COMMISSIONER OF INCOME TAX-VIII vs. SVP BUILDERS (INDIA) LIMITED

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 1 of 23

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 7 to 13 & 31 to 35

ITA 871/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

SVP BUILDERS (INDIA) LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

WITH

ITA 872/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

SVP BUILDERS (INDIA) LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

WITH

ITA 873/2015 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 2 of 23

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

SVP BUILDERS (INDIA) LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

WITH

ITA 874/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

SVP DEVELOPERS LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

WITH

ITA 875/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 3 of 23

Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

S.V. LIQUOR INDIA LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

WITH

ITA 876/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

S.V. LIQUOR INDIA LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

WITH

ITA 883/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 4 of 23

SVP BUILDERS (INDIA) LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

WITH

ITA 962/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

SVP DEVELOPERS LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

WITH

ITA 963/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

SVP BUILDERS (INDIA) LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 5 of 23

Aggarwal, Advocates.

WITH

ITA 964/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

SVP BUILDERS (INDIA) LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

WITH

ITA 965/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

S.V. LIQUOR INDIA LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

AND

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 6 of 23

ITA 966/2015

COMMISSIONER OF INCOME TAX-VIII

..... Appellant Through: Mr Kamal Sawhney, Senior Standing Counsel, Raghvendra Singh, Junior Standing Counsel, Mr Shikhar Garg and Mr Sharad Agarwal, Advocates.

versus

S.V. LIQUOR (INDIA) LIMITED

..... Respondent Through: Mr C. S. Aggarwal, Senior Advocate with Mr Prakash Kumar and Mr Rupinder Aggarwal, Advocates.

CORAM: JUSTICE S. MURALIDHAR JUSTICE VIBHU BAKHRU

O R D E R %

15.12.2015

CM No.30897/2015 in ITA No.962/2015 CM No.30899/2015 in ITA No.963/2015 CM No.30901/2015 in ITA No.964/2015 CM No.30904/2015 in ITA No.965/2015 CM No.30906/2015 in ITA No.966/2015

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 7 of 23

CM No.30898/2015 in ITA No.962/2015 CM No.30900/2015 in ITA No.963/2015 CM No.30902/2015 in ITA No.964/2015 CM No.30905/2015 in ITA No.965/2015 CM No.30907/2015 in ITA No.966/2015 3. For the reasons stated therein, the delay in re-filing the appeals is condoned.

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 8 of 23

said shareholders have been categorised as Table-I, Table-II and Table-III shareholders. Shareholder companies in Table-I were subjected to search under Section 132 of the Act. As regards shareholder companies in Table-II, proceedings were initiated under Section 153C of the Act against them consequent upon the search. Table-III comprised 74 shareholder companies whose identity and existence were not doubted since they were being regularly assessed to tax.

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 9 of 23

money into white. The broad general allegation was that in the course of the investigation undertaken by the Additional Director of Income Tax (Investigation), Ghaziabad, the SVP Group of companies did not produce the shareholders despite being served with notices for that purpose. It was alleged that the shareholders were not produced till finalization of assessment order, i.e., upto 21 months thereafter.

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 10 of 23

(i) As far as Table I shareholders were concerned, the AO noted that none of the companies were found to be operating at the given addresses. There was neither any display board bearing the names of these companies nor their books of accounts and other related accounts or documents found from such premises.

(ii) Moreover, even the persons available at the said premises namely Shri Bajrang Bahadur Dubey, Smt. Meena Goyal, Smt. Sushila Goyal and Shri Sachin Garg denied that any of the said companies existed at the said addresses. Further, despite letter dated 5th March 2009, and summons under Section 131 dated 20th March and 6th April 2009, the Assessee failed to produce the shareholders for cross examination.

(iii) As far as the Table III companies were concerned, many of the summons issued were returned unserved with the remarks "unknown" or "no such person". 24 of the companies submitted replies and some filed affidavits but did not submit any other details. The letter of M/s. Ganesh Buildtech showed that it had invested Rs. 10.50 crores in 16 of the companies figuring in Tables III and they in turn invested in the SVP Group companies. This was proof of the said companies acting as a "conduit channel". Further, the Assessee failed to produce the shareholders for cross-examination.

(iv) Also, the nexus of the shareholders and the beneficiary, i.e. the SVP Group, stood proved from the fact that shares were bought back by the individuals/concerns belonging to SVP Group. During the search, original share certificates worth Rs. 38 crores were found, This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 11 of 23

some of which were seized. During the search one Shri Vijay Jindal gave a statement that shares were allotted at Rs. 10 per share and later on bought back at Rs.2-3/- per share. The actual average purchase price was Rs. 1.04 per share. Thus shares that were initially issued by the SVP Group to the extent of Rs. 81.19 crores had been cheaply bought back for Rs. 10.38 crores and therefore the transactions were sham.

(v) Thus the Assessee had failed to prove the identity, genuineness and creditworthiness of the said shareholders. Accordingly, the aforementioned sums shown as investments in its shares for the AYs in question were added to its income for those AYs.

(i) The Revenue had been unable to deny the factual position that only 11 of the 20 companies in Table I had actually been searched. The material on record showed that directors of 18 companies of the 20 companies were examined by the AO in the course of the remand proceedings and found from the books of accounts that the share capital stands duly recorded in their books of accounts. Thus there was no justification for drawing an adverse inference particularly since no contrary material was placed on record by the revenue.

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 12 of 23

(ii) The statements of Shri Bajrang Dubey and Shri Sachin Garg when carefully examined did not show that the investor companies did not exist or did not in fact subscribe to the share capital of the SVP Group companies.

(iii) As far as Ganesh Buildtech was concerned, while no addition was made by the AO of the sum of Rs.28 lakhs invested by it in Five Vision for AY 2006-07 and Rs. 1,57,27,500 in AY 2007-08, he added the sum of Rs. 1,74,75,000 received from it in AY 2007-08. This apparent contradiction showed that the addition was made without appreciating the complete facts on record.

(iv) The decision of this Court in CIT v. M/s. Nova Promoters and Finlease (P) Ltd. 342 ITR 169 (Del) was distinguishable on facts since in that case two directors of the shareholder companies admitted to maintaining benami accounts and providing accommodation entries, whereas in the present cases there were no such statements. Also, here the AO did not take any steps to rebut the confirmation and evidence tendered by the shareholders.

(v) The common address of shareholders was not a valid basis to disregard the claim of the Assessee in view of the decision of this Court in CIT v. Winstral-Petrochemicals Pvt. Ltd. 330 ITR 603 (Del).

(vi) The subsequent sale of the shares subscribed was not germane to the question of the genuineness of the share capital amount received by the Assessees. Once the capital raised stood explained, the issue of This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 13 of 23

disinvestment by the shareholder subsequently was a non-issue. The addition if at all was to be examined in the hands of the person purchasing the shares.

(vii) There was no material to support the Revenue's case that the 'on- money' collected in cash was routed back into the SVP Group companies in the form of share application money and later reinvested in purchase of further lands for new projects.

(viii) There was no material to conclude that some of the investors were 'paper' companies. They had been regularly assessed to tax and had produced their books of accounts during their respective assessment proceedings to show that they had made the investment in question. This had been accepted by the CIT (A) in their assessments by deleting the additions made of the said sums to their income by the AO concerned by holding that the additions if at all should be made in the hands of the beneficiaries. In the appeals filed in those cases, the Revenue had contended that the additions ought to have been sustained. Thus, the stand of the Revenue was contradictory and untenable.

(ix) The Assessee had discharged its primary onus of proving the identity, genuineness and creditworthiness of the said shareholders.

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 14 of 23

Act. In the instant case, it is undisputed that all the 106 shareholders are corporate entries having been incorporated under the Companies Act. These shareholders are also assessed to tax. The documentary evidence for all the shareholders placed on record includes confirmation, affidavits of directions, returns of income of shareholders, bank statements of shareholders, board resolutions, certificate of incorporation and, Memorandum of Association of shareholder companies. The Assessing Officer issued summons under section 131 of the Act to such shareholders who then independently confirmed that they have only subscribed to the share capital of the appellant companies. No further investigation was carried out by the Assessing Officer during the course of assessment proceedings in respect of such share capital received by the appellant companies. The finding recorded in the order of assessment that the appellant the shareholders had been directed to be produced during the course of assessment proceedings, has been admitted to be factually incorrect both in the remand report by the Assessing Officer and further in the written submission filed before the Ld. CIT DR. Further investigation was also carried out by the Ld. CIT(A) to verify the genuineness of the capital and the evidence led by the appellant during the remand proceedings. He had directed the appellant to produce 7 directors of 39 shareholders companies. Out of 7 directors, 6 directors had been produced whose statements had been recorded and in their statements, they have duly deposed and confirmed that they have subscribed to the capital of the appellant companies. These directors had not only produced the books of accounts that source of the shareholders companies but also established from such books of accounts that source of investment was duly recorded in the books of such companies. No other evidence placed on record to rebut the documentary evidence placed by the appellant to support the share capital received by the appellant companies. In such circumstances, it has to be held in terms of the judgment of the Hon'ble Supreme Court in the case of Lovely Exports (supra) and Hon'ble jurisdiction Allahabad High Court in the case of Jay Dee Securities and Finance Ltd. (supra) and M/s Misra Preservers This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 15 of 23

Pvt. Ltd. (supra) the initial burden which lay upon the appellants to establish the source of the share capital received stands duly discharged.”

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 16 of 23

were only in the form of management of fund rotation in the garb of share application money invested in each other with a view to artificially inflate their creditworthiness; that the Assessee bought back its own shares at a very low price; that the shares allotted at the face value of Rs.10/- were transferred in the names of individuals/concerns belonging to SVP Group at a meagre price ranging from Rs.0.50 to Rs.2.00 per share; that the persons available at the premises during the search of the Table-I companies denied the existence of such companies; that the cash of Rs.2,23,40,000/- was found during the search operation from the residence of the Directors of the Assessees and the fact that it had received Rs.44.15 crore in cash as share application money was ignored; that the decision in CIT v. Nova Promoters and Finlease (P) Ltd. (supra) was wrongly distinguished and the decision of the Supreme Court in CIT v. Lovely Exports (P) Ltd. 216 CTR 195 (SC) was distinguishable on facts.

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 17 of 23

ii) PAN of the Investor iii) Ward of the Investor iv) Bank account details of the investors v) Detail of amounts received and mode of receipt cheque no. date of cheque; amount of cheque vi) Copy of certificate of incorporation of the investor vii) Copy of ITR viii) Copy of Share Application form ix) Copy of Board resolution x) Confirmation in the affidavit by the investor xi) Copy of the letter with enclosures submitted by the investor companies in response to the summon u/s 131 of the Act.”

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 18 of 23

the date of the search and commenced their business operations at least 5-6 years earlier thereto. It has been pointed out that as far as SVPB is concerned, the following details were furnished: “Details/Evidence of 20 share holders contributing Rs. 10,96,00,000/- of Table I in A.Y. 2003-04 to 2009-10 ; 12 share holders contributing Rs. 8,26,00,000/- of Table 11 in A,Y. 2003-04 to 2009-10; & 44 share holders contributing Rs.15,85,50,000/- of Table III in A.Y. 2003-04 to 2009-10 and evidence filed before AO in respect of these shareholders.”

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 19 of 23

that this money in fact belongs to certain other entities whose source has not been explained by the Assessees. As noted by the ITAT in the assessment proceedings of the investor companies, the monies invested were sought to be added as income of those companies by the AOs. The said additions were deleted by the CIT (A) in their cases holding that the additions if at all should be made in the hands of the beneficiaries. The Revenue then filed appeals in the ITAT insisting on the additions being sustained. Thus there is no clarity in the stand of the Revenue in these cases.

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recorded therein. The Revenue on the other hand did not produce any further evidence to dispute the above evidence produced by the Assessees.

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 21 of 23

Pvt. Ltd., (ii) United Head Hunters Pvt. Ltd. and (iii) Wellset Pharma & Drugs Pvt. Ltd. have been shown to be filing returns and being assessed on a regular basis. Some of them have been shown to be in existence even before the incorporation of the Assessee. Indeed the Revenue was unable to produce material to substantiate its case that the genuineness and creditworthiness of the investors and the source of the money received by the Assessee by way of investments in the AYs in question was not satisfactorily explained by the Assessees. Also, the ITAT rightly distinguished the decision in CIT v. M/s. Nova Promoters and Finlease (P) Ltd. (supra) in its application to the facts of the present case.

(Civil) CC 15640 of 2012 (CIT v. Kamdhenu Steel & Alloys Limited). In all the above three decisions the Supreme Court had affirmed the corresponding decisions of this Court including CIT v. Divine Leasing and Finance Ltd. 299 ITR 268. Reference was also made to the decisions of this Court in CIT v. Sophia Finance Ltd. (1994) 205 ITR 98 (FB) (Del), CIT v. Dolphin Canpack Ltd. 283 ITR 190, CIT v. Kamdhenu Steel & Alloys Ltd. 206 Taxman 254, Sarthak Securities Co. (P) Ltd. v. ITO 329 ITR 110, CIT v. Nipun Builders and Developers (2013) 350 ITR 407 (Del) and CIT v. N.R. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 22 of 23

Portfolio Pvt. Ltd. (2014) 206 DLT 97 (DB).

ITA Nos.871, 872, 873, 874, 875, 876, 883, 962, 963, 964, 965 & 966 of 2015 Page 23 of 23

analysis of the facts or application of the law governing Section 68 of the Act suffers from any legal infirmity.

S. MURALIDHAR, J.

VIBHU BAKHRU, J. DECEMBER 15, 2015 b’nesh This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:45:22