ASR WINES (P) LTD., BULANDSAHR V. ITO, WARD- 3(1), BULANDSAHR

ITA 5440/DEL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2411 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 25-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Reasonable cause
• Section: 133(6); 131; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER ITA NO. 5440 /DEL/201 7 [ASSESSMENT YEAR: 2 0 12 - 13 ] ASR WINES [P] LTD VS. THE I.T. O 44, SATHA, WARD 3 ( 1 ) BULANDSHAHR . BULANDSHAHR PAN: A AHFB 9267 D [APPELLANT] [RESPONDENT] DATE OF HEARING : 0 6 . 11 .201 8 DATE OF PRONOUNCEMENT : 1 3 . 1 1 .2018 ASSESSEE BY : SHRI SOMIL AGGARWAL, ADV REVENUE BY : MS. AASHNA PAUL , SR. DR ORDER PER N .K. BILLAIYA, ACCOUNTANT MEMBER: T HIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] GHAZIABAD DATED 0 2 . 0 3 .201 7 PERTAINING TO ASSESSMENT YEAR 20 12 - 13 . 2 2. THE APPEAL IS BARRED BY LIMITATION BY 66 DAYS. I HAVE GONE THROUGH THE PRAYER FOR CONDONATION OF DELAY. I AM CONVINCED THAT THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME. THE APPEAL IS CONDONED. 3. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 8,50,000/ - ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM SHRI ACHCHAN KHAN BY TREATING IT AS ALLEGED INCOME FROM UNDISCLOSED SOURCES U/S 68 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' ] . 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN SHARE APPLICATION MONEY OF RS. 8.50 LAKHS. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF SHARE APPLICATION MONEY RECEIVED FROM 34 PERSONS, ALONGWITH THEIR CONFIRMATION S AND COPY OF THEIR BANK ACCOUNT S . AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE ASSESSING OFFICER FOUND THAT SHRI ACHCHAN 3 KHAN, WHO IS A SHARE HOLDER, INVESTED SHARE APPLICATION MONEY OF RS. 4.35 LAKHS DURING THE F.Y. 2009 - 10. HE HAS ALSO DEPOSITED SHARE APPLICATION MONEY OF RS. 8.50 LAKHS IN F.Y. 2011 - 12. ACCORDINGLY, NOTICE U/S 133(6) OF THE ACT WAS ISSUED TO SHRI ACHCHAN KHAN, WHO CONFIRMED THE TRANSACTION OF SHARE APPLICATION MONEY OF RS. 8.50 LAKHS. THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATION GIVEN BY SHRI ACHCHAN KHAN AND INSISTED F OR THE PRESENCE OF SHRI ACHCHAN KHAN FROM WHOM SHARE APPLICATION MONEY WAS RECEIVED. 5. THE ASSESSEE FILED A DETAILED REPLY EXPLAINING THAT SHRI ACHCHAN KHAN IS A MEMBER IN AOP M/S AHMED TRADER BSR FROM WHERE HE HAS WITHDRAWN THE AMOUNT OUT OF HIS CAPITAL AND INVESTED THE SAME AS SHARE APPLICATION MONEY WITH THE ASSESSEE COMPANY. THE ASSESSEE SHOWED HIS INABILITY TO PRODUCE SHRI ACHCHAN KHAN. 6. THE ASSESSING OFFICER WAS OF THE FIRM BELIEF THAT SHRI ACHCHAN KHAN HAS NO JOB WORK AND HE IS HAND TO MOUTH AND, THEREFORE, IS NOT A MAN OF MEANS TO DEPOSIT RS. 8.50 LAKHS AS 4 SHARE APPLICATION MONEY WITH THE APPELLANT COMPANY. ACCORDINGLY, RS. 8.50 LAKHS WAS ADDED U/S 68 OF THE ACT. 7. THE ASSESSEE AGITATED THE MATTER BEFORE THE FIRST APPELLATE AUTHORITY BUT WITHOUT ANY SUCCESS. 8. BEFORE ME, THE LD. AR REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. 9. THE LD. DR SUPPORTED THE FINDINGS OF THE ASSESSING OFFICER. 10. I HAVE CAREFULLY CONSIDERED THE ORDERS OF THE LOWER AUTHORITIES. THE UNDISPU TED FACT IS THAT SHRI ACHCHAN KHAN IS AN EXISTING SHARE HOLDER OF THE APPELLANT COMPANY. THEREFORE, HIS IDENTITY CANNOT BE DISPUTED. MOREOVER, THE NOTICE ISSUED U/S 133(6) OF THE ACT WAS DULY SERVED UPON SHRI ACHCHAN KHAN, WHO NOT ONLY CONFIRMED THE TRAN SACTION, BUT ALSO FURNISHED NECESSARY DETAILS. THE ASSESSING OFFICER HAS 5 MADE ADDITION ONLY BECAUSE SHRI ACHCHAN KHAN COULD NOT BE PRODUCED AND HE WAS A MAN OF NO MEANS. I FAIL TO UNDERSTAND WHAT PREVENTED THE ASSESSING OFFICER TO ISSUE SUMMONS U/S 131 O F THE ACT ON SHRI ACHCHAN KHAN. SECONDLY, WHEN THE ASSESSING OFFICER WAS FULLY AWARE THAT SHRI ACHCHAN KHAN HAS MADE INVESTMENT OF RS. 8.50 LAKHS AS SHARE APPLICATION MONEY WITH THE APPELLANT COMPANY, NOTHING COULD HAVE PREVENTED THE ASSESSING OFFICER TO ASK THE SOURCE OF INVESTMENT FROM SHRI ACHCHAN KHAN. IN MY CONSIDERED OPINION, IF THE SOURCE WAS NOT PROPERLY EXPLAINED, ADDITION COULD HAVE BEEN MADE IN THE HANDS OF SHRI ACHCHAN KHAN AS UNEXPLAINED INCOME. BY NO STRETCH OF IMAGINATION ADDITION CAN BE MA DE U/S 68 OF THE ACT IN THE HANDS OF THE APPELLANT COMPANY SINCE IT HAS DISCHARGED THE INITIAL ONUS CAST UPON IT BY VIRTUE OF PROVISIONS OF SECTION 68 OF THE ACT. ADDITION IS UNCALLED FOR AND DIRECTED TO BE DELETED. 6 11 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 5440 /DEL/201 2 IS ALLOWED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 3 . 1 1 .2018. SD/ - [N.K. BILLAIYA] ACCOUNTANT MEMBER DATED: 1 3 T H NOVEMBER , 2018 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI 7 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER