ITO, New Delhi V. M/s North Delhi Construction and Investment Pvt. Ltd., New Delhi

ITA 2208/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1344 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 14-10-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 25-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENAKSHI J GOSWAMI
• Keywords: Accommodation entries
• Section: 195; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `E : NEW DELHI) BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.2208/DEL./2009 (ASSESSMENT YEAR : 2005-06) ITO, WARD 13(3), VS. M/S NORTH DELHI CONSTRUCTION & NEW DELHI. INVESTMENT PVT. LTD., SD-65, PITAM PURA, NEW DELHI. (PAN/GIR NO.AABCN9873C) AND C.O. NO.217/DEL./2009 (IN I.T.A. NO.2208/DEL./2009) ASSESSMENT YEAR : 2005-06 M/S NORTH DELHI CONSTRUCTION & VS. ITO, WARD 13(3), INVESTMENT PVT. LTD., NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANOJ KUMAR, FCA REVENUE BY : SMT. MEENAKSHI J. GOSWAMI, SR.DR ORDER PER A.K. GARODIA: AM THESE ARE CROSS APPEALS DIRECTED AGAINST THE ORDER OF CIT(A)-XVI DATED 06/03/2009 FOR ASSESSMENT YEAR 2005-06. IN THE REVE NUES APPEAL, THE FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, LD.CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF RS.48,00, 000 ON ACCOUNT OF SHARE APPLICATION MONEY, WHICH WAS HELD TO BE UNEXPLAINED U/S 68 OF THE I.T. ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, LD.CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF RS.1,20,0 00 ON ACCOUNT OF COMMISSION PAID TO OBTAIN THE ACCOMMODATION ENTRY I N THE FORM O F SHARE APPLICATION MONEY OF RS.48,00,000. I.T.A. NO.2208/DEL./2009 (A.Y. : 2005-06) 2 2. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HA S RECEIVED SHARE APPLICATION MONEY AMOUNTING TO RS. 48,00,000/-. THE ASSESSING OFFICER HAD INFORMATION FROM THE INVESTIGATION WING THAT THE PERSONS MENTIONED IN TH E ASSESSMENT ORDER HAD PROVIDED ACCOMMODATION ENTRIES TO THE ASSESSEE. THE ASSESS EE HAD SUBMITTED THE DETAILS OF THESE PERSONS ALONG WITH THEIR ADDRESSES. THE ASSESSING OFFICER ISSUED SUMMON TO THOSE PERSONS, BUT THEY DID NOT APPEAR BEFORE THE ASSESSI NG OFFICER. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THAT THESE WERE NOT ACCOMMODATION ENTRIES AND WERE GENUINE SHARE APPLIC ATION MONEY. HENCE, HE ADDED THIS AMOUNT UNDER SECTION 68 OF THE I.T. ACT. 3. THE LD. CIT(A) CONSIDERED THE ISSUE AND OBSERVED THAT THE ASSESSEE HAS GIVEN ALL THE REQUIRED DETAILS INCLUDING PAN AND PLACE OF ASS ESSMENT OF THOSE PARTIES. HE NOTED THAT THE ASSESSEE HAS ALSO SUBMITTED THE COPIES OF THE BANK STATEMENTS SHOWING DEPOSITS OF ALL THESE RECEIPTS. HENCE, THE LD. CIT(A) WAS OF T HE VIEW THAT THE ASSESSEE HAS DISCHARGED ITS PRIMARY ONUS AND NOW IT IS FOR THE A SSESSING OFFICER TO PUT-FORTH SOME ADVERSE MATERIAL, IN CASE HE WAS NOT SATISFIED WIT H THE CLAIM OF THE ASSESSEE. HE ALSO NOTED THAT ASSESSING OFFICER HAS NOT DOUBTED THE FA CT THAT THE ENTIRE AMOUNT HAS BEEN RECEIVED THROUGH CHEQUES AND THESE PARTIES WERE ASS ESSED WITH INCOME TAX DEPARTMENT. ACCORDINGLY, THE LD. CIT(A) DIRECTED FOR DELETION O F ADDITION. 4. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 5. WE HAVE HEARD THE LD. DR FOR THE REVENUE. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE CAREFULLY PERUSED THE RECORDS. AS PER THE ADMITTED FACT OF THE CASE, THE REQUIRED PARTICULARS OF THE SHARE APPLICANTS IN CLUDING THEIR INCOME TAX PARTICULARS AND PAN WERE PROVIDED TO THE ASSESSING OFFICER. EXCEPT FOR GIVING NOTICE TO THE CONCERNED PERSONS UNDER SECTION 131, ASSESSING OFFICER DID NO T DO ANYTHING AND MADE THIS ADDITION. WE FIND SUPPORT FROM THE DECISION OF THE HON'BLE A PEX COURT RENDERED IN THE CASE OF CIT VS. ORRISA CORPORATION PVT. LTD. 159 ITR 78 WHE REIN IT WAS HELD THAT IN CASE THE CREDITOR DOES NOT APPEAR IN RESPONSE TO SUMMON ISSU ED UNDER SECTION 131, NO ADVERSE INFERENCE CAN BE DRAWN. FURTHER, WE FIND THAT THE ASSESSEE HAD ALREADY SUBMITTED THE NAMES AND ADDRESSES AND IT DETAILS OF THE SHARE APP LICANTS AND UNDER THESE CIRCUMSTANCES, THE DECISION OF THE HON'BLE APEX COURT DELIVERED IN THE CASE OF CIT VS. LOVELY EXPORTS I.T.A. NO.2208/DEL./2009 (A.Y. : 2005-06) 3 216 CTR 195 IS DIRECTLY APPLICABLE. IN THIS CASE, IT WAS HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLE GED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE W ITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 6. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PR ECEDENT, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE LD. CIT (A). HENCE, WE UPHOLD THE SAME. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. CROSS OBJECTION 8. IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND: THE LD.CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW NOT VACATING THE ASSESSMENT ORDER ON ACCOUNT OF FRAMING IMPUGNED ASSESSMENT ORD ER WITHOUT ASSUMING JURISDICTION AS PER LAW (WITHOUT ANY REASON TO BELI EVE). 9. THE ASSESSEE HAS NOT PRESSED THE ABOVE GROUND AN D, THEREFORE, THE C.O. IS TREATED AS WITHDRAWN AND DISMISSED. 10. ORDER PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF THE HEARING ON 14.10.2009. (A.D. JAIN) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, OCT. 14, 2009. SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT