M/S TAYANI HOLDINGS PVT LTD,MUMBAI vs. ITO WARD 8(3)(1), MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL
“SMC” BENCH MUMBAI
BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER
M/s Tayani Holdings
285, Park View Bhiwanji
400020. PAN/GIR No. AADCT3311K
(Applicant)
(Respondent)
Assessee by Ms. Sanjukta Samantara
Revenue by Shri Sunil Agawane, Sr. DR
Date of Hearing
30.01.2025
Date of Pronouncement
11.02.2025
आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 28.11.2024, passed u/s 250
of the Income Tax Act, 1961 (‘the Act’), by the Commissioner of Income Tax (Appeal) / Addl/ JCIT (A) -4, Chennai (‘Ld.
CIT(A)’) for the assessment year 2015-16. The assessee has raised the following grounds of appeal:
1. Addition u/s. 68 alleged unexplained credit on Capital account
- Share Application Money - Rs. 18,25,000/- i) The Id. CIT(A) erred in confirming the addition u/s 68 on account of share application money without appreciating that the 2
M/s. Tayani Holdings Pvt Ltd, Mumbai funds raised were genuine where Appellant had duly discharged its primary onus and the parties having responded to the notices u/s.133(6); the deemed addition u/s. 68 out of Capital Account is uncalled for and the same may be deleted.
ii) Without prejudice to above, as the parties are not related parties within the meaning of Section 40A(2)(b) the addition is uncalled for and the same may be deleted.
Levy of penal interest u/s. 234A, 234B and 234C
The Appellant, on merits, denies its liability to penal interest.
The Appellant craves leave to add, amend or alter all or any of the above Grounds of Appeal.
The only effective ground raised by the assessee is with regard to challenging the orders of Ld. CIT(A) in confirming the additions U/s 68 of the Act on account of share application money received by the assessee .
In this regard Ld. AR appearing on behalf of assessee, reiterated the same arguments as were raised by her before the revenue authorities and also relied upon her written submissions. The contents of which are reproduced here in below
1. The Appellant, is a Pvt Ltd. Co It operates as a holding parent Co. to raise funds for its entire use by its subsidiary Co and it was on the lookout for capital funding from its parties [who are not parties within the meaning of of Sec 40(A)(2)(b)].
2 In pursuance to its efforts, it succeeded to raise the capital funds from four following parties by way of shares application money.
3
M/s. Tayani Holdings Pvt Ltd, Mumbai
Parties Names AMT 133(6) confirmations PAN notice Pages
Narshi Mulji Shah HUF- Rs.9,50,000/-, Yes- 21, AACHN6126L
II Kalpana K. Gala Rs.4,25,000/-, Yes- 23 AJZPG1080E
III Gunvanti V. Gala Rs.3,00,000/-, Yes- 22 ABJPG3211H
VI Form metal press P. Ltd Rs.1,50,000/-, Yes- 20 AAACF0676J
Total Rs. 18,25,000/-
Asst. Order Pg. 2
3 To three parties; shares at par were allotted in subsequent years, ROC returns filed by one party and to last party its share application money is reflecting in Balance Sheet as pending action.
4 The Appellant wholeheartedly and with utmost co-operation had attempted to discharge its primary onus except it failed to produce the parties to whom the Assessing Officer's had issued notices u/s. 133(6) and the parties had responded directly to the Assessing Officer. All except one are not related parties.
5 Sequence of Events as to Return and Assessment (A.Y 2015- 16)
Original Return - Filed on 17.10.2016 Declared income Rs NIL 2. Intimation u/s. 143(1)- Accepting the Return
3 Notice u/s 143(2)- Issued on 13.07.2017
Order u/s. 143(3)- Dated 28.12.2017 Assessed Income Rs. 18,25,000/- (addn. u/s.68)
6 As immediate sources had been provided and all are bank entries, explanation needs to be appreciated. Kindly appreciate the merits we rely upon:
159 ITR 78 (SC) CIT Vs. Orissa Corporation Ltd.
256 ITR 360 (Guj) Dy. CIT Vs. Rohini Builders
4
M/s. Tayani Holdings Pvt Ltd, Mumbai
As held in:
(2023) 156 taxmann.com 432 (Guj) Pr. CIT vs. Siyaram
Addition u/s. 68 Rs.18,25,000/-
1 Share application money raised from 4 parties Primary onus discharged.
Parties Names AMT 133(6) confirmations PAN notice Pages
Narshi Mulji Shah HUF- Rs.9,50,000/-, Yes- 21, AACHN6126L
II Kalpana K. Gala Rs.4,25,000/-, Yes- 23 AJZPG1080E
III Gunvanti V. Gala Rs.3,00,000/-, Yes- 22 ABJPG3211H
VI Form metal press P. Ltd Rs.1,50,000/-, Yes- 20 AAACF0676J
Total Rs. 18,25,000/-
On discharge of Primary Onus 20-33
5
M/s. Tayani Holdings Pvt Ltd, Mumbai
2 On merits kindly see the i) Confirmation of parties with PAN Nos.
ii) Bank Statement.
iii) Parties ITR filing.
iv) The parties had replied to notices u/s.133(6).
P/B page No. 20-33
Sec. 133(6) notices sent -parties replied directly to the Assessing
"Law does not compel the person to do the impossible when the obligation is implied by law, impossibility of performance is a good excuse"
No parties are related within the meaning of Sec.40(A)(2)(b).
3 Shares were allotted to three parties in later years and to one party, the amount was shown in Balance Sheet pending adjustment. Case Analysis 10 Chart explaining allotment 36-37 5.4 The Appellant discharged its primary onus cast u/s 68 with the source, identity, and creditworthiness of transactions. 20-33 Subsequent years balances accepted in Capital A/c. with the allotment of shares to three parties.
6 Per the A/O:
Asst. Order Page11-12 Para 3.3
Assessee has taken bogus shares application money form 4
parties for Rs. 18,25,000/-
In counter:
6
M/s. Tayani Holdings Pvt Ltd, Mumbai
The Assesse has raised genuine share application money for Rs.
18,25,000/- from four parties who are existing with there identity and the transactions are genuine.
Primary onus discharged and parties had responded directly to Assessing Officer against notices u/s 133(6)
Hence addition of unexplained cash credit u/s. 68 in the hand of Appellant is not justified.
Per the CIT(A): CIT(A) Order Page 9, Para 4.4
Submission by the Appellant 68-79
Bank Stmt. 34-35
Evidences on record 22-33
Allotment chart 36-37
Findings
Materials collected by Assessing Officer are congent evidences.
Assessee Company is a paper company and capitals raised are all paper arrangements. What the Assesse disclosed is far form truth. Parties paying have insufficient balances in their Bank
Assessing Officer had made elaborate investigation. Assessing
Officer says creditors are not genuine No congent evidences furnished by Assesse. Addition confirmed.
Submission before CIT(A) 68-79
8. MERITS:
1 Genuine share capital funds by way of shares application money were raised against which the Appellant had duly discharged its primary onus. All parties are existing and they regularly file their Returns under the Income-tax Act, 1961, Parties are not related within the meaning of Sec.40A(2)(b)
PAN numbers with addresses provided. All parties replied directly against notices u/s. 133(6). Confirmation and ITR copies,
Bank statements provided.
Everything ignored by lower authorities.
20-33
2 Payments given by share applicants are all by cheques. Returns are regularly filed with the