M/s. Siri Ram Syal Hydro Power Pvt. Ltd., New Delhi v. ITO, New Delhi

ITA 2633/DEL/2010 | 2007-2008
Pronouncement Date: 06-08-2010 | Result: Allowed

Appeal Details

RSA Number 263320114 RSA 2010
Assessee PAN DELOF2010A
Bench Delhi
Appeal Number ITA 2633/DEL/2010
Duration Of Justice 2 month(s) 3 day(s)
Appellant M/s. Siri Ram Syal Hydro Power Pvt. Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 06-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 06-08-2010
Assessment Year 2007-2008
Appeal Filed On 02-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G ; NEW DELHI BEFORE SHRI C.L. SETHI JM AND SHRI K.D. RANJAN AM I.T.A. NO.2633/DEL OF 2010 ASSESSMENT YEAR: 2007-08 M/S SIRI RAM SYAL HYDRO POWER P LTD. INCOME-TAX O FFICER 267 UDAY PARK NDSE-II VS WARD 8(4) NEW DELHI . SOUTH EXTENSION NEW DELHI. APPELLANT RESPONDENT APPELLANT BY: S/SHRI R.S. SINGHVI & SUSHIL V ERMA RESPONDENT BY: SHRI R.P. SINGH SR. DR ORDER PER C.L. SETHI JM THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 7.4.2010 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF AN ASSESSMENT M ADE BY THE AO U/S 143(3) OF THE INCOME-TAX ACT 1961 (THE ACT) PERTA INING TO THE ASSTT. YEAR 2007-08. 2. THE ONLY ISSUE IS WITH REGARD TO THE ADDITION OF RS.25 LACS BEING SHARE CAPITAL PAID BY ONE SHRI SURJEET ACHARYA WHICH HAS BEEN CONSIDERED TO BE UNEXPLAINED BY THE AO AND FURTHER CONFIRMED BY THE LEARNED CIT(A). IN THIS CASE THE ASSESSEE FILED ELECTRONICALLY ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS. NIL. THE RETURN WAS PROCESSED U/S 14 3(1) OF THE ACT. THE CASE 2 WAS THEN SELECTED FOR SCRUTINY. DURING THE ASSESSM ENT PROCEEDINGS THE ASSESSEE WAS ASKED TO EXPLAIN THE SHARE CAPITAL OF RS.25 LACS RECEIVED FROM ONE SHRI SURJEET ACHARYA. THE AO STATED THAT IN THE CURRENT YEAR THE SUM OF RS.25 LACS WAS STATED TO HAVE BEEN RECEIVED FROM TH E SAME PERSON NAMELY SHRI SURJEET ACHARYA ON THE SAME ACCOUNT I.E. SHARE CAPITAL ACCOUNT. THE AO FURTHER STATED THAT CIRCUMSTANCES OF THIS YEAR WERE ALMOST THE SAME AS LAST YEAR. THE AO FURTHER OBSERVED THAT THE INVESTOR WA S NOT AVAILABLE IN INDIA AT THAT POINT OF TIME AS IT WAS STATED TO BE OUT OF TH E COUNTRY. THE AO THEN EXAMINED THE VARIOUS ENTRIES IN THE BANK ACCOUNT OF SHRI SURJEET ACHARYA AND FOUND THAT BEFORE THE SUM WAS PAID BY SHRI SURJ EET ACHARYA TO THE ASSESSEE THERE WERE CREDIT ENTRIES APPEARING IN HI S BANK ACCOUNT. THE SOURCE OF SOME OF THE CREDIT ENTRIES WERE IDENTIFIED AS IT WAS SEEN THAT CHEQUE NO.251301DATED 18.4.2006 FOR RS.5 LACS WAS SOURCED FROM ONE CHIRANJIVI MARASINI CHEQUE DATED 17 TH MAY 2006 WAS SOURCED FROM M/S SIRI RAM HYDRO POWER PRIVATE LTD. ITSELF. SIMILARLY CHEQUE NO.251302 FOR RS.5 LACS DATED 18.4.2006 WAS AGAIN SOURCED FROM SHRI CHIRANJ IVI MARASINI. THIS CHEQUE WAS CREDITED TO THE BANK ACCOUNT OF SHRI SUR JEET ACHARYA ON 2.5.2006. IT WAS FURTHER FOUND THAT CHEQUE NO.2513 05 FOR RS.2 50 000/- WAS ALSO DATED 18.4.2006 AND WAS CREDITED TO THE A CCOUNT OF SHRI SURJEET ACHARYA ON 12 TH MAY 2006. THE AO WAS OF THE VIEW THAT REAL OWNER OF THE 3 MONEY IS THE PERSON WHO WAS USING THE SAME. HE T HEREFORE TREATED THE SUM OF RS.25 LACS TO BE UNDISCLOSED INCOME OF THE A SSESSEE. 3. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LEARNED CIT(A). 4. THE LEARNED CIT(A) AFTER DISCUSSING THE VARIOUS ENTRIES IN THE BANK ACCOUNT OF SHRI SURJEET ACHARYA AND IN THE LIGHT OF THE FACT THAT ASSESSEE HAS NOT FILED THE CORRECT ADDRESS OF THE INVESTOR AND A FTER DISCUSSING VARIOUS DECISIONS CONFIRMED THE ADDITION MADE BY THE AO. THE CIT(A) FURTHER OBSERVED THAT THE ALLEGED SHARE APPLICANT DID NOT R ECEIVE ANY DIVIDEND NOR ANY DIVIDEND WAS DECLARED AND EVEN AFTER THE LAPSE OF 3-4 YEARS THE ENTIRE FUND IS STILL REMAIN INVESTED IN THE HANDS OF THE A SSESSEE. THE CIT(A) HAS ALSO DISCUSSED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS 216 CTR 195 AS WELL AS THE DECIS ION OF DELHI HIGH COURT IN THE CASE OF DIVINE LEASING AND FINANCE LTD. (200 7) 216 CTR 38 (DEL) WHICH HAS BEEN CONFIRMED BY THE HONBLE SUPREME COU RT. THE LEARNED CIT(A) HAS TAKEN A VIEW THAT DECISION OF HONBLE SU PREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS (SUPRA) WOULD BE OF NO ASS ISTANCE TO ASSESSEES CASE BEING DISTINGUISHABLE ON FACTS. THE LEARNED CIT(A) FURTHER OBSERVED THAT MERE BECAUSE A PERMANENT ACCOUNT NUMBER WAS AL LOTTED TO INDIVIDUAL IT IS NOT SUFFICIENT TO ESTABLISH THE IDENTITY AS THER E IS NO PROVISION TO VERIFY THE 4 ADDRESSES WHILE ALLOTTING PAN AS PAN CAN BE ALLOTTE D ON THE BASIS OF XEROX COPY OF THE ADDRESS PROOF WHICH IS NOT VERIFIED BY THE DEPARTMENT. 5. HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. BOTH THE AO AS WE LL AS LEARNED CIT(A) HAVE STATED THAT SHRI SURJEET ACHARYA HAS PAID THE AMOUN T THROUGH ACCOUNT PAYEE CHEQUES DRAWN ON HIS BANK ACCOUNT WITH AXIS BANK G REATER KAILASH-I NEW DELHI. FROM BANK ACCOUNT OF SHRI SURJEET ACHARYA IT HAS BEEN FOUND THAT BEFORE ISSUING THE CHEQUE TO THE ASSESSEE CERTAIN AMOUNTS WERE DEPOSITED IN THE SHAREHOLDERS BANK ACCOUNT THROUGH CHEQUE EXCEP T SUM OF RS.40 000/- IN CASH. HOWEVER THE TOTAL PAYMENT OF RS.25 LACS PA ID AS SHARE APPLICATION MONEY TO THE ASSESSEE COMPANY IS FULLY COVERED BY THE AMOUNT RECEIVED BY SHAREHOLDER NAMELY SHRI SURJEET ACHARYA BY WAY OF CHEQUES WHICH WERE DULY CREDITED IN HIS BANK ACCOUNT. IT IS ALSO NOT IN DISPUTE THAT THE SHARES WERE ALLOTTED TO SHRI SURJEET ACHARYA AND IN THAT REGARD CERTIFICATES WERE ISSUED TO HIM AND THE RETURN IN FORM NO.32 WAS FILE D WITH ROC ALONG WITH THE LETTER OF SHRI SURJEET ACHARYA ACCEPTING THE PO ST OF DIRECTOR OF ASSESSEE COMPANY. THE AO HAS NOT BROUGHT ANY MATERIAL ON REC ORD TO PROVE AND ESTABLISH THAT THE MONEY DEPOSITED IN THE BANK ACCO UNT OF SHRI SURJEET ACHARYA HAS ACTUALLY EMANATED FROM THE COFFERS OF T HE ASSESSEE COMPANY. IT 5 IS NOT THE CASE OF THE AO THAT ONE SHRI CHIRANJIVI MARASINI WHO HAD ISSUED CHEQUE TO SHRI SURJEET ACHARYA AMOUNTING TO RS.12 5 0 000/- IS BENAMI OF THE ASSESSEE COMPANY. THE AO HAS RELIED UPON THE FA CTS OF THE LAST YEAR WHERE ALSO THE ASSESSEE HAD RECEIVED SUM OF RS.75 L ACS TOWARDS SHARE CAPITAL FROM SHRI SURJEET ACHARYA. IN THE COURSE OF HEARIN G OF THIS APPEAL THE LEARNED COUNSEL FOR THE ASSESSEE HAS POINTED OUT TH AT THE ORDER OF LEARNED CIT(A) IN DELETING THE ADDITION OF RS.75 LACS ON AC COUNT OF SHARE CAPITAL RECEIVED FROM SHRI SURJEET ACHARYA HAS BEEN CONFIRM ED BY THE TRIBUNAL VIDE ORDER DATED 22 ND JANUARY 2010 IN ITA NO.3497/DEL/2009. IN THAT YE AR THE IDENTITY OF SHRI SURJEET ACHARYA WAS ESTABLISHED IN THE LIGHT OF THE FACT THAT HE WAS HAVING A PERMANENT ACCOUNT NUMBER; HE WAS MA INTAINING A BANK ACCOUNT WITH AXIS BANK AND FORM NO.22 ACCEPTING THE POST OF DIRECTOR OF THE COMPANY WAS FILED WITH ROC. THEREFORE IN THE LIGHT OF THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS LOV ELY EXPORTS (SUPRA) AND DIVINE LEASING AND FINANCE LTD. (SUPRA) WE HOLD TH AT THE ASSESSEE HAS BEEN ABLE TO DISCHARGE ITS BURDEN WITH REGARD TO THE REC EIPT OF RS.25 LACS BEING SHARE CAPITAL RECEIVED FROM SHRI SURJEET ACHARYA D IRECTOR OF THE ASSESSEE COMPANY. THE DEPARTMENTAL AUTHORITY HAS NOT BEEN AB LE TO BROUGHT ANY COGENT OR ADEQUATE MATERIAL ON RECORD TO CONTROVERT THE VARIOUS EVIDENCES FILED BY THE ASSESSEE AND THEN TO ESTABLISH THAT T HE MONEY ACTUALLY EMANATED 6 FROM THE ASSESSEES COFFERS. WE THEREFORE SET ASI DE THE ORDERS OF AUTHORITIES BELOW ON THIS ISSUE AND DELETE THE ADDITION OF RS. 25 LACS ON ACCOUNT OF SHARE CAPITAL RECEIVED FROM SHRI SURJEET ACHARYA DIRECTO R OF THE ASSESSEE COMPANY. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . 8. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 6 TH AUGUST 2010. (K.D. RANJAN) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH AUGUST 2010 VIJAY COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-XI NEW DELHI. 5. DR ASSISTANT REGISTRAR