I.T.O. 9(2)(3), MUMBAI vs. MARGARETA INFOTECH PVT. LTD., MUMBAI

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ITA 5095/MUM/2012Status: DisposedITAT Mumbai24 October 2016AY 2003-045 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found that the assessee had discharged the onus by establishing the identity, capacity, and genuineness of the transactions, as acknowledged by the Assessing Officer in the remand report. No contrary material was presented by the Revenue.

What were the facts?

The Assessing Officer made an addition of Rs. 5,99,99,600/- under Section 68 of the Income Tax Act. The assessee explained that the remittances were received as an advance for the purchase of a flat from a non-resident shareholder and director, supported by remittance certificates.

What were the issues?

Whether the addition made under Section 68 was justified when the assessee provided evidence of identity, capacity, and genuineness of the transactions, which was accepted in the remand report.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “B”, MUMBAI

Before: Shri Joginder Singh, & Shri N.K. Pradhan

For Respondent: Shri Hari Raheja
Hearing: 24/10/2016

आदेश / O R D E R

Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 11/06/2012 of the Ld. First Appellate Authority, Mumbai. The only ground raised in the present appeal pertains to deleting the addition of Rs.5,99,99,600/- made u/s 68 of the Income Tax Act, 1961 (hereinafter the Act) without appreciating the remand report sent by the Assessing Officer.

2.

During hearing, the ld. DR, Shri Mohammer Rizwan, defended the addition made by the Assessing Officer. On the other hand, the ld. counsel for the assessee, Shri Hari Raheja, claimed that the second remand report, containing the factual matrix, on the issue in hand was duly considered by the Ld. Commissioner of Income Tax (Appeal) and then deleted the addition. Our attention was invited to the remand report and the factual finding recorded by the Ld. Commissioner of Income Tax (Appeal).

1.

2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that during assessment proceedings, the ld. Assessing Officer enquired into the investment made by the assessee company. The remittances were received from Mr. Sunil Vaswani, the shareholder and the Director of the assessee company. The assessee explained that the investment was made by the company, which was received as an advance for 3 M/s Margareta Infotech Pvt. Ltd. purchase of flat at Colaba, Mumbai. It was also explained that the Director, i.e. Mr. Sunil Vaswani was a non-resident and thus was not assessed to tax in India. The assessee also filed the copies of the remittance certificate from the bank evidencing that the remittance had come from a registered company in British Virgin Island. The ld. Assessing Officer did not accept the contention of the assessee and made addition u/s 68 of the Act, on the plea that supporting evidence was not furnished by the assessee.

2.2. On appeal before the Ld. Commissioner of Income Tax (Appeal), remand report was sought from the Assessing Officer and then considering the necessary evidence, the remand report dated 25/01/2012, objections of the assessee and clarification was again sought from the Assessing Officer, and thereafter, the matter was adjudicated. The Revenue is aggrieved and is in appeal before this Tribunal.

2.3. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, we find that before the Ld. Commissioner of Income Tax (Appeal), it was pointed out by the assessee that adequate opportunity was not provided to the assessee. The Ld. Commissioner of Income Tax (Appeal) asked the Assessing Officer to examine the documents produced by the assessee. The ld. Assessing Officer examined

4 M/s Margareta Infotech Pvt. Ltd. the documents and submitted a report dated 15/01/2012 affirming the identity of Shri Sunil Vaswani, by contending that the remittance was made by Mr. Vaswani on behalf of M/s Lournville Holdings Ltd. The certificate of foreign inward remittance, issued by American Express Bank in India, confirmed that the receipt of Rs.3 crores, out of which 99,980/- was subscription of equity shares in the appellant by M/s Lournville Holdings Ltd. and later on transferred to account of the assessee in City Bank, Mumbai. There is a finding in the impugned order that onus, caste upon the assessee, has been discharged, establishing the identity, capacity of the creditor as well as genuineness of the transactions, which was acknowledged by the Assessing Officer through remand report. No other contrary material was brought on record by the Revenue, thus, we find no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal). It is affirmed.

Finally, the appeal of the Revenue is dismissed.

This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 24/10/2016.

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