DCIT CIR 1(4) , MUMBAI vs. ANANDILAL & GANESH PODAR SOCIETY, MUMBAI

3 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns O R D E R PER S. RIFAUR RAHMAN (AM)

1. These appeals are filed by the revenue against the different orders of Learned Commissioner of Income Tax (Appeals)-47, Mumbai [hereinafter in short “Ld.CIT(A)”] in the case of Anandilal & Ganesh Podar Society and its group concerns passed on dated 18.11.2019 for the A.Y. 2011-12 and order dated 11.08.2021 for the A.Ys. 2012-13, 2013-14 and 2016-17 to 2018-19. Order of the Ld.CIT(A) was passed on 23.07.2021 for the A.Ys. 2014-15 and 2015-16.

2. Since the issues raised in all these appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed off by this consolidated order.

3. The Ld. CIT DR made arguments only in the case of revenue’s appeal in for A.Y. 2014-15 in the case of Lakeside Properties Pvt Ltd and stated that the same arguments would hold good for the appeals in the case of Anandilal & Ganesh Podar Society, Amazing Suppliers Pvt Ltd and Aansal Securities Pvt Ltd. The arguments of the Ld. CIT DR made in the case of Lakeside Properties Pvt Ltd had been dealt with separately at later part of this order.

1. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer erred in initiating proceedings u/s. 147 by issue of notice w/s. 148 dated 26.03.2018, which is illegal, bad in law and otherwise void for want of jurisdiction.

2. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer failed to appreciate that there was no tangible, relevant, specific and reliable material on record on the basis of which, it could be held that there was any reason to believe with the Ld. Assessing Officer that income of the appellant had escaped assessment and, in view thereof, the proceedings initiated u/s 147 were illegal, untenable and therefore unsustainable.

3. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer erred in not providing the relevant information, documents, statements etc, as requested by the appellant vide letters dated 26.11.2018 and 30.11.2018, thereby rendering proceedings initiated u/s. 147 as illegal. untenable and therefore unsustainable. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer failed to apply his mind to the alleged information received by him from the Investigation Wing and has merely issued a reopening notice on the basis of such information, which is verbatim reproduced in the reasons recorded. This is clearly in breach of the settled position of law that reopening notice has to be issued by the Assessing Officer on his own satisfaction and not on borrowed satisfaction.

5. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer failed to appreciate that approval granted u/s. 151(1) of the Act was a mechanical approval and hence initiation of proceedings u/s 147 was illegal and invalid.

6. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer erred in initiating proceedings u/s. 147 since the reasons recorded do not specify the quantum of tax which has escaped assessment butmerely state the same to be "one lakh rupees or more".

7. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer erred both in law and on facts in overlooking the documentary evidence placed on record as per 5 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns letter dated 24.12.2018 to establish that the donations made were genuine in nature and were made to genuine trusts.

8. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer erred in passing the impugned order, without granting sufficient and proper opportunity to the assessee, contrary to principles of natural justice, thus vitiating the impugned order.

9. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer erred in not providing the copies of statements of Shri Kiritkumar Dharsibhai Suba, Shri Navin Nisar and Shri Naresh Kumar Sodhani recorded u/s, 131 and thereby, prevented the appellant to cross examine these third parties. In any event, Shri Kiritkumar Dharsibhai Suba has retracted the statements dated 11.01.2018 and 12.01.2018 obtained by Investigation Wing through affidavit dated 03.04.2018.

10. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer erred in making addition of Rs 1,65,00,000/- in respect of donations to Karnala Charitable Trust, without issuing any show cause notice for the proposed addition and further, failing to discuss the same in the assessment order, when the same was not even appearing in the reasons recorded u/s. 147.

11. On the facts and the circumstances of the appellant's case and in law, the Ld. Assessing Officer erred in making addition of Rs. 10,40,00,000/- on account of donations made to various Trusts, and in holding that the same were applied for purposes other than the objects of the trust, without bringing on record any corroborative material to support the allegation of receipt of cashback from donee trusts.

12. The appellant craves leave to alter, amend, modify or substitute any ground or grounds and to add any new ground/(s) as may be necessary.”

5. The brief facts of the case are that the assessee is a public charitable trust hitherto enjoying exemption u/s. 10(23C)(vi) of the Act. The original return of income for the A.Y. 2011-12 was filed by the assessee trust on 30.09.2011 declaring total income of ₹.Nil after claiming exemption of ₹.9,17,58,815/- u/s 10(23C)(vi) of the Act. This 6 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns return was duly processed u/s 143(1) of the Act accepting the returned income. There was a search and seizure action u/s. 132 of the Act in the case of the Podar Education Group on 09.01.2018 wherein the assessee was also covered. A survey action under section 133A was also carried out on associated entities/individuals on the same date and subsequent dates. Later this assessment was reopened u/s 147 of the Act vide issuance of notice u/s 148 of the Act dated 26.03.2018. The return in response to notice u/s 148 of the Act was filed by the assessee on 22.11.2018 declaring total income of ₹.Nil after claiming exemption of ₹.9,17,58,815/- u/s 10(23C)(vi) of the Act. The main allegation against the Podar Group is that donations made to the extent of ₹.96.90 crores to various entities are bogus in nature in as much as that the donations have found their way back to the coffers of the Trust in the form of cash. The Assessing Officer has treated the donations as bogus primarily on the basis of statements recorded u/s 131 of the Act during the course of survey proceedings u/s 133A of the Act from Shri Kirit kumar D Suba and Shri N K Sodhani who stated that the donations were returned back to the Group in cash, which though were subsequently retracted by them. The Assessing Officer has completed the assessment by treating the donations as bogus denying exemption u/s 10(23C)(vi) of the Act. After considering the submissions made by the assessee, the Ld. CIT(A) has accorded relief stating that there is no conclusive or corroborative material on record of the Assessing Officer to hold that the donations have been returned back by those institutions in cash in exchange for commission. Aggrieved, the revenue is in appeal before us.

7 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 6. We find that the assessee trust had given donations to the following trusts during the year under consideration: - Dr D.Y. Patil International Academy - Rs 70,00,000 Ramrao Adik Education Society - Rs 7,30,00,000 Kshetropasna - Rs 10,00,000 Disha Education Society - Rs 65,00,000 Karnala Charitable Trust - Rs 1,65,00,000 TOTAL Rs 10,40,00,000

8 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 4.0 The Appellant trusts had also filed several additional evidences, like retraction affidavits, confirmations, exemption certificates etc., which needs to be examined and verified at your end and a report on the same needs to be furnished. 5.0 During the course of the appellate proceedings, the Appellant Trust had also contended that no incriminating material had been found during the course of the search operation, regarding siphoning off of the Trust Funds. In this regard, you are directed to provide copies of the relevant incriminating material, if any, found during the course of the search operation regarding the additions made in the assessment order. 6.0 Before the said additional evidences are admitted and considered, while deciding the above mentioned appeals, you are hereby given an opportunity in terms of Rule 46A(3) to examine the said evidence/documents and furnish a remand report in the matter. For this purpose, you may make such further enquiries as you deem fit including examination of the parties concerned, after giving the appellant reasonable opportunity of being heard. You may also produce any evidence/document in rebuttal of the additional evidence/written submission made by the appellant. 7.0 Your remand report in the matter should reach this office through the Addl. CIT, Range- 1, Mumbai, latest by 18.06.2019.

(RAJESHWAR YADAV) Commissioner of Income Tax (A)-47 Mumbai. Encl: as above. Copy to:

1. 1. The Pr. Commissioner of Income Tax (Central)-1, Mumbai - for kind information.

2. The Addl. Commissioner of Income Tax, Central Range- I, Mumbai for information and to ensure timely submission of the reply by the AO.

3. To the Appellant for information and necessary compliance. Commissioner of Income Tax (A)-47 Mumbai."

8. The remand report was sent by the Assessing Officer through the Ld. Additional CIT vide letter dated 07.11.2019, which is reproduced as under: - 9 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns “To The Commissioner of Income-tax (Appeals) - 47 Mumbai (Through proper channel) Sir, Sub: Appellate Proceedings in the case of M/s Anandilal & Ganesh Podar Society, Podar Education Trust, Hemadari Machine Tools Pvt. Ltd. for Assessment Year 2011-12 and Goodluck apparels Pvt. Ltd for Assessment Year 21011-12 and 2012-13-reg. Ref: (1) No. CIT(A)-47/Rem.Rep. /2018-19 dated 31-05-2019 (2) No CIT(A)/Rem. Report/ 2019-20 dated 02.08.2019 (3) This office letter No. DCIT-CC-1(4) Remand Report Podar/2019-20 dated 14/09/2019 (4) No. CIT(A)-47/ Rem. Rep./ 2018-19 dated 17-10-2019 in the case of M/s Anandilal & Ganesh Poddar Society & Poddar Education Trust (5) This office letter No. DCIT-CC-1 (4) Remand Report Podar/2019-20 dated 18/10/2019 (6) Addl. CIT, CR-1/ Remand Report / 2019-20 Dated 25.10.2019 (7) Pr. CIT(C)-1/ Remand Report / 2019-20 dated 25.09.2019 * * * Vide above referred letter at sr no 1, the undersigned has been directed to provide an opportunity to appellants for cross examination of several persons, examination and verification of several additional evidences like retraction affidavits, certificate etc., providing copy of incriminating materials found during the search operation etc. This report is with respect to M/s Anandilal & Ganesh Podar Society for AY 2011-12. Remand reports are being sent separately for other cases. 2. As regards the admissibility of additional evidence under rule 46A, additional evidence under rule 46A cannot admitted except in the following circumstances: - (i) Where the assessing officer has refused to admit evidence which ought to have been admitted; or (ii) Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produced by the Assessing Officer; or 10 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns iii) Where appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal

; or (iv) Where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. Assessee's case does not fall in any of the above categories. Therefore additional evidences may not be admitted.

3. Without prejudice to the above, it is humbly submitted that: 3.1. With regard to additional evidence submitted for first time during appellate proceedings to substantiate genuineness in respect of Donation given by the assessee, following comments are offered: Summary of additional evidences submitted during applellate proceeding is as under: Particular Additional evidences submitted Shri Kirit Kumar Suba Affidavit of Shri Kirit Kumar Suba dated 06.09.2018 Shri Navin Nishar Affidavit of Shri Navin Nishar dated 04.06.2018 Shri Naresh Sodhani Affidavit of Shri Naresh Sodhani dated 30.08.2018 (i) Ramrao Adik Confirmation letter from Donee (i) Ramrao Adik Education Society (ii) Education Society (ii) Disha Education Society and Kshetropasana (iii) (iv) Kamala Charitable Trust (v) Dr.D.Y.Patil Disha Education International Academy confirming that they have Society and iv) Karnala received donation from Anandilal and Ganesh Podar Charitable Trust (v) Dr. Society along with Exemption certificate. D.Y.Patil International Academy a. Retraction affidavit of Shri. Kirit Kumar Suba was not filed during the course of reassessment proceedings in the case of Anandilal and Ganesh Podar Society. However, retraction with similar contents filed before your honour was filed in the case of M/s. Hemandri Machine Tools Pvt. Ltd. for A.Y.2011-12 and M/s. Goodluck Apparels Pvt. Ltd. for A.Y.2011-12 and A.Y. 2012-13. It is to be noted that Ld. AO has dealt with similar retraction filed by Mr. Kirit Subba in his assessment order. In his order, Ld. Assessing Officer has rebutted the retraction affidavit filed by Shri Kirit Kumar Suba on 03-04-2018 in detail. AO has observed that time lapse of 81 days evidently exhibit that it is only a well- planned afterthought meant for damage control mechanism. Now, the retraction affidavit of Shri Kirit Subba filed before your honour is made on 06-09-2018 i.e. after a time lapse of 8 months from search. This retraction affidavit was not filed before Ld. AO for the reasons best known to Assessee.

11 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns b. Retraction Affidavit of Shri Navin Nishar dated 04.06.2018 is not acceptable as it was made after a time lapse of 5 months. This retraction affidavit was not filed before Ld. AO for reasons best known to Assessee. It is to be noted that Ld. AO has dealt with similar retraction filed by Mr. Kirit Subba in his assessment order. In his order, Ld. Assessing Officer has rebutted the retraction affidavit filed by Shri Kirit Kumar Suba on 03-04-2018 in detail. AO has observed that time lapse of 81 days evidently exhibit that it is only a well- planned afterthought meant for damage control mechanism. c. Retraction Affidavit of Shri Naresh Sodhani dated 30.08.2018 is not acceptable as it was made after a time lapse of 8 months. This retraction affidavit was not filed before Ld. AO for reasons best known to Assessee. It is to be noted that Ld. AO has dealt with similar retraction filed by Mr. Kirit Subba in his assessment order. In his order, Ld. Assessing Officer has rebutted the retraction affidavit filed by Shri Kirit Kumar Suba on 03-04-2018 in detail. AO has observed that time lapse of 81 days evidently exhibit that it is only a well-planned afterthought meant for damage control mechanism. d. The assessee has only submitted confirmation of account along with exemption certificate in appellate proceedings. No other relevant documents havel been submitted. 3.2 The replies to notice u/s 133(6) of the IT Act made during remand proceedings were perused. It is seen that in case of (i) Disha Education Society (ii) Ramrao Adhik Education Society (iii) Kshetropasana (iv) Dr. D.Y.Patil International Academy wherein specific details has been asked under notice issued u/s 133(6) at point no.vi i.e bank statement highlighting amount of transaction made during F.Y.2010-11 with the Assessee but these parties have submitted only relevant page of bank statement highlighting such transaction. Further, in case of Karnala Charitable Trust, only confirmation vide an email was received along with the donation receipt. 4 As directed by your good self, in the interest of natural justice, opportunity of cross examination of witnesses i.e. Mr. Kirit Subba, Mr. Navin Nishar and Mr. N.K. Sodhani was provided to Mr. Ajay G Podar, trustee of Assessee trust. Copy of cross examination statements is enclosed. These cross-examination statements should not be relied upon as it is based on retraction affidavits which are nothing but only a well-planned afterthought.

12 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 5 In regard to incriminating material, evidences were found during the course of search proceedings regarding siphoning off of trust funds, which were confirmed by several persons related to Podar group. For instance, as referred in assessment order at Q.No.19 and Q.No. 20 of Shri Navin Nishar statement, digital evidence found in the mobile of Sh. Navin Nishar iPhone 6s mobile no MKQQ2HN/A, Sr. no F17PGHQGRYD and IMEI 355772079786427 have been referred to, which was explained by Mr. Navin Nishar as the cash transaction between the Angadia of Sh. Shirish Shah and Angadiya of Podar in the statement recorded during the course of search proceedings. The entire modus operandi to get accommodation entries employed by the Assessee has been vividly elaborated by Shri Kiritkumar Suba, Shri Navin Nishar and Shri N. K. Sodhani in their statements. 6 In view of the above, findings of Ld. Assessing officer in re- assessment proceeding, statements of various persons such as Shri Kiritkumar Suba, Shri Navin Nishar, Shri N. K. Sodhani etc. along with evidences found during search may kindly be relied upon. 7 It is humbly submitted that during block assessment proceedings, various enquiries are being done with respect to several trusts to whom Donation have been given and share premium received by Podar Group companies. Replies have been received in some cases and pending in many other cases. These details along with evidences collected during search, statements taken etc. are being verified. Also future course of action such as further examination of witnesses, key persons et will depend on result of findings during block assessment proceedings Yours faithfully, (Praveen Shekhar) Dy. Commissioner of Income Tax Central Circle-1(4) Mumbai”

9. The Assessing Officer also enclosed the statements recorded in the process of cross examination of Mr Kirit Kumar Suba, Mr.N.K.Sodhani and Mr Nivan Nishar by Mr AJaykumar G Poddar on 05.11.2019 and 06.11.2019. In the said cross examination statements, all the persons reiterated what had been stated in their respective retraction affidavits. The copy of the remand report was furnished by 13 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns the Ld. CIT(A) to the assessee for seeking its comments. The assessee filed rejoinder to the remand report before the Ld.CIT(A). The Ld.CIT(A) after considering the remand report of the Assessing Officer and rejoinder of the assessee concluded that the additional evidences filed by the assessee are to be admitted and taken on record as they are required for the purpose of adjudication of the appeal. It is pertinent to note that against the admission of the additional evidences by the Ld.CIT(A), the revenue is not in appeal before us. We find that the revenue’s grounds only contest the merits of the addition deleted by the Ld. CIT(A). We find that on merits, the Ld.CIT(A) deleted the disallowance of donation u/s 10(23C)(vi) of the Act in the sum of ₹.10.40 crores by observing as under:-

“15.18 Now, coming to the merits of the case, I have carefully considered the findings of the A.O. in the assessment order, the submissions of the Appellant Trust and also perused the materials available on record on these grounds of appeal. The AO has made addition u/s. 2(24) r.w.s. 10(23C) of the Act on account of donations made by the Appellant Trust, on the basis of statements of Shri Kirit Kumar Suba and Shri Navin Nishar dated 11.01.2018 and that of Shri Naresh Kumar Sodhani dated 12.01.2018, which were recorded u/s. 131 of the Act. I have noted that these confessional statements have subsequently been retracted by Shri Kirit Kumar Suba, Shri Navin Nishar and Shri Naresh Kumar Sodhani through retraction affidavits dated 06.09.2018, 04.06.2018 and 30.08.2018, respectively. 15.19 It may be noted that these retraction affidavits though were not specifically filed in the case of the Appellant Trust, but were part of the assessment record of the Podar Group of companies, namely M/s. Hemadri Machine Tools Pvt. Ltd. for A.Y. 2011-12 and M/s. Goodluck Apparels Pvt. Ltd. for A.Y.2011-12 & A.Y. 2012-13. In the retraction affidavits, copies of which were filed as additional evidence during the course of the appellate proceedings and also before the AO during the Remand Proceedings, it had been averred that the statements were obtained under un-due influence, severe pressure, stress and coercion. 15.20 In the Remand Report, the AO had merely dismissed the said affidavits, as an afterthought meant for damage control mechanism. Further, the AO had stated that there was delay in filing of the retraction affidavits, which were filed after a delay of 81 days in the case of Shri Kirit Kumar Suba, 5 months in the case of Shri Navin Nishar and 8 months in the case of Shri Naresh Kumar Sodhani. I am constrained to note that the retraction affidavits had been brushed aside by the AO in the assessment order without carrying out any independent 14 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns enquiry of his own and without examining the concerned deponents. Accordingly, the AO was directed to carry out necessary enquiries and investigations and was also directed provide an opportunity to the Appellant for cross-examination of these third parties, whose statements had been relied upon in the assessment order. 15.21 I have taken note of the fact that the Appellant had filed the details of the manner in which the Remand Proceedings were carried out by the AO in the present case. In this regard, letters had been placed on record by the Appellant of Shri Kirit Kumar Suba, Shri Navin Nishar and Shri Naresh Kumar Sodhani dated 27.09.2019 relating to the Remand Proceedings conducted by the AO. Since, these letter are noteworthy, one of the said letter is reproduced hereunder, as the contents of all the other letters are similar:- Dated: 27.09.2019 To The Dy. Commissioner of Income Tax, Central Circle 1(4), Mumbai. Ref.: No. DCCC 1(4)/Summon/s 131/2019-20 Sub: Summons to assessee/witness u/s. 131 of the Income Tax Act, 1961. Please refer to the above.

2. In response to above summons dated 24.09.2019, I have presented myself before your honour's office today at 11 a.m.

3. It is submitted to your goodself that earlier also your office had summoned me u/s 131, as per summons dated 07.06.2019, requiring my personal attendance on 13.06.2019. I had duly attended your honours office on 13.06.2019. I had waited the entire day, however no enquiry was made with respect to the summons. I had also attended your office many times thereafter to make compliance with the summons. No enquiry was however made.

4. I submit that I had sworn an affidavit dated 06.09.2018 in relation to my statement recorded u/s. 131 on 12.01.2018. A copy of the same is enclosed for your honour's records.

5. After receipt of summons dated 24.09.2019, I have again sworn an affidavit dated 26.09.2019 duly notarised in which I have clarified my statement recorded u/s.131 on 12.01.2018. A copy of the same is also enclosed for your honour's records. Kindly acknowledge receipt. Thanking you, Yours faithfully, Kirit Suba Encl: As above. 15.22 I have noted that the AO had issued summons u/s 131 of the Act to Shri Kirit Kumar Suba, Shri Navin Nishar and Shri Naresh Kumar Sodhani on 07.06.2019 for appearance on 13.06.2019 for the first time. All the three witnesses presented themselves before the AO on the appointed date and were present for the entire day, but the AO failed to provide cross- examination to the Appellant Trust. The second set of summons were issued to these three witnesses on 24.09.2019 for appearance on 27.09.2019. However, this time also 15 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns no cross-examination was provided to the Appellant of the said witnesses, though all the three witnesses presented themselves before the AO. It may be pertinent to mention here that on both the occasions, Shri Ajay Kumar Podar was duly present for carrying out the cross-examination of the witnesses on behalf of the Appellant Trust. Finally, the cross-examination of the witnesses was provided to the Appellant Trust on 05.11.2019 by the AO. 15.23 I have noted that Shri Kirit Kumar Suba, Shri Navin Nishar and Shri Naresh Kumar Sodhani had filed the retraction affidavits dated 06.09.2018, 04.06.2018 and 30.08.2018 duly signed before the Executive Magistrate/ Notary Public before the AO. Also, notarized retraction affidavits dated 26.09.2019, 27.09.2019 & 27.09.2019 were again filed by Shri Kirit Kumar Suba, Shri Navin Nishar and Shri Naresh Kumar Sodhani, respectively before the AO. However, the AO failed to investigate and enquire the said retraction affidavits, during the course of the Remand Proceedings. 15.24 Further, all the three witnesses have retracted from their original statement, during the course of the statements recorded during the course of the cross-examination by the Appellant Trust. Since, the retraction statements of all the witnesses is similar, the relevant portion of the retracted statement of Shri Kirit Kumar Suba is reproduced hereunder, for ready reference:- "Q. No. 5 As per your statements recorded u/s 131 of the Income Tax Income Tax Act, 1961, dated 11.01.2018 and 12.01.2018 you have stated about various transaction undertaken by the Podar Group, which are being used by the Income Tax department in determining the taxable income of various assesses of the group. Please provide your comments on the same Ans: With relation to the statements given u/s 131 dated 11.01.2018 and 12.01.2018 I would like to state that the same have retracted by me before Executive Magistrate, Mumbai on 06th September 2018 wherein I have clearly mentioned in Para 7 that answers to Q No 13 to 27 of the statements recorded on 11.01.2018 and answers to Q, No 28 to 40 of the statements recorded on 12.01.2018 should not be relied upon as the same were taken under coercion, threat, indictment and undue influence. 15.25 I am constrained to note that though there was a clear cut retraction in the statement recorded during the course of the cross-examination of all the 3 witnesses, however, the AO had failed to re-examine the witnesses on this critical issue. 15.26 It may be noted that once a witness has given their evidence-in-chief and is also cross-examined by the other side, the Revenue shall re-examine their witness, specifically in a case where there is a substantial deviation from the stated position in the evidence-in-chief. In this case, there is a complete about- turn by all the three witnesses during the course of cross- examination, but the AO failed to re-examine them. The purpose of re- examination is to give the witness an opportunity to explain any new matters raised during the cross- examination. Re-examination is absolutely necessary, where during the cross- examination the witness' testimony is totally muddled and confused. The opportunity to re-examine is a must, if during the cross-examination inconsistencies appears between a witness' testimony and a prior statement. The AO should have re-examined the witnesses and highlighted the flaws and/or 16 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns inconsistencies or alternatively correct anything during the cross-examination, which potentially could damage the case of the Revenue. In nutshell, the AO had just forwarded the retracted statements of the three witnesses in the Remand Report, without making any further enquiries or investigations. 15.27 A carefully perusal of the Appellant's submission filed during the course of the assessment proceedings before the AO on 24.12.2018 reveals that the Appellant had filed the following details / evidence in support of the genuineness of the donations made to the other trusts by the Appellant: - i. Form No. 108 and 10BB for the year ended 31.03.2011 (Pg. nos. 101 to 110 of PB) ii. Copy of Certificate u/s. 12A of the Act dated 27.07.2001 (Pg. no.111) iii. Address of the Registered Office and branches of the Trust (Pg. no. 112) iv. Details of the bank accounts held by the Trust (Pg. Nos. 113 to 119) with relevant particulars, such as Bank Account No., complete address etc.. v. Details of trusts/societies to whom donations have been given during the A.Y. 2011-12 (Pg. No. 120) with particulars such as PAN, complete address, amount, date of instrument, date of clearance, payment mode and cheque/DD No. vi. Copy of request from the Donne namely, M/s Disha Education Society appealing for donation towards corpus funds, exemption certificate u/s. 80G of the Act, Resolution passed in the meeting of the trustees to grant donation of Rs. 65,00,000/- to M/s Disha Education Society, Letter issued by Appellant to accept the appeal for donation, Receipt of donation issued by donee Trust, Bank statement of Appellant highlighting the donation of Rs. 65,00,000/- to M/s Disha Education Society etc.. (Pg. Nos. 121 to 127 of PB). vii. Copy of the request from the Donee, namely M/s D.Y. Patil International Academy appealing for the donation towards corpus funds, copy of PAN card, exemption certificate u/s. 80G of the Act, resolution passed in the meeting of the Trustees to grant donation of Rs. 70,00,000/- to M/s D.Y. Patil International Academy, Letter issued by the Appellant to accept the appeal for donation, Receipt of donation issued by donee trust, bank statement of the Appellant highlighting donation of Rs. 70,00,000/- to M/s D.Y. Patil International Academy (Page Nos. 128 to 134 of PB) viii. Copy of the request from the Donee, M/s Kshetropasna appealing for the donation towards the corpus funds, Exemption Certificate u/s. 80G of the Act, resolution passed in the meeting of the trustees to grant donation of Rs. 10,00,000/- to M/s Kshetropasna, Letter issued by the Appellant to accept the appeal for donation, Receipt of donation issued by the donee trust, bank statement of Appellant highlighting the donation of Rs. 10,00,000/- made to M/s Kshetropasna (Page Nos. 135 to 141 of PB)

17 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns ix. Copy of request from the Donee, M/s Ramrao Adik Education Society appealing for the donation towards corpus funds, copy of PAN card, Exemption Certificate u/s. 80G of the Act, Resolution passed in the meeting of the trustees to grant donation of Rs. 7,30,00,000/- to M/s Ramrao Adik Education Society, Letter issued by the Appellant to accept the appeal for donation, Receipt of donation issued by donee trust, Bank statement of the Appellant highlighting donation of Rs. 7,30,00,000/- made to M/s Ramrao Adik Education Society (Page Nos. 142 to 185 of PB) 15.28 Thus, the Appellant had during the course of assessment proceedings furnished the complete details and relevant documentation, as mentioned above to establish that the donations made by the Appellant Trust were genuine and also the same were given to genuine Trusts. A perusal of the assessment order reveals that the AO has failed to rebut the documentary evidences filed by the Appellant either during the course of assessment proceedings or the remand proceedings. 15.29 It is humbly submitted that where the transactions are duly supported and evidenced by documentary evidences, the same could not be treated as bogus simply on the basis of the report of the Investigation Wing or the statements of third parties. In support of the aforesaid, reliance is placed on the following judgments:- (i) Baijnath Agarwal v. ACIT (2010) 40 SOT 475 (Agra) (ii) ITO v. Bibi Rani Bansal (2011) 44 SOT 500 (Agra) (iii) ITO v. Ashok Kumar Banssal ITA No. 289/Agra /2009 (Agra ITAT) (iv) ACIT v. Amit Agarwal & Others ITA Nos. 247(Kol) of 2011 (Kol ITAT) (v) Rita Devi & Others v. Dy. CIT IT (SS) A Nos. 22-26/Kol/2011 (Kol ITAT) (vi) Surya Prakash Toshniwal v. ITO ITA No. 1213/Kol/2016 (Kol ITAT) (vii) Sunita Jain v. ITO-ITA No. 201 & 502/Ahd/2016 (Ahmedabad ITAT) (viii) Ms. Farrah Marker v. ITO ITA No. 3801/Mum/2011 (Mumbai ITAT) (ix) Anil Nandkishore Goyal v. ACIT ITA Nos. 1256/PN/2012 (Pune ITAT) (x) CIT v. Sudeep Goenka (2014) 360 ITR 163 (Allahabad) (xi) CIT v. Udit Narain Agarwal (2013) 255 CTR 102 (Allahabad) (xii) CIT v. Janmadevi Agarwal (2010) 328 ITR 656 (Bombay HC) (xiii) CIT v. Homani M. Vakil in (Tax Appeal No. 1502 of 2011, dt. 259-2012) (xiv) CIT v. Maheshchandra G. Vakil in (Tax Appeal No. 1503 of 2011, dt. 25-9-2012) (xv) CIT v. Sumitra Devi (2014) 268 CTR 351 (Rajasthan)

18 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns (xvi) Ganeshmull Bijay Singh Baid HUF v. Dy. CIT ITA Nos. 544/Kol/2013 (Kolkata ITAT) (xvii) Meena Devi Gupta & Others v. ACIT -ITA Nos. 4512 & 4513/Ahd/2007 (Ahmedabad ITAT) 15.30 As regards the issue of siphoning of funds by the Appellant through other Trusts is concerned, I have noted that a specific direction was given to the AO to examine and investigate the confirmations and exemption certificates of the other trusts and then submit a report on the same. A perusal of the Para 3.2 of the Remand Report of the AO dated 6.11.2019 on this issue reveals that no objection had been taken by the AO on the same. In the Remand Report, the AO had only made a general observation that the entire bank statement of the donee trusts is not on record. I have also taken note of the fact that the AO had issued notices u/s 133(6) of the Act to the following five donee trusts:-  Disha Education Society  Ramrao Adhik Education Society  Kshetropasana  Dr D.Y.Patil International Academy  Karnala Charitable Trust 15.31 In response to the notices issued u/s 133(6) of the Act, the AO had received replies from all the above noted donee trusts and the AO had not been able to find any shortcomings on the documentation submitted by them. Further, the AO had also failed to bring on record that the Exemption Certificates of any of the above mentioned donee trusts had been cancelled, as a result of the allegation of the siphoning of the funds by them. Thus, there is no adverse finding by the AO on the issue of alleged siphoning of the funds by the Appellant, through the donee trusts. There is absolutely no evidence placed on record by the AO to show that cash had been withdrawn from the bank accounts of the donee trusts and the same had been routed back to the Podar Group. I have also taken note of the fact that in the Remand Report, the AO had not raised any adverse remark on the Exemption Certificates filed as additional evidences of the following donee trusts:-  Exemption Certificate u/s 80G of the Act of CIT, Raipur of Disha Education Society.  Exemption Certificate u/s 80G of the Act of DIF (Exemption), Mumbai of Ramrao Adhik Education Society.  Exemption Certificate u/s 80G of the Act of DIT (Exemption), Chennai of Kshetropasana.  Order under Rule 11AA of CIT-I, Pune of Dr. D.Y. Patil International Academy.  Exemption Certificate u/s 80G of the Act of CIT-II, Thane of Karnala Charitable Trust 19 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 15:32 To sum up, on the issue of siphoning of funds by the Donee Trusts, there is no adverse observation by the AO in the Remand Report. In the case of DCIT VS Mohan Proteins Ltd, (ITAT New Delhi) in ITA Appeal No. I.T (SS) NO 417/Del/2003, the Hon'ble ITAT Delhi has vide order dated 10/06/2015 held that in the absence of any objection raised by the AO, the CIT(A) had rightly deleted the additions. ….. 15.33 ……… 15.34 The fact of the matter is, the AO has not carried out any further independent investigation or enquiries to establish that the donations made by the Appellant have come back in the form of loan/ share premium / share capital in the companies / other entities controlled by the Podar Group. Thus, the AO had failed to establish the alleged siphoning of funds from the Trusts and hence, no flow of funds had been established in the assessment order. To sum up, no material has been brought on record by the AO to link the impugned donations with the various entities controlled by the Podar Group. In the assessment order, the AO had stated that the cash siphoned off from the Donee Trusts have come back to the Podar Group of Companies, through a maze of shell companies. However, I am constrained to note that the AO failed to even identify such shell companies both during the course of the assessment proceedings and the remand proceedings. 15.35 It is the AO's duty to establish with evidences that the facts stated by the Appellant are not correct, since the law of burden is canonized in common law doctrine "incumbit probatio qui dicit non qui negat", i.e. burden lies upon one who alleges and not upon one who deny the existence of the fact in the instant case, the A.O. did not carry any of his doubts to a logical conclusion by converting them into hard facts on the basis of evidences during the assessment proceedings. I have also taken note of the fact that the AO was given enough time to conduct relevant enquiries and investigation, during the course of assessment / remand proceedings. However, the AO had failed to carry out the relevant enquiries and investigation, during such proceedings. 15.36 …. 15.37. …. 15.38 In fact the additions made by the AO are based only on assumptions, conjectures and surmises. I have noted that this is not a case of sufficiency of adverse material but complete absence of any incriminating material being brought on record by the AO. There is no iota of evidence on record to substantiate the modus-operandi that the alleged donations made to the five donees have been withdrawn by the donees in cash and returned back to the Appellant, after retaining a percentage commission. The AO had assumed that the donations had been siphoned off and were introduced in the form of loans / share application/ share premium / share capital by the Appellant in the entities controlled by the Podar Group through a maze of layering. I am of the considered view that unless specific evidence is brought on record to controvert the validity and the correctness of the documentary evidence produced by the Appellant, the liability on the Appellant can't be fastened based on assumptions and presumptions. 15.39. … 20 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 15.40 … 15.41 … 15.42 … 15.43 … 15.44 … 15.45 I have taken note of the fact that all the statements relied upon by the AO in the assessment order were recorded u/s 131 of the Act during the course of the survey operation u/s 133A of the Act. The material on record clearly shows that the statement of Shri Naresh Kumar Sodhani had been recorded on 12.01.2018, during the course of the survey proceedings carried out u/s 133A of the Act at 245-246, Vardhman Sunrise Plaza, Vasundhra Enclave, New Delhi- 110096. Further, the statement of Shri Navin Nishar had been recorded on 11.01.2018 & 12.01.2018, during the course of the survey proceedings carried out u/s 133A of the Act in the case of M/s Suba & Company at 102, Olive Apartment, Devidas Lane Corner, Link Road, Borivali (West), Mumbai-400103. Also, the statement of Shri Kirit Kumar Suba had been recorded on 11.01.2018 & 12.01.2018, during the course of the survey proceedings carried out u/s 133A of the Act in the case of M/s Suba & Company at 102, Olive Apartment, Devidas Lane Corner, Link Road, Borivali (West), Mumbai-400103. 15.46 To sum up, the statements of all the three witnesses relied upon by the AO in the assessment order were recorded during the course of survey Operation carried out at the place of the third parties. It has been held by the Hon'ble High Court of Kerala in the case of Paul Mathews & Sons vs CIT (2003) 263 ITR 101 that a statement recorded u/s 133A of the Act does not have evidentiary value and the AO is not authorised to administer oath and record a sworn statement u/s 133A of the Act. The statements recorded u/s 133A of the Act are not conclusive pieces of evidence in themselves. The relevant extract of the said judgment is reproduced below:- "…Section 133A(3)(iii) enables the authority to record the statement of any person which may be useful for, or relevant to, any proceeding under the Act. Section 133A, however, enables the income-tax authority only to record any statement of any person which may be useful, but does not authorise taking any sworn statement. On the other hand, we find that such a power to examine a person on oath is specifically conferred on the authorised officer only under section 132 (4) of the Income-tax Act in the course of any search or seizure. Thus, the Income-tax Act, whenever it thought fit and necessary to confer such power to examine a person on oath, the same has been expressly provided whereas 'section 133A does not empower any Income-tax Officer to examine any person on oath. Thus, in contradistinction to the power under section 133A, section 132(4) of the Income-tax Act enables the authorised officer, to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under section 133A of the Income-tax Act it is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law. Therefore, 21 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns there is much force in the argument of learned counsel for the appellant that the statement elicited during the survey operation has no evidentiary value and the Income-tax Officer was well aware of this" 15.47 Similarly, when the issue, whether the expression "such other materials or information as are available with the Assessing Officer in section 158BB of the Income-tax Act, 1961, would include the materials gathered during the survey operation under section 133A, came up for consideration before this court in CIT v. G. K. Senniappan [2006] 284 ITR 220, a Division Bench of this court, in which one of us was a party (P.P.S. Janarthana Raja J.), answered the question in the affirmative, against the Revenue and in favour of the assessee, holding that the materials collected during the survey under section 133A cannot be taken into consideration while determining the undisclosed income in respect of block assessment as per section 158BB, as the same has no evidentiary value. 15.48 Again, when an identical question whether the material found in the course of survey in the premises of the builder could be used in the block assessment of the assessee, came up for consideration before this Division Bench in an unreported case in T. C (A) No. 2620 of 2006, this court, by order dated November 22, 2006-since reported in CIT v. S. Ajit Kumar [2008] 300 ITR 152, of course, following the, earlier decision of this court in G.K. Senniappan's case reported in [2006] 284 ITR 220, while confirming the order of the Tribunal, answered the question in favour of the assessee, in limine. 15.49 In the case of Commissioner of Income-tax Vs. S. Khader Khan Son [2008] 300 ITR 157 (Madras), it had been held that an admission is extremely an important piece of evidence but it cannot be said that it is conclusive; and it is open to the person who made the admission to show that it is incorrect. The word 'may' used in section 133A(3)(iii), viz., 'record the statement of any person which may be useful for, or relevant to, any proceeding under this Act', makes it clear that the materials collected and the statement recorded during the survey under section 133A are not conclusive piece of evidence by themselves. The statement obtained under section 133A of the Act would not automatically bind upon the assessee. 15.50 The Hon'ble Madras High Court had further held that the Section 133A of the Act does not empower any ITO to examine any person on oath. In contradistinction to the power under section 133A, section 132(4) enables the authorized officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income- tax Act. On the other hand, whatever statement is recorded under section 133A had not been given any evidentiary value. The statement obtained under section 133A of the Act would not automatically bind an assessee. Therefore, admission made during such statement cannot be made the basis of any admission. The relevant conclusive part of the said judgment of S. Khader Khan Son referred supra is reproduced, hereunder:- "From the foregoing discussion, the following principles can be culled out: (i) An admission is an extremely important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect and that the assessee should be given a proper opportunity to show that the books of account do not correctly disclose the correct state of facts, vide decision of the 22 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns apex court in Pulkngode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18; (ii) In contradistinction to the power under section 133A, section 132(4) of the Income-tax Act enables the authorised officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under section 133A of the Income-tax Act is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law, vide Paul Mathews and Sons v. CIT [2003] 263 ITR 101 (Ker.); (iii) The expression "such other materials or Information as are available with the Assessing Officer" contained in section 158BB of the Income-tax Act, 1961, would include the materials gathered during the survey operation under section 133A, vide CIT v. G. K. Senniappan [2006] 284 ITR 220 (Mad.); (iv) The material or information found in the course of survey proceeding could not be a basis for making any addition in the block assessment, vide decision of this court in T. C (A) No. 2620 of 2006 (between CIT v. S. Ajit Kumar [2008] 300 ITR 152 (Mad.); (v) Finally, the word "may" used in section 133A(3)(iii) of the Act, viz., "record the statement of any person which may be useful for, or relevant to, any proceeding under this Act", as already extracted above, makes it clear that the materials collected and the statement recorded during the survey under section 133A are not conclusive piece of evidence by itself. For all these reasons, particularly, when the Commissioner and the Tribunal followed the circular of the Central Board of Direct Taxes dated March 10, 2003, extracted above, for arriving at the conclusion that the materials collected and the statement, obtained under section 133A would not automatically bind upon the assesses we do not see any reason to interfere with the order of the Tribunal." 15.51 It is pertinent to mention here that the Hon'ble Supreme Court had affirmed the above judgment in The Commissioner Of Income Tax vs M/s. S. Khader Khan Son reported in (2012) 25 taxmann.com 413 (Supreme Court) 15.52. …. 15.53 It is also pertinent to note that the stand of Shri Naresh Kumar Sodhani, Shri Navin & Shri Kirit Kumar Suba had been vacillating during the course of Income-Tax proceedings and hence, there is little evidentiary value of their statements. The testimony of such witnesses, who give contradictory statements on the same set of facts and issues can't be accepted on face value and such witnesses can't be held to be trustworthy. In the Examination in Chief, the Revenue recorded their statements and they gave a statement in favour of the Revenue. On the other hand, during cross-examination, the Appellant had questioned these witnesses and the same witnesses in the presence of the AO had given a statement in favour of the Appellant.

23 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 15.54 Reference in this connection is craved to the judgment of the Hon'ble Kolkata High Court in the case of CIT Vs. Eastern Commercial Enterprises (1994) 210 ITR 103 wherein under similar circumstances, the Hon'ble High Court held that no reliance can be placed on the testimony of a person indulging in double speaking and taking contradictory stands on different occasions and that such conduct neutralizes his value as a witness. 15.55 … 15.56 … 15.57 In the instant case, the AO has been guided solely by the report of the Investigation Wing, as is evident from the perusal of the reasons recorded by the AO and the re-assessment order. The AO had failed to carry out relevant investigation to take the case to it's logical conclusion, despite being given another opportunity in Remand Proceedings. In other words, there is no evidence on record to prove that the transactions entered into by the Appellant Trust are collusive transactions. In fact nothing has been brought on record against the Appellant to establish that the donations made by it are not genuine. Additions made on the basis of statement alone will not suffice without supportive, independent evidence; they have no probative value in the absence of corroborative evidence. 15.58 It is pertinent to note that no addition can be made merely on the statement recorded during the course of the search operation. There must be independent corroborative evidence or material to prove that income is chargeable to tax. 15.59 In the case of Kailashben Manharlal Chokshi Vs. Commissioner of Income- tax [2008] 174 Taxman 466 (Gujarat), it was held that merely on the basis of admission, the assessee could not have been subjected to such additions, unless and until some corroborative evidence was found in support of such admission. The relevant excerpts of the said judgment are reproduced hereunder: "26. In view of what has been stated hereinabove we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under section 132(4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been led by the Revenue authority. We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such admission. We are also of the view that from the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence there is no reason not to disbelieve the retraction made by the Assessing Officer and explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs. 6 lakhs on the basis of statement recorded by the Assessing Officer under section 132(4) of the Act. The Tribunal has committed an error in ignoring the retraction made by the assessee.") 15.60 ….

24 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 15.61 … 15.62 … 15.63 …. 15.64 …. 15.65 ….. 15.64 In this regard, reliance is placed on the decision of Hon'ble Supreme Court in the case of Vinod Solanki Vs. Union of India [92 SCL 157], wherein it was held, as under: "It is trite law that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences, which would lend adequate assurance to the court that it may seek to rely thereupon" 15.65. … 15.66 … 15.67 … 15.68 …. 15.69 … 15.70 … 15.71 …. 15.72 It is a trite law that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences, which would lend adequate assurance to the court that it may seek to rely thereupon. (See Pon Adithan v. Deputy Director, Narcotics Control Bureau, Madras [(1999) 6 SCC 1]} 15.73 Reference in this regard should be made to the Instruction issued by the CBDT, vide F. No. 286/2/2003-IT (Inv.-II) dated 10 March, 2003. In the said Instruction, the CBDT has clearly stated that during the course of search and survey, no attempt should be made to obtain the confession regarding the undisclosed income. The spirit of the instruction is that, the confession statement should be based on credible evidence. The crux of the matter is that the mere confessional statement, without their being corroborated by any independent evidence can't be relied upon for the purpose of making addition. There must be independent material evidence to prove that income is chargeable to tax. 15.74 I have noted that the C.B.D.T, the apex body of the Department vide Circular No. F. No. 286/2/2003-IT (Inv.), dated 10-3-2003 has advised the Revenue Authorities to focus and concentrate on collection of evidence of undisclosed income in search cases and abstain from laying undue emphasis on recorded statements or obtaining confession. The relevant excerpt of the said Circular is reproduced hereunder:

25 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns "Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income king the course of the search & seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these circumstances, such confessions during the course of search & seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income-tax Department. Similarly, while recording statement during the course of search & seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, Assessing Officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders." 15.75 The aforesaid directions were once again reiterated by the CBDT vide Circular No. F. No. 286/98/2013-IT dt. 18.12.2014. The same is reproduced hereunder: "Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessees were coerced to admit undisclosed income during Searches/Surveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light.

3. In view of the above, while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance of undue influence/coercion in the recording of the statement during Search/Survey/Other proceeding under the IT. Act, 1961 and/or recording a disclosure of undisclosed income under undue pressure/coercion." 15.76 Therefore, the proposition that assessments made pursuant to search operations are required to be based on incriminating materials discovered as a result of search operation in the case of an assessee and not on recorded statements has been spelt out in unerring terms by the Hon'ble CBDT. 15.77. … 15.78 … 15.79 …. 15.80 ….

26 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 15.81 Next, the issue of incriminating material found during the course of search/survey operation needs to be examined. It is brought on record that in the Remand Report, specific directions were given to the AO to provide copies of the incriminating material, if any, found during the course of the search survey operation in relation to the additions made in the assessment order. In this regard, the incriminating documents relating to the siphoning off of the funds from the Donee Trusts were also required to be furnished along-with the Remand Report. 15.82 In the Remand Report, the AO had only placed reliance on the assessment order and no incriminating documents were enclosed with the said Remand Report. I have gone through the assessment order on this issue and noted that a mobile communication detail were found from the possession of Shri Navin Nishar. Accordingly, a statement was recorded of Shri Navin Nishar on the contents of his mobile text messages. In reply to Q. No. 19 and Q. No. 20, Shri Navin Nishar had stated that these were cash transaction between the Angadias. To clarify the issue, the relevant portion of the statement of Shri Navin Nishar recorded u/s 131 of the Act, on 11.01.2018 is reproduced as under:- Q.19 I am showing you the communication detail through messaging between you and Mr. Kirit Suba. Please explain the contents of the same? Ans. This communication through message denotes cash transaction held between Mr. Sirish Shah's Angadia/ cash handler and Agadia/ cash handler of Shri Kirit Suba's client Mr. Podar. In this transaction cash was to be collected by Angadia of Shirish Shah from Angadia of Mr. Podar. Further, transactions also denote transfer of amount in the bank account of Mr. Podar's companies from accounts of Sh. Sirish Shah's companies through banking channel. Q.20 Please explain the contents of one written/text message 'Kanu by 9320307030 tkn 5 ka 31 k 026733 as instance for further reference. Ans. Sir Kanu is here cash handler and 9320307030 is mobile No. of Mr. Kanu. Tkn stands for Token. 5 stands for five lakh and Rs. 31 k 026733 indicate note number. Sir, inference of the same is that Mr. Kanu, cash handler of Mr. Sirish Shah was to collect the cash of Rs. 5 lakh from cash handler of Mr. Podar after stating the note No.31 k 026733 which indicated that the cash transfer is taking place between the concerned/ right persons only. After collection of cash by Shri Sirish Shah, he used to transfer the money by banking channel in the accounts of Mr. Podar's entities/companies through proposer companies. Sir, in nut and shell it can be said that Mr. Podar was using the companies of Mr. Sirish Shah (i.e. target companies) as conduit for bringing his own money (ie. through cash generation) in his own companies in the form of Share capital by invoking MOU already existing between Proposer companies and target companies. Q.21 On perusal of print out of text message it is seen that text message is for the date of 29 June 2016 and 30 June 2016 only however, your involvement in such transaction had been prior to this also. Please explain the same.

27 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns Ans. Sir, above text messages denote our last such transaction. Earlier transactions are not in the text message because text message have been deleted by me". 15.83 I have gone through the contents of the so called digital evidence relied upon by the AO in the assessment order and the Remand Report. The said digital evidence, being Text Messages are dated 29 & 30 June 2016. Thus, even if the same represented unaccounted cash transactions, the same needs to be taxed in the A.Y. 2017-18. Further, the AO had failed to state as to how the said text messages are connected / related to the Appellant Trust. As per the statement of Shri Navin Nishar and also as per the AO, the said text messages are unaccounted cash transactions between the two Angadias. It is not at all clear, as to how the Appellant Trust can be implicated on the basis of the transactions between two third parties (Angadías). It is also not clear from the material placed on record by the AO as to how the unaccounted cash transaction written in coded form amounting to just Rs. 5 lakhs relating to A.Y. 2017-18 had translated into an addition of Rs. 10.40 Crores in the hand of the Appellant Trust for the A.Y.2011-12. 15.84 I have also taken note of the fact that the presumptions u/s 132(4A)/ 292C of the Act is not available in the case of the Appellant Trust in relation to the text messages found from the possession of a third party, namely, Shri Navin Nishar, whose statement was recorded during the course of survey operation u/s 133A of the Act in the premises of another third party. namely M/s Suba & Co. 15.85 Various Courts have time and again held that presumption u/s 132(4A)/292C is available only in respect of the person from whose possession the documents/ papers are seized. It cannot be applied against a third party and hence, no addition can be made on the basis of the evidence found with a third party.) 15.86 … 15.87 … 15.88 … 15.89 … 15.90 … 15.91 … 15.92 … 15.93 … 15.94 … 15.95 … 15.96 … 15.97 … 28 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 15.98 … 15.99 … 15.100 In the present case at hand, I have also noted that the AO had not read the Text Messages in the right context and perspective. There are several judicial pronouncements on the issue that a document found in the search/survey has to be relied upon as a whole and can't be read in piecemeal. The contents of the seized recorded can't be distorted to the convenience of any party. There is no discretion available with the Revenue or the assessee to rely upon a part of the document favourable to it and plead for rejection of the other part which is not favourable to it, or in respect of which no supporting material is found. Thus, in general, the contents of the document seized have to be accepted as true irrespective of whether it is favourable to assessee or Revenue. 15.101 … 15.102. … 15.103 … 15.104. … 15.105 For the purpose of taxation, all the ingredients/components for levying taxation should be clearly decipherable from the document either on standalone basis or in association with other documents. The components which enter into the concept of taxation are first, the transaction/events which attract the levy, second, the person on whom the levy is imposed and who is obliged to pay the tax, third, the assessment year in which charge of income-tax is levied, fourth, whether any taxable income arises from the transaction recorded in the document and fifth, the rate or rates at which tax is to be imposed. [Refer ACIT v. Satyapal Wassan (2007) 295 ITR (A.T.) 352 (Jbl)] The rates are prescribed in the annual Finance Act and, therefore, this component has no value in determining the total income arising from a seized document. Thus, the other four elements are relevant and in the present case at hand none of the four elements are decipherable from the seized document relied upon by the AO. 15.106 in any case the material found during the course of search needs to be further corroborated and investigated upon by the AO. In the present case at hand, there is no corroboration of the allegations levelled against the Appellant Trust. In this regard, it is important to refer to the judgment of Hon'ble Delhi High Court in the case of CIT vs. Anil Bhalla (2010) 38 DTR 0113: (2010) 322 ITR 0191, wherein the Hon'ble Delhi High Court has upheld, the following observations of the CIT(A):- "4.2 I have considered in detail the material on record. From the notings on p. 47 of Annex A2, it cannot be said that any actual expenditure is represented by such notings which is not recorded in the books of account. To support the addition on account of unexplained expenditure on the basis of jottings on a loose sheet of paper, it is necessary to establish that the notings represent unaccounted transaction, with the help of independent corroborative evidence. In this case apart from the notings on the said paper, no other Independent material or evidence has been brought on record. Moreover, the explanation submitted by the appellant is supported by relevant entries in the books of account of 29 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns VIPL Accordingly, the allegation of unexplained expenditure outside the books of account has not been established in the assessment order. The addition of Rs. 35 lacs is, therefore, deleted." 15.107. It has been held by the Hon'ble Delhi High Court in the case of CIT vs. Gangeshwari Metal Pvt. Ltd. (2013) 96 DTR (Del) 299 that in case of lack of enquiry on the part of the AO, where assessee has furnished all the details, no addition can be made. 15.108 It has also been held in the under noted cases, without having any corroborating evidence / material, any of the figures mentioned / appearing on the unsigned loose papers seized / collected by the Deptt., during the course of search/survey, have no evidentially value under the provisions of law even u/s 292C of the LT. Act.

2. M/s Delco India Pvt. Ltd. reported as ITA No. 116/2016) dated 10.2.2016 by the Hon'ble Delhi High Court.

10. ACITVs. Sharad Chaudhary (2014) 165 TTJ0145) (Delhi) 11. Sunita Dhadda vs. DCIT (2012) 71 DTR 0033 Jaipur. 15.109 Moreover, in the instant case, the confessions have also been retracted and it is also a fact that the addition made is also not supported by any corroborative or primary / direct material evidence. From the set of facts and circumstances, it is apparent that the Appellant has discharged its burden to show that the donation made to the said five donees are genuine. When the initial burden of proof has been discharged by the Appellant, the burden of proof shifts on the AO, which in the present case has not been discharged by him. 15.110 As held by the Hon'ble High Court of Delhi in CIT vs Dwarkadhish Investments P Ltd (2010) 194 Taxmann 43, in cases where assessee provides all the details to establish the genuineness of the transaction, the onus to prove 30 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns would shift to the Revenue. The relevant extract of the said judgment is reproduced hereunder for ready reference:- "In any matter, the onus of proof is not a static one. Though in section 68 proceedings, the initial burden of proof lies on the assessee yet once he proves the identity of the creditors/share applicants by either furnishing their PAN number or Income-tax assessment number and shows the genuineness of transaction by showing money in his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the revenue. Just because the creditors/share applicants could not be found at the address given, it would not give the revenue the right to invoke section 68. One must not lose sight of the fact that it is the revenue which has all the power and wherewithal to trace any person. Moreover, it is settled law that the assessee need not to prove the 'source of source'." 15.111 It is to be noted that when there is no material on record to establish that the Appellant was in collusion with the said five donees namely, M/s Disha Education Society, Dr. D.Y. Patil International Academy, M/s Kshetropasna Trust, M/s Ramrao Adhik Education Society, M/s Karnala Charitable Trust, the findings of the AO against the Appellant are of unsustainable. The AO has made the addition of Rs. 10,40,00,000/- by invoking the provisions of section 2(24) of the Act, simply on the basis of the statements of Kirit Kumar Suba and others without bringing any corroborative evidence on record. When the appellant has duly discharged its onus and the AO has failed to carry out further verification and enquiries, so as to independently ascertain the nature and veracity of the transaction, the additions as made are not sustainable in the eyes of law. In this regard, reliance is placed on the decision of the Hon'ble ITAT Mumbai in the case of DCIT CC-8(4) vs Pali Fabric Ltd. (2019) 110 Taxmann.com 310. 15.112 As stated by the Appellant in its written submissions, the AO while asking for the details to prove the genuineness of donations given, has asked to provide the details in respect of following trusts:- Sr. No. Name Amount (In Rs.) 1. Disha Education Society 65,00,000 2. Dr. D.Y. Patil International Academy 70,00,000 3. Kshetropasna Trust 10,00,000 4. Ramrao Adhik Education Society 7,35,00,000 Total 8,80,00,000 15.113 However, in the impugned assessment order, the AO has included the name of the 5 trust namely, M/s Karnala Charitable Trust to whom an amount of Rs. 1,65,00,000/- had been paid by the Appellant. Thus, the AO had made an addition of Rs. 1,65,00,000/- in respect of donation made to Karnala Charitable Trust without even issuing a show cause notice to the Appellant and without asking the Appellant to submit the details in respect of such donation. Hence, the Appellant was not provided with the due opportunity of being heard in respect of donation of Rs. 1,65,00,000/- made to M/s Karnala Charitable Trust. 15.114 From the above, it is evident that the AO has made the addition of Rs. 10,40,00,000/- on the basis of statements of Shri Kirit Kumar Suba and others without bringing any corroborative evidence on record and without making any independent/ field enquiries. Although, the AO has alleged that during the course 31 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns of search, physical evidences were collected, but there is no reference to the so- called physical evidences in the assessment order under challenge. 15.115 In view of the evidences filed by the Appellant during the course of the assessment proceedings to prove the genuineness of donations given to other trusts and the fact that the AO had neither rebutted any of the evidence filed by the Appellant nor brought on record any corroborative evidence or material, the AO was not justified in bringing to tax donation/ payments aggregating Rs. 10,40,00,000/- by treating the same as income u/s 2(24) of the Act. Further, the AO has erred in holding that the Appellant contravenes the provisions of section 11 & 12 of the Act and thereby rendered itself ineligible for exemption u/s 10(23C) of the Act, without bringing on record any adverse material. 15.116 In view of the above facts and circumstances and the various judicial pronouncements, the Ground of Appeal No. 7, 10 & 11 raised by the Appellant are allowed.”

10. We find that the Ld.CIT(A) had elaborately given his findings while granting relief to the assessee. It is not in dispute that the notices u/s.133(6) of the Act were indeed issued by the Assessing Officer to the donee trusts. The donee trusts to whom notices were issued duly replied in response to notices u/s 133(6) of the Act directly before the Assessing Officer confirming the fact of receipt of donations and also by enclosing the relevant documents sought by the Assessing Officer. Admittedly, the addition in the hands of the assessee had been made based on the survey statements recorded from the parties, which stood retracted subsequently. It is trite law that survey statement has no evidentiary value when it is not supported by any corroborative evidence found during survey. Moreover, the three parties who had retracted were again subject matter of cross examination before the Assessing Officer by the trustee of assessee trust, wherein all the parties reiterated what had been affirmed by them in the retraction affidavits. After this, no action has been taken by the Assessing Officer on the said parties who had retracted their statements and given a different version in the course of cross examination. We find that 32 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns statements of Mr Kirit Kumar Suba, Mr Navin Nishar and Mr N K Sodhani were relied upon heavily by the Ld. DR and by the Assessing Officer. We find that all the three persons are outside chartered accountants. Further statement of Mr Jayesh Zanani, manager accounts in some group company of assessee was relied upon by the Assessing Officer. This person had stated that he had come to know the modus operandi from Mr Kirit Kumar Suba. When the original source of information is proved not reliable, naturally statement of Mr Jayesh Zanani also cannot be reliable. It is to be noted that all these parties retracted their statements as under: - Mr Jayesh Zanani – 02.04.2018 Mr Kirit Kumar SUba – 03.04.2018 Mr Navin Nishar – 04.06.2018 Mr N K Sodhani – 30.08.2018

11. Hence at the time of issuance of notice u/s 153A of the Act on 16.08.2018, 3 persons out of 4 persons had already retracted their original statements. Subsequently during assessment proceedings, these persons were cross examined who confirmed the retraction statement. Moreover, none of the statement recorded by the Assessing Officer shows that there is any evidence with respect to the donation by assessee being bogus i.e the donation made by the assessee or any cash payment given by donee trust to any of the angadias. In these circumstances, we hold that there is no reason that original statements u/s 131 of the Act are to be kept at higher reliable pedestal than the retraction of the same by those persons and further 33 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns the retraction confirmed by them before the Assessing Officer in cross examination. Therefore, the onus shifts to the revenue to prove that the donation given by the assessee trust is bogus independent of these statements or its retractions.

12. Moreover, the Ld. CIT(A) had directed the Assessing Officer to make detailed examination on the documents submitted by the donee trusts with regard to alleged siphoning of funds and their exemption certificates granted by the department to the donee trusts. The Assessing Officer could have independently examined the confirmations given by the donee trusts by examining them in person in the manner known to law. In the instant case, the Assessing Officer had neither examined the trustees of Donee Trusts who alone would be able to state whether they have returned the donation amount in cash to the assessee. No such action has been carried out by the Assessing Officer in the instant case as per the materials available on record. Nothing prevented the Assessing Officer to forward the evidences gathered during the course of search and survey in assessee’s group case together with the details furnished by the donee trusts, to the respective assessing officers of donee trusts for taking consequential action in the hands of the donee trusts. Admittedly, no such evidences have been placed on record by the revenue before us to prove whether any action has been taken at the end of donee trusts. There is absolutely no allegation on the part of the revenue with regard to the regular charitable activities carried out by the assessee trust, despite the conduct of search. All these facts collectively go to prove that the 34 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns Assessing Officer had not made out any case for concluding that the donations given by the assessee trust to the various donee trusts have come back to the assessee in the form of cash or in the form of share capital or share premium in various companies belonging to the assessee group. Hence it could be safely concluded that there is no evidence available with the Assessing Officer to hold that the donations made by the assessee to donee trusts are not for educational purposes.

13. Accordingly, the grounds raised by the revenue for A.Y. 2011-12 are hereby dismissed.

14. Next we deal with the appeal filed by the revenue in the case of Anandilal and Ganesh Podar Society for the A.Y 2012-13, wherein the revenue has raised the following grounds: - "

1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred, in deleting the disallowance of bogus donation of Rs. 12,35,00,000/- u/s 10(23C) of the Income Tax Act,1961 which was made in the course of assessment under section 143(3) r.w.s. 153A as the assesses trust contravened the provisions of section 11 & 12 and thereby rendering itself as ineligible for exemption u/s 10(23C) of the Income Tax Act, 1961." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred, in placing reliance on the order under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 in the case of M/s. Anandilal and Ganesh Podar Society for AY 2111-12 without appreciating that instant order under section 143(3) r.w.s. 153A of the Income Tax Act,1961 relies on additional facts and evidences gathered during search/ survey on Podar Group, post search enquiries and block assessment proceedings which were not considered during reassessment proceedings for AY 2011-12." 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred, in placing extensive reliance on the retraction affidavits of Shri Kiritkumar Suba, Shri Navin Nishar and Shri

35. ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns Naresh Sodhani without appreciating that the retraction affidavits were not reliable & had no evidentiary value." 4. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred, in not appreciating that the statement recorded u/s 131 had evidentiary value and contents thereof were to be presumed to true. " 5. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred, in not appreciating that the modus operandi of tax evasion adopted by Podar group revealed in the course of Search/ Survey stood substantiated by the confirming statements of various key persons and evidences found in the course of search/ survey proceedings in the case of Podar Group." 6. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred, in deleting the disallowance of Rs.28,71,301/- on account of provision for gratuity and leave encashment, without appreciating the fact that such provision was merely in the nature of enhanced provision of employees' for post - retirement benefits and such deduction and all utilization/ set apart is allowable only on actual basis as per sections ll & l 2 of the Income Tax Act, 1961." "The appellant craves leave to add, delete, alter, modify, rectify, substitute or otherwise any or all of the grounds of appeal at or before the time of hearing of the appeal. "

15. The Revenue in the case of Anandilal & Ganesh Podar Society had raised similar grounds of appeal for the A.Y 2013-14, 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 in 1791, 1790, 1792, 1866 and 1889/Mum/2021 respectively for the subsequent six assessment years.

16. The brief facts of the case are that the assessee is a public charitable trust hitherto enjoying exemption u/s 10(23C)(vi) of the Act. There was a search and seizure action u/s. 132 of the Act in the case of the Podar Education Group on 09.01.2018 wherein the assessee was also covered. A survey action u/s. 133A was also carried out on 36 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns associated entities/ individuals on the same date and subsequent dates. As a result of the search, the case was centralized and the Assessing Officer initiated proceedings by issue of notice u/s. 153A of the Act. The main allegation against the Podar Group is that donations made to the extent of ₹.96.90 crores to various entities are bogus in nature in as much as that the donations have found their way back to the coffers of the Trust in the form of cash. The Assessing Officer has treated the donations as bogus primarily on the basis of statements recorded u/s.131 of the Act during the course of survey proceedings u/s 133A of the Act from Shri Kiritkumar D Suba and Shri N K Sodhani who stated that the donations were returned back to the Group in cash, which though were subsequently retracted by them. The Assessing Officer has completed the assessment by treating the donations as bogus, denying exemption u/s 10(23C)(vi) of the Act and also making other additions such as the provision made towards leave encashment and gratuity. After considering the submissions made by the assessee, the Ld. CIT(A) has accorded relief stating that there is no conclusive or corroborative material on record of the ld. AO to hold that the donations have been returned back by the done institutions in cash in exchange for commission. The claims made towards provisions for leave encashment and gratuity also were allowed by the Ld. CIT(A). Aggrieved, the revenue is in appeals before us.

17. Ld DR filed written submissions in the case of Lakeside Properties Pvt Ltd (ITA 1888/Mum/2021) and submitted that the Ld.CIT(A) has merely relied on the order of predecessors in the case of M/s Anandilal 37 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns and Ganesh Podar Society, are reopened assessment proceedings and gave relief. In this regard, she relied on the order of Hon’ble Jurisdictional High Court in the case of Dr Dinesh Jain v. ITO reported in 45 taxmann.com 442 (Bom). Hence she prayed that the order of Assessing Officer may be sustained considering the fact that the retraction of the parties are not as per law and afterthought.

“4. We shall now consider the questions as proposed for the appeal relating to assessment years 2006-07 for our consideration. (a) Regarding Question No.A: (i) The grievance of the appellant before us is that no reliance can be placed upon the statement made by the appellant during the survey proceedings under Section 133A of the Act for the reason that it was recorded on oath. It is undisputed that even under Section 133A of the Act dealing with survey proceedings, the revenue authorities are entitled to record the statement of any person which may be useful or relevant to proceedings under the Act. The power to record a statement 42 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns during survey proceedings is found in Section 133A (3) of the Act. The relevant portion of which reads as under:— "Power of Survey Section 133A (1) to (2) (3) An income tax authority acting under this section may:— (i) & (ii)** ** ** (iii) record the statement of any person which may be useful for, or relevant to, any proceeding under this Act." The requirement of recording a statement on oath is found in Section 132 of the Act i.e. during search and seizure proceeding and such a requirement is not found in Section 133A of the Act. Nevertheless, a statement under Section 133A of the Act does not loose its evidentiary value merely because it is made on oath. Besides, the statement in this case is one of the evidences being relied upon and not the sole evidence. The Tribunal in the impugned order has recorded that the addition of income is based not only on the statement of the appellant- assessee but also based on "Page No.17". The case law relied upon by the appellant in the matter of CIT v. S. Khader Khan Son [2013] 352 ITR 480/[2012] 210 Taxman 248/25 taxmann.com 413 (SC) arising from the decision of Madras High Court in CIT v. S. Khader Khan Son [2008] 300 ITR 157 proceeded on the fact that the authorities did not accept the retraction made by a deponent of a statement made on oath during survey proceedings under Section 133A of the Act. This was on the ground that statement was made on oath. Besides the sole evidence against the assessee in that case was the statement made on oath during the survey proceedings which is not the case in the present facts. Further, in this case the appellant-assessee has not been able to show that the statement made is not correct and/or unbelievable. Therefore, the case law relied upon by the appellant-assessee is completely distinguishable and not applicable to the present facts. (emphasis supplied by us)

(ii) In view of the above, we do not find that question (A) raises any substantial question of law. Accordingly we do not entertain question (A).

43 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 24. It could be seen that the facts of the instant cases before us and the facts before the Hon’ble Madras High Court in the case of Khader Khan & Sons are exactly identical. In fact the Hon’ble Jurisdictional High Court had only sought to distinguish the decision of Khader Khan & Sons on facts and not on the principle. Hence the reliance placed on the decision of Hon’ble Jurisdictional High Court by the revenue in the instant appeals before us, does not advance the case of the revenue.

46 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 6. Aggrieved, the assessee assailed the assessment order passed by the A.O before the CIT(A). As is discernible from the order passed by the CIT(A), we find, that he had after deliberating at length on the different facets forming the basis and/or having a bearing qua the addition of Rs. 2.25 crores made by the A.O under Sec. 68 of the Act, deleted the same. It was observed by the CIT(A) that the view taken by the A.O that the trusts/charitable institutions of Podar Group were involved in siphoning of their receipts by making bogus donations to other charitable/educational institutions, which thereafter was received back in cash and ploughed in the garb of share application money, share premium, loans etc. into companies and other entities controlled by the said group was primarily based on the statements recorded during the course of the survey proceedings under Sec. 133A of certain persons who were stated to have facilitated the aforesaid arrangement, viz. (i). Statement of Shri. Kirit Kumar Dharishbhai Suba, a key person of the group who was working as a consultant chartered accountant and retainer for financial advisory and statutory compliances with Podar group of Educational Institutes since the year 1982 that was recorded u/s 131 of the Act on 11.01.2018; (ii). Statement of Shri. Navin Nishar, chartered accountant, who was associated with Shri. Kirit Kumar Dharishbhai Suba for last 8 years and had arranged four high net worth companies for him to facilitate the aforesaid arrangement; recorded u/s 131 of the Act on 11.01.2018; (iii). Statement of Shri. Naresh Kumar Sodani, Chartered accountant who is stated to have played a pivotal role for facilitating the aforesaid arrangement of siphoning the receipts of trusts/charitable institutions of Podar Group by way of bogus donations to such other trusts/charitable institutions which would be identified by him alongwith Shri. Kirit Kumar Dharishbhai Suba, and would thereafter be received back in cash from the said trusts/charitable institutions through angadias; recorded u/s 131 of the Act on 11.01.2018. It was observed by the CIT(A) that the aforementioned persons had not only admitted their participation in facilitating the aforesaid nefarious activities of laundering the ill-gotten money of Podar group which through a maze of bogus companies was finally routed as share application money, share premium, loans etc into the companies that were controlled by said group, but had even demonstrated at length the modus operandi that was adopted by them for facilitating the said arrangement. In fact, it was observed by the CIT(A) that Shri. Kirit Kumar Dharishbhai Suba (supra) in his statement recorded in the course of the survey proceedings had in reply to Question No. 34 specifically stated that unaccounted cash amounting to Rs. 2.25 crore was introduced as share premium in the books of the assessee company, viz. Hemardi Machine Tools Pvt. Ltd. After taking cognizance of the relevant excerpts of the statements of the aforementioned persons, viz. Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodani, it was observed by the CIT(A) that all of the said persons had subsequently retracted their respective statements.

7. As the facts involve in the present appeal of the assessee company remained more or less the same as were involved in the case of M/s Goodluck Apparels Pvt. Ltd for A.Y 2011-12 in Appeal No. CIT(A)-47, Mumbai/10126/2018-19 for A.Y 2011-12, therefore, the CIT(A) referred to his observations that were recorded while disposing off the said appeal. As the assessee had in the course of the proceedings before the CIT(A) sought admission of the affidavits that were filed by the aforementioned persons, viz. Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodani, wherein they had retracted from their respective statements recorded in the course of the survey proceedings conducted u/s 133A on 11.01.2018, as additional evidence U/rule 46A of the Income-tax Rules, 1962, and had also sought their cross-examination, therefore, the CIT(A) called for a remand report from the A.O. Also, the CIT(A)

47 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns taking cognizance of the assessee’s claim that no incriminating material was found during the course of the search proceedings which would evidence that it had received funds out of those which were allegedly stated to have been siphoned from the charitable/educations trusts of Podar group, therefore, he directed the A.O to provide copies of the relevant incriminating material, if any, that were found during the course of the search proceedings evidencing the said fact. After lots of persuasion, the A.O filed his „remand report‟, dated 06.11.2019 with the CIT(A), wherein he objected to the admission of the “affidavits‟ of the aforementioned persons as an additional evidence. Although, the A.O had in the course of the remand proceedings facilitated a cross-examination of the aforementioned persons to the assessee, however, as all three of them had retracted from their earlier statements, therefore, it was submitted by him in his remand report that the statements of the aforesaid persons recorded in the course of their cross-examination may not be relied upon as the same were based on the retraction affidavits and a well planned after thought. As regards the objections that were raised by the A.O qua admission of the retraction affidavits of the aforementioned persons, viz. Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodani as additional evidence, the same did not find favour with the CIT(A). It was observed by the CIT(A) that as the additional evidence filed by the assessee was pivotal in deciding the various issues agitated in the appeal before him, thus, the same had a direct bearing on determining of the correct taxable income of the assessee. Also, the CIT(A) was of the view that as it was only after the receipt of the assessment order that it had came to the knowledge of the assessee company that the A.O had relied upon the statements of Shri. Navin Nishar and Shri. N.K Sodani for making the additions u/s 68 of the Act, therefore, the retraction affidavits of the said persons were clearly admissible under Rule 46A(1)(c) and Rule 46A(1)(d) of the Income- tax Rules, 1962.

7. On merits, it was observed by the CIT(A) that the A.O had held the share premium of Rs. 2.25 crore received by the assessee as an unexplained cash credit under Sec. 68 of the Act by primarily relying on the statements of Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodan that were recorded in the course of the survey proceedings on 11/12.01.2018. It was observed by the CIT(A) that though the aforementioned persons had resiled from their earlier statements on the ground that they were obtained by the officials under undue influence, severe pressure, stress and coercion, however, the said retractions were rejected by the A.O by treating the same as an afterthought. Also, it was observed by the CIT(A) that the A.O had also taken exception to the aforesaid retractions, for the reason, that they were filed after substantial delay, viz. delay of 81 days in case of Shri. Kirit Kumar Dharishbhai Suba; delay of 5 months in case of Shri. Navin Nishar; and delay of 8 months in case of Shri. Naresh Kumar Sodani. However, the CIT(A) did not find favour with the summarily brushing aside of the retraction affidavits of the aforementioned persons by the A.O i.e without carrying out any independent enquiries and investigations of his own. It was observed by the CIT(A) that though all the aforementioned persons, viz. Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodani had clearly stated in their respective statements recorded in the course of their cross-examination that they have retracted from their earlier statements that were recorded u/s 131 of the Act in the course of the survey proceedings on 11/12.01.2018, however, the A.O had failed to re-examine the said witnesses on the said crucial issue. As regards the merits of the addition qua treating of the share premium as an unexplained cash credit u/s 68 of the Act by the A.O, it was observed by the CIT(A) that the assessee had furnished sufficient documentary evidence to substantiate the 48 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns authenticity of the share capital/share premium that was received by it from all the 19 share subscribers, viz. (i). statement showing the details of share capital and share premium received during the F.Y 2010-11 stating the names, address, PAN of the applicant of shares, amount of share capital, date of application for subscribing the shares, number of shares allotted, amount of share capital, amount of premium on the total amount received, details of share capital and share premium, copy of board resolution for allotment of 5,00,000 shares, copies of letters of the applicant companies seeking allotment of equity shares, copies of the letters confirming the allotment of equity shares to the applicant companies, copy of share valuation report issued by registered valuer, viz. D.N Shetty & Co, dated 22.04.2010 under DCF method, copy of bank statement evidencing that the application money was received from the share applicants through banking channel, copy of certificate of incorporation, certificate of commencement of business, copy of PAN card, memorandum of association, articles of association, resolution passed by applicants of shares in the board meeting, application for shares and confirmations from all the 19 share applicants. In the backdrop of the aforesaid facts, it was submitted by the assessee that as it had placed on record substantial material evidencing the identity and creditworthiness of the share applicants, as well the genuineness of the transactions in question, therefore, the onus that was cast upon it stood duly discharged and was shifted upon the revenue. Also, it was submitted by the assessee that though the A.O had accepted the receipt of share capital of Rs. 25 lac by the assessee company from the aforementioned share applicants, however, it had made an addition as regards the other part of the transaction i.e share premium of Rs. 2.25 crore and had added the same as an unexplained cash credit u/s 68 of the Act in the hands of the assessee. Observing, that the assessee by placing on record substantial documentary evidence, viz. name, PAN, address, copies of share application forms, board resolution, acknowledgement of income-tax returns, Form No. 2 for allotment of equity shares, financial statements, form of allotment of shares etc. had duly discharged the onus that was cast upon it and proved the identity, genuineness and creditworthiness of the share applicants, which had not been dislodged or disproved by the A.O by carrying out any independent enquiries, the CIT(A) was of the view that the addition made by the A.O under Sec. 68 of the Act was not sustainable in the eyes of law. Referring to the view taken by him while disposing off the appeal in the case of M/s Goodluck Apparels Pvt. Ltd for A.Y 2011-12 in Appeal No. CIT(A)-47, Mumbai/10126/2018-19 for A.Y 2011-12, the CIT(A) after relying on a host of judicial pronouncements observed, that when the transactions are duly supported and evidenced by documentary evidence, the same, thus, could not be treated as bogus simply on the basis of the report of the Investigation wing or the statement of third parties. Apart from that, it was observed by the CIT(A) that qua the genuineness of the donations given by the charitable/educational trusts of Podar group to other charitable/educational trusts or institutions, the A.O had received replies from all the donee trusts to whom notices were issued u/s 133(6) of the Act and there were no shortcomings in the documents submitted by them. Also, it was observed by the CIT(A) that the A.O had failed to bring on record any such case where the exemption certificate of any of the donee trust was cancelled on the ground of it having allegedly acted as a facilitator for siphoning off the receipts of charitable/educational institutions of Podar group. On the contrary, it was observed by the CIT(A) that on the issue of siphoning of funds by the donee trusts there was no adverse observation by the A.O in his remand report. Further, the CIT(A) was of the view that the A.O had failed to establish that the donations made by the charitable/educational institutions of Podar group were, inter alia, routed to the assessee company as share premium. It was further 49 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns observed by the CIT(A) that the A.O had not issued any summons u/s 131 of the Act or notices u/s 133(6) of the Act to the various shareholders. In the backdrop of the aforesaid facts, the CIT(A) was of the view that the A.O had not even conducted basic verification and examination of the shareholders who had subscribed to the shares of the assessee company at a premium. To sum up, it was observed by the CIT(A) that the A.O had failed to bring on record any such material which would link the flow of funds from the donee trusts to the share premium that was introduced in the books of the assessee company. Accordingly, drawing support from the doctrine of common law, viz. “incumbit probation qui dicit non qui negat”, i.e burden lies upon one who alleges and not upon one who deny the existence of the fact, the CIT(A) was of the view that the A.O had failed to carry out his doubts to a logical conclusion by converting them into hard facts on the basis of evidences during assessment proceedings. It was further observed by the CIT(A) that the additions made by the A.O were based only on assumptions, conjectures and surmises, and it was not a case of sufficiency of adverse material but complete absence of any incriminating material being brought on record by the A.O. Referring to the record, it was observed by the CIT(A) that there was no iota of evidence to substantiate the alleged modus operandi i.e the bogus donations made to the donee trusts which thereafter were withdrawn in cash and ploughed back into the books of accounts of the companies and entities under the control of Podar group in the garb of share application money, share capital, share premium, loans etc. It was, thus, observed by the CIT(A) that unless specific evidence was brought on record to controvert the validity and correctness of the documentary evidence produced by the assessee company, no liability could be validly fastened on it merely on the basis of assumptions and presumptions of the A.O. In support of his observation that no addition could be made merely on the basis of presumptions the CIT(A) had relied on a host of judicial pronouncements. Further, it was observed by the CIT(A) that all the statements relied upon by the A.O were recorded u/s 131 of the Act during the course of the survey operation conducted under Sec. 133A of the Act, viz. (i). statement of Shri. Kirit Kumar Dharishbhai Suba that was recorded on 11.01.2018 and 12.01.2018 during the course of the survey proceedings carried out u/s 133A in the case of M/s Suba & Company at 102, Olive Apartment, Devidas Lane Corner, Link Road, Borivali (West), Mumbai – 400 103; (ii). statement of Shri. Navin Nishar that was recorded on 11.01.2018 during the course of the survey proceedings carried out u/s 133A in the case of M/s Suba & Company at 102, Olive Apartment, Devidas Lane Corner, Link Road, Borivali (West), Mumbai 400103; and (iii). statement of Shri. Naresh Kumar Sodani that was recorded on 12.01.2018 during the course of the survey proceedings carried out u/s 133A at 245-246, Vardhman Sunrise Plaza, Vasundhra Enclave, New Delhi – 110 096. Relying on the judgments of the Hon’ble High Court of Kerala in the case of Paul Mathews & Sons Vs. CIT (2003) 263 ITR 101 (Ker) and that of the Hon‟ble Supreme Court in the case of CIT Vs. M/s S. Khader Khan and sons (2012) 25 taxmann.com 413 (SC) and a host of other judicial pronouncements, it was observed by the CIT(A) that as a statement recorded u/s 133A of the Act does not have any evidentiary value and the A.O is not authorised to administer oath and record a sworn statement u/s 133A of the Act, thus, the statements recorded u/s 133A of the Act are not conclusive piece of evidences in themselves. It was further observed by the CIT(A) that as the stand of the aforementioned persons, viz. Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodhani had been vacillating during the course of the proceedings, therefore, their statements could not be held to be trustworthy and carried very little evidentiary value. It was observed by the CIT(A) that in the Examination in chief, the revenue had recorded their statements and they gave a statement in favour of the revenue, 50 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns however, during cross-examination, they on being questioned gave a statement in favour of the assessee. Relying on certain judicial pronouncements, it was observed by the CIT(A) that no reliance can be placed on the testimony of a person indulging in double speaking and taking contradictory stands on different occasions. It was further observed by the CIT(A) that the A.O had merely acted upon the report of the Investigation Wing and had not carried out any relevant investigation to take the case to its logical conclusion, despite having been given another opportunity in remand proceedings. In sum and substance, it was observed by the CIT(A) that there was no evidence on record to prove that the transactions carried out by the assessee company were collusive transactions. As such, the CIT(A) was of the view that additions made on the basis of a statement alone will not suffice without supportive, independent evidence; as they have no probative value in the absence of corroborative evidence. It was further observed by the CIT(A) that it was trite law that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences which would lead adequate assurance to the court that it may seek to rely thereupon. In support of his aforesaid observation reliance was placed by the CIT(A) on the CBDT Instruction F.No. 286/2/20003-IT(Inv-II), dated 10th March, 2003. It was observed by the CIT(A) that in its aforesaid Instruction the CBDT had emphasised that during the course of search and survey proceedings no attempt should be made by the tax officials to obtain confessions regarding the undisclosed income and the focus should be on collection of credible evidence. Again, the aforesaid directions were reiterated by the CBDT in its Circular No. F.No. 286/98/2013-IT, dated 18.12.2014. It was further noticed by the CIT(A) that though the A.O in the course of the remand proceedings was specifically directed to provide copies of the incriminating material, if any, found during the course of the search operation in relation to the additions made in the assessment order i.e incriminating material which would evidence siphoning off the trust funds and introduction of the same as share premium in the books of account of the assessee company, however, the A.O in his remand report had only placed reliance on the assessment order and no incriminating documents whatsoever were furnished by him. It was observed by the CIT(A) that the A.O while passing the assessment order as well as in his remand report had relied upon a so called digital evidence i.e a text message dated 29th & 30th June, 2016 between Shri. Navin Nishar and Shri. Kirit Kumar Dharishbhai Suba, which was clarified by Shri. Navin Nishar in his statement recorded u/s 131 on 11.01.2018 as a communication qua certain cash transactions between Shri. Sirish Shah‟s Angadia/cash handler and Angdia /cash handler of Shri. Kirit Kumar Dharishbhai Suba. Referring to the said so called digital evidence, it was observed by the CIT(A) that the same was not only by any means found to be related to the assessee company, but even otherwise the date borne on the same i.e 29th & 30th June, 2016 was relevant to A.Y 2017-18 and not the year under consideration. Accordingly, it was observed by the CIT(A) that there was no material available on record which would evidence that the donations of Podar trusts were routed to the assessee company in the garb of share premium. Adverting to the presumptions provided in Sec. 132(4A)/292C of the Act, it was observed by the CIT(A), that even otherwise as the aforesaid text messages were found from the possession of a third party, viz. Shri. Navin Nishar, therefore, no adverse inferences qua the contents thereof could have been drawn in the hands of the assessee company. In the totality of the facts attending to the case of the assessee, it was observed by the CIT(A) that as the confessions/statements of Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodhani had thereafter been retracted by them, and the additions made by the A.O was not supported by any corroborative or 51 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns primary/direct material evidence, therefore, now when the assessee had duly discharged the onus that was cast upon him as regards proving the identity and creditworthiness of the share applicants and the genuineness of the transactions, the burden to prove to the contrary was shifted on the A.O. Accordingly, the CIT(A) was of the view that the addition of the share premium as an unexplained cash credit u/s 68 of the Act was made by the A.O only on the basis of the statements of the aforementioned persons, viz. Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodhani without bringing on record any corroborative evidence. It was further observed by the CIT(A), that as the A.O had neither placed on record any incriminating material supporting the aforesaid addition nor brought on record any material which would establish that the assessee was in collusion with the donee trusts, therefore, there was no justification in holding the share premium as an unexplained cash credit within the meaning of Sec. 68 of the Act. Apart from that, it was observed by the CIT(A) that now when the A.O had held the share capital received by the assessee company from the share applicants as genuine, therefore, it could safely be concluded that the identity, creditworthiness and genuineness of the share subscribers qua the transactions in question had been accepted by him. It was, thus, observed by the CIT(A) that after holding the share capital received by the assessee from the share applicants as genuine, it was incorrect on the part of the A.O to adopt an inconsistent approach and treat the share premium received from the same shareholders as bogus. Qua the share premium charged by the assessee company, it was observed by the CIT(A) that the same was duly supported by the valuation report of the registered valuer, viz. D.N Shetty & Co. As regards the „proviso‟ to Sec. 68 of the Act which was made available on the statute vide the Finance Act, 2012 w.e.f 01.04.2013, making it obligatory that in a case where any sum credited in the books of account of a assessee company consists of share application money, share capital, share premium or any such amount by whatever name called, it is obligatory for the person, being a resident in whose name such credit is recorded to offer an explanation to the satisfaction of the A.O about the nature and source of such sum so credited, it was observed by the CIT(A) that the same was applicable prospectively i.e w.e.f A.Y 2013-14, and thus, would not be applicable to the case of the present assessee for A.Y 2011-12. In support of his aforesaid observation the CIT(A) had relied on the judgment of the Hon’ble High Court of Bombay in the case of CIT Vs. Gagandeeep Infrastructure (P) Ltd. (2017) 80 taxmann.com 272 (Bom). Rather, the CIT(A) relied on the judgment of the Hon‟ble Supreme Court in the case of CIT Vs. Lovely Export Pvt. Ltd. (2008) 216 CTR 195 (SC), wherein, the Hon‟ble Apex Court had observed that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as the undisclosed income of assessee company. Accordingly, it was observed by the CIT(A) that now when the assessee had furnished the complete details of the share applicants, then, in case the A.O was of the view that the share premium was received by the assessee from bogus shareholders, it was open for him to proceed against the said share subscribers and could not assess the amounts so received as the unexplained cash credit in the hands of the assessee. Also, support was drawn by the CIT(A) on a host of other judicial pronouncements wherein a similar view was taken. Also, the CIT(A) relied on the judgment of the Hon’ble High Court of Bombay in the case of Pr. CIT Vs. Apeak Infotech (2017) 88 taxmann.com 695 (Bom) and observed, that as the amount received on issue of share capital as premium are on capital account, therefore, the same cannot be considered to be income. The Hon’ble High Court while concluding as hereinabove had relied on its earlier order passed in the case of Vodafone India Services (P)

52 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns Ltd. Accordingly, the CIT(A) on the basis of his aforesaid observations vacated the addition of Rs. 2.25 crores that was made by the A.O by treating the share premium received by the assessee as an unexplained cash credit u/s 68 of the Act.

8. The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. We have heard the ld. Authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. As observed by us hereinabove, the ld. CIT(A) had on the basis of an exhaustive order vacated the stamping of the share premium of Rs. 2.25 crore as an unexplained cash credit u/s 68 of the Act by the A.O. We shall, thus, deal with the sustainability of the multiple observations of the CIT(A) qua the issue in question i.e treating of the share premium of Rs. 2.25 crore as an unexplained cash credit by the A.O. On a perusal of the assessment order, we find that information was received by the A.O from the Investigation Wing, Mumbai that that the trusts/charitable institutions of Podar Group were involved in siphoning off the donations received by them by making bogus donations to other charitable/educational institutions, which thereafter were received back in cash and ploughed in the garb of share application money, share premium, loans etc. into companies and other entities controlled by the said group. As per the information, it was conveyed to the A.O that the aforesaid nefarious activities of Podar group were supported by the statements recorded during the course of survey proceedings under Sec. 133A of certain persons viz. Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodani who had admitted of their participation in facilitating the aforesaid nefarious arrangement of Podar group. On a perusal of the statement of Shri. Kirit Kumar Dharishbhai Suba, we find, that he had in reply to Question No. 34 categorically stated that unaccounted cash amounting to Rs. 2.25 crore was introduced as share premium in the books of the assessee company, viz. Hemadari Machine Tools Pvt. Ltd. On the basis of the aforesaid information, it was further conveyed to the A.O that the assessee company under the aforesaid scheme of arrangement had received share premium of Rs. 2.25 crore from the following non-existent persons/entities : Name of the concern from whom Date of Sr. No. Amount in Rs. share Premium is received transaction 1. Gyaneshwar Trading & Finance Co. Ltd. 9,00,000 25.05.2010 2. Oshin Investment and Finance Pvt. Ltd. 9,00,000 25.05.2010 3. Sidh Housing Development Co. Ltd. 9,00,000 25.05.2010 4. Albatross Share Registry Pvt. Ltd. 13,50,000 26.05.2010 5. Artillegence Bio Innovation Ltd. 6,75,000 26.05.2010 6. One2E Solution India Pvt. Ltd. 13,50,000 26.05.2010 7. Aaram Tradin Pvt. Ltd. 13,50,000 09.10.2010 8. Onspec Infotech Ltd. 13,50,000 09.10.2010 9. Preet Mercantile Pvt. Ltd. 13,50,000 09.10.2010 10. Maheshwari Knit Export Ltd. 13,50,000 09.10.2010 11. Tinta Mercantile Pvt. Ld. 13,50,000 09.10.2010 12. Prabal Mercantile Pvt. Ltd. 13,50,000 09.10.2010 13. Ronit Mercantile Pvt. Ltd. 13,50,000 09.10.2010 14. Mansi Exprot Pvt. Ltd. 13,50,000 09.10.2010 15. Shreerajnakoda Jewels Pvt. Ltd. 13,50,000 09.10.2010 16. Better Buidcon Pvt. Ltd. 13,50,000 09.10.2010 17. Suhana Complex Pvt. Ltd. 13,50,000 09.10.2010 53 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns Name of the concern from whom Date of Sr. No. Amount in Rs. share Premium is received transaction 18. Artillegence Bio Innovation Ltd. 2,25,000 13.10.2010 19. Terry Towel Industries Ld. 13,50,000 22.10.2010 Total 2,25,00,000 Backed by the aforesaid information, the A.O carried out further verifications and perused the financials of the assessee company for A.Y 2011-12 to 2016- 17, which revealed that it had not shown any business whatsoever in its profit & loss account for any of the said year. On the basis of his aforesaid observations, the A.O held a conviction that the assessee company, viz. M/s Hemadri Machine Tools Pvt. Ltd. in the garb of share premium had merely received accommodation entries. Holding a conviction that as the assessee had neither carried out any activities nor there was any justifiable reason which would go to suggest that its shares could command such high premium during the year under consideration, i.e the first year of the company, the A.O reopened the case of the assessee company u/s 147 of the Act.

9. As observed by us hereinabove, the primary reason that had weighed with the A.O for holding that the Share premium of Rs. 2.25 crore received by the assessee company was sourced out of the siphoned receipts of the charitable/educational institutions of Podar group, were the statements of certain persons viz. Shri. Kirit Kumar Dharishbhai Suba, Shri. Navin Nishar and Shri. Naresh Kumar Sodani who as observed by us at length hereinabove had in their respective statements recorded during the course of survey proceedings under Sec. 133A initially admitted that they had participated and facilitated the aforesaid nefarious arrangement of laundering of the funds of the aforesaid group. Our aforesaid conviction is all the more fortified from the fact that Shri. Kirit Kumar Dharishbhai Suba (supra) had in his statement recorded during the course of survey action conducted u/s 133A had categorically stated that unaccounted cash amounting to Rs. 2.25 crore was introduced as share premium in the books of the assessee company, viz. Hemadari Machine Tools Pvt. Ltd. However, we find that it remains as a matter of fact borne from the record all the aforementioned persons had thereafter on the basis of their respective „affidavits‟ retracted from their earlier statements, viz. Shri. Kirit Kumar Dharishbhai Suba had retracted from the averments made in his statement recorded u/s 131 on 11.01.2018 and 12.01.2018 by filing an „affidavit‟, dated 03.04.2018 on a non-judicial stamp paper duly affirmed before a notary; Shri. Navin Nishar retracted from his statement recorded u/s 131 on 11.01.2018 by filing an “affidavit‟, dated 04.06.2018; and Shri. Naresh Kumar Sodani had retracted from his statement recorded u/s 131 on 11.01.2018 by filing an “affidavit‟, dated 30.08.2018. Apart from that, all the aforementioned persons, viz. Shri. Kirit Kumar Dharishbhai, Shri. Navin Nishar and Shri. Naresh Kumar Sodani had in the course of their cross-examination that was facilitated to the assessee by the A.O at the behest of the CIT(A) in the course of the remand proceedings, had once gain filed their duly notarized retraction affidavits dated 26.09.2019, 27.09.2019 & 27.09.2019, respectively, and had clearly stated that their earlier statements recorded u/s 131 of the Act during the course of the survey proceedings should not be relied upon. Although, the A.O had in his remand report, dated 06.11.2019 requested the CIT(A) not to admit the retraction “affidavits‟ of the aforementioned persons as additional evidence U/rule 46A, however, we find that the CIT(A) being of the view that the aforesaid “affidavits‟ had a material bearing on the adjudication of the issues before him, as well as in all fairness taking cognizance of the fact that as it was only after the receipt of the assessment order that it had came to the knowledge 54 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns of the assessee company that the A.O had relied upon the statements of Shri. Navin Nishar and Shri. N.K Sodani for making the additions u/s 68 of the Act, had rightly concluded that the retraction affidavits of the said persons were clearly admissible under Rule 46A(1)(c) and Rule 46A(1)(d) of the Income-tax Rules, 1962. Accordingly, we find that the aforementioned persons had clearly by way of their retraction “affidavits‟ resiled from their averments made in their respective statements that were recorded u/s 131 of the Act in the course of the survey proceedings. Apart from that, the fact that the aforementioned persons had in the course of their cross-examination relied on their retraction “affidavits‟ and had further supplemented the same by filing fresh affidavits‟ dated 26.09.2019, 27.09.2019 & 27.09.2019, proves to the hilt that their earlier averments made in their respective statements recorded u/s 131 of the Act did no more hold the ground any more and could not be acted upon in the absence of any corroborative evidence. At this stage, we may herein observe that the CIT(A) had rightly concluded that despite the retraction and the contradictory statements given by the aforementioned persons in the course of their cross- examination during the remand proceedings, the A.O except for harping on the fact that the said retraction and the contradictory statements of the said persons were a result of an afterthought, had however, neither re- examined the said persons qua their contradictory statements nor placed on record any material which would instill confidence as regards the incorrectness of the facts therein stated, as claimed by the A.O, on the basis of which such retractions were not to be considered. Be that as it may, we concur with the view taken by the CIT(A) that now when the statements of the aforementioned persons had been retracted, therefore, in was all the more onerous on the part of the A.O to substantiate on the basis of supporting/corroborative material that the averments made by the said persons in their respective statements recorded u/s 131 of the Act on 11/12.01.2018 revealed the correct state of affairs. We, thus, in the backdrop of our aforesaid observations are of the considered view that pursuant to the retraction of their respective statements by the aforementioned persons, it was obligatory on the part of the A.O to substantially corroborate the same by other independent and cogent evidence in support of the facts so claimed by him. Our aforesaid view is fortified by the following judicial pronouncements: i. Vinod Solanki Vs. Union of India (2008) (16) Scale 31 ii. Kailashben Manharlal Chokshi Vs. CIT (2008) 174 Taxman 466 (Gujarat) iii. CIT, Ranchi Vs. Ravindra Kr. Jain (2011) 12 taxmann.com 257 iv. M. Narayanan & Bros. Vs. ACIT (2011) 13 taxmann.com 49 (Mad) v. ACIT Vs. Jorawar Singh M. Rathod (2005) 148 taxman 35 (Ahd)(Mag) vi. Shree Chand Soni Vs. DCIT (2006) 101 TTJ (Jd) 1028 vii. Basant Bansal Vs. ACIT, Jaipur [63 Taxmann.com 199] viii. ACIT Vs. Shri. Johari lal Sodhani [ITA 145/Jp/2013] ix. First Global Stockbroking Pvt. Ltd. [115 TTJ 173] (Mum) In fact, we find that the CBDT in its Instruction F. No. 286/2/2003-IT (Inv-II), dated 10th March, 2003, had itself stated that during the course of search and survey proceedings the officials should abstain from laying undue emphasis on recording statements or obtaining confessions regarding undisclosed income, but focus should be on collection of evidence of undisclosed income. Further, the aforesaid directions were once again reiterated by the CBDT in its Circular F.No. 286/98/2013-IT, dated 18.12.2014. We, thus, in terms our aforesaid observations concur with the view taken by the CIT(A) that as the A.O pursuant to the retraction of their respective statements by the aforementioned persons, viz. Shri. Kirit Kumar Dharishbhai, Shri. Navin Nishar and Shri. Naresh 55 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns Kumar Sodani, had failed to place on record any corroborative material which would substantiate that the averments made by them in their original statements recorded u/s 131 of the Act on 11/12.01.2018 i.e during the course of the survey proceedings revealed the correct facts, therefore, his hollow claim that the retraction of the aforementioned persons being a result of an afterthought be not admitted, does not merit acceptance. Alternatively, we also concur with the view taken by the CIT(A) that as the statements of the aforementioned persons, viz. Shri. Kirit Kumar Dharishbhai, Shri. Navin Nishar and Shri. Naresh Kumar Sodani were recorded in the course of the survey action conducted against them u/s 133A of the Act on 11/12.01.2018, therefore, as the A.O is not authorised to administer oath and record a sworn statement u/s 133A of the Act, hence, the said statements did not carry any evidentiary value. Our aforesaid views is fortified by the judgment of the Hon‟ble High Court of Kerala in the case of Paul Mathews & Sons Vs. CIT (2003) 263 ITR 101 (Ker) and that of the Hon‟ble Supreme Court in the case of CIT Vs. S. Khader Khan Son (2012) 25 taxmann.com 413 (SC).

9. Apart from that, we also find ourselves in agreement with the view taken by the CIT(A) that no incriminating material had been placed on record by the department which would evidence that the funds of the charitable/educational institutions of Podar group were, inter alia, routed as Share premium in the books of accounts of the assessee company before us. As observed by us hereinabove, the CIT(A) while calling for a remand report from the A.O had specifically directed him to provide copies of the incriminating material, if any, found during the course of the search operation in relation to the additions made in the assessment order i.e incriminating material which would evidence siphoning off the trust funds and introduction of the same as share premium in the books of account of the assessee company., However, the A.O in his remand report had only placed reliance on the assessment order and no incriminating documents whatsoever were furnished by him. It was observed by the CIT(A) that the A.O while passing the assessment order as well as in his remand report had merely relied upon a so called digital evidence i.e a text message dated 29th & 30th June, 2016 between Shri. Navin Nishar and Shri. Kirit Kumar Dharishbhai Suba, which was clarified by Shri. Navin Nishar in his statement recorded u/s 131 on 11.01.2018 as a communication qua certain cash transactions between Shri. Sirish Shah‟s Angadia/cash handler and Angdia/cash handler of Shri. Kirit Kumar Dharishbhai Suba. Referring to the said so called digital evidence, it was observed by the CIT(A) that the same was not only by any means found to be related to the assessee company, but even otherwise the date borne on the same i.e 29th & 30th June, 2016 was relevant to A.Y 2017-18 and not the year under consideration. In the backdrop of the aforesaid facts, we concur with the observation of the CIT(A) that no incriminating material was found in the course of the search proceedings which would evidence that the receipts of Podar trusts were routed to the assessee company in the garb of share premium during the year under consideration. Although it is a matter of fact that no incriminating material had surfaced in the course of the search proceedings which would irrefutably evidence that the Share premium of Rs. 2.25 crore received by the assessee company during the year under consideration was sourced out of the receipts of charitable/educational institutions of Podar group, however, even otherwise as the so called “digital evidence‟ i.e text message retrieved from the mobile phone of Shri. Navin Nishar dated 29th & 30th June, 2016, was not found from the possession of the assessee, therefore the presumption contemplated in Sec. 132(4A) and Sec. 292C could also by no means be invoked and used against the assessee for drawing of adverse inferences qua the transaction of receipt of share premium of Rs. 2.25 crore by the assessee from duly identified 19 share 56 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns subscribers. We find that the CIT(A) had observed that the A.O while verifying the genuineness of the donations given by the charitable/educational trusts of Podar group to other charitable/educational trusts or institutions had received replies from all the donee trusts to whom notices were issued u/s 133(6) of the Act and there were no shortcomings in the documents submitted by them. Also, we find that it was observed by the CIT(A) that the A.O had failed to bring on record any such case where the exemption certificate of any of the donee trust was cancelled on the ground that it had acted as a facilitator for siphoning off the receipts of charitable/educational institutions of Podar group. On the contrary, we find that as observed by the CIT(A) that on the issue of siphoning of funds by the donee trusts there was no adverse observation by the A.O in his remand report. In the backdrop of the aforesaid facts, we are of a strong conviction, that now when the genesis of the controversy leading to the adverse inferences qua the genuineness of the share premium received by the assessee company i.e genuineness of the donations received by the donee trusts/institutions/trusts have not been disproved by the department, therefore, the very story of siphoning of funds of charitable/educational institutions of Podar trusts falls to ground, and thus, no adverse inferences on the said ground could have validly been drawn on the said basis in the hands of the assessee company.

10. We shall now advert to the observation of the CIT(A) that the assessee had duly discharged the onus that was cast upon it as regards proving the identity and creditworthiness of the shareholders and the genuineness of the transactions of receipt of share premium. As is discernible from the records, we find that the assessee had in the course of the proceedings before the lower authorities furnished documentary evidence to substantiate the authenticity of receipt of share premium from the 19 share subscribers, viz (i). statement showing the details of share capital and share premium received during the F.Y 2010-11 stating the names, address, PAN of the applicant of shares, amount of share capital, date of application for subscribing the shares, number of shares allotted, amount of share capital, amount of premium on the total amount received, details of share capital and share premium, copy of board resolution for allotment of 5,00,000 shares, copies of letters of the applicant companies seeking allotment of equity shares, copies of the letters confirming the allotment of equity shares to the applicant companies, copy of share valuation report issued by registered valuer, viz. D.N Shetty & Co, dated 22.04.2010 under DCF method, copy of bank statement evidencing that the application money was received from the share applicants through banking channel, copy of certificate of incorporation, certificate of commencement of business, copy of PAN card, memorandum of association, articles of association, resolution passed by applicants of shares in the board meeting, application for shares and confirmations from all the 19 share applicants. In the backdrop of the aforesaid facts, we concur with the view taken by the CIT(A) that as the assessee had placed on record substantial material evidencing the identity and creditworthiness of the share applicants, as well the genuineness of the transactions in question, therefore, the primary onus that was cast upon it was duly discharged and stood shifted upon the revenue. On a perusal of the records, we find that the A.O had at no stage doubted or dislodged the authenticity and veracity of the aforesaid documentary evidence that was filed by the assessee to substantiate the authenticity of the transaction of having received share capital and share premium from the aforementioned 19 parties. We find that though the A.O had accepted the receipt of share capital of Rs. 25 lac by the assessee company from the aforementioned share subscribers, however, he had without giving any justifiable reason drawn adverse inferences as regards the other part 57 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns of the transaction i.e share premium of Rs. 2.25 crore and had added the same as an unexplained cash credit u/s 68 of the Act in the hands of the assessee. In our considered view, as observed by the CIT(A), and rightly so, there was no justification on the part of the A.O to hold the share capital received by the assessee from the 19 share applicants as genuine, while for at the same time adopt an inconsistent approach and treat the share premium received from the same shareholders as bogus. Qua the share premium charged by the assessee company, we are in agreement with the observation of the CIT(A) that as the same was duly supported by the valuation report of a registered valuer, viz. D.N Shetty & Co., therefore, it could not have been summarily scrapped or discarded by the A.O. As observed by us hereinabove, not only the assessee had by placing on record clinching documentary evidence substantiated the identity and creditworthiness of the share subscribers and the genuineness of the transactions in question, the same as observed by us hereinabove had not been disproved or dislodged by the A.O. As a matter of fact, we find that the A.O had at no stage i.e in the course of the assessment proceedings or in the remand proceedings ever issued notices under Sec. 133(6) or summons u/s 131 of the Act to the share subscribers, despite the fact that their complete details were available with him. We, thus, are of the considered view, that not only the assessee had on the basis of irrefutable documentary evidences substantiated to the hilt the authenticity of the transaction of receipt of share premium, rather, the A.O by not carrying out any verifications can safely be held to have not carried any doubts as regards the genuineness and veracity of the documents filed by the assessee before him. Accordingly, in the backdrop of the aforesaid facts, we are of a strong conviction that as the assessee by placing on record substantial documentary evidence, viz. name, PAN, address, copies of share application forms, board resolution, acknowledgement of income-tax returns, Form No. 2 for allotment of equity shares, financial statements, form of allotment of shares etc. had duly discharged the onus that was cast upon it and proved the identity, genuineness and creditworthiness of the share applicants, which had not been dislodged or disproved by the A.O by carrying out any independent enquiries, therefore, the CIT(A) had rightly concluded that the A.O bypassing such clinching documentary evidences filed by the assessee could not have held the share premium of Rs. 2.25 crore as an unexplained cash credit within the meaning of Sec. 68 of the Act.

11. We shall now deal with the observation of the CIT(A) that as the “Proviso‟ to Sec. 68 had been made available on the statute vide the Finance Act, 2012 w.e.f 01.04.2013, which therein provides that in a case where any sum credited in the books of account of an assessee company consists of share application money, share capital, share premium or any such amount by whatever name called, it is obligatory for the person, being a resident in whose name such credit is recorded to offer an explanation to the satisfaction of the A.O about the nature and source of such sum so credited; is applicable prospectively i.e w.e.f A.Y 2013-14, therefore, it would not be applicable to the case of the present assessee for A.Y 2011-12. As observed by the ld. CIT(A), and rightly so, the „Proviso‟ to Sec. 68 is applicable prospectively i.e w.e.f 01.04.2013, and thus, the same would not be applicable to the case of the assessee before us. Our aforesaid view is fortified by the judgment of the Hon‟ble High Court of Bombay in the case of CIT Vs. Gagandeeep Infrastructure (P) Ltd. (2017) 394 ITR 680 (Bom), wherein it was observed as under : “We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for 58 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 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 was 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 was introduced “for removal of doubts” or that it is “declaratory”. Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before 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 namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfied. Further it was a submission on behalf of the Revenue 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 (P) Ltd. (supra) in the context to the pre-amended Section 68 of the Act has held that where the Revenue urges that the amount of share application money has been received from bogus shareholders then it is for 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 assessee's income as unexplained cash credit.” Further, we concur with the view taken by the CIT(A) that now when the assessee had filed with the A.O the complete details of the 19 share subscribers, viz. names, address, PAN nos., confirmations etc., and still if the A.O was of the view that the share premium was received by the assessee from bogus shareholders, then, it was open for him to proceed against such share subscribers and could not have assessed the said amount as an unexplained cash credit in the hands of the assessee company. Our aforesaid view is supported by the judgment of the Hon‟ble Supreme Court in the case of CIT Vs. Lovely Export Pvt. Ltd. (2008) 216 CTR 195 (SC). Also a similar view qua the pre-amended Sec. 68 of the Act i.e the assessee can be asked to prove the source of credit in books, but cannot be asked to prove the source of the source has been taken in the following judicial pronouncements : (i). Murlidhar Lahorimal Vs. CIT (2006) 280 ITR 512 (Guj) (ii). Labh Chand Bohra Vs. ITO (2008) 219 CTR 571 (Raj) (iii). CIT Vs. Dwarkadish Investment Pvt. Ltd. (2011) 330 ITR 298 (Del) (iv). Sarogi Credit Corporation Vs. CIT (1976) 103 ITR 344 (Pat) (v). Aravali Trading Co. Vs. ITO (2008) 220 CTR 622 (Raj) (vi) Nemi Chand Kothari Vs. CIT (2004) 3264 ITR 254 (Gau) (vii). CIT Vs. Vacmet Packaging (India) Pvt. Ltd. (2014) 367 ITR 217 (All) (viii). CIT Vs. Orissa Corporation P. Ltd. (1986) 159 ITR 78 (SC)

59 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns (ix). CIT Vs. Divine Leasing & Finance Ltd. (2008) 299 ITR 268 (Del) (x). CIT Vs. Creative World Telefilm Ltd. (2011) 333 ITR 100 (Bom) (xi). CIT Vs. Value Capital Services Ltd. (2008) 307 ITR 334 (Del) (xii). DCIT Vs. Rohini Builders (2002) 256 ITR 360 (Guj) (xiii). CIT Vs. Apex Therm Packaging Pvt. Ltd. (2014) 222 Taxman 125 (Guj) (xiv). Orient Trading Co. Ltd. Vs. CIT (1963) 49 ITR 723 (Bom) (xv). CIT Vs. Ranchhod Jivabhai Nakhava (2012) 208 Taxman 35 (Guj) (xvi). PCIT Vs. Paradise Inland Shipping Pvt. Ltd. 84 taxmann.com 58 (Bom) (xvii). CIT Vs. Sahibganj Electric Cables Pvt. Ltd. (1978) 115 ITR 0408 (Cal) Accordingly, in the backdrop of the facts of the case r.w the settled position of law, we are of the considered view that as the assessee had beyond doubt on the basis of substantial material filed with the A.O proved the identity, creditworthiness and genuineness of the transactions in question, therefore, the share premium of Rs. 2.25 crore received by it from the aforementioned 19 share subscribers could not have held as an unexplained cash credit within the meaning of Sec. 68 of the Act. We, thus, finding no infirmity in the view taken by the CIT(A) who had rightly held that as the assessee had duly discharged the onus that was cast upon it as regards proving the identity, creditworthiness and genuineness of transactions in question, therefore, the share premium of Rs. 2.25 crore received from the 19 share subscribers could not have been assessed as an unexplained cash credit u/s 68 of the Act, uphold his view.

12. We, thus, in the backdrop of our aforesaid deliberations, finding no infirmity in the very well reasoned order of the CIT(A), uphold the view taken by him that the share premium of Rs. 2.25 crore received by the assessee during the year under consideration could not be held as an unexplained cash credit within the meaning of Sec. 68 of the Act. Accordingly, finding no merit in the appeal of the revenue we dismiss the same.

13. Resultantly, the appeal of the revenue being devoid and bereft of any merit is dismissed.”

ITA No. 1888/Mum/2021 – Lakeside Properties Pvt Ltd – A.Y. 2014-15 64 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns 34. Though the revenue had raised several grounds in this appeal, the central issue involved therein is only challenging the action of the Ld.CIT(A) in deleting the addition made u/s 68 of the Act towards sale proceeds of shares by the assessee.

(a) Application form for equity shares (b) Acceptance letter (c) Confirmation from shareholder confirming purchase of shares (d) Board resolution of the shareholder company for purchase of shares in assessee company (e) Certificate of incorporation of shareholder company (f) Memorandum and Articles of Association of shareholder company (g) Income tax return acknowledgement of shareholder company (h) PAN of shareholder company (i) Audited financial statements of shareholder company (j) Bank statements of shareholder company highlighting the payments made for purchase of shares in assessee company

77 ITA.No. 713/Mum/2020 (A.Y.2011-12) 1790, 1792 & 1889/MUM/2021& Other appeals Anandilal and Ganesh Podar Society & other group concerns ITA No. 1891/Mum/2021 – Aansal Securities Services Pvt Ltd – A.Y. 2016-17 ITA No. 1893/Mum/2021 – Amazing Suppliers Pvt Ltd – A.Y. 2014-15