Itxa/957/2017 Of Pr. Commissioner Of Income Tax - 8 v. M/S. Realvalue Realtors Pvt Ltd

JPP IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 957 OF 2017 Pr. Commissioner of Income Tax-8… Appellant V/s. M/s. Realvalue Realtors Pvt. Ltd. ... Respondent. Mr. Suresh Kumar for the Appellant. Mr. Mihir Naniwadekar for the Respondent. CORAM : M.S. SANKLECHA & NITIN JAMDAR, JJ. DATE : 4 NOVEMBER 2019. P.C.:- By this Appeal the Appellant Revenue challenges theorder passed by the Income Tax Appellate Tribunal dated 30 June2016. The relevant assessment year is 2007-08. The followingquestions of law are urged for our consideration :- “1. Whether on the facts and circumstances of the caseand in law, the Hon’ble ITAT was justified in deletingthe addition of Rs.5,18,44,700/- u/s. 68 of the I.T. Act,1961 on account of share application money received from Mr. Mustaq Ahmed Vakil without appreciating thefact that the assessee has failed to prove the genuinenessof the share transactions and the creditworthiness of theshareholder ? 2. Whether on the facts and circumstances of the caseand in law, the Hon’ble ITAT was erred in appreciatingthe facts that the assessee has passed fresh credit entry inits books of account for conversion of share applicationmoney into its share subscription and share premium,accordingly, Section 68 is correctly applied in the case ofthe assessee in the year under consideration ?” 2.The Respondent - Assessee is engaged in the business ofdealing in property and trading in shares and stock. The Assesseefiled its return of income declaring the total income as Rs.115778/-.The Assessing Officer, during the assessment proceedings, noted thatin the relevant previous year the Respondent had received anamount of Rs.81244700/- from one Mushtaq Ahmed Vakil as shareapplication money. The Respondent allotted 2421788 shares to ShriVakil. The Assessing Officer treated the amount shown as a shareapplication money as unexplained cash credit and issued a showcause to the Assessee. The Assessing Officer called upon theAssessee to prove the genuineness of the share transaction byproducing necessary evidence. The Assessing Officer held that theAssessee had failed to discharge the onus of establishing genuinenessof the transaction and creditworthiness of the shareholder and addedan amount of Rs.81244700/- as income from other sources. 3.The Assessee filed an Appeal before the Commissionerof Income Tax (Appeals). The Commissioner called for a remandreport from the Assessing Officer. The remand report was submittedby the Assessing Officer. The Commissioner, after going throughthe remand report, concluded that out of total share applicationmoney of Rs.81244700/- an amount of Rs.51844700/- was receivedin the Assessment Year 2006-07 and could not be added in theimpugned assessment year. The Commissioner accordingly directedthe Assessing Officer to take necessary action if required. In respectof the remaining amount of Rs.2.94 crores, the Commissionerobserved that sufficient evidence was produced in respect of theidentity and genuineness of the share application money and of ShriVakil and accordingly deleted the said addition. 4.The Appellant – Revenue filed an Appeal before theIncome Tax Appellate Tribunal. The Tribunal confirmed as regardthe finding as regards Rs.5,18,44,700/- not pertaining to the relevantAssessment Year. As regard the amount of Rs.2.94 crores, theTribunal set aside that part of the order of the Commissioner andremanded the matter to the Assessing Officer to examine thegenuineness of the investment of Rs.2.94 crores by Shri Vakil.Accordingly, the Appeal was partly allowed by the impugned order. We have heard Mr. Suresh Kumar, learned Counsel for the Appellant and Mr. Mihir Naniwadekar, learned Counsel for theRespondent. 4.The Appellant – Revenue filed an Appeal before theIncome Tax Appellate Tribunal. The Tribunal confirmed as regardthe finding as regards Rs.5,18,44,700/- not pertaining to the relevantAssessment Year. As regard the amount of Rs.2.94 crores, theTribunal set aside that part of the order of the Commissioner andremanded the matter to the Assessing Officer to examine thegenuineness of the investment of Rs.2.94 crores by Shri Vakil.Accordingly, the Appeal was partly allowed by the impugned order. We have heard Mr. Suresh Kumar, learned Counsel for the Appellant and Mr. Mihir Naniwadekar, learned Counsel for theRespondent. 6.As far as the amount of Rs.5,18,44,700/- is concerned,both the Commissioner (Appeals) and the Tribunal have, afterconsidering the records, categorically held that this amount wasrelevant for the Assessment Year 2006-07. In fact the AssessingOfficer in his remand report dated 16 September 2010 has acceptedthis position. As regard the amount of Rs.2.94 crores is concerned,the Tribunal has sent the same for verification by the AssessingOfficer. The contentions of the parties regarding this amount aboutits genuineness, etc. would be considered on remand. 7.In the circumstances, both the questions framed placedfor consideration do not give rise to any substantial question of law.The Appeal is dismissed. In the circumstances, both the questions framed placed NITIN JAMDAR, J. M.S. SANKLECHA, J.