DCIT, C.C.-3(4), KOLKATA vs. M/S TANISHQUE TRADE LINK PVT. LTD, HOWRAH

That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law as well as in facts in ignoring that the identity and creditworthiness of the shareholders and even the genuineness of the transactions remained unexplained.

That on facts and in the circumstances of the case, the Ld. CIT(A) has erred in not invoking his powers u/s. 250(4) of the I.T. Act, 1961 in directing the Assessing Officer to make further enquiry and report the results of the Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 2 same to him when he was himself convinced that the A.O. had not conducted any enquiry along the lines he was required to do.

That on facts and in the circumstances of the case, the Ld. CIT(A) has erred in not invoking his powers u/s. 250(4) of the I.T. Act, 1961 to make such enquiries as he deems fit when he was convinced that the A.O. had not conducted any enquiry along the lines that the Commissioner of Income Tax,Kolkata-2 had directed him to.

That the appellant craves leave to add, delete, alter, modify or take new grounds of appeal in the course of appeal proceedings.”

Brief facts of the case are that the assessee is a private limited company engaged in the business of trading and investment in shares. It filed its return of income for the Assessment Year 2008-09 on 31/03/2009 declaring total income of Rs.730/-. Subsequently, the assessment was reopened by issuing notice u/s 148 of the Act and assessment completed u/s 147 read with Section 143(3) of the Act determining the total income of the assessee at Rs.31,926/-. This assessment order u/s 147/143(3) of the Act was examined by ld. Pr. CIT invoking the provisions of Section 263 of the Act and in the order u/s 263 dt. 26/03/2013, ld. Assessing Officer was directed to carry out the assessment proceedings afresh after examining the genuineness and source of share capital by conducting independent enquiry not through the assessee and also to examine the directors as well as change in the directorship and also to examine the source of realization from the liquidation of the assets shown in the balance sheet. In compliance thereto, ld. Assessing Officer carried out the assessment proceedings u/s 143(3)/263/147 of the Act. Notice u/s 133(6) were issued to which most of the replies were received directly from the share holders. All the other documentary evidence to explain the share capital of Rs.90,70,000/- and share premium charged @ Rs.90/- on the face value of Rs.10/-, total amounting to Rs.8,16,30,000/- were filed. The ld. Assessing Officer without pointing out any defect in these details made a general observation that all Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 3 these companies are not having real business and the transactions carried out by them are bogus in nature and accordingly, confirmed the addition u/s 68 of the Act at Rs.9,07,00,000/- coupled with the disallowance u/s 14A of the Act at Rs.52,174/-. Income assessed at Rs.9,08,52,900/-.

Aggrieved the assessee preferred appeal before the ld. CIT(A) and with the strength of documentary evidence as well as placing reliance on plethora of decisions contended that all the share applicants had sufficient net worth to subscribe to the share capital and share premium of the assessee company, all the share applicants are duly assessed to tax and have also passed through scrutiny proceedings by the respective juri ictional Assessing Officer. It was also submitted that, the ld. Assessing Officer assessed the share application money as unexplained cash credit merely disbelieving evidence adduced and without bringing any adverse material on record. The ld. CIT(A) after going through the details filed by the assessee came to a conclusion that whatever details the ld. Assessing Officer has called from the Assessing Officer has been duly supplied and ld. Assessing Officer had carried out the assessment proceedings on the directions given in the order u/s 263 of the Act and the assessee has successfully explained the source of share capital and share premium and thus do not call for any addition u/s 68 of the Act.

Aggrieved, revenue is now in appeal before this Tribunal.

Apart from raising the grounds challenging the addition deleted by the ld. CIT(A), the revenue has also raised a ground that even in case ld. Assessing Officer has not conducted sufficient enquiry as directed by the ld. Pr. CIT in the order u/s 263 of the Act, the ld. CIT(A) had sufficient powers u/s 250(4) of the Act to make such enquiry as he deemed fit, in case he was not convinced with the enquiries carried out by the ld. Assessing Officer. Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 4 The ld. Counsel for the assessee submitted that all the alleged share applicant companies are jamakharchi and shell companies not having regular business activities and are just used as conduit for routing of funds so as to provide bogus accommodation entries in the form of share capital and share premium. He further submitted that all the alleged share application companies have meagre income and no fixed assets so as to justify the regular business activity being carried out.

On the other hand, the ld. Counsel for the assessee firstly took us through the written submissions filed before the ld. CIT(A), thereafter relied upon the findings of the ld. CIT(A). Further, the ld. Counsel for the assessee referring to the paper book submitted that all the alleged share applicants have directly replied to the Assessing Officer to the notices issued u/s 133(6) of the Act and have also enclosed the ITR, documents of Ministry of Corporate Affairs, audited financial statements, bank statements. Reference was also made to the net worth of each of the share applicants appearing in the audited financial statements justifying the source of investments made in the assessee company. Reliance was placed on the following decisions:-

We have heard rival contentions, perused the material available on record and the case-laws cited by both the sides.

The revenue is aggrieved with the finding of the ld. CIT(A) deleting the addition made by the ld. Assessing Officer u/s 68 of the Act at Rs.9,08,00,000/- towards unexplained share capital and share premium. We notice that the assessee company was incorporated during the year under appeal. Initial capital of Rs.1,00,000/- was received from the promoter directors Mr. Kingshuk Talukder and Mr. Debarshi Das at Rs.50,000/- each. Further share capital of Rs. 90,70,000/- was raised by issuing 90,70,000 shares at a face value of Rs.10/- each at a premium of Rs.90/- per share which were subscribed by eleven (11) share applicant companies and a chart has been filed by the assessee before the lower authorities depicting the net worth in the audited balance sheet at the time of making the investment. The chart is reproduced for ready reference:-

JAIBALASUR TRADING PVT. AABCJ7540G 30,00,000 9,07,02,002 LTD. Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 6 5 LILY VANIJYA PVT. LTD. AABCL3503F 1,35,50,000 12,89,50,607 6 NILGIRI TIE-UP PVT. LTD. AACCN4975G 1,22,00,000 11,28,01,385 7 NIPPON SERVICES & AABCN0390G 1,00,000 43,13,45,710 HOLDINGS P. LTD. 8 SHIVANAND MERCHANTS AAKCS7744J 1,02,50,000 9,71,00,298 P. LTD. 9 SNOWDROP TIE-UP PVT. AALCS1461Q 1,35,00,000 13,69,50,000 LTD. 10 CYNOSURE DEALERS PVT. AADCC2651D 1,20,00,000 8,52,00,460 LTD. 11 MINIMART TIE-UP PVT. LTD. AAFCM1788H 1,45,00,000 15,20,30,000 9,07,00,000 1,48,03,68,206

We further notice that the case of the assessee was reopened by issuing notice u/s 148 of the Act and reassessment proceedings were carried out and no additions were made towards the alleged share capital and share premium by the ld. Assessing Officer in the order dt. 18/06/2010. The records of this reassessment proceedings were part of the revisionary proceedings carried out u/s 263 of the Act and the ld. Pr. CIT directed to carry out the assessment proceeding afresh by giving the following directions:-

In compliance to the directions given u/s 263 of the Act, ld. Assessing Officer issued notice u/s 133(6) of the Act to various shareholders to file the replies directly, to which there was necessary compliance. Alleged share applicants filed the reply directly to ld. Assessing Officer enclosing therewith the bank statement, audited financial statements, identity proof and relevant record of Ministry of Corporate Affairs, so as to prove the identity, creditworthiness and genuineness of the transactions. Further, ld. Assessing Officer mainly questioned the business activity of these shareholders noticing that they have meagre income, poor turnover and no regular business activity. Though the details filed by the assessee as well as the shareholders duly depicted that all these companies had sufficient net worth and investments in loans and advances and other current assets and investment companies working under the objectives provided under the memorandum and article of association. Further, we notice that ld. CIT(A) while dealing with the issue raised by the assessee challenging the addition u/s 68 of the Act called for a remand report which was received vide letter dt. 08/09/2017 and 17/01/2018. After perusing the contents of the remand report, details filed by the assessee, the ld. CIT(A) dealt with this issue observing as follows:- “5. GROUND NO. 1: Factual matrix I have gone through the Assessment Order, Grounds of Appeal and submissions of the assessee. From the record, it is noted that Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 8  The assessee company raised share capital amounting Rs. 9,07,00,000/- by way of issuing 9,07,000 equity shares having a face value of Rs. 10/- each.  The shares were issued at premium of Rs. 90/- aggregating to Rs. 9,07,00,000/-. These 9,07,000 shares were allotted to 11 share-holders and regarding this allotment, Form- 2 was filed by the assessee company before ROC.  It is also noted that during the year under consideration, the assessee company also made an investment to the tune of Rs. 9,07,00,000/-.  This investment was made by utilizing the funds received from the issue of shares.  During the course of Assessment proceedings, Books of Accounts, Bank Statement in original were produced and examined by the AO.  The assessee also produced other details/ documents etc.  The AO issued notice u/s. 133(6) of the I. T. Act, 1961 to the share- holders and all the share-holders made due compliance in respect of notice issued u/s. 133(6) of the I.T. Act, 1961.  Finally, the AO issued summons u/s. 131 of the I. T. Act, 1961 to the erstwhile Directors/Principal officers of the assessee company. However, these directors sought adjournment which was not granted by the AO.  On the basis of non-attendance of the Directors the Assessing Officer opined that the assessee has failed to prove the identity, creditworthiness and genuineness of the transaction. Presumptions made by the AO:  The entities who replied in response to the notices issued u/s. 133(6) are conduit companies.  assessee company had oriented its own money and routed it through the investor companies in the garb of share capital and share premium.  Finally, the AO concluded that the sum credited in the Books of Accounts of the assessee of Rs. 9.07 crores from these eleven shareholders and Rs. 1,00,000/- initial share capital is bogus.  The AO charged Rs. 9.07 crores from these eleven share-holders and Rs. 1,00,000/- initial share capital from the promoter directors to Income Tax being income of the assessee company for A.Y. 2008-09 u/s 68 of the I.T. Act, 1961.  The AO also made disallowances u/s. 14A of the I.T. Act, 1961 even though no income was earned which could have been claimed as exempt. The AO did so by way of referring to Board Circular No. 5/2014 dated 11.12.2014. DECISION : In this case, the assessment was completed u/s. 147 read with section 143(3). However, the said assessment was set aside by the Ld. CIT, Kolkata -2 u/s. 263 on 26.03.2013 with certain specific direction to the AO which have also Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 9 been mentioned by the AO in the assessment order also. As per the directions given by the ld. CIT-2, Kolkata the AO was to examine the genuineness and source of share capital in respect of each and every share holder :  By conducting independent enquiry not through the assessee.  The bank account for the entire period was to be examined in the form of verification to find out the money trail of the share capital.  The AO was supposed to examine the Directors as well as examine the circumstances which necessitated the change in the Directorship if applicable, and Verify the credential as Directors, and  Recheck logical conclusion regarding the controlling interest.  The AO was also directed to check the source of realization from the liquidation of asset from the Balance Sheet after change of Directors.  Finally, after conducting all these enquiries and verification the AO was supposed to pass a speaking order providing adequate opportunities of being heard to the assessee. Now, let us examine what AO has done in this case. a) The AO did not conduct any independent enquiry in respect of any share holder other than issuing 133(6) notices. b) These share-holders were already examined under previous proceedings when order under section 147 read with section 143 (3) was passed. c) The reply received against notice u/s. 133(6) was not examined at all and was kept on record. d) No adverse comments have been made by the AO regarding the information supplied by the investors into the company to the AO. e) The AO did not seek bank details either directly from the bank or from these share holders for the entire period. f) No money trail of the share capital has envisaged by the Ld. CIT, Kolkata - 2 was made by the AO. g) The AO was supposed to examine the Directors and the circumstances which necessitated the change in Directorship, however, the AO tried to examine the erstwhile Directors without examining the Current Directors of the company. h) The AO did not verify the credential of the current Directors. i) The AO did not examine what necessitated the change in the directorship. j) The ld. CIT-2, Kolkata envisaged in the order issued u/s. 263 that the AO must reach to a logical conclusion regarding controlling interest, however, nothing was done by the AO to find out the controlling interest in the assesse company. k) The AO was directed to examine the source of realization from the liquidation of assets shown in the Balance Sheet after the change of Directors, however, absolutely nothing was done by the AO in that direction. l) Finally, the Ld. CIT, Kolkata - 2 directed that AO (after conducting the enquiries and verification) would pass a speaking order and that too after giving adequate opportunity of being heard to the assessee. However AO did not follow this direction also - Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 10 From the above, it is noted that none of the directions of the Ld. CIT - 2, Kolkata were followed by the AO.

From perusal of the finding of the ld. CIT(A) as well as the decisions referred therein and the factual matrix of the case, we notice that the ld. Assessing Officer carried out the assessment proceedings as per the directions given u/s 263 of the Act and called for all the details from the share applicants directly. The assessee discharged its primary onus by firstly filing the details and secondly all these details were filed directly to the Assessing Officer by all the share applicants. So far as the promoter directors of the assessee company are concerned, they have only invested Rs.50,000/- each and were not summoned/questioned by the Assessing Officer and all the remaining eleven shareholders (list extracted above), had sufficient net worth for making the alleged investment in the share capital and share premium of the assessee company. The ld. Assessing Officer failed to consider the fact that all the shareholder companies are regularly Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 15 assessed to tax and most of them have passed through scrutiny proceedings u/s 143(3) / 147 of the Act, which proves the identity of the share subscribers and the genuineness of the transactions which are carried out through banking channels and of course the creditworthiness has been proved beyond doubt on the basis of net worth of the assessee company existing as on the date of making investment in the share capital of the assessee company. Though plethora of judgments and decisions have been referred to by the ld. CIT(A) in the impugned order as well as decisions referred by the ld. Counsel for the assessee, we would like to take note of the findings of this Tribunal in the case of M/s. Happy Structure Pvt. Ltd. (supra), dealing with the similar issue and similar facts and the same reads as follows:- Rival contentions heard. On a careful consideration on the facts and “5. circumstances of the case, perusing the papers on record and orders of the authorities below as well as case laws cited, we hold as follows.

In this case, there are two share applicant companies, these are M/s Aggressive Vincom Pvt. Ltd. and M/s Flabby Sales Pvt. Ltd. The documents that they have furnished are as follows: A. Aggressive Vincom Pvt. Ltd. (i) Copy of reply to the AO in response to notice u/s 133(6) (ii) Copy of IT Acknowledgment for the relevant A.Y 2012-13 (iii) Copy of the Annual Financial Statements for the year ended on 31.03.2012 (iv) Copy of the Letter of Confirmation along with Bank Statement evidencing the source of funds out of which monies were paid to the assessee (v) Copy of the Board Resolution consenting to invest in the assessee company along with PAN Card (vi) Copy of the Share Application Form Acknowledgment (vii) Copy of the Share Allotment Letter (viii) Copy of the share certificates issued by the assessee company to the share subscriber (ix) Copy of PAN Card B. Flabby Sales Pvt. Ltd (i) Copy of reply to the AO in response to notice u/s 133(6) (ii) Copy of IT Acknowledgment for the relevant AY 2012-13 (iii) Copy of the Annual Financial Statements for the year ended 31.03.2012 (iv) Copy of the Letter of Confirmation along with Bank Statement evidencing the source of funds out of which monies were paid to the assessee Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 16 (v) Copy of the Board Resolution consenting to invest in the assessee company along with PAN Card (vi) Copy of the Share Application Form Acknowledgment (vii) Copy of the Share Allotment Letter (viii) Copy of the share certificates issued by the assessee company to the share subscriber ix) Copy of PAN Card

The assessee also furnished copy of the assessment orders passed u/s 143(3) of the Act on 26.03.2015 in the case of Aggressive Vincom Pvt. Ltd. by ITO, Wd- 1(1), Kolkata bringing to tax the share capital and share premium allotted during the year. Similarly, in the case of Flabby Sales Pvt. Ltd., the assessment order passed u/s 143(3) dated 10.03.2015 by ITO,Ward-2(2), Kolkata has been filed wherein the entire share application money received by the assessee including share premium was brought to tax u/s 68 of the Act. The question is whether under such circumstances, i.e. when the share applicant companies have been taxed on the source of funds in their accounts then an addition can be made u/s 68 of the Act.

This Bench of the Tribunal under similar circumstances, in the case of DCIT vs. M/s. Maa Amba Towers Ltd.; ITA No.1381/Kol/2015; Assessment Year 2012-13, order dt. 12th October, 2018, had held as follows:- “3. Mr. Choudhury vehemently contends during the course of hearing that the Assessing Officer had rightly made the impugned addition since the taxpayer had failed to prove identity, genuineness and creditworthiness of the share premium money. He terms the impugned share subscription premium ₹690/- per share having face value of ₹10/- each as highly exorbitant. Case laws Sumati Dayal vs. CIT(1995) 214 ITR 801 (SC) and CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC) is further quoted during the course of hearing that the relevant evidence submitted during the course of assessment has to be considered as per the human probabilities by removing all blinkers. Our attention is thereafter invited to the relevant nuances of such share subscription routing involving multiple layers to plough back unaccounted monies back to the books. We find no merit in the Revenue's instant grievance in the light of relevant facts on record. There is no dispute about the assessee's having declared its share subscription premium from M/s Agrani Credit & Finvest Pvt. Ltd., Crown Mansion Pvt. Ltd., Liberal Infrastructure Pvt. Ltd., Darshan Enclave Pvt. Ltd., Snow Fall Impex Pvt. Ltd. involving corresponding sums of ₹27,60,000/-, ₹55,20,000/-, ₹82,80,000/- in case of third and fourth and ₹48,30,000/- in last entity's case; respectively totalling to ₹3,01,00,000/-. Case file suggests that the assessee has placed on record their income tax acknowledgement of the impugned assessment year 2012- 13, directors' report along with audited financial statements, explanation regarding source of investments, bank statements, share application forms and board's resolution(s) followed by their respective regular assessment orders pertaining to very assessment year u/s. 143(3) of the Act. Their Assessing Officer(s) made u/s 68 unexplained cash credits additions of share premium amounting to ₹67,03,00,000, ₹44,85,00,000/-, ₹24,42,00,000/- & ₹21,70,00,000/- in case of first four entities and accepted similar credits of ₹20,45,00,000/- to be genuine satisfying all parameters of identity, genuineness and creditworthiness. It can therefore be safely assumed that all these additions sums forming subject-matter of the impugned additions to be Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 17 accepted as genuine in respective investors entities' end as the source of the amount(s) in issue totalling to ₹3,01,00,000/-. Learned Departmental Representative fails to dispute that the same very amount cannot be added twice in payees and recipients' hands u/s 68 of the Act. We therefore see no reason to accept Revenue's instant former substantive ground. We affirm CIT(A)'s findings under challenge qua the instant former issue.”

This Bench of the Tribunal under similar circumstances, in the case of M/s C.P. Re-Rollers Ltd. vs. DCIT.; ITA No.1811/Kol/2017; Assessment Year 2013-14, order dt. 03.04.2019, had held as follows:- “46. We find that the Hon’ble Supreme Court in the case of M/s Earth Metal Electricals P Ltd vs CIT & Anr. reported in 2010 (7) TMI 1137 in Civil Appeal No. 21073 / 2009 dated 30.7.2010 arising from the order of Hon’ble Bombay High Court had held as under:- ORDER Delay condoned. Leave granted. Heard learned counsel on both sides. We have examined the position. We find that the shareholders are genuine parties. They are not bogus and fictitious. Therefore, the impugned order is set aside.

In the instant case before us, we also note that the share subscribing companies are duly assessed to income tax. The Ld AR had placed on record the copies of the assessment orders framed in the cases of the share subscribing companies, as noted above. It therefore cannot be disputed that the share subscribing companies are not in existence. From the assessment orders, it is noted that the share subscribing companies are duly assessed to income tax and their income tax particulars together with the copies of respective income tax returns with their balance sheets are already on record. We also find that the Ld. CIT(A) had categorically stated that the scrutiny assessments were framed on the share subscribing companies for the Asst Year 2010-11 which shows their existence is genuine and transactions carried out by them were the subject matter of examination by the income tax department in scrutiny proceedings. This fact has not been controverted by the Revenue before us.

We may gainfully refer to the judgment in the case of Pr. CIT Vs Paradise Inland Shipping (P) Ltd (84 taxmann.com 58) wherein the Bombay High Court had deleted similar addition on similar set of facts made on account of unexplained cash credits and the SLP filed by the Revenue against the judgment has been dismissed by the Hon’ble Supreme Court. The relevant extracts of the judgment is as follows:

We also rely on the following judgments of the Coordinate Bench of ITAT Kolkata, where based on same facts, and identical and common grounds and coordinate Bench deleted the addition: (1) M/s Jagannath Banwarilal Texofabs Pvt Ltd, in ITA No. 1762/Kol/2016, For A.Y. 2012- 13, order dated 26.10.2018. (2) M/s Wiz-Tech Solutions Pvt Ltd, in ITA No.1162/kol/2015,for A.Y. 2012-13, order dated 14.06.2018. 52. To conclude, Section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 21 shall be assessed as its undisclosed income. In the facts of the present case, both the nature & source of the share application received was fully explained by the assessee. We note that the share application money and share premium money which were received by the assessee company from the two share applicant companies viz: M/s. Prism Vintrade Private Limited, and M/s. Gannet-Vintrade Private Limited, during the period December, 2012 to March, 2013 had already been suffered disallowance under section 68 of the Act. As these two share applicant companies invested the same money in the assessee company, therefore, no further disallowance is warranted in the hands of the assessee company. Once taxed income cannot be taxed again. In the case of third company, M/s Haven Vincom Pvt. Ltd, the assessment, pertaining to the AY. 2010-11 was not revised by the Department. That is, M/s Haven Vincom Pvt. Ltd has raised share capital and share premium which has not been treated by the Department as cash credit under section 68 of the Act and has not been disallowed by the assessing officer in the assessment of M/s Haven Vincom Pvt. Ltd ( vide assessment order-paper book pg.173) . We note that M/s Haven Vincom Pvt. Ltd has utilized the same money ( which it received by raising share capital/premium and not disallowed by AO, u/s 68) to purchase the share capital and share premium in the assessee company (M/s C.P. RE Rollers Ltd) therefore it should not be disallowed under section 68 of the Act, in the hands of the assessee company, as the Department itself accepted genuine money in the hands of M/s Haven Vincom Pvt. Ltd. Hence, in the case of M/s Haven Vincom Pvt. Ltd, the identity, creditworthiness and genuineness have been proved beyond doubt. In case of Sushma Chawala for share application of Rs.4,22,500/- and share premium of Rs. Rs.4,22,500/-, the ld Counsel explained the identity, creditworthiness and genuineness therefore no disallowance can be made. Besides, the assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the these three share applicants by submitting the following documents and evidences: 1) Return of ROC, that is, form No. 2 submitted before R.O.C. 2) PAN Number copies of each share subscriber. 3) Copy of Balance Sheet, Profit and loss account of all share applicant companies. 4) Details of investments sold by all share applicant companies. 5).Transaction with the assessee was duly highlighted in the bank statement 6). Explanation along with evidence of source of source of the funds of the share applicant Companies. 7). Audited Accounts of the share holders. 8) Relevant address proofs / Form filed by the share applicants with ROC. 9). Income Tax Return of share applicant companies. 10) Copy of the Bank Statement of Share applicant companies where from the amount was debited. 11) Copies of Bank statement of the assessee company where the share application money and premium were credited. 12). Cheque Number, the amounts subscribed by shareholders along with the name of bank its branch address and the number of shares allotted to them with face value on the date of allotment. 13) Common Director of the share applicant companies ( who is director in assessee company as well as share applicant companies) appeared before the assessing officer in response to notice u/s 131 of the Income Tax Act and submitted documents and evidences before the AO. Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 22

In the result, the appeal of the assessee is allowed.”

Coming to the argument arise to the Ld. D/R that the share premium received was excessive, we find that no query has been done by the Assessing Officer in this regard. As regards the decision of Trenetra Commerce & Trade(P) Ltd. (supra), we find that the facts are totally different. In that case, out of 40 shareholders, 38 of them could not be found and two of them stated that they had no connection with the company and that they never applied for any shares and they were drivers by profession and they had not given any money. It was a case where identity and creditworthiness was not proved. The transactions were proved to be not genuine. In the case on hand both the companies have proved their identity and have confirmed the transactions and have disclosed the sources and the revenue has assessed the same in their hands. Further in the case of Trenetra Commerce & Trade(P) Ltd. (supra), Mr. K.P. Kedia has stated that he had filed the return of income reflecting undisclosed income of 7.10 crores on compulsion. This is not the fact in the case on hand. Thus, the facts of the present case are different from the facts on the case of Trenetra Commerce & Trade(P) Ltd. On the other hand, the decisions relied upon by the ld. Counsel for the assessee are applicable to the case on hand, as both the share-holder companies have been assessed tax u/s 143(3) of the Act and in this scrutiny assessment the source of fund had been brought to tax. Thus, we uphold the order of the ld. CIT(A) and dismiss the appeal of the revenue.

Similar is the view taken by the ITAT, Kolkata Bench of the Tribunal in the case of Satyam Smertex Pvt. Ltd. (supra). Thus, considering the facts and circumstances of the case, complete documentary evidence filed by the assessee in which no specific error has been pointed out by the ld. Assessing Officer, all the enquiries conducted have come to a logical and positive end Assessment Year: 2008-09 Tanishque Tradelink Pvt. Ltd. 23 by replies by the share applicants to the summons issued u/s 133(6) of the Act and also considering the fact that the assessee has proved the identity and creditworthiness of the share applicants and genuineness of the transactions and also following the decisions referred hereinabove, taking consistent view that under such similar facts and circumstances, addition u/s 68 of the Act is uncalled for, we confirm the findings of the ld. CIT(A) and dismiss Ground Nos. 1 & 2 raised by the revenue.

As far as Ground No. 3 & 4 are concerned that the ld. CIT(A) erred in not invoking his powers /s 250(4) of the Act, we fail to find any merit as the ld. CIT(A) has called for remand report which was received on two occasions and has duly considered the observations made by the revenue authorities in such remand report before arriving at the finding that the ld. Assessing Officer was not justified in making addition u/s 68 of the Act. Accordingly, Ground Nos. 3 & 4 are dismissed.

In the result, appeal of the revenue is dismissed.

""यथ" / The Respondent 3. संबंिधत आयकर आयु" / Concerned Pr. CIT 4. आयकर आयु" अपील / The CIT(A)- ( ) 5. िवभागीय "ितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाड" फाईल /Guard file.