Income Tax Appellate Tribunal - Ahmedabad
M/S. Namison Powertech Pvt. Ltd.,, ... vs The Acit, Bharuch Circle,, Bharuch on 21 September, 2017
ITA No. 218/Ahd/2015 Namision Powertech Ltd vs. ACIT Assessment Year: 2010-11 Page 1 of 2 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD "C" BENCH, AHMEDABAD [Coram: Pramod Kumar AM and Mahavir Prasad JM] ITA No. 218/Ahd/2015 Assessment Year: 2010-11 M/s. Namision Powertech Pvt Ltd ..............................Appellant Plot No.1004, GIDC Industrial Estate, Waghodia, Vadodara [PAN: AACCN 9984 F] Vs. ACIT ............................Respondent Bharuch Circle, Bharuch Appearances by:
Mukund K. Rao for the appellant Alok Kumar for the respondent Date of concluding the hearing : 24.07.2017 Date of pronouncing the order : 21.09.2017 O R D E R Per Pramod Kumar AM:
1. By way of this appeal, the assessee has challenged correctness of the order of the learned CIT(A)-III, Baroda dated 23.12.2015, in the matter of assessment under Section 143(3) of the Income-tax Act, 1961, for the assessment year 2010-11.
2. Grievance raised by the assessee, in short, is against ld. CIT(A)'s confirming addition of Rs.19,00,000/- as cash credit in respect of share application money received from Smt. Pammi Sandesara, daughter of one of the directors of the assessee-company.
3. To adjudicate on this appeal, a few material facts need to be taken note of.
During the course of assessment proceedings, the Assessing Officer noted that the assessee-company has received share capital subscription of Rs.19,00,000/- from one Smt. Pammi Sandesara. When the Assessing Officer probed the matter further and perused the confirmation of the bank statements etc., he was of the view that source of funds in the hands of Smt. Pammi Sandesara and creditworthiness was not proved. The assessee's explanation that Smt. Pammi Sandesara is a resident of USA and money was received in US dollars through her ICICI bank account in India, which did not impress the Assessing Officer. The Assessing Officer proceeded to make an addition of Rs.19,00,000/- received as share subscription money by the company as unexplained ITA No. 218/Ahd/2015 Namision Powertech Ltd vs. ACIT Assessment Year: 2010-11 Page 2 of 2 cash credit. Aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) but without any success. The assessee is in further appeal before us.
4. During the course of proceedings before us, the learned counsel for the assessee has invited our attention to a copy of passport of Smt. Pammi Sandesara which shows that she is a resident of USA, as also earning statements of her husband issued by NetApp Inc, USA. It is also pointed that Smt. Pammi Sandesara is the daughter of one of the directors of the company - a fact which is not in dispute by the authorities below. Learned Counsel also invited our attention to the facts that payments are made through banking channels and the receipts in the bank account of the shareholder are also through banking channels. Learned Departmental Representative, on the other hand, does not have much to say beyond submitting that all these evidences were not filed before the authorities below.
5. We have noticed that the relationship between the assessee-company and the shareholder is well established in the sense that the shareholder is the daughter of one of the directors of the company. It is, therefore, not a transaction between two strangers. We have also noticed that the earning statements of Smt. Pammi Sandesara's husband and her bank accounts show prima facie evidence of the means of the shareholder. The amounts have been received through the banking channels. Bearing in mind all these factors, in our considered view, the receipts from Smt. Pammi Sandesara cannot be treated as unexplained cash credit. We, therefore, deem it fit and proper to delete the impugned addition. Ordered accordingly.
6. In the result, the appeal is allowed. Pronounced in the open Court on this 21st day of September, 2017.
Sd/- Sd/- Mahavir PSrasad Pramod Kumar (Judicial Member) (Accountant Member)
Ahmedabad, the 21 st day of September, 2017 Bt* Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad