Delhi High Court
Alfa Bhoj Limited vs Dy. Commissioner Of Income Tax ... on 16 January, 2019
$~28
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ INCOME TAX APPEAL 27/2019
Date of decision: 16th January, 2019
ALFA BHOJ LIMITED ..... Appellant
Through: Mr. K. R. Manjani, Advocate.
versus
DY. COMMISSIONER OF INCOME TAX CENTRAL CIRLE -13
..... Respondent
Through: Mr. Ashok K. Manchanda, SSC.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
SANJIV KHANNA, J. (ORAL):
We have heard counsel for the appellant-assessee in this appeal under
Section 260A of the Income Tax Act, 1961 ('Act' for short) which pertains
to the Assessment Year 2002-03 and arises from the order of the Income
Tax Appellate Tribunal (' Tribunal' for short) dated 31st August, 2018.
2. The appellant-assessee has challenged factual findings recorded by
the Tribunal in affirming addition of Rs.5.27 crores on account of bogus
share capital under Section 68 of the Income Tax Act, thereby affirming the
order passed by the Assessing Officer and reversing the findings recorded by
the Commissioner of Income Tax (Appeals).
3. The appellant-assessee was subjected to search and seizure operations
under Section 132 of the Act on 10th November, 2004 and thereafter notice
under Section 153A of the Act was issued. During the pendency of the said
proceedings, the appellant-assessee also approached the Settlement
Commission on disclosing the undisclosed income of Rs.17 lacs.
4. However, as the tax on the undisclosed income was not paid,
settlement application was dismissed as not maintainable vide order dated
17th September, 2007.
5. The appellant-assessee does not dispute the issue on bogus share
capital as per the details noticed by the assessing officer who held:-
"8. While scrutinizing the seized documents and register of
share applications, the Assessing Officer noticed that the
following persons applied for shares of the company on
different dates:
Name and No. of Total Date of Date of Date of
address of the shares amount application allotment payment
Applicants applied for paid
K.R. Fincap Pvt. 30,000 3,00,000 28.02.2002 28.02.2002 28.02.2002
Ltd. 63 Shankar
Market, New
Delhi
Bampal 70,000 7,00,000 28.02.2002 28.02.2002 28.02.2002
Securities Pvt.
Ltd. 100, Cycle
Market,
Jhandewalan
Exn. N. Delhi
Punjab state 2,50,000 25,00,000 28.02.2002 28.02.2002 28.02.2002
Industrial, Udyog
Bhawan,
Chandigarh
Royal Credit Pvt. 50,000 5,00,000 28.02.2002 28.02.2002 28.02.2002
Ltd. D-35A, First
Floor, Rajouri
Garden New
Delhi
Dinanath 50,000 5,00,000 28.02.2002 28.02.2002 28.02.2002
Luhaliwala
Spinning Milss,
A-261, Shastri
Nagar, Delhi-
110052
Shatarchi Finance 2,00,000 20,00,000 28.02.2002 28.02.2002 28.02.2002
& Leasing. 196/1,
Pck. D-12,
Sector-7, Rohini,
Delhi
Shatarchi Finance 50,000 5,00,000 30.03.2002 30.03.2002 30.03.2002
& Leasing 196/1,
2,00,000Pck. D-
12, Sectior-7,
Rohini, Delhi
Rabik Exports 1,00,000 10,00,000 28.02.2002 28.02.2002 28.02.2002
Ltd. RZ-41A,
Mohan Nagar,
Panka Road, New
Delhi
Changla Steels 2,00,000 20,00,000 28.02.2002 28.02.2002 28.02.2002
Pvt. Ltd. 10-
3596, Regarpur
Karol Bhag, New
Delhi
Bic Consultants 50,000 5,00,000 28.02.2002 28.02.2002 28.02.2002
Pvt. Ltd.
204,Delhi
Chamber, Delhi
Gate, New Delhi
Sehgal Fluid 1,00,000 10,00,000 30.03.2002 30.03.2002 30.03.2002
Equipment RZ-
41A, Mohan
Nagar Pankha
Road, New Delhi
FNS Consultancy 1,50,000 15,00,000 30.03.2002 30.03.2002 30.03.2002
Pvt. Ltd. A-66,
Tagore Garden,
New Delhi
Rajesh Kumar 30,000 3,00,000 30.03.2002 30.03.2002 30.03.2002
Gupta 127,
Mohalla
Kanjimal Dasna
Gate (Ghaziabad)
Maestro 1,50,000 15,00,000 30.03.2002 30.03.2002 30.03.2002
Marketing
Adversiting Pvt.
Ltd, A-4/181,
Sec-17, Rohini
Delhi-85
Harish Bhashin 1,50,000 15,00,000 10.12.2001 10.12.2001 10.12.2001
T-1, Rajori
Garden, New
Delhi
Harish Bhashin 1,00,000 10,00,00 22.03.2002 22.03.2002 22.03.2002
T-1, Rajori
Garden, New
Delhi
Jyoti Bhasin T-1, 1,00,000 10,00,00 10.12.2001 10.12.2001 10.12.2001
Rajori Garden,
New Delhi
Jyoti Bhasin T-1, 1,00,000 10,00,00 22.03.2002 22.03.2002 22.03.2002
Rajori Garden,
New Delhi
Jyoti Bhasin T-1, 20,000 2,00,000 30.03.2002 30.03.2002 30.03.2002
Rajori Garden,
New Delhi
Connoiseur 1,00,000 10,00,00 22.03.2002 22.03.2002 22.03.2002
Management
Services Pvt. Ltd.
34, Engineers
Enclave,
Pitampura, New
Delhi
Connoiseur 1,00,000 10,00,00 28.02.2002 28.02.2002 28.02.2002
Management
Services Pvt. Ltd.
34, Engineers
Enclave,
Pitampura, New
Delhi
Tanita Leasing 70,000 7,00,000 10.12.2001 10.12.2001 10.12.2001
Finance Ltd. A-
2/3, Lusa Tower
3rd floor, Azadpur
New Delhi
Tanita Leasing 1,30,000 13,00,000 28.02.2002 28.02.2002 28.02.2002
Finance Ltd. A-
2/3, Lusa Tower
3rd floor, Azadpur
New Delhi
Ethnic Creatio 1,00,000 10,00,000 10.12.2001 10.12.2001 10.12.2001
Pvt. Ltd. A-32,
Tagore Garden
Ex., New Delhi
Ethnic Creatio 50,000 5,00,000 28.02.2002 28.02.2002 28.02.2002
Pvt. Ltd. A-32,
Tagore Garden
Ex., New Delhi
SGC Publishing 1,50,000 15,00,00 10.12.2001 10.12.2001 10.12.2001
Pvt. Ltd. 50/15,
Ashok Nagar,
New Delhi-18
SGC Publishing 50,000 5,00,000 30.03.2002 30.03.2002 30.03.2002
Pvt. Ltd. 50/15,
Ashok Nagar,
New Delhi-18
Polo Leasing & 1.25.000 12,50,000 13.12.2001 13.12.2001 13.12.2001
Finance Ltd. A-
4/181, Rohini
Sector-17, New
Delhi
Polo Leasing & 1,00,000 10,00,000 28.02.2002 28.02.2002 28.02.2002
Finance Ltd. A-
4/181, Rohini
Sector-17, New
Delhi
M.v. Marketing 1,00,000 10,00,000 10.12.2001 10.12.2001 10.12.2001
Pvt. Ltd. A-32,
Tagore
Garden(Ext) New
Delhi
M.v. Marketing 20,000 2,00,000 28.02.2002 28.02.2002 28.02.2002
Pvt. Ltd. A-32,
Tagore
Garden(Ext) New
Delhi
Shree Niwas 60,000 6,00,000 10.12.2001 10.12.2001 10.12.2001
Leasing &
Finance Ltd. A-
10,204 Sai
Bhawan, Ranjeet
Nagar, New
Delhi
Shree Niwas 50,000 5,00,000 28.02.2002 28.02.2002 28.02.2002
Leasing &
Finance Ltd. A-
10,204 Sai
Bhawan, Ranjeet
Nagar, New
Delhi
Laxman Indus 30,000 3,00,000 10.12.2001 10.12.2001 10.12.2001
Resources Ltd.
101, 3rd Floor, A
Commercial
Chambers
Satwant Singh 30,000 3,00,000 10.12.2001 10.12.2001 10.12.2001
Sodhi & Sons
Pvt. Ltd. A-66
Tagore Garden
New Delhi
Satwant Singh 1,65,000 16,50,000 28.02.2002 28.02.2002 28.02.2002
Sodhi & Sons
Pvt. Ltd. A-66
Tagore Garden
New Delhi
Geeface Finance 1,00,000 10,00,000 10.12.2001 10.12.2001 10.12.2001
Ltd. 3rd Floor,
13/34, WEA
Karol Bagh, New
Delhi
Geeface Finance 1,30,000 13,00,000 28.02.2002 28.02.2002 28.02.2002
Ltd. 3rd Floor,
13/34, WEA
Karol BAgh,
New Delhi
Rahul Finlease 55,000 5,50,000 28.02.2002 28.02.2002 28.02.2002
Pvt. Ltd. A-2/23,
Shakti Nagar
Extn., New Delhi
Suma Finance & 20,000 2,00,000 28.02.2002 28.02.2002 28.02.2002
Investment
1366/21,Nalwala,
Karol Bagh, New
Delhi
Performance 1,65,000 16,50,000 28.02.2002 28.02.2002 28.02.2002
Trading and
Investment Pvt.
Ltd. A-261,
Sashhtri Nagar,
New Delhi
Technocom 1,65,000 16,50,000 28.02.2002 28.02.2002 28.02.2002
Associates Pvt.
Ltd. 205, Delhi
Chambers, Delhi
Gate New Delhi
Transpan 1,00,000 10,00,000 28.02.2002 28.02.2002 28.02.2002
Financial
Services Ltd. E-
36, Jawahar Park,
Laxmi Nagar,
Delhi-92
Jasdeep 1,50,000 15,00,000 28.02.2002 28.02.2002 28.02.2002
Financers Pvt.
Ltd. 203,
Mukund House
Commercial
Comples,
Azadpur, New
Delhi
S.N. Electrical 50,000 15,00,000 28.02.2002 28.02.2002 28.02.2002
Pvt. Ltd. S-172,
Co Cir. 29(4),
New Delhi
Titan Securities 2,00,000 20,00,000 28.02.2002 28.02.2002 28.02.2002
Ltd. A-2/3, Lusa
Tower, Azadpur,
New Delhi
Tanuja Industries 75,000 7,50,000 28.02.2002 28.02.2002 28.02.2002
Credit A-2/3,
Lusa Tower, 3rd
Floor, Azadpur,
Delhi
Arun Finvest Pvt. 2,00,000 20,00,000 28.02.2002 28.02.2002 28.02.2002
Ltd. CA/16-D,
Hari Nagar, New
Delhi
Fair N Saquare 2,00,000 20,00,000 28.02.2002 28.02.2002 28.02.2002
A-66, Tagore
Garden Ex, New
Delhi
Surya Udyog 2,00,000 20,00,000 28.02.2002 28.02.2002 28.02.2002
4832/24, Ansari
Road, Daryaganj,
New Delhi
Zed Leasing & 60,000 6,00,000 28.02.2002 28.02.2002 28.02.2002
Finance 4A, Pusa
Road, New Delhi
Zed Leasing & 30.03.2002 30.03.2002 30.03.2002
Finance 4A, Pusa
Road, New Delhi 1,00,000 10,00,000
9. The Managing Director/partners of all such
companies/firms were examined on oath and all of them
accepted that they were name lenders on commission basis.
The statements of all such directors/partners were
confronted to the assessee company. However, the
assessee company chose not to reply. Accordingly, share
application money to the tune of Rs. 1.55 cores was treated
as bogus. In respect of remaining share applicants, the
assessee could not furnish any detail within the parameters
of the provisions of section 68 of the Act.
10. The assessee, in one of its replies, explained that the
share application money was received by it in tranches,
which was rotated again and again and, therefore, only
peak of such credits should be added as undisclosed
income of the assessee. The assessee explained the modus
operandi by admitting that, to avail the loan from IDBI
Bank, it inflated cost of land/building. It also inflated cost
of plant and machinery. The explanation of the assessee
did not find favour with the Assessing Officers who was of
the firm belief that the entire share capital is bogus and
benefit of peak credit cannot be allowed on the peculiar
facts of the case. The Assessing Officer, accordingly,
made addition of Rs. 5.72 crores on account of bogus share
capital u/s 68 of the Act.
6. The contention of the appellant-assessee is that the amount received
was rotated. It was submitted that addition of bogus share capital should be
restricted to Rs.1.55 cores.
7. We do not find any reasons and ground to accept the said submission
as it is accepted that the bogus share capital received on different days
amounted to Rs. 5.72crores. The amount paid was not returned and
refunded. This being the position, we are not inclined to accept the
contention of the appellant-assessee that there was rotation of money and
only bogus share capital of Rs.1.55 crore should have been added as
undisclosed credit under Section 68 of the Act.
8. At this stage, learned counsel for the appellant-assessee states that
Rs.62 lacs was added as undisclosed cash credit for Assessment Years 1999-
2000 to 2002-03. It is stated that the appellant-assessee has filed an
application under Section 254(2) of the Act before the Tribunal on the said
aspect.
9. We would on the said aspect give liberty to the appellant-assessee to
file an appeal after disposal and decision of the application under Section
254(2) of the Act. This would not bar the appellant from filing an appeal
against the decision of the aforesaid miscellaneous applications.
10. Recording the aforesaid, we dismiss the present appeal on the first
aspect. On the second aspect, the issue is left open to be decided if required
and necessary. The appeal is dismissed without any order as to costs.
SANJIV KHANNA, J.
ANUP JAIRAM BHAMBHANI, J.
JANUARY 16, 2019
MR
