Calcutta High Court
Commissioner Of Income-Tax vs M/S. Sanchati Projects (P) Ltd on 8 June, 2011
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
ITAT 140 OF 2011
G.A.1574 OF 2011
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income-tax)
Original Side
COMMISSIONER OF INCOME-TAX, KOL-III,KOL. Appellant
Versus
M/S. SANCHATI PROJECTS (P) LTD. Respondent
For Appellant : Md.Nizamuddin,Advocate For Respondent :
BEFORE:
The Hon'ble JUSTICE BHATTACHARYA The Hon'ble JUSTICE DR. SAMBUDDHA CHAKRABARTI Date : 8th June, 2011.
THE COURT : This appeal is at the instance of the Revenue and is directed against Order dated 26th November, 2010 passed by the Income-tax Appellate Tribunal, 'B' Bench, Kolkata in ITA No.1791/Kol/2010 relating to the assessment year 2006-07 thereby dismissing the appeal preferred by the Revenue.
Being dissatisfied, the Revenue has come up with the present appeal.
It appears from record that the assessee company during the relevant assessment year under appeal raised its 2 share capital by way of receiving share application money against 1,64,000 equity shares aggregating to Rs.82,00,000/- from 8 different parties. The Assessing Officer, however, treated the share application money of Rs.45,00,000/- received from five different persons as unexplained cash credit in the hands of the assessee.
According to the Assessing Officer, those parties had the same addresses as that of the assessee and they had no fixed assets and utilised their capitals in share application of the assessee company. The Assessing Officer, therefore, was of the view that the money ultimately went to the beneficiary through these companies and there was no advertisement even published by the assessee company inviting share application and no Registrar was engaged for such raising of share capital.
Being dissatisfied the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals), however, set aside the said order of assessment and came to the conclusion that all the share applicant/companies were assessed to the tax and their PAN and acknowledgement of I.T. returns along with their audited balance sheets, bank statements showing transactions etc. were made available to the Assessing 3 Officer. It was pointed out that there was no legal bar of more than one company being registered at the same address and, thus, according to the Commissioner of Income-tax (Appeals), the doubt raised by the Assessing Officer about all those companies at the same address did not hold good.
Being dissatisfied, the Revenue preferred an appeal before the Tribunal below and by the order impugned herein, the said Tribunal has affirmed the order passed by the Commissioner of Income-tax (Appeals).
After hearing Mr. Nizamuddin, learned advocate appearing on behalf of the appellant and after going through the aforesaid materials, we agree with the Tribunal below that the Assessing Officer failed to establish that the share applicants did not have the means to make investment and that such investment actually emanated from the coffers of the assessee company. The receipt of share capital money had been duly recorded in the books of the assessee company and the payment of share application money was also duly recorded in the audited account of each of the share applicants.
We, thus, find that both the authorities below on the basis of the aforesaid materials on record were quite justified in deleting the aforesaid addition of Rs.45,00,000/- done by the Assessing Officer. We are of the view that the order impugned does not suffer from any defect 4 whatsoever and no question of substantial error of law arises justifying our interference.
The appeal is, thus, summarily dismissed. Photostat certified copy of this order be made available to the parties upon compliance of usual formalities.
( BHATTACHARYA, J.) ( DR. SAMBUDDHA CHAKRABARTI, J.) Rsg AR(CR)