M/s. Maya Fan Engineering Private Limited, Dewas V. The ITO Wd-1(2), Ujjain

ITA 10/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5864 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: K C AGRAWAL
• Keywords: Unexplained investment
• Section: 147; 69

Judgement Text

ITA NO.10 OF 2014 MAYA FAN ENGG. 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.10/IND/2014 A.Y. 2006-07 M/S. MAYA FAN ENGINEERING P. LTD., DEWAS PAN AAECM 4586 A :: APPELLANT VS ITO-WARD-1(2), UJJAIN :: RESPONDENT ASSESSEE BY SHRI K.C. AGRAWAL, CA RESPONDENT BY SHRI G.S. GAUTAM, DR DATE OF HEARING 12.1.2016 DATE OF PRONOUNCEMENT 12.1.2016 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE ORDER OF LD. CIT(A)-UJJAIN, DATED 01.10.2013 ON THE GROUND THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION AT RS.1,74,500 /- ON SUBSTA NTIVE BASIS. 2. FAC TS, AS NOTED BY THE AO, ARE THAT THE ASSESSEE HAS RECEIVED RS.1,74,500/- AS SHARE APPLICATION MON EY FROM SHRI PRASHANT SHARMA THROUGH CHEQUES. THE INSPECTO R HAS RECORDED THE STATEMENT OF SHRI SHARMA, WHEREIN, IT WAS STATED BY SHRI SHARMA THAT THE DIRECTOR OF THE ASSESSEE WA S DEPOSITING HIS MONEY IN CASH IN HIS BANK ACCOUNT AND GETTING C HEQUE OF THE SAME AMOUNT ON THE SAME DAY FROM HIM. MR. SHARMA S TATED THAT HE HAS NO IDEA OF APPLYING FOR ANY SHARE OF TH E ITA NO.10 OF 2014 MAYA FAN ENGG. 2 COMPANY. THUS, THE AO WAS OF THE VIEW THAT THE ASSE SSEE CO. HAS ROUTED ITS MONEY THROUGH SHRI PRASHANT SHARMA A ND AS SUCH, THE AO HELD THAT THE AMOUNT OF RS.1,74,500/- IS NOTHING BUT THE ASSESSEES OWN MONEY FROM UNDISCLOSED SOURC ES. BUT, SINCE SHRI SHARMA HAD APPLIED FOR THE SHARES OF THE ASSESSEE CO. AND MONEY WAS WITHDRAWN FROM HIS BANK ACCOUNT, THE SOURCE OF WHICH REMAINED UNPROVED, ADDITION OF RS.1,74,500 /- WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE CO. ON PRO TECTIVE BASIS AND PROCEEDINGS U/S 147 OF THE I.T. ACT WERE DIRECT ED TO BE INITIATED IN THE CASE OF SHRI SHARMA TO ASSESS THE INCOME ON SUBSTANTIVE BASIS FOR UNEXPLAINED INVESTMENT IN SHA RES OF THE ASSESSEE CO. U/S 69 OF THE I.T. ACT. 3. ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A), W HO HELD THAT SINCE THE AMOUNT WAS ASSESSEES OWN MONEY FROM UNDISCLOSED SOURCE AS HELD BY THE AO, ADDITION OF R S.1,74,500/- COULD NOT BE MADE ON PROTECTIVE BASIS. ACCORDINGLY, LD. CIT(A) CONFIRMED THE ADDITION ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE CO. AGGRIEVED WITH THE SAME, THE ASSESSEE IS BEFORE THE TRIBUNAL. 4. BEFORE ME, T HE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT LD. CIT(A) WAS NOT RIGHT IN CONFIRMING THE ADDITION ON SUBSTANTIVE BASIS FOR SHARE CAPITAL INTRODUCED BY SHRI PRASHANT SHARMA AS ASSES SEE HAD DISCHARGED IT PRELIMINARY ONUS AND HAD PROVED THE IDENTITY, GENUI NENESS AND CREDIT ITA NO.10 OF 2014 MAYA FAN ENGG. 3 WORTHINESS OF SHRI PRASHANT SHARMA. FURTHER, THE AO DUE TO TYPOGRAPHICAL ERROR ADDED THE SUM OF RS.1,74,500/- INSTEAD OF RS. 1,54,500/-. ASSESSEE HAD PROVIDED ALL THE POSSIBLE INFORMATION. SHRI SHARMA HAS, IN HIS STATEMENT, ADMITTED THAT CHEQUES WERE ISSUED BY HIM TO THE ASS ESSEE. IT IS ALSO SEEN THAT ONLY RS.96,000/- WAS DEPOSITED IN CASH WHEREAS CHEQ UES WERE ISSUED FOR RS.1,54,500/-, THEREFORE, THE CONTENTION OF SHRI SH ARMA ABOUT DEPOSIT OF CASH BY DIRECTOR OF THE ASSESSEE COMPANY AGAINST THE CHE QUE HAS NO FORCE. MOREOVER, THE STATEMENT OF SHRI SHARMA WAS NOT CONF RONTED WITH THE ASSESSEE, WHICH IS NOT JUSTIFIED IN VIEW OF JUDICIA L PRONOUNCEMENTS. THERE IS NO EVIDENCE BROUGHT ON RECORD BY THE DEPARTMENT WHI CH SUGGESTS THAT THE AMOUNT, SO RECEIVED, TOWARDS SHARE APPLICATION IS A SSESSEES OWN MONEY. EVEN THE AO HAS MADE THE ADDITION ON PROTECTIVE BAS IS IN ASSESSEES CASE AND SUBSTANTIVE ADDITION HAS BEEN MADE IN THE CASE OF SHRI PRASHANT SHARMA AS IS EVIDENT FROM THE ASSESSMENT ORDER DATED 16.11 .2009 FILED IN THE PAPER BOOK, THEREFORE, THE LD. CIT(A), IN VIEW OF AFORESA ID FACTS, IS NOT RIGHT IN CONFIRMING THE ADDITION ON SUBSTANTIVE BASIS. ON TH E OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE OR DERS OF LOWER AUTHORITIES. I FIND THAT IN VIEW OF THE FACTS AND S UBMISSIONS THEREOF, AS NARRATED ABOVE, THE MATTER REQUIRES RECONSIDERATION AT THE L EVEL OF THE AO. THE ASSESSEE HAS FILED A PAPER BOOK RUNNING INTO 12 PAG ES ALONG WITH WRITTEN SUBMISSIONS, WHEREIN, THE RELEVANT DOCUMENTS HAVE B EEN ANNEXED AND SOME TYPOGRAPHICAL ERROR HAS ALSO BEEN POINTED OUT. ASSE SSEE HAS AGITATED THAT THE ITA NO.10 OF 2014 MAYA FAN ENGG. 4 STATEMENT OF SHRI SHARMA WAS NOT CONFRONTED WITH TH E ASSESSEE AND THE REQUIRED DOCUMENTS HAVE ALSO NOT BEEN SUPPLIED TO T HE ASSESSEE. THE ASSESSEE HAS ALSO AGITATED THAT LD. CIT(A) HAS UNNE CESSARILY MODIFIED THE PROTECTIVE ADDITION INTO SUBSTANTIVE ADDITION IN CA SE OF PRESENT ASSESSEE AS THE SUBSTANTIVE ADDITION HAS BEEN MADE BY THE AO IN THE CASE OF SHRI PRASHANT SHARMA. ALL THESE REQUIRE CONSIDERATION OF THE AO IN THE LIGHT OF THE JUDICIAL PRONOUNCEMENTS AS QUOTED IN ASSESSEES SUB MISSIONS. THEREFORE, I SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES. IN TERMS AS DISCUSSED ABOVE, THE MATTER IS RESTORED BACK TO THE FILE OF THE LD. AO WITH DIRECTION TO FRAME THE ASSESSMENT DE NOVO AS PER LAW. THE AO SHALL DECIDE THE ISSUE AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASS ESSEE SHALL BE AT LIBERTY TO FILE ANY FURTHER EVIDENCE, IF ANY, IN SUPPORT OF IT S CLAIM. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12.1.2016 . SD/- (B.C. MEENA) ACCOUNTANT MEMBER DATED : 12.1.2016 !VYS! COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE