JCIT, Meerut V. M/s. Sarvhit Trust, Meerut

ITA 4383/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7636 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BERNWAL
• Assessee Lawyers: CHANDER MEHRA
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE SHRI R.S. SYAL, AM & MS SUCHITRA KAMBLE, JM ITA NO.4383/DEL/2012 ASSESSMENT YEAR : 2009-10 JCIT, RANGE-2, AAYAKAR BHAWAN, BHAINSALI GROUND, MEERUT. VS. SARVHIT TRUST, G-10, KRISHNA PLAZA, GARH ROAD, MEERUT. PAN : AAHTS3245C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI CHANDER MEHRA, CA DEPARTMENT BY : MS ANIMA BERNWAL, SR. DR DATE OF HEARING : 16.05.2016 DATE OF PRONOUNCEMENT : 16.05.2016 ORDER PER R.S. SYAL, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A) ON 1.5.2012 IN RELATION TO THE ASSESSMENT YEAR 2009-10. ITA NO.4383/DEL/2012 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.2,94,00,000/- MADE BY THE ASSESSING OFFICER (AO) UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT). 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A TRUST, WHICH DECLARED TO HAVE RECEIVED A LOAN OF RS.2.94 C RORE FROM M/S NISHYAM FARMS PVT. LTD. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE AO REQUIRED THE ASSESSEE TO PRODUCE THE LENDER. AFFIDAVIT OF ONE SHRI PANKAJ GUPTA, DIRECTOR OF M/S NISHYAM FARMS PV T. LTD., WAS FILED ALONG WITH A COPY OF BANK ACCOUNT OF THE COMPANY. O N A PERUSAL OF THIS BANK ACCOUNT, THE AO OBSERVED THAT CASH OF RS.2,94, 90,000/- WAS DEPOSITED ON 24.3.2009 AND A CHEQUE WAS ISSUED FROM SUCH BANK ACCOUNT IN FAVOUR OF THE ASSESSEE ON THE SAME DATE. THE AO FURTHER OBSERVED FROM THE BANK ACCOUNT OF M/S NISHYAM FARMS PVT. LTD . THAT THERE WERE ABNORMAL CASH TRANSACTIONS. CONSIDERING THIS FACT, HE REFERRED THE MATTER TO THE INVESTIGATION WING, NEW DELHI, UNIT I. THE ADIT, VIDE LETTER DATED 27.12.2011, REPORTED THAT M/S NISHYAM FARMS P VT. LTD. RECEIVED ITA NO.4383/DEL/2012 3 MONEY FOR SHARE CAPITAL, FROM SECURED AND UNSECURED LOANS AND THE FUND FLOW WAS IN THE FORM OF CASH IN HAND, CASH AT BANK AND LOANS/ADVANCES. IT WAS FURTHER SUBMITTED THAT NO TRADING OR MANUFAC TURING ACTIVITY WAS CARRIED OUT BY M/S NISHYAM FARMS PVT. LTD. SUMMONS WERE ISSUED BY THE ADIT U/S 131, IN RESPONSE TO WHICH SHRI PANKAJ GUPTA, DIRECTOR OF NISHYAM FARMS PVT. LTD., ATTENDED AND GOT HIS STATE MENT RECORDED. IN HIS STATEMENT, HE AFFIRMED TO HAVE GIVEN A LOAN OF RS.2.94 CRORE TO THE ASSESSEE OUT OF THE BANK BALANCE OF THE COMPANY RUN NING INTO SEVERAL CRORES. ON A FURTHER QUERY AS TO WHY A CASH OF RS. 10.05 CRORE WAS RETAINED IN THE BANK OF HIS COMPANY, SHRI PANKAJ GU PTA STATED THAT THE AMOUNT WAS EARLIER WITHDRAWN FOR PURCHASE OF LAND F ROM THE FARMERS WHICH DID NOT MATERIALIZE. THE AO ISSUED SUMMONS TO M/S SHARDA EXPORTS FOR KNOWING THE CORRECT NATURE OF THE TRANS FER ENTRY REFLECTED IN THE BANK ACCOUNT. SHRI PANKAJ GUPTA APPEARED AND A GAIN STATED THAT THE AMOUNT WAS WITHDRAWN TO BE UTILIZED FOR ACQUIRING L AND FROM FARMERS WHICH COULD NOT FRUCTIFY. THE AO, ON CONSIDERATION OF THE ABOVE FACTS AND MATERIAL, CAME TO HOLD THAT M/S NISHYAM FARMS P VT. LTD. WAS NOTHING, BUT, A NAME LENDER. HE, THEREFORE, MADE AN ADITION OF RS.2.94 ITA NO.4383/DEL/2012 4 CRORE IN THE HANDS OF THE ASSESSEE U/S 68 OF THE AC T. THE LD. CIT(A) CHOSE TO DELETE THE ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS CLEAR THAT THE ASSESSEE SHOWED TO HAVE RECEIVED A LOAN OF RS.2.94 CRORE FROM M/S NISHYAM FARMS PVT. LTD. ONE OF THE DIRECTORS OF THIS COMPANY APPEARED BEFORE THE AUTHO RITIES AND IN HIS STATED CONFIRMED TO HAVE ADVANCED A LOAN OF EQUAL S UM TO THE ASSESSEE. IT IS ALSO SEEN THAT THIS COMPANY WAS HOLDING RS.10 .05 CRORE IN ITS BANK, OUT OF WHICH A SUM OF RS.2.94 CRORE WAS GIVEN TO TH E ASSESSEE AS A LOAN. THUS, IT IS A CASE IN WHICH THE LENDER HAD CASH AVA ILABLE WITH IT MANY TIMES MORE THAN THE LOAN ADVANCED TO THE ASSESSEE. WHEN A DIRECTOR FROM THE LENDER COMPANY HAS APPEARED IN PERSON AND NOT O NLY CONFIRMED THE FACT OF HAVING ADVANCED THE LOAN TO THE ASSESSEE, B UT ALSO GAVE THE SOURCE OF THE AMOUNT OF LOAN ADVANCED, WE FAIL TO SEE AS TO HOW AN ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE UNDER THESE CI RCUMSTANCES. FURTHER, THE INQUIRY CONDUCTED, AT THE INSTANCE OF THE AO, BY THE INVESTIGATION WING, NEW DELHI, ALSO DID NOT TRANSPI RE ANYTHING FISHY. ITA NO.4383/DEL/2012 5 RATHER, IT DISCERNED THAT M/S NISHYAM FARMS PVT. LT D. WAS HAVING CASH FLOW AVAILABLE FROM MANY SOURCES INCLUDING SHARE CA PITAL AND LOANS, AS HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER. UNDER THESE CIRCUMSTANCES, WE ARE NOT INCLINED TO DISTURB THE FINDING RETURNED IN THE IMPUGNED ORDER. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER AND SUSTAI N THE DELETION OF ADDITION. 5. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 16.05.201 6. ; SD/- SD/- [SUCHITRA KAMBLE] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, MAY, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.