ITO, New Delhi V. M/s. Yugant Travels Pvt. Ltd., New Delhi

ITA 24/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7164 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 02-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.24/DEL./2014 (ASSESSMENT YEAR : 2006-07) ITO, WARD 18 (4), VS. M/S. YUGANT TRAVELS PVT. LTD ., NEW DELHI. WZ 145, C 59, ARYA SAMAJ ROAD, UTTAM NAGAR, NEW DELHI 110 059. (PAN : AAACY2428H) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI SANJAY KUMAR, CIT DR DATE OF HEARING : 04.07.2016 DATE OF ORDER : 11.07.2016 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, INCOME-TAX OFFICER, WARD 18 (4), NE W DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILIN G THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 04.10.2013 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- XXI, NEW DELHI QUA THE ASSESSMENT YEAR 2006-07 ON THE GROUND S INTER ALIA THAT :- ITA NO.24/DEL./2014 2 (I) THE LD. CIT (A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN CANCELLING THE PENALTY OF RS.95,35,750/- IM POSED BY THE ADDL.CIT, RANGE 18, NEW DELHI U/S 271D OF TH E I.T. ACT. (II) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) ERRED IN IGNORING THE DECISION OF H ONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. SAMORA H OTELS PVT. LTD. (2012). (III) THE APPELLANT CRAVES, LEAVE OR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S ) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. BRIEFLY STATED, THE FACTS OF THIS CASE ARE : DU RING THE SCRUTINY PROCEEDINGS QUA ASSESSMENT YEAR 2006-07 COMPLETED U NDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT), IT WAS NOTICED THAT ASSESSEE HAD RECEIVED A SUM OF RS.1,00 ,35,750/- IN CASH WHICH WAS CLAIMED TO BE AGAINST SHARE CAPITAL OF RS.5,00,000/-, SHARE PREMIUM OF RS.36,00,000/- AND SHARE APPLICATION MONEY OF RS.59,35,750/-, OUT OF WHICH E XCEPT INITIAL SUBSCRIPTION TO THE SHARE CAPITAL OF RS.1,00,000/-, THERE WAS NO PREMIUM AND AS SUCH, THE BALANCE OF RS.99,35,750/- WAS TREATED AS UNEXPLAINED CASH CREDIT AND ADDED TO THE RETURNED I NCOME. ASSESSING OFFICER TREATED THE RECEIPT OF SHARE CAPI TAL, SHARE PREMIUM AND SHARE APPLICATION MONEY AMOUNTING TO ITA NO.24/DEL./2014 3 RS.1,00,35,750/- IN CASH AS CLEAR VIOLATION OF SECT ION 269SS AND SOUGHT TO INITIATE THE PENALTY PROCEEDINGS U/S 271D OF THE ACT. 3. SHOW-CAUSE NOTICE WAS ISSUED AND SMT. PREMLATA M ISHRA, CA/AR OF THE ASSESSEE PUT IN APPEARANCE AND FILED W RITTEN SUBMISSIONS. FINDING THE EXPLANATION FURNISHED BY THE ASSESSEE NOT TENABLE, AO CAME TO THE CONCLUSION THAT THE ASSESSE E HAS FAILED TO PROVE GENUINENESS AND CREDITWORTHINESS OF THE PARTI ES FROM WHOM HE HAS RECEIVED THE MONEY BY PRODUCING THEM, THE AM OUNT OF RS.1,00,35,750/- BEING CASH RECEIVED BY THE ASSESSE E COMPANY, CLAIMED TO BE SHARE CAPITAL, SHARE PREMIUM AND SHAR E APPLICATION MONEY IS ONLY A COVER UP EXPLANATION FOR CIRCUMVENT ING THE PROVISIONS OF SECTION 269SS AND HELD THE ASSESSEE T O BE LIABLE FOR PENALTY OF RS.95,35,750/- BEING THE AMOUNT RECEIVED/TAKEN/ACCEPTED IN CASH. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING THE APPEAL WHO HAS ACCEPTED THE APPEAL AND C ANCELLED THE PENALTY LEVIED BY THE AO. FEELING AGGRIEVED, THE R EVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PR ESENT APPEAL. 5. ASSESSEE HAS NOT PREFERRED TO PUT IN APPEARANCE DESPITE ISSUANCE OF THE NOTICE OF HEARING FOR 11.04.2016 AN D 04.07.2016 AND CONSEQUENTLY, WE PROCEEDED TO DECIDE THE PRESEN T APPEAL WITH ITA NO.24/DEL./2014 4 THE ASSISTANCE OF THE LD. DR AS WELL AS ON THE BASI S OF DOCUMENTS AVAILABLE ON THE FILE. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. LD. DR, CHALLENGING THE IMPUGNED ORDER RELIED UP ON THE ASSESSMENT ORDER AS WELL AS PENALTY ORDER PASSED BY THE AO. 8. UNDISPUTEDLY, ASSESSEE HAS RECEIVED AN AMOUNT OF RS.1,00,35,750/- AGAINST THE SHARE CAPITAL INCLUDIN G SHARE APPLICATION MONEY AND SHARE PREMIUM ACCOUNT; THAT T HE ADDITION MADE BY THE AO ON THIS ACCOUNT WAS DELETED BY THE C IT (A), HOWEVER, SAME WAS SET ASIDE AND RESTORED TO THE AO BY THE TRIBUNAL; THAT IN THE FRESH ASSESSMENT MADE BY THE AO, HE HAS ACCEPTED THE SHARE APPLICATION MONEY OF RS.54,70,00 0/- AS EXPLAINED ONE AND BALANCE AMOUNT OF RS.44,65,750/- AS UNEXPLAINED AMOUNT. 9. TO ADJUDICATE THE CONTROVERSY AT HAND, PROVISION S CONTAINED U/S 269SS OF THE ACT ARE REPRODUCED FOR FACILITY OF REFERENCE AS UNDER :- 269SS. NO PERSON SHALL, AFTER THE 30TH DAY OF JUNE , 1984, TAKE OR ACCEPT FROM ANY OTHER PERSON (HEREAFTER IN THIS SECTION REFERRED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT ITA NO.24/DEL./2014 5 OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUN T PAYEE BANK DRAFT IF, ( A ) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR THE AGGREGA TE AMOUNT OF SUCH LOAN AND DEPOSIT ; OR ( B ) ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN OR D EPOSIT, ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED EARLIER BY SU CH PERSON FROM THE DEPOSITOR IS REMAINING UNPAID (WHET HER REPAYMENT HAS FALLEN DUE OR NOT), THE AMOUNT OR THE AGGREGATE AMOUNT REMAINING UNPAID ; OR ( C ) THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE ( A ) TOGETHER WITH THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE ( B ), IS [TWENTY] THOUSAND RUPEES OR MORE : PROVIDED THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED FROM, OR A NY LOAN OR DEPOSIT TAKEN OR ACCEPTED BY, ( A ) GOVERNMENT ; ( B ) ANY BANKING COMPANY, POST OFFICE SAVINGS BANK OR CO- OPERATIVE BANK ; ( C ) ANY CORPORATION ESTABLISHED BY A CENTRAL, STATE O R PROVINCIAL ACT ; ( D ) ANY GOVERNMENT COMPANY AS DEFINED IN SECTION 617 OF THE COMPANIES ACT, 1956 (1 OF 1956) ; ( E ) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CL ASS OF INSTITUTIONS, ASSOCIATIONS OR BODIES WHICH THE CENT RAL GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITI NG, NOTIFY IN THIS BEHALF IN THE OFFICIAL GAZETTE: [PROVIDED FURTHER THAT THE PROVISIONS OF THIS SECTI ON SHALL NOT APPLY TO ANY LOAN OR DEPOSIT WHERE THE PERSON F ROM WHOM THE LOAN OR DEPOSIT IS TAKEN OR ACCEPTED AND T HE PERSON BY WHOM THE LOAN OR DEPOSIT IS TAKEN OR ACCE PTED ARE BOTH HAVING AGRICULTURAL INCOME AND NEITHER OF THEM HAS ANY INCOME CHARGEABLE TO TAX UNDER THIS ACT.] EXPLANATION. FOR THE PURPOSES OF THIS SECTION, ITA NO.24/DEL./2014 6 [( I ) 'BANKING COMPANY' MEANS A COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949), APPLIES AND INCLUDES ANY BANK OR BANKING INSTITUTION REFERRED T O IN SECTION 51 OF THAT ACT ;] ( II ) 'CO-OPERATIVE BANK' SHALL HAVE THE MEANING ASSIGN ED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) ; ( III ) 'LOAN OR DEPOSIT' MEANS LOAN OR DEPOSIT OF MONEY. ] 10. BARE PERUSAL OF THE PROVISIONS CONTAINED U/S 26 9SS, PARTICULARLY EXPLANATION TO THE SECTION GOES TO PRO VE THAT LOAN OR DEPOSIT MEANS LOAN OR DEPOSIT OF MONEY MEANING THE REBY RECEIPT OF CASH AS SHARE APPLICATION MONEY IS NEITHER A LOA N NOR DEPOSIT AND AS SUCH, PROVISIONS CONTAINED U/S 269SS ARE NOT ATT RACTED. 11. HONBLE JURISDICTIONAL HIGH COURT IN CASE CITED AS COMMISSIONER OF INCOME TAX VS. I.P. INDIA P. LTD. [ 2012] 343 ITR 353 (DELHI) WHILE EXAMINING THE IDENTICAL ISSUE HAS HELD THAT SHARE APPLICATION MONEY IS NOT A DEPOSIT WITHIN T HE MEANING OF SECTION 269SS NOR IT IS A LOAN BY ANY STRETCH OF IMAGINATION AND AS SUCH, PENALTY CANNOT BE IMPOSED U/S 271D OF THE ACT. SO, FINDING NO INFIRMITY OR ILLEGALITY IN THE FINDINGS RETURNED BY THE LD. CIT (A), WE HEREBY DISMISS THE PRESENT APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED IN OPEN COURT ON THIS 11 TH DAY OF JULY, 2016. SD/- SD/- (N.K. SAINI) (KULDIP SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 11 TH DAY OF JULY, 2016/TS ITA NO.24/DEL./2014 7 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.