DCIT, Jaipur V. ARL INFRAFECH LIMITED, Jaipur

ITA 430/JPR/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2130 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 30-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA; VRINDERA MEHTA CIT LQUO
• Section: 133A; 68; 6

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 430/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 THE DCIT, CIRCLE-3, JAIPUR. CUKE VS. M/S ARL INFRATECH LTD., A-27/13-A KANTI CHANDRA ROAD, BANI PARK, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAFCA9416Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ASHISH SHARMA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT & SHRI VRINDERA MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 29/01/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 31/01/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 24.02.2015 OF CIT (A), JAIPUR FOR THE ASSESSMENT YE AR 2010-11.THE REVENUE HAS RAISED THE FOLLOWING GROUNDS AS UNDER:- 1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 1,00,00,000/- ON ACCOUNT OF UNEXPLAINED SHARE CAPIT AL MONEY RECEIVED FROM M/S SKY WEB (INDIA) LTD. ITA NO. 430/JP/2015 DCIT V M/S ARL INFRATECH LTD. JAIPUR 2 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF CIT(A) IS PERVERSE ON FACTS AN D CONTRARY TO THE SPECIFIC FINDING RECORDED BY ASSESSING OFFICER AND ASSESSEES OWN STATEMENT RECORDED DURING SURVEY. 2. THE ASSESSEE IS A PUBLIC LIMITED COMPANY AND WA S INCORPORATED IN THE YEAR 1997. THE ASSESSEE IS ENGAGED IN THE MA NUFACTURING OF ASBESTOS CEMENT PIPES AND SHEETS. THERE WAS A SURVE Y OPERATION U/S 133A OF THE ACT AT THE BUSINESS PREMISES OF THE ASS ESSEE ON 18.07.2011. DURING THE COURSE OF SURVEY, STATEMENT IS SHRI PRAMOD JAIN, DIRECTOR OF THE ASSESSEE COMPANY WAS RECORDED WHERE IN SHRI JAIN HAD ADMITTED THAT THE SHARE APPLICATION MONEY RECEIVED FROM DIFFERENT PERSONS WAS NOT GENUINE AND WAS ONLY AN ACCOMMODATI ON ENTRY. THE AO NOTED THAT THE DURING THE YEAR UNDER CONSIDERATI ON THE ASSESSEE RECEIVED SHARE APPLICATION MONEY OF RS. 1,00,00,000 /- FROM M/S SKY WEB (INDIA) LTD. ACCORDINGLY, IN VIEW OF THE STATEM ENT OF THE DIRECTOR OF THE ASSESSEE COMPANY THE AO MADE THE ADDITION U/S 6 8 OF THE ACT OF RS. 1,00,00,000/-. THE ASSESSEE CHALLENGED THE ACTI ON OF THE AO BEFORE THE LD. CIT(A). THE LD. CIT(A) DELETED THE ADDITION MADE BY THE AO BY FOLLOWING THE DECISION OF HONBLE JURISDICTION HIGH COURT AS WELL AS DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FO R THE ASSESSMENT YEAR 2009-10. ITA NO. 430/JP/2015 DCIT V M/S ARL INFRATECH LTD. JAIPUR 3 3. WE HAVE HEARD THE LD. DR AS WELL LD. AR AND CONS IDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET WE NOTE THAT THE SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSEE FROM M/S SKY WEB (INDIA) LTD. TO THE TUNE OF RS. 3.50 CRORES OUT OF WHICH RS. 2.50 CRORES WERE RECEIVED DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2009-10 AND BALANCE OF RS. 1,00,00,000/- DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION . THUS, IT IS CLEAR THAT AN IDENTICAL ISSUE OF SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE FROM M/S SKY WEB (INDIA) LTD. OF RS. 2.50 CRORES WAS INVOLVED IN THE ASSESSMENT YEAR 2009-10. FOR THE ASSESSMENT YEAR 2009-10 THE TRIBUNAL VIDE ORDER DATED 24.01.2014 IN ASSESSEES OWN CASE IN ITA NO. 619/JP/2013 DELETED THE ADDITION MADE BY THE AO ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM VARIOUS PARTIES INC LUDING THE SHARE APPLICATION MONEY RECEIVED FROM M/S SKY WEB (INDIA) LTD.. THE REVENUE CHALLENGED THE ORDER OF THIS TRIBUNAL BEFOR E THE HONBLE HIGH COURT HOWEVER, VIDE ITS DECISION DATED 28.09.2016 I N D.B. ITA NO. 24/2014 THE HONBLE HIGH COURT HAS UPHELD THE ORDER OF TRIBUNAL IN PARA 5 TO 11 AS UNDER:- 5. TAKING INTO CONSIDERATION THE AFORESAID FACTS T HE TRIBUNAL IN PARA 2.6, OBSERVED AS UNDER:- ITA NO. 430/JP/2015 DCIT V M/S ARL INFRATECH LTD. JAIPUR 4 2.6 ADVERTING, THE FACTS OF THE GIVEN CASE, WE ARE OF THE CONSIDERED OPINION THAT ALL THE SHARE APPLICANTS ST AND IDENTIFIED. THE ASSESSEE HAS PROVIDED PANS OF THE SHARE APPLICA NTS. THE MODE OF PAYMENT HAS ALSO BEEN MADE EXPLAINED. THERE IS NO DIRECT OR INDIRECT RELATION BETWEEN THE ASSESSEE CO MPANY AND THE SHARE APPLICANTS. THE STATEMENTS RECORDED DURING SU RVEY HAS GOT NO EVIDENTIARY VALUE AND THE LAW IS VERY MUCH SETTL ED ON THIS ISSUE. IN ANY CASE, EVEN UNDER THE PROVISIONS OF SE CTION 68 OF THE ACT, THE 14 ASSESSEE CANNOT BE FORCED TO PROVE THE SOURCE OF THE SOURCE. THE LAW ON THIS SUBJECT IS ALSO SETTLED BY NUMEROUS DECISIONS. THE ALLEGED REPORT OF THE INSPECTOR OF T HE DEPARTMENT WHO IS STATED TO HAVE VISITED AT THE GIVEN ADDRESSE S OF THE SHARE APPLICANTS WAS NEVER PUT OR CONFRONTED TO THE ASSES SEE. THE CUMULATIVE EFFECTS OF THESE REASONS IS THAT THE IMP UGNED ADDITION CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE COMPAN Y. ACCORDINGLY, WE ORDER TO DELETE THE ENTIRE ADDITION S AND ALLOW THE APPEAL OF THE ASSESSEE. 6. IN OUR VIEW, THE DECISION OF THE SUPREME COURT I N THE CASE OF CIT VS. LOVELY EXPORT PVT. LTD. REPORTED IN (2009) 319 ITR (ST.) 5 (SC) HELD AS UNDER:- CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDISC LOSED INCOME UNDER SECTION 68 OF IT ACT, 1961?. WE FIND N O MERIT IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON T HAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPA NY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN T O THE AO, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN TH EIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT. 7. COUNSEL FOR THE RESPONDENTS RELIED UPON FOLLOWIN G DECISIONS:- (I) COMMISSIONER OF INCOME TAX VS. ORISSA CORPORAT ION P. LTD., (1986 159 ITR 0078 (II) SHREE BARKHA SYNTHETICES LT D. VS. ASSISTANT COMMISSIONER OF INCOME TAX, (2006) 283 ITR 0337 (II) ITA NO. 430/JP/2015 DCIT V M/S ARL INFRATECH LTD. JAIPUR 5 COMMISSIONER OF INCOME TAX VS. STELLAR INVESTMENT L TD. (DELHI HIGH COURT), (1991) 192 ITR 0287 (IV) COMMISSIONER OF INCOME TAX VS. STELLER INVESTMENT LTD. (SUPREME COURT OF I NDIA), (2001) 251 ITR 0263 (V) COMMISSIONER OF INCOME TAX VS. DIV INE LEASING AND FINANCE LTD. ( DELHI HIGH COURT), (2008) 299 IT R 0268 (VI) COMMISSIONER OF INCOME TAX VS. FIRST POINT FINANCE LTD. ( RAJASTHAN HIGH COURT) (VII) COMMISSIONER OF INCOME TAX VS. GP INTERNATIONAL LTD. (PUNJAB & HARYANA HIGH COURT). 8. TAKING INTO CONSIDERATION THE OBSERVATIONS RELIE D ON BY THE RESPONDENTS AND JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. VALUE CAPITAL SERVIC ES P. LTD. REPORTED IN (2008) 307ITR 334 (DELHI MORE PARTICULA RLY, THE OBSERVATIONS WHICH READS AS UNDER:- THE COURT IN THAT CASE HELD THAT THE ADDITIONAL BU RDEN WAS ON THE DEPARTMENT TO SHOW THAT EVEN IF SHARE APPLICATI ON DID NOT HAVE THE MEANS TO MAKE INVESTMENT, THE INVESTMENT M ADE BY THEM ACTUALLY EMANATED FROM THE COFFERS OF THE ASSE SSEE SO AS TO ENABLE IS TO BE TREATED AS THE UNDISCLOSED INCOME O F THE ASSESSEE. IN THE ABSENCE OF SUCH FINDINGS, ADDITION COULD NOT BE MADE IN THE INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT 9. WE HAVE HEARD MR. ANUROOP SINGHI COUNSEL FOR THE APPELLANT AND MR. NARESH GUPTA COUNSEL FOR THE RESPONDENT. 10. TAKING INTO CONSIDERATION THE OBSERVATIONS MADE BY THE TWIN DECISIONS AS OBSERVED BY THE TRIBUNAL THAT ALL THE SHARE APPLICANTS AND IDENTIFIED. THE ASSESSEE HAS PROVIDED PANS OF T HE SHARE APPLICANTS. THE MODE OF PAYMENT HAS ALSO BEEN MADE EXPLAINED. THERE IS NO DIRECT OR INDIRECT RELATION BETWEEN THE ASSESSEE COMPANY AND THE SHARE APPLICANTS. THE STATEMENTS RE CORDED DURING SURVEY HAS GOT NO EVIDENTIARY VALUE WITHOUT ANY SUPPORTING DOCUMENTS OR EVIDENCE. 11. IN OUR VIEW, THE VIEW TAKEN BY THE TRIBUNAL IS JUST AND PROPER. ITA NO. 430/JP/2015 DCIT V M/S ARL INFRATECH LTD. JAIPUR 6 THUS, IN VIEW OF THE DECISION OF THIS TRIBUNAL AS W ELL AS HONBLE JURISDICTION HIGH COURT FOR THE ASSESSMENT YEAR 200 9-10 WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A) WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A). IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/01/2018 SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31/01/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT), CIRCLE-3, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S ARL INFRATECH LTD., JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 430/JP/2015} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR