COMMISSIONER OF INCOME TAX vs. M/S CORAL BARTER PVT. LTD.

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TAXC/18/2012HC ChhattisgarhCGHC01017000201210 March 2014Bench: HON'BLE THE CHIEF JUSTICE,HON'BLE SHRI JUSTICE PRASHANT KUMAR MISHRA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals had no merit and dismissed them. The Court noted that the Assessee, a finance company, had received share money through banking transactions from other companies which were also assessees. The CIT(A), considering the evidence on record, held that there was no justification to doubt the genuineness of these transactions and deleted the additions made by the AO. This finding was upheld by the Tribunal. The High Court found no illegality in the CIT(A)'s and the Tribunal's concurrent findings that the transactions were genuine. Therefore, the deletion of additions by the AO was affirmed. No issue was expressly left undecided.

What were the facts?

The Income Tax Department (Revenue) filed two tax appeals before the High Court of Chhattisgarh at Bilaspur against an order dated 14.10.2011 passed by the Income Tax Appellate Tribunal (Tribunal). The appeals pertained to assessment years (AYs) 2003-04 and 2004-05 concerning M/s Carol Barter Private Limited (Assessee). A search operation on a director of the Assessee led to notices under section 153A read with section 153C of the Income Tax Act, 1961. The Assessing Officer (AO) made additions of ₹2,29,00,000/- for AY 2003-04 and ₹2,00,00,000/- for AY 2004-05. The Commissioner of Income Tax (Appeals) partly allowed the Assessee's appeals, upholding the notice validity but deleting the AO's additions. Both the Revenue and the Assessee appealed to the Tribunal, which dismissed the Revenue's appeals, leading to the present High Court appeals.

What were the issues?

1. Whether in law and on the facts and circumstances of the case, the ITAT has erred in deleting the addition of ₹2.29 crores made by the AO under section 68 of the Act, 1961 on account of unexplained cash credit by way of share application money for AY 2003-04? 2. Whether in law and on the facts and circumstances of the case, the ITAT has erred in deleting the addition of ₹2 crores made by the AO under section 68 of the Act, 1961 on account of unexplained cash credit by way of share application money for AY 2004-05? Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue argued that the ITAT erred in deleting the additions made by the AO under section 68 of the Act on account of unexplained cash credit by way of share application money for both assessment years.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 132(1),Section 153A,Section 153C,Section 68

AI-generated summary — verify with the full judgment below

HIGH COURT OF CHHATTISGARH AT BILASPUR CORAM: HON'BLE SHRI YATINDRA SINGH, CJ. HON'BLE SHRI PRASHANT KUMAR MISHRA, J. APPELLANT RESPONDENT APPELLANT RESPONDENT TaxCaseNo.19of2012 Commissioner of Income Tax, Raipur (CG) VERSUS M/s Carol Barter Private Limited, Dhillon Complex, Raipur (CG) TaxCaseNo.18of2012 Commissioner of Income Tax, Raipur (CG) VERSUS M/s Carol Barter Private Limited, Dhillon Complex, Raipur (CG) APPEALS UNDER SECTION 260-A OF INCOME TAX ACT. 1961 Appearance: Shri Anand Dadaria, counsel for the Appellant. Shri Manoj Kumar Sinha, counsel for the Respondent. JUDGEMENT (11thMarch,2014) 1. These are the tax appeals by the Income Tax Department (the Department) under section 260A of the Income Tax Act, 1961 (the Act) against the order dated 14.10.2011 passed by the Income Tax Appellate Tribunal, Bilaspur Bench, Camp at Raipur (the Tribunal) dismissing the appeals of the Department against M/s Carol Barter Private Limited, Bhilai (the Assessee) in respect of the assessment years (AYs) 2003-04 and 2004-05. THE FACTS 2. Tax Appeal- 19 of 2012 is in respect of AY 2003-04 and Tax Appeal-18 of 2012 is in respect ofAY 2004-05. 3. The Assessee had filed its return of income in respect of the aforesaid AYs on 25.11.2003 and 26.10.2004 indicating the total income of ^550/- and ^5,660/-, respectively. 4. A search operation was conducted under section 132(1) of the Act in the premises of Trilok Singh Dhillon, a Director of the Assessee on

^,^ 24.08.2004 and thereafter the notices under section 153A read with section 153C of the Act were issued. 5. The Assessee filed its return on 07.11.2006 reiterating the same income. 6. The Assessing Officer (the AO) passed his separate orders on 28.12.2006 adding a sum of ^2,29,00,000/- and ^2,00,00,0007- in respect of the aforesaid AYs. 7. Aggrieved by the aforesaid order, the Assessee filed two separate appeals before the Commissioner of Income Tax (Appeals) (the CIT-A). They were partly allowed on 20.03.2008. By the said order, the CIT-A upheld the validity of the notice under section 153A readwith section 153C ofthe Act, however, deleted the additions made by the AO. 8. The Department as well as the Assessee filed appeals before the Tribunal. The Tribunal upheld the order of the CIT-A and dismissed all appeals. Hence, the present two appeals by the Department. THE DECISION 9. We have heard counsel for the parties. 10. Tax Case- 19 of 2012 was admitted on 08.05.2012 on the following substantial question of law: 'Whether in law and on the facts and circumstances ofthe case, the ITAT has erred in deleting the addition of ^2 crores made by the AO under section 68 of the Act, 1961 on account of unexplained cash credit byway of share application money?' 11. The counsel for the parties agreed that there is a mistake in the amount mentioned in the aforesaid question. It should be ^2.29 crores instead of ^2 crores,

.^" --..^ . '^ ^;^j^l ^ 12. Tax Case- 18 of 2012 was admitted on 10.03.2014 on the following substantial question of law: 'Whether in law and on the facts and circumstances of the case, the ITAT has erred in deleting the addition of ^2 crores made by the AO under section 68 of the Act, 1961 on account of unexplained cash credit byway of share application money?' 13. The basic question involved in both the appeals is regarding the deletion of the amount added by the AO. 14. The Assessee is a finance company. In respective of the AYs, it had received share money. In the AY 2003-04, it had received ^2,29,00,0007- from 20 private companies. In the AY 2004-05, it had received ^2,00,00,000/- from 8 different companies. 15. The AO doubted the genuineness of the transaction of the receipt of the share capital and as such the amount received by the Assessee was added under section 68 of the Act. 16. The money was received through banking transaction from the companies. They were also Assessees under the Act. 17. Considering the aforesaid aspect as well as the evidence on record, the CIT-A has held that there was no justification to doubt the genuineness of the transaction. It is for this reason that the additions made by the AO were deleted. This finding has been upheld by the Tribunal. There is no illegality in the same. nimmi 18. In view of above, the tax cases have no merit. They are dismissed. Sd/- ChiefJustice Sd/- Prashant Kumar Mishra Judge

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