M/s. C-1 India Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1424/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61790 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 14-06-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 27-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SAKSENA
• Assessee Lawyers: S R WADHWA
• Section: 234B; 68

Judgement Text

1 ITA 1424, 1425, 1426 & 1427/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'G' NEW DELHI BEFORE SHRI R. P. TOLANI AND SHRI SHAMIM YAH YA ITA NOS. 1424, 1425, 1426 & 1427/DEL/2012 ASSTT. YRS: 2001-02, 2002-03, 2003-04 & 2004-05 M/S C-L, INDIA PVT. LTD., VS. ACIT, CENTRAL CIRCLE-13, D-5, DEFENCE COLONY, NEW DELHI. NEW DELHI. PAN NO. AABCC 4078 L (APPELLANT) (RESPONDENT) APPELLANTS BY : SH. S.R. WADHWA ADV. RESPONDENT BY : SH. V.K. SAKSENA CIT(DR) ORDER PER R.P. TOLANI. J.M: : THESE ARE FOUR APPEALS, FILED BY THE ASSESSEE AGAIN ST SEPARATE ORDERS OF CIT(A) FOR A.YRS. 2001-02, 2002-03, 2003-04 & 20 04-05. 2. GROUND NOS. 1 TO 4 IN ALL THESE APPEALS AR E NOT PRESSED, HENCE DISMISSED ACCORDINGLY. 2 ITA 1424, 1425, 1426 & 1427/DEL/2012 2.1. OTHER GROUNDS RAISED ARE AS UNDER: (1) ADDITION ON ACCOUNT OF SHARE CAPITAL IN A.YS. 2 001-02 & 2002-03 A.Y. 2001-02 = RS. 9,34,15,000 A.Y. 2002-03 = RS. 65,85,000 (2) ADDITION ON ACCOUNT OF UNEXPLAINED LOANS IN AYS 2001-02 & 2003-04: A.Y. 2001-02 = RS. 75,00,000/- A.Y. 2003-04 = RS. 9,53,00,000 (3) ON ACCOUNT OF- 20% OF ROC FEE - A.Y. 2001-02 = RS. ,22,238/- A.Y.2002-03 = RS. 5,22,238/- A.Y.2003-04 = RS. 5,25,667 A.Y. 2004-05 = RS. 5,22,238/- (4) 20% OF TRAVELLING, TELEPHONE, PRINTING ETC. A.Y.2001-02 = RS. 4,26,863/- A.Y. 2002-03 = RS. 4,26,863/- A.Y. 2003-04 = RS. 4,26,863/- A.Y. 2004-05 = RS. 4,26,863/- (5) LEGAL & PROFESSIONAL CHARGES, TREATED AS CAPITA L EXPENDITURE: A.Y. 2001-02 = RS. 4,00,000/- (6) 20% OF BUSINESS PLAN EXPENDITURE: 3 ITA 1424, 1425, 1426 & 1427/DEL/2012 A.Y. 2002-03 = RS. 4,12,520/- A.Y. 2003-04 = RS. 4,12,520/- A.Y. 2004-05 = RS. 4,12,520/- (7) ANNUAL MEMBERSHIP FEE: A.Y. 2002-03 = RS. 3,05,482/- (8) INTEREST U/S 234A & 234B 3. THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORPORATED ON 11-08.2000 WITH THE MAIN OBJECT OF PURSUING E-COMMERCE AND SOF TWARE BUSINESS. BRIEFLY STATED, THE MAIN ADDITIONS MADE ARE ABOUT SHARE CA PITAL AND LOANS IN THIS CASE, WHICH WERE MADE ON SAME FACTS AND CIRCUMSTANCES AS IN THE CASE OF SHRI SURESH NANDA IN THE SAME ASSESSMENT YEARS. IT WAS C ONTENDED ON BEHALF OF THE ASSESSEE COMPANY THAT NO ADDITION OUGHT TO BE M ADE AS CASH CREDITS UNDER SECTION 68 OF THE ACT ON ACCOUNT OF SHARE CAP ITAL AND ALSO THE LOANS RECEIVED FROM Y2K SYSTEMS LTD AS THE ONUS THAT LAY UPON IT HAD BEEN DISCHARGED DURING THE ASSESSMENT PROCEEDINGS. IT WA S EXPLAINED THAT:- (I) THE SHARE CAPITAL AND LOANS HAD BEEN RECEIVED B Y THE ASSESSEE FROM ITS HOLDING COMPANY Y2K SYSTEMS LTD MAURITIUS THROUGH BANKING CHANNELS; (II) THE AUDITED BALANCE SHEETS OF THE HOLDING COMP ANY HAD BEEN FILED AND HAD ALSO BEEN OBTAINED INDEPENDENTLY BY T HE DEPARTMENT; (III) THESE BALANCE SHEETS CLEARLY REFLECT THE SAID AMOUNTS HAVING BEEN RECEIVED BY THE ASSESSEE; (IV) THE TAX RESIDENCY CERTIFICATE OF Y2K SYSTEMS L TD HAD BEEN FILED; 4 ITA 1424, 1425, 1426 & 1427/DEL/2012 (V) THE INCORPORATION PARTICULARS OF THE COMPANY IN MAURITIUS HAD BEEN FILED. 3.1. HENCE ACCORDING TO THE ASSESSEE COMPANY NO ADD ITION UNDER 68 OF THE ACT WAS SUSTAINABLE. 3.2. IT WAS FURTHER CONTENDED THAT THE SAME AMOUNT WITH THE SAME EXPLANATION WAS HELD TO BE BELONGING TO MR SURESH N ANDA AND WAS ALSO ADDED SUBSTANTIVELY IN HIS HANDS. AS SUCH, THE SAME AMOUNT HAD BEEN TAXED SUBSTANTIVELY IN TWO HANDS WITH THE SAME EXPLANATIO N AND FINDINGS. THE NATURE OF THE AMOUNT IS ALSO THE SAME BEING MONEY A LLEGEDLY BELONGING TO MR. SURESH NANDA AND PURPORTEDLY BROUGHT IN BY HIM AS SHARE CAPITAL IN THE ASSESSEE COMPANY. 3.3. IT IS TRITE THAT THE SAME AMOUNT CANNOT BE TAX ED DOUBLY UNLESS THE NATURE OF THE AMOUNT CHANGES OR IT IS SO PROVIDED I N THE ACT. VARIOUS JUDGMENTS HAVE BEEN CITED BY BOTH PARTIES BUT THIS ISSUE IS WELL SETTLED AND DOES NOT NEED ANY JUDICIAL EXAMINATION. 3.4. SAME ADDITIONS WERE MADE IN BOTH THE CASES ON SUBSTANTIVE BASIS. BOTH THE PARTIES AGREED THAT THE FACTS & CIRCUMSTANCES A RE SIMILAR IN BOTH THE CASES AND THE ISSUES MAY BE DECIDED IN VIEW OF THE APPEAL S OF SHRI SURESH NANDA. 4. BY ORDER OF EVEN DATE IN THE CASE OF SHRI SURESH NANDA IN ITA NOS. 1428,1429 & 1430/DEL/2012 FOR A.YS. 2001-02, 2002-0 3 & 2004-05 WE HAVE SET ASIDE THESE ISSUES BACK TO THE FILE OF AO TO DECIDE THE SAME AFRESH AFTER GIVING THE PARTIES ADEQUATE OPPORTUNITY OF BE ING HEARD AFRESH. FOLLOWING OUR ORDER IN THE CASE OF SHRI SURESH NAND A WE SET ASIDE THE ISSUES BACK TO THE FILE OF AO ACCORDINGLY TO DECIDE AFRESH ALONG WITH THE ISSUES AS TO WHETHER ANY ADDITION AT ALL IS CALLED FOR AND, IF S O IN WHICH CASE THE ADDITION 5 ITA 1424, 1425, 1426 & 1427/DEL/2012 IS TO BE MADE. 5. APROPOS REMAINING GROUNDS, IT IS PLEADED THAT TH E DISALLOWANCES HAVE BEEN MADE ON AD HOC BASIS WITHOUT CONSIDERING THE EXPLANATION FURNISHED BY THE ASSESSEE AND THE ITAT JUDGMENT IN ITS OWN CASE. 6. SINCE WE HAVE SET ASIDE THE MAIN ISSUES BACK TO THE FILE OF AO, INTEREST OF JUSTICE WILL BE SERVED IF THE REMAINING ISSUES I N THESE APPEALS ARE SET ASIDE BACK TO THE FILE OF AO TO DECIDE ALL THESE ISSUES A FTER CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE AND ITAT ORDER. 7. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 24-7-2012. SD/- SD/- (SHAMIM YAHYA ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED:24-07-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CITCA) 5. DR