M/S BINI BUILDERS PVT. LTD., Mumbai V. DCIT CENTRAL RANGE 7(3), Mumbai

ITA 631/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3164 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 05-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIKLD
• Assessee Lawyers: VIMAL PUNMIYA LD
• Keywords: Unexplained cash credit; Gift; Income from undisclosed sources; Share purchase agreement; Principle of natural justice; Source of fund; Question of law; Tangible material; Corroborative evidences; Onus to prove; Retraction; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 133A; 234B; 133(6); 143(1); 143(2); 72; 13; 131; 68; 148

Judgement Text

ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO. 631/MUM/2019 ( / ASSESSMENT YEAR : 2011-12 ) & ./ I.T.A. NO.632/MUM/2019 ( / ASSESSMENT YEAR : 2012-13 ) M/S. BINI BUILDERS PVT. LTD. 203/204, RAIGAD DARSHAN OPP. INDIAN OIL CO., J.P. ROAD ANDHERI WEST, MUMBAI 400053. / VS. D CIT - CENTRAL RANGE - 7(3), R. NO. 655, 6 TH FLOOR M.K. ROAD, CHURCHGATE, MUMBAI 400020. &' ./ ./PAN/GIR NO. AACCB-3447-R ( ') /APPELLANT ) : ( *+') / RESPONDENT ) ASSESSEE BY : MR. VIMAL PUNMIYA- LD. AR REVENUE BY : MS. KAVITA P. KAUSHIK-LD. DR / DATE OF HEARING : 29/01/2020 / DATE OF PRONOUNCEMENT : 12/03/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AS PER THE PROVISIONS OF SECTION 68 OF THE INCOM E TAX ACT, 1961, WHERE ANY SUM IS FOUND CREDITED IN THE ASSESSEES B OOKS AND ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION FURNISHED IS FOUND TO BE UNSATISFACTORY , THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE A SSESSEE OF THAT ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 2 PREVIOUS YEAR. A PROVISO HAS BEEN INSERTED TO THE S AID SECTION BY FINANCE ACT, 2012 W.E.F. 01/04/2013 TO PROVIDE THAT WHERE THE ASSESSEE IS A COMPANY AND THE SUM SO CREDITED CONSISTS OF SH ARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM ETC., THE EXPLA NATION FURNISHED BY THE ASSESSEE SHALL BE DEEMED TO BE NOT SATISFACTORY UNLESS THE PERSON IN WHOSE NAME SUCH CREDIT IS RECORDED ALSO OFFERS AN E XPLANATION ABOUT NATURE AND SOURCE OF SUM SO CREDITED AND SUCH EXPLA NATION IS FOUND TO BE SATISFACTORY. HOWEVER, THIS PROVISO IS APPLICABL E ONLY FROM AY 2013-14 AND THE SAME IS NOT RETROSPECTIVE IN NATURE AS HELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE PRIVATE LIMITED [80 TAXMANN.COM 272]. THE SAID POSITION HAS ALSO BEEN REITERATED BY HONBLE BOMBAY HIGH COURT IN ITS RECE NT DECISION TILTED AS GAURAV TRIYUGI SINGH V/S ITO (ITA NO.1750 OF 207, D ATED 22/01/2020) WHICH ALSO CONSIDER ITS EARLIER DECISION OF PR.CIT V/S VEEDHATA TOWERS PVT. LTD. (2018 403 ITR 415). 2. IT IS SETTLED POSITION OF LAW THAT TO AVOID THE RIGORS OF SECTION 68, THE ASSESSEE MUST PROVE THE IDENTITY, CREDITWORTHINESS OF THE LENDERS / INVESTORS TO ADVANCE SUCH MONIES AND GENUINENESS OF THE TRANSACTIONS. ONCE THESE THREE INGREDIENTS ARE FULFILLED BY THE A SSESSEE, THE PRIMARY ONUS CASTED UPON HIM, IN THIS REGARD, COULD BE SAID TO HAVE BEEN DISCHARGED AND ACCORDINGLY, THE ONUS WOULD SHIFT UP ON REVENUE TO DISLODGE THE ASSESSEES CLAIM BY BRINGING ON RECORD MATERIAL EVIDENCES AND UNLESS THIS ONUS IS DISCHARGED BY THE REVENUE, NO ADDITION COULD BE SUSTAINED U/S 68. THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS P. LTD. [319 ITR 5], DISMISSING REVENUES APPEAL, OBSERVED AS UNDER: - ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 3 2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF IT ACT, 1961? WE FIND NO MERIT IN THI S SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY I S RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAME S ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR I NDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WI TH THE IMPUGNED JUDGMENT. 3. SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS DI SMISSED. THE RATIO OF SAID DECISION HAS SUBSEQUENTLY BEEN FO LLOWED BY VARIOUS JUDICIAL AUTHORITIES IN CATENA OF JUDICIAL PRONOUNC EMENTS. THE SAID DECISION HAS BEEN FOLLOWED BY HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE PRIVATE LIMITED [8 0 TAXMANN.COM 272] & SUBSEQUENTLY IN CIT VS. ORCHID INDUSTRIES PRIVATE LIMITED [88 TAXMANN.COM 502]. THE HONBLE DELHI HIGH COURT FOLLOWED THE SAID DECISION IN PR. CIT V/S ADAMINE CONSTRUCTION PVT. LTD. [107 TAXMANN.COM 84] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION WAS DISMISSED BY HONBLE SUPREME COURT REPORTED AT 107 TAXMANN.COM 85. SIMILAR IS THE POSITION OF DECISION OF HONBLE DELH I HIGH COURT RENDERED IN PR. CIT V/S HIMACHAL FIBERS LTD. [98 TAXMANN.COM 72 ] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION WAS DISMISSED BY H ONBLE SUPREME COURT REPORTED AT 98 TAXMANN.COM 173. SIMILAR IS TH E DECISION OF HONBLE HIGH COURT OF MADHYA PRADESH IN PR. CIT V/S CHAIN HOUSE INTERNATIONAL PVT. LTD. [98 TAXMANN.COM 47] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION HAS RECENTLY BEEN DISMISSED BY HONBLE SUPREME COURT ON 18/02/2019 REPORTED AT 103 TAXMANN.COM 435 . 3. SIMILAR IS THE RECENT DECISION OF HONBLE BOMBAY HIGH COURT IN PR. CIT V/S AMI INDUSTRIES (INDIA) PVT. LTD. [ITA NO. 1 231 OF 2017, DATED 29/01/2020) WHICH HAS BEEN RENDERED AFTER CONSIDERING THE PRINC IPLES LAID DOWN BY HONBLE SUPREME COURT IN ITS RECENT DE CISION TITLED AS ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 4 PR.CIT VS. NRA IRON & STEEL PVT. LTD. [412 ITR 161] . THE HONBLE COURT HELD AS UNDER: - 10. MR. SURESH KUMAR, LEARNED STANDING COUNSEL, REV ENUE HAS TAKEN US THROUGH THE ASSESSMENT ORDER AND SUBMITS THEREFROM THAT IT CANN OT BE SAID THAT ASSESSEE HAD DISCHARGED THE BURDEN TO PROVE CREDIT WORTHINESS OF THE CREDITORS. HIS FURTHER CONTENTION IS THAT THE ASSESSEE IS ALSO REQUIRED TO PROVE THE SOU RCE OF THE SOURCE. IN THIS CONNECTION, HE HAS PLACED RELIANCE ON A DECISION OF THE SUPREME CO URT IN PR. CIT VS. NRA IRON & STEEL PVT LTD . HE, THEREFORE, SUBMITS THAT THE FINDING RETURNED BY THE TRIBUNAL IS WHOLLY ERRONEOUS AND REQUIRES TO BE INTERFERED WITH BY THIS COURT. 11. PER CONTRA, MR. PADVEKAR, LEARNED COUNSEL FOR T HE RESPONDENT SUBMITS THAT FROM THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS QUITE EV IDENT THAT ASSESSEE HAD DISCHARGED ITS BURDEN TO PROVE IDENTITY OF THE CREDITORS, GENUINEN ESS OF THE TRANSACTIONS AND CREDIT WORTHINESS OF THE CREDITORS. HE SUBMITS THAT THE L EGAL POSITION IS VERY CLEAR IN AS MUCH AS ASSESSEE IS ONLY REQUIRED TO EXPLAIN THE SOURCE AND NOT SOURCE OF THE SOURCE. DECISION OF THE SUPREME COURT IN NRA IRON & STEEL P LTD (SUPRA) IS NOT THE CASE LAW FOR THE AFORESAID PROPOSITION. IN FACT, THE SAID DECISION NOWHERE ST ATES THAT ASSESSEE IS REQUIRED TO PROVE SOURCE OF THE SOURCE. 11.1. REFERRING TO THE ORDERS PASSED BY THE AUTHORI TIES BELOW, MR. PADVEKAR SUBMITS THAT IN THE PRESENT CASE, THE INVESTIGATION WING OF THE DEP ARTMENT HAD CARRIED OUT DETAILED INVESTIGATION AT KOLKATA AND FOUND THE SOURCE OF TH E CREDIT TO BE GENUINE. THIS REPORT OF THE INVESTIGATION WING WAS NOT TAKEN INTO CONSIDERATION BY THE ASSESSING OFFICER. THEREFORE, LOWER APPELLATE AUTHORITIES WERE JUSTIFIED IN DELET ING THE ADDITIONS MADE BY THE ASSESSING OFFICER. BEING A FINDING OF FACT, NO SUBSTANTIAL Q UESTION OF LAW ARISES IN THE APPEAL. THEREFORE, THE APPEAL SHOULD BE DISMISSED. 12. SUBMISSIONS MADE BY LEARNED COUNSEL FOR THE PA RTIES HAVE BEEN CONSIDERED. ALSO PERUSED THE MATERIALS ON RECORD. 13. SECTION 68 OF THE ACT DEALS WITH CASH CREDITS. AS PER SECTION 68, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAIN ED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESS ING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. SIMPLY PUT, THE SECTION PROVIDES THAT IF THERE IS A NY CASH CREDIT DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME FOR THE PREVIOUS YEAR UNDER CO NSIDERATION AND THE ASSESSEE OFFERS NO EXPLANATION FOR THE SAME OR IF THE ASSESSEE OFFERS EXPLANATION WHICH THE ASSESSING OFFICER FINDS TO BE NOT SATISFACTORY, THEN THE SAID AMOUNT IS TO BE ADDED TO THE INCOME OF THE ASSESSEE TO BE CHARGED TO INCOME TAX FOR THE CORRES PONDING ASSESSMENT YEAR. 14. SECTION 68 OF THE ACT HAS RECEIVED CONSIDERABLE JUDICIAL ATTENTION THROUGH VARIOUS PRONOUNCEMENTS OF THE COURTS. IT IS NOW WELL SETTL ED THAT UNDER SECTION 68 OF THE ACT, THE ASSESSEE IS REQUIRED TO PROVE IDENTITY OF THE CREDI TOR; GENUINENESS OF THE TRANSACTION; AND CREDIT WORTHINESS OF THE CREDITOR. IN FACT, IN NRA IRON & STEEL (P) LTD (SUPRA), SUPREME COURT SURVEYED THE RELEVANT JUDGMENTS AND CULLED OUT THE FOLLOWING PRINCIPLES: '11. THE PRINCIPLES WHICH EMERGE WHERE SUMS OF MONE Y ARE CREDITED AS SHARE CAPITAL/PREMIUM ARE: I. THE ASSESSEE IS UNDER A LEGAL OBLIGATION TO PROV E THE GENUINENESS OF THE TRANSACTION, THE IDENTITY OF THE CREDITORS, AND CRE DIT-WORTHINESS OF THE INVESTORS WHO SHOULD HAVE THE FINANCIAL CAPACITY TO MAKE THE INVE STMENT IN QUESTION, TO THE SATISFACTION OF THE AO, SO AS TO DISCHARGE THE PRIM ARY ONUS. II. THE ASSESSING OFFICER IS DUTY BOUND TO INVESTIG ATE THE CREDIT-WORTHINESS OF THE CREDITOR / SUBSCRIBER, VERIFY THE IDENTITY OF THE S UBSCRIBERS, AND ASCERTAIN WHETHER THE TRANSACTION IS GENUINE, OR THESE ARE BOGUS ENTRIES OF NAME-LENDERS. III. IF THE INQUIRIES ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 5 AND INVESTIGATIONS REVEAL THAT THE IDENTITY OF THE CREDITORS TO BE DUBIOUS OR DOUBTFUL, OR LACK CREDIT-WORTHINESS, THEN THE GENUINENESS OF THE TRANSACTION WOULD NOT BE ESTABLISHED. IN SUCH A CASE, THE ASSESSEE WOULD NOT HAVE DISCHAR GED THE PRIMARY ONUS CONTEMPLATED BY SECTION 68 OF THE ACT.' 15. IT IS ALSO A SETTLED PROPOSITION THAT ASSESSEE IS NOT REQUIRED TO PROVE SOURCE OF SOURCE. IN FACT, THIS POSITION HAS BEEN CLARIFIED BY US IN THE RECENT DECISION IN GAURAV TRIYUGI SINGH VS. INCOME TAX OFFICER-24(3)(1). 