Lintrix E Technologies Pvt. Ltd., Meerut V. ACIT, Meerut

ITA 1627/DEL/2014

• Counselvise Citation: 162720114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 25-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 19-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: P S KASHYAP
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.1627/DEL/2014 ASSESSMENT YEAR : 2008-09 IINTRIX E TECHNOLOGIES PVT. LTD., C/O M/S KASHYAP & CO, 214, CITI CENTRE, BEGUM BRIDGE ROAD, MEERUT. PAN : AABCI7137A VS. ACIT, CIRCLE-1, MEERUT. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.S. KASHYAP, CA RESPONDENT BY: SHRI R.S. NEGI, SR.DR DATE OF HEARING : 25.08.2015 DATE OF PRONOUNCEMENT: 26.08.2015 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 18.9.2013 IN RELATION TO THE ASSESSMENT Y EAR 2008-09. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF ADDITION OF RS.7,30,000/- MADE BY THE ASSESSING OFF ICER (AO) U/S 68 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) ITA NO.1627/DEL/2014 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A PRIVATE LIMITED COMPANY RUNNING AN EDUCATIONAL INSTITUTION. IT WAS INCORPORATED IN THE INSTANT YEAR ON 16.6.2007. ON PERUSAL OF THE BA LANCE SHEET, THE AO OBSERVED THAT THE ASSESSEE ISSUED SHARE CAPITAL OF RS.1 LAC AND THERE WAS OUTSTANDING BALANCE IN SHARE APPLICATION ACCOUNT TO THE TUNE OF RS.7,30,000/-. HE ACCEPTED THE GENUINENESS OF SHAR E CAPITAL, BUT, MADE ADDITION FOR A SUM OF RS.7,30,000/- REPRESENTING TH E AMOUNT ALLEGEDLY RECEIVED FROM EIGHT PARTIES TOWARDS SHARE APPLICATI ON MONEY. THIS DISALLOWANCE OF RS.7,30,000/- MADE BY THE AO U/S 68 OF THE ACT CAME TO BE AFFIRMED IN THE FIRST APPEAL. THE ASSESSEE IS AGGRI EVED AGAINST THE SUSTENANCE OF THIS ADDITION. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD, THE SAID AMOUNT OF RS.7,30,000/- CONSIST S OF VARYING AMOUNTS RECEIVED FROM EIGHT PERSONS. I WILL DEAL WITH THEM INDIVIDUALLY. I) SHRI AMIT SINGH 5. THE ASSESSEE SHOWED TO HAVE RECEIVED A SUM OF RS .1 LAC FROM SHRI AMIT SINGH AS SHARE APPLICATION, WHO WAS STATED TO BE A FRIEND OF DIRECTOR. APART FROM FILING CONFIRMATION OF THE LOAN, THE ASS ESSEE ALSO PRODUCED THIS ITA NO.1627/DEL/2014 3 PERSON BEFORE THE AO. AS REGARDS THE SOURCE OF THE AMOUNT OF RS.1 LAC WHICH WAS GIVEN AS SHARE APPLICATION MONEY ON 15.9. 2007, HE GAVE EXPLANATION BY STATING THAT THE SAME AMOUNT WAS AVA ILABLE WITH HIM OUT OF HIS ANNUAL INCOME AND, FURTHER, HE HAD TAKEN A LOAN FROM HIS FATHER FOR GIVING SHARE APPLICATION MONEY. NOT CONVINCED, THE AO MADE ADDITION. 6. THE LD. AR TOOK ME THROUGH A COPY OF THE HIS S TATEMENT RECORDED BY THE AO, FROM WHICH IT EMERGES THAT AT THE MATERIAL TIME, HE WAS SIMPLY A MANAGEMENT TRAINEE. THE LD. AR REFERRED TO CERTAIN BANK STATEMENTS AVAILABLE AT PAGE 92 ONWARDS OF THE PAPER BOOK TO P ROVE THE SOURCE OF THE AMOUNT, BUT, THOSE STATEMENTS ARE NOT GERMANE TO TH E PERIOD UNDER CONSIDERATION ON WHICH HE CLAIMED TO HAVE GAVE SHAR E APPLICATION MONEY OF RS.1 LAC TO THE ASSESSEE. IN MY CONSIDERED OPINION, THE ASSESSEE MISERABLY FAILED TO DISCHARGE THE ONUS CAST UPON IT IN TERMS OF SECTION 68. THIS ADDITION IS UPHELD. II) JAI VARDHAN SHARMA 7. HE DEPOSITED RS.1,50,000/- OUT OF WHICH SHARES W ERE ALLOTTED FOR RS.50,000 AND RS.1,00,000/- WAS LYING IN SHARE APPL ICATION MONEY. THIS PERSON IS DIRECTOR IN THE ASSESSEE COMPANY. THE AO ACCEPTED THE ITA NO.1627/DEL/2014 4 GENUINENESS OF CREDIT TO THE EXTENT OF SHARES ALLOT TED. DISPUTE IS ONLY ABOUT A SUM OF RS.1,00,000 LYING IN SHARE APPLICATION ACC OUNT. HIS STATEMENT WAS ALSO RECORDED BY THE AO, A COPY OF WHICH IS AVAILAB LE ON PAGE 78 OF THE PAPER BOOK. IN THIS STATEMENT HE SUBMITTED TO HAVE RECEIVED SALARY OF RS.35,000/- APART FROM RECEIVING AMOUNTS FROM OTHER COMPUTER INSTITUTIONS FOR ACTING AS A PART TIME LECTURER. HE ALSO GAVE H IS PERMANENT ACCOUNT NO. HE FURNISHED HIS RETURN DECLARING INCOME OF RS.1,75 ,000/-. IN THE LIGHT OF THESE FACTS, I AM OF THE OPINION THAT THE ASSESSEE SUCCESSFULLY DISCHARGED THE BURDEN CAST UPON IT IN PROVING THE GENUINENESS OF T HE TRANSACTION. THIS ADDITION IS DELETED. III) BHUPESH KUMAR SHARMA 8. HE INVESTED RS.1,50,000/- IN THE COMPANY OUT OF WHICH SHARES WERE ALLOTTED FOR RS.50,000/- AND THE REMAINING AMOUNT O F RS.1 LAC WAS LYING IN SHARE APPLICATION ACCOUNT. HIS STATEMENT WAS ALSO RECORDED BY THE AO IN WHICH HE ADMITTED TO HAVE DEPOSITED THE MONEY AS SH ARE APPLICATION. A COPY OF HIS BANK ACCOUNT IS AVAILABLE ON PAGES 87 A ND 88 OF THE PAPER BOOK, FROM WHICH IT CAN BE SEEN THAT HE WITHDREW A SUM OF RS.1,04,000/- ON 24.8.2007 AND ON THE SAME DAY THIS AMOUNT WAS GIVEN TO THE COMPANY AS ITA NO.1627/DEL/2014 5 SHARE APPLICATION MONEY. I AM SATISFIED WITH THE G ENUINENESS OF THE TRANSACTION AND ORDER TO DELETE THIS ADDITION. IV) KANHAIYA LAL SHARMA 9. HE INVESTED A SUM OF RS.1 LAC AS SHARE APPLICATI ON MONEY ON 19.6.2007. HIS STATEMENT WAS RECORDED BY THE AO IN WHICH HE DEPOSED THAT HE WAS WORKING AS SSO IN ELECTRICITY DEPARTMENT, ME ERUT WITH HIS ANNUAL INCOME OF RS.2.25 LAC. THESE FACTS INDICATE HIS CA PACITY TO DEPOSIT A SUM OF RS.1 LAC WITH THE ASSESSEE COMPANY AS SHARE APPLICA TION MONEY. IN VIEW OF THESE FACTS, I AM SATISFIED WITH THE GENUINENESS OF THE TRANSACTION. ACCORDINGLY, I ORDER FOR THE DELETION OF ADDITION O F RS.1 LAC. V) PRAMOD KUMAR SHARMA 10. HE CLAIMED TO HAVE DEPOSITED A SUM OF RS.1 LAC ON 19.6.2007. ALTHOUGH HE ADMITTED IN HIS STATEMENT TO HAVE INVES TED THIS AMOUNT IN SHARE APPLICATION MONEY, BUT THERE ARE NO CORRESPONDING W ITHDRAWALS FROM HIS BANK, A COPY OF WHICH STATEMENT IS AVAILABLE ON PAG E 44 OF THE PAPER BOOK. I, THEREFORE, UPHOLD THIS ADDITION. VI) RADHA SHARMA 11. SHE INVESTED A SUM OF RS.50,000/- AS SHARE APPL ICATION MONEY ON 7.9.2007. DURING THE COURSE OF HER STATEMENT BEFOR E THE AO, SHE ADMITTED ITA NO.1627/DEL/2014 6 TO HAVE INVESTED THE AMOUNT AS SHARE APPLICATION MO NEY. A COPY OF HER INCOME-TAX RETURN FOR THE YEAR UNDER CONSIDERATION IS AVAILABLE ON PAGE 73 OF THE PAPER BOOK. IT CAN BE SEEN THAT SHE DECLARE D INCOME OF RS.1,19,218/- IN HER RETURN OF INCOME. CONSIDERING THE AMOUNT OF SHARE APPLICATION AT RS.50,000/- VIS--VIS HER INCOME AND OTHER ATTENDIN G CIRCUMSTANCES, I FEEL SATISFIED WITH THE GENUINENESS OF THE AMOUNT DEPOSI TED WITH THE ASSESSEE AS SHARE APPLICATION MONEY. THIS ADDITION IS DELETED. VII) RAHUL SHARMA 12. RAHUL SHARMA CLAIMED TO HAVE PAID RS.1 LAC TO T HE ASSESSEE COMPANY ON 17.10.2007. HE WAS NOT PRODUCED BEFORE THE AO. A COPY OF HIS BANK STATEMENT IS AVAILABLE ON PAGE 114 OF THE PAPER BOO K. FROM THIS STATEMENT, IT CAN BE SEEN THAT THERE ARE NO CORRESPONDING WITH DRAWALS FOR INVESTING RS.1 LAC AS SHARE APPLICATION MONEY. IN SUCH CIRC UMSTANCES, NEITHER THE CAPACITY OF THE PERSON NOR THE GENUINENESS OF THE T RANSACTION CAN BE SAID TO HAVE BEEN PROVED. I, THEREFORE, UPHOLD THIS ADDITIO N. VIII) NAVEEN SHARMA 13. HE DEPOSITED A SUM OF RS.80,000/- IN THE SHARE APPLICATION ACCOUNT ON 23.7.2007 WHICH WAS NOT ACCEPTED BY THE AO. THI S PERSON IS A BROTHER OF ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY. H E FILED HIS RETURN ITA NO.1627/DEL/2014 7 DECLARING INCOME OF RS.96,000/-, A COPY OF WHICH IS AVAILABLE AT PAGE 72 OF THE PAPER BOOK. THE AO RECORDED HIS STATEMENT, A C OPY OF WHICH IS AVAILABLE AT PAGE 83 OF THE PAPER BOOK. IN THIS ST ATEMENT, HE DISCLOSED HIS SALARY OF RS.90,000/- FOR ACTING AS A MEDICAL REPRE SENTATIVE. APART FROM THAT, HE ALSO STATED TO HAVE EARNED ROUGHLY RS.2,50 0/- PER MONTH IN THE SHAPE OF INCENTIVES. IF I CONSIDER THE TOTAL INCOM E EARNED BY THIS PERSON AND THE CORRESPONDING AMOUNT DEPOSITED AS SHARE APPLICA TION MONEY, IT APPEARS TO BE A GENUINE CASE OF PUTTING MONEY IN SHARE APPL ICATION ACCOUNT. I, THEREFORE, TREAT THIS AMOUNT AS EXPLAINED. 14. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2015. SD/- (R.S. SYAL) ACCOUNTAN T MEMBER DATED: 26 TH AUGUST, 2015. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI