ACIT, New Delhi V. M/s. M.A. Projects Pvt. Ltd., Delhi

ITA 4768/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82197 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 26-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 08-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Accommodation entries
• Section: 68

Judgement Text

DELHI BENCH E : NEW DELHI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 4768 /DEL/ 2013 (ASSESSMENT YEAR: 2008 - 09 ) ACIT, CENTRAL CIRCLE - 03, ROOM NO.356, 3 RD FLOOR, JHANDEWALAN EXTENSION, NEW DELHI VS. M.A. PROJECTS PVT. LTD., BA - 17A, DDA FLATS, ASHOK VIHAR, PHASE - 1, DELHI PAN:AAECM2372E (APPELLANT) (RESPONDENT) O R D E R PER A. T. VARKEY, JUDICIAL MEMBER TH IS IS AN APPEAL ARISING FROM THE ORDER OF THE LD CIT(A) DATED 23TH MAY 2013 FOR ASSESSMENT YEAR 2008 - 09. 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS UNDER: - THE CIT(A) ERRED IN HOLDING THAT THE ADDITION OF RS.45 ,00,000/ - MADE ON ACCOUNT OF SHARE APPLICATION MONEY AS THE WHERE ABOUT THE COMPANIES WHO HAD GIVEN THE SHARE APPLICATION MONEY COULD NOT BE TRACED ON FURTHER INVESTIGATION. 3. THE AO, HAD MADE AN ADDITION OF RS.45 LAKHS ON THE GROUND THAT SHARE APPLICAT ION MONEY RECEIVED FROM FOLLOWING THREE PARTIES REPRESENTS UN - EXPLAINED CASH - CREDIT, U/S 68 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT ): - SL. NO. NAME OF THE APPLICANTS ADDRESS AMOUNT 1. INDLON HOSIERY PVT. LTD. B - 114, SHAKARPUR, DELHI - 110092 15,00,000 2. MULTITECH SEMICONDUCTORS PVT. LTD. SHOP NO.1, B - 114, NEAR BALAJI DHARAMSHALA, SHAKARPUR, DELHI - 110092 15,00,000 3. ORACLE CABLE PVT LTD 301, HIMALAYA PALACE, 65 - BIJAY BLOCK, NEAR CHILD JUNCTION, L. NAGAR, DELHI 110092 15,00,000 TOTAL 45,0 0,000 APPELLANT BY : SURESH KUMAR GUPTA, ADV RESPONDENT BY : GAURAV DUOEJA, SR. DR PAGE 2 OF 3 4. BEFORE THE LD CIT(A), THE ASSESSEE CONTENDED THAT THERE WAS SHARE APPLICATION MONEY PENDING FOR ALLOTMENT AT THE BEGINNING OF THE FINANCIAL YEAR OF RS.85,00,000/ - WHICH HAS INCREASED TO RS.1,95,00,000/ - AT THE CLOSE OF THE RELEVANT FINANCIAL YEAR. THE DETAILS OF THE SHARE APPLICATION MONEY ACCEPTED AND REPAID WITH THE BALANCE AT THE OPENING AND CLOSE OF THE FINANCIAL YEAR WORKED AS UNDER: - NAME OF THE SHARE APPLICANT OUTSTANDIN G AS ON 01.04.2007 ACCEPTED DURING THE YEAR REFUNDE D DURING THE Y EAR CLOSING BALANCE INDLON HOSIERY PVT LTD 15,00,000 - - 15,00,000 MULTITECH SEMI CONDUCTORS PVT. LTD 15,00,000 - - 15,00,000 ORACLE CABLES PVT. LTD 15,00,000 - - 15,00,000 SE V BRO DOMESTIC APPLIANCE PVT LTD 20,00,000 - 20,00,000 STARTRECK HOLDING PVT LTD 1,60,00,000 10,00,000 1,50,00,000 SUNTEX INDIA PVT. LTD. 20,00,000 - 20,00,000 TOTAL 85,00,000 1,60,00,000 50,00,000 1,95,00,00 5. ON THE ABOVE FACTUAL BASIS AND THE EVIDENCE ON RECORD, THE LD CIT(A) HAS HELD AS UNDER: - 3.3 I HAVE CONSIDERED THE ASSESSMENT ORDER, THE SUBMISSIONS MADE AND THE DOCUMENTS PRODUCED. THE CLAIM OF THE APPELLANT THAT THE SHARE APPLICATION MONEY OF RS.45,00,000/ - STATED TO BE RECEIVED FROM THE THREE PRIVATE LIMITED COMPANIES WERE ACTUALLY RECEIVED EAR LIER AND NOT DURING THE PY IS FOUND CORRECT. IN VIEW OF THIS FACT, THE SAID AMOUNT OF RS.45,00,000/ - IS NOT ASSESSABLE TO TAX DURING THIS A.Y. CONSEQUENTLY, THE ALLEGED AMOUNT OF COMMISSION OF RS.22,500/ - RELATING TO THE SAID SHARE APPLICATION OF RS.45,00, 000/ - ALSO CANNOT BE ASSESSED DURING THIS A. Y. ACCORDINGLY, THESE ADDITIONS ARE DELETED AND APPELLANT GETS RELIEF OF RS.45,22,500/ - . 3.4 I ALSO FIND FROM THE ASSESSMENT ORDER THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO SUBSTANTIATE THE REVENUE'S CLAI M THAT ACCOMMODATION ENTRIES WERE TAKEN BY THE APPELLANT COMPANY. THERE IS NO REFERENCE TO ANY EVIDENCE UNEARTHED DURING THE SEARCH OR ANY STATEMENT RECORDED DURING OR 'AFTER THE SEARCH. IN THESE CIRCUMSTANCES, THE CONCLUSIONS REACHED BY THE REVENUE REMAIN UNSUBSTANTIATED. IN CASE THE GENUINENESS OF SHARE APPLICATION MONEY IS DOUBTED, THE AO SHOULD REFER THE MATTER TO THE AO OF THE THREE APPLICANT COMPANIES AND A VIEW SHOULD BE TAKEN ONLY AFTER INPUTS FROM THOSE ENQUIRIES. THE AO IS DIRECTED ACCORDINGLY. PAGE 3 OF 3 6. HAVING CONSIDERED THE RIVAL SUBMISSION WE FIND THAT NO SHARE CAPITAL WAS RECEIVED FROM M/S INDLON HOSIERY PVT. LTD., M/S. MULTITECH SEMICONDUCTORS PVT. LTD., M/S. ORACLE CABLE PVT LTD IN THE INSTANT YEAR. THE ENTIRE SUM OF RS.45 LAKHS WAS BROUGHT FORWAR D AS OPENING BALANCE IN THE INSTANT YEAR. REVENUE HAS NOT PLACED ON RECORD ANY MATERIAL TO REFUTE THE ABOVE FACTUAL POSITION. IN THE LIGHT OF THE ABOVE, WE HOLD THAT IN THE ABSENCE OF ANY CREDIT IN THE INSTANT YEAR UNDER CONSIDERATION, THE ADDITION MADE BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT IS MISCONCEIVED. 7. SO WE ARE INCLINED TO UPHOLD THE ORDER OF THE LD CIT(A) AND DISMISS THE GROUND OF THE REVENUE. 8. IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 . 12 . 2 014 . - S D / - - S D / - ( PRAMOD KUMAR ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 3 0 / 12 / 2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI