TMI Blog2009 (8) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... or initiating proceedings under Section 147 is on wrong premise as it is neither factually correct that M/s Rathi Ispat Ltd. was a loss making company and on the other hand it also stands established that the payment was received by M/s Rathi Ispat Ltd. for the services rendered by it to the assessee which had been shown as income in its return and duly taxed by the Income Tax Department. – Department appeal dismissed. - 566/2009 - - - Dated:- 20-8-2009 - A. K. SIKRI and VALMIKI J.MEHTA, JJ. Ms. P.L. Bansal , Mr. Paras Chaudhary and Ms. Anshul Sharma, Advocates, for the appellant. Mr. Rakesh Gupta and Ms. Aarti Saini, Advocates, for the respondent. JUDGMENT A.K. SIKRI, J(Oral) - CM No. 5809/2009 (Exemption)in I.T.A.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parent that Mrs. Rainee Singh has diverted her income amounting to Rs.6.30 crores by way of showing the bogus payment of Rs.6.30 crores to M/s Rathi Ispal Ltd which is a loss making company. Presumably, the sum of Rs.6.30 crores might have been taken back in cash from M/s Rathi Ispat Ltd. by Mrs. Rainee Singh, Proprietor M/s Rainee Creationg." 2. It is clear from the aforesaid order that the A.O. proceeded on the following two assumptions. (1) The assessee herein had diverted her income amounting to Rs.6.30 crores by way of showing the bogus payment of that amount to M/s Rathi Ispat Ltd. which was a loss making company. (2) The presumption was drawn that M/s Rathi Ispat Ltd would have returned back that amount to the assessee in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never a piece of land was registered with the effort of M/s Rathi Ispat Ltd in the name of appellant's nomine, a letter was written by M/s Rathi Ispat Ltd. to the appellant along with the relevant invoice for making balance payment to M/s Rathi Ispat Ltd. During the course of appellate proceedings copy of all such letters and respective invoices were furnished which prove beyond doubt that it was as a result of positive involvement of M/s Rathi Ispat Ltd that different pieces of land could be got registered in the name of appellant's nominee i.e M/s Sahara India Housing Ltd. All the payments were made by the appellant through account payee cheque and this is found properly recorded in the books of accounts of the appellant as well as in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant. This order also speaks that all these amounts had been credited in sales and service account maintained by the assessee i.e M/s Rathi Ispat Ltd. Thus all these overwhelming evidences prove beyond doubt that not only effective services were rendered by M/s Rathi Ispat Ltd. to the appellant, the payments made to them by the appellant were genuine and cannot be termed as bogus payment as held by the Assessing Officer." 4. The department filed appeal against this order before the I.T.A.T but unsuccessfully in as much as the said appeal has been dismissed by the Tribunal while its order dated 25.8.2008 inter alia recorded as under:- "6. We have carefully considered the rival submissions and perused the records. As could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , when we put specific query to learned counsel for the appellant as to whether the aforesaid facts particularly, the fact that M/s Rathi Ispat Ltd. was not a loss making undertaking and it had paid the taxes on the amount received from the assessee herein, it could not be disputed by the learned counsel. Thus, we find from this that the very basis for initiating proceedings under Section 147 is on wrong premise as it is neither factually correct that M/s Rathi Ispat Ltd. was a loss making company and on the other hand it also stands established that the payment was received by M/s Rathi Ispat Ltd. for the services rendered by it to the assessee which had been shown as income in its return and duly taxed by the Income Tax Department. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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