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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI N.K. BILLAIYA & SHRI RAM LAL NEGI
PER N.K. BILLAIYA, ACCOUNTANT MEMBER
This appeal by the Assessee is directed against the order of the Ld. CIT(A)-II, Raipur dated 24.03.2017 pertaining to A.Y. 2012-13.
ITA No. 110/Rpr/2017 & S.P. No. 03/R/18 2 . A.Y. 2012-13 2. The only grievance of the assessee is that the ld. CIT(A) erred in confirming the addition of Rs. 4.90 crores made by the A.O. as unexplained cash credit u/s. 68 of the Act.
During the course of the scrutiny assessment proceedings and on perusing the balance sheet of the assessee, the A.O noticed that the balance sheet shows share application money at Rs. 18,85,50,572/- pending for allotment of shares. The details of outstanding share application money are as under:- 1 Shri Abhinav Khasgiwala Rs. 2,48,000/- 2 Shri Ansar Ahemad Saiyad Rs. 7,00,00,000/- 3 Shri J.K. Jain Rs. 50,000/- 4 Shri J.N. Gupta Rs. 1,77,32,205/- 5 Shri Narendra Agrawal RS. 1,00,000/- 6 Shri Nimish Agrawal Rs. 8,30,000/- 7 Smt. Neha Agrawal Rs. 9,00000/- 8 Smt. Rekha Agrawal Rs. 45,70,917/- 9 Smt. Ruhi Agrawal Rs. 25,00,000/- 10 Shri Sunil Agrawal Rs. 5,62,46,450/- 11 MSA Consultants Rs. 3,04,00,000/- 12 R.K. Enterprises Rs. 50,00,000/- Total Rs. 18,85,50,572/-
The A.O. found that out of the total share application money of Rs. 4.90 crores was received during the year under consideration from Shri Sunil Agrawal, NRI Director of the assessee company.
Since this amount was received during the year under consideration, the A.O. asked the assessee to justify the credit in the light of the provisions of Section 68 of the Act. The assessee filed necessary details along with the confirmation and the details of the payments received from Shri Sunil Agrawal along with his bank statements. It was explained that the money was transmitted from Dubai to India.
ITA No. 110/Rpr/2017 & S.P. No. 03/R/18 3 . A.Y. 2012-13 6. After perusing the documentary evidences brought on record in support of the share application money received from the Director, Shri Suinil Agrawal, the A.O. was not convinced and was of the firm belief that the claim of the assessee company that share application money was deposited by Shri Sunil Agrawal has not been proved. The basis for forming this belief was that the A.O. was of the opinion that Shri Sunil Agrawal could not establish the source of the funds deposited in his bank account. Addition of Rs. 4.90 crores was made u/s. 68 of the Act.
The assessee strongly agitated the matter before the ld. CIT(A) but could not succeed. The First Appellate Authority was of the opinion that the Assessing Officer has given sound reasons for making the addition and therefore no interference was called for.
Before us, the ld. counsel for the assessee reiterated what has been stated before the lower authorities relying upon various documents brought on record in the form of a paper book. Per contra, the ld. D.R. strongly supported the findings of the lower authorities.
We have given a thoughtful consideration to the orders of the authorities below. There is no dispute insofar as the identity of Shri Sunil Agrawal is concerned. Shri Sunil Agrawal is a Director of the assessee company and his identity has not been questioned. The transactions have been done through banking channels. Money has been transmitted from Dubai as per relevant provisions of the relevant Act. Genuineness of the transaction is also not in doubted. The only reason given by the revenue authorities for making the addition is that the capacity of Shri Suni Agrawal has not been proved. The
ITA No. 110/Rpr/2017 & S.P. No. 03/R/18 4 . A.Y. 2012-13 revenue authorities have questioned the source of the funds found in the bank account of Shri Sunil Agrawal. At the very outset, we have to mention that the proviso added to section 68 of the Act is applicable from 01.04.2013 i.e. A.Y. 2013-14 and therefore not applicable to the subject assessment year as held by the Co-ordinate Bench of Mumbai in the case of Gagandeep Infrastructure Pvt. Ltd. in ITA 5784/Mum/2011 which was subsequently confirmed by the Hon’ble High Court of Bombay in 394 ITR 680.
Now let us examine the documentary evidences brought on record an examined by the revenue authorities. The statement showing remittance details is as under:- LNS Industries Ltd. Statement showing remittance from Sh. Sunil Agrawal in F.Y. 2011-12
Foreign Remitter Bank Details Amount Received in Sh. Sunil Agarwal Payment from Sh. Sunil Agrawal to Account LNS Industreis Ltd. S Ch NO. Date Receiv Cur Am Ch No. Ban Date Amo Ban Ch. Date Amo r. /RTGS ed ren oun /RTGS k unt k No./RTGS unt N Form cy t No. Na Na No. o me me. . 220518 Axis 06.0 300 Ban 5.20 000 k 11 Ltd. 220534 Axis 21.0 300 Axis 223385 31.0 700 Ban 5.20 000 Ban 5.20 000 k 11 k 11 Ltd. Ltd. 220590 Axis 06.0 100 Axis 223389 19.0 120 Ban 9.20 000 Ban 1.20 000 k 11 k 12 Ltd. Ltd. 1 OT02091 21.0 Sunil USD 100 OT02091 Stan 23.0 Stan 445 Stan ON36801 05.0 160 1062114 6.20 Agraw 000 1062114 dard 6.20 dard 900 dard 1070501 7201 000 46 11 al, 46 Char 11 Char 0 Cahr 86 1 00 Stand tere tere tere ard d d d Charte NRE Dub NRE red ai Dubai 2 OT02091 28.0 Agraw USD 320 OT02091 Stan 04.0 Stan 143 Stan ON36801 18.1 270 1062824 6.20 al, 000 1062824 dard 7.20 dard 456 dard 1101801 0.20 000 27 11 Stand 27 Char 11 Char 00 Cahr 82 11 0 ard tere tere tere Charte d d d red NRE Dub NRE Dubai ai
ITA No. 110/Rpr/2017 & S.P. No. 03/R/18 5 . A.Y. 2012-13 3 OT02491 18.1 MSA AED 200 OT02491 Stan 19.1 MSA 265 Stan 821476 17.1 250 1101812 0.20 Tradin 000 1101812 dard 0.20 Trad 745 dard 1.20 000 08 11 g FZC, 08 Char 11 ing 4 Cahr 11 0 Stand tere FZC, tere ard d RAK d Charte NRE NRE red,Ab u Dhabi 4 OT02491 24.1 MSA AED 200 OT02491 Stan 25.1 MSA 265 Stan 821478 24.1 200 1102418 0.20 Tradin 000 1102418 dard 0.20 Trad 957 dard 1.20 000 29 11 g FZC, 29 Char 11 ing 4 Cahr 11 0 Stand tere FZC, tere ard d RAK d Charte NRE NRE red,Ab u Dhabi 5 OT02791 21.0 Sunil USD 900 OT02791 Stan 30.0 Stan 449 Stan 821479 30.0 500 2013002 1.20 Agraw 00 2013002 dard 1.20 dard 280 dard 1.20 000 56 12 al, 56 Char 12 Char 0 Cahr 12 Stand tere tere tere ard d d d Charte NRE Dub NRE red ai Dubai 6 BKIDH12 14.0 Habib INR 195 BKIDH12 Stan 14.0 Habi 195 Stan OT36801 31.0 450 0458026 2.20 Bank 566 0458026 dard 2.20 b 566 dard 2013104 1.20 000 82 12 AG 9 82 Char 12 Ban 9 Cahr 06 12 0 Zurich, tere k AG tere Dubai d Zuri d NRE ch, NRE Dub ai 7 BKIDH12 23.0 Habib INR 799 BKIDH12 Stan 23.0 Habi 799 Stan SCBHL12 16.0 200 0548808 2.20 Bank 990 0548808 dard 2.20 b 999 dard 0470025 2.20 000 81 12 AG 0 81 Char 12 Ban 00 Cahr 86 12 0 Zurich, tere k AG tere Dubai d Zuri d NRE ch, NRE Dub ai 8 BKIDH12 23.0 Habib INR 678 BKIDH12 Stan 23.0 MSA 678 Stan SCBHL12 23.0 800 0548891 2.20 Bank 140 0548891 dard 2.20 Trad 140 dard 0540045 2.20 000 58 12 AG 7 58 Char 12 ing 7 Cahr 22 12 0 Zurich, tere FZC, tere Dubai d RAK d NRE NRE 9 BKIDH12 24.0 Habib INR 324 BKIDH12 Stan 24.0 MSA 324 Stan SCBHL12 27.0 100 0559007 2.20 Bank 494 0559007 dard 2.20 Trad 494 dard 0580038 2.20 000 10 12 AG 7 10 Char 12 ing 7 Cahr 58 12 00 Zurich, tere FZC, tere Dubai d RAK d NRE NRE Tota 492 490 l 963 200 51 00
ITA No. 110/Rpr/2017 & S.P. No. 03/R/18 6 . A.Y. 2012-13 11. Deposits at Serial No. 1 & 2 has come from Standard Chartered Bank, Dubai as per the following bank statements:-
Sunil Kumar Agarwal & / Or Rekha Agarwal Standard Chartered Bank Branch : Dubai Enquiry Te. No. : 600522288 Stmt No. /Date : 1 of 1/ 29 June 11 Currency : USD Account Type : Current Account Account No. : 01203387401 Date Description Withdrawal Deposit Balance 1 June11 Balance Brought Forward 249975.00 IT02091106180314 18 June 11 338517.77 HANYUS33XXX PEAK STAR TRADING CO.(L.L.C), (GOVTBUS 221562.00 471537.00 TRF AGST CHEQUE RECEIVED TRF TO A/COF BUSINESS ASS OT02091106180933 20 June 11 7.00 471530.00 TT CHARGES OT02091106180933 21000.00 450530.00 2033874 SUNIL KUMAR AGAR 21 June 11 100000.00 350530.00 Txn date : [23/06/2011 OT02091106282427 28 June 11 320000.00 30530.00 SUNIL KUMAR AGAR
Deposit at Serial No. 3 has come from Standard Chartered Bank, Abu Dhabi Branch as under:-
M.S.A Trading FZC Standard Chartered Bank Branch : Abu Dhabi Enquiry Te. No. : 600522288 Stmt No. /Date : 1 of 1/ 20 Oct 11 Currency : AED Account Type : Current Account Account No. : 01605953801 Date Description Withdrawal Deposit Balance 14 Oct 11 Balance Brought Forward 342199.77 16 Oct 11 Transfer Cheque Debit 3682.00 338517.77 Cheque No. 0000108385 17 Oct 11 Cash withdrawal Cheque No. 0000108389 71760.00 266757.77 18 Oct. 11 Cheque No. 0000108386 4641.00 262116.77 Cheque No. 0000108387 977.00 261139.33
OT02491110181208 40.00 261099.33 TT Charges
OT02491110181208 200000.00 61099.33 Sunil Kumar Agar 19 Oct.11 Cash Deposit 200000.00 261099.33 Transfer Cheque Credit 170000.00 431099.33 Trade Licence Reversal 2000.00 433.099.33 20 Oct. 11 Transfer Cheque Credit 200000.00 633099.33
ITA No. 110/Rpr/2017 & S.P. No. 03/R/18 7 . A.Y. 2012-13 13. Deposit at Serial No. 4 has come from Standard Chartered Bank, Abu Dhabi Branch as under:- M.S.A Trading FZC Standard Chartered Bank Branch : Abu Dhabi Enquiry Te. No. : 600522288 Stmt No. /Date : 1 of 1/ 27 Oct 11 Currency : AED Account Type : Current Account Account No. : 01605953801 Date Description Withdrawal Deposit Balance 21 Oct 11 Balance Brought 633099.33 Forward 23 Oct 11 Transfer Cheque Debit 363099.33 Cheque No. 270000.00 0000108390 24 Oct 11 OT02491110241829 363059.00 TT Charges 40.00 OT02491110241829 Sunil Kumar Agar 200000.00 163059.33
Deposit at Serial No. 5 has come from Standard Chartered Bank, Dubai as under:-
Sunil Kumar Agarwal &/OR Rekha Agaf Branch : Dubai P.O.Box Currency : USD Account No. : 01203387401 Date From : 01/01/2012 To Date : 01/04/2012 Start Balance : 30,488.00 CR
Date Description Withdrawal Deposit Balance 10 Jan 12 By order Peak Star 0.00 93,100.00 123,588.00 CR Trading Co. (LLC) 17 Jan 12 OT02091201171423 7.00 0.00 123,581.00 CR TT Charges
OT02091201171423 0.00 96,581.00 CR 27.000.00 2033874 21 Jan 12 OT02091201210264 27.00 0.00 96,554.00 CR TT Charges
OT02091201210264 90,000.00 0.00 6,554.00 CR Sunil Agarwal 24 Jan 12 Rev of 0.00 27.00 6,581.00 CR OT02091201210264
30 Jan 12 OT02091201210264 20.00 0.00 6,561,00 CR UAINV0561 07 Feb 2012 OT0209120 1300256 30.76 0.00 6,530.24 CR Other Bank Charges
And deposit at Serial Nos. 6, 7, 8 & 9 has come from Standard Chartered Bank Barakhamba Road and the same is as under:-
ITA No. 110/Rpr/2017 & S.P. No. 03/R/18 8 . A.Y. 2012-13
000584 DDAB05 BRANCH • : Barakhamba Road MR SUNIL KUMAR AGARWAL STATEMENT DATE : 29 Feb 2012 601 SOUTH RIDGE TOWER NO 06 BURJ DOWN CURRENCY : INR TOWN P O BOX 48987 DUBAI ACCOUNT TYPE NRE SAVINGS ACCOUNT ACCOUNT NO. : 52211931027 UNITED ARAB EMIRATES NOMINEE REGISTERED : Yes
BRANCH ADDRESS: Narain Manzil;23, BaraKhamba Road New Delhi 110001 IFSC: SCBL0036020 , PHONE NO.: 41524403 Date Value Date Description Cheque Deposit Withdrawal Balance Feb 01 Feb 01 Balance Forward 1,85,519,89 Feb 14 Feb 14 I 1,955,669.00 2,141,188,89 L36701202143558 BKIDH12045802682 HABIB BANKAG ZURICH OMMISSION PAID SENDER IFSCBKID0000150 OL36801202160918 Feb 16 Feb 16 2,000,000.00 1,41,188.89 SCBLH12047002586 LNS INDUSTRIES LTD INVESTMENT RECEIVER IFSC UTIB0000214 IL36701202230433 Feb 23 Feb 23 7,999,900.00 8,141,088.89 BKIDH12054880881 HABIB BANK AG ZURICH COMMISSION PAID SENDER IFSCBKID0000150 6,781,407.00 14,922,495.89 IL36701202232898 BKIDH12054889158 PEAK STAR TRADING CO LLC COMMISSION PAID SENDER IFSC8KID0000150 8,000,000.00 6,922,495.89 OL36801202231729 SCBLH12054004522 LNS INDUSTRIES LTD FUND TRF RECEIVER IFSC UTIBOOOOZ14 IL36701202241011 Feb 24 Feb 24 3,244,947.00 10,167,442,89 BKIDH12055900710 SPACE STAR GENERAL TRADING SENDER IFSCBKID0000150 OL36801202271173 Feb 27 Feb 27 10,000,000.00 167,442,89 SCBLH 12058003858 LNS INDUSTRIES LTD INVESTMENT RECEIVER IFSC UTIB0000214 RTGS RETURN SCBLH12058003858 LNS 10,000,000.00 10,167,442.89 INDUSTRIES LTD //SCBLH 12058003858//ACCOUNT DOES N OL36801202271173 IL36701202275903 10,167,442.89 29,981,923,00 20,000,000.00 Total
A perusal of the afore-stated details clearly establishes the sources of Shri Sunil Agrawal. It is not the case of the Assessing Officer that the appellant company
ITA No. 110/Rpr/2017 & S.P. No. 03/R/18 9 . A.Y. 2012-13 has purchased cheque from Shri Sunil Agrawal by paying cash. It can be seen from the above that every time the money has been transmitted by Shri Sunil Agrawal he had clear balance in his bank account. As mentioned elsewhere, for the subject assessment year, the revenue cannot question the source of the source.
Considering the facts mentioned hereinabove, we have no hesitation to hold that the assessee has successfully discharged the onus cast upon it by provisions of Section 68 of the Act and therefore no adverse inference is called for.
We set aside the findings of the ld. CIT(A) and direct the A.O. to delete the addition of Rs. 4,90,20,000/-. Appeal filed by the Assessee is allowed.
Since we have decided the appeal in favour of the assessee, the stay petition filed by the assessee becomes otiose.
Order pronounced in Open Court on 16 - 04- 2018 Sd/- Sd/- (RAM LAL NEGI) (N. K. BILLAIYA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER RAIPUR: Dated 16/04/2018 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER
Sr. P.S. ITAT,Raipur