ACIT - 1(3)(1), MUMBAI V. RAMNIK POWER AND ALLOYS PVT. LTD., MUMBAI

ITA 6004/MUM/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3755 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 07-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIYA
• Keywords: Unexplained cash credit; Bogus Share capital
• Section: 68

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE SH. SHAMIM YAHYA , AM & HONBLE SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 6004/MUM/2016 ( / ASSESSMENT YEAR: 2012 - 13 ) ACIT - 1(3)(1), R. NO. 540, 5 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 / VS. RAMNIK POWER & ALLOYS PVT. LTD. 145, DADYSETH AGIARY LANE, OFFICE NO. 8, SHIV NIWAS, MUMBAI - 400 002 ./ ./ PAN NO. AAECM1788J ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI CHAITANYA ANJARIYA, DR / RESPONDENTBY : NONE / DATE OF HEARING : 12.12.2018 / DATE OF PRONOUNCEMENT : 11.02.2019 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 3 , MUMBAI DATED 22.07.2016 F OR AY 2012 - 13 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 6004 /MUM/201 6 RAMNIK POWER & ALLOYS PVT. LTD. I. ''WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAWS, LD. CIT(A) WAS CORRECT IN ALLOWING THE APPEAL OF THE ASSESSEE IN REGARD TO ADDITION OF SHARE APPLICATION MONEY RECEIVED OF RS.1,00,00,000/ - ON ACCOUNT OF UNEXPLAINED CREDIT U/S.68 OF THE I T ACT. II. WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHILST IT IS TRU E THAT IT IS THE OBLIGATION OF THE ASSESSING OFFICER TO CONDUCT PROPER SCRUTINY OF THE MATERIAL, GIVEN THE FACT THAT THE REPLY FROM LECOTODRYER MARKETING PVT. LTD. ON 26.03.2015, ONLY FIVE DAYS BEFORE TIME BARRING DATE I.E.31.03.2015 AND ONLY ONE DAY BEFOR E THE DATE OF PASSING ASSESSMENT ORDER ON 27.03.2015, THE OBLIGATION TO CONDUCT PROPER INQUIRY ON THE FACTS WOULD SHIFT TO LD. CIT(A) IN VIEW OF THE HON'BLE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING AND MARKETING (P) LTD. (ITA NO. 525/2014)?' III. 'WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS CORRECT IN HOLDING THAT JUST BECAUSE THE SHARE APPLICATION MONEY WAS RECEIVED THROUGH BANKING CHANNEL, IT WOULD NECESSARILY FOLLOW THAT SATISFACTION A S TO THE CREDITWORTHINESS OF THE PARTIES OR THE GENUINENESS OF THE TRANSACTIONS IN QUESTION WOULD ALSO HAVE BEEN ESTABLISHED?' 3 I.T.A. NO. 6004 /MUM/201 6 RAMNIK POWER & ALLOYS PVT. LTD. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR WITHDRAW THE AFORESAID GROUND OF APPEAL. COPY OF THE CIT (A)'S ORDER IS RECEIVED O N 11/08/2016. LAST DATE FOR FILING APPEAL IS 09/10/2016. 2. AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE IN SPITE OF CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED. FROM THE ORDERSHEET , WE OBSERVED THAT FOR THE LAST SEVERAL DATES OF HEARINGS, NOBODY WAS APPEARING ON BEHALF OF THE ASSESSEE. NOTICES WERE ISSUED TIME AND AGAIN ON THE ADDRESSES MENTIONED BY THE ASSESSEE AND LAST OPPORTUNITY WAS GRANTED VIDE NOTICE DATED 03.12.18 FOR PUTTING APPEARANCE BY THE ASSESSEE ON 12.12.18, BUT STILL NONE HAS APPEARED. ON THE OTHER HAND L D. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. AS PER THE FACTS OF THE CASE, AO MADE ADDITIONS U/S 68 OF THE ACT ON THE GROUND THAT THE PARTY FROM WHOM THE SHARE APPLICATION MONEY WAS RECEIVED FROM THE RELEVANT PERIOD WAS NOT GENUINE AND WAS NOT HAVING FINANCIAL C REDENTIALS. IN PARA NO. 5 OF 4 I.T.A. NO. 6004 /MUM/201 6 RAMNIK POWER & ALLOYS PVT. LTD. THE ORDER OF AO, IT HAS BEEN SPECIFICALLY MENTIONED THAT M/S LECTRODRYER MARKETING PVT. LTD. HAD NO FINANCIAL ACTIVITIES WHICH DISPROVES THE WORK AND STATURE OF THE COMPANY. APART FROM THIS, IT WAS ALSO MENTIONED AFTER VERIFICA TION THAT THE PARTY HAD NO MAJOR FIXED ASSETS LIKE LAND, BUILDING, FACTORY PREMISES, ETC AND THUS WAS A NON - GENUINE PARTY. HOWEVER, LD. CIT(A) IN PARA NO. 6.2 HAD MENTIONED THAT THE ABOVE COMPANY HAD SUBMITTED ALL THE RELEVANT DOCUMENTS DURING THE COURSE O F APPELLATE PROCEEDINGS TO PROVE THE GENUINESS, IDENTITY AND CREDITWORTHINESS. BUT, LD. CIT(A) HAS NOT SPECIFIED THE DOCUMENTS OR RELEVANCY OF ANY SUCH DOCUMENTS WHILE DELETING THE ADDITIONS. HENCE IN SUCH CIRCUMSTANCES, THE OBLIGATION TO CONDUCT PROPER IN QUIRY ON THE FACTS HAD SHIFTED TO LD. CIT(A) IN VIEW OF THE HON'BLE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING AND MARKETING (P) LTD. (ITA NO. 525/2014) AND LD. CIT(A) INSTEAD OF DOING SO, HAD DELETED THE ADDITIONS, WHICH IS NO T IN ACCORDANCE WITH PROVISIONS OF LAW. 4. THEREFORE, CONSIDERING THE FACTS OF THE PRESENT C ASE, MATERIAL PLACED ON RECORD AND KEEPING IN VIEW THE INTEREST OF JUSTICE, WE SET ASIDE TH E ORDER OF LD. CIT(A) AND RESTORE T HE 5 I.T.A. NO. 6004 /MUM/201 6 RAMNIK POWER & ALLOYS PVT. LTD. MATTER BACK TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO SPECIFY WHICH DOCUMENTS WERE FILED BY THE ASSESSEE DURING THE APPELLATE PROCEEDING AND ALSO TO SPECIFY THEIR ADMISSIBILITY AND RELEVANCY WITH THE GENUINENESS OR TRANSACTION, IDENTITY AND CREDITWORTHINESS OF THE COMPANY AND TH EREAFTER PASS AFRESH ORDER . IT IS NEEDLESS HERE TO MENTION THAT BEFORE PASSING THE ORDER , THE LD. CIT(A) SHALL PROVIDE SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESS E E. 5. BEFORE PARTING, WE MAY MAKE IT CLEAR THAT OUR DECISION TO RESTORE T HE MATTER BACK TO THE FILE OF LD. CIT(A) SHALL IN NO WAY BE CONSTRUED AS HAVING ANY REFLECTION OR EXPRESSION ON THE MERITS OF THE DISPUTE, WHIC H SHALL BE ADJUDICATED BY THE LD. CIT(A) INDEPENDENTLY IN ACCORDANCE WITH LAW. 6 . IN THE NET RESULT, THE APPEAL FILED BY THE R EVENUE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH FEB , 2019. SD/ - SD/ - ( SHAMIM YAHYA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 11 . 02 .201 9 SR.PS . DHANANJAY 6 I.T.A. NO. 6004 /MUM/201 6 RAMNIK POWER & ALLOYS PVT. LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI