HAMARA SAMAY TV NEWS NETWORK PVT. LTD.,DELHI vs. DCIT, CIRCLE- 11(1), NEW DELHI

ORDER Per Chandra Mohan Garg:- This appeal has been filed against the order of CIT(A)-22, New Delhi dated 21.09.2018 for AY 2013-14. 2. The grounds have been raised by the assessee are as follows:-

2. That the learned Commissioner of Income Tax (Appeals), has erred both in law and on facts in upholding the addition made us 68 of the Act of Rs. 4,35,49,200/- representing the credits in share capital account, being the amount subscribed by M/s Sabka Media Pvt. Ltd. who had confirmed the contribution made as representing share application.

3. That while upholding the addition, the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on fact in disregarding the evidences furnished by the assessee and has sustained the addition purely on suspicion, as such, addition made by the learned AO and sustained by the learned CIT(A) is unsustainable in law.

4. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as in facts in confirming the adverse findings recorded by the Ld. AO are perverse and have been recorded by arbitrarily brushing aside the submissions/evidence/material produced on record and hence such findings are vitiated and deserve to be deleted.

5. That in the circumstances of the case and in law, the impugned order passed by the Ld. Commissioner of Income Tax (Appeals) is based upon assumption, presumptions, whims and fancies, conjectures, surmises, preconceived notions and incorrect application of law and therefore liable to be quashed.

3. The learned counsel of assessee submitted that learned Commissioner of Income Tax (Appeals), has erred both in law and on facts in upholding the addition made us 68 of the Act of Rs. 4,35,49,200/- representing the credits in share capital account, being the amount subscribed by M/s Sabka Media Pvt. Ltd. who had confirmed the contribution made as representing share application. He further submitted that the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on fact in disregarding the evidences furnished by the assessee and has sustained the addition purely on suspicion, as such, addition made by the learned AO and sustained by the learned CIT(A) is unsustainable in law. The learned counsel vehemently pointed out that the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as in facts in confirming the adverse findings recorded by the Ld. AO are perverse and have been recorded by arbitrarily brushing aside the submissions/evidence/material produced on record and hence such findings are vitiated and deserve to be deleted. Lastly, the ld. counsel drawing out attention towards orders of the authorities below submitted that the impugned order passed by the Ld. Commissioner of Income Tax (Appeals) is based upon assumption, presumptions, whims and fancies, conjectures, surmises, preconceived notions and incorrect application of law and therefore liable to be quashed. Therefore addition made by the Assessing Officer and uphold by the ld. CIT(A) may kindly be deleted.

4. The ld. Senior DR drew our attention towards written submissions on behalf of the revenue filed on 09.02.2023 and submitted that the Assessing Officer after relying upon various judgments noted in para 4 to 9 of assessment order also noted in para 7 that the assessee company has failed to discharge its onus to substantiate identity, creditworthiness of share capital investor and genuineness of transaction and thereafter rightly made addition in hands of assessee which is quite correct and sustainable. The learned Senior DR further drawing our attention towards relevant para 7.1 to 7.17 submitted that even before the learned CIT(A) the assessee again failed to discharge onus lay on it as per requirement of sec 68 of the Act and thus rightly concluded that there was onus on the appellant produce directors/principal officers of share applicant company as its own witness for examination by the revenue authorities and thus as per various judgments relied by the Assessing Officer under the facts and circumstances of the case the Assessing Officer was right in making addition in the hands of assessee. Therefore, the learned Senior DR submitted that appeal of the assessee may kindly be dismissed.

5. On careful consideration of above submission, first of all, we note that the assessee engaged in the business of TV News & Teachers Agency on a worldwide network. The Assessing Officer noted that the assessee has received share capital from Sabka Media Pvt. Ltd. of Rs. 4,35,49,200/- out of which face value was Rs. 9,67,760/- and share premium was Rs. 4,25,81,440/-. On being asked by the Assessing Officer the assessee submitted ITR detail and balance sheet of Sabka Media Pvt. Ltd., alongwith copy of bank statement with Yes Bank account no. xxxx1581. On perusal of said documentary evidence particularly statement of bank account the Assessing Officer noted that there were hundreds of credit and debit entries that is money was coming and going out and there was only funds transfer from/to the bank account of assessee and sources of fund were unknown. The Assessing Officer also noted that there was no revenue for business activity of said investor company and in fact no business activities were carried out by the assessee during relevant financial period. The Assessing Officer annexed the bank statement as annexure three to the assessment order.

4. The reply of the assessee has been considered within the purview of section 68 of the Income Tax Act, 1961, which reads as under:- "Cash credits.

As regards the credit worthiness this is to be pointed out that it is not at all proved because the income of the subscriber as per profit & loss account is Nil or a very small amount. Therefore the credit worthiness is not at all proved. The onus to prove the identity, genuineness of transaction and credit worthiness of subscriber is on the assessee. The assessee has failed to discharge the primary onus i.e. identity of the subscriber because none of them was produced. VII. It has been submitted that the circumstantial evidence and test of human probabilities would come into play only when the basic test of direct and factual evidence fails. In the instance case the assessee was required to produce the subscribers because it was must to verify whether the signatures in share application form or the confirmation are genuine. This can be verified only after production of the subscriber before the Assessing Officer. It is pertinent to mention that while coming to a particular conclusion, the Full Bench of Delhi High Court in the case of Sophia Finance Limited 205 IT 98 (Del) duly considered the case of Stellar Investment Limited. Even in the case of M/s Lovely Exports Private Limited the Hon'ble Delhi High Court in para 4 observed as under :- "Reference to section 68 of the IT Act is conspicuous by its absence, the Stellar Investment Limited ratio cannot be stressed to the extent that it partakes as a reflection on section 68, when the inquiry pertained only to section 263." The Hon'ble Delhi High Court while deciding the case cited by the assessee i.e. Lovely Exports Limited & Devine Leasing and Finance Limited (being combined order) it has been held as under:- "In the case of public issue the company concerned cannot be expected to know every detail pertaining to identity as well as financial worth of each of its subscribers. The company must however maintain and make available to the Assessing Officer for his perusal all the information contained in the share application documents. The Hon'ble Court clearly held that in case of private placement, the legal regime would not be same. A delicate balance must be maintained while walking the tight rope of section 68 and 69. The burden of proof can seldom be discharged to the hilt by the assessee. However, if the Assessing Officer harbours doubts of the legitimacy of any subscription, he is empowered rather duty bound to carry out investigations. In that case the Tribunal clearly noted that the assessee was a public limited company and subscriptions were received from public at large through banking channel and the shares were allotted in consonance with the provisions of the securities contract (Regulation) Act, 1956 as also the rules and regulations of Delhi Stock Exchange. In para 12 the Hon'ble Delhi High Court has clearly differentiated the cases of share capital of private limited company from public limited company by saying "in the case of private placement, the legal regime will not be the same". Therefore, the case law cited are not applicable to the case of the assessee as it is a private limited company closely held company. Hon'ble Delhi High Court in a latter decision in CIT v. Oasis Hospitalities Private Limited (2011) 333 IT 119 held as under :

"We are of the view that ratio laid down in Steller Investment Ltd. (2001) 251 |TR 263 is applicable only in those cases where the assessee is a limited company and the shares were quoted in the stock exchange. But whenever the issue is subscribed without quoting it on the stock exchange by a limited or private limited company, the Presumption is very strong against the assessee that subscription is available only to the closely connected persons of the assessee. Once the inference is against the assessee that the issue is subscribed by its closely connected person, the onus is upon the assessee to prove the identity of the subscribers and their creditworthiness." The Hon'ble Delhi High Court in the case of Divine Leasing & Finance Limited; 299 IT page 282 (Del) held that "The Assessing Officer is duty bound to investigate the credit worthiness of the creditor/subscriber, the genuineness of the transaction and the veracity of the repudiation." Since the share applicants'/share subscribers identity is not proved, therefore, the assessee cannot be permitted to take shelter of technicalities. Even otherwise, website existence on the Company Law Board is not a sole proof that in fact the share applicants are in existence. Technicalities also help those who are with clean hands. It was fairly clear that in spite of many opportunity provided as categorically noted above in the order, the assessee merely filed certain documents which did not prove the identity but did not produce any of the share applicants/subscribers. It is to be pointed out again that the share applicants are the companies which are involved in providing accommodation entries. Even as per preponderance of probabilities, all facts pointed above go against the assessee as laid down by the Hon'ble Apex Court in the case of Sumati Dayal (214 ITR 801).

6. In view of the discussion made above the assessee's submissions are not acceptable. However reliance is also placed on the orders as discussed below:- In the case of Commissioner of Income-Tax.v/s Nova Promoters And Finlease (P) Limited. 342 IT 169 the Hon'ble Delhi High Court has decided the issue in favour of Revenue on similar facts. The Revenue filed appeal against the order of the Tribunal confirming the deletion of the addition of Rs. 1,18,50,000 as well as the addition of Rs. 2,96,250, both made under section 68 of the Act. The following substantial questions of law arise in the appeal: "(1) Whether the Tribunal was right in law in confirming the order of the Commissioner of Income-tax (Appeals) deleting the additions of Rs. 1,18,50,000 and Rs. 2,96,250 both made under section 68 of the Act, on the ground that the identity and credit-worthiness of the share applicants as well as the genuineness of the transactions were proved? (2) Whether the order of the Tribunal confirming the deletion of the addition of the aforesaid two amounts was perverse having regard to the evidence and the material on record?"

Regarding receipt of share application money by cheque and from the companies and genuineness of transaction the Hon'ble Delhi High court gave the finding as below:- "The findings of the Tribunal cannot be upheld as they are based on irrelevant material or have been entered by ignoring the relevant material. The finding that the share application monies have come through account payee cheques is, at best, neutral. The question required a thorough examination and not a superficial examination. If anything, in the light of the material gathered by the Investigation Wing about the modus operandi followed by the entry providers, the statements of Mukesh Gupta and Rajan Jassal the plea that the money was sent through banking channels loses all force. The Tribunal ought to have seen that the modus operandi involves receipt by the entry providers of equivalent amount of cash from the assessee. The fact that the companies which subscribed to the shares were borne on the file of the ROC is again a neutral fact. Every company incorporated under the Companies Act, 1956, has to comply with statutory formalities. That these companies were complying with such formalities does not add any credibility or evidentiary value. In any case, it does not ipso facto prove that the transactions are genuine. The finding that Mukesh Gupta and Rajan Jassal were involved with only 4 out of the 16 companies which advanced monies is only part of the picture. They had stated before the Investigation Wing that their operations were routed through 22 companies whose names were also given. Fifteen out of those 22 companies have subscribed to the shares of the assessee. Therefore, even if they were not directors of 12 companies, the fact remains, as admitted by them, that their entry providing operations were carried out through 22 companies, 15 of which have subscribed to the shares of the assessee-company. The Tribunal has ignored this vital aspect and has examined the issue rather superficially. Compliance with the statutory norms and requirements is only one aspect, but in the present case a deeper scrutiny was required and the camouflage adopted was the primary aspect that required adjudication. This aspect has been ignored. Bona fide and genuineness of the transactions was the issue." The Hon'ble Delhi High court gave the finding on the question referred as below:- "In the light of the above discussion, we are unable to uphold the order of the Tribunal confirming the deletion of the addition of Rs. 1, 18,50,000 made under section 68 of the Act as well as the consequential addition of Rs. 2,96,250. We accordingly answer the substantial questions of law in the negative and in favour of the Department. The Hon'ble Calcutta High Court in the case of Nivendan Vanijya Niyojay Limited (page 14) held as under :- "After the initial onus was discharged by assessee, the Income Tax authorities have made enquiries and had communicated the result of the enquiry to the assessee and required the assessee to produce the subscribers who provided such credit, in order to establish its case. But the assessee did not do so. On this basis addition made by the A.O. u/s 68 of I.T. Act was confirmed." Identically, the Hon'ble Calcutta High Court in the case of Hindustan Tea Trading Company Limited; 182 CTR 585 at page 23 (para 21) where the identity of 12 persons Who were not found at the addresses it was held that identity is not established. On the Issue of onus, it was held that "principle regarding onus is laid down u/s 68 whereby Once a reasonable enquiry is made, then the Assessing Officer can do no further except driving at a conclusion. When such conclusion is communicated to assessee, onus shifts on the assessee. Likewise, Hon'ble MP High Court in the case of M/s Rathi Finlease Limited; 215 CT 429 at page 28 when company is not found at the given address against the summons issued by the Assessing Officer observed as under - "The assessee tried to explain the genuineness of the credit on the basis of letters of confirmations. It could not be explained as to how the transaction was materialized when the companies were not in existence and the amount was paid by cheque only on the date on which the amount was credited to the account of the company. The assessee failed to discharge the burden with regard to the credit in its books and the existence of the creditors to indicate the genuineness of the transaction." The Hon'ble ITAT Indore in the case of Dasrath Lal Agrawal, Ratlam vs Department Of Income Tax on 9 November, 2011 has confirmed the addition on account of none genuine share capital and share premium when the identity of the subscriber could not be established. In that case also the assessee contended that once the documents like IT, PAN, Company Registration etc. are produced the identity of the subscriber is established. The Hon'ble ITAT Indore gave its findings on the issue that "none of the certificates, claimed to be issued by various authorities, does not establish the identity of the share applicants as the certificates were issued without physically verifying the existence of applicants, such as income tax department receives returns of income or documents without verification of existence of the persons filing the returns/documents. PAÑ is also allotted to the applicants on the basis of applications without verifying the existence of applicants at the address given in the application. Likewise, Registrar of companies also register a company without physical verification of the existence of the applicant company. Therefore, the assessee cannot claim to have established the identity of both these companies on the basis of some documents." The Hon'ble ITAT Delhi in recent decision on dated 07.12.2012 in the case of Sekhawati Capital Finlease Pvt. Ltd V/s. Income-tax Officer, in ITA No. 2099/Del/2011 has confirmed the addition made u/s 68 of the IT. Act where subscribers were not produced before the assessing officer on the ground that the assessee has failed to establish identity and creditworthiness of the subscriber. In the said order the ITAT has given finding that "The action of the Ld AO could be examined in light of the decision of CIT v Durgaprasad More (1971) 82 IT 40(SC) and ITO v K. Jayaraman (1987) 168 IT 757 (Mad). In the latter case it was held that if a doubt arises as to the validity or the genuineness of document filed, for the limited purpose of a proceeding before the authority under the Act, such authorities are bound to go into the question of genuineness and validity. The assessee Co. is a Pvt. Ltd. Co. The company was asked to produce any evidence by producing the Director of the investing companies. As such there should have been no difficulty on the part of the assessee to produce somebody for the said entity, had the whole apparatus not been merely a conduit to plough back the money of the assessee company"

In view of the facts of the case special reference has to be made to the decision Of Supreme Court in the case of CIT v/S Durga Das More 82 IT 540. In the said decision supreme Court held that the Income Tax authorities are entitled to look in to surrounding circumstances to find out the reality. It was also held as below:- "It is true that an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real. In a case of the present kind a party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents. Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities. Human minds may differ as to the rellability of a piece of evidence. But in that sphere the decision of the final fact finding authority is made conclusive by law." In view of the facts of the case special reference has also to be made to the very recent decision of Hon'ble Delhi High in the case of The commissioner of income tax vs Empire Builtech Pt Ltd in vide order dated 27.01.2014, findings are given as under:- "It is not sufficient for the assessee to merely disclose the addresses or identities of the individuals concerned. The other way of looking at the matter is that having given the address, the inability of the notices who are approached by the AO to afford any reasonable explanation as to how they got the amounts given the nature of their income which was disproportionally less than what they subscribed as share capital would also amount to the Revenue having discharged the onus if at all which fell upon it. This court also notices that the assessee in this case was incorporated barely few months before the commencement of the assessment year, and there is no further information, or anything to indicate why its markup of the share premium thousand folds in respect of the shares which were of the face value of Rs. 10 lakhs was justified." Further reliance is placed on the following decision wherein the addition made /S 68 of the I.T Act have been confirmed because the assessee had failed to prove the identity and creditworthiness of the subscribers/ depositors inspite of the fact that the confirmations were filed. i) Income Tax Officer - 3(1), v/s. M/s Atul Construction Co., Mathura in ITA No. 266/Agr/2011. ITAT Agra. ii) CIT v/s Independent Media Pvt Ltd Delhi High Court. iii) Dy.CI T, C-IN, V M/s Forex Fastners (P) Ltd., ITA No. 405/CHD/2011, ITAT Chandigarh.

7. The ld. CIT(A) after considering the grounds of assessee evaluated the findings of the Assessing Officer and thereafter concluded decided the issue against the assessee with following observations and findings:-

6. The only issue involved in the case is addition of Rs.4,35,49,200/- on account of share capital u/s 68 of the IT Act. In the course of the assessment proceeding A noted that the assessee has received share capital from SABKA Media Pvt. Ltd. of Rs.4,35,49,200/- and the appellant has issued share at the face value of Rs.9,67,760/- i.e. at the premium of Rs.4,25,81,440/- The AO finally noted that the assessee company has completely failed to discharge its onus to substantiate the creditworthiness and genuineness of the transaction even after providing so many opportunities. Therefore the AO made an addition u/s 68 of Rs.4,35,49,200/ 6.1 In appeal Ld. AR submitted that Hamara Samay News Network Pvt Ltd and Sabka Media Pvt Ltd are group concern and during the assessment proceeding the appellant company has furnished all the relevant details pertaining to the share capital and share premium that were called for by the AO. It is submitted the evidence furnished by the appellant during the course of the assessment proceedings are Copy of Ledger Account, Copy of Bank Account, Copy of audited profit and loss account and balance sheet, Copy of the IT and Copy of Form 2 of ROC. The crux of the arguments of Ld. AR in appeal: a) All the transactions are among sister concerns. b) It is not the case where cash has been deposited and entries are taken. c) All the sister concerns are assessed to tax and scrutinized u/s 143 (3) of the Act. d) Additions has been made on the basis conjectures and surmises. e) The appellant has also explained source of the source of the transactions.

7. I have considered the facts of the case, the basis of addition made by the AO and the arguments of the Ld. AR during the assessment, the submissions and the paper placed on record before me. 7.1 I have carefully examined the issue. During the appellate proceeding, no further documentary evidence, whatsoever, has been produced to prove the genuineness of the transaction. Apart from written submission, the appellant has produced copies of documents produced before AO as mentioned above in appellant's submission. I have examined these documents. Instead of supporting the case of appellant, these documents only reinforces the findings of the AO which are based on his detailed analysis of the facts and circumstances of the case. The AO further noted that no business activity is being carried out by the assessee and there is only fund transfer from/to bank account of the assessee and entries of credit & debit in the bank account are numerous. 7.2 The company which has given share capital to the appellant company, it is obvious from the analysis of their financial statements that the company having substantial capital & reserve created by manipulations with the sole motive of providing entries to the appellant. Bank statements of these companies clearly show that huge amount of money is transferred to these concerns only to be immediately transferred to the bank accounts of the beneficiaries. All the group concerns except PAL New Pvt. Ltd, does not have any business activity. It is also noted that SABKA Media (shareholder) has received share application money of Rs.22,84,00,309/-the break-up of the same is as follows: S.No. Name of Company Share Application Money (Rs.) 1 Lemon Entertainment Ltd. 4,81,2,0/- 2 Lemon Network Pvt. Ltd. 11,48,48,49/- 3 PAL News Media Pvt.Ltd. 4,70,26,300/- 4 ACME Digicom Pvt. Ltd. 1,84,00,000/- Total 22,84,00,309/- 7.3 In the appeal proceeding, it is also argued that the revenue is generated in PAL News Media Pvt. Ltd., the group concern of the appellant and part of the money rotated among the group concerns are coming from revenue this company. I have also examined the balance sheet and P&L account of PAL New Media Pvt. Ltd. for A.Y. 2012- 13 & 2013-14. So far as revenue from operation in the said company is Rs.8.27 crores and profit before tax is Rs. 15,54,395/- and Rs.5.46 crores and profit before tax of Rs.22,10,060/- for A.Y. 2013-14 and 2012-13 respectively. These facts does not get along with the argument of Ld. AR that the money rotating in the group concerns are from PAL News Media Pvt. Ltd. Further the balance-sheet of Pal New Media Pvt. Ltd. is examined and it is found that this company has increase in the capital reserve of Rs.12,76,78,532/- in the year under consideration. When asked details of the same under rule 46A (4) of the Rules, the Ld. AR submitted that M/s PACL Ltd. has applied for investment in shares of M/s PAL News Media Pvt. Ltd. Initially M/s PACL Limited has given Rs. 12,90,00,000/- as share application money and rest of the amount was to be given on the later dat. Due to some reasons M/s PACL Limited could not give the rest of the amount due to which M/s PAL News Media Pvt Ltd was left with no other option but to forfeit the entire share application money and shown the same as capital reserve in its books of account. The above facts clearly establishes the chain of money going to appellant company. The Saba Media Pvt Ltd has received share application money of Rs.4,70,26,300/- from PAL News Media Pvt. Ltd. Further the PAL News Media Pvt. Ltd has advanced share application money to Saba Media from the forfeited amount of M/s PACL Ltd. In other words there is chain of transfer of money from PAL New Media Pvt. Ltd to Saba Media Prt. Ltd and finally to the appellant. PAL New Media Pvt. Ltd had capital by way of forfeited amount of share application money from M/s PACL Ltd. It is important to mention here that PACL was incorporated in 1996 having registered office at 22, 3rd Floor, Ambar Tower, Sansar Chandra Road, Jaipur and having corporate office at 7th Floor, Gopal Das Bhawan, 28th Barakhamba Road, New Delhi. It is also known as 'Pearls'. It is in public domain that this company has been black-listed in 2015 by SEBI and alleged for indulging in dubious transactions. It is also in public domain that Chairman and Managing Director of PACL Ltd were arrested by CBI. 7.4 Against the above background where the A has demonstrated that filing of Return, registration with ROC, transactions through banks were the deliberate steps taken by these group concerns with the sole motive of imparting a colour of genuineness and to camouflage the real nature of transaction, a heavier onus is cast on the appellant to prove the genuineness of such transactions by adducing evidences and giving explanations, which are capable of proving beyond any doubt that its transactions of share money are distinctly genuine. It is also a settled legal position that the onus of the assessee, of explaining the nature and the source of the credit, does not get discharge merely by filling confirmation letter, or showing the transaction through banking channel and by filing income tax particulars. 7.5 The Id. AR's argument that the money is transacted through banking channel there is no law that transactions entered into by the banking Channel are genuine. No such provision is also under income tax Act. Genuineness of the transaction can only be examined with other circumstances of the whole transactions. It is necessary on the part of appellant to prove genuineness of the transactions, source of the money in the bank account of the depositor of the shareholder companies. Apparently, even during the appellate proceeding, the appellant has failed to explain the circumstances under which money is rotated among the group concerns. 7.6 Since the appellant claimed that the share capital was genuine, the onus was on the appellant under section 101 of the Evidence Act, 1972 to produce the directors/ principal officers of share applicant companies as its own witness for cross examination by the Revenue. The appellant should have discharged its duty as a taxpayer by producing the directors of these companies particularly in a scenario in which then companies have made substantial investment in the appellant company.

7.14 Section 102 of Indian Evidence Act makes it clear that initial onus is on person who substantially asserts a claim. If the onus is discharged by him and a case is made out, the onus shifts on to deponent. It is pertinent to mention here that the phrase "burden of proof" is used in two distinct meanings in the law of evidence viz, 'the burden of establishing a case', and the burden of introducing evidence'. The burden of establishing a case remains throughout trial where it was originally placed, it never shifts. The burden of evidence may shift constantly as evidence is introduced by one side or the others. In this case, once the evidence that assessee has received share capital was introduced by the AO, the burden of evidence shifted to the assessee. During the assessment proceeding and even during the appellate proceeding, the assessee has failed to produce any evidence to prove the creditworthiness of shareholder companies. 7.15 The legal principles laid down in a number of cases, a few of which have been quoted above, are squarely applicable to the facts and circumstances of the present case. It is obvious from these judicial decisions that- • Mere documentary evidences are not sufficient to establish the genuineness of transactions in all situations. • Creditworthiness was not proved by mere issue/ of a cheque or by furnishing a copy of statement of bank accounts. Circumstance might require that there should be some evidence of positive nature to show cause that the said subscribes had made a genuine investment, acted as angel investors, after due diligence or for personal rcasons. • Documents must also stand the tests of human conduct, surrounding circumstances and preponderance of probability. • When surrounding circumstances and attending facts predicate a cover-up, the taxing authorities cannot put on blinkers while looking at documents but are required to go beyond documents to look into surrounding circumstances to segregate the real from apparent. 7.16 With respect to the circumstantial evidence and in the matters related to the discharge of onus of proof and the relevance of surrounding circumstances of the case, the relevant observations and findings of Hon'ble Supreme Court in the case of CIT Vs. Durga Prasad More [1972] 82 ITR 540, are "that though an appellant's statement must be considered real until it was shown that there were reasons to believe that the appellant was not the real, in a case where the party relied on self-serving recitals in the documents, it was for the party to establish the transfer of those recitals, the taxing authorities were entitled to look into the surrounding circumstances to find out the reality of such recitals. Science has not yet invented any instrument to test the reliability of the evidence placed before a Court or Tribunal. Therefore, the Courts and the Tribunals have to judge the evidence before them by applying the test of human probability. Human minds may differ as to the reliability of piece of evidence, but, in the sphere, the decision of the final fact finding authority is made conclusive by law." 14 | P a g e 7.17 The above ratio laid down by the Hon’ble Supreme Court has been reiterated and applied by the Hon’ble Apex Court in the case of Sumati Dayal V CIT 214 ITR 801 (S.C). It is essential on the part of the AO to look into the real nature of transaction and what happens in the real word and contextualize the same to such transactions in the real market situation. 7.18 All these above mentioned cases are also applicable to the facts and circumstances of the present case in which the various judicial authorities have decided the cases in favour of revenue after going through the entirety of the facts and circumstances. The case laws relied upon by the by the appellant have been decided with reference to the specific facts and situations present in the context of those distinct cases and cannot be made universally and squarely applicable to all cases where similar issues but in different setting of facts and accompanying circumstances are found to be involved. 7.19 In view of the facts and circumstances borne out of the assessment order and legal precedents as discussed above, I am of the view that documents submitted as evidences to prove the genuineness of transaction are themselves found to serve as smoke screen to cover up the true nature of the transactions in the facts and circumstances of the case as it is revealed that amount received by the appellant company as share capital are arranged transactions to introduce its unaccounted income through group concerns with the sole motive to account for the undisclosed income. Accordingly, in view of the above discussion and judicial precedents, it is held that AO was justified in making addition of Rs. 4,3,49,200/- as income of the assessee from undisclosed sources u/s 68, of the Act. The grounds of appeal are dismissed.

9. From the orders of the authorities below, we note that the precise arguments of assessee are that i) all the transactions are among sister concerns which are asset to tax and scrutinized u/s. 143(3) of the Act, ii) it is not the case where cash has been deposited and entries are taken, iii) additions have been made on the basis of conjectures and surmises despite the fact that the assessee has successfully explained not only source but also sources of the source of receipt of share application money and premium.

the assessee cannot simply furnish details and remain quiet even when summons issued to shareholders under section 1 31 return unserved and uncomplied. This approach would be unreasonable as a general proposition as the assessee cannot plead that they had received money, but could do nothing more and it was for the Assessing Officer to enforce shareholders attendance. Some cases might require or justify visit by the Inspector to ascertain whether the shareholders/ subscribers were functioning or available at the addresses, but it would be incorrect to state that the Assessing Officer should get the addresses from the Registrar of Companies' website or search for the addresses of shareholders and communicate with them. Similarly, creditworthiness was not proved by mere issue of a cheque or by furnishing a copy of statement of bank account. Circumstances might require that there should be some evidence of positive nature to show that the said subscribers had made a genuine investment, acted as angel investors, after due diligence or for personal reasons. Thus, finding or a conclusion must be practicable, pragmatic and might in a given case take into account that the assessee might find it difficult to unimpeachable establish the creditworthiness of the shareholders.