M/S BINI BUILDERS PVT. LTD., Mumbai v. DCIT CENTRAL RANGE 7(3), Mumbai

ITA 630/MUM/2019 | 2010-2011
Pronouncement Date: 05-05-2021 | Result: Partly Allowed

Appeal Details

RSA Number 63019914 RSA 2019
Assessee PAN MEACT1961B
Bench Mumbai
Appeal Number ITA 630/MUM/2019
Duration Of Justice 2 year(s) 3 month(s)
Appellant M/S BINI BUILDERS PVT. LTD., Mumbai
Respondent DCIT CENTRAL RANGE 7(3), Mumbai
Appeal Type Income Tax Appeal
Pronouncement Date 05-05-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 05-05-2021
Last Hearing Date 22-04-2021
First Hearing Date 22-04-2021
Assessment Year 2010-2011
Appeal Filed On 05-02-2019
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH MUMBAI BEFORE HONBLE SHRI MAHAVIR SINGH VP AND HONBLE SHRI MANOJ KUM AR AGGARWAL AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO. 6 30 / MUM/201 9 ( / ASSESSMENT YEAR : 20 1 0 - 1 1 ) M /S BINI BUILDERS P. L TD. 203/204 RAIGAD DARSHAN OPP. INDIAN OIL COLONY J.P.ROAD ANDHERI (W) MUMBAI 400 053 / VS. D CIT - C R 7(3 ) 655 6 TH FLOOR AAYKAR BHAWAN M.K.ROAD MUMBAI 400 0 20 ./ ./ PAN/GIR NO . A A CCB - 3447 - R ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI VIMAL PUNMIYA LD. AR REVENUE BY : SHRI THARIAN OOMMEN LD . SR. DR / DATE OF HEARING : 22 /04/2021 / DATE OF PRONOUNCEMENT : 05/05/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR (AY) 201 0 - 11 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME - TAX (APPEALS) - 49 MUMBAI [ IN SHORT REFERRED TO AS CIT(A)] APPEAL NO .CIT(A) - 49/IT - 163/2017 - 18 DATED 17 /12/2018 ON FOLLOWING GROUNDS OF APPEAL: - 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRM ING THE REOPENING THE CASE U/S 148 WHICH IS BAD IN LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE INCOME ACT 1961 BY THE LD. ASSESSING OFFICER IS AGAINST TH E PRINCIPAL OF NATURAL JUSTICE HENCE BAD - IN - LAW. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN CONFIRMING THE PASSING ASSESSMENT ORDER WITHOUT PROVIDING OPPORTUNITY TO REBUT THE MATERIAL RELIED BY LD ASSESSING OFFICER DUR ING THE REASSESSMENT PROCEEDINGS EXAMINATION WHICH IS AGAINST THE PRINCIPAL OF NATURAL JUSTICE AND HENCE THE SAID ORDER IS LIABLE TO BE QUASHED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING ADDITION IN RESPE CT OF THE SHARE CAPITAL AND SHARE PREMIUM OF RS. 3 22 75 000/ - AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX ACT 1961 WITHOUT CORROBORATIVE EVIDENCES. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN NOT PERMITTING OF BUSINESS LOSS OF RS. 25 879 / - 6. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW LD. CIT(A) ERRED IN CONFIRMING INITIATION OF PENALTY PROCEEDING U/S.274 R.W.S 271 (1) (C) OF INCOME TAX ACT 1961. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW THE LD. CIT (A) ERRED IN SET - ASIDING FOR FRESH CALCULATIONS OF INTEREST UNDER SECTION 234A 234B AND 234C OF THE INCOME TAX ACT 1961. AS EVIDENT THE ASSESSEE IS AGGRIEVED BY CONFIRMATION OF CERTAIN ADDITION OF UNEXPLAINED CASH CREDIT U/S 68. IN GROU ND NOS. 1 TO 3 THE ASSESSEE HAS CHALLENGED THE VALIDITY OF REASSESSMENT PROCEEDINGS. 2. THE LD. AR AT THE OUTSET SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED IN ASSESSEES FAVOR BY THE EARLIER DECISION OF TRIBUNAL IN ASSESSEES OWN C ASE FOR AYS 2011 - 12 & 2012 - 13 ITA NO S . 631 & 632/MUM/2019 COMMON ORDER DATED 12/03/2020 WHICH HAS SUBSEQUENTLY BEEN RELIED UPON BY COORDINATE BENCH IN THE CASE OF ASSESSEES SISTER CONCERN NAMELY M/S MOONGIPA DEVELOPMENT & INF. LTD. FOR AYS 2009 - 10 & 2010 - 11 ITA NOS.625 & 626/MUM/2019 COMMON ORDER DATED 04/12/2020 . THE COP Y OF BOTH THE ORDER S HAS BEEN PLACED ON RECORD. THE LD. AR TOOK US THROUGH THE CITED ORDER AS WELL AS THE FACTS OF THIS YEAR TO SUBMIT THAT MOST OF THE INVESTOR ENTITIES ARE COMMON ENTIT IES WHO HAD SUFFICIENT NET WORTH TO MAKE INVESTMENT IN ASSESSEE COMPANY AND THEREFORE THE ADDITIONS WOULD NOT BE SUSTAINABLE UNDER LAW IN THE LIGHT OF DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE TO ESTABLISH 3 THE IDENTITY OF THE PARTY THEIR RESPECTIVE CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS AS PER THE REQUIREMENTS OF SEC TION 68 . THE LD. DR THOUGH RELIED UPON THE ORDERS OF LOWER AUTHORITIES HOWEVER COULD NOT CONTROVERT THE FACT THAT THE ISSUE HAS ALREADY BEEN ADJUDICATED BY THE TRIBU NAL IN ASSESSEES OWN CASE FOR EARLIER YEARS. 3. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE. WE HAVE ALSO GONE THROUGH THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE TO ESTABLISH THE FULFILLMENT OF PRIMARY INGREDIENTS OF SEC.68. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. ASSESSMENT PROCEEDINGS 4 .1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE BEING RESIDE NT CORPORATE ASSESSEE STATED TO BE ENGAGED AS BUILDERS & DEVELOPERS WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) R.W.S. 147 ON 22/12/2017 WHEREIN THE ASSESSEE WAS SADDLED WITH CERTAIN ADDITION OF UNEXPLAINED CASH CREDIT U/S 68 FOR RS. 322.75 LACS. THE ORIGINAL RETURN WAS PROCESSED U/S 143(1). HOWEVER PURSUANT TO CERTAIN SEARCH / SURVEY ACTION ON LOTUS / KAMDHENU / GREENVALLEY GROUP THE ASSESSEES CASE WAS REOPENED AS PER DUE PROCESS OF LAW IN VIEW OF THE FACT T HAT THE ASSESSEE H AD RECEIVED SHARE CAPITAL / SHA RE PREMIUM OF RS. 322.75 LACS FROM VARIOUS KOLKATA BASED ENTITIES. THE SAID RECEIPTS WERE ALLEGED TO BE BOGUS IN NATURE. THE SHARES OF FACE VALUE OF RS.10/ - EACH WERE STATED TO BE ISSUED AT PREMIUM OF RS.90/ - PER SHARE TO 16 ENTITIES DURING THE YEAR AS DETA ILED IN PARA 3.1.5 OF THE ASSESSMENT ORDER . 4.2 DURING THE COURSE OF SURVEY U/S 133A ON 09/10/2014 SHRI RAJESH AGARWAL AN ASSOCIATE OF THE ASSESSEE GROUP IN HIS STATEMENT UNDER 4 OATH U/S 131 MADE ADMISSION OF SUM OF RS.11.13 CRORES AS UNDISCLOSED INCOME OF THE GROUP. HOWEVER THE SAID STATEMENT WAS RETRACTED IMMEDIATELY ON 16/10/2014 BY SUBMITTING AN AFFIDAVIT THAT THE STATEMENTS WERE EXTRACTED BY APPLYING UNDUE INFLUENCE WITHOUT THERE BEING ANY INCRIMINATING EVIDENCES ON RECORD. 4.3 THE FINDINGS OF SEAR CH OPERATIONS REVEALED THAT ENTITIES OF SHRI RAJESH AGARWAL RECEIVED UNSECURED LOAN / SHARE APPLICATION MONEY OF AROUND 30 CRORES FROM VARIOUS KOLKATA BASED PARTIES. SHRI RAJESH AGARWAL WAS STATED TO BE DIRECTOR OF AROUND 28 ENTIT IES INCLUDING THAT OF ASSE SSEE. THE ASSESSEE IS STATED TO HAVE RECEIVED TOTAL SUM OF RS. 322.75 LACS FROM 16 ENTITIES DURING THIS YEAR AS DETAILED IN PARA 3.1.5 OF THE ASSESSMENT ORDER. THE NOTICES ISSUED U/S 133(6) TO ALL THESE ENTITIES TO CONFIRM THE TRANSACTIONS REMAINED UN - SERVE D / UN - RESPONDED . 4.4 IN THE ABOVE BACKGROUND SUMMON U/S 131 WERE ISSUED TO SHRI RAJESH AGARWAL DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HIS STATEMENT WAS RECORD ED ON 09/12/2016 WHEREIN SHRI RAJESH AGARWAL STOOD BY THE RETRACTION AFFIDAVIT. HE MAI NTAINED THAT THE HE WAS COERCED BY SURVEY TEAM TO MAKE FALSE DEPOSITION AND THE CONCLUSION THAT BOGUS SHARE MONEY WAS RECEIVED BY THE ASSESSEE GROUP WAS MERELY ON THE BASIS OF SURMISES AND CONJECTURES. 4.5 HOWEVER DISREGARDING ASSESSEES SUBMISSIONS AND DOCUMENTARY EVIDENCES ON RECORD LD. AO FORMED AN OPINION THAT INVESTOR ENTITIES GIFTED MONEY TO THE ASSESSEE FOR NO APPARENT BUSINESS PURPOSES. THE RETRACTION WAS NOTHING BUT MERELY AN AFTER - THOUGHT. SINCE THE ASSESSEE COULD NOT PROVE THE SOURCE AND NATURE OF THESE TRANSACTIONS THE MONIES SO RECEIVED BY THE ASSESSEE WERE ADDED TO ITS INCOME AS UNEXPLAINED CASH CREDIT U/S 68 WHICH WOULD BE CHARGEABLE TO TAX @30% U/S 115BBE. 5 APPELLATE PROCEEDINGS 5 .1 AGGRIEVED THE ASSESSEE ASSAILED THE ACTION OF LD. A O ON LEGAL GROUNDS AS WELL AS ON MERITS. CHALLENGING REASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED THAT THE ASSESSEE GROUP HAD NO CONNECTION WITH LOTUS / KAMDHENU / GREENVALLEY GROUP EXCEPT FOR THE FACT THAT ONE SHRI BHAGWANJI PATEL OF LOTUS GROUP WAS O NE OF THE EX - DIRECTORS IN ONE OF THE GROUP COMPANIES OF THE ASSESSEE VIZ. AXAYRAJ BUILDWELL PVT. LTD. BUT SHRI BHAGWANJI PATEL CEASED TO BE DIRECTOR OF AXAYRAJ BUILDWELL PVT. LTD. IN 2009. THE ASSESSEE SUBMITTED THAT IN THE ABSENCE OF TANGIBLE MATERIAL LD . AO HAD NO JURISDICTION TO ISSUE NOTICE U/S 148. 5.2 HOWEVER THE LEGAL SUBMISSIONS CHALLENGING REASSESSMENT PROCEEDINGS COULD NOT FIND FAVOR WITH LD. CIT(A) WHO OBSERVED THAT NO SCRUTINY TOOK PLACE U/S 143(3) AND THERE WAS NO SCOPE FOR LD. AO TO EXAMINE THE ISSUE OF SHARE CAPITAL / SHARE PREMIUM. THE LD. AO HAD AUTHENTIC INFORMATION BY WAY OF APPRAISAL REPORT OF THE SEARCH IN THE CASE OF LOTUS GROUP AND THE ASSESSEES ADMISSIONS DURING SEARCH COMPELLED HIM TO TAKE ACTION U/S 147 / 148 . THE SUBSEQUENT RET RACTION WOULD NOT HAVE ANY RELEVANCE SINCE THE ONUS WOULD BE ON ASSESSEE TO PROVE THAT THE STATEMENT WAS FACTUALLY WRONG. THE LD.AO RECORDED ELABORATE REASONS AFTER GIVING ANALYSIS OF EACH OF THE INVESTOR ENTITIES AS WELL AS OF THOSE ENTITIES WHO HAD INVES TED IN THE INVESTOR ENTITIES. THEREFORE LD. AO HAD SUFFICIENT REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE. ACCORDINGLY THE LEGAL GROUNDS CHALLENGING REASSESSMENT PROCEEDINGS WERE DISMISSED. THE REASONS THAT TRIGGERED REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN EXTRACTED IN PARA 6.0 OF THE IMPUGNED ORDER AND WE HAVE ALSO PERUSED THE SAME . 6 5.3 ON MERITS THE ASSESSEE ASSAILED THE QUANTUM ADDITION BY WAY OF ELABORATE SUBMISSIONS WHICH HAVE BEEN EXTRACTED IN PARA 7 . 1 OF TH E IMPUGNED ORDER. THE ASSESSEE DREW ATTENTION TO THE DOCUMENTS SUBMITTED BY THE ASSESSEE WITH RESPECT TO EACH OF INVESTOR ENTITIES TO ESTABLISH THEIR IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS IN TERMS OF REQUIREMENTS OF SECTION 68 . IT WAS SUBMITTED THAT EACH AND EVERY SHAREHOLDER CONFIRMED THE STATED TRANSACTIONS AND THEREFORE FINDINGS RENDERED BY LD.AO RUN CONTRARY TO THE PROVISIONS OF SEC. 68. THE ASSESSEE MAINTAINED THAT BY SUBMITTING THESE DETAILS IT HAD DISCHARGED THE PRIMARY ONU S OF PROVING THE STATED TRANSACTIONS. ALL THE INVESTOR ENTITIES HAD SUFFICIENT FUNDS TO INVEST IN THE ASSESSEE COMPANY. RELIANCE WAS PLACED ON CATENA OF JUDICIAL PRONOUNCEMENTS TO SUPPORT THE SAID SUBMISSIONS. THESE HAVE ALREADY BEEN TABULATED IN ASSESSEE S SUBMISSIONS AS EXTRACTED IN THE IMPUGNED ORDER. THEREFORE THE ASSESSEE SUBMITTED THAT ADDITIONS AS MADE BY LD. AO WERE UNCALLED FOR IN THE LIGHT OF DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE. 5.4 THE LD. CIT(A) AT PARA 7.3 OF THE IMPUGNED ORDER NOTED THAT THE ASSESSEE HAD SUBMITTED SHARE APPLICATION FORM COPY OF CHEQUE CHEQUES DEPOSIT SLIPS COPY OF ASSESSEES BANK STATEMENT COPY OF SHARE CERTIFICATES COPY OF SOURCE OF FUNDS COPY OF BOARD RESOLUTION CERTIFICATE OF INCORPORATION COPY OF ME MORANDUM OF ASSOCIATION (MOU) ETC. WITH RESPECT TO ALL 16 INVESTOR ENTITIES. HOWEVER THE SAME WOULD NOT PROVE THE GENUINENESS OF THE TRANSACTIONS. IT WAS OBSERVED THAT INVESTOR ENTITIES DID NOT HAVE ANY GENUINE BUSINESS ACTIVITY WHICH WAS EVIDENT FROM THE FACT THAT MAIN OBJECT OF THE INVESTOR ENTITIES CONTAINED ALL ACTIVITY POSSIBLE AND WOULD INDICATE THE MALA - FIDE INTENTIONS OF THE ASSESSEE. ANY GENUINE COMPANY WITH A REAL MOTIVE OF DOING BUSINESS WOULD HAVE A 7 CONCRETE OBJECT TO BE FOLLOWED. FURTHER THER E WAS NO JUSTIFICATION FOR KOLKATA BASED ENTITIES TO MAKE INVESTMENT IN MUMBAI BASED ENTITY AND THAT TOO AT A PREMIUM OF RS.90/ - PER SHARE. AT PARA 7.6 IT WAS NOTED THAT ALL THE ENTITIES PURCHASED THE SHARES OF THE ASSESSEE AT PREMIUM OF RS.90/ - PER SHARE BUT THEY EXITED AT FACE VALUE OF RS.10/ - PER SHARE. FURTHER THE RETRACTION WOULD NOT HAVE ANY RELEVANCE IN THE LIGHT OF DECISION OF MUMBAI TRIBUNAL IN HIRALAL MAGANLAL AND CO . V/S DCIT (97 TTJ 377). THE CASE LAWS BEING RELIED UPON BY THE ASSESSEE WERE HE LD TO BE DISTINGUISHABLE RATHER RELIANCE WAS PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN NOVA PROMOTERS & FINLEASE PVT . LTD. 342 ITR 169 TO CONFIRM THE ADDITIONS. FINALLY THE ADDITIONS WERE CONFIRMED BY OBSERVING AS UNDER: - 7.8 THE LEARNED COU NSEL ALSO ALLEGED THAT THE AO MADE THE ADDITION ON THE BASIS OF SUSPICION AND NOT EVIDENCES. THIS ALSO IS NOT CORRECT AS THE AO HAD BROUGHT IN ENOUGH EVIDENCES BOTH DIRECT AND CORROBORATIVE TO COME TO THE CONCLUSION THAT THE SHARE CAPITAL AND PREMIUM RECEI VED BY THE ASSESSEE ARE NOT GENUINE. AS COULD BE SEEN FROM THE ASSESSMENT ORDER AND FROM THE DISCUSSION MADE ABOVE THE LEARNED COUNSEL FURTHER ALLEGED THAT THE AO HAS NO MATERIAL IN HIS POSSESSION TO PROVE THE SAME AND THAT HE MADE THE ADDITION OF THE BAS IS OF INFORMATION FROM INVESTIGATION WING AND WITHOUT ANY INDEPENDENT ENQUIRY MADE BY THE AO. THIS ALSO IS INCORRECT AS THE AO HAD IN - DEPTH INFORMATION NOT ONLY ABOUT THE 1 6 COMPANIES WHICH HAVE INVESTED IN THE ASSESSEE COMPANY BUT ALSO ABOUT THE 67 COMPAN IES WH ICH HAVE INVESTED IN THE SAID 16 COMPANIES. THE AO HAD MADE EXHAUSTIVE ENQUIRY AND ANALYSIS BEFORE REACHING TO THIS CONCLUSION. THE LEARNED COUNSEL HAS ALSO ALLEGED THAT THE THIRD PARTY UNILATERAL ACT CANNOT BE THE BASIS OF ADDITION BUT THE ADDITION IN THIS CASE HAS BEEN MADE NOT ON THE BASIS OF THIRD PARTY UNILATERAL ACT BUT ON THE BASIS OF THE ASSESSEE'S OWN ADMISSION SUPPORTED BY OTHER CORROBORATIVE EVIDENCES. IN THE LIGHT OF THESE FACTS AND CIRCUMSTANCES THE ADDITION MADE BY THE AO IS CONFIRMED . THE GROUNDS OF APPEAL ARE DISMISSED. AGGRIEVED THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. OUR FINDINGS AND ADJUDICATION 6 . UPON CAREFUL CONSIDERATION AS RIGHTLY POINTED OUT BY LD. AR THE ISSUE IS SQUARELY COVERED IN ASSESSEES FAVOR BY THE EARLIER DE CISION OF COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 2011 - 8 12 & 2012 - 13 ITA NOS. 631 & 632/MUM/2019 COMMON ORDER DATED 12/03/2020. THE RELEVANT F INDINGS OF THE BENCH WERE AS UND ER: - 7. WE HAVE CAREFULLY HEARD THE ARGUMENTS ADVANCED B Y RESPECTIVE REPRESENTATIVES AND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING DOCUMENTS PLACED IN THE PAPER - BOOK. WE HAVE ALSO DELIBERATED ON VARIOUS JUDICIAL PRONOUNCEMENTS AS CITED BEFORE US. WE HAVE ALREADY APPRECIATED THE SETTLED LEGAL POSITION REGARD ING ADDITION U/S 68 AS ENUMERATED BY US IN THE OPENING PARAGRAPHS. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 8.1 UPON CAREFUL CONSIDERATION THE FACTS THAT EMERGES ARE THAT THE ASSESSEE HAS ISSUED 20.70 LA CS SHARES TO AS MANY AS 11 CORPORATE ENTITIES DURING THE YEAR AS TABULATED IN PARA 5.3 ABOVE. AS EVIDENT FROM DOCUMENTS ON RECORD THESE SHARES WERE ISSUED AT FACE VALUE OF RS.10/ - PER SHARE. THE SHARE CAPITAL OF THE ASSESSEE INCREASED BY RS.207 LACS DURIN G THE YEAR UNDER CONSIDERATION. IN THE LIGHT OF SETTLED LEGAL POSITION AS ENUMERATED BY US IN THE OPENING PARAGRAPHS IT IS QUITE EVIDENT THAT THE PRIMARY ONUS WAS ON ASSESSEE TO PROVE THE FULFILMENT OF THREE INGREDIENTS OF SEC. 68 VIZ. (I) IDENTITY OF THE INVESTOR; (II) CREDITWORTHINESS OF THE INVESTORS; & (III) GENUINENESS OF THE TRANSACTIONS. 8.2 TO DEMONSTRATE FULFILLMENT OF THESE INGREDIENTS THE ASSESSEE HAD DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS FURNISHED FOLLO WING BROAD DOCUMENTARY EVIDENCES WITH RESPECT TO ALL THE 11 ENTITIES: - (I) SHARE APPLICATION FORM (II) COPY OF CHEQUE (III) COPY OF CHEQUE DEPOSIT SLIP (IV) COPY OF INVESTORS BANK STATEMENT (V) COPY OF SHARE CERTIFICATE COUNTERFOIL (VI) COPY OF AUDIT REP ORT ALONG WITH FINANCIAL STATEMENTS OF THE INVESTOR ENTITY (VII) COPY OF ITR ACKNOWLEDGEMENT OF THE INVESTOR ENTITY (VIII) COPY OF CERTIFICATE OF INCORPORATION OF INVESTOR ENTITY (IX) MEMORANDUM & ARTICLES OF ASSOCIATION OF INVESTOR ENTITY (X) COMPANY MAST ER DATA SHOWING STATUS AS ACTIVE (XI) COPY OF BOARD RESOLUTION THE ASSESSEES OWN BANK STATEMENT WAS ALSO PLACED ON RECORD WHICH WOULD SHOW THAT ALL THE TRANSACTIONS HAVE TAKEN THROUGH BANKING CHANNELS. UPON CAREFUL CONSIDERATION OF THESE DOCUMENTS WE F IND THAT SO FAR AS THE IDENTITY OF THE INVESTOR ENTITIES ARE CONCERNED THE SAME STAND PROVED BY CERTIFICATE OF INCORPORATION WHICH IS HELD TO BE CONCLUSIVE PROOF OF REGISTRATION OF A CORPORATE ENTITY. THE CREDITWORTHINESS OF THE ENTITIES WOULD STAND SATIS FIED BY THE FINANCIAL STATEMENTS OF THE INVESTOR ENTITIES WHICH ARE ALSO PLACED ON RECORD. THE GENUINENESS OF THE TRANSACTIONS WOULD STAND PROVED BY THE FACT THAT THE TRANSACTIONS WERE DULY SUPPORTED BY SHARE APPLICATION FORM SHARE CERTIFICATES COPY OF BOARD RESOLUTION AND BY THE FACT THAT ULTIMATELY THE SHARES WERE ALLOTTED TO ALL THESE ENTITIES. THE ASSESSEE HAS TABULATED THE NET WORTH OF ALL THESE ENTITIES IN THE FOLLOWING MANNER: - NO. NAME OF INVESTOR AMOUNT OF SHARE CAPITAL INVESTED SHARE CAPITA L OF INVESTOR ENTITY RESERVES OF INVESTOR ENTITIES NET WORTH OF INVESTOR ENTITIES 1 LIMELIGHT DEALCOM P. LTD. 15 00 000 16 85 000 3 01 30 806 3 18 15 80 6 2 CLASSIC COMMOTRADE P. LTD. 5 00 000 6 51 800 2 70 49 015 2 77 00 815 3 DIVY PRAKASH SUPP LIERS PVT. LTD. 25 00 000 1 00 02 450 33 68 50 695 34 68 53 145 9 4 GOLDY DEALCOM P. LTD. 25 00 000 7 21 000 3 04 44 166 3 11 65 166 5 NEXTGEN TRADECOM P. LTD. 20 00 000 57 65 000 10 76 35 000 11 34 00 000 6 REXNOX TREXIM P. LTD. 18 00 000 1 15 57 100 15 93 97 977 17 09 55 077 7 RAJLAXMI DEALCOM P. LTD. 18 00 000 60 10 000 11 22 95 755 11 83 05 755 8 VANILLA TIE - UP P. LTD. 15 00 000 13 50 000 6 12 92 898 6 26 42 898 9 KAMAKHYA GOODS P. LTD. 24 00 000 7 72 000 3 2 9 46 126 3 37 18 126 10. CAMELLIA COMMERCIA P LTD 10 00 000 8 32 280 3 58 97 644 3 67 29 924 11 ANMOL COMMERCE P LTD 32 00 000 1 81 03 500 28 24 38 553 30 05 42 053 TOTAL 2 07 00 000 5 74 50 130 1 21 63 78 635 1 27 38 28 765 THE P ERUSAL OF NET WORTH CHART WOULD REVEAL THAT ALL THE INVESTOR ENTITIES HAD SUFFICIENT NET WORTH TO MAKE STATED INVESTMENT IN THE ASSESSEE COMPANY. UPON PERUSAL OF ALL THESE DOCUMENTARY EVIDENCES IT COULD SAFELY BE CONCLUDED THAT THE ASSESSEE HAD SUCCESSFUL LY DISCHARGED THE ONUS CASTED UPON HIM U/S 68 AND THE ONUS WAS ON REVENUE TO REBUT ASSESSEES EVIDENCES. 8.3 PROCEEDING FURTHER WE FIND THAT THE SOLE BASIS OF MAKING IMPUGNED ADDITION IS THE STATEMENT OF ONE OF THE DIRECTORS AS RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS U/S 133A. HOWEVER THIS STATEMENT HAS BEEN RETRACTED WITHIN A SPAN OF 7 DAYS. IT IS SETTLED LAW THAT STATEMENTS RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS WOULD NOT HAVE MUCH EVIDENTIARY VALUE UNLESS THE SAME ARE BACKED BY CREDI BLE EVIDENCES. THIS POSITION HAS BEEN SETTLED BY HONBLE SUPREME COURT IN THE CASE OF CIT V/S S.KHADER KHAN & SONS (25 TAXMANN.COM 413). THE CBDT INSTRUCTIONS NO. F.NO.286/98/2013 - IT (INV. II) DATED 18/12/2014 ALSO DISCOURAGES CONFESSIONAL STATEMENTS WITHO UT ANY CREDIBLE EVIDENCES. NO INCRIMINATING MATERIAL IS SHOWN TO HAVE BEEN FOUND DURING THE COURSE OF SURVEY PROCEEDINGS. 8.4 WE ALSO FIND THAT LEARNED CIT(A) HAS GONE BY IRRELEVANT CONSIDERATIONS TO CONFIRM THE IMPUGNED ADDITIONS. THE OBJECT CLAUSE OF TH E INVESTOR ENTITIES WOULD HAVE NO RELEVANCE VIS - - VIS PROPOSED ADDITIONS IN THE HANDS OF THE ASSESSEE U/S 68. IT IS TRITE LAW THAT NO ADDITIONS COULD BE MADE MERELY ON THE BASIS OF SUSPICION CONJECTURES OR SURMISES. 8.5 THE LD. DR HAS RELIED UPON THE CAS E OF HONBLE SUPREME COURT IN SUMATI DAYAL VS CIT (80 TAXMAN 89) & DURGA PRASAD MORE (82 ITR 540 26/08/1971). NO DOUBT THAT THE REVENUE AUTHORITIES WERE NOT REQUIRED TO PUT BLINKERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF THE DOCUMENTS PRODUCED BEFORE THEM. HOWEVER WE FIND THAT NO SUCH INQUIRIES HAVE BEEN MADE BY THE AUTHORITIES EXCEPT FOR THE ALLEGATIONS THAT THE SHARE CAPITAL WAS BOGUS IN NATURE. NOTHING WAS BROUGHT ON RECORD THAT TO SUBSTANTIATE THE FACT THAT THE ASSESSEES UNACCOUNTED MONEY WAS ROUTED IN THE BOOKS IN THE GARB OF SHARE CAPITAL. 8.6 THE ENTIRETY OF FACTS AND CIRCUMSTANCES AS ENUMERATED HEREINABOVE DO NOT CONVINCE US TO CONCUR WITH THE ST AND OF LD. CIT(A). THE IMPUGNED ADDITIONS IN OUR CONSIDERED OPINION COULD NOT BE SUSTAINED UNDER LAW IN THE LIGHT OF BINDING JUDICIAL PRONOUNCEMENTS AS ENUMERATED BY US IN THE OPENING PARAGRAPHS. THEREFORE WE DELETE THE SAME. CONSEQUENTLY THE SET - OFF O F LOSSES AS ALLOWABLE UNDER LAW WOULD BE AVAILABLE TO THE ASSESSEE. GROUND NOS. 4 STAND ALLOWED. GROUND NO.5 STAND 10 ALLOWED FOR STATISTICAL PURPOSES. GROUND NOS. 6 TO 8 BEING CONSEQUENTIAL IN NATURE WOULD NOT REQUIRE ANY SPECIFIC ADJUDICATION ON OUR PAR T. 8.7 SO FAR AS THE LEGAL GROUNDS ARE CONCERNED WE FIND THAT THE ORIGINAL RETURN WAS PROCESSED U/S 143(1) AND THE ONLY REQUIREMENT IN LAW TO TRIGGER ASSESSMENT WAS THAT LD. AO CERTAIN REASONS TO BELIEVE THAT CERTAIN INCOME ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE. WE FIND THAT LD. AO WAS CLINCHED WITH TANGIBLE INFORMATION FROM INVESTIGATION WING WHICH SUGGESTED POSSIBLE ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSESSEE. IN OUR OPINION NOTHING MORE WAS REQUIRED AT THIS STAGE SINCE LD. AO HAD SUFFIC IENT REASONS TO FORM SUCH A BELIEF. THEREFORE WE DO NOT FIND MUCH SUBSTANCE IN ASSESSEES LEGAL GROUNDS. GROUND NOS. 1 TO 3 STAND DISMISSED. 8.8 THE APPEAL STANDS PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. THIS DECISION HAS SUBSEQUENTLY BEEN FOLLOWED B Y ANOTHER COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ASSESSEES SISTER CONCERN NAMELY M/S MOONGIPA DEVELOPMENT & INF. LTD. FOR AYS 2009 - 10 & 2010 - 11 ITA NOS.625 & 626/MUM/2019 COMMON ORDER DATED 04/12/2020 ON IDENTICAL FACTS AND CIRCUMSTANCES. 7. WE FIND THAT FACTS IN THIS YEAR ARE QUITE IDENTICAL TO THE FACTS OF EARLIER YEARS. IN FACT LD. AR HAS DEMONSTRATED THAT 1 3 ENTITIES OUT OF THE 16 ENTITIES ARE COMMON ENTITIES AS DEALT WITH BY THE TRIBUNAL IN THE CAPTIONED APPEALS AS IS EVIDENT FROM THE FOLLO WING TABULATION : - NO. NAME OF INVESTOR ENTITY BBPL* 2011 - 12 & 2012 - 13 MDIL** 2009 - 10 MDIL** 2010 - 11 1 . ANMO L COMMERCE P.LTD. YES YES 2 . REXNOX TREXIM P. LTD. YES YES 3. SSA MOTOR FINANCE P.LTD. YES 4. PRIYAMVADA FINVEST P.LTD. YES 5. MOTOCAB F INANCE P LTD YES 6. CAMELLIA COMMERCIAL PVT. LTD. YES 7. CHERRY TIEUP P.LTD. YES 8. DEEPA HOLDING P.LTD. YES YES 9. HILLL VIEW HIRE PURCHASE P.LTD. YES 10. MANDYATI DEALCOM P.LTD. YES 11. NEXTGEN TRADECOM P LTD YES YES 12. VANILLA TIE UP P.LTD. YES 13. KAMAKHYA GOODS P.LTD. YES YES 11 *BBPL - ASSESSEE (M/S BINI BUILDERS PVT. LTD.) * * MDIL SISTER CONCERN OF A SSESSEE ( M/S MOONGIPA DEV. & INF. LTD. ) REGARDING REMAINING 3 ENTITIES I.E. (I) M/S GORSIA MARINE EQUIPME NT PVT. LTD. ; (II) M/S SITARAM INVESTMENT PVT. LTD.; (III) M/S MARUDHAR SUPPLIERS PVT. LTD. WE FIND THAT THE ASSESSEE HAD FURNISHED SIMILAR SUFFICIENT DOCUMENTARY EVIDENCES AS FOLLOWS: - (I) SHARE APPLICATION FORM (II) COPY OF CHEQUE (III) COPY OF CHEQUE DEPOSIT SLIP (IV) COPY OF INVESTORS BANK STATEMENT (V) COPY OF SHARE CERTIFICATE COUNTERFOIL (VI) COPY OF SOURCE OF FUNDS CERTIFICATE (V I I) COPY OF AUDIT REPORT ALONG WITH FINANCIAL STATEMENTS OF THE INVESTOR ENTITY (VI I I) COPY OF ITR ACKNOWLEDGEMENT OF T HE INVESTOR ENTITY (IX) COPY OF PAN CARD (X ) COPY OF CERTIFICATE OF INCORPORATION OF INVESTOR ENTITY (XI) MEMORANDUM & ARTICLES OF ASSOCIATION OF INVESTOR ENTITY (X I ) COMPANY MASTER DATA SHOWING STATUS AS ACTIVE (XI I ) COPY OF BOARD RESOLUTION (XIV) COPY OF RBI CERTIFICATE OF REGISTRATION UPON PERUSAL OF THESE DOCUMENTS IT COULD BE SAID THAT THE PRIMARY ONUS AS CASTED ON THE ASSESSEE IN TERMS OF THE REQUIREMENT OF SECTION 68 WAS DULY FULFILLED AND THE ONUS WAS ON REVENUE TO CONTROVERT THE EVIDENCES FURN ISHED BY THE ASSESSEE. HOWEVER WE FIND THAT NOTHING HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SUBSTANTIATE THE FACT THAT THE ASSESSEES UNACCOUNTED MONEY WAS ROUTED IN THE BOOK S IN THE GARB OF SHARE CAPITAL. IT IS TRITE LAW THAT NO ADDITION COULD BE MA DE MERELY ON THE BASIS OF ALLEGATION SUSPICION CONJECTURES OR SURMISES. UPON PERUSAL OF ASSESSEES WRITTEN SUBMISSIONS AS PLACED ON RECORD ANOTHER PERTINENT FACT TO BE NOTED IS THAT ALL THE 16 INVESTOR ENTITIES HAS SUFFICIENT NET WORTH (SHARES CAPITAL + RESERVES & SURPLUS) TO MAKE INVESTMENT IN THE ASSESSEE AND THE PERCENTAGE OF INVESTMENT MADE BY THEM IN THE ASSESSEE COMPANY IS MERELY IN THE RANGE OF 0. 47 % TO 5.45 % OF THEIR RESPECTIVE NET WORTH. 12 8. HENCE ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND R ESPECTFULLY FOLLOWING THE EARLIER VIEW OF TRIBUNAL IN ASSESSEES OWN CASE WE DELETE THE IMPUGNED ADDITIONS. CONSEQUENTLY THE SET - OFF OF LOSSES AS ALLOWABLE UNDER LAW WOULD BE AVAILABLE TO THE ASSESSEE. WE ORDER SO. THE LD. AO IS DIRECTED TO RE - COMPUTE ASSESSEES INCOME IN TERMS OF OUR ABOVE ORDER. 9. GROUND NOS. 1 TO 3 STANDS DISMISSED SINCE NO INFIRMITY COULD BE FOUND IN LD. AOS ACTION IN REOPENING THE CASE OF THE ASSESSEE. THE STAND OF LD. CIT(A) IN THIS REGARD STANDS CONFIRMED. GROUND NO. 4 STAND ALLOWED. GROUND NO.5 STANDS ALLOWED FOR STATISTICAL PURPOSES. GROUND NOS. 6 & 7 ARE MERELY CONSEQUENTIAL IN NATURE AND THEREOF WOULD NOT REQUIRE ANY SPECIFIC ADJUDICATION ON OUR PART. 10. THE APPEAL STANDS PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 05/05/2021 SD/ - SD/ - (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 05/05/2021 SR.PS JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. / DR ITAT MUMBAI 6. / GUARD FILE / BY ORDER / (DY./ASSTT.REGISTRAR) / ITAT MUMBA I.