ACIT, Patiala V. M/s Vishal Paper Industries Pvt. Ltd., Patiala

ITA 829/CHANDI/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0239 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-02-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 30-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAYANK JAIN
• Assessee Lawyers: MANJIT SINGH
• Keywords: Additional evidence; Assessment record; Onus to prove; Set aside
• Section: 133(6); 195; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B , CHANDIGARH , ! '# $ % & '# , BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.829/CHD/2014 / ASSESSMENT YEAR : 2010-11 THE A.C.I.T., CIRCLE PATIALA. M/S VISHAL PAPER INDUSTRIES PVT. LTD., VILLAGE KHUSROPUR, DISTRICT PATIALA. ./PAN NO: AACCV2149L /ASSESSEE BY : SHRI MANJIT SINGH, SR.DR / REVENUE BY : SHRI MAYANK JAIN ! /DATE OF HEARING : 15.02.2019 '#$% ! /DATE OF PRONOUNCEMENT: 29.03.2019 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER THE PRESENT APPEAL HAS BEEN FILED BY THE |REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PATIALA (IN SHORT CIT(A) DATED 31.7.20 14 PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 2. THE SOLE ISSUE RELATES TO ADDITION MADE OF SHAR E PREMIUM RECEIVED BY THE ASSESSEE DURING THE YEAR AMOUNTING TO RS.93,80,000/- FROM DIFFERENT PARTIES TREATING THE SAME AS UNEXPLAINED BY THE A.O. AND WHICH ADDITION WAS DELETED BY THE CIT(A). 3. BRIEF FACTS RELATING TO THE CASE ARE THAT DURING ASSESSMENT PROCEEDINGS THE A.O. NOTED THAT THE ITA NO.829/CHD/2014 A.Y.2010-11 2 ASSESSEE HAD RECEIVED SHARE PREMIUM OF RS.93,80,000/- FROM NINE PARTIES AS UNDER: SR. NO NAME ADDRESS AMOUNT PAID 1 M/S SHALINI HOLDINGS LTD. C- 4/151, FIRST FLOOR, SECTOR 6, ROHINI. 560000/- 2 M/S NANDAL FINANACE AND LEASING PVT. LTD, C -33, 2 ND FLOOR, PRASHANT VIHAR, NEW DELHI. 1120000/- 3 M/S AASHEESH CAPITATJ SERVICES PVT. LTD, ROYAL PALACE, G- 55, LAXMI NAGAR, VIKAS MARG, NEW DELHI. 1400000/- 4 M/S ATTRACTIVE FIN-LEASE LTD. 203, 18/12, WEA, PUSA LANE, KAROL BAGH, DELHI- 5. 560000/- 5 M/S FINAGE LEASING AND FINANCE (INDIA)LTD 106, PATEL NAGAR, NEW DELHI 1400000/- 6 M/S SUNNY CAST & FORGE LTD. 14A/33, WEA, JETKING BUILDING, GURU NANAK MARKET, KAROL BAGH, NEW 840000/- 7 M/S APPORVA LEASING FIN. AND INVESTMENT CO. LTD, 104, SINGLE STOREY, RAMESH NAGAR, NEW DELHI. 1120000/- 8 M/S AVAIL FINANCIAL SERVICES PVT. LTD, 555, DOUBLE STOREY MARKET, NEW RAJINDER NAGAR, NEW DELHI. 980000/- 9 M/S SOLOMON HOLDINGS PVT. LTD, ROOM NO. 401, 3198/15, 4M FLOOR, GALI NO.1, SANGATRASHAN, PAHARGANJ, NEW DELHI. 560000/- TOTAL 93,80,000/- 4. THE A.O. CALLED FOR CERTAIN INFORMATION FROM THE SE PARTIES U/S 133(6) OF THE ACT ,I.E PAN NUMBER, PROO F OF FILING RETURN OF INCOME FOR THE IMPUGNED YEAR, COMPUTATION OF INCOME, COPY OF BANK STATEMENT FROM WHERE CHEQUES W ERE ISSUED AND THE SOURCE AND MODE OF RECEIPT OF FUNDS FOR INVESTING IN THE IMPUGNED SHARE PREMIUM ALONGWITH C OPY OF THE RELEVANT LEDGER ACCOUNT. IN THE CASE OF FOUR PA RTIES AT S.NOS.1, 2, 3 AND 4, IN THE TABLE ABOVE, THE NOTICE S WERE RETURNED BACK UNDELIVERED SINCE THE PARTIES COULD N OT BE TRACED/FOUND AT THE SAID ADDRESSES. IN CASE OF THRE E PARTIES AT SR.NOS.5, 6 AND 7 OF THE TABLE ABOVE, NO REPLY W AS RECEIVED, WHILE IN THE CASE OF REMAINING TWO PARTIE S AT ITA NO.829/CHD/2014 A.Y.2010-11 3 SR.NOS.8 AND 9 OF THE TABLE ABOVE, THE A.O. NOTED T HAT INCOMPLETE INFORMATION WAS PROVIDED WHICH DID NOT P ROVIDE SUFFICIENT EVIDENCES TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION AND OF THE APPL ICANT. THE ASSESSEE WAS, THEREFORE, ASKED TO SHOW CAUSE AS TO WHY THE AMOUNTS OF SHARE PREMIUM BE NOT DISALLOWED INTEREST HE ABSENCE OF ANY CORROBORATIVE EVIDENCE. THE ASSESSEE SOUGHT TIME FOR PRODUCING/CONFIRMING THE TRANSACTION FROM THE PARTIES. HOWEVER THE A.O. THEREAFTER PASSED ASSESSM ENT ORDER MAKING ADDITION OF THE IMPUGNED SHARE PREMIUM TREATING THE SAME AS UNEXPLAINED AND INGENUINE U/S 68 OF THE ACT. 5. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.C IT(A) WHERE THE ASSESSEE CONTENDED THAT IT HAD DISCHARGED ITS ONUS OF PROVING THE GENUINENESS OF THE IMPUGNED TRA NSACTION BY FILING NECESSARY DOCUMENTS PROVING THE IDENTITY, THE GENUINENESS AND THE CREDITWORTHINESS OF THE INVESTO RS. THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT IT HAD FILE D COPY OF THE ACKNOWLEDGEMENT OF RETURN OF INCOME, COPY OF TH EIR RESOLUTION TO PURCHASE SHARES, COPY OF THEIR AUDITE D STATEMENT OF ACCOUNTS AND BANK ACCOUNT STATEMENTS. THE LD. COUNSEL FOR ASSESSEE FURTHER CONTENDED THAT THE A.O . HAD ONLY DISPUTED THE SHARE PREMIUM HAVING ACCEPTED THE AMOUNT INVESTED AS SHARE CAPITAL BY THE VERY SAME I NVESTORS AND, THEREFORE, IT COULD NOT BE SAID THAT THE IMPUG NED PREMIUM REMAINED UNEXPLAINED. THE LD. COUNSEL FOR ASSESSEE FURTHER COLLECTED THE REQUIRED INFORMATION FROM THE ITA NO.829/CHD/2014 A.Y.2010-11 4 INVESTORS AND SUBMITTED THE SAME OF THE LD.CIT(A) S TATING THAT IT HAD TRIED CONDUCTING THE INVESTORS FOR SUBM ITTING THIS INFORMATION DURING ASSESSMENT PROCEEDINGS BUT IT TO OK TIME AND CANNOT BE FURNISHED BY THE TIME THE ASSESSMENT WAS COMPLETED. IT WAS FURTHER CONTENDED THAT SOME OF TH E LETTERS COULD NOT BE SERVED TO THE PARTIES BECAUSE THERE WA S CHANGE IN THE CORRESPONDENCE ADDRESS OF THE COMPANIES WHIC H THE SAID PARTIES HAD EXPLAINED AND WRITTEN THEIR NEW AD DRESSES IN THEIR INFORMATION LETTERS. THE SUBMISSIONS OF TH E ASSESSEE WERE FORWARDED TO THE A.O. FOR HIS COUNTER COMMENTS WHO REITERATED HIS CONTENTION MADE IN THE ASSESSMENT OR DER. THE LD.CIT(A) AFTER CONSIDERING THE CONTENTIONS OF BOTH THE ASSESSEE AND THE A.O. HELD THAT THE DOCUMENTS FORWA RDED TO THE A.O. HAD NOT BEEN CONTROVERTED BY HIM AND THE S AID DOCUMENTS SHOWED THAT THE INVESTORS COMPANY HAD SUF FICIENT CAPITALS AND RESERVES THAT INVESTMENT HAD BEEN MADE THROUGH BANK ACCOUNTS AND COPY OF THEIR INCOME TAX RETURNS HAD ALSO BEEN SUBMITTED. IN VIEW OF THE SAME, THE L D.CIT(A) HELD THAT THE IDENTITY, CREDITWORTHINESS AND GENUIN ENESS OF THE TRANSACTION WAS NOT IN DOUBT. THE LD.CIT(A) FUR THER STATED THAT THE A.O. HAD DISALLOWED THE INVESTMENT MERELY BECAUSE THE PARTIES COULD NOT BE PRODUCE. THEREAFTE R REFERRING TO VARIOUS DECISIONS OF THE HON'BLE HIGH COURT THE LD.CIT(A) HELD THAT THE ASSESSEE HAD FULLY DISCHARG ED ITS ONUS TO PROVE THE GENUINE OF THE TRANSACTION AND ACCORDINGLY, DELETED THE ADDITION MADE. THE RELEVAN T FINDING OF THE LD.CIT(A) AT PARA 6.3 OF HIS ORDER IS AS UND ER: ITA NO.829/CHD/2014 A.Y.2010-11 5 6.3 I HAVE CONSIDERED THE SUBMISSIONS MADE AND ALS O PERUSED THE ASSESSMENT RECORDS. IT IS NOTED FROM THE SUBMISSIONS & ASSESSMENT RECORD THAT THE APPELLANT DU RING THE COURSE OF ASSESSMENT PROCEEDING HAS DULY SUBMIT TED THE COPIES OF RESOLUTION OF THE BOARD OF COMPANY REGARD ING ALLOTMENT OF SHARES, APPLICATION FROM THE RESPECTIV E SUBSCRIBER COMPANIES FOR ALLOTMENT OF SHARES. THE PAN NO., COPY OF LTR WITH ACKNOWLEDGEMENT, LIST OF DIRECTORS W ITH ADDRESSES AND BANK STATEMENT OF THE SUBSCRIBER COMP ANIES WERE ALSO FILED. FURTHER, THE AUDITED COPIES OF THE BALANCE SHEET AND P&L A/C AND THE ACKNOWLEDGEMENT REGARDING RECEIP T OF SHARE CERTIFICATION WERE ALSO FILED. IN CASE OF SHALIN I HOLDINGS PUT. LTD., THE COPY OF ASSESSMENT ORDER PASSED U/S 143 (3) FOR A.Y. 1993-94 WAS ALSO FILED. THE APPELLANT DURING THE COURSE OF APPELLATE PROCEED INGS HAS ALSO SUBMITTED THAT THE A.O. HAS ACCEPTED PRINC IPLE AMOUNT OF INVESTMENT IN SHARES BY THESE COMPANIES. THE SHAR E PREMIUM HAS BEEN PAID BY THESE COMPANIES AGAINST THE PRINCIPLE INVESTMENT IN THE SHARES. THE SHARE-HOLDERS A RE EXISTING ASSESSEES AND COPIES OF THE ITR HAVE ALSO B EEN SUBMITTED. THE PAYMENTS HAVE BEEN MADE THROUGH ACCOU NT PAYEE CHECK AND COPY OF BANK STATEMENT WERE ALSO SUBMI TTED IN SUPPORT. THE COPY OF THE AUDITED STATEMENT OF ACCOU NTS AND BANK ACCOUNT STATEMENTS, THE COPIES OF RESOLUTION T O PURCHASE SHARES HAS BEEN SUBMITTED. DURING THE COURSE OF APP ELLATE PROCEEDINGS, THEREFORE, IT IS SUBMITTED THAT THE IDEN TITY OF THE PERSONS IS PROVED FURNISHING THE ACKNOWLEDGEMENT OF RETURN OF INCOME, PAN NO. OF THE PERSONS. THESE COMPANIES ARE REGIS TERED WITH THE REGISTRAR OF THE COMPANIES. THE GENUINENES S OF THE TRANSACTIONS IS PROVED BY THE PROVIDING THE BANK AC COUNT STATEMENT OF ALL THESE PERSONS AND THE MONEY HAS BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES. THE CREDITWORTHI NESS IS ALSO PROVED BY THE AUDITED ACCOUNTS OF STATEMENT. IT IS FURTHER SUBMITTED THAT SUCH DETAILS ARE NOT CONTROVERTED BY THE A.O. THE APPELLANT FURTHER SUBMITTED THAT THE APPELLANT'S CO MPANY VOLUNTEERED TO DO THE NEEDFUL TO PLACE THE INFORMATI ON SOUGHT U/S 133(6) ON RECORD AND IN CASE THE INFORMATION IS NOT SENT BY THE PARTIES, IT WILL TRY TO PRODUCE THE INVESTOR COMP ANY. HOWEVER, THROUGH THE ASSESSEE COMPANY TRIED TO CONTA CT THE INVESTOR COMPANIES AND THE INFORMATION WAS COLLECTE D FROM THAT THEM IT TOOK TIME AND THE SAME COULD NOT BE FU RNISHED ON OR BEFORE 25.03.2013 ON WHICH DATE THE ASSESSMEN T WAS COMPLETED AND THE INFORMATION COLLECTED THEREAFTER, REMAINED WITH THE APPELLANT. THE APPELLANT FURTHER RELIED ON VARIOUS CASE LAWS AND SUBMITTED THAT NO ADDITION CAN BE MADE U/S 6 8 IN THE CASE OF THE ASSESSEE COMPANY. IT WAS ALSO SEEN FR OM THE ASSESSMENT RECORD THAT THE ASSESSEE VIDE LETTER DATE D 18.03.2013 SUBMITTED THAT THE ASSESSEE CAN NOT BE PENAL IZED FOR CONDUCT OF THIRD PARTIES OVER WHICH IT HAS NO CONTRO L. FURTHER, VIDE ORDER SHEET ENTRY DATED 25.03.2013, IT WAS SUBMITTE D BY THE COUNSEL OF THE APPELLANT THAT IT IS NOT POSSIBLE TO PRODUCE THESE PARTIES ON 25.03.2013, AS THE CONCERNED PERSONS ARE OUT OF STATION ON ACCOUNT OF LONG WEEK AND AN OCCASION OF HOLI AND GOOD FRIDAY HOLIDAYS. HOWEVER, THE A.O. COMPLETED T HE ITA NO.829/CHD/2014 A.Y.2010-11 6 ASSESSMENT ON THE SAME DATE. THE APPELLANT ALSO SUBMITT ED THAT THERE WAS A CHANGE OF ADDRESS IN SOME CASES AN D THE NEW ADDRESSES WERE DULY FILED IN THE INFORMATION LE TTERS NOW. ALL SUCH DOCUMENTS WERE FORWARD TO A.O. WHICH IS NOT CONTROVERTED. FURTHER, AS PER DETAILS SUBMITTED , THE SHARES CAPITAL OF THE INVESTOR COMPANIES AND RESERV ES AND SURPLUS ARE AS UNDER:- M/S VISHAL PAPER INDUSTRIES PVT. LTD., PATIALA ASSESSMENT YEAR 2010 - 11 DETAILS OF ADDITIONS IN SHARE CAPITAL ACCOUNT & ENC LOUSERS THEREOF S.NO. NAME OF THE SHARE HOLDER SHARE CAPITAL OF THE COMPANY RESERVE & SURPLUS 1. AASHEESH CAPITAL SERVICES PVT. LTD. I23.355.000.00 1,107,945.000.00 2. APOORVA LEASING FINANCE & INVESTMENT COMPANY LTD. 199,749,000.00 998,865,500.00 3. SOLOMON HOLDINGS PVT. LTD. 19,304,000.00 172,852,010.00 4. AVAIL FINANCIAL SERVICES PVT. LTD. 16,330,000.00 82,630,000.00 5. NANDAL FINANCE AND LEASING PVT. LTD. 122,583,000.00 1,068,778,734.62 6. ATTRACTIVE FINLEASE LTD. 105,505,000.00 945,045,000.00 7. SHALINI HOLDINGS. LTD. 127,480,000.00 1,121,250,000.00 8. SUNNY CAST & FORGE LTD. 87,281,400.00 1,167,775,256.78 9. FINAGE LEASING & FINANCE (INDIA) LTD. 15,009,000.00 130,619,866.67 THEREFORE, LOOKING INTO THE ENTIRETY OF THE FACTS, IT IS EVIDENT THAT THE INVESTOR COMPANIES HAD SUFFICIENT CA PITAL AND RESERVE. THE INVESTMENTS HAVE BEEN MADE THROUGH THE BANK ACCOUNTS; THE COPY OF IT RETURNS FILED HAS ALS O BEEN SUBMITTED, THEREFORE, IN ALL THESE CASES, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS ARE NOT IN DOUBT. IT IS SUBMITTED THAT THE COMPANIES ARE REGIST ERED WITH ROC. THE A.O. HAS NOT CONTROVERTED ANY OF THE DOCUMENTS FILED BY THE APPELLANT. THE A.O. HAS SIMPLY DISALLOWED THE INVESTMENT AS THE PARTIES COULD NOT BE PRODUCED BEFORE THE A.O. IN THE CASE OF CIT VS. WINSTRA PAPER CHEMIICALS PVT. LTD. 330 ITR 603 (DEL) THE ASSESSEE HAS RECEIVED SHAR E APPLICATION MONEY THROUGH THE BANKING CHANNELS. THE ASSESSEE COMPANY FURNISHED WRITTEN CONFIRMATION FROM THE APPLICANT COMPANIES, COPIES OF CERTIFICATES OF CORPO RATIONS, PAN CARDS, PAN DETAILS AND COMPANY'S DETAILS OF THE APPLI CANT. THE HON'BLE HIGH COURT HELD THAT UNDER SUCH CIRCUMSTANC ES, THE FINDING OF THE TRIBUNAL THAT IDENTITY OF THE SUBSCR IBERS STOOD DULY ESTABLISHED FROM THE DOCUMENTS PRODUCED BY THE ASSESSEE CANNOT BE SAID TO BE PERVERSE AND THER E IS NO ITA NO.829/CHD/2014 A.Y.2010-11 7 LEGAL BAR TO MORE THAN ONE COMPANY BEING REGISTERED AT THE SAME ADDRESS. MERELY BECAUSE THE APPLICANTS DID NOT RESPOND TO THE NOTICES SENT TO THEM, THE A.O. WAS NOT JUSTIFIE D IN ADDING THE AMOUNT OF SHARE APPLICATION MONEY TO THE INCOME OF THE ASSESSEE. IN THE CASE OF CIT VS. DWARKADHISH INVESTMENT (P)LTD. 330 ITR 298 (DEL) THE ASSESSEE COMPANY RECEIVED SHARE APPLICATION MONEY. THE HON'BLE HIGH COURT HELD THAT T HE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE YET ONC E HE PROVES THE IDENTITY OF THE CREDITOR/SHARE APPLICANT BY EITH ER FURNISHING THEIR PAN OR INCOME TAX ASSESSMENT NUMBER AND SHOWS THE GENUINENESS OF TRANSACTIONS BY SHOWING MONEY IN HIS BOOKS EITHER BY ACCOUNT PAYEE CHEQUES OR BY DRAFT OR BY I N OTHER MODE, THESE ONUS OF PROOF WOULD SHIFT TO THE REVENU E. JUST BECAUSE THE CREDITORS/SHARE APPLICANTS COULD NOT BE FOUND AT THE ADDRESS GIVEN, IT COULD NOT GIVE THE REVENUE TH E RIGHT THE INVOKE SECTION 68. MOREOVER IT IS A SETTLED LAW THA T THE ASSESSEE NEED NOT PROVE THE 'SOURCE OF SOURCE.' IN THIS CASE THE TRIBUNAL HAS CONFIRMED THE ORDER OF CIT (A) DELETING IMPUGNED ADDITION AND HELD THAT THE ASSESSEE HAS BEEN ABLE TO PROVE TH E IDENTITY OF SHARE APPLICANTS AND THE SHARE APPLICATION MONEY H AS BEEN RECEIVED BY WAY OF ACCOUNT PAYEE CHEQEUS. IN THE CASE OF COMMISSIONER OF INCOME TAX VS. LOVEL Y EXPORT (P.) LTD. DECIDED ON N TH JANUARY, 2008 BY THE SUPREME COURT OF INDIA REPORTED IN 216 CTR 195: IT HAS BEEN HELD AS UNDER:- 'IF SHARE APPLICATION MONEY IS RECEIVED BY ASSESSEE-COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO ASSESSING OFFICER, THEN DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT THESE AMOUNT OF SHARE MONEY CAN NOT BE REGARDED AS UNDISCLOSED INCO ME UNDER SECTION 68 OF ASSESSEE COMPANY. (SPECIAL LEAV E PETITION OF THE REVENUE IS DISMISSED) ' THUS, IN THIS CASE, THE APPELLANT HAS DULY DISCHARG ED HIS ONUS. HE HAS FILED THE COPIES OF LTR OF THE COMPANI ES, PAN ETC ESTABLISHING THE IDENTITY OF THE SUBSCRIBER. THE TR ANSACTION IS THROUGH BANK AND AS PER AUDITED COPIES OF BALANCE SH EET THERE IS SUFFICIENT CAPITAL AND RESERVE WITH THE SU BSCRIBER. MOREOVER, AS CONTENDED BY THE APPELLANT, THE SHARE CAP ITAL SUBSCRIBED IS DULY ACCEPTED BY THE A.O. WHILE SHARE PR EMIUM IS DISALLOWED. DURING THE APPELLATE PROCEEDING THE APPELLANT AGAIN FILED THE CONFIRMATION WHICH WAS ALSO FORWARD ED TO THE A.O. AND ARE NOT REBUTTED. RELYING ON THE RATIO ON DECISION IN THE CASE LAWS AS ABOVE, IN MY OPINION, THE APPELLANT CANNO T BE PUNISHED FOR NON-APPEARANCE OF THE SUBSCRIBER ONCE T HE APPELLANT HAS SUBMITTED COMPLETE DETAILS ESTABLISHI NG THE IDENTITY AND CREDITWORTHINESS OF THE SUBSCRIBERS AND GENUINE NESS OF THE TRANSACTIONS AS HELD IN THE CASE OF CIT VS, LOVELY EX PORT PVT. LTD. (SC) 216 CTR 195 AND UNDER SUCH CIRCUMSTANCES NO AD DITION CAN BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. ITA NO.829/CHD/2014 A.Y.2010-11 8 THUS RELYING ON THE CASES AS ABOVE AND SUBMISSION MADE, THE ADDITION MADE BY THE A.O. IS HEREBY DELET ED. 6. AGGRIEVED BY THE SAME, THE REVENUE HAS COME UP I N APPEAL BEFORE US, RAISING THE FOLLOWING GROUNDS: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) HAS ERRED IN DELETING THE ADDITION OF. RS.93,80,000/- MADE BY THE AO ON ACCOUNT OF SHARE PREMIUM, IGNORING THE FACT THAT THE ASSESSEE HAD FA ILED TO DISCHARGE THE ONUS OF PROVING THE IDENTITY AND CREDITWORTHINESS OF THE ALLEGED SHAREHOLDERS & GENUINENESS OF THE TRANSACTIONS TO THE SATISFACTION OF THE AO AT THE TIME OF THE ASSESSMENT PROCEEDINGS, SINCE FOUR COMPANIES COULD NOT BE TRACED AT THEIR GIVEN ADDRES SES, THREE COMPANIES DID NOT COMPLY WITH THE NOTICE ISSU ED TO THEM, THE BALANCE TWO COMPANIES SUBMITTED INCOMPLETE INFORMATION AND THE ASSESSEE ALSO COULD NOT PRODUCE THE COMPANIES BEFORE THE AO. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ACCEPTING ASSESSEE'S VERSION ABOU T GENUINENESS OF INVESTORS WITHOUT GIVING AN OPPORTUN ITY TO THE AO TO CALL THE COMPANIES SO AS TO COMPLETE THE INQUIRY HE HAD INITIATED IN RESPECT OF COMPANIES, ESPECIALLY SINCE FOUR COMPANIES WERE NOT FOUND AT TH EIR GIVEN ADDRESSES, THREE COMPANIES DID NOT RESPOND TO THE INQUIRY NOTICE AND THE BALANCE TWO COMPANIES FURNISHED INCOMPLETE INFORMATION. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RELYING ON FRESH INFORMATION LETTERS A ND CHANGED ADDRESSES ADMITTEDLY NOT SUPPLIED BY ASSESSE E TO THE AO DURING THE ASSESSMENT PROCEEDINGS, WITHOUT ADMITTING THE FRESH ADDRESSES AND INFORMATION LETTER S AS FRESH EVIDENCE BY FOLLOWING THE PROCEDURE LAID DO WN UNDER RULE 46A AND WITHOUT GIVING ANY OPPORTUNITY TO THE AO TO EXAMINE SUCH EVIDENCE, ONLY ON THE GROUND THAT THE INFORMATION FORWARDED TO THE AO REMAINED UNCONTROVERTED, WITHOUT APPRECIATING THE FACT THAT WITHOUT ADMISSION OF FRESH EVIDENCE BY THE LD. CIT( A), THE AO COULD NOT EXAMINE THE SAME. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN RELYING ON THE DECISION OF THE HON'BLE APE X COURT IN THE CASE OF CIT VS. LOVELY EXPORTS PVT. LT D., WITHOUT APPRECIATING THAT, AS POINTED OUT BY THE HON' BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTE RS AND FINLEASE (P) LTD., 342 ITR 169 (DEL.), IN THAT CASE THE AO DID NOT CARRY OUT ANY ENQUIRY ABOUT THE SHAR E APPLICANTS, WHEREAS IN THE PRESENT CASE, THE A.O. HAD TRIED TO CONDUCT ENQUIRIES IN RESPECT OF ALL THE NI NE COMPANIES BUT EITHER THE COMPANIES WERE NOT FOUND O R DID NOT RESPOND OR THEY FURNISHED INCOMPLETE ITA NO.829/CHD/2014 A.Y.2010-11 9 INFORMATION TO HIM. 5. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE AO RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND FINA LLY DISPOSED OF. 7. DURING THE COURSE OF HEARING BEFORE US HE LD. DR RELIED UPON THE ORDER OF THE A.O. WHILE THE LD. COUNSEL FO R ASSESSEE RELIED UPON THE ORDER OF THE LD.CIT(A). 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND ALS O CAREFULLY GONE THROUGH THE ORDER OF THE LD.CIT(A). WE FIND NO REASON TO INTERFERE IN THE SAME. THE LD.DR HAS NOT CONTROVERTED THE FACTUAL FINDINGS OF THE LD.CIT(A) THAT THE ASSESSEE HAD SUBMITTED NECESSARY DOCUMENTS EVIDENCI NG THE IDENTITY, THE GENUINENESS AND THE CREDITWORTHINESS OF THE INVESTOR COMPANIES DURING ASSESSMENT PROCEEDINGS, AS STATED AT PARA 6.3 OF HIS ORDER AS UNDER: 6.3 I HAVE CONSIDERED THE SUBMISSIONS MADE AND ALSO PERUSED THE ASSESSMENT RECORDS. IT IS NOTED FROM THE SUBMISSIONS & ASSESSMENT RECORD THAT THE APPELLANT DU RING THE COURSE OF ASSESSMENT PROCEEDING HAS DULY SUBMIT TED THE COPIES OF RESOLUTION OF THE BOARD OF COMPANY REGARD ING ALLOTMENT OF SHARES, APPLICATION FROM THE RESPECTIV E SUBSCRIBER COMPANIES FOR ALLOTMENT OF SHARES. THE PAN NO., COPY OF LTR WITH ACKNOWLEDGEMENT, LIST OF DIRECTORS W ITH ADDRESSES AND BANK STATEMENT OF THE SUBSCRIBER COMP ANIES WERE ALSO FILED. FURTHER, THE AUDITED COPIES OF THE BALANCE SHEET AND P&L A/C AND THE ACKNOWLEDGEMENT REGARDING RECEIP T OF SHARE CERTIFICATION WERE ALSO FILED. IN CASE OF SHALIN I HOLDINGS PUT. LTD., THE COPY OF ASSESSMENT ORDER PASSED U/S 143 (3) FOR A.Y. 1993-94 WAS ALSO FILED. ITA NO.829/CHD/2014 A.Y.2010-11 10 9. THEREFORE, THE ASSESSEE HAD DISCHARGED THE INITI AL ONUS CAST UPON HIM. FURTHER ,WE FIND THAT THE CIT(A) HAS NOTED THAT THE INFORMATION SOUGHT FOR BY THE A.O. BY MAKI NG HIS OWN ENQUIRY U/S 133(6) OF THE ACT FROM THE SAID INV ESTORS WAS ALSO COLLECTED BY THE ASSESSEE FROM THE SAID IN VESTORS AND PROVIDED DURING APPELLATE PROCEEDINGS WHICH WAS CONFRONTED TO THE A.O. WHO DID NOT FIND ANY INFIRM ITY IN THE SAME. THIS FACT HAS ALSO REMAINED UNCONTROVERTED BEFORE US. THUS IT STANDS THAT THE CONCERNED PARTIES HAD ALSO INDEPENDENTLY CONFIRMED THE TRANSACTIONS. THE CIT (A) ,WE FIND ALSO TOOK NOTE OF THE FINANCIAL POSITION OF TH E INVESTOR COMPANIES AND FOUND THAT THEY HAD SUFFICIENT CAPITA L AND RESERVE TO MAKE THE INVESTMENT. LD.DR HAS BEEN UNAB LE TO CONTROVERT THIS FACT ALSO. THE CREDITWORTHINESS OF THE INVESTOR COMPANIES THUS STANDS SUFFICIENTLY ESTABLI SHED. MOREOVER THE ADDITION IN THE IMPUGNED CASE IS ONLY OF THE SHARE PREMIUM RECEIVED, AND WE AGREE WITH THE LD.CI T(A) THAT HAVING ACCEPTED THE SHARE CAPITAL RECEIVED FRO M THE SAME INVESTORS, THERE WAS NO REASON TO DOUBT THE P REMIUM THEREON . 10. IN VIEW OF THE ABOVE, WE HAVE NO HESITATION IN AGREEING WITH THE LD.CIT(A) THAT THE GENUINENESS OF THE TRAN SACTION STOOD ESTABLISHED AND WE DO NOT SEE ANY REASON TO D OUBT THE SAME. EVEN THE LD. DR HAS BEEN UNABLE TO POINT OUT FROM THE ORDER OF THE A.O. AS TO WHY THE IMPUGNED TRANSACTIO NS WERE TO BE LOOKED AT WITH SUSPICION. THE ASSESSEE HAD ES TABLISHED THE GENUINENESS OF THE TRANSACTIONS BY FILING RELEV ANT ITA NO.829/CHD/2014 A.Y.2010-11 11 DOCUMENTS AND THE SAME WAS CONFIRMED BY THE INVESTO R COMPANIES ALSO, NO INFIRMITY IN THE DOCUMENTS FILED EITHER BY THE ASSESSEE OR BY THE INVESTOR COMPANIES HAS BEEN POINTED OUT BY THE REVENUE. WE FAIL TO UNDERSTAND, THEREFOR E, WHY THE IMPUGNED TRANSACTION SHOULD BE TREATED AS UNEXPLAINED/INGENUINE. ALSO HAVING ESTABLISHED THE GENUINENESS OF THE TRANSACTION WITH NECESSARY DOCUM ENTS, AS ABOVE, THE ONUS SHIFTED TO THE DEPARTMENT, AND H AVING NOT POINTED OUT ANY INFIRMITY IN THE DOCUMENTS SUBM ITTED BY THE ASSESSEE, THE ASSESSEE WAS NOT ANY MORE REQUIRE D TO FILE FURTHER EVIDENCES OR EVEN PRODUCE THE DIRECTORS OF THE COMPANIES. WE AGREE THEREFORE WITH THE LD.CIT(A) TH AT THE SHARE PREMIUMS COULD NOT BE SAID TO BE INGENUINE ME RELY BECAUSE THE DIRECTORS OF THE COMPANIES WERE NOT PR ODUCED FOR EXAMINATION. 11. THE REVENUE, WE FIND, HAS CHALLENGED THE DELETI ON OF THE ADDITION BEFORE US ON THE GROUND THAT THE ASSES SEE DID NOT DISCHARGE ITS ONUS DURING ASSESSMENT PROCEEDING S AND ADEQUATE OPPORTUNITY WAS NOT GIVEN TO THE AO TO COM PLETE HIS INQUIRY VIS A VIS THE INVESTOR COMPANIES AND FU RTHER THAT THE CIT(A) ADMITTED THE ADDITIONAL EVIDENCES WITHOU T FOLLOWING THE PROCEDURE LAID DOWN IN RULE 46A OF TH E INCOME TAX RULES,1962 FOR THE SAME. 12. WE DO NOT FIND ANY MERIT IN THE ABOVE CONTENTIO NS OF THE REVENUE SINCE AS HELD ABOVE BY US THE ASSESSEE HAD DULY DISCHARGED ITS ONUS OF PROVING THE GENUINENESS OF T HE TRANSACTION AND THE A.O. HAD BEEN GIVEN SUFFICIENT ITA NO.829/CHD/2014 A.Y.2010-11 12 OPPORTUNITY TO CONDUCT ALL INQUIRIES VIS A VIS THE SAID INVESTORS IN REMAND PROCEEDINGS. FURTHER WE FIND TH AT THE CIT(A) HAD NOTED THE FACT THAT THOUGH THE ASSESSEE HAD SOUGHT TIME TO PRODUCE THE INVESTORS, THE AO WITHOU T GIVING ANY FURTHER OPPORTUNITY FINALIZED THE ASSESSMENT. I N THIS BACKDROP THE CIT(A) ADMITTED THE EVIDENCES FILED BY THE ASSESSEE COLLECTED FROM THE INVESTORS AND FORWARDED THEM TO THE AO FOR HIS COMMENTS. THE CIT(A) THEREFORE, WE H OLD, HAD DULY ADMITTED THE ADDITIONAL EVIDENCES IN THE CIRCU MSTANCES ENUMERATED IN RULE 46A OF THE RULES, WHICH ALLOWS T HE CIT(A) TO ADMIT SUCH EVIDENCES WHERE THE ASSESSEE W AS NOT GIVEN SUFFICIENT OPPORTUNITY TO ADDUCE THE SAME EAR LIER. IN VIEW OF THE ABOVE, ALL THE GROUND RAISED BY THE REVENUE ARE DISMISSED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- $ % & '# (SANJAY GARG) (ANNAPURNA GUPTA) /JUDICIAL MEMBER () /ACCOUNTANT MEMBER +$ /DATED: 29 TH MARCH, 2019 * # * #&' ()*) / COPY OF THE ORDER FORWARDED TO : 1. + / THE APPELLANT 2. ',+ / THE RESPONDENT 3. - / CIT 4. - ( )/ THE CIT(A) 5. )./' 0 , !0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35 / GUARD FILE #& / BY ORDER, / ASSISTANT REGISTRAR ITA NO.829/CHD/2014 A.Y.2010-11 13