Shri Venkateswara Sponge & Power Private Limited , Chittoor V. Asst. Commissioner of Income Tax, Circle-2(1), Tirupati

ITA 72/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0697 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 19-05-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 21-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 72/HYD/2019 ASSESSMENT YEAR: 2012-13 SHRI VENKATESWARA SPONGE & POWER PRIVATE LIMITED, SRI KALAHASTI [PAN: AAICS1087L] VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(1), TIRUPATI (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI SUNIL KUMAR JAIN, AR FOR REVENUE : SHRI SUNKU SRINIVASU, DR DATE OF HEARING : 19-05-2021 DATE OF PRONOUNCEMENT : 15-07-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2012-13 ARISES FROM TH E CIT(A)-TIRUPATIS ORDER DATED 21-11-2018 PASSED IN A PPEAL NO.CIT(A), TIRUPATI/10141/2017-18, IN PROCEEDINGS U/ S.143(3) R.W.S.263 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE A CT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE RAISED I N THE INSTANT APPEAL CHALLENGES CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION TREATING ITS SHARE APPLICATION MONEY OF RS.3,79,00,000/- AS UN-EXPLAINED CASH CREDITS U/S.6 8 OF THE ITA NO. 72/HYD/2019 :- 2 -: ACT. THE CIT(A)S DETAILED DISCUSSION TO THIS EFFECT RE ADS AS UNDER: 5. ALL THE GROUNDS OF APPEAL ARE AGAINST THE ADDIT ION OF RS.3,79,00,000/- U/S.68 OF THE I.T. ACT. THE AO TRE ATED AN AMOUNT OF RS.3.79 CRORES AS UNEXPLAINED FOR WANT OF DOCUMENTA RY PROOF FOR THE CLAIM OF GENUINENESS OF THE AMOUNT RECEIVED AS SNAR E APPLICATION MONEY DURING THE YEAR FROM M/S.REGENT BUSINESS PVT. LTD, A COMPANY LOCATED IN KOLKATA. THE APPELLANT DID NOT P ROVIDE CREDIBLE AND SATISFACTORY DOCUMENTARY EVIDENCE TO PROVE THE CREDIT WORTHINESS OF THE SUBSCRIBER OF THE SHARES. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT VIDE LETTER DA TED 15.11.2018 TRIED TO SUBMIT CONFIRMATION FROM MR.UTTAM KUMAR TI WARI, DIRECTOR OF M/S.REGENT BUSINESS PVT. LTD., AND BALANCE SHEETS F ROM AY 2012-13 TO AY 2017-18 AND BANK STATEMENT OF M/S.REGENT BUSI NESS PVT. LTD., FOR AY 2012-13, AND REQUESTED TO CONSIDER UNDER RUL E 46A OF THE IT RULES. NOW THE QUESTION IS WHY THE APPELLANT DID NO T GET ANY CONFIRMATION FROM UTTAM KUMAR TIWARI DURING THE COU RSE OF ASSESSMENT PROCEEDINGS. NO REASONS WERE CITED FOR N ON-SUBMISSION OF DETAILS BEFORE AO. IT WAS STATED BY AR OF THE AP PELLANT THAT THE MONEY RECEIVED TOWARDS SHARE APPLICATION WAS NOT UT ILIZED TOWARDS ISSUE OF SHARES. IT WAS FURTHER STATED BY THE AR O F THE APPELLANT THAT THE MONEY RECEIVED IS PENDING FOR ALLOTMENT OF SHAR ES EVEN TODAY. THE MONEY WAS ALSO NOT RE-PAID TO THE SO CALLED SUB SCRIBER OF THE SHARE EVEN AFTER CONSIDERABLE LAPSE OF TIME. THERE FORE, I CONCUR WITH THE VIEW OF THE AO THAT THE CREDIT WORTHINESS OF TH E M/S.REGENT BUSINESS PVT. LTD., IS NOT ESTABLISHED. THE LETTER OF CONFIRMATION AND BALANCE SHEETS SUBMITTED DURING THE APPELLATE PROCE EDINGS, WITHOUT CREDIBLE REASONS FOR NON-SUBMISSION OF THE SAME BEF ORE AO, IS NOT ADMITTED UNDER RULE 46A OF THE I.T. RULES. THEREFOR E, I CONFIRM THE ADDITION MADE BY THE AO TREATING THE SAME AS UNEXPL AINED. 3. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED BOTH THE LOWER AUTHORITIES ACTION MAKING TH E IMPUGNED ADDITION QUA ASSESSEES SHARE CAPITAL COMING FROM M/S.REGENT BUSINESS PRIVATE LIMITED. HE FAILS TO DISPUTE THE CLINCHING FACT THAT THE ASSESSEES CASE AS PER ITS STATEM ENT OF FACTS FILED BEFORE THE CIT(A) WAS THAT THE SAID INVESTOR ENTITY WAS IN FACT ITS GROUP ENTITY HAVING COMMON DIRECTOR(S) AND THE SAME ADDRESS AS WELL. THE SAME HAS NOWHERE BEEN CO NSIDERED EITHER IN THE COURSE OF ASSESSMENT OR IN THE CIT(A)S ORDER. THE ITA NO. 72/HYD/2019 :- 3 -: FACT ALSO REMAINS THAT THE ASSESSEE HAS NOT PROVED GENUINENESS/CREDITWORTHINESS OF ITS GROUP CONCERN BY FILING ALL THE NECESSARY DETAILS. 4. FACED WITH THIS SITUATION, LEARNED AUTHORISED REPRESENTATIVE UNDERTAKES TO PRODUCE THE INVESTOR PARTY HEREIN ABOVE AT ASSESSEES RISK AND RESPONSIBILITY ONLY IF IT IS AFFORDED ONE MORE INNINGS BEFORE THE ASSESSING OFFICER. 5. WE FIND MERIT IN ASSESSEES CONTENTIONS. MORE SO I N VIEW OF THE FACT THAT ITS INVESTOR ENTITY PRIMA FACIE APPEARS AS A GROUP COMPANY ONLY WHICH HAD ESCAPED THE CONSIDERATIO N OF LEARNED LOWER AUTHORITIES. WE THEREFORE RESTORE THE INS TANT SOLE ISSUE BACK TO THE ASSESSING OFFICER FOR HIS FRESH AD JUDICATION AS PER LAW. THE ASSESSEE OR ITS AUTHORISED REPRESENTA TIVE SHALL APPEAR BEFORE THE ASSESSING OFFICER ON OR BEFORE 30- 11-2021 AND SHALL FILE ALL THE NECESSARY DETAILS OF INVESTOR E NTITY AT ITS OWN RISK AND RESPONSIBILITY TO BE FOLLOWED BY THREE EFFECTIVE OPPORTUNITIES OF HEARING. 6. THIS ASSESSEES APPEAL IS TREATED AS ALLOWED FOR S TATISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.GO DARA) ACCOUNTANT MEMBER JUDICIAL MEMB ER HYDERABAD, DATED: 15-07-2021 TNMM ITA NO. 72/HYD/2019 :- 4 -: COPY TO : 1.SHRI VENKATESWARA SPONGE & POWER PRIVATE LIMITED, 310/B, MERLAPAKAVILLAGE, YERPEDU, SRI KALAHASTI, CH ITTOOR DIST., A.P. 2.THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE-2(1), TIRUPATI. 3.CIT(APPEALS)-TIRUPATI. 4.PR.CIT-TIRUPATI. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.