ACIT, Visakhapatnam V. Girsan Engineering Works Pvt Ltd, Visakhapatnam

ITA 138/VIZ/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 2550 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 04-11-2010
• Assessment Year: 1992-1993
• Appeal Filed On: 06-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Keywords: Bogus Share capital
• Section: 195; 68

Judgement Text

ITA NO.138/VIZAG/2009 GISAN ENGG. WORKS(P) LTD, VSKP PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.138/VIZAG/2009 ASSESSMENT YEAR: 1992-93 ACIT CIRCLE-4(1) VISAKHAPATNAM VS. SRI GISAN ENGINEERING WORKS (P) LTD VISAKHAPATNAM (APPELLANT) (RESPONDENT) GIR NO.G9/CIRCLE-1 APPELLANT BY: SHRI D.S. SUNDER SINGH, SR.DR RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29.12.2008 PASSED BY LD. CIT(A-1), VISAKHAPATNAM AN D IT RELATES TO THE ASSESSMENT YEAR 1992-93. 2. THE REVENUE IS ASSAILING THE DECISION OF LEA RNED CIT(A) IN DELETING THE ADDITION MADE UNDER SECTION 68 IN RESPECT OF SHARE CAPITAL AMOUNT INTRODUCED DURING THE YEAR UNDER CONSIDERATION. 3. WE HAVE HEARD THE RIVAL CONTENTIONS. THE LE ARNED AUTHORISED REPRESENTATIVE PLACED BEFORE US A COPY OF ORDER DAT ED 22-04-2009 PASSED BY THIS BENCH IN THE CASE OF M/S PRAGATI FERTILISER S LTD. IN ITA NO.694/VIZAG/2004, WHERE IN, ON IDENTICAL FACTS, TH IS BENCH HAS HELD THAT ADDITION ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL CA NNOT BE MADE ON ACCOUNT OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. THE RELEVANT OBSERVATIONS ARE EXTRACTED BELOW.: IN THIS REGARD, THE LEARNED COUNSEL FOR THE ASSESS EE HAS SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY TH E JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS. L OVELY EXPORTS (P) LTD (216 CTR 195 S.C) AND THE JUDGMENT OF MADRAS HIGH COURT IN THE CASE OF CIT VS. ELECTRO PO LYCHEM LTD (294 ITR 661) IN WHICH IT WAS CATEGORICALLY HEL D THAT IF ITA NO.138/VIZAG/2009 GISAN ENGG. WORKS(P) LTD, VSKP PAGE 2 OF 2 THE SHARE MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM THE ALLEGED BOGUS SHARE HOLDERS, WHOSE NAMES ARE GI VEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO OPEN INDIVIDUAL ASSESSMENTS IN ACCORDANC E WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOM E BY THE ASSESSEE COMPANY. COPIES OF THE JUDGMENT ARE PLACE D ON RECORD. IN LIGHT OF THESE JUDGMENTS, WE FIND FORCE IN THE CONTENTION OF THE ASSESSEE. ACCORDINGLY, WE CONFIR M THE ORDER OF THE CIT(A) WHO HAS ADJUDICATED THE ISSUE I N CONSONANCE WITH THE FINDINGS OF THE APEX COURT. WE THEREFORE, CONFIRM THE ORDER OF THE CIT(A) IN THIS REGARD. 4. CONSISTENT WITH THE VIEW TAKEN IN THE CASE C ITED ABOVE, WE HOLD THAT THE SHARE CAPITAL MONEY RECEIVED BY THE ASSESSEE CO MPANY FROM THE PERSONS WHO HAVE BEEN IDENTIFIED CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE COMPANY UNDER SECTION 68 OF THE ACT. ACCO RDINGLY WE UPHOLD THE DECISION OF LEARNED CIT(A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:30-12-2010 COPY TO 1 THE ACIT, CIRCLE-4(1), VISAKHAPATNAM 2 SRI GISAN ENGINEERING WORKS (P) LTD., MIG 225, SEE THAMMADHARA, VISAKHAPATNAM 3 4. THE CIT VISAKHAPATNAM THE CIT(A), VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM