N.R. Portfolio Pvt. Ltd., New Delhi vs Assessee

1 ITA Nos. 88,89/Del/2013 M/s. N.R. Portfolio Pvt. Ltd. vs. ITO

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'E' NEW DELHI

BEFORE SHRI S.V. MAHROTRA, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER

ITA Nos. 88,89/Del/2013 Assessment Years: 2002-03, 2003-04

M/s. N.R. Portfolio Pvt. Ltd. vs. ITO C/o Prakash K Prakash Ward-13 (1) B-1, Sagar Apartments New Delhi. 6, Tilak Marg, New Delhi. (PAN AAACN2431P) (Appellant) (Respondent)

Appellant by: Shri Saubhagya Agarwal, Advocate Respondent by: Shri J.P. Chandrakar, Sr. DR

ORDER

PER A.T. VARKEY, JUDICIAL MEMBER

This is an appeal preferred by the assessee against the order of CIT(A) XVI

New Delhi for the asst. year 2002-03.

ITA No. 88/Del/2013

2. The solitary issue involved in this appeal is in respect of levy of penalty of

Rs. 1,60,650/- u/s 271(1)(c) of the Income Tax Act 1961 (hereinafter the Act).

3. Brief facts of the case are that for the instant asstt. Year, the assessee

furnished a return on 29th October, 2002, which was accepted as such.

Subsequently action u/s 147 of the Act was initiated by an order dated 17th

December, 2007 u/s 147/144 of the Act, and thereafter addition was made of Rs. 2 ITA Nos. 88,89/Del/2013

M/s. N.R. Portfolio Pvt. Ltd. vs. ITO

1,20,34,100/- u/s 68 of the Act. On appeal, the CIT(A) granted relief except

sustaining an addition of Rs. 4,50,000/- being the share application money

received from 3 parties namely (a) Technochem associates Pvt. Ltd. (b) Yogesh

Gupta (c) Ganga Infin Pvt. Ltd. (Rs. 1,50,000/- each). On appeal to the Tribunal,

the said addition sustained has been confirmed in terms of order dated 29 th

October, 2010. Pursuant to the said order of the Tribunal, the AO levied penalty

of Rs. 1,60,650/- on the addition sustained by the Tribunal. The CIT(A) has also

confirmed the levy of penalty. The Ld. AR submitted that no penalty is leviable

on the facts as non-availability of PAN cannot be a ground to conclude that

assesssee has furnished inaccurate particulars of income. The Ld. DR relied on

the order of the CIT(A). He placed on record, the order of the Hon'ble High Court

confirming the addition deleted by the CIT(A) /ITAT. We have perused the

material on record carefully and considered the rival submissions made by both

the sides. The Hon'ble High Court in the case of the assessee, for the instant

asstt. Year by an order dated 22nd November, 2013 has sustained the addition of

Rs. 63,80,100/- deleted by the CIT(A)/ITAT. In arriving at the said conclusion,

the Hon'ble High Court has observed in para 30 & 31 as under :-

"Verification of PAN has been done during the present proceedings when it is found that in case of M/s. Technochem Associates Pvt. Ltd. and Mr. Yogesh Gupta from whom share application money of Rs. 1,50,000/- each (totaling Rs. 3,00,000/-) had been raised, no details regarding PAN has been furnished. Regarding M/s. Ganga Infin Pvt. Ltd. from whom the appellant has stated to have received Rs. 1,50,000/- as share application money, the appellant has furnished its PAN as AAACG4848B which is found to be invalid. The appellant's AR has been apprised of this fact consequent to which again same PAN is given for M/s. Ganga Infin Pvt.

3 ITA Nos. 88,89/Del/2013 M/s. N.R. Portfolio Pvt. Ltd. vs. ITO

Ltd. Accordingly, I hold that in above mentioned three cases, the identity of persons is not proved and hence there cannot be any applicability of the case law of Lovely Exports Pvt. Ltd. (supra) and addition to the extent of Rs. 4,50,000/- is confirmed. "

4. From the aforesaid, it is apparent that the Hon'ble High Court has held

that assessee has not placed on record any evidence other than share

application forms, so as to discharge the onus u/s 68 of the Act. It was

specifically observed by the Hon'ble High Court that mere production of

incorporation details /PAN Nos. may not be sufficient when surrounding and

attending facts predicate a cover up. Though the said observations had been

made in respect of additions of Rs. 63,80,100/- and not in respect of Rs.

4,50,000/- which sum had already been confirmed by the CIT(A) /ITAT on

account of non/erroneous PAN details. However, the said sum is also part of the

same transactions and therefore these observation equally applies to the sum of

Rs. 4,50,000/-. In such circumstances, the issue which arises for consideration is

whether assesee can be said to have concealed income in respect of which

inaccurate particulars have been furnished. To our mind, the answer has to be in

the affirmative. The assesee during the penalty proceedings has not placed on

record any material to support its assertion and rebut the observations of the

Hon'ble High Court. Also the explanation of the assesee has been found to be

false and it is not a case where a bonafide explanation in respect of which all

material facts had been furnished by the assessee before the authorities below.

5. The Delhi High Court in the case of CIT vs. Frostair (P) Ltd. (2012) 26

taxman. Com 11( Delhi) has upheld the addition made by the AO u/s. 68 and 4 ITA Nos. 88,89/Del/2013 M/s. N.R. Portfolio Pvt. Ltd. vs. ITO

also upheld the initiation of penalty proceeding u/s 271(1)(c) (head note of the

same ) is as under :-

" Whether assessee is under a burden to explain nature and source of share application money received in a given case and he has to establish shareholder's identity: genuineness of transaction: and creditworthiness of shareholders - Held, yes - On being informed that assessee had accepted share capital from some companies which were engaged in providing bogus entries in form of loan and share application money. Assessing Officer asked for details under section 142- Assessee submitted a list of 18 shareholders - Assessing Officer discerned that PAN/GIR No. of shareholders was not correct, they were not found at addresses given and they were not filing their ITRs with concerned officers - whether since Assessing Officer had examined all facts in exhaustive manner, addition under section 68 and, consequently initiation of penalty proceedings were justified - Held, yes."

6. In view of the aforesaid, the orders of the authorities below are confirmed

and levy of penalty is sustained. As a result the appeal of the asseseee is

dismissed.

In ITA No. 89/Del/2013, the challenge is to levy of penalty of Rs. 1,60,650/-

since the facts of the case is identical to the afore-stated case, therefore, the

impugned penalty is also confirmed.

In the result both the appeals are dismissed.

Order pronounced in the open court on 08th January, 2015.

-Sd/- -Sd/- (S.V. MEHROTRA) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated:08th January, 2015 'veena/ AKK Copy of order forwarded to: 1. Appellant 2. Respondent 5 ITA Nos. 88,89/Del/2013 M/s. N.R. Portfolio Pvt. Ltd. vs. ITO

3. CIT(A) 4. CIT 5. DR By Order Deputy Registrar, ITAT