ACIT, New Delhi V. M/s. Suvidha Maintainence Services Pvt. Ltd., New Delhi

ITA 5677/DEL/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5498 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.5677/DEL/2014 ASSESSMENT YEAR: 2011-12 ASSTT. CIT, CENTRAL CIRCLE-11, NEW DELHI. VS. M/S. SUVIDHA MAINTENANCE SERVICES PVT. LTD., MILLENNIUM BUSINESS CENTRE, GF, CABIN NO.8, 34, CORNER MARKET, MALVIYA NAGAR, NEW DELHI. TAN/PAN: AAGCS 4020F (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.S. RANA, CIT-DR RESPONDENT BY: NONE DATE OF HEARING: 14 03 2018 DATE OF PRONOUNCEMENT: 08 05 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEALS HAVE BEEN FILED BY THE REVENU E AGAINST THE IMPUGNED ORDER DATED 31.07.2014, PASSED BY CIT (APPEALS)-XXXI, NEW DELHI, FOR THE QUANTUM OF ASSES SMENT PASSED U/S.143(3) FOR THE ASSESSMENT YEARS 2011-12. IN THE GROUNDS OF APPEAL, THE REVENUE HAS CHALLENGED THE D ELETION OF ADDITION OF RS.37,00,000/- MADE BY THE ASSESSING OF FICER U/S.68 OF THE IT ACT. 2. THE FACTS IN BRIEF ARE THAT, DURING THE COURS E OF THE I.T.A. NO.5677/DEL/2014 2 ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT ASSESSE E HAS FORFEITED THE PARTLY PAID SHARES AMOUNTING TO RS.37 LACS WHICH WAS RECEIVED IN THE FINANCIAL YEAR 1999-2000 AND WAS SHOWN UNDER THE HEAD RESERVE ON SHARE FORFEITURE. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH THE DETAILS REGARDING PARTLY PAID SHARES, NAMES AND ADDRESSES O F THE CONCERN PERSONS. AFTER GETTING THE DETAILS, HE ISSU ED NOTICE U/S.133 (6) TO THE SHARE APPLICANTS, WHICH EITHER C OULD NOT BE SERVED OR NO COMPLIANCE WAS MADE. IN ABSENCE OF ANY INFORMATION COMING FORWARD, HE ADDED THE AMOUNT OF RS.37 LACS U/S 68. 3. LD. CIT(A) HAS DELETED THE ADDITION ON THE GROU ND THAT ASSESSING OFFICER HAS NO JURISDICTION TO ASSESS THE AMOUNT RECEIVED DURING THE FINANCIAL YEAR 1999-2000 AND SA ME CANNOT BE BROUGHT TO TAX U/S.68 IN THIS YEAR. THE R ELEVANT OBSERVATIONS AND THE FINDINGS OF THE LD. CIT (A) RE ADS AS UNDER:- 4.2.5 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR , THE ASSESSMENT ORDER AND THE LAWS RELIED UPON THE AR. I T IS NOT IN DISPUTE THAT THE AMOUNT IN QUESTION HAS BEEN RECEIV ED BY THE APPELLANT DURING THE F.Y. 1999-2000. IF THE SAID AM OUNT IS UNEXPLAINED CASH CREDIT THE SAME IS LIABLE TO BE AS SESSED U/S 68 OF THE ACT FOR THE A.Y. 2000-01. HOWEVER, AS ON THE DA TE OF SEARCH AS WELL AS ON THE DAY OF ASSESSMENT ORDER, NO ACTION C OULD HAVE BEEN TAKEN IN RESPECT OF THE SAID ASSESSMENT YEAR AS SUC H ACTION IS TIME BARRED AS ON THOSE DATES. THEREFORE, THERE IS NO ME RIT IN THE AOS ACTION IN TRYING TO BRING TO TAX THE SAID AMOUNT U/ S 68 DURING THE I.T.A. NO.5677/DEL/2014 3 PRESENT ASSESSMENT YEAR. IT IS THE DATE OF CREDIT I NTO THE BOOKS OF ACCOUNT WHICH IS RELEVANT FOR DETERMINING THE ASSES SIBILITY OF INCOME U/S. 68 AND NOT THE TIME ON WHICH SUCH AMOUN T HAS BEEN FORFEITED BY THE ASSESSEE. IN CASE IT WAS A TRADE L IABILITY, FOR WHICH ANY DEDUCTION HAD BEEN ALLOWED IN THE PAST, THE AMO UNT, IF ANY, COULD HAVE BEEN BROUGHT TO TAX AS CESSATION OF LIAB ILITY U/S 41 OF IT ACT 1961. HOWEVER, IN THE PRESENT CASE THE AMOUNT R ECEIVED AS SHARE CAPITAL IS NEITHER A TRADING RECEIPT NOR A TR ADING LIABILITY. THE CASE LAWS RELIED UPON BY THE AR ARE DIRECTLY APPLIC ABLE IN THE PRESENT CASE. DUE TO NON RECEIPT OF CALL MONEY, THE ASSESSEE HAS FORFEITED THE PARTLY PAID UP SHARES WHICH IS A CAPI TAL RECEIPT. THEREFORE THERE IS NO MERIT IN THE AOS ACTION. IN VIEW OF THIS ADDITION OF RS.37 LACS MADE TO THE TOTAL INCOME IS HEREBY DELETED. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE, THEREFORE, WE ARE HEARING THE APPEAL EXP ARTE QUA THE ASSESSEE. 5. AFTER HEARING THE LEARNED DR AND CONSIDERING TH E RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDERS, WE FIND THAT IT IS NOT DISPUTED THAT THE ASSESSEE HAS RECEIVED SUM OF RS.37 LACS IN THE FINANCIAL YEAR 1999-2000, WHICH WAS LYI NG IN THE SHARE CAPITAL RESERVE AS PARTLY PAID UP SHARES. DUR ING THE PREVIOUS YEAR RELEVANT TO THE CURRENT ASSESSMENT YE AR, ASSESSEE HAD FORFEITED THIS PARTLY PAID UP SHARES F OR NON- RECEIPT OF CALL MONEY AND THE SAME WAS CREDITED TO CAPITAL RESERVE ACCOUNT AS PER THE PROVISIONS OF COMPANIES ACT. THE ASSESSING OFFICER IN ABSENCE OF ANY RESPONSE FROM T HE SAID PARTIES HAS MADE THE ADDITION U/S.68, WHICH OSTENSI BLY COULD I.T.A. NO.5677/DEL/2014 4 NOT HAVE MADE WHEN AMOUNT OF CREDIT WAS RECEIVED DU RING THE FINANCIAL YEAR 1999-00 RELEVANT TO ASSESSMENT YEAR 2000-01. APART FROM THAT, THE SAID AMOUNT CANNOT BE BROUGHT TO TAX AS CESSATION OF LIABILITY U/S.41 AS THE AMOUNT RECEIVE D AS SHARE CAPITAL IS NEITHER A TRADE RECEIVABLE NOR TRADING L IABILITY AS THE SHARE APPLICATION WAS RECEIVED ON CAPITAL ACCOUNT. THUS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. C IT (A) AND THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MAY, 2018. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08 TH MAY, 2018