CRESCENT PAYMENTS P.LTD, MUMBAI V. DCIT CIR 6(1)(1), MUMBAI

ITA 559/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4895 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 25-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIRAMA KARTHIKEYAN
• Keywords: Gift; Corroborative evidences; Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER IT A NO. 559/MUM./2017 ( ASSESSMENT YEAR : 20 12 13 ) CRESCENT PAYMENTS PVT. LTD. 306, 3 RD FLOOR, SIGMA I.T. PARK RABALE, NAVI MUMBAI 400 701 PAN AAICA5293L . APP ELL ANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 6 ( 1 ) 1 , MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI ABHI RAMA KARTHIKEYAN DATE OF HEARING 0 9 .0 5 .2019 DATE OF ORDER 17.05.2019 O R D E R PER SAKTIJIT DEY. J.M. THE AFORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING T HE ORDER DATED 3 RD NOVEMBER 201 6 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 1 2 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2012 13. 2 . THE ISSUE IN DISPUTE IN THE PRESENT APPEAL IS IN RELATION TO THE ADDITION MADE ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM THE PARENT COMPANY. 2 CRESCENT PAYMENTS PVT. LTD. 3 . BRIEF FACTS ARE, IN THE COURSE OF ASSESSMENT PROCEEDINGS FO R THE IMPUGNED ASSESSMENT YEAR, THE ASSESSING OFFICER NOTICED THAT IN THE BALANCE SHEET THE ASSESSEE HAD SHOWN AN AMOUNT OF ` 3,46,33,388 UNDER THE HEAD RESERVE AND SURPLUS. IT WAS EXPLAINED, THE AFORESAID REMITTANCE RECEIVED FROM ALERT PAY, CANADA, WAS WITHOUT ANY INSTRUCTIONS, HENCE, WAS TREATED AS GIFT RECEIVED. AFTER CALLING FOR NECESSARY DETAILS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE AMOUNT RECEIVED SHOULD NOT BE TREATED AS INCOME OF THE ASSESSEE. IN RESPONSE, IT WAS SUBM ITTED BY THE ASSESSEE THAT SINCE THE AMOUNT RECEIVED IS TOWARDS GIFT AND IT DOES NOT FALL UNDER ANY OF THE HEADS OF INCOME UNDER SECTION 14 OF THE ACT, IT CANNOT BE TREATED AS INCOME OF THE ASSESSEE HOWEVER, THE ASSESSING OFFICER REJECTED THE EXPLANATION O F THE ASSESSEE. HE OBSERVED , TO CIRCUMVENT THE REGULATION OF FEMA ACT, THE ASSESSEE HAS TREATED THE AMOUNT RECEIVED AS GIFT. ACCORDINGLY, HE HELD THAT THE SAID AMOUNT OF ` 3,46,33,388, IS TAXABLE AT THE HANDS OF THE ASSESSEE. FURTHER, HE ALSO ADDED BACK TH E AMOUNT OF ` 1,62,690, PAID TOWARDS ROC CHARGES. 4 . THOUGH , THE ASSESSEE CHALLENGED THE ADDITION S BEFORE LEARNED COMMISSIONER (APPEALS), HOWEVER, HE ALSO SUSTAINED THE ADDITION S MADE BY THE ASSESSING OFFICER. 3 CRESCENT PAYMENTS PVT. LTD. 5 . WHEN THE APPEAL WAS CALLED FOR HEARING NO ONE WAS PRESENT FOR THE ASSESSEE IN SPITE OF BEING AWARE OF THE DATE OF HEARING. IN VIEW OF THE AFO RESAID, WE PROCEED TO DISPOSE O F THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL AVAILABL E ON RECORD. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN FROM THE MATERIAL ON RECORD, NEITHER BEFORE THE ASSESSING OFFICER NOR BEFORE LEARNED COMMISSIONER (APPEALS) TH E ASSESSEE COULD DEMONSTRATE THE TRUE NATURE AND CHARACTER OF REMITTANCE RECEIVED FROM ITS PARENT COMPANY IN CANADA. THEREFORE, IN THE ABSENCE OF SUPPORTING EVIDENCES TO SUBSTANTIATE THE CLAIM THAT THE AMOUNT RECEIVED BEING CAPITAL IN NATURE IS NOT TAXABLE , THE ADDITION WAS MADE BY THE ASSESSING OFFICER AND SUSTAINED BY LEARNED COMMISSIONER (APPEALS). BEFORE US ALSO, THERE IS NO CHANGE IN THE AFORESAID FACTUAL POSITION AS THE ASSESSEE HAS FAILED TO LEAD ANY EVIDENCE TO DEMONSTRATE THAT THE AMOUNT RECEIVED F ROM THE PARENT COMPANY IS A CAPITAL RECEIPT, HENCE, NOT TAXABLE. IN VIEW OF THE AFORESAID, WE DO NOT INTEND TO INTERFERE WITH THE DECISION OF LEARNED COMMISSIONER (APPEALS). GROUND IS DISMISSED. 4 CRESCENT PAYMENTS PVT. LTD. 7 . IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 17.05.2019 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 17.05.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (ASSTT. REGISTRAR) ITAT, MUMBAI