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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRIB.M. BIYANI
आदेश/O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 21.02.2023 passed by learned Commissioner of Income-Tax (Appeals), NFAC, Delhi [“Ld. CIT(A)”], which in turn arises out of assessment-order dated 11.11.2016 passed by learned Dy.CIT,1(1), Indore [“Ld. AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2014-15, the assessee has filed this appeal on following grounds :-
(i) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of AO in making the addition of Rs. 25,00,000/- under Section 8 of the Act. The appellant prays that the said addition be directed to be deleted. (ii) On the facts and circumstances of the case and in law the Ld. CIT(A) erred in not considering that the aforesaid share application money has Page 1 of 5
Anant Trexim Private Limited, Indore vs. DCIT,1(1), Indore. Assessment year 2014-15 already been considered as income of appellant and the impugned addition is resulting in double taxation of same income. The appellant accordingly submits that the said addition be directed to be deleted.”
The case of assessee/appellant is such that it is a private limited company. The assessee filed return of income declaring a total income of Rs. 1,40,29,860/- inclusive of income of Rs. 1,40,00,000/- under the head “income from other sources” on account of bogus share application money received from certain entry providers, on the basis of survey conducted u/s 133A on 12.02.2014 upon assessee and other group companies. While framing assessment u/s 143(3), the AO observed that the assessee has received total share application money of Rs. 1,65,00,000/- but declared income of Rs. 1,40,00,000/- only and did not declare income relatable to share application money of Rs. 25,00,000/- received from one entry provider M/s. Momentum Real Estate Private Limited [“M/s Momentum”]. When the AO show-caused assessee to explain this non-disclosure, the assessee made a submission which is reproduced by the AO in para 3.3 of assessment order. The assessee mainly submitted that the income/sum of Rs. 25,00,000/- had been offered in the hands of another group company M/s. Jagannath Plastics Private Limited [“M/s Jagannath”] who was ultimate beneficiary of the impugned share application money; therefore the same is taxable in the hands of assessee and accordingly not disclosed. However, the AO was not satisfied with submission of the assessee. The AO noted that as per section 68 of the act, where any cash-credit recorded in the books of a person is unexplained, it has to be assessed in the hands of that person only i.e. the person in whose accounts it is found credited. The AO further noted that since the share application money has been credited by assessee in its books of account, the same was taxable in the hands of assessee and there is no option to offer such income in the hands of any other person i.e. M/s Jagannath. Ultimately, the AO made addition of Rs. 25,00,000/- u/s 68 in the hands of assessee. Aggrieved, the assessee went in first appeal where upon the CIT(A) confirmed action of AO. Accordingly, the assessee did
Anant Trexim Private Limited, Indore vs. DCIT,1(1), Indore. Assessment year 2014-15 not succeed in first appeal. Now, the assessee has come in next appeal before us.
Ld. AR for assessee carried us to the documents filed in Paper- Book at Page No. 10-12 in the shape of bank statements of various parties and demonstrated that the assessee received share application money of Rs. 25,00,000/- from M/s Momentum on 04.12.2013, transferred exact amount to M/s. Crazy Dealcom Private Limited on 05.12.2013. Thereafter, M/s. Crazy Dealcom Private Limited transferred same amount to M/s Jagannath on the very same day of 06.12.2023. Ultimately and finally, M/s. Jagannath utilized the sum of Rs. 25,00,000/- for making payment to its own creditor M/s. Haldia Petro Chemicals. Thus, Ld. AR explained the entire series of transactions whereby the sum of Rs. 25,00,000/- originated from M/s. Momentum but ultimately reached to the pocket of M/s. Jagannath via assessee. Having shown this series of transactions, Ld. AR re-iterated assessee’s submission before lower-authorities i.e. since the ultimate beneficiary of the sum of Rs. 25,00,000/- was M/s Jagannath and not assessee, the income of Rs. 25,00,000/- was rightly offered in the return of income of M/s. Jagannath. Ld. AR filed a copy of assessment-order of M/s. Jagannath passed by Dy. CIT, Circle 2(1), Indore dated 16.12.2016 u/s 143(3) for assessment year 2014-15 and attempted to demonstrate that the sum of Rs. 25,00,000/- had been assessed in the hands of M/s. Jagannath. Ld. AR pointed out one more fact that since the impugned sum of Rs. 25,00,000/- was already taxed by AO in assessment of this assessee/appellant before passing said assessment-order of M/s Jagannath, it was requested by M/s Jagnanath to their AO, as a matter of abundant caution and to avoid double taxation, to give credit of Rs. 25,00,000/- already taxed in the hands of this assessee. But, however, the AO denied to give such credit vide para no. 3.6 of assessment-order of M/s Jagannath. Ld AR further pointed out that since AO did not allow credit, M/s. Jagannath had to file an appeal before CIT(A) contesting for giving credit. The said
Anant Trexim Private Limited, Indore vs. DCIT,1(1), Indore. Assessment year 2014-15 appeal of M/s Jagannath is still pending before CIT(A). Ld. AR prayed that if the addition is deleted in the hands of present assessee, M/s. Jagannath would not enforce its claim of credit before CIT(A). With these submissions, Ld. AR prayed that the sum of Rs. 25,00,000/- had already been taxed in the hands of ultimate beneficiary M/s Jagannath and said taxation is very much correct; therefore taxing it in the hands of present assessee has resulted in double taxation. Hence, the addition made by AO in assessee’s hands must be deleted.
Replying to above, Ld. DR for Revenue supported the orders of lower-authorities and strongly contended that once the receipt of Rs. 25,00,000/- as share application money is credited in the books of assessee, the AO has rightly assessed it u/s 68 irrespective of whether the same was taxed in the hands of M/s. Jagannath or not. Ld. DR submitted that under the scheme of Income-tax Act, every person/assessee is a different person/assessee and one cannot claim any benefit because of taxation made or not made in other’s hands.
We have peacefully heard the ld. Representatives of both sides and perused the orders of lower authorities in the case of assessee as well as the assessment-order of M/s. Jagannath. It appears that during the survey conducted by department, a total sum of Rs. 2,20,00,000/- was surrendered and the same was offered in the returns of different entities of the group of which assessee is a part. From assessment-order of assessee, it appears that the assessee offered income of Rs. 1,40,00,000/- in return and the AO made further addition of Rs. 25,00,000/- while framing assessment. Then, from assessment-order of M/s Jagannath, it appears that M/s Jagannath offered income of Rs. 95,00,000/- and the AO made a further addition of Rs. 1,50,00,000/- on protective basis by relying upon M/s Jagannath’s reply dated 12.12.2016 admitting that they had received a total sum of Rs. 2,45,00,000/- [Para 3.4 and 4 of assessment-order of M/s Jagnnath]. Thus, despite our efforts during hearing, the dust is not very clear as to the Anant Trexim Private Limited, Indore vs. DCIT,1(1), Indore. Assessment year 2014-15 basis/rationale of additions including protective addition in the hands of M/s Jagannath. It is further noteworthy that the appeal of M/s Jagannath is still pending at the level of CIT(A). Therefore, in the situation, we think it most appropriate to remit this matter back to the file of CIT(A) without expressing any view on the merits of claim being made by assessee in appeal before us. The CIT(A), we expect, shall dispose of appeal of assessee and M/s Jangannath together after proper appreciation of facts and law. The assessee shall make a clear and adequate representation before CIT(A) and the parties shall bring this order to the notice of CIT(A) in both appeals i.e. appeal of assessee as well as appeal of M/s Jagannath.
In the result, the appeal is allowed for statistical purposes.
Order pronounced in the open court on 20.12.2023.