ITO, New Delhi V. M/s Vishakha Infotech Ltd., Delhi

ITA 2327/DEL/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6974 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 20-10-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 29-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Assessee Lawyers: S KRISHNAN
• Keywords: Onus to prove
• Section: 195; 207; 264; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.D. RANJAN ITA NO. 2327(DEL)2009 ASSESSMENT YEAR: 2004-05 INCOME TAX OFFICER, M/S. VISHAKHA INFOTECH LTD. WARD 17(4),NEW DELHI. V. 308,LUSA TOWER, AZAD PUR, DELHI-33. (APPELLANT) (RESPONDENT) APPELLANT BY: MRS. ANUSHA KHURANA, SR. DR RESPONDENT BY: SHRI S. KRISHNAN, ADV OCATE ORDER PER A.D. JAIN, J.M . THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2004-05 CHALLENGING THE DELETION OF THE ADDITION OF ` 11,22,000/- MADE UNDER SECTION 68 OF THE INCOME TAX ACT. 2. THE ASSESSEE PUBLIC LIMITED COMPANY CARRIES ON THE BUSINESS OF DEALING IN SECURITIES AND FINANCE BUSINESS. THE A O RECEIVED INFORMATION FROM THE INVESTIGATION WING OF THE DEPARTMENT THAT THE COMPANY CONTRIBUTED TOWARDS SHARE APPLICATION MONEY WAS INVOLVED IN PROVIDING A CCOMMODATION ENTRIES. ACTION U/S 148 OF THE I.T. ACT WAS INITIATED. THE SHARE APPLICATION MONEY WAS ITA 2327(DEL)09 2 DISBELIEVED AND THE ADDITION WAS MADE. THE LD. CI T(A) HAVING DELETED THE ADDITION BY VIRTUE OF THE ORDER UNDER APPEAL, THE D EPARTMENT IS BEFORE US. 3. CHALLENGING THE ORDER OF THE LD. CIT(A), THE LD . DR HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION, WHEN THE ASSESSEE DID NOT DISCHARGE ITS ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION, THE IDENTITY AND THE CREDIT WORTHINESS OF THE CREDITOR PARTIES. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OT HER HAND, HAS STRONGLY SUPPORTED THE IMPUGNED ORDER. BESIDES, IT HAS BEE N CONTENDED THAT IN SIMILAR CIRCUMSTANCES, IN THE ASSESSEES CASE FOR THE ASSES SMENT YEARS 2001-02 AND 2002- 03, THE TRIBUNAL, VIDE ITS ORDER DATED 6.8.2009 (CO PY PLACED ON RECORD), IN ITA NOS. 2226 & 2227(DEL)2009 HAS DISMISSED THE DEPARTM ENTS APPEALS ON A SIMILAR ISSUE. 5. THE LEARNED CIT(A), WHILE DELETING THE ADDITION , IT IS SEEN, OBSERVED, INTER ALIA, THAT THE ASSESSEE HAD FILED COPIES OF T HE INCOME TAX RETURN ACKNOWLEDGEMENT, PROFIT AND LOSS ACCOUNT AND BALANC E SHEET. THERE WERE TWO PARTIES. M/S. SRS VIJAY SALES PVT. LTD. AND M/S. DI VISION TRADING PVT. LTD. AMOUNTS OF ` 1 LAKH EACH WERE ASCRIBED TO THEM. THE ADDRESS OF SRS VI JAY SALES PVT. LTD. WAS GIVEN AS KP 264 MAURYA ENCLAVE, PITAM PURA, DELHI. THE ADDRESS OF DIVISION TRADING PVT. LTD. WAS GIVEN AS 320 KUCHA GHASI RAM, CHANDNI CHOWK, DELHI. THE PAN OF SRS VIJAY SALES PVT. LTD. WAS GIVEN AS ITA 2327(DEL)09 3 AAACS 4070 R. ITS DATE OF INCORPORATION WITH WARD 9(2) WAS GIVEN AS 7.11.94. THE PAN OF DIVISION TRADING PVT. LTD. WAS GIVEN AS AABCD 2582 AND ITS DATE OF INCORPORATION WITH WARD 10(3) WAS STATED TO BE 1 .8.96. 6. IT WAS OBSERVED BY THE LD. CIT(A) THAT THE AO H AD NOT VERIFIED THESE DETAILS EITHER BY WAY OF ENQUIRY, OR BY VERIFICATIO N OF INCOME TAX RECORDS. THESE FACTS WERE NOT CONTROVERTED BY THE AO. THE ASSESS EE WAS FOUND TO HAVE DISCHARGED ITS BURDEN OF PROOF BY PROVIDING BASIC D ETAILS WHICH WERE REQUIRED FOR VERIFICATION TO FULFILL THE CONDITIONS PROVING THE IDENTITY AND CREDIT WORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS, AS REQUIRED U/S 68 OF THE I.T. ACT. THE LD. CIT(A) RELIED ON CIT V. LOVELY EXPO RTS (P)LTD. 216 CTR 195(SC) AND CIT V. DIVINE LEASING & FINANCE LTD. 207 CTR 38(DEL), BESIDES NUMEROUS OTHER DECISIONS. 7. IN CIT V. LOVELY EXPORTS (P) LTD. 216 CTR 195 (SC), THE HONBLE APEX COURT HAS HELD THAT IF THE SHARE APPLICATION M ONEY IS RECEIVED BY A COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GI VEN TO THE AO, THE DEPARTMENT IS FREE TO PROCEED TO RE-OPEN THEIR INDI VIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE RECORDED AS T HE UNDISCLOSED INCOME OF THE COMPANY. ITA 2327(DEL)09 4 8. THE ABOVE ARE ALSO THE FINDINGS OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2001-02 AND 2002-03 (SUPR A). 9. THE FACTS FOR THE YEAR UNDER CONSIDERATION ARE IN PARI MATERIA WITH THOSE PRESENT BEFORE THE TRIBUNAL FOR ASSESSMENT YEARS 20 01-02 AND 2002-03. 10. IN VIEW OF THE ABOVE, FINDING NO ERROR WHATSOE VER WITH THE ORDER PASSED BY THE LD. CIT(A), WE HEREBY CONFIRM THE SAME, REJE CTING THE GRIEVANCE RAISED BY THE DEPARTMENT. 11. IN THE RESULT, THE APPEAL FILED BY THE DEPART MENT STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.10.2010. SD/- SD/- (K.D. RANJAN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20.10.2010 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR