Asstt. Commissioner of Income Tax, Lucknow V. M/s Maa Sharda Buildtech pvt. Ltd., Lucknow

ITA 578/LKW/2014

• Counselvise Citation: 57823714 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-08-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 03-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR A K SINGH
• Assessee Lawyers: P K KAPOOR
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.578/LKW/2014 ASSESSMENT YEAR: 2004 05 ACIT, CENTRAL CIRCLE I, LUCKNOW VS. M/S MAA SHARDA BUILDTECH PVT. LTD., HIG 114, SEC E, ALIGANJ, LUCKNOW PAN:AADCM0533E (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI P. K. KAPOOR, C. A. REVENUE BY DR. A. K. SINGH, CIT DR DATE OF HEARING 26/08/2015 DATE OF PRONOUNCEMENT 2 3 /09/2015 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LD CIT (A) III, LUCKNOW DATED 01.03.2014 FOR A.Y. 2004 05. 2. THE ONLY GRIEVANCE OF THE REVENUE IS REGARDING DELETION OF THE ADDITION OF RS. 26,00,000/ - MADE BY THE A.O. U/S 68 IN RESPECT OF SHARE APPLICATION MONEY SHOWN TO HAVE BEEN RECEIVED BY THE ASSESSEE. 3. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER AND LEARNED AR OF THE ASSESSEE SUPPORTED THE ORDER OF CIT (A). HE ALSO SUBMI TTED THAT ON PAGES 46 TO 75 OF THE PAPER BOOK ARE ALL THE DOCUMENTS IN RESPECT OF THESE SHARE APPLICANTS FOR WHICH ADDITION WAS MADE BY THE A.O. HE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - A) CIT VS. LOVELY EXPORTS (P) LTD., 216 CTR 195 ( SC) B) CIT VS. ORBITAL COMMUNICATION (P) LTD., 327 ITR 560 (DEL) 2 C) CIT VS. STL EXTRUSION (P) LTD., 333 ITR 269 (M. P.) D) CIT VS. GANGESWARI METAL (P) LTD., 30 TAXMANN. COM 328 (DELHI) E) CIT VS. DIVINE LEASING & FINANCE LTD. 299 ITR 268 (DELHI) F) JAYA S ECURITIES LTD. VS. CIT, 166 TAXMANN 7 ( ALLAHABAD) 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES BELOW AND THE JUDGMENTS CITED BY THE LEARNED AR OF THE ASSESSEE. WE FIND THAT THIS ISSUE WAS DECIDED BY CIT (A) AS PER FOLLOWING PARAS ON PAGES 19 TO 21 OF HIS ORDER AND THESE ARE REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - I HAVE PERUSED THE FACTS STATED ABOVE AND AS WELL AS FACTS STATED IN THE ASSESSMENT ORDER IN THIS CASE THE APPELLANT HAS CHALLENGED THE ADDITION OF RS.26,00,000/ - MADE BY THE ACIT ON THE GROUND THAT COPY OF BANK ACCOUNT AND / OR ITR OF THE PERSONS WHO P AID THE SHARE APPLICATION MONEY WERE NOT PROVIDED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. PARTY - WISE BREAKUP ALONG WITH GROUNDS FOR ADDITION OF RS.26,00,000 / - AS DISCUSSED IN PAGE NO.5 OF THE ASSESSMENT ORDER ARE AS UNDER SI. NO. NAME OF THE PARTY SHARE APPLICATION MONEY(RS) GROUNDS OF ADDITION (I) SHRI CHHOTE LAL 3,00,000 / - COPY OF BANK ACCOUNT NOT PROVIDED (II) M/S.KCS FINANCIAL SERVICES LTD. 5,00,000 / - COPY OF BANK ACCOUNT NOT PROVIDED ( III) SEEMA AGARWAL SONI FINANCIAL SERVICES LTD. 2,00,000 / - 7,00,000 / - COPY OF HANK ACCOUNT NOT PROVIDED COPY OF BANK ACCOUNT NOT PROVIDED ( I V) M/S.SPURT SECURITIES LTD. 5,00,000 / - COPY OF BANK ACCOUNT NOT PROVIDED (V) SHRI V.K.TIWARI 1,00,000 / - NEITHER THE COPY OF BANK ACCOUNT NOR COPY OF ITR PROVIDED ( VII) SHRI SANJAY AGARWAL 3,00,000 / - NEITHER THE COPY OF BANK ACCOUNT NOR COPY OF ITR PROVIDED TOTAL 26,00,000 / - THE APPELLANT IN HIS SUBMISSION STATED THAT DURING THE COURSE OF REGULAR ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FURNISHED 3 BEFORE THE ACIT, VIDE HIS REPLY DATED 10.12.2010, COPIES OF ALL THE REQUISITE DOCUMENTS TO PROVE THE IDENTITY AND CREDITWORTHINESS O F THE SHARE APPLICANTS AS WELL AS THE GENUINENESS OF THE TRANSACTIONS. IT IS SEEN FROM THE ABOVE THAT BEFORE THE ASSESSING OFFICER SHARE APPLICATION FORM WAS THERE AND IT IS A COMMON KNOWLEDGE THAT SHARE APPLICATION FORM HAS DETAILS LIKE NAME, ADDRESS, PAN NO., BANK A / C. THE IDENTITY OF ALL THE PERSON IS PROVED BY VIRTUE OF THIS FORM I.E. SHARE APPLICATION. SECONDLY THE ASSESSING OFFICER HAS STATED THAT IN SERIAL NO. I TO V, COPY OF BANK ACCOUNT NOT PROVIDED THAT MEANS THE ASSESSING OFFICER ACCEPTS THAT ITR WAS COPY THERE AND FOR VI AND VII. HE SAYS NEITHER COPY OF BANK A/C NOR ITR WAS PROVIDED BUT THE SHARE APPLICATION FORM ITSELF GIVES DETAILS OF BANK A / C . THEREFORE AFTER CONSIDERING THE ABOVE FACTS IT IS SEEN ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.26,00,000 / - BY OBSERVING THAT IDENTITY HAS NOT BEEN PROVED. THE ASSESSING OFFICER DID NOT MAKE ANY FURTHER QUERY IN ALL THE CASES. THE ASSESSEE HAD DULY DISCHARGED ITS ONUS BY PROVING THE IDENTITY OF THE PERSON. RELIANCE IS ALSO BEING IS HE REBY PLACED ON THE SUPREME COURT CASE OF LOVELY EXPORTS 216 CTR SC 195 CASE AS WELL AS DIVINE LEASING. 'WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMED ARE GIVEN TO THE A.O., THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS I ACCORDANCE WITH LAW, HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT.' AS THIS CASE IS COVERED BY THE ABO VE CITED SUPREME COURT CASE LAWS, THEREFORE, THE ADDITION OF RS.26,00,000/ - IS HEREBY DELETED. 5. WE FIND THAT IN THE ASSESSMENT ORDER, THE A.O. HAS NOTED THAT COPY OF BANK STATEMENTS WAS NOT PROVIDED IN RESPECT OF ALL SEVEN SHARE APPLICANTS FROM WHOM T HIS AMOUNT OF RS. 26 LACS WAS SAID TO HAVE BEEN RECEIVED. IN ADDITION TO THIS, COPY OF INCOME TAX RETURN WAS ALSO NOT PROVIDED IN RESPECT OF TWO SHARE APPLICANTS OUT OF SEVEN FROM WHOM AMOUNT OF RS. 4 LACS WAS 4 SAID TO HAVE BEEN RECEIVED. LEARNED CIT (A) H AS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. (SUPRA) AFTER STATING THAT THE ASSESSEE HAS PROVED THE IDENTITY. NOW WE EXAMINE THE APPLICABILITY OF VARI OUS JUDGMENTS CITED BY THE LEARNED AR OF THE ASSESSEE AS NOTED ABOVE. FIRST JUDGMENT IS OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. LOVELY EXPORTS (P) LTD. (SUPRA) AND IN THIS CASE, THE COMBINED JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN TH E CASE OF CIT VS. DIVINE LEASING & FINANCE LTD. AND CIT VS. LOVELY EXPORTS (P) LTD. (SUPRA) WAS APPROVED. ON PAGE NO. 286 OF 299 ITR IS THE JUDGMENT RENDERED BY HONBLE DELHI HIGH COURT IN THE CASE OF LOVELY EXPORTS (SUPRA). WE ARE REFERRING TO THIS JUDGME NT BECAUSE THIS IS A PRIVATE LIMITED COMPANY AS IN THE PRESENT CASE BECAUSE DIVINE LEASING LIMITED IS A LIMITED COMPANY. IN THAT CASE, THIS WAS THE FINDING OF THE TRIBUNAL AS REPRODUCED IN THE JUDGMENT OF HONBLE DELHI HIGH COURT ON PAGE NO. 286 OF 299 ITR THAT THE ASSESSSEE HAS FURNISHED NECESSARY DETAILS SUCH AS PAN/INCOME TAX WARD NO./RATION CARD OF SHARE APPLICANTS AND SOME OF THEM ARE ASSESSED TO TAX. IT WAS ALSO NOTED THAT SHARE APPLICATION MONEY WAS RECEIVED BY CHEQUE. IN THE PRESENT CASE EXCEPT IN THREE CASES I.E. SHRI CHHOTE LAL RS. 3 LACS, SEEMA AGARWAL RS. 2 LACS, AND SHRI SANJAY KUMAR AGARWAL RS. 3 LACS TOTAL RS. 8 LACS, BALANCE AMOUNT OF RS. 18 LACS WAS RECEIVED BY WAY OF CHEQUES. THIS IS ALSO NOTED BY THE TRIBUNAL IN THAT CASE THAT THE A.O. D ID NOT CARRY OUT ANY INQUIRY INTO THE INCOME TAX RECORDS OF THE PERSONS WHO HAVE GIVEN THE PAN/ WARD NO. IN ORDER TO ASCERTAIN THE NON EXISTENCE OF SHARE APPLICANTS. IN THE PRESENT CASE, OUT OF SEVEN SHARE APPLICANTS WHO ARE IN DISPUTE, IT IS THE OBJECTION OF THE A.O. THAT TWO OF THEM I.E. SHRI V. K. TIWARY AND SRI SANJAY KUMAR AGARWAL HAD NOT PROVIDED COPY OF INCOME TAX RETURN BUT PAN IS AVAILABLE OF THEM ALSO ON PAGES 73 & 74 OF THE PAPER BOOK CONTAINING SHARE APPLICATION FORM OF SHRI V. K. TIWARY AND CON FIRMATION OF SHRI SANJAY KUMAR AGARWAL. HENCE, PAN OF ALL SEVEN IS 5 AVAILABLE BUT IT IS SEEN AS PER THE ASSESSMENT ORDER THAT APART FROM ALLEGING THAT BANK STATEMENT OF ALL SEVEN AND INCOME TAX RETURN OF TWO WERE NOT MADE AVAILABLE, THERE IS NO OTHER OBJECT ION OF THE A.O. AND NO ENQUIRY WAS MADE BY THE A.O. AND NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE A.O. TO EVEN INDICATE THAT THESE SHARE APPLICANTS ARE BOGUS OR NON EXISTENT. THE TRIBUNAL IN THAT CASE HAD FOLLOWED THE JUDGMENT OF HONBLE APEX COURT REN DERED IN THE CASE OF CIT VS. ORISSA CORPORATION LTD., 159 ITR 78 AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THIS TRIBUNAL ORDER WAS APPROVED BY HONBLE DELHI HIGH COURT AND LATER ON BY HONBLE APEX COURT ALSO. IN THE PRESENT CASE ALSO, THE PAN OF ALL SHARE APPLICANTS ARE MADE AVAILABLE ALONG WITH OTHER DOCUMENTS SUCH AS CONFIRMATION, SHARE APPLICATION FORM AND INCOME TAX RETURN EXCEPT IN TWO CASES AND NO ENQUIRY WAS MADE BY THE A.O. FROM THE A.O. OF THE SHARE APPLICANTS AND NO OTHER ADVERSE MATERIAL H AS BEEN BROUGHT ON RECORD EXCEPT STATING THAT BANK STATEMENT OF ALL SEVEN SHARE APPLICANTS AND INCOME TAX RETURN OF TWO APPLICANTS WERE NOT FURNISHED. IN OUR CONSIDERED OPINION, THESE OBJECTIONS ARE NOT SUFFICIENT TO HOLD THAT THE SHARE APPLICATION MONEY S AID TO HAVE RECEIVED BY THE ASSESSEE IS OWN UNEXPLAINED MONEY OF THE ASSESSEE. AS THE FACTS IN THE PRESENT CASE AND IN THE CASE OF LOVELY EXPORTS (SUPRA) ARE SIMILAR, WE DECLINE TO INTERFERE IN THE ORDER OF CIT (A) BY RESPECTFULLY FOLLOWING THIS JUDGMENT O F HONBLE APEX COURT. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 3 /09/2015 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR