|The Tax Publishers2021 TaxPub(DT) 0946 (Del-Trib)
INCOME TAX ACT, 1961
Arha Buildcon (P) Ltd. had not complied with the summons issued by the Investigation Wing and statement was factually wrong as the bank statement of the assessee maintained at HDFC Bank clearly shows the amounts received and paid with regard to Arha Buildcon (P) Ltd. (share application money) addition on this account was, therefore, directed to be deleted.
Income from undisclosed sources - Addition under section 68 - Unexplained share application money -
Appellant was asked to explain the entries with evidence and also whether any share application register has been maintained. The appellant explained that the money was arranged from Arha Buildcon (P) Ltd. as they were financiers and money arrangers. AO referred to the statement of one M. Garg who had invested share application money with the assessee and who confirmed that these companies were not carrying out any genuine business. He further found that there were no share application forms or share application register which were found at the time of search. There has been an agreement between Arha Buildcon and the assessee regarding booking of 60 flats in the project GTM Forest at Dehradun. This shows that there have been direct finance arrangements between the M/s. Arha Buildcon (P) Ltd. and the assessee. In the search and seizure operation, an Indemnity Bond had been seized wherein the Arha Buildcon had arranged Rs. 3.75 Crores for the assessee after calculation of cost of 60 flats each of 1650 sq. ft. @ Rs. 1100 per sq. ft. As per the agreement, Rs. 2 Crores was to be paid before 10-12-2006 and from the records, it can be found that the assessee has already paid Rs. 67 lakhs till 19-5-2006 which gives a credence to the reliability of the agreement. The Indemnity Bond, the amounts received and paid against the bookings cannot be suspected in the absence of any other contrary finding by the revenue. Held: Arha Buildcon (P) Ltd. had not complied to the summons issued by the Investigation Wing. Regarding the discrete enquiries conducted by the AO at the premises, the assessee had not been given any opportunity to the assessee regarding the discrete enquiries conduced and its outcome. The said lender has been in existence for 10 years and assessed to tax. While making the addition, the AO mentioned that 'the assessee was not able to provide any details of cheques that was issued by assessee and how many of these cheques have actually not been presented for payment or whether any real payments were ever made'. The statement is factually wrong as the bank statement of the assessee maintained at HDFC Bank clearly shows the amounts were received and paid with regard to M/s. Arha Buildcon (P) Ltd. Hence, in view of the facts the contentions of the CIT(A) were not agreed to. The addition on this account was, therefore, directed to be deleted.
DistinguishedLovely Exports (P) Ltd. (2009) 216 CTR 195 SC) : 2009 TaxPub(DT) 0261 (SC)Relied:Navodaya Castle (2015) 56 Taxmann.com 18 (SC) : 2015 TaxPub(DT) 1868 (SC).
REFERRED : ITA. No. 665/2009 in the case of CIT v. Gourdin Herbals India Ltd. Order, dated 17-9-2009, Navodaya Castle (2015) 56 Taxmann.com 18 (SC) : 2015 TaxPub(DT) 1868 (SC), CIT v. Sophia Finance Ltd. (1994) 205 ITR 98 (Del-HC) (FB) : 1994 TaxPub(DT) 556 (Del-HC), Empire Builtech (P) Ltd. (2014) 366 ITR 110 (Del-HC) : 2014 TaxPub(DT) 1850 (Del-HC), Onassis Axles Private Limited (2014) 364 ITR 53 (Del-HC) : 2014 TaxPub(DT) 1238 (Del-HC), Empire Builtech (P) Ltd. (2014) 366 ITR 110 (Del-HC) : 2014 TaxPub(DT) 1850 (Del-HC), Major Metals Ltd. (2012) 359 ITR 450 (Bom) : 2012 TaxPub(DT) 2113 (Bom-HC), Independent Media (P) Ltd. 25 Taxmann.com 276 (Del-HC), Neelkanth Ispat Udhyog (P) Ltd. (2013) 81 DTR 214 (Del) : 2013 TaxPub(DT) 690 (Del-HC), Frostair (P) Ltd. (2012) 92 DTR 393 (Del) : 2012 TaxPub(DT) 3185 (Del-HC), Ultra Modern Exports (P) Ltd. (2013) 220 Taxman 165 (Del-HC) : 2013 TaxPub(DT) 917 (Del-HC).
FAVOUR : In assessee's favour.
A.Y. : 2006-07
INCOME TAX ACT, 1961
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