THE PR COMMISSIONER INCOME TAX CENTRAL vs. MS MOTISONS BUILDTECH PVT LTD

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ITA/168/2018HC RajasthanRJHC02036912201831 July 2018Bench: KALPESH SATYENDRA JHAVERI,ASHOK KUMAR GAUR9 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose from the orders of the ITAT. The Court observed that the appeals involved more of an appreciation of facts rather than a question of law. The Revenue's counsel had taken the court through the orders of the AO, CIT(A), and Tribunal. The Court concluded that the Tribunal, in considering the matter, had discussed both the law and the factual matrix of the case. Therefore, based on this assessment of facts, the High Court found no substantial question of law to be decided. Consequently, the appeals filed by the Revenue were dismissed. No specific findings were made on the merits of the additions or deletions, as the court declined to entertain the appeals on the ground that no substantial question of law was involved.

What were the facts?

The Principal Commissioner of Income Tax, Jaipur (the Revenue) filed multiple appeals before the High Court of Judicature for Rajasthan, Bench at Jaipur, challenging orders of the Income Tax Appellate Tribunal (ITAT). The ITAT had dismissed the Revenue's appeals, thereby upholding decisions of the Commissioner of Income Tax (Appeals) [CIT(A)]. The appeals involved various assessee companies, including M/s Motisons Entertainment India Pvt. Ltd., M/s Rainbow Buildcon Private Ltd., M/s Motisons Global Pvt. Ltd., M/s Shivansh Buildcon Pvt. Ltd., M/s Bholenath Real Estate Private Ltd., and M/s Motisons Buildtech Pvt. Ltd. The assessment years are not explicitly stated for all appeals but the context suggests they pertain to years where share application money was received at a premium. The core dispute revolves around additions made by the Assessing Officer (AO) under Section 56(1) of the Income Tax Act, 1961, which were subsequently deleted by the CIT(A) and upheld by the ITAT.

What were the issues?

The High Court had to decide whether substantial questions of law arose from the ITAT's orders. The Revenue contended that the ITAT erred in upholding the CIT(A)'s deletion of additions made under Section 56(1) of the Income Tax Act, 1961. The Revenue argued that the share application money received by the assessee companies was unaccounted money introduced in the guise of share application money, as the concerns from whom the money was received neither performed business activity nor showed business income, and lacked the financial capacity to invest at such high premiums. In some appeals (e.g., ITA No. 129/2018, 130/2018, 162/2018, 168/2018), the Revenue also raised questions regarding the ITAT's holding that Section 68 of the IT Act does not empower the CIT(A) to make additions, that additions under Section 68 can only be made by the AO, and that the ITAT ignored provisions of Section 251(1)(a) and the explanation to Section 251(2) of the IT Act. The Revenue also questioned the ITAT's view that Section 56(1) does not empower the CIT(A) to make additions, suggesting the amounts could have been taxed under Section 68. For ITA No. 165/2018, the Revenue questioned the deletion of expenses disallowed for not starting business activity, citing Tuticorin Alkali Chemicals and Fertilizers Pvt. Ltd. The ITAT's reasoning or the assessee's arguments are not detailed in the provided text, beyond the framing of the Revenue's questions.

Which sections of the Income-tax Act were involved?

Section 56(1),Section 68,Section 251(1)(a),Section 251(2),Section 2(7A),Section 2(2A)

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 136/2018 Principal Commissioner Of Income Tax Central , Jaipur. ----Appellant Versus M/s Motisons Entertainment India Pvt. Ltd. , 7Th Floor, Sb-110 Motisons Tower, Lal Kothi, Tonk Road, Jaipur. ----Respondent Connected With D.B. Income Tax Appeal No. 126/2018 Principal Commissioner Of Income Tax Central , Jaipur. ----Appellant Versus M/s Rainbow Buildcon Private Ltd , Sb-110, 7Th Floor, Tonk Road, Jaipur, Rajasthan. ----Respondent D.B. Income Tax Appeal No. 127/2018 Principal Commissioner Of Income Tax Central , Jaipur. ----Appellant Versus M/s Motisons Global Pvt. Ltd. , 7Th Floor, Sb-110, Motisons Tower Lal Kothi, Tonk Road, Jaipur, Rajasthan. ----Respondent D.B. Income Tax Appeal No. 128/2018 Principal Commissioner Of Income Tax Central , Jaipur. ----Appellant Versus M/s Motisons Global Pvt. Ltd. , 7Th Floor, Sb-110, Motisons Tower Lal Kothi, Tonk Road, Jaipur, Rajasthan. ----Respondent D.B. Income Tax Appeal No. 129/2018 Principal Commissioner Of Income Tax Central , Jaipur. ----Appellant Versus

(2 of 9) [ITA-136/2018] M/s Motisons Global Pvt. Ltd. , 7Th Floor, Sb-110, Motisons Tower Lal Kothi, Tonk Road, Jaipur, Rajasthan. ----Respondent D.B. Income Tax Appeal No. 130/2018 Principal Commissioner Of Income Tax Central , Jaipur. ----Appellant Versus M/s Shivansh Buildcon Pvt. Ltd. , A-26, Krishna Nagar, Lal Kothi, Jaipur, Rajasthan. ----Respondent D.B. Income Tax Appeal No. 137/2018 Principal Commissioner Of Income Tax Central , Jaipur. ----Appellant Versus M/s Motisons Entertainment India Pvt. Ltd. , 7Th Floor, Sb-110 Motisons Tower, Lal Kothi, Tonk Road, Jaipur. ----Respondent D.B. Income Tax Appeal No. 138/2018 Principal Commissioner Of Income Tax Central , Jaipur. ----Appellant Versus M/s Bholenath Real Estate Private Ltd. , 248, Musaraf Bhawan, Haldiyon Ka Rasta, Jaipur, Rajasthan. ----Respondent D.B. Income Tax Appeal No. 139/2018 Principal Commissioner Of Income Tax Central , Jaipur. ----Appellant Versus M/s Motisons Entertainment India Pvt. Ltd. , 7Th Floor, Sb-110 Motisons Tower, Lal Kothi, Tonk Road, Jaipur. ----Respondent D.B. Income Tax Appeal No. 162/2018 The Pr. Commissioner Of Income Tax Central , Jaipur ----Appellant Versus

(3 of 9) [ITA-136/2018] M/s Motisons Buildtech Pvt. Ltd. , B-9, Vivekanand Marg, C- Scheme, Jaipur, Rajasthan ----Respondent D.B. Income Tax Appeal No. 165/2018 The Pr. Commissioner Of Income Tax Central , Jaipur ----Appellant Versus M/s Motisons Buildtech Pvt. Ltd. , B-9, Vivekanand Marg, C- Scheme, Jaipur Raj. ----Respondent D.B. Income Tax Appeal No. 168/2018 The Pr. Commissioner Of Income Tax Central , Jaipur ----Appellant Versus M/s. Motisons Buildtech Pvt. Ltd. , B-9, Vivekanand Marg, C- Scheme, Jaipur Rajasthan ----Respondent For Appellant(s) : Mr. Siddarth Bafna for Mr. Anil Mehta For Respondent(s) : HON'BLE MR. JUSTICE KALPESH SATYENDRA JHAVERI HON'BLE MR. JUSTICE ASHOK KUMAR GAUR Judgment 31/07/2018 1. Delay in filing the appeals is condoned. Applications u/s 5 of the limitation Act are allowed. Other defects are waived and applications for the same are also allowed. 2. In all these appeals common question of law and facts are involved hence they are decided by this common judgments. 3. By way of these appeals, the appellant has assailed the judgment and order of the tribunal whereby tribunal has dismissed the appeals of the department.

(4 of 9) [ITA-136/2018] 4. Counsel for the appellant has framed following substantial question of law:- In D.B. ITA No. 136/2018:- 1. whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in upholding the decision of the CIT(A) which erred in deleting the addition of Rs. 1.95 crore/- made under section 56(1) of the Act ignoring the fact that neither any business activity was performed nor any business income has been shown by these concerns from whom share application money has been received, hence, it is the unaccounted money of the assessee company which have been introduced in the garb of share application money by these concerns which don’t have any worth to invest at such high premium. In D.B. ITA No.126/2018:- 1. whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in upholding the decision of the CIT(A) which erred in deleting the addition of Rs. 2 crore/- made under section 56(1) of the Act ignoring the fact that neither any business activity was performed nor any business income has been shown by these concerns from whom share application money has been received, hence, it is the unaccounted money of the assessee company which have been introduced in the garb of share application money by these concerns which don’t have any worth to invest at such high premium. In D.B. ITA No.127/2018:- 1. whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in upholding the decision of the CIT(A) which erred in deleting the addition of Rs. 2 crore/made under section 56(1) of the Act ignoring the fact that neither any business activity was performed nor any business income has been shown by these concerns from whom share application money has been received, hence, it is the unaccounted money of the assessee company which have been introduced in the garb of share application money by these concerns which don’t have any worth to invest at such high premium. In D.B. ITA No. 128/2018:- 1. whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in upholding the decision of the CIT(A) regarding in deletion of the addition of Rs.6,96,50,000/- made under section 56(1) of the Act ignoring the

(5 of 9) [ITA-136/2018] fact that neither any business activity was performed nor any business income has been shown by these concerns from whom share application money has been received, hence, it is the unaccounted money of the assessee company which have been introduced in the garb of share application money by these concerns which don’t have any worth to invest at such high premium. In D.B. ITA No.129/2018:- 1. Whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in deleting the entire addition of Rs.42,07,29,600/- made under section 56(1) of the Act ignoring the fact that assets of the assessee company don’t commensurate to premium charged and further ignoring the fact that the neither any business activity was performed nor any business income has been shown by the assessee. 2. Whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that section 68 of the IT Act does not empower the CIT(A) to make addition under this Act, as the section 68 empowers only the assessing officer to make addition. 3. whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that the addition under section 68 of the IT Act can only be made by the assessing officer by relying upon the definition of assessing officer as provided in section 2(7A) of the IT Act. 4. whether on the facts and the circumstances of the case the Hon’ble ITAT was justified ignoring the provisions of section 251(1)(a) of the IT Act, 1961 which specifically empowers the CIT(A) in an appeal to confirm, reduce, enhance or annual the assessment; 5. whether on the facts and the circumstances of the case of the Hon’ble ITAT was justified in ignoring the explanation of section 251(2) of the IT Act which states that in disposing of an appeal, the [commissioner (appeal)] may consider and decide any matter arising out of the proceeding in which the order appealed against was passed notwithstanding that such matter was not raised before the [commissioner (appeal)] by the appellant. In D.B. ITA No. 130/2018:- 1. Whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in uploading the decision of the CIT(A) regarding in deletion of the 8650000/- out of the total addition of Rs. 9000000/- made under section 56(1) of the Act ignoring the fact that assets of

(6 of 9) [ITA-136/2018] the assessee company don’t commensurate to premium charged and further ignoring the fact that the neither any business activity was performed nor any business income has been shown by the assessee. 2. Whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that section 68 of the IT Act does not empower the CIT(A) to make addition under this Act, as the section 68 empowers only the assessing officer to make addition. 3. whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that the addition under section 68 of the IT Act can only be made by the assessing officer by relying upon the definition of assessing officer as provided in section 2(7A) of the IT Act. 4. whether on the facts and the circumstances of the case the Hon’ble ITAT was justified ignoring the provisions of section 251(1)(a) of the IT Act, 1961 which specifically empowers the CIT(A) in an appeal to confirm, reduce, enhance or annual the assessment; 5. whether on the facts and the circumstances of the case of the Hon’ble ITAT was justified in ignoring the explanation of section 251(2) of the IT Act which states that in disposing of an appeal, the [commissioner (appeal)] may consider and decide any matter arising out of the proceeding in which the order appealed against was passed notwithstanding that such matter was not raised before the [commissioner (appeal)] by the appellant. In D.B. ITA No.137/2018:- 1. Whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in uploading the decision of the CIT(A) regarding in deletion of the 63650000/- out of the total addition of Rs. 77800000/- made under section 56(1) of the Act ignoring the fact that assets of the assessee company don’t commensurate to premium charged and further ignoring the fact that the neither any business activity was performed nor any business income has been shown by the assessee. 2. Whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that section 68 of the IT Act does not empower the CIT(A) to make addition under this Act, as the section 68 empowers only the assessing officer to make addition. 3. whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that the addition under section 68 of the IT Act

(7 of 9) [ITA-136/2018] can only be made by the assessing officer by relying upon the definition of assessing officer as provided in section 2(2A) of the IT Act. 4. whether on the facts and the circumstances of the case the Hon’ble ITAT was justified ignoring the provisions of section 251(1)(a) of the IT Act, 1961 which specifically empowers the CIT(A) in an appeal to confirm, reduce, enhance or annual the assessment; 5. whether on the facts and the circumstances of the case of the Hon’ble ITAT was justified in ignoring the explanation of section 251(2) of the IT Act which states that in disposing of an appeal, the [commissioner (appeal)] may consider and decide any matter arising out of the proceeding in which the order appealed against was passed notwithstanding that such matter was not raised before the [commissioner (appeal)] by the appellant. In D.B. ITA No.138/2018:- 1. whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in upholding the decision of the CIT(A) which erred in deleting the addition of Rs. 2.9 crore/- made under section 56(1) of the Act ignoring the fact that neither any business activity was performed nor any business income has been shown by these concerns from whom share application money has been received, hence, it is the unaccounted money of the assessee company which have been introduced in the garb of share application money by these concerns which don’t have any worth to invest at such high premium. In D.B. ITA No.139/2018:- 1. whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in upholding the decision of the CIT(A) which erred in deleting the addition of Rs. 3.4 crore/- made under section 56(1) of the Act ignoring the fact that neither any business activity was performed nor any business income has been shown by these concerns from whom share application money has been received, hence, it is the unaccounted money of the assessee company which have been introduced in the garb of share application money by these concerns which don’t have any worth to invest at such high premium. In D.B. ITA No.162/2018 1. Whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in uploading the decision of the CIT(A) regarding in deletion of Rs.3.03 Cr made under section 56(1)

(8 of 9) [ITA-136/2018] of the Act ignoring the fact that assets of the assessee company don’t commensurate to premium charged and further ignoring the fact that the neither any business activity was performed nor any business income has been shown by the assessee. 2. Whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that section 56(1) of the IT Act does not empower the CIT(A) to make addition under this Act, as the aforesaid amount could have been taxed under section 68 of the IT Act. 3. whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that the addition under section 68 of the IT Act can only be made by the assessing officer by relying upon the definition of assessing officer as provided in section 2(2A) of the IT Act. In D.B. ITA No. 165/2018:- 1. Whether, on the fact and the circumstances of the case the learned ITAT is justified in upholding the decision of the CIT(A) deleting the addition of Rs.24,20,479/- made by the Assessing Officer by disallowing the expenses as assessee has not started its business activity by ignoring the decision of the Hon’ble Supreme Court of India in the case of Tuticorin Alkali Chemicals and Fertilizers Pvt. Ltd. reported in 227 ITR 172. In D.B. ITA No. 168/2018:- 1. Whether, on the fact and the circumstances of the case the Hon’ble ITAT was justified in uploading the decision of the CIT(A) regarding deletion of Rs 2,86,27,500/- made under section 56(1) of the Act ignoring the fact that assets of the assessee company don’t commensurate to premium charged and further ignoring the fact that the neither any business activity was performed nor any business income has been shown by the assessee. 2. Whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that section 56(1) of the IT Act does not empower the CIT(A) to make addition under this Act, as the aforesaid amount could have been taxed under section 68 of IT Act. 3. whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding that the addition under section 68 of the IT Act can only be made by the assessing officer by relying upon the definition of assessing officer as provided in section 2(2A) of the IT Act. 4. whether on the facts and the circumstances of the case the Hon’ble ITAT was justified in holding

(9 of 9) [ITA-136/2018] that the provisions of section 251(1)(a) of the IT Act, 1961 which specifically empowers the CIT(A) in an appeal to confirm, reduce, enhance or annual the assessment; 5. whether on the facts and the circumstances of the case of the Hon’ble ITAT was justified in holding that the explanation of section 251(2) of the IT Act which states that in disposing of an appeal, the [commissioner (appeal)] may consider and decide any matter arising out of the proceedings in which the order appealed against was passed notwithstanding that such matter was not raised before the [commissioner (appeal)] by the appellant. 5. Counsel for the appellant has taken us to the order of AO, CIT(A) and tribunal and thereafter contended that both CIT(A) as well as Tribunal have erred in deleting the addition of Rs.1.95 crore which was made u/s 56(1). However, the tribunal while considering the matter has discussed the law as well as factual matrix of the case. In our considered opinion, this is more an appreciation of facts rather question of law. 6. In that view of the matter, no substantial question of law arises. 7. Hence, the appeals stand dismissed. (ASHOK KUMAR GAUR),J (K.S.JHAVERI),J Bmg/15-25 & 28

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