THE DCIT, CIRCLE-2(1)(2), SURAT vs. M/S. SALASAR YARN PVT. LTD., SURAT

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ITA 632/AHD/2017Status: DisposedITAT Surat10 May 2021AY 2012-136 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal affirmed the order of the CIT(A), noting that the investor companies had accepted the additions and settled the dispute by paying tax under the Vivad se Vishwas scheme. Therefore, the same amount had already been taxed in the hands of the investor companies.

What were the facts?

The Assessing Officer added Rs. 7,82,77,330/- to the assessee's income as unexplained cash credit on account of unsecured loans from group companies. The CIT(A) deleted this addition, holding that the amounts were already taxed in the hands of the investor companies.

What were the issues?

Whether additions made to the assessee's income as unexplained cash credit can be deleted if the same amounts have already been taxed in the hands of the investor companies?

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: SHRI PAWAN SINGH & Dr. ARJUN LAL SAINI

Hearing: 28.04.2021

O R D E R PER PAWAN SINGH, JUDICIAL MEMEBER: 1. This appeal by the Revenue is directed against the order of ld. Commissioner of Income Tax (Appeals)-2, Surat hereinafter referred as “Ld. Commissioner (Appeals)” dated 22.06.2016 for the assessment year (AY) 2012-13. The Revenue has raised following grounds of appeal:

1.

1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has not erred in deleting the additions of Rs. 7,82,77,330/- on account of unexplained cash credit u/s 68 of the Act on account of share capital & share premium merely on the ground that these amount have been added in the hands of investor companies.

2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has not erred in not appreciating the facts that (AY 2012-13) Salasar Yarns Pvt Ltd, even though the additions in respect of the amount of Rs. 7,82,77,330/- has been confirmed in the hands of investors companies, the investor companies have not accepted the addition and are agitating the same before the Hon’ble Tribunal.

3. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has not erred in not appreciating the facts that the share application money found credited in the books of accounts of the assessee received from Salasar Filaments Pvt Ltd, Todi Rayons Pvt Ltd & Salasar Polytex Pvt Ltd were lacking genuineness of transaction.

4. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) ought to have upheld the order of assessing fficer. It is therefore prayed that the order of the Ld. CIT (A) may be set aside and the assessing officer may be restored.

2.

Brief facts of the case are that the assessee is a company and filed its return of income for the assessment year 2012-13 declaring income of Rs.28,82,610/-. The return of income was selected for scrutiny. During the assessment the assessing officer received information from Income tax Officer (ITO) Ward -2(1)(1) and ITO ward -2(1)(4) that Salasar Polytex Pvt Ltd , Todi Rayons Pvt Ltd and Salasar Polytex Pvt Ltd received share premium and share capital from various Companies during the financial year 2011-12, which have been advanced to the assessee company as unsecured (AY 2012-13) Salasar Yarns Pvt Ltd, loan. The assessing officer noted that the assessee has received unsecured loans from the following those companies; Sr. Name of the parties PAN Amount Rs. No 1 Salasar Filaments Pvt Ltd. AAFCS 2081 K 1,90,00,000/- 2 Todi Rayons Pvt Ltd AABCT 6078 M 3,05,19,700/- 3 Salasar Polytex Pvt Ltd. AAECS 0838 D 2,87,57,630/- 4 Raj R Todi ABRPT 3109 P 80,000/- 5 Dimple Devi Todi AARPT 2658 N 8,00,000/- Total 7,91,57,330/- 3. The assessing officer after issuing show cause notice and hearing the submissions of the assessee treated the amount of Rs. 7,82,77330/- as unexplained cash credit under section 68 of the income tax Act (Act), except the amount received from parties No. 4 &5. On appeal before learned Commissioner (Appeals) entire additions were deleted. The ld. Commissioner (Appeals) deleted the additions by taking view that the amount has already been added in the hand of investor companies. Thus, aggrieved by the order of the ld. Commissioner (Appeals) the revenue has filed present appeals before this Tribunal by raising the grounds of appeal

s narrated above.

4. We have heard the submissions of the learned authorised representative (ld. AR) for the assessee and the learned Senior departmental representative (Sr DR) for the revenue and have seen the orders of the lower authorities.

(AY 2012-13) Salasar Yarns Pvt Ltd, 5. At the outset of hearing the learned ld. AR of the assessee submits that as per the contents of grounds of appeal raised by the revenue, the ld Commissioner (Appeals) deleted the additions at the hand of assessee additions of Rs. 7,82,77,330/- on account of unexplained cash credit on the ground that same amount have been added in the hands of investor companies namely Salasar Filaments Pvt Ltd, Salasar Polytex Pvt Ltd and Todi Rayans Pvt Ltd. All three companies are group companies of the assessee. All group companies of the assessee accepted the additions in their hand and have paid the due tax by availing the benefits of Vivad se Visvas Scheme-2020 (VSV-20). The ld AR for the assessee also furnished the copies of the Form-3 of VSV-20, received by all three companies. The ld AR on the basis of his aforesaid submissions submits that amount which was added in the hands of the assessee has already been taxed in the hands of investor companies and the order of the ld. Commissioner (Appeals) is liable to be upheld by dismissing the appeal of the revenue.

6. On the other hand the ld DR for the revenue after going through the order of ld. CIT(A) and the copy of the Form-3 of VSV-20 in respect of all three group companies submits that he strongly rely of the order of assessing officer.

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