ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(1),KOLKATA, KOLKATA V. RAGHUPATI CONSULTANTS PRIVATE LIMITED, KOLKATA

ITA 1295/KOL/2024

AI Insights

The case involves an appeal by the Assistant Commissioner of Income Tax, Central Circle 2(1), Kolkata against Raghupati Consultants Private Limited concerning the assessment year 2011-12. The appeal was directed against the order of the Commissioner of Income Tax (Appeals), Kolkata-26, which had deleted an addition of Rs. 1,10,00,000 made on account of bogus share capital under section 68 of the Income Tax Act, 1961. The Revenue contended that the CIT(A) erred in relying on the Supreme Court's decision in PCIT, Central 3 v. Abhisar Buildwell Pvt. Ltd., without appreciating the incriminating material available, including statements from Entry Operators. However, the appeal was dismissed due to the tax effect being below the threshold set by the CBDT circular, and the court did not address the substantive issues raised.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470919 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Other Referred Cases: PCIT, Central 3 v. Abhisar Buildwell Pvt. Ltd., Kishori Lal v Mt. Chaltibai AIR 1959 SC 504
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Bogus Share capital; Bogus
• Section: 143(3); 250; 153A; 68; 131; 268A; 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA SHRI SANJAY GARG, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No. 1295/Kol/2024 Assessment Year: 2011-12 Assistant Commissioner of Income Tax, Central Circle 2(1), Kolkata, Aayakar Bhawan Poorva, 3rd Floor, 110 Shantipalli, Kolkata – 700107 ...............…...…………….... Appellant vs. Raghupati Consultants Private Limited, 8th Floor, Room No. 05,23A, Netaji Subhash Road, Bag, Kolkata - 700001 [PAN: AACCR8354F] ...............…..….................... Respondent Appearances by: Assessee represented by : S.K. Tulsiyan, Advocate Lata Goyal, AR Department represented by : Praveen Kishore, CIT-DR Ankur Goyal, Sr. DR Date of concluding the hearing : 18.12.2024 Date of pronouncing the order : 23.12.2024 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. The Registry has pointed out a delay of 21 days in the filing of this appeal. The Revenue has filed a petition for condonation as under: “2. It is respectfully submitted that delay occasioned by the appellant in filing the appeal is for reasons beyond the control of the appellant as would appear from the following chronology of events tabulated as under: Date Reason for delay 18.03.2024 Appellate order received from CIT(A)-26, Kolkata in the office of PCIT (C), 1, Kolkata 2 ITA No. 1295/Kol/2024 Raghupati Consultants Pvt. Ltd. : AY: 2011-12 15.04.2024 ASR submitted to the office of JCIT, Range- 2(Central), Kolkata for onward transmission to the office of PCIT(C)-1, Kolkata 06.05.2024 ASR received in the office of PCIT(C)-1, Kolkata 17.05.2024 Last date for filing of appeal before Tribunal 07.06.2024 The Authorization dated 07.06.2024 of Pr. Commissioner of Income-Tax, Central-1, Kolkata was received in this office for filing further appeal certifying that the Appellate Order dated 18.03.2024 in appeal no. CIT(A)-Kolkata- 12/10694/2018-19 in the case of Raghupati Consultants Pvt. Ltd. PAN-AACCR8354F for the AY 2011-12 of Commissioner of Income Tax (Appeal)-26, Kolkata was received in his office on 18.03.2024. 07.06.2024 Accordingly, appeal on e-filing portal of ITAT is being filed. 3. It is further submitted that the delay of 20 (twenty) days in filing the instant Appeal has not been occasioned due to any wilful or deliberate act on the part of the appellant. 4. In view of above, it is respectfully prayed that the delay occasioned in preferring the appeal may kindly be condoned for the ends of justice. This application is made bonafide and in the interest of justice.” 1.1 Considering the reasons advanced in this application, the delay is hereby condoned and this appeal is admitted for adjudication. 2. This appeal filed by the Revenue is against the order of the Ld. Commissioner of Income Tax (Appeals), Kolkata-26 [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2011-12, dated 18.03.2024, which has been passed against the assessment order u/s 143(3) read with section 153A of the Act dated 31.12.2018. 3. The Revenue has raised the following grounds of appeal: “1 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the entire addition of Rs.1,10,00,000/- made on account of bogus share capital u/s 68 of the Income Tax Act, 1961, relying upon the decision of Hon'ble Supreme Court in PCIT, Central 3 v. Abhisar Buildwell Pvt. Ltd., by holding that additions are not linked to any incriminating material 3 ITA No. 1295/Kol/2024 Raghupati Consultants Pvt. Ltd. : AY: 2011-12 without appreciating the statement of Entry Operators taken on oath u/s 131 on the day of search & survey operations carried out on 24.08.2016 in \"Himadri Group of cases, wherein Entry Operators admitted that they had indulged in providing accommodation entry in the form of share capital/share premium to the beneficiaries being present assessee company of the group through their shell/paper companies. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in ignoring the statements relied upon by Assessing Officer in assessment order which has not been commented by the Ld. CIT(A) while holding that there is no incriminating material. 3. On the facts and in the circumstances of the case, the Ld CIT(A) erred in law by failing to appreciate that 'incriminating material is not defined under the Act but practically the incriminating material can be in any form such as evidence in the nature of a statement given on oath u/s 131 or 132(4) particularly on the day of search & survey itself bolstering the substantiation of allegations leading to initiation of search & survey operation in the \"Himadri Group\" to which the assessee company belonged to 4. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in not considering that the statements given on oath made u/s 131 of the Act clearly establish that the transaction/entries claimed or submitted by the assessee in documents/books of accounts/return of income, being only a device /make belief based on non-existent facts or suppressed/misrepresented facts fulfilling the ingredients of undisclosed income, would constitute an 'incriminating material sufficient for the purpose of making an assessment u/s 153A of the Act. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law by not considering the evidentiary value of an admission and the fact that an admission shifts the onus in terms of section 31 of the Evidence Act and the Hon'ble Supreme Court in Kishori Lal v Mt. Chaltibai AIR 1959 SC 504 held, the admissions shifted the onus on to the respondent on the principle that what a party himself admits to be true may reasonably be presumed to be so and until the presumption was rebutted, the fact admitted must be taken to be established...\". 6. That the revenue reserves its rights to substantiate, modify, delete supplement and/or alter the grounds at any time of the appeal proceedings.” 4. It is seen, at the outset, that the tax effect on the disputed additions before us is less than Rs. 60 lakhs as prescribed in the CBDT’s latest Circular No. 09/2024 dated 17.09.2024 for filing appeals by the Revenue before this Tribunal. 4.1. This circular prescribes that the revised monetary limits shall apply retrospectively to pending appeals as well. 4 ITA No. 1295/Kol/2024 Raghupati Consultants Pvt. Ltd. : AY: 2011-12 5. The ld. DR has also stated that tax effect involved in appeal is less than the prescribed limit, but was requested that this appeal may be disposed of on merits. 6. In view of above stated position, the appeal of the Revenue is dismissed u/s 268A of the Act because of tax effect lower than the prescribed limits as per CBDT Circular No. 09/2024 (supra). The Ld. DR’s contention cannot be accepted as the basis for filing the appeal itself has been found as being non-valid. 7. In case, at a later stage, it is found that these appeals are indeed covered under ‘exceptions’ then the department would be at liberty to move the ITAT with an MA for appropriate considerations. 8. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the court on 23.12.2024 Sd/- Sd/- (Sanjay Garg) (Sanjay Awasthi) Judicial Member Accountant Member Dated: 23.12.2024 AK, P.S. Copy of the order forwarded to: 1. Raghupati Consultants Pvt. Ltd., Kolkata 2. Assistant Commissioner of Income Tax, Central Circle 2(1), Kolkata 3. CIT(A)- 4. CIT- 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches "