BRIGHT METALS INDIA PVT. LTD., Jaipur V. ACIT, Jaipur

MA 58/JPR/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6797 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P R MEENA
• Keywords: Onus to prove
• Section: 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ MA NO. 58/JP/2018 (ARISING OUT OF ITA NO. 702/JP/2014) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 M/S BRIGHT METALS PVT. LTD. F-671, ROAD NO. 9, F-2, VKI AREA, JAIPUR CUKE VS. ACIT, CIRCLE-1. JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACB 9670 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P. C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI P. R. MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 25/05/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 14/06/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E ASSESSEE AGAINST THE ORDER OF COORDINATE BENCH IN ITA NO. 70 2/JP/2014 DATED 24/02/2017. IN ITS PETITION, THE ASSESSEE HAS SUBMI TTED AS UNDER: WITH REFERENCE TO ABOVE, IT IS TO SUBMIT THAT THE HONBLE HIGH COURT IN THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE HONBLE ITAT IN ITA NO. 702/JP/2014 DATED 24.02.2017 HAS GIVEN L IBERTY TO THE ASSESSEE TO MOVE THE TRIBUNAL BY WAY OF APPROPRIATE APPLICATION FOR M.A. NO. 58/JP/2018 M/S BRIGHT METALS PVT. LTD., JAIPUR VS. ACIT, JAIPU R 2 REVIEW OF ITS ORDER PARTICULARLY PARA NOS. 4.5 AND 4.6 OF ITS ORDER. COPY OF THE ORDER IS ENCLOSED. IN THE MATTER, IT IS SUBMITTED THAT THE AO MADE AN ADDITION OF RS. 75,00,000/- U/S 68 OF THE ACT BY NOT ACCEPTING THE GENUINENESS OF THE SHARE CAPITAL AND SHARE PREMIUM RECEIVED FROM F OUR COMPANIES. THE LD. CIT(A) AFTER CONSIDERING THE FACTS OF THE CASE, DOCUMENTS ON RECORD, THE DECISION OF THE HONBLE ITAT IN CASE OF ARL INF RATECH LTD IN ITA NO. 619/JP/2013 AND THE DECISION OF THE HONBLE RAJASTH AN HIGH COURT IN CASE OF CIT VS. BARKHA SYNTHETICS LTD. 182 CTR 175, HELD THAT THE SHAREHOLDERS ARE IDENTIFIED, GENUINENESS OF TRANSAC TION AND CREDITWORTHINESS OF THE SHARE APPLICANT IS ESTABLIS HED AND THUS, DELETED THE ADDITION MADE BY THE AO. AGAINST THIS ORDER, DE PARTMENT FILED AN APPEAL BEFORE THE HONBLE ITAT. THE HONBLE ITAT WHILE SETTING ASIDE THE ORDER OF T HE LD. CIT(A) TO THE FILE OF THE AO TO EXAMINE THE MATTER AFRESH TAKING INTO CONSIDERATION THE LEGAL PROPOSITIONS AS DISCUSSED IN PARA 4.1 TO 4.12 OF ITS ORDER, AT PARA 4.5 AND 4.6 MADE CERTAIN OBSERVATIONS WHICH WERE NO T THE SUBJECT MATTER OF APPEAL BY WAY OF GROUND OR FOUNDATION FOR MAKING THE ADDITION BY THE AO. ACCORDINGLY, THE HONBLE HIGH C OURT HAS GIVEN LIBERTY TO THE ASSESSEE TO MOVE THE REVIEW APPLICAT ION. IN VIEW OF THE ABOVE FINDING OF THE HONBLE HIGH CO URT OF RAJASTHAN, THE ORDER DATED 24.02.2017 PASSED BY THE HONBLE ITAT M AY KINDLY BE RECALLED AND DECIDED AFRESH. M.A. NO. 58/JP/2018 M/S BRIGHT METALS PVT. LTD., JAIPUR VS. ACIT, JAIPU R 3 2. THE HONBLE RAJASTHAN HIGH COURT IN DB APPEAL NO . 180/2017 DATED 03/04/2018 HAS HELD AS UNDER:- 2. SOME OF THE POINTS MENTIONED IN PARAS NOS. 4.5 AND 4.6 OF THE TRIBUNAL ORDER DATED 24.02.2017 ARE REPRODUCED AS U NDER: 4.5 THE DEGREE OF BURDEN OF PROOF ON THE ASSESSEE W ILL VARY FROM ASSESSEE TO ASSESSEE. IN CASE OF PRIVATE LIMIT ED COMPANIES WHERE SHARES ARE ALLOTTED THROUGH PRIVATE PLACEMENT TO PERSONS GENERALLY KNOWN TO DIRECTORS OR SHAREHOLDERS, DIREC TLY OR INDIRECTLY, BURDEN OF PROOF IS ON HIGHER PEDESTAL A S COMPARED TO PUBLIC LIMITED COMPANIES WHERE THE LARGE SCALE SUBS CRIPTION ARE OFFERED THROUGH PUBLIC ISSUE AND SHARES ARE SUBSCRI BED BY GENERAL PUBLIC. IN CASE OF PRIVATE LIMITED COMPANIES, THE C OURTS HAVE LAID DOWN A STRICT APPROACH IN TERMS OF SATISFYING SUCH BURDEN OF PROOF. 4.6 IN CASE OF PRIVATE LIMITED COMPANIES, GENERALLY PERSONS KNOWN TO DIRECTORS OR SHAREHOLDERS DIRECTLY OR INDI RECTLY BUY OR SUBSCRIBE TO SHARES. UPON RECEIPT OF MONEY, THE SHA RE SUBSCRIBERS DO NOT LOSE TOUCH AND BECOME INCOMMUNICADO. CALL MO NEY, DIVIDENDS WARRANTS, ETC. HAVE TO BE SENT AND THE RE LATIONSHIP REMAINS A CONTINUING ONE. THEREFORE, AN ASSESSEE CA NNOT SIMPLY FURNISH SOME DETAILS AND REMAIN QUIET WHEN SUMMONS ISSUED TO SHAREHOLDERS REMAIN UN-SERVED AND UNCOMPLIED. AS A GENERAL PROPOSITION, IT WOULD BE IMPROPER TO UNIVERSALLY HO LD THAT THE ASSESSEE CANNOT PLEAD THAT THEY HAD RECEIVED MONEY, BUT COULD DO NOTHING MORE AND IT WAS FOR THE ASSESSING OFFICE R TO ENFORCE SHAREHOLDERS ATTENDANCE IN SPITE OF THE FACT THAT T HE SHAREHOLDERS WERE MISSING AND NOT AVAILABLE. THEIR RELUCTANCE AN D HIDING MAY M.A. NO. 58/JP/2018 M/S BRIGHT METALS PVT. LTD., JAIPUR VS. ACIT, JAIPU R 4 REFLECT ON THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE SHAREHOLDER. IT WOULD BE AL SO INCORRECT TO UNIVERSALLY STATE THAT AN INSPECTOR MUST BE SENT TO VERIFY THE SHAREHOLDERS/SUBSCRIBERS AT THE AVAILABLE ADDRESSES , THOUGH THIS MIGHT BE REQUIRED IN SOME CASES. SIMILARLY, IT WOUL D BE INCORRECT TO STATE THAT THE ASSESSING OFFICER SHOULD ASCERTAI N AND GET ADDRESSES FROM THE REGISTRAR OF COMPANIES WEBSITE O R SEARCH FOR THE ADDRESSES OF SHAREHOLDERS THEMSELVES. ARE NEVER SUBJECT MATTER OF THE APPEAL BY WAY OF GR OUND OR FOUNDATION AND IN SPITE OF THAT, THE TRIBUNAL HAS DEALT WITH T HOSE CONTENTIONS. THEREFORE, IT WILL BE APPROPRIATE FOR HIM TO MOVE A N APPLICATION BY WAY OF REVIEW BEFORE THE TRIBUNAL IF SUCH CONTENTIONS A RE THERE IN APPEAL. WE GRANT OPPORTUNITY TO THE TRIBUNAL TO MEET OUT TH E PARAS NO. 4.5 & 4.6 OF THE ORDER AS REPRODUCED ABOVE. 3. THE LD DR IS HEARD WHO HAS OPPOSED THE MISC. AP PLICATION SO FILED BY THE ASSESSEE COMPANY. THE LD DR TOOK US THROUGH THE ORDER OF THE COORDINATE BENCH AND SUBMITTED THAT AT PARA 3 ONWAR DS TILL PARA 3.13, THE COORDINATE BENCH HAS REFERRED TO VARIOUS DECISI ONS OF THE HONBLE SUPREME COURT AND VARIOUS HIGH COURTS AND THEREAFTE R, IN PARA 4 ONWARDS INCLUDING PARA 4.5 AND 4.6, IT HAS SUMMARIZ ED AND DISCUSS THE LEGAL PROPOSITION SO LAID DOWN BY THE HONBLE SUPRE ME COURT AND VARIOUS HIGH COURTS AND ARE NOT THE CONTENTIONS SO ADVANCED BY EITHER OF THE PARTIES IN THE CONTEXT OF THE GROUNDS OF APP EAL. IT WAS FURTHER SUBMITTED THAT AS FAR AS THE FINDINGS OF THE COORDI NATE BENCH ARE CONCERNED, THE SAME ARE CONTAINED AT PARA 5 WHEREIN MATTER WAS FINALLY SET-ASIDE TO THE FILE OF THE AO TO EXAMINE THE MATT ER AFRESH TAKING INTO M.A. NO. 58/JP/2018 M/S BRIGHT METALS PVT. LTD., JAIPUR VS. ACIT, JAIPU R 5 CONSIDERATION THE LEGAL PROPOSITION SO DISCUSSED AB OVE AND THE HONBLE HIGH COURT HAS NOT DEALT WITH THE SAID FINDINGS OR HAS NOT ISSUED ANY DIRECTIONS SETTING ASIDE THE MATTER TO THE TRIBUNAL TO EXAMINE THE SAME A FRESH. IT WAS FURTHER SUBMITTED THAT THE POWERS OF THE TRIBUNAL UNDER SECTION 254(2) ARE LIMITED TO THE EXTENT OF RECTIFY ING ANY APPARENT MISTAKE ON THE FACE OF THE RECORD AND THE POWERS AR E NOT EXTENDED TO REVIEW ITS OWN ORDER PASSED BY THE COORDINATE BENCH EARLIER. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. THE LD AR HAS CONTENDED THAT THE COORDINATE BENCH WHILE SETTING ASIDE THE ORDER OF THE LD. CIT( A) TO THE FILE OF THE AO TO EXAMINE THE MATTER AFRESH TAKING INTO CONSIDE RATION THE LEGAL PROPOSITIONS AS DISCUSSED IN PARA 4.1 TO 4.12 OF IT S ORDER, AT PARA 4.5 AND 4.6 MADE CERTAIN OBSERVATIONS WHICH WERE NOT TH E SUBJECT MATTER OF APPEAL BY WAY OF GROUND OR FOUNDATION FOR MAKING TH E ADDITION BY THE AO. ACCORDINGLY, THE HONBLE HIGH COURT HAS GIVEN L IBERTY TO THE ASSESSEE TO MOVE THE PRESENT REVIEW APPLICATION. PE R CONTRA, THE LD DR HAS CONTENDED THAT IN PARA 4.5 AND 4.6 OF THE COORD INATE BENCH DECISION, IT HAS SUMMARIZED AND DISCUSS CERTAIN LEG AL PROPOSITION SO LAID DOWN BY THE HONBLE SUPREME COURT AND VARIOUS HIGH COURTS IN VARIOUS DECISIONS AND THE SAME ARE NOT THE OBSERVATIONS OR THE CONTENTIONS SO ADVANCED BY EITHER OF THE PARTIES IN THE CONTEXT OF THE GROUNDS OF APPEAL. WE HAVE EXAMINED THE ORDER OF THE COORDINAT E BENCH AND FIND FORCE IN THE CONTENTIONS SO ADVANCED BY THE LD DR A S IN PARA 4 INCLUDING PARA 4.5 AND 4.6, THE COORDINATE BENCH HAS DISCUSSE D VARIOUS LEGAL PROPOSITIONS SO LAID DOWN BY THE HONBLE SUPREME CO URT AND VARIOUS HIGH COURTS IN THE CONTEXT OF DISCHARGE OF ONUS AS ENVISAGED UNDER SECTION 68 OF THE ACT. THE SAID LEGAL PROPOSITION IS EMERGING OUT OF M.A. NO. 58/JP/2018 M/S BRIGHT METALS PVT. LTD., JAIPUR VS. ACIT, JAIPU R 6 VARIOUS DECISIONS WHICH HAVE BEEN RELIED UPON BY BO TH THE PARTIES BEFORE THE TRIBUNAL AS SUMMARIZED IN PARA 2.9 AND 2 .11. THEREFORE, IT IS NOT A CASE OF THE ASSESSEE THAT THE LEGAL PROPOS ITION IS EMERGING OUT OF DECISIONS WHICH WERE NOT REFERRED OR RELIED UPON BY THE ASSESSEE OR THE DEPARTMENT. THE HONBLE RAJASTHAN HIGH COURT I N ITS ORDER HAS HELD THAT IT WILL BE APPROPRIATE FOR HIM TO MOVE AN APP LICATION BY WAY OF REVIEW BEFORE THE TRIBUNAL IF SUCH CONTENTIONS ARE THERE IN APPEAL. HOWEVER, AS WE HAVE STATED ABOVE, THESE ARE MERELY LEGAL PROPOSITIONS SO LAID DOWN BY THE COURTS WHICH ARE EMERGING OUT O F THE DECISIONS RELIED UPON BY BOTH THE PARTIES AND HAVE BEEN DISCU SSED BY THE COORDINATE BENCH AND THE MATTER HAS BEEN SET-ASIDE TO THE FILE OF THE AO TO EXAMINE THE SAME AFRESH IN LIGHT OF THE SAID LEGAL PROPOSITIONS. IN THE RESULT, WE DONOT FIND THAT THE DECISION OF THE COORDINATE BENCH CALL FOR ANY INTERFERENCE AND THE PRESENT MISC. APPLICAT ION CALLING FOR REVIEW OF THE ORDER PASSED BY THE COORDINATE BENCH CANNOT THEREFORE BE ENTERTAINED AND IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/06/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14/06/2018. * GANESH KR VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S BRIGHT METALS PVT. LTD., JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE-1, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) M.A. NO. 58/JP/2018 M/S BRIGHT METALS PVT. LTD., JAIPUR VS. ACIT, JAIPU R 7 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { M.A. NO. 58/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR