DCIT-CC-7(3), MUMBAI , MUMBAI vs. SHRI MAJNI KARAMSHI PATEL, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI GAGAN GOYAL, ACCOUNTAT MEMBER ITA No. 6128/Mum/2019 (A.Y: 2014-15) DCIT, CC-7(3) Vs. Shri Manji Karamshi Room No. 655, Patel Aayakar Bhavan, Office No. 1, Patel M.K.Road, Bhavan-29, Vijaywadi, Mumbai.-400020. Dr. Nagindas N Shah Lane Chira Bazar, Mumbai – 400002. �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AABPP0130D Appellant .. Respondent CO No. 45/Mum/2021 (A.Y: 2014-15) Shri Manji Karamshi Vs. DCIT, CC-7(3) Patel Room No. 655, Aayakar Office No. 1, Patel Bhavan, Bhuvan-29, Vijaywadi, M.K .Road, Dr. Nagindas N Shah Mumbai-400002. Lane Chira Bazar, Mumbai – 400002. �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AABPP0130D Appellant .. Respondent

Assessee by : Shri.Rushab Mehta.AR Revenue by : Shri .T .Shankar.DR

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Date of Hearing 15.06.2022 Date of Pronouncement 03.08.2022 आदेश / O R D E R PER PAVAN KUMAR GADALE, JM: The revenue has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-49, Mumbai passed u/s 143(3) r.w.s 147 of the Act and the assessee has filed the cross objections. For the sake of convenience, we shall take up the revenue appeal in ITA No. 6128/Mum/2019 as a lead case and the facts narrated. The revenue has raised the following grounds of appeal:

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assessment, the A.O has issued notice u/s 148 of the Act. In compliance to the notice the assessee has filed the return of income on 22.06.2017 disclosing a total income of Rs.61,68,670/-.

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M/s Landmark Suppliers P Ltd of Rs. 80 lakhs and the interest component is Rs.3,51,120/-. The assessee has submitted the Audited financial statements and others evidences to substantiate the creditworthiness, identity and genuineness of the investors .The assessee has submitted the details referred at Para 6.2 of the AO order, whereas the AO has dealt on the facts with respect to transactions and financial statements. Similarly in respect of unsecured loan from M/s Kingfisher Properties P Ltd ,the A.O observed that there is no creditworthiness of this company and dealt on the material information filed by the assessee in respect of unsecured loan of Rs.95 lakhs and interest expenditure of Rs. 3,20,120/-. Finally the A.O was not satisfied with the evidences/information and made addition of unsecured loans and interest under section 68 of the Act and assessed the total income of Rs.2,86,14,290/-and passed the order u/s 143(3) r.w.s 147 of the Act dated 22.12.2017.

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submissions of the assessee and judicial decisions. The CIT(A) has up held the validity of the reassesseement proceedings and on merits has observed that the assessee has discharged the burden by submitting the requisite information/details and the onus lies on the A.O. to make the enquiries and deleted the addition. The CIT(A) observations on the submissions of the assessee at page 11 Para 7.2 to 20 of the order are read under :

7.2 During the course of appellate proceedings, the Learned Counsel for the appellant made the following submissions: "Appellant's Submission A. Onus discharged by the appellant Documentary Evidences Filed 1. The appellant had submitted following documents/details during the assessment proceedings to explain fully the existence, identity and credit worthiness of the investor companies and genuineness of the transaction entered wit ire companies: - a) Copy of ITR acknowledgement of the alleged lenders for the year under consideration. (Please refer pg. no. 50,76 & 99 of paper book)

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b) Copy of duly signed ledger confirmation of the alleged lenders. (Please refer pg. no. 49,75 & 98 of paper book)

c) Copy of Balance Sheet & Profit & Loss account of the alleged lenders for the year under consideration. (Please refer pg. no. 53-67, 79-95 & 101-116 of paper book)

d) Copy of bank statements of the alleged lenders highlighting the loans given to the appellant. (Please refer pg. no. 51-52, 77-78 & 100 of paper book)

2 Your Honour would appreciate that on submission of the documents mentioned in the preceding paragraph, the appellant has duly discharged its onus to substantiate the alleged transaction viz:

a) Identity- TR acknowledgement of the alleged lenders

b) Genuineness - Confirmation from the alleged lenders

C) Creditworthiness - Annual accounts along with the copy of bank statement highlighting the amount received from the alleged parties

Your Honour may appreciate that the loans are interest bearing loans which is evident from the ledger \confirmation submitted above. Your Honour may also note that the principal amount alongwith the interest on the same has been fully repaid by the appellant in AY 2015-16 which proves the genuineness of the transaction undertaken by the appellant. The bank statement reflecting the repayment is attached at pg. no. 68, 96-97 & 117 of the Paper Book. Further, even today the status of the lender companies is Active on MCA21 website, attention is drawn to pg. no. 118 - 121 of Paper Book.

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B. Business credentials of the lenders

M/s. Galore Suppliers Private Limited

Particulars Amount Share Capital 7,04,47,700 Share suspense A/c,, 4,03,17,250 Reserves & Surplus, 84,25,86,913 Total 95,33,51,863 The turnover of the alleged company for the year under consideration was Rs. 19,83,33,094, profit was Rs. 83,057 and the returned income was 83,060 The Taxes paid by the company was Rs. 37,23,091 (Copy of ITR V and Annual Accounts enclosed at pg no.50 & pg no. 53-67 of Paper Book)

The lender is engaged in the business of trading of shares. Your Honour may note that the income from such type of business is fluctuating as it is based on market prices of the shares. The market price of the shares keeps on fluctuating based on the various factors which are beyond the control of the concerns /appellant. Thus, it may not be possible for the concerns to earn handsome income / profits in ever year and therefore, any transactions entered by the concerns cannot be regarded as not genuine merely based on the low income / profits earned by them. Further, the lender company has also eared Interest income of Rs. 5,97,79,902, hence; low income alone cannot be the decisive factor.

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M/s Landmark Suppliers Pvt Ltd (amalgamated with M/s SK Stock Dealers Pvt Ltd)

Particulars Amount Share Capital 6,82,92,000 Share suspense A/c,, 3,79,26,000 Reserves & Surplus, 85,29,51,209 Total 95,91,69,209

The turnover of the alleged company for the year under consideration was Rs.20,71,65,690, profit was (34,159) the returned income was Rs. (32,964) The Taxes paid by the company was Rs. Nil (Copy of TR V and Annual Accounts enclosed at pg no.76and pg no. 79-95of Paper Book).

The lender is engaged in the business of trading of shares. Your Honour may note that the income from such type of business is fluctuating as it is based on market prices of the shares. The market price of the shares keeps on fluctuating based on the various factors which are beyond the control of the concerns / appellant. Thus, it may not be possible for the concerns to earn handsome income / profits in ever year and therefore, any transactions entered by the concerns cannot be regarded as not genuine merely based on the low income / profits earned by them. Further,

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the lender company has also earned Interest income of Rs. 5,60,32, 780, hence: low income alone cannot be the decisive factor.

M/S. Kingfisher Properties Private Limited

Share capital - 50,94,397

Reserves & Surplus 99, 56, 92, 407

Total 1,00,07,86,804

The turnover of the alleged company for the year under consideration was Rs.97,58,05,678, profit was Rs.2.91.992/- the returned income was Rs. 90,225/- The Taxes paid by the company was Rs. 19,61,315/- (Copy of ITR V and Annual Accounts enclosed at pg no. 99 and pg no. 101-116 of Paper Book).

The lender is engaged in the business of trading of shares. Your Honour may note that the income from such type of business is fluctuating as it is based on market prices of the shares. The market price of the shares keeps on fluctuating based on the various factors which are beyond the control of the concerns / appellant. Thus, it may not be possible for the concerns to earn handsome income / profits in ever year and therefore, any transactions entered by the concerns cannot be regarded as not genuine merely based on the low income / profits earned by them. Further, the lender company has also earned Interest income of Rs. 2,15,21,809, hence; low income alone cannot be the decisive factor.

C. Allegation of High Premium fetched by Lender Companies 3. Further, the Id. A.O. has mentioned that the lender companies have issued equity shares at premium

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which cannot be explained by any logic of commercial expediency as to why any investor will invest such a huge premium in a company which does not have any accumulated profits or any networth of its own.

In regard to the above, it may be noted by Your Honour that it is the prerogative of the Board of Directors of a company to decide the premium amount and it is upon the shareholder whether they want to the subscribe to the shares or not of the company. The Id. A.O. cannot jump to the conclusion that the alleged lender company is not capable of raising share capital at such a huge premium only due to the fact that it does not have accumulated profits or any networth of its own.

Attention is invited to the decision given by the H'nble Madhya Pradesh High Court in the case of PCIT vs. Chain House International (P) Ltd ITA No. 112/2018 which was also affirmed by the H'ble Supreme Court on 18th February 2019 which held as follows:

...52. Issuing the share at a premium was a commercial decision. It is the prerogative of the Board of Directors of a company to decide the premium amount and it is the wisdom of shareholder whether they want to subscribe the shares at such a premium or not. This was a mutual decision between both the companies. In day to day market, unless and until, the rates is fixed by any Govt. Authority or unless there is any restriction on the amount of share premium under any law, the price of the shares is decided on the mutual understanding of the parties concerned.

.....53. Once the genuineness, creditworthiness and identity are established, the revenue should not justifiably

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claim to put itself in the armchair of a businessman or in the position of the Board of Directors and assume the role of ascertaining how much is a reasonable premium having regard to the circumstances of the case.

.....54. There is no dispute about the receipt of funds through banking channel nor there is any dispute about the identity, creditworthiness and genuineness of the investors and, therefore, the same has been established beyond any doubt and there should not have been any question or dispute about premium paid by the investors therefore, unless there is a limitation put by the law on the amount of premium, the transaction should not be questioned merely because the assessing authority thinks that the investor could have managed by paying a lesser amount as Share Premium as a prudent businessman.

Thus, from a reading of the above, it is crystal clear that a high premium raised by the company having low profits cannot be the sole reason in order to conclude that the lender company is not credit worthy. The amount of premium to be raised is a commercial decision to be taken by the company and is not governed by any law and hence cannot be interfered. The appellant has no control over the premium charged by the lender company. Infact it has duly complied with the three ingredients of section 68 of the Act substantiating the transaction with the alleged lender companies and hence the addition of Rs. 2.15.00.000/- received from the lender companies cannot be sustained.

D. Low Income cannot be the decisive factor

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any creditworthiness. In fact, the businesses of these lender companies is that of trading in shares and financing due to which income from such type of business is fluctuating as it is based on market prices of the shares. The market price of the shares keeps on fluctuating based on the various factors which are beyond the control of the concerns / appellant. Thus, it may not be possible for the concerns to earn handsome income / profits in ever year and therefore, any transactions entered by the concerns cannot be regarded as not genuine merely based on the low income / profits earned by them. In so far as the contention of the ld. Assessing Officer, in respect of low profit shown by the lender companies are concerned, we would like to draw Your Honour's attention to the decision of the Hon'ble Delhi High Court in the case of CIT v. Vrindavan Farms (P) Ltd (ITA No. 71/2015) in which the sole basis for the revenue to doubt the creditworthiness was the low income as reflected in the return of income. It was observed by the ITAT that the AO had not taken any investigation of the veracity of the documents submitted by the assessee. Hence, the departmental appeal was dismissed by the Hon'ble High Court.

E. Compliance to notice u/s.133(6)

5 Your Honour's attention is invited to the fact that during the course of assessment proceedings, notice u/s. 133(6) of the Act was issued by the Id. Assessing Officer to the lenders - M/s. Galore Suppliers Put Ltd, M/S. Landmark Suppliers Pvt Ltd and M/s. Kingfisher Properties Pvt Ltd. We have also been informed that the aforesaid lender has responded to the said notice issued us. 133(6) wherein it has confirmed the loan having been granted to the appellant and also provided the details and documents called for by the Id. Assessing Officer. Thus, it is evident

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that the lender has also confirmed the transaction with the appellant and provided documents to establish the genuineness and creditworthiness of the loan. Hence, even on inquiry nothing adverse appears to have been found by the Id. Assessing Officer as there is no whisper about the same even in the assessment order.

F. Reliance on Retracted Third-Party Statements

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shareholder nor director of the alleged lender companies i.e. M/s. Galore Suppliers Pvt Ltd, M/s. Landmark Suppliers Pvt Ltd and M/s. Kingfisher Properties Pvt Ltd. and therefore do not have any locus standi to give any statement in relation to the alleged lender companies and therefore such a statement does not have any evidentiary value to make any relevant conclusions against the appellant. Also, a copy of the statements relied upon by the Id. A.O has not been provided to the appellant. (For directorship status of the alleged lenders on MCA21, attention is drawn to pg no. 118-121 of the Paper Book)

G. Man-providing of copy of Statements relied upon

the Id. Assessing Officer to provide the copy of the statements which formed the basis of making the addition vide submission dated 15.12.2017 and vide objection dated 05.07.2017. However, the said information was never provided to the appellant. The Id. Assessing Officer erred in law by not providing the appellant with all the evidences used against him and not following the principles of matural justice. In this regard, it is most respectfully submitted that any evidence used at the back of the appellant does not have any evidentiary value and cannot be therefore used or held against the appellant. In this regard, Your Honour may note that section 142(3) of the Act provides that an opportunity of being heard must be given to the assessee in respect of material gathered and proposed to be utilised for the purpose of assessment. Attention is also invited to the decision of the Hon'ble Rajasthan High. Court in the case of CIT v. Lalpuria Construction Pvt Ltd [2013] 215 taxman 12 (Raj.) wherein

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the court has held that oral statements of third parties which were never confronted by assessee and no documentary evidence was supplied to the assessee could not be considered in making addition u/s. 68 on account of allegation of accommodation entry. Your Honour would appreciate that the Id. Assessing Officer has relied on the information given by the DGIT (Inv.) without appreciating that the same cannot be used against the appellant without providing statements wherein the alleged party has stated that he has provided accommodation entry to the appellant and therefore such statements cannot be utilized at the back of the assessee without providing any copy thereof to rebut the same.

Attention is invited to sub section (3) of section 142 of Income Tax Act as follows:

(3) The assessee shall, except where the assessment is made under section 144, be given an opportunity of being heard in respect of any material gathered on the basis of any inquiry under sub- section (2) 2 or any augit (under sub- section (2A)] and proposed to be utilised for the purpose of the assessment."

Since, the appellant has not been provided with the statements of the alleged entry providers on the basis of which the Id. A.O. has placed reliance to treat the alleged unsecured loans received as sham transactions, no conclusion could have been taken by the ld. A.0. in isolation without any corroborative and cogent evidence against the appellant.

H. General Confession cannot be relied upon

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appellant has accepted any accommodation entries from the alleged lenders. The Id. Assessing Officer has merely relied on the confession made by Shri Beni Prasad Lahoti and Shri Praveen Agarwal. All these statements are general in nature. In this regard, Your Honour's attention is drawn to the judgement of the Hon'ble Bombay High Court in the case of CIT v. Uttamchand Jain [2009] 182 Taxman 243 (Bom) as follows:

The Tribunal had recorded a finding that the statement of T recorded on 31-3-2000 was a general statement and nowhere in the said statement it was recorded that the transaction with the assessee was not genuine. On evaluation of the evidence on record, the Tribunal had arrived at a finding that the assessee had successfully shown the existence of diamond jewellery prior to the sale, the person to whom it was sold and also the consideration received and, therefore, the Assessing Officer was not justified in making the addition. Thus, the decision of the Tribunal was based on appreciation of evidence.

Your Honour may also note that in relation to re-opening, the Hon'ble Apex Court in the case of ITO v. Lakhmani Mewal Das [1976] (103 ITR 437) (SC) has held that a general confession by a person that all his transactions are bogus or that he has indulged only in bogus transactions, more particularly, when the assessee has not been specifically named in the confession, cannot be used against the assessee.

a. The Mumbai Tribunal in the case of Shaf Broadcast (P.) Ltd. v. ACIT [ITA no. 1819 (Mum) of 2012, dated 17-4-131

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(Mum.)has held that the statement on which reliance has been placed by the Assessing Officer, is a general statement and there is no specific reference to the assessee's transaction and the year of the assessment and accordingly the same could not be the basis of addition.

b. The Calcutta High Court in the case of S. P. Agarwalla alias Sukhdeo v. ITO [19831 5 Taxman 299 (Cal.) has held that in the confession statement, P did not name the assessee as one who had obtained bogus loans. There was, therefore, no direct nexus or live link between P's confession and the formation of the ITO's belief that the assessee's income had escaped assessment. In the absence of such a nexus or link, the said confessional statement could not constitute relevant material justifying the reopening of assessment.;

c. The Chandigarh Tribunal in the case of ITO v. Aggarwal Steel Traders [1994] 77 Taxman 95 (Chd.) (Mag.) has held that the statement of 'S' could not become the basis for making addition; since on one hand, that was not a statement recorded in the assessee's case and, on the other, that statement was of a general character and did not specify the fictitious nature of the transaction in respect of the assessee;

d. The Madras Tribunal in the case of ITO v. Central Finance Co. [1982] 13 TTJ 248 (Mad). Has held that merely on the basis of general statement given by hundi bankers that they were indulging in hawala hundi transactions, in absence of specific statement that any of the transactions with assessee was hawala hundi, reopening of assessment was not justified.

I Non-granting of Cross Examination

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12 The appellant despite specific requests vide submission dated 15.12.2017 and vide objection dated 05.07.2017 at the time of assessment proceedings was not provided with an opportunity to cross examine the party. In this regard, Your Honour's attention is invited to the recent decision of the Hon'"ble Apex Court in the case of M/s.Andaman Timber Industries vs. CCE (Civil Appeal No. 4228 of 2006) (SC) wherein it was held as under:

Failure to give the assessee the right to cross-examine witnesses whose statements are relied upon results in breach of principles of natural justice. It is a serious flaw which renders the order a nullity.

Attention is invited to the decision of the Three Hon'ble Judges of the Hon'ble Supreme Court in the case of Tin Box Company v. Commissioner of Income-tax, 249 ITR 216 (SC), wherein the Hon'ble Lordships held as under :-

" It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact- finding authority, that reads thus:

"We will straightaway agree with the assessee's submission that the Income-tax Officer had not given to the assessee proper opportunity of being heard."

That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of setting out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing

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authority for fresh assessment after giving to the assessee a proper opportunity of being heard."

J. No evidence of any cash being exchanged

"To hold otherwise, there should be some evidence in the possession of the revenue. Suspicion, however strong, cannot take the place of evidence and that alone cannot be the criteria for deciding the matter. Though search was conducted during the period under consideration, yet nothing incriminating was found during the search action. There was no evidence to show that the money had come back to the assessee or claim of the payment was bogus.

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In such circumstances, for the subsequent period to hold that the entire purchase was bogus was a conclusion that was very difficult to arrive at.

K. Nothing incriminating found in course of search/ survey conducted on 09.10.2014:

L Case laws relied upon by the Assessing Officer

The Id. A. O. has relied upon the decision of the H'ble Supreme Court in the case of Navodaya Castle (P) Ltd. vs. CIT (2015) 230 Taxmann 268 wherein it has upheld the order of the H'ble High Court wherein it was held that certificate of incorporation, PAN etc. were not sufficient for purpose of identification of subscriber company when there was material to show that subscriber was a paper company and not a genuine investor.

He also relied upon the decision of the H'ble Calcutta High Court in the case of Precision Finance Pvt. Ltd. (208 ITR

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465) where it was held that mere proof of identity of creditor or that the transactions were by cheque is not sufficient.

Your Honour may appreciate that the above decisions relied upon by the Id. Assessing Officer in the impugned order are completely on distinguishing facts and not applicable to the assessee and the most important fact that nothing incriminating was found during the course of search conducted on 09.10.2014.

M. Case laws relied upon by the assessee

Your Honour's attention is invited to the fact that the addition u/s. 68 of the Act cannot be made merely on the basis of uncomforted third parties when the assessee has discharged the onus cast upon him u/s. 68 of the Act. For this proposition, reliance is sought to be placed on the following judicial precedents:

CIT v. Paradise Inland Shipping Pvt Ltd (TA No. 66 of 2016) (Bom HC) 9. In this case, it was observed that when the Assessing Officer initiated reassessment on ground that shares of assessee-company were purchased by fictitious companies which were not in existence and Assessee in support of its stand about genuineness of transaction entered into with such companies had produced voluminous documents which included assessment orders, the burden would shift on revenue to establish their case. The SLP filed against the said order of the High Court is also dismissed by the Hon'ble Apex Court in [2018] 93 taxmann.com 84 (SC).

b) ITO v. M/s. Sreedham Constructions Pvt Ltd. [ITA No. 3754 to 3756/Mum/2017]

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In view of the above factual and legal discussion and considering the latest decision of Hon'ble Jurisdictional High Court referred above, we have noted that the ld Commissioner (Appeals) passed the order after considering the entire material available before him. We have seen that the order passed by Id. Commissioner (Appeals) is reasoned one and does not require any further interference at our end. The facts of various decision relied by Id. DR in Rajmandir Estate Pvt Ltd (supra), in CIT Vs Jansamparak Advertising and Marketing (P) Ltd (supra) in CIT Vs N.R. Portfolio (supra), though is at variance on facts and is of non- jurisdictional High Court. The decision of jurisdictional High Court in PCIT Vs Paradise Inland Shipping (P) Ltd (supra) is binding precedent on this Tribunal. In the result the grounds of appeal raised by the revenue is dismissed.

c) Prabhatam Investments Pvt. Ltd. v. ACIT [ITA No. 2525/Del/2015]

"18.... The assessee on the basis of these documentary evidences have been able to establish that both the shareholders are genuine parties and they are not bogus and fictitious. The decision of the Supreme Court in the case of M/s. Earthmetal Electrical P. Ltd. (supra) clearly support the case of the assessee. It may also be noted that the facts considered in this case by ITAT, Mumbai Bench and Hon'ble Bombay High Court (copies of the judgement are placed on record) are not on better footing as brought on record in the case of the assessee. The facts of the case of the assessee and material evidence brought on record are on better footing as compared to the facts considered in the case of M/s Earthmetal Electrical P. Ltd. (supra). The assessee specifically pleaded before the CIT(A) and filed the details supported by evidence that net worth of both

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the investor companies are very substantial so as to make investment in assessee company. They were having sufficient funds with them to make investment in assessee company. The material produced by the assessee have not been doubted and rebutted by the authorities below.

17.1. The authorities below heavily relied upon the statement of Mr. Suresh Kumar Jain who is stated to be associate of KJS Group of cases whereas the assessee company was distinct from the KJS Group. The statement of Mr. Suresh Kumar Jain recorded u/s 132(4) referred to accommodation entry provided to the KJS Group. The statement of Mr. Suresh Kumar Jain was not recorded during the course of search in the case of the assessee. The statement of Mr. Suresh Kumar Jain has not been confronted to the assessee during the assessment proceedings. He was not produced at assessment stage to allow cross-examination by the assessee. No right to cross- examination have been given to assessee to cross-examine the statement of Mr. Suresh Kumar Jain, therefore, his statement cannot be read any evidence against the assessee. We rely upon the decision of the Hon'ble Supreme Court in the case of Kishinchand Chellaram vs CIT 125 TR 713 (SC) in which it was held that any material collected at the back of the assessee and not confronted and no opportunity given to cross-examine, such material cannot be relied upon against the assessee. It may also noted here that Mr. Suresh Kumar Jain has later on retracted from the statement on which no adverse finding has been given....

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banking channels and furnished complete details of the shareholders, no addition could be made under section 68 of the Income-tax Act, 1961, in the absence of any positive material or evidence to indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represented the company's own income from undisclosed sources.

18.4. ... Copies of the assessment orders in their cases are filed on record. They have also net worth to make investment in assessee company, therefore, low income earned by investors company by itself is no ground to treat the share application money received by the assessee as not genuine. The decision of the Delhi High Court in the case of CIT vs Vrindavan Farms Pvt. Ltd. (supra) squarely apply to the facts of the case. The authorities below, therefore, should not have drawn adverse inference against the assessee. The authorities below have also did not produce any material on record that such investments made in the assessee company was made from coffers of the assessee. We rely upon the decision of the Delhi High Court in the case of CIT vs Value Capital Services P. Ltd. [2008] 307 ITR 334 (Delhi High Court) in which it was held that "dismissing the appeal, that the additional burden was on the Department to show that even if the share applicants did not have the means to make the investment, the investment made by them actually emanated from the coffers of the assessee so as to enable it to be treated as the undisclosed income of the assessee.

d) M/s. Komal Agrotech P. Ltd. v. ITO (ITA No. 437/Hyd/2016):

'9.1 A plain reading of the assessment order demonstrate that the A.O. merely went by the investigation done by the

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Officer of D.G.I (Investigation), Mumbai. No enquiries or investigation was carried out. No evidence to controvert the claims of the assessee was brought on record by the A.O. Even the statement of Mr. Praveen Kumar was supplied. Nothing is on record about result in investigations done by DGIT (Inv.), Mumbai. The papers filed by the assessee do demonstrate, the identity, creditworthiness and genuineness of the transaction. The addition is made merely on surmises and conjectures.

9.2 In view of the above discussion, we hold that the addition made under section 68 of the Act is bad in law. In the result, reopening of assessment is quashed and the addition is also deleted on merits.

In regard to Interest of Rs. 8,79,780/-

1 Since the receipt of loans from aforesaid lender companies were treated as sham transaction, the interest expenditures of Rs. 8,79,780/- were also disallowed.

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Ltd (amalgamated with S.K. Stock Dealers Pvt Ltd) & M/s. Kingfisher Properties Pvt Ltd as the appellant is not liable to get his books of accounts audited u/s 44AB of the Act.

Further, the Id. Assessing officer has not brought on record any substantial concrete evidence to prove the fact that the assessee must have received back the interest amounts. Thus, he has disallowed the interest merely on his own surmises and conjectures.

In view of the above facts, we request Your Honour to delete addition of Rs. 2, 15,00,000 made under u/s. 68 of the Act and Rs. Rs. 8,79,780/-made u/s. 69C of the Act.

7.3 I have carefully considered the assessment order and the submissions of the learned counsel. The assessee was covered under search of Lotus/Kamdhenu/Patel Patni group conducted on 09.10.2014. During the course of assessment proceedings, statements of Shri Praveen Agarwal and Shri Beni Prasad Lahoti were relied upon wherein they had confessed of having provided accommodation entries through the entities created by them.

The appellant has submitted the copies of the confirmation, PAN card, bank statement, IT acknowledgement, audited financial statements of the lender companies to substantiate the three ingredients envisaged us. 68 i.e.

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identity of the lenders, genuineness of the transaction and creditworthiness of the lenders. During the course of hearing, the appellant also vehemently argued that there is no relevance of the statement of the above-mentioned parties as they are no way connected to the lender - companies as a director or shareholder.

The appellant claims that no addition of a total sum of Rs.2,15,00,000/- is called for as it has completely established the three ingredients viz. identity, genuineness and creditworthiness as envisaged u/s. 68 of the Act, whereas the AO has treated the same to be unexplained and added the same u/s. 68 of the Act solely on his surmises. Thus, the only issue is with regard to the unsecured loans received by the appellant from M/s. Galore Suppliers Pvt. Ltd, M/s. Landmark Suppliers Pvt. Ltd & M/s. Kingfisher Properties Pvt. Ltd. and whether the appellant has discharged his onus cast upon by the provisions of section 68 of the Act.

7.4 The assessee has submitted following documents in support of the alleged unsecured loan transactions:

(a)ITR Acknowledgement of the lenders

(b) Financial statements of the lender companies

(c) Ledger confirmation of the lender companies for AY 2014-15

(d) Bank Statement of the lender companies highlighting the loan given to the assessee

(e) Copy of company status of the alleged lenders as per MCA 21

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(f) Copy of Petition in High Court of Calcutta for amalgamation of M/s. Landmark Suppliers Pvt. Ltd

7.5 I have perused the aforesaid documents and found that the appellant has furnished all the relevant documents in support of the transactions entered with M/s. Galore Suppliers Pvt. Ltd, M/s. Landmark Suppliers Pvt. Ltd& M/s. Kingfisher Properties Pvt. Ltd. to establish the identity, genuineness and creditworthiness. M/s. Landmark Suppliers Pvt. Ltd got amalgamated with M/s. S.K. Stock Dealers Pvt. Ltd. w.e.f. 01.04.2013 wherein the alleged lender company ceased to exist, and all its assets and liabilities got merged with the newly amalgamated company i.e. M/s. S.K. Stock Dealers Pvt. Ltd. During the course of appellate proceedings, it was argued by the Learned Counsel of the appellant that the unsecured loans taken from the alleged lenders were interest bearing and the loans were repaid back in the subsequent year i.e.F.Y.2014-15.On the contrary, it is seen that the AO has not pointed out any discrepancies or deficiencies in the evidences so filed, though he has analyzed the financials of the lender companies and stated that the accumulated profits of the lender companies are just a meager amount and has also relied on statement of entry providers to allege that the loan transactions entered with the lender companies were in the form of accommodation entries.

7.6 In his rebuttal, the Learned Counsel of the appellant submitted that mere low income cannot be the criteria to dislodge the creditworthiness of the so-called lenders and that due consideration should be given to the networth of the lender companies viz. M/s. Galore Suppliers Pvt. Ltd, M/s. Landmark Suppliers Pvt. Ltd.(M/s. S.K. Stock Dealers Pvt. Ltd.) & M/s. Kingfisher Properties Pvt. Ltd which are Rs.95.33 crores, Rs.95.91 crores and Rs.100.07 crores

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respectively for the year under consideration. In case of M/s. Galore Suppliers Pvt. Ltd, the turnover for the year under consideration was Rs.19.83 crores, the profit and the returned income was Rs.83,060/-.The taxes paid was Rs.37,23,091/-. Similarly, in case of M/s. Landmark Suppliers Pvt. Ltd (M/s. S.K. Stock Dealers Pvt. Ltd.), the turnover for the year under consideration was Rs.20.71 crores, loss suffered was Rs.34,159/- and the returned loss was Rs.32,964/-. I find some force in this contention of the appellant, since the net worth of the alleged lender companies are much greater than the amount advanced by them. In this very perspective, the allegation of the AO that the income of the lender companies in the year under consideration is very low without giving due consideration to the overall net worth of the companies is totally misplaced and unwarranted. Attention was also invited to the decision of the Hon'ble Delhi High Court in the case of CIT vs Vrindavan Farms Pvt Ltd (ITA No. 71/2015) in which the sole basis for the revenue to doubt the creditworthiness was the low income as reflected in the return of income. It affirmed the view of the ITAT that the AO had not undertaken any investigation of the veracity of the documents submitted to him by the assessee and wrongly completed the assessment only on the presumption of the low return of income. Also, it is observed that the three alleged lender companies are engaged in the business of trading shares. It is an admitted fact that income from such nature of business is susceptible to the erratic movements of share price in the open market and such movements are beyond the control of the company. In such a case, it is not possible for the companies to consistently earn remarkable profits every year. Considering the of business, treating the lender companies as not creditworthy only due to low profits or losses

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suffered without giving due consideration of the net worth of the companies is completely unjustified.

