M/s. Kandla Motors Pvt. Ltd., Vadodara V. The ACIT, Circle-1(1)(2), Baroda

ITA 60/AHD/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5213 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 13-11-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 08-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence
• Section: 143(3); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 60/AHD/2016 ( ASSESSMENT YEAR : 2012-13) M/S. KANDLA MOTORS PVT. LTD. PLOT NO. 1203, GIDC, RANCHI INDUSTRIAL AREA, VADODARA - 391350 - 380052 / VS. ACIT CIRCLE 1(1)(2), BARODA ./ ./ PAN/GIR NO. : AADCK8949E ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HARDIK VORA, A.R. / RESPONDENT BY : SHRI L. P. JAIN, SR. D.R. DATE OF HEARING 03/02/2020 !'# / DATE OF PRONOUNCEMENT 20/02/2020 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 23.10.2015 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS) 1, VADODARA ARISING OUT OF THE ORDER DATED 13.03.2015 PASSED BY THE LEARNED ACIT, CIRCLE-1(1)(2), BARODA UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) FOR ASSESSMENT YEAR 2012-13 WITH THE FOL LOWING GROUNDS: ITA NO.60/AHD/2016 M/S. KANDLA MOTORS PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 2 1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN REFUSING ADMISSION OF ADDITIONAL EVIDENCES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN CONFIRMING THE ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY RECE IVED FROM DIFFERENT PERSONS TOTALLING TO RS. 24,44,000/- AS UNEXPLAINED CASH CR EDIT. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 13,193/- U/S 40(A)(IA) OF THE A CT. 2. THE MAIN GROUND RELATES TO CONFIRMATION OF ADDIT ION ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM DIFFERENT PERSONS T OTALING TO RS.24,44,000/- AS UNEXPLAINED CASH CREDIT. 3. THE ASSESSEE COMPANY, AN AUTHORIZED DEALER OF AS HOK LEYLAND, ENGAGED IN THE BUSINESS OF TRADING OF CHASSIS, SPARE PARTS AND PRO VIDING SERVICES FILED ITS RETURN OF INCOME ON 18.08.2012 DECLARING THEREIN NET TAXABLE INCOME AT RS.12,14,906/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON 19.01.2015, THE ASSESSEE WAS ASKED TO FURNISH THE COMPLETE DETAILS OF SHARE PREMIUM RECEIPT AND T HE SOURCE OF INVESTMENTS BY THE SHAREHOLDERS. IT APPEARS THAT THE ASSESSEE HAS BEE N PROVIDED SHARE APPLICATION MONEY BY RELATIVES AS WELL AS BY BUSINESS ASSOCIATES. THE S HARES WERE ISSUED AT PREMIUM OF RS.30/- EACH ON THE BASIS OF WORTH OF THE COMPANY. THE DETAILS OF NAME OF THE ALLOTTEES, NUMBER OF SHARES ALLOTTED, AMOUNT OF SHARES ALLOTTE D, PREMIUM AMOUNT AND TOTAL SHARE AMOUNT WERE DULY SUBMITTED BY THE ASSESSEE BEFORE T HE AO WHEREUPON CERTAIN OBSERVATIONS WERE MADE AND ULTIMATELY THE SAID ASSE SSMENT WAS FINALIZED UPON MAKING ADDITION OF RS.81,41,500/-, WHICH WAS, IN TURN, RES TRICTED TO RS.24,44,000/- BY THE LEARNED CIT(A). CERTAIN DOCUMENTS BEING THE RETURN OF INCOME, STATEMENT OF TOTAL INCOME, P&L ACCOUNT, BALANCE SHEET AND BANK STATEME NT OF THE FAMILY MEMBERS WHO HAVE BEEN LISTED IN PARA 4.2 OF THE ASSESSMENT ORDE R DULY SUBMITTED BEFORE THE LEARNED AO. HOWEVER, OTHER DOCUMENTS LIKE LEDGER OF CASH I N HANDS, LEDGER TRANSPORT COMMISSION RECEIPT OF THESE PERSONS ALONGWITH BALAN CE SHEET, P&L ACCOUNT FOR THE FY 2011-12 WERE SUBMITTED BEFORE THE FIRST APPELLATE A UTHORITY, WHICH WAS NOT ACCEPTED ITA NO.60/AHD/2016 M/S. KANDLA MOTORS PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 3 IN THE ABSENCE OF UNDER RULE 46A OF THE IT RULES, 1 962. IT IS RELEVANT TO MENTION THAT THE ADDITION IN RESPECT OF THE SHARE APPLICATION MO NEY PROVIDED BY SHRI ATMARAM SEWARAM AGRAWAL (HUF), SHRI NARSINGH ATMARAM AGRAWA L AND NITIKA PRANAV AGRAWAL HAVE BEEN CONFIRMED BY THE LEARNED CIT(A). HENCE, THE INSTANT APPEAL BEFORE US. 4. HEARD THE PARTIES AND PERUSED THE MATERIALS AVAI LABLE ON RECORD. IT APPEARS THAT THE RETURN OF INCOME OF THOSE PARTIES, ON RECORD, H AS BEEN RELIED UPON BY THE ASSESSEE IN ORDER TO SHOW THE CREDITWORTHINESS OF THESE PARTIES . APART FROM THAT THE DETAILS INCLUDING THE AFFIDAVITS SHOWN BY THOSE PERSONS ARE ALSO AVAILABLE ON RECORD BEFORE US, WHICH ACCORDING TO THE LEARNED REPRESENTATIVE FOR T HE ASSESSEE HAS ALREADY BEEN PLACED BEFORE LEARNED CIT(A), WHICH HAVE NOT BEEN TAKEN IN TO CONSIDERATION IN ITS PROPER PERSPECTIVE SINCE THE ASSESSEE COULD NOT FILE THE A PPLICATION TO THAT EFFECT UNDER THE PRESCRIBED RULES. HENCE, HE PRAYS FOR SETTING ASID E THE ISSUE TO THE FILE OF THE LEARNED AO FOR DECIDING THE ISSUE AFRESH. ON THE OTHER HAN D, LEARNED REPRESENTATIVE FOR THE DEPARTMENT RELIED UPON THE ORDER PASSED BY THE AUTH ORITIES BELOW. 5. IT IS CLEAR AND SETTLED POSITION OF LAW THAT ONC E THE ASSESSEE HAS GIVEN CERTAIN DOCUMENTS BEFORE THE AUTHORITIES BELOW IN SUPPORT O F HIS CLAIM PARTICULARLY IN ORDER TO JUSTIFY THE IDENTITY AND CREDITWORTHINESS OF THE SH AREHOLDERS AS THE CASE MADE OUT BY THE ASSESSEE BEFORE US, THESE DOCUMENTS, FOR THE ENDS O F JUSTICE NEEDS TO BE VERIFIED BY THE AUTHORITIES BELOW. HENCE, IN ORDER TO PREVENT THE MISCARRIAGE OF JUSTICE, WE FIND IT FIT AND PROPER TO REFER THE ISSUE TO THE FILE OF THE LE ARNED CIT(A) WITH A DIRECTION UPON HIM TO DECIDE THE ISSUE DE NOVO ON THE BASIS OF THE EVIDENCE ON RECORD AND ANY OTH ER EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE OTHE R TIME OF HEARING OF THE APPEAL. THE LEARNED CIT(A) WILL HOWEVER DECIDE THE ISSUE AFRESH POSITIVELY UPON GIVING AN OPPORTUNITY TO BE HEARD UPON THE ASSESSEE AND TO PA SS A REASONED AND SPEAKING ORDER THEREON. 6. THE GROUND RELATING TO CONFIRMATION OF ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.60/AHD/2016 M/S. KANDLA MOTORS PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 4 7. LEARNED COUNSEL FOR THE ASSESSEE DOES NOT WANT T O PRESS THE GROUND RELATING TO DISALLOWANCE OF RS.13,193/- UNDER S.40(A)(IA) OF TH E ACT. ACCORDINGLY, THIS GROUND IS DISMISSED AS NOT PRESSED. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20/ 02/2020 SD/- SD/- (WASEEM AHMED) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/02/2020 TRUE COPY S. K. SINHA / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $%& ' / CONCERNED CIT 4. '() / THE CIT(A)- 5. *+, --%&. %&#. /01$1 / DR, ITAT, AHMEDABAD 6. ,23 4 / GUARD FILE. / BY ORDER, (DY./ASSTT. REGISTRAR) $%& / ITAT, AHMEDABAD