DCIT Vs Jaguar Buildcon Pvt. Ltd. (ITAT Delhi)
We find that there is no dispute that the assessee has received share application money from six companies, out of which, from three companies assessee has received premium for sums aggregating to Rs.103,80,00,000/-. In the case of Ganesh Buildcon Pvt. Ltd., Feelgood Creation Pvt. Ltd., and Beyond Management Pvt. Ltd. from whom the assessee has received share application money of Rs.1,79,60,000/- Rs.1,34,70,000/- and Rs.1,34,70,000/-, respectively has been accepted to be genuine. Assessing Officer has only disputed the other three companies as discussed above, merely because the assessee company has received huge premium from such parties. In so far as the initial onus cast upon the assessee for proving the nature and source of the share capital, the assessee had filed various documents.
One of the main allegation of the Assessing Officer is that the notices sent u/s.133(6) were not received on the given date for which it has been clarified before us that within a short span, Assessing Officer has sought lot of information during the period of one week from the parties situated outside Delhi. In fact, all the notices were ultimately duly complied with by these parties who have sent all the requisite details as required by the Assessing Officer in his notices u/s.133(6). Thus, there cannot be reason of compliance of the notices have been made beyond the dates specified by him and as his observation lose its relevance. In fact, these parties have submitted documents with the Assessing Officer directly to him in their replies in response to notice u/s 133(6).
Thus, the reason assigned by the Assessing Officer does not have much credence to dislodge the evidences filed by these parties to corroborate the assessee’s explanation and the documents submitted by the assessee to prove the nature and source of credit. Regarding various observations and allegation of the Assessing Officer, the ld. counsel has given a very detail rebuttal based on documents on record as incorporated above in the foregoing paragraphs. From bare perusal of the explanation duly supported by the documents, we find that whatever so called inquiry which was conducted by him has not lead to any iota of adverse material so as to hold that the transaction is not genuine. The Assessing Officer required the Directors/the representatives of the three companies which were produced before him, the same were duly complied with and not only they were produced but have also confirmed the transaction and given the required documents on the subsequent dates. Once these parties have directly confirmed the transaction with all the documents and the authorized representatives have duly appeared before the Assessing Officer, then without any substantial ground he has disbelieved on a very technical and whimsical reasons.
Here in this case, the investee companies are based outside Delhi and if he was not satisfied with the authorized representative sent by them, then at least he could not have issued a commission u/s.133(1)(d) to be examined by the local Income tax authority. Further, these authorized representative have adduced the document but nowhere Assessing Officer has pointed out what was lacking in such documents which was already submitted by these companies in reply to the notice u/s.133(6) and what extra he wanted to examine, has not been mentioned.
Another allegation by the Assessing Officer was that these companies have received funds from other companies before issuance of cheques through the assessee company and also tried to analyze fund trail to assume that assessee-company had ploughed back its own money in the books of account in the garb of share application money. The said allegation itself is based on erroneous assumption of facts which has been demonstrated by the ld. counsel, from the details of funds chart as reproduced above, specifically in the case of payment made by M/s. Godsons Pvt. Ltd. to the assessee. The chart clearly indicates that against the payment of Rs.42.2 crore to the assessee on 14.07.2010, the company was having funds of Rs.12.25 crore in bank account and the balance amount was received from various parties between 11.06.2010 to 12.07.2010. Further as per the bank statement as on 01.07.2010 there was a bank balance of Rs.21.01 crore in the bank account of M/s. Godsons and M/s. Biotech Ltd. against which the funds were transferred to the assessee-company on 14.07.2010. Thus, this allegation of the Assessing Officer also does not have any basis. Similarly in the case of funds received from M/s. Topgrain Mercantile Company Pvt. Ltd. on 10.05.2010 also it was duly shown that this company has received funds from other parties prior to date. Nowhere in the so called alleged cash trail there is an element of cash or anything has been brought on record that any of the trails, assessee’s undisclosed cash or income has been routed. In fact, none of these bank account requisitioning by the Assessing Officer u/s. 133(6), there was any cash deposits.
Thus, on these facts and circumstances of the case and material on record, it cannot be held that the onus cast upon the assessee to prove the identity, creditworthiness of the investee parties or genuineness of the transaction has not been explained properly nor there is any adverse finding or material gathered from any inquiry that it is a bogus transaction or kind of accommodation entry. Thus, we do not find any reason to tinker and deviate from the finding of the ld. CIT (A) while deleting the addition.
FULL TEXT OF THE ORDER OF ITAT DELHI
The aforesaid appeals have been filed by the Revenue against separate impugned orders of even date, 29.9.2014, passed by Ld. CIT (Appeals)-XXXIII, New Delhi for the quantum of assessment passed u/s. 153A for the Assessment Year 2012-13. Since common issues are involved in both the appeals arising out of almost identical set of facts, therefore, same were heard together and are being disposed of by way of this consolidated order. In the Assessment Year 2011-12, the Revenue has challenged the deletion of addition of Rs.103,80,00,000/- made u/s. 68 on account of unexplained share capital and premium; and in the Assessment Year 2012-13, the Revenue has challenged the deletion of addition of Rs.23 crore made u/s. 68 on account of unexplained share capital and premium.
2. The brief facts and background of the case are that the assessee is engaged in the business of share trading, future option, commodities, consultancy services, and hotel industry. The assessee-company is under construction of hotels at Mumbai at Senapati Bapat Marg, Mahalaxmi Mumbai. For the Assessment Year 2011-12, the assessee had filed its return of income u/s. 139(1) on 26.09.2011 declaring income of Rs.53,21,14,645/- which were duly assessed u/s. 143(1) vide order dated 27.1.2012. On 22.11.2011, the Investigation Wing of the Income Tax Department Conducted Search & Seizure operations u/s 132 of the Income Tax Act, 1961 on different concerns and persons of Gurinder Jit Singh Group. In the said search operations, the case of the appellant company was also covered under search u/s. 132 of the Act. The jurisdiction over the case before the search action was with assessing officer in the charge of CIT, Delhi-II, New Delhi. Consequent upon search operations, the case of the appellant was transferred and centralized with the Dy. CIT, Central Circle-23, New Delhi on 03.12.2012 by the CIT, Delhi-II, New Delhi u/s 127 of the Act. The Dy. CIT, Central Circle-23, New Delhi initiated assessment proceedings u/s 153A in respect of 6 assessment years including the assessment year under consideration. Accordingly, the return of income in response to notice u/s. 153A was filed by the assessee with the ACIT, Circle-23, New Delhi on 17.07.2013 declaring income of Rs.53,21,14,645/-. Thereafter, the CIT (Central)-111, New Delhi assigned this case to the ACIT, Central Circle-19, New Delhi vide his order u/s 127 of the Act dated 12.11.2013. The assessments in the case of the appellant company have been finally completed by the ACIT, Central Circle-19, New Delhi.
3. The Assessing Officer on perusal of the balance-sheet as on 31.3.2011 noticed that assessee’s subscribed share capital has increased to Rs.9,69,00,000/-. During the year under consideration, the assessee has issued Rs.44,90,000/- equity shares at face value of Rs.10/- and has further issued Rs. 51,90,000/- 1% Cumulative Redeemable Preference shares at face value of Rs.10/- per share and further premium of Rs.190/- per share. Thus, the share capital was raised by Rs.108,29,00,000/- which was received from various parties. The details of which has been incorporated in the assessment order, which for the sake of ready reference is reproduced hereunder:-