16. HAVING NOTED THE ABOVE, WE MAY NOW ADVERT TO TH E ORDERS PASSED BY THE AUTHORITIES BELOW. 17. IN SO FAR ORDER PASSED BY THE ASSESSING OFFICE R IS CONCERNED, HE CAME TO THE CONCLUSION THAT THE THREE COMPANIES WHO PROVIDED SH ARE APPLICATION MONEY TO THE ASSESSEE WERE MERE ENTITIES ON PAPER WITHOUT PROPER ADDRESSE S. THE THREE COMPANIES HAD NO FUNDS OF THEIR OWN AND THAT THE COMPANIES HAD NOT RESPOND ED TO THE LETTERS WRITTEN TO THEM WHICH COULD HAVE ESTABLISHED THEIR CREDIT WORTHINESS. IN THAT VIEW OF THE MATTER, ASSESSING OFFICER TOOK THE VIEW THAT FUNDS AGGREGATING RS. 34 CRORES INTRODUCED IN THE RETURN OF INCOME IN THE GARB OF SHARE APPLICATION MONEY WAS MONEY FROM UNEX PLAINED SOURCE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH C REDIT UNDER SECTION 68 OF THE ACT. 18. IN THE FIRST APPELLATE PROCEEDINGS, IT WAS HELD THAT ASSESSEE HAD PRODUCED SUFFICIENT EVIDENCE IN SUPPORT OF PROOF OF IDENTITY OF THE CRE DITORS AND CONFIRMATION OF TRANSACTIONS BY MANY DOCUMENTS, SUCH AS, SHARE APPLICATION FORM ETC . FIRST APPELLATE AUTHORITY ALSO NOTED THAT THERE WAS NO REQUIREMENT UNDER SECTION 68 OF T HE ACT TO EXPLAIN SOURCE OF SOURCE. IT WAS NOT NECESSARY THAT SHARE APPLICATION MONEY SHOU LD BE INVESTED OUT OF TAXABLE INCOME ONLY. IT MAY BE BROUGHT OUT OF BORROWED FUNDS. IT WAS FURTHER HELD THAT NONRESPONDING TO NOTICE WOULD NOT IPSO FACTO MEAN THAT THE CREDITORS HAD NO CREDIT WORTHINESS. IN SUCH CIRCUMSTANCES, THE FIRST APPELLATE AUTHORITY HELD T HAT WHERE ALL MATERIAL EVIDENCE IN SUPPORT OF EXPLANATION OF CREDITS IN TERMS OF IDENTITY, GEN UINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITORS WERE AVAILABLE, W ITHOUT ANY INFIRMITY IN SUCH EVIDENCE AND THE EXPLANATION REQUIRED UNDER SECTION 68 OF THE AC T HAVING BEEN DISCHARGED, ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITIONS. THEREFORE, THE ADDITIONS WERE DELETED. 19. IN APPEAL, TRIBUNAL NOTED THAT BEFORE THE ASSE SSING OFFICER, ASSESSEE HAD SUBMITTED THE FOLLOWING DOCUMENTS OF THE THREE CREDITORS: A) PAN NUMBER OF THE COMPANIES; B) COPIES OF INCOME TAX RETURN FILED BY THESE THREE COMPANIES FOR ASSESSMENT YEAR 2010- 11; C) CONFIRMATION LETTER IN RESPECT OF SHARE APPLICAT ION MONEY PAID BY THEM; AND D) COPY OF BANK STATEMENT THROUGH WHICH CHEQUES WER E ISSUED. 20. TRIBUNAL NOTED THAT ASSESSING OFFICER HAD REFER RED THE MATTER TO THE INVESTIGATION WING OF THE DEPARTMENT AT KOLKATA FOR MAKING INQUIRIES INTO THE THREE CREDITORS FROM WHOM SHARE APPLICATION MONEY WAS RECEIVED. THOUGH REPORT FROM THE INVESTIGATION WING WAS RECEIVED, TRIBUNAL NOTED THAT THE SAME WAS NOT CONSIDERED BY THE ASSESSING OFFICER DESPITE MENTIONING OF THE SAME IN THE ASSESSMENT ORDER, BES IDES NOT PROVIDING A COPY OF THE SAME TO THE ASSESSEE. IN THE REPORT BY THE INVESTIGATIO N WING, IT WAS MENTIONED THAT THE COMPANIES WERE IN EXISTENCE AND HAD FILED INCOME TA X RETURNS FOR THE PREVIOUS YEAR UNDER CONSIDERATION BUT THE ASSESSING OFFICER RECORDED TH AT THESE CREDITORS HAD VERY MEAGER INCOME AS DISCLOSED IN THEIR RETURNS OF INCOME AND THEREFORE, DOUBTED CREDIT WORTHINESS OF THE THREE CREDITORS. FINALLY, TRIBUNAL HELD AS UNDE R: '5.7 AS PER THE PROVISIONS OF SECTION 68 OF THE ACT , FOR ANY CASH CREDIT APPEARING IN THE BOOKS OF ASSESSEE, THE ASSESSEE IS REQUIRED TO PROVE THE FOLLOWING(A) IDENTITY OF THE CREDITOR (B) GENUINENESS OF THE TRANSACTION (C) CREDIT-WORTHINESS OF THE PARTY (I) IN THIS CASE, THE ASSESSEE HAS ALREADY PROVED T HE IDENTITY OF THE SHARE APPLICANT BY FURNISHING THEIR PAN, COPY OF IT RETURN FILED FO R ASST. YEAR 2010-11. ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 6 (II) REGARDING THE GENUINENESS OF THE TRANSACTION, ASSESSEE HAS ALREADY FILED THE COPY OF THE BANK ACCOUNT OF THESE THREE SHARE APPLI CANTS FROM WHICH THE SHARE APPLICATION MONEY WAS PAID AND THE COPY OF ACCOUNT OF THE ASSESSEE IN WHICH THE SAID AMOUNT WAS DEPOSITED, WHICH WAS RECEIVED BY RT GS. (III) REGARDING CREDIT-WORTHINESS OF THE PARTY, IT HAS BEEN PROVED FROM THE BANK ACCOUNT OF THESE THREE COMPANIES THAT THEY HAD THE FUNDS TO MAKE PAYMENT FOR SHARE APPLICATION MONEY AND COPY OF RESOLUTION PASS ED IN THE MEETING OF THEIR BOARD OF DIRECTORS. (IV) REGARDING SOURCE OF THE SOURCE, ASSESSING OFFI CER HAS ALREADY MADE ENQUIRIES THROUGH THE DDI (INVESTIGATION), KOLKATA AND COLLEC TED ALL THE MATERIALS REQUIRED WHICH PROVED THE SOURCE OF THE SOURCE, THOUGH AS PE R SETTLED LEGAL POSITION ON THIS ISSUE, ASSESSEE NEED NOT TO PROVE THE SOURCE OF THE SOURCE. (V) ASSESSING OFFICER HAS NOT BROUGHT ANY COGENT MA TERIAL OR EVIDENCE ON RECORD TO INDICATE THAT THE SHAREHOLDERS WERE BENAMIDARS OR F ICTITIOUS PERSONS OR THAT ANY PART OF THE SHARE CAPITAL REPRESENT COMPANYS OWN INCOME FROM UNDISCLOSED SOURCES. ACCORDINGLY, NO ADDITION CAN BE MADE U/S.68 OF THE ACT. IN VIEW OF ABOVE REASONED FACTUAL FINDING OF CIT(A) NEEDS NO INTERFERENCE FRO M OUR SIDE. WE UPHOLD THE SAME.' 21. FROM THE ABOVE, IT IS SEEN THAT IDENTITY OF THE CREDITORS WERE NOT IN DOUBT. ASSESSEE HAD FURNISHED PAN, COPIES OF THE INCOME TAX RETURNS OF THE CREDITORS AS WELL AS COPY OF BANK ACCOUNTS OF THE THREE CREDITORS IN WHICH THE SHARE APPLICATION MONEY WAS DEPOSITED IN ORDER TO PROVE GENUINENESS OF THE TRANSACTIONS. IN SO FA R CREDIT WORTHINESS OF THE CREDITORS WERE CONCERNED, TRIBUNAL RECORDED THAT BANK ACCOUNTS OF THE CREDITORS SHOWED THAT THE CREDITORS HAD FUNDS TO MAKE PAYMENTS FOR SHARE APPLICATION MO NEY AND IN THIS REGARD, RESOLUTIONS WERE ALSO PASSED BY THE BOARD OF DIRECTORS OF THE T HREE CREDITORS. THOUGH, ASSESSEE WAS NOT REQUIRED TO PROVE SOURCE OF THE SOURCE, NONETHE LESS, TRIBUNAL TOOK THE VIEW THAT ASSESSING OFFICER HAD MADE INQUIRIES THROUGH THE IN VESTIGATION WING OF THE DEPARTMENT AT KOLKATA AND COLLECTED ALL THE MATERIALS WHICH PROVE D SOURCE OF THE SOURCE. 22. IN NRA IRON & STEEL (P) LTD (SUPRA), THE ASSESS ING OFFICER HAD MADE INDEPENDENT AND DETAILED INQUIRY INCLUDING SURVEY OF THE INVESTOR C OMPANIES. THE FIELD REPORT REVEALED THAT THE SHAREHOLDERS WERE EITHER NON-EXISTENT OR LACKED CREDIT-WORTHINESS. IT IS IN THESE CIRCUMSTANCES, SUPREME COURT HELD THAT THE ONUS TO ESTABLISH IDENTITY OF THE INVESTOR COMPANIES WAS NOT DISCHARGED BY THE ASSESSEE. THE AFORESAID DECISION IS, THEREFORE, CLEARLY DISTINGUISHABLE ON FACTS OF THE PRESENT CAS E. 21. THEREFORE, ON A THOROUGH CONSIDERATION OF THE M ATTER, WE ARE OF THE VIEW THAT THE FIRST APPELLATE AUTHORITY HAD RETURNED A CLEAR FINDING OF FACT THAT ASSESSEE HAD DISCHARGED ITS ONUS OF PROVING IDENTITY OF THE CREDITORS, GENUINEN ESS OF THE TRANSACTIONS AND CREDIT- WORTHINESS OF THE CREDITORS WHICH FINDING OF FACT S TOOD AFFIRMED BY THE TRIBUNAL. THERE IS, THUS, CONCURRENT FINDINGS OF FACT BY THE TWO LOWER APPELLATE AUTHORITIES. APPELLANT HAS NOT BEEN ABLE TO SHOW ANY PERVERSITY IN THE AFORESAID F INDINGS OF FACT BY THE AUTHORITIES BELOW. 22. UNDER THESE CIRCUMSTANCES, WE FIND NO ERROR OR INFIRMITY IN THE VIEW TAKEN BY THE TRIBUNAL. NO QUESTION OF LAW, MUCH LESS ANY SUBSTA NTIAL QUESTION OF LAW, ARISES FROM THE ORDER OF THE TRIBUNAL. CONSEQUENTLY, THE APPEAL IS DISMISSED. HOWEVER, THERE SHALL BE NO ORDER AS TO COST. 4. KEEPING ABOVESAID LEGAL POSITION IN MIND, WE FIN D THAT THE ASSESSEE IS UNDER APPEAL BEFORE US FOR ASSESSMENT Y EARS [IN SHORT REFERRED TO AS AY] 2011-12 & 2012-13 CONTESTING T HE ORDER OF LEARNED FIRST APPELLATE AUTHORITY CONFIRMING CERTAIN ADDITI ON U/S 68. ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 7 ITA NO. 631/MUM/2019, AY 2011-12 5.1 THE ASSESSEE ASSAILS THE ORDER OF LD. COMMISSIO NER OF INCOME- TAX (APPEALS)-49, MUMBAI [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-49/IT-164/2017-18 DATED 05/12/2018 ON FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE REOPENING THE CASE U/S 148 WHICH IS BAD IN LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE INCOME ACT 1961 BY THE LD. ASSESSING OFFICER IS AGAINST THE PRINCIPAL OF NATUR AL JUSTICE, HENCE BAD-IN-LAW. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN CONFIRMING THE PASSING ASSESSMENT ORDER WITHOUT PROVIDING OPPO RTUNITY TO REBUT THE MATERIAL RELIED BY LD ASSESSING OFFICER DURING THE REASSESSMENT PROCEE DINGS EXAMINATION WHICH IS AGAINST THE PRINCIPAL OF NATURAL JUSTICE AND HENCE THE SAID ORDER IS LIABLE TO BE QUASHED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING ADDITION IN RESPECT OF THE SHARE CAPITAL AND SHARE PREMIUM OF RS. 2,07,00,000/- AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX A CT, 1961 WITHOUT CORROBORATIVE EVIDENCES. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT PERMITTING OF BUSINESS LOSS RS.60,602/- 6. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, LD. CIT(A) ERRED IN CONFIRMING INITIATION OF PENALTY PROCEEDING U/S.274 R.W.S 271 (1) (C) OF INCOME TAX ACT 1961. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D LAW THE LD. CIT (A) ERRED IN SET-ASIDING FOR FRESH CALCULATIONS OF INTEREST UNDER SECTION 23 4A, 234B AND 234C OF THE INCOME TAX ACT, 1961. FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEIN G RESIDENT CORPORATE ASSESSEE STATED TO BE ENGAGED AS BUILDERS & DEVELOPERS WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) R.W.S. 147 ON 22/12/201 7 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.207.60 LACS AFTER CERTAIN ADDITION U/S 68 FOR RS.207 LACS AS AGAINST RETURNED INCOME OF RS.0.60 LACS E-FILED BY THE ASSESSEE ON 30/09/2011 WHICH WA S PROCESSED U/S 143(1). 5.2 SUBSEQUENTLY, UPON FORMATION OF BELIEF THAT CER TAIN INCOME ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE, THE CASE W AS REOPENED AS PER DUE PROCESS OF LAW VIDE ISSUANCE OF NOTICE U/S 148 DATED 24/02/2017. ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 8 THE REASONS FOR REOPENING WERE DULY COMMUNICATED TO THE ASSESSEE. IN RESPONSE, THE ASSESSEE OFFERED ORIGINAL RETURN OF I NCOME. NO OBJECTIONS WERE FILED AGAINST INITIATE OF REASSESSMENT PROCEED INGS. SUBSEQUENTLY, STATUTORY NOTICES U/S 143(2) & 142(1) WERE ISSUED W HEREIN THE ASSESSEE WAS REQUIRED TO FILE THE REQUISITE DETAILS / INFORM ATION / DOCUMENTARY EVIDENCES ETC. IN SUPPORT OF CERTAIN TRANSACTIONS O F SHARE CAPITAL. 5.3 THE REASSESSMENT PROCEEDINGS WERE TRIGGERED PUR SUANT TO A SEARCH / SEIZURE / SURVEY ACTION CONDUCTED BY THE D EPARTMENT IN THE CASE OF LOTUS / KAMDHENU / GREENVALLEY GROUP OF CASES WH EREIN IT TRANSPIRED THAT THE ASSESSEE RECEIVED SUM OF RS.207 LACS AS SH ARE CAPITAL FROM CERTAIN KOLKATA BASED COMPANIES. THE SAME COMPRISED -OFF OF 20,70,000 EQUITY SHARES OF RS.10/- EACH TOTALING TO RS.207 LA CS. THE DETAILS OF THE SAME WAS AS FOLLOWS: - NO. NAME OF INVESTOR ENTITY NO. OF SHARES ALLOTTED MO NEY RECD. A S SHARE CAPITAL 1. LIMELIGHT DEALCOM P. LTD. 1.5 LACS RS.15 LACS 2. CLASSIC COMMOTRADE P. LTD. 0.5 LACS RS.5 LACS 3. DIVY PRAKASH SUPPLIERS PVT. LTD. 2.5 LACS RS.25 LACS 4. GOLDY DEALCOM P. LTD. 2.5 LACS RS.25 LACS 5. NEXTGEN TRADECOM P. LTD. 1.8 LACS RS.18 LACS 6. REXNOX TREXIM P. LTD. 2.0 LACS RS.20 LACS 7. RAJLAXMI DEALCOM P. LTD. 1.8 LACS RS.18 LACS 8. VANILA TIE-UP P. LTD. 1.5 LACS RS.15 LACS 9. KAMAKHYA GOODS P.LTD. 2.4 LACS RS.24 LACS 10. CAMELLIA COMMERCIAL PVT. LTD. 1.0 LACS RS.10 LACS 11. ANMOT COMMERCE P.LTD. 3.2 LACS RS.32 LACS T OTAL 2 0.7 LACS RS.207 LACS 5.4 DURING THE COURSE OF SURVEY U/S 133A ON 09/10/2 014, SHRI RAJESH AGARWAL, AN ASSOCIATE OF THE GROUP, IN HIS STATEMEN T UNDER OATH U/S 131, MADE ADMISSION OF SUM OF RS.11.13 CRORES AS UNDISCL OSED INCOME OF THE GROUP. HOWEVER, THE SAID STATEMENT WAS RETRACTE D IMMEDIATELY ON ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 9 16/10/2014 BY SUBMITTING AN AFFIDAVIT THAT THE STAT EMENTS WERE EXTRACTED BY APPLYING UNDUE INFLUENCE WITHOUT THERE BEING ANY INCRIMINATING EVIDENCES ON RECORD. 5.5 THE FINDINGS OF SEARCH OPERATIONS REVEALED THAT ENTITIES OF SHRI RAJESH AGARWAL RECEIVED UNSECURED LOAN / SHARE APPL ICATION MONEY OF AROUND 30 CRORES FROM VARIOUS KOLKATA BASED PARTIES . SHRI RAJESH AGARWAL WAS STATED TO BE DIRECTOR OF AROUND 28 ENTI TIES INCLUDING THAT OF ASSESSEE. IT TRANSPIRED THAT THE ASSESSEE COMPANY R ECEIVED TOTAL SHARE CAPITAL OF RS.432.22 LACS DURING FINANCIAL YEARS 20 08-09 TO 2011-12. THE AMOUNT DISCLOSED WITH RESPECT TO THE ASSESSEE ENTIT Y WAS RS.90.45 LACS FOR FINANCIAL YEARS 2008-09 TO 2011-12. HOWEVER, IT WAS NOTED THAT MONEY ALSO CAME FROM 25 OTHER ENTITIES ALSO WHICH H AD COMMON ADDRESSES WITH ADMITTED AS WELL AS NON-ADMITTED COM PANIES /COMMON DIRECTORS WITH ADMITTED AS WELL AS NON- ADMITTED CO MPANIES. IT ALSO TRANSPIRED THAT THE ENTITIES OF SHRI RAJESH AGARWAL RECEIVED SHARE CAPITAL FROM 67 COMPANIES, THE DETAILS OF WHICH HAVE BEEN E XTRACTED ON PAGE NOS. 14 TO 21 OF THE QUANTUM ASSESSMENT ORDER. 5.6 IN CASE OF THE ASSESSEE, TO VERIFY THE TRANSACT IONS, NOTICES U/S 133(6) WERE ISSUED TO THE 11 ENTITIES. HOWEVER, NO REPLY WAS RECEIVED IN 8 CASES AND THE NOTICE REMAINED UNSERVED IN 4 CASES . 5.7 SUMMON U/S 131 WERE ISSUED TO SHRI RAJESH AGARW AL DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HIS STATEMENT WAS RECORD ON 09/12/2016 WHEREIN THE SHRI RAJESH AGARWAL STOOD BY THE RETRACTION AFFIDAVIT. HE MAINTAINED THAT THE HE WAS COERCED BY SURVEY TEAM TO MAKE FALSE DEPOSITION AND THE CONCLUSION THAT BOGUS SHAR E MONEY WAS RECEIVED WAS MERELY ON THE BASIS OF SURMISES AND CO NJECTURES. ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 10 5.8 HOWEVER, DISREGARDING THE SAME, ALLEGATION WAS LEVELED THAT INVESTOR ENTITIES GIFTED MONEY TO THE ASSESSEE FOR NO APPARENT BUSINESS PURPOSES. THE RETRACTION WAS NOTHING BUT AN AFTER-T HOUGHT. SINCE, THE ASSESSEE COULD NOT PROVE THE SOURCE AND NATURE OF T RANSACTIONS, THE STATED AMOUNT WAS ADDED TO THE INCOME OF THE ASSESS EE U/S 68. 6.1 AGGRIEVED, THE ASSESSEE ASSAILED THE ACTION OF LD. AO ON LEGAL GROUNDS AS WELL AS ON MERITS. CHALLENGING REASSESSM ENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE ASSESSEES GROUP HA D NO CONNECTION WITH LOTUS / KAMDHENU / GREENVALLEY GROUP EXCEPT TH AT SHRI BHAGWANJI PATEL OF LOTUS GROUP WAS ONE OF THE EX-DIRECTORS IN ONE OF THE GROUP COMPANIES OF THE ASSESSEE VIZ. AXAYRAJ BUILDWELL PV T. LTD. AND SHRI BHAGWANJI PATEL CEASED TO BE DIRECTOR OF AXAYRAJ BU ILDWELL PVT. LTD. IN 2009. THE ASSESSEE SUBMITTED THAT IN THE ABSENCE OF TANGIBLE MATERIAL, LD. AO HAD NO JURISDICTION TO ISSUE NOTICE U/S 148. 6.2 HOWEVER, THE LEGAL SUBMISSIONS CHALLENGING REAS SESSMENT PROCEEDINGS COULD NOT FIND FAVOR WITH LD. CIT(A) WH O OBSERVED THAT NO SCRUTINY TOOK PLACE U/S 143(3) AND THERE WAS NO SCO PE FOR LD. AO TO EXAMINE THE SHARE CAPITAL / SHARE PREMIUM. THE LD. AO HAD AUTHENTIC INFORMATION BY WAY OF APPRAISAL REPORT OF THE SEARC H IN THE CASE OF LOTUS GROUP AND THE ASSESSEES ADMISSIONS DURING SEARCH C OMPELLED HIM TO TAKE ACTION U/S 147. THE SUBSEQUENT RETRACTION WOUL D NOT HAVE ANY RELEVANCE SINCE THE ONUS WOULD BE ON ASSESSEE TO PR OVE THAT THE STATEMENT WAS FACTUALLY WRONG. THE LD.AO RECORDED E LABORATE REASONS AFTER GIVING ANALYSIS OF THE COMPANIES WHICH HAVE N OT ONLY INVESTED IN ASSESSEE COMPANY BUT ALSO OF THE COMPANIES WHICH HA VE INVESTED IN THE INVESTOR COMPANIES. THEREFORE, LD. AO HAD SUFFICIEN T REASON TO BELIEVE ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 11 THAT INCOME HAD ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE. THEREFORE, THE LEGAL GROUNDS CHALLENGING REASSESSME NT PROCEEDINGS WERE DISMISSED. THE REASONS THAT TRIGGERED REASSESS MENT PROCEEDINGS HAVE BEEN EXTRACTED IN PARA 6.0 OF THE IMPUGNED ORD ER, WHICH WE HAVE PERUSED. 6.3 ON MERITS, THE ASSESSEE ASSAILED THE QUANTUM AD DITION BY WAY OF ELABORATE SUBMISSIONS WHICH HAVE BEEN EXTRACTED IN PARA 7.1 OF THE IMPUGNED ORDER. THE ASSESSEE DREW ATTENTION TO THE DOCUMENTS SUBMITTED BY THE ASSESSEE WITH RESPECT TO INVESTOR ENTITIES TO ESTABLISH THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. IT WAS SUBMITTED THAT EACH AND EVERY SHAREHOLDER CONFI RMED THE STATED TRANSACTIONS THEREFORE, FINDINGS RENDERED BY LD.AO RUN CONTRARY TO THE PROVISIONS OF SEC. 68. THE ASSESSEE MAINTAINED THAT BY SUBMITTING THESE DETAILS, IT HAD DISCHARGED THE PRIMARY ONUS OF PROV ING THE STATED TRANSACTIONS. ALL THE INVESTOR ENTITIES HAD ENOUGH FUNDS TO INVEST IN THE ASSESSEE COMPANY. RELIANCE WAS PLACED ON CATENA OF JUDICIAL PRONOUNCEMENTS TO SUPPORT THE SAID SUBMISSIONS. THE SE HAVE ALREADY BEEN TABULATED IN ASSESSEES SUBMISSIONS. THEREFORE , THE ASSESSEE SUBMITTED THAT ADDITIONS AS MADE BY LD. AO WERE UNC ALLED FOR IN THE LIGHT OF DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE. 6.4 THE LD. CIT(A), AT PARA 7.3 OF THE IMPUGNED ORD ER, NOTED THAT THE ASSESSEE HAD SUBMITTED SHARE APPLICATION FORM, COPY OF CHEQUE, CHEQUES DEPOSIT SLIPS, COPY OF ASSESSEES BANK STAT EMENT, COPY OF SHARE CERTIFICATES, COPY OF SOURCE OF FUNDS, COPY OF BOAR D RESOLUTION, CERTIFICATE OF INCORPORATION, COPY OF MEMORANDUM OF ASSOCIATION (MOU) ETC. WITH RESPECT TO 11 INVESTOR ENTITIES. HOWEVER, THE SAME WOULD NOT PROVE THE ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 12 GENUINENESS OF THE TRANSACTIONS. IT WAS OBSERVED TH AT INVESTOR ENTITIES DID NOT HAVE ANY GENUINE BUSINESS ACTIVITY WHICH WA S EVIDENT FROM THE FACT THAT MAIN OBJECT OF THE INVESTOR ENTITIES CONT AINED ALL ACTIVITY POSSIBLE AND WOULD INDICATE THE MALA-FIDE INTENTIONS OF THE ASSESSEE. ANY GENUINE COMPANY WITH A REAL MOTIVE OF DOING BUSINESS WOULD HAVE A CONCRETE OBJECT TO BE FOLLOWED. FURTHER, THERE WAS NO JUSTIF ICATION FOR KOLKATA BASED ENTITIES TO MAKE INVESTMENT IN MUMBAI BASED E NTITY AND THAT TOO, AT A PREMIUM OF RS.90/- PER SHARE. AT PARA 7.6, IT WAS NOTED THAT ALL THE ENTITIES PURCHASED THE SHARES OF THE ASSESSEE AT PR EMIUM OF RS.90/-PER SHARE BUT THEY EXITED AT FACE VALUE OF RS.10/- PER SHARE. FURTHER, THE RETRACTION WOULD NOT HAVE ANY RELEVANCE IN THE LIGH T OF DECISION OF MUMBAI TRIBUNAL IN HIRALAL MAGANLAL AND CO V/S DCIT (97 TTJ 377). THE CASE LAWS BEING RELIED UPON BY THE ASSESSEE WERE HE LD TO BE DISTINGUISHABLE RATHER RELIANCE WAS PLACED ON THE D ECISION OF HONBLE DELHI HIGH COURT IN NOVA PROMOTERS & FINLEASE PVT LTD. 342 ITR 169 TO CONFIRM THE ADDITIONS. FINALLY, THE ADDITIONS WE RE CONFIRMED BY OBSERVING AS UNDER: - 7.8 THE LEARNED COUNSEL ALSO ALLEGED THAT THE AO MADE T HE ADDITION ON THE BASIS OF SUSPICION AND NOT EVIDENCES. THIS ALSO IS NOT CORRECT AS THE AO HAD BROUGHT IN ENOUGH EVIDENCES BOTH DIRECT AND CORROBORATIVE T O COME TO THE CONCLUSION THAT THE SHARE CAPITAL AND PREMIUM RECEIVED BY THE ASSES SEE ARE NOT GENUINE. AS COULD BE SEEN FROM THE ASSESSMENT ORDER AND FROM THE DISC USSION MADE ABOVE, THE LEARNED COUNSEL FURTHER ALLEGED THAT THE AO HAS NO MATERIAL IN HIS POSSESSION TO PROVE THE SAME AND THAT HE MADE THE ADDITION OF THE BASIS OF INFORMATION FROM INVESTIGATION WING AND WITHOUT ANY INDEPENDENT ENQU IRY MADE BY THE AO. THIS ALSO IS INCORRECT AS THE AO HAD IN-DEPTH INFORMATION NOT ONLY ABOUT THE 11 COMPANIES WHICH HAVE INVESTED IN THE ASSESSEE COMPANY BUT ALS O ABOUT THE 67 COMPANIES WHICH HAVE INVESTED IN THE SAID 11 COMPANIES. THE A O HAD MADE EXHAUSTIVE ENQUIRY AND ANALYSIS BEFORE REACHING TO THIS CONCLU SION. THE LEARNED COUNSEL HAS ALSO ALLEGED THAT THE THIRD PARTY UNILATERAL ACT CA NNOT BE THE BASIS OF ADDITION BUT THE ADDITION, IN THIS CASE, HAS BEEN MADE NOT ON TH E BASIS OF THIRD PARTY UNILATERAL ACT BUT ON THE BASIS OF THE ASSESSEE'S OWN ADMISSIO N SUPPORTED BY OTHER ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 13 CORROBORATIVE EVIDENCES. IN THE LIGHT OF THESE FACT S AND CIRCUMSTANCES, THE ADDITION MADE BY THE AO IS CONFIRMED. THE GROUNDS OF APPEAL ARE DISMISSED. AGGRIEVED THE ASSESSEE IS UNDER FURTHER APPEAL BEFO RE US. 7. WE HAVE CAREFULLY HEARD THE ARGUMENTS ADVANCED B Y RESPECTIVE REPRESENTATIVES AND PERUSED RELEVANT MATERIAL ON RE CORD INCLUDING DOCUMENTS PLACED IN THE PAPER-BOOK. WE HAVE ALSO DE LIBERATED ON VARIOUS JUDICIAL PRONOUNCEMENTS AS CITED BEFORE US. WE HAVE ALREADY APPRECIATED THE SETTLED LEGAL POSITION REGARDING AD DITION U/S 68 AS ENUMERATED BY US IN THE OPENING PARAGRAPHS. OUR ADJ UDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCE EDING PARAGRAPHS. 8.1 UPON CAREFUL CONSIDERATION, THE FACTS THAT EMER GES ARE THAT THE ASSESSEE HAS ISSUED 20.70 LACS SHARES TO AS MANY AS 11 CORPORATE ENTITIES DURING THE YEAR AS TABULATED IN PARA 5.3 A BOVE. AS EVIDENT FROM DOCUMENTS ON RECORD, THESE SHARES WERE ISSUED AT FA CE VALUE OF RS.10/- PER SHARE. THE SHARE CAPITAL OF THE ASSESSEE INCREA SED BY RS.207 LACS DURING THE YEAR UNDER CONSIDERATION. IN THE LIGHT O F SETTLED LEGAL POSITION AS ENUMERATED BY US IN THE OPENING PARAGRAPHS, IT I S QUITE EVIDENT THAT THE PRIMARY ONUS WAS ON ASSESSEE TO PROVE THE FULFI LMENT OF THREE INGREDIENTS OF SEC. 68 VIZ. (I) IDENTITY OF THE INV ESTOR; (II) CREDITWORTHINESS OF THE INVESTORS; & (III) GENUINENESS OF THE TRANSA CTIONS. 8.2 TO DEMONSTRATE FULFILLMENT OF THESE INGREDIENTS , THE ASSESSEE HAD DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS, FURNISHED FOLLOWING BROAD DOCUMENTARY EVIDENCES WITH RESPECT TO ALL THE 11 ENTITIES: - (I) SHARE APPLICATION FORM (II) COPY OF CHEQUE (III) COPY OF CHEQUE DEPOSIT SLIP (IV) COPY OF INVESTORS BANK STATEMENT ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 14 (V) COPY OF SHARE CERTIFICATE COUNTERFOIL (VI) COPY OF AUDIT REPORT ALONG WITH FINANCIAL STAT EMENTS OF THE INVESTOR ENTITY (VII) COPY OF ITR ACKNOWLEDGEMENT OF THE INVESTOR E NTITY (VIII) COPY OF CERTIFICATE OF INCORPORATION OF INVE STOR ENTITY (IX) MEMORANDUM & ARTICLES OF ASSOCIATION OF INVEST OR ENTITY (X) COMPANY MASTER DATA SHOWING STATUS AS ACTIVE (XI) COPY OF BOARD RESOLUTION THE ASSESSEES OWN BANK STATEMENT WAS ALSO PLACED O N RECORD WHICH WOULD SHOW THAT ALL THE TRANSACTIONS HAVE TAKEN THR OUGH BANKING CHANNELS. UPON CAREFUL CONSIDERATION OF THESE DOCUM ENTS, WE FIND THAT SO FAR AS THE IDENTITY OF THE INVESTOR ENTITIES ARE CONCERNED, THE SAME STAND PROVED BY CERTIFICATE OF INCORPORATION WHICH IS HELD TO BE CONCLUSIVE PROOF OF REGISTRATION OF A CORPORATE ENTITY. THE CR EDITWORTHINESS OF THE ENTITIES WOULD STAND SATISFIED BY THE FINANCIAL STA TEMENTS OF THE INVESTOR ENTITIES, WHICH ARE ALSO PLACED ON RECORD. THE GENU INENESS OF THE TRANSACTIONS WOULD STAND PROVED BY THE FACT THAT TH E TRANSACTIONS WERE DULY SUPPORTED BY SHARE APPLICATION FORM, SHARE CER TIFICATES, COPY OF BOARD RESOLUTION AND BY THE FACT THAT ULTIMATELY TH E SHARES WERE ALLOTTED TO ALL THESE ENTITIES. THE ASSESSEE HAS TABULATED T HE NET WORTH OF ALL THESE ENTITIES IN THE FOLLOWING MANNER: - NO. NAME OF INV ESTOR AMOUNT OF SHARE CAPITAL INVESTED SH ARE CAPI TAL OF INVESTOR ENTITY RESERVES OF INVESTOR ENTITIES NET WO RTH O F INVESTOR ENTITIES 1 LIMELIGHT DEALCOM P. LTD. 15,00,000 16,85,000 3,01,30,806 3,18,15,806 2 CLASSIC COMMOTRADE P. LTD. 5,00,000 6,51,800 2,70,49,015 2,77,00,815 3 DIVY PRAKASH SUPPLIERS PVT. LTD. 25,00,000 1,00,02,450 33,68,50,695 34,68,53,145 4 GOLDY DEALCOM P. LTD. 25,00,000 7,21,000 3,04,44,166 3,11,65,166 5 NEXTGEN TRADECOM P. LTD. 20,00,000 57,65,000 10,76,35,000 11,34,00,000 6 REXNOX TREXIM P. LTD. 18,00,000 1,15,57,100 15,93,97,977 17,09,55,077 7 RAJLAXMI DEALCOM P. LTD. 18,00,000 60,10,000 11,22,95,755 11,83,05,755 8 VANILLA TIE-UP P. LTD. 15,00,000 13,50,000 6,12,92,898 6,26,42,898 9 KAMAKHYA GOODS P. LTD. 24,00,000 7,72,000 3,29,46,126 3,37,18,126 ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 15 10. CAMELLIA COMMERCIA P LTD 10,00,000 8,32,280 3,58,97,644 3,67,29,924 11 ANMOL COMMERCE P LTD 32,00,000 1,81,03,500 28,24,38,553 30,05,42,053 TOTAL 2 07,00,000 5,74,5 0,130 1,21,63,78,635 1,27,38,28,765 THE PERUSAL OF NET WORTH CHART WOULD REVEAL THAT AL L THE INVESTOR ENTITIES HAD SUFFICIENT NET WORTH TO MAKE STATED INVESTMENT IN THE ASSESSEE COMPANY. UPON PERUSAL OF ALL THESE DOCUMENTARY EVID ENCES, IT COULD SAFELY BE CONCLUDED THAT THE ASSESSEE HAD SUCCESSFU LLY DISCHARGED THE ONUS CASTED UPON HIM U/S 68 AND THE ONUS WAS ON REV ENUE TO REBUT ASSESSEES EVIDENCES. 8.3 PROCEEDING FURTHER, WE FIND THAT THE SOLE BASIS OF MAKING IMPUGNED ADDITION IS THE STATEMENT OF ONE OF THE DIRECTORS A S RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS U/S 133A. HOWEVER, THI S STATEMENT HAS BEEN RETRACTED WITHIN A SPAN OF 7 DAYS. IT IS SETTL ED LAW THAT STATEMENTS RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS WO ULD NOT HAVE MUCH EVIDENTIARY VALUE UNLESS THE SAME ARE BACKED BY CRE DIBLE EVIDENCES. THIS POSITION HAS BEEN SETTLED BY HONBLE SUPREME C OURT IN THE CASE OF CIT V/S S.KHADER KHAN & SONS (25 TAXMANN.COM 413). THE CBDT INSTRUCTIONS NO. F.NO.286/98/2013-IT (INV. II) DATE D 18/12/2014 ALSO DISCOURAGES CONFESSIONAL STATEMENTS WITHOUT ANY CRE DIBLE EVIDENCES. NO INCRIMINATING MATERIAL IS SHOWN TO HAVE BEEN FOUND DURING THE COURSE OF SURVEY PROCEEDINGS. 8.4 WE ALSO FIND THAT LEARNED CIT(A) HAS GONE BY I RRELEVANT CONSIDERATIONS TO CONFIRM THE IMPUGNED ADDITIONS. T HE OBJECT CLAUSE OF THE INVESTOR ENTITIES WOULD HAVE NO RELEVANCE VIS- -VIS PROPOSED ADDITIONS IN THE HANDS OF THE ASSESSEE U/S 68. IT I S TRITE LAW THAT NO ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 16 ADDITIONS COULD BE MADE MERELY ON THE BASIS OF SUSP ICION, CONJECTURES OR SURMISES. 8.5 THE LD. DR HAS RELIED UPON THE CASE OF HONBLE SUPREME COURT IN SUMATI DAYAL VS CIT (80 TAXMAN 89) & DURGA PRASAD M ORE (82 ITR 540 26/08/1971). NO DOUBT THAT THE REVENUE AUTHORITIES WERE NOT REQUIRED TO PUT BLINKERS WHILE LOOKING AT THE DOCUM ENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDI NG CIRCUMSTANCES TO FIND OUT THE REALITY OF THE DOCUMENTS PRODUCED BEFO RE THEM. HOWEVER, WE FIND THAT NO SUCH INQUIRIES HAVE BEEN MADE BY THE A UTHORITIES EXCEPT FOR THE ALLEGATIONS THAT THE SHARE CAPITAL WAS BOGUS IN NATURE. NOTHING WAS BROUGHT ON RECORD THAT TO SUBSTANTIATE THE FACT THA T THE ASSESSEES UNACCOUNTED MONEY WAS ROUTED IN THE BOOKS IN THE GA RB OF SHARE CAPITAL. 8.6 THE ENTIRETY OF FACTS AND CIRCUMSTANCES AS ENUM ERATED HEREINABOVE DO NOT CONVINCE US TO CONCUR WITH THE S TAND OF LD. CIT(A). THE IMPUGNED ADDITIONS, IN OUR CONSIDERED OPINION, COULD NOT BE SUSTAINED UNDER LAW IN THE LIGHT OF BINDING JUDICIA L PRONOUNCEMENTS AS ENUMERATED BY US IN THE OPENING PARAGRAPHS. THEREFO RE, WE DELETE THE SAME. CONSEQUENTLY, THE SET-OFF OF LOSSES, AS ALLOW ABLE UNDER LAW, WOULD BE AVAILABLE TO THE ASSESSEE. GROUND NOS. 4 STAND A LLOWED. GROUND NO.5 STAND ALLOWED FOR STATISTICAL PURPOSES. GROUND NOS. 6 TO 8, BEING CONSEQUENTIAL IN NATURE, WOULD NOT REQUIRE ANY SPEC IFIC ADJUDICATION ON OUR PART. 8.7 SO FAR AS THE LEGAL GROUNDS ARE CONCERNED, WE F IND THAT THE ORIGINAL RETURN WAS PROCESSED U/S 143(1) AND THE ONLY REQUIR EMENT IN LAW TO TRIGGER ASSESSMENT WAS THAT LD. AO CERTAIN REASONS TO BELIEVE THAT CERTAIN INCOME ESCAPED ASSESSMENT IN THE HANDS OF T HE ASSESSEE. WE ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 17 FIND THAT LD. AO WAS CLINCHED WITH TANGIBLE INFORMA TION FROM INVESTIGATION WING WHICH SUGGESTED POSSIBLE ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSESSEE. IN OUR OPINION, NOTHING MORE WAS REQU IRED AT THIS STAGE SINCE LD. AO HAD SUFFICIENT REASONS TO FORM SUCH A BELIEF. THEREFORE, WE DO NOT FIND MUCH SUBSTANCE IN ASSESSEES LEGAL GROU NDS. GROUND NOS. 1 TO 3 STAND DISMISSED. 8.8 THE APPEAL STANDS PARTLY ALLOWED IN TERMS OF OU R ABOVE ORDER. ITA NO. 632/MUM/2019, AY 2012-13 9. FACTS ARE PARI-MATERIA THE SAME IN THIS YEAR. AN ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 ON 22/12/2017 ON SIMIL AR LINES WHEREIN THE ASSESSEE WAS SADDLED WITH ADDITION U/S 68 FOR RS.75 LACS. THE IMPUGNED ORDER IS ON SIMILAR LINES. THE ASSESSEE IS BEFORE US BROADLY WITH SIMILAR GROUNDS OF APPEAL. THE ASSESSEE, IN SU PPORT OF TRANSACTIONS, HAS PLACED ON RECORD SIMILAR SET OF DOCUMENTARY EVI DENCES. FACTS BEING PARI-MATERIA THE SAME, OUR ADJUDICATION AS FOR AY 2 011-12 SHALL MUTATIS MUTANDIS APPLY TO THIS YEAR ALSO. RESULTANTLY, THE APPEAL ST ANDS PARTLY ALLOWED. CONCLUSION 10. BOTH THE APPEALS STAND PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH, 2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 12/03/2020 SR.PS, JAISY VARGHESE ITA NOS.631 & 632/MUM/2019 M/S. BINI BUILDERS PVT. LTD. ASSESSMENT YEARS :2011-12 & 2012-13 18 !'! / COPY OF THE ORDER FORWARDED TO : 1. ') / THE APPELLANT 2. *+') / THE RESPONDENT 3. 2 ( ) / THE CIT(A) 4. 2 / CIT CONCERNED 5. 34*-5 , 5 , / DR, ITAT, MUMBAI 6. 4678 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.