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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY
PER R.S.SYAL, VP :
This appeal by the Revenue is directed against the order passed by the CIT(A)-2, Nashik on 03-03-2015 in relation to the assessment year 2008-09.
It is a recalled matter in as much as the earlier order passed by the Tribunal was subsequently recalled vide is later order dated.11- 02-2019.
2 ITA No.846/PUN/2015 Sant Satramdas Infrastructure Pvt. Ltd.,
The only issue raised in this appeal is against the deletion of
addition of Rs.20.00 lakh made by the Assessing Officer (AO) on
account of Share Application Money.
Briefly stated, the facts of the case are that the AO observed
that the assessee received share application money of Rs.20.00 lakh
for issuing 2000 shares @100/- each to two of its directors. Since
the share application money so received was not converted into
allotment of shares, which event actually took place in the financial
year 2012-13, the AO made the addition of Rs.20.00 lakh
u/s.41(1)/68 of the Act. The ld. CIT(A) deleted the addition.
We have heard the rival submissions and gone through the
relevant material on record. In so far as the consideration of the
applicability of section 68 is concerned, it is seen that the assessee
did not receive such amount in the previous year relevant to the year
under consideration as it emanates from the reasons recorded by the
AO for framing the instant assessment u/s.147, a copy of which has
been placed at page 112 of the paper book, reading as under :
“In the case, scrutiny assessment u/s.143(3) has been finalized on 02-12-2010 determining loss at Rs.6,06,442/-. It is seen from the Balance Sheet that an amount of Rs.20 lakhs is kept as Share Application Money, however, there is not a single
3 ITA No.846/PUN/2015 Sant Satramdas Infrastructure Pvt. Ltd., share with the assessee to be allotted against that money. When there is no share with the assessee, there is no question of invitation of application for shares so that this pertained to that application. Since, it is outstanding from previous year and if it is an old applied money, it should have been returned by this time under the Company Law. Under these circumstances, it is clear that the income is taken to the Balance Sheet and kept it as share application money so that it is not taxed. Therefore, it should have been taxed as unexplained cash credits u/s.68 of I.T. Act, 1961. In view of the above, I have reason to believe that income of Rs.20 lakhs has escaped assessment for the year under consideration within the meaning of section 147 of I.T. Act, 1961.”
It can be seen from the above reasons that the AO has
affirmatively found that the amount of Rs.20.00 lakh shown in the
balance sheet is itself from previous year. Thus, it is apparent from
the reasons itself that the amount of Rs.20.00 lakh was received by
the assessee in the form of share application money in the earlier
year. This fact also gets fortified from the copies of account of the
directors from whom the said amount of Rs.20.00 lakh was received
at Rs.10.00 lakh each on 31-12-2006. Since the instant amount of
Rs.20.00 lakh was actually received by the assessee on 31-12-2006,
which falls in the assessment year 2007-07, section 68 cannot apply
to such amounts in the assessment for the assessment year 2008-09
under consideration.
As regards the case of the AO for application of section 41(1),
we find that the same is not attracted to loans and advances received
4 ITA No.846/PUN/2015 Sant Satramdas Infrastructure Pvt. Ltd., by the assessee. Further, there can be no question of cessation or
remission of liability as the shares were admittedly issued in a
succeeding year.
We, therefore, approve the view taken by the ld. CIT(A) in
deleting the addition of Rs.20.00 lakh.
In the result, the appeal is dismissed.
Order pronounced in the Open Court on 12th December, 2019.
Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; �दनांक Dated : 12th December, 2019 सतीश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत आदेश आदेश आदेश अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. 3. The CIT(A)-2, Nashik 4. The CIT-2, Nashik िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे 5. “बी” / DR ‘B’, ITAT, Pune; 6. गाड� फाईल / Guard file. आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
ITA No.846/PUN/2015 Sant Satramdas Infrastructure Pvt. Ltd., Date 1. Draft dictated on 11-12-2019 Sr.PS 2. Draft placed before author 11-12-2019 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.
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