M/s Triveni Civitech (P) Ltd, Bhubaneswar v. ITO, Bhubaneswar

ITA 4/CTK/2011 | 2007-2010
Pronouncement Date: 25-02-2011

Appeal Details

RSA Number 422114 RSA 2011
Assessee PAN AACCT0174B
Bench Cuttack
Appeal Number ITA 4/CTK/2011
Duration Of Justice 1 month(s) 20 day(s)
Appellant M/s Triveni Civitech (P) Ltd, Bhubaneswar
Respondent ITO, Bhubaneswar
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Assessee
Bench Allotted DB
Date Of Final Hearing 24-02-2011
Next Hearing Date 24-02-2011
Assessment Year 2007-2010
Appeal Filed On 04-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK ( ) BEFORE . . HONBLE SHRI K.K.GUPTA ACCOUNTANT MEMBER. /AND . . . S HRI K.S.S.PRASAD RAO JUDICIAL MEMBER / I.T.A.NO. 04/CTK/2011 AND STAY PETITION NO.04/CTK/2011 / ASSESSMENT YEAR 2007 - 08 M/S.TRIVENI CIVITECH PVT.LTD. PLOT NO. N - 6/536 JAYADEV VIHAR BHUBANESWAR PAN: AACCT 0174 B - - - VERSUS - INCOME - TAX OFFICER WARD 2(3) BHUBANESWAR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI S.MISHRA AR / FOR THE RESPONDENT: / SHRI S.K.DASH DR / ORDER . . SHRI K.K.GUPTA ACCOUNTANT MEMBER. IN THIS APPEAL THE ASSESSEE AGITATES THE ACTION OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IN CONFIRMING THE ADDITIONS AS ASSESSED BY THE ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 14 3(3) THEREBY BRINGING TO TAX UNSECURED LOANS AND SHARE APPLICATION MONEY TAXABLE IN THE HANDS OF THE ASSESSEE UNDER THE PROVISIONS OF SECTION 68 OF THE INCOME - TAX ACT 1961. 2. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE BRIEF FACTS OF THE ASSESSEE S CASE BY STATING THAT THE ASSESSEE FILED RETURN OF INCOME OF 11 58 700 BEING A CIVIL CONTRACTOR WHEN ON THE BASIS OF INFORMATION AVAILABLE TO THE ASSESSING OFFICER CASH HAD BEEN DEPOSITED IN THE BANK WAS SUBJECTED TO SCRUTINY BY ISSUE OF NOTICE U/S.142(1).DURING THE COURSE OF EXAMINATION OF BOOKS OF ACCOUNT IT WAS FOUND THAT THE ASSESSEE HAD OBTAINED UNSECURED LOANS AMOUNTING TO 32 80 684 WHICH WERE PENDING ADJUSTMENT FOR ALLOTMENT OF SHARES AS AGAINST ADDITIONAL SHARE CAPITAL OF 19 LAKHS WAS INTRODUCED I.T.A.NO. 04/CTK/2011 AND STAY PETITION NO.04/CTK/2011 2 WHEN THE AUTHORIZED CAPITAL OF THE COMPANY WEAS 25 LAKHS. T HE ASSESSING OFFICER ASKED THE ASSESSEE TO ESTABLISH IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE UNSECURED CASH CREDITORS HELD PENDING ALLOTMENT OF SHARES AND THE SHARE APPLICATION MONEY PENDING ALLOTMENT OF SHARES WHEN HE OBSERVED THAT A SUM OF 17 02 684 HAD BEEN RECEIVED BY THE ASSESSEE FOR THE PURPOSE OF ALLOTMENT OF SHARE IN CASH. THE ASSESSING OFFICER REQUIRED THE COPIES OF THE BANK ACCOUNTS OF THE PARTIES WHO HAD APPLIED FOR SHARE IN CASH WHEN THE GENUINITY OF THE TRANSACTIONS HAS TO BE ESTABLI SHED BEYOND DOUBT. FINDING NO SATISFACTORY EXPLANATION BY THE ASSESSEE TO HIS QUERIES THE ASSESSING OFFICER PROPOSED TO MAKE ADDITION U/S.68 BEING THE AMOUNT OF 17 02 684 RECEIVED IN CASH AND 24 LAKHS WHICH CONFIRMATION HAD NOT BEEN FURNISHED BY THE AS SESSEE TOTALLING 41 02 684. AGGRIEVED THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY WHO CONSIDERED THE CASE OF THE ASSESSEE APPELLANT BEFORE HIM AT LENGTH AND NOTED ON THE UNDISPUTED FACTS NOT REBUTTED BY THE ASSESSEE APPELLANT BEFORE HIM AS NOTED BY THE ASSESSING OFFICER THAT THE SAID AMOUNT WAS RIGHTLY BROUGHT TO TAX. IT WAS THE ASSESSEE WHO WAS REQUIRED TO DISCHARG E THE ONUS THAT LIED UPON HIM FOR PROVING THE CASH CREDITS AND SHARE APPLICATION AS GENUINE WHICH HAS NOT BEEN DISCHARGED THER EFORE WAS NOT A CASE OF THE ASSESSING OFFICER TO ESTABLISHING THEM AS BOGUS FOR THE PURPOSE RELYING ON THE HONBLE APEX COURTS DECISION IN THE CASE OF CIT V. LOVELY EXPORTS P LTD [216 CTR (SC) 195] WHICH RATIO OF THE DECISION HAS TO BE APPLIED LATER. HE C ONFIRMED THE ADDITION. 3. THE LEARNED COUNSEL ARGUED THAT THE AUTHORITIES BELOW COMMITTED GROSS ILLEGALITY AND VIOLATION OF SETTLED LAW BY MAKING 17 02 684 AS UNACCOUNTED CASH CREDIT U/S.68 OF THE I.T.ACT CREDITED IN THE BALANCE SHEET ON ACCOUNT OF SHA RE APPLICATION MONEY INTRODUCED DURING THE IMPUGNED ASSESSMENT YEAR ON THE FACE OF DISCHARGING THE OBLIGATION CAST UPON THE I.T.A.NO. 04/CTK/2011 AND STAY PETITION NO.04/CTK/2011 3 ASSESSEE ON PRODUCTION OF IDENTITIES OF THE SHARE HOLDERS AND THEIR CONFIRMATIONS WHICH IS AGAINST THE RATIO OF DECISION IN THE CASE OF COMMISSIONER OF INCOME - TAX V. STELLER INVESTMENT LTD. [2001] 251 ITR 263 (SC) ALONG WITH THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT V. LOVELY EXPORTS P. LTD (SUPRA). HE ALSO SUPPORTED THE FACTS OF THE ASSESSEES CASE ON THE TRIBUNAL DECISION OF ITAT CUTTACK IN THE CASE OF COSTAL PROJECT PVT. LTD. V. ACIT IN ITA NO.181/CTK/2009 DT.27.7.2010.HE FURTHER ARGUED THADT THE LEARNED ASSESSING OFFICER MADE ADDITION OF 24 LAKHS ON THE ALLEGATION OF UNEXPLAINED CASH CREDIT INTRODUCED IN THE GUISE OF SHARE APPLICATION MONEY IS ILLEGAL AND ARBITRARY AS THE ASSESSEE WAS NOT AFFORDED REASONABLE OPPORTUNITY AS AE TOKEN OF NATURAL JUSTICE WHICH WOULD HAVE ENABLE IT TO DISCHARGE ITS OBLIGATION TO PROVE IDENTITY CREDITWORTHINESS AND GENUINENESS WITH CONFIR MATIONS WHEN THE LEARNED CIT(A) FAILED TO DISCHARGE HIS OBLIGATION BY NOT SEEKING A REMAND REPORT WHEN THE ASSESSEE PRODUCED SAID IDENTITY AND CONFIRMATIONS PRODUCED BEFORE HIM WHICH IS AGAINST THE RATIO OF THE DECISION OF HONBLE APEX COURT IN THE CASE OF TIN BOX COMPANY V. COMMISSIONER OF INCOME - TAX [2001] 249 ITR 216 (SC). 4. HE SUBMITTED THAT THE OBSERVATION OF THE LEARNED CIT(A) THAT NO SUCH EVIDENCE HAD BEEN ADDUCED BY THE ASSESSEE EVEN THOUGH THE ASSESSEE HAD LAWFULLY DISCHARGED ITS OBLIGATION AND SH IFTED THE ONUS TO THE ASSESSING OFFICER BY FURNISHING THE IDENTITY AND CONFIRMATION IS IN COMPLETE DISREGARD OF THE SETTLED LAW. HE FAILED TO APPLY THE LAW IN FORCE TO THE FACT OF SEEKING REMAND REPORT AS PER THE PROVISIONS OF SECTION 250(4) WHEN HE OBSER VED THAT IT WOULD AMOUNT TO SETTING ASIDE THE ASSESSMENT THE POWER OF WHICH IS NOT AVAILABLE WITH CIT(A) W.E.F. 1.6.2001. CONCLUDING HIS ARGUMENT HE SUBMITTED THAT THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIATE THE FACT THAT ON ASSETS DEPRECIATION WA S CLAIMED FOR MORE THAN 180 DAYS WHICH WERE PUT TO USE I.T.A.NO. 04/CTK/2011 AND STAY PETITION NO.04/CTK/2011 4 AGAINST AGREED SETTLEMENT WHICH OTHERWISE CANNOT BE DISALLOWED AS AND WHEN AGREED TO BE PAID FOR LATER ON THE BASIS OF AVAILABILITY OF FUNDS. THE DISALLOWANCE OF DEPRECIATION MAY KINDLY BE CONSIDERED IN ACCORDANCE WITH THE PROVISIONS OF THE I.T.ACT. 5. THE LEARNED DR OBJECTED TO THE LEARNED COUNSELS SUBMISSIONS THAT THE ASSESSING OFFICER HAD BEEN CONFRONTED WITH THE REQUISITE DETAILS IN ORDER TO SATISFY HIMSELF AS TO THE IDENTITY CREDITWORTHINESS AN D GENUINITY OF THE TRANSACTIONS WHEN IT HAS BEEN UNDISPUTEDLY ACCEPTED BY THE ASSESSEE THAT THE SHARE APPLICATION MONEY WAS ON THE BASIS OF CASH RECEIVED AMOUNTING TO 17 02 684. THE UNSECURED LOAN OF 32 80 684 WAS DEFINITELY NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE WHICH AMOUNT THE ASSESSEE CLAIMS HAD BEEN UTILISED TO QUESTION DEPRECIA TION ON ASSETS. THE LEARNED DR SUBMITTED THAT THE UNSECURED LOANS WERE BASICALLY C ONVERTED INTO SHARE CAPITAL IS NOT INDICATED BY ANY ACTION INSOFAR AS THE TOTAL AMOUNT OF 41 02 684 HAS NOT BEEN SUPPORTED BY DOCUMENTARY EVIDENCE SUCH AS IDENTIFY GENUINENESS AND CREDITWORTHINESS OF THE INDIVIDUALS INVOLVED THEREIN. THE APPLICATION OF THE CASE LAWS CITED AT THE BAR THEREFORE BECOME PREMATURE TO THE EXTENT THAT THE ONUS HAD N OT BEEN DISCHARGED BY THE ASSESSEE AS PER THE REQUIREMENT S OF ASSESSING THE SAME UNDER THE PROVISIONS OF SECTION 68. IT IS NOT THE CASE OF THE ASSESSEE THAT HE HAD SATISFIED THE AO TO THE EXTENT THAT IT WAS ONE SIDED HOLDING OF THE SHARE HOLDERS BOGUS AND WHEN ADMITTEDLY CASH HAS BEEN RECEIVED FOR THE SHARE CAPITAL. HE THEREFORE SUPPORTED THE LEARNED CIT(A)S CONTENTION DENYING THE ASSESSEE APPELLANT BEFORE HIM ANOTHER OPPORTUNITY BY WAY OF REMAND REPORT FROM THE ASSESSING OFFICER WHICH IN ITSELF ESTABLIS HES THAT THE ASSESSEE HAD NOT DISCHARGED THE PRIMARY ONUS WHICH LIED UPON HIM. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCE I.T.A.NO. 04/CTK/2011 AND STAY PETITION NO.04/CTK/2011 5 WE ARE INCLINED TO HOLD THAT THE LEA RNED CIT(A) IN HIS WISDOM DID NOT CALL FOR A REMAND REPORT HOLDING IT TO BE UNAVAILABLE TO HIM W.E.F. 1.6.2001 WHEN THE RESTORING OF THE ISSUES TO THE FILE OF THE ASSESSING OFFICER WAS DECLINED. HAVING FOUND THAT THE ASSESSEE HAD NOT FURNISHED ALL THE REQU ISITE DETAILS WHICH NOW IS READY AND THE FACT THAT THE UNSECURED LOANS APPEAR ED TO HAVE BEEN TRANSFORM ED INTO SHARES AS SUBMITTED BY THE LEARNED COUNSEL AS OF NOW WE ARE OF THE CONSIDERED VIEW THAT WHAT COULD NOT BE DONE BY THE LEARNED CIT(A) THAT IS REST ORATION WE ARE DOING THE SAME BY SETTING ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE ADDITION SO MADE AMOUNTING TO 41 02 684 UN DER THE PROVISIONS OF SECTION 6 8 WHEN THE THREE INGREDIENT S NAMELY IDENTITY CREDITWORTHINESS AND GENUINENESS ARE TO BE FULLY ESTABLISHED BY THE ASSESSEE BEFORE HIM. THE ASSESSING OFFICER THEREFORE IS REQUIRED TO PROCEED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT WHEN HE IS TO ESTABLISH BEYOND DOUBT THAT THE INCOME CAN ONLY BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE UNDER THE PROVISIONS OF I.T.ACT AS HAS BEEN DELIBERATED UPON HEREIN ABOVE. THE LEARNED COUNSEL HAS NOT BEEN ABLE TO CORRELATE THE CLAIM OF DEPRECIATION AS DISALLOWED IN ACCORDANCE THAT THE FACT S AS NOTED BY THE ASSESSING OFFICER IN HIS ORDER WHICH THE LEARNED CIT(A) WITHOUT FAULT ACCEPTED AS CONSIDERED BY THE ASSESSING OFFICER WHEN ASSETS WERE PUT TO USE PRIOR TO THEIR PAYMENTS WHETHER COULD BE ALLOWED FOR FULL YEAR DEPRECIATION HAS TO BE VERIFI ED AS PER THE SUBMISSIONS OF THE ASSESSEE BEFORE US. THIS ISSUE ALSO STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION AFRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. 8. THE STAY PETITION THEREFORE STANDS DISMISSED ON THE DISPOSAL OF THE I.T.A.NO. 04/CTK/2011 AND STAY PETITION NO.04/CTK/2011 6 APPEAL AS ABOVE. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 25 TH FEBRUARY 2011 SD/ - SD/ - ( . . . ) ( K.S.S.PRASAD RAO) JUDICIAL MEMBER ( . . ) (K.K.GUPTA) ACCOUNTANT MEMBER. ( ) DATE: 25 TH FEBRUARY 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : M/S.TRIVENI CIVITECH PVT.LTD. PLOT NO. N - 6/536 JAYADEV VIHAR BHUBANESWAR 2 / THE RESPONDENT: INCOME - TAX OFFICER WARD 2(3) BHUBANESWAR. 3 . / THE CIT 4 . ( )/ THE CIT(A) 5 . / DR CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY / BY ORDER [ ] SENIOR PRIVATE SECRETARY ( ) ( H.K.PADHEE ) SENIOR.PRIVATE SECRETARY.