The ACIT,Mehsana Circle, Mehsana V. M/s. Advatech Ceratiles Ltd., Dist.Mehsana

ITA 3342/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0110 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-08-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 07-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DANESH M THAKKAR
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON'BLE S HRI N.S. SAINI, A.M.) I.T.A. NO. 3342/AHD./2008 ASSESSMENT YEAR : 2005-2006 ASSISTANT COMMISSIONER OF INCOME TAX, -VS.- M/S. ADVATECH CERATILES LTD., MEHSANA MEHSANA CIRCLE, MEHSANA (PAN : AAECA 7299 Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. MADHUSUDAN, SR. D.R. RESPONDENT BY : SHRI DANESH M. THAKKAR O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 18.07.2008 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), GANDHINAGAR DE LETING THE ADDITION OF RS.13,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED INVESTMENT IN SHARE CAPITAL FOR THE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A COMPANY. FOR THE ASSESSMENT YEAR UNDER APPEAL, IT FILED THE RETURN OF INCOME DECLARING NIL INCOME ON 29.10.2005. THE ASSESSING OFFICER FRAMED THE ASSESSMENT UNDER SECTION 143(3) ON 28.12 .2007, WHEREIN HE MADE THE ADDITION OF RS.23,33,500/-. ON APPEAL, IN THE IMPUGNED ORDER, T HE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADDITION TO THE EXTENT OF RS.13,00,000/- AND CONFIRMED THE ADDITION OF RS.10,33,500/-. AGGRIEVED BY THE DELETION OF RS.13, 00,000/-, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING, ON BEHALF OF REVENUE SHR I K. MADHUSUDAN, LD. SR. D.R. APPEARED AND CONTENDED THAT IN THE IMPUGNED ORDER, THE LEARN ED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADDITION OF RS.8,50,000/- IN CASE OF SH RI ANANDKUMAR BHAGUBHAI PATEL ON THE GROUND THAT EXISTENCE OF INVESTOR IS PROVED. THEREFORE, TH ERE WAS NO FURTHER BURDEN TO ASSESSEE WHETHER THE PERSON ITSELF HAS INVESTED THE SAID MONEY OR SO ME OTHER HAS MADE INVESTMENT IN THE NAME OF THAT PERSON. THE LD. D.R. FURTHER POINTED OUT THAT OUT OF THE ADDITION OF RS.14,56,000/-, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADDITION TO THE EXTENT OF 2 ITA NO. 3342/AHD/2008 RS.4,50,000/- FOLLOWING THE SAME LOGIC. THE LD. D.R . RELYING ON THE REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER CONTENDED THAT THE ADDITION MADE BE RESTORED. 4. ON THE OTHER HAND, SHRI DANESH M. THAKKAR, LD. C OUNSEL APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS). HE POINTED OUT THAT THE ASSESSEE HAS FILED THE CONFIRM ATIONS OF THE SHAREHOLDERS, WHO HAD INVESTED THE MONEY. THE IDENTITY OF THE SHAREHOLDERS HAS BEE N PROVED. IN THESE CIRCUMSTANCES, THE ADDITION UNDER SECTION 68 CANNOT BE MADE AS HELD BY THE HON' BLE SUPREME COURT IN THE CASE OF CIT VS.- LOVELY EXPORTS (PVT.) LTD. REPORTED IN [2008] 216 C TR (SC) 195. THE LD. COUNSEL OF THE ASSESSEE ACCORDINGLY CONTENDED THAT THE VIEW TAKEN BY THE LE ARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 5. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE HON'BLE SUP REME COURT IN THE CASE OF LOVELY EXPORTS (PVT.) LTD. (SUPRA) HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE-COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN T O THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIV IDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF ASSE SSEE-COMPANY. IN THE PRESENT CASE, THE ASSESSEE HAS FILED THE CONFIRMATIONS FROM THE SHARE HOLDERS FROM WHOM IT RECEIVED THE SHARE APPLICATION MONEY/ SHARES ALLOTTED. THE NAMES AND A DDRESS OF ALL THE SHAREHOLDERS WERE GIVEN TO THE ASSESSING OFFICER. IN THESE CIRCUMSTANCES, THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE-COMPANY. WE, THEREFORE, FOLLOWING T HE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (PVT.) LTD. (SUPRA) U PHOLD THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN DELETING THE ADDITION OF RS.13,00,000/-. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 27.08.201 0 SD/- SD/- (N.S. SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27 / 08 / 2010 3 ITA NO. 3342/AHD/2008 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGI STRAR, ITAT, AHMEDABAD LAHA/SR.P.S.