ITO, New Delhi V. M/s. Lord ABN Ltd, New Delhi

ITA 450/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3613 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-06-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 01-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV RONTA
• Assessee Lawyers: N S BHATNAGAR
• Keywords: Assessment record
• Section: 68

Judgement Text

I.T.A. NO. 450 /DEL/2010 1/4 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH D BEFORE SHRI I. P. BANSAL, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUTANT MEMBER ITA NO. 450 /DEL/2010 (ASSESSMENT YEAR 1995-96) ITO, CO. WARD 4(4), VS. M/S. LORD ABN LTD., NEW DELHI B-2/52, RAJASTHALI APARTMENTS PITAM PURA, NEW DELHI-34 (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAACL-1729-Q APPELLANT BY: SHRI RAJIV RONTA, SR. DR RESPONDENT BY: SHRI N S BHATNAGAR, ADV. ORDER PER A. K. GARODIA, AM: 1. THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAINS T THE ORDER OF LD. CIT(A)-VII, NEW DELHI DATED 20.11.2009 FOR T HE ASSESSMENT YEAR 1995-96. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: 1) THE ORDER OF THE LD. CIT(A) IS ERRONEOUS & CONT RARY TO FACTS AND LAW. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.18,48,000/- MADE BY THE A.O. U/S 68 OF THE I T A CT. 2.1 THE LD. CIT(A) IGNORED THE FACT THAT THE ASSESSEE D ID NOT DISCHARGE THE ONUS OF PROVING THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THIS YE AR, THE ASSESSEE HAS RAISED PAID UP CAPITAL OF RS.1.5 CRORES AND FOR THIS PURPOSE, THE COMPANY RECEIVED SHARE APPLICATION FROM 65 APPL ICANTS FOR A I.T.A. NO. 450 /DEL/2010 2/4 TOTAL SUM OF RS.65 LACS. IN THE ORIGINAL ASSESSMEN T, THE A.O. MADE ADDITION U/S 68 TO THE EXTENT OF RS.18.48 LACS IN RESPECT OF 32 SHARE APPLICANTS ON THE GROUND THAT THE IDENTITY AND THE SOURCE OF INVESTMENT WAS NOT PROVED. AGAINST THE S AID ORDER, THE ASSESSEE WENT IN APPEAL BEFORE CIT(A) AND THERE AFTER TO THE TRIBUNAL AND AS PER THE TRIBUNAL ORDER DATED 31.08. 2007, THE MATTER WAS RESTORED BACK TO THE FILE OF THE A.O. FO R A FRESH DECISION IN THE LIGHT OF JUDGEMENT OF HON'BLE HIGH COURT OF DELHI RENDERED IN THE CASE OF ITO VS DEVINE LEASING & FINANCE LTD. AS REPORTED IN 299 ITR 258. IN THE 2 ND ROUND, THE A.O. REPEATED THE ADDITION OF THE SAME AMOUNT ON THE BAS IS THAT THE ASSESSEE HAS NOT BEEN ABLE TO SATISFY THE NECESSARY CONDITIONS LAID DOWN BY THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF DEVINE LEASING & FINANCE LTD. (SUPRA). THE ASSESSE E CARRIED THE MATTER AGAIN IN APPEAL BEFORE THE LD. CIT(A) AN D AS PER THE IMPUGNED ORDER, THE LD. CIT(A) HAS DELETED THIS ADD ITION BY FOLLOWING THE JUDGMENT OF HONBLE APEX COURT RENDER ED IN THE CASE OF CIT VS LOVELY EXPORTS PVT. LTD. REPORTED IN 216 CTR 195. IT IS ALSO NOTED BY THE LD. CIT(A) IN PARA 4. 1 OF HIS IMPUGNED ORDER THAT DURING THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS, ALL THE PARTICULARS / DETAIL S SUCH AS SHARE APPLICATION FORMS, THE COPIES OF PAN CARDS, INCOME TAX DETAILS, BANK PARTICULARS, BANK STATEMENT AND THE COMPLETE A DDRESSES OF THE SHARE APPLICANTS WERE FURNISHED. IT IS ALSO NO TED BY THE LD. CIT(A) THAT THERE IS NO DISPUTE THAT ALL THE CONFIR MATIONS WERE FILED BEFORE THE A.O. AFTER MAKING THESE OBSERVATI ONS AND AFTER FOLLOWING THE JUDGEMENT OF HONBLE APEX COURT RENDE RED IN THE CASE OF LOVELY EXPORTS PVT. LTD. (SUPRA), THE LD. C IT(A) HAS DELETED THIS ADDITION AND NOW THE REVENUE IS IN APP EAL BEFORE US. I.T.A. NO. 450 /DEL/2010 3/4 3. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSESSME NT ORDER WHEREAS THE LD. A.R. FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). A SPECIFIC QUERY WAS RAISED BY THE BEN CH FROM THE LD. D.R. AS TO WHETHER THERE IS ANY ALLEGATION THAT AN ENTRY PROVIDER IS INVOLVED IN THE PRESENT CASE AND IN REP LY, IT WAS SUBMITTED BY THE LD. D.R. THAT THERE IS NO SUCH ALL EGATION IN THE ASSESSMENT ORDER THAT ANY ENTRY OPERATOR WAS INVOLV ED IN THIS CASE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT IT IS NOTED BY THE LD .CIT(A) IN PARA 4.1 OF HIS IMPUGNED ORDER THAT THE ASSESSEE HA S SUBMITTED ALL THE PARTICULARS/DETAILS SUCH AS SHARE APPLICATI ON FORM, THE COPIES OF PAN, INCOME TAX DETAILS, BANK PARTICULARS AND BANK STATEMENT, THE COMPLETE ADDRESSES OF THE SHARE APPL ICANTS ETC. BEFORE US ALSO, THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING 110 PAGES. IN THE ABSENCE OF ANY ALLEGATION REGARD ING INVOLVEMENT OF ANY ENTRY OPERATOR, WE ARE OF THE CO NSIDERED OPINION THAT THE ISSUE INVOLVED IN THE PRESENT CASE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF LOVELY EXPORTS P VT. LTD. (SUPRA) WHEREIN IT WAS HELD BY THE HONBLE APEX COU RT THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSE SSEE COMPANY FROM ALLEGED BOGUS SHARE HOLDERS AND THE NA MES ARE GIVEN TO THE A.O. THEN THE DEPARTMENT IS FREE TO PR OCEED AGAINST THE INVESTOR BUT NO ADDITION CAN BE MADE IN THE HAN DS OF THE ASSESSEE COMPANY WHO HAS RECEIVED THE SHARE APPLICA TION MONEY. REGARDING IDENTITY OF THE SHARE APPLICANTS, WE FIND THAT SUFFICIENT EVIDENCES HAVE BEEN FURNISHED BY THE ASS ESSEE IN THIS I.T.A. NO. 450 /DEL/2010 4/4 REGARD IN THE FORM OF SHARE APPLICATION FORMS, COPI ES OF PAN, INCOME TAX DETAILS, BANK PARTICULARS, BANK STATEMEN TS AND COMPLETE ADDRESSES OF THE SHARE APPLICANTS. CONSID ERING ALL THESE FACTS AND BY FOLLOWING THE JUDGMENT OF HONBL E APEX COURT RENDERED IN THE CASE OF CIT VS LOVELY EXPORTS PVT. LTD. (SUPRA), WE CONFIRM THE ORDER OF LD. CIT(A) ON THIS ISSUE BECAUSE THE ASSESSEE HAS ESTABLISHED THE IDENTITY O F THE SHARE APPLICANTS AND HAS ALSO FURNISHED THE PAN/GIR NUMBE R OF THE SHARE APPLICANTS ALONG WITH DETAILS OF ADDRESSES OF THOSE PERSONS AND THE A.O. HAS NOT BROUGHT ON RECORD ANY ADVERSE MATERIAL BY EXAMINING OR CROSS VERIFYING THE ASSESSMENT RECORDS OF THOSE PERSONS I.E. SHARE APPLICANTS. WE, THEREFORE, DECL INE TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DIS MISSED. 6. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 5 TH JUNE 2010. SD.//- SD./- (I.P. BANSAL) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:25 TH JUNE, 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI