, , , IN INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH [ , . . , , , , BEFORE S/SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND A.K. GARODIA, ACCOUNTANT MEMBER) ITA No.2118/Ahd/2000 and ITA No.851/Ahd/2009 [Asstt.Year : 1997-1998] & ITA No.2101 and 2102/Ahd/2001 [Asstt.Year : 1995-1996 and 1996-1997] Rich Paints Ltd. /Vs. DCIT, Co. Cir.1(2) E-38, Sardar Estate Baroda. Ajwa Road, Baroda. ( / Appellant) ( / Respondent) [ / : Shri Tushar P. Hemani Assessee by / : Shri B.L. Yadav Revenue by / : 18th January, 2012 Date of Hearing / : 21.03.2012 Date of Pronouncement / O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER: All these appeals are filed by assessee against appellate orders of Commissioner of Income Tax (Appeals)-III, Baroda. ITA No.2118/Ahd/2000 is for A.Y.1997-98 against order of CIT(A) dated 4.8.2000; ITA No.2101/Ahd/2001 for A.Y.1995-96 is against order of CIT(A) dated 16.10.2001; ITA No.2102/Ahd/2001 for A.Y.1996-97 is against order of CIT(A) dated 16.10.2001 and ITA No.851/Ahd/2009 for A.Y.1997-98 is against order of CIT(A) dated 12.1.2009. For sake of convenience, we dispose of all these appeals by this combined order. ITA No.2118/Ahd/2000 and ITA No.851/Ahd/2009 & ITA No.2101 and 2102/Ahd/2001 ITA No.2118/Ahd/2000 and 851/Ahd/2009 (A.Y.1997-98) 2. brief facts as noted by AO at page no.2 of assessment order for A.Y.1997-98 that promoter s contribution was brought in, as shown in books of accounts of assessee to tune of Rs.205.06 lakhs including Rs.18.36 lakhs prior to A.Y.1995-96; Rs.50.50 lakhs in A.Y.1995-96, Rs.15.78 lakhs in A.Y.1996-97 while Rs.120.42 lakhs for A.Y.1997-98. It was further noted that enquiry in this regard was conducted by ADIT(Inv), Unit-IV, Baroda who also recorded statement of Shri Mahendra M. Shah, Chairman of assessee-company on 5-12-1997. He also noted that contentions raised in this statement have been reconfirmed by assessee during course of assessment proceedings. It is further noted that enquiry revealed that promoter s contribution has been brought in cash and deposited in Dena Bank, Ajwa Road Branch account of assessee. For present asstt.year 1997-98, Rs.74.29 lakhs was deposited on 3-4-1996 and Rs.48.05 lakhs was deposited on 4.4.1996. When AO asked for explanation, it was submitted by assessee that these are merely book entries to fulfill requirements of SEBI that minimum promoter s contribution should be 25% of total project and no real cash was brought in and no cash has gone out. It was also noted that these book entries was done with help of then Branch manager, Dena Bank, Ajwa Road, Vadodara.. It was also submitted before AO that against deposit of Rs.1,22,34,000/- there was withdrawal of Rs.1,20,42,125/- and in this manner, deposits and withdrawals resulted in net addition of Rs.1,91,875/- in bank account of assessee. Various submissions were made before AO, but AO has not satisfied and he made addition of cash deposits Rs.1,22,34,000/-. Apart from this, some other additions and disallowance were also made by AO. Being aggrieved, matter was carried before -2- ITA No.2118/Ahd/2000 and ITA No.851/Ahd/2009 & ITA No.2101 and 2102/Ahd/2001 CIT(A), but without success, and now assessee is in further appeal before us. 3. It was submitted by learned AR of assessee before learned CIT(A), as noted by him in his order in para 1.3, page no.8 of his order that it was arguments of assessee that even bank accounts are false as said amounts shown to have been deposited by cash, were never deposited. It was also submitted that bank accounts were manipulated in this regard with connivance of bank manager. It is also submitted that return of allotment of equity shares value of Rs.1,20,42,000/- allotted on 4-4-1996 is available at page no.60 to 65 of paper book(2) and as per same, these shares were allotted to different persons and hence to this extent, source of cash deposited in bank account stands explained, but same was not examined by authorities below and hence, matter should go back to file of AO for fresh decision in light of these documents. 4. learned counsel for assessee pressed only ground nos.1, 2 and 3 in A.Y.1997-98, Ground No.2, 3 and 4 in a.Y.1995-96 and Ground Nos.2, 3 and 4 in A.Y.1996-97 and remaining grounds were not pressed in these three years and hence, these grounds are dismissed as not pressed. 5. Regarding penalty appeal, it is submitted that there is no actual movement of funds and hence penalty is not justified. In reply, it was submitted by learned DR of Revenue that it is only story made out by assessee. It is not reliable and hence, order of authorities below should be upheld. 6. We have considered rival submissions and perused material on record and also gone through orders of authorities below. We find that as per bank statement of assessee with Dena Bank, Ajwa Road -3- ITA No.2118/Ahd/2000 and ITA No.851/Ahd/2009 & ITA No.2101 and 2102/Ahd/2001 Branch, Baroda, there is deposit of Rs.74.29 lakhs is on 3-4-1996 and another cash deposit of Rs.48.05 lakhs on 4.4.1996 and on both dates, there is withdrawal also by way of cheque issued to various parties. At page nos. 60 to 65 of paper book is return of allotment of 12,04,200 equity shares having face value of Rs.10/- each, which are said to be allotted on 4.4.1996 to various persons. In our considered opinion, these persons are required to be examined in order to find out as to whether three ingredients of cash credits i.e. identity, credit-worthiness and genuineness of transaction are being established by assessee with regard to cash credit to extent of Rs.1,20,42,000/- said to have been received from these persons in form of share application money. assessee should provide complete details and present address of these persons along with their confirmations and PAN and other evidences in support of this claim that amount received from these persons was available as cash on 3.4.1996 and 4.4.1996 and only this cash received from these persons was deposited in bank account. We, therefore, set aside order of ld. CIT(A) on this issue for A.Y.1996-97 and restore this matter back to file of AO for fresh decision. AO should pass speaking order as per law in light of above discussion after providing adequate opportunity of being heard to assessee. We want to make it clear that burden is on assessee to furnish necessary evidences to support its claim that cash deposited in bank on 3.4.1996 and 4.4.1996 was in fact received from these persons. In result, quantum appeal of assessee for A.Y.1997-98 is partly allowed for statistical purpose. 7. Now we take up penalty appeal for A.Y.1997-98. 8. We find that penalty was imposed by AO in respect of addition made by him of Rs.1,22,34,000/- under Section 68 of Act. Since -4- ITA No.2118/Ahd/2000 and ITA No.851/Ahd/2009 & ITA No.2101 and 2102/Ahd/2001 addition has been restored back to file of AO for fresh consideration, present penalty cannot survive, and if at all any addition is warranted in set aside proceedings, AO is at liberty to initiate penalty proceedings. But, present appeal does not survive and hence same is cancelled. 9. Now, we take up remaining two quantum appeals for A.Y.1995- 96 and 1996-97. In these two years also, only ground being pressed for our consideration is regarding addition made by AO under Section 68 of Rs.50.50 lakhs in A.Y.1995-96 and Rs.11.77 lakhs in A.Y.1996-97. Since similar addition in A.Y.1997-98 is restored back by us to file of AO for fresh decision, we feel that in these two years also this issue should go back to file of AO for fresh decision. Hence, we set aside order of learned CIT(A) in both these years also on this issue and restore this matter back to file of AO for fresh decision as per direction given by us for A.Y.1997-98 (supra). 10. Remaining grounds were not pressed by learned counsel of assessee in both years and hence same are dismissed as not pressed. 11. In result, both quantum appeals for A.Y.1995-96 and 1996- 97 are partly allowed for statistical purpose. 12. In combined result, quantum appeal for A.Y.1995-96, 1996- 97 and 1997-98 are partly allowed for statistical purpose and penalty appeal for A.Y.1997-98 is allowed. Order pronounced in Open Court on date mentioned hereinabove. Sd./- Sd./- ( /BHAVNESH SAINI) ( . . /A.K. GARODIA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER Order pronounced Sd./- (KB)JM Sd./-(AKG)AM -5- ITA No.2118/Ahd/2000 and ITA No.851/Ahd/2009 & ITA No.2101 and 2102/Ahd/2001 Copy of order forwarded to: 1) : Appellant 2) : Respondent 3) : CIT(A) 4) : CIT concerned 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD 1. Date of dictation : 06-03-2012 2. Date on which typed draft is placed before : 09/12-03-2012 Dictating Member. 3. Date on which approved draft comes to : Sr.P.S./P.S 4. Date on which fair order is placed before : 21/3/2012 Dictating Member for pronouncement. 5. Date on which fair order placed before Other : Member 6. Date on which fair order comes back to : Sr.P.S./P.S. 7. Date on which file goes to Bench Clerk. : 26/03/2012 8. Date on which file goes to Head Clerk. : 9. date on which file goes to Assistant : Registrar for signature on order. 10. Date of Despatch of Order : -6- M/S Rich Paints Ltd v. Dcit Co Cir-1(2)