The ACIT, Circle-4, Surat V. M/s. Shri Shiv Vijay Processors Pvt.Ltd., Surat

ITA 2993/AHD/2008

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6861 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-12-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 25-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES KURAIR
• Assessee Lawyers: S N SOPARKAR SRAR
• Section: 68

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD .., .. , ! BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.K.GARODIA, HONBLE ACCOUNTANT MEMBER ITA NO.2993/AHD/2008 & C.O. NO.257/AHD/2008 (ARISING OUT ITA NO.2993/AHD/2008) ASSESSMENT YEAR:2005-06 ACIT, CIRCLE-4, ROOM NO.223, AAYAKAR BHAVAN, MAJURA GATE, SURAT SHREE SHIV VIJAY PROCESSORS PRIVATE LTD. 258/1, GIDC, PANDESARA, SURAT PAN NO.AADCS3839B V/S. V/S. M/S. SHRI SHIV VIJAY PROCESSORS P. LTD. 258/1, GIDC, PANDESARA, SURAT ACIT, CIRCLE-4, SURAT (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI S.N.SOPARKAR, SR-AR REVENUE BY:- SHRI JAMES KURAIR, DR DATE OF HEARING 01-12-2011 DATE OF PRONOUNCEMENT 09-12-2011 ' ' ' ' /O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER:- ITA NO.2993/AHD/2008 & CO NO.257/AHD/2008 A.Y. 2005-06 ACIT CIR-4, SRT V. M/S. SH SHIV VIJAY PROCESSORS P. LTD. PAGE 2 THIS APPEAL IS FILED BY THE REVENUE AND CROSS OBJE CTION (CO) IS FILED BY ASSESSEE WHICH ARE DIRECTED AGAINST THE ORDER OF LD . COMMISSIONER OF INCOME-TAX (APPEALS)-III, SURAT DATED 23-06-2008 FO R ASSESSMENT YEAR 2005- 06. FIRST WE TAKE UP APPEAL FILED BY REVENUE. 2. GROUND RAISED BY REVENUE IS AS UNDER:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A)-III, SURAT HAS ERRED IN DELETING THE ADD ITION OF RS,50,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH CR EDIT U/S 68 OF THE IT ACT, 1961. 3. THE BRIEF FACTS ARE NOTED BY LD. CIT(A) ON PAGE NO.1 OF HIS ORDER AND THE RELEVANT PORTION IS REPRODUCED BELOW:- THE ONLY GROUND OF APPEAL IS REGARDING ADDITION OF RS,50,000/- U/S.68 OF THE IT ACT. THE AO OBSERVED THAT THE APPELLANT COMP ANY RECEIVED FRESH SHARE APPLICATION MONEY FROM FIVE PRIVATE LIMITED C OMPANIES. THE MONEY RECEIVED FROM PRERNA SUPPLY PVT. LTD. (RS.08 LACS), OLYPAB TRADERS PVT. LTD. (RS.10 LACS), M/S N. STAR COMMO T RADE PVT. LTD. (RS.11 LACS M/S SAHI AGENCY SHIPPING PVT. LTD. (RS. 10 LACS) M/S. HANUMAN COKE PLANT PVT. LTD. (RS.11 LACS). THESE CO MPANIES WERE REGISTERED IN CALCUTTA AND TO VERIFY THE GENUINENES S OF THE CLAIM, THE AO ISSUED COMMISSION U/S. 131(1)(D) TO THE ADDITIONAL DIT (INV.) TOO MAKE NECESSARY INQUIRIES. THE INVESTIGATION WING REPORTE D THAT THESE SHARES HOLDERS WERE NOT AVAILABLE AT THE GIVEN ADDRESSES A ND TH4E AO CAME TO THE CONCLUSION THAT NO SUCH PARTIES EXISTED NOR ANY BODY IN THE VICINITY KNEW THE SHARE HOLDERS. WHEN REQUIRED TO SHOW CAUSE , THE APPELLANT STATED HAT ALL SHARES HOLDERS WERE IN EXISTENCE AND THE ADITS REPORT COULD NOT BE RELIED UPON. HOWEVER, THE AO DISALLOWA NCE NOT ACCEPT THE EXPLANATION AND WAS OF THE VIEW THAT THE SHARE APPL ICATION MONEY WAS NON-GENUINE AND NONE OF THE CREDITORS APPEARED BEFO RE HIM FOR VERIFICATION. HE ALSO DOUBTED THE CREDITWORTHINESS OF THE SHARE HOLDERS AND THEREFORE MADE AN ADDITION OF RS.50 LACS U/S.68 OF THE IT ACT. BEING AGGRIEVED, THE ASSESSEE PRESSED THE MATTER IN APPEAL BEFORE LD. CIT(A), WHO DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY FOLLOWING THE JUDGMENT ITA NO.2993/AHD/2008 & CO NO.257/AHD/2008 A.Y. 2005-06 ACIT CIR-4, SRT V. M/S. SH SHIV VIJAY PROCESSORS P. LTD. PAGE 3 OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT V. LOVELY EXPORT PVT. LTD. AS REPORTED IN 216 CTR 195 (SC) AND NOW, THE REVENUE I S IN APPEAL BEFORE US. 4. LD. DR OF THE REVENUE HAS SUPPORTED THE ASSESSME NT ORDER WHEREAS THE AR OF THE ASSESSEE SUPPORTED THE ORDER OF LD. C IT(A). HE ALSO PLACED RELIANCE ON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. UJALA DYEING AND PRINTING MILLS (P) LTD. (2010) AS REPORTED IN 328 ITR 437 (GUJ). HE ALSO PLACED RELIANCE ON THE TRIBUNAL ORDE R RENDERED IN THE CASE OF ACIT V. M/S. SALASAR NYLON PVT. LTD. IN ITA NO.2997/AHD/2008 DATED 08-04- 2011. HE SUBMITTED A COPY OF TRIBUNAL ORDER. THEREA FTER, HE SUBMITTED A CHART AND POINTED OUT THAT FOR ALL THE FIVE SHAREHOLDERS, FROM WHOM THIS INVESTMENT OF RS.50 LAKH WAS RECEIVED BY THE ASSESSEE IN THE PRES ENT YEAR, THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS SUCH AS COMPLETE ADDRESS, PAN, RETURN OF INCOME FILED BY THE SHAREHOLDERS, ANNUAL REPORT OF SHAREHOLDERS AND THEIR BANK STATEMENT ALONG WITH LEDGER ACCOUNT OF THE ASSESSEE AS APPEARING IN THE BOOKS OF ITS SHAREHOLDERS. IT WAS SUBMITTED THAT IN THE LIGHT OF THESE DOCUMENTS, NO ADDITION IS CALLED FOR EVEN WITHOUT S UPPORT OF ANY JUDICIAL PRONOUNCEMENT. HE ALSO SUBMITTED THAT THE ADDITION WAS MADE BY ASSESSING OFFICER SIMPLY ON THE BASIS OF REPORT OF ADDITIONAL DCIT (INV.) UNIT-I OF KOLKATA AS HAVE BEEN NOTED BY AO IN PARA-10 OF ASSESSMENT O RDER. HE ALSO SUBMITTED THAT IN THE CASE OF M/S. SALASAR NYLON PVT. LTD. (SUPRA), THE TRIBUNAL HAS REPRODUCED THE CONTENTS OF THE REPORT OF THE SAME A DDITIONAL DIRECTOR OF INCOME-TAX (INV.) UNIT-1 KOLKATA. HE ALSO SUBMITTED THAT IN THAT CASE ALSO, THE SHAREHOLDERS ARE SAME AS IN THE PRESENT CASE AND TH EREAFTER, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE AND THEREFO RE, IN THE PRESENT CASE, THE ORDER OF LD. CIT(A) SHOULD BE UPHELD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIALS ON RECORD AND ORDER OF LD. CIT(A) AND THE JUDGMENTS CI TED BY LD. AR OF THE ITA NO.2993/AHD/2008 & CO NO.257/AHD/2008 A.Y. 2005-06 ACIT CIR-4, SRT V. M/S. SH SHIV VIJAY PROCESSORS P. LTD. PAGE 4 ASSESSEE. WE FIND THAT THIS AMOUNT OF RS.50 LAKH WA S RECEIVED BY THE ASSESSEE IN THE PRESENT YEAR FROM FIVE COMPANIES I. E. (I) M/S. SAHI AGENCIES (SHIPPING) PVT. LTD. (II) M/S. PRERANA SUPPLY PVT. LTD. (III) M/S./ OLYPAB TRADERS PVT. LTD. (IV) M/S.N. STAR COMMO TRADE PVTG. LTD. A ND (V) M/S HANUMAN COKE PLANT PVT. LTD. AS PER THE TRIBUNAL ORDER RENDERED IN THE CASE OF SALASAR NYLON PVT. LTD. (SUPRA) FOR THE SAME ASSESSMENT YEAR, SHARE APPLIC ATION MONEY WAS RECEIVED BY THAT ASSESSEE OF RS.53 LAKH FROM FOUR S HAREHOLDERS I.E. (1) M/S RICH POINT FINANCIAL SERVICES PVT. LTD. (2) M/S. PR ERANA SUPPLY PVT. LTD. (3) HANUMAN COKE PLANT PVT. LTD. AND (4) M/S. OLYPAB TR ADERS PVT. LTD.. WE FIND THAT OUT OF FIVE SHAREHOLDERS IN THE PRESENT CASE, AND FOUR SHAREHOLDERS IN THAT CASE, THREE NAMES ARE COMMON IN BOTH CASES, AND THE FACTS REGARDING OTHERS ARE IDENTICAL BECAUSE SIMILAR DOCUMENTS ARE FURNISH ED BY THE ASSESSEE FOR THE TWO REMAINING SHAREHOLDERS ALSO. AS PER THE COPY OF BANK STATEMENT AVAILABLE ON PAGES 19-20, 31-36, 51-53, 67-68 AND 87-88 OF AS SESSEES PAPER BOOK, WE FIND THAT THERE IS NO CASH DEPOSIT BEFORE WITHDRAWA L BY VARIOUS CHEQUES ISSUED BY THE RESPECTIVE SHAREHOLDERS TO THE ASSESSEE-COMP ANY. ALL THE SHAREHOLDERS ARE ASSESSED TO TAX AND THEIR PAN AND ADDRESS ARE A VAILABLE. INVESTMENT IS BEING REFLECTED IN THE BOOKS ACCOUNT, ANNUAL REPORT OF THE SHAREHOLDERS. APART FROM ADVERSE REPORT OF ADDITIONAL DIRECTOR (INV) UN IT-II KOLKATA, NO INDEPENDENT INQUIRY WAS MADE BY AO AND NO ADVERSE MATERIALS WAS BROUGHT ON RECORD BY AO TO SHOW THAT THESE SHAREHOLDERS ARE BOGUS OR TO SHOW THAT MONEY WAS GIVEN BY THE ASSESSEE TO THESE SHAREHOLDERS. HENCE, ISSUE INVOLVED IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE JUDGM ENT OF HONBLE APEX COURT RENDERED IN THE CASE OF LOVELY EXPORT PVT. LTD. (SUPRA), WHEREIN IT WAS HELD BY HONBLE APEX COURT THAT IF THE SHARE APPLICATION MO NEY IS RECEIVED BY THE ASSESSEE-COMPANY FROM THE OTHER ALLEGED BOGUS SHARE HOLDERS, WHOSE NAME ARE GIVEN TO THE ASSESSING OFFICER THE DEPARTMENT T O FREE TO REOPEN HIS INDIVIDUAL ASSESSMENT AS PER LAW BUT IN SUCH CIRCUM STANCES, THE AMOUNT RECEIVED TOWARDS SHARE APPLICATION MONEY BY THE COM PANY CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. BY RESPECTFULLY FOLLOWING ITA NO.2993/AHD/2008 & CO NO.257/AHD/2008 A.Y. 2005-06 ACIT CIR-4, SRT V. M/S. SH SHIV VIJAY PROCESSORS P. LTD. PAGE 5 THIS JUDGMENT OF HONBLE APEX COURT, WE HOLD THAT N O INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A). 6. NOW, WE TAKE UP CO FILED BY THE ASSESSEE. WE FIN D THAT CO IS MERELY IN SUPPORT OF THE ORDER OF LD. CIT(A) AND HENCE, NO SE PARATE ADJUDICATION IS CALLED FOR PARTICULARLY WHEN WE HAVE ALREADY DECIDE D IN REVENUES APPEAL THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A). HENCE, THE CO HAS BECOME INFRUCTUOUS. 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED AND C O OF ASSESSEE IS ALSO DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON 09/12/2011 # ' $ %& '() 09 / 12 / 2011 !+ , $ - . SD/- SD/- ( .. ) ( .. ) (D.K.TYAGI) (A.K. GARODIA) ( ) ( ! ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, *DKP '()- 09/12/2011 . ' ' ' ' $ $$ $ 012 012 012 012 32&1 32&1 32&1 32&1 / COPY OF ORDER FORWARDED TO:- 1. 56 / APPELLANT 2. 056 / RESPONDENT 3. (( 1 +9 / CONCERNED CIT 4. +9- / CIT (A) 5. 2<= 01' , , / DR, ITAT, AHMEDABAD 6. ? @# / GUARD FILE. BY ORDER/ ' , /TRUE COPY/ A/ (B , .