9911796707
TMI Blog2021 (1) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances of the case the Ld. CIT(A) erred in not considering the factual findings given by the A.O. in remand report that M/s. Alken Management and Financial Services Pvt. Ltd., and M/s. Shree Ganesh spinners Ltd., had admitted to be nothing but accommodation entry providers and therefore, the transactions with these parties could not be accepted as being genuine?. 2. The brief facts of the case are that the assessee company is engaged in the business of construction, erection and infrastructure facilities. The assessee filed the return of income on 15.10.2010 with total income of Rs. 46,34,400/-.Subsequently, the case was selected for scrutiny and notice u/s. 143(2) and 142(1) of the Act were issued. In response to the notices, the Ld. AR of the assessee appeared from time to time and submitted details and the case was discussed. The A.O. on the perusal of the financial statements found that the assessee company has issued 2,58,750 non-cumulative convertible preference shares of face value of Rs. 100/- each at premium. The preference share capital including the share premium raised during the financial year is Rs. 31,05,00,000/-.The A.O. has called for the informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inds that inspite of giving several opportunities to the assessee and the summons issued to the shareholders along with questionnaire, were not complied. Further the A.O. deputed the inspector to the addresses provided by the investors and the report was called for. As per the inspector's report, the shareholders were not present at the addresses provided and no person has appeared on behalf of the investors. Considering the fact of non availability of information and also non compliance of summons u/s. 131(1) of the Act and no information was submitted in respect of notices issued u/s. 133(6) of the Act, the A.O. dealt on the information submitted by the assessee and wants to verify the identity of shareholders. The A.O. observed that the creditworthiness and genuineness of the transaction were not proved. The A.O. also observed that inspite of providing ample opportunities the assessee has failed to prove the identity of the shareholders. In the course of the assessment proceedings the assessee filed a letter dated 09.01.2013 with the details of investors with copies of share application forms, balances sheet, bank statement entries of the shareholders. The A.O. was not satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of Rs. 31,51,34,410/- and passed the order u/s. 143(3) of the Act dated 30.03.2013. 4. Aggrieved by the order, the assessee has filed an appeal with Ld. CIT(A), the Ld. CIT(A) dealt on the grounds of appeal and submissions of the assessee and findings of the A.O. The CIT(A) in the course of appellate proceedings dealt on the facts and the written submissions of the Assessee in support of the claim. The Ld AR submitted that the assessee has discharged its duty by submitting the information and the onus lies on the A.O. to make enquires. We consider it appropriate to refer to the written submissions at page 2 to 8, para 5 of the order which is as under:- 5. During the course of appellate proceedings, a written submission was filed, the relevant part of which is summarized as under: "Disallowance u/S. 68 of the Act amounting to Rs. 31,05,00,000/- On the facts and circumstances of the case and in law the LAO erred in making addition u/s. 68 of the Act, Rs. 31,05,00,000/- received as preference share capital including share premium front parties. Appellant pleads that it had discharged its onus of proving the identity of the preference shareholders and the addition made is unfa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transaction thereby failed to fulfill the conditions u/s. 68 of the Act and made additions of Rs. 31,51,34,408 as unexplained cash credit. Our Submission Identity of the Shareholders:- 2.08 As per the Ld. AO, appellant company failed to prove the identity of the shareholders because the appellant company did not produce them or failed to ensure their compliance for verification of the transactions and also relied on the report of the inspector who could not find the shareholders on the address provided by the appellant company. 2.09 The appellant company has submitted various documents as stated above. The appellant company is also submitting before Your Honour copy of acknowledgement of return of income, confirmation for making payment to the appellant company and copy of PAN card. 2.10 The above shareholders are company and regularly assessed to Income Tax. Their PAN is submitted before Your Honour. This reveals the identity of the shareholder. 2.11 The Ld. AO vide letter dt 10.01.2013 brought to the appellant's notice that its reply dated 08.01.2013 & 09.01.2013 was general in nature and did not contain any information/evidence specifically with regard to the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above case are not similar with that of the appellant company. The appellant company had requested shareholders to comply with the notices issued to them. Also, the above documents submitted by appellant company prove the identity of the shareholders. 2.17 Thus, the appellant company has proved the identity of the shareholder and fulfilled the first requirement of establishing the identity u/s. 68 of the Act. Creditworthiness of Shareholders:- 2.18 The LAO has relied on the statement recorded u/s. 131 on oath of Shri Jagdish Kumar Gupta, Director of J. Kumar Infraprojects Limited in which he has stated that that the said company has received bogus funds in the form of share application money pending allotment as on 31.03.2006 from a few companies whose credit worthiness is doubtful. In the said list, name of Alken Management and Financial Services Private Limited is also appearing. 2.19 We have to state that merely because the said company i.e. Alken Management and Financial Services Private Limited was providing bogus funds to M/s. J Kumar Infra projects Ltd., it does not prove that the said company has made bogus investment in the appellant company also. No such confess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,93,05,664/- Fixed assets of Rs. 18,43,348/- The company has huge investments of Rs. 9,95,64,379/- The company has huge investments of Rs. 9,95,64,379/-. The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. iii. Priority Traders Private Limited (Known as Choice exterior and Interio Pvt. Limited - Rs. 2,50,80,000/- The financial statement of the above company reveals the following: * Equity share capital of Rs. 1,45,00,000/- with high reserves and surplus of Rs. 8,68,60,289/- * The company has huge cash and bank balances of-Rs. 43,51,534/- * The company has huge investments of Rs. 12,43,10,000/- * Fixed assets stand at Rs. 13,03,148/- The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. iv. Shri Ganesh Spinners Ltd. - 3,50,40,000/- The financial statement of the above company reveals t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmations, etc. of the shareholders. viii. Lilac Medicines Private Limited - Rs. 2,00,40,000/- The financial statement of the above company reveals the following: Equity share capital of Rs. 1,30,50,000/- with high reserves and surplus of Rs. 4,71,67,413/- The company has investment of Rs. 7,90,40,000/- The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. ix. Harekrislma Securities Private Limited-Rs. 5,00,40,000/- The financial statement of the above company reveals the following: Equity share capital of Rs. 96,44,000/- with high reserves and surplus of Rs. 11,66,26,828/- The Company has cash & bank balance of Rs. 35,22,934/- The company has huge investment of Rs. 10,01,19,700/- The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. x. Nextgen Infotel Private Limited -- Rs. 1,00,20, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer, was not satisfactory. It is well settled that in view of section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year, the same may be charged to Income-tax as the income of the assessee of that previous year, if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory." 2.29 In the above case the assessee did not furnish any evidence which substantiates his claim. But the appellant company has submitted documentary evidences such as copy of correspondence with the shareholders, bank statements of the shareholders, copy of share application and board resolution. The facts of the above case are different from the appellant company's case. 2.30 Thus, the transaction is genuine and beyond any doubt. The appellant company has proved the genuineness of the transaction and fulfilled the third requirement also of s. 68 of the Act. 2.31 From the above facts and explanation, all the three requirements i.e. identity, creditworthiness and genuineness are fulfilled. Therefore, additions u/s. 68 is bad in law and needs to be deleted." 5. The Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted online to MCA c. Acknowledgment of return of income and financial statement for A.Y. 2010-11 of the subscribers. d. Copy of signed confirmation by the subscribers for making application of preference shares issue of the appellant company. e. Copy of pan card. f. Copy of board resolution and share application in case of M/s. Hindustan Continental Ltd., and Lilac Medicines Pvt. Ltd., g. Latest addresses of the subscribers. 7. The assessee submitted that there was no sufficient opportunity provided in Assessment proceedings and the documents could not be submitted. Further, the evidences and the related documents, registers were destroyed in a fire occurred on 23.02.2011. Therefore, the evidences could not be submitted for the genuine reasons and supported with various judicial decisions. The Ld CIT(A) after receipt of the additional evidences, which was for the first time filed with the appellate authority forwarded the same to the Assessing officer for examination. Whereas, the A.O. has submitted remand report and mentioned that the additional evidence should not be accepted by the CIT(A) as the assessee was provided ample and adequate opportunity of the hearing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence shareholders calling for the information of income tax returns acknowledgement, balance sheet, copy of pan card and signed confirmations. The A.O. observed that the notices were served on the shareholders and the relevant details have been submitted. And all the investor shareholders have confirmed of making investment in the assessee company. The A.O. after receipt of this information has made detailed analysis and found that the shareholders have failed to establish the creditworthiness and genuineness of the transactions. The CIT(A) observed that all the 11 shareholders to whom notices u/s. 133(6) of the Act were issued, filed the details as per directions and to support their identity, has filed the details of their establishment. Further, the shareholders have confirmed the fact of investments and the premium paid. The assessee has substantiated the onus of proving the investors with the evidences, where the investors have complied with the directions of the A.O. u/s. 133(6) of the Act and the details are filed which are not disputed. The assessee has duly complied with the directions of the Revenue in the remand proceedings. The Ld.AR in the hearing proceedings submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot ready to come on requests of appellant. c. AO himself has stated in the order that as per the information on the official website of the ROC(MCA) the preference shareholders have continued with the appellant company till 31.03.2012. This, itself, proves the identity of the shareholders as they were registered with ROC and their information was available on the website of the ROC. d. Further during the remand proceeding the notices u/s. 133(6) were duly served to the shareholders and all the shareholders filed their replies with the AO. e. Further in case of M/s. Citygold Education Research Private Limited which is a group concern of the appellant company, same issue was raised for A.Y. 2010-11. The following parties have also invested in M/s. Citygold Education Research Private Limited. a. M/s. Alken Management and Financial Services Pvt. Ltd. b. M/s. Lilac Medicines Pvt. Ltd. c. M/s. Hare Krishna Securities Pvt. Ltd. The above parties are shareholders of the appellant company also. In case of M/s. Citygold Education Research Private Limited,- the AO had issued Commission at Baroda and Ahmadabad to verify the identity of the above 3 parties. The copy of the report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from them. d. It is rightly said by the appellant that AO has not passed any adverse comments on the bank statements of the shareholders. AO had nowhere mentioned that there were immediate cash withdrawals in the bank statement or there were many debit or credit entries. Also, AO has not doubted the fact that the shareholders had enough balance to make the investment in the appellant company. Thus, capacity and credibility of the shareholders is proved beyond any doubt. 6.5.4 Now let's discuss the identity, credibility and genuineness of transactions in respect to individual shareholders: i. Harmony Energy Private Limited a. In the case of M/s. Harmony Energy Private Limited, Baroda (Rs. 2,50,80,000) it is seen that the company was incorporated on 17.12.2007 as per PAN card. The financial statement of the said company reveals the following: i. Equity share capital of Rs. 59,50,000 with high reserves and surplus of Rs. 4,99,36,709 ii. Fixed Assets are disclosed at Rs. 22,41,706 and the company has huge cash and bank balance of Rs. 20,20,673. iii. The Company has huge investments of Rs. 3,40,27,000 and has given loans & advances of Rs. 3,92,14,380. iv. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res as investment as shown by the appellant. Balance sheet for year ending on 31.03.2010 is filed before the A.O. and the same shows the same figures as stated herein above. In view of this, other observations of the AO are not relevant, though the appellant has satisfactorily replied to them also. Moreover, it was further contended that neither the copy of the statement was provided to the appellant company nor any opportunity of cross examination was provided to the appellant company. e. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness. Hence addition made in the assessment is not correct. iii. Priority Traders Private Limited a. In the case of M/s. Priority Traders Private Limited (Rs. 2,50,80,000) (now known as Choice Exterio & Interio Private Limited) it is seen that the company was incorporated on 08.01.1996 as per PAN card. It is therefore an old company. The financial statement of the said company reveals the following: i. Equity share capital of Rs. 1,45,00,000 with high reserves and surplus of Rs. 8,68,60,289 ii. Fixed Assets are disclosed at Rs. 13,03,148 and the company has huge cash and bank balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shree Ganesh Spinners Ltd. company has made bogus investment in the appellant company. No such confession is available for investment in appellant company. Moreover, it was further contended that neither the copy of the statement was provided to the appellant company nor any opportunity of cross examination was provided to the appellant company. d. This proves the capacity to make investment in the appellant company and also issue shares at premium. The said company is holding shares till date of the appellant company. Thus, there is no rotation of money. e. Also, the party has made its submissions before the AO in response to notice u/s. 133(6) of the Act. It has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31-3-2010 is filed before the AO and the same shows the same figures as stated herein above. f. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness. Hence addition made in the assessment is not correct. V. Tac Technosoft Private Limited a. In the case of M/s. Tac Technosoft Private Limited (Rs. 2,00,40,000) it is seen that the company was incorporated on 25.07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s. 133(6) of the Act. It has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31-3-2010 is filed before the AO and the same shows the same figures as stated herein above. In view of this, other observations of the AO are not relevant, though the appellant as satisfactorily replied to them also d. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness Hence addition made in the assessment is not correct. Vii. Epson Trading Pvt. ltd., In the case of M/s. Epson Trading pvt. Ltd. (Rs. 4,00,80,000) it is seen that the company was incorporated on 23.11.1994 as per PAN card. Therefore it is an old company. The financial statement of the said company reveals the following: i. Equity share capital of Rs. 1,31,00,000 with high reserves and surplus of Rs. 8,14,00,006. ii. Fixed Assets are disclosed at Rs. 22,05,812 and the company has cash and bank balance of Rs. 33,12,096. iii. The Company has huge investments of Rs. 7,92,30,000 and has given loans & advances of Rs. 3,53,19,740. iv. During the year, the Company also has a substantial turnover of Rs. 34,90,08,267 and profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hare Krishna Securities Private Limited a. In the case of M/s. Hare Krishna Securities Private Limited (Rs. 5,00,40,000) it is seen that the company was incorporated on 01.09.1994 as per PAN card. The financial statement of the said company reveals the following: i. Equity share capital of Rs. 96,44,000 with high reserves and surplus of Rs. 11,66,26,828. ii. Fixed Assets are disclosed at Rs. 5,64,489 and the company has cash and bank balance of Rs. 35,22,934. iii. The Company has huge investments of Rs. 10,01,19,700 and has given loans & advances of Rs. 2,29,83,391. iv. During the year, the Company also has a turnover of Rs. 1,17,81,407 and profit during the year (before tax) was Rs. 2,03,736. b. This proves the capacity to make investment in the appellant company and also issue shares at premium. The said company is holding shares till date of the appellant company. Thus, there is no rotation of money. c. Also, the party has made its submissions before the AO in response to notice u/s. 133(6) of the Act. It has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31-3-2010 is filed before the AO and the same shows the same fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,260. iv. During the year, the Company also has a substantial turnover/Income of Rs. 6,98,088 and profit during the year (before tax) was Rs. 3,67,142. b. This proves the capacity to make investment in the appellant company and also issue shares at premium. The said company is holding shares till date of the appellant company. Thus, there is no rotation of money'. c. Also, the party has made its submissions before the AO in response to notice u/s. 133(6) of the Act. It has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31-3-2010 is filed before the AO and the same shows the same figures as stated herein above. In view of this, other observations of the AO are not relevant, though the appellant has satisfactorily replied to them also. d. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness. Hence addition made in the assessment is not correct. 8. The Ld. CIT(A) made observations on the findings of the A.O. and on the facts submitted before the A.O. in the remand proceedings. The CIT(A) dealt on the catena of Hon'ble Tribunal and Hon'ble Jurisdictional High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oking the fact that the assessee was provided ample opportunities in the course of assessment proceedings. CIT(A) overlooked the findings of the A.O. irrespective of additional evidences considered in the remand report. Further, the Ld CIT(A) erred on his views that the assessee could not substantiate in the remand proceedings, the genuineness of the transaction and creditworthiness of investor companies which they have claimed to have been proved. Whereas, based on the submissions of the Ld. AR in the appellate proceedings, the genuineness, correctness and creditworthiness of the companies could not be proved. The CIT(A) erred in overlooking the fact that the A.O. in the remand report mentioned about the two companies Alken Management and financial services Pvt. Ltd. and Ganesh Spinners Ltd., who are part of the investors in JK Infra Projects Ltd., and who have only engaged themselves in the business of accommodation entry providers. Therefore, the genuineness is doubted and cannot be substantiated with any evidences. The Ld. DR also submitted that the CIT(A) should have considered the remand report, the objections as two divergent views are permissible and prayed for allowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Whereas, the assessee in the appellate proceedings before the CIT(A) has filed a detailed written submissions in respect of all 11 investors to substantiate the ingredients of identity of the investors, creditworthiness and genuineness of the transaction of shares. Whereas the CIT(A) on receipt of the information filed by the assessee for the first time as additional evidences under Rule 46A of the IT Rules. CIT(A) has considered the evidences and forwarded the same to the A.O. for his comments. The CIT(A) has dealt elaborately on the facts of the additional evidences and forwarded to A.O. by letter dated 28.01.2015. Whereas, the A.O. has filed a remand report dated 19.05.2017 explaining that the assessee was provided ample opportunities to submit the said information in the regular assessment proceedings and also summons under section 131(1) of the Act and notice u/s. 133(6) of the Act were issued to verify and examine the identity, creditworthiness and genuineness of the transaction of the parities. But there were no proper compliances before the A.O. in the assessment proceedings. The Ld. AR submitted that the A.O. in the remand proceedings have issued notice u/s. 133(6) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the Ministry of Corporate Affairs (MCA) website submitted that the assessee has discharged its burden of submitting the information in respect of identity, creditworthiness and genuineness of the transactions and complied with the provisions of Sec. 68 of the Act. Further, the amendment to proviso u/s. 68 of the Act are applicable prospectively from A.Y. 2013-14 onwards. Whereas in the present case, the assessment year dealt is A.Y. 2010-11. The assessee has complied with the directions in the remand proceedings and further the CIT(A) satisfied with the submissions and provisions of law relied on the judicial decisions and granted the relief. Hence, the appeal filed by the revenue be dismissed. 13. We have heard the rival submissions and perused the material on record and judicial decisions. The Revenue has raised the grounds of appeal in respect of admission of the additional evidence by the appellate authorities and also the assessee failed to satisfy the genuineness of the transactions and creditworthiness in the remand report. Similarly the investors of the assessee company in a statement recorded in the case of JK Projects was found that they are in the business of provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the remand report. The assessee was provided time to file the counter arguments therefore, the CIT(A) action in admitting the additional evidence is within his jurisdiction supported by the judicial decisions and facts and in accordance with law. The Revenue cannot agitate that the CIT(A) should not have admitted the additional evidence. We also considered the observations of the Hon'ble High Court of Madras in the case of Smt. B. Jayalaxmi Vs. ACIT 2018, 407 ITR 212 (Madras) held in respect of the remand report filed by the A.O. as under: "Held, that the Tribunal repeated verbatim the order passed by the AO dated March 29, 2001, and ignored the remand report dated November 25, 2002 and the findings rendered by the Commissioner (Appeals) based on such remand report. Though a question was not specifically, the admission of the AO in the remand report, required to be considered. Thus, in the absence of consideration of this important jurisdictional issue, the judgment dated September 30, 2013, suffered from error which was apparent on the face of the judgment. The order of the High Court was recalled and the matter remanded to the Tribunal to decide the question of its j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the assessee has forwarded the additional evidence to the file of the Assessing officer by letter dated 28.01.2015 for the remand report and the said remand report was filed with the Office of the CIT(A) dated 19.05.2017. This proves the fact that the CIT(A) has provided an opportunity to the A.O. to verify and examine the evidences filed by the assessee for the first time before the appellate authority. The A.O. based on the information filed by the letter dated 25.01.2015 has issued notice u/s. 133(6) on all the 11 investors and information was submitted. These facts prove that the A.O. has applied his mind at the time of remand proceedings and filed the remand report. The CIT(A) after receiving the remand report and comments of the assessee has verified the details. The Ld CIT(A) considering the provisions of law and facts and circumstances dealt on the disputed issues and granted the relief. The Ld. AR also relied on the Hon'ble tribunal decision of sister concern referred at the page 11 to 55 of the paper book in case of DCIT Vs. Fern Infrastructure Pvt. Ltd., A.Y. 2010-11 dated 31.05.2018. In this cross appeal, the Hon'ble Tribunal considered the facts of the exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal principles enunciated and they have arrived at conclusions contrary to the legal principles on the subject. Further, they are finding fault with the assessee for the alleged failure of its investors in proving beyond doubt that they have the capacity to invest at the moment they did in the assessee. The Assessee is not expected to perform a near impossibility. 8. From the above, it is clear that the assessee has completely produced the evidences before the AO i.e. the identity of the shareholder by filing the registered address with ROC, PAN No. along with copy of returns of income furnished with particular Ward of the department of the investors. The assessee has also received money from shareholders through account payee cheque and issued documents such as share certificate, return of allotment filed with ROC forms which were filed before the AO. The assessee has also filed copies of bank statement of the subscribers showing that it had sufficient balance in its accounts to enabled the subscriber to subscribe the share capital. In view of these facts and circumstances, once the AO has not rebutted the evidences, the AO cannot disbelieve the same. This issue is squarely c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtained. 9. Further, in recent decision of Hon'ble Bombay High Court in the case of CIT vs. Orchid Industries Pvt. Ltd. (2017) 397 ITR 136 (Bom), following the case law of Gagandeep Infrastructure Pvt. Ltd. deleted the addition by observing in as under:- "5] ' The Assessing Officer added Rs. 95 lakhs as income under Section 68 of the Income Tax Act only on the ground that the parties to whom the share certificates were issued and who had paid the share money had not appeared before the Assessing Officer and the summons could not be served on the addresses given as they were not traced and in respect of some of the parties who had appeared, it was observed that just before issuance of cheques, the amount was deposited in their account. 6] 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, their 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 applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 para 7.5 to 10 which is read as under: "7.5. Based on the aforesaid observations, the ld. CIT(A) deleted the addition made u/s. 68 of the Act towards share capital and share premium in the sum of Rs. 2,50,00,000/-. 8. Aggrieved, the revenue is in appeal before us. 9. We have heard rival submissions and perused the materials available on record including the entire documents filed by the assessee before the lower authorities which are not in dispute before us. These documents are also placed on record in the form of detailed paper books by the assessee. We find that the ld. CIT(A) had elaborately dealt with the entire issue by due appreciation of the various documentary evidences submitted in respect of investor companies duly proving the three necessary ingredients of Section 68 of the Act viz. identity of the investors, creditworthiness of the investors and genuineness of the transactions. We find that none of these documentary evidences were controverted by the ld. AO by proceeding to make further enquiry in this regard. None of these facts were even denied by the ld. AO or any deficiencies were found thereon by the ld. AO and we also take note of the fact that out of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared before the DDIT(Inv) at Ahmadabad and Baroda and parties at Ahmadabad have confirmed that they held shares in the aforementioned company. Further, they also explained business activities carried out by them and also produced audited accounts, investment register, return of income, bank statement before the DDIT(Inv), Unit - 1(3), Ahmadabad. It not only proves that the above parties actually exist but also proves that they have capacity to invest in the shares of appellant company. The details of companies examined by the DDIT (Inv), Unit-1(3), Ahmadabad is as under: a. Alken Management & Financial Services Private Limited b. Lilac Medicines Private Limited c. Hare Krishna Securities Private Limited 6.4.2 The appellant company that from the facts, explanation, documentary evidence and also judicial pronouncement proved that addition u/s. 68 is not correct since, the identity and creditworthiness of the shareholders and genuineness of the transaction is proved beyond doubt. The appellant placed reliance on following case laws in support that in the circumstances of the facts of the case of the appellant no addition under section 68 can be made on account of unexplained c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mary onus. ii. The Assessing Officer is duty bound to investigate the credit-worthiness of the creditor/subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the inquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit-worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by Section 68 of the Act." 15. It is also a settled proposition that assessee is not required to prove source of source. In fact, this position has been clarified by us in the recent decision in Gaurav Triyugi Singh Vs. Income Tax Officer-24(3)(1)2 16. Having noted the above, we may now advert to the orders passed by the authorities below. 17. In so far order passed by the Assessing Officer is concerned, he came to the conclusion that the three companies who provided share application money to the assessee were mere entities on paper without proper addresses. The three companies had no funds of their own and that the companies had not respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the companies were in existence and had filed income tax returns for the previous year under consideration but the Assessing Officer recorded that these creditors had very meager income as disclosed in their returns of income and therefore, doubted credit worthiness of the three creditors. Finally, Tribunal held as under:- "5.7 As per the provisions of Section 68 of the Act, for any cash credit appearing in the books of assessee, the assessee is required to prove the following- (a) Identity of the creditor (b) Genuineness of the transaction (c) Credit-worthiness of the party (i) In this case, the assessee has already proved the identity of the share applicant by furnishing their PAN, copy of IT return filed for asst. year 2010-11. (ii) Regarding the genuineness of the transaction, assessee has already filed the copy of the bank account of these three share applicants from which the share application money was paid and the copy of account of the assessee in which the said amount was deposited, which was received by RTGS. (iii) Regarding credit-worthiness of the party, it has been proved from the bank account of these three companies that they had the funds to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its onus of proving identity of the creditors, genuineness of the transactions and credit-worthiness of the creditors which finding of fact stood affirmed by the Tribunal. There is, thus, concurrent findings of fact by the two lower appellate authorities. Appellant has not been able to show any perversity in the aforesaid findings of fact by the authorities below. 22. Under these circumstances, we find no error or infirmity in the view taken by the Tribunal. No question of law, much less any substantial question of law, arises from the order of the Tribunal. Consequently, the appeal is dismissed. However, there shall be no order as to cost. 19. We considering the various facts, provisions of law, and the Judicial decisions find that the CIT(A) has passed a reasonable and logical order considering the provisions of law, judicial decisions, remand report and the assessee's own case, and applied the ratio of the judicial decisions to the present case and deleted the addition. The Ld. DR has submitted that the order of the Ld. CIT(A) is bad in law and supported his arguments relying on the order of the A.O. and remand report and could not controvert the findings of the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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