ITO 8(3)(1), MUMBAI v. SHREYA BIOTECH P. LTD, MUMBAI

ITA 3171/MUM/2009 | 2005-2006
Pronouncement Date: 02-07-2010 | Result: Dismissed

Appeal Details

RSA Number 317119914 RSA 2009
Assessee PAN AAGCS5624R
Bench Mumbai
Appeal Number ITA 3171/MUM/2009
Duration Of Justice 1 year(s) 1 month(s) 19 day(s)
Appellant ITO 8(3)(1), MUMBAI
Respondent SHREYA BIOTECH P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 02-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 02-07-2010
Assessment Year 2005-2006
Appeal Filed On 14-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI BEFORE SHRI R.S.SYAL AM AND SHRI V.DURGA RAO JM ITA NO.3171/MUM/2009 : ASST.YEAR 2005-2006 THE INCOME TAX OFFICER WARD 8(3)(1) MUMBAI. VS. M/S.SHREYA BIOTECH PRIVATE LIMITED 301-A PEREIRA HILL ROAD ANDHERI (EAST) MUMBAI 400 099. PA NO.AAGCS5624R. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HEMANT J.LAL RESPONDENT BY : SHRI SATISH MODY O R D E R PER R.S.SYAL AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 27.2.2009 I N RELATION TO THE ASSESSMENT YEAR 2005-2006. 2. THE ONLY GROUND RAISED IN THIS APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.6 98 12 168 MADE BY THE ASSESSING OFFICER U/S.68 OF THE ACT TOWARDS UNEXPLAINED CASH CREDIT BEING THE SHARE APPLICATIO N MONEY RECEIVED FROM FOREIGN INVESTOR. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE SHOWED SHARE APPLICATION PENDING ALLOTMENT AMOUNTING TO RS.14 89 17 168 AS ON 31.3.2005 IN ITS BALANCE SHEET. DURING THE COURSE OF ASSESSMENT PROC EEDINGS IT WAS NOTICED BY THE A.O. THAT THIS INCLUDED A SUM OF RS.6 98 12 168 CLA IMED TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM M/S.SUMMITAS LIFE SCIENCES PTE LT D. SINGAPORE TOWARDS SHARE APPLICATION MONEY. ON BEING CALLED UPON TO ESTABLIS H THE GENUINENESS OF THIS CREDIT THE ASSESSEE FILED A COPY OF CONFIRMATION FROM THE SAID COMPANY ADMITTING THE PAYMENT TO THE ASSESSEE TOWARDS SHARE APPLICATION A ND ALSO SUGGESTING THAT IT WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE. COPY OF BANK STATEMENT HIGHLIGHTING THE RECEIPT OF REMITTANCE OF US$ 16 00 000 WAS ALSO SUB MITTED. THE ASSESSING OFFICER OPINED THAT THE ASSESSEE HAD NOT SUBMITTED DOCUMENT S WITH REGARD TO THE DETAILS OF ITA NO.3171/MUM/2009 M/S.SHREYA BIOTECH PRIVATE LIMITED. 2 THE COMPANY BEING ITS REGISTRATION WITH SINGAPORE AUTHORITIES UNDER THE COMPANIES ACT ITS BALANCE SHEET AS ON 31.3.2005 C OPY OF INCOME TAX RETURNS ETC. HE THEREFORE MADE ADDITION FOR THE SAID SUM OF RS .6.98 CRORES U/S.68 OF THE ACT. DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS TH E ASSESSEE FILED FOLLOWING DETAILS WITH REGARD TO M/S.SUMMITAS LIFE SCIENCES PTE LTD. SINGAPORE:- (A) ANNUAL ACCOUNTS FOR FY 2005. (B) MEMORANDUM AND ARTICLES OF ASSOCIATION TOGETH ER WITH THE CERTIFICATE OF INCORPORATION. (C) FIRCS ISSUED BY THE APPELLANTS BANKER. (D) BANK STATEMENT OF SUMMITAS AS WELL AS THAT OF THE APPELLANT TO ESTABLISH THE INWARD FLOW OF FUNDS. (E) LETTER OF CONFIRMATION FROM SUMMITAS. (F) BANK REMITTANCE ADVICE FROM SUMMITAS. (G) REQUISITE DOCUMENTS FILED WITH RBI. (H) LEDGER ACCOUNT OF SUMMITAS IN THE BOOKS OF THE APPELLANT. 3. THE LEARNED CIT(A) REMITTED THE ADDITIONAL EVIDE NCE FILED BEFORE HIM TO THE ASSESSING OFFICER FOR HIS COMMENTS / OBSERVATION. T HE A.O. VIDE HIS REPORT DATED 17.2.2009 OBJECTED TO THE ADMISSION OF ADDITIONAL E VIDENCE FOR THE FOLLOWING REASONS:- (A) THE EVIDENCES PRODUCED DURING THE APPELLATE PR OCEEDINGS ARE NOT ACCEPTABLE. (B) THERE IS NO MENTION IN THE IT RETURN FILED BY SUMMITAS WITH THE SINGAPORE TAX AUTHORITIES OF ACKNOWLEDGEMENT OF TH E RETURN FILED. THE DUE DATE OF THE RETURN OF INCOME WAS 30.06.2006. SI NCE THE RETURN WAS FILED THEREAFTER IT IS CONSIDERED TO BE INVALID AN D NON EST. ITA NO.3171/MUM/2009 M/S.SHREYA BIOTECH PRIVATE LIMITED. 3 (C) THE RETURN OF INCOME HAS BEEN SIGNED ONLY ON 2 0.03.2008 WHICH IS MUCH AFTER THE PASSING OF THE ORDER OF ASS ESSMENT ON 28.12.2007. (D) THE APPELLANT HAS NOT SUBMITTED ANY COPY OF IT ASSESSMENT OF SUMMITAS BY THE SINGAPORE TAX AUTHORITIES. (E) THE RETURN MENTIONS THAT THE COMPANY DID NOT C ARRY ON ANY BUSINESS AND HAD NO INCOME DURING THE PRECEDING YEA R. THERE IS NO BREAKUP OF ASSETS OWNED BY SUMMITAS IN ITS BALANCE SHEET WHICH IS NEITHER SIGNED NOR STAMPED BY THE AUDITOR. (F) THE NEW EVIDENCE FILED SHOULD THEREFORE NOT BE ACCEPTED UNDER RULE 46A AND NEITHER ON MERITS AS DISCUSSED ABOVE. 4. A COPY OF THE SAID REMAND REPORT WAS GIVEN TO TH E ASSESSEE FOR HIS COMMENTS WHO GAVE FURTHER DETAILS. THE LEARNED CIT(A) ON T HE PERUSAL OF THE REMAND REPORT DETAILS AND OTHER EVIDENCE HELD THAT THE ADDITION M ADE U/S.68 WAS NOT JUSTIFIED. THE REVENUE IS IN APPEAL AGAINST THIS DELETION. 5. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD IT IS NOTED THAT ALTHOUGH THE ASSESSEE COULD NOT FILE EVIDENCE IN SUPPORT OF THE GENUINENESS OF THE CREDIT BEFORE THE ASSESSING OFFICER HOWEVER SUCH DEFICIENCY WAS MADE GOOD WHEN THE SAME WAS FILED BE FORE THE LD. CIT(A) WHO REMITTED SUCH ADDITIONAL EVIDENCE TO THE ASSESSING OFFICER FOR HIS OBSERVATIONS AND COMMENTS. COPIES OF THE RELEVANT EVIDENCE HAVE ALSO BEEN PLACED BEFORE US. PAGE 1 OF THE PAPER BOOK IS CONFIRMATION FROM THE S INGAPORE COMPANY ADMITTING THE ADVANCING OF US$ 16 LAKHS TO THE ASSESSEE-COMPA NY TOWARDS EQUITY SHARE APPLICATION MONEY. COPY OF MEMORANDUM OF ASSOCIATIO N OF SUMMITAS IS AVAILABLE AT PAGES 2 TO 5 OF THE PAPER BOOK. PAGE 6 ONWARDS I S THE COPY OF REPORT AND FINANCIAL STATEMENT OF SUMMITAS AS ON 31 ST DECEMBER 2005. PAGE NO.11 IS INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF SUMM ITAS LIFE SCIENCES PTE. LTD. ITA NO.3171/MUM/2009 M/S.SHREYA BIOTECH PRIVATE LIMITED. 4 DULY SIGNED BY R.SUBRAMANIAN & CO. CERTIFIED PUBL IC ACCOUNTANTS AT SINGAPORE ON 18 TH FEBRUARY 2008. BALANCE SHEET OF SUMMITAS INDICATE S ADVANCES RECEIVABLE BY IT WORTH US$ 78 58 616 REPRESENTING SHARE APPLIC ATION MONEY PAID PENDING ALLOTMENT OF SHARES IN TWO COMPANIES INCORPORATED I N THE REPUBLIC OF INDIA. COPY OF RETURN OF INCOME FILED BY SUMMITAS WITH THE RELE VANT INCOME-TAX AUTHORITIES IS PLACED AT PAGES 20 ONWARDS OF THE PAPER BOOK. COPY OF ASSESSMENT ORDER OF SUMMITAS IS ALSO AVAILABLE IN THE PAPER BOOK. APART FROM THAT IT IS SEEN THAT THE AMOUNT WAS RECEIVED BY THE ASSESSEE-COMPANY FROM SU MMITAS THROUGH BANKING CHANNEL. COPY OF HSBC BANK ACCOUNT OF M/S.SUMMITAS LIFE SCIENCES PTE LTD. SINGAPORE HAS ALSO BEEN PLACED ON RECORD. THEN THE COPY OF BANK ACCOUNT OF THE ASSESSEE REFLECTING THE RECEIPT OF SAID AMOUNT IS A LSO AVAILABLE IN THE PAPER BOOK. THESE DOCUMENTS INDICATE THAT NOT ONLY THE IDENTITY AND CAPACITY OF THE CREDITOR BUT ALSO THE GENUINENESS OF THE TRANSACTION HAS BEEN PR OVED BEYOND DOUBT. OVERWHELMING EVIDENCE HAS BEEN PLACED TO INDICATE T HAT THE AMOUNT WAS GENUINELY RECEIVED BY THE ASSESSEE TOWARDS SHARE APPLICATION MONEY. IN SUCH A SITUATION THERE CANNOT BE ANY QUESTION OF TREATING THE AMOUNT AS UN EXPLAINED CASH CREDIT U/S.68 OF THE ACT. WE THEREFORE APPROVE THE VIEW TAKEN BY T HE LEARNED CIT(A). 6. IN THE RESULT THE APPEAL DISMISSED. ORDER PRONOUNCED ON THIS 2 ND DAY OF JULY 2010. SD/- SD/- (V.DURGA RAO) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 2 ND JULY 2010 . DEVDAS* ITA NO.3171/MUM/2009 M/S.SHREYA BIOTECH PRIVATE LIMITED. 5 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENTS. 3. THE CIT CONCERNED 4. THE CIT(A)-XXVII MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.