Income Tax Appellate Tribunal - Chandigarh
M/S Pooja Industries Pvt. Ltd., ... vs Ito, Ludhiana on 8 October, 2018
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, "बी" च डीगढ़
I N T H E I NC O ME T A X A P PE L L A T E T RI B U N AL
D I VI S I O N B E NC H , ' B ' , C H AND I G AR H
ी संजय गग , या यक सद य एवं डा. बी.आर.आर, कुमार, लेखा सद य
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND
Ms. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No. 1 0 1 6 / C H D / 2 0 1 6
नधा रण वष / Assessment Year : 2012-13
M/s Pooja Industries Pvt Ltd., बनाम The ITO, Ward-II(2),
B-32, 1233/A, Street No.4, Ludhiana
Village Ghalewal,
Rahon Road, Ludhiana
थायी लेखा सं./PAN NO: AAACP9845P
अपीलाथ /Appellant यथ /Respondent
नधा रती क ओर से/Assessee by : Shri Ashwani Kumar, CA
राज व क ओर से/ Revenue by : Sh. Ashish Gupta, CIT DR
सन
ु वाई क तार%ख/Date of Hearing : 12.07.2018
उदघोषणा क तार%ख/Date of Pronouncement : 08. 10. 2018
आदे श/Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 31.08.2016 of the Commissioner of Income Tax (Appeals)-1, Ludhiana [hereinafter referred to as CIT(A)].
2. The assessee has taken following grounds of appeal:-
1. That the order passed u/s 250(6) by the Ld. CIT(A)-I, Ludhiana is against law and facts on the file in as much as she was not justified to arbitrarily uphold the addition of Rs. 4.00 crores received by the appellant company as share application / share premium through M/s Casper Enterprises Pvt Ltd and M/s Vanguard Jewel Ltd made by Ld. Assessing officer u/s 68 of the Income-
tax Act, 1961.
ITA No.1016 Chd/2016- M/s Pooja Industries Pvt. Ltd, Ludhiana 2
2. That she was further not justified to arbitrarily uphold the addition of Rs. 20,12,500/- received by the appellant company as share premium from m Shri Surinder Kumar & Sons, Sh. Shiv Kumar & Sons and Smt. Divya Gupta on the ground that the identity, creditworthiness and genuineness of the persons was not proved.
3. Ground No.1: This ground of appeal relates to the addition of Rs. 4 crores made into the income of the assessee by the Assessing officer on account of amount received as share application / share premium from two companies namely M/s Casper Enterprises Pvt. Ltd and M/s Vanguard Jewel Ltd. The Assessing officer in this case received information through Director General of Income Tax (Investigation) [DGIT (Inv.)], Mumbai vide letter dated 3.7.2014 that during the said financial year the assessee had taken accommodation entries of Rs. 2 crores each from the above named two companies. The basis of the above information was statement recorded of one Shri Parveen Kumar Jain during search and survey operation carried out at his group on 1.10.2013. During his statement recorded, the said Shri Parveen Kumar Jain admitted to the Income-tax authorities that he was indulged in providing accommodation entries for commission to various persons and entities. The Assessing officer observed that the aforesaid two concerns from whom the assessee allegedly received share application money were being controlled by Shri Parveen Kumar Jain. He further observed that both the aforesaid concerns had shown losses during the relevant year and it raised a doubt as to why these loss making companies would make investment of such a huge amount in the assessee company. On being asked to explain in this respect, the assessee explained that the assessee had some future business plans and in ITA No.1016 Chd/2016- M/s Pooja Industries Pvt. Ltd, Ludhiana 3 order to accomplish those plans, a fair value of shares were assessed at and the shares were issue at Rs. 125 per share. The aforesaid companies applied of the allotment of equity shares and the assessee had allotted shares as per law and all payments were received through account payee cheques / RTGS/NEFT. The assessee also provided the relevant documents such as copies of account of the aforesaid companies in the books of the assessee, copies of share ledger in the books of the assessee, copies of the company master data, copy of bank statement, PAN number of the aforesaid companies, letters of confirmation from the aforesaid companies, balance sheets and Memorandum and Article of Association of the aforesaid companies and further resolution passed at the meeting of the Board of Directors and copies of certificates of incorporation of the aforesaid companies. However, the Assessing officer was not satisfied with the aforesaid documents / information supplied by the Assessing officer. He noted that one Shri Chander Shekher Goyal, Broker, in his statement to the Investigation Wing had stated that one of the aforesaid companies namely M/s Vanguard Jewel Ltd was controlled by Shri Parveen Kumar Jain. He further observed that even Shri Parveen Kumar Jain had admitted that he was indulged in providing bogus / accommodation entries to various persons. Further, during the search action at the group concern of Shri Parveen Kumar Jain, statement of one Shri Nilesh Parmar Prop. of M/s Mohit Enterprises, one of the concern allegedly run by Shri Parveen Kumar, was also recorded and in his statement he had stated that he was employee of Shri Parveen Kumar Jain and that he named 33 concerns which were controlled by Shri Parveen Kumar Jain for providing accommodation entries. That the aforesaid two companies namely M/s ITA No.1016 Chd/2016- M/s Pooja Industries Pvt. Ltd, Ludhiana 4 Casper Enterprises Pvt Ltd. and M/s Vanguard Jewel Ltd. also amongst those 33 companies. He further observed that one Shri Manish Jain was the director of the aforesaid two concerns and that he was relative of Shri Parveen Kumar Jain. He further observed that the assessee was asked to produce Shri Manish Jain before the Assessing officer but he did not produce him, hence, on the basis of the aforesaid report received from the Investigation wing, the Assessing officer held that the assessee had obtained accommodation entries of Rs. 2 crores which was unexplained income of the assessee. He therefore, made addition of Rs. 4 crores into the income of the assessee u/s 68 of the Income-tax Act, 1961.
4. The assessee unsuccessfully contested the appeal before the CIT(A).
5. Before us, the Ld. AR of the assessee has submitted that the assessee had submitted all the requisite documents to prove the genuineness of the transactions such as copies of account of the aforesaid companies in the books of the assessee , copies of share ledger in the books of the assessee, copies of the company master data, copy of bank statement, PAN numbers of the aforesaid companies, letters of confirmation from the aforesaid companies, balance sheets and Memorandum and Articles of Association of the aforesaid companies and further resolution passed at the meeting of the Board of Directors and copies of certificates of incorporation of the aforesaid companies. He has further submitted that the payment was received through banking channel. That there was no evidence that the own money or cash has travelled from the assessees to the aforesaid companies. That even there was no evidence on file that the aforesaid companies who had invested in the assessee company were companies of Shri Parveen Jain ITA No.1016 Chd/2016- M/s Pooja Industries Pvt. Ltd, Ludhiana 5 and that Shri Parveen Jain has never stated that he had given any accommodation entries to the assessee. The Ld. Counsel has further submitted that the aforesaid two companies are validly incorporated companies and that the shares issued by the assessee company are still standing in the name of above two companies. The Ld. counsel has further invited our attention to page 18 of the paper book which is letter dated 24.3.2015 addressed to the Assessing officer whereby the assessee had requested that on the basis of the alleged statement recorded by Investigation Wing at Mumbai, addition should not be made into the income of the assessee without giving opportunity to the assessee of confronting / cross examining them. The Ld. Counsel has further submitted that the Assessing officer even did not supply the copy of the statement of any person including that of Shri Parveen Jain what to say of giving any opportunity to cross-examining them. He has further submitted that the addition have been made only on assumption and presumption basis. The Ld. counsel for the assessee has also relied upon the following case laws:-
1. CIT Vs. Stellar Investment Ltd (1991) 1092 ITR 287 (Delhi H.C.) 2 CIT Vs. Stellar Investment Ltd (2001) 251 ITR 263 (SC) 3 CIT Vs. Divine Leasing & Finance Ltd (2007) 299 ITR 268 (Delhi H.C.) 4 CIT Vs. Lovely Exports P. Ltd (2008) 216 CTR 195 (SC) 5 CIT Vs. GP International Ltd (2010) 325 ITR 25 Pb.& Haryana H.C.) 6 CIT Vs. Real Time marketing (P) Ltd (2008) 306 ITR 35 (Delhi H.C.) 7 CIT Vs. Value Capital Services (P) Ltd (2008) 307 ITR 334 ((Delhi H.C.) 8 CIT Vs. Orbital Communication (P) Ltd (2010) 327 ITR 560 (Delhi H.C.) 9 CIT v Dwarkadhish Investment (P) Ltd (2010) 330 ITR ITA No.1016 Chd/2016-
M/s Pooja Industries Pvt. Ltd, Ludhiana 6 298 (Delhi) 10 CIT Vs. Winstral Petrochemicals (P) Ltd (2011) 330 ITR 603 (Delhi H.C.) 11 CIT Vs. Fair Finvest Ltd (2014) 357 ITR 146 (Delhi H.C.) 12 CIT v Ganeshwari Metal P Ltd (2014) 361 ITR 10 (Delhi H.C.) 13 Copy of judgement of Hon'ble ITAT, Chandigarh Bench in the case of M/s Louts Integrated Texpak Ltd. 14 Copy of judgement of Hon'ble ITAT Chandigarh Bench in the case of Mandi Alloys (P) Ltd in ITA No. 222/Chandi/2005 15 Copy of judgement of Hon'ble ITAT Chandigarh Bench in the case of M/s A./P. Refinery Pvt Ltd in ITA No. 572/Chandi/2015 16 CIT v K.C. Pipes Pvt. Ltd (2016) 386 ITR 532 (Pb & Haryana High Court) 17 Andaman Timber Industries Vs. CIT [2015] 62 taxmann. Com 3 (SC)
6. On the other hand, Ld. DR has submitted that from the statement recorded by the Investigation wing of, Shri Parveen Jain, Shri Chander Shekhar, broker and Shri Nilesh Parmar, employee of Shri Parveen Kumar Jain, it was established that the Shri Parveen Kumar Jain and group concern were engaged in providing accommodation entries. That the assessee was also one of the beneficiaries. He has further stated that not only the direct evidence but surrounding circumstances have also to be looked into. That the aforesaid companies had no reason to invest in the assessee company. He, therefore, relying upon the findings of the lower authorities submitted that the additions have been rightly made in the case of the assessee.
7. We have considered the rival submissions and have also gone through the record. Admittedly, in this case the Assessing officer of the assessee has not made any independent investigation. He has simply relied upon the ITA No.1016 Chd/2016- M/s Pooja Industries Pvt. Ltd, Ludhiana 7 statements recorded by the Investigation Wing, Mumbai during the course of search action at the premises of Shri Parveen Kumar Jain, one Shri Parveen Kumar Jain and two persons namely Shri Chander Shekhar, broker and Shri Nilesh Parmar, alleged employee of Shri Parveen Kumar Jain. Shri Parveen Kumar Jain during the course of search has nowhere stated that he has given any accommodation entries to the assessee. Even the Revenue could not establish link between the aforesaid two companies who had invested in the assessee company with Shri Parveen Kumar Jain except from the uncorroborated statement of a third party namely Nilesh Parmar. What has come out from the record is that one Shri Manish Jain is the director of the aforesaid companies. Though, the case of the Revenue is that the said Manish Jain is relative of Shri Parveen Kumar Jain and had acted on behalf of Shri Parveen Kumar Jain but there is no evidence on the file to establishing the aforesaid link except the statement of one Shri Nilesh Parmar, alleged employee of Shri Parveen Kumar Jain. The assessee specifically made request to the Assessing officer that the assessee had supplied all the relevant details for providing the genuineness of the transactions and that if Assessing officer wants to rely on any statement of any persons, the assessee must be allowed to confront / cross examine him but the aforesaid request of the assessee was not acceded to by the Assessing officer. Even it is case of the assessee that assessee has not been supplied the alleged copy of statement of the aforesaid persons upon which the Assessing officer has relied upon, to which there is no rebuttal by the Department. There is no evidence on the file that any cash was deposited in the accounts of the aforesaid companies before being routed to the assessee company through banking channels. This is a case of no ITA No.1016 Chd/2016- M/s Pooja Industries Pvt. Ltd, Ludhiana 8 investigation by the Assessing officer except to place reliance on certain statements recorded of Shri Parveen Kumar Jain and his associated persons by the Investigation Wing at Mumbai during the search action carried out at the premiSes of Shri Parveean Kumar Jain. However, in the said statements, it has been generally stated that Shri Parveen Kumar Jain was indulged in providing accommodation entries. However, neither there is any specific allegation nor any evidence that the transactions relating to the investment of amount invested by the aforesaid two companies namel y M/s Casper Enterprises Pvt. Ltd and M/s Vanguard Jewel Ltd. into the assessee company, was a bogus transaction. The addition in this case has been made on the basis of assumption without bringing any reliable evidence on file that the amount invested in the assessee company was a result of any bogus transaction.
8. Though the assessee has relied upon various case laws of the higher authorities in his favour to contend that the additions are not warranted in this case, however, without going to the legal prepositions, we are of the view that this case can be decided on its factual aspects and after appreciation of evidence on the file. We are of the view that the additions are not warranted in this case on the basis of assumptions without any reliable evidence suggesting that aforesaid transactions were not genuine. In view of this, we do not find any justification on the part of the lower authorities treating the aforesaid investments in the assessee company as bogus transactions. The addition made by the lower authorities are therefore, ordered to be deleted. Ground No.1 of the appeal stands allowed.
ITA No.1016 Chd/2016- M/s Pooja Industries Pvt. Ltd, Ludhiana 9
9. Ground No. 2 - In this ground the assessee has agitated the addition made by the lower authorities on account of share premium received from three persons namely Sh. Surinder Kumar & Sons (HUF), Shiv Kumar & Sons (HUF) and Smt. Divya Gupta. The assessee to prove the genuineness of the transactions, furnished before the Assessing officer copies of bank statements of the aforesaid three persons, copies of their Income-tax returns alongwith PAN numbers, copies of share application forms and copies of share allotment letters also. The Ld. Counsel for the assessee has further submitted that the assessee had also issued shares at the same rate along with share premium even to the family members of the directors. A perusal of the assessment order reveals that the Assessing officer has not made any observation regarding the creditworthiness of the aforesaid persons. However, he has disallowed the share premium received by the assessee from the aforesaid persons observing that there was no reason for the aforesaid persons to pay share premium for purchasing the shares of the assessee company. He has allowed the share application money but disallowed the share premium part. As observed above, the Assessing officer has neither made any investigation nor rebutted evidences furnished by the assessee. The assessee has furnished all the requisite details before the Assessing officer to prove the genuineness of the transactions.
10. We find the additions have been made merely on the assumption and presumption. The addition made merely on the assumption and presumption is not tenable in law especially when the assessee has discharged the primary burden of proving by evidences of the genuineness of the transactions and creditworthiness of the alottees. In view of this, we do ITA No.1016 Chd/2016- M/s Pooja Industries Pvt. Ltd, Ludhiana 10 not find any justification the part of the lower authorities in making the impugned additions. The disallowance in respect of the same is accordingly set aside. Ground No.2 of the appeal stands allowed.
In the result the appeal of the assessee stands allowed. Order pronounced in the Open Court on 08.10.2018 Sd/- Sd/-
(अ नपण ू ा ग+ु ता / ANNAPURNA GUPTA) (संजय गग / SANJAY GARG) लेखा सद य/ Accountant Member या यक सद य/ Judicial Member Dated : 08. 10. 2018 "आर.के."
आदे श क त,ल-प अ.े-षत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आय/ ु त/ CIT
4. आयकर आय/ ु त (अपील)/ The CIT(A)
5. -वभागीय त न2ध, आयकर अपील%य आ2धकरण, च4डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायक पंजीकार/ Assistant Registrar