Scorpio Biotechnology Pvt. Ltd., New ... vs Department Of Income Tax

Income Tax Officer, Vs. M/s Scorpio Biotechnology Pvt.Ltd., Ward- Ward-7(4), A-86, Pandav Nagar, Room No.305, C.R. Building, Building, Patparganj, New Delhi. Delhi - 110 092. PAN : AAJCS5596H. (Appellant) (Respondent)

Appellant by : Shri B.R.R. Kumar, Sr.DR. Respondent by : Shri Manoj Kumar, CA.

Date of hearing : 03.03.2015 Date of pronouncement : 04.03.2015

ORDER

PER GEORGE GEORGE K, JM :

This appeal at the instance of the Revenue is directed against the order of learned CIT(A)-X, New Delhi dated 25th February, 2013. The relevant assessment year is 2006-07.

2. The solitary issue that is raised is whether the CIT(A) is justified in deleting the addition of `1,33,50,000/- made by the Assessing Officer under Section 68 of the Income-tax Act, 1961, on account of unexplained share application money.

3. Briefly stated, the facts of the case are as follows. The Assessing Officer completed the assessment under Section 143(3) of the Act by order dated 22nd December, 2008. In the said assessment, addition was made under Section 68 of the Act amounting to `1,33,50,000/-.

2 ITA-2091/Del/2013

The Assessing Officer was of the view that assessee had failed to discharge its onus to prove the genuineness and creditworthiness of the following persons who had claimed to have made investment in share application money of the assessee company :-

(i) Manish Granite Ltd. `25,00,000/-

(ii) Manisha Impex Ltd. `25,00,000/-

(iii) Shri Krishna Trading Co. `25,50,000/-

(iv) M/s A.K. Enterprise `41,00,000/-

(v) Kumawat Trading Co. `17,00,000/-

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`1,33,50,000/-

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4. Aggrieved by the assessment, assessee preferred an appeal to the CIT(A). The CIT(A) admitted the additional evidence with reference to the investment in shares of the assessee company by the above mentioned five entities. The CIT(A) called for the remand report from the Assessing Officer and the rejoinder on the same. After examining the additional evidence, the remand report and the rejoinder, the CIT(A) deleted the addition made by the Assessing Officer under Section 68 of the Act.

5. The Revenue, being aggrieved, is in appeal before us.

6. Learned DR relied on the order of the Assessing Officer. On the other hand, learned AR reiterated the submissions made before the Income Tax Authorities and relied on the findings/conclusions of the CIT(A).

7. We have heard rival submissions and perused the material on record. The CIT(A), after examining the remand report of the 3 ITA-2091/Del/2013

Assessing Officer, had deleted the addition. The relevant finding of the CIT(A) reads as follows :-

"(c) On going through the facts of the case it is observed that in this case the assessing officer had already accepted the genuineness of the share application money in the case of 8 other parties and in the case of these 5 parties the additions have been made due to inadequate documents having been submitted. The A.R. strongly argued that these were transactions with all documents available and all the parties are willing to confirm the transaction. Since the assessing officer has satisfied himself after making enquiries, there was no case to argue that these amounts should be added u/s 68 of the I.T. Act.

(d) In the background of the remand report submitted by the assessing officer after issuing notices u/s 133(6) of the I.T. Act to all the 5 parties and the confirmations alongwith the details of bank accounts, PAN, details of share allotments etc., it appears that the assessing officer does not have any ground to now support this addition as none of the documents provided by the parties have been disputed.

(e) In this regard it is important to note that the A.O. has not made out any case or anywhere given a finding that these parties from whom the amounts had been taken were not genuine or that they were anywhere related to any group of entry operators. Moreover, it is important to note that the 5 parties had also mentioned in their letters before the assessing officer that they were ready to give personal deposition and confirm these transactions. However, the assessing officer has not found any reason to further investigate or doubt these documents filed by the A.R. of the appellant during the remand proceedings.

(f) Keeping in view the various judicial pronouncements of CIT v. Lovely Exports P.Ltd. [2008] 299 ITR 0268, CIT v. Shipra Retailers P.Ltd. (SC) dt. 21-

01-2008, CIT v. Divine Leasing Finance Ltd. [2008] 299 ITR 0268, CIT v. Dwarikadish Investment P.Ltd. (Del)(2008) 167 Taxman 321 and others, it is clear that in this case the assessing officer has not established 4 ITA-2091/Del/2013

any finding to show that this share application money was not genuine. During the remand proceedings, the assessing officer was provided the various supporting documents and the various parties have also confirmed the transaction, which has not been doubted by the assessing officer. Accordingly, the assessing officer has not made any case for upholding this addition."

8. The Assessing Officer in the remand report has not doubted the investment of share application money in assessee company by the above said five entities. The CIT(A), based on the remand report, has deleted the addition. Therefore, we see no reason to interfere with the order of learned CIT(A) and uphold the same as correct and in accordance with law. It is ordered accordingly.

9. In the result, the appeal filed by the Revenue is dismissed.

Decision pronounced in the open Court on 4th March, 2015.

Sd/- Sd/- (G.D. AGRAWAL) AGRAWAL) (GEORGE GEORGE K)K) VICE PRESIDENT JUDICIAL MEMBER

VK.

Copy forwarded to: -

1. Appellant : Income Tax Officer, Ward-

Ward-7(4), Room No.305, C.R. Building, Building, New Delhi.

2. Respondent : M/s Scorpio Biotechnology Pvt.Ltd., A-86, Pandav Nagar, Patparganj, Delhi - 110 092.

3. CIT

4. CIT(A)

5. DR, ITAT

Assistant Registrar