TMI Blog2017 (12) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... annot have its registered Office at one address. The Investor Companies would have changed their address later on. It is also an admitted fact that source of the capital introduced in these companies were established during the respective assessment proceedings, including in the assessee. No evidence was found during the course of search or survey to indicate introduction of unaccounted cash/funds in the form of share capital in these companies. - Decided in favour of assessee. - ITA.No.6173/Del./2013 - - - Dated:- 30-11-2017 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Revenue : Shri Anil Kumar Sharma, Sr. D.R. For The Assessee : Shri Ashwani Kumar, C.A. ORDER PER BHAVNESH SAINI, J.M. This appeal by Revenue has been directed against the order of the Ld. CIT(A)-1, New Delhi, dated 19th September, 2013, for the A.Y. 2008-2009, challenging the deletion of addition of ₹ 9 crores under section 68 of the I.T. Act, 1961. 2. Briefly the facts of the case are that search, seizure and survey operations under sections 132 and 133A of the Act was carried-out in the Bhushan Steel Group of cases on 3rd March, 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were never confronted to the assessee-company at any stage of the assessment and thereby, principles of natural justice have been violated. The submissions of the assessee on merits is reproduced by the Ld. CIT(A) in the impugned order which reads as under : The submissions of the appellant in this regard are as under: ( 1) By way of a brief introduction, it is submitted that the Appellant Company had raised money amounting to ₹ 9,00,00,000/- through share capital during the financial year 2007-08 from various parties situated at Mumbai and Kolkata. The details of the parties from whom Share Capital and Share Premium had been received are as under:- Sl. No. Name of the Investor Company Address Amount (Share Capital /Premium) (in Rs ) 1. Sumitra Investment and finance P Ltd. B-607, Pushpak Aptt. Ghartan Pada, Western Express Highway, Dahisar(E) Mumbai-400068 1,02,00,000/- 2. Oshin Investment and finance P Ltd B-501, Pushpak Aptt. Ghar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant Company through normal banking channels by account payee cheques/demand drafts. Furthermore, the said confirmations also clearly reveal the source of funds, particulars of the bank account through which payment has been received and the Income- Tax particulars which go on to establish the identity and creditworthiness of the respective share applicants authoritatively and conclusively. ( 3) On the basis of the documents/details submitted, the Learned Assessing Officer, has summarized as follows:- Sl. No Name of the Share Holder Returned Income Assessment Year 1 Sumitra Investment and finance F Ltd ₹ 5,560/- 2008-09 2. Oshin Investment and finance P Ltd ₹ 26,496/- 2008-09 3. Alka Diamond Industries Ltd Rs. 4,62,300/- 2008-09 4. Poonam Corporation Ltd -Nil- 2006-07 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td., This is also residential address as reported by Inspector in his report details of the same.30.11.2011. Report of Shri Ajay Kumar, Inspector is enclosed as annexure (Annexure-19). 5. Vibhuti Multitrade Pvt. Ltd., The address is of B L Aggarwal and office of Amit Textiles. As per report of Inspector dt 30.1 1.2011 no such person has ever resided in such premises. Report of Shri Ajav Kumar Inspector is enclosed as annexure (Annexure- 19) 6. Yash V. Jewels Ltd., The residential building was demolished for redevelopment. No building is in existence. Report of Shri Ajay Kumar Inspector is enclosed as annexure (Annexure-19) 7. Jolly Multitrade P. Ltd., The address is of B L aggarwal and office of Amit Textiles. As per report of Inspector dt 30.11.2011 no such person has ever resided in such premises. Report of Shri Ajay Kumar Inspector is enclosed as annexure) (Annexure19) 8. Kapindra Multitrade Pvt. Ltd., The address is of B L aggarwal and office of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount received and evidence in support of identity and creditworthiness of the applicants and also the genuineness of the transaction of all the parties situated at Mumbai and Kolkata from whom the share capital and share premium had been received. In response, the Appellant Company filed copies of confirmations. Income Tax Return acknowledgements and bank accounts from all the parties establishing the identity, genuineness and sources of transaction regarding share capital and share premium with the Assessing Officer. The entire share application money had been received by the Appellant Company through normal banking channels by account payee cheques/demand drafts. Furthermore, the said confirmations also clearly reveal the source of funds, particulars of the bank account through which payment has been received and the Income-Tax particulars which go on to establish the identity and creditworthiness of the various parties authoritatively and conclusively. ( 8) As a result of the above documents being filed before the Learned Assessing Officer in respect of all the parties in respect of which no cause exists as to recourse to the provisions of Section 68 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e creditor; ( ii) capacity of the creditor to advance money; and ( iii) genuineness of the transaction. ( 12) The question of the manner in which the onus u/'s 68 has to be discharged is to be looked at with different perspectives and varying parameters in each different circumstance and no standards/guidelines can be lead out in this regard. ( 13) In the instant case there is no material on record to prove or even remotely suggest that the share application money received actually emanated for the Appellant Company. In fact it may be reiterated that the share application money was received from independent legally incorporated companies through normal and regular banking channels which fact stands duly corroborated and confirmed by the confirmations bank statements and Income Tax Returns of the share applicants duly placed on record. In fact, no evidence, direct or indirect, conclusive, or even circumstantial, exists to doubt in any manner the identity and credit worthiness of the parties and genuineness of the transactions entered into. ( 14) The Appellant Company has discharged its onus by satisfactorily dealing with all the issues in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an appeal tiled by the Department against the judgment/observations of the Supreme Court was also dismissed and the Hon ble Supreme Court did not find any reason to interfere with the order of the High Court in the case of CIT vs Steller Investment Ltd [(2001) 251 ITR 263 (SC)]. As such the observations of the Hon ble Delhi High Court have obtained the approval of their Lordship of the Supreme Court and accordingly attained judicial finality and stamp of approval. ( 17) In addition, Your Honor's kind attention is also invited to the following judgment of the Delhi High Court in the case of Commissioner of Income Tax v Lovely Exports Pvt Ltd [(2008) 299 ITR 268 (Delhi)] has held as follows:- In the case of a company the following are the propositions of law under section 68. The assessee has to prima facie prove (1) the identity of the creditor/ subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the creditor / subscriber; (4) if relevant details of the address or PAN identity of the creditor / subscriber are furnished to the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon ble Supreme Court follows the earlier decision of the Hon ble Supreme Court in the case of Steller Investment Ltd, cited supra and further reinforces the arguments put forward for and on behalf of the Appellant Company. ( 20) In particular, with regard to the issue of establishing the creditworthiness of the parties, Your Honour s attention is invited to the following recent judgements wherein it has been conclusively held, relying on the decisions in the case of M/s Lovely Exports Pvt Ltd cited above, that as long as the identity of the share applicant was proved, the burden of proving the creditworthiness was not on the Assessee:- Commissioner of Income-tax, Udaipur v. Bhaval Synthetics [(2013) 35 Taxmann.com 83 (Rajasthan)]; Shree Barkha Synthetics Ltd v. Assistant Commissioner of Income- tax [(2006) 155 Taxman 289 (Raj)]; Commissioner of Income-tax, Bhopal (M.P) v. Peoples General Hospital Ltd [(2013) 35 taxmann.com 444(Madhya Pradesh); Commissioner of Income-tax. Meerut v, Kamna Medical Centre (P) Ltd [(2013) 35 taxmann.com 470(Allahabad)]; Commissioner of Income-tax, Faridabad v, GP International L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a liability. 39. We may repeat what is often said, that a delicate balance has to be maintained while walking on the tight rope of sections 68 and 69 of the Act. On the one hand, no doubt, such kind of dubious practices are rampant, on the other hand, merely because there is an acknowledgement of such practices would not mean that in any of such cases coming before the Court, the Court has to presume that the assessee in questions as indulged in that practice. To make the assessee responsible, there has to be proper evidence. It is equally important that an innocent person cannot be fastened with liability without cogent evidence. One has to see the matter from the point of view of such companies (like the assessee herein) who invite the share application money from different sources or even public at large. It would be asking for a moon if such companies are asked to find out from each and every share applicant/subscribers to first satisfy the assessee companies about the source of their funds before investing. It is for this reason the balance is struck by catena of judgements in laying down that the Department is not remediless and is free to proceed to reopen the indivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Assessing Officer. 3.2. The case of the revenue is that some of the investor companies could not be found at the given address and also that some of the investor companies responded to the summons by post but did not cause appearance before the tax authorities. It is also stated that the income of many of the investor companies was too low or meager to enable them to make such large investments in the share capital of appellant company. It is further contended that there appears no justification for large component of share premium paid to the appellant along with the share capital. Based on these observations, the revenue has held the subscription to share capital, including the share premium, amounting to ₹ 9,00,00,000/- as unexplained credits of the appellant and held to be unexplained income. The case of the appellant, on the other hand, is that it had discharged its onus to establish the identity of the share holders/applicants, and the source of the money by filing confirmations from the said parties alongwith copies of bank statements and ITRs. Therefore, the question of invoking the provisions u/s 68 against the appellant did not arise. The appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In these circumstances, the conclusion based on the facts relied upon by the revenue that the share capital introduced in the companies belonging to Bhushan Group, including the appellant company, are unexplained, is premature. 3.5. In the above facts and circumstances of the matter, and in view of the case laws relied upon by the Ld. AR, the addition made cannot be legally sustained and is deleted. This ground of appeal is allowed . 3.1. It may also be noted here that the Ld. CIT(A) decided the issue of not giving opportunity to the assessee to rebut the enquiry report which was not confronted to the assessee. The Ld. CIT(A) decided the issue separately in para 4.2 of his order relevant findings reads as under However, do not I find from the assessment order that the result of enquiry made at Mumbai and Kolkata was made available to the appellant. To that extent, the right of appellant to know the facts and have the opportunity to rebut the evidence was not granted. 3.2. The Ld. CIT(A) however, on account of deleting the addition on merit, did not decide the issue of validity of the proceeding against the assessee for not following the principles of natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case are that A.O. issued notice under section 148 of the I.T. Act after recording the reasons for reopening. The assessee submitted before A.O. that return already filed may be treated as return having been filed in response to notice under section 148 of the I.T. Act. The A.O. issued detailed questionnaire on the above issue of share capital and the assessee filed necessary details and clarifications before A.O. time to time. The assessee filed objections to the reopening of the assessment under section 148 of the I.T. Act, which was rejected on 13th August, 2012. The assessee submitted before A.O. that it has raised money aggregating to ₹ 17.60 crores through share capital/share premium during the assessment year under appeal from various parties which are Mumbai based companies, Kolkata based companies and Gauhati based companies. The details of which are noted at pages 2 and 3 of the assessment order. It was submitted that assessee has already filed copies of the confirmations, income tax return acknowledgments and bank accounts in respect of these companies, duly establishing the identity, genuineness and source of transaction regarding share capital and sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e failed to prove the genuineness of the transaction and accordingly, addition of ₹ 17.60 crores was made in the hands of the assessee. 3. The assessee challenged the reopening of the assessment as well as addition on merits before Ld. CIT(A). The detailed contention of the assessee as regards reopening of the assessment has been noted in the impugned order. However, the Ld. CIT(A), confirmed the reopening of the assessment and dismissed this ground of appeal of assessee, particularly, when he has allowed the relief to the assessee on merit. Therefore, no detailed reasoning have been given because it was found that the issue is left with academic discussion only. 4. The assessee as regards the addition, on merit, reiterated the same submissions before Ld. CIT(A) and it was submitted that A.O. made the addition arbitrarily and unjustifiably. The assessee produced all the relevant documents before A.O. which have not been doubted. The assessee filed confirmations of all the share applicants, copy of their income tax returns, bank accounts and copy of annual accounts. Therefore, no adverse inference has been drawn against the assessee. The Ld. CIT(A) on going through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding the appellant company, are unexplained, is at best premature. 3.5. In the above facts and circumstances of the matter, and in view of the case laws relied upon by the Ld. AR, the addition made cannot be legally sustained and is deleted. This ground of appeal is allowed. 5. The Ld. D.R. relied upon the orders of the A.O. and submitted that some parties did not file reply before A.O. and many parties filed reply at the Dak counter. No reasons have been given for the higher premium paid. Copy of the bank statements were not filed before A.O. The income declared by assessee and the share applicant companies were very small. Therefore, addition was correctly made by the A.O. The Ld. D.R. relied upon the following decisions. i. CIT vs. Precision Finance (P) Ltd., (1994) 208 ITR 465 (Cal.) ii. CIT vs. United Commercial Industries Co. (P) Ltd., (1991) 187 ITR 596 (Cal.) iii. CIT vs. Nipun Builders Developers (P) Ltd., (2013) 350 ITR 407 (Del.) iv. CIT vs. Nova Promoters Finlease (P) Ltd., (2012) 342 ITR 169 (Del.). v. Mukesh Shah vs. ITO (2012) 246 CTR 82 (Jharkhand) vi. CIT vs. N.R. Portfolio (P) Ltd., (2013) 263 CTR 456 (Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased Companies 1. Clifton Securities Pvt. Ltd., 95,00,000 2. Lexus Infotech Ltd., 95,00,000 3. Nicco Securities Pvt. Ltd., 95,00,000 4. Real Gold Trading Company Pvt. Ltd., 90,00,000 5. Hema Trading Company Pvt. Ltd., 95,00,000 6. Eternity Multi-trade Pvt. Ltd., 90,00,000 (B) Kolkata Based Companies 1. Neha Cassettes Pvt. Ltd., 90,00,000 2. Warner Multimedia Ltd., 95,00,000 3. Gopikar Supply Pvt. Ltd., 90,00,000 4. Ganga Builders Ltd., 90,00,000 5. Gromore Fund Management Co. Ltd., 95,00,000 6. Baya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d produced any proof to substantiate the credit worthiness of the Investors; and ( iii) the genuineness of the transactions was also in doubt. 12. The relevant facts are that the appellant company had filed its original return of income declaring a total income of ₹ 715/- on 25.09.2008 vide receipt No.39312931250908. The return was processed under section 143(1) of the Income Tax Act, 1961 at the returned income. Subsequently, a search, seizure and survey operation under section 132 and 133A respectively of the Income Tax Act, 1961 was carried out in the Bhushan Group of cases on 3.03.2010. The appellant company was also covered in the said survey operation and its jurisdiction was subsequently transferred to the Office of the ACIT, Central Circle 13, New Delhi. 13. The case of the appellant company for the assessment year 2008-09 was reopened under section 147 of the Income Tax Act, 1961 and notice under section 148 was issued on 19.09.2011. In response to the said notice the appellant company filed a reply dated 26.09.2011 stating that original return of income filed earlier by it on 25.09.2008 vide receipt No. 39312931250908 may be treated as return fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Shivlaxmi Exports Ltd 102, Stephen House, 4BBD BAG(E) Kolkata -700001 90,00,000/- 4. Lexus Infotech Ltd CS-1, Silver Anket, Yari Road, Versova, Andheri (W), Mumbai 400061 90,00,000/- 5. Hema Trading Co Pvt Ltd 303-B Minal Park, C.S Road, Dahisar (East) Mumbai 400068 95,00,000/- 6. Realgold Trading Pvt Ltd BIG Tree Bldg Chamber No. 6, 1 st Floor, Marine Street, Mumbai 400002 50,00,000/- Total 5,15,00,000/- ( 2) The Assessing Officer in the course of assessment proceedings had desired the Appellant Company to furnish the details of the amount received and evidence in support of identity and creditworthiness of the parties and also the genuineness of the transaction of all the parties from whom the share capital and share premium had been received. In response, the Appellant Company vide letter dated 13.08.2012 filed with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponded to the summons and the details are annexed. Details annexed as Exhibit-C 2. Lexus Infotech Ltd Party has responded to the summons and the details are annexed. Details annexed as Exhibit-D. 3. Hema Trading Co Pvt Ltd The address is residential address of D V Jain, as per report of Inspector dated 30.11.2011, no such person has ever resided in such premises. Report of Shri Ajay Kumar Inspector is enclosed as annexure. (Annexure -20) 4. Realgold Trading Company Pvt Ltd The address is office address of N Chandulal Co.CA. As per report of Inspector dated 30.11.2011 no such person has ever resided in such premises. Report of Shri Ajay Kumar Inspector is enclosed as Annexure (Annexure -20) Report from Kolkata S No. Name of the Shareholder Report as received in response to commission from Kolkata 1. Ganga Builders Ltd Assessee made a submission through dak and submitted that the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired the Appellant Company to furnish the details of the amount received and evidence in support of identity and creditworthiness of the applicants and also the genuineness of the transaction of all the parties situated at Mumbai and Kolkata from whom the share capital and share premium had been received. In response, the Appellant Company filed copies of confirmations, Income Tax Return acknowledgements and bank accounts from all the parties establishing the identity, genuineness and sources of transaction regarding share capital and share premium with the Assessing Officer. The entire share application money had been received by the Appellant Company through normal banking channels by account payee cheques/demand drafts. Furthermore, the said confirmations also clearly reveal the source of funds, particulars of the bank account through which payment has been received and the Income-Tax particulars which go on to establish the identity and creditworthiness of the various parties authoritatively and conclusively. ( 8) As a result of the above documents being filed before the Learned Assessing Officer in respect of all the parties in respect of which no cause exists as to rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee must prove the following:- ( i) identity of the creditor; ( ii) capacity of the creditor to advance money; and ( iii) genuineness of the transaction. ( 12) The question of the manner in which the onus u/s 68 has to be discharged is to be looked at with different perspectives and varying parameters in each different circumstance and no standards/ guidelines can be lead out in this regard. ( 13) In the instant case there is no material on record to prove or even remotely suggest that the share application money received actually emanated for the Appellant Company. In fact it may be reiterated that the share application money was received from independent legally incorporated companies through normal and regular banking channels which fact stands duly corroborated and confirmed by the confirmations bank statements and Income Tax Returns of the share applicants duly placed on record. In fact, no evidence, direct or indirect, conclusive, or even circumstantial, exists to doubt in any manner the identity and credit worthiness of the parties and genuineness of the transactions entered into. ( 14) The Appellant Company has discharged its onus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company itself. ( 16) Subsequent to the above an appeal filed by the Department against the judgement/observations of the Supreme Court was also dismissed and the Hon ble Supreme Court did not find any reason to interfere with the order of the High Court in the case of CIT vs Steller Investment Ltd [(2001) 251 ITR 263 (SC)]. As such the observations of the Hon ble Delhi High Court have obtained the approval of their Lordship of the Supreme Court and accordingly attained judicial finality and stamp of approval. ( 17) In addition, Your Honor s kind attention is also invited to the following judgement of the Delhi High Court in the case of Commissioner of Income Tax v Lovely Exports Pvt Ltd [(2008) 299 ITR 268 (Delhi)] has held as follows :- In the case of a company the following are the propositions of law under section 68. The assessee has to prima facie prove (1) the identity of the creditor/ subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the creditor / subscriber; (4) if relevant details of the address or PAN iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned judgement . ( 19) The above decision of the Hon ble Supreme Court follows the earlier decision of the Hon ble Supreme Court in the case of Steller Investment Ltd, cited supra and further reinforces the arguments put forward for and on behalf of the Appellant Company. ( 20) In particular, with regard to the issue of establishing the creditworthiness of the parties, Your Honour s attention is invited to the following recent judgements wherein it has been conclusively held, relying on the decisions in the case of M/s Lovely Exports Pvt Ltd cited above, that as long as the identity of the share applicant was proved, the burden of proving the creditworthiness was not on the Assessee:- * Commissioner of Income-tax, Udaipur v. Bhaval Synthetics [(2013) 35 Taxmann.com 83 (Rajasthan)]; * Shree Barkha Synthetics Ltd v. Assistant Commissioner of Income-tax [(2006) 155 Taxman 289 (Raj)]; * Commissioner of Income-tax, Bhopal (M.P) v. Peoples General Hospital Ltd [(2013) 35 taxmann.com 444(Madhya Pradesh); * Commissioner of Income-tax, Meerut v. Kamna Medical Centre (P) Ltd [(2013) 35 taxmann.com 470(Allahabad)]; * Commissioner of Income-tax, Fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee with such a liability. 39. We may repeat what is often said, that a delicate balance has to be maintained while walking on the tight rope of sections 68 and 69 of the Act. On the one hand, no doubt, such kind of dubious practices are rampant, on the other hand, merely because there is an acknowledgement of such practices would not mean that in any of such cases coming before the Court, the Court has to presume that the assessee in questions as indulged in that practice. To make the assessee responsible, there has to be proper evidence. It is equally important that an innocent person cannot be fastened with liability without cogent evidence. One has to see the matter from the point of view of such companies (like the assessee herein) who invite the share application money from different sources or even public at large. It would be asking for a moon if such companies are asked to find out from each and every share applicant/subscribers to first satisfy the assessee companies about the source of their funds before investing. It is for this reason the balance is struck by catena of judgements in laying down that the Department is not remediless and is free to proceed to reop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Assessing Officer. The ld. AR also placed reliance on the following decisions :- ( i) CIT Vs. Gangeshwari Metal Pvt. Ltd. ITA. No. 597/2012 [judgement dated 21.01.2013 (Delhi High Court); ( ii) Pr. CIT Vs. N. C. Cables Ltd. (2017) 391 ITR 11 (Del.); ( iii) Pr. CIT Vs. Softline Creations P. Ltd. (2016) 387 ITR 636 (Del.); ( iv) CIT Vs. Real Time Marketing P. Ltd. (2008) 306 ITR 35 (Del.); ( v) CIT Vs. Value Capital Sergvices P. Ltd. (2008) 307 ITR 334 (Del.); ( vi) CIT Vs. Orbital Communication (P) Ltd. (2010) 327 ITR 560 (Del.); ( vii) CIT Vs. Winstral Petrochemicals P. Ltd. (2011) 330 ITR 603 (Del.); ( viii) CIT Vs. Kamdhenu Steel and Alloys Ltd. (2014) 361 ITR 220 (Del.). 17. Having gone through the above cited decisions, we find that the ratio laid down therein is that the primary onus lies upon the assessee to establish identity and creditworthiness of the creditors/ investors as well as genuineness of the transaction and after discharging of the same, onus shifts upon the Revenue to prove the documents filed by the assessee while discharging its primary onus, as false to attract addition under section 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es through normal banking channels. Admittedly, copies of application for allotment of shares were also provided to the Assessing Officer. Since the applicant companies were duly incorporated, were issued PAN Cards and had bank accounts from which money was transferred to the assessee by way of account payee cheques, they could not be said to be non-existent, even if they, after submitting the share applications, had changed their addresses or had stop functioning, held the Hon ble High Court. 18. When we examine the facts of the present case in view of the above cited ratio laid down by the Hon ble jurisdictional High Court of Delhi, we find that facts are almost similar. In the present case there were 6 investor companies claimed to have invested ₹ 5,15,00,000/- in total in the assessee company. In support of their identity and creditworthiness as well as genuineness of the transactions, as discussed above, the assessee had filed before the Assessing Officer, their (investor companies) confirmations, Income Tax return acknowledgements, bank accounts with this submission that entire amount had been received by the assessee company through normal banking channels by acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established during the respective assessment proceedings. It was further contended that no evidence was found during search to indicate introduction of cash in the form of share capital. It is also pertinent to mention over here that out of total 6 investor companies, notices could not be served in case of 2 companies as they were not available on the given addresses and in case of 1 company notice could not be served as the premises was found locked on various days. The remaining 4 companies had responded and had filed their submissions. However, there is no dispute that in case of all the 6 investor companies, the assessee had filed primary documents and had accordingly discharged its initial onus to establish identity and creditworthiness of the investor companies and genuineness of the transaction as there is no dispute that all the transactions have been done through banking channels i.e. through account payee cheques and demand drafts. We thus find that the Assessing Officer has failed to discharge its onus to prove that the documents filed by the assessee, as discussed above, were false or fabricated as the Assessing Officer has not made any efforts to verify those documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee company. 11. The Hon ble Delhi High Court in the case of CIT vs. Kamdhenu Steel Alloys Ltd., Ors. 361 ITR 220 (Del.) held as under : Once adequate evidence/material is given, which would prima facie discharge the burden of the assessee in proving the identity of shareholders, genuineness of the transaction and creditworthiness of the shareholders, thereafter in case such evidence is to be discarded or it is proved that it has created evidence, the Revenue is supposed to make thorough probe before it could nail the assessee and fasten the assessee with such a liability under s.68; AO failed to carry his suspicion to logical conclusion by further investigation and therefore addition under s.68 was not sustainable. 12. The Hon ble Delhi High Court in the case of CIT vs. Vrindavan Farms P. Ltd. Etc. in ITA.No.71/2015 dated 12.08.2015 in which the sole basis for the Revenue to doubt their creditworthiness was the low income as reflected in their return of income. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the documents submitted by the assessee, the departmental appeal was dismissed by the Hon ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of CIT vs. Divine Leasing Fin. Ltd., 299 ITR 268 held that no adverse inference should be drawn if shareholders failed to respond to the notice by AO. 15. The Hon ble M.P. High Court in the case of CIT vs. Peoples General Hospital Ltd., (2013) 356 ITR 65 held that dismissing the appeals, that if the assessee had received subscriptions to the public or rights issue through banking channels and furnished complete details of the shareholders, no addition could be made under section 68 of the Income-tax Act, 1961, in the absence of any positive material or evidence to indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represented the company's own income from undisclosed sources. It was nobody's case that the non-resident Indian company was a bogus or non-existent company or that the amount subscribed by the company by way of share subscription was in fact the money of the assessee. The assessee had established the identity of the investor who had provided the share subscription and that the transaction was genuine. Though the assessee's contention was that the creditworthiness of the creditor w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court: Held, dismissing the appeals, that the deletion of addition was justified. 17. The Hon ble Delhi High Court in the case of CIT vs. Winstral Petrochemicals P. Ltd., 330 ITR 603 (Del.) held that dismissing the appeal, that it had not been disputed that the share application money was received by the assessee-company by way of account payee cheques, through normal banking channels. Admittedly, copies of application for allotment of shares were also provided to the Assessing Officer. Since the applicant companies were duly incorporated, were issued PAN cards and had bank accounts from which money was transferred to the assessee by way of account payee cheques, they could not be said to be non-existent, even if they, after submitting the share applications had changed their addresses or had stopped functioning. Therefore, the Commissioner (Appeals) and the Tribunal were justified in holding that the genuineness of the transactions had been duly established by the assessee. 18. The Hon ble Delhi High Court in the case of CIT vs. Value Capital Services P. Ltd., (2008) 307 ITR 334 (Del.) in which it was held that dismissing the appeal, that the additional burden was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Ld. CIT(A) that addition has been correctly deleted. 20. The Ld. D.R. relied upon the decision of various Hon ble High Courts and Delhi High Court referred to above. In these cases, the gist of the findings are that the assessee failed either to prove the identity or capacity of the subscriber companies or that the amount was received as accommodation entries. However, the assessee-company, in the present case, has been able to prove the identity of the investors, creditworthiness and genuineness of the transaction in the matter. Therefore, Ld. CIT(A) on proper appreciation of evidence and material on record, correctly deleted the addition of ₹ 17.60 crores. The Departmental appeal fails and is accordingly, dismissed. 21. In the result, appeal of the Revenue is dismissed. 7. We have considered the rival contentions. It is not in dispute that assessee filed the confirmations of all the Investors, copies of their bank accounts and income tax return, acknowledgment and PAN of the Investors before A.O. The A.O. instead of examining these material evidence placed before him, wanted to verify the genuineness of these 10 parties and issued Commission under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record i.e., documentary evidence produced by the assessee before the A.O. and the Ld. CIT(A), confirmations of the Investors, copies of their bank statement, copy of PAN and ITR of the Investors and copy of the ROC of the Investors. Learned Counsel for the Assessee submitted that no cash was found deposited in the bank accounts of the Investors. Copies of the bank statements of the Investors are filed in the paper book which shows that before making investment in assessee-company investors are having sufficient bank balances with them and no cash have been deposited in their bank accounts. In the case of the assessee survey under section 133A was conducted after search was conducted in the case of M/s. Bhushan Steel group of cases. However, A.O. has not mentioned any material was found against the assessee in the survey to make the above addition. Therefore, it is clear that no incriminating material was found against the assessee during the course of survey so as to make the above addition. No evidence was also brought on record that share application money received by the assessee actually emanated from the coffers of the assessee. No direct relations between the assessee- co ..... 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