IN THE HIGH COURT OF DELHI AT NEW DELHI
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ITA 298/2012
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CIT ..... Appellant
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Through : Mr. Sanjeev Sabharwal, Advocate.
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versus
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DALMIA BROS PVT LTD ..... Respondent
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CORAM:
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HON'BLE MR. JUSTICE SANJIV KHANNA
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HON'BLE MR. JUSTICE R.V.EASWAR
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O R D E R
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16.05.2012
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1. Two issues are raised by the Revenue in this appeal in the case of
Dalmia Brothers Private Limited, which pertains to the assessment year
2006-07.
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2. The first issue, which pertains to the disallowance of salary
expenses, the findings recorded by the Commissioner of Income Tax
(Appeals) [CIT(A)] and Income Tax Appellate Tribunal [ITAT] are to the
effect that salaries were paid to different employees and full details,
i.e. their names, addresses, qualifications and nature of duties were
furnished. The salaries were reasonable and commensurate with the
qualifications and work done by each employee. They have referred to the
length of service. The findings recorded by the CIT(A) and
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ITA 298/2012 page 1 of 5
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ITAT are the findings of fact. It is noticed that in the previous years, similar adhoc lump sum disallowances were made by the Assessing Officer,
but were deleted in the appellate proceedings. One such order has been
upheld by the High Court in ITA No. 1340/2009. In the said appeal the
same question was raised but the appeal of the Revenue was dismissed vide
order dated 16.12.2011.
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3. The second issue raised by the Revenue relates to bogus share
application money from three companies, namely, M/s Carissa Investment
Private Limited of Rs.45,50,000/-, M/s Lovely Investment Private Limited
of Rs.20,00,000/- and M/s Altar Investment Private Limited of
Rs.4,75,000/-. The findings recorded by the Assessing Officer are
cryptic. He did not conduct any investigation and verification. The
entire discussion in the assessment order is confined to one small
paragraph which for the sake of convenience, is reproduced:-
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?The assessee during the course of assessment proceedings was asked to
furnish ledger account of these parties, duly confirmed and their Balance
Sheet as on 31/03/2006. However, neither of the details was furnished by
the assessee. The assessee only furnished the unsigned ledger account of
these companies of in-between period i.e. of a particular day/days. The
said accounts are running accounts and nowhere it is mentioned that any
share application money has been given by the said parties to the
assessee company. As the assessee has not able to prove the genuineness
of
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ITA 298/2012 page 2 of 5
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the transaction and creditworthiness of the parties. Accordingly, the
said cash credits in the books of the assessee is treated as unexplained
and is added to the income of the assessee as per the provision of
section 68 of the Income Tax Act. As the assessee has deliberately
furnished inaccurate particulars of its income on this issue, in order to
conceal his income and evade the tax, the penalty proceedings under
section 271 read with section 274 of the Income tax act is initiated
against the assessee on this issue.?
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4. The CIT(A) dealt with the said question in depth and has referred
to various documents and papers which were filed by the assessee.
Evidence/material relied upon has been reproduced in the form of a chart,
which is again for the sake of convenience is reproduced as under:-
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Sr. No.
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Name
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Address
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Amount
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Mode of Payment
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Evidences furnished by the appellant.
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1.
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M/s Carissa Investment Private Limited
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6/40, Chittranjan Park, New Delhi-110019
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4,45,000/- Cheque No. 538550 dated 16.04.2005 and Rs.25,50,000/- vide
cheque no. 504989, dated 26.05.2005 drawn on Centurion Bank, New Delhi
110060
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1. Copy of acknowledgment of the ITR filed PAN AAACC-3277A in Ward3(1),
New Delhi.
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2. Copy of confirmation letter.
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3. Copies of the bank statements of share subscribers for the relevant
period evidencing payment of share application money.
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4. Copies of appellant?s accounts in the ledger of share applications.
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5. Copy of share application form.
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2.
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M/s Lovely Investment Private Limited
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6/40, Chittranjan Park, New Delhi-110019
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20,00,000/-
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Rs.20,00,000/- vide Cheque No. 508996 dated 29.08.2005 drawn on Citibank,
New Delhi
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1. Copy of acknowledgment of the ITR filed PAN AAACL-1346F in Ward4(4),
New Delhi.
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2. Copy of confirmation letter.
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3. Copies of the bank statements of share subscribers for the relevant
period evidencing payment of share application money.
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4. Copies of appellant?s accounts in the ledger of share applications.
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5. Copy of share application form.
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3.
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M/s Altar Investment Private Limited
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6/40, Chittranjan Park, New Delhi-110019
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4,75,000/-
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Rs.4,75,000/- vide Cheque No. 175570 dated 29.09.2005 drawn on Citibank,
New Delhi.
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1. Copy of acknowledgment of the ITR filed PAN AAACA-6678S in Ward1(3),
New Delhi.
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2. Copy of confirmation letter.
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3. Copies of the bank statements of share subscribers for the relevant
period evidencing payment of share application money.
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4. Copies of appellant?s accounts in the ledger of share applications.
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5. Copy of share application form.
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5. The CIT(A) had also called for the remand report from the Assessing
Officer who did not conduct any further investigation/verification or
record statements. In the remand report, it was stated that the
assessment order was passed on the basis of the information received from
the investigation unit/wing. No further material or evidence to
controvert the assessee was placed on record. The assessee had filed an
affidavit of one Tarun Goel stating that the respondent/assessee had not
arranged for bogus/accommodation entries as stated by the Assessing
Officer.
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ITA 298/2012 page 4 of 5
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6. The ITAT in these circumstances has affirmed the order of the
CIT(A).
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7. Before us, neither the investigation report nor the statements or
documents have been filed by the Revenue.
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8. In this case Reveue cannot succeed as they have failed to conduct
necessary inquiries and investigations which were required and mandatory
when documents were placed on record by the assessee. On said issue, in
view of the findings of fact recorded above, no question of law arises.
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9. The appeal is dismissed.
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SANJIV KHANNA, J.
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R.V.EASWAR, J.
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MAY 16, 2012
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ITA 298/2012 page 5
of 5
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$ 31
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