M/s Sharwan Advertising Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 6188/DEL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3482 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 11-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 19-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHOUDHARY
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , DELHI G BENCH , NEW DELHI BEFORE SHRI R.K. PANDA ACCOUNTANT MEMB E R AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO. 6188 /DEL /201 3 [ ASSESSMENT YEAR: 20 0 7 - 0 8 ] M/S SHARWAN ADVERTISING PVT LTD B - 4/71A, LAWRENCE ROAD NEW DELHI PAN : AA BCS 7218 Q VS. THE I . T .O WARD 8 ( 1 ) NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY: NONE R EVENUE BY: SH RI BEDOBANI CHOUDHARY , SR. DR DATE OF HEARING : 11 .0 4 .2017 DATE OF PRONOUNCEMENT : 17 .0 4 .2017 ORDER PER R.K. PANDA , ACCOUNTANT MEMBER : - THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 04 .0 6 .201 0 OF THE CIT(A) - X I , NEW DELHI RELATING TO A.Y. 200 7 - 0 8 . 2. DESPITE SERVICE OF NOTICE, NONE APPEARED FOR AND ON BEHALF OF THE ASSESSEE. FURTHER, IT WAS SEEN THAT BEFORE THE LD. CIT( A) ALSO, THE ASSESSEE HAD NOT APPEARED, FOR WHICH HE HAD PASSED EXPARTE ORDER. THEREFORE, THIS 2 ITA NO. 6188 /DEL/201 3 APPEAL IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 3. THE ASSESSEE, IN THE GROUNDS OF APPEAL, HAS CHALLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 90 LAKHS MADE BY THE A.O U/S 68 OF THE INCOME - TAX ACT, 1961. 4 . FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COMPANY , ENGAGED IN SALE AND PURCHASE OF SHARES. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE A.O OBSERVED THAT THE SHARE CAPITAL OF THE ASSESSEE COMPANY HAS INCREASED BY RS. 9 LAKHS WHILE THERE WAS RECEIPT OF SHARE PREMIUM TO THE TUNE OF RS. 81 LAKHS. ON BEING QUESTIONED BY THE A.O, IT WAS SUBMITTED THAT THE AMOUNT OF RS. 90 LAKHS WAS RECEIVED FROM THE FOLLOWING SEVEN PARTIES: SL. NO. NAME ADDRESS AMOUNT CASH/ BANK 1. PANMAD FOOTWEARS P. LTD 10689 - 690, MANAKPURA, RAM NAGAR, NEW DELHI 15,00,000/ - CASH 2. LUCKY LEASING &* FINACNE P. LTD B - 4/71, LAWRENCE ROAD, DELHI 35. 15,00,000/ - CASH 3. BEAUTY ELECTRONICS P LTD B - 4/71, LAWRENCE ROAD, DELHI 35. 9,50,000/ - CASH 4. BROAD TRADERS & FINANCIERS P. LTD B - 4/71, LAWRENCE ROAD, DELHI 35. 15,00,000/ - CASH 5. PRATAP SILICAMET P. LTD 10689 - 690, MANAKPURA, RAM NAGAR, NEW DELHI 15,00,000/ - CASH 6. GHANSHYAM DAS B - 4/71, LAWRENCE 10,50,000/ - BANK 3 ITA NO. 6188 /DEL/201 3 ROAD, DELHI 35. 7. VIJAY KUMAR B - 4/71, LAWRENCE ROAD, DELHI 35. 10,00,000/ - BANK 5. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE, THE A.O OBSERVED THAT IN BLOCK B - 4 OF LAWRENCE ROAD, THESE ARE FLAT NOS LIKE 71A, 71B, 71C AND 71D DEPENDING UPON THE FLOOR. TH E RE IS NO FLAT NUMBER WITH NO. 71 ONLY. THE ADDRESS OF THE COMPANY B - 4/71 SHOULD PROBABLY BE B - 4/71A ONLY. SINCE A SUM OF RS. 69,50,000/ - WAS RECEI VED IN CASH FROM FIVE PARTIES, THE A.O ASKED THE ASSESSEE TO PRODUCE THE DIRECTORS OF THE ABOVE COMPANIES. NO BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE A.O. THE ASSESSEE ONLY FILED AFFIDAVITS OF DIRECTORS BEFORE THE A.O. ON BEING AGAIN ASKED BY THE A.O TO PRODUCE THE CASH BOOK IN ORIGINAL AND ALSO THE DIRECTORS OF THE INVESTING COMPANIES, THE ASSESSEE FILED REPLY THAT THERE IS NO SUCH LEGAL OBLIGATION ON THE PART OF THE ASSESSEE. THE A.O OBSERVED THAT THE AUDITORS OF THE COMPANY ARE SAME. THE A.O FURT HER NOTED THAT THERE WERE HUGE CASH TRANSACTIONS IN THE BOOKS OF THE ASSESSEE COMPANY. ACCORDING TO HIM, IN A METROPOLITAN CITY LIKE DELHI HAVING ALL BASIC BANKING FACILITIES WHERE THERE IS HARDLY ANY CASH TRANSACTION, THE ASSESSEE COMPANY WOULD STILL DEA L IN CASH FOR ACCEPTING SHARE APPLICATION AND SHARE PREMIUM. THE SAME IS HARDLY CREDIBLE . HE OBSERVED THAT ADDRESS OF FIVE OF THE COMPANIES ARE SAME AS THAT OF THE ASSESSEE COMPANY. IN SPITE OF THE QUESTIONNAIRE SENT ON 18.12.2009, NO REPLY WAS FILED BY THE ASSESSEE. FURTHER, AS AGAINST THE CLOSING STOCK AS ON 31.3.2007 AT RS. 1,39,50,000/ - , TOTAL SHARE CAPITAL AND SHARE PREMIUM WORKED OUT TO RS. 1,39,45,000/ - . THEREFORE, THE ASSESSEE 4 ITA NO. 6188 /DEL/201 3 WAS IN DIRE NEED OF MONEY DESPERATELY TO ACCOMMODATE THOSE COMPANIES WHOSE SHARES WERE ALLEGEDLY PURCHASED AND KEPT BY IT AS CLOSING STOCK AS ON 31.3.2007. THE A.O FURTHER OBSERVED THAT IN TWO CASES, THE AMOUNTS WERE RECEIVED BY CHEQUE BUT NO BANK STATEMENTS WERE FURNISHED INSPITE OF REPEATED REQUESTS FROM HIS SIDE. SINCE THE ASSESSEE FAILED TO PRODUCE THE ORIGINAL BOOKS OF ACCOUNTS TO VERIFY THE GENUINENESS OF THE TRANSACTI O NS AND ALSO FAILED TO PROVE THE IDENTITY OF THE PERSONS WHO HAD GIVEN CREDITS, THE A.O HELD THAT THE ASSESSEE HAS FAILED T O DISCHARGE THE ONUS OF GENU INENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE ENTITIES FROM WHERE THE CREDIT HAS BEEN APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. ACCORDING TO HIM, MERE SUBMISSION OF PAN AND BANK STATEMENTS OF THE TWO PERSONS WOULD NOT BE SUFFICIENT FOR THIS PURPOSE. RELYING ON VARIOUS DECISIONS, HE MADE ADDITION OF RS. 90 LAKHS U/S 68 OF THE ACT AS UNEXPLAINED CREDITS IN THE BOOKS OF THE ASSESSEE. 6. SINCE THERE WAS NO APPEARANCE BEFORE THE LD. CIT(A) AND NO MATERIAL WAS PRODUCED BEFORE HIM TO CONTROVE RT THE FINDINGS GIVEN BY THE A.O, THE LD. CIT(A) , R ELYING ON VARIOUS DECISIONS UPHELD THE ACTION OF THE A.O IN MAKING ADDITION OF RS. 90 LAKHS U/S 68 OF THE ACT. WHILE DOING SO, HE OBSERVED THAT IN SPITE OF REPEATED REQUESTS, THE ASSESSEE FAILED TO FURNIS H THE CREDIT WORTHINESS BEFORE THE A.O AT VARIOUS STAGES OF ASSESSMENT. FURTHER, IT IS NOT KNOWN AS TO HOW THE AMOUNT OF RS. 90 LAKHS WAS RECEIVED AS SHARE CAPITAL/PREMIUM FROM THE SEVEN PERSONS. HE OBSERVED THAT THERE IS NO 5 ITA NO. 6188 /DEL/201 3 JUSTIFIABLE REASON FOR RECEIV ING AN AMOUNT OF RS. 69,50,000/ - IN CASH WHEN THERE WAS ADEQUATE BANKING FACILITY AT DELHI. SINCE THE IDENTITY AND CAPACITY OF THE SUBSCRIBER WAS NOT ESTABLISHED AND GENUINENESS OF THE TRANSACTION COULD NOT BE PROVED, THE LD. CIT(A) HELD THAT THE ASSESSEE HAS NOT DISCHARGED THE ONUS CAST ON HIM TO PROVE THE IDENTITY AND CREDIT WORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION. HE ACCORDINGLY UPHELD THE ADDITION MADE U/S 68 OF THE ACT. UNDER THE AFORE MENTIONED CIRCUMSTANCES, WE DO NOT FIND A NYTHING WRONG IN THE ORDER OF THE LD. CIT(A) SUSTAINING THE ADDITION MADE BY THE A.O. S INCE THE ORDER OF THE LD. CIT(A) IS A REASONED ONE, THEREFORE, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, WE UPHOLD THE SAME. GROUNDS RAISED BY THE ASSESSEE ARE ACC ORDINGLY DISMISSED. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCE D IN THE OPEN COURT ON 1 7 .0 4 .2017. SD/ - SD/ - ( BEENA PILLAI ) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMB E R DATED: 1 7 . 0 4 .2017 V. LAKSHMI COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT (APPEALS) 5) DR: ITAT ASSISTANT REGISTRAR 6 ITA NO. 6188 /DEL/201 3 DATE DRAFT DICTATED ON 11 .0 4 .2017 DRAFT PLACED BEFORE AUTHOR 12 .0 4 .2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .0 4 .2017 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.