BEUTEX INDIA (P) LTD. Vs. CIT

JUDGEMENT

(1.) THE instant appeal is preferred by the appellant/assessee against the impugned order dt. 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 Rs. 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. The brief facts are that the assessee raised share application money of Rs. 27,40,600 from eight persons. Out of the above, during the year in question, only a sum of Rs. 22,50,000 was received towards share capital. The assessing officer (assessing officer) 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 Moolchand Nirmal and Shri Yogesh Saxena both appeared on dt. 5 -12 -2006 and 29 -1 -2007 respectively and their statements were recorded by the assessing officer. They denied investing any amount in the assessee company. However, in the meantime, the assessee vide his reply dt. 2 -2 -2007, requested the assessing officer to issue notice under section 131 of the Act to the shareholders to secure their attendance. Further, the assessing officer 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 assessing officer 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 assessing officer made an addition of Rs. 25,50,000 towards addition in share capital during the year and passed the assessment order on 30 -4 -2007.

(2.) BEING aggrieved by the orders passed by the assessing officer, the assessee preferred an appeal before the Commissioner (Appeals), wherein the Commissioner (Appeals) 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.

(3.) STILL dissatisfied, the appellant preferred the instant appeal under section 260A of the Act.