Nilchem Capital Ltd.,, Ahmedabad v. The Income tax Officer,Ward-5(1),, Ahmedabad

ITA 957/AHD/2008 | 1996-1997
Pronouncement Date: 04-08-2010 | Result: Allowed

Appeal Details

RSA Number 95720514 RSA 2008
Assessee PAN AABCN0273G
Bench Ahmedabad
Appeal Number ITA 957/AHD/2008
Duration Of Justice 2 year(s) 4 month(s) 22 day(s)
Appellant Nilchem Capital Ltd.,, Ahmedabad
Respondent The Income tax Officer,Ward-5(1),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 04-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 04-08-2010
Date Of Final Hearing 04-08-2010
Next Hearing Date 04-08-2010
Assessment Year 1996-1997
Appeal Filed On 13-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH C CC C BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI T.K.SHARMA T.K.SHARMA T.K.SHARMA T.K.SHARMA JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER AND AND AND AND SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER DATE OF HEARING:6-8-2010 DRAFTED ON: 6-8-2010 ITA NO. 957 /AHD/ 2008 ASSESSMENT YEAR :1996-97 NILCHEM CAPITAL LTD. C/O.SHOP NO.8 4 TH FLOOR SWASTIK SUPER MARKET ASHRAMROAD AHMEDABAD. VS. INCOME TAX OFFICER WARD 5(1) C.U.SHAH BUILDING ASHRAM ROAD AHMEDABAD. PAN/GIR NO. : AABCN 0273G (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI SUNIL H .TALATI. RESPONDENT BY: SHRI SHELLY JINDAL CIT (D.R.) O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XI AH MEDABAD DATED 6-12-2006. 2. THE SOLE GROUND OF APPEAL OF THE ASSESSEE IS THA T LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE PENALTY OF `.53 73 470/- LEVIED UNDER SECTION 271( 1)(C) OF THE ACT. 3. AT THE OUTSET THE LEARNED AUTHORISED REPRESENTAT IVE OF THE ASSESSEE FILED BEFORE US COPY OF THE ORDER OF THE T RIBUNAL PASSED IN THE QUANTUM APPEAL OF THE ASSESSEE AND REVENUE VIDE CON SOLIDATED ORDER DATED 8-5-2009 IN ITA NO.3445/AHD/2004 & ITA N0.92 /AHD/05 IN ASSESSMENT YEAR 1996-97AND SUBMITTED THAT THE ISSUE OF ADDITION MADE ON ACCOUNT OF INVESTMENT IN SHARE CAPITAL AMOU NTING TO `.1 25 51 020/- SUSTAINED BY THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) OUT OF THE TOTAL ADDITION OF `.8 20 16 00 0/- ON ACCOUNT OF - 2 - INVESTMENT IN SHARE CAPITAL AND `.36 79 020/- ON AC COUNT OF UNSECURED LOANS MADE BY THE LEARNED ASSESSING OFFICER HAS BEE N RESTORED BACK BY THE TRIBUNAL TO THE FILE OF THE LEARNED ASSESSIN G OFFICER FOR ADJUDICATION AND THEREFORE THE PRESENT ISSUE OF LE VY OF PENALTY ON ADDITION OF `.1 25 51 020/- OUT OF INVESTMENT IN SH ARE CAPITAL ON UNSECURED LOAN SHOULD ALSO BE RESTORED BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR FRESH ADJUDICATION IN LIGHT OF THE DECISION ARRIVED AT IN THE SET ASIDE ASSESSMENT BY THE LEARNED ASSES SING OFFICER. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE AGREED W ITH THE SUBMISSIONS OF THE LEARNED AUTHORISED REPRESENTATIV E OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT IN THE QUANTUM A PPEAL FILED BY THE ASSESSEE AND THE REVENUE AGAINST ORDER OF THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) THE TRIBUNAL HAS HELD AS U NDER :- WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIALS ON RECORD. IN OUR CONSIDERED VIEW THE MA TTER REQUIRES RECONSIDERATION IN RESPECT OF SOME CASES WHERE ASSE SSEE IS NOT ABLE TO PROVE EVEN THE IDENTITY OF SHAREHOLDERS. TH ERE IS NO DISPUTE ON THE PROPOSITION THAT THE DECISION OF HON 'BLE DELHI HIGH COURT IN LOVELY EXPORTS (P) LTD. (SUPRA) WOULD BE APPLICABLE THE ONUS ON THE ASSESSEE LIES ONLY TO THE EXTENT OF ESTABLISHING THE IDENTITY OF THE SHAREHOLDERS. IF THE ASSESSEE I S ABLE TO THE IDENTITY OF SHAREHOLDERS THEN NO ADDITION UNDER SEC TION 68 CAN BE MADE EVEN IF THE SHARE APPLICATION HAS NO CREDI TWORTHINESS OR EVEN IF THEY ARE BOGUS. ON A QUERY FROM THE BENC H IT WAS INFORMED BY THE LD. LEARNED AUTHORISED REPRESENTATI VE THAT SHARE CERTIFICATES HAVE BEEN DISPATCHED AND RECEIVE D BY ALL THE SHAREHOLDERS. IN OTHER WORDS THE ASSESSEE COMPANY WOULD HAVE FURNISHED ADDRESSES OF THE SHAREHOLDERS WHICH IS A PPARENTLY DIFFERENT FROM THE ADDRESSES GIVEN IN THE SHARE APP LICATION FORM AS OTHERWISE QUESTION OF NON-SERVICE OF NOTICES ISS UED BY THE DEPARTMENT UNDER SECTION 133(6) WOULD NOT HAVE ARIS EN. FOLLOWING THE DECISION OF HON'BLE DELHI HIGH COURT IN LOVELY EXPORTS (P) LTD. (SUPRA) WE HOLD THAT ONLY ONUS LI ES ON THE ASSESSEE TO ESTABLISH IDENTITY OF THE SHAREHOLDERS AND FOR THIS IT MUST PROVIDE THE ADDRESSES TO THE DEPARTMENT WHERE SHARE CERTIFICATES HAVE BEEN SENT BY THE ASSESSEE COMPANY OR ITS AGENT. IT IS THEREAFTER FOR THE DEPARTMENT TO PURSU E THE MATTER AND FIND OUT WHETHER THEY ARE GENUINE OR BOGUS OR W HAT ACTION IT - 3 - REQUIRES TO TAKE IN THEIR CASE. IF NOTICES ARE SERV ED ON THE NEW ADDRESSES WHICH ARE TO BE PROVIDED BY THE ASSESSEE THEN NO ACTION IS CALLED FOR IN THE CASE OF THE ASSESSEE N O ADDITION UNDER SECTION 68 IS REQUIRED. ONLY IN THOSE CASES WHERE A DDRESSES ARE BOGUS AND THERE IS NO PERSON OF THE NAME IN WHICH S HARE APPLICATION IS FILED AND SHARE CERTIFICATE IS ISSUE D THEN ADDITION MAY BE CALLED FOR. FURTHER IN THOSE CASES WHERE NO TICES HAVE BEEN ISSUED BY THE ASSESSING OFFICER BUT THEY HAVE NOT BEEN RECEIVED BACK THEN PRESUMPTION CANNOT BE RAISED THA T SUCH PERSONS ARE BOGUS. HOWEVER ASSESSEE WOULD PROVIDE ADDRESSES IN RESPECT OF 56 PERSONS ON WHICH IT HAS ISSUED SHA RE CERTIFICATES AND CLAIMED TO HAVE BEEN RECEIVED BY THOSE APPLICAN TS. THE ASSESSEE WILL BE CONFRONTED BY THE A.O. ONLY IN RES PECT OF OTHERS IT IS FOR THE DEPARTMENT TO TAKE ACTION AS THEREAFT ER NO ONUS LIES ON THE ASSESSEE. IN THOSE CASES WHERE NOTICES ARE N OT SERVED AND RETURNED BACK TO THE A.O. OPPORTUNITY WILL BE GIVEN TO ASSESSEE TO PROVE THE IDENTITY OF THE SHAREHOLDERS. 6. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN VIEW THE SUBMISSIONS OF BOTH THE PARTIES WE SET ASI DE THE ORDERS OF THE LOWER AUTHORITIES AND RESTORE THE ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT TO THE FILE OF THE LEARNED ASS ESSING OFFICER FOR FRESH ADJUDICATION AFTER ALLOWING A REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE IN THE LIGHT OF THE DECI SION TAKEN IN THE SET ASIDE ORDER PASSED PURSUANT TO THE ORDER OF THE TRI BUNAL DATED 8-5- 2009. THUS THIS GROUND OF APPEAL IS ALLOWED FOR ST ATISTICAL PURPOSES. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 8. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF TH E HEARING IN THE PRESENCE OF THE PARTIES ON THIS THE 04 TH DAY OF AUGUST 2010. SD/- SD/- (T.K. (T.K. (T.K. (T.K. SHARMA) SHARMA) SHARMA) SHARMA) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 4 TH DAY OF AUGUST 2010 PATKI - 4 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 4-8-2010 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 4-8-2010 ------- ------------ 3. DRAFT PROPOSED & PLACED 4-8-2010 -------------- ----- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED --------------- ----- -------------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S ---------------- - ------------------- 6. KEPT FOR PRONOUNCEMENT ON ---------------- -- ------------------ 7. FILE SENT TO THE BENCH CLERK ---------------- -------------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- -- ------------------