VERONICA CORPORATE CONSULTANTS PVT. LTD., MUMBAI V. ITO- 1(3)(4), MUMBAI

ITA 4135/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0681 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 05-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Unexplained cash credit; Bogus Share capital; Source of fund; Accommodation entries
• Section: 143(3); 142(1); 147; 68

Judgement Text

IN T HE INCOME TAX APPELLATE TRIBUNA L F BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM AND SHRI AMARJIT SINGH , JM / I .T.A. NO. 4135 / M/ 20 1 7 ( / ASSESSMENT YEAR: 20 0 9 - 10 ) M/S. VERONICA CORPORATE CONSULTANTS P. LTD. 301, 3 RD FLOOR, SHREEJI CHAMBERS, JANMABHOOMI MARG, FORT, BALLARD ESTATE, MUMBAI - 400001 / VS. ITO - 1(3)(4) AAYAKA R BHAVAN, MK MARG, MUMBAI - 400020 ./ ./ PAN/GIR NO. : AACCV 7353 C ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 23.11 .2017 / DATE OF PRONOUNCEMENT : 12.01 .2018 / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28 .0 4 .201 7 PASSED BY THE COMMIS SIONER OF INCOME TAX (CENTRAL) - 3 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 200 9 - 10 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING G ROUNDS: - GROUNDS OF APPEAL AGAINST THE ORDER DATED 28.04.2017 PASSED BY THE LEARNED INCOME - TAX OFFICER - 1 (3) (4), MUMBAI. 1. RE - OPENING OF ASSESSMENT U/S 147 IS BAD IN LAW: ASSESSEE BY: SHRI MADHUR AGARWAL (AR) DEPARTMENT BY: MS. POOJA SWAROOP (DR) ITA. NO. 4135/M/2017 A.Y. 2009 - 10 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE APPELLANT COMPANY SUBMITS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI HAS ERRED IN UPHOLDING THE REOPENING OF THE ASSESSMENT U/S 147 MADE BY THE LEARNED ASSESSING OFFICER ON THE BASIS OF REOPENING OF THE ASSESSMENT FOR ASSESSMENT YEAR 200$ - 2009 AND THERE FORE, IT IS BAD IN LAW AND THE ASSESSMENT SO MADE U/S. 143(3) R. W. S 147 BE QUASHED. 2. UNEXPLAINED CASH CREDITS U/S 68 OF RS. 25,00,0001 - : ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT COMPANY SUBMITS THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS), MUMBAI HAS ERRED IN UPHOLDING THE ADDITION OF SHARE APPLICATION MONEY OF RS. 25.00,000/ - RECEIVED FROM POORVI REALTY PRIVATE LIMITED (FORMERLY KNOWN AS PAREKH ESTATE AND PROPERTIES PRIVATE LIMITED) AS UNEXPLAINED CASH CREDITS U/S 68 OF THE IN COME TAX ACT, 1961 MADE BY THE ASSESSING OFFICER. THE APPELLANT COMPANY SUBMITS THAT THE ADDITION OF RS. 25,00,000/ - MADE U/S 68 OF THE INCOME TAX ACT. 1961 BE DELETED. 3. THE APPELLANT CRAVES LEAVE TO ADD TO ALTER AMEND AND OR DELETE ANY OR ALL OF THE ABO VE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 3 . THE BRIEF FACTS OF THE CASE ARE THAT A N INFORMATION WAS RECEIVED IN WHICH IT WAS CONVEYED THAT SOME ACCOMMODATION ENTRIES AMOUNTING TO RS.25,00,000/ - WERE GIVEN BY THE GROUP CONCERNS/PERSONS UNDER THE CONTROL OF PRAVEEN KUMAR JAIN, TO THE ASSESSEE, VERONICA CORPORATE CONSULTANTS PVT. LTD, PAN NO. AACCV7353C DURING THE PERIOD RELEVANT TO A.Y. 2008 - 09. FRO M THE ITD DETAILS, IT WAS SEEN THAT THE ASSESSEE COMPANY WAS INCORPORATED ON 03.10.2007 I.E., THE F.Y. 2007 - 08 AND THE ASSESSEE COMPANY DID NOT FILED THE RETURN OF INCOME FOR THE A.Y. 2008 - 09 AND EVEN FOR A.Y. 2009 - 10 WHICH WAS MANDATORY. THE PENALTY WAS S OUGHT TO BE INITIATED U/S 271F OF THE I.T. ACT, 1961 FOR NON - FILING OF THE RETURN OF INCOME FOR THE A.Y. 2009 - 10. IN VIEW OF THE SAID INFORMATION ITA. NO. 4135/M/2017 A.Y. 2009 - 10 3 AN ACTION U/S 147/148 OF THE I.T. ACT, 1961 WAS TAKEN . N OTICE DATED 30.03.2015 WAS ISSUED AND SERVED UPON THE ASSESSEE. THEREAFTER, NOTICE U/S 142(1) OF THE ACT DATED 29.09.2015 ALONG WITH ANNEXURE WAS ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF RENDERING CORPORATE CONSULTANCY. THE ASSESSEE IS THE RESIDENT COMPANY HAVING THE SOURCES OF INCOME AS DETAILED IN THE ORDER/COMPUTATION I N VIEW OF THE BALANCE - SHEET . T HERE WAS ANNEXED OF SHARE APPLICATION MONEY AMOUNTING TO RS.25,00,000/ - DURING THE F.Y. 2008 - 09 . THE TRANSACTION WAS MENTIONED AS SHARE APPLICATION BUT WAS NOT CLASS IFIED UNDER SCHEDULE - A WHICH FOR THE SHARE MONEY RELATED CLASSIFICATION BUT WA S DETAILED UNDER UNSECURED LOANS. THE MONEY RECEIVED AS THE SHARE APPLICATION MONEY OR AS A LOAN HAVING DIFFERENT IN NATURE AND THE CHARACTERISTICS. THE ASSESSEE RECEIVED THE AMOUNT OF RS.25,00,000/ - ON 12.05.2008 FROM THE UNRELATED ENTITY AND THE ASSESSEE HAS MADE THE PAYMENT OF THE SAME AMOUNT OF RS.25,00,000/ - ON 20.05.2008 TO ASHAPURA DEVELOPERS FOR THE STATED OBJECT OF PAYMENT TOWARDS THE PURCHAS E OF PROPERTY. IN THE EARLIER YEAR ALSO THE ASSESSEE RECEIVED THE AMOUNTS OF RS.25,00,000/ - AND ALSO RS.10,00,000/ - FROM THE UNRELATED ENTITIES DURING THE LAST FINANCIAL YEAR. THE CASE FOR THE EARLIER YEAR WAS ALSO UNDER SCRUTINY, THEREAFTER, THE NOTICE WA S GIVEN AND AFTER THE RECEIPT OF THE NOTICE , THE AMOUNT TO THE TUNE OF RS. 25,00,000/ - WAS ADDED TO THE INCOME OF THE ASSESSEE. THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AND ADDED TO THE INCOME OF THE ASSESSEE. FEELING AGGRIEVED, THE ASSESSEE FILED AN ITA. NO. 4135/M/2017 A.Y. 2009 - 10 4 A PPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION, THEREFORE, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1: - 4 . THE LD. REPRESENTATIVE OF THE ASSESSEE DID NOT PRESS THE ISSUE, THEREFORE, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE REVENUE BEING NOT PRESSED. ISSUE NO.2: - 5. UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE ADDITION AN AMOUNT OF RS.25,00,000/ - AS UNEXPLAINED CASH CREDITS U/S 68 OF THE I.T. ACT, 1961 UNDER THE YEAR OF CONSIDERATION. THE ASSESSEE RECEIVED AN AMOUNT OF RS.25,00,0 00/ - FROM POORVI REALTY P. LTD. (FORMERLY KNOWN AS PAREKH ESTATE AND PROPERTIES P. LTD.). THE SAID AMOUNT WAS RECEIVED AND CLASSIFIED AS UNSECURED LOAN IN SCHEDULE B BY THE APPELLANT COMPANY . T HE SAID AMOUNT WAS TAKEN BY THE ASSESSEE FROM POORVI REALTY P. LTD. (FORMERLY KNOWN AS PARKEEH ESTATE & PROPERTIES P. LTD.) BY ACCOUNT PAYEE CHEQUE BEARING NO.961678 DATED 10.05.2008 DRAWN ON ICICI BANK, NARIMAN POINT, MUMBAI BRANCH . AFTER RECE IPT OF THE NOTICE , THE ASSESSEE PROVED THE IDENTITY OF THE CREDITOR, CREDIT WORTHINESS AND GENUINENESS . T HE ASSESSEE PLACED ON RECORD THE COPY OF CERTIFICATE OF INCORPORATION DATED 29.04.2009, COPY OF INCOME TAX RETURN, COPY OF CONFIRMATION, COPY OF PAN CARD AND COPY OF LETTER OF CONFIRMATION FROM POORVI REALTY P. LTD. FOR THE ITA. NO. 4135/M/2017 A.Y. 2009 - 10 5 IDENTITY OF THE CREDITOR. THE ASSESSEE ALSO PLACED ON RECORD THE AUDITED ACCOUNTS FOR THE F.Y. 2008 - 09 FOR THE CREDIT WORTHINESS OF THE CREDITOR. THE ASSESSEE ALSO PRODUCED THE DETAIL OF LOAN AND ADVANCES . T HE ASSESSEE ALSO PLACED ON RECORD THE BANK - STATEM ENT OF POORVI REALTY P. LTD. REFLECTING THE AMOUNT OF RS. 25,00,000/ - ADVANCED TO THE APPELLANT COMPANY. THE ASSESSEE ALSO PRODUCED THE COPY OF CHEQUE OF RS.25,00,000/ - ISSUED BY POORVI REALTY P. LTD. TO THE ASSESSEE COMPANY. THE ASSESSING OFFICER RAISED TH E ADDITION OF AN AMOUNT TO RS.25,00,000/ - U/S 68 OF THE I.T. ACT, 1961 ON ACCOUNT OF SAID AMOUNT WHICH HAS BEEN SHOWN AS SHARE APPLICATION IN THE SCHEDULE OF UNSECURED LOAN AND THE LENDER COMPANY M/S. POORVI REALTY P. LTD. HAS SHOWN THE SAID AMOUNT PAID TO THE APPELLANT UNDER THE HEAD OF LOAN AND ADVANCED. IT SEEMS IT IS A CASE OF WRONG ENTRY IN THE BOOKS OF ACCOUNT. THERE WAS NO OTHER FINANCIAL TRANSACTION IN THAT YEAR . T HE IDENTITY OF THE COMPANY WHO HAS GIVEN THE LOAN , GENUINENESS OF THE TRANSACTION AND THE CREDIT WORTHINESS LENDER HAVE DULY BEEN PROVED ON PROVED ON RECORD, T HEREFORE, NO ADDITION CAN BE RAIS ED U/S 68 OF THE I.T. ACT, 1961 I N VIEW OF LAW SETTLED IN CIT VS. GAGAN DEEP INFRASTRUCTURE PVT. LTD. ITA. NO. 1613 OF 2014 DATED 20.03.2017 AND DCIT CENTRAL CIRCLE 3(3)(1), MUMBAI VS. M/S. RELIANCE UTILITIES P. LTD AND M/S. RELIANCE PORTS AND TERMINALS LTD. (ITA. NO. 223/M/2016, 224/M/2016 AND M/S. JIGAR PALM RESORTS P. LTD. VS. ITO 8(2)(1), MUMBAI (7628/M/2014) . THE AMOUNT WAS RECEIVED AND RETURN ED. T HE ADDITION RAISED MERELY ON THE BASIS OF WRONG ENTRY ITA. NO. 4135/M/2017 A.Y. 2009 - 10 6 IN THE OTHER HAND DOESNT SEEMS JUSTIFIABLE FOR THE ADDITION U/S 68 OF THE I.T. ACT. ACCORDINGLY, WE DELETE THE SAID ADDITION AND ALLOWED THE CLAIM OF THE ASSESSEE. 6 . IN THE RESULT , APPEAL OF THE ASSE SSEE IS HEREBY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 12.01 .2018 SD/ - SD/ - ( R. C. SHARMA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 12.01 . 2018 VIJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI