ACIT, Muzaffarnagar V. M/s Sikka Papers Mills Ltd., Muzaffarnagar

ITA 5617/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58611 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 24-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 10-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS SRUJANI MOHANTY
• Section: 133(6)

Judgement Text

ITA NO. 5617/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 5617/DEL/2010 A.Y. : 2007-08 ACIT, CIRCLE - I, MUZAFFARNAGAR VS. M/S SIKKA PAPERS MILLS LTD., SUBHASH CHOWK, SHAMLI, MUZAFFARNAGAR (PAN/GIR NO. : AAECS 3641L) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. ANIL JAIN, ADVOCATE DEPARTMENT BY : MRS. SRUJANI MOHANTY, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 16.9.2 010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED IN THE APPEAL READ AS UNDER: - I) ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE TH E LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW BY DELETING THE ADDITION OF ` 70,00,000/- MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF SHARE APPLICAT ION MONEY WITHOUT APPRECIATING FULL FACT OF THE CASE. FURTHER IN THIS CASE WHEN IDENTITY OF THE SHARE APPLICANTS HAS BEEN AMPLY DISPROVED AS THE DEPARTMENTAL OFFICERS AT AGRA AND LUCKNOW HAD ITA NO. 5617/DEL/2010 2 INTIMATED THAT NO SUCH SHARE APPLICANTS EVER EXISTED AT THE GIVEN ADDRESSES, THE ORDER OF THE HONBLE SUPREME COURTS AS REPORTED IN C.I.T. VS. LOVELY EXP ORTS P LTD., TAXMAN VO. 172 PAGE 44 (208) (SUPRA) AS QUOTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR ALLOWING THIS APPEAL IS NOT APPLICABL E IN THIS CASE. II) THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BE SET ASIDE AND THAT OF ASSESSING OFFICE R BE RESTORED. 3. IN THIS CASE THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF PAPER PRODUCTS. RETURN DECLARING INCOME OF ` 84,61,628/ - WAS E-FILED ON 31.10.2007. DURING THE COURSE OF ASSESSMENT PROCEED INGS IT WAS NOTICED BY THE ASSESSING OFFICER THAT THERE WAS AN INCREASE IN SHARE CAPITAL AT ` 76,98,000/-. IT WAS CONTENDED BY THE APPELLANT THAT DURING THE YEAR UNDER CONSIDERATION IT HAD RECEIVED SHARE APPLICATION MONEY FROM SIX DIFFERENT INVESTORS. OUT OF THIS ` 50 LAC WAS RECEIVED FROM M/S MAYA INDUSTRIES LTD., LUCKNOW AND ` 20 LAC FROM M/S ISHOM PHOTO COLOR LAB (P) LTD. AGRA. THUS IN ORDER TO ASCERTAI N THE GENUINENESS OF TRANSACTIONS THE ASSESSING OFFICER ISSUED COMMISSION U/S 131(D) TO THE DEPARTMENTAL OFFICERS IN LUCKNOW AND AGRA AS WELL A S ASKED INFORMATION 133(6) OF THE ACT DIRECTLY FROM SUCH SHA RE APPLICANTS. THE LETTERS ISSUED BY REGISTERED POST TO THE AFORESAID SHARE APPLICANT COMPANIES U/S. 133(6) REMAINED UNSERVED WHILE THE DE PARTMENTAL OFFICERS IN LUCKNOW AND AGRA INFORMED THAT NO SUCH COMPANIES EXISTED AT THE GIVEN ADDRESS. THUS THE ASSESSING OFFICER REQUIRED THE ITA NO. 5617/DEL/2010 3 ASSESSEE TO PRODUCE M.D./C.E.O. TO THESE COMPANIES FOR EXAMINATION. HOWEVER, THE ASSESSEE TRIED TO JUSTIFY THE GENUINENE SS OF TRANSACTION OF SHARE APPLICATION MONEY BUT NO SUCH PERSON RESPON SIBLE FOR INVESTMENT WAS PRODUCED. THE ASSESSING OFFICER MAD E ADDITION OF ` 70,000,000/- ON APPELLANTS INCOME U/S. 68 OF THE I T ACT. 4. UPON ASSESSEES LD. COMMISSIONER OF INCOME TAX (AP PEALS) OBSERVED THAT DURING ASSESSMENT PROCEEDINGS ITSELF, THE ASSESSEE HAD FURNISHED ADEQUATE DETAILS TO SUBSTANTIATE INCREASE IN SHARE CAPITAL. HE OBSERVED THAT IT IS NOT DISPUTED THAT NAME, ADDR ESS, AMOUNT OF SHARE ALLOTMENT AS WELL AS COPIES OF SHARE APPLICAN T FORMS SIGNED BY THESE PERSONS, THEIR INCOME TAX RETURNS, ETC. HAVE BEEN PLACED BEFORE THE ASSESSING OFFICER. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT SUCH ALLOTTEES COULD BE CROSS TALLIED FROM THE FORM NO. 2 WITH ROC AS WELL. IN THESE CIRCUMSTANCES , LD. COMMISSIONER OF INCOME TAX (APPEALS) PROCEEDED TO HOL D THAT ASSESSEE HAS SUFFICIENT EVIDENCES I.E. CONFIRMATION, IT RETURNS, BANK STATEMENTS ETC. AND HENCE ONUS HAS BEEN SHIFTED F ROM ASSESSEE ONTO ASSESSING OFFICER, BUT ASSESSING OFFICER HAS N OT DISCHARGED HIS ONUS TO SHOW ANY DISCREPANCY /FALSITY IN SUCH EVIDENCES. ACCORDINGLY, LD. COMMISSIONER OF INCOME TAX (APPEALS) DECIDE THE ISSU E IN FAVOUR OF THE ASSESSEE. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. ITA NO. 5617/DEL/2010 4 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THA T IN THIS CASE THE IDENTITY OF THE SHARE HOLDERS HAS NOT BEEN ESTABL ISHED IN ORDER TO ASCERTAIN THE GENUINENESS OF THE TRANSACTIONS, ASSE SSING OFFICER ISSUED COMMISSION U/S. 131(D) TO THE DEPARTMENTAL OF FICERS IN LUCKNOW AND AGRA AS WELL AS AND ASKED FOR INFORMATION 133( 6) OF THE ACT DIRECTLY FROM THE SHARE APPLICANTS. THE LETTERS ISSUED BY REGISTERED POST TO THE AFORESAID SHARE APPLICANT COMPANIES U/S . 133(6) REMAINED UNSERVED WHILE THE DEPARTMENTAL OFFICERS FOUND THAT NO SUCH COMPANIES EXISTED AT THE GIVEN ADDRESS. IN THESE CI RCUMSTANCES, IT CANNOT BE SAID THAT THE IDENTITY OF THE SHARE APPLI CANT HAVE BEEN ESTABLISHED. THE OTHER DOCUMENTS ON THE BASIS OF WHICH THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GRANTED TH E RELIEF HAVE NOT BEEN THE SUBJECT MATTER OF SCRUTINY AND EXAMINATI ON BY THE ASSESSING OFFICER. IT IS ALSO NOT THE CASE THAT L D. COMMISSIONER OF INCOME TAX (APPEALS) HAS HIMSELF VERIFIED THESE DOCU MENTS. WE FURTHER FIND THAT THE SHARE IN THIS CASE HAVE BEEN ISSUED AT PREMIUM OF ` 40 PER SHARE, THIS ASPECT HAS NOT BEEN EXAMINE D BY THE AUTHORITIES BELOW. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, INTEREST OF JUSTICE WILL SERVED IF THE MATTER IS REMI TTED TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH. HENCE, THE MATTER ITA NO. 5617/DEL/2010 5 STANDS REMITTED TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31/1/2012. SD/- SD/- [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 31/1/2012 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES