The State Bank of Indore, v. The Add. CIT Cir. 5,

ITA 353/IND/2006 | misc
Pronouncement Date: 28-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 35322714 RSA 2006
Bench Indore
Appeal Number ITA 353/IND/2006
Duration Of Justice 3 year(s) 8 month(s) 12 day(s)
Appellant The State Bank of Indore,
Respondent The Add. CIT Cir. 5,
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 28-01-2010
Date Of Final Hearing 11-12-2009
Next Hearing Date 11-12-2009
Assessment Year misc
Appeal Filed On 16-05-2006
Judgment Text
1 IN THE INCOME TAX APPELATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH AND SHRI V.K. GUPTA AM ITA NO. 254/IND/08 A.Y. 2000-01 ASSTT. COMMISSIONER OF INCOMETAX CIRCLE 3(1) BHOPAL APPELLANT VS M/S BHASKAR FISCAL & INFRASTRUCTURE LTD. BHOPAL RESPONDENT PAN AABCB-4214H APPELLANT BY SMT. APARNA KARAN SR. DR RESPONDENT BY SHRI S.S. DESHPANDE CA O R D E R PER JOGINDER SINGH JM THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORDE R OF THE CIT(A) DATED 12.3.2008 ON THE GROUND THAT ON THE FA CTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.26 18 750/- MADE ON ACCOUNT OF UNEXP LAINED CASH 2 CREDIT U/S 68 OF THE ACT AS NO PROPER INVESTIGATION OF FACTS APPEARS TO HAVE BEEN MADE BY THE CIT(A) AS DIRECTED BY THE ITA T WHILE SETTING ASIDE THE ORDER AS HE FAILED TO EXAMINE THE ISSUE I N THE LIGHT OF SUCH DIRECTIONS. 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SMT. APARNA KARAN LEARNED SENIOR DR AND SHRI S.S. DESHPANDE L EARNED COUNSEL FOR THE ASSESSEE. THE CRUX OF THE ARGUMENTS ON BEH ALF OF THE REVENUE IS IN SUPPORT OF THE ASSESSMENT ORDER WHEREAS THE LEAR NED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. THE BRIEF FACTS ARE THA T THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF EXPORT OF PRE CIOUS STONES DECLARED NIL INCOME AFTER CLAIMING DEDUCTION U/S 80 HHC OF EXPORT BUSINESS INCOME OF RS. 81 20 852/-. WHILE FINALIZI NG THE ASSESSMENT THE LEARNED AO FOUND THAT THERE WAS INCREASE IN SHA RE CAPITAL BY RS.26 18 750/- AND AS PER THE ASSESSEE FOR SUCH INC REASE THE ACCOUNTS OF 5 PERSONS NAMELY SHRI GIRISH AGRAWAL (RS.6 18 7 50/-) JYOTI AGRAWAL (RS. 5 LACS) NAMITA AGRAWAL (RS. 5 LACS) SHARDA AGRAWAL (RS. 5 LACS) AND SUDHIR AGRAWAL (RS. 5 LACS) WAS D EBITED. THE 3 AO WAS OF THE VIEW THAT THE AFORESAID INCREASE IN S HARE CAPITAL BY BOOK ENTRY WAS NON-GENUINE AND INCORRECT FIGURES H AVE BEEN PROJECTED TO MEET OUT THE SHARE CAPITAL REQUIREMENT FOR RAISING LOAN FROM THE BANK. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THECHANDIGARH BENCH IN THE CASE OF JINDAL UDYOG V. ITO; 260 ITR 123 WHEREIN IT HAS BEEN INTERPRETED THAT THE USE OF THE WORD MAY IN SECTION 68 DOES NOT MEAN SHALL. IT IS SEEN THAT THE NATURE AND SOURCE OF INCOME IN THE CAPITAL HAS ALREADY BEEN EXPLAINED . THE ADVANCES SHOWN IN THE NAMES OF FAMILY MEMBERS WERE RECEIVED IN AUGUST 2001 AS ADJUSTMENT ENTRY BY CREDITING THE SHARE CAP ITAL ACCOUNT AND DEBITING ADVANCE ACCOUNT IN AN ENTRY IN WHICH NO CA SH TRANSACTION HAS TAKEN PLACE. IT CAN BE SAID THAT IT IS MERELY A BOO K ENTRY. THE CHANDIGARH BENCH IN THE AFORESAID ORDER DATED 28.2. 2002 WHILE COMING TO A PARTICULAR CONCLUSION ALSO PLACED RELIA NCE UPON THE DECISION OF THE HONBLE APEX COURT IN CIT V. SMT. P K NOORJAHAN (237 ITR 570) (SC). THERE IS A FUNDAMENTAL DIFFER ENCE BETWEEN THE PROVISIONS OF SECTION 68 AND 69 BECAUSE IN THE CASE OF SECTION 68 THERE SHOULD BE A CREDIT ENTRY IN THE BOOKS OF ACCOUNTS W HEREAS IN THE CASE OF SECTION 69 THERE MAY NOT BE ANY ENTRY IN SUCH BO OKS. IN VIEW OF 4 THESE FACTS WE HAVE NOT FOUND ANY INFIRMITY IN THE IMPUGNED ORDER CONSEQUENTLY THE STAND OF THE LEARNED CIT(A) IS UPH ELD AND WE ARE OF THE FIRM OPINION THAT THE PROVISIONS OF SECTION 68 ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT APPEAL. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES FROM BOTH THE SIDES ON 18 TH JANURY 2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED - 05 .02.2010 COPY TO APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE *DN/-