Deputy Commissioner of Income TAx, Hyderabad V. M/s. Matrix Enport Holdings Pvt. Ltd., Secunderabad

ITA 1216/HYD/2013

• Counselvise Citation: 121622514 RSA 2013
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 20-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Additional evidence
• Section: 68

Judgement Text

` IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1216/HYD/13 : ASSESSMENT YEAR 2009 - 10 DY. COMMISSIONER OF INCOME - TAX, CIRCLE 16(2), HYDERABAD V/S. M/S. MATRIX E N PORT HOLDINGS PVT. LTD., SECUNDERABAD. ( PAN - AAFCM 4926 R ) (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI D.SUDHAKAR RAO DR RESPONDENT BY : SHRI K.A.SAI PRASAD DATE OF HEARING 1 .0 7 .2014 DATE OF PRONOUNCEMENT 9.07.2014 O R D E R PER B.RAMAKOTAIAH, ACCOUNTANT MEMBER: THIS IS REVENUES APPEAL AGAINST THE O R DER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) V, HYDERABAD DATED 31.5.2013 , FOR THE ASSESSMENT YEAR 2009 - 10 . 2. REVENUE HAS RAISED FOUR GROUNDS ON THE ISSUE OF ACCEPTING INVESTMENT OF RS.5 CRORES , BY THE CIT(A), AS GENUINE, AND THE REVENUE CONTENDS THAT THE CIT(A) ERRED IN CONSIDERING THE GENUINENESS IN THE ABSENCE OF CONFIRMATION OF ASSESSI NG OFFICER IN HIS REMAND REPORT. 3. BRIEFLY STATED, ASSESSEE COMPANY FIELD RETURN FOR THE ASSESSMENT YEAR 2009 - 10, ADMITTING TOTAL INCOME OF R S .11,32,423. THE ASSESSING OFFICER NO T ICED THAT T HE ASSESSEE HAS RECEIVED SHARE APPLICA T ION MONEY OF RS.205.88 CRORES DURING THE PREVIOUS YEAR. ASSESSEE WAS ASKED TO PRODUCE EVIDENCES ALONGWITH CONFIRMATION LETTERS OF THE PERSONS FROM W H OM SHARE APPLICATION MONEY WAS RECEIV E D. OUT OF IT, THE ASSESSEE COULD NOT FURNISH CONFIRMATION IN THE CA SES OF FOLLOWING FOUR PERSONS TO AN E X TENT I TA NO .1216 /HYD/201 3 M/S. MATRIX ENPORT HOLDINGS PVT. LTD., SECUNDERABAD 2 OF R S .19 CRORES DUE TO NON - AVAILABILITY OF THOSE PERSONS AT THE R ELEVANT POINT OF TIME - 1 . CHAMUDNESWAR NATH V . RS.15 CRORES 2 . ESWARA NARAYANA K. RS.1.5 CRORES 3 . HARI KRISHNA RS.1.5 CRORES 4 . SWATHI K. RS.1 CR ORE _____________ TOTAL RS.19 CRORES _____________ THE ASSESSING OFFICER ADDED THE AMOUNT O F R S .19 CRORES, RELYING ON THE RELYING ON THE DECISIONS OF CALCUTTA H IGH COU R T IN THE CASE OF CIT V/S. RUBY TRADERS & EXPORTERS LTD. (263 ITR 3 00) AND RAJASTHAN H IGH COURT IN THE CASE OF CIT V/S. FIRST POINT FINANCE LT D . (286 ITR 477). 3. BEFORE THE LEARNED CIT(A), ASSESSEE FILED CONFIRMATION LETTERS ALONGWITH ADDITIONAL EVIDENCE, WHICH WAS SENT TO THE ASSESSING OFFICER ON REMAND. THE ASSES SING OFFICER IN HIS VARIOUS REMAND REPORTS ACCEPTED THAT SHRI V .CHAMUNDESWAR NATH HAS CONFIRMED RS.15 LAKHS AND OTHER THREE PERSONS ALSO CONFIRMED THE AMOUNTS INVESTED BY THEM. HOW E VER, THE ASSESSING OFFICER FURTHER EXAMINED THE SOURCES OF SHRI CHAMUNDES WAR N ATH IN HIS REMAND REPORT AND FOUND THAT AN AMOUNT OF RS.5 CRORES WAS CLAIMED TO HAVE BEEN RECEIVED F R OM M/S. SURESH P RODUCTIONS. THE ASSESSEE DID FURNISH THE EVIDENCES WITH REFERENCE TO THE CREDIT OF M/S. SURESH PRODUCTIONS TO SHRI CHAMUDNESHWAR NATH AND EXPLAINED THAT M/S. SURESH PRODUCTIONS HAS PAID AN AMOUNT O F R S .5 CRORES VIDE CHEQUE NO.817170 DATED 30.3.2008 DIRECTLY TO M/S. VANPIC PROJE C TS PVT. LTD., AND SUBSEQUENTLY, BY WAY OF JOU R NAL ENTRIES THE AMOUNTS WERE TRANSFERRED TO THE ASSESSEE COMPANY AND SHRI CHAMUNDESWAR NATH HAS ALSO PAID BACK THE AMOUNTS TO M/S. SURESH PRO D UCTIONS. HOW E VER, THE ASSESSING OFFICER I TA NO .1216 /HYD/201 3 M/S. MATRIX ENPORT HOLDINGS PVT. LTD., SECUNDERABAD 3 DID NO T ACCEPT THE SAID TRANSACTION OF R S . 5 CRO R ES BETWEEN SHRI CHANMUNDESWAR NATH AND M /S. SURESH PR O DUCTIONS. THE ASSESSEE CONTESTED THE SAME BEFORE THE LEARNED CIT(A) STATING THAT THE AMOUNT OF R S .15 CRO R ES STANDS CONFIRMED AND THE ASSESSING OFFICER WAS DOUBTING THE S OURCES OF THE SOURCE WHICH HE COULD NOT DO, W HEN EXAMINING THE CREDITS OF A COMPANY. CON S I D ERING THE DETAILED SUBMI S SION S AND EVIDENCES PLACED ON RE C ORD, THE LEARNED CIT(A) DELETED THE AMOUNT , STATING AS UNDER - 6 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER, REMAND REPO R TS, SUBMI S SION S AND THE EVIDENCES FILED BY THE APPELLANT. TH E APPELLANT FI L ED COPIES OF IN VE STORS BANK STATEMENTS, INCOME - TAX RETURNS AND CON F IRMA T ION LETTERS. IN CASE OF ON E O F THE INVESTORS, SHRI V.CHAMNUNDESHWAR NATH, THE APPELLANT EVEN FILED C ON F IRMATION LETTERS FROM HIS THREE LOAN CREDITORS CITED ABOVE. TH E R E IS NO DOUBT ABOUT THE FACT THAT THE MONIES WERE RECEIEVED BY TH E APPELLANT BY ACCOUNT PAYEE CHEQUES TOWARDS SHARE APPLICATION MONEY. THE INVESTORS A R E ASSESSEES ON THE ROLLS O F THE DEPARTMENT. THUS, THERE IS NO REASON TO DOUBT THE GENUINENESS OF THE CR E DITS IN TH E FORM OF SHARE AP P LI C ATION MONEY AND THE CREDITWORTHINESS OF THE INV E STORS. I TH E R E F O RE , HOLD THAT THE PROVISION S OF SEC T ION 68 ARE NO T AP P LI C ABL E TO THE CR ED ITS AMOUN T IN G TO RS.19CRORES. THE ASSESSING OFFICER IS AC C OR D INGLY DIRECTED TO DELETE THE ADDITION OF R S . 19 CRORES. 4. AGGRIEVED, REVENUE PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. AFTER CONSIDERING THE RI V AL CONTENTION S , WE DO NO T SEE ANY MERIT IN THE REVENUES GROUNDS . FIRST OF ALL, WE ARE UNABLE TO UNDERSTAND HOW THE RE VENUE IS CONTESTING THE ISSUE, WHEN SHRI CHAMUNDESWAR N ATH CONFIRMED THE AMOUNT OF RS.15 CRORES AS INVESTED BY HIM AND A L SO FURNISHED THE EVIDENCE WITH REFERENCE TO HIS BANK ACCOUNTS AND RETURNS FIL E D BY HIM. ALL THE FOUR INV E STORS ARE ASSESSEES ON RECO RD, AND THERE IS NO DISPUTE WITH REFERENCE TO CONFIRMATIONS FIL E D BY THEM, AS FAR AS SHARE APPLICATION MON E Y RECEIPTS ARE CON CE RNED. IF THE ASSESSING OFFICER HAS ANY DOUBT ABOUT THE LOANS OBTAINED BY SHRI CHAMUNDESWAR NATH, IT IS FOR THE ASSESSING OFFICER WHO IS ASSESSING THE SAID PERSON TO EXAMINE THE CREDITS IN HIS HAND, BUT R E V EN UE IS INTERESTINGLY RAISING THE G R OUND IN THIS APPEAL I TA NO .1216 /HYD/201 3 M/S. MATRIX ENPORT HOLDINGS PVT. LTD., SECUNDERABAD 4 THAT SOURCE OF THE SOU R CE WAS NO T CONFIRMED. THE ASSESSING OFFICER DOES NOT HAVE POWER TO EXAMINE THE SOURCE OF THE SOU R CE AND ON THE FACTS OF THE CASE, THERE IS NO MERIT IN THE REVENUES GROUNDS AT ALL. TH E R E FORE, THE GROUNDS OF THE R E V E NUE IN THIS APPEAL ARE REJECTED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 09.07.2014 SD/ - SD/ - (ASHA VIJAYARAGHAVAN) ( B.RAMAKOTAIAH ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/ - 9 TH JU LY , 2014 COPY FORWARDED TO: 1. M/S. MATRIX E N PORT HOLDINGS PVT. LTD., PLOT NO.D - 19, 2 ND FLOOR, GAYATRI ARCADE, OPP. APOLLO HOSPITAL, VIKRAMPURI COLONY, KARKHANA, SECUNDERABAD - 500 009. 2 . DY. COMMISSIONER OF INCOME - TAX, CIRCLE 16(2), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) V HYDERABAD 4. COMMISSIONER OF INCOME - TAX I V , HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S