DCIT, New Delhi V. M/s. Touch Point Buildmart Pvt. Ltd., New Delhi

ITA 2005/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65682 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 03-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 03-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS SHUMANA SEN
• Keywords: Unexplained cash credit
• Section: 133(6)

Judgement Text

ITA NO. 2005/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2005/DEL/2010 A.Y. : 2007-08 DY. COMMISSIONER OF INCOME TAX, CIRCLE 16(1), NEW DELHI VS. M/S TOUCH POINT BUILDMART PVT. LTD., 1006, TOLSTOY MARG, NEW DELHI 110 001 (PAN/GIR NO. : AACCT3856C) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. PIYUSH KAUSHIK, ADV. DEPARTMENT BY : MRS. SHUMANA SEN, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XIX, NEW DEL HI DATED 26.2.2010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- I). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN DELETING THE ADDITION OF ` 60,00,000/- MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CASH CREDITS ESPECIALLY WHEN IDENTITY AND CREDITWORTHINESS OF THE PARTIES AND GENUINENESS OF TRANSACTION, COULD NOT BE ESTABLISHED. ITA NO. 2005/DEL/2010 2 II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN HOLDING THAT THE ASSESSEE HAD PROVIDED NECESSARY DETAILS IGNORING THE FACT THAT MERE FILING OF ASSESSMENT PARTICULARS DOES NOT TANTAMOUNT TO DISCHARGE OF ONUS. III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN HOLDING THAT THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DISCREPANCY, IN THE BOOKS OF THE ASSESSEE ESPECIALLY WHEN CREDITS APPEARING IN THE ASSESSEES BOOKS REMAINED UNEXPLAINED. 3. IN THIS CASE THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF PROPERTY AND WORKS AS A COM MISSION AGENT FOR OTHER BUILDERS AND DEVELOPERS. AO NOTED THAT ASS ESSEE HAS RECEIVED ` 1,15,00,000/- AS SHARE APPLICATION MONEY ALONGWIT H THE SHARE PREMIUM. THE ASSESSEE SUBMITTED THAT CONFIRMATION LET TER FROM ALL THE NEW SHARE APPLICANTS, THEIR COPY OF BANK STATE MENT, COPY OF THEIR ITR ACKNOWLEDGEMENT AND COPY OF THEIR CERTIFICATE OF INCORPORATION. TO EXAMINE THE GENUINENESS OF THE CASH CREDIT NOTICES U /S. 133(6) WERE SENT TO ALL THE CAPITAL INTRODUCERS AND IN CASE O F THE FOLLOWING CREDITORS, THE NOTICES WERE RECEIVED BACK SINCE THE SE PERSONS WERE NOT FOUND IN THE GIVEN ADDRESSES. I) HERCULES EBUILDERS (COIMBATORE) PVT. LTD. 221, NE W SIDDHAPUDUR, COIMBATORE. II) METALCITY CONSTRUCTIONS KOVAI PVT. LTD., 221, NE W SIDDHAPUDUR, COIMBATORE. ITA NO. 2005/DEL/2010 3 III) TEXCITY CONSTRUCTIONS KOVAI PVT. LTD. 221, NEW SIDDHAPUDUR, COIMBATORE. IV) CEE AAR DECORS PVT. LTD., 1510/11, SHIVASHRAM, S. P. MUKERJI MARG, DELHI 6. 3.1 ASSESSING OFFICER FURTHER NOTED THAT THE AMOUNT FROM FOUR PARTIES HAS BEEN GIVEN FROM THE SAME BRANCH OF UTI BANK LTD ., ASHOK VIHAR, NEW DELHI. ASSESSING OFFICER FURTHER FOUND THAT ASSESSEE HAS NOT SUBMITTED THE BALANCE SHEET OF THESE COMPANIES, BUT THE ASSESSEE HAS SUBMITTED THE INCOME TAX RETURNS OF THESE PARTIES FR OM WHICH THE ASSESSING OFFICER HAS GATHERED THAT THEY HAD SHOWE D EITHER LOSS OR MINIMUM PROFIT. ASSESSING OFFICER FURTHER OBSERVE D THAT FROM THE DETAILS, IT IS CLEAR THAT THERE IS EXTREME RESEMBLA NCE IN THE MODE OF OPERATION OF ALL THE FOUR COMPANIES WHICH HAVE GIVEN CASH CREDITS TO THE ASSESSEE COMPANY. THE IDENTITY OF THESE CREDI TORS COULD NOT BE PROVED. HE FURTHER FOUND THAT IT COULD ALSO NO T BE PROVED BY THE ASSESSEE AS TO WHY THESE PERSONS ARE OPERATING FROM THE SAME BANK AND GIVING CASH CREDITS TO THE ASSESSEE, FILING RE TURN OF LOSS / MEAGER INCOME AND ARE NOT CREDIT WORTHY TO GIVE THE CREDIT S TO THE ASSESSEE. ASSESSING OFFICER FURTHER OBSERVED THAT FROM MER E SUBMISSION OF RETURNS WHICH WERE FILED ON THE SAME DATE IT COULD NOT BE ASCERTAINED AS TO WHETHER THESE WERE ACTUALLY CREDIT WORTHY TO EXTEND THE CREDITS TO THE ASSESSEE. ASSESSING OFFICER HAS CONCLUDE D AS UNDER:- THEREFORE, IT IS CONCLUDED THAT THE IDENTITY OF A BOVE MENTIONED CASH CREDITORS COULD NOT BE PROVED BY THE ASSESSEE. THE ASSESSEE ALSO FAILED TO PROVE THE CR EDIT WORTHINESS OF THESE COMPANIES. AS FAR AS GENUINENES S OF TRANSACTION IS CONCERNED, ALL THE BANK ACCOUNTS ARE IN A ITA NO. 2005/DEL/2010 4 SAME BANK AND THE CREDITS HAVE BEEN GIVEN TO THE ASSESSEE BY THESE PERSONS ON SAME DATES. THEREFOR E, IN THE LIGHT OF THESE CIRCUMSTANTIAL EVIDENCES, THE GEN UINENESS OF TRANSACTIONS OF THESE CREDITS IS ALSO DOUBT WOR THY. THEREFORE, THESE CREDITORS ARE CONCLUDED TO BE NON GENUINE AND THEREFORE, THESE CASH CREDITS ARE ADDED TO THE INCOME OF THE ASSESSEE. 4. UPON ASSESSEES LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT ASSESSEE HAS PROVIDED NECESSARY DETAILS INCLUDING T HE WARD CIRCLE, WHERE THE SHARE APPLICANTS WERE ASSESSED TO INCOME TAX AND DISCHARGED THE ONUS CAST ON IT. LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT ASSESSING OFFICER HAS NOT BROUGHT ANYTH ING ON RECORD TO DISPUTE THE FACT/DETAILS FURNISHED BY THE ASSESSEE DESPITE CONDUCTING THE INDEPENDENT ENQUIRIES BY ISSUING NOTICES. LD . COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT MERELY BECAUS E A NOTICE ISSUED TO SOME SHAREHOLDERS WAS NOT RESPONDED, THEIR SHARE APPLICATION MONEY CANNOT BE TREATED AS UNEXPLAINED AMOUNT UNDER SECTION 68. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED T HAT IN SUCH CASES, IT IS FOR THE ASSESSING OFFICER TO FOLLOW T HE SHAREHOLDERS, WHERE THERE WAS NO MATERIAL FOR HOLDING THAT SUCH AMOUNT IS UNDISCLOSED INCOME OF THE ASSESSEE COMPANY. LD. COMMISSIONER O F INCOME TAX (A) FURTHER REFERRED TO THE DECISION OF THE C.I.T. VS. LOVELY EXPORTS PVT LTD. 319 ITR 5 AND C.I.T. VS. VENKATESHWAR ISPAT P L TD. (2009) 319 ITR 393 (CHHATTISGARH). ON THE BASIS OF THESE DISCUSS IONS AND PRECEDENTS, HE HELD THAT ADDITION NEEDS TO BE DELETED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. ITA NO. 2005/DEL/2010 5 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT ASSESSEE IN THIS CASE HAS GIVEN CONFIRMATION LETTERS FROM ALL THE SHAR E APPLICANTS, THEIR COPY OF BANK STATEMENT WHICH REFLECTED THAT THE AMO UNTS HAVE BEEN CLEARED THROUGH THE BANK AND COPY OF THEIR ITR ACKN OWLEDGEMENT AND COPY OF CERTIFICATE OF INCORPORATION. ASSESSING O FFICER HAS GIVEN NOTICES U/S. 133(6) TO THESE PARTIES, BUT THE NOTIC ES WERE RECEIVED BACK, SINCE PERSONS WERE NOT FOUND IN THE GIVEN ADD RESS. WE FURTHER NOTE THAT LD. COMMISSIONER OF INCOME TAX (A) HAS OBSE RVED THAT ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY MAT ERIAL TO CONTROVERT THE SUBMISSIONS OF THE ASSESSEE. IN THIS REGARD, WE NOTE THAT IT IS NOT THE CASE THAT LD. COMMISSIONER OF INCOME TAX (A) HAS HIMSELF HAS DONE ENQUIRIES AND FOUND THAT THE ASSESSEES SUBMISS IONS ARE COGENT. THUS, WE FIND THAT PROPER ENQUIRY OF THE SUBMISSIO NS BY THE ASSESSEE HAS NOT BEEN DONE. 6.1 WE FURTHER FIND THAT IN THE PRESENT CASE SHARES OF 10/- EACH WERE SAID TO HAVE BEEN GIVEN AT A PREMIUM OF ` 40/- EACH FOR WHICH APPARENTLY THERE IS NO JUSTIFICATION. THE COMPANYS BALANCE SHEET AND OTHER PARTICULARS HAVE NOT BEEN FURNISHED BEFORE U S FROM WHERE IT CAN BE ADDUCED THAT THE COMPANIES SHARES CAN COMMAND SO MUCH OF PREMIUM. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT TOUCHED UPON THIS ASPECT. IN OUR CONSIDERED OPINI ON, THE MATTER NEEDS TO BE REMITTED TO THE FILES OF THE ASSESSING OFFICER, TO ENABLE THE ASSESSEE TO FURNISH COGENT EVIDENCES TO PROVE THE JUSTIFICATION OF SUCH HUGE SHARE PREMIUM BEING RECEIVED BY THE ASSESSEE CO MPANY. WE ALSO NOTE THAT HERE THAT IN NONE OF THE CASE LAW R EFERRED, THE ISSUE OF SHARE AT PREMIUM HAS BEEN CONSIDERED. MOREOVER, WE F IND THAT VERACITY OF ASSESSEES SUBMISSIONS REMAINS TO BE ENQ UIRED INTO. ITA NO. 2005/DEL/2010 6 6.2 IN THIS REGARD, WE DRAW SUPPORT FROM THE APEX CO URT DECISION IN THE CASE OF KAPURCHAND SHRIMAL VS. CIT, 131 ITR 451 , WHEREIN IT WAS HELD THAT THE APPELLATE AUTHORITY HAS JURISDICTION AS WELL AS THE DUTY TO CORRECT THE ERRORS IN THE PROCEEDINGS UNDER APPEAL AND ISSUE PROPER DIRECTION AS NECESSARY. ACCORDINGLY, WE REMIT THE I SSUE TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH , IN LIGHT OF THE DIRECTIONS GIVEN AS ABOVE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12/10/2012. SD/- SD/- [ [[ [U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 12/10/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES