I.T.O.,Ward-2(3), Kolkata V. Gorsia Marine Equipment Pvt. Ltd., Kolkata

ITA 1173/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6298 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-03-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 15-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHRUBAJYOTI RAY J
• Assessee Lawyers: SHR AKKAL DUDHWAWALA CAI
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH VIRTUAL COURT A KOLKATA BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.1173/KOL/2019 ASSESSMENT YEAR: 2013-14 INCOME TAX OFFICER WARD-2(3), AAYAKAR BHAWAN, 7 TH FLOOR, ROOM NO. 21, P-7,CHOWRINGHEE SQUARE, KOLKATA-700 069 / V/S . GORSIA MARINE EQUIPMENT PVT.LTD., FLAT NO.403, BLOCK-94, BUROSHIBTOLLA MAIN ROAD, KOLKATA-27 [ PAN NO.AAACG 9636 P ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI DHRUBAJYOTI RAY, JCIT-DR /BY RESPONDENT SHR AKKAL DUDHWAWALA, CAI /DATE OF HEARING 10-09-2020 /DATE OF PRONOUNCEMENT 23-09-2020 /O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-5, KOLKATAS O RDER DATED 15.01.2019 PASSED IN CASE NO.558/CIT(A)-5/WD.2(3)/2018-19/KOL. INVOLV ING PROCEEDINGS 144 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. WITH THE CONSENT OF BOTH THE LEARNED REPRESENTAT IVE(S) AND IN VIEW OF THE REVENUES AVERMENTS IN ITS CONDONATION PETITION / A FFIDAVIT DATED 20.02.2020, WE ITA NO.1173/KOL/2019 ASSESSMENT YEAR 2013-14 ITO WD-2(3), KOL. VS. GORSIA MARINE EQUIP MENT PVT. LTD. PAG E 2 CONDONE THE IMPUGNED DELAY OF ELEVEN DAYS IN FILIN G THE CASE. THE CASE IS NOW TAKEN UP FOR ADJUDICATION ON MERITS. 3. THE REVENUES FIRST AND FOREMOST SUBSTANTIVE GRI EVANCE PLEADS THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE SEC. 68 OF UNEXPLAINED CASH CREDITS ADDITION OF 2,50,000/- IN THE NATURE OF ASSESSEES SHARE APPLIC ATION MONEY ADDED IN THE COURSE OF ASSESSMENT FRAMED ON17.03.2016 DESPIT E THE FACT THAT THE SAME LACK OF GENUINENESS / CREDITWORTHINESS. IT TRANSPIRES AT TH E OUTSET QUA THE INSTANT ISSUE THAT THE CIT(A) HAS DELETED THE IMPUGNED ADDITION FOR THE PR ECISE REASON THAT THE AMOUNT IN QUESTION HAD NOT BEEN CREDITED IN THE ASSESSEES BO OKS IN THE RELEVANT PREVIOUS YEAR FROM 01.04.2012 TO 13.03.2013. LEARNED AUTHORIZED R EPRESENTATIVE HAS INVITED OUR ATTENTION TO ASSESSEES AUDITED FINANCIAL STATEMENT INCLUDING BALANCE-SHEET, PROFIT & LOSS ACCOUNT, NOTES TO ACCOUNT AS WELL AS BANK STAT EMENT IN PAGES 1 TO 11 TO THIS EFFECT IN THE PAPER BOOK. THE CIT(A)S DISCUSSION IN PAGE- 3 HAS ALSO TAKEN NOTE OF THE SAID MATERIAL ONLY AS UNDER:- THERE IS MERIT IN THE SUBMISSIONS MADE BY THE APPEL LANT. THE AO IN THE ASSESSMENT ORDER HAD DISALLOWED SHARE PREMIUM RECEIVED IN EARL IER YEARS AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT IN A.Y 2013-14/-. ON VERI FICATION FORM THE BALANCE SHEET OF THE APPELLANT FOR EARLIER YEARS, IT IS FOUND THAT S HARE PREMIUM OF RS.2,50,00,000/- HAS BEEN APPEARING IN THE BALANCE SHEET OF THE APPELLAN T FROM A.Y 2008-09. IT IS APPARENT THAT THE SHARE PREMIUM OF RS.2,50,00,000/- HAS BEEN ADDED BACK IN THE WRONG ASSESSMENT YEAR U/S. 68 OF THE ACT. THE ASSESSMENT ORDER WAS PASSED U/S 144 OF THE I T ACT, 1961 DUE TO NON-COOPERATION BY THE APPELLANT. HOWEVER, THE AO SHOULD HAVE EXAMINED THE BALANCE SHEET OF THE APPELLANT WHICH W AS AVAILABLE TO HIM, WHERE IT HAS BEEN CLEARLY SHOWN THE SHARE PREMIUM OF RS.2,50,00, 000/- WAS REFLECTED AS ON 31.032011 AND AS ON 31.03.2012. FROM THE ABOVE DETA ILS S IT IS CLEAR THAT THE NO SHARE PREMIUM WAS RAISED IN A.Y 2013-14. AS DISCUSSED ABO VE, THE SHARE PREMIUM WAS RAISED EARLIER YEARS. THEREFORE, THE ADDITION IS BA D IN LAW AND CANNOT BE SUSTAINED. THE ORDER PASSED U/S 144 OF THE INCOME-TAX ACT, 196 1 IS BEST JUDGMENT ASSESSMENT IN WHICH THE AO SHALL TAKE INTO ACCOUNT ALL RELEVANT MATERIAL WHICH HE HAS GATHERED AND AFTER GIVING THE APPELLANT SUFFICIENT OPPORTUNITY B EING HEARD, MAKE ASSESSMENT OF THE TOTAL INCOME OR LOSS TO BEST OF JUDGMENT AND DETERM INED THE SUM PAYABLE BY THE APPELLANT. THIS SECTION DOES NOT GIVE ARBITRARY POW ER TO THE AO TO MAKE THE ASSESSMENT ON HIS WHIMS AND FANCIES. THE ASSESSMENT ORDER SHOULD BE BASED ON MATERIAL AVAILABLE WITH THE AO AND SHALL BE REASONA BLE ESTIMATE. IT APPEARS THAT THE AO HAS NOT CONSIDERED THE AUDITED ACCOUNTS AVAILABL E WITH HIM WHILE MAKING THE ADDITION. THREE ARE PLETHORA OF CASE LAWS REFERRED TO BELOW WHICH HAVE HELD THAT THE ORDER U/S. 144 SHOULD BE DECIDED WITH WISDOM AND NO T BASED ON ARBITRARY CAPRICE OF THE AO BUT ON SETTLED AND INVARIABLE PRINCIPLES OF JUSTICE. ITA NO.1173/KOL/2019 ASSESSMENT YEAR 2013-14 ITO WD-2(3), KOL. VS. GORSIA MARINE EQUIP MENT PVT. LTD. PAG E 3 4. LEARNED DEPARTMENTAL REPRESENTATIVES ARGUMENT I N THIS FACTUAL BACKDROP IS THAT SUCH UNEXPLAINED CASH CREDITS CAN VERY WELL BE ADDE D EVEN IF THEY HAVE NOT CREDITED IN THE RELEVANT PREVIOUS YEAR IN ISSUE. WE FIND NO MER IT IN THE INSTANT ARGUMENT IN VIEW OF THE HON'BLE BOMBAY HIGH COURTS AT GOA VERY RECE NT DECISION IN TAX APPEAL NO. 29 OF 2013 IN THE CASE OF SHRI IVAN SINGH VS. ASSTT. COMMISSIONER OF INCOME-T AX CIRCLE- 1(1), PANAJI / THE COMMISSIONER OF INCOME-TAX, PAN AJI DATED 14.02.2020 MAKING IT CLEAR THAT THE CLINCHING STATUTORY EXPRESSION THAT PREVIOUS YEAR IN SEC. 68 OF THE ACT HAS TO BE INTERPRETED THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN ISSUE ONLY. WE THEREFORE SEE NO MERIT IN REVENUES INSTANT FIRS T SUBSTANTIVE GRIEVANCE. THE SAME STAND REJECTED THEREFORE. 5. NEXT COMES THE REVENUES SECOND SUBSTANTIVE GRIE VANCE CHALLENGING THE CIT(A)S ACTION PARTLY / RESTRICTING ASSESSEES EXP ENDITURE DISALLOWANCE OF 5,62,738/- TO 56,274/- I.E. @ 10% IN THE LOWER APPELLATE DISCUSSI ON. SUFFICE TO SAY, THERE IS NO REBUTTAL COMING FROM THE REVENUES SIDE THAT THE AS SESSEE HAD VERY WELL FILED ALL THE CORRESPONDING DETAILS AND EVIDENCE ON RECORDS AND T HE ASSESSING OFFICER HAD DISALLOWED THE ENTIRE CLAIM AMOUNT UNDER VARIOUS HE AD(S). WE THEREFORE SEE NO MERIT IN THE REVENUES SECOND SUBSTANTIVE GRIEVANCE AS WE LL. 6. NOW COMES TO REVENUES THIRD SUBSTANTIVE GRIEVAN CE SEEKING TO REVIVE UNEXPLAINED CASH CREDITS ADDITION OF 11,01,350/- MADE IN THE COURSE OF ASSESSMENT AND RESTRICTED TO 20,694/-. WE NOTICE WITH THE ABLE ASSISTANCE OF BOT H THE LEARNED REPRESENTATIVE(S)THAT THE ASSESSEES CASH-IN-HAND-C UM-BOOKS OF ACCOUNT AS ON 01.04.2012 WAS 3,98,519/- FOLLOWED BY SIMILAR WITHDRAWALS / DEPOSI T HIS CASH-IN- HAND ON 31.03.2013 WAS AT ,06,974/- ONLY REMAINING UNEXPLAINED FROM THE TAXPA YERS SIDE. THIS IS WHAT APPEARS TO HAVE BEEN PROMPTED TH E CIT(A) COULD ADD THE BALANCE FIGURE OF 2,06,974/- ONLY. ALL THESE FACTS AND FIGURES HAVE R EMAINED UNDISPUTED FROM THE REVENUES SIDE. WE THUS SEE NO REASONS TO REVIV E THE ENTIRE ADDITION FIGURE IN QUESTION. THIS THIRD AND LAST SUBSTANTIVE GROUND IS ALSO REJECTED THEREFORE. ITA NO.1173/KOL/2019 ASSESSMENT YEAR 2013-14 ITO WD-2(3), KOL. VS. GORSIA MARINE EQUIP MENT PVT. LTD. PAG E 4 7. WE LASTLY NOTICE THAT ALTHOUGH THE REVENUE HAS P LEADED ITS TECHNICAL GROUND THAT ALLEGING VIOLATION OF RULE 46A OF INCOME TAX R ULES, 1962 WHILST ADMITTING ADDITIONAL EVIDENCE IN LOWER APPELLATE PROCEEDINGS, WE HOWEVER SEE NO MATERIAL ON RECORD WHICH COULD INDICATE ANY SUCH ADMISSION OF A DDITIONAL EVIDENCE IN THE CIT(A)S DETAILED DISCUSSION. THIS FOURTH SUBSTANTI VE GRIEVANCE IS ALSO REJECTED THEREFORE. 8. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 23/09/2020 SD/- SD/- ( ') () ') (J.SUDHAKAR REDDY) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP-SR.PS * - 23/09/2020 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WD-2(3) AAYAKAR BHAWAN, 7 TH FLOOR, R.NO. 21, P-7,CHORWINGHE E SQUARE, KOLKATA-69 2. /RESPONDENT-GORSIA MARINE EQUIPMENT PVT. LTD., FLAT NO. 403, BLOCK-94 BUROSHIBTOLLA M AIN ROAD, KOLKATA-27 3. - . / CONCERNED CIT 4. . - / CIT (A) 5. / ))- , - /DR, ITAT, KOLKATA 6. 3 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ -,