER OF SHARES. CONFIRMATION ALONG WITH COMPLETE ADDRESS ON RECORD. FURTHER ASKED TO PROVIDE CURRENT ADDRESS, COPY OF BANK ACCOUNT, VOTER ID, ETC. ASSESSEE AHS NOT EVEN PROVIDED THE CURRENT ADDRESS, SO SUMMONS COULD NOT BE ISSUED. 20. R. DEHMUBED 2.91 (1) PB A-9-CIT(A) NOTICES EVIDENCE AND DIRECTS RELIEF. (2) PB 107- DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (3) PB 81- 82- COPY OF SHARE APPLICATION REGISTER. (4) PB 190- EMAIL CONFIRMATION FROM PARTY. STATED TO BE GREEN CARD HOLDER, RESIDENT IN USA. EMAIL CONFIRMATION AVAILABLE, BUT HELD TO BE WRONG METHOD OF FILING CONFIRMATION. NO EVIDENCE OF GREEN CARD STATUS. IDENTITY NOT PROVED. 21. Y. MEHRA 2.91 (1) PB 90- DETAILS OF SHARE TRANSFER AS PER ROC RECORDS. (2) PB 68 R.W. PB 60- MODE OF PAYMENT CONVEYED. (3) PB 81- 82- COPY OF SHARE APPLICATION REGISTER. NO CONFIRMATION WHATSOEVER FILED. IDENTITY NOT PROVED. 3.1. LEARNED COUNSEL THEREAFTER ADVERTED TO THE ISS UES ABOUT NATURE OF BURDEN ON ASSESSEE WHILE PROVING THE SHARE APPLICAT ION MONEY. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS: (I) HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DWARKADHISH INVESTMENT (P) LTD. IN CM NO. 12293 OF 2010 IN IT A PPEAL NOS. 911 TO 913 OF 20101 DATED 2-8-2010, HOLDING AS UNDER: 7. CONSEQUENTLY, THE DOCTRINE OF MERGER WOULD APPL Y AND THE JUDGMENT OF THE SUPREME COURT IN LOVELY EXPORTS (P) LTD. LTD.S CASE (SUPRA) WOULD COVER THE FIELD WITH REGA RD TO INTERPRETATION OF SECTION 68 OF THE ACT, 1961. 8. IN ANY MATTER, THE ONUS OF PROOF IS NOT A STATIC ONE. THOUGH IN SECTION 68 PROCEEDINGS, THE INITIAL BURDE N OF PROOF LIES ON THE ASSESSEE YET ONCE HE PROVES THE IDENTIT Y OF THE CREDITORS/ SHARE APPLICANTS BY EITHER FURNISHING TH EIR PAN NUMBER OR INCOME TAX ASSESSMENT NUMBER AND SHOWS T HE GENUINENESS OF TRANSACTION BY SHOWING MONEY IN HIS BOOKS EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT OR BY AN Y OTHER MODE, THEN THE ONUS OF PROOF WOULD SHIFT TO THE REV ENUE. JUST BECAUSE THE CREDITORS/ SHARE APPLICANTS COULD NOT B E FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RI GHT TO INVOKE SECTION 68. ONE MUST NOT LOSE SIGHT OF THE FACT THA T IT IS THE REVENUE WHICH HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSON. MOREOVER, IT IS SETTLED LAW THAT THE ASSESS EE NEED NOT TO PROVE THE SOURCE OF SOURCE. 9. WE ALSO FIND THAT IN THE CASE OF RESPONDENT-ASSE SSEE ITSELF, A DIVISION BENCH OF THIS COURT IN CIT V. DW ARIKADHISH INVESTMENT (P) LTD. (2008) 167 TAXMAN 321 HAD DEALT WITH A SIMILAR ISSUE WITH REGARD TO THE ASSESSMENT YEAR 19 97-98. THE RELEVANT PORTION OF THE ORDER PASSED BY THE DIVISIO N BENCH IN THE SAID JUDGMENT IS REPRODUCED HEREINBELOW:- 3. THE ASSESSING OFFICER REQUIRED THE ASSESSEES TO FURNISH DETAILS AND DOCUMENTS. THE ASSESSEES PRODUC ED COPIES OF SALE AND PURCHASE BILLS OF THE SHARE BROK ERS THROUGH WHOM THE TRANSACTIONS TOOK PLACE AND PHOTOCOPIES OF CONFIRMATIONS OF PERSONS WHO HAD CONTRIBUTED THE FRESH SHARE APPLICATION MONEY. THE ASSESSEE FURNISHED THE PAN(GIR) NUMBERS OF THE APPLICANTS, THE DETAILS OF THE CHEQUE NUMBERS AND D ATES. THE ASSESSEES CONTENDED THAT LETTERS SENT TO THE SHAREHOLDERS HAD NOT BEEN RESPONDED TO. 4. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH BANK STATEMENT TO SUBSTANTIATE THE MONEY AVAILABILITY WITH THE ASSESSEE AND ALSO TO PROVE TH E GENUINENESS OF THE TRANSACTIONS. THIS NOT HAVING BE EN DONE, THE ASSESSING OFFICER GOT ENQUIRIES MADE THRO UGH AN INCOME-TAX INSPECTOR WHO FOUND THAT NONE OF THE APPLICANTS WERE FOUND TO EXIST AT THE ADDRESS GIVEN IN THE CONFIRMATIONS. HOWEVER, THE REPORT OF THE INCOME-TA X INSPECTOR WAS FURNISHED TO THE ASSESSEES ON 22 ND FEBRUARY, 2000 AND THE ASSESSMENT ORDER WAS PASSED ON THE VERY NEXT DAY, THAT IS, 23 RD FEBRUARY, 2000 GIVING THE ASSESSEES NO TIME TO RESPOND. 5. BEFORE THE CIT(A) THE ASSESSEES FURNISHED ADDITIONAL EVIDENCE, COPIES OF WHICH WERE SENT BY T HE CIT(A) TO THE ASSESSING OFFICER FOR COMMENTS. DESPI TE REMINDERS, NO RESPONSE WAS RECEIVED FROM THE ASSESS ING OFFICER BY THE CIT(A) ON THE ADDITIONAL EVIDENCE. THE CIT(A) THEN ADMITTED THE ADDITIONAL EVIDENCE. AFTER EXAMINING THE ENTIRE RECORD, THE CIT(A) DELETED THE ADDITION ON ACCOUNT OF THE UNEXPLAINED SHARE APPLIC ATION MONEY FOR .. 6. IN THE APPEAL BY THE REVENUE, THE TRIBUNAL FOUND THAT THE FACTS OF THE CASE WERE NO DIFFERENT FROM T HOSE IN THE CASE OF THE GROUP COMPANY OF THE PRESENT ASSESS EE NAMELY M/S. DWARKADHISH FINANCIAL SERVICES. IN THE SAID CASE THE TRIBUNAL HAD DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY. THE SAID DECISION WAS UPHELD BY THIS COURT IN ITS ORDER IN CIT V. DWEARKADHISH FINANCIAL SERVICES (2005) 148 TAXMAN 54. 7. THAT APART, THE TRIBUNAL AGAIN EXAMINED THE DOCUMENTS GIVING THE DETAILS OF EACH OF THE APPLICA NTS. IT NOTED THAT THE ABOVE DOCUMENTS WERE AVAILABLE ON T HE FILE OF THE ASSESSING OFFICER? ACCORDINGLY IT DISMI SSED THE REVENUES APPEALS. 8. LEARNED COUNSEL FOR THE REVENUE SOUGHT TO DISTINGUISH THIS COURTS DECISION IN THE CASE OF TH E GROUP COMPANY OF THE ASSESSEES, ON THE GROUND THAT THE FA CTS THERE WERE DIFFERENT. HOWEVER, WE FIND THAT THE FIN DINGS OF THE CIT(A) AS EXTRACTED HEREINABOVE ARE SUFFICIE NT TO SHOW THAT THE ADDITIONS MADE BY THE ASSESSING OFFIC ER WERE NOT JUSTIFIED. THE REASONING AND CONCLUSIONS A RRIVED AT CONCURRENTLY BY THE CIT(A) AND THE TRIBUNAL SUFF ER FROM NO PERVERSITY AND ARE CONSISTENT WITH THE LAW AS EXPLAINED BY THIS COURT IN CIT V. DIVINE LEASING & FINANCE LTD. [IT APPEAL NO. 53/2005 DECIDED ON 16-1 1- 2006, REPORTED IN [2007] 207 CTR (DELHI)38] AND IN PARTICULAR PARA 16 WHICH READS THUS: IN THIS ANALYSIS, A DISTILLATION OF THE PRECEDENT YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN THE CONTEXT OF SECTION 68 OF THE INCOME-TAX ACT. THE ASSESSEE HAS TO PRIMA FACIE PROVE 91) THE IDENTITY OF THE CREDITOR/ SUBSCRIBER; (2) THE GENUINENESS OF THE TRANSACTION, NAMELY, WHETHER IT HAS BEEN TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/ SUBSCRIBER; (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/ SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONG WITH THE COPIES OF THE SHAREHOLDERS REGISTER, SHARES APPLICATION FORMS, SHARE TRANSFER REGISTER ETC., IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSEE; (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/ SUB- SCRIBER FAILS OR NEGLECTS TO RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR/ SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE NOR SHOULD THE ASSESSING OFFICER TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT, WITHOUT MORE, AGAINST THE ASSESSEE; (7) THE ASSESSING OFFICER IS DUTY BOUND TO INVESTIGATING THE CREDITWORTHINESS OF THE CREDITOR/ SUBSCRIBER THE GENUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIATION. 9. WE ARE OF THE VIEW THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THESE APPEALS. ACCORDINGLY, THESE APP EALS ARE DISMISSED. 10. WE ARE ALSO INFORMED THAT A SPECIAL LEAVE PETIT ION AGAINST THE AFORESAID DIVISION BENCH JUDGMENT IN TH E CASE OF THE RESPONDENT-ASSESSEE HAS BEEN DISMISSED BY THE S UPREME COURT. ACCORDINGLY, WE ARE OF THE OPINION THAT NO Q UESTION OF LAW ARISES IN THE PRESENT CASES AS THE MATTER IS FU LLY COVERED BY THE JUDGMENT OF THE SUPREME COURT IN LOVELY EXPORTS (P) LTD.S CASE (SUPRA) AS WELL AS DIVISION BENCH JUDGMENT OF THIS COURT IN THE CASE OF THE RESPONDENT-ASSESSEE ITSELF. 11. CONSEQUENTLY, WE ARE OF THE VIEW THAT THE PRESE NT APPEALS AMOUNT TO RELITIGATION. THE SUPREME COURT IN K.K. M ODI V. K.N. MODI [1998] 3 SCC 573 HAS HELD, IT IS AN ABUS E OF THE PROCESS OF T HE COURT AND CONTRARY TO JUSTICE AND P UBLIC POLICY FOR A PARTY TO RELITIGATE THE SAME ISSUE WHICH HAS ALREADY BEEN TRIED AND DECIDED EARLIER AGAINST HIM. THE REAGITAT ION MAY OR MAY NOT BE BARRED AS RES JUDICATA. BUT IF THE SAME ISSUE IS SOUGHT TO BE REAGITATED, IT ALSO AMOUNTS TO AN ABUS E OF THE PROCESS OF THE COURT.. 12. THOUGH WE ARE INITIALLY INCLINED TO IMPOSE COST S YET WE ARE OF THE OPINION THAT ENDS OF JUSTICE WOULD BE ME T BY GIVING A DIRECTION TO THE REVENUE TO BE MORE CAREFUL BEFORE FILING APPEALS IN A ROUTINE MANNER. IN OUR VIEW, APPEAL SHOULD NOT BE FILED IN MATTERS WHERE EITHER NO QUESTION OF LAW ARISES OR T HE ISSUE OF LAW IS SETTLED ONE. WE GIVE THIS DIRECTION BECAUSE THE JUDICIAL CAPITAL IN TERMS OF MANPOWER AND RESOURCES IS EXTR EMELY LIMITED. 13. REGISTRY IS DIRECTED TO COMMUNICATE COPIES OF T HIS ORDER TO ALL THE CHIEF COMMISSIONERS OF INCOME-TAX IN DEL HI FOR NECESSARY ACTION. WITH THE AFORESAID DIRECTION, THE PRESENT APPEALS ARE DISMISSED IN LIMINE BUT WITHOUT ANY ORD ER AS TO COSTS. 3.2. LEARNED COUNSEL CONTENDS THAT LOWER AUTHORITIE S HAVE TRIED TO IMPOSE AN IMPOSSIBLE BURDEN ON THE ASSESSEE TO RE-ESTABLIS H ITS CASE AFTER A GAP OF 8 YEARS. THE ONUS CAST ON THE ASSESSEE HAS BEEN EXPLA INED BY HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD . [2008] 299 ITR 268 (SC) BY HOLDING THAT IF THE ASSESSEE FURNISHES IDEN TITY OF THE SHARE-HOLDERS THEN AMOUNT CANNOT BE ADDED AS UNEXPLAINED IN THE H ANDS OF THE ASSESSEE COMPANY. HONBLE SUPREME COURT HAS FURTHER HELD THA T AO IS AT LIBERTY TO TAKE UP THE ISSUE IN THE HANDS OF THE SHARE-HOLDERS . AO HAS NOT DONE ANY EXERCISE IN THE HANDS OF THE SHARE-HOLDERS EITHER I N THE ORIGINAL PROCEEDINGS OR REFRAMED PROCEEDINGS. THE ASSESSEE HAVING DISCHA RGED ITS PART OF BURDEN, THERE IS NO JUSTIFICATION AT ALL IN MAKING THE ENTI RE ADDITION OF SHARE APPLICATIONS IN THE HANDS OF THE ASSESSEE MORE SO W HEN THEIR IDENTITY AND CREDITWORTHINESS HAS BEEN REPEATEDLY ESTABLISHED, S OME OF THEM APPEARED BEFORE AO AND DOCUMENTS WERE ALREADY ON RECORD, AS EXPLAINED IN DETAIL ABOVE. SIMILAR VIEW HAS BEEN UPHELD BY HONBLE DELH I HIGH COURT IN THE CASES OF : (II) CIT VS. VICTOR ELECTODES LTD. IN ITA NO. 586/2010 D ATED 12-05- 2010; AND (III) CIT VS. WINSTRAL PETROCHEMICALS PVT. LTD. IN ITA NO . 592/2010 DATED 12-05-2010. 3.3. LEARNED COUNSEL FURTHER CONTENDS THAT RELEVANT DETAILS IN RESPECT OF EACH AND EVERY SHARE APPLICANT, WHICH COULD REASONA BLY ESTABLISH THE IDENTITY OF SHARE-HOLDERS, THEIR CREDITWORTHINESS AND GENUI NENESS OF SHARE APPLICANTS WERE ALREADY FILED BEFORE CIT(A) AND WERE FORWARDED TO AO AS WELL, THEREFORE, THE FINDINGS THAT THERE IS ABSENCE OF SU FFICIENT MATERIAL TO ESTABLISH THEIR IDENTITY, IS CONTRARY TO RECORD. ASSESSEE EXP LAINED BEFORE AO AND CIT(A) THAT THE DIRECTION OF THE ITAT WAS LIMITED TO VERIFY THE DOCUMENTS FILED BY ASSESSEE BEFORE CIT(A), HOWEVER, BOTH THE LOWER AUTHORITIES HAVE CHOSEN TO UPHOLD THE ADDITION GOING BEYOND THE ITAT DIRECTIONS AND FURTHER IN NOT CONSIDERING THE MATERIAL WHICH WAS AVAILABLE ON THEIR RECORD. SECTION 68 PUTS INITIAL BURDEN ON THE ASSESSEE WHICH HAS BE EN DULY DISCHARGED, THE ENTIRE MATERIAL HAS BEEN IGNORED MERELY BECAUSE NEW EVIDENCE WAS NOT FILED BY ASSESSEE. EVEN IN THE CASE OF EX PARTE ASSESSMEN T, SAME HAS TO BE FAIR AND REASONABLE AFTER CONSIDERING THE MATERIAL AVAILABLE ON RECORD, IN THIS CASE ENTIRE SHARE APPLICATION MONEY HAS BEEN ADDED WITHO UT JUSTIFICATION AND CONSIDERING THE MATERIAL AVAILABLE ON RECORD, WHICH IS NOT DISPUTED BY LOWER AUTHORITIES. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE ENTIRE MATERIAL ON RECORD. ASSESSEE HAS FILED A PAPER BOOK WHICH CONT AINS THE DOCUMENTS ALREADY FILED BEFORE CIT(A) DURING THE COURSE OF FI RST APPEAL, SAME WAS ALSO FORWARDED TO AO ALSO TO FILE A REMAND REPORT THEREO N. AO INSISTED ONLY ON NON-ADMISSION OF ADDITIONAL EVIDENCE AND DID NOT CA RRY OUT ANY FURTHER INQUIRY ON THE MATERIAL. AO SKIRTED THE EXAMINATION OF MATERIAL BY ASKING THE CIT(A) THAT IN CASE ADDITIONAL EVIDENCE WAS AD MITTED, HE SHOULD BE GIVEN FURTHER TIME. SINCE AO DID NOT FILE ANY REMAN D REPORT ABOUT THE INQUIRIES CIT(A) PROCEEDED TO DECIDE THE APPEAL IN FIRST ROUND GIVING SUBSTANTIAL RELIEF. BE THAT AS IT MAY, ON APPEALS O F BOTH THE PARTIES, ITAT SET ASIDE THE MATTER BACK TO THE FILE OF AO, HOWEVER, W ITH DIRECTION THAT: 14. FOR THESE REASONS, WE SET ASIDE THE ORDER OF T HE CIT(A). WE RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO HIM TO EXAMINE THE EVIDENCE ADDUCED BY THE ASSESSEE BEFORE THE CIT(A) AND TAKE A DECISION AFRESH IN ACCORDANCE WIT H LAW. NEEDLESS TO ADD THAT THE ASSESSEE SHALL BE GIVEN AD EQUATE OPPORTUNITY OF BEING HEARD. THUS, BOTH THE APPEALS ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. 4.1. THE SETTING ASIDE WAS IN PECULIAR CIRCUMSTANCE S AS REVENUE PLEADED ITAT TO GIVE THE AO A CHANCE TO VERIFY THE MATERIAL ADDUCED BEFORE CIT(A). ITAT ACCORDINGLY, SET ASIDE THE ISSUE WITH THIS CLEAR DIRECTION TO VERIFY THE MATERIAL FILED BEFORE CIT(A). IN OUR VIE W, BY THIS DIRECTION AO SHOULD HAVE EXAMINED THE MATERIAL AVAILABLE ON RECO RD AND DECIDE THE ISSUE ACCORDINGLY. INSTEAD HE WANTED NEW EVIDENCE TO BE FILED, WHICH WAS EXPLAINED TO BE DIFFICULT BY ASSESSEE DUE TO ELAPSE OF LONG TIME OF 8 YEARS AND HAVING NO CONTROL OVER SHARE-HOLDERS TO ENFORCE THEIR ATTENDANCE OR DOCUMENTS. IN OUR VIEW AO WAS NOT RIGHT IN GOING BE YOND THE ITAT DIRECTION AND CALL FOR NEW EVIDENCE WHICH COULD NOT BE FILED BY ASSESSEE. NOW COMING TO THE ISSUE AS TO WHETHER THE MATERIAL AVAILABLE ON RECORD IN RESPECT OF SHARE APPLICANTS WAS SUFFICIENT TO DISCH ARGE THE BURDEN OF THE ASSESSEE, FOLLOWING EMERGES FROM RECORD: (1) SATISH MEHTA: CONFIRMATION, PAN NO. WITH OTHER DETA ILS ARE FILED. (2) A. SARIN: THE INVESTMENT IS THROUGH A BROKER, CONFI RMATION, PAN, ADDRESS FILED. (3) A. SARIN: THE INVESTMENT IS THROUGH A BROKER, CONFI RMATION, PAN, ADDRESS FILED. (4) N. SARIN: THE INVESTMENT IS THROUGH A BROKER, CONFI RMATION, PAN, ADDRESS FILED. (5) D. SARIN: THE INVESTMENT IS THROUGH A BROKER, CONFI RMATION, PAN, ADDRESS FILED. (6) K.A. KHAN: ASSESSEE HAS FILED SUIT AGAINST THIS SHA RE-HOLDER, WHICH IS NOT DISPUTED. (7) RITU DALMIA: INVESTMENT THROUGH BROKER. PAN NUMBER, ROC RECORD FILED. (8) R. MARWAHA: INVESTMENT THROUGH BROKER. ASSESSEE AHS FIELD SUIT AGAINST THIS SHARE-HOLDER. (9) A. VAGHANI: INVESTMENT THROUGH BROKER. SUIT IS FILE D BY THE ASSESSEE WITH OTHER DETAILS. (10) A. KHURANA: INVESTMENT THROUGH BROKER. DETAILS OF C HEQUES, PAN. APPLICANT IS NRI AND SUIT FILED. (11) R. BEHL: CONFIRMATION; ADDRESS FULL DETAILS FILED. (12) M. KAPOOR: CONFIRMATION; ADDRESS FULL DETAILS FILED . (13) K. SARKAR: CONFIRMATION; ADDRESS FULL DETAILS FILED . (14) S. RAJKUNDRA: CONFIRMATION; ADDRESS FULL DETAILS FI LED. (15) M. SINGH: CONFIRMATION; ADDRESS FULL DETAILS FILED. (16) S. KOCHAR: CONFIRMATION; ADDRESS FULL DETAILS FILED . (17) R. JERATH: PAN NO., DETAILS OF SHARE TRANSFER, ROC RECORD GIVEN. (18) V. TANGRI: NRI; DETAILS OF SHARE TRANSFER, ROC RECO RD, REQUEST FOR TRANSFER OF SHARES FILED. (19) J. AGGARWAL: NRI, PAN DETAILS, ROC RECORD FILED. (20) R. DEHMUBED: DETAILS OF SHARE TRANSFER AND ROC RECO RD FILED. (21) Y. MEHRA: DETAILS OF SHARE TRANSFER, ROC RECORD, MO DE OF PAYMENT, COPY OF SHARE APPLICATION FILED. 4.2. IN VIEW OF ABOVE JUDGMENTS, THE MAIN CONSIDERA TION FOR EXAMINING THE SHARE APPLICATION MONEY IS TO VERIFY THE IDENTITY O F THE SHARE HOLDER. THE IDENTITY CAN BE ESTABLISHED BY VARIOUS DOCUMENTS LI KE CONFIRMATION, PAN, BANK ACCOUNT AND ROC RECORD, SHARE APPLICATION ETC. IN OUR VIEW, ASSESSEE HAS FILED MOST OF THE DETAILS IN RESPECT OF EACH AN D EVERY SHARE APPLICANTS. IN SOME CASES ASSESSEE FILED NEW CONFIRMATORY EMAILS, SINCE LONG TIME HAD ELAPSED AND PARTIES WERE AWAY, OUT OF INDIA. LOWER AUTHORITIES HAVE GIVEN LOT OF PREFERENCE TO THE REQUIREMENT OF FILING OF NEW E VIDENCE IGNORING THAT AT THE RELEVANT TIME ASSESSEE HAD FILED DOCUMENTS TO D ISCHARGE ITS ONUS. HONBLE SUPREME COURT IN THE CASE OF CIT VS. DIVINE LEASING & FINANCE LTD. 299 ITR 268; AND CIT VS. LOVELY EXPORTS (P) LT D. (SUPRA), HAS HELD THAT IN CASE OF SHARE APPLICANTS, ONUS ON THE ASSES SEE AT THE BEST IS TO ESTABLISH THE IDENTITY OF THE SHARE-HOLDERS AND REV ENUE HAS BEEN ALTERNATIVELY DIRECTED TO PURSUE THE MATTER OF SHARE CAPITAL SUBS CRIPTION IN THE CASES OF SHARE-HOLDER CONCERNED. . IN ASSESSEES CASE, NOT O NLY IDENTITY, BUT SUFFICIENT EVIDENCE FOR THEIR CREDITWORTHINESS AND GENUINENESS OF TRANSACTION HAS BEEN FILED. IN OUR VIEW, ASSESSEE HAS DULY DISCHARGED IT S ONUS VIEWED FROM ANY ANGLE AND THE ADDITION U/S 68 IS NOT JUSTIFIED IN T HIS CASE. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DWARKADHISH INVESTMENT (P) LTD. (SUPRA), CIT VS. VICTOR ELECTODES LTD. (SUPRA); AND CIT VS. WINS TRAL PETROCHEMICALS PVT. LTD. (SUPRA), HAS REASSERTED THE DIRECTIONS IN THIS BEHALF, WHICH SQUARELY SUPPORT ASSESSEES CASE. IN CONSIDERATION OF ALL TH E FACTS AND CIRCUMSTANCES WE HOLD THAT THE ASSESSEE HAS ESTABLISHED THE SHARE APPLICATIONS TO BE GENUINE BY REASONABLE EVIDENCE AND THE ADDITIONS ARE DELETE D. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 12-11-2010. SD/- SD/- (R.C. SHARMA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12-11-2010. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR