$ * IN HIGH COURT OF DELHI AT NEW DELHI + ITA 234/2015 Reserved on: November 17, 2015 Date of decision: November 27, 2015 COMMISSIONER OF INCOME TAX -3 ..... Appellant Through: Mr. Rohit Madan and Mr. Akash Vajpai, Advocates. versus FIVE VISION PROMOTERS PVT.LTD. ..... Respondent Through: Mr C.S. Aggarwal, Senior Advocate with Mr Prakash Kumar, Mr Rupinder Aggarwal and Mr Gautam Jain, Advocates, With + ITA 235/2015 COMMISSIONER OF INCOME TAX -3 ..... Appellant Through: Mr. Rohit Madan and Mr. Akash Vajpai, Advocates. versus FIVE VISION PROMOTERS PVT.LTD. ..... Respondent Through: Mr C.S. Aggarwal, Senior Advocate with Mr Prakash Kumar, Mr Rupinder Aggarwal and Mr Gautam Jain, Advocates, and + ITA 236/2015 COMMISSIONER OF INCOME TAX -3 ..... Appellant Through: Mr. Rohit Madan and Mr. Akash Vajpai, Advocates. ITA Nos. 234, 235 & 236/2015 Page 1 of 23 versus FIVE VISION PROMOTERS PVT.LTD. ..... Respondent Through: Mr C.S. Aggarwal, Senior Advocate with Mr Prakash Kumar, Mr Rupinder Aggarwal and Mr Gautam Jain, Advocates, CORAM: JUSTICE S. MURALIDHAR JUSTICE VIBHU BAKHRU JUDGMENT % 27.11.2015 Dr. S. Muralidhar, J. 1. These are three appeals by Appellant, Revenue, against common order dated 29th April 2014 passed by Income Tax Appellate Tribunal ( ITAT ) in ITA Nos. 4545, 4246 and 4247/Del/2012 for Assessment Years ( AYs ) 2007-08, 2008-09 and 2009-10 respectively. Limitation 2. Considering that impugned order is dated 29 th April 2014 and appeals were first listed for hearing nearly year later on 10 th April 2015, question whether appeals were in time was examined by Court. In para 8 of memorandum of appeal in each of appeals it is stated that impugned order was received by Appellant, i.e. Commissioner of Income Tax, Delhi -3 (CIT-3) on 24th November 2014. affidavit in support of appeal has been signed by Mr. Narendra Prasad Sinha, posted as CIT -3. 3. Enclosed with memorandum of appeal, is copy of certified copy of impugned order of ITAT which bears different date stamps. ITA Nos. 234, 235 & 236/2015 Page 2 of 23 One of them is date stamp of CIT-3 dated 1st August 2014. Next to it, is noting of 5th August 2014 asking matter to be put up for 'appeal effect' urgently. However, also enclosed is copy of covering letter dated 24th November 2014 from Income Tax Officer (ITO), Headquarters-8 (Judicial), New Delhi addressed to CIT-III (Post restructured) drawing attention of latter to ITAT s order in cases of present Respondent, Five Vision Promoters Pvt. Ltd. ( Five Vision ). 4. By order dated 9th October 2015 Court required Mr. Kamal Sawhney, learned Senior standing counsel for Revenue, to produce certified copy of order of ITAT in original with date stamp to show when it was received by CIT-3. On next date, i.e. 17th November 2015, Mr. Sawhney sought more time for that purpose. Court was not inclined to grant further time for that purpose and decided to proceed on basis of documents already on record. 5. It appears from covering letter dated 24th November 2014 of ITO (Judicial) that cases concerning Five Vision were under jurisdiction of ACIT/DCIT, Circle-9 (1) [Pre restructured Cir.11 (1)]. letter stated that it was not known whether copy of consolidated order of ITAT had been forwarded to concerned CIT. Therefore, letter was again being written to CIT-III (Post restructured). However, as noticed earlier CIT-III had already received copy of order on 1 st August 2014 itself. In any event, going by earliest of date stamps on certified copy of impugned order of ITAT, it is seen that it was first received by CIT (Judicial) on 10th June 2014. That should normally be taken to be date of commencement of limitation for purposes of Section 260A (2) (a) of Act. On that basis, appeal filed on 19 th March 2015, with ITA Nos. 234, 235 & 236/2015 Page 3 of 23 supporting affidavit attested on 31st March 2015 would be beyond stipulated limitation period of 120 days in terms of Section 260A (2) (a) of Act. There is, however, no application for condonation of delay and appeals have been numbered and listed by Registry as if they were within limitation. 6. Faced with above difficulty, Mr. Sawhney, learned Senior standing counsel for Revenue, volunteered to file separate application for condonation of delay. However, at that stage Mr. C.S. Aggarwal, learned Senior counsel appearing for Assessee, Five Vision, made statement that Assessee was not pressing objection as to delay in filing appeals. In that view of matter, Court proceeds with merits of appeals. However, Registry is directed to hereafter examine carefully date stamp on certified copy of order of ITAT and insist on original being produced in order to satisfy itself of correctness of statement made in memorandum of appeal regarding date of receipt of certified copy of ITAT s order. Question urged 7. Revenue has in these appeals sought to urge following question for consideration: Whether ITAT erred in deleting addition made under Section 68 of Act of share application money by holding that identity and genuineness of share applicants was established? Background facts 8. background to filing of these appeals is that Assessee, Five Vision, is company incorporated under Companies Act, 1956 on 14 th ITA Nos. 234, 235 & 236/2015 Page 4 of 23 January 2005 with object of running shopping mall. business of Assessee had not commenced till 31st March 2009 because Mall was under construction. 9. genesis of present proceedings is search which commenced on 14th October 2008 in premises of SVP Builders India Limited ( SVP Builders ) and SVP Group of Companies. Four companies were said to comprise core of SVP Group, of which fourth was Five Vision. other three are SVP Builders, SV Liquor (India) Ltd. and SVP Developers Ltd. These four companies were found to have received share capital from 106 companies between AYs 2003-04 to 2009-10. said shareholders have been categorised Table-I, II and III shareholders. Table-I shareholders, which were 20 companies, were subjected to search under Section 132 of Act. Table-II shareholders, comprised 12 companies against whom proceedings were initiated under Section 153C of Act consequent upon search. Table-III shareholders, comprised 74 companies whose identity and existence were not doubted since they were being regularly assessed to tax. 10. case of Revenue is that SVP Group of companies (in whose premises, and residential premises of their Directors, searches were conducted) were engaged in business of construction of residential, commercial and business complexes and also sale/purchase of lands. further case of Revenue was that Group had been charging on- money on sale of flats, shops etc. which was not accounted for in their regular books of accounts. allegation was that on-money was taken in cash and in turn was routed back into Group companies in form of share application/unsecured loans, share capital etc. unaccounted ITA Nos. 234, 235 & 236/2015 Page 5 of 23 money routed through said channel was reinvested in purchase of further lands and for new projects. share application money received in cash was also utilized for booking bogus expenses as site development charges for inflating cost of construction to bring down profits. Among SVP Group of companies, which are stated to have constituted core group, is Assessee, Five Vision. 11. further case of Revenue was that during pre-search enquiries it was gathered that SVP Group of companies had been receiving share capital from several companies which did not undertake any genuine business activities but acted as 'conduit channels' for converting black money into white. broad general allegation was that in course of investigation undertaken by Additional Director of Income Tax (Investigation), Ghaziabad, SVP Group of companies did not produce shareholders despite being served with notices for that purpose. It was alleged that shareholders were not produced till finalization of assessment order, i.e., upto 21 months thereafter. 12. As far as present Assessee, Five Vision, is concerned, it filed its return of income for AY 2007-08 on 2nd November 2007. For AY 2007-08, amount contributed by corporate shareholders to share capital of Five Vision aggregated to Rs. 4,56,47,500. extent of investment in share capital of Five Vision by these three categories of shareholders for AY 2007-08 was as under: (i) Table I (14 companies): Rs. 1.33 crores (ii) Table II (9 companies) Rs. 87 lakhs (iii) Table III (15 companies) Rs. 2.36 crores ITA Nos. 234, 235 & 236/2015 Page 6 of 23 13. Assessee filed it return of income for AY 2008-09 on 6th October 2008 and for AY 2009-10 on 26th September 2009. As far as AYs 2008-09 and 2009-10 are concerned, total contribution to equity share capital of Five Vision aggregated to Rs. 2 crores and Rs. 4.55 crores respectively. said contribution was entirely from Table-III category shareholders. 14. Consequent upon search that took place on SVP Group of companies on 14th October 2008, notices were sent to Five Vision on 14th May 2010 under Section 153C of Act for AYs 2007-08, 2008-09 and under Section 271F of Act for AY 2009-10. In response to above notices, Assessee filed its return of income for AYs 2007-08 and 2008- 09 on 4th June 2010. It replied on same date to notice under Section 271F stating that it had already filed return for AY 2009-10 on 29th September 2009. It enclosed to reply hard copy of said return. Thereafter, notices were again sent to Assessee by Assessing Officer ( AO ) on 15th September 2010 under Section 143 (2) of Act. jurisdiction of case was shifted from Meerut to Ghaziabad on 13th October 2010. Again notices under Section 142 (1) of Act were issued to Assessee for AYs in question by ACIT, Central Circle, Ghaziabad on 25th October 2010. For AY 2007-08, further notice under Section 142 (1) was issued on 22nd November 2010 and for AYs 2008-09 and 2009-10 on 2nd December 2010. 15. As already noted, there were 20 companies belonging to Table-I. As far as Five Vision is concerned, case of Revenue was that 14 of these Table-I companies were its shareholders during AY 2007-08, contributing aggregate of Rs. 1.33 crores. As far as Table-II is ITA Nos. 234, 235 & 236/2015 Page 7 of 23 concerned, of 12 companies therein, 9 were shareholders of Five Vision during 2007-08 contributing in aggregate Rs. 87 lakhs. These are companies against whom information was gathered during course of search although these companies themselves were not searched. Of 74 companies in Table-III, 15 were stated to have contributed in aggregate Rs. 2,36,47,500 to share capital of Five Vision during AY 2007-08. 16. As far as AY 2008-09 was concerned, four of Table-III companies contributed Rs. 2 crores to share capital of Five Vision. As far as AY 2009-10 was concerned, 20 of Table-III companies contributed aggregate of Rs. 4.55 crores to its share capital. None of companies in Tables I and II contributed to share capital of Five Vision for AYs 2008-09 and 2009-10. Assessment order 17. assessment order was passed on 30th December 2010 by AO holding that above investments were not genuine. He held that: (i) As far as Table I shareholders were concerned, AO noted that none of companies were found to be operating at given addresses. There was neither any display board for name of these companies nor their books of accounts or related accounts or documents were found from such premises. (ii) Moreover, even persons available at said premises namely Shri Bajrang Bahadur Dubey, Smt. Meena Goyal, Smt. Sushila Goyal and Shri Sachin Garg denied that any of said companies existed at said ITA Nos. 234, 235 & 236/2015 Page 8 of 23 addresses. Further, despite letter dated 5th March 2009, and summons under Section 131 dated 20th March and 6th April 2009, Assessee failed to produce shareholders for cross examination. (iii) As far as Table III companies were concerned, many of summons issued were returned unserved with remarks "unknown" or "no such person". 24 of companies submitted replies and some filed affidavits but did not submit any other details. letter of M/s. Ganesh Buildtech showed that it had invested Rs. 10.50 crores in 16 of companies in figuring in Tables III and they in turn invested in SVP Group companies. This was proof of said companies acting as "conduit channel". Further, Assessee failed to produce shareholders for cross-examination. (iv) Also, nexus of shareholders and beneficiary, i.e. SVP Group stood proved from fact that shares were bought back by individuals/concerns belonging to SVP Group. During search, original share certificate worth Rs. 38 crores were found out of which some were seized. During search one Shri Vijay Jindal gave statement that shares were allotted at Rs. 10 per share and later on bought back at Rs.2- 3/- per share. actual average purchase price was Rs. 1.04 per share. Thus shares that were initially issued by SVP Group to extent of Rs. 81.19 crores had been cheaply bought back for Rs. 10.38 crores and therefore transactions were sham. (v) Thus Assessee had failed to prove identity, genuineness and creditworthiness of said shareholders. Accordingly, ITA Nos. 234, 235 & 236/2015 Page 9 of 23 aforementioned sums shown as investments in its shares for AYs in question were added to its income for those AYs. Proceedings before CIT (A) 18. Aggrieved by aforementioned assessment orders, Assessee, Five Vision filed appeals before Commissioner of Income Tax (Appeals) [ CIT (A) ]. Assessee furnished some more documents on which remand report was called for by CIT (A) from AO. remand report was submitted by AO on 11 th November 2011. rejoinder and recapitulation note was submitted before CIT (A) on 8th December 2011. reply dated 21st December 2011 was also filed by Assessee on questions raised by CIT (A) on 8th December 2011. Further responses were submitted on 7th and 10th February 2012 for questions raised on 3rd and 8th February 2012 respectively. 19. CIT (A) issued common directions in all cases on 10th February 2012 directing shareholders of SVP Group of companies to be produced before AO. remand report was submitted by AO on 24th February 2012. rejoinder was filed to said report on 5th March 2012. 20. By order dated 31st May 2012, CIT (A) upheld additions made by AO. Against said order of CIT (A), Assessee, Five Vision, filed appeals before ITAT. Impugned order of ITAT 21. By impugned order dated 29th April 2014, ITAT deleted additions made under Section 68 of Act by holding that: ITA Nos. 234, 235 & 236/2015 Page 10 of 23 (i) Revenue had been unable to deny factual position that only 11 of 20 companies in Table I had actually been searched. material on record showed that directors of 18 companies of 20 companies were examined by AO in course of remand proceedings and found from books of accounts that share capital stands duly recorded in their books of accounts. Thus there was no justification for drawing adverse inference particularly since no contrary material was placed on record by revenue. (ii) statements of Shri Bajrang Dubey and Shri Sachin Garg when carefully examined did not show that investor companies did not exist or did not in fact subscribe to share capital of SVP Group companies. (iii) As far as Ganesh Buildtech was concerned, while no addition was made by AO of sum of Rs. 28 lakhs invested by it in Five Vision for AY 2006-07 and Rs. 1,57,27,500 in AY 2007-08, he added sum of Rs. 1,74,75,000 received from it in AY 2007-08. This apparent contradiction showed that addition was made without appreciating complete facts on record. (iv) decision of this Court in M/s. Nova Promoters and Finlease (P) Ltd. 342 ITR 169 (Del) was distinguishable on facts since in that case two directors of shareholder companies admitted to maintaining benami accounts and providing accommodation entries, whereas in present cases there were no such statements. Also, here AO did not take any steps to rebut confirmation and evidence tendered by shareholders. ITA Nos. 234, 235 & 236/2015 Page 11 of 23 (v) common address of shareholders was not valid basis to disregard claim of Assessee in view of decision of this Court in CIT v. Winstral-Petrochemicals Pvt. Ltd. 330 ITR 603 (Del). (vi) subsequent sale of shares subscribed was not germane to question of genuineness of share capital amount received by Assessees. Once capital raised stood explained, issue of disinvestment by shareholder subsequently was non-issue. addition if at all was to be examined in hands of person purchasing shares. (vii) There was no material to support Revenue's case that 'on- money' collected in cash was routed back into SVP Group companies in form of share application and later reinvested in purchase of further lands for new projects. (viii) There was no material to conclude that some of investors were 'paper' companies. They had been regularly assessed to tax and had produced their books of accounts during their respective assessment proceedings to show that they had made investment in question. This had been accepted by CIT (A) in their assessments by deleting additions made of said sums to their income by AO concerned by holding that additions if at all should be made in hands of beneficiaries. In appeals filed in those cases, Revenue had contended that additions ought to have been sustained. Thus, stand of Revenue was contradictory and untenable. ITA Nos. 234, 235 & 236/2015 Page 12 of 23 (ix) Assessee had discharged primary onus of proving the identity, genuineness and creditworthiness of said shareholders. Submissions of counsel 22. Mr. Rohit Madan, learned counsel for Revenue reiterated grounds of appeal. He first submitted that CIT (A) had found that Assessee had manipulated substantial fund movement through paper existence of investor companies. Secondly, CIT (A) found that common directors repetitively appeared in list of directors of companies which clearly indicated that they belonged to same group, and were manipulating their books for purpose of introduction of unexplained cash money and creating 5-6 steps of cheque transactions before investment was made eventually in SVP group of companies. Thirdly, CIT (A) checked creditworthiness of three shareholding companies, viz., (i) Quality Security Services Pvt. Ltd. (b) United Head Hunters Pvt. Ltd. and (iii) Wellset Pharma & Drugs Pvt. Ltd. and found that these companies did not have any worthwhile share capital and their activities were only in form of management of fund rotation in garb of share application money invested in each other. Such rotation was with view to artificially inflate their credit worthiness. Fourthly, AO had found that Assessee bought back its own shares at very low price. share allotted at face value of Rs. 10 were transferred in names of individuals/ concerns belonging to SVP group at meagre price ranging from Rs. 0.50 to Rs. 2 per share. Fifthly, persons available at premises during search of Table I companies denied existence of such companies at that place. Assessee had received huge amounts of money of Rs. 11 crores in cash in form of share application money, which was not explained. Lastly, it was submitted that decision in M/s. ITA Nos. 234, 235 & 236/2015 Page 13 of 23 Nova Promoters and Finlease (P) Ltd. (supra) was wrongly distinguished by ITAT in its application to facts of present case. 23. Mr. C.S. Aggarwal, learned Senior counsel for Assessee, filed entire record of case submitted before AO, CIT (A) and ITAT and urged that no substantial question of law arises since findings of ITAT were purely factual and consistent with well settled law explained by Supreme Court and High Courts in several decisions concerning Section 68 of Act. Mr. Aggarwal pointed out that as regards 38 shareholders who contributed share capital for AY 2007-08, sum of Rs. 4,56,47,500, 14 belonged to Table-I, 9 to Table-II and 15 to Table- III. Evidence in respect of each of 14 Table I companies was filed by Assessee. This included, inter alia (i) copy of share application forms; (ii) copy of board resolution; (iii) copy of allotment letter confirming allotment; (iv) confirmation in affidavit by investor (v) copy of share certificate evidencing allotment of shares; (vi) copy of income tax return ( ITR ) for relevant AY; (vii) relevant extracts of copy of bank book; and (viii) copy of letter with enclosures filed by investor company addressed to AO in response to summons issued under Section 131 of Act making direct enquiries. 24. Mr. Aggarwal pointed out that similar details were provided for 9 corporate shareholders belonging to Table-II who invested in Five Vision for AY 2007-08 and in respect of 15 corporate shareholders belonging to Table-III who invested in same AY, i.e., 2007-08. 25. Mr. Aggarwal drew attention of Court to fact that following details were furnished in respect of four corporate ITA Nos. 234, 235 & 236/2015 Page 14 of 23 shareholders which contributed sum of Rs. 2 crores for share capital of Five Vision for AY 2008-09: (a) copy of certificate of incorporation/MOA; (b) copy of ITR filed for relevant AY; (c) copy of share application forms; (d) copy of board resolutions; (e) copy of bank statement (relevant extracts); (f) copy of confirmation; (g) confirmation in affidavit by investor (h) copy of letter with enclosures submitted by investor companies in response to summons under Section 131 o Act. 26. As regards 18 shareholders who contributed Rs. 4.55 crores to share capital for AY 2009-10, all aforesaid documents were filed by Assessee. said documents were also placed before this Court. Mr. Aggarwal submitted that Assessee had therefore, discharged its initial onus on identity, creditworthiness and genuineness of transactions. He submitted that ITAT had itself recorded fact that AO had issued summons under Section 131 of Act which had been duly complied with and then shareholders independently confirmed having subscribed to share capital in Five Vision. 27. Reliance was placed by Mr. Aggarwal on decision of Supreme Court in CIT v. Lovely Exports (P) Ltd. 216 CTR 195 (SC), CIT v. Divine Leasing and Finance Ltd. (decision dated 21st January 2008 of Supreme Court in Special Leave to Appeal (Civil) (CC) 375 of 2008) and decision dated 17th September 2012 of Supreme Court in CIT v. Kamdhenu Steel & Alloys Limited [SLP (Civil) CC 15640 of 2012)]. In all above three decisions Supreme Court had affirmed corresponding decisions of this Court including CIT v. Divine Leasing and Finance Ltd. 299 ITR 268. Reliance was also placed on decision of ITA Nos. 234, 235 & 236/2015 Page 15 of 23 this Court in (1994) CIT v. Sophia Finance Ltd. (1994)205 ITR 98 (FB) (Del). Law concerning Section 68 of Act 28. Before proceeding to discuss above submissions, brief recapitulation of legal position as regards Section 68 of Act is necessary. Under Section 68 of Act, AO has jurisdiction to undertake enquiries with regard to amount credited in books of accounts of Assessee. This could be any sum whether in form of sale proceeds or receipt of share capital money. First, AO is to enquire whether alleged shareholders in fact exist or not. truthfulness of assertion by Assessee regarding nature and source of credit in its books of accounts can be examined by AO. Where identity of shareholders stands established and it is shown that they had in fact invested money in purchase of Assessee's shares, then amount received would be regarded as capital. Where Assessee offers no explanation at all or explanation offered is unsatisfactory, provision of Section 68 may be invoked. 29. Full Bench of this Court in CIT v. Sophia Finance Limited (supra) held in context of Section 68 of Act that: (i) Assessee has to prima facie prove "(1) identity of creditor/subscriber; (2) genuineness of transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) creditworthiness or financial strength of creditor/subscriber . (ii) If relevant details of address of PAN identity of ITA Nos. 234, 235 & 236/2015 Page 16 of 23 creditor/subscriber are furnished to Department along with copies of Shareholders Register, Share Application Forms, Share Transfer Register etc., it would constitute acceptable proof or acceptable explanation by Assessee. (iii) Department would not be justified in drawing adverse inference only because creditor/subscriber fails or neglects to respond to its notices. (iv) onus would not stand discharged if creditor/subscriber denies or repudiates transaction set up by Assessee nor should AO take such repudiation at face value and construe it, without more, against Assessee. (v) AO is duty-bound to investigate creditworthiness of creditor/subscriber genuineness of transaction and veracity of repudiation. 30. In decision CIT v. Divine Leasing and Finance Ltd. (supra), this Court held that if Assessee had furnished relevant details of subscribers and shares were allotted as per prevalent norms of Stock Exchange, no addition could be made on account of unexplained cash credits. Where Assessee had provided relevant details it had discharged its onus and then it is for Revenue to show that subscribers were benamidars or any part of share capital represented Assessee s own income from undisclosed sources. In CIT v. Divine Leasing and Finance Ltd. (supra), Supreme Court while affirming order of this Court observed that if share application money is received by Assessee company from bogus shareholders, whose names ITA Nos. 234, 235 & 236/2015 Page 17 of 23 are given to AO, then Department is free to proceed to re-open their individual assessments in accordance with law. 31. Likewise in CIT v. Dolphin Canpack Ltd. 283 ITR 190 Court held no substantial question of law arose since ITAT found that Assessee had disclosed to AO during course of enquiry not only names and particulars of subscribers of shares but also their bank accounts and permanent account numbers issued by income tax department. Superadded to all this was fact that amount received by company was all by way of cheques. 32. law was reiterated in CIT v. Kamdhenu Steel & Alloys Ltd. 206 Taxman 254. Assessee there had given particulars of registration of investing companies; confirmation from share applicants, their bank account details; and had shown payment through account payee cheques etc. In circumstances, it was held that it could be said that Assessee had discharged its initial onus and just because some of creditors/share applicants could not be found at addresses given," would not give Revenue right to invoke Section 68 without any additional material to support such move. It was held likewise in Sarthak Securities Co. (P) Ltd. v. ITO 329 ITR 110. 33. In CIT v. Nipun Builders and Developers (2013) 350 ITR 407 (Del) it was held that point at which initial onus on Assessee to prove unexplained credit would stand discharged depends upon facts and circumstances of each case. It was observed: Circumstances might require that there should be some evidence of positive nature to show that said subscribers had made genuine investment, acted as angel investors, after due diligence or ITA Nos. 234, 235 & 236/2015 Page 18 of 23 for personal reasons. Thus, finding or conclusion must be practicable, pragmatic and might in given case take into account that Assessee might find it difficult to unimpeachably establish creditworthiness of shareholders. 34. In Commissioner of Income Tax v. N.R. Portfolio Pvt. Ltd. (2014) 206 DLT 97 (DB) Court reiterated need of Assessee to satisfy AO about "identity, creditworthiness and genuineness" of creditors. It was observed that mere production of incorporation details, PAN Nos. or fact that third persons or company had filed income tax details in case of private limited company may not be sufficient when surrounding and attending facts predicate cover up. These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity are deeper and obtrusive." 35. Recently in Jet Lite (India) Ltd. v. CIT (decision dated 4th November 2015 in ITA No. 204 of 2002), this Court examined entire case law and reiterated settled legal position. Reasons and decision 36. In present case, there is basic fallacy in submission of Revenue about precise role of Assessee, Five Vision. broad sweeping allegation made is that Assessee being developer is charging on money which is taken in cash . This, however, does not apply to Assessee which appears to be involved in construction of shopping mall. In fact for AYs in question, Assessee had not commenced any business. construction of mall was not yet complete during AYs in question. profit and loss account of Assessee for all three AYs, which has been placed on record, shows that only revenue received was interest on deposits with bank. ITA Nos. 234, 235 & 236/2015 Page 19 of 23 Assessee is, therefore, right in contention that basic presumption of Revenue as far as Assessee is concerned has no legs to stand. Correspondingly, further allegation that such on money was routed back to mainstream in form of capital has also to fail. 37. other submission that Assessee was itself being used as conduit for routing on money or that investment in Assessee was also for routing such 'on money' has not even prima facie been able to be established by Revenue. On one hand there is attempt to treat cash credit found in Assessee s books of accounts to be undisclosed income of Assessee by showing investors to be 'paper companies'. On other hand, attempt is to show that this money in fact belongs to certain other entities whose source has not been explained by Assessee. As noted by ITAT in assessment proceedings of investor companies, monies invested were sought to be added as income of those companies by AOs. said additions were deleted by CIT (A) in their cases holding that additions if at all should be made in hands of beneficiaries. Revenue then filed appeals in ITAT insisting on additions being sustained. Thus there is no clarity in stand of Revenue in these cases. 38. Coming to core issue concerning identity, creditworthiness and genuineness of investor companies, it is seen that as far as Table I investors were concerned, only 9 were searched and in their cases, ITAT on very detailed examination was satisfied that they not only existed, but that Assessee had discharged primary onus of proving their creditworthiness and genuineness. They had responded to ITA Nos. 234, 235 & 236/2015 Page 20 of 23 summons issued to them. Directors of 14 of these companies appeared before AO and produced their books of accounts. 39. In respect of four of Table II companies, who invested Rs. 2 crores in share capital of Assessee for AY 2008-09, CIT (A) observed: I have carefully appreciated contentions and do admit that at least these few companies do not seem to be having connection with majority of 'conduit' companies and their common directors and that their financial credit worthiness is on much better footing. 40. As regards Table-III companies, notices were issued under Section 131 of Act to which many of them responded confirming having made investments. Assessee had been asked by CIT (A) to produce 7 directors of Table III companies. 6 directors appeared and their statements were recorded. They had confirmed that they had subscribed to share capital of Assessee. These directors had not only produced books of accounts but showed that source of investment was duly recorded therein. Revenue on other hand did not produce any further evidence to dispute above evidence produced by Assessee. As far as Table II shareholders were concerned, if Revenue was of view that they were simply using Assessee for parking their undisclosed income, then it was certainly open to Revenue to make additions to income of those Table-II companies. As far as Table-I shareholders was concerned, none of them denied having made investment in Assessee company. AO does not appear to have undertaken any particular investigation into affairs of Table-I, II or Table III companies apart from issuance of notices under Section 131 of Act which were duly responded to. ITA Nos. 234, 235 & 236/2015 Page 21 of 23 41. Detailed findings have been given by ITAT in present cases after thorough examination of records. These have been extracted hereinabove. Court finds no reason to differ from decision of ITAT in its rejection of very same contentions urged before Court by Revenue. In particular, Court concurs with ITAT that mere fact that some of investors have common address is not valid basis to doubt their identity or genuineness. 42. Also, fact that shares of Assessee were subsequently sold at reduced price is indeed not germane to question of genuineness of investment in share capital of Assessee. question of avoidance of tax thereby may have to be examined in hands of person purchasing shares. 43. Some of investor companies for e.g., Quality Security Services Pvt. Ltd. (b) United Head Hunters Pvt. Ltd. and (iii) Wellset Pharma & Drugs Pvt. Ltd. have been shown to be filing returns and being assessed on regular basis. Some of them have been shown to be in existence even before incorporation of Assessee. Indeed Revenue was unable to produce material to substantiate its case that genuineness and creditworthiness of investors and source of money received by Assessee by way of investments in AYs in question was not satisfactorily explained by Assessee. Also, ITAT rightly distinguished decision in M/s. Nova Promoters and Finlease (P) Ltd. (supra) in its application to facts of present case. ITA Nos. 234, 235 & 236/2015 Page 22 of 23 Conclusion 44. Revenue has not been able to show that there is any legal infirmity in impugned order of ITAT as regards analysis of facts or application of law in relation to Section 68 of Act. 45. Consequently, no substantial question of law arises for determination. 46. appeals are dismissed but in circumstances, with no orders as to costs. S. MURALIDHAR, J VIBHU BAKHRU, J NOVEMBER 27, 2015 Rk ITA Nos. 234, 235 & 236/2015 Page 23 of 23 Commissioner of Income Tax-3 v. Five Vision Promoters Pvt. Ltd