Namastey Chemicals Ltd., Baroda V. The ACIT.,Circle-4, Baroda

ITA 1658/AHD/2009

• Counselvise Citation: 165820514 RSA 2009
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 27-06-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 20-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA; J P DANGI
• Assessee Lawyers: S N SAPORKAR
• Keywords: Unexplained investment; Income from undisclosed sources
• Section: 143(3); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 ASST. COMMISSIONER OF INCOME TAX, BARODA CIRCLE-4, BARODA APPELLANT VS. NAMASTEY CHEMICALS PVT. LTD. 9, SANKHESHWARNAGAR, NR. NILESHWAR TEMPLE,MAJALPUR, VADODARA-390 011 RESPONDENT WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 NAMASTEY CHEMICALS PVT. LTD. 9, SANKHESHWARNAGAR, NR. NILESHWAR TEMPLE,MAJALPUR, VADODARA-390 011 APPELLANT VS. ASST. COMMISSIONER OF INCOME TAX, BARODA CIRCLE-4, BARODA RESPONDENT WITH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 NAMASTEY CHEMICALS PVT. LTD. 9, SANKHESHWARNAGAR, NR. NILESHWAR TEMPLE,MAJALPUR, VADODARA-390 011 APPELLANT VS. ASST. COMMISSIONER OF INCOME TAX, BARODA CIRCLE-4, BARODA RESPONDENT I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 2 DEPARTMENT BY : SHRI S.K. GUPTA, CIT D.R. & SHRI J.P. DANGI, SR. D.R. ASSESSEE BY : SHRI S.N. SAPORKAR, A.R. DATE OF HEARING : 27.06.2012 DATE OF PRONOUNCEMENT 13.07.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER ITA NO.1542 OF 2005 AND ITA NO.1444 OF 2005 ARE CR OSS APPEAL AGAINST THE ORDER OF LD. CIT(A)-II, BARODA DATED 24 TH MARCH, 2005. ITA NO.1658 OF 2009 IS ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-III, BARODA DATED 20.02.2009 IN RESPECT OF PENALTY PROCEEDINGS U/S 2 71(1)(C ) OF THE ACT. SINCE ALL THESE APPEALS BELONG TO THE SAME ASSESSEE AND HEARD TOGETHER, FOR THE SAKE OF CONVENIENCE THE SAME ARE BEING DISPOSED OF BY PASSI NG A CONSOLIDATED ORDER. 2. FIRST WE WILL TAKE UP ITA NO.1542 OF 2005 AND I TA NO.1444 OF 2005. GROUNDS IN ITA NO.1542 OF 2005 ARE AS UNDER:- ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED: 1) IN DELETING ADDITION OF RS.41,99,900/- MADE BY T HE A.O., U/S 68 OF THE ACT. THE DECISION GIVEN BY HIM IS ARBITRARY AND WITHOUT APPRECIATING THE FACTS OF THE CASE AS W ILL BE EVIDENT FROM THE UNDERMENTIONED FACTS GATHERED FROM ENQUIRY AT THE ASSESSMENT STAGE: (A) THE SHARE APPLICANT SHRI RAJENDRA THAKKAR (CATE GORY B-RS.11,99,900) DID NOT COMPLY ENQUIRY LETTER U/S 1 33(6) AS WELL AS SUMMONS U/S 131 OF THE ACT. THOUGH HE FILED AFF IDAVIT IN SUPPORT OF THE INVESTMENT, BUT DID NOT ATTEND IN RE SPONSE TO SUMMONS ISSUED TO HIM AND NEITHER HE WAS PRODUCED B Y THE ASSESSEE. POSITION REMAINS THE SAME EVEN BEFORE CI T(A). (B) THE SHARE APPLICANTS (CATEGORY-C RS.8 LACS, CA TEGORY- D RS.22 LACS) COULD NOT SUBMIT ANY MATERIAL EVIDENC E REGARDING CREDITWORTHINESS AND GENUINENESS BEYOND FILING MERE CONFIRMATORY LETTERS. THE BANK ENQUIRIES IN SOME C ASES REVEALED THAT DEMAND DRAFTS WERE PURCHASED IN THEIR NAMES FR OM SINGLE I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 3 BRANCH OF BANK IN CASH. THE BRANCH WAS LOCATED IN A PLACE OF OTHER THAN THE PLACE OF RESIDENCES OF THE SHARE APP LICANTS AND DEMAND DRAFTS WERE NUMBERED SERIALLY. (C) THE ABOVE ENQUIRIES GO TO ESTABLISH BEYOND DOUB T THE UNEXPLAINED INVESTMENT MADE BY ASSESSEE AS IT HAS N OT BEEN ABLE TO PROVE IDENTITY, GENUINENESS AND CREDITWORTH INESS OF THE DEPOSITS IN QUESTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER O F THE ASSESSING OFFICER. GROUNDS IN ITA NO.1444 OF 2005 ARE AS UNDER:- 1. THE HONBLE CIT(A) HAS GROSSLY AND GRIEVOUSLY ER RED IN LAW AND ON FACTS BY CONFIRMING THE ADDITION OF RS.1 3,00,100/- IGNORING THE BASIC UNDISPUTED FACT THAT THE COMPANY WAS PASSING THOUGH THE CONSTRUCTION PERIOD I.E. IT HAD NOT EVEN COMMENCED ANY COMMERCIAL OPERATIONS AND CONSEQUENTLY, TO DELE TE THE ADDITION OF RS.13,00,100/-. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPA NY WAS INCORPORATED ON 10 TH MAY, 2000. THE AUTHORIZED CAPITAL OF THE COMPANY IS RS.1.20 CRORES HAVING RS.1,20,000/- EQUITY SHARES EACH OF RS.10/-. DURIN G THE YEAR UNDER APPEAL ALL THE EQUITIES SHARES WERE ISSUED, SUBSCRIBED AND FULLY P AID UP I.E. THE COMPANY HAS SHOWN COLLECTION OF RS.1.20 CRORES WITH PAID UP SHA RE CAPITAL ALONG WITH RS.56,000/- AS SHARE APPLICATION MONEY IN ITS BOOKS OF ACCOUNTS FROM 53 PERSONS. THE COMPANY DID NOT START ITS BUSINESS ACTIVITIES D URING THE YEAR UNDER APPEAL. DURING THE OCURSE OF ASSESSMENT PROCEEDINGS THE LIS T OF SHARE HOLDERS ALONG WITH THEIR HOLDING IN SHARES WERE FURNISHED. THE MODE O F PAYMENT FOR PURCHASE OF SHARES BY THE RESPECTIVE SHARE HOLDERS WAS ALSO GIV EN. THE LIST OF SHARE HOLDERS, THEIR INVESTMENT IN SHARES, MODE OF PAYMENTS, ASSES SMENT PARTICULARS AND THEIR OCCUPATIONS WERE PREPARED BY THE A.O. AND WERE GROU PED IN THE FOLLOWING I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 4 CATEGORIES BASED UPON THE RESPONSE TO THE LETTERS O N ENQUIRY SENT BY THE A.O. TO THESE SHARE HOLDERS. CATEGORY A- THOSE WHO HAVE DENIED INVESTMENT RS.9,00,000/-:- SR.NO NAME OF APPLICANTS PAID BY CASH PAID BY D.D. TOTAL RS. 1. SHRI DALSUKHLAL K MADHVANI 100000 100000 2. SHRI HITESH J MADHVANI 100000 100000 3. SMT. MADHUBEN J. MADHVANI 20000 80000 100000 4. SHRI MANHAR A LAKHANI 20000 80000 100000 5. SHRI NARENDRA A LAKHANI 100000 100000 6. SHRI SUNIL A LAKHANI 20000 80000 100000 7. SHRI ISHWAR P RAJA 70000 30000 100000 8. SHRI JAMNADAS P RAJA 100000 100000 9. SLIRI CHANDU P RAJA 70000 30000 100000 TOTAL 200000 700000 900000 CATEGORY 'B : THE SUBSCRIBERS WHO DID NOT COMPLY, BUT SUBMITTED A FFIDAVITS. RS. 11,99,900/-:- SR. NO NAME OF APPLICANTS PAID BY CASH PAID BY D.D. TOTAL RS. 1. SHRI RAJENDRA THAKORE 1116400 83500 1199900 TOTAL 1116400 83500 1199900 I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 5 CATEGORY C : WHERE LETTERS WRITTEN BY THE AO WERE RETURNED UNSER VED BUT LATER ON REPLIES WERE RECEIVED THROUGH POST RS. 8,00,000/ -:- SR.NO NAME OF APPLICANTS PAID BY CASH PAID BY D.D. TOTAL RS. 1. SHRI V.D. UNHAD 100000 100000 2. SHRI P.O. UNHAD 20000 80000 100000 3. SHRI K.D. AMIPURA 100000 100000 4. SHRI J. D. AMIPURA 100000 100000 5. SHRI R.D. AMIPURA 100000 100000 6. SHRI C.D. AMIPURA 100000 100000 7. SHRI V.L. AMIPURA 100000 100000 8. SHRI L.L. AMIPURA 25000 75000 100000 TOTAL 445000 355000 800000 CATEGORY D' : WHERE LETTERS WERE SERVED, BUT REPLIES WERE RECEI VED THROUGH POST. RS. 22,00,000/-:- SR.NO NAME OF APPLICANTS PAID BY CASH PAID BY D.D. TOTAL RS. 1. SHRI J. S. LAKHANI 50000 50000 100000 2. SHRI B.C. LAKHANI 20000 80000 100000 3. SHRI J.J. LAKHANI 28000 72000 100000 4. SHRI B.G. UNHAD 100000 100000 5. SHRI V.K. UNHAD 20000 80000 100000 I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 6 6. SHRI C.T. SATASIA 100000 100000 7. SHRI D.J. SATASIA 100000 100000 8. SHRI C.L. SATASIA 100000 100000 9. SHRI B.L. SATASIA 100000 100000 10. SHRI V.J. BHUTAN! 100000 100000 11. SHRI C.J. BHUTAN! 100000 100000 12. SHRI S.M. KUMBHANI 12500 87500 100000 13. SHRI R.N. DHADHUK 100000 100000 14. SHRI T.N. TANNA 100000 100000 15. SHRI T.T. TANNA 20000 80000 100000 16. SHRI D.J. KHANDELIA 100000 100000 17. SHRI D.G. DHAMECHA 100000 100000 18. SHRI R.D. DHAMECHA 80000 20000 100000 19. SHRI V.P. RAJA 50000 50000 100000 20. SHRI B.R. ASODARIA 100000 100000 21. SHRI J.D. ASODARIA 100000 100000 22. SHRI K. G. PATEL 100000 100000 TOTAL RS 680500 1519500 220000 0 CATEGORY 'E : CASES WHERE SOME OTHER PERSONS WERE FOUND TO BE RESIDING AT THE GIVEN ADDRESS RS. 3,00,000/-:- SR.NO NAME OF APPLICANTS PAID BY CASH PAID BY D.D. TOTAL RS. I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 7 1. SHRI B.D. KARIA 100000 100000 2. SHRI C.V. ADHIA 100000 100000 3. SHRI H.V. ADHIA 100000 100000 TOTAL RS. 200000 100000 300000 CATEGORY 'F : CASES WHERE NO CONFIRMATION WERE SUBMITTED RS.1 ,00,100/-:- SR. NO NAME OF APPLICANTS PAID BY CASH PAID BY D.D. TOTAL RS. 1. SHRI ARVIND D AMIPURA 100000 100000 2. SHRI DEVESH K SHAH 100 100 TOTAL RS. 100100 100100 FOR THE REASONS GIVEN BY THE A.O. FROM PARA 2.2 TO 2.13 OF HIS ORDER HE CONCLUDED HIS FINDING AS UNDER:- IN VIEW OF THE ABOVE DISCUSSIONS, IT IS CLEAR THAT GENUINENESS AND CREDITWORTHINESS OF SHARE APPLICATI ON MONEY CLAIMED IN THE NAMES OF ABOVE 45 PERSONS HAVE NOT B EEN PROVED. HENCE, AN AMOUNT OF RS.55,00,000/- IS HELD AS UNEXP LAINED SHARE APPLICATION MONEY AND THE SAME IS TREATED AS INCOME FROM UNDISCLOSED SOURCES IN THE HANDS OF ASSESSEE COMPAN Y. ACCORDINGLY, AN ADDITION OF RS.55,00,000/- IS MADE U/S 68 OF THE ACT TO THE INCOME RETURNED BY THE ASSESSEE COMPANY. PENALTY PROCEEDINGS U/S 271(1)(C) IS ALSO INITIATED ON THE ISSUE. AGGRIEVED BY THIS ORDER OF THE A.O., THE ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A) WHO AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE, CONFIRMED THE ACTION OF THE A.O. IN RESPECT OF SHAREHOLDERS OF CATEGORY A, E AND F AND THEREBY I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 8 CONFIRMED THE ADDITION OF RS.13,00,100/- AND GAVE R ELIEF TO THE ASSESSEE TO THE EXTENT OF RS.41,99,900/-. AGGRIEVED BY THE RELIEF GIVEN TO THE ASSESSEE REVENUE IS IN APPEAL WHILE AGGRIEVED BY THE ADDITION CONFIR MED BY LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING LD. A.R., AT THE OUTSET, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIO N OF HONBLE APEX COURT IN THE CASE OF CIT VS. LOVELY EXPORT PVT. LTD. WHEREIN FOL LOWING WAS HELD:- IF SHARE APPLICATION MONEY IS RECEIVED BY ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAME S WARE GIVEN TO ASSESSING OFFICER, THEN DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE W ITH LAW BUT THIS AMOUNT OF SHARE MONEY CANNOT BE REGARDED AS UN DISCLOSED INCOME UNDER SECTION 68 OF ASSESSEE COMPANY. 5. SINCE, IN THE INSTANT CASE THE IDENTITY OF THE SHARE HOLDERS WAS ESTABLISHED BY THE A.O. BY WAY OF GIVING NAMES AND ADDRESS OF THE SHARE HOLDERS, NO ADDITION IN THE HANDS OF THE ASSESSEE C OMPANY WAS CALLED FOR. IT WAS FURTHER SUBMITTED THAT SHARES WERE ALSO SENT TO ALL THE SHARE HOLDERS AND THEIR ACKNOWLEDGEMENT OF RECEIVING THOSE SHARES HAS ALSO BEEN PUT ON RECORD. THEREFORE, EVEN THE GENUINENESS OF THE TRA NSACTION IS NOT IN DOUBT IN THIS CASE AND THEREFORE, EVEN THE ADDITION SUSTAINE D BY LD. CIT(A) IS REQUIRED TO BE DELETED. LD. D.R., ON THE OTHER HAND, PLACIN G RELIANCE ON THE DECISION OF THE ORDER OF THE A.O. AND FOR THE REASONS GIVEN BY THE A.O. IN HIS ORDER FOR MAKING SUCH ADDITION IN RESPECT OF SHARE APPLICATIO N MONEY RECEIVED FROM SHARE HOLDERS (FOR WANT OF CREDITWORTHINESS OF THE SHARE HOLDERS) ARGUED THAT THE RELIEF GIVEN BY LD. CIT(A) WAS NOT JUSTIFIABLE AND THEREFORE, THE ORDER I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 9 PASSED BY LD. CIT(A) MAY KINDLY BE SET ASIDE AND TH AT OF THE A.O. BE RESTORED. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT NAMES AND ADDRESSES OF THE PERSONS FROM WHOM SHARE APPLICATION MONEY WAS RECEI VED BY THE ASSESSEE COMPANY ARE ON RECORD, THUS, THE IDENTITY OF THE SU BSCRIBERS IS NOT IN DISPUTE. ON THESE FACTS, THIS BENCH OF THE TRIBUNA L HAS BEEN CONSISTENTLY FOLLOWING THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. LOVELY EXPORT PVT. LTD. AS, THE RATIO OF HONBLE APEX COU RT DECISION IN THE CASE OF CIT VS. LOVELY EXPORT PVT. LTD. IS SQUARELY APPLICA BLE TO THE FACTS OF THIS CASE EXCEPT IN THE CASE OF CATEGORY-A OF THE SHARE HOLDE RS WHO HAVE DENIED TO HAVE SUBSCRIBED TO THE SHARES OF THE COMPANY, RESP ECTFULLY FOLLOWING THE SAME, WE ARE OF THE CONSIDERED OPINION THAT THE ADD ITION IS TO BE RESTRICTED TO THE EXTENT OF RS.9,00,000/- IN RESPECT OF ONLY T HOSE APPLICANTS OF SHARES WHO HAVE DENIED TO HAVE MADE ANY INVESTMENT IN THE SHARE OF THE COMPANY. WE HOLD ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND AS SESSEE ARE PARTLY ALLOWED. ITA NO.1658 OF 2009 8. GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS BY NOT APPLYING HIS MIND TO THE BASIS FOR FRAMING OF C HARGE FOR LEVYING THE PENALTY I.E. WHETHER YOUR APPELLANT COM PANY HAS FILED INACCURATE PARTICULARS OF ITS INCOME OR HAS C ONCEALED THE INCOME SO AS TO EVADE THE PAYMENT OF TAX THEREON AN D HAS ACCORDINGLY, FAILED TO FRAME THE SPECIFIC CHARGE OF DEFAULT AND CONSEQUENTLY THE PENALTY ORDER PASSED BY THE LD. AC IT HAS TO BE I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 10 CANCELLED IN TOTO AND ACCORDINGLY, IT IS PRAYED TO YOUR HONOUR TO CANCEL THE PENALTY ORDER IN TOTO. 2. THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND ON F ACTS BY CONFIRMING THE PENALTY BY IGNORING THE BASIC FACAT THAT THE COMPANY BEING A NEW COMPANY PASSING THROUGH ITS CON STRUCTION PERIOD HAVING NOT COMMENCED ANY BUSINESS ACTIVITIES CAN NOT RECEIVE SUCH HUGE INCOME IN ITS FIRST YEAR AND ACCO RDINGLY ALSO, YOUR APPELLANT, COMPANY PRAYS FOR CANCELLATION OF T HE PENALTY IN TOTO. 3. THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND ON F ACTS BY IGNORING THE BASIC FACT THAT THE COMPANY BEING A PU BLIC COMPANY CAN NOT HAVE DIRECT CONTACTS WITH THE PROSPECTIVE I NVESTORS FOR A LONGER PERIOD AND HENCE, ANY CHANGE IN ADDRESS SHOU LD NOT BE VIEWED AGAINST YOUR APPELLANT COMPANY FOR CONSIDERI NG THE SHARE APPLICATION MONIES U/S 68 OF THE I.T. ACT AS INCOME OF YOUR APPELLANT COMPANY AND THEREFORE, IT IS PRAYED TO CA NCEL THE PENALTY IN TOTO. 9. IN THIS CASE ASSESSMENT U/S 143(3) WAS COMPLETE D DETERMINING TOTAL INCOME OF RS.55,00,000/-. THE A.O. MADE AN A DDITION ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY AMOUNTING TO RS .55,00,000/-. THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO CONFIRMED THE ADDITION OF RS.13,00,100/- AND DELETED THE ADDITION OF RS.41 ,99,900/-. THE A.O. LEVIED PENALTY OF RS.5,14,190/- IN VIEW OF EXPLANAT ION-1 OF SECTION 271(1)(C) ON ADDITION OF RS.13,00,100/-. IN APPEAL THIS PENA LTY HAS BEEN CONFIRMED BY LD. CIT(A). AGGRIEVED BY THE ORDER OF LD. CIT(A) N OW THE ASSESSEE IS IN APPEAL BEFORE US. 10. IN VIEW OF OUR DECISION IN ITA NOS.1542 AND 14 44 OF 2005 CONFIRMING THE ADDITION OF RS.9,00,000/-, THE ISSUE BEFORE US REMAINS WHETHER PENALTY IS LEVIABLE ON THIS ADDITION OR NOT . SINCE THE ADDITION OF RS.9,00,000/- ON ACCOUNT OF UNEXPLAINED SHARE APPLI CATION MONEY HAS BEEN I.T.A. NO.1542/AHD/2005 A. Y. 2001-02 WITH I.T.A. NO.1444/AHD/2005 A. Y. 2001-02 WI TH I.T.A. NO.1658/AHD/2009 A. Y. 2001-02 11 CONFIRMED BY US DUE TO THE FACT THAT ALLEGED APPLIC ANTS OF SHARES HAVE DENIED TO HAVE SUBSCRIBED TO THE SHARES OF THE ASSE SSEE COMPANY, THE AMOUNT OF RS.9,00,000/- IS TO BE TREATED AS COMPLET ELY UNEXPLAINED AND THE EXPLANATION OFFERED BY THE ASSESSEE HAS BEEN FOUND TO BE FALSE TO THIS EXTENT. THE EXPLANATION-1 TO SECTION 271(1)(C) OF THE ACT IS ATTRACTED TO THE FACTS OF THIS CASE AND, THEREFORE, THE PENALTY IN R ESPECT OF ADDITION OF RS.9,00,000/- FOR CONCEALMENT U/S 271(1)(C) IS HERE BY CONFIRMED. THE A.O. IS DIRECTED TO RECALCULATE THE PENALTY ACCORDINGLY. 11. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON 13.07.2012 SD/- SD/- (T.R. MEENA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '# *