COMMISSIONER OF INCOME TAX (CENTRAL), LUDHIANA V. M/S PRESSTIME INFORMATION SERVICES PVT. LTD.

ITA/284/2011

AI Insights

The case revolves around an appeal by the Commissioner of Income-tax (Central), Ludhiana, challenging the orders that deleted an addition of `50,51,650 as income of the assessee-respondent, M/s Presstime Information Services Pvt. Ltd. The addition was initially made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, due to alleged non-genuineness and lack of creditworthiness of the creditors. The Commissioner (Appeals) and the Tribunal found that the assessee had sufficiently proved the genuineness of the transactions and the creditworthiness of the creditors, leading to the dismissal of the revenue's appeal.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 740900 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 02-02-2012
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S K MUKHI
• Assessee Lawyers: RAJESH SETHI
• Keywords: Additional evidence; Assessment Year 2000-01; Creditworthiness; Genuineness of transactions; Income Tax; Unsecured loans
• Section: 144; 142(1); 143(2); 68; 260A; 46A

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 284 of 2011 (O&M) Date of Decision: February 2, 2012 Commissioner of Income-tax (Central), Ludhiana …Appellant Versus M/s Presstime Information Services Pvt. Ltd. …Respondent CORAM: CORAM: CORAM: CORAM: HON'BLE MR HON'BLE MR HON'BLE MR HON'BLE MR. JUSTICE M.M. KUMAR . JUSTICE M.M. KUMAR . JUSTICE M.M. KUMAR . JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE HON’BLE MR. JUSTICE HON’BLE MR. JUSTICE HON’BLE MR. JUSTICE ALOK SINGH ALOK SINGH ALOK SINGH ALOK SINGH Present: Mr. Rajesh Sethi, Sr. Standing Counsel for the revenue-appellant. Mr. S.K. Mukhi, Advocate, for the assessee-respondent. 1. To be referred to the Reporters or not? 2. Whether the judgment should be reported in the Digest? M.M. KUMAR, J. M.M. KUMAR, J. M.M. KUMAR, J. M.M. KUMAR, J. 1. The revenue has preferred the instant appeal under Section 260A of the Income-tax Act, 1961 (for brevity, ‘the Act’) against the order dated 8.12.2010 (A-3) passed by the Chandigarh Bench ‘B’ of the Income Tax Appellate Tribunal (for brevity, ‘the Tribunal), dismissing the appeal of the revenue-appellant and upholding the order dated 15.4.2008 (A-2) passed by the Commissioner of Income Tax (Appeals), Ludhiana. The Commissioner has deleted the addition of `50,51,650/- as income of the assessee-respondent, which was made by the Assessing Officer under Section 68 of the Act while finalising the assessment in respect of the Assessment Year 2000-01, vide order dated 4.3.2003 (A-1). The Assessing Officer has come to the conclusion that the assessee-respondent failed to prove the genuineness of the ITA No. 284 of 2011 (O&M) 2 transactions and creditworthiness of the creditors. 2. Brief facts of the case are that the assessee-respondent is a private limited company and during the relevant Assessment Year 2000-01, it was engaged in the business of Investment and Consultancy. On 14.5.2001, the assessee-respondent filed the return declaring its income at `4,97,180/-. In the return of income the assessee-respondent has shown unsecured loans of `50,51,650/- (`72,000/- in the name of Mrs. Pritpal Kaur and `49,79,650/- in the name of Shri Reetinder Sidhu). It is claimed that since the assessee-respondent did not respond to the notices issued under Sections 143(2)/142(1) of the Act, therefore, the taxable income was assessed at `55,92,580/- under Section 144 of the Act, which also included an addition of `50,51,650/- under Section 68 of the Act. 3. Challenging the order passed by the Assessing Officer, the assessee-respondent filed an appeal before the CIT (A), Ludhiana. During the course of the appeal the Commissioner permitted the assessee-respondent to lead additional evidence under Rule 46A of the Income Tax Rules, 1962 (for brevity, ‘the Rules’). Copies of the additional evidence furnished by the assessee-respondent were also sent to the Assessing Officer for comments and after consideration of the report submitted by him the Commissioner deleted the addition by holding that the assessee-respondent has proved the genuineness of the transactions, identity, capacity and creditworthiness of the creditor, vide order dated 15.4.2008 (A-2). 4. Feeling dis-satisfied with the order dated 15.4.2008 (A-2) passed by the Commissioner, the revenue-appellant filed an appeal before the Tribunal. On 8.12.2010, the Tribunal dismissed the ITA No. 284 of 2011 (O&M) 3 appeal upholding the order of the Commissioner (A-3). The Tribunal endorsed the view taken by the Commissioner in paras 14 and 15 of its order by observing as under:- “14. We find that the CIT(A) has elaborately looked into the evidence filed by the assessee, which was admitted and taken on record pursuant to the remand report of the Assessing Officer. The said amount though has been reflected as received from Shri Reetinder Sidhu in the balance sheet of the assessee was in fact transferred from the bank account of Smt. Pritpal Kaur, one of the directors of the assessee company. She in turn had received the said amount from her son vide cheques/drafts issued abroad, which were deposited in her bank account and FDRs were made in the first instances from the said amounts received. Later the said FDRs were encashed and the amount deposited in the saving account of Smt. Pritpal Kaur with Punjab & Sind Bank, from where the cheques then issued to the assessee company. 15. The amount has by an error been shown to be received from Shri Reetinder Sidhu, as reflected in the balance sheet of the assessee company but in fact is the amount received from his mother Smt. Pritpal Kaur. The evidence of money received by Smt. Pritpal Kaur vide cheues/drafts from her son is furnished on record at pages 6 to 14 of the paper book and the copy of bank account of Smt. Pritpal Kaur evidencing the deposit of the said cheques is placed at pages 15 to 21 of the paper book. The said amount has been advanced to the ITA No. 284 of 2011 (O&M) 4 assessee company, and the same was returned by the assessee company to Shri Reetinder Sidhu after the demise of his mother Smt. Pritpal Kaur. The said evidence is furnished at page 26 of the paper book. The Ld. DR for the Revenue has failed to controvert the aforesaid evidence filed by the assessee before the CIT(A) and before us. In the absence of any contrary findings, we uphold the order of CIT(A) in holding that once the assessee has established the identity, creditworthiness and genuineness of the transactions, there is no merit in the addition u/s 68 of the Income Tax Act. Upholding the order of CIT(A), we dismiss the ground of appeal raised by the Revenue.” 5. Having heard learned counsel for the revenue-appellant we are of the considered view that no substantial question of law arises in the instant appeal. There are pure findings of fact, which have been recorded by the Commissioner, as upheld by the Tribunal. It is conceded position that the Commissioner has admitted the additional evidence under Rule 46A of the Rules after furnishing copies of the additional evidence to the Assessing Officer and seeking his report. It has come on record that the revenue has not been able to controvert the additional evidence adduced by the assessee-respondent. On the other hand, the assessee-respondent has been able to prove that none of the notices under Sections 143(2)/142(1) of the Act were either served or refused by any of the directors of the assessee company. Ample evidence has also come on record showing the transaction of the amount in dispute, as is evident from a bare reading of para 15 of the order passed by the Tribunal. The Tribunal and the Commissioner have recorded a ITA No. 284 of 2011 (O&M) 5 categorical finding that the assessee-respondent has established the identity, creditworthiness and genuinenss of the transactions. In these circumstances we see no legal infirmity in the view taken by the Tribunal and the Commissioner, warranting admission of the instant appeal. The appeal is without any merit. Dismissed. (M.M. KUMAR) (M.M. KUMAR) (M.M. KUMAR) (M.M. KUMAR) JUDGE JUDGE JUDGE JUDGE ( ( ( (ALOK SINGH ALOK SINGH ALOK SINGH ALOK SINGH) ) ) ) February 2 February 2 February 2 February 2, 2012 , 2012 , 2012 , 2012 JUDGE JUDGE JUDGE JUDGE PKapoor "