Pravin Spintex Pvt. Ltd., Dist.Mehsana V. The ACIT.,Mehsana Circle, Mehsana

ITA 234/AHD/2007

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8890 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-09-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 12-01-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GOVIND SINGHAL
• Assessee Lawyers: S V AGARWAL
• Keywords: Agreed addition; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI T.K.SHARMA, JUDICIAL MEMBER AND SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 16/09/09 DRAFTED ON: 23/09/ 09 ITA NO.234/AHD/2007 ASSESSMENT YEAR : 2000-01 PRAVIN SPINTEX PVT.LTD. VISNAGAR-SAVALA HIGHWAY VISNAGAR DIST.MEHSANA VS. THE ACIT MEHSANA CIRCLE MEHSANA PAN/GIR NO. : AACCB 1283 N (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S.V. AGARWAL, CA RESPONDENT BY: SHRI GOVIND SINGHAL, DR O R D E R PER D.C.AGRAWAL , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-XXI, AHMEDABAD DATED 29/09/20 04 PASSED FOR ASSESSMENT YEAR 2000-01, BY RAISING FOLLOWING GRO UNDS:- (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN CONFIRMING DISALLOWANCE OF RS.2,22,000/- BEING D EPOSIT RECEIVED TOWARDS SHARE CAPITAL. IN AS MUCH AS THE ASSESSEE HAD NO KNOWLEDGE OF INCOME-TAX PROVISIONS AND ACTED ON ADVICE OF LOCAL C.A. AND AGREE FOR ADDITION. IN F ACT, OUT OF SEVEN SHARE HOLDERS, THREE SHARE-HOLDERS HAVE SUBSC RIBED BY A/C. PAYEE CHEQUES. ITA NO .234/AHD/2007 PRAVIN SPINTEX PVT.LTD. VS. ACIT ASST.YEAR -2000-01 - 2 - (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEA RNED CIT(A) OUGHT NOT TO HAVE UPHELD THE ORDER OF THE AS SESSING OFFICER. (3) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT( A) MAY BE SET ASIDE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A TEXTILE YARN MANUFACTURING COMPANY. DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS R ECEIVED SHARE CAPITAL IN CASH AS WELL AS BY CHEQUE FROM NUMBER OF PERSONS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH CONFIRMATIONS IN RESPECT OF THE SHARE CAPITAL. THOUGH THE ASSESSEE SUBMITTED CERTAIN CO NFIRMATIONS IN RESPECT OF CASH RECEIVED FROM AGRICULTURISTS, THE ASSESSING OFFICER WAS NOT SATISFIED. HE ISSUED NOTICE U/S.133(6) OF THE I.T. ACT, 1961. THE LETTERS SENT TO THE FOLLOWING SEVEN PERSONS WERE RECEIVED U NSERVED. SL.NO(S) NAME OF THE PERSON(S) AMOUNT (RS.) 1. SHRI ARVIND P.PATEL 40,000/- 2. SHRI GANESH D.CHAUDHARY 17,000/- 3. SHRI HIRABEN P.PATEL 60,000/- 4. SHRI LESJABJAO BCHAUDHARY 18,000/- 5. SHRI KANTIBHAI MAHESHBHAI 19,000/- ITA NO .234/AHD/2007 PRAVIN SPINTEX PVT.LTD. VS. ACIT ASST.YEAR -2000-01 - 3 - 6. SHRI PRAHLADBHAI M.PATEL 50,000/- 7. SHRI SUBHIL A.PATEL 18,000/- TOTAL 2,22,000/- 3. ACCORDINGLY, THE ASSESSING OFFICER HELD THAT SH ARE CAPITAL IS NOT PROVED. IT SEEMS THAT THE ASSESSEE ALSO AGREED TO TREAT RS.2,20,000/- AS COMPANYS INCOME. THEREFORE, HE MADE THE ADDITION OF RS.2,22,000/-. 4. BEFORE THE LEARNED CIT(APPEALS), IT WAS CLAIMED THAT THE OBSERVATION OF THE ASSESSING OFFICER THAT THE ASSES SEE HAS AGREED BEFORE THE ASSESSING OFFICER TO TREAT THE SHARE APPLICATIO N MONEY RECEIVED FROM SEVEN PERSONS TOTALING TO RS.2,22,000/- AS INCOME O F THE ASSESSEE- COMPANY FROM UNDISCLOSED SOURCES WAS NOT CORRECT. ACCORDINGLY, THE LEARNED CIT(APPEALS) CALLED FOR THE REMAND REPORT I N WHICH THE ASSESSING OFFICER ANNEXED THEREWITH PAGE NO.4 OF TH E ORDER-SHEET DATED 31/02/2002 SHOWING THE SIGNATURE OF THE ASSESSEE TH EREON ON THE ORDER- SHEET. THE LEARNED CIT(APPEALS) ACCORDINGLY CONFI RMED THE ADDITION. 5. BEFORE US, IT IS CLAIMED THAT IT WAS THE COUNSEL OF THE ASSESSEE SHRI V.C.SHAH WHO HAD ADVISED SHRI CHANDRAKANT T.PATEL, THE DIRECTOR OF THE COMPANY TO AGREE TO THE ADDITION. THE ASSESSEE I S A TECHNOCRAT AND, ITA NO .234/AHD/2007 PRAVIN SPINTEX PVT.LTD. VS. ACIT ASST.YEAR -2000-01 - 4 - THEREFORE, HE DID NOT UNDERSTAND THE IMPLICATION OF THE SURRENDER. AN AFFIDAVIT DATED 05/08/2006 WAS FILED FROM SHRI CHAN DRAKANT T.PATEL TO THIS EFFECT. 6. AGAINST THIS, LEARNED DR SUBMITTED THAT AFFIDAVI T RETRACTING THE AGREED ADDITION WAS PREPARED ALMOST THREE AND A HAL F YEARS AFTER THE ASSESSMENT ORDER. NO SUCH PLEA WAS TAKEN BEFORE T HE LEARNED CIT(APPEALS), SO THAT HE COULD EXAMINE OR DIRECT TH E ASSESSING OFFICER TO EXAMINE SHRI V.C.SHAH. THERE IS NO AFFIDAVIT FROM SHRI V.C.SHAH THAT HE HAS SO ADVISED THE ASSESSEE. UNDER THESE CIRCUM STANCES, LEARNED DR SUBMITTED THAT APPEAL OF THE ASSESSEE SHOULD BE DIS MISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN OUR CONSIDERED VIEW, THERE IS NO CASE FOR INTERFERENCE WITH THE OR DER OF THE LEARNED CIT(APPEALS). THERE IS NO DOUBT THAT MONEY HAS BE EN RECEIVED IN CASH, THOUGH CLAIMED TO BE FROM SHARE-HOLDERS. THE ASSES SING OFFICER HAS PROPOSED ADDITION ONLY IN RESPECT OF THOSE CASES FR OM WHERE NOTICES ISSUED BY HIM HAVE RETURNED BACK UNSERVED. THUS, IDENTITY OF THE ITA NO .234/AHD/2007 PRAVIN SPINTEX PVT.LTD. VS. ACIT ASST.YEAR -2000-01 - 5 - SHARE-HOLDERS IS NOT ESTABLISHED. THE PLEA THAT SH RI V.C.SHAH, C.A., THE COUNSEL FOR THE ASSESSEE, HAD ADVISED THE ASSESSEE TO SURRENDER THIS AMOUNT AS INCOME OF THE COMPANY IS APPARENTLY AFTER -THOUGHT AND NO EVIDENCE IN SUPPORT OF IT HAS BEEN FILED. ONCE IDEN TITY OF SHARE-HOLDERS IS NOT PROVED AND MONEY IN ALL CASES HAVE NOT COME TH ROUGH BANKING CHANNELS, THE CLAIM OF THE ASSESSEE ABOUT GENUINENE SS OF THE SHARE APPLICATION MONEY CANNOT BE ACCEPTED. WE ACCORDI NGLY DECLINE TO INTERFERE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30/09/2009. SD/- SD/- ( T.K.SHARMA ) ( D.C.AGRAWAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 30 / 09 /2009 T.C. NAIR COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XXI, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD