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2014 (10) TMI 420
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....as duly established, being the amount provided by Shri Anupam Nagalia and thus there could have been no justification to hold, that the said sum of Rs. 50,000/- received from Shri Anupam Nagalia, in respect of which shares issued to Shri Deepak Gupta could be held to be unexplained credit in the hands of the assessee company. 2. That the learned Commissioner of Income Tax (Appeals) has further erred both on facts and in law, in upholding the disallowance of Rs. 9,88,377/- debited by the assessee under the head "purchase account on account of mutation expenses". 2.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there could have been no valid justification to hold, that the assessee had failed to establish the source of expenses incurred and debited as mutation expenses. 2.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the expenses on mutation had been incurred by the company M/s Vatika limited and the assessee had paid a cost of registration of land purchased including mutation expenses through M/s Vatika limited who had duly recorded such payments in its accounts, and was duly confirmed by M/s Vat....
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.... addition made of an amount of Rs. 50,000/- received by it as share capital contribution from Shri Deepak Gupta. In ground NO.2, the appellant has challenged the addition sustained of Rs. 9,88,377/-, debited by it under the head purchase account on account of mutation expenses". In respect of ITA No. 1213/Del/2013 It is an appeal filed by the revenue wherein the revenue has challenged the deletion of the two sums namely: (i) Rs. 50,000/- being the sum received by way of share capital from Shri Anupam Nagalia; (ii) Rs. 10,41,000/- on account of alleged unexplained cash deposit in the bank account of the assessee. 4. Firstly, taking up the assessee's appeal, i.e. ITA No. 1186/Del/2013, it is submitted that, in the appeal filed by the assessee the first ground pertains to an addition of Rs. 50,000/- which represents sum received as share capital. In this case, the assessee had issued 5000 shares in the name of Shri Deepak Gupta and the aforesaid sum was credited in the books against the issue of such share capital but was paid on his behalf by Shri Anupan Nagalia and was duly confirmed (see page 68 of the paper book). It is submitted that, assessee had led eviden....
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....it by way of cheque which sum was received from Shri Anupam Nagalia. This sum of Rs. 10,10,000/- has not been included in the total income of the assessee as unexplained credit. an the contrary, instead of the aforesaid sum, all what has been brought to tax by the learned A.O. was the amount of Rs. 1,00,000/- despite the fact, the credit was of Rs. 10,10,000/- and was through a cheque. Since the aforesaid sum of Rs. 10,10,000/- had been received by the assessee from Shri Anupam Nagalia who had advanced Rs. 9,10,000/- as loan to the assessee company, the said sum was credited to the loan account of Shri Anupam Nagalia (see page 70) and was debited to bank account; whereas Rs. 1,00,000/- was appropriated towards the share capital, being the contribution made by Shri Anupam Nagalia on his own behalf and on behalf of above shareholder namely Shri Deepak Gupta. To support the source of credit of Rs. 10,10,000/- assessee had filed before the learned A.O. a copy of the confirmation as well as copy of the bank account of Shri Anupam Nagalia. (see page 70 &. page 95) 9. It is thus evident there could have been no valid basis whatsoever to have held that Rs. 1,00,000/- being the credit to....
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....lved is about the credit in the books whether the said credit is explained or is otherwise. 11. Without prejudice to the aforesaid, the appellant submits that, if the identity of Shri Deepak Gupta is held as not proved, then there was no company and no assessment could be made on the company. The assessee submits that, it being an undisputed position that, assessee is a company and there being no adverse finding by the learned A.O. in his order that the assessee has failed to establish the identity of the shareholder, learned CIT(A) could not have without giving an opportunity concluded that assessee has failed to establish the identity of Shri Deepak Gupta. 12. The assessee however without prejudice to the aforesaid submissions that, Shri Anupam Nagalia has identified Shri Deepak Gupta and otherwise too, his identity established from the following documents on record. (i) Memorandum of Articles of Association (Page 71 - 94) (ii) Certificate of incorporation showing that on the basis of the aforesaid memorandum company has been incorporated. 13. Now, in respect of the addition made by the learned A.O. and sustained by CIT (A) of Rs. 9,87,377/- the assessee submits th....
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.....00 75,000.00 120 28.09.2005 2,49,79,900.00 91,900.00 121 28.09.2005 9,74,400.00 5,400.00 122 28.09.2005 7,04,900.00 3,900.00 123 28.09.2005 1,09,60,937.00 40,000.00 124 03.10.2005 2,18,72,000.00 80,000.00 125 03.10.2005 81,92,750.00 30,000.00 126 05.10.2005 17,92,650.00 9,800.00 127 07.10.2005 1,35,41,237.00 49,852.00 128 10.10.2005 53,01,100.00 19,550.00 129 24.10.2005 90,67,750.00 33,000.00 130 25.10.2005 67,94,600.00 25,100.00 131 28.10.2005 5,01,625.00 2,775.00 132 28.10.2005 19,93,500.00 36,000.00 133 18.11.2005 23,23,850.00 12,600.00 134 Total 9,87,377.00 15. It would further be seen that, as per the ledger account of M/s Vatika Limited in the books of assessee, a sum of Rs. 17,63,03,759/- has been credited and the said credit represents Rs. 14,12,97,149/- towards cost of land which includes Rs. 9,87,377/- as mutation expenses. Further to the aforesaid sum of Rs. 14,12,97,149/- a further sum of Rs. 3,50,00,000/- had been paid as a loan besides incurring the prelimin....
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....rejudice to the aforesaid and in the alternative it is submitted, the fact that the expenditure has been incurred cannot be disputed, which expenditure had been incurred by M/s Vatika Limited on behalf of the assessee which is duly debited in the books of M/s Vatika Limited in the account of the assessee, who is collaborator of the assessee. Thus the addition made and sustained by the CIT (A) is highly illegal, arbitrary, without application of mind, in disregard of the basic principles of the account as well as the statutory provision of the Income Tax Act. 18. In respect of the departmental appeal i.e. ITA No.: 1213/Del/2013 18.1 That the respondent assessee submits that for the reasons stated by the learned CIT(A) in his order in respect of the two sums, he has correctly deleted the aforesaid sums. The respondent further submits that while deleting the addition made of Rs. 10,41,000/-, the learned CIT (A) has noted that source of the credits in the books of the account of the assessee is out of cash withdrawn from the bank on 04.05.2005 and 07.05.2005 and was thereafter in the books of the assessee was shown as cash in hand. It is an admitted fact that there are no adverse....
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....ew share capital introduced during the year alongwith confirmations and income tax particulars of subscribers. In response to which, the assessee only stated that the company was incorporated with the share capital of Rs. 1 lakh. No further explanation/evidence with regard to the share capital of Rs. 1 lakh was furnished before the Assessing Officer. Even before the CIT(A), the assessee has not furnished the confirmation of two shareholders in whose account Rs. 50,000/- each was credited but, on the other hand, the assessee's explanation is that the assessee had received a cheque of Rs. 10,10,000/- on 2.5.2005 from Shri Anupam Nagalia and out of this Rs. 10,10,000/-, a sum of Rs. 1,00,000/- was credited to the share capital account in the name of two persons Shri Anupam Nagalia and Shri Deepak Gupta. Balance Rs. 9,10,000/- was credited to the loan account of the assessee. That when cheque of Rs. 10,10,000/- was received from Anupam Nagalia, why and on what basis it was credited at three different places? She also stated that the books of account were never produced before the Assessing Officer either during original assessment proceedings or the remand proceedings so that the c....
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....ed that either the order of the Assessing Officer may be restored i.e. all the additions made by the Assessing Officer should be sustained or alternatively, the matter may be sent back to the file of the Assessing Officer for re-examination. 6. We have carefully considered the submissions of both the sides and perused relevant material placed before us. With regard to share capital of Rs. 1 lakh, the query raised by the Assessing Officer reads as under:- "Furnish the details of the equity share capital for the new shares capitals introduced during this year along with confirmations, IT particulars of subscribers." 6.1 In response to this, the reply furnished by the assessee reads as under:- "The assessee company was incorporated 15-04-2005 under the Companies Act, 1956 with a share capital of Rs. 1,00,000/- other than initial share capital of Rs. 1,00,000/- no further Equity Share Capital was raised during the year under consideration." 6.2 From the above, it is evident that the assessee has not given any details with regard to the share capital of Rs. 1 lakh, not even the name of the shareholder and the confirmation of the shareholder. Before the CIT(A), the assesse....