M/s ` Amit Reality Pvt Ltd, Kolkata V. ACIT CIR-3, Bokaro

ITA 20/RAN/2017

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7202 (ITAT-RANCHI)
• Duration Of Justice: 4 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 02-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Source of fund
• Section: 68

Judgement Text

1 ITA No. 20/Ran/2017 Amit Realty Pvt. Ltd., AY 2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, “VIRTUAL HEARING” AT KOLKATA (सम ) ी ए.ट .वक , या यक सद य) [Before Shri A. T. Varkey, JM] I.T.A. No. 20/RAN/2017 Assessment Year: 2012-13 M/s. Amit Realty Pvt. Ltd. (PAN:AAGCA3858B) Vs. Assistant Commissioner of Income Tax, circle-3, Bokaro Appellant Respondent Date of Hearing 11.11.2021 Date of Pronouncement 30.11.2021 For the Appellant Shri S. M. Surana, Advocate For the Respondent Shri Narsingh Kumar Kholkho, Sr. DR ORDER This appeal has been preferred by the assessee against the order of Ld. CIT(A), Hazaribagh dated 01.12.2016 for Assessment Year 2012-13. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) in confirming the addition of Rs.26,50,000/- u/s. 68 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”). 3. Brief facts as noted by the AO are that the assessee had received share application money from three (3) persons viz., (i) Smt. Manju Tekriwal Rs.2,75,000/-, (ii) Amit Tekriwal, HUF Rs.3,50,000/- and (iii) Shri Madan Lal Jain Rs.20,00,000/-. The AO was of the view that even though the identity of the share subscribers/vendors was established i.e. the funds were transferred from the bank account of Smt. Manju Tekriwal, Amit Tekriwal, HUF and Shri Madan Lal Jain, however, according to AO, the source of funds could not be verified. On that account he drew adverse inference against the assessee and made an addition of Rs.26,50,000/-. Aggrieved, the assessee preferred an appeal before the Ld. 2 ITA No. 20/Ran/2017 Amit Realty Pvt. Ltd., AY 2012-13 CIT(A), who confirmed the action of the AO. Aggrieved assessee is in appeal before this Tribunal. 4. Heard the rival submissions and gone through the facts and circumstances of the case. At the outset, it was pointed out by the Ld. AR of the assessee that the assessment year under consideration is AY 2012-13, therefore, according to Ld. AR, assessee is not required to prove the ‘source of source’ which requirement of law came subsequently only in the statute from AY 2013-14 and, therefore, the AO/CIT(A) erred in harping/insisting upon the requirement of law which was not necessary as per law in this assessment year. It is noted that the AO himself has acknowledged that Smt. Manju Tekriwal has given an amount of Rs.2,75,000/- through cheque from ICICI Bank on 02.01.2012 and she was allotted shares on 31.03.2012. Thus, it is noted that the AO himself has given a finding of fact (in his own words) “The same was verified from ICICI Bank account statement (A/c 130101000654) of Smt. Manju Tekriwal (placed on record). Thus the identity of funds was established i.e. the funds were transferred from the bank account of Smt. Manju Tekriwal”. Thus, it is noted that AO had accepted the identity of the share subscribers Smt. Manju Tekriwal. It is also noted that the assessee was asked to show the ‘source of source’. Pursuant to which the assessee had placed on record that she got commission/professional fee of Rs.2,44,673/- on account of sale of flat at project Urbana and the evidence regarding the said receipt of commission was also placed on record. However, the AO has brushed aside the same and was of the opinion that the assessee failed to establish the ‘source of source’ of Smt. Manju Tekriwal. This action of the AO/CIT(A) cannot be countenanced. It is found from the discussion above that the assessee has discharged the burden casted upon it in respect of proving the identity, creditworthiness and genuineness of the share subscription made by Smt. Manju Tekriwal. 5. Likewise, in the case of Amit Tekriwal, HUF the AO himself has noted and acknowledged that Amit Tekriwal, HUF has given an amount of Rs.3,50,000/- through cheque from Indian Overseas Bank on 08.01.2012 and it was allotted shares on 31.03.2012. 3 ITA No. 20/Ran/2017 Amit Realty Pvt. Ltd., AY 2012-13 And the AO himself has recorded a finding of fact that the identity of the funds was established i.e. funds were transferred from the bank account of Amit Tekriwal, HUF. It is also noted that the assessee was asked by AO to show the ‘source of source’ of this amount. And pursuant to same, the assessee placed on record that it got commission/professional fee of Rs.8,16,838/- on account of sale of flat at project UJJAS at Lake Town, Kolkata and the evidence regarding the said commission was also placed on record. However, the AO has brushed aside the same and was of the opinion that the assessee failed to establish the ‘source of source’ of the share subscription amount of Rs.3.50 lacs of Amit Tekriwal, HUF. This action of the AO/CIT(A) cannot also be countenanced. 6. I find that the Amit Tekriwal, HUF had subscribed for shares in assessee company and remitted an amount of Rs.3.50 lacs on 08.01.2012 from the Indian Overseas Bank. The assessee had also given the supporting documents like ITR acknowledgement, bank statement, balance sheet and even source of source [page 58 of the PB] to establish the genuineness and the creditworthiness of the share applicant; Therefore, I find that the burden casted upon the assessee to prove the identity, genuineness and creditworthiness of the share subscriber Amit Tekriwal, HUF stands proved. 7. Coming to the facts in respect of Shri Madan Lal Jain who has subscribed to the shares to the tune of Rs. 20 lakhs, I note that AO has acknowledged that Shri Jain has credited on four (4) dates by cheque nos. 596463 Allahabad Bank, Bokaro Steel City on 19.10.2010 Rs. 5 lakhs and by cheque no. 596464 Rs. 7 lakhs, by cheque no. 596465 Rs. 3 lakhs and by cheque no. 596466 Rs. 5 lakhs dated 20.10.2010, 23.10.2010 and 26.10.2010 and thus transferred total Rs.20 lakhs to the assessee company. It is thus noted that the credit entry is in the assessment year 2011-12 i.e the previous assessment year and not in the relevant assessment year under consideration i.e. AY 2012-13. Therefore, no addition u/s. 68 of the Act was legally permissible. So, Rs.20 lakhs addition stands deleted. 8. Since I have found that assessee has discharged the burden on it to prove the identity, creditworthiness and genuineness of both the share subscribers Smt. Manju Tekriwal and 4 ITA No. 20/Ran/2017 Amit Realty Pvt. Ltd., AY 2012-13 Amit Tekriwal, HUF, the addition of Rs.2,75,000 and Rs.3,50,000/- also stand deleted. Therefore, the total addition u/s. 68 of the Act of Rs.26,50,000/- stands deleted. 9. In the result, the appeal of assessee is allowed. Order is pronounced in the open court on 30 th November, 2021 Sd/- Dated: 30.11.2021 (Aby. T. Varkey) Judicial Member JD(Sr.P.S.) Copy of the order forwarded to: 1. Appellant – M/s. Amit Realty Pvt. Ltd., 1 st Floor, 20/1, Ashutosh Chowdhury Avenue, Ballygunge, Kolkata-700 019. 2 Respondent – ACIT, Circle-3, Bokaro. 3. 4. 5. CIT(A), Jharkhand CIT- DR, ITAT, Ranchi /True Copy, By order, Senior Pvt. Secy.