Shri Harshad Babulal Makwana, Baroda V. The Dy.CIT.,Circle-1, Baroda

ITA 49/AHD/2009

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76823 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 27-05-2014
• Assessment Year: 1996-1997
• Appeal Filed On: 05-01-2009
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained investment
• Section: 131

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , !' # $% !' # $% !' # $% !' # $%, , , , & & & & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO. 49/AHD/2009 ASSESSMENT YEAR 1996-97 HARSHAD BABULAL MAKWANA 60, SANGAM SOCIETY HARNI ROAD, BARODA. PAN: ADWPM9451E VS DCIT, CIRCLE-1, BARODA. '(/ APPELLANT *+'( / RESPONDENT REVENUE BY : SHRI K.C. MATHEWS, SR. DR ASSESSEE(S) BY : SHRI M.K. PATEL, AR #!, - %/ // / DATE OF HEARING : 2 22 2 7/05/2014 /01 - % / DATE OF PRONOUNCEMENT : 30/05/2014 2 2 2 2/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, BAR ODA DATED 07.10.2008 BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT (APPEALS) ERRED IN DISALLOWING T HAT THE CREDIT ENTRY OF RS. 25,00,000/- WHICH WAS NOTHING BUT TRAN SFER FROM THE ACCOUNT OF THE COMPANY NAMELY NATURAL BIOCON IN DIA LIMITED WAS CASH DEPOSIT AND FURTHER ERRED IN HOLDI NG THAT THE APPELLANT HAS NOT BEEN ABLE TO PROVE THE CASH DEPOS IT IN HIS BANK ACCOUNT FROM WHICH THE INVESTMENT IN SHARES OF NATURAL BIOCON INDIA LIMITED WAS MADE. 2. THE LEARNED CIT (APPEALS) ERRED IN DISREGARDING THE STATEMENT RECORDED U/S 131 THAT THE APPELLANT NAMELY HARSHAD BABULAL MAKWANA. ITA NO. 49/AHD/2009 HARSHAD BABULAL MAKWANA FOR A.Y. 1996-97 - 2 - 3. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING TH E ADDITION OF RS. 25,00,000/- AS UNEXPLAINED INVESTMENT. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE PAID SHARE APPLICATION MONEY OF RS 25,00,0 00/- IN CASH ON 05.02.1996 TO M/S. NATURAL BIOCON (INDIA) LTD. FOR PURCHASE OF 5,00,000 SHARES AT THE RATE OF RS 5/- PER SHARE. THE ASSESS EE EXPLAINED THE SOURCE OF ABOVE INVESTMENT AS ADVANCE FROM M/S. NATURAL BIOCO N (INDIA) LTD.. THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE CONTENTI ON OF THE ASSESSEE AND MADE ADDITION OF RS 25,00,000/- IN THE HANDS OF THE ASSESSEE. 3. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 4. BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FILED A COPY OF THE BANK STATEMENT OF THE ASSESSEE OF THE B ANK ACCOUNT NO. 1267 MAINTAINED WITH PUNJAB NATIONAL BANK UNDER THE NAME AND STYLE OF DISHA INVESTMENT AND CERTIFICATE FROM THE BANK DATED 22.0 1.2005 WHICH SHOWS THAT THE ASSESSEE RECEIVED CHEQUE OF RS 25,00,000/- FROM M/S. NATURAL BIOCON (INDIA) LTD. ON 05.02.1996 AND ON THE VERY S AME DATE, CASH OF RS 25,00,000/- WAS WITHDRAWN. NO MATERIAL HAS BEEN BR OUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE ABOVE WITHDRAWN AMOUNT OF RS 25,00,000/- WAS ACTUALLY USED BY THE ASSESSEE IN ANY OTHER MANNER. 5. IT IS OBSERVED THAT M/S. NATURAL BIOCON (INDIA) LTD. WAS ALSO MAINTAINING AN ACCOUNT BEING ACCOUNT NO. 1240 WITH THE VERY SAME BANK OF THE SAME BRANCH. 6. FURTHER, THE AUTHORIZED REPRESENTATIVE FILED BE FORE US A COPY OF THE ORDER OF THE TRIBUNAL DATED 01.02.2008 PASSED I N ITA NO. 2638/A/2003 ITA NO. 49/AHD/2009 HARSHAD BABULAL MAKWANA FOR A.Y. 1996-97 - 3 - FOR ASSESSMENT YEAR 1996-97 IN THE CASE OF M/S. NAT URAL BIOCON (INDIA) LTD. WHEREIN THE TRIBUNAL HAS RECORDED AS UNDER: WE FIND THAT THE SOURCE OF SHARE APPLICATION MONEY MADE BY SHRI MAKWANA WAS EXPLAINED AS ADVANCE RECEIVED BY HIM FR OM THE ASSESSEE COMPANY. THE SAID SOURCE IS NOT IN DISPUT E AS THE A.O. HIMSELF ADMITTED THAT SUCH ADVANCE WAS GIVEN BY THE ASSESSEE COMPANY TO SRI MAKWANA THROUGH BANKING CHANNEL. IN THE ABOVE FACTS AND CIRCUMSTANCES, AS THERE IS NO DISPUTE ABOUT THE CAPACITY OF THE ASSESSEE COMPANY IN ADVANCING RS 25 LACS TO SHRI MA KWANA AND AS NO ADDITION HAS BEEN MADE BY THE A.O. ON THAT ACCOUNT IN OUR CONSIDERED OPINION THE ADDITION IN THE HANDS OF THE COMPANY ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM MAKWANA CANNOT BE M ADE. 7. THUS, IT WAS ARGUED THAT THE SOURCE OF THE ASSE SSEE TO ADVANCE SHARE APPLICATION MONEY TO THE SAID COMPANY WAS ACC EPTED BY THE TRIBUNAL AS OUT OF ADVANCE RECEIVED BY THE ASSESSEE FROM THE SAME COMPANY. IN VIEW OF THE ABOVE FINDING OF THE TRIBUNAL, IT CANNO T BE HELD THAT THE ASSESSEES SOURCE OF INVESTING IN SHARE APPLICATION MONEY OF THE SAID COMPANY WAS UNEXPLAINED. 8. IN OUR CONSIDERED VIEW, IN VIEW OF THE ABOVE FI NDING OF THE TRIBUNAL, WE FIND MERIT IN THE SUBMISSION OF THE AS SESSEE. WE, THEREFORE, DELETE THE ADDITION OF RS 25,00,000/- AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 30 TH OF MAY, 2014 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 30/05/2014 GHANSHYAM MAURYA, SR. P.S.