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TMI Blog2015 (2) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... inable and accordingly deleted. - Decided in favour of assessee. - I.T.A. No.3077/Mum/2010 - - - Dated:- 6-2-2015 - Shri Sanjay Arora And Shri Vijay Pal Rao JJ. For the Appellant : Shri N.R. Agrawal and Shri Paawan Ved-AR For the Respondent : Shri Jeetendra Kumar - DR ORDER Per Vijay Pal Rao, JM : This appeal by the assessee is directed against the order dated 25/3/2010 of CIT(A) for the assessment year 1993-94. The assessee has raised a solitary ground which reads as under :- The ld. CIT(A) erred in confirming the addition of ₹ 51,20,000/- on account of share application money as paid from unexplained sources of income u/s. 68C. 2. The assessee filed its return of income on 31/12/1993 declaring total loss of ₹ 27,456/-. The return was accepted u/s.143(1)(a) of the Act on 28/02/1994 without making any adjustment. During the course of assessment proceedings for the assessment year 1997-98 the AO noted that the share application money shown as receipt from three parties was outstanding as on 31/3/1997. The details of the amount of share application money are as under :- 1. M/s. Blue lagoon Investment Pvt. Ltd. ₹ 17,00,000/- 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and deleted the addition made by AO. The matter was carried to this Tribunal through the appeal filed by the revenue. The Tribunal noted the fact that Nath Group of companies have shown a larger amount paid to these three companies than the amount of ₹ 51,22,000/- due from the assessee and therefore, it was not clear whether those companies have received the share application money against these cheques or by different mode of payment. The Tribunal further noted that since no evidence was obtained by or produced before AO, therefore, this aspect required verification. Accordingly the Tribunal vide its order dated 27/2/2004 set aside the order of ld. CIT(A) and restored the matter to the file of AO for limited purpose of verifying the aforesaid aspect. In the set aside proceedings the AO issued summons to all three parties in order to verify the position as directed by the Tribunal. The summons could not be served upon two parties namely M/s. Mediterian Investment Pvt. Ltd. and M/s. True Bell Holding Impex Pvt. Ltd. However, the summons were served upon the 3rd party M/s. Blue Lagoon Investment Pvt. Ltd. 2.2 The representative of the said company appeared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as ledger account of the assessee in the books at M/s. Mediterian Investment Pvt. Ltd. was also produced. Similarly, the payment of ₹ 17.00 lacs to M/s. Blue Lagoon Investment Ltd. was confirmed by Nath Pulp Paper Ltd. and the assessee filed confirmation from Nath Pulp Paper regarding payment of ₹ 1.21 crores including payment of ₹ 17.00 lacs to M/s. Blue Lagoon Investment Ltd. The assessee produced ledger account of M/s. Blue Lagoon Investment Ltd. in the books of Nath Paper Pulp Ltd., bank statement of Nath Pulp Paper Ltd. of the Account in SBI, confirmation dated 18/2/2010 and 14/01/2010 and bank statement of M/s. Blue Lagoon with Bank of Baroda. As regards the payment of ₹ 17.00 lacs to True Bell Holding and Impex Pvt. Ltd. the ld. AR has submitted that the assessee submitted the confirmation from Nath Paper Pulp Ltd. regarding payment of ₹ 1.29 crores inclusive of ₹ 17.00 lacs to M/s. True Bell Holding Impex Pvt. Ltd. Further ledger copy of M/s. True Bell Holding Impex Pvt. Ltd. in the books of Nath Paper Pulp Ltd., bank statement of Nath Paper Pulp Ltd. in SBI and acknowledgement of filing of return were furnished befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as set aside by this Tribunal for further verification, the assessee failed to produce any material or evidence before the AO to show that the payment of ₹ 51,20,000/- was part of the larger payment made by Nath Group of companies to these three applicants. He further contended that the onus was on the assessee to establish that the payments were made by Nath Group of companies on behalf of the assessee, but the assessee failed to prove the same. He further contended that the assessee has not shown in its books of account any loan or liability in the name of Nath Industrial Chemical Ltd. and Nath Pulp Paper Ltd. on account of payment towards refund of application money on behalf of the assessee . Further, the CIT(A) specifically asked the assessee to produce the agreement for taking over the assessee company by Nath Group and undertaking the liability of payment to these three share applicant companies. The assessee has failed to show how the alleged payment by Nath Group is taken into account of the assessee company. Further, the assessee company showed outstanding of the said payment which goes to prove that the payment was made from unexplained sources. He has relied upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p of Companies had shown much larger amount to those companies than the due from the assessee and, therefore, it is not clear whether those companies had received back the share application money against these cheques or by different mode of payment. In our opinion, this aspect requires verification since no evidence was obtained by/or produced before the AO. Accordingly, we set aside the order of the ld. CIT(A) and restore the matter to the file of AO for limited purpose of verifying the aforesaid aspect. It is found that those companies had squared up the accounts of the assessee against the payments made by cheques by Nath Group of Companies, then the AO would not make any addition on this account. On the other hand, if it is found that those companies had squared up the assessee s account either on account of cash receipt or against some other payments, then we would pass appropriate order in this regard. 4.3 The Tribunal has also observed in the earlier round of litigation that there is no dispute that sum of ₹ 51.01 lacs were received by the assessee as share application money from the aforesaid three companies and the amounts were squared up by these three companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s proceeded to verify the fact as directed by the Tribunal only from the recipient three companies and has not taken any step to verify this fact from the Nath Group of Companies which have made this payment. Though the enquiry conducted by the AO could not reach a logical conclusion, however, the assessee produced all the relevant records as well as confirmation from all the relevant parties in respect of the repayment of the share application money to these three parties, the details of which is given by AO in para-3 of the assessment order passed pursuant to direction of the Tribunal are as under :- Sr.No Name of the company paying Name of the company receiving Amount Cheque No./Dt. Bank/Branch 1 Nath Industrial Chemical Ltd. Meditarian Inv. Pvt. Ltd. 17,00,000 20,000 2993/17.10.92 2994 -do- Bank of India, Backbay Reclamation Branch 2 Nath Papers and Pulp Ltd. Blue lagoon Inv. Ltd. 1,29,00,000 418085/2.7.92 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of payment it was claimed to have been made through two separate cheques of ₹ 17.00 lacs and ₹ 20,000/- respectively. Since both cheques were from one party and drawn on same bank therefore it is possible that instead of showing two entries the total amount of ₹ 17,20,000/- was shown under single entry. Similarly, in the case of M/s. Blue Lagoon Investment Pvt. Ltd. and M/s. True Bell Holding Impex Pvt. Ltd. the payment of ₹ 17.00 lacs each was confirmed by Nath Papers Pulp Ltd. through cheque payment of larger amount of ₹ 1.21 crores and ₹ 1.29 crores. The assessee has also produced the confirmation from Nath Paper Pulp Ltd. as well as the confirmation from M/s. Blue Lagoon Investment Pvt. Ltd., wherein it has been confirmed that the amount of ₹ 17.00 lacs was received as part of the larger amount of ₹ 1.21 crores. From the ledger Account of M/s. Blue Lagoon Investment Pvt. Ltd. in the books of Nath Pulp Paper Ltd. a separate entry of ₹ 17.00 lacs has been made in the name of the assessee. Therefore, it is clear that the payment of ₹ 1.21 crores to M/s. Blue Lagoon Investment Pvt. Ltd. includes payment of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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