NUCLEOTECH MEDICAL SYSTEM INTERNATIONAL LTD, NAVI MUMBAI V. ITO WD 3, PANVEL

ITA 7704/MUM/2010

• Counselvise Citation: 770419914 RSA 2010
• Duration Of Justice: 4 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-07-2015
• Assessment Year: misc
• Appeal Filed On: 10-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESH KAMAT SR
• Assessee Lawyers: DEEPAK TRALSAWALA
• Keywords: Revised return
• Section: 54

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,MUMBAI - B,BENCH , , BEFORE S/SH. JOGINDER SINGH,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 7704 /MUM/201 0 , / ASSESSMENT YEAR - 200 7 - 08 NUCLEOTECH MEDICAL SYSTEM INTERNATIONAL LIMITED, PL. NO.55, NEW CHEMICAL ZONE - MIDC TALOJA NAVI MUMBAI - 410 208. PAN:AACCN 4703 C VS IN COME TAX OFFICER - 3 PANVEL. ( / A PPELLANT ) ( / RESPONDENT ) /ASSESSEE BY :SHRI DEEPAK TRALSAWALA / REVENUE BY :SHRI YOGESH KAMAT - SR. AR / DATE OF HEARING : 01 - 07 - 2015 / DATE OF PRONOUNCEMENT : 14 - 08 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.30.07.2010 OF CIT(A) - I, THE ASSESSEE, HAS RAISED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND CIRCUMST ANCES OF THE CASE AND IN LAW, THE LD COMMISSIONER OF INCOME TAX (A) - I. THANE, ERRED IN I. UPHOLDING IN THE HANDS OF THE ASSESSEE - COMPANY THE ADDITION U / S . 68 OF RS. 53,51,000 / - AS CASH CREDIT, ON THE GROUND THAT THE SOURCE OF CASH SUBSCRIPTION BY V ARIOUS PERSONS TO THE SHARES OF THE ASSESSEE - COMPANY WAS NOT EXPLAINED, IGNORING THAT THE LD ASSESSING OFFICER HAS HIMSELF MENTIONED AT PAGE 2 OF THE ASSESSMENT ORDER THE NAMES AND THE PAN OF MOST OF THE SHAREHOLDERS . II. UPHOLDING IN THE HANDS OF THE ASSESSEE - COMPANY THE ADDITION U . S . 68 OF RS. 53,51,000 / - AS CASH CREDIT, WITHOUT VERIFYING THE IDENTITY, GENUINENESS AND THE CREDIT - WORTHINESS OF THE SHAREHOLDERS DESPITE THE ASSESSEE- COMPANY HAVING FILED THE DETAILS OF THE SHAREHOLDERS, AND III. GIVIN G NEEDLESS AND UNNECESSARY COGNIZANCE TO THE VALUE OF RS.59,50,000 / - AS ALLEGED SALE CONSIDERATION OF THE SALE OF THE TURBHE , NAVI MUMBAI PROPERTY OF THE DIRECTOR SHRI ARUN KUMAR SAXENA WHEN THE JOINT SUB - REGISTRAR, THANE, HAD ASSESSED THE MARKET VALUE OF THE SAID PROPERTY AT RS. 7,50,000 / - , AND WHICH VALUE OF RS. 59,50,000 / - THE LD ASSESSING OFFICER HIMSELF HELD WAS A 'CONCOCTED STORY' AT PAGE 5 OF THE ASSESSMENT ORDER. THE ASSESSEE - COMPANY CRAVES LEAVE TO ADD, ALTER, MODIFY OR DELETE THE ABOVE G ROUND OF APPEAL. ASSESSEE - COMPANY , ENGAGED IN THE BUSINESS OF MANUFACTURING OF X - RAY SYSTEM UNDER LICENCE FROM BARC ,FILED ITS RETURN OF INCOME ON DECLARING INCOME OF RS. . THE ASSESSING OFFICER (AO)COMPLETED THE ASSESSMENT U/S.143(3)OF THE ACT ON DE TERMINING ITS INCOME AT RS. / - . 2. EFFECTIVE GROUND OF APPEAL IS ABOUT . DURING ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE RECEIVED RS 70,00,000/ - TOWARDS ISSUE OF SHARE CAPITAL AND RS 27,00,000/ - AS SHARE APPLICATION MONEY FROM 20 PARTIES ,THA T T HE AMOUNT OF SHARE CAPITAL AND SHARE APPLICATION MONEY WAS RECEIVED PARTLY IN CASH AND PARTLY BY CHEQUE AS UNDER : - PARTICULARS AMOUNT RECEIVED THROUGH CHEQUE AMOUNT RECEIVED IN CASH TOTAL SHARE APPLICATION MONEY 11,70,000/ - 15,30,0 00/ - 27,00,000/ - SHARE CAPITAL 38,21,000/ - 31,79,000/ - 70,00,000/ - 7704 /M/1 0 - NUCLEOTECH MEDICAL (AY:0 7 - 08 ) 2 DETAILS OF MONE Y RECEIVED BY THE ASSESSEE FROM EACH OF THE SHAREHOLDER/ SHARE APPLICANT CAN BE SUMMARISED AS UNDER : - S N. A PPLICANT/ SHAREHOLDER PAN SHARE APPLICATION MONEY S HARE CAPITAL CASH CHEQUE CASH CHEQUE 1 DR GOPALDAS SAKSENA AAUPS0809D 1,30,000 3,00,000 1,000 2 DR. MADHAVDAS SAKSENA AARPS8676F 2,00,000 3 DR VARSHA SAXENA ARBPS5661H 175000 125000 100000 4 MR ABHINAV SAKSENA AGSPS9973Q 90000 450000 3 80400 60000 5 MR AMALTASH SAKSEAN BKQPS8501P 480000 130000 470000 6 MR AMITAHBHSAKSENA APLPS2342F 233000 125000 100000 7 MR ARUNKUMAR SAKSENA ARXPS3935J 350000 455000 145000 8 MR DHAWAL SAKSENA AUVPS0357H 317000 150000 9 MR B N KARKERA PASSP ORT NO E676487 1000 10 MR. KIRTI PATEL ACJPP0964D 14000 11 MR MANISH SRIVASTAVA AWVPS2633Q 250000 250000 12 MR SAHARD SAKSENA DLNO 156393 22500 321600 40000 13 MR SHUBHAM SRIVASTAVA BJWPS9949A 350000 150000 14 MR SAYED AHMED SAYED AWTPS 3114L 100000 400000 15 SMT BARKHA SAKSEAN PASSPORT NO 1335659 20000 300000 100000 16 SMT MANJU SAKSENA AAOPS6795C 42500 17 SMT MANJULA SAKSENA AMRPS8074P 1000000 400000 18 SMT REENA SAKSENA BNJPS9995R 400000 100000 19 SMT RITA SAKSENA VITER CARD NO FPP 4811626 40000 20 SMT SUMAN SAKSENA BACPS6375M 470000 662000 TOTAL 15,30,000 11,70,000 38,21,000 31,79,000 TOTAL 27,00,000/ - 70,00,000/ - THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCES OF CASH INTRODUCED BY THE SHAREHOLDE RS AS MOST OF THEM WERE THE FAMILY MEMBERS OF THE PROMOTER DIRECTORS . O N 30/12/2009 IT WAS SUBMITTED BY ARUN SAKSENA , ONE OF THE DIRECTOR OF THE COMPANY THAT CASH A MOUNT ING TO RS 53, 51,000/ - HAD BEEN DEPOSITED BY HIM ON BEHALF OF ALL THE ABOVE LISTED PERS ONS . HE ALSO NARRATED THE SOURCES OF THE CASH STATING THAT HE HAD RECEIVED CASH ON SALE OF A PROPERTY ON 17/4/ 2007 ,THAT THE REGISTERED VALUE OF THE PROPERTY WAS RS 7,50,000/ - ,THAT SAME WAS RECEIVED BY CHEQUE ,THAT HE HAD ALSO RECEIVED RS. 5 2 ,50,000/ - IN CA SH ON SALE OF THAT PROPERTY FROM THE BUYER , THAT TH E AMOUNT RECEIVED IN CASH WAS INTRODUC ED IN FORM OF SHARE APPLICATION AND SHARE CAPITAL, THAT THE PROPERTY IN QUESTION WAS IN THE PRIME AREA .THE ASSESSEE SUBMITTED COPY OF REVISED RETURN OF ARUN SAKSENA FI LED ON 19/12/2009 WHERE IN ON SALE OF THE ASSETS A CAPITAL GAIN OF RS 33 , 7 1,920 / - WAS SHOWN AND THEN CLAIM OF EXEMPTION U/S 54 OF THE WHOLE OF THE CAPITAL GAIN WAS CLAIMED . T HE AO ,AFTER CONSIDERING THE SUBMISSION, HELD THAT ARUN SAKSENA HAD NOT DISCHARGED T HE ONUS , THAT THE MYSTERY SHROUDING IN INTRODUC ING THE CASH BY THE SHAREHOLDERS REMAIN ED UNSOLVED . HE FURTHER OBSERVED THAT IT WAS THE LAST DAY OF TIME BARRING CASES FOR TH AT YEAR ,THAT FURTHER INQUIRY WAS NOT POSSIBLE .FINALLY,HE HELD THAT THE ASSESSEE HAD A LSO NOT DISCHARGE D ITS ONUS AND AN ADDITION OF RS. 53,51,000/ - U/S 68 OF THE ACT WAS MADE. 3 . AGGRIEVED BY THE ORDER OF THE AO,THE A SSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).HE HELD THAT THE PROPERTY OF ARUN SAKSENA WAS SOLD ON 30.05.2007 ,THAT THE SALE - PROCEEDS WOULD BE AVAILABLE IN AY . 2008 - 09 , THERE WA S NO CORRELATION BETWEEN THE SOURCE OF MONEY AND THE DEPOSITS IN THE BOOKS OF THE COMPANY ,THAT THE SALE DEED ALSO D ID NOT SHOW ANY CASH COMPONENT .FINALLY,HE CONFIRMED THE ADDITI ON MADE BY THE AO. 4. BEFORE US,THE AUTHORISED REPRESENTATIVE(AR)CONTENDED THAT NAMES AND PAN OF THE MOST OF SHAREHOLDERS WERE SUBMITTED BEFORE THE A O , IT HAD ALSO SHOWED THE AMOUNT RECEIVED IN CASH 7704 /M/1 0 - NUCLEOTECH MEDICAL (AY:0 7 - 08 ) 3 IN CASHBOOK OF THE COMPANY AND CHEQUE RECEIVED IN THE BANK BOOK OF THE COMPANY , THAT THE ASSESSEE HAD DISCHARGED ITS ONUS,THAT HE MADE THE ADDITION WITHOUT VERIFYING THE GENUINENESS AND THE CREDIT WORTHINESS OF THE SHAREHOLDERS ,THAT THE AO HAD DISBELIEVED THE SUBMISSIONS MADE BY THE ASSESSEE WITH REGARD TO RECE IPT OF CASH . HE REFERRED TO THE PAPER BOOK WHEREIN SOME OF THE CONFIRMATIONS WERE AVAILABLE.THAT THE AO DID NOT MAKE ANY VERIFICATION OF THE FACTS OF THE CASH DEPOSITED IN THE COMPANY. HE FURTHER RELIED ON THE FOLLOWING DECISION OF DWARKADHISH INVESTMENTS PRIVATE LIMITED ( 330 ITR 298 ) AND ORISSA CORPORATION ( 159 ITR 78 ) .DEPARTMENTAL REPRESENTATIVE(DR)ARGUED THAT THE ASSESSEE HAD FAILED TO SUBMIT PROPER CONFIRMATION OF THE SHAREDEPOSITORS EVEN WHEN PART OF THEM HA D DEPOSITED MONEY IN CASH AND PART IN CHEQ UE ,THAT MOST OF THE DEPOSITORS WE RE FAMILY MEMBER OF THE DIRECTORS OF THE COMPANY , THAT VERSION OF THE STORY OF THE DIRECTOR C OULD NOT BE ACCEPTED AS THE CASH WAS INTRODUCED IN EARLIER YEAR AND PROPERTY WAS SOLD IN THE LATER YEAR. 5. WE HAVE CAREFULLY CONS IDERED THE RIVAL SUBMISSIONS AS WELL AS THE VARIOUS DOCUMENTS PLACED BEFORE US . IT IS A FACT THAT ASSESSEE HAD REC EIVED AMOUNT OF RS 70,00,000/ - TOWARDS SHARE CAPITAL AND RS 27,00,000/ - TOWARDS SHARE APPLICATION MONEY FROM 20 MEMBERS ,THAT O UT OF TH AT THE AS SESSEE HAD ACCEPTED RS 15,30,000/ - TOWARDS SHARE APPLICATION MONEY AND RS 38, 21,000/ - TOWARDS SHARE CAPITAL IN CASH . IT IS APPARENT THAT MOST OF THE DEPOSITORS ARE THE FAMILY MEMBERS OF THE PROMOTER DIRECTORS OF THE COMPANY ,THAT SOME OF THEM POSSESS PAN ,TH AT M OST OF THE DEPOSITORS HAVE DEPOSITED SOME AMOUNTS IN CHEQUE AS WELL AS SOME AMOUNTS IN CASH EXCEPT IN CASE OF DEPOSITORS LISTED AT SR NO 16 AND 19 . IN CASE OF MONEY RECEIVED FROM SAME DEPOSITORS WHO PAID IN CASH AS WELL AS THROUGH CHEQUE,THE AO HAD ACCE PTED DEPOSITS ACCEPTED BY CHEQUE AS GENUINE.HOWEVER,HE DISPUTED THE AMOUNTS RECEIVED IN CASH. IN OUR OPINION, THE AO HAD ACCEPTED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION OF THE AMOUNTS, REPRESENTED BY CHEQUE S.IT IS ALSO A FACT THAT IN MO ST OF THE CASES THE ASSESSEE HAD SUBMITTED THE PAN OF THOSE DEPOSITORS .THEREFORE, IT CAN SAFELY PRESUMED THAT THE IR RECORDS ARE AVAILABLE AND SAME CAN BE VERIFIED .R EASONS OF ACCEPTING CASH AND CHEQUE WERE NOT OBTAINED BY AO. IN THIS CASE, THE A O HAD DESPIT E HAVING THE DETAILS OF DEPOSIT ORS DID COULD NOT MAKE ANY VERIFICATION OF THOSE LOANS . PERHAPS IT WAS BECAUSE OF PAUCITY OF TIME AVAILABLE TO HIM.HE HAD NOT MADE ANY INQUIRY ABOUT THE SALE OF PROPERTY BY ONE OF THE DIRECTORS.NOTHING WAS BROUGHT ON RECORD ABO UT THE FATE OF REVISED RETURN FILED BY THE DIRECTOR .IT IS FOUND THAT THE AO HAD CLEARLY MENTIONED THAT BECAUSE OF PRESSURE OF TIME BARRING ASSESSMENTS HE WAS NOT ABLE TO MAKE VERIFICATION. BUT,WHILE DECIDING THE APPEAL THE FAA DID NOT CALL FOR A REMAND REP ORT, EVEN AFTER KNOWING THE FACT THAT THE ASSESSEE HAD PLACED NEW EXPLANATION IN THE LAST DAYS OF ASSESSMENT PROCEEDINGS.CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONSIDERATION WE ARE OF THE OPINION THAT THE MATTER NEEDS FURTHER VE RIFICATION. SO ,IN THE INTEREST OF JUSTICE,WE ARE RESTORING THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION. HE WOULD AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSEE WOULD EXTEND FULL COOPERATION TO THE AO WELL WITH IN TIME . EFFECTIVE GROUND OF APPEAL IS STATISTICALLY ALLOWED. IN THE RESULT, A PPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. . ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST,2015. 14 TH , 2015 SD/ - SD/ - ( / JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 14 .08.2015 . . . JV .SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 7704 /M/1 0 - NUCLEOTECH MEDICAL (AY:0 7 - 08 ) 4 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR B BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.