Principal Commissioner Of Income Tax, Udaipur v. M/S. Shubh Mines Pvt. Ltd. (D.b.income Tax Appeal

PRINCIPAL COMMISSIONER OF INCOME TAX, UDAIPURVS. M/S. SHUBH MINES PVT. LTD.(D.B.INCOME TAX APPEAL NO.96/15) Dated:- 3.5.16. HON'BLE MR.JUSTICE SANGEET LODHAHON'BLE MR.JUSTICE KAILASH CHANDRA SHARMA Mr.K.K.Bissa, for the appellant. 1.This appeal is directed against order dated 9.10.14 ofIncome Tax Appellate Tribunal (ITAT), Jodhpur Bench, Jodhpur,whereby an appeal preferred by the Revenue against the orderof Commissioner of Income Tax (Appeals) [CIT(A)], Jodhpur,dated 30.6.14, deleting the addition of Rs.75,00,000/- made bythe Assessing Officer (AO) under Section 68 of the Income TaxAct, 1961 ( for short “the Act”), vide assessment order dated4.3.14 for the assessment year 2006-07, has been dismissed. 2.The relevant facts are that the assessee, a company,introduced share application money to the tune ofRs.75,00,000/- including the sum of Rs.50,00,000/- receivedallegedly taken from the entry provided namely, Moderate CreditCorporation Limited, Delhi, during the previous year relevant tothe assessment year. The AO observed that the assessee couldnot substantiate necessity for obtaining the huge shareapplication money only after few months of promoting thecompany. The AO on the basis of the statements of one Shri PRINCIPAL COMMISSIONER OF INCOME TAX, UDAIPUR VS.M/S. SHUBH MINES PVT. LTD.(D.B.INCOME TAX APPEAL NO.96/15) Aseem Kumar Gupta, concluded that the money deposited in thebank accounts of the assessee company is bogus entry.Accordingly, treating the money received as aforesaid as themoney belonging to the assessee company, the same was addedto the income of the assessee under Section 68 of the Act. 3.Aggrieved thereby, an appeal preferred by the assesseewas allowed by the CIT (A) vide order dated 30.6.14. The CIT(A) observed that investment has been made through regularbanking channel and it has been refunded through regularbanking channel when project of the company was dropped. TheCIT (A) found that the investment and refund of the shareapplication money are verifiable from the bank accounts of theappellant company. The statements of Shri Aseem Kumar Guptarecorded behind the back of the company, were not foundreliable. That apart, the CIT (A) found that there is no evidencewhether direct or indirect to prove that any cash or unaccountedmoney had either flown from the assessee company to the shareapplicant company at the time of investment or from shareapplicant company to the assessee company at the time ofrefund. Accordingly, the addition made was ordered to bedeleted. 4.Aggrieved by the appellate order, an appeal preferred bythe Revenue before the ITAT, stands dismissed by the order PRINCIPAL COMMISSIONER OF INCOME TAX, UDAIPUR VS.M/S. SHUBH MINES PVT. LTD.(D.B.INCOME TAX APPEAL NO.96/15) 3 impugned. Hence, this appeal. 5.Learned counsel for the Revenue contended that this is acase of bogus entry recorded as share capital money. Learnedcounsel submitted that relying upon the survey conducted inthird party's case and the statements of Shri Aseem KumarGupta, the addition made by the AO was absolutely justified.Learned counsel submitted that the ITAT has erred in ignoringthe fact that the assessee could not substantiate its necessity forobtaining huge share application money only after a few monthsof promoting the company. 6.We have considered the submissions of the learned counseland perused the material on record. PRINCIPAL COMMISSIONER OF INCOME TAX, UDAIPUR VS.M/S. SHUBH MINES PVT. LTD.(D.B.INCOME TAX APPEAL NO.96/15) 3 impugned. Hence, this appeal. 5.Learned counsel for the Revenue contended that this is acase of bogus entry recorded as share capital money. Learnedcounsel submitted that relying upon the survey conducted inthird party's case and the statements of Shri Aseem KumarGupta, the addition made by the AO was absolutely justified.Learned counsel submitted that the ITAT has erred in ignoringthe fact that the assessee could not substantiate its necessity forobtaining huge share application money only after a few monthsof promoting the company. 6.We have considered the submissions of the learned counseland perused the material on record. 7.A bare perusal of the assessment order reveals that the AOhas made the addition on suspicion which is based on thestatements of third party Shri Aseem Kumar Gupta, admittedly,recorded in the back of the assessee. It has come on record thatthe share application money of Rs.50,00,000/- was receivedfrom Moderate Credit Corporation Ltd., a listed company. It isnot disputed before this court that the investment made wasreceived by account payee cheque and the same was refundedby an account payee cheque when the company dropped itsproject. In the considered opinion of this court, in absence of anycogent evidence on record establishing that the money shown to have received as share application money, was as a matter offact, unaccounted money belonging to the assessee company,the finding arrived at by the AO, which is based on suspicion, hasrightly been held not sustainable in the eyes of law. Suffice it tosay that the finding arrived at by the CIT (A), affirmed by theITAT, which remains a finding of fact, cannot be said to becapricious or perverse. 8.In view of the discussion abvoe, in our considered opinion,no substantial question of law arises for consideration of thiscourt in the present appeal.no substantial question of law arises for consideration of thiscourt in the present appeal. 9.Accordingly, the appeal is dismissed. (KAILASH CHANDRA SHARMA),J. (SANGEET LODHA),J.