M/s Rukmani Amusement Ltd, v. The Acit 3 (1),

CO 54/IND/2008 | 2000-2001
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 5422723 RSA 2008
Assessee PAN AABCR8389R
Bench Indore
Appeal Number CO 54/IND/2008
Duration Of Justice 3 year(s) 11 day(s)
Appellant M/s Rukmani Amusement Ltd,
Respondent The Acit 3 (1),
Appeal Type Cross Objection
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 22-07-2011
Assessment Year 2000-2001
Appeal Filed On 11-07-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH J.M. AND SHRI R.C.SHARMA A.M. PAN NO. : AABCR8389R I.T.A.NO. 255 / IND /2008 A.Y. : 2000 - 01 ACIT M/S. RUKMANI AMUSEMENTS LIMITED 3(1) VS 56 1 ST FLOOR NEHRU MARKET BHOPAL. 10 NO. BUS STOP ARERA COLONY BHOPAL. APPELLANT RESPONDENT C.O.NO.54/IND/2008 (ARISING OUT OF I.T.A.NO. 255/IND/2008) A.Y.: 2000 - 01 M/S. RUKMANI AMUSEMENTS LIMITED ACIT 56 1 ST FLOOR NEHRU MARKET VS 3(1) 10 NO. BUS STOP ARERA COLONY BHOPAL. BHOPAL. APP LICANT RESPONDENT APP LICANT BY : SHRI ARUN DEWAN SR. DR RESPONDENT BY : S/ SHRI M.C.MEHTA AND HITESH CHIMNANI CAS - : 2 : - 2 O R D E R PER R. C. SHARMA A.M. THIS IS AN APPEAL FILED BY THE REVENUE AND CROS S OBJECTION BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 31.3.2008 FOR THE ASSESSMENT YEAR 2000 - 01 IN THE MATTER OF ORDER PASSED U/S 143(3)/148 OF THE INCOME - TAX ACT 1961. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE FACTS IN BRIEF AR E THAT FOR THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION NO RETURN OF INCOME WAS FILED BY THE ASSESSEE . THERE WAS SURVEY U/S 133A ON 11.12.2002 WHEREIN IT WAS FOUND THAT THE ASSESSEE COMPANY HAS MADE INVESTMENT IN DEVELOPMENT AND CONSTRUCTION BUT NO RETURN OF INCOME WAS FILED FOR THE ASSESSMENT YEAR 2000 - 01. THE AO THEREFORE ISSUED NOTICE U/S 148 AFTER RECORDING REASONS. WHILE FRAMING ASSESSMENT U/S 143(3)/148 THE AO MADE ADDITION ON ACCOUNT OF SHARE CAPITAL AT RS. 41.75 LAKHS OUT OF TOTAL SHARE CA PITAL OF RS. - : 3 : - 3 66.75 LAKHS RAISED DURING THE YEAR. AS PER THE AO THE ASSESSEE COULD NOT ESTABLISH THE GENUINENESS OF THE SHARE CAPITAL RAISED THEREFORE THE AMOUNT OF RS. 41.75 LAKHS WAS ADDED IN THE ASSESSEE S INCOME. ASSESSEE CHALLENGED THE REOPENING AND MERITS OF ADDITIONS MADE BEFORE CIT(A). 3. BY THE IMPU GNED O RDER THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO FOR REOPENING HOWEVER HE HAS DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE AR IN THIS REGARD. I HAVE ALSO PERUSED THE FINDINGS OF THE AO MENTIONED IN THE ASSESSMENT ORDER. AFTER DUE CONSIDERATION OF THE FACTS OF THE CASE I HOLD THAT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 41 75 000/ - IN RESPECT OF ISSUED SUBSCRIBED AND PAID UP SHARE CAPITAL OF THE APPELLANT TREATING IT TO BE UNPROVED INCOME OF THE APPELLANT COMPANY. I FIND THAT THE APPELLANT HAS - : 4 : - 4 FILED COMPLETE DETAILS OF ALL THE SHAREHOLDERS. CONFIRMATION LETTERS HAVE ALSO BEEN FILED. THE AO EXAMINED THREE SHAREHOLD ERS AND RECORDED THEIR STATEMENT. THE THREE SHAREHOLDERS CONFIRMED THAT THEY HAVE SUBSCRIBED TO THE SHARE CAPITAL OF THE APPELLANT COMPANY. THE AO DID NOT RECORD STATEMENT OF THE REMAINING SHAREHOLDERS AND MERELY DREW INFERENCE AND CONCLUSION FROM THE STA TEMENT OF THE THREE SHAREHOLDERS. THE AO ACKNOWLEDGED THE EVIDENCE OF IRRIGATED AGRICULTURAL LAND HOLDINGS OF 20 - 28 ACRES BY THE SHAREHOLDERS WHICH WERE SUBMITTED BEFORE HIM. COPY OF RETURN OF ALLOTMENT OF SHARES IN FORM NO.2 AS WELL AS ANNUAL RETURN FILE D WITH REGISTRAR OF COMPANIES PROVE THAT SHARE CAPITAL OF RS. - : 5 : - 5 41 75 000/ - HAS BEEN SUBSCRIBED ISSUED AND PAID UP TO THESE SHAREHOLDERS. IDENTITY OF EACH AND EVERY SHAREHOLDER OF THE APPELLANT COMPANY WAS ESTABLISHED. THE SHAREHOLDERS HAVE CONFIRMED THAT T HEY HAVE INVESTED MONEY IN THE SHARE CAPITAL OF THE COMPANY AND SHARE CAPITAL HAVING BEEN VALIDLY ISSUED THEREFORE RS. 41 75 000/ - CANNOT BE TREATED AS INCOME OF APPELLANT COMPANY. RELIANCE PLACED BY THE AR ON THE DECISIONS REPORTED I N 245 ITR 160 (M.P.) 205 ITR 98 (DEL.) SUPPORTS THE APPELLANT'S CONTENTION TH AT IT IS NOT REQUIRED TO PROVE CREDITWORTHINESS OF SHAREHOLDERS. THE APPELLANT IS REQUIRED TO PROVE THE EXISTENCE AND IDENTITY OF EACH SHAREHOLDER AND RECEIPT OF MONEY FROM HIM OR HER. I ALSO RELY ON THE DECISION OF MY LD. PREDECESSOR PASSED ON 21 .12.2005 IN THE CASE OF THE APPELLANT - : 6 : - 6 COMPANY FOR THE ASST YEAR 2001 - 02 WHERE IN UNDER SIMILAR FACTS AND CIRCUMSTANCES ADDITION OF RS. 27 00 000/ - ON ACCOUNT OF SHARE APPLICATION MONEY HAS BEEN DELETED IN FULL. 4. THE REVENUE IS IN APPEAL BEFORE US AGAINST THE DELETION OF ADDITION WHEREAS THE ASSESSEE HAS FILED CROSS OBJECTION CHALLENGING THE ACTION OF THE CIT(A) FOR HOLDING THAT ASSESSMENT HAS BEEN VALIDLY REOPENED U/S 147 . 5. WE HAVE CONSIDERED THE RIVAL C ONTENTIONS CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT THERE WAS SURVEY AT ASSESSEE S BUSINESS PREMISES ON 11.12.2002 DURING WHICH IT WAS FOUND THAT THE ASSESSEE HAS MADE HUGE INVESTMENT IN DEVELOPMENT AND CONSTRU CTION. HOWEVER SINCE NO RETURN OF INCOME WAS FILED FOR THE YEAR UNDER CONSIDERATION THE AO AFTER RECORDING REASONS REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148. IN TERMS OF THE SURVEY REPORT - : 7 : - 7 THERE WAS SUFFICIENT MATERIAL BEFORE THE AO FOR ARRIVING AT REASONS TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME ACCORDINGLY REOPENING WAS VALIDLY MADE BY THE ASSESSING OFFICER. A CLEAR FINDING HAS BEEN RECORDED BY THE LD. CIT(A) AFTER CALLING A REMAND REPORT FROM THE AO TO THE EFFECT THAT THE NOTICE U/S 148 WAS PROPERLY SERVED UPON THE ASSESSEE. IN TERMS OF THE REMAND REPORT WE FOUND THAT THERE WAS SUFFICIENT MATERIAL BEFORE THE AO AND THE AO HAS ALSO RECORDED REASONS FOR REOPENING IN TERMS OF SURVEY CONDUCTED U/S 133A OF THE ACT REVEALED SO MANY FACTS WHI CH WERE NOT BEFORE THE DEPARTMENT. ACCORDINGLY WE UPHOLD THE ACTION OF THE AO FOR REOPENING THE ASSESSMENT. IN THE RESULT CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. 6. NOW COMING TO THE MERIT OF THE ADDITION IN RESPECT OF SHARE CAPITAL WHICH HAS B EEN DELETED BY THE LD. CIT(A) AFTER RECORDING FINDING THAT THE ASSESSEE HAS DULY DISCHARGED ITS ONUS OF ESTABLISHING IDENTITY OF THE SHAREHOLDERS WHO HAVE FILED THE CONFIRMATION. THREE SHAREHOLDERS HAVE ALREADY BEEN EXAMINED BY THE ASSESSING OFFICER WHER EIN THEY HAVE CONFIRMED CONTRIBUTION OF SHARE - : 8 : - 8 CAPITAL. OTHER SHAREHOLDERS WERE ALSO PRODUCED BY THE ASSESSEE BEFORE THE AO BUT FOR THE REASONS BEST KNOWN TO THE AO HE HAS NOT RECORDED THEIR STATEMENTS. THE ASSESSEE HAS FILED COMPLETE LIST OF SHAREHOLDERS ALONGWITH THEIR CONFIRMATION BEFORE THE AO. FORM NO.2 FILED WITH REGISTRAR OF COMPANIES DATED 21 ST MARCH 2000 WERE ALSO FURNISHED BEFORE THE AO. FROM THE RECORD WE FOUND THAT THE ASSESSEE HAS FILED CONFIRMATION FROM ALL THE SHAREHOLDERS EXCEPT THE THRE E WHOSE STATEMENTS WERE RECORDED. AFTER GOING THROUGH THE STATEMENT RECORDED BY THE ASSESSING OFFICER WE FOUND THAT ALL THE SHAREHOLDERS WERE HAVING 20 25 ACRES IRRIGATED LAND. ALL OF THEM ACCEPTED HAVING CONTRIBUTED MONEY TOWARDS SHARE CAPITAL AND HAVI NG BEEN ALLOTTED SHARES. WE FOUND THAT OUT OF EIGHTEEN SHARE APPLICANTS FOUR SHARE APPLICANTS ARE INCOME TAX ASSESSEES HOLDING MAJORITY SHARES OF CAPITAL OF RS. 14.55 LAKHS AND THE THREE SHAREHOLDERS WHOSE STATEMENTS WERE RECORDED HOLDING RS. 6.51 LAKHS WORTH OF SHARE CAPITAL. HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORT 11 ITJ 357 HAVE HELD THAT WHERE THE ASSESSEE IS ABLE TO ESTABLISH IDENTITY OF THE SHARE HOLDERS NO ADDITION IS WARRANTED IN THE HANDS OF THE ASSESSEE COMPANY AND THE DEPARTMENT I S AT LIBERTY TO REOPEN INDIVIDUAL ASSESSMENT OF SHARE HOLDERS AS PER LAW. THIS PROPOSITION OF HON'BLE SUPREME COURT HAS DULY BEEN FOLLOWED BY THE I.T.A.T. INDORE BENCH REPORTED IN 13 ITJ 264 13 ITJ 90 AND 13 - : 9 : - 9 ITJ 201. AS PER THESE DECISIONS ONCE THE IDEN TITY OF THE SHAREHOLDER IS GIVEN TO THE AO THE ASSESSEE IS NOT REQUIRED TO PROVE ANYTHING FURTHER. 7. IN VIEW OF THE ABOVE DISCUSSION WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING RECORDED BY THE LD. CIT(A) AT PAGE 25 REPRODUCED HEREINABOVE RESULT ING IN DELETION OF ADDITION OF RS. 41.75 LAKHS ON ACCOUNT OF SHARE CAPITAL. 8. IN THE RESULT BOTH THE APPEALS OF THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 22 ND JU LY 2011. SD/ - SD/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND JU LY 2011 . CPU* 1213 23