ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 4(1), KOLKATA, KOLKATA V. LAKHOTIA TRANSPORT CO. PRIVATE LIMITED, KOLKATA

ITSSA 127/KOL/2024

AI Insights

The case involves an appeal by the revenue against the order of the Commissioner of Income Tax (Appeals)-27, Kolkata, concerning Lakhotia Transport Co. Pvt. Ltd. for the Assessment Year 2021-22. The revenue's appeal was delayed by 45 days, which was condoned with the consent of the assessee. The core issue was whether the tax effect on the disputed addition warranted an appeal, given it was below the threshold of Rs. 60 Lacs as per the latest CBDT Circular. The department argued that the case fell under an exemption clause, while the assessee contested this, emphasizing that it was not a shell company and referenced similar cases where the ITAT had ruled in their favor.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469713 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-12-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 01-10-2024
• Other Referred Cases: DCIT vs. Lakhotia Diagnostic Service Pvt. Ltd., DCIT vs. Lakhotia Motors Pvt. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Onus to prove; Tax effect
• Section: 250; 68

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “ए’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T(SS).A. No. 127/Kol/2024 Assessment Year: 2021-22 ACIT, Central Circle-4(1), Kolkata Vs. Lakhotia Transport Co. Pvt. Ltd. (PAN: AAACL 8147 J) Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 25.11.2024 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 05.12.2024 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Sunil Surana, FCA For the revenue / राजèव कȧ ओर से Shri Subhendu Datta, CIT DR ORDER / आदेश Per Pradip Kumar Choubey, JM: This is an appeal preferred by the revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-27, Kolkata (hereinafter referred to as the “Ld. CIT(A)”] dated 18.06.2024 for the AY 2021-22. 2. As it appears from the record that this appeal has been filed by the department after delay of 45 days. The ld. Counsel appeared on behalf of the department submitted that the delay has been occurred on account of huge work of the department and his 2 I.T.(SS)A. No.127/Kol/2024 Assessment Year: 2021-22 Lakhotia Transport Co. Pvt. Ltd. prayer is to be condoned the delay. The Ld. Counsel appeared on behalf of the assessee did not raise any objection rather he gave consent on the admission of the appeal after condoning the delay. Keeping in view, the consent of the assessee, the delay is hereby condoned. 3. It is seen at the outset that the tax effect on the disputed addition before us is less than Rs. 60 Lacs as prescribed in the CBDT latest Circular No. 09/2024 dated 17.09.2024. The ld. Counsel appeared on behalf of the department submits that his case comes under the exemption clause. Contrary to that, it has been argued by the ld. Counsel for the assessee that the assessee is not a shell company rather it is sister concern of the Lakhota Diagnostic Services pvt. Ltd. and the Ld. CIT(A) did not held that the assessee is a shell company. The Ld. Counsel cited two decisions of the ITAT which are as under: i) In the case of DCIT vs. Lakhotia Diagnostic Service Pvt. Ltd. in ITA NO. 1320/Kol/2024 for AY 2017-18 dated 11.11.2024 ii) In the case of DCIT vs. Lakhotia motors Pvt. Ltd. in IT(SS)A No. 93/Kol/2024 for AY 2021-22 dated 17.10.2024 4. We have gone through the order of Ld. CIT(A) passed u/s 250 of the Act and find that in nowhere it has been held by the Ld. CIT(A) that the assessee is a shell company rather in the operative portion of the Ld. CIT(A) order which has been held thus: “5.2.2. It is important to mention that the assessee had paid interest of Rs. 6,000/- to M/s Hallmark Commerce Pvt. Ltd. against a loan of Rs. 2,00,000/- received by it in the FY 2018- 19, which was added by the AO in the assessment order pertaining to AY 2019-20. It is to be noted that the aforesaid addition was deleted vide appellate order dated 04.06.2024. Further, the assessee had paid interest of Rs. 2,10,000/- to M/s MCR Finvest Pvt. Ltd. against loans received by it since the FY 2014-15. However, these loans were never ever disputed by the department. Again the assessee had paid interest of Rs. 3,60,000/- to M/s Mihika Industries Ltd. against a loan of Rs. 25,00,000/- received by it in the FY 2018-19. It is to be noted that the aforesaid addition was deleted vide appellate order dated 04.06.2024. Further, the assessee had paid interest of Rs. 3,00,000/- to M/s Tribute Trading and Finance Ltd. against loans received by it since the FY 2014-15. However, these loans were never ever disputed by the department. Hence, the assessee had discharged its onus to prove the three primary limbs of the deeming provisions u/s 68 and 39C of the Act in an effective manner by providing necessary 3 I.T.(SS)A. No.127/Kol/2024 Assessment Year: 2021-22 Lakhotia Transport Co. Pvt. Ltd. details and documents in respect of the aforesaid loan creditors. Hence, the addition made by the AO against the corresponding aforesaid interest payments of Rs. 8,76,000/-.” Keeping in view, the facts of the case as well as the order passed by the Ld. CIT(A), we are not in agreement with the contention of the ld. Counsel of the department that the assessee is a shell company. Accordingly, the present appeal do not come within the ambit of exempt clause. Hence, the appeal of the revenue is dismissed u/s 268 A of the Act because of tax effect lower than the prescribed limit as per CBDT Circular (supra). In the result, the appeal of the revenue is dismissed. Order is pronounced in the open court on 5th December, 2024 Sd/- Sd/- (Rajesh Kumar/राजेश क ुमार) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 5th December, 2024 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- ACIT, Central Circle-4(1), Kolkata 2. Respondent – Lakhotia Transport Co. Pvt. Ltd., Ground Floor, 26, Tara Chand Dutta Street, West Bengal-700073. 3. Ld. CIT(A)-27, Kolkata 4. Ld. Pr. CIT- Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "