DCIT, New Delhi V. M/s J.H. Finvest Pvt. Ltd., New Delhi

ITA 3481/DEL/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2319 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-12-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 21-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Accommodation entries; TDS
• Section: 133(6); 37(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.G. BANSAL ITA NO. 3481(DEL)2008 ASSESSMENT YEAR: 2004-05 DY.COMMISSIONER OF INCOME TAX, M/S. J.H. FINVEST PVT. LTD., CEN.CIRCLE 13, NEW DELHI. V. 13-B 3 RD FLOOR N.S.MRG. DARYA GANJ, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI B.K. GUPTA, SR. DR RESPONDENT BY: SHRI RAJI V SAXENA, ADVOCATE ORDER PER A.D. JAIN, J.M. THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2004-05 TAKING THE FOLLOWING GROUNDS:- I). THE ORDER OF THE LD. CIT(APPEALS) IS NOT CORRE CT IN LAW. II). WHETHER THE CIT(A) IS CORRECT IN LAW AND FACT S IN DELETING THE DISALLOWANCE OF RS. 5,02,890/- TOWARDS EXCES S INTEREST PAID BY THE ASSESSEE. III) WHETHER THE CIT(A) IS CORRECT IN LAW AND FACT S IN CONCLUDING THAT THE ENTIRE BORROWED CAPITAL HAS BEEN USED F OR THE PURPOSE OF BUSINESS. IV). WHETHER THE CIT(A) IS CORRECT IN LAW AND FACTS IN CONCLUDING THAT THERE WAS NO NEXUS BETWEEN THE INTEREST BEARING L OANS TAKEN AND GIVEN IN THE CASE IN THE FACE OF THE EVIDENCE ON RE CORD THAT THE ITA 3481(DEL)2008 2 ENTIRE NON INTEREST BEARING AND INTEREST BEARING FU NDS OF THE COMPANY SUCH AS SHARE CAPITAL LOANS AND RESERVES WA S FULLY ADVANCE/DEPLOYED AS LOANS GIVEN. V). WHETHER THE CIT(A) IS CORRECT IN LAW AND FACT S IN CONCLUDING THAT INTEREST PAID BY THE ASSESSEE WAS WHOLLY AND EXCLUS IVELY FOR THE PURPOSE OF BUSINESS U/S 37(1) WHEN INTEREST BEARING FUNDS HAVE BEEN DIVERTED FOR CERTAIN LOANS, THE BUSINESS EXPED IENCY OF WHICH WAS NOT SATISFACTORILY EXPLAINED BY THE ASSESSEE. VI) WHETHER THE CIT(A) IS CORRECT IN LAW AND FAC TS IN DELETING THE ADDITION OF RS.92,60,000/- TOWARDS SHARE C APITAL U/S 68 OF THE I.T. ACT. VII) WHETHER THE CIT(A) IS CORRECT IN LAW AND FAC TS IN HOLDING THAT THE ADDITION U/S 68 CANNOT BE MADE IN THE HANDS OF THE ASSESSEE WHEN THE ASSESSEE HAS FAILED TO ESTABLISH THE CREDI T WORTHINESS OF THE CREDITOR. VIII) WHETHER THE CIT(A) IS CORRECT IN LAW AND FACTS IN A CCEPTING THAT THE IDENTITY OF THESE CREDITOR COMPANIES HAVE BEEN ESTABLISHED WHEN THE FACTS ON RECORD PROVED THAT THERE WERE MER E PAPER ENTITIES WHOSE PRINCIPAL OFFICERS WERE EITHER PETTY BUSINESSMEN OR LOW LEVEL EMPLOYEES WORKING ELSEWHERE AND WHO AD MITTED THAT THESE COMPANIES HAD NO BUSINESS ACTIVITY AND E XISTED MERELY FOR GIVING ACCOMMODATION ENTRIES. 2. GROUND NOS. 1 TO 5 CONCERN DELETION OF THE ADDIT ION OF RS. 5,02,890/- TOWARDS EXCESS INTEREST PAID BY THE ASSESSEE. THE FACTS ARE THAT THE AO NOTICED THAT THE ASSESSEE COMPANY HAD OBTAINED UNSE CURED LOANS FROM VARIOUS PERSONS. IT HAD ALSO GIVEN LOANS TO CERTA IN CONCERNS. INTEREST ON THE LOANS GIVEN WAS CHARGED @ 12%. ON THE OTHER HAND , ON THE LOANS TAKEN, THE ASSESSEE COMPANY HAD PAID INTEREST IN EXCESS OF 12% IN THE CASES OF SHRI KAILASH NATH CHATURVEDI, SHRI ANIL JAIN AND M/S. S URYA KIRAN CORPORATION. ITA 3481(DEL)2008 3 THE AO QUANTIFIED THE EXCESS INTEREST BEYOND 12% GI VEN TO THE SAID THREE PERSONS AT RS. 5,02,890/-. ON QUERY, THE ASSESSEE SUBMITTED THAT THE FLUCTUATION IN THE RATE OF INTEREST PAID WAS DETERM INED BY THE AVAILABILITY OF FUNDS AND ALL LOANS RAISED WERE UTILIZED FOR THE BU SINESS PURPOSE. THE AO, HOWEVER, REJECTED THE ASSESSEES CONTENTION , OBSER VING THAT NO ADEQUATE JUSTIFICATION HAD BEEN PROVIDED BY THE ASSESSEE CON CERNING PAYMENT OF INTEREST AT A RATE HIGHER THAN 12% , WHEN IT WAS R ECEIVING INTEREST AT A MAXIMUM RATE OF 12%; THAT THERE WAS NO EVIDENCE REG ARDING ANY BUSINESS EXPEDIENCY SUPPORTING PAYMENT OF INTEREST AT THE RA TES HIGHER THAN 12%; THAT AS PER THE PROVISIONS OF SECTION 37(1) OF THE I.T. ACT , ONLY THAT EXPENDITURE IS TO BE ALLOWED AS A DEDUCTION , WHICH HAS BEEN LA ID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE COMPANY; THAT THE ASSESSEE COMPANY HAD FAILED TO SHOW ANY BUSINESS N ECESSITY OF TAKING LOANS AT A HIGHER RATE OF INTEREST AND GIVING LOANS AT A LOWER RATE OF INTEREST; THAT THE PROVISIONS OF SECTION 36(1)(III) OF THE ACT WE RE ALSO INVOKED, SINCE THE INTEREST BEARING LOAN AMOUNT HAD BEEN UTILIZED BY T HE ASSESSEE COMPANY IN GIVING LOANS AT LOWER RATE OF INTEREST TO OTHER ENT ITIES AND THAT THEREFORE, THE LOANS TAKEN HAD NOT BEEN UTILIZED FOR BUSINESS PURP OSES, FOR WHICH, DEDUCTION U/S 36(1)(III) WAS NOT TENABLE; THAT IN FACT, THE A SSESSEE WAS DIVERTING THE ITA 3481(DEL)2008 4 INTEREST BEARING FUNDS TO OTHER ENTITIES AND WAS, A S SUCH, UTILIZING THE LOANS TAKEN FOR BUSINESS PURPOSES. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LEARNED CIT (A) DELETED THE ADDITION MADE, GIVING RISE TO GROUND NOS. 1 TO 5. 4. CHALLENGING THE ORDER UNDER APPEAL, THE LD. DR H AS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION RIGHT LY MADE BY THE AO; THAT THE ASSESSEE HAD REMAINED UNABLE TO PROVE ANY NEXUS BETWEEN THE INTEREST BEARING FUNDS WITH THE HIGHER RATE OF INTEREST; THA T THE ASSESSEE COMPANY BEING A FINANCIAL COMPANY, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO TAKE THE LOANS AT HIGHER RATES AND TO GIVE LOANS AT LOWER RA TES. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, HAS STRONGLY RELIED ON THE IMPUGNED ORDER. IT HAS BEEN SUBMITTE D THAT THE ASSESSEE COMPANY HAD DECLARED INCOME AT RS. 35.81 LAKHS; THA T THE DISALLOWANCE WAS MERELY ON SECTION 36(1)(III), WHICH IS REGARDING AL LOWANCE; THAT IT IS SECTION 40(A)(2)(B), WHICH IS REGARDING DISALLOWANCE; THAT THE OTHER CONCERNS WERE NOT SISTER CONCERNS OF THE ASSESSEE; THAT THEN, THE TOTAL LOANS TAKEN WERE OF RS.50 LAKHS; THAT THE AO FAILED TO CONSIDER THAT AN AMOUNT OF RS. 12.52 CRORES WAS THE ASSESSEES TOTAL SHARE CAPITAL; THAT THEN, THE LOANS FROM THE DIRECTORS OF THE ASSESSEE COMPANY AMOUNTED TO RS. 7 2.45 LAKHS; THAT THESE LOANS WERE NOT INTEREST BEARING LOANS; THAT THE ASS ESSEE HAD RESERVES OF RS. ITA 3481(DEL)2008 5 51.59 LAKHS; THAT IT WAS HAVING CONSIDERED ALL THE SE THAT THE LD. CIT(A) DELETED THE ADDITION WRONGLY MADE BY THE AO. 6. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD CONCERNING THIS ISSUE. IT IS A MATTER OF RECORD TH AT THE AO DID NOT PROVE ANY NEXUS BETWEEN THE INTEREST BEARING LOANS TAKEN BY T HE ASSESSEE AND GIVEN TO VARIOUS PERSONS. IN THE ABSENCE OF SUCH A NEXUS, N O DISALLOWANCE OF EXCESS INTEREST PAYMENT CAN BE MADE U/S 40(A)(2)(B) OF THE I.T. ACT. THE DISALLOWANCE EITHER U/S 37(1) OR SECTION 36(1)(III ) CAN BE MADE ONLY IF IT IS PROVED THAT THE LOANS TAKEN HAVE NOT BEEN RAISED W HOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES. THE AO ERRED IN MAKING THE ADD ITION, SINCE THERE WAS NOTHING ON RECORD THAT THE INTEREST BEARING LOANS T AKEN HAD BEEN UTILIZED BY THE ASSESSEE FOR NON BUSINESS PURPOSES AND THAT THE Y HAD NOT BEEN USED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE OF THE ASSESSEE. THE LD. CIT(A) HAS TAKEN NOTE THAT THE ASSESSEE COMPANY HAD SHARE CAPITAL OF RS. 12.52 CRORES; THAT IT HAD RESERVES OF RS. 51.59 LAK HS; AND THAT THE DIRECTORS OF THE ASSESSEE COMPANY HAD RAISED RS. 72.45 LAKHS, NO T BEARING ANY INTEREST WHATSOEVER. IT HAS ALSO BEEN CONSIDERED THAT THE A SSESSEE COMPANY HAD NOT PAID ANY DIVIDEND FOR THE SHARE CAPITAL THUS RAISED . ONCE IT WAS SEEN THAT THE CAPITAL HAD BEEN BORROWED FOR BUSINESS PURPOSE, THE ADDITION OUGHT NOT TO HAVE BEEN MADE. FURTHER-MORE, THE ASSESSEE, AS PER RECORD, HAD DEDUCTED ITA 3481(DEL)2008 6 TDS FROM THE INTEREST PAYMENT AND THUS TDS HAD BEEN DEPOSITED WITH THE GOVERNMENT. 7. IN VIEW OF THE ABOVE, FINDING NO MERIT THEREIN, GROUND NOS. 1 TO 5 RAISED BY THE DEPARTMENT ARE REJECTED. 8. APROPOS GROUND NOS. 6 TO 8, THE AO OBSERVED THAT THE ASSESSEE COMPANY HAD RECEIVED FRESH SHARE CAPITAL DURING THE YEAR, AMOUNTING TO RS. 92,60,000/-. THE ASSESSEE HAD ALLOTTED SHARES TO 13 CORPORATE ENTITIES. NOTICES U/S 133(6) OF THE ACT WERE ISSUED TO THESE COMPANIES. THERE WAS NO RESPONSE FROM THEM. THE AO DEPUTED THE INSPECTOR TO ASCERTAIN THEIR EXISTENCE. THEY WERE FOUND NON-EXISTENT AT THE AD DRESSES GIVEN BY THE ASSESSEE COMPANY. THE AO ASKED THE ASSESSEE COMPAN Y TO PRODUCE THE PRINCIPAL OFFICERS OF THE COMPANY. THEY WERE STAT ED TO BE OUT OF STATION AND THEY WERE THUS NOT PRODUCED. THE ASSESSEE SUBMITTE D THAT ALL THE 13 COMPANIES WERE HAVING DISTINCT ENTITIES AND PAN NUM BERS AND THAT THEY WERE FILING INCOME TAX RETURNS. THEIR CONFIRMATIO NS WERE FILED. DETAILS OF ALL THE PAYMENTS RECEIVED BY CHEQUE WERE ALSO GIVEN . THE AO, HOWEVER, DID NOT AGREE WITH THE ASSESSEES STAND. HE OBSERV ED THAT SINCE THE SHARE SUBSCRIBERS WERE NOT TRACEABLE, THEIR IDENTITIES DI D NOT STAND PROVED AND THEIR CREDIT WORTHINESS AND THE GENUINENESS OF THE TRANSA CTIONS COULD ALSO AS SUCH ITA 3481(DEL)2008 7 NOT BE PROVED. THE AO THUS MADE ADDITION OF THE EN TIRE FRESH CAPITAL OF RS. 92,60,000/- U/S 68 OF THE ACT. 9. THE LEARNED CIT(A), BY VIRTUE OF THE IMPUGNED OR DER, DELETED THIS ADDITION AND THIS IS HOW GROUND NOS. 6 TO 8 HAVE BE EN TAKEN BY THE DEPARTMENT BEFORE US. 10. CHALLENGING THE IMPUGNED ORDER ON THIS ISSUE, T HE LD.DR HAS ARGUED THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION CORRECTLY MADE BY THE AO; THAT THE ASSESSEE FAILED TO ESTABLISH THE CREDIT W ORTHINESS OF THE CREDITOR ; THAT THE LD. CIT(A) ERRED IN OBSERVING THAT THE IDE NTITIES OF THE CREDITOR COMPANIES HAVE BEEN ESTABLISHED IN SPITE OF THE FAC T THAT THE FACTS ON RECORD ESTABLISHED THAT THEY WERE MERE PAPER ENTITIES WHOS E PRINCIPAL OFFICERS WERE EITHER PETTY BUSINESS MEN OR LOW LEVEL EMPLOYEES WO RKING ELSEWHERE; THAT IN FACT, THESE PRINCIPAL OFFICERS HAD CLEARLY ADMITTED THAT THE CREDITOR COMPANIES HAD NO BUSINESS ACTIVITY AND THAT THEY EXISTED MER ELY FOR GIVING ACCOMMODATION ENTRIES. RELIANCE HAS BEEN PLACED B Y THE DEPARTMENT ON THE DELHI A BENCH DECISION OF THE TRIBUNAL IN M/S. B EAUTEX (INDIA)PVT. LTD. IN ITA NO. 271(DEL)2008, FOR ASSESSMENT YEAR 2005-0 6 (COPY PLACED ON RECORD), WHEREIN, UPHOLDING THE ACTION OF THE CIT(A ) IN CONFIRMING THE ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY FRO M ALLEGED SHAREHOLDERS, IT WAS HELD, FOLLOWING BHAV SHAKTI STEEL MINES ( P)LTD. V. CIT [2009] ITA 3481(DEL)2008 8 179 TAXMAN 25(DEL) AND CIT VS. DIVINE LEASING & F INANCE LTD. 298 ITR 269(DEL), THAT IN THE FACTS THAT TWO SUBSCRIBERS H AVE DENIED HAVING INVESTED IN SHARES OF THE ASSESSEE COMPANY, THE SUMMONS SENT TO TWO OTHER SHARE APPLICANTS, NAMELY, SHRI AMIT GUPTA AND SHRI SURIND ER KUMAR SRIVASTAVA, WERE RETURNED BACK UNSERVED, THE SHARE APPLICATION MONEY HAVE BEEN RECEIVED IN RESPECT OF THESE TWO PERSONS FROM THE A CCOUNT OF SHRI AGGARWAL, THE ASSESSEE COULD NOT PROVIDE THE NEW ADDRESS OF T HESE PERSONS NOR WERE THEY PRODUCED BEFORE THE AO, THE PRINCIPAL OFFICER OF THE OTHER TWO APPLICANTS, NAMELY, M/S. MLP CLASSIC FINANCE LTD. A ND M/S. RAPID IMPEX PVT. LTD., DID NOT ATTEND BEFORE THE AO DESPITE REP EATED OPPORTUNITIES, THE CIT(A) WAS CORRECT IN DIRECTING THE AO TO VERIFY TH E CONTENTION OF THE ASSESSEE AS TO WHETHER THE SHARE APPLICATION MONEY WAS RECEIVED FROM THESE TWO COMPANIES IN EARLIER YEAR AND TO DECIDE THE ISS UE ACCORDINGLY. 11. THE LEARNED DR CONTENDS THAT IN THE PRESENT CAS E ALSO, LIKE IN BEAUTIX(SUPRA), THE COMPANIES WERE NOT AVAILABLE AT THE ADDRESSES GIVEN AND THAT THEY WERE AVAILABLE ONLY ON THE SITE OF TH E ROC. 12. THE LEARNED COUNSEL FOR THE ASSESSEE,ON THE OTH ER HAND, HAS SUBMITTED , SUPPORTING THE IMPUGNED ORDER, THAT THE CASE HERE IS OF SHARE CAPITAL AND NOT OF SHARE APPLICATION MONEY; THAT IN BEAUTIX (SUPR A) WHAT INVOLVED WAS THE SHARE APPLICATION MONEY; THAT IN THE PRESENT CASE, THE SHARE CAPITAL WAS ITA 3481(DEL)2008 9 INTRODUCED; THAT THE PAYMENT WAS THROUGH CHEQUE; TH AT THE PAYERS ACCEPTED THE PAYMENT; THAT THE IDENTITY WAS DULY ESTABLISHE D; AND THAT THEREFORE, BEAUTIX (SUPRA) IS NOT APPLICABLE. 13. ON THIS ISSUE, HAVING HEARD THE PARTIES AND HAV ING PERUSED THE MATERIAL ON RECORD, WE ARE NOT CONVINCED WITH THE ASSERTIONS ON BEHALF OF THE DEPARTMENT. THE LD. CIT(A) REMANDED THE MATTER TO THE FILE OF THE AO, FINDING THAT THE PRINCIPAL OFFICERS OF THE 13 SHARE SUBSCRIBERS HAD BEEN ASKED BY THE AO TO PRODUCE AT A VERY SHORT NOTICE OF ONE DAY ON 29.12.2006, WHEREAS THE CASE WAS GETTING TIME BARRED ON 31.12.2 006. THE AO'S REMAND REPORT DATED 13.6.2008, IT IS SEEN, PROCEEDED ON TH E BASIS THAT SINCE THE SHARE SUBSCRIBERS WERE NOT TRACEABLE, THEIR IDENTITIES WE RE NOT PROVED. THE ASSESSEE , ON ITS PART, IT IS SEEN, HAD PROVIDED BE FORE THE AO, COMPLETE DETAILS OF THE SHARE SUBSCRIBERS, INCLUDING THEIR INCOME TA X RETURNS, CONFIRMATIONS AND DETAILS OF ALL THE PAYMENTS RECEIVED BY CHEQUE. NOW ONCE THE IDENTITY OF SHARE SUBSCRIBER IS ESTABLISHED, AS PER THE HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS, NO ADDITION HAD BEEN MADE IN THE HANDS OF THE ASSESSEE COMPANY. EVEN IF THE SHARE SUBSCRIBERS AR E FOUND TO BE BOGUS AND THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THE IND IVIDUAL ASSESSMENTS OF THE BOGUS SHAREHOLDERS IN ACCORDANCE WITH LAW . AS RI GHTLY NOTED BY THE LD. CIT(A) IN CIT V. DWARKADHESH FINANCIAL SERVICES, 148 ITR 54 (DEL), IT ITA 3481(DEL)2008 10 HAS BEEN HELD THAT THE ASSESSEE COMPANY HAS BEEN GI VEN THE DETAILS OF THE SHARE APPLICANTS, SUCH AS PANS, NAMES AND ADDRESSES , CONFIRMATIONS, ETC., THE IDENTITY OF THE SHAREHOLDER STANDS ESTABLISHED. IT HAS CORRECTLY BEEN OBSERVED BY THE CIT(A) THAT MERELY SINCE THIS INSPE CTOR DEPUTED WAS NOT ABLE TO TRACE THE SHAREHOLDERS AT THE ADDRESSES GIV EN, IT CANNOT AUTOMATICALLY BE SAID THAT THE SHAREHOLDERS WERE NON-EXISTENT . THE ASSESSEE PROVED OTHERWISE ON THE BASIS OF CONTEMPORARY EVIDENCES. THE PRINCIPAL OFFICERS OF THE 13 SHARE SUBSCRIBER COMPANIES HAD COME PRESENT BEFORE THE ADDITIONAL DIT, INVESTIGATION WING OF THE DEPARTMENT. THEY H AD STATED THAT THE COMPANY DID NOT HAVE ANY ACTUAL BUSINESS ACTIVITIES AND WAS ENGAGED IN GIVING ACCOMMODATION ENTRIES ONLY. SOME OF THE SA ID PRINCIPAL OFFICERS WERE PRODUCED BEFORE THE AO ALSO, WHICH PROVED THE EXISTENCE OF THE SHARE SUBSCRIBER COMPANIES. FURTHER, MOST OF THE SUBSCRI BER COMPANIES HAD FURNISHED REPLIES TO THE NOTICES ISSUED TO THEM U/S 133(6) OF THE I.T. ACT. THE ASSESSEE HAD GIVEN FURTHER EVIDENCE SUCH AS SHA RE APPLICATION, PAN, LATEST NAMES AND ADDRESSES, REGISTRATION WITH ROC A ND CONFIRMATION OF PAYMENT. IT WAS ON THE BASIS OF THIS OVERWHELMING EVIDENCE THAT THE LD. CIT(A) HELD THE IDENTITY OF SHARE SUBSCRIBERS TO HA VE BEEN PROVED. THEN, AS HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. VALUE CAPITAL SERVICES PVT. LTD., IN ITA NO. 348/2008, THERE IS AN ADDITIONAL BURDEN CAST ITA 3481(DEL)2008 11 ON THE REVENUE TO PROVE THE INVESTMENT MADE BY THE SHARE APPLICANTS ACTUALLY EMANATED FROM THE OFFERS OF THE ASSESSEE, SO THAT T HE AMOUNT WAS TO BE TREATED AS UNDISCLOSED INCOME. AS OBSERVED BY THE LD. CIT(A), IN THE PRESENT CASE, THE AO DID NOT BRING ANYTHING ON RECO RD TO THE EFFECT THAT THE INVESTMENT MADE BY THE SHARE APPLICANTS HAD COME AC TUALLY FROM THE OFFERS OF THE ASSESSEE COMPANY ONLY. 14. APROPOS BEAUTIX (SUPRA), IN THAT CASE, AS PO INTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE PAIRS WERE IN DIVIDUALS. IN THE PRESENT CASE, HOWEVER, THE PAYERS ARE COMPANIES, WHOSE EXIS TENCE AND IDENTITY STANDS DULY ESTABLISHED, AS OBSERVED HEREINABOVE. BEAUTIX (SUPRA) IS, THEREFORE, NOT APPLICABLE HERETO, ON FACTS. 15. IN VIEW OF THE ABOVE, GROUND NOS. 6 TO 8 RAISED BY THE DEPARTMENT ARE ALSO REJECTED. 16. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9.12.2009. SD/- SD/- (K.G. BANSAL) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 9.12.2009 *RM ITA 3481(DEL)2008 12 COPY FORWARDED TO: 1. DCIT, CEN.CIR.13, NEW DELHI. 2. M/S. J.H. FINVEST PVT. LTD. 13-B, 3 RD FLOOR, N.S. MARG, DARYA GANJ, NEW DELHI. 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR