M/S.ABHIJAVALA DEVELOPERS PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICER 9(1)(1), MUMBAI

ITA 952/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2232 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 19-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR LD
• Assessee Lawyers: G AURAV BANSAL LD
• Keywords: Unexplained cash credit; Corroborative evidences; Accommodation entries
• Section: 143(3); 131; 68

Judgement Text

ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI AMARJIT SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.952/MUM/2019 ( / ASSESSMENT YEAR: 2012-13) M/S. ABHIJAVALA DEVELOPERS PVT. LTD. 11/1, SHARADA CENTRE ERANDWANE, PUNE-411 004. / VS. INCOME TAX OFFICER - 9 (1)(1) ROOM NO.205, INCOME TAX OFFICE CHURCHGATE, MUMBAI-400 020. ! ./ ./PAN/GIR NO. AAKCA-0303-R ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : SHRI GAURAV BANSAL- LD. AR REVENUE BY : SHRI BRAJENDRA KUMAR - LD.SR.DR / DATE OF HEARING : 09/11/2020 / DATE OF PRONOUNCEMENT : 03/12/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1.1 AS PER THE PROVISIONS OF SECTION 68 OF THE INCO ME TAX ACT, 1961, WHERE ANY SUM IS FOUND CREDITED IN THE ASSESSEES B OOKS AND ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF OR THE EXPLANATION FURNISHED IS FOUND TO BE UNSATISFACTORY , THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE A SSESSEE OF THAT PREVIOUS YEAR. A PROVISO HAS BEEN INSERTED TO THE S AID SECTION BY ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 2 FINANCE ACT, 2012 W.E.F. 01/04/2013 TO PROVIDE THAT WHERE THE ASSESSEE IS A COMPANY AND THE SUM SO CREDITED CONSISTS OF SH ARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM ETC., THE EXPLA NATION FURNISHED BY THE ASSESSEE SHALL BE DEEMED TO BE NOT SATISFACTORY UNLESS THE PERSON IN WHOSE NAME SUCH CREDIT IS RECORDED ALSO OFFERS AN E XPLANATION ABOUT NATURE AND SOURCE OF SUM SO CREDITED AND SUCH EXPLA NATION IS FOUND TO BE SATISFACTORY. HOWEVER, THIS PROVISO IS APPLICABL E ONLY FROM AY 2013-14 AND THE SAME IS NOT RETROSPECTIVE IN NATURE AS HELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE PRIVATE LIMITED [80 TAXMANN.COM 272]. THE SAID POSITION HAS ALSO BEEN REITERATED BY HONBLE BOMBAY HIGH COURT IN ITS RECE NT DECISION TILTED AS GAURAV TRIYUGI SINGH V/S ITO (ITA NO.1750 OF 207, D ATED 22/01/2020) WHICH ALSO CONSIDER ITS EARLIER DECISION OF PR.CIT V/S VEEDHATA TOWERS PVT. LTD. (2018 403 ITR 415). MORE PERTINENTLY, THE SAID PROVISO IS NOT, AT ALL, APPLICABLE IN CASE OF UNSECURED LOANS OR DEPOS ITS. 1.2 IT IS SETTLED POSITION OF LAW THAT TO AVOID THE RIGORS OF SECTION 68, THE ASSESSEE MUST PROVE THE IDENTITY, CREDITWORTHINESS OF THE LENDERS / INVESTORS TO ADVANCE SUCH MONIES AND GENUINENESS OF THE TRANSACTIONS. ONCE THESE THREE INGREDIENTS ARE SHOWN TO BE FULFIL LED BY THE ASSESSEE, THE PRIMARY ONUS CASTED UPON HIM, IN THIS REGARD, C OULD BE SAID TO HAVE BEEN DISCHARGED AND ACCORDINGLY, THE ONUS WOULD SHI FT UPON REVENUE TO DISLODGE THE ASSESSEES CLAIM BY BRINGING ON RECORD MATERIAL EVIDENCES AND UNLESS THIS ONUS IS DISCHARGED BY THE REVENUE, NO ADDITION COULD BE SUSTAINED U/S 68. THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS P. LTD. [319 ITR 5], DISMISSING REVENUES APPEAL, OBSERVED AS UNDER: - ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 3 2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME UNDER SECTION 68 OF IT ACT, 1961? WE FIND NO MERIT IN THI S SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY I S RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAME S ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR I NDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WI TH THE IMPUGNED JUDGMENT. 3. SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS DI SMISSED. THE RATIO OF SAID DECISION HAS SUBSEQUENTLY BEEN FO LLOWED BY VARIOUS JUDICIAL AUTHORITIES IN CATENA OF JUDICIAL PRONOUNC EMENTS. THE SAID DECISION HAS BEEN FOLLOWED BY HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE PRIVATE LIMITED [8 0 TAXMANN.COM 272] & SUBSEQUENTLY IN CIT VS. ORCHID INDUSTRIES PRIVATE LIMITED [88 TAXMANN.COM 502]. THE HONBLE DELHI HIGH COURT FOLLOWED THE SAID DECISION IN PR. CIT V/S ADAMINE CONSTRUCTION PVT. LTD. [107 TAXMANN.COM 84] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION WAS DISMISSED BY HONBLE SUPREME COURT WHICH IS REPORTE D AT 107 TAXMANN.COM 85. SIMILAR IS THE POSITION OF DECISION OF HONBLE DELHI HIGH COURT RENDERED IN PR. CIT V/S HIMACHAL FIBERS LTD. [98 TAXMANN.COM 72] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION WAS DISMISSED BY HONBLE SUPREME COURT WHICH IS REPORTE D AT 98 TAXMANN.COM 173. SIMILAR IS THE DECISION OF HONBLE HIGH COURT OF MADHYA PRADESH IN PR. CIT V/S CHAIN HOUSE INTERNATIONAL PVT. LTD. [98 TAXMANN.COM 47] AGAINST WHICH REVENUES SPECIAL LEAVE PETITION HAS BEEN DISMISSED BY HONBLE SUPREME COURT ON 18/0 2/2019 WHICH IS REPORTED AT 103 TAXMANN.COM 435. SIMILAR IS THE REC ENT DECISION OF HONBLE BOMBAY HIGH COURT IN PR. CIT V/S AMI INDUSTRIES (INDIA) PVT. LTD. [ITA NO. 1231 OF 2017, DATED 29/01/2020) WHICH HAS BEEN RENDERED AFTER CONSIDERING THE PRINCIPLES LAID DOWN BY HONBLE SUPREME ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 4 COURT IN ITS RECENT DECISION TITLED AS PR.CIT VS. NRA IRON & STEEL PVT. LTD. [412 ITR 161]. 1.3 PROCEEDING FURTHER, IT IS TRITE LAW THAT NO ADD ITIONS COULD BE MADE ON THE BASIS OF MERE DOUBTS, CONJECTURES OR SURMISES. ONCE THE PRIMARY ONUS TO SUBSTANTIATE THE TRANSACTIONS IS DISCHARGED BY THE ASSESSEE, IT WOULD BE INCUMBENT UPON REVENUE TO DISLODGE THE ASS ESSEES CLAIM AND SUBSTANTIATE THE ALLEGATIONS WITH CORROBORATIVE EVI DENCES. UNTIL & UNLESS THIS EXERCISE IS UNDERTAKEN, THE ADDITIONS WOULD NO T BE SUSTAINABLE IN THE EYES OF LAW. LASTLY, AS A PRINCIPLE OF NATURAL JUST ICE, THE ADVERSE MATERIAL BEING USED AGAINST THE ASSESSEE MUST BE CONFRONTED TO THE ASSESSEE AND AN OPPORTUNITY TO REBUT THE SAME WAS TO BE PROV IDED TO THE ASSESSEE. THE FAILURE TO DO SO WOULD RESULT INTO VI OLATION OF ASSESSEES SUBSTANTIVE RIGHTS TO DEFEND HIS STAND IN THE MATTE R. 2.1 KEEPING IN MIND THE AFORESAID LEGAL POSITION, W E FIND THAT THE PRESENT ASSESSEE IS IN APPEAL BEFORE US FOR ASSESSM ENT YEAR [IN SHORT REFERRED TO AS AY] 2012-13 AND CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-16, MUMBAI, [IN SHORT REFER RED TO AS CIT(A)], APPEAL NO.CIT(A)-16/ITO-9(1)(1)/IT-402/2015-16 DATED 28/02/2018 IN SUSTAINING CERTAIN ADDITIONS U/S 68. THE GROUNDS RA ISED BY THE ASSESSEE ALONG WITH FORM NO.36 HAS BEEN REVISED VIDE LETTER DATED 11/03/2020 WHICH HAVE BEEN TAKEN ON RECORD. THE REVISED GROUND S RAISED BY THE ASSESSEE READ AS UNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN NOT FOLLOWING THE INSTRUCTION OF CBDT AND HAS SCRUTINIZED AND MADE ADDITION ON THE ISSUE WHICH WAS NOT COVERED UN DER THE CASS WHILE SELECTING THE CASE UNDER SCRUTINY. THEREFORE ADDITION U/S. 68 OF THE INCOME TAX ACT 1961, ON ACCOUNT OF SHARE CAPITAL MONEY OF RS.6,00,000/- AND UNSECURED LOANS OF RS.2,44,00,000/- HAS TO BE DELETED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN ADDING THE SHARE CAPITAL MONEY OF RS.6,00,000/- AND UNSECURED LOANS OF ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 5 RS.2,44,00,000/- U/S. 68 OF THE INCOME TAX ACT 196 1, WITHOUT CONSIDERING THE FACTS OF THE CASE. AS EVIDENT, THE ASSESSEE IS AGGRIEVED BY CERTAIN AD DITIONS U/S 68 ON ACCOUNT OF SHARE APPLICATION MONEY OF RS. 6 LACS AN D UNSECURED LOANS OF RS.244 LACS. 2.2 WE HAVE CAREFULLY HEARD THE ARGUMENTS ADVANCED BY BOTH THE REPRESENTATIVES. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE (AR), DRAWING OUT ATTENTION TO THE DOCUMENTS AS PLACED IN THE PAPER BOOK, ASSAILED THE ADDITIONS AS SUSTAINED BY LD. FIRST AP PELLATE AUTHORITY. RELIANCE HAS BEEN PLACED ON VARIOUS JUDICIAL PRONOU NCEMENTS, THE COPIES OF WHICH HAVE BEEN PLACED ON RECORD. THE SAM E HAS DULY BEEN DELIBERATED AND THE SETTLED LEGAL POSITION HAS ALRE ADY BEEN ENUMERATED BY US IN THE OPENING PARAGRAPHS. THE LD. DR RELIED UPON THE FINDINGS OF LOWER AUTHORITIES AND PLEADED FOR DISMISSAL OF APPE AL. IN THE ABOVE BACKGROUND, OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3.1 THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE IS STATED TO BE ENGAGED IN CIVIL CONSTRUCTION. IT WAS ASSESSED FOR YEAR UNDER CONSIDERATION U/S 143(3) ON 28/03/2015 WHEREIN IT W AS SADDLED WITH AGGREGATE ADDITIONS OF RS.250 LACS AS UNEXPLAINED C ASH CREDIT U/S 68 AND THE SAME FORM SUBJECT MATTER OF PRESENT APPEAL BEFORE US. DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED THAT THE ASSE SSEE WAS IN RECEIPT OF UNSECURED LOANS AS WELL AS SHARE APPLICATION MON EY FROM 6 CORPORATE ENTITIES AS PER THE FOLLOWING DETAILS:- ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 6 NO. NAME OF THE LENDER / INVESTOR UNSECUR E D LOANS (RS.) SHARE APPLICATION MONEY (RS.) 1. KURMI DEVELOPERS PVT.LTD. 99,00,000 1,00,000 2. NIRVANA CLOTHING PVT.LTD. 14,00,000 1,00,000 3. ASAN INVESTMENT & FINANCE SERVICES PVT.LTD. 34,00,000 1,00,000 4. KHUSHI INDUSTRIES LTD. 9,00,000 1,00,000 5. KINGS MERCHANTS PVT.LTD. 29,00,000 1,00,000 6. RISHI AUTOMATION P.LTD. 59,00,000 1,00,000 TOTAL 2,44,00,000 6,00,000 ACCORDINGLY, THE ASSESSEE WAS ASKED TO PROVE THE ID ENTITY OF THE PARTIES, CREDITWORTHINESS OF LOAN CREDITORS AND GENUINENESS OF TRANSACTIONS IN TERMS OF THE REQUIREMENT OF SEC.68 OF THE ACT. IN D EFENSE, THE ASSESSEE SUBMITTED ACCOUNT CONFIRMATIONS OF THESE PARTIES, T HEIR RELEVANT BANK STATEMENT SHOWING TRANSFER OF FUNDS THROUGH BANKING CHANNELS AND ALSO COPIES OF RETURN OF INCOME AS WELL AS FINANCIAL STA TEMENTS OF THE INVESTOR / LENDER ENTITIES. HOWEVER, SUMMONS ISSUED U/S. 131 BY LD. AO TO THESE ENTITIES WERE RETURNED BACK BY POSTAL AUTHORITIES W ITH REMARKS LIKE NOT KNOWN / INCOMPLETE ADDRESS. THE ASSESSEE WAS UNABLE TO PRODUCE ANY OF THESE PARTIES. IN THE ABOVE BACKGROUND, LD. AO P ROCEEDED TO EXAMINE THE DOCUMENTS FURNISHED BY THE ASSESSEE IN SUPPORT OF THE TRANSACTIONS. 3.2 AFTER GOING THROUGH DOCUMENTS OF M/S ASAN INVES TMENT & FINANCE SERVICES PRIVATE LIMITED, IT WAS OBSERVED THAT HUGE FUNDS WERE RECEIVED AND TRANSFERRED AT REGULAR INTERVALS BY THIS ENTITY AND THERE WAS NO GENUINE BUSINESS ACTIVITY. ANOTHER REASON TO DOUBT THE GENUINENESS OF THE TRANSACTIONS WAS THAT THE SUMMONS SENT TO THE S AID PARTY WAS UN- SERVED BUT STILL THE REPLY WAS RECEIVED IN TAPAL AND THEREFORE, IT WAS TO BE CONCLUDED THAT THE SAID PARTY DELIBERATELY AVOIDED ATTENDING IN-PERSON AND SUBMITTING RELEVANT EVIDENCES IN SUPPORT OF THE TRANSACTIONS. ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 7 THEREFORE, MONIES RECEIVED FROM SAID ENTITY WERE HE LD TO BE NON- GENUINE. MORE OR LESS, SIMILAR WAS THE FINDINGS IN RESPECT OF ENTITIES LISTED AT SERIAL NOS. 4 TO 6. SIMILAR WAS THE FINDINGS IN RESPECT OF ENTITIES LISTED AT SERIAL NOS. 1 TO 2 WHEREIN ADDITIONAL FACTS WERE THAT CERTAIN INFORMATION WAS RECEIVED FROM DGIT (INV.) KOLKATA THAT ONE MR. PRAKASH JAJODIA WAS INVOLVED IN PROVIDING BOGUS ACCOMMODATION ENTRIES O F VARIED NATURE. THE ENTITY LISTED AT SERIAL NO. 1 I.E. M/S KURMI DEVELO PERS PRIVATE LIMITED WAS STATED TO BE ONE OF THE PAPER COMPANY FLOATED BY TH E SAID GROUP. THE DIRECTORS OF M/S KURMI DEVELOPERS PRIVATE LIMITED A DMITTED TO BE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES IN LIEU OF COMMISSION. THE ENTITY LISTED AT SERIAL NO.2 I.E. M/S NIRVANA CLOTH ING PRIVATE LIMITED WAS STATED TO BE ANOTHER SIMILAR PAPER ENTITY FLOATED B Y THE SAID GROUP. IT WAS ALLEGED THAT ALL SUCH ENTITIES OF THE GROUP WERE EN GAGED IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES. 3.3 IN THE ABOVE BACKGROUND, THE UNSECURED LOANS AS WELL AS SHARE APPLICATION MONEY RECEIVED FROM ALL THE 6 ENTITIES WAS HELD TO BE NON- GENUINE AND A SHAM CLAIM MADE BY THE ASSESSEE. THER EFORE, THESE AMOUNTS WERE ADDED TO THE INCOME OF THE ASSESSEE U/ S 68 OF THE ACT. 4. UPON FURTHER APPEAL, LD. CIT(A) PRIMARILY GOING BY THE FINDINGS OF LD. AO AND RELYING UPON VARIOUS JUDICIAL DECISIONS CONCLUDED THAT THE ASSESSEE FAILED TO EXPLAIN THE CREDITS WHICH WOULD JUSTIFY ADDITION THEREOF U/S 68 AND ACCORDINGLY, THE ASSESSEES APPEAL WAS D ISMISSED. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING DOCUMENTS PLA CED IN THE PAPER BOOK. AFTER GOING THROUGH THE DOCUMENTARY EVIDENCES AS SUBMITTED BY THE ASSESSEE BEFORE LOWER AUTHORITIES TO SUBSTANTIA TE THESE TRANSACTIONS, ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 8 WE FIND THAT THE ASSESSEE HAD FURNISHED FOLLOWING D OCUMENTS WITH RESPECT TO ALL THE INVESTOR /LENDER ENTITIES: - (I) COPY OF CONFIRMATION OF ACCOUNTS BY LENDER / IN VESTOR (II) COPY OF PAN CARD OF EACH OF THE LENDER / INVES TOR (III) COPY OF BANK STATEMENT OF LENDER / INVESTOR (IV) COPY OF ITR ACKNOWLEDGEMENT OF EACH OF LENDER / INVESTOR (V) COPY OF FINANCIAL STATEMENTS OF ALL INVESTOR / LENDER ENTITIES UPON PERUSAL OF DOCUMENTS PERTAINING TO M/S ASAN IN VESTMENT & FINANCE SERVICES PRIVATE LIMITED, WE FIND THAT THIS ENTITY IS ASSESSED TO INCOME TAX VIDE PAN AAGCA6526N AND HAS FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AFTER PAYING TAXES OF RS.0.46 LACS. IT HAS DULY CONFIRMED THE TRANSACTIONS CARRIED OUT WITH TH E ASSESSEE. THE PERUSAL OF ITS BANK STATEMENT WOULD SHOW THAT ALL T HE FUNDS HAVE BEEN TRANSFERRED TO THE ASSESSEE THROUGH BANKING CHANNEL S AND THERE WAS NO IMMEDIATE CASH DEPOSIT BEFORE TRANSFER OF FUNDS TO THE ASSESSEE. THE FINANCIAL ACCOUNTS OF THIS ENTITY HAVE DULY BEEN AU DITED AS PER THE COMPANIES ACT. THE TRANSACTIONS CARRIED OUT WITH TH E ASSESSEE HAVE DULY BEEN REFLECTED IN ITS FINANCIAL STATEMENTS. TH IS ENTITY HAS RESERVES & SURPLUS OF RS.632.39 LACS WHICH HAVE BEEN USED TO MAKE FURTHER INVESTMENTS. SIMILAR ARE THE DOCUMENTS IN THE CASE OF M/S KHUSHI INDUSTRIES LIMITED. THIS ENTITY HAS ALSO FILED CONFIRMATION OF ACCOUNT AND IT HOLDS VALID PAN WHICH IS EVIDENT FROM ITS RETURN OF INCOME. THE TRA NSACTIONS CARRIED OUT WITH THE ASSESSEE ARE THROUGH BANKING CHANNELS AND THERE IS NO IMMEDIATE CASH DEPOSIT BEFORE TRANSFER OF FUNDS TO THE ASSESSEE. THIS ENTITY HAS PAID TAXES OF RS.2.08 LACS DURING THE YE AR. ITS FINANCIAL STATEMENTS HAVE DULY BEEN AUDITED AND THIS ENTITY H AS RESERVES & SURPLUS OF MORE THAN RS.2281.70 LACS. ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 9 ANOTHER ENTITY I.E. M/S KINGS MERCANTILE PRIVATE LI MITED HAS ALSO FILED CONFIRMATION OF ACCOUNT. THIS ENTITY HAS PAID TAXES OF RS.0.34 LACS. ITS FINANCIAL STATEMENTS HAVE DULY BEEN AUDITED AND IT HAS RESERVES & SURPLUS OF RS.710 LACS BESIDES SHORT-TERM BORROWING S. THESE FUNDS HAVE BEEN USED TO ADVANCE LOANS AND ADVANCES. M/S RISHI AUTOMATION LIMITED HAS ALSO FILED CONFIRM ATION OF ACCOUNTS AND IT HAS PAID TAXES OF RS.0.34 LACS WHICH IS EVIDENT FROM ITS INCOME TAX RETURN FOR THE YEAR UNDER CONSIDERATION. THE PERUSA L OF BANK STATEMENT WOULD REVEAL THAT THE FUNDS HAVE BEEN TRANSFERRED T O THE ASSESSEE THROUGH BANKING CHANNEL, THERE BEING NO IMMEDIATE C ASH DEPOSIT BEFORE TRANSFER OF FUNDS TO THE ASSESSEE. ITS FINANCIAL ST ATEMENTS ARE LIKEWISE AUDITED AND IT HAS RESERVES OF MORE THAN RS.159.37 LACS. M/S NIRVANA CLOTHING PRIVATE LIMITED HAS ALSO FILED CONFIRMATION OF ACCOUNTS AND IT HAS PAID TAXES OF RS.0.55 LACS WHIC H IS EVIDENT FROM ITS INCOME TAX RETURN FOR THE YEAR UNDER CONSIDERATION. THE PERUSAL OF BANK STATEMENT WOULD REVEAL THAT THE FUNDS HAVE BEEN TRA NSFERRED TO THE ASSESSEE THROUGH BANKING CHANNEL, THERE BEING NO IM MEDIATE CASH DEPOSIT BEFORE TRANSFER OF FUNDS TO THE ASSESSEE. I TS FINANCIAL STATEMENTS ARE LIKEWISE AUDITED AND IT HAS SUFFICIENT RESERVES TO MAKE FURTHER INVESTMENTS. THE LAST ENTITY I.E. M/S KURMI DEVELOPERS PRIVATE L IMITED HAS ALSO FILED CONFIRMATION OF ACCOUNTS AND IT HAS PAID TAXES OF R S.12.42 LACS WHICH IS EVIDENT FROM ITS INCOME TAX RETURN FOR THE YEAR UND ER CONSIDERATION. THE PERUSAL OF BANK STATEMENT WOULD REVEAL THAT THE FUN DS HAVE BEEN TRANSFERRED TO THE ASSESSEE THROUGH BANKING CHANNEL , THERE BEING NO IMMEDIATE CASH DEPOSIT BEFORE TRANSFER OF FUNDS TO THE ASSESSEE. ITS ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 10 FINANCIAL STATEMENTS ARE LIKEWISE AUDITED AND IT HA S SUFFICIENT RESERVES OF MORE THAN RS.579.50 LACS TO MAKE FURTHER INVESTMENT S. UPON PERUSAL OF ABOVE DOCUMENTS, WE FIND THAT THE P RIMARY ONUS OF ESTABLISHING THE IDENTITY OF THE INVESTOR ENTITIES, PROVING THEIR RESPECTIVE CREDITWORTHINESS AND TO ESTABLISH THE GENUINENESS O F THE TRANSACTIONS WAS DULY BEEN DISCHARGED BY THE ASSESSEE. THE ASSES SEE WAS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE FOR THIS YEA R. THEREFORE, THE ONUS WAS ON REVENUE TO REBUT THESE EVIDENCES BY BRINGING ON RECORD COGENT MATERIAL TO DISLODGE ASSESSEES EVIDENCES. HOWEVER, EXCEPT FOR THE FACT THAT SUMMONS REMAINED UN-SERVED, THERE IS NOTHING I N THE ARMORY OF REVENUE TO UNSETTLE THE ASSESSEES CLAIM. THE ALLEG ATIONS ARE NOT SUPPORTED BY ANY CORROBORATIVE EVIDENCES. ONCE THE INITIAL ONUS WAS DISCHARGED BY THE ASSESSEE, IT WAS INCUMBENT UPON R EVENUE TO CARRY OUT FURTHER INVESTIGATION TO SUPPORT THE ALLEGATION THA T THE CREDITS WERE UNEXPLAINED. HOWEVER, NOTHING OF THAT SORT HAS BEEN SHOWN TO HAVE BEEN CARRIED OUT. SO FAR AS THE INFORMATION OF DGIT (INV.) IS CONCERNED, WE FIND THAT THESE WERE MERELY THIRD PARTY STATEMEN TS WHICH WERE NEVER CONFRONTED TO THE ASSESSEE AND THOSE STATEMENTS ON STANDALONE BASIS COULD NOT FORM THE BASIS OF MAKING ADDITIONS IN THE HANDS OF THE ASSESSEE. IT IS TRITE LAW THAT NO ADDITIONS COULD B E BASED MERELY ON DOUBTS, CONJECTURES OR SURMISES. THEREFORE, THE ADD ITIONS AS MADE BY LD. AO, IN OUR CONSIDERED OPINION, ARE NOT SUSTAINA BLE IN THE EYES OF LAW. THE SETTLED LEGAL POSITION AS ENUMERATED BY US IN T HE OPENING PARAGRAPHS DULY SUPPORT THE SAID CONCLUSION. THEREF ORE, WE DELETE THE IMPUGNED ADDITIONS AS SUSTAINED BY LD. CIT(A). THE GROUNDS, THUS RAISED, STAND ALLOWED. ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 11 6. THE LD. AR, DURING THE COURSE OF HEARING, ADVANC ED ARGUMENTS FOR THE SUBMISSIONS THAT THE CASE OF THE ASSESSEE WAS S ELECTED FOR SCRUTINY UNDER CASS FOR THE REASON THAT THERE WAS LARGE INTE REST EXPENSES RELATABLE TO EXEMPT INVESTMENTS U/S 14A. HOWEVER, N O SUCH ADDITIONS WERE MADE BY LD. AO IN THE ASSESSMENT ORDER AND THE REFORE, THE SCOPE OF SCRUTINY COULD NOT BE ENLARGED TO MAKE ADDITIONS OF UNEXPLAINED CASH CREDIT U/S 68. HOWEVER, THESE ARGUMENTS DO NOT CONV INCE US MUCH SINCE UPON PERUSAL OF PAGE NO. 17, IT IS QUITE EVIDENT TH AT THE TYPE OF SCRUTINY WAS COMPLETE AND IT WAS NOT A LIMITED SCRUTINY CASE . THEREFORE, LD. AO WAS QUITE EMPOWERED TO MAKE CORRECT ASSESSMENT OF A SSESSEES INCOME CONSIDERING ALL THE FACTS AND ISSUES. THERE IS NOTHING ON RECORD WHICH WOULD SHOW THAT THERE WAS ANY DEFECT IN THE J URISDICTION OF LD. AO, IN ANY MANNER. WE DO NOT FIND ANY SUCH MATERIAL ON RECORD. THEREFORE, THIS PLEA WAS TO BE REJECTED. 7. IN THE RESULT, THE APPEAL STANDS PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 03 RD DECEMBER, 2020. SD/- SD/- (AMARJIT SINGH) (MA NOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 03/12/2020 SR.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. ,-$. , . , / DR, ITAT, MUMBAI 6. -/01 / GUARD FILE ITA NO.952/MUM/2019 M/S. ABHIJAVALA DEVELOPERS PRIVATE LIMITED ASSESSMENT YEAR: 2012-13 12 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.