M/s. Anant Steel Pvt. Ltd., Indore V. The ACIT, Indore

ITSSA 28/IND/2010

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1107 (ITAT-INDORE)
• Duration Of Justice: 5 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-09-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 08-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHNEY
• Assessee Lawyers: S N AGRAWAL
• Keywords: Reopening of assessment; Unexplained cash credit; Bogus Share capital; Depreciation; Income from undisclosed sources; Search and seizure; Question of law; Accommodation entries; Block assessment; Documents seized
• Section: 143(3); 153A; 234B; 68; 132

Judgement Text

(SS) 28 TO 31 OF 2010 ANANT STEEL 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER IT(SS)A NOS. 31, 28, 29&30/IND/2010 A.YS. 2001-02 TO 2004-05 M/S. ANANT STEEL PVT. LTD., INDORE PAN AACCA 1283 E :: APPELLANT VS ACIT-5(1), INDORE :: RESPONDENT ASSESSEE BY SHRI S.N. AGRAWAL AND SHRI PANKAJ MOGRA RESPONDENT BY SHRI RAJEEV VARSHNEY DATE OF HEARING 16.09.2015 DATE OF PRONOUNCEMENT 18.11.2015 O R D E R PER SHRI D.T. GARASIA, JM THESE APPEALSARE FILED BY THE ASSESSE CHALLENGING THE COMMON ORDER OF LD. CIT(A)-II, INDORE, DATED 15.01.2010 ON THE F OLLOWING GROUNDS OF APPEAL: (SS) 28 TO 31 OF 2010 ANANT STEEL 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, LD. CIT(A) HAS ERRED IN MAINTAINING ADDITION IN RESPECT OF SHA RE APPLICATION MONEY WHILE PASSING ORDER U/S 153A R.W.S. 143(3) EV EN WHEN NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED DU RING THE COURSE OF SEARCH AS TO JUSTIFY THE SAID ADDITION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, LD. CIT(A) HAS ERRED IN MAINTAINING ADDITION IN RESPECT OF SHA RE APPLICATION MONEY/SHARE CAPITAL OF RS.15 LACS EVEN WHEN THE ASS ESSEE HAS PROPERLY DISCHARGED ONUS LYING ON HIM. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, LD. CIT(A) HAS ERRED IN MAINTAINING THE CHARGING OF INTEREST U /S 234B AS MANDATORY IN NATURE EVEN WHEN NO SUCH INTEREST WAS CHARGEABLE ON THE AMOUNT OF INCOME RETURNED. 2. SHORT FACTS OF THE CASE ARE AS UNDER: A SEARCH U/S 132 OF THE I.T. ACT WAS EXECUTED ON 2 1.11.2006 ON THE OFFICE AND FACTORY PREMISES OF THE ASSESSEE. THE AS SESSEE WAS SERVED WITH THE NOTICE U/S 153A AND ASSESSEE FILED NIL RETURNED INCOME AND DEPRECIATION REMAINED UNADJUSTED OF RS.7 91676 CLAIMED TO BE CARRIED FORWARD. THE FACTS OF THE ALL AYS ARE SAME BUT FOR THE DETAIL ADDITION, WE ARE REPRODUCING THE SHARE APPLI CATION MONEY RECEIVED BY THE ASSESSEE AND IT WAS ADDED TO THE TO TAL INCOME OF THE ASSESSEE IN RESPECT OF AYS FROM AY 2001-02 TO 2004- 05 WHICH READS AS UNDER: 2.3.1] ASSESSMENT YEAR 2001-02 (SS) 28 TO 31 OF 2010 ANANT STEEL 3 S.NO NAME OF COMPANY PAN NO AMOUNT STATUS 1. AUTHENTIC INVESTMENT & FINANCE LIMITED AAACA7079C 1000000 SHARE ALLOTTED 2. INDO CAPITAL MARKET LIMITED AAACI3899L 5,00,000 AMOUNT REFUNDED ON 05-03-2002 VIDE CH NO 631437 2.3.2] ASSESSMENT YEAR 2002-03 S.NO NAME OF COMPANY PAN NO SHARES AMOUNT STATUS 1. PRIYANS SAREE P LIMITED AAACP1882C 20000 10,00,000 SHARE ALLOTTED 2. INDO CAPITAL MARKET LIMITED AAACI3899L 5,00,000 AMOUNT REFUNDED ON 05-03-2002 2.3.3] ASSESSMENT YEAR 2003-04 S.NO NAME OF COMPANY PAN NO SHARES AMOUNT STATUS 1. DELTA FASHION LTD. AAACD5697H 400000 2000000 SHA RE ALLOTTED 2. FREC WINGS IMPORT LIMITED AAACF4480A 300000 1500000 SHARE ALLOTTED 3. HIMGIRI DYNAMICS LTD. AABCJ0296M 600000 3000000 SHARE ALLOTTED 4. HINDUSTAN CONTINENTAL LTD. AABCH1575M 400000 2000000 SHARE ALLOTTED 5. MCSURE CAPITAL LTD[ NOW KNOWN AS SAMYAK INTERNATIONAL LTD] AABCM3526F 100000 500000 SHARE ALLOTTED 6. LYTON MGMT. SERVICES LTD L-84 600000 3000000 SHARE ALLOTTED 7. CUBE COMMUNICATION LTD. AABCC0767E 500000 2500000 SHARE ALLOTTED (SS) 28 TO 31 OF 2010 ANANT STEEL 4 8. SHRESHTH LEASING & FINANCE LTD. AADCS3850Q 400000 2000000 SHARE ALLOTTED 9. SHREEVAR OVERSEAS LTD S-1948 500000 2500000 SHAR E ALLOTTED 2.3.4] ASSESSMENT YEAR 2004-05 S.NO NAME OF COMPANY PAN NO SHARES AMOUNT STATUS 1 CUBE COMMUNICATION PRIVATE LIMITED AABCC0767E 20000 1000000 SHARE ALLOTTED THE FACTS OF THE CASE FOR AY 2003-04 READS AS UNDER : ON PERUSAL OF THE AUDITED FINAL ACCOUNTS AND ON PE RUSAL OF THE DETAILS AS SUBMITTED BY THE ASSESSEE, IT WAS NOTICED THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 1,65,00,000/- ON ACCOUNT OF SHARE CAP ITAL AND RS. 25,00,000/- ON ACCOUNT OF SHARE APPLICATION MONEY FROM M/S SHRE EVAR OVERSEAS LIMITED AND NOT OF RS 2,35,00,000/-. DETAILS OF THE SAME AR EAS UNDER: S. NO. NAME OF THE APPLICANT AMOUNT TOTAL BASIC PREMIUM 1 DELTA FASHION LTD. 400000 1600000 2000000 2 FREC WINGS IMPORT LIMITED 300000 1200000 1500000 3 HIMGIRI DYNAMICS LTD. 600000 2400000 3000000 4 HINDUSTAN CONTINENTAL LTD. 400000 1600000 2000000 5 MCSURE CAPITAL LTD. 100000 400000 500000 6 LYTON MGMT. SERVICES LTD 600000 2400000 3000000 7 CUBE COMMUNICATION LTD. 500000 2000000 2500000 8 SHRESHTH LEASING & FINANCE LTD. 400000 1600000 2000000 9 SHREEVAR OVERSEAS LTD 500000 2000000 2500000 3800000 15200000 1,90,00,000 THAT RS. 20,00,000/- TRANSFERRED FROM SHARE APPLICA TION MONEY TO SHARE CAPITAL ACCOUNT IN RESPECT OF M/S AUTHENTIC INVESTM ENT AND FINANCE LIMITED OF RS. 10,00,000/- AND M/S PRIYANS SAREES I NDUSTRIES LIMITED OF RS. 10,00,000/-. THE ASSESSEE WAS ASKED TO JUSTIFY THE AMOUNT OF SHA RE CAPITAL AND SHARE APPLICATION AS RECEIVED BY THE ASSESSEE OF RS. 1,90 ,00,000/-. THE (SS) 28 TO 31 OF 2010 ANANT STEEL 5 ASSESSEE HAD FILED CONFIRMATION OF SHARE APPLICATIO N /SHARE CAPITAL, AMOUNT OF SHARE APPLICATION AND SHARE CAPITAL RECEI VED THROUGH AN ACCOUNT PAYEEE CHEQUE, SHARE APPLICATION FORM AND C OPY OF BOARD RESOLUTION HAS ALSO BEEN FILED. THE ASSESSEE ALSO S UBMITS AS UNDER:- 1] THAT YOU HAVE ASKED THE ASSESSEE TO JUSTIFY THE AMOUNT OF SHARE APPLICATION/SHARE CAPITAL OF RS. 2,35,00,000/-(RUPE ES TWO CRORE THIRTY FIVE LAKHS ONLY). THAT YOU HAVE PROPOSED TO ADDED A N AMOUNT OF RS. 2,35,00,000/- TO THE INCOME OF THE ASSESSEE IN RESP ECT OF SHARE APPLICATION MONEY/SHARE CAPITAL AS RECEIVED BY THE ASSESSEE.THAT ON PERUSAL OF THE DETAILS OF SHARE APPLICATION/ SHARE CAPITAL MONEY AS RECEIVED BY THE ASSESSEE, YOU WILL FIND THAT THE AS SESSEE COMPANY HAS RECEIVED SHARE APPLICATION MONEY OF RS. 25,00,000/- FROM M/S SHREEVEAR OVERSEAS P. LTD. RELEVANT DOCUMENT AS TO JUSTIFY TH E IDENTITY, CAPACITY AND GENUINENESS OF THE TRANSACTION HAS BEEN PROVED. THE ASSESSEE HAD ISSUED 370000 EQUITY SHARES OF RS 10/- EACH WITH SH ARES PREMIUM OF RS. 40/- WHICH COMES TO RS. 37,00,000/- PLUS RS. 1,48,0 0,000/- TOTALING TO RS. 1,85,00,000/-. HOWEVER OUT OF TOTAL SHARE CAPIT AL, AN AMOUNT OF RS. 10,00,000/- AS RECEIVE FROM M/S AUTHENTIC INVESTMEN T 7 FINANCE P LIMITED AND RS. 10,00,000/- AS RECEIVED FROM M/S PR IYANS SAREES IND P. LTD. ACTUALLY RECEIVED IN THE ASST. YEAR 2001-02 AN D 2002-03 RESPECTIVELY ON ACCOUNT OF SHARE APPLICATION MONEY. HENCE EFFECT IVELY AN AMOUNT OF RS 1,65,00,000/- ONLY WERE RECEIVED BY THE ASSESSEE ON ACCOUNT OF SHARE CAPITAL.THAT CONSIDERING THE AMOUNT OF SHARE APPLIC ATION MONEY AND SHARE CAPITAL ACTUALLY RECEIVED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION WERE OF RS. 25,00,000/- AND RS 1,65,0 0,000/- TOTALING TO RS. 1,90,00,000/-. HENCE, ADDITION AS PROPOSED TO R S. 2,35,00,000/- IS FACTUALLY NOT CORRECT.THAT ENTIRE AMOUNT OF SHARE A PPLICATION MONEY AND SHARE CAPITAL, DETAILS OF WHICH HAVE ALREADY BEEN F ILED WITH OUR EARLIER SUBMISSIONS RECEIVED THROUGH AN ACCOUNT PAYEE CHEQU E FROM ALL THE PARTIES.THAT COPY OF SHARE APPLICATION MONEY AND BR OAD RESOLUTION HAVE (SS) 28 TO 31 OF 2010 ANANT STEEL 6 BEEN FILED WHERE EVER APPLICABLE.THAT IDENTITY OF T HE SHARE HOLDERS AND GENUINENESS OF THE TRANSACTION HAVE DULY EXPLAINED. THAT FROM THE ABOVE DOCUMENTS IT IS VERY CLEAR THAT THE ASSESSEE HAS PR OPERLY DISCHARGED ONOUS LYING ON HIM. THE ASSESSEE HAS PROVED IDENTIT Y AND GENUINENESS OF THE INVESTMENT MADE BY ALL THE SHAREHOLDERS IN THE SHARE APPLICATION MONEY OF THE ASSESSEE COMPANY. HENCE, THERE IS NO R EASON FOR MAKING ANY ADDITION IN RESPECT OF SHARE APPLICATION MONEY. . THAT IN VIEW OF THE ABOVE, WHEN THE ASSESSEE HAS PR OPERLY DISCHARGED ONUS LYING ON IT BY PROVING THE IDENTITY OF THE SHA RE HOLDERS AND GENUINENESS OF THE TRANSACTION. IN THE PRESENT CASE THE ASSESSEE HAD FILED COMPLETE DETAILS OF SHARE HOLDERS AND ALSO FI LED CONFIRMATIONS AS RECEIVED FROM ALL THESE SHARE HOLDERS BEFORE THE AS SESSING OFFICER. ALL ARE REGULARLY ASSESSED TO TAX AND THE AMOUNTS WERE ALSO RECEIVED THROUGH AN ACCOUNT PAYEE CHEQUE. IN THAT CASE THERE IS NO JUST IFICATION FOR MAKING ANY ADDITION ON ACCOUNT OF SHARE APPLICATION / SHAR E CAPITAL OF RS 2,35,00,000/-( CORRECT AMOUNT OF RS 1,90,00,000 /). THAT IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE AMOUNT OF SHARE APP LICATION MONEY / SHARE CAPITAL OF RS 2,35,00,000/-( CORRECT AMOUNT O F RS 1,90,00,000 /) AS RECEIVED BY THE ASSESSEE IS GENUINE. THE SAME RE QUIRES TO BE ACCEPTED AS GENUINE. THE ASSESSEE HAD AGAIN SUBMITTED COMPLETE DETAILS A BOUT THE SHARE HOLDERS BY STATING AS UNDER: 1.1] THAT YOU HAVE ASKED FROM THE ASSESSEE TO JUST IFY THE AMOUNT OF SHARE APPLICATION MONEY AND SHARE CAPITAL AS RECEIV ED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. (SS) 28 TO 31 OF 2010 ANANT STEEL 7 1.2] THAT IN THE YEAR UNDER CONSIDERATION THE ASSES SEE HAS RECEIVED AN AMOUNT OF RS. 1,85,00,000/- ON ACCOUNT OF SHARE APP LICATION/SHARE CAPITAL. 1.3] CONFIRMATION LETTER DULY SINGED ALONG WITH SHA RE APPLICATION FORM HAVE ALREADY BEEN FILED ON PG NO. 38 TO 83 OF OUR E ARLIER SUBMISSION. 1.4.1] THAT ENTIRE AMOUNT OF SHARE APPLICATION/ SHA RE CAPITAL RECEIVED BY THE ASSEESSEE THROUGH AN ACCOUNT PAYEE CHEQUES. 1.4.2] THAT SHARE APPLICATION FORM, COPY OF BOARD R ESOLUTION AND CONFIRMATION LETTER HAVE ALSO BEEN FILED. 1.5] THAT AS TO JUSTIFY THE IDENTITY AND EXISTENCE OF THE COMPANIES FROM WHICH SHARE APPLICATION MONEY AND SHARE CAPITAL WER E RECEIVED BY THE ASSESSEE. THE ASSESSEE BY DEPOSITING THE REQUISITE FEE WITH THE REGISTRAR OF COMPANIES OBTAINED FOLLOWING DOCUMENTS: I] CERTIFICATE OF INCORPORATION II] FORM NO.18 AS FILED IN CASE OF CHANGE OF ADDRES S III] COPY OF ARTICLE OF ASSOCIATION AND MEMORANDUM OF ASSOCIATION. IV] COPY OF FORM NO. 32 IN CASE OF CHANGE OF DIRECT ORSHIP. V] COPY OF ANNUAL RETURN VI] COPY OF AUDITED FINANCIAL ACCOUNTS VII] COPY OF COMPLIANCE CERTIFICATE 1.6] THAT COMPANY WISE LIST WITH THE ABOVE SUPPORTI NG PAPERS ARE ENCLOSED. (SS) 28 TO 31 OF 2010 ANANT STEEL 8 1.7] THAT IN VIEW OF THE ABOVE, THE ASSESSEE HAS PR OPERLY DISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTITY, CAPACITY AND GENUINENESS OF TRANSACTION. 1.8) THAT IN VIEW OF THE ABOVE AND AS SUBMITTED IN OUR EARLIER SUBMISSIONS IT IS SUBMITTED THAT THE AMOUNT OF SHAR E APPLICATION MONEY AND SHARE CAPITAL AS RECEIVED BY THE ASSESSEE BE TR EATED AS GENUINE. 2.1] THAT YOU HAVE ASKED FROM THE ASSESSEE TO PROVE THE EXISTENCE OF THE FOLLOWING COMPANIES. SINCE, AT THE TIME OF INQU IRY CONDUCTED AFTER THE SEARCH THESE COMPANIES DOES NOT FOUND EXISTENCE:- S.NO. NAME OF THE COMPANY 1. M/S SHRESTH LEASING & FINANCE LIMITED 2. M/S AUTHENTIC INVESTMENT & FINANCE LIMITED 3. M/S HIMGIRI DYNAMICS LIMITED 4. M/S PRIYANSH SAREE INDUSTRIES LIMITED 5. M/S DELTA FASHION LIMITED 6. M/S CUBE COMMUNICATION (P) LIMITED 7. M/S LYTON MANAGEMENT SERVICES (P) LIMITED 8. M/S FREE WINGS EXPORTS LIMITED 9. M/S HINDUSTAN CONTINENTAL LIMITED 10. M/S MOSURE CAPITAL MARKET LIMITED 11. M/S SHREEVAR OVERSEAS LIMITED M/S SHRESTH LEASING & FINANCE LIMITED THAT M/S SHRESTH LEASING & FINANCE LIMITED WAS INCO RPORATED ON 16-02-1995.THAT OFFICE OF THE ABOVE COMPANY WAS SHI FTED FROM SURAT TO MUMBAI W.E.F. 03-04-2006 ON THE FOLLOWING ADDRESS:- M/S SHRESTH LEASING & FINANCE LIMITED 308, RUPRAJ BUILDING 497, S.V.P.ROAD, OPERA HOUSE MUMBAI (SS) 28 TO 31 OF 2010 ANANT STEEL 9 COPY OF ARTICLE OF ASSOCIATION AND MEMORANDUM OF AS SOCIATION AS FILED WITH THE REGISTRAR OF THE COMPANIES ARE ALSO ENCLOSED. THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS 2000000/- TOW ARDS CONSIDERATION OF 40000 EQUITY SHARES OF RS 10/- EAC H WITH PREMIUM OF RS 40/-.THE AMOUNT OF SHARE APPLICATION MONEY WERE RECEIVED BY THE ASSESSEE THROUGH AN ACCOUNT PAYEE C HEQUES. DETAILS OF THE SAME ARE AS UNDER:- DATE CHEQUE NO BANK AMOUNT 21-01-2003 613414 IDBI BANK LTD 1000000 06-02-2003 613413 IDBI BANK LTD 1000000 2000000 COPY OF SHARE APPLICATION MONEY AND COVERING LETTER WITH COPY OF BOARD RESOLUTION ARE ENCLOSED ON PAGE NOS 76 TO 78 OF OUR EARLIER SUBMISSION.THAT AS EXPLAINED TO US SHRI SUNEET KABR A DIRECTOR OF THE COMPANY M/S SHRESTH LEASING & FINANCE LIMITED. HE HAS EXPLAINED THAT ON 27/11/2006 HE HAS PERSONALLY APPE ARED BEFORE THE ITO (INV), MUMBAI AND HIS STATEMENT WAS RECORDE D OATH. THAT AS REMEMBERED BY HIM IN REPLY TO THE QUESTION NOS 1 0 & 11 OF HIS STATEMENT. HE HAS ACCEPTED THE AMOUNT INVESTED BY H IS COMPANY IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY.THAT W HEN THE ASSESSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITA L. THE AMOUNT OF SHARE APPLICATION/ CAPITAL WAS ALSO RECEI VED THROUGH AN ACCOUNT PAYEE CHEQUE. COMPETE DOCUMENTS AS AVAILABL E WITH THE ASSESSEE HAS ALSO BEEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING THE REQUISITE FEE. IN THAT CASE TH ERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF SHARE APPLICATION MONEY / SHARE CAPITAL AS RECEIVED BY THE ASSESSEE. M/S AUTHENTIC INVESTMENT & FINANCE LIMITED THAT M/S AUTHENTIC INVESTMENT & FINANCE LIMITED WAS INCORPORATED ON 06-03-1987. NAME OF THE COMPANY HAS BEEN (SS) 28 TO 31 OF 2010 ANANT STEEL 10 CHANGED FROM M/S AUTHENTIC INVESTMENT & FINANCE LIM ITED TO M/S MEDIA SAVVY (INDIA) LIMITED W.E.F 16-03-2001.T HE ASSESSEE HAD RECEIVED AN AMOUNT O RS 1000000/- FROM THE SAID COMPANY VIDE TWO DIFFERENT CHEQUES OF RS 500000/- E ACH TOWARDS SHARE APPLICATION MONEY FOR ALLOTMENT OF 20000 EQUI TY SHARES OF FACE VALUE OF RS 10/- WITH PREMIUM OF RS 40/- DURIN G THE FINANCIAL YEAR 2000-01 ( ASST YEAR 2001-02). DETAIL OF THE SA ME ARE AS UNDER:- DATE CHEQUE NO BANK AMOUNT( RS) 24-12-2000 263841 HDFC BANK 500000 10-01-2001 011410 HDFC BANK 500000 1000000 COPY OF SHARE APPLICATION FORM ALONGWITH BOARD RESO LUTION HAS ALREADY BEEN FILED ON PAGE NOS 55 TO 57 OF THE SUBM ISSION AS FILED FOR THE ASSESSMENT YEAR 2001-02.COPY OF CERTIFICATE OF INCORPORATION, ANNUAL RETURN AS FILED WITH THE REGI STRAR OF COMPANIES, ARTICLE OF ASSOCIATION, MEMORANDUM OF AS SOCIATION, FORM NO 32 FOR CHANGE OF DIRECTOR AND COPY OF BALAN CE SHEET AS FILED WITH THE REGISTRAR OF COMPANIES FOR THE YEAR ENDED ON 31.03.2003 ARE SEPARATELY ENCLOSED WITH THIS SUBMIS SION AND ALSO IN THE ASST YEAR 2001-02.THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTITY , CAPACIT Y AND GENUINENESS OF THE SHARE APPLICATION/ SHARE CAPITAL .THAT WHEN THE ASSESSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITA L. THE AMOUNT OF SHARE APPLICATION/ CAPITAL WAS ALSO RECEI VED THROUGH AN ACCOUNT PAYEE CHEQUE. COMPETE DOCUMENTS AS AVAILABL E WITH THE ASSESSEE HAS ALSO BEEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING THE REQUISITE FEE. IN THAT CASE TH ERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF SHARE APPLICATION/SHARE CAPITAL AS RECEIVED BY THE ASSESSEE. M/S HIMGIRI DYNAMICS LIMITED (SS) 28 TO 31 OF 2010 ANANT STEEL 11 THE ASSESSEE COMPANY HAD RECEIVED AN AMOUNT OF RS 3 0 LACS FROM THE SAID COMPANY ON ACCOUNT OF SHARE APPLICATION MO NEY IN RESPECT OF 60000 EQUITY SHARES OF FACE VALUE OF RS 10/- WITH A PREMIUM OF RS 40/-.DETAILS OF SHARE APPLICATION MON EY AS RECEIVED BY THE ASSESSEE COMPANY ARE AS UNDER:- DATE CHEQUE NO BANK AMOUNT( RS) 17-04-2002 750915 HDFC BANK 500000 18-04-2002 750916 HDFC BANK 500000 18-04-2002 750917 HDFC BANK 500000 14-02-2003 899585 HDFC BANK 500000 18-02-2003 899586 HDFC BANK 500000 12-03-2003 899594 HDFC BANK 500000 3000000 COPY OF SHARE APPLICATION FORM AS RECEIVED BY THE A SSESSEE HAS ALREADY BEEN FILED ON PAGE NOS 45 TO 50 OF OUR EARL IER SUBMISSION.2.2.3.4]THE SAID COMPANY WAS ORIGINALLY INCORPORATED IN THE NAME OF JANAK FORGINGS P LIMITED ON 11-07-19 89. THE NAME OF COMPANY THEN CHANGED TO JANAK TURBO DYNAMIC S LIMITED. THE SAID NAME FINALLY CHANGED TO M/S HIMGI RI DYNAMICS LIMITED ON 04-02-2002.THAT AT THE TIME OF INVESTMEN T IN THE SHARE APPLICATION/ SHARE CAPITAL ADDRESS OF THE CORPORATE OFFICE WAS GIVEN THAT OF MUMBAI. HOWEVER, REGISTERED OFFICE OF THIS COMPANY IS SITUATED AT INDORE ITSELF. PRESENT ADDRESS OF TH E SAID COMPANY IS AS UNDER:- M/S HIMGIRI DYNAMICS LIMITED CL-101, SUKHLIA PANDIT DINDAYAL UPADHYAY NAGAR INDORE THAT ENTIRE AMOUNT OF SHARE APPLICATION MONEY RECEI VED BY THE ASSESSEE DURINGTHE FINANCIAL YEAR 2002-03 I.E. ASST YEAR 200 3-04. COPY OF AUDITED FINAL ACCOUNT OF THAT COMPANY FOR THE ASST YEAR 200 3-04 IS ENCLOSED. ON PERUSAL OF THE SAID BALANCE SHEET YOU WILL FIND THA T ISSUED CAPITAL OF THE (SS) 28 TO 31 OF 2010 ANANT STEEL 12 ASSESSEE COMPANYWAS RS 10,11,65000/- AND INVESTMENT IN THE SHARES OF UNQUOTED EQUITY SHARES AS PER SCHEDULE- 3 WAS OF RS 17635000/- WHICH INCREASED FROM RS 2500000/-.THAT FROM THE BALANCE S HEET ITSELF IT IS PROVED THAT INVESTMENT IN THE SHARE APPLICATION/ CA PITAL IN THE UNQUOTED COMPANIES DULY CONSIDERED IN THE AUDITED FINAL ACCO UNT OF THAT COMPANY. FROM THIS BALANCE SHEET ITSELF, THE AMOUNT OF INVES TMENT MADE BY THAT COMPANY IN THE SHARE APPLICATION/ CAPITAL STAND PRO VED.THE ASSESSEE IS ENCLOSING COPY OF INCORPORATION CERTIFICATE, ANNUAL RETURN AS FILED FOR THE YEAR 2005-06, COPY OF AUDITED FINAL ACCOUNT FOR THE YEAR ENDED ON 31.03.2003 TO 31.03.2005.THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTITY , CAPACITY AND GENUINENESS OF THE SHARE APPLICATION/ SHARE CAPITAL.THAT WHEN THE ASSE SSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL. THE AMOUNT OF SHA RE APPLICATION/ CAPITAL WAS ALSO RECEIVED THROUGH AN ACCOUNT PAYEE CHEQUE. COMPETE DOCUMENTS AS AVAILABLE WITH THE ASSESSEE HAS ALSO B EEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING THE RE QUISITE FEE. IN THAT CASE THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF SHARE APPLICATION/SHARE CAPITAL AS RECEIVED BY THE ASSESS EE. M/S PRIYANS SAREES INDSUTRIES LIMITED THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS 10,00,00 0/- FROM THE ABOVE SAID COMPANY ON ACCOUNT OF SHARE APPLICATION/ CAPITAL TOWARDS ALLOTMENT OF 20000 EQUITY SHARES OF RS 10/- EACH WITH PREMIUM OF RS 40/- ON 16-01-2002.THE ABOVE SAID AMO UNT OF SHARE APPLICATION WERE RECEIVED BY THE ASSESSEE THO UGH AN ACCOUNT PAYEE CHEQUES.CONFIRMATION IN RESPECT OF SH ARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE ON 16 -01-2002 IS ENCLOSED ON PAGE NO 65 OF THE SUBMISSION FILED FOR THE ASST YEAR 2002-03.THAT NAME OF THE COMPANY CHANGED FROM PRIYA NS SAREES INDUSTRIES LIMITED TO M/S OPTIMATES TEXTILE INDUSTR IES LIMITED W.E.F 09-12-2002.COPY OF ORDER DATED 31-10-2001 PAS SED BY THE COMPANY LAW BOARD IS ENCLOSED IN RESPECT OF TRANSFE R OF OFFICE (SS) 28 TO 31 OF 2010 ANANT STEEL 13 FROM THE STATE OF MADHYA PRADESH TO STATE OF MAHARA SHTRA IS ENCLOSED.COPY OF CERTIFICATE OF INCORPORATION AS IS SUED BY THE DY REGISTRAR OF COMPANIES, MAHARASHTRA , MUMBAI IN CON SEQUENCE TO THE ORDER OF THE HONBLE COMPANY LAW BOARD IS ENCLO SED.THAT OFFICER OF M/S PRIYANS SAREE INDUSTRIES LIMITED ( N OW M/S OPTIMATES TEXTILE INDUSTRIES LIMITED ) HAS BEEN SHI FTED FROM 102, THANEWALA TARACE, 163 R.N.T MARG, INDORE TO 713, R AHEJA CENTRE, NARIMAN POINT, MUMBAI ( MAHARASHTRA) . COPY OF ARTI CLE OF ASSOCIATION AND MEMORANDUM OF ASSOCIATION ARE ENCLO SED.COPY OF BALANCE SHEET OF M/S PRIYANS SAREE INDUSTRIES LIMIT ED FOR THE YEAR ENDED ON 31.03.2002 IS ENCLOSED. ON PERUSAL OF THE SAID BALANCE SHEET YOU WILL FIND THAT THE SAID COMPANY H AS ISSUED CAPITAL OF RS 52998000/- AND AN AMOUNT OF RS 363080 00/- SHOWN AS INVESTED IN THE SHARE APPLICATION MONEY OF RS 36 308000/- .COPY OF BALANCE SHEET OF THE SAID COMPANY AS ON 31 .03.2007 IS ALSO ENCLOSED.THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTITY , CAPACITY AND GENUINEN ESS OF THE SHARE APPLICATION/ SHARE CAPITAL.THAT WHEN THE ASSE SSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL. THE AMOUNT OF SHARE APPLICATION/ CAPITAL WAS ALSO RECEIVED THROUGH AN A CCOUNT PAYEE CHEQUE. COMPETE DOCUMENTS AS AVAILABLE WITH THE ASS ESSEE HAS ALSO BEEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING THE REQUISITE FEE. IN THAT CASE THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF SHARE APPLICATION/ SHARE CAPITAL AS R ECEIVED BY THE ASSESSEE.THAT FROM THE ABOVE DOCUMENTS EXISTENCE OF THE ABOVE COMPANY STAND PROVED. HENCE, THE AMOUNT OF SHARE AP PLICATION MONEY/ SHARE CAPITAL AS RECEIVED BY THE ASSESSEE BE TREATED AS GENUINE. M/S DELTA FASHION LIMITED THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS 20,00,00 0/- FROM M/S DELTA FASHION LIMITED, MUMBAI TOWARDS SHARE APPLICA TION MONEY (SS) 28 TO 31 OF 2010 ANANT STEEL 14 FOR ALLOTMENT OF 40000 EQUITY SHARES OF RS 10/- EAC H WITH A PREMIUM OF RS 40/-.DETAILS OF SHARE APPLICATION MON EY AS RECEIVED BY THE ASSESSEE OF RS 20, 00,000/- IS AS UNDER:- DATE CHEQUE NO BANK AMOUNT( RS) 15-02-2003 898280 STATE BANK OF HYDERABAD 10,00,000/- 20-02-2003 898394 & 95 STATE BANK OF HYDERABAD 10,00,000/- COPY OF COVERING LETTER, SHARE APPLICATION FORM AN D COPY OF BOARD RESOLUTION ENCLOSED ON PAGE NOS 37 TO 40 OF OUR PRE VIOUS SUBMISSION. SHARE APPLICATION FORMS WERE SIGNED BY DIRECTOR ONE SHRI VIVEK MUNDADA.COPY OF PA NO DETAIL, TAN NO , C ERTIFICATE OF INCORPORATION AS ISSUED BY THE REGISTRAR OF COMPANI ES, FORM NO 18 REGARDING CHANGE OF ADDRESS, FORM NO 32 IN RESP ECT OF CHANGE OF DIRECTOR, ARTICLE OF ASSOCIATION AND MEMORANDUM OF ASSOCIATION ARE ENCLOSED. HENCE, EXISTENCE OF THE SAID COMPANY IS BEYOND DOUBT.THAT DURING THE COURSE OF ASSESSMENT PROCEEDI NG YOU HAVE SHOWN A LETTER WRITTEN BY THE DIRECTOR OF THE COMPA NY TO THE ECONOMIC OFFENCE WING REGARDING BANK ACCOUNT NO 520201010014013 OPENED WITH UNION BANK OF INDIA, K AILASH PARK, MANORAMAGANJ, INDORE AND ASKED OUR COMMENTS O N THE SAME. PARA-WISECOMMENTS ON THE SAID LETTER IS AS UN DER:- A] THE ASSESSEE RECEIVED SHARE APPLICATION MONEY IN THE YEAR 2003 AND NOT IN THE YEAR 2007 IN WHICH THE SAID COM PLAINT WAS FILED BY THE DIRECTOR OF THE COMPANY. B] THE ASSESSEE COMPANY RECEIVED HAS RECEIVED CHEQU ES OF SHARE APPLICATION MONEY OF STATE BANK OF HYDERABAD AND NOT OF UNION BANK OF INDIA. HENCE, FROM THIS LETTER THERE IS NO EFFECT IN THE GENUINENESS OF THE SHARE APPLICATION MONEY. (SS) 28 TO 31 OF 2010 ANANT STEEL 15 C] THAT FROM THIS LETTER EXISTENCE OF THE COMPANY A UTOMATICALLY GOT PROVED. D] THE LETTER AS ADDRESSED TO THE ECONOMIC OFFENCE WING WRITTEN BY SHRI VIVEK MUNBADA ONE OF THE DIRECTOR OF THE COMPA NY. HERE, PLEASE BE NOTED THAT SHARE APPLICATION FORM IN RESP ECT OF SHARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE DULY SIGNED BY SHRI VIVEK MUNDADA HIMSELF. HENCE, THERE IS NO DOUBT ABO UT THE GENUINENESS OF THE SHARE APPLICATION MONEY. E] COPY OF SHARE APPLICATION FORM AS SIGNED BY SHRI VIVEK MUNDADA AND COPY OF BOARD RESOLUTION DULY AUTHORIZING TO SH RI VIVEK R MUNDADA ARE ENCLOSED ON PAGE NOS 37 TO 40 OF OUR EA RLIER SUBMISSION. F] THAT FROM THE ABOVE, THE ASSESSEE HAS PROPERLY D ISCHARGED ONUS LYING ON HIS AND ALSO PROVED THE GENUINENESS OF THE SHARE APPLICATION MONEY AS RECEIVED BY HIM.THE ASSESSEE H AS PROPERLY DISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTIT Y , CAPACITY AND GENUINENESS OF THE SHARE APPLICATION/ SHARE CAP ITAL.THAT WHEN THE ASSESSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONE Y/ SHARE CAPITAL. THE AMOUNT OF SHARE APPLICATION/ CAPITAL W AS ALSO RECEIVED THROUGH AN ACCOUNT PAYEE CHEQUE. COMPETE D OCUMENTS AS AVAILABLE WITH THE ASSESSEE HAS ALSO BEEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING THE REQUISITE F EE. IN THAT CASE THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF S HARE APPLICATION/ SHARE CAPITAL AS RECEIVED BY THE ASSES SEE.THAT FROM THE ABOVE DOCUMENTS AND DETAIL OF PA NO AND TAN NO AND LETTER AS WRITTEN BY ONE OF THE DIRECTOR TO THE ECOMONIC OFFE NCE WING, EXISTENCE OF THE ABOVE COMPANY STAND PROVED. HENCE, THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL AS RECEIV ED BY THE ASSESSEE BE TREATED AS GENUINE. M/S CUBE COMMUNICATION (P) LIMITED (SS) 28 TO 31 OF 2010 ANANT STEEL 16 THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS 25,00,00 0/- FROM THE ABOVE COMPANY AS A SHARE APPLICATION MONEY IN RESPE CT OF 50000 EQUITY SHARES OF RS 10/- EACH WITH PREMIUM OF RS 40 /- EACH.THAT ENTIRE AMOUNT OF SHARE APPLICATION MONEY WERE RECEI VED BY THE ASSESSEE THROUGH AN ACCOUNT PAYEE CHEQUES. DETAILS OF THE SAME ARE AS UNDER:- DATE CHEQUE NO BANK AMOUNT( RS) 01-03-2003 141721 IDBI BANK 1500000 07-03-2003 141729 IDBI BANK 1000000 2500000 COPY OF COVERING LETTER, SHARE APPLICATION FORM AN D COPY OF BOARD RESOLUTION ENCLOSED ON PAGE NOS 70 TO 75 OF OUR EAR LIER SUBMISSION.NAME OF THE APPLICANT COMPANY CHANGED FR OM M/S CUBE COMMUNICATIONS (P) LIMITED TO M/S CUBE COMMUNI CATIONS LIMITED.POSTAL ADDRESS AT THE TIME OF SHARE APPLICA TION RECEIVED BY THE ASSESSEE WAS 39, KALI KRISHNA TAGORE STREET, K OLKATA. HOWEVER, ADDRESS OF THE SAID COMPANY CHANGED TO M/S CUBE COMMUNICATIONS LIMITED 29A, RABINDRA SARANI 3 RD FLOOR, ROOM NO 12 KOLKATA THAT PRESENTLY THE SAID COMPANY HAS ITS BANK ACCOU NT WITH STANDARD CHARTERED BANK 19, N.S.ROAD VIDE ACCOUNT N O 33105122280. ( THE SAID INFORMATION IS COLLECTED FR OM THE ANNUAL RETURN OF THE COMPANY). TAN NO OF THE SAID APPLICAN T IS AS UNDER:- CALC05668F COPY OF ORDER DATED 03-07-2008 OF THE HONBLE HIGH COURT PASSED IN THE CASE OF THE APPLICANT ITSELF PROVED THE EXIS TENCE OF THE COMPANY.COPY OF ALLOTMENT OF TAN NO, CERTICATE OF I NCORPORATION, ANNUAL RETURN AS FILED WITH ROC, ARTICLE OF ASSOCIA TION, (SS) 28 TO 31 OF 2010 ANANT STEEL 17 MEMORANDUM OF ASSOCIATION AND AUDITED FINAL ACCOUNT FOR THE YEAR ENDED ON 31.03.2007 ARE ENCLOSED AS TO PROVE T HE EXISTENCE OF THE COMPANY.THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTITY, CAPACITY AND GENUIN ENESS OF THE SHARE APPLICATION/ SHARE CAPITAL. THAT WHEN THE ASS ESSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL. THE AMOUNT OF SHARE APPLICATION/ CAPITAL WAS ALSO RECEIVED THROUGH AN A CCOUNT PAYEE CHEQUE. COMPETE DOCUMENTS AS AVAILABLE WITH THE ASS ESSEE HAS ALSO BEEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING THE REQUISITE FEE. IN THAT CASE THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF SHARE APPLICATION/ SHARE CAPITAL AS R ECEIVED BY THE ASSESSEE.THAT FROM THE ABOVE DOCUMENTS AND DETAIL O F TAN NO EXISTENCE OF THE ABOVE COMPANY STAND PROVED. HENCE, THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL AS RECEIV ED BY THE ASSESSEE BE TREATED AS GENUINE. M/S LYTON MANAGEMENT SERVICES ( P) LIMITED THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS 30,00,00 0/- FROM THE ABOVE SAID COMPANY ON ACCOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL FOR ALLOTMENT OF 30000 EQUITY SHARES OF RS 10/- EACH WITH PREMIUM OF RS 40/-.THE AMOUNT OF SHARE APPLICA TION MONEY OF RS 30,00,000/- RECEIVED BY THE ASSESSEE THROUGH AN ACCOUNT PAYEE CHEQUES. DETAILS OF THE SAME ARE AS UNDER:- DATE CHEQUE NO BANK AMOUNT( RS) 20-02-2003 141604 IDBI BANK 500000 20-02-2003 141609 IDBI BANK 500000 20-02-2003 141610 IDBI BANK 500000 24-02-2003 141619 IDBI BANK 1000000 24-02-2003 141620 IDBI BANK 500000 3000000 (SS) 28 TO 31 OF 2010 ANANT STEEL 18 COPY OF COVERING LETTERS , SHARE APPLICATION FORMS AND COPY OF BOARD RESOLUTION ARE ENCLOSED ON PAGE NOS 58 TO 69 OF OUR EARLIER SUBMISSION.THAT COPY OF TAN ALLOTMENT LETTER, CERTI FICATE OF INCORPORATION, ANNUAL RETURN AS FILED WITH THE REGI STRAR OF COMPANIES FOR THE YEAR ENDED ON 31.03.2005, ARTICLE OF ASSOCIATION AND MEMORANDUM OF ASSOCIATION ARE ENCLO SED.THAT FROM THE ABOVE DOCUMENTS AS OBTAINED FROM THE SITE OF INCOME TAX AND FROM REGISTRAR OF COMPANIES. EXISTENCE OF THE C OMPANY STAND PROVED. HERE, WE WOULD ALSO LIKE TO CLARIFY THAT TH E ASSESSEE COMPANY HAD RECEIVED SHARE APPLICATION MONEY IN THE YEAR 2002- 03 RELEVANT TO THE ASST YEAR 2003-04 AND SEARCH WAS CONDUCTED ON THE BUSINESS PREMISES OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE ASST YEAR 2007-08. DURING THAT PERI OD GAP ADDRESSES OF THE SHARE APPLICANT MAY BE CHANGED. HO WEVER, EXISTENCE OF THESE COMPANIES ARE BEYOND DOUBT.COPY OF CONFIRMATION AS OBTAINED BY THE ASSESSEE RECENTLY I S ENCLOSED WITH OUR EARLIER SUBMISSION.TAN NO OF THE SHARE APPLICAN T IS AS UNDER:- CALL00590C THE ASSESSEE HAS PROPERLY DISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTITY , CAPACITY AND GENUINENESS OF THE SHARE APPLICATION/ SHARE CAPITAL.THAT WHEN THE ASSESSEE H AD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL. THE AMOUNT OF SHARE APPLICATION/ CAPITAL WAS ALSO RECEIVED THROUGH AN A CCOUNT PAYEE CHEQUE. COMPETE DOCUMENTS AS AVAILABLE WITH THE ASS ESSEE HAS ALSO BEEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING THE REQUISITE FEE. IN THAT CASE THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF SHARE APPLICATION/ SHARE CAPITAL AS R ECEIVED BY THE ASSESSEE.THAT FROM THE ABOVE DOCUMENTS AND DETAIL O F TAN NO EXISTENCE OF THE ABOVE COMPANY STAND PROVED. HENCE, THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL AS RECEIV ED BY THE ASSESSEE BE TREATED AS GENUINE. (SS) 28 TO 31 OF 2010 ANANT STEEL 19 M/S FREE WINGS EXPORTS LIMITED THE ASSESSEE COMPANY HAD RECEIVED AN AMOUNT OF RS 1500000/- FROM THE SAID COMPANY.THE AMOUNT OF SHARE APPLICATI ON MONEY/ CAPITAL OF RS 1500000/- RECEIVED FOR ALLOTMENT OF 3 0000 EQUITY SHARES OF RS 10/- EACH WITH SHARE PREMIUM OF RS 40/ - EACH.DETAIL OF SHARE APPLICATION MONEY OF RS 15,00,000/- AS REC EIVED BY THE ASSESSEE ARE AS UNDER:- DATE CHEQUE NO BANK AMOUNT( RS) 08-02-2003 141566 IDBI BANK 1000000 08-02-2003 141567 IDBI BANK 500000 1500000 LETTER OF CONFIRMATION, SHARE APPLICATION FORM AND COPY OF BOARD RESOLUTION ARE ENCLOSED ON PAGE NOS 41 TO 44 OF OUR EARLIER SUBMISSION.PA NO OF THE SAID APPLICANT IS AS UNDER: - AAACF4480A COPY OF ALLOTMENT OF PA NO, CERTIFICATE OF INCORPO RATION, COPY OF ANNUAL RETURN AS FILED FOR THE YEAR ENDED ON 31-03- 2005 AND 31- 03-2007 AND COPY OF BALANCE SHEET FOR THE YEAR ENDE D ON 31.03.2007 ARE ENCLOSED. FROM THESE DOCUMENTS EXIST ENCE OF THE ASSESSEE COMPANY STAND PROVED. COPY OF CONFIRMATION LETTER AS RECEIVED BY THE ASSESSEE HAS ALSO BEEN FILED WITH O UR EARLIER SUBMISSION.THE ASSESSEE HAS PROPERLY DISCHARGED ONU S LYING ON HIM BY PROVING THE IDENTITY , CAPACITY AND GENUINEN ESS OF THE SHARE APPLICATION/ SHARE CAPITAL.THAT WHEN THE ASSE SSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL. THE AMOUNT OF SHARE APPLICATION/ CAPITAL WAS ALSO RECEIVED THROUGH AN A CCOUNT PAYEE CHEQUE. COMPETE DOCUMENTS AS AVAILABLE WITH THE ASS ESSEE HAS ALSO BEEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING (SS) 28 TO 31 OF 2010 ANANT STEEL 20 THE REQUISITE FEE. IN THAT CASE THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF SHARE APPLICATION/ SHARE CAPITAL AS R ECEIVED BY THE ASSESSEE.THAT FROM THE ABOVE DOCUMENTS AND DETAIL O F PA NO EXISTENCE OF THE ABOVE COMPANY STAND PROVED. HENCE, THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL AS RECEIV ED BY THE ASSESSEE BE TREATED AS GENUINE. M/S HINDUSTAN CONTINENTALS LIMITED THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS 20,00,00 0/- ON ACCOUNT OF SHARE APPLICATION / SHARE CAPITAL.THE SH ARE APPLICATION MONEY OF RS 20,00,000/- WERE RECEIVED BY THE ASSESS EE THOUGH AN ACCOUNT PAYEE CHEQUES IN RESPECT OF 40000 EQUITY SH ARES OF FACE VALUE OF RS 10/- WITH SHARE PREMIUM OF RS 40/- EACH . CONFIRMATION LETTER DULY SIGNED WITH SHARE APPLICAT ION FORM AND COPY OF BOARD RESOLUTION ARE ENCLOSED ON PAGE NOS 5 1-55 OF OUR EARLIER SUBMISSIONS.TAN NO OF THE SAID COMPANY IS A S UNDER:- BPLH00250F THE SAID APPLICANT COMPANY ORIGINALLY REGISTERED I N THE NAME OF HINDUSTAN SOYA LIMITED AND NAME OF THE SAID COMPANY CHANGED TO M/S HINDUSTAN CONTINENTALS LIMITED W. E. F 29-1 1-1994.COPY OF FOLLOWING DOCUMENTS ENCLOSED AS TO JUSTIFY THE E XISTENCE OF THE SAID COMPANY. A] TAN NO ALLOTMENT LETTER B] CERTIFICATE OF INCORPORATION WITH CERTIFICATE OF CHANGE OF NAME C] CERTIFICATE AS ISSUED BY THE REGISTRAR OF COMPAN IES REGARDING ALTERATION OF OBJECT OF THE COMPANY. D] COPY OF RESOLUTION PASSED FOR CHANGE OF ADDRESS OF THE COMPANY FROM JABALPUR TO MUMBAI. E] COPY OF AUDITED FINAL ACCOUNT FOR THE YEAR ENDED ON 31.03.2007 (SS) 28 TO 31 OF 2010 ANANT STEEL 21 F] COPY OF MEMORANDUM OF ASSOCIATION THAT ON PERUSAL OF THE BALANCE SHEET, YOU WILL FIN D THAT THE ISSUED AND SUBSCRIBED CAPITAL OF THE SAID COMPANY WAS OF RS 9,00,49,135/- AND AN AMOUNT OF RS 35714530/- WAS IN VESTED IN THE SHARE & SECURITIES OF DIFFERENT COMPANIES ( REF ER SCHEDULE- 5). HENCE, INVESTMENT BY THE SAID COMPANY IN THE SHARE APPLICATION/ SHARE CAPITAL STAND PROVED.PRESENTLY THE SAID COMPA NY IS ASSESSED BY THE ITO 1(1), INDORE.THE ASSESSEE HAS PROPERLY D ISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTITY , CAPACITY AND GENUINENESS OF THE SHARE APPLICATION/ SHARE CAPITAL.THAT WHEN THE ASSESSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL. THE AMOUNT OF SHARE APPLICATION/ CAPITAL WAS ALSO RECEIVED THROUGH AN A CCOUNT PAYEE CHEQUE. COMPETE DOCUMENTS AS AVAILABLE WITH THE ASS ESSEE HAS ALSO BEEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING THE REQUISITE FEE. IN THAT CASE THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF SHARE APPLICATION/ SHARE CAPITAL AS R ECEIVED BY THE ASSESSEE.THAT FROM THE ABOVE DOCUMENTS AND DETAIL O F TAN NO EXISTENCE OF THE ABOVE COMPANY STAND PROVED. HENCE, THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL AS RECEIV ED BY THE ASSESSEE BE TREATED AS GENUINE. MCSURE CAPITAL MARKET LIMITED THE ASSESSEE COMPANY HAD RECEIVED AN AMOUNT OF RS 500000/- ON ACCOUNT OF SHARE APPLICATION/ SHARE CAPITAL.THE SHA RE APPLICATION AND SHARE CAPITAL WAS RECEIVED BY THE ASSESSEE THRO UGH AN ACCOUNT PAYEE CHEQUE IN RESPECT OF 10000 EQUITY SHA RES OF RS 10/- WITH SHARE PREMIUM OF RS 40/-. COPY OF SHARE A PPLICATION FORM AND BOARD RESOLUTION ENCLOSED ON PAGE NO 56 & 57 OF OUR EARLIER SUBMISSION.NAME OF THE ASSESSEE COMPANY HAS BEEN CHANGED FROM M/S MCSURE CAPITAL MARKET LIMITED TO M /S SAMYAK (SS) 28 TO 31 OF 2010 ANANT STEEL 22 INTERNATIONAL LIMITED W.E.F 01-04-2005. THAT ON PER USAL OF THE BALANCE SHEET FOR THE YEAR ENDED ON 31.03.2004 AND PERUSAL OF THE PREVIOUS YEAR FIGURE. YOU WILL FIND THAT TOTAL ISSUED CAPITAL WAS OF RS 30322000/- AND INVESTMENT IN SHARES AS SHOWN BY THE ASSESSEE IN SCHEDULE- E WAS OF RS 11072000/-.PA NO AND TAN NO OF THE ABOVE COMPANY ARE AS UNDER:- PA NO:- AABCM3526F TAN NO BPLM01586E COPY OF CERTIFICATE OF INCORPORATION, CERTIFICATE OF INCORPORATION IN RESPECT OF CHANGE OF NAME OF THE COMPANY, FORM O 32 IN RESPECT OF CHANGE OF DIRECTORS, COPY OF AUDITED FINAL ACCOUNTS FOR THE YEAR ENDED ON 31.03.2004 & 31.03.2007, ARTICLE OF ASSOCI ATION AND MEMORANDUM OF ASSOCIATION ARE ENCLOSED AS TO JUSTIF Y THE IDENTITY AND EXISTENCE OF THE COMPANY.THE ASSESSEE HAS PROPE RLY DISCHARGED ONUS LYING ON HIM BY PROVING THE IDENTIT Y , CAPACITY AND GENUINENESS OF THE SHARE APPLICATION/ SHARE CAP ITAL.THAT WHEN THE ASSESSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONE Y/ SHARE CAPITAL. THE AMOUNT OF SHARE APPLICATION/ CAPITAL W AS ALSO RECEIVED THROUGH AN ACCOUNT PAYEE CHEQUE. COMPETE D OCUMENTS AS AVAILABLE WITH THE ASSESSEE HAS ALSO BEEN FILED AND AS OBTAINED BY IT WITH THE ROC AFTER DEPOSITING THE REQUISITE F EE. IN THAT CASE THERE IS NO REASON TO DISBELIEVE ON THE AMOUNT OF S HARE APPLICATION/ SHARE CAPITAL AS RECEIVED BY THE ASSES SEE.THAT FROM THE ABOVE DOCUMENTS AND DETAIL OF PA NO & TAN NO EX ISTENCE OF THE ABOVE COMPANY STAND PROVED. HENCE, THE AMOUNT O F SHARE APPLICATION MONEY/ SHARE CAPITAL AS RECEIVED BY THE ASSESSEE BE TREATED AS GENUINE. M/S SHREEVAR OVERSEAS LIMITED (SS) 28 TO 31 OF 2010 ANANT STEEL 23 THE ASSESSEE COMPANY HAD RECEIVED AN AMOUNT OF RS 2500000/- ON ACCOUNT OF SHARE APPLICATION/ SHARE CAPITAL TOWA RDS ALLOTMENT OF 50000 EQUITY SHARES OF RS 10/- EACH WITH SHARE P REMIUM OF RS 40/-.THE SHARE APPLICATION AND SHARE CAPITAL WAS RE CEIVED BY THE ASSESSEE THROUGH AN ACCOUNT PAYEE CHEQUE. COPY OF S HARE APPLICATION FORM, COVERING LETTER, AND COPY OF BOAR D RESOLUTION AS PASSED FOR INVESTMENT IN THE SHARE APPLICATION/ SHA RE CAPITAL OF THE ASSESSEE COMPANY ARE ENCLOSED ON PAGE NOS 79 TO 83 OF OUR EARLIER SUBMISSION. COPY OF LATEST CONFIRMATION AS RECEIVED BY THE ASSESSEE DULY SIGNED HAS ALSO BEEN FILED WITH OUR E ARLIER SUBMISSION.THE ASSESSEE HAS PROPERLY DISCHARGED ONU S LYING ON HIM BY PROVING THE IDENTITY , CAPACITY AND GENUINEN ESS OF THE SHARE APPLICATION/ SHARE CAPITAL.THAT WHEN THE ASSE SSEE HAD FILED COMPLETE DETAILS AS TO PROVE THE GENUINENESS OF THE AMOUNT OF SHARE APPLICATION MONEY/ SHARE CAPITAL. THE AMOUNT OF SHARE APPLICATION/ CAPITAL WAS ALSO RECEIVED THROUGH AN A CCOUNT PAYEE CHEQUE. COMPETE DOCUMENTS AS AVAILABLE WITH THE ASS ESSEE HAS ALSO BEEN FILED .THAT FROM THE ABOVE DOCUMENTS AND CONFIRMATION LETTER EXISTENCE OF THE ABOVE COMPANY STAND PROVED. HENCE, THE AMOUNT OF SHARE APPLICATION MONEY / SHARE CAPITAL A S RECEIVED BY THE ASSESSEE BE TREATED AS GENUINE. THE ASSESSEES CONTENTION IS NOT ACCEPTABLE. DECISI ONS QUOTED AND RELIED BY THE ASSESSEE IN ITS SUBMISSIONS ARE DISTI NGUISHABLE ON THE FACTS WHICH ARE NOT IDENTICAL WITH THE FACTS OF THE PRESE NT CASE. IT IS NOT A SIMPLE CASE OF TAXING OF SHARE APPLICATION MONEY U/ S 68 OF THE I.T ACT, AS THE ASSESSEE HAS TRIED TO PROJECT . IT IS A CASE OF UNACCOUNTED INCOME BROUGHT BACK INTO THE BOOKS OF ACCOUNTS OF THE ASSE SSEE COMPANY IN A SYSTEMATIC & ORGANIZED MANNER WHICH CAN BE EVIDENCE D FROM THE PATTERN OF CASH DEPOSITS IN THE BANK ACCOUNTS OF THE COMPAN IES DISCUSSED ABOVE IN DETAILS FROM WHOM SHARE APPLICATION MONEY WERE R ECEIVED BY THE ASSESSEE. THESE COMPANIES HAVE BEEN USED AS MERE CO NDUIT COMPANIES FOR ROUTING OF UNACCOUNTED MONEY INTO THE BUSINESS IN THE GARB OF SHARE (SS) 28 TO 31 OF 2010 ANANT STEEL 24 APPLICATION MONEY. AS PER REPORTS RECEIVED FROM ADD DIT ((INV) MUMBAI , DDIT (INV) SURAT AND ADD DIT (INV) KOLKATA, IN RESP ECT OF THESE COMPANIES (WHICH HAVE GIVEN SHARE APPLICATION MONEY ) JUST AFTER SEARCH PROCEEDINGS , IT WAS OBSERVED THAT MOST OF THE COMP ANIES WERE NOT IN EXISTENCE. SOME OF THE COMPANIES NOT HAVING ANY WOR TH AND WERE PROVIDING ONLY ACCOMMODATION ENTRIES. HENCE, THE SO URCE OF SHARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE COMPA NY CAN NOT BE TREATED AS PROPERLY EXPLAINED. REGARDING HINDUSTAN CONTINENTAL LTD IN THE CASE OF SHRI SANJAY AGRAWAL IN A.Y 2005-06 & IN THE CASE OF SMT MEENA KUMARI AGRAWAL FOR A.Y 2004-05, IT WAS FOUND THAT THE COMPANY WAS GIVING ACCOMMODATION ENTRIES. FURTHER, DURING SEARCH IT WAS ALSO FOUND THAT THE S HARES SHOWN TO HAVE BEEN PURCHASED BY THE ABOVE MENTIONED COMPANIES HAV E BEEN SHOWN TO BE PURCHASED BACK BY THE FAMILY MEMBERS OF THE GROU P ON SINGLE DATE I.E 25.08.2005. HENCE, THE SOURCE OF SHARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE COMPANY CANNOT BE TREATED AS PROPERLY EXPLAINED. SINCE ONUS IS ON THE ASSESSEE TO PROVE THE IDENTITY , CAPACITY TO PAY AND GENUINENESS OF TRANSACTIONS IN WHICH ASSESSEE HAS B EEN FAILED, THE SHARE APPLICATION MONEY AMOUNTING TO RS 25,00,000/- AND S HARE CAPITAL AMOUNTING TO RS 1,65,00,000/- RECEIVED FROM ABOVE C OMPANIES IS TREATED UNEXPLAINED CREDIT U/S 68 OF THE I.T ACT. RELIANCE IS PLACED ON THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT IN TH E CASE OF COMMISSIONER OF INCOME TAX VS. RATHI FINLEASE LTD R EPORTED IN (2008) 215 CTR (MP) 249 AND DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. NIVIDEN VANI JYA NIYOJAN LTD REPORTED IN (2003) 182 CTR (CAL)605. AS DISCUSSED ABOVE, SHARE CAPITAL OF RS 1,65,00,000 /- [ RUPEES ONE CRORE SIXTY FIVE LACS ONLY ) AND SHARE APPLICATION MONEY OF RS 25,00,000/- (SS) 28 TO 31 OF 2010 ANANT STEEL 25 AS RECEIVED BY THE ASSESSEE IN THE YEAR UNDER CONSI DERATION ADDED TO THE INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT . 3. FIRST, WE SHALL TAKE UP THE GROUND ON MERIT WITH REGARD TO THE ADDITION OF SHARE APPLICATION MONEY/SHARE CAPITAL. 4 MATTER CARRIED TO LD. CIT(A) AND LD. CIT(A) HAS D ISMISSED THE APPEALS OF THE ASSESSEE. 5. THE LD. AR HAS FILED THE WRITTEN SUBMISSION WHIC H READS AS UNDER: 2.1] THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT[A] DT 15-01-2010 FOR THE ASST YEARS 2001-02, 02-03, 03-04 AND 2005-06. 2.2] THAT IN THE CASE OF THE ABOVE ASSESSEE SEARCH U/S 132 OF THE INCOME TAX ACT WAS EXECUTED ON 21-11-2006 AND IN CONSEQUENCE OF SEARCH ACTION, NOTICE U/S 153A OF THE INCOME TAX ACT WAS ISSUED ON 08-10-2007 FOR THE ASS T YEAR 2001-02 TO 2006-07 AND YEAR OF SEARCH WAS FOR THE ASST YEAR 2007-08. 2.3] YEAR WISE DETAIL OF SHARE APPLICATION MONEY AS RECEIVED BY THE ASSESSEE AND ADDED TO THE INCOME OF THE ASSESSEE IS AS UNDER:- 2.3.1] ASSESSMENT YEAR 2001-02 S.N O NAME OF COMPANY PAN NO AMOUNT STATUS 1. AUTHENTIC INVESTMENT & FINANCE LIMITED AAACA7079C 1000000 SHARE ALLOTTED 2. INDO CAPITAL MARKET LIMITED AAACI3899L 5,00,000 AMOUNT REFUNDED ON 05-03-2002 VIDE CH NO 631437 (SS) 28 TO 31 OF 2010 ANANT STEEL 26 2.3.2] ASSESSMENT YEAR 2002-03 S.N O NAME OF COMPANY PAN NO SHARES AMOUNT STATUS 1. PRIYANS SAREE P LIMITED AAACP188 2C 20000 10,00,000 SHARE ALLOTTED 2. INDO CAPITAL MARKET LIMITED AAACI3899 L 5,00,000 AMOUNT REFUNDED ON 05- 03-2002 2.3.3] ASSESSMENT YEAR 2003-04 S.NO NAME OF COMPANY PAN NO SHARES AMOUNT STATUS 1. DELTA FASHION LTD. AAACD5697H 400000 2000000 SHARE ALLOTTED 2. FREC WINGS IMPORT LIMITED AAACF4480A 300000 1500000 SHARE ALLOTTED 3. HIMGIRI DYNAMICS LTD. AABCJ0296M 600000 3000000 SHARE ALLOTTED 4. HINDUSTAN CONTINENTAL LTD. AABCH1575M 400000 2000000 SHARE ALLOTTED 5. MCSURE CAPITAL LTD[ NOW KNOWN AS SAMYAK INTERNATIONAL LTD] AABCM3526F 100000 500000 SHARE ALLOTTED 6. LYTON MGMT. SERVICES LTD L-84 600000 3000000 SHARE ALLOTTED 7. CUBE COMMUNICATION LTD. AABCC0767E 500000 2500000 SHARE ALLOTTED 8. SHRESHTH LEASING & FINANCE LTD. AADCS3850Q 400000 2000000 SHARE ALLOTTED (SS) 28 TO 31 OF 2010 ANANT STEEL 27 9. SHREEVAR OVERSEAS LTD S-1948 500000 2500000 SHARE ALLOTTED 2.3.4] ASSESSMENT YEAR 2004-05 S.NO NAME OF COMPANY PAN NO SHARES AMOUNT STATUS 1 CUBE COMMUNICATION PRIVATE LIMITED AABCC0767E 20000 1000000 SHARE ALLOTTED 2.4] THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING AND ALSO BEFORE THE APPELLATE AUTHORITY FILED THE FOLLOWING DOCUMENTS:- S.NO PARTICULARS 1 CONFIRMATION OF AMOUNT OF SHARE APPLICATION 2 TAN NO AS THE SHARE APPLICANT 3 CERTIFICATE OF INCORPORATION 4 CERTIFICATE FOR COMMENCEMENT OF BUSINESS 5 ARTICLE OF ASSOCIATION 6 MEMORANDUM OF ASSOCIATION 7 COPY OF AUDITED FINAL ACCOUNT 8 COPY OF FORM NO 18 FILED WITH ROC FOR CHANGE OF A DDRESS OF THE COMPANY 9 COPY OF SECRETARIAL COMPLIANCE CERTIFICATE 10 COPY OF ANNUAL RETURN 11 SHARE APPLICATION MONEY FORM 12 COPY OF BOARD RESOLUTION REGARDING INVESTMENT IN THE SHARE APPLICATION MONEY OF THE ASSESSEE 2.5.1] THE ASSESSING OFFICER WHILE ADDING THE AMOUN T OF SHARE APPLICATION TO THE INCOME OF THE APPELLANT ON THE BASIS OF REPORT OF THE INVE STIGATION WING OF MUMBAI, SURAT AND KOLKATA. HE ALSO REFERRED THE DECISION OF SHRI SANJ AY AGRAWAL AND SMT MEENA AGRAWAL IN THE CASE OF HINDUSTAN CONTINENTALS LIMITED. HOWE VER, THESE REPORTS WERE NOT (SS) 28 TO 31 OF 2010 ANANT STEEL 28 PROVIDED TO THE ASSESSEE. IN CASE OF SHRI SANJAY AG RAWAL AND SMT MEENA AGRAWAL, THE ASSESSING OFFICER MAKING DETAILED INQUIRY IN RESPEC T OF LONG TERM CAPITAL GAIN SHOWN BY BOTH THESE PERSONS IN THEIR INCOME TAX FILE BUT IN THE PRESENT CASE, THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY AND COMPLETE DETAI LS WITH DOCUMENTS WERE FILED BEFORE THE AO AND BEFORE THE APPELLATE AUTHORITY. 2.5.2] IT IS WORTH NOTING THAT THE ASSESSING OFFICE R HIMSELF WHILE PASSING THE ASSESSMENT ORDER HAS NOT MAKE ANY INDEPENDENT INQUIRY BUT HE S IMPLY REFERRED THE INQUIRY CONDUCTED BY THE INVESTIGATION WING. THE INFORMATIO N AS COLLECTED BY THE INVESTIGATION WING WAS ALSO NOT MADE AVAILABLE TO THE ASSESSEE FO R ITS COMMENTS. THE SAID APPROACHED OF THE ASSESSING OFFICER IS NOT IN CONSO NANCE WITH THE SETTLED POSITION OF LAW. HENCE, NO NEGATIVE INFERENCE CAN BE DRAWN AGAI NST THE ASSESSEE. 2.5.3] THE ASSESSING OFFICER DURING THE COURSE OF A SSESSMENT PROCEEDING SIMPLY ASKED ABOUT THE INQUIRY MADE BY INVESTIGATION WING OF SUR AT AND MUMBAI BUT DETAIL OF THE SAME WAS NOT PROVIDED. THE ASSESSING OFFICER ASKED SPECIFIC QUERY ONLY IN RESPECT OF INVESTMENT MADE BY M/S SHRESTH LEASING & FINANCE LI MITED AND ALSO IN RESPECT OF COMPLAINT FILED BY THE DIRECTOR OF M/S DELTA FASHIO N LIMITED WITH THE ECONOMIC OFFENCE WING. 2.5.4.1] THE ASSESSEE DURING THE COURSE OF ASSESSME NT PROCEEDING AND ALSO IN THE APPELLATE PROCEEDING IT WAS CATEGORICALLY EXPLAINED THAT SHRI SUNEET KABRA, DIRECTOR OF M/S SHRESTH LEASING & FINANCE LIMITED, PERSONALLY A PPEARED BEFORE THE ITO ( INV) MUMBAI AND HIS STATEMENT WAS RECORDED WHEREIN HE HA S ACCEPTED THAT INVESTMENT IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY WAS MADE. THE SAID EXPLANATION OF THE ASSESSEE WAS REPRODUCED BY THE ASSESSING OFFICER IN HIS ORDER AND THE ASSESSING OFFICER ALSO FAILED TO COUNTER THE CLAIM OF THE ASSESSEE. 2.5.4.2] THE ASSESSING OFFICER WHILE PASSING THE AS SESSMENT ORDER SHOWN A LETTER AS WRITTEN BY THE DIRECTOR OF M/S DELTA FASHION LIMITE D IN THE YEAR 2007 REGARDING TRANSACTION IN THE NAME OF THEIR COMPANY FROM THE BANK ACCOUNT OF UNION BANK OF INDIA. THE SAID COMPLAINT WAS FILED IN RESPECT OF ANOTHER COMPANY M/S DELTA WINGS LIMITED AND NOT IN RESPECT OF M/S DELTA FASHION LIMITED, FR OM WHOM SHARE APPLICATION MONEY (SS) 28 TO 31 OF 2010 ANANT STEEL 29 WAS ACTUALLY RECEIVED BY THE ASSESSEE COMPANY. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING PROPERLY REPLIED AND EXPLAINE D THAT THE AMOUNT OF SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSEE IN T HE YEAR 2003-04 AND NOT IN THE YEAR 2007-08 TO WHICH COMPLAINT WAS FILED AND THE A MOUNT OF SHARE APPLICATION MONEY WAS RECEIVED FROM THE BANK ACCOUNT OF THE SHARE APP LICANT COMPANY WITH STATE BANK OF HYDERABAD AND NOT FROM UNION BANK OF INDIA. THE REP LY AS FILED BY THE ASSESSEE WAS REPRODUCED IN THE ASSESSMENT ORDER AND NOT COUNTERS BY THE ASSESSING OFFICER. 2.6] THE ASSESSING OFFICER MADE AN ALLEGATION THAT CASH WAS DEPOSITED PRIOR TO ISSUANCE OF THE CHEQUES TO THE ASSESSEE COMPANY BUT FACTUALL Y THE SAID ALLEGATION WAS ALSO NOT CORRECT. THE SAME CAN ALSO BE VERIFIABLE FROM THE B ANK ACCOUNT OF THE SHARE APPLICANTS AS FILED BY THE ASSESSEE IN COMPILATION. 2.7.1] THE ASSESSING OFFICER ALSO GROSSLY ERRED IN ADDING THE AMOUNT OF SHARE APPLICATION MONEY ON THE BASIS OF INQUIRY DONE BY THE INVESTIGA TION WING WITHOUT CONFRONTING THE SAME TO THE ASSESSEE. THAT ANY INFORMATION AND INQU IRY MADE IN THE CASE OF THE ASSESSEE AND THE SAME WAS NOT CONFRONTED WITH THE A SSESSEE CANNOT BE RELIED AGAINST THE ASSESSEE. 2.7.2] HONBLE APEX COURT IN THE CASE OF UNION OF INDIA VS. T.R. VERMA REPORTED IN AIR 1957 (SC) 882 HAS HELD :- WHEN THE ASSESSING OFFICER RECORDED A STATEMENT BE HIND THE BACK OF THE ASSESSEE, IT WAS HIS DUTY TO HAVE ALLOWED THE ASSESSEE TO CROSS EXAMINES SUCH A WITNESS. STATEMENT OF PERSON CANNOT BE USED AGAINST THE ASSE SSEE; IT WAS NOT FOR THE ASSESSEE TO DEMAND CROSS EXAMINATION BUT WAS FOR THE AO TO A LLOW CROSS EXAMINATION IF THE STATEMENT OF THE WITNESS WERE TO BE MADE THE BASIS OF ADDITION. 2.7.3] THAT IN THE FOLLOWING DECISIONS ALSO IT WAS CATEGORICALLY HELD THAT INFORMATION COLLECTED BEHIND AND BACK OF THE ASSESSEE CANNOT BE USED AGAINST THE ASSESSEE UNTIL AND UNLESS THE SAME WAS DULY CONFRONTED WITH THE AS SESSEE. FOR THIS PREPOSITION THE ASSESSEE FURTHER RELIED ON THE FOLLOWING DIRECT DEC ISIONS:- S.NO REFERENCE OF DECISION CITATION 1 KISHANCHAND CHELLARAM VS CIT 125 ITR 713 [SC] (SS) 28 TO 31 OF 2010 ANANT STEEL 30 2 SARASWATI INDUSTRIAL SYNDICATE LTD VS CIT 237 ITR 001 [ SC] 3 KALRA GLUE FACTORY VS SALES TAX TRIBUNAL 167 ITR 498 [SC] 4 PRAKASH CHAND MEHTA VS CIT 220 ITR 277, 279[MP] 2.8] THAT WHEN THE ASSESSEE WITH THE AMPLE DOCUMEN TS PROVED THE IDENTITY OF THE SHARE HOLDERS AND ALSO PROVED THE GENUINENESS AND C REDITWORTHINESS OF THE SHARE APPLICANTS AND THE ASSESSING OFFICER UTTERLY FAILED TO DISPROVE THE DOCUMENTS FILED BY THE ASSESSEE. HENCE, THERE WAS NO JUSTIFICATION FOR THE ASSESSING OFFICER FOR ADDING THE AMOUNT OF SHARE APPLICATION MONEY TO THE INCOME OF THE ASSESSEE. 2.9.1] THE LD CIT(A) WHILE MAINTAINING THE ADDITIO N, HEAVILY RELIED ON THE BUY BACK OF THE SHARES BY THE DIRECTORS AND HIS OTHER FAMILY ME MBERS ON SINGLE DATE I.E ON 25-08- 2005. 2.9.2] THE PURCHASE OF SHARES BY THE DIRECTORS AND HIS OTHER FAMILY MEMBERS AND THAT TOO IN THE PREVIOUS YEAR RELEVANT TO THE ASST YEAR 2006-07. HERE, IT IS TO BE NOTED THAT THE ASSESSEE COMPANY HAD NOT PURCHASED ANY SHARES. THAT PURCHASE OF THE SHARES BY THE DIFFERENT FAMILY MEMBERS AGAIN PROVED THE IDENT ITY OF THE SHARE HOLDERS. HENCE, IN ANY CASE, ADDITION TO THE INCOME OF THE ASSESSEE WA S NOT JUSTIFIED. IF THE LD CIT(A) WAS OF THE OPINION THAT SHARES WERE PURCHASED AT VERY L OW PRICE IN THAT CASE, NECESSARY ADDITION IS TO BE MADE IN THE HAND OF THE DIRECTORS AND OTHER FAMILY MEMBERS U/S 56 OF THE ACT BUT NOT IN THE CASE OF THE APPELLANT COMPAN Y. 2.10.1] THAT HONBLE MUMBAI BENCH OF ITAT IN THE CA SE OF ACIT VS KRISHNA SHEET PROCESSORS P LIMITED [ APPEAL NO ITA NO 546/ MUM/ 2013 DT 30-06-2015 FOR THE ASST YEAR 2009-10 ] HAS DEAL WITH THE SIMILAR ISSUE . 2.10.2] THAT HONBLE INDORE BENCH OF ITAT IN THE CA SE OF M/S AGRAWAL COAL CORPORATION, AS DISCUSSED BY THE AO, HAS CATEGORICA LLY HELD THAT IF THE IDENTITIES OF THE SHARE HOLDERS STAND PROVED. IN THAT CASE, NO ADDIT ION IS TO BE MADE TO THE INCOME OF THE ASSESSEE. 2.10.3] THAT HONBLE APEX COURT IN THE CASE OF LOV ELY EXPORTS P LIMITED AS REPORTED IN 11 ITJ 35 HAS HELD THAT:- (SS) 28 TO 31 OF 2010 ANANT STEEL 31 '2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UN DISCLOSED INCOME UNDER S. 68 OF IT ACT, 1961? WE FIND NO MERIT IN THIS SPECIAL LEAV E PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSE SSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN A CCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT.' THAT LOVELY EXPORTS P LIMITED BYNAME REPRESENT IS A PRIVATE LIMITED COMPANY AND NOT A PUBLIC LIMITED COMPANY. HENCE, IN CASE OF SHARE APP LICATION MONEY THE ASSESSEE NEED TO PROVE ONLY IDENTITY OF THE SHAREHOLDERS. 2.10.4]THAT HONBLE JURISDICITONAL HIGH COURT IN TH E CASE OF CIT VS PEOPLE GENERAL HOSPITAL LTD [ APPEAL NO M.A.I.T NO 27/ 200 8 DT 27-06-2013]. 17. AS THE APEX COURT HAS CONSIDERED THE LAW IN LOV ELY EXPORTS (SUPRA) AND IN VIEW OF LAW LAID DOWN BY THE APEX COURT, WE FIND THAT THE S UBSTANTIAL QUESTIONS FRAMED IN THESE APPEALS DO NOT ARISE FOR OUR CONSIDERATION. ACCORDI NGLY, ALL THESE APPEALS ARE DISMISSED WITH NO ORDER AS TO COSTS. 2.10.5] THE HONBLE ITAT INDORE BENCH IN THE CASE O F STL EXTRUSION (P) LIMITED VIDE ORDER DATED 10.05.2010 BEING ITA NO.(S S) 259, 260 /IND/2008.. 2.10.7] THAT HONBLE ITAT, INDORE BENCH IN THE CASE OF M/S RAJSHREE FINSEC P LTD [APPEAL NO 545/ IND/2010 DT 06-02-2012 FOR THE ASST YEAR 2007-08 ] HAD AN OCCASIONED TO DISCUSSED THE DECISION IN THE CASE OF M/S AGRAWAL COAL CORPORATION. 2.10.8] THAT HONBLE ITAT, INDORE BENCH, INDORE VI DE ITS ORDER DT 28-03-2012 IN THE CASE OF M/S MITTAL APPLIANCES LIMITED FOR TH E ASST YEAR 2004-05 AFTER CONSIDERING THE DECISIONS AS REFERRED IN PARA 1.12. 1 OF THIS LETTER, ACCEPTED THE AMOUNT OF SHARE APPLICATION MONEY AS RECEIVED B Y THE ASSESSEE AS GENUINE... 2.10.9] THAT HONBLE JODHPUR BENCH OF ITAT IN THE C ASE OF ACIT VS M/S (SS) 28 TO 31 OF 2010 ANANT STEEL 32 SUPERTECH DIAMOND TOOLS P LTD [ APPEAL NO ITA NO 21 1/ JODH/ 2009 DT 19-01-2012 FOR THE ASST YEAR 2004-05 ].. 2.10.10] THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. OASIS HOSPITALITIES (P) LTD REPORTED IN 333 ITR 119 (2011 ) . 2.10.11]THAT HONBLE ITAT DELHI BENCH IN THE CASE O F M/S EXCELLANCE TOWN PLANNER P LIMITED [ APPEAL NO ITA NO 871/DEL/ 2010 DT 25-05-2012 FOR THE ASST YEAR 2003-04] HAS DISCUSSED THE ORDER AS PASSED IN THE C ASE OF NOVA PROMOTERS & FINLEASE P LIMITED .. 2.10.12] THAT HONBLE DELHI HIGH COURT VIDE ORDER D T 21-01-2013 IN THE CASE OF GANGESHWARI METAL PVT LTD [ APPEAL NO ITA NO 597/20 12] HAS DISCUSSED THE SIMILAR ISSUE IN DETAIL AND AFTER CONSIDERING THE D ECISION IN THE CASE OF NOVA PROMOTERS P LIMITED 2.10.13] HONBLE DELHI BENCH OF ITAT IN THE CASE OF ITO VS NEELKANTH FINBUILD LIMITED [ APPEAL NO ITA NO 2821/ DEL/ 2009 DT 01-04 -2015] FOR THE ASST YEAR 2006-07.. 2.10.14] THAT HONBLE MUMBAI BENCH OF ITAT IN THE C ASE OF VEEDHATA TOWER P LIMITED [ ITA NO 7070/ MUM/ 2014 ] DT 21-01-2015 . COUNTER ON THE SUBMISSION OF THE LD CIT DR 2.11] THE LD CIT DR DURING THE COURSE OF HEARING BE FORE THE HONBLE BENCH ARGUED THAT HUGE SHARE PREMIUM OF RS 40/- PER SHARE WAS RECEIVE D BY THE ASSESSEE. THE LD CIT DR ALSO REFERRED THE BLANK TRANSFER DEED OF THE SHA RE APPLICANT. THE LD CIT DR AND SR DR PLACED RELIANCE ON THE FOLLOWING DECISIONS:- S.N REFERENCE OF DECISION CITATION OF THE DECISION (SS) 28 TO 31 OF 2010 ANANT STEEL 33 O 1 CIT VS KORLAY TRADINGN CO LTD 232 ITR 820 [ CALCU TTA] 2 N TARIKA PROPERTY INVEST (P) LTD 51 TAXMANN.COM 387 [SC] 3 CIT VS N R PORTFOLIO (P) LTD 42 TAXMANN.COM 339 [ DELHI] 4 GAYATHRI ASSOCIATES 41 TAXMANN.COM 526 [ AP 5 CIT VS FOCUS EXPORTS (P) LTD 51 TAXMANN.COM 46 [ DELHI] 6 CIT VS P MOHANKALA 291 ITR 278 [SC] 7 CIT VS MAF ACADEMY (P) LTD 42 TAXMANN.COM 377 [D ELHI] 8 SUBHLAKSHMI VANIJYA (P) LTD 60 TAXMANN.COM 60 [ KOLKATA] 9 AGRAWAL COAL CORPORATION (P) LTD 19 TAXMANN.COM 209 [ INDORE] 10 CIT VS NOVA PROMOTERS & FINLEASE [P] LTD 342 ITR 169 [DELHI] CONCLUSIONS :- 2.15.1] THE ASSESSEE NEED TO PROVE ONLY IDENTITY IN CASE OF SHARE APPLICATION MONEY / SHARE CAPITAL S.NO REFERENCE CITATION 1 LOVELY EXPORTS P LIMITED 216 CTR 195 [SC] 2 CIT VS PEOPLE GENERAL HOSPITAL LTD 356 ITR 65 [ MP] 3 CIT VS SHREE RAMA MULTI TECH LTD 34 TAXMANN.COM 177 [GUJ] 4 STL EXTRUSIONS (P) LTD IT(SS)A NO 259, 260/ IND/ 2008 DT 10-05-2010 2.15.2] IDENTITY OF THE SHARE APPLICANT IS PROVED O N PROVIDING THE PA NO AND THE AMOUNT OF SHARE APPLICATION MONEY WAS RECEIVED THRO UGH AN ACCOUNT PAYEE CHEQUE AS HELD IN THE FOLLOWING DECISIONS:- S.NO REFERENCE CITATION 1 CIT VS. ROCK FORT METAL & MINERAL 198 TAXMANN 497 (DEL) (SS) 28 TO 31 OF 2010 ANANT STEEL 34 2 CIT VS. WINSTRAL PETROCHEMICALS (P) LTD 330 ITR 603 (DEL) 3 CIT V. OASIS HOSPITALITIES (P) LTD. 333 ITR 119 ( DEL) 4 CIT VS. GANGOUR INVESTMENT LTD 335 ITR 359 (DEL) 5 CIT VS. TULIP FINANCE LTD 015 DTR 185 (DEL) 2.15.3]THAT WHEN THE ASSESSING OFFICER FAILED TO P ROVED THAT FUNDS NOT HAVING EMANATED FROM THE ASSESSEE COMPANY, THERE WAS NO WARRANT FOR MAKING ADDITION OF THE SAID AMOUNT AS UNDISCLOSED INCOME O F THE ASSESSEE S.NO REFERENCE CITATION 1 ACIT VS GEERA FINANCE LTD TAX APPEAL NO 67 OF 20 01 DT 10- 11-2014 2 VALUE CAPITAL SERVICES P LTD 221 CTR 511 [ DELHI ] 3 CIT VS VICTORY SPINNING MILLS LTD T.C.(A) NOS 30 9 TO 311 OF 2014 DT 22-08-2014 4 DCIT VS RANK SHIPPING AGENCY P LTD [ APPEAL NO ITA NO 5946 / MUM/ 2008 DT 21-11-12 ] 2.15.4] THAT IT IS SETTLED POSITION OF LAW IN ABSEN CE OF ANY INQUIRY BY THE ASSESSING OFFICER NO ADDITION IS TO BE MADE TO THE INCOME OF THE ASSESSEE. FOR THIS PREPOSITION THE ASSESSEE RELIED ON THE FOLLOWING DECISIONS. THAT I N THE PRESENT CASE ALSO THE ASSESSING OFFICER FAILED TO MAKE ANY INDEPENDENT INQUIRY. HEN CE, NO ADDITION IS TO BE JUSTIFIED ON ACCOUNT OF SHARE APPLICATION MONEY. S.NO REFERENCE CITATION 1 CIT VS. GANGESHWARI METAL PVT. LTD 361 ITR 010 [ DELHI ] 2 M/S EXCELLANCE TOWN PLANNER P LIMITED 32 CCH 432 [ DELHI] 3 CIT VS EXPO GLOBE INDIA LIMITED 361 ITR 147 [ DEL HI ] 4 CIT VS FAIR FINVEST LTD 357 ITR 146 [ DELHI ] 5 M/S GABS FABRICS (P) LTD ITA NO 3473/ DEL/ 2013 2.15] THAT IN THE PRESENT APPEAL, THE ASSESSEE COMP ANY HAS PROPERLY DISCHARGED ITS ONUS AS LYING U/S 68 OF THE INCOME TAX ACT. THE ASS ESSING OFFICER UTTERLY FAILED TO MAKE INDEPENDENT INQUIRY. HENCE, FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF GANGESHWARI METAL P LIMITED [ SUPRA], A DDITION MADE TO THE INCOME OF THE (SS) 28 TO 31 OF 2010 ANANT STEEL 35 ASSESSEE ON ACCOUNT OF SHARE APPLICATION MONEY IS N OT JUSTIFIABLE. HONBLE BENCH IS THEREFORE REQUESTED TO DELETE THE SAME AND OBLIGE. 6. ON THE OTHER HAND, LD. DR SUBMITTED THAT THERE W AS SEARCH U/S 132 OF THE ACT AND DURING THE SEARCH PROCEEDING, THE ASSES SEE HAS RECEIVED MONEY FROM VARIOUS COMPANIES AS SHARE APPLICATION M ONEY AS PER ASSESSMENT ORDERS. THE LD. DR SUBMITTED THAT AS PER THE DECISION OF MP HIGH COURT IN THE CASE OF CIT VS. RATHI FINLEASE LT D. 215 CTR 429 (MP) WHEREIN CONSIDERING THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. STELLER INVESTMENT AND THE JUDGMENT OF HON' BLE SUPREME COURT IN THE CASE OF LOVELY EXPORT LTD., 11 ITJ 357, HONBLE HIGH COURT HAS HELD THAT EACH AND EVERY TRANSACTION OF SHARE APPLICATIO N MONEY INVOLVING APPLICATION OF PROVISIONS OF SEC. 68 IN MATTER OF C ONTRIBUTION OF SHARE APPLICATION/SHARE CAPITAL AND WHETHER THIS ONUS ON THE ASSESSEE HAS BEEN DISCHARGED OR NOT HAS TO BE APPRECIATED ON TOTALITY OF EVIDENCES AVAILABLE ON RECORD AND SURROUNDING FACTS AND CIRCUMSTANCES O F THE CASE. LD. DR ALSO RELIED ON FOLLOWING DECISIONS: S.NO REFERENCE OF DECISION CITATION OF THE DECISIO N 1 CIT VS KORLAY TRADINGN CO LTD 232 ITR 820 [ CALCU TTA] 2 N TARIKA PROPERTY INVEST (P) LTD 51 TAXMANN.COM 387 [SC] 3 CIT VS N R PORTFOLIO (P) LTD 42 TAXMANN.COM 339 [ DELHI] 4 GAYATHRI ASSOCIATES 41 TAXMANN.COM 526 [ AP (SS) 28 TO 31 OF 2010 ANANT STEEL 36 5 CIT VS FOCUS EXPORTS (P) LTD 51 TAXMANN.COM 46 [ DELHI] 6 CIT VS P MOHANKALA 291 ITR 278 [SC] 7 CIT VS MAF ACADEMY (P) LTD 42 TAXMANN.COM 377 [D ELHI] 8 SUBHLAKSHMI VANIJYA (P) LTD 60 TAXMANN.COM 60 [ KOLKATA] 9 AGRAWAL COAL CORPORATION (P) LTD 19 TAXMANN.COM 209 [ INDORE] 10 CIT VS NOVA PROMOTERS & FINLEASE [P] LTD 342 ITR 169 [DELHI] 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT A SSESSING OFFICER WHILE ADDING THE AMOUNT OF SHARE APPLICATION TO THE INCOM E OF THE APPELLANT ON THE BASIS OF REPORT OF THE INVESTIGATION WING OF MU MBAI, SURAT AND KOLKATA. HE ALSO REFERRED THE DECISION OF SHRI SANJAY AGRAWA L AND SMT MEENA AGRAWAL IN THE CASE OF HINDUSTAN CONTINENTALS LIMIT ED. HOWEVER, THESE REPORTS WERE NOT PROVIDED TO THE ASSESSEE. IN CASE OF SHRI SANJAY AGRAWAL AND SMT MEENA AGRAWAL, THE ASSESSING OFFICER MAKING DETAILED INQUIRY IN RESPECT OF LONG TERM CAPITAL GAIN SHOWN BY BOTH THE SE PERSONS IN THEIR INCOME TAX FILE BUT IN THE PRESENT CASE, THE ASSESS EE HAS RECEIVED SHARE APPLICATION MONEY AND COMPLETE DETAILS WITH DOCUMEN TS WERE FILED BEFORE THE AO AND BEFORE THE APPELLATE AUTHORITY.IT IS WOR TH NOTING THAT THE ASSESSING OFFICER HIMSELF WHILE PASSING THE ASSESSM ENT ORDER HAS NOT MAKE ANY INDEPENDENT INQUIRY BUT HE SIMPLY REFERRED THE INQUIRY CONDUCTED BY THE (SS) 28 TO 31 OF 2010 ANANT STEEL 37 INVESTIGATION WING. THE INFORMATION AS COLLECTED BY THE INVESTIGATION WING WAS ALSO NOT MADE AVAILABLE TO THE ASSESSEE FOR ITS COMMENTS. THE SAID APPROACH OF THE ASSESSING OFFICER IS NOT IN CONSONA NCE WITH THE SETTLED POSITION OF LAW. AS PER THE DECISION OF HON'BLE SUP REME COURT IN THE CASE OF KISHANCHAND CHELLARAM VS. CIT, 125 ITR 713 (SC), NO ADVERSE INFERENCE CAN BE DRAWN UNLESS THE OTHER PARTIES ARE ALLOWED CROSS- EXAMINATION, WHO HAVE ADMITTED THAT THEY ARE BANAMI LENDERS IN THE CASE OF SANJAY AGRAWAL AND SMT. MEENA AGRAWAL. HENCE, NO NEGATIVE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE.THE ASSESSING OFF ICER DURING THE COURSE OF ASSESSMENT PROCEEDING SIMPLY ASKED ABOUT THE INQ UIRY MADE BY INVESTIGATION WING OF SURAT AND MUMBAI BUT DETAIL O F THE SAME WAS NOT PROVIDED. THE ASSESSING OFFICER ASKED SPECIFIC QUER Y ONLY IN RESPECT OF INVESTMENT MADE BY M/S SHRESTH LEASING & FINANCE LI MITED AND ALSO IN RESPECT OF COMPLAINT FILED BY THE DIRECTOR OF M/S D ELTA FASHION LIMITED WITH THE ECONOMIC OFFENCE WING. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING AND ALSO IN THE APPELLATE PROCEEDING IT WAS CATEGORICALLY EXPLAINED THAT SHRI SUNEET KABRA, DIRECTOR OF M/S S HRESTH LEASING &FINANCE LIMITED, PERSONALLY APPEARED BEFORE THE IT O ( INV) MUMBAI AND HIS STATEMENT WAS RECORDED WHEREIN HE HAS ACCEPTED THAT INVESTMENT IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY WAS MADE. THE SAID EXPLANATION OF (SS) 28 TO 31 OF 2010 ANANT STEEL 38 THE ASSESSEE WAS REPRODUCED BY THE ASSESSING OFFICE R IN HIS ORDER AND THE ASSESSING OFFICER ALSO FAILED TO COUNTER THE CLAIM OF THE ASSESSEE.THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R SHOWN A LETTER AS WRITTEN BY THE DIRECTOR OF M/S DELTA FASHION LIMITE D IN THE YEAR 2007 REGARDING TRANSACTION IN THE NAME OF THEIR COMPANY FROM THE BANK ACCOUNT OF UNION BANK OF INDIA. THE SAID COMPLAINT WAS FILE D IN RESPECT OF ANOTHER COMPANY M/S DELTA WINGS LIMITED AND NOT IN RESPECT OF M/S DELTA FASHION LIMITED, FROM WHOM SHARE APPLICATION MONEY WAS ACTU ALLY RECEIVED BY THE ASSESSEE COMPANY. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING PROPERLY REPLIED AND EXPLAINED THAT THE AMOUNT OF SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSEE IN T HE YEAR 2003-04 AND NOT IN THE YEAR 2007-08 TO WHICH COMPLAINT WAS FILE D AND THE AMOUNT OF SHARE APPLICATION MONEY WAS RECEIVED FROM THE BANK ACCOUNT OF THE SHARE APPLICANT COMPANY WITH STATE BANK OF HYDERABAD AND NOT FROM UNION BANK OF INDIA. THE REPLY AS FILED BY THE ASSESSEE WAS RE PRODUCED IN THE ASSESSMENT ORDER AND NOT COUNTERS BY THE ASSESSING OFFICER.THE ASSESSING OFFICER MADE AN ALLEGATION THAT CASH WAS DEPOSITED PRIOR TO ISSUANCE OF THE CHEQUES TO THE ASSESSEE COMPANY BUT FACTUALLY THE S AID ALLEGATION WAS ALSO NOT CORRECT. THE SAME CAN ALSO BE VERIFIABLE F ROM THE BANK ACCOUNT OF THE SHARE APPLICANTS AS FILED BY THE ASSESSEE IN CO MPILATION.THE ASSESSING (SS) 28 TO 31 OF 2010 ANANT STEEL 39 OFFICER ALSO GROSSLY ERRED IN ADDING THE AMOUNT OF SHARE APPLICATION MONEY ON THE BASIS OF INQUIRY DONE BY THE INVESTIGATION W ING WITHOUT CONFRONTING THE SAME TO THE ASSESSEE. ANY INFORMATION AND INQUI RY MADE IN THE CASE OF THE ASSESSEE AND THE SAME WAS NOT CONFRONTED WITH T HE ASSESSEE CANNOT BE RELIED AGAINST THE ASSESSEE. WHEN THE ASSESSEE W ITH THE AMPLE DOCUMENTS PROVED THE IDENTITY OF THE SHAREHOLDERS A ND ALSO PROVED THE GENUINENESS AND CREDITWORTHINESS OF THE SHARE APPLI CANTS AND THE ASSESSING OFFICER UTTERLY FAILED TO DISPROVE THE DO CUMENTS FILED BY THE ASSESSEE. HENCE, THERE WAS NO JUSTIFICATION FOR THE ASSESSING OFFICER FOR ADDING THE AMOUNT OF SHARE APPLICATION MONEY TO THE INCOME OF THE ASSESSEE.THE LD CIT(A) WHILE MAINTAINING THE ADDITI ON, HEAVILY RELIED ON THE BUYBACK OF THE SHARES BY THE DIRECTORS AND HIS OTHER FAMILY MEMBERS ON SINGLE DATE I.E ON 25-08-2005. THE PURCHASE OF SHAR ES BY THE DIRECTORS AND HIS OTHER FAMILY MEMBERS AND THAT TOO IN THE PREVIO US YEAR RELEVANT TO THE AY 2006-07. HERE, IT IS TO BE NOTED THAT THE ASSESS EE COMPANY HAD NOT PURCHASED ANY SHARES. THAT PURCHASE OF THE SHARES B Y THE DIFFERENT FAMILY MEMBERS AGAIN PROVED THE IDENTITY OF THE SHAREHOLDE RS. HENCE, IN ANY CASE, ADDITION TO THE INCOME OF THE ASSESSEE WAS NO T JUSTIFIED. IF THE LD. CIT(A) WAS OF THE OPINION THAT SHARES WERE PURCHASE D AT VERY LOW PRICE IN THAT CASE, NECESSARY ADDITION IS TO BE MADE IN THE HAND OF THE DIRECTORS AND (SS) 28 TO 31 OF 2010 ANANT STEEL 40 OTHER FAMILY MEMBERS UNDER THE I.T. ACT BUT NOT IN THE CASE OF THE APPELLANT COMPANY.IN THE PRESENT APPEAL, SINCE THE ASSESSEE H AS DISCHARGED ITS ONUS BY PROVING THE IDENTITY OF SUBSCRIBERS AND EVE N OTHERWISE HAD ANY SUSPICION STILL REMAINED IN HIS MIND, NOTHING PREVE NTED HIM TO INITIATE ACTION AS PER THE PROVISIONS OF THE ACT. THE EXISTENCE OF SUBSCRIBER TO SHARE APPLICATION IS NOT IN DOUBT AS THE ASSESSEE DULY FU RNISHED THEIR NAMES, AGE, ADDRESS, DATE OF FILING THE APPLICATION, NUMBER OF SHARES FOR WHICH RESPECTIVE APPLICATIONS WERE MADE, AMOUNT GIVEN AND THE SOURCE OF INCOME OF THE APPLICANT. IN VIEW OF THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO JUSTIFICATION FOR MAKING THE IMPUG NED ADDITION BECAUSE ONCE THE EXISTENCE OF THE INVESTOR/SHARE SUBSCRIBERS IS PROVED, ONUS SHIFTS ON THE REVENUE TO ESTABLISH THAT EITHER THE SHARE APPLICAN TS ARE BOGUS OR THE IMPUGNED MONEY BELONGS TO THE ASSESSEE COMPANY ITSE LF. ONCE THE CONFIRMATION LETTERS ARE FILED, NO ADDITION CAN BE MADE ON ACCOUNT OF SHARE APPLICATION IN THE HANDS OF THE COMPANY. 8. WE ALSO GET SUPPORT FROM THE DECISION OF ITAT, INDORE BENCH IN THE CASE OF STL EXTRUSION (P) LIMITED VIDE ORDER DATED 10.05.2010 BEING ITA NO.(SS) 259, 260/IND/2008 AFTER CONSIDERING THE JUD GEMENT OF HONBLE MP HIGH COURT IN THE CASE OF RATHI FINLEASE LTD. REPOR TED IN 215 CTR 429 (MP) HELD AS UNDER:- (SS) 28 TO 31 OF 2010 ANANT STEEL 41 PAGE 7 IN THE PRESENT APPEAL, SINCE THE ASSESSEE HAS DISCHARGED ITS ONUS BY PROVING THE IDENTITY OF SUBSCRIBERS AND EVE N OTHERWISE HAD ANY SUSPICION STILL REMAINED IN HIS MIND, NOTHING P REVENTED HIM TO INITIATE ACTION AS PER THE PROVISIONS OF THE ACT. T HE EXISTENCE OF SUBSCRIBER TO SHARE APPLICATION IS NOT IN DOUBT AS THE ASSESSEE DULY FURNISHED THEIR NAMES, AGE, ADDRESS, DATE OF FILING THE APPLICATION, NUMBER OF SHARES FOR WHICH RESPECTIVE APPLICATIONS WERE MADE, AMOUNT GIVEN AND THE SOURCE OF INCOME OF THE APPLIC ANT. IN VIEW OF THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO JUSTIFICATION FOR MAKING THE IMPUGNED ADDITION BECA USE ONCE THE EXISTENCE OF THE INVESTOR/SHARE SUBSCRIBERS IS PROV ED, ONUS SHIFTS ON THE REVENUE TO ESTABLISH THAT EITHER THE SHARE APPL ICANTS ARE BOGUS OR THE IMPUGNED MONEY BELONGS TO THE ASSESSEE COMPANY ITSELF. ONCE THE CONFIRMATION LETTERS ARE FILED, NO ADDITION CAN BE MADE ON ACCOUNT OF SHARE APPLICATION IN THE HANDS OF THE COMPANY. O UR VIEW FINDS SUPPORT FROM THE DECISION IN SHRI BARKHA SYNTHETICS LTD. V/S ACIT 155 TAXMAN 289 (RAJ). THE CASES LIKE CIT V/S GP INTERNA TIONAL LTD.229 CTR (P&H) 86, CIT V STELLER INVESTMENT LIMITED 192 ITR 287 AND SOPHIA FINANCE LIMITED 205 ITR 98 (DEL) SUPPORT THE CASE OF THE ASSESSEE. THE ABOVE ORDER OF ITAT INDORE BENCH HAS ALSO BEEN CONFIRMED BY THE HONBLE M.P. HIGH COURT IN THE CASE OF CIT V/S STL EXTRUSION (P) LTD REPORTED IN 53 DTR 97(2011) AFTER REFERRING ITS EARLIER ORDER IN THE CASE OF CIT V/S RATHI FINLEASE LTD. REPORTED IN 215 CTR 429 HAS DECIDED IN FAVOUR OF THE ASSESSEE WHEREIN HONBLE J URISDICTIONAL HIGH (SS) 28 TO 31 OF 2010 ANANT STEEL 42 COURT ALSO RELIED ON THE DECISION OF THE HONBLE AP EX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED. HONBLE JURISDICITONAL HIGH COURT IN THE CASE OF CI T VS PEOPLE GENERAL HOSPITAL LTD [ APPEAL NO M.A.I.T NO 27/ 200 8 DT 27-06-2013] HAS HELD THAT [ REFER PARA 16] :- 16. THE AFORESAID JUDGMENT HAS BEEN FOLLOWED BY A LL THE COURTS AND THE JUDGMENTS RELIED ON BY THE APPELLANTS RELATES T O THE PERIOD PRIOR TO THE JUDGMENT IN LOVELY EXPORTS. AS THE APEX COURT H AS SPECIFICALLY HELD THAT IF THE IDENTITY OF THE PERSON PROVIDING S HARE APPLICATION MONEY IS ESTABLISHED THEN THE BURDEN WAS NOT ON THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE SAID PERSON. HOWE VER, THE DEPARTMENT CAN PROCEED AGAINST THE SAID COMPANY IN ACCORDANCE WITH LAW. THE POSITION OF THE PRESENT CASE IS IDENT ICAL. IT IS NOT THE CASE OF ANY OF THE PARTIES THAT M/S ALLIANCE INDUST RIES LIMITED, SHARJAH IS A BOGUS COMPANY OR A NON-EXISTENT COMPAN Y AND THE AMOUNT WHICH WAS SUBSCRIBED BY THE SAID COMPANY BY WAY OF SHARE SUBSCRIPTION WAS IN FACT THE MONEY OF THE RESPONDEN T ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF INVESTOR WHO HAD PROVIDED THE SHARE SUBSCRIPTION AN D IT WAS ESTABLISHED THAT THE TRANSACTION WAS GENUINE THOUGH AS PER CONTENTION OF THE RESPONDENT THE CREDITWORTHINESS O F THE CREDITOR WAS ALSO ESTABLISHED. IN THE PRESENT CASE, IN THE LIGHT OF THE JUDGMENT OF LOVELY EXPORTS (P) LTD., WE HAVE TO SEE ONLY IN RES PECT OF THE ESTABLISHMENT OF THE IDENTITY OF THE INVESTOR. THE DELHI HIGH COURT ALSO IN DIVINE LEASING & FINANCE LTD. (SUPRA), CONS IDERING THE SIMILAR QUESTION HELD THAT THE ASSESSEE COMPANY HAVING RECE IVED (SS) 28 TO 31 OF 2010 ANANT STEEL 43 SUBSCRIPTIONS TO THE PUBLIC/RIGHTS ISSUE THROUGH BA NKING CHANNELS AND FURNISHED COMPLETE DETAILS OF THE SHAREHOLDERS, NO ADDITION COULD BE MADE UNDER SECTION 68 IN THE ABSENCE OF ANY POSITIV E MATERIAL OR EVIDENCE TO INDICATE THAT THE SHAREHOLDERS WERE BEN AMIDARS OR FICTITIOUS PERSONS OR THAT ANY PART OF THE SHARE CA PITAL REPRESENTED COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. THE SIMILAR VIEW HAS BEEN TAKEN BY THE OTHER HIGH COURTS. 17. AS THE APEX COURT HAS CONSIDERED THE LAW IN LOV ELY EXPORTS (SUPRA) AND IN VIEW OF LAW LAID DOWN BY THE APEX CO URT, WE FIND THAT THE SUBSTANTIAL QUESTIONS FRAMED IN THESE APPEALS D O NOT ARISE FOR OUR CONSIDERATION. ACCORDINGLY, ALL THESE APPEALS ARE D ISMISSED WITH NO ORDER AS TO COSTS. HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS P LIMITED AS REPORTED IN 11 ITJ 357 HAS HELD THAT:- '2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UN DISCLOSED INCOME UNDER S. 68 OF IT ACT, 1961? WE FIND NO MERI T IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SH ARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLE GED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT.' ITAT, INDORE BENCH IN THE CASE OF M/S RAJSHREE FINS EC P LTD [APPEAL NO 545/ IND/2010 DT 06-02-2012 FOR THE ASST YEAR 20 07-08 ] HAD AN OCCASIONED TO DISCUSSED THE DECISION IN THE CASE OF M/S AGRAWAL COAL CORPORATION AND HELD THAT :- (SS) 28 TO 31 OF 2010 ANANT STEEL 44 5. DURING HEARING THE LEARNED SENIOR DR CONTENDED THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S AGRAWAL COAL CORPORATION DECIDED BY THIS BENCH ON 31ST OCTOBER, 2011 IN ITA NOS. 151/IND/2009,283,136AND34/IND/2010,190/IND/09,158/I ND/2010 ETC. WE ARE NOT AGREEING WITH THIS PROPOSITION BECA USE IN THAT CASE THE IDENTITY OF SUCH SHARE APPLICANTS WAS NOT PROVED AND EVEN THE ADDRESSES OF SUCH SHARE APPLICANTS WERE FO UND NON- EXISTENT/BOGUS. IN VIEW OF THOSE FACTS, THIS BENCH CONCLUDED THAT THE DECISION FROM HON'BLE APEX COURT PRONOUNCE D IN LOVELY EXPORTS PRIVATE LIMITED IS NOT APPLICABLE AND THE A DDITION WAS CONFIRMED IN THE HANDS OF THE ASSESSEE. HOWEVER, IN THE PRESENT APPEAL, SINCE THE IDENTITY OF SUCH SHARE SU BSCRIBERS, AS WE HAVE DISCUSSED ABOVE, WAS ESTABLISHED, THEREFORE , NO ADDITION U/S 68 IS WARRANTED IN THE CASE OF THE ASS ESSEE COMPANY. SO FAR AS THE DECISION FROM HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE OF CIT VS. RATHI FINLEASE LIMITED (2008) 215 CTR (MP) 249 IS CONCERNED, IN THAT CASE, DESPITE SE VERAL OPPORTUNITIES, THE ASSESSEE WAS UNABLE TO PROVIDED CONFIRMATIONS FROM THE CONCERNED PARTIES, THEREFORE , THE HON'BLE COURT REACHED TO A PARTICULAR CONCLUSION, WHEREAS I N THE PRESENT APPEALS, THE IDENTITY OF SHARE APPLICANTS, NAMELY, M/S. SHRILAL TRADERS PRIVATE LIMITED, M/S LAKEVIEW VINIM AY PRIVATE LIMITED, M/S SAHARSH SUPPLIERS PRIVATE LIMITED AND M/S AMBITIONS TIE UP PRIVATE LIMITED WAS ESTABLISHED, T HEREFORE, IN (SS) 28 TO 31 OF 2010 ANANT STEEL 45 VIEW OF THE DECISION FROM HON'BLE APEX COURT IN THE CASE OF LOVELY EXPORTS PRIVATE LIMITED (SUPRA), THIS JUDICI AL DECISION FROM HON'BLE HIGH COURT MAY NOT HELP THE REVENUE. 6.SO FAR AS THE ARGUMENT OF THE LEARNED SR. DR AND THE OBJECTIONS / OBSERVATIONS OF THE LEARNED ASSESSING OFFICER/LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) THAT THESE ARE PAPER COMPANIES ONLY, THE CONTENTION RAIS ED ON BEHALF OF THE ASSESSEE IS THAT THE NET WORTH (AS ON 31.3.2007) OF SUCH SHARE SUBSCRIBERS IS RS. 317.31 LACS, RS. 424. 58 LACS, RS. 385.71 LACS AND RS. 289.01 LACS. WE ARE NOT GOING O N THE ISSUE OF WORTH OF THESE SHARE APPLICANTS BECAUSE THE HON' BLE APEX COURT IN THE CASE OF LOVELY EXPORTS PRIVATE LIMITED (SUPRA) HELD THAT EVEN IF SUCH SHARE APPLICANTS ARE BOGUS, BUT T HEIR IDENTITY IS PROVED, THEN NO ADDITION IS WARRANTED IN THE CASE O F THE ASSESSEE. SO FAR AS THE DECISIONS CITED IN THE IMPU GNED ORDER ARE CONCERNED, IN VIEW OF THE DECISION FROM HON'BLE APEX COURT IN THE CASE OF LOVELY EXPORTS (SUPRA), HAS REMAINED FOR ACADEMIC INTEREST ONLY, BEING ON DIFFERENT FACTS, T HEREFORE, WE ARE REFRAINING OURSELVES IN DEALING WITH EACH AND E VERY CASE INDIVIDUALLY, ESPECIALLY IN THE LIGHT OF THE EVIDEN CES, FILED BY THE ASSESSEE, EVIDENCING THAT THE IDENTITY OF SUCH SHAR E APPLICANTS WAS VERY MUCH PROVED BY FURTHER FILING OF CONFIRMAT ION BY THEM. 7. IN VIEW OF THESE FACTS, THE DECISION FROM HON'BL E APEX COURT IN LOVELY EXPORTS (SUPRA) AND UNCONTROVERTED FACT T HAT THE SUMMONS ISSUED TO THE IMPUGNED SHARE APPLICANTS WER E DULY RECEIVED BY THEM WITH FURTHER FILING OF CONFIRMATIO N BY SUCH (SS) 28 TO 31 OF 2010 ANANT STEEL 46 SHARE APPLICANTS, AT LEAST THEIR IDENTITY IS PROVED , THEREFORE, THIS APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. OAS IS HOSPITALITIES (P) LTD REPORTED IN 333 ITR 119 (2011) HAS HELD AS UNDER:- (I) SECTION 68 PROVIDES THAT IF THE ASSESSEE IS NOT ABLE TO GIVE SATISFACTORY EXPLANATION AS TO THE NATURE AND SOURCE OF A SUM FOUND CREDITED IN HIS BOOKS, THE SUM MAY BE TREATED AS THE UNDISCLOSED I NCOME OF THE ASSESSEE. THE INITIAL BURDEN IS ON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE CREDIT AND TO DO SO, THE ASSESSEE IS REQUI RED TO PROVE (A) IDENTITY OF THE SHAREHOLDER (B) GENUINENESS OF TRANSACTION AND (C) CREDIT WORTHINESS OF SHAREHOLDERS ; (A) THE IDENTITY OF THE SHAREHOLDER CAN BE PROVED BY EITHER (IF INDIVIDUAL) PRODUCING HIM BEFORE THE AO OR BY WAY OF DOCUMENTS, REGISTERED ADDRESS, PAN ETC; (B) THE GENUINENESS OF THE TRANSACTION CAN BE SHOW N FROM THE FACT THAT THE MONEY HAS BEEN RECEIVED FROM THE SHAREHOLDER. IF THE MONEY IS RECEIVED BY CHEQUE AND IS TRANSMITTED THROUGH BANKI NG OR OTHER INDISPUTABLE CHANNELS, THE GENUINENESS OF TRANSACTI ON WOULD BE PROVED . OTHER DOCUMENTS SHOWING THE GENUINENESS OF TRANSACT ION COULD BE THE (SS) 28 TO 31 OF 2010 ANANT STEEL 47 COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICAT ION FORMS, SHARE TRANSFER REGISTER, ETC; (C) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER CAN BE PROVED BY PRODUCING THE BANK STATEMENT OF TH E CREDITORS/SUBSCRIBERS SHOWING THAT IT HAD SUFFICIENT BALANCE IN ITS ACCOU NTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE CAPITAL. ONCE THESE DOCUMENT S ARE PRODUCED, THE ASSESSEE WOULD HAVE SATISFACTORILY DISCHARGE THE ON US CAST UPON HIM. THE AO CAN DISCREDIT THE DOCUMENTS PRODUCED BY THE ASSE SSEE WITH COGENT REASONS AND MATERIALS BUT NOT ON THE REALM OF SUSPI CION; (II)IF THE ASSESSEE HAS PRODUCED DOCUMENTS LIKE PAN CARD, BANK ACCOUNT DETAILS OR DETAILS FROM THE BANKERS THE ONUS SHIFTS UPON THE AO AND IT IS FOR HIM TO REACH THE SHAREHOLDERS AND THE AO CANNOT BUR DEN THE ASSESSEE MERELY ON THE GROUND THAT SUMMONS ISSUED TO THE INV ESTORS WERE RETURNED BACK WITH THE ENDORSEMENT NOT TRACEABLE (V) THERE IS AN ADDITIONAL BURDEN ON THE DEPARTMEN T TO SHOW THAT EVEN IF SHARE APPLICANTS DID NOT HAVE THE MEANS TO MAKE INV ESTMENT, THE INVESTMENT MADE BY THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UN DISCLOSED INCOME OF THE ASSESSEE. IN THE ABSENCE OF SUCH FINDING, ADDITION CANNOT BE MADE U/S 68 IN THE HANDS THE ASSESSEE. (SS) 28 TO 31 OF 2010 ANANT STEEL 48 (VI) THE DEPARTMENT IS FREE TO REOPEN THE INDIVIDU AL ASSESSMENT IN CASE OF ALLEGED BOGUS SHAREHOLDERS IN ACCORDANCE WITH LA W AND, THUS, NOT REMEDY-LESS. HONBLE DELHI HIGH COURT VIDE ORDER DT 21-01-2013 I N THE CASE OF GANGESHWARI METAL PVT LTD [ APPEAL NO ITA NO 597/20 12] HAS DISCUSSED THE SIMILAR ISSUE IN DETAIL AND AFTER CON SIDERING THE DECISION IN THE CASE OF NOVA PROMOTERS P LIMITED HAS HELD THAT :- MR. SABHARWAL, APPEARING ON BEHALF OF THE REVENUE/ APPELLANT SOUGHT TO PLACE RELIANCE ON A DIVISION BENCH DECISION OF THIS COURT IN CIT V. NOVA PROMOTERS AND FINLEASE (P) LTD. : (2012) 342 ITR 169 (DEL.). HOWEVER, ON GOING THROUGH THE SAID DECISION IN NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) WE FIND THAT THE FACTS ARE CLEARLY DISTINGUISHABLE. IN FACT, IN NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) ITSELF THIS COURT HAS OBSERVED, IN THE CONTEXT OF LOVELY EXPORTS (P) LTD. (SUPRA) , AS UNDER: - THE RATIO OF A DECISION IS TO BE UNDERSTOOD AND AP PRECIATED IN THE BACKGROUND OF THE FACTS OF THAT CASE. SO UNDERSTOOD , IT WILL BE SEEN THAT WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICA NTS SUCH AS THEIR NAMES AND ADDRESSES, INCOME TAX FILE NUMBERS, THEIR CREDI TWORTHINESS, SHARE APPLICATION FORMS AND SHARE HOLDERS REGISTER, SHARE TRANSFER REGISTER ETC. (SS) 28 TO 31 OF 2010 ANANT STEEL 49 ARE FURNISHED TO THE ASSESSING OFFICER AND THE ASSE SSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATER IAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY UN DER SEC.68 AND THE REMEDY OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE WITH LAW. WE ARE AFRAID THAT WE CANNOT A PPLY THE RATIO TO A CASE, SUCH AS THE PRESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHE S THE PARTICULARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF- CONFESSED ACCOMMODATION ENTRY PROVIDERS, WHOSE BU SINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT THEIR U NACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION, AND THE A SSESSEE. THE RATIO IS INAPPLICABLE TO A CASE, AGAIN SUCH AS THE PRESENT O NE, WHERE THE INVOLVEMENT OF THE ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDICATED BY VALID MATERIAL MADE AVAILABLE TO THE ASSESSING OFFI CER AS A RESULT OF INVESTIGATIONS CARRIED OUT BY THE REVENUE AUTHORITI ES INTO THE ACTIVITIES OF SUCH ENTRY PROVIDERS. THE EXISTENCE WITH THE ASSE SSING OFFICER OF MATERIAL SHOWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE- MEDITATED PLAN - A SMOKESCREEN - CONCEIVED AND EXEC UTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABILITY OF THE (SS) 28 TO 31 OF 2010 ANANT STEEL 50 RATIO. IN OUR UNDERSTANDING, THE RATIO IS ATTRACTED TO A CASE WHERE IT IS A SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHAR GED THE BURDEN PLACED UPON HIM UNDER SEC.68 TO PROVE AND ESTABLISH THE ID ENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GEN UINENESS OF THE TRANSACTION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVI DENCE OR MATERIAL IN HIS POSSESSION AND THEN COME FORWARD TO MERELY REJECT T HE SAME, WITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY INTO THE M ATERIAL PLACED BEFORE HIM. THE CASE BEFORE US DOES NOT FALL UNDER THIS CATEGOR Y AND IT WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY. (EMPHASIS SUPPLIED) AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES OF 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 ASSES SING OFFICER SITS BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MAT ERIAL IN HIS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRESENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER, AFTER NOTING THE FACTS, MERELY R EJECTED THE SAME. THIS WOULD BE APPARENT FROM THE OBSERVATIONS OF THE ASSE SSING OFFICER IN THE ASSESSMENT ORDER TO THE FOLLOWING EFFECT: - (SS) 28 TO 31 OF 2010 ANANT STEEL 51 INVESTIGATION MADE BY THE INVESTIGATION WING OF TH E 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 `1,11,50,000/- MAY NOT BE ADDED TO ITS INCOME. IN R ESPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CREDIT IN THE B OOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS RECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WAS STATED THAT THE ACTUAL AMOUNT RECEIVED WAS `55,50,000/- AND NOT `1,11,50,000/- AS MENTIONED IN THE NOTICE. THE ASSESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTION OF THE ASSESSEE IN RESPECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT `55,50,000/-. THE ASSESSEE HAS FURTHER TRIED TO EXPLAIN THE SOURCE OF THIS AMOUNT OF `55,50,000/- BY FURNISHING COPIES OF SHARE APPLICATION MONEY, BALAN CE SHEET, ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT THE QUEST ION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANA TION OF THE ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REMAINS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS HAS BEE N ARRIVED BY THE INVESTIGATION WING OF THE DEPARTMENT. AS SUCH ENTRI ES OF `55,50,000/- RECEIVED BY THE ASSESSEE ARE TREATED AS AN UNEXPLAI NED CASH CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED TO ITS INCOME. SINC E I AM SATISFIED THAT (SS) 28 TO 31 OF 2010 ANANT STEEL 52 THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F ITS 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 FAVO UR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CL EARLY DISTINGUISHABLE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LIN E WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA) . THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISHED A LL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. IN SUCH AN EVENT UALITY NO ADDITION CAN BE MADE UNDER SECTION 68 OF THE ACT. CONSEQUENTLY, THE QUESTION IS ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBU NAL IS CORRECT IN LAW. THE APPEAL IS DISMISSED. HONBLE DELHI HIGH COURT IN THE CASE OF CIT (CENTRA L)-III VS ANSHIKA CONSULTANTS P LIMITED [ APPEAL NO ITA 467/ 2014 DT 16-04-2015 ] HAS HELD THAT:-______ WHETHER THE ASSESSEE COMPANY CHARGED A HIGHER PREMIUM OR NOT, SHOULD NOT HAVE BEEN THE SUBJECT MATTER OF THE ENQUIRY IN THE FIRST INSTANCE. INSTEAD, THE ISSUE WAS WHETHER THE AMOUNT INVESTED BY THE SHARE APPLICANTS WERE FROM LEGITIMATE SOURCES. THE OBJECT IVE OF SECTION 68 IS TO AVOID INCLUSION OF AMOUNT WHICH ARE SUSPECT. THEREF ORE, THE EMPHASIS ON (SS) 28 TO 31 OF 2010 ANANT STEEL 53 GENUINENESS OF ALL THE THREE ASPECTS, IDENTITY, CRE DITWORTHINESS AND THE TRANSACTION. WHAT IS DISQUIETING IN THE PRESENT CAS E IS WHEN THE ASSESSMENT WAS COMPLETED ON 31.12.2007, THE INVESTI GATION REPORT WHICH WAS SPECIFICALLY CALLED FROM THE CONCERNED DEPARTME NT IN KOLKATA WAS AVAILABLE BUT NOT DISCUSSED BY THE AO. HAD HE CARED TO DO SO, THE IDENTITY OF THE INVESTORS, THE GENUINENESS OF THE TRANSACTIO N AND THE CREDITWORTHINESS OF THE SHARE APPLICANTS WOULD HAVE BEEN APPARENT. EVEN OTHERWISE, THE SHARE APPLICANTS PARTICULARS WERE A VAILABLE WITH THE AO IN THE FORM OF BALANCE SHEETS INCOME TAX RETURNS, PAN DETAILS ETC. WHILE ARRIVING AT THE CONCLUSION THAT HE DID, THE AO 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 ASSESSEES ACCOUNT TO THE SHARE APPLICANTS ACCOUNT. AS HELD CONCURRENTLY BY THE CI T (APPEALS) AND THE ITAT, THESE CONCLUSIONS WERE CLEARLY BASELESS AND F ALSE. THIS COURT IS CONSTRAINED TO OBSERVE THAT THE AO UTTERLY FAILED T O COMPLY WITH HIS DUTY CONSIDERS ALL THE MATERIALS ON RECORD, IGNORING SPE CIFICALLY THE MOST CRUCIAL DOCUMENTS. WE PLACE THESE OBSERVATIONS ON THE RECOR D AND DIRECT A COPY OF THE JUDGMENT TO BE FURNISHED TO THE CONCERNED IN COME TAX AUTHORITIES FOR (SS) 28 TO 31 OF 2010 ANANT STEEL 54 APPROPRIATE ACTION TOWARDS REFLECTING THESE OBSERVA TIONS SUITABLY IN SERVICE RECORD OF THE CONCERNED AO TO AVOID SUCH INSTANCES IN THE FUTURE. 7. FOR THE ABOVE REASONS, THIS COURT IS OF THE OPIN ION THAT THE CONCURRENT FINDINGS OF FACT, AS TO THE TRUE IDENTITY OF THE SH ARE APPLICANTS, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION , ARE BASED ON SOUND REASONING AND DO NOT CALL FOR INTERFERENCE. NO SUBS TANTIAL QUESTION OF LAW ARISES. THE APPEALS ARE DISMISSED. [ EMPHASIS SUPPLIED ] IN THE CASE OF ACIT VS M/S KRISHNA SHEET PROCESSORS P LIMITED [ APPEAL NO ITA NO 546/ MUM/ 2013 DT 30-06-2015] THE AMOUNT OF SHARE PREMIUM OF RS 1000/- WAS DULY ACCEPTED AS GENUINE. IN VIEW OF THE ABOVE, ONCE THE ASSESSEE HAS ESTABLI SHED THE IDENTITY OF THE SHARE HOLDER IN THAT CASE THE AMOUNT OF SHARE PREMI UM IS NOT AN ISSUE. IF THE ASSESSING OFFICER HAS NOT SATISFIED WITH THE EX PLANATION OF THE SHARE APPLICANT, NECESSARY ADDITION IS TO BE MADE IN THE HAND OF THE SHARE APPLICANT BUT NOT IN THE CASE OF THE ASSESSEE. IN THE CASE OF CIT VS KORLAY TRADING CO LIMITED AS REPORTED IN 232 ITR 820, HONBLE CALCUTTA HIGH COURT OBSERVED THAT IN C ASE OF UNSECURED LOAN (SS) 28 TO 31 OF 2010 ANANT STEEL 55 MERE PROVIDING OF PA NO WAS NOT SUFFICIENT. IN THAT CASE THE ASSESSEE UTTERLY FAILED TO FURNISH EVEN CONFIRMATION LETTER. IN THE PRESENT APPEAL, THE MATTER IN DISPUTE IS NOT UNSECURED LOAN BUT SHARE CAPITAL AND IT WAS CATEGORICALLY HELD THAT THE ASSE SSEE NEED TO PROVE THE IDENTITY OF THE SHARE HOLDERS ONLY. THE ASSESSEE IN PRESENT CASE NOT ONLY FILED CONFIRMATION LETTER BUT AMPLE DOCUMENTS AS TO DISCHARGED THE ONUS LYING ON THE ASSESSEE. HENCE, DECISION OF THE HONB LE CALCUTTA HIGH COURT ARE DISTINGUISHABLE ON THE FACT OF THE PRESENT CAS E. IN CASE OF N TARIKA PROPERTY INVESTMENT (P) LTD , H ONBLE DELHI HIGH COURT AS REPORTED IN 40 TAXMANN.COM 525 AND BY THE HONBL E APEX COURT AS REPORTED IN 51 TAXMANN.COM 387 HAS OBSERVED THAT TH E BANK ACCOUNT AS PROVIDED WAS FORGED AND FABRICATED BANK ACCOUNT. IN THE PRESENT APPEAL IN HAND THE ASSESSEE HAS PROV IDED COPY OF BANK STATEMENT, PA NO AND VARIOUS OTHER DOCUMENTS AND TH E ASSESSING OFFICER FAILED TO POINTED OUT ANY DEFECTS IN THESE DOCUMENT S. HENCE, THE FACTS OF THE CASE OF N TARIKA PROPERTY INVESTMENT [P] LTD IS DISTINGUISHABLE WITH THE FACTS OF THE PRESENT APPEAL IN HAND. (SS) 28 TO 31 OF 2010 ANANT STEEL 56 IN CASE OF CIT VS N R PORTOFLIO (P ) LIMITED AS REP ORTED IN 42 TAXMANN.COM 339, HONBLE HIGH COURT HAS OBSERVED THAT MERE PROV IDING THE PA NO BY THE APPELLANT AND NOT CO-OPERATED WITH THE ASSESSIN G OFFICER IN THE ASSESSMENT PROCEEDING. IN THE PRESENT APPEAL, THE ASSESSEE COMPANY NOT ONL Y PROVIDE THE PA NO BUT ALSO PROVIDE AMPLE DOCUMENTS TO SUBSTANTIATE IT S CLAIM OF SHARE APPLICATION MONEY. THERE WAS NO ALLEGATION WHAT SO EVER OF THE ASSESSING OFFICER ABOUT NON- CO-OPERATION OF THE ASSESSEE DUR ING THE COURSE OF ASSESSMENT OR APPELLATE PROCEEDING. HENCE, THE FACT OF THE PRESENT CASE IS DISTINGUISHABLE WITH THE FACT OF N R PORTFOLIO (P) LIMITED. IN CASE OF GAYATHRI ASSOCIATES AS REPORTED IN 41 TA XMANN.COM 526, HONBLE ANDHRA PRADESH HIGH COURT HAS OBSERVED THAT EXCEPT BANK ACCOUNT NO OTHER DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFICER EVEN NO AFFIDAVIT WAS FILED. IN THE PRESENT APPEAL IN HAND THE ASSESSEE NOT ONLY THE BANK ACCOUNT BUT ALSO THE AFFIDAVIT AND VARIOUS OTHER DOCUMENTS WERE FILED. HENCE, ONUS LYING ON THE ASSESSEE HAS PROPERLY BEEN DISCHARGED. THUS, FACT OF THE PRESENT CASE IS DISTINGUISHABLE WITH THE FACT OF TH E CASE OF M/S GAYATHRI ASSOCIATES. (SS) 28 TO 31 OF 2010 ANANT STEEL 57 IN CASE OF CIT VS FOCUS EXPORTS (P) LTD AS REPORTE D IN 51 TAXMANN.COM 46, HONBLE DELHI HIGH COURT HAS OBSERVED THAT ADDR ESS AND PA NO OF THE SHARE APPLICANT WAS NOT PROVIDED. IN THE PRESENT APPEAL IN HAND THE APPELLANT COMPANY HAS PROVIDED THE COMPLETE ADDRESS , PA NO AND VARIOUS OTHER DOCUMENT S AS TO DISCHARGED ONUS LYING ON IT. HENCE, FACT OF THE PRESENT APPEAL IS DISTINGUISHABLE WITH THE FACT OF FOCUS EXPORTS (P) LTD. IN CASE OF CIT VS P MOHANKALA AS REPORTED IN 291 IT R 278, HONBLE APEX COURT HAS ANALYSIS THE PROVISION OF SECTION 68 OF T HE INCOME TAX ACT AND OBSERVED THAT EXPLANATION OF THE ASSESSEE NOT ACCEP TED BY THE ASSESSING DOES NOT TANTAMOUNT TO INCOME OF THE ASSESSEE. IN T HAT CASE THE LD CIT[A] AND HONBLE ITAT ALSO APPROVED THE ORDER OF THE ASS ESSING OFFICER. IN THE PRESENT APPEAL IN HAND, THE ASSESSEE COMPANY HAS EXPLAINED THE CORRECT NATURE OF TRANSACTIONS THOUGH THE SAME WAS NOT ACCEPTED BY THE ASSESSING OFFICER BUT BY THE LD CIT[A]. SINCE, THE ASSESSEE COMPANY HAS FILED AMPLE DOCUMENTS TO SUPPORT ITS CLAIM. HENCE, RATHER DECISION OF THE HONBLE APEX COURT SUPPORTS THE CASE OF THE ASSESSE E COMPANY. (SS) 28 TO 31 OF 2010 ANANT STEEL 58 IN THE CASE OF MAF ACADEMY (P) LIMITED AS REPORTED IN 42 TAXMANN.COM 377, HONBLE DELHI HIGH COURT ON THE BASIS OF ITS F INDING IN THE CASE OF N R PORTFOLIO [P] LIMITED [ SUPRA] REACHED TO A CONCLUS ION THAT THE ASSESSEE HAS FAILED TO PROVIDE THE IDENTITY, GENUINENESS AND CRE DITWORTHINESS OF THE SHARE APPLICATION MONEY . IN THE PRESENT CASE AS STATED THE ASSESSEE HAS EXTE ND ITS FULL CO-OPERATION AND ALSO FILED AMPLE DOCUMENTS AS TO PROVE THE INGR EDIENTS OF PROVISION OF SECTION 68 OF THE ACT. THE SHARE OF THE ASSESSEE CO MPANY WAS NOT BUY BACK BY THE ASSESSEE COMPANY BUT THE TRANSACTIONS W ERE EXECUTED BETWEEN THE SHARE HOLDERS IN THE PREVIOUS YEAR RELE VANT TO THE ASST YEAR 2006-07. HENCE, FACT OF THE CASE OF MAF ACADEMY (P) LIMITED WAS DISTINGUISHABLE WITH THE FACT OF THE PRESENT CASE O F THE ASSESSEE. IN THE CASE OF SUBHLAKSHMI VANIJYA ( P) LTD AS REPO RTED IN 60 TAXMANN.COM 60 , HONBLE KOLKATA BENCH OBSERVED THAT INSERTION OF THE PROVISO TO SECTION 68 WAS RETROSPECTIVE IN NATURE. THAT PROVISO TO SECTION 68 OF THE INCOME TAX ACT WA S INSERTED BY THE FINANCE ACT 2012 W.E.F 01-04-2013. SINCE, THE DATE OF APPLICABILITY WAS CLEARLY MENTIONED WITH THIS AMENDMENT, HENCE, THE S AID INSERTION OF THE PROVISO HAVE PROSPECTIVE APPLICABILITY. THAT HONBL E MUMBAI BENCH OF ITAT (SS) 28 TO 31 OF 2010 ANANT STEEL 59 IN THE CASE OF VEEDHATA TOWER P LIMITED [ ITA NO 70 70/ MUM/ 2014 ] DT 21- 01-2015 HAS DISCUSSED THE ISSUE OF SHARE APPLICATIO N MONEY IN DETAIL AND HELD THAT THE ASSESSEE PRIOR TO THE AMENDMENT BY TH E FINANCE ACT, 2012 NEED TO PROVE ONLY IDENTITY OF THE SHARE HOLDERS AN D THE ASSESSEE ALSO NEED NOT REQUIRES TO BE PROVED SOURCE OF SOURCE. IN THE CASE OF AGRAWAL COAL CORPORATION (P) LIMITED AS REPORTED IN 19 TAXMANN.COM 209, HONBLE INDORE BENCH OF ITAT HAS C ATEGORICALLY HELD THAT THE ASSESSEE NEEDS TO PROVE THE IDENTITY OF TH E SHAREHOLDER ONLY. IN THE PRESENT APPEAL IN HAND THE ASSESSEE HAS PROV ED THE IDENTITY OF THE SHARE APPLICANT WITH THE AMPLE DOCUMENTS. HENCE, RA THER THE SAID DECISION SUPPORTS THE CASE OF THE ASSESSEE COMPANY. IN CASE OF CIT VS NOVA PROMOTERS & FINLEASE (P) LIM ITED AS REPORTED IN 342 ITR 169, HONBLE DELHI HIGH COURT HAS OBSERVED THAT THE ASSESSING OFFICER HAS RECORDED STATEMENT OF THE SHARE APPLICANT IN TH AT CASE AND CONFRONTED WITH THE ASSESSEE BUT THE ASSESSEE FAILED TO SUBSTA NTIATE ITS CONTENTION. IN THE PRESENT APPEAL THE ASSESSING OFFICER DID NOT MAKE ANY INQUIRY. HENCE, RATHER DECISIONS OF THE HONBLE DELHI HIGH C OURT IN THE CASE OF CIT (SS) 28 TO 31 OF 2010 ANANT STEEL 60 VS NOVA PROMOTERS & FINLEASE (P) LIMITED [SUPRA] SU PPORT THE CASE OF THEASSESSEE. 9. ON CONSIDERATION OF ABOVE AND RESPECTFULLY FOLLO WING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS . STL EXTRUSION, 53 DTR 97 AND JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. PEOPLES GENERAL HOSPITAL (APPEAL NO.27/2008) (SUPRA) AND THE DECISI ON OF HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORT (SUPRA), 11 TTJ 357 AND OTHER DECISIONS AS REPRODUCED ABOVE, WE ARE OF THE VIEW THAT ASSESS EE CO. HAS RECEIVED SHARE PREMIUM BECAUSE ASSESSEE CO. IS ENGAGED IN BU SINESS OF ROLLING & STEEL BAR. THE CO. WAS INCORPORATED IN 13.10.1995 A ND HAVING EXPERIENCE OF MORE THAN 18 YEARS OF THIS LINE BUSINESS. WE ARE OF THE VIEW THAT HUGE PROFIT ON THE AMOUNT OF SHARE CAPITAL IS JUSTIFIED. WE ARE OF THE VIEW THAT ASSESSEE HAS PROVED THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. IN THIS CASE, THE IDENTITY OF SHAREHOL DERS IS PROVED BY FROM PRODUCING PAN, BANK DETAILS ETC. THE MONEY IS RECEI VED BY CHEQUE AND TRANSMITTED THROUGH BANKING CHANNEL WHICH IS NOT IN DISPUTE THEREFORE GENUINENESS OF TRANSACTION IS PROVED. THE CREDIT WO RTHINESS IS PROVED BY BANK STATEMENT OF CREDITORS SHOWING THAT IT HAS SUF FICIENT BALANCE IN ITS ACCOUNT TO ENABLE TO SUBSCRIBE SHARE CAPITAL THEREF ORE ONCE THESE (SS) 28 TO 31 OF 2010 ANANT STEEL 61 DOCUMENTS ARE PROVED, THE ASSESSEE HAS DISCHARGED I TS ONUS CASE UPON IT. WE FIND THAT IN THIS CASE, THE ASSESSING OFFICER HA S SIMPLY MADE THE ADDITION ON THE INFORMATION COLLECTED BY INVESTIGAT ION WING AS A GOSPEL TRUTH. IN OUR MIND, THAT INFORMATION COULD BE SUFFI CIENT FOR STARTING INVESTIGATION BUT THAT CANNOT SUBSTITUTE ALL SORT O F EVIDENCE. WE FIND THAT IN THIS CASE, THE IDENTITY OF THE INVESTOR, GENUINENES S OF THE TRANSACTION AND CREDIT WORTHINESS OF THE SHARE APPLICANT IS PROVED. EVEN SHARE APPLICANTS WERE AVAILABLE WITH THE ASSESSING OFFICER IN FORM O F BALANCE-SHEET, INCOME- TAX RETURNS, PAN DETAILS ETC. ASSESSEE CO. RECEIVED THE SUBSCRIPTION THROUGH ONE PUBLIC RIGHT ISSUE THROUGH BANKING CHAN NEL AND FURNISHED COMPLETE DETAILS OF SHAREHOLDERS, THUS, NO ADDITION COLD BE MADE U/S 68 OF THE I.T. ACT IN ABSENCE OF ANY POSITIVE MATERIAL OR EVIDENCE TO INDICATE THAT SHAREHOLDERS WERE BENAMI OR FICTITIOUS PERSONS OR T HAT ANY PART OF SHARE CAPITAL REPRESENTED COMPANYS OWN MONEY FROM UNDISC LOSED SOURCES. THEREFORE, WE DELETE THE ADDITIONS U/S 68 OF THE I. T. ACT IN ALL THE AYS 2001- 02 TO 2004-05. 10. IN RESPECT OF OTHER YEARS, THE LD. CIT(A) HAS P ASSED THE COMMON ORDER FOR ALL THE AYS FROM AY 2001-02 TO 2004-05, T HEREFORE, WE ALLOW ALL THE APPEALS FOR ALL THE YEARS ON MERIT DELETING THE ADDITIONS MADE U/S 68 OF THE I.T. ACT. (SS) 28 TO 31 OF 2010 ANANT STEEL 62 11. NOW, WE SHALL DECIDE THE ISSUE RELATED TO SEC. 153A R.W.S. 143(3) OF THE I.T. ACT EVEN WHEN NO INCRIMINATING DOCUMENTS W ERE FOUND AND SEIZED DURING THE COURSE OF SEARCH AS TO JUSTIFY THE ADDIT ION IN RESPECT OF SHARE APPLICATION MONEY. 12. THE SHORT FACTS OF THE CASE ARE AS UNDER: A SEARCH U/S 132 OF THE INCOME TAX ACT WAS EXECUTE D ON THE OFFICE AND FACTORY PREMISES OF THE ABOVE ASSESSEE ON 21-11-200 6. THEREAFTER, CASE OF ENTIRE GROUP WAS CENTRALIZED TO ACIT 5(1), INDORE. IN RESP ONSE TO NOTICE ISSUED U/S 153A OF THE INCOME TAX ACT, THE ASSESSEE HAD FILED ITS RETURN OF TOTAL INCOME. THE ASSESSING OFFICER WHILE PASSING ORDER U/S 153A OF THE INCOME TAX ACT ADDED AN AMOUNT OF RS 19000000/- TO THE INCOME OF THE ASS ESSEE BEING SHARE APPLICATION MONEY AND SHARE CAPITAL RECEIVED FROM T HE FOLLOWING PERSONS:- 1 DELTA FASHION LTD. D-1NIRNAYA SAGAR PRESS BUILDING,DR.M.B. VELKAR STREET , MUMBAI,400002 AAACD5 697H 400000 1600000 2000000 2 FREC WINGS IMPORT LIMITED 3,MALLICK STREET,KOLKATA, 700007 AAACF4 480A 300000 1200000 1500000 3 HIMGIRI DYNAMICS LTD. 9, MORAJI VELJI BLDG. 1 ST FLOOR 7- C DR.M.B. VELKAR STREET,KALBA DEVI ROAD,MUMBAI AACJO0 296M 600000 2400000 3000000 4 HINDUSTAN CONTINENTAL LTD. 7, BAMROO COLONY, JAORA COMP.,INDORE AABCH1 575M 400000 1600000 2000000 5 MCSURE CAPITAL LTD. 308,MALWA TOWER,10 OLD PALASIA, INDORE AABCM 3526F 100000 400000 500000 6 LYTON MGMT. SERVICES LTD 39,KALI KRISHAN TAGORE STREET , KOLKATA AABCC0 767E 600000 2400000 3000000 7 CUBE COMMUNICAT 39, K.K. TAGORE STREET KOLKATA AABCC0 767E 500000 2000000 2500000 (SS) 28 TO 31 OF 2010 ANANT STEEL 63 ION LTD. 8 SHRESHTH LEASING & FINANCE LTD. 118, SHREEHARI PARK,B/H CENTRE POINT BUILDING,RING ROAD SANGRAMPUR, SURAT 395002 AADCS3 850Q 400000 1600000 2000000 9 SHREEVAR OVERSEAS LTD 2, JOGENDRA KAVIRAJ ROW, KOLKATA 700007 S-1948 500000 2000000 2500000 3800000 15200000 1,90,00,000 DURING THE COURSE OF SEARCH, NO INCREMENTING DOCUME NTS WERE FOUND AND SEIZED RELATED TO THE ASSESSMENT UNDER APPEAL. HOWEVER, TH E ASSESSING OFFICER DURING THE COURSE OF SEARCH ASSESSMENT PROCEEDING CALLED VARIOUS DETAILS AND ADDED AN AMOUNT OF RS 1,90,00,000/- TO THE INCOME OF THE ASSESSEE BEING SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. 13. MATTER CARRIED TO LD. CIT(A) AND LD. CIT(A) HAS CONFIRMED THE ADDITION BY OBSERVING AS UNDER: 1.4.1] THAT PROVISION OF SECTION 153A IS SPECIAL AN D INDEPENDENT CODE. THAT DURING THE COURSE OF SEARCH ASSESSMENT WHAT CAN BE ADDED IS THE AMOUNT OF INCOME DETECTED DURING THE COURSE OF SEARCH. IF THI S ADDITION AS DONE BY THE ASSESSING OFFICER IS PERMISSIBLE IN THAT CASE THERE IS NO REASON FOR EXECUTION OF THE SEARCH. SINCE, ALL THESE INFORMATION WERE PROVI DED BY THE ASSESSEE ITSELF WITH THE RETURN OF INCOME. 1.4.2.1]THAT LANGUAGE OF SECTION 153A OF THE INCOME TAX ACT READ AS UNDER:- ' 153A . ASSESSMENT IN CASE OF SEARCH OR REQUISITION..NOTW ITHSTANDING ANYTHING CONTAINED IN S. 139, S. 147, S. 148, S. 149, S. 151 AND S. 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER S. 132 OR BOOKS OF ACCOUNT, OTHER (SS) 28 TO 31 OF 2010 ANANT STEEL 64 DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER S. 132A AFTER THE 31ST DAY OF MAY, 2003, THE AO SHALL. (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOM E IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CL. (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANN ER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROV ISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER S.139; (B) ASSESSEE OR REASSESS THE TOTAL INCOME OF SIX AS SESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE : PROVIDED THAT THE AO SHALL ASSESS OR REASSESS THE T OTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESS MENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, I F ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX AS SESSMENT YEARS REFERRED TO IN THIS SECTION PENDING ON THE DATE OF INITIATION OF T HE SEARCH UNDER S. 132 OR MAKING OF REQUISITION UNDER S. 132A, AS THE CASE MA Y BE, SHALL ABATE. 1.4.2.2]THAT FROM THE LANGUAGE OF THE FIRST PROVIS O OF SECTION 153A OF THE INCOME TAX ACT IT IS CLEAR THAT THE ASSESSING OFFIC ER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FAL LING WITHIN SUCH SIX ASSESSMENT YEARS. THAT WHEN EVEN OTHERWISE THE ASSE SSMENT PROCEEDING IS PENDING IN THAT CASE THE ASSESSING OFFICER HAS FULL RIGHT TO CALL ENTIRE INFORMATION AS HE DESIRED. HOWEVER, IN CASE OF RE-ASSESSMENT WH EN ASSESSMENT PROCEEDING EITHER COMPLETED OR TIME FOR ISSUANCE OF NOTICE U/S 143(2) EXPIRED. IN THAT CASE , THE ASSESSING OFFICER CAN CALL INFORMATION IN RESPE CT OF WHICH CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED DURIN G THE COURSE OF SEARCH. (SS) 28 TO 31 OF 2010 ANANT STEEL 65 1.4.2.3]IN THE PRESENT CASE NO INCREMENTING DOCUMEN TS WERE FOUND RELATED TO THE ASSESSMENT YEAR 2003-04. HOWEVER, THE ASSESSING OFFICER SIMPLY ON THE BASIS OF INFORMATION COLLECTED DURING THE COURSE OF SEARCH ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE WHICH AS PER C LEAR PROVISION OF SECTION 153A IS NOT JUSTIFIABLE. 1.5]HON BLE KOLKATA BENCH OF ITAT IN THE CASE OF L MJ INTERNATIONAL LIMITED VS DCIT REPORTED IN 119 TTJ 214 HAS HELD ( REFER CONCL USION PART ):- A READING OF S. 153A REVEALS APPARENT CONTRADICTION IN THE FIRST PROVISO AND THE SECOND PROVISO. THE FIRST PROVISO PROVIDES THAT THE ASSESSMENT OR REASSESSMENT SHALL BE DONE BY THE AO IN RESPECT OF EACH ASSESSME NT YEAR FALLING WITHIN SIX ASSESSMENT YEARS PROCEEDING THE YEAR OF SEARCH. THE SECOND PROVISO, ON THE OTHER HAND, PROVIDES THAT THE ASSESSMENT/REASSESSME NT PENDING ON THE DATE OF SEARCH SHALL ABATE. IN OTHER WORDS, THE ASSESSMENTS WHICH ARE NOT PENDING SHALL HOLD THEFIELD. THE LANGUAGE OF S. 153A IS NOT UNAMBIGUOUS AND IS NOT SUSCEPTIBLE TO ONLY ONE MEANING. IN THE CIRCUMSTANC ES, THE PRINCIPLE OF LITERAL CONSTRUCTION IS OF NO HELP. ONE OF THE SALUTARY RUL ES IS RULE OF HARMONIOUS CONSTRUCTION. ACCORDING TO THIS RULE, A STATUTE MUS T BE READ AS A WHOLE AND ONE PROVISION OF THE ACT SHOULD BE CONSTRUED WITH REFER ENCE TO OTHER PROVISIONS IN THE SAME ACT SO AS TO MAKE A CONSISTENT ENACTMENT. THE MEANING OF ASSESSMENT/REASSESSMENT DOES NOT ALWAYS MEAN TAKING RECOURSE TO THE WHOLE PROCEDURE LAID DOWN IN THE ACT FOR COMPUTING THE TA X LIABILITY. IT IS POSSIBLE TO EFFECT RECONCILIATION OF THE TWO PROVISOS APPENDED TO S. 153A BY RESTRICTING THE MEANING OF THE TERM 'ASSESS OR REASSESS' APPEARING IN THE FIRST PROVISO. AFTER THE SEARCH, THE TOTAL INCOME OF THE ASSESSEE IS TO BE R ECOMPUTED ON THE BASIS OF THE UNDISCLOSED INCOME UNEARTHED DURING SEARCH AND THE SAME IS TO BE ADDED WITH THE REGULAR INCOME ASSESSED UNDER S. 143(3) OR COMP UTED UNDER S. 143(1) FOR EACH OF THE SIX PRECEDING ASSESSMENT YEARS. WHERE A NY PREPAID TAXES ARE THERE, THE SAME ARE REQUIRED TO BE GIVEN CREDIT FOR COMPUT ING THE FURTHER TAX PAYABLE BY THE ASSESSEE. THE ASSESSEE IS ALSO REQUIRED TO P AY INTEREST UNDER SS. 234A AND 234B ON THE TAX DUE ON THE BASIS OF NEW CALCULA TION. WHERE NOTHING INCRIMINATING IS FOUND IN THE COURSE OF SEARCH RELA TING TO ANY ASSESSMENT YEARS, (SS) 28 TO 31 OF 2010 ANANT STEEL 66 THE ASSESSMENTS FOR SUCH YEARS CANNOT BE DISTURBED. THE CONSTRUCTION THAT THE DEPARTMENT SEEKS TO PLACE ON THE IMPUGNED PROVISION S WOULD LEAD TO SERIOUS HARDSHIP, INCONVENIENCE, INJUSTICE, ABSURDITY AND A NOMALY. SUPPOSE IN THE COURSE OF A SEARCH, NOTHING INCRIMINATING WAS FOUND . DOES THIS MEAN THAT AN HONEST CITIZEN BE UNDULY HARASSED BY FACING AUTOMAT IC REOPENING OF THE CONCLUDED ASSESSMENTS MERELY BECAUSE THERE WAS SEAR CH ACTION AGAINST HIM ? THE ABSURDITY OF THE CONSTRUCTION GETS ALL THE MORE PRONOUNCED WHEN SAY, NO INCRIMINATING MATERIAL IS FOUND RELATING TO THE 'OT HER PERSON' BUT THE MATERIAL FOUND INDICATES DISCLOSED INCOME. SUPPOSE, LOAN CON FIRMATIONS RELATING TO LOANS DULY DISCLOSED IN THE RETURN OF INCOME OF A ARE FOU ND AT THE TIME OF SEARCH IN THE PREMISES OF B. SHOULD THE ASSESSMENTS OF A BE R EOPENED FOR ALL THE SIX PRECEDING YEARS MERELY BECAUSE SEARCH ACTION HAS BE EN INITIATED AGAINST B ? IN SELECTING OUT OF DIFFERENT INTERPRETATIONS, THE COU RTS SHALL ADOPT THAT WHICH IS JUST, REASONABLE AND SENSIBLE RATHER THAN THAT WHIC H IS NONE OF THOSE THINGS. ONE MAY ALSO REFER TO CBDT CIRCULAR NO. 7 OF 2003, DT. 15 TH SEPT., 2003. A READING OF THE CIRCULAR CLEARLY INDICATES THAT THE APPEAL, REVISION ETC. ARISING OUT OF EARLIER ASSESSMENTS SHALL NOT ABATE. IN OTHER WO RDS, THERE IS NO MERGER OF THE EARLIER ASSESSMENTS WITH THE ASSESSMENTS DONE UNDER THE NEW SCHEME, I.E., S. 153A OR 153C. THE AMENDMENT MADE IN SS. 234A AND 234B DO ES NOT HELP THE CASE OF THE DEPARTMENT. THE SUBMISSION OF CIT. DEPA RTMENTAL REPRESENTATIVE THAT S. 153A STARTS WITH NON OBSTANTE CLAUSE AND EXCLUDES APPLIC ATION OF SS. 147 AND 148 RELATING TO REOPENING OF ASSESSMENTS IS TENABLE. BUT AT THE SAME TIME, THE SCHEME OF THE ACT IS VERY CLEAR. THE REGU LAR ASSESSMENTS ARE MADE IN TERMS OF SS. 139, 142 AND 143, CONCLUDED ASSESSMENT S CAN BE REOPENED AS PER SS. 147 AND 148 IN CASE THE AO HAS 'REASONS TO BELI EVE' THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND THE PR OVISIONS OF SS. 153A TO 153C CAN BE RESORTED TO FOR THE ASSESSMENT OF UNDIS CLOSED INCOME IN SEARCH CASES. ALL THE THREE PROCEDURES OF ASSESSMENT OPERA TE IN DIFFERENT FIELDS AND HAVE DIFFERENT PURPOSES TO BE FULFILLED ALTOGETHER. ITEMS OF REGULAR ASSESSMENT CANNOT BE ADDED BACK IN THE PROCEEDINGS UNDER S. 15 3C WHEN NO INCRIMINATING DOCUMENTS WERE FOUND IN RESPECT OF THE DISALLOWED A MOUNTS IN THE SEARCH PROCEEDINGS. THE ADDITIONS MADE BY THE AO, BEING AL L RELATING TO REGULAR ASSESSMENTS ARE HEREBY DELETED..RAJ KRUSHNA BOSE VS . BINOD KANUNGO AIR (SS) 28 TO 31 OF 2010 ANANT STEEL 67 1954 SC 202, MOHAMMAD SHER KHAN AIR 1922 PC 17 AND KING VS. DOMINION ENGINEERING CO. LTD. AIR 1947 PC 94 APPLIED; ABHAY KUMAR SHROFF VS. CIT (2007) 210 CTR (JHARKHAND) 602 : (2007) 290 ITR 114 (JHARKHAND) RELIED ON. 14. LD. AR HAS FILED WRITTEN SUBMISSION, WHICH READ S AS UNDER: 1.1] THE ASSESSEE IN THE GROUND NO 1 OF ALL THE APP EAL HAS CHALLENGED THE ADDITION TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF SHARE APPL ICATION MONEY EVEN WHEN NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED DURI NG THE COURSE OF SEARCH. 1.2] THAT IN THE CASE OF THE ABOVE ASSESSEE SEARCH U/S 1 32 OF THE INCOME TAX ACT WAS EXECUTED ON 21-11-2006 AND IN CONSEQUENCE OF SEARCH ACTION, NOTICE U/S 153 A OF THE INCOME TAX ACT WAS ISSUED ON 08-10-2007 FOR THE ASST YEAR 2001-02 TO 2006-07 AND YEAR OF SEARCH WAS FOR THE ASST YEAR 2007-08. 1.3] YEAR-WISE DETAILS OF INCOME TAX RETURN AS ORIG INALLY FILED BY THE ASSESSEE AREAS UNDER:- S.NO ASST YEAR RETURN ORIGINALLY FILED ON TIME FOR ISSUANCE OF THE NOTICE U/S 143[2] STATUS OF THE ASSESSMENT AMOUNT OF ADDITION [RS] 1 2001-02 31-10-2001 31-10-2002 CONCLUDED ASSESSMENT 15,00,000 2 2002-03 29-10-2002 31-10-2003 CONCLUDED ASSESSMENT 15,00,000 3 2003-04 31-10-2003 31-10-2004 CONCLUDED ASSESSMENT 1,90,00,000 4 2004-05 01-11-2004 30-11-2005 CONCLUDED ASSESSMENT 10,00,000 2,30,00,000 1.4.1] THE ASSESSING OFFICER IN SECOND PARA ON PAGE NO 1 OF THE ASSESSMENT ORDER CATEGORICALLY MENTIONED THAT:- ON SCREENING OF THE AUDITED FINAL ACCOUNT AND ON PERUSAL OF THE DETAILS AS SUBMITTED BY THE ASSESSEE. IT WAS NOTICED THAT THE ASSESSEE HAS RECEIVED AN (SS) 28 TO 31 OF 2010 ANANT STEEL 68 AMOUNT OF RS 1,65,00,000/- ON ACCOUNT OF SHARE CAPI TAL AND RS 25,00,000/- ON ACCOUNT OF SHARE APPLICATION MONEY FROM SHREEVAR OV ERSEAS LIMITED __________. 1.4.2] THE LD CIT[A] VIDE HIS ORDER DT 15-01-2010 I N PARA 2 ON INNER PAGE NO 2 IN LAST TWO LINE STATED THAT :- THE AO AFTER ISSUE OF STATUTORY NOTICES AND CONSI DERING COMPLIANCE MADE AND ON SCREENING OF THE AUDITED FINAL ACCOUNTS AND ON P ERUSAL OF THE DETAILS AS SUBMITTED BY THE ASSESSEE, THE AO HAS NOTICED THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS 1,65,00,000 /- ON ACCOUNT OF SHARE CAP ITAL AND RS 25,00,000/- ON ACCOUNT OF SHARE APPLICATION MONEY_______________. 1.4.3]THAT FROM THE ABOVE OBSERVATION OF THE LD AO AND THE LD CIT[A] IT IS CLEAR THAT NOTHING INCRIMINATING WAS FOUND AND SEIZED DURING T HE COURSE OF SEARCH. HOWEVER, THE ASSESSING OFFICER ON THE BASIS OF AUDITED ACCOUNT O F THE ASSESSEE RAISED QUERIES AND MAKE ADDITION WHICH IS OUTSIDE THE PURVIEW OF THE S EARCH ASSESSMENT PROCEEDING. 1.5]THAT IN THE PRESENT CASE THE AMOUNT OF SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES AND THE SAME WAS PROPERLY RECORDED IN ITS BOOKS OF ACCOUNT PRIOR TO THE DATE OF SEARCH . HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING THE SAME TO THE INCOME OF T HE ASSESSEE IN THE CONCLUDED ASSESSMENT. 1.6.1] THAT FIRST PROVISO TO SECTION 153A [1] OF TH E INCOME TAX ACT READ AS UNDER:- PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS EE OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS . 1.6.2] THAT AS PER SECOND PROVISO TO SECTION 153A[1 ] OF THE INCOME TAX ACT READ AS UNDER:- PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YE ARS REFERRED TO IN THIS SUB- SECTION PENDING ON THE DATE OF INITIATION OF THE SEARCH UND ER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. 1.6.3] THAT AS PER SUB- SECTION (2) OF SECTION 153A OF THE INCOME TAX READ AS UNDER:- (SS) 28 TO 31 OF 2010 ANANT STEEL 69 [2] IF ANY PROCEEDING INITIATED OR ANY ORDER OF A SSESSMENT OR RE-ASSESSMENT MADE UNDER SUB- SECTION (1) HAS BEEN ANNULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SEC TION (1) OR SECTION 153, THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSME NT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB- SECTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RECEIPT OF THE ORDER OF SUCH ANNULMENT BY THE PRINC IPAL COMMISSIONER OR COMMISSIONER. 1.6.4] THAT IN THE PRESENT APPEAL RELATES TO THE A SST YEARS 2001-02 TO 2004-05 , RETURN OF INCOME IN RESPECT OF ALL THE ASSESSMENT Y EARS HAVE ALREADY BEEN FILED AND TIME FOR ISSUANCE OF NOTICE U/S 143[2] OF THE INCOM E TAX ACT HAS ALSO BEEN EXPIRED PRIOR TO THE DATE OF SEARCH ON 21-11-2006. HENCE, A LL THE ASSESSMENT YEARS ARE COMPLETED ASSESSMENT YEARS PRIOR TO THE DATE OF SEA RCH ITSELF. ACCORDINGLY, NO ASSESSMENT OF THE ASSESSEE COMPANY WAS ABATE, IN VI EW OF THE SECOND PROVISO TO CLAUSE (B) OF SUB- SECTION (1) OF SECTION 153A OF THE INCOME TAX ACT . 1.6.5] THE APPELLANT IN ITS APPEAL HAS CHALLENGED T HAT WHEN NO INCRIMINATING MATERIAL / DOCUMENTS WERE FOUND AS TO SUBSTANTIATE THE ADDITION MADE BY THE ASSESSING OFFICER. IN THAT CASE, THE ASSESSING OFFI CER WAS NOT JUSTIFIED IN MAKING THE ADDITION IN THE ASSESSMENT ORDER AS PASSED U/S 153A R.W.S 143(3) OF THE INCOME TAX ACT. 1.7.1] THAT HONBLE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD VS DCIT REPORTED IN 20 ITJ 45 ( TRIB- MUMBAI)(SB) IN PARA 5 ( REFER PAGE NO 54 OF ITJ ) . 1.7.2] THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ANIL KUMAR BHATIA { APPEAL NOS 1626,1632,1998,2006,2019,2020/2010 DT 07 -08-2012} . 1.7.3] THAT HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS SMT SURAJ DEVI REPORTED IN 328 ITR 604 .. 1.7.4]HONBLE DELHI HIGH COURT IN THE CASE OF CIT V S NAVEEN GERA REPORTED IN 328 ITR 516 HAS .. (SS) 28 TO 31 OF 2010 ANANT STEEL 70 1.7.5] THAT HONBLE MIUMBAI BENCH IN THE CASE OF S HRI GURVINDER SINGH BAWA [ APPEAL NO 2075/MUM/2010 DT 16.11.2012] HAS ALSO D ISCUSSED THE SIMILAR ISSUE IN DETAIL. 1.7.6] THAT HONBLE INDORE BENCH OF ITAT IN THE CAS E OF ARUN SEHLOT, BHOPAL [ APPEAL NOS 186 TO 192/ IND/ 2012 DT 30.04.2013.. 1.7.7] THAT HONBLE DELHI BENCH OF ITAT IN THE CASE OF ACIT VS PACL INDIA LTD [ APPEAL NO 2637/DEL/ 2010 DT 20-06-2013 .. 1.7.8] THAT HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA [ APPEAL NO ITA 707/ 2014 DT 28-08-2015 ] AFTER CONSIDERING THE ALL AVAILABLE DECISIONS ON THIS ISSUE HAS HELD THAT [ REFER PARAS 37 TO 39 OF THE ORDER]:- SUMMARY OF THE LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTI ONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I] ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II] ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPU TED BY THE AOS AS A FRESH EXERCISE. III] THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFORE MENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTH ER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. (SS) 28 TO 31 OF 2010 ANANT STEEL 71 IV] ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDIT IONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SE ARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE R ELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASS ESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V] IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESS MENT PROCEEDINGS. VI] INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUG HT ON THE RECORD OF THE AO. VII] COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 38] THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005 -06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD CO MPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITI ONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 39] THE QUESTION FRAMED BY THE COURT IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. EMPHASIS SUPPLIED 1.8] THE ASSESSEE PLACED RELIANCE ON THE LEGAL SYN OPSIS AND COMPARATIVE CHART OF DECISIONS AS FILED IN SUPPORT OF ITS CONTENTION. (SS) 28 TO 31 OF 2010 ANANT STEEL 72 1.9] THAT IN VIEW OF THE ABOVE WHEN THE NOTHING IN CRIMINATING WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH AND THE ASSESSING OFFIC ER ON THE BASIS OF BALANCE SHEET AS FILED BY THE ASSESSEE RAISED THE QUERY AND ADDED T HE AMOUNT OF SHARE APPLICATION TO THE INCOME OF THE ASSESSEE EVEN WHEN THE SAID AMOUN T OF SHARE APPLICATION MONEY WAS PROPERLY RECORDED IN THE REGULAR BOOKS OF ACCOUNT O F THE ASSESSEE PRIOR TO THE DATE OF SEARCH. HENCE, ADDITION AS MADE TO THE INCOME OF TH E ASSESSEE NOW REQUIRES TO BE DELETED IN FULL. 15. LD. DR RELIED UPON THE ORDERS OF REVENUE AUTHOR ITIES AND THE DECISIONS IN CASE OF ABHAY KUMAR SHROFF VS. CIT (20 07) 210 CTR (JHARKHAND) 602, (2007) 290 ITR 114 (JHARKHAND). 16. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES. WE HAVE DECIDED THE ISSUE THAT IN ABSENCE OF ANY INCRIMINATING MATE RIAL OR DOCUMENTS SEIZED DURING THE COURSE OF SEARCH, THE ASSESSING OFFICER CANNOT PASS ORDER U/S 153A R.W.S. SEC. 143(3) OF THE I.T. ACT IN THE CASE OF KALANI BROS. IN IT(SS)A NO.71/IND/2014 AND OTHERS. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER: 8. IN RESPECT OF 153A BAD IN LAW ON THE GROUND THA T ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) WAS COMPLETED ON 29.12.2006 (HEREINAFTER REFERRED AS ORIGINAL ASSESSMENT ORDER FOR EASE OF REFERENCE), THE AO TREATED THE SAID LEASE TRANSACTION AS SALE T RANSACTION AND TAXED (SS) 28 TO 31 OF 2010 ANANT STEEL 73 THE TOTAL SECURITY DEPOSIT RECEIVABLE AS SALE CONSI DERATION OF SALE OF LAND. THE ADDITION MADE IN THE SEARCH ASSESSMENT ORDER PE RTAINED TO THE ISSUE ALREADY DEALT IN THE ORIGINAL ASSESSMENT ORDER I.E. LEASE TRANSACTION CATEGORIZED AS SALE TRANSACTION. THE FACT THAT THE AFORESAID ISSUE BEARS NO RELATION TO THE ANY OF THE MATERIAL / DOCUMENTS / R ECORDS FOUND AND SEIZED DURING THE SEARCH ACTION ON 16.04.2009. LD. CIT(A) HAS RELIED UPON THE CIRCULAR NO. 7 OF 2003 WHICH CLARIFIES THE POSITION OF THE PENDING APPEALS AS ON THE DATE OF THE SEARCH. THE RELEVANT PORTION IS PRODUCED HEREWITH 'THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME OF EACH OF THESE SIX ASSESSMENT YEARS. ASSE SSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YE AR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS PENDING O N THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR REQU ISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. IT I S CLARIFIED THAT THE APPEAL, REVISION OR RECTIFICATION PROCEEDINGS P ENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR R EQUISITION SHALL NOT ABATE..' ACCORDINGLY, AS FAR AS COMPLETED ASSESSMENTS ARE CO NCERNED, THEY DO NOT ABATE. THE AO CANNOT PROCEED TO MAKE THE SAME ADDIT ION IN THE BLOCK ASSESSMENT WITHOUT ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH. THE SAID VIEW PREVENTS THE AO TO UNDO WHAT HAS ALREADY BEEN COMPLETED AND HAS BECOME FINAL IN THE ORIGINAL ASSE SSMENT PROCEEDINGS. 9. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY BOTH THE SIDES. WE HAVE AL SO CONSIDERED VARIOUS (SS) 28 TO 31 OF 2010 ANANT STEEL 74 RELEVANT FACTS OF THE CASE. IT IS A SETTLED LEGAL P OSITION THAT ONCE A SEARCH AND SEIZURE ACTION HAS TAKEN PLACE U/S 132 OF THE A CT OR A REQUISITION HAS BEEN MADE U/S 132A, THE PROVISIONS OF SECTION 153A TRIGGED AND ASSESSING OFFICER IS BOUND TO ISSUE NOTICE U/S 153A OF THE ACT. ONCE NOTICES ARE ISSUED U/S 153A OF THE ACT THEN ASSESSE E IS LEGALLY OBLIGED TO FILE RETURN OF INCOME FOR SIX YEARS. THE ASSESSMENT AND REASSESSMENT FOR SIX YEARS SHALL BE FINALISED BY THE ASSESSING OFFIC ER. IT IS ALSO HELD BY VARIOUS COURTS THAT ONCE NOTICE U/S 153A OF THE ACT ISSUED, THEN ASSESSMENT FOR SIX YEARS SHALL BE AT LARGE BOTH FOR ASSESSING OFFICER AND ASSESSEE HAVE NO WARRANT OF LAW. IT HAS BEEN ALSO H ELD THAT IN THE ASSESSMENT YEARS WHERE ASSESSMENTS HAVE BEEN ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A THEN ASSESSING OFFIC ER ACTS UNDER ORIGINAL JURISDICTION AND ONE ASSESSMENT IS MADE FOR TOTAL I NCOME INCLUDING THE ADDITION MADE ON THE BASIS OF SEIZED MATERIAL. BUT WHERE THERE IS NO ABATEMENT OF ASSESSMENTS AND ASSESSMENTS WERE COMPL ETED ON THE DATE OF SEARCH THEN ADDITION CAN BE MADE ONLY ON THE BAS IS OF INCRIMINATING DOCUMENTS OR UNDISCLOSED ASSETS, ETC. IN THESE CASE S THERE WAS NO INCRIMINATING DOCUMENT FOUND AND SEIZED. NO ASSESSM ENT PROCEEDINGS WERE ABATED IN THESE ASSESSEES. THUS ASSESSMENTS F OR THESE ASSESSMENT YEARS WERE COMPLETED ON THE DATE OF SEAR CH. THE ASSESSMENTS WERE COMPLETED U/S 143(3) OF THE ACT RE AD WITH SECTION 153A/153C OF THE ACT AFTER THE SEARCH. THERE WAS NO ABATEMENT OF ANY PROCEEDINGS IN THESE CASES FOR THESE ASSESSMENT YEA RS IN TERMS OF (SS) 28 TO 31 OF 2010 ANANT STEEL 75 SECOND PROVISO TO SECTION 153A OF THE ACT. THERE IS NO SEIZED MATERIAL BELONGING TO THE ASSESSEE WHICH WAS FOUND AND SEIZE D IN RELATION TO ADDITIONS MADE. IN A RECENT DECISION, HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) HAS HELD THAT COMPL ETED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHI LE MAKING ASSESSMENT U/S 153A OF THE ACT, ONLY ON THE BASIS OF SOME INCR IMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE K NOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IN ALL THESE CASES NO ASSESSME NTS WERE PENDING ON THE DATE OF SEARCH FOR THESE ASSESSMENT YEARS. NO A SSESSMENTS WERE ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A O F THE ACT. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWL A (SUPRA) HAS CONSIDERED VARIOUS HIGH COURT DECISIONS RELIED UPON BY THE LEARNED DR. THE HON'BLE DELHI HIGH COURT HAS CONSIDERED THE CAS ES OF CANARA HOUSING DEVELOPMENT CO. VS. DCIT; MADUGULA VS. DCIT ; CIT VS. CHETANDAS LAXMANDAS AND CIT VS. ANIL KUMAR BHATIA ( SUPRA). THE ONLY DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJ KUMAR ARORA; 367 ITR 517 RELIED ON BY THE LEARNED D R WAS NOT CONSIDERED BY HON'BLE DELHI HIGH COURT WHILE DECIDI NG THE ISSUE IN THE CASE OF KABUL CHAWLA. THE HON'BLE ALLAHABAD HIGH CO URT HAS REVERSED THE ORDER OF THE TRIBUNAL AND REMANDED THE ISSUE TO THE TRIBUNAL TO CONSIDER THE APPEAL OF THE DEPARTMENT ON MERITS. IT IS A SETTLED LEGAL (SS) 28 TO 31 OF 2010 ANANT STEEL 76 POSITION THAT WHEN TWO VIEWS ARE POSSIBLE ON A PART ICULAR ISSUE THEN THE VIEW FAVOURABLE TO THE ASSESSEE SHOULD BE FOLLOWED AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCT S; 88 ITR 192. RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE APEX COURT, WE DISMISS THE GROUND OF APPEALS OF THE REVENUE. DEPARTMENTAL APPEALS ARE DISPOSED ACCORDINGLY. 17. WE, RESPECTFULLY FOLLOWING THE SAME, WE ALLOW T HE APPEALS ON THE GROUND OF SEC. 153A OF THE I.T. ACT WHEREIN WE HAVE ALREADY HELD THAT IN ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUND AND SE IZED DURING THE COURSE OF SEARCH, THE ASSESSING OFFICER IS NOT JUST IFIED IN MAKING THE ADDITION IN NON-ABATED ASSESSMENT ORDER WHILE PASSI NG THE ORDER U/S 153A R.W.S. 143(3) OF THE ACT. 18. AS WE HAVE ALLOWED THE APPEALS ON MERIT AS WELL AS LEGAL GROUND, WE DO NOT DECIDE OTHER REMAINING ISSUES IN ALL THESE A PPEALS. WE ORDER ACCORDINGLY. 19. FINALLY, APPEALS OF THE ASSESSEE ARE ALLOWED IN TERMS AS INDICATED ABOVE. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18.1 1.2015. (SS) 28 TO 31 OF 2010 ANANT STEEL 77 SD/- SD/- (B.C. MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18.11.2015 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), CIT/DR , GUARD FILE !VYS!