CHITWAN DEVELOPERS P. LTD, RAIGAD V. ITO 6(2)(1), MUMBAI

ITA 4897/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3191 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Unexplained cash credit; Share purchase agreement; Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 143(3); 133(6); 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . . , , !' #$, % , & BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.4897/M/13 ( %' ( / ASSESSMENT YEAR: 2009-10) M/S. CHITWAN DEVELOPERS PRIVATE LIMITED A-9/2, MIDC TALOJA INDUSTRIAL ESTATE, TALOJA RAIGARH 410208 ' / VS. INCOME TAX OFFICER 6(2)(1) AAYKAR BHAWAN, MUMBAI - 400020 ./ ./ PAN/GIR NO. : AACCC7160J ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 04.03.2016 !' /DATE OF PRONOUNCEMENT: 16.06.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 06.09.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)16, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2007-08. ASSESSEE BY: SHRI RONAK DOSHI DEPARTMENT BY: SHRI ASHISH HELIWAL ITA NO.4897/MUM/13 A.Y.2009-10 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED THE RETURN OF INCOME FOR THE A.Y.2009-10 ON 30.09.2009 DECLARI NG TOTAL INCOME TO THE TUNE OF RS.1,67,690/-. THE RETURN WAS ASSES SED U/S. 143(3) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) AN D THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.8,59 ,67,690/- BY VIRTUE OF ORDER DATED 29.12.2011. THE ASSESSING OFFICER T REATED THE SHARE APPLICATION MONEY TO THE TUNE OF RS.8,58,00,000/- A S UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT BECAUSE THE ASSESSEE FAIL ED TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE C REDITORS, THEREFORE THE ABOVE SAID CREDIT WAS TREATED AS UNEXPLAINED CA SH CREDIT U/S.68 OF THE ACT AND ADDED TO INCOME OF THE ASSESSEE, THEREA FTER THE ASSESSEE FILED THE APPEAL BEFORE CIT(A) WHO ALSO CONFIRMED T HE SAID ADDITION, THEREFORE, THE ASSESSEE FILED THE PRESENT APPEAL BE FORE US. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND BEF ORE US:- 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.8,50,00,000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT WITHOUT APPRECIATING THE DETAILS / EXPLANATION / SUBMISSION MADE BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE CIT(A). THUS, THE ADDITION CONFIRME D MUST BE DELETED. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN NOT CONSIDERING ON WHIMSICAL REASONS THE DOCUMENTS SUBMITTED BY DOWNLOADING FROM THE SITE OF THE ROC AS SUPPORTING EVIDENCES TO PROVE THE GENUINENESS OF THE SAID SHARE CAPITAL TRANSACTIONS. 3. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN NOT DIRECTING THE ASSESSING OFFICER TO PROVIDE COPIES O F THE DOCUMENTS DIRECTLY SUBMITTED BY THE SHARE ITA NO.4897/MUM/13 A.Y.2009-10 3 APPLICANTS TO THE ASSESSING AUTHORITY IN THE ASSESSMENT PROCEEDINGS DESPITE A SPECIFIC REQUEST MADE TO HER BUT WHO CONFIRMED THE ADDITION IGNORING THESE DOCUMENTS TOTALLY. 4. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IGNORIN G THE FACTS THAT NO PROPER OPPORTUNITY WAS PROVIDED BY THE ASSESSING OFFICER TO THE ASSESSEE IN ASSESSMENT PROCEEDINGS. THUS, THE ADDITION MADE BY ASSESSING AUTHORITY MERELY ON ASSUMPTIONS AND PRESUMPTIONS MUST BE DELETED. 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE RECORD CAREFULLY. THE REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE ASSESSEE HAS FURNISHED THE DETAILS OF SEVEN CREDITO RS WHICH IS ON RECORD AND THE CREDITORS ALSO FURNISHED THE DETAILS U/S.131 AND 133(6) OF THE ACT, BUT THEIR DETAILS WERE DISCREDITED ON T HE BASIS OF THE PARTIAL BANK STATEMENT, THEREFORE, THEIR SHARE APPLICATION MONEY WAS TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT WRONG LY AND ILLEGALLY. IT IS ALSO ARGUED THAT THE SHARE APPLICATION MONEY CAN NOT BE TREATED AS UNEXPLAINED CASH CREDIT ON ACCOUNT OF ASSESSEE EVEN AFTER PURCHASE BY BOGUS SHAREHOLDERS IN VIEW OF THE LAW SETTLED IN CI T VS. LOVELY EXPORTS (P.) LTD. (216 CTR 195) (SC) AND CIT VS. CR EATIVE WORLD TELEFILMS LTD. (333 ITR 100) (BOM.)(HC) AND CIT VS. STELLER INVESTMENT LTD. (251 ITR 263) (SC). IT IS ALSO ARG UED THAT THE ASSESSEE HAVE ESTABLISHED THE IDENTITY OF THE SHARE APPLICANTS AND THEREFORE IN THE SAID CIRCUMSTANCES THE SAID AMOUNT IS NOT REQUIRED TO BE ADDED TOWARDS TAXABLE INCOME OF THE ASSESSEE, IN VIEW OF THE LAW ITA NO.4897/MUM/13 A.Y.2009-10 4 SETTLED IN CIT VS. AI ANAM AGRO FOODS (P.) LTD. (20 13) (219 TAXMAN 125) (ALL.)(HC). IT IS ALSO ARGUED THAT THE ASSESS EE HAS ALSO FURNISHED THE DETAILS IN ADDITIONAL EVIDENCE WHICH HAS BEEN L IES AT PAGE 59 TO 1739 OF THE PAPER BOOK AND CAN BE CONSIDERED TO DEC IDE THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW. 5. IT IS ALSO ARGUED THAT IF THE TRANSACTION OF BOG US SHAREHOLDER IS FOUND THEN IN THE SAID CIRCUMSTANCES THE DEPARTMENT CAN REOPEN THE ASSESSMENT AND THEIR INDIVIDUAL BUT THE SHARE APPLI CATION MONEY IS NOT REQUIRED TO BE CREDITED AS INCOME OF THE ASSESSEE I N VIEW OF THE LAW SETTLED IN CIT VS. VENKATESHWAR ISPAT (P.) LTD. (31 9 ITR 393) (CHHAT.) (HC). HOWEVER, THE LEARNED DEPARTMENTAL R EPRESENTATIVE STRONGLY RELIED UPON THE ORDER PASSED BY THE CIT(A) . KEEPING IN VIEW OF THE ARGUMENT ADVANCED BY THE LEARNED REPRESENTAT IVE OF THE PARTIES, IT CAME INTO THE NOTICE THAT THE ASSESSEE RECEIVED THE SHARE APPLICATION MONEY TO THE TUNE OF RS.9,58,00,000/- FROM 17 PARTI ES AND NAMES THEREOF ARE HEREBY MENTIONED BELOW:- SR. NO. NAME AND ADDRESS OF THE ALLOTTEES TOTAL AMOUNT RECEIVED (RS.) REMARKS 1 KAPINDRA MULTITRADE PVT. LTD. 14, POPATWADI, 1 ST FLOOR, KALBADEVI, MUMBAI - 400002 35,00,000 1 ST & 2 ND NOTICE RETURNED UNSERVED 2 FAIRMONT VENTURE PVT. LTD. 105, SAGAR SHOPPING CENTRE J.P.ROAD,ANDHERI(W) MUMBAI - 400058 50,00,000 NOTICE SERVED ON NEW ADDRESS ITA NO.4897/MUM/13 A.Y.2009-10 5 3 KUMAON ENGINEERING COMPANY PVT. LTD. JAI DURGA COMLPLEX CHS LTD. B G/12 CABIN ROAD, BHAYANDER (E), THANE 401105 25,00,000 1 ST & 2 ND NOTICE RETURNED UNSERVED 4 LAURELS VENTURES PVT. LTD. NEXT TO MAFATLAL MILL RATION SHOP, N.M.JOSHI MARG, LOWER PAREL, MUMBAI - 400013 50,00,000 2 ND NOTICE SERVED BUT NO REPLY RECEIVED 5 MOTOR SOFT TEL PVT. LTD 105, SAGAR SHOPPING CENTRE J.P.ROAD, ANDHERI(W), MUMBAI - 400058 40,00,000 2 ND NOTICE SERVED BUT NO REPLY RECEIVED 6 BLAZER VENTURES PVT. LTD. KEDARNATH MISHRA, KHOTWADI, SANTACRUS (W), MUMBAI 400054 50,00,000 2 ND NOTICE SERVED BUT NO REPLY RECEIVED 7 ANGEL VENTURES PVT. LTD. 105, SAGAR SHOPPING CENTRE J.P.ROAD, ANDHERI(W), MUMBAI -400058 50,00,000 1 ST & 2 ND NOTICE RETURNED UNSERVED 8 NEEL VENTURES PVT. LTD. ROOM NO.2/8 KAMBLE NIWAS, FARID NAGAR, PRATAP ROAD, BHANDUP (W) MUMBAI - 400078 50,00,000 2 ND NOTICE SERVED BUT NO REPLY RECEIVED 9 PROFICIENT MERCANDISE PVT. LTD. ROOM NO.311, 3 RD FLOOR, 545, KALBADEVI ROAD, MUMBAI 400002 15,00,000 1 ST & 2 ND NOTICE RETURNED UNSERVED 10 VSR STEEL FABRICATORS PVT. LTD. ROOM NO.2, HANUMAN ROAD, IIT MARKET, POWAI, MUMBAI- 400076 1,08,00,0 00 1 ST & 2 ND NOTICE RETURNED UNSERVED 11 SAGAR TEX CREATION PVT. LTD. A 303, BHATTAD TOWER, 3 RD FLOOR, OPP KORA KENDRA GROUND, BORIVALI(W), MUMBAI-400092 1,00,000 REPLY RECEIVED 12 FLASH VENTURES PVT. LTD. ROOM NO.2/8 KAMBLE NIWAS, FARID NAGAR, PRATAP ROAD, BHANDUP (W) MUMBAI - 400078 1,00,000 2 ND NOTICE SERVED BUT NO REPLY RECEIVED 13 NIHAL MERCANTILE PVT. LTD. 3-25, ZAHEERS MANSION, 260/268, YUSUF MEHARALI 50,000 1 ST & 2 ND NOTICE RETURNED UNSERVED ITA NO.4897/MUM/13 A.Y.2009-10 6 ROAD, MASJID(E), MUMBAI -400003 14 SAFFORD MERCANTILE PVT. LTD. 3-25, ZAHEERS MANSION, 260/268, YUSUF MEHARALI ROAD, MASJID(E), MUMBAI -400003 50,00,000 1 ST & 2 ND NOTICE RETURNED UNSERVED 15 NOZAKI FINANCE & INVESTMENTS P. LTD. C 7, INDUSTRIAL ASSURANCE BLDG., VEER NARIMAN ROAD, CHURCHGATE, MUMBAI 1,00,000 1 ST & 2 ND NOTICE RETURNED UNSERVED 16 IFSL LTD. BLOCK NO.53, JANKI NAGAR NX, NR RAMESH N RAMESH CLUB, INDORE 452001 50,00,000 133(6) RETURNED UNSERVED 17 PROG DYE CHEM PVT. LTD. 101, GOPAL SADAN, GROUND FLOOR, BEHIND HIRA COMPLEX, CHANDANBAG KAMATGHAR, BHIWANI-421302 35,00,000 1 ST & 2 ND NOTICE RETURNED UNSERVED TOTAL 9,58,00,0 00 6. TO VERIFY THE CLAIM OF THE ASSESSEE, THE ASSESSI NG OFFICER ISSUED THE NOTICE TO THE PARTIES U/S.131 OF THE ACT AND AL SO ISSUED THE NOTICE TO THE IFSL LTD. U/S.133(6) OF THE ACT REQUIRING THE F OLLOWING DETAILS:- 1. BANK STATEMENT FOR A.Y.2008-09(FOR THE PERIOD 1. 4.2008 TO 31.3.2009. 2. SHARE APPLICATION COPY 3. LETTER OF SHARE ALLOTMENT 4. COPIES OF SHARE CERTIFICATES 5. COPY OF RETURN OF INCOME FOR A.Y.2009-10 ALONGWI TH ALL ITS ANNEXURES 6. PROFIT AND LOSS ACCOUNT, BALANCE SHEET AND AUDIT REPORT FOR A.Y.2009-10 ALONG WITH ALL ITS ANNEXURES. 6.1 THE NOTICES U/S.131 OF THE ACT WERE RECEIVED BA CK ON ACCOUNT OF THE SEVEN PARTIES WHOSE NAMES ARE HEREBY MENTIONED BELOW: ITA NO.4897/MUM/13 A.Y.2009-10 7 1. KAPINDRA MULTITRADE PVT. LTD. 2. ANGEL VENTURES PVT. LTD. 3. VRS STEEL FABRICATION PVT. LTD. 4. NIHAL MERCANTILE PVT. LTD. 5. SAFFORD MERCANTILE PVT. LTD. 6. KUKAON ENGINEERING CO. PVT. LTD. 7. NOZAKI FINANCE & INVESTMENT PVT. LTD. 6.2 THEREAFTER THE ASSESSING OFFICER SENT THE NOTIC E TO THE ASSESSEE REQUIRING THE DETAILS. ASSESSEE FILED THE DETAILS IN TAPAL IN CONNECTION WITH THE ABOVE SAID SEVEN PARTIES. THEREAFTER, THE BANK STATEMENT OF THE ABOVE SAID PARTIES WERE ALSO REQUISITIONED BY I SSUANCE OF FRESH LETTERS BUT COMPLETE BANK STATEMENT WERE NOT FURNIS HED. HOWEVER, SAGAR TEX. CREATION PVT. LTD. FURNISHED THE DETAILS FULLY. THEREAFTER, OBSERVING THESE FACTS THAT THE PARTIES FURNISHED PA RTIAL BANK STATEMENT AND THEIR IDENTITY, GENUINENESS AND CREDITWORTHINES S REMAIN UNPROVED THEREFORE, THE SHARE APPLICATION MONEY TO THE TUNE OF RS.8,58,000/- RELATING TO THE 16 PARTIES WERE TREATED AS UNEXPLAI NED CASH CREDIT U/S.68 OF THE ACT AND ADDED TO THE INCOME OF THE AS SESSEE. THE SAID ORDER PASSED BY THE ASSESSING OFFICER, WAS ALSO CO NFIRMED IN APPEAL FILED BEFORE THE CIT(A). ON PERUSAL OF THE ORDER PA SSED BY THE ASSESSING OFFICER IT CAME INTO THE NOTICE THAT THE DOCUMENTS WHICH HAVE BEEN FURNISHED BY THE PARTIES WERE NOT DISCUS SED. THERE IS NOT DISPUTE WITH REGARD TO THE LAW RELIED BY THE LEARNE D REPRESENTATIVE OF ITA NO.4897/MUM/13 A.Y.2009-10 8 THE ASSESSEE IS CONCERNED, BUT WE ARE OF THE VIEW T HAT THE LEARNED REPRESENTATIVE OF THE ASSESSEE ADDUCED THE ADDITION AL EVIDENCE WITH REGARD TO THE 16 PARTIES LIES FROM PAGE 59 TO 1739 OF THE PAPER BOOK. ON APPRAISAL OF THIS PAPER BOOK, WE FIND THAT THE N ECESSARY DETAILS WITH REGARD TO THE EACH PARTY HAVE BEEN MENTIONED, HOWEVER, THE SAME IS NO DOUBT REQUIRED TO BE LOOKED INTO TO VERIFY TH E CLAIM OF THE ASSESSEE. SINCE THESE DOCUMENTS ARE NECESSARY TO C ONSIDER THE CLAIM OF THE ASSESSEE IN THE INTEREST OF JUSTICE, THEREFO RE, WE ARE OF THE VIEW THAT IN THE SAID CIRCUMSTANCES THE ORDER PASSED BY THE CIT(A) IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW, THEREF ORE, WE SET ASIDE THE ORDER PASSED BY THE CIT(A) IN QUESTION AND DIRECT T HE ASSESSING OFFICER TO CONSIDER THE ADDITIONAL EVIDENCE AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCOR DANCE WITH LAW AND PASS THE FRESH ORDER ON THIS ISSUE. 7. ACCORDINGLY THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE , 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 15 TH JUNE, 2016 MP MP MP MP ITA NO.4897/MUM/13 A.Y.2009-10 9 * +%'#, -,(' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// ./$ ! /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI