ACIT, Coimbatore V. M/s. Annai Wind Farms India P. Ltd., Coimbatore

ITA 394/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61402 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-07-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 24-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VI KRAMADITYA
• Keywords: Depreciation
• Section: 115JB; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NOS.394 & 395/MDS/2012 (ASSESSMENT YEAR: 2007-08 ) ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I (1), 63, RACE COURSE, COIMBATORE-641 018. VS. M/S. ANNAI WIND FARMS INDIA P.LTD. 12, INDIA TOWERS, 2 ND STREET, GOPALAPURAM, COIMBATORE-641 018. PAN: AAECA7587P (APPELLANT) (RESPONDENT) APPELLANT BY : MR. VIKRAMADITYA, JCI T RESPONDENT BY : NONE DATE OF HEARING : 9 TH JULY, 2012 DATE OF PRONOUNCEMENT : 30 TH JULY, 2012 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE PRESENT SET OF APPEALS I.E. ITA NOS. 394/MDS/2 012 & 395/MDS/2012 HAVE BEEN FILED BY THE REVENUE IMPU GNING THE ORDER OF THE CIT(A)-I, COIMBATORE DATED 29.11. 2011 & 30.11.2011 RESPECTIVELY. 2. BOTH THESE APPEALS HAVE BEEN FILED WITH A DELAY OF 13 DAYS. AFFIDAVIT FOR CONDONATION OF DELAY, CITING REASONS FOR THE DELAY HAVE ALSO BEEN FILED ALONG WITH THE APPEA LS OF THE REVENUE. BEING SATISFIED WITH THE REASONS CAUSING DELAY AND ITA NO.394 & 395/MDS/2012 2 IN THE INTEREST OF JUSTICE, WE CONDONE THE DELAY OF 13 DAYS IN FILING OF THESE APPEALS AND ADMIT THE SAME FOR DIS POSAL ON MERITS. 3. THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2007-08 ON 16.10.2007 ADMITTING NIL INCOME. TH E ASSESSEE FURTHER CLAIMED CARRY FORWARD OF UNABSORB ED DEPRECIATION OF ` 98,433/- FOR THE YEAR AND NIL BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE CASE OF THE AS SESSEE WAS TAKEN UP FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) DATED 11.09.2008 WAS ISSUED TO THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED THAT THE ASSESSEE HAD TAKEN FRESH LOANS AND SHARE APPLIC ATION MONEY TO THE TUNE OF ` 71,68,000/- AND ` 49,94,000/- RESPECTIVELY. THE ASSESSING OFFICER VERIFIED THE AM OUNT RECEIVED FROM VARIOUS PARTIES ON ACCOUNT OF LOANS A ND SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. SOME OF THE CREDITORS AND THE INVESTORS CONFIRMED THE SAME. SOM E OF THE AMOUNTS RECEIVED BY THE ASSESSEE WERE THROUGH ACCOU NT PAYEE CHEQUE AND DEMAND DRAFTS. THE AUTHORISED ITA NO.394 & 395/MDS/2012 3 REPRESENTATIVE OF THE ASSESSEE CONCEDED BEFORE THE ASSESSING OFFICER THAT SOME OF THE AMOUNTS WHICH W ERE NOT EXPLAINED ARE TO BE ASSESSED UNDER SECTION 68 OF TH E ACT. AS PER THE LIST SUBMITTED BY THE A.R., SHARE APPLICATI ON MONEY TO THE TUNE OF ` 25,02,000/- AND UNSECURED LOANS ` 11,70,000/- WERE ADDED UNDER SECTION 68 OF THE INCOME TAX ACT. THE AMOUNTS WERE ADDED TO THE INCOME OF THE ASSESSEE ON THE BASIS OF THE ADMISSION OF AR OF THE ASSESSEE. PENAL TY PROCEEDINGS UNDER SECTION 271(1)(C) WERE ALSO SEPAR ATELY INITIATED AGAINST THE ASSESSEE. AGGRIEVED AGAINST THE ORDERS OF THE ASSESSING OFFICER, THE ASSESSEE CHALLENGED B OTH THE ORDERS I.E. ORDER DATED 19.12.2009 UNDER SECTION 14 3(3) AND ORDER DATED 28.6.2010 UNDER SECTION 271(1)(C) BEFO RE THE CIT(A) VIDE TWO SEPARATE APPEALS. 4. THE CIT(A) VIDE ORDER DATED 29.11.2011 RELYING O N THE JUDGEMENT OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD., REPORTED AS 216 CTR 195 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND T HE ADDITION MADE ON ACCOUNT OF SHARE APPLICATION MONEY UNDER SE CTION ITA NO.394 & 395/MDS/2012 4 68 WAS DELETED BY THE CIT(A), WHEREAS THE AMOUNT RE CEIVED BY THE ASSESSEE ON ACCOUNT OF UNSECURED LOANS TO TH E TUNE OF ` 11,70,000/- WAS CONFIRMED. THE CIT(A) VIDE ORDER DATED 30.11.2011 DIRECTED T HE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED UNDE R SECTION 271(1)(C) OF THE ACT. NOW, THE REVENUE HAS PREFERR ED THESE TWO APPEALS BEFORE THE TRIBUNAL ASSAILING THE AFOR EMENTIONED ORDERS OF THE CIT(A). 5. THE D.R. SUBMITTED THAT THE ADDITIONS WERE MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE ADMISSIONS MA DE BY THE A.R. OF THE ASSESSEE. MOREOVER, THE A.R. COULD NOT JUSTIFY THE AMOUNT RECEIVED UNDER THE HEAD SHARE APPLICATION M ONEY TO THE TUNE OF ` 25,02,000/-. THE D.R. FURTHER CONTENDED THAT THE CIT(A) HAS ERRED IN RELYING ON THE JUDGEMENT OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF M/S. LOVELY E XPORTS (P)LTD. (SUPRA). HE FURTHER SUBMITTED THAT THE CIT (A) HAS ERRED IN DELETING THE PENALTY LEVIED BY THE ASSESSI NG OFFICER UNDER SECTION 271(1)(C) OF THE ACT. ITA NO.394 & 395/MDS/2012 5 6. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE CIT(A) AND THE ASSESSMENT ORDER. A PERUSAL OF THE SAME SHOWS THA T AS AGAINST THE TOTAL APPLICATION MONEY ` 49,94,000/- RECEIVED BY ASSESSEE, THE ASSESSING OFFICER WAS ABLE TO VERIFY THE SOURCE/INVESTORS TO THE TUNE OF ` 24,92,000/-. AS PER THE ALLEGED ADMISSION OF THE ASSESSEE, SOURCE OF INVEST MENT TO THE TUNE OF ` 25,02,000/- COULD NOT BE EXPLAINED, THEREFORE, OFFERED FOR ADDITION UNDER THE PROVISIONS OF SECTIO N 68 OF THE ACT. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF LOVELY EXPORTS P.LTD. (SUPRA) HAS HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLE GED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE W ITH LAW. THUS, THE AMOUNT RECEIVED BY ASSESSEE AS SHARE AP PLICATION MONEY CANNOT BE REGARDED AS UNDISCLOSED INCOME O F THE ASSESSEE. THEREFORE, ADDITION UNDER SECTION 68 OF T HE ACT CANNOT BE MADE ON THIS ACCOUNT. IN VIEW OF OUR ABOV E ITA NO.394 & 395/MDS/2012 6 FINDINGS, WE DISMISS THE APPEAL OF THE REVENUE IN I TA NO.394/MDS/2012. 7. HOWEVER, IT IS MADE CLEAR THAT AS PER THE LAW L AID DOWN BY THE HONBLE APEX COURT IN LOVELY EXPORTS P.LTD.( SUPRA) THE DEPARTMENT IS AT LIBERTY TO PROCEED IN ACCORDAN CE WITH LAW AGAINST THE INDIVIDUALS/INVESTORS WHOSE NAMES HAVE BEEN GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER AS I NVESTORS AND HAVE NOT CONFIRMED THEIR INVESTMENT IN THE ASSE SSEE COMPANY. 8. IN CONSEQUENCE TO THE ABOVE FINDINGS IN ITA NO.394/MDS/2012, THE APPEAL OF THE REVENUE - ITA NO.395/MDS/2012 ASSAILING THE ORDER OF THE CIT(A) DELETING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS A LSO DISMISSED. 9. ACCORDINGLY, WE CONFIRM THE ORDERS OF THE CIT(A ) AND DISMISS BOTH THE APPEALS OF THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 30 TH DAY OF JULY, 2012 AT CHENNAI. SD/- SD/- ( ABRAHAM P.GEORGE ) ( VIKAS AWASTHY ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 30 TH JULY, 2012. SOMU ITA NO.394 & 395/MDS/2012 7 COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F .