ITO, New Delhi V. M/s. IT & T Entertainment Services Pvt. Ltd., New Delhi

ITA 5399/DEL/2011

• Counselvise Citation: 539920114 RSA 2011
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 02-02-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 02-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: R B MATHUR
• Keywords: Bogus Share capital
• Section: 68

Judgement Text

ITA NO.5399/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.5399/DEL/2011 ASSTT. YEAR: 2006-07 INCOME TAX OFFICER, VS IT & IT ENTERT AINMENT SERVICES PVT.LTD., WARD 11(4), 325, S OUTH EXTN., PLAZA-II, ROOM NO. 324, 209, MASJID MOTH, NDSE-II, C.R. BUILDING, NEW DELHI. NEW DELHI. (PAN NO. AAACI8162N) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SALIL MISHRA, SR. DR RESPONDENT BY: SHRI R.B. MATHUR O R D E R PER G.D. AGRAWAL, VICE PRESIDENT IN THIS APPEAL BY THE REVENUE, THE FOLLOWING GROUN D HAS BEEN RAISED:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A)-XIII, NEW DELHI ERRED IN DELETING THE AD DITION OF RS.9,62,500/- MADE U/S 68 AS UNEXPLAINED CASH CREDI T ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM TH E VARIOUS PARTIES. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED THE RETURN DECLARING NIL INCOME. THE AO COMPLETED THE ASSESSMENT BY MAKING THE ADDITION OF RS.9,62,500/-FOR UNEXPLAINED SHARE CAPITAL U/S 68 OF THE I.T. ACT. AT PAGE 4 AND 5 OF THE ITA NO.5399/DEL/2011 2 CIT(A)S ORDER, THE DETAILS OF SHARE APPLICATION MO NEY ARE GIVEN WHICH WE REPRODUCE HEREIN BELOW FOR READY REFERENCE:- DETAILS OF SHARE APPLICATION MONEY: - A.Y. 2006-07 S. NO. NAME & ADDRESS OF SHAREHOLDER AMOUNT DOCUMENT 1. G.P. SINGH D BLOCK, GALI NO.18, MUKANDPUR EXTN.1, DELHI-42 15000 CONFIRMATION 2. JOGINDER SINGH 14/1095, D BLOCK, MUKAN PUR EXTN.-1, DELHI42 45000 PAN, CONFIRMATION & SALARY CERTIFICATE 3. SANDEEP KUMAR WZ-96B. SANT NAGAR, TILAK NAGAR, NEW DELHI-18 45000 CONFIRMATION, PAN, SALARY CERTIFICATE 4. BUNTY LUTHRA C-1001-JJ COLONY, HASTAL ROAD, UTTAM NAGAR, NEW DELHI-59 30000 PAN, CONFIRMATION & SALARY CERTIFICATE 5. TRIVEDI PRASAD SHARMA F-125, ADHYAPAK NAGAR, NANGLOI, DELHI-41 45000 PAN CONFIRMATION & ITR 6. TEJINDER SINGH WZ-120, SF, RAM NAGAR, TILAK NAGAR,NEW DELHI 37000 PAN CONFIRMATION & SALARY 7. DEEPAK KUMAR R/O HNO, RZH-102A,KH NO.72/20821, GALI NO.6, NEHAL VIHAR, NANGLOI, NEW DELHI-41 49500 CONFIRMAITON, PAN, ITR 8. RAMESH LAL 145, WARD NO. 8, MAIN MARKET, NEAR MADAM TENT HOUSE, KALANY DISTT. ROHTAK 36000 CONFIRMATION, ITR 9. SUNIL SINGH 1/11647, GALI NO.1, SAT NAGAR, KAROL BAGH, NEW DELHI-5 45000 CONFIRMATION VOTER CARD, ITR 10. VINOD KUMAR NW-111, VISHNU GARDEN, NEW DELHI-18 45000 CONFIRMATION, ITR 11. MANMEET KAUR B-4/93, PASCHIM VIHAR, NEW DELHI-63 18500 CONFIRMATION, ITR 12. GEETA R/O V-509, GALI NO.6, VIJAY PARK, MOJPUR, DELHI-53 19000 CONFIRMATION, ITR ITA NO.5399/DEL/2011 3 13. SARABJEET SINGH BEDI R/O B-4/93, PASCHIM VIHAR, NEW DELHI-63 17000 CONFIRMATION, PAN, ITR 14. VINOD KUMAR R/O V-509, GALI NO. 6, VIJAY PARK, MOJPUR, DELHI-53 19500 CONFIRMATION, DECLARATION 15. GULSHAN KUMAR 3427, URBAN ESTATE, PH-II, LUDHIANA(PUNJAB) 16000 CONFIRMATION 16. RAJ KARAN JHAKAR D-32, DDA FLAT, EKTA ENCLAVE, NEW DELHI-41 18000 CONFIRMATION 17. SUNIL KUMAR R/O F-125, ADHYAPAK NAGAR, NANGLOI, NEW DELHI-41 17500 CONFIRMATION, PAN, SALARY CERTIFICATE 18. DEEPAK KUMAR E-1/14A, SHIV VIHAR, KARALA, DELHI-81 18000 CONFIRMATION, PAN, SALARY CERTIFICATE 19. DARSHAN KUMAR SHARMA R/O H.NO.564, WARD NO. 2, BARA PANNA, KALANAUR, ROHTAK 19000 CONFIRMATION, DECLARATION 20. ASHISH CHUGH R/O H.NO.724, WARD NO.10, CHAMELI MARKET, KALANAUR, ROHTAK 18500 CONFIRMATION 21. PRANJAL GUPTA A-24, MAHINDRA PARK, PANKHA ROAD,NEW DELHI-59 19000 CONFIRMATION, DECLARATION 22. SURINDER SINGH GAHLAWAT (HUF) R/O D-16, BHAGWAN DAS NAGAR, EAST PUNJABI BAGH, NEW DELHI-26 18500 CONFIRMATION, IOTR 23. MAHINDER PAL H.NO.104, WARD NO.9, KALANAUR, DISTT.ROHTAK 18000 CONFIRMATION, VOTER CARD 24. OM DUTT SHARMA WARD NO.6, NANGLA ROAD, NIT, FARIDABAD 17500 CONFIRMATION, PAN, EXPERIENCE CERTIFICATE 25. SATYAWATI R/O H.NO.104, WARD NO.9, KALANAUR, DISTT. ROHTAK 16500 CONFIRMATION, DECLARATION 26. VINOD KUMAR R/O 1 B-370, DELHI ADMINISTRATION FLATS, TIMAR PUR, DELHI-110054 15000 CONFIRMATION, PAN, EXPERIENCE CERTIFICATE 27. SHIKHA BATRA A-138, PANSCHSHEEL ENCLAVE, NEW DELHI 19500 CONFIRMATION 28. KRISHNA DHIR 506, MOUNT PLACE, YOGI HILL, MULAND, MUMBAI 19000 CONFIRMATION ITA NO.5399/DEL/2011 4 29. T.C. DHIR 506, MOUNT PALACE, YOGI HILL, MULAND, MUMBAI 19000 CONFIRMATION 30. RENUKA DHIR 506, MOUNT PALACE, YOGI HILL, MULAND, MUMBAI 18500 CONFIRMATION 31. UMA KANT SHARMA W-104, SHRI RAM MANDIR, BABARPUR, SAHADARA, DELHI-32 19000 CONFIRMATION, VOTER CARD, ITR 32. PRIYANKA SHARMA W-104, SHRI RAM MANDIR, BABARPUR, SAHADARA, DELHI-32 19500 CONFIRMATION 33. RENU SEN 14/1095, D BLOCK, MUKAND PUR EXT.-1, NEW DELHI-42 18000 CONFIRMATION 34. GYANU PRASAD SHARMA 3/12, SHAM NATH MARG, CIVIL LINES, DELHI-54 19000 CONFIRMATION, SALARY SLIP 35. VISHNU KUMARI 3/12, SHAM NATH MARG, CIVIL LINES, DELHI-54 19000 CONFIRMATION 36. PAWAN CHAWLA 11/3A, MOTI NAGAR, NEW DELHI-110015 15000 CONFIRMATION, PAN, ITR 37. NEENA UPPAL 506, MOUNT PALACE, YOGI HILL, MULAND, MUMBAI 17000 CONFIRMATION 38. RAVI UPPAL 506, MOUNT PALACE, YOGI HILL, MULAND, MUMBAI 16000 CONFIRMATION 39. CHAMAN LAL 506, MOUNT PALACE, YOGI HILL, MULAND, MUMBAI 17000 CONFIRMATION 40. JAI PRAKASH SHARMA 14/1095, D BLOCK, MUKAND PUR EXTN.1, DELHI- 42 15000 CONFIRMATION, PAN, SALARY SLIP 41. KUNDAN SINGH BHANDARI M-54, MANGOL PURI, NEW DELHI-83 16000 CONFIRMATION, VOTER CARD, SALARY SLIP 42. BABLU SEN D-BLOCK, GALI NO.18, KUKAND PUR EXTN.1, DELHI-42 18000 CONFIRMATION, VOTER CARD AMOUNT OF SHARE APPLICATION MONEY : RS . 9,62,500 ITA NO.5399/DEL/2011 5 3. THE CIT(A) ALLOWED THE ASSSESSEES APPEAL WITH THE FOLLOWING FINDING:- FURTHERMORE, THE RATIO OF THE JUDGMENTS, RELIED U PON BY THE LD. COUNSEL AND AS REFERRED TO IN PARA 3.3 SUPR A, ARE SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CAS E. AGAINST EACH SHARE APPLICATION, THE APPELLANT HAS PROVIDED A CONFIRMATION OF THE SHARE APPLICANT. AT LEAST IN T HE CASE OF 22 SHARE APPLICANTS ALONG WITH THEIR PAN PARTICULAR S EVEN CONFIRMATIONS HAVE BEEN FILED. AGAINST THE REMAINI NG 20, SHARE APPLICANTS ADDRESSES ALONG WITH CONFIRMATIONS HAVE BEEN FILED BEFORE THE AO. THE AO WAS THEREFORE REQ UIRED TO BRING ON RECORD MATERIAL OR INFORMATION WHICH COULD ESTABLISH THAT THE SHARE APPLICATION MONEY WAS ACTU ALLY THE APPELLANTS OWN MONEY. NO ENQUIRIES/INVESTIGATIONS HAVE BEEN CARRIED OUT BY THE AO TO SHOW THAT THE SHARE APPLICATION MONEY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO BE ABLE TO BE TREATED AS UNDISCLOSED INCOM E OF THE COMPANY. IN THE ABSENCE OF THE SAME, IN VIEW OF 30 7 ITR 334 (DEL) AND 216 CTR 195 (SC), IT IS HELD THAT THE ADDITIONS OF RS.962500 MADE U/S 68 TREATING THE SHA RE APPLICATION MONEY AS UNPROVED/UNEXPLAINED IS NOT JU STIFIED. THE ADDITION OF RS.962500 U/S 68 IS ACCORDINGLY DEL ETED. THE GROUND RAISED BY THE APPELLANT THUS SUCCEEDS. 4. THE REVENUE, AGGRIEVED WITH THE ORDER OF THE CIT (A), IS IN APPEAL BEFORE US. WE HAVE HEARD BOTH THE PARTIES AND PERU SED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE SHARE APPLICATION MONE Y RECEIVED FROM EACH APPLICANT IS OF SMALL AMOUNT, RANGING FROM RS.15,00 0 TO RS.49,500. THE ASSESSEE HAS FURNISHED THE CONFIRMATION OF ALL THE SHARE APPLICANTS ALONG WITH THEIR COMPLETE ADDRESSES. MOST OF THESE SHARE APPL ICANTS HAVE PERMANENT ACCOUNT NUMBERS OF WHICH PARTICULARS HAVE ALSO BEEN FURNISHED. THE ITA NO.5399/DEL/2011 6 CIT(A) HAS STATED THAT ON THESE FACTS, THE DECISION S OF JURISDICTIONAL HIGH COURT IN THE CASE OF VALUE CAPITAL SERVICES, 307 IT R 334 AND OF HONBLE APEX COURT IN THE CASE OF LOVELY EXPORT, 216 CTR 19 5, ARE SQUARELY APPLICABLE. AFTER CONSIDERING THE FACTS OF THE CAS E AND THE ARGUMENTS OF BOTH THE SIDES, WE DO NOT FIND ANY JUSTIFICATION TO INTE RFERE WITH THE ORDER OF THE CIT(A). HE HAS APPLIED AND FOLLOWED THE DECISION O F HONBLE JURISDICTIONAL HIGH COURT AND OF HONBLE APEX COURT. IT HAS NOT B EEN PROVED BY THE REVENUE THAT THOSE DECISIONS WERE NOT APPLICABLE OR WRONGLY APPLIED BY THE CIT(A). IN VIEW OF ABOVE, WE DO NOT FIND ANY JUSTI FICATION TO INTERFERE WITH THE ORDER OF THE CIT(A). THE SAME IS SUSTAINED AND REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT DURING THE COUR SE OF HEARING ON 2.2.2012. SD/- SD/- ( A.D. JAIN ) ( G.D. AGRAWAL ) JUDICIAL MEMBER VICE PRESIDENT DT. 2 ND FEBRUARY 2012 GS ITA NO.5399/DEL/2011 7 COPY FORWARDED TO:- 1. ITO, WARD 11(4), NEW DELHI. 2. IT & T ENTERTAINMENT SERVICES PVT. LTD., NEW DELHI. 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR