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Income Tax Appellate Tribunal, DELHI “B” BENCH: NEW DELHI
Before: SHRI SHAMIM YAHYA & SHRI KUL BHARAT
ORDER PER KUL BHARAT, JM : This appeal filed by the assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals), Muzzafarnagar, dated 28/03/2016 pertaining to the Assessment Year 2011-12. The assessee has raised the following grounds of Appeals.
Shring Construction Vs. DCIT “1. That assessment order passed u/s 143(3) by the Assessing officer is illegal, bad in law and without jurisdiction and the CIT(A) has also erred in upholding the same.
2. The addition/ disallowances made by the assessing officer are illegal, unjust, highly excessive and are not based on any material on record by the assessing officer. The total income of the assessee appellant has been wrongly and illegally computed by the assessing officer loss at Rs.(-)4,61,767.00 as against declared loss of Rs.6,48,13,222.00.
3. That, the Assessing Officer has erred in making the addition of Rs.1,01,74,000.00 to the Income of the assessee on account of Long Term Capital Gain on Sale of Land U/s 50C of the Income Tax Act, 1961, which is highly arb arbitrary, unjustified and against facts erred in upholding the same. of the case. The CIT (A) has
That, the CIT (A) and the assessing officer has failed assessee has disputed the Actual Sale consideration to appreciate, that, the is less than the Circle Rate value (as per 50C) before the assessing officer. The assessee has also requested to refer the matter to DVO U/s 50C (2) of the ACT to determine actual market value.
5. That, the CIT (A) and the assessing officer has erred in not referring the matter to DVO and made the addition on account of difference between the Actual Sale consideration and Circle Rate Value as per 50C of the ACT, which is unjust, unlawful and highly excessive and arbitrary.
6. The Assessing Officer has erred in making the addition/ disallowance of Rs.5,50,00,000.00 on account Share Capital U/s 68 of the Act, to the income of the assessee company without appreciating the fact that the assessee company has discharged its onus after establishing the Identity, Genuineness and Creditworthiness of the Share Applicants. The CIT (A) has erred in upholding the same.
7. The additions made and the observations made are unjust, unlawful and based on mere surmises and conjunctures. The additions made cannot be justified by any material on record.
8. That the explanation given evidence produced, material placed and available on record has not been properly considered and judicially interpreted and the same do not justify the additions/ allowances made.
Shring Construction Vs. DCIT 9. That the impugned Assessment Order passed by the Assessing Officer and order passed by CIT(A) are against the principles of natural justice and the same has been passed without affording reasonable and adequate opportunity of being heard.
10. That the interest U/s 234B & 234C has been wrongly and illegally charged as the appellant could not have foreseen the disallowances/additions made and could not have included the same in current income for payment of Advance tax. The interest charged under various sections is also wrongly worked out.
The appellant craves leave to add, amend, alter and or modify the grounds of appeal of the said appeal.
All of the above grounds of appeal are without prejudice and are mutually exclusive to each other.”
No one attended the proceedings at the time of hearing on behalf of the assessee, it is seen from the records that no one has been attending the proceedings on behalf of the assessee since 11th May, 2022, therefore, the appeal is taken up for hearing in the Shring Construction Vs. DCIT absence of the assessee and is being decided on the basis of material available on records.
The facts in brief are that, the assessee is a Company and derives its income from Hydro Power Projects consisting of Power House, Switch Yard, weirs, etc. The case was selected for scrutiny assessment, the Assessing Officer while framing the assessment noted that during the year under consideration, the assessee has disclosed long term capital gain and sale of loss at Rs. 77,57,789/- however, the Assessing Officer adopted the stamp valuation value of the sale consideration at Rs. 3,51,74,000/-and recomputed the capital gain at Rs. 1,01,74,000/-, further the assessee had claimed share application money of Rs. 8,48,87,995/- out of which the Assessing Officer found an amount of Rs. 5,50,00,000/- was not reflected by the share applicant in its account, therefore, he made addition of Rs. 5,55,00,000/- in this regard. Further, the Assessing Officer made addition out of personal expenses of Rs. 1,00,000/- and addition in respect of delay in deposit of Provident Fund Contribution amounting to Rs. 9,89/-.
Shring Construction Vs. DCIT 4. Aggrieved by this, the assessee preferred appeal before the Ld.CIT(A) who partly allowed the Appeal thereby he deleted the addition of Rs. 1,00,000/- made on ad-hoc basis and sustained the addition of Rs. 5,50,00,000/-.
Aggrieved against this, the assessee is in the present appeal before this Tribunal.
Ground No. 1, 7, 8, 9 & 11 is general in nature, hence needs no separate adjudication.
Apropos to the Grounds of Appeal No. 3, 4 & 5, the Ld. Departmental Representative supported the orders of the Lower Authorities regarding capital gain and have given a finding on fact that as per stamp valuation, the sale consideration as disclosed by the assessee was lower, the assessee has not placed any material suggesting that the value adopted by the Assessing Officer is incorrect.
We have heard the Ld. Departmental Representative and perused the material available on record. We find that the Assessing Officer recomputed the capital gain by adopting the Shring Construction Vs. DCIT stamp valuation value of the capital asset, the assessee has not brought any material suggesting that the value as adopted by the Assessing Officer in terms of Section 50C of the Act is incorrect, therefore, we do not find any infirmity into the order of the Ld. CIT(A), the same is hereby affirmed, the grounds raised by the assessee are dismissed.
Ground No. 6 is against sustaining the addition of Rs. 5,50,00,000/- on account of share capital u/s 68 of the Act. The Ld. Departmental Representative supported the orders of the Lower Authorities and submitted that the assessee failed to prove the grunginess of the transaction, therefore, the Lower Authorities were justified in making the addition.
We have heard the Ld. Departmental Representative and perused the material available on record. The Assessing Officer in Para 4 of the assessment order has given a finding on fact by observing as under:-
“During the year under consideration the assessee has shown share application money of Rs. 8,48,87,995/- as against Rs. 2,98,87,995/- during the previous year. Vide
Shring Construction Vs. DCIT this office notice dated 19.08.2013 the assessee was required to submit details of share application money accepted during the year under consideration. The assessee vide its reply dated 30.08.2013 submitted the details of share application money received, which was received from only one party i.e. Point Black Tracon Pvt. Ltd. at Rs. 5,50,00,000/-. Notice u/s 133(6) of the I.T. Act, 1961 was issued to Point Black Tracon Pvt. Ltd. on 03.02.2014 for compliance on 12.02.2014. No reply to the above notice was in this office. Again a sumnion was issued to M/s Point Black Tracon Pvt. Ltd. on 25.02.2014 to which also no reply has been received. Vide order sheet entry dated 19.03.2014 the assessee was required to prove the identity and capacity of depositors and genuineness of the transaction. In reply to the above the assessee vide reply dated 26.03.2014 submitted copy of ITR for A.Y 2011-12 to 2013-14, balance sheet and other documents. Since no compliance to the notices u/s 133(6) and summon u/s 131 of the I.T. Act, 1961 has been made hence the identity of the assessee cannot be established. Mere furnishing of ITR and balance sheet does not prove the identity of share applicant. Further, on perusal of the balance sheet of Point Black Tracon Pvt Ltd. it is observed that neither any investment in the name of Mis Shring Construction Company has been made nor any loans and advances have been shown in the name of assessee
Shring Construction Vs. DCIT company. This proves that the assessee has shown bogus share application money because if the assessee's version was correct then the amount of Rs 5,50,00,000/- should have been reflected in the balance sheet of M/s Point Black Tracon Pvt. Ltd., either in investment schedule or in loans and advances as share application money (for the year ending 31.03.2010 which was shown at Rs. 10,00,000/- under this head) which has not been done in the instant case. It proves that the share application money is bogus. Further, on perusal of the ITR it is observed that the share applicant belongs to New Delhi, while the return is filed with ITO, W-5(2), West Bengal and the bank account copy through which alleged payments are being made through RTGS belongs to ICICI Bank, Dehradun which raises the question on the genuineness of the transactions. In view of above the amount of Rs. 5,50,00,000/- is treated as unexplained cash credit u/s 68 of the I.T. Act, 1961 and is added to the income of the assessee Since the assessee has furnished inaccurate particulars of income and has concealed income hence penalty proceeding u/s 271(1)(c) are being initiated separately.
(Addition:- Rs. 5,50,00,000/-’
Shring Construction Vs. DCIT 11. The above finding on fact by the Assessing Officer is not controverted by the assessee by bringing any contrary material, we therefore, do not see any reason to disturb the finding of the authorities below, the same is hereby confirmed. The Grounds raised in this regard are dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open Court on 22nd November, 2023