SECURE STOCK FINANCE CO P LTD., Jaipur V. ITO, Jaipur

ITA 354/JPR/2013

• Counselvise Citation: 35423114 RSA 2013
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-06-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: MANISH AGARWAL
• Keywords: Reassessment proceedings
• Section: 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI HARI OM MARATHA AND SHRI N.K. SAI NI) ITA NO. 354/JP/2013 ASSESSMENT YEAR : 2003-04 PAN: AACCS 5741 D M/S. SECURE STOCK FINANCE CO. (P) LTD. VS. THE IT O 5, KISHORE NIWAS, TRIPOLIA BAZAR WARD- 1 (3) JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANISH AGARWAL DEPARTMENT BY: SHRI D.C. SHARMA DATE OF HEARING: 13-01-2014 DATE OF PRONOUNCEMENT: 20 -01-2014 ORDER PER HARI OM MARATHA, JM:- THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEA R 2003-04 IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 03-01-2013. 2.1 FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPE AL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE R EOPENING OF ASSESSMENT PROCEEDINGS U/S 148 OF THE I.T. ACT , 19 61 THUS THE CONSEQUENT ORDERS PASSED U/S 148/143(3) DESERVES TO BE HELD BAD IN LAW. 1.1 THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING T HE INITIATION OF THE PROCEEDINGS U/S 148 OF THE I.T. A CT, 1961 WITHOUT AT ALL VERIFYING THE SUBJECTIVE SATISFACTIO N BASED ON THE APPRECIATION OF THE EVIDENCE IN THE POSSESSION OF T HE LD. AO 2 WHO HAS SIMPLY PROCEEDED WITH THE BORROWED SATISFAC TION ON THE INFORMATION PROVIDED BY SOME OTHER OFFICIAL WIT HOUT IN ANY MANNER RECORDED HIS OWN INDEPENDENT SATISFACTION, T HUS THE CONSEQUENT ORDER PASSED DESERVES TO BE HELD BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE A DDITION OF RS. 4,50,000/- MADE ON ACCOUNT OF SHARE CAPITAL RE CEIVED BY CONSIDERING THE SAME AS UNEXPLAINED WITHOUT PROPERL Y CONSIDERING THE SUBMISSIONS MADE, EVIDENCES ADDUCED AND THE LEGAL POSITION IN RESPECT OF TO THE CREDITS ON ACC OUNT OF SHARE CAPITAL BEING RECEIVED FROM PRIVATE LIMITED COMPANI ES AND HAS FURTHER ERRED IN IGNORING THE EFFECTIVE COMPLIANCE MADE BY THE ASSESSEE UNDER THE COMPANIES ACT, 1956 THUS THE ENT IRE ADDITION SO MADE DESERVES TO BE DELETED IN TOTO. 3. THE LD. CIT(A) HAS GROSSLY ERRED IN IGNORING THE BINDING DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF M/S. LOVELY EXPORTS (P) LTD. REPORTED IN 216 CTR 195 SQU ARELY APPLICABLE AS THE ASSESSEE HAS FILED THE NECESSARY CONFIRMATION AND OTHER PARTICULARS OF SHARE HOLDERS AND INCIDENT ALLY ALL THE SUBSCRIBERS ARE PRIVATE LIMITED COMPANIES AND THE A PPELLANT HAD RECEIVED THE APPLICATION MONEY THROUGH BANKING CHANNEL, THUS THE CONSEQUENT ADDITION DESERVES TO BE DELETED . 4. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND, OR ABANDON ANY OF THE GROUNDS OF APPEAL EITHER BEFO RE OR AT THE TIME OF HEARING OF APPEAL. 2.2 BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-0 4 ON 2-12-2003 DECLARING TOTAL INCOME OF RS. 6,068/-. SUBSEQUENTLY, IT WAS N OTICED THAT THIS COMPANY IS ONE OF THE BENEFICIARIES OF THE ENTRY PROVIDED B Y VARIOUS BOGUS ENTRY PROVIDERS LOCATED IN NEW DELHI. IT WAS FOUND THAT T HE ASSESSEE HAS AVAILED TWO ENTRIES PROVIDED BY M/S. WEAL IRON & STEEL CO. (P) LTD., NEW DELHI FOR 3 RS. 2.00 LACS TAKEN THROUGH ITS BANK ACCOUNT NO. 33 18 AND M/S. CITO GARMENTS (P) LTD., NEW DELHI FOR RS. 2.50 LACS THRO UGH ITS BANK ACCOUNT NO. 3324. THIS AMOUNTS HAVE BEEN CREDITED IN ASSESSEE'S BANK ACCOUNT NO. CA 252352 WITH BANK OF BARODA, KISHORE NIWAS, TRIPOLI A BAZAR, JAIPUR. AS PER RECORD, THE ASSESSEE MAY HAVE PAID COMMISSION OF RS . 1125/- FOR ARRANGING THESE ENTRIES. CONSEQUENTLY, THE AO PROCEEDED U/S 1 47 OF THE ACT READ WITH SECTION 148 OF THE ACT AND ISSUED A NOTICE U/S 148 OF THE ACT ON 25-03-2010 WHICH WAS DULY SERVED ON THE ASSESSEE ON 25-03-2010 ITSELF. THE ASSESSEE COMPLIED WITH THE NOTICE STATING THAT THE RETURN OF INCOME ALREADY FILED U/S 139(1) OF THE ACT MAY BE TREATED AS RETURN FILED IN COMPLIANCE OF THIS NOTICE. WHEN ASKED THE AO SUPPLIED THE COPIES OF REASONS RE CORDED. THE ASSESSEE OBJECTED TO INITIATION OF REASSESSMENT PROCEEDINGS WHICH WAS DISPOSED OFF SEPARATELY AS PER LAW. THE CASE OF ASSESSEE COMPANY IS THAT IT HAD RECEIVED THE AMOUNTS AS SHARE APPLICATION MONEY. HOWEVER, TH E AO PROCEEDED TO VERIFY THE AMOUNTS WHICH HAVE BEEN RECEIVED TOTALIN G TO RS. 4.50 LACS AS SHARE APPLICATION MONEY. THE SUBMISSION OF THE ASSE SSEE WAS CONSIDERED. HOWEVER, THE AO WAS NOT SATISFIED AND ACCORDINGLY A DDED THE SUM OF RS. 4,51,125/- AS ASSESSEE'S UNEXPLAINED INCOME. 2.3 AGGRIEVED, THE ASSESSEE FILED AN APPEAL AND TH E LD. CIT(A) HAS GIVEN A PART RELIEF TO THE ASSESSEE BY DELETING THE ADDIT ION OF RS. 1,125/- MADE ON ACCOUNT OF COMMISSION PAID. HOWEVER, THE ADDITION OF RS. 4.50 LACS HAS BEEN CONFIRMED. 4 2.4 AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAV E FOUND THAT THESE ARE SHARE APPLICATION MONEY. THE ASSESSEE HAS PROVIDED COMPLETE ADDRESSES AND PERMANENT ACCOUNT NUMBERS (PANS) TO THE AO. THE SH ARE APPLICATION MONEY CANNOT BE TAXED IN THE HANDS OF THE COMPANY I N CASE THE SHARE APPLICANTS ARE IDENTIFIED AND IT IS FOUND THAT THE SHARE APPLICANTS ARE IDENTIFIED. ACCORDINGLY, IN VIEW OF THE DECISION OF HON'BLE APEX COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. , 216 CTR 195 AND OTHER DECISIONS OF THIS VERY HON'BLE JURISDICTIONAL HIGH COURT REND ERED IN THIS CASE, WE ARE OF THE CONSIDERED THAT THE IMPUGNED ADDITION OF RS. 4.50 LACS IS NOT CALLED FOR AND WE ORDER THE DELETION OF ADDITION SUSTAINED BY THE LD. CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-01-2014. SD/- SD/- (.N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMEBR JAIPUR DATED: 20 TH JAN 2014 *MISHRA COPY FORWARDED TO:- BY ORDER 1. M/S. SECURE STOCK FINANCE CO. (P) LTD., JAIPUR 2. THE ITO, WARD- 1 (3) JAIPUR 3. THE LD. CIT(A) 4. THE DR 5. THE GUARD FILE (IT NO.354/JP/13) 6. THE CIT A.R. ITAT: JAIPUR 5 6 7