Super Threading India (P) Ltd. Vs. Asstt. Cit - Court Judgment

Excerpt:
this appeal by the assessee is directed against the order dated 26-3-1999 passed by the learned cit (a) mainly confirming the addition of rs. 3,17,000 by invoking the provisions of section 68 on account of share application money of the depositors.at the outset of the appellate proceedings before us, learned authorised representative submitted that the issue is squarely covered in favourof the assessee and against the revenue by the decision in the case of cit v. steller investment ltd. (2001) in 251 itr 263 (sc), wherein the supreme court declined to call for a reference from the decision of the appellate tribunal that the increase in subscribed capital of the respondent-company could not be a device for converting black money into white with the help of formation of an investment company, on the ground that, even if it be assumed that the subscribers to the increased capital were not genuine, under no circumstances could the amount of share capital be regarded as undisclosed income, and the supreme court dismissed the appeal holding that the tribunal had come to a conclusion on facts and nointerference was called for. it was, therefore, vehemently argued by the learned authorised representative that the issue is covered by the aforesaid decision. on the other hand, learned departmental representative submitted that the case aforesaid case cited by the learned authorised representative was in respect of a limited company and not private limited company, as in this case the assessee is a private limited company and, therefore, the ratio of the said case is not directly applicable. however, apart from this, she was not able to controvert the finding of the learned authorised representative.we have heard the rival submissions, perused the orders of the tax authorities and gone through the material available on record as well as the case law cited by the assessee. we find that the issue involved is same and identical as decided by the supreme court in the case of steller investment ltd. (supra). we also do not find any forcem the plea advanced by the learned departmental representative that the ratio of the aforesaid decision is not applicable in the case of a private limited company, in the light of the decision in the case of cit v.down town hospital (p) ltd. (2004) 267 itr 439 (gau), wherein the issue was decided in favour of the private limited company, i.e., the assessee, following the decision in the case of steller investment ltd. (supra). we, therefore, following the aforesaid decisions of the supreme court and the gauhati high court decide the issue in favour of the assessee and against the revenue.

Judgment:
This appeal by the assessee is directed against the order dated 26-3-1999 passed by the learned CIT (A) mainly confirming the addition of Rs. 3,17,000 by invoking the provisions of section 68 on account of share application money of the depositors.

At the outset of the appellate proceedings before us, learned authorised representative submitted that the issue is squarely covered in favourof the assessee and against the revenue by the decision in the case of CIT v. Steller Investment Ltd. (2001) in 251 ITR 263 (SC), wherein the Supreme Court declined to call for a reference from the decision of the Appellate Tribunal that the increase in subscribed capital of the respondent-company could not be a device for converting black money into white with the help of formation of an investment company, on the ground that, even if it be assumed that the subscribers to the increased capital were not genuine, under no circumstances could the amount of share capital be regarded as undisclosed income, and the Supreme Court dismissed the appeal holding that the Tribunal had come to a conclusion on facts and nointerference was called for. It was, therefore, vehemently argued by the learned authorised representative that the issue is covered by the aforesaid decision. On the other hand, learned Departmental Representative submitted that the case aforesaid case cited by the learned authorised representative was in respect of a limited company and not private limited company, as in this case the assessee is a private limited company and, therefore, the ratio of the said case is not directly applicable. However, apart from this, she was not able to controvert the finding of the learned authorised representative.

We have heard the rival submissions, perused the orders of the tax authorities and gone through the material available on record as well as the case law cited by the assessee. We find that the issue involved is same and identical as decided by the Supreme Court in the case of Steller Investment Ltd. (supra). We also do not find any forcem the plea advanced by the learned Departmental Representative that the ratio of the aforesaid decision is not applicable in the case of a private limited company, in the light of the decision in the case of CIT v.Down Town Hospital (P) Ltd. (2004) 267 ITR 439 (Gau), wherein the issue was decided in favour of the private limited company, i.e., the assessee, following the decision in the case of Steller Investment Ltd. (supra). We, therefore, following the aforesaid decisions of the Supreme Court and the Gauhati High Court decide the issue in favour of the assessee and against the revenue.