Subhash Exhibitors Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 2569/DEL/2010

• Counselvise Citation: 256920114 RSA 2010
• Duration Of Justice: 4 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 11-03-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 31-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: YK KAPUR; KAANAN KAPUR ADV S
• Keywords: Accommodation entries
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G NEW DELHI BEFORE SHRI G.D.AGRAWAL, V.P. AND S MT. DIVA SINGH , J.M. ITA NO. 2569 /DEL/201 0 ASSESSMENT YEAR : 200 2 - 03 SUBHASH EXHIBITORS P.LTD. VS. ITO, WARD 9(2) E 50, PRASHANT VIHAR NEW DELHI NEW DELHI PAN: AAFCS 4041 K (APPELLANT) (RESPONDENT ) APPELLANT BY : - SH. YK KAPUR & SH KAANAN KAPUR, ADV S . RESPONDENT BY : - SH. B.R.R.KUMAR, CIT, D.R. O R D E R PER G.D.AGRAWAL, VICE PRESIDENT THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(APPEALS) - I, NEW DELHI DT. 03.03.2010 PERTAINING TO THE ASSE SSMENT YEAR 200 2 - 03 ON THE FOLLOWING GROUNDS. 1. THAT THE LD. CIT (APPEAL) HAS ERRED ON FACTS AND IN LAW IN SUSTAINING THE REOPENING OF THE ASSESSMENT U/S 148. 2. THAT THE LD. CIT (APPEAL) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITIONS OF RS. 6,8O,975/ - MADE BY THE A. O. ON ACCOUNT OF ALLEGED BOGUS ENTRIES RECEIVED TOWARDS SHARE CAPITAL/SHARE APPLICATION MONEY. 3. THAT THE LD. CIT (APPEAL) HAS NOT APPRECIATED THAT IN CASE OF SHARE APPLICATION MONEY, THE SUPREME COURT HAS HELD THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE RECIPIENT COMPANY WHERE THE SHAREHOLDERS ARE IDENTIFIED. 4. THAT THE LD. CIT (APPEAL) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITIONS OF RS. 3,00,450 OUT OF RS. 6,8O,975/ - RELATED TO THE ALLEGED RECEIVED DEPOSITED IN BPO DESPITE CONFIRMI NG ON AFFIDAVIT THAT ASSESSEE DO NOT HAVE ANY SUCH BANK ACCOUNT. 5. THAT THE LD. CIT (APPEAL) HAS ERRED IN LAW ON FACTS AND IN UPHOLDING THE ADDITIONS OF RS. 1,00,150 OUT OF RS. 6,8O,975/ - RELATED TO THE ALLEGED AMOUNT RECEIVED FROM AMBA ALLOYS P. LTD. D ESPITE THAT ASSESSEE HAS RECEIVED THE SAME ONLY ONCE. ITA NO. 2569/DEL/2010 A.Y. 2002 - 03 M/S SUBHASH EXHIBITORS P.LTD., N.DEL 2 6. THAT THE LD. CIT (APPEAL) HAS ERRED IN LAW ON FACTS AND IN UPHOLDING THE ADDITIONS OF RS. 6,8O,975/ - MADE BY THE A.O. ON ACCOUNT OF ALLEGED BOGUS ENTRIES RECEIVED TOWARDS SHARE CAPITAL/SHARE APPLIC ATION MONEY DESPITE THE FACT THAT THE TOTAL COMES TO RS. 6,50,975/ - ONLY AS PER THE REASONS PROVIDED. 7. THAT THE IMPUGNED APPELLATE ORDER IS ARBITRARY, ILLEGAL, BAD IN LAW AND IN VIOLATION OF RUDIMENTARY PRINCIPLES OF CONTEMPORARY JURISPRUDENCE. 2. AT THE TIME OF HEARING BEFORE US IT WAS POINTED OUT BY THE LD.COUNSEL THAT THE ASSESSMENT HAS BEEN REOPENED VIDE NOTICE U/S 148 DATED 19 TH MARCH,2009. HE STATED THAT THE ASSESSMENT HAS BEEN REOPENED ON THE BASIS OF SOME INFORMATION RECEIVED FROM DIT (INVE STIGATIONS) AS PER WHICH IT WAS ALLEGED THAT THE ASSESSEE WAS BENEFICIARY OF BOGUS ACCOMMODATION ENTRIES. THE A.O. SIMPLY RELIED UPON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING WITHOUT ANY APPLICATION OF MIND. HE REFERRED TO THE REASONS RECORDE D COPY OF WHICH IS PLACED AT PAGE 16 OF ASSESSEE S PAPER BOOK. HE POINTED OUT THAT AT ITEM NO.4 THE NAME OF THE BANK IS MENTIONED AS B P O. HE STATED THAT THE ASSESSEE DOES NOT HAVE ANY BANK ACCOUNT WITH ANY BANK KNOWN AS BPO. THE ONLY BANK ACCOUNT OF THE ASSESSEE IS WITH BANK OF BARODA I.E. BOB. HE ALSO POINTED OUT THAT AT ITEM NO.3 IT IS MENTIONED THAT ASSESSEE HAS RECEIVED A SUM OF RS.1,00,150/ - FROM AMBA ALLOYS PVT.LTD. THAT NO SUCH AMOUNT IS EVER RECEIVED BY THE ASSESSEE FROM AMBA ALLOYS PVT.LTD. HE THEREFORE SUBMITTED THAT IT IS A CASE OF NON APPLICATION OF MIND BY THE AO AND THEREFORE THE NOTICE ISSUED U/S 148 IS LIABLE TO BE QUASHED. HE FURTHER STATED THAT THE TOTAL ADDITION MADE BY THE A.O. IS ONLY RS.6,80,975/ - AND THE TWO ITEMS WHICH HAD NOT PERTAINED TO THE ASSESSEE ARE RS.3,00,450 + RS.1,00,150. THEREFORE IF THESE TWO AMOUNTS ARE EXCLUDED, THE ADDITION WOULD BE NEGLIGIBLE AMOUNT WHICH WOULD BE LESS THAN RS.3 LAKHS. THOUGH THE NOTICES ISSUED U/S 148 IS BAD IN LAW AND MORE OVER THE ASSESSEE IS ABLE TO EXPLAIN EACH AND EVERY CREDIT IN ITS BOOKS OF ACCOUNTS AND NO CREDIT IS IN THE NATURE OF ACCOMMODATION ENTRY, DUE TO SMALLNESS OF THE AMOUNT THE ASSESSEE WOULD BE SATISFIED IF THE ADDITION OF RS.4,00,600 (3,00,450 + 1,00,150) IS EXCLUDED. HE AL SO STATED THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE REPEATEDLY POINTED OUT THAT THESE TWO ALLEGED ITA NO. 2569/DEL/2010 A.Y. 2002 - 03 M/S SUBHASH EXHIBITORS P.LTD., N.DEL 3 CREDITS DO NOT PERTAIN TO THE ASSESSEE. IN THIS REGARDS HE REFERRED TO ASSESSEE S REPLY BEFORE THE AO A COPY OF WHICH IS PLACED AT PAGES 18 TO 24 O F THE ASSESSEE S PAPER BOOK. 2.1. LD.D.R. ON THE OTHER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 3. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. SINCE AT THE END THE ASSESSEE HAS NOT PRESSED HIS GROUND AGAINST THE VALIDITY OF REOPENING OF THE ASSESSMENT OR OTHER ADDITIONS, WE HAVE CONSIDERED THE ASSESSEE S REQUEST FOR DELETION OF THE ADDITION OF RS.4,00,600/ - . HOWEVER, WE MAY CLARIFY THAT WE AC CEPT THE ASSESSEE S CONTENTION THAT IF AT ALL THE NEED ARISES I.E. IF THE REVENUE LEVY THE PENALTY IN RESPECT OF BALANCE ADDITION THE ASSESSEE WOULD BE AT LIBERTY TO EXPLAIN THAT EACH AND EVERY CREDIT IS FULLY EXPLAINED. WITH REGARD TO CREDIT ON THESE TW O ITEMS WE FIND THAT THE ASSESSEE IN ITS REPLY BEFORE THE A.O. MENTIONED AS UNDER. 4. AS PER OUR RECORD WE HAVE NOT RECEIVED THE SHARE APPLICATION MONEY/SHARE CAPITAL FROM THE FOLLOWING AS PER INFORMATION FURNISHED BY YOUR HONOUR. 1 . DT. 2.8.2001 AMBA ALLOYS P.LTD. A/C NO.3341 RS.100150/ - 2 . DT. 7.9.2001 GRS INVESTMENT & SERVICES A/C NO.9337 RS. 3,00,450/ - . 4. WE FIND THAT IN THE ASSESSMENT ORDER THE A.O. HAS NOT GIVEN ANY DETAILS WITH REGARD TO ANY CREDIT. HE SIMPLY MADE ADDITION OF RS.6,80,975/ - ON T HE BASIS OF INFORMATION RECEIVED FROM THE DIT, INVESTIGATION WING. HE HAS NOT EVEN MENTIONED THE NAME OF THE PERSONS FROM WHOM THE AMOUNT WAS RECEIVED AND HOW IT IS AN ACCOMMODATION ENTRY. HE HAS NOT EVEN DISCUSSED THE NATURE OF THE CREDIT IN THE ASSESSE E S BOOKS OF ACCOUNTS. HOWEVER THE LD.COUNSEL FOR THE ASSESSEE HAS FAIRLY STATED THAT HE WILL BE SATISFIED IF THE ADDITION TO THE EXTENT OF RS.4,00,600/ - (3,00,450 + 1,00,150) IS DELETED. WE HEREBY DELETE THIS ADDITION OF RS. 4,00,600 AND SUSTAIN THE BAL ANCE ADDITION OF RS.2,80,375/ - (6,80,975 4,00,600). ITA NO. 2569/DEL/2010 A.Y. 2002 - 03 M/S SUBHASH EXHIBITORS P.LTD., N.DEL 4 5. IN THE RESULT ASSESSEE S APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2015. SD/ - SD/ - ( DIVA SINGH ) ( G.D.AGRAWAL ) JUDICIAL MEMBER VICE PRESIDENT DATED: THE 31 ST MARCH, 2015 *MANGA COPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR