Gautam Jewels Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(2), Surat

ITA 2945/AHD/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6500 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 12-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 13-08-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S A BOHRA
• Assessee Lawyers: PAMIL H SHAH
• Keywords: Depreciation
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 12/05/2011 DRAFTED ON: 13 /05/2011 ITA NO.2945/AHD/2008 ASSESSMENT YEAR : 2005-06 GAUTAM JEWELS PVT.LTD. 254/A, SURAT SPECIAL ECONOMIC ZONE ROAD NO.4 GIDC SACHIN, SURAT VS. THE ITO WARD-1(2) SURAT PAN/GIR NO. : AACCG 0153 F ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI PAMIL H.SHAH RESPONDENT BY: SHRI S.A. BOHRA, SR. D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF THE LEARNED CIT(APPEALS) -I, SURAT DATED 24/06/2008 PASSED FOR ASSESSMENT YEAR 2005-06. 2. GROUND NO.1 READS AS UNDER: 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THE ADDITION OF RS.4,81,139/- ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY RECEIVED FROM T HREE PERSONS MADE BY THE A.O. U/S.68 OF THE ACT WITHOUT PROPER CONSIDERATION AND APPRECIATION OF THE FACTS, EVIDEN CES AND THE LEGAL POSITION. IN VIEW OF THE FACTS, SUBMISSIONS AND EVIDENCES FILED AS WELL AS LEGAL POSITION, THE IMPUGNED ADDIT ION OF RS.4,81,139/- REQUIRES TO BE DELETED. ITA NO. 2945/AH D/2008 GAUTAM JEWELS PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 2 - 2.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T.ACT DATED 30/11/ 2007 AND THE ISSUE INVOLVED AS PER THE GROUND REPRODUCED HEREINA BOVE THAT THE AO HAD NOTICED THAT ASSESSEE HAD SHOWN SHARE APPL ICATION MONEY OF RS.4,81,139/- DURING THE YEAR. CONSIDERING THE PROVISIONS OF SECTION 68 OF THE I.T. ACT, 1961 THE ASSESSEE WAS A SKED TO FURNISH THE CONFIRMATION, NAMES/ADDRESSES, PAN, MODE OF TRANSAC TION, NUMBER OF SHARES APPLIED AND ALLOTTED, ETC. THE PARTY-W ISE DETAILS AS DISCUSSED BY THE AUTHORIZED BELOW CAN BE SUMMARIZED AS UNDER:- (A) SMT. SEEMA MEHTA A SUM OF RS.83,339/- WAS RECEIVED AS SHARE APPLICAT ION MONEY. THE SAID AMOUNT WAS RECEIVED IN CASH IN TWO INSTALLMENTS. IT WAS INFORMED THAT SHE HAS FILED THE INCOME TAX RETURN DECLARING AN INCOME OF RS.68,837/- AND I N SUPPORT ACKNOWLEDGEMENT OF THE RETURN WAS FILED. SHE HAS A LSO FURNISHED A CONFIRMATION. (B) SHRI BHARTESH B. SURTI A SUM OF RS.2,47,800/- WAS IN RESPECT OF SHARE APPL ICATION MONEY. THE SAID AMOUNT WAS RECEIVED IN FIVE INSTAL LMENTS. HIS PERMANENT ACCOUNT NUMBER AND INCOME TAX RETURN WERE FURNISHED. THE SOURCE WAS EXPLAINED IN THE MANNER THAT HE HAS ITA NO. 2945/AH D/2008 GAUTAM JEWELS PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 3 - SOLD A HOUSE AND THE AMOUNT WAS ALSO WITHDRAWN FROM THE BANK ACCOUNT. CERTAIN EVIDENCES IN RESPECT OF TH E IMPUGNED SALE AND BANK STATEMENTS WERE FURNISHED. (C) SHRI DARMESH KUSAMBIA: A SUM OF RS.1,50,000/- WAS INVESTED FOR SHARE APPLI CATION MONEY. IT WAS EXPLAINED THAT HE WAS WORKING AS PEO N FOR THE LAST 18 YEARS IN PUNJAB NATIONAL BANK. HIS PAN, CO NFIRMATION AND SALARY CERTIFICATE WERE FURNISHED. IT WAS ALSO STATED THAT HE WAS OPERATING A BANK ACCOUNT, HOWEVER, THE INVESTME NT WAS MADE OUT OF CASH AVAILABLE WITH HIM. 2.2. WITH THIS BRIEF BACKGROUND, WE HAVE HEARD BO TH THE SIDES. THE ISSUE OF INVESTMENT IN A COMPANY FOR ALLOTMENT OF SHARE HAS NOW BEEN SETTLED BY FEW DECISIONS, VIZ. CIT VS. SO FIA FINANCE LTD. (1994)205 ITR 98(DEL)[FB], CIT VS. STELLER INVESTM ENT LTD. [2001]251 ITR 263 (SC), SUSHEELA FORGING PVT.LTD. V S. DY.CIT [1993]46 TTJ 66(DEL.) AND CIT VS. LOVELY EXPORTS P VT.LTD. [2008]216 CTR 195 (SC). FOLLOWING ALL THESE DECISI ONS, WE HEREBY REVERSE THE VIEW TAKEN BY THE LD.CIT(A) AND DIRECT TO DELETE THE ADDITION. THIS GROUND IS HEREBY ALLOWED. 3. GROUND NO.2 READS AS UNDER:- 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION TO THE EXTENT OF ITA NO. 2945/AH D/2008 GAUTAM JEWELS PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 4 - RS.50,700/- ON BUILDING, FURNITURE AND FIXTURES AND ELECTRICAL FITTINGS WITHOUT PROPER CONSIDERATION OF THE FACTS OF THE APPELLANTS CASE. IN VIEW OF THE FACTS AND SUBMISS IONS FILED, THE IMPUGNED DISALLOWANCE REQUIRES TO BE CANCELLED/QUAS HED. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO HAS ASKED THE ASSESSEE TO FURNISH THE EVIDENCE IN RESPE CT OF CERTAIN FIXED ASSETS, SUCH AS, FURNITURE IN FIXTURE, ELECTRIC FIT TING, ETC. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, THE CLAIM OF D EPRECIATION ON THE CAPITAL INVESTMENT WAS DISALLOWED. THE APPELL ANT HAS ALSO FAILED TO IMPROVE HIS CASE BEFORE THE FIRST APPELLA TE AUTHORITY. EVEN BEFORE US, THE ASSESSEE HAS NOT FURNISHED ANY SATIS FACTORY EXPLANATION, THEREFORE, WE FIND NO FORCE IN THIS GR OUND OF THE ASSESSEE, HENCE, DISMISSED. 4. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 27/ 5 /2011. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 27/ 05 /2011 T.C. NAIR, SR. PS ITA NO. 2945/AH D/2008 GAUTAM JEWELS PVT.LTD. VS. ITO ASST.YEAR 2005-06 - 5 - COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-I, SURAT 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD 1. DATE OF DICTATION..12.5.2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.05.2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S27/5/2011 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27/5/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER