A.C.I.T.-4(1), Agra V. M/s Ambika Sheetgrah (P) Ltd., Agra

ITA 2/AGR/2011

• Counselvise Citation: 220314 RSA 2011
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-10-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 05-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Keywords: Accommodation entries
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.02/AGR/2011 ASSESSMENT YEAR: 2000-01 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S AMBIKA SHEETGRAH (P) LTD., CIRCLE 4(1),AGRA. 28, INDUSTRIAL ESTATE, NUNHAI, AGRA. (PAN: AADCA 0965 A). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. SHARMA, JR. D.R. RESPONDENT BY : SHRI NAVIN GARG, ADVOCATE DATE OF HEARING : 19.10.2011 DATE OF PRONOUNCEMENT : 19.10.2011 ORDER PER H.S. SIDHU, J.M. : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E IMPUGNED ORDER DATED 05.10.2010 PASSED BY THE LD. CIT(A), AGRA FOR THE A SSESSMENT YEAR 2000-01 ON THE FOLLOWING GROUNDS OF APPEAL :- 1. LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN DELE TING THE ADDITION OF ` 6,51,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY WITHOUT APPRECI ATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND RELYING ON THE SU BMISSION MADE BY THE ASSESSEE. ITA NO.02/AGR/2011 A.Y. 2000-01 2 2. LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF ` 6,51,000/- MADE BY THE ASSESSING OFFICER BY TREATIN G THE SHARE APPLICATION MONEY AS UNEXPLAINED IGNORING THE FACT THAT THE SAME APPLICANTS WERE THE ASSOCIATES OF GANGA RAM GR OUP WHICH WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES TO THE N EEDY PERSONS IN LIEU OF MONEY PROVIDED BY THEM. 3. LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF ` 6,51,000/- IGNORING THE FACTS THAT THE ASSOCIATES O F GANGA RAM GROUP HAVE NO CAPACITY TO INVEST SUCH HUG E MONEY AS SHARE CAPITAL WHICH IS PROVED FROM THE FACT THAT UN EXPLAINED MONEY EQUIVALENT TO SHARE APPLICATION MONEY HAD BEEN FOUN D CREDITED IN THEIR BANK ACCOUNT BEFORE THE ISSUANCE OF CHEQUE TO THE ASSESSEE FOR SUCH INVESTMENT. 4. THE ORDER OF LD. CIT(A) BEING ERRONEOUS IN LAW A ND ON FACTS DESERVES TO BE QUASHED AND THE ORDER OF THE AO DESE RV4S TO BE RESTORED. 5. THE APPLICANT CRAVES, LEAVES TO ADD OR ALTER ANY OR MORE GROUND OR GROUNDS OF APPEAL AS MAY DEEM FIT AT THE TIME OF HEARING OF APPEAL. 2. THE FACTS NARRATED BY THE DEPARTMENT ARE NOT DIS PUTED BY BOTH THE PARTIES, THEREFORE, NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. 3. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED BY THIS BENCH I N ITA NO.262/AGR/2006 FOR THE ASSESSMENT YEAR 1998-99 IN THE CASE OF I.T.O. VS. A DITYA AGARWAL. WE ALSO FIND THAT THE LD. FIRST APPELLATE AUTHORITY HAS DECIDED THE ISSUE IN DISPUTE ON THE BASIS ITA NO.02/AGR/2011 A.Y. 2000-01 3 OF THE AFORESAID ORDER OF THIS BENCH. THE RELEVANT PORTION OF THE ORDER OF THE CIT(A) AT PARAGRAPH NO.2.2, PAGE NOS. 3 & 4 IS REPR ODUCED AS UNDER :- 2.2 I HAVE ANALYSED THE MATTER AND I FIND THAT THE SE THREE PERSONS MENTIONED ABOVE FROM WHOM THE ASSESSEE COMPANY CLAI MED TO HAVE RECEIVED THE SHARE APPLICATION MONEY, HAVE CONFIRME D THAT THEY HAD GIVEN THE MONEY AND THEIR INCOME TAX PARTICULARS WE RE ALSO PROVIDED. THE SHARE APPLICATION MONEY WAS RECEIVED THROUGH CH EQUES. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THESE THREE PERSONS WERE NON- EXISTENT OR FICTITIOUS. THE SOLE GROUND OF ASSESSI NG OFFICER FOR MAKING THE ADDITION IS THAT THESE PERSONS BELONGS TO M/S G ANGA RAM GROUP WHO WERE FAMOUS FOR GIVING ACCOMMODATION ENTRIES. THE ASSESSING OFFICER HAS DISCUSSED THE MODUS OPERANDI OF GANGA R AM GROUP BUT THAT DOES NOT ADVANCE THE CASE OF THE ASSESSING OFF ICER UNLESS PROVED THAT THESE PERSONS HAVE ADMITTED THAT THEY WERE ENG AGED IN GIVING BOGUS ENTRIES OR THAT THE APPELLANT HAD GIVEN CASH TO THESE THREE PERSONS AND IN LIEU THEREOF GOT THE CHEQUE FROM THE M. THE LD. AUTHORISED REPRESENTATIVE HAS APTLY RELIED ON THE C ASE OF ITO VS. SHRI ADITYA AGARWAL WHEREIN ON SIMILAR FACTS VIDE ORDER IN ITA NO.262/AGR/2006 THE HONBLE ITA, AGRA DELETED THE A DDITION. THE APPEAL FILED BY THE DEPARTMENT AGAINST THIS ORDER H AS BEEN DISMISSED BY THE HONBLE ALLAHABAD HIGH COURT VIDE ORDER DATE 4.8.2010 IN CASE NO.524 IN THE CASE OF CIT VS. ADITYA AGARWAL. THE ISSUE IS ALSO COVERED BY THE JUDGEMENT OF HONBLE SUPREME COURT I N THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. (2008) 216 CTR (SC) 195 WHEREIN IT WAS HELD AS UNDER :- CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDIS CLOSED INCOME U/S 68 OF I.T. ACT, 1961 ? WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT I F THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPA NY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN T O THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO P ROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE W ITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGE MENT. SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS DI SMISSED. ITA NO.02/AGR/2011 A.Y. 2000-01 4 FOLLOWING RESPECTFULLY THE ABOVE JUDGEMENT OF HON BLE SUPREME COURT (SUPRA) AND THE FACTUAL MATRIX OF THE CASE AS DISCUSSED ABOVE, THE ADDITION MADE BY THE AO IS DELETED. 4. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTA TIVE RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US. WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THIS BENC H IN ITA NO.262/AGR/2006 IN THE CASE OF ADITYA AGARWAL AND THE APPEAL FIELD BY THE REVENUE AGAINST ITAT ORDER HAS ALSO BEEN DISMISSED BY THE HONBLE JURISD ICTION HIGH COURT AS MENTIONED BY THE LD. FIRST APPELLATE AUTHORITY IN THE AFORESA ID PARAGRAPH. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER DATED 04.08.2010 O F HONBLE JURISDICTIONAL HIGH COURT IN CASE NO.524 OF 2007 IN THE CASE OF CIT VS. ADITYA AGARWAL, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 19.10.2011). SD/- SD/- (B.C. MEENA) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 19 TH OCTOBER, 2011 PBN/* ITA NO.02/AGR/2011 A.Y. 2000-01 5 COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY