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5.14 The appellant was asked to furnish the name and address of the investors, who subscribed to the issue of GDRs issued by the company. The details were examined by the AO and it is found that in each of the series of GDRs issued by the appellant only a handful of the investors have subscribed to the GDR issue. AO has gone through the incriminating material collected in the course of search (details given in ITA Nos. 157 to 161 & 302 -303-C-2018 M/s SEL Manufacturing Co Ltd., Ludhiana page no. 3 of the assessment order) and made elaborate enquiries in the course of assessment proceedings which reveal that each of the GDR issue made by the appellant compan y was in fact a private placement of GDRs. The list of subscribers to each of the GDR issue has been given in the assessment order and was also filed by the appellant in the course of present proceedings. It is seen from the same that not more than seven persons have subscribed to the issue of GDRs.

5.24 It is pertinent to note that volume of the GDR issues made by the company in different years and the subsequent cancelation and conversion into equity shares created doubts ITA Nos. 157 to 161 & 302 -303-C-2018 M/s SEL Manufacturing Co Ltd., Ludhiana about the genuineness of the transaction. The appellant has in the written submissions filed admitted that in terms of the provisions of section 68 of the Act, the primary onus to explain the nature and source of the amount so found to be credited is on the assessee. The expression 'nature' encompasses bringing on record evidence about nature of the receipt, be it loan, advance, share application money, etc. The expression 'source' envisages establishing the identity and creditworthiness of the source/ person from whom the amount is received. The appellant has however furnished only skeleton information and failed to prove the identity of the creditor, credit worthiness of the creditor as well as genuineness of the transaction. The ultimate subscribers to the GDR issue were found to be only seven parties/entities and therefore, the claim of having made a public issue of GDR issue stands not proved. Further, the flow of funds from those entities to the bank account of the appellant could not be proved by the appellant. These entities are also found to be not credit worthy on account of these entities being hundred dollars companies having incurred losses as per their tax returns which have been collected by the AO.

16. The Ld. counsel for the assesse has submitted and demonstrated from the record that the appellant went public by listing its equity shares on the Bombay Stock Exchange and National Stock Exchange in the year 2007. The Ld. Counsel has further submitted that thereafter, in the year 2009, the company, in order to finance the expansion plans and to expand its market reach globally, offered its shares to non-residents. Thus, in order to raise capital denominated in foreign currency and to venture into private markets overseas, the appellant raised fours series of GDR issues over a period of these years and raised capital of 651 crores. It is submitted that each GDR represented one hundred equity shares of par value of Rs.10 and such underlying shares of the GDR was duly listed on the Luxemburg ITA Nos. 157 to 161 & 302 -303-C-2018 M/s SEL Manufacturing Co Ltd., Ludhiana Stock Exchange and traded on the Euro MTF Market. It is submitted that GDR issue is considered to be a 'private placement' in cases where no offering circular is placed before the overseas exchange, the approval of overseas exchange is not obtained and listing fees is not paid i.e. when the issue is not listed on the stock exchange. However, in this case the appellant had complied with requirements and the GDRs were duly listed on stock exchange. That the appellant raised four series of GDR issue over a period of three years and raised the capital.

21. Regarding the issue of creditworthiness of the investors and further the onus on the appellant to establish the source of the source, the counsel for the appellant has submitted that GDR issue was a Public Issue, in case of public companies, since the shares are listed on stock exchange and traded on a real time basis, the company cannot be expected to provide details of the shareholders. The counsel for the appellant in this respect has also placed reliance on various judicial decisions to contend that no addition could be made u/s 68 of the IT Act as the money was raised by the company through GDR issue from Overseas Investors by way of public issue, for which sufficient details have been filed before the AO. That the onus placed upon the appellant has been discharged by way of furnishing evidence. Even the appellant has furnished copy of confirmations procured from the lead managers in support of the GDR issue, which clearl y supports the genuineness of the transaction. Further, the amounts received by the appellant were duly reflected in the bank statement. It is stated that all the concerns from whom the appellant had received GDR investments were companies registered under the relevant laws of their state; regular income-tax assessees of the relevant countries. Further, the amounts received by the appellant were duly reflected in the regular books of accounts and the financial statements of the said concerns/parties duly furnished. Even that the that the investors in the appellant company were large fund houses and had made investments in well-known and reputed entities and all the funds were registered as either FII's or Funds with ITA Nos. 157 to 161 & 302 -303-C-2018 M/s SEL Manufacturing Co Ltd., Ludhiana SEBI and their details were also available with the regulators.