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TMI Blog2016 (5) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... e brief history of the case is that, the assessee is a real estate developer and is into development of properties. The assessee filed its return declaring total income of Rs. 2,66,283/- on 28.11.2003 and on scrutiny, AO determined at Rs. 1,30,10,370/- as total income of the assessee on 31.3.2006. On an appeal ld. CIT(A) allowed partly of the assessee's appeal. Against which, the Revenue filed its appeal in ITA 2105/Kol/2006 and assessee filed its appeal in 126/Kol/2007 and C.O. 6/Kol/2007 before this Tribunal. The Tribunal in its consolidated order dated 16.11.2007 at page 10 of paper book partly allowed the Revenue's appeal and dismissed the Cross Objection of the assessee. In respect of Revenue's appeal in ITA 2105/Kol/2006, the ITAT, Kolkata bench while allowing the relief to the assessee to an extent of Rs. 76,98,000/- out of Rs. 95,00,000/- has observed at para 10 of its order as under: "10. So far as the balance share applicants to the extent of Rs. 18,02,000/- the ld. CIT(A) has deleted the same observing that the A.O. has made the addition in haste without affording reasonable opportunity to the assessee. We, therefore, considering all the facts are of the opinion that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order is reproduced herein below: "The following observations are made in this case: a) Several opportunities, as detailed above, have been provided to the assessee. When the actual verification process has started, the assessee tried to avoid the proceeding by raising a number of issues including validity of notice u/s 142(1). The assessee was also asked whether they think the Order passed on 27.12.2007 is final or not, but they remained silent on the said issue. It was also asked whether the demand raised in order dt. 27.12.2007 has been paid by them or not or whether they have filed any appeal against the said order or not, but they have preferred to remain silent. It has been seen from the record that this office did not pursue for the demand raised in order dt. 27.12.2007 and provided opportunity to the assessee by issuing notice u/s 142(1) in pursuance to order of the Hon'ble ITAT, Kolkata. It has been seen that the issue of share application money of Rs. 18,02,000/- is not subject matter of appeal before the Hon'ble High Court at Calcutta and the assessee was informed accordingly vide letter dt. 05.12.2011 that this office is not in receipt of any order other th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003-04. As no schedule is enclosed it is not known under which head of the Balance Sheet such transactions shown, It has been claimed that Karta of the HUF is out of station but it has not been specified where he is at present or his expected date of return. No documentary evidence has been submitted in support of his claim. The term "out of station" is commonly used by the persons to avoid the proceeding and in this case the Karta did the same job carefully for the purpose of avoidance of the proceeding, thinking that giving an explanation for such huge cash transactions would be difficult at the time of recording statement u/s 131. It is a very common reason for non-appearance and not acceptable. Therefore, it has not been established beyond doubt that there was creditworthiness and genuineness in the transactions claimed. d) In case of M/s. Ramsay International Ltd., the Inspector reported that the premises is a residential one. The following requisitions were made in Summons u/s 131: "1. Personal attendance for recording statement. 2. Your PAN Card, Documentary evidence to prove your position in the company. 3. Computation, audited accounts, Tax Audit Report includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.2, the A.R. drew attention to the summons at page no.43 and reply to such summons at 44. The AR submitted that all the requisite details were placed before the AO wherein the assessee produced the details of two entities about their identity, creditworthiness and genuineness of transactions but, the AO did not consider the same in proper perspective and prayed to allow the appeal. In reply, the ld. DR submitted that the assessee did not properly explain the creditworthiness and genuineness of the transactions. Moreover, the entities who paid share capital money were not appeared before the AO under summons proceedings and they filed only documents which are not certified. Further, in spite of giving many opportunities the assessee failed to discharge its onus under section 68 of the Act and relied on the orders of the AO and CIT(A) and prayed to dismiss the appeal of the assessee. 10. Heard both, perused the relevant material available on record and considered the submissions. It is seen from the record that it is a second round of litigation which started from 27.12.2007, where, under direction from ITAT, Kolkata, the AO initiated proceedings to decide the genuineness of the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count and certain other documents, but, however, none of the two entities were present before the AO and even the address of M/s Ramsay International Ltd not traceable at the given addressee. We noticed in section 68 of the Act, authorises the Respondent Revenue to make inquiry into the sources of the creditors also and there is no limitations as such on the process of the A.O to conduct enquiries not only with the transactions but also with the person or any other concerns for that matter. 10.4 In the present case, the assessee discussed about above. The assessee filed details of share applicants on 07.12.2010 where it referred to share application money as it can be seen from the 4th para of AO's order. The AO in order to verify the three ingredients of section 68 of the Act issued notices under section 131 of the Act to both the entities. 10.5 In response to such notice, the AR representing Saroj Kumar Jhunjhunwala filed reply to section 131 summons at page 44 of paper book where it is observed that the sources of income were shown in cash, where the computation of income at page 45 of paper book for assessment year 2003-04 shows the total gross income of Rs. 55,160/- and wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion. Therefore, we are of the view that the view expressed by the AO and CIT(A) about the creditworthiness and genuineness of transaction between assessee and M/s. Ramsay International Ltd. is justified. Thus, we hold that M/s. Ramsay International Ltd. has failed to prove its identity also as discussed above and we confirm the order of CIT(A) about creditworthiness and genuineness of transaction. 10.7 In pursuance of the Section 68 of the Income Tax Act, It is for the assessee to establish the identity of the subscribers and prove their credit worthiness. In the present case, on the basis of the material available on record the identity of the Saroj Kumar Jhunjhunwala was established and identity of the M/s Ramsay International Ltd was not established. Regarding proving their creditworthiness or the genuineness of the transaction as they were not availed an opportunity given by the ITAT, Kolkata and pursuant to which, the proceedings under Section 131 of the Act. In enquiry by his inspector, AO found that one of the share applicants not existed at the given address. That both the share applicants did not choose to appear before the AO and The details could not be established. T ..... 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