DCIT, New Delhi V. M/s. Jay Polychem India Ltd., New Delhi

ITA 4850/DEL/2009

• Counselvise Citation: 485020114 RSA 2009
• Duration Of Justice: 5 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 24-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAMKAUNJM A
• Keywords: Unexplained cash credit
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI. PRAMOD KUMAR ITA NO. 4850/DEL/2009 ASSESSMENT YEAR: 2006-07 DEPUTY CIT, VS. JAY POLYCHEM INDIA LTD. CIRCLE 4(1), A-101, LAJPAT NAGAR-I, NEW DELHI. NEW DELHI. (PAN: AAACJ0657M) (APPELLANT) (RESPONDENT) REVENUE BY: SHRI P. DAMKAUNJM A, SR. DR ASSESSEE BY: SHRI AJAY WADHWA, CA DATE OF HEARING : 27.01.2015 DATE OF PRONOUNCEMENT: :03.2015 ORDER PER I.C. SUDHIR: JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER M AINLY ON THE GROUND THAT THE LEARNED CIT(APPEALS) HAS ERRED IN D ELETING THE ADDITION OF RS.5,43,40,000 MADE BY THE ASSESSING OFFICER ON ACC OUNT OF UNEXPLAINED CASH CREDITS UNDER SEC. 68 OF THE INCOME-TAX ACT, 1 961. 2. IN SUPPORT OF THE GROUND, THE LEARNED SR. DR PLA CED RELIANCE ON THE ASSESSMENT ORDER WITH THIS CONTENTION THAT THE LEAR NED CIT(APPEALS) WHILE DELETING THE ADDITION IN QUESTION HAS FAILED TO APP RECIATE THAT THE ASSESSEE HAD NOT DISCHARGED ITS ONUS OF PROVING THE CREDITWO RTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION. 2 3. THE LEARNED AR ON THE OTHER HAND TRIED TO JUSTIF Y THE FIRST APPELLATE ORDER ON THE ISSUE WITH THE SUBMISSION THAT IN THE PRESENT CASE, MATTER IS TO BE CONSIDERED FROM THE STAND POINT THAT IT IS A CAS E OF INTRODUCTION OF FRESH CAPITAL IN A COMPANY. HE SUBMITTED THAT THE SHARES WERE ALLOTTED FOR A FACE VALUE OF RS.5,50,00,000, HOWEVER, ONLY A SUM OF RS. 6,60,000 WAS RECEIVED IN CASH IN THE ASSESSMENT YEAR 2006-07 UNDER CONSID ERATION AND THE BALANCE AMOUNT OF RS.5,43,40,000 WAS SHOWN AS RECEIVABLE AS ON 31.3.2006 AND WAS RECEIVED ONLY AFTER 31.3.2006 I.E. IN THE ASSESSMEN T YEAR 2007-08. BESIDES, THE ASSESSEE HAD ALSO FURNISHED SUFFICIENT EVIDENCE IN SUPPORT OF THE CLAIM AND THE PARTIES HAD APPEARED BEFORE THE ASSESSING O FFICER IN RESPONSE TO THE NOTICES ISSUED UNDER SEC.133(6) OF THE INCOME-TAX A CT, 1961 AND HAD SUBMITTED THEIR CONFIRMATIONS AND COPY OF BALANCE S HEET. THE LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(APPEALS) AND PLACED RELIANCE ON THE DOCUMENTS FILED BEFORE THE A UTHORITIES BELOW AS WELL AS THE DECISIONS CITED THERETO. 4. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. WE FIND THAT ABOVE STATED MATERIAL FACTS BY THE LEARNED AR AND NOTED BY THE L EARNED CIT(APPEALS) 3 HAVE NOT BEEN REBUTTED BEFORE THE ITAT. BESIDES, B EFORE THE ASSESSING OFFICER, THE ASSESSEE HAD FURNISHED FOLLOWING DOCUM ENTS TO CONFIRM THE ALLOTMENT OF SHARES IN THE ASSESSMENT YEAR 2006-07 AND FURTHER RECEIPT OF MONEY IN ASSESSMENT YEAR 2007-08: A) DOCUMENTS PERTAINING TO ALLOTMENT OF SHARES FIL ED WITH THE REGISTRAR OF COMPANIES (ROC). B) DETAILS OF BOOK ENTRIES MADE PERTAINING TO ALLOT MENT OF SHARES. C) 1. CONFIRMATION OF INVESTMENT BY THE PARTIES 2. COMPLETE DETAILS OF PAYMENT 3. ACKNOWLEDGMENT OF INCOME-TAX RETURN ALONG WITH PAN 4. COPY OF INCOME TAX ASSESSMENT ORDER 5. COMPUTATION OF INCOME 6. COPY OF AUDITED BALANCE SHEET OF THESE PARTIES FOR THE YEARS ENDING 31 ST MARCH 2005, 31 ST MARCH 2006 AND 31 ST MARCH 2007 SHOWING THE NET WORTH AND ABILITY OF INVEST. FURTHER, THE A.O. ALSO ISSUED NOTICES TO THESE PAR TIES U/S. 133(6) WHEREBY (I) THESE PARTIES APPEARED BEFORE THE A.O. AND FURTHER SUBMITTED THEIR CONFIRMATION AND COPY OF BALANCE SH EET. (II) THEY ALSO PROVIDED THE A.O. WITH DETAILS OF C HEQUES ISSUED, AGAINST THE SHARES ALLOTTED WHICH CLEARLY SHOWED TH AT THE AMOUNTS WERE PAID IN THE NEXT FINANCIAL YEAR I.E. 2 006-07 (I.E ASST. YEAR 2007-08). 5. DURING THE YEAR, FOLLOWING CAPITAL SHARES WERE A LLOTTED TO THESE COMPANIES: 4 A) GANAPATI BREWERIES LTD., RS. 1,79,75,000 B) BAWEJA EXPORTS PVT. LTD. RS. 2,54,50,000 C) GANAPATI SUGAR LTD. RS. 1,15,75,000 RS. 5,50,00,000 6. THE LEARNED CIT(APPEALS) HAS GIVEN RELIEF ON THE BASIS THAT SHARE ALLOTMENT MONEY WAS RECEIVED BY THE ASSESSEE ONLY I N THE ASSESSMENT YEAR 2007-08 AND NOT IN THE ASSESSMENT YEAR 2006-07 AND THAT THE SHAREHOLDERS HAD COMPLIED BEFORE THE ASSESSING OFFICER IN RESPON SE TO THE NOTICES ISSUED UNDER SEC.133(6) OF THE INCOME-TAX ACT, 1961 AND HA D SUBMITTED THEIR CONFIRMATIONS, COPIES OF BALANCE SHEET AND THE DETA ILS OF CHEQUES ISSUED, AGAINST THE SHARES ALLOTTED SHOWING THAT AMOUNTS WE RE PAID IN THE FINANCIAL YEAR 2006-07 RELEVANT TO THE ASSESSMENT YEAR 2007-0 8. THE LEARNED CIT(APPEALS) HAS THEREAFTER OBSERVED THAT DURING TH E COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS, THE ASSESSEE HAD FURNISHED ALL THE NECESSARY PARTICULARS/DETAILS AS REPRODUCED BY HIM IN PARA NO .4 OF THE FIRST APPELLATE ORDER. HE, THEREAFTER, FOLLOWING SEVERAL DECISIONS OF THE HONBLE COURTS INCLUDING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. (2008) 216 CTR(S.C) 198 AND OF HON'BLE DELHI HIGH COURT IN THE CASES OF CIT VS. DIVINE LEASING & FINANCE LTD. (2007) 299 ITR 268 (DEL.), CIT VS. VALUE CAPITAL SERVICES LTD. (2008) 307 ITR 334 (DEL.) AND ORS. HAS DELETED THE ADDITION IN QUESTIO N. 5 7. WE ARE OF THE VIEW THAT CONSIDERING THE ENTIRE M ATERIAL PLACED ON RECORD, IT WAS FAIR ON THE PART OF THE LEARNED CIT( APPEALS) TO DELETE THE ADDITION IN QUESTION ON THE BASIS THAT THE SHARE AP PLICANTS WERE EXISTING PARTIES AND THE PAYMENTS WERE MADE THROUGH BANKING CHANNELS AND FURTHER THAT THE ASSESSING OFFICER COULD NOT POINT OUT ANY DISCREPANCY IN THE EVIDENCES RELIED UPON BY THE ASSESSEE REGARDING GEN UINENESS OF THE TRANSACTION AND YEAR OF THE PAYMENT. WE THUS DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER ON THE ISSUE. THE SAME IS UPH ELD. THE GROUND IS ACCORDINGLY REJECTED. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.03.2015 SD/- SD/- ( PRAMOD KUMAR ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31/03/2015 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 6 DATE DRAFT DICTATED ON COMPUTER 16.03.2015 DRAFT PLACED BEFORE AUTHOR 16.03.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 27.03.20 15 APPROVED DRAFT COMES TO THE SR.PS/PS 31.03.2015 KEPT FOR PRONOUNCEMENT ON 31.03.2015 FILE SENT TO THE BENCH CLERK 31.03.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.