Singla Forging Pvt. Ltd., Rohtak V. DCIT, Rohtak

ITA 2785/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8256 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 16-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P V GUPTA
• Keywords: Unexplained cash credit; Share purchase agreement
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.NO.2785/DEL./2016 ASSESSMENT YEAR 2012-2013 M/S. SINGLA FORGING PVT. LTD., 165, IDC, HISSAR ROAD, ROHTAK. PAN AABCS8666E VS. THE DCIT, ROHTAK CIRCLE, INCOME TAX OFFICE, ROHTAK. HARYANA. (RESPONDENT) FOR ASSESSEE : SHRI NAVIN GUPTA, ADVOCATE. FOR REVENUE : SHRI P.V. GUPTA, SR. D.R. DATE OF HEARING : 15.04.2019 DATE OF PRONOUNCEMENT : 15.04.2019 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), ROHTAK, DATED 11.03.2016, FOR THE A.Y. 2012-2013, CHALLENGING THE ADDITION OF RS.45 LAKHS UNDER SECTION 68 OF THE I.T. ACT, 1961, TREATING THE SHARE APPLICATION MONEY AS UNEXPLAINED CASH CREDIT. 2 ITA.NO.2785/DEL./2016 M/S. SINGLA FORGING PVT. LTD., ROHTAK. 2. THE A.O. NOTED THAT ASSESSEE COMPANY HAS FILED THE RETURN OF INCOME DECLARING INCOME OF RS.63,75,980/-. DURING THE YEAR, IT WAS SEEN THAT ASSESSEE HAD RECEIVED SHARE APPLICATION MONEY WORTH RS.2.26 CRORES FROM SHARE APPLICATIONS. OUT OF THE SHARE APPLICANTS, IT WAS SEEN THAT TWO OF THE SHARE APPLICANTS WERE LOCATED IN KOLKATA WHO HAVE MADE INVESTMENT IN ASSESSEE COMPANY AND ALSO PAID HUGE PREMIUM PER SHARE. BOTH OF THEM HAVE INTRODUCED RS.45 LAKHS. THE A.O. NOTED THAT IN RESPECT OF THE INVESTOR M/S. DREAMLAND PLAZA LTD., STATEMENT OF SHRI PRAVEEN AGGARWAL WAS RECORDED UNDER SECTION 132(4) BY DDIT (INV.) KOLKATA, IN WHICH HE HAD ADMITTED THAT HE IS AN ACCOMMODATION ENTRY PROVIDER. IT WAS NOT RUNNING ANY GENUINE BUSINESS ACTIVITY AND WAS PROVIDING BOGUS ENTRIES IN LIEU OF EARNING SMALL AMOUNT OF COMMISSION AND SAME IS EVIDENT FROM THE STATEMENT RECORDED IN WHICH HE HAD ADMITTED THAT HE HAD PROVIDED BOGUS BILLS, BOGUS INVESTMENTS IN SHARES ETC. THE A.O. HAS SHOWN HIS STATEMENT TO THE ASSESSEE AND ASKED THE ASSESSEE TO PRODUCE BOTH THE PARTIES LOCATED AT KOLKATA NAMELY M/S. 3 ITA.NO.2785/DEL./2016 M/S. SINGLA FORGING PVT. LTD., ROHTAK. PUSHPADANT INFRASTRUCTURE LTD., AND M/S. DREMLAND PLAZA LTD, WITH THEIR BANK STATEMENTS, COPY OF THE SHARE CERTIFICATES, ALLOTMENT LETTER, COPIES OF THE COMMUNICATION MADE ETC. THE ASSESSEE, HOWEVER, DID NOT PRODUCE BOTH THE ABOVE INVESTORS FOR VERIFICATION OF THE INVESTMENTS MADE BY THEM. THE A.O, THEREFORE, TREATED THE SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE I.T. ACT, 1961 AND MADE ADDITION OF RS.45 LAKHS. 3. THE ASSESSEE CHALLENGED BOTH THE ADDITIONS BEFORE THE LD. CIT(A). THE WRITTEN SUBMISSIONS OF THE ASSESSEE IS REPRODUCED IN THE APPELLATE ORDER. THE LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE A.O, IN WHICH THE A.O. HAS REPORTED THAT ASSESSEE WAS CONFRONTED WITH THE REPORT OF INVESTIGATION WING AND STATEMENT RECORDED UNDER SECTION 132(4) WITH REGARD TO M/S. DREAMLAND PLAZA LTD. THE ASSESSEE WAS ALSO CONFRONTED THAT STATEMENT RECORDED UNDER SECTION 132(4) OF THE INVESTOR M/S. PUSHPADANT INFRASTRUCTURE LTD., THE ASSESSEE, HOWEVER, DID NOT PRODUCE ANY SUFFICIENT EVIDENCES AND WAS NOT ABLE TO REFUTE THE STATEMENTS IN THE ASSESSMENTS AND REMAND REPORT 4 ITA.NO.2785/DEL./2016 M/S. SINGLA FORGING PVT. LTD., ROHTAK. PROCEEDINGS. THE LD. CIT(A), THEREFORE, NOTED THAT EVEN AT APPELLATE STAGE ASSESSEE IS NOT ABLE TO PROVE THE GENUINENESS OF THE CREDIT IN THE MATTER. THE APPEAL OF ASSESSEE WAS ACCORDINGLY DISMISSED. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE MATTER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT BOTH THE INVESTORS ARE ASSESSED TO TAX AND ASSESSEE FILED THEIR CONFIRMATIONS AND AFFIDAVITS OF THE DIRECTORS OF THE INVESTOR COMPANIES. HE HAS SUBMITTED THAT A.O. ASKED THE ASSESSEE TO PRODUCE THE INVESTORS VIDE ORDER DATED 23.02.2015, BUT, ASSESSMENT ORDER WAS PASSED ON 24.02.2015 I.E., NEXT DAY, THEREFORE, NO SUFFICIENT TIME WAS GIVEN FOR PRODUCTION OF THE CREDITORS/INVESTORS. LEARNED COUNSEL FOR THE ASSESSEE, HOWEVER, SUBMITTED THAT ASSESSEE IS NOT IN A POSITION TO PRODUCE BOTH THE CREDITORS AT THIS STAGE FOR EXAMINATION BEFORE A.O. IN VIEW OF THE ABOVE FACTS, IT IS CLEAR THAT THE ASSESSEE HAS RECEIVED SHARE CAPITAL AND SHARE PREMIUM FROM TWO OF THE INVESTORS NAMELY M/S. PUSHPADANT INFRASTRUCTURE LTD., - RS.20 LAKHS AND M/S. DREMLAND PLAZA 5 ITA.NO.2785/DEL./2016 M/S. SINGLA FORGING PVT. LTD., ROHTAK. LTD., - RS.25 LAKHS, TOTALING TO RS.45 LAKHS. THE A.O. CONFRONTED THE STATEMENTS OF DIRECTORS RECORDED UNDER SECTION 132(4) BY INVESTIGATION WING, KOLKATA IN WHICH THEY HAVE ADMITTED TO HAVE PROVIDED BOGUS BILLS AND BOGUS ENTRIES ALONG WITH BOGUS INVESTMENTS IN SHARES ETC. THE ASSESSEE DID NOT REFUTE THEIR STATEMENTS AT ANY STAGE. THE ASSESSEE DID NOT PRODUCE BOTH THE INVESTORS BEFORE A.O. FOR VERIFICATION OF THE TRANSACTIONS. EVEN IF NO SUFFICIENT TIME WAS GIVEN BY THE A.O. FOR PRODUCTION OF BOTH THE INVESTORS AT ASSESSMENT STAGE BUT EQUALLY ASSESSEE DID NOT MAKE ANY ATTEMPT TO PRODUCE BOTH THE INVESTORS AT APPELLATE STAGE OR IN THE REMAND PROCEEDINGS BEFORE A.O. DURING THE COURSE OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE STATED THAT ASSESSEE IS NOT IN A POSITION TO PRODUCE BOTH THE DIRECTORS OF THE CREDITORS FOR EXAMINATION WHICH WOULD SHOW THAT ASSESSEE IS NOT IN A POSITION TO PRODUCE ANY OF THE DIRECTORS OF THE INVESTOR COMPANIES FOR EXAMINATION OF THE TRANSACTION IN QUESTION. THE ASSESSEE ALSO DID NOT PRODUCE BANK STATEMENTS OF BOTH THE INVESTOR COMPANIES AND BALANCE SHEET TO PROVE THEIR CREDITWORTHINESS. THESE FACTS, 6 ITA.NO.2785/DEL./2016 M/S. SINGLA FORGING PVT. LTD., ROHTAK. THEREFORE, CLEARLY SHOW THAT EVEN IF BOTH THE INVESTORS ARE ASSESSED TO TAX, IT WOULD MERELY PROVE THEIR IDENTITY, BUT, ASSESSEE FAILED TO PROVE THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THESE FACTS CLEARLY SHOW THAT BURDEN UPON ASSESSEE TO PROVE CREDITWORTHINESS OF INVESTORS AND GENUINENESS OF THE TRANSACTION HAVE NOT BEEN DISCHARGED TO THE SATISFACTION OF THE AUTHORITIES BELOW. IN THE ABSENCE OF ANY MATERIAL ON RECORD IN FAVOUR OF ASSESSEE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. WE, ACCORDINGLY, CONFIRM THE ORDERS OF THE AUTHORITIES BELOW AND APPEAL OF ASSESSEE IS DISMISSED. 5. IN THE RESULT, APPEAL OF ASSESSEE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 15 TH APRIL, 2019. VBP/- 7 ITA.NO.2785/DEL./2016 M/S. SINGLA FORGING PVT. LTD., ROHTAK. COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT A BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.