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RS India Infrapower Pvt Ltd, GL Business Centre, Dundahera, Old Delhi, Gurgaon Road, Gurgaon Vs. ITO, Ward-3(4), Gurgaon
October, 09th 2019

Referred Sections:
Section 250.
Section 143(3) of the Act
Section 133 (6)
Section 68 of the income tax act.

Referred Cases / Judgments:
CIT vs Nova castles private limited (2014) 50
CIT vs Nipun builders and developers 350 ITR 407 (del),
Commissioner Of Income Tax vs. nova promoters

                     INCOME TAX APPELLATE TRIBUNAL
                       DELHI BENCH "F": NEW DELHI
               BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER
                                  AND
             SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER

                             ITA No. 3238/Del/2018
                           (Assessment Year: 2013-14)
       RS India Infrapower Pvt Ltd,     Vs.             ITO,
     GL Business Centre, Dundahera,                   Ward-3(4),
        Old Delhi, Gurgaon Road,                      Gurgaon
                 Gurgaon
           PAN: AAECP9526H
               (Appellant)                          (Respondent)


                Assessee by :                   Shri Salil Agarwal;. Adv
                                               Shri Ravi Pratap Mall, Adv
                 Revenue by:                   Shri Surender Pal, Sr. DR
               Date of Hearing                       17/07/2019
            Date of pronouncement                    09/10/2019


                                     ORDER

PER PRASHANT MAHARISHI, A. M.

1.   This is an appeal filed by the assessee against the order of the ld CIT (A)-1,
     Gurgaon dated 17.11.2017 for the Assessment Year 2013-14 wherein the
     learned CIT ­ A has confirmed the addition of INR 33,000,000/- and further
     enhanced      it by a sum of INR 13960/- on account of share application
     money along with premium received by the assessee u/s 68 of The Income
     Tax Act.
2.   The assessee has raised the following grounds of appeal:-

     "1.0   Prayer for condonation of delay in filing of appeal
     1.1    That on the facts and in the circumstances of the case and in law, the
            Company requests your goodself to condone the delay in the filing of
            the subject appeal as per the period of limitation provided under the Act
            for filing an appeal against an order of the CIT(A) passed under section
            250.
     1.2    That there was a delay in filing of the appeal before your goodself due
            to the ill health of the Managing Director of the Company who is
            primarily responsible for the decision making of the Company and was
            thus incapable of arranging for the filing of the said appeal.
     1.3    That there was a delay in filing of the appeal due to the unexpected
            resignation and disassociation of all the key employees and Chartered
                                                                              Page | 1
           Accountant responsible for handling          the   accounts   and    other
           documentation of the Company.
     1.4   That there was a delay in filing of the appeal due to the change in the
           registered office of the Company due to which there was a delay in the
           receipt of the order of the Hon'ble CIT(A) and also lead to the
           misplacement and mismanagement of the relevant documents required
           for the filing of the appeal.
     2.0   Addition of share application money pending allotment
     2.1   That on the facts and in the circumstances of the case and in law, the
           Learned CIT(A) erred in confirming the addition made by the Learned
           Assessing Officer ("Learned AO") vide his order passed under section
           143(3) of the Act on account of share application money pending
           allotment amounting to Rs. 3,30,00,000.
     2.2   That on the facts and in the circumstances of the case and in law, the
           Learned CIT(A) erred in ignoring the fact that the shares were allotted
           by the Company in the subsequent year at the value which was
           evidenced by a valuation report.
     2.3   That on the facts and in the circumstances of the case and in law, the
           Learned CIT(A) erred in holding that the share application money
           received did not represent a bona fide business transaction and was
           merely a book entry to justify unaccounted cash.
     3.0   On explanation of source of funds with Navaya Infrapower Private
           Limited ("the Shareholder")
     3.1   That on the facts and in the circumstances of the case and in law, the
           Learned CIT(A) failed to appreciate the genuineness of the share
           application money given by the Shareholder due to certain delays on
           the part of the Authorized Representative of the Company during the
           appeal proceedings before the CIT(A).
     3.2   That the Learned CIT(A) failed to appreciate that the Shareholder was
           incorporated for carrying on infrastructure business, inter alia including
           investing in other companies engaged in the same line of business for
           strategic purposes.
     3.3   That the Learned CIT(A) failed to appreciate that the Shareholder's
           business sector was on a downward trajectory due to which the
           planned activities could not be undertaken and thus the revenue from
           operations and corresponding expenses remained low."
3.   The brief facts of the case show that Assessee Company filed its return of
     income on 28/9/2013 declaring nil income.         Assessee is engaged in the
     business related to renewable energy. On perusal of the audit report and
     audited accounts filed by the assessee, the learned assessing officer noted
     that assessee has received share application money amounting to Rs.
     33313960/­.    The assessee was asked to prove the creditworthiness and
     genuineness of the above large share application money received by the
     assessee.   The learned assessing officer asked the assessee to provide
                                                                               Page | 2
     complete   details   of   allotted   shares   along   with      genuineness     and
     creditworthiness of the same.        Assessing officer also asked to file the
     complete details of the copy of the income tax return, bank account details
     and mode of receipt of the above money. The learned assessing officer noted
     that the above sum was received from Navya Infrapower Private Limited.
     Despite repeated opportunities given to the assessee, it could produce only
     on 30/03/2016 the balance sheet and bank account statement of                 Navya
     Infrapower Ltd. AO noted that the authorized representative has shown his
     inability to provide the copy of the income tax return in respect of above
     company. Therefore the learned assessing officer noted that the assessee
     company has failed to provide the desired information even after availing
     numerous and sufficient opportunities.        Thereafter the learned assessing
     officer noted that it is the settled principle of law that the burden of
     providing the source of credit is on the assessee. Thus, the AO noted that
     Assessee Company has received share application money in the garb of
     accommodation entry from Messer Navya Infrapower Ltd. Further details of
     profit and loss account of the above company reveals that company has
     shown income from other sources to the extent of only INR 5100 for the year
     ended on 31st of March 2013. Thus, he held that the assessee has received
     share application money of Rs. 33300000/ - of which creditworthiness and
     genuineness of the depositor could not be proved during the course of
     assessment    proceedings.      Therefore,    he   made   the    above   addition.
     Accordingly assessment order u/s 143 (3) of the income tax act was passed
     on 31/3/2016 determining total taxable income of the assessee at Rs.
     33300000/­.
4.   Assessee aggrieved with the order of the learned assessing officer preferred
     an appeal before the learned CIT ­ A ­ 1, Gurgaon. Before the learned CIT ­
     A , assessee submitted the details of share application money received
     during financial year 2012 ­ 13, copies of the audited balance sheet and
     profit and loss account of shareholders, copies of bank statement of the
     shareholders, details of allotment of shares. As per the details filed        before
     learned CIT ­ A that appellant had received the amount of share application
     money during the financial year 2012 ­ 13 from 2 companies amounting to
     Rs. 33313960/­ Rs. 33300000/­ was received from                 Navya Infrapower

                                                                                Page | 3
Private Limited and INR 1 3960/­ was received from the Anandrao
Infrastructure Private Limited. The learned CIT ­ A also noted that assessee
has received share application money in earlier years from Panchamrit Real
Estate Private Limited. However, as per the balance sheet of that company
filed by the appellant, it was noted that under non-current investment it has
shown the entry of       Rs. 877527 shares of INR 10 each fully paid in the
appellant company. The CIT ­ A further noted that there is a discrepancy in
the list of shareholder and the figure shown in the balance sheet of
shareholders.        Accordingly, he asked the assessee to produce the
information about the shareholder and noted that as on 31st of March 2013
Punchamrit       Real Estate Private Limited has shown holding 1359657
shares amounting to INR 13596570 along with other members.                  The
assessee submitted reply on 20/2/2017 stating that appellant has issued
1359657 shares to that company for a total consideration of INR 9
19249900/­ introducing premium of INR 905653330/­.           Therefore in the
books of the company the share capital of only INR 13596570/­ excluding
premium of INR 905653330/­ is shown. It was also stated that assessee
has received share application money of Rs. 33300000 from Navya
Infrapower Private Limited and INR 1 3960 from Anandrao Infrastructure
Private Limited to issue shares at INR 173 including share premium of INR
163/­.      It was further stated that the company has received share
application money of INR 1 3690/­ from Ananad Rao Infrastructure Private
Ltd in financial year 2013 and Rs. 116068436/­ before financial year 2013.
Therefore    total      share    application   money   received   from   Navya
Infrastructure Private Limited of Rs. 116082396/­ to issue 670996 shares
at INR 173/­ including share premium of INR 163/­. On the explanation of
the assessee, the learned CIT ­ A sought information under section 133 (6)
from the investor through speed post which was not received back. Further,
no reply was also received from those parties.     The CIT appeal also sent
reminders to both the companies through speed post, which were also not
received back, and no response was received. The learned CIT ­ A brought
the fact of the notice issued by him to the assessee and assessee was
requested to obtain the information from these two companies, as these
companies were shareholders of the appellant. However, no reply was filed






                                                                         Page | 4
by the assessee. Thereafter in Para number 3.10 of the order the learned
CIT ­ A analyzed the statement of account of Punchamrit Real Estate Private
Limited and other shareholders. In Para number, 3.1 to he also noted the
discrepancy in the balance sheet of those companies and the details
submitted by the assessee in its reply dated 20/2/2017. He noted that on
the perusal of the balance sheet the reserve and surpluses         were at Rs.
883097597/­ whereas as per the reply of the assessee the premium of only
INR 905653330/­ was received. The assessee was also asked to reconcile
the above difference. The learned CIT ­ A also noted that though assessee
has received the share application money of Rs. 33313690/­ however the
learned assessing officer has only made the addition of Rs. 33300000/­.
Therefore     notice   of   enhancement   was   issued   on    25/5/2017    for
enhancement of the income by INR 13690/­.                In spite of repeated
opportunities the assessee did not submit any reply to the learned CIT ­ A
and therefore once again he asked the assessee to furnish certain
information as per letter dated 6/9/2017 as per Para number 3.14 of his
order.     No reply was submitted by the assessee of this communication.
Therefore, the learned CIT ­ A considered the whole issue as per Para
number 3.16 of his order. In Para number 3.19, he also verified the balance
sheet of    Navya Infrapower Private Limited and the profit and loss account
of that company.       He noted that this company has shown loss of INR
3515/­ during the year under consideration.       He further noted that the
above company has prior to issue of cheque in favour of the appellant
company as share application money has received funds from others, it does
not have any source of funds of its own. He reached this conclusive finding
at Para number 3.21 of his order and noted that the appellant has failed to
prove the genuineness of the transaction pertaining to share premium
received from Navya infrapower Ltd and creditworthiness of that company.
In Para number 3.24 he further noted that assessee has filed certain
documents pertaining to various companies       who subscribed for shares of
the appellant company and on perusal of the documents reveal that in each
of these companies there is a very small amount of share capital in the form
of shareholders fund and share application money.             In each of these
companies are huge amount of share premium received. On perusal of the

                                                                        Page | 5
profit and loss, account reveals that none of these companies had any
taxable income and as per the return filed for assessment year 2010 ­ 11;
all the companies had shown loss. Further, in these companies there are
no salary expenses, electricity expenses, rental expenses and office
maintenance expenses. Therefore, he held that it is clear from the fact that
these companies in fact never existed and were only paper companies. He
noted that it is evident that the transactions of the share capital were
accommodation entries and the genuineness of the transaction and
creditworthiness of the said applicants has not been proved.       He further
noted that from the details it is apparent that the amounts introduced by
the various companies as share capital in the appellant company were
received by these various companies in their bank accounts on the very
same day or a couple of days prior to the date on which the share capital
was introduced. These amounts were rooted to various bank accounts in
order to give them effect of genuineness. He further referred to the annual
accounts of those companies, found that there is a very small amount of
share capital in the form of shareholders fund, and share application
money.   In each of these companies, there is a huge amount of share
premium. The perusal of the profit and loss account of these companies
had no    substantial taxable income and all the companies shown losses.
These companies also do not have any expenditure and therefore they were
merely the paper companies. He further noted that it is apparent that
appellant is a private limited company and therefore the subscribers to the
shares of private company can be only private persons, such private persons
must invariably be persons of confidence of the directors of the private
limited company and there should be normally no difficulty in producing
them before the assessing officer.     In the present case, they were not
produced and therefore the natural corollary is that that the real position is
not the same as emerges from papers and documents furnished in this
behalf. Therefore, he held that appellant has failed to file the details with
regard to this company in spite of specific opportunity allowed to     it and
thus assessee has failed to prove the identity of the subscriber,
creditworthiness of those companies and the genuineness of the payment of
share application money to the appellant. The learned CIT ­ A also followed

                                                                       Page | 6
     the decision of the honourable Delhi High Court in the case of CIT vs Nova
     castles private limited (2014) 50 taxmann.com 110, CIT vs Nipun builders
     and developers 350 ITR 407 (del), Commissioner Of Income Tax vs. nova
     promoters and finlease private limited 342 ITR 169 and other decisions of
     the honourable jurisdictional High Court. Thus, he confirmed the addition
     made by the learned assessing officer and enhanced the income of the
     assessee by INR 13960. Thus, the addition was confirmed under section 68
     of the income tax act.     Assessee is aggrieved with that order and has
     preferred this appeal before us.
5.   This appeal is delayed by 71 days. Ground number 1 of the appeal of the
     assessee is a prayer for condonation of delay in filing of the appeal. The
     assessee submits that there was a delay in filing of the appeal due to the ill
     health of the managing director of the company, who is primarily
     responsible for the decision making of the company and was thus incapable
     of arranging for the filing of the said appeal. There was also a reason stated
     that delay was due to the unexpected resignation and disassociation of all
     the key employees and the chartered accountant responsible for handling
     the accounts and other documentation of the company. There was also a
     change in the registered office of the company because of that there was a
     delay in receipt of the order of the learned CIT appeal which lead to the
     misplacement of the relevant documents required for the filing of the appeal.
     He therefore submitted that cause of delay in filing the above appeal        is
     beyond the control of the assessee, not deliberate and may be condoned.
6.   The learned departmental representative submitted that the order of the
     learned CIT ­ A was communicated to the assessee on 21/12/2017 as per
     the column number 6 of form number 36 whereas the assessee has filed
     appeal on fourth may 2018. Therefore, there is a considerable delay of more
     than 3 months in filing of the appeal. He further stated that the explanation
     given by the assessee does not show that there is a sufficient reason in filing
     of the appeal belatedly.
7.   We have carefully considered the rival contention and found that the order
     of the learned CIT ­ appeal was communicated to the assessee on
     21/12/2017; however, the assessee could file the appeal only on fourth may
     2018. The assessee has submitted that the main person Shri Girdharilal

                                                                             Page | 7
     who is the director of the company was seriously ill in the year 2016 and
     after a prolonged illness; he passed away in October 2018.         He was also
     aged about 75 years. There was nobody else         who could have attended to
     the filing of the appeal. Further, by filing appeal belatedly, no benefit has
     accrued to the assessee.        In fact, non-filing of the appeal would act as
     detrimental to the interest of the assessee. Therefore, delay in filing of the
     appeal cannot be construed as an intentional error/omission on the part of
     the assessee. In view of this, delay in filing of the appeal from 21/2/2018 to
     third may 2018 is condoned and appeal is admitted.
8.   On the ground number 2, the learned authorized representative submitted
     that the applicant company has filed the return of income declaring Rs. nil
     as its income and during the year the assessee has received a sum of Rs.
     33313960/­ as       share application from two companies through banking
     channel. The above sum was added by the lower authorities as income of
     the assessee as the appellant has not provided the income tax return of the
     aforesaid companies. He further submitted that the appellant was unable
     to present its case before the lower authorities with complete facts nor it
     was able to furnish the documentary evidences which goes to the root of the
     matter and if such facts are examined and it would seen that the addition
     made are untenable either on the facts or in law. It was stated that Shri
     Girdharilal   at the relevant time was one of the directors of the appellant
     company became seriously ill in the year 2016 and after a prolonged illness
     he passed away in October 2018 at the age of 75 years. He submitted that
     above person was the director in the company and there were no other
     persons who could provide the details as because of dispute between PTC
     and RS India group. He further submitted that the assessee was also facing
     certain financial difficulty and it did not have requisite staff that could
     provide the requisite details before the learned assessing officer or the
     learned CIT ­ A which resulted into the confirmation of the above addition.
     Therefore he submitted that under rule 29 of the Income Tax Appellate
     Tribunal Rules,    additional     information of the above share capital receipt
     by the appellant    are required to be looked in to as the genuine investment
     received by the appellant through banking channels and therefore the



                                                                              Page | 8
     addition made is totally untenable. Therefore, he submitted that application
     of admission of additional evidences may be admitted.
9.   He further submitted that the appellant is a private limited company owning
     25.98% shares of RS India energy Ltd and 43.66%            shares of RS India
     global energy limited. It also owns 63% shares of    R K wind limited. This
     company also engaged in the business of production collection and
     distribution of electricity.   The power trading Corp India Ltd the leading
     provider of power trading solution in India was established in the year 1999
     is a government of India initiated public-private partnership whose primary
     focus is to develop commercially vibrant power market in the country. PTC
     India financial services Ltd has been promoted by PTC India Ltd as a
     company Incorporated under the companies act and registered with Reserve
     bank of India as a nonbanking financial company.          In February 2009, a
     Memorandum of Understanding was signed among PTC energy Ltd, RS
     India global energy Ltd and RS India wind     Energy private limited to setup
     1000 MW wind energy project in different parts of India with the specific
     roles and responsibilities for each of the participating partner in the
     memorandum       of   understanding.     He   submitted    the   copy   of   the
     Memorandum of Understanding         as additional evidence. He further stated
     that PTC financial services Ltd          made equity contribution of INR
     610,000,000 in the shares of RS India energy private limited and holds 37%
     holding of the aforesaid company. Similarly, PTC energy Ltd also made an
     equity contribution of INR 230,000,000 in Rs India Global Energy Limited.
     Thus, aforesaid company holds 48% holding in RS India global energy Ltd.
     Since for setting up the aforesaid wind power project huge land at the rate
     of 5 acres per megawatt was required as such, Navya Infrapower Private
     Limited was the land aggregator and given the strength and experience in
     real estate field was supposed to secure the requisite land for a portion of
     the above-mentioned 1000 MW proposed wind power plant.             Messer Rs
     India global energy Ltd entered into an agreement on 18/6/2010 with the
     Navya infrapower Ltd for a total consideration of INR 12,800,000.            The
     aforesaid sum was given to the aforesaid company by account payee
     cheques.    RS India Wind energy private limited also entered into an
     agreement on 12/11/2011 with Navya Infrapower Ltd for operation and

                                                                             Page | 9
      maintenance and electrical line work. Towards the aforesaid work, a sum of
      INR 19,600,000 was paid to Navya infrapower private limited by account
      payee cheques. He further referred to the agreement entered with Navya
      Infrapower Private Limited by RS India global energy Ltd and RS India wind
      energy private limited. He further submitted that due to the bright outlook
      of the powers sector, Navya infrapower private limited also made investment
      in the equity share capital of the appellant company as the appellant
      company was holding the shares of RS India wind energy private limited, RS
      India global energy Ltd Rs India          wind energy limited.       The aforesaid
      company made an investment of Rs. 3,33,00,000 in the shares of the
      appellant company through banking channels in shares were also allotted to
      such company. At present aforesaid company holds 192486 shares of the
      appellant company.       He further gave a pictorial representation of the
      aforesaid transaction. He also placed on record the evidences related to the
      genuineness of the above payment in the form of copy of the details of the
      directors as per the MCA website, copy of the permanent account number of
      the directors, copy of the audited financials and bank statement. He further
      placed on record the confirmation of the shareholders. In view of this, he
      submitted that the appellant has furnished the due evidences, which may
      kindly be admitted, and the instant appeal may kindly be set aside to the
      file of the learned assessing officer to examine the contention of the
      appellant in the light of the aforesaid factual position.            He therefore
      submitted that there is no reason to hold that             in such a transaction
      shareholder to be a non-genuine. He submitted that all these memorandum
      of understanding as well as the agreements could not be produced before
      the ld Lower authorities     due to the     situation prevailing on part of the
      assessee. These agreements needs to be analyzed            to understand that the
      shareholders are genuine entities, the sources of funds           is also explained
      and    due to these agreements, there cannot be any doubt in the
      genuineness   of   the    transactions.    He   referred     to   clause-by-clause
      conditions and understanding between those parties           to show that there is
      complete clarity and business sense in those transactions.
10.   The learned departmental representative vehemently supported the order of
      the lower authorities and submitted that despite being given a specific






                                                                                 Page | 10
      opportunity to the assessee at many point of times before the lower
      authorities no evidences were produced before them. Now the assessee is
      producing these evidences in form of several agreements, Memorandum of
      Understandings and other details.      He submitted that there is no reason
      that these evidences must be admitted by the ITAT as the assessee has not
      justified that why this explanation was not given before the lower
      authorities. He further submitted that despite this merely producing the
      copy of the details of the directors, PAN of the directors, audited financial
      statements, bank statement and the confirmation of shareholders does not
      provide any iota of truth about the identity, creditworthiness and the
      genuineness of the transaction. He submitted that despite this information
      the transaction is not genuine, as assessee has not proved creditworthiness
      and   genuineness    of   the   transaction.   The   learned    departmental
      representative vehemently supported the order of the learned CIT ­ A and
      referred to decisions cited in the order of the learned CIT ­ A to hold that
      where the assessee has failed to prove the initial onus cast upon him then
      the addition has been correctly made u/s 68 of the income tax act by the
      learned assessing officer. He further referred to the latest decision of the
      honourable Delhi High Court in case of NDR promoters Pvt Ltd [2019] 102
      taxmann.com 182 (Delhi)/[2019] 261 Taxman 270 (Delhi)/[2019] 410 ITR 379
      (Delhi)and decision of the honourable Supreme Court in NRA Iron and steel
      Co Ltd [2019] 103 taxmann.com 48 (SC)/[2019] 262 Taxman 74 (SC)/[2019] 412
      ITR 161 (SC)which has laid down that in such circumstances the addition is
      required to be made u/s 68 of the income tax act. He also submitted that
      impact of the agreements produced before ITAT        must also be proved by
      assessee that they have any impact on the taxability of share capital in the
      hands of the assessee. Agreements unless acted up on in        true spirit are
      merely a paper work to justify a nonexistent fact.
11.   We have carefully considered the rival contention and perused the orders of
      the lower authorities.
12.   We first address the issue of admission of additional evidences. The
      assessee has now produced before us the several memorandums of
      understanding between PTC energy Ltd, RS India global energy private
      limited and RS India wind energy Ltd where they have agreed to setup a

                                                                            Page | 11
1000 MW wind energy project in different parts of India. The assessee has
also produced before us the copy of the agreement entered with Navya
Infrapower Ltd, one of the shareholders, held to be nongenuine and RS
India global energy Ltd and RS India wind energy private limited. According
to this agreement, there are certain arrangements between the parties for
setting up of the power plant. Further as per annexure -4, assessee has
shown that Mr Manoj, Sanjit Roy, Suman Devi and Shushil Kumar are the
directors of the shareholder company and they also hold the permanent
account number. Further the assessee has also tried to explain before us
the source of the funds available with Navya Infrapower Private Limited in
the form of share application and allotment money available of INR 1
6700000/- .    Further, the bank statement of state bank of India of the
shareholder is also produced wherein the transactions have been shown
through banking channel.       There are also amount credited because of
premature closure of the fixed deposits      receipts showing source of the
funds invested in the appellant company. The confirmation has also been
submitted of the depositor. As these details have been submitted by the
assessee before us by invoking the provisions of rule 29 of The Income Tax
Appellate Tribunal Rules, 1963 as additional evidences    showing cause that
these documents could not be submitted before the lower authorities for the
reason that one of the main directors of the company passed away in
October 2018 and was seriously ill since the year 2016 and aged around 75
years.   It was also submitted that there was no other person who could
provide the details of the transaction and disputes between the power
trading Corp and RS India group. The assessee has also tabulated complex
structure of the transaction in the group by which the money has been
deposited in the company as share capital.      Based on the structure it is
prima facie apparent that    shareholders are mere pass through entities but
it needs to be demonstrated with the complete facts.        There is    also a
reason that   main director of the company who was       very old and severely
ill and ultimately passed away,   is according to us the sufficient cause    to
admit those evidences.      In view of above facts, we admit the additional
evidences submitted by the assessee, as there is a sufficient and reasonable
cause for nonproduction of them before the lower authorities.

                                                                       Page | 12
13.   We are also aware about the manner in which the addition has been made
      by the learned assessing officer and confirmed by the learned CIT ­ A for
      nonproduction of certain details by the assessee despite being given
      repeated opportunities before them.          The learned AO      has    repeatedly
      requested the assessee to produce the income tax return of the depositors,
      which the assessee has not produced before any of the lower authorities.
      Even before us, the assessee has not produced the same.         The learned CIT
      ­ A has also made huge efforts by issuing notices to the shareholders u/s
      133 (6) of the act which was not complied with. Appellant is also required to
      meet the argument of the learned departmental representative with respect
      to the judicial precedents of the honourable Delhi High Court and
      honourable Supreme Court. Ld AR has tried to prove all these           facts, which
      are held against him, based on the agreements, memorandum of
      Understanding by reading clauses           contained therein, explaining the
      financial structure of the w whole transactions, to show the identity,
      creditworthiness and genuineness of the transactions and shareholders. As
      those agreements were, MOUs were not available with lower authorities
      along with other details produced before us, in the interest of justice, we
      set aside the whole issue back to the file of the ld AO with direction       to the
      assessee to prove Identity, creditworthiness of the shareholders and
      genuineness of the transactions meeting the             findings of the lower
      authorities. The learned assessing officer may examine the additional
      evidences produced before us as well as all other evidences that assessee
      may like to produce before the lower authorities and then decide the whole
      issue afresh.    Accordingly, ground number 2 of the appeal of the assessee
      is set aside to the file of the learned assessing officer   as directed above to
      the parties.
14.   Ground number 3 of the appeal is with respect to the explanation of the
      source of funds of the       Navya Infrapower Ltd.      The contention of the
      appellant is that it is a strategic investment by the company, which is
      engaged in the same line of business. As we have already dealt with the
      taxability of share capital and share premium received by the appellant in
      ground number 2 of the appeal of the assessee setting aside the whole issue
      back to the file of the learned assessing officer with a direction to the

                                                                                 Page | 13
       assessee, we do not find any reason to adjudicate ground number 3 of the
       appeal. Accordingly, it is dismissed.
15.    In the result, appeal of the assessee is partly allowed for statistical
       purposes.
       Order pronounced in the open court on 09/10/2019.

             -Sd/-                                          -Sd/-
        (AMIT SHUKLA)                                (PRASHANT MAHARISHI)
       JUDICIAL MEMBER                                ACCOUNTANT MEMBER

Dated:09/10/2019
A K Keot

Copy forwarded to

  1.   Applicant
  2.   Respondent
  3.   CIT
  4.   CIT (A)
  5.   DR:ITAT
                                                        ASSISTANT REGISTRAR
                                                          ITAT, New Delhi




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