Iapl/46/2019 Of Principal Commissioner Of Income Tax v. M/S Pnc Infratech Ltd

Court No. - 39 Case :- INCOME TAX APPEAL No. - 46 of 2019 Appellant :- Principal Commissioner Of Income TaxRespondent :- M/S Pnc Infratech Ltd.Counsel for Appellant :- Manu GhildyalCounsel for Respondent :- Rahul Agarwal Hon'ble Saumitra Dayal Singh,J.Hon'ble Shiv Shanker Prasad,J. 1. Heard Sri Manu Ghildyal, learned counsel for the appellant-revenue and Ms. Upasna Agrawal, Advocate, holding brief oflearned counsel for the respondent-assessee. 2. Present appeal has been filed under Section 260-A of theIncome Tax Act, 1961, (hereinafter referred to as the 'Act')arising from the order dated 10.10.2018 passed by the IncomeTax Appellate Tribunal, Agra Bench, Agra in Income TaxAppeal No. 311/Agra/2017 for A.Y. 2010-11. By that order, thelearned Tribunal has dismissed the appeal filed by the revenueand thus confirmed the order passed by the CIT (Appeals) dated28.02.2017, allowing the assessee's appeal, deleting additionsmade under Section 68 of the Act with respect to share capitalRs. 19 crores invested in the assessee company by three entitiesnamely - M/s Jewellock Trexim Pvt. Ltd., M/s AlbertaMerchants Pvt. Ltd. and M/s Gurprasad Holding Pvt. Ltd. 3. The present appeal has been pressed on the followingsubstantial question of law : "Whether on the facts and circumstances of the case and in law, the orderof the ITAT was perverse on the ground that while deleting the addition ofunexplained credits in the hands of assessee company, it did not allude tothe material facts, chain of transactions and probative value of thestatements and other incriminating facts as pointed out in the assessmentorder of the assessee as well as that of the investing entities, thus violatingthe ratio of judgment in case of Sudarshan Silk and Sarees 300 ITR 205(SC)?" 4. Having heard learned counsel for the parties and havingperused the record, we find, substantial question of law beingraised does not arise in the present facts. It is undoubtedly true,the assessee was a recipient of share capital Rs. 19 crores fromthe three entities (described above) for A.Y. 2010-11. At thesame time, it is not in dispute that the said money was investedthrough banking channels. It is also not doubted, the investorshad duly disclosed such investment in their books. At the sametime, certain doubts and suspicions arose with the revenueauthorities arising from search proceedings conducted in thecase of the assessee as also the investors. Therein certainstatements were recorded ostensibly of directors andresponsible functionaries of the companies, involved in thetransaction. Relying on those statements, investment of Rs. 19crores made in the share capital of the assessee company wasproposed to be disbelieved and added by way of unexplainedcash credit entry. 5. The assessing authority referred to certain statements of Sri Bishnu Kumar Banka recorded during the assessmentproceedings as also statement of Sri Lavlesh Jain recordedduring search proceedings. There is no doubt that the saidBishnu Kumar Banka and Lavlesh Jain were directors of thecompany Jewellock Trexim Pvt. Ltd. At the same time, perusalof the statement of Bishnu Kumar Banka recorded duringassessment proceedings reveals, he claimed ignorance as to theactual business transaction of that company. He also claimedignorance as to the investment of Rs. 7 crores 50 lakhs made byM/s Jewellock Trexim Pvt. Ltd. in the assessee company. Hefurther stated, the actual functional director of the company wasMr. Lavlesh Jain. 6. Thus, Sri Bishnu Kumar Banka did not prove or disprove thefact of investment made by M/s Jewellock Trexim Pvt. Ltd. in the assessee company. He only claimed ignorance. On its part,the assessing authority failed to call or examine Sri Lavlesh Jainduring the assessment proceedings. Instead, he relied on theunproven/untested statement of the said Sri Lavlesh Jain,allegedly recorded during the search proceedings conductedagainst M/s Jewellock Trexim Pvt. Ltd. 6. Thus, Sri Bishnu Kumar Banka did not prove or disprove thefact of investment made by M/s Jewellock Trexim Pvt. Ltd. in the assessee company. He only claimed ignorance. On its part,the assessing authority failed to call or examine Sri Lavlesh Jainduring the assessment proceedings. Instead, he relied on theunproven/untested statement of the said Sri Lavlesh Jain,allegedly recorded during the search proceedings conductedagainst M/s Jewellock Trexim Pvt. Ltd. 7. Other than the above two statements, the assessing authorityfurther relied on the statements of Sri Raj Kumar Dokania, SriSushil Kumar Jain and Sri Murari Lal again recorded duringsearch proceedings. Clearly, no material witness was examinedduring assessment proceedings. Yet, the assessing authoritywithout allowing the assessee any opportunity to cross-examineany such witness proceeded to rely on such ex parte statements. 8. Other than the statements noted above, there is no iota ofevidence to establish that investment of Rs. 19 crores made inthe assessee company by way of share capital was bogus or notgenuine. 9. In such circumstances, the CIT (Appeals) has reasoned, thedoubts and suspicions howsoever strong may never lead toadverse findings against the assessee. He has categorised thefindings recorded by the assessing authority as conjecturalbeing not based on any cogent material or evidence on record. 10. It is the above findings recorded by the CIT (Appeals) thathave been sustained by the learned Tribunal. On specific querymade, learned counsel for the revenue could not point to anyevidence existing on record as may have led to the conclusionthat any part of the investment made in the assessee companyby the three investing entities was false or bogus. 11. Prima facie, in face of investment made through bankingchannel which according to learned counsel for the revenue wasduly disclosed in the regular returns of the investing entities, there does not exist any presumption or room to disbelieve theinvestment made in the assessee company. 12. The burden to prove otherwise rested squarely on therevenue authorities. Unless the initial onus had been dischargedby leading some evidence that may have led itself to theconclusion that the investment was never made, the burden thatwas cast on the revenue remained undischarged. 13. Accordingly, the findings of fact recorded by the learnedTribunal, confirming the order of the CIT (Appeals) is seen tobe in accordance with law and based on material consideration.The same can never be described as perverse. The question oflaw raised does not arise. 14. The present appeal lacks merit and is accordinglydismissed. No order as to costs. Order Date :- 30.11.2023Abhilash . (Shiv Shanker Prasad, J.) (S. D. Singh, J.)