ITO Ward -19(4), New Delhi V. Pioneer Factors IT Infra Developers pvt ltd, New Delhi

ITA 1913/DEL/2019

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2532 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 24-04-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 04-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAYURI
• Keywords: Bogus Share capital; Source of fund
• Section: 68; 143(3); 133(6)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 1913/Del/2019 Asstt. Year: 2015-16 ITO, Ward-19(4) Room No. 209, C.R. Building, New Delhi. Vs. M/s. Pioneer Factor Developers Pvt. Ltd. 5 th Floor, Padma Palace, 86, Nehru Place, New Delhi – 110 019 PAN AAECP3203B (Appellant) (Respondent) O R D E R PER VIMAL KUMAR, JM The appeal is against order dated 18.12.2018 of the Learned Commissioner of Income Tax (Appeals) through which assessment order dated 8.12.2017 of the Learned Assessing Officer addition of Rs. 4,13,50,000/- was added in the income of assessee company due to failure and discharging its onus under section 68 of the Income Tax Act, 1961. 2. Brief facts of case are that assessee M/s. Pioneer Factor IT Infradevelopers Pvt. Ltd. e-filed its return on 25.09.2015 for the assessment year 2015-16 declaring NIL income, The case was selected for scrutiny under CASS. Order under section 143(3) Assessee by: Shri Gautam Jain, Advocate Shri Path Singhal, Advocate Department by: Ms. Mayuri, Sr. DR Date of Hearing: 25.04.2024 Date of pronouncement: 06.05.2024 2 was passed on 8.12.2017 assessing income as Rs. 4,13,50,000/- under section 68 on account of unapproved share capital i.e. unexplained cash credit. Assessee preferred appeal before Learned CIT(A) which was partly allowed deleting addition of Rs. 4,13,50,000/-. 3. Being aggrieved appellant Department preferred appeal. 4. Learned Departmental Representative submitted that Learned CIT(A) erred in law and fact in deleting addition of Rs. 4,13,50,000/- made by Learned Assessing Officer on account of unexplained share capital received from Snt. Kalawati Devi Jain, Smt. Sunaina Devi, Shri Ram Sewak Gupta and M/s. Pioneer Procon Pvt. Ltd. despite the fact that the assessee was not able to prove the genuineness of transactions and their creditworthiness of creditors as required under section 68 of the Income Tax Act. 5. Learned Representative for assessee submitted that in pursuance to notice under section 133(6) Smt. Kalawati Devi Jain, Smt. Sunaina Devi, Shri Ram Sewak Gupta submitted replies confirming subscription in preference share capital of assessee company, independently and had furnished their respective bank statements duly reflecting the source of their investments and ITR etc. The assessee company had duly furnished complete details and corroborating evidences in the shape of confirmations, PAN, income tax particulars, addresses, share certificates, ROC records. Learned Assessing Officer had made addition on the sole basis of low amount of returned 3 income of the 4 investor entities and doubted their creditworthiness. So appeal may be rejected. 6. From examination of record in light of aforesaid rival contentions it is crystal clear that Learned Assessing Officer noticed that Smt, Kalawati Devi Jain, Smt. Sunaina Gupta, Shri Ram Sewak Gupta, M/s. Pioneer Procon (P) Ltd. having very low income and as such having no creditworthiness to provide share capital to assessee company mad made addition of Rs. 4,13,50,000/-. Learned CIT(A) on basis of submissions tabulated in detail in relation to nature and source of funds made by Smt. Kalawati Devi Jain, Smt. Sunaina Gupta, Shri Ram Sewak Gupta and M/s. Pioneer Procon (P) Ltd. as under:- Investor Entities & their Relationship with Assessee Company Date of Receipts of Fund Sources of Fund Amount of Share Subscription Nature of Transaction Smt. Kalawati Devi Jain, Mother of Director of Assessee Company 27.03.2015 Pioneer Securities (P) Ltd. 50,00,000/- Recovery of Own Fund Smt. Sunaina Gupta, Close Friend of Director of Assessee Company 27.03.2015 Rajiv Kumar, Husband of Sunaina Gupta, promoter of Bakemans Biscuits & Factory 1,50,15,000/- 49,85,000/- Recovery of Own Fund Loan Taken Sh. Ram Sewak Gupta, Close Friend of Director of Assessee Company 27.03.2015 Pioneer Securities (P) Ltd. 1,21,00,000/- Recovery of Own Fund M/s Pioneer Procon (P) Ltd., Sister Concern of Assessee Company 27.03.2015 Pioneer Securities (P) Ltd. 42,50,000/- Recovery of Own Fund Total 4,13,50,000/- 4 7. The above factual position was corroborated by bank statement investors. None of the four investor entities were having any blemished track record of entry operators. All four were regular income tax assessees filing ITRs. The four investors had provided statutory records like audited financial statements, ITR, Confirmation, Bank Statements, Share Certificates, ROC Records and the independent confirmation so the onus had shifted back to the Learned Assessing Officer resultantly the addition of Rs. 4,13,50,000/- was found to be unsustainable. In view of above material facts and circumstances the findings of Learned CIT(A) are just, fair, reasonable and deserve to be upheld. The arguments of Departmental Representative being devoid on merit are unsustainable. 8. No other point was argued. 9. In the result appeal is dismissed. Order pronounced in the open court on 6 th May, 2024. sd/- sd/- (S RIFAUR RAHMAN) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 06/05/2024 Veena Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT 5 ASSISTANT REGISTRAR ITAT, New Delhi Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order