INCOME TAX OFFICER, WARD-7(2), JAIPUR, JAIPUR vs. AMAR PRATAP STEELS PRIVATE LIMITED, JAIPUR

4.2 In response to the above show cause notice the assessee filed submission on 18.03.2016. The submission filed by the assessee is not acceptable. Because Shri Praveen Kumar Jain accepted that he provided accommodation entry for share Application and stated that the shares are purchased by companies under his control which are merely paper companies engaged in the business of providing accommodation entries. He gets a one-time commission of 1.25% to 2.0% of the total client desirous of taking an accommodation entry in the form of share application gives the cash to him and the same is then transferred to the broker through whom the entry is finally provided. For arranging this entry he gets a onetime commission of about 0.25% of total value of the transaction, as it is duly accepted based on the statement of Shri Praveen Jain that the assessee had taken accommodation entry as share application many received from M/s Alka Diamond India Ltd./-of Rs. 35,00,000/-, M/s Javda India Impex Ltd. of Rs.30,02,500/-, M/s Nakshatra Business P. Ltd. (M/s Hema Trading Co.P.Ltd.) of Rs. 35,00,000/-, M/s Olive Overseas P. Ltd. (M's Real Gold Trading Co.P. Ltd.) of Rs.35,00,000/- and M/s Traingler Infocom Ltd.(Mis Lexus Infotech Ltd.) of Rs. 35,00,000/-. While doing so ld. AO relied on the decision of Hon'ble Delhi High Court on similar facts in the case of CIT Vs. Nova Promoters & Finlease Pvt. Ltd. (2012) reported in 18 taxmann.com 217 (Delhi) has also disproved the claim of the assessee. through banking channels does not make the transaction genuine.

He further observed that ITAT, Jaipur in the case of M/s Kanchwala Gems vis JCIT, dated 10.12.2003 and affirmed by Hon'ble Supreme Court in 288 ITR 10(SC) has held that even payment by account payee cheque is not sufficient to establish the genuineness of the transaction. Further, in CIT V/s Precision Finance Pvt. Ltd. 208 ITR 465 (Cal.), the Hon'ble Calcutta High Court has held that payment made by account payee cheque is not sacrosanct and it would not make an otherwise non genuine transaction genuine. It is a well settled law that strict rules of evidence do not apply to the Income Tax Act and the real test with regard to genuineness of transactions is "Preponderance of probabilities" and not "Beyond reasonable doubt". Ld. AO also placed reliance on the decision f Chaturbhuj Panauj AIR 1969 (SC) 255, Sumati Dayal V/s CIT, 214 ITR 801 (SC), C. Vasant Lal & Co., 45 ITR 206 (SC).

4.4 As regards the contention of the assessee company to make available (being witness), Shri Praveen Kumar Jain to enquire sufficient material evidences are already in the possession with the department to disprove the transaction regarding share application as received by the assessee-company from above parties (paper concern of Sh. Praveen Jain Group). The assessee furnished the details of allotment of shares, share application form, bank statement of applicant and replied that the assessee company had received the share application money from the above parties through account payee cheques/ RTCG. The reply found insufficient to prove the genuine nature of the transaction.

4.5 Ld. AO based on the discussion so made and relying on those decisions noted that it is crystal clear that-

(a) The primary onus is on the assessee to establish the genuineness of the share application money received. (b) If the investigation done by the department leads to doubt regarding the genuineness of the share applications it is incumbent on the assessee to produce the parties along with necessary documents to establish the genuineness of the transaction. (c) Payment by account payee cheque is not sacrosanct.

Based on these discussion ld. AO hold a view that the assessee failed to establish the genuineness of the Share Application Money received by it or has failed in discharging this of statement of Shri Praveen Jain & others along with relevant material supplied to the assessee clearly explain the modus operandi of these bogus transaction. The case laws cited by the assessee in its defense also do not help it being distinguishable on facts. At last based on that discussion ld. AO invoking the provision of section 68 added share application of Rs. 1,70,02,500/- from above companies and was treated as Non-genuine and bogus Share Application Money and was added to the total income of the assessee-company.

5. Aggrieved from the finding so recorded by the ld. AO assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below:

“5. I have gone through the above submissions made by the appellant. I have also verified the material as presented during the course of appellate proceedings. I have also considered assessment order and various facts and circumstances of the case. From the verification of the material, it is understood that the appellant made various submissions to prove the genuineness of the transactions. In the case of the investors as mentioned hereunder, the appellant filed following details:-

1. 1. Copy of Return of Income of the investor and schedules reflecting transaction with the appellant.

2. Copies of bank statements evidencing the investment of share application money through banking channels.

Thus, the assessee discharged its onus as per 68 of the IT Act. Now onus is on AO to disprove the genuineness of the investments. However, the AO has not made efforts to conduct enquiries and to establish the genuineness of the investors. From the materials filed, it is understood that the assessee filed all relevant details which are needed to explain genuineness, creditworthiness and identification of investors.

5.2 Hon'ble Apex Court in the case of Commissioner of Income Tax Vs. Odisha Corporation Pvt. Ltd held as under:-

"It was noted that the assessee had given names and addresses of the alleged creditors. It was knowledge of revenue that the said creditors were income tax assessees. Revenue apart from issuing notices u/s. 131 at instance of assessee would not pursue matter any further. In view of this, tribunal was justified in concluding that assessee had discharged burden." 5.3. Thus, as per the above judgement, the assessee discharged its burden as per section 68 of the IT Act. The AO simply relied on some vague information from the Investigation Wing regarding the accommodation entries. However, verification of the source of source is not the realm of the AO, as clearly held by the Supreme Court in the case of Lovely Exports (269 CTR 194), Hon'ble Apex Court held as under.-

"If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the department is free to proceed to reopen their individual assessments in accordance with law but this amount of share money cannot be regarded as undisclosed income under section 68 of the assessee company."

Thus as held by the Hon'ble Apex Court, the AO to proceed against the investors if they do not have proper creditworthiness for which the AO cannot penalize the assessee by making addition. Further, the AO did CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. not point out any specific instance or any information in the statements recorded by the Investigation Wing in the case of Sri Praveen Kumar Jain Group which reveals the alleged involvement of assessee in taking accommodation entries. Further, the AO did not make any efforts to examine the investors on his own by issue of letters u/s.133(6) of the Act. In the absence of any specific information about the assessee it is not correct to make addition merely on the basis surmises and presumptions. If there was any specific adverse information about the assessee, the burden clearly lies on the AO to give an opportunity to cross-examine the person who had given that information. However, the AO did not do the same. Thus as per the facts and circumstances, the AO could not establish conclusively about the non-genuineness of the share application money. Accordingly, the addition made in respect of the share application money is hereby deleted. This ground of appeal is accordingly allowed. In the result, the appeal is partly allowed.”

6. Aggrieved from the above finding so recorded by the ld. CIT(A), revenue has preferred the present appeal on the grounds as stated herein above. On the other hand, assessee also dissatisfied with the dismissal of the ground of re-opening of the assessment merely based on the third-party information assessee preferred to file the cross objections.

Before us both the parties supported the orders of the lower authority to the extent favorable to them.

7. The ld. DR representing the revenue in addition to the contentions so raised heavily relied upon the detailed finding recorded in the order of the assessing officer. Ld. DR vehemently based on the condition laid down in the section 68 of the Act. As is clear that the assessee failed to establish the identity and genuineness of the Share Application Money through the company operated and managed by Shri Praveen Jain who has during the search conducted by the revenue has in detailed accepted the method adopted by him in providing accommodation entry of loan and share application money. Based on that information the case of the assessee has rightly been reopened by the revenue and even that ground of re-opening taken by the assessee was dismissed by the ld. CIT(A). So far as the merits of the case of the assessee wherein the ld. CIT(A) hold a view that the AO simply relied on some vague information from the Investigation Wing regarding the accommodation entries. However, verification of the source of source is not the realm of the AO, as clearly held by the Supreme Court in the case of Lovely Exports (269 CTR 194). He further relying on that judgment hold a view that the AO should have to proceed against the investors if they do not have proper creditworthiness for which the AO cannot penalize the assessee by making addition. Further, the AO did not point out any specific Investigation Wing in the case of Sri Praveen Kumar Jain Group which reveals the alleged involvement of assessee in taking accommodation entries. Further, the AO did not make any efforts to examine the investors on his own by issue of letters u/s.133(6) of the Act. In the absence of any specific information about the assessee it is not correct to make addition merely on the basis surmises and presumptions. If there was any specific adverse information about the assessee, the burden clearly lies on the AO to give an opportunity to cross-examine the person who had given that information. However, the AO did not do the same. Thus, as

per the facts and circumstances, the AO could not establish conclusively about the non-genuineness of the share application money and accordingly, here directed to delete the addition which the ld. AO has clearly made his case and also cited the various judicial judgment and therefore, the finding of the ld. AO should be sustained and that of the finding of the ld. CIT(A) be set aside. As is clear from the decision cited recent decision of PCIT Vs. Swati Bajaj 139 taxmann.com 353 the Calcutta High Court made it clear that the cross examination is not legal right. Ld. AO made it clear channel does not conclusively prove the transaction where the provision section 68 is clearly applicable. As held by ld. CIT(A) that the ld. AO was sufficient information to re-open the proceeding and the same has been used to make the addition and in the statement of Shri Praveen Jain categorically explained in detail the activities that he has conducted by shell companies. That all the discussion was considered as eye washed by ld. CIT(A) while dealing with the appeal of the assessee. The preponderance of probability clear made applicable in the facts of the case held in the case of Durga Prasad More and other that are applicable to the facts of the case and provision of section 68 of the Act and same are listed herein below:

The wing has derailed the economic offence done by Shri Praveen Jain and therefore, the addition made by the ld. AO be sustained.

The ld. DR has filed the paper book containing the following supporting documents:

Index S. No. Description Page No. 1 Brief Facts of the Case 1 to 5 2 Assessment Order 6 to 14 3 Speaking order regarding objections filed against 15 to 18 the issuance of Notice u/s 148 of the Act, 1961 4 Notice u/s 148 of the Income Tax Act, 1961 19 to 20 5 Reasons recorded for initiation of re-assessment 21 to 22 proceedings. 6 Statement on oath of Shri Praveen Kumar Jain 23 to 90 recorded u/s 132(4) of the Income Tax Act, 1961 7.2 Ld. DR also filed a detailed note which reads as under:

Brief Facts of the Case The assessee company filed its return of income on 15.04.2015 declaring total income of NIL for A.Y. 2010-11. Information was received in this office that the assessee had taken the accommodation entries as share application money received from the various companies which are managed and controlled by Shri Praveen Kumar Jain Group, Mumbai during the FY 2009-10. Thereafter, the assessment in the case of CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. assessee for the AY 2010-11 was completed u/s 143(3)/147 of the Income-tax Act, 1961 on 28.03.2016 at total assessed income of Rs.1,70,02,500/-with an addition of the entire amount by treating the share application money received as unexplained cash credits u/s 68 of the Act as the assessee could not prove the genuineness of transactions of share application money of Rs.1,70,02,500/-received from various parties. Findings of Ld. CIT(A):- The Ld. CIT(A) has decided the appeal of the assessee on 29.12.2023 and partly allowed the appeal of the assessee. While deciding the appeal of the assessee, Ld. CIT(A) has deleted the addition made by the AO of Rs. 1,70,02,500/- on account of unexplained cash credit u/s 68 of the Act in respect of share application money received by the assessee. The Ld. CIT(A) has placed reliance on the judgement of the Hon'ble Supreme Court in the case of "Commissioner of Income Tax Vs. Odisha Corporation Pvt. Ltd." As per the judgement, the assessee discharged its onus u/s 68 of the Act by providing all relevant details which were needed to explain genuineness, creditworthiness and identification of investors viz. copy of return of income of the investor and schedules reflecting transaction with the appellant, copies of bank statements evidencing the investment of share application money through banking channels & copy of confirmation letters from the investor. However, the AO has not made efforts to conduct enquiries and to establish the genuineness of the investors. Further, the Ld. CIT(A) held that the verification of source of source is not the realm of the AO, as clearly held by the Supreme Court in the case of "Lovely Exports (269 CTR 194). Thus, as held by the Hon'ble Apex Court, the AO to proceed against the investors if they do not have proper creditworthiness for which AO cannot penalize the assessee by making addition. Further, the AO did not point out any specific instance or any information in the statements recorded by the investigation wing in the case of Shri Praveen Kumar Jain Group which reveals that the alleged involvement of assessee in taking accommodation entries. If there was any specific adverse information about the assessee, the burden clearly lies on the AO to give an opportunity to cross-examine the person who had given that information. The AO could not establish about the non- genuineness of the share application money. Comments of AO:- 1. In this case, information was received from Investigation wing of the department which was gathered during the search conducted on Shri Praveen Kumar Jain Group. Shri Praveen Kumar Jain has categorically accepted that he provided accommodation entry for share application and stated that the shares are purchased by companies under his control CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. which are merely paper companies engaged in the business of providing accommodation entries for which he gets one time commission of 1.25% to 2.0% of total transaction value. Further he stated that the client desirous of taking an accommodation entry in the form of share application used to give the cash to him and the same was then transferred to the broker through whom the entry was finally provided & for arranging this entry he gets a onetime commission of about 0.25% of total value of the transaction. The assessee had taken accommodation entry as share application money received from M/s Alka Diamond India Ltd. of Rs. 35,00,000/-, M/s Javda India Impex Ltd. of Rs. 30,02,500/-, M/s Nakshatra Business P. Ltd (M/s Hema Trading Co. P. Ltd.) of Rs. 35,00,000/-, M/s Olive Overseas P. Ltd. (M/s Real Gold Trading Co. P. Ltd.) of Rs. 35,00,000/- and M/s Traingler Infocom Ltd. (M/s Lexus Infotech Ltd.) of Rs. 35,00,000/-. Thus the total amount Rs.1,70,02,500/- on account of accommodation entries was received by the assessee company during the year. The above statement clearly reflect the modus operandi adopted by Pravin Jain group including the assessee.

6. The Ld. CIT(A) vide its order dated 29.12.2023 has stated that if there was any specific adverse information about the assessee, the burden clearly lies on the AO to give an opportunity to cross examine the person who had given that information. In this regard, it is stated that the AO vide assessment order rejected the request of the assessee company to make available Shri Praveen Kumar Jain to enquire about the transaction and CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. cross examination as sufficient material evidences were already in possession with the department to disprove the transaction regarding share application received by the assessee company from paper concerns of Shri Praveen Kumar Jain. Reliance is placed on the judgement of Hon'ble rajasthan High Court, in the case of Rameshwar Lal Mali V/s CIT 256 ITR 536 (Raj.) wherein it has been held that there is no provision for permitting a cross-examination of the person, whose statement is recorded during survey.

8. On the other hand, ld. AR of the assessee supported the order of the ld. CIT(A) on the merits of the case and to support further to that finding ld. AR of the assessee relied upon the following written submission:

I. Assessee Company is engaged in business of Manufacturing of MS Ingots and TMT Bars in the brand name of “AMCO TMT saria.” Assessee Company filed its Return of Income, for the relevant Assessment Year, declaring total income of Rs. Nil.

II. During the relevant previous year, assessee company received Share Application Money, amounting to Rs 1,70,02,500, from the below mentioned investor Companies: - Investor Company Amount (Rs.) Alka Diamond India Limited 35,00,000 Javda India Impex Ltd 30,02,500 Nakshatra Business P. Ltd 35,00,000 (Formerly known as Hema Trading Co. P Ltd) Olive Overseas P. Ltd 35,00,000 (Formerly known as Real Gold Trading Co. P Ltd) Traingular Infocom Ltd 35,00,000 (Formerly known as Lexus Infotech Ltd) Total 1,70,02,500

III. Search and seizure operation u/s 132(1) of the Income Tax Act, 1961 was carried out by the Investigation Wing, Mumbai in case of Shri CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. Praveen Jain. During the course of search, statements of Shri Praveen Jain were recorded u/s 132(4), in which he accepted the fact that he was involved in the activity of providing accommodation entries.

IV. On the basis of such information, received from Investigation Wing, Mumbai, ld. AO reopened the case of the assessee company under Section 148 and added such amount of Share Application Money, so received, as unexplained cash credits under section 68.

V. Under Section 68 addition of Rs 1,70,02,500 was made by the ld. AO. Assessee company filed an appeal before the ld. CIT(A). Vide order dated 29.12.2023, the ld. CIT(A) allowed the appeal of the assessee company on merits. However, against the order of ld. CIT(A), department has preferred an appeal before the Hon’ble Bench.

DEPARTMENTAL ADDITION OF RS. 1,70,02,500 DELETED BY CIT(A) GROUND OF APPEAL:

1.1. During the course of reassessment proceedings, bank statement of assessee company (PB 19-26), along with Form 2 filed with Registrar of Companies (PB : 13-18) and following other evidences were furnished before the ld AO to prove the identity, creditworthiness and genuineness. (PB : 27-85):- Board Application resolution/ Bank Investor Company Financials PB Pg. for shares Confirmatio Statement n Alka Diamond India � 27-36 � � � Limited � Javda India Impex Ltd 37-49 � � � Nakshatra Business P. Ltd � 50-61 � � � (Formerly known as Hema Trading Co. P Ltd) Olive Overseas P. Ltd � 62-73 � � � (Formerly known as Real

1.2. All the Investor Companies are private/public limited companies duly regulated by the stringent provisions of the Companies Act, 1956 and their complete details could be verified from MCA Site (official website of Ministry of Company Affairs). The department has also issued them PAN and these shareholder companies are regularly assessed to tax. Thus the onus, on the part of the assessee Company, stood fully discharged during the course of assessment proceedings.

1.3. In view of this, no addition can be made in the hands of the assessee company. At best, if the ld. AO was not satisfied, the addition could have been made in the hands of the investor company who had confirmed the transactions.

1.4. Reliance is placed on the following judicial pronouncements, the extracts of which have been set out for the sake of convenience:-

1.4.i CIT vs. Lovely Exports (P) Ltd. (2008) 216 CTR 195 (SC) “If share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO. Then the department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of assessee company.”

1.4.ii CIT vs. Stellar Investment Ltd. 25 ITR 463 (SC) "Even if it is assumed that the subscribers to the increased share capital were not genuine, under no circumstances could the amount of share capital be regarded as undisclosed income of the company.” 1.4.iii CIT vs. Sophia Finance Ltd. 205 ITR 98 (Delhi) "The ITO would be entitled, and it would indeed be his duty to, to enquire whether the alleged shareholders do in fact exist or not if the shareholders exist then, possibly, no further enquiries need to be made. The instant case all the share holders were found verifiable and they were in existence”. 1.5. Similar ratio has been laid down by the Jurisdictional High Court of Rajasthan in the below mentioned cases, the extracts of which have also been set out for the sake of convenience:-

1.5.i Barkha Synthetics Ltd. vs. ACIT [2006] 283 ITR 377 (Rajasthan) "The principle relating to burden of proof concerning the assessee is that where the matter concerns the money receipts by way of share application from investors through banking channel, the assessee has to prove existence of person in whose name share application is received. Once the existence of CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. shareholder is proved, it is no further burden of assessee to prove whether that person itself has invested said money or some other person had made investment in the name of that person. The burden the shifts on revenue to establish that such investment has come from assessee company itself."

1.5.ii CIT vs. Morani Automotives (P.) Ltd. [2014] 45 taxmann.com 473 (Raj.) “In CIT v. Shree Barkha Synthetics Ltd. [2004] 270 ITR 477 (Raj.), in a similar nature matter, this Court observed that the Tribunal having found that the companies from which the share application money had been received by the assessee-company were genuinely existing and the identity of the individual investors were also established and they had confirmed the fact of making investment, the finding that assessee had discharged initial burden and addition under Section 68 could not be sustained, was essentially a finding of fact. This Court said,— "19. A perusal of the aforesaid finding goes to show that deletion has been made on appreciation of evidence, which was on record Finding that there was existence of investors and their confirmation has been obtained, were found to be satisfactory. All these conclusions are conclusions of fact based on material on record and, therefore, cannot be said to be perverse so as to give rise to question of law, which may be required to be considered in this appeal under s.260A of the IT Act."

1.6. Further, Hon’ble ITAT Jaipur Bench, Jaipur in the case of M/s. Bells Paper Board (P) Ltd and M/s. Misty Meadows (P) Ltd. followed the ratio laid down by the Hon’ble Rajasthan High Court in the case of Shree Barkha Synthetics Ltd.(Supra).

1.7. The above decisions are based on the logic that strangers can be shareholders of the Company. Therefore, once the identity is established then the onus is discharged on the part of the Company. In case the identity is not established or the shares are issued to non- existent persons then only the addition under Section 68 can be made in the hands of the Company.

1.8. APPARENT IS REAL: The transaction is absolutely in accordance with the procedure laid down in the law and fully evidenced. No defects have been pointed out in these. Therefore, the transaction must be accepted as genuine. We rely on the ratio laid down by the Hon’ble Supreme Court in the case of Daulat Ram Rawatmull (1973) 87 ITR 349 (SC), wherein it was held that the onus of proving that the apparent was not real was on the party who claimed it to be so.

1.9. Ld. AO framed the entire assessment on the basic premise that unaccounted cash was handed over by the assessee company which in- turn got deposited in the Bank Account of the assessee company in the form of Investment in Share Application by the Investor Companies. However ld AO was absolutely silent about the following questions: - CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. 1.9.i To whom cash was given by the assessee company? 1.9.ii On what date cash was given by the assessee company? 1.9.iii Where the cash was given by the assessee company? 1.9.iv How cash was transferred from Jaipur to Mumbai? 1.9.v Who was the person carrying cash on behalf of the assessee company and how much commission did he charge?

1.10. There is no evidence, to show that the money so received actually belonged to the assessee. Nowhere the ld. AO has suggested that the money given by investors had actually flown from the assessee company. In absence of any such cogent evidence on record, no addition can be made to the income of the assessee merely on suspicion. This ratio is laid down by the Hon’ble Jurisdictional High Court of Rajasthan in the case of Shubh Mines Private Limited (Income Tax Appeal No. 96/15), vide its order dated 03.05.2016, in which it was held that “In absence of any cogent evidence on record establishing that the money shown to have received as share application money, was as a matter of fact, unaccounted money belonging to the assessee company, the finding arrived at by the AO, which is based on suspicion, has rightly been held not sustainable in the eyes of law. Suffice it to say that the finding arrived at by the CIT (A), affirmed by the ITAT, which remains a finding of fact, cannot be said to be capricious or perverse…”

1.11. Hon’ble Madhya Pradesh High Court in the case of Peoples General Hospital Ltd. [2013] 356 ITR 65 (Madhya Pradesh) held that “….from the Heads Notes - Section 68 of the Income-tax Act, 1961 - Cash credit [Share application money] - Whether, where assessee had established identity of person providing share application money, burden of proving creditworthiness of said person was not on assessee, and, therefore, addition could not be made as cash credit under section 68 - Held, yes…”

1.12. Further, Hon’ble Karnataka High Court in the case of Arunananda Textiles P. Ltd. (2011) 333 ITR 0116 (Kar.) held that “…It is not for the assessee to place material before the Assessing Officer in regard to the creditworthiness of the shareholders. If the assessee has given the addresses of the shareholders and their identity is not in dispute, whether they were capable of investing, the Assessing Officer shall investigate. It is not for the assessee to establish but it is for the Department to enquire with the investors about their capacity to invest the amount in the shares…." 1.13. Section 68 amended by the Finance Act 2012 w.e.f 1.4.2013 goes to confirm that prior to this amendment the person/entity in whose name such credit was recorded in the books of the company was not expected to offer any explanation about the nature and source of such sum. Reliance is also placed on the recent judgment of the Hon’ble Bombay High Court in the case of M/s. Gagandeep Infrastructure Pvt. Ltd., vide order dated 20.03.2017 wherein it was held that:

CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. “…We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013¬14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced “for removal of doubts” or that it is “declaratory”. Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso….”

Hon’ble Jurisdictional High Court, in the case of ARL 1.14. INFRATECH LTD [2017] 394 ITR 383 (RAJ.), held that “It had been found by the tribunal that the assessee had provided the permanent account numbers of the share applicants. The mode of payment had also been explained. There was no direct or indirect relationship between the assessee company and share applicants. The statements recorded during the survey had no evidentiary value without any supporting documents or evidence. The tribunal was justified in deleting the addition under section 68. “ 1.15. Ld. AO made addition, under section 68, of the Share Application received from the Investor Companies, on the basis of the statements made by Shri Praveen Jain during the course of search and survey proceedings and also on the basis of incriminating documents alleged to have been found from the business premises of Shri Praveen Jain.

1.16. Ld. AO, being a quasi-judicial authority, was duty bound to provide opportunity to cross examine Shri Praveen Jain and also for providing copies of the impugned documents before relying on the same for making additions in the hands of the assessee company. Request for the same was made to ld. AO as evident from Page No. 8 of the order of the ld. AO.

1.17. It is submitted that such statements of Shri Praveen Jain were untested and could become evidence only if opportunity of Cross Examination would have been provided to the assessee company.

1.18. It is well settled that statement of third party cannot be unilaterally utilized against the assessee as evidence to frame the assessment for it is a serious violation of the principles of natural justice. This infringement may as well result in a legally untenable assessment.

1.19. In the case of Ashwani Gupta [2010] 322 ITR 396 (Delhi), addition was made on the basis of the statement of a third party and CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. seized documents. Neither the seized documents were provided to the assessee nor was any opportunity of cross-examination of the adverse party given. Hon’ble Delhi High Court, following its own judgment in the case of SMC Share Brokers Ltd. [2007] 288 ITR 345 (Delhi) deleted the addition on the premise that there was violation of the principles of natural justice. 1.20. Hon’ble Supreme Court in the case Andaman Timber Industries (CIVIL APPEAL NO. 4228 OF 2006), vide its orderdated 02.09.2015, held that “…not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected”

1.21. It was observed by the Apex Court that an order passed in violation of the principles of natural justice is a nullity as held in A.K. Kraipak vs. Union of India A/R – 1970 SC-150 RB. Shree Ram Durga Prasad and Fateh Chand vs. Settlement Commissioner 1989-SC-1038.

1.22. It is submitted that in the statements recorded of Shri Praveen Jain, u/s 132(4), as provided by the ld. AO, during re-assessment proceedings, nowhere the name of the assessee company has been mentioned.

1.23. Attention is also drawn towards the case of Monga Metals Pvt. Ltd. v. ACIT 67 TT] 247 (All.) where Block Assessment made by placing reliance on evidence of third party, without giving assessee an opportunity to cross-examine the third party was held to be illegal and void.

1.24. Information from Director General of Income Tax (Investigation) is not an evidence in itself. It can, at best, be an indicator for arousing suspicion. That suspicion has to be confirmed further by the ld. AO to make that as admissible evidence. When ld. AO alleged that the specific transaction was bogus, heavy onus was on the ld. AO to establish the same considering the fact that assessee company had provided all necessary evidences supporting its claim. Ld. AO failed in discharging the said onus and passed the assessment order without further investigating and producing evidences supporting the rejection of the claim of the assessee company, that the share application was genuine.

Even if it is assumed that Shri Praveen Jain was involved in 1.25. bogus transactions, such fact may be relevant for suspicion but it ipso facto does not lead to conclusion of all transaction of Shri Praveen Kumar Jain would be bogus. Hon’ble Jharkhand High Court in case of CIT, Jamshedpur v/s Arun Kumar Agarwal (HUF) [2012] 26 taxmann.com 113 (Jharkhand) held that “Even in a case where the share CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. broker was found involved in unfair trade practice and was involved in lowering and rising of the share price, and any person, who himself is not involved in that type of transaction, if purchased the share from that broker innocently and bonafidely and if he show his bonafide in transaction by showing relevant material, facts and circumstances and documents, then merely on the basis of the reason that share broker was involved in dealing in the share of a particular company in collusion with others or in the manner of unfair trade practices against the norms of S.E.B.I and Stock Exchange, then merely because of that fact a person who bonafidely entered into share transaction of that company through such broker then only by mere assumption such transactions cannot be held to be a shame (sic - sham) transaction. Fact of tinted broker may be relevant for suspicion but it alone necessarily does lead to conclusion of all transaction of that broker as tinted (sic – tainted). In such circumstances, further enquiry is needed and that is for individual case. Such further enquiry was not conducted in that case.”

1.26. Attention is drawn towards the judgment of Hon’ble Rajasthan High Court in the case of Pooja Agarwal, ITA 385/2011, wherein it was held that no addition can be made if the following conditions are satisfied: • The payments and receipts are through banking channel. • There is no trail which could substantiate that the cash has flown back to the assessee. • The transactions is supported by documents appear to be genuine transaction. • The statements recorded do not have a clear and a distinct remark about the assessee so as to challenge the genuineness of the transaction. 1.27. Below mentioned is the summary of the contentions made herein above, asserting that the additions made by the ld. AO were illegal and deserved to be deleted. • Identity, Creditworthiness of the Investor Company and genuineness of the transactions was established beyond doubt. • Once identity was established ld. AO could have at best made additions in the hands of the Investor Company. • No evidence that the money received as share application money actually belonged to the assessee company put forth by the ld. AO. • Ld. AO solely relied on the statements of Shri Praveen Jain. • Assessee company was not provided copy of the impugned documents found during the course of search of Shri Praveen Jain • No opportunity of cross examination of Shri Praveen Jain was provided.

1.28. The aforementioned facts and legal position were duly submitted before the ld. CIT(A) during the course of the first appellate proceedings. The same were rightly accepted by the ld. CIT(A). In this regard, specific reference is drawn to page numbers 19 and 20 of the CIT(A)'s order. It is respectfully submitted that the findings therein may kindly be considered in the correct perspective.

CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. In view of the above, the ld. CIT(A) was correct in allowing the appeal. Accordingly, it is respectfully submitted that the present departmental appeal deserves to be dismissed.”

9. To support the contention so raised in the written submission ld. AR of the assessee placed reliance on the following evidence / records / decisions:

S. No. Particulars Page No. Copy of Computation 1-5 1. Copy of the letter dated 15.09.2015 submitted to the ld. AO 6 2. Copy of the notice issued by the ld. AO under section 143(2) 7-8 3. Copy of reasons recorded for section 148 9-10 4. Copy of the notice issued by the ld. AO under section 142(1) 11-12 5. Allotment Form 2 filled by company 13-18 6. Copy of the Bank Statement of assessee company 19-26 7. Following documents w.r.t Alka Diamond India Limited: • Application/ Board resolution for shares 27-36 8. • Audited Financial Statements • Bank Statement Following documents w.r.t Javda India Impex Ltd: • Application/ Board resolution for shares 37-49 9. • Audited Financial Statements • Bank Statement Following documents w.r.t Nakshatra Business P. Ltd: • Application/ Board resolution for shares 50-61 • 10. Audited Financial Statements • Bank Statement Following documents w.r.t Olive Overseas P. Ltd: • Application/ Board resolution for shares 62-73 • 11. Audited Financial Statements • Bank Statement Following documents w.r.t Triangular Infocom Ltd: 74-85 12. • Application/ Board resolution for shares CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. • Audited Financial Statements • Bank Statement Copy of Written Submissions filed by the assessee company before 86-106 13. ld. CIT(A) in the first appellate proceedings

Case laws relied upon:

S. No. Particulars Page No.

Copy of the order of ITAT, Jaipur Bench in the case of Padmavati Agrico 1-28 1. (India) Pvt. Ltd. ITA No. 702/JP/2023

Copy of the order of ITAT Mumbai Bench in the case of Centaurus Equities 29-46 2. Pvt. Ltd. ITA No. 4102/Mum/2018

Copy of the order of ITAT, Mumbai Bench in the case of Ambee Investment 47-52 3. & Finance Pvt. Ltd., & 3948/Mum/2017

Brief fact related the disputes are that the assessment proceedings in this case was taken up in the light of the provision of section 147 of the Act. The reasons for invoking that provision are that the revenue has the information received regarding the accommodation entries as share application money from the various companies which are managed and controlled by Shri Praveen Kumar Jain Group, Mumbai during the financial year 2009-10. and consequently, a notice u/s 148 of the Act was issued on 17.03.2015 and duly served upon the assessee on 24.03.2015.

That information came to possession of the ld. AO from the office of the Director General of Income Tax (Investigation), 3rd Floor Scindia House, Ballard Pier, Mumbai vide its office letter dated 03.07.2014 which was addressed to the Income Tax Officer (Inv)(Hqrs) O/s the Director General of Income Tax (inv).

Rajasthan, Jaipur. In that report as is available that the assessee has taken the accommodation entries as share application money Shri Praveen Kumar Jain Group, Mumbai:

Investor Company Amount (Rs.) Alka Diamond India Limited 35,00,000 Javda India Impex Ltd 30,02,500 Nakshatra Business P. Ltd 35,00,000 (Formerly known as Hema Trading Co. P Ltd) Olive Overseas P. Ltd 35,00,000 (Formerly known as Real Gold Trading Co. P Ltd) Traingular Infocom Ltd 35,00,000 (Formerly known as Lexus Infotech Ltd) Total 1,70,02,500

As per the records with revenue they have the information that assessee is one of the beneficiary for taking the accommodation entries as share application money from the above companies which are managed and controlled by Shri Praveen Kumar Jain through his relatives, agents and his accountants detected during the search & seizure operation conducted by Investigation Wing of Income Tax Department, Mumbai in the case Shri Praveen Kumar Jain Group. This information revealed that the income of the assessee for an amount of Rs. 1,70,02,500/- for the assessment year 2010-11 has escaped assessment within the meaning of the provisions of assessment proceedings u/s 147 of the Act was initiated.

Subsequently. notice u/s 142(1) and along with questionnaire was issued to the assessee and notice u/s 143(2) was issued.

Pursuant to those notices the assessee filed the reply and objected to the initiation of the re-assessment proceeding against the assessee company praying there to drop the proceeding or pass a speaking order disposing off the objection take to the re- assessment proceeding. Ld. AO passed a speaking order regarding objections filed against the issuance of notice u/s 148 of the Act on 12.02.2016 and rejected the objections filed by assessee.

In response to the notices so issued filed the details of share capital received during the year, share application form, bank statement of applicant and bank statement of assessee company, Board Resolution and confirmation Financial of the investor company as per the chart filed in the written submission all these documents were also filed in the paper book page 27 to 85.

Ld. AO disregard to the evidence so placed on record and based on the statement of Shri Praveen Kumar Jain recorded and 76 in which he accepted that he had provided accommodation entries as unsecured loan/advance. In the light of that acceptance by him that he provided Accommodation entry for share Application and stated that the shares are purchased by companies under his control which are merely paper companies engaged in the business of providing accommodation entries wherein he get a one-time commission of 1.25% to 2.0% of the total transaction value in case of such transactions also stated that those desirous of taking an accommodation entry in the form of share application gives the cash to him and the same is then transferred to the broker through whom the entry is finally provided, for arranging this entry, one get a onetime commission of about 0.25% of total value of the transaction. Ld. AO relying on the statement of Shri Praveen Jain that assessee had taken accommodation entry as share application money received from the names as listed herein above, asked the assessee to show caused as to why the accommodation entry as bogus share application money received from those five companies for an amount of Rs. 1,70,02,500/- should not disallowed. found accepted because in the statement of Shri Praveen Kumar Jain he accepted that he provided accommodation entry for share Application and stated that the shares are purchased by companies under his control which are merely paper companies engaged in the business of providing accommodation entries. He gets a one-time commission of 1.25% to 2.0% of the total transaction value in case of such transactions also stated that the client desirous of taking an accommodation entry in the form of share application gives the cash to him and the same is then transferred to the broker through whom the entry is finally provided. For arranging this entry he gets a onetime commission of about 0.25% of total value of the transaction, as it is duly accepted based on the statement of Shri Praveen Jain that the assessee had taken accommodation entry as share application many received from M/s Alka Diamond India Ltd./-of Rs. 35,00,000/-, M/s Javda India Impex Ltd. of Rs.30,02,500/-, M/s Nakshatra Business P. Ltd. (M/s Hema Trading Co.P.Ltd.) of Rs. 35,00,000/-, M/s Olive Overseas P. Ltd. (M's Real Gold Trading Co.P. Ltd.) of Ltd.) of Rs. 35,00,000/-.

Ld. AO also noted that the theory of payment by cheque and through banking channels does not make the transaction genuine.

He further observed that ITAT, Jaipur in the case of M/s Kanchwala Gems vis JCIT, dated 10.12.2003 and affirmed by Hon'ble Supreme Court in 288 ITR 10(SC) has held that even payment by account payee cheque is not sufficient to establish the genuineness of the transaction. Further, in CIT V/s Precision Finance Pvt. Ltd. 208 ITR 465 (Cal.), the Hon'ble Calcutta High Court has held that payment made by account payee cheque is not sacrosanct and it would not make an otherwise non genuine transaction genuine. It is a well settled law that strict rules of evidence do not apply to the Income Tax Act and the real test with regard to genuineness of transactions is "Preponderance of probabilities" and not "Beyond reasonable doubt". Ld. AO also placed reliance on the decision f Chaturbhuj Panauj AIR 1969 (SC) 255, Sumati Dayal V/s CIT, 214 ITR 801 (SC), C. Vasant Lal & Co., 45 ITR 206 (SC). As regards the contention of the assessee company to make available (being transactions and cross examination is of no use as sufficient material evidences are already in the possession with the department to disprove the transaction regarding share application as received by the assessee-company from above parties (paper concern of Sh. Praveen Jain Group). The assessee furnished the details of allotment of shares, share application form, bank statement of applicant and replied that the assessee company had received the share application money from the above parties through account payee cheques/ RTCG. The reply found insufficient to prove the genuine nature of the transaction. Ld. AO based on the discussion so made and relying on those decisions noted that it is crystal clear that the primary onus is on the assessee to establish the genuineness of the share application money received. If the investigation done by the department leads to doubt regarding the genuineness of the share applications it is incumbent on the assessee to produce the parties along with necessary documents to establish the genuineness of the transaction. Payment by account payee cheque is not sacrosanct.

Thus, considering that contentions ld. AO hold a view that the Application Money received by it or has failed in discharging this onus. The information received from investigation wing and extract of statement of Shri Praveen Jain & others along with relevant material supplied to the assessee clearly explain the modus operandi of these bogus transaction. Ld. AO noted that the case laws cited by the assessee in its defense also do not help it being distinguishable on facts. Thus, ld. AO considering that statement of Mr. Jain and relying on the decision of Hon'ble Delhi High Court on similar facts in the case of CIT Vs. Nova Promoters & Finlease Pvt. Ltd. (2012) reported in 18 taxmann.com 217 (Delhi) made the addition in hands of the assessee as income of the assessee by invoking the provision of section 68 of the Act added share application of Rs. 1,70,02,500/- from above companies and was treated as non-genuine and bogus Share Application Money and was added to the total income of the assessee-company.

When the assessee challenged that finding of the assessing officer the ld. CIT(A) has allowed the appeal of the assessee taking resort of the decision of the apex court in the case of Lovely Exports. Ld. CIT(A) noted that the assessee-appellant filed various genuineness of the transaction. Thereby the assessee has placed on record, Copy of Return of Income of the investor and schedules reflecting transaction with the appellant, Copies of bank statements evidencing the investment of share application money through banking channels, and Copy of confirmation letters from the investor. Thus, he noted that the assessee discharged its onus as per 68 of the IT Act. Now onus is on AO to disprove the genuineness of the investments. However, the AO has not made efforts to conduct enquiries and to establish the genuineness of the investors. From the materials filed, it is understood that the assessee filed all relevant details which are needed to explain genuineness, creditworthiness and identification of investors. As held in the case of Commissioner of Income Tax Vs. Odisha Corporation Pvt. Ltd that “if the assessee had given names and addresses of the alleged creditors. It was knowledge of revenue that the said creditors were income tax assessees. Revenue apart from issuing notices u/s. 131 at instance of assessee would not pursue matter any further. In view of this, the tribunal was justified in concluding that assessee had discharged burden." As the ld. AO AO could have proceed against the investors if they do not have proper creditworthiness for which the AO cannot penalize the assessee by making addition and reference was made those investor as is available from the record. Further, the AO did not point out any specific instance or any information in the statements recorded by the Investigation Wing in the case of Shri Praveen Kumar Jain Group which reveals the alleged involvement of assessee in taking accommodation entries. AO did not make any efforts to examine the investors on his own by issue of letters u/s.133(6) of the Act. In the absence of any specific information about the assessee against the evidence on record it is not correct to make addition merely on the basis surmises and presumptions of a statement of the third party Shri Praveen Jain. The evidence placed on record clearly proves the identity, capacity and genuineness of the transactions were proved and thus the criteria as prescribed in section 68 has been fulfilled and it does not warrant the source of source to be proved. The decision cited by the ld. AO does not match with the facts of the case. We also note that proviso to section 68 wherein addition on account of Share to the statue book, by Finance Act 2012 w.e.f. 01.04.2013 and therefore considering the explanation about the nature and source of share application money so furnished by assessee by way of various documents as above are in accordance with the provision of law. Considering that aspect of the matter once the credential of the investor is proved about the identity, genuineness and creditworthiness of the investor there is no reason to sustain the addition. We get strength to our view from the decision of the apex court in the case Lovely Exports wherein it has been held that where the Revenue urges that the amount of share application money has been received from bogus shareholders then it is for the Income Tax Officer to proceed by reopening the assessment of such shareholders and assessing them to tax in accordance with law. It does not entitle the Revenue to add the same to the assessee's income as unexplained cash credit. Even otherwise the amendment made in the law cannot apply retrospective as held by Hon’ble Bombay High Court in the case of Commissioner of Income Tax – 1 vs. M/s Gagandeep Infrastructure Pvt. Ltd. reported in 394 ITR 680, wherein it has been held that :

CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd. “(e) We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced “for removal of doubts” or that it is “declaratory”. Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the pre proviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfied. Further it was a submission on behalf of the Revenue that such large amount of share premium gives rise to suspicion on the genuineness (identity) of the shareholders i.e. they are bogus. The Apex Court in Lovely Exports (P) Ltd. (supra) in the context to the pre amended Section 68 of the Act has held that where the Revenue urges that the amount of share application money has been received from bogus shareholders then it is for the Income Tax Officer to proceed by reopening the assessment of such shareholders and assessing them to tax in accordance with law. It does not entitle the Revenue to add the same to the assessee's income as unexplained cash credit.”

Thus, it is very much clear from the provision of section 68 as prevailing for year under consideration the ld. AO can make addition u/s 68 only under two circumstances, (i) the assessee does not offer any explanation about nature and source of such credit or (ii) Explanation offered by Appellant is not up to the satisfaction of Ld. AO. Therefore, here we note that the assessee provided so as prove the identity, credit worthiness and genuineness of the transaction by placing all the records such as Confirmations, Financial Statement and Bank statement of the investor company which were not at all doubted by ld. AO. But all such vital evidence has been ignored solely on the basis of statements of third party recorded by some other officials during the course of search operation conducted. As argued by the ld. AR of the assessee relying on the decision of the Padmavati Agrico(India) Private Limited in it is clear that Shri Praveen Jain has retracted from his statement and as held by our jurisdictional Hon’ble Rajasthan High Court stating that on the retracted statement no addition can be made in the hands of the assessee. This has been held by our High Court in the case of PCIT Vs. M/s. Esspal International P. Ltd. DB dated 03/09/2024 stating that the merely based on the retracted statement no addition can be made. The relevant finding of binding judicial precedent is reproduced herein below:

6. In the background of the aforementioned facts, Mr. K.K. Bissa, the learned standing counsel submits that the findings recorded by the Tribunal are ex-facie erroneous and contrary to the materials on record. The learned counsel for the appellant submits that on examination of the soft data seized and impounded in course of the search proceeding, it was detected that Shirish Chandrakant Shah had provided one-time entry of Rs.3,00,00,000/- to the assessee-company through a broker named Hiren Shah and such transaction was not genuine.

CO No. 03/JP/2024 Amar Pratap Steels Pvt. Ltd.

12. From the record, it is evident that the appellant has furnished each and every document required for proving the identity, creditworthiness of the share applicants and genuineness of the transactions whereas the AO or the DR has not been able to brought on record any evidence to show that cash was paid by the appellant company to Shri Shirish Chandrakant Shah or any other person for obtaining accommodation entries from M/s Ganesh Spinners Ltd., M/s Emplis Projects Ltd., M/s Speciality papers Ltd., M/s Dhanus Technologies Ltd. And M/s Sanguine Media Ltd. in the form of share application money of Rs. 3,00,00,000/- either in the assessment proceeding or remand furnished before the CIT(A) or before us. On similar facts, the Ld. CIT (A) has rightly relied on the decision delivered by the ITAT Jodhpur vide its order dated 08.02.2018 in the case of M/s PSM Realmart Pvt. Ltd. (ITA No.321/Jodh/2017) on and the Coordinate bench of ITAT Delhi in the case of CIT v. Nishit Fincop. P.Ltd. (ITA No.15/Del./2010) where the addition made u/s 68 has been deleted. The ld. CIT(A) further relied upon the decision of Jurisdictional ITAT in the case of PSL Relmart and decision of Supreme Court in the case of Andman Taubar Industries (Civil Appeal No.4228 order dated 02.09.2015) while deleting the addition of Rs.3,00,00,000/- made by the AO u/s 68 is hereby deleted. ................................................................................................

10. The Assessing Officer held as under: ''......................................................................................................

5. Thus, it is clear from above discussion that M/s. Esspal International Pvt. Ltd. Has received accommodation entries of Rs. 3.00 crores from Shri Shirish Chandrakant Shah.

11. Now it is a matter of record that Shirish Chandrakant Shah had retracted his statements given before the Assessing Officer. Even otherwise, an admission by the assessee cannot be said to be a conclusive piece of evidence. The admission of the assessee in absence of any corroborative evidence to strengthen the case of the Revenue cannot be made the basis for any addition. Therefore, the substantial questions of law framed by the appellant pertained to an open issue which stands concluded by the decision of the Hon'ble Supreme Court; one such decision was rendered in "M/s Pullangode Rubber Produce Co. Ltd. v. State of Kerala And Another" (1973) 19ITR18.

Lovely Export and our Jurisdictional High Court’s decision in the case of PCIT Vs. M/s. Esspal International P. Ltd. DB as referred herein above we do not find any infirmity in the finding of the ld. CIT(A). In the light of the discussion so recorded herein above ground no. 1 to 4 raised by the revenue stands dismissed.

12. As we note that while challenging finding of the ld. CIT(A) so far as to the re-opening of the case assessee has filed the cross objection. At the time of the hearing of the appeal the ld. AR of the assessee fairly not pressed the grounds so raised in the cross objection so filed being technical ground challenging the re-opening done in the case of the assessee. In terms of this observation, we considered the cross objection filed by the assessee dismissed as withdrawn.

In the results the appeal of the revenue stands dismissed and that of the cross objection filed by the assessee also stands dismissed.