Baroda Agro Industries Ltd, Baroda V. The Income tax Officer, Ward-1(1), Baroda

ITA 1453/AHD/2005

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0533 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-11-2009
• Assessment Year: 1991-1992
• Appeal Filed On: 20-05-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: S N SOPARKAR
• Section: 251; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH, J.M. AND D.C. AGARWAL, A.M. ITA NO.1453/AHD/2005 ASST. YEAR : 1991-92 BARODA AGRO INDUSTRIES LTD., RAINBOW HOUSE, 2 ND FLOOR, PRATAP ROAD, RAOPURA, BARODA. V/S . INCOME-TAX OFFICER, WARD 1(1), BARODA. PAN NO. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI S. N. SOPARKAR RESPONDENT BY:- SHRI C. K. MISHRA, SR. D.R. O R D E R PER D.C. AGARWAL, ACCOUNTANT MEMBER. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A) IN WHICH HE HAS CONFIRMED THE AN ADDITION OF RS.13,60,000/- UNDER SECTION 68 BEING THE SHARE APPLICATION MONEY RECEIVED FROM M/S A. R. CHOKSI FINSTOCKS (P) LTD. 2. THE FACTS OF THE CASE ARE THAT ASSESSMENT IN HIS CASE WAS ALREADY COMPLETED UNDER SECTION 143(1)(A) 23.9.1992. SUBSEQ UENTLY THE ASSESSMENT WAS REOPENED ON 12.4.2001 BY ISSUING NOT ICE UNDER SECTION 148 OF THE ACT ON THE GROUND THAT ASSESSEE HAS INTR ODUCED UNEXPLAINED ITA NO.1 453/AHD/2005 AY 1991- 92 2 LOAN DEPOSIT OF RS.13,60,000/-. DURING THE COURSE O F RE-ASSESSMENT PROCEEDINGS AO NOTICED THAT THERE IS A DEPOSIT OF R S.13,60,000/- IN THE BOOKS OF SHRI A. R. CHOKSI IN THE NAME OF A.R. CHOK SI FINSTOCKS (P) LTD. IT WAS EXPLAINED BY THE ASSESSEE THAT ONE KAKAJI F ARM OWNED BY SHRI A. R. CHOKSI WAS SOLD TO JOLLY TEA INDIA LTD. FROM WHO M SALE PROCEEDS WERE RECEIVED AND THEY WERE DEPOSITED IN THE BANK A CCOUNT AND FROM THERE IT WAS RECEIVED IN THE COMPANY AS SHARE APPLI CATION MONEY. THE LD. AO, HOWEVER, TOOK THE VIEW THAT NO CORRESPONDING BA NK ACCOUNT OF JOLLY TEA INDIA LTD. WAS SHOWN AND IT WAS ALSO NOT SHOWN HOW THE PAYMENT WAS MADE TO THE ASSESSEE COMPANY ON ACCOUNT OF LOAN OR DEPOSIT. ALL THE TRANSACTIONS AS PER THE BANK ACCOUNT ARE APPARENTLY BETWEEN THE FAMILY GROUP CONCERN. HE DID NOT BELIEVE ON THE SALE PROCE EDS HAVING BEEN RECEIVED BY THE ASSESSEE COMPANY AS SHARE APPLICATI ON MONEY AND HE ACCORDINGLY MADE THE ADDITION UNDER SECTION 68. TH E LD. CIT(A) CONFIRMED THE ADDITION ON THE GROUND THAT THERE IS NO EVIDENCE AVAILABLE EXCEPT AS MENTIONED IN THE ASSESSMENT ORDER UNDER S ECTION 143(3)/147. HE NOTED THAT WHEN THE PAYMENT IS MADE TO M/S A. R. CHOKSI FINSTOCK PVT. LTD. (REAL NAME OF THE ASSESSEE COMPANY) AN EQ UIVALENT AMOUNT IS RECEIVED ON TRANSFER. THE SOURCE OF THIS TRANSFER I S NOT INDICATED. FURTHER THE ACCOUNT FROM WHICH MONEY IS TRANSFERRED TO THE ASSESSEE COMPANY DID NOT BELONG TO SHRI A. R. CHOKSI ALONE BUT WAS IN TH E NAME OF FOUR PERSONS. IT IS NOT CLEAR AS TO HOW AND FROM WHERE S AME HAS BEEN RECEIVED. THE SOURCE FROM WHERE THESE PARTICULAR FUNDS ARE TR ANSFERRED INTO THE ACCOUNT OF ASSESSEE COMPANY IS ALSO NOT INDICATED. THE DETAILS OF THE SALE PROCEEDS OF KAKAJI FARM WERE NOT GIVEN. THE ONUS LY ING ON THE ASSESSEE WAS NOT DISCHARGED. 3. BEFORE US THE LD. AR SUBMITTED THAT THERE IS NO DISPUTE ON FACTS THAT SHRI A. R. CHOKSI, SMT. KOKILABEN CHOKSI, SANJAY A. CHOKSI AND SHRI ITA NO.1 453/AHD/2005 AY 1991- 92 3 HITESH CHOKSI JOINTLY OWNED A PLOT IN THE NAME OF K AKAJI FARM. IT WAS SOLD TO M/S JOLLY TEA INDIA LTD. THE SALE CONSIDERA TION RECEIVED WERE DEPOSITED IN THE JOINT ACCOUNT IN PUNJAB NATIONAL B ANK. FROM THIS ACCOUNT CHEQUES AGGREGATING TO RS.13,60,000/- WERE ISSUED I N THE NAME OF M/S A.R. CHOKSI FINSTOCKS (P) LTD. AS SHARE APPLICATION MONEY IN THE NAME OF SHRI A. R. CHOKSI. HE REFERRED TO THE DECISION OF H ONBLE DELHI HIGH COURT IN CIT VS. DOLPHIN CANPACK LTD. (2006) 283 IT R 190, FOR THE PROPOSITION THAT IF IDENTITY OF THE SHARE APPLICANT IS ESTABLISHED AND HE OWNS TO HAVE DEPOSITED THE MONEY WITH THE COMPANY A S SHARE DEPOSIT MONEY THEN ONUS IS DISCHARGED AND NO FURTHER ADDITI ON CAN BE MADE. 4. THE LD. DR RELIED ON THE ORDERS OF AUTHORITIES B ELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIALS ON RECORD. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE COMPANY HAS RECEIVED SHARE APPLICATION MONEY FROM SHRI A. R . CHOKSI. HE HAS CONFIRMED TO HAVE MADE THE PAYMENT AS NOTED BY THE A.O. HE ALSO INDICATED AS FROM WHERE HE IS RECEIVING THE MONEY I .E. ON SALE PROCEEDS OF KAKAJI FARM OWNED BY FOUR FAMILY MEMBERS AND FURTHE R THAT MONEY IS TRANSFERRED THROUGH BANKING CHANNEL TO THE ASSESSEE COMPANY. ONCE IT IS SHARE APPLICATION MONEY AND SHARE APPLICANT HAS ADM ITTED TO HAVE DEPOSITED THE SAME WITH THE ASSESSEE COMPANY THEN O NUS IS DISCHARGED AND ADDITION UNDER SECTION 68 CANNOT BE MADE. THIS VIEW HAS BEEN HELD BY HONBLE DELHI HIGH COURT IN CIT VS. DOLPHIN CANP ACK LTD. (SUPRA), CIT VS. STELLER INVESTMENT LTD. (2001) 251 ITR 263( SC), LIBERTY GROUP MARKETING DIVISION VS. CIT (2007) 294 ITR 61(P & H) , JAYA SECURITIES LTD. VS. CIT (2008) 166 TAXMAN 7(ALL), CIT VS. DIVI NE LEASING AND FINANCE LTD. (2008) 299 ITR 268 (DELHI) WHICH IS AL SO CONFIRMED BY THE SUPREME COURT IN CC375 2008 DATED 21.1.2008 AND ALS O BY HONBLE ITA NO.1 453/AHD/2005 AY 1991- 92 4 RAJASTHAN HIGH COURT IN CIT VS. AKJ GRANITES P. LTD . (2008) 301 ITR 298 (RAJ). UNDER THESE CIRCUMSTANCES WE DO NOT FIND ANY JUSTIFICATION TO MAKE ADDITION UNDER SECTION 68. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 6 /11/2009 SD/- SD/- (MAHAVIR SINGH) (D.C. AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 6/11/2009 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD