M/S RAM DEV INTERNATIONAL LTD.,KARNAL vs. ACIT, KARNAL

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ITA 1707/DEL/2017Status: DisposedITAT Delhi16 December 2019AY 2013-1426 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the appeal filed by the assessee. The Tribunal found that the CIT(A) had passed a speaking order on merits, providing detailed reasons for his decision. The Tribunal noted that no new material was brought on record by the assessee before the ITAT to persuade them to take a different view from that of the CIT(A). The Tribunal agreed with the CIT(A)'s findings that the assessee had failed to discharge its onus regarding the genuineness and creditworthiness of M/s Acer Foods Pvt. Ltd. The fact that the company and its directors could not be located at the given address, and the bank manager disowned the bank statement provided by the assessee, indicated that M/s Acer Foods Pvt. Ltd. was a shell company. Furthermore, the income tax return of M/s Acer Foods Pvt. Ltd. for AY 2013-14 did not demonstrate the creditworthiness to invest Rs. 7 crores in shares at a premium without justification. Therefore, the addition of Rs. 7 crores was upheld. The Tribunal explicitly clarified that the assessee could approach the ITAT for restoration of the appeal under Proviso to Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, if they chose to do so.

What were the facts?

The assessee, M/s Ram Dev International Ltd., filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order dated 16.01.2017 passed by the Commissioner of Income Tax (Appeals) [CIT(A)], Karnal. The appeal pertains to Assessment Year 2013-14. The Assessing Officer (AO) had made an addition of Rs. 7,00,00,000/- on account of share application money received from M/s Acer Foods Pvt. Ltd. The AO's action was upheld by the CIT(A). The assessee's grounds of appeal challenge the CIT(A)'s decision to uphold this addition, questioning the genuineness and existence of the shareholders. The appeal was heard by the ITAT, with the Revenue represented by a Senior Departmental Representative, but no one appeared for the assessee.

What were the issues?

1. Whether the addition of Rs. 7,00,00,000/- made under Section 68 of the Income Tax Act, 1961, is justified, considering the assessee's contention that it had discharged its onus by providing supporting documents like PAN, bank details, income tax returns, and ROC filings for share allotment. 2. Whether the CIT(A) erred in upholding the AO's action that the share capital and share premium are not genuine and the shareholders do not exist, despite the assessee's submissions. The Assessee argued that it had discharged its onus by furnishing all supporting documents, including PAN, bank details, income tax returns, and details of share allotment with the Registrar of Companies (ROC). The Revenue, through the Ld. Sr. DR, relied on the orders of the Assessing Officer and the CIT(A), asserting that the assessee failed to establish the identity, creditworthiness, and genuineness of the share applicant, M/s Acer Foods Pvt. Ltd., as summons issued to the company and its directors remained unserved, and the company's existence at the given address was disproven. The Revenue also highlighted that the bank statement provided by the assessee for M/s Acer Foods Pvt. Ltd. was disowned by the bank manager.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 131,Section 133(6),Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI

Before: SHRI AMIT SHUKLA & SHRI ANADEE NATH MISSHRA

ORDER PER ANADEE NATH MISSHRA, AM [A] This appeal has been filed by the Assessee against the impugned appellate order dated 16.01.2017 passed by Learned Commissioner of Income Tax (Appeals) Karnal, [in short, “Ld.CIT(A)”] pertaining to Assessment Year 2013-14. The Assessee has raised following grounds of appeal:-

“1. On the facts and in the circumstances of the case as well as in the law the Ld. Commissioner of Income Tax Appeals grossly erred in upholding addition of Rs. 7,00,00,000 /- made U/s 68 of the Income Tax Act, 1961.

2.

On the facts and in the circumstances of the case as well as in the law the Ld. Commissioner of Income Tax Appeals grossly erred in upholding the action of Ld. Assessing Officer that the share capital & share premium is genuine and shareholders does not exist.

3.

The appellant crave leave to add/delete/alter or modify any or all grounds of appeal

ITA No.- 1707/Del/2017. Ram Dev International Ltd. These actions of Ld. Income Tax Authorities below, being arbitrary, unjust and invalid in the law liable to be quashed and it is prayed to Your honor that they please be quashed and/ or any other relief just deem fit and proper please be directed.

Appellant pray accordingly.”

[B] Vide Assessment Order dated 08.03.2016 passed under Section 143(3) / 144 of the Income Tax Act, 1961 (in short “the I.T. Act”). The relevant portion of the Assessment Order dated 08.03.2016 is reproduced as under:-

“

ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd.

”

[C] The Assessee filed appeal before the Ld. CIT(A). Vide impugned appellate order dated 16.01.2017, the Ld. CIT(A) dismissed the assessee’s appeal. The relevant portion of the order dated 16.01.2017 of the Ld. CIT(A) is reproduced as under:

“

ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd. ITA No.- 1707/Del/2017. Ram Dev International Ltd.

”

[D] This present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 16.01.2017 of the Ld. CIT(A). At the time of hearing, Revenue was represented by Shri Surender Pal, the learned Senior Departmental Representative (“Ld.

Sr. DR”, for short). However, none was present from the assessee’s side. In the absence of any representation from assessee’s side, at the time of hearing before us, we heard the Ld. Sr. DR; who relied upon the order dated 08.03.2016 of the Assessing Officer and the aforesaid impugned order dated 16.01.2017of the Ld. CIT(A). After perusal of the materials on record, including the order of the AO and the aforesaid impugned order dated 16.01.2017of the Ld. CIT(A), we find that the Ld. CIT(A) has passed speaking order on merits. Relevant portion of the impugned order of the Ld. CIT(A) has already been reproduced in foregoing paragraph [C] of this order. We find that the Ld. CIT(A) has given detailed reasons for his decision on merits in the aforesaid impugned appellate order dated 16.01.2017of Ld. CIT(A). During appellate proceedings in Income Tax Appellate Tribunal (“ITAT”, for short) no material has been brought for our consideration to persuade us to take a view different from the view taken by the Ld. CIT(A) in the impugned order on merit. After hearing the Ld. Sr. DR and after perusal of Page 25 of 26

ITA No.- 1707/Del/2017. Ram Dev International Ltd. materials on record, and further, in view of the foregoing discussion, we decline to interfere with the aforesaid impugned appellate order dated 16.01.2017 of Ld. CIT(A), and accordingly, this appeal is dismissed.

[E] Before we part; we explicitly clarify that the assessee will be at liberty to approach ITAT for restoration of the appeal in accordance with Proviso to Rule 24 of Income Tax (Appellate Tribunal), Rules, 1963. If the assessee does approach ITAT for restoration of the appeals in ITAT, the matter will be considered in accordance with law having regard to the facts and circumstances.

[F] In the result, appeal filed by Assessee is dismissed.

Order pronounced in the open court on 16/12/2019

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