ITO, New Delhi V. M/s. Manda Fininvest Ltd., Delhi

ITA 929/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3545 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 05-07-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 05-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR

Judgement Text

ITA NO. 929/DEL/2010 AND CO NO. 221/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 929/DEL/2010 A.YRS. : 2000-01 INCOME TAX OFFICER, WARD 6(1), NEW DELHI ROOM NO. 418A, C.R. BUILDING, NEW DELHI 110 002 VS. M/S MADA FININVEST LIMITED, 100/28, RAJPUR, SECTOR-9, ROHINI, DELHI 110 085 (PAN/GIR NO. : AAACM0128J) AND C.O. NO. 221/DEL/2010 (IN ITA NO. 929/ DEL/2010) A.Y. 2000-01 M/S MADA FININVEST LTD., VS. INCOME TAX OFFICER, 100/28, RAJPUR, SECTOR-9, WARD 6(1), ROHINI, DELHI 110 085 NEW DELHI (PAN. : AAACM0128J) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSEESSEE BY : SH. AJAY WADHWA, CA DEPARTMENT BY : DR. B.R.R. KUMAR, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE EMANATE OUT OF ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) DATED 02.12.2009 AND PERTAIN TO ASSESSMENT YEAR 20 00-01. REVENUES APPEAL 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF ` 12,50 ,000/- LEVIED BY THE ASSESSING OFFICER U/S. 68 OF THE IT ACT. ITA NO. 929/DEL/2010 AND CO NO. 221/DEL/2010 2 3. IN THIS CASE ASSESSING OFFICER NOTED THAT ASSE SSEE HAS RECEIVED SHARE APPLICATION MONEY FROM FOLLOWING PARTIES:- NAME OF THE COMPANY NAME OF THE COMPANY NAME OF THE COMPANY NAME OF THE COMPANY AMOUNT AMOUNT AMOUNT AMOUNT M/S GANGA INFIN PVT. LTD. ` 1,00,000/- M/S ONYX EXIM & SALES PVT. LTD. ` 5,00,000/- M/S CHANGIA STEELS PVT. LTD. ` 6,50,000/- 3.1 ASSESSING OFFICER FURTHER NOTED THAT ASSESSEE WAS ASKED TO PRODUCE THE DIRECTORS OF THESE COMPANIES, ALONGWITH DOCUMENTARY EVIDENCE TO PROVE THEIR CREDENTIALS. THE SAME WAS NOT COMPLIED WITH. CONSIDERING THE ABOVE, ASSESSING OFFICER HELD THAT ASSESSEE HAS FAILED TO DISCHARGE THE ONUS AND THE ABOVE AMOUNT WAS LEVIE D U/S 68 OF THE IT ACT. ACCORDINGLY, HE ADDED ` 12,50,000/- U/S 68 OF THE IT ACT. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT ASSESSEE DURING THE COURSE OF PROCEEDINGS FURNISHED ALL THE NECESSARY AND RELEVANT DOCUMENTS LIKE CONFIRMATIONS, APPLICATION FOR ALLOTMENT OF SHARES, BANK STATEMENT , ACKNOWLEDGEMENT OF ITR, IDENTITY PROOF FROM ALL THREE SHARE APPLICAN TS FOR SHARE CAPITAL. HENCE, HE HELD THAT ASSESSEE COMPANY HAS DISCHARGED ITS PRELIMINARY ONUS IT TO PROVE THE IDENTITY, CREDITWORTHINESS A ND GENUINENESS OF THE TRANSACTIONS. LD. COMMISSIONER OF INCOME TAX (APPEA LS) FURTHER PLACED RELIANCE OF THE HONBLE APEX COURT DECISION IN THE CASE OF LOVELY EXPORTS AND HELD THAT ASSESSING OFFICER IS DIRECTED TO DELTE THE ADDITION. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. ITA NO. 929/DEL/2010 AND CO NO. 221/DEL/2010 3 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT A SSESSEE IN THIS CASE HAS GIVEN ALL THE INFORMATION, CONFIRMATIONS OF SHARE APPLICANTS, BANK STATEMENT, ACKNOWLEDGEMENT OF ITR TO PROVE THE IDENTITY OF THE SHARE APPLICANTS. ASSESSING OFFICER HAS NOT MA DE ANY INVESTIGATION OR ENQUIRY IN THIS REGARD. IN OUR CONSIDERED OPI NION, ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE I S QUITE REASONABLE. 6.1 IN THIS REGARD, WE PLACE RELIANCE OF THE HONBL E APEX COURT DECISION DELIVERED IN THE CASE OF CIT VS. LOVELY E XPORTS 216 CTR 195. IN THIS CASE IT WAS HELD THAT IF THE SHARE APPLICAT ION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLD ERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE D EPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS I N ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 6.2 ON EXAMINING THE PRESENT CASE ON THE ANVIL OF T HE ABOVE SAID HONBLE APEX COURT DECISION, WE FIND THAT THE IDENT ITY OF THE SHARE HOLDERS HAS BEEN ESTABLISHED AND ASSESSING OFFICE R HAS NOT MADE ANY FURTHER ENQUIRY. MOREOVER ALL THE SHARE HOLDE RS ARE INCOME TAX ASSESSEES. HENCE, IN THIS BACKGROUND PLACING RELIAN CE OF THE HONBLE APEX COURT DECISION AS ABOVE, WE FIND THAT THERE IS NO INFIRMITY OR ILLEGALITY IN THE ORDER OF THE LD. COMMISSIONER OF I NCOME TAX (APPEALS), ACCORDINGLY, WE UPHOLD THE SAME. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ITA NO. 929/DEL/2010 AND CO NO. 221/DEL/2010 4 ASSESSEES CROSS OBJECTION 8. IN THE CROSS OBJECTION ASSESSEE HAS RAISED THE GR OUND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIE D IN HOLDING THE REOPENING OF THE ASSESSMENT U/S 147/148 IS VALID. 9. WE FIND THAT WE HAVE ALREADY DISMISSED THE REVE NUES APPEAL ON THE MERITS IN THIS CASE. HENCE, THE CROSS OBJE CTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS. ACCORDINGLY, WE DI SMISS THE SAME AS INFRUCTUOUS. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/7/2011. SD/- SD/- [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE:- 08/7/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES