COMMISSIONER OF INCOME TAX vs. JAI MAA BHAWANI OVERSEAS PVT LTD

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ITA-378/2010HC Delhi2010:DHC:242930 April 20103 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal confirmed the decision of the CIT(A) that the identity of all share applicants was established. The High Court found no infirmity in these findings of fact and no substantial question of law arose.

What were the facts?

The Assessing Officer added Rs 42,60,000 as unexplained income received by the assessee as share application money from 23 companies. The lower authorities, including the ITAT, found that the assessee had furnished all required evidence, including the identity of share applicants and proof of investment.

What were the issues?

Whether the share application money received by the assessee was unexplained income, and if the identity of the share applicants was sufficiently established.

Which sections of the Income-tax Act were involved?

Section 68

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THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on: 30.04.2010

+ ITA 378/2010

COMMISSIONER OF INCOME TAX ..... Appellant

- versus –

JAI MAA BHAWANI OVERSEAS PVT LTD ..... Respondent

Advocates who appeared in this case:- For the Appellant : Mr Sanjeev Sabharwal For the Respondent : Mr Rani Kiyala for Mr Rakesh Gupta

CORAM:- HON’BLE MR JUSTICE BADAR DURREZ AHMED HON’BLE MR JUSTICE V.K. JAIN

1.

Whether Reporters of local papers may be allowed to see the judgment ?

2.

To be referred to the Reporter or not ?

3.

Whether the judgment should be reported in Digest ? BADAR DURREZ AHMED, J (ORAL) 1. This appeal is directed against the order dated 03.07.2009 passed by the Income Tax Appellate Tribunal in relation to the assessment year 2001-2002.

2.

The Assessing Officer had made an addition of Rs 42,60,000/- as unexplained income of the assessee under Section 68 of the Income Tax Act, 1961. The said sum had been received from 23 different companies by way of share application money.

3.

The Commissioner of Income Tax (Appeals) as well as the 2010:DHC:2429-DB

decisions of this Court in CIT v. Divine Leasing and Finance Limited: (2007) 158 Taxman 440 (Del) and CIT v. Lovely Exports (P) Limited: 216 CTR 196. The Tribunal observed that the assessee in the present case has furnished all the evidence that was expected of it. The share applicants had been identified and evidence in the form of share application as well as the balance sheet revealed such investment in the shares of the assessee company. This, according to the Income Tax Appellate Tribunal, established that the shares were applied for by these companies and the shares were also allotted on the basis of these applications.

4.

We may also observe that the Commissioner of Income Tax (Appeals) noted that the summons had been issued to the share applicants and had been responded to by sending replies along with supporting evidence except in a few cases. In those cases where there was no response to the summons, it had been ascertained that the company existed in the record of the Registrar of Companies. The Commissioner of Income Tax (Appeals) also observed that the share application form, share allotment letter and the bank statement clearly established the identity of M/s Rubicon Associates Private Limited, which was one of the entities which did not respond to the summons issued by the Assessing Officer. Even the principal officer of the said company, Mr Rajat Bansal attended the proceedings before the Investigation Wing of the department. In respect of another such company, that is, Reena Oil Industry Private Limited, identical f t t d A th t l J i B b T d P i t Li it d 2010:DHC:2429-DB

had also not responded to the summons issued but had subsequently sent a confirmation, proof of allotment and bank statement as well as the share application form. Consequently, the Commissioner of Income Tax (Appeals) came to the conclusion that the identity of all the share applicants stood established. It is in these circumstances that the Income Tax Appellate Tribunal confirmed the decision of the Commissioner of Income Tax (Appeals).

5.

We also find no infirmity in such conclusions arrived at by the lower authorities. In any event, these are findings of fact and no perversity has been pointed out by the learned counsel for the appellant. No substantial question of law arises for our consideration. The appeal is dismissed.

BADAR DURREZ AHMED, J

V.K. JAIN, J APRIL 30, 2010 SR 2010:DHC:2429-DB

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