ITO, Ward-7(1), New Delhi v. Delight Resorts P.Ltd, Ghaziabad

ITA 6401/DEL/2017 | 2014-2015
Pronouncement Date: 18-03-2021 | Result: Dismissed

Appeal Details

RSA Number 640120114 RSA 2017
Assessee PAN AAHCA6602J
Bench Delhi
Appeal Number ITA 6401/DEL/2017
Duration Of Justice 3 year(s) 5 month(s)
Appellant ITO, Ward-7(1), New Delhi
Respondent Delight Resorts P.Ltd, Ghaziabad
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 18-03-2021
Assessment Year 2014-2015
Appeal Filed On 18-10-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI AMIT SHUKLA JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI ACCOUNTANT MEMBER I.T.A. NO.4691/DEL/2016 ASSESSMENT YEAR 2012-13 INCOME TAX OFFICER WARD-2(4) NEW DELHI. V. M/S. ANGEL CEMENT PVT. LTD. 58 1 ST FLOOR JAIPURIA ENCLAVE KAUSHAMBI GHAZIABAD. TAN/PAN: AAHCA6602J (APPELLANT) (RESPONDENT) I.T.AS. NO.5974/DEL/2017 & 6401/DEL/2017 ASSESSMENT YEARS 2012-13 & 2014-15 INCOME TAX OFFICER WARD-7(1) NEW DELHI. V. M/S. DELIGHT RESORTS PVT. LTD. F-1-200/13 SECTOR-3A VAISHALI GHAZIABAD. TAN/PAN: AAACE0061C (APPELLANT) (RESPONDENT) I.T.A. NO.5398/DEL/2017 ASSESSMENT YEAR 2012-13 M/S. JAWAHAR CREDIT & HOLDINGS PVT. LTD. BHUSHAN CENTER 11 TH FLOOR HYATT REGENCY COMPLEX BHIKAJI CAMA PLACE NEW DELHI. V. ITO WARD-13(3) NEW DELHI. TAN/PAN: AAACJ2322D (APPELLANT) (RESPONDENT) 2 I.T.A. NO.5526/DEL/2017 ASSESSMENT YEARS 2012-13 ITO WARD-13(3) NEW DELHI. V. M/S. JAWAHAR CREDIT & HOLDINGS PVT. LTD. BHUSHAN CENTER 11 TH FLOOR HYATT REGENCY COMPLEX BHIKAJI CAMA PLACE NEW DELHI. TAN/PAN: AAACJ2322D (APPELLANT) (RESPONDENT) I.T.A. NO.5397/DEL/2019 ASSESSMENT YEAR 2012-13 M/S. JINGLE BELLS ALUMINIUM PVT. LTD. 116A 1 ST FLOOR SOMDUTT CHAMBERS-1 5 BHIKAJI CAMA PLACE NEW DELHI. V. ITO WARD-13(3) NEW DELHI. TAN/PAN: AACCJ1177G (APPELLANT) (RESPONDENT) I.T.A. NO.5527/DEL/2019 ASSESSMENT YEAR 2012-13 ITO WARD-13(3) NEW DELHI. V. M/S. JINGLE BELLS ALUMINIUM PVT. LTD. 116A 1 ST FLOOR SOMDUTT CHAMBERS-1 5 BHIKAJI CAMA PLACE NEW DELHI. TAN/PAN: AACCJ1177G (APPELLANT) (RESPONDENT) 3 I.T.A. NO.9287/DEL/2019 ASSESSMENT YEAR 2012-13 ITO WARD-14(2) NEW DELHI. V. M/S. KASPER INFORMATION TECHNOLOGY PVT. LTD. 77 3 RD FLOOR VIDYUT NIKUNI 112 I.P. EXTN. PATPARGANJ NEW DELHI. TAN/PAN: AAECK1995R (APPELLANT) (RESPONDENT) I.T.AS. NO.9357/DEL/2019 & 510/DEL/2019 ASSESSMENT YEARS 2012-13 & 2013-14 M/S. KASPER INFORMATION TECHNOLOGY PVT. LTD. 77 3 RD FLOOR VIDYUT NIKUNI 112 I.P. EXTN. PATPARGANJ NEW DELHI. V. ITO WARD-14(2) NEW DELHI. TAN/PAN: AAECK1995R (APPELLANT) (RESPONDENT) I.T.A. NO.509/DEL/2019 ASSESSMENT YEAR 2013-14 LANDSKY REAL ESTATES PVT. LTD. C-17 FLAT NO.4 MARG NO.4A VINOD NAGAR DELHI. V. ITO WARD-15(1) NEW DELHI. TAN/PAN: AAABCL9271E (APPELLANT) (RESPONDENT) I.T.A. NO.5736/DEL/2016 ASSESSMENT YEAR 2012-13 ITO WARD-23(4) NEW DELHI. V. M/S. SINTEX CONSUMERS ELECTRONICS PVT. LTD. 3573 2 ND FLOOR KUCHA RAJA DAYA RAM CHAWRI BAZAR DELHI TAN/PAN: AAMCS9874K (APPELLANT) (RESPONDENT) 4 I.T.A. NO.6070/DEL/2016 ASSESSMENT YEAR 2012-13 ACIT CENTRAL CIRCLE-3 NEW DELHI. V. STAR LIGHT CONSUMER ELECTRONICS PVT. LTD. R/O 315 3 RD FLOOR E-BLOCK INTERNATIONAL TRADE TOWER NEHRU PLACE NEW DELHI. TAN/PAN: AAKCS9791D (APPELLANT) (RESPONDENT) I.T.A. NO.5744/DEL/2016 ASSESSMENT YEAR 2012-13 ITO WARD-24(2) NEW DELHI. V. STYLISH CONSTRUCTION PVT. LTD. 1027 TOP FLOOR WARD NO.08 MEHRA CHOWK MEHRAULI NEW DELHI. TAN/PAN: AAICS4664H (APPELLANT) (RESPONDENT) I.T.A. NO.5741/DEL/2016 ASSESSMENT YEAR 2012-13 ITO WARD-24(3) NEW DELHI. V. SUKHNA STEEL PVT. LTD. F-BLOCK 1 ST FLOOR INTERNATIONAL TRADE TOWER NEHRU PLACE NEW DELHI. TAN/PAN: AACCS2511F (APPELLANT) (RESPONDENT) 5 I.T.A. NO.5742/DEL/2016 ASSESSMENT YEAR 2012-13 ITO WARD-24(3) NEW DELHI. V. SUKHNA REAL ESTATE PVT. LTD. 125 SHAKTI KHAND-I INDIRAPURAM GHAZIABAD. TAN/PAN: AAJCS5947E (APPELLANT) (RESPONDENT) I.T.A. NO.5740/DEL/2016 ASSESSMENT YEAR 2012-13 ITO WARD-24(3) NEW DELHI. V. SUNLIGHT TOUR AND TRAVELS PVT. LTD. PLOT NO.206 APARNA APARTMENTS B-17 SHALIMAR BAGH SAHIBABAD. UTTAR PRADESH. TAN/PAN: AAJCS6819H (APPELLANT) (RESPONDENT) I.T.A. NO.5832/DEL/2016 ASSESSMENT YEAR 2012-13 ACIT CENTRAL CIRCLE-3 NEW DELHI. V. SUPERSTAR AGENCY PVT. LTD. 211 SOMDUTT CHAMBER-II BHIKAJI CAMA PLACE NEW DELHI. TAN/PAN: AAKCS9725M (APPELLANT) (RESPONDENT) 6 I.T.A. NO.5650/DEL/2016 ASSESSMENT YEAR 2012-13 ITO WARD-24(4) NEW DELHI. V. SUPREME PLACEMENT SERVICES PVT. LTD. E-60 NEAR ANAND PRADHAN OM VIHAR PHASE-V UTTAM NAGAR NEW DELHI. TAN/PAN: AAICS4665G (APPELLANT) (RESPONDENT) I.T.A. NO.2920/DEL/2017 ASSESSMENT YEAR 2013-14 GLOBUS REAL INFRA PVT. LTD. (FORMERLY SUR BUILDCON PVT. LTD.) 211 SOMDUTT CHAMBER-2 BHIKAJI CAMA PLACE NEW DELHI. V. DCIT CIRCLE-10(1) NEW DELHI. TAN/PAN: AALCS7467F (APPELLANT) (RESPONDENT) I.T.A. NO.2024/DEL/2012 ASSESSMENT YEAR 2012-13 ITO WARD-25(3) NEW DELHI. V. M/S. TRACK CASTING INDIA PVT. LTD. 117 SHUBHAM APPARTMENTS 34 I.P. EXTENSION NEW DELHI. TAN/PAN: AABCT4544N (APPELLANT) (RESPONDENT) I.T.A. NO.5831/DEL/2016 ASSESSMENT YEAR 2012-13 7 ACIT CENTRAL CIRCLE-3 NEW DELHI. V. SUR BUILDCON PVT. LTD. 211 SOMDUTT CHAMBER-II BHIKAJI CAMA PLACE NEW DELHI. TAN/PAN: AALCS7467F (APPELLANT) (RESPONDENT) ASSESSEE BY: S/SHRI S.K. TULSIYAN ADV. ASHWANI KUMAR CA BHOOMIJA VERMA ADV. ADITYA KUMAR CA AND BHAVESH JINDAL CA DEPARTMENT BY: MS. SUNITA SINGH CIT-D.R. DATE OF HEARING: 21 12 2020 DATE OF PRONOUNCEMENT: 03 2021 O R D E R PER BENCH: THE AFORESAID BUNCH OF 22 APPEALS RELATING TO ABOVE NAMED 16 ASSESSEES PERTAIN TO QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE ASSESSMENT YEARS 2012-13 AND 2013-14 ARISING OUT OF 9 SEPARATE IMPUGNED APPELLAT E ORDERS. THE ISSUES INVOLVED IN ALL THE 22 APPEALS ARE ARISI NG OUT OF IDENTICAL SET OF FACTS AND ARE INEXTRICABLE INTERCO NNECTED WITH EACH OTHER AND COMMON ISSUE IS PERMEATING IN ALL TH E APPEALS WITH SIMILAR ADDITIONS. BRIEF BACKGROUND OF THE CASE 2. THE ABOVE NAMED ASSESSEE-COMPANIES ARE ESSENTIAL LY CONTROLLED AND MANAGED BY THE PROMOTERS OF THE ERST WHILE COMPANY M/S BHUSHAN STEEL LTD. NOW KNOWN AS TATA STEEL LTD. (TSL) AFTER THE ACQUISITION OF BSL BY BAMNIPAL STEEL LTD. WHICH IS A WHOLLY OWNED SUBSIDIARY OF TATA STEEL LT D ON 18 TH 8 MAY 2018 UNDER THE INSOLVENCY AND BANKRUPTCY CODE 2016. IN NUTSHELL THE PRIMARY ADDITION IN ALL THE APPEALS PERTAIN TO ADDITIONS U/S.68 ON THE CREDITS IN THE FORM OF SHAR E CAPITAL/SHARE PREMIUM AND/ OR LOAN AND ADVANCES APP EARING IN THE BOOKS OF ASSESSEE COMPANIES IN THE ASSESSMEN T YEAR 2012-13 IN 15 CASES; IN A.Y. 2013-14 IN 3 CASES; AN D ASSESSMENT YEAR 2014-15 IN ONE CASE. THE CORE CONTE NTION OF THE ASSESSEE BEFORE US HAS BEEN IN A NUTSHELL IS TH AT THE FUNDS HAVE BEEN CHANNELED FROM THE REGULAR BOOKS OF ACCOUNT OF BHUSHAN ENERGY LTD. WHICH IS A SUBSIDIARY OF BHU SHAN STEEL LTD. INTO A MAZE OF GROUP COMPANIES IN THE FO RM OF SHARE CAPITAL AND/OR LOAN AND ADVANCES. THE ACCOUNTED FUN DS I.E. RECORDED IN THE BHUSHAN ENERGY LTD. HAVE BEEN ROUTE D THROUGH WEB OF GROUP COMPANIES AND FINALLY RE-ROUTE D BACK INTO THE BOOKS OF BHUSHAN ENERGY LTD. THE ASSESSING OFFICER ON THE OTHER HAND HAS TREATED THE SHARE CAPITAL/ SH ARE PREMIUM AND OR LOAN AND ADVANCES APPEARING IN THE B ALANCE SHEET OF AFORESAID ASSESSEE COMPANIES AS ALLEGED IN TRODUCTION OF UNACCOUNTED FUNDS OF THE ASSESSEE COMPANIES INTO THE REGULAR BOOKS OF ACCOUNT WHICH HAS BEEN ADDED U/S.6 8. IN SIX CASES THE BONUS SHARE ISSUED BY THE RESPECTIVE ASS ESSEE COMPANY HAS ALSO BEEN ADDED BY THE ASSESSING OFFICE R WHICH WAS MERELY IN THE NATURE OF TRANSFER ENTRIES REPRES ENTING CAPITALIZATION OF RESERVE AND SURPLUS. APART FROM T HAT COMMISSION EXPENSES ON NOTIONAL BASIS U/S.69C ALLEG ED TO HAVE BEEN PAID BY THE ASSESSEE FOR AVAILING SUCH ACCOMMODATION ENTRIES FROM THE GROUP COMPANIES HAS ALSO 9 BEEN ADDED BY LD. CIT (A) BY WAY OF ENHANCEMENT. TH OUGH IN MAJORITY OF CASES LD. CIT (A) HAS DELETED THE ADDITI ON MADE U/S 68. AT A GLANCE THE ADDITION MADE IN THE CASE O F THE ASSESSEE CAN BE TABULATED IN THE FOLLOWING MANNER: SL. NO. NAME OF THE ASSESSEE & NATURE OF ADDITIONS MADE BY THE A.O. DATE OF ASST. ORDER A.Y ASSES SMENT ORDER U/S QUANTUM OF ADDITION(S) MADE BY THE LD. A.O DETAILS OF ORIGINAL RETURN DATE OF FILING OF ITR & INCOME DECLARED 1. ANGEL CEMENT PVT. LTD. - SHARE CAPITAL SEC 68 - CURRENT LIABILITIES (PAYABLES) SEC 68 31.03.20 15 2012- 13 143(3) 66 00 00 000 54 70 00 000 26.09.2012 3 803/- 2. DELIGHT RESORTS PVT. LTD. - SHARE CAPITAL SECTION 68 - ADVANCE SECTION 68 - 50% DISALLOWANCE OF EMPLOYEE BENEFIT EXPENSES 30.03.20 15 2012- 13 143(3) 10 00 00 000 66 56 47 519 5 22 890 29.09.2012 (-) 3 80 468/- 3. DELIGHT RESORTS PVT. LTD. - ADVANCE SECTION 68 30.11.20 16 2014- 15 143(3) 37 70 00 000 30.09.2014 47 080/- 4. JAWAHAR CREDIT & HOLDINGS PVT. LTD. - SHARE CAPITAL SECTION 68 27.03.20 15 2012- 13 143(3) 73 50 00 000 24.09.2012 2 70 000/- 5. JINGLE BELLS ALUMINIUM PVT. LTD. - SHARE CAPITAL SECTION 68 27.03.20 15 2012- 13 143(3) 62 00 00 000 26.09.2012 3 167/- 6. KASPER INFORMATION TECHNOLOGY PVT. LTD. - SHARE CAPITAL SECTION 68 16.03.20 15 2012- 13 143(3) 46 00 00 000 27.09.2012 1 738/- 7. KASPER INFORMATION TECHNOLOGY PVT. LTD. - SHARE CAPITAL SECTION 68 28.03.20 16 2013- 14 143(3) 16 00 00 000 22.09.2013 2 47 050/- 8. LANDSKY REAL ESTATE PVT. LTD. - SHARE CAPITAL SECTION 68 - ADVANCES SECTION 68 31.03.20 15 2013- 14 143(3) 16 00 00 000 2 60 00 000 22.09.2013 2 48 450/- 9. SINTEX CONSUMER ELECTRONICS PVT. LTD. - SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 18 22 80 000/-) SECTION 68 25.03.20 15 2012- 13 143(3) 78 22 80 000 26.09.2012 4 026/- 10. STARLIGHT CONSUMER ELECTRONIC PVT. LTD. - SHARE CAPITAL SECTION 68 - CURRENT LIABILITIES SECTION 68 24.03.20 15 2012- 13 143(3) 32 25 00 000 30 18 00 000 22.09.2012 5 340/- 11. STYLISH CONSTRUCTION PVT. LTD. - SHARE CAPITAL SECTION 68 - CURRENT LIABILITIES SECTION 68 - 14A 24.03.20 15 2012- 13 143(3) 30 00 00 000 31 60 00 000 23 32 000 29.09.2012 15 48 189/- 12. SUKHNA REAL ESTATES PVT. LTD. - SHARE CAPITAL (INCLUDING 26.03.20 15 2012- 13 143(3) 80 63 40 000 29.09.2012 2 77 294/- 10 BONUS SHARES OF RS. 20 63 40 000/-) SECTION 68 13. SUKHNA STEEL PVT. LTD. - SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 16 80 000/-) SECTION 68 26.03.20 15 2012- 13 143(3) 26 16 80 000 20.09.2012 7 844/- 14. SUNLIGHT TOURS & TRAVEL PVT. LTD. - SHARE CAPITAL (INCLUDING BONUS SHARE OF RS. 12 01 68 000/-) SECTION 68 26.03.20 15 2012- 13 143(3) 52 01 68 000 29.09.2012 3 69 875/- 15. SUPER STAR AGENCY PVT. LTD. SHARE CAPITAL SECTION 68 27.03.20 15 2012- 13 143(3) 42 25 00 000 22.09.2012 4 840/- 16. SUPREME PLACEMENT SERVICES PVT. LTD. - SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 12 43 00 000/-) SECTION 68 27.03.20 15 2012- 13 143(3) 72 43 00 000 29.09.2012 9 73 438/- 17. GLOBUS REALINFRA PVT. LTD. (SUR BUILDCON) - SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 17 09 40 000/) - SEC 68 26.03.20 15 2012- 13 143(3) 98 49 40 000 24.09.2012 7 18 936/- 18. GLOBUS REALINFRA PVT. LTD. (SUR BUILDCON) - SHARE CAPITAL SECTION 68 - UNSECURED LOANS SECTION 68 31.03.20 16 2013- 14 143(3) 5 60 00 000 2 95 00 000 28.09.2013 34 44 000/- 19. TRACK CASTING INDIA PVT. LTD. - SHARE CAPITAL SECTION 68 - UNEXPLAINED EXPENSES (ALLEGED COMMISSION EXPENSES) - SEC 69C 27.03.20 15 2012- 13 143(3) 31 00 00 000 7 75 000 28.09.2012 69 015/- TOTAL 10 65 22 85 409 APART FROM THAT THERE WERE CERTAIN MINOR ADDITIONS OF DISALLOWANCE OF EMPLOYEE BENEFIT EXPENSES IN THE CA SE OF DELIGHT RESORT PVT. LTD. FOR ASSESSMENT YEAR 2012-1 3 WHICH HAS BEEN DELETED BY CIT(A) AND NO APPEAL HAS BEEN F ILED BY THE REVENUE; AND DISALLOWANCE U/S.14A IN THE CASE O F STYLISH CONSTRUCTION PVT. LTD. WHICH HAS BEEN CONTESTED. 3. IN SO FAR AS THE ADDITION MADE U/S.68 AND 69 IS CONCERNED THE LD. CIT(A) IN THE VARIOUS CASES HAVE ADOPTED DIVERGENT VIEW IN THE CASE OF DIFFERENT ASSESSEE DE SPITE THERE 11 WERE IDENTICAL SET OF FACTS AND CIRCUMSTANCES. IN M AJORITY OF THE CASES THE ADDITION MADE U/S.68 AND 69C BY THE A SSESSING OFFICER HAVE BEEN DELETED BY CIT(A) PRIMARILY ON TH E GROUND THAT ASSESSEE HAS DISCHARGED THE ONUS OF ESTABLISHI NG THE REQUISITE INGREDIENTS U/S.68 AND AFTER EXAMINING TH E FUND FLOW STATEMENT AS TO HOW THE MONEY HAS ORIGINATED F ROM BHUSHAN ENERGY LTD AND GONE BACK TO SAME COMPANY. I N CERTAIN CASES ADDITIONS HAVE BEEN CONFIRMED BY THE LD. CIT(A) MAINLY RELYING UPON THE REASONING GIVEN BY THE ASSE SSING OFFICER. IN TABULAR FORM THE ADDITIONS CONFIRMED AN D DELETED BY THE LD. CIT (A) IN ALL THE APPEALS ARE AS UNDER: SL. NO. NAME OF THE ASSESSEE & NATURE OF ADDITION MADE BY THE LD. A.O A.Y ASST. ORDER U/S QUANTUM OF ADDITION CONFIRMATIO N (C) OR DELETION (D) BY THE LD. C.I.T (A) APPEAL BEFORE THE HONBLE ITAT FILED BY REVENUE (R) OR ASSESSEE(A) 1. ANGEL CEMENT PVT. LTD. - SHARE CAPITAL SEC 68 - CURRENT LIABILITIES (PAYABLES) SEC 68 2012-13 143(3) 66 00 00 000 54 70 00 000 DELETED (D) D R R 2. DELIGHT RESORTS PVT. LTD. - SHARE CAPITAL SECTION 68 - ADVANCE SECTION 68 - 50% DISALLOWANCE OF EMPLOYEE BENEFIT EXPENSES 2012-13 143(3) 10 00 00 000 66 56 47 519 5 22 890 D D D R R NOT CHALLENGED 3. DELIGHT RESORTS PVT. LTD. - ADVANCE SECTION 68 2014-15 143(3) 37 70 00 000 D R 4. JAWAHAR CREDIT & HOLDINGS PVT. LTD. - SHARE CAPITAL SECTION 68 - ALLEGED UNDISCLOSED COMMISSION INCOME [ADDED BY C.I.T (A)] 2012-13 143(3) 73 50 00 000 1 47 00 000 D FRESH ADDITION MADE BY C.I.T (A) R A 5. JINGLE BELLS ALUMINIUM PVT. LTD. - SHARE CAPITAL SECTION 68 - ALLEGED UNDISCLOSED COMMISSION INCOME [ADDED BY C.I.T (A)] 2012-13 143(3) 62 00 00 000 1 24 00 000 D FRESH ADDITION MADE BY C.I.T (A) R A 6. KASPER INFORMATION TECHNOLOGY PVT. LTD. - SHARE CAPITAL SECTION 68 - ALLEGED UNDISCLOSED COMMISSION INCOME [ADDED BY C.I.T (A)] 2012-13 143(3) 46 00 00 000 92 00 000 D FRESH ADDITION MADE BY C.I.T (A) R A 12 SL. NO. NAME OF THE ASSESSEE & NATURE OF ADDITION MADE BY THE LD. A.O A.Y ASST. ORDER U/S QUANTUM OF ADDITION CONFIRMATIO N (C) OR DELETION (D) BY THE LD. C.I.T (A) APPEAL BEFORE THE HONBLE ITAT FILED BY REVENUE (R) OR ASSESSEE(A) 7. KASPER INFORMATION TECHNOLOGY PVT. LTD. - SHARE CAPITAL SECTION 68 2013-14 143(3) 16 00 00 000 C A 8. LANDSKY REAL ESTATE PVT. LTD. - SHARE CAPITAL SECTION 68 - ADVANCES SECTION 68 2013-14 143(3) 16 00 00 000 2 60 00 000 C C A A 9. SINTEX CONSUMER ELECTRONICS PVT. LTD. - SHARE CAPITAL (INCLUDING BONUS SHARES OF 18.228 CRORES) SECTION 68 2012-13 143(3) 78 22 80 000 D R1 10. STARLIGHT CONSUMER ELECTRONIC PVT. LTD. - SHARE CAPITAL SECTION 68 - CURRENT LIABILITIES SECTION 68 2012-13 143(3) 32 25 00 000 30 18 00 000 D D R R 11. STYLISH CONSTRUCTION PVT. LTD. - SHARE CAPITAL SECTION 68 - CURRENT LIABILITIES SECTION 68 - 14A 2012-13 143(3) 30 00 00 000 31 60 00 000 23 32 000 D D RESTRICTED TO 5 LACS R R R 12. SUKHNA REAL ESTATES PVT. LTD. SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 20 63 40 000) SECTION 68 2012-13 143(3) 80 63 40 000 D R 13. SUKHNA STEEL PVT. LTD. - SHARE CAPITAL (INCLUDING BONUS SHARES OF 16.80 LACS) SECTION 68 2012-13 143(3) 26 16 80 000 D R 14. SUNLIGHT TOURS & TRAVEL PVT. LTD. - SHARE CAPITAL (INCLUDING BONUS SHARE OF 12 01 68 000) SECTION 68 2012-13 143(3) 52 01 68 000 D R2 15. SUPER STAR AGENCY PVT. LTD. - SHARE CAPITAL SECTION 68 2012-13 143(3) 42 25 00 000 D R 16. SUPREME PLACEMENT SERVICES PVT. LTD. - SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 12.43 CRORES) SECTION 68 2012-13 143(3) 72 43 00 000 D R3 17. GLOBUS REALINFRA PVT. LTD. (SUR BUILDCON) - SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 17 09 40 000/) - SEC 68 2012-13 143(3) 98 49 40 000 D R 18. GLOBUS REALINFRA PVT. LTD. (SUR BUILDCON) - SHARE CAPITAL SECTION 68 2013-14 143(3) 5 60 00 000 2 95 00 000 C4 C A A 13 SL. NO. NAME OF THE ASSESSEE & NATURE OF ADDITION MADE BY THE LD. A.O A.Y ASST. ORDER U/S QUANTUM OF ADDITION CONFIRMATIO N (C) OR DELETION (D) BY THE LD. C.I.T (A) APPEAL BEFORE THE HONBLE ITAT FILED BY REVENUE (R) OR ASSESSEE(A) - UNSECURED LOANS SECTION 68 19. TRACK CASTING INDIA PVT. LTD. - SHARE CAPITAL SECTION 68 - UNEXPLAINED EXPENSES (ALLEGED COMMISSION EXPENSES) - SEC 69C 2012-13 143(3) 31 00 00 000 7 75 000 D D R NOT CHALLENGED TOTAL 10 68 85 85 409 4. THUS OUT OF TOTAL ADDITION OF RS. 10 65 22 85 409/- MADE U/SS. 68 69C & 14A IN THE CASES OF THE ASSESSEES H EREIN ADDITIONS AGGREGATING TO RS. 10 22 02 85 409/- HAVE BEEN DELETED FROM THE FIRST APPELLATE STAGE. THE ADDITIO NS TO THE EXTENT DELETED BY THE ID. C.I.T (A)S HAVE BEEN CONT ESTED IN APPEAL BEFORE THE HON'BLE ITAT BY THE DEPARTMENT. T HE CONFIRMATION OF BALANCE ADDITIONS (AS AND WHERE APP LICABLE) HAS BEEN CONTESTED BY THE RESPECTIVE ASSESSEES BEFO RE THE HON'BLE ITAT. FURTHER IN THE CASES OF THREE ASSESS EES NAMELY I) JAWAHAR CREDIT & HOIDINGS PVT. LTD. (A.Y. 2012-1 3); II) JINGLE BELLS ALUMINIUM PVT. LTD (A.Y. 2012-13); AN D III) KASPER INFORMATION TECHNOLOGY PVT. LTD. (A.Y. 2012- 13) THE LD. C.I.T (A) WHILE DELETING THE ADDITIONS MADE BY THE A.OS U/S. 68 HAS MADE FRESH ADDITIONS ON ACCOUNT OF ALLE GED COMMISSION INCOME AGGREGATING TO RS. 3 63 00 000/- FOR PROVIDING FACILITY TO ROUTE THE IMPUGNED TRANSACTIO NS. THUS THE LD. CIT(A) AT THE FIRST APPELLATE STAGE HAVE AD OPTED DIVERGENT VIEWS WITH RESPECT TO THE SUSTAINABILITY OF IDENTICAL ADDITIONS MADE BY THE LD. A.O(S) U/S 68 IN THE CASE S OF THE 14 ASSESSEES HEREIN UNDER IDENTICAL FACTS AND CIRCUMST ANCES. WHEREAS IN MOST OF THE CAPTIONED CASES THE ADDITION S MADE BY THE LD. A.O(S) U/S 68 HAVE BEEN DELETED BY THE L D. CIT (A)S ON THE GROUND THAT THE ASSESSEES HAVE EFFECTIVELY E STABLISHED THE NECESSARY INGREDIENTS OF SECTION 68 WHEREAS IN FEW CASES THE LD. CIT(A)S HAVE UPHELD THE ADDITIONS MADE BY T HE A.OS U/S 68 ON THE GROUND THAT THE CONCERNED ASSESSEES H AVE AVAILED ACCOMMODATION ENTRIES IN THE GARB OF SHARE CAPITAL AND/OR LOANS & ADVANCES. IN THE REMAINING CASES THE LD. C.I.T(A)S HAVE OPINED THAT THE ASSESSEES HAVE ESSEN TIALLY WORKED AS ENTRY PROVIDERS FOR PROVIDING FACILITY TO ROUTE TRANSACTIONS IN LIEU OF CERTAIN COMMISSION INCOME. ANOTHER PECULIAR FACT TO BE NOTED IS THAT EVEN WITH RESPEC T TO THE SAME ASSESSEE DIVERGENT VIEWS HAVE BEEN TAKEN BY DIFFER ENT OFFICERS AT THE FIRST APPELLATE STAGE IN RELATION TO SIMILAR ADDITIONS U/S 68 MADE IN DIFFERENT A.YS. FOR INSTANCE:- IN SI. NO. 6 - KASPER INFORMATION TECHNOLOGY PVT . LTD. WHEREIN ADDITION U/S 68 HAS BEEN DELETED BY THE LD. CI.T(A) FOR A.Y. 2012-13 AS AGAINST SI. NO. 7 - KAS PER INFORMATION TECHNOLOGY PVT. LTD. WHEREIN SIMILAR AD DITION U/S 68 HAS BEEN CONFIRMED BY THE LD. CIT (A) FOR A. Y. 2013-14. IN SL. NO 17- GLOBUS REAL INFRA PVT. LTD. A.Y 2 012-13 WHEREIN ADDITION U/S 68 HAS BEEN DELETED BY THE CIT (A) AS AGAINST SL. NO. 18 - GLOBUS REAL INFRA PVT. LTD. A. Y. 2013- 14 WHEREIN SIMILAR ADDITION U/S 68 STANDS CONFIRMED BY 15 THE ID. CIT(A). 5. IN THE GROUNDS OF APPEAL AS RAISED BY THE ASSES SEE IN RESPECTIVE APPEALS CAN BE SUMMARIZED AS UNDER: SL. NO. NAME OF THE ASSESSEE & ITA NO. A.Y GROUNDS TAKEN BY THE ASSESSEE BEFORE THE HONBLE ITAT GROUND CHALLENGING THE UPHOLDING OF ADDITION U/S 68 ON ACCOUNT OF SHARE CAPITAL/ SHARE PREMIUM AND/OR LOANS & ADVANCES OTHER GROUNDS 1. GLOBUS REALINFRA PVT. LTD. (SUR BUILDCON) [ITA NO. 2920/DEL/2017] 2013-14 GROUND 2: LD. C.I.T(A) WAS NOT JUSTIFIED IN UPHOLDING ADDITION OF RS. RS. 8.555 CRORES (COMPRISING OF SHARE APPLICATION MONEY AMOUNTING TO RS. 5.6 CRORSE AND UNSECURED LOANS OF RS. 2.995 CRORES) RECEIVED FROM VARIOUS PARTIES BY RESORTING TO SECTION 68 ON THE GROUND THAT THE APPELLANT COMPANY HAD ALLEGEDLY FAILED TO DISCHARGE ITS ONUS AS MANDATED BY THE SAID SECTION. GROUND 1: LD. C.I.T(A) WAS NOT JUSTIFIED IN PASSING THE ORDER EXPARTE ORDER ON THE BASIS OF MATERIAL AVAILABLE ON RECORDS WITHOUT GIVING THE APPELLANT A REASONABLE OPPORTUNITY OF BEING HEARD 2. JAWAHAR CREDIT & HOLDINGS PVT. LTD. (CROSS APPEAL) [ITA NO. 5398/DEL/2019] 2012-13 N.A. AS PER THE REVISED GROUNDS OF APPEAL FILED ON 19.10.2020 GROUND 1: THE LD. C.I.T.(A)-05 NEW DELHI WHILE CORRECTLY DELETING THE ADDITION OF RS. 73 50 00 000/- MADE BY THE LD. A.O. U/S 68 ERRED IN MAKING FRESH ADDITION OF RS. 1 47 00 000/- TO THE INCOME OF THE APPELLANT COMPANY ON ACCOUNT OF ALLEGED CHARGES RECEIVED BY THE APPELLANT COMPANY @ 2% FOR PROVIDING FACILITY TO ROUTE THE IMPUGNED TRANSACTION OF RS. 73 50 00 000/- PURELY ON THE BASIS OF SURMISES AND CONJECTURES ALTHOUGH THE SAME IS NOT BACKED BY ANY SUBSTANTIVE OR TANGIBLE EVIDENCE ON RECORD. GROUND 2: THAT THE LD. C.I.T.(A)-05 NEW DELHI ACTED BEYOND JURISDICTION IN ENHANCING INCOME OF THE APPELLANT U/S 251(1)(A) OF THE INCOME-TAX ACT 1961 (THE ACT) BY INTRODUCING AND ASSESSING NEW SOURCE OF INCOME TO THE EXTENT OF RS. 1 47 00 000 /- BEYOND THE RECORD 16 SL. NO. NAME OF THE ASSESSEE & ITA NO. A.Y GROUNDS TAKEN BY THE ASSESSEE BEFORE THE HONBLE ITAT GROUND CHALLENGING THE UPHOLDING OF ADDITION U/S 68 ON ACCOUNT OF SHARE CAPITAL/ SHARE PREMIUM AND/OR LOANS & ADVANCES OTHER GROUNDS (I.E. THE RETURN OF INCOME AND ASSESSMENT ORDER) AND OUTSIDE THE SUBJECT MATTER OF ASSESSMENT APPEALED AGAINST. GROUND 3: THAT THE LD. C.I.T(A)-05 NEW DELHI ERRED IN MAKING FRESH ADDITION OF RS. 1 47 00 000/ - AND THUS ENHANCING THE INCOME OF THE APPELLANT TO THE SAID EXTENT WITHOUT ISSUING A PRIOR SHOW CAUSE NOTICE AS MANDATED U/S 251(2) OF THE ACT FOR PROVIDING A REASONABLE OPPORTUNITY TO THE APPELLANT OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT THUS RESULTING IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE . 3. JINGLE BELLS ALUMINIUM PVT. LTD. (CROSS APPEAL) [ITA NO. 5397/DEL/2019] 2012-13 N.A. AS PER THE REVISED GROUNDS OF APPEAL FILED ON 19.10.2020 GROUND 1: THE LD. C.I.T.(A)-05 NEW DELHI WHILE CORRECTLY DELETING THE ADDITION OF RS. 62 00 00 000/- MADE BY THE LD. A.O. U/S 68 ERRED IN MAKING FRESH ADDITION OF RS. 1 24 00 000/- TO THE INCOME OF THE APPELLANT COMPANY ON ACCOUNT OF ALLEGED CHARGES RECEIVED BY THE APPELLANT COMPANY @ 2% FOR PROVIDING FACILITY TO ROUTE THE IMPUGNED TRANSACTION OF RS. 62 00 00 000/- PURELY ON THE BASIS OF SURMISES AND CONJECTURES ALTHOUGH THE SAME IS NOT BACKED BY ANY SUBSTANTIVE OR TANGIBLE EVIDENCE ON RECORD. GROUND 2: THAT THE LD. C.I.T.(A)-05 NEW DELHI ACTED BEYOND JURISDICTION IN ENHANCING INCOME OF THE APPELLANT U/S 251(1)(A) OF THE INCOME-TAX ACT 1961 (THE ACT) BY INTRODUCING AND ASSESSING NEW SOURCE OF INCOME TO THE EXTENT OF RS. 1 24 00 000 /- BEYOND THE RECORD (I.E. THE RETURN OF INCOME AND ASSESSMENT ORDER) AND OUTSIDE THE SUBJECT MATTER OF ASSESSMENT APPEALED AGAINST. GROUND 3: THAT THE LD. C.I.T(A)-05 NEW DELHI ERRED IN MAKING FRESH ADDITION OF RS. 1 24 00 000/ - AND THUS 17 SL. NO. NAME OF THE ASSESSEE & ITA NO. A.Y GROUNDS TAKEN BY THE ASSESSEE BEFORE THE HONBLE ITAT GROUND CHALLENGING THE UPHOLDING OF ADDITION U/S 68 ON ACCOUNT OF SHARE CAPITAL/ SHARE PREMIUM AND/OR LOANS & ADVANCES OTHER GROUNDS ENHANCING THE INCOME OF THE APPELLANT TO THE SAID EXTENT WITHOUT ISSUING A PRIOR SHOW CAUSE NOTICE AS MANDATED U/S 251(2) OF THE ACT FOR PROVIDING A REASONABLE OPPORTUNITY TO THE APPELLANT OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT THUS RESULTING IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE . 4. KASPER INFORMATION TECHNOLOGY PVT. LTD. [ITA NO. 357/DEL/ 2019] 2012-13 N.A. AS PER THE REVISED GROUNDS OF APPEAL FILED ON 19.10.2020 GROUND 1: THE LD. C.I.T.(A)-05 NEW DELHI WHILE CORRECTLY DELETING THE ADDITION OF RS. 46 00 00 000/- MADE BY THE LD. A.O. U/S 68 ERRED IN MAKING FRESH ADDITION OF RS. 92 00 000/- TO THE INCOME OF THE APPELLANT COMPANY ON ACCOUNT OF ALLEGED CHARGES RECEIVED BY THE APPELLANT COMPANY @ 2% FOR PROVIDING FACILITY TO ROUTE THE IMPUGNED TRANSACTION OF RS. 46 00 00 000/- PURELY ON THE BASIS OF SURMISES AND CONJECTURES ALTHOUGH THE SAME IS NOT BACKED BY ANY SUBSTANTIVE OR TANGIBLE EVIDENCE ON RECORD. GROUND 2: THAT THE LD. C.I.T.(A)-05 NEW DELHI ACTED BEYOND JURISDICTION IN ENHANCING INCOME OF THE APPELLANT U/S 251(1)(A) OF THE INCOME-TAX ACT 1961 (THE ACT) BY INTRODUCING AND ASSESSING NEW SOURCE OF INCOME TO THE EXTENT OF RS. 92 00 000 /- BEYOND THE RECORD (I.E. THE RETURN OF INCOME AND ASSESSMENT ORDER) AND OUTSIDE THE SUBJECT MATTER OF ASSESSMENT APPEALED AGAINST. GROUND 3: THAT THE LD. C.I.T(A)-05 NEW DELHI ERRED IN MAKING FRESH ADDITION OF RS. 92 00 000/ - AND THUS ENHANCING THE INCOME OF THE APPELLANT TO THE SAID EXTENT WITHOUT ISSUING A PRIOR SHOW CAUSE NOTICE AS MANDATED U/S 251(2) OF THE ACT FOR PROVIDING A REASONABLE OPPORTUNITY TO THE APPELLANT OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT THUS RESULTING IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE . 18 SL. NO. NAME OF THE ASSESSEE & ITA NO. A.Y GROUNDS TAKEN BY THE ASSESSEE BEFORE THE HONBLE ITAT GROUND CHALLENGING THE UPHOLDING OF ADDITION U/S 68 ON ACCOUNT OF SHARE CAPITAL/ SHARE PREMIUM AND/OR LOANS & ADVANCES OTHER GROUNDS 5. KASPER INFORMATION TECHNOLOGY PVT. LTD. [ITA NO. 510/DEL/ 2019] 2013-14 GROUND 1: LD. C.I.T(A) WAS NOT JUSTIFIED TO UPHOLD ADDITION OF RS. 16 CRORES MADE BY THE A.O ON ACCOUNT OF BALANCE SHARE CAPITAL/PREMIUM AS AN ALLEGED UNEXPLAINED CASH CREDIT U/S 68 ON THE GROUND THAT APPELLANT HAD FAILED TO DISCHARGE THE ONUS CAST ON IT AT MANDATED BY THE SAID SECTION AND THAT THE APPELLANT HAS FAILED TO PROVE THE CREDITWORTHINESS GENUINENESS AND IDENTIFICATION OF THE INVESTORS. NA 6. LANDSKY REAL ESTATE PVT. LTD. [ITA NO.509/ DEL/2019] 2013-14 GROUND 1: LD. C.I.T(A) WAS NOT JUSTIFIED TO UPHOLD ADDITION OF RS. 16 CRORES RECEIVED BY THE APPELLANT COMPANY ON ACCOUNT OF BALANCE SHARE CAPITAL/PREMIUM AS ALLEGED UNEXPLAINED CASH CREDIT U/S 68 ON THE GROUND THAT THE APPELLANT COMPANY HAD FAILED TO DISCHARGE THE ONUS CAST ON IT BY THE SAID SECTION. GROUND 2: LD. C.I.T(A) WAS NOT JUSTIFIED TO UPHOLD ADDITION OF RS. 2.60 CRORES ON ACCOUNT OF ADVANCES TAKEN BY THE APPELLANT COMPANY FROM M/S. CANTABILE MINERALS & MININGS PVT. LTD & M/S. ANGEL CEMENT PVT. LTD. BY RESORT TO SECTION 68 ON THE GROUND THAT APPELLANT COMPANY HAS FILED TO PROVE THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. NA I) GROUNDS CHALLENGING THE CONFIRMATION/DELETION BY THE LD. C.I.T(A)OF ADDITIONS MADE BY THE A.O U/S 68 ON ACCOUNT OF ALLEGED 19 UNEXPLAINED CREDIT IN THE FORM OF SHARE CAPITAL/ SHARE PREMIUM AND/OR LOANS & ADVANCES (AS THE CASE MAY BE) RECEIVED BY THE ASSESSEE(S) CHALLENGED BY THE DEPARTMENT WHERE TH E ADDITION STANDS DELETED BY THE LD. C.I.T (A) (16 CASES) AND CHALLENGED BY THE ASSESSEE(S) (3 CASES) WHERE THE ADDITION STANDS CONFIRMED BY THE C.I.T (A). II) DEPARTMENTS GROUND CHALLENGING THE DELETION B Y THE LD. C.I.T(A) OF THE ADDITIONS MADE BY THE A.O U/S 68 WITH RESPECT TO INCREASE IN SHARE CAPITAL OF THE ASSESSEE-COMPANY ON ACCOUNT OF ISSUE OF BONUS SHARES (3 CASES). III) ASSESSEES GROUND CHALLENGING THE FRESH ADDITION (ENHANCEMENT) MADE BY THE LD. C.I.T (A)ON ACCOUNT OF ALLEGED COMM ISSION INCOME @ 2% FOR PROVIDING FACILITY TO ROUTE THE IMPUGNED FINAN CIAL TRANSACTIONS WITHOUT INTRODUCING NEW SOURCE OF INCO ME BEYOND RECORD WITHOUT ISSUING PRIOR SHOW CAUSE NOTICE U/S 251(2) CHALLENGED BY THE ASSESSEE IN THE CASES OF JINGLE BELLS ALUMINIUM PVT. LTD. (A.Y. 2012-13) KASPER INFORMATION TECHNO LOGY PVT. LTD. (A.Y. 2012-13) AND JAWAHAR CREDIT & HOLDING PV T. LTD. (A.Y. 2012-13). IV) DEPARTMENTS GROUND CHALLENGING THE ORDER OF T HE LD. C.I.T(A) RESTRICTING ADDITION TO RS. 5 LACS FROM AN ADDITION OF RS. 23 32 813/- MADE BY THE A.O U/S 14A OF THE I.T. ACT 1961 READ WITH RULE 8D OF THE I.T. RULES 1962 CHALLENGED BY THE DEPARTMENT IN THE CASE OF STYLISH CONSTRUCTION PVT. LTD. FOR A.Y. 2012-13. V) DEPARTMENTS GROUND CHALLENGING THE ALLEGED ADMISSION OF ADDITIONAL EVIDENCE BY THE LD. C.I.T(A) WITHOUT GIVING OPPORTUNITY TO THE LD. A.O IN VIOLATION OF RULE 46A OF THE I.T. RULES 1962 CHALLENGED BY THE DEPARTMENT IN THE CASES OF ANGEL CEMENT PVT. LTD. (A.Y. 2012-13) DELIGHT RESORTS PVT. LTD. (A.Y . 2012-13) AND STYLISH CONSTRUCTION PVT. LTD. (A.Y. 2012-13) . VI) ASSESSEES GROUND CHALLENGING THE PASSING OF EXPARTE ORDER BY THE LD. C.I.T. (A) URGED BY THE ASSESSEE IN THE CASE OF GLOBUS REALINFRA PVT. LTD. (EARLIER KNOWN AS SUR BUILDCON PVT. LTD.) FOR A.Y. 2013- 14. 6. NOW WE COME TO THE GROUNDS CHALLENGING CONFIR MATION OF DELETION BY THE LD. CIT (A) ON THE ADDITION MADE BY THE 20 ASSESSING OFFICER U/S.68 ON ACCOUNT OF SUMS CREDITE D IN THE BOOKS OF THE ASSESSEE IN THE FORM OF SHARE CAPITAL/ SHARE PREMIUM AND / OR LOANS AND ADVANCES AS A LEAD CASE. 7. WE WILL TAKE UP THE APPEAL IN THE CASE OF M/S . JAWAHAR CREDIT AND HOLDINGS PVT. LTD. IN ITA NO.5398/DEL/2 019 FOR THE ASSESSMENT YEAR 2012-13 AS A LEAD CASE. LD. ASS ESSING OFFICER NOTED THAT THE COMPANY WAS ENGAGED IN THE A CTIVITIES OF INVESTMENT IN SHARES IN VARIOUS COMPANIES. ON PE RUSAL OF THE BALANCE SHEET HE NOTICED THAT DURING THE YEAR UNDER CONSIDERATION THE COMPANY HAS RECEIVED RS.4 35 00 0 00/- AS SHARE CAPITAL AND RS.69 15 00 000/- AS SHARE PREMIU M BY ISSUE OF RS.3 LAC FULLY PAID UP SHARE AT THE FACE V ALUE OF RS.10 EACH AND A PREMIUM OF RS.190 PER SHARE; AND FURTHER RS.15 LAC PARTLY PAID SHARE CONVERTED INTO FULLY PAID UP SHARE @ 90 FROM THE FOLLOWING PARTIES:- SI.NO. NAME OF THE PARTIES SHARE CAPITAL SHARE PREMIUM TOTAL 1 BHUSHAN FINANCE PVT. LTD. 15000000 285000000 300000000 2 NRA IRON & STEE L PVT. LTD. 15000000 285000000 300000000 3 SRI BRIJ BHUSHAN SINGAL 4500000 40500000 45000000 4 B B SINGAL (HUF) 900000 8100000 9000000 5 SRI KISHORI LAL(HUF) 675000 6075000 6750000 6 SMT. UMA SINGAL 2025000 18225000 20250000 7 SMT. ARCHNA MITTAL 13500 00 12150000 13500000 8 SRI NEERAJ SINGAL 900000 8100000 9000000 9 NEERAJ SINGAL (HUF) 1350000 12150000 13500000 10 SMT. RITU SINGAL 1800000 16200000 18000000 TOTAL 43500000 691500000 735000000 8. IN RESPONSE TO THE SHOW CAUSE NOTICE ASSESSIN G OFFICER REQUIRED TO PROVE THE GENUINENESS AND IDENTITY AND CREDITWORTHINESS OF THE SUBSCRIBES FROM WHOM THE AS SESSEE 21 COMPANY HAS RECEIVED SHARE CAPITAL AND SHARE PREMIU M AGGREGATING TO RS.73 50 00 000/- THE ASSESSEE VIDE REPLY DATED 22.12.2014 SUBMITTED THE DETAILS OF ADDRESS A LONG WITH PAN THEIR CONFIRMATION LETTERS AND THEIR BANK STAT EMENTS HIGHLIGHTING THE RELEVANT ENTRIES. IN ORDER TO VERI FY THE GENUINENESS OF THE TRANSACTION THE ASSESSING OFFIC ER SENT U/S. 133(6) DATED 09.01.2015 FROM THE SUBSCRIBER CO MPANY NAMELY BHUSHAN FINANCE PVT. LTD. AND NRA IRON AND STEEL PVT. LTD. AND ASKED TO FURNISH THE FOLLOWING DETAIL S:- 1. COPY OF BANK STATEMENT FROM WHERE FUNDS HAVE BEEN G IVEN TO ABOVE ASSESSEE COMPANY (JCHPL). 2. SOURCE OF FUNDS RAISED FOR MAKING INVESTMENT IN THE ABOVE COMPANY ( JCHPL ). PLEASE PROVIDE COMPLETE CHAIN DETAILS OF FUNDS RECEIVED IN YOUR BANK ACCOUNT GIVING NAME/ADDRESS/P AN OF THE PERSON FROM WHOM THE SAID FUNDS HAVE BEEN RECEIVED. 3. NAME OF THE PERSON WHO OFFERED THE SHARES OF THE COMPANY ON BEHALF OF JCHPL. ALSO SUBMIT OFFER PROSPECTS IN THI S REGARD. ALSO PROVIDE JUSTIFICATION OF BUYING THE SHARE PREMIUM S UPPORTING WITH DOCUMENTARY EVIDENCES. 4. NAME OF THE PERSON (MEDIATOR) THROUGH WHOM THE DEAL WAS NEGOTIATED FOR MAKING INVESTMENTS IN SHARE/SHARE AP PLICATION MONEY. 5. COPY OF APPLICATION FORM IN RESPECT OF SHARE APPLIC ATION MONEY PAID TO JCHPL. 6. COPY OF ACKNOWLEDGEMENT OF RECEIPT SHARE APPLICATI ON FORM AND SHARE CERTIFICATE. 7. COPY OF SHARE CERTIFICATE OF THE ABOVE COMPANY (JCH PL). 22 8. PLEASE STATE WHAT IS THE CURRENT STATUS OF THESE SH ARES WHETHER THESE ARE STILL IN YOUR POSSESSION OR HAVE BEEN SOLD. 9. IN CASE THE ABOVE CERTIFICATES HAVE BEEN SOLD PLEA SE CONFIRM WITH RESPECT TO YOUR BANK STATEMENT. ALSO G IVE THE NAME/ADDRESS/PAN OF THE PARTY TO WHOM THESE SHARES OF JCHPL HAVE BEEN SOLD. 10. PLEASE PROVIDE THE COP OF ITR/BALANCE SHEET/COMPUTATION OF INCOME FOR THE A. Y. 2012-13 A ND THE YEAR IN WHICH THE TRANSACTION MENTIONED IN POINT NO.9 AB OVE HAS BEEN MADE REFLECTING CLEARLY THE ABOVE TRANSACTIONS IN RESPECTIVE BALANCE SHEETS OF YOUR COMPANY. 11. PROVIDE COPY OF ITR OF DIRECTOR/SUBSTANTIAL SHARE HOLDERS OF YOUR COMPANY. 9. IN RESPONSE THESE PARTIES HAD GIVEN REPLY TO THE ASSESSEE. THE ASSESSING OFFICER FURTHER SOUGHT FOR INFORMATIO N U/S. 133(6) FROM THE INDIVIDUAL INVESTORS AND IN RESPONS E TO WHICH AGAIN REPLIES HAVE BEEN RECEIVED. WITH REGARD TO TH E DETAILS OF SECURITY PREMIUM RECEIVED DURING THE YEAR AND JUSTI FICATION OF THE PREMIUM CHARGED ON THE ISSUE OF SHARE THE ASSES SEE VIDE LETTER DATED 12.01.2015 HAD STATED AS UNDER: (A) DURING THE YEAR THE ASSESSEE COMPANY HAS ISSU ED 3000000 FULLY PAID UP SHARES EACH AT A PREMIUM OF RS.190/- 15 00 000 PARTLY PAID UP SHARES CONVERTED INTO FULLY PAID UP SHARES AT A PREMIUM OF RS. 90/- EACH TO VARIOUS PARTIES (DETAIL S ALREADY FILED EARLIER) WITH REGARD TO THE ISSUE OF SHARES AT A PR EMIUM AND THE JUSTIFICATION FOR THE SAME IT S SUBMITTED AS UNDER: (B) ALTHOUGH THE TERM SHARE PREMIUM HAS NOT BEEN D EFINED IN ANY 23 STATUTE THE COMMONLY ACCEPTED MEANING THEREOF REFE RS TO IT BEING THE AMOUNT PAID OVER AND ABOVE THE NOMINAL VALUE OF THE SHARES AND SECURITIES OF A COMPANY. (G) THE CALCULATION OF PREMIUM WHICH A COMPANY CAN GARNER IS THE COMBINED RESULT OF THE INTERPLAY OF VARIOUS FACTORS INTRINSIC NORMATIVE AND EVEN PERCEPTUAL SOME OR MOST OF WHICH ARE NOT CAPABLE OF ANY DEGREE OF QUANTIFICATION/ENUMERATION . THE DECISION TO ASK FOR A PREMIUM WAS BASED ON PERCEPTIONS AS TO THE COMPANYS ABILITY TO RAISE FUNDS BASED ON FUTURE BU SINESS PROSPECTS PLANNING AND OUTLOOK IN THE FINANCIAL MA RKETS THE ABILITY OF AN INVESTOR TO COMMAND A PREMIUM AND THE WILLING NESS OF AN INVESTOR TO INVEST AT THE SAID PREMIUM ARE BASED ON THE INTANGIBLE FACTORS AND ISSUES SUCH AS THE ECONOMIC OUTLOOK FU TURE BUSINESS PLANS ETC AND THE SAME SHOULD BE CONSIDERED AS GENU INE REASONS. SUCH DECISIONS AND ACTIVITIES ARE INVARIABLE BASED ON INTANGIBLE PERCEPTIONS AND THOUGHT PROCESSES AND NOT BASED ON ANY NUTS AND BOLTS ANY PHYSICAL GENUINE REASONS. THE DECISION O F THE INVESTOR COMPANIES TO INVEST IN THE SHARES AT A PREMIUM MM B ASED ON THE THOUGHT PROCESS AND GROUND REALITIES PREVAILING AT THAT POINT OF TIME. MOREOVER AS ALREADY DISCUSSED ABOVE THERE ARE /WERE NO SPECIFIC GUIDELINES/RECTIFICATION/STIPULATIONS AS T O THE MANNER OF CALCULATION OF PREMIUM IN THE CASE OF AN UNLISTED C OMPANY. AS SUCH IT BECOMES THE PREROGATIVE OF THE BOARD OF DIRECTOR S OF A INVESTOR COMPANY TO DECIDE THE PREMIUM WHICH IT CAN COMMAND AND THE WISDOM OF AN INVESTOR AS TO WHETHER HE WOULD BE WIL LING TO PAY THE SAME. IN THE GIVEN CASE THE CALCULATION OF PREMIUM WHICH THE ASSESSEE COMPANY COULD COMMAND WAS BASED ON ITS FUT URE PLANS AND THE EXPECTED INFLOWS THEREFROM WITH FACTS AND P ROJECTIONS WERE FOUND TO BE ACCEPTABLE TO THE INVESTORS AND ACCORDI NGLY NO ADVERSE 24 VIEW CAN BE ARRIVED AT WITH REGARD TO THE SAME. 10. THE ASSESSING OFFICER FURTHER ASKED THE ASSESS EE COMPANY TO FURNISH DETAILS OF BUSINESS ACTIVITIES D ONE BY THE COMPANY YEAR WISE DETAILS OF DIVIDEND RECEIVED DUR ING THE YEAR AND THE LAST THREE YEARS YEAR WISE BREAK UP O F PROFIT AND LOSS ACCOUNT INCURRED BY THE ASSESSEE DURING THE YE AR AND LAST THREE YEARS DETAILS OF EPS AND BOOK VALUE OF SHARES DETAILS OF DECLARATION OF PREMIUM RECEIVED DURING T HE YEAR. IN RESPONSE THE ASSESSEE HAD FILED ITS DETAILED REPLY VIDE LETTER DATED 20.03.2015 AS MENTIONED BY THE ASSESSING OFFI CER. FURTHER THE ASSESSEE AGAIN WAS REQUIRED THE IDENTIT Y GENUINENESS AND CREDITWORTHINESS OF THE SUBSCRIBERS IN VIEW OF SECTION 68 THE ASSESSEE HAD FILED CONFIRMATION A ND BANK STATEMENT THE GIST OF WHICH HAVE BEEN REPRODUCED IN THE ASSESSMENT ORDER WHICH ARE AS UNDER: 1. NRA IRON & STEEL PVT. LTD. BANK: INDUSLND BANK. G. K NEW DELHI A/C NO. :0012-B49553-060 RS. 2. BHUSHAN FINANCE PVT. LTD. BANK: AXIS BANK LTD NEW DELHI A/C NO.: 910020042325288 DATE DEBIT CREDIT 22.03.2012 40 00 00 000 23.03.2012 30 00 00 000 25 4. UMA SINGAL. BANK: PUNJAB NATIONAL BANK C P NEW DELHI A/C NO. 0133002L60006815 RS. 5. NEERAJ SINGAL HUF. BANK: PUNJAB NATIONAL BANK C. P NEW DELHI A/C NO. 0133002100006891 6. NEERAJ SINGAL BANK: PUNJAB NATIONAL BANK C.P NE W DELHI A/C NO. 0133002100006792 7. KISHORI LAI HUF BANK: PUNJAB NATIONAL BANK C.P NEW DELHI A/C NO. 0133002100006905 RS. DATE DEBIT CREDIT 26.03.2012 68 00 000 RS. DATE DEBIT CREDIT 22.03 2012 30 00 00 000 23.03.2012 3 00 00 000 DATE DEBIT CREDIT 26.03.2012 2 00 00 000 26.03.2012 5 00 000 26.03.2012 2 02 50 000 RS. DATE DEBIT CREDIT 26.03.2012 1 35 00 000 26.03.2012 1 35 00 000 R S . DATE DEBIT CREDIT 26.03.2012 2 25 00 000 26.03.2012 90 00 000 26 26.03.2012 67 50 000 8. BB SINGAL (HUF). BANK: PUNJAB NATIONAL BANK C.P NEW DELHI A/C NO. 0133002100006706 RS. DATE DEBIT CREDIT 26.03.2012 92 00 000 26.03.2012 90 00 000 ON THE PERUSAL OF THE BANK STATEMENT ASSESSING OFFI CER OBSERVED THAT THESE SUBSCRIBER COMPANY AND INDIVIDU AL INVESTMENT DID NOT HAVE THEIR OWN CREDITWORTHINESS AND THEY WERE JUST AN ACCOMMODATION ENTRY. HE FURTHER OBSERVE D THAT ON PERUSAL OF THE FINANCIALS OF THE ASSESSEE COMPAN Y IT CAN BE SEEN THAT IT HAS NOT DONE ANY BUSINESS ACTIVITY AND THE MAJOR PART OF THE TURNOVER DERIVED FROM THE DIVIDEND AND MISCELLANEOUS INCOME. HE HAS ALSO ANALYZED THE BOOK S PROFIT OF THE ASSESSEE COMPANY BEFORE ISSUE OF SHARE ON PR EMIUM AS ON 31.03.2011 WHICH WAS AS UNDER: A. EQUITY 1. SHARE HOLDER'S FUNDS (IN RS.) SHARE CAPITAL 88000000 RESERVES RESERVE AND SURPLUS 172746598 TOTAL 260746598 NO. OF SHARES 10150000 VALUE PER SHARE 25.68 PER SHARE 2. PROFIT /LOSS OF THE COMPANY PROFIT/LOSS A.Y. 2011-12 114440 27 A.Y. 2012-13 (820515) 11. THUS FROM THE ABOVE HE DEDUCED HIS INFERENCE IN THE FOLLOWING MANNER:- THE ASSESSEE COMPANY HAS VERY NOMINAL BUSINESS PROF IT. IT IS ONLY COMMON SENSE THAT PAST PERFORMANCE SHOULD BE GIVEN SUITABLE WEIGHT AGE FOR THE VALUATION OF A COMPANY AND ITS S HARES BUT THE SAME HAS BEEN TOTALLY IGNORED IN THE INSTANT CASE. FURTHERMORE NO CORRESPONDENCE OR ANY DOCUMENTARY EVIDENCE HAS BEEN BROUGHT ON RECORD IN THE ASSESSES COMPANY REPLIES SUBMITTED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS TO JUSTIFY THE SO CALLED BRIGHT FUTURE PROSPECTS OF THE COMPANY WHICH WOULD ENHANCE THE PR OFITABILITY AND CONSEQUENTIALLY LEAD TO HIGHER VALUATION OF THE SHARES. TO TEST THE CREDIBILITY OF THE VALUATION AN EFFORT WAS MADE TO VERIFY THE FUTURE RESULTS OF ASSESSEE COMPANY WITH REFEREN CE TO THE FINANCIAL RESULTS FILED FOR A.Y. 2011-12 AND 2012- 13. THE COMPARATIVE FIGURES ARE AS UNDER: 12. THEREAFTER HE HAS QUOTED THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF MC. DOWELL AND CO. LTD . IN (1985) 154 ITR 148 AND AFTER DETAIL REASONING AND R EFERRING TO CATENA OF JUDGMENTS HE HELD THAT THE CREDITS AGGRE GATING TO RS.73 50 00 000/- IS TO BE TAXED U/S.68 BECAUSE TH E A.Y. INCOME FROM OPERATION INTEREST DIVIDEND & OTHER INCOME TOTAL INCOME NET PROFIT EPS CLAIMED BY THE ASSESSEE 2011-12 393934 2380822 2774756 114440 0.01 2012-13 368137 368137 (820515) (0.05) 28 ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE PARTIES . 13. LD. CIT(A) THOUGH HELD THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE ADDITION U/S.68 COULD NO T BE MADE BUT HELD THAT THESE COMPANIES MUST HAVE CHARG ED 2% AS COMMISSION ON THE TOTAL TRANSACTION AS PROFIT ON SUCH ENTRIES AND IN THIS CASE IT WAS WORKED OUT AT RS.1 47 00 000/-. BEFORE THE LD. CIT (A) THE ASSES SEE HAS FILED THE VERY ELABORATE SUBMISSION CONTAINING ALL THE DE TAILS AND INFORMATION AND ALSO HOW THE MONEY HAS BEEN ROUTED THROUGH FROM THE MAIN COMPANY TO THROUGH WEB OF GROUP COMPA NIES AND ALONG WITH THE CASH FLOW CHART. THE DETAILED RE MAND REPORT OF THE ASSESSING OFFICER HAS BEEN INCORPORAT ED FROM PAGES 21 TO 28 OF THE APPELLATE ORDER. 14. AFTER CONSIDERING THE ENTIRE GAMUT OF FACTS A ND THE MATERIAL ON RECORD LD. CIT(A) OBSERVED AND HELD AS UNDER:- 6.1 I HAVE GONE THROUGH THE SUBMISSIONS BY THE APP ELLANT ASSESSMENT ORDER REPORT OF AO REJOINDER BY APPELL ANT AND PERUSED THE CASE LAWS RELIED UPON. 6.2 THE APPELLANT HAS RAISED TWO GROUNDS OF APPEALS WHICH IS RELATED TO THE ADDITION OF RS.73 50 00 000/- AND IN TERLINKED. THEREFORE BOTH THE ISSUES ARE TAKEN TOGETHER. 7. IT IS SEEN FROM THE ASSESSMENT ORDER THAT APPELL ANT HAS NOT PROVIDED PROPER CONFIRMATION AT THE FIRST INSTANCE HOWEVER NOTICES ISSUED U/S 133(6) OF THE ACT TO THE INVESTO RS HAS BEEN REPLIED WITH. THERE IS NO FINANCIAL CAPACITY OF VAR IOUS INVESTORS 29 TO SUBSCRIBE SHARE CAPITAL WITH HIGH PREMIUM IN THE APPELLANT COMPANY. THE APPELLANT EXPRESSED THEIR INABILITY TO PRODUCE THE DIRECTORS OF THE INVESTOR COMPANIES OR THE INDI VIDUALS. IT IS ALSO SEEN BY THE AO THAT THE AMOUNT HAS BEEN RECEIV ED BY THE INVESTORS JUST BEFORE SUBSCRIBING THE SHARES IN TH E APPELLANT COMPANY. THE SUBSCRIBERS DID NOT HAVE THEIR OWN CREDITWORTHINESS AS IN MOST OF THE CASES THE AMOUNT HAS BEEN RECEIVED ON TRANSFER AND THERE IS HARDLY ANY BUSINE SS ACTIVITY BY THOSE INVESTORS. 7.1 IT IS OBSERVED BY THE AO THAT THE APPELLANT CO MPANY IS SHOWING VERY NOMINAL INCOME HAVING LIMITED RESOU RCES AND RESERVES THEREFORE SUCH HIGH PREMIUM IS NOT JUSTI FIED. THE ORIGIN OF FUNDS TO THE SUBSCRIBERS/INVESTORS IS NOT CLEAR AND THERE IS NO ECONOMICAL/LOGICAL EXPLANATION FOR THE TRANSACTIONS. ACCORDINGLY THE AO HELD THAT IT IS UNEXPLAINED BEI NG A SHAM TRANSACTION IN THE GUISE OF CAPITAL INTRODUCTION W ITHOUT THE TAX PAYMENTS. ACCORDINGLY AFTER RELYING UPON VARIOUS C ASE LAWS THIS ADDITION WAS MADE INVOKING PROVISIONS OF SECT ION 68 OF THE ACT. 7.2 IT IS CONTENDED BY THE APPELLANT THAT IT HAS P ROVIDED ALL THE DOCUMENTS OF THE INVESTORS SUCH AS AUDITED ACCOUNT COPY OF ITR CONFIRMATION BANK ACCOUNT AND OTHER D ETAILS TO SUBSTANTIATE THAT THESE TRANSACTIONS ARE GENUINE AN D PAYMENTS HAVE BEEN RECEIVED THROUGH BANKING CHANNEL S. IT IS ALSO CONTENDED AS REPRODUCED ABOVE THAT DESIRED I NFORMATION HAS BEEN DULY PROVIDED IN COMPLIANCE TO NOTICE U/S 133(6) OF THE ACT ALL THE INVESTORS ARE ASSESSED TO TAX AND ASSESSMENT ORDER U/S 143(3) OF THE ACT HAS BEEN PROVIDED IN FE W CASES. IT 30 IS ALSO STATED THAT FOR THE YEAR UNDER CONSIDERATION THERE WAS NO STATUTORY REQUIREMENT TO EVIDENCE AND JUSTIFY TH E SOURCE OF SOURCE OF THE FUNDS INVESTED. THE APPELLANT ALSO RE LIED UPON VARIOUS JUDGMENTS AS QUOTED IN ITS SUBMISSION REP RODUCED ABOVE TO JUSTIFY THAT THESE TRANSACTIONS ARE GENUI NE AND ADDITION U/S 68 IS NOT CALLED FOR AS ONUS CAST UPON THE APPELLANT COMPANY HAS BEEN DULY DISCHARGED. IT IS A LSO ARGUED THAT THE ISSUE OF SHARE PREMIUM IS A MATTER TO BE DECIDED UPON BY THE VARIOUS INVESTORS AND THE COMPA NIES CONCERNED AND NOT WITHIN THE POWERS OF AO TO STEP I NTO THE SHOES OF BUSINESS ENTITIES. IT IS ALSO STATED THAT REASONS FOR MAKING IMPUGNED ADDITIONS ARE GENERIC IN NATURE AND BASED ON THE INTERPRETATION BY AO WITHOUT CLINCHING EVIDE NCE. 7.3 ON GOING THROUGH THE SUBMISSIONS OF THE APPELL ANT IT IS OBSERVED THAT ALL THE TEN INVESTORS ARE SUBMITTI NG THEIR RETURN OF INCOME THE TRANSACTIONS HAS BEEN DONE TH ROUGH THE BANKING CHANNELS. 7.4 THE APPELLANT HAS CITED A NUMBER OF DECISIONS OF THE JURISDICTIONAL HIGH COURT AND OTHER JURISDICTIONS WHEREIN THE HON'BLE COURT HAS DISAPPROVED THE ATTEMPT OF THE AO TO LOOK INTO THE SOURCE OF THE SOURCE OF THE DEPOSITS WHIC H WAS NOT THE MANDATE OF THE LAW IN THE YEAR UNDER APPEAL. TH E AMENDMENT OF SECTION 68 W.E.F. 01.04.2013 CANNOT BE HELD OR INTERPRETED TO BE RETROSPECTIVE IN NATURE. THE APP ELLANT HAS ALSO RELIED ON DECISIONS OF THE HON'BLE HIGH COURT OF DELHI WHEREIN IT HAS BEEN HELD THAT SHARE CAPITAL CANNOT BE ASSESSED IN THE HANDS OF THE COMPANY EVEN IF THE SU BSCRIBERS TO THE INCREASED SHARE CAPITAL WERE HELD TO BE NOT GENUINE. 31 SUCH ADDITION COULD ONLY BE MADE IN THE HANDS OF TH E ALLEGED BOGUS SHARE HOLDER. THE ORDER OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. LOVELY EXPORTS PVT. LTD. 299 ITR 268 HAS BEEN UPHELD BY THE APEX COURT. IN THE CASE OF CIT V S. KAMDHENU STEEL AND ALLOYS LTD. 206 TAXMAN 254 THE HON'BLE DELHI HIGH COURT HAS HELD THAT THE ASSESSEE CANNOT BE FASTENED WITH THE LIABILITY U/S 68 UNLESS A CAUSAL CONNECTION BETWEEN THE CASH DEPOSIT IN THE BANK AND THE ASSESS EE IS ESTABLISHED. THE HON'BLE DELHI HIGH COURT IN THE CA SE OF CLT VS. NOVA PROMOTORS AND FINLEASE (P) LTD. HAS HELD T HAT THE AO IS DUTY BOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICATIONS ARE FURNISHED TO THE AO AND THE AO HAS NOT CONDUCTED ANY ENQUIRY INT O THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW T HAT THOSE PARTICULARS ARE FALSE THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY U/S 68. 7.5 HOWEVER IT IS OBSERVED IN THIS CASE THAT THE APPELLANT COULD NOT JUSTIFY THE IMMEDIATE PAYMENT TOWARDS INV ESTMENT IN SHARES FOR THE FUNDS RECEIVED FROM INVESTORS AND SIMILARLY THE AMOUNT HAS BEEN INVESTED BY APPELLANT COMPANY I N VARIOUS INVESTMENTS MADE IN SHARES IMMEDIATELY AFTE R RECEIVING THE SHARE CAPITAL. THE APPELLANT COULD NO T PRODUCE THE DIRECTORS OF FEW INVESTOR COMPANIES WHO HAVE H EAVILY INVESTED IN THE APPELLANT COMPANY FOR NO COGENT REA SON. IT IS ALSO OBSERVED FROM THE ASSESSMENT ORDER OF ALL SUCH PERSONS THAT THEY ARE NOT CARRYING OUT ANY WORTHWHILE ACTIV ITIES NOR HAVE ACTUAL WORTH TO INVEST IN THE APPELLANT COMPAN Y AT SUCH 32 HIGH PREMIUM. THE SOURCE AND DESTINATION COMPANIES ARE HAVING COMMON ADDRESS. IN THE REPORT OF AO IT IS A LSO MENTIONED THAT APPELLANT COMPANY IS NOT HAVING WORT H FOR WHICH SUCH HEAVY PREMIUM IN SHARES CAN BE INVESTED AND JUSTIFIED. FURTHER THE APPELLANT COMPANY IS NOT SH OWING ANY WORTHWHILE INCOME SINCE PAST AND IT HAS LIMITED RES ERVES AND SURPLUS. 7.6 IT IS ALSO STATED IN THE REPORT OF AO THAT THE INVESTMENT MADE BY VARIOUS INVESTORS IN THE APPELLANT COMPANY HAS RECEIVED FUNDS FROM THE COMPANIES AND PERSONS RELAT ED TO BHUSHAN STEEL LTD WHICH WAS FURTHER ROUTED THROUGH THE APPELLANT COMPANY AND FURTHER INVESTED IN EIGHT COM PANIES AS SHARE APPLICATION. IN ITS REPLY THE APPELLANT HAS NOT GIVEN ANY SATISFACTORY REPLY TO THIS FUND FLOW AND ALSO THE P AYMENTS MADE BY INVESTORS IMMEDIATELY AFTER RECEIVING THE FUNDS FROM ABOVE COMPANIES. 7.7 FURTHER THE ADDRESS OF THE INVESTORS AND THE INVESTMENT MADE BY APPELLANT COMPANY ARE SAME. 7.8 ALL THESE FEATURES AS DISCUSSED IN THE FOREGOI NG PARAGRAPHS 7.5 TO 7.7 INDICATES THAT THOUGH THE DOCUMENTATIONS ARE COMPLETE WITH RESPECT TO THE INV ESTORS AND THE APPELLANT/COMPANY PAYMENTS RECEIVED AND MADE T HROUGH BANKING CHANNELS AND OTHER FORMALITIES ARE COMPLETE HOWEVER INABILITY TO PRODUCE DIRECTORS IN THE CASE OF INVESTOR COMPANY INVESTMENT AT SUCH HIGH PREMIUM WITHOUT JUSTIFICATION AND HAVING NO NET WORTH OR RESERVES A ND SURPLUS AND IMMEDIATE INVESTMENT IN APPELLANT COMPANY AFTER RECEIVING THE FUNDS WHICH WAS FURTHER INVESTED BY THE 33 APPELLANT COMPANY TO OTHER COMPANIES FOR SUCH AMOUN T RECEIVED SAME ADDRESS ETC. SHOWS THAT THE APPELLAN T COMPANY AND ITS INVESTORS ESPECIALLY COMPANIES ARE NOTHING BUT A CREATION OF PAPER COMPANIES TO TRANSFER ITS F UNDS FROM BHUSHAN STEEL LTD. AND OTHER INDIVIDUALS RELATED TO THEM TO VARIOUS COMPANIES AS SHOWN IN FLOW CHART THROUGH T HE APPELLANT COMPANY. 7.8 AS STATED EARLIER THERE IS NO WORTH/RESERVE O F THE APPELLANT COMPANY NOR ANY BUSINESS CARRIED OUT THE INVESTOR COMPANIES AND OTHER PERSONS ARE ALSO HOT CARRYING O UT ANY VISIBLE BUSINESS ACTIVITY THEREFORE THIS IS NOTHI NG BUT ROUTING OF ITS FUNDS BY THE BHUSHAN STEEL LTD. AND ITS RELA TED PARTIES WHERE NEITHER THE INVESTORS AND OTHER PERSONS NOR T HE APPELLANT COMPANY ARE ULTIMATE BENEFICIARY. THE FUN DS RECEIVED WERE GIVEN TO THE OTHER COMPANIES AS SOON AS IT IS RECEIVED AND THE ASSETS IN THE BALANCE SHEET IS SHO WN IN THE FORM OF INVESTMENT IN SHARES FOR THE SHARE APPLICAT ION MONEY AND PREMIUM THEREON RECEIVED. THE APPELLANT HAS ALS O NOT GIVEN ANY COGENT REASONING FOR THE FUND FLOW SHOWN BY THE AO IN HIS REPORT. 7.9 THEREFORE LOOKING TO THE FACTS AND CIRCUMSTAN CES OF THIS CASE WHERE BASIC REQUIREMENT TO JUSTIFY THE ID ENTITY CREDITWORTHINESS AND GENUINENESS OF TRANSACTION HAS BEEN PRIMA FACIE ESTABLISHED BUT LOOKING TO THE FACT AND ANALYSIS AS NARRATED ABOVE THESE TRANSACTIONS ARE FOUND TO BE FOR ROUTING FINANCES OF M/S BHUSHAN STEEL LTD. AND OTHER PERSON S THROUGH APPELLANT COMPANY AND IT IS JUST PAPER COMP ANY WHERE APPELLANT IS NOT THE ULTIMATE BENEFICIARY BEC AUSE IT HAS 34 FURTHER PASSED ON THOSE FUNDS TO VARIOUS COMPANIES AS SHOWN IN THE FLOW CHART. 7.10 IN VIEW OF ABOVE IT IS TO BE STATED THAT AS P ER THE PRACTICE AND ALSO SEEN IN VARIOUS CASES THE SAID P ERSON (IN THIS CASE APPELLANT) CHARGES THE AMOUNT TO PROVIDE SUCH ENTRIES WHICH IS GENERALLY 2% OF THE TOTAL TRANSACT IONS. THEREFORE CONSIDERING THAT THE APPELLANT HAS BEEN PROVIDING THE FACILITY TO ROUTE THESE FINANCIAL TRANSACTIONS THE 2% OF THE TOTAL AMOUNT IS TREATED AS UNDISCLOSED INCOME OF TH E APPELLANT NOT SHOWN IN ITS RETURN OF INCOME. THIS COMES TO RS. 1 47 00 000/-. 7.11 SINCE THE DETAILS HAVE BEEN DULY PROVIDED WIT H RESPECT TO THE REFERRED COMPANIES AND THE ADDITIONS ARE OUT OF THE AMBIT OF PROVISIONS OF SECTION 68 OF THE ACT DU E TO THE REASON THAT THESE INVESTORS COMPANIES ARE HELD TO B E JUST A PAPER COMPANY OR CONDUIT IN THE CASE OF OTHER INVES TORS FOR PROVIDING ENTRIES AND ROUTING THE FINANCES THEREFORE THE ADDITION TO TH E EXTENT OF RS. 1 47 00 000/- IS SUSTAINED FOR CHARGES RECEIVED IN PROVIDING SUCH ENTRIES NOT DISCLOSED BY THE APPELLANT. FOR T HE BALANCE AMOUNT THE APPELLANT GETS A RELIEF. 15. BY AND LARGE SIMILAR NATURE OF FINDING HAS BE EN GIVEN BY THE ASSESSING OFFICER IN ALL THE APPEALS BEFORE US. IN TABULAR FORM THE SUMMARY OF THE FINDING AND OBSERVATION OF THE ASSESSING OFFICER AND THE FINDING OF THE LD. CIT (A S) IN ALL THE APPEALS ARE AS UNDER:- 35 1. ANGEL CEMENT PVT LTD. -REVENUES APPEAL 2012-13 SECTION 68: SHARE CAPITAL (SC) SHARE PREMIUM RS. 66 CRORES OTHER PAYABLES (CURRENT LIABILITY) - RS. 54.70 CRORES TOTAL: RS. 120.7 CRORES THE ASSESSEE NEVER CAME FORWARD TO PROVE IDENTITY CREDITWORTHINESS & GENUINENESS (ICG) OF THE TRANSACTIONS. THE SUMMONS ADDRESSED TO CONTRIBUTORS REMAINED UNCOMPILED WITH. NOTICE 133(6) RETURNED BACK UN-SERVED FROM ALL THE PARTIES (PAGE 4 PARA 3.2) SUMMONS RETURNED BACK UN-SERVED FROM THREE PARTIES NAMELY CANTABILE (LEFT) SINTEX (NO SUCH FIRM) SUPREME (NO SUCH FIRM) (PAGE 4 PARA 3.2) THE ASSESSEE ADOPTED A PREVARICATE AND NON-CO- OPERATION ATTITUDE (PAGE 6 PARA 3.5) THE CONFIRMATIONS SUBMITTED BY THE ASSESSEE ARE NOT EVEN SELF-SERVING TO PROVE ICG OF THE TRANSACTIONS. ICG OF THE TRANSACTION IS NOT ESTABLISHED . (PAGE 6 PARA 3.5) SIMPLY FURNISHING PAN OR ASSESSMENT PARTICULARS/ ADDRESS IS NOT ENOUGH AS THEY DO NOT FACILITATE CROSS VERIFICATION. (PAGE 7 PARA 3.6 AOS ORDER) GENUINENESS AND CREDITWORTHINESS OF THESE PARTIES REMAIN UNVERIFIED . THE ASSESSEE FAILED TO DISCHARGE ITS ONUS COMPLETELY. (PAGE 7 PARA 3.7 AOS ORDER) NO SUFFICIENT BALANCE IN BANK ACCOUNTS CHEQUE ISSUED TO ASSESSEE CLEARED BY WAY OF RECEIPT OF TRANSFER ENTRY FROM ANOTHER ASSOCIATED CONCERN NATURE OF TRANSACTION REVEAL THEY ARE NOT REAL BUSINESS TRANSACTIONS SIMILAR TO TRADE OF AN ENTRY OPERATOR. THUS AMOUNT RECEIVED CAN BE TERMED AS BOGUS ACCOMMODATION ENTRY RECEIVED BY ASSESSEE (PAGE 7 PARA 3.7 AOS ORDER). APPELLANT COMPANIES ARE HAVING ADEQUATE RESERVES TO MAKE INVESTMENT . THE ASSESSEE HAS DISCHARGED ITS BURDEN CAST UPON IT TO PROVE IDENTITY CREDITWORTHINESS & GENUINENESS (ICG) OF THE TRANSACTIONS(PAGE 37 CIT(A) ORDER). INVESTOR COMPANIES HAVE SUBMITTED DOCUMENTS TO PROVE THE ICG OF THE TRANSACTIONS . (PAGE 31 37 CIT(A)S ORDER). THE SOURCE OF FUNDS INVESTED IN SHARE CAPITAL AND SHARE PREMIUM BY EACH INVESTOR STANDS EXPLAINED (PAGE 37 CIT(A) ORDER) THE SOURCE OF FUNDS BY THE INVESTOR COMPANIES IN THE APPELLANT IN ITS SHARE CAPITAL STANDS EXPLAINED. (PAGE 37 CIT(A) ORDER). ALL THE INVESTOR COMPANIES ARE ASSESSED TO TAX IN THEIR JURISDICTION EITHER IN DELHI OR IN MUMBAI. THE COPIES OF ASSESSMENT HAVE BEEN SUBMITTED(PAGE 37 CIT(A) ORDER). THE APPELLANT COMPANY HAS FILED COPIES OF BANK STATEMENT PROFIT & LOSS ACCOUNT BALANCE SHEETS TO ESTABLISH SOURCE OF FUNDS IN HANDS OF INVESTOR COMPANIES(PAGE 37 CIT(A) ORDER). THE AO CONTENTION IN MAKING THE ADDITION ON GROUND THAT THE NOTICE U/S 133(6) AND SUMMONS U/S 131 COULD NOT BE SERVED IS NOT ACCEPTABLE AS THE INVESTOR COMPANIES HAVE BEEN ASSESSED TO TAX U/S 143 OF THE ACT THEREFORE ALL THE DETAILS MUST HAVE BEEN FILED BEFORE THEIR RESPECTIVE AO'S. THEREFORE IT CAN BE SAID THAT THESE COMPANIES ARE VERY MUCH 36 LIST OF CASE LAWS RELIED UPON BY THE A.O CIT V NR PORTFOLIO PVT LTD. CIT V NOVA PROMOTERS AND FINLEASE PVT LTD. KALE KHAN MOHD. HANIF V CIT. CIT V LACHHMAN DAS OSWAL NANAK CHANDRA LAXMAN DASS V CIT (1982) 140 ITR 151 (ALL.) R DALMIA V CIT (1976) 113 ITR 522 (DEL.) CIT V DEBI PRASAD VISHWANATH PRASAD (1968) 72 ITR 194 (SC) CIT V HERO CYCLES PVT LTD. CIT V STEPWELL INDUSTRIES LTD AND OTHERS. SUMATIDAYAL V CIT (1995) 214 ITR 801 (SC) CGT V DR. GEORGE KURUVILLA (1969) 74 ITR 328 (SC) CIT V JOSEPH JOHN (1967) 67 ITR 74 (SC) RB SETH CHAMPA LAL SWARUP V CIT (1965) 60 ITR 493 (SC) CIT V R VENKATASWAMY NAIDU (1956) 29 ITR 529 (SC) SREELEKHA BANERJEE V CIT (1963) 49 ITR 112 (SC) ANRAJNARAINDASS V CIT (1951) 20 ITR 562 (PUNJ.) A.D. JAYAVEERAPANDIA NADAR V CIT (1964) 54 ITR 401 (MAD.) SHANKAR INDUSTRIES V CIT (1978) 114 ITR 689 (CAL.) ORIENTAL WIRE INDUSTRIES P LTD. V CIT (1981) 131 ITR 688 (CAL.) SIKRI & CO. PVT LTD V CIT (1977) 106 ITR 682 (CAL.) VELJIDEORAJ& CO. V CIT (1968) 68 ITR 708 (BOM.) KM SANDHU & SONS PVT LTD V CIT (1999) 239 ITR 77 (CAL.) CIT V KERALA ROADLINES CORPORATION ROSHAN DI HATTI V CIT PRESENT AT THE GIVEN ADDRESS AND HAS GOT ALL NECESSARY ESTABLISHMENTS (PAGE 37/38 CIT(A) ORDER). THE AO DID NOT BRING ANY ADVERSE MATERIAL TO REJECT THE EXPLANATIONS AND EVIDENCES SUBMITTED BY THE APPELLANT EXCEPT NON- COMPLIANCE OF 131 AND 133(6) (PAGE 38 CIT(A) ORDER). NEITHER ANY PERSON HAS GIVEN ANY STATEMENT NOR HAS MADE ANY ALLEGATION AGAINST THESE COMPANIES (PAGE 38 CIT(A) ORDER) THE REASONS GIVEN BY AO ARE VERY GENERIC IN NATURE AND NOT BACKED BY ANY CONCRETE EVIDENCE (PAGE 38 CIT(A) ORDER). THERE WAS NO CASH DEPOSIT IN THE BANK ACCOUNTS OF THE PARTIES FROM SHARE CAPITAL RECEIVED( PAGE 38 CIT(A) ORDER). LIST OF CASE LAWS RELIED UPON BY CIT(A) MOD CREATIOSN PVT LTD V INCOME TAX OFFICER (2013) 354 ITR 282 (DELHI) CIT V KAMDHENU STEEL AND ALLOYS LTD AND OTHERS 206 TAXMANN 254 DELHI CIT V GANGESHWARI METALS PVT LTD (2013) 30 TAXMANN.COM 328 CIT V OASIS HOSPITALITIES (2011) 333 ITR 119 (DELHI) ITO V NEELKANTH FINBUILD ITA NO. 2821/DEL/2009 DATED 01/04/2015 ITO V NC CABLES LTD 4122/DEL/2009 ITO V RAKAM MONEY MATTERS P. LTD 2821/DEL/2011 ACIT V KISKO CASTINGS PVT LTD CIT V FAIR FINVEST LTD CIT V EXPO GLOBE INDIA LTD. 37 2. DELIGHT RESORTS PVT. LTD. -REVENUES APPEAL 2012-13 (I) SECTION 68: SHARE CAPITAL (SC) 10 CRORES ADVANCE RECEIVED 66.56 CRORE (II) ADHOC DISALLOWA NCE (50% OF EMPLOYEE BENEFIT AND OTHER EXPENSES) RS. 5.22 LACS THAT THE ADDRESS MENTIONED BY ASSESSEE IN LETTER DATED SEPTEMBER 5 2014 AS F-1- 200/13 SEC-13A VAISHALI GHAZIABAD UTTAR PRADESH 201010 NOTICES SENT AT THIS ADDRESS U/S 142(1) 143(2) AND AGAIN 142(1) IN THE MONTH OF NOVEMBER 2014 RECEIVED BACK UN-SERVED WITH POSTAL REMARKS UNCLAIMED UNCLAIMED AND NO SUCH PERSON RESPECTIVELY (PAGE 2 AOS ORDER) NO EXPLANATION SUBMITTED WITH REGARD TO FOLLOWING: BUSINESS DEALING WITH THE PARTIES INVOLVED WHY INTEREST NOT PAID ON HUGE LOANS(PAGE 4 AOS ORDER) TRANSACTIONS OF HEAVY LOANS RECEIVED WITHOUT PAYING ANY INTEREST FAILS THE TEST OF HUMAN PROBABILITY (PAGE 4 AOS ORDER). MERE PROOF OF IDENTITY OF A CREDITOR OR THAT TRANSACTION WAS BY CHEQUE IS NOT SUFFICIENT TO DISCHARGE ONUS LYING ON ASSESSEE TO PROVE GENUINENESS OF TRANSACTION (PAGE 4 AOS ORDER ). NO INTEREST IS EVEN PAID TO PARTIES WHO ADVANCED HEFTY LOANS OF ABOUT RS. 30 CRORES NAMELY PARAS PLACEMENT AND CANTABILE MINERALS (PAGE 4 AOS ORDER). THE FACTS OF THE CASE INDICATE THAT WHAT IS APPARENT IS NOT REAL (PAGE 4 AOS ORDER). SUBSTANCE OF TRANSACTION NEED BE ASSESSED BY APPLYING TAXING STATUTE TO DETERMINE GENUINENESS OF A TRANSACTION (PAGE 4 AOS ORDER). TRANSACTIONS OF ADVANCES REGARDING ADDITION ON ACCOUNT SHARE CAPITAL RECEIVED: REPLIES FILED BY APPELLANT STANDS CORROBORATED BY REPLIES IN RESPONSE TO NOTICE U/S 133(6) OF THE ACT (PAGE 24 PARA 3.1 CIT(A)S ORDER). THAT IMPERATIVE BUILDWELL IS AN INVESTMENT COMPANY AND R&S AS ON MARCH 31 2011 ARE OF RS. 19.95 CRORES (PAGE 24 PARA 3.1 CIT(A)S ORDER). ANALYSIS OF SC AND R&S HAS ALSO BEEN DONE BY CIT(A) THOUGH CIT(A) HAS NOT MADE ANY COMMENT ON IT BUT THEY ARE REASONABLE ENOUGH TO MAKE INVESTMENT (PAGE 24 PARA 3.1 CIT(A)S ORDER) THAT THE ASSESSMENT OF BOTH THE COMPANIES HAS BEEN DONE U/S 143(3) OF THE ACT (PAGE 25 PARA 3.1 CIT(A)S ORDER) EXAMINATION OF ORDER SHEET AND ASSESSMENT ORDER REVEALS THAT AO PERSE HAS NOT GIVEN ANY DIRECTION TO ASSESSEE TO PRODUCE THE DIRECTORS OF SUCH COMPANY (PAGE 25 PARA 3.1 CIT(A)S ORDER ). DOCUMENTS WERE FILED BY APPELLANT BUT AO DID NOT DO ANY FURTHER VERIFICATION OR INVESTIGATION TO DENY THE EVIDENCES AND 38 HAVE BEEN UNDERTAKEN WITH A PURPOSE TO DEFRAUD THE REVENUE AND IS A COLORFUL DEVICE (PAGE 4 AOS ORDER). THE ASSESSEE FAILED TO BRING ON RECORD THAT WHY THE AXIS BANK ACCOUNT IS BEING MAINTAINED AT ANGUL ORRISA DETAIL OF THE PERSON WHO MAINTAINS THE ACCOUNT AT SUCH LOCATION (PAGE 4 AOS ORDER) BANK ACCOUNT OPENED ON MARCH 22 2012 MAJOR ADVANCES RECEIVED IN BANK ACCOUNT MAINTAINED AT ORRISA ONLY (PAGE 4 AOS ORDER). ALL THE BANK ACCOUNTS FROM WHERE MONEY TRANSFERRED ARE APPARENTLY LOCATED AT ANGUL ORRISA (PAGE 5 AOS ORDER). ALL BANK ACCOUNTS ARE JOINT BANK ACCOUNTS INCLUDING ASSESSEES BANK ACCOUNT (PAGE 5 AOS ORDER) ICG OF THE TRANSACTION AND THE INVESTOR ARE DEEPER AND OBSTRUCTIVE THAN MERE COMPLETION OF PAPER WORK OR DOCUMENTATION (PAGE 8 AOS ORDER). ASSESSEE IS A PRIVATE LIMITED COMPANY NEITHER CAME OUT WITH ANY PUBLIC ISSUE NOR ISSUED ANY ADVERTISEMENT STILL FAILED TO PRODUCE THE PERSONS WHO INVESTED TOWARDS SHARE CAPITAL SHOWS THAT THE TRANSACTIONS ARE MERELY ACCOMMODATION ENTRY (PAGE 8/9 AOS ORDER) IN A PRIVATE LIMITED COMPANY IT IS GENERALLY NOT DIFFICULT ON PART OF ASSESSEE TO PRODUCE PERSONS WHO HAVE INVESTED SUBSTANTIALLY TOWARD SHARE CAPITAL (PAGE 9 AOS ORDER). SEQUENCE OF EVENTS LIKE FAILURE ON ASSESSEES PART TO BRING DIRECTORS OF SUBSCRIBER COMPANIES FAILURE TO FILE FUTURE PROJECT REPORTS HUGE INVESTMENTS MADE INTO ASSESSEE COMPANY IN THE SECOND YEAR OF OPERATION INDICATES THAT WHAT IS APPARENT IS NOT REAL AND ONLY A COLORABLE DEVICE TO CONVERT UNACCOUNTED MONEY WITHOUT PAYING ANY EXPLANATIONSOF THE APPELLANT (PAGE 25 PARA 3.1 CIT(A)S ORDER). THAT PACE IRON IS AN INVESTMENT COMPANY AND HAVING SC OF RS 2.41 CRORES AND ADVANCES OF RS. 32.7 CRORES AS ON MARCH 31 2011 (PAGE 24 PARA 3.1 CIT(A)S ORDER). THERE ARE NO CASH DEPOSITS IN THE BANK ACCOUNTS OF IN CASE OF BOTH THE INVESTORS (PAGE 24 PARA 3.1 CIT(A)S ORDER). GROUP COMPANIES HAVE FILED VARIOUS DETAILS IN SUPPORT OF SUBSCRIPTION MADE REPLIES U/S 133(6) FILED BY PARTIES AO HAVING NO CREDIBLE INFORMATION TO DENY EXPLANATIONS OF APPELLANT WITH EITHER GENUINENESS OR CREDITWORTHINESS (PAGE 30 PARA 3.3 CIT(A)S ORDER). THEREFORE IT IS HELD THAT APPELLANT HAS FILED NECESSARY DETAILS REGARDING IDENTITY AND CREDITWORTHINESS (PAGE 30 PARA 3.3 CIT(A)S ORDER) REGARDING ADDITION RELATED TO ADVANCES RECIVED DURING THE YEAR : THAT THE AMOUNT RECEIVED AS ADVANCE HAVE BEEN ADJUSTED AGAINST SALE OF SHARES IN CASE OF FOUR COMPANIES AND BALANCE REFUNDED AND WHOLLY REFUNDED IN CASE OF ONE COMPANY (PAGE 31 TABLE PARA 4.1 CIT(A)S ORDER). APPELLANT FILED RELEVANT DOCUMENTS FROM THE CREDITORS (PAGE 31 TABLE PARA 4.1 39 TAXES (PAGE 9 AOS ORDER). THERE IS NO PRESUMPTION THAT A CASH CREDIT IS GENUINE MERELY BECAUSE A PAYMENT WAS MADE BY CHEQUE. ASSESSING AUTHORITY SHALL ACCEPT CASH CREDIT ONLY IF THE TRANSACTION IS TRUE AND GENUINE (PAGE 10 AOS ORDER). IF THE LIABILITY SHOWN IN THE ACCOUNT IS FOUND TO BE BOGUS AND THERE IS NO PLAUSIBLE AND REASONABLE EXPLANATION BY THE ASSESSEE THE AMOUNT CAN CERTAINLY BE ADDED TO INCOME OF THE ASSESSEE (PAGE 10 AOS ORDER) REGARDING EXPENSES CLAIMED AND DISALLOWED NO EVIDENCE FURNISHED IN SUPPORT OF EXPENSES CLAIMED AS EMPLOYEE BENEFIT AND OTHER EXPENSES AMOUNTING TO RS 3.79 LAKHS AND RS. 6.22 LAKHS BEING UNVERIFIABLE EXPENSES (PAGE 11 AOS ORDER) CASE LAWS RELIED UPON BY A.O: CIT-II V MAF ACADEMY PVT LTD (2014) 42 TAXMANN.COM 377 (DELHI) NOVA PROMOTERS &FINLEASE DELHI HIGH COURT N. R. PORTFOLIO (P) LTD [2014] 42 TAXMANN.COM 339 (DELHI HC) V.I.S.P. (P) LTD. V COMMISSIONER OF INCOME- TAX 265 ITR 202 (MP HC) CIT(A)S ORDER) CREDITORS DOING REGULAR BUSINESS AND ADVANCE ADJUSTED AGAINST SALE OF SHARES (PAGE 31 TABLE PARA 4.1 CIT(A)S ORDER). ASSESSMENT IN CASE OF THE MOST OF THE CREDITOR HAVE BEEN COMPLETED U/S 143(3) OF THE ACT (PAGE 32 TABLE PARA 4.1 CIT(A)S ORDER). THAT AO DID NOT CONDUCT ANY FURTHER INQUIRY TO SUGGEST THAT CREDITORS DO NOT HAVE CREDITWORTHINESS OR TRANSACTIONS ARE NOT GENUINE (PAGE 32 TABLE PARA 4.1 CIT(A)S ORDER). RATIOS OF JUDICIAL PRECEDENTS DISCUSSED IN PREVIOUS GROUND (SHARE CAPITAL) ARE EQUALLY APPLICABLE TO THIS GROUND OF APPEAL. THEREFORE ADDITION DELETED. (PAGE 32 TABLE PARA 4.1 CIT(A)S ORDER) RELATED TO ADDITION ON EMPLOYEES BENEFIT EXPENSES AND OTHER EXPENSES: THE DETAILS PRODUCED DURING APPELLATE PROCEEDINGS SHOWS THAT EXPENDITURE IS INCURRED FOR THE BUSINESS OF THE COMPANY AND BEAR A CLOSE AND INTIMATE NEXUS WITH THE BUSINESS OF THE COMPANY (PAGE 33 TABLE PARA 5 CIT(A)S ORDER). MAJOR PORTION OF EXPENDITURE INCURRED FOR COMPLYING WITH STATUTORY FORMALITIES AND COMPLIANCES NECESSARY FOR OPERATION OF COMPANY. THEREFORE AO IS DIRECTED TO DELETED THE DISALLOWANCE (PAGE 33 TABLE PARA 5 CIT(A)S ORDER) CASE LAWS RELIED UPON BY CIT(A) CIT V LOVELY EXPORTS 317 40 ITR 218 (SC) CIT V FAIR FINVEST LTD CIT V KAMDHENU STEEL AND ALLOYS LTD 361 ITR 220 (DEL. HC) CIT V VRINDAVAN FARMS (P) LTD ITA NO. 71/2015 (DEL. HC) CIT V RAKAM MONEY MATTERS ITA NO. 778/ 2015 (DEL. HC) CIT V GAGANDEEP INFRASTRUSCTRE PVT LTD (BOMBAY HC) 3. DELIGHT RESORTS PVT LTD REVENUES APPEAL 2014-15 SECTION 68 ADVANCE RECEIVED DURING THE YEAR RS 37.70 CRORES THE ASSESSEE COMPANY FAILED TO FILE THE REQUISITE DETAILS (PAGE 5 PARA (6A) AOS ORDER). THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS TO PROVE THAT THE SAID TRANSACTION WAS LEGITIMATE (PAGE 5 PARA (6A) AOS ORDER). CLOSELY HELD COMPANIES USUALLY RECEIVE SHARE CAPITAL FROM FRIENDS RELATIVES AND NOT FROM UNKNOWN THIRD PARTIES. IN THE PRESENT CASE THERE IS NO CONNECTION OR RELATIONSHIP BETWEEN THE ALLEGED SUBSCRIBERS AND THE ASSESSEE FOR ADVANCE PROVIDERS TO BECOME INVESTORS (PAGE 6 PARA 6(B) AOS ORDER). IT IS NECESSARY TO HAVE SOME DETAIL IF NOT COMPLETE TO ESTABLISH IDENTITY AND AVAILABILITY OF FUNDS AND HOW THESE UNCONNECTED PARTIES DECIDED TO BECOME INVESTOR IN ABSENCE OF ANY BUSINESS OBLIGATION(PAGE 6 PARA 6(B) AOS ORDER) NO INTEREST WAS PAID THE PURPOSE OF ADVANCE IS MISSING HUGE FUND TRANSACTION WHICH CLEARLY MEANS DUMMY TRANSACTIONS(PAGE 6 PARA 6(B) AOS ORDER). BOTH THE COMPANIES HAVE MEAGER INCOME (PAGE 6 THE ICG OF TRANSACTIONS HAVE BEEN ESTABLISHED FROM THE FACT THAT BOTH COMPANIES ARE HAVING THE CLOSING BALANCE OF THE R&S OF RS.261 CRORE (JANITOR) AND RS.65 CRORE (BHISHAM) AS ON 31.03.2013. (PAGE 19 PARA 3.4 CIT(A)S ORDER) SHRI DINESH KUMAR AGGARWAL DIRECTOR M/S JANITOR INFRA ATTENDED THE PROCEEDINGS BEFORE CIT(A) DATED JUNE 29 2017 AND FURNISHED THE NEW ADDRESS EXPLAINED THE ADJUSTMENT OF ADVANCE TOWARDS PURCHASE OF SHARES FILED COPY OF ACCOUNTS ORDER U/S 143(3) AND ALSO EXPLAINED THE OPENING BALANCE OF RESERVES AND SURPLUS BEING RS 261 CRORES ( PAGE 18 PARA 3.2) SHRI RAKESH MEHTA DIRECTOR BHISHAM ENERGY ATTENDED THE PROCEEDINGS BEFORE CIT(A) FURNISHED THE NEW ADDRESS EXPLAINED THE ADJUSTMENT OF ADVANCE TOWARDS PURCHASE OF SHARES IN SUBSEQUENT YEAR FILED COPY OF ACCOUNTS AND ALSO EXPLAINED THE OPENING BALANCE OF RESERVES AND SURPLUS BEING RS. 65 CRORES (PAGE 19 PARA 3.3 THERE ARE NO CASH DEPOSITS 41 PARA 6(B) AOS ORDER) THESE FACTS INDICATE AND REFLECT PROPER PAPERWORK OR DOCUMENTATION BUT GENUINENESS CREDITWORTHINESS AND IDENTITY ARE DEEPER AND OBSTRUCTIVE (PAGE 8 2 ND PARA) IT MAY AS IN THE PRESENT CASE REQUIRED ENTAIL A DEEPER SCRUTINY (PAGE 8 2 ND PARA AOS ORDER) IT WOULD BE INCORRECT TO STATE THAT THE ONUS STANDS DISCHARGED IF THE TRANSACTION IS DONE THROUGH BANKING CHANNELS OR ACCOUNT PAYEE INSTRUMENT S (PAGE 8 3 RD PARA AOS ORDER) CASE LAWS RELIED UPON BY A.O KALE KHAN MOHAMMAD HANIF V CIT (1963) 50 ITR 1 4 (SC) SREELEKHA BANERJEE V CIT (1963) 49 ITR 112 (SC) NANAK CHANDRA LAXMAN DASS V CIT (1983) 140 ITR 151 (ALL.) A. D. JAYAVEERAPANDIA NADAR V CIT (1964) 54 ITR 401 (MAD.) ORIENTAL WIRE INDUSTRIES P LTD V CIT (1981) 131 ITR 688 (CAL.) SIKRI & CO. PVT LTD V CIT (1977) 106 ITR 682 (CAL.) VELJIDEORAJ& CO. V CIT (1968) 68 ITR 708 (BOM.) ANRAJNARAINDASS V CIT (9151) 20 ITR 562 (PUNJ.) K. M. SANDHUKHAN& SONS PVT LTD V CIT (1999) 107 TAXMAN 402/ 239 ITR 77 (CAL.) SHANKAR INDUSTRIES V CIT (1978) 114 ITR 689 (CAL.) CIT V KERALA ROAD LINES (1986) 162 ITR 669 (KER.) NOVA PROMOTERS &FINLEASE CIT V NIPUN BUILDERS & DEVELOPERS [2013] 350 ITR 407 (DELHI) IN THE BANK ACCOUNT OF LENDERS ADVANCES GIVEN ARE OUT OF RESERVES AVAILABLE AS ON 31.03.2013 (PAGE 19 PARA - 3.4 CIT(A)S ORDER) THE PRESENT AO WARD 9(4) NEW DELHI WAS CALLED IN CIT(A)S OFFICE DATED JULY 27 2017 AND WAS INFORMED OF PROCEEDINGS HAVING BEEN ATTENDED BY THE DIRECTORS. THE FACTS OF CASE WERE DISCUSSED WITH AO IN DETAIL (PAGE 19 PARA 3.4 CIT(A)S ORDER ). BOTH THE COMPANIED HAVE THE REQUISITE CAPACITY TO LEND BASIS THE POSITION OF FUNDS AS ON MARCH 31 2013 AND DURING THE ASSESSMENT YEAR (PAGE 3.5 PARA 3.5 - CIT(A)S ORDER) CIT(A) HAS HELD THAT THE ADDITIONS IF ANY BE CONSIDERED/ MADE IN CASE OF LENDERS AND THEY HAVE REQUISITE CAPACITY TO LEND AS THEY HAVE ADEQUATE BALANCES LYING UNDER SHARE CAPITAL AND RESERVES THEREFORE THE ADDITION MADE IN CASE OF APPELLANT IS UNWARRANTED . (PAGE 20 CIT(A)S ORDER). CIT(A) HAS NOT RELIED UPON THE CASE LAWS EXCEPT IN THE CASE OF LOVELY EXPORTS ON THE BASIS OF WHICH CIT(A) HAS HELD THAT ADDITION IF ANY MAY BE CONSIDERED IN CASE OF LENDERS. 4. JAWAHAR CREDIT & CAPITAL PVT LTD REVENUES& ASSESSEES 2012-13 SECTION 68: SHARE CAPITAL/ SHARE PREMIUM RS. 73.50 ON PERUSAL OF BANK STATEMENT IT IS OBSERVED THAT SUBSCRIBER COMPANIES AND INDIVIDUAL INVESTORS DID NOT HAVE THEIR OWN CREDITWORTHINESS AS THE MONEY COME INTO THEIR ALL THE TEN INVESTORS ARE SUBMITTING THEIR RETURN OF INCOME TRANSACTIONS HAVE BEEN DONE THROUGH BANKING CHANNEL (PAGE 34 PARA 7.3 CIT(A)S ORDER). 42 APPEAL CRORES ACCOUNT SELDOM RESTS FOR A DAY FINDS ITS DESTINATION IMMEDIATELY . IT SEEMS AN ACCOMMODATION ENTRY TO EVADE TAX (PAGE 6 PARA 3.6.1 AOS ORDER) ASSESSEE COMPANY HAS NOT DONE ANY BUSINESS ACTIVITY MAJOR PART OF TURNOVER IS DERIVED FROM DIVIDEND AND MISCELLANEOUS INCOME (PAGE 6 PARA 3.7.1 AOS ORDER) PAST PERFORMANCE TOTALLY IGNORED FOR VALUATION OF COMPANY DID NOT BRING ANYTHING ON RECORD TO JUSTIFY BRIGHT FUTURE PROSPECT OF THE COMPANY WHICH COULD ENHANCE ITS PROFITABILITY LEADING TO HIGHER VALUATION (PAGE 7 PARA 3.7.2 SUB PARA (A)- AOS ORDER) EPS IS NEGATIVE MAJOR NET INCOME CONSTITUTES MISCELLANEOUS INCOME NOTHING TO DO WITH OBJECTIVES OF COMPANY DIFFICULT TO DIGEST WHY INVESTORS WOULD INVEST IN SUCH A COMPANY WHICH HAS NO FUTURE OBJECTIVES. PRIMA FACIE APPEARS THAT SUBSCRIBERS ARE WELL AWARE OF NATURE OF TRANSACTIONS (PAGE 8 AOS ORDER) ASSESSEE FAILED TO JUSTIFY CHARGING OF PREMIUM (PAGE 8 AOS ORDER) TRANSACTION BETWEEN ASSESSEE COMPANY AND ITS INVESTORS ARE UNUSUAL IN NATURE AND CHARACTER TRANSACTIONS BEING OFF- MARKET UNABLE TO VERIFY CONCLUSION LEADING THIS TRANSACTION TO BE A SHAM TRANSACTION IS THAT MONEY RECEIVED AGAIN INVESTED IN FORM OF SHARE CAPITAL (PAGE 8 PARA 3.8 AOS ORDER) ASSESSEE DID NOT EXPLAIN CASE EVEN AFTER SO MANY OPPORTUNITIES (PAGE 8 PARA 3.8 AOS ORDER) THE ONUS IS ON THE ASSESSEE TO PROVE THE ICG OF THE TRANSACTIONS. THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS (PAGE 10 PARA 3.9.1 AOS ORDER). THE AMENDMENT OF SECTION 68 TO LOOK INTO THE SOURCE OF SOURCE W.E.F. 01.04.2014 CANNOT BE HELD TO BE RETROSPECTIVE IN NATURE (PAGE 34 PARA 7.4 CIT(A)S ORDER) APPELLANT COULD NOT JUSTIFY PAYMENT TOWARDS INVESTMENT IN SHARES AND SIMILAR AMOUNT INVESTED BY APPELLANT COMPANY (PAGE 35 PARA 7.5 CIT(A)S ORDER) APPELLANT COULD NOT PRODUCE DIRECTORS FOR NO COGENT REASON (PAGE 75 PARA 3.5 CIT(A)S ORDER) INVESTORS NOT CARRYING ANY WORTHWHILE ACTIVITY (PAGE 35 PARA 7.5 CIT(A)S ORDER) SOURCE AND DESTINATION COMPANIES ARE HAVING COMMON ADDRESS (PAGE 35 PARA 7.5 CIT(A)S ORDER) APPELLANT COMPANY IS NOT SHOWING ANY WORTHWHILE INCOME AND HAS LIMITED RESERVES AND SURPLUS (PAGE 35 PARA 7.5 CIT(A)S ORDER) APPELLANT COMPANY HAS NOT GIVEN ANY SATISFACTORY REPLY REGARDING FUND FLOW (PAGE 35 PARA 7.6 CIT(A)S ORDER) THOUGH THE DOCUMENTATION IS COMPLETE IN ALL RESPECTS LIKE BANKING CHANNEL CONFIRMATION ETC CONSIDERING INABILITY TO PRODUCE DIRECTORS IT SEEM THAT APPELLANT COMPANY AND ITS INVESTOR ARE NOTHING BUT A CREATION OF PAPER COMPANIES TO TRANSFER FUNDS FROM BHUSHAN STEEL LTD THROUGH APPELLANT COMPANY (PAGE 36 PARA 7.7 CIT(A)S ORDER) NO RESERVES/ NO FUNDS NOR ANY BUSINESS IT IS NOTHING BUT ROUTING OF FUNDS BY BHUSHAN STEEL 43 THE ASSESSEE HAS ALSO FAILED TO SUBMIT THE DOCUMENTS RELATED TO CREDITS IN THE BOOKS (PAGE 13 PARA 3.9 7 AOS ORDER). MERELY FILING SOME PAPERS IN SUPPORT OF TRANSACTION CANNOT BE TERMED AS GENUINE TRANSACTION (PAGE 13 PARA 3.9 7 AOS ORDER). CASE LAWS RELIED UPON BY THE A.O MCDOWELL & CO LTD. [1985] 154 ITR 148 WORKMEN OF ASSOCIATED RUBBER INDUSTRY LTD V ASSOCIATED RUBBER INDUSTRY LTD [1986] 157 ITR 77 (SC) CIT V DURGA PRASAD MORE 82 ITR 540 (SC) BOMBAY OIL INDUSTRIES LTD V DCIT [2000] 82 ITD 626 CIT V SREE MEENAKSHI MILLS LTD 63 ITR 609 CIT V PRECISION FINANCE LTD (1994) 208 ITR 405 BHARATI PVT LTD V CIT W.B. (1978) 111 ITR 991 CIT V FROSTAIR (P) LTD ITA NO. 183 0F 2002 AND 1638 OF 2006 CIT V YOUTH CONSTRUCTION (P) LTD 44 TAXMANN 364 VAIBHAV COTTON CO PVT LTD INDORE V ASSESSEEITA NO. 253/IND/2010 INDORE BENCH BOMBAY OIL INDUSTRIES LTD V DCIT [2000] 82 ITD 626 MANCHERIAL CEMENT V INCOME TAX OFFICER ITA NO. 115/HYD/2012 NIPUN BUILDERS AND DEVELOPERS PVT LTD )DELHI HC) ITA NO. 120/2012 NOVA PROMOTERS &FINLEASE PVT LTD (PAGE 36 PARA 7.8 CIT(A)S ORDER) THE BASIC REQUIREMENT TO JUSTIFY THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION HAS BEEN PRIMA FACIE ESTABLISHED .(PAGE 36 PARA 7.9 CIT(A)S ORDER) NEITHER THE APPELLANT COMPANY NOR THE INVESTORS ARE ULTIMATE BENEFICIARY OF THE TRANSACTIONS BUT THERE IS ROUTING OF FUNDS FROM BHUSHAN STEEL LTD. THE FUNDS RECEIVED ARE GIVEN TO OTHER COMPANIES AS SOON AS THEY ARE RECEIVED (PAGE 36 PARA 7.9 CIT(A)S ORDER) THEREFORE THE CIT(A) HAS DELETED ADDITION OF RS. 73.5 CRORES AND MADE ADDITION OF RS. 1.74 CRORES @ 2 PERCENT FOR ROUTING THESE TRANSACTIONS OF HAVING BEEN PROVIDING A FLUID MECHANISM FROM ONE COMPANY TO ANOTHER . (PAGE 37 PARA 7.10 CIT(A)S ORDER) 5. JINGLE BELLS ALUMINIUM PVT LTD REVENUES & ASSESSEES APPEAL 2012-13 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM RS. 62 CRORES NO REPLIED RECEIVED FROM PARTIES MENTIONED AT PARA 3.3(PAGE 3 AOS ORDER) REPLIES RECEIVED FROM 5 OUT OF 7 PARTIES INCOMPLETE REPLIES RECEIVED FOR 6-7 POINTS OUT OF 11 POINTS ASKED REPLIES RECEIVED IN SAME PATTERN EVEN PRINT OUTS ARE SAME . SO GENUINENESS OF TRANSACTIONS ARE DOUBTFUL THE ASSESSMENTS U/S 143(3) OF THE ACT IN CASE OF INVESTOR COMPANIES HAVE BEEN COMPLETED ACCEPTING THE CONTENTION OF THE SAID COMPANIES AND NO MAJOR ADDITION HAS BEEN MADE ON THIS COUNT (PARA 7.3 PAGE 37 CIT(A)S ORDER) THOUGH THE DOCUMENTATION IS 44 (PARA 3.7/ 3.7.1 PAGE 6 AOS ORDER) SPEED POST BOOKED FROM DELHI BUT REGISTERED OFFICE IN PUNJAB AND CHANDIGARH (PARA 3.7.2 PAGE 6 AOS ORDER) IT SHOWS THAT ASSESSEE ITSELF REPLIED TO NOTICES SENT U/S 133(6) IG IS DUBIOUS (PARA 3.7.3 PAGE 7 AOS ORDER) REGISTERED OFFICES OF INVESTOR COMPANIES ARE LOCATED IN DIFFERENT CITIES BUT ARE HAVING THEIR BANKS OPERATED FROM DELHI JUST TO FACILITATE ASSESSEE (PARA 3.7.4 PAGE 7 AOS ORDER) SUMMONS WERE ISSUED TO DIRECTORS OF IMPERATIVE BUILDWELL CANTABILE MINERALS AND MINING AND CLASSIC TRANSPORTATION AS PER INSPECTORS REPORT NO SUCH COMPANY EXIST AT SUCH ADDRESS (PARA 3.5 PAGE 3 AOS ORDER) SUBSCRIBER COMPANIES DID NOT HAVE CREDITWORTHINESS AS MONEY SELDOM RESTS FOR A DAY IN THEIR ACCOUNTS FINDS ITS DESTINATION IMMEDIATELY; INVESTOR COMPANIES HAVE NO PROFIT MAKING APPARATUS NO BUSINESS ACTIVITY . IT IS JUST AN ACCOMMODATION ENTRY TO EVADE TAXES (PARA 3.8.1 PAGE 8 AOS ORDER) ASSESSEE COMPANY HAS VERY NOMINAL BUSINESS PROFIT (3.87) NEGATIVE EPS MAJOR MISCELLANEOUS INCOME NOTHING TO DO WITH BUSINESS OBJECTIVES OF ASSESSEE COMPANY PRIMA FACIE APPEARS THAT ASSESSEE AND AS WELL AS SUBSCRIBERS ARE WELL AWARE ABOUT NATURE OF TRANSACTIONS (PARA 3.9.1 PAGE 9/10 AOS ORDER) THAT THE CREDITS OF RS 62 CRORES ARE HIT BY SECTION 68 OF THE ACT.(PARA 3.10.9 PAGE 16 AOS ORDER). THE ONUS IS ON THE ASSESSEE TO PROVE THE ICG OF THE TRANSACTIONS .(PARA 3.10.8 PAGE 15 AOS ORDER). THE COMPLETE IN RESPECT OF INVESTOR COMPANIES THE FINDINGS OF THE AO THAT NON AVAILABILITY OF INVESTOR COMPANIES AT THE GIVEN ADDRESS INABILITY TO PRODUCE DIRECTORS NO NET WORTH NO JUSTIFICATION FOR SUCH A HIGH PREMIUM TRANSFERRING OF FUNDS OF BUSHAN STEEL TO VARIOUS COMPANIES SHOWS THAT INVESTOR AND APPELLANT COMPANY ARE NOTHING BUT A CREATION OF PAPER COMPANIES. (PAGE 39 PARA 7.8 - CIT(A)S ORDER) CIT(A) HAS OBSERVED THAT NEITHER THE APPELLANT COMPANY NOR THE INVESTORS ARE ULTIMATE BENEFICIARY OF THE TRANSACTIONS BUT THERE IS ROUTING OF FUNDS FROM BHUSHAN STEEL LTD. THE FUNDS RECEIVED ARE GIVEN TO OTHER COMPANIES AS SOON AS THEY ARE RECEIVED. THE BASIS REQUIREMENT TO JUSTIFY ICG OF TRANSACTION HAS PRIMA FACIE BEEN ESTABLISHED ( PAGE 39 PARA 7.10 CIT(A)S ORDER) LOOKING TO THE FACT AND ANALYSIS THESE TRANSACTIONS ARE FOUND TO BE ROUTING FINANCES OF BHUSHAN STEEL AND THESE ARE JUST PAPER COMPANIES WHERE APPELLANT COMPANY IS NOT THE ULTIMATE BENEFICIARY ( PAGE 39 PARA 7.10 CIT(A)S ORDER) CONSIDERING THE COMPANIES ARE PAPER COMPANIES AND APPELLANT HAS BEEN PROVIDING FACILITY TO ROUTE THESE TRANSACTIONS THE 2% OF TOTAL AMOUNT (COMES TO RS. 1.24 CR) IS TREATED AS UNDISCLOSED INCOME OF THE APPELLANT NOT SHOWN IN RETURN OF INCOME (PAGE 40 PARA 7.11 CIT(A)S ORDER) SINCE DETAILS HAVE DULY BEEN PROVIDED WITH RESPECT TO REFERRED COMPANIES THE ADDITIONS 45 ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS. (PARA 3.10.1 PAGE 12 AOS ORDER). THE ASSESSEE HAS ALSO FAILED TO BRING DIRECTORS OF THE INVESTOR COMPANY (PARA 3.10.2 PAGE 12 AOS ORDER) MERELY FILING SOME PAPERS IN SUPPORT OF TRANSACTION CANNOT BE TERMED AS GENUINE TRANSACTION.(PARA 3.10.9. PAGE 16 AOS ORDER) CASE LAWS RELIED UPON BY THE A.O MCDOWELL & CO LTD. [1985] 154 ITR 148 WORKMEN OF ASSOCIATED RUBBER INDUSTRY LTD V ASSOCIATED RUBBER INDUSTRY [1986] 157 ITR 77 (SC) CIT V SREE MEENAKSHI MILLS LTD 63 ITR 609 (SC) CIT V DURGA PRASAD MORE 82 ITR 540 (SC) BOMBAY OIL INDUSTRIES LTD V DCIT [2000] 82 ITD 626 CIT V FROSTAIR (P) LTD ITA NO. 183 0F 2002 AND 1638 OF 2006 CIT V YOUTH CONSTRUCTION (P) LTD 44 TAXMANN 364 CIT V PRECISION FINANCE PVT LTD (1994)208 ITR405 NOVA PROMOTERS &FINLEASE (P) LTD (HIGH COURT OF DELHI) MANCHERIAL CEMENT V INCOME TAX OFFICER ITA NO. 115/HYD/2012 NIPUN BUILDERS AND DEVELOPERS PVT LTD )DELHI HC) ITA NO. 120/2012 VAIBHAV COTTON CO LTD INDORE V ASSESSEE ITA NO. 253/IND/2010 INDORE BENCH ARE OUT OF AMBIT OF THE PROVISIONS OF SECTION 68 OF THE ACT. ADDITION TO THE EXTENT OF RS 1.24 CRORE IS SUSTAINED AND FOR THE BALANCE AMOUNT THE APPELLANT GETS A RELIEF (PAGE 40 PARA 7.11 CIT(A) ORDER) THEREFORE THE CIT(A) HAS DELETED ADDITION OF RS. 62 CRORES AND MADE ADDITION OF RS. 1.24 CRORES @ 2 PERCENT FOR ROUTING THESE TRANSACTIONS OF HAVING BEEN PROVIDING A FLUID MECHANISM FROM ONE COMPANY TO ANOTHER. .CIT(A) HAS REITERATED THE FOLLOWING JUDGMENTS IN HIS ORDER AT PAGE 37 REPRODUCED HEREINAFTER: CIT V LOVELY EXPORTS 299 ITR 268 CIT V KAMDHENU ALLOYS AND STEEL 206 TAXMANN 254 CIT V NOVA PROMOTERS AND FINLEASE PVT LTD 6. KASPER INFORMATION TECHNOLOGY PVT LTD - REVENUES& ASSESSEES APPEAL 2012-13 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM RS. 46 CRORES (SHARE CAPITAL 8 CR AND PREMIUM ASSESSEE HAS NOT FILED ANY CONFIRMATION FROM PARTIES BUT SUBMITTED A CHART SHOWING INCREASE IN SHARE CAPITAL & SHARE PREMIUM GIVING NAMES & ADDRESSES OF PARTIES (PAGE 5 & 6 PARA 3 SUB PARA 3(A)(I) OF AOS ORDER). IN ORDER TO VERIFY ICG OF INTRODUCERS OF SHARE CAPITAL/ PREMIUM NOTICES U/S BASIC REQUIREMENT TO JUSTIFY THE IDENTITY CREDITWORTHINESS AND GENUINENESS (ICG) OF THE TRANSACTION PRIMA FACIE ESTABLISHED . NEITHER THE APPELLANT COMPANY NOR THE INVESTORS ARE ULTIMATE BENEFICIARY OF THE TRANSACTIONS BUT THERE IS ROUTING OF FUNDS FROM BHUSHAN STEEL LTD . THE 46 THEREON 38 CR) 133(6) WHICH REMAINED UN- COMPLIED NO CONFIRMATION EVER RECEIVED NOT EVEN TILL DATE OF PASSING OF ORDER . (PARA 3(A)(II) PAGE 6 AOS ORDER). ASSESSEE FAILED TO BRING THE DIRECTORS OF THE INVESTOR COMPANY ALONG WITH BOOKS OF ACCOUNTS AND CONFIRMATION TO PROVE THE IDENTITY OF THE CONTRIBUTORS . NO CONFIRMATIONS AND RETURN/PAN OF PARTIES CROSS VERIFICATION NOT POSSIBLE ONUS IS ON THE ASSESSEE TO PROVE THE ICG - ASSESSEE FAILED TO DISCHARGE ONUS. ASSESSEES OWN MONEY ROUTED THESE CONCERNS (PARA 4(A)(I) PAGE 8 AOS ORDER). EVIDENCE AVAILABLE IMPEACHING THE CREDENTIALS OF THE INVESTOR COMPANIES AND THEIR DIRECTORS (PARA 4(A)(I) PAGE 8 AOS ORDER). AMT RECEIVED THROUGH PRIVATE PLACEMENT CONTRIBUTORS PERSONALLY KNOWN TO ASSESSEE MUST BE AWARE OF WHEREABOUTS - CORPORATE VEIL NEEDS TO BE LIFTED ASSESSEE CONVERTED ITS UNACCOUNTED FUNDS IN THE FORM OF SHARE CAPITAL FROM 4 CONCERNS ASSESSEE FAILED TO SUBMIT DOCUMENTS RELATED TO CREDITS IN THE BOOKS ASSESSEE PROVIDED VARIOUS ADDRESSES OF ALLEGED CONTRIBUTORS OF SHARE APPLICATION ONLY TO MISLEAD DEPT. (PARA 4(A)(VI) -AOS ORDER) D IFFERENTIATED LOVELY EXPORTS (SC) ON GROUND THAT IT IS NOT HAVING BINDING EFFECT UNDER\ ARTICLE 141 OF THE CONSTITUTION OF INDIA SUMMARY DISMISSAL BY SC WITHOUT LAYING ANY LAW IS NOT DECLARATION OF LAW. FOR THIS RELIED UPON S. SHANMUGAVEL NADAR. V STATE OF TAMIL NADU [2003] 263 ITR 658 (SC) CASE LAWS RELIED UPON BY THE FUNDS RECEIVED ARE GIVEN TO OTHER COMPANIES AS SOON AS THEY ARE RECEIVED. INVESTOR COMPANIES SUBMITTED THEIR TAX RETURNS PROVIDED CONFIRMATIONS TRANSACTIONS DONE THROUGH BANK ASSESSMENT U/S 143(3) COMPLETED NO MAJOR ADDITION HAVE BEEN MADE ON SHARE CAPITAL/ PREMIUM (INVESTMENT) COUNT. NOTHING MENTIONED IN THE ASSESSMENT ORDER REGARDING ANY STATEMENT OF ANY PERSON PROVIDING ENTRY . NO MATERIAL BROUGHT ON RECORD TO CONCLUSIVELY PROVE THE SHARE CAPITAL ORIGINATED FROM APPELLANT COMPANY RETURNED IN THE FORM OF SHARE CAPITAL. NO MANDATE OF THE LAW TO LOOK INTO THE SOURCE OF SOURCE FOR THE YEAR UNDER CONSIDERATION . THE AMENDMENT OF SECTION 68 W.E.F. 01.04.2013 CANNOT BE HELD OR INTERPRETED TO BE RETROSPECTIVE IN NATURE ASSESSEE CANNOT BE FASTENED WITH THE LIABILITY U/S 68 UNLESS A CAUSAL CONNECTION BETWEEN THE CASH DEPOSIT IN THE BANK AND THE ASSESSEE IS ESTABLISHED . (RELYING UPN LOVELY EXPORTS AND KAMDHENU STEEL PARA 7.4 PAGE 22 & 23 OF CIT(A)S ORDER) WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICATIONS ARE FURNISHED TO THE AO AND THE AO HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY U/S 68. (PARA 7.4 PAGE 23 CIT(A)S ORDER) THE APPELLANT COMPANY AND ITS INVESTOR COMPANIES ARE NOTHING BUT A CREATION OF PAPER COMPANIES TO TRANSFER ITS FUNDS FROM ALLEGED BHUSHAN STEEL LTD. TO 47 A.O KALE KHAN MOHAMMAD HANIF V CIT (1963) 50 ITR 1 (SC) CIT V LACHHMAN DAS OSWAL (1980) 126 ITR 446 (P&H) CIT V HERO CYCLES LTD&ORS (1997) 228 ITR 463 (SC) CIT V STEPWELL INDUSTRIES LIMITED &ORS (1997) 228 ITR 171 (SC) SUMATIDAYAL V CIT (1976) 113 ITR 522 (DEL). R DALMIA V CIT (1976) 113 ITR 522 (DELHI) CIT V DEVI PRASAD VISHWANATH PRASAD (1968) 72 ITR 194 (SC) SREELEKHA BANERJEE V CIT (1963) 49 ITR 112 (SC) ROSHAN DI HATTI V CIT (1977) 107 ITR 938 (SC) CIT V KERALA ROADLINES CORP. (1986) 162 ITR 669 (KER.) ACTIVE TRADERS PVT LTD [1995] 214 ITR 583 (CAL.) SRI KRISHNA V CIT 142 ITR 618 [ALL] RASHIBARI TOBACCO PROCESSORS LTD. V DCIT [1997] 57 TTJ 120 (AHD.) RIDHISIDHI COMMERCIAL CO. LTD V ACIT [1998] 62 TTJ 710 (DEL.) A GOVINDARAJULUMUDALIAR V CIT [1958] 34 ITR 807 (SC) CIT V KORLAY TRADING CO. LTD. [1998] 230 ITR 820 (CAL.) CIT V PRECISION FINANCE LTD. (1994) 208 ITR 465 (CAL.) VARIOUS COMPANIES THROUGH THE APPELLANT COMPANY AND ITS INVESTOR COMPANIES. THE APPELLANT COMPANY HAS NOT GIVEN ANY COGENT REASONING FOR THE FUND FLOW. APPELLANT COMPANY IS ONLY ROUTING TRANSACTIONS OF ALLEGED BHUSHAN STEEL LTD. AND NOT THE ULTIMATE BENEFICIARY . IT HAS FURTHER PASSED ON FUNDS TO OTHER COMPANIES. (PARA 7.3 & 7.8 PAGE 23 & 24) CIT(A) DELETED ADDITION OF RS. 46 CRORES AND MADE ADDITION OF RS. 92 LAKHS @ 2 PERCENT AS UNDISCLOSED INCOME RECEIVED BY THE APPELLANT FOR ROUTING THESE TRANSACTIONS OF HAVING BEEN PROVIDING A FLUID MECHANISM FROM ONE COMPANY TO ANOTHER . ADDITION ENHANCED BY RS 92 LAKHS FOR ROUTING TRANSACTIONS. (PARA 7.9 & 7.10 PAGE 24) CASE LAWS RELIED UPON BY THE CIT(A) CIT VS. LOVELY EXPORTS PVT. LTD. 299 ITR 268 CIT VS. KAMDHENU STEEL AND ALLOYS LTD. 206 TAXMAN 254 CIT VS. NOVA PROMOTERS AND FINLEASE (P) LTD. (DELHI HC) 7. KASPERS INFORMATION TECHNOLOGY PVT LTD ASSESSEES APPEAL 2013-14 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM RS. 16 CRORES THE ASSESSEE COMPANY HAS NOT DISCHARGED ITS ONUS TO PROVE GENUINENESS AND CREDITWORTHINESS OF TRANSACTIONS.(PARA 4.5.1 PAGE 5 AOS ORDER). THE ASSESSEE COMPANY HAS FAILED TO PRODUCE THE DIRECTORS OF THE INVESTOR COMPANY AND TO PROVE THE IDENTITY OF THE INVESTOR COMPANY.(PARA 4.6.1 PARA 5- AOS ORDER). THE ASSESSEE HAS NOT DONE ANY BUSINESS ACTIVITY DURING THE YEAR UNDER ASSESSMENT IN A DETAILED DISCUSSION IN ASSESSMENT ORDER AO HAS CORRECTLY HELD THAT AMOUNT OF RS. 16 CRORES IN UNDISCLOSED INCOME OF THE APPELLANT. (PARA 4 PAGE 32 CIT(A)S ORDER) AO HAS DISCUSSED IN DETAIL THE REASONS FOR ADDITION OF RS. 16 CRORES.(PARA 4 PAGE 32 CIT(A)S ORDER) THE AO HAS DISCUSSED THAT THE APPELLANT HAS FAILED TO ESTABLISH ICG OF THE TRANSACTION. (PARA 4 PAGE 32 CIT(A)S ORDER). 48 AND NOT RECEIVED ANY BUSINESS INCOME EXCEPT DIVIDEND INCOME RS. 6.65 LAKHS AND PROFIT ON SALE OF TRADE & NON-TRADE INVESTMENT OF RS 2.32 LAKH AND RS 15 THOUSAND RESPECTIVELY.(PARA 2 PAGE 2 AOS ORDER). BOTH THE INVESTORS TO WHOM 133(6) AND 131 WERE ISSUED NOBODY ATTENDED SUMMONS . (PARA 4.3 PAGE 4 AOS ORDER). BOTH THE PARTIES HAVE PARTIALLY REPLIED (FOUR OUT OF SEVEN QUES) REPLIES FILED IN SAME PATTERN FROM SAME POST OFFICE OFFICE IN EAST DELHI REPLY CAME FROM R.K. PURAM THEREFORE GENUINENESS IS DOUBTFUL (PARA 4.1 & 4.4.1 PAGE 4- AOS ORDER) THE ASSESSEE HAS IGNORED THE VALUATION CRITERIA OF PAST PERFORMANCE FOR VALUATION OF THE COMPANY.(PARA 4.6.3 PAGE 5- AOS ORDER). IT IS COMMON SENSE THAT PAST PERFORMANCE SHOULD BE GIVEN SUITABLE WEIGHT AGE FOR VALUATION OF COMPANY AND ITS SHARES BUT SAME HAS BEEN TOTALLY IGNORED IN THE INSTANT CASE. (PARA 4.6.3 PAGE 5- AOS ORDER) THE ASSESSEE HAS BROUGHT NOTHING ON RECORD TO JUSTIFY ITS BRIGHT FUTURE PROSPECT TO INCREASE PROFITABILITY AND ULTIMATELY INCREASING ITS VALUATION.(PARA 4.6.3 PAGE 5 AOS ORDER. DIFFICULT TO DIGEST WHY INVESTOR INVESTED IN SUCH A COMPANY WHICH HAS NO FUTURE FOR RUNNING ANY PROFIT (PARA 4.6.3 SBU-PARA (B) PAGE 6 AOS ORDER) PRIMA FACIE APPEARS THAT SUBSCRIBERS AND ASSESSEE COMPANY ARE WELL AWARE OF TRANSACTIONS (PARA 4.6.3 SBU-PARA (C) PAGE 6 AOS ORDER) THE TRANSACTION ENTERED INTO BY THE ASSESSEE IS SHAM TRANSACTION THE CREDIT OF THE SUBMISSIONS FILED BY THE APPELLANT HAVE BEEN CONSIDERED AND NOT FOUND TO BE TENABLE AND THE CASE LAWS CITED BY THE APPELLANT ARE DISTINGUISHABLE IN FACTS.(PARA 4 PAGE 32 CIT(A)S ORDER) REPLY U/S 133(6) NOT RECEIVED (PARA 4.2.3.1 PAGE 22). SUMMONS U/S 131 NOT ATTENDED (PARA 4.2.3.1 PAGE 22) COMPANY HAS NOT DONE ANY BUSINESS BUT HAS GENERATED INCOME FROM DIVIDEND AND SALE OF INVESTMENT IN THE INSTANT YEAR PREVIOUS ASSESSMENT YEAR AND TWO SUBSEQUENT YEARS AY 2013- 14 AY 2012-13 AY 2014-15 AND AY 2015-16 NO REASON TO INTERFERE IN THE ORDER OF THE AO. CIT(A) HAS RELIED UPON THE FINDING OF THE AO THAT THE ASSESSEE HAS FAILED TO PROVE THE ICG OF TEH TRANSACTIONS. CASE LAWS RELIED UPON BY THE CIT(A) NAVODAYA CASTLE [56 TAXMANN.COM 18 (SC)] CIT V SOPHIA FINANCE LTD 205 ITR 98 (DEL.) N. R. PORTFOLIO PVT LTD [87 DTR 162 (DEL)] TITAN SECURITIES LTD. 357 ITR 184 (DEL)] GLOBUS SECURITIES AND FINANCE PVT LTD [224 TAXMAN 237 (DELHI)] ONASSIS AXLES PRIVATE LIMITED [364 ITR 53 (DELHI)] FOCUS EXPORTS PVT LTD [111 DTR 0012 (DEL)] RATHI FINLEASE LTD (215 CTR 429 MP) KORLAY TRADING CO. (232 ITR 820 (CAL)) SUMATIDAYAL (214 ITR 801 (SC)) POWER DRUGS LTD (245 CTR 623 (P&H)) AZEEM INVESTMENT PVT LTD (252 CTR 0217 (DEL.)) MAJOR METALS LTD (359 ITR 450 (BOM)) 49 FUNDS IN THE FORM OF SHARE CAPITAL/ SHARE PREMIUM BEING USED FOR INVESTING IN OTHER COMPANIES AT PREMIUM. (PARA 4.6.4 SUB- POINT (3) PAGE 6/7 AOS ORDER). EFFORTS MADE BY ASSESSEE TO CHANGE THE COLOR OF TRANSACTION AND NOT JUSTIFIED IT CASE IN SPITE OF OPPORTUNITIES(PARA 4.6.4 SUB-POINT (4) PAGE 6/7 AOS ORDER). THE CASE OF THE ASSESSEE FOR THE AY 2012-13 IS ALSO PENDING DISPOSAL IN WHICH ADDITION ON SAME GROUND WAS MADE AND THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS BECAUSE MERELY FILING SOME PAPERS IN SUPPORT OF TRANSACTION CANNOT BE TERMED AS GENUINE TRANSACTION.(PARA 4.7.8 PAGE 11 AOS ORDER) CASE LAWS RELIED UPON BY THE A.O MCDOWELL & CO LTD. [1985] 154 ITR 148 CIT V DURGA PRASAD MORE 82 ITR 540 (SC) WORKMEN OF ASSOCIATED RUBBER INDUSTRY LTD V ASSOCIATED RUBBER INDUSTRY LTD [1986] 157 ITR 77 (SC) BOMBAY OIL INDUSTRIES LTD V DCIT [2000] 82 ITD 626 CIT V SREE MEENAKSHI MILLS LTD 63 ITR 609 CIT V FROSTAIR (P) LTD ITA NO. 183 0F 2002 AND 1638 OF 2006 CIT V YOUTH CONSTRUCTION (P) LTD 44 TAXMANN 364 BOMBAY OIL INDUSTRIES LTD V DCIT [2000] 82 ITD 626 MANCHERIAL CEMENT V INCOME TAX OFFICER ITA NO. 115/HYD/2012 NIPUN BUILDERS AND DEVELOPERS PVT LTD (DELHI HC) ITA NO. 120/2012 NOVA PROMOTERS &FINLEASE LTD (P) LTD [2012] 206 TAXMAN 207 CIT V PRECISION FINANCE PVT LTD (1994) 208 ITR 405 INDEPENDENT MEDIA PVT LTD (25 TAXMANN.COM 276 (DELHI)) NEELKANTH ISPAT UDYOG PVT LTD (81 DTR 0214) FROSTAIR PVT LTD [92 DTR 393 (DEL)] RAJANI HOTELS LTD [79 DTR 185 (MAD)] MAF ACEDEMY PVT LTD [361 ITR 02858 (DELHI) TARIKA INVESTMENT PROPERTIES PVT LTD [221 TAXMANN 0014 (DEL)] EMPIRE BUILDTECH PVT LTD [366 ITR 110 (DELHI)] KUNDAN INVESTMENT LTD (263 ITR 626 (CAL)) NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) ULTRA MODERN EXPORTS PVT LTD [220 TAXMAN 165 (DELHI)] 28. LANDSKYREAL ESTATE PVT 2013-14 SECTION 68 SHARE REGARDING SHARE CAPITAL OF RS. 16 CRORES: NO REASON TO INTERFERE WITH THE AO ON THE ISSUES AND AO 50 LTD ASSESSEES APPEAL CAPITAL - RS. 16 CRORES ADVANCES RECEIVED - RS. 2.6 CRORES THE ASSESSEE COMPANY HAS NOT DISCHARGED ITS ONUS TO PROVE GENUINENESS AND CREDITWORTHINESS OF TRANSACTIONS EVEN AFTER SO MANY OPPORTUNITIES (PAGE 4 PARA 4.11). THE ASSESSEE COMPANY HAS FAILED TO PRODUCE THE DIRECTORS OF THE INVESTOR COMPANY PROVE THE IDENTITY OF THE INVESTOR COMPANY(PAGE 4 PARA 4.10). THE ASSESSEE HAS NOT DONE ANY BUSINESS ACTIVITY DURING THE YEAR UNDER ASSESSMENT AND IN SUBSEQUENT ASSESSMENT YEARS ALSO. I.E AY 2014-15 & AY 2015-16(PAGE 4 PARA 4.12). THE ASSESSEE HAS IGNORED THE VALUATION CRITERIA OF PAST PERFORMANCE FOR VALUATION OF THE COMPANY(PAGE 4 PARA 4.12). THE REGISTERED OFFICE OF THE INVESTOR COMPANIES (WINFILED AND QUADREL) ARE LOCATED IN DILSHAD GARDEN AND WEST VINOD NAGAR (SITUATED IN EAST DELHI) BUT THEY HAVE SENT THE PART REPLIES FROM RK PURAM POST OFFICE AND PATTERN OF BOTH THE REPLIES ARE SAME. THEY MAY HAVE BEEN SENT BY A COMMON PERSON. THEREFORE GENUINENESS IS DOUBTFUL.( PAGE 3 PARA 4.4 4.5 AOS ORDER). THE ASSESSEE HAS FAILED TO PROVE THE ICG OF THE TRANSACTION (PAGE 9 PARA 5.4 AOS ORDER). THE ASSESSEE HAS BROUGHT NOTHING ON RECORD TO JUSTIFY ITS BRIGHT FUTURE PROSPECT TO INCREASE PROFITABILITY AND ULTIMATELY INCREASING ITS VALUATION(PAGE 4 PARA 4.12). TRANSACTION BETWEEN ASSESSEE COMPANY AND ITS INVESTOR IS UNUSUAL IN NATURE AND CHARACTER. THE MONEY THAT COMES TO THE BANK ACCOUNT OF ENTRY OPERATORS SELDOM RESTS FOR A DAY AND IMMEDIATELY FINDS ITS DESTINATION. THE BENEFICIARY HAS ALREADY DISCUSSED IN DETAIL(PAGE 27 PARA - 4.2.3.6 CIT(A)S ORDER). AO HAS DISCUSSED THAT THE APPELLANT HAS FAILED TO DISCHARGE THE ONUS CAST UPON U/S 68 OF THE ACT BY FAILING TO PROVE THE ICG OF THE TRANSACTIONS(PAGE 27 PARA - 4.2.3.6 CIT(A)S ORDER). THE SUBMISSIONS FILED BY THE APPELLANT HAVE BEEN CONSIDERED AND ARE NOT FOUND TENABLE. THE CASE LAWS CITED BY THE APPELLANT ARE DISTINGUISHABLE IN FACTS(PAGE 27 PARA - 4.2.3.6 CIT(A)S ORDER). CIT(A) DISTINGUISHED LOVELY EXPORTS [216 CTR 195] AND GOURDIN HERBALS INDIA LTD ITA NO. 665/2009 DATED SEP 17 2009 CASE LAWS RELIED UPON BY THE CIT(A) NR PORTFOLIO PVT LTD [96 DTR 0281 (DELHI)] CIT V NOVA PROMOTERS &FINLEASE (P) LTD [ITA NO. 342 OF 2011] GKN DRIVESHAFTS (INDIA) LTD. V ITO (259 ITR 19) (SC) NAVODAYA CASTLE [56 TAXMANN.COM 18 (SC)] (DISTINGUISHING LOVELY EXPORTS) CIT V SOPHIA FINANCE LTD 205 ITR 98 (DEL.) (F.B.) TITAN SECURITIES LTD [357 ITR 184 (DEL)] MAF ACADEMY PVT LTD [361 ITR 02858 (DELHI)] TARIKA PROPERTIES INVESTMENT PVT LTD [221 TAXMAN 0014 (DEL) ] NOVA PROMOTERS AND FINLEASE PVT LTD (2012) 342 ITR 169 (DELHI) GLOBUS SECURITIES AND FINANCE PVT LTD [224 TAXMAN 237 (DELHI) ] FOCUS EXPORTS PVT LTD [111 DTR 0012 (DEL) ] RATHI FINLEASE LTD (215 CTR 51 WHO GETS SUCH MONEY DOES NOT GIVE BACK ANY DIVIDEND OR SHARE OF PROFIT OR INTEREST TO ENTRY OPERATORS. (PARA 416 PAGE 7) MERELY FILING SOME PAPERS IN SUPPORT OF TRANSACTION CANNOT BE TERMED AS GENUINE TRANSACTION . (PAGE 8 PARA 4.21). REGARDING ADVANCES OF RS 2.6 CRORES RECEIVED FROM CANTABILE MINERALS AND ANGEL CEMENT: THE NOTICES SENT U/S 133(6) TO THE PARTIES WHO ADVANCED MONEY TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION RETURNED UNSERVED. ALTHOUGH THEIR REPLY HAS BEEN SENT FROM RK PURAM POST OFFICE (REGISTERED ADDRESS IS IN CHAWRI BAZAR) ON SAME PATTERN AND AT SAME TIME. THIS HAS CREATED DOUBT ABOUT THEIR GENUINENESS ( PAGE 9 PARA 5 AOS ORDER) EFFORTS MADE TO SERVE SUMMONS BUT NO SUCH COMPANY EXIST AT THE GIVEN ADDRESS ( PAGE 9 PARA 5.1 AOS ORDER) ASSESSEE FAILED TO PROVE ICG OF THE TRANSACTIONS ( PAGE 9 PARA 5.4 AOS ORDER) CASE LAWS RELIED UPON BY THE A.O MCDOWELL & CO LTD. [1985] 154 ITR 148 WORKMEN OF ASSOCIATED RUBBER INDUSTRY LTD V ASSOCIATED RUBBER INDUSTRY [1986] 157 ITR 77 (SC) CIT V DURGA PRASAD MORE 82 ITR 540 (SC) BOMBAY OIL INDUSTRIES LTD V DCIT [2000] 82 ITD 626 CIT V SRI MEENAKSHI MILLS LTD 63 ITR 609 CIT V FROSTAIR (P) LTD ITA NO. 183 0F 2002 AND 1638 OF 2006 CIT V YOUTH CONSTRUCTION (P) LTD 44 TAXMANN 364 BOMBAY OIL INDUSTRIES LTD V DCIT [2000] 82 ITD 626 CIT V PRECISION FINANCE PVT LTD (1994) 208 ITR 405 BHARATI PVT LTD V CIT W.B. (1978) 111 ITR 991 (CAL.) MANCHERIAL CEMENT V INCOME 429 MP) EMPIRE BUILDTECH PVT LTD [366 ITR 110 (DELHI)] ONASSIS AXLES PRIVATE LIMITED [364 ITR 53 (DELHI)] KUNDAN INVESTMENT LTD (263 ITR 626) (CAL) KORLAY TRADING CO. LTD (232 ITR 820 (CAL)) SUMATIDAYAL (214 ITR 801 (SC)) POWER DRUGS LTD. (245 CTR 623 P&H) AZEEM INVESTMENT PVT LTD (252 CTR 0217 DEL) MAJOR METALS LTD (359 ITR 0450 (BOM)) INDEPENDENT MEDIA PVT LTD (25 TAXMANN.COM 276 (DELHI)) NEELKANTH ISPAT UDYOG PVT LTD (81 DTR 0214) FROSTAIR PVT LTD [92 DTR 393 (DEL)] RAJANI HOTELS LTD [79 DTR 185 (MAD)] ULTRA MODERN EXPORTS [220 TAXMAN 165 (DELHI)] 52 TAX OFFICER ITA NO. 115/HYD/2012 NIPUN BUILDERS AND DEVELOPERS PVT LTD )DELHI HC) ITA NO. 120/2012 CIT V NOVA PROMOTERS &FINLEASE PVT LTD [2012] 206 TAXMAN 207 VAIBHAV COTTON PVT LTD INDORE V ASSESSEE ITA NO. 253/IND/2010 9. SINTEX CONSUMER ELECTRONICS PVT LTD REVENUES APPEAL 2012-13 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM RS. 78.228 CRORES OUT OF 10 PARTIES TO WHOM NOTICE U/S 133(6) WERE ISSUED 7 RETURNED UNSERVED REPLY RECEIVED FROM 2 AND ONE PARTY DID NOT REPLY . (PAGE 5 AOS ORDER) THE RETURNED INCOME OF M/S STANCE CONSUMER ELECTRONICS AND IMMENSE MINERALS IS RS 413 AND RS. 4 43 811/- AND THEIR CREDITWORTHINESS OF INVESTMENT IS HIGHLY UNLIKELY . THEREFORE IT IS TREATED AS ASSESSEES OWN CONCEALED INCOME. (PAGE 6 AOS ORDER) BECAUSE THE ASSESSEE COULD NOT PRODUCE THE PRINCIPAL OFFICER(S) OF THE INVESTOR COMPANIES AND NOTICES SENT U/S 133(6) RETURNED OR NO REPLY IS RECEIVED LEAD TO A CONCLUSION THAT THE SAID TRANSACTION IS NOT GENUINE AND THE ASSESSEE HAS INTRODUCED HIS OWN MONEY IN THE GARB OF SHARE CAPITAL/ SHARE APPLICATION .(PAGE 6 AOS ORDER) NOTICES ISSUED TO MAJORITY OF THE PARTIES RETURNED UNSERVED EXCEPT IN CASE OF THREE PARTIES OF WHICH REPLY WAS RECEIVED FROM TWO PARTIES ONLY(TABLE AT PAGE 5 AOS ORDER). OUT OF THE PARTIES WHO REPLIED TO NOTICE SENT U/ S 133(6) THEIR CREDITWORTHINESS IS HIGHLY UNLIKELY BASIS THEIR RETURNED INCOME OF RS 413/- AND RS. 4 43 811/- AND THE AMOUNT CONTRIBUTED BY THEM WAS RS. 8 70 00 000 EACH (PAGE 6 AOS ORDER). THE ASSESSEE NEITHER HAS BRAND VALUE NOR IT HAS ANY PAST PERFORMANCE HISTORY CIT(A) HAS MADE ANALYSIS OF THE NET WORTH OF THE INVESTOR COMPANIES WHICH IS RUNNING IN CRORES ENOUGH TO MAKE INVESTMENT BUT HAS MADE NO COMMENT IN ITS ORDER (TABLE AT PAGE 22 CIT(A)S ORDER) AO HAS NOT BROUGHT ANY ADVERSE MATERIAL TO REJECT THE EXPLANATIONS AND EVIDENCES SUBMITTED BY THE APPELLANT. IT IS NOT THE CASE OF LD. AO THAT ANY PERSON HAS GIVEN ANY STATEMENT OR MADE ANY ALLEGATION AGAINST THESE COMPANIES ( PAGE 23 CIT(A)S ORDER). THE REASONS GIVEN BY AO ARE GENERIC IN NATURE AND NOT BACKED BY ANY CONCRETE EVIDENCE. (PAGE 23 CIT(A)S ORDER) NO CASH DEPOSIT IN THE BANK ACCOUNTS OF INVESTOR COMPANIES FOR MAKING INVESTMENT IN THE APPELLANT COMPANY (PAGE 23 4 CIT(A)S ORDER). THE APPELLANT COMPANY HAS ALLOTTED SHARES FOR THE APPLICATION MONEY RECEIVED BY IT (PAGE 24 CIT(A)S ORDER). DEPOSITORS HAVE GIVEN CONFIRMATION PROVIDED THEIR INCOME TAX RETURNS ENTIRE AMOUNT RECEIVED THROUGH NORMAL BANKING CHANNELS (PAGE 23/24 CIT(A)S ORDER). 53 NOR ANY FUTURE PROSPECT NOT ANY SUCH ASSET WHICH WOULD INCREASE ITS PROFITABILITY TO ATTRACT SUCH HUGE PREMIUM.(PAGE 6 AOS ORDER) IN VIEW OF ABOVE SHARE CAPITAL AND SHARE PREMIUM IS BEING ADDED BACK AS ITS OWN CONCEALED INCOME INTRODUCED IN THE FORM OF SHARE CAPITAL AND SHARE PREMIUM.(PAGE 6 AOS ORDER) THE APPELLANT HAS ESTABLISHED THE ICG OF THE TRANSACTIONS.(PAGE 27 CIT(A)S ORDER). ONUS CAST UPON THE APPELLANT WITH REGARD DUTIES ENJOINED BY VIRTUE OF CASH CREDIT STANDS FULFILLED AND DISCHARGED CANNOT BE SAID THAT APPELLANT FAILED TO DISCHARGE CREDITWORTHINESS AND GENUINENESS (PAGE 24 CIT(A)S ORDER). NO ADVERSE INFERENCE IS WARRANTED OR SUSTAINABLE (PAGE 24 CIT(A)S ORDER). THE SHARES ISSUED AS BONUS SHARES HAVE NOT BROUGHT ANY INFLOW OF INCOME WHICH IS NOTHING BUT THE CREDIT IN THE BOOKS OF ACCOUNTS OF THE COMPANY THEREFORE WHEN NO SUM HAS BEEN CREDITED ADDITION CANNOT BE MADE U/S 68 OF THE ACT .(PAGE 28 CIT(A)S ORDER). THE AMOUNT OF ISSUE OF BONUS SHARES DOES NOT REPRESENT ANY FRESH CREDIT BUT ONLY A TRANSFER ENTRY REPRESENTING CAPITALIZATION OF RESERVES AND SURPLUS AND IS NOT HIT BY SECTION 68 OF THE ACT .(PAGE 28 CIT(A)S ORDER) CASE LAWS RELIED UPON BY THE CIT(A) CIT V LOVELY EXPORTS [2008] 216 CTR 195 (SC) CIT V ORRISA CORPORATIOSN PVT LTD PVT LTD [(1986) 159 ITR 78 (SC)] CIT V OASIS HOSPITALITIES P. LTD [(2011) 333 ITR 119(DELHI)] CIT V PARAS COTTON CO [(2007) 288 ITR 211 (RAJ.)] CIT V KAMDHENU STEEL & ALLOYS LTD & OTHERS [(2012) 206 TAXMAN 254 (DELHI)] 54 CIT HAS MADE ANALYSIS OF THE JUDGMENT IN THE CASE OF NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) AND HAS REACHED A CONCLUSION THAT APPELLANT THROUGH VARIOUS DOCUMENTS SUBMITTED TO ESTABLISH ICG IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSED. (PAGE 26 CIT(A)S ORDER) 10. STARLIGHT CONSUMER ELECTRONICS PVT LTD. REVENUES APPEAL 2012-13 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM - RS. 32.25 CRORES OTHER LIABILITIES - RS RS. 30.18 CRORES TOTAL ADDITION - RS. 62.43 CRORES THE ASSESSEE FAILED TO DISCHARGE ITS ONUS. IN SUCH A CASE THE SOURCE AND NATURE OF TRANSACTION NEED TO BE PROVED BEYOND DOUBT .(PAGE 7 AOS ORDER) AS THE REPLIES RECEIVED SO LATE AFTER THE ASSESSEE WAS APPRISED ABOUT THE SAME THERE IS A POSSIBILITY THAT ASSESSEE ITSELF HAS SENT THE REPLIES IN RESPONSE TO NOTICE U/S 133(6) THEREFORE IT SHOWS THE IG AS DUBIOUS. (PAGE 4 AOS ORDER) BASIS THE INSPECTORS REPORT THERE IS NO SUCH COMPANY NO SIGNBOARD NEIGHBOR ALSO REVEALED THAT THEY ARE NOT AWARE ABOUT ANY SUCH COMPANY . INCOMPLETE REPLIES RECEIVED THAT TOO ONLY AFTER ASSESSEE WAS APPRISED ABOUT NON-COMPLIANCE TO NOTICE U/S 133(6) (PAG4 CIT(A)S ORDER) NO COMPLIANCE TO THE SUMMONS ISSUED TO THE DIRECTOR U/S 131 DATED FEBRUARY 26 2015. ASSESSEE OFFERED NO EXPLANATION AS TO WHY THE INVESTORS CHOSE TO MAKE INVESTMENT IN ASSESSEES COMPANY WHEN THERE IS NO SCOPE FOR MAKING AN EXIT OUT OF INVESTMENT. (PAFE 7 AOS ORDER). ASSESSEE COMPANY HAS NEITHER SHOWN REMARKABLE PERFORMANCE NOR HAS ANY STRONG ASSET BASE THEREFORE TRANSACTION CANNOT BE HELD AS GENUINE. (PAGE 7 AOS ORDER). MERELY THAT THE TRANSACTION CIT(A) HAS MADE ANALYSIS OF THE NET WORTH OF THE INVESTOR COMPANIES WHICH IS FAIR ENOUGH TO MAKE INVESTMENT . ALTHOUGH CIT(A) HAS NOT COMMENTED UPON THE SAME. (PAGE 31 TABLE CIT(A) ORDER) AO HAS NOT BROUGHT ANY ADVERSE MATERIAL TO REJECT THE EXPLANATIONS/ EVIDENCES FILED BY THE APPELLANT. IT IS NOT THE CASE OF AO THAT ANY PERSON HAS GIVEN ANY STATEMENT OR MADE ALLEGATION AGAINST THESE COMPANIES . THE REASONS GIVEN BY AO ARE VERY GENERIC AND NOT BACKED BY ANY CONCRETE EVIDENCE (PAGE 31/43 CIT(A)S ORDER) NO CASH DEPOSIT IN THE BANK ACCOUNTS OF INVESTOR COMPANIES FOR MAKING INVESTMENT IN THE ASSESSEE COMPANY (PAGE 31/32 CIT(A)S ORDER) THE APPELLANT HAS FURNISHED INCOME TAX RETURNS BS BANK STATEMENT OF SHAREHOLDERS AND SHARE APPLICATION MONEY AND THEIR SOURCE HAD BEEN SATISFACTORILY EXPLAINED (PAGE 46 CIT(A)S ORDER) ENTIRE AMOUNT RECEIVED THROUGH NORMAL BANKING CHANNELS CONFIRMATION FILED BY PARTIES NO PROOF OF EVIDENCE TO SUGGEST 55 WAS CONDUCTED THROUGH PROPER BANKING CHANNEL DOES NOT SUBSTANTIATE THE GENUINENESS OF TRANSACTION .(PAGE 6 AOS ORDER) SINCE THE PAYMENTS WERE TRANSFERRED TO OTHER COMPANIES AS AND WHEN THEY WERE RECEIVED THE CREDITWORTHINESS OF THE INVESTOR DOES NOT IN ANY WAY GET ESTABLISHED . THE BANK ACCOUNTS OF ALL THE INVESTORS ARE IN SAME BRANCH NO PROFIT MAKING APPARATUS NO BUSINESS. IT SEEMS IT IS JUST AN ACCOMMODATION ENTRY JUST TO EVADE TAX. (PAGE 5 AOS ORDER). AMOUNT HAS BEEN RECEIVED THROUGH PRIVATE PLACEMENT WHICH MEANS CONTRIBUTORS WERE PERSONALLY KNOWN TO ASSESSEE. SINCE THE EXISTENCE OF THE INVESTORS COULD NOT BE PROVED THERE IS NO QUESTION OF TAKING COGNIZANCE OF THE SUCH NON-EXISTENT PERSON MEANING THEREBY MONEY ACTUALLY BELONGED TO ASSESSEE ITSELF AND FRAUDULENTLY ROUTED THROUGH BANK ACCOUNT OF INVESTORS . (PAGE 6 AOS ORDER) REGARDING THE OTHER CURRENT LIABILITIES THE ASSESSEE HAS FAILED TO BRING THE DIRECTORS OF THE EIGHT COMPANIES FROM WHOM MONEY RECEIVED SHOWN AS OTHER LIABILITY TO EXPLAIN THE NATURE OF THE CURRENT LIABILITIES. (PAGE 12 AO ORDER) AS IT CAN BE SEEN FROM THE BS AND P&L ACCOUNT OF THE ASSESSEE THAT THESE ARE NOT TRADE LIABILITIES. (PAGE 12 AO ORDER) CASE LAWS RELIED UPON BY THE A.O DIVINE LEASING AND FINANCE LTD (DELHI HC) MC DOWELL & CO LTD 154 ITR 148 (SC) ANAND WOOLEN MILLS PVT LTD V CIT 174 ITR 477 (DELHI) CIT V SOPHIA FINANCE LTD (1994) 205 ITR 98 (DELHI) NOVA PROMOTERS &FINLEASE THAT AMOUNT ACTUALLY EMANATED FROM ASSESSEE COMPANY SHARES ALLOTTED FOR APPLICATION MONEY RECEIVED (PAGE 32/43 CIT(A) ORDER) ONUS CAST UPON THE APPELLANT WITH REGARD DUTIES ENJOINED BY VIRTUE OF CASH CREDIT STANDS FULFILLED AND DISCHARGED CANNOT BE SAID THAT APPELLANT FAILED TO DISCHARGE CREDITWORTHINESS AND GENUINENESS (PAGE 32/44 CIT(A)S ORDER) NO ADVERSE INFERENCE IS WARRANTED OR SUSTAINABLE (PAGE 32/44 CIT(A)S ORDER). THERE IS NO DENIAL AT ANY STAGE OF ASSESSMENT PROCEEDINGS BY ANY OF THE SUBSCRIBER OF SHARE CAPITAL OF HAVING DEPOSITED MONEY IN THE APPELLANT COMPANY (PAGE 43 CIT(A)S ORDER) THE APPELLANT HAS ESTABLISHED THE ICG OF THE TRANSACTION S.(PAGE 47 CIT(A)S ORDER) CIT HAS MADE ANALYSIS OF THE JUDGMENT IN THE CASE OF NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) AND HAS REACHED A CONCLUSION THAT APPELLANT THROUGH VARIOUS DOCUMENTS SUBMITTED TO ESTABLISH ICG IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSED. (PAGE XX CIT(A)S ORDER) CASE LAWS RELIED UPON BY THE CIT(A) MOD CREATION PVT LTD V ITO [(2013) 354 ITR 282 (DELHI)] CIT V KAMDHENU STEEL & ALLOYS LTD & OTHERS [(2012) 206 TAXMAN 254 (DELHI)] CIT V GANGESHWARI METALS P. LTD ITO V NEELKANTH FINBUILD ITA NO. 2821/DEL/2009 56 (P) LTD (342 ITR 169 (DEL)) CIT V NIPUN BUILDERS & DEVELOPERS [2013] 350 ITR 407 (DEL) CIT V N.R. PORTFOLIO PVT LTD (ITA NO. 1018 & 1019 OF 2011) MITTAL BELTING AND MACHINERY STORS V CIT 253 ITR 341 CIT V KARIARY TRADING CO LTD (1998) 232 ITR 820 SUMATIDAYAL V CIT 214 ITR 801 CIT V L. N. DALMIA 207 ITR 89 SUNIL SIDHARTHA V CIT 156 ITR 507 CIT V BIJU PATNAIK 160 ITR 674 (SC) SHANKAR INDUSTRIES V CIT 114 ITR 689 (CAL) DHANLAKSHMI STEEL RE-ROLLING MILLS V CIT 228 ITR 780 (AP) MALABAR AGRICULTURAL CO LTD V CIT 229 ITR 548 (KER) CIT V PRECISION FINANCE P. LTD 208 ITR 465 (CAL) KNC CHANDRASHEKHAR V ACIT 66 TTJ 355 (ITAT BANGALORE) CIT V UNITED COMMERCIAL AND INDUSTRIAL CO. PVT LTD 187 ITR 596 (CAL) CIT V DURGA PRASAD MORE (1971) 82 ITR 540 (SC) ITO V K. JAYARAMAN (1987) 168 ITR 757 (MAD.) CIT V NEELKANTHAISPAT UDYOG ITO V NC CABLES ITA NO. 4122/DEL/2009 (ITAT DELHI) CIT V OASIS HOSPITALITIES P. LTD [(2011) 333 ITR 119 (DELHI)] ITO V RAKAM MONEY MATTERS P LTD 2821/DEL/2011 ACIT V KISCO CASTINGS PVT LTD 34 TAXMANN.COM 37 CIT V FAIR FIVEST LTD [2014] 44 TAXMANN.COM 356 (DELHI) CIT V EXPO GLOBE INDIA LTD [2014] (51TAXMANN.COM 208)(DELHI HC) CIT V LOVELY EXPORTS [2008] 216 CTR 195 (SC) CIT(A) HAS DIFFERENTIATED THE FOLLOWING JUDGMENTS : NOVA PROMOTERS &FINLEASE P LTD MC DOWELL & CO SUMATIDAYAL LN DALMIA SUNIL SIDDHARTHA BHAI V CIT CIT DURGA PRASAD MORE ITO V K JAYARAMAN CIT V DIVINE LEASING FINANCE ANAND WOOLEN MILLS PVT LTD V CIT CIT V SOPHIA FINANCE LTD CIT V KORLAY TRADING CO MITTAL BELTING AND MACHINERY STORES CIT V BIJU PATNAIL ROSHAN DI HATTI V CIT SHANKAR INDUSTIES V CIT MALABAR AGRICULTURAL CO LTD V CIT CIT V PRECISION FINANCE PVT LTD CIT V UNITED COMMERCIAL & INDUSTRIAL CO LTD CIT V NIPUN BUILDERS CIT V NR PORTFOLIO 11. STYLISH CONSTRUCTIO N PVT LTD REVENUES APPEAL 2012-13 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM - RS. 30 CRORES THE ASSESSEE FAILED TO DISCHARGE ITS ONUS . IN SUCH A CASE THE SOURCE AND NATURE OF TRANSACTION NEED TO BE PROVED BEYOND DOUBT.(PAGE 6/10 AOS ORDER) THE APPELLANT HAS ESTABLISHED THE ICG OF THE TRANSACTIONS. THE AO DID NOT BRING ANY FINDING ON RECORD TO REJECT THE EXPLANATIONS/ EVIDENCES SUBMITTED BY APPELLANT NEITHER ANY 57 OTHER LIABILITIES - RS 31.60 CRORES DISSALLOWA NCE U/S 14A R.W. RULE 8D - RS. 23 32 813 [RS. 5 LACS SUSTAINED BY THE CIT(A)] THE REPLIES TO NOTICE U/S 133(6) WERE RECEIVED AFTER THE FACT THEY BEING UN- COMPLIED FOR A PERIOD OF 10-15 DAYS AFTER THEY WERE ISSUED CREATES A DOUBT ABOUT THEIR GENUINENESS. (PAGE 3 AOS ORDER). THE REPLIES WERE RECEIVED AFTER THE FACT OF THEIR NON- COMPLIANCE WAS MADE KNOWN TO THE AR.(PAGE 3 AOS ORDER. THERE COULD BE A POSSIBILITY THAT ASSESSEE HIMSELF HAS SENT THE REPLIES AS THE REPLIES RECEIVED THAT TOO ONLY AFTER ASSESSEE WAS INFORMED ABOUT SAME. THIS SHOWS IG AS DUBIOUS (PAGE 3 AOS ORDER) INSPECTORS REPORT REVEAL THAT NONE OF THE COMPANIES EXISTED AT GIVEN ADDRESS . IT IS A RESIDENTIAL SOCIETY. (PAG3 AOS ORDER). IDENTITY COULD NOT BE PROVED SINCE INVESTORS DID NOT EXIST AT THE GIVEN ADDRESS THEREFORE IT IS ASSESSEES OWN MONEY(PARA (A) PAGE 4/5 AOS ORDER) NO EXPLANATION OFFERED AS TO WHY THESE COMPANIES AGREED TO INVEST IN ASSESSEES COMPANY WHEN THERE IS NO SCOPE FOR MAKING AN EXIT OUT OF THE INVESTMENT (PAGE 5 AOS ORDER). THE ASSESSEE COMPANY NEITHER HAS NOT SHOWN ANY REMARKABLE PERFORMANCE NOR HAS ANY ASSETS THEREFORE TRANSACTION CANNOT BE GENUINE (PAGE 6 AOS ORDER) ASSESSEE FAILED TO BRING DIRECTORS OF THE INVESTORS (PAGE 10 AOS ORDER). THE SUBSCRIBERS DID NOT HAVE CREDITWORTHINESS AS MONEY IN THEIR BANK ACCOUNTS SELDOM RESTS FOR A DAY AND FINDS ITS DESTINATION NO PROFIT MAKING APPARATUS NO PERSON HAS GIVEN ANY STATEMENT NOR MADE ANY ALLEGATION AGAINST THE APPELLANT COMPANY . (PAGE 33 CIT(A)S ORDER). REASONS GIVEN BY AO ARE GENERIC IN NATURE AND NOT BACKED BY CONCRETE EVIDENCE (PAGE 33 CIT(A)S ORDER) ENTIRE AMOUNT HAS BEEN THROUGH NORMAL BANKING CHANNELS HAS NOT BEEN DISPUTED REPUDIATED OR CHALLENGED IN ANY MANNER(PAGE 33 CIT(A)S ORDER). PARTIES INVOLVED HAVE CONFIRMED OF HAVING MADE THEIR DEPOSITS IN THE APPELLANT COMPANY . (PAGE 33 CIT(A)S ORDER). NO EVIDENCE TO PROVE THAT MONEY ACTUALLY EMANATED FROM APPELLANT COMPANY. ANY CONCLUSION CAN BE SUSTAINED ONLY IF BACKED BY CONCRETE EVIDENCE. (PAGE 33/34/43/44 CIT(A)S ORDER) APPELLANT HAS ALLOTTED SHARES FOR SHARE APPLICATION MONEY RECEIVED BY IT (PAGE 34 CIT(A)S ORDER). CIT(A) QUOTED THAT THE LD. AO HAS RELIED UPON THE JUDGMENT OF DIVINE LEASING BUT FAILED TO BRING FORTH ON RECORD ANY POSITIVE EVIDENCE THAT SHAREHOLDERS WERE EITHER BENAMIDARS/ FICTITIOUS. (PAGE 40 CIT(A)S ORDER) THE JUDGMENT OF STELLAR INVESTMENT CLEARLY LAYS DOWN THAT THE PROVISION OF SECTION 68 WOULD BE APPLICABLE ONLY WHEN SHARES HAVE BEEN ISSUED IN THE NAME OF NON-EXISTING PERSONS WHICH IS NOT THE SITUATION IN THE INSTANT CASE (PAGE 40 CIT(A)S ORDER) DOCUMENTS SUBMITTED ESTABLISH THAT MONEY CAME FROM DEPOSITORS ACCOUNT AND NOWHERE CONNECTED WITH APPELLANT COMPANY (PAGE 45 CIT(A)S ORDER). NO CASH 58 BUSINESS ACTIVITY (PAGE 4 AOS ORDER) MERELY THAT THE TRANSACTION WAS CONDUCTED THROUGH PROPER BANKING CHANNEL DOES NOT SUBSTANTIATE THE GENUINENESS OF TRANSACTION. SINCE THE PAYMENTS WERE TRANSFERRED TO OTHER COMPANIES AS AND WHEN THEY WERE RECEIVED THE CREDITWORTHINESS OF THE INVESTOR DOES NOT IN ANY WAY GET ESTABLISHED. THE ASSESSEE COMPANY HAS NOT EXPLAINED THE NATURE OF OTHER LIABILITIES. I T IS SEEN THAT ABOVE LIABILITIES ARE NOT TRADE LIABILITIES. THE FACTS IN REGARD TO OTHER LIABILITIES ARE SAME AS THAT OF SHARE CAPITAL WHICH HAS BEEN DISCUSSED AT LENGTH AND IN VIEW OF CASE LAWS DISCUSSED ABOVE (PAGE 12 AOS ORDER) REGARDING SECTION 14A THE ASSESSEE HAS NOT FILED CALCULATION SHEET FOR DISALLOWANCE MADE ALONG WITH COMPUTATION OF INCOME . IN VIEW OF PROVISIONS OF SECTION 14A R.W.R. 8D DISALLOWANCE IS RS. 25 56 473/-. THEREFORE BALANCE IS ADDED TO INCOME OF ASSESSEE. (PAGE 13 AOS ORDER) CASE LAWS RELIED UPON BY THE A.O CIT V DIVINE DIVINE LEASING FINANCE LTD CIT V MCDOWELL & CO 154 ITR 148 M/S ANAND WOOLEN MILLS V CIT 174 ITR 477 (DELHI) NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) CIT V NIPUN BUILDERS & DEVELOPERS [2013] 350 ITR 407 (DEL) CIT V N.R. PORTFOLIO PVT LTD (ITA NO. 1018 & 1019 OF 2011) MITTAL BELTING AND DEPOSITS INTO BANK ACCOUNTS OF THE INVESTORS FOR PURCHASE OF SHARES (PAGE 33 CIT(A)S ORDER). NO CIRCUMSTANCES TO SUGGEST THAT TRANSACTIONS ARE NOT GENUINE AND THAT ONUS CAST UPON IT HAS NOT BEEN DISCHARGED. (PAGE 30 CIT(A)S ORDER). CIT(A) HAS MADE ANALYSIS OF THE CREDITWORTHINESS OF INVESTORS. NO COMMENTS MADE BUT FIGURES SHOWING HANDSOME CREDITWORTHINESS (PAGE 33 CIT(A)S ORDER) THE PROVISIONS OF SECTION 68 WOULD BE APPLICABLE ONLY WHEN SHARES HAVE BEEN ISSUED IN THE NAME OF NON-EXISTING PERSON WHICH IS NOT THE SITUATION IN THE INSTANT CASE . NO ADVERSE INFERENCE DRAWN BY LD. AO WITH REFERENCE TO FUNDS RECEIVED BY APPELLANT COMPANY. (PAGE 33 CITR(A)S ORDER). NO DENIAL BY ANY OF THE SUBSCRIBERS OF THE APPELLANT COMPANY'S SHARE CAPITAL THAT THEY DID NOT INVEST THEIR MONEY INTO IT. THE AO HAS FAILED TO BRING ANY CREDIBLE EVIDENCE ON RECORD TO NEUTRALIZE THE EVIDENCES FILED BY THE APPELLANT. THEREFORE ADDITION CANNOT BE SUSTAINED. (PAGE 47 CIT(A) ORDER). THE APPELLANT HAS ESTABLISHED THE ICG OF THE TRANSACTION. REGARDING ADDITION U/S 14A THE APPELLANT COMPANY FILED ITS RETURN AFTER MAKING DISALLOWANCE U/S 14A ON ACCOUNT OF EXPENSES ATTRIBUTABLE TO EARNING EXEMPT INCOME. (PAGE 56 CIT(A)S ORDER). CIT(A) BASIS THE CASE LAWS RESTRICTED THE DISALLOWANCE TO THE AMOUNT OF RS 5 00 000 FOR THE SAKE OF SUBSTANTIVE JUSTICE AS IT CANNOT EXCEED THE AMOUNT OF EXEMPT INCOME WHICH IN THE INSTANT CASE IS RS. 9 94 717 AND 59 MACHINERY STORES V CIT 253 ITR 341 CIT V KARIARY TRADING CO LTD (1998) 232 ITR 820 SUMATIDAYAL V CIT 214 ITR 801 CIT V L. N. DALMIA 207 ITR 89 SUNIL SIDHARATHA V CIT 156 ITR 507 (SC) CIT V BIJU PATNAIK 160 ITR 674 (SC) ROSHAN DI HATTI V CIT 107 ITR 938 (SC) SHANKAR INDUSTRIES V CIT 114 ITR 689 (CAL.) DHANLAKSHMI STEEL RE- ROLLING MILLS V CIT 228 ITR 780 (AP) MALABAR AGRICULTURAL CO. V CIT 229 ITR 548 (KER) CIT V PRECISION FINANCE LTD 208 ITR 465 (CAL) K. N. C. CHANDRASHEKHAR V ACIT 66 TTJ 355 (ITAT BANGALORE) CIT V UNITED COMMERCIAL AND INDUSTRIAL COMPANY PVT. LTD. 187 ITR 596 (CAL.) CIT V DURGA PRASAD MORE (1971) 82 ITR 540 (SC) ITO V K. JAYARAMAN (MAD.) (1987) 168 ITR 757 DELETING THE ADDITION OF RS. 23 32 813 MADE BY THE AO . CASE LAWS RELIED UPON BY THE CIT(A) MOD CREATION PVT LTD V ITO [(2013) 354 ITR 282 (DELHI)] CIT V KAMDHENU STEEL & ALLOYS LTD & OTHERS [(2012) 206 TAXMAN 254 (DELHI)] CIT V OASIS HOSPITALITIES P. LTD [(2011) 333 ITR 119(DELHI)] ITO V RAKAM MONEY MATTERS P LTD 2821/DEL/2011 ACIT V KISCO CASTINGS PVT LTD 34 TAXMANN.COM 37 CIT V FIVEST LTD [2014] 44 TAXMANN.COM 356 (DELHI) CIT V GANGESHWARI METALS PVT LTD (2013) (30TAXMANN.COM328) CIT V LOVELY EXPORTS [2008] 216 CTR 195 (SC) ITO V NEELKANTH FINBUILD LTD. ITA NO. 2821/ DEL/ 2009 ITO V NC CABLES LTD. ITA NO. 4122/DEL/2009 ITAT DELHI CIT V EXPO GLOBE INDIA LTD [2014] 51 TAXMANN.COM 208 (DELHI HC) DIFFERENTIATED ROSHAN DI HATTI MITTAL BELTING AND MACHINERY STORES SOPHIA FINANCE LTD MCDOWELL & CO LTD.NOVA PROMOTERS AZADI BACHAOANDOLAN(SC) VODAFONE INTERNATIONA L HOLDINGS BV V UNION OF INDIA(SC SUMATIDAYA V CIT LCIT V LN DALMIA SUNIL SIDHARTHA BHAI V CIT CIT V DURGA PRASAD MORE ITO V K JAYARAMAN (PAGE 36 TO 43) CIT(A) FOR DECIDING THE GROUND RELATED TO DISALLOWANCE U/S 14A HAS RELIED UPON THE CASE LAWS: CIT V HOLCIM INDIA PVT LTD [(2015) 57 TAXMANN.COM 28 (DELHI)] CIT V LAKHANI MARKETING [(2014) 49 TAXMANN.COM 257 (P&H)] CIT V SHIVAM MOTORS PVT LTD [(2015) 55 60 TAXMANN.COM 262 (ALLAHABAD) 12. SUKHNA REAL ESTATE PVT LTD REVENUES APPEAL 2012-13 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM - RS. RS. 80.634 CRORES THE ASSESSEE FAILED TO DISCHARGE ITS ONUS . IN SUCH A CASE THE SOURCE AND NATURE OF TRANSACTION NEED TO BE PROVED BEYOND DOUBT. (PAGE 7 AOS ORDER). BASIS THE INSPECTORS REPORT NONE OF THE PARTIES (INVESTOR) EXISTED AT THE GIVEN ADDRESS ( PAGE 2 AOS ORDER) NOTICE U/S 133(6) RETURNED UNDELIVERED WITH REMARKS NONE EXISTED(PAGE 3 AOS ORDER) VERIFICATION OF BANK STATEMENT REVEALED THAT COMPANIES RECEIVED FUNDS BACK TO BACK (PAGE 3 AOS ORDER) AFTER FEW DAYS OF LOCAL ENQUIRY CONFIRMATION OF ALL PARTIES RECEIVED THROUGH SPEED POST IN THE OFFICE OF AO .(PAGE 2 AOS ORDER) SUMMONS U/S 131 REMAIN UN-COMPLIED (PAGE 3 AOS ORDER) ASSESSEE OFFERED NO EXPLANATION ABOUT AS TO WHY THESE INVESTORS AGREED TO INVEST WHEN THERE IS NO SCOPE FOR MAKING AN EXIT OUT OF INVESTMENT. (PAGE 5- AOS ORDER) ALSO NOT EXPLAINED THAT WHY SHARES WERE NOT ALLOTTED AND SHARE APPLICATION MONEY RETURNED (PAGE 5 AOS ORDER) THE ENTIRE APPROACH OF ASSESSEE FOR SHYING AWAY FROM FILING REQUISITE DOCUMENTS AND THE NECESSARY DETAILS STRONGLY SUGGESTS THAT ENTRIES ARE ACCOMMODATION ENTRIES ((PAGE 5- AOS ORDER) INTENT OF ASSESSEE TO AVOID FURNISHING THE DETAILS AND THEN TAKE SPACIOUS PLEA THAT ADDITION MADE WITHOUT MAKING DIRECT ENQUIRIES FROM PERSONS WHO ADVANCED MONEY. (PAGE 6 AOS THE APPELLANT HAS ESTABLISHED THE I CG OF THE TRANSACTION. T HE AO DID NOT BRING ANY FINDING ON RECORD WHICH WOULD INDICATE THE SHAREHOLDERS WERE EITHER BENAMIDAR/ FICTITIOUS .(PAGE 29/39 CIT(A)S ORDER) NOT THE CASE OF AO THAT ANY PERSON HAS GIVEN ANY STATEMENT OR MADE ANY ALLEGATION AGAINST THESE COMPANIES (PAGE 29 CIT(A) ORDER). REASONS RECORDED BY AO ARE GENERIC IN NATURE AND NOT BACKED BY CONCRETE EVIDENCES (PAGE 29 CIT(A)S ORDER). NO CASH DEPOSITS IN THE BANK ACCOUNTS OF INVESTORS (29/30 CIT(A)S ORDER). IN THE INSTANT CASE THERE ARE NO CIRCUMSTANCES EVEN TO SUGGEST THAT TRANSACTIONS ARE NOT GENUINE AND THAT THE ONUS CAST UPON IT HAS NOT BEEN DISCHARGED. (PAGE 27 CIT(A)S ORDER). INVESTOR COMPANIES ARE ASSESSED TO TAX (PAGE 27 CIT(A)S ORDER) THE PROVISIONS OF SECTION 68 WOULD BE APPLICABLE ONLY WHEN SHARES HAVE BEEN ISSUED IN THE NAME OF NON-EXISTING PERSON WHICH IS NOT THE SITUATION IN THE INSTANT CASE. NO DENIAL BY ANY OF THE SUBSCRIBERS OF THE APPELLANT COMPANY'S SHARE CAPITAL THAT THEY DID NOT INVEST THEIR MONEY INTO I T. THE AO DID NOT BRING ANY DOCUMENTARY EVIDENCE TO 61 ORDER). SINCE THE ASSESSEE WAS WELL AWARE OF THE FACT OF BOGUS CREDITS IN ITS BOOKS IT HAS CHOSEN NOT TO SUBJECT ITSELF INVESTIGATION/ ENQUIRY CONDUCTED BY THE DEPARTMENT . MERELY THAT THE TRANSACTION WAS CONDUCTED THROUGH PROPER BANKING CHANNEL DOES NOT SUBSTANTIATE THE GENUINENESS OF TRANSACTION. SINCE THE PAYMENTS WERE TRANSFERRED TO OTHER COMPANIES AS AND WHEN THEY WERE RECEIVED THE CREDITWORTHINESS OF THE INVESTOR DOES NOT IN ANY WAY GETS ESTABLISHED. THE ASSESSEE HAS FAILED TO PRODUCE THE DIRECTORS OF THE INVESTOR COMPANIES. CASE LAWS RELIED UPON BY THE A.O CIT V DIVINE DIVINELEASING FINANCE LTD NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) CIT V NIPUN BUILDERS & DEVELOPERS [2013] 350 ITR 407 (DEL) CIT V N.R. PORTFOLIO PVT LTD (ITA NO. 1018 & 1019 OF 2011) KALE KHAN MOHAMMAD HANIF V CIT [1963] 50 ITR 1 (SC) CIT V OASIS HOSPITALITIES 333 ITR 119 (DELHI) 2011 ROSHAN DI HATTI [1977] 107 ITR (SC) CIT V KARIARY TRADING CO LTD (1998) 232 ITR 820 SUMATIDAYAL V CIT 214 ITR 801 CIT V R. N. DALMIA 207 ITR 89 ESTABLISH THE LIVE LINK/NEXUS BETWEEN THE MATERIAL AVAILABLE WITH THE DEPARTMENT AND THE AMOUNT RECEIVED BY THE APPELLANT. ENTIRE AMOUNT RECEIVED THROUGH NORMAL BANKING CHANNELS (PAGE 30 CIT(A)S ORDER). PARTIES INVOLVED HAVE CONFIRMED OF HAVING DEPOSITED THEIR MONEY IN THE APPELLANT COMPANY (PAGE 30 CIT(A)S ORDER) NO IOTA OF EVIDENCE TO PROVE THAT MONEY EMANATED FROM COFFERS OF APPELLANT COMPANY . ANY CONCLUSION CAN BE SUSTAINED ONLY IF BACKED BY CONCRETE EVIDENCE (PAGE 30 CIT(A)S ORDER) PROVISIONS OF SECTION 68 NOT APPLICABLE IN CASE OF BONUS SHARES (PAGE 30 CIT(A)S ORDER). THE SHARES ISSUED AS BONUS SHARES HAVE NOT BROUGHT ANY INCOME WHICH IS NOTHING BUT THE CREDIT IN THE BOOKS OF ACCOUNTS OF THE COMPANY THEREFORE WHEN NO SUM HAS BEEN CREDITED ADDITION CANNOT BE MADE U/S 68 OF THE ACT.THE AMOUNT OF ISSUE OF BONUS SHARES DOES NOT REPRESENT ANY FRESH CREDIT BUT ONLY A TRANSFER ENTRY REPRESENTING CAPITALIZATION OF RESERVES AND SURPLUS AND IS NOT HIT BY SECTION 68 OF THE ACT. DIFFERENTIATED ROSHAN DI HATTI MITTAL BELTING AND MACHINERY STORES SOPHIA FINANCE LTD MCDOWELL & CO LTD CASE LAWS RELIED UPON BY THE CIT(A) MOD CREATIOSN PVT LTD V ITO [(2013) 354 ITR 282 (DELHI)] CIT V KAMDHENU STEEL & 62 ALLOYS LTD & OTHERS [(2012) 206 TAXMAN 254 (DELHI)] CIT V OASIS HOSPITALITIES P. LTD [(2011) 333 ITR 119 (DELHI)] ITO V RAKAM MONEY MATTERS P LTD 2821/DEL/2011 ACIT V KISCO CASTINGS PVT LTD 34 TAXMANN.COM 37 CIT V FIVEST LTD [2014] 44 TAXMANN.COM 356 (DELHI) CIT V OASIS HOSPITALITIES PVT LTD (333 ITR 119 DELHI) CIT V LOVELY EXPORTS [2008] 216 CTR 195 (SC) 13. SUKHNA STEEL PVT LTD REVENUES APPEAL 2012-13 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM- RS. 26.168 CRORES (INCLUDES RS. 16 80 000 ON ACCOUNT OF ISSUE OF BONUS SHARES) AS PER INSPECTORS REPORT NO COMPANY EXISTED AT SUCH ADDRESS NO DIRECTORS WERE FOUND PREMISES DONT BELONG TO INVESTOR COMPANY (PAGE 2 TABLE AOS ORDER) VERIFICATION OF BANK STATEMENT REVEALED THAT INVESTOR COMPANIES RECEIVED FUNDS BACK TO BACK ARRANGEMENT. CREDITWORTHINESS COULD NOT BE FOUND SATISFACTORY WITH RESPECT TO HUGE AMOUNT OF FUNDS ARRANGEMENT (PAGE 2 AOS ORDER) ASSESSEE FAILED TO EXPLAIN WHY THESE COMPANIES AGREED TO INVEST IN UNLISTED COMPANIES WHEN THERE IS NO SCOPE FOR MAKING AN EXIT OUT OF INVESTMENT (PAGE 6 AOS ORDER) THE ASSESSEE INTENTIONALLY AVOIDED FURNISHING DOCUMENTS TO TAKE A PLEA THAT ADDITION HAS MADE U/S 68 WITHOUT MAKING INQUIRIES. A CLEAR PERIOD OF TWO MONTHS ALLOWED TO ASSESSEE TO FURNISH DOCUMENTS. IT SUGGESTED THAT THESE ARE NOTHING BUT ACCOMMODATION ENTRIES (PAGE 2 AOS ORDER ). MERELY PAN AND ADDRESS WERE FURNISHED BUT NO ONE WAS FOUND AT THE ADDRESS. BANK STATEMENT NOT CIT(A) HAS MADE ANALYSIS OF CREDITWORTHINESS FOR MAKING INVESTMENT (PAGE 29/30 TABLE CIT(A)S ORDER) NO ADVERSE MATERIAL BROUGHT BY AO TO REJECT THE EXPLANATIONS AND EVIDENCES (PAGE 30 CIT(A)S ORDER). NEITHER ANY PERSON HAS GIVEN ANY STATEMENT NOR MADE AN ALLEGATION AGAINST THE COMPANY (PAGE 30 CIT(A)S ORDER). NO CASH DEPOSITS IN THE BANK ACCOUNTS OF INVESTORS (PAGE 30 CIT(A)S ORDER). REASONS GIVEN BY AO ARE GENERIC AND NOT BACKED BY ANY CONCRETE EVIDENCE (PAGE 30 CIT(A)S ORDER) ENTIRE AMOUNT RECEIVED THROUGH BANKING CHANNE LS INVESTORS CONFIRMED NO EVIDENCE TO PROVE FUNDS ACTUALLY EMANATED FROM COFFERS OF APPELLANT COMPANY NO CONCRETE EVIDENCE AGAINST APPELLANT COMPANY (PAGE 30/31 CIT(A)S ORDER) SECTION 68 NOT APPLICABLE ON BONUS ISSUE IT DOES NOT REPRESENT FRESH CREDIT (PAGE 31 CIT(A)S ORDER). THE AMOUNT OF ISSUE OF 63 SUBMITTED PROPERLY SHOWING AVAILABLE BALANCE. NO EXPLANATION SUBMITTED BY ASSESSEE TO EXPLAIN FUTURE CASH FLOW BASIS OF SHARE PREMIUM CALCULATION AND NO. OF SHARES TO BE ISSUED (PAGE 8 TABLE AOS ORDER) THE ASSESSEE HAS FAILED TO PRODUCE THE DIRECTORS OF THE INVESTOR COMPANIES. THE ASSESSEE FAILED TO DISCHARGE ITS ONUS. IN SUCH A CASE THE SOURCE AND NATURE OF TRANSACTION NEED TO BE PROVED BEYOND DOUBT. (PAGSE 7 AOS ORDER). CASE LAWS RELIED UPON BY THE A.O NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) CIT V NIPUN BUILDERS & DEVELOPERS [2013] 350 ITR 407 (DEL) CIT V N.R. PORTFOLIO PVT LTD (ITA NO. 1018 & 1019 OF 2011) KALE KHAN MOHAMMAD HANIF V CIT [1963] 50 ITR 1 (SC) CIT V OASIS HOSPITALITIES 333 ITR 119 (DELHI) 2011 ROSHAN DI HATTI [1977] 107 ITR (SC) CIT V KARIARY TRADING CO LTD (1998) 232 ITR 820 SUMATIDAYAL V CIT 214 ITR 801 CIT V R. N. DALMIA 207 ITR 89 BONUS SHARES DOES NOT REPRESENT ANY FRESH CREDIT BUT ONLY A TRANSFER ENTRY REPRESENTING CAPITALIZATION OF RESERVES AND SURPLUS AND IS NOT HIT BY SECTION 68 OF THE ACT.(PAGE 42 CIT(A)S ORDER) THE APPELLANT HAS ESTABLISHED THE ICG OF THE TRANSACTIONS .(PAGE 41 CIT(A)S ORDER) CASE LAWS RELIED UPON BY THE CIT(A) MOD CREATION PVT LTD V ITO [(2013) 354 ITR 282 (DELHI)] CIT V KAMDHENU STEEL & ALLOYS LTD & OTHERS [(2012) 206 TAXMAN 254 (DELHI)] CIT V GANGESHWARI METALS PVT LTD (2013) 30 TAXMANN.COM 328 CIT V OASIS HOSPITALITIES P. LTD [(2011) 333 ITR 119 (DELHI)] ITO V NC CABLES LTD. ITA NO. 4122/DEL/2209 ITO V RAKAM MONEY MATTERS P LTD 2821/DEL/2011 ACIT V KISCO CASTINGS PVT LTD 34 TAXMANN.COM 37 CIT V FAIR FINVEST LTD [2014] 44 TAXMANN.COM 356 (DELHI) CIT V OASIS HOSPITALITIES PVT LTD (333 ITR 119 DELHI) CIT V LOVELY EXPORTS [2008] 216 CTR 195 (SC) CIT V EXPO GLOBE INDIA LTD. [2014] 51 TAXMANN.COM 208 (DELHI) DIFFERENTIATED THE FOLLOWING JUDGMENTS: CIT V NOVA PROMOTERS &FINLEASE (P) LTD [(2012) 342 ITR 169 (DELHI)] ROSHAN DI HATTI V CIT [(1977) 107 ITR 938 (SC)] CIT V NIPUN BUILDERS & DEVELOPERS [(2013) 350 ITR 407 (DEL)] 14. SUNLIGHT TOUR & 2012-13 SHARE CAPITAL/ AS PER INSPECTORS REPORT NONE OF THE PARTIES EXISTED APPELLANT HAS DISCHARGED ONUS U/S 68 64 TRAVELS PVT LTD REVENUES APPEAL SHARE PREMIUM RS. 52.0168 CRORES (SC & PREMIUM RS. 40 CRORES AND BONUS SHARES RS. 12 01 68 0 00) AT THE GIVEN ADDRESS . (PAGE 2- AOS ORDER). SUMMONS ISSUED TO PARTIES U/S 131 REMAINED UNCOMPLIED . UPON VERIFICATION OF BANK STATEMENT OF PARTIES IT WAS FOUND THAT THE INVESTOR COMPANIES HAD RECEIVED FUNDS AND TRANSFERRED BACK TO BACK . FROM THE FINANCIAL STATEMENTS CREDITWORTHINESS OF PARTIES COULD NOT BE FOUND SATISFACTORY WRT HUGE AMOUNTS OF FUNDS MADE AVALIABLE TO THE ASSESSEE. DESPITE BEING MANY OPPORTUNITIES PROVIDED TO ASSESSEE NO COMPLIANCE TO SCN ISSUED. NO EXPLANATION BY THE ASSESSEE AS TO WHY THESE PARTIES WHICH ARE RELATED TO THE ASSESSEE AGREED TO INVEST IN ASSESSEE WHICH IS UNLISTED AND THUS THERE IS NO SCOPE TO EXIT OUT OF THE INVESTMENT. PERSON SHOULD HAVE SOME SIGN OF IDENTIFICATION OTHER THAN MERELY ON PAPER. THESE SIGNS COULD BE PLACE OF WORK STAFF MEMBERS ACTUAL TRANSACTION RECOGNITION IN EYE OF PUBLIC SIGN BOARD ETC. ACTUAL IDENTITY AND BUSINESS DOES NOT GET PROVED BY THESE PASSIVE DOCUMENTS WHEN INFACT NO ACTUAL OR PASSIVE BUSINESS IS BEINGCARRIED ON. ASSESSEE FAILED TO PRODUCE PERSON TO VERIFY CLAIM FAILED TO PROVE NATURE AND SOURCE OF TRANSACTION. THE ASSESSEE FAILED TO DISCHARGE ITS ONUS. IN SUCH A CASE THE SOURCE AND NATURE OF TRANSACTION NEED TO BE PROVED BEYOND DOUBT. NO ADVERSE INFERENCE DRAWN BY AO IN CASE OF INVESTOR COMPANIES WITH REFERENCE TO FUNDS RECEIVED BY APPELLANT COMPANY AO HAS NOT BROUGHT ON RECORD ANY ADVERSE MATERIAL TO REJECT THE EXPLANATIONS AND EVIDENCES SUBMITTED BY THE APPELLANT. NOT THE CASE OF THE AO THAT ANY PERSON HAS GIVEN ANY STATEMENT OR MADE ALLEGATIONS AGAINST THE COMPANY. THERE IS NO CASH DEPOSITS IN THE BANK ACCOUNTS OF THE PARTIES FROM WHOM SHARE CAPITAL/ PREMIUM HAS BEEN RECEIVED. ENTIRE AMOUNT RECEIVED THROUGH BANKING CHANNELS DEPOSITORS HAVE CONFIRMED OF HAVING DEPOSITED MONEY IN THE COMPANY NO EVIDENCE THAT FUNDS RECEIVED EMANATED FROM COFFERS OF THE ASSESSEE . ASSESSEE HAS ALLOTTED SHARES FOR THE SHARE APPLICATION MONEY RECEIVED. WITH REGARD TO BONUS SHARES THE PROVISIONS OF SECTION 68 ARE NOT APPLICABLE SINCE THE AMOUNT IN QUESTION DOES NOT REPRESENT FRESH CREDIT IN THE BOOKS OF ACCOUNT. ASSESSEE ESTABLISHED ICG ADDITION WRT SHARE CAPITAL AND SHARE PREMIUM AND BONUS ISSUE DELETED. CIT(A) HAS DIFFERENTIATED THE FOLLOWING CASE LAWS: A. CIT VS. NOVA PROMOTERS PAGE 31 B. ROSHAN DI HATTI (SC) -PG 32 C. CIT VS. NIPUN BUILDERS & DEVELOPERS CIT(A) HAS RELIED UPON THE FOLLOWING CASE LAWS: M/S. MOD CREATIONS PVT. LTD. V ITO 354 ITR 282 (DEL) CIT VS. KAMDHENU STEEL & ALLOYS LTD. 65 CASE LAWS RELIED UPON BY THE A.O NIPUN BUILDERS & DEVELOPERS NOVA PROMOTERS &FINLEASE KAMAL MOTORS V CIT 131 TAXMAN 155 (RAJ) CIT V OASIS HOSPITALITIES 333 ITR 119 (DELHI) 2011 CIT V RUBY TRADERS &EXPORTERS LTD. (2004) 263 ITR 300 (CAL.) M/S RAJSHREE SYNTHETICS (P) LTD V CIT (2003) 131 TAXMANN 391 (RAJ) CIT V SOPHIA FINANCE LTD (DEL) 206 TAXMANN 254 (DEL) CIT VS. GANGESHWARI METALS PVT. LTD. (2013) 30 TAXMAN.COM 328 CIT VS. OASIS HOSPITALITIES 333 ITR 119 (2011) DEL ITO VS. NEELKANTH FINBUILD LTD. ITO VS. NC CABLES LTD. (DEL ITAT) ITO VS. RAKAM MONEY MATTERS P. LTD. (DEL ITAT) ACIT VS. KISCO CASTINGS PVT. LTD. (CHD) CIT VS. FAIR FINVEST PVT. LTD. (DEL HC) CIT VS. EXPO GLOBE INDIA LTD. (DEL HC) CIT VS. LOVELY EXPORTS (SC) 15. SUPERSTAR AGENCY PVT LTD REVENUES APPEAL 2012-13 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM RS. 42.25 CRORES (SC= 3.85 CR SHARE PREMIUM = 38.40 CR) OUT OF 8 COMPANIES NOTICE U/S 133(6) COULD NOT BE SERVED ON 6 COMPANIES DUE TO NO SUCH COMPANY AT THE GIVEN ADDRESS 2 COMPANIES DID NOT REPLY . (PAGE 4 TABLE AOS ORDER) ON AN ANALYSIS OF BANK STATEMENTS OF INVESTOR COMPANIES IT WAS SEEN THAT INVESTOR COMPANIES HAVE RECEIVED FUNDS AND TRANSFERRED BACK TO BACK. SUMMONS ISSUED U/S 131 REMAINED UNCOMPILED. THE ASSESSEE FAILED TO DISCHARGE ITS ONUS. IN SUCH A CASE THE SOURCE AND NATURE OF TRANSACTION NEED TO BE PROVED BEYOND DOUBT.(PAGE 8 AOS ORDER). SINCE THE ASSESSEE WAS WELL AWARE OF THE FACT OF BOGUS CREDITS IN ITS BOOKS IT HAS CHOSEN NOT TO SUBJECT ITSELF INVESTIGATION/ ENQUIRY CONDUCTED BY THE DEPARTMENT.(PAGE 8 AOS ORDER) THE ASSESSEE OFFERED NO EXPLANATION AS TO WHY THESE PARTIES AGREED TO INVEST IN AN UNLISTED COMPANY WHEN THERE IS NO SCOPE FOR MAKING CIT(A) HAS MADE ANALYSIS OF THE CREDITWORTHINESS OF THE INVESTORS AND OBSERVED THAT NO ADVERSE INFERENCE HAS BEEN DRAWN BY LD. AO WITH REFERENCE TO FUNDS RECEIVED BY APPELLANT COMPANY. (PAGE 29 CIT(A)S ORDER) CIT(A) HAS OBSERVED THAT ADDITION HAS BEEN MADE BY AO ON GROUND THAT REPLIES U/S 133(6) WERE INCOMPLETE NO COMPLIANCE WAS MADE U/S 131 AND THE INSPECTORS REPORT THAT NO SUCH COMPANIES EXIST (PAGE 29 CIT(A)S ORDER). AO DID NOT BRING ANY ADVERSE MATERIAL TO REJECT THE EXPLANATIONS AND EVIDENCES SUBMITTED BY APPELLANT (PAGE 29 CIT(A)S ORDER) NEITHER ANY PERSON HAS GIVEN ANY STATEMENT NOR MADE ANY ALLEGATION AGAINST THESE COMPANIES (PAGE 29 CIT(A)S ORDER) REASONS GIVEN BY AO ARE VERY GENERIC AND NOT BACKED BY ANY CONCRETE EVIDENCE (PAGE 29 66 AN EXIT OUT OF INVESTMENT .(PAGE 6 AOS ORDER) NOT EXPLAINED WHY SHARE APPLICATION MONEY WAS RETURNED TO PARTIES AND SHARES WERE NOT ALLOTTED.(PAGE 6 AOS ORDER) THE INTENT OF THE ASSESSEE IS TO AVOID FURNISHING DETAILS AND THEN TAKE PLEA THAT ADDITION HAS BEEN MADE WITHOUT MAKING INQUIRIES FROM PERSONS WHO ADVANCED MONEY .(PAGE 6 AOS ORDER). A CLEAR PERIOD OF TWO MONTHS ALLOWED TO ASSESSEE TO FURNISH DETAILS BUT IT DID NOT SUBMIT (PAGE 6 AOS ORDER). THE ASSESSEE HAS FAILED TO PRODUCE THE DIRECTORS OF THE INVESTOR COMPANIES . (PAGE 8 AOS ORDER) CASE LAWS RELIED UPON BY THE A.O NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) CIT V NIPUN BUILDERS & DEVELOPERS [2013] 350 ITR 407 (DEL) KALE KHAN MOHAMMAD HANIF V CIT [1963] 50 ITR 1 (SC) CIT V OASIS HOSPITALITIES 333 ITR 119 (DELHI) 2011 ROSHAN DI HATTI [1977] 107 ITR (SC) CIT(A)S ORDER) NO CASH DEPOSIT IN THE BANK ACCOUNT OF INVESTORS (PAGE 29 CIT(A)S ORDER)TRANSACTION TOOK PLACE THROUGH NORMAL BANKING CHANNEL (PAGE 29 CIT(A)S ORDER) PARTIES INVOLVED POSITIVELY CONFIRMED (PAGE 29 CIT(A)S ORDER) NO IOTA OF EVIDENCE TO PROVE THAT MONEY ACTUALLY EMANATED FROM COFFERS OF APPELLANT COMPANY (PAGE 29 CIT(A)S ORDER). APPELLANT ALLOTTED SHARES FOR AMOUNT RECEIVED (PAGE 29 CIT(A)S ORDER) THE APPELLANT HAS ESTABLISHED THE ICG OF THE TRANSACTIONS . (PAGE 40 CIT(A) ORDER). CASE LAWS RELIED UPON BY THE CIT(A) MOD CREATIONS PVT LTD V ITO [(2013) 354 ITR 282 (DELHI)] CIT V KAMDHENU STEEL & ALLOYS LTD & OTHERS [(2012) 206 TAXMAN 254 (DELHI)] CIT V GANGESHWARI METALS PVT LTD (2013) 30 TAXMANN.COM 328 ITO V NC CABLE ITA NO. 41 22/DEL/2009 ITAT DELHI BENCH ITO V NEELKANTH FINBUILD LTD ITA NO. 2821/DEL/2009 CIT V OASIS HOSPITALITIES P. LTD [(2011) 333 ITR 119 (DELHI)] ITO V RAKAM MONEY MATTERS P LTD 2821/DEL/2011 ACIT V KISCO CASTINGS PVT LTD 34 TAXMANN.COM 37 CIT V FAIR FINVEST LTD [2014] 44 TAXMANN.COM 356 (DELHI) CIT V OASIS HOSPITALITIES PVT LTD (333 ITR 119 67 DELHI) CIT V LOVELY EXPORTS [2008] 216 CTR 195 (SC) DIFFERENTIATED THE FOLLOWING CASE LAWS: CIT V NOVA PROMOTERS &FINLEASE (P) LTD [(2012) 342 ITR 169 (DELHI)] ROSHAN DI HATTI NIPUN BUILDERS & DEVELOPERS 16. SUPREME PLACEMENT PVT LTD REVENUES APPEAL 2012-13 SECTION 68 SHARE CAPITAL/ SHARE PREMIUM RS. 72.43 CRORES (INCLUDES BONUS OF 12.43 CR) IN SOME CASES THE CONFIRMATION RECEIVED IN RESPONSE TO NOTICE U/S 133(6) ALONG WITH BANK STATEMENT SHOWS THAT ASSESSEE HAS RECEIVED THE AMOUNT AND BACK TO BACK TRANSFERRED THE AMOUNT TO OTHER PARTIES (PAGE 3 AOS ORDER) AS PER THE INSPECTORS REPORT NO SUCH PARTY EXISTED AT THE GIVEN ADDRESS (PAGE TABLE- AOS ORDER) ASSESSEE OFFERED NO EXPLANATION AS TO WHY THE COMPANIES AGREED TO INVEST IN AN UNLISTED COMPANY WHEN THERE IS NO SCOPE FOR MAKING AN EXIT OUT OF INVESTMENT (PAGE 7 AOS ORDER) IT HAS NOT EXPLAINED WHY SHARE APPLICATION MONEY WAS RETURNED AND SHARES WERE NOT ALLOTTED (PAGE 7 AOS ORDER) THE APPROACH OF ASSESSEE FROM SHYING AWAY FROM FILING NECESSARY DOCUMENTS SUGGEST THAT THESE ARE NOTHING BUT ACCOMMODATION ENTRIES (PAGE 7 AOS ORDER) THE ENTIRE INTENT IS TO AVOID FURNISHING DETAILS AND THEN TAKE A PLEA THAT ADDITIONS MADE WITHOUT CONDUCTING INQUIRIES FROM PERSONS FROM ADDITION MADE BY AO ON GROUND THAT REPLIES TO NOTICE U/S 133(6) ARE INCOMPLETE NO COMPLIANCE TO SUMMONS U/S 131 AND THE INVESTORS REPORT THAT COMPANIES DID NOT EXIST AT THE ADDRESS (PAGE 29 AOS ORDER). THE AO DID NOT BRING ANY ADVERSE MATERIAL TO REJECT THE EXPLANATIONS AND EVIDENCES SUBMITTED BY THE APPELLANT (PAGE 29 AOS ORDER). NEITHER ANY PERSON HAS GIVEN ANY STATEMENT NOR MADE ANY ALLEGATION AGAINST THESE COMPANIES (PAGE 29 CIT(A)S ORDER) REASONS GIVEN BY AO ARE VERY GENERIC AND NOT BACKED BY ANY CONCRETE EVIDENCE (PAGE 29 CIT(A)S ORDER). NO CASH DEPOSIT IN THE BANK ACCOUNT OF INVESTORS (PAGE 29 CIT(A)S ORDER) TRANSACTION TOOK PLACE THROUGH NORMAL BANKING CHANNEL (PAGE 29 CIT(A)S ORDER). PARTIES INVOLVED POSITIVELY CONFIRMED (PAGE 29 CIT(A)S ORDER) NO IOTA OF EVIDENCE TO PROVE THAT MONEY ACTUALLY EMANATED FROM COFFERS OF 68 WHOM AMOUNT RECEIVED (PAGE 7 AOS ORDER) A CLEAR PERIOD OF TWO MONTHS ALLOWED TO ASSESSEE BUT STILL IT DID NOT FURNISH THE DETAILS (PAGE 7 AOS ORDER). ASSESSEE FAILED TO PRODUCE THE PERSONS TO VERIFY THE CLAIM (PAGE 9 AOS ORDER) THE ASSESSEE FAILED TO DISCHARGE ITS ONUS . IN SUCH A CASE THE SOURCE AND NATURE OF TRANSACTION NEED TO BE PROVED BEYOND DOUBT.(PAGE 9 AOS ORDER). SINCE THE ASSESSEE WAS WELL AWARE OF THE FACT OF BOGUS CREDITS IN ITS BOOKS IT HAS CHOSEN NOT TO SUBJECT ITSELF INVESTIGATION/ ENQUIRY CONDUCTED BY THE DEPARTMENT.(PAGE 9 AOS ORDER) CASE LAWS RELIED UPON BY THE A.O NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) CIT V NIPUN BUILDERS &DEVELOPERS [2013] 350 ITR 407 (DEL) KALE KHAN MOHAMMAD HANIF V CIT [1963] 50 ITR 1 (SC) CIT V OASIS HOSPITALITIES 333 ITR 119 (DELHI) 2011 ROSHAN DI HATTI [1977] 107 ITR (SC) APPELLANT COMPANY (PAGE 29 CIT(A)S ORDER).APPELLANT ALLOTTED SHARES FOR AMOUNT RECEIVED (PAGE 29 CIT(A)S ORDER) THE APPELLANT HAS ESTABLISHED THE ICG OF THE TRANSACTIONS. (PAGE 40 CIT(A) ORDER) SOURCE SATISFACTORILY EXPLAINED. THE RATIO OF JUDGMENTS IS SQUARELY APPLICABLE TO THE CASE OF ASSESSEE (PAGE 39 CIT(A) ORDER) THE APPELLANT HAS ESTABLISHED THE ICG OF THE TRANSACTIONS.(PAGE 39 CIT(A) ORDER). IN CASE OF BONUS ISSUE PROVISIONS OF SECTION 68 ARE NOT APPLICABLE S INCE THE AMOUNT IN QUESTION DOES NOT REPRESENT A FRESH CREDIT (PAGE 29 CIT(A)S ORDER ). THE AMOUNT OF ISSUE OF BONUS SHARES DOES NOT REPRESENT ANY FRESH CREDIT BUT ONLY A TRANSFER ENTRY REPRESENTING CAPITALIZATION OF RESERVES ANS SURPLUS AND IS NOT HIT BY SECTION 68 OF THE ACT.(PAGE 40 CIT(A) ORDER) CASE LAWS RELIED UPON BY THE CIT(A) MOD CREATION PVT LTD V ITO [(2013) 354 ITR 282 (DELHI)] CIT V KAMDHENU STEEL &ALLOYS LTD & OTHERS [(2012) 206 TAXMAN 254 (DELHI) CIT V GANGESHWARI METALS PVT LTD (2013) 30 TAXMANN.COM 328 ITO V NC CABLE ITA NO. 41 22/DEL/2009 ITAT DELHI BENCH CIT V OASIS HOSPITALITIES P. LTD [(2011) 333 ITR 119 (DELHI)] ITO V RAKAM MONEY MATTERS P LTD 2821/DEL/2011 69 ACIT V KISCO CASTINGS PVT LTD 34 TAXMANN.COM 37 CIT V FAIR FIVEST LTD [2014] 44 TAXMANN.COM 356 (DELHI) CIT V EXPO GLOBE INDIA LTD [2014] 51 TAXMANN.COM 208 (DELHI) ITO V NEELKANTH FINBUILD LTD ITA NO. 2821/DEL/2009 CIT V LOVELY EXPORTS [2008] 216 CTR 195 (SC) DIFFERENTIATED THE FOLLOWING CASE LAWS: NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) ROSHAN DI HATTI [1977] 107 ITR (SC) CIT V NIPUN BUILDERS & DEVELOPERS [2013] 350 ITR 407 (DEL) 17. SUR BUILDCON PVT LTD REVENUES APPEAL 2012-13 SECTION 68 SHARE CAPITAL AND SHARE PREMIUM RS. 98.494 CRORES (INCLUDES 17 09 40 0 00/- ON ACCOUNT OF BONUS ISSUE) ASSESSEE FAILED TO PROVE ICG OF TRANSACTIONS WITH THE INVESTOR COMPANIES.(PAGE 8 AOS ORDER) NOTICES SENT U/S 133(6) RETURNED UNDELIVERED WITH REMARKS NONE EXISTED. BASIS THE INSPECTORS REPORT ALL THE FIVE INVESTORS NO COMPANY WAS FOUND AT THE ADDRESS NO DIRECTORS WERE FOUND PERSON STAYING THERE DENIED SAYING THAT THIS ADDRESS DOES NOT BELONGS TO THE INVESTOR IN QUESTION. (TABLE PAGE 4/5 AOS ORDER) INVESTOR COMPANIES RECEIVED FUNDS BACK TO BACK ARRANGEMENT (PAGE 4- AOS ORDER) SUMMONS ISSUED U/S 131 REMAIN UN-COMPLIED (PAGE 4- AOS ORDER). ASSESSEE HAS WILLFULLY DESISTED FROM FURNISHING ANY DETAILS/ PARTICULARS/ DOCUMENTS/ TO PROVE GENUINENESS OF THE AMOUNT RECEIVED FROM PARTIES (PAGE 5- AOS ORDER). ASSESSEE OFFERED NO EXPLANATION ABOUT AS TO WHY THESE INVESTORS AGREED TO INVEST WHEN THERE IS NO SCOPE FOR MAKING AN EXIT OUT THAT THE APPELLANT HAS COMPLETELY DISCHARGED ITS ONUS CAST UPON IT U/S 68 WITH NECESSARY SUPPORTING DOCUMENTS.(PAGE 27 CIT(A)S ORDER). THE APPELLANT HAS PROVED THE ICG OF THE TRANSACTIONS. NO REASON TO SUGGEST THAT THE TRANSACTIONS ARE NOT GENUINE. (PAGE 27 CIT(A)S ORDER). THE INVESTOR COMPANIES ARE ASSESSED TO TAX AND ORDERS HAVE BEEN PASSED U/S 143(3) OF THE ACT.(PAGE 28 TABLE CIT(A)S ORDER) THE AO DID NOT BRING ANY ADVERSE MATERIAL ON RECORD TO REJECT THE EXPLANATIONS SUBMITTED BY THE APPELLANT. RATHER ITS NOT THE CASE OF AO THAT ANY PERSON HAS GIVEN ANY STATEMENT OR MADE ANY ALLEGATION AGAINST THESE COMPANIES. (PAGE 32 CIT(A)S ORDER). THE REASONS GIVEN BY AO ARE GENERIC IN NATURE AND NO BACKED BY ANY CONCRETE EVIDENCE .(PAGE 32 CIT(A)S ORDER) VARIOUS PARTIES INVOLVED 70 OF INVESTMENT . (PAGE 6- AOS ORDER). IT HAS NOT BEEN EXPLAINED WHY SHARE APPLICATION MONEY WAS RETURNED TO THESE PARTIES AND SHARES NOT ALLOTTED. (PAGE 6- AOS ORDER) AO DID NOT FIND MERIT IN THE CONTENTION OF THE ASSESSEE THAT THE DECISION OF SHARE PREMIUM IS THE DISCRETION OF THE BOARD OF DIRECTORS OF THE COMPANY. THAT THE INVESTOR DID NOT PROVIDE THE COMPLETE BANK STATEMENT ENABLING THE AO TO VERIFY SOURCE OF SOURCE. THAT THE COMPLIANCE MADE BY THE INVESTOR COMPANIES IS NOT FOUND SATISFACTORY . CASE LAWS RELIED UPON BY THE A.O NOVA PROMOTERS &FINLEASE (P) LTD DELHI HIGH COURT NIPUN BUILDERS & DEVELOPERS PVT LTD ITA NO. 120/2012 KALE KHAN MOHAMMAD HANIF V CIT [1963] 50 ITR 1 (SC) ROSHAN DI HATTI V CIT [1977] 107 ITR (SC) CIT V OASIS HOSPITALITIES PVT LTD 333 ITR 119 (DELHI) (2011) HAS POSITIVELY CONFIRMED / AFFIRMED THE FACT OF HAVING DEPOSITED THEIR MONEY INTO APPELLANT COMPANY (PAGE 33 CIT(A)S ORDER). THE ENTIRE AMOUNT HAS BEEN RECEIVED THROUGH NORMAL BANKING CHANNELS WHICH TRANSACTION HAS NOT BEEN DISPUTED REPUDIATED OR CHALLENGED IN ANY MANNER (PAGE 32 CIT(A)S ORDER). NO EVIDENCE TO PROVE THAT FUNDS RECEIVED GENERATED FROM APPELLANT COMPANY . ANY CONCLUSION CAN BE SUSTAINED ONLY IF BACKED BY CONCRETE EVIDENCE (PAGE 33 CIT(A)S ORDER) PROVISIONS OF SECTION 68 ARE NOT APPLICABLE ON BONUS SHARES AS THE NO AMOUNT IS RECEIVED IN CASE OF BONUS SHARES (PAGE 33 CIT(A)S ORDER) APPELLANT COMPANY HAS ALLOTTED SHARES FOR THE SHARE CAPITAL AND SHARE APPLICATION MONEY RECEIVED BY IT (PAGE 33 CIT(A)S ORDER). THERE WAS NO CASH DEPOSIT INTO THE BANK ACCOUNTS OF THE COMPANIES FROM WHOM SHARE CAPITAL/ SHARE APPLICATION MONEY RECEIVED.(PAGE 32 CIT(A)S ORDER). DIFFERENTIATED THE FOLLOWING CASE LAWS: NOVA PROMOTERS &FINLEASE (P) LTD (342 ITR 169 (DEL)) ROSHAN DI HATTI [1977] 107 ITR (SC) CIT V NIPUN BUILDERS & DEVELOPERS [2013] 350 ITR 407 (DEL) RELIED UPON THE FOLLOWING CASE LAWS: MOD CREATION PVT LTD V ITO [(2013) 354 ITR 282 (DELHI)] CIT V KAMDHENU STEEL &ALLOYS LTD & OTHERS [(2012) 206 TAXMAN 254 (DELHI) 71 CIT V GANGESHWARI METALS PVT LTD (2013) 30 TAXMANN.COM 328 ITO V NC CABLE ITA NO. 41 22/DEL/2009 ITAT DELHI BENCH CIT V OASIS HOSPITALITIES P. LTD [(2011) 333 ITR 119 (DELHI)] ITO V RAKAM MONEY MATTERS P LTD 2821/DEL/2011 ACIT V KISCO CASTINGS PVT LTD 34 TAXMANN.COM 37 CIT V FAIR FIVEST LTD [2014] 44 TAXMANN.COM 356 (DELHI) CIT V EXPO GLOBE INDIA LTD [2014] 51 TAXMANN.COM 208 (DELHI) ITO V NEELKANTH FINBUILD LTD ITA NO. 2821/DEL/2009 CIT V LOVELY EXPORTS [2008] 216 CTR 195 (SC) 18. GLOBUS REAL INFRA PVT LTD (FORMERLY SUR BUILDCON PVT LTD) ASSESSEES APPEAL 2013-14 SECTION 68 SHARE APPLICATIO N MONEY - RS. 5.6 CRORES UNSECURE D LOANS - RS. 2.95 CRORES ON PERUSAL OF REPLY FILED BY THE ASSESSEE IT WAS NOTED THAT PARTIES WHO HAVE GIVEN AMOUNT DONT HAVE MUCH CREDITWORTHINESS TO ADVANCE SUCH HUGE SHARE CAPITAL (PAGE- 2 PARA 2 AOS ORDER) IT IS DUTY OF THE ASSESSEE PRIMARILY TO ESTABLISH CREDITWORTHINESS OF PERSONS WHO HAVE GIVEN CREDIT AND GENUINENESS OF TRANSACTION MERELY FILING PAN ITR BS DORS NOT ABSOLVE ASSESSEE FROM ITS RESPONSIBILITY OF DISCHARGING ONUS (PAGE- 5 PARA III AOS ORDER). INVESTORS/ LENDERS HAVE HARDLY ANY BUSINESS TO GENERATE INCOME TO EXTEND SUCH HUGE AMOUNT (PAGE 11 PARA (I) AOS ORDER). REGARDING THE SOURCE OF SOURCE ASSESSEES STORY THAT AMOUNT HAS TRAVELLED FROM ONE COMPANY TO ANOTHER AND NONE OF THE COMPANY HAS ITS OWN SOURCE RATHER ACTING AS A CONDUIT AND IN PROCESS ORIGINAL SOURCE OF MONEY DOES NOT GET EXPLAINED IS NEITHER TENABLE UNDER LAW OF PROBABILITY NOR ACCEPTABLE CIT(A) DECIDED THE APPEAL EX- PARTE NOTICE FOR HEARING DATED APRIL 11 2017 SERVED VIA SPEED POST DATED MARCH 27 2013. NO COMPLIANCE MADE BY APPELLANT APPEAL DECIDED ON BASIS OF FACTS ON RECORD . ( PAGE 3 PARA 4 CIT(A)S ORDER) THE APPELLANT WAS ASKED TO ESTABLISH SOURCE OF SOURCE OF SHARE CAPITAL AND LOANS DUE TO MOVEMENT OF FUNDS BETWEEN DIFFERENT COMPANIES AND ALSO DUE TO INSERTION OF PROVISO IN SECTION 68 EFFECTIVE FOR YEAR UNDER CONSIDERATION (PAGE 4 PARA 7 CIT(A)S ORDER) SHARE APPLICANT COMPANIES AND LENDER COMPANIES HAVE SAME ADDRESS IN DELHI EXCEPT KBN INFRA WHICH HAS MUMBAI ADDRESS (PAGE 4 PARA 7 CIT(A)S ORDER) KBN INFRA NRA IRON & STEEL AND VISTRAT REAL ESTATE HAVE COMMON DIRECTOR NAMELY SHAILENDRA SINGH BHADORIA. (PAGE 4 PARA 7 CIT(A)S ORDER) 72 UNDER JUDICIAL CANONS (PAGE 13 AOS ORDER). INTRODUCTION OF AMOUNT IN BOOKS OF ACCOUNTS DO NOT QUALIFY TEST OF HUMAN PROBABILITY AS IT FAILED TO EXPLAIN THE SOURCE OF INVESTMENT AND ITS PURPOSE OF MAKING THE SAME (PAGE 13 AOS ORDER) THERE IS A CHAIN OF COMPANIES FROM WHICH THE FUND FLOWS FROM ONE COMPANY TO ANOTHER WITHOUT ESTABLISHING THE ACTUAL SOURCE OF INVESTMENT. IT IS A CLEAR CASE OF TAX AVOIDANCE UNDER GARB OF TAX PLANNING (PAGE 16/17 AOS ORDER) DESPITE BRINGING IT TO KNOWLEDGE OF ASSESSEE THAT SUMMONS HAVE NOT BEEN COMPLIED WITH AND IT IS DUTY OF ASSESSEE TO EXPLAIN SOURCE OF SOURCE TO AUTHENTICATE CLAIM AND PURPOSE OF MAKING ADVANCES ASSESSEE FAILED TO DISCHARGE ITS ONUS TO ESTABLISH SOURCE OF SOURCE (PAGE 13 AOS ORDER). SUMMONS ISSUED U/S 131 REMAINED UN-COMPLIED (PAGE 13 AOS ORDER) INVESTORS HAVE COMMON PRACTICE LIKE PAPER COMPANIES WHO RAISE LOAN FROM COMPANIES WHO IN TURN HAVE NO INCOME GENERATING CAPACITY OR ESTABLISHED SOURCE (PAGE 11 PARA (I) AOS ORDER)THE ASSESSEE FAILED TO PROVE THE SOURCE OF SOURCE. THE ASSESSEE FAILED TO DISCHARGE ITS ONUS CAST UPON IT U/S 68 TO PROVE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF PERSON WHO HAS GIVEN CREDIT TO THE ASSESSEE. THE AMOUNT INTRODUCED BY THE ASSESSEE UNDER THE GARB OF SHARE CAPITAL AND UNSECURED LOAN IS THE UNDISCLOSED INCOME OF THE ASSESSEE WITHIN THE MEANING OF SECTION 68 (PAGE 16 OF THE NO REASON WHY APPELLANT COULD NOT PRODUCE PRINCIPAL OFFICERS/ DIRECTORS OF COMPANIES WHEN ENTIRE MONEY CAME FROM SAME GROUP AND APPELLANT ALSO BELONGED TO SAME GROUP (PAGE 4 PARA 7 CIT(A)S ORDER). THE PATTERN OF MONEY MOVEMENT RAISES SUSPICION OF ACCOMMODATION ENTRIES (PAGE 4 PARA 7 CIT(A)S ORDER) THE LD. CIT(A) ALSO APPLIED THE AMENDMENT MADE TO SECTION 68 FOR THE SUM CREDITED AS UNSECURED LOAN ALSO (PAGE 4 PARA 7 CIT(A)S ORDER). CASE LAWS RELIED UPON BY THE CIT(A): NAKODA FASHION PVT LTD ITA NO. 1716/AHD/2012 ITAT AHMEDABAD BENCH [RELYING UPON N. TARIKA PROPERTIES INVESTMENT (2014) 51 TAXMANN.COM 387 (SC) EMPIRE BIOTECH P LTD 361 ITR 258 (DEL)] NOVA PROMOTERS AND FINLEASE PVT LTD 342 ITR 169 (DEL. HC) 73 A.OS ORDER) CASE LAWS RELIED UPON BY THE A.O: KALE KHAN MOHD. HANIF V CIT (SC) 50 ITR 1 CIT V N. R. PORTFOLIO PVT LTD 206 (2014) ITA NO. 204/2002 CITR V NIPUN BUILDERS AND DEVELOPERS (2013) 350 ITR 407 (DEL.) SHANKAR GHOSH V ITO [1985] 23 TTJ (CAL.) 20 ROSHAN DI HATTI V CIT [1977] 107 ITR (SC) CIT V DURGHAPARSAD MORE (1971) 82 ITR 540 (SC) CIT V DURGA PRASAD MORE (1971) 82 ITR 540 (SC) SUMATIDAYAL V CIT (1995) 214 ITR 801 (SC) A RAJENDRAN & OTHERS V ACIT (2006) 204 CTR (MAD) 9 HACIENDA FARMS (P) LTD V CIT (2011) 239 CTR (DEL) 212 MAJOR METALS LTD V UOI AND ORS. (2012) 251 CTR (BOM) 385 PRADEEP KUMAR LOYALKA V ITO (1997) 59 TTJ (PAT)(TM) 655 ACIT V SAMPAT RAJ RANKA (2001) 73 TTJ (JD) 642 MC DOWELL LTD. V CTO (1985) 154 ITR 148 (SC) CIT V YOUTH CONSTRUCTION PVT LTD 44 TAXMANN 364 WOOD POLYMER LTD. BENGAL HOTELS LIMITED 40 COMPANY CASES 597 CAMPBELL V INLAND REVENUE COMMISSIONERS (1) STAMP J. CIT V PRECISION FINANCE PVT LTD (1994) 208 ITR 405 (CAL) BHARATI PVT LTD W.B. V CIT WB (1978) 111 ITR 991 19 TRACK CASTING INDIA PVT LTD. REVENUES APPEAL 2012-13 SECTION 68 SHARE CAPITAL & SHARE PREMIUM RS . 31 CRORES SECTION 69C RS. LITTLE COMPLIANCE OR NO COMPLIANCE MADE TO NOTICES ISSUED U/S 142(1 ) (PAGE1 PARA 4- AOS ORDER. DETAILS FILED LETTER DATED JULY 10 2014 AND JULY 25 2014 AND AUGUST 26 2014 AND DEC 15 2014 (PAGE 2 PARA 4.4 4.5 AOS ORDER) TO AVOID TO PROVE THE CIT(A) HAS MADE ANALYSIS OF RESERVES & SURPLUS POSITION OF ALL THE INVESTORS. ALL HAVE BEEN FOUND TO HAVE ADEQUATE INVESTMENT APART FROM APPELLANT COMPANY AND HAVING DECENT RESERVES (PAGE 19-20 PARA 5 TO 5.2 74 7.75 LAKHS U/S 69C ON ACCOUNT OF ALLEGED UNEXPLAIN ED COMMISSI ON EXPENSES GENUINENESS AND THE CREDITWORTHINESS OF INVESTOR COMPANIES ASSESSEE INTENTIONALLY AVOIDING FURNISHING DETAILS ON TIME AND PRODUCING DIRECTORS OF INVESTOR COMPANIES BY SEEKING ADJOURNMENTS TIME AND AGAIN AND NOT ATTENDING HEARINGS (PAGE 7 PARA 5.12 AOA ORDER). ASSESSEE FAILED TO BRING DIFFERENCE IN RATE OF SHARES ISSUED TO FOUR COMPANIES (PAGE 7 PARA 6.2 AOA ORDER) THE ASSESSEE FAILED TO JUSTIFY REASONS FOR MAJOR DEVELOPMENT BETWEEN THE NIGHT OF 23 RD AND 24 TH WHICH LED TO PRICE INCREASE FROM 10 TO 200 PER SHARE (PAGE 7 PARA 6.2 AOA ORDER). NO PRUDENT INVESTOR WOULD INVEST IN SUCH A COMPANY WITHOUT ANY INCOME; EXCEPT WHEN BOTH THE PARTIES ARE HAND IN GLOVE (PAGE 7 PARA 6.3 AOS ORDER) IT IS MODUS-OPERANDI OF ENTRY OPERATORS TO MAKE FEW TRANSACTIONS AT HIGH AND FEW AT LOW PRICE (PAGE 8 PARA 6.4.2 AOS ORDER). ASSESSEE HAS NOT BROUGHT ANYTHING ON RECORD TO SUPPORT THAT ANY DIVIDEND HAS BEEN DECLARED BY IT (PAGE 9 PARA 6.6 AOS ORDER) PERUSAL OF BANK STATEMENT OF INVESTORS REVEAL THAT THEY ARE RECEIVING HUGE AMOUNTS FROM VARIOUS OTHER COMPANIES AND TRANSFERRING FUNDS TO OTHER COMPANIES NOT DOING BUSINESS ACTIVITY ((PAGE 9 PARA 6.7 AOS ORDER). ONE THING IS COMMON THAT WHOLE OF THE SALE PROCEEDS ARE USED FOR BUYING SHARES OF OTHER COMPANIES AND AT THE END THERE IS NO INCOME EARNED EVEN AFTER TRANSACTION OF HUNDRED OF CRORES (PAGE 9 PARA 6.7 AOS ORDER). BANK STATEMENT SHOW SIMILAR PATTERN RECEIPTS OF HUGE AMOUNT OF MONEY WITHOUT CIT(A)S ORDER) THE AMENDMENT MADE U/S 68 FOR PROVING THE SOURCE OF SOURCE IS NOT THE MANDATE OF LAW FOR THE YEAR UNDER APPEAL. THE AMENDMENT TO SECTION 68 W.E.F. 01/04/2013 CANNOT BE HELD OR INTERPRETED TO BE RETROSPECTIVE IN NATURE (PAGE 21 PARA 7 CIT(A)S ORDER). AO FAILED TO DISPROVE IDENTITY CREDITWORTHINESS AND GENUINENESS OF TRANSACTION (PAGE 22 PARA 8 CIT(A)S ORDER). AO HAS BROUGHT NOTHING ON RECORD TO ESTABLISH THAT THE APPLICANT ROUTED ITS OWN MONEY IN THE FORM OF SHARE APPLICATION (PAGE 22 PARA 8 CIT(A)S ORDER) THE ADDITION MADE SEPARATELY ON ACCOUNT OF COMMISSION PAYMENT OF RS. 7.75 LAKH IS ALSO DELETED . (PAGE 22 PARA 8 CIT(A)S ORDER) 75 16. IN SUMS AND SUBSTANCE THE REASONS GIVEN IN THE APPEALS WHERE THE RESPECTIVE LD. CIT (AS) HAVE DELETED THE ADDITIONS U/S.68 ARE AS UNDER: THAT THE BASIC REQUIREMENT TO JUSTIFY IDENTITY CREDITWORTHINESS AND GENUINENESS (ICG} OF THE TRANSACTIONS IN THE CASE OF THE ASSESSEE ORE PRIMA FACIE ESTABLISHED. RELEVANT DOCUMENTS WERE FURNISHED BY T HE ASSESSEE THE ASSESSEE FILED COPIES OF CONFIRMATION BONK STATEMENTS P&L A/C BALANCE SHEET ASSESSMENT ORDE RS OF THE INVESTORS/LENDERS TO ESTABLISH SOURCE OF FUN DS IN THE HANDS OF INVESTOR/LENDER COMPANIES. THAT THE A.O HAS NOT BROUGHT ANY ADVERSE MATERIAL T O REJECT THE EXPLANATIONS AND EVIDENCES SUBMITTED BY THE ASSESSEE EXCEPT ALLEGING THE NON-COMPLIANCE OF NOTI CES INTEREST NO PROPORTIONATE EXPENSE BOOKED IN TURN PROVIDING HUGE AMOUNTS TO VARIOUS COMPANIES WITHOUT INTEREST (PAGE 9 PARA 6.7 AOS ORDER) THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE INVESTOR COMPANIES .(PAGE 10 PARA 6.10 AOS ORDER). FURTHER ACCOMMODATION ENTRIES HAVE BEEN TAKEN ON PAYMENT OF CERTAIN AMOUNT OF MONEY ESTIMATED TO 25 PAISA PER RS. 100. ON ACCOMMODATION ENTRY OD RS. 31 CRORES ASSESSEE PAID RS. 7.75 LAKHS SINCE NO DETAILS AND SOURCE OF THIS PAYMENT HAS BEEN SHOWN HELD TO BE PAID OUT OF UNDISCLOSED SOURCES (PAGE10 PARA 7 AOS ORDER) 76 ISSUED 131 AND 133(6) IN CASE OF CERTAIN INVESTORS. THAT NEITHER THE ASSESSEE NOR THE INVESTOR COMPANIE S ORE ULTIMATE BENEFICIARIES BUT THERE IS ROUTING OF FUND S FROM BHUSHAN STEEL LTD. AND/OR BHUSHAN ENERGY LTD. (SPECIFICALLY HELD SO IN 3 CASES VIE. JAWAHAR CREDI T & HOLDINGS PVT. LTD. (A.Y. 2012-13} JINGLE BELLS ALU MINIUM PVT. LTD. (A.Y. 2012-13) AND KASPER INFORMATION TECHNOLOGY PVT. LTD. (A. Y. 2012-13) THAT NOTHING IS MENTIONED IN THE ASSESSMENT ORDER REGARDING ANY STATEMENT OF ANY PERSON PROVIDING ENT RY TO THE ASSESSEE. THAT THERE IS NO DENIAL AT ANY STAGE OF ASSESSMENT PROCEEDINGS BY ANY OF THE SUBSCRIBERS OF SHARE CAPI TAL OF HAVING DEPOSITED MONEY IN THE ASSESSEE COMPANY. THAT REPLIES TO NOTICES ISSUED U/S 133(6} WERE RECE IVED FROM SEVERAL INVESTOR COMPANIES. THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE A.O TO CONCLUSIVELY PROVE THAT THE SHARE CAPITAL ORIGINATE D FROM ASSESSEE COMPANY. THE DOCUMENTS SUBMITTED CONCLUSIVELY ESTABLISH THAT THE MONEY CAME FROM THE INVESTOR'S/DEPOSITORS ACCOUNT AND NOWHERE CONNECTED WITH THE ASSESSEE COMPANY. THAT THERE IS NO CASH DEPOSIT IN THE BANK ACCOUNTS OF THE PARTIES FROM WHOM SHARE CAPITAL/ LOAN IS RECEIVED. THAT THE ENTIRE AMOUNT WAS RECEIVED THROUGH NORMAL 77 BANKING CHANNELS. THAT THE DEPOSITORS HAVE ALSO CONFIRMED OF HAVING DEPOSITED MONEY IN THE COMPANY WHICH CONFIRMATIONS ALSO REVEAL SOURCE OF FUNDS PARTICULARS OF BANK ACCOUNT S THROUGH WHICH PAYMENTS HAVE BEEN RECEIVED AND INCOM E TAX PARTICULARS. THAT THE ASSESSEE HAS ALLOTTED SHARES FOR SHARE APP LICATION MONIES RECEIVED. THAT THERE IS NO MANDATE OF LAW TO LOOK INTO THE SO URCE OF SOURCE FOR THE A. YS PRIOR TO A. Y. 2013-14. THAT THE ASSESSEE CANNOT BE FASTENED WITH LIABILITY U/S 68 UNLESS A CAUSAL CONNECTION BETWEEN THE CASH DEPOSIT IN THE BANK ACCOUNT OF THE INVESTOR (IF ANY) AND THE A SSESSEE IS ESTABLISHED. THAT WHERE COMPLETE PARTICULARS OF THE SHARE APPLIC ATIONS ARE FURNISHED TO THE A.O AND THE A.O HAS NOT CONDUC TED ANY ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE THEN NO ADDITION CAN BE MODE IN THE HANDS OF THE COMPANY . THAT THE INVESTOR COMPANIES ARE HAVING ADEQUATE RES ERVES MAKE INVESTMENTS. THAT THE SOURCE OF FUNDS BY THE INVESTOR COMPANIES IN THE ASSESSEE IN ITS SHARE CAPITAL STANDS EXPLAINED THAT THE INVESTOR COMPANIES ARE ALL ASSESSED TO TAX IN THEIR RESPECTIVE JURISDICTIONS. 78 THAT THE JUDGMENT OF STELLAR IS APPLICABLE ONLY WHE RE SHARES ARE ISSUED IN THE NAMES OF NON-EXISTING PERS ONS WHICH IS NOT THE SITUATION IN THE INSTANT CASE. THAT WITHOUT PROOF OF HAVING INTRODUCED UNTAXED MON EY BY PROMOTERS OR DUBIOUS ANTECEDENTS ADVERSE VIEW CANN OT BE TAKEN. THAT THE PROVISIONS OF SECTION 68 ARE NOT APPLICABL E FOR BONUS SHARES SINCE THE AMOUNT IN QUESTION DOES NOT REPRESENT ANY FRESH CREDIT BUT ONLY A TRANSFER ENTR Y REPRESENTING CAPITALIZATION OF RESERVES AND SURPLUS AND IS NOT HIT BY SECTION 68. 17. FURTHER LD. CIT (A) IN THREE CASES HAVE CONFIR MED THE ADDITION WHICH CAN BE SUMMARIZED IN THE FOLLOWING MANNER: THAT THE ASSESSEE FAILED TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS/LENDERS AND THE GENUINENESS OF THE TRANSACTIONS. THAT FEW INVESTORS/LENDERS DID NOT REPLY TO NOTICES U/S. 133(6) OR ATTEND SUMMONS U/S.131. THAT FEW SHARE APPLICANTS AND LENDER COMPANIES HAVE SAME ADDRESS AND COMMON DIRECTORS. THAT THERE WAS NO REASON WHY THE APPELLANT COULD NO T PRODUCE PRINCIPAL OFFICERS/DIRECTORS OF COMPANIES W HEN THE ENTIRE MONEY CAME FROM THE SAME GROUP AND THE APPEL LANT ALSO BELONGED TO THE SAME GROUP. THE PATTERN OF MON EY MOVEMENT RAISED SUSPICION OF ACCOMMODATION ENTRIES. 79 ARGUMENTS ON BEHALF OF THE ASSESSEE 18. BEFORE US LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSING OFFICER WITHOUT BRINGING ON RECORD AN Y COGENT MATERIAL AND EVIDENCE WHATSOEVER HAS ALLEGED THAT A LL THE ASSESSEES HEREIN AVAILED ACCOMMODATION ENTRIES WHER EIN THEY HAVE DEDUCED THEIR OWN UNACCOUNTED/UNDISCLOSED FUND S INTO THEIR BOOKS OF ACCOUNT IN THE GARB OF SHARE CAPITAL AND OR LOANS AND ADVANCES. WHEREAS THE ASSESSEES CASE ALL THROUGHOUT HAS BEEN THAT THESE ARE MERE ROUTING/MOV EMENT OF ACCOUNTED FUNDS OF BHUSHAN ENERGY LTD. (BEL) IN THE FORM OF SHARE CAPITAL AND OR LOAN AND ADVANCES THROUGH W EB OF GROUP COMPANIES INTO THE ASSESSEE COMPANIES AND SUBSEQUENTLY REINTRODUCTION OF SUCH FUNDS INTO REGU LAR ACCOUNTS OF BEL. THE CONCEPT OF ACCOMMODATION ENTRI ES WOULD BE APPLICABLE WHERE ENTRIES REPRESENT UNACCOU NTED MONEY OF THE PERSON IN WHOSE BOOKS OF ACCOUNT MONEY HAS BEEN CREDITED IN THE FORM OF SHARE CAPITAL/LOAN/ADV ANCE ETC. AND THE INVESTOR/LOAN COMPANY HAS ACTED ONLY AS CON DUIT FOR ROUTING THE MONEY BACK TO THE BOOKS OF ACCOUNT OF T HAT PERSON. IN THE INSTANT CASE THERE IS NO INVOLVEMENT OF ANY UNDISCLOSED FUND OR ANY FICTITIOUS/BOOKS ENTRIES IN THE ENTIRE TRANSACTIONS. THERE IS NO INFORMATION OR INQUIRY OR ANY MATERIAL THAT THE ASSESSEES COMPANY AVAILED ANY ACCOMMODATION ENTRY THROUGH ANY ENTRY OPERATOR OR A NYONE WHEREBY IT HAS BEEN FOUND THAT ASSESSEE HAVE ROUTED THEIR OWN UNACCOUNTED/UNDISCLOSED FUND IN THEIR BOOKS OF ACCOUNT. 80 19. APART FROM THAT ALL THE ASSESSEES IN THE RE SPECTIVE ASSESSMENT PROCEEDINGS HAVE FILED DETAILED DOCUMENT ARY EVIDENCES EFFECTIVELY DISCHARGING THE PRIMARY ONUS OF DISCHARGING THE REQUISITE INGREDIENT OF SECTION 68 VIZ. IDENTITY AND CREDITWORTHINESS OF THE INVESTOR/LENDE RS AND THE GENUINENESS OF THE CREDITS AND THEREFORE THE NATUR E AND SOURCE OF THE IMPUGNED CREDIT STOOD FULLY EXPLAINED ON STANDALONE BASIS IN EACH OF THE CASES OF THE RESPEC TIVE ASSESSEES. THE PECULIAR FACTS WHICH IS PERMEATING I N ALL THESE APPEALS WHICH IS DIFFERENT FROM MANY OTHER CASES IS THAT ONE ASSESSEE COMPANY HAS SERVED AS INVESTOR/LENDER OF F UNDS INTO THE SUBSEQUENT ASSESSEE COMPANY IN A CHAIN THAT GOE S ON AND SO FORTH. HE SUBMITTED THAT IN CASES OF MOST OF THESE COMPANIES ASSESSMENT HAS BEEN COMPLETED U/S.143(3) OR U/S 147 BY THE ASSESSING OFFICER WHICH WERE ALSO S UBJECT MATTER OF APPELLATE PROCEEDINGS WHEREBY MOST OF THE ADDITIONS HAVE BEEN DELETED OR THE APPEALS ARE PENDING EITHER BEFORE LD. CIT(A) OR TRIBUNAL. THUS SAME ADDITIONS HAVE BEEN M ADE IN THE HANDS OF THE INVESTOR COMPANIES ALSO LEADING TO DOUBLE ADDITION. TO DEMONSTRATE THE SAME HE HAS FILED A DE TAILED CHART IN EACH AND EVERY INVESTOR COMPANY. HE SUBMIT TED THAT ALL THE ASSESSEE-COMPANY AS WELL AS THE INVESTORS/L ENDERS ARE PART OF GROUP OF COMPANIES BELONGING TO THE BHUSHAN GROUP AND THE FAMILY MEMBERS OF THE DIRECTORS. HE POINTED OUT THAT FROM THE DETAILS FILED IN THE PAPER BOOKS AS WELL A S BEFORE THE AUTHORITIES BELOW IT CAN BE SEEN THAT THE SAME STR EAM OF FUNDS PERMEATING TO THE GROUP COMPANIES IN THE FORM OF SHARE 81 CAPITAL/PREMIUM OR LOAN AND ADVANCES HAVE BEEN REPE ATEDLY TREATED AS UNACCOUNTED/UNDISCLOSED FUND OF MULTIPLE COMPANIES ASSESSED ON INDIVIDUAL BASIS WHICH HAS RE SULTED INTO MULTIPLE ADDITION INTO SAME STREAM OF FUNDS IN THE HANDS OF MULTIPLE ASSESSEES INCLUDING ALL THE ASSESSEES HEREIN. BY WAY OF AN EXAMPLE HE HAS CITED MANY SUCH INSTANCES VIZ. :- IN THE CASE OF TRACK CASTING (INDIA) PVT LTD. (AT S I. NO. 19 OF ANNEXURE 1) AN ADDITION OF RS. 31 CRORES HAS BE EN U/S 68 MADE ON ACCOUNT OF FUNDS RECEIVED FROM VARIOUS P ARTIES IN THE FORM OF SHARE CAPITAL WHERE THE A.O. HAS TR EATED SUCH SHARE CAPITAL AS REPRESENTING THE UNACCOUNTED FUNDS OF M/S. TRACK CASTING (INDIA) PVT. LTD. FOR A.Y. 20 12-13 FURTHER IN THE CASE OF SUKHNA STEEL PVT. LTD. (A.Y . 2012- 13) (I.E. ASSESSEE AT SI. NO. 13 IN THE SAID CHART ) OUT OF TOTAL ADDITIONS OF RS. 21.168 CRORES MADE U/S 68 IN THE SAID CASE AN ADDITION OF RS. 19.60 CRORES HAS BEEN MADE ON ACCOUNT OF FUNDS RECEIVED AS SHARE CAPITAL FROM TRACK CASTING (INDIA) PVT. LTD TREATING THE SAME AS REPR ESENTING THE UNACCOUNTED FUNDS OF SUKHNA STEEL PVT. LTD. THUS THE SUM OF RS. 31 CRORES HAS FIRST BEEN TREAT ED AS UNDISCLOSED FUNDS BELONGING TO M/S. TRACK CASTING ( INDIA) PVT. LTD. THEREAFTER RS. 19.60 CRORES SOURCED OUT OF THE SAID FUNDS OF RS. 31 CRORES WHEN PAID BY TRACK CAS TING (INDIA) PVT. LTD. TO M/S. SUKHNA STEEL PVT. LTD. HA S ONCE AGAIN BEEN TREATED AS REPRESENTING THE UNACCOUNTED FUNDS BELONGING TO M/S. SUKHNA STEEL PVT LTD. 82 AGAIN A SUM OF RS. 10 CRORES OUT OF THE SAID FUNDS OF RS. 31 CRORES HAS BEEN RECEIVED BY M/S. TRACK CASTING (INDIA) PVT. LTD. (AT SI. NO. 19) IN THE FORM OF SHARE CAPI TAL FROM M/S. JAWAHAR CREDIT & HOLDINGS PVT LTD. (AT SI. NO. 4). THE SAID SUM OF RS. 10 CRORES HAS BEEN PAID BY JAWAHAR CREDIT HOLDING PVT. LTD. TO M/S. TRACK CASTING (INDIA) PVT . LTD. OUT OF THE SHARE CAPITAL OF RS. 73.50 CRORES RECEIV ED BY THE FORMER COMPANY FROM VARIOUS PARTIES. THE SAID SHARE CAPITAL OF RS. 73.50 CRORES HAS ALSO BEEN ADDED U/S 68 IN THE HANDS OF JAWAHAR CREDIT & HOLDINGS PVT. LTD. BY TREATING THE SAME AS UNACCOUNTED FUNDS BELONGING TH E M/S. JAWAHAR CREDIT & HOLDINGS PVT. LTD. THE CHAIN CONTINUES IN A SIMILAR FASHION. THUS THE SAME FUNDS ROUTED VIA M/S. JAWAHAR CREDIT & HOLDINGS PVT. LTD. TO M/S. TRACK CASTING (INDIA) PV T. LTD. AND SUBSEQUENTLY TO M/S. SUKHNA STEEL PVT. LTD HAV E BEEN TREATED AS BELONGING TO AND REPRESENTING THE UNDISCLOSED FUNDS OF ALL THE THREE GROUP ENTITIES A T THE SAME POINT IN TIME. AGAIN RS 13.50 CRORES INVESTED BY M/S. JAWAHAR CR EDIT & HOLDINGS PVT LTD. OUT OF ITS SHARE CAPITAL OF RS. 73.50 CRORES (W.R.T WHICH ADDITIONS U/S 68 HAVE ALREADY B EEN MADE IN THE HANDS OF JAWAHAR CREDIT & HOLDINGS PVT. LTD.) INTO M/S. SUPER STAR AGENCY PVT LTD. (AT SI. NO. IS ) HAS ALSO BEEN ADDED U/S 68 IN THE HANDS OF THE LATTER COMPANY ONCE AGAIN TREATING THE SAME AS REPRESENTI NG THE UNDISCLOSED FUNDS BELONGING TO THE LATTER. 83 THUS THERE IS A COMPLETE LACK OF PARITY AND UNDERST ANDING BY THE REVENUE WITH RESPECT TO ACTUAL OWNERSHIP OF THE IMPUGNED FUNDS BECAUSE SAME STREAM OF FUNDS HAVE BE EN ADDED IN THE HANDS OF MULTIPLE ASSESSEES. 20. IN ADDITION TO THE DOCUMENTARY EVIDENCES FURN ISHED BEFORE THE LOWER AUTHORITIES LD. COUNSEL HAS ALSO FILED A COMPLETE FUND FLOW IN THE FORM OF FLOW CHART DEPICT ING THE COMPLETE MOVEMENT OF THE FUND IN CASE OF EACH OF TH E ASSESSEE COMPANY FROM WHERE THE FUNDS HAVE STARTED /GENERATED TO THE ULTIMATE DESTINATION OF THE FUND. THE FUND FLOW STATEMENT HAS BEEN DULY SUPPORTED BY THE RELEV ANT BANK STATEMENT WHICH WAS FILED BEFORE THE AUTHORITIES BE LOW TO DEMONSTRATE EVERY LINK OF THE FLOW CHART. FROM THE SAID FUND FLOW STATEMENT HE POINTED OUT THAT THE FUNDS REPRE SENTING THE IMPUGNED CREDITS IN THE FORM OF SHARE CAPITAL/S HARE PREMIUM OR LOAN AND ADVANCES DO NOT BELONG TO ANY O F THE SHARES HEREIN AND THE ULTIMATE SOURCE OF THE IMPUGN ED FUND LIES IN THE REGULAR BOOKS OF ACCOUNT OF BHUSHAN ENE RGY LTD. AND ULTIMATELY ALL THESE FUNDS HAVE BEEN ROUTED BAC K TO THE BHUSHAN ENERGY LTD. THOUGH HE ADMITTED THAT THESE F UND FLOW STATEMENT IS IN THE NATURE OF ADDITIONAL EVIDE NCE FOR WHICH PETITION FOR UNDER RULE 29 OF ITAT RULES 1963 HAVE BEEN FILED SEPARATELY. HE HARPED UPON THE FACT THAT IN ALL THESE CASES THERE IS NO INVOLVEMENT OF UNACCOUNTED FUND OR UNDISCLOSED INCOME OF THE ASSESSEE COMPANIES IN THE ENTIRE CHAIN OF TRANSACTION AND NO MATERIAL HAS BEEN BROUG HT ON RECORD BY THE ASSESSING OFFICER TO PROVE THAT SHARE CAPITAL AND 84 LOAN AND ADVANCES HAVE BEEN ORIGINATED FROM THE UNACCOUNTED MONEY OF THE ASSESSEE COMPANIES OR ANY OTHER GROUP COMPANIES WHO HAVE SUBSCRIBED TO THE SHARES O R MADE INVESTMENT. IN FACT IF AT ALL THERE IS CIRCULAR TR ANSACTION THEN IT AMONGST THESE VERY COMPANIES WHO ARE CONNECTED W ITH THE BHUSHAN GROUP AND THE ENTIRE AMOUNT ARE ACCOUNTED F OR IN THE BOOKS OF BHUSHAN ENERGY LTD. THEY ARE NOT THE U LTIMATE BENEFICIARIES. THIS FACT IS CLEARLY VISIBLE AND DEM ONSTRABLE FROM THE BALANCE SHEET OF THE ASSESSEE COMPANIES WH ICH CLEARLY DEMONSTRATE THAT THE ENTIRE SHARE CAPITAL/S HARE PREMIUM RECEIVED BY THE ASSESSEE FROM ITS OWN GROUP COMPANIES HAVE BEEN INVESTED/ADVANCED TO OTHER GROU P COMPANIES. ON THESE FACTS IT CANNOT BE HELD THAT TH E CREDIT APPEARS IN THE BOOKS OF ACCOUNT ARE UNACCOUNTED OR UNDISCLOSED INCOME OF THE ASSESSEE. 21. LD. COUNSEL REITERATED THAT FUND FLOW STATEME NTS (WITH ACCOMPANYING BANK STATEMENTS) EFFECTIVELY AND CONCL USIVELY ESTABLISH THE FOLLOWING FACTS: I. THAT THE IMPUGNED CREDITS IN THE FORM OF SHARE CAPITAL/SHARE PREMIUM AND/OR LOANS & ADVANCES (AS MAY BE APPLICABLE) APPEARING IN THE BOOKS OF ACCOUN T OF THE ASSESSEES HEREIN HAVE ARISEN ON ACCOUNT OF THE ACTUAL MOVEMENT OF FUNDS ORIGINATING FROM THE REGUL AR BOOKS OF ACCOUNT OF BEL INTO A MAZE OF GROUP COMPAN IES (INCLUDING THE ASSESSEES HEREIN) VIA REGULAR BANKIN G CHANNELS. 85 II. THERE IS NO FAKE OR BOGUS ENTRY IN THE ENTIRE CHAIN WHICH HAS BEEN USED AS A CAMOUFLAGE BY ANY OF THE GROUP COMPANIES (INCLUDING THE ASSESSEES HEREIN) TO PUT THROUGH THEIR OWN UNACCOUNTED FUNDS. III. THAT THERE ARE NO CASH DEPOSITS IN THE ENTIRE CHAIN AND THE CREDITS ARE ULTIMATELY SOURCED OUT OF THE ACCOU NTED FUNDS OF BEL; IV. THAT THE ASSESSEES HEREIN ARE PLACED AT DIFFERENT L EVELS OF THE CHAIN WHEREIN ONE GROUP COMPANY SERVES AS AN INVESTOR/LENDER IN THE NEXT GROUP COMPANY IN THE CH AIN THAT GOES SO ON AND SO FORTH V. THAT THE ASSESSEES HAVE MERELY ACTED AS CONDUIT MECHANISM FOR INVESTING FUNDS OF BEL INTO OTHER GRO UP COMPANIES AND THE SAID FUNDS HAVE ULTIMATELY GONE B ACK TO BEL. VI. THE SAME STREAM OF ACCOUNTED FUNDS OF BEL FLOWING THROUGH THESE GROUP COMPANIES HAVE BEEN REPEATEDLY TREATED AS THE UNACCOUNTED/UNDISCLOSED FUNDS OF MULTIPLE GROUP COMPANIES (ASSESSED ON AN INDIVIDUAL BASIS) RESULTING IN MULTIPLE ADDITIONS OF THE SAME STREAM OF ACCOUNTED FUNDS OF BEL IN THE HANDS OF SEVERAL ASSESSEES; VII. THAT THERE IS NO INFLUX OF ANY UNACCOUNTED FUNDS/INCOME BELONGING TO THE ASSESSEE COMPANIES IN THE CHAIN AS INCORRECTLY ALLEGED BY THE A.OS. THEREFORE THE NATURE AND SOURCE OF THE IMPUGNED CR EDITS 86 STAND FULLY EXPLAINED IN THE CASES OF ALL THE ASSES SEE- COMPANIES HEREIN RULING OUT THE APPLICABILITY OF TH E RIGORS OF SECTION 68. 22. LD. COUNSEL SUBMITTED THAT IT IS PERTINENT TO NOTE HERE THAT THE FACTUM OF ROUTING OF ACCOUNTED FUNDS OF BS L (THROUGH ITS SUBSIDIARY COMPANY BEL) VIA THE ASSESSEES HERE IN HAS BEEN CATEGORICALLY RECOGNIZED BY THE LD CIT(A) IN THE CASES OF JAWAHAR CREDIT & HOLDING PVT. LTD. (A.Y. 2012-13) JINGLE BELLS ALUMINIUM PVT. LTD. (A.Y. 2012-13) AND KASPER INFORMATION TECHNOLOGY PVT. LTD {A.Y. 2012-13). TH E LD. CIT(A) (BEING THE SAME OFFICER WHO HAS DISPOSED OF THE APPEALS IN ALL THE THREE CASES) HAS DELETED THE ADDITION MA DE BY THE RESPECTIVE A.O(S) U/S 68 WITH THE FOLLOWING COMMON FINDINGS: THAT THE BASIC REQUIREMENT TO JUSTIFY THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE IMPUGNED TRANSACTIONS HAS BEEN PRIMA FACIE ESTABLISHED BY TH E ASSESSEE. THAT NEITHER THE ASSESSEE NOR THE INVESTORS ARE THE ULTIMATE BENEFICIARY OF THE TRANSACTIONS BUT THERE IS ROUTING OF FUNDS FROM BHUSHAN STEEL LTD. (THROUGH I TS SUBSIDIARY COMPANY BEL). THE FUNDS RECEIVED ARE GI VEN TO OTHER COMPANIES AS SOON AS THEY ARE RECEIVED. THAT ACCORDINGLY THE ADDITIONS MADE BY THE A.O ARE OUTSIDE THE AMBIT OF SECTION U/S 68 AS THE ASSESSEE HAS MERELY PROVIDED FACILITY TO ROUTE THE IMPUGNED TRANSACTIONS. 87 23. LD. COUNSEL FURTHER POINTED OUT THAT SEVERAL INVESTOR /LENDER COMPANY IN THE RESPECTIVE CHAIN ARE ALSO AS SESSEES TO THE APPEALS BEFORE THIS TRIBUNAL AND THE FUND FLOW STATEMENT IN EACH CASE IS VERIFIABLE FROM THE BANK STATEMENT ALREADY ON RECORD OF THE DEPARTMENT. FURTHER SIMILAR ADDITION S MADE U/S.68 IN THE CASE OF SEVERAL INVESTOR/LENDER COMPA NIES WHO HAVE INVESTED IN THE CASE OF PRESENT ASSESSEES ARE ALSO PENDING FOR DISPOSAL AT THE FIRST APPELLATE STAGE. THUS IN SUCH A SITUATION AND FACTS IT CANNOT BE HELD THAT THESE ARE NON EXISTING ENTITIES AND IT IS CLEAR CUT CASE OF DOUBL E WHAMMY. 24. EVEN OTHERWISE ALSO IF THE COMMON ANTECEDENT A ND ORIGINATION AND THE ULTIMATE DESTINATION OF THE IMP UGNED FUNDS ARISING FROM THE SAME ENTITY I.E. BEL WHICH HAS BEEN ROUTED TO ALL THROUGH GROUP COMPANIES IS KEPT ASIDE THEN ON STANDALONE BASIS EACH AND EVERY ASSESSEE HAD SUCCES SFULLY DISCHARGE THE PRIMARY ONUS OF ESTABLISHING THE IDEN TITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . IN SUPPORT THE ASSESSEE BEFORE THE AUTHORITIES BELOW HAS SUBMITTED ALL THE DOCUMENTS EXPLAINING THE NATURE A ND SOURCE OF THE SHARE CAPITAL/SHARE PREMIUM APPEARING IN THE BOOKS OF ACCOUNT WHICH HAS REMAIN UNCONTROVERTED BY THE ASSESSING OFFICER. THE SAME HAVE BEEN PLACED IN THE PAPER BOOK ALSO. THE ASSESSEES HAVE FURNISHED FOLLOWING D OCUMENTS BEFORE THE ASSESSING OFFICER AND CIT(A):- (I) NAMES ADDRESSES AND PAN DETAILS OF THE PARTIES (II) CONFIRMATION OF PARTIES 88 (III) BANK STATEMENTS (IV) INCOME TAX RETURNS OF THE PARTIES FOR THE IMPUGNED A.Y. (V) ASSESSMENT ORDERS OF THE PARTIES. (VI) AUDITED ACCOUNTS OF THE PARTIES OF THE YEAR UNDER CONSIDERATION. 25. THEREAFTER HE RELIED UPON CATENA OF JUDGMENT AND SUBMITTED THAT HERE IN ALL THESE CASES THE REQUISIT E INGREDIENT OF SECTION 68 IN CASES OF ALL THE ASSESSEES STAND D ISCHARGED WHICH ARE AS UNDER: A. THE IDENTITIES OF THE INVESTORS/LENDERS ARE ESTABLI SHED FROM MULTIPLE FACTS AND EVIDENCES ON RECORD VIZ. I. THE INVESTORS/SUBSCRIBERS ARE COMPANIES DULY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT 1956 HAVING SEPARATE LEGAL ENTITIES AND THE STATUS OF 'ARTIFICIAL LEGAL PERSONS'. THE STATUTORY RECORDS AVAILABLE WITH THE REGISTRAR OF COMPANIES CLEARLY POINT TO THE COMPANIES BEING IN EXISTENCE. II. THE IDENTITY AND EXISTENCE OF THE COMPANIES ARE ALSO SUBSTANTIATED BY THE FOLLOWING DOCUMENTS FILED BEFORE THE LOWER AUTHORITIES. (A) CONFIRMATIONS RECEIVED FROM THE PARTIES. (B) DETAILS OF PAN - WHICH CONCLUSIVELY PROVE THAT THE SAID SHAREHOLDER COMPANIES ARE ALL EXISTING INCOME-TAX ASSESSEES. 89 (C) COPIES OF ITR ACKNOWLEDGMENT OF THE PARTIES FOR THE RELEVANT ASSESSMENT YEARS. (D) ASSESSMENT ORDERS OF THE PARTIES FOR THE RELEVANT ASSESSMENT YEARS. B. AS FAR AS THE GENUINENESS OF THE TRANSACTIONS IS CONCERNED THE ASSESSEES FILED THE BANK STATEMENTS OF THE INVESTORS/LENDER COMPANIES WHICH PROVE CONCLUSIVELY THAT THE ASSESSEES HAD RECEIVED THE IMPUGNED FUNDS FROM THE SAID INVESTORS/LENDERS AND IT CAME FROM THE COFFERS OF THE SAID PARTIES. THE IMPUGNED SUMS WERE RECEIVED THROU GH AUTHORIZED BANKING CHANNELS WHICH PROVE THE GENUINE NESS OF THE TRANSACTIONS. THE INVESTORS/LENDERS HAVE ALS O DULY CONFIRMED THE FACT OF THEIR HAVING DEPOSITED MONEY IN THE ASSESSEE COMPANY IN THE FORM OF SHARE CAPITAL AND CORROBORATED THEIR CONFIRMATIONS WITH COPIES OF INC OME-TAX RETURNS BANK STATEMENTS ETC. C. FURTHER THE CREDITWORTHINESS OF THE INVESTORS/ LENDERS IS DEARLY ESTABLISHED FROM THE FACT THAT SHARE CAPITAL/PREMIUM/LOANS ETC. WAS RECEIVED BY THE ASSE SSEE COMPANY BY WAY OF ACCOUNT PAYEE CHEQUES THROUGH NORMAL BANKING CHANNELS AND ALSO FROM THE COPIES OF THE BANK STATEMENTS OF THE INVESTOR/LENDER COMPANIES SHOWING ADEQUATE AVAILABILITY OF FUNDS FOR THE IMPU GNED INVESTMENTS. THE BALANCE SHEETS OF THE INVESTORS/LE NDERS ALSO SHOW SIGNIFICANT NET WORTH FAIR ENOUGH TO MAKE THE INVESTMENTS. THE CONFIRMATIONS OF THE INVESTORS/LEN DERS ARE ALSO ON RECORD. THUS WHERE THE FUNDS HAVE FLOW N 90 THROUGH NORMAL BANKING CHANNELS AND HAVE BEEN DULY DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT OF BOTH T HE PARTIES AND THE TRANSACTIONS HAVE BEEN CONFIRMED BY THE RESPECTIVE PARTIES AND NOT REPUDIATED IN ANY MANNER THE CREDITWORTHINESS OF THE PARTIES IS PROVED BEYOND DO UBT 26. IN ALL THESE CASES ASSESSING OFFICER HAS NOT CONDUCTED ANY SUCH ENQUIRIES OR HAS BROUGHT ANYTHING ON RECOR D TO EVEN REMOTELY SUGGEST THAT THE MONIES RECEIVED BY THE AS SESSEES IN THE FORM OF THE IMPUGNED CREDITS RECORDED IN THEIR BOOKS OF ACCOUNT REPRESENT THE UNDISCLOSED OR UNACCOUNTED FU NDS/ INCOME OF THE ASSESSEES. APART FROM ALLEGING THAT N OTICES ISSUED BY THE LD. A.O TO FEW INVESTORS/LENDERS REMA INED UNSERVED OR NON-COMPLIED WITH AND THAT THE ASSESSEE S FAILED TO PRODUCE DIRECTORS OF THE INVESTORS/LENDERS COMPA NIES AND THAT SOME OF THE INVESTOR COMPANIES DID NOT HAVE TH EIR OWN PROFIT MAKING APPARATUS WHICH CANNOT BE SOLE REASON S TO SUSTAIN ADDITIONS U/S 68. THE LD. A.OS HAVE NOT BRO UGHT ANYTHING ON RECORD TO DISPROVE/REFUTE THE GENUINENE SS OF THE EVIDENCES FURNISHED BY THE ASSESSEES HEREIN. THE LD . A.OS HAVE FAILED TO PROVE THAT THE IMPUGNED CREDITS DESP ITE APPEARING IN THE NAMES OF OTHER ENTITIES STILL REPR ESENTS INCOME FROM SUPPRESSED/UNDISCLOSED SOURCES OF THE ASSESSEES HEREIN BEFORE NAILING THE ASSESSEES AND F ASTENING THE ASSESSEES WITH IMPUGNED LIABILITIES U/S.68. THE FUND FLOW STATEMENTS SHOWING THE ULTIMATE SOURCE OF FUNDS (BE ING THE UNACCOUNTED FUNDS OF BEL) WITH RESPECT TO THE TRANS ACTIONS IMPUGNED IN THE CASE OF EACH OF THE ASSESSEES HEREI N FILED IN 91 PB-20 FURTHER CORROBORATE/STRENGTHEN THE ASSESSEES AVERMENT THAT THE IMPUGNED FUNDS DO NOT REPRESENT I NCOME FROM UNDISCLOSED SOURCE OF ANY OF THE ASSESSEES HER EIN. 27. IN MOST OF THE CASES THE ASSESSING OFFICER HAS SOUGHT TO JUSTIFY THE ADDITION RELYING ON THE FACT THAT NOTICE S U/S.133(6) SENT TO SOME OF THE PARTIES HAVE RETURNED UNSERVED AND ASSESSEE HAS FAILED TO PRODUCE THE DIRECTORS OF THE PARTIES. IN THIS REGARD LD. COUNSEL SUBMITTED THAT IN MOST OF T HE CASES THE PARTIES HAVE DIRECTLY RESPONDED TO THE ASSESSIN G OFFICER AND FURNISH ALL THE REQUISITE INFORMATION IN RESPON SE TO NOTICES U/S.133(6). EVEN OTHERWISE ALSO THERE IS N O LEGAL OBLIGATION ON THE ASSESSEE TO PRODUCE DIRECTOR OR O THER REPRESENTATIVE ETC. BEFORE THE ASSESSING OFFICER AN D THIS FAILURE BY ITSELF COULD NOT JUSTIFY ADDITION WHERE T HE ASSESSEE HAS PRODUCED EXTENSIVE MATERIALS AND EVIDENCES AND ALSO POINTING OUT THAT REGULAR ASSESSMENT U/S.143(3)/147 HAVE BEEN MADE IN THE CASE OF THOSE FUNDS. IN SUPPORT H E RELIED UPON THE FOLLOWING JUDGMENTS: I. PR.CIT VS. RAKAM MONEY MATTER (P) LTD. (2018) 94 CC H 333 (DEL HC). II. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . M/S. ORCHID INDUSTRIES PVT. LTD. IN ITA NO. 1433 OF 2014 III. CIT VS. JALAN HARD COKE LTD. REPORTED IN (95 TAXMANN.COM 330) IV. CIT VS. DIVING LEASING & FINANCE LTD. (2007) 158 TAXMAN 440 (DEL) V. CRYSTAL NETWORKS (P) LTD. VS. CIT 353 ITR 171 VI. ITO WARD-12(4) KOLKATA VS. M/S. SAKTIDEEP SUPPLIE RS PVT. ITA NO.2444/KKOL/2016 (ITAT KOLKATA) 92 28. THUS MERE NON PRODUCTION OF DIRECTORS AND I N SOME CASES NON SERVICE OF NOTICES U/S.133(6) CANNOT BE A DVERSELY VIEWED BECAUSE IN MOST OF THE CASES ALL THE LENDER S WHO HAVE INVESTED IN THE ASSESSEE COMPANY ASSESSMENTS HAVE BEEN MADE IN THEIR HANDS AND SIMILAR ADDITION U/S.68 HAV E BEEN MADE INDIVIDUALLY IN THE HANDS OF THOSE INVESTOR/LE NDER COMPANY WHOSE CASES ARE ALSO PENDING FOR DISPOSAL E ITHER BEFORE THIS TRIBUNAL OR THE FIRST APPELLATE AUTHORI TY. THE DETAILS OF SUCH COMPANIES BY WAY OF AN EXAMPLE WERE GIVEN AS UNDER: NAME OF ASSESSEE NAMES OF INVESTORS/ LENDERS QUANTUM OF ADDITION MADE BY THE A.O U/S 68 W.R.T FUNDS RECEIVED FROM THE INVESTORS/LENDERS YEAR IN WHICH ADDITION U/S 68 WAS MADE IN THE HANDS OF INVESTORS/ LENDERS SECTION UNDER WHICH ASSESSMENT WAS COMPLETED IN THE CASE OF INVESTORS/ LENDERS QUANTUM OF ADDITION IN THE HANDS OF INVESTORS/ LENDERS NATURE OF ADDITION IN THE CASE OF INVESTORS/ LENDERS WHETHER ADDITION WAS CONFIRMED/ DELETED BY C.I.T(A) IN THE CASE OF INVESTORS/ LENDERS PENDENCY OF APPEAL IN THE CASE OF INVESTORS/ LENDERS ANGEL CEMENT PVT.LTD. 1. A.Y. 2012 - 13: - A) SHARE CAPITAL FULLY PAID UP SINTEX CONSUMER ELECTRONICS PVT.LTD. RS. 1 00 00 000 A.Y.2012 - 13 143(3) 1)RS. 78 22 80 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 9 OF THE CAPTIONED MATTERS IN THE INDEX SUPRA) A.Y.2012 - 13 147 1)RS. 3 90 00 000 ADVANCE RECECIVED NA C.I.T(A) 2) RS. 3 90 000 COMMI SSION EXPENSE ( 3.9 CR @ 1%) VENUS RECRUITER PVT.LTD. RS. 30 00 00 000 A.Y.2012 - 13 147 1) RS. 10 00 00 000 UNEXPLAINED CREDIT NA C.I.T(A) 2) RS. 30 00 000 COMMISSION EXPENSE( 10CR @3%) SUPREME PLACEMENT SERVICES PVT.LTD. RS. 15 00 00 000 A .Y.2012 - 13 143(3) RS. 72 43 00 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 16) 93 JANITOR INFRASTRUCT URE PVT.LTD. RS. 15 00 00 000 A.Y.2012 - 13 147 RS. 36 00 00 000 SHARE CAPITAL CONVERTED PARTLY TO FULLY NA C.I.T(A) B) SHARE CAPITAL PARTLY PAID UP:- SINTEX CONSUMER ELECTRONICS PVT.LTD. RS. 2 00 00 000 A.Y.2012 - 13 143(3) RS. 78 22 80 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 9) A.Y.2012 - 13 147 1)RS. 3 90 00 000 ADVANCE RECECIVED NA C.I.T(A) 2) RS. 3 90 000 COMMISSION EXPENSE ( 3.9 CR @ 1%) DELIGHT RESORTS PVT.LTD. A.Y. 2012 - 13: - ADVANCE RECEIVED REINFORCE RECRUITER PVT.LTD. RS. 5 50 00 000 A.Y.2012 - 13 147 RS. 4 50 00 000 CURRENT LIABILITIES - UNEXPLAINED CREDIT U/S 68 NA C.I.T(A) MARVELOUS CEMENT PVT LTD RS. (5 70 00 000) A.Y.2012 - 13 147 RS. 2 58 86 811 COMMISSION INCOME NA C.I.T(A) JINGLE BELLS ALUMINIUM PVT.LTD. A.Y. 2012 - 13: - SHARE CAPITAL: - ROSE CAPITAL SERVICES PVT.LTD. RS 12 00 00 000 A.Y. 2012 - 13 147 RS. 72 00 00 000 SHARE CAPITAL NA C.I.T(A) CLASSIC TRANPORT ATION PRIVATE LIMITED RS. 12 00 00 000 A.Y. 2012 - 13 147 RS. 1 04 00 000 COMMISSION INCOME( RS 52 CR @2% ) NA C.I.T(A) PITTIE STRIPS PRIVATE LIMITED RS. 12 00 00 000 A.Y. 2012 - 13 147 RS. 20 00 00 000 UNEXPLAINED MONEY U/S 69A NA C.I.T(A) BSN CAPITAL SERVICES PVT.LTD. RS. 12 00 00 000 A.Y. 2012 - 13 147 RS. 72 50 00 000 SHARE CAPITAL NA C.I.T(A) KASPER INFORMATIO N TECHNOLOGY PVT.LTD. 1. A.Y. 2012 - 13: - A) SHARE CAPITAL FULLY PAID UP:- QUADREL INFRASTRUCT URE PVT.LTD. RS. 1 00 00 000 A.Y. 2012 - 13 147 RS. 73 70 07 363 SHARE CAPITAL & UNEXPLAINED CREDIT NA C.I.T(A) BOOST MINERALS & MINING PVT.LTD. R S. 20 00 00 000 A.Y. 2012 - 13 147 RS. 4 04 000 COMMISSION INCOME( DEBIT & CREDIT RS8.08 CR @ 0.5%) NA C.I.T(A) HOUSTON BUILDWELL PVT.LTD. RS. 20 00 00 000 A.Y. 2012 - 13 147 RS. 92 00 000 COMMISSION INCOME ( SHARE CAPITAL RS 46 CR @ 2%) NA C.I.T(A) 94 B) SHARE CAPITAL PARTLY PAID UP:- QUADREL INFRASTRUCT URE PVT.LTD. RS. 2 00 00 000 A.Y. 2012 - 13 147 RS. 73 70 07 363 SHARE CAPITAL & UNEXPLAINED CREDIT NA C.I.T(A) KASPER INFORMATIO N TECHNOLOGY PVT.LTD. 2. A.Y. 2013 - 14: - A) SHARE CAPITAL CONVERTED INTO PARTLY PAID UP TO FULLY PAID UP LANDSKY REAL ESTATE PVT.LTD. RS. 8 00 00 000 A.Y. 2013 - 14 143(3) RS. 18 60 00 000 SHARE CAPITAL CONFIRMED ITAT (ASSESSEE HEREIN AT SL. NO. 8) SINTEX CONSUMER ELECTRONICS PVT.LTD. 1. A.Y. 2012 - 13: - A) SHARE CAPITAL: - JINGLE BELLS ALUMINIUM PVT.LTD. RS. 4 55 70 000 (BONUS) A.Y.2012 - 13 143(3) RS. 62 00 00 000 SHARE CAPITAL FRESH ADDITION ON ACCOUNT OF ALLEGED COMMISSION INCOME ITAT (ASSESSEE HEREIN AT SL. NO. 5) ANGEL CEMENT PVT.LTD. RS. 4 37 10 000 (BONUS) A.Y.2012 - 13 143(3) RS. 120 70 00 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 1) FROZEN IRON & STEEL PVT.LTD. RS. 9 00 00 000 A.Y.2012 - 13 147 RS. 1 00 00 000 ALLEGED ACCOMODATIONS ENTRIES NA C.I.T(A) REINFORCE RECRUITER PVT.LTD. RS. 9 00 00 000 A.Y.2012 - 13 147 RS. 4 50 00 000 CURRENT LIABILITIES - UNEXPLAINED CREDIT U/S 68 NA C.I.T(A) STARLIGHT CONSUME R ELECTRONI C PRIVATE LIMITED 1. A.Y. 2012 - 13: - A) SHARE CAPITAL FULLY PIAD UP GLOBUS REALINFRA PVT LTD RS. 15 00 00 000 A.Y. 2012 - 13 143(3) RS. 98 49 40 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 17) TREMEND OUS MINING & MINERALS PRIVATE LIMITED RS. 15 00 00 000 A.Y. 201 2 - 13 147 RS. 25 00 00 000 SHARE CAPITAL NA C.I.T(A) B) SHARE CAPITAL PARTLY PAID UP SUPER STAR AGENCY PRIVATE LIMITED RS. 75 00 000 A.Y. 2012 - 13 143(3) RS. 42 25 00 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 15) 95 STYLI SH CONSTRUCTI ON PVT.LTD. 1. A.Y. 2012 - 13: - B) OTHER CURRENT LIABILITES MARVELOUS CEMENT PVT.LTD. RS 5 70 00 000 A.Y.2012 - 13 147 RS. 2 58 86 811 COMMISSION INCOME NA C.I.T(A) MATCHLESS INFRASTRUCT URE PVT.LTD. RS. 5 00 0 00 A.Y.2012 - 13 147 RS. 4 63 00 000 OTHER CURRENT LIABILITIES NA C.I.T(A) VENUS RECRUITER PVT.LTD. RS. 6 00 00 000 A.Y.2012 - 13 147 1) RS. 10 00 00 000 UNEXPLAINED CREDIT NA C.I.T(A) 2) RS. 30 00 000 COMMISSION EXPENSE( 10CR @3%) SUKHNA REAL ESTATE PVT.LTD.. A.Y. 2012 - 13: - A) SHARE CAPITAL: - DELIGHT RESORTS PVT.LTD. RS.8 68 80 000 (BONUS) A.Y.2012 - 13 143(3) 1. RS. 10 00 00 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 2) 2. RS. 66 56 47 519 ADVANCE RECEIVED 3. RS. 5 22 890 UNVERIFIABLE EXPENSES SUNLIGHT TOUR & TRAVEL PVT.LTD. RS. 2 89 60 000 (BONUS) A.Y.2012 - 13 143(3) RS. 52 01 68 000 SHARE CAPITAL ITAT (ASSESSEE HEREIN AT SL. NO. 14) NAVAYUGA CONSULTANC Y PVT.LTD RS. 36 20 000 (BONUS) A.Y.2012 - 13 147 RS. 15 00 00 000 SHARE CAPITAL NA C.I.T(A) ANGEL CEMENT PVT.LTD. RS. 30 00 00 000 A.Y.2012 - 13 143(3) RS. 52 01 68 000 SHARE CAPITAL ITAT (ASSESSEE HEREIN AT SL. NO. 1) SUKHNA STEEL PVT LTD A.Y. 2012 - 13: - A) SHARE CAPITAL TRACK CASTING (INDIA) PRIVATE LIMITED RS. 19 60 00 000 A.Y.2012 - 13 143(3) 1) RS. 31 00 00 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 19) 2) RS.7 75 000 COMMISSION DELETED ITAT TREMEND OUS MINING & MINERALS PRIVATE LIMITED RS. 40 00 000 A.Y. 2012 - 13 147 RS. 25 00 00 000 SHARE CAPITAL NA C.I.T(A) JAWAHAR CREDIT & HOLDINGS PRIVATE LIMITED RS.1 58 000 (BONUS) A.Y. 2012 - 13 143(3) RS. 73 50 00 000 SHARE CAPITAL FRESH ADDITION ON ACCOUNT OF ALLEGED COMMISSION INCOME ITAT (ASSESSEE HEREIN AT SL. NO. 4) SUNLIGHT TOUR & TRAVEL PVT.LTD. A.Y. 2012 - 13: - A) SHARE CAPITAL: - 96 SUKHNA REAL ESTATE PVT.LTD. RS. 5 46 84 000 (BONUS) A.Y.2012 - 13 143(3) RS. 80 63 40 000 SHA RE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 12) NAVAYUGA CONSULTANC Y PVT.LTD RS. 5 46 84 000 (BONUS) A.Y.2012 - 13 147 RS. 15 00 00 000 SHARE CAPITAL NA C.I.T(A) DELIGHT RESORTS PVT.LTD. RS. 1 08 00 000 (BONUS) A.Y.2012 - 13 143(3) 1. RS. 10 0 0 00 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 2) 2. RS. 66 56 47 519 ADVANCE RECEIVED 3. RS. 5 22 890 UNVERIFIABLE EXPENSES JANITOR INFRASTRUCT URE PVT.LTD. RS. 20 00 00 000 A.Y.2012 - 13 147 RS. 36 00 00 000 SHARE CAP ITAL CONVERTED PARTLY TO FULLY NA C.I.T(A) SUPER STAR AGENCY PRIVATE LIMITED A.Y. 2012 - 13: - A) SHARE CAPITAL FULLY PAID UP: BNR INFOTECH PRIVATE LIMITED RS. 5 00 00 000 A.Y. 2012 - 13 153C R.W.S 153A RS. 1 00 00 000 SALE OF SHARE NA C.I.T(A) JAWAHAR CREDIT & HOLDINGS PRIVATE LIMITED RS. 13 50 00 000 A.Y. 2012 - 13 143(3) RS. 73 50 00 000 SHARE CAPITAL ADDITION U/S 68 DELETED - FRESH ADDITION ON ACCOUNT OF ALLEGED COMMISSION INCOME ITAT (ASSESSEE HEREIN AT SL. NO. 4) SAV ROLI FINVEST LIMITED RS. 6 50 00 000 A.Y. 2012 - 13 147 RS. 80 00 00 000 SHARE CAPITAL NA C.I.T(A) B) SHARE CAPITAL PARTLY PAID UP STARLIGHT CONSUME R ELECTRONI C PRIVATE LIMITED (B) RS. 75 00 000 A.Y. 2012 - 13 143(3) 1) RS. 32 25 00 000 SH ARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 10) 143(3) 2) RS. 30 18 00 000 CURRENT LIABILITES DELETED ITAT SUPREME PLACEMENT SERVICES PVT.LTD. 2. A.Y. 2012 - 13: - A) SHARE CAPITAL FULLY PAID UP:- STYLISH CONSTRUCTIO N PVT.LTD. RS. 4 82 19 600 (BONUS) A.Y. 2012 - 13 143(3) 1. RS. 30 00 00 000 SHARE CAPITAL: DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 11) 2. RS. 31 60 00 000 OTHER CURRENT LIABILITES 97 29. UNDER THESE FACTS THE IDENTITY AND EXISTENCE AS WELL AS SOURCE OF THE CREDIT AND THE CREDITWORTHINESS STAND FULLY DISCHARGED IN CASES OF ALL THE ASSESSEE-COMPANIES. THE GLOBUS REALINFRA PVT LTD ( FORMERLY KNOWN AS SUR BUILDCON PVT LTD) 2. A.Y. 2012-13:- A) SHARE CAPITAL FULLY PAID UP:- TREMEND OUS MINING & MINERALS PRIVATE LIMITED RS. 3 40 40 000 (BONUS) A.Y. 2012 - 13 147 RS. 25 00 00 000 SHARE CAPITAL NA C.I.T(A) JAWA HAR CREDIT & HOLDINGS PRIVATE LIMITED RS. 25 00 00 000 A.Y. 2012 - 13 143(3) RS. 73 50 00 000 SHARE CAPITAL ADDITION U/S 68 DELETED - FRESH ADDITION ON ACCOUNT OF ALLEGED COMMISSION INCOME ITAT (ASSESSEE HEREIN AT SL. NO. 4) BNR INFOTECH PRIVATE LIMITED RS. 15 00 00 000 A.Y. 2012 - 13 153C R.W.S 153A RS. 1 00 00 000 SALE OF SHARE NA C.I.T(A) SUKHNA STEEL PRIVATE LIMITED RS. 2 00 00 000 A.Y. 2012 - 13 143(3) RS. 26 16 80 000 SHARE CAPITAL DELETED ITAT (ASSESSEE HEREIN AT SL. NO. 13) B) SHARE CAPITAL PARTLY PAID UP:- TREMEND OUS MINING & MINERALS PRIVATE LIMITED RS. 35 00 000 A.Y. 2012 - 13 147 RS. 25 00 00 000 SHARE CAPITAL NA C.I.T(A) TRACK CASTING INDIA PRIVATE LIMITED 1. A.Y. 2012 - 13: - A) SHARE CAPITAL: JAWAHAR CREDIT & HOLDINGS PRIVATE LIMITED RS. 10 00 00 000 A.Y. 2012 - 13 143(3) RS. 73 50 00 000 SHARE CAPITAL ADDITION U/S 68 DELETED - FRESH ADDITION ON ACCOUNT OF ALLEGED COMMISSION INCOME ITAT (ASSESSEE HEREIN AT SL. NO. 4) 98 DEPARTMENT CANNOT BLOW HOT AND COLD FOR MAKING SIMI LAR ADDITIONS IN THE HANDS OF THE INVESTOR/LENDER COMPA NY U/S.68 ON THE SAME AMOUNT AND THEN AGAIN TREATING IT TO BE BOGUS CREDIT ENTRY OR UNACCOUNTED MONEY OF THE ASSESSEE C OMPANY. 30. APART FROM THAT HE SUBMITTED THAT THE ASSES SEE- COMPANIES HAVE FURNISHED THE BANK STATEMENTS OF THE INVESTOR/LENDER COMPANIES WHICH PROVE BEYOND DOUBT THAT THE INVESTORS/LENDERS HAD ADEQUATE FUNDS FOR MAKING THE IMPUGNED INVESTMENTS/DEPOSITS IN THE ASSESSEE-COMPA NIES. FURTHER THE ASSESSEE(S) HAVE ALSO FILED THE AUDITE D ACCOUNTS OF THE INVESTOR/LENDER COMPANIES WHICH CLEARLY DEPI CT THAT SUCH INVESTORS/LENDERS HAD SUFFICIENT NET WORTH (I. E. SHARE CAPITAL PLUS RESERVES & SURPLUS) AND/OR BORROWINGS TO MAKE THE IMPUGNED INVESTMENTS/DEPOSITS IN THE ASSESSEE(S ) HEREIN. AS HELD BY THE HON'BLE BOMBAY HIGH COURT IN THE CAS E OF PCIT VS. AMI INDUSTRIES (SUPRA) CITED SUPRA THAT IT IS NOT NECESSARY THAT THE INVESTMENTS/LOAN SHOULD BE MADE BY THE INVESTORS/LENDERS OUT OF THEIR TAXABLE INCOME ONLY. THE SAME MAY BE MADE OUT OF BORROWED FUNDS. THEREFORE THE O BJECTIONS RAISED BY THE LD. A.O.S THAT IN THE INSTANT CASE TH AT THE BANK STATEMENTS OF THE INVESTOR/LENDER COMPANIES REVEALE D THAT THEY HAD RECEIVED HUGE AMOUNTS FROM OTHER COMPANIES WHICH WERE SUBSEQUENTLY TRANSFERRED TO THE ASSESSEE(S) HE REIN IS OF NO AID TO THE DEPARTMENT ON THE CONTRARY THE SAME ONLY GOES TO SHOW THE AVAILABILITY OF ADEQUATE FUNDS (WH ETHER OUT OF BORROWED FUNDS OR FUNDS RECEIVED IN THE FORM OF SHARE CAPITAL BY THE INVESTORS/LENDERS FROM OTHER ENTITIE S) IN THE 99 BANK ACCOUNTS OF THE INVESTORS/LENDERS TO MAKE THE IMPUGNED INVESTMENTS/LOANS TO THE ASSESSEE(S) HEREI N. SINCE THE ASSESSEE(S) HEREIN FILED COGENT DOCUMENTARY EVI DENCES DULY DISCHARGING THEIR ONUS OF ESTABLISHING THE NEC ESSARY INGREDIENTS OF SECTION 68 WHICH REMAINED UNREFUTED/ UNCONTROVERTED BY THE A.Q(S) AND HENCE NO LIABILIT Y U/S 68 COULD BE LEGALLY FASTENED UPON THE ASSESSEE(S) UNLE SS THE A.O(S) BROUGHT ON RECORD TANGIBLE MATERIAL/EVIDENCE TO PROVE THAT THE AMOUNTS WHICH HAD BEEN RECEIVED BY THE INVESTORS/LENDERS FROM THEIR SUB-INVESTORS/SUB-LEND ERS WERE ACTUALLY RECEIVED BY SUCH SUB-INVESTORS/SUB-LENDERS FROM THE ASSESSEE(S) HEREIN AND THAT THE SAME REPRESENTED UNACCOUNTED FUNDS OF THE ASSESSEE(S) HEREIN FROM UNEXPLAINED SOURCES. 31. IN SO FAR AS THE CASES OF THE ASSESSEES PERT AINING TO ASSESSMENT YEAR 2013-14 IN ORDER TO PROVE THE BURD EN OF IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTION WITH REFERENCE TO TR ANSACTION BETWEEN ASSESSEE AND CREDITORS THE SAME CANNOT BE EXTENDED TO INCLUDE SOURCE OF SUCH CREDITOR FOR THE PURPOSE OF SECTION 68. AFTER REFERRING TO THE VARIOUS JUDGMENTS THE J UDICIAL PRINCIPLES SUMMED UP BY HIM ARE AS UNDER: (I) IN ORDER TO ESTABLISH THE RECEIPT OF CASH CREDIT AS REQUIRED UNDER SECTION 68 THE ASSESSES MUST SATISF Y THREE IMPORTANT CONDITIONS NAMELY (A) IDENTITY OF THE CREDITOR/INVESTOR (B) GENUINENESS OF THE TRANSACTI ON 100 AND (C) FINANCIAL CAPABILITY OF THE PERSON GIVING T HE CASH CREDIT TO THE ASSESSES I.E. THE CREDITWORTHI NESS OF THE CREDITOR/INVESTOR. (II) THE BURDEN OF THE ASSESSEES TO PROVE THE GENUINE NESS OF THE TRANSACTIONS AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR MUST REMAIN CONFINED TO THE TRANSACTIO NS WHICH HAVE TAKEN PLACE BETWEEN THE ASSESSEE AND THE CREDITOR/INVESTOR. (III) THE CREDITOR'S/INVESTORS CREDITWORTHINESS HAS T O BE JUDGED VIS-A-VIS THE TRANSACTIONS WHICH HAVE TAKE N PLACE BETWEEN THE ASSESSEE AND THE CREDITOR/INVESTO R AND IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CREDITOR/INVESTOR OR OF THE GENUINENESS OF THE TRANSACTION WHICH TOOK PLACE BETWEEN THE CREDITOR/INVESTOR AND SUB-CREDITOR AND/ OR CREDITWORTHINESS OF THE SUB-CREDITORS. (IV) IT IS NOT THE BURDEN OF THE ASSESSEE TO PROVE TH AT THE MONEY ADVANCED/INVESTED BY THE CREDITOR/INVESTOR IS PROPERLY TAXED. (V) ONCE THE ASSESSEE ESTABLISHES THAT THE ASSESSEE HAS RECEIVED THE IMPUGNED AMOUNT FROM THE CREDITOR/INVESTOR BY WAY OF CHEQUES THE ASSESSEE MUST BE TAKEN TO HAVE PROVED THAT THE CREDITORS/INVESTORS HAD THE CREDITWORTHINESS TO ADVANCE THE LOANS/SHARE CAPITAL. THEREAFTER THE BURDEN SHIFTS TO THE A.O. TO PROVE THE CONTRARY. 101 (VI) ON FAILURE ON THE PART OF THE CREDITORS/INVESTOR S TO SHOW THAT THEIR SUB-CREDITORS AND CREDITWORTHINESS TO ADVANCE THE SAID AMOUNTS TO THE ASSESSEE THESE AMOUNTS AS A COROLLARY CANNOT UNDER THE LAW BE TREATED AS THE ASSESSEE'S INCOME FROM THE UNDISCLOS ED SOURCES WHEN THERE IS NEITHER DIRECT NOR CIRCUMSTANTIAL EVIDENCE ON RECORD THAT THE SAID LOA N AMOUNTS/SHARE CAPITAL ACTUALLY BELONGS TO OR ARE OWNED BY THE ASSESSEE. (VII) IN ORDER TO FASTEN LIABILITY ON THE ASSESSEE THE A .0 IS REQUIRED TO SHOW THAT THE AMOUNTS WHICH HAVE COME TO THE HANDS OF THE CREDITORS/INVESTORS FROM THE HA NDS OF THE SUB-CREDITORS ARE ACTUALLY RECEIVED BY THE SUB- CREDITORS FROM THE ASSESSEE. 32. APPLYING THE ABOVE JUDICIAL PRINCIPLES TO THE CASES AT HAND THE ASSESSEES HEREIN FILED DETAILED DOCUMENTA RY EVIDENCES IN THE FORM OF DULY SIGNED CONFIRMATION O F INVESTORS/LENDERS (PARTIES) DETAILS OF PAN COPIES OF ITR DULY ESTABLISHING THE IDENTITY OF THE PARTIES AND GENUIN ENESS OF THE TRANSACTIONS. THE ASSESSEES ALSO FILED BANK STATEME NTS OF THE PARTIES DULY ESTABLISHING THE CREDITWORTHINESS OF T HE PARTIES TO INVEST IN THE SHARE CAPITAL OF OR ADVANCE LOANS TO THE ASSESSEE COMPANIES. THUS THE ASSESSEES EFFECTIVELY DISCHARG ED THE BURDEN CAST UPON THEM U/S 68 OF PROVING IDENTITY OF THE INVESTORS THE GENUINENESS OF THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE PARTIES WITH RESPECT TO THE TRANSACTIONS THAT TOOK PLACE BETWEEN THE ASSESSEES AND THE 102 INVESTORS. FOR THE CASES PERTAINING TO THE PERIOD P RIOR TO A.Y. 2013-14 IT WAS NOT THE ASSESSEES BUSINESS TO FIND OUT OR PROVE THE SOURCE OF FUNDS OF THE INVESTORS/LENDERS. SINCE THE ASSESSES FILED THE BANK STATEMENTS OF THE PARTIES C ONCLUSIVELY PROVING THAT THE IMPUGNED SUMS WERE RECEIVED THROUG H NORMAL BANKING CHANNELS FROM THE BANK ACCOUNTS OF T HE PARTIES THE BURDEN OF PROVING THE GENUINENESS OF T HE TRANSACTIONS BETWEEN THE ASSESSEES AND THE PARTIES AND THE CREDITWORTHINESS OF THE PARTIES TO INVEST IN THE SH ARE CAPITAL OF THE ASSESSEE COMPANIES STOOD DISCHARGED. ONCE THE ASSESSEES ESTABLISHED THE IDENTITY OF THE PARTIES THE GENUINENESS OF THE TRANSACTIONS AND THE CREDITWORTH INESS OF THE PARTIES TO INVEST IN THE SHARE CAPITAL OF OR AD VANCE LOANS TO THE ASSESSEE COMPANIES THE BURDEN SHIFTED TO TH E REVENUE TO PROVE THE CONTRARY. THE LD. A.O HAS FAIL ED TO DISCHARGE THE SECONDARY ONUS OF DEMOLISHING/DISPROV ING THE GENUINENESS OF THE DOCUMENTARY EVIDENCES FILED BY T HE ASSESSEES. AS HELD IN THE CASES CITED ABOVE BEFORE FASTENING ANY LIABILITY UPON THE ASSESSEES U/S 68 THE A.OS W ERE REQUIRED TO SHOW BY BRINGING ON RECORD TANGIBLE MAT ERIAL THAT THE AMOUNTS RECEIVED AS SHARE CAPITAL/LOANS FROM TH E INVESTORS/LENDERS ACTUALLY EMANATED FROM THE COFFER S OF THE ASSESSEES OR REPRESENTED THE UNDISCLOSED INCOME OF THE ASSESSEES. 33. THOUGH THE PROVISO TO SECTION 68 INSERTED BY FINANCE ACT 2012 W.E.F. 01.04.2013 CASTING THE ADDITIONAL ONUS ON THE ASSESSEE OF PROVING THE SOURCE OF THE SOURCE RA ISING THE 103 SHARE SUBSCRIPTION CANNOT BE HELD TO BE RETROSPECTI VE WHICH HAS BEEN HELD BY HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. M/S. GAGANDEEP INFRASTRUCTURE PVT. LTD. (20 17) 80 TAXMANN.COM 272 (BOMBAY) WHEREIN IT WAS OBSERVED AND HELD AS UNDER: (E) WE FIND THAT THE PROVISO TO SECTION 68 OF T HE ACT HAS BEEN INTRODUCED BY THE FINANCE ACT 2012 WITH EF FECT FROM 1ST APRIL 2013. THUS IT WOULD BE EFFECTIVE O NLY FROM THE ASSESSMENT YEAR 2013-14 ONWARDS AND NOT FOR THE SUBJECT ASSESSMENT YEAR. IN FACT BEFORE THE TRIBUN AL IT WAS NOT EVEN THE CASE OF THE REVENUE THAT SECTION 6 8 OF THE ACT AS IN FORCE DURING THE SUBJECT YEARS HAS TO BE READ/UNDERSTOOD AS THOUGH THE PROVISO ADDED SUBSEQUENTLY EFFECTIVE ONLY FROM 1ST APRIL 2013 WA S ITS NORMAL MEANING. THE PARLIAMENT DID NOT INTRODUCE TO PROVISO TO SECTION 68 OF THE ACT WITH RETROSPECTIVE EFFECT NOR DOES THE PROVISO SO INTRODUCED STATES THAT IT W AS INTRODUCED FOR REMOVAL OF DOUBTS' OR THAT IT IS 'DECLARATORY'1. THEREFORE IT IS NOT OPEN TO GIVE IT RETROSPECTIVE EFFECT BY PROCEEDING ON THE BASIS TH AT THE ADDITION OF THE PROVISO TO SECTION 68 OF THE ACT IS IMMATERIAL AND DOES NOT CHANGE THE INTERPRETATION O F SECTION 68 OF THE ACT IS IMMATERIAL AND DOES NOT CH ANGE THE INTERPRETATION OF SECTION 68 OF THE ACT BOTH BE FORE AND AFTER THE ADDING OF THE PROVISO. IN ANY VIEW OF THE MATTER THE THREE ESSENTIAL TESTS WHILE CONFIRMING THE PRE- PROVISO SECTION 68 OF THE ACT LAID DOWN BY THE COURTS NAMEL Y THE 104 GENUINENESS OF THE TRANSACTION IDENTITY AND THE CA PACITY OF THE INVESTOR HAVE ALL BEEN EXAMINED BY THE IMPUG NED ORDER OF THE TRIBUNAL AND ON FACTS IT WAS FOUND SAT ISFIED. FURTHER IT WAS A SUBMISSION ON BEHALF OF THE REVENU E THAT SUCH LARGE AMOUNT OF SHARE PREMIUM GIVES RISE TO SUSPICION ON THE GENUINENESS (IDENTITY) OF THE SHAREHOLDERS I.E. THEY ARE BOGUS. THE APEX COURT IN LOVELY EXPORTS (PJ LTD. (SUPRA) IN THE CONTEXT TO THE PRE- AMENDED SECTION 68 OF THE ACT HAS HELD THAT WHERE THE REVEN UE URGES THAT THE AMOUNT OF SHARE APPLICATION MONEY HA S BEEN RECEIVED FROM BOGUS SHAREHOLDERS THEN IT IS FO R THE INCOME TAX OFFICER TO PROCEED BY REOPENING THE ASSESSMENT OF SUCH SHAREHOLDERS AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW. IT DOES NOT ENTITLE THE REVENUE TO ADD THE SAME TO THE ASSESSEES INCOME AS UNEXPLA INED CASH CREDIT. (F) IN THE ABOVE CIRCUMSTANCES AND PARTICULARLY IN VIEW OF THE CONCURRENT FINDING OF FACT ARRIVED AT BY THE CL . T(A) AND THE TRIBUNAL THE PROPOSED QUESTION OF LAW DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. 34. APART FROM THAT ASSESSEE HAS SUCCESSFULLY ES TABLISHED THE SOURCE OF THE SOURCE EVEN FOR THE CASES PERTAIN ING TO ASSESSMENT YEAR 2013-14 WHICH IS EVIDENT FROM THE F OLLOWING DOCUMENTARY EVIDENCES. 105 NAME OF THE ASSESSEE A.Y & QUANTUM OF ADDITIONS U/S 68 NAMES OF THE INVESTOR/LENDER COMPANIES DOCUMENTS FURNISHED BEFORE THE LOWER AUTHORITIES WITH RESPECT TO THE INVESTORS/LENDERS PB REFERENCE (ITAT) DELIGHT RESORTS PVT. LTD. A.Y. 2014-15 : ADVANCE RECEIVED- RS. 37.70 CRORES : (I) RS. 3.70 CRORES (II) RS. 34 CRORES (I) BHISHAM ENERGY LTD. (II) JANITOR INFRASTRUCTURE PVT. LTD. (I) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS (II) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS/ ASST. ORDER PB-3B PGS. 1-14 PGS. 15-30 KASPER INFORMATION TECHNOLOGY PVT. LTD. A.Y. 2013-14 SHARE CAPITAL RS. 16 CRORES (I) RS. 8 CRORES (II) RS. 8 CRORES (I) LANDSKY REAL ESTATE PVT. LTD. (II) QUADREL INFRASTRUCTURE PVT. LTD. (I) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS/ ASST. ORDER 143(3) (II) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS/ ASST. ORDER 143(3) PB-7B PGS. 1-24 PGS. 25-39 LANDSKY REAL ESTATES PVT. LTD. A.Y. 2013-14 A. SHARE CAPITAL 16 CRORES (I) RS. 8 CRORES (II) RS. 8 CRORES B. CURRENT LIABILITIES OTHER PAYABLES (I) RS. 1.30 CRORES (II) RS. 1.30 CRORES (I) WINFIELDS IRON & STEEL PVT. LTD. (II) QUADREL INFRASTRUCTURE PVT. LTD. (I) CANTABILE MINERALS & MININGS PVT. LTD. (II) ANGEL CEMENT PVT. LTD. (I) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS/ ASST. ORDER 143(3) (II) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS/ ASST. ORDER 143(3) (I) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS (II) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS PB-8B PGS. 1-15 PGS. 16-29 PGS. 30-43 PGS. 44-58 GLOBUS REAL INFRA PVT. LTD. (EARLIER KNOWN AS SUR BUILDCON PVT. LTD.) A.Y. 2013-14 A. SHARE CAPITAL 5.60 CRORES: (I) RS. 1.20 CRORES (II) RS. 1.40 CRORES (III) RS. 80 LACS (IV) RS. 1 CRORE (V) RS. 1.20 CRORES B. UNSECURED LOAN RS. 2.955 CRORE (I) RS. 1.165 CRORES (I) KBN INFRASTRUCTURE PVT. LTD. (II) TREMENDOUS MINING & MINERALS PVT. LTD. (III) NRA IRON & STEEL PVT. LTD. (IV) VISTRAT REAL ESTATE PVT. LTD. (V) UNA POWER PVT. LTD. (I) VISTRAT REAL ESTATE PVT. LTD. (I) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS/ASST. ORDER (II) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS (III) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS (IV) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS (V) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED PB-18B PGS. 1-21 PGS. 22-42 PGS. 43-62 PGS. 63-84 PGS. 85-102 PGS. 63 67- 106 (II) RS. 80 LACS (III) RS. 99 LACS (II) ADAMINE CONSTRUCTION PVT. LTD. (III) SUPER STAR AGENCY PVT. LTD. ACCOUNTS/ ASST ORDER (I) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS (II) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS (III) CONFIRMATION/ ITR/ BANK STATEMENT/ AUDITED ACCOUNTS 79 80-84 103-105 PGS. 106-124 PGS. 125-143 35. THUS HE SUBMITTED THAT IN ALL THESE CASES NO ADDITION U/S.68 CAN BE MADE ON THE FOLLOWING GROUNDS:- (I) THE ASSESSEES HEREIN HAVE FURNISHED DETAILED DOCUMENTARY EVIDENCES DULY DISCHARGING THEIR ONUS O F ESTABLISHING THE IDENTITY AND CREDITWORTHINESS OF T HE INVESTORS AND THE GENUINENESS OF THE TRANSACTIONS. (II) THE DEPARTMENT HAS FAILED TO BRING ON RECORD A NY ADVERSE MATERIAL TO REJECT/DISPROVE THE EXPLANATION S AND EVIDENCES SUBMITTED BY THE ASSESSEES EXCEPT HARPING UPON THE NON-SERVICE OF NOTICES ISSUED U/S 133(6) IN FEW CASES WHICH AS JUDICIALLY OPINED IS NOT SUFFICIENT REASON IN ITSELF TO INVOKE SECTION 68. (III) THE ADDRESSES OF MOST OF THE INVESTORS/LENDER S HAD UNDERGONE A CHANGE RESULTING IN THE NON-SERVICE OF NOTICE. THE A.O HAS FAILED TO INQUIRE INTO THE SAID FACT. (IV) THE SUBSCRIBERS TO THE SHARE CAPITAL OR LENDE RS (AS THE CASE MAY BE) ARE DULY INCORPORATED BODIES AND ARE ASSESSED TO TAX. THEY DO EXIST AND THE DETAILS OF T HEIR 107 NAMES PAN AND ITR ACKNOWLEDGMENT BANK STATEMENTS AND ASSESSMENT ORDERS HAVE BEEN DULY FILED WITH THE LD. A.O. (V) SEVERAL INVESTOR/LENDER COMPANIES ARE ALSO ASSESSEES HEREIN WHICH ONCE AGAIN PROVES THEIR IDEN TITY AND EXISTENCE. (VI) THE INVESTMENTS MADE BY THE INVESTORS/LENDERS IN THE ASSESSEE COMPANIES HAVE BEEN DULY CONFIRMED BY THE INVESTORS/LENDERS AND THEIR CONFIRMATIONS HAVE BEEN PLACED ON RECORD. (VII) THE SUBSCRIBERS TO THE SHARE CAPITALS DID SUB SCRIBE TO THE SHARE CAPITAL OF THE ASSESSEE-COMPANIES AND SHARES WERE DULY ALLOTTED TO THEM IN MOST OF THE CASES. (VIII) THERE IS NO DENIAL AT ANY STAGE OF THE ASSES SMENT PROCEEDINGS BY ANY OF THE INVESTORS/LENDERS OF HAVI NG DEPOSITED MONEY IN THE ASSESSEE-COMPANIES. (IX) THE IMPUGNED AMOUNTS HAVE BEEN RECEIVED THROUGH UNDISPUTED BANKING CHANNELS. (X) THERE IS NO CASH DEPOSIT IN THE BANK ACCOUNT OF THE PARTIES FROM WHOM THE IMPUGNED AMOUNTS BY WAY OF SH ARE CAPITAL/ SHARE PREMIUM/LOANS HAVE BEEN RECEIVED. (XI) THE DOCUMENTS SUBMITTED BY THE ASSESSEE(S) ESTABLISH THAT THE MONEY CAME FROM THE INVESTORS/L ENDERS ACCOUNT AND IS NOWHERE CONNECTED WITH THE ASSESSEE COMPANIES. 108 (XII) THERE IS NO PROOF OR EVIDENCE TO SUGGEST THAT THE IMPUGNED SUMS ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE COMPANIES OR REPRESENTED THE UNDISCLOSED INCOMES OF THE ASSESSEE COMPANIES. (XIII) THE A.OS HAVE NOT BROUGHT ON RECORD OR CONFR ONTED THE ASSESSEES WITH ANY SUCH MONEY TRAIL OR CALCULAT ION OR DERIVATION TO SHOW THAT THE IMPUGNED SHARE CAPITAL/ LOANS & ADVANCES (AS THE CASE MAY BE) RECEIVED BY THE ASS ESSEES REPRESENTED THE UNACCOUNTED MONEY OF THE ASSESSEES ROUTED INTO THEIR BUSINESS IN THE FORM OF SHARE CAPITAL/LOANS & ADVANCES. (XIV) THE ASSESSMENTS OF SEVERAL INVESTOR/LENDER COMPANIES STAND COMPLETED U/S 143(3) OF THE ACT WHE REIN THE SOURCE OF FUNDS WITH THE INVESTOR/LENDER COMPAN IES AND THE INVESTMENTS MADE IN THE ASSESSEE COMPANY(IE S) HAVE BEEN ACCEPTED BY THE DEPARTMENT. KINDLY SEE TH E DETAILS OF ASSESSMENTS OF THE INVESTOR COMPANIES TA BULATED IN ANNEXURE 1 TO THIS SUBMISSION. THE ASSESSMENT OR DERS OF THE INVESTOR COMPANIES WERE FILED BEFORE THE REV ENUE AUTHORITIES AND FORM A PART OF THE DEPARTMENTAL REC ORDS. THUS IN LIGHT OF THE JUDGMENT OF THE COORDINATE BE NCH OF THE HONBLE ITAT DELHI IN THE CASE OF VIDYA PRAKAS HAN MANDIR PVT. LTD. VS. PCIT (SUPRA) IT CANNOT BE HEL D THAT THE NATURE AND SOURCE OF CREDIT FROM THE INVESTOR/SUBSCRIBING COMPANIES ARE NOT PROVED. (XV) IN THE CASES OF OTHER INVESTOR/LENDER COMPANIE S (KINDLY REFER TO THE SUMMARY OF THE ASSESSMENT DETA ILS OF 109 THE INVESTORS/LENDERS IN ANNEXURE 1) WHEREIN ADDITI ONS HAVE BEEN MADE IN THEIR HANDS U/S 68 IN ASSESSMENTS FRAMED U/S 143(3)/147 IN THEIR RESPECTIVE CASES ON ACCOUNT OF SHARE CAPITAL/LOANS RECEIVED BY SUCH COM PANIES TREATING THE SAME AS BELONGING TO AND REPRESENTING THE UNDISCLOSED INCOME OF SUCH COMPANIES THE SAME FUND S (OR PART THEREOF) WHEN RECEIVED BY THE ASSESSEES HEREIN AS SHARE CAPITAL/LOANS FROM SUCH COMPANIES CANNOT BE O NCE AGAIN ADDED IN THE HANDS OF THE ASSESSEE COMPANIES U/S 68 BY TREATING THE SAME AS BELONGING TO AND REPRESE NTING THE UNDISCLOSED/UNACCOUNTED FUNDS OF THE ASSESSEE COMPANIES AT THE SAME POINT IN TIME (AS HAS HAPPENE D IN THE INSTANT CASE). THUS THERE IS NO CLARITY IN THE STAND OF THE DEPARTMENT W.R.T. THE ALLEGED OWNERSHIP OF THE IMPUGNED FUNDS. (XVI) THE REASONS GIVEN BY THE A.OS IN MAKING THE IMPUGNED ADDITIONS ARE GENERIC IN NATURE AND NOT BA CKED BY ANY CONCRETE EVIDENCE. 36. ON THE ISSUE OF SHARE PREMIUM HE SUBMITTED T HAT IT HAS BEEN ADDED BY THE ASSESSING OFFICER U/S.68 OF THE H ONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. A.R. LEASING PVT. LTD. IN ITA NO. 361/2017 DATED: 03.07.2017 WHEREIN IT WAS HELD THAT IF THE A.O. DISREGARDS THE DOCUMENTS FURNISHED BY THE ASSESSEE TO DISCHARGE ONUS U/S. 68 AND COMES TO THE CONCLUSION THAT TRANSACTION OF RECEIVING MONEY AS S HARE CAPITAL WAS NOT A GENUINE ONE PRIMARILY BECAUSE THE PREMIUM CHARGED BY THE ASSESSEE WAS MUCH HIGHER THAN THE PR EVALENT 110 MARKET TREND THE ACTION OF THE A.O WAS NOT TENABLE UNLESS THE A.O HAD BROUGHT ON RECORD SOME MATERIAL TO SHOW THAT CONFIRMATION AND OTHER EVIDENCE PLACED BY THE ASSES SEE WAS NOT GENUINE HE COULD NOT HAVE SIMPLY DISCARDED THE DOCUMENTS PRODUCED BY THE ASSESSEE. SINCE THE PROVI SIONS OF SEC 56(2)(VIIB) OF THE ACT IS INTRODUCED W.E.F FROM 01.04.2013 CANNOT BE APPLIED RETROSPECTIVELY. RELIANCE WAS PLA CED ON DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE O F CIT VS GREEN INFRA LIMITED ITA NO. 1162 OF 2014 DT: 16.01. 2017 AND CIT VS. M/S. GAGANDEEP INFRASTRUCTURE PVT. LTD. (PB 95-98) MANU/MH/1274/2017 : (2017) 394 ITR 680 (BOM). SIMIL ARLY IN THE CASE OF CIT VS. ANSHIKA CONSULTANTS PVT. LTD. (2015) 93 CCH 16 (DEL HC) THE HONBLE JURISDICTIONAL HIGH COURT OPINED THAT THE FACT THAT THE ASSESSEE COMPANY CHAR GED HIGHER PREMIUM OR NOT SHOULD NOT HAVE BEEN SUBJECT MATTER OF THE ENQUIRYINSTEAD ISSUE MUST INVOLVE AMOUNT I NVESTED BY SHARE APPLICANTS WERE FROM LEGITIMATE SOURCES OR NOT. REFERENCE IS FURTHER CRAVED TO THE JUDGMENT OF THE H ONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF PR. CIT (1 ) INDORE V. CHAIN HOUSE INTERNATIONAL (P) LTD. [2018] 98 TAXMANN.COM 47/ [2019] 408 ITR 561 (MP) WHEREIN THE HONBLE HIGH COURT RULED THAT ONCE THE GENUINENESS CREDITWORTHINESS AND IDENTITY OF INVESTORS ARE ESTA BLISHED NO ADDITION COULD BE MADE AS CASH CREDIT ON THE GROUND THAT SHARES WERE ISSUED AT EXCESS PREMIUM. 37. REGARDING REVENUES GROUND CHALLENGING THE DEL ETION OF THE ADDITION MADE BY THE ASSESSING OFFICER TO THE E XTENT OF 111 INCREASE IN SHARE CAPITAL ARISING ON ACCOUNT OF ISS UE OF BONUS SHARES. HE SUBMITTED THAT IT IS INVOLVED IN THE FOL LOWING CASES:- SL. NO. NAME OF THE ASSESSEE & NATURE OF ADDITION MADE BY THE LD. A.O A.Y TOTAL ADDITION U/S 68 (SHARE CAPITAL/SHARE PREMIUM PLUS BONUS SHARES) ADDITION U/S 68 ON ACCOUNT OF ISSUE OF BONUS SHARES CONFIRMATION (C) OR DELETION (D) BY THE C.I.T (A) OF THE ADDITION U/S 68 ON ACCOUNT OF BONUS ISSUE GROUND NO. OF THE DEPARTMENTS APPEAL CHALLENGING THE DELETION OF ADDITION U/S 68 ON ACCOUNT OF BONUS ISSUE PB - PAGE REFERENCE (BALANCE SHEET SHOWING BONUS ISSUE) 1. SUKHNA REAL ESTATES PVT. LTD. SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 20 63 40 000) SECTION 68 2012-13 80 63 40 000 20 63 40 000 D REVENUES APPEAL GROUND NO. 2 PB-12A PAGE 11 2. SUKHNA STEEL PVT. LTD. SHARE CAPITAL (INCLUDING BONUS SHARES OF 16.80 LACS) SECTION 68 2012-13 26 16 80 000 16 80 00 000 D REVENUES APPEAL GROUND NO. 1 PB-13A PAGE 12 3. GLOBUS REALINFRA PVT. LTD. (SUR BUILDCON) SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 17 09 40 000/) - SEC 68 2012-13 98 49 40 000 17 09 40 000 D REVENUES APPEAL GROUND NO. 1 PB-17A PAGE 12 4. SINTEX CONSUMER ELECTRONICS PVT. LTD. SHARE CAPITAL (INCLUDING BONUS SHARES OF 18.228 CRORES) SECTION 68 2012-13 78 22 80 000 18 22 80 000 D THE DELETION OF ADDITION U/S 68 TO THE EXTENT OF BONUS ISSUE HAS NOT BEEN CONTESTED BY THE DEPARTMENT. PB-9A PAGE 10 5. SUNLIGHT TOURS & TRAVEL PVT. LTD.: SHARE CAPITAL (INCLUDING BONUS SHARES OF 12 01 68 000) SECTION 68 2012-13 52 01 68 000 12 01 68 000 D THE DELETION OF ADDITION U/S 68 TO THE EXTENT OF BONUS ISSUE HAS NOT BEEN CONTESTED BY THE DEPARTMENT. PB-14A PAGE 11 6. SUPREME PLACEMENT SERVICES PVT. LTD. SHARE CAPITAL (INCLUDING BONUS SHARES OF RS. 12.43 CRORES) SECTION 68 2012-13 72 43 00 000 12 43 00 000 D THE DELETION OF ADDITION U/S 68 TO THE EXTENT OF BONUS ISSUE HAS NOT BEEN CONTESTED BY THE DEPARTMENT. PB-16A PAGE 10 112 38. IN ALL THESE CASES THE LD. CIT(A) HAS HELD THAT SECTION 68 IS NOT APPLICABLE ON INCREASE IN SHARE CAPITAL O N ACCOUNT OF ISSUE OF BONUS SHARES. THE AMOUNT REPRESENTING BONU S SHARE DOES NOT REPRESENT GROUP OF ANY SUM IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IT MERELY DENOTES A TRANSFER ENTRY REPRESENTING THE CAPITALIZATION ON RESERVE AND SURPLUS AND NOT A NY FRESH CREDIT IN THE BOOKS OF THE ASSESSEE AND THEREFORE I T IS NOT HIT OF SECTION 68. REGARDING GROUNDS CHALLENGED THE FRE SH ADDITION MADE BY THE LD. CIT(A) ON ACCOUNT OF ALLEG ED COMMISSION INCOME @ 2% FOR PROVIDING FACILITY TO RO UTE TRANSACTION RESULTING OF INTRODUCTION OF NEW SOURCE OF INCOME. HE SUBMITTED THAT THIS ISSUE IS RAISED IN ASSESSEE S APPEAL IN THE FOLLOWING CASES:- (I) JAWAHAR CREDIT & HOLDING PVT. LTD. (A.Y. 2012-1 3) ITA NO. 5398/DEL/2019 - ASSESSEES APPEAL. (II) JINGLE BELLS ALUMINIUM PVT. LTD. (2012-13) I TA NO. 5397/DEL/2019 ASSESSEES APPEAL. (III) KASPER INFORMATION TECHNOLOGY (P) LTD. (A.Y. 2012- 13) ITA NO. 357/DEL/2019. 39. TO CHALLENGE THIS ASSESSEE HAS RAISED IDENTI CAL GROUNDS IN ALL THESE CASES WHICH READS AS UNDER: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. C.I.T.(A)-05 NEW DELHI WHILE CORRECTLY DEL ETING THE ADDITION OF RS. 73 50 00 000/- MADE BY THE LD. A.O. U/S 68 ERRED IN MAKING FRESH ADDITION OF RS. 1 47 00 000/- TO THE 113 INCOME OF THE APPELLANT COMPANY ON ACCOUNT OF ALLEG ED CHARGES RECEIVED BY THE APPELLANT COMPANY @ 2% FOR PROVIDING FACILITY TO ROUTE THE IMPUGNED TRANSACTIO N OF RS. 73 50 00 000/- PURELY ON THE BASIS OF SURMISES AND CONJECTURES ALTHOUGH THE SAME IS NOT BACKED BY ANY SUBSTANTIVE OR TANGIBLE EVIDENCE ON RECORD. 2. THAT THE LD. C.I.T.(A)-05 NEW DELHI ACTED BEYON D JURISDICTION IN ENHANCING INCOME OF THE APPELLANT U /S 251(1)(A) OF THE INCOME-TAX ACT 1961 (THE ACT) BY INTRODUC ING AND ASSESSING NEW SOURCE OF INCOME TO THE EXTENT OF RS. 1 47 00 000/- BEYOND THE RECORD (I.E. THE RETURN OF INCOME AND ASSESSMENT ORDER) AND OUTSIDE THE SUBJECT MATTER OF ASSESSMENT APPEALED AGAINST. 3. THAT THE LD. C.I.T(A)-05 NEW DELHI ERRED IN MAK ING FRESH ADDITION OF RS. 1 47 00 000/- AND THUS ENHANCING TH E INCOME OF THE APPELLANT TO THE SAID EXTENT WITHOUT ISSUING A PRIOR SHOW CAUSE NOTICE AS MANDATED U/S. 251(2) OF THE AC T FOR PROVIDING A REASONABLE OPPORTUNITY TO THE APPELLANT OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT THUS RESULT ING IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 40. LD COUNSEL SUBMITTED THAT IT IS PERTINENT T O NOTE HERE THAT AS AGAINST THE COMMON ALLEGATION MADE BY THE L D. A.O(S) IN THE 19 CASES HEREIN THAT THE ASSESSEE-COMPANIES HAVE AVAILED ACCOMMODATION ENTRIES IN THE GARB OF SHARE CAPITAL AND/OR LOANS & ADVANCES THE LD. C.I.T (A)(BEING TH E SAME OFFICER WHO HAS DISPOSED OF THE APPEALS IN ALL THE THREE CASES) IN THE AFORESAID THREE CASES HAS OPINED THAT THE AS SESSEES HAVE NOT AVAILED ANY ACCOMMODATION ENTRIES BUT HAVE MERELY 114 PROVIDED FACILITY TO ROUTE THE FUNDS FROM BHUSHAN S TEEL LTD. IN LIEU FOR AN ESTIMATED COMMISSION INCOME OF 2%. T HUS THE LD. C.I.T(A) HAS IMPLIED A ROLE REVERSAL OF THE ASS ESSEES HEREIN WHEREAS THE A.OS HAVE ALLEGED THAT THE ASSESSEES HEREIN ARE THE RECIPIENTS OF ACCOMMODATION ENTRIES THE LD. C. I.T(A) HAS TREATED THEM AS ENTRY PROVIDERS/ JAMAKHARCHI COMPANI ES PROVIDING FACILITY TO ROUTE TRANSACTIONS IN LIEU OF COMMISSION INCOME. THE ORDERS OF THE LD. C.I.T(A) IN THE SAID THREE CASES TO THE EXTENT THE SAME ASSESS FRESH SOURCES OF INCO ME (BEING THE ALLEGED COMMISSION INCOME @ 2% FOR PROVIDING FA CILITY TO ROUTE FUNDS) HAVE BEEN CHALLENGED BY THE ASSESSEES ABOVE NAMED IN THEIR RESPECTIVE APPEALS FILED BEFORE THIS HONBLE ITAT. 41. THE RELEVANT OBSERVATIONS OF THE LD. C.I.T (A ) IN THESE THREE CASES ARE REPRODUCED HEREUNDER FOR THE SAKE O F READY REFERENCE: NAME OF THE ASSESSEE A.Y FINDINGS OF THE LD. C.I.T (A) JAWAHAR CREDIT & HOLDING (P) LTD. 2012-13 7.8 AS STATED EARLIER THERE IS NO WORTH/RESERVE S OF THE APPELLANT COMPANY NOR ANY BUSINESS CARRIED OUT THE INVESTOR COMPANIES AND OTHER PERSONS ARE ALSO NOT CARRYING OUT ANY VISIBLE BUSINESS ACTIVITY THEREFORE THIS IS NOTHING BUT ROUTING OF ITS FUNDS BY THE BHUSHAN STEEL LTD. AND ITS RELATED PARTIES WHERE NEITHER TH E INVESTORS AND OTHER PERSONS NOR THE APPELLANT COMPANY ARE ULTIMATE BENEFICIARY . THE FUNDS RECEIVED WERE GIVEN TO THE OTHER COMPANIE S AS SOON AS IT IS RECEIVED AND THE ASSETS IN THE BALANCE SHEET IS SHO WN IN THE FORM OF INVESTMENT IN SHARES FOR THE SHARE APPLICATION MONE Y AND PREMIUM THEREON RECEIVED. THE APPELLANT HAS ALSO NOT GIVEN ANY COGENT REASONING FOR THE FUND FLOW SHOWN BY THE A.O IN HIS REPORT. 7.9 THEREFORE LOOKING TO THE FACTS AND CIRCUMSTA NCES OF THIS CASE WHERE BASIC REQUIREMENT TO JUSTIFY THE IDENTITY CR EDITWORTHINESS AND GENUINENESS OF TRANSACTION HAS BEEN PRIMA FACIE ESTABLISHED BUT LOOKING TO THE FACT AND ANALYSIS AS NARRATED AB OVE THESE TRANSACTIONS ARE FOUND TO BE ROUTING FINANCES OF M/ S. BHUSHAN STEEL LTD. AND OTHER PERSONS THROUGH APPELLANT COMPANY A ND IT IS JUST PAPER COMPANY WHERE APPELLANT IS NOT THE ULTIMATE B ENEFICIARY BECAUSE IT HAS FURTHER PASSED ON THOSE FUNDS TO VAR IOUS COMPANIES AS 115 SHOWN IN THE FLOW CHART. 7.10 IN VIEW OF ABOVE IT IS TO BE STATED THAT AS PER THE PRACTICE AND ALSO SEEN IN VARIOUS CASES THE SAID PERSON (IN THI S CASE APPELLANT) CHARGES THE AMOUNT TO PROVIDE SUCH ENTRIES WHICH IS GENERALLY 2% OF THE TOTAL TRANSACTIONS. THEREFORE CONSIDERING THAT THE APPELLANT HAS BEEN PROVIDING THE FACILITY TO ROUTE THESE FINANCIAL TRANSACTIONS THE 2% OF THE TOTAL AMOUNT IS TREATED AS UNDISCLOSED IN COME OF THE APPELLANT NOT SHOWN IN ITS RETURN OF INCOME . THIS COMES TO RS. 1 47 00 000/-. 7.11 SINCE THE DETAILS HAVE BEEN DULY PROVIDED WI TH RESPECT TO THE REFERRED COMPANIES AND THE ADDITIONS ARE OUT OF THE AMBIT OF PROVISIONS OF SECTION 68 OF THE ACT DUE TO THE REASON THAT THESE INVESTOR COMPANIES ARE HELD TO BE JUST A PAPER COMP ANY OR CONDUIT IN THE CASE OF OTHER INVESTORS FOR PROVIDING ENTRIES A ND ROUTING THE FINANCES THEREFORE THE ADDITION TO THE EXTENT OF RS. 1 47 00 000/- IS SUSTAINED FOR CHARGES RECEIVED IN PROVIDING SUCH EN TRIES NOT DISCLOSED BY THE APPELLANT . FOR THE BALANCE AMOUNT THE APPELLANT GETS A RELIEF. JINGLE BELLS ALUMINIUM PVT. LTD. 2012-13 7.9 AS STATED EARLIER THERE IS NO WORTH/RESERVE OF THE APPELLANT COMPANY NOR ANY BUSINESS CARRIED OUT THE INVESTOR COMPANIES ARE ALSO NOT CARRYING OUT ANY VISIBLE BUSINESS ACTIVITY THEREFORE THIS IS NOTHING BUT ROUTING OF ITS FUNDS BY THE BHUSHAN STEE L LTD. WHERE NEITHER THE SEVEN INVESTOR COMPANIES NOR THE APPELL ANT COMPANY ARE ULTIMATE BENEFICIARY . THE FUNDS RECEIVED WERE GIVEN TO OTHER COMPANIES AS SOON AS IT IS RECEIVED AND THE ASSETS IN THE BALANCE SHEET IS SHOWN IN THE FORM OF INVESTMENT IN SHARES FOR THE SHARE APPLICATION MONEY AND PREMIUM THEREON RECEIVED. THE APPELLANT HAS ALSO NOT GIVEN ANY COGENT REASONING FOR THE FUND FL OW SHOWN BY THE A.O IN HIS REPORT. 7.10 THEREFORE LOOKING TO THE FACTS AND CIRCUMST ANCES OF THIS CASE WHERE BASIC REQUIREMENT TO JUSTIFY THE IDENTITY CR EDITWORTHINESS AND GENUINENESS OF THE TRANSACTION HAS BEEN PRIMA F ACIE ESTABLISHED BUT LOOKING TO THE FACT AND ANALYSIS AS NARRATED AB OVE THESE TRANSACTIONS ARE FOUND TO BE FOR ROUTING FINA NCES OF M/S. BHUSHAN STEEL LTD . THROUGH THESE COMPANIES AND THEREFORE THESE COMPANIES ARE JUST PAPER COMPANIES WHERE APPELLANT IS NOT THE ULTIMATE BENEFICIARY BECAUSE IT HAS FURTHER PASSED ON THOSE FUNDS TO FIVE COMPANIES AS SHOWN IN THE FLOW CHART. 7.11 IN VIEW OF ABOVE IT IS TO BE STATED THAT AS PER THE PRACTICE AND ALSO SEEN IN VARIOUS CASES THE SAID PERSON (IN THI S CASE APPELLANT) CHARGES THE AMOUNT TO PROVIDE SUCH ENTRIES WHICH IS GENERALLY 2% OF THE TOTAL TRANSACTIONS. THEREFORE CONSIDERING THAT THE APPELLANT HAS BEEN PROVIDING THE FACILITY TO ROUTE THESE FINANCIAL TRANSACTIONS THE 2% OF THE TOTAL AMOUNT IS TREATED AS UNDISCLOSED IN COME OF THE APPELLANT NOT SHOWN IN ITS RETURN OF INCOME . THIS COMES TO RS. 1 24 00 000/-. 7.12 SINCE THE DETAILS HAVE BEEN DULY PROVIDED WI TH RESPECT TO THE REFERRED COMPANIES AND THE ADDITIONS ARE OUT OF THE AMBIT OF PROVISIONS OF SECTION 68 OF THE ACT DUE TO THE REASON THAT THESE INVESTOR COMPANIES ARE HELD TO BE JUST A PAPER COMP ANY OR CONDUIT IN THE CASE OF OTHER INVESTORS FOR PROVIDING ENTRIES A ND ROUTING THE FINANCES THEREFORE THE ADDITION TO THE EXTENT OF RS. 1 24 00 000/- IS SUSTAINED FOR CHARGES RECEIVED IN PROVIDING SUCH EN TRIES NOT DISCLOSED BY THE APPELLANT. FOR THE BALANCE AMOUNT THE APPELLANT 116 GETS A RELIEF. KASPER INFORMATION TECHNOLOGY (P) LTD. 2012-13 7.8 AS STATED EARLIER THERE IS NO WORTH/RESERV E OF THE APPELLANT COMPANY NOR ANY BUSINESS CARRIED OUT THE INVESTOR COMPANIES ARE ALSO NOT CARRYING OUT ANY VISIBLE BUSINESS ACTIVITY THEREFORE THIS IS NOTHING BUT ROUTING OF ITS FUNDS BY THE BHUSHAN STEEL LTD. WHERE NEITHER THE SEVEN INVESTOR COMPANIES NOR THE APPELL ANT COMPANY ARE ULTIMATE BENEFICIARY . THE FUNDS RECEIVED WERE GIVEN TO OTHER COMPANIES AS SOON AS IT IS RECEIVED AND THE ASSETS IN THE BALANCE SHEET IS SHOWN IN THE FORM OF INVESTMENT IN SHARES FOR THE SHARE APPLICATION MONEY AND PREMIUM THEREON RECEIVED WHI CH IS EVIDENT FROM THE CHART REPRODUCED EARLIER. THE APPELLANT HA S ALSO NOT GIVEN ANY COGENT REASONING FOR THE FUND FLOW. 7.9 THEREFORE LOOKING TO THE FACTS AND CIRCUMSTA NCES OF THIS CASE WHERE BASIC REQUIREMENT TO JUSTIFY THE IDENTITY CR EDITWORTHINESS AND GENUINENESS OF THE TRANSACTION HAS BEEN PRIMA F ACIE ESTABLISHED BUT LOOKING TO THE FACT AND ANALYSIS AS NARRATED A BOVE THESE TRANSACTIONS ARE FOUND TO BE FOR ROUTING FINA NCES OF M/S. BHUSHAN STEEL LTD. THROUGH THESE COMPANIES AND THEREFORE THESE COMPANIES ARE JUST PAPER COMPANIES WHERE APPELLANT IS NOT THE ULTIMATE BENEFICIARY BECAUSE IT HAS FURTHER PASSED ON THOSE FUNDS TO FIVE COMPANIES AS SHOWN IN THE CHART ABOVE. 7.10 IN VIEW OF ABOVE IT IS TO BE STATED THAT AS PER THE MARKET PRACTICE AND ALSO SEEN IN VARIOUS CASES THE SAID P ERSON (IN THIS CASE APPELLANT) CHARGES THE AMOUNT TO PROVIDE SUCH ENTRI ES WHICH IS GENERALLY 2% OF THE TOTAL TRANSACTIONS . THEREFORE CONSIDERING THAT THE APPELLANT HAS BEEN PROVIDING THE FACILITY TO RO UTE THESE FINANCIAL TRANSACTIONS THE 2% OF THE TOTAL AMOUNT IS TREATED AS UNDISCLOSED INCOME OF THE APPELLANT NOT SHOWN IN ITS RETURN OF INCOME. THIS COMES TO RS. 92 00 000/-. 7.11 SINCE THE DETAILS HAVE BEEN DULY PROVIDED WITH RESPECT TO THE REFERRED COMPANIES AND THE ADDITIONS ARE OUT OF THE AMBIT OF PROVISIONS OF SECTION 68 OF THE A CT DUE TO THE REASON THAT THESE INVESTOR COMPANIES ARE HELD TO BE JUST A PAPER COMP ANY OR CONDUIT IN THE CASE OF OTHER INVESTORS FOR PROVIDING ENTRIES A ND ROUTING THE FINANCES THEREFORE THE ADDITION TO THE EXTENT OF RS. 92 00 000/- IS SUSTAINED FOR CHARGES RECEIVED IN PROVIDING SUCH EN TRIES NOT DISCLOSED BY THE APPELLANT. FOR THE BALANCE AMOUNT THE APPELLANT GETS A RELIEF. 42. THEREFORE THE LD. C.I.T (A) IN THE ABOVE THRE E CASES HAS CATEGORICALLY ADMITTED THAT THE RESPECTIVE ASSESSEE S HAVE PRIMA FACIE ESTABLISHED THE NECESSARY INGREDIENTS O F SECTION 68 VIZ. IDENTITY CREDITWORTHINESS AND THE GENUIN ENESS OF THE IMPUGNED TRANSACTIONS AND THEREFORE THE ADDITIONS M ADE BY THE A.OS ARE BEYOND THE PURVIEW OF SECTION 68 OF TH E ACT. WHILE OBSERVING AS ABOVE AND DELETING THE IMPUGNED 117 ADDITIONS MADE BY THE RESPECTIVE A.OS U/S 68 OF THE ACT THE LD. C.I.T (A) HAS PROCEEDED TO INTRODUCE AND ASSESS A NEW SOURCE OF INCOME BEING THE ALLEGED UNDISCLOSED COMM ISSION INCOME OF 2% ALLEGEDLY EARNED BY THE RESPECTIVE ASS ESSEES FOR PROVIDING A FLUID MECHANISM FOR THE TRANSFER OF FUN DS FROM ONE COMPANY TO ANOTHER. THE ALLEGED COMMISSION INCO MES AS ESTIMATED BY THE LD. C.I.T (A) IN THE AFORESAID CAS ES DO NOT CONSTITUTE THE SUBJECT MATTER OF ASSESSMENTS I.E. T HE SAME HAVE NEITHER BEEN OFFERED BY THE ASSESSEES IN THEIR RESPECTIVE RETURNS OF INCOME NOR IS THERE ANY WHISPER REGARDIN G THE TAXABILITY OF THE ALLEGED SOURCE OF INCOME IN THE A SSESSMENT ORDERS PASSED BY THE LD. A.OS. THUS THE ADDITION M ADE BY THE LD. C.I.T (A) BY INTRODUCING NEW SOURCE OF INCO ME IN THE FORM OF ALLEGED UNDISCLOSED COMMISSION INCOME IS BE YOND THE POWER AND AUTHORITY OF THE LD. C.I.T (A) AS IT NEIT HER AROSE FROM THE ASSESSMENT ORDER NOR WAS IT RAISED AT ANYT IME DURING THE ASSESSMENT OR APPELLATE PROCEEDINGS. FUR THER NO SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEES BEFOR E FASTENING SUCH FRESH LIABILITY ON THE ASSESSEE COMP ANIES THUS RESULTING IN GROSS VIOLATION OF PRINCIPLES OF NATUR AL JUSTICE. 43. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS NO POWER TO ENHANCE THE INVESTMENT BY ASSESSEES NEW SOURCE OF INCOME OUT OF SUBJECT MATTER OF ASSESSMENT APPEALED AGAINS T AND HE CANNOT MAKE ADDITION IN RESPECT OF NEW SOURCE OF IN COME NEITHER DISCLOSED BY THE ASSESSEE IN HIS RETURN NOR CONSIDERED BY THE ASSESSING OFFICER. IN SUPPORT HE RELIED UPO N THE FOLLOWING JUDGMENTS:- 118 (I) CIT VS. SHAPOORJI PALLONJI (1962) 44 ITR 891 (S C) (II) CIT VS. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA (1967) 66 ITR 443 (SC) (III) CIT VS. UNION TYRES (1999) 240 ITR 556 (DEL) (IV) CIT VS. NATIONAL COMPANY LTD. (1993) 199 ITR 445 (CAL) (V) CIT VS. ASSOCIATED GARMENT MAKERS (1992) 197 IT R 350 (RAJ) (VI) STERLING VS. ITO (1975) 99 ITR 236 (KAR) (VII) HARI MOHAN SHARMA V. ACIT CIRCLE 63(1) NEW DELHI [2019] 110 TAXMANN.COM 119 (DELHI-TRIB). 44. WITHOUT PREJUDICE HE SUBMITTED THAT EVEN OTH ERWISE ALSO SINCE ALL THE ASSESSEES HEREIN ARE ESSENTIALL Y GROUP COMPANIES UNDER COMMON MANAGEMENT AND/OR CONTROL T HE QUESTION OF CHARGING ANY COMMISSION INCOME FOR PROV IDING FACILITY TO ROUTE THE FUNDS OF ANOTHER GROUP COMPAN Y DOES NOT ARISE. THE IMPUGNED ADDITIONS HAVE BEEN MADE BY THE LD. C.I.T(A) SOLELY ON THE BASIS OF SURMISES CONJECTUR ES SUSPICION AND ON THE BASIS OF WHAT HE DEEMS TO BE A PREVALENT PRACTICE IN THE MARKET AND NOT ON THE STRENGTH OF ANY TANGIB LE MATERIAL OR EVIDENCE ON RECORD. THUS IN LIGHT OF THE SETTLE D AND TRITE POSITION OF LAW I.E. SUSPICION HOWEVER STRONG CAN T TAKE THE PLACE OF PROOF AS HAS BEEN LAID DOWN IN THE JUDGMEN TS OF THE HONBLE APEX COURT IN LALCHAND BHAGAT AMBICA RAM VS . CIT REPORTED IN (1959) 37 ITR 288 (SC) UMACHARAN SHAW REPORTED IN 37 ITR 271 AND OMAR SALAY MOHAMED SAIT 119 REPORTED IN 37 ITR 151 HE URGED THAT THE IMPUGNED ADDITIONS ON ACCOUNT OF ALLEGED COMMISSION INCOME ARE UNSUSTA INABLE IN THE EYES OF LAW AND AS SUCH MAY KINDLY BE DELETE D. 45. LASTLY REGARDING REVENUES APPEAL CHALLENGING THE RESTRICTION OF ADDITION OF RS.23 32 813/- MADE BY T HE ASSESSING OFFICER U/S.14A READ WITH RULE 8D TO RS.5 LAC IN THE CASE OF STYLISH CONSTRUCTION PVT. LTD. FOR ASSE SSMENT YEAR 2012-13 FOR WHICH THE FOLLOWING GROUNDS OF APPEAL H AS BEEN RAISED BY THE REVENUE:- 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. C.I.T(A) ERRED IN RESTRICTING THE ADDI TION TO RS. 5 LAC FROM RS. 23 32 813/- MADE BY THE A.O U/S 14A OF THE I.T. ACT 1961 READ WITH RULE 8D OF THE I.T. RULES 1961 IN S PITE OF THE FACT THE DECISION ON THIS ISSUE IS PENDING IN HONB LE SUPREME COURT IN THE CASE OF MAXOPP INVESTMENT LTD. AND IN VIEW OF THE FACTS THAT THE FINANCIAL EXPENSES AND ADMINISTRATIV E EXPENSES DEBITED IN THE P&L A/C ARE ALSO RELATABLE TO THE IN VESTMENTS IN SHARES PURCHASED. 46. THE FACTS IN BRIEF ARE THAT M/S. STYLISH CON STRUCTION PVT. LTD. (HEREINAFTER REFERRED TO AS THE ASSESSEE UND ER PARA 5 AND ITS SUB-PARAS) FILED ITS ORIGINAL RETURN OF INC OME FOR A.Y. 2012-13 AFTER MAKING A SUO-MOTO DISALLOWANCE OF RS. 2 23 660/- U/S 14A OF THE ACT ON ACCOUNT OF EXPENSES ATTRIBUTABLE TO EXEMPT INCOME. THE AFORESAID FIGURE OF RS. 2 23 660/- WAS COMPUTED BY THE ASSESSEE BY AGGREGAT ING THE TOTAL INDIRECT EXPENSES DEBITED IN ITS PROFIT & LOS S ACCOUNT AS UNDER:- 120 LEGAL & PROFESSIONAL CHARGES RS. 4 790/- E.D.P CHARGES RS. 1 00 000/- RATES & TAXES [RS. 5 36 706/- LESS RS. 5 28 702/-(B EING DEFERRED REVENUE EXPENSES ADDED BACK IN THE COMPUTATION OF INCOME)] RS. 8 004/- BANK CHARGES RS. 2 744/- DIRECTORS SITTING FEES RS. 10 000/- RENT RS. 78 000/- AUDIT FEES RS. 16 854/- PRINTING & STATIONERY RS. 300/- LOCAL CONVEYANCE RS. 2 135/- STAFF WELFARE RS. 833/- TOTAL RS. 2 23 660/- THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SUPPLY O F MANPOWER WHICH FORMS THE PRE-DOMINANT PART OF ITS B USINESS ACTIVITY. AS WOULD BE EVIDENT FROM THE PROFIT & LOS S ACCOUNT OF THE ASSESSEE THE RECEIPTS FROM SERVICE CHARGES ON ACCOUNT OF SUPPLY OF MANPOWER AMOUNTS TO RS. 3 63 28 155/- AS AGAINST WHICH THE RECEIPTS FROM DIVIDEND (EXEMPT U/ S 10) AMOUNTS ONLY TO RS. 9 94 717/- FOR A.Y. 2012-13. IT WAS STATED THAT ALMOST ALL THE EXPENSES INCURRED ARE D IRECTLY RELATABLE TO THE ACTIVITY OF PROVIDING MANPOWER SER VICES AND NO PART OF THE EXPENSES IS RELATABLE EITHER DIRECT LY OR INDIRECTLY TO THE EARNING OF DIVIDEND INCOME WHICH AS CLEARLY EVIDENT FROM THE FINANCIAL STATEMENTS OF THE ASSESS EE- COMPANY CONSTITUTES A MINISCULE PART OF THE TOTAL A CTIVITY OF THE ASSESSEE-COMPANY. HOWEVER TO BE ON A SAFE SIDE THE ASSESSEE-COMPANY MADE A SUO-MOTO DISALLOWANCE OF THE TOTAL INDIRECT EXPENSES DEBITED IN ITS PROFIT & LOS S ACCOUNT FOR THE IMPUGNED A.Y. 2012-13. IT WAS STATED THAT APART FROM THE INDIRECT EXPENSES ENLISTED ABOVE AL L THE REMAINING EXPENSES DEBITED IN THE P&L A/C ARE DIREC TLY 121 RELATED TO THE BUSINESS OF SUPPLY OF MANPOWER AND H AVE NO NEXUS WHATSOEVER EITHER DIRECTLY OR INDIRECTLY TO THE EARNING OF DIVIDEND INCOME BY THE ASSESSEE-COMPANY. 47. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS REQUIRED BY THE LD. A.O TO FILE DETAIL S OF THE EXPENDITURE INCURRED FOR EARNING THE EXEMPT DIVIDEN D INCOME AND ALSO TO EXPLAIN AS TO WHY NO DISALLOWANCE WAS W ARRANTED U/S 14A OF THE ACT. IN RESPONSE THERETO THE ASSESS EE SUBMITTED THAT IT HAD MADE A SUO-MOTO DISALLOWANCE OF RS. 2 23 660/- U/S 14A OF THE ACT IN ITS RETURN OF INCO ME IN CONNECTION WITH THE DIVIDEND INCOME OF RS. 9 94 717 /- EARNED BY IT DURING A.Y. 2012-13. THE LD. A.O HOWEVER IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT MADE AN ADD ITIONAL DISALLOWANCE OF RS. 23 32 813/- U/S 14A OF THE ACT R.W. RULE 8D(2)(III) OF THE INCOME-TAX RULES 1962 OVER AND A BOVE RS. 2 23 660/- ALREADY DISALLOWED BY THE ASSESSEE COMPA NY IN ITS RETURN OF INCOME. THE SAID DISALLOWANCE WAS COMPUTE D BY THE A.O. BY PURPORTEDLY APPLYING THE METHOD PRESCRIBED UNDER RULE 8D IN THE MANNER SO FOLLOWS: - SL. NO. PARTICULARS AMOUNT 1. THE AMOUNT OF EXPENDITURE DIRECTLY RELATING TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME A NIL 2. EXPENDITURE ON INTEREST B NIL 3. THE AVERAGE OF VALUE OF INVESTMENT INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME [(RS. 81 70 49 580 + RS. 20 55 39 582)/2] C RS. 51 12 94 581/ - 4. THE AVERAGE OF TOTAL ASSETS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE [(RS. 63 09 64 127 + RS. 21 74 10 672)/2] D RS. 42 41 87 400/ - 5. B X C/D NIL 6. % OF THE AVERAGE OF THE VALUE OF INVESTMENT E RS. 25 56 473/ - 122 INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME. T OTAL RS. 25 56 473/ - 48. ON A PERUSAL OF THE COMPUTATION UNDER RULE 8D GIVEN BY THE A.O LEGAL INFERENCE IS THAT THERE ARE THREE LI MBS CONTAINED UNDER RULE 8D NAMELY:- (I) EXPENDITURE DIRECTLY RELATED TO THE EARNING OF EXEM PT INCOME; (II) INTEREST EXPENDITURE NOT DIRECTLY ATTRIBUTABLE TO A NY PARTICULAR ACTIVITY; AND (III) AMOUNT EQUAL TO ONE-HALF PER CENT OF THE AVERAGE VA LUE OF INVESTMENTS INCOME FROM WHICH DOES NOT FORM PART O F TOTAL INCOME; IT WAS STATED THAT NO EXPENSES WERE FOUND BY THE A. O TO HAVE BEEN INCURRED BY THE ASSESSEE WITH RESPECT TO EXPEN SES REFERRED TO UNDER THE FIRST TWO LIMBS. AS REGARDS T HE THIRD LIMB DEALING WITH PROPORTIONATE DISALLOWANCE W.R.T. OTHE R INDIRECT EXPENSES NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULA R INCOME OR RECEIPT THE LD. A.O HAS MADE A FURTHER DISALLOWANC E OF RS. 23 32 813/- (I.E RS. 25 56 473/- LESS RS. 2 23 660/ - DISALLOWED SUO MOTO BY THE ASSESSEE) U/S. 14A BY PURPORTEDLY APPLYING THE FORMULA PRESCRIBED UNDER RULE 8D(2)(II I) OF THE ACT OVERLOOKING THE FACT THAT THE ASSESSEE HAD ALRE ADY MADE A SUO MOTO DISALLOWANCE OF THE ENTIRE INDIRECT EXPENSES (NOT DIRECTLY CONNECTED WITH THE ACTIVITY OF SUPPLY OF M ANPOWER) IN ITS COMPUTATION OF INCOME. FURTHER DEFYING ANY LOG IC THE LD. A.O PRESUMED THAT THE ASSESSEE HAD INCURRED TOTAL E XPENSES OF RS. 25 56 473/- TO EARN EXEMPT DIVIDEND INCOME O F RS. 123 9 94 717/-. WHILE HOLDING AS ABOVE THE LD. A.O HOW EVER FAILED TO RECORD ANY SATISFACTION TO THE EFFECT THA T HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE HE WAS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE I N RESPECT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME. 49. ON APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY THE LD. C.I.T(A) RESTRICTED THE ADDITIONS MADE BY THE LD. A .O TO RS. 5 LACS HOLDING THAT THE AMOUNT OF DISALLOWANCE U/S 14 A CANNOT IN ANY CASE EXCEED THE EXEMPT INCOME I.E. THE DIV IDEND INCOME OF RS. 9 94 717/- IN THE INSTANT CASE. THERE FORE FOR THE SAKE OF SUBSTANTIVE JUSTICE THE LD. C.I.T(A) F OUND IT REASONABLE AND JUSTIFIED TO RESTRICT THE DISALLOWAN CE U/S 14A R.W. RULE 8D TO RS. 5 LACS. THE BALANCE ADDITION OF RS. 18 32 813/- WAS THUS DELETED BY THE LD. C.I.T(A). T HE ORDER OF THE LD. C.I.T(A) TO THE AFORESAID EXTENT HAS BEEN A GITATED IN APPEAL BY THE DEPARTMENT BEFORE THE HONBLE ITAT. 50. THUS LD. COUNSEL SUBMITTED THAT WITHOUT ANY SATISFACTION RECORDED BY THE ASSESSING OFFICER THAT THE CLAIM MADE BY THE ASSESSEE IS NOT CORRECT HE COULD NOT H AVE PROCEEDED TO INVOKE THE PROVISIONS OF RULE 8D. 51. REGARDING REVENUES APPEAL CHALLENGING ALLEG ED ADMISSION OF ADDITIONAL EVIDENCE BY THE C.I.T(A) WI THOUT GIVING OPPORTUNITY TO THE A.O IN VIOLATION OF RULE 46A OF THE INCOME- TAX RULES 1962 IN THE CASES OF ANGEL CEMENT PVT. LT D. (A.Y. 2012-13) DELIGHT RESORTS PVT. LTD. (A.Y. 2012-13) AND STYLISH 124 CONSTRUCTION PVT. LTD. (A.Y. 2012-13) WHICH HAS BE EN URGED BY THE DEPARTMENT IN THE FOLLOWING CASES: NAME OF THE ASSESSEE A.Y. & ITA NO. GROUND OF APPEAL URGED ANGEL CEMENT PVT. LTD. 2012 - 13 ITA NO. 4691/DEL/2016 GROUND NO. 2: THAT THE LD. C.I.T(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A WITHOUT GIVING OPPORTUNITY TO THE A.O. DELIGHT RESORTS PVT. LTD. 2012 - 13 ITA NO. 5974/DEL/2017 GROUND NO. 3 THAT THE LD. C.I.T(A) ERRED IN ACCEPTING THE EVIDENCES FILED DURING THE APPELLATE PROCEEDINGS WITHOUT OBTAINING COMMENTS OF THE A.O IN REMAND PROCEEDINGS THEREBY VIOLATING RULE 46A OF THE IT RULES 1962 STYLISH CONSTRUCTION PVT. LTD. 2012 - 13 ITA NO. 5744/DEL/2016 GROUND NO 4 THAT THE LD. C.I.T(A) ERRED IN ACCEPTING ADDITIONAL EVIDENCE UNDER RULE 46A WITHOUT GIVING ANY OPPORTUNITY TO THE A.O IN RESPECT OF EVIDENCES OF SHAREHOLDERS ASSESSMENT PROCEEDINGS & SUPPORTING DOCUMENTS. 52. IN REGARD TO THE ABOVE IT HAS BEEN SUBMITTE D BEFORE US THAT NO ADDITIONAL EVIDENCES WERE SUBMITTED BY THE AFORESAID ASSESSEE(S) IN COURSE OF THE APPELLATE PROCEEDINGS BEFORE THE LD. C.I.T (A). THE IMPUGNED EVIDENCES REFERRED TO B Y THE LD. A.O(S) AS ADDITIONAL EVIDENCES IN THE DEPARTMENTAL APPEALS IN THE AFORESAID CASES ARE THE ASSESSMENT ORDERS PASSE D BY THE INCOME-TAX DEPARTMENT IN THE CASES OF THE INVESTORS /LENDERS. SINCE THESE ORDERS WERE PASSED BY THE INCOME-TAX DEPARTMENT THEY CONSTITUTE PART OF THE RECORDS OF THE INCOME-TAX DEPARTMENT AND CANNOT BE CONSTRUED AS ADDITIONAL EVIDENCES. THEREFORE THE CONTENTION OF THE 125 DEPARTMENT THAT ADDITIONAL EVIDENCES WERE FILED BY THE AFORESAID ASSESSEE(S) IN COURSE OF THE APPELLATE PR OCEEDINGS BEFORE THE LD. C.I.T(A)(S) IS DEVOID OF ANY MERIT A ND AS SUCH THE DEPARTMENTAL APPEAL IN THIS RESPECT DESERVES TO BE DISMISSED. ARGUMENTS ON BEHALF OF THE REVENUE: 53. ON THE OTHER HAND LD. CIT-DR AFTER REFERRING TO THE VARIOUS OBSERVATION OF THE ASSESSING OFFICER SUBMIT TED THAT IN SUMS AND SUBSTANCE THE ONUS WAS COMPLETELY UPON TH E ASSESSEE TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS/CREDITORS AND THE GENUINENESS OF THE TRAN SACTION. THOUGH THE ASSESSEE HAS DONE ALL THE PAPER WORK BUT IN SEVERAL CASES THERE WERE SAME ADDRESSES OF THE INVE STORS AND IN SOME CASE NOTICES REMAINED UNCOMPLIED WITH AND A SSESSEE HAS FAILED TO PRODUCE THE DIRECTORS OF THE INVESTOR COMPANIES. ONE OF THE MOST IMPORTANT INGREDIENTS TO DISCHARGE THE ONUS WAS TO PROVE THE CREDITWORTHINESS OF THE INVESTOR C OMPANY WHICH HERE IN THIS CASE ASSESSING OFFICER HAS AMPLY DEMONSTRATED THAT INVESTOR COMPANIES HAD HARDLY CAR RIED OUT ANY BUSINESS OPERATION AND IN THEIR INCOME TAX RETU RNS THE INCOME SHOWN WAS NEGLIGIBLE AND NONE OF THESE HAD T HAT KIND OF BOOK VALUE SO AS TO JUSTIFY SUCH A HIGHER SHARE P REMIUM. THESE COMPANIES WERE NOTHING BUT DUMMY AND PAPER COMPANIES AND CONDUIT TO GIVE ACCOMMODATION ENTRY. THE PERUSAL OF THE BANK STATEMENT REVEALED THAT THEY AR E RECEIVING FUNDS FROM VARIOUS OTHER COMPANIES AND TRANSFERRING THE FUND 126 TO OTHER COMPANIES AND THEY WERE ACTING LIKE A COND UIT WHICH NORMAL HAPPENS IN ACCOMMODATION ENTRIES. 54. IN SO FAR AS THE CONTENTION OF THE LD. COUNSE L THAT THERE HAS BEEN ROTATION OF FUNDS FROM BHUSHAN ENERGY LTD. TO OTHER GROUP COMPANIES IN THE FORM OF LOAN AND ADVANCES GI VEN TO THE VARIOUS COMPANIES WHO IN TURN HAVE SUBSCRIBED S HARES AND PAID SHARE PREMIUM AND THE SAME MONEY AGAIN HAS BEEN ROUTED BACK TO BHUSHAN ENERGY LTD. CAN ONLY BE PRO VED FROM FUND FLOW STATEMENT WHICH WAS NOT THERE BEFORE THE ASSESSING OFFICER. THE ADDITIONAL EVIDENCES WHICH HAVE BEEN F ILED IN THE FORM OF CASH FLOW FUND AND THE CORRELATION WITH THE IR RESPECTIVE BANK STATEMENTS ETC. SHOULD BE REMANDED BACK TO THE ASSESSING OFFICER FOR PROPER VERIFICATION AND E XAMINATION IN ORDER TO ESTABLISH THE CREDIBILITY OF THIS THEOR Y OF FUND FLOWING FROM ONE GROUP TO OTHER AND THE SOURCE OF T HESE FUND IS COMING FROM BHUSHAN ENERGY LTD. WHICH HAS BEEN C LAIMED TO BE ALREADY ACCOUNTED FOR. THUS SHE SUBMITTED TH AT IN ALL FITNESS MATTER SHOULD BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. DECISION 55. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDERS AS WELL AS EXTENSIVE MATERIALS REFERRED TO BEFORE US AT THE TI ME OF HEARING. WE HAD ALREADY DISCUSSED IN THE FOREGOING PARAGRAPHS THE ISSUES INVOLVED IN ALL THE APPEALS F ILED BY THE DEPARTMENT AS WELL AS BY THE ASSESSEE AND WE HAVE FOUND 127 THAT IN ALL THE APPEALS THE SIMILAR FACTS ARE PERME ATING AND ISSUES INVOLVED ARE INTERLINKED AND INEXTRICABLY INTERCONNECTED. THE MAJOR ISSUE PERTAINS TO ADDITION U/S.68 IN THE FORM OF SHARE CAPITAL/SHARE PREMIUM AND LOAN AND ADVANCES; AND IN ASSESSEES APPEAL ADDITION HAVE B EEN MADE ON ACCOUNT OF ALLEGED UNDISCLOSED COMMISSION INCOME WHICH HAS BEEN ADDED BY THE LD. CIT(A) EXERCISING HIS POW ER OF ENHANCEMENT U/S.251(1)(A). THE GROUNDS IN ALL THE A PPEALS HAVE ALREADY BEEN SUMMARIZED ABOVE IN THE FOREGOING TABLES AND SINCE SAME MATERIAL FACTS AND ISSUE ARE PERMEAT ING THROUGH; THEREFORE WE ARE GIVING OUR CONSOLIDATED DECISION WHICH WOULD APPLY MUTATIS MUTANDIS IN ALL THE APPEA LS WHERE SIMILAR ISSUES ARE INVOLVED. 56. THE COMMON GROUNDS TAKEN BY THE ASSESSING OFF ICER ALMOST IN ALL THE APPEALS FOR MAKING THE ADDITION U /S.68 IN THE HANDS OF VARIOUS ASSESSEES WHICH MAY BE BROADL Y CULLED OUT FROM THE ASSESSMENT ORDERS CAN BE SUMMARIZED IN THE FOLLOWING MANNER: THAT THE ASSESSEE INTRODUCED ITS UNACCOUNTED/UNDISCLOSED FUNDS IN ITS BOOKS OF ACCOUNT IN THE FORM OF SHARE C APITAL AND/OR LOAN & ADVANCES. THAT THE ONUS IS ON THE ASSESSES TO PROVE THE IDENTITY A ND CREDITWORTHINESS OF THE INVESTORS/CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. THAT IN SEVERAL CASES THE SUMMONS ADDRESSED TO INVESTO RS REMAINED UNCOMPLIED WITH. THE NOTICES ISSUED U/S. 133 (6) REMAINED UNCOMPLIED WITH OR UNSERVED WITH REMARKS 'DO ES 128 NOT EXIST' 'LEFT' 'ADDRESS NOT FOUND'. THAT THE ASSESSEE FAILED TO PRODUCE DIRECTORS OF INVESTO R COMPANIES. THAT THE AMOUNTS WERE RECEIVED THROUGH PRIVATE PLACEMEN TS. SINCE THE CONTRIBUTORS WERE PERSONALLY KNOWN TO THE ASSESSEE THE ASSESSEE MUST BE AWARE OF THE WHEREABOUTS . THE CORPORATE VEIL NEEDS TO BE LIFTED. THAT THE ASSESSEE FAILED TO SUBMIT DOCUMENTS RELATED TO CREDITS IN THE BOOKS. THAT SIMPLY FURNISHING PAN OR ASSESSMENT PARTICULARS/ADDRESS WAS NOT ENOUGH. THAT THERE WAS INSUFFICIENT BALANCE IN BANK ACCOUNTS; THAT CHEQUES ISSUED TO ASSESSEE WERE CLEARED BY WAY OF RE CEIPT OF TRANSFER ENTRY FROM ANOTHER ASSOCIATE CONCERN. THAT THE CREDITWORTHINESS OF INVESTORS WAS NOT ESTABLISHE D DUE TO THE REASON THAT ALL THE INVESTOR COMPANIES HAVE NOMINAL/MEAGER INCOME. THAT MOST OF THE INVESTOR COMPANIES HAVE NO PROFIT-MAKING APPARATUS NO BUSINE SS ACTIVITY. THAT INSOFAR AS THE ADVANCES AND LOANS WERE CONCERNED NO INTEREST WAS PAID THE PURPOSE OF ADVANCE WAS MISSING HUGE FUND TRANSACTIONS IMPLIED DUMMY TRANSACTIONS. THAT THE ANUS U/S. 68 CANNOT BE SAID TO BE DISCHARGED MERELY BECAUSE THE TRANSACTION IS DONE THROUGH BANKING CHANNELS OR ACCOUNT PAYEE INSTRUMENTS. THAT IN CASE OF CERTAIN ASSESSEES SPEED POST WAS BOOK ED FROM DELHI BUT THE REGISTERED OFFICE OF THE INVESTORS WAS IN 129 PUNJAB & CHANDIGARH. IT SHOWS THAT THE ASSESSEE ITSELF FILED REPLIES TO NOTICES SENT U/S 133(6). THAT THE REGISTERED OFFICES OF INVESTOR COMPANIES IN S OME CASES ARE LOCATED IN DIFFERENT CITIES BUT ARE HAVING T HEIR BANK ACCOUNTS OPERATED FROM DELHI JUST TO FACILITATE THE ASSE SSEE. THAT THE SUBSCRIBER COMPANIES DID NOT HAVE CREDITWORT HINESS AS MONEY SELDOM RESTS FOR O DAY IN THEIR ACCOUNTS FIN DS ITS DESTINATION IMMEDIATELY; THAT ASSESSEE COMPANY IN MOST CASES HAS NO BUSINESS PROFIT NEGATIVE CPS MAJOR MISCELLANEOUS INCOME NOTH ING TO DO WITH BUSINESS OBJECTIVES OF ASSESSEE COMPANY NO B RAND VALUE NO PAST PERFORMANCE HISTORY NO FUTURE PROSPEC T-SO AS TO ATTRACT SUCH HIGH PREMIUM. THAI THE ASSESSEE OFFERED NO EXPLANATION AS TO WHY THE COMPANIES AGREED TO INVEST IN UNLISTED COMPANY WHERE THERE WAS NO SCOPE FOR MAKING AN EXIT OUT OF INVESTMENTS. THAT THE INVESTOR AND ASSESSEE COMPANY ARE NOTHING BUT A CREATION OF PAPER COMPANIES. THAT THE PERSON SHOULD HAVE SOME SIGN OF IDENTIFICATION OTHER THAN MERELY ON PAPER THESE SIGNS COULD BE PLACE OF W ORK STAFF MEMBERS ACTUAL TRANSACTION RECOGNITION IN EYE O F PUBLIC SIGN BOARD ETC. ACTUAL IDENTITY AND BUSINESS DOES NOT GET PROVED BY THESE PASSIVE DOCUMENTS WHEN IN FACT NO ACTUAL OR PASSIVE BUSINESS IS BEING CARRIED ON. THAT THE ASSESSEE HAS NOT BROUGHT ANYTHING ON RECORD TO SUPPORT THAT ANY DIVIDEND HAS BEEN DECLARED BY IT THAT A PERUSAL OF THE BANK STATEMENTS OF THE INVESTOR 130 COMPANIES REVEAL THAT THEY ARE RECEIVING HUGE AMOUNTS FROM VARIOUS OTHER COMPANIES AND TRANSFERRING FUNDS TO OTH ER COMPANIES. 57. IN SO FAR AS THE FINDING OF THE LD. CIT (A) W HILE DELETING THE ADDITION U/S.68 ARE ALSO BY AND LARGE AND SIMIL AR WHICH CAN BE BROADLY BE SUMMARIZED AS UNDER: THAT THE BASIC REQUIREMENT TO JUSTIFY IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS I N THE CASE OF THE ASSESSEE ARE PRIMA FACIE ESTABLISHED. REL EVANT DOCUMENTS WERE FURNISHED BY THE ASSESSEE. THE ASSESSE E FILED COPIES OF CONFIRMATION BANK STATEMENTS P&L A/C BALAN CE SHEET ASSESSMENT ORDERS OF THE INVESTORS/LENDERS TO ESTA BLISH SOURCE OF FUNDS IN THE HANDS OF INVESTOR/LENDER COMPA NIES. THAT THE A.O HAS NOT BROUGHT ANY ADVERSE MATERIAL TO REJECT THE EXPLANATIONS AND EVIDENCES SUBMITTED BY THE ASSESSEE EXCEPT ALLEGING THE NON-COMPLIANCE OF NOTICES ISSUED 131 AND 133(6) IN CASE OF CERTAIN INVESTORS. THAT NEITHER THE ASSESSEE NOR THE INVESTOR COMPANIES ARE ULTIMATE BENEFICIARIES BUT THERE IS ROUTING OF FUNDS FR OM BHUSHAN STEEL LTD. AND/OR BHUSHAN ENERGY LTD. [SPECIF ICALLY HELD SO IN 3 CASES VIZ. JAWAHAR CREDIT & HOLDINGS PV T. LTD. (A.Y. 2012-13) JINGLE BELLS ALUMINIUM PVT. LTD. (A.Y. 2012 -13) AND KASPER INFORMATION TECHNOLOGY PVT. LTD. (A.Y. 2012-13) ] THAT NOTHING IS MENTIONED IN THE ASSESSMENT ORDER REGARD ING ANY STATEMENT OF ANY PERSON PROVIDING ENTRY TO THE ASSESS EE. THAT THERE IS NO DENIAL AT ANY STAGE OF ASSESSMENT PROCEEDINGS BY ANY OF THE SUBSCRIBERS OF SHARE CAPITA L OF HAVING DEPOSITED MONEY IN THE ASSESSEE COMPANY. 131 THAT REPLIES TO NOTICES ISSUED U/S 133(6) WERE RECEIV ED FROM SEVERAL INVESTOR COMPANIES. THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE A.O TO CONCLUSIVELY PROVE THAT THE SHARE CAPITAL ORIGINATED FR OM ASSESSEE COMPANY. THE DOCUMENTS SUBMITTED CONCLUSIVELY ESTABLISH THAT THE MONEY CAME FROM THE INVESTORS/DEPOSITORS ACCOUNT AND NOWHERE CONNECTED WITH THE ASSESSEE COMPANY. THAT THERE IS NO CASH DEPOSIT IN THE BANK ACCOUNTS OF THE PARTIES FROM WHOM SHARE CAPITAL/ LOAN IS RECEIVED. THAT THE ENTIRE AMOUNT WAS RECEIVED THROUGH NORMAL BANKING CHANNELS. THAT THE DEPOSITORS HAVE ALSO CONFIRMED OF HAVING DEP OSITED MONEY IN THE COMPANY WHICH CONFIRMATIONS ALSO REVEAL SOURCE OF FUNDS PARTICULARS OF BANK ACCOUNTS THROUGH WHICH PAY MENTS HAVE BEEN RECEIVED AND INCOME TAX PARTICULARS. THAT THE ASSESSEE HAS ALLOTTED SHARES FOR SHARE APPLIC ATION MONIES RECEIVED. THAT THERE IS NO MANDATE OF LAW TO LOOK INTO THE SOUR CE OF SOURCE FOR THE A.YS PRIOR TO A.Y. 2013-14. THAT THE ASSESSEE CANNOT BE FASTENED WITH LIABILITY U/S 68 UNLESS A CAUSAL CONNECTION BETWEEN THE CASH DEPOSIT I N THE BANK ACCOUNT OF THE INVESTOR (IF ANY) AND THE ASSESSE E IS ESTABLISHED. THAT WHERE COMPLETE PARTICULARS OF THE SHARE APPLICATIO NS ARE FURNISHED TO THE A.O AND THE A.O HAS NOT CONDUCTED AN Y ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE THEN NO ADDITION CAN BE MA DE IN THE HANDS OF THE COMPANY. 132 THAT THE INVESTOR COMPANIES ARE HAVING ADEQUATE RESERV ES TO MAKE INVESTMENTS. THAT THE SOURCE OF FUNDS BY THE INVESTOR COMPANIES IN THE ASSESSEE IN ITS SHARE CAPITAL STANDS EXPLAINED. THAT THE INVESTOR COMPANIES ARE ALL ASSESSED TO TAX IN TH EIR RESPECTIVE JURISDICTIONS. THAT THE JUDGMENT OF STELLAR IS APPLICABLE ONLY WHERE SHARES ARE ISSUED IN THE NAMES OF NON-EXISTING PERSONS WHIC H IS NOT THE SITUATION IN THE INSTANT CASE. THAT WITHOUT PROOF OF HAVING INTRODUCED UNTAXED MONEY BY PROMOTERS OR DUBIOUS ANTECEDENTS ADVERSE VIEW CANNOT B E TAKEN. THAT THE PROVISIONS OF SECTION 68 ARE NOT APPLICABLE FOR BONUS SHARES SINCE THE AMOUNT IN QUESTION DOES NOT REPRESENT A NY FRESH CREDIT BUT ONLY A TRANSFER ENTRY REPRESENTING CAPI TALIZATION OF RESERVES AND SURPLUS AND IS NOT HIT BY SECTION 68. THAT THE ASSESSEE FAILED TO ESTABLISH THE IDENTITY & CREDITWORTHINESS OF THE INVESTORS/LENDERS AND THE GENU INENESS OF THE TRANSACTIONS. THAT FEW INVESTORS/LENDERS DID NOT REPLY TO NOTICES U/ S 133(6) OR ATTEND SUMMONS U/S 131. THAT FEW SHARE APPLICANTS AND LENDER COMPANIES HAVE S AME ADDRESS AND COMMON DIRECTORS. THAT THERE WAS NO REASON WHY THE APPELLANT COULD NOT PRODUCE PRINCIPAL OFFICERS/DIRECTORS OF COMPANIES WH EN THE ENTIRE MONEY CAME FROM THE SAME GROUP AND THE APPELLA NT ALSO BELONGED TO THE SAME GROUP. THE PATTERN OF MONEY MOVEM ENT RAISED SUSPICION OF ACCOMMODATION ENTRIES PAGE 4 PA RA 7 OF C.I.T(A)S ORDER IN THE CASE OF GLOBUS REALINFRA PVT. LTD. (A.Y. 2013-14). 133 58. SINCE THE ADDITIONS HAVE BEEN MADE BY INVOKIN G THE DEEMING PROVISION OF SECTION 68 THE SAME FOR SAKE OF READY REFERENCE IS REPRODUCED AS UNDER: 68. CASH CREDITS .--WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND T HE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. SUBSEQUENTLY THE TREATMENT OF SHARE CAPITAL AMOUNT UNDER SECTION 68 OF THE ACT WAS AMENDED BY FINANCE ACT 2012 W.E.F. 1-4-2013 TO INSERT THE FOLLOWING: PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY (NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTER ESTED) AND THE SUM SO CREDITED CONSISTS OF SHARE APPLICATION MONEY SHARE CAPITAL SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED ANY EXPLANATION OFFERED BY SUCH ASSESSEE-CO MPANY SHALL BE DEEMED TO BE NOT SATISFACTORY UNLESS A) THE PERSON BEING A RESIDENT IN WHOSE NAME SUCH CREDIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALSO OFFERS A N EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED ; AND B) SUCH EXPLANATION IN THE OPINION OF THE ASSESSING OFFICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY: PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRS T PROVISO SHALL APPLY IF THE PERSON IN WHOSE NAME THE SUM REFERRED TO THEREIN IS RECORDED IS A VENTURE CAPITAL FUND OR A VENTURE CA PITAL COMPANY REFERRED TO IN CLAUSE (23FB) OF SECTION 10. 134 59. NOW PROVISO TO SECTION 68 CAST AN ADDITIONAL ONUS ON THE ASSESSEE COMPANY FOR PROVING THE SOURCE OF THE SOUR CE OF SHARE CAPITAL/SHARE PREMIUM WHICH HAS BEEN EFFECTIV E FROM 01.04.2013 AND MEMORANDUM EXPLAINING THE FINANCE BI LL 2012 WHILE INTRODUCING THE PROVISO WAS WITH AN OBJE CT TO CURVE OUT THE PERNICIOUS PRACTICE OF CONVERSION OF UNACCOUNTED MONEY THROUGH MASQUERADE OF INVESTMENTS IN THE SHARE CAPITAL OF A COMPANY ESPECIALLY IN THE CA SES OF CLOSELY HELD COMPANIES. IN FACT THE VERY PURPOSE O F INTRODUCTION OF SECTION 68 IN THE INCOME-TAX ACT 1 961 WAS TO BRING TO TAX BOGUS CREDITS RECORDED IN THE REGULAR BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY PREVIOUS YEAR IN ORDER TO CAMOUFLAGE BLACK MONEY AS WHITE MONEY (MOS TLY INTRODUCED INTO THE REGULAR BOOKS OF ACCOUNT IN THE FORM OF CAPITAL RECEIPTS SUCH AS SHARE CAPITAL LOANS ADVA NCES ETC. OR IN THE FORM OF BOGUS INCOME CHARGEABLE TO TAX AT A LOWER RATES) WITHOUT HAVING TO PAY TAXES THEREON OR PAYIN G TAXES AT A LOWER RATE. SECTION 68 THUS HAS NO APPLICABILITY WHERE THERE IS NO INVOLVEMENT OF ANY UNACCOUNTED OR UNDISCLOSED FUNDS OF THE ASSESSEE WHICH HAVE BEEN INTRODUCED INTO THE BO OKS OF THE ASSESSEE BY WAY OF CASH CREDIT. IT DOES NOT APP LY TO CASH CREDITS WHICH APPEAR MERELY ON ACCOUNT OF ROTATION OR MOVEMENT OF ACCOUNTED OR DISCLOSED FUNDS BETWEEN GR OUP ENTITIES AS HAS HAPPENED IN THE INSTANT CASE. FOR S ECTION 68 TO APPLY THE RECEIPTS SHOULD ESSENTIALLY BE OF INCOME NATURE. AS PER TRITE LAW SECTION 68 CANNOT BE MADE APPLICABLE TO CAPITAL RECEIPTS. 135 60. THUS WHAT IS TO BE EXAMINED IS WHETHER THE ONUS TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE CRED ITORS AND GENUINENESS OF THE TRANSACTION STANDS ESTABLISHED O R NOT FIRSTLY WITH REGARD TO THE DOCUMENTARY EVIDENCES FILED TO SUBSTANTIATE THE EXPLANATION; AND SECONDLY WHETHER ASSESSING OFFICER HAS BROUGHT ANYTHING ON RECORD TO REBUT THE EXPLANATION AND EVIDENCES FILED BY THE ASSESSEE OR HERE IS ANY PRIOR INFORMATION THAT ALL THE TRANSACTION IS COLOU RABLE. 61. THE LD. CIT-DR RELYING UPON THE ORDER OF THE ASSESSING OFFICER HAD CONTENDED THAT THE ASSESSEES HEREIN HAS AVAILED ACCOMMODATION ENTRIES WHEREIN THEY HAVE INTRODUCED THE UNACCOUNTED/UNDISCLOSED FUND INTO THEIR BOOKS OF AC COUNT IN THE GARB OF SHARE CAPITAL AND OR LOAN AND ADVANCES. HOWEVER THERE IS NOT AN IOTA OF MATERIAL BY WAY OF ANY INQU IRY OR INFORMATION FROM INVESTIGATION WING THAT FIRSTLY ABOVE NAMED ASSESSEE COMPANIES HAVE BEEN FOUND TO BE BENEFICIAR Y OF ACCOMMODATION ENTRY IN ANY SEARCH OR SURVEY IN THE CASE OF ENTRY OPERATOR; AND SECONDLY ANY INQUIRY HAS BEEN MADE IN THE CASE OF THE ASSESSEE COMPANIES WHEREIN IT HAS B EEN FOUND THAT THESE COMPANIES HAVE TAKEN ANY ACCOMMODATION E NTRY BY ROTATING THEIR UNACCOUNTED MONEY OR INCOME. THOU GH THERE IS A ROTATION/MOVEMENT OF MONEY FROM ONE COMP ANY TO ANOTHER THROUGH WEB OF GROUP COMPANIES OF BHUSHAN E NERGY LTD. AND THE ENTITIES OWNED BY COMMON SHAREHOLDER WHICH IS A SUBSIDIARY FLAGSHIP COMPANY BHUSHAN STEEL LTD. N OW MERGED WITH TATA STEELS LTD. THE FUND HAVE FLOWN FR OM BHUSHAN ENERGY LTD. THROUGH MAZE OF GROUP COMPANIES 136 WHEREBY THE FUNDS WHICH HAS BEEN ACCOUNTED IN THE B OOKS OF BHUSHAN ENERGY LTD. HAVE BEEN ROUTED THROUGH GROUP COMPANIES AND FINALLY HAVE BEEN REROUTED BACK INTO THE BOOKS OF THE BHUSHAN ENERGY LTD. THE ENTIRE CHAIN AND LIN K INVOLVES ACTUAL MOVEMENT OF ACCOUNTED FUND OF BEL IN THE FOR M OF SHARE CAPITAL AND OR LOAN ADVANCES INTO THE ASSESSE E- COMPANY HEREIN AND SUBSEQUENT REINTRODUCTION OF SUC H FUNDS INTO REGULAR ACCOUNT OF BEL TO AUGMENT ITS CAPITAL BASE. 61. HOWEVER INDEPENDENT OF THAT WE WILL FIRST EXAMINE AS TO WHETHER AT THE THRESHOLD THE ASSESSEES WERE ABLE T O DISCHARGE THEIR PRIMARY ONUS CAST UPON THEM FOR DIS CHARGING THEIR BURDEN OF PROVING THE NATURE AND SOURCE OF CR EDIT I.E. IDENTITY AND CREDITWORTHINESS OF THE LENDER/SUBSCRI BER COMPANIES AND GENUINENESS OF THE TRANSACTION. AS DI SCUSSED ABOVE THE PRIMARY DOCUMENTS BY THE LENDER/SUBSCRIBE R COMPANIES HAVE BEEN FILED WHICH INCLUDED CONFIRMATI ON THEIR BANK STATEMENT THEIR INCOME RETURN BALANCE SHEET AND PROFIT AND LOSS ACCOUNT MOST IMPORTANTLY ASSESSMENT ORDE RS PASSED IN LENDER/ SUBSCRIBER COMPANIES FOR THE SAME ASSESSMENT YEARS THAT IS A.Y. 2012-13 & 2013-14 P ASSED U/S.143(3)/147 AND CATENA OF OTHER DETAILS. ALL THE SE DETAILS HAVE NEITHER BEEN CONTROVERTED NOR HAVE BEEN REBUTT ED BY THE ASSESSING OFFICER. BY AND LARGE IDENTITIES CANNOT B E DISPUTED. WHAT HAS BEEN DISPUTED IS THE CREDITWORTHINESS AND THIS IS BECAUSE THEY DO NOT HAVE MUCH REVENUE FROM OPERATI ONS AND WERE SHOWING MARGINAL INCOME. HOWEVER NOWHERE THE ASSESSING OFFICER HAS DISPUTED THE FUNDS AVAILABLE IN THEIR 137 BALANCES SHEETS DULY ACCOUNTED FOR AND THE SOURCE FROM SUCH FUNDS HAVE COME. ALL THE SUBSCRIBERS/ LENDERS ARE C ORPORATE ENTITIES HAVING SEPARATE LEGAL IDENTITY WHO ARE REG ULARLY ASSESSED TO TAX AND COMPLYING WITH ALL STATUTORY REQUIREMENTS. ONE VERY IMPORTANT FACT HERE IN THIS CASE ARE THAT IN ALL THE CASES SUBSCRIBERS/ LENDERS COMPANIE S FOR THE RELEVANT ASSESSMENT YEAR SCRUTINY ASSESSMENTS HAVE BEEN DONE U/S 143(3) OR THE CASES HAVE BEEN REOPENED U/S .147 AND THEREAFTER ASSESSMENTS HAVE BEEN COMPLETED WHER EIN IN SOME CASES EXACTLY ON THE SAME AMOUNT ADDITIONS HAV E BEEN MADE. THUS IN MANY INSTANCES THERE ARE DOUBLE ADDI TIONS ON THE SAME AMOUNT. ERGO IN VIEW OF THESE FACTS AND EVIDENCES THE IDENTITY OF THE INVESTORS STANDS ESTABLISHED. 62. IN SO FAR AS GENUINENESS OF THE TRANSACTION IS C ONCERNED THE FUNDS HAVE BEEN RECEIVED THROUGH BANKING CHANNELS AN D BANK STATEMENT OF ALL THE INVESTORS/LENDERS COMPANY HAVE BEE N FILED WHICH PROVE CONCLUSIVELY THAT THE ASSESSEE COMPANIES H AD RECEIVED THE FUNDS FROM THE SAID INVESTORS WHO IN TURN HAVE RECEIVED MONEY FROM THE SAME GROUP COMPANIES; AND TH EY HAVE NOT ONLY CORROBORATED THIS FACT IN THEIR CONFIRMATION ALONG WITH COPIES OF INCOME TAX RETURN BUT ALSO FROM THEIR AUDITED BALANCE SHEETS FILED ALONGWITH THEIR INCOME TAX RETURNS. 63. AGAIN IN SO FAR AS THE CREDITWORTHINESS IS CON CERNED THESE COMPANIES HAVE MADE INVESTMENTS THROUGH BANKING CHANNE LS DULY REFLECTED IN THE BANK STATEMENT AND HAVE ALSO FILED BAL ANCE SHEETS AND DETAILED EXPLANATION THEREAFTER SHOWING THEIR AVA ILABILITY OF FUNDS FOR MAKING THE INVESTMENTS. THE CASE OF THE DEPAR TMENT BEFORE US HAS BEEN THAT THESE COMPANIES HAD VERY MEAGE R INCOME 138 HOWEVER THE REVENUE FROM THE OPERATIONS DID NOT JUSTIF Y SUCH AN INVESTMENT. FIRST OF ALL WHAT IS REQUIRED TO BE SEEN IS WHETHER THE LENDER/INVESTOR COMPANIES HAD SUFFICIENT FUNDS AVAILA BLE WITH THEM IN THE BOOKS/ BALANCE SHEETS AND IT IS NOT NECESSAR Y THAT LOAN OR ADVANCES OR SHARES ARE SUBSCRIBED SHOULD B E OUT OF TAXABLE INCOME ONLY. EITHER IT COULD BE FROM BORROWED FUNDS OR FROM THE INVESTMENTS STANDING IN THEIR BALANCE SHEET. IF THE ASSESSING OFFICER DOUBTED THE SOURCE OF THE FUND OF TH E INVESTOR COMPANIES THEN ASSESSING OFFICER WAS REQUIRED TO AT L EAST CONDUCT PRIMA FACIE INQUIRY FROM THESE INVESTORS TO REBUT THE ASSESSEES EXPLANATION ABOUT THE SOURCE OF THE FUNDS IN THE HANDS OF THE INVESTOR COMPANIES. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VRINDAVAN FARMS (P) LTD. ITA NO. 71 72 84/20 15 VIDE JUDGMENT AND ORDER DATED 12.08.2015 WHEREIN ONE OF THE GROUND RAISED BY THE REVENUE WAS THAT CREDITWORTHINESS IS NOT PROVED BECAUSE LENDER COMPANIES HAD SHOWN LOW INCO ME IN THEIR INCOME TAX RETURN. THE COURT FOUND THAT THE ENTIRE DETAIL S OF SHARE APPLICANTS WERE MADE AVAILABLE TO THE ASSESSING OFFICER INCLUDING PAN CONFIRMATIONS BANK STATEMENTS THEIR BAL ANCE SHEETS AND PROFIT & LOSS ACCOUNTS AND CERTIFICATES OF I NCORPORATION ETC. ASSESSING OFFICER HAD NOT UNDERTAKEN ANY INQUIRY OR INVESTIGATION OF THE VERACITY OF ABOVE DOCUMENTS. HENC E TRIBUNAL HAS RIGHTLY HELD THAT WITHOUT DOUBTING THE DOCUMENT THE ASSESSING OFFICER CANNOT MAKE THE ADDITION ONLY ON PRE SUMPTION THAT LOW RETURN OF INCOME IS SUFFICIENT TO DOUBT THE CREDITWORTHINESS OF THE SHARE HOLDERS. THE ASSESSEE BY PRODUCING THE ABOVE DOCUMENTS HAS DISCHARGED ITS INITIAL ONUS OF SHOWING THE GENUINENESS AND CREDITWORTHINESS OF THE SHARE HOL DERS. SAME RATIO WILL APPLY HERE ALSO. FURTHER EVEN FOR THE SAK E OF REPETITION ONE VERY PECULIAR FACT AS INCORPORATED ABOVE IS THAT I N MOST OF THE 139 CASES OF THE INVESTOR COMPANYS ASSESSMENTS HAVE BEEN MADE U/S.143(3) OR U/S 147 WHEREIN EITHER THEIR SOURCE OF FUND HAVE BEEN ACCEPTED OR CERTAIN ADDITIONS HAVE BEEN MADE BA SED ON SCRUTINY EXAMINATION. IT IS NOT A CASE WHERE THERE IS A NY COGENT FINDING IN THOSE CASES THAT IT IS UNACCOUNTED MONEY OF T HE ASSESSEE COMPANIES WHICH HAS BEEN ROUTED THROUGH THEM OR IT IS THEIR UNACCOUNTED MONEY WHICH HAS BEEN INVESTED IN TH E ASSESSEE COMPANY. IN ABSENCE OF ANY SUCH FINDING OR MATERIAL NO ADVERSE INFERENCE CAN BE DRAWN IN THE CASE OF THE ASSESSEE COMPANIES. THUS THE IDENTITY AND THE CREDITWORTHINESS OF THE INVESTOR/SUBSCRIBER COMPANY STANDS FULLY ESTABLISHED A ND SO ALSO THE GENUINENESS OF THE TRANSACTION. 64. NOW COMING TO THE ARGUMENTS RAISED ON BEHALF OF THE REVENUE THAT IN SOME OF THE CASE NOTICES U/S 133(6) HA S NOT BEEN SERVED OR RESPONDED AND DIRECTORS OF THE LENDER COMPA NIES WERE NOT PRODUCED. FIRST OF ALL IT WAS ONLY IN FEW CASES T HAT NOTICES WERE NOT RESPONDED TO AND IN MAJORITY OF CASES THEY WE RE DULY RESPONDED. BUT BE THAT AS MAY BE WHERE NOTICES HAVE N OT BEEN SERVED OR NOT RESPONDED TO THEN ALSO IN THE PRESENT CAS ES THEIR IDENTITY CANNOT BE DISPUTED BECAUSE IN ALL THE CASES A SSESSMENTS HAVE BEEN DONE UNDER SCRUTINY PROCEEDINGS U/SS. 143( 3) OR 147; AND IN MOST OF THE CASES APPEALS ARE ALSO PENDING. HE NCE THIS FACTOR ITSELF WILL NOT VITIATE THE CASE OF THE ASSESSEES. SIMILARLY EVEN IF DIRECTORS WERE NOT PRODUCED THEN THERE IS NO L EGAL OBLIGATION ON THE ASSESSEE TO PRODUCED THE DIRECTORS A S HELD IN MANY CASES AS RELIED UPON BY THE LD. COUNSEL IN FORE GOING PARA 27. APART FROM THAT ONCE ASSESSMENTS HAVE BEEN MADE O N SUBSTANTIVE BASIS IN EACH AND EVERY CASE THEN MERE N ON PRODUCTION OF DIRECTORS LOSES ITS SIGNIFICANCE WHEN AL L THE STATUTORY 140 RECORDS AND SOURCES OF FUNDS HAVE BEEN DULY EXPLAIN ED ON WHICH NO ADVERSE MATERIAL HAS BEEN BROUGHT TO REBUT THE SAME BY THE ASSESSING OFFICER. THUS IN OUR OPINION THIS FACTOR ON THE FACTS OF THE PRESENT CASE IS NOT SO DETRIMENTAL. 65. ONE KEY CONTENTION AND FACT WHICH HAS BEEN HA RPED UPON BY THE LD. COUNSEL AND ALSO DISCUSSED BY US AT SEVERAL P LACES HEREIN IN THE FOREGOING PARAGRAPHS IS THAT ALL THE FUNDS HAVE BEEN ROUTED THROUGH BHUSHAN ENERGY LTD. BY WAY OF ADVANCES AND LO ANS GIVEN TO THE MAZE OF ITS GROUP COMPANIES WHO HAVE INVESTED O R GIVEN LOAN WITHIN THE SAME GROUP COMPANIES WHICH AGAIN HA S BEEN REINVESTED IN THE BHUSHAN ENERGY LTD. LD. COUNSEL BEF ORE US HAS DEMONSTRATED BY FILING FUND FLOW STATEMENT IN THE CASE O F ALL THE COMPANIES ALONG WITH THEIR BANK STATEMENT AND BALANCE S HEETS. IN SO FAR AS BANK STATEMENT AND BALANCE SHEETS ARE CONCER NED THEY HAVE ALREADY BEEN FILED BEFORE THE ASSESSING OFFICER AND LD. CIT (A) AND THIS SPECIFIC PLEA WAS ALSO RAISED BEFORE THE LD. CIT (A)S EXCEPT FOR THE FACT THAT NOW BEFORE US HE HAS TRIED TO D EMONSTRATE THE FLOW OF MONEY FROM BHUSHAN ENERGY LTD. TO THE GROUP COMPANIES AND THAT ALL THESE FUNDS HAVE COME FROM THE ACCOUNTED FUNDS DULY RECORDED IN THE BOOKS OF THE BHUSHAN ENER GY LTD. AND THE BOOKS OF THE LENDER COMPANIES. SINCE THE FUND FLO W CHART TO EXPLAIN THE SOURCE OF THE FUNDS AND ROTATION OF FUNDS A MONGST THE GROUP COMPANIES IS ONE OF THE VITAL FACTORS WHICH IMPI NGE UPON THE CASE OF THE ASSESSEE COMPANIES THEREFORE THESE ARE M ADE PART OF THIS ORDER AND ARE ANNEXURE TO THIS ORDER RUNNING INTO 38 PAGES WHICH CONTAINS THE ADDITION MADE BY THE ASSE SSING OFFICER FROM THE FIGURES GIVEN IN THE BALANCE SHEET; A ND FLOW OF FUNDS FROM ONE COMPANY TO OTHER . ALL THE ENTRIES ARE VERIFIABLE FROM THE BANK STATEMENTS PLACED BEFORE US. 141 66. IN SUPPORT OF THE FUND FLOW STATEMENTS BALANCE SHEETS AND THE BANK STATEMENT OF ALL THESE COMPANIES HAVE BEEN FILE D SEPARATELY BEFORE US AND HAS BEEN DEMONSTRATED WITH ON E TO ONE CORRELATION OF THE ENTRIES THEREIN. THE THEORY OF FUND FLOW STATEMENT WAS ALSO RAISED BEFORE THE LD. CIT (A) FOR WH ICH REMAND REPORT WAS ALSO CALLED FOR WHICH HAS BEEN DEALT AND I NCORPORATED IN THE APPELLATE ORDER BY THE LD. CIT (A) ALSO ESPEC IALLY IN THE CASE OF M/S. JAWAHAR CREDIT AND HOLDING PVT. LTD. VS. ITO WARD-13(3) NEW DELHI FOR ASSESSMENT YEAR 2012-13 IN ITA NO.5398/DEL/2019. THUS IT IS NOT A NEW PLEA WHICH H AS BEEN RAISED BY THE ASSESSEE COUNSEL BEFORE US FOR THE FIRS T TIME ALBEIT NOW IT HAS BEEN PRESENTED IN DETAIL MANNER IN CASE OF EACH AND EVERY ASSESSEE COMPANY WHICH IS EVIDENT FROM THE ANNEXURES HERETO OF THIS ORDER. THEREFORE THESE FUND FLOW STATEME NTS DULY SUPPORTED BY BANK STATEMENT OF OTHER LENDER COMPANIES W HICH ARE ALREADY PART OF RECORD EVEN IF IT IS RECKONED AS ADD ITIONAL EVIDENCE BUT THEY DO NOT REQUIRE REVENUE-EXAMINATION BY THE ASSE SSING OFFICER WHICH HAS BEEN PLEADED BY THE LD. CIT DR BEF ORE US. 67. THUS IT IS QUITE EVIDENT THAT IN VARIOUS CHAINS OF LINKS AND THE FLOW OF THE FUNDS NOWHERE THERE ARE ANY UNACCOUNT ED FUNDS OF ANY OF THE LENDER COMPANIES OR IF ANY OF THE ASSESSEE COMPANIES WHICH CAN BE SAID TO HAVE BEEN INTRODUCED EITHER BY TH E ASSESSEE COMPANY OR BY THE LENDER COMPANY. THE SOURCE OF THE SOURCE HAS BEEN PROVED AT ALL LEVELS RIGHT FROM ORIGIN OF THE FU NDS TO THE FINAL DESTINATION STANDS SUBSTANTIATED AND NEITHER THERE IS UNAC COUNTED MONEY NOR THERE IS ANY OUTSIDE ENTRY OPERATOR TO ROUTE THE UNACCOUNTED FUNDS FOR MAKING SUCH INVESTMENTS. ALTHOUG H LOOKING TO THE PECULIARITY OF THE FACTS AND CIRCUMSTAN CES OF THE CASE WHERE THESE COMPANIES CAN BE RECKONED AS CONDUI T ENTITIES 142 FOR ROTATION OF MONEY BUT NOWHERE CAN IT BE SAID THAT A NY OF THE ENTITIES HAVE ROUTED THEIR OWN UNACCOUNTED MONEY. THIS IS THE PRECISE REASON THAT IN MOST OF THE CASES LD. CIT APPEAL S HAVE DELETED THE ADDITION; AND IN 3 CASES HE HAS HELD THAT THEY MUST HAVE RECEIVED SOME COMMISSION FOR SUCH ROTATION OF FU NDS ALBEIT SUCH OBSERVATION MAY NOT HAVE LEGAL AND FACTUAL LEGS TO STAND. 68. THUS IN VIEW OF OUR DISCUSSION AND FINDING O F FACT WE DO NOT FIND ANY REASON OR JUSTIFICATION FOR SUSTAINING SUCH AN ADDITION OF SHARE CAPITAL OR SHARE PREMIUM UNDER THE DEEMING PROV ISION OF SECTION 68. WE ARE IN TANDEM WITH THE ARGUMENTS RAISED BY THE LD. COUNSEL AND THE EXPLANATION GIVEN BY HIM IN VIEW OF S UPPORTING DOCUMENTS AS DEALT AND INCORPORATED ABOVE AND ARE ACCE PTED. IN THE RESULT ADDITIONS AS MADE BY THE ASSESSING OFFICER O N THIS SCORE ARE DIRECTED TO BE DELETED. 69. NOW COMING TO THE ISSUE OF FRESH ADDITION MADE BY THE LD. CIT (A) BY MAKING ENHANCEMENT ON ACCOUNT OF ALLEGED C OMMISSION INCOME IN THREE CASES. THOUGH AS DISCUSSED ABOVE THE LD. CIT (A) HAS DELETED THE ADDITION MADE U/S.68 ON THE GROUND THAT NO UNACCOUNTED FUNDS HAVE COME IN THE BANK ACCOUNT OF THE ASSESSEE COMPANIES NEVERTHELESS HAS HELD THAT ASSESSEE COMPA NY MIGHT NOT HAVE NOT AVAILED ANY ACCOMMODATION ENTRY BUT HAS MER ELY PROVIDED FACILITY TO ROUTE THE FUND OF BHUSHAN STEEL L TD. IN VIEW OF SOME OF ALLEGED COMMISSION @ 2%. THIS FINDING IS PU RELY BASED ON GUESSWORK AND SURMISES. IN NUTSHELL LD. CIT (A) HA S TREATED THE ACCOMMODATION ENTRY I.E. JAMAKHARCHI PROVIDING FACILITY TO ROUTE TRANSACTION IN VIEW OF SOME COMMISSION INCOME. THE RE LEVANT FINDINGS OF THE LD. CIT (A) IN ALL THE THREE CASES HA VE ALREADY BEEN INCORPORATED ABOVE. FIRST OF ALL IT IS NEITHER THE CAS E OF THE ASSESSING OFFICER NOR HAS BEEN DISCUSSED IN ANY OF THE ASSESSMENT 143 ORDERS. WHAT LD. CIT (A) IS TRYING TO DO IS INTRODUCI NG A NEW SOURCE OF INCOME AND THAT TO BE BASED ON SOME HYPOTHETICAL PRE SUMPTION. NO SHOW CAUSE NOTICE HAS BEEN ISSUED TO THE ASSESSE E. LD. CIT (A) BEFORE FASTENING SUCH PRESUMPTIVE ADDITION IN THE HAND S OF THE ASSESSEE COMPANY. THIS IS IN GROSS VIOLATION OF THE P ROVISIONS OF THE ACT BUT ALSO THE PRINCIPLES OF NATURAL JUSTICE. TH E ACT PROVIDES THAT BEFORE ENHANCING ANY INCOME LD. CIT (A) IS REQUI RED TO GIVE OPPORTUNITY TO THE ASSESSEE. THESE ADDITIONS HAVE NEITH ER BEEN DISCLOSED IN THE RETURN OF INCOME NOR HAVE BEEN CONS IDERED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND THEREFOR E MAKING SUCH ADDITION OF NEW SOURCE OF INCOME IS BEYOND THE S COPE OF ENHANCEMENT BY THE LD. CIT (A). HONBLE JURISDICTIONA L HIGH IN THE CASE OF CIT VS. UNION TYRES (1999) 240 ITR 556 (DEL) HAS OBSERVED AND HELD AS UNDER: THE FIRST APPELLATE AUTHORITY IS INVESTED WITH VER Y WIDE POWERS UNDER S. 251(1)(A) AND ONCE AN ASSESSMENT ORDER IS BROUGH T BEFORE THE AUTHORITY HIS COMPETENCE IS NOT RESTRICTED TO EXAM INING ONLY THOSE ASPECTS OF THE ASSESSMENT ABOUT WHICH THE ASSESSEE MAKES A GRIEVANCE AND RANGES OVER THE WHOLE ASSESSMENT TO C ORRECT THE A.O NOT ONLY WITH REGARD TO A MATTER RAISED BY THE ASSE SSEE IN APPEAL BUT ALSO WITH REGARD TO ANY OTHER MATTER WHICH HAS BEEN CONSIDERED BY THE A.O AND DETERMINED IN THE COURSE OF ASSESSMENT. HOWEVER THERE IS A SOLITARY BUT SIGNIFICANT LIMITATION TO THE POW ER OF REVISION VIZ. THAT IT IS NOT OPEN TO THE AAC TO INTRODUCE IN THE ASSES SMENT A NEW SOURCE OF INCOME AND THE ASSESSMENT HAS TO BE CONFINED TO THOSE ITEMS OF INCOME WHICH WERE THE SUBJECT-MATTER OF ORIGINAL AS SESSMENT. APPLYING THE ABOVE WELL SETTLED PRINCIPLES OF LAW T O THE FACTS OF THE INSTANT CASE THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT IN CALLING FOR A REMAND REPORT ON THE FOUR POINTS THE AAC HAD EXCEED ED HIS JURISDICTION. WHILE COMPUTING THE TOTAL BUSINESS IN COME OF THE 144 ASSESSEE THE A.O HAD ESTIMATED THE SALES AT AN ENH ANCED FIGURE AND HAD APPLIED A HIGHER RATE OF GROSS PROFIT. THUS TH E ONLY MATTER DEALT WITH BY THE A.O IN THE ASSESSMENT ORDER WAS THE EST IMATION OF PROFITS AND GAIN OF THE BUSINESS OF THE ASSESSEE. NONE OF T HE FOUR POINTS RAISED IN REMAND REPORT HAD ANY BEARING ON THE QUES TION OF ESTIMATION OF EITHER THE SALES OR THE GROSS PROFIT RATE. IT IS EVIDENT THAT THE AAC HAD HIS DOUBTS ABOUT THE CAPACITY OF THE ASSESSEE T O RAISE FINANCES FOR THE PURCHASE OF GOODS AND SHOW A HUGE TURNOVER IN T HE VERY FIRST YEAR OF HIS BUSINESS. IN OTHER WORDS THE ENQUIRY ORDERE D BY THE AAC WAS TO SATISFY HIMSELF ABOUT THE SOURCE OF INVESTMENT B Y THE ASSESSEE. IT IS AXIOMATIC THAT FAILURE TO PROVE THE SOURCES OF INVE STMENT WILL RESULT IN ADDITION IN THE HANDS OF THE ASSESSEE UNDER A DIFFE RENT PROVISION OF LAW AND WILL NOT HAVE MUCH RELEVANCE IN THE ESTIMAT ION OF SALES AND GROSS PROFIT RATE ADOPTED BY THE A.O. ANY ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT WOULD CONSTITUTE A NEW SOURC E OF INCOME WHICH WAS NOT THE SUBJECT-MATTER OF ASSESSMENT BEFO RE THE A.O AND THEREFORE IT WAS NOT OPEN TO THE FIRST APPELLATE A UTHORITY TO DIRECT THE A.O TO CONDUCT ENQUIRY ON THE SAID FOUR POINTS.CI T VS. SHAPOORJI PALLONJI MISTRY (1962) 44 ITR 891 (SC) : TC 7R.576 AND CIT VS. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA (1967) 66 ITR 44 3 (SC) : TC 7R.590 APPLIED. [PARAS 11 & 12] 70. FROM THE VARIOUS JUDGMENTS RELIED UPON BY THE LD. COUNSEL ON THIS POINT THE PROPOSITION WHICH CAN BE CULLED OUT ARE AS UNDER: (I) THAT THE C.I.T.(A) HAS NO JURISDICTION TO TRAVEL BEYOND THE SUBJECT MATTER OF THE ASSESSMENT OR BEYOND THE RECORD I .E. THE RETURN OF INCOME AND THE ASSESSMENT ORDER; AND HIS PO WER OF ENHANCEMENT RELATES ONLY TO THAT INCOME WHICH HAS BE EN SUBJECTED TO THE PROCESS OF ASSESSMENT. 145 (II) THAT THE PROCESS OF ASSESSMENT INCLUDES NOT ONLY TAXING AN INCOME BUT ALSO HOLDING THAT A PARTICULAR INCOME IS NO T TAXABLE. (III) THAT THEREFORE THE C.I.T.(A) CAN TAX THE INCOME WHICH THE A.O HAD EXPRESSLY OR BY CLEAR IMPLICATION CONSIDER ED AND HELD TO BE NOT TAXABLE IRRESPECTIVE OF THE QUESTION WHETHER THE INCOME FALLS UNDER A HEAD WITH REGARD TO WHICH AN APPEAL HA S OR HAS NOT BEEN PREFERRED. HOWEVER THE C.I.T.(A) CANNOT TAX AN ITEM OF INCOME THE TAXABILITY OF WHICH HAD NOT BEEN CONSIDER ED AT ALL BY THE A.O . 71. THUS SUCH AN ADDITION MADE BY THE LD. CIT (A) IS DEFINITELY BEYOND THE SCOPE OF JURISDICTION CONFERRED UPON THE L D. CIT(A) ON U/S.251 BY INTRODUCING NEW SOURCE OF INCOME AND THAT WITHOUT GIVING ANY REASONABLE CAUSE AGAINST ENHANCEMENT. 72. EVEN OTHERWISE ALSO SINCE ALL THE ASSESSEES AR E ESSENTIALLY GROUP COMPANIES AND THE COMMON MANAGEMENT UNDER ONE CONTROL THE QUESTION OF ANY HYPOTHETICAL CHARGE OF ANY COMMISSION INCOME FOR PROVIDING FACILITY TO ROUTE THE FUNDS OF ANY GROUP COMPANY DOES NOT ARISE. THE ENTIRE ADDITION IS BASED O N SURMISES AND PRESUMPTION BECAUSE THE LD. CIT (A)S REASONING IS BASED PRACTICE PREVALENT IN THE MARKET SANS ANY TANGIBLE MAT ERIAL OR INQUIRY OR EVIDENCE ON RECORD. THUS THE ADDITION MA DE ON BASIS OF ESTIMATION OF 2% OF COMMISSION INCOME IN THE CASE OF T HESE THREE ASSESSEES I.E. JAWAHAR CREDIT AND HOLDINGS PVT. LTD. JINGLE BELLS ALLUMINIUM PVT. LTD. AND KASPER INFORMATION TECHNOLOGY PVT. LTD. IS DIRECTED TO BE DELETED. 73. COMING TO THE REVENUES APPEAL CHALLENGING THE RESTRICTION OF ADDITION OF RS.23 32 813/- IN THE CASE OF M/S. STY LISH CONSTRUCTION PVT. LTD. FOR ASSESSMENT YEAR 2012-13 BY IN VOKING 146 THE PROVISION OF SECTION 14A READ WITH RULE 8D TO RS.5 LACS. AS STATED ABOVE THE ASSESSEE COMPANY HAD MADE SUO-MOTO DISALLOWANCE OF RS.2 23 660/- WHICH CAN BE SAID TO B E EXPENSES ATTRIBUTABLE FOR EARNING OF EXEMPT INCOME. THIS WAS COM PUTED BY THE ASSESSEE BY AGGREGATING THE TOTAL DIRECT EXPENSES DEB ITED IN ITS PROFIT AND LOSS ACCOUNT AS PER THE FIGURES GIVEN IN THE EARLIER PART OF THE ORDER. THE DIVIDEND INCOME RECEIVED BY THE ASS ESSEE IS ONLY RS.9 94 717/- AND THEREFORE SUCH AN ATTRIBUTION FOR PR OVIDING MAN POWER SERVICES ETC. CAN BE SAID TO BE REASONABLE B ASIS. THE ASSESSING OFFICER WITHOUT RECORDING ANY SUBJECTIVE SA TISFACTION HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE OR THE N ATURE OF EXPENSES DEBITED HAS MECHANICALLY APPLIED RULE 8D W HICH IS NOT THE MANDATE OF THE LAW IN VIEW OF SECTION 14A(2). THUS THERE WAS NO REASON FOR MAKING ANY ADDITION OVER AND ABOVE THE SUO MOTO DISALLOWANCE MADE BY THE ASSESSEE. HOWEVER THE LD. C IT (A) HAS FOUND IT REASONABLE TO RESTRICT THE DISALLOWANCE U/S.14 A TO RS.5 LACS WHICH IN OUR OPINION IS FULLY JUSTIFIED AND THE REFORE WE HOLD THAT THE BALANCE ADDITION OF RS.18 32 813/- HAS RIGHTL Y BEEN DELETED BY THE LD. CIT(A). 74. IN THE CASE OF ANGEL CEMENT PVT. LTD FOR ASSESSM ENT YEAR 2012-13; IN THE CASE OF DELIGHT RESORTS PVT. LTD. FOR AS SESSMENT YEAR 2012-13; AND STYLISH CONSTRUCTION PVT. LTD. FOR A SSESSMENT YEAR 2012-13 THE DEPARTMENT HAS CHALLENGED THE ALLEGE D ADMISSION OF ADDITIONAL EVIDENCE BY THE LD. CIT (A) WITHOUT GIVING OPPORTUNITY TO THE ASSESSING OFFICER IN VIOLATION OF RULE 46A. FIRST OF ALL IT HAS BEEN CLARIFIED THAT NO ADDITIONAL EVIDEN CES WERE SUBMITTED EXCEPT FOR ASSESSMENT ORDERS PASSED BY THE IN COME TAX DEPARTMENT WHICH IS PART OF THE INCOME TAX RECORDS CANN OT BE CONSTRUED AS ADDITIONAL EVIDENCES AND THEREFORE SUCH G ROUND IS 147 DEVOID OF ANY MERITS AND SAME IS DISMISSED. 75. IN THE RESULT THE APPEALS OF THE REVENUE ARE D ISMISSED AND THE APPEALS OF THE ASSESSEE ARE ALLOWED. 76. THIS ORDER CONTAINS ANNEXURE RUNNING INTO 38 PAGES WHICH IS PART OF THE ORDER AS DISCUSSED ABOVE IN PAR A 65 . ABOVE DECISION WAS ANNOUNCED ON CONCLUSION OF VIRTUA L HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 18 TH MARCH 2021. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH MARCH 2021 PKK: