ITO 10(2)(2), MUMBAI V. LOTUS ENERGY INDIA P.LTD, MUMBAI

ITA 3509/MUM/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7950 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Tax effect; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH MUMB AI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 3509/MUM/2015 (ASSESSMENT YEAR 2010-11 ) ITO- 10(2)(2) ROOM NO. 408, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, CHURCHGATE, MUMBAI-400020. VS. M/S LOTUS ENERGY INDIA PVT. LTD. 409, LAXMI PLAZA, LAXMI INDUSTRIAL ESTATE, LINK ROAD, ANDHERI (E), MUMBAI-400072. PAN: AABCL0119K APPELLANT RESPONDE NT APPELLANT BY : SHRI LOVE KUMAR (DR) RESPONDENT BY : SHRI SANJAY R. PARIKH (AR) DATE OF HEARING : 18.09.2018 DATE OF PRONOUNCEMEN T : 18.09.2018 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF INCOME- TAX ACT IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-17, MUMBAI DATED 09 .03.2015 FOR ASSESSMENT YEAR 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN THAT THE ASSESSEE HAS DISCHARGED IT S BURDEN OF PROOF AS TO THE GENUINENESS OF THE TRANSACTION AND OFFERED A VALID EXPLANATION WITHOUT APPRECIATING THE FACT THAT SAME TRANSACTION HAS BEE N ACCOUNTED AS SUBSCRIPTION TO SHARE CAPITAL BY THE ASSESSEE AND A S UNSECURED LOAN BY THE OTHER PARTY' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN THAT THE ASSESSEE HAS PROVED CREDIT WORTHINESS OF THE ITA NO.3509/MUM/2015- 3509 MUM 2015-M/S LOTUS ENERGY INDIA PVT. LTD. 2 SUBSCRIBER WITHOUT APPRECIATING THE FACTS ESTABLISH ED BY THE AO CLEARLY PROVE THAT SUBSCRIBER CREDITWORTHINESS IS CLEARLY I N DOUBT AND ASSESSEE COULD NOT EXPLAIN THE SAME TO THE SATISFACTION OF THE ASS ESSING OFFICER AS ENVISAGED UNDER SECTION 68 OF THE INCOME TAX ACT,1961.' 3. WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETI NG THE ADDITION U/S 68 OF THE ACT BY HOLDING THAT AO HAS NOT DONE ADEQUATE IN QUIRIES, IGNORING THE FACTS THAT CIT(A)HAS THE OBLIGATION TO CONDUCT PROP ER ENQUIRY ON FACTS OR REMAND THE MATTER TO THE AO AS HELD BY HONBLE DEHI HIGH COURT IN THE CASE OF CIT VS JANSAMPARK ADVERTISING & MARKETING PVT. L TD. (ITA NO.525 OF 2011) DELIVERED ON 11.03.2015?' 2. AT THE OUTSET OF HEARING, THE LD. AUTHORIZED REPRES ENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT THE TAX EFFECT INVOLVED IN TH E PRESENT APPEAL IS ONLY RS. 18,54,000/-, WHICH IS LESS THAN THE MONETARY LI MIT FIXED BY CBDT IN ITS CIRCULAR NO. 3/2018 DATED 11 TH JULY 2018 AND THEREFORE, APPEAL OF THE REVENUE IS NOT MAINTAINABLE. THE LD. AR OF THE ASSE SSEE ALSO FURNISHED THE WORKING OF TAX EFFECT IN THE FOLLOWING MANNER: ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY 6,000,000 TAX @ 30% 1,800,000 ADD: SURCHARGE 0 ADD: EDUCATION AND HIGHER EDUCATION CESS 540 00 1,854,000 3. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE (DR) FOR THE REVENUE AFTER GOING THROUGH THE GROUNDS OF APPEAL A ND THE WORKING OF TAX EFFECT ACCEPTED THE CONTENTION OF LD. AR OF THE ASS ESSEE THAT TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS LESS THAN THE MON ETARY LIMIT FIXED BY CBDT IN ITS CIRCULAR NO. 3/2018 DATED 11 TH JULY 2018. ITA NO.3509/MUM/2015- 3509 MUM 2015-M/S LOTUS ENERGY INDIA PVT. LTD. 3 4. CONSIDERING THE CONTENTION OF BOTH THE PARTIES THA T TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS LESS THAN RS. 20,00,000/-. TH EREFORE, THE APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/09/2018. SD/- SD/- G.S. PANNU PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE:18.09.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR C BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI