ITO, Wd-10(2), Kolkata, Kolkata V. M/s Shlok Fashions Pvt. Limited, Kolkata

ITA 695/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0134 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Question of law; Onus to prove
• Section: 271(1)(c); 143(3); 142(1); 133(6); 131; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI A T VARKEY, JM, & SHRI M.BAL AGANESH, AM] I.T.A NO. 695/KOL/201 7 ASSESSMENT YEAR : 2012-1 3 ITO, WARD-10(2), KOLKATA -VS- M/S SHLOK FASH IONS PVT. LTD. [PAN: AAQCS 5127 H ] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SAURABH KUMAR , ADDL. CIT SR. DR FOR THE RESPONDENT : SHRI ANIL KOCHAR, ADVOCA TE DATE OF HEARING : 29.11.2018 DATE OF PRONOUNCEMENT : 07.12.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-4, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO. 849/CIT(A)- 4/WARD-10(2)/KOL/15-16 DATED 02.02.2017 AGAINST TH E ORDER PASSED BY ITO, WARD- 10(2), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 21.03.2015 FOR THE ASS ESSMENT YEAR 2012-13. 2. THE ONLY EFFECTIVE ISSUE TO BE DECIDED IN THIS A PPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE TOWARDS SHARE PREMIUM IN THE SUM OF RS. 2,70,45,800/-, IN THE FACTS AND CIRCUMSTANCES OF TH E CASE. 2 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 2 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE COMPANY RAISED SHARE CAPITAL OF RS 23,87,500/- AND SHARE PREMIUM OF RS 5,72,12,500/- D URING THE YEAR UNDER APPEAL TOTALING TO RS 5,96,00,000/-. THE LD. AO OBSERVED THAT SINCE THERE WAS NO SUBSTANTIAL BUSINESS ACTIVITY CARRIED ON BY THE ASSESSEE, THE A SSESSEE COMPANY CANNOT COMMAND HUGE SHARE PREMIUM. ACCORDINGLY HE SOUGHT TO VERIFY THE VERACITY OF THE SHARE CAPITAL AND SHARE PREMIUM RAISED BY THE ASSESSEE. THE ASSE SSEE SUBMITTED THAT IT IS ENGAGED IN THE BUSINESS OF INVESTMENT IN UNQUOTED EQUITY SHARE S OF COMPANIES. THE ASSESSEE RAISED SHARE CAPITAL AND SHARE PREMIUM FROM VARIOUS CORPOR ATE BODIES. THE LD AO ADMITTED IN HIS ORDER THAT IN SUPPORT OF SHARE SUBSCRIPTIONS RECEIVED , THE ASSESSEE COMPANY HAD FURNISHED DOCUMENTS SUPPORTING THE PAYMENT OF SHARE SUBSCRIPTION AMOUNTS BY SHARE SUBSCRIBERS. NOTICE U/S 133(6) OF THE ACT WERE ISSU ED TO ALL THE SHAREHOLDERS WHICH WERE DULY REPLIED BY THEM DIRECTLY BEFORE THE LD. AO. TH E LD. AO OBSERVED THAT REPLY SENT BY THE SHARE HOLDERS WERE ALMOST IDENTICAL IN STYLE AN D SUBMITTED ALMOST AT THE SAME POINT OF TIME. EVEN ADDRESS OF THE REGISTERED OFFICE OF S OME OF THE COMPANIES WERE SAME WITH COMMON DIRECTORS. ACCORDINGLY, THE LD. AO ALLEGED O N THE CONNIVANCE OF THE ASSESSEE WITH THE SHAREHOLDER COMPANIES. THE SUMMONS U/S 131 OF THE ACT WAS ISSUED TO THE DIRECTORS OF THE ASSESSEE COMPANY TO EXAMINE THE RE CEIPT OF PREMIUM AND THE ASSESSEE WAS ALSO DIRECTED TO PRODUCE THE DIRECTORS OF THE S HARE HOLDER COMPANIES FOR EXAMINATION OF IDENTITY, GENUINENESS OF TRANSACTION S AND CREDITWORTHINESS OF THE INVESTORS. THE LD. AO OBSERVED THAT THE SUMMONS ISS UED U/S 131 OF THE ACT WAS DULY COMPLIED BY THE DIRECTORS OF THE ASSESEE COMPANY FR OM WHOM A STATEMENT ON OATH U/S 131 OF THE ACT WAS RECORDED AND PLACED ON RECORD. T HE LD AO ALSO OBSERVED THAT THE DIRECTOR OF THE ASSESSEE COMPANY PRODUCED SOME OF T HE DIRECTORS OF THE INVESTOR COMPANIES FOR THEIR CROSS EXAMINATION AND THEIR DEP OSITIONS WERE TAKEN AND PLACED ON RECORD. HOWEVER, THE LD AO CONCLUDED THAT THE ASSE SSEE FAILED TO CORROBORATE THE CREDITWORTHINESS OF THE INVESTORS DESPITE REASONABL E OPPORTUNITY AND PROCEEDED TO TREAT THE ENTIRE RECEIPT OF SHARE CAPITAL AND SHARE PREMI UM OF RS 5,96,00,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE L D CITA APPRECIATED THE VARIOUS 3 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 3 EVIDENCES SUBMITTED BY THE ASSESSEE AND IN THE FACT S AND CIRCUMSTANCES OF THE CASE, DELETED THE ADDITION MADE TOWARDS SHARE CAPITAL AND SHARE PREMIUM IN THE SUM OF RS 5,96,00,000/-. AGGRIEVED , THE REVENUE IS IN APPEA L BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE COMPANY HAD DUL Y COMPLIED WITH ALL THE DETAILS THAT WERE REQUISITIONED IN THE QUESTIONNAIRE ALONG WITH NOTICE U/S 142(1) OF THE ACT IN THE COURSE OF ASSESSMENT PROCEEDINGS BY FURNISHING THE ENTIRE DETAILS OF SHAREHOLDERS WHO HAD INVESTED IN SHARE CAPITAL AND SHARE PREMIUM IN THE ASSESSEE COMPANY. IT IS NOT IN DISPUTE THAT THE LD AO SOUGHT TO VERIFY THE DETAILS FILED BY THE ASSESSEE BY WAY OF ISSUE OF NOTICE U/S 133(6) OF THE ACT DIRECTLY . IT IS N OT IN DISPUTE THAT ALL THE SHAREHOLDERS DIRECTLY REPLIED IN RESPONSE TO NOTICE U/S 133(6) O F THE ACT BEFORE THE LD AO CONFIRMING THEIR FACTUM OF INVESTMENTS IN SHARE CAPITAL AND SH ARE PREMIUM OF THE ASSESSEE COMPANY. LATER THE LD AO ISSUED SUMMONS U/S 131 OF THE ACT TO THE DIRECTOR OF THE ASSESSEE COMPANY AND ALSO DIRECTED HIM TO PRODUCE T HE DIRECTORS OF THE INVESTOR COMPANIES. THE DIRECTOR OF THE ASSESSEE COMPANY AP PEARED BEFORE THE LD AO AND A STATEMENT ON OATH U/S 131 OF THE ACT WAS RECORDED F ROM HIM BY THE LD AO. IT IS ALSO NOT IN DISPUTE THAT THE DIRECTORS OF THE INVESTOR COMPA NIES ALSO APPEARED BEFORE THE LD AO AND FROM WHOM STATEMENTS ON OATH WERE RECORDED BY T HE LD AO. THESE FACTS ARE ALSO STATED BY THE LD AO IN HIS ASSESSMENT ORDER. THE D IRECTORS OF THE INVESTOR COMPANIES IN THEIR STATEMENTS ON OATH, DID CONFIRM THE FACTUM OF INVESTMENTS MADE IN THE ASSESSEE COMPANY TOWARDS SHARE CAPITAL AND SHARE PREMIUM. NO ADVERSE INFERENCE WAS DRAWN BY THE LD AO WITH REGARD TO THOSE DEPOSITIONS. WHIL E IT IS SO, IT COULD BE SAFELY CONCLUDED THAT THE ASSESSEE HAD DISCHARGED ITS ONUS IN FULL EVEN BY PRODUCING THE DIRECTORS OF THE INVESTOR COMPANIES IN RESPONSE TO SUMMONS U/S 131 OF THE ACT , EVENTHOUGH IT IS NOT THE DUTY OF THE ASSESSEE TO DI SCHARGE THE SAME. 4 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 4 5. IT IS NOT IN DISPUTE THAT THE AMOUNTS WERE RECEI VED BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES OR REAL TIME GROSS SETTLEMENT (RTGS) THROUGH REGULAR BANKING CHANNELS. THE AUTHORIZED SHARE CAPITAL OF THE ASS ESSEE COMPANY HAD BEEN DULY INCREASED TO ACCOMMODATE THE RECEIPT OF SHARE CAPIT AL AND THE NECESSARY STATUTORY RETURNS IN THAT REGARD WERE DULY FILED WITH THE REG ISTRAR OF COMPANIES TOGETHER WITH THE RETURN OF ALLOTMENT OF SHARES TO THE RESPECTIVE SHA REHOLDERS. ALL THE SHAREHOLDERS ARE REGULAR INCOME TAX ASSESSEES ASSESSED AT KOLKATA. THE ENTIRE DETAILS OF NAMES, ADDRESSES OF SHAREHOLDERS, PAN, INCOME TAX ASSESSMENT PARTICU LARS, BANK STATEMENTS, IMMEDIATE SOURCE OF CREDIT FOR MAKING INVESTMENTS IN THE ASSE SSEE COMPANY AND AUDITED FINANCIAL STATEMENTS DULY REFLECTING THE AMOUNTS INVESTED IN THE ASSESSEE COMPANY AND ALSO PROVING THE CREDITWORTHINESS TO MAKE INVESTMENTS IN ASSESSEE COMPANY. NO ADVERSE INFERENCES WERE DRAWN FROM THE DETAILS SUBMITTED BY THE ASSESSEE AS WELL AS BY THE SHAREHOLDERS BEFORE THE LD AO. WE FIND THAT THE AS SESSEE HAD DULY DISCHARGED THE NATURE AND SOURCE OF CREDIT REPRESENTED IN THE FORM OF SHA RE CAPITAL AND SHARE PREMIUM WITHIN THE MEANING OF SECTION 68 OF THE ACT. THE DOCUMENTS RELATING TO SOURCE OF SOURCE OF INVESTOR COMPANIES WERE ALSO PRODUCED BEFORE THE LD AO DIRECTLY BY THE INVESTOR COMPANIES. 6. AS PER THE MANDATE OF SECTION 68 OF THE ACT, THE NATURE AND SOURCE OF CREDIT IN THE BOOKS OF THE ASSESSEE COMPANY HAS BEEN DULY EXPLAIN ED BY THE ASSESSEE. THE CREDIT IS IN THE FORM OF RECEIPT OF SHARE CAPITAL AND SHARE PREM IUM FROM SHARE APPLICANTS. THE NATURE OF RECEIPT TOWARDS SHARE CAPITAL IS WELL EST ABLISHED FROM THE ENTRIES PASSED IN THE RESPECTIVE BALANCE SHEETS OF THE COMPANIES AS SHARE CAPITAL AND INVESTMENTS, AS THE CASE MAY BE. HENCE THE NATURE OF RECEIPT IS PROVED BY TH E ASSESSEE BEYOND DOUBT. IN RESPECT OF SOURCE OF CREDIT, THE ASSESSEE HAS TO PROVE THE THREE NECESSARY INGREDIENTS I.E IDENTITY OF SHARE APPLICANTS, GENUINENESS OF TRANSACTIONS AN D CREDITWORTHINESS OF SHARE APPLICANTS. THE IDENTITY OF SHARE APPLICANTS IS PR OVED BEYOND DOUBT BY THE ASSESSEE BY FURNISHING THE NAME, ADDRESS, PAN OF SHARE APPLICAN TS TOGETHER WITH THE COPIES OF 5 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 5 BALANCE SHEETS, INCOME TAX RETURNS, BANK STATEMENTS , DETAILS OF SOURCE OF SOURCE ETC. WITH REGARD TO THE CREDITWORTHINESS OF SHARE APPLIC ANTS, THESE COMPANIES ARE HAVING CAPITAL IN SEVERAL CRORES OF RUPEES AND THE INVESTM ENT MADE IN THE ASSESSEE COMPANY IS A SMALL PART OF THEIR CAPITAL. THESE TRANSACTIONS AR E ALSO DULY REFLECTED IN THE BALANCE SHEETS OF THE SHARE APPLICANTS. BY THIS, THE CREDIT WORTHINESS OF SHARE APPLICANTS IS ALSO PROVED BEYOND DOUBT. WITH REGARD TO GENUINENESS OF TRANSACTIONS, THE MONIES HAVE BEEN DIRECTLY PAID TO THE ASSESSEE COMPANY BY ACCOUNT PA YEE CHEQUES OR BY RTGS OUT OF SUFFICIENT BANK BALANCES AVAILABLE IN THEIR RESPECT IVE BANK ACCOUNTS. WE FIND THAT THE ASSESSEE HAD EVEN PROVED THE SOURCE OF MONEY DEPOSI TED INTO THE RESPECTIVE BANK ACCOUNTS OF SHARE APPLICANTS, WHICH IN TURN HAD BEE N USED BY THEM TO SUBSCRIBE TO THE ASSESSEE COMPANY AS SHARE APPLICATION. HENCE THE S OURCE OF SOURCE IS ALSO PROVED IN THE INSTANT CASE THOUGH THE SAME IS NOT REQUIRED TO BE DONE BY THE ASSESSEE AS PER LAW. THE SHARE APPLICANTS HAVE CONFIRMED THE FACT OF INVESTM ENT IN SHARE CAPITAL AND SHARE PREMIUM IN RESPONSE TO NOTICE U/S 133(6) OF THE ACT AND HAVE ALSO CONFIRMED THE PAYMENTS WHICH ARE DULY CORROBORATED WITH THEIR RES PECTIVE BANK STATEMENTS AND ALL THE PAYMENTS ARE BY ACCOUNT PAYEE CHEQUES. THE DIRECTO RS OF THE SHARE APPLICANTS HAD ALSO DEPOSED BEFORE THE LD AO IN RESPONSE TO SUMMONS U/S 131 OF THE ACT AND CONFIRMED ALL THE TRANSACTIONS WITH THE ASSESSEE COMPANY. RELIANC E IN THIS REGARD IS PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ORISSA CORPORA TION P LTD REPORTED IN 159 ITR 78 (SC) AND HONBLE GUJARAT HIG H COURT IN THE CASE OF DCIT VS ROHINI BUILDERS REPORTED IN 256 ITR 360 (GUJ) , WHEREIN IT WAS HELD THAT ONUS OF THE ASSESSEE (IN WHOSE BOOKS OF ACCOUNT, THE CREDIT APP EARS) STANDS FULLY DISCHARGED, IF THE IDENTITY OF THE CREDITOR IS ESTABLISHD AND ACTUAL R ECEIPT OF MONEY FROM SUCH CREDITOR IS PROVED. IN CASE, THE ASSESSING OFFICER IS DISSATIS FIED ABOUT THE SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNTS OF THE CREDITORS , THE PROPER COURSE WOULD BE TO ASSESS SUCH CREDIT IN THE HANDS OF THE CREDITOR (AFTER MAKING DUE ENQU IRIES FROM SUCH CREDITOR). IN ARRIVING AT THIS CONCLUSION, THE HONBLE COURT HAS FURTHER S TRESSED THE PRESENCE OF WORD MAY IN 6 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 6 SECTION 68 OF THE ACT. RELEVANT OBSERVATIONS OF HON BLE GUJARAT HIGH COURT AT PAGES 369 & 370 ARE AS UNDER :- MERELY BECAUSE SUMMONS ISSUED TO SOME OF THE CREDI TORS COULD NOT BE SERVED OR THEY FAILED TO ATTEND BEFORE THE ASSESSING OFFICER, CANN OT BE A GROUND TO TREAT THE LOANS TAKEN BY THE ASSESSEE FROM THOSE CREDITORS AS NON-GENUINE IN VIEW OF THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE CASE OF ORISSA CORPORAT ION (1986) 159 ITR 78. IN THE SAID DECISION THE SUPREME COURT HAS OBSERVED THAT WHEN T HE ASSESSEE FURNISHES NAMES AND ADDRESSES OF THE ALLEGED CREDITORS AND THE GIR NUMB ERS, THE BURDEN SHIFTS TO THE DEPARTMENT TO ESTABLISH THE REVENUES CASE AND IN ORDER TO SUSTAIN THE ADDITION THE REVENUE HAS TO PURSUE THE ENQUIRY AND TO ESTABLISH THE LACK OF CREDITWORTHINESS AND MERE NON- COMPLIANCE OF SUMMONS ISSUED BY THE ASSES SING OFFICER UNDER SECTION 131, BY THE ALLEGED CREDITORS WILL NOT BE SUFFICIENT TO DRAW AND ADVERSE INFERENCE AGAINST THE ASSESSEE. IN THE CASE OF SIX CREDITORS WHO APPEARED BEFORE THE ASSESSING OFFICER AND WHOSE STATEMENTS WERE RECORDED BY THE ASSESSING OFF ICER, THEY HAVE ADMITTED HAVING ADVANCED LOANS TO THE ASSESSEE BY ACCOUNT PAYEE CHE QUES AND IN CASE THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE CASH AMOUNT DEPO SITED BY THOSE CREDITORS IN THEIR BANK ACCOUNTS, THE PROPER COURSE WOULD HAVE BEEN TO MAKE ASSESSMENTS IN THE CASES OF THOSE CREDITORS BY TREATING THE CASH DEPOSITS IN THEIR BA NK ACCOUNTS AS UNEXPLAINED INVESTMENTS OF THOSE CREDITORS UNDER SECTION 69. FURTHER, WE MAY POINT OUT THAT SECTION 68 UNDER WHI CH THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER READS AS UNDER: '68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, I N THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. ' THE PHRASEOLOGY OF SECTION 68 IS CLEAR. THE LEGISLA TURE HAS LAID DOWN THAT IN THE ABSENCE OF A SATISFACTORY EXPLANATION, THE UNEXPLAI NED CASH CREDIT MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. IN THIS CASE THE LEGISLATIVE MANDATE IS NOT IN TERMS OF THE WORDS 'S HALL BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THE SUPREME COURT WHILE INTERPRETING SIMILAR PHRASEOLOGY USED IN SECTION 69 HAS HELD THA T IN CREATING THE LEGAL FICTION THE PHRASEOLOGY EMPLOYS THE WORD MAY AND NOT SHALL. THUS THE UNSATISFACTORINESS OF THE EXPLANATION DOES NOT AND NEED NOT AUTOMATICALLY RES ULT IN DEEMING THE AMOUNT CREDITED IN THE BOOKS AS THE INCOME OF THE ASSESSEE AS HELD BY THE SUPREME COURT IN THE CASE OF CIT VS. SMT. P.K. NOORJAHAN [1999] 237 I TR 570. 7 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 7 IT WOULD BE PERTINENT TO NOTE THAT AGAINST THE SAID DECISION OF HONBLE GUJARAT HIGH COURT, THE SPECIAL LEAVE PETITION (SLP IN SHORT) PR EFERRED BY THE REVENUE WAS DISMISSED BY THE HONBLE SUPREME COURT. 7. UNDISPUTEDLY THE SHARE APPLICANTS IN THIS CASE A RE THE BANK ACCOUNT HOLDER IN THEIR RESPECTIVE BANKS IN THEIR OWN NAME AND ARE SOLE OWN ER OF THE CREDITS APPEARING IN THEIR BANK ACCOUNT FROM WHERE THEY ISSUED CHEQUES TO THE APPELLANT. FOR THE PROPOSITION THAT A BANK ACCOUNT HOLDER HIMSELF IS THE 'OWNER' OF 'CRED ITS' APPEARING IN HIS ACCOUNT (WITH THE RESULT THAT HE HIMSELF IS ACCOUNTABLE TO EXPLAI N THE SOURCE OF SUCH CREDITS IN WHATEVER WAY AND FORM, THE SAME HAVE EMERGED) SUPPORT CAN BE DERIVED FROM SECTION 4 OF BANKERS BOOK EVIDENCE ACT 1891 WHICH READS AS UNDER :- '4. MODE OF PROOF OF ENTRIES IN BANKERS' BOOKS SUBJ ECT TO THE PROVISIONS OF THIS ACT, A CERTIFIED COPY OF ANY ENTRY IN A BANKERS' BOOK SHA LL IN ALL LEGAL PROCEEDINGS BE RECEIVED AS PRIMA FACIE EVIDENCE OF THE EXISTENCE OF SUCH ENTRY, AND SHALL BE ADMITTED AS EVIDENCE OF THE MATTERS, TRANSACTIONS AND ACCOUNTS THEREIN RECORDED IN EVERY CASES WHERE, AND TO THE SAME EX TENT AS, THE ORIGINAL ENTRY ITSELF IS NOW BY LAW ADMISSIBLE, BUT NOT FURTHER O R OTHERWISE. FOLLOWING THE SAID PROVISIONS, THE CO-ORDINATE BENC H OF ALLAHABAD TRIBUNAL IN THE CASE OF ANAND PRAKASH AGARWAL REPORTED IN 6 DTR (ALL-TRI B) 191 HELD AS UNDER:- THE QUESTION THAT REMAINS TO BE DECIDED NOW IS WHE THER THE SUBJECT MATTER OF TRANSFER WAS THE ASSET BELONGING TO THE TRANSFEROR/DONORS TH EMSELVES. THERE IS ENOUGH MATERIAL ON RECORD WHICH GOES TO SHOW THAT THERE WERE VARIOU S CREDITS IN THE BANK ACCOUNTS OF THE DONORS, PRIOR TO THE TRANSACTION OF GIFTS, WHIC H UNDISPUTEDLY BELONGING TO THE RESPECTIVE DONORS THEMSELVES, IN THEIR OWN RIGHTS. NO PART OF THE CREDITS IN THE SAID BANK' ACCOUNTS WAS GENERATED FROM THE APPELLANT AND /OR FROM ITS ASSOCIATES, IN ANY MANNER. THE CERTIFICATES ISSUED BY THE BANKS ARE CO NSTRUABLE AS EVIDENCE ABOUT THE OWNERSHIP OF THE TRANSFERORS OR THEIR RESPECTIVE BA NK ACCOUNTS, AS PER S.4 OF THE BANKERS' BOOKS EVIDENCE ACT 1891, WHICH READ AS UND ER: '4. WHERE AN EXTRACT OF ACCOUNT WAS DULY SIGNED BY THE AGENT OF THE BANK AND IMPLICIT IN ITS WAS A CERTIFICATE THAT IT WAS A TRUE COPY OF AN ENTRY CONTAINED IN ONE OF THE ORDINARY BOOKS OF THE BANK AND WAS MADE IN THE USUAL AND ORD INARY COURSE OF BUSINESS AND THAT SUCH BOOK WAS IN THE CUSTODY OF THE BANK, IT WAS HE LD ADMISSIBLE IN EVIDENCE. RADHESHYAM V. SAFIYABAI IBRAHIM AIR 1988 BOM. 361 : 1987 MAH. 725: 1987 BANK J 552. 8 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 8 IN VIEW OF THE POSITION OF LAW AS DISCUSSED ABOVE, IT IS ALWAYS OPEN FOR A BORROWER TO CONTEND, THAT EVEN THE CREDITWORTHINESS OF THE LE NDER STANDS PROVED TO THE EXTENT OF CREDITS APPEARING IN HIS BANK ACCOUNT AND HE SHOULD BE HELD TO BE SUCCESSFUL IN THIS CONTENTION. 8. IN THE CASE OF NEMI CHAND KOTHARI VS CIT REPORTE D IN 264 ITR 254 (GAU), THE HON'BLE GUAHATI HIGH COURT HAS THROWN LIGHT ON ANOT HER ASPECT TOUCHING THE ISSUE OF ONUS ON ASSESSEE UNDER SECTION 68, BY HOLDING THAT THE S AME SHOULD BE DECIDED BY TAKING INTO CONSIDERATION THE PROVISION OF SECTION 106 OF THE EVIDENCE ACT WHICH SAYS THAT A PERSON CAN BE REQUIRED TO PROVE ONLY SUCH FACTS WHI CH ARE IN HIS KNOWLEDGE. THE HON'BLE COURT IN THE SAID CASE HELD THAT, ONCE IT I S FOUND THAT AN ASSESSEE HAS ACTUALLY TAKEN MONEY FROM DEPOSITOR/LENDER WHO HAS BEEN FULL Y IDENTIFIED, THE ASSESSEE/BORROWER CANNOT BE CALLED UPON TO EXPLAIN, MUCH LESS PROVE T HE AFFAIRS OF SUCH THIRD PARTY, WHICH HE IS NOT EVEN SUPPOSED TO KNOW OR ABOUT WHICH HE C ANNOT BE HELD TO BE ACCREDITED WITH ANY KNOWLEDGE. IN THIS VIEW, THE HON'BLE COURT HAS LAID DOWN THAT SECTION 68 OF INCOME-TAX ACT, SHOULD BE READ ALONG WITH SECTION 1 06 OF EVIDENCE ACT. THE RELEVANT OBSERVATIONS AT PAGE 260 TO 262, 264 AND 265 OF THE REPORT ARE REPRODUCED HEREIN BELOW:- 'WHILE INTERPRETING THE MEANING AND SCOPE OF SECTIO N 68, ONE HAS TO BEAR IN MIND THAT NORMALLY, INTERPRETATION OF A STATUTE SHALL BE GENERAL, IN NATURE, SUBJECT ONLY TO SUCH EXCEPTIONS AS MAY BE LOGICALLY PERMITTED BY THE STATUTE ITSELF OR BY SOME OTHER LAW CONNECTED THEREWITH OR RELEVANT THERETO. KEEPING IN VIEW THESE FUNDAMENTALS OF INTERPRETATION OF STATUTES, WHEN WE READ CAREFULLY THE PROVISIONS OF SECTION 68, WE NOTICE NOTHING IN SECTION 68 TO S HOW THAT THE SCOPE OF THE INQUIRY UNDER SECTION 68 BY THE REVENUE DEPARTMENT SHALL RE MAIN CONFINED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE AS SESSEE AND THE CREDITOR NOR DOES THE WORDING OF SECTION 68 INDICATE THAT SECTIO N 68 DOES NOT AUTHORIZE THE REVENUE DEPARTMENT TO MAKE INQUIRY INTO THE SOURCE( S) OF THE CREDIT AND/OR SUB- CREDITOR. THE LANGUAGE EMPLOYED BY SECTION 68 CANNO T BE READ TO IMPOSE SUCH LIMITATIONS ON THE POWERS OF THE ASSESSING OFFICER. THE LOGICAL CONCLUSION, THEREFORE, HAS TO BE, AND WE HOLD THAT AN INQUIRY U NDER SECTION 68 NEED NOT NECESSARILY BE KEPT CONFINED BY THE ASSESSING OFFIC ER WITHIN THE TRANSACTIONS, WHICH TOOK PLACE BETWEEN THE ASSESSEE AND HIS CREDI TOR, BUT THAT THE SAME MAY BE EXTENDED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLAC E BETWEEN THE CREDITOR AND HIS SUB-CREDITOR. THUS, WHILE THE ASSESSING OFFICER IS UNDER SECTION 68, FREE TO LOOK INTO THE SOURCE(S) OF THE CREDITOR AND/OR OF THE SU B-CREDITOR, THE BURDEN ON THE 9 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 9 ASSESSEE UNDER SECTION 68 IS DEFINITELY LIMITED. TH IS LIMIT HAS BEEN IMPOSED BY SECTION 106 OF THE EVIDENCE ACT WHICH READS AS FOLL OWS: 'BURDEN OF PROVING FACT ESPECIALLY WITHIN KNOWLEDGE .-WHEN ANY FACT IS ESPECIALLY WITHIN THE KNOWLEDGE OF ANY PERSON, THE BURDEN) OF PROVING THAT FACT IS UPON HIM. ' ******** WHAT, THUS, TRANSPIRES FROM THE ABOVE DISCUSSION IS THAT WHITE SECTION 106 OF THE EVIDENCE ACT LIMITS THE ONUS OF THE ASSESSEE TO THE EXTENT OF HIS PROVING THE SOURCE FROM WHICH HE HAS RECEIVED THE CASH CREDIT, SECTION 68 GIVES AMPLE FREEDOM TO THE ASSESSING OFFICER TO MAKE INQUIRY NOT ONLY INTO THE SOURCE(S)OF THE CREDITOR BUT ALSO OF HIS (CREDITOR'S) SUB-CREDITORS AND PROVE, A S A RESULT, OF SUCH INQUIRY, THAT THE MONEY RECEIVED BY THE ASSESSEE, IN THE FORM OF LOAN FROM THE CREDITOR, THOUGH ROUTED THROUGH THE SUB-CREDITORS, ACTUALLY BELONGS TO, OR WAS OF, THE ASSESSEE HIMSELF. IN OTHER WORDS, WHILE SECTION 68 GIVES THE LIBERTY TO THE ASSESSING OFFICER TO ENQUIRE INTO THE SOURCE/SOURCE FROM WHERE THE CR EDITOR HAS RECEIVED THE MONEY, SECTION 106 MAKES THE ASSESSEE LIABLE TO DISCLOSE O NLY THE SOURCE(S) FROM WHERE HE HAS HIMSELF RECEIVED THE CREDIT AND IT IS NOT THE B URDEN OF THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE SOURCE(S) OF THE SUB-CR EDITORS. IF SECTION 106 AND SECTION 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN, THE INTERPRETATION OF SECTION 68 ARE TO STAND TOGETHER, WHICH THEY MUST, THEN THE INTERPRETATION OF SECTION 68 HAS TO BE IN SUCH A WAY THAT IT DOES NOT MAKE SECTION 106 REDUNDANT. HENCE, THE HARMONIOUS CONSTRUCTION OF SECTION 106 O F THE EVIDENCE ACT AND SECTION 68 OF THE INCOME- TAX ACT WILL BE THAT THOU GH APART FROM ESTABLISHING THE IDENTITY OF THE CREDITOR, THE ASSESSEE MUST ESTABLI SH THE GENUINENESS OF THE TRANSACTION AS WELL AS THE CREDITWORTHINESS OF HIS CREDITOR, THE BURDEN OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIO NS AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR MUST REMAIN CONFIN ED TO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDI TOR. WHAT FOLLOWS, AS A COROLLARY, IS THAT IT IS NOT THE BURDEN OF THE ASSE SSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS BETWEEN HIS CREDITOR AND SUB-CREDI TORS NOR IS IT THE BURDEN OF THE ASSESSEE TO PROVE THAT THE SUB-CREDITOR HAD THE CRE DITWORTHINESS TO ADVANCE THE CASH CREDIT TO THE CREDITOR FROM WHOM THE CASH CRED IT HAS BEEN. EVENTUALLY, RECEIVED BY THE ASSESSEE. IT, THEREFORE, FURTHER LO GICALLY FOLLOWS THAT THE CREDITOR'S CREDITWORTHINESS HAS TO BE JUDGED VIS-A-VIS THE TRA NSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR, AND IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CRE DITOR OR OF THE GENUINENESS OF THE TRANSACTIONS, WHICH TOOK BETWEEN THE CREDITOR A ND SUB-CREDITOR AND/OR CREDITWORTHINESS OF THE SUB- CREDITORS, FOR, THESE ASPECTS MAY NOT BE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE. ' ********** 10 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 10 ' ... IF A CREDITOR HAS, BY ANY UNDISCLOSED SOURCE, A PARTICULAR AMOUNT OF MONEY IN THE BANK, THERE IS NO LIMITATION UNDER THE LAW ON T HE PART OF THE ASSESSEE TO OBTAIN SUCH AMOUNT OF MONEY OR PART THEREOF FROM THE CREDI TOR, BY WAY OF CHEQUE IN THE FORM OF LOAN AND IN SUCH A CASE, IF THE CREDITOR FA ILS TO SATISFY AS TO HOW HE HAD ACTUALLY RECEIVED THE SAID AMOUNT AND HAPPENED TO K EEP THE SAME IN THE BANK, THE SAID AMOUNT CANNOT BE TREATED AS INCOME OF THE ASSE SSEE FROM UNDISCLOSED SOURCE. IN OTHER WORDS, THE GENUINENESS AS WELL AS THE CRED ITWORTHINESS OF A CREDITOR HAVE TO BE ADJUDGED VIS-A-VIS THE TRANSACTIONS, WHICH HE HAS WITH THE ASSESSEE. THE REASON WHY WE HAVE FORMED THE OPINION THAT IT IS NO T THE BUSINESS OF THE ASSESSEE TO FIND OUT THE ACTUAL SOURCE OR SOURCES FROM WHERE THE CREDITOR HAS ACCUMULATED THE AMOUNT, WHICH HE ADVANCES, AS LOAN, TO THE ASSE SSEE IS THAT SO FAR AS AN ASSESSEE IS CONCERNED, HE HAS TO PROVE THE GENUINEN ESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITOR VIS-A-VIS THE TRAN SACTIONS WHICH HAD TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR AND NOT BETWE EN THE CREDITOR AND THE SUB- CREDITORS, FOR, IT IS NOT EVEN REQUIRED UNDER THE L AW FOR THE ASSESSEE TO TRY TO FIND OUT AS TO WHAT SOURCES FROM WHERE THE CREDITOR HAD RECEIVED THE AMOUNT, HIS SPECIAL KNOWLEDGE UNDER SECTION 106 OF THE EVIDENCE ACT MAY VERY WELL REMAIN CONFINED ONLY TO THE TRANSACTIONS, WHICH HE HAD' WI TH THE CREDITOR AND HE MAY NOT KNOW WHAT TRANSACTION(S) HAD TAKEN PLACE BETWEEN HI S CREDITOR AND THE SUB- CREDITOR ' ********** 'IN OTHER WORDS, THOUGH UNDER SECTION 68 AN ASSESSI NG OFFICER IS FREE TO SHOW, WITH THE HELP OF THE INQUIRY CONDUCTED BY HIM INTO THE TRANSACTIONS, WHICH HAVE TAKEN PLACE BETWEEN THE CREDITOR AND THE SUB-CREDIT OR, THAT THE TRANSACTION BETWEEN THE TWO WERE NOT GENUINE AND THAT THE SUB-C REDITOR HAD NO CREDITWORTHINESS, IT WILL NOT NECESSARILY MEAN THAT THE LOAN ADVANCED BY THE SUB- CREDITOR TO THE CREDITOR WAS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE UNLESS THERE IS EVIDENCE, DIRECT OR CIRCUMSTANTIAL, TO SHOW THAT THE AMOUNT WHICH HAS BEEN ADVANCED BY THE SUB-CREDITOR TO THE CREDIT OR, HAD ACTUALLY BEEN RECEIVED BY THE SUB-CREDITOR FROM THE ASSESSEE .' ********** 'KEEPING IN VIEW THE ABOVE POSITION OF LAW, WHEN WE TURN TO THE FACTUAL MATRIX OF THE PRESENT CASE, WE FIND THAT SO FAR AS THE APPELL ANT IS CONCERNED, HE HAS ESTABLISHED THE IDENTITY OF THE CREDITORS, NAMELY, NEMICHAND NAHATA AND SONS (HUF) AND PAWAN KUMAR AGARWALLA. THE APPELLANT HAD ALSO SHOWN, IN ACCORDANCE WITH THE BURDEN, WHICH RESTED ON HIM UND ER SECTION 106 OF THE EVIDENCE ACT, THAT THE SAID AMOUNTS HAD BEEN RECEIV ED BY HIM BY WAY OF CHEQUES FROM THE CREDITORS AFOREMENTIONED. IN FACT THE FACT THAT THE ASSESSEE HAD RECEIVED THE SAID AMOUNTS BY WAY OF CHEQUES WAS NOT IN DISPU TE. ONCE THE ASSESSEE HAD ESTABLISHED THAT HE HAD RECEIVED THE SAID AMOUNTS F ROM THE CREDITORS AFOREMENTIONED BY WAY OF CHEQUES, THE ASSESSEE MUST BE TAKEN TO HAVE PROVED THAT 11 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 11 THE CREDITOR HAD THE CREDITWORTHINESS TO ADVANCE TH E LOANS. THEREAFTER THE BURDEN HAD SHIFTED TO THE ASSESSING OFFICER TO PROVE THE C ONTRARY. ON MERE FAILURE ON THE PART OF THE CREDITORS TO SHOW THAT THEIR SUB-CREDIT ORS HAD CREDITWORTHINESS TO ADVANCE THE SAID LOAN AMOUNTS TO THE ASSESSEE, SUCH FAILURE, AS A COROLLARY, COULD NOT HAVE BEEN AND OUGHT NOT TO HAVE BEEN, UNDER THE LAW, TREATED AS THE INCOME FROM THE UNDISCLOSED SOURCES OF THE ASSESSEE HIMSEL F, WHEN THERE WAS NEITHER DIRECT NOR CIRCUMSTANTIAL EVIDENCE ON RECORD THAT T HE SAID LOAN AMOUNTS ACTUALLY BELONGED TO, OR WERE OWNED BY, THE ASSESSEE. VIEWED FROM THIS ANGLE, WE HAVE NO HESITATION IN HOLDING THAT IN THE CASE AT HAND, THE ASSESSING OFFICER HAD FAILED TO SHOW THAT THE AMOUNTS, WHICH HAD COME TO THE HANDS OF THE CREDITORS FROM THE HANDS OF THE SUB-CREDITORS, HAD ACTUALLY BEEN RECEI VED BY THE SUB-CREDITORS FROM THE ASSESSEE. IN THE ABSENCE OF ANY SUCH EVIDENCE O N RECORD, THE ASSESSING OFFICER COULD NOT HAVE TREATED THE SAID AMOUNTS AS INCOME D ERIVED BY THE APPELLANT FROM UNDISCLOSED SOURCES. THE LEARNED TRIBUNAL SERIOUSLY FELL INTO ERROR IN TREATING THE SAID AMOUNTS AS INCOME DERIVED BY THE APPELLANT FRO M. UNDISCLOSED SOURCES MERELY ON THE FAILURE OF THE SUB-CREDITORS TO PROVE THEIR CREDITWORTHINESS. 9. WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF S. K. BOTHRA & SONS, HUF V. INCOME-TAX OFFICER, WARD- 46(3), KOLKA TA REPORTED IN 347 ITR 347(CAL) WHEREIN THE COURT HELD AS FOLLOWS: 15. IT IS NOW A SETTLED LAW THAT WHILE CONSIDERING THE QUESTION WHETHER THE ALLEGED LOAN TAKEN BY THE ASSESSEE WAS A GENUINE TR ANSACTION, THE INITIAL ONUS IS ALWAYS UPON THE ASSESSEE AND IF NO EXPLANATION IS G IVEN OR THE EXPLANATION GIVEN BY THE APPELLANT IS NOT SATISFACTORY, THE ASSESSING OFFICER CAN DISBELIEVE THE ALLEGED TRANSACTION OF LOAN. BUT THE LAW IS EQUALLY SETTLED THAT IF THE INITIAL BURDEN IS DISCHARGED BY THE ASSESSEE BY PRODUCING SUFFICIE NT MATERIALS IN SUPPORT OF THE LOAN TRANSACTION, THE ONUS SHIFTS UPON THE ASSESSIN G OFFICER AND AFTER VERIFICATION, HE CAN CALL FOR FURTHER EXPLANATION FROM THE ASSESS EE AND IN THE PROCESS, THE ONUS MAY AGAIN SHIFT FROM THE ASSESSING OFFICER TO ASSES SEE. 16. IN THE CASE BEFORE US, THE APPELLANT BY PRODUCI NG THE LOAN-CONFIRMATION- CERTIFICATES SIGNED BY THE CREDITORS, DISCLOSING TH EIR PERMANENT ACCOUNT NUMBERS AND ADDRESS AND FURTHER INDICATING THAT THE LOAN WA S TAKEN BY ACCOUNT PAYEE CHEQUES, NO DOUBT, PRIMA FACIE, DISCHARGED THE INIT IAL BURDEN AND THOSE MATERIALS DISCLOSED BY THE ASSESSEE PROMPTED THE ASSESSING OF FICER TO ENQUIRE THROUGH THE INSPECTOR TO VERIFY THE STATEMENTS. 10. WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT IN YET ANOTHER CA SE OF CRYSTAL NETWORKS (P) LTD VS CIT REPORTED IN 353 ITR 171 (CA L) HAD HELD THAT WHEN THE BASIC EVIDENCES ARE ON RECORD, THE MERE FAILURE OF THE CR EDITOR TO APPEAR BEFORE THE ASSESSING 12 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 12 OFFICER CANNOT BE THE BASIS TO MAKE ADDITION. THE R ELEVANT OBSERVATIONS OF THE HONBLE COURT ARE AS UNDER:- 8. ASSAILING THE SAID JUDGMENT OF THE LEARNED TRIBU NAL LEARNED COUNSEL FOR THE APPELLANT SUBMITS THAT INCOME-TAX OFFICER DID NOT C ONSIDER THE MATERIAL EVIDENCE SHOWING THE CREDITWORTHINESS AND ALSO OTHER DOCUMEN TS, VIZ., CONFIRMATORY STATEMENTS OF THE PERSONS, OF HAVING ADVANCED CASH AMOUNT AS AGAINST THE SUPPLY OF BIDIS. THESE EVIDENCE WERE DULY CONSIDERED BY TH E COMMISSIONER OF INCOME-TAX (APPEALS). THEREFORE, THE FAILURE OF THE PERSON TO TURN UP PURSUANT TO THE SUMMONS ISSUED TO ANY WITNESS IS IMMATERIAL WHEN THE MATERI AL DOCUMENTS MADE AVAILABLE, SHOULD HAVE BEEN ACCEPTED AND INDEED IN SUBSEQUENT YEAR THE SAME EXPLANATION WAS ACCEPTED BY THE INCOME-TAX OFFICER. HE FURTHER CONTENDED THAT WHEN THE TRIBUNAL HAS RELIED ON THE ENTIRE JUDGMENT OF THE C OMMISSIONER OF INCOME-TAX (APPEALS), THEREFORE, IT WAS NOT PROPER TO TAKE UP SOME PORTION OF THE JUDGMENT OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND TO IGN ORE THE OTHER PORTION OF THE SAME. THE JUDICIAL PROPRIETY AND FAIRNESS DEMANDS T HAT THE ENTIRE JUDGMENT BOTH FAVOURABLE AND UNFAVOURABLE SHOULD HAVE BEEN CONSID ERED. BY NOT DOING SO THE TRIBUNAL COMMITTED GRAVE ERROR IN LAW IN UPSETTING THE JUDGMENT IN THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). 9. IN THIS CONNECTION HE HAS DRAWN OUR ATTENTION TO A DECISION OF THE SUPREME COURT IN THE CASE OF UDHAVDAS KEWALRAM V. CIT [1967 1 66 ITR 462. IN THIS JUDGMENT IT IS NOTICED THAT THE SUPREME COURT AS PR OPOSITION OF LAW HELD THAT THE TRIBUNAL MUST IN DECIDING AN APPEAL, CONSIDER WITH DUE CARE, ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER IN THE LIGHT OF THE EVIDENCE AND THE R ELEVANT LAW. 10. WE FIND CONSIDERABLE FORCE OF THE SUBMISSIONS O F THE LEARNED COUNSEL FOR THE APPELLANT THAT THE TRIBUNAL HAS MERELY NOTICED THAT SINCE THE SUMMONS ISSUED BEFORE ASSESSMENT RETURNED UNSERVED AND NO ONE CAME FORWARD TO PROVE. THEREFORE, IT SHALL BE ASSUMED THAT THE ASSESSEE FA ILED TO PROVE THE EXISTENCE OF THE CREDITORS OR FOR THAT MATTER THE CREDITWORTHINESS. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS TAKEN THE TROUBLE OF EXAMINING OF ALL OTHER MATERIALS AND DOC UMENTS, VIZ., CONFIRMATORY STATEMENTS, INVOICES, CHALLANS AND VOUCHERS SHOWING SUPPLY OF BIDIS AS AGAINST THE ADVANCE. THEREFORE, THE ATTENDANCE OF THE WITNESSES PURSUANT TO THE SUMMONS ISSUED, IN OUR VIEW, IS NOT IMPORTANT. THE IMPORTAN T IS TO PROVE AS TO WHETHER THE SAID CASH CREDIT WAS RECEIVED AS AGAINST THE FUTURE SALE OF THE PRODUCT OF THE ASSESSEE OR NOT. WHEN IT WAS FOUND BY THE COMMISSIO NER OF INCOME-TAX (APPEALS) ON FACTS HAVING EXAMINED THE DOCUMENTS THAT THE ADV ANCE GIVEN BY THE CREDITORS HAVE BEEN ESTABLISHED THE TRIBUNAL SHOULD NOT HAVE IGNORED THIS -FACT FINDING. INDEED THE TRIBUNAL DID NOT REALLY TOUCH THE AFORES AID FACT FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AS RIGHTLY POI NTED OUT BY THE LEARNED COUNSEL. THE SUPREME COURT HAS ALREADY STATED AS TO WHAT SHOULD BE THE DUTY OF THE LEARNED TRIBUNAL TO DECIDE IN THIS SITUATION. I N THE SAID JUDGMENT NOTED BY US AT PAGE 464, THE SUPREME COURT HAS OBSERVED AS FOLL OWS: 13 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 13 'THE INCOME-TAX APPELLATE TRIBUNAL PERFORMS A JUDIC IAL FUNCTION UNDER THE INDIAN INCOME-TAX ACT; IT IS INVESTED WITH AUTHORIT Y TO DETERMINE FINALLY ALL QUESTIONS OF FACT. THE TRIBUNAL MUST, IN DECIDING A N APPEAL, CONSIDER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FIND ING ON ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. ' 11. THE TRIBUNAL MUST, IN DECIDING AN APPEAL, CONSI DER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDING ON ALL CONTEN TIONS RAISED BY THE ASSESSEE AND THE COMMISSIONER, IN THE LIGHT OF THE EVIDENCE AND THE RELEVANT LAW. IT IS ALSO RULED IN THE SAID JUDGMENT AT PAGE 465 THAT IF THE TRIBUNAL DOES NOT DISCHARGE THE DUTY IN THE MANNER AS ABOVE THEN IT SHALL BE ASSUME D THE JUDGMENT OF THE TRIBUNAL SUFFERS FROM MANIFEST INFIRMITY. 12. TAKING INSPIRATION FROM THE SUPREME COURT OBSER VATIONS WE ARE CONSTRAINED TO HOLD IN THIS MATTER THAT THE TRIBUNAL HAS NOT AD JUDICATED UPON THE CASE OF THE ASSESSEE IN THE LIGHT OF THE EVIDENCE AS FOUND BY T HE COMMISSIONER OF INCOME-TAX (APPEALS). WE ALSO FOUND NO SINGLE WORD HAS BEEN SP ARED TO UP SET THE FACT FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT TH ERE ARE MATERIALS TO SHOW THE CASH CREDIT WAS RECEIVED FROM VARIOUS PERSONS AND S UPPLY AS AGAINST CASH CREDIT ALSO MADE. 13. HENCE, THE JUDGMENT AND ORDER OF THE TRIBUNAL I S NOT SUSTAINABLE. ACCORDINGLY, THE SAME IS SET ASIDE. WE RESTORE THE JUDGMENT AND ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). THE APPEAL IS ALLOWED. 11. IT IS NOT IN DISPUTE THAT ALL THE SHARE APPLICA NT COMPANIES IN THE INSTANT CASE BEFORE US ARE ASSESSED TO INCOME TAX. WE FIND THAT THE ASSESS EE HAD DULY PROVED THE SOURCE OF SOURCE OF SOURCE IN THE INSTANT CASE. EVEN IF THE CREDITWORTHINESS OF THE SHARE APPLICANTS ARE TO BE DOUBTED , THEN IT WOULD BE THE DUTY OF TH E LD AO OF THE ASSESSEE TO MAKE ENQUIRIES THROUGH THE LD AO OF THE CONCERNED SHARE APPLICANTS. ONCE THE RELEVANT DETAILS ARE FILED BY THE ASSESSEE BEFORE THE LD AO TO PROVE THE CREDITWORTHINESS OF SHARE APPLICANTS, THEN THE SAME CANNOT BE QUESTIONED / DI SPUTED BY THE LD AO OF THE ASSESSEE AS THE SAME WOULD BE TRAVELLING BEYOND HIS JURISDIC TION. IN OTHER WORDS, THE CREDITWORTHINESS OF THE SHARE APPLICANT COMPANIES W OULD HAVE TO BE EXAMINED BY THE ASSESSING OFFICER OF THOSE COMPANIES AND NOT BY THE ASSESSING OFFICER OF THE ASSESSEE HEREIN. HOWEVER, IT WOULD BE INCUMBENT ON THE PART OF THE LD AO OF THE ASSESSEE HEREIN 14 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 14 , TO TRIGGER THE SAID VERIFICATION PROCESS ON THE S IDE OF THE DEPARTMENT. IT WOULD BE INTERESTING TO NOTE IN THIS REGARD THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT KOLKATA III VS M/S DATAWARE PRIVATE LIMITED IN ITAT NO. 263 OF 2011 DATED 21.9.2011 HAD HELD AS UNDER:- IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSI NG OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME T AX ASSESSEE. AFTER GETTING THE PAN NUMBER AND GETTING THE INFORMATION THAT THE CRE DITOR IS ASSESSED UNDER THE ACT, THE ASSESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINENESS' OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER OF THE C REDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSESSING OFFICER HIMSELF COULD NO T ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE . SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMI TTED BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OF FICER OF THE ASSESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND THE GENUINENESS' OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEE N ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX (A PPEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH AR E REQUIRED TO BE FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIND NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECO RDED BY BOTH THE AUTHORITIES. 12. WE FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS ROSEBERRY MERCANTILE (P) LTD IN ITAT NO. 241 OF 2010 DATED 10 .1.2011 , WHILE RELYING ON THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS REPORTED IN 216 CTR 295 (SC) , HAD HELD :- 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TRANSACTION ENTERED INT O BY THE ASSESSEE WAS A SCHEME FOR LAUNDERING BLACK MONEY INTO WHITE MONEY OR ACCO UNTED MONEY AND THE LD. CIT (A) OUGHT TO HAVE HELD THAT THE ASSESSEE HAD NOT ES TABLISHED THE GENUINENESS OF THE TRANSACTION. ' IT APPEARS FROM THE RECORD THAT IN THE ASSESSMENT P ROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDER ATION HAD BROUGHT RS. 4, 00, 000/- AND RS.20,00,000/- TOWARDS SHARE CAPITAL AND SHARE PREMIUM RESPECTIVELY AMOUNTING TO RS.24,00, 000/- FROM FOUR SHAREHOLDERS BEING PRIVATE LIMITED COMPANIES. THE ASSESSING OFFICER ON HIS PART CALLED FOR THE DETAILS FROM THE 15 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 15 ASSESSEE AND ALSO FROM THE SHARE APPLICANTS AND ANA LYZED THE FACTS AND ULTIMATELY OBSERVED CERTAIN ABNORMAL FEATURES, WHICH WERE MENT IONED IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER, THEREFORE, CONCLUDED THAT NATURE AND SOURCE OF SUCH MONEY WAS QUESTIONABLE AND EVIDENCE PRODUCED WAS UN SATISFACTORY. CONSEQUENTLY, THE ASSESSING OFFICER INVOKED THE PROVISIONS UNDER SECTION 68/69 OF THE INCOME TAX ACT AND MADE ADDITION OF RS.24,00,000/-. ON APPEAL THE LEARNED CIT (A) BY FOLLOWING THE DECI SION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD ., REPORTED IN (2008) 216 CTR 195 ALLOWED THE APPEAL BY HOLDING -THAT SHARE CAPITAL/P REMIUM OF RS. 24,00,000/- RECEIVED FROM THE INVESTORS WAS NOT LIABLE TO BE TR EATED UNDER SECTION 68 AS UNEXPLAINED CREDITS AND IT SHOULD NOT BE TAXED IN T HE HANDS OF THE APPELLANT COMPANY. AS INDICATED EARLIER, THE TRIBUNAL BELOW DISMISSED THE APPEAL FILED BY THE REVENUE. AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CASE OF CL. T. VS. M/S. LOVELY EXPORTS PVT. LTD. [SUPRA], WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPREME COURT DECISIO N IN FAVOUR OF THE ASSESSEE AND THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEAL IS DEVOID OF ANY SUBSTANCE AND IS DISMISSED. 13. WE ALSO FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS LEONARD COMMERCIAL (P) LTD IN ITAT NO. 114 OF 2011 DATED 13.6.2011 HAD HELD AS UNDER:- THE ONLY QUESTION RAISED IN THIS APPEAL IS WHETHER THE COMMISSIONER OF INCOME- TAX (APPEALS) AND THE TRIBUNAL BELOW ERRED IN LAW I N DELETING THE ADDITION OF RS.8,52,000/-, RS. 91,50,000/- AND RS. 13,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHARE CAPITAL, SHARE APPLICATION MONE Y AND INVESTMENT IN HTCCL RESPECTIVELY. AFTER HEARING MD. NIZAMUDDIN, LEARNED ADVOCATE APPE ARING ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE MATERIALS ON RECORD, WE FIND THAT ALL SUCH APPLICATION MONEY WERE RECEIVED BY THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES AND THE ASSESSEE ALSO DISCLOSED THE COMPLET E LIST OF SHAREHOLDERS WITH THEIR COMPLETE ADDRESSES AND GIR NUMBERS FOR THE RE LEVANT ASSESSMENT YEARS IN WHICH SHARE APPLICATION WAS CONTRIBUTED. IT FURTHER APPEARS THAT ALL THE PAYMENTS WERE MADE BY THE APPLICANTS BY ACCOUNT PAYEE CHEQUE S. IT APPEARS FROM THE ASSESSING OFFICERS ORDER THAT H IS GRIEVANCE WAS THAT THE ASSESSEE WAS NOT WILLING TO PRODUCE THE PARTIES WHO HAD ALLEGEDLY ADVANCED THE FUND. 16 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 16 IN OUR OPINION, BOTH THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL BELOW WERE JUSTIFIED IN HOLDING THAT AFTER DISCLOSU RE OF THE FULL PARTICULARS INDICATED ABOVE, THE INITIAL ONUS OF THE ASSESSEE W AS SHIFTED AND IT WAS THE DUTY OF THE ASSESSING OFFICER TO ENQUIRE WHETHER THOSE PART ICULARS WERE CORRECT OR NOT AND IF THE ASSESSING OFFICER WAS OF THE VIEW THAT T HE PARTICULARS SUPPLIED WERE INSUFFICIENT TO DETECT THE REAL SHARE APPLICANTS, T O ASK FOR FURTHER PARTICULARS. THE ASSESSING OFFICER HAS NOT ADOPTED EITHER OF THE AFORESAID COURSES BUT HAS SIMPLY BLAMED THE ASSESSEE FOR NOT PRODUCING THOSE SHARE APPLICANTS. IN OUR VIEW, IN THE CASE BEFORE US SO LONG THE ASSE SSING OFFICER WAS UNABLE TO ARRIVE AT A FINDING THAT THE PARTICULARS GIVEN BY T HE ASSESSEE WERE FALSE, THERE WAS NO SCOPE OF ADDING THOSE MONEY UNDER SECTION 68 OF THE INCOME- TAX ACT AND THE TRIBUNAL BELOW RIGHTLY HELD THAT THE ONUS WAS VALID LY DISCHARGED. WE, THUS, FIND THAT BOTH THE AUTHORITIES BELOW, ON CONSIDERATION OF THE MATERIALS ON RECORD, RIGHTLY APPLIED THE CORRECT LAW WHICH AR E REQUIRED TO BE APPLIED IN THE FACTS OF THE PRESENT CASE AND, THUS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT BASED ON MATERIALS ON R ECORD. THE APPEAL IS, THUS, DEVOID OF ANY SUBSTANCE AND IS DISMISSED SUMMARILY AS IT DOES NOT INVOLVE ANY SUBSTANTIAL QUESTION OF LAW. 14. WE ALSO FIND THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF VSP STEEL P LTD (FORMERLY M/S TIKMANI METAL P LTD) IN ITA NO. 7 41/KOL/2014 FOR ASST YEAR 2010-11 HAD HELD AS UNDER:- WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE LD DR ARGUED THAT THE ASSESSEE HAD NOT PROVED THE SOURCE OF SOURCE OF SHARE APPLIC ANTS WHO HAD INVESTED SHARE APPLICATION MONIES IN THE ASSESSEE COMPANY AND ACCO RDINGLY PRAYED THAT THE ADDITION HAS BEEN RIGHTLY MADE U/S 68 OF THE ACT. HE ALSO PLACED RELIANCE ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF SUBHLAKSHMI VANIJYA (P) LTD VS CIT REPORTED IN (2015) 60 TAXMANN.COM 60 (KOLKATA TRIB.) DATED 30.7.2015. IN RESPONSE TO THIS, THE LD AR ARGUED THAT THERE IS NO MANDATE IN LAW THAT THE ASS ESSEE HAS TO PROVE THE SOURCE OF SOURCE OF SHARE APPLICANTS. HE ARGUED THAT IN THE INSTANT CASE, THE ASSESSEE HAD DULY DISCHARGED ITS COMPLETE ONUS BY FURNISHING THE REQUISITE DETAI LS. IN CASE IF THE LD AO HAS GOT SOME DOUBTS, HE SHOULD HAVE VERIFIED THE SAME FROM THE A O OF THOSE SHARE APPLICANTS. WE FIND FROM THE PLAIN READING OF SECTION 68 OF THE ACT, T HE DUTY CAST ON THE ASSESSEE IS TO EXPLAIN THE NATURE AND SOURCE OF CREDIT FOUND IN HIS BOOKS. IN THE INSTANT CASE, THE CREDIT IS IN THE FORM OF RECEIPT OF SHARE APPLICATION MONEY FROM FIV E SHARE APPLICANTS. THE NATURE OF RECEIPT TOWARDS SHARE APPLICATION MONEY IS WELL EST ABLISHED FROM THE ENTRIES PASSED IN THE RESPECTIVE BALANCE SHEETS OF THE COMPANIES AS INVESTMENTS. HENCE THE NATURE OF RECEIPT IS PROVED BY THE ASSESSEE BEYOND DOUBT. IN RESPECT OF SOURCE OF CREDIT, THE ASSESSEE HAS TO PROVE THE THREE NECESSARY INGREDIEN TS I.E IDENTITY OF SHARE APPLICANTS, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF SHARE APPLICANTS. IN THE INSTANT 17 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 17 CASE, WE FIND THAT THE IDENTITY OF SHARE APPLICANTS IS PROVED BEYOND DOUBT BY THE ASSESSEE BY FURNISHING THE NAME, ADDRESS, PAN OF SHARE APPLI CANTS TOGETHER WITH THE COPIES OF BALANCE SHEETS AND INCOME TAX RETURNS . WITH REGA RD TO THE CREDITWORTHINESS OF SHARE APPLICANTS, THE LD AO HIMSELF STATES THAT THE FIVE SHARE APPLICANTS HAD INVESTED IN ASSESSEE COMPANYS SHARES BY TAKING MONEY FROM SOME OTHER CO MPANIES. HENCE THE SOURCE OF THE SHARE APPLICANTS FOR MAKING INVESTMENT IN SHARE APPLICATION MONIES OF ASSESSEE COMPANY IS ALSO PROVED. BY THIS, THE CREDITWORTHI NESS OF THE SHARE APPLICANTS IS ALSO PROVED BEYOND DOUBT. THIRD INGREDIENT IS GENUINENE SS OF THE TRANSACTIONS. WE FIND THAT THE FIVE SHARE APPLICANTS HAD PAID THE MONIES TO TH E ASSESSEE COMPANY BY ACCOUNT PAYEE CHEQUES OUT OF SUFFICIENT BANK BALANCES AVAILABLE I N THEIR BANK ACCOUNTS, WHICH ARE QUITE EVIDENT FROM THE BANK STATEMENTS ENCLOSED IN THE PA PER BOOK. WE AGREE WITH THE ARGUMENTS OF THE LD AR THAT THE SOURCE OF SOURCE OF SHARE APPLICANTS NEED NOT BE PROVED BY THE ASSESSEE HEREIN. WE HOLD THAT THE DECISION RENDERED BY THIS TRIBUNAL IN SUBHALAKSHMI VANIJYA RELIED UPON BY THE LD DR WAS R ENDERED IN THE CONTEXT OF VALIDITY OF REVISION PROCEEDINGS U/S 263 OF THE ACT AND NOT ON THE MERITS OF THE CASE. THIS TRIBUNAL IN THAT CASE DECIDED THE VALIDITY OF INVOKING REVISION ARY JURISDICTION U/S 263 OF THE ACT BY THE LD CIT AND WHETHER ADEQUATE ENQUIRIES WERE MADE BY THE LD AO IN THE FACTS AND CIRCUMSTANCES OF THAT CASE. THIS TRIBUNAL IN SUBHA LAKSHMI VANIJYA CASE SUPRA NEVER HAD AN OCCASION TO LOOK INTO THE MERITS OF THE ADDITION PROPOSED TO BE MADE TOWARDS SHARE CAPITAL IN THE FACTS AND CIRCUMSTANCES OF THAT CASE AND NO DECISION WAS RENDERED THEREON ON MERITS OF THE ISSUE. HENCE THE RELIANCE PLACED T HEREON BY THE LD DR DOES NOT ADVANCE THE CASE OF THE REVENUE. IN THE INSTANT CASE, WE F IND THAT THE SHARE APPLICANTS HAVE NOT DENIED THE FACT OF MAKING INVESTMENT IN SHARE APPLI CATION MONIES IN ASSESSEE COMPANY, WHICH IS EVIDENT FROM THE FACT THAT THEY HAD CONFIR MED IN WRITING IN RESPONSE TO NOTICE ISSUED U/S 133(6) OF THE ACT WHICH WAS ADMITTEDLY D ONE BEHIND THE BACK OF THE ASSESSEE. THERE IS NO WHISPER IN THE ENTIRE ASSESSMENT ORDER TO DOUBT THE VERACITY OF THE TRANSACTIONS AND GENUINENESS OF SHARE APPLICANTS AN D THE TRANSACTIONS HEREIN. IN THE INSTANT CASE, THE ASSESSEE HAD INDEED PROVED THE ID ENTITY OF THE SHARE APPLICANTS, CREDITWORTHINESS OF SHARE APPLICANTS AND GENUINENES S OF TRANSACTIONS BEYOND DOUBT. WE FIND THAT THE ENTIRE ADDITION HAS BEEN MADE BY THE LD AO BASED UPON SUSPICION, SURMISES AND CONJECTURES AND NOT UPON PROPER EVALUATION AND APPRAISAL OF THE EVIDENCES AND DOCUMENTS FILED BEFORE HIM. WE PLACE RELIANCE ON T HE DECISION OF THE HONBLE APEX COURT IN THIS REGARD IN THE CASE OF DHAKESHWARI COT TON MILLS LTD VS CIT REPORTED IN 26 ITR 775 (SC) WHEREIN IT HAS BEEN HELD THAT NO ADDITION CAN BE M ADE WITHOUT MATERIAL AND ON MERE SUSPICION. IN THESE FACTS AND CIRCUMSTANCES, THERE IS NO NEE D TO TREAT THE RECEIPT OF SHARE APPLICATION MONEY FROM FIVE SHARE APPLICANTS AS UNE XPLAINED U/S 68 OF THE ACT. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CI TA IN THIS REGARD. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 18 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 18 15. WE FIND THAT THE CO-ORDINATE BENCH OF THIS TRIB UNAL RECENTLY IN THE CASE OF ITO VS WIZ-TECH SOLUTIONS PVT LTD IN ITA NO. 1162/KOL/2015 DATED 14.6.2018 HAD HELD AS UNDER:- 28. FROM THE DETAILS AS AFORESAID WHICH EMERGES FRO M THE PAPER BOOK FILED BEFORE US AS WELL AS BEFORE THE LOWER AUTHORITIES, IT IS VIVI D THAT ALL THE SHARE APPLICANTS ARE (I) INCOME TAX ASSESSEES, (II) THEY ARE FILING THEIR R ETURN OF INCOME, (III) THE SHARE APPLICATION FORM AND ALLOTMENT LETTER IS AVAILABLE ON RECORD, (IV) THE SHARE APPLICATION MONEY WAS MADE BY ACCOUNT PAYEE CHEQUES, (V) THE DE TAILS OF THE BANK ACCOUNTS BELONGING TO THE SHARE APPLICANTS AND THEIR BANK ST ATEMENTS, (VI) IN NONE OF THE TRANSACTIONS THE AO FOUND DEPOSIT IN CASH BEFORE IS SUING CHEQUES TO THE ASSESSEE COMPANY, (VII) THE APPLICANTS ARE HAVING SUBSTANTIA L CREDITWORTHINESS WHICH IS REPRESENTED BY A CAPITAL AND RESERVE AS NOTED ABOVE . 29. AS NOTED FROM THE JUDICIAL PRECEDENTS CITED ABO VE, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE THEN THERE IS A DUTY CASTED UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CREDIT FOUND IN HI S BOOKS. IN THE INSTANT CASE, THE CREDIT IS IN THE FORM OF RECEIPT OF SHARE CAPITAL WITH PRE MIUM FROM SHARE APPLICANTS. THE NATURE OF RECEIPT TOWARDS SHARE CAPITAL IS SEEN FRO M THE ENTRIES PASSED IN THE RESPECTIVE BALANCE SHEETS OF THE COMPANIES AS SHARE CAPITAL AN D INVESTMENTS. IN RESPECT OF SOURCE OF CREDIT, THE ASSESSEE HAS TO PROVE THE THREE NECE SSARY INGREDIENTS I.E. IDENTITY OF SHARE APPLICANTS, GENUINENESS OF TRANSACTIONS AND CREDITW ORTHINESS OF SHARE APPLICANTS. FOR PROVING THE IDENTITY OF SHARE APPLICANTS, THE ASSES SEE FURNISHED THE NAME, ADDRESS, PAN OF SHARE APPLICANTS TOGETHER WITH THE COPIES OF BAL ANCE SHEETS AND INCOME TAX RETURNS. WITH REGARD TO THE CREDITWORTHINESS OF SHARE APPLIC ANTS, AS WE NOTED SUPRA, THESE COMPANIES ARE HAVING CAPITAL IN SEVERAL CRORES OF R UPEES AND THE INVESTMENT MADE IN THE APPELLANT COMPANY IS ONLY A SMALL PART OF THEIR CAPITAL. THESE TRANSACTIONS ARE ALSO DULY REFLECTED IN THE BALANCE SHEETS OF THE SHARE A PPLICANTS, SO CREDITWORTHINESS IS PROVED. EVEN IF THERE WAS ANY DOUBT IF ANY REGARDIN G THE CREDITWORTHINESS OF THE SHARE APPLICANTS WAS STILL SUBSISTING, THEN AO SHOULD HAV E MADE ENQUIRIES FROM THE AO OF THE SHARE SUBSCRIBERS AS HELD BY HONBLE JURISDICTIONAL HIGH COURT IN CIT VS DATAWARE (SUPRA) WHICH HAS NOT BEEN DONE, SO NO ADVERSE VIEW COULD HAVE BEEN DRAWN. THIRD INGREDIENT IS GENUINENESS OF THE TRANSACTIONS, FOR WHICH WE NOTE THAT THE MONIES HAVE BEEN DIRECTLY PAID TO THE ASSESSEE COMPANY BY ACCOU NT PAYEE CHEQUES OUT OF SUFFICIENT BANK BALANCES AVAILABLE IN THEIR BANK ACCOUNTS ON B EHALF OF THE SHARE APPLICANTS. IT WILL BE EVIDENT FROM THE PAPER BOOK THAT THE APPELLANT H AS EVEN DEMONSTRATED THE SOURCE OF MONEY DEPOSITED INTO THEIR BANK ACCOUNTS WHICH IN T URN HAS BEEN USED BY THEM TO SUBSCRIBE TO THE ASSESSEE COMPANY AS SHARE APPLICAT ION. HENCE THE SOURCE OF SOURCE OF SOURCE IS PROVED BY THE ASSESSEE IN THE INSTANT CAS E THOUGH THE SAME IS NOT REQUIRED TO BE DONE BY THE ASSESSEE AS PER LAW AS IT STOOD/ APP LICABLE IN THIS ASSESSMENT YEAR. THE SHARE APPLICANTS HAVE CONFIRMED THE SHARE APPLICATI ON IN RESPONSE TO THE NOTICE U/S 133(6) OF THE ACT AND HAVE ALSO CONFIRMED THE PAYME NTS WHICH ARE DULY CORROBORATED WITH THEIR RESPECTIVE BANK STATEMENTS AND ALL THE P AYMENTS ARE BY ACCOUNT PAYEE CHEQUES. 19 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 19 30. ***** 31. ***** 32. WE WOULD LIKE TO REPRODUCE THE HON'BLE HIGH CO URT ORDER IN CIT VS. GANGESHWARI METAL P.LTD. IN ITA NO. 597/2012 JUDGEM ENT DATED 21.1.2013, THE HON'BLE HIGH COURT AFTER CONSIDERING THE DECISIONS IN THE C ASE OF NOVA PROMOTERS AND FINLEASE PVT. LTD. 342 ITR 169 AND JUDGEMENT IN THE CASE OF CIT VS. LOVELY EXPORTS 319 ITR (ST) 5(SC) HELD AS FOLLOWS:- AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES O F CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSING OFFICER CARRIES OUT THE EXERCISE WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER 'S ITS BACK WITH FOLDED HANDS' TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRES UMPTIONS. THE PRESENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OF FICER AFTER NOTING THE FACTS, MERELY REJECTED THE SAME. THIS WOULD BE APPARENT FR OM THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER TO THE FO LLOWING EFFECT:- ''INVESTIGATION MADE BY THE INVESTIGATION WING OF T HE DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRANSACTION OF ACCOMMODATION ENTRY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF RS.1,11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS RECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WA S STATED THAT THE ACTUAL AMOUNT RECEIVED WAS RS.55,50,000/- AND NOT RS.1,11, 50,000/- AS MENTIONED IN THE NOTICE. THE ASSESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTION OF THE ASSESSEE IN RESP ECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT RS.55,50,000/-. THE ASSESSEE HAS FURTHER TRIES TO E XPLAIN THE SOURCE OF THIS AMOUNT OF RS.55,50,000/- BY FURNISHING COPIES OF SHARE APPLICATION MONEY, BALANCE4 SHEET ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT THE QUESTION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANATION OF THE ASSESSEE HAS BEEN DULY CONS IDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REMAINS UNEXPLAINED IN THE H ANDS OF THE ASSESSEE AS HAS BEEN ARRIVED BY THE INVESTIGATION WING OF TH E DEPARTMENT. AS SUCH ENTRIES OF RS.5~50/000/- RECEIVED BY THE ASSESSEE A RE TREATED AS AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSE E AND ADDED TO ITS INCOME. SINCE I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME/ PENALTY PROCEEDINGS UNDE R SECTION 271(1)(C) ARE BEING INITIATED SEPARATELY. THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. ( SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVOUR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CLEARLY DISTINGUISHAB LE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) L TD. (SUPRA). THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER ONCE T HE ASSESSEE HAD FURNISHED ALL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. I N SUCH AN EVENTUALITY NO ADDITION CAN 20 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 20 BE MADE UNDER SECTION 68 OF THE INCOME TAX ACT 1961 . CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBU NAL IS CORRECT IN LAW 33. THE CASE ON HAND CLEARLY FALLS IN THE CATEGORY WHERE THERE IS LACK OF ENQUIRY ON THE PART OF THE A. O. AS IN THE CASE OF GANJESHWARI METALS (SUPRA). B) IN THE CASE OF FINLEASE PVT LTD. 342 ITR 169 (SU PRA) IN ITA 232/2012 JUDGEMENT DT. 22.11.2012 AT PARA 6 TO 8/ IT WAS HELD AS FOLLOWS. '6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE THE DISCUSSION BY THE COMMISSIONER OF INCOME TAX (APPEA LS) WOULD REVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED CO PIES ISSUED BY THE ROC IN RELATION TO THE SHARE APPLICATION AFFIDAVITS OF THE DIRECTORS, FORM 2 FILED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APPLICA NT FOR COMPANY'S SHARES, CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE AS SESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF THE INVESTIGATION REPORT AND THE STATEMENT OF MR. MAHES H GARG. TO ELEVATE THE INFERENCE WHICH CAN BE DRAWN ON THE BASIS OF READIN G OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPER, MORE SO WHE N THE ASSESSEE PRODUCED MATERIAL. THE LEAST THAT THE ASSESSING OFFICER OUGH T TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NECESSARY, INVOKING HIS POWE RS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIRECTORS. NO EFF ORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIA L DISCLOSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSING OFFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAIN FACTS AND T HE STATEMENTS OF MR.MAHESH GARG THAT THE INCOME SOUGHT TO BE ADDED FELL WITHIN THE DESCRIPTION OFS.68 OF THE INCOME TAX ACT 1961. HAVING REGARD TO THE ENTIRETY OF FACTS AND CIRCUMSTANCES, THE COURT IS SATISFIED THAT THE FINDING OF THE TRIB UNAL IN THIS CASE ACCORDS WITH THE RATIO OF THE DECISION OF THE SUPREME COURT IN LOVEL Y EXPORTS (SUPRA). THE DECISION IN THIS CASE IS BASED ON THE PECULIAR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENCE IN SUPPORT OF THE SHARE APPLICATION MONIES, IT IS OPEN TO THE ASSESSI NG OFFICER TO EXAMINE IT AND REJECT IT ON TENABLE GROUNDS. IN CASE HE WISHES TO RELY ON THE REPORT OF THE INVESTIGATION AUTHORITIES, SOME MEANINGFUL ENQUIRY OUGHT TO BE CONDUCTED BY HIM TO ESTABLISH A LINK BETWEEN THE ASSESSEE AND THE AL LEGED HAWALA OPERATORS, SUCH A LINK WAS SHOWN TO BE PRESENT IN THE CASE OF NOVA PR OMOTERS & FINLEASE (P) LTD. (SUPRA) RELIED UPON BY THE REVENUE. WE ARE THEREFOR E NOT TO BE UNDERSTOOD TO CONVEY THAT IN ALL CASES OF SHARE CAPITAL ADDED UND ER SECTION THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTRACTED, IRRESPECTIVE OF THE F ACTS, EVIDENCE AND MATERIAL. ' 34. IN THIS CASE ON HAND, THE ASSESSEE HAD DISCHAR GED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE APPLI CANTS, THEREAFTER THE ONUS SHIFTED TO AO TO DISPROVE THE DOCUMENTS FURNISHED BY ASSESSEE CANNOT BE BRUSHED ASIDE BY THE AO TO DRAW ADVERSE VIEW CANNOT BE COUNTENANCED. IN THE ABSENCE OF ANY INVESTIGATION, MUCH LESS GATHERING OF EVIDENCE BY THE ASSESSING OF FICER, WE HOLD THAT AN ADDITION CANNOT BE SUSTAINED MERELY BASED ON INFERENCES DRAW N BY CIRCUMSTANCE. APPLYING THE 21 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 21 PROPOSITIONS LAID DOWN IN THESE CASE LAWS TO THE FA CTS OF THIS CASE, WE ARE INCLINED TO UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 35. TO SUM UP SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPL AIN THE NATURE AND SOURCE SHALL BE ASSESSED AS ITS UNDISCLOSED INCOME. IN THE FACTS OF THE PRESENT CASE, BOTH THE NATURE & SOURCE OF THE SHARE APPLICATION RECEIVED WAS FULLY EXPLAINED BY THE ASSESSEE. THE ASSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENT ITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE APPLICANTS. THE PAN DETAIL S, BANK ACCOUNT STATEMENTS, AUDITED FINANCIAL STATEMENTS AND INCOME TAX ACKNOWLEDGMENTS WERE PLACED ON AO'S RECORD. ACCORDINGLY ALL THE THREE CONDITIONS AS REQUIRED U/ S. 68 OF THE ACT I.E. THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WAS PLACED BEFORE THE AO AND THE ONUS SHIFTED TO AO TO DISPROVE THE MATERIALS PLACED BEFORE HIM. WITHOUT DOING SO, THE ADDITION MADE BY THE AO IS BASED ON CONJECTURES AND SURMISES CANNOT BE JUSTIFIED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSE D ABOVE, NO ADDITION WAS WARRANTED UNDER SECTION 68 OF THE ACT. THEREFORE, WE DO NOT W ANT TO INTERFERE IN THE IMPUGNED ORDER OF LD. CIT(A) WHICH IS CONFIRMED AND CONSEQUE NTLY THE APPEAL OF REVENUE IS DISMISSED. 16. WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF M/S EARTHMETAL ELECTRICALS P LTD VS CIT & ANR. REPORTED IN 2010 (7) TMI 1137 IN CIVIL APPEAL NO. 21073 / 2009 DATED 30.7.2010 ARISING FROM THE ORDER OF HONBLE BOMBAY HIGH COURT HAD HELD AS UNDER:- ORDER DELAY CONDONED. LEAVE GRANTED. HEARD LEARNED COUNSEL ON BOTH SIDES. WE HAVE EXAMINED THE POSITION. WE FIND THAT THE SHA REHOLDERS ARE GENUINE PARTIES. THEY ARE NOT BOGUS AND FICTITIOUS. THEREFORE, THE IMPUGN ED ORDER IS SET ASIDE. THE APPEAL IS ALLOWED ACCORDINGLY. NO ORDER AS TO COSTS. 17. IN THE INSTANT CASE BEFORE US, THE SHARE SUBSCR IBING COMPANIES ARE DULY ASSESSED TO INCOME TAX. IT IS NOT IN DISPUTE THAT THE SHARE S UBSCRIBING COMPANIES ARE IN EXISTENCE. IT 22 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 22 IS NOT IN DISPUTE THAT THE SHARE SUBSCRIBING COMPAN IES ARE DULY ASSESSED TO INCOME TAX AND THEIR INCOME TAX PARTICULARS TOGETHER WITH THE COPIES OF RESPECTIVE INCOME TAX RETURNS WITH THEIR BALANCE SHEETS ARE ALREADY ON RE CORD . HENCE IT COULD BE SAFELY CONCLUDED THAT THEY ARE GENUINE SHAREHOLDERS AND NO T BOGUS AND FICTITIOUS. ACCORDINGLY, THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN TH E CASE OF M/S EARTHMETAL ELECTRICALS P LTD SUPRA WOULD BE SQUARELY APPLICABLE TO THE FAC TS OF THE INSTANT CASE. 18. WE WOULD LIKE TO ADD THAT RECEIPT OF SHARE CAPI TAL FOR A COMPANY IS NOT A PROHIBITED TRANSACTION, AS THAT IS ONE OF THE MAIN SOURCE OF R AISING FUNDS FOR A COMPANY TO RUN ITS INTENDED ACTIVITIES. THE LD CITA HAD CATEGORICAL LY GIVEN A FINDING THAT THE LD AO DID NOT BRING ON RECORD SUFFICIENT TANGIBLE AND COGENT MATERIAL TO SUPPORT HIS CONCLUSION THAT THE AMOUNT CREDITED IN THE ASSESSEES BOOKS IN THE FORM OF SHARE CAPITAL AND SHARE PREMIUM ACTUALLY REPRESENTED ASSESSEES UNDISCLOSED INCOME. THIS FACTUAL FINDING REMAIN UNCONTROVERTED BY THE REVENUE BEFORE US. ON CE THE REPLIES TO NOTICES ISSUED U/S 133(6) OF THE ACT WERE RECEIVED FROM THE SHARE SUBS CRIBING COMPANIES WHEREIN THEY HAD DULY CONFIRMED THE TRANSACTIONS WITH THE ASSESSEE C OMPANY WHICH WAS FURTHER SUPPLEMENTED BY RESPONDING TO SUMMONS U/S 131 OF TH E ACT BY THE DIRECTORS OF THE SHARE APPLICANT COMPANIES BY GIVING DEPOSITIONS TO THAT E FFECT BEFORE THE LD AO, THERE IS NO SCOPE FOR THE LD AO TO DISBELIEVE THE TRANSACTIONS FROM THE ANGLE OF THE RECIPIENT ASSESSEE. 19. WE FIND THAT THE RELIANCE PLACED BY THE LD DR O N THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF RAJMANDIR ESTATES SUPRA W AS DISTINGUISHABLE ON FACTS AS THE SAID DECISION WAS RENDERED IN THE CONTEXT OF VALIDI TY OF REVISIONARY JURISDICTION U/S 263 OF THE ACT BY THE LEARNED ADMINISTRATIVE COMMISSIO NER. THIS FACT HAS ALREADY BEEN ADDRESSED BY THIS TRIBUNAL IN THE CASE OF VSP STEEL P LTD SUPRA. NO DECISION WHATSOEVER WAS RENDERED BY THE HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF RAJ 23 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 23 MANDIR ESTATES P LTD ON MERITS OF THE ADDITION AND HENCE DOES NOT COME TO THE RESCUE OF THE REVENUE IN THE FACTS OF THE INSTANT CASE. 20. WE ALSO FIND THAT THE HONBLE APEX COURT RECENTLY IN THE CASE OF PRINCIPA L CIT VS VAISHNODEVI REFOILS & SOLVEX REPORTED IN (2018) 96 TAXMANN.COM 469 (SC) WHEREIN THE SLP OF THE REVENUE HAS BEEN DISMISSED BY THE HONBL E APEX COURT. THE BRIEF FACTS WERE THAT THE ADDITION U/S 68 OF THE ACT WAS MADE B Y THE ASSESSING OFFICER IN RESPECT OF CAPITAL CONTRIBUTED BY THE PARTNER OF THE FIRM. THE HONBLE HIGH COURT NOTED THAT WHEN THE CONCERNED PARTNER HAD CONFIRMED BEFORE THE ASSE SSING OFFICER ABOUT HIS FACT OF MAKING CAPITAL CONTRIBUTION IN THE FIRM AND THAT TH E SAID INVESTMENT IS ALSO REFLECTED IN HIS INDIVIDUAL BOOKS OF ACCOUNTS, THEN NO ADDITION COULD BE MADE U/S 68 OF THE ACT. THE DECISION OF HONBLE GUJARAT HIGH COURT IS REPORTED IN (2018) 89 TAXMANN.COM 80 (GUJ HC) . THE SLP OF THE REVENUE AGAINST THIS JUDGEMENT W AS DISMISSED BY THE HONBLE SUPREME COURT. 21. TO SUM UP, SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPLAIN T HE NATURE AND SOURCE SHALL BE ASSESSED AS ITS INCOME OF THE PREVIOUS YEAR IN WHICH THE SAM E WAS RECEIVED. IN THE FACTS OF THE PRESENT CASE, BOTH THE NATURE & SOURCE OF THE SHARE CAPITAL RECEIVED WITH PREMIUM WERE FULLY EXPLAINED BY THE ASSESSEE. THE ASSESSEE HAD D ISCHARGED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE S HARE APPLICANTS. THE PAN DETAILS, BANK ACCOUNT STATEMENTS, AUDITED FINANCIAL STATEMEN TS AND INCOME TAX ACKNOWLEDGMENTS WERE PLACED BEFORE THE LD AO. ACCOR DINGLY, ALL THE THREE CONDITIONS AS REQUIRED U/S. 68 OF THE ACT I.E. THE IDENTITY, C REDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WERE PLACED BEFORE THE LD AO AND THE O NUS SHIFTED TO THE LD AO TO DISPROVE THE MATERIALS PLACED BEFORE HIM. WITHOUT DOING SO, THE ADDITION MADE BY THE LD AO IS BASED ON CONJECTURES AND SURMISES CANNOT BE JUSTIFI ED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE, NO ADDITION WAS WARRAN TED UNDER SECTION 68 OF THE ACT. 24 ITA NO.695/KOL/2017 M/S SHLOK FASHIONS PVT. LTD. A.YR. 2012-13 24 THEREFORE, WE DO NOT WANT TO INTERFERE IN THE IMPUG NED ORDER OF LD. CIT(A) WHICH IS CONFIRMED AND CONSEQUENTLY THE GROUNDS RAISED BY T HE REVENUE ARE DISMISSED. 22. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 07.12.2 018 SD/- SD/- [A T VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 07.12.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-10(2), KOLKATA, P-7, CHOWIRNGHEE SQUAR E, KOLKATA-700069. 2. M/S SHLOK FASIONS PVT. LTD., 50-C, HARISH MUKHER JEE ROAD, OPP. FREE INDIA GARAGE, BHAWANIPUR, KOLKATA-700025. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES