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Income Tax Appellate Tribunal, GUWAHATI BENCH
Before: Hon’ble Shri P.M.Jagtap, AM & Shri A.T.Varkey, JM ]
Per A.T.Varkey, JM
This is an appeal filed by the Revenue against the order-2, Guwahati dated 23.02.2017 for A.Y.2009-10. 2. The only grievance of the Revenue is against the action of the ld CIT(A) in deleting the addition of Rs.65,00,000/-, which was made by the Assessing Officer in respect of the share application money received by the assessee.
The brief facts of the case is that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (the ‘ Act ‘ ) was conducted in the case of Satyam Group of Industries/Ratan Sharma group of cases on 06.12.2012 and subsequent dates. During the course of search in the group, the residence of Shri Puroshottam Murarka, Son of Madan Gopal Murarka of 5A, Park View, Nilomani Phukan Path, Chriatian Basti, Guwahati was covered u/s 132 of the Act who happens to be one of party to the said group. From his residence certain evidence regarding undisclosed cash transactions in the name of the present assessee (Satyam Ispat North East Ltd.) came into light with
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an unearthed e-mail communications during the course of search operations and accordingly the assessee has been covered u/s 153C of the Act.
It is noted that in the original return of income filed by the assessee u//s 139 was on 30.09.2009 showing total income of Rs.44,72,227/- and loss of Rs.1,88,72,330/- thereby evident loss carried forward to Rs.1,44,00,103/-. Thereafter the case of the assessee was taken up for scrutiny. The AO notes that there was no compliance on the part of the assessee so the AO issued on 11.02.2015 to show cause as to why assessment should not be completed u/s 153C/144 of the Act. Thereafter the assessee presented itself through its Authorised Representative before the AO and the assessment was framed against the assessee company. In this appeal, we are only dealing with the addition made by AO of Rs.65 lakhs against the assessee which the AO has made after perusal of the balance sheet. It was noticed by him that during the year an amount of Rs.65 lakhs has been received by the assessee as share application money. When the details were called for the assessee replied that it had received share application money from Garuk Dolo for Rs.15,00,000/-, Maya Dolo for Rs.25,00,000/- and Julie Mary Wallang for Rs.25,00,000/- totalling the sum to Rs.65,00,000/-. The AO issued notice u/s 133(6) to those persons on 10.03.2015 and since no replies were received, the AO passed the assessment on 31.03.2015 making an addition of Rs.65 lakhs. Aggrieved the assessee preferred appeal before the ld. CIT(A) who was pleased to delete the same. Aggrieved by the decision of the ld. CIT(A) the Revenue is before us.
We have heard both the parties and perused the records. We note that the assessee had disclosed in its balance sheet an amount of Rs.65 lakhs as share application money from three parties named in the facts of the case (supra). Since the share subscribers had not responded to his notice u/s 133(6) of the Act dated 10.03.2015 the AO made an addition of Rs65 lakhs within 20 dates of sending the notice. The main contentions of the assessee before the ld. CIT(A) was that the assessee had made disclosure of Rs.65 lakhs in the return of income filed u/s 153C of the Act from “ other income” . The ld. Senior Counsel appearing for the assessee drew
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our attention to para 8.3 of the assessment order wherein the AO has recorded his satisfaction in respect to the disclosure of Rs.65 lakhs. The AO notes that “ therefore the disclosure for the particular A.Y.2009-10 is considered to be proper”. We note that the AO has taken note of the assesee’s disclosure of Rs.65 lakhs as “ other income” and has considered that the disclosure to be proper. We note that the ld. CIT(A) has made a categorical finding that the disclosure of assessee was made on account of share application money in para 13.3 of the impugned order which fact has not been assailed by the revenue as a question of fact in the grounds raised before us. Therefore this finding of the ld. CIT(A) get crystallised. Moreover our attention was drawn to the statement of facts filed along with the grounds of appeal before us by the AO i.e. DCIT, Circle-3, Guwahati wherein the AO in his own words stated “the above decision of the ld. CIT(A) appears prima facie to be acceptable. However the issue of telescoping was not raised by the assessee during the course of assessment and hence the AO had not rightly given benefit to the assessee”. So we note that the AO has prima facie accepted the decision of the ld. CIT(A). However his grievance is that the assessee has not raised before the AO during the assessment proceedings about telescoping of the amount i.e. Rs.65 lakhs (which the assessee has made disclosure of an amount of Rs.65 lakhs). We note that the ld. CIT(A) who enjoys co-terminus powers as that of the AO has found that the assessee has made a disclosure of Rs.65 lakhs as share application money received during the year and which fact has been accepted by the AO, so any addition made will amount to double addition. Be the case as it may be, since the AO has accepted Rs.65 lakhs which the assessee made in the disclosure made along with the return, the ld. CIT(A) giving the benefit of telescoping and deleted the addition of Rs.65 lakhs is a just and proper action. So we do not find any justifying reason to interfere in the reasoned order passed by the ld. CIT(A). Therefore the Revenue’s appeal is dismissed.
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In the result the Revenue’s appeal is dismissed. Order pronounced in the Court on 17th August, 2018.
Sd/- Sd/- [P.M.Jagtap] [ A.T.Varkey ] Accountant Member Judicial Member Dated : 17.08.2018. [RG Sr.PS] Copy of the order forwarded to: 1.M/s Satyam Ispat (North East) Limited, NH-52, Banderdewa, Dis. Papumpare, Arunachal Pradesh-791123.
DCIT, Circle-3, Guwahati.
C.I.T.(A)-2, Guwahati 4. C.I.T-2, Guwahati
CIT(DR), Guwahati Bench, Guwahati True Copy By order,
Senior Private Secretary ITAT Guwahati Bench, Guwahati