Vikrant Investment &Impex Ltd.,, Hyderabad v. ITO, Hyderabad

ITA 657/HYD/2008 | 1996-1997
Pronouncement Date: 31-01-2011 | Result: Dismissed

Appeal Details

RSA Number 65722514 RSA 2008
Bench Hyderabad
Appeal Number ITA 657/HYD/2008
Duration Of Justice 2 year(s) 9 month(s) 20 day(s)
Appellant Vikrant Investment &Impex Ltd.,, Hyderabad
Respondent ITO, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-01-2011
Assessment Year 1996-1997
Appeal Filed On 10-04-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI N.R.S.GANESAN JUDICIAL MEMBER AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.657/HYD/08 : ASSTT. YEAR 1996-97 M/S. VIKRANT INVESTMENT & IMPEX LTD. HYDERABAD ( PAN AAACV 16813 H ) V/S. DY. COMMISSIONER OF INCOME-TAX CIRCLE-1(2) HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CHAITANYA KUMAR RESPONDENT BY : SHRI K.E.SUNIL BABU O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEARS 1996- 97 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER O F INCOME- TAX(APPEALS)-I VISAKHAPATNAM DATED 11.2.2008 FOR T HE ASSESSMENT YEAR 1996-97. 2. EFFECTIVE GROUNDS OF THE ASSESSEE IN THIS APPEAL READ AS FOLLOWS- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ER RED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.35 82 000 BY APPLYING THE PROVISIONS OF S.68 OF THE I.T.ACT. 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN D ISALLOWING DISCOUNTING CHARGES OF RS.23 06 744/- 3. AT THE OUTSET WE MAY NOTE THAT THE LEARNED COUNSE L FOR THE ASSESSEE HAS NOT PRESSED THE GROUND OF APPEAL NO.3 RELATIN G TO ITANO.657/HYD/08 M/S. VIKRANT INVESTMENT & IMPEX LTD. H YD 2 DISALLOWANCE OF DISCOUNTING CHARGES OF RS.23 06 744. TH AT GROUND IS ACCORDINGLY REJECTED AS NOT PRESSED. 4. THE ONLY OTHER ISSUE THAT SURVIVES FOR CONSIDERATI ON IN THIS APPEAL RELATES TO ADDITION OF RS.38 82 000 MADE BY TH E ASSESSING OFFICER BY APPLYING THE PROVISIONS OF S.68 OF THE ACT WHICH HAS BEEN CONFIRMED BY THE CIT(A). 5. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS AN INVESTMENT COMPANY. FOR THE ASSESSMENT YEAR 1996-97 ASSE SSEE FILED RETURN OF INCOME ON 2.12.1996 DISCLOSING A LOSS OF RS.24 2 0 750. ASSESSMENT WAS ORIGINALLY COMPLETED UNDER S.143(3) OF THE ACT VIDE ORDER DATED 31.3.199 ON A TOTAL INCOME OF RS.1 48 1 7 990 AFTER MAKING AN ADDITION OF RS.1 49 32 000 TOWARDS UNEXPLAINED CASH CREDITS IN THE FORM OF SHARE CAPITAL/SHARE APPLICATION MONEY UNDER S.6 8 OF THE ACT AND ANOTHER ADDITION OF RS.23 06 744 ON ACCOUNT OF DISCOUNT ING CHARES. THE SAID ADDITIONS WERE CONFIRMED BY THE CIT(A) VIDE HIS OR DER DATED 22.12.2000 IN THE FIRST ROUND OF APPELLATE PROCEEDING S BEFORE HIM. ON FURTHER APPEAL THE TRIBUNAL VIDE ITS ORDER DATED 28 .2.2006 IN ITA NO.348/HYD/2001 SET ASIDE THE ASSESSMENT AND RESTORED THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO DISPOSE OFF THE CA SE IN ACCORDANCE WITH LAW AFTER DUE VERIFICATION OF THE INCOME -TAX PARTICULARS OF THE SHARE HOLDERS FILED BY THE ASSESSEE COMPANY BEFORE THE TRIBUNAL. 5. IN THE CONSEQUENT ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER CALLED FOR ENTIRE DETAILS OF THE SHAREHOLDERS/SH ARE APPLICANTS. IN RESPONSE ASSESSEE COMPANY FURNISHED COMPLETE INVESTMENTS AND I NCOME- TAX PARTICULARS OF 18 SHARE HOLDERS/SHARE APPLICANTS WH OSE TOTAL INVESTMENTS AMOUNTED TO RS.1 27 50 000. SINCE NO INF ORMATION WAS FURNISHED WITH RELATION TO THE BALANCE SHARE HOLDERS/ SHARE APPLICANTS THE ASSESSING OFFICER TREATED THE BALANCE INVESTMENT OF RS.21 8 2 000 ITANO.657/HYD/08 M/S. VIKRANT INVESTMENT & IMPEX LTD. H YD 3 (RS.1 49 32 000 RS.1 27 50 000) AS UNEXPLAINED CREDI T UNDER S.68 OF THE ACT. EVEN OUT OF THE INVESTMENTS TO THE EXTENT OF RS.1 27 50 000 THE DETAILS IN RESPECT OF WHICH HAVE BEEN FILED BY THE ASSESSEE THE ASSESSING OFFICER DID NOT ACCEPT THE FOLLOWING INVESTMENTS C LAIMED AS GENUINE. (A) RS.5 00 000 CLAIMED AS HAVING BEEN INVESTED IN THE ASSESSEE COMPANY BY M/S. ORIEFF IRON & STEEL PVT. LTD. ON THE GROUND THAT AS PER THE INFORMATION RECEIVED FROM ITO WARD 6(3) K OLKATA IN THE BALANCE SHEET AS ON 31.3.1996 OF THAT COMPANY ALL EGED INVESTMENT OF RS.5 00 000 BY THAT COMPANY IN THE ASSESSE E COMPANY WAS NOT REFLECTED. (B) RS.7 00 000 CLAIMED AS HAVING BEEN INVESTED IN THE ASSESSEE COMPANY BY M/S. VAZIR VANIJYA PVT. LTD. ON THE GROU ND THAT THERE WAS NO RESPONSE TO THE SUMMONS/LETTERS ISSUED BY TH E ASSESSING OFFICER TO THAT COMPANY AND THAT IN THE BALANCE SHEET OF THAT COMPANY THE VALUE OF INVESTMENTS WAS SHOWN AT NIL. (C) RS.5 00 000 CLAIMED AS HAVING BEEN INVESTED IN THE ASSESSEE COMPANY BY M/S. MARKETIERS PVT. LTD ON THE GROUND THAT IN THE BALANCE SHEET AS ON 31.3.2000 OF THAT COMPANY ALLEGED INVESTMENT OF THAT COMPANY IN THE ASSESSEE COMPANY WAS NO T REFLECTED THOUGH IT WAS CLAIMED THAT IT OWNED THOSE SHA RES. ACCORDINGLY THE ASSESSING OFFICER CONCLUDED THAT CREDIT TO T HE EXTENT OF RS.17 00 000 REPRESENTING THE INVESTMENTS CLAIMED IN RE SPECT OF THE ABOVE THREE COMPANIES WAS NOT PROVED. HE THEREFORE MA DE AGGREGATE ADDITION OF RS.38 82 000 UNDER S.68 OF THE ACT WHICH COMPRISED OF INVESTMENTS CLAIMED TO THE EXTENT OF RS.21 82 000 IN RE LATION TO WHICH NO INFORMATION WAS FURNISHED BY THE ASSESSEE AND RS.17 00 00 0 IN RELATION ITANO.657/HYD/08 M/S. VIKRANT INVESTMENT & IMPEX LTD. H YD 4 TO WHICH THOUGH INFORMATION WAS FURNISHED BY THE ASSESSEE GENUINENESS OF THE INVESTMENTS WAS NOT PROVED. THE ASSESSING OFFICER ACCORDINGLY COMPLETED THE ASSESSMENT IN PURSUANCE OF THE DIRECTIONS OF THE TRIBUNAL IN ITS ORDER DATED 28.2.2006 ON A TOTAL INCOME OF RS. 37 67 990 AFTER MAKING INTER ALIA ADDITION TOWARDS UNEXPLAINED CREDIT S TOWARDS SHARE CAPITAL TO THE EXTENT NOT PROVED OF RS.38 82 000 VI DE ORDER OF ASSESSMENT DATED 28.12.2006 PASSED UNDER S.143(3) READ W ITH S.254 OF THE ACT. 6. ON APPEAL THE CIT(A) CONFIRMED THE ADDITION MAD E BY THE ASSESSING OFFICER. HENCE ASSESSEE IS IN SECOND APPEAL BEFORE US. 7. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATING THE CONTENTIONS URGED BEFORE THE LOWER AUTHORITIES SUBMITT ED THAT THE ADDITION OF RS.38 82 000 COMPRISES OF TWO ELEMENTS THE FIRST ONE BEING INVESTMENTS AGGREGATING TO RS.21 82 000 WITH REGARD T O WHICH NO DETAILS COULD BE FIELD BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND THE SECOND ELEMENT BEING INVESTMENTS AGGREGATING TO RS.17 00 000 MADE BY THE THREE COMPANIES VIZ. M/S. ORIEFF IRON & STEEL PVT. LTD. M/S. VAZIR VANIJYA PVT. LTD. AND M/S. MARKETIERS PVT. LTD. INSOFA R AS THE INVESTMENTS AGGREGATING TO RS.21 82 000 IN RELATION TO WHICH NO DETAILS COULD BE FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER HE DID NOT PRESS THIS GROUND. INSOFAR AS THE INVESTMENTS AGGREGATING TO RS.17 00 000 MADE BY THREE COMPANIES AGGREGATING TO RS.17 00 000 IS CONCERNED THE INVESTORS HAVE CONFIRMED HAVING CONTRIBUTED THE CAPITAL OF THE ASSESSEE COMPANY AND AS SUCH THE ASSESSEE HAS DISCHARGED THE BURDEN THA T LIES ON IT FOR PROVING THE INVESTMENTS IN QUESTION. HE SUBMITTE D THEREFORE THAT AT LEAST IN RELATION TO THESE THREE COMPANIES THE ADDI TION OF RS.17 LAKHS MADE BY THE ASSESSING OFFICER UNDER S.68 OF THE ACT IS NOT JUSTIFIED. HE PLACED RELIANCE ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT ITANO.657/HYD/08 M/S. VIKRANT INVESTMENT & IMPEX LTD. H YD 5 V/S. LOVELY EXPORTS (P)LTD. (2008) 216 CTR(SC) 195 I N SUPPORT OF HIS CONTENTIONS. 8. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND STRONGLY RELIED ON THE ORDERS OF THE LOWER AUTHORITIE S AND SUBMITTED THAT THE ASSESSEE HAS NOT ESTABLISHED THE GENUINENESS OF ITS CLAIM AS TO THE INVESTMENTS MADE BY THE THREE COMPANIES IN QUESTION AGGR EGATING TO RS.17 LAKHS AND AS SUCH THE CIT(A) WAS JUSTIFIED IN SUSTAIN ING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER S.68 OF TH E ACT IN THIS BEHALF. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. AGAINST THE TOTAL ADD ITION MADE ON ACCOUNT OF UNPROVED INVESTMENTS CLAIMED TO HAVE BEEN RECE IVED BY THE ASSESSEE TOWARDS ITS CAPITAL OF RS.38 82 000 INSOFAR AS THE FIRST ELEMENT OF RS.21 82 000 WITH REGARD TO WHICH NO DETAILS COULD BE FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS NOTED ABOVE LEARN ED COUNSEL FOR THE ASSESSEE HIMSELF HAS NOT PRESSED THIS GROUND AND AS SU CH WE FIND NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CIT(A) ON THIS ASPECT. EVEN WITH REGARD TO THE OTHER ELEMENT OF THE ADDITI ON REPRESENTING INVESTMENTS AGGREGATING TO RS.17 00 000 CLAIMED TO HAVE BEEN MADE BY THE THREE COMPANIES VIZ. M/S. ORIEFF IRON & STEEL PVT. LTD. M/S. VAZIR VANIJYA PVT. LTD. AND M/S. MARKETIERS PVT. LTD. WE FIND NO MERIT IN THE CONTENTIONS OF THE ASSESSEE IN THIS APPEAL. EVEN IF IT IS ACCEPTED THAT THE ASSESSEE HAS PROVED THE IDENTITY OF THE INVESTOR COMPANIES ASSESSEE CANNOT BE SAID TO HAVE DISCHARGED THE ONUS THAT LIES ON I T TO PROVE THE INVESTMENTS CLAIMED TO HAVE BEEN RECEIVED BY IT. ASSESSEE IS REQUIRED TO ESTABLISH NOT MERELY THE IDENTITY OF THE INVESTOR COMP ANIES BUT ALSO THEIR CREDIT-WORTHINESS AND THE GENUINENESS OF THE TRANSACTION S SO AS TO GET OUT OF THE CLUTCHES OF S.68 OF THE ACT. THE ASSESSING OFFICER HAS MADE NECESSARY ENQUIRIES WHICH REVEALED THAT THE INVESTMENTS CL AIMED TO HAVE ITANO.657/HYD/08 M/S. VIKRANT INVESTMENT & IMPEX LTD. H YD 6 BEEN RECEIVED BY THE ASSESSEE FROM THOSE COMPANIES HAVE NO T BEEN REFLECTED IN THE RELEVANT BALANCE SHEETS OF THE INVESTO R COMPANIES. WHEN THE GENUINENESS OF THE TRANSACTIONS OF INVESTMENTS BY THO SE COMPANIES TOWARDS THE SHARE CAPITAL OF THE ASSESSEE COMPANY ITSELF IS IN DOUBT ASSESSEE CANNOT BE SAID TO HAVE DISCHARGED THE ONUS ON IT T O PROVE THE INVESTMENTS RECEIVED BY IT. IN THE CASE OF LOVELY EXP ORTS (P)LTD. (SUPRA) RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFOR E US THE SUPREME COURT HAS NOT LAID DOWN ANY LAW BUT HAS MER ELY DISMISSED THE SPECIAL LEAVE PETITION OF THE REVENUE. REJECTION OF A SPECIAL LEAVE PETITION CANNOT BE EQUATED WITH LAYING DOWN OF THE L AW ON THE MERITS OF THE ISSUES INVOLVED IN THE CASE. WE ARE SUPPORTED IN THI S BEHALF BY THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF DHINGRA GLOBAL CREDENCE (P) LTD V/S. ITO (2010) 1 ITR (TRIB) 529(DE L). THE DELHI BENCH OF THE TRIBUNAL IN THAT CASE CONSIDERING SIMILAR CIRCUM STANCES HELD THAT WHERE A COMPANY IS UNABLE TO PROVE THE IDENTITY AND CR EDITWORTHINESS OF THE SUBSCRIBERS TO SHARE CAPITAL THE AMOUNTS SHOWN AS SHA RE CAPITAL AND SHARE PREMIUM WILL BE TREATED AS UNEXPLAINED CASH CREDIT AND ADDED TO THE INCOME UNDER S.68. REFERRING TO THE DECISION OF T HE APEX COURT IN THE CASE OF CIT V/S. LOVELY EXPORTS (P)LTD. (SUPRA) THE COOR DINATE BENCH OF THE TRIBUNAL IN THAT CASE NOTED THAT THE OBSERVATIONS OF THE HONBLE SUPREME COURT WHILE DECIDING THE SPECIAL LEAVE PETITI ON IN THE CASE OF LOVELY EXPORTS (P) LTD (SUPRA) CANNOT BE CONSTRUED TO BE A LAW DECLARED WHICH HAS THE EFFECT OF A BINDING PRECEDENT UNDER ART. 141 OF THE CONSTITUTION OF INDIA AND SUCH OBSERVATIONS ARE PURELY O N THE FACTS OF THE RESPECTIVE CASE AND CANNOT BE APPLIED ACROSS THE BOARD EVEN WHEN THE FACTS IN OTHER CASES ARE DIFFERENT. IN THIS VIEW OF THE MATTER AND CONSIDERING THE FACTS OF THE CASE ON HAND WE ARE OF THE VIEW THAT THE ASSESSEE HAS NOT ESTABLISHED THE GENUINENESS OF THE INVESTME NTS CLAIMED TO HAVE BEEN RECEIVED BY IT FROM THE THREE COMPANIES N OTED ABOVE. WE THEREFORE FIND NO INFIRMITY IN THE ORDERS OF THE LO WER AUTHORITIES. WE ACCORDINGLY SUSTAIN THE ADDITION OF RS.38 82 000 MADE B Y THE ASSESSING ITANO.657/HYD/08 M/S. VIKRANT INVESTMENT & IMPEX LTD. H YD 7 OFFICER CONFIRMED BY THE CIT(A) REJECTING THE GROUNDS OF THE ASSESSEE ON THIS ISSUE. 10. IN THE RESULT ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 31.1.2011 SD/- SD/- (N.R.S.GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/- 31ST JANUARY 2011 COPY FORWARDED TO: 1. M/S. VIKRANT INVESTMENT & IMPEX LTD. C/O. SHRI S .RAMA RAO FLAT NO.102 SHIRYA'S ELEGANCE NO.3-6-643 ST. NO.9 HIMAYATNAGAR HYDERABAD 500029. 2. INCOME-TAX OFFICER WARE 3(2) HYDERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS)-I VISAKHAPATNAM . 4. COMMISSIONER OF INCOME-TAX III HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S