PRINCIPAL COMMISSIONER ON INCOME TAX - I vs. M/S. ARL INFRATECH LTD.

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 208/2018 Principal Commissioner On Income Tax - I , New Central Revenue Building, Statue Circle, Jaipur Rajasthan ----Appellant Versus M/s. Arl Infratech Ltd. , A-27 13-A, Kanti Chandra Road, Jaipur Rajasthan ----Respondent For Appellant(s) : Mr. Anuroop Singhi with Mr. Aditya Vijay For Respondent(s) : HON'BLE MR. JUSTICE KALPESH SATYENDRA JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 09/07/2018 By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the department confirming the order of CIT(A). Counsel for the appellant has framed following substantial question of law:- “Whether in the facts and circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 1,00,00,000/- ignoring the specific finding of bogus share application money received from M/s Sky Web Pvt. Ltd. recorded by the Assessing Officer and by merely relying upon the order passed in respect of earlier assessment year?”

(2 of 3) [ITA-208/2018] However, the issue is now covered by the decision of this Court in case of Commissioner of Income Tax vs. ARL Infratech Ltd. (DBITA No. 24/2014) decided on 28th September, 2016 wherein it has been held as under:- “5. In our view, the decision of the Supreme Court in the case of CIT v. Lovely Exports P. Ltd. reported in MANU/SC/8539/2008 : [2009] 319 ITR (St.) 5 (SC) held as under: "Can the amount of share money be regarded as undisclosed income under section 68 of the Income-tax Act, 1961? We find no merit in this special leave petition for the, simple reason that if the share- application money is received by the assessee-company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the

impugned

judgment." 6. Counsel for the respondents relied upon the following

decisions: (i)

CIT

Orissa

Corporation

Ltd. MANU/SC/0249/1986 : [1986] 159 ITR 78 (SC), (ii) Shree Barkha Synthetics Ltd. v. Asst. CIT MANU/RH/0760/2005 : [2006] 283 ITR 377 (Raj), (iii) CIT v. Stellar Investment Ltd. MANU/DE/0207/1991 : [1991] 192 ITR 287 (Delhi), (iv) CIT v. Steller Investment Ltd. MANU/SC/0895/2001 : [2001] 251 ITR 263 (SC), (v) CIT v. Divine Leasing and Finance Ltd. MANU/DE/9645/2006 : [2008] 299 ITR 268 (Delhi), (vi) CIT v. First Point Finance Ltd. MANU/RH/0725/2005 : [2006] 286 ITR 477 (Raj) and (vii) CIT v. GP International Ltd. MANU/PH/1537/2009 : [2010] 325 ITR 25 (P & H). 7. Taking into consideration the observations relied on by the respondents and the judgment of the Delhi High Court in the case of CIT v. Value Capital Services P. Ltd. reported in MANU/DE/2791/2008 : [2008] 307 ITR 334 (Delhi) more particularly, the observations which reads as under: "The court in that case held that the additional burden was on the Department to show that even if share applicants did not have the means to make investment, the investment made by them actually emanated from the coffers of the assessee so as to enable it to be treated as the undisclosed income of the assessee. In the absence of such findings, addition could not be

(3 of 3) [ITA-208/2018] made in the income of the assessee under section 68 of the Act." 8. We have heard Mr. Anuroop Singhi counsel for the appellant and Mr. Naresh Gupta counsel for the respondent. 9. Taking into consideration the observations made by the twin decisions as observed by the Tribunal that all the share applicants stand identified. The assessee has provided permanent account numbers of the share applicants. The mode of payment has also been explained. There is no direct or indirect relation between the assessee-company and the share applicants. The statements recorded during survey has got no evidentiary value without any supporting documents or evidence. 10. In our view, the view taken by the Tribunal is just and proper. No substantial questions of law arises in the appeal, hence, the appeal is dismissed. In our view, the view taken by the Tribunal is just and proper. No substantial question of law arises in the appeal, hence, the appeal is dismissed. (VIJAY KUMAR VYAS),J (K.S.JHAVERI),J A.Sharma/114