D.b. Income Tax Appeal v. M/S. A.l. Lalpuria Construction Pvt. Ltd., Jaipur

In the High Court of Judicature for RajasthanJaipur Bench, JaipurO R D E RJaipur Bench, JaipurO R D E R 1.D.B. Income Tax Appeal No.39/2011Commissioner of Income Tax-I, Jaipur Commissioner of Income Tax-I, Jaipur Vs. M/s. A.L. Lalpuria Construction Pvt. Ltd., Jaipur. 2.D.B. Income Tax Appeal No.256/2010Commissioner of Income Tax-I, JaipurCommissioner of Income Tax-I, Jaipur Vs. M/s. A.L. Lalpuria Construction Pvt. Ltd., Jaipur. 3.D.B. Income Tax Appeal No.26/2011Commissioner of Income Tax-I, JaipurCommissioner of Income Tax-I, Jaipur Vs. M/s. A.L. Lalpuria Construction Pvt. Ltd., Jaipur. Date :: 25.02.2013 Hon'ble Mr. Justice Ajay RastogiHon'ble Mr. Justice Veerendr Singh Siradhana Mr. J.K. Singhi, Sr. Adv. with Mr. Anuroop Singhi, for appellant. Mr. Naresh Gupta, for respondent. Instant three appeals since arise fromcommon judgment of Income Tax Appellate Tribunal(“Tribunal”) dt.31.03.2010, hence heard together& disposed of by the present order. The revenue has preferred instant appeals U/s 260A of Income Tax Act,1961 (“Act,1961”)assailing judgment of the Tribunal dt.31.03.2010affirming order of Commissioner (Appeals)dt.05.03.2008, with modification that on thestatement of Kripa Shanker Sharma, the income ofRs.5 Lacs was assessed in the hands of assesseeand it was observed by the Tribunal that thestatement of Kripa Shanker Sharma was neverconfronted and no documentary evidence wassupplied to the assessee, in absence whereof theincome in the hands of the assessee on the basisof statement of Kripa Shanker Sharma deserves deletion. The assessee as alleged carried outconstruction activities and disclosed incomefrom sub-contract and investment in buildingconstruction. After the search U/s 132 of theAct,1961 was carried out on 12.04.2005 in thecase of another assessee M/s. B.C. Purohit &Company at Jaipur & Kolkatta, evidence wasgathered and from the investigation it revealedthat in the garb of tax consultation the ownersand employees of this group were running theracket of providing accommodation entries ofgifts, loans, share application money, shareinvestment and long term capital gains inshares. It will be relevant to record that thepresent assessee might have been in consultationwith M/s. B.C. Purohit & Company and a member ofthe group and has drawn inference regardingproviding accommodation entries and theassessing officer was of the view that detailsmade available by the assessee as regardsunsecured loans and share application money,reference of which has been made in para-4 ofits order, appears to be the accommodationentries and the present assessee was middle manand invoking Sec.68 of the Act, it wasconsidered to be part of the income in the handsof the assessee. However, on appeal preferredbefore the Commissioner (Appeals) by theassessee U/s 143(3) r/w 147 of the Act,1961 all the factual statements were examined at lengthand the Commissioner (Appeals), after dueappreciation of material which came on record,observed that from independent enquiry thecopies of bank account were obtained by theassessing officer and found that for clearing ofthe cheques issued by these companies eithercash was deposited in the same account or inanother account of the group company in fact wasM/s. B.C. Purohit of which the present assesseewas considered to be one of the group member.However, it was further observed that summonsissued U/s 131 of the Act were served upon allsuch applicant/ creditors and their confirmationletters were filed and the companies wereassessed to tax being the private limitedcompanies, the existence of their separate legalentity ordinarily could not have been doubted.However on the basis of statement of KripaShanker Sharma which was recorded by the searchauthorities as regards accommodation entries, asum of Rs.5 Lacs was assessed in the hands ofpresent assessee alone and as regards otherincome, it was not considered to be in the handsof the present assessee. Obviously thedepartment being aggrieved preferred appealbefore the Tribunal and at the same time, thepresent assessee filed cross objection regardingpart of the income, to the extent of a sum ofRs.5 Lacs, as being recorded in the hands of present assessee on the basis of statement ofKripa Shanker Sharma. The Tribunal whileappreciating the factual matrix came on recordobserved that after the summons were issued U/s131 of the Act,1961 to the applicant/creditorsand their confirmation letters were filed andthe companies were assessed to tax being privatelimited companies the existence of theirseparate legal entity ordinarily could not havebeen challenged more so when the identity ofexistence of the investor is not disputed andaccordingly upheld the view of Commissioner(Appeals), at the same time further observedthat merely on the basis of oral statement ofKripa Shanker Sharma recorded before the searchauthoritiesthattheassesseeprovidedaccommodation entries was not sufficient for theincome to be assessed for a sum of Rs.5 Lacs inthe hands of the assessee and while allowing thecross objection filed by the assessee dismissedthe appeal preferred by the revenue under orderimpugned. We have heard the parties at length and ofthe view that what has been observed by theCommissioner (Appeals) & the Tribunal appears tobe based on factual matrix and there appears nosubstantial question of law arises which mayrequire interference by this Court to beexamined in the instant appeal. Consequently, the instant appeals are wholly devoid of merit and accordingly stand dismissed. (Veerendr Singh Siradhana),J (Ajay Rastogi),J VS Shekhawat/-p.539ita11Feb25FnlDsps.docCertificate - All corrections have been incorporated in the judgment/order being emailed/Vijay Singh Shekhawat/PAJW