Counsel With Mr.sanjay Kumar v. Vitalcommunicationltd.<Br>

$~ 14 *IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 911/2016 versus CORAM: JUSTICE S.MURALIDHARJUSTICE PRATHIBA M. SINGH O R D E R%25.07.2017 1. The Revenue is in appeal under Section 260A against the order dated 15[th] June, 2016 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITANo. 2448/Del/2007 for the Assessment Year (AY) 2003-04. 2. The questions sought to be urged by the Revenue in the present appeal are as under: i) Whether the ITAT erred in law in holding that Section 68 ofthe Income Tax Act would be attracted only when money isbrought in by way of cash/ cheque/ demand draft? ii) Whether allotment of shares under a arrangement couldattract provisions of Section 68? ITA 911/2016 iii) Whether the deletion of additional amount of unexplainedcreditunderSection68oftheActinthefactsandcircumstances was justified? 3. In the present case, against the assessment order passed by the AssessingOfficer (‘AO’) on 31[st]March, 2003 under Section 143(3) of the Act bywhich additions were made under Section 68 of the Act, the Assessee wentin appeal before the Commissioner of Income Tax (Appeals) [‘CIT(A)’].During the course of the appeal proceedings, the CIT(A), in light of thedocuments placed on record by the Assessee , called for a remand reportfrom the AO. After considering the AO's remand report, the CIT(A) passeda detailed order dealing with each of the reservations voiced by the AObased on the additional evidence submitted by the Assessee. 4. In that process, the CIT(A) came to the conclusion that the expression‘sum’ as occurring under Section 68 of the Act denotes money brought intothe account books by way of cash, cheque and demand draft. The meretransfer of entries from one head to another cannot be treated as ‘sum’.Likewise, swapping of shares under an arrangement between the entitieswould not attract Section 68 of the Act. 5. However, the learned CIT (A) did not stop there. He proceeded to dealwith the additions on merits as well. The order of the CIT(A) contains a verydetailed discussion of the evidence placed on record and on each of thepoints expressed by the AO in the assessment order. 6. The additions were accordingly deleted by the CIT(A) by the order dated1[st]March, 2007. Therefore, the Revenue went in the appeal before theITAT. By the impugned order, the ITAT affirmed the order of the CIT(A). 7. Mr. Rahul Chaudhary submitted that the CIT(A) and the ITAT were inerror as to the word ‘sum’ occurring in Section 68 of the Act. This wascontrary to the decisions of the Bombay High Court in DharmavatProvision Stores v. CIT, (1983) 139 ITR 700 (Bom.) and Smt. RekhaKrishnaRajv.Income-taxOfficer,Ward-I,Hospet(2013)33taxmann.com 64 (Karnataka). 8. Had the CIT (A) stopped with the above discussion and reversed the AOonly on the legal issue, there may have been some merit in the contention ofthe learned counsel for the Revenue. However, the CIT (A) has,notwithstanding his conclusion of the legal issue, examined the case onmerits and in considerable detail, each of the allegations made by the AOwith reference to the remand report as well as the assessment order andreturned a factual finding supporting his conclusion that the additions madeby the AO under Section 68 of the Act were not justified. In particular, theCIT (A) disagreed on facts that the Assessee had failed to establish thegenuineness and creditworthiness of the persons/entities which contributedto the share capital of the Assessee. The above factual findings have beenaffirmed by the ITAT. 9. Unless the findings of CIT(A) and ITAT are shown to be perverse, in theconsidered view of the Court, no interference is called for with the ITA 911/2016 Page 3 of 4 impugned order of the ITAT under Section 260A of the Act. 9. Unless the findings of CIT(A) and ITAT are shown to be perverse, in theconsidered view of the Court, no interference is called for with the ITA 911/2016 Page 3 of 4 impugned order of the ITAT under Section 260A of the Act. 10. Therefore, leaving open the question concerning the interpretation to beplaced on the word ‘sum’, under Section 68 of the Act for consideration andappropriate case, this Court is of the view that no substantial question of lawarises for consideration from the impugned order of the CIT(A) as well asITAT. 11. The appeal is accordingly dismissed. S.MURALIDHAR, J JULY 25, 2017srb PRATHIBA M. SINGH, J