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2.4 The A.O. issued summons u/s 131 of the Act and also directed that spot enquiry reports be obtained in Mumbai and Kolkata (in the case of all three assessees) and additionally in C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO Guwahati (in the case of M/s Sur Buildcon Pvt. Ltd./Globus Real Infra Pvt. Ltd.). Thereafter, the A.O. observed that the parties in Mumbai either did not respond to the summons served on them or were not found at the given address or the addresses were either incomplete or incorrect or the premises were found to be locked. Insofar as the parties based in Kolkata were concerned, all the parties had responded by post confirming the investments made in the respective assessee companies along with documentary evidences but none of them appeared in person. With respect to the Guwahati based companies, as per the Report, the parties were not found to be existing at the given addresses.

6.1 Per the Ld. A.R., the 'reasons recorded' in the present cases cannot be the basis on which any such 'reason to believe' could be arrived at which would even prima facie show that the share capital or share premium received by the assessees for the AYs under appeal was not genuine. Per the Ld. A.R., the A.O. must have in his possession specific information or material to show that the particular transactions of the assessees were not genuine or fictitious. It was submitted that this specific information was, however, absent in the cases at hand, thereby rendering the entire reassessment/s to be in the nature of fishing and roving enquiries, based solely on 'borrowed satisfaction' drawn from the statement of Shri B.S. Bisht recorded by the Investigation Wing. The Ld. AR C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO submitted that the same is impermissible in law in light of the several cited decisions of the Hon'ble jurisdictional Delhi High Court. 6.2 On the violation of the Principle(s) of Natural Justice, the Ld. A.R. submitted that while making the impugned additions, the A.O. has primarily relied upon the Reports of Inspectors who had been deputed to conduct field enquiries in order to verify the genuineness of the investor companies. These reports formed the basis of the Assessment Orders. It was submitted that these reports were, however, based on an investigation conducted behind the back of the assesses and were never put to the assessees for rebuttal, as is the assessees' right u/s 142(3) of the Act. Furthermore, going by the 'Reasons Recorded', neither had the statement of Shri B.S. Bisht been provided to the assessees nor was any opportunity to cross examine him been given as is mandated by law by the decision of the Hon'ble Apex Court in Andaman Timber Industries v. CCE [2015] 62 taxmann.com. Per the Ld. A.R., the said violation of Natural Justice, therefore, renders the Assessment Orders void ab initio. 6.3 On merits, the Ld. A.R. defended the impugned orders of the Ld. CIT (A) by submitting that the assessees had furnished C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO detailed documentary evidences being the party names, PAN and ITR acknowledgements, bank statements and confirmations of the investors in order to duly discharge the onus cast upon them u/s 68 since as per the law laid down in Lovely Exports (supra), which is the applicable law for the AYs in question, the assessees are not required to prove the source of source of the share subscribers. The Ld. AR drew our attention go the voluminous evidences filed which forms part of Paper Book Part 2A, 2B and 2C filed by each of the assessees. 6.4 Per the Ld. A.R., the Ld. CIT D.R. has not pointed out to any portion of the Assessment Orders wherein the A.O. has disproved these evidences brought on record since all that the A.O. has done is to rely on the Inspectors' Report- which as per law is insufficient in itself to make/sustain an addition u/s 68 of the Act. In support, reliance was placed on the decisions of Pr. CIT Vs. Rakam Money Matters (P) Ltd. (2018) 94 CCH 333 (Del HC), CIT v M/s Orchid Industries Pvt. Ltd. in ITA No. 1433 of 2014 (Bom HC), amongst others. 6.5 With respect to the Inspectors' Report cited in the Assessment Orders, the Ld. A.R. submitted that the Ld. CIT (A) was correct in not relying on the same since these Reports are riddled C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO with inconsistencies. For example, the A.O. in the assessment orders, stated that summons were sent to 41 investor companies (in case of the three assessees) and postal replies were submitted by 39 investor companies. This is erroneous, since the total investors of all the three assessees put together are only 39 and, therefore, the figure of 41 is fictitious. Further, if postal replies had been submitted by 39 investor companies, which is, in fact, the total number of investors in all, then how has the A.O. made an addition u/s 68 by holding that 19 Companies that were based in Mumbai and Guwahati were either not served the summons or they never responded? Thus, per the Ld. A.R. the Reports clearly cannot be relied upon to make any adverse inference against the assessees.

9.1 The Ld. A.R., on the other hand, has submitted that all the documents establishing the identity, genuineness and creditworthiness of the transactions had been submitted before the A.O. who has failed to refute them in any manner. It was submitted C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO that is now settled law that pre-01.04.2013, the assessees are required to only prove the identity, genuineness and creditworthiness of the transactions to discharge their initial burden on proof under Section 68. It has also been argued that there is no requirement in law for the assessees to prove the source of source of the investors. In support, the decisions of the Hon'ble Bombay High Court in Ami Industries (supra), the Hon'ble Delhi High Court in CIT vs. Dwarakadhish Investment P. Ltd., [2011] 330 ITR 298, the decision of the Hon'ble Guwahati High Court in Nemi Chand Kothari vs. CIT, [2004] 136 Taxman 213 (Gau), and the decision of the Hon'ble Gujarat High Court in DCIT vs. Rohini Builders, 256 ITR 360 (Gujarat) were relied upon. It has been contended that when such evidences have remained un-refuted by the A.O., the question of making an addition u/s 68 of the Act does not arise. Further, per the Ld. A.R., reliance on the Reports of the Inspectors without first putting the same to the assesseea for rebuttal u/s 142(3) of the Act is impermissible in law. Even otherwise, the said Reports are riddled with inconsistencies that question their very legitimacy. Therefore, when no such adverse statement and/or evidence exists on record C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO that show that the transactions undertaken by the investors companies were bogus, then the additions u/s 68 do not survive for the simple reason that the A.O. has failed to discharge the burden of proof that has been shifted unto the Department. 10.0 We have duly considered the submissions made by both sides, along with the orders of the tax authorities below as well as the material and the relevant provisions of the Income Tax Act. We also have gone through the case laws relied upon by the Ld. CIT D.R and the Ld. A.R. in support of their contentions. It has not been disputed that the assessees have filed their original returns of income wherein all the particulars of the investments made by investor companies of Kolkata, Mumbai, Guwahati and Delhi have been disclosed before the Department. Further the assessees had also produced the copies of the Confirmations, Bank Statements and the Income Tax Returns of all the investor companies before the A.O. during the course of the reassessment proceedings. These documents form part of the Paper Book 1B, 2B and 3B filed in each of the Appeals by the assessees. It is also not in dispute that the A.O., while passing the Assessment Orders, did not raise any doubts with respect to the documentary C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO evidences submitted before him by the assessees. It is again not in dispute that all the investments (in the form of share capital and share premium) have been duly made via banking channels where the investor companies have shown sufficient balances in their bank accounts to make such an investment in the assessee companies. Further, upon a perusal of the bank statements brought on record by the assessees, it is also evident that no cash was found to have been deposited in the bank accounts of the investor companies. All the investor companies (in the case of all the three Assessees) are registered companies and are assessed to tax also, as is evident from the bank statements and/or the ITR Acknowledgments. Therefore, the identity, genuineness of the transaction and the creditworthiness of the investor companies have been proved by the assessees and they have successfully discharged the initial burden of proof that vested on them u/s 68 of the Act. The A.O. has nowhere, in the Assessment Orders, disputed this information/material submitted by the assessees and has merely sought to rely on the Reports prepared by the Inspectors.

Any reliance on the same, is, therefore, questionable. In fact, had the said Kolkata based Reports been confronted to the assessees u/s 142 C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO (3) of the Act, such inconsistencies would have been pointed out and rebutted by the assessees during the course of the assessment proceedings itself. However, since the same had not been done by the A.O., the assessees while in appeal, had to explain that all evidences establishing the 3 ingredients of Section 68 had been furnished, where all the Kolkata based parties had responded via post, citing their confirmations with documentary evidences in support - none of which had been refuted by the A.O. 10.1.2 Furthermore, a perusal of the Kolkata based Reports, shows that the same accepts that the bank statements evidencing the receipt of payment via cheque had been produced by the assesses. However, the Reports have also stated that "the assessee has not enclosed the bank statement showing the source of fund for share application money" meaning that per the Department, the source of source was also required to be proved. However, as already opined, since the bank statements of all the investor companies evidence a sufficiency of funds to make the respective investments in the assessee companies, the creditworthiness already stands proved in light of the decision of Ami Industries (supra). Further, since the C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO Assessmment Years involved are all pre-AY 2013-2014, we are inclined to hold in support of the submissions and case laws cited by the Ld. A.R. which is that in order to discharge the initial onus of proof u/s 68 prior to 01.04.2013, the assessees need not be required to prove the source of source of such investors. 10.1.3 In respect of the one investor party from Delhi in the case of M/s Goldstar Cement Pvt. Ltd., the A.O. has not conducted any such enquiry u/s 142 (2) of the Act. Therefore, without conducting further enquires in order to rebut the evidences submitted by the assessees, we hold that the A.O. could not have added back the said investments received from the said Delhi party. 10.1.4 Moving on to the Reports obtained from Mumbai and Guwahati, a reading of the same makes it evident that it is not the case of the A.O. that all the parties were not existing at the specified addresses. The Reports provide a mixed bag of conclusions. There were only in 5 cases of the Mumbai parties and 2 cases of the Guwahati parties where the addresses not found / not existing. In all other cases, either the addresses of the investors were found to be incomplete, or the offices of the investors were locked, or the C.O. Nos.258,260 &261/Del/2015 Sur Buildcon Pvt. Ltd. & Ors vs. ITO summons had been served and responded to, or the summons though served had not been responded to. Based on the above, we opine that the A.O. has erred in utilizing the Mumbai and Guwahati Reports in a blanket fashion to add back the entire share capital and share application money received from all these investors as bogus credits u/s 68 of the Act.