The burden of proof lies with revenue authorities to establish that share capital investments are bogus, and suspicions alone cannot justify adverse findings against the assessee.

JUDGMENT

Heard Sri Manu Ghildyal, learned counsel for the appellant-revenue and Ms. Upasna Agrawal, Advocate, holding brief of learned counsel for the respondent-assessee.

2. Present appeal has been filed under Section 260-A of the INCOME TAX ACT , 1961, (hereinafter referred to as the 'Act') arising from the order dated 10.10.2018 passed by the Income Tax Appellate Tribunal, Agra Bench, Agra in Income Tax Appeal No. 311/Agra/2017 for A.Y. 2010-11. By that order, the learned Tribunal has dismissed the appeal filed by the revenue and thus confirmed the order passed by the CIT (Appeals) dated 28.02.2017, allowing the assessee's appeal, deleting additions made under Section 68 of the Act with respect to share capital Rs. 19 crores invested in the assessee company by three entities namely - M/s Jewellock Trexim Pvt. Ltd., M/s Alberta Merchants Pvt. Ltd. and M/s Gurprasad Holding Pvt. Ltd.

3. The present appeal has been pressed on the following substantial question of law :

"Whether on the facts and circumstances of the case and in law, the order of the ITAT was perverse on the ground that while deleting the addition of unexplained credits in the hands of assessee company, it did not allude to the material facts, chain of transactions and probative value of the statements and other incriminating facts as pointed out in the assessment order of the assessee as well as that of the investing entities, thus violating the ratio of judgment in case of Sudarshan Silk and Sarees 300 ITR 205 (SC)?"

4. Having heard learned counsel for the parties and having perused the record, we find, substantial question of law being raised does not arise in the present facts. It is undoubtedly true, the assessee was a recipient of share capital Rs. 19 crores from the three entities (described above) for A.Y. 2010-11. At the same time, it is not in dispute that the said money was invested through banking channels. It is also not doubted, the investors had duly disclosed such investment in their books. At the same time, certain doubts and suspicions arose with the revenue authorities arising from search proceedings conducted in the case of the assessee as also the investors. Therein certain statements were recorded ostensibly of directors and responsible functionaries of the companies, involved in the transaction. Relying on those statements, investment of Rs. 19 crores made in the share capital of the assessee company was proposed to be disbelieved and added by way of unexplained cash credit entry.

5. The assessing authority referred to certain statements of Sri Bishnu Kumar Banka recorded during the assessment proceedings as also statement of Sri Lavlesh Jain recorded during search proceedings. There is no doubt that the said Bishnu Kumar Banka and Lavlesh Jain were directors of the company Jewellock Trexim Pvt. Ltd. At the same time, perusal of the statement of Bishnu Kumar Banka recorded during assessment proceedings reveals, he claimed ignorance as to the actual business transaction of that company. He also claimed ignorance as to the investment of Rs. 7 crores 50 lakhs made by M/s Jewellock Trexim Pvt. Ltd. in the assessee company. He further stated, the actual functional director of the company was Mr. Lavlesh Jain.

6. Thus, Sri Bishnu Kumar Banka did not prove or disprove the fact 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 Jain during the assessment proceedings. Instead, he relied on the unproven/untested statement of the said Sri Lavlesh Jain, allegedly recorded durin