The DCIT, Circle-5, Ahmedabad V. M/s. Pradip Overseas Ltd., Ahmedabad

ITA 2210/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6258 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHRY SRDR
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.N.PHAUJA, HONBLE ACCOUNTANT MEMBER ITA NO.2210/AHD/2009 ASSESSMENT YEAR:2006-07 DATE OF HEARING:27.6.11 DRAFTED:28.6.11 DY. COMMISSIONER OF INCOME-TAX, CIRCLE-5, 2 ND FLOOR, C.Y. SHAH CHAMBERS, ASHRAM ROAD, AHMEDABAD- 380 009 V/S. M/S. PRADIP OVERSEAS LTD., 601, NRARAYAN COMPLEX, NR. SWASTIK CHAR RASTA, NAVRANGPURA, AHMEDABAD 380 009 PAN NO.AADCP3901D (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI M.R. CHAUDHRY, SR-DR RESPONDENT BY:- SHRI ASHOK DHARIWAL, AR O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS IS REVENUES APPEAL AGAINST THE ORDER OF COMM ISSIONER OF INCOME- TAX (APPEALS)-XI, AHMEDABAD IN APPEAL NO. CIT(A)-XI /613/08-09 FOR THE ASSESSMENT YEAR 2006-07. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME TAX (A) XI, AH MEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE U /S.69 OF RS.25,00,000/- ON ACCOUNT OF UNEXPLAINED INCOME TOW ARDS INCREASE IN SHARE CAPITAL. ITA NO.2210/AHD/2009 A.Y.2006-07 DCIT, CIR-5, ABD V. M/S. PRADIP OVERSEAS LTD. PAGE 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FI LED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.7,71,75,891/- WHICH WA S PROCESSED U/S.143(1) OF THE INCOME-TAX ACT, 1961 AND SUBSEQUENTLY THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY AND ORDER WAS PASSED U/S.143( 3) OF THE ACT BY DETERMINING THE ASSESSEES TOTAL INCOME AT RS.7,96, 75,690/-. WHILE FINALIZING THE ASSESSMENT THE ASSESSING OFFICER HAS MADE ADDIT ION OF RS.25 LAKH ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S.69 OF THE ACT . DURING THE YEAR UNDER APPEAL THE ASSESSEE HAD ISSUED ONE LAKH EQUITY SHAR ES OF RS.10/- AT A PREMIUM OF RS.15/- IN THE NAME OF NOVAS COMMERCIAL PVT. LTD., KOLKATA. ACCORDING TO ASSESSING OFFICER THE TRANSACTION APPE ARED TO BE IN THE NATURE OF ACCOMMODATION ENTRY. THEREFORE, AFTER DISCUSSING TH E ISSUE AT LENGTH IN THE ASSESSMENT ORDER THE AO TREATED THIS INVESTMENT AS UNEXPLAINED AND ADDED THE SAME TO THE TOTAL INCOME DECLARED BY THE ASSESS EE U/S.69 OF THE ACT. 4. BEFORE LD. CIT(APPEALS) ASSESSEE FILED WRITTEN S UBMISSION WHICH HAS BEEN REPRODUCED BY LD. CIT(APPEALS) IN HIS ORDER FR OM PAGE 2 TO 11. IN THIS SUBMISSION, ASSESSEE HAS PLACED RELIANCE ON AS MANY AS 19 DECISIONS OF VARIOUS HONBLE HIGH COURTS. AFTER TAKING INTO CONS IDERATION THIS SUBMISSION OF THE ASSESSEE LD. CIT(A) GAVE RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER:- THE SUBMISSIONS MADE BY THE A.R OF THE APPELLANT H AVE BEEN PERUSED. THE DECISIONS REFERRED AS ABOVE, WHICH ARE RELIED U PON BY THE A.R OF THE APPELLANT AND THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAVE ALSO BEEN EXAMINED. 3.1.2. AS IT COULD BE SEEN FROM THE DECISIONS OF TH E HONOURABLE COURTS AS CITED ABOVE THAT THE APPELLANT SHOULD PRIMARILY ESTABLISH THE IDENTITY OF THE SHAREHOLDERS, GENUINENESS OF THE TRANSACTION , EXISTENCE OF THE SHAREHOLDERS AND CREDITWORTHINESS OF THE SHAREHOLDE RS. IN THIS CASE THE APPELLANT HAS PRODUCED ALL THE RELEVANT DETAILS WHI CH SUPPORTS THE GENUINENESS OF THE TRANSACTION\S AND IDENTITY OF TH E SHAREHOLDERS. THEREFORE, IN MY VIEW MAKING AN ADDITION TOWARDS UN EXPLAINED SHARES ITA NO.2210/AHD/2009 A.Y.2006-07 DCIT, CIR-5, ABD V. M/S. PRADIP OVERSEAS LTD. PAGE 3 INVESTMENT U/S.69 OF I.T. ACT IS NOT WARRANTED. ACC ORDINGLY, THE GROUNDS OF APPEAL PERTAINING TO THE ABOVE ADDITION ARE ALLO WED. SINCE THE LD. CIT(APPEALS) HAS GIVEN RELIEF TO THE ASSESSEE FOLLOWING THE RATIO AS LAID DOWN BY VARIOUS COURTS ON THE ISSUE AND NO CONTRARY DECISION WAS CITED BY THE REVENUE AT THE TIME OF HEARING BEFORE US, WE FIND NO NEED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(APPEALS) AND THE S AME IS HEREBY UPHELD. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30/06/2011 SD/- SD/- (A.N.PHAUJA) (D.K. TYAGI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 30/06/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD