M/s. Blue Lotus Designers Pvt. Ltd., Kolkata V. ITO, Ward-7(4), Kolkata, Kolkata

ITA 941/KOL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9451 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 04-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit; Retrospective amendment; Question of law; Accommodation entries; Onus to prove; Set aside
• Section: 271(1)(c); 143(3); 260A; 133(6); 195; 208; 13; 131; 68; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 941 / KOL / 2017 ASSESSMENT YEAR :2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD., 6/1C, PRANATH CHOWDHURY LANE, KOLKATA-700 002 [ PAN NO.AAECB 9302 R ] V/S . INCOME TAX OFFICER, WARD-7(4), AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI MIRAJ D. SHAH, ADVOCATE /BY RESPONDENT SHRI SUPRIYO PAL, JCIT, SR-DR /DATE OF HEARING 07-11-2019 /DATE OF PRONOUNCEMENT 08-01-2020 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-16 KOLKATAS O RDER DATED 27.02.2017 PASSED IN CASE NO.755/CIT(A)-16/KOL/2015-16/W-7(4) INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT T HE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GROUND RAISED IN THE INSTANT APPEAL READS THAT BOTH THE LOWER AUTHORITIES HAVE ERRED I N LAW AND ON FACTS IN TREATING ITS SHARE CAPITAL / PREMIUM OF 2,01,50,000/- AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. THE CIT(A)S DETAILED DISCUSSION TO THIS EFFECT READS AS UNDER:- 3 THE ASSESSEE HAS RAISED 7 GROUNDS OF APPEAL. THE ISSUE IS ADDITION RS.2,01,50,000/- U/S 68 OF THE INCOME TAX ACT AS UN EXPLAINED CASH CREDIT. THE ORDER IS PASSED U/S 143(3) OF THE INCOME TAX ACT. ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 2 4 THE AR HAS FILED ADDITIONAL GROUNDS OF APPEAL. SA ME HAVE BEEN ADMITTED. THE CRUX OF THE GROUNDS OF APPEAL IS THAT NO ADVERSE INFEREN CE CAN BE DRAWN ON NON- PRODUCTION OF DIRECTORS. THE AO HAS RELIED UPON PLE THORA OF JUDGMENTS ON PAGE 5 OF THE ASSESSMENT ORDER. ALL THESE DECISIONS PUT ONUS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTION. SAME HAS NOT BEEN D ONE HERE. HENCE, THESE GROUNDS ARE DISMISSED. 5 THE AR HAS FILED VARIOUS DOCUMENTS ALONG WITH THE PAPER BOOK THE AR HAS ARGUED THAT ALL THE APPLICANTS ARE REGULAR ASSESSEE. COPIE S OF BANK ACCOUNTS WERE FILED BEFORE THE AO. THE CONTENTION OF THE AO IS THAT DU RING THE COURSE OF ASSESSMENT, NO COMPLIANCE WAS MADE EITHER BY THE COMPANY OF THE AR TO PROVE THE GENUINENESS OF THE TRANSACTION. SUMMONS U/S. 131 REMAINED UNCOMPLI ED. RELIANCE IS MADE UPON THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS . NIPUN BUILDERS PVT. LTD. 30 TAXMAN 292 (2013). THE AO HAS RELIED UPON THE JUDGM ENT OF CIT VS. PRECISION FINANCE PVT. LTD. (1994) 208 ITR 465 AND OTHER VARI OUS JUDGMENTS. 6. HON'BLE CALCUTTA HIGH COURT IN MS RAJMANDIR ESTA TES PVT. LTD. VS. PCIT, KOLKATA DEALT WITH ALL THE JUDGMENTS ON THIS ISSUE AND CAME TO THE CONCLUSION THAT THE TRANSACTION WAS NOMINAL RATHER THAN REAL. THE CREDI TWORTHINESS OF THE SHAREHOLDERS WAS NOT PROVED. EACH ONE OF THEM RECEIVED FROM SOME BODY AND THAT SOMEBODY RECEIVED FROM A THIRD PERSON. THEREFORE, HON'BLE CA LCUTTA HIGH COURT HELD THAT ALL THE SHAREHOLDERS ARE MERE NAME LENDERS. 7 HENCE, RELYING UPON THE JUDGMENT OF HON'BLE JURIS DICTIONAL HIGH COURT THE ADDITION OF THE AO WORTH RS.2,01,50,000/- IS CONFIRMED , AND THE APPEAL OF THE ASSESSEE IS DISMISSED . 3. LEARNED AUTHORIZED REPRESENTATIVE VEHEMENTLY CON TENDED DURING THE COURSE OF HEARING THAT THE ASSESSEE HAD VERY WELL D ISCHARGED ITS PRIMARY ONUS OF PROVING IDENTITY, GENUINENESS AND CREDITWORTHINE SS OF ALL TWENTY-TWO INVESTORS BY FILING THEIR AUDITED ACCOUNTS, INCOME- TAX RETURN ACKNOWLEDGEMENTS, CERTIFICATES OF INCORPORATION, BA NK STATEMENTS AND AS WELL AS SOURCE OF SOURCE AS IS EVIDENT FROM CASE RECORDS RUNNING INTO 359 PAGES. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD F ILED ALL THOSE PARTICULARS VERY WELL DURING THE COURSE OF ASSESSMENT WHICH HAV E NEITHER BEEN DEALT WITH NOR EVEN TAKEN NOTE IN EITHER OF THE LOWER PROCEEDI NGS. THE REVENUES CASE ON THE OTHER HAND IN TUNE WITH CIT(A)S DETAILED DI SCUSSION IS THAT THE ASSESSING OFFICERS U/S 131 SUMMONS REMAINED UN-COM PLIED WITH AS PER LOWER APPELLATE FINDINGS UNDER CHALLENGE. IT IS ALSO EMPH ASIZED THAT ALL OF THE ASSESSEES INVESTOR PARTIES ARE ACCOMMODATION ENTRY PROVIDERS WHICH HAVE BEEN RIGHTLY TREATED AS BOGUS IN BOTH THE LOWER PRO CEEDINGS. ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 3 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. WE NOTICE THAT THE CIT(A)S PRIMARY REASON FOR AFFIRMI NG THE ASSESSING OFFICERS ACTION MAKING THE IMPUGNED ADDITION IS THAT SEC. 13 1 SUMMONS ISSUED FOR THE PURPOSE OF PROVING THE THREE PARAMETERS OF IDENTITY , GENUINENESS AND CREDITWORTHINESS OF THE IMPUGNED SHARE APPLICATION / PREMIUM SUM PAGE 172 TO 176 IN THE PAPER BOOK SPEAK OTHERWISE. THE SAME CONTAIN THE ASSESSMENT NOTINGS FROM 08.08.2013 TO 10.07.2015. IT TRANSPIRE S THEREFROM THAT THE ASSESSING OFFICER HAD ISSUED U/S 131 PROCESS TO THE DIRECTORS ON 12.02.2015 FOR 19.02.2015. THE CASE THEN WAS ADJOURNED TO 24.0 2.2015. WE NOTICE FROM PAGE 174 OF THE PAPER BOOK TO THIS EFFECT THAT THE ASSESSEE ITSELF AS WELL AS ITS INVESTORS HAD VERY WELL REPLIED TO THE ASSESSING OF FICERS SECTION 131 SUMMONS. THE SAME WERE DULY PLACED ON RECORD THE S AME BEFORE HIM. THERE IS NO FURTHER NOTINGS ASKING THE ASSESSEE TO FILE A NY OTHER DETAILED EVIDENCE FROM ASSESSING AUTHORITYS SIDE NOR IT HAD ASKED TH E TAXPAYER TO PRODUCE ALL OF ITS INVESTOR PARTIES IN PERSON. IT THEREFORE SUFFIC IENTLY EMERGES FROM THE CASE RECORDS THAT NEITHER THE ASSESSING OFFICERS DETAIL ED DISCUSSION IN HIS ASSESSMENT ORDER DATED 26.03.2015 HOLDING THE ASSES SEE TO HAVE FAILED TO DISCHARGING THE ABOVE THREE PARAMETERS NOR THE CIT( A)S FINDINGS THAT U/S 131 SUMMONS REMAINED UN-COMPLIED; ARE IN CONFORMITY WIT H THE CASE RECORDS. THIS TRIBUNALS CO-ORDINATE BENCHS DECISION IN CASE OF BIDIT FINANCIAL MANAGEMENT PVT. VS. DCIT, CIRCLE-7(1), KOLKATA IN ITA NO.579/KOL/2017 DECIDED ON 15.03.2019 HAS DISCUSSED THE ENTIRE LEGAL AND FACTU AL MATRIX OF SHARE CAPITAL WHILST DECIDING THE ISSUE IN ASSESSEES FAVOUR AS UNDER:- 29. IN THE INSTANT CASE BEFORE US, WE ALSO NOTE TH AT THE SHARE SUBSCRIBING COMPANIES ARE DULY ASSESSED TO INCOME TAX. THE LD A R HAD PLACED ON RECORD THE COPIES OF THE ASSESSMENT ORDERS FRAMED IN THE C ASES OF SEVERAL OF THE SHARE SUBSCRIBING COMPANIES, AS NOTED ABOVE. IT THE REFORE CANNOT BE DISPUTED THAT THE SHARE SUBSCRIBING COMPANIES ARE NOT IN EXI STENCE. FROM THE ASSESSMENT ORDERS, IT IS NOTED THAT THE SHARE SUBSC RIBING COMPANIES ARE DULY ASSESSED TO INCOME TAX AND THEIR INCOME TAX PARTICU LARS TOGETHER WITH THE COPIES OF RESPECTIVE INCOME TAX RETURNS WITH THEIR BALANCE SHEETS ARE ALREADY ON RECORD. WE ALSO FIND THAT THE LD. CIT(A) HAD CAT EGORICALLY STATED THAT THE SCRUTINY ASSESSMENTS WERE FRAMED ON THE SHARE SUBSC RIBING COMPANIES FOR THE ASST YEAR 2012-13 WHICH SHOWS THEIR EXISTENCE IS GE NUINE AND TRANSACTIONS ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 4 CARRIED OUT BY THEM WERE THE SUBJECT MATTER OF EXAM INATION BY THE INCOME TAX DEPARTMENT IN SCRUTINY PROCEEDINGS. THIS FACT HAS N OT BEEN CONTROVERTED BY THE REVENUE BEFORE US. 30. WE MAY GAINFULLY REFER TO THE JUDGMENT IN THE C ASE OF PR. CIT VS PARADISE INLAND SHIPPING (P) LTD (84 TAXMANN.COM 58) WHEREIN THE BOMBAY HIGH COURT HAD DELETED SIMILAR ADDITION ON SIMILAR SET OF FACT S MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS AND THE SLP FILED BY THE R EVENUE AGAINST THE JUDGMENT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. THE RELEVANT EXTRACTS OF THE JUDGMENT IS AS FOLLOWS: 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATIONS TO THE RIVAL CONTENTIONS OF THE LEARNED COUNSEL AND WE HAVE ALSO GONE THROUG H THE RECORDS. THE BASIC CONTENTION OF THE LEARNED COUNSEL APPEARING F OR THE APPELLANTS REVOLVES UPON THE STAND TAKEN BY THE APPELLANTS WHE THER THE SHAREHOLDERS WHO HAVE INVESTED IN THE SHARES OF THE RESPONDENTS ARE FICTITIOUS OR NOT. IN THIS CONNECTION, THE RESPONDE NTS IN SUPPORT OF THEIR STAND ABOUT THE GENUINENESS OF THE TRANSACTION ENTE RED INTO WITH SUCH COMPANIES HAS PRODUCED VOLUMINOUS DOCUMENTS WHICH, INTER ALIA, HAVE BEEN NOTED AT PARA 3 OF THE JUDGMENT OF THE CIT APP EALS WHICH READS THUS : 'THE ASSESSMENT IS COMPLETED WITHOUT REBUTTING THE 550 PAGE DOCUMENTS WHICH ARE UNFLINCHING RECORDS OF THE COMP ANIES. THE LIST OF DOCUMENTS SUBMITTED ON 09.03.2015 ARE AS FOLLOWS : 1. SONY FINANCIAL SERVICES LTD. - CIN U74899DL1995P LC068362- DATE OF REGISTRATION 09/05/1995 6. ON GOING THROUGH THE DOCUMENTS WHICH HAVE BEEN PROD UCED WHICH ARE BASICALLY FROM THE PUBLIC OFFICES, WHICH MAINTA IN THE RECORDS OF THE COMPANIES. THE DOCUMENTS ALSO INCLUDE ASSESSMENT OR DERS FOR LAST THREE PRECEDING YEARS OF SUCH COMPANIES. 7. THE APPELLANTS HAVE FAILED TO EXPLAIN AS TO HOW SU CH COMPANIES HAVE BEEN ASSESSED THOUGH ACCORDING TO THEM SUCH CO MPANIES ARE NOT EXISTING AND ARE FICTITIOUS COMPANIES. BESIDES THE DOCUMENTS ALSO INCLUDED THE REGISTRATION OF THE COMPANY WHICH DISC LOSES THE REGISTERED ADDRESS OF SUCH COMPANIES. THERE IS NO MATERIAL ON RECORD PRODUCED BY THE APPELLANTS WHICH COULD REBUT THE DOCUMENTS P RODUCED BY THE RESPONDENTS HEREIN. IN SUCH CIRCUMSTANCES, THE FIND ING OF FACT ARRIVED AT BY THE AUTHORITIES BELOW WHICH ARE BASED ON DOCU MENTARY EVIDENCE ON RECORD CANNOT BE SAID TO BE PERVERSE. LEARNED CO UNSEL APPEARING FOR THE APPELLANTS WAS UNABLE TO POINT OUT THAT ANY OF SUCH FINDINGS ARRIVED AT BY THE AUTHORITIES BELOW WERE ON THE BAS IS OF MISLEADING OF EVIDENCE OR FAILURE TO EXAMINE ANY MATERIAL DOCUMEN TS WHILST COMING TO SUCH CONCLUSIONS. UNDER THE GUISE OF THE SUBSTANTIA L QUESTION OF LAW, THIS COURT IN AN APPEAL UNDER SECTION 260A OF THE I NCOME TAX ACT CANNOT RE-APPRECIATE THE EVIDENCE TO COME TO ANY CO NTRARY EVIDENCE. CONSIDERING THAT THE AUTHORITIES HAVE RENDERED THE FINDINGS OF FACTS BASED ON DOCUMENTS WHICH HAVE NOT BEEN DISPUTED, WE FIND THAT THERE ARE NO SUBSTANTIAL QUESTION OF LAW WHICH ARISES IN THE PRESENT APPEAL FOR CONSIDERATION. ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 5 31. WE ALSO FIND THAT THE HONBLE APEX COURT RECENT LY IN THE CASE OF PRINCIPAL CIT VSVAISHNODEVI REFOILS & SOLVEX REPORTED IN (201 8) 96 TAXMANN.COM 469 (SC) WHEREIN THE SLP OF THE REVENUE HAS BEEN DISMIS SED BY THE HONBLE APEX COURT. THE BRIEF FACTS OF THAT CASE WERE THAT THE A DDITION U/S 68 OF THE ACT WAS MADE BY THE ASSESSING OFFICER IN RESPECT OF CAPITAL CONTRIBUTED BY THE PARTNER OF THE FIRM. THE HONBLE GUJARAT HIGH COURT NOTED T HAT WHEN THE CONCERNED PARTNER HAD CONFIRMED BEFORE THE ASSESSING OFFICER ABOUT HIS FACT OF MAKING CAPITAL CONTRIBUTION IN THE FIRM AND THAT THE SAID INVESTMENT IS ALSO REFLECTED IN HIS INDIVIDUAL BOOKS OF ACCOUNTS, THEN NO ADDITION COULD BE MADE U/S 68 OF THE ACT. THE DECISION OF HONBLE GUJARAT HIGH COURT IS REPORTED IN (2018) 89 TAXMANN.COM 80 (GUJ HC). THE SLP OF THE REVENUE AGA INST THIS JUDGMENT WAS DISMISSED BY THE HONBLE SUPREME COURT. 32. WE MAY GAINFULLY REFER TO THE FOLLOWING DECISIO NS OF THE HONBLE HIGH COURT IN THE CASES AS UNDER : (A) IN THE CASE OF PR. CIT VS CHAIN HOUSE INTERNATI ONAL (P) LTD [2018] (98 TAXMANN.COM 47) THE AO HAD ADDED THE SHARE APPL ICATION BY WAY OF UNEXPLAINED CASH CREDITS WAS THAT THE ASSESSEE WAS UNABLE TO GIVE ANY JUSTIFIABLE REASON FOR ISSUING SHARES AT A PREMIUM. THE HONBLE MADHYA PRADESH HIGH COURT DID NOT AGREE WITH THIS REASONIN G GIVEN BY THE AO FOR MAKING ADDITION U/S 68, HOLDING AS UNDER: ISSUING THE SHARE AT A PREMIUM WAS A COMMERCIAL DE CISION. IT IS THE PREROGATIVE OF THE BOARD OF DIRECTORS OF A COMPANY TO DECIDE THE PREMIUM AMOUNT AND IT IS THE WISDOM OF SHAREHOLDER WHETHER THEY WANT TO SUBSCRIBE THE SHARES AT SUCH A PREMIUM OR NOT. T HIS WAS A MUTUAL DECISION BETWEEN BOTH THE COMPANIES. IN DAY TO DAY MARKET, UNLESS AND UNTIL, THE RATES IS FIXED BY ANY GOVT. AUTHORITY OR UNLESS THERE IS ANY RESTRICTION ON THE AMOUNT OF SHARE PREMIUM UNDER AN Y LAW, THE PRICE OF THE SHARES IS DECIDED ON THE MUTUAL UNDERSTANDING O F THE PARTIES CONCERNED. [PARA 52] ONCE THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF INVESTORS ARE ESTABLISHED, THE REVENUE SHOULD NOT JUSTIFIABLY CLA IM TO PUT ITSELF IN THE ARMCHAIR OF A BUSINESSMAN OR IN THE POSITION OF THE BOARD OF DIRECTORS AND ASSUME THE ROLE OF ASCERTAINING HOW MUCH IS A REASONABLE PREMI UM HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE. [PARA 53] THERE IS NO DISPUTE ABOUT THE RECEIPT OF FUNDS THRO UGH BANKING CHANNEL NOR THERE IS ANY DISPUTE ABOUT THE IDENTITY, CREDITWORT HINESS AND GENUINENESS OF THE INVESTORS AND, THEREFORE, THE SAME HAS BEEN ESTABLI SHED BEYOND ANY DOUBT AND THERE SHOULD NOT HAVE BEEN ANY QUESTION OR DISPUTE ABOUT PREMIUM PAID BY THE INVESTORS; THEREFORE, UNLESS THERE IS A LIMITATION PUT BY THE LAW ON THE AMOUNT OF PREMIUM, THE TRANSACTION SHOULD NOT BE QUESTIONED M ERELY BECAUSE THE ASSESSING AUTHORITY THINKS THAT THE INVESTOR COULD HAVE MANAGED BY PAYING A LESSER AMOUNT AS SHARE PREMIUM AS A PRUDENT BUSINES SMAN. THE TEST OF PRUDENCE BY SUBSTITUTING ITS OWN VIEW IN PLACE OF T HE BUSINESSMAN'S HAS NOT BEEN APPROVED BY THE SUPREME COURT. [PARA 54] (B) IN THE CASE OF CIT V. GAGANDEEP INFRASTRUCTURE (P.) LTD. [2017] 80 TAXMANN.COM 272/247 TAXMAN 245/394 ITR 680 THE REVE NUE CONTENDED THAT THE FACT THAT THE SHARES WERE ISSUED AT HIGH PREMIU M RAISED SUSPICION ON THE ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 6 GENUINENESS OF THE TRANSACTIONS. WHILE DISMISSING T HIS PLEA RAISED BY THE REVENUE, THE HONBLE BOMBAY HIGH COURT HELD AS UNDE R: (E) WE FIND THAT THE PROVISO TO SECTION 68 OF THE A CT HAS BEEN INTRODUCED BY THE FINANCE ACT 2012 WITH EFFECT FROM 1ST APRIL, 2013. THUS IT WOULD BE EFFECTIVE ONLY FROM THE ASSESSMENT YEAR 2013-14 ONWARDS AND NOT FOR THE SUBJECT ASSESSMENT YEAR. IN FACT, BEFORE TH E TRIBUNAL, IT WAS NOT EVEN THE CASE OF THE REVENUE THAT SECTION 68 OF THE ACT AS IN FORCE DURING THE SUBJECT YEARS HAS TO BE READ/UNDERSTOOD AS THOUGH THE PROVISO ADDED SUBSEQUENTLY EFFECTIVE ONLY FROM 1ST APRIL, 2013 WAS ITS NORMAL MEANING. THE PARLIAMENT DID NOT INTRODUCE TO PROVISO TO SECTION 68 OF THE ACT WITH RETROSPECTIVE EFFECT NOR DOES TH E PROVISO SO INTRODUCED STATES THAT IT WAS INTRODUCED 'FOR REMOV AL OF DOUBTS' OR THAT IT IS 'DECLARATORY'. THEREFORE IT IS NOT OPEN TO GIVE IT RETROSPECTIVE EFFECT, BY PROCEEDING ON THE BASIS THAT THE ADDITION OF THE PR OVISO TO SECTION 68 OF THE ACT IS IMMATERIAL AND DOES NOT CHANGE THE INTER PRETATION OF SECTION 68 OF THE ACT BOTH BEFORE AND AFTER THE ADDING OF T HE PROVISO. IN ANY VIEW OF THE MATTER THE THREE ESSENTIAL TESTS WHILE CONFIRMING THE PRE- PROVISO SECTION 68 OF THE ACT LAID DOWN BY THE COUR TS NAMELY THE GENUINENESS OF THE TRANSACTION, IDENTITY AND THE CA PACITY OF THE INVESTOR HAVE ALL BEEN EXAMINED BY THE IMPUGNED ORDER OF THE TRIBUNAL AND ON FACTS IT WAS FOUND SATISFIED. FURTHER IT WAS A SUBM ISSION ON BEHALF OF THE REVENUE THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIV ES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAR EHOLDERS I.E. THEY ARE BOGUS. THE APEX COURT IN LOVELY EXPORTS (P.) LTD.(S UPRA) IN THE CONTEXT TO THE PRE-AMENDED SECTION 68 OF THE ACT HAS HELD T HAT WHERE THE REVENUE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HAS BEEN RECEIVED FROM BOGUS SHAREHOLDERS THEN IT IS FOR THE INCOME TAX OFFICER TO PROCEED BY REOPENING THE ASSESSMENT OF SUCH SHAR EHOLDERS AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW. IT DO ES NOT ENTITLE THE REVENUE TO ADD THE SAME TO THE ASSESSEE'S INCOME AS UNEXPLAINED CASH CREDIT. (F) IN THE ABOVE CIRCUMSTANCES AND PARTICULARLY IN VIEW OF THE CONCURRENT FINDING OF FACT ARRIVED AT BY THE CIT(A) AND THE TR IBUNAL, THE PROPOSED QUESTION OF LAW DOES NOT GIVE RISE TO ANY SUBSTANTI AL QUESTION OF LAW. THUS NOT ENTERTAINED. (C) IN CIT VS. ANSHIKA CONSULTANTS PVT LTD (62 TAXM ANN.COM 192), THE AO HAD ADDED THE SHARE APPLICATION MONIES TREATING IT TO B E THEIR UNACCOUNTED MONIES ROUTED THOUGH ACCOMMODATION ENTRIES SINCE THE SHARE S WERE ISSUED AT A HIGH PREMIUM. THE HONBLE DELHI HIGH COURT DID NOT AGREE WITH THIS CONTENTION PUT FORTH BY THE REVENUE, BY OBSERVING AS UNDER: WHETHER THE ASSESSEE-COMPANY CHARGED A HIGHER PREM IUM OR NOT, SHOULD NOT HAVE BEEN THE SUBJECT MATTER OF THE ENQU IRY IN THE FIRST INSTANCE. INSTEAD, THE ISSUE WAS WHETHER THE AMOUNT INVESTED BY THE SHARE APPLICANTS WERE FROM LEGITIMATE SOURCES. THE OBJECTIVE OF SECTION 68 IS TO AVOID INCLUSION OF AMOUNT WHICH ARE SUSPEC T. THEREFORE, THE EMPHASIS ON GENUINENESS OF ALL THE THREE ASPECTS, I DENTITY, CREDITWORTHINESS AND THE TRANSACTION. WHAT IS DISQU IETING IN THE PRESENT CASE IS WHEN THE ASSESSMENT WAS COMPLETED, THE INVE STIGATION REPORT WHICH WAS SPECIFICALLY CALLED FROM THE CONCERNED DE PARTMENT WAS AVAILABLE BUT NOT DISCUSSED BY THE ASSESSING OFFICE R. HAD HE CARED TO ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 7 DO SO, THE IDENTITY OF THE INVESTORS, THE GENUINENE SS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE SHARE APPLICANTS WO ULD HAVE BEEN APPARENT. EVEN OTHERWISE, THE SHARE APPLICANTS' PAR TICULARS WERE AVAILABLE WITH THE ASSESSING OFFICER IN THE FORM OF BALANCE SHEETS INCOME-TAX RETURNS, PAN DETAILS ETC. WHILE ARRIVING AT THE CONCLUSION THAT HE DID, THE ASSESSING OFFICER DID NOT CONSIDER IT WORTHWHILE TO MAKE ANY FURTHER ENQUIRY BUT BASED HIS ORDER ON THE HIGH NATURE OF THE PREMIUM AND CERTAIN FEATURES WHICH APPEARED TO BE S USPECT, TO DETERMINE THAT THE AMOUNT HAD BEEN ROUTED FROM THE ASSESSEE'S ACCOUNT TO THE SHARE APPLICANTS' ACCOUNT. AS HELD C ONCURRENTLY BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL, THESE CONC LUSIONS WERE CLEARLY BASELESS AND FALSE. THIS COURT IS CONSTRAIN ED TO OBSERVE THAT THE ASSESSING OFFICER UTTERLY FAILED TO COMPLY WITH HIS DUTY CONSIDERS ALL THE MATERIALS ON RECORD, IGNORING SPECIFICALLY THE MOST CRUCIAL DOCUMENTS. 33. WE ALSO FIND THAT THE RELIANCE PLACED BY THE LD DR ON THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF RAJMANDI R ESTATES SUPRA WAS DISTINGUISHABLE ON FACTS AS THE SAID DECISION WAS R ENDERED IN THE CONTEXT OF VALIDITY OF REVISIONARY JURISDICTION U/S 263 OF THE ACT BY THE LEARNED ADMINISTRATIVE COMMISSIONER. THIS FACT HAS ALREADY BEEN ADDRESSED BY THIS TRIBUNAL IN THE CASE OF VSP STEEL P LTD SUPRA. NO D ECISION WHATSOEVER WAS RENDERED BY THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF RAJ MANDIR ESTATES P. LTD ON MERITS OF THE ADDITION AND HENCE DOES NOT COME TO THE RESCUE OF THE REVENUE IN THE FACTS OF THE INSTANT CASE. 33. INSTEAD, WE FIND THAT THE DECISION OF THE HONB LE DELHI HIGH COURT IN THE CASE OF CIT VSGANGESHWARI METAL (P) LTD (ITA NO. 59 7 OF 2012) DATED 21.01.2012 IS OF MUCH RELEVANCE IN THE FACTS OF THE ASSESSEES CASE. IN THIS CASE THE ASSESSEE HAD RECEIVED SHARE APPLICATION MO NEY OF RS.55.50 LACS DURING THE YEAR IN QUESTION. THE ASSESSEE FILED THE COMPLETE NAMES, ADDRESSES OF THE SHARE APPLICANTS, CONFIRMATORY LETTERS FROM THEM, COPIES OF BANK STATEMENTS OF BOTH THE COMPANY AS WELL AS THE SHARE APPLICANTS AND COPIES OF SHARE APPLICATION FORMS. IN SPITE OF THE AFORESAID DOCUMENTARY EVIDENCES THE AO HELD THE EXPLANATION TO BE UNACCEPTABLE AND TREA TED THE SHARE APPLICATION AS UNEXPLAINED CASH CREDIT THEREBY MAKING ADDITION UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961. ON APPEAL THE CIT(APPEALS) DE LETED THE AFORESAID ADDITION HOLDING THAT THE IDENTITY OF THE SHARE APP LICANTS STOOD ESTABLISHED BEYOND DOUBT, ALL THE PAYMENTS WERE THROUGH ACCOUNT PAYEE CHEQUES AND THE SHARE APPLICANTS WERE REGULAR INCOME-TAX ASSESSEES. THE CIT(APPEALS) FURTHER HELD THAT THE REVENUE DID NOT BRING ANY EVIDENCE ON RECORD TO SUGGEST THAT THE SHARE APPLICATION HAD BEEN RECEIVED BY THE ASSESSEE FROM ITS OWN UNDISCLOSED SOURCES NOR ANY MATERIAL WAS BROUGHT ON RECORD TO S HOW THAT .THE APPLICANTS WERE BOGUS. THE REVENUE WAS NEITHER ABLE TO CONTROV ERT THE DOCUMENTARY EVIDENCES FILED BY THE APPELLANT NOR PROVE THAT THE SHARE APPLICATION WEREINGENUINE OR THE APPLICANTS WERE NON-CREDITWORT HY. THE FINDINGS OF THE CIT(APPEALS) WERE UPHELD BY THE INCOME-TAX APPELLAT E TRIBUNAL. ON APPEAL TO THE HIGH COURT, THE REVENUE PLACED STRONG RELIANCE ON THE DECISION OF ANOTHER COORDINATE BENCH OF THE SAME COURT IN THE' CASE OF CIT VS NOVO PROMOTERS &FINLEASE (P) LTD (342 ITR 169). THE HIGH COURT HOW EVER HELD THAT THE AFORESAID JUDGMENT WAS DISTINGUISHABLE FROM THE FAC TS OF THE PRESENT CASE. THE COURT OBSERVED THAT IN THAT JUDGMENT THE ASSESSING OFFICER HAD BROUGHT ON RECORD ENOUGH CORROBORATIVE EVIDENCE TO SHOW THAT T HE ASSESSEE HAD ROUTED UNACCOUNTED MONIES INTO ITS BOOKS THROUGH MEDIUM OF SHARE SUBSCRIPTION. THE SHARE APPLICANTS HAD CONFESSED THAT THEY WERE ' ACCOMMODATION ENTRY ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 8 PROVIDERS '. THE ASSESSING OFFICER IN THE LATTER CASE WAS ABL E TO PROVE WITH ENOUGH MATERIAL THAT THE SHARE SUBSCRIPTION WAS A P RE-MEDITATED PLAN TO ROUTE UNACCOUNTED MONIES. IN THE PRESENT CASE HOWEVER THE DEPARTMENT WAS UNABLE TO BRING ANY MATERIAL WHATSOEVER SHOWS THAT SHARE A PPLICATION WAS IN THE NATURE OF ACCOMMODATION ENTRIES. THE COURT OBSERVED THAT THE APPELLANT HAD FILED SUFFICIENT DOCUMENTARY EVIDENCES TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GEN UINENESS OF THE TRANSACTION. THE AO HOWEVER CHOSE TO SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTED ALL THE EVIDENCE IN HIS POSSESSION AND TH EN MERELY REJECT THE SAME WITHOUT CONDUCTING ANY INQUIRY OR VERIFICATION WHAT SOEVER. THE COURT THUS HELD THAT THE DECISION OF CIT VS NOVO PROMOTERS &FINLEAS E (P) LTD (342 ITR 169) WAS NOT APPLICABLE TO THE FACTS OF THE CASE. INSTEA D IT WAS HELD THAT THE ISSUE IN HANDS WAS ON THE LINES OF THE DECISION OF THE SUPRE ME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (319 ITR 5). ACCORDINGLY, THE ADDITION MADE UNDER SECTION 68 ON ACCOUNT OF SHARE APPLICATION WAS DELE TED. THE RELEVANT EXTRACTS OF THE JUDGMENT IS AS FOLLOWS:- AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES O F CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSING OFFICER CARRI ES OUT THE EXERCISE WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER 'SITS BACK WITH FOLDED HANDS' TILL THE ASSESSEE EXH AUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COMES FORWAR D TO MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRESENT CASE FALL S IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER AFTER NOTING T HE FACTS, MERELY REJECTED THE SAME. THIS WOULD BE APPARENT FROM THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER TO THE FO LLOWING EFFECT:- ''INVESTIGATION MADE BY THE INVESTIGATION WING OF T HE DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRANSACTION OF ACCOMMODATION ENTRY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF RS.1,11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS RECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WA S STATED THAT THE ACTUAL AMOUNT RECEIVED WAS RS.55,50,000/- AND NOT RS.1,11, 50,000/- AS MENTIONED IN THE NOTICE. THE ASSESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTION OF THE ASSESSEE IN RESP ECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT RS.55,50,000/-. THE ASSESSEE HAS FURTHER TRIES TO E XPLAIN THE SOURCE OF THIS AMOUNT OF RS.55,50,000/- BY FURNISHING COPIES OF SHARE APPLICATION MONEY, BALANCE4 SHEET ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT THE QUESTION OF ADDITION IN THE INCOM E OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANATION OF THE ASSESSEE HA S BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REM AINS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS HAS BEEN ARRIVED BY TH E INVESTIGATION WING OF THE DEPARTMENT. AS SUCH ENTRIES OF RS.55,50 ,000/- RECEIVED BY THE ASSESSEE ARE TREATED AS AN UNEXPLAINED CASH CRE DIT IN THE HANDS OF THE ASSESSEE AND ADDED TO ITS INCOME. SINCE I AM SA TISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IT S INCOME/ PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITI ATED SEPARATELY. THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. ( SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVOUR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRE SENT CASE ARE CLEARLY ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 9 DISTINGUISHABLE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA). THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER ONCE T HE ASSESSEE HAD FURNISHED ALL THE MATERIAL WHICH WE HAVE ALREADY RE FERRED TO ABOVE. IN SUCH AN EVENTUALITY NO ADDITION CAN BE MADE UNDER S ECTION 68 OF THE INCOME TAX ACT 1961. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBUNAL IS CORRECT I N LAW 34. FURTHER, IN THE DECISION OF THE HON'BLE DELHI H IGH COURT IN THE CASE OF CIT V. KAMDHENU STEEL & ALLOYS LTD. [2012] 19 TAXMANN.COM 26/206 TAXMAN 254/[2014] 361 ITR 220 IS ALSO RELEVANT, WHEREIN IT WAS HELD AS UNDER : 'ONCE ADEQUATE EVIDENCE/MATERIAL IS GIVEN, WHICH WO ULD PRIMA FACIE DISCHARGE THE BURDEN OF THE ASSESSEE IN PROVING THE IDENTITY OF SHAREHOLDERS, GENUINENESS OF THE TRANSACTION AND CR EDITWORTHINESS OF THE SHAREHOLDERS, THEREAFTER IN CASE SUCH EVIDENCE IS TO BE DISCARDED OR IT IS PROVED THAT IT HAS ' CREATED ' EVIDENCE, THE REVENUE IS SUPPOSED TO MAKE THOROUGH PROBE BEFORE IT COULD NAIL THE ASSESS EE AND FASTEN THE ASSESSEE WITH SUCH A LIABILITY UNDER S.68; A.O. FAI LED TO CARRY HIS SUSPICION TO LOGICAL CONCLUSION BY FURTHER INVESTIG ATION AND THEREFORE ADDITION UNDER S.68 WAS NOT SUSTAINABLE.' 35. THE SLP FILED AGAINST THE ABOVE DECISION HAS BE EN DISMISSED BY THE HONBLE SUPREME COURT. 36. IN THE CASE OF FINLEASE PVT LTD. 342 ITR 169 (S UPRA) IN ITA 232/2012 JUDGEMENT DT. 22.11.2012 AT PARA 6 TO 8/ IT WAS HEL D AS FOLLOWS. '6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF TH E PARTIES. IN THIS CASE THE DISCUSSION BY THE COMMISSIONER OF INCOME T AX (APPEALS) WOULD REVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED COPIES ISSUED BY THE ROC IN RELATION TO THE SHARE A PPLICATION AFFIDAVITS OF THE DIRECTORS, FORM 2 FILED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APPLICANT FOR COMPANY'S SHARES , CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE ASSESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM TH E READING OF THE INVESTIGATION REPORT AND THE STATEMENT OF MR. MAHES GARG. TO ELEVATE THE INFERENCE WHICH CAN BE DRAWN ON THE BASIS OF RE ADING OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPE R, MORE SO WHEN THE ASSESSEE PRODUCED MATERIAL. THE LEAST THAT THE ASSE SSING OFFICER OUGHT TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NECESSARY, INVOKING HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE AP PLICANTS OR DIRECTORS. NO EFFORT WAS MADE IN THAT REGARD. IN TH E ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCLOSED WAS UNTRUSTWORT HY OR LACKED CREDIBILITY THE ASSESSING OFFICER MERELY CONCLUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAIN FACTS AND T HE STATEMENTS OF MR.MAHESH GARG THAT THE INCOME SOUGHT TO BE ADDED F ELL WITHIN THE DESCRIPTION OF S.68 OF THE INCOME TAX ACT 1961. HAV ING REGARD TO THE ENTIRETY OF FACTS AND CIRCUMSTANCES, THE COURT IS S ATISFIED THAT THE FINDING OF THE TRIBUNAL IN THIS CASE ACCORDS WITH THE RATIO OF THE DECISION OF THE SUPREME COURT IN LOVELY EXPORTS (SUPRA). THE DECISION IN THIS CASE IS BASED ON THE PECULIAR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENCE ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 10 IN SUPPORT OF THE SHARE APPLICATION MONIES, IT IS O PEN TO THE ASSESSING OFFICER TO EXAMINE IT AND REJECT IT ON TENABLE GROU NDS. IN CASE HE WISHES TO RELY ON THE REPORT OF THE INVESTIGATION AUTHORIT IES, SOME MEANINGFUL ENQUIRY OUGHT TO BE CONDUCTED BY HIM TO ESTABLISH A LINK BETWEEN THE ASSESSEE AND THE ALLEGED HAWALA OPERATORS, SUCH A L INK WAS SHOWN TO BE PRESENT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA) RELIED UPON BY THE REVENUE. WE ARE THEREFORE NOT TO BE UNDERSTOOD TO CONVEY THAT IN ALL CASES OF SHARE CAPITAL ADDED UND ER SECTION THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTRACTED, IRRESPECTIVE O F THE FACTS, EVIDENCE AND MATERIAL.' 37. WE ALSO NOTE THAT RECENTLY THE ITAT KOLKATA IN SEVERAL CASES HAS DELETED THE ADDITION ON ACCOUNT OF SHARE APPLICATION IN SIM ILAR CIRCUMSTANCES. THE RELEVANT PORTION OF THE DECISIONS, ARE AS FOLLOWS: (A) IN THE CASE OF DCIT VS GLOBAL MERCANTILES PVT. LTD IN ITA NO. 1669/KOL/2009 DATED 13-01-2016, THIS TRIBUNAL HELD AS FOLLOWS: 3.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BO OK FILED BY THE ASSESSEE. THE FACTS STATED HEREINABOVE REMAIN UNDIS PUTED ARE NOT REITERATED HEREIN FOR THE SAKE OF BREVITY. WE FIND THAT THE ASSESSEE HAD GIVEN THE COMPLETE DETAILS ABOUT THE SHARE APPLICAN TS CLEARLY ESTABLISHING THEIR IDENTITY, CREDITWORTHINESS AND G ENUINENESS OF TRANSACTION PROVED BEYOND DOUBT AND HAD DULY DISCHA RGED ITS ONUS IN FULL. NOTHING PREVENTED THE LEARNED AO TO MAKE ENQU IRIES FROM THE ASSESSING OFFICERS OF THE CONCERNED SHARE APPLICANT S FOR WHICH EVERY DETAILS WERE VERY MUCH MADE AVAILABLE TO HIM BY THE ASSESSEE. WE FIND THAT THE RELIANCE PLACED BY THE LEARNED LD. CIT(1) ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS LOVELY EXP ORTS (P) UD REPORTED IN (2008) 216 CTR 195 (SC) IS VERY WELL FO UNDED, WHEREIN, IT HAS BEEN VERY CLEARLY HELD THAT THE ONLY OBLIGATION OF THE COMPANY RECEIVING THE SHARE APPLICATION MONEY IS TO PROVE T HE EXISTENCE OF THE SHAREHOLDERS AND FOR WHICH THE ASSESSEE HAD DISCHAR GED THE ONUS OF PROVING THEIR EXISTENCE AND ALSO THE SOURCE OF SHAR E APPLICATION MONEY RECEIVED. 3.4. 1. WE ALSO FIND THAT THE IMPUGNED ISSUE IS ALS O COVERED BY THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS ROSEBERRY MERCANTILE (P) LTD IN GA NO. 3296 OF 2010 ITAT NO. 241 OF 2010 DATED 10.1.2011, WHEREIN THE- QUESTIONS RAISED BEFORE THE IR LORDSHIPS AND DECISION RENDERED THEREON IS AS UNDER:- 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TR ANSACTION ENTERED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUND ERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTED MONEY AND THE L D. CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSEE HAD NOT ESTABL ISHED THE GENUINENESS OF THE TRANSACTION. ' HELD AFTER HEARING THE LEARNED COUNSEL FOR THE APPE LLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CA SES OF CIT VS M/S LOVELV EXPORTS PVT LTD, WE ARE AT ONE WITH THE TRIB UNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COVERED BY THE SAI D SUPREME COURT ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 11 DECISION IN FAVOUR OF THE ASSESSEE AND THUS, NO SUB STANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEAL IS DEVOI D OF ANY SUBSTANCE AND IS DISMISSED. 3.4.2. IN VIEW OF THE AFORESAID FINDINGS AND RESPEC TFULLY FOLLOWING THE DECISION OF THE APEX COURT (SUPRA) AND JURISDICTION AL HIGH COURT (SUPRA) , WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CI T(A) AND ACCORDINGLY, THE GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 4. THE LAST GROUND TO BE DECIDED IN THIS APPEAL OF THE REVENUE IS AS TO WHETHER THE LEARNED CIT(A) IS JUSTIFIED IN DELETING THE ADDITION U/S 68 OF THE ACT MADE IN RESPECT OF ALLOTMENT OF SHARES TO 2 0 INDIVIDUALS FOR AN AMOUNT OF RS.57,00,000/- IN THE FACTS AND CIRCUMSTA NCES OF THE CASE. 4. 1. THE BRIEF FACT OF THIS ISSUE IS THAT THE ASSE SSEE HAD RECEIVED SHARE APPLICATION MONIES FROM 20 INDIVIDUALS IN THE EARLI ER YEAR WHICH WERE KEPT IN SHARE APPLICATION MONEY ACCOUNT. DURING THE ASST YEAR UNDER APPEAL, THE ASSESSEE ALLOTTED SHARES TO THESE 20 IN DIVIDUALS OUT OF TRANSFERRING THE MONIES FROM SHARE APPLICATION MONE Y ACCOUNT TO SHARE CAPITAL ACCOUNT. THE DETAILS OF 20 INDIVIDUALS ARE REFLECTED IN PAGE 6 & 7 OF THE LEARNED CIT(A) ORDER. THE LEARNED AO ASKED T HE ASSESSEE TO PRODUCE THE SHAREHOLDERS BEFORE HIM. HE FOUND THAT THE ASSESSEE DID NOT DO SO BUT FURNISHED COPIES OF PAY ORDERS USED F OR PAYMENTS TO THE ASSESSEE COMPANY AND ALSO FURNISHED INCOME TAX PART ICULARS AND BALANCE SHEETS OF ALL THE SHAREHOLDERS. THE LEARNED AO ON ANALYZING ALL THE BALANCE SHEETS OBSERVED THAT THE SHAREHOLDE RS HAVE PALTRY INCOME AND SMALL SAVINGS AND NONE OF THEM HAVE ANY BANK ACCOUNT AND HUGE CASH BALANCES WERE SHOWN IN THEIR HANDS OU T OF WHICH PAY ORDERS WERE OBTAINED. BASED ON THIS, THE LEARNED AO CONCLUDED THAT THESE SHAREHOLDERS DO NOT HAVE CREDITWORTHINESS TO INVEST IN THE ASSESSEE COMPANY AND BROUGHT THE ENTIRE SUM OF RS. 57,00,000/- TO TAX AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4.2. ON FIRST APPEAL, THE LEARNED CIT(A) OBSERVED T HAT ENTIRE SHARE APPLICATION MONIES OF RS.57,00,000/- WE RECEIVED DU RING THE PREVIOUS YEAR 2004-05 RELEVANT TO ASST YEAR 2005-06 FROM 20 PERSONS AND THE SHARES WERE ALLOTTED TO THEM DURING THE ASST YEAR U NDER APPEAL. HE OBSERVED THAT THE ASSESSEE HAD FURNISHED DETAILS OF THE SHARE APPLICANTS GIVING THE DATE WISE RECEIPTS, MODE OF P AYMENT, AMOUNT, NAME, ADDRESS, INCOME TAX RETURNS, PA NO. OF SHARE APPLICANTS ALONG WITH THEIR BALANCE SHEET. THE LEARNED CITA ALSO OBS ERVED THAT THE ASSESSEE IN ITS REPLY TO SHOW CAUSE NOTICE BEFORE T HE LEARNED AO HAD REQUESTED HIM TO USE HIS POWER AND AUTHORITY FOR TH E PHYSICAL APPEARANCE OF THE SHAREHOLDERS WHICH WAS NOT EXERCI SED BY THE LEARNED AO. INSTEAD THE LEARNED AO CONTINUED TO INS IST ON THE ASSESSEE TO PRODUCE THE SHAREHOLDERS BEFORE HIM. HE ULTIMATELY CONCLUDED THAT THE ASSESSEE HAD DULY DISCHARGED ITS ONUS OF PROVIDING COMPLETE DETAILS OF THE SHAREHOLDERS AND IN ANY CAS E, NO ADDITION COULD BE MADE U/S 68 OF THE ACT IN THE ASST YEAR UNDER AP PEAL AS NO SHARE APPLICATION MONIES WERE RECEIVED DURING THE ASST YE AR UNDER APPEAL. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US BY FI LING THE FOLLOWING GROUND:- ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 12 'THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE U/S 68 IN RESPE CT OF THE ALLOTMENT OF SHARES TO 20 NUMBERS OF INDIVIDUAL INVESTORS FOR AN AMOUNT OF RS. 57 LAKHS, WHERE GENUINENESS OF THE TRANSACTIONS AND CR EDITWORTHINESS OF THE INVESTORS WERE NOT ESTABLISHED. (B) IN THE CASE OF DCIT VS. R.B HORTICULTURE & ANI MAL PROJECTS CO. LTD IN ITA NO. 632/KOL/2011 DATED 13-01-2016, THIS TRIBUNAL HELD AS FOLLOWS: 4.3. THE LEARNED DR PRAYED FOR ADMISSION OF THE ADD ITIONAL GROUND RAISED BEFORE US AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR FAIRLY CONC EDED TO ADMISSION OF THIS ADDITIONAL GROUND AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). 4.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BO OK FILED BY THE ASSESSEE. WE FIND THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE SEPARATELY BEFORE US VIDE ITS COVERING LETTER DATED 9.12.2011 IS ADMITTED AS IT APPEARS TO BE A GENUINE AND BONA FIDE ERROR O F OMISSION ON THE PART OF THE REVENUE FROM NOT RAISING THIS GROUND IN THE ORIGINAL GROUNDS OF APPEAL FILED ALONG WITH THE MEMORANDUM OF APPEAL . MOREOVER, IT DOES NOT REQUIRE ANY FRESH EXAMINATION OF FACTS. HENCE T HE SAME IS ADMITTED HEREIN FOR THE SAKE OF ADJUDICATION. 4.4. 1. WE FIND FROM THE DETAILS AVAILABLE ON RECOR D THAT THE SHARE APPLICATION MONIES FROM 20 INDIVIDUALS IN THE SUM O F RS.57,00,000/- HAS BEEN RECEIVED BY THE ASSESSEE DURING THE FINANCIAL YEAR 2004-05 RELEVANT TO ASST YEAR 2005-06 AND ONLY THE SHARES W ERE ALLOTTED TO THEM DURING THE ASST YEAR UNDER APPEAL. ADMITTEDLY NO MO NIES WERE RECEIVED DURING THE ASST YEAR UNDER APPEAL AND HENCE THERE I S NO SCOPE FOR INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. H ENCE WE HOLD THAT THE ORDER PASSED BY THE LEARNED CIT(A) IN THIS REGARD D OES NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY THE GROUND NO. 3 RAISED B Y THE REVENUE IS DISMISSED . 6. WE HAVE HEARD THE LEARNED DR AND WHEN THE CASE WAS CALLED ON FOR HEARING, NONE WAS PRESENT ON BEHALF OF THE ASSE SSEE. HOWEVER, WE FIND FROM THE FILE THAT THE ASSESSEE HAD FILED A DE TAILED PAPER BOOK AND WRITTEN SUBMISSIONS. HENCE THE CASE IS DISPOSED OFF BASED ON THE ARGUMENTS OF THE LEARNED DR AND WRITTEN SUBMISSIONS AND PAPER BOOK ALREADY AVAILABLE ON RECORD. THE FACTS STATED IN TH E LEARNED CIT(A) WERE NOT CONTROVERTED BY THE LEARNED DR BEFORE US. WE FIND THAT THE ASSESSEE HAD GIVEN THE COMPLETE DETAILS ABOUT THE S HARE APPLICANTS CLEARLY ESTABLISHING THEIR IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF TRANSACTION PROVED BEYOND DOUBT AND HAD DULY DISCHA RGED ITS ONUS IN FULL. NOTHING PREVENTED THE LEARNED AO TO MAKE ENQU IRIES FROM THE ASSESSING OFFICERS OF THE CONCERNED SHARE APPLICANT S FOR WHICH EVERY DETAILS WERE VERY MUCH MADE AVAILABLE TO HIM BY THE ASSESSEE. WE FIND THAT THE RELIANCE PLACED BY THE LEARNED CITA ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS LOVELV EXP ORTS (P) LTD REPORTED IN (2008) 216 CTR 195 (SC) IS VERY WELL FO UNDED, WHEREIN, IT HAS BEEN VERY CLEARLY HELD THAT THE ONLY OBLIGATION OF THE COMPANY ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 13 RECEIVING THE SHARE APPLICATION MONEY IS TO PROVE T HE EXISTENCE OF THE SHAREHOLDERS AND FOR WHICH THE ASSESSEE HAD DISCHAR GED THE ONUS OF PROVING THEIR EXISTENCE AND ALSO THE SOURCE OF SHAR E APPLICATION MONEY RECEIVED. 6. 1. WE ALSO FIND THAT THE IMPUGNED ISSUE IS ALSO COVERED BY THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS ROSEBERRV MERCANTILE (P) LTD IN GA NO. 3296 OF 2010 ITAT NO. 241 OF 2010 DATED 10.1.2011, WHEREIN THE QUESTIONS RAISED BEFORE THEI R LORDSHIPS AND DECISION RENDERED THEREON IS AS UNDER:- - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT ORDER AS THE TR ANSACTION ENTERED INTO BY THE ASSESSEE WAS A SCHEME FOR LAUND ERING BLACK MONEY INTO WHITE MONEY OR ACCOUNTED MONEY AND THE L D. CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSEE HAD NOT ESTABL ISHED THE GENUINENESS OF THE TRANSACTION.' HELD AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND AFTER GOING THROUGH T HE DECISION OF THE SUPREME COURT IN THE CASES OF CIT VS M/S LOVELY EXPORTS PVT LTD, WE ARE AT ONE WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPEAL IS COVERED BY THE SAID SUPR EME COURT DECISION IN FAVOUR OF THE ASSESSEE AND THUS, NO SUB STANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APP EAL IS DEVOID OF ANY SUBSTANCE AND IS DISMISSED. 6.2. WE FIND THAT THE ISSUE IS ALSO COVERED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS VALUE CAPITA L SERVICES P LTD REPORTED IN (2008) 307 ITR 334 (DEL) , WHEREIN IT W AS HELD THAT: 'IN RESPECT OF AMOUNTS SHOWN AS RECEIVED BY THE ASS ESSEE TOWARDS SHARE APPLICATION MONEY FROM 33 PERSONS, TH E ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE ALL THESE PERSONS. WHILE ACCEPTING THE EXPLANATION AND ITA NO . 632/KOI12011--C-AM M/S. R.B HORTICULTURE 6 & ANIMAL PROJ. CO. LTD THE STATEMENTS GIVEN BY THREE PERSONS THE ASSES SING OFFICER FOUND THAT THE RESPONSE FROM THE OTHERS WAS EITHER NOT AVAILABLE OR WAS INADEQUATE AND ADDED AN AMOUNT OF RS. 46 LAK HS PERTAINING TO 30 PERSONS TO THE INCOME OF THE ASSES SEE. THE COMMISSIONER (APPEALS) UPHELD THE DECISION OF T HE ASSESSING OFFICER. ON APPEAL, THE TRIBUNAL SET ASIDE THE ORDER OF THE COM MISSIONER (APPEALS) AND DELETED THE ADDITIONS. ON FURTHER APPEAL: HELD, DISMISSING THE APPEAL, THAT THE ADDITIONAL BU RDEN WAS ON THE DEPARTMENT TO SHOW THAT EVEN IF THE SHARE APPLICANTS DID NOT H AVE THE MEANS TO MAKE THE INVESTMENT, THE INVESTMENT MADE BY THEM ACTUALLY EM ANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. NO SUBSTANTIAL QUESTION OF LAW AROSE. ' 6.3. WE FIND THAT THE ARGUMENT OF THE LEARNED DR TO SET ASIDE THIS ISSUE TO THE FILE OF THE LEARNED AO FOR VERIFICATION OF SHARE SU BSCRIBERS WOULD NOT SERVE ANY PURPOSE AS THE RATIO DECIDED IN THE ABOVE CASES IS THAT IN ANY CASE, NO ADDITION COULD BE MADE IN THE HANDS OF THE RECIPIENT ASSESSE E. IN VIEW OF THE AFORESAID FINDINGS AND RESPECTFULLY FOLLOWING THE DECISION OF THE APEX COURT (SUPRA), ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 14 JURISDICTIONAL HIGH COURT (SUPRA) AND DELHI HIGH CO URT (SUPRA) , WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND AC CORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. (C) IN THE CASE OF ITO WD.3(2) KOL, VS. M/S. STEEL EMPORIUM LTD IN ITA NO.1061/KOL/2012 DATED 05-02-2016, THIS TRIBUNAL HELD AS FOLLOWS: 10. WE HAVE HEARD BOTH THE RIVAL PARTIES AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. THE LD. DR VEHEMENTLY SUPPORTE D THE ORDER OF THE AO. BEFORE US THE LD. AR SUBMITTED THAT THE ASSESSE E RAISED SHARE APPLICATION MONEY DURING THE YEAR FROM 25 APPLICANT S. THE AO WAS FURNISHED WITH THE COPY OF FORM 2 OF ALLOTMENT OF S HARES TO THE APPLICANTS AS FILED WITH THE REGISTRAR OF COMPANIES , WEST BENGAL. ON THE DATE OF RECEIPT OF SHARE APPLICATIONS FROM THE APPLICANTS, THEY FURNISHED THEIR ADDRESSES, WHICH WERE RECORDED IN T HE REGISTER OF MEMBERS. THE AO OBSERVED THAT AS PER ROC RECORDS TH E ADDRESSES OF THE NINE COMPANIES WERE DIFFERENT FROM THE ADDRESS AS PER FORM FILED WITH HIM. THE AO ISSUED NOTICES U/S.133(6) TO ALL T HE COMPANIES AT THE ADDRESSES FURNISHED IN FORM 2 AS FILED WITH HIM, WH ICH WERE DULY SERVED AT THE GIVEN ADDRESSES. THE A0 ARGUED THAT THE LETT ERS SHOULD NOT HAVE BEEN SERVED AT THE GIVEN ADDRESS BY THE ASSESSEE. H E SERVED A SHOW A CAUSE NOTICE DATED 09.12.2011 ASKING FOR THE EXPLAN ATION FROM THE ASSESSEE AS TO HOW THE NOTICES U/S. 133(6) COULD BE SERVED TO THESE NINE COMPANIES WHO HAD DIFFERENT ADDRESS AS PER ROC RECORDS. THE AO WAS EXPLAINED VIDE LETTER DATED 20.12.2011 OF TH E ASSESSEE THAT THOSE COMPANIES HAD CHANGED THEIR ADDRESSES SINCE F ILING OF FORM 2 WITH THE REGISTRAR. FURTHER, IT WAS NONE OF THE BUS INESS OF THE ASSESSEE TO QUESTION THE ADDRESSES OF THE APPLICANTS AS LONG AS THEY AFFIRM THE ADDRESS. THE APPLICANTS WERE DULY INCORPORATED BODI ES UNDER THE COMPANIES ACT. 1956 SINCE LONG. THEY HAVE BEEN REGU LARLY FILING THEIR RETURNS OF INCOME UNDER THE INCOME TAX ACT AND ARE BEING ASSESSED BY THE REVENUE SINCE LONG. SOME OF THEM ARE EVEN REGIS TERED AS NON- BANKING FINANCIAL COMPANIES WITH RESERVE BANK OF IN DIA. THEY HAVE BEEN FILING RETURNS REGULARLY WITH REGISTRAR OF COM PANIES AND RBI SINCE LONG. THE LETTERS MIGHT HAVE BEEN RECEIVED AT THEIR OLD ADDRESSES BECAUSE IN CASE OF CHANGE IN THE ADDRESS, PEOPLE IN STRUCT THE INCUMBENTS AT OLD ADDRESSES NOT TO REFUSE THE RECEI PT OF LETTERS AND RECEIVE THE SAME. JUST BECAUSE, A LETTER WAS RECEIV ED AT THE OLD ADDRESS INSTEAD OF PRESENT ADDRESS, IT CANNOT BE SA ID THAT THE IDENTITY OF THE APPLICANT HAS NOT BEEN VERIFIED. ALL OF THESE C OMPANIES HAD DULY REPLIED TO NOTICE U/S. 133(6) AND CONFIRMED THE TRA NSACTION WITH ALL THE EVIDENCES. THE AO HAS NOT RAISED ANY OBJECTION ON A NY OF THE INFORMATION FURNISHED BEFORE HIM. THE AO HAS NOT AS KED THE RESPECTIVE COMPANY APPLICANTS ALSO TO EXPLAIN THE ALLEGED DISC REPANCY IN THE ADDRESS. THE AO HAS NOT BROUGHT ANY MATERIAL ON ACC OUNT OF RECORD TO DISBELIEF THE EVIDENCES FURNISHED WITH HIM AND TREA T THE TRANSACTION AS NOT GENUINE. THE ASSESSEE SUBMITTED THE FOLLOWING M ATERIAL AT THE TIME OF ASSESSMENT. A) COPY OF SHARE APPLICATIONS FROM THE SHARE APPLIC ANTS (COPIES ENCLOSED) B) COPY OF FORM 2 FILED WITH REGISTRAR OF COMPANIES , WEST BENGAL (COPY ENCLOSED) C) COPY OF FORM 18 ABOUT THE REGISTERED OFFICE OF T HE APPLICANTS FOR ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 15 CHANGE OF ADDRESS SUBSEQUENT TO THE DATE OF ALLOTME NT, I.E. 31.03.2009 (COPIES ENCLOSED) D) MEMBERS REGISTER E) SHARE APPLICATION & ALLOTMENT REGISTER F) COPY OF BOARD RESOLUTION. G) REPLIES FROM SHARE APPLICANTS TO THE NOTICE U/S. 133(6) ISSUED TO THEM BY THE AO SEEKING INFORMATION AND DOCUMENTS AB OUT THE SOURCES AND TO EXAMINE THEIR IDENTITY, GENUINENESS OF THE T RANSACTION AND THEIR CREDITWORTHINESS. (COPY ENCLOSED). H) COPY OF AUDITED ACCOUNTS. I) COPY OF BANK STATEMENTS. J) COPY OF INCOME TAX ACKNOWLEDGMENT OF RETURN FILE D FOR AY 2009- K) COPY OF PAN CARD. L) DETAILS OF SOURCES OF FUNDS. M) COPY OF COVERING LETTER FOR DELIVERY OF SHARES. N) COPY OF MASTER DATA AS PER MINISTRY OF COMPANY A FFAIRS RECORDS. O) COPY OF ANNUAL RETURN. P) COPY OF MEMORANDUM AND ARTICLES OF ASSOCIATION. FINALLY THE LD. AR RELIED ON THE ORDER OF THE LD. C IT(A). FROM THE AFORESAID DISCUSSION WE FIND THAT THE AO HAS MADE T HE ADDITION OF THE SHARE APPLICATION MONEY BECAUSE ALL THE NINE COMPAN IES WERE HAVING THE COMMON ADDRESS AND THE NOTICE SENT UNDER SECTIO N 133(6) WAS RECEIVED BY THE SINGLE PERSON. ACCORDINGLY THE AO O PINED THAT THE ASSESSEE HAS USED ITS UNACCOUNTED MONEY IN THE SHAR E APPLICATION TRANSACTIONS. HOWEVER WE FIND THAT ALL THE MONEY RE CEIVED IN THE FORM OF SHARE CAPITAL IS DULY SUPPORTED WITH THE REQUISITE DOCUMENT AS DISCUSSED ABOVE. TO OUR MIND THE BASIS ON WHICH THE ADDITION WAS MADE BY THE AO IS NOT TENABLE. THE LD. DR ALSO COUL D NOT BROUGHT ANYTHING ON RECORD TO CONTROVERT THE FINDINGS OF TH E LD. CIT(A). IN VIEW OF ABOVE WE FIND NO REASON TO INTERFERE IN THE ORDE R OF THE ID. CIT(A). ACCORDINGLY THE GROUND RAISED BY REVENUE IS DISMISS ED. (D) IN THE CASE OF ITO VS CYGNUS DEVELOPERS (I) P L TD IN ITA NO. 282/KOL/2012 DATED 2.3.2016, THIS TRIBUNAL HELD AS FOLLOWS: 6. ON APPEAL BY THE ASSESSEE THE CIT(A) DELETED TH E ADDITION MADE BY THE AO OBSERVING AS FOLLOWS '6) I HAVE CONSIDERED THE SUBMISSION OF THE APPELLA NT AND PERUSED THE ASSESSMENT ORDER. I HAVE ALSO GONE THRO UGH THE DETAILS AND DOCUMENTS FILED BY THE APPELLANT COMPAN Y IN THE COURSE OF ASSESSMENT: PROCEEDINGS VIDE LETTER DT. 3 -10-2007. ON CAREFUL CONSIDERATION OF THE FACTS AND IN LAW I AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN MAKING, THE ADDITI ON AGGREGATING TO RS.54,00,000/- U/S.68 OF THE ACT BEING THE AMOUN T OF SHARE APPLICATION MONEY BY HOLDING THAT THE APPELLANT COM PANY HAS FAILED TO PROVE THE IDENTITY, AND CREDITWORTHINESS OF THE CREDITORS AS WELL AS THE GENUINENESS OF TRANSACTIONS. IT IS O BSERVED THAT ALL THE THREE SHARE APPLICANT COMPANIES I.E. M/S. SHREE SHYAM TREXIM PVT. LTD., M/S NAVALCO COMMODITIES PVT. LTD. AND M/S. JEWELLOCK TREXIM PVT. LTD. HAD FILED THEIR CONFIRMA TIONS WHEREIN EACH OF THEM CONFIRMED THAT THEY HAD APPLIED FOR SH ARES OF THE APPELLANT -COMPANY. ALL THE THREE COMPANIES PROVIDE D- THE ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 16 CHEQUE NUMBER, COPY OF BANK STATEMENTS AND THEIR PA N. IT IS OBSERVED THAT THESE COMPANIES ALSO FILED, COPIES OF THEIR RETURN OF INCOME AND FINANCIAL STATEMENTS FOR AS WELL AS C OPY OF THEIR ASSESSMENT ORDER U/S. 143(3) OF THE I. T ACT FOR AY 2005-06. IN THE CASE OF M/S. JEWELLOCK TREXIM PVT. LTD. THE ASS ESSMENT FOR AY 2005-06 WAS COMPLETED BY THE ITO WARD 9(3), KOLK ATA AND THE ASSESSMENTS IN THE CASE OF M/S. NAVALCO COMMODI TIES PVT. LTD. AND M/S. SHREE SHYAM TREXIM PVT. LTD. FOR A. Y .2005-06 AND AY.2004-05 RESPECTIVELY WERE COMPLETED BY THE I TO, WARD 9(4), KOLKATA. UNDER THE CIRCUMSTANCES, I AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE SHARE APPLICANT COMPANIES WERE NOT IN EXISTENCE. THE ASSESSMENT ORD ERS WERE COMPLETED ON THE ADDRESS AS PROVIDED BY THE APPELLA NT COMPANY IN THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS NOT KNOWN AS TO HOW THE AO'S INSPECTOR HAD REPORTED THAT THE AFORES AID COMPANIES WERE NOT IN EXISTENCE AT THE GIVEN ADDRES S. SINCE THE APPELLANT COMPANY HAD PROVIDED SUFFICIENT DOCUMENTA RY EVIDENCES IN SUPPORT OF ITS CLAIM OF RECEIPT OF SHA RE APPLICATION MONEY, I AM OF THE OPINION THAT THE NO ADDITION U/S .68 COULD BE MADE IN THE HANDS OF APPELLANT COMPANY. ON GOING TH ROUGH THE VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT, IT IS OBSERVED THAT THE VIEW TAKEN AS ABOVE IS ALSO SU PPORTED BY THEM. IN VIEW OF ABOVE THE AO IS DIRECTED TO DELETE THE ADDITION OF RS.54,00,000/ -. THE GROUND NOS. 2 AND 3 ARE ALLOWED , ' 7. AGGRIEVED BY THE ORDER OF CIT{A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED DR, WH O RELIED ON THE ORDER OF AO. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF CIT(A) AND FURTHER DREW OUR ATTENTION TO THE DECISION OF HON'B LE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS RAJ KUMAR AGARWAL VIDE ITA NO. 179/2 008, DATED 17. 11.2009 WHEREIN THE HON 'BLE ALLAHABAD HIGH COURT TOOK A VI EW THAT NON PRODUCTION OF THE DIRECTOR OF A PUBLIC LIMITED COMPANY WHICH IS R EGULARLY ASSESSED TO INCOME TAX HAVING PAN, ON THE GROUND THAT THE IDENTITY OF THE INVESTOR IS NOT PROVED CANNOT BE SUSTAINED. ATTENTION WAS ALSO TO THE SIMI LAR RULING OF THE ITAT KOLKATA BENCH IN THE CASE OF ITO VSDEVINDER SINGH SHANT IN IT A NO.20BIKO112009 VIDE ORDER DATED 17.04.2009. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS., WE AR E OF THE VIEW THAT ORDER OF CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. IT MAY B E SEEN FROM THE GROUNDS OF APPEAL RAISED BY THE REVENUE THAT THE REVENUE DISPU TED ONLY THE PROOF OF IDENTITY OF THE SHAREHOLDER. IN THIS REGARD IT IS S EEN THAT FOR A Y.2004-05 SHREE SHYAM TREXIM PVT. LTD., WAS ASSESSED BY ITO, WARD- 9(4), KOLKATA AND THE ORDER OF ASSESSMENT U/S/143(3) DATED 25.01.2006 IS PLACED IN THE PAPER BOOK. SIMILARLY NAVALCO COMMODITIES PVT. LTD., WAS ASSESS ED TO TAX U/S 143(3) FOR A Y.2005- 06 BY ITO, WARD- 9(4), KOLKATA BY ORDER DAT ED 20.03.2007. SIMILARLYJEWELLOCKTREXIM PVT. LTD WAS ASSESSED TO T AX FOR A Y.2005-06 BY THE VERY SAME ITO- WARD- 9(3), KOLKATA ASSESSING THE AS SESSEE. IN THE LIGHT OF THE ABOVE FACTUAL POSITION WHICH IS NOT DISPUTED BY THE REVENUE, IT CANNOT BE SAID THAT THE IDENTITY OF THE SHARE APPLICANTS REMAINED NOT PROVED BY THE ASSESSEE. THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT AS WELL AS ITA T KOLKATA BENCH ON WHICH RELIANCE WAS PLACED BY THE LEARNED C OUNSEL FOR THE ASSESSEE ALSO SUPPORTS THE VIEW THAT FOR NON PRODUCTION OF D IRECTORS OF THE INVESTOR COMPANY FOR EXAMINATION BY THE AO IT CANNOT BE HELD THAT THE IDENTITY OF A ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 17 LIMITED COMPANY HAS NOT BEEN ESTABLISHED. FOR THE R EASONS GIVEN ABOVE WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE APPEAL O F THE REVENUE. ' 38. TO CONCLUDE, SECTION 68 OF THE ACT PROVIDES THA T IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPECT OF WHICH THE ASSESSEE FAILS TO EXPLAIN THE NATURE AND SOURCE SHALL BE ASSESSED AS ITS UNDISCLOSED INCOME. IN THE FACTS OF THE PRESENT CASE, BOTH THE NATURE & SOURCE OF THE SHARE APPLICA TION RECEIVED WAS FULLY EXPLAINED BY THE ASSESSEE. THE ASSESSEE HAD DISCHAR GED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE S HARE APPLICANTS. THE PAN DETAILS, BANK ACCOUNT STATEMENTS, AUDITED FINANCIAL STATEMENTS AND INCOME TAX ACKNOWLEDGMENTS WERE PLACED ON AO'S RECORD. WITHOUT DOING SO, THE ADDITION MADE BY THE AO IS BASED ON CONJECTURES AND SURMISES CANNOT BE JUSTIFIED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSE D ABOVE, NO ADDITION WAS WARRANTED UNDER SECTION 68 OF THE ACT. THEREFORE, W E DELETE THE ADDITION MADE BY THE ASSESSING OFFICER TO THE TUNE OF RS.1,95,00, 000/-. 5. LEARNED DEPARTMENTAL REPRESENTATIVE AT THIS STAG E QUOTED HON'BLE APEX COURTS DECISION IN PCIT VS. NRA IRON & STEEL PVT. LTD . IN CIVIL APPEAL NO. 2463 OF 2019 DATED 05.03.2019 RESTORING SUCH UNEXPLAINED CASH C REDITS ADDITION IN THE NATURE OF THE SHARE CAPITAL / PREMI UM INVOKING ACCOMMODATION ENTRY PROVIDERS. WE NOTE THAT THEIR LORDSHIPS HAD C OME ACROSS AN INSTANCE OF THE CONCERNED ASSESSEE HAVING FAILED TO SATISFY THE ABOVE STATED THREE PARAMETERS (SUPRA) WHEREAS THE FACTS IN THE INSTANT CASE SUFFICIENTLY REVEAL THAT THIS TAXPAYER HAD DULY DISCHARGED ITS ONUS AND ALSO RESPONDED TO SECTION 131 SUMMONS. WE THEREFORE REJECT THE REVENUES ARGU MENTS SUPPORTING LOWER AUTHORITIES ACTION AND DELETE THE IMPUGNED UN-EXPL AINED CASH CREDITS ADDITION OF 2,01,50,000/-. THE ASSESSEE SUCCEEDS IN ITS SOLE SU BSTANTIVE GRIEVANCE. 6. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 08/ 01/2012 SD/- SD/- ( &) (( &) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP )- 08 / 01 /20 20 ITA NO.941/KOL/2017 A.Y. 2012-13 M/S BLUE LOTUS DESIGNERS PVT. LTD. VS. ITO WD -7(4), KOL. PAG E 18 / COPY OF ORDER FORWARDED TO:- 1 . /APPELLANT-M/S BLUE LOTUS DESIGNERS PVT. LTD., 6/1C , PRANATH CHOWDHURY LANE KOLKATA-700 002 2 . /RESPONDENT-ITO WARD-7(4) AAYAKAR BHAWAN, P-7, CHOW RINGHEE SQ. KOLKATA-69 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5 . 8 ((4, 4, / DR, ITAT, KOLKATA 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ 4,