2009-VIL-332-ITAT-DEL
Equivalent Citation: TTJ 125, 484, [2010] 38 SOT 6 (DELHI) (URO)
Income Tax Appellate Tribunal DELHI
IT APPEAL NO. 14 (DELHI) OF 2007
Date: 29.07.2009
INCOME TAX OFFICER.
Vs
ORBITAL COMMUNICATION (P) LIMITED.
BENCH
Member(s) : R. P. TOLANI., R. C. SHARMA.
JUDGMENT
This is Revenue appeal. Grounds of appeal are raised as under:
"(i) The learned CIT(A)-XVI,New Delhi, vide its order in Appeal No. 233 of 2007-08, dt.1st Oct., 2008deleted the addition of Rs. 1,70,00,000 made by the AO on account of share application received during the period under consideration.
(ii) The learned CIT(A)-XVI, Delhi, has erred in deleting the addition made by the AO without considering the fact that there are huge deposits some times in cash running into crores of rupees into the bank account of Mrs. Shakuntla Devi, Prop.S.K.Lands& Finance Company, who has given share application money to the assessee company and in the absence of production of Mrs. Shakuntla Devi, the source of such deposits remains unverified.
(iii) The appellant craves to be allowed to add, delete or amend any other grounds of appeal."
2. Learned Departmental Representative relied on the order of AO.
3. Learned counsel for the assessee contents that as appears from Revenue's grounds of appeal the addition in question has been made for share application money received by assessee.
4. Learned counsel for the assessee contents that the AO in original proceedings added this amount under s. 68 to income of the assessee. Vide order dt.30th Nov., 2006Tribunal set aside the mater back to the file of AO to decide on merits after giving reasonable opportunity of hearing to the assessee. The additions were made again though assessee gave complete details about the share applicant Smt. Shakuntla Devi who was assessed to income-tax and the fact of having applied for shares of company appeared in her balance sheet of the year in question.
5. The AO however, made the additions again, in first appeal assessee again filed the documents i.e., (i) Income-tax return of Smt. Shakuntla Devi, Proprietor S.K. & Finance, computation of income, copies of accounts, bank statement, PAN. The CIT(A) forwarded the details to AO for examination and remand report. The AO however, commented that Smt. Shakuntla Devi was not produced by the assessee. CIT(A) however, examined the material available on record including the documents filed in respect of Smt. Shakuntla Devi and deleted the addition by following observations:
"I have examined the remand report furnished by the AO as well as the submission filed by. the AO of the appellant vide his letter dt.11th June, 2005and rejoinder dt.2nd Jan., 2008. The appellant has filed copy of the bank statement of M/s S.K. Land & Finance Co. (Prop.) Smt. Shakuntla Devi along with a typed copy of bank statement where narrations of the credit and debit entries have been given. The appellant has also filed copy of the assessment order of Smt. Shakuntla Devi for the asst. yr. 2001-02. It is seen from the details that entire money of Rs. 1,70,00,000 which was received during the financial year 2000-01 as share application money by the appellant was transferred from the bank account of M/s S.K. Land & Finance Co. running with SBI, Mahrauli Road Branch, Gurgaon as under:
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Date Cheque number Amounts
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20-6-2000 520686 10,00,000
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21-8-2000 521086 20,00,000
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17-11-2000 521983 50,00,000
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1-9-2000 521898 10,00,000
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6-12-2000 521997 20,00,000
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30-12-2000 349910 20,00,000
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7-2-2001 86946 10,00,000
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6-3-2001 349958 10,00,000
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14-3-2001 349966 10,00,000
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17-3-2001 349970 10,00,000
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It is also seen from the bank statement that most of the money deposited in M/s S.K. Land & Finance Co. is credited by way of transfer or clearing. Therefore, the observation made by the AO in remand report that most of money was deposited by way of cash is not correct. I have also gone through the copy of balance sheet of M/s S.K. Land & Finance Co. filed before me. It is seen that the entire amount of Rs. 1,70,00,000 received by the appellant is shown in her balance sheet as 'advance to be recoverable in cash or in kind'. The balance amount of Rs. 13,00,000 was received in financial year 1999-2000 relevant to asst. yr. 2000-01. It is also seen from the details filed by the appellant that Smt. Shakuntla Devi Prop. M/s S.K. Land & Finance Co. is assessed to tax with Asstt. CIT Central Circle 14 and for asst. yr. 2001-02, she has been assessed at Rs. 93,33,166."
6. Learned counsel further contents that not only the identity and credit worthiness of the share applicant Smt. Shakuntla Devi and genuineness is demonstrated from the record besides Hon'ble Supreme Court in the case of CIT vs. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195 : (2008) 6 DTR (SC) 308 has clearly held that the share application money received by the assessee cannot be regarded as undisclosed income of the assessee. This judgment has been followed a number of cases by the Tribunal; in view thereof the CIT(A) order is correct.
7. We have heard the rival contentions and perused the material available on record. The facts have been narrated above. In our view the assessee produced substantial evidence to establish the identity and credit worthiness of Smt. Shakuntla Devi, genuineness of share application is also manifest from record. Therefore, non-production of Smt. Shakuntla Devi cannot be considered to negate the evidentiary value of rest of material. The issue about share application money being undisclosed income of assessee has been set at rest by Hon'ble Supreme Court in the case of Lovely Exports (P) Ltd. holding that such additions cannot be made in assessee's hands. In view thereof we uphold the order of CIT(A).
8. In the result Revenue's appeal is dismissed.
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