ITO, RAJSAMAND V. M/s. Shubh Mines Pvt. Ltd., RAJSAMAND

ITA 435/JODH/2014

• Counselvise Citation: 43523314 RSA 2014
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 22-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHYAM SINGHVI
• Section: 143(3); 147; 68; 148

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JODHPUR BENCH: J ODHPUR ( BEFORE SHRI H ARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ) I.T.A. NO. 435 /JODH/201 4 (A.Y. 20 0 6 - 07 ) ITO, VS M/S. SHUBH MINES PVT. LTD. WARD - 1, KIRAN PALACE , RAJSAMAND. VILLAGE KELWA, RAJSAMAND. PAN NO. AAJCS 1565 L (APPELLANT) (RESPONDENT) ASSESSEE BY : - SHRI SHYAM SINGHVI. DEPARTMENT BY : - SHRI MAHESH KUMAR - D.R. DATE OF HEARING : 0 7 / 10 /201 4 DATE OF PRONOUNCEMENT : 09 / 10 /2014 O R D E R P E R HARI OM MARATHA, J.M. : THIS APPEAL OF THE REVENUE FOR A.Y. 2006 - 07 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) DATED 30.06.2014. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY WHICH CAME IN TO B EING ON 22.07.2005. ITS PROMOTERS NAMELY SHRI ROSHAN LAL SANKHLA AND HIS WIFE SMT. BINDIYA SANKHLA INTRODUCED 2 INITIAL CAPITAL OF RS. 1,00,000/ - . FOR THE YEAR THE ASSESSEE - COMPANY DID NOT FILE ITS RETURN OF INCOME (ROI). CONSEQUENT UPON AN INFORMATION REC EIVED FROM THE I.T.O., WARD - 8(3), NEW DELHI THAT THE ASSESSEE - COMPANY IS ONE OF THE BENEFICIARY OF BOGUS ACCOMMODATION ENTRY GIVEN BY ONE SHRI ASEEM KUMAR GUPTA, AN ENTRY OPERATOR, DURING THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR 2006 - 07, THE A.O . INITIATED ACTION U/S 147 AND ISSUED NOTICE U/S 148 ON 30.03.2013, AFTER RECORDING THE REQUISITE REASONS. THE ASSESSEE FILED ITS WRITTEN SUBMISSIONS (W.S.). AND ALSO FILED RETURN OF INCOME IN COMPLIANCE OF THIS NOTICE ON 12.04.2013 SHOWING LOSS OF RS. 18, 752/ - . FROM THE AUDITED ACCOUNTS FILED ALONG WITH THE ROI IT WAS NOTICED THAT DURING THE YEAR THE ASSESSEE HAD INTRODUCED SHARE APPLICATION MONEY TO THE TUNE OF RS. 75,00,000/ - INCLUDING THE SUM OF RS. 50,00,000/ - , ALLEG ED LY TAKEN FROM THE ENTRY PROVIDER WHO USED THE COMPANY NAMELY M /S. MODERATE CREDIT CORP. LTD. DELHI FOR PASSING THIS ENTRY. THE CASE OF THE ASSESSEE IS THAT IT NEVER TOOK ANY BOGUS ENTRY AS HAS BEEN ALLEGED. THAT THE ASSESSEE - COMPANY WAS SETTING A NEW PROJECT OF MARBLE SAWING. THE MAIN P ROMOTER DIRECTOR OF THIS COMPANY HAD A MARBLE MINE LEASE ENOUGH FOR THE PROJECT AND M/S. MODERATE CREDIT CORPORATION LTD., DELHI AGREED TO PROVIDE FINANCIAL ASSISTANCE BY WAY OF SHARE APPLICATION MONEY AND FOR THE PURPOSE REMITTED A SUM OF RS. 3 50 LAKHS TH R OUGH ACCOUNT PAYEE CHEQUE TO THE ASSESSEE - COMPANY. SOME OTHER PERSONS ALSO SENT SHARE APPLICATION MONEY IN THE SIMILAR MANNER. BUT WHEN THE PROJECT COULD NOT TAKE SHAPE AS DESIRED THE ASSESSEE - COMPANY RETURNED THE MONEY TH R OUGH ACCOUNT PAYEE CHEQUES. THAT WAS THE REASON FOR NOT FILING ROI. HOWEVER, THE A.O. HAS COMPLETED HIS ORDER US/ 143(3) R.W.S. 147/148 OF THE ACT. THE ASSESSEE HAD RECEIVED SHARE APPLICATION MONEY OF RS. 75 LAKHS DURING THE RELEVANT YEAR. THE A.O. HAS TREATED THIS ENTIRE SUM AS ASSESSEE S OWN UNDISCLOSED MONEY AND HAS ADDED THE SAME TO ITS INCOME U/S 68 OF THE ACT. 2.1 AGGRIEVED, THE ASSESSEE FILED APPEAL AND THE LD. CIT(A) HAS DELETED THE ENTIRE ADDITION. THE REVENUE IS NOW AGGRIEVED. 2.2 WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CARE FULLY EXAMINED THE ENTIRE RECORD. IT WAS ARGUED BY LD. SR. D.R. THAT THIS IS A CASE OF BOGUS ENTRY RECORDED AS A SHARE APPLICATION MONEY. HE HAS REFERRED TO THE CASE OF ASEEM GUPTA AND HAS RELIED ON HIS STATEMENT RECORDED. HE HAS IGNORED THE CONFIRMATIONS FILED TO PROVE THAT IN FACT THIS WAS A SHARE APPLICATION MONEY. HE HAS ALSO POOH - POOHED THE NON CONFRONTATION OF THE STATEMENTS OF SHRI GUPTA TO THE ASSESSEE. HE HAS PLACED MUCH RELEVANCE ON THE FACT FOUND FORM THE SURVEY ETC. CONDUCTED IN A THIRD 4 PARTYS CASE. HE HAS REPEATED ALL THE REASONS GIVEN BY THE A.O. FOR MAKING THE IMPUGNED ADDITION. 2. 3 ON THE OTHER HAND LD. A.R. SHRI SHYAM SINGHVI HAS RELIED ON THE ORDER OF LD. CIT(A). HE HAS FURTHER SUBMITTED THAT THE ASSESSEE - COMPANY BEING NEWLY INCORPORATED WITH A VIEW TO CARRY OUT MINING PROJECT AND BEING IN NEED OF CAPITAL, HAS RECEIVED SHARE APPLICATION MONEY TH R OUGH ACCOUNT PAYEE CHEQUES AND THE SHARE APPLICANTS HAVE ALSO CONFIRMED THIS FACT. HE STATED THAT THE EX - PARTE STATEMENT OF MR. GUPTA CANNOT BE M ADE A BASIS OF THIS ADDITION, ESPECIALLY WHEN THE SHARE APPLICANT HAS CONFIRMED THE CLAIM OF THE ASSESSEE. HE ALSO ARGUED THAT EVEN IN THE STATEMENT THE NAME OF THIS ASSESSEE DOES NOT FIGURE. WITH THESE ARGUMENTS HE HAS SUPPORTED THE ORDER OF LD. CIT(A). 2.4 AFTER CONSIDERING RIVAL SUBMISSIONS IN THE LIGHT OF THE FACTS AND EVIDENCE ON RECORD, WE ARE OF THE CONSIDERED OPINION THAT THE A.O. HAS MADE THE IMPUGNED ADDITION ON SUSPICION BASED ON THE STATEMENT OF A THIRD PARTY. WE HAVE FOUND THAT SHARE APPLICAT ION MONEY OF RS. 50 LAKHS WAS INVESTED BY M/S. MODERATE CREDIT CORPORATION LTD., A LISTED COMPANY, WHICH FACT IS EVIDENT FROM THE RECORD. THIS INVESTMENT IS FOUND TO HAVE BEEN MADE TH R OUGH ACCOUNT PAYEE CHEQUE AND HAS BEEN REFUNDED IN THE SIMILAR MANNER WH EN THE PROJECT WAS DROPPED . THE 5 STATEMENT OF SHRI ASEEM GUPTA RECORDED BEHIND THE BACK OF THE ASSESSEE CANNOT BE RELIED ON IN THE CASE OF A THIRD PARTY. HIS STATEMENT DOES NOT SPECIFICALLY MENTION THE NAME OF THE ASSESSEE - COMPANY. THERE IS NO IOTA OF EVIDE NCE TO SUGGEST THAT EITHER DIRECTLY OR INDIRECTLY ANY CASH OR UNACCOUNTED MONEY OF THE ASSESSEE HAD FLOWN TO THE SHARE APPLICANT COMPANY OR VICE VERSA. THE SHARE APPLICANT HAS CONFIRMED ITS DEPOSIT. THEREFORE, ANY SHARE APPLICATION MONEY WHEN THE APPLICANT IS IDENTIFIED AND HAS CONFIRMED ITS DEPOSIT WITH THE ASSESSEE - COMPANY, CANNOT BE ADDED IN THE ASSESSEE - COMPANYS HAND, AS PER THE SETTLED POSITION OF THE LAW. 2.5 SIMILAR IS THE POSITION REGARDING SHARE APPLICATION MONEY OF RS. 25 LACS INVESTED BY SPG F INVEST PVT. LTD. ACCORDINGLY, WE CONFIRM THE IMPUGNED DELETION AND CANNOT ALLOW REVENUES APPEAL. 3. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 09 TH OCTOBER , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09 TH OCTOBER , 2014 VL / - 6 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE D R SENIOR PRIVATE SECRETARY ITAT, JODHPUR