Appeal details
Counselvise Citation
[2010] 136 COUNSELVISE.COM (IT) 8061 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
03-03-2010
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
D
Next Hearing Date
03-03-2010
Assessment Year
2006-2007
Appeal Filed On
04-11-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI D.R.SINGH, JM AND SHRI R.C.SHARMA, AM ITA NO.4261/DEL/2009 ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-4(3), NEW DELHI. VS. M/S LABHI GENERAL TRADING COMPANY PVT.LTD., 204, 2 ND FLOOR, PRAKASH HOUSE, 4379/4B, ANSARI ROAD, DARYA GANJ, NEW DELHI 110 002. PAN NO.AAACL9814C. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.K.GUPTA, DR. RESPONDENT BY : SHRI VED JAIN AND MS.RANO JAIN, CAS . ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 17.8.2009 FOR AY 2006-07 IN THE MATTER OF ORDER PAS SED U/S 143(3) OF THE IT ACT. 2. THE ONLY GRIEVANCE OF THE REVENUE RELATES TO DEL ETION OF ADDITION MADE U/S 68 OF THE IT ACT ON ACCOUNT OF SHARE CAPITAL. 3. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PRIVAT E LIMITED COMPANY WHICH WAS INCORPORATED ON 6.4.2004 AND THIS IS THE SECOND YEA R OF ITS OPERATIONS. THE COMPANY IS ENGAGED IN TRADING OF FREELY, TRANSFERAB LE/TRADABLE IMPORT LICENSE. DURING THE COURSE OF ASSESSMENT, AN ADDITION OF RS. 7,00,000/- UNDER SECTION 68 OF THE IT ACT WAS MADE ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY AND OF RS.7,000/- ON ACCOUNT OF COMMISSION TO BE PAID BY T HE ASSESSEE COMPANY TO SECURE SHARE APPLICATION MONEY RESPECTIVELY. THE AO FOUND THAT OUT OF THIS INCREASED CAPITAL, THE ADDITION WAS MADE OF RS.7,00,000/- BEI NG 7,000 SHARES ALLOTTED TO S/SHRI MANOJ KUMAR SIMAR (STATED AS MANOJ KUMAR SIN AR), SANWAR MAL PAREEK ITA-4261/DEL/2009 2 (STATED AS SANSAR MAL PAREEK) AND RAMAVATAR MUNDHAR A (STATED AS RAMAVATAR MANCHANDA) @ RS.10/- PER SHARE WITH A PREMIUM OF RS .90/- PER SHARE ON THE GROUND THAT THESE THREE SHAREHOLDERS EXISTS IN THE LIST OF 26 SHAREHOLDERS WHO HAD SUBSCRIBED FOR SHARE CAPITAL IN A.Y. 2005-06 AS WEL L WHEN THE ADDITION WAS MADE AND THEREFORE, THE ADDITION SHOULD BE MADE IN THIS YEAR AS WELL IRRESPECTIVE OF THEIR CONFIRMATION SUBSTANTIATED WITH RELEVANT DOCUMENTS; SERVICE AND COMPLIANCE OF NOTICE U/S 133(6), PARTICULARS OF ASSESSMENT OF THE SAID SHAREHOLDERS AND DETAILS OF ALLOTMENT. 4. AT THE OUTSET, LEARNED AR PLACED ON RECORD THE O RDER OF ITAT IN ASSESSEES OWN CASE FOR AY 2005-06 WHEREIN VIDE ORDER DATED 18 .12.2009, SIMILAR ADDITION MADE WITH RESPECT TO SHARE CAPITAL RECEIVED FROM TH E VERY SAME PERSONS WAS DELETED BY THE CIT(A) AND THE SAME WAS CONFIRMED BY THE TRIBUNAL. 5. WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL I N ASSESSEES OWN CASE AND FOUND THAT SIMILAR ADDITION HAS BEEN DELETED AFTER HAVING THE FOLLOWING OBSERVATIONS:- THUS, THE FINDING WAS THAT WHEN DOCUMENTARY EVIDENCE WAS PLACED ON RECORD TO PROVE THE IDENTITY OF THE SHAREHOLDERS INCLUDING THEIR PERMANENT ACCOUNT NUMBERS/GIR NU MBERS AND FILING OF OTHER DOCUMENTARY EVIDENCE IN THE FORM OF RATION CARD ETC., WHICH HAD NOT BEEN CONTROVERTED OR DISPR OVED, NO INTERFERENCE WAS CALLED FOR. IN THE CASE OF LO VELY EXPORT (P) LTD. (SUPRA), THE FINDING OF HONBLE SUPREME COURT IS R EPRODUCED AS UNDER:- CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDISCLOSED INCOME UNDER S. 68 OF IT ACT, 1961? WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON T HAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIV EN TO THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT. SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS D ISMISSED. ITA-4261/DEL/2009 3 THUS, THE FINDING WAS THAT IF NAMES AND ADDRES SES HAVE BEEN FURNISHED, THE ACTION CAN BE TAKEN ONLY IN TH E CASE OF THE SHAREHOLDER WHO CONFIRMED THAT THE CONTRIBUTION WAS MADE. 2.4 COMING TO THE FACTS OF THIS CASE, THE ASS ESSEE HAS FURNISHED THE NAMES AND ADDRESSES TO THE AO. THE CONTRIBUTORS RESPONDED TO THE NOTICES ISSUED BY THE AO AN D FURNISHED VARIOUS DETAILS SUCH AS COPIES OF APPLICATI ON FORM, ALLOTMENT LETTER, PERMANENT ACCOUNT NUMBER, BANK STATEMENT , SOURCE OF INCOME AND INCOME-TAX RETURN ALONG WITH PROFIT AND LOSS ACCOUNT AND BALANCE-SHEET. THERE IS A DISPUTE WHETHER 10 OR 22 PRINCIPAL OFFICERS WERE PRODUCED BY THE ASSESSEE BEFORE THE AO. NONETHELESS, THE FACT IS THAT STATEMENT OF ONLY SIX PERSONS COULD BE RECORDED DUE TO PAUCITY OF TIME. IT I S ALSO SEEN THAT LOVELY EXPORTS (P) LTD. WAS A PRIVATE LIMITED C OMPANY AND DIVINE LEASING & FINANCE LTD. WAS A PUBLIC LIMITE D COMPANY. THE DECISION IN BOTH THE CASES IS SIMILAR AND, T HUS, THE FACT WHETHER THE RECEIVER IS A PRIVATE LIMITED COMPANY OR A PUBLIC LIMITED COMPANY IS NOT OF ANY CONSEQUENCE IN THIS MATTER. RELYING ON THE AFORESAID TWO DECISIONS, IT IS HELD THAT THE ASSESSEE HAD DISCHARGED THE ONUS CAST ON IT FOR PROVING THE RECEIPT OF SHARE APPLICATION MONEY. THUS, GROUND NO. 1 IS DISMISS ED. 6. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR U NDER CONSIDERATION ARE IN PARI-MATERIA, RESPECTFULLY FOLLOWING THE DECISION O F THE TRIBUNAL IN ASSESSEES OWN CASE, WE CONFIRM THE ORDER OF CIT(A) ON THIS GROUND . 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 3 RD MARCH, 2010. SD/- SD/- (D.R.SINGH) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 03.03.2010. VK. ITA-4261/DEL/2009 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR
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