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TMI Blog2016 (8) TMI 1413X X X X Extracts X X X X X X X X Extracts X X X X ..... aid bank account, account payee cheques were issued to the assessee company towards investment in share capital by them. Hence the source of source for share applicants also is explained in the instant case by the assessee though it is not required to be proved by the assessee as per law. None of the documents pertaining to the share applicants which were filed before the AO were found to be ingenuine or non creditworthy by the AO. We find that the AO had made a wild allegation that these share applicant companies are mere paper companies without bringing any cogent material and evidences on record. - decided in favour of assessee. - I.T.A No. 959/Kol/2011 - - - Dated:- 24-8-2016 - Shri M. Balaganesh, AM Shri K. Narasimha Chary, JM For The Appellant: Shri Sallong Yaden, Addl. CIT For The Respondent: Shri A. K. Tulsiyan, FCA ORDER Per Shri M. Balaganesh, AM: This appeal by revenue is arising out of order of CIT(A)-VIII, Kolkata vide appeal No. 432/CIT(A)-VIII/08-09/Kol dated 11.04.2011. Assessment was framed by DCIT, Circle-8, Kolkata u/s. 143(3) of the Income tax Act, 1961 (hereinafter referred to as the Act ) for AY 2006-07 vide his order dated 26.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the assessee was nothing but assessee s own unaccounted money which was brought to the books using banking channel in the form of share capital. The ld AO observed as under:- (i) The concerns which applied for allotment of shares for the assessee-company are paper company/jamakharchi company. On enquiry carried out by this office, it is found that these concerns were not found at their address. (ii) Enquiry was carried out at the neighborhood of the addresses of the share applicant but nobody was aware of existence of any such-company. Further, no signboard was there. (iii) On perusal of bank statement of 'share applicant', it was found that huge show that huge amount of cheque is credited every day but the same is transferred out / to other concerns on the very same date or at the most on the next day. In other words, although cheques worth crores of rupees are deposited in the account of share applicants every day, there is hardly any closing balance at the end of each day. (iv) Just before debit of share application money in the bank account of applicant, there is credit of money in the bank account of the applicant from some other concern. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bt and as the investment is respective files, no doubt can be raised. The assessee reiterated the documents filed before the ld AO in addition to filing the supporting evidences with respect to proof of addresss, declaration from the shareholders for investment in share application money made with the assessee and allotment advice as regards allotment of shares, copy of trade licence of share applicants, among others. The assessee also placed reliance on the decision of the Hon ble Supreme Court in the case of CIT vs Lovely Exports (P) Ltd reported in (2008) 216 CTR (SC) 195 and decision of the Hon ble Calcutta High Court in the case of CIT vs Roseberry Mercantile (P) Ltd in ITAT No. 241 of 2010 and G.A. No. 3296 of 2010 dated 10.01.2011 in support of its contentions. The ld CITA duly appreciating the submissions of the assessee together with supporting evidences on record and respectfully following the judicial precedents supra, deleted the addition made u/s 68 of the Act. Aggrieved, the revenue is in appeal before us on the following grounds:- 1 That on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of ₹ 1,23,75,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licants on the date of advancing monies towards share application with the assessee company which was factually incorrect as could be evident from the bank statements of the share applicants. He met each and every allegation made by the ld AO in his assessment order in his arguments with specific reference to the relevant pages of the paper book filed by the assessee. He further argued that the ld AO had placed reliance on the report of the Inspector of Income Tax which was never furnished to the assessee for its rebuttal. In the instant case, all the three ingredients of cash credit were duly proved by the assessee including the source of source though the same is not required to be proved by the assessee as per law. He placed reliance on the following decisions in support of his contentions:- (a) Bear Bull Distributors (P) Ltd vs ITO in ITA NO. 1652/Kol/2008 dated 24.12.2008 (Kolkata Trib) (b) DCIT vs Howrah Gases Ltd in ITA No. 270/Kol/2009 dated 23.4.2009 (Kolkata Trib) (c ) DCIT vs Shaw Aromatics Pvt Ltd in ITA No. 2003/Kol/2009 dated 19.11.2010 (Kolkata Trib) (d) DCIT vs Nikita Metals Pvt Ltd in ITA No. 525/Kol/2010 dated 29.10.2010 (Kolkata Trib) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded 31.3.2006 for each of the share applicants. (d) Copy of the bank statements of share applicants from where the payments were made to the assessee company. (e) Copy of certificate of incorporation of share applicants. (f) Confirmation from the share applicants in detailed letter form containing the necessary documents filed with ROC proving the existence of the share applicant companies. (g) Source for share applicants for making payment of share application money to the assessee with reference to their bank statements. (h) PAN and income tax assessment particulars of share applicants. (i) Supporting evidences with respect to proof of addresss (j) Declaration from the shareholders for investment in share application money made with the assessee (k) Allotment advice as regards allotment of shares (l) Copy of trade licence of share applicants 7.2. It is not in dispute that in the balance sheets of share applicants, the amounts paid to assessee was duly reflected under the head Investments which could be evident from the relevant pages of the paper book filed by the assessee. We find from the bank statements of the share applicants on the relevant da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other ingredients of section 68 of the Act. In the instant case, the entire details of the share applicants were filed together with their creditworthiness and source of source were proved and hence the decision relied upon is not applicable to the facts of the instant case. Similarly in CIT vs Nivedan Vanijya Niyojan Ltd reported in (2003) 263 ITR 623 (Cal) relied upon by the ld DR , the main ingredients of section 68 of the Act namely the identity of the subscribers, genuineness of transactions and creditworthiness of subscribers were not proved by the assessee in that case. Whereas, in the instant case, all the three ingredients were proved by the assessee beyond any doubt and hence the said decision relied upon by the ld DR is factually distinguishable from the instant case. 7.4. With regard to CIT vs Active Traders (P) Ltd reported in (1995) 214 ITR 583 (Cal), CIT vs Maithan International reported in (2015) 375 ITR 123 (Cal), Subhalakshmi Vanijya (P) Ltd vs CIT reported in (2015) 155 ITD 171 (Kol Trib), Bisakha Sales (P) Ltd vs CIT reported in (2015) 152 ITD 750 (Kol Trib) relied upon by the ld DR, we find that all these decisions were rendered in the context of va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order as the transaction entered into by the assessee was a scheme for laundering black money into white money or accounted money and the Ld. CIT(A) ought to have held that the assessee had not established the genuineness of the transaction. Held After hearing the learned counsel for the appellant and after going through the decision of the Supreme Court in the case of CIT v. M/s Lovely Exports Pvt Ltd, we are at one with the tribunal below that the point involved in this appeal is covered by the said Supreme Court decision in favour of the assessee and thus, no substantial question of law is involved in this appeal. The appeal is devoid of any substance and is dismissed. 7.7. We find that the issue is also covered by another Jurisdictional High Court decision in the case of CIT vs Mitul Krishna Kapoor in ITA No. 333 of 2009 dated 9.6.2016) wherein the question raised and the decision rendered thereon are reproduced below:- Whether on the facts and in the circumstances of the case the Learned Tribunal is justified in law in confirming the order of C.I.T.(Appeals) in deleting the addition of ₹ 33,90,000/- and ₹ 72,57,686/- made under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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