7.7 The lender companies i.e. M/s. Galore Suppliers Pvt. Ltd, had issued 11,07,695 equity shares against which it had received share premium of Rs.84.60 crores. Similarly, M/s. Landmark Suppliers Pvt. Ltd. & M/s. Kingfisher Properties Pvt. Ltd. had also issued 1,06,21,800 and 50,94,397 equity shares against which the premium per share worked out to Rs.90/- and Rs.195/- per share respectively. With regard to the same, the AO has mentioned in the impugned assessment order that the above phenomenon cannot be explained by any logic of commercial expediency as to why any investor will invest such a huge premium in such a company having no accumulated profits.

In its rebuttal, the Learned Counsel of the appellant argued that it is the prerogative of the Board of Directors of a company to decide the premium amount and it is upon the shareholder whether they want to the subscribe to the shares or not of the company. The Id. A.O. cannot jump to the conclusion that the alleged lender companies are not capable of raising share capital at such a huge premium only due to the fact that they do not have accumulated profits or any networth of their own. In support of the said proposition, the appellant also relied upon the decision given by the Hon'ble Madhya Pradesh High Court in the case of PCIT vs. Chain House International (P) Ltd ITA No.112/2018 against which the SP of the revenue was also dismissed by the Hon'ble Supreme Court.

I find merit in the contention of the appellant. The AO has doubted the creditworthiness and capacity of the lender companies to raise share capital and premium solely on the

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premise that they do not have accumulated profits. Issuing shares at a premium is a commercial decision and the responsibility of the same rests on the shoulders of the Board of Directors of the issuing company. Similarly, it is the wisdom of the shareholders whether they intend to subscribe to the shares at such a premium or not. Amount of premium to be charged is not governed by any system of law and is purely a commercial exercise of the Board. Therefore, the AO is not justified in doubting the genuineness and creditworthiness of the companies. The AO ought to examine judiciously only the subject matter transactions and whether the appellant has duly discharged its onus cast upon it by the relevant section. For the relevant year, the appellant can also not be asked to explain the source of source of lenders.

7.8 The expression "nature and source" has to be understood together as a requirement of identification of the source and the nature of the source, so that the genuineness or otherwise could be inferred. The Hon'ble Supreme Court, in Kale Khan Mohd. Hanif vs.CIT [1963] 50 ITR 1, pointed out that the onus on the assessee has to be understood with reference to the facts of each case and proper inference drawn from the facts. If the prima facie inference on the fact is that the assessee's explanation is probable, the onus will shift to the Revenue. As far as the creditworthiness or financial strength of the creditor/subscribers is concerned, that can be proved by producing the bank statement of the creditors/subscribers showing that it had sufficient balance in its accounts to enable it to subscriber to the share capital. Once these documents are produced, the assessee would have satisfactorily discharged the onus cast upon him. Thereafter, it is for the Assessing Officer to scrutinize the

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same and in case he nurtures any doubt about the veracity of these documents, to prove the matter further.

7.9 Element of credit worthiness and satisfaction of AO thereafter is subjective and requires more efforts/inquiry on the part of the AO to give a finding in the order that lender is not credit worthy. The AO must make proper enquiry before making any addition. In Khandelwal Constructions v. CIT 227 IT 900 (Gau.), it has been held that section 68 empowers the Assessing officer to make enquiry. If he is satisfied that these entries are not genuine he has every right to add these as income from other sources. But before rejecting the assessee's explanation, A.O. must make proper enquiries and in the absence of proper enquiries, addition cannot be sustained.

7.10 Further, in the case of Nemichand Kothari vs. CIT - [264 IT 254] [Gaj], the Hon'ble High Gourd had held that:

...Hence, the harmonious construction of section 106 of the Evidence Act and section 68 of the Income-tax Act will be that though apart from establishing the identity of the creditor, the assessee must establish the genuineness of the transaction as well as the creditworthiness of his creditor, the burden of the assessee to prove the genuineness of the transactions as well as the creditworthiness of the creditor must remain confined to the transactions, which have taken place between the assessee and the creditor. What follows, as a corollary, is that it is not the burden of the assessee to prove the genuineness of the transactions between his creditor and sub-creditors nor is it the burden of the assessee to prove that the sub-creditor had the creditworthiness to advance the cash credit to the creditor from whom the cash credit has been, eventually, received by the assessee. It,

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therefore, further logically follows that the creditor's creditworthiness has to be judged, vis-a-vis, the transactions, which have taken place between the assessee and the creditor, and it is not the business of the assessee to find out the source of money of his creditor or of the genuineness of the transaction, which took place between the creditor and sub-creditor and/or creditworthiness of the sub-creditors, for, these aspects may not be within the special knowledge of the assessee.

7.11 The assessee must satisfy three important conditions, namely, (i) the identity of the creditor; (ii) the genuineness of the transaction; and (ill) the financial capacity of the person, i.e. the credit worthiness of the creditor. However, the onus of the assessee is limited to the extent of proving the source from which he received the cash credit. The credit worthiness of the creditor has to be judged vis-à-vis the transaction which had taken place between the assessee and the creditor, and it is not the burden of the assessee to find out the source of creditworthiness of the lender to prove the genuineness of the transaction. This issue is dealt by the Gauhati High Court in the case of CIT v. Smt. Sanghamitra Bharali (2014) 361 ITR 481 (Gau). The aforesaid points were also affirmed in the past by the Apex Court in the case of CIT v. Orissa Corporation P. Ltd reported in (1986) 159 IT 78 (SC). In the case of CIT v. Varinder Rawley (2014) 366 ITR 232 (P & H) the court held that "where the assessee shows that the entries regarding credit in a third party's account were in fact received from the third party and are genuine, he discharges the onus. In that case, the sum cannot be charged as the assessee's income in the absence of any material sate that it belongs to assessee.

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7.12 It is clear from the submission of appellant that the transactions were through account payee cheques and appellant has submitted sufficient details before the AO during the re-assessment proceedings. The source of receipt through banking channel clearly establish the genuineness of the credits which is reflected in the books of accounts. In the present case, due compliances of notice issued u/s. 133(6) of the Act were also made by the alleged lenders. Further, interests are also paid with tax being duly deducted at source. The said unsecured loans were also repaid in F.Y.2014-15. Hence, the AO has not brought on record any cogent evidence in the course of inquiry conducted during the course of assessment proceedings as well.

7.13 In light of above, it is now important to examine the validity of addition based on the statements of the parties relied upon by the AO.

Statement of Shri Praveen Agarwal and Shri Beni Prasad Lahoti

The AO has referred to the statements of Shri Praveen Agarwal and Shri Beni Prasad Lahoti wherein they had admitted in the past before the department that they provided accommodation entries through entities created by them. They also stated that the entities did not have any actual business activities and also creditworthiness of their own. The companies created by them also did not have any capacity to invest or provide loans to other companies and they have been created merely as a device to redirect and reintroduce the unaccounted funds into other companies.

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Shri Beni Prasad Lahoti is neither a shareholder nor director of the alleged lender companies i.e. M/s. Galore Suppliers Pvt. Ltd. & M/s. Landmark Suppliers Pvt. Ltd and similarly, Shri Praveen Agarwal is neither a shareholder nor director of M/s. Kingfisher Properties Pvt. Ltd. Thus, they do not have any locus standi to give any statement in relation to the alleged lender companies and therefore such statements do not have any evidentiary value in the eyes of law to make any relevant conclusions against the appellant. The appellant has complied with the three ingredients of section 68 of the Act and has duly substantiated the loans received from the lenders. Reference in this regard can also be made to the CBDT Instruction F.No.286/98/2013-IT (INVII) dated 18/12/2014 and letter dated 10/03/2003 issued by the Ministry of Finance & Company Affairs wherein it is stated that the search party must focus on collection of evidences and not merely admission/ confession of additional income. Thus, respectfully following the CBDT circular, I find that the addition cannot be sustained merely on the basis of the statement taken devoid of any evidence/material to incriminate the assessee.

7.14 Section 68 is not a charging section but a deeming fiction dealing with the burden of proof. The section casts initial onus u/s. 68 of the Act on the assessee to prove identity, genuineness and creditworthiness of the transaction to the satisfaction of the AO. If the assessee fails to do so or the explanation offered by him is not satisfactory to the AO, the AO is empowered to add the same to the total income of the assessee. The said power is to be exercised judiciously by the AO. Thus, once the initial onus is discharged by the assessee, the onus shifts on the AO to bring out fallacies in evidence brought by the assessee or by bringing new evidence that indicate the

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transactions undertaken by the assessee are non-genuine. Thus, the section deals with an equilibrium of onus of proof and must be viewed to evaluate as to whether the evidences brought by the assessee or AO weigh more and accordingly in whose favour the equilibrium bends. In the present case, on one hand, the assessee has placed evidence in the form of ledger confirmation, bank statement, IT acknowledgement, Computation of Income, signed financials of the lender companies. Further, interests are also paid with tax being duly deducted at source and also the repayments have been made by the appellant to the alleged lenders. Even it is not the case of the AO where any adverse findings are unearthed in the course of any inquiry.

7.15 In view of the overall discussion made above, it is clear that nature and source of the loans obtained by the assessee stands explained. Whereas, the AO has not pointed out any defect in the above-mentioned documentary evidences submitted during the assessment proceedings. All the aforesaid alleged parties are also active in MCA website and none of these are struck off from its record. Without pointing out any lacuna in the evidences submitted by the appellant, the sources and the genuineness of transaction ton cannot be doubted. It is trite law that once evidences related to a transaction are submitted before the AO, the onus shifts on him to prove these as non-genuine. The AO has not discharged the onus cast upon him. Further, merely based on the statement of third persons without any corroborative evidence will not make the loan transactions, in question, as accommodation entries. As such, in the absence of any contrary evidence or findings placed on record, the transactions cannot be treated as accommodation entries on mere surmises.

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7.16 Further, I find that the decision of the Hon'ble jurisdictional High Court in the case of CIT v. Paradise Inland Shipping Pvt Ltd (TA No. 66 of 2016) (Bom HC) squarely applies to this case wherein it was observed as under:

"The assessment is completed without rebutting the 550 page documents which are unflinching records of the companies. The list of documents submitted on 09.03.2015 are as follows :

Date of Registration 09/05/1995

Memorandum of Association and Article of Association

Certificate of Incorporation

Certificate of Commencement of Business

Acknowledgment of the Return of Income AY 08-09

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Affidavit of the Director confirming the investment

Application for allotment of shares

Photocopy of the share certificate

Audited account and Directors report thereon including balance sheet, Profit and Loss Account and schedules for the year ended 31.03.2009.

Audited account and Directors report thereon including balance sheet, Profit and Loss Account and schedules for the year ended 31.03.2010

The Bank Statement highlighting receipt of the amount by way of RTGS.

Banks certificate certifying the receipt of the amount through Banking channels."

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evidence on record cannot be said to be perverse. Learned Counsel appearing for the Appellants was unable to point out that any of such findings arrived at by the authorities below were on the basis of misleading of evidence or failure to examine any material documents whilst coming to such conclusions. Under the guise of the substantial question of law, this Court in an Appeal under Section 260A of the Income Tax Act cannot re-appreciate the evidence to come to any contrary evidence. Considering that the authorities have rendered the findings of facts based on documents which have not been disputed, we find that there are no substantial question of law which arises in the present Appeal for consideration.

"13. In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were income-tax assesses. Their index number was in the file of the revenue. The revenue, apart from issuing notices under S. 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so called alleged creditors. In those circumstances, the assessee could not do anything further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises.

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The SP filed against the said order of the Hon'ble jurisdictional High Court is also dismissed by the Hon'ble Apex Court in [2018] 93 taxmann.com 84 (SC).

7.17 I find that the addition u/s. 68 of the Act is uncalled for in the present facts and circumstances of the case in view of the discussion made above. Accordingly, the addition of Rs.2,15,00,000/- made by the AO deserves to be deleted.

7.18 The next issue is regarding the interest of Rs.1,77,534/-, Rs.3,51,123/- & RS.4,16,959/- incurred on the unsecured loans taken from M/s. Galore Suppliers Pvt. Ltd, M/s. Landmark Suppliers Pvt. Ltd. & M/s. Kingfisher Properties Pvt. Ltd. respectively which were added by the AO u/s. 69C of the Act. I have decided the issue regarding the addition of the alleged unsecured loans of Rs.40,00,000/-, Rs.80,00,000/-& Rs.95,00,000/- received from M/s. Galore Suppliers Pvt. Ltd, M/s. Landmark Suppliers Pvt. Ltd. & M/s. Kingfisher Properties Pvt. Ltd. respectively in favour of the assessee in view of the discussion made above. Accordingly, the consequential interests of Rs.1,77,534/-, RS.3,51,123/- & Rs.4,16,959/- incurred on the aforesaid unsecured loans during the year also need to be allowed. These grounds of appeal are accordingly ALLOWED.

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proved the ingredients of section 68 of the Act i.e identity, genuineness and creditworthiness of the lender and further unsecured loan transaction are in the nature of accommodation entries and supported the order of the A.O. and relied on the judicial decisions and prayed for allowing the revenue appeal.

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to the lenders. Whereas the A.O. has disbelieved the fact of identity, creditworthiness and genuineness of the transaction. Further to substantiate identity of lenders, the assessee has filed the details of company from the MCA 21 master data. On the genuineness of the transaction, the assessee has submitted the bank statements and also credit worthiness is substantiated with the Audited financial statements. The information submitted by the assessee satisfied the three ingredients of provisions of Sec. 68 of the Act. The Ld.AR submitted that the assessee has substantiated the stand by submitting the details before the A.O. and discharged the burden and relied on the order of the CIT(A), factual paper book and the following judicial decisions as under:

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all the details prima-facie the A.O. has not conducted any investigation or enquiry in respect of the information submitted by the assessee. In the course of hearing, the revenue was asked to produce the assessment records and it was found that the A.O. has not issued notice u/sec 133(6) of the Act on the lenders company to ascertain the information from the third party/for enquiries. We find that the CIT(A) considered the facts, circumstances and the assessee prima-facie complied the ingredients required u/s 68 of the Act of identity, genuineness and creditworthiness. Further, the CIT(A) relied on the catena of judicial decisions and test checked the genuineness and creditworthiness of the lenders. The CIT(A) came to a reasonable conclusion that the assessee has discharged its burden on submitting the information in the assesseement proceedings and the A.O. has failed to conduct the enquiries.

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Company Master Data at page 117 to 120 of the paper book. The Ld. DR could not controvert the findings of the CIT(A) with any new cogent material or information to take different view. We are of the opinion that the information was filed before the A.O. which is not disputed and the A.O should have issued the notice u/sec 133(6) of the Act and without making the enquiries the A.O. cannot make addition. We rely on the decision of coordinate bench of the Honble Tribunal in the case of ITO Vs. M/s. Sankalp Corporate Services Pvt Ltd in ITA No. 5778/Mum/2017, A.Y 2013-2014 dated 28.02.2019 in revenue appeal on the similar/identical issue where the enquiry was not conducted by the A.O u/s 133(6) of the Act dealt at page 7 Para 11 to 19 of the order which is read as under :

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c) Share application Forms

d) Board Resolution

e) Confirmation of Account

f) Balance Sheet of shareholder

g) Bank statement of shareholder

h) I.T. Acknowledgement receipt

i) Assessment Order u/s 143(3) of the shareholder

j) Valuation report of the shares

k) NAV working of the assessee

l) balance sheet of the assessee

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documentary evidence on record to disprove the transaction and involvement of unaccounted money belonging to the assessee. He further noted that the Assessing Officer did not even issue the notice u/s 133(6) of the I T Act, 1961 to the shareholder or to the banker of such shareholder to verify the source of funds. He held that the assessee had furnished adequate documents to prove the Identity, Genuineness and Credit Worthiness of the Share-Holder, the Assessing Officer is not justified in simply brushing aside such documents. Hence, the ld. CIT(A) held that the addition made in assessment u/s 68 of the IT Act, 1961 needs to be deleted.

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the reserves and loss while challenging the charge of share premium on preference shares. "Reserves" could be relevant for valuing equity shares. They are not relevant for valuing preference shares. Preference shareholders get priority over the equity shareholders in terms of payment of dividend and during winding up. They get only a fixed rate of dividend. The redemption amount depends on the terms of issue. The conversion depends on the terms of issue. The terms of issue are relevant for valuing preference shares. Even the present Rule 11UA of the Income Tax Rules 1962 are applicable only to section 56(2) of the Act, requires valuation of preference shares by the merchant bankers. The AO has 10 ITA No. 5778/Mum/2017 not even attempted to do any sort of valuation of preference shares. His addition is based entirely on conjectures and surmises. It is a settled Iaw that the assessment cannot he made on mere suspicion, conjectures and surmises.

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fair market value of the shares. If one accepts the Ld CIT- DR's contentions that section 68 of the Act can he applied where the transaction is proved to be that of a share allotment that here the valuation for charging premium is not justified, it will make the provisions of section 56(2)(viib) of the Act redundant and nugatory. This cannot be the intention of the Legislature especially when the amendments in the two sections are brought in at the same time. In view of the matter, the Ld Counsel explained that it is a settled law that where two views are possible, the view favorable to the assesse should be adopted as held by Hon’ble Supreme Court in case of CIT Vs. Vegetable Products Ltd. (1973) 88 ITR 192. In view of the above facts and circumstances, we are of the view that the assessee has discharged its onus by adequately disclosing the transaction in its books of accounts, filing statutory forms as regards allotment of shares, providing name, address and PAN of the shareholders, etc. the assessee has sufficiently discharged the onus cast upon it for the purpose of section 68 of the Act and no addition can be made on this account. Hence, we are of the view that the CIT(A) has rightly deleted the addition and we confirm the same. This issue of Revenue’s appeal is dismissed.

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and came to a reasonable conclusion that the assessee has discharged its burden on submitting the information. The Ld.AR demonstrated the copy of bank statements reflecting the repayment of unsecured loans at page 68,96,97,&116 of the paper book which is not disputed by the revenue. Further, the A.O has failed to make further enquiries and relied on the statements overlooking the factual aspects that the assessee has discharged the initial burden placed on it by submitting the information and the revenue has failed to further enquire in to the disputed issues. Whereas, the CIT(A) has considered these facts and granted the relief to the assessee. We considered the facts, circumstances and submissions of the assessee are of the view that the CIT(A) order is reasoned and conclusive. Accordingly we do not find any infirmity in the order of the CIT(A) and upheld the same and dismiss the grounds of appeal of the revenue.

CO. 45/Mum/2021.

ITA No. 6128/Mum/2019 & Co. No. 45/Mum/2021 Shri Majni Karmshi Patel, Mumbai. - 55 -

material information are of the considered opinion that there are no merits in the Cross objections filed by the assesse and is dismissed.

Order pronounced in the open Court on 03.08.2022

Sd/- Sd/- (GAGAN GOYAL) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated 03.08.2022 KRK, PS Copy of the Order forwarded to : The Appellant 1. The Respondent. 2. The CIT(A) 3. Concerned CIT 4. DR, ITAT, Mumbai 5. 6. Guard file. आदेशानुसार/ BY ORDER, //True Copy// 1. ( Asst. Registrar) ITAT, Mumbai