ITO, WARD-2(4), BURDWAN, BURDWAN vs. M/S R.J.BUSINESS SOLUTION PVT. LTD., BURDWAN

Learned departmental representative takes us to the CIT(A)’s detailed discussion on the above stated sole issue granting relief to the assessee as follows:- “Facts of the case are that the appellant company had introduced share capital to the tune of Rs 79.94 lakhs during the relevant period which was claimed to be from several share applicants. The AO, during assessment proceedings, held the entire share subscription to be bogus and added the amounts back into the hands of the company as its own income form undeclared sources. u/s 68 of the Act. During appeal proceedings, the appellant has attended and stated that he is not pressing the various issues of the appeal in view of the fact that he, along with the promoters and their group firm had gone in for a settlement in front of the settlement commission, Kolkata bench and had obtained an order for such settlement. In this order, a copy of which has been submitted and placed on record, he has shown that the settlement commission has accepted he declaration of the appellant that the main investors in the appellant company were the promoters of the company, Shri Jogendra Burman and his wife, Anita Burman along with their own firm Ma Sarbamangla Quality sand, each separately assessed to tax. The AR, in this respect, has submitted the following:

2 Assessment Year: 2011-12 M/s. R.J. Business Solution Pvt. Ltd  In this case, the total investment in share capital of the company during the AY 2011- 12 was Rs 79,45,000/-.  The list of promoters contains names of various people including the names of main promoters, Shri J. Burman and his wife Anita Burman.  That Shri Jogendra Burman has obtained an order from the settlement commission wherein he has offered for taxation the share application money and paid tax on the same.  That the investment in the appellant company has been made out of the income of the partnership firm Ma Sarbamangala quality sand (MSQS.), where the Shri J Burman and his wife Anita Burman are the only partners.”  That the investments were made in the names of various benamdars and the actual investmenthas come out of the partnership firm MSQS.  That the Settlement Commission, after necessary inquiries, has passed an order saying that out of the investment of Rs 79,45,0001- during the AY 2011-12, Shri Jogendra Burman made 11 investment of Rs 8 lakh; his wife made an investment of Rs 5,5 lakh and that these are accepted as genuine and creditworthy for the investments to have come out of their own individuals and mining business, regularly assessed to tax.  Balance investment of Rs 79.45 lakh - Rs 13,50 lakh = 66,95 lakh was not found to be creditworthy. In the hands of the claimed investors and was to be taxed in the hands of the partnership firm MSQS as per the order of the settlement commission. The appellant has provided the following summary:

Learned senior departmental representative vehemently contends during the course of hearing that the CIT(A) has erred in law as well as on facts in reversing the assessing officer’s action making the impugned addition of unexplained share application money. We find no merit in this instant sole plea since with the Income Tax Settlement Commission’s order has assessed the very amount in the hands of assessee’s share applicants concerned (supra). We therefore conclude that the CIT(A) has rightly granted relief to the assessee to avoid an instance of double addition qua the very issue during the course of lower appellate proceedings. Revenue’s sole substantive ground is declined therefore.

This Revenue’s appeal is dismissed.