M/S IZZY METALS PVT. LTD., JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 75/JPR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9361 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 23-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARNI DAN SINGH JT CIT DHK
• Assessee Lawyers: RAJEEV SOGANI C AS
• Keywords: Unexplained cash credit; Search and seizure; Question of law; Accommodation entries; Onus to prove
• Section: 133(6); 195; 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH B, JAIPUR JH JES'K LH- 'KEKZ] YS[KK LNL; ,O A H JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C. SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA-@ ITA NO. 75/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. M/S. IZZY METALS PVT. LTD., K-3/7,JEEVAN CHAYA, LIC FLATS, SECTOR-6, VIDHYADHAR NAGAR, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 4(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.AAACI 3960 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ROHAN SOGANI & SHRI RAJEEV SOGANI (CAS) JKTLO DH VKSJ LS@ REVENUE BY : SHRI KARNI DAN SINGH (JT. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28.05.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 01/07/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 18.12.2017 OF LD. CIT (A)-2, UDAIPUR FOR THE ASSESSMENT YEAR 2012 -13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. A O IN ADDING A SUM OF RS. 1,14,91,500/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. THE ACTION OF THE LD. CIT (APPEALS) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FAC TS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID A DDITION OF RS. 1,14,91,500/-. 2. THE ASSESSEE CRAVES ITS RIGHT TO ADD, AMEND OR A LTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND EN GAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF COPPER WIRE AND STRIPS . THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.09.2012 DECLARING TOTAL INCOME OF RS. 10,75,533/-. DURING THE SCRUTINY ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSES SEE COMPANY HAS RECEIVED SHARE CAPITAL AT VERY HIGH PREMIUM FROM VARIOUS CON CERNS BASED AT CALCUTTA. THE DETAILS OF THE SHARE APPLICANTS, THEIR ADDRESSES AN D SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE AS REPRODUCED BY THE AO AT PAGE 5 A RE AS UNDER :- S.NO. NAME OF THE SHARE APPLICANT ADDRESS OF SHARE APPLICANT SHARE APPLICATION MONEY 1. AGOMINI COMMERCIAL PVT. LTD. 52, WESTON STREET, KOLKATTA. 1050000/ - 2. BAGDEVI SUPPLIERS PVT. LTD. 52, WESTON STREET, KOLKATTA. 1050000/ - 3. SOLPHONE COMMERCE PVT. LTD. 1, GANESH CHANDRA AVENUE, KOLKATTA 2100000/ - 4. ALFA TIE UP PVT. LTD. 52, WESTON STREET, KOLKATTA. 2100000/ - 5. INDEX TIE UP PVT. LTD. 6 TH FLOOR, ROOM NO. 601, 1 GANESH CHANDRA AVENUE, KOLKATTA 1050000/ - 6. GOODVIEW VINTRADE PVT. LTD. 64, SAKLAT PLACE, 4 TH FLOOR, KOLKATTA 1050000/ - 7. TRISHNA DISTRIBUTORS PVT. LTD. 12, KAPALITOLLA LANE 1050000/ - 8. SITA RAM S - 82, KARTARPURA INDUSTRIAL AREA, 22 GODAM, JAIPUR. 499500/ - 9. UMRAO MAL JAT NEAR PUSHPA COMPLEX, DELHI NH NO. 8, PAWTA. 499500/ - 10. SARVAN SINGH 167, BUS STAND, RAMPURA DABRI, SIKAR ROAD, JAIPUR. 499500/ - 11. ISSUF BHAI 576, SIRSI ROAD, JHOTWARA, JAIPUR. 150000/ - 12. R.N. CHOUDHARY 56, PRIYA NATH GHOSH STREET, KOLKATTA. 150000/ - 3 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. 13. SURESH JANGID RAM NAGAR VISTAR, SODALA, JAIPUR. 243000/ - TO ASCERTAIN THE CREDITWORTHINESS AND IDENTITY OF T HE INVESTORS AND GENUINENESS OF THE TRANSACTION, THE AO ASKED THE ASSESSEE TO PRODU CE THE DIRECTORS OF THE ABOVE COMPANIES FOR EXAMINATION. THE ASSESSEE COULD NOT PRODUCE THE DIRECTORS FOR EXAMINATION. THE AO THEN ISSUED NOTICE UNDER SECTIO N 133(6) AND CALLED INFORMATION FROM THE COMPANIES. THE NOTICES ISSUED UNDER SECTI ON 133(6) IN RESPECT OF THE COMPANIES WERE STATED TO HAVE BEEN RECEIVED BACK UN DELIVERED. THE REPLIES FROM FIVE COMPANIES WERE RECEIVED BY THE A.O. ALONG WITH SOME INFORMATION. THE AO NOTED THAT THE RETURNED INCOME OF THE FIVE COMPANIE S IS VERY LESS IN COMPARISON TO THE INVESTMENT MADE BY THEM IN THE SHARES OF THE AS SESSEE. THUS THE AO HAS DOUBTED THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE AO HAS ALSO EXAMINED THE AUDIT REPORTS OF THOSE FIVE COMPANIES AND FOUND THAT THERE ARE HUGE NON-CURRENT INVESTMENT BY THESE COMPANIES SHOWN IN THE BALANCE SHEETS BUT NOT HAVING ANY INCOME FROM THOSE INVESTMENTS. THUS THE AO OBSERVED THAT THE INVESTMENTS MUST HAVE BEEN MADE WITH THE MOTIVE TO EARN PROFIT BUT WHEN NO INCOME IS EARNED THEN THE SAME CANNOT BE TREATED AS GENUINE INVESTMENT. ACCORDINGLY, THE AO REJECTED THE ASSESSEES EXPLANA TION AND EVIDENCE PRODUCED IN SUPPORT OF THE CLAIM OF PROVING THE IDENTITY AND CR EDITWORTHINESS OF THE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS AND CONSEQUENTL Y MADE THE ADDITION OF THE ENTIRE SHARE APPLICATION MONEY OF RS. 1,14,91,500/- UNDER SECTION 68 OF THE IT ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED AS THE LD. CIT (A) AFTER CONSIDERING THE NO TICE ISSUED BY THE AO UNDER 4 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. SECTION 133(6) RECEIVED BACK UNSERVED HELD THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT THE ASSESSEE RECEIVED SHARE CAPITAL FROM 13 APPLICANTS, OUT OF W HICH 6 ARE INDIVIDUALS AND 7 ARE COMPANIES. THE LD. A/R HAS REFERRED TO THE ASSESSME NT ORDER AND SUBMITTED THAT THOUGH THE AO HAS MENTIONED THAT THE NOTICES ISSUED UNDER SECTION 133(6) WERE RECEIVED BACK UNSERVED, HOWEVER, NO DETAILS OF DATE OF NOTICE AND THE PARTIES TO WHOM THE NOTICES WERE ISSUED AND RECEIVED BACK ARE GIVEN. A VERY VAGUE STATEMENT HAS BEEN MADE AT PARA 6 OF THE ORDER. THE LD. CIT (A) HAS GIVEN THE DETAILS OF THE NOTICES ISSUED BY THE AO AND ALSO REPRODUCED THE CO PIES OF THE RETURNED ENVELOPES IN THE IMPUGNED ORDER. HOWEVER, ALL THESE FACTS AND RECORDS WERE NOT CONFRONTED WITH THE ASSESSEE EITHER DURING THE ASSESSMENT PROC EEDINGS OR DURING THE APPELLATE PROCEEDINGS. THE LD. A/R HAS FURTHER POINTED OUT TH AT THE AO HAS GIVEN THE DETAILS OF THE SHARE APPLICANTS WITH THEIR ADDRESSES AS PROVID ED BY THE ASSESSEE AT PAGE 5 WHEREAS THE NOTICES WERE ISSUED AT WRONG ADDRESS. H E HAS REFERRED TO THE NOTICES ISSUED TO M/S. GOODVIEW VINTRADE PVT. LTD. WHEREIN THE ADDRESS WRITTEN ON THE ENVELOPE IS A WRONG ADDRESS AT : 64, SAKLAT PLACE, 4 TH FLOOR, KOLKATA-700072 WHEREAS THE CORRECT ADDRESS AS PROVIDED BY THE ASSESSEE IS : 6A, 4 TH FLOOR, SAKLAT PLACE, KOLKATA-700072. THE LD. A/R HAS REFERRED TO PAGE N O. 28 OF THE PAPER BOOK TO SHOW THAT THE CORRECT ADDRESS AS GIVEN BY THE ASSESSEE I S DIFFERENT. THE ASSESSEE WAS VERY MUCH AVAILABLE WITH THE AO AS PER THE ITR OF T HE SAID COMPANY. HOWEVER, THE AO HAS ISSUED THE NOTICE AT WRONG ADDRESS. SIMILAR LY, IN CASE OF M/S. TRISHNA 5 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. DISTRIBUTORS PRIVATE LIMITED, THE AO ISSUED NOTICE AT THE OLD ADDRESS WHEREAS THE SAID COMPANY CHANGED THE ADDRESS AS PER THE RECORD AVAILABLE WITH THE REGISTRAR OF COMPANIES, MINISTRY OF CORPORATE AFFAIRS. HE HAS R EFERRED TO THE SNAPSHOT OF MINISTRY OF CORPORATE AFFAIRS WHEREIN THE SAID COMP ANY HAS FILED FORM NO. 18 FOR CHANGE OF REGISTERED OFFICE. THUS THE CHANGE OF AD DRESS IS VERY MUCH AVAILABLE IN PUBLIC DOMAIN AND PARTICULARLY AT THE WEBSITE OF MI NISTRY OF CORPORATE AFFAIRS. HENCE, THE LD. A/R HAS CONTENDED THAT DUE TO THIS INCORREC T ADDRESS, THE NOTICES WERE RECEIVED BACK UNSERVED. FURTHER, THE AO HIMSELF HA S STATED IN THE ASSESSMENT ORDER THAT THE REMAINING FIVE COMPANIES HAVE FILED THE DE TAILS IN RESPONSE TO THE NOTICE UNDER SECTION 133(6). AS REGARDS THE INDIVIDUAL SH ARE APPLICANTS, THE LD. A/R HAS SUBMITTED THAT THE NOTICE ISSUED TO THREE SHARE APP LICANTS, NAMELY, SURESH JANGID, ISSUF BHAI AND SITA RAM WERE RECEIVED BACK UNSERVED AS COMPLETE ADDRESS WAS NOT MENTIONED IN THE LETTER. HOWEVER, THE ASSESSEE PROD UCED THE AFFIDAVITS OF ALL THESE INDIVIDUAL SHARE APPLICANTS AND, THEREFORE, THEIR I DENTITY AND CONFIRMATION HAS BEEN PRODUCED BY THE ASSESSEE. THE LD. A/R HAS THUS CONT ENDED THAT WHEN THE ASSESSEE PRODUCED ALL THE DOCUMENTARY EVIDENCE TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THESE SHARE APPLICANTS AS WELL AS GENUINENESS OF TH E TRANSACTIONS, THEN TREATING THE SHARE CAPITAL RECEIVED BY THE ASSESSEE AS UNEXPLAIN ED CREDIT ONLY ON THE BASIS OF SOME DOUBT AND WITHOUT HAVING ANY CONTRARY MATERIAL OR RECORD IS NOT JUSTIFIED. HE HAS REFERRED TO THE LETTERS FILED BY THE INDIVIDUAL SHARE APPLICANTS AND SUBMITTED THAT ALL THESE SIX INDIVIDUALS HAVE CONFIRMED THE INVEST MENT IN THE SHARES OF THE ASSESSEE COMPANY. THE AO HAS NOT CONDUCTED ANY ENQUIRY. TH E TRANSACTIONS ARE THROUGH BANKING CHANNEL, THEREFORE, THE GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED 6 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. UNTIL AND UNLESS SOMETHING CONTRARY IS PROVED OR BR OUGHT ON RECORD. HE HAS FURTHER SUBMITTED THAT THE LD. CIT (A) HAS CONFIRMED THE AD DITION BY RELYING UPON VARIOUS DECISIONS. HOWEVER, THOSE DECISIONS ARE NOT APPLIC ABLE IN THE CASE OF THE ASSESSEE WHEN THERE IS NO MATERIAL WITH THE AO TO SHOW THAT SHARE CAPITAL RECEIVED BY THE ASSESSEE IS BOGUS TRANSACTION. THE AO HAS MADE THE ADDITION ONLY ON THE BASIS OF SUSPICION AND NOT ON THE BASIS OF ANY EVIDENCE. IN THE DECISIONS RELIED UPON BY THE LD. CIT (A), THERE WERE INVESTIGATIONS AND INVESTIG ATION REPORTS WERE AVAILABLE WITH THE AO TO SHOW THAT THOSE SHARE APPLICANTS WERE ENT RY PROVIDERS WHEREAS IN THE CASE OF THE ASSESSEE NONE OF THE SHARE APPLICANTS WERE F OUND TO BE ENTRY PROVIDERS. HE HAS FURTHER CONTENDED THAT THE AO HAS MADE THE ADDI TION ON THE GROUND THAT THE DETAILS OF FIVE COMPANIES SHOW THAT THEY HAVE VERY LESS OR MEAGER INCOME DECLARED IN THE RETURN OF INCOME AND FURTHER NO INCOME IS SH OWN FROM THE HUGE INVESTMENTS AS PER THEIR BALANCE SHEETS. THE LD. A/R HAS SUBMI TTED THAT WHEN THERE IS NO MATERIAL OR ADMISSION BY THE SHAREHOLDERS THAT THE TRANSACTIONS ARE NOT GENUINE, THEN THE ADDITION MADE MERELY ON THE SUSPICION IS N OT JUSTIFIED. HE HAS RELIED UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT I N CASE OF CIT VS. ARL INFRATECH LTD, 394 ITR 383 (RAJ.) AND SUBMITTED THAT THE HONBLE H IGH COURT HAS UPHELD THE FINDING OF THIS TRIBUNAL WHEREIN THE CLAIM OF THE ASSESSEE WAS FOUND TO BE GENUINE WHEN MODE OF PAYMENT HAS BEEN EXPLAINED AND NO DIRECT OR INDIRECT RELATIONSHIP BETWEEN ASSESSEE AND SHARE APPLICANTS WERE FOUND. HE HAS AL SO RELIED UPON THE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS . BHAVAL SYNTHETICS, 217 TAXMAN 23 (RAJ.) AND IN CASE OF CIT VS. SUPERTECH DIAMOND TOOLS (P) LTD., 44 TAXMANN.COM 460 (RAJ.). THE LD. A/R HAS THEN RELIED UPON THE D ECISION OF HONBLE ALLAHABAD HIGH 7 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. COURT IN CASE OF CIT VS. VACMET PACKAGING (INDIA) P VT. LTD., 367 ITR 217 (ALL.) AND SUBMITTED THAT THE HONBLE HIGH COURT HAS UPHELD TH E FINDING OF THE TRIBUNAL BASED ON THE DOCUMENTARY EVIDENCE TO PROVE THE GENUINENES S OF THE SHARE APPLICANT, SHARE APPLICATION MONEY CONSISTING OF SHARE APPLICATION F ORM, COPIES OF BANK ACCOUNTS OF THE SHARE APPLICANTS, COPIES OF INCOME TAX RETURN O F SHARE APPLICANTS, BALANCE SHEETS AND COPIES OF SHARE ALLOTMENT CERTIFICATES. THE AS SESSEE HAS ALSO PRODUCED ALL THE RELEVANT DOCUMENTARY EVIDENCE INCLUDING PAN AND RET URN OF INCOME OF THE SHARE APPLICANTS, COPIES OF BANK ACCOUNTS AND THEIR FINAN CIAL STATEMENTS. HE HAS ALSO RELIED UPON THE FOLLOWING DECISIONS :- SOM TOBACCO INDIA LTD. 42 TAXMANN.COM 310 (ALL.) CIT VS. DIVINE LEASING & FINANCE LTD. 299 ITR 268 (DELHI) CIT VS. ORCHID INDUSTRIES PVT. LTD. 397 ITR 136 (BOMBAY) BHARTI SYNTEX LTD. VS. DCIT 137 TTJ 82 (JAIPUR) VRINDAVAN FARMS PVT. LTD. ITA NO. 71, 72, 84/2015 DATED 12.08.2015.(DELHI H C) CIT VS. M/S. DATAWARE PVT. LTD. GA NO. 2856 OF 2011 (CALCUTTA HC). 4. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T THE AO HAS CONDUCTED AN ENQUIRY AND ISSUED NOTICES UNDER SECTION 133(6) TO ALL THE SHARE APPLICANTS, HOWEVER, THESE NOTICES WERE RECEIVED BACK UNSERVED. FURTHER THE REPLIES FROM THE SHARE APPLICANTS WERE RECEIVED ON PLAIN PAPER, WHICH SUGG EST THAT THE ASSESSEE HAS MANAGED THOSE REPLIES. HE HAS FURTHER SUBMITTED THA T THE AO ON EXAMINATION OF THE 8 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. FINANCIAL RECORDS OF THE SHARE APPLICANTS FOUND THA T THE INVESTMENTS WERE CHURNING FROM YEAR TO YEAR BUT WITHOUT ANY INCOME. THEREFOR E, THOSE COMPANIES ARE NOT DOING ANY BUSINESS BUT SHOWING ONLY PAPER TRANSACTI ONS. THE LD. D/R HAS FURTHER POINTED OUT THAT IN THE PROFIT & LOSS ACCOUNT THESE COMPANIES HAVE NOT CLAIMED ANY RENT FOR OFFICE, THEREFORE, THE ADDRESSES WERE NOT GENUINE. THE PREMIUM RECEIVED BY THE ASSESSEE OF RS. 290/- PER SHARE OF FACE VALU E OF RS. 10/- IS NOT JUSTIFIED HAVING REGARD TO THE FINANCIAL POSITION OF THE ASSE SSEE. THE AO ASKED THE ASSESSEE TO PRODUCE THE DIRECTORS TO VERIFY THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS AND GENUINENESS OF THE TRANSACTIONS. HOWEVER, THE A SSESSEE HAS FAILED TO PRODUCE THE DIRECTORS. HE HAS REFERRED TO THE FINDING OF TH E LD. CIT (A) AND SUBMITTED THAT THE LD. CIT (A) HAS RELIED UPON THE DECISION OF AGRA BE NCH OF THE TRIBUNAL IN THE CASE OF SUMAN GUPTA VS. ITO, 138 ITD 153 (AGRA). HE HAS RE LIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. NOVA PR OMOTERS AND FINLEASE PVT. LTD., 342 ITR 169 (DELHI). HE HAS ALSO RELIED UPON THE DE CISION OF HONBLE SUPREME COURT IN CASE OF PCIT VS. NRA IRON & STEEL PVT. LTD., 262 TAXMAN 74 (SC). THUS THE LD. D/R HAS SUBMITTED THAT WHEN THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPL ICANTS AS WELL AS GENUINENESS OF THE TRANSACTION, THEN IN VIEW OF THE VARIOUS DECISI ONS AS REFERRED BY THE LD. CIT (A), THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD . CIT (A) IS JUSTIFIED. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTION, IDENTITY AND CREDITWORTHINESS OF THE SHAREHOLDERS, THE AO ISSUED NOTICES UNDER SECTION 133(6) ON 9 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. 18.09.2014. THE RELEVANT PORTION OF THE ASSESSMENT ORDER ON THIS POINT IN PARA 3(II)(A) AT PAGE 6 IS AS UNDER :- 3(II). ISSUES RELATED TO INVESTMENT MADE BY ABOVE COMPANIES, FOLLOWING FACTS/ISSUES HAS BEEN NOTICED :- (A) FOR VERIFICATION OF GENUINENESS OF TRANSACTION, ID ENTITY AND CREDIT WORTHINESS OF SHAREHOLDER, THIS OFFICE HAD SENT LET TER AS ON 18.09.2014 UNDER SECTION 133(6) OF I.T. ACT 1961 TO FOLLOWING PERSONS WHICH RETURN BACK WITH REMARK THAT NO SUC H COMPANY/PERSON ON THIS ADDRESS. THE AO HAS STATED THAT THE LETTERS SENT WERE RETURN ED BACK WITH THE POSTAL REMARK NO SUCH COMPANY OR PERSON ON THIS ADDRESS. HOWEV ER, IN THE ENTIRE ASSESSMENT ORDER, THE AO HAS NOT MENTIONED HOW MANY NOTICES IS SUED UNDER SECTION 133(6) WERE RETURNED BACK. THE AO HAS ALSO NOTED THAT REP LIES FROM FIVE COMPANIES WERE RECEIVED, THE DETAILS OF THE SAME WERE REPRODUCED B Y THE AO AS UNDER :- S.NO. NAME OF INVESTOR COMPANY RETURN IN COME IN AY 2012-13 RETURN INCOME IN AY 2011-12 1. INDEX TIE UP PVT. LTD. 21800/ - 18,295/ - 2. ALFA TIE UP PVT. LTD. 37416/ - 41,227/ - 3. BEGDEVI SUPPLIERS PVT. LTD. 17476/ - 27,207/ - 4. AGOMONI COMMERCIAL PVT. LTD. 24,215/ - 27,224/ - 5. DOLPHIN COMMERCE PVT. LTD. 16,486/ - 13,610/ - THUS THE AO HIMSELF HAS TAKEN NOTE OF THE FACT THAT ALL THESE COMPANIES HAVE FILED THEIR RETURNS OF INCOME AND THE AO HAS CONSIDERED T HE RETURNED INCOME FOR THE 10 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. ASSESSMENT YEARS 2011-12 AND 2012-13 WHICH ITSELF P ROVES THE IDENTITY OF THESE SHARE APPLICANTS. THE AO FURTHER VERIFIED THE AUDI T REPORTS AS WELL AS FINANCIAL STATEMENTS AND OBSERVED AT PAGE 7 PARA (E)(I) TO (V ) AS UNDER :- (E) ON PERUSAL OF AUDIT REPORTS AS WELL AS FINANC IAL STATEMENTS FURNISHED BY ABOVE FIVE COMPANIES, FOLLOWING DISCRE PANCIES CAME INTO THE NOTICE REGARDING TO NON CURRENT INVESTMENTS, TH ESE ARE AS UNDER :- (I) THE COMPANY M/S. INDEX TIE-UP PRIVATE LIMITED HAD N ON-CURRENT INVESTMENTS WORTH RS. 6,81,52,000/- AS ON 31.03.011 AND WORTH RS. 3,53,40,000/- AS ON 31.03.2012. IT MEANS THAT T HE COMPANY HAD REDUCED INVESTMENTS APPROXIMATELY RS. 3.28 CROR ES TILL 31.03.2012. (II) THE COMPANY M/S. ALFA TIE-UP PRIVATE LIMITED HAD NO N-CURRENT INVESTMENTS WORTH RS. 1,25,50,000/- AS ON 31.03.201 1 AND WORTH RS. 1,21,00,000/- AS ON 31.03.2012. IT MEANS THAT THE COMPANY HAD REDUCED INVESTMENTS APPROXIMATELY RS. 4 .50 LAKH TILL 31.03.2012. (III) THE COMPANY M/S. BADDEVI SUPPLIERS PVT. LTD. HAD NO N-CURRENT INVESTMENTS WORTH RS. 1,56,00,000/- AS ON 31.03.201 1 AND WORTH RS. 2,11,00,000/- AS ON 31.03.2012. IT MEANS THAT THE COMPANY HAD INCREASE NON CURRENT INVESTMENTS APPROX IMATELY RS. 55.00 LAKH TILL 31.03.2012. (IV) THE COMPANY M/S. AGOMONI COMMERCIAL PVT. LTD. HAD N ON CURRENT INVESTMENTS WORTH RS. 95,27,000/- AS ON 31. 03.2011 AND WORTH RS. 3,20,87,000/- AS ON 31.03.2012. IT ME ANS THAT THE COMPANY HAD INCREASE NON CURRENT INVESTMENTS APPROXIMATELY RS. 2.26 CRORE LAKH TILL 31.03.2012. (V) THE COMPANY M/S. DOLPHIN COMMERCE PRIVATE LIMITED H AD NON- CURRENT INVESTMENTS WORTH RS. 4,95,28,000/- AS ON 3 1.03.2011 AND WORTH RS. 2,97,70,000/- AS ON 31.03.2012. IT ME ANS THAT THE COMPANY HAD REDUCED INVESTMENTS BY APPROXIMATEL Y RS. 1.98 CRORE TILL 31.03.2012. THUS THE AO HAS CONSIDERED THE NON CURRENT INVESTME NT OF THESE FIVE COMPANIES FROM THE FINANCIAL STATEMENTS AND SINCE THESE COMPA NIES HAVE NOT SHOWN A 11 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. REASONABLE INCOME FROM THE INVESTMENTS, THEREFORE, THE AO DOUBTED THE INVESTMENTS SHOWN BY THESE COMPANIES IN THEIR BALANCE SHEETS. AS REGARDS THE REMAINING TWO COMPANIES, WE FIND THAT THE LD. CIT (A) HAS REPRODU CED THE POSTAL ENVELOPES IN WHICH THE NOTICES WERE ISSUED BY THE AO AT PAGES 29 AND 33 OF THE IMPUGNED ORDER. IT IS MANIFEST FROM THE ADDRESS WRITTEN ON THE ENVE LOPE THAT IN CASE OF M/S. GOOD VIEW VINTRADE PVT. LTD., THE AO HAS NOTED DOWN WRON G ADDRESS OF THE SAID COMPANY EVEN IN THE DETAILS REPRODUCED IN THE ASSESSMENT OR DER. THEREFORE, THE CORRECT ADDRESS OF THE SAID COMPANY BEING 6A, 4 TH FLOOR, SAKLAT PLACE, KOLKATA 700072 HAS BEEN WRITTEN ON THE ENVELOPE AS 64, SAKLAT PLACE, 4 TH FLOOR, KOLKATA, WEST BENGAL 700072. ONCE THE WRONG ADDRESS IS MENTIONED BY THE AO ON THE ENVELOPE, THEN THE NON DELIVERY OF THE SAID NOTICE CANNOT BE ATTRIBUTE D TO THE ASSESSEE. WE FURTHER NOTE THAT IN THE RECORD OF THE SAID COMPANY AT PAGE S 27 TO 46 OF THE PAPER BOOK, THE CORRECT ADDRESS IS GIVEN ON ALL THE RECORDS INCLUDI NG THE ITR, THEIR FINANCIAL STATEMENTS, AUDIT REPORT, BANK STATEMENTS. THE AO HIMSELF HAS ISSUED THE NOTICE AT WRONG ADDRESS THEN THE ASSESSEE CANNOT BE HELD LIAB LE FOR NON SERVICE OF THE SAID NOTICE. SIMILARLY, IN CASE OF M/S. TRISHNA DISTRIBU TORS PVT. LTD., THE NOTICE WAS ISSUED AT THE OLD ADDRESS WHEREAS THE SAID COMPANY HAD ALR EADY SHIFTED ITS REGISTERED OFFICE ADDRESS AS PER THE RECORD OF THE MINISTRY OF CORPOR ATE AFFAIRS AND REGISTRAR OF COMPANIES. THE LD. A/R OF THE ASSESSEE HAS PRODUCE D SNAPSHOT OF FORM 18 AVAILABLE AT THE WEBSITE OF THE MINISTRY OF CORPORA TE AFFAIRS WHICH SHOWS THAT THE SAID COMPANY SHIFTED THE OFFICE ADDRESS WITH EFFECT FROM 23 RD DECEMBER, 2013 WHEREAS THE AO ISSUED THE NOTICE AT THE OLD ADDRESS . THUS DUE TO THE WRONG ADDRESS, THE NOTICE ISSUED TO THE SAID COMPANY COUL D NOT BE RECEIVED. APART FROM 12 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. THESE TWO RETURNED NOTICES, THE LD. CIT (A) HAS NOT REFERRED TO ANY OTHER NOTICES ISSUED UNDER SECTION 133(6) TO THE COMPANIES, BUT A LL OTHER RETURNED NOTICES WERE REFERRED IN RESPECT OF THE INDIVIDUALS. WE FIND FR OM THE RETURNED ENVELOPES AS PRODUCED BY THE LD. CIT (A) AT PAGES 30, 31, 34, 35 AND 36 THAT THE REASONS GIVEN BY THE POSTAL AUTHORITIES IS INCOMPLETE ADDRESS. T HUS IT IS CLEAR THAT DUE TO WRONG/INCOMPLETE ADDRESS, THE NOTICES ISSUED BY THE AO TO SOME OF THE SHARE APPLICANTS WERE RECEIVED UNSERVED. ONCE THE REASON OF NON DELIVERY OF THE NOTICES WAS KNOWN TO THE AO, THEN FURTHER STEPS COULD HAVE BEEN TAKEN BY THE AO TO CONDUCT A PROPER ENQUIRY. INSTEAD OF TAKING FURTHE R STEPS, THE AO ASKED THE ASSESSEE TO PRODUCE ALL THE SHARE APPLICANTS. THE ASSESSEE SUBMITTED THE LETTERS FROM ALL SIX INDIVIDUAL SHARE APPLICANTS ALONG WITH THE AFFIDAVITS WHEREIN THEY HAVE CONFIRMED THE INVESTMENT IN THE SHARES OF THE ASSES SEE. ONCE THE ASSESSEE HAS PRODUCED THE LETTERS AND AFFIDAVITS, THEN THE PRIMA RY ONUS ON THE ASSESSEE HAS BEEN DISCHARGED. IN RESPECT OF THESE COMPANIES, THE AO HAS HIMSELF ACCEPTED THAT THEY HAVE FILED ALL THE RELEVANT DETAILS, ITRS, FINANCIA L STATEMENTS, BANK STATEMENTS AND REPLIES TO THE NOTICES ISSUED BY THE AO UNDER SECTI ON 133(6). ONCE ALL THESE DOCUMENTARY EVIDENCES WERE PRODUCED BEFORE THE AO A ND THE GENUINENESS OF THESE DOCUMENTS WERE NOT DOUBTED BY THE AO, THEN THE ASSE SSEE HAS PROVED THE IDENTITY OF THE SHARE APPLICANTS WHICH IS OTHERWISE CANNOT B E DISPUTED WHEN THESE COMPANIES ARE TAX ASSESSEES AND THEIR STATUS IS ALS O AVAILABLE ON THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS/ROC. FURTHER, WHEN T HESE COMPANIES ARE ASSESSED TO TAX, THEN MERELY BECAUSE THEY HAVE DECLARED VERY LE SS INCOME IN THE RETURN OF INCOME CANNOT BE A REASON FOR DOUBTING THEIR CREDIT WORTHINESS. THE SOURCE OF 13 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. INVESTMENT WAS ALREADY AVAILABLE WITH THE AO FROM T HE FINANCIAL STATEMENTS AS WELL AS THE BANK ACCOUNTS OF THESE COMPANIES. WE FURTHE R NOTE THAT IN THE CASE IN HAND, THE AO HAS MADE THE ADDITION ONLY ON THE BASIS OF S USPICION AND NOT ON THE BASIS OF ANY EVIDENCE OR OTHER MATERIAL TO SHOW THAT THESE C OMPANIES ARE EITHER INDULGED IN PROVIDING ACCOMMODATION ENTRIES OR HAVING NO SOURCE OF INVESTMENT. THE LD. CIT (A) WHILE CONFIRMING THE ADDITION HAS PLACED RELIANCE O N THE VARIOUS DECISIONS. HOWEVER, WE FIND THAT IN ALL THOSE DECISIONS THERE WERE SOME EVIDENCE AND MATERIAL WITH THE AO BEING THE REPORT OF THE INVESTIGATION WING TO SH OW THAT THE SHARE APPLICANTS IN THOSE CASES WERE FOUND TO BE ACCOMMODATION ENTRY PR OVIDERS. HOWEVER, IN THE CASE IN HAND, THE AO HAS NOT BROUGHT ANY MATERIAL ON REC ORD TO SHOW EITHER THESE SHARE APPLICANT COMPANIES ARE PROVIDING ACCOMMODATION ENT RIES OR THEY ARE BOGUS PAPER COMPANIES. THE AO HAS ONLY EXPRESSED HIS DOUBT ABO UT THE GENUINENESS BUT THIS IS ONLY A SUSPICION WITHOUT ANY BASIS. WHEN THE ASSES SEE HAS PRODUCED ALL THE RELEVANT DOCUMENTS WHICH INCLUDES PAN, ITRS, FINANCIAL STATE MENTS, AUDIT REPORT, BANK ACCOUNTS, SHARE APPLICATIONS ETC. THEN IN THE ABSEN CE OF ANY CONTRARY MATERIAL TO CONTROVERT OR DISPROVE THE DOCUMENTARY EVIDENCE PRO DUCED BY THE ASSESSEE, THE ADDITION MADE BY THE AO UNDER SECTION 68 IS NOT JUS TIFIED. WE FURTHER NOTE THAT EVEN THE DECISION RELIED UPON BY THE LD. D/R IN THE CASE OF PCIT VS. NRA IRON & STEEL PVT. LTD. (SUPRA) THE FACTS WHICH WERE CONSIDERED B Y THE HONBLE SUPREME COURT ARE DISTINGUISHABLE AS THE AO CONDUCTED THE ENQUIRY IN RESPECT OF ALL THE SHARE APPLICANTS AS IT IS REFERRED IN PARA 12 OF THE SAID DECISION, WHEREAS IN THE CASE IN HAND, THE AO RECEIVED THE REPLIES AND DOCUMENTARY E VIDENCE IN RESPONSE TO NOTICES 14 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. UNDER SECTION 133(6). THE HONBLE JURISDICTIONAL H IGH COURT IN CASE OF CIT VS. ARL INFRATECH LTD. (SUPRA) HAS CONSIDERED THIS ISSUE IN PARA 5 TO 10 AS UNDER :- 5. TAKING INTO CONSIDERATION THE AFORESAID FACTS, THE TRIBUNAL IN PARA 2.6, OBSERVED AS UNDER : 'ADVERTING TO THE FACTS OF THE GIVEN CASE, WE ARE O F THE CONSIDERED OPINION THAT ALL THE SHARES APPLICANTS STAND IDENTI FIED. THE ASSESSEE HAS PROVIDED PANS OF THE SHARE APPLICATIONS. THE MODE O F PAYMENT HAS ALSO BEEN MADE EXPLAINED. THERE IS NO DIRECT OR IND IRECT RELATION BETWEEN THE ASSESSEE-COMPANY AND THE SHARE APPLICAN TS. THE STATEMENTS RECORDED DURING SURVEY HAS GOT NO EVIDEN TIARY VALUE AND THE LAW IS VERY MUCH SETTLED ON THIS ISSUE. IN ANY CASE , EVEN UNDER THE PROVISIONS OF SECTION 68 OF THE ACT, THE ASSESSEE C ANNOT BE FORCED TO PROVE THE SOURCE OF THE SOURCE. THE LAW ON THIS SUB JECT IS ALSO SETTLED BY NUMEROUS DECISIONS. THE ALLEGED REPORT OF THE IN SPECTOR OF THE DEPARTMENT WHO IS STATED TO HAVE VISITED AT THE GIV EN ADDRESS OF THE SHARE APPLICANTS WAS NEVER PUT OR CONFRONTED TO THE ASSESSEE. THE CUMULATIVE EFFECTS OF THESE REASONS IS THAT THE IMP UGNED ADDITION CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE-COMPAN Y. ACCORDINGLY, WE ORDER TO DELETE THE ENTIRE ADDITIONS AND ALLOW T HE APPEAL OF THE ASSESSEE.' 6. IN OUR VIEW, THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT V. LOVELY EXPORTS (P.) LTD . [2009] 319 ITR (ST.) 5 (SC) HELD AS UNDER : 'CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 ? WE F IND NO MERIT IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON T HAT IF THE SHARE- APPLICATION MONEY IS RECEIVED BY THE ASSESSEE-COMPA NY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AS SESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN TH EIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT.' 7. COUNSEL FOR THE RESPONDENTS RELIED UPON THE FOLLOW ING DECISIONS : ( I ) CIT V. ORISSA CORPN. (P.) LTD [1986] 159 ITR 78/25 TAXMAN 80F (SC) , ( II ) SHREE BARKHA SYNTHETICS LTD . V. ASSTT.CIT [2006] 283 ITR 377/155 TAXMAN 289 (RAJ.) , ( III ) CIT V. STELLER INVESTMENT LTD . [1991] 192 ITR 287/59 TAXMAN 568 (DELHI) , ( IV ) CIT V. STELLER INVESTMENT LTD . [2001] 251 ITR 263/115 TAXMAN 99 (SC) , ( V ) CIT V. DIVINE LEASING & FINANCE LTD . [2008] 299 ITR 268/[2007] 158 TAXMAN 440 (DELHI) , ( VI ) CIT V. FIRST POINT FINANCE LTD . [2006] 286 ITR 477 (RAJ.) AND ( VII ) CIT V. GP INTERNATIONAL LTD . [2010] 325 ITR 25/186 TAXMAN 229 (PUNJ. & HAR.) . 8. TAKING INTO CONSIDERATION THE OBSERVATIONS RELIED ON BY THE RESPONDENTS AND THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT V. VALUE CAPITAL 15 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. SERVICES (P). LTD . [2008] 307 ITR 334 MORE PARTICULARLY, THE OBSERVATIONS WHICH READS AS UNDER : 'THE COURT IN THAT CASE HELD THAT THE ADDITIONAL BU RDEN WAS ON THE DEPARTMENT TO SHOW THAT EVEN IF SHARE APPLICANTS DI D NOT HAVE THE MEANS TO MAKE INVESTMENT, THE INVESTMENT MADE BY TH EM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. IN THE ABSENCE OF SUCH FINDINGS, ADDITION COULD NOT BE MADE IN THE IN COME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT.' 9. WE HAVE HEARD MR. ANUROOP SINGHI COUNSEL FOR THE A PPELLANT AND MR. NARESH GUPTA COUNSEL FOR THE RESPONDENT. 10. TAKING INTO CONSIDERATION THE OBSERVATIONS MADE BY THE TWIN DECISIONS AS OBSERVED BY THE TRIBUNAL THAT ALL THE SHARE APPLICA NTS STAND IDENTIFIED. THE ASSESSEE HAS PROVIDED PERMANENT ACCOUNT NUMBERS OF THE SHARE APPLICANTS. THE MODE OF PAYMENT HAS ALSO BEEN EXPLAINED. THERE IS N O DIRECT OR INDIRECT RELATION BETWEEN THE ASSESSEE-COMPANY AND THE SHARE APPLICANTS. THE STATEMENTS RECORDED DURING SURVEY HAS GOT NO EVIDEN TIARY VALUE WITHOUT ANY SUPPORTING DOCUMENTS OR EVIDENCE. WE FIND THAT A SIMILAR VIEW HAS BEEN TAKEN BY THE H ONBLE JURISDICTIONAL HIGH COURT IN CASE OF PCIT VS. M/S. SHUBH MINES PVT. LTD. IN D B IT APPEAL NO. 96/2015 DATED 03.05.2016 AS WELL AS IN CASE OF PCIT VS. DHANLAXMI EQUIPMENT PVT. LTD. IN DB IT APPEAL NO. 189/2016 DATED 23.10.2017. THE HONBLE ALLAHABAD HIGH COURT IN CASE OF CIT VS. VACMET PACKAGING (INDIA) P. LTD. (SUPRA) HAS HELD IN PARA 7 & 8 AS UNDER :- 7. RELIANCE HAS BEEN PLACED ON BEHALF OF THE ASSESSEE ON THE JUDGMENT OF THE SUPREME COURT IN CIT V. LOVELY EXPORTS (P) LTD. [2008] 216 CTR 195 . WHILE DISMISSING A SPECIAL LEAVE PETITION AGAINST THE JUD GMENT OF THE DELHI HIGH COURT IN AN INCOME TAX APPEAL, THE SUPREME COURT OB SERVED THAT IF THE SHARE APPLICATION MONEY HAD BEEN RECEIVED BY THE ASSESSEE FROM BOGUS SHARE HOLDERS, WHOSE NAMES WERE FURNISHED TO THE ASSESSIN G OFFICER, THE DEPARTMENT WAS FREE TO REOPEN THEIR ASSESSMENT PROCEEDINGS IN ACCORDANCE WITH LAW. THIS DECISION HAS BEEN CONSIDERED IN A SUBSEQUENT JUDGME NT OF THE DELHI HIGH COURT IN CIT V. NOVA PROMOTERS & FINLEASE (P) LTD. [2012] 342 ITR 169/206 TAXMAN 207/18 TAXMANN.COM 217 . APPLYING THE DICTUM IN LOVELY EXPORTS (P.) 16 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. LTD.'S CASE ( SUPRA ), THE DIVISION BENCH OF THE DELHI HIGH COURT OBSER VED AS FOLLOWS: 'SO UNDERSTOOD, IT WILL BE SEEN THAT WHERE THE COMP LETE PARTICULARS OF THE SHARE APPLICANTS SUCH AS THEIR NAMES AND ADDRES SES, INCOME TAX FILE NUMBERS, THEIR CREDITWORTHINESS, SHARE APPLICATION FORMS AND SHARE HOLDERS' REGISTER, SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POS SESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPO N, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY UNDER SEC.6 8 AND THE REMEDY OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLIC ANTS IN ACCORDANCE WITH LAW. WE ARE AFRAID THAT WE CANNOT APPLY THE RA TIO TO A CASE, SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHES THE PARTICUL ARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF -CONFESSED 'ACCOMMODATION ENTRY PROVIDERS', WHOSE BUSINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT THEIR U NACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION, AND THE A SSESSEE. THE RATIO IS INAPPLICABLE TO A CASE, AGAIN SUCH AS THE PRESEN T ONE, WHERE THE INVOLVEMENT OF THE ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDICATED BY VALID MATERIAL MADE AVAILABLE TO THE A SSESSING OFFICER AS A RESULT OF INVESTIGATIONS CARRIED OUT BY THE REVEN UE AUTHORITIES INTO THE ACTIVITIES OF SUCH 'ENTRY PROVIDERS'. THE EXISTENCE WITH THE ASSESSING OFFICER OF MATERIAL SHOWING THAT THE SHARE SUBSCRIP TIONS WERE COLLECTED AS PART OF A PRE-MEDITATED PLAN - A SMOKESCREEN - C ONCEIVED AND EXECUTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABILITY OF THE RATIO. IN OUR UNDERSTANDIN G, THE RATIO IS ATTRACTED TO A CASE WHERE IT IS A SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON HIM UNDER SECTION 68 TO PROVE AND ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GENUINENESS OF THE TRANSACTION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COME FORWARD TO MERELY REJECT THE SAME, WITHOUT CARRYING OUT ANY VE RIFICATION OR ENQUIRY INTO THE MATERIAL PLACED BEFORE HIM. THE CA SE BEFORE US DOES NOT FALL UNDER THIS CATEGORY AND IT WOULD BE A TRAV ESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY.' 8. IN THE PRESENT CASE THE ASSESSEE HAD DISCHARGED TH E ONUS OF ESTABLISHING THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIONS WHICH HAD FORMED THE BASIS OF THE ADDITION THAT WAS MADE UNDE R SECTION 68. ULTIMATELY, WHETHER THE DOCUMENTARY MATERIALS WHICH HAD BEEN PR ODUCED BY THE ASSESSEE WERE SUFFICIENT TO DISPLACE THE ONUS IS A MATTER TO BE DECIDED UPON THE FACTS OF EACH CASE. BOTH THE CIT(A) AND THE TRIBUNAL HAVING HELD THAT THE ASSESSEE HAD DULY DISCHARGED THE ONUS, IN OUR VIEW NO SUBSTANTIA L QUESTION OF LAW WOULD ARISE. 17 ITA NO. 75/JP/2018. M/S. IZZY METALS PVT. LTD., JAIPUR. ACCORDINGLY, IN VIEW OF A SERIES OF DECISIONS ON TH E POINT, WE FIND THAT THE PRIMARY ONUS ON THE ASSESSEE TO PROVE THE IDENTITY AND CRED ITWORTHINESS OF THE CREDITORS AS WELL AS THE GENUINENESS OF THE TRANSACTIONS STOOD P ROVED. ACCORDINGLY, THE ADDITION MADE BY THE AO UNDER SECTION 68 OF THE IT ACT IS DE LETED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 01/07/20 19. SD/- SD/- ( JES'K LH- 'KEKZ ) ( FOT; IKY JKWO (RAMESH C. SHARMA ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 01/07/2019. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. IZZY METALS PVT. LTD., JAIPU R. 2. THE RESPONDENT THE ITO, WARD 4(2), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 75/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR