Ocean Thermoplastics Elastomers P.Ltd, New Delhi V. DCIT, Circle-19(1) & 19(2), New Delhi

ITA 655/DEL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3071 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 30-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts; Bogus Share capital; Business income; Opportunity of being heard; Additional evidence; Question of law; Accommodation entries; Onus to prove; Reassessment proceedings; Set aside
• Section: 143(3); 205; 195; 250; 143(2); 64; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO.655/DEL/2019 ASSESSMENT YEAR: 2012-13 M/S. OCEAN THERMOPLASTICS ELASTOMERS PVT. LTD., BN-19, PASCHIM SHALIMAR BAGH, NEW DELHI VS. DCIT, CIRCLE -19(1) & 19(2), NEW DELHI PAN :AAACO0193K (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST O RDER DATED 30.11.2018 PASSED BY THE LEARNED CIT(A)-36, NEW DEL HI [IN SHORT THE LEARNED CIT(A)] FOR ASSESSMENT YEAR 2012-13, RAISING FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE T HE LEARNED AO AND CIT (A)-36 WHILE PASSING THE ORDER J/S 143(3) R.W.S 144 AND U/S 250 RESPECTIVELY ERRED IN: A) UPHOLDINGTHE ADDITION OF RS. 12,91,000/- ON ACCO UNT OF UNEXPLAINED SHARE CAPITAL. B) UPHOLDINGTHE ADDITION OF RS.98,92,590/- ON ACCOU NT OF UNEXPLAINED SHARE PREMIUM. C) UPHOLDING THE ADDITION OF UNEXPLAINED SHARE CAPI TAL & UNEXPLAINED SHARE PREMIUM IN AY 2012-13 IN SPITE OF THE FACT TH AT A SUM OF RS. APPELLANT BY SHRI R.S. AHUJA, CA RESPONDENT BY SHRI K. HAUTHANG, SR.DR DATE OF HEARING 25.09.2019 DATE OF PRONOUNCEMENT 15.11.2019 2 ITA NO.655/DEL/2019 1,10,22,000/- REPRESENTING 1,00,200 EQUITY SHARES O F RS. 10 EACH AMOUNTING TO RS. 10,02,000/- & SHARE PREMIUM OF RS. 1,00,20,000/- @ RS.100 PER SHARE WAS RECEIVED IN AY 2011-12. D) UPHOLDINGTHE ADDITION OF RS.6,09,000/- ON ACCOUN T OF UNEXPLAINED UNSECURED LOANS. E) UPHOLDINGTHE ADDITION OF RS.1,97,04,926 ON ACCOU NT OF ADDITION OF TRADE PAYABLES. F) UPHOLDING THE REJECTION OF BOOKS OF ACCOUNTS BY THE A.O. U/S 145(3). 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE COMPANY WAS ENGAGED IN MANUFACTURING OF THERMOPLAST IC RUBBER COMPOUND WHICH IS USED IN MANUFACTURING OF SHOE SOL ES. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME ON 28.09.2012, DECLARING TOTAL INCOME OF RS.33,62,034/ -. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) WAS ISSUE D AND SERVED UPON THE ASSESSEE. IT IS NOTICED FROM THE ASSESSMEN T ORDER THAT SHRI DEEPAK JAIN, CA, ATTENDED ONCE BEFORE THE ASSE SSING OFFICER, HOWEVER, THEREAFTER, NO COMPLIANCE OF THE QUERIES R AISED BY THE ASSESSING OFFICER WERE MADE AND THUS, THE ASSESSING OFFICER AFTER ISSUING SHOW-CAUSE NOTICE COMPLETED THE ASSESSMENT IN TERMS OF SECTION 144 OF THE ACT, I.E., EX PARTE. THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE UNDE R SECTION 145(3) OF THE ACT AND ESTIMATED THE BUSINESS PROFIT @ 10% OF THE GROSS RECEIPT OF RS.19,86,90,745/- AND MADE ADDITIO N OF BUSINESS PROFIT OF RS.1,54,73,702/-. THE ASSESSING OFFICER A LSO MADE FOLLOWING ADDITIONS: (I) UNEXPLAINED SHARE CAPITAL OF RS.15,63,500/-; (II) UNEXPLAINED SHARE PREMIUM OF RS.1,28,90,090/-; (III) UNSECURED LOANS OF RS. 6,57,000/-; (IV) TRADE PAYABLES OF RS.1,97,07,926/- 3 ITA NO.655/DEL/2019 2.1 ON FURTHER APPEAL BEFORE THE LEARNED CIT(A), THE A SSESSEE FILED ADDITIONAL EVIDENCES AND SUBMITTED THAT DUE T O CHANGE OF ADDRESS, VARIOUS NOTICES ISSUED BY THE ASSESSING OF FICER COULD NOT BE SERVED UPON THE ASSESSEE AND, THEREFORE, THE ASS ESSEE COULD NOT COMPLY WITH THE QUERIES RAISED BY THE ASSESSING OFFICER. IN VIEW OF THE SUBMISSIONS OF THE ASSESSEE, THE LEARNE D CIT(A) ADMITTED THE ADDITIONAL EVIDENCE. HE, SUSTAINED THE REJECTIONS OF BOOKS OF ACCOUNT. HOWEVER, DELETED THE ADDITION MAD E OF BUSINESS INCOME OF RS.1,54,73,702/-. THE REMAINING ADDITIONS HAVE BEEN SUSTAINED BY THE LEARNED CIT(A), OBSERVING AS UNDER : FINDINGS: GROUND NOS. 2 & 3 (ADDITION OF SHARE CAPITAL AND ADDITION OF SHARE PR EMIUM) 4.3.5.4. DURING THE INSTANT YEAR, THERE IS AN IN CREASE OF RS. 15,63,500/- IN THE SHARE CAPITAL. IN THE ABSENCE OF ANY CONFIRMATION AND OTHER SUPPORTING DOCUMENTS, THE AO ADDED BACK T HE AMOUNT TO THE INCOME OF THE APPELLANT COMPANY AS UNEXPLAINED SHARE CAPITAL. DURING THE YEAR, THERE IS ALSO AN INCREASE OF RS. 1 ,28,90,090/- IN THE SHARE PREMIUM. FOR WANT OF ANY DOCUMENTARY EVIDENCE S OR ANY CONFIRMATION SUBMITTED BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS, THE AO ADDED BACK THE SAME TO THE INCO ME OF THE APPELLANT COMPANY AS UNEXPLAINED SHARE PREMIUM. THE AR OF THE APPELLANT HAS SUBMITTED THAT DURING T HE YEAR THE COMPANY HAS ALLOTTED 156350 EQUITY SHARES HAVING FA CE VALUE OF RS.10/- EACH AT A PREMIUM RS.100/- EACH. TOTAL AMOU NT THUS RECEIVED ON ACCOUNT OF SHARE CAPITAL IS 15,63,500/- AND RS.1,56,35,000/- ON ACCOUNT OF SHARE PREMIUM. A COP Y OF FORM NO.2 FILED WITH THE MINISTRY OF CORPORATE AFFAIRS DETAIL ING THE ALLOTMENT DETAILS HAS BEEN FILED ANNEXED AS PER ANNEXURE - 1 (ATTACHED WITH LETTER DATED 16.11.2018) WHICH IS KEPT ON RECORD. OUT OF THE ABOVE AMOUNT A SUM OF RS.1,10,22,000/- W AS RECEIVED AS SHARE APPLICATION DURING THE YEAR 2010-11 AND RS.64 ,98,000/- WERE RECEIVED DURING THE YEAR 2011-12, TOTALING TO RS.1, 75,20,000/- AGAINST WHICH SHARES HAS BEEN ALLOTTED FOR RS. 1,71 ,98,500/- BEING 156350 EQUITY SHARES HAVING FACE VALUE OF RS.10/- E ACH AT A PREMIUM OF RS.100/-. A DETAIL OF SHARE APPLICATION MONEY RECEIVED AND SHARES ALLOTMENT MADE HAS BEEN FILED ENCLOSED A S PER ANNEXURE 2 (ATTACHED WITH LETTER DATED 16.11.2018) WHICH I S KEPT ON RECORD. THE AR. OF THE APPELLANT HAS FILED COPIES OF CONFIR MATION, SHARE 4 ITA NO.655/DEL/2019 APPLICATION, BANK STATEMENT, ITRS FOR LAST THREE YE ARS AND STATEMENT OF AFFAIRS/BALANCE SHEET FOR THE LAST THREE YEARS I N RESPECT OF THE ALLOTTEES ATTACHED AS PER ANNEXURE - 3. 4.3.5.5. DURING APPELLATE PROCEEDINGS, VIDE LETTER DATED 16.11.2018, THE APPELLANT HAS SUBMITTED THE DETAILS OF THE SHAR E APPLICANTS, WHICH INCLUDE: NAME OF THE PARTY AMOUNT INCOME - RETURN FILED NATRAJ STEELS PVT . LTD 6,36,000 AY 2010 - 11 (3628) DEEPAK JAIN HUF 2,42,500 AY 2010-11 (1,58,800); AY 2011-12 (2,57,599); AY 2012-13 (2,00,000) NARENDRA KUMAR AGGARWAL 1,14,000 INDIVIDUAL RETURN NOT FILED BY APPELLANT. HUF RETURN FILED. RAVINDER KUMAR 1,03,500 AY 2010 - 11 (1,85,750) AY 2011-12 (1,96,849) AY 2012-13 (1,85,397) NARUSINGHA CHARAN SETHI/NC SETHI 72,500 AY 2010-11 (1,59,195) AY 2011-12 (1,59,624) AY 2012-13 (1,81,426) PUSHPA AGGARWAL 1,22,500 AY 2011 - 12 (2,36,100) AY 2011-12 (2,39,840) DHALU RAM PHULIA & SUBHAGWANTI PAHUJA 2,72,500 DHALU RAM PHULIA AY 2010-11 (7,07,009) AY 2011-12 (15,30,369) AY 2012-13 (9,46,798). * SUBHAGWANTI PAHUJA RETURNS NOT FILED BY APPELLANT TOTAL 15,63,500 DURING APPELLATE PROCEEDINGS, VIDE LETTER DATED 16. 11.2018, THE APPELLANT HAS SUBMITTED THE DETAILS OF THE SHARE AP PLICANTS, WHICH INCLUDE: NAME OF THE PARTY TOTAL AMOUNT ON SHARES ALLOTTED TILL 03.05.2011 AMOUNT RECEIVED IN 2010-11 & 2011-12 INCOME RETURN FILED PUSHPA AGGARWAL 13,47,500 16,50,000 AY 2011 - 12 (2,36,100) AY 2011-12 (2,39,840) RAVINDER KUMAR 11,38,500 11,43,000 AY 2010 - 11 (1,85,750) AY 2011-12 (1,96,849) AY 2012-13 (1,85,397) 5 ITA NO.655/DEL/2019 DEEPAK JAIN HUF 26,67,500 26,70,000 AY 2010 - 11 (1,58,800) AY 2011-12 (2,57,599) AY 2012-13 (2,00,000) NARUSINGHA CHARAN SETHI/NC SETHI 7,97,500 8,00,000 AY 2010 - 11 (1,59,195) AY 2011-12 (1,59,624) AY 2012-13 (1,81,426) NARENDRA KUMAR AGGARWAL HUF/N K AGGARWAL HUF 12,54, 000 12,57,000 AY 2010 - 11 (1,59,700) AY 2011-12 (1,59,240) AY 2012-13 (1,77,180) NATRAJ STEELS PVT LTD 69,96,000 70,00,000 AY 2010 - 11 (3628) DHALU RAM PHULIA 29,97,500 30,00,000 AY 2010 - 11 (7,07,009) AY 2011-12 (15,30,369) AY 2012-13 (9,46,798) 17.198,500 FROM THE ABOVE TWO CHARTS, IT CAN BE SEEN THAT ONLY DHALU RAM PHULIA HAS CREDITABLE TAXABLE INCOME FILED IN THE I NCOME TAX RETURNS AND THEREFORE, THE AMOUNT WITH RESPECT TO DHALU RAM PHULIA IS ACCEPTED AS GENUINE. THE OTHER SHARE APPLICANTS AND SHARE PREMIUM PARTIESD HAVE MEAGRE INCOME AND THEIR CREDITWORTHIN ESS IS NOT PROVED. IN THE ANALYSIS OF THE BANK STATEMENTS OF ALL THE S HARE APPLICANTS: PUSHPA AGGARWAL, RAVINDER KUMAR, DEEPAK JAIN HUF, N ARUSINGHA CHARAN SETHI/NC SETHI, NARENDRA KUMAR AGGARWAL HUF/ N K AGGARWAL HUF AND NATRAJ STEELS PVT LTD; IT IS SEEN THAT JUST PRIOR TO ISSUE OF FUNDS TO THE APPELLANT, AMOUNT IS BEING DE POSITED IN THE SHARE APPLICANT'S ACCOUNT. EVEN IN THE CASE OF DHALU RAM PHULIA, IT IS SEEN TH AT JUST PRIOR TO ISSUE OF FUNDS TO THE APPELLANT, AMOUNT IS BEING DE POSITED IN THE SHARE APPLICANT'S ACCOUNT, HOWEVER, AS THE SAID PAR TY HAS A CREDITABLE INCOME TAX RETURN FILED FOR THREE YEARS, THEREFORE, THE SAID PARTY IS ACCEPTED AS GENUINE. FOR THE BALANCE PARTI ES, THE RETURN OF INCOME BEING MEAGER AND THE FACT THAT AMOUNT IS DEP OSITED JUST BEFORE THE ISSUE OF CHEQUE TO THE APPELLANT, SHOWS THAT THE PARTIES DO NOT HAVE CREDITWORTHINESS AND THEREFORE, THE ADD ITION FOR THE BALANCE PARTIES ARE UPHELD. 4.3.5.6. SECTION 68 OF THE INCOME-TAX ACT, 1961 PRO VIDES THAT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF ASS ESSEE 6 ITA NO.655/DEL/2019 MAINTAINED 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 FOR THAT PREVIOUS YEAR. THE BURDEN OF PROOF IS HEAVILY CAST ON THE ASSESSEE. FIRST OF ALL , HE MUST FURNISH AN EXPLANATION AS OTHERWISE THE CASH CREDIT WILL BE TR EATED AS HIS INCOME. SECONDLY, THE EXPLANATION OFFERED MUST BE T O THE SATISFACTION OF THE ASSESSING OFFICER. IT IS BY NOW WELL-SETTLED THAT WHAT AIL IS REQUIRED FROM THE ASSESSEE BY WAY OF EXPLANATION IS , (I) THAT HE MUST ESTABLISH THE IDENTITY OF THE PAYER; (II) THAT HE M UST PROVE THE CREDITWORTHINESS OF THE PAYER, AND (III) THAT HE MU ST PROVE THE GENUINENESS OF THE TRANSACTION. IN THE CASE OF LOVE LY EXPORTS (P) LTD [216 CTR 195 SC] IT WAS HELD THAT, IF THE SHARE APP LICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMEN T IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN A CCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOM E OF ASSESSEE COMPANY. THE HON'BLE JURISDICTIONAL HIGH COURT IN I .T.A. NO. 665/2009 IN THE CASE OF CIT VS GOURDIN HERBALS INDI A LTD. ORDER DATED 17TH SEP. 2009 FOLLOWED THE JUDGMENT OF THE S UPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX L/S. LOVELY EXPORTS PVT. LTD., 216 CTR 195, AND HELD, 'THE ITAT HAS RIGHTLY HELD T HAT THE ASSESSEE HAD DISCHARGED ITS BURDEN. IN CASE THOSE THREE COMP ANIES HAD RECEIVED CERTAIN CASH, WHICH WERE DEPOSITED IN THE BANK ACCOUNTS, IT WAS FOR THE INCOME TAX DEPARTMENT TO TAKE ACTION AG AINST THE SAID COMPANIES. WE ARE, THEREFORE, OF THE OPINION THAT N O SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION IN THI S APPEAL, WHICH IS ACCORDINGLY DISMISSED.' DISTINGUISHING THE DECISION IN LOVELY EXPORTS (SUPR A), THE FOLLOWING JUDICIAL VIEWS IN FAVOUR OF REVENUE ARE DISCUSSED B ELOW: (I) RECENTLY, IN THE CASE OF NAVODAYA CASTLE [56 T AXMANN.COM 18 (SC)] IT WAS HELD THAT, HON'BLE HIGH COURT BY IMPUG NED ORDER HELD THAT CERTIFICATE OF INCORPORATION, PAN ETC., W ERE NOT SUFFICIENT FOR PURPOSE OF IDENTIFICATION OF SUBSCRI BER COMPANY WHEN THERE WAS MATERIAL TO SHOW THAT SUBSCRIBER WAS A PAPER COMPANY AND NOT A GENUINE INVESTOR - WHETHER SPECIA L LEAVE PETITION FILED AGAINST IMPUGNED ORDER WAS TO BE DIS MISSED - HELD, YES. (II) IN THE CASE OF CIT V. SOPHIA FINANCE LTD. 205 ITR 98 (DEL.) (F.B.) IT WAS HELD THAT, PROVISIONS OF S. 68 ARE APPLICABL E EVEN TO SHARE APPLICATION MONEY AND IF ON ENQUIRY IT IS FOUND THA T 'SHAREHOLDERS DO NOT EXIST, SUM CREDITED MAY BE TRE ATED AS ASSESSEE'S INCOME. (III) IN THE CASE OF TITAN SECURITIES LTD. [357 ITR 184 (DEL)] IT WAS HELD THAT, WHERE ASSESSING OFFICER FOUND THAT SHARE APPLICANTS IN CASE OF ASSESSEE-COMPANY WERE ESTABLISHED ENTRY OPERATORS GIVING ACCOMMODATION ENTRIES AND, THUS, HE ADDED AM OUNT PAID 7 ITA NO.655/DEL/2019 BY THEM TO ASSESSEE'S TAXABLE INCOME, TRIBUNAL WAS NOT JUSTIFIED IN DELETING SAID ADDITION WITHOUT PROPERL Y EXAMINING EVIDENCE BROUGHT ON RECORD BY ASSESSING OFFICER (IV) IN THE CASE OF N.R. PORTFOLIO PVT. LTD [87 DTR 0162 (DEL)] IT WAS HELD THAT MERELY FURNISHING NAMES, ADDRESSES AN D PAN PARTICULARS, OR RELYING ON ENTRIES IN A REGISTRAR O F COMPANIES WEBSITE, IF UPON VERIFICATION, OR DURING PROCEEDING S, AO CANNOT CONTACT SHARE APPLICANTS, OR THAT INFORMATION BECOM ES UNVERIFIABLE, OR THERE ARE FURTHER DOUBTS IN PURSUI T OF SUCH DETAILS, ONUS SHIFTS BACK TO ASSESSEE TO EXPLAIN SA ME---YES. (V) ALSO IN THE CASE OF N.R. PORTFOLIO PVT LTD [96 DTR 0281 (DEL)] IT WAS HELD THAT, THE ONUS TO PROVE THE IDENTITY, CRED ITWORTHINESS AND GENUINENESS OF THE TRANSACTION IS ON THE ASSESS EE AS THE FACTS ARE WITHIN THE ASSESSEES KNOWLEDGE. MERE PROD UCTION OF INCORPORATION DETAILS, PAN NOS. OR THE FACT THAT TH IRD PERSONS FILED RETURN IN CASE OF A PRIVATE LIMITED COMPANY M AY NOT BE SUFFICIENT WHEN SURROUNDING AND ATTENDING FACTS PRE DICATE A COVER UP. (VI) IN THE CASE OF MAF ACADEMY P. LTD. [361 ITR 02 858 (DELHI)] IT WAS HELD THAT, MERE PRODUCTION OF INCORPORATION DET AILS, PAN NOS. OR RETURNS MAY NOT BE SUFFICIENT WHEN SURROUND ING AND ATTENDING FACTS PREDICATE COVER UP. IN PRESENT CASE , IT WAS STRANGE THAT ASSESSEE IN YEAR 2001 FELT NEED OF OBT AINING AFFIDAVITS FROM PERSONS INVESTING IN SHARES TO CERT IFY GENUINENESS WHEN THERE WAS NO INQUIRY. SUCH FACT RA ISED SUSPICION ON GENUINENESS OF TRANSACTION. FURTHER SH ARES WERE PURCHASED AT LARGE PREMIUM AND THEN SOLD AT SUBSTAN TIAL LOSS IN SHORT SPAN OF TIME. ALSO ASSESSEE FAILED TO PROD UCE PERSONS WHO HAD INVESTED IN SHARES AND SHOW THAT THESE PEOP LE WERE COMPLETELY UNRELATED TO ASSESSEE AND AS SUCH, ALL E NTRIES WERE MERELY ACCOMMODATION ENTRIES THUS, ASSESSEE HAD NOT DISCHARGED ONUS SATISFACTORILY AND ADDITIONS MADE B Y AO WERE SUSTAINED ORDERS OF CIT (APPEALS) AND ITAT IN DELET ING ADDITION UNSUSTAINABLE-SUBSTANTIAL QUESTION OF LAW ANSWERED IN FAVOUR OF APPELLANT AND AGAINST THE RESPONDENT ASSESSEE-AP PEAL ALLOWED. (VII) IN THE CASE OF TARIKA PROPERTIES INVESTMENT P VT LTD [221 TAXMAN 0014 (DEL)] IT WAS HELD THAT, HELD, FOLLOWIN G DECISION OF COORDINATE BENCH IN CIT VS. NR PORTFOLIO PVT. LT D AND CIT VS NOVA PROMOTERS AND FINLEASE PRIVATE LIMITED CASE (2 012) 342 ITR 169 (DELHI), MERE PRODUCTION OF PAN NUMBER OR ASSESSMENT PARTICULARS SUBMITTED BY ASSESSEE DOES N OT ESTABLISH IDENTITY OF A PERSON/INVESTORLDENTIFICATI ON OF A PERSON INCLUDES PLACE OF WORK, STAFF AND FACT THAT IT WAS ACTUALLY CARRYING ON BUSINESS AND FURTHER RECOGNITION OF SAI D COMPANY/INDIVIDUAL IN EYES OF PUBLIC BANK STATEMENT S OF INVESTORS FURNISHED BY ASSESSEE OMITTED TO SHOW THA T THERE WAS DEPOSIT OF CASH IMMEDIATELY PRIOR TO ISSUANCE OF CH EQUES. 8 ITA NO.655/DEL/2019 EXTRACTS OF BANK STATEMENTS FURNISHED BY ASSESSEE W ERE FOUND TO BE FABRICATED. ASSESSEE FAILED TO ESTABLISH CRED ITWORTHINESS OF INVESTORS AND ALSO GENUINENESS OF TRANSACTIONORD ERS OF CIT(A) AND ITAT WERE PERVERSE IN AS MUCH AS THEY HA D FAILED TO APPRECIATE FABRICATION IN BANK STATEMENTS OF SHARE APPLICANTS THAT HAD BEEN FILED BY ASSESSEE. (VIII) IN THE CASE OF GLOBUS SECURITIES & FINANCE P VT LTD [224 TAXMAN 237 (DELHI)] IT WAS HELD THAT, ASSESSEES DIR ECTORS, WHO HAD PURPORTEDLY MADE INVESTMENT IN SHARES WERE NOT RELATED OR KNOWN TO THEM. ASSESSEE HAD NO PROVEN GO OD PAST TRACK RECORD JUSTIFYING HEFTY PREMIUM, FOUR TIMES F ACE VALUE. ONLY CERTAIN PAPERS SHOWING THAT ASSESSEE HAD TAKEN CARE TO ENSURE LEGAL COMPLIANCES WERE PLACED ON RECORD. TRI BUNAL HAD NOT GIVEN DUE CREDENCE TO SURROUNDING CIRCUMSTANCES WHICH INCLUDED HUGE PREMIUM, CREDIT ENTRIES IN BANK ACCOU NTS BEFORE TRANSFER OF MONEY TO ASSESSEE, FAILURE OF COMPANIES TO FILE DETAILS OF INVENTORIES AND FACT THAT ASSESSEE COMPA NY HAD NOT CHARGED ANY PREMIUM EARLIER. THREE FACTUM IN ALL CA SES WAS NOT ESTABLISHED BY ONLY SHOWING THAT TRANSACTION WAS TH ROUGH BANKING CHANNELS OR ACCOUNT PAYEE INSTRUMENT. SURRO UNDING AND CORROBORATIVE FACTUAL DETAILS WERE EQUALLY IMPO RTANT AND JUSTIFY FURTHER PROOF OR DETAILS BEFORE IT IS HELD THAT ONUS IS DISCHARGED. THUS, MATTER REMITTED TO TRIBUNAL FOR E NTIRE ISSUE TO BE DEALT AFRESH. (IX) IN THE CASE OF EMPIRE BUILTECH PVT LTD [366 IT R 110 (DELHI)] IT WAS HELD THAT, MERELY BECAUSE ASSESSEE HAD DISCLOSE D THE IDENTITY OF THE INVESTORS, IT CANNOT BE SAID THAT B URDEN IMPOSED UPON IT U/S 68 HAD BEEN DISCHARGED, PARTICULARLY WH EN INVESTORS NOT ONLY DID NOT SUBMIT ANY CONFIRMATION, BUT HAD CONCEDEDLY REPORTED FAR LESS INCOME THAN THE AMOUNT S INVESTED. (X) IN THE CASE OF ONASSIS AXLES PRIVATE LIMITED [3 64 ITR S3 (DELHI)] IT WAS HELD THAT, HELD, BANK STATEMENT OF THREE COMPANIES FILED IN REMAND REPORT BEFORE CIT(A) SHOW S THAT ACCOUNTS DID NOT DISCLOSE LARGE VOLUME OF TRANSACTI ONS. CASH DEPOSITS WERE MADE INTO ACCOUNTS OF COMPANIES ON SA ME DAY OR ON PROXIMATE DAYS. PAY ORDERS GIVEN TO APPLY TO SHA RES WERE ISSUED FROM A FAR OFF BANK BRANCH IN NOIDA. THESE F ACTS, TOGETHER WITH SHARE APPLICANTS LACK OF RESOURCES AN D INADEQUATE SHARE CAPITAL, AS WELL AS AUTHORIZED AND SUBSCRIBED SHARE CAPITAL OF ASSESSEE I.E. RS.50 LAKH BEING THE AUTHORIZED CAPITAL, AND PAID UP CAPITAL BEING RS.70 LAKH, AS A GAINST IT RESERVES BEING OVER RS.2 CRORES, FOR REASON OF THE PREMIUM RECEIVED, SHOWED THAT SHARE MONEY TRANSACTION WAS D UBIOUS. AMOUNT RECEIVED BY ASSESSEE FALLS WITHIN MISCHIEF O F SECTION 68 AS UNEXPLAINED AMOUNTS. TRIBUNAL WAS JUSTIFIED IN H OLDING THAT AMOUNT RECEIVED BY ASSESSEE WAS BOGUS SHARE CAPITAL . ASSESSEE'S APPEAL DISMISSED. 9 ITA NO.655/DEL/2019 (XI) IN THE CASE OF FOCUS EXPORTS PVT. LTD. [ILL DT R 0012 (DEL)] IT WAS HELD THAT, IF THE ASSESSEE OFFERS NO EXPLANATIO N ABOUT THE NATURE AND SOURCE OF CREDIT OF AMOUNTS IN THE BOOKS MAINTAINED BY IT OR THE EXPLANATION OFFERED IS NOT SATISFACTOR Y, THEN THE SUMS SO CREDITED CAN BE TREATED AS INCOME OF THE AS SESSEE FOR THAT PREVIOUS YEAR. (XII) IN THE CASE OF RATHI FINLEASE LTD (215 CTR 42 9 MP) IT WAS HELD THAT, THOUGH CONFIRMATION LETTERS WERE PRODUCED, GE NUINENESS OF SHARE APPLICATION MONEY RECEIVED BY ASSESSEE COMPAN Y CANNOT BE SAID TO HAVE BEEN ESTABLISHED SINCE THE ALLEGED COMPANIES WHICH HAD PAID THE MONEY WERE FOUND TO BE NON-EXIST ENT AND THE AMOUNTS WERE PAID BY CHEQUES ON THE SAME DATE O N WHICH SUCH AMOUNTS WERE CREDITED TO THE BANK ACCOUNTS OF THOSE COMPANIES FAILED TO DISCHARGE THE BURDEN, ADDITION U/S 68 UPHELD. (XIII) IN THE CASE OF KUNDAN INVESTMENT LTD (263 IT R 626 (CAL)) IT WASHELD THAT, SINCE THE ASSESSEE DID NOT TAKE ANY S TEPS TO OBTAIN CONFIRMATORY LETTERS FROM THE SUBSCRIBERS OF PUBLIC ISSUE QUOTA WHO DID NOT RESPOND TO THE ENQUIRY NOR ATTEMP TED TO PRODUCE SAID SUBSCRIBERS OR TO DISCLOSE THEIR INCOM E-TAX FILE NUMBERS SUBSCRIPTION SAID TO HAVE BEEN MADE BY SUCH SUBSCRIBERS TO THE SHARES OF THE ASSESSEE-COMPANY C ANNOT BE ACCEPTED AS GENUINE; IN THE ABSENCE ANY MATERIAL EX CEPT THE INCOME-TAX FILE NUMBERS, THE IDENTITY OF THE SUBSCR IBERS TO THE PROMOTERS QUOTA AND THEIR CREDITWORTHINESS COULD NO T BE ESTABLISHED AND THE SUBSCRIPTION MADE BY THEM COULD NOT BE ACCEPTED AS GENUINE; HOWEVER, MATTER IS REMANDED TO THE TRIBUNAL FOR DECIDING THE SAME AFRESH. (XIV) IN THE CASE OF KORLAY TRADING CO. LTD (232 IT R 820 (CAL)) IT WAS HELD THAT, MERELY FILING OF INCOME-TAX FILE NUMBER OF CREDITOR IS NOT ENOUGH TO PROVE THE GENUINENESS OF CASH CREDIT UNLESS THE CREDITOR IS IDENTIFIED AND HIS CREDITWORTHINESS IS ESTABLISHED. ADDITION JUSTIFIED. (XV) IN THE CASE OF SUMATI DAYAL (214 ITR 801 (SC)) IT WAS HELD THAT, APPLYING THE TEST OF HUMAN PROBABILITIES WAS RIGHT THAT THE ASSESSEE'S CLAIM ABOUT THE AMOUNT BEING HER WINNING S FROM RACES IS NOT GENUINE. (XVI) IN THE CASE OF POWER DRUGS LTD. (245 CTR 623 P & H) IT WAS HELD THAT, ASSESSEE-COMPANY HAVING FAILED TO ESTABL ISH THE IDENTITY AND CREDITWORTHINESS OF THE ALLEGED SHARE APPLICANTS AND THE GENUINENESS OF THE SHARE APPLICATION MONEY SHOWN BY IT, ADDITION UNDER S.68 WAS RIGHTLY UPHELD BY THE T RIBUNAL. (XVII) IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD (342 ITR 169 DEL) IT WAS HELD THAT ASSESSING OFFICER AFTER ISSUA NCE OF SUMMONS NOT BEING SATISFIED BY THE EXPLANATIONS PRO VIDED HELD THAT THAT ASSESSEE WAS UNABLE TO PROVE THE GENUINEN ESS OF THE TRANSACTIONS WITH THE COMPANIES AND THAT IT ALSO PR OVED THAT THE ASSESSEE COMPANY HAD INTRODUCED ITS OWN MONIES THROUGH 10 ITA NO.655/DEL/2019 NON-EXISTING COMPANIES USING THE BANKING CHANNEL IN THE SHAPE OF SHARE APPLICATION MONIES THERE IS NO EXPLANATION AS TO WHY THE DEPONENTS COULD NOT BE PRODUCED AND DID NOT APP EAR IN RESPONSE TO THE SUMMONS - THE MODUS OPERANDI INVOLV ES RECEIPT BY THE ENTRY PROVIDERS OF EQUIVALENT AMOUNT OF CASH FROM THE ASSESSEE SECTION 68 PLACES NO DUTY UPON ASSESSING O FFICER TO POINT TO THE SOURCE FROM WHICH THE MONEY WAS RECEIV ED BY THE ASSESSEE. ORDER OF TRIBUNAL SET ASIDE - QUESTION OF LAW ANSWERED IN FAVOUR OF DEPARTMENTYES. (XVIII) IN THE CASE OF AZEEM INVESTMENT PVT LTD (25 2 CTR 0217 DEL) IT WAS HELD THAT REASSESSMENT PROCEEDINGS WERE INITIATED IN THE CASE OF THE ASSESSEE AFTER INFORMATION WAS R ECEIVED FROM DIRECTOR OF INVESTIGATION REGARDING BOGUS/ACCOMMODA TION ENTRIES ALLEGEDLY PROVIDED BY DIFFERENT COMPANIES W HICH WERE MANAGED AND OPERATED BY MUKESH GUPTA AND RAJAN JASS AL. AO NOTICED THAT THESE COMPANIES HAD BEEN ISSUED SHA RES BY THE APPELLANT ASSESSEE. A QUESTION AROSE WHETHER TH E SHARE APPLICATION MONEY RECEIVED WAS A GENUINE TRANSACTIO N TRIBUNAL AFTER NOTICING THE FACTS ON RECORD REMITTED THE MAT TER BACK TO THE AO AND FELT THAT THE MATTER CANNOT BE DECIDED IN A SUPERFICIAL MANNER, BY ONLY MAKING REFERENCE TO THE BANK ACCOUN T ENTRIES AND WHETHER OR NOT THE ALLEGED SHAREHOLDERS WERE IN CORPORATED COMPANIES. HELD, THE TRIBUNAL ELUCIDATED THE RELEVA NT FACTS AND GIVEN COGENT AND GOOD REASONS WHY AN ORDER OF REMIT WAS NECESSARY AND REQUIRED IN THE FACTS OF THE PRESENT CASE. WHETHER OR NOT AN ORDER OF REMAND IS JUSTIFIED AND REQUIRED DEPENDS ON FACTS OF EACH CASE. AN ORDER OF THE REMI T HAS BEEN PASSED, WITH A DIRECTION TO CONDUCT IN DEPTH INQUIR Y, REACH AND RECORD CORRECT AND TRUE FINDING, WHICH DEPENDING UP ON THE MATERIAL MAY EVENTUALLY EVEN GO IN FAVOUR OF THE AS SESSEE. ASSESSEES APPEAL DISMISSED. (XIX) IN THE CASE OF MAJOR METALS LTD (359 ITR 0450 (BOM)) IT WAS HELD THAT SETTLEMENT COMMISSION ADDITION UNDER SECT ION 68 INTERFERENCE IN EXERCISE OF WRIT JURISDICTION ASSES SEE AN UNLISTED COMPANY WAS GIVEN HUGE LOAN OF RS. 6 CRORES BY TWO COMPANIES LATER ON THESE COMPANIES WERE ALLOTTED 30,000 SHARE S EACH OF FACE VALUE 10 AT HUGE PREMIUM OF RS. 990. SETTLEMEN T COMMISSION HAS CONSIDERED ALL MATERIAL ON RECORD IN CLUDING MATERIAL WHICH HAD A BEARING ON THE CREDITWORTHINES S AND FINANCIAL STANDING OF THE ALLEGED SUBSCRIBING COMPA NIES TO THE SHARE CAPITAL OF THE ASSESSEE. NONE OF THE COMPANIE S WAS HELD TO HAVE A FINANCIAL STANDING OR CREDITWORTHINESS WH ICH WOULD JUSTIFY MAKING OF SUCH A LARGE INVESTMENT OF RS. 6 CRORES AT A PREMIUM OF RS. 990 PER SHARE. ALLOTMENT OF SHARES H AS TAKEN PLACE IN PURSUANCE OF A PRIVATE PLACEMENT. VIEW WHI CH HAS BEEN TAKEN BY THE SETTLEMENT COMMISSION IS CONSEQUE NTLY BORNE OUT ON THE BASIS OF THE MATERIAL ON RECORD. C OMMISSION HAS NOT PROCEEDED CONTRARY TO LAW OR ON THE BASIS O F NO 11 ITA NO.655/DEL/2019 EVIDENCE. THERE IS NO PERVERSITY IN THE FINDINGS OF THE SETTLEMENT COMMISSION. RE-APPRECIATION OF FINDING OF FACTS NOT WARRANTED IN EXERCISE OF JUDICIAL REVIEW. ORDER OF THE SETTLE MENT COMMISSION UPHELD. (XX) IN THE CASE OF INDEPENDENT MEDIA PVT. LTD. (25 TAXMANN.COM 276 (DELHI)) IT WAS HELD THAT, FOR ADDITION U/S 68, AO NEED NOT ESTABLISH MONEY COMING FROM ASSESSEE'S COFFERS - FO R MAKING ADDITION UNDER SECTION 68, IT IS NOT INCUMBENT UPON AO TO ESTABLISH THAT MONEY HAD COME FROM ASSESSEE'S COFFE RS. (XXI) IN THE CASE OF NEELKANTH ISPAT UDHYOG PVT LTD (81 DTR 0214) IT WAS HELD THAT, IN CASES WHERE THE EXPLANAT ION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE OF THE SUMS FOUND CREDITED IN THE BOOKS IS NOT SATISFACTORY THERE IS, PRIMA FACIE, EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY. THE BURDEN IS ON THE ASSESSEE TO REBUT THE SAME, AND, I F HE FAILS TO REBUT IT, IT CAN BE HELD AGAINST THE ASSESSEE THAT IT WAS A RECEIPT OF AN INCOME NATUREYES. (XXII) IN THE CASE OF FROSTAIR P. LTD [92 DTR 393 ( DEL)] IT WAS HELD THAT, SHARE APPLICATION MONEY, GENUINENESS OF THE T RANSACTION, REVENUE RECEIVED INFORMATION ALLEGING THAT ASSESSEE HAD ACCEPTED SHARE CAPITAL FROM COMPANIES ENGAGED IN PR OVIDING BOGUS ENTRIES IN THE FORM OF LOAN AND SHARE APPLICA TION MONEY TO INTERESTED PARTIES. ACCORDINGLY, THE AO CALLED F OR INFORMATION U/S 142 (L)ASSESSEE FILED A LIST OF 18 SHAREHOLDERS AND FELT THAT THE NATURE OF THE ASSESS COMPANY AND ITS BUSINESS W AS NOT SUCH AS TO ATTRACT A HUGE PREMIUM. AFTER TAKING INT O ACCOUNT VARIOUS FACTORS, INCORRECT GIR/PAN NUMBER AND DESIG NATION OF THE CONCERNED AOS, WHO WERE SEIZED OF THE SHARE APP LICANT COMPANIES' RETURNS; NONE OF THE SHAREHOLDERS EXISTE D AT THE ADDRESSES GIVEN BY THE ASSESSEE; THE BOOKS OF ACCOU NTS OF THE SHARE APPLICANTS NOT BEING PRODUCED BEFORE HIM, THE AO HELD THAT AN INFERENCE COULD BE DRAWN THAT THE TRANSACTI ONS WERE NOT GENUINE YES. (XXIII) IN THE CASE OF RAJANI HOTELS LTD [79 DTR 18 5 (MAD)] IT WAS HELD THAT, SOME SHAREHOLDERS REFUSED HAVING APPLIED. DIR ECTOR OF THE ASSESSEE COMPANY STATED THAT THEY WERE BENAMI INVES TORS. PAYMENT TO AND FROM SHAREHOLDERS WERE IN CASH AND T HEREFORE THE CLAIM OF DIRECTOR IS REJECTED TO THAT EXTENT T REATED AS UNEXPLAINED, X) IN THE CASE OF YOUTH CONSTRUCTION P VT LTD [357 ITR 197 (DELHI)] IT WAS HELD THAT, MERE PROOF OF ID ENTITY WITHOUT GENUINENESS AND CREDITWORTHINESS IS ENOUGHNO. (XXIV)IN THE CASE OF ULTRA MODERN EXPORTS PVT. LTD [220 TAXMAN 165 (DELHI)] IT WAS HELD THAT INFORMATION TH AT ASSESSEE FURNISHES WOULD HAVE TO BE CREDIBLE AND AT SAME TIM E VERIFIABLE. FIVE SHARE APPLICANTS COULD NOT BE SERV ED AS NOTICES WERE RETURNED UNSERVED. ASSESSEE'S ABILITY TO SECUR E DOCUMENTS SUCH AS INCOME TAX RETURNS OF SHARE APPLI CANTS AS WELL AS BANK ACCOUNT PARTICULARS WOULD ITSELF GIVE RISE TO A 12 ITA NO.655/DEL/2019 CIRCUMSTANCE WHICH AO IN THIS CASE PROCEEDED TO DRA W INFERENCES FROM ASSESSEE COMMENCED ITS BUSINESS AND IMMEDIATELY SOUGHT TO INFUSE SHARE CAPITAL AT A PRE MIUM RANGING BETWEEN RS.90- 190 PER SHARE AND WAS ABLE T O GARNER A COLOSSAL AMOUNT OF RS.4.34 CRORES. CIT (A) AND IT AT ERRED IN HOLDING THAT AO COULD NOT HAVE ADDED BACK SAID AMOU NT U/S 68 YES. 4.3.5.7. IN CONCLUSION, AS CAN BE SEEN FROM THE ABO VE SAID JUDGEMENTS, IT IS CLEAR THAT THE INITIAL ONUS IS UP ON THE ASSESSEE TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINES S OF THE PERSONS IN WHOSE NAME THE CREDIT ENTRY IS APPEARING BY WAY OF SHARE CAPITAL/PREMIUM, LOAN OR CREDITOR ETC. AFTER THAT T HE ASSESSING OFFICER IS DUTY BOUND TO CHECK THE VERACITY OF THOSE DETAIL S FILED AND THEREAFTER ARRIVE AT A CONCLUSION IN CONNECTION WIT H THE GENUINENESS OF SHARE CAPITAL/PREMIUM. HOWEVER, THE RECENT JUDGE MENTS OF DIFFERENT HIGH COURTS IN THIS REGARD ARE QUITE DIFF ERENT PARTICULARLY CONSIDERING THE FACTS OF EACH CASE. MOREOVER, RECEN T JUDGEMENT IN THE CASE OF NAVODAYA CASTLE (SUPRA) HAS DISTINGUISHED T HE POSITION OF LAW SETTLED IN THE CASE OF LOVELY EXPORTS (SUPRA). IN CIT V/S. NAVODAYA CASTLES (P) LTD. 109 DTR (DELHI HC) 109 (1 84) CERTIFICATE OF INCORPORATION, PAN ETC ARE RELEVANT FOR THE PURP OSE OF IDENTIFICATION, BUT HAVE THEIR LIMITATION WHEN THER E IS EVIDENCE AND MATERIAL TO SHOW THAT THE SUBSCRIBER WAS A PAPER CO MPANY AND NOT A GENUINE INVESTOR., MATTER IS REMANDED FOR RECONSI DERATION. IN THE CASE OF NAVODAYA CASTLE [56 TAXMANN.COM 18 (SC)], T HIS IT WAS HELD- WHETHER SPECIAL LEAVE PETITION FILED AGAINST IMPUGN ED ORDER WAS TO BE DISMISSED - HELD, YES. IN THE PRESENT CASE, THE APPELLANTS HAS FILED SUBMI SSIONS WHICH ARE KEPT ON RECORD AND HAVE BEEN PERUSED BY THE UNDERSI GNED AND CONSIDERED. THE SUBMISSION OF THE APPELLANT, THE CA SE LAWS CITED AND THE ASSESSMENT ORDER HAVE BEEN CONSIDERED. THE SUBM ISSION FILED BY THE APPELLANT HAVE BEEN CONSIDERED NOT FOUND NOT TO BE TENABLE AND THE CASE LAWS CITED BY THE APPELLANT ARE DISTINGUIS HABLE IN FACTS. HENCE, I FIND NO REASON TO INTERFERE WITH THE AO'S ORDER ON THESE ISSUES AND THE ADDITION ON THIS GROUND IS UPHELD. I N VIEW OF THE ABOVE DISCUSSION, APPEAL ON GROUND NOS. 2 & 3 ARE P ARTLY ALLOWED; ONLY THE INVESTMENT DONE BY DHALU RAM PHULIA IS ALL OWED. FINDINGS (ADDITION OF UNSECURED LOANS): 4.3.5.8. DURING THE YEAR, THERE IS AN INCREASE OF R S. 6,57,000/- IN THE UNSECURED LOANS. THE DETAILS ARE GIVEN AS UNDER: PARTY UNSECURED LOANS AMOUNT PAN TUSHA PANDE 48,000 APGPP2960M ANKITA TIWARI 2,00,000 AZAPK3847J OCEAN THERMOPLASTICS ELASTOMERS PVT. LTD. 5,57,229 AAAC04517H 13 ITA NO.655/DEL/2019 IN THE ABSENCE OF ANY CONFIRMATION AND OTHER SUPPOR TING DOCUMENTS, THE AO ADDED BACK THE SAME TO THE INCOME OF THE APP ELLANT COMPANY AS UNSECURED LOAN. DURING APPELLATE PROCEEDINGS, TH E AR OF THE APPELLANT HAS FILED THE CONFIRMATION. IT HAS BEEN S TATED THAT THE APPELLANT HAS RETURNED RS 1 LAC ON 23.3.2012 TO THE TUSHA PANDE AND THE CLOSING BALANCE IS RS. 48,000/-. THE ITR RE FLECTS, AY 2011- 12 (2,47,690) AND AY 2012-13 (2,14,767). IN VIEW OF THE ABOVE DISCUSSION, THIS ADDITION WITH REGARD TO TUSHA PAND E IS DELETED. WITH REGARD TO ANKITA TIWARI, ONLY CONFIRMATION IS FILED, THERE IS NO ITR OR BANK STATEMENT, THIS ADDITION IS UPHELD. THE RE ARE NO DETAILS FILED WITH REGARD TO THE LOAN OF RS.5,57,229/- AND THE SAME IS UPHELD. IN VIEW OF THE ABOVE DISCUSSION, APPEAL ON GROUND NO. 4 IS PARTLY ALLOWED. FIDINGS (ADDITION OF TRADE PAYABLES): 4.3.5.9. DURING THE INSTANT YEAR, THERE IS AN INCRE ASE OF RS. 1,97,04,926/- IN THE TRADE PAYABLES. THE AO HAS HEL D THAT FOR WANT OF ANY DOCUMENTARY EVIDENCES OR ANY CONFIRMATION SU BMITTED BY THE APPELLANT OR RECEIVED, AND ADDED BACK THE SAME TO T HE INCOME OF THE APPELLANT COMPANY AS UNEXPLAINED TRADE PAYABLES. TH E AR OF THE APPELLANT HAS STATED THAT THE ADDITION TO THE TRADE PAYABLES IS FULLY SUPPORTED WITH CONFIRMATIONS OF THE CREDITORS ALONG -WITH OTHER SUPPORTING DOCUMENTS AND SAME SHOULD NOT BE TREATED AS UNEXPLAINED TRADE PAYABLES OF THE APPELLANT DURING THE YEAR. THE SUBMISSIONS FILED BY THE APPELLANT HAVE BEEN CONSID ERED, HOWEVER, THE SAME ARE NOT FOUND TO BE TENABLE. THE DETAILS F ILED DO NOT CONCLUSIVELY PROVE THE GENUINENESS OF THE TRADE PAY ABLES. HENCE, I FIND NO REASON TO INTERFERE WITH THE AO'S ORDER ON THESE ISSUES AND THE ADDITION ON THIS GROUND IS UPHELD. IN VIEW OF T HE ABOVE DISCUSSION, APPEAL ON GROUND NO. 5 IS DISMISSED. 3. BEFORE US, IN GROUND NO. 1, THE ASSESSEE IS AGGRIEV ED WITH THE VARIOUS ADDITIONS SUSTAINED BY THE LEARNED CIT( A). 3.1 IN SUPPORT OF THE CONTENTION, THE LEARNED COUNSEL FOR THE ASSESSEE FILED TWO PAPER-BOOKS CONTAINING PAGES 1 T O 278 AND 1 TO 183. THE LEARNED COUNSEL REFERRED TO PAGES 72 AND 2 58 OF THE PAPER-BOOK (VOLUME-1) AND SUBMITTED THAT PART OF TH E AMOUNT OF THE SHARE CAPITAL AND SHARE APPLICATION MONEY WAS R ECEIVED IN EARLIER YEARS, AND THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION FOR THE SAME IN THE YEAR UNDER CONSIDERATION. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED 14 ITA NO.655/DEL/2019 THAT THIS FACT WAS DULY NOTICED BY THE LEARNED CIT( A), HOWEVER, HE SUSTAINED THE ADDITION FOR THE COMPLETE AMOUNT OF S HARE CAPITAL AND SHARE APPLICATION MONEY. HE FURTHER SUBMITTED T HAT COMPLETE DETAILS, INCLUDING PAN, INCOME TAX RETURN, BALANCE- SHEET ETC. HAVE BEEN FILED BY THE ASSESSEE IN RESPECT OF ADDIT IONS MADE OF SHARE CAPITAL, SHARE PREMIUM, TRADE PAYABLES AND UN SECURED LOAN. IN VIEW OF THE SUBMISSIONS FILED, THE LEARNED COUNSEL FOR THE ASSESSEE PRAYED THAT THE MATTER MAY BE RESTORED BAC K TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE QUANTUM A DDITION AS WELL AS VERIFYING THE DOCUMENTS FILED BY THE ASSESSEE FO R DISCHARGING ITS ONUS UNDER SECTION 68 OF THE ACT. 3.2 THE LEARNED DR, ON THE OTHER HAND, THOUGH RELIED ON THE ORDER OF THE LEARNED CIT(A), HOWEVER, HE DID NOT OB JECT FOR REFERRING THE MATTER BACK TO THE ASSESSING OFFICER. 3.3 WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND TH AT THE COMPANY HAS ALLOTTED 1,56,350 EQUITY SHARES HAVING FACE VALUE OF RS.10/- EACH AT A PREMIUM OF RS.100/- EACH AND, THU S, AMOUNT OF RS. 15,36,500/- HAS BEEN RECEIVED ON ACCOUNT OF SHARE CAPITAL AND RS.1,56,35,000/- HAS BEEN RECEIVED ON ACCOUNT OF SHARE PREMIUM. ON PERUSAL OF PAGE NO. 258 OF THE APB-I, WE FIND THAT DURING THE YEAR UNDER CONSIDERATION THERE IS AN INC REASE IN SHARE CAPITAL FROM RS.50 LAKHS AS ON 31.03.2011 TO RS.65, 63,500/- AS ON 31.03.2012. SIMILARLY, THERE IS DECREASE IN SHAR E APPLICATION MONEY PENDING ALLOTMENT FROM RS. 1,13,26,990/- AS O N 31.03.2011 TO RS.33,71,400/- AS ON 31.03.2012. FURT HER, ON PAGE 72 OF THE PAPER-BOOK (VOLUME -1) THE ASSESSEE HAS FILED PERSON-WISE DETAILS OF THE AMOUNT FOR SHARE APPLICA TION FOR 15 ITA NO.655/DEL/2019 FINANCIAL YEAR 2010-11 AND 2011-12. IT IS SEEN THAT IN ASSESSMENT YEAR 2010-11, THE ASSESSEE HAS RECEIVED TOTAL AMOUN T OF RS.1,10,22,000/- WHEREAS IN FINANCIAL YEAR 2011-12, THE ASSESSEE HAS RECEIVED TOTAL AMOUNT OF RS.64,98,000/-. IT IS SETTLED PRINCIPLE THAT THE ADDITIONS UNDER SECTION 68 OF THE ACT CAN BE MADE IN RESPECT OF CREDITS APPEARING FOR THE YEAR UNDER CON SIDERATION. THUS, IT IS EVIDENT THAT THE ADDITION HAS BEEN WRON GLY SUSTAINED IN RESPECT OF CREDITS RECEIVED IN EARLIER YEARS. FU RTHER, THE VARIOUS EVIDENCES IN SUPPORT OF DISCHARGE OF ONUS UNDER SEC TION 68 OF THE ACT FILED BY THE ASSESSEE ALSO NEEDS DETAILED VERIF ICATION AT THE HANDS OF THE ASSESSING OFFICER. IN VIEW OF THE FACT S AND CIRCUMSTANCES, WE FEEL IT APPROPRIATE TO RESTORE TH E ISSUE OF ADDITIONS OF SHARE CAPITAL, SHARE PREMIUM, TRADE PA YABLES AND UNSECURED LOANS TO THE FILE OF THE ASSESSING OFFICE R FOR DECIDING AFRESH IN ACCORDANCE WITH LAW, AFTER AFFORDING ADEQ UATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS FAR AS THE ISSUE OF REJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE ACT IS CONCERNED, THE LEARNED CIT(A) HAS SUSTAINED THE REJ ECTIONS IN VIEW OF THE FINDING THAT NO BOOKS OF ACCOUNT AND VOUCHER S WERE PRODUCED BEFORE HIM BUT WE FIND THAT THE ADDITION M ADE IN RESPECT OF THE BUSINESS INCOME HAS ALREADY BEEN DEL ETED BY THE LEARNED CIT(A) AND, THUS, THIS ISSUE IS ONLY OF ACA DEMIC INTEREST AND, THUS, WE ARE NOT ADJUDICATING THIS ISSUE. GROU ND NO. 1 OF THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 4. IN GROUND NO. 2, THE ASSESSEE HAS RAISED THE ISSU E OF ADDITIONS OF BUSINESS INCOME, WHICH IN OUR OPINION, HAS ALREADY BEEN ALLOWED IN FAVOUR OF THE ASSESSEE AND, THUS, T HE GROUND BEING INFRUCTUOUS, IS DISMISSED. 16 ITA NO.655/DEL/2019 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 TH NOVEMBER, 2019. SD/- SD/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15 TH NOVEMBER, 2019. RK/-(D.T.D.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI