Beutex India Pvt. Ltd. vs Commissioner Of Income Tax
2011 Latest Caselaw 4390 Del

                                                                          #9
*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                           ITA No.465 of 2011

%                         Decision Delivered On: 8th September, 2011


      BEUTEX INDIA PVT. LTD.                            . . . APPELLANT

                               Through:   Mr. Deepak Agarwal with Mr.
                                          Rajesh Chauhan and Mr.
                                          Siddharth Mittal, Advocates
                                          for the appellant.

                                VERSUS

      COMMISSIONER OF INCOME TAX                       . . .RESPONDENT

                               Through:   Abhishek    Maratha,            Sr.
                                          Standing Counsel.

CORAM :-
    HON'BLE MR. JUSTICE A.K. SIKRI
    HON'BLE MR. JUSTICE M.L. MEHTA

      1.     Whether Reporters of Local newspapers may be allowed
             to see the Judgment?
      2.     To be referred to the Reporter or not?
      3.     Whether the Judgment should be reported in the Digest?

A.K. SIKRI, J. (ORAL)

1. The instant appeal is preferred by the appellant/assessee

against the impugned order dated 25.9.2009 passed by the

Income Tax Appellate Tribunal (hereinafter referred to as

'the Tribunal') thereby dismissing the appeal of the

appellant. Though there were three issues before the

Tribunal, the present appeal is confined only to one issue,

viz., addition of `22.50 lacs Section 68 of the Income Tax

Act (hereinafter referred to as 'the Act') on account of

purported share capital contributed by eight shareholders

holding that the assessee has not been able to substantiate

their capacity to give money or the genuineness of

transaction.

2. The brief facts are that the assessee raised share application

money of `27,40,600/- from eight persons. Out of the

above, during the year in question, only a sum of

`22,50,000/- was received towards share capital. The

Assessing Officer (AO) initiated enquiry proceedings in

respect of shareholders and sent summons to Shri Amit

Gupta, Shri Surender Kumar Srivastava, Shri Moolchand

Nirmal and Shri Yogesh Saxena. The summons issued to

Shri Amit Gupta and Shri Surender Kumar Srivastava were

returned back with the remark incomplete address and no

such person respectively. Further, in response to the

summons issued to Shri Moolhand Nirmal and Shri Yogesh

Saxena both appeared on dated 05.12.2006 and 29.1.2007

respectively and their statements were recorded by the AO.

They denied investing any amount in the assessee company.

However, in the meantime, the assessee vide his reply dated

02.2.2007, requested the AO to issue notice under Section

131 of the Act to the shareholders to secure their

attendance. Further, the AO made enquiries and come to

the conclusion that the share application money received

from an account maintained in the name of Mr. Agarwal with

ABN Amro Bank, Barakhamba Road, New Delhi. The AO on

28.2.2007 issued a show cause notice along with the

statements of Shri Moolchand Nirmal and Shri Yogesh

Saxena to the assessee, which was replied by the assessee

on 30.4.2007 where confirmations, receipt of filing income

tax returns, affidavits were filed. Not satisfied with the

aforesaid replies/documents, the AO made an addition of

`25,50,000/- towards addition in share capital during the

year and passed the assessment order on 30.4.2007.

3. Being aggrieved by the orders passed by the AO, the

assessee preferred an appeal before the CIT (A), wherein

the CIT (A) held that the addition be made on account of

introduction of share capital which was found credited during

the impugned year i.e. Assessment Year 2005-06 and the

share capital which was received in earlier years cannot be

added in the impugned year.

4. The assessee once again preferred appeal before the

Tribunal against the order of the CIT (A). The Tribunal vide

impugned order affirmed the order of the CIT (A) on this

issue. Thereafter, the appellant also filed Misc. Application

under Section 254 (2) of the Act, which was again dismissed

on 05.3.2010.

5. Still dissatisfied, the appellant preferred the instant appeal

under Section 260A of the Act.

6. After perusing the orders of the three authorities below, we

find that the findings of fact have been recorded by all the

Authorities holding that the transaction relating to share

application money was bogus and in fact, these persons had

never invested in the assessee's company. The assessee

had not been able to discharge the primary onus put on him

to prove the cash credit. The assessee had also not

produced its shareholders of the company for verification

and therefore, the identity of these shareholders was not

proved. Two persons, viz., Mr. Yogesh Saxena and Mr.

Moolchand Nirmal, who appeared before the AO had

specifically made statement denied that they had made any

investment with the share application money. Further

finding which is recorded by all the three Authorities that the

money had not come from their accounts. In fact, it was

found that the accounts from which those amounts were

received as share application money was belonging to one

Mr. Aggarwal. Mr. Yogesh Saxena even stated that his

signatures on confirmation as well as on affidavit were

forged. As per the bank reports, the share application

money were received from Mr. Aggarwal through his

proprietary concern and thus, transactions were not

genuine. These are all findings of fact accorded by all the

three Authorities below. Faced with these findings, the only

contention which could be raised by the learned counsel for

the appellant was that Shri Moolchand Nirmal and Mr.

Yogesh Saxena were not allowed to be cross-examined by

the appellant even when specific opportunities were sought

for. We may note that the Tribunal in the impugned

judgment had categorically observed that no such cross-

examination was sought for by the assessee and the learned

counsel for the assessee argued that this was factually

wrong observation, as vide communication dated 02.2.2007,

the assessee had made a specific request for summoning the

investors under Section 131 of the Act.

7. In view of the aforesaid submissions, we had called for the

original records vide our orders dated 03.8.2011. Those

records have been produced and we have gone through the

same. From the order-sheet recorded by the AO on various

dates, we find that the assessee was specifically told about

the statement of two persons, but he never asked for fresh

cross-examination. When we go through the communication

dated 02.2.2007 along with the order-sheet and read the

said communication in that perspective, we find that there

was no such specific request made by the appellant.

8. We, thus, do not find any infirmity in the impugned order.

No question of law arises for consideration. This appeal is

dismissed in limine.

(A.K. SIKRI) JUDGE

(M.L. MEHTA) JUDGE SEPTEMBER 08, 2011 pmc