M/s. V.R. Global Energy Pvt. Ltd., CHENNAI V. ITO, CHENNAI

MA 289/CHNY/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 5073 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 26-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: R VIJAYARAGHAVAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . , ,, , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER M.A. NO. 289/MDS/2016 [IN I.T.A. NO. 871/MDS/2016 ] / // / ASSESSMENT YEAR : 2012-13 M/S. V.R. GLOBAL ENERGY PVT. LTD., (FORMERLY KNOWN AS TTG CONSOLIDATES PVT. LTD.) NO.5, T.V. STREET, CHETPET, CHENNAI 600 031. PAN : AABCT3716E V. THE INCOME TAX OFFICER, CORPORATE WARD 3(4), CHENNAI 600 034. ( APPLICANT) ( / RESPONDENT) APPLICANT BY : SHRI R. VIJAYARAGHAVAN, ADVOC ATE RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT / DATE OF HEARING : 30.12.2016 / DATE OF PRONOUNCEMENT : 30.12.2016 / // / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THE ASSESSEE FILED THE PRESENT MISCELLANEOUS PETI TION ON THE GROUND THAT THERE IS AN ERROR IN THE ORDER OF THIS TRIBUNAL. 2 M.A. NO. 289/MDS/2016 2. SHRI R. VIJAYARAGHAVAN, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SHARES WERE ALLOTTED AGAINST THE LIA BILITY THAT HAS ACCRUED TO THE ASSESSEE ON ACCOUNT OF TRANSFER OF A SSETS BEING RECEIVABLES AND PREFERENCE SHARES OF EQUAL VALUE. ACCORDING TO THE LD. COUNSEL, THE ASSETS ARE TRANSFERRED TO THE COMP ANY BY THE RESPECTIVE SHAREHOLDERS. THE INCREASE IN ASSET OF THE COMPANY BY WAY OF RECEIVABLE AND INVESTMENTS WAS RECORDED IN T HE BALANCE SHEET. ACCORDING TO THE LD. COUNSEL, ALLOTMENT OF SHARE WAS NOTHING BUT SETTLEMENT OF REAL LIABILITY, WHICH CAN BE EXPLAINED AS ARISING OUT OF TRANSFER OF EQUAL VALUE OF RECEIVABL ES AND SHARES. IN FACT, SHARES WERE ALLOTTED IN PROPORTION TO THE VAL UE OF THE ASSETS BROUGHT IN. ACCORDING TO THE LD. COUNSEL, THE LIAB ILITY OF THE COMPANY WHICH WAS CONVERTED IN TO SHARE CAPITAL, TO THREE PERSONS WAS GENUINE. THEREFORE, IT CANNOT BE SAID THAT IT IS COLOURABLE DEVICE. 3. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT THIS TRIBUNAL EXAMINE D THE ENTIRE FACTS OF THE CASE AND FOUND THAT FOR REVALUATION, T HE NET WORTH OF THE COMPANY HAS TO BE EXAMINED. THIS TRIBUNAL FOUND T HAT HOW SHARES WAS REVALUED AT 5400/-. AFTER REFERRING TO THE AGREEMENT BETWEEN 3 M.A. NO. 289/MDS/2016 THE ASSESSEE AND M/S. SHRIRAM AUTO FINANCE AND ONE MRS. VATHSALA RANGANATHAN, THIS TRIBUNAL FOUND THAT THES E AGREEMENTS ARE ONLY COLOURABLE DEVICE, DEVICED BY THE ASSESSEE TO REDUCE THE TAX LIABILITY. THIS TRIBUNAL SPECIFICALLY FOUND T HAT BY WAY OF INTRODUCING CASH CREDIT IN THE NAME OF SHARE PREMIU M AND SHARE CAPITAL, THE ASSESSEE COMPANY IS MAKING ATTEMPT TO REDUCE THE TAX LIABILITY. THEREFORE, THE ADDITION MADE BY THE AS SESSING OFFICER WAS RIGHTLY CONFIRMED BY THIS TRIBUNAL. HENCE, THERE IS NO ERROR IN THE ORDER OF THIS TRIBUNAL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY, THERE WAS A CREDIT ENTRY IN THE BOOKS OF ACCOUNTS TO THE EXTENT OF 90.18 LAKHS. THE ASSESSEE CLAIMED BEFORE THE AUTHORITIES THAT 90.18 LAKHS WAS THE SHARE PREMIUM AND SHARE CAPITAL WAS 16.70 LAKHS. THE ASSESSEE ALSO CLAIMED BEFORE THE ASSESSING OFFICER THAT THE SHARES WERE REVALUED AT 5,400/-. IN FACT, THE FACE VALUE OF THE SHARES ARE 10/- PER SHARE. AFTER REFERRING TO THE AGREEMENT BETWEEN THE ASSESSEE AND M/S. SHRIRAM AUTO FINANCE AND ONE MRS. VATHSALA RANGANATHAN WITH M/S. CARCARE AND M/S. VRONE ENERGY PVT. LTD. AND M/S. TRILOK VINCOM PVT. LTD., THIS TRIBUNAL FOU ND THAT THIS IS 4 M.A. NO. 289/MDS/2016 NOTHING BUT THE COLOURABLE DEVICE TO REDUCE THE TAX LIABILITY OF THE ASSESSEE. 5. NOW, THE ASSESSEE CLAIMS THAT THE LIABILITY OF T HE COMPANY WAS CONVERTED IN TO SHARE CAPITAL TO THREE PERSONS. THIS WAS EXAMINED BY THIS TRIBUNAL IN DETAIL AND FOUND THAT THERE WAS A COLOURABLE DEVICE TO REDUCE THE TAX LIABILITY. THE REFORE, REEXAMINING THE MATTER WOULD AMOUNT TO REVIEW OF THE EARLIER OR DER. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS TRI BUNAL IS EMPOWERED TO RECTIFY THE PRIMA FACIE ERROR WHICH IS APPARENT FROM THE RECORD. HOWEVER, IT HAS NO AUTHORITY TO REVIE W ITS EARLIER ORDER. THE CLAIM MADE BY THE ASSESSEE WOULD AMOUNT TO REVI EW OF THE EARLIER ORDER WHICH IS NOT PERMISSIBLE UNDER THE SC HEME OF THE INCOME TAX ACT. THEREFORE THIS TRIBUNAL DO NOT FI ND ANY ERROR MUCH LESS PRIMA FACIE ERROR IN THE ORDER DATED 01.09.2006. HENCE THERE I S NO MERIT IN THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE. 6. THEREFORE THE MISCELLANEOUS PETITION FILED BY T HE ASSESSEE IS DISMISSED. 5 M.A. NO. 289/MDS/2016 ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2016 AT CHENNAI. SD/- SD/- ( . ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, /DATED, THE 30 TH DECEMBER, 2016. JR. !' /COPY TO: 1. APPLICANT 2. /RESPONDENT 3. #$% ( ) /CIT(A) 4. #$% /CIT, 5. /DR 6. &' /GF.