The DCIT, Central Circle-1(4), Ahmedabad V. M/s. GTC Oilfields Services P. Ltd, Ahmedabad

ITSSA 314/AHD/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9938 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-10-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-10-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 02-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Source of fund; Accommodation entries
• Section: 68; 132; 69C; 143(3); 153A; 13

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘बी’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD ] ] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT AND MS. MADHUMITA ROY, JUDICIAL MEMBER SN Appeal No. AY Appellant Respondent 1-3 IT(SS)A Nos. 314 to 316/Ahd/2019 2009-10 2010-11 2014-15 The DCIT, Central Circle 1(4), Ahmedabad M/s. GTC Oilfields Services P. Ltd., 61, New York tower, A-Block, Thaltej Char Rasta, S.G. Road, Ahmedabad-380054 PAN : AAACG 8684 P 4 ITA No. 971/Ahd/2019 2015-16 The DCIT, Central Circle 1(4), Ahmedabad M/s. GTC Oilfields Services P. Ltd., Ahmedabad-380054 PAN : AAACG 8684 P 5 IT(SS)A No. 317/Ahd/2019 2013-14 The DCIT, Central Circle 1(4), Ahmedabad M/s. Globe Ecologistics Pvt. Ltd., 61, New York tower, A-Block, Thaltej Char Rasta, S.G. Road, Ahmedabad-380054 PAN : AAACG 3938 J 6 IT(SS)A No. 111/Ahd/2018 2014-15 The DCIT, Central Circle 1(4), Ahmedabad M/s. GTC Petrotech Pvt. Ltd., 61, New York tower, A-Block, Thaltej Char Rasta, S.G. Road, Ahmedabad-380054 PAN : AAACG 8685 N 7-8 IT(SS)A Nos. 117 & 118/Ahd/2018 2011-12 2012-13 The DCIT, Central Circle 1(4), Ahmedabad M/s. Globe Ecologistics Pvt. Ltd., Thelia Mill Compound, New Kerripittha, Kalupur, Danapitha, Ahmedabad-380054 PAN : AAACG 3938 J Revenue by : Shri Sudhendu Das, CIT-DR Assessee(s) by : Shri Mehul K. Patel, Advocate /Date of Hearing : 19/10/2022 /Date of Pronouncement: 21/10/2022 आदेश/O R D E R PER BENCH : These eight appeals preferred by the Revenue in the case of three assessees involving seven assessment years, i.e. AYs 2009-10 to 2015-16, are directed against the following orders of the learned Commissioner of Income-tax (Appeals)-6/11, Ahmedabad (“CIT(A)” in short):- IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 2 Appeal IT(SS)A/ITA No. AY Against the Order Passed by Date of CIT(A)’s Order IT(SS)A No. 314/Ahd/2019 2009-10 CIT(A)-6, Abad 22.03.2019 IT(SS)A No. 315/Ahd/2019 2010-11 CIT(A)-6, Abad 26.03.2019 IT(SS)A No. 316/Ahd/2019 2014-15 CIT(A)-6, Abad 22.03.2019 ITA No. 971/Ahd/2019 2015-16 CIT(A)-6, Abad 22.03.2019 ITA(SS)A No. 317/Ahd/2019 2013-14 CIT(A)-6, Abad 26.03.2019 ITA(SS)A No.111/Ahd/2018 2014-15 CIT(A)-11, Abad 08.02.2018 ITA(SS)A No. 117/Ahd/2018 2011-12 CIT(A)-6, Abad 01.02.2018 ITA(SS)A No. 118/Ahd/2018 2012-13 CIT(A)-6, Abad 01.02.2018 2. Since all these eight appeals filed by the Revenue in case of three companies belonging to one group involve identical issues, the same have been heard together and are being disposed of by a single consolidated order for the sake of convenience. 3. The relevant facts of the case giving rise to these appeals are that all the three assessees, in the present case, are companies which belong to Globe Group. A search under Section 132 of the Income-tax Act, 1961 (“the Act” in short) was conducted in the case of all these three assessees on 23.01.2015. Consequent to the search, notices under Section 153A of the Act for all the years under consideration were issued by the Assessing Officer to the assessees. During the course of assessment proceedings under Section 153A r.w.s. 143(3) of the Act, the Assessing Officer examined the share capital and share premium claimed to be received by the assessee- companies during the years under consideration as under:- GTC Oilfield Services Pvt. Ltd. AY Investor Company Share Capital Share Premium Total Amount 2009-10 Baghbaan Marketing Pvt. Ltd. 19,15,000.00 5,55,35,000.00 5,74,50,000.00 2010-11 Baghbaan Marketing Pvt. Ltd. 9,87,650.00 2,86,41,850.00 2,96,29,500.00 2010-11 Yamini Marketing Pvt Ltd. 66,650.00 19,32,850.00 19,99,500.00 2014-15 Ambika Commodeal P. Ltd. 18,85,000.00 5,18,37,500.00 5,37,22,500.00 2015-16 Ambika Commodeal P. Ltd. 10,52,000.00 2,91,37,500.00 3,01,89,500.00 Total 17,29,91,000.00 IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 3 4. On examination of the share capital and share premium amounts claimed to be received by the assessee-companies during the years under consideration as above, the Assessing Officer recorded his findings / observations as under:- i) The investor companies were mainly based at Kolkata and did not have any substantial business activities; ii) The profit/loss declared by the investor companies in the returns of income filed for the relevant years was nominal; iii) The Directors of the investor companies were family members of the main persons of the Globe Group and even the shares of the investor companies were mainly held by the family members of the main persons of the Globe Group; iv) The investor companies had no capacity or source to generate the funds which were claimed to be invested in the assessee-companies; v) The funds invested in the share capital/share premium in the assessee- companies were claimed to be raised by the investor companies by way of issue of shares to multiple entities and these multiple entities were operated by professional entry operators as per their statements recorded under Section 131(1A)/132(4) of the Act, wherein they Globe Ecologistics Pvt. Ltd. - 2011-12 Westwll Exports Pvt Ltd 17,57,000.00 7,60,43,000.00 7,78,00,000.00 2011-12 Yamini Marketing Pvt Ltd. 8,95,000.00 3,86,05,000.00 3,95,00,000.00 2012-13 Westwll Exports Pvt Ltd 21,26,000.00 10,41,74,000.00 10,63,00,000.00 2012-13 Yamini Marketing Pvt Ltd. 11,93,000.00 5,84,57,000.00 5,96,50,000.00 2013-14 Ambika Commodeal P. Ltd. 68,90,000.00 11,36,85,000.00 12,05,75,000.00 Total 40,38,25,000.00 GTC Petrotech Pvt. Ltd. 2014-15 Ambika Commodeal P. Ltd. 10,75,000.00 2,04,25,000.00 2,15,00,000.00 Total 2,15,00,000.00 IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 4 accepted of having given accommodation entries in the form of share capital/share premium and received commission at the rate of 0.25%; vi) In his statement recorded during the course of search on 23.01.2015, Shri Basant R. Agarwal, Director in Globe Group Company and a key person of the group could not satisfactorily reply to the questions asking him to provide the relevant details; vii) Although Shri Basant R. Agarwal disagreed with the statement of the investor companies regarding the provision of accommodation entries, he declined to cross-examine the deponents; 5. On the basis of above findings/observations recorded by him, the Assessing Officer required the assessee-companies to show-cause as to why the share capital and share premium in question received by them should not be treated as unexplained cash credit and added to their total income for the relevant years under Section 68 of the Act. In reply, the following submission was made on behalf of the assessee-companies:- “1. The company Baghban Marketing P Ltd has made investment in share capital and premium of M/s. GTC Oilfield Services P ltd in AY 2009-10 and 2010-11 of Rs 8,70,79,500/-. 2. Such investments have been offered as its income / investment amount in the IDS-2016, a copy of declaration in form No 1 by Baghban Marketing P Ltd is furnished. 3. Baghban Marketing P Ltd has paid first installment of tax of Rs.1,15,00,000/-. Therefore, the income declared by Baghban Marketing P Ltd justifies the identity, genuineness and creditworthiness on their part, as per provisions of section 68 of the IT Act, 1961. 4. The company Yamini Marketing P Ltd has made investment in share capital and premium of M./s. GTC Oilfield Services P ltd in AY 2010-11 and 2011-12 and AY 2012-13 of Rs 15,00,94,000/-. 5. Such investments have been offered as its income / investment amount in the IDS 2016, a copy of declaration in form No.1 by Yamini Marketing P Ltd is furnished. IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 5 6. Yamini Marketing has paid first installment of tax of Rs 4,45,00,000/-on 28.11.2016. Therefore, the income declared by Yamini Marketing P Ltd justifies the identity, genuineness and credit worthiness on their part, as per provisions of section 68 of the I.T. Act, 1961. 7. The company Westwell Exports P Ltd has made investment in share capital and premium of M./s. GTC Oilfield Services P ltd in AY 2011-12 and AY 2012-13 of Rs 8,25,50,000/-. 8. Such investments have been offered as its income / investment amount in the IDS-2016, a copy of declaration in form No 1 by Westwell Exports P Ltd is furnished. 9. The company Westwell Exports P Ltd has also made investment in share capital and share premium in M/s. GTC Oilfield Services P Ltd in AY 2014- 15 and 2015-16 through paper company M/s. Ambika Commodeal P Ltd of Rs 8,39,12,000/-. 10. Westwell Exports has paid first installment of tax of Rs 4,50,00,000/-on 28.11.2016. Therefore, the income declared by Westwell Exports P Ltd justifies the identity, genuineness and credit worthiness on their part, as per provisions of section 68 of the IT Act, 1961. 11. CBDT through Instruction No 12 of 2016 dated 11.11.2016 has clarified that, where the assesses claims that an issue under an assessment proceeding has nexus with the declaration filed under the scheme, the AO may obtain a written undertaking along with relevant documentary evidence from the assessee about the issues and quantum of amount covered under the declaration having bearing on the pending assessment proceedings. The AO, on being satisfied about the nexus of the amount declared under the scheme, either in whole or in part, with the issue raised in the assessment proceedings, shall provide the benefit of such amount in the pending assessment provided the assessee duly pays the tax, surcharge and penalty payable under the scheme. However, in respect of cases getting barred by limitation on 31.12.2016, such benefit shall be provided, if the assessee pays the first installment i.e., 25% of the amount payable on the declaration filed under the scheme. 12. Since Baghban Marketing P Ltd., Yamini Marketing P Ltd and Westwell Exports P Ltd had declared the investments in share capital / premium under IDS 2015, therefore, the income declared by the above companies justify the identity, genuineness and credit worthiness on their part, as per provisions of section 68 of the Income tax Act, 1961.” 6. The submission made on behalf of the assessee-companies as above was not found acceptable by the Assessing Officer. According to him, the IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 6 fact that the amounts in question representing the share capital and share premium have been offered by the investor-companies under IDS-2016 cannot establish the nexus between the admission of income and its application. He held that no such concrete and material evidence was filed by the assessee(s) to prove this nexus and in the absence of the same, the claim of the assessee(s) was not acceptable. He held that the genuineness of the relevant transactions and creditworthiness of the investor-companies was not satisfactorily established by the assessee(s). Accordingly, he treated the cash credit representing share capital and share premium received by the assessee-companies during the years under consideration as unexplained and the amounts of such share capital and share premium were added by him to the total income of the assessee-companies for the relevant years under consideration under Section 68 of the Act in the assessments completed under Section 153A r.w.s. 143(3) of the Act. 7. In the assessments so completed, he also made a further addition to the extent of 0.25% of the respective share capital and share premium amounts being commission paid by the assessee-companies allegedly to obtain accommodation entries by treating the same as unexplained expenditure under Section 69C of the Act. 8. Against the orders passed by the Assessing Officer under Section 153A r.w.s. 143(3) of the Act for the years under consideration, appeals were preferred by all the three assessee-companies before the learned CIT(A). During the course of appellate proceedings before the learned CIT(A), detailed submission was made on behalf of the assessee-companies in support of their case that the additions made by the Assessing Officer by treating the share capital and share premium received during the years under consideration as unexplained cash credit under Section 68 of the Act IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 7 as well as the additions made under Section 69C of the Act on account of unexplained expenditure allegedly incurred on commission paid for obtaining accommodation entries were not sustainable. The said submission was forwarded by the learned CIT(A) to the Assessing Officer who in turn submitted a remand report to the learned CIT(A) offering his comments on the submission made by the assessee-companies. When the remand report submitted by the Assessing Officer was confronted by the learned CIT(A) to the assessee-companies, the latter filed a rejoinder in writing offering clarification in respect of each and every comment offered by the Assessing Officer. After taking into consideration the entire material available before him including the submission made by the assessee- companies, remand report submitted by the Assessing Officer and the rejoinder filed by the assessee-companies, the learned CIT(A) found merit in the case of the assessee(s) on the issue under consideration and deleted the additions made by the Assessing Officer by treating the share capital and share premium amounts received by the assessee-companies as unexplained cash credit under Section 68 of the Act for the following reasons given in his impugned order dated 22.03.2019 passed in the case of GTC Oilfields Services P. Ltd. for AY 2009-10 which are similar to the reasons given by the learned CIT(A) in other orders which are impugned in these appeals:- “3.5 I have carefully gone through the facts mentioned in the assessment order and remand report of the AO and the submission and rejoinder of the appellant. The AR of the appellant vehemently argued that the appellant has furnished all necessary evidences and documents provided by investor under IDS-2016 to justify source of share capital and share premium to prove genuineness of transaction and creditworthiness of the investor in assessment proceedings. The Hon'ble CBDT also issued Circulars and Notifications that no enquiry would be made by the Income-tax Department in respect of sources of undisclosed income or investment in movable or immovable property declared in a valid declaration made in accordance with the provisions of the Scheme, though the A.O. has not taken IDS in the true spirit and rejected the evidences issued by Pr. CIT (Central), Ahmedabad IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 8 under the scheme (IDS-2016) brought by Govt. of India and regulated by CBDT through its Revenue Officers and added share capital and share premium duly covered under IDS by the investor Baghbaan Marketing Pvt. Ltd, merely to make double addition as well as to raise high demands. 3.6 The Id. A.R. further submitted that identical issue of Share capital and share premium is also decided by my predecessor in this case in Appeals of AYs 2011-12 and 2012-13 in Appeal No. CIT(A)-6/379&378 / 2016-17 vide order dated 01.02.2018. In these orders additions u/s. 68 were deleted as the share capital and share premium were offered by investor company in IDS- 2016, where it is held that: "Thus, from the above, it is seen that identity of the creditors i.e. Westwell and Yamini who have invested in share capital and share premium in the appellant company is established. Further, since both the investors have declared share capital and share premium invested in the appellant company as part of undisclosed income declared under IDS, 2016 and paid due taxes on the same, creditworthiness of the investors and genuineness of transactions is established. Hence, all the three ingredients of section 68 of the Act are satisfied i.e. identity and creditworthiness of investors and genuineness of transaction are established. Hence the AO was not justified in treating share capital and share premium of Rs.21,00,44,500/- received from Westwell and Yamini as unexplained cash credit u/s 68 of the Act. Accordingly, addition of Rs. 27,00,44,500/- is deleted. This ground of appeal is allowed." 3.7 I have carefully gone through the facts mentioned in the assessment order, remand report of the AO, the submission and rejoinder of the appellant on the addition of share capital and share premium of Rs. 5,74,50,000/- received from Baghbaan Marketing Pvt. Ltd. From assessment order and submission, it is seen that share capital and share premium of GTC Oilfield Services Pvt. Ltd is offered by investor Baghbaan Marketing Pvt. Ltd as its undisclosed income under IDS-2016. The A.O. has not accepted the IDS stating that assessee failed to produce concrete and material evidence in order to prove nexus of income and its application and the assessee failed to establish the genuineness of the transactions and creditworthiness of the depositor. 3.7.1 From submissions of appellant, before the undersigned and in assessment proceedings following facts and findings emerges:- (i) Baghbaan Marketing Pvt. Ltd offered its undisclosed income under Income Declaration Scheme (IDS), 2016 and demonstrated that the undisclosed income is invested in Share capital and share premium of appellant company. IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 9 (ii) In assessment proceedings, the appellant filed copies of IDS-2016 Form no. 1 and annexure of Baghbaan Marketing Pvt Ltd showing undisclosed income offered in IDS, which was invested in share capital and share premium of GTC Oilfield Services Pvt. Ltd. (iii) Baghbaan Marketing Pvt. Ltd, investor filed IDS Forms with The Pr. Commissioner of Income Tax (Central), Ahmedabad, who is also Pr. CIT of the appellant, as the appellant is assessed by Dy. CIT, Central Circle 1(4), Ahmedabad. (iv) The Pr. Commissioner of Income Tax (Central), Ahmedabad issued Form no. 2 (for payment of taxes) to investor Baghbaan Marketing Pvt. Ltd on 14-10-2016, acknowledging declaration in respect of IDS-2016, after completion of formalities, including confirmation from AO that no proceedings are pending in the case of Baghbaan Marketing Pvt. Ltd. (v) The Pr. Commissioner of Income Tax (Central), Ahmedabad issued Certificate of Declaration under IDS-2016 in Form no. 4 to investor Baghbaan Marketing Pvt. Ltd on 14-09-2017, which is issued when payment of taxes, surcharge and penalty are made by applicant. (vi) The appellant furnished IDS Forms/Declaration in Annexure-B to Form no.1 of IDS-2016 of investor Baghbaan Marketing Pvt. Ltd, which demonstrates that undisclosed income has been investment in share capital and share premium in GTC Oilfield Services Pvt. Ltd. In this connection the appellant pointed out instruction issued by CBDT in connection to IDS- 2016, where in Instruction No. 12 of 2016 dated 11-11-2016 in Para no. 3, it is mentioned that: 3. Queries have also been received as to how an Assessing Officer should address the cases where an assessee claims that the issue under pending assessment proceeding is covered by declaration made under the Scheme. In this context, it is clarified that in cases where the assessee claims that an issue under an assessment proceeding has nexus with the declaration filed under the Scheme, the Assessing Officer may obtain a written undertaking along with relevant documentary evidence from the assessee about the issues and quantum of amount covered under the declaration having bearing on the pending assessment proceeding. (vii) Thus, the appellant has demonstrated direct nexus between income disclosed under IDS-2016 by investor Baghbaan Marketing Pvt Ltd and its application in share capital and share premium of appellant company GTC Oilfield Services Pvt. Ltd. (viii) The A. R. of the appellant vehemently argued that the vary purpose of IDS-2016 was to offer undisclosed income or unaccounted investment of past IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 10 years, which were not shown to income tax department and no taxes were paid. In this case, the investor has made declaration under IDS-2016 and shown the investment in share capital and share premium, which establish the genuineness of the transaction and the creditworthiness of the depositor. 3.7.2 The A.R. of the appellant further vehemently argued that in view of the Circulars issued by CBDT on Income Declaration Scheme 2016, the Income Tax Department cannot make any enquiry in respect of sources of income declared in IDS or investment in movable or immovable property declared in a valid declaration as per provisions of the IDS Scheme. The A.R, pointed out following Questions and Answers from various circulars issued by CBDT in connection to IDS-2016, the same are reproduced hereunder:- (a) The CBDT in Circular no. 25 dated 30-06-2016 in Q. No. 5 Clarified that: Question No. 5: Where a valid declaration is made after making valuation as per the provisions of the Scheme read with IDS Rules and tax, surcharge & penalty as specified in the Scheme have been paid, whether the department will make any enquiry in respect of sources of income, payment of tax, surcharge and penalty? Answer: No. (b) The CBDT in Circular no. 27 dated 14-07-2016 in Q. No. 6 Clarified that: Question No. 6: With reference to question No. 5 issued vide Circular No. 25 of 2016, wherein it has been stated that the department will not make any enquiry in respect of sources of income, payment of tax, surcharge and penalty, it may be clarified that whether the payment under the Scheme can be made out of undisclosed income without including the same in the income declared, thereby bringing down the effective rate of tax, surcharge and penalty payable under the Scheme to around 31 percent? Answer: It is clarified that the intent of the clarification issued vide question No. 5 of Circular No. 25 of 2016 was limited to conduct of enquiry by the Department..................... (c) The CBDT in Circular no. 29 dated 18-08-2016 in Q. No. 1 Clarified that: Question No. 1: In certain cases, the undisclosed income might be reflected in creditors or other liability which may be fictitious. Whether in such cases, the assessee can disclose only such fictitious liability, as it may not be possible to link it to any specific asset or investment? IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 11 Answer: In a situation where loans, creditors, advances received, share capital, payables etc. are disclosed in the audited balance sheet but are fictitious in nature, and such liabilities cannot be directly linked to acquisition of a particular asset in the balance sheet, then such fictitious liabilities can be disclosed under the Scheme as such without linking the same with the investment in any specific asset...................... (d) The CBDT in Circular no. 32 dated 01-09-2016 in Para 2 Clarified that: 2. ..................... any document is found as a proof for having already filed a declaration under the Scheme, including acknowledgement issued by the Income-tax Department for having filed a declaration, no enquiry would be made by the Income-tax Department in respect of sources of undisclosed income or investment in movable or immovable property declared in a valid declaration made in accordance with the provisions of the Scheme. 3.7.3 Considering above facts of the case and Circulars of CBDT in connection to Income Declaration Scheme 2016 and appellate orders of my predecessor CIT(A)-6, in Appeals of AYs 2011-12 and 2012-13 in Appeal No. CIT(A)-6/379&378 / 2016-17 vide order dated 01.02.2018, I am of considered view that Baghbaan Marketing Pvt. Ltd has made declaration under IDS-2016 and offered undisclosed income as invested in share capital and share premium of Rs. 5,74,50,000/- in M/s. GTC Oilfield Services Pvt. Ltd. There is no ambiguity of nexus between income declared under IDS- 2016 and its application in share capital and share premium in appellant company. The Pr. Commissioner of Income Tax (Central), Ahmedabad has issued IDS Certificate in Form no. 4 to Baghbaan Marketing Pvt Ltd., who is also Pr. CIT of the appellant company. Thus, from the above facts and evidences, the identity of creditors i.e. Baghbaan Marketing Pvt. Ltd, who has invested in share capital and share premium in appellant company is established. The investment in share capital and share premium is from income declared under IDS-2016 and due taxes are paid by applicant, which proves creditworthiness of investor and genuineness of transaction. The A.O. of the appellant and the AO for the company which has declared the IDS-2016 applicant are one, the facts and evidences were placed before him in assessment proceedings, hence, the A.O. was not justified in making addition of share capital and share premium of Rs.5,74,50,000/-. Accordingly, addition of Rs.5,74,50,000/- made u/s. 68 of the I.T. Act is deleted. This ground of appeal is allowed.” 9. The learned CIT(A) also deleted the additions made by the Assessing Officer in the case of all the three assessee-companies for the years under IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 12 consideration on account of unexplained expenditure under Section 69C of the Act being the commission allegedly paid by the assessee-companies @ 0.25% for obtaining accommodation entries in the form of share capital and share premium for the following reasons which are similar in all cases:- “4.5. I have carefully gone through the facts mentioned in the assessment order and remind report of the AO and the submission and rejoinder of the appellant. The Id. A. R. further submitted that identical issue of commission payments u/s.69C, treated by AO as unexplained expenditure is also decided by my predecessor in this case in Appeals of AYs 2011-12 and 2012-13 in Appeal No. CIT(A)-6/379&378/2016-17 vide order dated 01.02.2018. In these orders additions u/s.69C were deleted as the same was offered by Investor Company in IDS-2016, where it is held that: "In Para 7.3 above, in respect of share capital and share premium of Rs. 21,00,44,500/-, it has been held that identity and creditworthiness of investor from whom the share capital and share premium has been received and genuineness of transaction are established. Accordingly, addition on account of treating share capital and share premium of Rs.21,00,44,500/- as unexplained cash credit has been deleted. In view of this there is no justification for addition of Rs.12,60,267/- on account of commission paid for taking accommodation entries for share capital and share premium of Rs. 21,00,44, 500/-. Accordingly, addition of Rs.12,60,267/- is deleted. This ground of appeal is allowed." 4.7 I have gone through the facts of the case, findings of Assessing Officer in assessment order and comments in remand report and submissions of the appellant. The A.O. has made addition of Rs. 3,44,700/- commission as unexplained expenditure u/s. 69C of the I.T. Act. Such commission is estimated @0.6% for obtaining entries of share capital /premium. The facts have been discussed in detail in Ground no. 3 above the share capital / premium received by the appellant from Baghbaan Marketing Pvt Ltd. The share capital / premium and commission is declared by investor Baghbaan Marketing Pvt. Ltd in IDS-2016. Share capital and share premium has been allowed in the above ground of appeal. This ground of appeal being consequential in nature and covered under IDS-2016. Accordingly, addition of Rs. 3,44,700/- made u/s. 69C of the I.T. Act is deleted. This ground of appeal is allowed.” 10. Aggrieved by the orders of the learned CIT(A), the Revenue has preferred these appeals before the Tribunal. IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 13 11. In Ground Nos. 1 to 4 raised by the Revenue which are identical in all these appeals except the variation of amounts in dispute, the common issue involved is relating to the deletion by the learned CIT(A) of the additions made by the Assessing Officer under Section 68 of the Act by treating the share capital and share premium amounts as unexplained cash credit while the common issue involved in Ground No.5 relates to the deletion by the learned CIT(A) of the additions made by the Assessing Officer under Section 69C of the Act on account of commission allegedly paid by the assessee for obtaining accommodation entries in the form of share capital and share premium by treating the same as unexplained expenditure which is mainly consequential to the main issue raised in Ground Nos. 1 to 4. 12. We have heard the arguments of both the sides and also perused the relevant material available on record. The learned Counsel for the assessee, at the outset, has submitted that both the common issues involved in these appeals of the Revenue are squarely covered by the decision of this Tribunal rendered in one of the cases of the assessees namely M/s. GTC Oilfield Services Pvt. Ltd. for AYs 2011-12 and 2012-13 rendered vide its common order dated 31.03.2022 passed in IT(SS)A No. 115-116/Ahd/2018. He has submitted that similar additions under Section 68 of the Act on account of unexplained share capital and share premium amounts and under Section 69C on account of unexplained expenditure incurred on payment of commission for allegedly obtaining accommodation entries were made by the Assessing Officer in the case of M/s. GTC Oilfield Services Pvt. Ltd. for the intervening years, i.e. AYs 2011-12 & 2012-13, involving similar facts and circumstances. He has submitted that the said additions made by the Assessing Officer, however, were deleted by the learned CIT(A) and the order of the learned CIT(A) giving relief to the assessee on both the issues were upheld by the Tribunal vide order dated 31.03.2022. He has also IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 14 placed on record a copy of the said order of the Tribunal and the perusal of the same shows that both the issues relating to the deletion by the learned CIT(A) of the additions made by the Assessing Officer under Section 68 and 69C of the Act which are similar to the commons issues involved in all these appeals of the Revenue have been decided by the Tribunal in favour of the assessee for the following reasons given in paragraph Nos. 11 to 11.4 of its order:- “11. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly the assessee has received share capital and premium on share capital for Rs. 2,06,00,000/- from two companies namely AMPL and WEPL which has been held by the AO as bogus transaction and added to the total income under section 68 of the Act. However, the same was deleted by the learned CIT(A) by holding that all the three ingredients of section 68 of the Act being identity, genuineness of transaction and credit worthiness of the parties has been established by the fact that the investor companies have made declaration of huge undisclosed income under Income Declaration Scheme 2016 brought by the Finance Act 2016 and paid due taxes on such income. 11.1 The case of the Revenue before us is that the burden of the assessee under section 68 of the Act does not get absolved by the fact that the creditors have paid taxes on undisclosed income in their hands. It is the duty of the assessee to prove the identity, genuineness of the transaction and creditworthiness of the creditors/ parties. 11.2 Now the controversy arises for our adjudication to see whether the assessee has furnished the necessary details with respect to the identity, creditworthiness of the parties and genuineness of the transactions in the given facts and circumstances. There is no ambiguity to the fact that companies namely YMPL and WEPL being the investor in the assessee company have opted Income Disclosure Scheme 2016. The company namely WMPL has disclosed an income of Rs.39,05,00,000 under the Income Disclosure Scheme 2016 in different assessment years which is evident from page 20 of the paper book. Likewise, the company namely YMPL has also made the disclosure of the income under the income disclosure scheme 2016. As such the company namely YMPL has disclosed the investment in the shares of different companies as application of its income where the name of the assessee was also appearing. This fact can be verified from page 23 of the paper book. The amount shown by the assessee as share capital in its books of account is duly matching with the application of the undisclosed income IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 15 offered by YMPL. Identical facts are also there with respect to the other companies namely WEPL. 11.3 Thus the amount of share capital received by the assessee from the companies namely YMPL and WEPL and the brokerage income has suffered the tax in the hands of relevant companies. Accordingly, it is not advisable to hold that the amount of share capital received by the assessee company from these companies is bogus in the given facts and circumstances. It is for the reason that the assessee has discharged its onus imposed under the provisions of section 68 of the Act. In other words, the identity and the creditworthiness of the parties cannot be doubted due to the fact that the assessee has received share capital in the form of tax paid money. At the time of hearing, the learned DR could not controvert the finding of the learned CIT-A. 11.4 In view of the above, there is no ambiguity to the fact that the amount disclosed by the companies namely YMPL and WEPL in the Income Disclosure Scheme 2016 as income was duly accepted by the Revenue and the concern parties have also paid the taxes thereon. In the declaration made by these companies for the income, the application of such income was shown by way of investment in the form of shares in the assessee company which was also accepted by the revenue. Thus it can be inferred that the amount of money received by the assessee from the companies namely YMPL and WEPL has already suffered to tax. Thus, if any addition is made in the hands of the company on account of unexplained cash credit under section 68 of the Act, would lead to the double addition which is unwanted under the provisions of law.” 13. In addition to the reasons given above, the Tribunal also relied on the decision of Hon’ble Gujarat High Court in the case of M.R. Shah Logistics Pvt. Ltd. Vs. DCIT, reported in 97 taxmann.com 211, to decide both the issues in favour of the assessee wherein after analyzing the Income Declaration Scheme of 2016, it was held by the Hon’ble jurisdictional High Court that when the same amount which the Assessing Officer wanted to tax in the hands of the assessee-company was already declared by other person as his income in the declaration filed under the Income Declaration Scheme 2016 and the said declaration was accepted by the competent authority pursuant to which entire amount of tax with surcharge and IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 16 penalty was paid by such person, any attempt on the part of the Assessing Officer to assess the same income in the hands of the assessee would amount to charging the same income twice. As noted by the Tribunal, the investor-companies in the said case had declared income under Income Declaration Scheme 2016 to the extent of investment made in the share capital and share premium of the assessee-company in AYs 2011-12 and 2012-13 and the application of such income was also declared clearly as investment made in the share capital and share premium of the assessee- company during the relevant years. The said declaration was accepted by the Revenue and tax on the income declared was also paid by the investor- companies in accordance with the scheme. Having regard to all these facts of the case, the Tribunal held that the identity and creditworthiness of the investor-companies as well as genuineness of the relevant transactions involving payment of share capital and share premium amounts was duly established and the additions made by the Assessing Officer under Section 68 of the Act by treating the share capital and share premium amounts as unexplained cash credit were not sustainable as rightly held by the learned CIT(A). 14. At the time of hearing before us, the learned Counsel for the assessee has emphasized that the facts involved in the present cases are materially similar to the facts involved in the case of M/s. GTC Oilfield Services Pvt. Ltd. for AYs 2011-12 and 2012-13 which are already decided by this Tribunal in favour of the assessee on both the issues under consideration. To support and substantiate this contention, he has furnished the relevant details in respect of declarations filed by the investor-companies under Income Declaration Scheme 2016 in tabular form in respect of each and every year as under:- IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 17 M/s GTC Oilfield Services P.Ltd. Ahmedabad AY 2009-10 Sr. No. Description Paper Book Page No. 1. Share Capital & Premium received from Baghban Marketing P.Ltd. of Rs.5,74,50,000/- 2. Baghban Marketing P.Ltd. disclosed Income under Income Declaration Scheme, 2016: - Form -1 - Declaration under IDS, 2016 7 - Year-wise disclosure shown in Annexure to Form-1 9&10 - Annexure-'B' of Form shows application of Income by way of Investment in shares of GTC Oilfield Services P.Ltd. of Rs.5,74,50,000 12 - Form-2 (Taxes payable) 13 - Form - 3 (Intimation of tax payment) 14 - Form -4 Issued by PCIT (Central), Ahmedabad for final acceptance of IDS, 2016 41 M/s GTC Oilfield Services P.Ltd. Ahmedabad AY: 2010-11 Sr. No. Description Paper Book Page No. Baghban Marketing P. Ltd. Yamini Marketing P.Ltd. 1. Share Capital & Premium received from Baghban Marketing P.Ltd. Rs. 2,96,29,500 Yamini Marketing P.Ltd. Rs. 19,99,500 Rs. 3,16,29,000 - — 2. Baghban Marketing P.Ltd. & Yamini Marketing P.Ltd. disclosed Income under Income Declaration Scheme, 2016: - Form -1 - Declaration under IDS, 2016 7 18 - Year-wise disclosure shown in Annexure to Form-1 9&10 20&21 - Annexure-'B' of Form shows application of Income by way of Investment in shares of GTC Oilfield Services P.Ltd.: Baghban Marketing P.Ltd. Rs. 2,96,29,500 Yamini Marketing P.Ltd. Rs. 19,99,500 Rs. 3,16,29,000 12 23 - Form-2 (Taxes payable) 13 24 - Form - 3 (Intimation of tax payment 14 25 - Form -4 Issued by PCIT (Central), Ahmedabad for final acceptance of IDS, 2016 41 43 IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 18 M/s GTC Oilfield Services P.Ltd. Ahmedabad AY : 2014-15 Sr. No. Description Paper Book Page No. 1. Share Capital and premium received from Westwell Exports P.Ltd. through its paper Company M/s Ambica Commodeal P Ltd. Rs.5,37,22,500/- 2. Westwell Exports disclosed income under Income Declaration Scheme, 2016 : - Form -1 - Declaration under IDS, 2016 29 - Year-wise disclosure shown in Annexure to Form-1 31 &32 Annexure-'B' of Form shows application of Income by way of Investment in shares of M/s GTC Oilfield Services P.Ltd. of Rs. 5,37,22,500/- 34 - Form-2 (Taxes payable) 35 - Form - 3 (Intimation of tax payment) 36 - Form -4 Issued by PCIT (Central), Ahmedabad for final acceptance of IDS, 2016 41 M/s GTC Oilfield Services P. Ltd. Ahmedabad A Y : 2015-16 Sr. No. Description Paper Book Page No. 1. Share capital and premium received from Westwell Exports P.Ltd. through its paper Company M/s Ambica Commodeal PLtd. Rs.3,01, 89,500/- 2. Westweil Exports P.Ltd. disclosed Income under income Declaration Scheme, 2016: - Form -1 - Declaration under IDS, 2016 29 - Year-wise disclosure shown in Annexure to Form-1 31-32 - Annexure-'B' of Form shows application of Income by way of Investment in shares of GTC Oilfield of Rs. 3,01,89,500/- 34 - Form-2 (Taxes payable) 35 - Form - 3 (Intimation of tax payment) 36 - Form -4 Issued by PCIT (Central), Ahmedabad for final acceptance of IDS, 2016 41 Globe Ecologistics P. Ltd. Ahmedabad AY : 2013-14 Sr. No. Description Paper Book Page No. 1. Share Capital and premium received from Yamini Marketing Pvt.Ltd. through its paper Company M/s Ambica Commodeal PLtd. Rs.12,05,75,000/- 2. Yamini Marketing disclosed income under Income Declaration Scheme, 2016 : - Form -1 - Declaration under IDS, 2016 17 IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 19 - Year-wise disclosure shown in Annexure to Form-1 19-20 - Annexure-'B' of Form shows application of Income by way of Investment in shares of Globe Ecologistics P. Ltd. of Rs. 12,05,75,000/- 22 - Form-2 (Taxes payable) 23 - Form - 3 (Intimation of tax payment) 24 - Form -4 Issued by PCIT (Central), Ahmedabad for final acceptance of IDS, 2016 29 M/s GTC Petrotech P. Ltd. Ahmedabad AY 2014-15 Sr. No. Description Paper Book Page No. 1. Share capital and premium received from Westwell Exports P.Ltd. through its paper Company M/s Ambica Commodeal PLtd. Rs.2,15,00,000/- 2. Westwell Exports disclosed income under Income Declaration Scheme, 2016 : - Form -1 - Declaration under IDS, 2016 63 PB-II - Year-wise disclosure shown in Annexure to Form-1 66 & 67 PB-II Annexure-'B' of Form shows application of Income by way of Investment in shares of GTC Petrotech P. Ltd. of Rs. 2,15,00,000/- 71- PB-II - Form-2 (Taxes payable) 4 -PB-I - Form -4 Issued by PCIT (Central), Ahmedabad for final acceptance of IDS, 2016 9-PB-l Globe Ecologistics P. Ltd. Ahmedabad AY : 2011-12 SN Description Paper Book Page No. West well Exports P.Ltd. Yamini Marketing P.Ltd. 1. Share capital and premium received from : Westwell Export P. Ltd. 7,78,00,000 Yamini Marketing P. Ltd. 3,95,00,000 11,73,00,000 — — 2. Westwell Exports and Yamini Marketing disclosed income under Income Declaration Scheme, 2016 : - Form -1 - Declaration under IDS, 2016 6 17 - Year-wise disclosure shown in Annexure to Form-1 8-9 19-20 IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 20 - Annexure-'B' of Form shows application of Income by way of Investment in shares of Globe cologistics P. Ltd: Westwell Export P. Ltd. 7,78,00,000 Yamini Marketing P.Ltd. 3,95,00,000 11,73,00,000 11 22 - Form-2 (Taxes payable) 12 23 - Form - 3 (Intimation of tax payment) 13 24 - Form -4 Issued by PCIT (Central), Ahmedabad for final acceptance of IDS, 2016 29 32 Globe Ecologistics P. Ltd. Ahmedabad AY : 2012-13 SN Description Paper Book Page No. West well Exports P.Ltd. Yamini Marketing P.Ltd. 1. Share capital and premium received from : Westwell Export P. Ltd. 10,63,00,000 Yamini Marketinq P.Ltd. 5,96,50,000 16,59,50,000 2. Westwell Exports and Yamini Marketing disclosed income under Income Declaration Scheme, 2016 : - Form -1 - Declaration under IDS, 2016 6 17 - Year-wise disclosure shown in Annexure to Form-1 8-9 19-20 - Annexure-'B' of Form shows application of Income by way of Investment in shares of Globe Ecologistics P.Ltd. Westwell Export P.Ltd. 10,63,00,000 Yamini Marketinq P.Ltd. 5,96,50,000 16,59,50,000 11 22 - Form-2 (Taxes payable) 12 23 - Form -3 (Intimation of tax payment) 13 24 - Form -4 Issued by PCIT (Central), Ahmedabad for final acceptance of IDS, 2016 29 32 15. The above details furnished by the learned Counsel for the assessee which are duly supported by the relevant documentary evidence placed in the paper-books filed by the assessee-companies make it evidently clear that all the amounts in question invested in the share capital of the present assessees in the form of share capital and share premium either directly or IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 21 indirectly through some paper companies in all the years under consideration were duly declared by the concerned investor-companies as their income in their respective declarations filed under Income Declaration Scheme 2016 and even the application of the said income as investment in share capital of the assessee-companies was also clearly disclosed in the said declarations. It is also clear that the said declarations were accepted by the competent authority and even the taxes payable in accordance with the scheme on the income declared were duly paid by the investor-companies. Even the commission allegedly paid @ 0.25% for obtaining accommodation entries in the form of share capital and share premium was also declared by the investor-companies as their income in the declarations filed under Income Declaration Scheme 2016 for all the years under consideration. At the time of hearing before the Tribunal even the learned Departmental Representative has not been able to dispute this position. He, however, has contended that the nexus between the income declared by the investor- companies under the Income Declaration Scheme 2016 and the investments in question made in the share capital of the assessee-companies was not established. We are unable to accept this contention of the learned Departmental Representative. As already noted, the application of income declared under the Income Declaration Scheme 2016 was clearly stated by the investor-companies in their respective declarations as the investment in questions made by them either directly or through paper companies in the share capital of the assessee-companies in all the year under consideration and the said declarations having been accepted by the Department, it cannot be argued by the learned Departmental Representative that the nexus between the income declared under the scheme and the corresponding investment made in the share capital of the assessee-companies is not established. Having regard to all these facts involved in the present cases which are materially similar to the facts involved in the case of M/s. GTC IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 22 Oilfield Services Pvt. Ltd. for AYs 2011-12 and 2012-13, we find ourselves in agreement with the learned Counsel for the assessee that both the issues involved in the present cases relating to the deletion by the learned CIT(A) of the additions made by the Assessing Officer under Section 68 of the Act on account of unexplained cash credit representing share capital and share premium and under Section 69C of the Act on account of unexplained expenditure allegedly incurred for obtaining accommodation entries are squarely covered in favour of the assessee by the order of this Tribunal dated 31.03.2022 passed in the case of M/s. GTC Oilfield Services Pvt. Ltd. for AYs 2011-12 and 2012-13. Respectfully following the said decision of the Co-ordinate Bench of this Tribunal as well as decision of Hon’ble Gujarat High Court in the case of M.R. Shah Logistics Pvt. Ltd. (supra), we find no infirmity in the impugned orders of the learned CIT(A) deleting the additions made by the Assessing Officer under Section 68 of the Act on account of unexplained cash credit representing share capital and share premium and under Section 69C of the Act on account of unexplained expenditure allegedly incurred for obtaining accommodation entries in all the years under consideration as the same clearly amounted to charging the same income twice. We accordingly uphold the said orders on both the issues under consideration and dismiss these appeals filed by the Revenue. 16. In the result, all the 8 appeals filed by the Revenue are dismissed. Order pronounced in the open Court on 21 st October, 2022 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad, Dated 21/10/2022 *Bt IT(SS)A Nos. 314 to 317, 971 of 2019 & 111, 117, 118 of 2018 Assessees : GTC Oilfields, Globe Ecologistics & GTC Petrotech AYs : 2009-10 to 2015-16 23 आदे े /Copy of the Order forwarded to : 1. ! / The Appellant 2. "# ! / The Respondent. 3. $%$&' आ# आ# ( / Concerned CIT 4. आ# आ# ( ) (/ The CIT(A)- 5. + , # &' ,आ# # &' /DR,ITAT, Ahmedabad, 6. , ./ 0 /Guard file. आदे / BY ORDER, TRUE COPY ह # $ज (Asstt. Registrar) आ# # &' ITAT, Ahmedabad 1. Date of dictation- ...19/20.10.2022 – six pages dictation pad attached...... 2. Date on which the typed draft is placed before the Dictating Member ...19/20.10.2022 ............ Other member....20.10.2022..... .... 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ......20.10.2022............ 4. Date on which the fair order is placed before the Dictating Member for Pronouncement ..21.10.2022... 5. Date on which the file goes to the Bench Clerk...21.10.2022..... ...... 6. Date on which the file goes to the Head Clerk.................................. 7. The date on which the file goes to the Assistant Registrar for signature on the order..................... 8. Date of Despatch of the Order..................