ITO, New Delhi V. M/s. Vignesh Mercantiles & Credits Pvt. Ltd.,

ITA 635/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8274 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-06-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 19-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: ASHWANI TANEJA
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `G : NEW DELHI) BEFORE HONBLE SR. VICE PRESIDENT SHRI R.P. GARG A ND HONBLE JUDICIAL MEMBER, SHRI RAJPAL YADAV ITA NO.635/DEL./2009 (ASSESSMENT YEAR : 2003-04) ITO, WARD 17(3), VS. M/S VIGNESH MERCANTILES & CRE DITS P. LTD., NEW DELHI. 207, 3 RD FLOOR, D-CHAMBER-I, 2068/39 NAI WALA, KAROL BAGH, NEW DELHI. (PAN/GIR NO.AAACV0895R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI TANEJA, ADV. REVENUE BY : SHRI KISHORE B., SR. DR ORDER PER R.P. GARG, SR.VP THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 2003-04 IN DELETING AN ADDITION OF RS.9,00,000 MADE U/S 68 OF I.T. ACT, 1961. 2. IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSEE TH AT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY OBSERVING THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF LOVELY EXPORTS LTD. AS REPORTED IN 216 CTR 195. LD.AR ALSO PLACED A COPY OF THE ORDER OF THE TRIBUNAL IN ITA NO.425/DEL./2009 I N THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 IN WHICH THE TRIBUNAL DECID ED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING IN PARAS.6 & 7 OF THE ORDER AS UNDER: 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW. WE FIND THAT IN THE PRESENT CASE, THE ASSESSEE HAD RECEIVED FRESH S HARE CAPITAL OF R.15 LAKHS DURING THE RELEVANT YEAR. VARIOUS DETAILS WERE SUBMITTED B Y THE ASSESSEE BEFORE THE ASSESSING OFFICER BUT IT IS NOTED BY THE ASSESSING OFFICER THAT HE ASKED THE ITA NO.635/DEL./2009 (A.Y. : 2003-04) 2 ASSESSEE TO PRODUCE THE DIRECTORS OF VARIOUS COMPAN IES WHO HAVE MADE INVESTMENT IN THE SHARE CAPITAL OF THE ASSESSEE COM PANY BUT THE ASSESSEE COULD NOT PRODUCE THE DIRECTORS OF THESE COMPANIES AND THE AS SESSING OFFICER MADE ADDITION OF RS.15 LAKHS ON ACCOUNT OF ENTIRE FRESH SHARE CAP ITAL RECEIVED BY THE ASSESSEE COMPANY DURING THIS YEAR. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD CIT(A) WHO UPHELD THE PART ADDITION ON THIS ACCOUNT TO THE EXTENT OF RS.6 LAKHS RECEIVED FROM FOUR PRIVATE LIMITED COMPANIES. THE I DENTITY OF THESE FOUR COMPANIES IS NOT IN DOUBT BECAUSE IT IS NOTED BY TH E LD CIT(A) ON PAGES 10 & 11 OF HIS ORDER THAT PAN NUMBER AND FULL ADDRESS OF TH ESE COMPANIES ARE ALSO AVAILABLE ON RECORD ALONG WITH COPY OF APPLICATION FOR SHARES, COPY OF INCOME TAX RETURN ACKNOWLEDGEMENT AND BANK ACCOUNT COPIES ALON G WITH THE CONFIRMATION LETTERS. UNDER THESE FACTS, WE ARE OF THE CONSIDER ED OPINION THAT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT O F HON'BLE APEX COURT RENDERED IN THE CASE OF LOVELY EXPORTS LTD. (SUPRA) , WHEREIN IT WAS HELD AS UNDER:- CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDI SCLOSED INCOME UNDER SECTION 68 OF INCOME TAX ACT, 1961? WE FIND NO MERI T IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE AP PLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREH OLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPART MENT IS FREE TO PROCEED TO RE-OPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGMENT. 7. RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE APEX COURT, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE BECAUSE WE FIN D THAT IN THE PRESENT CASE, THE IDENTITY OF THE SHARE HOLDERS IS NOT IN DOUBT AND T HE ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE BASIS THAT DIRECTORS OF TH ESE COMPANIES COULD NOT BE PRODUCED BEFORE HIM AND THE SAME HAS BEEN CONFIRMED BY THE LD CIT(A) ON THE BASIS THAT TRANSACTION IS NOT GENUINE. THE ASSESSE E HAS FILED CONFIRMATIONS LETTERS AND OTHER DETAILS ALONG WITH PAN. WE, THEREFORE, D ELETE THIS ADDITION BECAUSE THE IDENTITY OF THE SHARE HOLDER IS NOT IN DOUBT. THIS GROUND OF THE ASSESSEE IS ALLOWED. 3. KEEPING IN VIEW THE OBSERVATIONS OF THE AFORESAI D ORDER OF THE TRIBUNAL, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION OF RS.9,00,00 0 MADE BY THE ASSESSING OFFICER DESERVES TO BE DELETED, AND THE ORDER OF THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IS UPHELD. ITA NO.635/DEL./2009 (A.Y. : 2003-04) 3 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 5. ORDER PRONOUNCED IN OPEN COURT ON 18.06.2009. (RAJPAL YADAV) (R.P. GARG) JUDICIAL MEMBER SR. VICE PRESIDENT DATED: JUNE 18, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-XIX, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT