ITA NO. 3892/Del/2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "H", NEW DELHI
BEFORE SHAMIM YAHYA, ACCOUNTANT MEMBER
AND
SHRI A.T. VARKEY, JUDICIAL MEMBER
I.T.A. No. 3892/Del/2012
A.Y. : 2007-08
ITO, Room No. 225A, VS. M/s Value Fabrics Pvt.
Central Revenue Ltd.,
Building, New Delhi 52-Asalatpura,
110 002 Badi Masjid,
Moradabad-244001
(UP)
(PAN: AABCV4422D)
(APPELLANT) (RESPONDENT)
Assessee by : Dr. Rakesh Gupta, Sr. Adv., Sh.
Ashwani Taneja, Adv., Sh. Somil
Agarwal,
Department by : Ms. Nidhi Srivastava, Sr. D.R.
ORDER
PER SHAMIM YAHYA: AM
This appeal by the Revenue is directed against the order of the
Ld. Commissioner of Income Tax (Appeals-XIX), New Delhi dated
24.5.2012 pertaining to assessment year 2007-08.
2. The grounds raised read as under:-
i) Ld. CIT(A) erred in law and on the facts of the case in
setting aside the issue of addition of Rs. 1,75,20,000/-
made by the AO under section 68 of the I.T. Act as the
Income Tax Act, 1961 does not confer any power on the
CIT(A) to set aside the assessment.
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ii) Ld. CIT(A) erred in law and on the facts of the case in
accepting additional evidences in contravention of Rule
46A of the I.T. Rules, 1962 without confronting the AO.
iii) Ld. CIT(A) erred in law and on the facts of the case in
allowing the expenses of Rs. 51,601/- on the basis of
additional evidence accepted by him by violating the
provisions of Rule 46A of the I.T. Rules.
iv) The appellant craves, leave or reserving the right to
amend, modify, alter, add or forgo any ground(s) of
appeal at any time before or during the hearing of this
appeal.
3. In this case the AO noted that perusal of return of the
assessee reveals that during the year the assessee has received
share application money of Rs. 1,75,20,000/-. Despite several
opportunities assessee failed to comply with the notices of the AO.
AO observed that the onus was upon the assessee to prove the
creditworthiness and genuineness and identity of the shareholders.
Since the same was not done, AO treated the same as undisclosed
income of the assessee and added the same under section 68 of
the I.T. Act.
4. Before the Ld. CIT(A) assessee submitted that assessee has
only received Rs. 12,00,000/- share application money during the
financial year 2006-07. The balance of Rs. 1,63,20,000/- was share
application money received during the financial year 2005-06. The
total of the aforesaid sums as on 31.3.2007 came to Rs.
1,75,20,000/-. In this regard, copy of the balance sheet of the
assessee was referred which was said to have been filed alongwith
the return. Regarding the share application money of Rs.
12,00,000/- received during the financial year 2006-07 from three
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parties, assessee submitted copy of application for shares and
confirmation letter and PAN Number. Considering the above, Ld.
CIT(A) directed as under:-
"Since the documents and the details as mentioned
in above paras are filed for the first time either by
the AR on his own or on enquiry from the
undersigned in these proceedings in the interest
of justice, the AO is hereby directed to verify the
genuineness of the documents and the contentions
of the AR and if he is satisfied with the explanation,
no addition is called for. The issue of addition of Rs.
1,75,20,000/- is set aside for limited verification as
mentioned above."
5. Against the above Order the Revenue is in appeal before us.
6. We have heard both the counsel and perused the records. We
find that as regards the contention of the assessee that the amount
of Rs. 12,00,000/- was received as share application money for the
impugned financial year and the balance Rs. 1,63,20,000/- pertain to
financial year 2005-06, it is a matter of factual verification. If the
assessee has only received Rs. 12,00,000/- share application money
during financial year 2006-07, AO can consider only the said amount
u/s. 68 of the IT Act for A.Y. 2007-08. Rest amount cannot be
considered in the current year as share application money receipt
under section 68 of the I.T. Act. Accordingly, we remit this issue to
the file of the AO. The AO shall make examination of the
submissions of the assessee and decide as per directions as above.
7. As regard the balance amount of share application money
amounting to Rs. 12,00,000/- received from three parties, assessee
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has not submitted any document whatsoever before the AO.
Assessee has submitted copy of application of shares and
confirmation and PAN number before the Ld. CIT(A). Ld. CIT(A)
remitted these documents and the contention of the Ld. AR to the
file of the AO for examination. Ld. CIT(A) further directed that if the
AO is satisfied with the explanation, no addition is called for.
Against the above directions, Revenue is in appeal before us.
8. We find that Revenue's contention in this regard is correct that
Ld. CIT(A) does not have any power to set aside the issue to AO.
However, we find that assessee has failed to submit the relevant
documents before the AO. However, he has submitted some details
before the Ld. CIT(A). In our considered opinion, interest of justice
will be served, if the matter is remitted to the file of the AO.
Accordingly, we remit this issue to the file of the AO. AO shall
examine the issue afresh regarding the identity of the depositors,
genuineness of the transactions and the creditworthiness of the
share applicants. Needless to add that the assessee should be
granted adequate opportunity of being heard.
9. Ground No. 3 raised by the Revenue is regarding the allowance
of expenses of Rs. 51,601/-. We find that the same is not arising out
of the order of the Ld. CIT(A). Hence, the same is dismissed.
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10. In the result, the appeal filed by the Revenue is partly allowed
for statistical purposes.
Order pronounced in the Open Court on 23/1/2014, upon
conclusion of hearing.
Sd/- Sd/-
VARKEY]
[A.T. VARKEY] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 23/1/2014
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant -
2. Respondent -
3. CIT
4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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