DCIT, CENTRAL CIRCLE AJMER, AJMER V. PUJA SYNTHETICS PRIVATE LIMITED, BHILWARA

ITA 87/JPR/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0055 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-10-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Revision of order; Search and seizure; Source of fund; Question of law; Accommodation entries; Set aside
• Section: 131; 68; 263; 143(3); 142(1); 153A; 260A; 115JB; 133(6); 195; 250; 201; 251; 143(2); 264; 139(1); 113; 48; 13; 22

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 87/JPR/2023 fu/kZkj.k o"kZ@Assessment Years : 2009-10 DCIT, Central Circle, Ajmer. cuke Vs. Puja Synthetics Private Limited A-4, Bhilwara Textile Market, Pur Road, Bhilwara. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAACP 8449 D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by :Shri Mukesh Soni (Adv.) jktLo dh vksj ls@Revenue by: Shri A.S. Nehra (Addl.CIT) lquokbZ dh rkjh[k@Date of Hearing :18/10/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 09/11/2023 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal is filed by the revenue against the order of the ld. Commissioner of Income Tax (Appeals)-2, Udaipur dated 29.12.2022 [herein after referred to as "CIT(A)"] for the assessment year 2009-10. 2. The revenue has raised the following grounds of appeal:- “1. The learned CIT Appeal has erred in law and on facts in granting relief to the assessee. 2 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. 2. The Honorable CIT Appeal has erred in law in granting relief to the taxpayer by relying upon order of Honourable ITAT which had been passed holding that cross examination was not allowed to the taxpayer, ignoring the fact that bogus capital was introduced in the form of share premium received from entities controlled by Shri Praveen Kumar Jain and others who had admitted to be systematically involved in such wrongdoing activity. 3. The learned CIT Appeal has erred in law in granting relief to the taxpayer by relying upon order of Hon'ble ITAT wherein the ITAT has relied upon materials/ documents provided by the assessee, ignoring the vital fact that all these documents were compiled to support the wrongdoing and in this process, the Hon'ble ITAT and the Commissioner Appeal who has followed the ITAT ignored the Principle of Preponderance of Human Probability as elucidated by Honorable Supreme Court in the cases of Sumati Dayal versus CIT 1995 214 ITR 801 SC, and CIT versus 1971 82 ITR 540 SC. 4. The learned CIT Appeal has erred in law and on facts in relying upon order of Honorable ITAT wherein the Honorable ITAT has, by erring in law and on facts and in the circumstances of that case, deleted the addition of Rupees 2.35 crores made by the assessing officer as unexplained share premium amount, and in so granting relief to the taxpayer, the ITAT and the following Commissioner Appeals, have not appreciated that the whole edifice was based on falsehood and was a stratagem to convert unaccounted money into accounted money and in treating such transactions as genuine, the Honorable ITAT has not followed the Principle of Human Probability as laid down by the Honorable Supreme Court in the cases of Sumati Dayal versus CIT, reported as 214 ITR 801 SC, and of CIT versus Durga Prasad More 82 ITR 540 SC. 5. The Appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.” 3. The brief facts of the case are that the assessee M/s Puja Synthetics Pvt. Ltd., A- 4M, Bhilwara, is a Private Limited Company regularly assessed to tax. The assessment was completed by Assessing Officer u/s 153A r.w.s.143(3) of the Act at 3 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. total income of Rs. Nil and at book profit at Rs. 1,93,080/- u/s 115JB of the I.T. Act. Thus, here it is to be noted that the assessment of search is completed based on the material found and the issue of share capital has been examined in the search related assessment. 3.1 After the assessment was finalized on 02.06.2014, information was received from the Directorate of Income Tax (Investigation), Mumbai vide letter dated 16.09.2014 to the Assessing Officer that the assessee company has taken accommodation entry of Rs. 15,00,000/- in the form of Share Capital with huge premium from M/s Alka Diamonds Industries Ltd., a bogus concern where search and seizure action were conducted by DIT (Inv.), Mumbai. Under the facts and circumstances of the case the Pr. Commissioner of Income Tax (Central), Rajasthan, Jaipur passed an order on 31.03.2017 u/s 263 of the I.T. Act. In the said order the Ld. Pr. CIT (Central), held that the assessment order passed by the AO in the case of the assessee company on 02.06.2014 is erroneous in so far as it is also prejudicial to the interest of revenue and therefore, liable to be quashed. So, the entire assessment order passed on 02.06.2014 was cancelled by the Ld. Pr. CIT (Central) and direction was given to make a fresh assessment after conducting proper enquiries regarding the genuineness of share capital and premium shown to have been received from seven alleged investors companies and also to examine all 4 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. other issues having implications on taxable income of the assessee.In persuasion of that direction assessment order was passed on 25.12.2017 by the AO u/s 263/153A/143(3) of the Income Tax Act, 1961 at the total income of Rs. 2,34,80,690/- after making addition of Rs. 2,35,00,000/- on account of unexplained credit as per the provisions of section 68 of the Act in return income of Rs. (-) 19,308/- in respect of seven investor company it as unexplained credit as per provision of section 68 of the Act. 4. Aggrieved from the order of the Assessing Officer, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised by the assessee, the relevant finding of the ld. CIT(A) is reiterated here in below: “5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The appellant has argued that the Identity, creditworthiness of the investors and genuineness of share application money was furnished before the AO. However, the Assessing Officer without examining and analyzing the documents produced by the appellant did not consider the explanation of the appellant and made addition u/s 68 of the Act. All the investor companies have complied with the notices issued by the department and replies to queries raised. The assessing officer has relied upon some material /documents which were neither provided to the appellant nor any opportunity to cross examine the witness was given. The appellant has further argued that burden of proving that transaction is genuine, is discharged by the appellant. The appellant has relied upon some decisions to state that all the conditions of section 68 are fulfilled by the appellant and no addition can be made in its case. 5 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. However, the assessing officer did not found the submission made by the appellant acceptable. The AO has noted that the investors do not have any substantial business. There is either no profit or very meager profit. Further, the AO has noted that during the search and seizure operation conducted by the DIT (Inv.), Mumbai, Sh. Praveen Kumar Jain and others who operates M/s Alka Diamonds Industries Ltd., it has come out that he is involved in providing accommodation entries. Therefore, according to the assessing officer the creditworthiness of the investors is not proved beyond doubt. After going through the assessment order and reply of the appellant it is seen that similar issue was decided by Hon'ble ITAT, Jaipur in the case of appellant for A.Y. 2007-08. In that year also share premium was received from concerns controlled by Sh. Praveen Kumar Jain and others. In this order, Hon'ble ITAT noted that the assessee company has duly discharged the initial onus cast on it u/s 68. It was held following the legal proposition laid down by the Hon'ble Supreme Court in the case of Andman Timber Industries that the addition cannot be made in the hands of the assessee solely relying on statement of Sh. Praveen Kumar Jain and others without allowing cross examination to the assessee company. The ITAT has followed the decision of coordinate bench in the case of M/s Choice Buildestate Pvt. Ltd. Vs ITO in ITA No. 431/JP/2016 and 432/JP/2016 dated 28.03.2018. The decision of Hon'ble ITAT, Jaipur was on the similar facts and in the case of appellant itself. Facts of this year are similar to that of case decided by Hon'ble ITAT. The AO has made additions on the similar lines. Therefore, following the decision of Hon'ble ITAT as discussed above, the assessing officer is directed to delete the addition made u/s 68 of Rs. 2,35,00,000/-. These grounds of appeal are treated as allowed.” 5. Feeling aggrieved, the revenue has challenged the order of the ld. CIT(A) on the grounds as reiterated here in above. The only effective issue raised by the Revenue by way of this appeal is that the ld. CIT(A) erred in deleting the addition made by the AO for an amount of Rs. 2.35 crores u/s 68 of the Act on account of 6 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. unexplained credit and on account of share capital in the name of all 7 investors company. The details of the same is reiterated here in below :- Sr. No. Name of alleged investor (M/s) No. of share shown to have been issued Amount shown to have been received for shares Amount of premium shown to have been received Total amount shown to have been received. 1. Alka Diamond Industries Ltd. 37500 37500 1125000 1500000 2. Kisescop India P. Ltd. 10000 100000 900000 1000000 3. Namon Equipment & Construction (India) Pvt. Ltd. (Mewar Equipment Pvt. Ltd.) 22000 220000 1980000 2200000 4. Volplast Ltd. 28000 280000 2520000 2800000 5. Trendy Knit Wear Ltd. 26500 265000 2385000 2650000 6. Mangal Murti Infrareal Pvt. Ltd. ( Convenient Housing Fance Ltd.) 33500 335000 3015000 3350000 7. Anchor Dealer Pvt. Ltd. 100000 1000000 9000000 10000000 257500 2237500 20925000 23500000 5.1 The ld. DR in support of the arguments that all these investor companies are having the features of shell company and therefore, the addition is required to be sustained. The ld. DR in support of his contentions has relied upon the following judgments :-  ITO v. Pirani Choodi 20 taxmann.com 733 (SC)  Vasantlal and co. v. CIT 45 ITR 206 (SC)  Sumati Dayal v. CIT 80 taxman 89 (SC)  Moti Lal Padampat Udyog Ltd. vs. CIT ( All.H.C.)  Smt. Shanta Devi vs. CIT 37 Taxman 104 (Punjab & Haryana H.C.)  Agrawal Coal Corpn. (P) Ltd. vs. ACIT 63 DTR 201  CIT vs. Frostair (P) Ltd. 26 Taxmann.com 11 (Delhi H.C.)  CIT vs. Hindon Forge (P) Ltd. 25 taxmann.com 239 (Alld. H.C.)  DCIT vs. Rohini Builders 127 Taxman 523 (Gujarat H.C.)  CIT vs. Nova promoters &finlease (P) Ltd. 18 taxmann.com 217 (Delhi H.C.) 7 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd.  CIT vs. N.R. Portfolio (P) Ltd. 29 taxmann.com (Delhi H.c.)  Pr. CIT vs. NRA Iron & Steel (P) Ltd. 103 taxmann.com 48 (SC) 5.2 The ld. DR further referring to the various evidences such as ITR, Balance Sheet and Bank statement filed by the assessee submitted that these companies has no worth or capacity to invest in the assessee company. Thus, these transactionsare not real investments of these shell companies. A. The ld. DR referred page no. 161 of the paper book so filed by the assessee for the financial year 2007-08 wherein the turnover of Alka Diamonds Industries Ltd. is appearing which is nil and no sale or purchase activity is reflected for this company reported for the year under consideration. Thus, the company is not engaged in any business activity in the financial year 2008-09 the company has shown income of capital gain of Rs. 12,79,180/- and in the profit before the tax is only Rs. 10,79,909/-. Thus from these financial information it is very well evident that the investor company is the shell paper company. The ld. DR also drawn our attention to page 169, and argued that there is no stock movement in the financial year 2008-09 in respect of this investor company. The return for 8 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. the assessment year 2007-08 is only meager income. Therefore,this company is having the feature of shell company. B. In the investor name as Kinscope India P. Ltd (now known as Ganraj Ventures Pvt. Ltd.), the assessee has shown meager income and therefore, this investor company against the income of Rs. 1,64,580/- invested a sum of Rs. 10 lacs is nothing to a feature of shell company. C. Naman Equipment & Construction (India) Pvt. Ltd. (Mewar Equipment Pvt. Ltd.) in respect of the ld. DR submitted that this company has invested of Rs. 22 lacs whereas the income for assessment year 2008- 09 is only Rs. 1.45 lacs. Thus, the investor company has no capacity to invest in the shares of the assessee company. Not only that investor company has not done any purchase and sale activity and no stock available balance sheet appearing in the paper book filed by the assessee. Therefore this company is also has character of shell company. D. In respect of Valplast Ltd. Investment is of Rs. 28 lacs.The investor company has taken unsecured loan to the extent of Rs. 7.40 lacs the return of this investor company for the financial year 2007-08 is nil and therefore, this company does not have any capacity to invest in the shares of the assessee company. 9 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. E. In respect of Trendy Knit Wear Ltd.. the turnover of the investor company is Rs. 26.50 lacs as per the return of income filed is showing meager income. Therefore, investor company has also no capacity to invest in the shares of the assessee company. F. In respect of Mangal Murti Infrareal Pvt. Ltd. the ld. DR submitted that this company has filed the return of income showing the income of Rs. 1,99,613/- whereas this company has invested Rs. 33.50 lacs in the shares of the assessee company. Therefore, this company also does not have any capacity to invest in the share of the company. G. In case of Anchor Dealer Pvt. Ltd. the ld. DR submitted that this company has invested as much as Rs. 1 Crore in the assessee company the return of this company does not sufficiently prove the creditworthiness of the investor company. 5.3 In addition to the above comment for all the investor companies, the ld. DR further submitted that the investor companies are having bank account in the Axis Bank. The money invested in the form of share capital in the assessee company is on account of some other credit received in the account of the investor company. Therefore it clearly establish that this companies are paper company register office address that this companies 10 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. are at the residential address. The ld. DR also submitted that the ld. CIT(A) deleted the addition merely based on the order of the assessee company in the previous year not dealing with the fact as argued and clearly mentioned in the order of the PCIT passed u/s 263 of the Act. Therefore the Revenue has filed the present appeal. The ld. CIT(A) has not considered the fact that investor in the previous year and this year are difference except having one as same. The ld. CIT(A) contended that no cross examination was given to the assessee but looking to the facts already on record in the order passed u/s 263 of the Act there is no need to provide the cross examination to the assessee. The finding of the ld. CIT(A) that the assessee has established the condition u/s 68 of the Act is not correct based on the arguments placed on record hereinabove. The ld. DR thus, relied the case of Hon’ble Apex Court in the case of Sumati Dayal vs. CIT 80 taxman 89 (SC) and CIT v. Durga Prasad More 82 ITR 540 submitted that these investor companies are shell company and the assessee fail to prove the criteria as per provisions of section 68 of the Act. Therefore the addition deleted by the CIT(A) deserves to be reversed. 6. The ld. DR also submitted that till this date the investors are appearing in the name of this company and the assessee has not declared 11 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. any dividend to this investors and therefore, to support this contention and these companies are mere paper company. 7. Per contra, the ld. AR of the assessee in addition to the written submission so filed and vehemently argued that the contention of the Revenue that these companies are shell company is in fact not correct. To support his contention ld. AR of the assessee submitted following written submission:- “1. The Respondent is private limited company, who raised share capital along with securities premium from various investors. Later in year Sept 2012, search and seizure proceedings were carried out at the premises of Respondent. The transaction of share capital was duly assessed and examined by the Ld. AO vide assessment order dated 02.06.2014. 2. However, the case of Respondent has been reopened by Ld. PCIT by passing impugned order u/s 263 and accordingly Ld. AO has passed the impugned assessment order with addition of Rs. 2,35,00,000/-on account of alleged accommodation entries received by the company and impugned addition was made u/s 68 of the Act. 3. Aggrieved by Order of Ld. AO, Appellant has moved before CIT(A) against the order the Ld. AO. During appellate proceedings written submissions including supporting evidences were filed. And, Ld. CIT(A) passed by the order u/s 250 of the Act in the favour of Respondent based on the judgment of this Hon'ble Bench in the case of Assessee Company for AY 2007-08 and accordingly deleted the impugned addition of Rs. 2.35 crores The relevant extracts of the said judgment passed by Hon'ble Bech in the case of Assessee Company is reproduced hereinunder:- Asstt. Commissioner of Income Tax, Central Circle, Ajmer vs. M/s Puja Synthetics Pvt. Ltd. ITA. No. 604/JP/2016 14. The assessee has filed affidavits, copy of the return of income, Board resolutions and the financial statements of the investor companies. Further, the notices have been issued to five investor companies u/s 133(6) by the Assessing officer and they have submitted the necessary documentation in support of the investments so made by them in the assessee company. Basis the same, the Assessing Officer has given a finding that on verification of documents submitted by the assessee and called from the investor companies, it is found that the amount of investment agrees with the balance reflected in the books of the 12 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. assessee as well as investors companies. We therefore find that the assessee company has duly discharged the initial onus cast on it u/s 68 and once initial onus has been satisfied by the assessee company to the satisfaction of the Assessing officer and once the Assessing officer is satisfied with the documentation so submitted by the assessee company and which has also been confirmed by him directly from the investor companies, we failed to understand as to why in the body of the assessment order, he has merely proceeded basis the information received from the Investigation Wing, Mumbai in respect of search and seizure operation in case of Sh. Praveen Kumar Jain Group and has kept silent on the documentation and verification so carried out by him in respect of direct evidences so submitted by the assessee company. 15. Assessing Officer placed reliance of the statement of Shri Uttam Hinger who is brother-in-law of Shri Praveen Kuamr Jain, the statement of Sh. Chander Shekhar Goyal and Shri Dinesh Choudhary which all were recorded u/s 132(4)/ 131 during the course of search proceedings conducted by the Investigation Wing, Mumbai. In this regard, the ld AR has contended that the assessee company has requested for copy of their statements and even requested to cross-examine Sh. Praveen Kumar Jain during the course of assessment proceedings, however, the Assessing officer has not provided either the copy of their statements or allowed an opportunity to cross-examine Sh. Praveen Kumar Jain. We find the said contentions to be factually correct. Therefore, following the legal proposition laid down by the Hon'ble Supreme Court in case of Andaman Timber Ind. (Supra), the addition cannot be made in the hands of the assessee solely relying on the statement of Sh. Praveen Kumar Jain and others without allowing cross- examination to the assessee company. 16. Now coming to the contention of the ld AR that in absence of any incriminating documents found during the course of search in case of the assessee company, no additions can be made in the hands of the assessee company. We find that the assessee has taken this contention before the ld CIT(A) as part of its ground of appeal no. 3 as we have noted above, however the same was not specifically dealt with by the ld CIT(A) and the ground to that extent was dismissed. We therefore find that even though the assessee has not filed any cross-objection, under Rule 27, the assessee shall be entitled to defend the order of the Id CIT(A) by raising this contention before us. In this regard, useful reference can be drawn to the decision of Hon'ble Gujarat High Court in case of PCIT vs Sun Pharmaceuticals Industries Ltd [2017] 86 taxmann.com 148. “17. In the instant case, we find that the assessee has originally filed its return of income on 10.10.2007 and time limit for issuance of notice u/s 143(2) has expired on 30.09.2008 before the date of search which was carried out on 26.09.2012. Therefore, on the date of search, the assessment for the impugned assessment year was not pending/abated and already stood completed. Further, on perusal of the assessment order, we find that there is no discussion or finding by the Assessing Officer that any incriminating document was found during the course of search 13 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. relating to the investment made by any of these companies in the assessee company, rather the whole basis of assessment is the information received from the Investigation Wing, Mumbai during the course of assessment proceedings. Therefore, in absence of any incriminating documents found during the course of search in case of the assessee company, the law is well settled that no addition may be made in the hands of the assesse company. The decision of the Hon'ble Delhi High Court in case of Meeta Gutgutia (Supra), the Hon'ble Gujarat High Court in case of Saumya Construction (P) Ltd (Supra), and Hon'ble Rajasthan High Court in case of Jai Steel (India) ACIT (Supra) support the case of the assessee company. 18. In light of the above discussions and in the entirety of facts and circumstances of the case, the matter is decided against the Revenue and in favour of the assessee company." 4. Thereby, Department aggrieved by the Order passed u/s 250 of the Act, against which they preferred appeal before Hon'ble Bench. 5. In the said order, the Ld. CIT(A) held that Assessee Company has discharged their onus u/s 68 of the Act by producing various documents like copy of share application form, allotment letter, bank statements, copy of return of income, accounts confirmation and other documentary evidences. It has been also held that no opportunity has been granted to Assessee Company for cross examination of statement recorded of Shri Praveen Kumar Jain based on which said assessment was made. The impugned addition of Rs. 2.35 crore was deleted by Ld. CIT(A). 6. The Respondent is satisfied or concur order passed u/s 250 of the Act on various grounds as mentioned in brief as follows: 6.1. Parties/investor duly responded to the notices issued u/s 133(6) of the Act. 6.2. Provision of Section 68 are not applicable on the Respondent. 6.3. No incriminating material found during the search proceedings. 6.4. Opportunity of Respondent. cross examination is not provided to 6.5. Addition made solely on the basis of statement of third persons which is not justified. In view of the fact and circumstance of the present case the Assessee respectfully prays before Hon'ble ITAT to upheld the order passed u/s 250 of the Act based on the judgment of this Hon'ble Bench in the case of Assessee Company for AY 2007-08.” 14 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. 7.1 The ld. AR of the assessee also filed a detailed paper book in support of the order of the ld. CIT(A) The index of the document submitted by the ld. AR of the assessee are as under:- S. No. Particulars Page No. 1. Copy of written submission submitted before ld. cIT(A) WS 1 to 58 2. Copy of the return of income filed u/s 139(1) of the Income Tax Act, 1961 (the Act”) along with the computation 1-5 3. Copy of the audited balance sheet of the Appellant company. 6-43 4. Copy of the notice dated 12.09.2013 issued u/s 142(1) of the Act 44-46 5. Copy of the reply dated 14.10.2013 filed by the Appellant in response to the notice issued u/s 142(1) of the act 47 6. Copy of the notice dated 28.03.2014 issued u/s 142(1) of the Act. 48-51 7. Copy of the reply dated 21.04.2014 filed by the appellant in response to the notice issued u/s 142(1) of the Act. 52-55 8. Copy of the assessment order dated 02.06.2014 passed u/s 153A r.w.s. 153B /143(3) of the Act. 56-60 9. Copy of the show cause notice dated 15.03.2017 issued under section 263 of the Act. 61-63 10. Copy of the objections dated 24.03.2017 filed by the appellant to show cause notice dated 15.03.2017 64-71 11. Copy of the show cause notice dated 29.03.2017 issued under section 263 of the Act. 72-74 12. Further reply/email dated 30.03.2017 send by the Appellant in response to show cause notice dated 29.03.2017. 75 13. Copy of order dated 31.03.2017 under section 263 of the Act 76-95 14. Notice issued u/s 133(6) and replies filed by company 96-100 15. Copy of notice dated 26.07. 2017 for assessment proceedings under section 263/143(3) of the Act. 101 16. Copy of reply dated 4.09.2014, 18.09.2017, 6.11.2017, 20.11.2017 filed by the appellant in response to the various notice issued under section 263/143(3) of the Act along with: 102 i. The copy of the detail of the name and address of directors. 110-111 ii. The copy of the details, name and addresses of the applicants/persons who have subscribed to shares during the year under consideration in the specific format. 103-105 iii. The copy of the details and source of investment made in shares along with copy of relevant bank account. 106-109 iv. The copy of the details of the following companies comprising of total nos. of shares applied, allotted, address, PAN no., confirmations, payment details, share application form etc: a. M/s Alka Diamond Indus. Limited. b. M/s Kinescope (India) Limited. c. M/s Naman Equipments 86 Constructions Pvt. Ltd. d. M/s Volplast Ltd. 112-212 213-271 272-322 323-386 387-463 464-551 552-575 15 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. e. M/s Trendy Knitwear Ltd. f. M/s Mangal Murti Infra real Pvt. Ltd. g. M/s Anchor Dealers Pvt. Ltd. 17. Copy of SCN dated 04.12.2017 issued under section 142(1) of the Act. 953 18. Copy of reply dated 14.012.2017 filed by the appellant in response to the SCN dated 04.12.2017. 955 19 Copy of Assessment Order dated 25.12.2017 passed under section 263/153 A/143(3) of the Act. 963 S. No. Particulars Page No. 1. Assessment order of Alka Diamonds for AY 2009-10 964-971 2. Investment Schedule of Investor Companies 972-977 3. ROC filing of appellant for FY 2008-09n2009-10 and 2010-11 978-1043 4. Financial Statements of Kinescope India P. Ltd. for F.Y. 2008-09 1044-1055 All the above plethora of documents are clearly established the requirement of provisions of Section 68 of the Act and the assessment year under dispute is mentioned i.e. 2009-10. The provisions of section 68 of the Act is amended by the Finance Act, 2012 and the requirement to prove the source of the source is not applicable in the year under consideration as the assessment year is concerned in 2009-10. In the light of this facts of the case and the assessee based on law prevent in the year under consideration proved the identity, capacity and genuineness of the transaction. In support the ld. AR of the assessee has relied upon the following chart :- Name of Shareholder Investment Amount PAN and ITR Net Worth as on 31.03.2009 Bank statement reflecting payment MCA data Reply of Notice issued u/s 133(6) 16 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. Alka Diamonds Pvt. Ltd. 15,00,000/- AAACA5236D Refer Pg. No. 124 of PB 8,81,85,034/- (Refer Pg. No. 160 of PB) Refer Pg. No. 122- 123 of PB and 577-578 of PB Refer Pg. No. 174 of PB Responded Kinescope India Pvt. Ltd. 10,00,000/- AABCK0527E Refer Pg. No. 216 of PB 8,93,68,566/- Refer page no. 586 of PB Refer Pg. No. 219 of PB Responded Naman Equipment Construction (India) Pvt. Ltd. (Mewar Equipment Pvt. Ltd.) 22,00,000/- AABCM1733A Page no. 278 of PB 80,00,000/- (Refer Pg. No. 292 of PB) Refer Pg. No. 279- 280 of PB and 589-591 of PB Refer Pg. No. 300 of PB Responded Volplast Ltd. 28,00,000/- AABCV8410D Page no. 328 of PB 8,12,73,000/- (Refer Pg. No. 353 of PB) Refer Pg. No. 330- 331 of PB and 593- 595 of PB Refer Pg. No. 362 of PB Responded Trendy Knit Wear Ltd. 26,50,000/- AADCT0860H Page no. 392 of PB 10,69,85,070/- 598-600 of PB Refer Pg. No. 394 of PB Responded Mangal Murti Infrareal Pvt. Ltd. (Convenient Housing Finance Ltd.) 33,50,000/- AAACC6705H Pg. No. 471 of PB 1,32,49,519/- Refer Pg. No. 465 of PB and 602-605 of PB Refer Pg. No. 473 of PB Responded Anchor Dealer Pvt. Ltd. 1,00,00,000/- AAFCA4979C 3,10,50,000/- 607-613 of PB Refer Pg. No. 575 of PB Responded Thus, when the share investment took place in respect of all these 7 companies, the assessee has discharged the burden casted upon it as per provision of Section 68 of the Act. Revenue cannot go beyond the provisions of the Act for the year under consideration and therefore, the contention of the Revenue as regards the various facet of shell company as 17 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. argued hereinabove is not applicable considering the provision of law prevalent. Since, the assessee has proved the identity, capacity and genuineness along with the creditworthiness of these 7 investor company by filing the documents as listed in para above. The ld. AR of the assessee also filed a distinguishment not of the decision of the Sumati Dayal vs. CIT (supra) and the decision of the Hon’ble Apex court in the case of NRA Iron & Steel Pvt. Ltd. 103 taxmann.com 48 with the facts of this case and the said distinguishment is not reproduced hereinabove:- “1. With reference to the hearing held on 05.07.2023 and ground taken by the department while relying upon the judgment in the case of Sumati Dayal v. CIT [1995] 80 taxman 89 (SC), we may humbly submit that said case is distinguishable as below: Distinguishment of Sumati Dayal v. CIT [1995] 80 taxman 89 (SC) S.No. Relevant Facts and issues of Judgment Points of Distinguishment 1. Case opened taxing the winning from races and jackpots. However, in our case is related to the issuance of share and receiving share capital. There is no role of winning from races and jackpots. 2. Assessee's knowledge of racing is very meagre to question the genuineness of income. Not applicable in case of Assessee and general financial transaction of issue of share executed. 3. Assessee's experience to win such numbers of jackpots is contrary to statistical theories and experience of frequencies and probabilities. Assessee is company and controlled and managed by the Boards of directors, who have sufficient experience and business knowledge to execute the transaction of raising share 18 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. 4. Assessee's books do not show drawings on race days or on immediately preceding days for purchase of jackpot tickets. In our case, Assessee has duly shown the preliminary expenses and expenses related raising share capital in Statement of Profit and Loss Account. 5. Assessee's capital account was credited with gross amounts of race winnings, there was no debits either for expenses and purchases of tickets. Assessee's duly shown increase share capital and securities premium in audited balance sheet and investor companies also duly shown the investment in their books of account. 6. If prima facie evidence against the assessee, w.r.t. the receipt of money, and if fails to rebut the same, the said evidence being unrebutted, can be used against him. In our case, the basis of initiating the proceeding is Investigation report of DIT(Inv) Mumbai and alleged that Assesse has taken accommodation entries. However, Assessee has duly rebutted the allegation and basis of Ld. AO by filing various documents like ITR confirmation, Bank statement, Share application forms, allotment letter, AOA or MOA, Financial Statements 7. Apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surroundings circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. In our case, first of all there is no reasons to believe which suggest the apparent is not real. And Even though, if it assumed that apparent is not real then in such case Ld. AO has made enquires and Assessee has submitted all the documentary evidences in support of justification of share capital and share premium raised. 2. In view of the above, the case of Assessee is different from the case of Sumati Dayal v. CIT (supra) and the decision in the said case has been rendered in different set of facts and circumstances which are clearly distinguishable. Accordingly, reliance on the same against the Assesse is not justified. 19 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. 3. The case of Assessee is also different from the case of PCIT v. NRA Iron & Steel Pvt. Ltd. [2019] 103 taxmann.com 48 SC, which is explained as follows: Distinguishment of NRA Iron & Steel Pvt. Ltd. judgement Sr. No. Fact of judgment Distinguishment 1. Some of investor companies were found to be non-existent. Every investor is independent separate legal entity and notice issued u/s 133(6) duly complied by the investor companies. 2. Bank statement not produced to substantiate the source of funds. Bank statements duly submitted which reflecting the payment made to Assessee by the investor companies. 3. Most of investor companies have meager income in their returns. To substantiate the creditworthiness of investor companies, Assessee has submitted chart of net worth. The investor companies have good net worth to invest the amount in the Assessee Company. 4. Addition were made due to assessee company failed discharge the onus by cogent evidence either of creditworthiness or genuineness of companies. Assessee has duly discharged its burden by submitting various documents to substantiate the creditworthiness and genuineness of investors like financial statement, share application forms, allotment letters, bank statements, etc. 4. In view of the above, the case of Assessee is different from the case of PCIT v. NRA Iron & Steel Pvt. Ltd. (supra) and hence distinguishable. Accordingly, reliance on the same against the Assesse is not justified. 5. There is also reliance upon judgement in case of CIT v. Durga Prasad More [1971] 82 ITR 540 (SC) in ground no. 4 of appeal memo filed by department. Distinguishment of NRA Iron & Steel Pvt. Ltd. judgement Sr. No. Fact of judgment Distinguishment 1. Income from property which purchased by assessee as a trustee of the trust cheated by his wife is assessable in the hands of assessee. No case of property transferred and nor the case of were it has been assessed that in whom hands income to be assessed. 2. Assessee’s wife is not shown to have any source of income from which she could This is not the case of assessee, however, there is no finding of the ld. 20 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. built up a huge sum of Rs. 2 lakh in 1940. AO that investor companies invested funds as source by assessee and the investor companies were very much capable of making any investment. Even otherwise, assessee cannot be fastened upon the liability of proving source of the source. 3. Sale deed in favour of assessee was executed even before the trust deed executed. There is no such case of executing documents prior to transaction. 4. Consideration for purchase of property was paid by assessee husband on behalf of trust orally created by his wife. In our case, all the considerations were paid for by the investor companies. This is not the case where assessee has paid consideration on behalf of investors and even no such evidence was found during search proceedings in the case of assessee. 6. In view of the above, the case of Assessee different from the case of CIT v Durga Prasad More (supra). Accordingly, reliance on the same against the Assesse is not justified. 7. Further, it is humbly submitted that the majority of investment amount was received from the family members, relatives, or friends of promoters of Assessee or other investment entities. The promoter group of Assessee holds the majority of the shareholding in the Assessee Company. The purpose of the investment by the investor's entities was their business decision of appreciation in value of investment and for long term purposes and not for any regular source of income. There is no legal obligation on the Assessee Company to pay dividends to its equity shareholders. Dividends are the distribution of profits to shareholders, and a company can choose to retain its profit for any other purposes. The non-distribution of dividends to the shareholders cannot be taken as a basis for treating the investment as non- genuine. 8. It is also humbly submitted that out of these seven investors, four investors sold their holding in AY 2011-12 Details of which is as follows: Changes in shareholding S.No. Name of Shareholder No of shares as on 31.03.2009 No of shares as on 31.03.2022 Sold to whom/ Purchased from whom (Along with no. of shares) 21 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. 1 Alka Diamonds Industries Ltd. 37,500 Avneesh Impex Pvt. Ltd. 2 Kine Scope India Pvt. Ltd. 10,000 Anchor Dealers Pvt. Ltd. 3 Trendy Knitwear Ltd. 26,500 26,500 4 Convenient Housing Finance Ltd. (Mangal Murti Infrareal) 33,500 Anchor Dealers Pvt. Ltd. 5 Volplast Ltd 28,000 28,000 6 Mewar Equipment Pvt. Ltd. (Naman equipment) 22,000 Anchor Dealers Pvt. Ltd. 7 Anchor Dealers Pvt. Ltd. 1,00,000 1,65,500 1. Kinescope India Pvt. Ltd. 2. Convenient Housing Finance Ltd. 3. Mewar Equipment Pvt. Ltd. 9. As evident from the above table that out of 7 investors, 4 sold their shares toin the AY 2011-12 and the relevant assessment year was duly assessed by the Ld. ACIT, CC, Ajmer vide its order dated 02.06.2014. A copy of the said order is also enclosed for your ready reference. 10. During the course of assessment proceedings, Assessee duly submitted all relevant records relating to the share capital and share premium raised. If Ld. AO had any doubt, he could have proceeded with further enquiry, which was not done. It is again submitted that Assessee has received share capitalwith share premium from the family members, relative and friends of promoters group, not from Praveen Kumar Jain and any other 22 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. entry operators. Assessee has received Rs. 30 per share premium from the one of alleged controlled entity of Praveen Kumar Jain against the face value of Rs. 10 per share which is not a case of high premium. 11. There is no doubt on the identity of investors, and their creditworthiness and genuineness are also sustained by the documentary evidence submitted before your honors as the transactions has been done through banking channel only and confirmed by respective investor during the assessment proceedings also. Assessee places reliance on the various judgments of hon'ble courts, for which separate case compilation has been filed in last hearing held on 23.08.2023. Further, the case of Assesse is squarely covered with the judgment of this Hon'ble Bench in Assessee's own case for AY 2007- 08 in ITA no. 604/JP/2016, wherein it was held that: “14. The assessee has filed affidavits, copy of the return of income, Board resolutions and the financial statements of the investor companies. Further, the notices have been issued to five investor companies u/s 133(6) by the Assessing officer and they have submitted the necessary documentation in support of the investments so made by them in the assessee company. Basis the same, the Assessing Officer has given a finding that on verification of documents submitted by the assessee and called from the investor companies, it is found that the amount of investment agrees with the balance reflected in the books of the assessee as well as investors companies. We therefore find that the assessee company has duly discharged the initial onus cast on it u/s 68 and once initial onus has been satisfied by the assessee company to the satisfaction of the Assessing officer and once the Assessing officer is satisfied with the documentation so submitted by the assessee company and which has also been confirmed by him directly from the investor companies, we failed to understand as to why in the body of the assessment order, he has merely proceeded basis the information received from the Investigation Wing, Mumbai in respect of search and seizure operation in case of Sh. Praveen Kumar Jain Group and has kept silent on the documentation and verification so carried out by him in respect of direct evidences so submitted by the assessee company. 15. Assessing Officer placed reliance of the statement of Shri Uttam Hinger who is brother-in- law of Shri Praveen Kuamr Jain, the statement of Sh. Chander Shekhar Goyal and Shri Dinesh Choudhary which all were recorded u/s 132(4)/131 during the course of search proceedings conducted by the Investigation Wing, Mumbai. In this regard, the ld AR has contended that the assessee company has requested for copy of their statements and even requested to cross- examine Sh. Praveen Kumar Jain during the course of assessment proceedings, however, the Assessing officer has not provided either the copy of their statements or allowed an opportunity to cross-examine Sh. Praveen Kumar Jain. We find the said contentions to be factually correct. Therefore, following the legal proposition laid down by the Hon'ble Supreme Court in case of Andaman Timber Ind. (Supra), the addition cannot be made in the hands of the assessee solely 23 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. relying on the statement of Sh. Praveen Kumar Jain and others without allowing cross- examination to the assessee company. 16. Now coming to the contention of the ld AR that in absence of any incriminating documents found during the course of search in case of the assessee company, no additions can be made in the hands of the assessee company. We find that the assessee has taken this contention before the Id CIT(A) as part of its ground of appeal no. 3 as we have noted above, however the same was not specifically dealt with by the ld CIT(A) and the ground to that extent was dismissed. We therefore find that even though the assessee has not filed any cross-objection, under Rule 27, the assessee shall be entitled to defend the order of the ld CIT(A) by raising this contention before us. In this regard, useful reference can be drawn to the decision of Hon'ble Gujarat High Court in case of PCIT vs Sun Pharmaceuticals Industries Ltd [2017] 86 taxmann.com 148. "17. In the instant case, we find that the assessee has originally filed its return of income on 10.10.2007 and time limit for issuance of notice u/s 143(2) has expired on 30.09.2008 before the date of search which was carried out on 26.09.2012. Therefore, on the date of search, the assessment for the impugned assessment year was not pending/abated and already stood completed. Further, on perusal of the assessment order, we find that there is no discussion or finding by the Assessing Officer that any incriminating document was found during the course of search relating to the investment made by any of these companies in the assessee company, rather the whole basis of assessment is the information received from the Investigation Wing, Mumbai during the course of assessment proceedings. Therefore, in absence of any incriminating documents found during the course of search in case of the assessee company, the law is well settled that no addition may be made in the hands of the assesse company. The decision of the Hon'ble Delhi High Court in case of Meeta Gutgutia (Supra), the Hon'ble Gujarat High Court in case of Saumya Construction (P.) Ltd (Supra), and Hon'ble Rajasthan High Court in case of Jai Steel (India) ACIT (Supra) support the case of the assessee company. 18. In light of the above discussions and in the entirety of facts and circumstances of the case, the matter is decided against the Revenue and in favour of the assessee company." 12. In view of the above, it is requested that the appeal filed by the department be dismissed.” 7.2 Considering this fact and distinguishing note placed on record, the ld. AR of the assessee vehemently submitted that the Revenue cannot improve the facts and lawpreventat the time when the original assessment is 24 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. completed and the evidences advance of the amendment in section 68 of the Act is not retrospective but prospective in nature. Therefore, considering the plethora of evidence placed on record and considering the decision of the apex court in the case of Lovely Export the addition has been rightly deleted by the ld. CIT(A). The assessee clearly and categorically established the identity, genuineness and creditworthiness of the all this 7 investor company. The ld. AR of the assessee placed on record, the assessment order for the year under consideration i.e. assessment year 2009-10 of this investor company and submitted that the Revenue has already been verified the investment of that Alka Diamond company and in that case of the Alka Diamonds Pvt. Ltd. the assessment of that company cannot be challenged by the Revenue in the case of this company and therefore, relying in the assessment placed on record at page no. 964 to 971 of the paper book he submitted that the even the finding of the PCIT is also not correct. Thus, he challenged the contention of the Revenue. The ld. AR of the assessee further submitted that the assessment pursuant to the search in this case has been completed and there is no cash trail has been found in the search. Pursuant to the search even this issue of investment made by this 7 investors company has been examined by the ld. AO by issue of specific notice of section 153A of the Act. In that case the assessee placed 25 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. on record all the evidence proves that the investment made by this 7 investors company are in accordance with law and genuine investment and these shares are still in the name of these investor company itself proves the fact that these were investment made by that investor company. The ld. AR of the assessee also argued that the notices were issued to all investors company and the same were compiled, this fact is also not disputed by the Revenue. Thus, relying on the decision of the CIT vs. Lovely Exports (P.) Ltd. 216 CTR 195 (SC) decided by the Hon’ble Apex Court and the decision of the Hon’ble Jurisdictional High Court in the case CIT vs. Morani Automatives (P.) Ltd 264 CTR 86 (Raj.). Based on these the ld. AR of the assessee submitted that the primary onus has been discharged the obligation casted upon it and the appeal of the revenue is not sustainable considering the binding judicial precedent.The ld. AR of the assessee thus stated that “if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given by the Assessing Officer, then the department is free to proceed to reopen their individual assessments in accordance with law but this amount of share money cannot be regarded as undisclosed income under section 68 of the assessee company.”The assessee has complied the provisions of section 68 the same is reproduced here in below: 26 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. 68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year: 35 [Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless,— (a) the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that] where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless— (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: 36 [Provided also] that nothing contained in the first proviso 37 [or second proviso] shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10. 7.3 The ld. AR of the assessee also submitted that there is no incriminating documents or cash trail found during the course of search proceedings and search assessments are completed and there is no contrary finding to the credit appearing in the books of account of the assessee. 7.4 The Revenue has not placed on record the material relied upon and no opportunity to cross examine Mr. Praveen Kumar Jain were provided to the assessee. The notices were issued u/s 133(6) of the Act to all investors 27 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. company they have complied and received the notice, therefore, the investments made by them is clearly genuine in support of the genuineness of the transactions and creditworthiness of the 7 investors company. The ld. AR of the assessee submitted a chart to establish that the investment made by them are genuine and the investor capacity to investment in the shares of the investing company which is reproduced as under:- S. No . Name of Shareholder Investment Amount PAN and ITR Net Worth as on 31.03.2009 Bank statement reflecting payment MCA data Reply of Notice issued u/s 133(6) 1. Alka Diamonds Pvt. Ltd. 15,00,000/- AAACA5236D Refer Pg. No. 124 of PB 8,81,85,034/- (Refer Pg. No. 160 of PB) Refer Pg. No. 122- 123 of PB and 577-578 Refer Pg. No. 174 of PB Responded 2. Kinescope India Pvt. Ltd. 10,00,000/- AABCK0527E Refer Pg. No. 216 of PB 8,93,68,566/- Refer page no. 586 of PB Refer Pg. No. 219 of PB Responded 3. Naman Equipment Construction (India) Pvt. Ltd. (Mewar Equipment Pvt. Ltd.) 22,00,000/- AABCM1733A Page no. 278 of PB 80,00,000/- (Refer Pg. No. 292 of PB) Refer Pg. No. 279- 280 of PB and 589-591 of PB Refer Pg. No. 300 of PB Responded 4. Volplast Ltd. 28,00,000/- AABCV8410D Page no. 328 of PB 8,12,73,000/- (Refer Pg. No. 353 of PB) Refer Pg. No. 330- 331 of PB and 593- 595 of PB Refer Pg. No. 362 of PB Responded 5. Trendy Knit Wear Ltd. 26,50,000/- AADCT0860H Page no. 392 of PB 10,69,85,070/- 598-600 of PB Refer Pg. No. 394 of PB Responded 28 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. 6. Mangal Murti Infrareal Pvt. Ltd. (Convenient Housing Finance Ltd.) 33,50,000/ - AAACC6705H Pg. No. 471 of PB 1,32,49,519/- Refer Pg. No. 465 of PB and 602-605 of PB Refer Pg. No. 473 of PB Responded 7. Anchor Dealer Pvt. Ltd. 1,00,00,000/ - AAFCA4979C 3,10,50,000/- 607-613 of PB Refer Pg. No. 575 of PB Responded 7.5 The similar issue has been raised and in the case of the assessee for the assessment year 2007-08 in ITA No. 604/JP/2019 dated 29.07.2019 on this argument, the ld. AR of the assessee rest with his argument and submitted that there is no merit in the grounds raised by the Revenue and the appeal of the Revenue is required to be dismissed. In addition to the above detailed arguments has placed reliance on the following judicial precedent favour of the fact of the case decision relied upon are as under:-  M/s Choice Buildestate Private Limited v. ITO ITA No. 431 & 432/JP/2016 dated 28.03.2018  Jadau Jewellers & Manufacturers Pvt. Ltd. vs. ACIT 83 taxmann.com 149 (JP Trib.)  CIT v. Lovely exports (p.) Ltd. 216 CTR 195 (SC)  CIT vs. Morani Automatives (p.) Ltd. (2014) 264 CTR 86 ( Raj.H.C.)  CIT v. Jai Kumar Bakliwal (2014) 366 ITR 217 (Raj)  M/s Andaman Timber Industries vs. CIT (2015) 62 taxmann.com 3 (SC)  Kishinchand Chellaram vs. CIT (1980) 125 ITR 713 (SC)  CIT vs. Smt. Sunita Dhadda (2018) 100 taxmann.com 526 (SC) 29 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd.  Pr. CIT vs. Abhisar Buildwell (P.) Ltd. (2023) 149 taxmann.com 399 (SC)  Pr. CIT vs. Meeta Gutgutia (2018) 96 taxmann.com 468 (SC)  Jai Steel (India) vs. ACT (2013) 36 taxmann.com 523 (Raj. H.C.)  CIT vs. Dr. S. Muralidhar and Vidhu Bakhru (2015) 61 taxmann.com 412 (Delhi H.C.)  CIT vs. Deepak Kumar Agarwal (2017) 86 taxmann.com 3 (Bombay H.C.)  Pr. CIT vs. Sun Pharmaceuticals Industries Ltd. (2017) 86 taxmann.com 148 (Gujarat H.C.)  CIT vs. Steller Investment Ltd. (2001) 251 ITR 263 (SC)  Divine Leasing & Finance Ltd. (2008) 299 ITR 268 (Delhi H.C.)  Pr. CIT vs. Chain House International (P.) Ltd. (2018) 98 taxmann.com 47 (MP H.C.)  Pr. CIT vs. Adamine Construction (P.) Ltd. (2019) 107 taxmann.com 85 (SC)  Pr. CIT vs. Rohtak Chain Co. (P.) Ltd. (2019) 110 taxmann.com 59 (SC)  Pr. CIT vs. Bharat Securities (P.) Ltd. (2020) 113 taxmann.com 32 (SC)  Cornerstone Property Investments (P.) Ltd. vs. ITO (2023) 152 taxmann.com 256 (Kar H.C.)  Pr. CIT vs. Goodview Trading (P.) Ltd. (2017) 77 taxmann.com 204 (Delhi H.C.) 8. We have heard the rival contentions and perused the material placed on record. The only issue raised by the Revenue in this appeal is that 7 investors company made and investment in the share of the company for an amount of Rs. 2.35 crores as detailed hereinbelow:- 30 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. Sr. No. Name of alleged investor (M/s) No. of share shown to have been issued Amount shown to have been received for shares Amount of premium shown to have been received Total amount shown to have been received. 1. Alka Diamond Industries Ltd. 37500 37500 1125000 1500000 2. Kisescop India P. Ltd. 10000 100000 900000 1000000 3. Namon Equipment & Construction (India) Pvt. Ltd. (Mewar Equipment Pvt. Ltd.) 22000 220000 1980000 2200000 4. Volplast Ltd. 28000 280000 2520000 2800000 5. Trendy Knit Wear Ltd. 26500 265000 2385000 2650000 6. Mangal Murti Infrareal Pvt. Ltd. ( Convenient Housing Fance Ltd.) 33500 335000 3015000 3350000 7. Anchor Dealer Pvt. Ltd. 100000 1000000 9000000 10000000 257500 2237500 20925000 23500000 As it is evident that in this case pursuant to a search the case of assessee reopened and the assessment is completed u/s 153A r.w.s. 143(3) of the Act accepting the return of income of the assessee. The Bench also noted that the issue of share capital has been examined in the search related assessment wherein the assessee has given required details vide letter dated 21.04.2014 that point No. 13 (the assessee’s paper book no. 54). The Bench noted based on the plethora of documents submitted by the assessee it has proved that the requirement of section 68 of the Act to prove the identity, capacity and genuineness of the transaction has been satisfied based on the document placed on record. There is no contrary material brought on record to disbelief the evidence already placed on record. The Bench also noted that the ld. PCIT has issued notice u/s 263 of the Act merely on the ground that the search and seizure action conducted by the DIT Investigation, Mumbai in the case of Mr. 31 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. Praveen Kumar Jain wherein the Revenue revealed that he has engaged in providing accommodation entries, share application money loans, purchase and sale transaction etc. The company M/s Alka Diamonds Industries Ltd. is a company managed by Praveen Kumar Jain therefore proceedings u/s 263 of the Act where initiated in the case of the assessee to examine this issue and the ld. AO based on this information invoking the provisions of Section 263 set aside the assessment in the 3 rd round of litigation and the assessee was granted relief by the ld. CIT(A). 8.1 Since the case of the assessee was set aside u/s 263 of the Act merely on account of the investment made by the investor M/s. Alka Diamonds Industries Ltd., In support of the investment made by that company ld. AR of the assessee placed on record the assessment order of that company wherein the issue of investment made by the assessee company has already been examined and there is not separate observation in the assessment order. All the investors company received to the notice u/s 133(6) of the Act and in support of creditworthiness of the assessee filed a details giving following information:- I. PAN No. and Copy of ITR II. Copy of balance sheet giving net worth of the investor company 32 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. III. Bank statement showing the entry of investment made of this company to the assessee company The profile the investor company as appearing on the website of the Ministry of Corporate Affairs showing that all these companies are not shell company but active company and regularly complying the filing of data to the Ministry of Corporate Affairs notices were issued to all 7 investors company u/s 133(6) of the Act and 7 investors company have responded that notices having confirmed to the investment made. 8.3 All 7 investors company are still having the investment in the assessment company disproved that there are not real investor in the assessee company. We have persuaded the various decision cited by both the parties. It is not under dispute that the assessment year under consideration is the assessment year 2009-10 has been completed after the search the assessment is completed accepting the investment. The law has been amended to prove the source of the source in the case of share application money u/s 68 of the Act has been amended in 2012 and thus the fact of the case are covered with the decision of Hon’ble Apex Court in the case of CIT vs. Lovely Exports (P.) Ltd (supra) wherein the Hon’ble Apex Court answered the substantial question of law as under:- 33 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. “if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given by the Assessing Officer, then the department is free to proceed to reopen their individual assessments in accordance with law but this amount of share money cannot be regarded as undisclosed income under section 68 of the assessee company.” The case of the assessee is also supported with the the decision of the Hon’ble Jurisdictional High Court in the case of CIT vs.Morani Automatives (P.) Ltd. (supra) wherein the jurisdictional High Court held as under:- “10. The points as sought to be raised by the appellant-revenue in the present case are all the matters relating to appreciation of evidence. The relevant factors have been taken into account and considered by the appellate authorities before returning the findings in favour of the assessee. Even as regards the three referred share capital contributors, it is noticed that they are existing assessees having PA numbers; and are being regularly assessed to tax. The appellate authorities cannot be said to have erred in deleting the additions in their regard too at the hands of assessee-company. 10. Ultimately, the question as to whether the source of investment or of credit has been satisfactorily explained or not remains within the realm of appreciation of evidence; and the Courts have consistently held that such a matter does not give rise to any substantial question of law. In the case of CIT v. Orissa Corpn. (P) Ltd. (1986) 159 ITR 78/25 Taxman 80F(SC), the Hon'ble Supreme Court held as under- “13. In the case, the assessee had given the name and addresses of the alleged creditors. It was in theknowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in 13. In this case, the assessee had given the names the file of the Revenue. The Revenue, apart from issuing notices under s. 131 at the instance of the 34 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. assessee, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so- called alleged creditors. In those circumstances, the assessee could not do any thing further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises." 12. In the case of CIT v. Chandra Prakash Rana [2001] 48 DTR 271 (Raj.), this Court noticed similar nature grounds urged on behalf of the revenue and found the same not leading to any substantial question of law. This Court noticed, observed, and held as under: "7. Learned counsel for the appellant (Revenue) contended that firstly Tribunal erred in accepting the explanation offered by assessee in relation to source of income. His second submission was that what was offered by assessee was no explanation and hence should not have been accepted and lastly learned counsel made sincere attempt on his part after taking us through factual scenario of the explanation and contended that it can never be taken as satisfactory explanation for deleting the addition made by AO. We do not agree to this submission for more than one reason. 8. In the first place, it is a pure question of fact, what to say question of law, much less substantial question of law. Secondly, this Court cannot again in this appeal undertake the examination of factual issues nor can draw factual inferences on the basis of explanation offered by assessee. Thirdly, once the explanation is accepted by the two appellate Courts i.e. CIT(A) and Tribunal in this case, then in such event, a concurrent finding recorded on such explanation by two appellate Courts is binding on the High Court. 9. Perusal of impugned finding quoted supra would go to show that Tribunal did examine the explanationoffered by assessee in detail and then recorded a finding for its 35 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. acceptance. Such finding when challenged does not constitute a substantial question of law within the meaning of s. 260A ibid in an appeal arising out of such order. 10. In our opinion, therefore, once the CIT(A) and Tribunal accepted the explanation of assessee and accordingly, deleted certain additions made by AO holding the transaction of shares to be genuine, then it would not involve any substantial issue of law as such. In other words, this Court in its appellate jurisdiction under s. 260A ibid, would not again de novo hold yet another factual inquiry with a view to find out as to whether explanation offered by assessee and which found acceptance to the CIT(A) and Tribunal is good or bad, or whether it was rightly accepted, or not. It is only when the factual finding recorded had been entirely de hors the subject, or that it had been based on no reasoning, or based on absurd reasoning to the extent that no prudent man of average judicial capacity could ever reach to such conclusion, or that it had been found against any provision of law, then a case for formulation of substantial question of law on such finding can be said to have been made out. 11. In our view, no such error could be noticed by us in the impugned order because as observed supra, the Tribunal did go into the details of explanation offered by assessee and then accepted the explanation by placing reliance on the documents filed by assessee. As a consequence thereof, the additions made by AO came to be deleted.” 13. In CIT v. Shree Barkha Synthetics Ltd. [2004] 270 ITR 477/2003] 131 Taxman 114 (Raj.), in a similar nature matter, this Court observed that the Tribunal having found that the companies from which the share application money had been received by the assessee-company were genuinely existing and the identity of the individual investors were also established and they had confirmed the fact of making investment, the finding that assessee had discharged initial burden and addition under Section 68 could not be sustained, was essentially a finding of fact. This Court said,- "19. A perusal of the aforesaid finding goes to show that deletion has been made on appreciation of evidence, which was on record Finding that there was existence of investors and their confirmation has been obtained, were found to be satisfactory. All these conclusions are conclusions of fact based on material on record and, therefore, 36 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. cannot be said to be perverse so as to give rise to question of law, which may be required to be considered in this appeal under s.260A of the IT Act." 14. The ratio of the decisions aforesaid directly applies to the present case too. Herein, as noticed, the appellate authorities have returned the findings of fact in favour of the assessee after due appreciation of the evidence on record, on relevant considerations, and on sound reasonings. These findings have neither been shown suffering from any perversity nor appear absurd nor are of such nature that cannot be reached at all. Thus, no case for interference in the findings of the appellate authorities is made out. In the result, the appeal fails and is, therefore, dismissed.” On being consistent to the above decision cited and relied upon we are of the considered view that the assessee has established the capacity, genuineness and identity of these 7 investors company from which the share application money has been received by the assessee company. Therefore, the burden costed upon the assessee u/s 68 of the Act has been established and therefore, considering all the evidences and legal decision cited hereinabove. We are considered view that the addition has rightly been deleted by the ld. CIT(A) and we see no infirmity in the finding of the ld. CIT(A). The decision and arguments made by the ld. DR be relevant in the case if the assessment year is related after amendment made in the Act by the Finance Act, 2012 and in the year under consideration considering the provisions of Section 68 of the Act the assessee fully complied the 37 ITA No. 87/JPR/2023 DCIT vs. Puja Synthetics Pvt. Ltd. provisions of law and the case of the assessee is squarely covered by the decision of the Hon’ble Apex court in the case of CIT vs. Lovely Exports (P.) Ltd. (supra) and therefore, the appeal of the Revenue has no merit and all the grounds are effectively raised in ration to the addition made u/s 68 of the Act thus, based on the finding recorded hereinabove, we see no merit in the grounds so raised challenging the deletion of addition for an amount of Rs. 2.35 Crores in the case of the assessee. Based on these observations the appeal of the Revenue stands dismissed. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 09/11/2023. Sd/- Sd/- ¼jkBksM deys'k t;UrHkkbZ ½ ¼MkWa-,l- lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 09/11/2023 *Santosh vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- DCIT, Central Circle, Ajmer. 2. izR;FkhZ@ The Respondent- Puja Synthetics Private Limited, Bhilwara. 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File ITA No. 87/JPR/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar