The ACIT,, Bhopal v. M/s. S.S. Bindra Roller Flour Mills Pvt. Ltd.,, Itarsi

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.151/IND/2010 A.Y. 2005-06 ACIT-1(1) BHOPAL ... APPELLANT VS M/S. S.S. BINDRA ROLLER FLOUR MILLS P. LTD. ITARSI PAN AAICS 7622 K ... RESPONDENT APPELLANT BY : SHRI ARUN DEWAN SR. DR RESPONDENT BY : SHRI RAJESHWAR DAYAL ADV. DATE OF HEARING : 29.11.2011 DATE OF PRONOUNCEMENT : 29.11.2011 O R D E R PER JOGINDER SINGH THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORDE R OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I BHO PAL DATED 3.12.2009 ON THE GROUND THAT THE LEARNED CIT( A) ERRED IN 2 DELETING THE ADDITION OF RS.17 80 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED SHARE CAPITAL TREATED AS UNEXPLAINED CREDIT U/S 68 OF THE I.T. ACT IGNORING THE FACT THAT THE ASSESSEE FAILED TO DISCHARGE ITS ONUS TO PROVE THE GENUINENESS AND CREDIT WORTHINESS OF THE CREDITORS SPECIALLY IN VIEW OF THE DECISION OF KOLKATA HIGH COURT IN THE C ASE OF CIT VS. RUBY TRADERS & EXPORTERS (2003) 263 ITR 300. 2. DURING HEARING OF THIS APPEAL THE LEARNED SR. D R MERELY SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. THE FACTS IN BRIEF ARE THAT THE MAIN OBJECT OF THE ASSESSEE COMPANY WAS TO DEAL IN THE BUSINESS OF MANUFACTURING OF AATA MAIDA SUJI & BR AN FROM WHEAT. THE ASSESSEE RECEIVED SHARE CAPITAL OF RS.34 60 000/- FOR WHICH THE DETAILS OF SHARE SUBSCRIBERS WERE FUR NISHED BEFORE THE ASSESSING OFFICER. STATEMENTS OF SOME OF THE SH AREHOLDERS WERE ALSO RECORDED BY THE ASSESSING OFFICER. HOWEVE R THE 3 ASSESSING OFFICER SUSPECTED THE GENUINENESS OF THE TRANSACTIONS AS IN THE CASES OF SOME SHAREHOLDERS THE CASH WAS DEPOSITED IN THEIR ACCOUNTS BEFORE ISSUANCE OF CHEQUES TO THE ASSESSEE COMPANY CONSEQUENTLY THE ASSESSING O FFICER WAS OF THE VIEW THAT THE SOURCE OF SUCH CASH DEPOSI T WAS NOT SATISFACTORILY EXPLAINED BY ELEVEN PERSONS. THE ASS ESSING OFFICER MADE THE ADDITION IN THE CASE OF THE FOLLOW ING PERSONS: S.NO. NAMES & ADDRESSES OF SHARE APPLICANTS AMOUNT DISALLOWED (RS.) 1 SHRI KAILASH CHAND CHANDAK DURGA CHAUK ITARSI 1 00 000/- 2 SHRI DINESH KUMAR SHUKLA 9 ENGLE CHAWL ITARSI 1 00 000/ 3 SHRI DEEPAK KUMAR 11 TH LINE ITARSI 1 00 000/ 4 SHRI MANOJ MANDAL BANGALI COLONY GARIBI LINE ITARSI 1 00 000/ 5 SHRI MUKESH KUMAR AGRAWAL NEAR TALAB 11 TH LINE ITARSI 1 00 000/ 6 SHRI NEETESH RATHI 38 TIRUPATI NAGAR ITARSI 1 00 000/ 7 SHRI RAMESH CHAND CHANDAK DURGA CHAUK ITARSI 1 00 000/ 8 SA. HARJINDER SINGH BINDRA WARD NO.14 SURAJ GANJ ITARSI 1 90 000/- 9 SMT. AMARJEET KAUR BINDRA WARD NO.14 SURAJ GANJ ITARSI 1 40 000/- 10 GUMEET KAUR SURINDER SINGH BINDRA WARD NO.14 SURAJ GANJ ITARSI 5 00 000/- 11 SA. SURINDER SINGH BINDRA HUF 2 50 000/- TOTAL: 17 80 000/ - 4. THERE IS AN UNCONTROVERTED FINDING IN THE IMPUGN ED ORDER THAT THE IDENTITY FINANCIAL CAPACITY AND GENUINENE SS OF 4 TRANSACTIONS WERE DULY ESTABLISHED BY THE ASSESSEE IN RESPECT OF THE AFORESAID PERSONS. ADMITTEDLY THE ASSESSING OFFICER RECORDED THE STATEMENTS OF THE SHARE SUBSCRIBERS AN D THEY DULY ADMITTED HAVING SUBSCRIBED THE CAPITAL IN THE ASSES SEE COMPANY. CONFIRMATION LETTERS WERE ALSO FURNISHED A ND THE PAYMENT WAS ALSO MADE THROUGH CHEQUES AS HAS BEEN D ETAILED IN PARA 3.4 OF THE IMPUGNED ORDER. THE LD. CIT(A) HAS ALREADY DISCUSSED VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING DIVINE LEASING & FINANCE LTD. (299 ITR 268) (DEL) VALUE C APITAL SERVICES P. LTD. (307 ITR 334) (DEL) SOPHIYA FINAN CE LTD. (205 ITR 98) (FB) (DEL) STELLER INVESTMENT (192 ITR 267 ) AND CIT VS. STELLER INVESTMENT LTD. (251 ITR 263) (SC) AND OF-COURSE THE DECISION FROM HONBLE APEX COURT IN THE CASE OF LOVELY EXPORT PVT. LTD. (216 CTR 195) (SC) WHEREIN THE HON BLE APEX COURT HAS CLEARLY HELD THAT ONCE THE IDENTITY OF TH E SHARE SUBSCRIBERS IS PROVED THE DEPARTMENT IS FREE TO PR OCEED TO REOPEN THE INDIVIDUAL ASSESSMENTS OF SHARE SUBSCRIB ERS IN ACCORDANCE WITH LAW BUT IT CANNOT BE REGARDED AS UN DISCLOSED INCOME OF THE ASSESSEE COMPANY. IN THE PRESENT APPE AL SINCE 5 THE IDENTITY CAPACITY AND GENUINENESS OF TRANSACTI ONS ARE ESTABLISHED THEREFORE NO ADDITION IS REQUIRED TO BE MADE U/S 68 OF THE ACT CONSEQUENTLY WE FIND NO INFIRMITY I N THE CONCLUSION DRAWN BY THE LD. CIT(A). IT IS AFFIRMED. FINALLY THE APPEAL OF THE REVENUE IS HAVING NO ME RIT THEREFORE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN IN THE PRE SENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSION OF THE HEARING. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29.11.2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE !VYS!