Dhoot Developers Pvt. Ltd., Gurgaon V. ACIT, New Delhi

CO 151/DEL/2019

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0536 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-11-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-11-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MANOJ KATARUKA
• Keywords: Search and seizure
• Section: 68; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS ASTHA CHANDRA, JUDICIAL MEMBER ITA No. 931/DEL/2012 [A.Y. 2007-08] ITA No. 932/DEL/2012 [A.Y. 2008-09] The A.C.I.T Vs. M/s Dhoot Infrastructure Projects Ltd Central Circle – 1 904-907, Time Tower, M.G. Road New Delhi Sector – 28, Gurgaon PAN: AACCD 2118 H CO No. 150/DEL/2019 [A.Y. 2007-08] CO No. 151/DEL/2019 [A.Y. 2008-09] M/s Dhoot Infrastructure Projects Ltd Vs. The A.C.I.T 904-907, Time Tower, M.G. Road Central Circle – 1 Sector – 28, Gurgaon New Delhi PAN: AACCD 2118 H (Applicant) (Respondent) Assessee By : Shri Manoj Kataruka, Adv Department By : Shri T. James Singson, CIT-DR Date of Hearing : 09.11.2023 Date of Pronouncement : 17.11.2023 2 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- The above captioned two separate appeals by the Revenue and cross objections by the assessee are preferred against two separate orders of the ld. CIT(A) – 3, New Delhi dated 19.12.2011 & 20.12.2011 pertaining to Assessment Years 2007-08 & 2008-09 respectively. 2. Since underlying facts in the issues are identical in the captioned appeals, they were heard together and are disposed of by this common order for the sake of convenience and brevity. 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. 4. Briefly stated, the facts of the case are that search and seizure operation was carried out at the premises of the assessee on 25.09.2008 and accordingly, statutory notices were issued and served upon the assessee, in response to which, the assessee filed its return of income. 3 5. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has received share premium of Rs. 8.10 crores from the following parties : 1. Aarpee Commercial Co Pvt Ltd-Premium 69,30,000 2. Carnex vinimay Pvt Ld - Premium 88,20,000 3. C G Securities (P) Ltd - Premium 45,00,000 4. Gangotri Syntex (P) Ltd - Premium 45,00,000 5. Ganpati Riverside(P) Ltd - Premium 45,00,000 6. Jineshwar Trade (P) Ltd - Premium 76,50,000 7. Maxxon Trading & Finvest (P) Ltd - 72,00,000 - 8. Navoday Mercentils (P) Ltd - Premium 85,50,000 9. Oasis Synetx- Premium 49.50,000 10 . PKC Credit (P) Ltd - Premium 45,00,000 11 . Ravlon Commodities (P) Ltd - Premium 45,00,000 12 . Stupendors(P) Ltd - Premium 76,50,000 13 . Trincas Agency & Credit (P) Ltd - Premium Total 67,50,000 8,10,00,000 6. To verify the genuineness of the aforementioned credits, the Assessing Officer issued a questionnaire asking the assessee to furnish the following: “a. Return of income, balance sheets and 3CD report of all the companies on whose behalf share premium has been shown in the books of accounts. 4 b. Complete bank accounts of all these companies for the period 1-04- 2006 to 31-03-2009. c. Detail of shares allotted to these companies specifying the number of shares allotted. d. Enquiry of this office has revealed that these are non existence companies. As entries. As the amount has been introduced in your books of accounts so u/s 68 of Income Tax Act, 1961 the onus lies on you to prove that these are not sham companies but real entities. In this regard you are required to produce the Managing Directors of these companies in this office so as to verify the genuineness of the entity on whose behalf share premium has been introduced in the books of account.” 7. The assessee filed a detailed reply alongwith the required documents. The Assessing Officer further made enquiry by issuing notice u/s 133(6) of the Act to the aforementioned companies but received reply from five companies and accepted the transaction with these five companies but in respect of other companies, the Assessing Officer was of the opinion that these companies do not have sufficient funds for making the impugned investment in the share purchase of the assessee and proceeded to complete assessment by making an addition of Rs. 5.75 crores u/s 68 of the Act in respect of share premium. 5 8. The assessee carried the matter before the ld. CIT(A) and vehemently contended that the assessee has successfully discharged the onus cast upon it by provisions of section 68 of the Act by establishing the identity, genuineness of the transaction and capacity of the investors. 9. After considering the facts and submissions and after examining the documentary evidences, the ld. CIT(A) was convinced with the claim of the assessee and directed the Assessing Officer to delete the impugned addition. 10. We have given thoughtful consideration to the orders of the authorities below. We have also carefully verified the evidences brought on record in respect of credit entry. We find that the assessee has furnished declaration, allotment letter, bank statements and financial statements of the share applicants. 11. We find that each and every share applicant has confirmed the transaction by submitting reply to the information called for u/s 133(6) of the Act to the Deputy Commissioner of Income Tax, Central Circle–1. In our considered opinion, it is the prerogative of the Directors to 6 decide the share premium amount and wisdom of the applicants whether to purchase shares at such premium or not. 12. All that the Assessing Officer can examine for the impugned A.Y is credit in light of provisions of section 68 of the Act, for which the assessee is required to prove the identity, genuineness of the transaction and capacity. Evidences on record show that the identity has been established beyond doubt, share application transactions are through banking channel, entries duly reflected in the bank statement thereby justifying the genuineness of the transaction. 13. In so far as capacity is concerned, the following chart speaks for itself: 14. Considering the demonstrative evidences, we are of the considered view that the assessee has cast upon it by provisions of section 68 of the Act. Therefore, we decline to interfere with the findings of the ld. CIT(A). 15. Appeals of the Revenue are accordingly dismissed. 7 Considering the demonstrative evidences, we are of the considered view that the assessee has successfully discharged the onus cast upon it by provisions of section 68 of the Act. Therefore, we decline to interfere with the findings of the ld. CIT(A). Appeals of the Revenue are accordingly dismissed. Considering the demonstrative evidences, we are of the successfully discharged the onus cast upon it by provisions of section 68 of the Act. Therefore, we 8 16. Since the cross objections are not pressed, the same are also dismissed. 17. Before parting, the chart explaining the credit worthiness in ITA No. 932/DEL/2012 is as under: Name of the company Investment Etc Reserves & surplus Share Loan taken by the company Cash and bank balance capital Irrincas Agency & Credit Pvt 246,565,000 240,409,793 9,700,000 NIL 1,026,781 Ltd PKC Credit Pvt. Ltd. 167,657,424 166,961,737 8,200,000 NIL 1,120,879 Maxxon Trading & Finvest 193,875,190 196,070,917 10,000,000 NIL 2,563,479 Pvt. Ltd. Navoday Mercantile Pvt. Ltd 4,69,50,0000 370,319,371 19,500,000 NIL 215,306 Aarpee Commercial Co. Pvt Ltd 499,694,500 488125944 17,500,000 NIL 15342 - :. ~comel 9 18. In the result, the appeals of the Revenue in ITA Nos. 931 & 932/DEL/2012 as well as the cross objections of the assessee in CO Nos. 150 & 151/DEL/2019 are dismissed. The order is pronounced in the open court on 17.11.2023 in the presence of both the rival representatives. Sd/- Sd/- [ASTHA CHANDRA] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 17 th NOVEMBER, 2023. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 10 Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order