ITO, New Delhi V. M/s. Unexo Laboratories Pvt. Ltd, New Delhi

ITA 2779/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9698 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 08-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R PRASAD
• Assessee Lawyers: RANO JAINV MOHAN
• Keywords: Share purchase agreement
• Section: 68; 69

Judgement Text

ITA NO. 2779/DEL/09 A.Y. 2003-04 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2779/DEL/2009 A.Y. 2003-04 ITO, WARD-18(1) VS. M/S UNEXO LABORATORIE S PVT. LTD. NEW DELHI 9/42, GALI NO. 2, INDUSTRIAL AREA, SHALIMAR BAGH, DELHI [APPELLANT] (RESPONDENT) APPELLANT BY : SHRI R.R. PRASAD, SR. DR RESPONDENT BY : MS. RANO JAIN/ V. MOHAN, CA ORDER PER SHAMIM YAHYA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDERS OF THE CIT(A) DATED 03.03.2009 FOR THE ASSESSMENT YEARS 2003-04. 2. THE ISSUE RAISED IN THE APPEAL IS THAT THE CIT( A) HAS ERRED IN DELETING THE ADDITION OF RS. 9,01,440/-. 3. IN THIS CASE THE ASSESSEE IS A PRIVATE LIMITED C OMPANY. DURING THE YEAR THE COMPANY HAS ACCEPTED SHARE APPLICATION MONEY & ALLO TTED SHARE. IN THE ASSESSMENT THE ASSESSING OFFICER HAS NOTED THAT ASSESSEE WAS ASKED TO FILE THE ORIGINAL CONFIRMATION FORM PARTIES WHO CONTRIBUTED THE SHARE MONEY, BUT N ECESSARY CONFIRMATION WAS NOT FILED, NOR THE PARTIES WERE PRODUCED. LETTERS WER E ISSUED TO THE SHAREHOLDERS UNDER SECTION 133(6), BUT THE SAME WERE NOT COMPLIED. FR OM THIS THE ASSESSING OFFICER CAME ITA NO. 2779/DEL/09 A.Y. 2003-04 2 TO THE CONCLUSION THAT THE ASSESSEE HAS FILED TO PR OVE THE CREDITWORTHINESS AND IDENTIFICATION OF SHARE HOLDERS, HENCE, HE HELD THA T RS. 901440/- REPRESENTED THE ASSESSEES UNDISCLOSED INCOME AND HE ADDED THE SAME UNDER SECTION 69 OF THE IT ACT. 4. UPON ASSESSES APPEAL THE LD. CIT(A) NOTED THAT THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY FROM THE FOLLOWING COMPANIES:- I) M/S MAA SHAKUMBARI STONE CRUSHERS (P) LTD. - RS. 4 ,50,000 (7500 SHARES) II) M/S ONYX EXIM SALES LTD. RS. 4,50,000/- (7500 SHARES) 4.1 THE LD. CIT(A) NOTED THAT ASSESSEE HAS FILED SH ARE APPLICATION FORM, SHARE CERTIFICATES, BANK STATEMENTS AND SHARE APPLICANTS COPY OF INCOME TAX RETURN ACKNOWLEDGEMENT, BALANCE SHEET AS WELL AS ADDRESS. HENCE, CIT(A) HELD THAT THE ASSESSEE HAS DISCHARGED HIS ONUS. THE LD. CIT(A) F URTHER CONCLUDED THAT THE ASSESSING OFFICER MADE THE ADDITION ONLY ON THE GROUND THAT C ONFIRMATION WAS NOT PRODUCED. THE LD. CIT(A) WENT ON TO DELETE THE ADDITION. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. AS PER THE ADMITTED FACTS OF THE CASE, THE NAME, ADDRESS AND INCOME TA X DETAILS OF THE PERSONS CONTRIBUTING THE SHARE CAPITAL HAD BEEN GIVEN. 7. UNDER THE CIRCUMSTANCES, IN OUR OPINION, THE ASS ESSEE HAS DISCHARGED HIS ONUS, THE DETAILS ARE VERY MUCH AVAILABLE BEFORE THE ASSE SSING OFFICER AND HE CHOOSE NOT TO PROCEED FURTHER. UNDER THE CIRCUMSTANCES, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. IN THIS REGARD, HE ALSO PLACED RELIANCE UPON HONBLE SUPREME COURT OF INDIA DECISION IN THE CASE OF CIT VS. ORRISA CORPORATION PVT. LTD. 159 ITR 78 WHEREIN IT WAS HELD THAT IN CASE THE CREDITOR DOES NOT APPEAR IN R ESPONSE TO SUMMON ISSUED UNDER SECTION 131, NO ADVERSE INFERENCE CAN BE DRAWN. FU RTHER, IN THE CASE OF CIT VS. LOVELY ITA NO. 2779/DEL/09 A.Y. 2003-04 3 EXPORTS 216 CTR 195, THE QUESTION TO BE DECIDED BEF ORE THEIR LORDSHIPS OF APEX COURT WAS 'CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS U NDISCLOSED INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1961?'; THEIR LORDSHIPS HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLE GED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE W ITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 8. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRE CEDENT, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE LD. CIT (A). HENCE, WE UPHOLD THE SAME. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENU E IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2009. SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 4 TH SEPTEMBER, 2009 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES