ITO, Wd-10(4), Kolkata, Kolkata V. M/s BSNI Commercial Pvt. Ltd., Kolkata

ITA 686/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1815 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER
• Assessee Lawyers: S L KOCHAR
• Keywords: Unexplained cash credit; Bogus Share capital; Share purchase agreement; Source of fund
• Section: 143(3); 133(6); 131; 68

Judgement Text

1 ITA NO. 686/KOL/20 17 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER I.T.A. NO. 686/KOL/2017 ASSESSMENT YEAR: 2012-2013 INCOME TAX OFFICER,................................ .........................................APPELLANT WARD-10(4), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, 3 RD FLOOR, KOLKATA-700 069 -VS.- M/S. BSNI COMMERCIAL PVT. LIMITED,................. ..........................RESPONDENT BEHIND JHAWTALLA KALI TEMPLE, TEGHORIA, KOLKATA-700 059 [PAN:AAECB 6746 K] APPEARANCES BY: SHRI SANKAR HALDER, JCIT, SR. D.R. , FOR THE APPELLANT SHRI S.L. KOCHAR, A.R. & SHRI ANIL KOCHAR, ADVOCATE , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : OCTOBER 31, 2018 DATE OF PRONOUNCING THE ORDER : NOVEMBER 22, 2018 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, KOLKATA DAT ED 03.02.2017 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITION OF RS.1,00,80,000/- MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF SHARE PREMIUM. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 21.09.2012 DECLARING TOTAL INCOME OF RS.13,429/-. AS NOTICED B Y THE ASSESSING OFFICER, THE ASSESSEE-COMPANY DURING THE YEAR UNDER CONSIDER ATION HAD RAISED 2 ITA NO. 686/KOL/20 17 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 2 SHARE CAPITAL AT A HUGE SHARE PREMIUM OF RS.1,00,80 ,000/-. KEEPING IN VIEW THAT THERE WAS NO SUBSTANTIAL BUSINESS ACTIVIT Y CARRIED ON BY THE ASSESSEE-COMPANY DURING THE YEAR UNDER CONSIDERATIO N EXCEPT MAKING SOME INVESTMENT IN LAND AND BANK, THE ASSESSING OFF ICER PROCEEDED TO EXAMINE THE CLAIM OF THE ASSESSEE FOR HUGE SHARE PR EMIUM. IN THIS REGARD, HE ISSUED NOTICES DIRECTLY TO THE CONCERNED SHAREHO LDERS AND IN REPLY TO THE SAID NOTICES, THE CONCERNED SHAREHOLDER COMPANI ES FURNISHED THE DETAILS AND DOCUMENTS REQUIRED BY THE ASSESSING OFF ICER. THE ASSESSING OFFICER, HOWEVER, FOUND THAT THE REPLIES RECEIVED F ROM THE SHAREHOLDER COMPANIES WERE ALMOST IDENTICAL IN STYLE AND SOME O F THEIR DIRECTORS AND ADDRESSES OF THE REGISTERED OFFICE WERE COMMON. HE, THEREFORE, ISSUED SUMMONS UNDER SECTION 131 TO THE ASSESSEE-COMPANY R EQUIRING IT TO PRODUCE THE DIRECTORS OF THE SHAREHOLDER COMPANIES FOR EXAMINATION. THE ASSESSEE-COMPANY, HOWEVER, FAILED TO PRODUCE THE DI RECTORS OF THE SHAREHOLDER COMPANIES FOR VERIFICATION BEFORE THE A SSESSING OFFICER. KEEPING IN VIEW THIS FAILURE OF THE ASSESSEE-COMPAN Y, THE ASSESSING OFFICER HELD THAT THE CREDITWORTHINESS OF THE CONCE RNED CREDITORS COULD NOT BE CORROBORATED BY THE ASSESSEE-COMPANY AND EVE N THE HIGH VALUE OF SHARE PREMIUM COULD NOT BE JUSTIFIED BY IT. HE ACCO RDINGLY TREATED THE SHARE PREMIUM AMOUNT OF RS.1,00,80,000/- RECEIVED B Y THE ASSESSEE- COMPANY AS UNEXPLAINED CASH CREDIT AND MADE AN ADDI TION TO THAT EXTENT TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSME NT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 16.03.2015. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 147/143(3) OF THE ACT, AN APPEAL WAS PREFERRED BY T HE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND THE FOLLOWING SUBMISSIONS WERE MADE ON BEHALF OF THE ASSESSEE-COMPANY IN WRITING BEFORE THE LD. C IT(APPEALS) IN SUPPORT OF ITS CASE THAT THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHARE PREMIUM BY TREATING THE SAME WAS NOT SUSTAINA BLE:- WE WOULD LIKE TO INFORM YOU THAT THE COMPANY BSNL COMMERCIAL PRIVATE LIMITED WAS INCORPORATED ON 05/0 9/2011 WITH THE PAID UP CAPITAL OF RS.1,00,000/-. THIS AMO UNT OF 3 ITA NO. 686/KOL/20 17 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 3 RS.100000/- WAS SUBSCRIBED BY THE DIRECTORS OF THE COMPANY AS PROMOTERS. IN THE FINANCIAL YEAR 2011-12, IT WAS ENGAGED IN THE BUSINESS OF JOB WORK/COMMISSION/INTEREST INCOME /TRADING IN CONSUMABLES COMMERCIAL GOODS. THE COMPANY WAS WI LLING TO DEAL IN REAL ESTATE BUSINESS AS REAL ESTATE AGENT/BUILDERS/PROPERTY DEVELOPER. IT IS EVIDENT FR OM ITS BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE FINA NCIAL YEAR 2011-12 THAT IT HAD ALREADY STARTED DEALING IN PROP ERTIES FROM THE FINANCIAL YEAR 2011-12 AS IT HAD PURCHASED LAND AMOUNTING TO RS.2202490/- DURING THE YEAR 2011-12 W HICH IS ALSO SHOWING IN ITS INVENTORIES AS ON 31/03/2012. I T WANTED TO EXPAND ITS BUSINESS OF DEALING IN PROPERTIES AND FO R THIS FUND WAS REQUIRED. SO, THE DIRECTORS (DEBASIS SANYAL & S ANTWANA BAGCHI) OF THE COMPANY CONVINCED THE INVESTORS ABOU T ITS PLANNING AND EXPECTED RETURN (10% TO 15%) FROM INVE STMENT IN THE COMPANY AND HAD ISSUED 42000 SHARES @ RS.250 /SHARE (FACE VALUE - RS. 10/SHARE & SHARE PREMIUM - RS.240 /SHARE) TO 4 INVESTORS AND THEREBY RAISED RS.1,05,00,000/- FROM THE ISSUE OF SHARES. OUT OF THE ABOVE FUND RAISED, RS.5 5,00,000/- WAS RECEIVED FROM M/S. DEVSANT COMMERCIAL PRIVATE L IMITED, ONE OF THE GROUP COMPANIES OF M/S. BSNL COMMERCIAL PVT LTD. SO, IT CAN BE SAID THAT MORE THAN 50% OF THE FUND R AISED IS THE MANAGEMENT'S OWN FUND BEING RAISED FROM THE GROUP COMPANY. MOREOVER, ALL THE REQUIRED COMPLIANCES FOR RAISING MONEY THROUGH ISSUE OF SHARES WERE MADE BY THE COMP ANY. THE COMPANY HAD RECEIVED ALL THE MONEY RAISED THROUGH I SSUE OF SHARES IN ITS BANK ACCOUNT. ALL THE TRANSACTIONS HA D MADE THROUGH BANK. IT HAD ALSO FILED FORM-2 FOR ALLOTMEN T OF SHARES DURING THE YEAR AND HAD ALSO GIVEN ALLOTMENT ADVICE & SHARE CERTIFICATES TO THE INVESTORS. IT HAD ALSO SUBMITTE D ALL THE DETAILS & DOCUMENTS AS PER NOTICES U/S. 143(2) & 14 2(1). SURPLUS FUND OUT OF MONEY RAISED THROUGH SHARE ISSU E WAS KEPT IN COMPANY'S BANK ACCOUNT TILL FINALIZATIO N OF OTHER PROPERTY RELATED BUSINESS TRANSACTIONS. THE TURNOVE R OF THE COMPANY FOR THE FINANCIAL YEAR 2011-12 IS RS.348815 /- WHICH IS FROM JOB WORK/COMMISSION AND PROFIT BEFORE TAX O F THE COMPANY IS RS.13429/- DURING THAT YEAR. THE COMPANY IS A FAST MOVING COMPANY. IT IS HAVING GOOD REPUTATION AND GO ODWILL IN THE MARKET. THE INVESTORS HAD ALSO COMPLIED WITH ALL THE NOTICE S SENT BY THE DEPARTMENT AND SUBMITTED ALL THE RELEVANT DETAI LS & DOCUMENTS AS PER THE NOTICES SENT TO THEM U/S 133(6 ). THE APPELLANT HAD ALSO CLARIFIED ALL THE GROUNDS ON WHICH THE LD. ASSESSING OFFICER HAD ADDED TO THE TOTAL INCOME FOR THE ASSESSMENT YEAR, THE SHARE PREMIUM AMOUNTING TO RS.1,00,80,000/- RECEIVED DURING THE YEAR TREATING IT AS CASH CREDIT. THE APPELLANT PLEADED THAT THE NET ASSET VA LUE OF THE 4 ITA NO. 686/KOL/20 17 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 4 ASSESSEE'S SHARE WAS RS.203/- PER SHARE AS ON 31.03 .2012. AND THE COMPANY HAS ISSUED THE SHARES @ RS.250/- SHARES , WHICH IS VERY MUCH NEAR TO ITS NAV. LOOKING INTO THE BOOM PHASE OF CONSTRUCTION INDUSTRY AT THAT TIME, THE PRICING OF SHARES WERE NOT TOO HIGH TO BE CATEGORISED AS HUGE AND UNJUSTIF IED SHARE PREMIUM. DETAILS & DOCUMENTS SUBMITTED BY THE APPELLANT AND THE INVESTORS AND CLARIFICATION & JUSTIFICATION GIVEN B Y THEM HAD PROVED GENUINENESS OF TRANSACTIONS OF SHARE PREMIUM INCLUDING FACE VALUES, IDENTITIES AND CREDITWORTHIN ESS OF THE SHAREHOLDERS OF THE COMPANY FOR JUSTIFICATION OF IN VESTMENT IN THE COMPANY. THE ASSESSEE HAD FURNISHED ALL THE DETAILS AS REQUI RED TO ESTABLISH THE GENUINENESS OF THE ISSUE OF SHARES AT PREMIUM OF RS.240/ SHARE SUCH AS COPY OF BANK STATEMENTS OF BS NL COMMERCIAL PRIVATE LIMITED, COPY OF ITR ACKNOWLEDGE MENT FOR THE ASSESSMENT YEAR 2012-13, COPY OF CERTIFICAT E OF ALLOTMENT ADVISE, COPY OF ALLOTMENT LETTER, COPY OF ANNUAL REPORT INCLUDING COPY OF BANK STATEMENTS AND COPY O F PAN CARD OF INVESTORS COMPANIES SUCH AS DEVSANT COMMERC IAL PRIVATE LIMITED, SANMATI SYNFAB PRIVATE LIMITED & S HLOK FASHIONS PRIVATE LIMITED AND COPY OF PAN OF DIRECTO RS OF INVESTOR COMPANIES. SO, ISSUE OF SHARES AT PREMIUM OF RS.240/- SHARE IS JUSTIFIED AND ALL THE DETAILS & DOCUMENTS MENTIONED ABOVE ALS O PROVE THE GENUINENESS OF TRANSACTIONS OF SHARE PREMIUM IN CLUDING FACE VALUES, IDENTITIES AND CREDITWORTHINESS OF THE SHAREHOLDERS OF THE COMPANY FOR JUSTIFICATION OF IN VESTMENT IN THE COMPANY. THERE ARE A NUMBER OF DECISIONS OF HON'BLE COURTS O N THE ISSUE, WHICH ARE FAVOURABLE TO THE ASSESSEE. SOME O F THESE ARE SUMMARIZED AS UNDER: A) IN THE CASE OF COMMISSIONER OF INCOME-TAX V. GANGESHWARI METAL (P.) LTD., [2013J 30 TAXMANN.COM 328 (DELHI), IT HAS BEEN HELD THAT WHERE THE ASSESSEE IN SUPPORT OF TRANSACTION OF RECEIPT OF SHARE APPLICATION MONEY, BROUGHT ON RECORD VARIOUS DOCUMENTS SUCH AS NAMES AND ADDRESSES OF SHARE APPLICANTS, THEIR CONFIRMATORY LETTERS, COPIES OF BANK STATEMENTS ETC., SAID TRANSACTION WAS TO BE REGARDED AS GENUINE AND, CONSEQUENTLY, NO ADDITION COULD BE MADE IN RESPECT OF SAME UNDER SECTION 68. B) IN CIT, MEERUT VS. NAV BHARAT DUPLEX LTD. [2013J 35 TAXMANN.COM 289 (ALLAHABAD), IT HAS BEEN HELD THAT WHERE ASSESSING OFFICER MADE ADDITION IN 5 ITA NO. 686/KOL/20 17 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 5 INCOME OF ASSESSEE-COMPANY UNDER SECTION 68 ON PLEA THAT IT COULD NOT PROVE THAT SHARE APPLICANTS HAD ENOUGH MONEY ON DATE OF PURCHASE OF ITS SHARES, SINCE SHARE APPLICANTS WERE IDENTIFIED AND THEY HAD SUBMITTED THEIR BANK STATEMENTS, CASH EXTRACTS AND RETURNS FILING RECEIPTS, IMPUGNED ADDITION WAS NOT JUSTIFIED. C) IN CIT, UDAIPUR VS. BHAVAL SYNTHETICS [2013] 35 TAXMANN.COM 83 (RAJASTHAN), THE ASSESSING OFFICER MADE ADDITION TO ASSESSEE'S INCOME ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL ON GROUND THAT ASSESSEE DID NOT FURNISH CONFIRMATION FROM SHAREHOLDERS. HOWEVER, COMMISSIONER (APPEALS) NOTICED THAT TRANSACTIONS WERE MADE THROUGH BANKING CHANNEL AND EXISTENCE OF PERSONS IN WHOSE NAMES SHARES HAD BEEN ISSUED WAS PROVED AND DELETED SAID ADDITION. THE HON'BLE COURT HAS HELD THAT THE COMMISSIONER (APPEALS) DID NOT COMMIT ERROR OF LAW IN DELETING SAID ADDITION. D) RECENTLY, THE MUMBAI BENCH OF THE INCOME TAX APPELLATE TRIBUNAL (THE TRIBUNAL) IN THE CASE OF GREEN INFRA LTD. HAD AN OCCASION TO DEAL WITH TAXABILITY OF PREMIUM RECEIVED ON ISSUE OF SHARES. THE TRIBUNAL HELD THAT SHARE PREMIUM REALIZED FROM THE ISSUE OF SHARES IS CAPITALIZED IN NATURE A ND FORMS PART OF THE SHARE CAPITAL OF THE COMPANY AND THEREFORE CANNOT BE TAXED AS REVENUE RECEIPT. THE TRIBUNAL ALSO HELD THAT IT IS A PREROGATIVE OF THE BOARD OF DIRECTORS OF THE COMPANY TO DECIDE THE PREMIUM AMOUNT AND IT IS THE WISDOM OF THE SHAREHOLDERS WHETHER THEY WANT TO SUBSCRIBE TO SHARES AT PREMIUM. INSPITE OF WHAT HAS BEEN STATED HEREINBEFORE, THE A SSESSING OFFICER WRONGLY ADDED THE AMOUNT OF SHARE PREMIUM O F RS.100,80,000/- TO THE TOTAL INCOME OF THE ASSESSEE . WE ARE ALSO ENCLOSING THE FOLLOWING DETAILS & DOCUM ENTS THAT WE HAVE ALREADY SUBMITTED TO ASSESSING OFFICER FOR YOUR REFERENCE:- 1. LETTER SUBMITTED TO ASSESSING OFFICER REGARDING JUSTIFICATION OF ISSUE OF SHARES AT PREMIUM. 2. COPY OF PAN OF COMPANY 'BSNI COMMERCIAL PRIVATE LIMITED' WITH COPY OF PAN OF DIRECTOR 'DEBASIS SANY AL'. 3. COPY OF CERTIFICATE OF ALLOTMENT ADVICE OR LETTE R OF ALLOTMENT. 4. COPY OF DETAILS OF SOURCE OF FUND. 6 ITA NO. 686/KOL/20 17 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 6 5. COPY OF BANK STATEMENTS OF THE COMPANY 'BSNI COMMERCIAL PRIVATE LIMITED'. 6. COPY OF FINANCIAL STATEMENTS OF THE COMPANY 'BSN L COMMERCIAL PRIVATE LIMITED' FOR THE YEAR ENDED 31.0 3.2012. 7. COPY OF ACKNOWLEDGEMENT OF ITR FOR THE ASSESSMEN T YEAR 2012-13. 8. COPY OF PAN OF INVESTOR COMPANIES WITH COPY OF P AN OF DIRECTOR OF INVESTOR COMPANIES. 9. COPY OF FINANCIAL STATEMENTS OF THE INVESTOR COM PANIES FOR THE YEAR ENDED 31.03.2012. 10. COPY OF ACKNOWLEDGEMENT OF ITR FOR THE ASSESSME NT YEAR 2012-13. WE HOPE THAT THE ABOVE DETAILS & DOCUMENTS AND CLAR IFICATION IS SUFFICIENT TO SERVE YOUR PURPOSE AND ALSO JUSTIF Y THE ISSUE OF SHARES AT PREMIUM BY THE COMPANY. 4. THE LD. CIT(APPEALS) FOUND MERIT IN THE SUBMISSI ONS MADE ON BEHALF OF THE ASSESSEE-COMPANY AND DELETED THE ADDITION MA DE BY THE ASSESSING OFFICER BY TREATING THE SHARE PREMIUM AMOUNT AS UNE XPLAINED CASH CREDIT UNDER SECTION 68 FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 4.8 & 4.9 OF HIS IMPUGNED ORDER:- 4.8. I FIND THAT THE APPELLANT HAD EXPLAINED BEFOR E THE AO THAT THE NET ASSET VALUE OF THE ASSESSEE'S SHARE WA S RS.203/- PER SHARE AS ON 31.03.2012 AND THAT IT HAS ISSUED T HE EQUITY SHARES @ RS.250/ SHARES, WHICH IS VERY MUCH NEAR TO ITS NAV. IT WAS ALSO EXPLAINED BY THE AR THAT CONSIDERING TH E BOOM PHASE OF CONSTRUCTION INDUSTRY AT THAT TIME, THE PR ICING OF SHARES WERE NOT TOO HIGH TO BE CATEGORISED AS HUGE AND UNJUSTIFIED SHARE PREMIUM. THE APPELLANT HAD FURNIS HED DETAILS & DOCUMENTS FOR JUSTIFICATION OF SHARE PREM IUM. THE AO HAS NOT POINTED OUT ANY ANOMALY OR DEFECT BACKED BY COGENT MATERIAL TO NEGATE THE ARGUMENTS AND JUSTIFI CATION FILED BY THE APPELLANT IN COURSE OF ASSESSMENT PROC EEDINGS WITH REGARD TO THE ISSUE OF SHARE PREMIUM. I FIND T HAT THE APPELLANT HAD FURNISHED ALL THE DETAILS AS REQUIRED TO ESTABLISH THE GENUINENESS OF THE ISSUE OF SHARES AT PREMIUM OF RS.240/- PER SHARE SUCH AS COPY OF BANK STATEMENTS OF BSNL COMMERCIAL PRIVATE LIMITED, COPY OF ITR ACKNOWLEDGE MENT FOR THE ASSESSMENT YEAR 2012-13, COPY OF CERTIFICAT E OF ALLOTMENT ADVISE. COPY OF ALLOTMENT LETTER. COPY OF ANNUAL REPORT INCLUDING COPY OF BANK STATEMENTS AND COPY O F PAN 7 ITA NO. 686/KOL/20 17 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 7 CARD OF INVESTOR COMPANIES SUCH AS DEVSANT COMMERCI AL PRIVATE LIMITED, SANMATI SYNFAB PRIVATE LIMITED & S HLOK FASHIONS PRIVATE LIMITED AND COPY OF PAN OF DIRECTO RS OF INVESTOR COMPANIES. IN SUCH EVENT, I FIND THAT THE ISSUE OF SHARES AT A PREMIUM OF RS.240/- PER SHARE SEEMS TO BE JUSTIFIABLE WHEN ALL THE DETAILS & DOCUMENTS AS MEN TIONED ABOVE FILED BEFORE THE AO ONLY GO TO SHOW THE GENUI NENESS OF TRANSACTIONS OF SHARE PREMIUM INCLUDING FACE VALUES , IDENTITIES AND CREDITWORTHINESS OF THE SHAREHOLDERS OF THE COMPANY FOR JUSTIFICATION OF INVESTMENTS IN THE APP ELLANT COMPANY. 4.9. THEREFORE, CONSIDERING THE TOTALITY OF THE FAC TS AND CIRCUMSTANCES OF THE CASE, I FIND SUBSTANCE IN THE ARGUMENT OF THE AR THAT THE APPELLANT HAS MADE OUT ITS CASE THA T THE IDENTITY OF THE SHARE APPLICANTS ARE ESTABLISHED BE YOND DOUBT AND ON ENQUIRIES MADE BY THE AO THERE IS NO ADVERSE FINDING REACHED ON THIS ASPECT. ADMITTEDLY, ALL THE SHARE A PPLICANTS ARE EXISTING ASSESSEES UNDER THE ACT WHICH ESTABLIS HES THE IDENTITY AND AUTHENTICITY OF THE SHARE APPLICANTS. ABOUT THE GENUINENESS OF THE TRANSACTIONS, THERE IS NO ANY AD VERSE FINDING IN THE ASSESSMENT ORDER WHICH IS DISTINCT T O THE FACTS BROUGHT ON RECORD BY THE APPELLANT DURING THE COURS E OF ASSESSMENT PROCEEDING. THE CREDITWORTHINESS OF THE SHARE APPLICANTS AS REGARDS THEIR SUBSCRIPTION TO THE SHA RE CAPITAL IS PROVED BY SUBMISSION OF THEIR RETURN, AUDITED ANNUA L ACCOUNTS, THEIR BANK STATEMENT AND REPLIES TO NOTIC ES U/S 133(6) OF THE ACT AS DEPICTED HEREINABOVE. THE NET WORTH OF SUCH SUBSCRIBERS IS IN EXCESS OF THE AMOUNT INVESTE D BY EACH OF THEM AS EXPLAINED HEREINABOVE. THE ADDITION MADE BY AO IS BASED ON EXTRANEOUS PARAMETERS NOT GERMANE FOR DECI DING THE ISSUE. THE AO HAD NOT DEALT WITH THE ISSUE JUDICIOU SLY AND CONSISTENTLY WITH THE EVIDENCE ADDUCED DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS BY THE APPELLANT AND THE REPLIES OF THE SHARE APPLICANTS IN RESPECT OF THE SHARE CAPITA L DO NOT WARRANT THE INFERENCE THAT SUCH SHARE APPLICATION M ONIES RECEIVED IS UNACCOUNTED CASH CREDIT. HENCE, I AM IN CLINED TO ACCEPT THE ARGUMENTS TENDERED BY THE AR OF THE APPE LLANT IN THIS RESPECT. IN VIEW OF THE ABOVE, I HAVE NO HESIT ATION TO HOLD THAT THE IMPUGNED ADDITION MADE BY INVOKING THE PRO VISIONS OF S. 68 BY THE AO IS NOT JUSTIFIED IN THE CIRCUMST ANCES. IN VIEW OF THE FOREGOING, THE ADDITION OF RS.1,00,80,000/- MADE ON THIS ACCOUNT BY THE AO IS, THEREFORE, DIRECTED TO BE DEL ETED. THUS, THIS GROUND IS ALLOWED'. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 8 ITA NO. 686/KOL/20 17 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 8 5. THE LD. D.R. STRONGLY RELIED ON THE ORDER OF THE ASSESSING OFFICER IN SUPPORT OF THE REVENUES CASE ON THE ISSUE INVOLVED IN THIS CASE. HE CONTENDED THAT THE CREDITWORTHINESS OF THE CONCERNE D SHAREHOLDERS WAS NOT ESTABLISHED BY THE ASSESSEE-COMPANY BY PRODUCIN G THEM FOR EXAMINATION BEFORE THE ASSESSING OFFICER INSPITE OF SUFFICIENT OPPORTUNITY AFFORDED IN THIS REGARD. HE CONTENDED THAT MONEY TR AIL OF THE SHARE PREMIUM AMOUNT CLAIMED TO BE RECEIVED BY THE ASSESS EE-COMPANY FROM THE CONCERNED SHAREHOLDERS WAS REQUIRED TO BE SEEN TO ASCERTAIN THE GENUINENESS OF THE HUGE SHARE PREMIUM AMOUNT CLAIME D TO BE RECEIVED BY THE ASSESSEE, BUT THE LD. CIT(APPEALS) COMPLETELY O VERLOOKED THIS VITAL ASPECT WHILE DELETING THE ADDITION MADE BY THE ASSE SSING OFFICER ON ACCOUNT OF SHARE PREMIUM AMOUNT BY TREATING THE SAM E AS UNEXPLAINED CASH CREDIT. 6. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, CONTENDED THAT ALL THE RELEVANT ASPECTS OF THE ISSUE HAVE BEEN DUL Y CONSIDERED BY THE LD. CIT(APPEALS) AND AFTER TAKING INTO CONSIDERATION TH E RELEVANT DOCUMENTARY EVIDENCE PLACED ON RECORD BY THE ASSESS EE-COMPANY, CREDITWORTHINESS OF THE CONCERNED SHAREHOLDERS HAS BEEN ACCEPTED BY THE LD. CIT(APPEALS). HE CONTENDED THAT EVEN THE SHARE PREMIUM CHARGED BY THE ASSESSEE-COMPANY WAS DULY JUSTIFIED BY IT BY FU RNISHING THE RELEVANT FACTS AND FIGURES. HE CONTENDED THAT THE SHARE CAP ITAL AMOUNT RECEIVED FROM THE SHAREHOLDERS WAS ACCEPTED BY THE ASSESSING OFFICER AND ONLY THE SHARE PREMIUM AMOUNT RECEIVED FROM THEM WAS TREATED BY HIM AS UNEXPLAINED, WHICH WAS NOT JUSTIFIED. HE CONTENDED THAT IN THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHARE PREMIUM AMOUNT WAS HELD TO BE NOT SUSTAINABLE BY THE TRIBUNAL IN THE CASE OF ITO VS. - M/S. TREND INFRA DEVELOPERS PVT. LIMITED DECIDED VIDE ITS ORDER DATE D 26.10.2018 PASSED IN ITA NO. 2270/KOL/2016. 9 ITA NO. 686/KOL/20 17 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 9 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE RELEVANT DOCUMENTARY EVIDENCE IN THE FORM OF ANNUAL REPORTS, BANK STATEMENTS, COPIES OF PAN CARD, ETC. OF THE SHAREHOLDER COMPANI ES WAS PRODUCED BEFORE THE ASSESSING OFFICER IN ORDER TO ESTABLISH THE IDENTITY AS WELL AS CREDITWORTHINESS OF THE SAID SHAREHOLDER COMPANIES. THE NOTICES ISSUED BY THE ASSESSING OFFICER WERE ALSO DULY RESPONDED B Y THE SAID SHAREHOLDER COMPANIES BY FILING THEIR REPLIES. IT I S OBSERVED THAT THE ASSESSING OFFICER, HOWEVER, DOUBTED THEIR CREDITWOR THINESS AS WELL AS THE GENUINENESS OF THE SHARE PREMIUM AMOUNT MAINLY ON T HE GROUND THAT THE ASSESSEE-COMPANY FAILED TO PRODUCE THE DIRECTORS OF THE SHAREHOLDER COMPANIES FOR EXAMINATION. HE, HOWEVER, ACCEPTED TH E SHARE CAPITAL AMOUNT RECEIVED FROM THE CONCERNED SHAREHOLDER COMP ANIES AND TREATED MAINLY THE SHARE PREMIUM AMOUNT PAID BY THEM AS UNE XPLAINED. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, TH E SHARE PREMIUM CHARGED BY THE ASSESSEE-COMPANY WAS DULY JUSTIFIED BEFORE THE LD. CIT(APPEALS) BY FURNISHING THE RELEVANT FACTS AND F IGURES. IT IS OBSERVED THAT IN THE SIMILAR FACTS AND CIRCUMSTANCES INVOLVE D IN THE CASE OF M/S. TREND INFRA DEVELOPERS PVT. LIMITED (SUPRA), SIMILA R ADDITION MADE BY THE ASSESSING OFFICER ONLY ON ACCOUNT OF SHARE PREMIUM BY TREATING THE SAME AS UNEXPLAINED WAS DELETED BY THE LD. CIT(APPEALS) AND THE TRIBUNAL UPHELD THE ORDER OF THE LD. CIT(APPEALS) FOR THE FO LLOWING REASONS GIVEN IN PARAGRAPH NO. 3.3 OF ITS ORDER:- 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE FACT STATED HEREINABOVE REMAIN UNDISPUTED BEFORE US BY EITHER OF THE PARTIE S AND HENCE THE SAME ARE NOT REITERATED FORTHE SAKE OF BREVITY. AT THE OUTSE T, WE FIND THAT THE ASSESSEE HAD RECEIVED SHARE CAPITAL OF RS. 57,900/- FROM SIX SHAREHOLDERS AND RS. 2,88,92,100/- FROM THE VERY SAME SHAREHOLDERS TOWAR DS SHARE PREMIUM. THE SHARE CAPITAL RECEIVED BY THE ASSESSEE HAS BEEN DUL Y ACCEPTED BY THE LD. AO WITHIN THE KEN OF SECTION 68 OF THE ACT. HOWEVER, S HARE PREMIUM COMPONENT HAS BEEN DOUBTED BY THE LD. AO. WE FIND THAT THE AS SESSEE IN THE INSTANT CASE HAD DULY COMPLIED WITH BY FURNISHING THE COMPLETE D ETAILS OF SHARE SUBSCRIBERS TO PROVE THEIR IDENTITY, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF SHARE SUBSCRIBERS BEYOND DOUBT. THESE ARE DULY SUPPORTED BY THE DOCUMENTARY EVIDENCES WHICH ARE EN CLOSED IN THE PAPER BOOK. THE LD. AO HAD NOT FOUND ANY FALSITY OR ANY A DVERSE INFERENCE OF THE SAID DOCUMENTS. WE FIND THAT THE LD. CIT(A) HAD PLACED H EAVY RELIANCE ON THESE DOCUMENTS AND HAD GRANTED RELIEF TO THE ASSESSEE. A LL THE SHARE SUBSCRIBERS 10 ITA NO. 686/KOL/2 017 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 10 ARE DULY ASSESSED TO INCOME TAX AND THE TRANSACTION WITH THE ASSESSEE COMPANY ARE DULY ROUTED THROUGH BANKING CHANNELS AN D ARE DULY REFLECTED IN THEIR RESPECTIVE AUDITED BALANCE SHEETS WHICH ARE A LSO PLACED ON RECORD BEFORE US. IN ANY CASE, ONCE THE RECEIPT OF SHARE C APITAL HAS BEEN ACCEPTED AS GENUINE WITHIN THE KEN OF SECTION 68 OF THE ACT, TH ERE IS NO REASON FOR THE LD. AO TO DOUBT THE SHARE PREMIUM COMPONENT RECEIVED FR OM THE VERY SAME SHAREHOLDERS AS BOGUS. WE HELD THAT ALL THE THREE N ECESSARY INGREDIENTS OF SECTION 68 HAD BEEN DULY COMPLIED WITH BY THE ASSES SEE WITH PROPER DOCUMENTARY EVIDENCES. WE FIND THAT NOTICES ISSUED U/S 133(6) HAVE BEEN DULY COMPLIED WITH. THE ONLY GRIEVANCE OF THE LD. A O WAS THAT THE ASSESSEE COULD NOT PRODUCE THE DIRECTORS OF THE SHARE SUBSCR IBING COMPANIES. IN OUR CONSIDERED OPINION, FOR THIS REASON ALONE, THERE CA NNOT BE ANY ADDITION U/S 68 OF THE ACT AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION PVT. LTD. REPORTED IN 159 ITR 78 (SC). WE FIND THAT THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF NOVO PROMOT ERS AND FINELEASE PVT. LTD. REPORTED IN 342 ITR 169 (DEL) VEHEMENTLY RELIE D UPON BY THE LD. DR BEFORE US, IS NOT APPLICABLE IN THE INSTANT CASE, A S IN THE FACTS BEFORE THE HONBLE DELHI HIGH COURT, THE NOTICES U/S 133(6) HA VE NOT BEEN DULY COMPLIED WITH. HENCE THE DECISION RENDERED BY THE HONBLE DE LHI HIGH COURT IN THE CASE REFERRED TO SUPRA IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE AND IS FACTUALLY DISTINGUISHABLE. 8. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WEL L AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THE CASE OF M /S. TREND INFRA DEVELOPERS PVT. LIMITED (SUPRA) DECIDED BY THE TRIB UNAL, WE RESPECTFULLY FOLLOW THE SAID DECISION AND UPHOLD THE IMPUGNED OR DER OF THE LD. CIT(APPEALS) DELETING THE ADDITION MADE BY THE ASSE SSING OFFICER ON ACCOUNT OF SHARE PREMIUM. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 22, 2018. SD/- SD/- (SATBEER SINGH GODARA) (P.M. JAGTAP) JUDICIAL MEMBER VICE-P RESIDENT (KZ) KOLKATA, THE 22 ND DAY OF NOVEMBER, 2018 COPIES TO : (1) INCOME TAX OFFICER, WARD-10(4), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, 3 RD FLOOR, KOLKATA-700 069 (2) M/S. BSNI COMMERCIAL PVT. LIMITED, 11 ITA NO. 686/KOL/2 017 A.Y. 2012-2013 M/S. BSNL COMMERCIAL PVT. LIMITED 11 BEHIND JHAWTALLA KALI TEMPLE, TEGHORIA, KOLKATA-700 059 (3) COMMISSIONER OF INCOME TAX (APPEALS)-4, KOLKA TA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.