Tirupati Carrier Ltd., Kolkata V. ACIT, C.C.-XXVIII, Kolkata, Kolkata

ITA 479/KOL/2010

• Counselvise Citation: 47923514 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-02-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Assessee Lawyers: D S DAMLE M D SHAH
• Keywords: Bogus Share capital; Additional evidence
• Section: 68; 234B; 194C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA () . . , , ! . .. .'# '#'# '#. .. . , ,, , $% , ,, , ) [BEFORE HONBLE SRI B.R.MITTAL, JM & HONBLE SRI C. D. RAO, AM] !& / I.T.A NO. 479/KOL/2010 '( )*/ ASSESSMENT YEAR : 2006-07 TIRUPATI CARRIER LIMITED -VS.- A SSTT. COMMISSIONER OF INCOME TAX KOLKATA [PAN : AABCT 9173B] CC-XXVIII, KOLKATA [ ,- /APPELLANT ] [ /0,-/ RESPONDENT ] ,- / FOR THE APPELLANT : S/SHRI D.S. DAMLE, M.D. SHAH /0,- / FOR THE RESPONDENT : SHRI PIYUSH KOLHE $1 /ORDER . .. .'# '#'# '#. .. . , ,, , $% PER C. D. RAO, A. M. THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2006-07 AGAINST THE ORDER OF THE LD. CIT(A), CENTRAL-I, KOLKATA DATED 04.01.2010. TH E ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL :- (1) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE CA SE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE W AS RESPONSIBLE TO PROVE THE SOURCE OF THE SOURCE. SUCH ONUS IS NOT ON THE ASSESSEE. (2) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE ONUS ON THE ASSESSEE AS PER SECTION 68 OF T HE IT ACT 1961 WAS DULY DISCHARGED HENCE NO ADDITION CAN BE MADE I N THE HANDS OF THE ASSESSEE. (3) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,00,000 RECEIVED FROM M/S. PAVITRA GOODS PVT. LTD. U/S 68 OF THE INCOME TAX ACT 1961. THE ASSESSEE HAVING DISCHA RGED ITS ONUS UNDER THE LAW THE ADDITION IS NOT CALLED FOR AND TH US THE SAME BE DELETED. ITA NO. 479/KOL/2010 2 (4) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.6,00,000 RECEIVED FROM M/S PENTA FINANCE & INVESTMENT PVT. L TD. U/S 68 OF THE INCOME TAX ACT 1961. THE ASSESSEE HAVING DISCHA RGED ITS ONUS UNDER THE LAW THE ADDITION IS NOT CALLED FOR AND TH US THE SAME BE DELETED. (5) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,00,000 RECEIVED FROM M/S PENTA FINANCE & INVE STMENT PVT. LTD. U/S 68 OF THE INCOME TAX ACT 1961. THE ASSESSE E HAVING DISCHARGED ITS ONUS UNDER THE LAW THE ADDITION IS N OT CALLED FOR AND THUS THE SAME BE DELETED. (6) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE CA SE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,000.00 RECEIVED FROM M/S. NIKHAR VINIMAY PVT. LTD. U/S 68 OF THE INCOME TAX ACT 1961. THE ASSESSEE HAVING DISCHARGED ITS ON US UNDER THE LAW THE ADDITION IS NOT CALLED FOR AND THUS THE SAM E BE DELETED. (7) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN NOT ADMITTING THE ADDITIONAL EVIDENCES IN RESPECT OF THE ADDITION MADE U/S. 40(A)(IA) OF THE INCOME TAX ACT 1961. TO PREVENT MISCARRIAGE OF JUSTICE THE EVIDENCES BE ADM ITTED. (8) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.24,000 U/S 40(A)(IA) FOR ACCOUNTING CHARGES PAID. ON THE F ACTS OF THE CASE THE PAYMENTS ARE NOT COVERED U/S 194C/J OF THE ACT AND THE DISALLOWANCES IS UNCALLED FOR AND THUS THE SAME BE DELETED. (9) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,75,702 U/S 40(A)(IA) FOR SECURITY SERVICES CHARGES PAID. O N THE FACTS OF THE CASE THE PAYMENTS ARE NOT COVERED U/S 194C/J OF THE ACT AND THE DISALLOWANCES IS UNCALLED FOR AND THUS THE SAME BE DELETED. (10) FOR THAT THE LD ASSESSING OFFICER BE DIRECTED TO RE-COMPUTE THE INTEREST U/S. 234B & 234D OF THE INCOME TAX ACT 196 1AS PER LAW. (11) THE APPELLANT CRAVES LEAVE TO PRESS NEW, ADDI TIONAL GROUNDS OF APPEAL, AMEND AND/OR MODIFY, WITHDRAW ANY OF THE AB OVE GROUNDS BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. GROUND NOS. 1 TO 6 RELATING TO THE ADDITION OF R S.36.00 LAKHS MADE BY THE ASSESSING ITA NO. 479/KOL/2010 3 OFFICER U/S. 68 OF THE INCOME TAX ACT ON ACCOUNT OF BOGUS SHARE CAPITAL IN RESPECT OF THE FOLLOWING 3 APPLICANTS :- (I) M/S. PRAVITRA GOODS PVT. LTD. RS.10.00 LAKHS (II) M/S. PENTA FINANCE & INVESTMENT PVT. LTD. R S.16.00 LAKHS (III) M/S. NIKHAR VINIMAY PVT. LTD. RS.10.00 LAK HS THE MAIN OBSERVATIONS OF THE ASSESSING OFFICER ON A CCOUNT OF ABOVE ARE THAT ASSESSEE HAD RECEIVED RS.2,00,000/- EQUITY SHARE CAPITAL AND RS. 8,00,000 AS PREMIUM, TOTALLING RS.10,00,000/- RECEIVED FROM M/S. PAVITRA GOODS SUP PLIERS PVT. LTD. ON 21.10.2005. M/S. PAVITRA GOODS SUPPLIERS PVT. LTD. HAD FURTHER RECEI VED FROM M/S. TIPTOP COMMERCIAL PVT. LTD. RS.14,00,000/- ON THE SAME DATE I.E. ON 21.10.2005. FURTHER EQUITY PROVED THAT M/S. TIPTOP COMMERCIAL PVT. LTD. HAD RECEIVED RS.16,00,000/- FR OM M/S. SATYAM TRADERS ON THE SAME DATE. AS IN OTHER CASES OF THE GROUP CONCERNS, THE SHARE CAPITAL HAD BEEN SOURCED FROM M/S. SATYAM TRADERS. THE SOURCE OF THE MONEY ENQUIRED AS ABOVE, WAS TRACED IN TWO BANK ACCOUNTS IN THE NAME OF M/S. SATYAM TRADERS, J.N. MUKHERJEE ROAD, H OWRAH-711101. SUMMONS U/S. 131 SENT THROUGH SPEED POST RETURNED UNSERVED WITH OBSERVATI ONS THAT NO SUCH PERSONS WAS EXISTING ON THE GIVEN ADDRESS. IT IS OBSERVED THAT IN OTHER CON CERNS OF THIS GROUP SHARE APPLICATION HAS BEEN SOURCED TO M/S. SATYAM TRADERS BANK. BANK ACCOUNT O F SATYAM TRADERS SHOWS THAT CASH TOTALLING TO ABOUT RS.1,88,00,000/- HAS BEEN DEPOSI TED IN THE ACCOUNT OF M/S. SATYAM TRADERS DURING NOVEMBER, 2005 ONLY IN FEDERAL BANK, R.N. MU KHERJEE ROAD, KOLKATA. HUGE CASH DEPOSITS ARE MADE IN THIS ACCOUNT AND IMMEDIATELY C HEQUES ARE ISSUED. NON EXISTENCE OF SUCH PERSON ESTABLISHED THAT BENEFICIARIES ARE DEPOSITIN G MONEY IN THE SAID ACCOUNT AND AFTER ROUTING IT THROUGH 2-3 LAYERS SAME IS INTRODUCED IN THE BOO KS. TRANSACTION OF DEPOSITING CASH IN THE SOURCE BANK ACCOUNTS, TO ROUTING IT THROUGH A NUMBE R OF BANK ACCOUNTS AND FINALLY DEPOSITING THE SAME IN THE BENEFICIARY ASSESSEES BANK ACCOUNT HAS TAKEN PLACE IN A SINGLE DAY I.E. ON 21.10.2005. ALL T.HE PERSONS INVOLVED IN THE CHAIN S OF TRANSFERS ARE APPEARING TO BE LOCATED AT DIFFERENT ADDRESSES. ON THE OTHER HAND, NO SUCH FAC T IS BROUGHT ON THE RECORD THAT WHY ALL THE TRANSACTIONS TOOK PLACE IN A SINGLE DAY. THE ASSESS EE RECEIVED SHARE CAPITAL OF RS.25,00,000/- (RS.5 LAKHS EQUITY SHARE CAPITAL AND RS.20 LAKHS PR EMIUM) FROM M/S. PENTA FINANCE & INVESTMENTS PVT. LTD., 27, WESTON STREET, KOLKATA O N 19.10.204. THE ASSESSEE FILED CONFIRMATION FROM M/S. PENTA FINANCE & INVESTMENTS PVT. LTD. ALONGWITH COPY OF BANK ITA NO. 479/KOL/2010 4 STATEMENT SHOWING PAYMENTS TO THIS ASSESSEE. THE AS SESSEE HAD CLARIFIED ITS SOURCE AS RECEIPT OF RS.16 LAKHS FROM M/S RICH VALLEY TRADERS PVT. LTD. BY CHEQUE BEARING NO.247477 ON 19.10.2005. THE BANK STATEMENT OF M/S. PENTA FINANC E HOWEVER, SHOWS THE RECEIPT ONLY OF RS.10 LAKHS BY CHEQUE NO.247477 IN ITS BANK ACCOUNT IN ABM AMBRO BANK. THIS DISCREPANCY WAS BROUGHT TO THE NOTICE OF THE LD. AUTHORISED REP RESENTATIVE FOR THE ASSESSEE BUT NO REPLY WAS SUBMITTED. ACCORDINGLY, SHARE CAPITAL TO THE EX TENT OF RS.6,00,000/- IS HELD AS ASSESSEES OWN MONEY CREDITED TO ITS BOOKS. SIMILARLY, IN THE CONFIRMATION FILED ON BEHALF OF M/S. PENTA FINANCE & INVESTMENTS PVT. LTD., IT HAS BEEN STATED THAT RS.10.00 LAKHS WAS RECEIVED FROM A TARANYA MERCHANDISE PVT. LTD. BY CHEQUE NO.394731 DATED 19.10.2005. THE BANK STATEMENT OF M/S. PENTA FINANCE & INVESTMENTS PVT. LTD. FILED WITH THE CONFIRMATION DOES NOT SHOW ANY DEPOSIT OF SUCH MONEY BY SUCH CHEQUE NO. IN THE BAN K ACCOUNT OF M/S. PENTA FINANCE & INVESTMENTS PVT. LTD. THIS DISCREPANCY WAS BROUGHT TO THE NOTICE OF THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, BUT NO REPLY WAS S UBMITTED LATER. ACCORDINGLY, SHARE CAPITAL TO THE EXTENT OF RS.10,00,000/- IS HELD AS ASSESSEES OWN MONEY CREDITED TO ITS BOOKS. FURTHER, ASSESSEE HAD RECEIVED SHARE MONEY INTER ALIA FROM M /S. NIKHAR VINIMAY PVT. LTD. THE ASSESSEE ON REQUIREMENT COULD NOT PRODUCE ANY CONFIRMATION T O ESTABLISH IDENTITY OR CREDITWORTHINESS OF ALLEGED NIKHAR VINIMAY PVT. LTD. THE GENUINENESS IS ALSO NOT ESTABLISHED BY FILING ANY CONFIRMATION OR BANK ACCOUNT OR ANY OTHER EVIDENCE. ACCORDINGLY, SHARE CAPITAL OF RS.10,00,000/- (RS. 2.00 LAKH ENQUIRY SHARE AND RS. 8.00 LAKH PREMIUM) IS HELD AS ASSESSEESOWN MONEY CREDITED TO ITS BOOKS OF ACCOUN T. IN ADDITION TO ABOVE, HE ANALYSED VARIOUS JUDICIAL PRONOUNCEMENTS MAINLY IN THE CASE OF MCDOWELL AND CO. LTD. VS. CTO 154 ITR 148 (SC) & EXIOMP RESOURCES (INDIA) LTD. VS. CI T [2005] 276 ITR 87 (CAL.). 2.1 ON APPEAL, LD. CIT(A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY RELYING ON JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF HINDUSTHAN TEA TRADING CO. LTD. VS. CIT [2003] 263 ITR 289 (CAL.) AND FURTHER BY MAKING FO LLOWING OBSERVATIONS :- IN THE CASE UNDER CONSIDERATION ON VERIFICATION T HE A.O. NOTED THAT THE SO CALLED COMPANY FROM WHOSE ACCOUNT THE HUGE SHARE AP PLICATION AMOUNTS HAS RECEIVED HAS NO CREDITWORTHINESS. ON FURTHER VE RIFICATION THE ULTIMATE SOURCE OF THE AMOUNT IN THE CASE OF M/S. PRAVATI GO ODS SUPPLIERS PVT. LTD. WAS TRACED. IN THIS ACCOUNTS THE CASH WERE DEPOSITE D AND WERE ROUTED THROUGH DIFFERENT COMPANY IN FORM OF SHARE APPLICAT ION MONEY AND FINALLY DEPOSITED IN THE ACCOUNT OF THE APPELLANT COMPANY O N THE SAME DAY. ON FURTHER VERIFICATION IT WAS NOTED BY THE A.O. THAT M/S. SATYAM TRADERS ITA NO. 479/KOL/2010 5 FROM WHOSE ACCOUNTS THE CASH ENTRIES HAS BEEN TAKEN IS NON EXISTENT AND CASH OF MORE THAN RS.1.88 CRORE HAS BEEN DEPOSITED ONLY IN NOVEMBER, 2005. ACCORDINGLY, SHOW CAUSE WAS ISSUED TO THE ASS ESSEE TO PROVE THE EXISTENCE AND IDENTITY OF THE ABOVE CONCERNS. HOWEV ER, NEITHER DURING THE COURSE OF APPEAL NOR IN THE ASSESSMENT PROCEEDING A NY EVIDENCE WITH REGARD TO ABOVE WERE FURNISHED. LIKEWISE IN THE CAS E OF MS. PENTA FINANCE & INVESTENT PVT. LTD. AND M/S. NIKHAR VINIMAY PVT. LTD. THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS O F THE TRANSACTION WAS NOT PROVED. THE ONLY PLEA TAKEN BY THE APPELLANT IS THAT THE ONUS OF THE ASSESSEE DOES NOT EXTEND TO THE SOURCE OF THE SOURC E, WHICH IS NOT CORRECT. THE VARIOUS DECISION RELIED BY THE ASSESSEE IS ALSO NOT APPLICABLE AS THE FACTS OF THE CASE IS NOT COMPARABLE. IN THE CASES C ITED BY THE APPELLANT NEITHER THE CORPORATE VEIL WAS LIFTED TO EXAMINE TH E REAL NATURE OF THE TRANSACTION NOR THE ULTIMATE SOURCE OF THE MONEY IN QUESTION WAS FOUND TO BE A NON-EXISTENT PERSON. FURTHER IN THE CASE UNDER CONSIDERATION THERE ARE DIRECT MATERIAL FROM WHICH ONLY INFERENCE CAN BE DR AWN IS THAT THE UNDISCLOSED INCOME DID NOT EXIST AND THE SAME BELON GED TO THE ASSESSEE. 3. AGGRIEVED BY THIS, NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING, LD. COUNSEL APPEARING O N BEHALF OF THE ASSESSEE HAS SUBMITTED THAT LD. CIT(A) HAS NOT DISPUTED THAT ASSESSEE HAS FILED THE FOLLOWING :- (A) SHARE APPLICATION FORM RECEIVED FROM THE APPLI CANT COMPANY. (B) COPY OF MEMORANDUM OF THE COMPANY. (C) COPIES OF THE BALANCE SHEET OF THE APPLICANT CO MPANIES TO ESTABLISH THE FACT THAT THEY ARE HAVING SUBSTANTIAL CAPITAL T O MAKE THE SHARE APPLICATION. (D) ALL PAYMENTS HAVE BEEN RECEIVED BY ACCOUNT PAYEE CH EQUES AND THE DETAILS OF THE CHEQUE AND BANK ACCOUNT OF THE APPLI CANTS ARE FILED. (E) COPIES OF I.T. RETURN OF THE SHARE APPLICANT TO PRO VE THAT THEY ARE REGULARLY ASSESSED TO TAX. (F) DETAILS OF THE SOURCE OF THE MONEY FROM WHICH THEY CONTRIBUTED THE SHARE APPLICATION MONEY. HENCE THE SOURCE OF SOURCE OF THE CREDIT IS ALSO FILED. (G) PAN CARD OF DIRECTOR OF THE COMPANIES. IN RESPECT OF ALL THE COMPANIES, HE FURTHER SUBMITT ED THAT ASSESSING OFFICER HAS NOT FIND ANY DISCREPANCY IN THE ABOVE SAID DOCUMENTS AND ASSESSE E HAS ALSO PRODUCED THE DOCUMENTS OF ITA NO. 479/KOL/2010 6 SHARE APPLICATION FORM, MOVEMENT OF FUNDS THROUGH A CCOUNT PAYEE CHEQUES, SOURCE OF THE SOURCE OF THE FUNDS RECEIVED BY THE ASSESSEE HAS AL SO FILED BEFORE THE ASSESSING OFFICER. PRIMARILY, THE INITIAL ONUS CAST ON THE ASSESSEE HA S DISCHARGED BY THE ASSESSEE, HENCE, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. THEREFORE, HE REQUESTED TO SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND REQUESTED TO DELETE THE ADDITIONS MADE BY THE REVENUE AUTHORITIES. 5. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HEAVILY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES AND FURTHER POINTED OUT THAT TH E ASSESSING OFFICER HAS RIGHTLY BROUGHT ON RECORD THAT THIS GROUP SHARE APPLICATION HAS BEEN S OURCED TO M/S. SATYAM TRADERS BANK. BANK ACCOUNT OF SATYAM TRADERS SHOWS THAT CASH TOTALLING TO ABOUT RS.1,88,00,000/- HAS BEEN DEPOSITED IN THE ACCOUNT OF M/S. SATYAM TRADERS DUR ING NOVEMBER, 2005 ONLY IN FEDERAL BANK, R.N. MUKHERJEE ROAD, KOLKATA. HUGE CASH DEPOSITS AR E MADE IN THIS ACCOUNT AND IMMEDIATELY CHEQUES ARE ISSUED. NON EXISTENCE OF SUCH PERSON ES TABLISHED THAT BENEFICIARIES ARE DEPOSITING MONEY IN THE SAID ACCOUNT AND AFTER ROUTING IT THRO UGH 2-3 LAYERS SAME IS INTRODUCED IN THE BOOKS. THEREFORE, HE REQUESTED TO UPHOLD THE ORDERS OF THE REVENUE AUTHORITIES. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE MATERIAL AVAILABLE ON RECORD, IT IS OBSERVED THAT SHARE APPLICATIONS RECE IVED BY THE ASSESSEE-COMPANY AS APPEARING AT PAGES 10, 22 & 34 ARE AS UNDER :- (I) IT IS OBSERVED AT PAGE 10 OF THE PAPER BOOK TH AT M/S. PAVITRA GOODS & & SUPPLIERS (P) LTD. PAID RS.10,00,000/- BY CHEQUE NO .310855 DATED 21.10.2005 DRAWN ON FEDERAL BANK LIMITED. (II) FURTHER, IT IS OBSERVED AT PAGE 22 OF THE PAP ER BOOK THAT PENTA FINANCE & INVESTMENT PRIVATE LIMITED PAID VIDE CHEQUE NO.5051 40 DATED 19.10.2005 RS.8,00,000/-, CHEQUE NO.505141 DATED 19.10.2005 RS.8,00,000/- & C HEQUE NO.505142 DATED 19.10.2005 RS.9,00,000/- DRAWN ON ABN AMRO BANK LIMITED. THE S AID COMPANY HAS FURTHER STATED THAT IT RECEIVED CHEQUE NO. 247477 DATED 19.10.2005 OF RS.1 0,00,000/- FROM RICH VALLEY TRADERS PVT. LTD. AND CHEQUE NO.394731 DATED 19.10.2005 OF RS.16,00,000/- FROM TARANYA MERCHANDISE PVT. LTD. (III) IT IS OBSERVED AT PAGE 34 OF THE PAPER BOOK THAT M/S. NIKHAR VINIMAY PVT. LTD. ITA NO. 479/KOL/2010 7 PAID RS.10,00,000/- BY CHEQUE NO.045468 DATED 23.08 .2005 DRAWN ON IDBI BANK. THE ABOVE FACTS ARE NOT DISPUTED BY THE REVENUE. IT WAS CONTE NTED THAT THIS GROUP SHARE APPLICATION HAS BEEN SOURCED TO M/S. SATYAM TRADERS BANK. BANK ACCO UNT OF SATYAM TRADERS SHOWS THAT CASH TOTALLING TO ABOUT RS.1,88,00,000/- HAS BEEN DEPOSI TED IN THE ACCOUNT OF M/S. SATYAM TRADERS DURING NOVEMBER, 2005 ONLY IN FEDERAL BANK, R.N. MU KHERJEE ROAD, KOLKATA. HUGE CASH DEPOSITS ARE MADE IN THIS ACCOUNT AND IMMEDIATELY C HEQUES ARE ISSUED. NON EXISTENCE OF SUCH PERSON ESTABLISHED THAT BENEFICIARIES ARE DEPOSITIN G MONEY IN THE SAID ACCOUNT AND AFTER ROUTING IT THROUGH 2-3 LAYERS SAME IS INTRODUCED IN THE BOO KS IS NOT ACCEPTABLE, SINCE THE FACT THAT THE SHARE APPLICATION MONEY HAS BEEN RECEIVED BY THE AS SESSEE-COMPANY PRIOR TO DEPOSITION OF RS.1.88 CRORES IN NOVEMBER, 2005 IN THE BANK ACCOUN TS OF M/S. SATYAM TRADERS WHICH WAS RECORDED BOTH BY THE ASSESSING OFFICER AS WELL AS B Y THE LD. CIT(A). 7. KEEPING IN VIEW OF THE ABOVE FACTS, WE ARE OF TH E CONSIDERED VIEW THAT ASSESSEE HAS DISCHARGED PRIMARY ONUS BY ESTABLISHING IDENTITY OF THE SHARE APPLICANT, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE SHARE APPL ICANT. THEREFORE, WE FIND NO JUSTIFICATION ON THE PART OF THE REVENUE TO MAKE ADDITION OF RS.36.0 0 LAKHS IN THE HANDS OF THE ASSESSEE U/S. 68 OF THE INCOME TAX ACT BASED ON THE SUBSEQUENT EVENT . HENCE, WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE AND DIRECT THE AS SESSING OFFICER TO DELETE THE ADDITION OF RS.36.00 LAKHS. HENCE, GROUND NOS. 1 TO 6 ARE ALLOW ED. 8. GROUND NOS. 7 TO 9 ARE RELATING TO THE ADDITION MADE U/S. 40(A)(IA) OF THE ACT. 9. THE RELEVANT OBSERVATIONS OF THE ASSESSING OFFIC ER AS WELL AS LD. CIT(A) ARE AS UNDER :- ASSESSING OFFICER OBSERVATIONS : DISALLOWANCE U/S. 40(A)(IA) : IN THE COURSE OF SCRUTINY ASSESSMENT IT IS OBSERVED THAT THE ASSESSEE HAD PAID ACCOUNTI NG CHARGES RS.24,000/-. THE A/R OF THE ASSESSEE EXPLAINED THAT THE SAME ARE PAID FOR ACCOUNTING CHARGES. SIMILARLY, THE ASSESSEE HAD DEBITED RS.1,7 5,702/- TO ITS P & L A/C. AS SECURITY SERVICE CHARGES. THE A/R EXPLAINED TH AT THE SAME HAS BEEN PAID FOR SECURITY SERVICE CHARGES NO FURTHER DETA ILS/SUBMISSION WAS FILED. THE A/R OF THE ASSESSEE ON ENQUIRY EXPLAINED THAT NO TDS HAS BEEN DEDUCTED ON SUCH PAYMENTS. THE ATTENTION OF TH E A/R OF THE ASSESSEE IS DRAWN TO PROVISION U/S. 40(A)(IA) READ WITH SECT ION 194J AND 194C OF THE ITA NO. 479/KOL/2010 8 I.T. ACT AND IT WAS REQUIRED TO SHOW CAUSE WHY SUCH EXPENDITURE SHOULD NOT BE DISALLOWED FOR DEDUCTION? THE A/R OF THE ASSESSEE HAS NOT OFFERED ANY EXPLAN ATION. THEREFORE, AS PER SECTION 194J AND 194C THE ASSESSE E WAS REQUIRED TO DEDUCT TAX AT SOURCE, BUT THE ASSESSEE DID NOT COMP LY. AS PER SECTION 40(A)(IA), IT IS AN INADMISSIBLE EXPENDITURE. ACCOR DINGLY, THE SAME ARE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF TH E ASSESSEE. LD. CIT(A)S OBSERVATIONS : HOWEVER, DURING THE COURSE OF APPEAL THE APPELLAN T HAS FAILED TO EXPLAIN THE CIRCUMSTANCES FOR NOT PRODUCING THE DET AILS AS REQUIRED BY THE A.O. AT THE TIME OF THE ASSESSMENT PROCEEDINGS. ACC ORDINGLY, THE ADDITIONAL EVIDENCE REGARDING PAYMENT OF ACCOUNTING AND SECURITY CHARGES FILED DURING THE COURSE OF APPEAL IS NOT CONSIDERED AND THE DISALLOWANCE MADE BY THE A.O. OF RS.24,000/- AND RS.1,75,702/- U NDER SECTION 40(A)(IA) IS CONFIRMED AND GROUND NOS. 6 & 7 TAKEN BY THE APPELLANT IS DISMISSED. AT THE TIME OF HEARING, LD. COUNSEL APPEARING ON BE HALF OF THE ASSESSEE BY REFERRING TO THE LEDGER OF SECURITY SERVICE CHARGES WHICH WAS PLACED AT PAGE 46 TO 61 OF THE PAPER BOOK AND LEDGER ACCOUNTING CHARGES WHICH ARE PLACED AT PAGES 62 TO 64 OF THE PAPER BOOK AND CONTENDED THAT IN RESPECT OF SECURITY SERVICE CHARGES SINCE A SSESSEE HAS PAID 9 PERSONS @ RS.910/- PER HEAD, NO TDS IS REQUIRED FOR THE SAME. SIMILARLY, I NSPECT OF ACCOUNTING CHARGES ALSO, ASSESSEE HAS PAID RS.24,000/- ONLY TO TWO PERSONS @ RS.12,00 0/- PER HEAD. BASED ON THESE DOCUMENTS, HE SUBMITTED THAT THE ASSESSEE IS NOT SUPPOSED TO D EDUCT TDS U/S. 194C & 194J OF THE INCOME TAX ACT. THEREFORE, HE REQUESTED TO DELETE THE SAME . 10. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTAT IVE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 11. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CARE FUL PERUSAL OF THE MATERIAL AVAILABLE ON RECORD, SPECIALLY THE LEDGER OF THE SECURITY SERVIC E CHARGES AS WELL AS LEDGER OF ACCOUNTING CHARGES, WE ARE OF THE OPINION THAT ASSESSEE IS NOT LIABLE TO DEDUCT ANY TDS AS PER SECTION 194C & 194J OF THE INCOME TAX ACT AND FIND NO REASO N TO INVOKE THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT. THEREFORE, WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO D ELETE THE SAME. ITA NO. 479/KOL/2010 9 12. THE OTHER GROUND REGARDING LEVY OF INTEREST U/S . 234B & 234D WHICH IS CONSEQUENTIAL IN NATURE AND REQUIRES NO ADJUDICATION. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D AS INDICATED ABOVE. $1 2 3' 4 56 ORDER PRONOUNCED IN THE COURT ON 13. 04. 2010. SD/- SD/- [ . . , ] [ . .. .'# '#'# '#. .. . , ,, , $% ] [B.R.MITTAL ] [ C . D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER (#%) DATED : 13TH MARCH, 2011. $1 7 /8 9$8)/ COPY OF THE ORDER FORWARDED TO: 1. ,- /APPELLANT- TIRUPATI CARRIER LIMITED, C/O. D.J. S HAH & CO., 2, ELGIN ROAD, KOLKATA-700020. 2 /0,- / RESPONDENT : ASSTT. COMMISSIONER OF INCOME-TAX, C C-XXVIII, KOLKATA. 3. 1'/ THE CIT, 4. 1' ()/ THE CIT(A), KOLKATA. 5. ?4 /'/ DR, KOLKATA BENCHES, KOLKATA [08 // TRUE COPY ] $1'3/ BY ORDER , !A /ASSTT REGISTRAR [KKC BC 'DA E /SR.PS]