M/S LNS INDUSTRIES LTD., DURG(CG) V. DY. COMMISSIONER OF INCOME TAX, 1(1), BHILAI, BHILAI

ITA 110/BIL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6507 (ITAT-RAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: TDS Appeal
• Pronouncement Date: 08-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 22-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R B DOSHI
• Keywords: Unexplained cash credit; Set aside
• Section: 195; 250; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEMBER) ITA. NO: 110/RPR/2017 & S.P. NO. 03/RPR/2018 (ASSESSMENT YEAR: 2012-13) LNS INDUSTRIES LTD. HEAD OFFICE: 46 MOTILAL NEHRU NAGAR (EAST) BHILAI, DIST.- DURG, C.G. V/S THE DY. COMMISSIONER OF INCOME TAX 1(1), AMDI NAGAR HUDCO BHILAI, DIST.- DURG, C.G. (APPELLANT) (RESPONDENT) PAN: AAACL9414E APPELLANT BY : SHRI R. B. DOSHI, C.A. RESPONDENT BY : SHRI SANJAY KUMAR, D.R. ( )/ ORDER DATE OF HEARING : 08 -03-201 8 DATE OF PRONOUNCEMENT : 16 -04-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-II, RAIPUR DATED 24.03.2017 PERTAINING TO A.Y. 2012-13. ITA NO. 110/RPR/ 2017 & S.P. NO. 03/R/18 . A.Y. 2012- 13 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 4.90 CRORES MADE BY THE A.O. AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS AND ON PERUSING THE BALANCE SHEET OF THE ASSESSEE, THE A.O NOTICED THAT THE BALANCE SHEET SHOWS SHARE APPLICATION MONEY AT RS. 18,85,50,572/- PENDI NG FOR ALLOTMENT OF SHARES. THE DETAILS OF OUTSTANDING SHARE APPLICATION MONEY ARE AS UNDER:- 1 SHRI A BHINAV KHASGIWALA RS. 2,48,000/ - 2 SHRI ANSAR AHEMAD SAIYAD RS. 7,00,00,000/ - 3 SHRI J.K. JAIN RS. 50,000/ - 4 SHRI J.N. GUPTA RS. 1,77,32,205/ - 5 SHRI NARENDRA AGRAWAL RS. 1,00,000/ - 6 SHRI NIMISH AGRAWAL RS. 8,30,000/ - 7 SMT. NEHA AGRAWAL RS. 9,00000/ - 8 SMT. REKHA AGRAWAL RS. 45,70,917/ - 9 SMT. RUHI AGRAWAL RS. 25,00,000/ - 10 SHRI SUNIL AGRAWAL RS. 5,62,46,450/ - 11 MSA CONSULTANTS RS. 3,04,00,000/ - 12 R.K. ENTERPRISES RS. 50,00,000/ - TOTAL RS. 18,85,50,572/ - 4. THE A.O. FOUND THAT OUT OF THE TOTAL SHARE APPLICAT ION MONEY OF RS. 4.90 CRORES WAS RECEIVED DURING THE YEAR UNDER CONSIDERATION FR OM SHRI SUNIL AGRAWAL, NRI DIRECTOR OF THE ASSESSEE COMPANY. 5. SINCE THIS AMOUNT WAS RECEIVED DURING THE YEAR UNDE R CONSIDERATION, THE A.O. ASKED THE ASSESSEE TO JUSTIFY THE CREDIT IN THE LIG HT OF THE PROVISIONS OF SECTION 68 OF THE ACT. THE ASSESSEE FILED NECESSARY DETAILS ALONG WITH THE CONFIRMATION AND THE DETAILS OF THE PAYMENTS RECEIVED FROM SHRI SUNIL AGRAWAL ALONG WITH HIS BANK STATEMENTS. IT WAS EXPLAINED THAT THE MONEY WA S TRANSMITTED FROM DUBAI TO INDIA. ITA NO. 110/RPR/ 2017 & S.P. NO. 03/R/18 . A.Y. 2012- 13 3 6. AFTER PERUSING THE DOCUMENTARY EVIDENCES BROUGHT ON RECORD IN SUPPORT OF THE SHARE APPLICATION MONEY RECEIVED FROM THE DIRECTOR, SHRI SUINIL AGRAWAL, THE A.O. WAS NOT CONVINCED AND WAS OF THE FIRM BELIEF T HAT THE CLAIM OF THE ASSESSEE COMPANY THAT SHARE APPLICATION MONEY WAS D EPOSITED BY SHRI SUNIL AGRAWAL HAS NOT BEEN PROVED. THE BASIS FOR FORMING THIS BELIEF WAS THAT THE A.O. WAS OF THE OPINION THAT SHRI SUNIL AGRAWAL CO ULD NOT ESTABLISH THE SOURCE OF THE FUNDS DEPOSITED IN HIS BANK ACCOUNT. ADDITIO N OF RS. 4.90 CRORES WAS MADE U/S. 68 OF THE ACT. 7. THE ASSESSEE STRONGLY AGITATED THE MATTER BEFORE TH E LD. CIT(A) BUT COULD NOT SUCCEED. THE FIRST APPELLATE AUTHORITY WAS OF THE OPINION THAT THE ASSESSING OFFICER HAS GIVEN SOUND REASONS FOR MAKING THE ADDI TION AND THEREFORE NO INTERFERENCE WAS CALLED FOR. 8. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITERA TED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES RELYING UPON VARIOUS D OCUMENTS BROUGHT ON RECORD IN THE FORM OF A PAPER BOOK. PER CONTRA, THE LD. D. R. STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE INSOFAR AS THE IDENTIT Y OF SHRI SUNIL AGRAWAL IS CONCERNED. SHRI SUNIL AGRAWAL IS A DIRECTOR OF THE ASSESSEE COMPANY AND HIS IDENTITY HAS NOT BEEN QUESTIONED. THE TRANSACTIONS HAVE BEEN DONE THROUGH BANKING CHANNELS. MONEY HAS BEEN TRANSMITTED FROM D UBAI AS PER RELEVANT PROVISIONS OF THE RELEVANT ACT. GENUINENESS OF THE TRANSACTION IS ALSO NOT IN DOUBTED. THE ONLY REASON GIVEN BY THE REVENUE AUTHO RITIES FOR MAKING THE ADDITION IS THAT THE CAPACITY OF SHRI SUNI AGRAWAL HAS NOT BEEN PROVED. THE ITA NO. 110/RPR/ 2017 & S.P. NO. 03/R/18 . A.Y. 2012- 13 4 REVENUE AUTHORITIES HAVE QUESTIONED THE SOURCE OF T HE FUNDS FOUND IN THE BANK ACCOUNT OF SHRI SUNIL AGRAWAL. AT THE VERY OUTSET, WE HAVE TO MENTION THAT THE PROVISO ADDED TO SECTION 68 OF THE ACT IS APPLICABL E FROM 01.04.2013 I.E. A.Y. 2013-14 AND THEREFORE NOT APPLICABLE TO THE SUBJECT ASSESSMENT YEAR AS HELD BY THE CO-ORDINATE BENCH OF MUMBAI IN THE CASE OF GAGA NDEEP INFRASTRUCTURE PVT. LTD. IN ITA 5784/MUM/2011 WHICH WAS SUBSEQUENTLY CO NFIRMED BY THE HONBLE HIGH COURT OF BOMBAY IN 394 ITR 680. 10. NOW LET US EXAMINE THE DOCUMENTARY EVIDENCES BROUGH T ON RECORD AN EXAMINED BY THE REVENUE AUTHORITIES. THE STATEMENT SHOWING REMITTANCE DETAILS IS AS UNDER:- LNS INDUSTRIES LTD. STATEMENT SHOWING R EMITTANCE FROM SH. SUNIL AGRAWAL IN F.Y. 2011-12 FOREIGN REMITTER BANK DETAILS AMOUNT RECEIVED IN SH. SUNIL AGARWAL ACCOUNT PAYMENT FROM SH. SUNIL AGRAWAL TO LNS INDUSTREIS LTD. S R. N O . CH NO. /RTGS DATE RECEIV ED FORM CUR REN CY AM OUN T CH NO. /RTGS NO. BAN K NA ME DATE AMO UNT BAN K NA ME. CH. NO./RTGS NO. DATE AMO UNT 220518 AXIS BAN K LTD. 06.0 5.20 11 300 000 220534 AXIS BAN K LTD. 21.0 5.20 11 300 000 AXIS BAN K LTD. 223385 31.0 5.20 11 700 000 220590 AXIS BAN K LTD. 06.0 9.20 11 100 000 AXIS BAN K LTD. 223389 1 9.0 1.20 12 120 000 1 OT02091 1062114 46 21.0 6.20 11 SUNIL AGRAW AL, STAND ARD CHARTE RED DUBAI USD 100 000 OT02091 1062114 46 STAN DARD CHAR TERE D NRE 23.0 6.20 11 STAN DARD CHAR TERE D DUB AI 445 900 0 STAN DARD CAHR TERE D NRE ON36801 1070501 86 05.0 7201 1 160 000 00 2 OT02091 1062824 27 28.0 6.20 11 AGRAW AL, STAND ARD CHARTE RED DUBAI USD 320 000 OT02091 1062824 27 STAN DARD CHAR TERE D NRE 04.0 7.20 11 STAN DARD CHAR TERE D DUB AI 143 456 00 STAN DARD CAHR TERE D NRE ON36801 1101801 82 18.1 0.20 11 270 000 0 ITA NO. 110/RPR/ 2017 & S.P. NO. 03/R/18 . A.Y. 2012- 13 5 3 OT02491 1101812 08 18.1 0.20 11 MSA TRADIN G FZC, STAND ARD CHARTE RED,AB U DHABI AED 200 000 OT02491 1101812 08 STAN DARD CHAR TERE D NRE 19.1 0.20 11 MSA TRAD ING FZC, RAK 265 745 4 STAN DARD CAHR TERE D NRE 821476 17.1 1.20 11 250 000 0 4 OT02491 1102418 29 24.1 0.20 11 MSA TRADIN G FZC, STAND ARD CHARTE RED,AB U DHABI AED 200 000 OT02491 1102418 29 STAN DARD CHAR TERE D NRE 25.1 0.20 11 MSA TRAD ING FZC, RAK 265 957 4 STAN DARD CAHR TERE D NRE 821478 24.1 1.20 11 200 000 0 5 OT02791 2013002 56 21.0 1.20 12 SUNIL AGRAW AL, STAND ARD CHARTE RED DUBAI USD 900 00 OT02791 2013002 56 STAN DARD CHAR TERE D NRE 30. 0 1.20 12 STAN DARD CHAR TERE D DUB AI 449 280 0 STAN DARD CAHR TERE D NRE 821479 30.0 1.20 12 500 000 6 BKIDH12 0458026 82 14.0 2.20 12 HABIB BANK AG ZURICH, DUBAI INR 195 566 9 BKIDH12 0458026 82 STAN DARD CHAR TERE D NRE 14.0 2.20 12 HABI B BAN K AG ZURI CH, DUB AI 195 566 9 STAN DARD CAHR TERE D NRE OT36801 2013104 06 31.0 1.20 12 450 000 0 7 BKIDH12 0548808 81 23.0 2.20 12 HABIB BANK AG ZURICH, DUBAI INR 799 990 0 BKIDH12 0548808 81 STAN DARD CHAR TERE D NRE 23.0 2.20 12 HABI B BAN K AG ZURI CH, DUB AI 799 999 00 STAN DARD CAHR TERE D NRE SCBHL12 0470025 86 16.0 2.20 12 200 000 0 8 BKIDH12 0548891 58 23.0 2.20 12 HABIB BANK AG ZURICH, DUBAI INR 678 140 7 BKIDH12 0548891 58 STAN DARD CHAR TERE D NRE 23.0 2.20 12 MSA TRAD ING FZC, RAK 678 140 7 STAN DARD CAHR TERE D NRE SCBHL12 0540045 22 23.0 2.20 12 800 000 0 9 BKIDH12 0559007 10 24.0 2.20 12 HA BIB BANK AG ZURICH, DUBAI INR 324 494 7 BKIDH12 0559007 10 STAN DARD CHAR TERE D NRE 24.0 2.20 12 MSA TRAD ING FZC, RAK 324 494 7 STAN DARD CAHR TERE D NRE SCBHL12 0580038 58 27.0 2.20 12 100 000 00 TOTA L 492 963 51 490 200 00 ITA NO. 110/RPR/ 2017 & S.P. NO. 03/R/18 . A.Y. 2012- 13 6 11. DEPOSITS AT SERIAL NO. 1 & 2 HAS COME FROM STANDARD CHARTERED BANK, DUBAI AS PER THE FOLLOWING BANK STATEMENTS:- SUNIL KUMAR AGARWAL & / OR REKHA AGARWAL STANDARD CHARTERED BANK BRANCH : DUBAI ENQUIRY TE. NO. : 600522288 STMT NO. /DATE : 1 OF 1/ 29 JUNE 11 CURRENCY : USD ACCOUNT TYPE : CURRENT ACCOUNT ACCOUNT NO. : 01203387401 DATE DESCRIPTION WITHDRAWAL DEPOSIT BALANCE 1 JUNE11 BALANCE BROUGHT FORWARD 249975.00 18 JUNE 11 IT02091106180314 HANYUS33XXX PEAK STAR TRADING CO.(L.L.C), (GOVTBUS TRF AGST CHEQUE RECEIVED TRF TO A/COF BUSINESS ASS 221562.00 338517.77 471537.00 20 JUNE 11 OT02091106180933 TT CHARGES OT02091106180933 2033874 7.00 21000.00 471530.00 450530.00 21 JUNE 11 SUNIL KUMAR AGAR TXN DATE : [23/06/2011 100000.00 350530.00 28 JUNE 11 OT02091106282427 SUNIL KUMAR AGAR 320000.00 30530.00 12. DEPOSIT AT SERIAL NO. 3 HAS COME FROM STANDARD CHAR TERED BANK, ABU DHABI BRANCH AS UNDER:- M.S.A TRADING FZC STANDARD CHARTERED BANK BRANCH : ABU DHABI ENQUIRY TE. NO. : 600522288 STMT NO. /DATE : 1 OF 1/ 20 OCT 11 CURRENCY : AED ACCOUNT TYPE : CURRENT ACCOUNT ACCOUNT NO. : 01605953801 DATE DESCRIPTION WITHDRAWAL DEPOSIT BALANCE 14 OCT 11 BALANCE BROUGHT FORWARD 342199.77 16 OCT 11 TRANSFER CHEQUE DEBIT CHEQUE NO. 0000108385 3682.00 338517.77 17 OCT 11 CASH WITHDRAWAL CHEQUE NO. 0000108389 71760.00 266757.77 18 OCT. 11 CHEQUE NO. 0000108386 CHEQUE NO. 0000108387 OT02491110181208 TT CHARGES OT02491110181208 SUNIL KUMAR AGAR 4641.00 977.00 40.00 200000.00 262116.77 261139.33 261099.33 61099.33 19 OCT.11 CASH DEPOSIT TRANSFER CHEQUE CREDIT TRADE LICENCE REVERSAL 200000.00 170000.00 2000.00 261099.33 431099.33 433.099.33 20 OCT. 11 TRANSFER CHEQUE CREDIT 200000.00 633099.33 ITA NO. 110/RPR/ 2017 & S.P. NO. 03/R/18 . A.Y. 2012- 13 7 13. DEPOSIT AT SERIAL NO. 4 HAS COME FROM STANDARD CHAR TERED BANK, ABU DHABI BRANCH AS UNDER:- M.S.A TRADING FZC STANDARD CHARTERED BANK BRANCH : ABU DHABI ENQUIRY TE. NO. : 600522288 STMT NO. /DATE : 1 OF 1/ 27 OCT 11 CURRENCY : AED ACCOUNT TYPE : CURRENT ACCOUNT ACCOUNT NO. : 01605953801 D ATE DESCRIPTION WITHDRAWAL DEPOSIT BALANCE 21 OCT 11 BALANCE BROUGHT FORWARD 633099.33 23 OCT 11 TRANSFER CHEQUE DEBIT CHEQUE NO. 0000108390 270000.00 363099.33 24 OCT 11 OT02491110241829 TT CHARGES OT02491110241829 SUNIL KUMAR AGAR 40.00 200000.00 363059.00 163059.33 14. DEPOSIT AT SERIAL NO. 5 HAS COME FROM STANDARD CHAR TERED BANK, DUBAI AS UNDER:- SUNIL KUMAR AGARWAL &/OR REKHA AGAF BRANCH : DUBAI P.O.BOX CURRENCY : USD ACCOUNT NO. : 01203387401 DATE FROM : 01/01/2012 TO DATE : 01/04/2012 START BALANCE : 30,488.00 CR DATE DESCRIPTION WITHDRAWAL DEPOSIT BALANCE 10 JAN 12 BY ORDER PEAK STAR TRADING CO. (LLC) 0.00 93,100.00 123,588.00 CR 17 JAN 12 OT02091201171423 TT CHARGES OT02091201171423 2033874 7.00 27.000.00 0.00 0.00 123,581.00 CR 96,581.00 CR 21 JAN 12 OT02091201210264 TT CHARGES OT02091201210264 SUNIL AGARWAL 27.00 90,000.00 0.00 0.00 96,554.00 CR 6,554.00 CR 24 JAN 12 REV OF OT02091201210264 0.00 27.00 6,581.00 CR 30 JAN 12 OT02091201210264 UAINV0561 20.00 0.00 6,561,00 CR 07 FEB 2012 OT0209120 1300256 OTHER BANK CHARGES 30.76 0.00 6,530.24 CR 15. AND DEPOSIT AT SERIAL NOS. 6, 7, 8 & 9 HAS COME FRO M STANDARD CHARTERED BANK BARAKHAMBA ROAD AND THE SAME IS AS UNDER:- ITA NO. 110/RPR/ 2017 & S.P. NO. 03/R/18 . A.Y. 2012- 13 8 000584 DDAB05 MR SUNIL KUMAR AGARWAL BRANCH : BARAKHAMBA ROAD 601 SOUTH RIDGE TOWER NO 06 BURJ DOWN STATEMENT DATE : 29 FEB 2012 TOWN P O BOX 48987 CURRENCY : INR DUBAI ACCOUN T TYPE NRE SAVINGS ACCOUNT UNITED ARAB EMIRATES ACCOUNT NO. : 52211931027 NOMINEE REGISTERED : YES BRANCH ADDRESS: NARAIN MANZIL;23, BARAKHAMBA ROAD NEW DELHI 110001 IFSC: SCBL0036020 , PHONE NO.: 41524403 DATE VALUE DATE DESCRIPTION CHEQUE DEPOSIT WIT HDRAWAL BALANCE FEB 01 FEB 14 FEB 01 FEB 14 BALANCE FORWARD I L36701202143558 BKIDH12045802682 HABIB BANKAG ZURICH OMMISSION PAID SENDER IFSCBKID0000150 1,955,669.00 1,85,519,89 2,141,188,89 FEB 16 FEB 16 OL36801202160918 SCBLH12047002586 LNS INDUSTRIES LTD INVESTMENT RECEIVER IFSC UTIB0000214 2,000,000.00 1,41,188.89 FEB 23 FEB 23 IL36701202230433 BKIDH12054880881 HABIB BANK AG ZURICH COMMISSION PAID SENDER IFSCBKID0000150 IL36701202232898 BKIDH12054889158 PEAK STAR TRADING CO LLC COMMISSION PAID SENDER IFSC8KID0000150 OL36801202231729 SCBLH12054004522 LNS INDUSTRIES LTD FUND TRF RECEIVER IFSC UTIBOOOOZ14 7,999,900.00 6,781,407.00 8,000,000.00 8,141,088.89 14,922,495.89 6,922,495.89 FEB 24 FEB 24 IL36701202241011 BKIDH12055900710 SPACE STAR GENERAL TRADING SENDER IFSCBKID0000150 3,244,947.00 10,167,442,89 FEB 27 FEB 27 OL36801202271173 SCBLH 12058003858 LNS INDUSTRIES LTD INVESTMENT RECEIVER IFSC UTIB0000214 RTGS RETURN SCBLH12058003858 LNS INDUSTRIES LTD //SCBLH 12058003858//ACCOUNT DOES N OL36801202271173 IL36701202275903 TOTAL 10,000,000.00 29,981,923,00 10,000,000.00 20,000,000.00 167,442,89 10,167,442.89 10,167,442.89 16. A PERUSAL OF THE AFORE-STATED DETAILS CLEARLY ESTA BLISHES THE SOURCES OF SHRI SUNIL AGRAWAL. IT IS NOT THE CASE OF THE ASSESSING OFFICE R THAT THE APPELLANT COMPANY ITA NO. 110/RPR/ 2017 & S.P. NO. 03/R/18 . A.Y. 2012- 13 9 HAS PURCHASED CHEQUE FROM SHRI SUNIL AGRAWAL BY PAY ING CASH. IT CAN BE SEEN FROM THE ABOVE THAT EVERY TIME THE MONEY HAS BEEN T RANSMITTED BY SHRI SUNIL AGRAWAL HE HAD CLEAR BALANCE IN HIS BANK ACCOUNT. AS MENTIONED ELSEWHERE, FOR THE SUBJECT ASSESSMENT YEAR, THE REVENUE CANNOT QUE STION THE SOURCE OF THE SOURCE. 17. CONSIDERING THE FACTS MENTIONED HEREINABOVE, WE HAV E NO HESITATION TO HOLD THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE O NUS CAST UPON IT BY PROVISIONS OF SECTION 68 OF THE ACT AND THEREFORE NO ADVERSE I NFERENCE IS CALLED FOR. 18. WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIR ECT THE A.O. TO DELETE THE ADDITION OF RS. 4,90,20,000/-. APPEAL FILED BY THE ASSESSEE IS ALLOWED. 19. SINCE WE HAVE DECIDED THE APPEAL IN FAVOUR OF THE A SSESSEE, THE STAY PETITION FILED BY THE ASSESSEE BECOMES OTIOSE. ORDER PRONOUNCED IN OPEN COURT ON 16 - 04- 20 18 SD/- SD/- (RAM LAL NEGI) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUN TANT MEMBER RAIPUR: DATED 16/04/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER SR. P.S. ITAT,RAIPUR