ITO, New Delhi V. M/s Drishti Tapes P Ltd., New Delhi

ITA 33/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0384 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-02-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 04-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Keywords: Accommodation entries; Onus to prove
• Section: 133(6); 68

Judgement Text

ITA NO. 33/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 33/DEL/2010 A.Y. : 2003-04 INCOME TAX OFFICER, WARD 10(4), ROOM NO. 199C, C.R. BUILDING, NEW DELHI VS. M/S DIRSHTI TAPES P LTD., 306, SITA RAM MENSION, 217/218, JOSHI ROAD, KAROL BAGH, NEW DELHI (PAN/GIR NO. : AABCD5056B) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : NONE DEPARTMENT BY : SH. H.K. LAL, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 9.11.2 009 PERTAINING TO ASSESSMENT YEAR 2003-04. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOM E TAX (APPEALS) ERRED IN DELETING THE ADDITION OF ` 10,70 ,000/- U/S 68 OF THE IT ACT. 3. IN THIS CASE ASSESSMENT WAS REOPENED ON INFORMATI ON RECEIVED FROM THE DIT(INV.) THAT ASSESSEE COMPANY HAD TAKEN THE FOLLOWING ACCOMMODATION ENTRIES FROM: I) PERMINDER SINGH - ` 2,70,000/- II) SARABJEET SINGH - ` 75,000/- ITA NO. 33/DEL/2010 2 III) M/S NANAK INTERNATIONAL - ` 1,25,000/- IV) M/S GP ENTERPRISES - ` 4,50,000/- V) MR. KAMAL DHAWAN - ` 1,50,000/- TOTAL = ` 10,70,000/- 3.1 ASSESSING OFFICER NOTED THAT SEVERAL NOTICES W ERE ISSUED. THE ASSESSEE DID NOT COOPERATE. HE NOTED THAT NOTICE U/ S 133(6) WAS ISSUED ON 20.11.2007 TO M/S NANAK INTERNATIONAL AND M/S GP ENTERPRISES REQUIRING THESE COMPANIES TO FURNISH THE NECESSARY DETAILS/DOCUMENTS IN SUPPORT OF SHARE APPLICATION. ASSESSING OFFICER ALSO NOTED THAT THE INSPECTOR OF THE WARD INFORMED T HAT NO SUCH COMPANY WAS FUNCTIONING FROM THESE PREMISES. ASSES SEE WAS REQUIRED TO FILE REQUISITE DETAILS AND THE SAME WAS NOT PROVIDED. HENCE, ASSESSING OFFICER HELD THAT DESPITE AVAILIN G NUMBER OF OPPORTUNITIES AS DISCUSSED ABOVE, ASSESSEE HAS FAIL ED TO DISCHARGE THE ONUS TO PROVE THE GENUINENESS OF THE TRANSACTIONS, CREDIT WORTHINESS OF THE PERSONS/ COMPANIES REGARDING THE SHARE CAPITA L OF ` 10,70,000/- AND THE SAME WAS ADDED U/S 68 OF THE IT ACT. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) ASSESSEE AGITATED BOTH THE ISSUE OF JURISDICTION OF REOPENING AND ALSO THE MATTER ON MERITS. LD. COMMISSIONER OF INCOME TAX (APPEALS) H ELD THAT ACTION OF THE AO WAS JUSTIFIED U/S 147/148. REGARDING THE MATTER ON MERITS ASSESSEE SUBMITTED THAT ASSESSEE HAS PROVIDED NECESS ARY DETAILS IN THE SHAPE OF NAME AND ADDRESS OF THE PARTIES, PAN, CHEQUE NO., DATE OF CHEQUE, AMOUNT RECEIVED AS WELL AS STATEMENT OF B ANK ACCOUNT OF THE ASSESSEE AND, INCOME TAX RETURNS OF T HE ITA NO. 33/DEL/2010 3 PARTIES TO WHOM THE SHARES WERE SOLD. LD. COMMISSIO NER OF INCOME TAX (APPEALS) CONSIDERED THE ABOVE AND REFERRED TO SEVERAL CASE LAWS ON THE ISSUE. HE HELD THAT AFTER DUE CONSIDERATION, IT IS SEEN THAT ASSESSEE HAS PROVIDED VARIOUS EVIDENCES IN THE FOR M OF PAN, COPY OF INCOME TAX RETURNS, DETAILS OF SHARES ALLOTMENT ETC. TO AUTHENTICATE THE IDENTITY AND GENUINENESS OF THE AMOUNT RECEIVED FROM DIFFERENT PARTIES. HE OBSERVED EVEN THOUGH THE ASSESSING OF FICER HAS MADE CERTAIN OBSERVATIONS REGARDING NON-RESPONSE OF THE VARIOUS PARTIES TO VARIOUS NOTICES ISSUED. HOWEVER, THE ASSESSING OF FICER HAS NOT DISPUTED THE DOCUMENTS ESTABLISHING THE IDENTITY AND FINANCIAL STATEMENTS OF THE VARIOUS PARTIES. ACCORDINGLY, LD. COMMISSIONER OF INCOME TAX (APPEALS) DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E. NONE APPEARED ON BEHALF OF THE ASSESSEE. UPON CAREFUL C ONSIDERATION, WE FIND THAT THE CASE CAN BE ADJUDICATED AFTER CONSIDER ING THE SUBMISSIONS AND HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. AFT ER DUE CONSIDERATION, WE FIND OURSELVES IN AGREEMENT WITH THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT THE ASSESS EE COMPANY HAS PROVED AND ESTABLISHED THE IDENTITY OF THE SHARE A PPLICANTS. ONCE THE IDENTITY OF THESE SHARE APPLICANTS IS PROVED, NO AD DITION CAN BE MADE IN THE HAND OF THE ASSESSEE COMPANY, EVEN IF, THE S HARE APPLICANTS HAVE BEEN FOUND PERSONS OF NO MEANS UNTIL AND UNLES S OTHERWISE IT IS PROVED BY THE REVENUE. ITA NO. 33/DEL/2010 4 7. IN THIS REGARD, WE REFER THE HONBLE APEX COURT DECISION IN THE CASE OF CIT VS. LOVELY EXPORTS 216 CTR 195 WHEREIN IT HAS BEEN HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WI TH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASS ESSEE. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AN D PRECEDENT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CO MMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, WE UPHOLD THE S AME. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/02/2011. SD/- SD/- [RAJPAL YADAV [RAJPAL YADAV [RAJPAL YADAV [RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 11/02/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES