JOINT COMMISSIONER OF INCOME TAX (OSD) CIRCLE-1(1), BILASPUR vs. M/S OMAX MINERALS PVT. LTD. GADUMARIA, RAIGARH

आयकर अऩीऱीय अधधकरण, रायऩुर न्यायऩीठ, रायऩुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR श्री रविश सूद, न्याययक सदस्य एवं श्री अरुण खोड़वऩया, ऱेखा सदस्य के समक्ष । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अऩीऱ सं./ITA No.94/RPR/2018 (ननधाारण वषा / Assessment Year :2014-2015) JCIT(OSD), Circle-1(1), Bilaspur Vs M/s Omax Minerals Pvt. Ltd. Adumaria, Jharsuguda Road, Raipur PAN No. : AABCO 5774 H (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) .. AND Cross Objection No.09/RPR/2018 (Arising out of ITA No.94/RPR/2018) (ननधाारण वषा / Assessment Year :2014-2015) M/s Omax Minerals Pvt. Ltd. Vs JCIT(OSD), Circle-1(1), Bilaspur Adumaria, Jharsuguda Road, Raipur PAN No. : AABCO 5774 H ननधााररती की ओर से /Assessee by : Shri G.S.Agrawal & Shri N.C.Gupta, ARs राजस्व की ओर से /Revenue by : Shri Sanjay Kumar, Sr.DR सुनिाई की तारीख / Date of Hearing : 26/07/2022 घोषणा की तारीख/Date of Pronouncement : 17/10/2022 आदेश / O R D E R Per Arun Khodpia, AM : The revenue has filed this appeal against the order passed by the CIT(A)-I, Jabalpur, Camp at Bilaspur, dated 27.03.2018, wherein the revenue has raised the following grounds :- 1. Whether on the facts and circumstance of the case and on the points of the law Ld. CIT(A) was justified in deleting the addition of Rs. 2,25,00,000/- made by the AO on account of disallowance u/s. 68 of the Act? 2. Whether on the facts and circumstance of the case and on the points of the law Ld. CIT(A) was justified in deleting the addition of Rs. 2,25,00,000/- made by the AO while genuineness of the transaction and credit worthiness of the investor company was not proved? 3. Whether on the facts and circumstance of the case and on the points of the law Ld. CIT(A) was justified in deleting the

2 ITA No.94/RPR/2018 & CO No.09/RPR/2018 addition of Rs. 2,25,00,000/- made by the AO while genuineness of source of source of share application money/premium was not proved as mandated in section 68 of the Act? 4. Whether on the facts and circumstance of the case and on the points of the law Ld. CIT(A) was justified in deleting the addition of Rs. 2,25,00,000/- made by the AO relying upon the decision in cases which are distinguishable in facts from the case of the assessee ? 5. Whether on the facts and circumstance of the case and on the points of the law Ld. CIT(A) was justified in deleting the addition of Rs. 2,25,00,000/- made by the AO without duly considering the Remand Report submitted by the AO? 6. Whether the Ld.CIT(A) has erred in law in drawing a conclusion which cannot be drawn by any reasonable person or authority, on the material and facts placed before it? 7. The order of the Ld. CIT(A) is erroneous both in law and on facts. 8. Any other ground that may be adduced at the time of hearing of appeal. 2. Facts in brief are that the assessee is engaged in trading and supply of coal and filed its return of income electronically on 25.11.2014 declaring total income at Rs.2,42,06,420/-. The case of the assessee was selected for scrutiny and statutory notices were issued to the assessee, in response to which the assessee filed books of accounts, which were test checked by the AO. During the course of assessment proceedings, after examination of the submission of the assessee and statements of Shri Sushil Kumar Singhal, who was the director of the assessee company, were recorded u/s 131(1) of the I.T. Act 1961, but the explanation of Shri Singhal was not found satisfactory by the Ld AO. Mr Shighal has submitted that an amount of Rs. 3,80,00,000/- was invested by M/s Consolidated Finlease Ltd. in the share capital of assessee company at

3 ITA No.94/RPR/2018 & CO No.09/RPR/2018 face value of Rs.10/- and a premium of Rs. 65/- (Total Rs. 75/- per share). On being asked to explain about the source of investment for M/s Consolidated Finlease Ltd., it is submitted that two other companies namely M/s Shubdhara Trade Link Pvt.Ltd. and M/s R.K. Transport & Construction Company have invested Rs. 2.25 Crore and Rs. 1.55 Crore, respectively in M/s Consolidated Finlease Ltd. Mr Singhal had also informed that in the said two investor companies also, he is holding the post of director. It is emerged from the information obtained from Mr. Singhal that during the Financial year 2013-14 no business activity were carried by M/s Shubdhara Trade Link Pvt.Ltd. and also no income tax return was filed. After deliberations, M/s Shubdhara Trade Link Pvt.Ltd. has been considered as an briefcase company by the AO. Genuineness of the transaction was doubted by Ld AO based on genuineness of the source of source. Following case laws were relied on by the Ld AO:- i) Visaka Sales in ITA No 1493/Kol/2013 (ITAT Kolkatta) " Tax avoidance is an accepted principle. Any person is entitled to adjust its affairs in such manner as to minimize tax liability. However, the methodology and acts done in such cases of capital formation is not tax avoidance. It is more in the nature of tax evasion by money laundering. These transactions have in effect three limbs. The first limb is the creation of the shell companies with substantial share capital which is balanced with inventories in the form of shares in other shell companies. The second limb is the transfer of such shell companies to persons who desire to use such substantial share capital companies for converting their unaccounted money into accounted funds and use such shell companies to do legitimate business. The third limb is when the shell companies after being taken over, the assets in the form of inventories are encashed whereby the unaccounted monies are laundered and brought into the company for conducting the legitimate business........... ...................It is relevant because the creation of the shell companies and introduction of the share capital is not the only issue

4 ITA No.94/RPR/2018 & CO No.09/RPR/2018 that comes up. This is but the tip of the iceberg. A perusal of the Balance sheet and Profit & loss account in the case of the assessee shows that the share application monies received by the assessee along with the premium are represented in the Balance sheet in the form of current assets being the unquoted equity shares in other such companies. That is the share application money received by the assessee is used for making further investments in other such similar shell companies from whom cash is taken and rerouted through cheques. These shell companies which are acquired by the interested third parties purchase these companies at a fractional amount of the value of the shares. ........................These are cases of clear human ingenuinity with the clear and contumacious intention to defraud the revenue. It is not the handiwork of one person alone. One person has created the shell, another has funded the shell with an intention to launder unaccounted funds and alter having acquired the shell has used it for converting its funds also. There is no information as to who are the latest beneficiaries of such shell companies and for what purpose the companies are being used. This is just the reason why the provision of section 56(viib) has been introduced." Thus, creation of shell companies and subscribing for shares at high premium constitutes tax evasion by money laundering. It is a case of clear human ingenuinity with the clear and contumacious intention to defraud the revenue. ii) Mcdowell & Co Ltd Vs CTO (1985) 22 Taxmann 11(SC), wherein the Hon’ble Supreme Court has held that"Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by restoring to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. Courts are now concerning themselves not merely with the genuineness of a transaction, but with the intended effect of it for fiscal purposes. No one can now get away with a tax avoidance project with the mere statement that there is nothing illegal about it." 3. Later, Ld AO concluded that out of total share capital and share premium of Rs. 3.80 Crore received by the assessee company, the amount of Rs. 2.25 Crore received from M/s Shubdhara Trade Link Pvt.Ltd. by the assessee, M/s Omax Mineral Pvt. Ltd. is nothing but circulation of its own money by the assessee company which is circulated

