ITO, WD-4(1), KOLKATA, Kolkata V. M/s Tikmani Metal (P) Ltd. (Now VSP Steel (P) Ltd., Kolkata

ITA 741/KOL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1701 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 24-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G H SEENA AD DL
• Keywords: Unexplained cash credit; Source of fund; Corroborative evidences
• Section: 143(3); 133(6); 68; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & HONBLE SHRI M.BALAGANESH, AM ] I.T.A NO. 741/KOL/201 4 ASSESSMENT YEAR : 2010-1 1 ITO, WARD-4(1), KOLKATA -VS- M/S VSP STEEL (P) LTD. (FORMERLY TIKMANI METAL (P) LTD.) [PAN: AACCT 2881 K] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI G.H. SEENA, AD DL. CIT SR. DR FOR THE REVENUE : SHRI SUBASH AGARWAL, AR DATE OF HEARING : 01.02.2018 DATE OF PRONOUNCEMENT : 07.02.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORD ER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-IV, KOLKATA [IN SHORT THE LD CIT(A)] IN APPEAL NO.96/CIT(A)-IV/WD.-4(1)/2013-14 DATED 17.01.2014 AGAINST THE ORDER PASSED BY THE ITO, WARD-4(1), KOLKATA [ IN SHORT THE LD AO] U NDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 25 .03.2013 FOR THE ASSESSMENT YEAR 2010-11. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION OF RS 1 CRORE MA DE TOWARDS SHARE CAPITAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 ITA NO.741/KOL/2014 VSP STEEL (P) LTD.(FORMERLY M/S TIKMANI METAL (P) LTD.) A.YR.2010-11 2 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESSES OF MANUFACTURING OF MS IN GOT AND TRADING IN STEEL AND HAD FILED ITS RETURN OF INCOME FOR THE ASST YEAR 2010-1 1 ON 27.9.201 DECLARING TOTAL LOSS OF RS 50,533/-. THE ASSESSEE COMPANY APPEARED FROM TI ME TO TIME AND PRODUCED BOOKS OF ACCOUNTS ALONG WITH SUPPORTING EVIDENCES BEFORE THE LD AO WHICH WERE DULY EXAMINED AND VERIFIED. THE LD AO OBSERVED THAT TH E SHARE CAPITAL OF THE ASSESSEE COMPANY HAD INCREASED BY RS 1,00,00,000/- DURING TH E YEAR UNDER APPEAL. THE LD AO ADDED THE SAME AS UNEXPLAINED CASH CREDIT AS NO EVI DENCES WERE PRODUCED BY THE ASSESSEE AT THE TIME OF ASSESSMENT. THE ASSESSEE S TATED BEFORE THE LD CITA THAT THE REQUISITION IN RESPECT OF SHARE APPLICATION MONEY W AS RECEIVED WAS MADE AT THE FAG END OF THE ASSESSMENT PROCEEDINGS BY THE LD AO AND AS SUCH THE NECESSARY DOCUMENTS AND EVIDENCES FILED BY THE ASSESSEE COULD NOT BE VE RIFIED BY THE LD AO. THE ASSESSEE HAD SUBMITTED THE DETAILS OF PERSONS (I.E 5 COMPANI ES) FROM WHOM SHARE APPLICATION MONIES WERE RECEIVED, THEIR ADDRESSES, THEIR INCOME TAX RETURNS, THEIR BALANCE SHEETS, THEIR PROFIT AND LOSS ACCOUNTS, THEIR PAN CARDS, TH EIR BANK STATEMENTS AND STATEMENT OF ACCOUNTS OF THE ASSESSEE AS PER THE BOOKS OF THE RE SPECTIVE COMPANIES BEFORE THE LD AO. THESE DETAILS WERE NOT VERIFIED BY THE LD AO B EFORE COMPLETION OF ASSESSMENT FOR THE REASONS STATED ABOVE. WHEN THIS FALLACY WAS PO INTED OUT BY THE ASSESSEE TO THE LD CITA, HE REMANDED THE MATTER TO THE LD AO FOR HIS V ERIFICATION OF THE AFORESAID DETAILS AND SUBMIT HIS REPORT THEREON. THE LD AO SUBMITTE D HIS REMAND REPORT ON 26.12.2013 WHEREIN, HE STATED THAT THE NOTICES U/S 133(6) OF T HE ACT WERE ISSUED TO ALL THE SHARE APPLICANTS. THE LD AO ASKED FOR THE FOLLOWING DET AILS IN THE NOTICE U/S 133(6) OF THE ACT ISSUED TO THE SHARE APPLICANTS :- 1. PLEASE FURNISH COPY OF SHARE APPLICATION. 2. PLEASE FURNISH PARTICULARS OF PAYMENT SHOWING CH EQUE NO., DATE OF PAYMENT, AMOUNT, QUANTITY APPLIED FOR AND COPY OF R ECEIPT. 3. PLEASE FURNISH THE DETAILS WHEN THE SHARES HAVE BEEN ALLOTTED OR THE PAYMENT HAS BEEN SETTLED. IF ALLOTTED, PLEASE FURNISH THE DISTINCTIVE NOS. OF SHARES ALSO. 3 ITA NO.741/KOL/2014 VSP STEEL (P) LTD.(FORMERLY M/S TIKMANI METAL (P) LTD.) A.YR.2010-11 3 4. AMOUNT OF SHARE PREMIUM PAID. 5. PLEASE EXPLAIN THE SOURCE OF FUND FOR SUCH INVE STMENT. 6. PLEASE FURNISH COPY OF YOUR ACCOUNTS, COPY RECEI PT OF FILING OF I.T. INCOME- TAX RETURN AND COPY OF BANK STATEMENT. 7. PLEASE FURNISH COPY OF FORM NO. 18 AS A PROOF O F ADDRESS. THE LD AO OBSERVED IN HIS REMAND REPORT THAT IN RES PONSE TO THESE LETTERS, ALL THE SHARE APPLICANTS HAVE PROVIDED INFORMATION AND DOCUMENTS AS PER REQUISITION. HE OBSERVED THAT ON PERUSAL OF THOSE REPLIES , IT WAS FOUND THA T THE SHARE APPLICANTS DID NOT PROVIDE THE ADDRESS OF THE CONCERNS WHOSE SHARE APPLICATION MONEY WAS CLAIMED AS SOURCE OF INVESTMENT BY IT IN THE SHARES OF THE ASSESSEE COMP ANY. ACCORDINGLY, THE INSPECTOR ATTACHED TO THE OFFICE WAS DEPUTED TO MAKE ENQUIRY IN THIS RESPECT AND HE COLLECTED THE ADDRESSES OF THE SOURCE PERSONS / CONCERNS. NOTIC ES U/S 133(6) OF THE ACT WERE SENT TO THOSE PARTIES IN ORDER TO VERIFY THE SOURCE OF THE SOURCE OF THE SHARE APPLICANTS OF THE ASSESSEE COMPANY. THE LD AO STATED IN HIS REMAND R EPORT THAT NO REPLIES WERE RECEIVED FROM THOSE PERSONS FOR THE NOTICE U/S 133( 6) OF THE ACT. 4. THE COPY OF THE REMAND REPORT WAS SUBMITTED TO T HE ASSESSEE BY THE LD CITA FOR HIS REJOINDER. THE ASSESSEE REPLIED THAT ALL THE SHARE APPLICANTS HAD DULY CONFIRMED HAVING INVESTED SHARE APPLICATION MONIES IN THE ASSESSEE C OMPANY AND THEIR RESPECTIVE SOURCES ALSO WERE DULY EXPLAINED BY THEM. HENCE IT WAS SUBMITTED THAT THE THREE NECESSARY INGREDIENTS OF SECTION 68 OF THE ACT VIZ. , IDENTITY , CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS HAVE BEEN PROVED BEYOND DOUBT. ALL THE SHARE APPLICANTS WERE INDEED INCOME TAX ASSESSEES AND THEY HAD IN TU RN DULY REFLECTED THE AMOUNT INVESTED IN ASSESSEE COMPANY AS INVESTMENTS IN THEI R RESPECTIVE BALANCE SHEETS. IT WAS SUBMITTED THAT THE LD AO IN THE REMAND REPORT DID N OT FIND ANY INFIRMITY IN THE DOCUMENTS FURNISHED BY THE SHARE APPLICANTS. BUT TH E LD AO STILL PROCEEDED TO VERIFY THE SOURCE OF SOURCE OF SHARE APPLICANTS BY SERVING NOTICE U/S 133(6) OF THE ACT WHICH 4 ITA NO.741/KOL/2014 VSP STEEL (P) LTD.(FORMERLY M/S TIKMANI METAL (P) LTD.) A.YR.2010-11 4 WERE ALSO DULY SERVED THROUGH THE INSPECTOR OF INCO ME TAX. IT WAS PLEADED THAT THE ASSESSEE CANNOT BE FAULTED UPON FOR THE SECOND LAYE R OF SHARE APPLICANTS NOT RESPONDING TO THE NOTICE ISSUED U/S 133(6) OF THE A CT. IT WAS PLEADED THAT THE ASSESSEE HAD DULY DISCHARGED ITS ONUS IN TERMS OF SECTION 68 OF THE ACT AND NO ADDITION COULD BE VALIDLY MADE UNDER THAT SECTION IN THE HANDS OF TH E ASSESSEE. IT WAS FURTHER PLEADED THAT THE LD AO CANNOT RESORT TO MAKE ANY VERIFICATI ON OF THE SOURCE OF SOURCE AND CANNOT DRAW ADVERSE INFERENCE ON THE ASSESSEE COMPA NY IF THE NECESSARY DETAILS WERE NOT FURNISHED BY A THIRD PARTY. THE ASSESSEE ALSO PLACED RELIANCE IN SUPPORT OF ALL ITS CONTENTIONS ON VARIOUS DECISIONS. 5. THE LD CITA APPRECIATED THE CONTENTIONS OF THE A SSESSEE AND DELETED THE ADDITION MADE TOWARDS SHARE APPLICATION MONEY BY OBSERVING A S UNDER:- 3.2 I HAVE EXAMINED THE ASSESSMENT ORDER, THE REM AND REPORT AND THE VARIOUS SUBMISSIONS AND COUNTER SUBMISSIONS OF THE AR OF TH E APPELLANT. I AM OF THE VIEW, THAT THE APPELLANT HAS DULY DISCHARGED ITS ONUS OF PROVING T HE IDENTITY OF THE CREDITORS, CAPACITY OF SUCH CREDITORS TO ADVANCE MONEY AND GENUINENESS OF THE TRANSACTIONS. THE VARIOUS DOCUMENTS WHICH WERE MADE AVAILABLE TO THE AO BY THE APPELLAN T AND THROUGH ENQUIRY CONDUCTED BY THE AO ARE LISTED AS BELOW: I. THE I.T. RETURN OF THE CREDITOR. II. THE BANK STATEMENT OF THE CREDITOR. III. COPY OF SHARE APPLICATIONS. IV. BALANCE SHEET OF THE CREDITOR. V. PARTICULARS OF PAYMENT- CHEQUE NO., DT. OF PAYMENT, AMOUNT QUANTITY APPLIED FOR, COPY OF RECEIPT, ETC. VI. AMOUNT OF SHARE PREMIUM PAID VII. COPY OF PAN CARD OF THE INVESTORS, VIII. STATEMENT OF ACCOUNT OF THE APPELLANT AS PER THE BO OKS OF INVESTORS, IX. PROOF OF ADDRESS OF THE INVESTORS, I AM OF THE VIEW THAT THE ABOVE DOCUMENTS ARE SUFFI CIENT TO ESTABLISH THE IDENTITY, CAPACITY AND GENUINENESS OF THE INVESTORS. AS ALL THE INVESTORS ARE FILING THEIR INCOME-TAX RETURN, THE A.O. CAN GET FEED BACK FROM WITHIN THE DEPARTMENT, IF HE HAS ANY DOUBT REGARDING THEIR CAPACITY OR GENUINENESS. IN THIS CONTEXT, CERTAIN RELEVANT JUDG EMENTS OF VARIOUS COURTS INCLUDING THE JURISDICTIONAL HIGH COURT HAS BEEN CITED BY THE A.R . OF THE APPELLANT AND THESE ARE RELEVANT DECISIONS I DECIDING WHETHER THE INVESTMENT IS FROM UNDISCLOSED SOURCES. IN THE COURSE OF ENQUIRY AT THE REMAND STAGE NOTHING ADVERSE HAS COM E TO THE NOTICE OF THE A.O. AS FAR AS INVESTORS ARE CONCERNED. INVESTIGATION INTO THE SOU RCE OF FUND OF THE INVESTORS WILL HAVE NO 5 ITA NO.741/KOL/2014 VSP STEEL (P) LTD.(FORMERLY M/S TIKMANI METAL (P) LTD.) A.YR.2010-11 5 BEARING IN THIS CASE, UNTIL AND UNLESS THE A.O. IS ABLE TO ESTABLISH THAT THE INVESTORS HAD ACTUALLY ROUTED APPELLANT'S UNDISCLOSED FUND FOR TH E PURCHASE OF SHARES. NO SUCH ALLEGATION HAS SO FAR BEEN MADE BY THE A.O. IF THE CREDITOR/IN VESTOR IS FOUND TO BE POSSESSING UNDISCLOSED INCOME AND MAKING INVESTMENT OUT OF IT, THEN, THAT INCOME HAS TO BE TAXED IN THE HANDS OF THE INVESTORS/CREDITORS. THIS RATIO HAS BE EN HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (P) LTD. 216 CTR 195 THA T ADDITION ON ACCOUNT OF SHARE CAPITAL CANNOT BE MADE IN THE HANDS OF THE RECIPIENT COMPAN Y. THE ITAT, KOLKATA BENCH, FOLLOWING THE JUDGEMENT OF THE APEX COURT IN THE CASE OF LOVE LY EXPORTS (P) LTD. HAS ADJUDICATED AT ITA NO. 1985/KOL/2010 IN THE CASE OF ITO VS INDIAN FOR MS CENTRE (P) LTD. HAS HELD - WE OBSERVE THAT THE TRANSACTIONS ARE DULY RECORDED IN THE AUDITED BOOKS OF ACCOUNTS OF BOTH THE ASSESSEE-COMPANY AS WELL AS AFORESAID SHARE APP LICANT COMPANIES, WHO PURCHASED SHARES OF THE ASSESSEE-COMPANY. THEREFORE, NO ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT IS WARRANTED IN THE CASE OF THE ASSESSEE ON THE GIVEN FACTS AND CIRCUMSTANCES AS DISCUSSED ABOVE. IN VIEW OF THE ABOVE, IN OUR CONSIDERED OPIN ION, THE ACTION OF THE AO IS CONTRARY TO THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT V S. M/S LOVELY EXPORTS (P) LTD. (SUPRA). THE HON'BLE ITAT, KOLKATA, IN THE CASE OF ITA VS SA VERA SUPPLIERS (P) LTD. ITA NO.12/K/2010 HAS HELD THAT - AS IT IS NOTICED FROM THE ASSESSMENT ORDER THAT TH E ASSESSEE HAS PLACED BEFORE THE AO COPIES OF RETURN OF INCOME/ BALANCE SHEET AND BANK ACCOUNT DETAILS AS ALSO THE PAN NOS. OF THE APPLICANTS THE ASSESSEE HAS DISCHARGED ITS ONUS IN RESPECT OF THE SHARE APPLICATION MONEY RECEIVED BY IT. FURTHER, IN VIEW OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. DATAWARE PRIVATE LIMITED (SUPR A) WHEREIN IT HAS BEEN SPECIFICALLY HELD THAT SO LONG IT IS NOT ESTABLISHED THAT THE RETURNS SUBMITTED BY THE CREDITOR HAS BEEN REJECTED BY ITS AO/ THE AD OF THE ASSESSEE IS BOUND TO ACCEP T THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE ARE OF THE VIEW THAT THE FINDING OF THE ID. CJT(A) IS ON THE RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. THIS VIEW OF OU RS ALSO FINDS SUPPORT FROM THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS (P)LTD REFERRED TO SUPRA. 3.4 IN VIEW OF THE DISCUSSIONS MADE EARLIER AND ALS O HUMBLY FOLLOWING THE VARIOUS DECISIONS OF THE APEX COURT AS WELL AS THE JURISDICTIONAL TRI BUNAL AT KOLKATA, I AM OF THE VIEW THAT ADDITION MADE BY THE A.O. FOR RS.1 CRORE ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM VARIOUS APPLICANTS AND HOLDING IT AS UNDISCLOS ED INCOME OF THE APPELLANT HAS NO BASIS AND STANDS DELETED. GROUND NO.1 OF THE APPEAL IS AL LOWED. ) 6 ITA NO.741/KOL/2014 VSP STEEL (P) LTD.(FORMERLY M/S TIKMANI METAL (P) LTD.) A.YR.2010-11 6 6. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN HOLDING THAT ADDITION OF SHARE CAPITAL OF RS. 1,00, 00,000/- AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE, WAS NOT WARRANTED , IGNORING THE FACT THAT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANS ACTION IN RESPECT OF SHARE SUBSCRIBERS COULD NOT BE ESTABLISHED FROM WHOM SHAR E CAPITAL CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THA T THE LD DR ARGUED THAT THE ASSESSEE HAD NOT PROVED THE SOURCE OF SOURCE OF SHA RE APPLICANTS WHO HAD INVESTED SHARE APPLICATION MONIES IN THE ASSESSEE COMPANY AN D ACCORDINGLY PRAYED THAT THE ADDITION HAS BEEN RIGHTLY MADE U/S 68 OF THE ACT. H E 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 T HE ASSESSEE HAS TO PROVE THE SOURCE OF SOURCE OF SHARE APPLICANTS. HE ARGUED THAT IN T HE INSTANT CASE, THE ASSESSEE HAD DULY DISCHARGED ITS COMPLETE ONUS BY FURNISHING THE REQU ISITE DETAILS. IN CASE IF THE LD AO HAS GOT SOME DOUBTS, HE SHOULD HAVE VERIFIED THE SA ME FROM THE AO OF THOSE SHARE APPLICANTS. WE FIND FROM THE PLAIN READING OF SECT ION 68 OF THE ACT, THE 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 FIVE SHARE APPLICANTS. THE NATURE OF RECEIPT TOWARDS SHARE APPLICATION MONEY IS WELL ESTABLISHED FROM THE ENTRIES PASSED IN THE RESPECTI VE BALANCE SHEETS OF THE COMPANIES AS INVESTMENTS. HENCE THE NATURE OF RECEIPT IS PRO VED BY THE 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 T RANSACTIONS AND CREDITWORTHINESS OF SHARE APPLICANTS. IN THE INSTANT CASE, WE FIND TH AT THE IDENTITY OF SHARE APPLICANTS IS PROVED BEYOND DOUBT BY THE ASSESSEE BY FURNISHING T HE NAME, ADDRESS, PAN OF SHARE APPLICANTS TOGETHER WITH THE COPIES OF BALANCE SHEE TS AND INCOME TAX RETURNS . WITH REGARD TO THE CREDITWORTHINESS OF SHARE APPLICANTS, THE LD AO HIMSELF STATES THAT THE 7 ITA NO.741/KOL/2014 VSP STEEL (P) LTD.(FORMERLY M/S TIKMANI METAL (P) LTD.) A.YR.2010-11 7 FIVE SHARE APPLICANTS HAD INVESTED IN ASSESSEE COMP ANYS SHARES BY TAKING MONEY FROM SOME OTHER COMPANIES. HENCE THE SOURCE OF THE SH ARE APPLICANTS FOR MAKING INVESTMENT IN SHARE APPLICATION MONIES OF ASSESSEE COMPANY IS ALSO PROVED. BY THIS, THE CREDITWORTHINESS OF THE SHARE APPLICANTS IS ALS O PROVED BEYOND DOUBT. THIRD INGREDIENT IS GENUINENESS OF THE TRANSACTIONS. WE FIND THAT THE FIVE SHARE APPLICANTS HAD PAID THE MONIES TO THE ASSESSEE COMPANY BY ACCO UNT PAYEE CHEQUES OUT OF SUFFICIENT BANK BALANCES AVAILABLE IN THEIR BANK AC COUNTS, WHICH ARE QUITE EVIDENT FROM THE BANK STATEMENTS ENCLOSED IN THE PAPER 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 RENDERED IN THE CONTEX T OF VALIDITY OF REVISION PROCEEDINGS U/S 263 OF THE ACT AND NOT ON THE MERIT S OF THE CASE. THIS TRIBUNAL IN THAT CASE DECIDED THE VALIDITY OF INVOKING REVISIONARY J URISDICTION 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 ADDI TION PROPOSED TO BE MADE TOWARDS SHARE CAPITAL IN THE FACTS AND CIRCUMSTANCES OF THA T CASE AND NO DECISION WAS RENDERED THEREON ON MERITS OF THE ISSUE. HENCE THE RELIANCE PLACED THEREON BY THE LD DR DOES NOT ADVANCE THE CASE OF THE REVENUE. IN THE INSTAN T CASE, WE FIND THAT THE SHARE APPLICANTS HAVE NOT DENIED THE FACT OF MAKING INVES TMENT IN SHARE APPLICATION MONIES IN ASSESSEE COMPANY, WHICH IS EVIDENT FROM THE FACT THAT THEY HAD CONFIRMED IN WRITING IN RESPONSE TO NOTICE ISSUED U/S 133(6) OF THE ACT WHICH WAS ADMITTEDLY DONE 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 AND THE TRANSACTIONS HEREIN. IN THE INSTANT CASE, THE ASS ESSEE HAD INDEED PROVED THE IDENTITY OF THE SHARE APPLICANTS, CREDITWORTHINESS OF SHARE APP LICANTS AND GENUINENESS OF TRANSACTIONS BEYOND DOUBT. WE FIND THAT THE ENTIRE ADDITION HAS BEEN MADE BY THE LD AO BASED UPON SUSPICION, SURMISES AND CONJECTURES A ND NOT UPON PROPER EVALUATION 8 ITA NO.741/KOL/2014 VSP STEEL (P) LTD.(FORMERLY M/S TIKMANI METAL (P) LTD.) A.YR.2010-11 8 AND APPRAISAL OF THE EVIDENCES AND DOCUMENTS FILED BEFORE HIM. WE PLACE RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN THIS REGARD IN THE CASE OF DH AKESHWARI COTTON MILLS LTD VS CIT REPORTED IN 26 ITR 775 (SC) WHEREIN IT HAS BEEN HELD THAT NO ADDITION CAN BE MADE WITHOUT MATERIAL AND ON MERE S USPICION. 7.1. IN THESE FACTS AND CIRCUMSTANCES, THERE IS N O NEED 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 CITA IN THIS REGARD. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 07.02.2018 SD/- SD/- [N.V. VASUDEVAN] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED : 07.02.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-4(1), KOLKATA, AAYAKAR BHAWAN, P-7, CH OWRINGHEE SQUARE, KOLKATA- 700069. 2. VSP STEEL (P) LTD, (FORMERLY M/S TIKMANI METAL ( P) LTD.), 437, CENTRE POINT, 21, HEMANTA BASU SARANI, 24, B.B. D. BAG, KOLKATA. 3..C.I.T.(A)- , KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S 9 ITA NO.741/KOL/2014 VSP STEEL (P) LTD.(FORMERLY M/S TIKMANI METAL (P) LTD.) A.YR.2010-11 9