ITO 6 (1)(2), MUMBAI V. M/S ANIATA DYES & INTERMEDIATES PVT LTD, MUMBAI

ITA 6976/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7764 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 13-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRIJENDRA KUMAR
• Assessee Lawyers: DR P DANIEL
• Keywords: Unexplained cash credit; Share purchase agreement; Principle of natural justice; Retrospective amendment; Corroborative evidences; Set aside
• Section: 133(6); 208; 13; 22; 131; 68; 148

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI PAVANKUMAR GADALE ( JM) I.T.A. NO. 6976/MUM/2019 (ASSESSMENT YEAR 2008-09) ITO-6(1)(2) ROOM NO. 508 AAYAKAR BHAVAN 5 TH FLOOR M.K. ROAD MUMBAI-400 020. VS. M/S. ANITA DYES & INTERMEDIATES PVT. LTD. A-404, BHAVANI COMPLEX B.S. ROAD, DADAR-WEST MUMBAI-400 028. PAN : AAACA4506A (APPELLANT) (RESPONDENT) ASSESSEE BY DR. P. DANIEL DEPARTMENT BY SHRI BRIJENDRA KUMAR DATE OF HEARING 08 .0 7 .2021 DATE OF PRONOUNCEMENT 30.08.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 31.7.2019 PERTAINING TO ASSESSMENT YEA R 2008-09. 2. THE ISSUE RAISED IS THAT LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS. 5.5 CRORES UNDER SECTION 68 OF THE I.T. ACT. 3. BRIEF FACTS ARE THAT DURING THE COURSE OF ASSESS MENT PROCEEDINGS OF THE ASSESSEE COMPANY FOR AY 2009-10, IT WAS SEEN BY THE ASSESSING OFFICER THAT THE ASSESSEE IS IN RECEIPT OF HUGE SHARE PREMIUM AM OUNTING TO RS. 5.50 CRORES DURING THE F.Y. 2007-08 RELEVANT TO A.Y. 2008-09. T HE ASSESSING OFFICER OBSERVED THAT AS THERE WAS NO SCRUTINY ASSESSMENT D ONE FOR THIS YEAR, THE AMOUNT RECEIVED TOWARDS SHARE PREMIUM WAS NOT EXAMI NED. THAT THE FOLLOWING ARE THE PARTIES FROM WHOM THE ASSESSEE COMPANY HAS RECEIVED SHARE PREMIUM:- M/S. ANITA DYES & INTERMEDIATES PVT. LTD. 2 SR. NO. NAME OF THE PARTY NO. OF SHARES APPLIED AMOUNT 1. AASTHA SUPPLIERS PVT LTD 2000 2000000 2. ABHINANDAN SUPPLIERS PVT LTD 2000 2000000 3. ARANT COMMUNICATION INDIA (P) LTD 2000 2000000 4. BHAGYALAXMI DEVELOPERS (P) LTD 2400 2400000 5. CHETNA VINMAY (P) LTD 2500 2500000 6. DEVPRIYA TIE-UP PVT LTD 2500 2500000 7. DEWDROPS AGENCIES (P) LTD 2500 2500000 8. JAGARAN 'SECURITIES (P) LTD 3000 3000000 9. JAGDAMBA TIE UP (P) LTD 3000 3000000 10. KANYU COMMERCIAL PVT LTD 2000 2000000 11. NILIMA DISTRIBUTORS PVT LTD 2000 2000000 12. PANCHDEV CONSULTANT PVT LTD 2600 2600000 13. PUSHPDANT VYAPAAR (P) LTD 2000 2000000 14. RAHUL VINIYOG PVT LTD 2500 2500000 15. RAJNEESH GOODS PVT LTD 2000 2000000 16. RIDDHI SIDDHI TIE UP PVT LTD 3500 3500000 17. SARAOGI COMMERCIAL (P) LTD 2000 2000000 18. STATEFIELD MERCHANTS PVT LTD 3000 3000000 19. THIRD WAVE SUPPLIERS (P) LTD 2500 2500000 20. VALLEY VINIWAG (P) LTD 2500 2500000 21. VIKHYAT VYAPAAR PVT LTD 2000 2000000 22. VKJ TRAXIRN PVT LTD 2000 2000000 23. ZEXY TRADE & COMMERCE (P) LTD 2500 2500000 TOTAL 55000000 4. THE ASSESSING OFFICER OPINED THAT SINCE THE ASSE SSEE HAD RECEIVED SHARE PREMIUM FROM THE ABOVE MENTIONED PARTIES AND THE AM OUNT RECEIVED TOWARDS SHARE PREMIUM WAS NOT EXAMINED AS NO SCRUTINY ASSES SMENT WAS DONE FOR THE YEAR UNDER QUESTION, THE AO FORMED BELIEF THAT INCO ME FOR A.Y 2008-09 CHARGEABLE TO TAX HAS ESCAPED AND ACCORDINGLY ISSUE D A NOTICE U/S. 148 OF THE I.T ACT ON 26.03.2015 TO THE ASSESSEE COMPANY. 5. ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS AS KED FOR DOCUMENTS IN THIS REGARD. THAT THE ASSESSEE HAS SUPPLIED CERTAIN DOCUMENTS WHICH ARE KEPT ON RECORD. LATER, THE ASSESSEE VIDE NOTICE U/S 142( 1) DATED 16/02/2016 WAS ASKED TO PROVE THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE PARTIES FROM WHICH IT HAD RECEIVED SHARE PREMIUM. THAT THE ASSESSEE WAS ALSO ASKED TO PRODUCE THE PARTIES FOR VERIFICATION OF TRANSACT IONS IN THE FORM OF SHARE M/S. ANITA DYES & INTERMEDIATES PVT. LTD. 3 PREMIUM. THAT FURTHER NOTICES U/S. 133(6) DATED 18.03.2016 WERE ISSUED TO THE PARTIES FROM WHICH THE ASSESSEE HAD RECEIV ED SHARE PREMIUM. THAT SOME OF THE NOTICES ISSUED TO THE PARTIES WERE RETU RNED UNSERVED AND REMAINING PARTIES HAVE NOT FILED ANY DETAILS IN RE SPONSE TO NOTICE UNDER SECTION 133(6) TILL THE PASSING OF THE ASSESSMENT O RDER. 6. THEREAFTER FROM THE ABOVE THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS NOT PROVED THE IDENTITY, CREDITWORTHINESS AND G ENUINENESS OF THE TRANSACTION. HE ALSO REFERRED TO HON'BLE SUPREME CO URT DECISION IN P. CIT VS. MOHANKALA (291 ITR 278). HE CONCLUDED AS UNDER :- FURTHER IN THIS EASE, DURING THE COURSE OF ASSESSME NT PROCEEDINGS FOR THE A.Y 2009-10, THE INSPECTOR OF THIS CHARGE AND OF THE O FFICE OF THE O'.T U&C1I. KOLKATA WERE DIRECTED TO VERIFY THE PARTIES IN THEIR R ESPECTIVE PREMISE. NONE OF THE PARTIES COULD BE LOCATED IN THE GIVEN ADDRESS. AT THE SAME TIME, THE ASSESSEE COMPANY HAS ALSO FAILED TO PRODUCE THE PART IES FOR THE VERIFICATION OF THE PARTIES. IN THE VIEW OF ABOVE LEGAL JUDGMENTS AND FACTS OF THE CASE, IT IS HELD THAT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE AFOR ESAID PARTIES IS NOT ESTABLISHED. FOR THE REASONS BEING, EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE OF THE SUM SO CREDITED IS NOT SATISFACTORY IN THE OPINION OF THE AO, HENCE SUM OF RS. 5,50,00,000/- RECEIVED AS SHARE CAPITAL AND SHARE PREMIUM THEREON I S HELD AS UNEXPLAINED CASH CREDIT' WITHIN THE MEANING OF SEC. 68 OF THE AC T AND IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 7. AGAINST THE ABOVE ORDER ASSESSEE APPEALED BEFORE LEARNED CIT(A). 8. LEARNED CIT(A) HELD THAT THE ASSESSEE HAS FURNIS HED THE NECESSARY DOCUMENTS AND HAS DISCHARGED THE ONUS CAST UPON HIM . THAT THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY MATERIAL TO C ONTRAVERT THE SAME. THE LEARNED CIT(A) HAS HELD AS UNDER : IT IS SEEN THAT DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE FOLLOWING DETAILS WERE FILED BEFORE THE AO. 1. PAN AND ADDRESSES OF ALL THE SHARE APPLICANTS. 2. COPY OF BOARA RESOLUTION FOR ALLOTMENT OF SHARES 3. COPIES OF THE SHARE APPLICATIONS RECEIVED. 4. COPIES OF FORM 2 FILED WITH ROC. 5. BALANCE SHEETS OF ALL THE SHARE APPLICANTS, WHICH A RE ALSO FILED DURING THE APPEAL AT PAGES 22 TO 190 OF THE PAPER BOOK. M/S. ANITA DYES & INTERMEDIATES PVT. LTD. 4 6. COPY OF BANK STATEMENT OF THE COMPANY FOR FY 2007- 08 SHOWING THE RECEIPT OF THE SHARE APPLICATION MONEY THROUGH BANKI NG CHANNELS. 7. COMPANY MASTER DATA AT ROC OF ALL THE SHARE APPLIC ANTS, WHICH GIVES COMPLETE DETAILS OF REGISTERED OFFICE, AUTHORIZED AN D PAID UP CAPITAL, COMPANY STATUS AS 'ACTIVE' ETC. 4.6 IF THE PRINCIPLES MENTIONED IN PARA 10 ARE APPLIED TO THE FACTS OF THE CASE UNDER CONSIDERATION IT CAN BE SEEN TH AT THE IDENTITY OF THE CREDITORS, CREDITWORTHINESS OF THE INVESTORS AND GEN UINENESS OF THE TRANSACTIONS ARE ESTABLISHED AS UNDER :- A. IDENTITY OF THE CREDITOR - THE APPELLANT SUBMITTED PASTY-WISE DERAILS OF SHARE APPLICATION MONEY RECEIVED DURING THE FY 70 07-08 ALONG WITH PAN, GIN AND ADDRESS. B. CAPACITY OF THE CREDITOR TO LEND MONEY - FINANCIAL STATEMENTS OF THE COMPANIES WHICH INVESTED MONEY AND ALSO THE NET WORTH OF THE COMPANY. THE INVESTMENT IS ALSO REFLECTING IN THE RESPE CTIVE BALANCE SHEETS OF THE INVESTOR COMPANY. C. GENUINENESS OF THE TRANSACTION- ALL THE TRANSACTIONS IS ROUTED THROUGH BANKING CHANNELS AND IT HAS BEEN RECORDED IN THE BOO KS OF THE APPELLANT AND ALSO THE PERSON WHO INVESTED THE SAME. T HE TRANSACTIONS HAVE BEEN REPORTED WITH THE ROC. TO SUBSTAN TIATE THE CLAIM, THE APPELLANT ALSO ENCLOSED FORM NO. 2 FILED W ITH ROC FOR ALLOTMENT OF SHARES IN THE SUBSEQUENT YEARS ALONG WITH THE BOARD RESOLUTION AND LIST OF ALLOTMENT. THE APPELLANT ALSO E NCLOSED THE SHARE APPLICATION FORMS RECEIVED. THE APPELLANT ALSO SUBM ITTED ITS BANK STATEMENT HIGHLIGHTING THE AMOUNTS RECEIVED /CREDITED TOWARDS, SHARE APPLICATION MONEY 4.7 IN THESE CIRCUMSTANCES, IT CAN BE SAID THAT THE APPE LLANT HAD DISCHARGED THE INITIAL ONUS CAST UPON TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AS WELL AS GENUINENESS OF THE TRANSACTION S. THEREFORE, THE ONUS SHIFTED TO THE AO. IT IS ALSO SEEN THAT AO ONLY ISSUED NOTICES U/S. 133(6) ON 18.03.2016 TO THE SHARE APPLICANTS, JUST 13 DAYS BEFO RE THE COMPLETION OF THE ASSESSMENT. FURTHER, IT IS IMPORTANT TO NOTE THAT 18.03.20 16 WAS FRIDAY AND BEING CLOSED HOLIDAY ON SATURDAY AND SUNDAY, THE NO TICES COULD HAVE BEEN POSTED ONLY ON 21-03-2016 AND WHICH COULD HAVE RECE IVED TO THE SHARES APPLICANTS ONLY ON 26 TH OR 28 TH MARCH 2016 AS 23 RD , 24 TH & 25 TH WERE HOLIDAYS DUE TO HOLI FESTIVAL AND GOOD FRIDAY. ACCORDINGLY, IT WAS ALMOST IMPOSSIBLE FOR INVESTORS TO REPLY TILL 31-03-2016. IT IS ALSO SEEN THAT IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS NOT IDENTIFIED THE P ARTIES WHERE THE NOTICES WERE RETURNED UN-SERVED AND WHERE THE REPLIES IN RES PONSE TO NOTICE U/S 133(6) WERE NOT FILED. IT APPEARS FROM THE DATE OF ISSU E OF NOTICES U/S'133(6) BY THE ASSESSING OFFICER, THE ENQUIRY WAS NOT A GENUIN E ENQUIRY. HE SHOULD HAVE STARTED ENQUIRY MUCH IN ADVANCE, IF THE AO WAS NOT SATISFIED, HE HAD THE OPTION OF -SUMMONING THE LENDERS. NO INDEPENDENT AN D GENUINE VERIFICATION WAS CARRIED OUT BY THE AO WITH THE INVES TOR COMPANIES, NO SUMMONS U/S 131 WERE ISSUED TO THE SHARE APPLICANTS AN D NO STATEMENTS WERE RECORDED WITH REGARD TO THE GENUINENESS OF SPECIF IC TRANSACTIONS WITH M/S. ANITA DYES & INTERMEDIATES PVT. LTD. 5 THE APPELLANT. NO EVIDENCE WAS BROUGHT ON RECORD IN O RDER TO CONTROVERT THE CLAIMS OF THE APPELLANT. THERE IS NO FINDING BY THE AO THAT THE EVIDENCES PRODUCED BY THE APPELLANT WERE UNTRUSTWORTHY OR LACKE D CREDIBILITY. IN OTHER WORDS, THE AO DID NOT MAKE ANY GENUINE ATTEMPT TO DISCH ARGE HIS BURDEN-OF PROOF TO REBUT THE EVIDENCES FILED BY THE APPELLANT O R TO BRING ANY CONTRARY MATERIAL ON RECORD. THUS, THE APPELLANT'S CONTENTION THAT IT HAD DISCHARGED ONUS OF ESTABLISHING THE IDENTITY AND CREDITWORTHINES S OF THE INVESTOR COMPANIES AND GENUINENESS OF THE TRANSACTIONS WITH THE HELP OF RELEVANT SUPPORTING EVIDENCES WHICH COULD RIOT BE DISPROVED BY THE AO APPEARS TO BE CORRECT. 4.8 FURTHER, IN A TYPICAL BOGUS SHARE INVESTMENT CASE, THE MONEY IS ROUTED THROUGH DIFFERENT LAYERS AND AFTER THE ALLOTMENT OF SHAR ES, IN SHORT POSSIBLE TIME THE SHARES ARE TRANSFERRED TO THE ORIGINAL OWNER OF THE MONEY. THE APPELLANT FILED THE LIST OF SHARE HOLDERS OF THE APPEL LANT COMPANY FOR THE YEARS 2008, 2009, 2010, 2011 AND 2019. IT IS SEEN THAT THERE IS NO CHANGE IN THE SHARE HOLDING OF THE COMPANY SINCE ALLOTMENT, WHICH M EANS THE SAME INVESTORS ARE STILL ENJOYING THE BENEFITS OF THE ASSETS OF THE COMPANY. THIS ASPECT SUPPORTS THE ARGUMENT THAT THE INVESTORS ARE GEN UINE AND THE MONEY DOES NOT BELONG TO THE APPELLANT COMPANY OR ANY OTHER DUMMY INVESTOR. 4.9 AO HAS MENTIONED THAT DURING THE ASSESSMENT PROCE EDINGS FOR A LATER ASSESSMENT YEAR 2009-10, THE INSPECTOR OF THE KOLKATA D IT(I&CI) OFFICE COULD NOT LOCATE THE OFFICES OF THE INVESTORS. AO HAS NOT ME NTIONED THE DETAILED FINDINGS OF THE ENQUIRY DONE PRIOR TO THE REOPENING OF THE ASSESSMENT. THE FINDING IN EACH OF THE INVESTOR NOT QUOTED IN THE ASSES SMENT ORDER. A VAGUE STATEMENT WITHOUT ANYTHING CONCRETE WORTH QUOTING IN THE A SSESSMENT ORDER CANNOT BE TAKEN COGNIZANCE TO MAKE ANY ADVERSE VIEW. I T IS ALSO SEEN THAT THE AO DID NOT SUPPLY COPY OF SUCH REPORT, IF ANY TO THE A PPELLANT DURING THE ASSESSMENT PROCEEDINGS, SO THAT THE APPELLANT CAN COUNT ER IT. HON. SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. CO MMISSIONER OF CENTRAL EXCISE (2015) 281 CTR 241 (SC) HAS REAFFIRMED THE PR INCIPLES OF NATURAL JUSTICE AND HELD THAT THE OPPORTUNITY OF CROSS EXAMINA TION OF WITNESS IS MUST IN A CASE WHERE SOME ADVERSE INFERENCE IS TO BE DRAW N AGAINST THE ASSESSES. THE AO FAILED TO BRING ANY CORROBORATIVE EVIDENCE AN D ALSO FAILED TO GIVE OPPORTUNITY TO REBUT THE REPORT WHICH IS USED AS ONE O F THE BASIS OF ADDITION. IT IS AN ESTABLISHED LAW THAT WITHOUT CORROBORATIVE EV IDENCE AND WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE, THE ADDITION CANNO T BE MADE BASED ON SOME REPORT OR THE STATEMENT OF A THIRD PARTY. RELIANC E IS PLACED ON ASST. CIT VS. KATRINA ROSEMARY TURCOTTE 87 TAXMANN.COM 116 (ITA T MUM) ADDL. CIT VS. MISS LATA MANGESHKAR 97 ITR 696 (BOM). IN THIS C ASE, THE AO BRUSHED ASIDE THE EVIDENCE PRODUCED BY THE APPELLANT IN A CA SUAL MANNER ONLY BY DISCUSSING THE CASE LAWS ONLY. ON THE OTHER HAND, THE APPELLANT WAS ABLE TO ESTABLISH THE IDENTITY AND THE CREDITWORTHINESS OF THE CR EDITORS AS WELL AS THE GENUINENESS OF TRANSACTION. WHEN THE INVESTOR COMPANY IS FILING REGULAR INCOME TAX RETURNS OF INCOME AND THERE IS A TRANSACTION THROUGH BANKING CHANNEL, NO ADDITION CAN BE MADE,.-WITHOUT HAVING ANY CONTRARY OR COGENT EVIDENCES IN POSSESSION. 4.10 THE HON'BLE SUPREME COURT IN THE CASE OF CIT V/S LOVELY EXPORTS 6 DTK 308 HAS HELD 'IF THE SHARE, APPLICATION MONEY IS RECEIVED BY THE M/S. ANITA DYES & INTERMEDIATES PVT. LTD. 6 ASSESSEE COMPANY FROM ALLEGED BOGUS SHARE HOLDERS W HO'S NAME ARE GIVEN TO THE ASSESSING OFFICER THEN THE DEPARTMENT IS FREE TO P ROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT IT C ANNOT BE REGARDED AS UNDISCLOSED INCOME OF ASSESSEE COMPANY'. THE HON'BL E BOMBAY HIGH COURT IN THE CASE OF CIT V/S CREATIVE WORLD TELEFILMS LTD 3 33 ITR 100 HAS HELD 'IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESS EE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHO'S NAME ARE GIVEN TO TH E ASSESSING OFFICER THEN THE DEPARTMENT CAN ALWAYS PROCEED AGAINST THEM AN D IF NECESSARY REOPEN THEIR INDIVIDUAL ASSESSMENTS. 4.11 HON'BLE ITAT, MUMBAI IN THE CASE OF ARCELI REALTY LTD. ITA NO. 6492/MUM/2016 DATED 21.04.2017 HAS DECIDED A SIMILA R ISSUE. IF THE TOTALITY OF FACTS AND THE JUDICIAL PRONOUNCEME NTS, DISCUSSED HEREINABOVE, ARE ANALYZED, WE ARE OF THE CONSIDERED OPINION THAT THE ONUS CASTE UPON THE ASSESSEE, AS PROVIDED U/S. 68 OF THE A CT, HAS BEEN DULY DISCHARGED BY THE ASSESSEE AS THE IDENTITY OF THE SHAR E SUBSCRIBERS, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IS NOT IN DOUBT OR IT CAN BE. ACCORDINGLY, THE ADDITION IS DELETED. THE GROUND OF APPEAL NO. 2 & 3 ARE ALLOWED. 9. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. 11. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSING OFFICER. HE FURTHER RELIED UPON THE FOLLO WING CASE LAWS : HON'BLE SUPREME COURT IN THE CASE OF PR. COMMISSION ER OF INCOME TAX (CENTRAL)-1 VS. NRA IRON & STEEL (P) LTD. REPORTED IN (2019) 110 TAXMANN.COM 491 (SC) HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF ROYAL R ICH DEVELOPERS (P) LTD VS. PR. CIT, REPORTED IN (2019) 108 TAXMANN.COM 382 (BOMBAY) HON'BLE HIGH COURT OF DELHI IN THE CASE OF COMMISS IONER OF INCOME TAX VS. NAVODAYA CASTLES (P) LTD. REPORTED IN (2014) 50 TAXMA NN.COM 110 (DELHI) HON'BLE ITAT AHEMDABAD IN THE CASE OF AYANA COMLRA DC (P) LTD. VS ITO. W- L(1)(4). AHD REPORTED IN (2019) 104 TAXMANN.COM 66 ( AHMEDABAD-TRIBUNAL) HON'BLE ITAT DELHI IN THE CASE OF ITO (EXEMPTION) W-7(4) VS. SYNERGY FINLEASE (P) LTD REPORTED IN (2019) 105 TAXMANN.COM 208 (DELHI-TRIBUNAL) 12. PER CONTRA LEARNED COUNSEL OF THE ASSESSEE RELI ED UPON THE ORDER OF LEARNED CIT(A). HE RELIED UPON THE FOLLOWING CASE L AWS FROM HON'BLE BOMBAY HIGH COURT :- M/S. ANITA DYES & INTERMEDIATES PVT. LTD. 7 CIT VS. GAGANDEEP INFRASTRUCTURE PVT. LTD. (394 ITR 6 80) CIT VS. ORCHID INDUSTRIES PVT. LTD. (397 ITR 136) PRINCIPAL CIT VS. APEAK INFOTECH (397 ITR 148) 13. AS REGARDS LEARNED DEPARTMENTAL REPRESENTATIVE RELIANCE OF NRA IRON & STEEL (P) LTD. (SUPRA), THE SAME WAS AN EX-PARTE OR DER BY HON'BLE APEX COURT, WHERE HON'BLE APEX COURT HAD GIVEN A FINDING ON THE BOGUS NATURE ON THE FACTS AND CIRCUMSTANCES OF THAT CASE. THE RELIANCE UPON H ON'BLE BOMBAY HIGH COURT IN THE CASE OF ROYAL RICH DEVELOPERS (P) LTD.(SUPRA ) IS ALSO NOT APPLICABLE HERE. IN THAT CASE THERE WAS A FINDING THAT NO BUSINESS W AS CARRIED ON BY THE ASSESSEE AND THAT DEPOSITS WERE MADE IN THE INVESTO RS BANK ACCOUNT AND IMMEDIATELY INVESTMENT IN PURCHASE OF ASSESSEE SHAR E WERE MADE. IN THE PRESENT CASE WE FIND THAT ISSUE IS SQUARELY COVERED BY HON'BLE BOMBAY HIGH COURT DECISION IN GAGANDEEP INFRASTRURE PVT. LTD. ( SUPRA), WHEREIN IT HAS HELD THAT NECESSARY STATUTE FOR TAXING UNJUSTIFIED SHARE PREMIUM WAS BROUGHT INTO STATUTE BOOKS FROM ASSESSMENT YEAR 2012-13. WE MAY REFER TO THE DECISION AS UNDER:- DURING THE PREVIOUS RELEVANT TO THE SUBJECT ASSESSMENT Y EAR THE ASSESSEE HAD INCREASED ITS SHARE CAPITAL FROM RS.2,50,000/TO R S.83.75 LAKHS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTI CED THAT THE RESPONDENT HAD COLLECTED SHARE PREMIUM TO THE EXTENT OF RS.6.69 CRORES. CONSEQUENTLY HE CALLED UPON THE RESPONDENT TO JUSTIFY THE CHARGING OF SHARE PREMIUM AT RS.L90/PER SHARE. THE RESPONDENT FURNISHED THE LIST OF ITS SHAREHOLDERS, COPY OF THE SHARE APPLICATION FORM, CO PY OF SHARE CERTIFICATE AND FORM NO.2 FILED WITH THE REGISTRAR OF COMPANIES. THE JUSTIFICATION FOR CHARGING SHARE PREMIUM WAS ON THE BASIS OF THE FUTUR E PROSPECTS OF THE BUSINESS OF THE ASSESSEE. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION/JUSTIFICATION OF THE RESPONDENT AND INVOKE D SECTION 68 OF THE ACT TO TREAT THE AMOUNT OF RS.7.53 CRORES I.E. THE AGGREGAT E OF THE ISSUE PRICE AND THE PREMIUM ON THE SHARES ISSUED AS UNEXPLAINED CASH CREDIT WITHIN THE MEANING OF SECTION 68 OF THE ACT. THIS ADDITION WAS D ELETED BY THE CIT(A) AND THE TRIBUNAL. BEFORE THE HIGH COURT, THE DEPARTMENT CO NTENDED THAT THE PROVISO TO SECTION 68 OF THE ACT WHICH WAS INTRODUCED W ITH EFFECT FROM 1ST APRIL, 2013 WOULD APPLY IN THE FACTS OF THE PRESENT C ASE EVEN FOR A.Y. 2008- 09. THE BASIS OF THE ABOVE SUBMISSION WAS THAT THE DE HORS THE PROVISO ALSO THE REQUIREMENTS AS SET OUT THEREIN WOULD HAVE TO BE SA TISFIED. HELD BY THE HIGH COURT DISMISSING THE APPEAL: (I) WE FIND THAT THE PROVISO TO SECTION 68 OF THE ACT HAS BEEN INTRODUCED BY THE FINANCE ACT 2012 WITH EFFECT FROM 1 ST APRIL, 2013. THUS IT WOULD BE EFFECTIVE ONLY FROM THE ASSESSMENT YEA R 2013-14 M/S. ANITA DYES & INTERMEDIATES PVT. LTD. 8 ONWARDS AND NOT FOR THE SUBJECT ASSESSMENT YEAR. IN FA CT, BEFORE THE TRIBUNAL, IT WAS NOT EVEN THE CASE OF THE REVENUE THA T SECTION 68 OF THE ACT AS IN FORCE DURING THE SUBJECT YEARS HAS TO BE READ/UNDERSTOOD AS THOUGH THE PROVISO ADDED SUBSEQUENTLY EFFECTIVE ON LY FROM 1ST APRIL, 2013 WAS ITS NORMAL MEANING. THE PARLIAMENT DI D NOT INTRODUCE TO PROVISO TO SECTION 68 OF THE ACT WITH RETROSPECTIVE EFF ECT NOR DOES THE PROVISO SO INTRODUCED STATES THAT IT WAS INTRODUCED 'F OR REMOVAL OF DOUBTS' OR THAT IT IS 'DECLARATORY'. THEREFORE IT IS NOT OPEN TO GIVE IT RETROSPECTIVE EFFECT, BY PROCEEDING ON THE BASIS THAT THE ADDITION OF THE PROVISO TO SECTION 68 OF THE ACT IS IMMATERIAL AND DOES NOT CHANGE THE INTERPRETATION OF SECTION 68 OF THE ACT BOTH BEFORE AN D AFTER THE ADDING OF THE PROVISO. IN ANY VIEW OF THE MATTER THE THREE ESS ENTIAL TESTS WHILE CONFIRMING THE PRE PROVISO SECTION 68 OF THE ACT LAID D OWN BY THE COURTS NAMELY THE GENUINENESS OF THE TRANSACTION, ID ENTITY AND THE CAPACITY OF THE INVESTOR HAVE ALL BEEN EXAMINED BY THE IMPUGNED ORDER OF THE TRIBUNAL AND ON FACTS IT WAS FOUND SATISFIED. (II) FURTHER IT WAS A SUBMISSION ON BEHALF OF THE REVE NUE THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIVES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAREHOLDERS I.E. THEY ARE BOGUS. THE APEX COURT IN CIT V/S. LOVELY EXPORTS (P)LTD. 317 ITR 218 IN THE CONTEXT TO THE PREAMENDED SECTION 68 OF THE ACT HAS HEL D THAT WHERE THE REVENUE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM BOGUS SHAREHOLDERS THEN IT IS FOR THE INCOME TAX OFFICER TO PROCEED BY REOPENING THE ASSESSMENT OF SUC H SHAREHOLDERS AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW. IT D OES NOT ENTITLE THE REVENUE TO ADD THE SAME TO THE ASSESSEE'S INCOME A S UNEXPLAINED CASH CREDIT. 14. FURTHERMORE, WE NOTE THAT HON'BLE JURISDICTIONA L HIGH COURT IN VEEDHATA TOWER PVT.LTD. VIDE ORDER DATED 17.04.2018 HAS ALSO HELD THAT WHEN ALL DOCUMENTARY EVIDENCES HAS BEEN SUBMITTED BY THE ASS ESSEE, AND ADVERSE INFERENCE IS DRAWN ONLY FOR NON RESPONSE BY THE CON CERNED PARTY, SUCH ADVERSE INFERENCE AGAINST THE ASSESSEE IS NOT SUSTAINABLE. WE FIND THAT THE AFORESAID CASE LAWS DULY APPLIES ON THE FACTS OF THE CASE. NO ADVERSE INFERENCE HAS BEEN NOTED FROM THE BANK STATEMENT, BALANCE SHEET AND OT HER DOCUMENT OF THE PARTIES FROM WHOM SHARE CAPITAL & SHARE PREMIUM HAS BEEN RECEIVED, WHICH WERE DULY FILED BEFORE AO. HENCE, THE ADDITION ON M ERITS IS NOT SUSTAINABLE. ACCORDINGLY, ON THE TOUCHSTONE OF ABOVE HON'BLE JUR ISDICTIONAL HIGH COURT DECISION, WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. M/S. ANITA DYES & INTERMEDIATES PVT. LTD. 9 15. IN THE RESULT, THIS APPEAL BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30.8.2021. SD/- SD/- (PAVANKUMAR GADALE) (SHAM IM YAHYA) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI; DATED : 30/08/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI