Pr. Commissioner Of Income Tax -7 v. M/S Spg Finvest Pvt. Ltd

$~1 *IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 305/2022 PR. COMMISSIONER OF INCOME TAX -7 ..... AppellantThrough:Mr.Puneet Rai, Sr.Standing Counselfor the Revenue. versus M/S SPG FINVEST PVT. LTD. ..... Respondent Through:Mr.Ved Jain with Mr.Rich Mishraand Mr.Aminish Tripathi, Advocates. Date of Decision: 14[th]September, 2022 % CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): 1.Present income tax appeal has been filed challenging the order dated27[th]November, 2020 passed by the Income Tax Appellate Tribunal(‘ITAT’) in ITA No. 3736/Del./2017 for the Assessment Year 2012-13. 2.Learned counsel for the Appellant states that the ITAT has erred inlaw in admitting fresh evidence by overlooking the provisions laid downunder Rule 46A since the assessee had not explained any cause whichprevented it from producing evidence before the Assesing Officer. 3.He states that the ITAT has erred in law in deleting the addition ofRs.3,00,00,000/- on account of unexplained share capital and share premiumoverlooking the fact that the assesse company had failed to explain thereasons for high share premium /capital which was not commensurate with ITA No.305/2022 Page 1 of 4 the assets owned by the assessee company. 4.He further states that the ITAT has erred in law in deleting theadditionofRs.27,88,000/-onaccountofunsecuredloanswithoutconsidering that the assessee company failed to prove the genuineness,creditworthiness and identity of the lender and the additional evidences filedby the assessee company is not material in support against the said addition. 5.He also states that the ITAT has erred in law in deleting the additionof Rs.1,31,27,449/- made by the Assessing Officer on account ofunexplained investments overlooking the fact that the assessee companymade investment in new companies at much higher price than its real worthin the previous years and the year under consideration. 6.A perusal of the paper book reveals that both the AppellateAuthorities below have recorded concurrent findings of fact that theAssessing Officer did not issue specific show cause notice with respect tothe additions made in the assessment order to the assessee during theassessment proceedings and therefore, there was reasonable cause with theassessee in not filing the evidences before the Assessing Officer. The ITATalso noted that though the Assessing Officer was given due opportunityunder Rule 46A(2) of the Income Tax Rules, 1961, yetthe AssessingOfficer did not make any proper averment with regard to the admission ofadditional evidences particularly when huge additions had been made whichincluded the amount added under Sections 68 & 69 of the Income Tax Act,1961 (‘the Act’) which were carried forward from the earlier years. 7.With respect to the addition of Rs.3,00,00,000/- on account ofunexplained share capital and share premium, both the Appellate Authoritiesbelow deleted the said addition on the ground that addition under Section 68 ITA No.305/2022 Page 2 of 4 of the Act cannot be made because the said amount was being carriedforward from earlier years, which is evident from letter dated 04[th]March,2015 filed before the Assessing Officer and there had been no increase inpaid up share capital and that this fact was not controverted by the AssessingOfficer. 7.With respect to the addition of Rs.3,00,00,000/- on account ofunexplained share capital and share premium, both the Appellate Authoritiesbelow deleted the said addition on the ground that addition under Section 68 ITA No.305/2022 Page 2 of 4 of the Act cannot be made because the said amount was being carriedforward from earlier years, which is evident from letter dated 04[th]March,2015 filed before the Assessing Officer and there had been no increase inpaid up share capital and that this fact was not controverted by the AssessingOfficer. 8.With respect to the addition of Rs.27,88,000/- on account ofunsecured loans, both the Appellate Authorities below have held that theamount of Rs.25 lacs pertained to the earlier assessment year and wasappearing as unsecured loan in the balance sheet as on 31[st]March, 2011. Itwas recorded that most of the unsecured loan were in fact paid repaid duringthe year and only an amount of Rs.2,88,000/- was received in this year asfresh loan. The CIT (A) while examining the genuineness of fresh loan ofRs.2,88,000/- found that identity and creditworthiness of the lender M/s.DMC Education Ltd. had been substantiated by the assessee by way ofvarious documentary evidences. The ITAT observed that the finding of theCIT (A) based on proper appreciation of facts cannot be tinkered withoutany contrary material to rebut. 9.With respect to the addition of Rs.1,31,27,449/- on account ofunexplained investments, the ITAT deleted the said additions on the groundthat out of the said addition, amount of Rs.48,27,449/- pertained to theearlier year which was not in dispute and accordingly the CIT(A) rightlydeleted the said amount from the addition made by the Assessing Officerand with regard to the balance amount, there is a clear finding based onmaterial on record that investments had been made by the assessee throughproper banking channels and each and every entry had been duly explainedfrom the books of account and bank statement. The ITAT further recorded ITA No.305/2022 that once the investments have been made through cheques duly disclosed inthe books of account, the same cannot be added as investment made outsidethe books or from undisclosed sources under Section 69 of the Act.Consequently, this Court finds that there is no perversity in the findings ofthe CIT(A) and ITAT. 10.The Supreme Court in the case of Ram Kumar Aggarwal & Anr. vs.Thawar Das (through LRs), (1999) 7 SCC 303 has reiterated that underSection 100 of CPC, the jurisdiction of the High Court to interfere with theorders passed by the Courts below is confined to hearing on substantialquestion of law and interference with finding of the fact is not warranted if itinvolves re-appreciation of evidence. Further, the Supreme Court in State ofHaryana & Ors. vs. Khalsa Motor Limited & Ors., (1990) 4 SCC 659 hasheld that the High Court was not justified in law in reversing, in secondappeal, the concurrent finding of the fact recorded by both the Courts below.The Supreme Court in Hero Vinoth (Minor) vs. Seshammal, (2006) 5 SCC545 has also held that “in a case where from a given set of circumstancestwo inferences of fact are possible, the one drawn by the lower appellatecourt will not be interfered by the High Court in second appeal. Adoptingany other approach is not permissible.” It has also been held that there is adifference between ‘question of law’ and a ‘substantial question of law’. 11.Accordingly, no substantial question of law arises for consideration inthe present appeal and the same is dismissed. MANMOHAN, J SEPTEMBER 14, 2022/KA MANMEET PRITAM SINGH ARORA, J ITA No.305/2022 Page 4 of 4