Principal Commissioner of Income-tax, Bathinda v. Amravati Infrastructures Developers Pvt. Ltd
[Citation -2020-LL-0211-24]

Citation 2020-LL-0211-24
Appellant Name Principal Commissioner of Income-tax, Bathinda
Respondent Name Amravati Infrastructures Developers Pvt. Ltd.
Court HIGH COURT OF PUNJAB & HARYANA
Relevant Act Income-tax
Date of Order 11/02/2020
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags genuineness of transaction • share application money • additional evidence • share capital money • work-in-progress • creditworthiness • source of source • accrued income • share premium
Bot Summary: As regards the creditworthiness of these companies, we find that these three companies had filed audited accounts and investment in the assessee company has been made duly reflected in their respective balance sheets. Similar is the position with other investing company, M/s S.K.M. Securities Ltd. The second investing company has net worth of Rs.1,01,05,370/- as on 31.3.2009, out of which Rs.65,00,000/- has been invested in the assessee company. Similarly the third company M/s Singhal Securities Ltd., as on 31.3.2009 had net worth of Rs.10,49,97,000/- out of which Rs.7,02,55,000/- has been invested in shares of various companies and which fact is verifiable from PB-22, where a copy of balance sheet as on 31.3.2009 is placed. As regards the genuineness of transactions, we find that the assessee company has received the share capital alongwith share premium amount through Banking channels and from the analysis of the Bank Accounts of the investing companies, we find that there were no cash deposits before investments in the assessee company except an amount of Rs.1,50,000/- and these companies had sufficient balance in their bank account to make investments in the VINAY MAHAJAN 2020.02.11 18:58 assessee company. In the case of M/s SKM Securities I attest to the accuracy and integrity of this document I.T.A. No.378 of 2016(OM) #4# Pvt. Limited, the company had balance of Rs.35,28,860/- in its bank account with Indusind Bank as on 27.6.2008 out of which Rs.15,00,000/- was invested in the assessee company on 28.6.2008 and further the investing company had balance of Rs.50,28,835/- as on 10th July, 2008 out of which Rs.50,00.000/- has been invested in the assessee-company on 12th July, 2008. From the analysis of this bank account, we find that the assessee company had invested Rs.40,00,000/- on 10.6.2008 through RTGS and further Rs.30,00,000/- was invested on 13.6.2008 through RTGS and investing company had sufficient balance in its bank account. CIT(A) at page 10 of his order states that period of 24 months shall be subject to force majeure conditions and in view of the facts, we hold that no compensation accrued to the assessee company as there was delay in handing over clear cut possession to the assessee company by PUDA, which delayed the completion of project.


I.T.A. No.378 of 2016(O&M) 1 IN HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH. INCOME TAX APPEAL No. 378 of 2016 (O&M) Date of Decision:- 11.02.2020 Principal Commissioner of Income Tax, Bathinda. Appellant. Versus M/s Amravati Infrastructures Developers Pvt. Ltd. Respondent. CORAM:- HON'BLE MR. JUSTICE JASWANT SINGH HON'BLE MR. JUSTICE SANT PARKASH Present:- Mr. Vivek Sethi, Advocate for Appellant. Ms. Radhika Suri, Senior Advocate assisted by Mr. Manpreet Singh Kanda, Advocate for respondent. JASWANT SINGH, J. 1. That Appellant-Principal Commissioner of Income Tax has filed instant appeal under Section 260A of Income Tax Act, 1961 (for short IT Act seeking quashing of order dated 03.02.2016 (Annexure A-3) passed by Ld. Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for short Tribunal) whereby appeal of present appellant had been dismissed. 2. That Respondent-Assessee is colonizer. Assessing Authority vide order dated 29.12.2011 framed assessment under Section 143(3) of IT Act for assessment year 2009-10 whereby income was assessed Rs.3,95,00,000/-. Assessing Authority made additions on three VINAY MAHAJAN 2020.02.11 18:58 counts namely: I attest to accuracy and integrity of this document I.T.A. No.378 of 2016(O&M) #2# i) Rs.1.65 Crores on account of failure of Assessee to prove identity and genuineness of persons having introduced share capital and share premium. ii) Rs.1.10 Crores on account of failure to account for accrued income @ Rs.10 Lakh per month from May 2008 to March 2009 from M/s Satya Developers Limited as per agreement. iii) Rs.1.20 Crore on account of failure to prove capacity of loan creditors as well as genuineness of transactions. 3. Respondent-Assessee assailing aforesaid additions filed appeal before Ld. CIT(A) who vide order dated 20.12.2012 allowed appeal of Respondent-Assessee and deleted all additions made by Assessing Authority. It is apt to notice here that Assessee furnished additional information/evidence before CIT (A) who supplied copy of said information to Assessing Authority while asking remand report. Assessing Authority in its remand report did not object to information filed by Assessee rather asked for same to be considered at time of disposal of appeal. 4. Feeling dissatisfied, Revenue filed appeal before Tribunal who vide order dated 03.02.2016 dismissed appeal of Revenue. Tribunal while dismissing appeal of Department returned findings as below: 12. ld. CIT(A) while giving relief to assessee on account of share application money has relied upon above judgments. He has not commented on merits of case. However, we have examined issue from angle of merits also. We find that three shareholders from whom share capital money along with share premium has been collected are all Private Limited Companies which have been incorporated under Companies Act and all these Companies are having PAN numbers and have filed their income tax VINAY MAHAJAN 2020.02.11 18:58 I attest to accuracy and integrity of this document returns. Therefore, there cannot be any doubt about identity of I.T.A. No.378 of 2016(O&M) #3# these Companies. 13. As regards creditworthiness of these companies, we find that these three companies had filed audited accounts and investment in assessee company has been made duly reflected in their respective balance sheets. We find that investments in assessee-company has been out of share capital and reserves of investing Companies. For example, net worth of M/s. Dhir Management Consultants (P) Ltd., (one of investing companies) as on 31.03.2009 as per balance sheet placed at paper book page 8 (in short PB-8) is Rs.99,34,843/- out of which it had made investments to tune of Rs.75,45,930/- in various companies as is apparent from Schedule-VI of balance sheet placed at PB-9. Schedule reflects name of assessee company where investment has been reflected to tune of Rs.70,00,000/-. 14. Similar is position with other investing company, M/s S.K.M. Securities (P) Ltd. second investing company has net worth of Rs.1,01,05,370/- as on 31.3.2009, out of which Rs.65,00,000/- has been invested in assessee company. This fact is verifiable from copy of balance sheet of investing company placed at PB-13. 15. Similarly third company M/s Singhal Securities (P) Ltd., as on 31.3.2009 had net worth of Rs.10,49,97,000/- out of which Rs.7,02,55,000/- has been invested in shares of various companies and which fact is verifiable from PB-22, where copy of balance sheet as on 31.3.2009 is placed. investment made in assessee company is included in this total investment. 16. From above facts and figures, creditworthiness of investing Companies is also proved. 17. As regards genuineness of transactions, we find that assessee company has received share capital alongwith share premium amount through Banking channels and from analysis of Bank Accounts of investing companies, we find that there were no cash deposits before investments in assessee company except amount of Rs.1,50,000/- and these companies had sufficient balance in their bank account to make investments in VINAY MAHAJAN 2020.02.11 18:58 assessee company. For example, in case of M/s SKM Securities I attest to accuracy and integrity of this document I.T.A. No.378 of 2016(O&M) #4# Pvt. Limited, company had balance of Rs.35,28,860/- in its bank account with Indusind Bank as on 27.6.2008 out of which Rs.15,00,000/- was invested in assessee company on 28.6.2008 and further investing company had balance of Rs.50,28,835/- as on 10th July, 2008 out of which Rs.50,00.000/- has been invested in assessee-company on 12th July, 2008. analysis of bank account statement reveals that deposit in bank account before investments in assessee company were all through Banking transactions. Therefore, genuineness of transaction cannot be doubted. 18. As regards investment made by M/s Dhir Management Consultants Pvt. Ltd., its bank statement is placed at PB-10. From analysis of this bank account, we find that assessee company had invested Rs.40,00,000/- on 10.6.2008 through RTGS and further Rs.30,00,000/- was invested on 13.6.2008 through RTGS and investing company had sufficient balance in its bank account. Similar is case with bank account of M/s Singhal Securities Pvt. Ltd placed at PB 27-28, where investing company had made investment of Rs.30,00,000/- out of available bank balance. investing company had received amount of Rs.30,00,500/- from one M/s. Tulika Securities on 5.6.2008 and out of this amount of Rs.30,00,000/- for investment was made in assessee company. 18.1. Therefore, above facts and figures not only source of investments but source of source has also been established. 19. In view of above facts and findings, we find that all three ingredients required for fulfillment of provisions of section 68 of Act are met and therefore, ld. CIT(A) has rightly deleted addition made by AO u/s 68 of Act. Accordingly, keeping in view peculiar facts and circumstances of case, Ground no. 1 (i) of appeal is dismissed. 20. As regards Ground no. 1(ii), ld. DR argued that per agreement with M/s Satya Developers Pvt. Limited, income had accrued to assessee @ Rs. 10 lacs per month for 11 months and invited our attention to agreement with M/s Satya Developers Pvt. Ltd. VINAY MAHAJAN 2020.02.11 18:58 I attest to accuracy and 21. ld. Counsel for assessee, on other hand, submitted integrity of this document I.T.A. No.378 of 2016(O&M) #5# that agreement with M/s Satya Developers Pvt. Ltd. was exhaustive agreement containing 33 clauses and one of conditions as per clause-14 says that if delay is because of force-majeure conditions, no compensation is payable. He submitted that PUDA had not given possession for development of property even till 11.9.2006 and therefore, delay in execution of project work was beyond control of developer. ld. Counsel for assessee further submitted that from balance sheet of developer obtained by AO by calling information u/s 131, it can be seen that developer had declared project, as work-in-progress and furthermore, he submitted that clause-14 of collaboration agreement provides that construction has to be completed within 24 months from date of sanction of plan or handing over possession, whichever is later. ld. Counsel submitted that handing over of possession itself was delayed, therefore, no compensation accrued to assessee. 22. We find that ld. CIT(A) has made finding of fact that as per clause-14, developer had to complete project within 24 months from date of sanction of plan or handing over possession, whichever is later excepting force majeure circumstances or any action of Statutory Authority or Court orders. clause-14 reproduced by ld. CIT(A) at page 10 of his order states that period of 24 months shall be subject to force majeure conditions and in view of facts, we hold that no compensation accrued to assessee company as there was delay in handing over clear cut possession to assessee company by PUDA, which delayed completion of project. Moreover, we find that assessee had filed additional evidence before ld. CIT(A) which was forwarded to AO and AO has not made any adverse comments on additional evidence. In view of above, we do not find any infirmity in order of ld. CIT(A). 23. In view of above discussion, Ground no. 1(ii) is also dismissed. 24. As regards Ground no. 1(iii), AO made addition u/s 68 of Act on account of loan from M/s Golden Laminates Ltd. ld. VINAY MAHAJAN 2020.02.11 18:58 DR heavily relied upon assessment order, whereas ld. I attest to accuracy and integrity of this document I.T.A. No.378 of 2016(O&M) #6# Counsel for assessee relied upon order of ld. CIT(A). 25. In this respect, we find that assessee had received total loan of Rs.255 lakhs from M/s Golden Laminates Ltd., and assessee had filed confirmation from M/s Golden Laminates Ltd., regarding advancing loan of Rs.255 lakhs by them and confirmation date, cheque no. and other relevant information alongwith company s PAN was also filed. AO had accepted loan of Rs.1.05 Crore as genuine and he has rejected loan of Rs.1.20 Crore on plea that same does not appear in bank statement of M/s Golden Laminates Ltd., whereas ld. CIT(A) has made finding of fact that source of this Rs.1.20 Crore was from HDFC Bank and ld. CIT(A) had also forwarded copy of Bank Account of HDFC to AO for his comments. AO in remand report has not objected to documents and has requested ld. CIT(A) to consider case while disposing of appeal. ld. CIT(A) has further made finding of fact that in statement of HDFC, all entries relating to advancing of loan of Rs.1.20 Crores to assessee do appear. Therefore, keeping in view facts and circumstances of case, we do not find any force in arguments of ld. DR. In view of above, ground no. 1(iii) is also dismissed. 26. In nutshell, appeal filed by Revenue is dismissed. 5. Ld. Counsel for Appellant-Revenue vehemently contended that Ld. CIT (A) without granting opportunity to Assessing Authority to comment upon additional evidence; considered additional evidence which was not supplied to Assessing Authority inspite of proper opportunities to Assessee while framing assessment, thus CIT (A) as well Tribunal has wrongly allowed appeal of Assessee. He further contended that there was no reason to consider additional evidence which could be considered only in case of circumstances mentioned in Rule 46A(1) of IT Rules, 1962. 6. Per contra counsel for Respondent-Assessee contended that VINAY MAHAJAN additional information was supplied to Assessing Authority by CIT (A) and 2020.02.11 18:58 I attest to accuracy and integrity of this document I.T.A. No.378 of 2016(O&M) #7# Assessing Authority in its remand report did not dispute additional information rather asked to consider at time of disposal of case, thus it is unfair on part of department to raise plea that Assessing Authority was not granted proper opportunity to comment upon additional information. 7. Having scrutinized record and heard arguments of both sides, we find that present appeal is bereft of merits and deserves to be dismissed. There are concurrent findings of First Appellate Authority as well as Tribunal. We are not oblivious of fact that Tribunal is final fact finding authority and scope of interference of this Court lies in narrow compass. core issue raised by Appellant is that Appellate Authority without recording reasons to entertain additional evidence and without granting proper opportunity to Assessing Authority while relying upon additional information allowed appeal of Assessee. Plea of Appellant is fallacious, in view of fact that no such plea was raised before Tribunal apart from fact that remand report was sought from Assessing Authority and who in its report did not object to additional information rather asked to consider at time of final disposal which vindicates stand of Respondent-Assessee. Revenue could be aggrieved had Appellate Authority not supplied additional evidence to Assessing Authority or some objection had been raised at that stage. Failing to object rather extending implied consent demolishes entire case of Revenue. There is nothing in order of Tribunal to show that Revenue raised objection of additional evidence before Tribunal. Thus, we do not find any merit in argument of Appellant. 8. Questions of i) genuineness of investors who introduced share VINAY MAHAJAN 2020.02.11 18:58 I attest to accuracy and integrity of this document I.T.A. No.378 of 2016(O&M) #8# capital and premium; ii) accrued income on account of delayed completion of project by M/s Satya Developers Limited; iii) capacity of persons from whom loan was borrowed and genuineness of transactions, have been considered at length by First Appellate Authority as well Tribunal. Both Authorities below have returned categorical findings on each issue and counsel for Revenue has failed to point out any infirmity in fact or law warranting interference of this Court. 9. In view of our findings, we do not find that any question of law much less substantial question of law arises for our consideration. Accordingly present appeal is dismissed. (JASWANT SINGH) JUDGE (SANT PARKASH) JUDGE February 11th, 2020 Vinay Whether speaking/reasoned Yes/No Whether Reportable Yes/No VINAY MAHAJAN 2020.02.11 18:58 I attest to accuracy and integrity of this document Principal Commissioner of Income-tax, Bathinda v. Amravati Infrastructures Developers Pvt. Ltd
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