5 ITA No.94/RPR/2018 & CO No.09/RPR/2018 through Kolkata based briefcase company in terms of share application/premium in the form of accommodation entry. Accordingly, the AO added the same as unexplained cash credit and disallowed the same u/s.68 of the Act. 4. Aggrieved with the order of the AO, the assessee filed an appeal before the CIT(A) and the CIT(A) allowed the appeal of the assessee. Against which now the revenue is in appeal before the Tribunal. 5. The sole issue of controversy in this appeal now is “whether Ld. CIT(A) was justified in deleting the addition of Rs. 2,25,00,000/- made by the AO on account of disallowance u/s. 68 of the Act?” 6. Arguments were initiated by Ld Sr DR. He drew our attention to the assessment order, all facts as mentioned herein before were read and reiterated. Ld Sr DR also took us to para 6.2.3 of the order of Ld CIT(A) and shown us the decision of the Ld CIT(A) on this issue. Ld Sr DR, after reading all the findings of Ld AO and Ld CIT(A) has submitted that the AO had decided the issue on factual matrix of the case after applying judicial principle’s laid down by the ITAT Kolkatta and Hon’ble Apex Court, referred to supra, however Ld CIT(A) has not properly appreciated the facts of the case, when the facts emanated are well discovered by the Ld AO that the source of source of the investment was from a briefcase company, how the transaction can be treated as genuine. Thus, the order of CIT(A) is erroneous and liable to be annulled and order of Ld AO deserves to be restored.

6 ITA No.94/RPR/2018 & CO No.09/RPR/2018 7. In defence, Ld. AR of the assessee submitted that the order of CIT(A) was after thoughtfully considering the facts and law applicable in the present case and has rightly deleted the addition. Ld AR submitted that the appellant had duly discharged its burden cast u/s 68 and proviso to prove identity, creditworthiness and genuineness of the share applicant/transaction. Appellant has even complied with the proviso of section 68 regarding source of source. It is a fact that Shri Sushil Kumar Singhal. Director of the assessee company is also director in the investor companies. Ld AO has reach a conclusion that the transaction is highly doubtful without explaining about the doubt he has. Enquiry conducted by the Ld AO was behind the back of the assessee, no opportunity to controvert was provided. In view of this submissions, Ld AR relied fully on the judgment of Ld CIT(A), drew our attention to the decision para of the order of Ld CIT(A), which reads as under: 6.2.3. Decision:-I have carefully considered the submission put forth & the documents furnished on behalf of the appellant, perused the facts of the case and the observation of the AO both in the impugned assessment order, remand report & rejoinder thereon and other material evidences brought on record and these grounds of appeal relating to the addition of Rs.4,13,41,500/- made on account of unexplained share application money and premium received are decided as under:- 1. Admittance of Additional evidences- (i) The assessee has filed as additional evidence, the assessment order dated 15.12.2016 of Consolidated Finlease Ltd for the assessment year 2014-15, Confirmation of account and copy of audited accounts and income tax return M/s ShubhdaharaTradelinkPvt Ltd. These additional evidences were forwarded to the AO vide this office letter F.No. CIT(A)/BSP/ Remand Report/ 17-18 dated 20.02.2018. In the the remand report dated 07.03.2018 the AO has not raised any specific objection to the admission of these additional evidences. In the interest of justice the additional evidences

7 ITA No.94/RPR/2018 & CO No.09/RPR/2018 filed by the assessee are admitted and appeal is decided after considering these additional evidences. 2. ln GOA Nos. 4 to 7 , the addition of Rs. 2,25,00,000/- made out of share application and share premium received at Rs. 3,80,00,000/- by the appellant company are decided as under:-. (i) The assessee has received share application money of Rs. 3,80,00,000/- from M/s Consolidated FinleasePvt Ltd. during the previous year relevant to assessment year 2014-15. The assessee company has issued equity shares of face values of Rs. 10/- on the premium of Rs. 65/- per share. As per the audited accounts the book value per share was Rs. 76/-. (ii) During the previous year relevant to assessment year 2014-15 M/s Consolidated Finlease Ltd., the share applicant company, has raised share capital of Rs. 1,55,00,000/- from M/s R.K. Transport and Construction Pvt Ltd and Rs. 2,25,00,000/- from M/s Shubhadhara Tradelink Pvt Ltd. The AO accepted the share application money of Rs. 1,55,00,000/- received by M/s Consolidated Finlease Ltd. from M/s R. K. Transport and Construction Pvt Ltd, but did not accept the share application money of Rs. 2,25,00,000/- received by M/s Consolidated Finlease Pvt Ltd. from M/s ShubhadharaTradelink Pvt Ltd. For this reason the AO of assessee added to the income of the assessee Rs.2,25,00,000/- being the amount received by the assessee company from M/s Consolidated FinleasePvt Ltd. (iii) During the assessment proceeding the assessee has filed confirmation letter, copy of ITR for assessment year 2014-15 , Copy of computation of income, Certificate of commencement of business, NBFC certificate issued by RBI, audited accounts for the financial year 2013-14. Further the assessee has filed as additional evidence the copy of assessment order of M/s Consolidated Finlease Pvt Ltd for the assessment year 2014-15 passed by the ITO Ward 6(3) New Delhi on 15.12.2016. The assessee has also filed as additional evidence confirmation of accounts of M/s Consolidated FinlesePvt Ltd in the books of M/s Shubhdahara Tradelink Pvt Ltd and income tax return of assessment year 2013-14 and copy of bank statement of M/s Shubhdahara Tradelink Pvt Ltd from where it has given share application money of Rs. 2,25,00,000/- to M/s Consolidated Finlease PVt Ltd. As per the remand report no income tax return for the assessment year 2014-15 was filed by M/s Shubhdhara Tradelink Pvt Ltd. (iv) The AO has made the addition because the M/s Consolidated Finlease ltd has received Rs.2,25,00,000/- as share application money from M/s Shubdhara Tradelink Pvt Ltd. and in the opinion of the Id AO M/s Shubhdahara Tradelink Pvt Ltd is

8 ITA No.94/RPR/2018 & CO No.09/RPR/2018 briefcase company and was not carrying on any business activity during the previous year relevant to assessment year 2014-15 . (v) During the course of assessment proceeding the AO of the assessee issued commission to the ITO ward 6(3) New Delhi on 28.10.2016 on the issue of share capital invested by M/s Consolidated Finlease Pvt Ltd in the assessee company. In reply dated 18.11.2016 the ITO Ward 6(3) informed the AO of the assessee company that assessment proceeding of M/s Consolidated Finlease Pvt Ltd is in progress. Subsequently the assessment order of M/s Consolidated Finlease Pvt Ltd for the assessment year 2014-15 was passed on 15.12.2016 in which the share capital of Rs. 2,25,00,000/- received by M/s Consolidated Finlease Pvt Ltd from M/s Shubhdahara Tradelink Pvt Ltd was treated as explained by the ITO Ward 6(3) New Delhi and for this reason no addition was made by the ITO Ward 6(3) in the assessment order of M/s Consolidated Finlease Pvt Ltd. For this reason there is substantive force in the submission of the Id AR that source of source of share capital received by the assessee during the previous year relevant to assessment year 2014-15 is fully explained. (vi) In the case of CIT vs. Abdul Aziz (2012) 251 CTR 0058 the hon'ble Chhatishgarh High Court has held as under:- Cash credits—Genuineness of transaction and creditworthiness of creditors—Proof of—AO made addition under s. 68 on the ground that 27 creditors had not proved creditworthiness of creditors—CIT(A) and Tribunal deleted addition made by AO— Held, CIT(A) has examined all statements and depositions made by the creditors including their source of -income—AO has not made any independent enquiry to disprove creditworthiness of creditors—CIT(A) rightly held that observation of AO was on basis of surmises and conjectures— Findings recorded by CIT(A) and affirmed by tribunal are based on proper appreciation of facts and are not perverse being correlated with each and every transaction —Further issue is purely question of facts—No question of law, more so substantial question of law, arises for consideration of High Court (vii) In the case of CIT vs. Pithampur Conzima (P) LTD. (2000) 244 ITR 0442 the hon'ble MP High Court has held as under :- 2. It emerges that assessee introduced unsecured loan of Rs. 5,12,417.90 in the name of its directors and wife of one of its directors. A part of the unsecured loan was accepted by the Revenue and a part of it is disallowed. Assessee took an appeal to the Tribunal and explained that forums below had overlooked the record placed before them which showed that credits given to the assessee-company were duly declared by

9 ITA No.94/RPR/2018 & CO No.09/RPR/2018 the creditors in the new returns. Upon this Tribunal concluded that the investment in the assessee-firm was duly explained and no addition is called for in the hands of the assessee and deleted the addition. Revenue sought reference which was rejected. Hence, this application. 3. It becomes clear that Tribunal had accepted the explanation of assessee which showed that credit given was duly declared by the creditors in the new return, and therefore, deletion of addition was on the basis of the satisfaction reached by the Tribunal and on appreciation of material before it. The matter accordingly does not give rise to any question of law warranting dismissal of this application which is accordingly dismissed. (viii) Considering the above factual and legal position I am of the view that the assessee company has discharged its onus in respect of identity, capacity, genuineness and source of investment of M/s Consolidate Finlease Pvt Ltd. Accordingly the AO was not justified in treating share capital of Rs. 2,25,00,000/- received by the assessee company from M/s Consolidated Finlease Pvt Ltd during the previous year relevant to assessment year 2014-15-as unexplained and adding the same to the income of the assessee. (ix) In result, the addition of Rs. 2,25,00,000/- is directed to be deleted and these grounds of appeal are allowed.

10 ITA No.94/RPR/2018 & CO No.09/RPR/2018 been done the First Appellate Authority was fully justified in taking the view that it was open to the department to take recourse of Section 131 or Section 133(6) of the Act is they were to further proceed. That not having done so, the First Appellate Authority was within its jurisdiction to conclude on facts and law, in favour of the assessee. So much so, the impugned decision of the Tribunal stands faulted on a substantial question of law referable to the contents of section 68 of the Act and the failure of the Revenue to take recourse to sections 131 and 133(6) of the Act, in case of the assessee, where the primary onus u/s 68 of the Act stood discharged by the assessee." 3. CIT v. Abdul Aziz, (2012) 251 CTR 0058 CG "CIT(A) has examined all statements and deposition made by the creditors including their source of income - AO has not made any independent enquiry to dispute to creditworthiness of creditors - CIT(A) rightly held that observation of AO was on basis of surmises and conjectures." 4. ITO v. KoushalAgrawal, (2013) 22 ITJ 233 Raipur ITAT "Considering the facts of the case in the light of the judicial pronouncements hereinabove, to sum up, we are of the view that the assessee has proved the identity, genuineness of the transaction and prima facie the capacity of the lenders/depositors. If the revenue alleges that what is apparent is not the real then onus upon the revenue which the revenue has failed to discharge. The onus upon the assessee is only to establish the prima facie the capacity of the lenders. We find that every cash creditors have given explanation in his/her statement about the source of income. In our humble opinion assessee has successfully discharged the onus cast upon him by the virtue of section 68 of the Act. We, therefore, do not find any reason to interfere with the finding of id. CIT(A)." 5. CIT V/s P. Mohankala, (2007) 291ITR 278 SC "The expression "the assessee offers no explanation" means the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. The opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on the record. The opinion of

11 ITA No.94/RPR/2018 & CO No.09/RPR/2018 the Assessing Officer is required to be formed objectively with reference to the material on record. Application of mind is the sine qua non for forming the opinion. The burden is on the assessee to take the plea that, even if the explanation is not acceptable, the material and attending circumstances available on record do not justify the sum found credited in the books being treated as a receipt of income nature." 6. CIT v. Gagandeep Infrastructure P. Ltd. (2017) 394 ITR 680 (Bom HC) "That the three essential tests laid down by courts, namely, the genuineness of the transaction, identity and the capacity of the investor of the share application money along with premium, had all been examined by the Appellate Tribunal and on facts found satisfied. If the Department took the view that the amount of share application money had been received from bogus shareholder, than it was assessing authority to proceed by reopening the assessment of such shareholder and assessing them to tax. It did not entitle the department to add the . money received to the assessee's income as unexplained cash credit. 7. ITO v. NeelkanthFinbuild Ltd. (2015) 70 SOT 0368 (Delhi) "Hon'ble Supreme Court of India in case of CIT v. Lovely Export 299 ITR 261 (SC) which has confirmed the order of Hon'ble Delhi High Court has held that once the identity of the shareholder have been established, even if there is a case of bogus share capital, it cannot be added in the hands of company in less any adverse evidence is not on record." 8. CIT v. Divine Leasing and Finance Ltd.(2008) 299 ITR 268 (Delhi) "Held dismissing the appeals, that the tribunal had categorically held that the assessee "has discharged its onus of proving the identity of the shares subscribers". Had any suspicion still remained in the mind of the AO he could have initiated "coercive process" but this course of action had not been adopted. The deletion of the additions was justified." 9. ACIT v. Venkateshwarlspat P. Ltd.(2009) 319 ITR 393 Share application money - Assessee had produced additional evidence before the CIT(A) regarding

12 ITA No.94/RPR/2018 & CO No.09/RPR/2018 shareholders names, addresses, etc. -Further, for subsequent assessment year, the shareholders investment was confirmed during the assessment proceedings - In respect of share application money, Department is free to proceed to reopen shareholders individual assessments in accordance with law, but it cannot be regarded as undisclosed income of the assessee - company -Tribunal was therefore justified in deleting addition and no substantial question of law arises - CIT v. Lovely Exports P. Ltd (2008) 216 CTR (SC) 195: (2008) 6 DTR (SC) 308 followed. 10. CIT v.Gangeshwari Metal Private Limited(2014) 361ITR 10 (Delhi) "As can be seen from the above extract, two types of cases have been indicated. One in which the Assessing Officer carries out the exercise which is required in law and the other in which the Assessing Officer "sits back with folded hands" till the assessee exhausts all the evidence or material in possession and then come forward to merely reject the same on the presumptions. The present case falls in the latter category. Here the Assessing Officer, after noting the facts, merely rejected the same." 11. CIT Vs P.K. Noorjahan 237 ITR 570 SC "In other words, a discretion has been conferred on the Income Tax Officer under section 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case." 12. CIT v. Orchid Industries P. Ltd,(2017) 397 ITR 0136 (Bom) "The Tribunal has considered that the Assessee has produced on record the documents to establish the genuineness of the party such as PAN of all the creditors along with the confirmation, there bank statements showing payment of share application money. It was also observed by the Tribunal that the Assessee has also produced the entire record regarding issuance of shares i.e. allotment of shares to these parties, their share application forms, allotment letters and share certificates, so also the books of account. The balance sheet and profit & loss account of these persons discloses that these persons had sufficient funds in their accounts for investing in the shares of the Assessee. In view of these voluminous documentary evidence, only because those persons had not appeared before the Assessing Officer would not neglect the case of the

13 ITA No.94/RPR/2018 & CO No.09/RPR/2018 Assessee. The judgment in case of Gagandeep Infrastructure P. Ltd. (supra) would be applicable in the facts and circumstances of the present case." 13. PCIT v. Laxman Industrial Resources Ltd, Delhi High Court Order Dt. 14.03.2017 "This court notices that the assessee had provided several documents that could have showed light into whether truly the transactions were genuine. It was not a case where the share applicants are merely provided confirmation letters. They had provided their particulars, PAN details, assessment particulars, mode of payment for share application money, i.e. through banks, bank statements, cheque numbers in question, copies of minutes of resolutions authorizing the applications, copies of balance sheets, profit '& loss account for the year under consideration and even bank statements showing the source of payments made by the companies to the assessee as well as their master debt with ROC particulars. The AO strangely failed to conduct any scrutiny of documents and rested content by placing reliance merely on a report of the Investigation Wing. This reveals spectacular disregard to an AO's duties in the remand proceedings which the Revenue seeks to inflict upon the assessee in this case. No substantial question of law arises. This appeal is dismissed." Following case laws are also relied upon 1. Orissa Corporation (P) Limited 159 ITR 78 2. CIT v. Stellar Investment Ltd 251 ITR 263 3. CITv.ARL Infratech Ltd, (2017) 394 ITR 383 (Raj.) 4. Guruprerna Enterprises v. ACIT ITAT No. 255, 256 & 257/Mum/ 2010 5. Pr. CIT v. Softline Creations P. Ltd. 387 ITR 636 (Del) 6. CIT v. Nipuan Auto P. Ltd. 227 Taxman 147 (Delhi)(Mag) 7. CIT v. Metachem Industries 245 ITR 160 (MP) 8. DCIT v. Rohini Builders 256 ITR 360 (Guj) 9. Nemichand Kothari v. CIT 264 ITR 254 (Gauhati) 10. CIT v. Sophia Finance Ltd. 11. CIT vs Value Capital Services Pvt Ltd., 307 ITR 334 9. We have heard rival submissions and perused the material evidence available on record.

14 ITA No.94/RPR/2018 & CO No.09/RPR/2018 10. On perusal of the report of the ITO, Ward 6(3), New Delhi shown to us at page 1 of the paperbook of the assessee regarding impugned investment by M/s Consolidated Finlease Ltd. in the assessee company. This report has confirmed the transaction of investment without any doubt on identity or genuineness of the transaction also no specific comment on the creditworthiness of the invester company were offered in the said report. 11. On perusal of the order of Ld CIT(A), it is observed that during the appellate proceedings the assessee had filed an application u/r 46A with a request to admit certain additional evidences which could not be produced before the AO. After allowing additional evidence, the matter was remanded to the Ld AO for his examination and to submit a report on the same. In remand report AO prayed to reject these documents and all the contentions of the assessee saying that the additional documents submitted by the appellant are of no help in the matter, these are only piece of papers, submission of the same is an afterthought and are not able to substantiate the genuineness of the transaction. Ld AO has not brought on record any cogent evidence to prove that the transaction was bogus, no independent enquiry to disprove creditworthiness of the investor was conducted. On this aspect Ld CIT(A) appreciated the facts correctly and has rightly relied on the findings of jurisdictional high court of Chhatisgarh in the case of Abdul Aziz (supra), we concur with the view of the Ld CIT(A) on the issue.

15 ITA No.94/RPR/2018 & CO No.09/RPR/2018 12. Here it is to be understood that a decision should taken on the basis of documents or evidence produced, after proper appreciation of the same to arrive at logical conclusion. If something against the available facts is concluded, the same can only be subscribed to when cogent evidence to prove such adverse finding could be brought on records. Since, Ld AO has made allegation in the circumstance that no business activity by the Source of source company, thus the source of source was a briefcase company, the adverse inference was drawn on genuineness of the transaction without any convincing material, therefore such contentions of Ld AO are unacceptable. Allegation, that the investment in share capital and share premium of the company was nothing but circulation of assessee’s own money, circulated through Kolkatta based Briefcase Company, could not be defended by revenue with valid corroborative evidence, thus rejected. Case laws referred by Ld AO were also not supporting the contention of the revenue, same are disguisable on facts, that in the case of Visaka Sales (supra) the beneficiaries of the shell companies were not known, but in present case director of the assessee company is also director in the investor company. In other case i.e. Mcdowell & Co. Ltd. (supra) was regarding colourable device for tax planning but such contention of the Ld AO cannot be endorsed to in absence of proving the same with some documentary evidences. 13. With a carefully consideration of aforesaid facts under the circumstances of the instant case, with perusal of the legal precedence available before us, we are of the considered view that the opinion taken

16 ITA No.94/RPR/2018 & CO No.09/RPR/2018 by the Ld CIT(A) was a proper appreciation of the facts and law, thus the same is approved and upheld. Consequently the ground No 1 to 5 of this appeal of revenue are dismissed. 14. Ground no 6 to 8 are general in nature, thus the same are dismissed. 15. In the result appeal ITA No.94/RPR/2018 of revenue is dismissed. 16. Since, the appeal of revenue ITA No.94/RPR/2018 is rejected and order of Ld CIT(A) is upheld, Cross Objection No.09/RPR/2018 of the assessee in support of order of Ld CIT(A) is also dismissed. Order pronounced in pursuance to Rule 34(4) of ITAT Rules, 1963 on 17/10/ 2022. Sd/- Sd/- (RAVISH SOOD) (ARUN KHODPIA) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER रायऩुर/Raipur; ददनाांक Dated 17/10/2022 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant- प्रत्यथी / The Respondent- 2. आयकर आयुक्त(अऩीऱ) / The CIT(A), 3. आयकर आयुक्त / CIT 4. विभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, रायऩुर/ DR, ITAT, 5. Raipur गार्ड पाईऱ / Guard file. 6. आदेशानुसार/ BY ORDER, सत्यावऩत प्रयत //True Copy// (Assistant Registrar) आयकर अऩीऱीय अधधकरण, रायऩुर/ITAT, Raipur