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17. Shri Kumar Raichand Madan, Director of Dhanus Technologies Ltd in the statement, stated that his company had made investment in 6500 equity shares of BSPL for Rs.9.75 crores in Assessment Year 2012-13. The share price was based on share valuation report and on mutual consent. He produced audited balance sheet of the company as on 31.12.2011 reflecting the investment made in BSPL. He also stated that his company was engaged in the business of telecom, BPO and flee track prior to going into liquidation. On being asked by appellate authority, he HIGH COURT OF M.P. BENCH AT INDORE Pg. No.--17-- (ITA No.112/2018 & Other connected matters) stated that there are two main concerns of Shri Naresh Kumar. One is situated at Chandni Chowk, Kucha Majajan, Delhi under the name of Rohtak Chain Co. and the other is situated at first floor of Bank Street, Karol Bagh under the name of Chain House. He also stated that all the decision including the decision of making investment in BSPL was taken by the Board of company. He denied to have any connection or knowledge of Shri Sawan Kumar Jajoo. He also stated that it is not correct to say that he was supplying any dummy directors to Shrish Chandrakant Shah. In fact Shrish Chandrakant Shah was providing data hub services to his company.

"In view of the above facts and circumstances, I hold that the share capital has been genuinely received and genuinely reinvested. I am also satisfied with identity, creditworthiness of the investors, and genuineness of the transactions.
Therefore, I am satisfied that the condition u/s 68 stands satisfied. Hence the conclusion of the AO is rejected."

26. On the allegation of the assessing officer regarding appointment of dummy directors, the appellate authority held the following :-

"The appellant company had argued without prejudice to the merits of the conclusion, that any statement recorded in the search of others without providing opportunity of cross examination cannot be used in the assessment of the appellant company while making the assessment. In any case for that matter, I have myself recorded the statement of the persons who all have deviated from there earlier statements which were stated to be recorded under fear and misrepresentation. During examination the books of account were also produced by the concerned directors. They satisfactorily explained and replied all the queries raised by me regarding the business activities of their respective companies, explained the investment made in the appellant company and also explained the source thereof. They were found to be fully acquainted with the directors HIGH COURT OF M.P. BENCH AT INDORE Pg. No.--26-- (ITA No.112/2018 & Other connected matters) of the investee company. They also explained about the business premises and activities of the associates companies of the appellant. They fully explained the purpose of making the investment in the appellant company. Under this background I have no hesitation in holding that none of these persons were acting as dummy directors. Hence this conclusion of the AO is rejected."