Cit Vs. Electro Polychem Ltd.

Cit vs Electro Polychem Ltd.

Disposition Appeal dismissed Court Chennai Decided Jun 21, 2007

~3 min read

https://sooperkanoon.com/case/836835

CiteSignal

Citation: sooperkanoon.com/836835
Court: Chennai High Court
Judge: P.D. Dinakaran and ;P.P.S. Janarthana Raja, JJ.
Decided On: Jun 21, 2007
Subject: Direct Taxation
Disposition: Appeal dismissed

Parties & Advocates

Appellant / Petitioner

Cit

Respondent

Electro Polychem Ltd.

Legal References

Reported In: (2008)217CTR(Mad)371; [2007]294ITR661(Mad)

Bonus Feature

AI Brief & Ask

Your first-pass case note in minutes — an 18-section AI Brief on this judgment, plus case-scoped chat. Part of AI Studio with Verdict Lens, Devil's Bench, and DocMind.

Try free for 7 days

Credentials emailed — then log in for AI Brief on this judgment. Already have an account? · Learn more

Excerpt

- land acquisition act, 1894 [c.a. no. 1/1894]. sections 5a & 4; [p. sathasivam, m.e.n. patrudu & s. manikumar, jj] land acquisition (tamil nadu) rules, rule 4 time limit for filing objections held, time limit prescribed under section 5-a for filing objections cannot be further enlarged by form b notice issued under rule 4. authorities were directed to modify form b. sections 5a (2); [ hearing of objectors - held, it is mandatory and making a further enquiry by the collector is discretionary. if the objectors have not filed any objection with8in 30 days but come forward with oral objection, even then, the collector must hear. the hearing is mandatory.....24-3-2006, for the assessment years 1998-99 and 1999-2000 respectively, raising the following substantial questions of law. (a) whether, on the facts and circumstances of the case, the tribunal was right in holding that share application money in fictitious names cannot be treated as undisclosed income of the assessee ?(b) whether, on the facts and circumstances of the case, the tribunal was right in holding that the enquiries can be conducted in the hands of the shareholders only, when the entire addition is because the shareholders have been found to be non-existent/fictitious persons ?2. the brief facts that led to the filing of the above appeals are as under.3. the assessee filed its returns for the assessment years 1998-99 and 1999-2000. the assessing officer made additions in respect of the share application money under section 68 of the act, finding that the assessee had brought the undisclosed income by way of share applications in fictitious names and passed orders accordingly. hence, the assessee preferred appeals to the commissioner (appeals). the commissioner deleted the addition made by the assessing officer for the assessment year 1998-99 and upheld the.....

Full Judgment

P.D. Dinakaran, J.

1. The above tax case appeals are directed against the order of the Income Tax Appellate Tribunal in I. T. A. Nos. 1182 and 1714/Mds/2002 dated 24-3-2006, for the assessment years 1998-99 and 1999-2000 respectively, raising the following substantial questions of law.

(a) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that share application money in fictitious names cannot be treated as undisclosed income of the assessee ?

(b) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the enquiries can be conducted in the hands of the shareholders only, when the entire addition is because the shareholders have been found to be non-existent/fictitious persons ?

2. The brief facts that led to the filing of the above appeals are as under.

3. The assessee filed its returns for the assessment years 1998-99 and 1999-2000. The assessing officer made additions in respect of the share application money under Section 68 of the Act, finding that the assessee had brought the undisclosed income by way of share applications in fictitious names and passed orders accordingly. Hence, the assessee preferred appeals to the Commissioner (Appeals). The Commissioner deleted the addition made by the assessing officer for the assessment year 1998-99 and upheld the addition made for the assessment year 1999-2000. Against the said order, the revenue as well as the assessee preferred appeals before the Income Tax Appellate Tribunal. The Tribunal allowed the appeal preferred by the assessee and dismissed the appeal preferred by the revenue. Hence, the above appeals.

4. In CIT v. Stellar Investment Ltd. : [1991]192ITR287(Delhi) , where the increase in subscribed capital of the respondent-company, accepted by the Income Tax Officer and rejected by the Commissioner on the ground that a detailed investigation was required regarding the genuineness of subscribers to share capital, as there was a device of converting black money by issuing shares, with the help of formation of an investment, which was reversed by the Tribunal, the Delhi High Court held that even if it is to be assumed that the subscribers to the increased share capital were not genuine, under no circumstances the amount of share capital could be regarded as undisclosed income of the company.

5. The view taken by the Delhi High Court in CIT v. Stellar Investment Ltd. : [1991]192ITR287(Delhi) was confirmed by the apex court and the same was reported in CIT v. Steller Investment Ltd. : [2001]251ITR263(SC) .

6. Applying the ratio laid down in the decision cited supra, we do not find any substantial question of law arises for our consideration. Accordingly, these appeals are dismissed. Consequently, M. P. No. 1 of 2007 is also dismissed.