Global Medicines Ltd.,, Anand v. The ACIT., Anand Circle,, Anand

ITA 3637/AHD/2004 | 1996-1997
Pronouncement Date: 09-04-2010 | Result: Dismissed

Appeal Details

RSA Number 363720514 RSA 2004
Bench Ahmedabad
Appeal Number ITA 3637/AHD/2004
Duration Of Justice 5 year(s) 3 month(s) 26 day(s)
Appellant Global Medicines Ltd.,, Anand
Respondent The ACIT., Anand Circle,, Anand
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 29-07-2008
Date Of Final Hearing 01-04-2010
Next Hearing Date 01-04-2010
Assessment Year 1996-1997
Appeal Filed On 13-12-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND T.K. SHARMA JUDICIAL MEMBER) ITA.NO.3637/AHD/2004 ASSTT.YEAR : 1996-97 GLOBAL MEDICINES LTD. 6B VRUNDAVAN MEDICINES SOCIETY VV NAGAR ROAD ANAND. VS. ACIT ANAND CIRCL3 ANAND. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BHAVIN MARFATIA REVENUE BY : SHRI C.K. MISHRA O R D E R PER G.D. AGARWAL VICE-PRESIDENT: THIS IS ASSESSEEES APPEAL AGAINST THE ORDER OF THE CIT(A) DATED 11-10-2004. T HE SOLE GROUND RAISED BY THE ASSESSEE IN ITS ABOVE APPEAL IS AS UNDER: 1.THE LD.CIT(A) ERRED IN FACT AND IN LAW IN PARTLY CONFIRMING PENALTY U/S.271(1)(C) OF THE I.T.ACT 1961. 2. AT THE TIME OF HEARING BEFORE US IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE CIT(A) UPHELD THE PENALTY UNDER SECTION 27 1(1)(C) OF THE ACT IN RESPECT OF THE FOLLOWING TWO ADDITIONS WHICH WERE M ADE BY THE AO FOR UNEXPLAINED CASH CREDITS: I) ASHWINBHAI PATEL RS.2 70 000/- II) PUSHPABEN PATEL RS.2 71 630/- THAT IN THE CASE OF ASHWIN PATEL THE ASSESSEE HAD FURNISHED THE CONFIRMATION FROM THE BANK FROM WHERE THE CHEQUE OF THE ABOVE SU M OF RS.2 70 000/- WAS ISSUED. THE ANAND PEOPLES CO-OP. BANK LTD. IN ITS CERTIFICATE CLEARLY STATED THAT THE CHEQUE OF RS.2 70 000/- WAS ISSUED FROM TH E SAVING ACCOUNT OF ASHWINBHAI HARMANBHAI PATEL OF ANAND. THUS THE AS SESSEE HAS GIVEN SUFFICIENT EVIDENCE TO ESTABLISH THAT THE AMOUNT HA S COME FROM THE BANK ITA.NO.3637/AHD/2004 -2- ACCOUNT OF SHRI ASHWIN PATEL. HE ALSO STATED THAT THE AO HIMSELF IN THE ASSESSMENT ORDER MADE THE ADDITION ON THE BASIS OF THE PREPONDERANCE OF PROBABILITIES. THUS NO CASE OF CONCEALMENT OF INC OME OR FURNISHING OF INACCURATE PARTICULARS HAS BEEN MADE OUT. HE THERE FORE SUBMITTED THAT PENALTY SUSTAINED BY THE CIT(A) UNDER SECTION 271(1)(C) SHO ULD BE CANCELLED. THE LEARNED DR ON THE OTHER HAND STATED THAT THE ASSES SEE HAS NOT GIVEN ANY EVIDENCE WITH REGARD TO ANY OF THE ABOVE CREDITS. THE ADDITION IS SUSTAINED BY THE ITAT IN THE QUANTUM APPEAL. THAT ON THE ABOVE FACTS PENALTY UNDER SECTION 271(1)(C) READ WITH EXPLANATION-1 IS RIGHTLY SUSTAINED BY THE CIT(A). 3. WE HAVE CAREFULLY CONSIDERED ARGUMENTS OF BOTH T HE SIDES AND PERUSED MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISS UE OF CASH CREDIT IN THE NAME OF ABOVE TWO PERSONS WAS CONSIDERED BY THE ITAT IN THE QUANTUM APPEAL VIDE ITA NO.3782/AHD/2002 DATED 4-1-2008. IN THIS CASE THE ITAT HELD AS UNDER: 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND FROM PAGES 3 AND 4 OF THE PAPER BOOK THAT THE ASSESSEE HAS FILED THE CONFIRMATION F ROM ANAND PEOPLES CO-OP. BANK LTD. IN RESPECT OF PAYMENTS OF RS.2 700 000/- BY SHRI ASHWINBHAI H PATEL. COPY OF ACCOUNT OF ANAND PHARMA FILED BEFORE US DOES NOT RELATE TO SHRI ASHWINBHAI H PATEL BUT IT R ELATES TO ONE PUSHPABEN V PATEL. NO CONFIRMATION FROM SHRI ASHWIN BHAI H PATEL WAS FILED NEITHER ANY EVIDENCE HAS BEEN FILED WHICH MAY PROVE THAT SHRI ASHWINBHAI H PATEL IS THE INCOME TAX ASSESSEE EVEN HIS PA NUMBER WAS ALSO NOT GIVEN. THUS IN OUR OPINION THE ASSESSEE HAS NOT PROVED THE IDENTITY OF SHRI ASHWINBHAI H PATEL. THE DECISION I N THE CASE OF CIT V STELLER INVESTMENT LTD. (1991) 192 ITR 287 (DELHI) HAS BEEN OVERRULED BY THE FULL BENCH OF DELHI HIGH COURT IN THE CASE O F SOPHIA FINANCE LTD. (SUPRA) IN WHICH THE DELHI HIGH COURT HAS CATE GORICALLY STATED THAT THE ASSESSEE HAS TO PROVE THE IDENTITY OF THE SHARE HOLDER. THE HON'BLE SUPREME COURT HAS SUMMARILY DISMISSED THE SLP AGAIN ST THE JUDGMENT IN THE CASE OF CIT V STELLER INVESTMENT LTD. (1991) 192 ITR 287 (DELHI). IN THE CASE OF V M SALGAOCAR AND BROTHERS P LTD. V CIT (2000) 243 ITR 383 (SC) THE HON'BLE SUPREME COURT HAS HELD THAT SLP SUMMARILY REJECTED DOES NOT LAY ANY LAW BUT CIVIL APPEAL IF D ISMISSED AFTER HEARING THE PARTIES HOLDING THAT THERE IS NO MERIT IN CIVIL APPEAL THE LAW PRONOUNCED IS BINDING UNDER ARTICLE 141. THEREFORE WE ARE OF THE VIEW THAT THE ASSESSEE IS BOUND TO PROVE THE IDENTITY OF THE SHARE HOLDERS. SINCE THE ASSESSEE IN THIS CASE HAS FAILED TO PROVE THE IDENTITY OF SHRI ITA.NO.3637/AHD/2004 -3- ASHWINBHAI H PATEL WE THEREFORE CONFIRM THE ORDER OF THE AUTHORITIES BELOW SUSTAINING THE ADDITION U/S 68 OF THE ACT. 6. IN RESPECT OF SECOND GROUND THE LEARNED AR CONTE NDED BEFORE US THAT THE ASSESSEE HAS PROVED THE IDENTITY OF SMT. P USHPABEN V PATEL FROM WHOM THE ASSESSEE HAS RECEIVED A SUM OF RS.2 71 630 /-. FOR THIS OUR ATTENTION WAS DRAWN TO PAGE 1 OF THE PAPER BOOK WHI CH CONTAINS THE COPY OF THE ACCOUNT OF SMT. PUSHPABEN V PATEL. IT W AS ALSO POINTED OUT THAT SHE IS A REGULAR ASSESSEE. SHE HAS RECEIVED TH E MONEY FROM ANAND PHARMA IN CASH AND HAS DEPOSITED THE AMOUNT TO THE ASSESSEE IN CASH. IT WAS CONTENDED THAT THIS MONEY WAS ALSO RECEIVED FOR SHARE AND THEREFORE HE RELIED ON THE SUBMISSIONS MADE IN RESP ECT OF SHRI ASHWINBHAI H PATEL. THE LEARNED DR ON THE OTHER HA ND POINTED OUT THAT THIS AMOUNT HAS NOT BEEN RECEIVED FOR SHARE AP PLICATION. THERE IS A CLEAR-CUT FINDING GIVEN BY THE APPELLATE AUTHORITY THAT THE ASSESSEE HAS NOT RECEIVED ANY SHARE APPLICATION MONEY NOR ANY SH ARE WAS ALLOTTED. ON THIS WHEN THE BENCH INQUIRED FROM THE LEARNED AR THE LEARNED AR EXPRESSED HIS INABILITY TO GIVE ANY PROOF ABOUT THE ALLOTMENT OF THE SHARES. THUS IT WAS CONTENDED BY THE LEARNED DR TH AT THE ASSESSEE HAS NEITHER PROVED THE IDENTITY CREDITWORTHINESS NOR T HE GENUINENESS OF THE TRANSACTION. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND GONE THROUGH PAGE 1 OF THE PAPER BOOK. WE FIND THAT IT C ONSISTS OF THE COPY OF ACCOUNT OF SMT. PUSHPABEN V PATEL. THERE IS NO CONF IRMATION GIVEN BY SMT PUSHPABEN V PATEL. THIS IS SIGNED ON BEHALF OF THE ASSESSEE. EVEN PA NUMBER OF SMT. PUSHPABEN WAS ALSO NOT GIVEN. THE AMOUNT HAS BEEN CREDITED IN HER ACCOUNT SHOWING THE CASH RECEIVED. EVEN THE AMOUNT HAS NOT BEEN TRANSFERRED TO THE SHARE ACCOUNT TO PROVE THAT THE AMOUNT RECEIVED HAS BEEN ADJUSTED AGAINST THE SHARE ALLOTM ENT. THEREFORE IN OUR OPINION THE AMOUNT REPRESENTS THE NORMAL CASH CREDIT RECEIVED BY THE ASSESSEE AND THE PROVISIONS OF SECTION 68 ARE A PPLICABLE. THE ASSESSEE IS BOUND TO PROVE ALL THE THREE INGREDIENT S I.E. THE IDENTITY OF THE CREDITOR CREDITWORTHINESS AND GENUINENESS OF T HE TRANSACTION. THE ASSESSEE IN OUR OPINION HAS NOT DISCHARGED THE ON US TO PROVE ALL THESE THREE INGREDIENTS AS LAID DOWN U/S 68. EVEN WE NOTE D FROM THE ASSESSMENT ORDER THAT SMT. PUSHPABEN V PATEL WHEN C ALLED FOR BY THE AO SHE DENIED IN HER STATEMENT HAVING APPLIED FOR SHARES OF GLOBAL MEDICINES LTD. OR EVEN SHE HAS DENIED THAT SHE HAS DEPOSITED ANY SHARE APPLICATION MONEY WITH THE ASSESSEE. THEREFORE IN OUR OPINION NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT( A). WE THEREFORE CONFIRM THE ORDER OF THE CIT(A). ITA.NO.3637/AHD/2004 -4- IN THE PENALTY PROCEEDINGS NO NEW EVIDENCE IS SUBM ITTED BY THE ASSESSEE. THUS THE FACTS REMAINS THAT THE ONLY EVIDENCE GIVE N BY THE ASSESSEE IN THE CASE OF ASHWIN PATEL IS THE LETTER OF THE BANK WHICH RE ADS AS UNDER: THIS IS TO CERTIFY THAT MRS.ASHWINBHAI HARMANBHAI PATEL OF ANAND IS HOLDING A SAVINGS ACCOUNT NO.1847 WITH US. IN THIS ACCOUNT IT HAS BEEN DEBITED RS.2 70 000/- (RS.TWO LAKHS SEVENTY THOUSAN D) BY CH.NO.12227 FAVOURING GLOBAL MEDICINES LTD. ON 30 TH MARCH 1996. HOWEVER NO CONFIRMATION FROM ASHIWN PATEL WAS GIVE N. THE CLAIM OF THE ASSESSEE WAS THAT SHRI ASHWIN PATEL HAD DEPOSITED T HE ABOVE MONEY FOR ALLOTMENT OF SHARES BUT NO SHARE APPLICATION FORM IS PRODUCED EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE US. IN THE CASE OF PUS HABEN NO EVIDENCE IS GIVEN BY THE ASSESSEE. ON THE OTHER HAND WHEN THE AO CROSS -EXAMINED SMT.PUSHAPEN SHE DENIED IN HER STATEMENT HAVING APPLIED FOR THE SHARES OF THE ASSESSEE- COMPANY OR ANY DEPOSIT AS SHARE APPLICATION MONEY W ITH THE ASSESSEE- COMPANY. ON THE ABOVE FACTS IN OUR OPINION THE A SSESSEE FAILED TO DISCHARGE THE ONUS CAST UPON HIM AS PER EXPLANATION-1 TO SECTION 271(1)(C) WHICH READS AS UNDER: EXPLANATION 1.- WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT - (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMM ISSIONER (APPEALS) [OR THE COMMISSIONER] TO BE FALSE OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE [AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA F IDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMP UTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM] THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL FOR THE PURP OSES OF CLAUSE (C) OF THIS SUB-SECTION BE DEEMED TO REPRESENT THE INCOME IN R ESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. ITA.NO.3637/AHD/2004 -5- AS PER THE ABOVE EXPLANATION ANY AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE SHALL BE DEEMED TO REPRESENT THE CONCEALED INCOME OF THE ASSESSEE IF THE CONDITIONS PRESCRIBE D UNDER CLAUSE-A OR B OF THE EXPLANATIONS ARE SATISFIED. 4. IN THIS CASE THERE IS A CREDIT IN THE BOOKS OF THE ASSESSEE AND IT WAS EXPLAINED BY THE ASSESSEE THAT THE AMOUNT WAS RECEI VED AS SHARE APPLICATION MONEY. HOWEVER THE ASSESSEE FAILED TO SUBSTANTIAT E SUCH EXPLANATON. IF THE AMOUNT IS RECEIVED AS A SHARE APPLICATION THE ASSE SSEE SHOULD HAVE PRODUCED THE COPY OF SHARE APPLICATION FURNISHED BY THESE AP PLICANTS. SIMILARLY THE CONFIRMATION OF THE PERSONS SHOULD HAVE BEEN PRODUC ED. THE ASSESSEE HAS NOT PRODUCED ANY IOTA OF EVIDENCE TO ESTABLISH THAT THE AMOUNT IS RECEIVED AS SHARE APPLICATION MONEY. THE ONLY EVIDENCE PRODUCED BY T HE ASSESSEE WAS A CERTIFICATE OF THE BANK IN RESPECT OF ONE CREDITOR. THE CERTIFICATE ONLY STATED THAT THE SUM OF RS.2 70 000/- WAS DEBITED IN THE ACCOUNT OF MR.ASHIN PATEL BY CHEQUE NOO.12227. HOWEVER THAT DOES NOT PROVE THA T THE AMOUNT WAS GIVEN AS SHARE APPLICATION MONEY. IN VIEW OF THE ABOVE IN OUR OPINION THE ASSESSEES CASE WOULD SQUARELY FALLS IN CLAUSE-B OF THE EXPLANATION 1 TO SECTION 271(1)(C). WE THEREFORE FIND NO JUSTIFICATION IN INTERFERING W ITH THE ORDER OF THE CIT(A) IN THIS REGARD. THE SAME IS SUSTAINED. 5. IN THE RESULT THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 9 TH APRIL 2010. SD/- SD/- (T.K. SHARMA) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 09-04-2010 ITA.NO.3637/AHD/2004 -6- VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER AR ITAT AHMEDABAD