ITO, New Delhi v. M/s. Yugant Travels (P) Ltd, New Delhi

ITA NO. 3682/DEL/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 3682/DEL/2009 A.Y. : 2006-07 INCOME TAX OFFICER WARD 18(4) ROOM NO. 248 C.R. BUILDING NEW DELHI VS. M/S YUGANT TRAVELS PRIVATE LIMITED WZ-145 C-59 ARYA SAMAJ ROAD UTTAM NAGAR NEW DELHI 110 059 (PAN/GIR: AAACY2428H) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. S. RAMACHANDRANI ADV. DEPARTMENT BY : MS. BANITA DEVI NAOREM SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE LD. COMMISSIONER OF INCOME TAX (APPEALS)S ORDER DATED 1 8.6.2009 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF ` 99 35 750/- AS UNEXPLAINED CASH CREDIT. 3. IN THIS CASE ASSESSING OFFICER NOTED THAT DURIN G THE PREVIOUS YEAR ASSESSEE COMPANY HAD ALLOTTED SHARES OF ` 10 EACH I NCLUDING THE ITA NO. 3682/DEL/2009 2 SHARE PREMIUM OF ` 90/- EACH TOTAL AMOUNTING OF ` 41 00 000/- WHICH WAS RECEIVED IN CASH AND ALSO RECEIVED 59 35 750/- IN CASH AS SHARE APPLICATION MONEY. THE LIST OF THE PERSONS WHO ADV ANCED THE MONEY TO THE ASSESSEE COMPANY WERE GIVEN ALONGWITH CONFIR MATION THEIR COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME AND ALS O COPY OF MEMORANDUM OF ASSOCIATION OF THE COMPANY FROM WHICH SHAR E APPLICATION MONEY RECEIVED DURING THE YEAR OUT OF WH ICH ` 41 00 000/- HAS BEEN TRANSFERRED TO SHARE CAPITAL ACCOUNT INCLU DING SHARE PREMIUM ACCOUNT. THE ASSESSING OFFICER NOTED THAT NO MAJO R ACTIVITY WAS CONDUCTED BY THE ASSESSEE IN THE YEAR UNDER CONSIDE RATION AND ALSO NO FUTURE PROSPECTS WAS AVAILABLE AS SUCH THERE WAS NO JUSTIFICATION FOR CHARGE OF HIGH VALUE OF SHARE PREMIUM. ASSESSING OFFICER ALSO NOTED THAT THE PERSONS WHO HAVE GIVEN MONEY TO THE ASSESS EE COMPANY HAD SUBMITTED RETURN WHICH IS JUST ABOVE THE TAXABLE LIMI TS. HE NOTED THAT THE CONFIRMATION SUBMITTED ALSO DID NOT HAVE ANY INF ORMATION ABOUT THE MODE OF PAYMENT AS SHARE APPLICATION MONEY AND SH ARE CAPITAL INCLUDING SHARE PREMIUM. ASSESSEE WAS ASKED TO PRO DUCE THE SHARE APPLICANTS AND PROVE THEIR CREDITWORTHINESS. THE ASSESSEE COULD NOT PROVIDE ANY COGENT REPLY IN THIS REGARD. UNDER THE CIRCUMSTANCES THE ASSESSING OFFICER HELD THAT THE ENTIRE RECEIPT OF ` 99 35 750/- WAS UNEXPLAINED CASH CREDIT OF THE ASSESSEE. ITA NO. 3682/DEL/2009 3 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) REFERRED THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS (2008) 216 ITR 195. HE HELD THAT ASS ESSEE HAS DISCHARGED ITS ONUS AS HE HAS PROVIDED CONFIRMATION OF ALL THE SHARE APPLICANTS AND THEIR ADDRESS AND PAN PARTICULARS ET C. TO THE ASSESSING OFFICER . THUS IT WAS CLAIMED THAT IDENTITY OF T HE APPLICANTS WERE FURNISHED AND ALSO IT WAS THUS CLAIMED THAT ASSESSE E HAS DISCHARGED ITS ONUS. ACCORDING TO LD. COMMISSIONER OF INCOME TAX (APPEALS) THERE IS DISTINCTION BETWEEN SHARE APPLICATION MONEY AND OTHER CREDITS U/S 68. ACCORDINGLY LD. COMMISSIONER OF INCOME TAX (APP EALS) DIRECTED THE DELETION OF THE IMPUGNED ADDITION. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT O F THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT IN THE PRESENT CASE SHARES OF 10/- EACH WERE SAID TO HAVE BEEN GIVEN AT A PREMIUM OF ` 90/- EACH FOR WHICH APPARENTLY THERE IS NO JUSTIFICA TION. THE COMPANYS BALANCE SHEET AND OTHER PARTICULARS HAVE NOT BEEN F URNISHED BEFORE US FROM WHERE IT CAN BE ADDUCED THAT THE COMPANIES SHAR ES CAN COMMAND SO MUCH OF PREMIUM. THE LD. COMMISSIONER OF I NCOME TAX (APPEALS) HAS NOT TOUCHED UPON THIS ASPECT. IN OU R CONSIDERED OPINION THE MATTER NEEDS TO BE REMITTED TO THE FILE S OF THE ASSESSING ITA NO. 3682/DEL/2009 4 OFFICER TO ENABLE THE ASSESSEE TO FURNISH COGENT EVIDENCES TO PROVE THE JUSTIFICATION OF SUCH HUGE SHARE PREMIUM BEING RE CEIVED BY THE ASSESSEE COMPANY. WE ALSO NOTE THAT HERE THAT NONE OF THE CASE LAW REFERRED IS RELATED TO THE RECEIPT OF SHARE PREMI UM ACCOUNT. ACCORDINGLY THE ISSUE STANDS REMITTED TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRESH. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25/2/2011 UP ON CONCLUSION OF HEARING. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 25/2/2011 SRB COPY COPY COPY COPY FORWARDED TO: FORWARDED TO: FORWARDED TO: FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES