PNN STEEL PVT. LTD.,CHENNAI vs. ITO CORPORATE WARD 5(2), CHENNAI

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ITA 2601/CHNY/2017Status: DisposedITAT Chennai12 February 2018AY 2013-148 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO had applied the amended proviso to Section 68 incorrectly. The assessee had provided details of share applicants, IT returns, and bank statements to establish identity and genuineness.

What were the facts?

The assessee received share application money from three private limited companies. The Assessing Officer (AO) treated this money as an unexplained cash credit under Section 68 as the share applicants did not respond to notices or could not be served.

What were the issues?

Whether share application money received by the assessee can be treated as an unexplained cash credit under Section 68 when the assessee has provided sufficient evidence of identity and genuineness of the transaction.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN

For Appellant: Adv. :

: अपीलाथ' क* ओर से/ Appellant by Mr.T.Pramodkumar Chopda, Adv. : Mr.S.Nataraja, JCIT ()यथ' क* ओर से /Respondent by : 12.02.2018 सुनवाई क* तार"ख/Date of Hearing घोषणा क* तार"ख / : 12.02.2018 Date of Pronouncement आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER: is an appeal filed by the assessee against the Order of Commissioner of Income Tax (Appeals)-3, Chennai, in dated 31.07.2017 for the AY 2013-14.

2.

Shri S.Nataraj, JCIT, represented on behalf of the Revenue and Shri T.Pramodkumar Chopda, Adv., represented on behalf of the assessee. :- 2 -:

3.

Co., and doing business of Trading in iron and steel. The assessee had, during the relevant Assessment Year, received share application money to an extent of Rs.80.00 lakhs from M/s.NextGen Health Solution Pvt. Ltd., 4th Floor, 52, Weston Street, Kolkata, to an extent of Rs.50.00 lakhs for one lakh shares at face value of Rs.10.00 lakhs and share premium of Rs.40.00 lakhs from M/s.LemonGrass Investment Consultants Pvt. Ltd., 4th Floor, 52, Weston Street, Kolkata, to an extent of Rs.20.00 lakhs for 40,000 shares having face value of Rs.4.00 lakhs at a share premium of Rs.16.00 lakhs and M/s.Parasmani Planning and Development Pvt. Ltd., 75, Metcalf Street, Kolkata, to an extent of Rs.10.00 lakhs for 20,000 shares having face value of Rs.2.00 lakhs and premium of Rs.8.00 lakhs.

It was a submission that the AO had questioned the share application money received and the assessee had submitted the details of the share applicants. It was a submission that the AO had got the details verified by the DDIT (Investigation), Unit 2(1), Kolkata, who had reported that M/s.NextGen Health Solution Pvt. Ltd., and M/s.LemonGrass Investment Consultants Pvt. Ltd., had not responded to the notices issued u/s.131(1) and the notices could not be served on M/s.Parasmani Planning and Development Pvt. Ltd., as the address was wrong. It was a submission that the assessee had produced the IT Returns filed by the companies and their bank statements were furnished to establish the identity and genuineness of the transactions. It was a submission that the shares had been issued to the Pvt. Ltd. companies, the shares subscribed through :- 3 -: cross-cheques with valid Share Application Form, Memorandum Association and Board Resolutions. It was a submission that as the first two companies had not responded to the summons issued and as the summons could not be served on the third company, the AO had treated the share application money received by the assessee as an unexplained cash credit u/s.68 of the Act. It was a submission that the AO had applied the amended proviso to Sec.68 to make the addition. It was a submission that in view of the decision of the Hon’ble Supreme Court in the case of Lovely Exports, the addition was liable to be deleted. He also relied upon the decision of the Hon’ble Jurisdictional High Court of Madras in the case of M/s.Lalitha Jewellery Mart Pvt. Ltd., reported in 399 ITR 425 (Mad) as also the decision of the Hon’ble Delhi High Court in the case of M/s.Kamdhenu Steel and Alloys Ltd. (2014) 361 ITR 220 (Delhi)(HC) reported in 361 ITR 220.

4.

The Ld.AR also filed a petition for admission of additional documents, wherein, it has been submitted that at the time of hearing, the assessee had filed only the Board Resolutions, share application and fund flow statement and bank statements. It was a submission that now, the assessee has downloaded various statutory forms and balance sheets filed before the

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