DCIT CIR 6(3)(2), MUMBAI V. K.K. WELDING LTD, MUMBAI

ITA 637/MUM/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0421 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 08-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K S RAJENDRA KUMAR
• Keywords: Unexplained cash credit; Tangible material; Accommodation entries; Onus to prove; Reason to believe
• Section: 143(3); 147; 68; 148; 132

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM & SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 637/MUM/2016 ( / ASSESSMENT YEAR: 2007 - 08 ) DCIT CIR - 6 (3) (2 ) ROOM NO. 522 , 5 TH FLOOR, AAAYAKARBHAVAN, M. K. ROAD , MUMBAI - 40002 0 / VS. K. K. WELDING LTD 128 MICRO HOUSE, NARAYAN DHURU STREET, MASJID BUNDER MUMBAI - 400003 . ./ ./ PAN NO. AA BCK6831F ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI K. S. RAJENDRA KUMAR, DR / RESPONDENTBY : SHRI MANI JAIN, AR / DATE OF HEARING : 31.08 .1 8 / DATE OF PRONOUNCEMENT : 27.11.18 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 12, MUMBAI DATED 30.11 .15 F OR AY 20 07 - 08 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE REOPEN ING ASSESSMENT PROCEEDINGS WITHOUT CONSIDERING THE ACTION TAKEN IN THE CASE AS PER THE PROVISION OF SECTION 147 OF THE ACT.' 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF SHARE CAPITAL UN DER SECTION 68 OF THE ACT AS THE ONUS TO PROVE THE IDENTITY, CAPACITY AND CREDIT WORTHINESS OF THE PERSONS WAS ALSO PRIMARILY ON THE ASSESSEE COMPANY ONLY AND IT HAS FAILED TO DISCHARGE THE ONUS ON BOTH COUNTS.' 3. THE APPELLANT CRAVES LEAVE TO AMEND OR AL TER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.' 2. THE B RIEF FACTS OF THE CASE ARE THAT THE ASSESSEE E - FILED THE ORIGINAL RETURN OF INCOME U/S 139(1) ON 29.10.07 DECLARING TOTAL INCOME OF RS. 51,61,020/ - . THEREAFTER, THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY AND AFTER SERVING STATUTORY NOTICES AND SEEKING REPLY OF THE ASSESSEE , ORDER OF ASSESSMENT U/S 143(3) W AS COMPLET ED BY THE AO ON 21.12.09 THEREBY ASSESSING TOTAL INCOME 3 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD OF RS. 53,11,020. SUBSEQUENTLY, THE CASE WAS REOPENED U/S 14 7 AND ORDER WAS PASSED U/S 143(3) R.W.S. 147 ON 18.03.15 ON A TOTAL INCOME OF RS. 11,03,11,020/ - . AGGRIE VED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES , ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITIONS. NOW BEFORE US, THE REVENUE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. 1. 3. THIS GROUND RAISED BY THE REVENUE RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN DELETING THE REOPENING ASSESSMENT PROCEEDINGS WITHOUT CONSIDERING THE ACTION TAKEN IN THE CASE AS PER THE PROVI SION OF SECTION 147 OF THE ACT. 4. WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AT LENGTH AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. 4 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD AS PER THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAS ORIGINALLY FILED RETURN OF INCOME ON 29.10.07 DECLARING TOTAL INCOME OF RS. 51,63,020/ - . SUBSEQUENTLY, SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 21.12.09 THEREBY ASSESSING TOTAL INCOME AT RS. 53,11,020/ - . IN THIS CASE, INFORMATION WAS RECEIVED FROM THE OFFICE OF DGIT(INV), MU MBAI VIDE LETTER NO. DGIT INV/INFORMATION/PJ - 2013 - 14 DATED 07.03.14, ON THE BASIS OF WHICH, THE CASE WAS REOPENED U/S 147 OF THE ACT ON ACCOUNT OF FOLLOWING REASONS: - 'THAT A SEARCH ACTION U/S 132 OF THE I .T ACT, WAS CONDUCTED IN THE CASE OF PRAVIN KUMAR JAIN & GROUP ON 01 .10. 2013. DURING THE COURSE OF SEARCH PROCEEDINGS S TATEMENT OF SHRI PRAVIN KUMAR JAIN WAS RECORDED U/S 132(4) OF THE I.T ACT, IN WHICH HE ADMITTED THAT HE IS INDULGED IN PROVIDING ACCOMMODATIONS ENT RIE S AND ALSO EXPLAINED THE COMPL ETE MODUS OPERANDI OF PROVIDING SUCH ENTRIES. THE DGIT(INV) HAS GIVEN THE EXTRACT OF THE STATEMENT Q. 66 FROM WHICH IT IS OBSERVED THAT SHRI PRAVIN KUMAR JOIN IS ENGAGED IN THE BUSINESS OF GIVING ACCOMMODATION ENTRIES WHICH ARE ROUTED THROUGH THE COMPANIES UNDER HIS CONTROL. ALL THE COMPANIES EITH ER OWNED BY SHRI PRAVIN KUMAR JA IN, DIRECTLY/INDIRECTLY UNDER HIS CONTROL ARE PAPER 5 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD COMPANIES WITH NO REAL BUSINESS TR A NSACTION. I N MOST OF THESE CASE S , VARIOUS BROKERS WHO OPERATE IN THE FIELD OF PROVIDING ACCOMMO DATION E NTRIES APPROACH HIM WHEN THEY WA NT A CERTAIN TYPE OF ACCOMMODATION ENTRY LIKE BOGUS UNSECURED LOAN, BOGUS LTCG ETC. DURING THE SEARCH PROCEEDING, SHRI PRAVIN KUMAR JA IN HAS ALSO GIVEN THE LIST OF HIS GROUP COMPANIES WHEREFORE ACCOMMODATION ENTRIES HAVE BEEN PROVIDED TO THE BENEFICIARIES. THE DGIT(INV) HAS FORWARDED THE LIST OF ALL THE BENEFICIARIES OF THE ACCOMMODATION ENTRIES PER TAIN TO JURISDICTION OF THE CIT - 6, MUMBAI. FROM THE LIST IT IS SEEN THAT M/ S K K WELDING LTD. PAN:AABCK683 1 F INVESTED AMO UNTIN G TO RS. 75,00,000/ - DURING THE FY 2006 - 07 IN THE CONCERN M/ S JAVDA INDIA IMPEX LTD. CONTROLLED AND MANAGED BY SHRI PRAVIN KUMAR JAIN. AS SHRI PRAVIN KUMAR JAIN HAS ADMITTED THAT THIS GROUP COMPANIES WHICH INCLUDE ABOVE PARTY, ARE ENGAGED IN PROVIDIN G ACCOMMODATION ENTRIES, IT IS CLEAR THAT THE SUMS SHOWN AGAINST THE ASSESSEE TO HAVE BEEN RECEIVED FROM THE ABOVE PARTY IS NOTHING BUT AN ACCOMMODATION ENTRY TAKEN BY THE ASSESSEE TO BRING ITS UNACCOUNTED MONEY ITS BOOKS OF ACCOUNTS . 6 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD 5. ON THE BASIS OF ABOVE REASONING, THE AO REOPENED THE ASSESSMENT AFTER PROVIDING DUE OPPORTUNITY TO THE ASSESSEE. CONSEQUENTLY, THE ADDITIONS WERE MADE IN THE RE - ASSESSMENT PROCEEDINGS ON ACCOUNT OF SHARE PREMIUM AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT. THE LD. CIT(A) SET ASIDE THE ORDER OF RE - OPENING AND CONSEQUENTLY DELETED THE ADDITIONS BY HOLDING THAT THE ISSUE OF GENUINENESS OF SHARE APPLICATION MONEY WAS ALREADY RAISED DURING THE ASSESSMENT PROCEEDING U/S 143(3) OF THE ACT AND THE AO MERELY ON THE STATEMENT OF PRAVIN KUMAR JAIN HAD REOPENED THE ASSESSMENT MORE PARTICULARLY WHEN THE STATEMENT OF PRAVIN KUMAR JAIN WAS GENERAL AND NO REFERENCE OF ANY TRANSACTION WITH THE ASSESSEE WAS MENTIONED THEREIN AND THEREFORE THE SAID STATEMENT CANNOT BE TAKEN AS A LIVE L INK OR CLOSE NEXSUS BETWEEN THE MATERIAL BEFORE THE ASSESSING OFFICER AND THE STATEMENT OF PRAVIN KUMAR JAIN COULD NOT BE ANY BASIS TO FORM A BELIEF THAT THERE IS ESCAPEMENT OF INCOME. 6. ON THE CONTRARY, WE HAVE SEEN THAT DURING THE SEARCH ACTION U/S 132 OF THE I.T. ACT IN THE CASE OF PRAVIN KUMAR JAIN AND GROUP ON 01.10.13, STATEMENT OF PRAVIN KUMAR JAIN WAS RECORDED U/S 132(4) OF THE ACT, IN WHICH HE CATEGORICALLY ADMITTED THAT HE 7 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD IS INDULGED IN PROVIDING ACCOMMODATION ENTRIES AND ALSO EXPLAINED THE COM PLETE MODUS OPERANDI OF PROVIDING SEARCH ENTRIES. PRAVIN KUMAR JAIN ALSO GIVEN THE LIST OF HIS GROUP COMPANIES WHEREFROM ACCOMMODATION ENTRIES HAVE BEEN PROVIDED TO THE BENEFICIARIES. FROM THE LIST, IT WAS ANALYZED BY THE AO THAT THE ASSESSEE INVESTED AMOU NT IN THE CONCERNS M/S JAVDA INDIA IMPEX LTD, CONTROLLED AND MANAGED BY PRAVIN KUMAR JAIN AND THE SAID PRAVIN KUMAR JAIN HAD ALSO CATEGORICALLY ADMITTED THAT THIS GROUP COMPANY ARE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. THUS AFTER ANALYZING THE ORDERS PASSED BY THE REVENUE AUTHORITIES, WE NOTICED THAT THE AO INITIATED THE REOPENING PROCEEDINGS ON THE BASIS OF TANGIBLE MATERIAL WHICH WAS PROVIDED AFTER PROPER VERIFICATION AND INQUIRIES BY THE DGIT( INV), MUMBAI. WE HAVE NOTICED THAT FROM THE REASONS RECORDED, IT IS CLEAR THAT AO HAS CONSIDERED THE MATERIAL RECEIVED FROM THE GOVT. DEPARETMENT AND MADE HIS BELIEF REGARDING ESCAPEMENT OF INCOME. IN THIS RESPECT, THE HONBLE APEX COURT IN THE CASE OF IT O VS. LAKHMANIMEWAL DAS (1976) [103 ITR 437 (SC)], PHOOL CHAND BAJRANG LAL &ANR. VS. ITO &ANR. (SC) 203 ITR 456, RAYMOND WOOLLEN MILLS VS. ITO (SC) 236 8 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD ITR 34 HAS HELD THAT SUFFICIENCY OF REASON IS NOT OPEN TO QUESTION IN A COURT OF LAW, BUT THE EXISTENCE OF BELIEF CAN BE CHALLENGED. AS PER THE PRESENT CASE, THE INFORMATION WAS RECEIVED FROM THE GOVT. DEPARTMENT, THEREFORE PRESUMPTION OF CORRECTNESS WAS ATTACHED WITH THE SAID INFORMATION AND IT WAS SUFFICIENT TO MAKE A BELIEF REGARDING ESCAPEMENT OF INC OME AND EVEN THE HONBLE MADRAS HIGH COURT IN THE CASE OF SERLITE INDUSTRIES LTD. VS. ACIT 302 ITR 275 HAD HELD THAT INFORMATION RECEIVED FROM ENFORCEMENT DIRECTORATE SHOWING POSSIBLE INFLATION OF PURCHASES IS SUFFICIENT INFORMATION FOR ISSUING NOTICE U/S 148 OF THE I.T. ACT. 7. WE ARE ALSO OF THE VIEW THAT SINCE THE ASSESSEE WAS BENEFICIARY FROM BOGUS ENTRY PROVIDERS WHICH FORMED THE REASON TO BELIEVE BY THE AO THAT INCOME HAS ESCAPED ASSESSMENT. THE INFORMATION SO RECEIVED BY THE AO HAS LIVE LINK WITH R EASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. ON THESE INCRIMINATING TANGIBLE MATERIAL INFORMATION, ASSESSMENT WAS REOPENED. 8. AT THIS STAGE THERE HAS TO BE PRIMA FACIE BELIEF BASED ON SOME TANGIBLE AND MATERIAL INFORMATION ABOUT ESCAPEMENT OF 9 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD INCO ME AND THE SAME IS NOT REQUIRED TO BE PROVED TO THE GUILT. IN THIS REGARD, WE REFER TO THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT(A) VS. RAJESH JHAVERI STOCK BROKERS P. LTD, 291 ITR 500: - 'SECTION 147 AUTHORISES AND PERMITS THE ASSESSING OFF ICER TO ASSESS OR REASSESS INCOME CHARGEABLE TO LAX IF HE HAS REASON TO BELIEVE THAT INCOME FOR ANY ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. THE WORD 'REASON' IN THE PHRASE 'REASON TO BELIEVE' WOULD MEAN CAUSE OR JUSTIFICATION. IF THE AO HAS CAUSE OR JUSTIF ICATION TO KNOW OR SUPPOSE (HAT INCOME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEVE THAT AN INCOME HAD ESCAPED ASSESSMENT. THE EXPRESSION CANNOT BE READ TO MEAN THAT THE AO SHOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL STATUTE WITH SOLICITUDE FOR THE PUBLIC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXPAYERS. AS OBSERVED BY THE SUPREME COURT IN CENTRAL PROVINCES MANAGNESE ORE CO, LTD. V. ITO(1991) 191 ITR 662, FOR INITIATION OF ACTION UNDER SECTION 147(A) (AS THE PROVISION STOOD AT THE RELEVANT TIME) FULFILLMENT OF THE TWO REQUISITE CONDITIONS IN THAT REGARD IS ESSENTIAL. AT THAT STAGE, THE FINAL OUTCOME OF THE PROCEEDING IS NOT RELEVANT. IN OTHER WORDS, AT THE 10 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD INITIATION STAGE, WHAT IS REQUIRED IS 'REASON TO BELIEVE', BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. AT THE STAGE OF ISSUE OF NOTICE, THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUISITE BELIEF WHETHER THE MATERIALS WOULD CONCLUSIVELY PROVE THE ESCAPE MENT IS NOT THE CONCERN AT THAT STAGE. THIS IS SO BECAUSE THE FORMATION OF BELIEF BY THE AO IS WITHIN THE REALM OF SUBJECTIVE SATISFACTION ITO V. SELECTED DALURBAND COAL CO, (P.) LTD. (1996) 217 ITR 597 (SUPREME COURT): RAYMOND WOOLLEN MILLS LTD. V. ITO (1 999) 236 ITR 34 (SUPREME COURT).' 9. THEREFORE, AFTER CONSIDERING THE FACTS OF THE PRESENT CASE, WE ARE OF THE CONSIDERED VIEW THAT THE INFORMATION RECEIVED FROM THE GOVT. DEPTT WAS SUFFICIENT TO MAKE A BELIEF REGARDING ESCAPEMENT OF INCOME BY THE AO. THE AO MADE A BELIEF REGARDING ESCAPEMENT OF INCOME BEFORE ISSUING NOTICE U/S 148 OF THE I.T. ACT, THEREFORE THE LD. CIT(A) WAS NOT CORRECT IN SETTING ASIDE THE ORDER OF REOPENING MADE BY AO. C ONSIDERING THE PRECEDENCE OF APEX COURT FULLY JUSTIFY THE VALIDITY OF REOPENING 11 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD IN THIS CASE. THEREFORE THIS GROUND RAISED BY THE REVENUE IS ALLOWED. GROUND NO. 2 10 . THIS GROUND RAISED BY THE REVENUE RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN DELETING THE ADDITION OF SHARE CAPITAL UNDER SECTION 68 OF THE ACT AS THE ONUS TO PROVE THE IDENTITY, CAPACITY AND CREDIT WORTHINESS OF THE PERSONS WAS ALSO PRIMARILY ON THE ASSESSEE COMPANY ONLY AND IT HAS FAILED TO DIS CHARGE THE ONUS ON BOTH COUNTS. 11 . WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AT LENGTH AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A) HAS DEALT WITH THE ABOVE GROUNDS RAISED BY THE REVENUE IN PARA NO. 8 OF ITS ORDER. THE OPERATIVE PORTION OF THE ORDER OF LD. CIT(A) IS CONTAINED IN SUB - PARA NO. 8 OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - 12 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD IN VIEW OF THE ABOVE MENTIONED JUDGEMENTS, IT IS SEEN THAT THE FACTS OF THE CASES ARE IDENTICAL WITH THE FACTS OF THE APPELLANT'S CASE HERE. IN THE MENTIONED JUDGMENTS THE APPELLANT HAS SUBMITTED ALL THE DOCUMENTS TO DISCHARGE THE INITIAL ONUS LYING UPON THE APPELLANT. HERE T HE APPELLANT HAS ALSO SUBMITTED ALL THE DOCUMENTS TO DISCHARGE THE ONUS LYING UPON IT LIKE MASTER DATA OF ALL THE LISTED ANDPRIVATE COMPANIES WHO HAS SUBSCRIBED THE SHARES IN THE APPELLANT'S COMPANY, BANK STATEMENT, CONFIRMATIONS AND AUDIT REPORT ETC. AS T HE APPELLANT HAS DISCHARGED THE INITIAL ONUS LYING AND THE AO HAS FAILED TO CONDUCT FURTHER INQUIRY OF CROSS - EXAMINATION, THE A.O IS DIRECTED TO DELETE THE ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY. AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AS WELL AS CONSIDERING THE ORDERS PASSED BY REVENUE AUTHORITIES AND SUBMISSIONS MADE BY BOTH THE PARTI ES, WE FIND THAT LD. CIT(A) HAD DELETED THE ADDITIONS ON ACCOUNT OF SHARE APPLICATION MONEY ONLY BY RELYING UPON THE JUDGMENTS MENTIONED IN THE ORDER AND HAD NOT DISCUSSED THE FACTS OF THE PRESENT CASE. WHEREAS ON THE CONTRARY, THE AO WHILE MAKING THE ADDITIONS ON ACCOUNT OF SHARE PREMIUM AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT HAD 13 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD AFTER CARRYING OUT VERIFICATION SPECIFICALLY STATED THAT THE TRANSACTIONS ENTERED BY THE ASSESSEE WERE NOT NORMAL, UNNATURAL AND SUSPICIOUS. THE AO IN ORDER TO EXAMINE THE GENUINESS OF SHARE PREMIUM RECEIVED BY THE ASSESSEE HAD ASKED THE ASSESSEE TO FURNISH THE DETAILS OF SHARE PREMIUM AND OTHER RELEVANT RECORDS, BU T THE FINANCIAL STATEMENTS AND BANK STATEMENTS OF THE INVESTORS I.E. PET PLASTIC LTD, HEMA TRADING CO. PVT. LTD, JAVDA INDIA IMPEX LTD, REAL GOLD TRADING CO. PVT. LTD., LEXUS INFOTEC LTD. WERE NOT SUBMITTED AND NO DETAILS WITH RESPECT TO VIREN DIAMONDS EXP ORTS LTD. TO WHOM 29,000 SHARES WERE ALLOTTED. THE AO ALSO CATEGORICALLY MENTIONED THAT IN THE ABSENCE OF DOCUMENTARY EVIDENCE, IT WAS DIFFICULT TO JUDGE THE CREDITWORTHINESS OF THE INVESTORS AND GENUINENESS OF TRANSACTION. THE ASSESSEE HAD NOT EVEN PROVID ED ANY BASIS FOR ADOPTING SHARE PRICE OF RS. 100 PER SHARE AND THE METHOD ADOPTED FOR VALUING SHARE IS NOT FOUND TO BE ACCEPTABLE. THE ASSESSEE COMPANY HAD IGNORED TO CONSIDER THE EARNING PER SHARE TO DETERMINE THE FAIR VALUE OF THE SHARE. THEREFORE, CONSI DERING THE AUDIT RESULTS, THE AO RECORDED THAT IT WAS IMPRACTICAL AND UNREASONABLE TO 14 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD DETERMINE THE FAIR VALUE OF SHARE AT RS. 100 WHICH WAS 28.16 TIMES MORE THAN THE NORMAL EPS OF THE ASSESSEE COMPANY. 12. MERELY ESTABLISHING THE IDENTITY OF THE CREDITOR WAS NOT SUFFICIENT AS HAD ALREADY BEEN HELD A NUMBER OF DECISIONS INCLUDING SHANKAR INDUSTRIES VRS. CIT 1978 114 ITR 689 (KOL), IN THE CASE OF CIT VRS. PRECISION FINANCE PVT. LTD. 208 ITR 465 (KOL), IT WAS HELD THAT PAYMENT BY THE ACCOUNT PAYEE CHEQUE WAS ALSO NOT SACROSANCT AND THIS CANNOT MAKE A BOGUS TRANSACTION AS GENUINE. AS PER SECTION 68 OF THE ACT, THE BURDEN IS ON THE ASSESSEE TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTIONS AS HAS BEEN HELD BY THE HONBLE SUPREME COURT IN THE CA SE OF GOVINDARAJULU MUDALIAR VRS. CIT (1958) 34 ITR 807 . 13. THE LD. CIT(A) HAD NOT CONTROVERTED THE FACTUAL FINDINGS RECORDED BY AO. WHEREAS IT IS A PRIMARY DUTY OF LD. CIT(A) TO DISCUSS AND DEAL WITH ALL THE RELEVANT FACTS WHILE DEALING THE APPEAL. IT W OULD BE RELEVANT HERE TO QUOTE THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VRS. JANSAMPARK ADVERTISING AND MARKETING PVT. LTD. 15 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD 14. THE HONBLE APEX COURT IN THE CASE OF KAPURCHAND SHRIMAL VRS. CIT 1981 131(ITR) PAGE 451 HAS HELD THAT T HE DUTY OF THE TRIBUNAL DOES NOT END WITH MAKING A DECLARATION THAT THE ASSESSMENTS ARE ILLEGAL AND IT IS DUTY BOUND TO ISSUE FURTHER DIRECTIONS. THE APPELLATE AUTHORITY HAS THE JURISDICTION AS WELL AS THE DUTY TO CORRECT ALL ERRORS IN THE PROCEEDING S UNDER APPEAL AND TO ISSUE, IF NECESSARY, APPROPRIATE DIRECTIONS TO THE AUTHORITY AGAINST WHOSE DECISION THE APPEAL IS PREFERRED TO DISPOSE OF THE WHOLE OR ANY PART OF THE MATTER AFRESH UNLESS FORBIDDEN FROM DOING SO BY THE STATUTE AND THE STATUT E DOES NOT SAY THAT SUCH A DIRECTION CANNOT BE ISSUED BY THE APPELLATE AUTHORITY IN A CASE OF THIS NATURE. 15. THEREFORE, C ONSIDERING THE ABOVE JUDGMENT AND KEEPING IN VIEW THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF CIT(A) WITH A DIRECTION TO PASS AFRESH ORDER IN RESPECT OF ADDITIONS ON ACCOUNT OF SHARE PREMIUM AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT AFTER TAKING INTO CONSIDERATION THE FACTUAL FINDINGS RECORDED BY THE AO. IT IS NEEDLESS HERE TO MENTION THAT BEFORE PASSING THE ORDER , 16 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD THE LD. CIT(A) SHALL PROVIDE SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESS E E. BEFORE PARTING, WE MAY MAKE IT CLEAR THAT OUR DECISION TO RESTORE T HE MATTER BACK TO THE FILE OF LD. CIT(A) SHALL IN NO WAY BE CONSTRUED AS HAVING ANY REFLECTION OR EXPRESSION ON THE MERITS OF THE DISPUTE, WHICH SHALL BE ADJUDICATED BY THE LD. CIT(A) INDEPENDENTLY IN ACCORDANCE WITH LAW. WITH THESE DIRECTIONS, THIS GROUND OF APPEAL FILED BY THE REVENUE IS ALLOW ED FOR STATISTICAL PURPOSES. GROUND NO. 3 16 . THIS GROUND IS GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. 17 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOV, 2018 SD/ - SD/ - ( R. C. SHARMA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 27 . 11 .201 8 SR.PS . DHANANJAY 17 I.T.A. NO. 637 /MUM/201 6 K. K. WELDING LTD / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI