C I T JAIPUR vs. M/S A L LALPURIA CONSTRUCTION PVT LTD

DB.ITA-39/11 (1) In the High Court of Judicature for Rajasthan Jaipur Bench, Jaipur O R D E R 1. D.B. Income Tax Appeal No.39/2011 Commissioner of Income Tax-I, Jaipur Vs. M/s. A.L. Lalpuria Construction Pvt. Ltd., Jaipur. 2. D.B. Income Tax Appeal No.256/2010 Commissioner of Income Tax-I, Jaipur Vs. M/s. A.L. Lalpuria Construction Pvt. Ltd., Jaipur. 3. D.B. Income Tax Appeal No.26/2011 Commissioner of Income Tax-I, Jaipur Vs. M/s. A.L. Lalpuria Construction Pvt. Ltd., Jaipur. Date :: 25.02.2013 Hon'ble Mr. Justice Ajay Rastogi Hon'ble Mr. Justice Veerendr Singh Siradhana Mr. J.K. Singhi, Sr. Adv. with Mr. Anuroop Singhi, for appellant. Mr. Naresh Gupta, for respondent. Instant three appeals since arise from common judgment of Income Tax Appellate Tribunal (“Tribunal”) dt.31.03.2010, hence heard together & disposed of by the present order. The revenue has preferred instant appeals U/s 260A of Income Tax Act,1961 (“Act,1961”) assailing judgment of the Tribunal dt.31.03.2010 affirming order of Commissioner (Appeals) dt.05.03.2008, with modification that on the statement of Kripa Shanker Sharma, the income of Rs.5 Lacs was assessed in the hands of assessee and it was observed by the Tribunal that the statement of Kripa Shanker Sharma was never confronted and no documentary evidence was supplied to the assessee, in absence whereof the income in the hands of the assessee on the basis of statement of Kripa Shanker Sharma deserves

DB.ITA-39/11 (2) deletion. The assessee as alleged carried out construction activities and disclosed income from sub-contract and investment in building construction. After the search U/s 132 of the Act,1961 was carried out on 12.04.2005 in the case of another assessee M/s. B.C. Purohit & Company at Jaipur & Kolkatta, evidence was gathered and from the investigation it revealed that in the garb of tax consultation the owners and employees of this group were running the racket of providing accommodation entries of gifts, loans, share application money, share investment and long term capital gains in shares. It will be relevant to record that the present assessee might have been in consultation with M/s. B.C. Purohit & Company and a member of the group and has drawn inference regarding providing accommodation entries and the assessing officer was of the view that details made available by the assessee as regards unsecured loans and share application money, reference of which has been made in para-4 of its order, appears to be the accommodation entries and the present assessee was middle man and invoking Sec.68 of the Act, it was considered to be part of the income in the hands of the assessee. However, on appeal preferred before the Commissioner (Appeals) by the assessee U/s 143(3) r/w 147 of the Act,1961 all

DB.ITA-39/11 (3) the factual statements were examined at length and the Commissioner (Appeals), after due appreciation of material which came on record, observed that from independent enquiry the copies of bank account were obtained by the assessing officer and found that for clearing of the cheques issued by these companies either cash was deposited in the same account or in another account of the group company in fact was M/s. B.C. Purohit of which the present assessee was considered to be one of the group member. However, it was further observed that summons issued U/s 131 of the Act were served upon all such applicant/ creditors and their confirmation letters were filed and the companies were assessed to tax being the private limited companies, the existence of their separate legal entity ordinarily could not have been doubted. However on the basis of statement of Kripa Shanker Sharma which was recorded by the search authorities as regards accommodation entries, a sum of Rs.5 Lacs was assessed in the hands of present assessee alone and as regards other income, it was not considered to be in the hands of the present assessee. Obviously the department being aggrieved preferred appeal before the Tribunal and at the same time, the present assessee filed cross objection regarding part of the income, to the extent of a sum of Rs.5 Lacs, as being recorded in the hands of

DB.ITA-39/11 (4) present assessee on the basis of statement of Kripa Shanker Sharma. The Tribunal while appreciating the factual matrix came on record observed that after the summons were issued U/s 131 of the Act,1961 to the applicant/creditors and their confirmation letters were filed and the companies were assessed to tax being private limited companies the existence of their separate legal entity ordinarily could not have been challenged more so when the identity of existence of the investor is not disputed and accordingly upheld the view of Commissioner (Appeals), at the same time further observed that merely on the basis of oral statement of Kripa Shanker Sharma recorded before the search authorities

that

the

assessee

provided accommodation entries was not sufficient for the income to be assessed for a sum of Rs.5 Lacs in the hands of the assessee and while allowing the cross objection filed by the assessee dismissed the appeal preferred by the revenue under order impugned. We have heard the parties at length and of the view that what has been observed by the Commissioner (Appeals) & the Tribunal appears to be based on factual matrix and there appears no substantial question of law arises which may require interference by this Court to be examined in the instant appeal. Consequently, the instant appeals are wholly

DB.ITA-39/11 (5) devoid of merit and accordingly stand dismissed. (Veerendr Singh Siradhana),J (Ajay Rastogi),J VS Shekhawat/-p.5 39ita11Feb25FnlDsps.doc Certificate - All corrections have been incorporated in the judgment/order being emailed/Vijay Singh Shekhawat/PAJW