M/s BNT Motors P Ltd., Delhi V. ACIT (OSD), New Delhi

ITA 1419/DEL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7241 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 08-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Section: 68

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A : NEW DELHI BEFORE SMT SUCHITRA KAMBLE , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER I TA NO . 1419/DEL/2013 (ASSESSMENT YEAR: 2008 - 09 ) BNT MOTORS P. LTD., 258A, MANCHAND DHANIA MARG, GT KARNAL ROAD, SIRASPUR, DELHI PAN:AADCB1070D VS. ACIT (OSD), CIT - I, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SOMIT AGGARWAL, ADV DR. RAKESH GUPTA, ADV SH. ABHISHEK ANAND, ADV REVENUE BY: SH. KK JAISWAL, DR DATE OF HEARING 12/07/ 2016 DATE OF PRONOUNCEMENT 09 / 0 9 /2016 O R D E R PER PRASHANT MAHARISHI , A . M . 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - V, NEW DELHI DATED 12.02.2013 FOR THE ASSESSMENT YEAR 2008 - 09 AGAINST CONFIRMATION OF ADDITION OF RS. 5 LAKHS U/S 68 OF THE INCOME TAX ACT, 1961 . 2. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A COMPANY EN GAGED IN THE BUSINESS OF SERVICE OF VOLVO VEHICLES, FILED ITS RETURN OF INCOME SHOWING LOSS OF RS. 782350/ - . AGAINST THIS THE TOTAL INCOME ASSED AT RS. 2221974/ - . AMONGST THE VARIOUS ADDITIONS MADE AN ADDITION OF RS. 5 LAKHS WAS MADE U/S 68 OF THE INCOME T AX ACT, 1961 WITH RESPECT OF FOLLOWING TRANSACTIONS OF RECEIPT OF SHARE APPLICATION MONEY IN CASH. - S NO. AMOUNT DATE OF RECEIPT OF CASH NAME OF THE PERSON DEPOSITING SHARE APPLICATION MONEY IN CASH 1. 200000/ - 14.11.2007 M/S. NAINI TALWAR, W - 80, GK - II, NEW DELHI - 48 2. 100000/ - 22.10.2007 NAINTARA HOSPITALITY PVT. LTD., W - 80, GK - II, NEW DELHI 3. 200000/ - 14.11.2007 SH. RAKESH TALWAR, W - 80, GK - II, NEW DELHI - 48 3. THE ABOVE AMOUNTS HAVE BEEN RECEIVED BY THE ASSESSEE IN CASH FROM THE ABOVE PERSONS. BEFORE THE LD ASSESSING OFFICER THE ASSESSEE SUBMITTED PAGE 2 OF 3 CONFIRMATION OF ABOVE DEPOSITS ALONG WITH ACKNOWLEDGMENT OF THEIR INCOME TAX RETURNS AND BANK STATEMENT. AS THE ASSE SSEE HAS RECEIVED THIS SUM AS LOAN IN CASH , ADDITION WAS MADE U/S 68 OF THE ACT FOR THE ABOVE SUM. THE ASSESSEE AGITATED THE ISSUE BEFORE THE LD CIT ( A), WHO IN TURN CONFIRMED THE ADDITIONS. THE MAIN REASON FOR THE CONFIRMATION BY THE LD CIT ( A) WAS THAT A LL THE SHARE APPLICANTS ARE RESIDING AT THE SAME ADDRESS AND WHAT PREVENTED THEM TO ISSUE ACCOUNT PAYEE CHEQUES AND DEPOSIT MONEY IN CASH. THEREFORE, HE HELD THAT TRANSACTIONS ARE NOT GENUINE. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD AR SUBMITTED THAT THE ASSESSEE HAS SUBMITTED THE CONFIRMATION OF ABOVE PARTIES BEFORE THE LD ASSESSING OFFICER STATING THEIR NAMES, ADDRESS, PERMANENT ACCOUNT NUMBER AND BANK ACCOUNT OF THOSE PERSONS ALONG WITH INCOME TAX RETURNS. HE FURTHER DEMONSTRATED W ITHDRAWAL OF THE CASH FROM THE RESPECTIVE BANK ACCOUNTS OF THE PARTIES WHICH IS IN TURN DEPOSITED WITH THE COMPANY. HE THEREFORE, SUBMITTED THAT MERELY BECAUSE THE CASH IS DEPOSITED AS SHARE APPLICATION MONEY WHICH IS DULY REFLECTED AS WITHDRAWAL FROM THEI R BANK ACCOUNT AND FURTHER DEPOSIT OF CASH FOR SHARE APPLICATION IS NOT PROHIBITED UNDER THE COMPANIES ACT, THE ADDITION WAS MADE BY THE ASSESSING OFFICER IS INCORRECT. HE FURTHER RELIED ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN CASE OF BHAV SHAKT I STEEL MINES P. LTD. VS. CIT 320 ITR 619 TO SUBMIT THAT WHEN THE BANK STATEMENT IS FURNISHED THERE IS NO INVESTIGATION MADE BY THE ASSESSING OFFICER TO SHOW THAT THE CASH DID NOT EXIST IN THEIR HANDS TO BE DEPOSITED WITH THE ASSESSEE COMPANY. 5. THE LD DR I N TURN RELIED ON THE ORDERS OF THE LD ASSESSING OFFICER AND LD CIT(A) TO SAY THAT WHEN THE SHARE HOLDERS HAVE THE BANK ACCOUNT WHAT IS THE REASON THAT THEY HAVE DEPOSITED CASH WITH THE COMPANY AS SHARE APPLICATION MONEY, THIS SHOWS THAT THE TRANSACTION IS NOT GENUINE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND ALSO PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED THAT THESE THREE PERSONS HAVE DEPOSITED CASH WITH THE COMPANY AS SHARE APPLICATION MONEY. HOWEVER, ALL T HE THREE PERSONS ARE ASSESSED TO INCOME TAX AND THEIR BANK STATEMENT AND INCOME TAX RETURN ARE PRODUCED BEFORE THE LD ASSESSING OFFICER TO SHOW THE AVAILABILITY OF CASH WITH THEM ON RELEVANT DATES. THEREFORE IDENTITY AS WELL AS CREDITWORTHINESS OF THE OF T HESE DEPOSITS ARE ACCEPTED BY THE REVENUE. THE PAGE 3 OF 3 ONLY REASON WHY THE GENUINENESS OF THE TRANSACTION IS DOUBTED IS THAT THOSE PARTIES ARE HAVING BANK ACCOUNTS AND DESPITE THIS THEY HAVE DEPOSITED CASH WITH THE COMPANY AS SHARE APPLICATION MONEY. WE ARE OF THE VIEW THAT ON 19.11.2007 RS. 4 LAKHS WERE DEPOSITED BY THESE TWO INDIVIDUALS WITH THE COMPANY AND ON THE SAME DATE THERE IS WITHDRAWAL FROM THE BANK ACCOUNT OF THESE PARTIES IN CASH FROM HSBC BANK. FURTHERMORE, THE COMPANY DEPOSITOR WHICH HAS DEPOSITED RS. 1 LAKHS WITH THE ASSESSEE ON 22.10.2007 A SUM OF RS. 1 LAKHS HAS WITHDRAWN ON THE SAME DATE IN CASH FROM THE CITI BANK ACCOUNT OF THAT COMPANY THIS IS DEMONSTRATED BY SUBMITTING THE BANK ACCOUNT OF THE PARTIES. IT IS ALSO NOTED THAT THE TRANSACTIONS IS ON THE SAME DATE ON WHICH THE CASH IS WITHDRAWN BY THE DEPOSITORS FROM THE VERY BANK ACCOUNT AND DEPOSIT AS SHARE APPLICATION MONEY WITH THE APPELLANT COMPANY. THESE DETAILS WERE SUBMITTED BEFORE THE LD ASSESSING OFFICER AND HE HAS HELD THAT THE GENUINENESS OF THE TRANSACTION IS NOT PROVED BY THE ASSESSEE. WE ARE OF THE VIEW THAT MERELY BECAUSE THE CASH IS DEPOSITED BY THE ASSESSEE WITH THE APPELLANT COMPANY AS SHARE APPLICATION MONEY DOES NOT MAKE THE TRANSACTION INGENUINE WHEN ALL THE SHARE HOLDERS ARE ASSE SSED TO TAX AND SUCH CASH HAS THE SOURCES OF WITHDRAWAL FROM THE BANK ACCOUNT OF THE DEPOSITORS ON THE SAME DAY. IN VIEW OF THIS WE REVERSE THE FINDING OF THE LD CIT ( A) IN CONFIRMING THE ADDITION OF RS. 5 LAKHS U/S 68 OF THE ACT. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 9 / 0 9 /2016 . - S D / - - S D / - ( SUCHITRA KAMBLE ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 9 / 0 9 / 2016 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI