ITO, New Delhi v. M/s. Gentleman Products (P) Ltd., New Delhi

ITA 3975/DEL/2010 | 2001-2002
Pronouncement Date: 06-01-2011 | Result: Dismissed

Appeal Details

RSA Number 397520114 RSA 2010
Assessee PAN AAACG4745K
Bench Delhi
Appeal Number ITA 3975/DEL/2010
Duration Of Justice 4 month(s) 10 day(s)
Appellant ITO, New Delhi
Respondent M/s. Gentleman Products (P) Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 06-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 06-01-2011
Date Of Final Hearing 06-01-2011
Next Hearing Date 06-01-2011
Assessment Year 2001-2002
Appeal Filed On 26-08-2010
Judgment Text
I.T.A. NO.3975 /DEL/2010 1/4 IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH C NEW DELHI BENCH C NEW DELHI BENCH C NEW DELHI BENCH C BEFORE SHRI R. P. TOLANI JUDICIAL MEMBER AND SHRI K. D. RANJAN ACCOUTANT MEMBER ITA NO. 3975 /DEL/2010 (ASSESSMENT YEAR 2001-02) I.T.O. WARD 12(1) VS. M/S. GENTLEMAN PRODUCTS P. LTD. NEW DELHI 2402 HUDSON LANE KINGSWAY CAMP NEW DELHI (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAACG4745K APPELLANT BY: SMT. MONA MOHANTY SR. DR RESPONDENT BY: NONE ORDER ORDER ORDER ORDER PER K. D. RANJAN AM: PER K. D. RANJAN AM: PER K. D. RANJAN AM: PER K. D. RANJAN AM: 1. THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YE AR 2001-02 HAS BEEN FILED AGAINST THE ORDER OF LD. CIT(A) XV NEW DELHI. NONE APPEARED ON BEHALF OF THE ASSESSEE. HAVING REGARD TO THE FACTS OF THE CASE THE APPEAL IS DECIDED AFTER HEARING LD. S R. DR. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDE R: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER OF THE CIT(A) IS WRONG PERVERSE ILLEGAL AND AGAINST THE PROVISIONS OF LAW WHICH IS LIABLE TO BE SET ASI DE. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DELETING ADDITION MADE OF ` 6 10 000/- U/S 68- I) THAT BEFORE THE ISSUANCE OF CHEQUES FROM THE BAN K ACCOUNTS OF THE SHARE APPLICANTS THERE WERE MANY ENTRIES OF CASH DEPOSITS & IT IS SEEN THAT MONEY WA S WITHDRAWN ON THE SAME DATE OR THE VERY NEXT DATE WH ICH SHOWS THAT THE ALLEGED SHARE APPLICANT IS AN ENTRY OPERATOR. II) THE STATEMENT ON OATH OF SHRI MUKESH KUMAR & OR S. WHEREIN THEY HAS ADMITTED THAT THE CONCERNS WHICH HAVE ADVANCED THE AMOUNTING SHARE APPLICATION MONEY (ALLEGED SHARE APPLICANTS IN THIS CASE) ARE OPERATED/CONTROLLED BY HIM & NO REAL BUSINESS WAS D ONE BY SAID ENTITIES & THE SAME WERE USED TO GIVE ACCOMMODATION ENTRIES ONLY. I.T.A. NO.3975 /DEL/2010 2/4 III) THAT THE ASSESSEE FAILED TO PRODUCE THE ALLEGE D SHARE APPLICANT FOR VERIFICATION. MERE SUBMISSION OF DOCU MENTS AND MATERIAL IS HELD TO BE INSUFFICIENT IN THE CASE OF HINDUSTAN TEA TRADING CO. VS CIT 263 ITR 289. IV) THE DICTUM GIVEN BY THE HON'BLE SUPREME COURT I N CIT VS DURGA PRASAD MORE 82 ITR 540 & SUMATI DAYAL VS C IT 214 ITR 801 IN WHICH APEX COURT HAS LAID DOWN THE PROPOSITION THAT THE COURTS & TRIBUNALS SHOULD SEE THE PREPONDERANCE OF PROBABILITIES WHILE CONSIDERING TH E EVIDENCE FURNISHED BY THE ASSESSEE. V) THE FINDING OF FACTS RECORDED BY THE A.O. THAT H E ASSESSEE INDULGED IN A NOTORIOUS PRACTICE OF RESORT ING TO ACCOMMODATION ENTRIES IN ORDER TO EVADE PAYMENT OF LEGITIMATE TAX. VI) THAT THE A.O. IS DUTY BOUND U/S 68 TO ENQUIRE I NTO HE CREDITWORTHINESS IDENTITY OF THE CREDITORS & GENUI NENESS OF THE TRANSACTIONS. THE CIT(A) HAS ERRED IN IGNOR ING SUCH FINDINGS RECORDED BY THE A.O. IN THE ASSESSMEN T ORDER. 2. THE ONLY ISSUE FOR CONSIDERATION RELATES TO DELE TION OF ADDITION OF ` 6 10 000/- MADE ON ACCOUNT OF SHARE APPLICATIO N MONEY. THE A.O. IN THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD RECEIVED SHARE APPLICATION MONEY OF ` 43 LACS. ON A QUERY THE ASSESSEE FILED CERTAIN EVIDENCES. HOWEV ER HE NOTED THAT THE GENUINENESS AND CREDITWORTHINESS OF THE PERSONS GIVING SHARE CAPITAL OF `6 10 000/- TO THE ASSESSEE WAS NOT PROV ED. SINCE THE ASSESSEE HAD FAILED TO DISCHARGE ITS ONUS OF PROVIN G THE GENUINENESS AND CREDITWORTHINESS OF THE PERSONS WHO CLAIMED TO HAVE PAID ` 6 10 000/- TOWARDS SHARE CAPITAL THE A.O. MADE ADDI TION U/S 68 OF THE I. T. ACT. 3. ON APPEAL IT WAS SUBMITTED THAT HE ASSESSEE HAD FILED DOCUMENTARY EVIDENCE IN SUPPORT OF SHARE APPLICATIO N MONEY RECEIVED FORM SIX PARTIES IN THE FORM OF SHARE APPL ICATION FORM COPY OF CONFIRMATION COPY OF ITR COPY OF AFFIDAVIT CO PY OF PAN AND COPY OF PROOF OF ADDRESSES. IT WAS ALSO SUBMITTED THAT SPECIFIC INFORMATION WAS COLLECTED BY INVESTIGATION WING WHI CH SHOWED THAT THE TRANSACTION OF THE ASSESSEE WITH ENTRY OPERATOR . HOWEVER DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A. O. HAS NOT MENTIONED ANY DETAILS OF INVESTIGATION CARRIED OUT AND SPECIFIC I.T.A. NO.3975 /DEL/2010 3/4 INFORMATION COLLECTED BY THE DEPARTMENT ON THE BASI S OF WHICH IT WAS HELD THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FROM SUCH PERSONS IN THE GARB OF SHARE APPLICATION MONEY WER E ACTUALLY ACCOMMODATION ENTRIES. IT WAS PLEADED THAT INFORMA TION COLLECTED AT THE BACK OF THE ASSESSEE AND WITHOUT CONFRONTING THE ASSESSEE OR GIVING REASONABLE OPPORTUNITY TO REBUT SUCH INFORMA TION THE ASSESSMENT MADE WILL BE BAD IN LAW. THE ASSESSEE A LSO PLACED RELIANCE ON VARIOUS DECISIONS INCLUDING THE DECISIO N OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT. LTD. 116 CTR 185 WHEREIN IT HAS BEEN HELD THAT WHERE IDENTI TY OF THE SHARE APPLICANTS IS ESTABLISHED THEN DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS. LD. CIT(A) AF TER CONSIDERING THE VARIOUS DECISIONS DELETED THE ADDITION BY OBSE RVING AS UNDER: RELYING ON THE VARIOUS DOCUMENTS PLACED ON RECORD AND THE PRINCIPLE LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF M/S. LOVELY EXPORTS PVT. LTD. WHICH IS DIRECTLY ON THE ISSUE OF SHARE CAPITAL AND IN VIEW OF THE DECISIONS CITED AB OVE THE ADDITION ON ACCOUNT OF SHARE CAPITAL CANNOT BE SUST AINED. THE A.O. HAS NOWHERE PROVED THAT DOCUMENTS IN SUPPORT O F THE IDENTITY OF THE PARTY HAVE NOT BEEN PLACED ON RECOR D OR THEY WERE FORGED DOCUMENTS. THE A.O. ALSO HAS NOT BROUG HT ANY EVIDENCE ON RECORD REGARDING THE FACTS THAT THE SHA RE APPLICANTS WERE NOT CREDITWORTHY OR GENUINE DESPIT E THE FACT THAT THEIR PAN AND COPIES OF I T RETURNS WERE SUBMI TTED BY THE APPELLANT. IN VIEW OF THE DISCUSSION MADE ABOVE TH E ADDITION OF ` 6.10 LACS IS DELETED. HOWEVER THE A.O. IS FR EE TO TAKE APPROPRIATE ACTION AS MAY BE PERMISSIBLE UNDER THE LAW IN THE CASE OF VARIOUS SHARE HOLDERS ALLEGED TO BE ENTRY P ROVIDERS . 4. WE HAVE HEARD LD. D.R. FOR THE REVENUE. IN THE INSTANT CASE LD. CIT(A) HAS RECORDED THE FINDINGS THAT THE A.O. HAS NOWHERE STATED THAT THE DOCUMENTS IN SUPPORT OF IDENTITY OF THE PARTIES HAVE NOT BEEN PLACED ON RECORD OR THEY WERE FORGED DOCUM ENTS. THE A.O. HAS ALSO NOT BROUGHT ANY EVIDENCE ON RECORD REGARDI NG THE FACT THAT THE SHARE APPLICANTS WERE NOT CREDITWORTHY OR GENUI NE DESPITE THE FACT THAT THEIR PAN AND COPIES OF RETURNS WERE SUBM ITTED BY THE ASSESSEE. HON'BLE SUPREME COURT IN THE CASE OF LOV ELY EXPORTS (SUPRA) HAS HELD THAT IF THE SHARE APPLICATION MONE Y IS RECEIVED BY I.T.A. NO.3975 /DEL/2010 4/4 THE ASSESSEE FROM ALLEGED BOGUS SHARE HOLDERS WHOSE NAMES ARE GIVEN TO THE A.O. THEN THE DEPARTMENT IS FREE TO P ROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW . IN THE INSTANT CASE THE IDENTITY HAS BEEN PROVED AND THEREFORE NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. MOREOVER TH ERE IS NOTHING ON RECORD TO SAY THAT THE SHARE APPLICATION MONEY O F ` 6.10 LACS HAS COME FROM THE COFFERS OF THE ASSESSEE. THEREFORE LD .CIT(A) IN OUR CONSIDERED OPINION WAS JUSTIFIED IN DELETING THE A DDITION. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY TH E LD. CIT(A) DELETING THE ADDITION ON ACCOUNT OF SHARE APPLICATI ON MONEY. 5. IN THE RESULT APPEAL FILED BY THE REVENUE IS DI SMISSED. 6. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 06 TH JAN. 2011 AFTER CLOSE OF THE HEARING. SD./- SD./- ( R. P. TOLANI ) (K. D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:06 TH JAN. 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI