PUNJAB-HARYANA HIGH
COURT
CIT VS M/S K. C. PIPES PVT.
LTD.
SR. NO. 205
ITA No.386 OF 2010
(O&M)
DATE OF DECISION:
02.08.2016
The Commissioner of Income-Tax, Patiala ....Appellant
versus
M/s K.C. Pipes Pvt. Ltd., Samana
(Pb.)
....Respondent
CORAM : HON'BLE MR. JUSTICE S. J. VAZIFDAR, ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE DEEPAK SIBAL
Present:- Mr. Z. S. Klar, Advocate for the appellant.
Mr. Pankaj Jain, Senior Advocate with Mr. Sachin Bhardwaj,
Advocate and Mr. Divya Suri, Advocate for the respondent.
S.J. VAZIFDAR, ACTING CHIEF JUSTICE (ORAL) This appeal is against
the order of the Tribunal pertaining to the Assessment Year 2006-07. The
Tribunal confirmed the order of the CIT (Appeals). The respondent-assessee
filed its return of income. During the course of assessment, the Assessing
Officer noticed that the paid up share capital of the assessee during the year
in question had increased by ` 80 lacs on account of 15 share holders having
subscribed to the shares. The Assessing Officer came to the conclusion that
these 15 applicants were farmers. It is contended before us that the farmers
are not aware of the functioning of the share market. It was contended that the
source of the money paid by the farmers is doubtful.
2. The share holders had appeared before the Assessing Officer.
The only grievance is that they had not appeared again. The matter pertains to
questions of fact and the Tribunal and the CIT (Appeals) have found that the
money, in fact, was received by the Company. In consideration thereof, shares
were issued and amount has been credited to the appropriate account. If the
share holders have acquired the money illegally, the respondent- assessee
cannot be held liable. There is nothing to show that the money belongs to the
Company/assessee itself. The revenue must then proceed against the share
holders.
3. The appeal is, therefore, dismissed as no substantial question
of law arises. We do not make any observation regarding the assessment
proceedings in respect of the 15 parties who had subscribed to the shares.
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