ACIT, New Delhi v. M/s. Elegant Security Services Pvt. Ltd., New Delhi

ITA 6173/DEL/2013 | 2008-2009
Pronouncement Date: 30-11-2017 | Result: Dismissed

Appeal Details

RSA Number 617320114 RSA 2013
Assessee PAN AABCE3756D
Bench Delhi
Appeal Number ITA 6173/DEL/2013
Duration Of Justice 4 year(s) 12 day(s)
Appellant ACIT, New Delhi
Respondent M/s. Elegant Security Services Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-11-2017
Date Of Final Hearing 21-06-2017
Next Hearing Date 21-06-2017
First Hearing Date 21-06-2017
Assessment Year 2008-2009
Appeal Filed On 18-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B : DELHI BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI L.P. SAHU ACCOUNTANT MEMBER ITA.NO.6173/DEL./2013 ASSESSMENT YEAR 2008-2009 THE ACIT CENTRAL CIRCLE-13 ROOM NO.332 ARA CENTRE JHANDEWALAN EXTN. NEW DELHI. VS. M/S. ELEGANT SECURITY SERVICES PVT. LTD. 315 3 RD FLOOR E- BLOCK INTERNATIONAL TRADE TOWER NEHRU PLACE NEW DELHI. PAN AABCE3756D (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI ANIL KUMAR SHARMA SR. D.R. FOR ASSESSEE : SHRI ASHWANI KUMAR C.A. DATE OF HEARING : 16.11.2017 DATE OF PRONOUNCEMENT : 30.11.2017 ORDER PER BHAVNESH SAINI J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-1 NEW DELHI DATED 19 TH SEPTEMBER 2013 FOR THE A.Y. 2008-2009 CHALLENGING THE DELETION OF ADD ITION OF RS.9 CRORES UNDER SECTION 68 OF THE I.T. ACT 1961. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT SEARCH SEIZURE AND SURVEY OPERATIONS UNDER SECTIONS 132 AND 133A OF TH E ACT WAS CARRIED-OUT IN THE BHUSHAN STEEL GROUP OF CASES ON 3 RD MARCH 2010. 2 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. THE CASE OF THE ASSESSEE-COMPANY WAS COVERED UNDER THE SURVEY OPERATION UNDER SECTION 133A OF THE I.T. ACT. THE C ASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE I.T. ACT BY R ECORDING THE REASONS OF THE SAME. THE ASSESSEE WAS PROVIDED COPY OF THE REASONS WHO FILED ITS OBJECTIONS FOR REOPENING OF THE ASSES SMENT WHICH HAVE BEEN DECIDED SEPARATELY. THE A.O. ON PERUSAL OF THE DETAILS SUBMITTED NOTICED THAT ASSESSEE-COMPANY HAS RECEIV ED SHARE CAPITAL AND SHARE PREMIUM FROM VARIOUS COMPANIES SITUATED A T KOLKATA AND MUMBAI OF RS.9 CRORES. THE DETAILS OF THE SAME ARE NOTED IN PARA-3 OF THE ASSESSMENT ORDER AND PAGE-4 OF THIS ORDER WH ICH ARE 10 INVESTOR COMPANIES FROM TWO PLACES MENTIONED ABOVE. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THE AMOUNT RECE IVED AND EVIDENCE IN RESPECT OF IDENTITY AND CREDITWORTHINESS OF THE INVESTORS AND ALSO THE GENUINENESS OF THE TRANSACTION. IN RESPONSE TO THE SAME ASSESSEE SUBMITTED COPIES OF THE BANK ACCOUNTS CONFIRMATION S AND INCOME TAX RETURNS ACKNOWLEDGMENT FOR ALL THE INVESTORS. T HE A.O. NOTED FROM THEM THAT THEY HAVE MEAGRE RETURNED INCOME. IN ORDER TO VERIFY THE GENUINENESS OF THE ABOVE 10 PARTIES/INVESTORS COMMISSION UNDER SECTION 131 WERE SENT TO MUMBAI AND KOLKATA. IN RESPONSE REPORT OF THE O/O. ADDL. CIT RANGE-10(2) MUMBAI A ND REPORT OF O/O. 3 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. ADIT (INV.) WING-III(3) KOLKATA WERE RECEIVED. THE REPORT IS REPRODUCED IN THE ASSESSMENT ORDER IN WHICH IT WAS POINTED OUT THAT INSPECTOR HAVE VISITED THE PLACE WHERE SOME PARTIES RESPONDED BUT SOME PARTIES DID NOT FIND AT THE PREMISES. THE A.O. THEREFORE NOTED THAT THE EXISTENCE OF THE INVESTORS HAVE NOT BEEN P ROVED. THE A.O. ON THE BASIS OF THE DETAILS SUBMITTED AND ENQUIRIES CO NDUCTED THROUGH COMMISSION OBSERVED THAT ASSESSEE HAS NOT ESTABLISH ED THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS. INVESTORS HA VE SHOWN NOMINAL INCOME. CREDITWORTHINESS OF THE INVESTORS HAVE NOT BEEN PROVED. THE GENUINENESS OF THE TRANSACTION IS ALSO IN DOUBT AS THE INVESTORS HAVE NOT ENCLOSED THE BANK STATEMENT SHOWING THE SOURCE OF FUND FOR SHARE APPLICATION MONEY. THE A.O. ACCORDINGLY MADE ADDIT ION OF RS.9 CRORES AS UNEXPLAINED SHARE CAPITAL/SHARE PREMIUM. THIS ADDITION WAS CHALLENGED BEFORE THE LD. CIT(A). THE ASSESSEE ALSO CHALLENGED THE ORDER OF THE A.O. BECAUSE THE ADDITION IS BASED ON AN INVESTIGATION AND ENQUIRY CONDUCTED THROUGH COMMISS ION RESULT OF WHICH WERE NEVER CONFRONTED TO THE ASSESSEE-COMPANY AT ANY STAGE OF THE ASSESSMENT AND THEREBY PRINCIPLES OF NATURA L JUSTICE HAVE BEEN VIOLATED. THE SUBMISSIONS OF THE ASSESSEE ON M ERITS IS 4 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. REPRODUCED BY THE LD. CIT(A) IN THE IMPUGNED ORDER WHICH READS AS UNDER : THE SUBMISSIONS OF THE APPELLANT IN THIS REGARD AR E AS UNDER: (1) BY WAY OF A BRIEF INTRODUCTION IT IS SUBMITT ED THAT THE APPELLANT COMPANY HAD RAISED MONEY AMOUNTING TO RS.9 00 00 000/- THRO UGH SHARE CAPITAL DURING THE FINANCIAL YEAR 2007-08 FROM VARIOUS PARTIES SITUATE D AT MUMBAI AND KOLKATA. THE DETAILS OF THE PARTIES FROM WHOM SHARE CAPITAL AND SHARE PREMIUM HAD BEEN RECEIVED ARE AS UNDER:- SL. NO. NAME OF THE INVESTOR COMPANY ADDRESS AMOUNT (SHARE CAPITAL /PREMIUM) (IN RS ) 1. SUMITRA INVESTMENT AND FINANCE P LTD. B-607 PUSHPAK APTT. GHARTAN PADA WESTERN EXPRESS HIGHWAY DAHISAR(E) MUMBAI-400068 1 02 00 000/- 2. OSHIN INVESTMENT AND FINANCE P LTD B-501 PUSHPAK APTT. GHARTAN PADA WESTERN EXPRESS HIGHWAY DAHISAR(E) MUMBAI -400068 99 00 000/- ALKA DIAMOND INDUSTRIES LTD. 233 PANEHRATNA OPERA HOUSE MUMBAI- 400004 93 00 000/- 4. POONAM CORPORATION LTD. 137 DADHISETH AGRILANE 2 ND FLOOR OFFICE NO 20 KALBADEVI MUMBAI- 400020 96 00 000/- 5. VIBHUTI MULTITRADE PVT LTD 14. POPATWADI KALBADEVI ROAD 1 ST FLOOR MUMBAI-400002 60 00 000/- 6. YASH V JEWELS LTD A-43 FLAPPY HOME APT SAIHBABA NAGAR BORIVALI(W) MUMBAI- 400092 1 05 00 000/- 7. NEW OUTLOOK SECURITIES LTD AMRITDHAM FLAT NO 202 P O DANESH SEKH LANE NITYANAND NAGAR BAKUTALA HOWRAH- 711109 96 00.000/- 8. JOLLY MULTITRADE P LTD 14 POPATWADI KALBADEVI ROAD I ST FLOOR MUMBAI-400002 96 00 000/- 9. TWENTY FIRST CENTURY (INDIA) LTD 1 CROOKED LANE. 1 ST FLOR ROOM NO 107 KOLKATA-700069 93 00 000/- 10. KAPINDRA MULTITRADE PVT LTD 14 POPATWADI KALBADEVI ROAD 1 ST FLOOR MUMBAI-400002 60 00 000/- TOTAL 9 00 00 000/ - 5 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (2) THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT P ROCEEDINGS HAD DESIRED THE APPELLANT COMPANY TO FURNISH THE DETAILS OF THE AMOUNT RECEIVED AND EVIDENCE IN SUPPORT OF IDENTITY AND CREDITWORTHINESS OF THE PARTIES AND ALSO THE GENUINENESS OF THE TRANSACTION OF ALL THE PARTIES FROM WHOM THE SHARE CAPITAL AND SHARE PREMIUM HAD BEEN RECEIVED. IN RESPONSE THE APPELL ANT COMPANY VIDE LETTER DATED 13.08.2012 FILED WITH THE ASSESSING OFFICER COPIES OF BANK ACCOUNTS CONFIRMATION AND INCOME TAX RETURN ACKNOWLEDGEMENTS FROM ALL FEE PARTIES TO ESTABLISH THE IDENTITY GENUINENESS AND SOURCES OF TRANSACTION RE GARDING SHARE CAPITAL AND SHARE PREMIUM. THE ENTIRE AMOUNT HAD BEEN RECEIVED BY THE APPELLANT COMPANY THROUGH NORMAL BANKING CHANNELS BY ACCOUNT PAYEE CH EQUES/DEMAND DRAFTS. FURTHERMORE THE SAID CONFIRMATIONS ALSO CLEARLY RE VEAL THE SOURCE OF FUNDS PARTICULARS OF THE BANK ACCOUNT THROUGH WHICH PAYME NT HAS BEEN RECEIVED AND THE INCOME- TAX PARTICULARS WHICH GO ON TO ESTABLISH TH E IDENTITY AND CREDITWORTHINESS OF THE RESPECTIVE SHARE APPLICANTS AUTHORITATIVELY AND CONCLUSIVELY. (3) ON THE BASIS OF THE DOCUMENTS/DETAILS SUBMITTED TH E LEARNED ASSESSING OFFICER HAS SUMMARIZED AS FOLLOWS:- IN ORDER TO FURTHER VERIFY THE GENUINENESS OF ALL T HE PARTIES COMMISSIONS U/S 131 WERE SENT BY THE LEARNED ASSESS ING OFFICER TO THE RESPECTIVE INVESTIGATION AGENCIES IN MUMBAI AND KOL KATA. IN RESPONSE TO WHICH REPORTS WERE RECEIVED FROM THE OFFICE OF ADDL CIT RANGE-10(2) MUMBAI AND ASSISTANT DIRECTOR OF INCOME TAX (INV) U NIT-III(3) KOLKATA. THE SL. NO O. NAME OF THE SHARE HOLDER RETURNED INCOME ASSESSMENT YEAR 1 SUMITRA INVESTMENT AND FINANCE F LTD RS. 5 560/ - 2008 - 09 2. OSHIN INVESTMENT AND FINANCE P LTD RS. 26 496/ - 2008 - 09 3. ALKA DIAMOND INDUSTRIES LTD RS. 4 62 300/ - 2008 - 09 4. POONAM CORPORATION LTD - NIL - 2006 - 07 5. VIBHUTI MULTITRADE PVT LTD RS. 6 680/ - 2007 - 08 6. YASH V JEWELS LTD RS.5.30 430/' - 2008 - 09 7. NEW OUTLOOK SECURITIES LTD RS. 2 310/ - 2008 - 09 8. JOLLY MULTITRADE P LTD RS. 5 2807 - 2007 - 08 9. TWENTY FIRST CENTURY (INDIA) LTD - NIL - 2008 - 09 10. KAPINDRA MULTITRADE PVT LTD RS. 10 820/ - 2009 - 10 6 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. ADDL. COMMISSIONER OF INCOME TAX RANGE 10(2) MUMB AI AND ASSISTANT DIRECTOR OF INCOME TAX (INV) UNIT-III(3) KOLKATA ALSO DEPUTED INSPECTORS OF INCOME TAX TO SERVE THE SUMMONS AND CONDUCT FIELD ENQUIRIES. THE RESULT S OF THE SAID ENQUIRIES ARE AS FOLLOWS:- REPORT FROM MUMBAI : S.NO. NAME OF THE SHAREHOLDER REPORT AS RECEIVED IN RESPO NSE TO COMMISSION FROM MUMBAI. 1. SUMITRA INVESTMENT AND FINANCE P. LTD. THE ADDRESS IS RESIDENTIAL ADDRESS OF R.N. CHATURVEDI. AS PER REPORT OF INSPECTOR SH AJAV KUMAR DATED 30.11.2011 NO SUCH PERSON HAS EVER RESIDED IN SUCH PREMISES. REPORT OF INSPECTOR SHRI AJAY KUMAR ENCLOSED WITH (ANNEXURE-19). 2. OSHIN INVESTMENT AND FINANCE P. LTD. THE ADDRESS IS RESIDENTIAL ADDRESS OF R.N. CHATURVEDI. AS PER REPORT OF INSPECTOR SH AJAY KUMAR DT 30.11.2011 NO SUCH PERSON HAS EVER RESIDED IN SUCH PREMISES. REPORT OF INSPECTOR SHRI AJAY KUMAR ENCLOSED WITH ANNEXURE. (ANNEXURE-19). 3. ALKA DIAMOND INDUSTRIES LTD. PARTY HAS RESPONDED TO THE SUMMONS AND THE DETAILS ARE ASSESSED. DETAILS ANNEXED AS EXHIBIT B. 4. POONAM CORPORATION LTD. THIS IS ALSO RESIDENTI AL ADDRESS AS REPORTED BY INSPECTOR IN HIS REPORT DETAILS OF THE SAME.30.11.2011. REPORT OF SHRI AJAY KUMAR INSPECTOR IS ENCLOSED AS ANNEXURE (ANNEXURE-19). 5. VIBHUTI MULTITRADE PVT. LTD. THE ADDRESS IS OF B L AGGARWAL AND OFFICE OF AMIT TEXTILES. AS PER REPORT OF INSPECTOR DT 30.1 1.2011 NO SUCH PERSON HAS EVER RESIDED IN SUCH PREMISES. REPORT OF SHRI AJAV KUMAR INSPECTOR IS ENCLOSED AS ANNEXURE (ANNEXURE- 19) 6. YASH V. JEWELS LTD. THE RESIDENTIAL BUILDING W AS DEMOLISHED FOR REDEVELOPMENT. NO BUILDING IS IN EXISTENCE. REPORT OF SHRI AJAY KUMAR INSPECTOR IS ENCLOSED AS ANNEXURE (ANNEXURE-19) 7. JOLLY MULTITRADE P. LTD. THE ADDRESS IS OF B L AGGARWAL AND OFFICE OF AMIT TEXTILES. AS PER REPORT OF INSPECTOR DT 30.11.2011 NO SUCH PERSON HAS EVER RESIDED IN SUCH PREMISES. REPORT OF SHRI AJAY KUMAR INSPECTOR IS ENCLOSED AS ANNEXURE) (ANNEXURE- 19) 7 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. 8. KAPINDRA MULTITRADE PVT. LTD. THE ADDRESS IS OF B L AGGARWAL AND OFFICE OF AMIT TEXTILES. AS PER REPORT OF INSPECTOR DT 30.11.2011 NO SUCH PERSON HAS EVER RESIDED IN SUCH PREMISES. REPORT OF SHRI AJAY KUMAR INSPECTOR IS ENCLOSED AS ANNEXURE) (ANNEXURE-19) REPORT FROM KOLKATA S.NO. NAME OF THE SHAREHOLDER REPORT AS RECEIVED IN RESPONSE TO COMMISSION FROM MUMBAI. 1. NEW OUTLOOK SECURITIES LTD. ASSESSEE MADE A SUBMISSION THROUGH DAK AND SUBMITTED THAT THE COMPANY HAS APPLIED FOR 32000 EQUITY SHARE OF RS 10/- OF M/S ELEGANT SECURITY SERVICES PVT LTD IN FY 2007-08 EACH AT A PREMIUM OF RS 290/- EACH. THE ASSESSEE HAS NOT GIVEN THE REASON FOR PAYING SUCH A HIGH PREMIUM. THE ASSESSEE HAS ENCLOSED BANK STATEMENT SHOWING PAYMENT WAS MADE BY CHEQUE NO 596608 DT FOR RS 69.00 000/- AND CHEQUE NO 596609 DT 29.08.2017 FOR RS 27 00 000/- DRAWN ON DEUTSCHE BANK. THE ASSESSEE HAS NOT ENCLOSED THE BANK STATEMENT SHOWING THE SOURCE OF FUND FOR SHARE APPLICATION MONEY. THE COMPANY HAS SHOWN INCOME OF RS.2 310/- FOR A.Y. 2008-09. 2. TWENTY FIRST CENTURY (INDIA) LTD. THE ASSESSEE HAD NOT SUBMITTED DOCUMENTS RELATED TO THE COMPANY. (5) ON THE BASIS OF THE SAID EXERCISE THE LEARNED ASS ESSING OFFICER HAS OBSERVED AND CONCLUDED AS FOLLOWS:- > THE IDENTITY AND THE CREDITWORTHINESS OF THE INVEST ORS ARE NOT ESTABLISHED AS ALL THE INVESTORS ARE SHOWING A NOMINAL INCOME. NEITHER THE INVESTOR COMPANY AND NOR THE ASSESSEE COMPANY HAS PRODUCED A NY PROOF TO SUBSTANTIATE THE CREDIT WORTHINESS OF THE INVESTORS (FOR EXAMPLE BALANCE SHEET OF THE INVESTOR COMPANY). 8 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. > THE GENUINENESS OF THE TRANSACTIONS IS ALSO IN DOU BT AS THE INVESTORS HAVE NOT ENCLOSED THE BANK STATEMENT SHOWING THE SO URCE OF FUND FOR SHARE APPLICATION MONEY. (6) THE LEARNED ASSESSING OFFICER HAS ACCORDINGLY HELD THAT THE CREDITWORTHINESS OF THE INVESTORS AND THE GENUINENE SS OF THE TRANSACTIONS IS IN DOUBT AND HAS ACCORDINGLY TREATED SHARE CAPIT AL AND SHARE PREMIUM AMOUNTING TO RS.9 00 00 000/- AS UNEXPLAINED AND AD DED THIS SAME TO THE TAXABLE INCOME OF THE APPELLANT COMPANY U/S 68 OF T HE INCOME -TAX ACT 1961. (7) THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT P ROCEEDINGS HAD DESIRED THE APPELLANT COMPANY TO FURNISH THE DETAIL S OF THE AMOUNT RECEIVED AND EVIDENCE IN SUPPORT OF IDENTITY AND CREDITWORTH INESS OF THE APPLICANTS AND ALSO THE GENUINENESS OF THE TRANSACTION OF ALL THE PARTIES SITUATED AT MUMBAI AND KOLKATA FROM WHOM THE SHARE CAPITAL AND SHARE PREMIUM HAD BEEN RECEIVED. IN RESPONSE THE APPELLANT COMPANY F ILED COPIES OF CONFIRMATIONS. INCOME TAX RETURN ACKNOWLEDGEMENTS A ND BANK ACCOUNTS FROM ALL THE PARTIES ESTABLISHING THE IDENTITY GEN UINENESS AND SOURCES OF TRANSACTION REGARDING SHARE CAPITAL AND SHARE PREMI UM WITH THE ASSESSING OFFICER. THE ENTIRE SHARE APPLICATION MONEY HAD BEE N RECEIVED BY THE APPELLANT COMPANY THROUGH NORMAL BANKING CHANNELS B Y ACCOUNT PAYEE CHEQUES/DEMAND DRAFTS. FURTHERMORE THE SAID CONFIR MATIONS ALSO CLEARLY REVEAL THE SOURCE OF FUNDS PARTICULARS OF THE BANK ACCOUNT THROUGH WHICH PAYMENT HAS BEEN RECEIVED AND THE INCOME-TAX PARTIC ULARS WHICH GO ON TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE VARIOUS PARTIES AUTHORITATIVELY AND CONCLUSIVELY. (8) AS A RESULT OF THE ABOVE DOCUMENTS BEING FILED BEFO RE THE LEARNED ASSESSING OFFICER IN RESPECT OF ALL THE PARTIES IN RESPECT OF WHICH NO CAUSE EXISTS AS TO RECOURSE TO THE PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT 1961 IN AS MUCH AS THE ONUS CAST ON THE APPELLANT C OMPANY VIS-A-VIS THE GENUINENESS OF THE TRANSACTION AND CREDIT WORTHINES S OF THE PARTIES HAS BEEN EFFECTIVELY AND COMPLETELY DISCHARGED. THE ACTION O F THE LEARNED ASSESSING OFFICER IS NOT ONLY AGAINST THE SPIRIT BUT ALSO LET TER OF THE PROVISIONS RELATING TO ESTABLISHING THE IDENTITY OF CASH CREDITORS AS E MBODIED IN THE INCOME TAX ACT 1961. INDEPENDENT INVESTIGATIONS FROM PARTIES OVER WHICH AN APPELLANT 9 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. COMPANY DOES NOT HAVE ANY CONTROL CANNOT BE USED TO FORM ANY CONCLUSION ADVERSE OF OTHERWISE IN RESPECT OF THE APPELLANT CO MPANY. AS SUCH THE SAID ADDITION IS NEITHER WARRANTED NOR JUSTIFIED OR SUST AINABLE ON THE FACTS OF THE CASE. (9) THE ABOVE FACTUAL STATEMENTS AND ARGUMENTS CAN BE FURTHER BUTTRESSED AND REINFORCED BY AN ANALYSIS OF THE REL EVANT LEGAL PROVISIONS AND LEGAL PRONOUNCEMENTS ON THE ISSUE. BEFORE PROCE EDING FURTHER WITH THE MATTER IT WOULD BE WORTHWHILE TO REPRODUCE THE PROV ISIONS OF S.68 OF THE INCOME TAX ACT 1961 WHICH READS AS FOLLOWS:- S.68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANAT ION OFFERED BY HIM IS NOT IN THE OPINION OF THE OFFICER SATISFACTORY 7 THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. (10) THE ABOVE SECTION ENJOINS UPON AN APPELLANT COMPANY THE DUTY TO ADEQUATELY SATISFACTORILY AND SUBSTANTIVELY EXPLAI N THE SOURCE OF ANY CASH CREDIT IN HIS BOOKS OF ACCOUNTS AND NO FURTHER. TO PUT IT DIFFERENTLY AN APPELLANT COMPANYS BURDEN OF PROOF WOULD STAND DIS CHARGED IF HE IS ABLE TO PROVE THE NATURE AND SOURCE OF THE CASH CREDIT R ECEIVED AND THUS HIS ONUS OF PROOF CANNOT EXTEND TO FAILURE TO PROVE THE SOUR CE OF THE PROOF WITH A VIEW TO ARRIVE AT THE ULTIMATE SOURCE OF FUNDS. AS LONG AS THE NATURE SOURCE AND IDENTITY OF THE INVESTOR IS ESTABLISHED NO FURTHER ONUS OF PROOF CAN BE ENJOINED ON IT. IN THE INSTANT CASE NO CASE CAN BE MADE OUT TO DOUBT THE GENUINENESS EXISTENCE OR IDENTITY OF THE INVESTORS AND AS SUCH NO CAUSE EXISTS FOR THE INVOCATION OF S. 68. (11) AN ANALYSIS OF THE PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT 1961 WOULD MAKE IT CLEAR THAT IN ORDER TO DISCHARGE THE ONUS THE ASSESSEE MUST PROVE THE FOLLOWING:- (I) IDENTITY OF THE CREDITOR; (II) CAPACITY OF THE CREDITOR TO ADVANCE MONEY; AND (III) GENUINENESS OF THE TRANSACTION. 10 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (12) THE QUESTION OF THE MANNER IN WHICH THE ONUS U/'S 68 HAS TO BE DISCHARGED IS TO BE LOOKED AT WITH DIFFERENT PERSPE CTIVES AND VARYING PARAMETERS IN EACH DIFFERENT CIRCUMSTANCE AND NO ST ANDARDS/GUIDELINES CAN BE LEAD OUT IN THIS REGARD. (13) IN THE INSTANT CASE THERE IS NO MATERIAL ON RECORD TO PROVE OR EVEN REMOTELY SUGGEST THAT THE SHARE APPLICATION MONEY R ECEIVED ACTUALLY EMANATED FOR THE APPELLANT COMPANY. IN FACT IT MAY BE REITERATED THAT THE SHARE APPLICATION MONEY WAS RECEIVED FROM INDEPENDE NT LEGALLY INCORPORATED COMPANIES THROUGH NORMAL AND REGULAR B ANKING CHANNELS WHICH FACT STANDS DULY CORROBORATED AND CONFIRMED B Y THE CONFIRMATIONS BANK STATEMENTS AND INCOME TAX RETURNS OF THE SHARE APPLICANTS DULY PLACED ON RECORD. IN FACT NO EVIDENCE DIRECT OR I NDIRECT CONCLUSIVE OR EVEN CIRCUMSTANTIAL EXISTS TO DOUBT IN ANY MANNER THE I DENTITY AND CREDIT WORTHINESS OF THE PARTIES AND GENUINENESS OF THE TR ANSACTIONS ENTERED INTO. (14) THE APPELLANT COMPANY HAS DISCHARGED ITS ONUS BY S ATISFACTORILY DEALING WITH ALL THE ISSUES IN RESPECT OF WHICH ONU S HAS BEEN CAST ON IT U/S 68 OF THE INCOME-TAX ACT. 1961 AS WOULD BE CLEAR FR OM THE FOLLOWING DISCUSSION:- (I) WITH RESPECT TO THE IDENTITY OF THE CREDITORS TH E NAMES ADDRESSES AND PANS OF THE ASSESSEE HAS BEEN DULY FURNISHED AND PROVIDED TO THE LD ASSESSING OFFICER DURING THE COURSE OF THE AS SESSMENT PROCEEDINGS AND NO ERROR OR SHORT COMING HAS EITHER BEEN DETERMINED OR POINTED OUT THEREIN SINCE ALL THE SHARE APPLICANT S ARE DULY IDENTIFIED WITH DULY ALLOTTED PANS WHICH ARE SUBSISTING IN THE R ECORD OF THE INCOME TAX DEPARTMENT. MOREOVER ALL THE SHARE APPLI CANTS ARE COMPANIES DULY INCORPORATED AFTER FOLLOWING THE PROC EDURE LAID OUT IN THE COMPANIES ACT 1956. THUS NO DOUBT EXISTS OR EV EN ARISES WITH RESPECT TO THE IDENTITY OF THE CREDITORS. (II) WITH RESPECT TO THE CAPACITY/CREDIT WORTHINESS OF T HE SHARE APPLICANTS TO ADVANCE MONEY AND THE GENUINENESS OF THE TRANSACTIO NS IT NEEDS TO BE UNDERSTOOD REITERATED AND RE-EMPHASIZED THAT THE E NTIRE TRANSACTION WAS CONSUMMATED THROUGH ACCOUNT PAYEE CHEQUES THROUGH R EGULAR BANKING CHANNELS WHICH FACT HAS NOT BEEN DISPUTED OR DENIED IN ANY MANNER. AS 11 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. SUCH GIVEN THE ENTIRE FACTUAL SITUATION OF THE CASE NO DOUBT ARISES AND REMAINS AS TO THE CAPACITY AND CREDIT WORTHINESS OF THE PARTIES AND GENUINENESS OF THE TRANSACTIONS. (15) IN THIS CONNECTION YOUR HONOURS ATTENTION IS ALSO INVITED TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF COMMISSIONER OF INCOME-TAX VS. STELLER INVESTMENTS LIMITED [(1991) 192 ITR 287 (DELHI)] WHEREIN IT HAS BEEN CLEARLY HELD THAT ANY INCREASED CAPITAL IS NOT ASSESSABLE IN THE HANDS OF THE COMPANY. THE RELEVAN T OBSERVATIONS OF THE LEARNED JUDGES ARE AS FOLLOWS:- IT IS EVIDENT THAT EVEN IF IT BE ASSUMED THAT THE S UBSCRIBERS TO THE INCREASED SHARE CAPITAL WERE NOT GENUINE NEVERTHELESS UNDER NO CIRCUMSTANCES CAN THE AMOUNT OF SHARE CAPITAL BE REGARDED AS UNDISCLO SED INCOME OF THE ASSESSEE. IT MAY BE THAT THERE ARE SOME BOGUS SHARE HOLDERS IN WHOSE NAMES SHARES HAD BEEN ISSUED AND THE MONEY MAY HAVE BEEN PROVIDED BY SOME OTHER PERSONS. IF THE ASSESSMENT OF THE PERSON S WHO ARE ALLEGED TO HAVE REALLY ADVANCED THE MONEY IS SOUGHT TO BE REOP ENED THAT WOULD HAVE MADE SOME SENSE BUT WE FAIL TO UNDERSTAND AS TO HOW THIS AMOUNT OF INCREASED SHARE CAPITAL CAN BE ASSESSED IN THE HAND S OF THE COMPANY ITSELF.' (16) SUBSEQUENT TO THE ABOVE AN APPEAL TILED BY THE DEP ARTMENT AGAINST THE JUDGMENT/OBSERVATIONS OF THE SUPREME COURT WAS ALSO DISMISSED AND THE HONBLE SUPREME COURT DID NOT FIND ANY REASON T O INTERFERE WITH THE ORDER OF THE HIGH COURT IN THE CASE OF CIT VS STELLER INV ESTMENT LTD [(2001) 251 ITR 263 (SC)]. AS SUCH THE OBSERVATIONS OF THE HONBLE DELHI HIGH COURT HAVE OBTAINED THE APPROVAL OF THEIR LORDSHIP OF THE SUPR EME COURT AND ACCORDINGLY ATTAINED JUDICIAL FINALITY AND STAMP OF APPROVAL. (17) IN ADDITION YOUR HONOR'S KIND ATTENTION IS ALSO IN VITED TO THE FOLLOWING JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF COM MISSIONER OF INCOME TAX V LOVELY EXPORTS PVT LTD [(2008) 299 ITR 268 (DELHI )] HAS HELD AS FOLLOWS:- IN THE CASE OF A COMPANY THE FOLLOWING ARE THE PROP OSITIONS OF LAW UNDER SECTION 68. THE ASSESSEE HAS TO PRIMA FACIE PROVE ( 1) THE IDENTITY OF THE CREDITOR/ SUBSCRIBER; (2) THE GENUINENESS OF THE TR ANSACTION NAMELY WHETHER IT HAS BEEN TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE 12 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. CHANNELS; (3) THE CREDITWORTHINESS OR FINANCIAL STR ENGTH OF THE CREDITOR / SUBSCRIBER; (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR / SUBSCRIBER ARE FURNISHED TO THE DEPARTME NT ALONGWITH COPIES OF THE SHAREHOLDERS REGISTER SHARE APPLICATION FORMS SHARE TRANSFER REGISTER ETC IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPT ABLE EXPLANATION BY THE ASSESSEE; (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/ SUBSCRIBER FAI LS OR NEGLECTS TO RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHA RGED IF THE CREDITOR / SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE NOR SHOULD THE ASSESSING OFFICER TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT WITHOUT MORE AGAINST THE ASSESSEE; AN D (7) THE ASSESSING OFFICER IS DUTY BOUND TO INVESTIGATE THE CREDITWORT HINESS OF THE CREDITOR/ SUBSCRIBER THE GENUINENESS OF THE TRANSACTION AND T HE VERACITY OF THE REPUDIATION. IN THE CASE OF A PUBLIC ISSUE THE COM PANY CONCERNED CANNOT BE EXPECTED TO KNOW EVERY DETAIL PERTAINING TO THE IDE NTITY AS WELL AS FINANCIAL WORTH OF EACH OF ITS SUBSCRIBES. THE COMPANY MUST HOWEVER MAINTAIN AND MAKE AVAILABLE TO THE ASSESSING OFFICER FOR HIS PER USAL ALL THE INFORMATION CONTAINED IN THE STATUTORY SHARE APPLICATION DOCUME NTS. A DELICATE BALANCE MUST BE MAINTAINED WHILE WALKING THE TIGHTROPE OF S ECTIONS 68 AND 69 OF THE INCOME -TAX ACT. THE BURDEN OF PROOF CAN SELDOM BE DISCHARGED TO THE HILT BY THE ASSESSEE; IF THE ASSESSING OFFICER HARBOURS DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTION HE IS EMPOWERED TO CAM' OUT T HOROUGH INVESTIGATIONS. BUT IF THE ASSESSING OFFICER FAILS TO UNEARTH ANY W RONG OR ILLEGAL DEALINGS HE CANNOT ADHERE TO HIS SUSPICIONS AND TREAT THE SU BSCRIBED CAPITAL AS THE UNDISCLOSED INCOME OF THE COMPANY. (18) FURTHER YOUR HONOR'S KIND ATTENTION IS ALSO INVITED TO THE DECISION OF THEIR LORDSHIP OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD [(2008) 216 CTR 195 (SC)] WHEREIN T HE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AGAINST THE ORDER OF THE DE LHI HIGH COURT HAS BEEN DISMISSED WITH THE FOLLOWING REMARKS :- WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FO R THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIVEN TO THE AO THEN T HE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN A CCORDANCE WITH LAW. HENCE WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGEMENT. 13 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (19) THE ABOVE DECISION OF THE HONBLE SUPREME COURT FO LLOWS THE EARLIER DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F STELLER INVESTMENT LTD CITED SUPRA AND FURTHER REINFORCES THE ARGUMENTS PU T FORWARD FOR AND ON BEHALF OF THE APPELLANT COMPANY. (20) IN PARTICULAR WITH REGARD TO THE ISSUE OF ESTABLIS HING THE CREDITWORTHINESS OF THE PARTIES YOUR HONOURS ATTE NTION IS INVITED TO THE FOLLOWING RECENT JUDGEMENTS WHEREIN IT HAS BEEN CON CLUSIVELY HELD RELYING ON THE DECISIONS IN THE CASE OF M/S LOVELY EXPORTS PVT LTD CITED ABOVE THAT AS LONG AS THE IDENTITY OF THE SHARE APPLICANT WAS PROVED THE BURDEN OF PROVING THE CREDITWORTHINESS WAS NOT ON THE ASSESSE E:- > COMMISSIONER OF INCOME-TAX UDAIPUR V. BHAVAL SYNTH ETICS [(2013) 35 TAXMANN.COM 83 (RAJASTHAN)]; > SHREE BARKHA SYNTHETICS LTD V. ASSISTANT COMMISSIO NER OF INCOME- TAX [(2006) 155 TAXMAN 289 (RAJ)]; > COMMISSIONER OF INCOME-TAX BHOPAL (M.P) V. PEOPLE S GENERAL HOSPITAL LTD [(2013) 35 TAXMANN.COM 444(MADHYA PRADESH); > COMMISSIONER OF INCOME-TAX. MEERUT V KAMNA MEDICA L CENTRE (P) LTD [(2013) 35 TAXMANN.COM 470(ALLAHABAD)]; > COMMISSIONER OF INCOME-TAX FARIDABAD V GP INTERN ATIONAL LTD [(2010) 186 TAXMAN 229 (PUN &HAR)]; > CIT V DWARKADHISH INVESTMENT PVT LTD AND DWARKADHI SH CAPITAL PVT LTD [ (2011) 330 ITR298 (DELHI) ]; > CIT V. WINSTRAL PETROCHEMICALS PVT LTD [(2011) 330 ITR 603 (DELHI)]; > COMMISSIONER OF INCOME TAX V. GANGOUR INVESTMENT LT D [(2011) 335 ITR 359 (DELHI)]; > MOD CREATIONS PVT LTD VS. INCOME TAX OFFICER [(201 2) 354 ITR 282(DELHI)]. (21) IT SHOULD BE SPECIFICALLY NOTED IN THE INSTANT CASE THERE WAS NO DENIAL AT ANY STAGE OF THE INVESTIGATION OR THE ASSESSMENT PROCEEDINGS BY ANY OF THE 14 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. SUBSCRIBERS TO THE SHARE CAPITAL OF THEIR HAVING IN VESTED MONEY BY WAY OF SHARE APPLICATION MONEY IN THE APPELLANT COMPANY. MOREOVE R THERE IS NO SHRED OF EVIDENCE DIRECT INDIRECT OR EVEN PERIPHERAL OF TH E SHARE APPLICATION MONEY HAVING EMANATED FROM THE COFFERS OF THE APPELLANT C OMPANY. IN FACT THE INVESTOR COMPANIES IN THEIR REPLIES FILED BEFORE T HE DEPARTMENT (IN RESPONSE TO SUMMONS U/S 131 OF THE ACT) HAVE DULY CONFIRMED T HE FACTUM OF THEIR HAVING MADE THE INVESTMENT AND HAVE FURTHER BUTTRESSED THE SAME WITH THE FOLLOWING DOCUMENTS:- (A) CONFIRMATIONS; (B) ACKNOWLEDGEMENT FOR FILING OF INCOME TAX RE TURNS; (C) BANK STATEMENTS REFLECTING THE TRANSAC TIONS WITH THE APPELLANT COMPANY; (D) COPIES OF ANNUAL ACCOUNTS. (22) IN VIEW OF THE ABOVE NO DOUBT REMAINS AS TO THE ID ENTITY OF THE INVESTORS THEIR CREDIT WORTHINESS AND THE GENUINEN ESS OF THE TRANSACTIONS AND CORRESPONDINGLY NO ADVERSE INFERENCE IS CALLED FOR. (23) IN FACT IN THE INSTANT CASE RELIANCE IS PLACED ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS KAMDHENU STE EL & ALLOYS LIMITED AND OTHERS [(2012)206 TAXMAN 254(DELHI)] WHEREIN THE FO LLOWING HAS BEEN HELD : 38. EVEN IN THAT INSTANT CASE IT IS PROJECTED BY THE REVENUE THAT THE DIRECTORATE OF INCOME TAX (INVESTIGATION) HAD PURPO RTEDLY FOUND SUCH A RACKET OF FLOATING BOGUS COMPANIES WITH SOLE PURPOS E OF LANDING ENTRIES. BUT IT IS UNFORTUNATE THAT ALL THIS EXERCISE IS GOING I N VAIN AS FEW MORE STEPS WHICH SHOULD HAVE BEEN TAKEN BY THE REVENUE IN ORDE R TO FIND OUT CAUSAL CONNECTION BETWEEN THE CASH DEPOSITED IN THE BANK A CCOUNTS OF THE APPLICANT BANKS AND THE ASSESSEE WERE NOT TAKEN. IT IS NECES SARY TO LINK THE ASSESSEE WITH THE SOURCE WHEN THAT LINK IS MISSING IT IS DI FFICULT TO FASTEN THE ASSESSEE WITH SUCH A LIABILITY. 39. WE MAY REPEAT WHAT IS OFTEN SAID THAT A DELICATE B ALANCE HAS TO BE MAINTAINED WHILE WALKING ON THE TIGHT ROPE OF SECTI ONS 68 AND 69 OF THE ACT. ON THE ONE HAND NO DOUBT SUCH KIND OF DUBIOUS PRA CTICES ARE RAMPANT ON THE OTHER HAND MERELY BECAUSE THERE IS AN ACKNOWLE DGEMENT OF SUCH 15 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. PRACTICES WOULD NOT MEAN THAT IN ANY OF SUCH CASES COMING BEFORE THE COURT THE COURT HAS TO PRESUME THAT THE ASSESSEE IN QUEST IONS AS INDULGED IN THAT PRACTICE. TO MAKE THE ASSESSEE RESPONSIBLE THERE H AS TO BE PROPER EVIDENCE. IT IS EQUALLY IMPORTANT THAT AN INNOCENT PERSON CAN NOT BE FASTENED WITH LIABILITY WITHOUT COGENT EVIDENCE. ONE HAS TO SEE T HE MATTER FROM THE POINT OF VIEW OF SUCH COMPANIES (LIKE THE ASSESSEE HEREIN) W HO INVITE THE SHARE APPLICATION MONEY FROM DIFFERENT SOURCES OR EVEN PU BLIC AT LARGE. IT WOULD BE ASKING FOR A MOON IF SUCH COMPANIES ARE ASKED TO FI ND OUT FROM EACH AND EVERY SHARE APPLICANT/SUBSCRIBERS TO FIRST SATISFY THE ASSESSEE COMPANIES ABOUT THE SOURCE OF THEIR FUNDS BEFORE INVESTING. I T IS FOR THIS REASON THE BALANCE IS STRUCK BY CATENA OF JUDGEMENTS IN LAYING DOWN THAT THE DEPARTMENT IS NOT REMEDILESS AND IS FREE TO PROCEED TO REOPEN THE INDIVIDUAL ASSESSMENT OF SUCH ALLEGED BOGUS SHAREHOLDERS IN AC CORDANCE WITH THE LAW. THAT WAS PRECISELY THE OBSERVATION OF THE SUPREME C OURT IN LOVELY EXPORT (SUPRA) WHICH HOLDS THE FIELDS AND IS BINDING. 40. IN CONCLUSION WE ARE OF THE OPINION THAT ONCE ADE QUATE EVIDENCE/MATERIAL IS GIVEN AS STATED BY US ABOVE WHICH WOULD PRIMA FACIE DISCHARGE THE BURDEN OF THE ASSESSEE IN PROVING THE IDENTITY OF SHAREHOLDERS GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE SHAREHOLDERS THEREAFTER IN CASE SUCH EVIDENCE IS TO BE DISCARDED OR IT IS PROVED THAT IT HAS CREATED'' EVIDENCE THE REVENUE IS SUPPOSED TO MAK E THOROUGH PROBE OF THE NATURE INDICATED ABOVE BEFORE IT COULD NAIL THE ASS ESSEE AND FASTEN THE ASSESSEE WITH SUCH A LIABILITY UNDER SECTIONS 68 AN D 69 OF THE ACT. (24) IT WOULD ALSO BE PERTINENT TOPICAL AND RELEVAN T TO MENTION HERE THAT THE SPECIAL LEAVE PETITION FIELD BEFORE THE HONBLE SUPREME COURT BY THE REVENUE AGAINST THE ABOVE DECISION OF THE HONBLE D ELHI HIGH COURT HAS BEEN SUBSEQUENTLY DISMISSED BY THEIR LORDSHIP OF TH E SUPREME COURTS AND AS SUCH THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS KAMDHENU STEEL & ALLOYS LIMITED AND OTHERS (SUPRA) HAS ATTAI NED CONCLUSIVE JUDICIAL FINALITY. (25) TO CONCLUDE IT MAY BE SAID THAT ON THE BASIS OF TH E FACTS DISCUSSED SUPRA AND THE RATIO OF THE ABOVE JUDGEMENTS MAKES I T CLEAR THAT IF THE SHARE APPLICANTS ARE IDENTIFIED AND IT IS ESTABLISHED THA T THEY HAVE DEPOSITED MONEY IN THE COMPANY NO RECOURSE CAN BE MADE TO TH E PROVISIONS OF S 68. 16 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. THE APPELLANT COMPANY HAD PROVIDED ALL THE REQUISIT E PARTICULARS TO ESTABLISH THE IDENTITY OF THE SHARE APPLICANTS IN T HE CONFIRMATIONS ITRS AND BANK STATEMENTS ALREADY FILED BEFORE THE ASSESSING OFFICER. THE VARIOUS ARGUMENTS ADVANCED BY THE LEARNED ASSESSING OFFICER ARE FRIVOLOUS AND IRRELEVANT AND THE ONUS ENJOINED UPON THE APPELLANT COMPANY BY THE PROVISIONS OF SECTION 68 STANDS NOT ONLY ADEQUATELY BUT ALSO COMPLETED SATISFIED. (26) ACCORDINGLY SINCE IT IS CLEAR THAT IF THE SHAREHOL DERS/SHARE APPLICANTS ARE IDENTIFIED AND IT IS ESTABLISHED THAT THEY HAVE INVESTED MONEY IN THE PURCHASE OF SHARES NO RECOURSE CAN BE MADE TO THE PROVISIONS OF S 68. IN THE INSTANT CASE THE APPELLANT COMPANY HAD PROVIDED ALL THE REQUISITE PARTICULARS TO ESTABLISH THE IDENTITY OF THE SHARE APPLICANTS IN THE CONFIRMATIONS ALREADY FILED BEFORE THE ASSESSING OF FICER. 3.2. THE CASE OF THE REVENUE IS THAT SOME OF THE I NVESTOR COMPANIES COULD NOT BE FOUND AT THE GIVEN ADDRESS AND ALSO THAT SOM E OF THE INVESTOR COMPANIES RESPONDED TO THE SUMMONS BY POST BUT DID NOT CAUSE APPEARANCE BEFORE THE TAX AUTHORITIES. IT IS ALSO STATED THAT THE INCOME OF MANY OF THE INVESTOR COMPANIES WAS TOO LOW OR MEAGER TO ENABLE THEM TO MAKE SUCH LARGE INVESTMENTS IN THE SHARE CAPITAL OF APPELLANT COMPANY. IT IS FURTHER CONTENDED THAT THERE APPEARS NO JUSTIFICATION FOR L ARGE COMPONENT OF SHARE PREMIUM PAID TO THE APPELLANT ALONG WITH THE SHARE CAPITAL. BASED ON THESE OBSERVATIONS THE REVENUE HAS HELD THE SUBSCRIPTION TO SHARE CAPITAL INCLUDING THE SHARE PREMIUM AMOUNTING TO RS.9 00 0 0 000/- AS UNEXPLAINED CREDITS OF THE APPELLANT AND HELD TO BE UNEXPLAINED INCOME. THE CASE OF THE APPELLANT ON THE OTHER HAND IS THAT I T HAD DISCHARGED ITS ONUS TO ESTABLISH THE IDENTITY OF THE SHARE HOLDERS/APPL ICANTS AND THE SOURCE OF THE MONEY BY FILING CONFIRMATIONS FROM THE SAID PAR TIES ALONGWITH COPIES OF BANK STATEMENTS AND ITRS. THEREFORE THE QUESTION O F INVOKING THE PROVISIONS U/S 68 AGAINST THE APPELLANT DID NOT ARISE. THE APP ELLANT HAS ALSO RELIED ON SEVERAL CASE LAWS TO SUPPORT ITS CLAIM. 17 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. 3. THE LD. CIT(A) CONSIDERING THE EXPLANATION OF A SSESSEE IN THE LIGHT OF MATERIAL AND EVIDENCE ON RECORD DELET ED THE ENTIRE ADDITION. HIS FINDINGS IN PARAS 3.3 TO 3.5 OF THE O RDER ARE REPRODUCED AS UNDER : 3.3. I HAVE CONSIDERED THE RIVAL CLAIMS. THE FACT THAT APPELLANT FILED THE REQUISITE DOCUMENTS BEFORE THE AO IS UNDISPUTED . THUS THE APPELLANT HAD DISCHARGED ITS PRIMARY ONUS OF ESTABLISHING THE IDENTITY OF THE SHARE HOLDERS / APPLICANTS AND SOURCE OF THE MONEY. THE O NLY REASON FOR THE REVENUE TO CAUSE FURTHER VERIFICATION WAS THE REPOR T RELATING TO SURVEY CONDUCTED AT THE PREMISES OF THE APPELLANT WHICH FO RMS PART OF THE SATISFACTION RECORDED FOR REOPENING THE ASSESSMENT PROCEEDINGS. FROM THE SAID REPORT IT TRANSPIRES THAT THE BUSINESS PREMISE S OF THE APPELLANT ACTUALLY BELONGED TO M/S BHUSHAN STEEL LTD. AND SEVERAL OTHE R COMPANIES WERE HAVING THEIR REGISTERED OFFICES IN THE SAME PREMISE S. THIS LED TO THE SUSPICION THAT THESE COMPANIES WERE PAPER COMPANIES. DURING F URTHER VERIFICATION OF THE IDENTITY OF THE 8 SHAREHOLDERS IN MUMBAI SIX S HAREHOLDERS WERE NOT FOUND AT THE GIVEN ADDRESS ONE BUILDING HAD BEEN D EMOLISHED FOR REDEVELOPMENT AND ONE SHAREHOLDER RESPONDED TO THE SUMMONS. IN KOLKATA OUT OF THE TWO SHAREHOLDERS NO RESPONSE WAS RECEIV ED FROM THE ONE PARTY AND ANOTHER PARTY RESPONDED BY POST BUT DID NOT APP EAR. 3.4. THERE IS NO LAW THAT MORE THAN ONE COMPANY C ANNOT HAVE ITS REGISTERED OFFICE AT ONE ADDRESS. THERE IS NO LAW T HAT COMPANIES CANNOT CHANGE THEIR REGISTERED OFFICE. SEVERAL COMPANIES C AN HAVE THE SAME REGISTERED OFFICE. BUSINESSES RAISE CAPITAL AND SUC H CAPITAL IS ROTATED IN ECONOMY FOR INCREASING PRODUCTION AND TRADE AND FOR MAKING MORE EFFICIENT USE OF CAPITAL. COMPANIES CHANGE HANDS SOMETIMES I N QUICK SUCCESSION. 18 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. THIS IS THE NORMAL FORMATION OF CAPITAL IN ANY OPEN ECONOMY AND THE PROCESS OF CAPITAL FORMATION CANNOT BE TAKEN TO BE REPRESEN TING ONLY UNACCOUNTED FUNDS OR IMPEDED. ALL THE COMPANIES HAVING REGISTER ED OFFICE AT THAT PREMISES UNDISPUTEDLY BELONGED TO BHUSHAN GROUP. TH E SOURCES OF CAPITAL INTRODUCED IN THESE COMPANIES WERE ESTABLISHED DURI NG THE RESPECTIVE ASSESSMENT PROCEEDINGS INCLUDING THIS APPELLANT CO MPANY. NO EVIDENCE WAS FOUND DURING THE SEARCH TO INDICATE INTRODUCTIO N OF UNACCOUNTED CASH /FUNDS IN THE FORM OF SHARE CAPITAL IN THESE COMPAN IES. IN THESE CIRCUMSTANCES THE CONCLUSION BASED ON THE FACTS RE LIED UPON BY THE REVENUE THAT THE SHARE CAPITAL INTRODUCED IN THE COMPANIES BELONGING TO BHUSHAN GROUP INCLUDING THE APPELLANT COMPANY ARE UNEXPLA INED IS PREMATURE. 3.5. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE MATTER AND IN VIEW OF THE CASE LAWS RELIED UPON BY THE LD. AR THE ADD ITION MADE CANNOT BE LEGALLY SUSTAINED AND IS DELETED. THIS GROUND OF AP PEAL IS ALLOWED. 3.1. IT MAY ALSO BE NOTED HERE THAT THE LD. CIT(A) DECIDED THE ISSUE OF NOT GIVING OPPORTUNITY TO THE ASSESSEE TO REBUT THE ENQUIRY REPORT WHICH WAS NOT CONFRONTED TO THE ASSESSEE. TH E LD. CIT(A) DECIDED THE ISSUE SEPARATELY IN PARA 4.2 OF HIS ORD ER RELEVANT FINDINGS READS AS UNDER HOWEVER DO NOT I FIND FROM THE ASSESSMENT ORDER TH AT THE RESULT OF ENQUIRY MADE AT MUMBAI AND KOLKATA WAS MADE AVAILAB LE TO THE APPELLANT. TO THAT EXTENT THE RIGHT OF APPELLANT T O KNOW THE FACTS AND HAVE THE OPPORTUNITY TO REBUT THE EVIDENCE WAS NOT GRANTED. 19 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. 3.2. THE LD. CIT(A) HOWEVER ON ACCOUNT OF DELETIN G THE ADDITION ON MERIT DID NOT DECIDE THE ISSUE OF VALIDITY OF T HE PROCEEDING AGAINST THE ASSESSEE FOR NOT FOLLOWING THE PRINCIPLES OF NA TURAL JUSTICE AND DISMISSED SAME. 4. THE REVENUE IS IN APPEAL ONLY ON THE GROUND OF CHALLENGING THE DELETION OF ADDITION ON MERIT. THESE FINDINGS O F THE LD. CIT(A) IN PARA 4.2 HAVE NOT BEEN CHALLENGED IN THE PRESENT AP PEAL. THUS THE FINDINGS OF FACT RECORDED BY THE LD. CIT(A) IN PARA 4.2 HAVE BECOME FINAL THAT RESULT OF ENQUIRY AT MUMBAI AND KOLKATA WAS NOT MADE AVAILABLE TO ASSESSEE AT ASSESSMENT STAGE. 5. THE LD. D.R. RELIED UPON THE ORDER OF THE A.O. AND SUBMITTED THAT ASSESSEE DID NOT PROVE THE IDENTITY OF THE INVESTORS THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANS ACTION IN THE MATTER. 6. ON THE OTHER HAND LEARNED COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND SUBMITTED THAT ASSESSEE FILED CONFIRMATION OF ALL T HE INVESTORS COPY OF THEIR BANK ACCOUNTS COPY OF PAN AND INCOME TAX RETURN COPY OF ROC. THE INVESTORS HAVE DIRECTLY CONFIRMED THE TRAN SACTION WITH THE 20 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. ASSESSEE IN THEIR REPLIES IN RESPONSE TO THE COMMIS SION ISSUED UNDER SECTION 131 OF THE I.T. ACT SUPPORTED BY CONFIRMATI ON PAN BANK STATEMENT AND COPY OF THE ANNUAL ACCOUNTS. HE HAS S UBMITTED THAT THE IDENTICAL ISSUE HAVE BEEN CONSIDERED BY ITAT D ELHI BENCH IN THE GROUP CASES IN WHICH ON IDENTICAL FACTS AND SIMILAR FINDINGS OF THE LD. CIT(A) THE DEPARTMENTAL APPEALS HAVE BEEN DISMISSE D. THE ORDERS OF THE TRIBUNAL ON WHICH LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANCE ARE AS UNDER : 1. ACIT CENTRAL CIRCLE-13 NEW DELHI VS. ADAMINE CONSTRUCTION PVT. LTD. ITA.NO.6175/DEL./2013 AND CO.NO.259/DEL./2015 DATED 18.08.2017. 2. ACIT CENTRAL CIRCLE-13 NEW DELHI VS. ADAMINE CONSTRUCTION PVT. LTD. ITA.NO.6178/DEL./2013 AND CO.NO.262/DEL./2015 DATED 18.08.2017. 3. ACIT CENTRAL CIRCLE-13 NEW DELHI VS. BNR INFOT ECH PVT. LTD. ITA.NO.6171/DEL./2013 AND CO.NO.256/DEL./2015 DATED 18.08.2017. 4. ACIT CENTRAL CIRCLE-13 NEW DELHI VS. NRA IRON AND STEEL PVT. LTD. ITA.NO.3611/DEL./2014 AND CO.NO.263/DEL. / 2015 DATED 16.10.2017. 6.1. HE HAS SUBMITTED THAT ALL THE DOCUMENTS/EVIDE NCES OF THE INVESTORS ARE FILED IN THE PAPER BOOK. HE HAS SUBMI TTED THAT THE ISSUE IS THEREFORE COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE ORDERS OF 21 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. THE TRIBUNAL ESPECIALLY IN THE CASE OF ACIT VS. NRA IRON AND STEEL PVT. LTD. (SUPRA) IN WHICH IN PARAS 2 TO 21 THE TRIBUN AL CONSIDERED IDENTICAL ISSUE AND HELD AS UNDER : 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A.O. ISSU ED NOTICE UNDER SECTION 148 OF THE I.T. ACT AFTER RECORDING T HE REASONS FOR REOPENING. THE ASSESSEE SUBMITTED BEFORE A.O. THAT RETURN ALREADY FILED MAY BE TREATED AS RETURN HAVING BEEN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE I.T. AC T. THE A.O. ISSUED DETAILED QUESTIONNAIRE ON THE ABOVE ISSUE OF SHARE CAPITAL AND THE ASSESSEE FILED NECESSARY DETAILS AN D CLARIFICATIONS BEFORE A.O. TIME TO TIME. THE ASSESS EE FILED OBJECTIONS TO THE REOPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE I.T. ACT WHICH WAS REJECTED ON 13 TH AUGUST 2012. THE ASSESSEE SUBMITTED BEFORE A.O. THAT IT HAS RAIS ED MONEY AGGREGATING TO RS.17.60 CRORES THROUGH SHARE CAPITA L/SHARE PREMIUM DURING THE ASSESSMENT YEAR UNDER APPEAL FRO M VARIOUS PARTIES WHICH ARE MUMBAI BASED COMPANIES K OLKATA BASED COMPANIES AND GAUHATI BASED COMPANIES. THE DE TAILS OF WHICH ARE NOTED AT PAGES 2 AND 3 OF THE ASSESSME NT ORDER. IT WAS SUBMITTED THAT ASSESSEE HAS ALREADY FILED CO PIES OF THE CONFIRMATIONS INCOME TAX RETURN ACKNOWLEDGMENTS AN D BANK ACCOUNTS IN RESPECT OF THESE COMPANIES DULY ESTABL ISHING THE IDENTITY GENUINENESS AND SOURCE OF TRANSACTION REG ARDING SHARE CAPITAL AND SHARE PREMIUM. THE ENTIRE SHARE C APITAL/ 22 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. APPLICATION MONEY HAS BEEN RECEIVED BY THE ASSESSEE - COMPANY THROUGH NORMAL BANKING CHANNELS BY ACCOUNT PAYEE CHEQUES/DEMAND DRAFTS. FURTHERMORE THE SAID CONFIR MATIONS ALSO CLEARLY REVEAL THE SOURCE OF FUNDS PARTICULAR S OF BANK ACCOUNTS THROUGH WHICH PAYMENT HAVE BEEN RECEIVED A ND INCOME TAX PARTICULARS WHICH GO TO ESTABLISH THEIR IDENTITY AND CREDITWORTHINESS. IT WAS THEREFORE SUBMITTED THAT THERE WERE NO CAUSE EXISTS TO MAKE A RECOURSE TO THE PROVISION S OF SECTION 68 OF THE I.T. ACT 1961. IN THE INSTANT CASE THER E IS NO MATERIAL ON RECORD TO PROVE OR EVEN REMOTELY SUGGEST THAT TH E SHARE APPLICATION MONEY RECEIVED ACTUALLY EMANATE FROM TH E ASSESSEE-COMPANY. THE SHARE APPLICATION MONEY WAS RECEIVED FROM INDEPENDENT LEGALLY INCORPORATED COMP ANIES THROUGH BANKING CHANNELS. THE INITIAL ONUS UPON ASS ESSEE HAS THUS BEEN DISCHARGED. THE ASSESSEE RELIED UPON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. STEL LER INVESTMENT LTD. (1991) 192 ITR 287 (DEL.) IN WHICH IT WAS HEL D THAT ANY INCREASED CAPITAL IS NOT ASSESSABLE IN THE HANDS OF THE ASSESSEE WHICH HAS BEEN CONFIRMED BY THE HONBLE SU PREME COURT IN THE CASE OF CIT VS. STELLER INVESTMENT LTD . (2001) 251 ITR 263 (SC). THE ASSESSEE ALSO RELIED UPON THE DEC ISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS PVT. LTD. 216 CTR 195 IN WHICH IT WAS HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE-COMPA NY FROM ALLEGED BOGUS SHARE HOLDERS WHOSE NAMES ARE GIVEN T O THE A.O THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR I NDIVIDUAL 23 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. ASSESSMENTS IN ACCORDANCE WITH LAW. THE ASSESSEE RELIED UPON SEVERAL DECISIONS IN SUPPORT OF THE CONTENTION. THE A.O. HOWEVER DID NOT ACCEPT THE CONTENTION OF THE ASSES SEE ON THE BASIS OF THE ENQUIRIES CONDUCTED BY HIM. IT WAS FOU ND THAT EXISTENCE OF INVESTMENT COMPANIES AND GENUINENESS O F THE TRANSACTIONS HAS NOT BEEN PROVED. THE A.O. NOTED TH AT AS REGARDS MUMBAI BASED COMPANIES SOME NOTICES WERE S ERVED AND SOME COULD NOT BE SERVED AND NO REPLY HAVE BEEN RECEIVED FROM THEM. IN RESPECT OF KOLKATA BASED COMPANIES T HEY HAVE FILED THEIR REPLY THROUGH DAK COUNTER CONFIRMING TH E TRANSACTION WITH THE ASSESSEE BUT COPY OF THE BANK ACCOUNT HAS NOT BEEN ENCLOSED. IN RESPECT OF GUWAHATI BASED COMPANY IT WAS NOTED THAT THIS COMPANY DO NOT EXIS T AT THE ADDRESS. THEREFORE IT WAS HELD THAT ASSESSEE FAILE D TO PROVE THE GENUINENESS OF THE TRANSACTION AND ACCORDINGLY ADDITION OF RS.17.60 CRORES WAS MADE IN THE HANDS OF THE ASS ESSEE. 3. THE ASSESSEE CHALLENGED THE REOPENING OF THE ASSESS MENT AS WELL AS ADDITION ON MERITS BEFORE LD. CIT(A). TH E DETAILED CONTENTION OF THE ASSESSEE AS REGARDS REOPENING OF THE ASSESSMENT HAS BEEN NOTED IN THE IMPUGNED ORDER. HO WEVER THE LD. CIT(A) CONFIRMED THE REOPENING OF THE ASSESSME NT AND DISMISSED THIS GROUND OF APPEAL OF ASSESSEE PARTIC ULARLY WHEN HE HAS ALLOWED THE RELIEF TO THE ASSESSEE ON MERIT. THEREFORE NO 24 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. DETAILED REASONING HAVE BEEN GIVEN BECAUSE IT WAS F OUND THAT THE ISSUE IS LEFT WITH ACADEMIC DISCUSSION ONLY. 4. THE ASSESSEE AS REGARDS THE ADDITION ON MERIT REI TERATED THE SAME SUBMISSIONS BEFORE LD. CIT(A) AND IT WAS S UBMITTED THAT A.O. MADE THE ADDITION ARBITRARILY AND UNJUSTI FIABLY. THE ASSESSEE PRODUCED ALL THE RELEVANT DOCUMENTS BEFORE A.O. WHICH HAVE NOT BEEN DOUBTED. THE ASSESSEE FILED CONFIRMAT IONS OF ALL THE SHARE APPLICANTS COPY OF THEIR INCOME TAX RETU RNS BANK ACCOUNTS AND COPY OF ANNUAL ACCOUNTS. THEREFORE NO ADVERSE INFERENCE HAS BEEN DRAWN AGAINST THE ASSESSEE. THE LD. CIT(A) ON GOING THROUGH THE DOCUMENTS AND MATERIAL ON RECO RD DELETED THE ENTIRE ADDITION OF RS.17.60 CRORES AND ALLOWED THE APPEAL OF ASSESSEE. HIS FINDINGS IN PARAS 3.3 TO 3.5 OF THE I MPUGNED ORDER ARE REPRODUCED AS UNDER : 3.3. I HAVE CONSIDERED THE RIVAL CLAIMS. T HE FACT THAT APPELLANT FILED THE REQUISITE DOCUMENTS BEFORE THE AO IS UNDISPUTED. THUS THE APPELLANT HAD DISCHARGED ITS PRIMARY ONUS OF ESTABLISHING THE IDENTITY OF THE SHARE HOLD ERS / APPLICANT IRE SOURCE OF THE MONEY. THE ONLY REASON FOR THE RE VENUE TO CAUSE FURTHER VERIFICATION WAS THE REPORT RELATING TO SUR VEY CONDUCTED AT THE PREMISES OF THE APPELLANT WHICH FORMS PART O F THE SATISFACTION RECORDED FOR REOPENING THE ASSESSMENT PROCEEDINGS. FROM THE SAID REPORT IT TRANSPIRES THAT THE BUSINES S PREMISES OF 25 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. THE APPELLANT ACTUALLY BELONGED TO M/S BHUSHAN STEE L LTD. AND SEVERAL OTHER COMPANIES WERE HAVING THEIR REGISTERE D OFFICES IN THE SAME PREMISES. THIS LED TO THE SUSPICION THAT T HESE COMPANIES WERE PAPER COMPANIES. DURING FURTHER VERI FICATION OF THE IDENTITY OF THE SHAREHOLDERS IN MUMBAI SOME SU MMONS WERE SERVED BUT PARTIES DID NOT RESPOND. IN GUWAHATI BO TH PARTIES WERE NOT FOUND AT THE GIVEN ADDRESS. IN KOLKATA AL L 11 PARTIES RESPONDED BY POST BUT NO ONE APPEARED. 3.4. THERE IS NO LAW THAT MORE THAN ONE COM PANY CANNOT HAVE ITS REGISTERED OFFICE AT ONE ADDRESS. THERE IS NO LAW THAT COMPANIES CANNOT CHANGE THEIR REGISTERED OFFICE. SE VERAL COMPANIES CAN HAVE THE SAME REGISTERED OFFICE. BUSI NESSES RAISE CAPITAL AND SUCH CAPITAL IS ROTATED IN ECONOMY FOR INCREASING PRODUCTION AND TRADE AND FOR MAKING MORE EFFICIENT USE OF CAPITAL. COMPANIES CHANGE HANDS SOMETIMES IN QUICK SUCCESSION. THIS IS THE NORMAL FORMATION OF CAPITAL IN ANY OPEN ECONOMY AND THE PROCESS OF CAPITAL FORMATION CANNOT BE TAKEN TO BE REPRESENTING ONLY UNACCOUNTED FUNDS OR IMPEDED. ALL THE COMPANIES HAVING REGISTERED OFFICE AT THAT PREMISES UNDISPUTEDLY BELONGED TO BHUSHAN GROUP. THE SOURCES OF CAPITAL INTRODUCED IN THESE COMPANIES WERE ESTABLIS HED DURING THE RESPECTIVE ASSESSMENT PROCEEDINGS INCLUDING IN THE CASE OF THIS APPELLANT COMPANY. NO EVIDENCE WAS FOUND DURIN G THE SEARCH TO INDICATE INTRODUCTION OF UNACCOUNTED CASH / FUNDS IN THE FORM OF SHARE CAPITAL IN THESE COMPANIES. THERE FORE THE CONCLUSION BASED ON THE FACTS RELIED UPON BY THE RE VENUE THAT THE SHARE CAPITAL INTRODUCED IN THE COMPANIES BELONGING TO BHUSHAN GROUP INCLUDING THE APPELLANT COMPANY ARE UNEXPLA INED IS AT BEST PREMATURE. 3.5. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE MATTER AND IN VIEW OF THE CASE LAWS RELIED UPON BY THE LD. AR THE ADDITION MADE CANNOT BE LEGALLY SUSTAINED AND IS DELETED. TH IS GROUND OF APPEAL IS ALLOWED. 26 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. 5. THE LD. D.R. RELIED UPON THE ORDERS OF THE A.O. AND SUBMITTED THAT SOME PARTIES DID NOT FILE REPLY BEFO RE A.O. AND MANY PARTIES FILED REPLY AT THE DAK COUNTER. NO REA SONS HAVE BEEN GIVEN FOR THE HIGHER PREMIUM PAID. COPY OF THE BANK STATEMENTS WERE NOT FILED BEFORE A.O. THE INCOME DE CLARED BY ASSESSEE AND THE SHARE APPLICANT COMPANIES WERE VER Y SMALL. THEREFORE ADDITION WAS CORRECTLY MADE BY THE A.O. THE LD. D.R. RELIED UPON THE FOLLOWING DECISIONS. I. CIT VS. PRECISION FINANCE (P) LTD. (1994) 208 ITR 4 65 (CAL.) II. CIT VS. UNITED COMMERCIAL & INDUSTRIES CO. (P) LTD. (1991) 187 ITR 596 (CAL.) III. CIT VS. NIPUN BUILDERS & DEVELOPERS (P) LTD. (2013 ) 350 ITR 407 (DEL.) IV. CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD. (2012) 342 ITR 169 (DEL.). V. MUKESH SHAH VS. ITO (2012) 246 CTR 82 (JHARKHAND) VI. CIT VS. N.R. PORTFOLIO (P) LTD. (2013) 263 CTR 456 ( DEL.) VII. CIT VS. EMPIRE BUILDTECH (P) LTD. (2014) 366 ITR 11 0 (DEL.) VIII. CIT VS. FOCUS EXPORTS (P) LTD. (2014) 51 TAXMANN.C OM 46 (DEL.). 6. ON THE OTHER HAND LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND RELIED UPON THE ORDER OF THE ITAT DELHI BENCH IN THE CASE OF ACIT VS. M/S. ADAMINE CONSTRUCTION PVT . LTD. 27 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. NEW DELHI ITA.NO.6175/DEL./2013 AND C.O.NO.259/DEL. / 2015 DATED 18 TH AUGUST 2017 IN WHICH ON IDENTICAL ISSUE THE DEPARTMENTAL APPEAL AND CROSS-OBJECTION OF THE ASSESSEE HAVE BEEN DISMISSED. HE HAS SUBMITTED THAT MOST OF THE PARTIES ARE SIMILAR IN THIS CASE AS HAVE BEE N CONSIDERED IN THE CASE OF THE ASSESSEE ON IDENTICAL FACTS. IT IS THE CASE OF SISTER CONCERN OF THE ASSESSEE. HE H AS SUBMITTED THAT ALL THE DOCUMENTS WERE FILED BEFORE A.O. WHICH PROVED THE IDENTITY OF THE SHARE APPLICANTS THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . ALL COMPANIES ARE REGISTERED WITH REGISTRAR OF COMPANIE S AND FILED THEIR BANK STATEMENTS. NO CASH HAVE BEEN DEPO SITED IN THE BANK ACCOUNTS OF THE SHARE APPLICANTS. THEY WER E HAVING SUFFICIENT FUNDS WITH THEM TO MAKE INVESTMEN T IN THE ASSESSEE-COMPANY. HE HAS SUBMITTED THAT THE ISSUE I S COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF T HE ITAT DELHI BENCH IN THE CASE OF M/S. ADAMINE CONSTRUCTI ON PVT. LTD. (SUPRA). 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT ASSESSEE COMPANY FILED COPIES OF THE CONFIRMATIONS INCOME TAX RETURN ACKNOWLEDGMENTS AND BANK ACCOUNTS OF THE SHARE APPLICANT COMPANIES BEFORE A.O. ALL THE INVES TORS ARE REGISTERED WITH REGISTRAR OF COMPANIES AND HAVE FIL ED THEIR PAN ALSO. THE ASSESSEE FILED LIST OF SHARE APPLICAN TS IN THE 28 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. PAPER BOOK SUPPORTED BY ALL THE ABOVE DOCUMENTS AND EVIDENCES. IN ALL THEIR CONFIRMATIONS THEY HAVE CE RTIFIED IN MAKING INVESTMENT IN ASSESSEE-COMPANY THROUGH BANKI NG CHANNEL AND THEIR PAN AS WELL. THE COPIES OF THE BA NK STATEMENTS ALSO SHOW THAT SHARE APPLICANTS WERE HAV ING SUFFICIENT BANK BALANCE TO MAKE INVESTMENT IN ASSES SEE- COMPANY. THE ASSESSEE RECEIVED THE SHARE CAPITAL/ PREMIUM THROUGH BANKING CHANNEL FROM THE FOLLOWING COMPANIES SITUATED AT MUMBAI KOLKATA AND GUWAHATI AS UNDER : S NAME OF THE SHAREHOLDER AMOUNT (A) MUMBAI BASED COMPANIES 1. CLIFTON SECURITIES PVT. LTD. 95 00 000 2. LEXUS INFOTECH LTD. 95 00 000 3. NICCO SECURITIES PVT. LTD. 95 00 000 4. REAL GOLD TRADING COMPANY PVT. LTD. 90 00 000 5. HEMA TRADING COMPANY PVT. LTD. 95 00 000 6. ETERNITY MULTI-TRADE PVT. LTD. 90 00 000 (B) KOLKATA BASED COMPANIES 1. NEHA CASSETTES PVT. LTD. 90 00 000 2. WARNER MULTIMEDIA LTD. 95 00 000 3. GOPIKAR SUPPLY PVT. LTD. 90 00 000 4. GANGA BUILDERS LTD. 90 00 000 5. GROMORE FUND MANAGEMENT CO. LTD. 95 00 000 6. BAYANWALA BROTHERS PVT. LTD. 95 00 000 7. SUPER FINANCE LTD. 90 00 000 8. SHIVALAXMI EXPORT LTD. 95 00 000 9. NATRAJ VINIMAY PVT. LTD. 95 00 000 10. NEELKANTH COMMODITIES PVT. LTD. 95 00 000 11. PROMINENT VYAPAAR PVT. LTD. 95 00 000 29 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (C) GUWAHATI BASED COMPANIES 1. ISPAT SHEETS LTD. 90 00 000 2. NOVELTY TRADERS LTD. 90 00 000 TOTAL AMOUNT 17 60 00 000 8. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON TH E ORDER OF THE ITAT DELHI BENCH IN THE CASE OF ACIT CENTR AL CIRCLE- 13 NEW DELHI VS. M/S. ADAMINE CONSTRUCTION PVT. LT D. (SUPRA) IN WHICH THE DEPARTMENTAL APPEAL ON THE I DENTICAL QUESTION HAVE BEEN DISMISSED. THE FINDINGS OF THE T RIBUNAL IN PARAS 10 TO 18 OF THE TRIBUNAL ARE REPRODUCED AS UNDER : I.T.APPEAL NO. 6175/DEL/2013 : 10. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS :- 1. THE ORDER OF LD. CIT (APPEALS) IS NOT CORREC T IN LAW AND FACTS; 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.4 65 00 000 /- BEING UNEXPLAINED SHARE CAPITAL INCLUDING SHARE PREMIUM AND RS.50 00 000/- BEING UNEXPLAINED SHARE APPLICATION MO NEY MADE BY ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THAT THE IDENTITY AND THE CREDITWORTHINESS OF THE INVESTORS WERE NOT ESTA BLISHED AS ALL THE INVESTORS WERE SHOWING A NOMINAL INCOME. 11. IT IS RELATING TO DELETION OF ADDITION OF RS .4 65 00 000/- ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL AND SHARE PREMIU M AND A SUM OF RS.50 00 000/- ON ACCOUNT OF UNEXPLAINED SHARE APPL ICATION MONEY RECEIVED BY THE APPELLANT COMPANY FROM VARIOUS COMPANIES MADE BY THE ASSESSING OFFICER ON THE GROUND THAT :- 30 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (I) THE CREDITWORTHINESS OF THE INVESTOR COMPANIES WA S NOT ESTABLISHED AS ALL THE INVESTORS WERE SHOWING A NOM INAL INCOME; (II) NEITHER THE INVESTORS COMPANIES NOR THE APPELLANT COMPANY HAD PRODUCED ANY PROOF TO SUBSTANTIATE THE CREDIT WOR THINESS OF THE INVESTORS; AND (III) THE GENUINENESS OF THE TRANSACTIONS WAS ALSO IN DOUBT . 12. THE RELEVANT FACTS ARE THAT THE APPELLANT C OMPANY HAD FILED ITS ORIGINAL RETURN OF INCOME DECLARING A TOTAL INCO ME OF RS.715/- ON 25.09.2008 VIDE RECEIPT NO.39312931250908. THE RET URN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT 1961 AT THE RETURNED INCOME. SUBSEQUENTLY A SEARCH SEIZURE AND SURVEY OPE RATION UNDER SECTION 132 AND 133A RESPECTIVELY OF THE INCOME TAX ACT 1961 WAS CARRIED OUT IN THE BHUSHAN GROUP OF CASES ON 3.03.2010 . THE APPELLANT COMPANY WAS ALSO COVERED IN THE SAID SURVEY OPERATIO N AND ITS JURISDICTION WAS SUBSEQUENTLY TRANSFERRED TO THE OFFIC E OF THE ACIT CENTRAL CIRCLE 13 NEW DELHI. 13. THE CASE OF THE APPELLANT COMPANY FOR THE ASS ESSMENT YEAR 2008-09 WAS REOPENED UNDER SECTION 147 OF THE INCOME TAX ACT 1961 AND NOTICE UNDER SECTION 148 WAS ISSUED ON 19.09.2011 . IN RESPONSE TO THE SAID NOTICE THE APPELLANT COMPANY FILED A REPLY DATED 26.09.2011 STATING THAT ORIGINAL RETURN OF INCOME FILED EARLIER BY IT ON 25.09.2008 VIDE RECEIPT NO. 39312931250908 MAY BE TREATED AS R ETURN FILED IN RESPONSE THERETO. 14. THE ASSESSMENT WAS COMPLETED VIDE ORDER DAT ED 28.03.2013 AT AN INCOME OF RS.5 15 00 715/- WHEREIN THE LD. ASS ESSING OFFICER HAS PROCEEDED TO ADD BACK A SUM OF RS.5 15 00 000/- ON AC COUNT OF ALLEGED UNEXPLAINED SHARE CAPITAL RECEIVED BY THE APPELLANT COMPANY FROM VARIOUS COMPANIES SITUATED AT MUMBAI AND KOLKATA. TH E LD. CIT (APPEALS) HAS HOWEVER DELETED THE ADDITION BEING CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE. 15. IN SUPPORT OF THE GROUND THE LD. SR. DR HAS BAS ICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER WITH THIS CONTENTI ON THAT ASSESSEE HAS THOROUGHLY FAILED TO ESTABLISH CREDITWORTHINESS OF T HE INVESTOR 31 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. COMPANIES AS WELL AS GENUINENESS OF THE TRANSACTION. SOME OF THE PARTIES WERE NOT FOUND ON THE GIVEN ADDRESS AND SOM E OF THEM DID NOT RESPOND TO THE NOTICES ISSUED BY THE ASSESSING O FFICER TO THEM NOR THE ASSESSEE HAS BEEN ABLE TO PRODUCE THEM FOR VERIF ICATION BEFORE THE ASSESSING OFFICER. IN ABSENCE OF COMPLIANCE OF THE SE REQUIREMENTS THE ASSESSING OFFICER WAS VERY MUCH JUSTIFIED IN MAKING THE ADDITION OF RS.5 15 00 000/- UNDER SECTION 68 OF THE ACT ON ACCOUN T OF UNEXPLAINED SHARE CAPITAL AND SHARE PREMIUM RECEIVED BY THE ASSESSEE COMPANY FROM VARIOUS COMPANIES. IGNORING T HESE MATERIAL ASPECTS THE LD. CIT (APPEALS) HAS ERRED IN DELETI NG THE ADDITION. 16. THE LD. AR ON THE OTHER HAND PLACED RELIA NCE ON THE FIRST APPELLATE ORDER AND REITERATED FOLLOWING SUBMI SSIONS MADE BEFORE THE LD. CIT (APPEALS) :- (1) BY WAY OF A BRIEF INTRODUCTION IT IS SUBMI TTED THAT THE APPELLANT COMPANY HAD RAISED MONEY AMOUNTING TO RS.5 15 00 000/- THROUGH SHARE CAPITAL/APPLICATION MONEY DURING THE FI NANCIAL YEAR 2007-08 FROM VARIOUS PARTIES SITUATED AT MUMBAI AND K OLKATA. THE DETAILS OF THE PARTIES FROM WHOM SHARE CAPITAL AND SHARE PREMIUM HAD BEEN RECEIVED ARE AS UNDER :- S NO. NAME OF THE INVESTOR COMPANY ADDRESS AMOUNT(SHARE CAPITAL/APPLICATION MONEY/ PREMIUM) (IN RS.) 1. VANGUARD JEWELS LTD G-3 SILVER ANKET YARI ROAD VERSOVA MUMBAI -400061 95 00 000/- 2. GANGA BUILDERS LTD STEPHEN HOUSE ROOM NO. 102 6 TH FLOOR 4BBD BAGH (EAST) KOLKATA -700001 95 00 000/- 3. SHIVLAXMI EXPORTS LTD 102 STEPHEN HOUSE 4BBD BAG(E) KOLKATA -700001 90 00 000/- 4. LEXUS INFOTECH LTD CS-1 SILVER ANKET YARI ROAD VERSOVA ANDHERI (W) MUMBAI 400061 90 00 000/- 5. HEMA TRADING CO PVT LTD 303-B MINAL PARK C.S ROAD DAHISAR (EAST) MUMBAI 400068 95 00 000/- 6. REALGOLD TRADING PVT LTD BIG TREE BLDG CHAMBER NO. 6 1 ST FLOOR MARINE STREET MUMBAI 400002 50 00 000/- TOTAL 5 15 00 000/- 32 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (2) THE ASSESSING OFFICER IN THE COURSE OF ASSESSMEN T PROCEEDINGS HAD DESIRED THE APPELLANT COMPANY TO FURNISH THE DETAILS OF THE AMOUNT RECEIVED AND EVIDENCE IN SUPPORT OF IDENTITY AND CRE DITWORTHINESS OF THE PARTIES AND ALSO THE GENUINENESS OF THE TRANSACTION OF ALL THE PARTIES FROM WHOM THE SHARE CAPITAL AND SHARE PREMIUM HAD BEEN R ECEIVED. IN RESPONSE THE APPELLANT COMPANY VIDE LETTER DATED 13.08.2012 FILED WITH THE ASSESSING OFFICER COPIES OF BANK ACCOUNTS CONFIRMA TION AND INCOME TAX RETURN ACKNOWLEDGEMENTS FROM ALL THE PARTIES TO ESTAB LISH THE IDENTITY GENUINENESS AND SOURCES OF TRANSACTION REGARDING SHAR E CAPITAL AND SHARE PREMIUM. THE ENTIRE AMOUNT HAD BEEN RECEIVED BY THE APPELLANT COMPANY THROUGH NORMAL BANKING CHANNELS BY ACCOUNT PAYEE CHEQ UES / DEMAND DRAFTS. FURTHERMORE THE SAID CONFIRMATIONS ALSO CL EARLY REVEAL THE SOURCE OF FUNDS PARTICULARS OF THE BANK ACCOUNT THROUGH WHICH PAYMENT HAS BEEN RECEIVED AND THE INCOME-TAX PARTICULARS WHICH GO ON TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE RESPECTIVE SHA RE APPLICANTS AUTHORITATIVELY AND CONCLUSIVELY. (2) ON THE BASIS OF THE DOCUMENTS/DETAILS SUBMITTE D THE LEARNED ASSESSING OFFICER HAS SUMMARIZED AS FOLLOWS :- S.NO. NAME OF THE SHARE HOLDER RETURNED INCOME ASSESSMENT YEAR 1 VANGUARD JEWELS LTD RS. 3 42 600/- 2008-09 2. GANGA BUILDERS LTD (RS. 2 910/-) 2008-09 3. SHIVLAXMI EXPORTS LTD NIL 2008-09 4. LEXUS INFOTECH LTD 15 64 590/- 2008-09 5. HEMA TRADING CO PVT LTD 17 16 207/- 2008-09 33 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (4) IN ORDER TO FURTHER VERIFY THE GENUINENESS OF AL L THE PARTIES COMMISSIONS U/S 131 WERE SENT BY THE LEARNED ASSESS ING OFFICER TO THE RESPECTIVE INVESTIGATION AGENCIES IN MUMBAI AND KOL KATA. IN RESPONSE TO WHICH REPORTS WERE RECEIVED FROM THE OFFICE OF ADD L. CIT RANGE-10(2) MUMBAI AND ASSISTANT DIRECTOR OF INCOME TAX (INV) UN IT-III(3) KOLKATA. THE ADDL COMMISSIONER OF INCOME TAX RANGE 10(2) M UMBAI AND ASSISTANT DIRECTOR OF INCOME TAX (INV) UNIT-III(3) KOLKATA ALSO DEPUTED INSPECTORS OF INCOME TAX TO SERVE THE SUMMONS AND CONDUCT FIELD EN QUIRIES. THE RESULTS OF THE SAID ENQUIRIES ARE AS FOLLOWS:- REPORT FROM MUMBAI S NO. NAME OF THE SHAREHOLDER REPORT AS RECEIVED I N RESPONSE TO COMMISSION FROM MUMBAI 1. VANGUARD JEWELS LTD PARTY HAS RESPONDED TO THE SUMMONS AND THE DETAILS ARE ANNEXED. DETAILS ANNEXED AS EXHIBIT-C 2. LEXUS INFOTECH LTD PARTY HAS RESPONDED TO THE S UMMONS AND THE DETAILS ARE ANNEXED. DETAILS ANNEXED AS EXHIBIT-D. 3. HEMA TRADING CO PVT LTD THE ADDRESS IS RESIDENT IAL ADDRESS OF D V JAIN AS PER REPORT OF INSPECTOR DATED 30.11.2011 NO SUCH PERSON HAS EVER RESIDED IN SUCH PREMISES. REPORT OF SHRI AJAY KUMAR INSPECTOR IS ENCLOSED AS ANNEXURE. (ANNEXURE -20) 4. REALGOLD TRADING COMPANY PVT LTD THE ADDRESS IS OFFICE ADDRESS OF N CHANDULAL & CO.CA. AS PER REPORT OF INSPECTOR DATED 30.11.2011 NO SUCH PERSON HAS EVER RESIDED IN SUCH PREMISES. REPORT OF SHRI AJAY KUMAR INSPECTOR IS ENCLOSED AS ANNEXURE (ANNEXURE -20) REPORT FROM KOLKATA S NO. NAME OF THE SHAREHOLDER REPORT AS RECEIVED I N RESPONSE TO COMMISSION FROM KOLKATA 1. GANGA BUILDERS LTD ASSESSEE MADE A SUBMISSION THROUGH DAK AND SUBMITTED THAT THE COMPANY HAS APPLIED FOR SHARE OF M/S ADAMINE CONSTRUCTION PVT LTD IN F.Y 2007- 34 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. 08. THE ASSESSEE HAS NOT SPECIFIED FOR HOW MANY SHARES AND AT WHAT PREMIUM. THE ASSESSEE HAS ENCLOSED BANK STATEMENT SHOWING PAYMENT WAS MADE BY CHEQUE NO. 875638 DATED 07.02.2008 FOR RS. 55 00 000/- AND CHEQUE NO. 875656 DATED 07.02.2008 FOR RS. 40 00 000/- DRAWN ON DEUTSCHE BANK. THE ASSESEE HAS NOT ENCLOSED THE BANK STATEMENT SHOWING THE SOURCE OF FUND FOR SHARE APPLICATION MONEY. THE COMPANY HAS SHOWN NIL INCOME FOR A.Y. 2008-09 2. SHIVLAXMI EXPORTS LTD ASSESSEE MADE A SUBMISSIO N THROUGH DAK AND SUBMITTED THAT THE COMPANY HAS APPLIED FOR 90000 EQUITY SHARE OF RS. 10/- OF M/S ADAMINE CONSTRUCTION PVT LTD EACH AT A PREMIUM OF RS. 90/- AND ALLOTTED THE SAME. THE ASSESSEE HAS NOT GIVEN THE REASON FOR PAYING SUCH A HIGH PREMIUM. THE ASSESSEE HAS ENCLOSED BANK STATEMENT SHOWING PAYMENT WAS MADE BY CHEQUE NO. 611654 DATED 08.02.2008 FOR RS. 50 00 000/- AND CHEQUE NO. 611515 DATED 08.02.2008 FOR RS 40 00 000/- DRAWN ON DEUTSCHE BANK. THE ASSESSEE HAS NOT ENCLOSED THE BANK STATEMENT SHOWING THE SOURCE OF FUND FOR SHARE APPLICATION MONEY. THE COMPANY HAS SHOWN NIL INCOME FOR A.Y. 2008-09. (5) ON THE BASIS OF THE SAID EXERCISE THE LEARNED ASSESSING OFFICER HAS OBSERVED AND CONCLUDED AS FOLLOWS:- THE IDENTITY AND THE CREDITWORTHINESS OF THE INVEST ORS ARE NOT ESTABLISHED AS ALL THE INVESTORS ARE SHOWING A NOMINAL INCOME. NEITHER THE INVESTOR COMPANY AND NOR THE ASSESSEE COMPANY HAS PRODUCED AN Y PROOF TO SUBSTANTIATE THE CREDIT WORTHINESS OF THE INVESTORS (FOR EXAMPLE BALANCE SHEET OF THE INVESTOR COMPANY); THE GENUINENESS OF THE TRANSACTIONS IS ALSO IN DOUBT AS THE INVESTORS HAVE NOT ENCLOSED THE BANK STATEMENT SHOWING THE SOURCE O F FUND FOR SHARE APPLICATION MONEY. 35 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (6) THE LEARNED ASSESSING OFFICER HAS ACCORDINGLY HELD THAT THE CREDITWORTHINESS OF THE INVESTORS AND THE GENUINENES S OF THE TRANSACTIONS IS IN DOUBT AND HAS ACCORDINGLY TREATED SHARE CAPITAL/A PPLICATION MONEY AND SHARE PREMIUM AMOUNTING TO RS.5 15 00 000/- AS UNEXPLAI NED AND ADDED THIS SAME TO THE TAXABLE INCOME OF THE APPELLANT CO MPANY U/S 68 OF THE INCOME TAX ACT 1961. (7) THE ASSESSING OFFICER IN THE COURSE OF ASSESSME NT PROCEEDINGS HAD DESIRED THE APPELLANT COMPANY TO FURNISH THE DET AILS OF THE AMOUNT RECEIVED AND EVIDENCE IN SUPPORT OF IDENTITY AND CRE DITWORTHINESS OF THE APPLICANTS AND ALSO THE GENUINENESS OF THE TRANSACT ION OF ALL THE PARTIES SITUATED AT MUMBAI AND KOLKATA FROM WHOM THE SHARE C APITAL AND SHARE PREMIUM HAD BEEN RECEIVED. IN RESPONSE THE APPELL ANT COMPANY FILED COPIES OF CONFIRMATIONS INCOME TAX RETURN ACKNOWLEDG EMENTS AND BANK ACCOUNTS FROM ALL THE PARTIES ESTABLISHING THE IDENT ITY GENUINENESS AND SOURCES OF TRANSACTION REGARDING SHARE CAPITAL AND S HARE PREMIUM WITH THE ASSESSING OFFICER. THE ENTIRE SHARE APPLICATION MON EY HAD BEEN RECEIVED BY THE APPELLANT COMPANY THROUGH NORMAL BANKING CHANNEL S BY ACCOUNT PAYEE CHEQUES/DEMAND DRAFTS. FURTHERMORE THE SAID CO NFIRMATIONS ALSO CLEARLY REVEAL THE SOURCE OF FUNDS PARTICULARS OF THE BANK ACCOUNT THROUGH WHICH PAYMENT HAS BEEN RECEIVED AND THE INCOME-TAX PARTICULARS WHICH GO ON TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS O F THE VARIOUS PARTIES AUTHORITATIVELY AND CONCLUSIVELY. (8) AS A RESULT OF THE ABOVE DOCUMENTS BEING FILED BEFORE THE LEARNED ASSESSING OFFICER IN RESPECT OF ALL THE PAR TIES IN RESPECT OF WHICH NO CAUSE EXISTS AS TO RECOURSE TO THE PROVISIONS OF SECT ION 68 OF THE INCOME-TAX 36 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. ACT 1961 IN AS MUCH AS THE ONUS CAST ON THE APPELLA NT COMPANY VIS--VIS THE GENUINENESS OF THE TRANSACTION AND CREDIT WORTH INESS OF THE PARTIES HAS BEEN EFFECTIVELY AND COMPLETELY DISCHARGED. THE AC TION OF THE LEARNED ASSESSING OFFICER IS NOT ONLY AGAINST THE SPIRIT BUT ALSO LETTER OF THE PROVISIONS RELATING TO ESTABLISHING THE IDENTITY OF CASH CREDITORS AS EMBODIED IN THE INCOME TAX ACT 1961. INDEPENDENT INVESTIG ATIONS FROM PARTIES OVER WHICH AN APPELLANT COMPANY DOES NOT HAVE ANY CONTRO L CANNOT BE USED TO FORM ANY CONCLUSION ADVERSE OF OTHERWISE IN RESPECT OF THE APPELLANT COMPANY. AS SUCH THE SAID ADDITION IS NEITHER WARRA NTED NOR JUSTIFIED OR SUSTAINABLE ON THE FACTS OF THE CASE. (9) THE ABOVE FACTUAL STATEMENTS AND ARGUMENTS CAN BE FURTHER BUTTRESSED AND REINFORCED BY AN ANALYSIS OF THE RELE VANT LEGAL PROVISIONS AND LEGAL PRONOUNCEMENTS ON THE ISSUE. BEFORE PROCEEDING FURTHER WITH THE MATTER IT WOULD BE WORTHWHILE TO REPRODUCE THE PROVI SIONS OF S.68 OF THE INCOME TAX ACT 1961 WHICH READS AS FOLLOWS:- S 68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOK S OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE OFFICE R SATISFACTORY THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INC OME OF THE ASSESSEE OF THAT PREVIOUS YEAR. (10) THE ABOVE SECTION ENJOINS UPON AN APPELLANT CO MPANY THE DUTY TO ADEQUATELY SATISFACTORILY AND SUBSTANTIVELY EXPLAIN THE SOURCE OF ANY CASH CREDIT IN HIS BOOKS OF ACCOUNTS AND NO FURTH ER. TO PUT IT DIFFERENTLY AN APPELLANT COMPANYS BURDEN OF PROOF WOULD STAND D ISCHARGED IF HE IS ABLE TO PROVE THE NATURE AND SOURCE OF THE CASH CREDI T RECEIVED AND THUS HIS 37 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. ONUS OF PROOF CANNOT EXTEND TO FAILURE TO PROVE THE SOURCE OF THE PROOF WITH A VIEW TO ARRIVE AT THE ULTIMATE SOURCE OF FUNDS. AS LONG AS THE NATURE SOURCE AND IDENTITY OF THE INVESTOR IS ESTABLISHED NO FURTHER ONUS OF PROOF CAN BE ENJOINED ON IT. IN THE INSTANT CASE NO CASE CAN BE MADE OUT TO DOUBT THE GENUINENESS EXISTENCE OR IDENTITY OF THE INVES TORS AND AS SUCH NO CAUSE EXISTS FOR THE INVOCATION OF S. 68. (11) AN ANALYSIS OF THE PROVISIONS OF SECTION 68 O F THE INCOME-TAX ACT 1961 WOULD MAKE IT CLEAR THAT IN ORDER TO DISCH ARGE THE ONUS THE ASSESSEE MUST PROVE THE FOLLOWING:- (I) IDENTITY OF THE CREDITOR; (II) CAPACITY OF THE CREDITOR TO ADVANCE MONEY; AND (III) GENUINENESS OF THE TRANSACTION . (12) THE QUESTION OF THE MANNER IN WHICH THE ONUS U/S 68 HA S TO BE DISCHARGED IS TO BE LOOKED AT WITH DIFFERENT PERSPE CTIVES AND VARYING PARAMETERS IN EACH DIFFERENT CIRCUMSTANCE AND NO STA NDARDS/ GUIDELINES CAN BE LEAD OUT IN THIS REGARD. (13) IN THE INSTANT CASE THERE IS NO MATERIAL ON R ECORD TO PROVE OR EVEN REMOTELY SUGGEST THAT THE SHARE APPLICATION MON EY RECEIVED ACTUALLY EMANATED FOR THE APPELLANT COMPANY. IN FACT IT MAY BE REITERATED THAT THE SHARE APPLICATION MONEY WAS RECEIVED FROM INDEPENDE NT LEGALLY INCORPORATED COMPANIES THROUGH NORMAL AND REGULAR BA NKING CHANNELS WHICH FACT STANDS DULY CORROBORATED AND CONFIRMED BY THE CONFIRMATIONS BANK STATEMENTS AND INCOME TAX RETURNS OF THE SHARE APPLICANTS DULY PLACED ON RECORD. IN FACT NO EVIDENCE DIRECT OR INDIRECT CONCLUSIVE OR EVEN 38 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. CIRCUMSTANTIAL EXISTS TO DOUBT IN ANY MANNER THE IDE NTITY AND CREDIT WORTHINESS OF THE PARTIES AND GENUINENESS OF THE TRA NSACTIONS ENTERED INTO. (14) THE APPELLANT COMPANY HAS DISCHARGED ITS ONUS BY SATISFACTORILY DEALING WITH ALL THE ISSUES IN RESPEC T OF WHICH ONUS HAS BEEN CAST ON IT U/S 68 OF THE INCOME-TAX ACT 1961 AS WO ULD BE CLEAR FROM THE FOLLOWING DISCUSSION:- (I) WITH RESPECT TO THE IDENTITY OF THE CREDITORS THE N AMES ADDRESSES AND PANS OF THE ASSESSEE HAS BEEN DULY FURNI SHED AND PROVIDED TO THE LD ASSESSING OFFICER DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS AND NO ERROR OR SHORT COMING HAS EITHER BEEN DETERMINED OR POINTED OUT THEREIN SINCE ALL TH E SHARE APPLICANTS ARE DULY IDENTIFIED WITH DULY ALLOTTED PAN S WHICH ARE SUBSISTING IN THE RECORD OF THE INCOME TAX DEPARTME NT. MOREOVER ALL THE SHARE APPLICANTS ARE COMPANIES DULY INCORPOR ATED AFTER FOLLOWING THE PROCEDURE LAID OUT IN THE COMPANIES A CT 1956. THUS NO DOUBT EXISTS OR EVEN ARISES WITH RESPECT TO THE IDENTITY OF THE CREDITORS. (II) WITH RESPECT TO THE CAPACITY/CREDIT WORTHINESS OF T HE SHARE APPLICANTS TO ADVANCE MONEY AND THE GENUINENESS OF THE TRANSACTIONS IT NEEDS TO BE UNDERSTOOD REITERATED AND RE- EMPHASIZED THAT THE ENTIRE TRANSACTION WAS CONSUMM ATED THROUGH ACCOUNT PAYEE CHEQUES THROUGH REGULAR BANKI NG CHANNELS WHICH FACT HAS NOT BEEN DISPUTED OR DENIED IN ANY MANNER. AS SUCH GIVEN THE ENTIRE FACTUAL SITUATIO N OF THE CASE NO DOUBT ARISES AND REMAINS AS TO THE CAPACITY AND C REDIT WORTHINESS OF THE PARTIES AND GENUINENESS OF THE TRA NSACTIONS. 39 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (15) IN THIS CONNECTION YOUR HONOURS ATTENTION IS A LSO INVITED TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. STELLER INVESTMENTS LIMITED [(1991) 192 ITR 287 (DELHI)] WHEREIN IT HAS BEEN CLEARLY HELD THAT ANY INCREASED CAPITAL IS NOT ASSESSABLE IN THE HANDS OF THE COMPANY. THE RELEVANT OBSERVAT IONS OF THE LEARNED JUDGES ARE AS FOLLOWS:- IT IS EVIDENT THAT EVEN IF IT BE ASSUMED THAT THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL WERE NOT GENUINE NEVER THELESS UNDER NO CIRCUMSTANCES CAN THE AMOUNT OF SHARE CAP ITAL BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. IT MAY BE THAT THERE ARE SOME BOGUS SHAREHOLDERS IN WHOSE NAMES SH ARES HAD BEEN ISSUED AND THE MONEY MAY HAVE BEEN PROVIDED BY SOME OTHER PERSONS. IF THE ASSESSMENT OF THE PERSONS WHO ARE ALLEGED TO HAVE REALLY ADVANCED THE MONEY IS SOUGHT TO BE R EOPENED THAT WOULD HAVE MADE SOME SENSE BUT WE FAIL TO UNDE RSTAND AS TO HOW THIS AMOUNT OF INCREASED SHARE CAPITAL CAN B E ASSESSED IN THE HANDS OF THE COMPANY ITSELF. (16) SUBSEQUENT TO THE ABOVE AN APPEAL FILED BY THE DEPARTMENT AGAINST THE JUDGEMENT/OBSERVATIONS OF THE SUPREME COU RT WAS ALSO DISMISSED AND THE HONBLE SUPREME COURT DID NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE HIGH COURT IN THE CA SE OF CIT VS STELLER INVESTMENT LTD [(2001) 251 ITR 263 (SC)]. AS SUCH TH E OBSERVATIONS OF THE HONBLE DELHI HIGH COURT HAVE OBTAINED THE APPROVAL OF THEIR LORDSHIP OF THE SUPREME COURT AND ACCORDINGLY ATTAINED JUDICIAL FI NALITY AND STAMP OF APPROVAL. 40 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (17) IN ADDITION YOUR HONORS KIND ATTENTION IS AL SO INVITED TO THE FOLLOWING JUDGEMENT OF THE DELHI HIGH COURT IN THE CA SE OF COMMISSIONER OF INCOME TAX V LOVELY EXPORTS PVT LTD [(2008) 299 ITR 268 (DELHI)] HAS HELD AS FOLLOWS :- IN THE CASE OF A COMPANY THE FOLLOWING ARE THE PR OPOSITIONS OF LAW UNDER SECTION 68. THE ASSESSEE HAS TO PRIMA FAC IE PROVE (1) THE IDENTITY OF THE CREDITOR/ SUBSCRIBER; (2) THE G ENUINENESS OF THE TRANSACTION NAMELY WHETHER IT HAS BEEN TRANSM ITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDI TOR / SUBSCRIBER; (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR / SUBSCRIBER ARE FURNISHED TO THE DE PARTMENT ALONG WITH COPIES OF THE SHAREHOLDERS REGISTER SHA RE APPLICATION FORMS SHARE TRANSFER REGISTER ETC IT WOULD CONST ITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSEE; (5 ) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADV ERSE INFERENCE ONLY BECAUSE THE CREDITOR/ SUBSCRIBER FAI LS OR NEGLECTS TO RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT S TAND DISCHARGED IF THE CREDITOR / SUBSCRIBER DENIES OR REPUDIATES T HE TRANSACTION SET UP BY THE ASSESSEE NOR SHOULD THE ASSESSING OFF ICER TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT WITH OUT MORE AGAINST THE ASSESSEE; AND (7) THE ASSESSING OFFICER IS DUTY BOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE CR EDITOR/ SUBSCRIBER THE GENUINENESS OF THE TRANSACTION AND TH E VERACITY OF THE REPUDIATION. IN THE CASE OF A PUBLIC ISSUE THE COMPANY CONCERNED CANNOT BE EXPECTED TO KNOW EVERY DETAIL PER TAINING TO THE IDENTITY AS WELL AS FINANCIAL WORTH OF EACH OF ITS SUBSCRIBES. 41 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. THE COMPANY MUST HOWEVER MAINTAIN AND MAKE AVAILA BLE TO THE ASSESSING OFFICER FOR HIS PERUSAL ALL THE INFO RMATION CONTAINED IN THE STATUTORY SHARE APPLICATION DOCUMEN TS. A DELICATE BALANCE MUST BE MAINTAINED WHILE WALKING THE TIGHTROPE OF SECTIONS 68 AND 69 OF THE INCOME TAX ACT. THE BURDEN OF PROOF CAN SELDOM BE DISCHARGED TO THE HILT BY THE ASS ESSEE; IF THE ASSESSING OFFICER HARBOURS DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTION HE IS EMPOWERED TO CARRY OUT THOROUG H INVESTIGATIONS. BUT IF THE ASSESSING OFFICER FAILS TO UNEARTH ANY WRONG OR ILLEGAL DEALINGS HE CANNOT ADHERE TO HIS SUSPICIONS AND TREAT THE SUBSCRIBED CAPITAL AS THE UNDISCLOSED INCOM E OF THE COMPANY. (18) FURTHER YOUR HONORS KIND ATTENTION IS ALSO INV ITED TO THE DECISION OF THEIR LORDSHIP OF THE HONBLE SUPREME CO URT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD [(2008) 216 CTR 195 (SC)] WHEREIN THE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AGAINST THE ORDER OF THE DELHI HIGH COURT HAS BEEN DISMISSED WITH THE FOLLOWING REMARKS :- WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FO R THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEI VED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHO SE NAMES ARE GIVEN TO THE AO THEN THE DEPARTMENT IS F REE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN AC CORDANCE WITH LAW. HENCE WE FIND NO INFIRMITY WITH THE IMPU GNED JUDGEMENT. (19) THE ABOVE DECISION OF THE HONBLE SUPREME COURT FOLLOWS THE EARLIER DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF STELLER 42 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. INVESTMENT LTD CITED SUPRA AND FURTHER REINFORCES TH E ARGUMENTS PUT FORWARD FOR AND ON BEHALF OF THE APPELLANT COMPANY. (20) IN PARTICULAR WITH REGARD TO THE ISSUE OF EST ABLISHING THE CREDITWORTHINESS OF THE PARTIES YOUR HONOURS ATTENT ION IS INVITED TO THE FOLLOWING RECENT JUDGEMENTS WHEREIN IT HAS BEEN CONC LUSIVELY HELD RELYING ON THE DECISIONS IN THE CASE OF M/S LOVELY EXPOR TS PVT LTD CITED ABOVE THAT AS LONG AS THE IDENTITY OF THE SHARE APPLICANT WAS PROVED THE BURDEN OF PROVING THE CREDITWORTHINESS WAS NOT ON THE ASSESSE E:- COMMISSIONER OF INCOME-TAX UDAIPUR V. BHAVAL SYNTHE TICS [(2013) 35 TAXMANN.COM 83 (RAJASTHAN)]; SHREE BARKHA SYNTHETICS LTD V. ASSISTANT COMMISSION ER OF INCOME-TAX [(2006) 155 TAXMAN 289 (RAJ)]; COMMISSIONER OF INCOME-TAX BHOPAL (M.P) V. PEOPLES GENERAL HOSPITAL LTD [(2013) 35 TAXMANN.COM 444(MADHYA PRAD ESH); COMMISSIONER OF INCOME-TAX MEERUT V. KAMNA MEDICAL CENTRE (P) LTD [(2013) 35 TAXMANN.COM 470(ALLAHABAD)]; COMMISSIONER OF INCOME-TAX FARIDABAD V. GP INTERNA TIONAL LTD [(2010) 186 TAXMAN 229 (PUN &HAR)]; CIT V DWARKADHISH INVESTMENT PVT LTD AND DWARKADHIS H CAPITAL PVT LTD [(2011) 330 ITR 298 (DELHI)]; CIT V. WINSTRAL PETROCHEMICALS PVT LTD [(2011) 330 ITR 603 (DELHI)]; COMMISSIONER OF INCOME TAX V. GANGOUR INVESTMENT LTD [(2011) 335 ITR 359 (DELHI)]; MOD CREATIONS PVT LTD VS. INCOME TAX OFFICER [(2012 ) 354 ITR 282 (DELHI)]. 43 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (21) IT SHOULD BE SPECIFICALLY NOTED IN THE INSTAN T CASE THERE WAS NO DENIAL AT ANY STAGE OF THE INVESTIGATION OR THE ASS ESSMENT PROCEEDINGS BY ANY OF THE SUBSCRIBERS TO THE SHARE CAPITAL OF THEIR HAVING INVESTED MONEY BY WAY OF SHARE APPLICATION MONEY IN THE APPELLANT CO MPANY. MOREOVER THERE IS NO SHRED OF EVIDENCE DIRECT INDIRECT OR EVEN PERIPHERAL OF THE SHARE APPLICATION MONEY HAVING EMANATED FROM THE COFFERS OF THE APPELLANT COMPANY. IN FACT THE INVESTOR COMPANIES IN THEI R REPLIES FILED BEFORE THE DEPARTMENT (IN RESPONSE TO SUMMONS U/S 131 OF THE ACT) HAVE DULY CONFIRMED THE FACTUM OF THEIR HAVING MADE THE INVE STMENT AND HAVE FURTHER BUTTRESSED THE SAME WITH THE FOLLOWING DOCUMENTS :- (A) CONFIRMATIONS; (B) ACKNOWLEDGEMENT FOR FILING OF INCOME TAX RETURNS; (C) BANK STATEMENTS REFLECTING THE TRANSACTIONS WITH TH E APPELLANT COMPANY; (D) COPIES OF ANNUAL ACCOUNTS. (22) IN VIEW OF THE ABOVE NO DOUBT REMAINS AS TO T HE IDENTITY OF THE INVESTORS THEIR CREDIT WORTHINESS AND THE GENUINEN ESS OF THE TRANSACTIONS AND CORRESPONDINGLY NO ADVERSE INFERENCE IS CALLED FOR. (23) IN FACT IN THE INSTANT CASE RELIANCE IS PL ACED ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS KAMDHENU S TEEL & ALLOYS LIMITED AND OTHERS [(2012)206 TAXMAN 254(DELHI)] WHEREIN TH E FOLLOWING HAS BEEN HELD :- 38. EVEN IN THAT INSTANT CASE IT IS PROJE CTED BY THE REVENUE THAT THE DIRECTORATE OF INCOME TAX (INVESTI GATION) HAD 44 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. PURPORTEDLY FOUND SUCH A RACKET OF FLOATING BOGUS COM PANIES WITH SOLE PURPOSE OF LANDING ENTRIES. BUT IT IS U NFORTUNATE THAT ALL THIS EXERCISE IS GOING IN VAIN AS FEW MORE STEP S WHICH SHOULD HAVE BEEN TAKEN BY THE REVENUE IN ORDER TO FIND OUT CAUSAL CONNECTION BETWEEN THE CASH DEPOSITED IN THE BANK ACC OUNTS OF THE APPLICANT BANKS AND THE ASSESSEE WERE NOT TAKEN . IT IS NECESSARY TO LINK THE ASSESSEE WITH THE SOURCE WHEN THAT LINK IS MISSING IT IS DIFFICULT TO FASTEN THE ASSESSEE WIT H SUCH A LIABILITY. 39. WE MAY REPEAT WHAT IS OFTEN SAID THAT A DELIC ATE BALANCE HAS TO BE MAINTAINED WHILE WALKING ON THE T IGHT ROPE OF SECTIONS 68 AND 69 OF THE ACT. ON THE ONE HAND NO D OUBT SUCH KIND OF DUBIOUS PRACTICES ARE RAMPANT ON THE OTHER HAND MERELY BECAUSE THERE IS AN ACKNOWLEDGEMENT OF SUCH PRACTICES WOULD NOT MEAN THAT IN ANY OF SUCH CASES COMING BEFO RE THE COURT THE COURT HAS TO PRESUME THAT THE ASSESSEE I N QUESTIONS AS INDULGED IN THAT PRACTICE. TO MAKE THE ASSESSEE R ESPONSIBLE THERE HAS TO BE PROPER EVIDENCE. IT IS EQUALLY IMPO RTANT THAT AN INNOCENT PERSON CANNOT BE FASTENED WITH LIABILITY W ITHOUT COGENT EVIDENCE. ONE HAS TO SEE THE MATTER FROM THE POINT OF VIEW OF SUCH COMPANIES (LIKE THE ASSESSEE HEREIN) WHO INVIT E THE SHARE APPLICATION MONEY FROM DIFFERENT SOURCES OR EVEN PU BLIC AT LARGE. IT WOULD BE ASKING FOR A MOON IF SUCH COMPANIES ARE ASKED TO FIND OUT FROM EACH AND EVERY SHARE APPLICANT/SUBSCRIB ERS TO FIRST SATISFY THE ASSESSEE COMPANIES ABOUT THE SOURCE OF THEIR FUNDS BEFORE INVESTING. IT IS FOR THIS REASON THE BALANC E IS STRUCK BY CATENA OF JUDGEMENTS IN LAYING DOWN THAT THE DEPART MENT IS NOT REMEDILESS AND IS FREE TO PROCEED TO REOPEN THE IND IVIDUAL ASSESSMENT OF SUCH ALLEGED BOGUS SHAREHOLDERS IN AC CORDANCE 45 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. WITH THE LAW. THAT WAS PRECISELY THE OBSERVATION O F THE SUPREME COURT IN LOVELY EXPORT (SUPRA) WHICH HOLDS THE FIELDS AND IS BINDING. 40. IN CONCLUSION WE ARE OF THE OPINION THAT ONCE ADEQUATE EVIDENCE/MATERIAL IS GIVEN AS STATED BY US ABOVE WHICH WOULD PRIMA FACIE DISCHARGE THE BURDEN OF THE ASSESSEE IN PROVING THE IDENTITY OF SHAREHOLDERS GENUINENES S OF THE TRANSACTION AND CREDITWORTHINESS OF THE SHAREHOLDER S THEREAFTER IN CASE SUCH EVIDENCE IS TO BE DISCARDED O R IT IS PROVED THAT IT HAS CREATED EVIDENCE THE REVENUE IS SUPPOSED TO MAKE THOROUGH PROBE OF THE NATURE INDICATED ABOVE BEFORE IT COULD NAIL THE ASSESSEE AND FASTEN THE ASSESSEE WITH SUCH A LIABILITY UNDER SECTIONS 68 AND 69 OF THE ACT. (24) IT WOULD ALSO BE PERTINENT TOPICAL AND RELE VANT TO MENTION HERE THAT THE SPECIAL LEAVE PETITION FIELD BEFORE THE HONBLE SUPREME COURT BY THE REVENUE AGAINST THE ABOVE DECISION OF THE HONBLE DEL HI HIGH COURT HAS BEEN SUBSEQUENTLY DISMISSED BY THEIR LORDSHIP OF THE SUPREME COURTS AND AS SUCH THE DECISION OF THE DELHI HIGH COURT IN TH E CASE OF CIT VS KAMDHENU STEEL & ALLOYS LIMITED AND OTHERS (SUPRA) HA S ATTAINED CONCLUSIVE JUDICIAL FINALITY. (25) TO CONCLUDE IT MAY BE SAID THAT ON THE BASI S OF THE FACTS DISCUSSED SUPRA AND THE RATIO OF THE ABOVE JUDGEMENTS MAKES IT CLEAR THAT IF THE SHARE APPLICANTS ARE IDENTIFIED AND IT IS ESTABLISHED TH AT THEY HAVE DEPOSITED MONEY IN THE COMPANY NO RECOURSE CAN BE MADE TO THE PROVISIONS OF S 68. THE APPELLANT COMPANY HAD PROVIDED ALL THE REQUISIT E PARTICULARS TO ESTABLISH THE IDENTITY OF THE SHARE APPLICANTS IN T HE CONFIRMATIONS ITRS AND 46 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. BANK STATEMENTS ALREADY FILED BEFORE THE ASSESSING OFFICER. THE VARIOUS ARGUMENTS ADVANCED BY THE LEARNED ASSESSING OFFICER ARE FRIVOLOUS AND IRRELEVANT AND THE ONUS ENJOINED UPON THE APPELLANT C OMPANY BY THE PROVISIONS OF SECTION 68 STANDS NOT ONLY ADEQUATELY BUT ALSO COMPLETED SATISFIED. (26) ACCORDINGLY SINCE IT IS CLEAR THAT IF THE SHA REHOLDERS / SHARE APPLICANTS ARE IDENTIFIED AND IT IS ESTABLISHED THA T THEY HAVE INVESTED MONEY IN THE PURCHASE OF SHARES NO RECOURSE CAN BE MADE TO THE PROVISIONS OF S 68. IN THE INSTANT CASE THE APPELLANT COMPANY HAD PROVI DED ALL THE REQUISITE PARTICULARS TO ESTABLISH THE IDENTITY OF THE SHAR E APPLICANTS IN THE CONFIRMATIONS ALREADY FILED BEFORE THE ASSESSING OF FICER. THE LD. AR ALSO PLACED RELIANCE ON THE FOLLOWING D ECISIONS :- (I) CIT VS. GANGESHWARI METAL PVT. LTD. ITA. NO. 597/20 12 [JUDGEMENT DATED 21.01.2013 (DELHI HIGH COURT); (II) PR. CIT VS. N. C. CABLES LTD. (2017) 391 ITR 11 (DEL .); (III) PR. CIT VS. SOFTLINE CREATIONS P. LTD. (2016) 387 I TR 636 (DEL.); (IV) CIT VS. REAL TIME MARKETING P. LTD. (2008) 306 ITR 35 (DEL.); (V) CIT VS. VALUE CAPITAL SERGVICES P. LTD. (2008) 307 ITR 334 (DEL.); (VI) CIT VS. ORBITAL COMMUNICATION (P) LTD. (2010) 327 I TR 560 (DEL.); 47 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. (VII) CIT VS. WINSTRAL PETROCHEMICALS P. LTD. (2011) 330 ITR 603 (DEL.); (VIII) CIT VS. KAMDHENU STEEL AND ALLOYS LTD. (2014) 361 ITR 220 (DEL.). 17. HAVING GONE THROUGH THE ABOVE CITED DECISIO NS WE FIND THAT THE RATIO LAID DOWN THEREIN IS THAT THE PRIMARY ONUS LIE S UPON THE ASSESSEE TO ESTABLISH IDENTITY AND CREDITWORTHINESS OF THE CRED ITORS/ INVESTORS AS WELL AS GENUINENESS OF THE TRANSACTION AND AFTER DISCHARGING OF THE SAME ONUS SHIFTS UPON THE REVENUE TO PROVE THE DOCUMENTS FILED BY THE A SSESSEE WHILE DISCHARGING ITS PRIMARY ONUS AS FALSE TO ATTRACT AD DITION UNDER SECTION 68 OF THE ACT. IN ITS RECENT DECISION DATED 11.01.2017 I N THE CASE OF PR. CIT VS. N.C. CABLES LTD. (SUPRA) THE HONBLE JURISDICTIONAL HIGH C OURT OF DELHI HAS BEEN PLEASED TO HOLD THAT NO ADDITION CAN BE MADE UNDER S ECTION 68 OF THE I.T. ACT WHERE ASSESSEE IN THE CASE OF SHARE APPLICATION MON EY HAD FURNISHED DOCUMENTS TO EVIDENCE GENUINENESS OF TRANSACTIONS AN D IDENTITY AND CREDITWORTHINESS OF PARTIES BUT THERE WAS FAILURE ON THE PART OF THE ASSESSING OFFICER TO CONDUCT ADEQUATE AND PROPER ENQUIRY INTO M ATERIALS WHILE INVOKING SECTION 68 OF THE ACT. AGAIN IN THE CASE OF PR. CIT VS. SOFTLINE CREATIONS P. LTD. (SUPRA) THE ASSESSEE IN SUPPORT OF RECEIPT OF SHARE APPLICATION MONEY HAD FURNISHED PANS BANK DETAILS O F SHARE APPLICANTS AND AFFIDAVITS OF DIRECTORS OF THOSE SHARE APPLICAN T COMPANIES. THE HONBLE HIGH COURT OF DELHI HAS BEEN PLEASED TO HOLD THAT SH ARE APPLICATION MONEY CANNOT BE CONSIDERED AS UNEXPLAINED CASH CREDITS IN THE HANDS OF THE ASSESSEE. IN THE CASE OF CIT VS. VALUE CAPITAL SERVI CES P. LTD. (SUPRA) THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI WHILE DISM ISSING THE APPEAL OF THE REVENUE HAS BEEN PLEASED TO HOLD THAT THE ADDITIO NAL BURDEN WAS ON THE 48 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. DEPARTMENT TO SHOW THAT EVEN IF THE SHARE APPLICANT S DID NOT HAVE THE MEANS TO MAKE THE INVESTMENT INVESTMENT MADE BY THEM ACT UALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO B E TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. IN THE CASE OF CIT VS. ORB ITAL COMMUNICATION P. LTD. (SUPRA) THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF THE CLAIMED SHARE APPLICATION MONEY HAS BEEN PLEASED TO HOLD THAT WHERE SUBSTANTIAL EVIDENCE HAS BEEN PRODUCED BY THE ASSESS EE TO PROVE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF SHARE APPLICATIONS FAILURE TO PRODUCE CREDITOR IS NOT MATERIAL. IN THE CASE OF CIT VS. WINSTRAL PETRO CHEMICAL P. LTD. (SUPRA) IN THE CASE OF CASH C REDITS/SHARE APPLICATION MONEY THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI ON THE ISSUE OF BURDEN OF PROOF HAS BEEN PLEASED TO HOLD THAT INITI AL BURDEN IS ON ASSESSEE TO PROVE IDENTITY OF CREDITORS THE BURDEN THEN SHIF TS TO REVENUE TO PROVE THAT CREDITS WERE NOT GENUINE. IN THAT CASE WHILE D ISMISSING THE APPEAL OF THE REVENUE THE HONBLE HIGH COURT WAS PLEASED TO HOL D THAT IT HAD NOT BEEN DISPUTED THAT THE SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSEE COMPANY BY WAY OF ACCOUNT PAYEE CHEQUES THR OUGH NORMAL BANKING CHANNELS. ADMITTEDLY COPIES OF APPLICATIO N FOR ALLOTMENT OF SHARES WERE ALSO PROVIDED TO THE ASSESSING OFFICER. SINCE THE APPLICANT COMPANIES WERE DULY INCORPORATED WERE ISSUED PAN CARDS AND HAD BANK ACCOUNTS FROM WHICH MONEY WAS TRANSFERRED TO THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES THEY COULD NOT BE SAID TO BE NON-EXISTENT E VEN IF THEY AFTER SUBMITTING THE SHARE APPLICATIONS HAD CHANGED THEIR ADDRESSES OR HAD STOP FUNCTIONING HELD THE HONBLE HIGH COURT. 18. WHEN WE EXAMINE THE FACTS OF THE PRESENT CAS E IN VIEW OF THE ABOVE CITED RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI WE 49 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. FIND THAT FACTS ARE ALMOST SIMILAR. IN THE PRESENT CASE THERE WERE 6 INVESTOR COMPANIES CLAIMED TO HAVE INVESTED RS.5 15 00 000/- IN TOTAL IN THE ASSESSEE COMPANY. IN SUPPORT OF THEIR IDENTITY AND CREDITWORT HINESS AS WELL AS GENUINENESS OF THE TRANSACTIONS AS DISCUSSED ABOVE THE ASSESSEE HAD FILED BEFORE THE ASSESSING OFFICER THEIR (INVESTOR COMPA NIES) CONFIRMATIONS INCOME TAX RETURN ACKNOWLEDGEMENTS BANK ACCOUNTS WIT H THIS SUBMISSION THAT ENTIRE AMOUNT HAD BEEN RECEIVED BY THE ASSESSEE COMPANY THROUGH NORMAL BANKING CHANNELS BY ACCOUNT PAYEE CHEQUES/ DEM AND DRAFTS. THE CONFIRMATIONS FILED REVEALED THE SOURCE OF FUNDS PAR TICULARS OF THE BANK ACCOUNT THROUGH WHICH PAYMENTS WERE RECEIVED AND THE INCOME TAX PARTICULARS ESTABLISHING THE IDENTITY AND CREDITWOR THINESS OF THE RESPECTIVE SHARE APPLICANTS. WE THUS FIND THAT THE ASSESSEE HA D DISCHARGED ITS PRIMARY ONUS TO ESTABLISH IDENTITY AND CREDITWORTHINESS OF T HE INVESTOR COMPANIES AS WELL AS GENUINENESS OF THE TRANSACTIONS AS PER THE RATIO LAID DOWN IN THE ABOVE CITED DECISIONS OF THE HONBLE HIGH COURT. THE ASSESSING OFFICER ON THE OTHER HAND HAD DOUBTED THE GENUINENESS OF THE C LAIMED RECEIPT ON THE BASIS THAT SOME OF THE INVESTOR COMPANIES COULD NOT BE FOUND AT THE GIVEN ADDRESS AND THAT SOME OF THE INVESTOR COMPANIES RES PONDED TO THE SUMMONS BY POST BUT HAD NOT CAUSED APPEARANCE BEFORE HIM. T HE ASSESSING OFFICER ALSO HELD THAT INCOME OF MANY OF THE INVESTOR COMPA NIES WAS TOO LOW OR MEAGER TO ENABLE THEM TO MAKE SUCH LARGE INVESTMENTS IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY. THE ASSESSING OFFICER ALS O OBSERVED THAT THERE APPEARED NO JUSTIFICATION FOR LARGE COMPONENTS OF SH ARE PREMIUM PAID TO THE ASSESSEE ALONG WITH THE SHARE CAPITAL. THE ASSESSI NG OFFICER ALSO REMAINED SUSPICIOUS ABOUT THE CLAIMED INVESTOR COMPANIES ON TH E BASIS OF REASONS RECORDED FOR INITIATION OF REOPENING OF ASSESSMENT PROCEEDINGS BASED ON THE 50 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. REPORT RELATING TO SURVEY CONDUCTED AT THE PREMISES O F THE ASSESSEE THAT THE BUSINESS PREMISES OF THE ASSESSEE ACTUALLY BELONG TO BHUSHAN STEEL LTD. AND SEVERAL OTHER COMPANIES WERE HAVING THEIR REGISTERED OFFICES IN THE SAME PREMISES. THE SUBMISSION OF THE ASSESSEE IN THIS RE GARD REMAINED THAT THERE IS NO LAW THAT MORE THAN ONE COMPANY CANNOT HAVE IT S REGISTERED OFFICE AT ONE ADDRESS AND THAT THERE IS NO LAW THAT COMPANIES CANNOT CHANGE THEIR REGISTERED OFFICES. IT WAS SUBMITTED THAT BUSINESS RA ISE CAPITAL AND SUCH CAPITAL IS ROTATED IN ECONOMY FOR INCREASING PRODUCT ION AND TRADE AND FOR MAKING MORE EFFICIENT USE OF CAPITAL. COMPANIES CHA NGE AND SOMETIMES IN QUICK SUCCESSION. THIS IS THE NORMAL FORMATION OF C APITAL IN ANY OPEN ECONOMY AND THE PROCESS OF CAPITAL FORMATION CANNOT BE TAKEN TO BE REPRESENTING ONLY UNACCOUNTED FUNDS OR IMPEDED. IT W AS SUBMITTED THAT ALL THE COMPANIES HAVING REGISTERED OFFICE AT THE PREMIS ES UNDISPUTEDLY BELONGED TO BHUSHAN GROUP. THE SOURCES OF CAPITAL INT RODUCED IN THESE COMPANIES WERE ESTABLISHED DURING THE RESPECTIVE ASS ESSMENT PROCEEDINGS. IT WAS FURTHER CONTENDED THAT NO EVIDENCE WAS FOUND D URING SEARCH TO INDICATE INTRODUCTION OF CASH IN THE FORM OF SHARE C APITAL. IT IS ALSO PERTINENT TO MENTION OVER HERE THAT OUT OF TOTAL 6 INVESTOR CO MPANIES NOTICES COULD NOT BE SERVED IN CASE OF 2 COMPANIES AS THEY WERE N OT AVAILABLE ON THE GIVEN ADDRESSES AND IN CASE OF 1 COMPANY NOTICE COULD NOT BE SERVED AS THE PREMISES WAS FOUND LOCKED ON VARIOUS DAYS. THE REMAI NING 4 COMPANIES HAD RESPONDED AND HAD FILED THEIR SUBMISSIONS. HOWE VER THERE IS NO DISPUTE THAT IN CASE OF ALL THE 6 INVESTOR COMPANIES THE ASSESSEE HAD FILED PRIMARY DOCUMENTS AND HAD ACCORDINGLY DISCHARGED IT S INITIAL ONUS TO ESTABLISH IDENTITY AND CREDITWORTHINESS OF THE INVE STOR COMPANIES AND GENUINENESS OF THE TRANSACTION AS THERE IS NO DISPUT E THAT ALL THE TRANSACTIONS 51 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. HAVE BEEN DONE THROUGH BANKING CHANNELS I.E. THROUGH ACCOUNT PAYEE CHEQUES AND DEMAND DRAFTS. WE THUS FIND THAT THE ASS ESSING OFFICER HAS FAILED TO DISCHARGE ITS ONUS TO PROVE THAT THE DOCUME NTS FILED BY THE ASSESSEE AS DISCUSSED ABOVE WERE FALSE OR FABRICATED AS THE ASSESSING OFFICER HAS NOT MADE ANY EFFORTS TO VERIFY THOSE DOCUMENTS ESPECIALL Y WHEN THERE IS NO DISPUTE THAT ALL THE INVESTOR COMPANIES WERE FILING THEIR RETURNS OF INCOME AND WERE BEING ASSESSED BY THE DEPARTMENT. THE ASSE SSING OFFICER ON THE CONTRARY REMAINED SUSPICIOUS ON THE CLAIMED RECEIPT F ROM THE INVESTOR COMPANIES ON SOME OTHER FACTORS LIKE SOME OF THEM W ERE NOT FOUND ON THEIR GIVEN ADDRESSES SOME OF THEM HAD FURNISHED THEIR SUB MISSIONS THROUGH POSTS AND SOME OF THEM WERE NOT HAVING SUFFICIENT IN COME ETC. AS DISCUSSED ABOVE. UNDER THESE CIRCUMSTANCES WE ARE OF THE VI EW THAT THE LD. CIT (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.5 15 00 000./- MADE UNDER SECTION 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL AND SHARE PREMIUM. SINCE THE FIRST APPELLATE ORDER IS BASED UPON THE RATIO LAID DOWN IN THE ABOVE CITED DECISIONS OF THE HONBLE JUR ISDICTIONAL HIGH COURT OF DELHI WE DO NOT FIND REASON TO INTERFERE THEREW ITH. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 9. IT MAY BE NOTED HERE THAT IN THIS CASE FIVE P ARTIES FROM MUMBAI AND KOLKATA ARE SAME AS HAVE BEEN CONSIDERED IN THE PRESENT DEPARTMENTAL APPEAL. EVEN IF MUMBAI BASED C OMPANIES HAVE NOT RESPONDED TO THE LETTER ISSUED BY THE A.O HOWEVER THREE OF THEM HAVE ALREADY BEEN FOUND EXISTING AND GENUINE COMPANIES AND TWO OF THE COMPANIES FROM KOLKATA BAS ED ARE 52 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. ALSO FOUND EXISTING AND GENUINE IN THE CASE OF ACIT CENTRAL CIRCLE-13 NEW DELHI VS. M/S. ADAMINE CONSTRUCTION PVT. LTD. (SUPRA). ALL KOLKATA PARTIES CONFIRMED GENUINENESS OF TRANSACTIONS IN THEIR REPLY BEFORE A.O. THEREFORE THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE SAID JUDGMENTS. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. ARL INFRATECH LTD. 394 ITR 383 CONSIDERED THE IDENTICA L ISSUE OF SHARE APPLICATION MONEY IN WHICH THE ASSESSEE FILED PAN AND OTHER DETAILS OF THE INVESTOR COMPANIES. NO DIRECT RELATION WAS ALSO FOUND BETWEEN ASSESSEE AND THE INVESTOR COMPAN IES. THEREFORE ADDITIONS DELETED WERE FOUND FULLY JUST IFIED. 10. THE HONBLE SUPREME COURT IN THE CASE OF CI T VS. LOVELY EXPORTS PVT. LTD. (2008) 216 CTR 195 HELD A S UNDER : (I) IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIV EN TO THE AO THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR I NDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT IT CANNOT BE REGARDED AS UND ISCLOSED INCOME OF ASSESSEE COMPANY. 53 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. 11. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAMDHENU STEEL & ALLOYS LTD. & ORS. 361 ITR 220 (D EL.) HELD AS UNDER : ONCE ADEQUATE EVIDENCE/MATERIAL IS GIVEN WHICH WOU LD PRIMA FACIE DISCHARGE THE BURDEN OF THE ASSESSEE IN PROVING THE IDENTITY OF SHAREHOLDERS GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE SHAREHOLDERS THEREAFTER IN CASE SUCH EVIDENCE IS TO BE DISCARDED OR IT IS PROVED THAT IT HAS CREATED EVIDENCE THE REVENUE IS SUPPOSED TO MAKE TH OROUGH PROBE BEFORE IT COULD NAIL THE ASSESSEE AND FASTEN THE ASSESSEE W ITH SUCH A LIABILITY UNDER S.68; AO FAILED TO CARRY HIS SUSPICION TO LOGICAL CO NCLUSION BY FURTHER INVESTIGATION AND THEREFORE ADDITION UNDER S.68 WAS NOT SUSTAINABLE. 12. THE HONBLE DELHI HIGH COURT IN THE CASE O F CIT VS. VRINDAVAN FARMS P. LTD. ETC. IN ITA.NO.71/2015 DATE D 12.08.2015 IN WHICH THE SOLE BASIS FOR THE REVENUE TO DOUBT THEIR CREDITWORTHINESS WAS THE LOW INCOME AS REFLECTED IN THEIR RETURN OF INCOME. IT WAS OBSERVED BY THE ITAT THAT THE AO HAD NOT UND ERTAKEN ANY INVESTIGATION OF THE VERACITY OF THE DOCUMENTS SUBMI TTED BY THE ASSESSEE THE DEPARTMENTAL APPEAL WAS DISMISSED BY THE HONBLE HI GH COURT. 13. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V S. LAXMAN INDUSTRIAL RESOURCES PVT. LTD. IN ITA.NO.16 9 OF 2017 DATED 14.03.2017 IN WHICH THE CIT(A) TOOK NOTE OF THE MATERIAL FILED BY THE ASSESSEE AND PROVIDED OPPORTUNITY TO THE AO IN RE MAND PROCEEDINGS. THE AO MERELY OBJECTED TO THE MATERIAL FURNISHED BUT DID NOT UNDERTAKE ANY VERIFICATION. THE CIT(A) DELETED THE ADDITION BY R ELYING UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF LOVELY EXPO RTS PVT.LTD. (SUPRA) AND 54 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS D IVINE LEASING & FINANCE LTD. [2008] 299 ITR 268. THE ITAT CONFIRMED THE OPINION OF THE LD.CIT(A). HONBLE HIGH COURT IN VIEW OF THE ABOVE FINDINGS NOTED THAT THE ASSESSEE HAD PROVIDED SEVERAL DOCUMENTS THAT COULD HAVE SHOWED LIGHT INTO WHETHER TRULY THE TRANSACTIONS WERE GENUINE. THE AS SESSEE PROVIDED DETAILS OF SHARE APPLICANTS I.E. COPY OF THE PAN ASSESSMEN T PARTICULARS MODE OF AMOUNT INVESTED THROUGH BANKING CHANNEL COPY OF RESO LUTION AND COPIES OF THE BALANCE SHEET. THE AO FAILED TO CONDUCT ANY SCR UTINY OF THE DOCUMENT THE DEPARTMENTAL APPEAL WAS ACCORDINGLY DISMISSED. 14. THE HONBLE SUPREME COURT IN THE CASE OF M/S. EARTHMETAL ELECTRICAL PVT. LTD. VS. CIT DATED 30 TH JULY 2010 IN SLP. NO.21073/99 IN WHICH HONBLE APEX COURT HELD WE HAVE EXAMINED THE POSITION WE FIND THAT THE SHAREHOLDER S ARE GENUINE PARTIES. THEY ARE NOT BOGUS AND FICTITIOUS THEREFOR E THE IMPUGNED ORDER IS SET ASIDE. IN THIS CASE THE HONBLE BOMBAY HIGH COURT AND THE ITAT MUMBAI BENCH WHICH WAS THE SUBJECT M ATTER IN SLP BEFORE HONBLE SUPREME COURT OBSERVED THAT ASSE SSEE FAILED TO PRODUCE ANY EVIDENCE REGARDING CONFIRMATION OF T HE AMOUNT SUPPOSED TO HAVE BEEN RECEIVED AS SHARE CAPITAL FRO M THIRD PARTY. THE CASE OF THE ASSESSEE IS THEREFORE ON BE TTER FOOTING AS AGAINST THE DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF EARTHMETAL ELECTRICAL PVT. LTD. VS. CIT (SUPRA). T HE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. LAXMAN INDUSTRIAL RESOURCES PVT. LTD. (SUPRA) CLEARLY AP PLY TO THE FACTS OF THE CASE OF THE ASSESSEE THAT THE ASSESSEE RECEI VED GENUINE 55 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. SHARE APPLICATION MONEY FROM THE INVESTOR COMPANIES . THE ASSESSEE ON THE BASIS OF THE DOCUMENTARY EVIDENCES HAVE BEEN ABLE TO ESTABLISH THAT THE SHARE HOLDERS ARE GENUIN E PARTIES AND THEY ARE NOT BOGUS AND FICTITIOUS. THE HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. DIVINE LEASING & FIN. LTD. 299 ITR 268 HELD THAT NO ADVERSE INFERENCE SHOULD BE DRAWN IF SHAREHOLDER S FAILED TO RESPOND TO THE NOTICE BY AO. 15. THE HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. PEOPLES GENERAL HOSPITAL LTD. (2013) 356 ITR 65 HE LD THAT DISMISSING THE APPEALS THAT IF THE ASSESSEE HAD R ECEIVED SUBSCRIPTIONS TO THE PUBLIC OR RIGHTS ISSUE THROUGH BANKING CHANNELS AN D FURNISHED COMPLETE DETAILS OF THE SHAREHOLDERS NO ADDITION C OULD BE MADE UNDER SECTION 68 OF THE INCOME-TAX ACT 1961 IN THE ABSE NCE OF ANY POSITIVE MATERIAL OR EVIDENCE TO INDICATE THAT THE SHAREHOLD ERS WERE BENAMIDARS OR FICTITIOUS PERSONS OR THAT ANY PART OF THE SHARE CAP ITAL REPRESENTED THE COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. IT WAS NOBODY'S CASE THAT THE NON-RESIDENT INDIAN COMPANY WAS A BOGUS OR NON-EXISTENT COMPANY OR THAT THE AMOUNT SUBSCRIBED BY THE COMPANY BY WAY OF SHARE SUBSCRIPTION WAS IN FACT THE MONEY OF THE ASSESSEE. THE ASSESSEE HAD ESTABLISHED THE IDENTITY OF THE INVESTOR WHO HAD PR OVIDED THE SHARE SUBSCRIPTION AND THAT THE TRANSACTION WAS GENUINE. T HOUGH THE ASSESSEE'S CONTENTION WAS THAT THE CREDITWORTHINESS OF THE CRE DITOR WAS ALSO ESTABLISHED IN THIS CASE THE ESTABLISHMENT OF THE IDENTITY OF THE INVESTOR ALONE WAS TO BE SEEN. THUS THE ADDITION WAS RIGHTLY DELETED. 56 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. 16. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DWARKADHISH INVESTMENT P. LTD. (ITA.NO.911 OF 2010 ) AND DWARKADHISH CAPITAL P. LTD. (2011) 330 ITR 298 (DE L.) HELD IN ANY MATTER THE ONUS OF PROOF IS NOT A STATIC ONE. THOUGH IN SECTION 68 OF THE INCOME TAX ACT 1961 THE INITIAL BURDEN OF PROO F LIES ON THE ASSESSES YET ONCE HE PROVES THE IDENTITY OF THE CREDITORS/SH ARE APPLICANTS BY EITHER FURNISHING THEIR PAN NUMBER OR INCOME-TAX ASSESSMENT NUMBER AND SHOWS THE GENUINENESS OF TRANSACTION BY SHOWING MONE Y IN HIS BOOKS EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT OR BY ANY OTHER MODE THEN THE ONUS OF PROOF WOULD SHIFT TO THE REVENUE. JUST BECAUSE T HE CREDITORS/SHARE APPLICANTS COULD NOT BE FOUND AT THE ADDRESS GIVEN I T WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE SECTION 68. ONE MUST NOT L OSE SIGHT OF THE FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWER AND W HEREWITHAL TO TRACE ANY PERSON. MOREOVER IT IS SETTLED LAW THAT THE AS SESSEE NEED NOT TO PROVE THE 'SOURCE OF SOURCE'. THE ASSESSEE-COMPANY WAS ENGAGE D IN THE BUSINESS OF FINANCING AND TRADING OF SHARES. FOR THE ASSESSMENT YEAR 2001- 02 ON SCRUTINY OF ACCOUNTS THE ASSESSING OFFICER FOUN D AN ADDITION OF RS.71 75 000 IN THE SHARE CAPITAL OF THE ASSESSEE. T HE ASSESSING OFFICER SOUGHT AN EXPLANATION OF THE ASSESSEE ABOUT THIS ADDI TION IN THE SHARE CAPITAL. THE ASSESSEE OFFERED A DETAILED EXPLANATIO N. HOWEVER ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE FAILED TO EX PLAIN THE ADDITION OF SHARE APPLICATION MONEY FROM FIVE OF ITS SUBSCRIBERS . ACCORDINGLY THE ASSESSING OFFICER MADE AN ADDITION OF RS.35 50 000/- WITH THE AID OF SECTION 68 OF THE ACT 1961 ON ACCOUNT OF UNEXPLAINED CASH CREDITS APPEARING IN THE BOOKS OF THE ASSESSEE. HOWEVER IN APPEAL THE COMMISSIONER OF INCOME-TAX (APPEALS) DELETED THE AD DITION ON THE 57 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. GROUND THAT THE ASSESSEE HAD PROVED THE EXISTENCE OF THE SHAREHOLDERS AND THE GENUINENESS OF THE TRANSACTION. THE INCOME-TAX A PPELLATE TRIBUNAL CONFIRMED THE ORDER OF THE COMMISSIONER OF INCOME-T AX (APPEALS) AS IT WAS ALSO OF THE OPINION THAT THE ASSESSEE HAD BEEN ABLE TO PROVE THE IDENTITY OF THE SHARE APPLICANTS AND THE SHARE APPL ICATION MONEY HAD BEEN RECEIVED BY WAY OF ACCOUNT PAYEE CHEQUES. ON APPEAL T O THE HIGH COURT: HELD DISMISSING THE APPEALS THAT THE DELETION OF ADDITION WAS JUSTIFIED. 17. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. WINSTRAL PETROCHEMICALS P. LTD. 330 ITR 603 (DEL.) HELD THAT DISMISSING THE APPEAL THAT IT HAD NOT BEEN DISPUTE D THAT THE SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSEE-COMP ANY BY WAY OF ACCOUNT PAYEE CHEQUES THROUGH NORMAL BANKING CHANNEL S. ADMITTEDLY COPIES OF APPLICATION FOR ALLOTMENT OF SHARES WERE ALSO PROVIDED TO THE ASSESSING OFFICER. SINCE THE APPLICANT COMPANIES W ERE DULY INCORPORATED WERE ISSUED PAN CARDS AND HAD BANK ACCOUNTS FROM WHIC H MONEY WAS TRANSFERRED TO THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES THEY COULD NOT BE SAID TO BE NON-EXISTENT EVEN IF THEY AFTER SUBMITTING THE SHARE APPLICATIONS HAD CHANGED THEIR ADDRESSES OR HAD STO PPED FUNCTIONING. THEREFORE THE COMMISSIONER (APPEALS) AND THE TRIBUN AL WERE JUSTIFIED IN HOLDING THAT THE GENUINENESS OF THE TRANSACTIONS HAD BEEN DULY ESTABLISHED BY THE ASSESSEE. 18. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VALUE CAPITAL SERVICES P. LTD. (2008) 307 ITR 334 (DEL.) IN WHICH IT WAS HELD THAT DISMISSING THE APPEAL THAT THE ADDITIONAL BURDEN WAS ON THE DEPARTMENT TO SHOW THAT EVEN IF TH E SHARE APPLICANTS DID NOT HAVE THE MEANS TO MAKE THE INVESTMENT THE INVESTMENT MADE BY 58 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSES SEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSES SEE. NO SUBSTANTIAL QUESTION OF LAW AROSE. 19. IT MAY BE NOTED HERE THAT INVESTOR COMPANIES HAVE CONFIRMED MAKING INVESTMENTS IN ASSESSEE-COMPA NY WHO WERE HAVING SUFFICIENT NET WORTH TO MAKE INVEST MENT IN ASSESSEE-COMPANY. ASSESSEE FILED I.T. RETURNS PAN BANK STATEMENTS OF INVESTOR COMPANY TO PROVE THEY ARE EX ISTING ASSESSEES OF DEPARTMENT AND ARE GENUINE PARTIES. NO EFFORTS ARE MADE BY A.O. FOR PRODUCTION OF INVESTORS AT ASS ESSMENT STAGE. THEREFORE THE ASSESSEE HAS BEEN ABLE TO PR OVE IDENTITY OF THE SHARE APPLICANTS THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER. THE LD. CIT(A) ON EXAMINATION OF THE MATERIAL ON RECORD FURTHER F OUND THAT THE ONLY REASON FOR THE REVENUE TO GOES FOR FURTHER VERIFICATION WAS THE REPORT RELATING TO SURVEY CONDUCTED AT THE PREMISES OF THE ASSESSEE-COMPANY WHICH FORMS PART OF SATISFACTI ON RECORDED FOR REOPENING OF THE ASSESSMENT PROCEEDING S. FROM THE SAID REPORT LD. CIT(A) FOUND THAT THE BUSINESS PREMISES OF THE ASSESSEE ACTUALLY BELONG TO M/S. BHUSHAN STEEL LTD. AND SEVERAL OTHER COMPANIES HAVING THEIR REGISTERED OFF ICES AT THE SAME ADDRESS. THIS CREATED A SUSPICION IN THE MIND OF THE REVENUE. THE LD. CIT(A) THEREFORE RIGHTLY NOTED TH AT THERE IS NO LAW THAT MORE THAN ONE COMPANY CANNOT HAVE ITS REGISTERED OFFICE AT ONE ADDRESS. THE COMPANIES COU LD HAVE CHANGE THEIR ADDRESS LATER ON. IT IS ALSO AN ADMITT ED FACT THAT 59 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. SOURCE OF THE CAPITAL INVESTMENT COMPANIES WERE EST ABLISHED DURING THEIR RESPECTIVE ASSESSMENT PROCEEDINGS INCL UDING IN THE CASE OF THE PRESENT ASSESSEE-COMPANY AS PER THE FINDINGS OF THE LD. CIT(A). LD. CIT(A) ALSO FOUND THAT NO EV IDENCE WAS FOUND DURING THE COURSE OF SURVEY TO INDICATE INTRO DUCTION OF UNACCOUNTED CASH/FUNDS IN THE FORM OF SHARE CAPITAL IN THESE COMPANIES. THESE FINDINGS OF FACT RECORDED BY THE L D. CIT(A) HAVE NOT BEEN REBUTTED THROUGH ANY EVIDENCE OR MATE RIAL ON RECORD. NO EVIDENCE HAS BEEN BROUGHT ON RECORD TH AT MONEY SO INVESTED IN ASSESSEE-COMPANY CAME FROM COFFERS O F ASSESSEE-COMPANY. ALL OBJECTIONS OF A.O. HAVE BEEN CONSIDERED BY LD. CIT(A) AND VARIOUS CASE LAW REFER RED TO ABOVE SUPPORT THE FINDINGS OF LD. CIT(A) THAT ADDIT ION HAS BEEN CORRECTLY DELETED. 20. THE LD. D.R. RELIED UPON THE DECISION OF VA RIOUS HONBLE HIGH COURTS AND DELHI HIGH COURT REFERRED T O ABOVE. IN THESE CASES THE GIST OF THE FINDINGS ARE THAT T HE ASSESSEE FAILED EITHER TO PROVE THE IDENTITY OR CAPACITY OF THE SUBSCRIBER COMPANIES OR THAT THE AMOUNT WAS RECEIVED AS ACCOMM ODATION ENTRIES. HOWEVER THE ASSESSEE-COMPANY IN THE PRES ENT CASE HAS BEEN ABLE TO PROVE THE IDENTITY OF THE INVESTOR S CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THEREFORE LD. CIT(A) ON PROPER APPRECIATIO N OF EVIDENCE AND MATERIAL ON RECORD CORRECTLY DELETED THE ADDITION 60 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. OF RS.17.60 CRORES. THE DEPARTMENTAL APPEAL FAILS A ND IS ACCORDINGLY DISMISSED. 21. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. IT IS NOT IN DISPUTE THAT ASSESSEE FILED THE CONFIRMATIONS OF AL L THE INVESTORS COPIES OF THEIR BANK ACCOUNTS AND INCOME TAX RETURN ACKNOWLEDGMENT AND PAN OF THE INVESTORS BEFORE A.O. THE A.O. INSTEAD OF EXAMINING THESE MATERIAL EVIDENCE PLACED BEFORE HIM WANTED TO VERIFY THE GENUINENESS OF THESE 10 PARTIE S AND ISSUED COMMISSION UNDER SECTION 131 OF THE I.T. ACT TO MUM BAI AND KOLKATA OFFICE OF THE DEPARTMENT. THE REPORTS OF THE COMMIS SION WERE SENT TO THE A.O. WHICH WERE BASED UPON REPORT OF THE INS PECTORS. THE A.O. HEAVILY RELIED UPON THE REPORTS OF THE COMMISSION B ASED ON REPORT OF THE INSPECTORS FOR THE PURPOSE OF MAKING THE ADDITI ON. THE ASSESSEE HOWEVER CHALLENGED THE FINDINGS OF THE A.O. BEFORE LD. CIT(A) BY SUBMITTING THAT THE RESULT OF ENQUIRY AND REPORT OF THE COMMISSION WAS NOT CONFRONTED TO THE ASSESSEE THUS PRINCIPLES OF NATURAL JUSTICE HAVE BEEN VIOLATED. NO OPPORTUNITY HAVE BEEN GIVEN TO ASSESSEE TO REBUT THE REPORT OF THE COMMISSION AND WITHOUT ALLO WING ANY CROSS- EXAMINATION TO THE REPORTS AND STATEMENTS OF THE IN SPECTORS. THE LD. 61 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. CIT(A) IN PARA 4.2 OF THE APPELLATE ORDER ACCEPTED THE CONTENTION OF ASSESSEE BY HOLDING THAT HE DOES NOT FOUND FROM THE ASSESSMENT RECORD THAT THE RESULT OF ENQUIRY MADE AT MUMBAI AN D KOLKATA WERE MADE AVAILABLE TO THE ASSESSEE. TO THAT EXTENT THE RIGHT OF THE ASSESSEE TO KNOW THE FACTS AND HAVE THE OPPORTUNITY TO REBUT THE FINDINGS WAS NOT GRANTED. THE LD. CIT(A) HOWEVER I N VIEW OF THE FACT THAT ADDITION ON MERIT HAVE BEEN DELETED OBSERVED T HAT THIS GROUND RAISED AGAINST THE VALIDITY OF THE PROCEEDINGS FOR NOT FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE DOES NOT SURVIVE. THE SE FINDINGS OF FACT RECORDED BY THE LD. CIT(A) HAVE NOT BEEN CHALLENGED IN THE DEPARTMENTAL APPEAL. IT THEREFORE STANDS PROVED O N RECORD THAT THE RESULT OF ENQUIRY AND REPORT OF THE COMMISSION UNDE R SECTION 131 SUBMITTED BY MUMBAI AND KOLKATA OFFICE HAVE NOT BEE N CONFRONTED TO THE ASSESSEE AND NO RIGHT OF CROSS-EXAMINATION H AVE BEEN GIVEN TO ASSESSEE. IT IS WELL SETTLED LAW THAT ANY MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE WHEN NOT CONFRONTED TO THE ASSESSE E CANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE. WE RELY UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KISHAN CHAND CHELARAM 125 ITR 713. THE REPORT OF THE COMMISSION AND RESULT OF ENQUIRIE S SHALL HAVE TO BE EXCLUDED FROM CONSIDERATION. IT MAY BE NOTED AT THE COST OF REPETITION 62 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. THAT WHEN THIS FINDING OF FACT HAS NOT BEEN CHALLEN GED IN THE DEPARTMENTAL APPEAL THE RESULT OF ENQUIRY AND REPO RT OF THE COMMISSION CANNOT BE TAKEN INTO CONSIDERATION AGAIN ST THE ASSESSEE. THERE IS NO OTHER EVIDENCE ON RECORD AGAINST ASSESS EE. THEREFORE WE PROCEED TO DECIDE THE ISSUE ON MERIT IN THE LIGHT O F MATERIAL AVAILABLE ON RECORD I.E. DOCUMENTARY EVIDENCE PRODUCED BY TH E ASSESSEE BEFORE THE A.O. AND THE LD. CIT(A) CONFIRMATIONS OF THE I NVESTORS COPIES OF THEIR BANK STATEMENT COPY OF PAN AND ITR OF THE IN VESTORS AND COPY OF THE ROC OF THE INVESTORS. LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT NO CASH WAS FOUND DEPOSITED IN THE B ANK ACCOUNTS OF THE INVESTORS. COPIES OF THE BANK STATEMENTS OF THE INVESTORS ARE FILED IN THE PAPER BOOK WHICH SHOWS THAT BEFORE MAKING IN VESTMENT IN ASSESSEE-COMPANY INVESTORS ARE HAVING SUFFICIENT BA NK BALANCES WITH THEM AND NO CASH HAVE BEEN DEPOSITED IN THEIR BANK ACCOUNTS. IN THE CASE OF THE ASSESSEE SURVEY UNDER SECTION 133A WAS CONDUCTED AFTER SEARCH WAS CONDUCTED IN THE CASE OF M/S. BHUSHAN ST EEL GROUP OF CASES. HOWEVER A.O. HAS NOT MENTIONED ANY MATERIAL WAS FOUND AGAINST THE ASSESSEE IN THE SURVEY TO MAKE THE ABOV E ADDITION. THEREFORE IT IS CLEAR THAT NO INCRIMINATING MATERI AL WAS FOUND AGAINST THE ASSESSEE DURING THE COURSE OF SURVEY SO AS TO M AKE THE ABOVE 63 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. ADDITION. NO EVIDENCE WAS ALSO BROUGHT ON RECORD TH AT SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE. NO DIRECT RELATIONS BE TWEEN THE ASSESSEE- COMPANY AND INVESTORS WERE FOUND. NO EFFORTS HAVE B EEN MADE BY THE A.O. FOR PRODUCTION OF THE INVESTORS FOR EXAMINATIO N BEFORE HIM ON OATH. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO HIS SUBMISSIONS MADE BEFORE THE LD. CIT(A) IN WHICH IT WAS SPECIFIC ALLY SUBMITTED THAT ALL THE INVESTORS HAVE DIRECTLY CONFIRMED THE GENUI NENESS OF THE TRANSACTION WITH THE ASSESSEE IN THEIR REPLIES FILE D IN RESPONSE TO THE COMMISSION UNDER SECTION 131 OF THE I.T. ACT SUPPOR TED BY ALL THE RELEVANT DOCUMENTS AND COPIES OF THE ANNUAL ACCOUNT S. THE REPLY OF THE ASSESSEE BEFORE LD. CIT(A) HAVE NOT BEEN REBUTT ED BY THE REVENUE DEPARTMENT THROUGH ANY EVIDENCE OR MATERIAL ON RECO RD. THE A.O. IN THE LAST PART OF THE ASSESSMENT ORDER HAS MENTIONED THAT INVESTORS HAVE NOT ENCLOSED THE BANK STATEMENT SHOWING THE SO URCE OF THE FUND FOR SHARE APPLICATION MONEY WHICH WOULD SUPPORT THE EXPLANATION OF ASSESSEE THAT INVESTORS HAVE FILED REPLIES BEFORE A .O. CONFIRMING THE GENUINENESS OF THE TRANSACTION IN THE MATTER. THE O BSERVATION OF THE A.O. IS INCORRECT THAT COPY OF THE BANK STATEMENT I S NOT FILED BECAUSE THE A.O. IN THE ASSESSMENT ORDER ITSELF HAS MENTION ED THAT ASSESSEE 64 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. FILED COPY OF THEIR BANK STATEMENTS BEFORE HIM FOR EXAMINATION. THUS EVIDENCES AND MATERIAL ON RECORD CLEARLY PROVE IDEN TITY OF THE INVESTORS THEIR CREDITWORTHINESS AND GENUINENESS O F THE TRANSACTION IN THE MATTER. WE RELY UPON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF ORISSA CORPORATION PVT. LTD. 159 ITR 78. SINCE THE ASSESSEE PRODUCED SUFFICIENT EVIDENCE BEFORE A. O. THEREFORE INITIAL BURDEN UPON ASSESSEE TO PROVE IDENTITY OF T HE INVESTORS THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION HAVE BEEN DISCHARGED. THE CASE SET-UP BY THE A.O. AGAINST THE ASSESSEE WAS THAT THE PREMISES BELONG TO M/S. BHUSHAN STEEL COMP ANIES AND OTHER COMPANIES ARE HAVING SAME REGISTERED OFFICE. THIS CREATED A SUSPICION IN THE MIND OF THE REVENUE. THE LD. CIT(A ) THEREFORE RIGHTLY NOTED THAT THERE IS NO LAW THAT MORE THAN ONE COMPA NY CANNOT HAVE ITS REGISTERED OFFICE AT ONE ADDRESS. THE INVESTOR COMPANIES WOULD HAVE CHANGED THEIR ADDRESS LATER ON. IT IS ALSO AN ADMITTED FACT THAT SOURCE OF THE CAPITAL INTRODUCED IN THESE COMPANIES WERE ESTABLISHED DURING THE RESPECTIVE ASSESSMENT PROCEEDINGS INCLU DING IN THE ASSESSEE. NO EVIDENCE WAS FOUND DURING THE COURSE O F SEARCH OR SURVEY TO INDICATE INTRODUCTION OF UNACCOUNTED CASH /FUNDS IN THE FORM OF SHARE CAPITAL IN THESE COMPANIES. ALL THE P OINTS TAKEN BY THE 65 ITA.NO.6173/DEL./2013 M/S. ELEGANT SECURITY SERVICES PVT. LTD. NEW DELHI. A.O. HAVE BEEN ADDRESSED BY THE LD. CIT(A) AS WELL AS IN THE GROUP CASES OF ACIT VS. NRA IRON AND STEEL PVT. LTD. (SU PRA). THE LD. D.R. DID NOT POINT OUT ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. CONSIDERING THE ABOVE DISCUS SION WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL THE SAME IS ACCORDINGLY DISMISSED. 8. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI DATED 30 TH NOVEMBER 2017 VBP/- COPY TO . THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH DELHI 6. GUARD FILE. //BY ORDER // ASST. REGISTRAR ITAT DELHI BENCHES DELHI.