The ACIT,1(1), v. M/s Astha Credit and Securities Pvt. Ltd.,

ITA 340/IND/2008 | 2005-2006
Pronouncement Date: 05-05-2010 | Result: Dismissed

Appeal Details

RSA Number 34022714 RSA 2008
Assessee PAN AAECA7169B
Bench Indore
Appeal Number ITA 340/IND/2008
Duration Of Justice 1 year(s) 9 month(s) 15 day(s)
Appellant The ACIT,1(1),
Respondent M/s Astha Credit and Securities Pvt. Ltd.,
Appeal Type Income Tax Appeal
Pronouncement Date 05-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 05-05-2010
Date Of Final Hearing 29-04-2010
Next Hearing Date 29-04-2010
Assessment Year 2005-2006
Appeal Filed On 21-07-2008
Judgment Text
PAGE 1 OF 8 - I.T.A.NO. 340/IND/2008 - ASTHA CREDIT & SECURITIES PVT.LTD. BHOPAL. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AAECA7169B I.T.A.NO. 340/IND/2008 A.Y. : 2005-06 ACIT M/S.ASTHA CREDIT & SECURITIES PVT.LTD. 1(1) VS F-1 138/42 USHA PREET BHOPAL. MALVIYA NAGAR BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI D.K.DAS SHARMA CIT DR RESPONDENT BY : SHRI S. C. JAIN C. A. DATE OF HEARING : 29.04.2010 O R D E R PER V.K. GUPTA A.M. THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT(A)-I BHOPAL DATED 11.04.2008 FOR THE ASSESSM ENT YEAR 2005-06. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. IN THIS APPEAL GROUNDS RAISED BY THE REVENUE READ S AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN PAGE 2 OF 8 - I.T.A.NO. 340/IND/2008 - ASTHA CREDIT & SECURITIES PVT.LTD. BHOPAL. 1. DELETING THE ADDITION OF RS. 11 50 000/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECUR ED LOANS OBTAINED BY THE ASSESSEE FROM SHRI SATISH CHA NDRA GUPTA. 2. DELETING THE ADDITION OF RS. 4 00 000/- MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN SHARE CAPITAL WHICH WAS CLAIMED TO BE OBTAINED AS G IFT BY SHRI SATISH CHANDRA GUPTA FROM SHRI BABULAL GUPTAL. 3. DELETING THE ADDITION OF RS.2 00 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHA RE CAPITAL OBTAINED BY THE ASSESSEE FROM SHRI BABULAL GUPTA. 4. DELETING THE ADDITION OF RS. 5 80 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN SHARE CAPITAL OBTAINED BY THE ASSESSEE FROM SHRI VI JAY PRAKASH PANDEY. 5. DELETING THE ADDITION OF RS. 5 00 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN SHARE CAPITAL AND SHARE APPLICATION MONEY OBTAINED BY THE ASSESSEE FROM ANITA TIWARI. PAGE 3 OF 8 - I.T.A.NO. 340/IND/2008 - ASTHA CREDIT & SECURITIES PVT.LTD. BHOPAL. 6. DELETING THE ADDITION OF RS. 1 50 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN SHARE CAPITAL OBTAINED BY THE ASSESSEE FROM VINITA PANDEY. 7. DELETING THE ADDITION OF RS.8 00 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHA RE CAPITAL OBTAINED BY THE ASSESSEE FROM SHIV CHARAN PIPARSANIA. 8. DELETING THE ADDITION OF RS. 1 20 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN SHARE CAPITAL OBTAINED BY THE ASSESSEE FROM ANIL PR AKASH PANDEY. 9. DELETING THE ADDITION OF RS. 9 50 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN SHARE CAPITAL OBTAINED BY THE ASSESSEE FROM SURAJ P RASAD PANDEY. 10. DELETING THE ADDITION OF RS. 3 50 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED IN SHAR E CAPITAL OBTAINED BY THE ASSESSEE FROM SURAJ PRAKASH PANDEY (HUF). 11. DELETING THE ADDITION OF RS. 5 00 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN PAGE 4 OF 8 - I.T.A.NO. 340/IND/2008 - ASTHA CREDIT & SECURITIES PVT.LTD. BHOPAL. SHARE CAPITAL AND UNSECURED LOANS OBTAINED BY THE A SSESSEE FROM R.PIPARSANIA. 4. THE FACTS IN BRIEF ARE THAT THE A.O. EXAMINED THE SHARE CAPITAL ACCOUNT OF THE ASSESSEE COMPANY WHICH LISTED IN TH E NATIONAL STOCK EXCHANGE. THE A.O. MADE DETAILED ENQUIRIES AS REFER RED TO THE SOURCE OF SUCH INVESTMENT BY RESPECTIVE SHAREHOLDERS THEIR C APACITY TO MAKE SUCH INVESTMENT AND GENUINENESS OF THE TRANSACTION. THE A.O. RELYING ON THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. RUBY TRADERS AND EXPORTS LIMITED AS REPORTED IN 263 ITR 300 HELD THAT UNSECURED LOAN OF RS. 11 15 000/- AND TOTAL SHARE C APITAL AND SHARE APPLICATION MONEY AMOUNTING TO RS.45.50 LAKHS REMAI NED UNEXPLAINED HENCE TO BE TAXED AS UNEXPLAINED CASH CREDIT U/S 6 8 OF THE INCOME-TAX ACT 1961. AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A) WHEREIN SUBMISSIONS WERE MAD E BOTH AS REGARD TO UNSECURED LOAN OF RS. 11.50 LAKHS FROM SATISH J. GU PTA AS WELL AS IN RESPECT OF SHARE APPLICATION/SHARE CAPITAL SUBSCRI BED BY VARIOUS PERSONS. THE ASSESSEE ALSO RELIED ON THE JUDICIAL DECISIONS WHICH WERE CITED BEFORE THE A.O. ALSO. THE LD. CIT(A) FOUND THAT IN MOST OF THE CASE THERE WERE OPENING BALANCES HENCE COULD NOT BE CONSIDERED FO R APPLICATION OF PROVISIONS OF SECTION 68 IN THE YEAR UNDER CONSIDER ATION. THE LD. CIT(A) PAGE 5 OF 8 - I.T.A.NO. 340/IND/2008 - ASTHA CREDIT & SECURITIES PVT.LTD. BHOPAL. ALSO FOUND THAT THE ASSESSEE HAD DISCHARGED ITS INI TIAL BURDEN BY PROVIDING THE BASIC DATA AND THEREAFTER IT WAS APPLICATION O F THE REVENUE TO REBUT THE CLAIMS OF THE ASSESSEE WITH COGENT MATERIAL AND REASONS WHICH WAS LACKING IN THE CASE HENCE FOR THIS REASON THERE WAS NO CASE FOR MAKING THE ADDITION. THE LD. CIT(A) ALSO HELD THAT A.OS A CTION WAS IN THE REALM OF PRESUMPTION AND SURMISES ONLY. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. CIT DR NARRATED THE FACTS AND PREFERRED TO RELY ON THE ORDER OF A.O. 6. THE LEARNED COUNSEL FOR THE ASSESSEE HAS MADE FOLL OWING SUBMISSIONS BESIDES PLACING RELIANCE ON THE ORDER O F THE LD. CIT(A) :- I) THERE IS ABSOLUTELY NO DISPUTE AS TO IDENTITY OF TH E PERSONS WHO PAID SHARE CAPITAL/SHARE APPLICATION MONEY/LOAN TO THE ASSESSEE. II) PAYMENT BY EACH PERSON IS EVIDENCED BY BANK CHEQUES. THERE WAS ABSOLUTELY NO CASH PAYMENT. III) THE PAYMENT BY EACH OF THEM IS OUT OF THE FUNDS WHICH WERE AVAILABLE MUCH BEFORE THE INCORPORATION OF THE ASSESSEE COMPANY. IV) EACH AND EVERY PAYMENT IS ACCEPTED BY THE PAYER (CREDITOR) AND IS PROVED WITH THE HELP OF BANK ENT RIES. PAGE 6 OF 8 - I.T.A.NO. 340/IND/2008 - ASTHA CREDIT & SECURITIES PVT.LTD. BHOPAL. V) ALL THE PAYERS ARE INCOME TAX ASSESSEES. THEY HAVE FILED REGULAR RETURNS OF INCOME WHICH HAVE BEEN ACCEPTED BY THE DEPARTMENT U/S 143(1). VI) AFTER EXPIRY OF THE STATUTORY PERIOD OF LIMITATION PROVIDED U/S 143(2) THE A.O. CANNOT TURN ROUND AND MAKE ENQUIRIES IN RESPECT THERE OF IN THE MANNER PROVIDED U/S 143(1). [SEE VIPIN KHANNA V. CIT (220 ITR 255 ( 233) P & H). HE SHOULD BELIEVE THOSE RETURNS. VII) THE A.O. IS WITHIN HIS RIGHT TO OPEN THE ASSESSMENT OF THE CREDITORS U/S 148 IF HE HAS REASONABLE BELIEF A GAINST THEM BUT IN NO CASE HE CAN MAKE THE ADDITION IN TH E HANDS OF THE ASSESSEE VIDE 8 ITJ 165 101 TTJ 124 11 ITJ 357 ( S. C.) AND 11 ITJ 505 REFERRED TO ABOV E. THESE JUDGMENTS HAVE LAID DOWN THE PRINCIPLE THAT I N SUCH CASES NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY. MOREOVER THE CIT(A) HAS STATED THE CASE- LAWS ON THE SUBJECT AT PAGE 15 AND 16 OF HIS ORDER . VIII) FINALLY IT IS REQUESTED THAT APPEAL OF THE DEPARTM ENT BE DISMISSED. RELIANCE IS PLACED ON THE SERIES OF DECISION OF APEX COURT HIGH COURT AND VARIOUS PAGE 7 OF 8 - I.T.A.NO. 340/IND/2008 - ASTHA CREDIT & SECURITIES PVT.LTD. BHOPAL. BENCHES OF TRIBUNAL INCLUDING INDORE BENCH OF TRIBUNAL. 1. CIT VS. LOVELY EXPORTS P.LTD. 216 CTR 195 SC 2. CIT VS. STELLER INVESTMENT LTD. (2000) 164 CTR 287 (SC) 3. BARKHA SYNTHETICS LTD. VS. ACIT (2006)283 ITR 377 (RAJ) 4. CIT VS. FIRST POINT FINANCE LIMITED 286 ITR 477 (RAJ) 5. CIT VS. ILLAC INVESTMENT P.LTD. 287 ITR 135 (DEL) 6. CIT VS. GOBI TEXTILES LTD. 294 ITR 663 (MAD) 7. CIT VS. GLOCOM IMPEX P.LTD. 205 CTR 571 (DEL) 8. UMA POLYMERS P.LTD. 101 TTJ 124 JD.(TM) 124 9. ACIT V. FLEXITUFF INTERNATIONAL LTD. (2007) 8ITJ 165 (TRI) I.T.A.T. INDORE BENCH 10. ACIT V. ANTARTICA INVESTMENT. PVT.LTD. (2003)(262 ITR 493(DEL) 11. CHHATTISGARH STEEL CASTING P.LTD. VS. ACIT 920090 12 ITJ 733 (TRIBUNAL) I.T.A.T. BILASPUR. 12. CIT V. DOLPHIN CANPECK LTD. (2006)283 ITR 190 13. CIT VS. NIVEDAN VANIJYA NIYOJAN LTD. (2003) 263 ITR 623 ( CAL) 14. METACHEM INDUSTRIES (2007) 7 ITJ 310 (2000) 245 ITR 160 (MP) 7. IN OUR VIEW WITHOUT GOING INTO MUCH DETAIL THE RE VENUES APPEAL IS LIABLE TO BE DISMISSED IN VIEW OF THE DEC ISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS PRIVATE LIMITED AS PAGE 8 OF 8 - I.T.A.NO. 340/IND/2008 - ASTHA CREDIT & SECURITIES PVT.LTD. BHOPAL. REPORTED IN 216 CTR 195 WHEREIN THE HON'BLE SUPREM E COURT HAS HELD THAT IF THE DEPARTMENT WAS HAVING ANY DOUBT AS REGA RD TO THE SHARE APPLICATION MONEY/SHARE CAPITALS SUBSCRIBED BY VARI OUS PERSONS ALLEGED TO BE BOGUS BY THE DEPARTMENT THE DEPARTMENT COULD R EOPEN THEIR CASE. EVEN OTHERWISE ON MERITS ALSO THE ASSESSEE HAS SU BMITTED VARIOUS DOCUMENTARY EVIDENCES TO JUSTIFY ITS CLAIM. IN THIS VIEW OF THE MATTER WE HOLD THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE IM PUGNED ADDITION. ACCORDINGLY ALL THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 5 TH MAY 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :5 TH MAY 2010. CPU* 294.45