M/s R. Piyarelall Import & Export, Kolkata V. CIT, KOLKATA-1, Kolkata

ITA 1176/KOL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1900 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 26-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MD USMAN
• Assessee Lawyers: ASHISH RUSTAGI
• Keywords: Scheme of amalgamation
• Section: 142(1); 263

Judgement Text

1 ITA NO.1176/KOL/2014 R. PIYARELALL IMPORT & EXPORT LTD., AYS- 2009-10 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VA RKEY, JM] I.T.A. NO. 1176/KOL/2014 ASSESSMENT YEAR: 2009-10 R. PIYARELALL IMPORT & EXPORT LTD. (PAN: AABCR2695G) VS. COMMISSIONER OF INCOME-TAX, KOLKATA- 1, KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 09.11.2017 DATE OF PRONOUNCEMENT 05.01.2017 FOR THE APPELLANT SHRI ASHISH RUSTAGI, FCA FOR THE RESPONDENT MD. USMAN, CIT, DR ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT-1, KOLKATA DATED 31.03.2014 FOR AY 2009-10 PASSED U/S. 263 OF THE IN COME-TAX ACT, 1961 (HEREINAFTER THE ACT). 2. THE ASSESSEE HAS CHALLENGED THE EXERCISE OF REV ISIONAL JURISDICTION U/S. 263 OF THE ACT BY THE LD. CIT-1, KOLKATA. ACCORDING TO THE ASSESS EE, THE AO IN THE ORIGINAL ASSESSMENT HAS MADE ENQUIRES AND LD CIT OUGHT NOT TO HAVE INTERFER ED IN THE ASSESSMENT ORDER ON THE PLEA OF AO NOT CONDUCTING ENQUIRES ON CERTAIN TRANSACTIONS. ACCORDING TO THE ASSESSEE, THE AO APPRECIATED THE FACT THAT A COMPANY CALLED M/S. R. PIYARELALL FOODS PVT. LTD. (IN SHORT RPFPL) WAS AMALGAMATED WITH THE ASSESSEE COMPANY, PURSUANT TO THE SCHEME OF AMALGAMATION APPROVED BY THE SHAREHOLDERS AND SANCT IONED BY THE HONBLE HIGH COURT AT CALCUTTA VIDE ORDER DATED 21.05.2007 WHICH STOOD TR ANSFERRED AND VESTED IN THE ASSESSEE COMPANY AS A GOING CONCERN W.E.F. 01.04.2008. ACCOR DINGLY, THE MERGED COMPANY (RPFPL) STOOD MERGED WITH THE ASSESSEE COMPANY, CONSEQUENTL Y, ALL EXPENSES AND INCOME, ASSETS AND LIABILITIES GOT TRANSFERRED TO THE ASSESSEE COMPANY ITEM WISE. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THE FACT OF AMALGAMATION WAS CLEA RLY STATED IN THE NOTES ON ACCOUNT NO. 11 2 ITA NO.1176/KOL/2014 R. PIYARELALL IMPORT & EXPORT LTD., AYS- 2009-10 OF THE AUDITED ACCOUNTS OF THE ASSESSEE COMPANY. A CCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THE CIT BEFORE INVOKING HIS REVISIONAL JU RISDICTION SHOW CAUSED TO THE ASSESSEE COMPANY ABOUT THE DETAILS OF 19 ITEM WISE FACTS, WH ICH INCLUDED POINTS IN PARTICULAR RELATING TO PAYMENTS MADE BY ASSESSEE TO M/S. RPFPL ON WHICH TDS WAS NOT DEDUCTED BY THE ASSESSEE. THE FOLLOWING ISSUES RELATED TO THE APPL ICABILITY OF TDS ON PAYMENT WERE SHOW CAUSED BY LD. CIT WHICH ARE GIVEN BELOW: A) IN RESPECT OF LOADING AND UNLOADING CHARGES OF R S.94.90 LACS; B) LORRY FREIGHT CHARGES OF RS.15.38 LACS; C) RAILWAY FREIGHT CHARGES OF RS.3.78 CR.; D) LEGAL CONSULTANCY CHARGE OF RS.14,24,748/-; E) BROKERGE EXPENSES OF RS.1.35 CR; F) GODOWN RENT OF RS.2.459 CR. 3. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR AT TENTION TO PARA 2 OF THE ORIGINAL ASSESSMENT ORDER, WHEREIN THE AO HAS RECORDED THAT NOTICES U/S. 142(1) WERE ISSUED ON 22.07.2011 AND 05.09.2011 ALONG WITH ELABORATE QUES TIONNAIRE. THEREAFTER, THE AO RECORDED IN HIS ORDER THAT FURTHER CLARIFICATIONS WERE ALSO CALLED FOR DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE VARIOUS ORDER SHEET NOTING. THERE AFTER, HE DREW OUR ATTENTION TO PARA 3 OF THE AOS ORDER WHEREIN THE AO HAS MENTIONED THE FOL LOWING: IN RESPONSE TO THE ABOVEMENTIONED NOTICES SHRI SWA PAN KR. SAHA, FCA AND A/R APPEARED FROM TIME TO TIME AND EXPLAINED THE RETURN. HE FIL ED VARIOUS DETAILS, ACCOUNTS AND EVIDENCES TO EXPLAIN THE RETURN. THEREFORE, ACCORDING TO THE LD. COUNSEL FOR THE ASS ESSEE, THE AO HAS MADE PROPER ENQUIRIES AFTER TAKING NOTE OF THE AMALGAMATION AND THEREFORE , THE AO CANNOT BE FAULTED FOR NON- ENQUIRY INTO THE SPECIFIC QUERIES RAISED BY THE LD. CIT. THEREFORE, HE PRAYED THAT THE ORDER PASSED BY THE LD. CIT U/S. 263 OF THE ACT IS BAD IN LAW AND SHOULD BE QUASHED. ON THE OTHER HAND, THE LD. DR HEAVILY RELIED ON THE ORDER OF LD. CIT AND URGED BEFORE THE BENCH TO CONFIRM THE SAME. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THOUGH GENERALLY THE AO HAS MADE CERTAIN GENERAL OBSERVATIONS AS STATED ABOVE ABOUT ENQUIRIES CONDUCTED DURING ASSESSMENT PROCEEDINGS, HOWEVER, WE DO NOT FIND ANYWHERE FROM THE RECORDS AS TO WHETHER THE AO IN T HE ORIGINAL ASSESSMENT PROCEEDINGS ENQUIRED INTO THE 19 ITEM WISE FACTS SHOW-CAUSED BY THE LD. CIT IN ORDER TO INVOKE THE 3 ITA NO.1176/KOL/2014 R. PIYARELALL IMPORT & EXPORT LTD., AYS- 2009-10 REVISIONARY JURISDICTION. TO OUR SPECIFIC QUERY TO THE LD. AR TO POINT OUT TO US, AS TO WHETHER THE 19 ISSUES RAISED BY THE LD. CIT IN HIS SHOW CAUSE NOTICE TO THE ASSESSEE COMPANY HAS BEEN ENQUIRED INTO BY THE AO BY ISSUING 142(1) NOTICES/ORDER SHEETS, THE LD. COUNSEL FOR THE ASSESSEE WAS UNABLE TO BRING TO OUR NOTICE ANY SPECIFIC QUERIES OF THE AO WHICH WAS RAISED ABOUT THESE ITEMS DURING THE ASSES SMENT PROCEEDINGS. IN THE LIGHT OF THE AFORESAID FACTS, WE ARE UNABLE TO AGREE WITH THE LD . COUNSEL FOR THE ASSESSEE THAT BECAUSE OF THE GENERAL OBSERVATIONS MADE BY THE AO IN PARA 2 A ND 3 OF HIS ORDER THAT THE AO HAS MADE ENQUIRIES IN RESPECT OF THE 19 ISSUES RAISED BY THE LD. CIT. IT HAS TO BE KEPT IN MIND THAT THE AO HAS A DUAL ROLE WHILE ASSESSING AN ASSESSEE. HE HAS TO BE AN INVESTIGATOR AS WELL AS AN ADJUDICATOR. IN THIS CASE, WE FIND THAT THE AO HAS NOT EXERCISED HIS ROLE OF INVESTIGATOR IN RESPECT TO THE ITEMS SHOW-CAUSED BY LD CIT, WHICH M AKES THE ORDER ERRONEOUS AS HELD BY THE HONBLE SUPREME COURT AND HIGH COURTS IN PLETHORA O F DECISIONS. SINCE THE AO HAS NOT SPECIFICALLY MADE QUERIES IN RESPECT TO THE ISSUES THAT HAS BEEN RAISED BY THE LD. CIT, WE CANNOT INFER THAT THE AO HAS MADE PROPER ENQUIRIES BEFORE PASSING THE ASSESSMENT ORDER. IN THE LIGHT OF THE AFORESAID DISCUSSION, WE ARE UNABL E TO FIND ANY FAULT IN THE ORDER OF THE LD. CIT IN EXERCISING HIS REVISIONAL JURISDICTION FOR L ACK OF ENQUIRY FROM THE PART OF AO. THEREFORE, WE UPHOLD THE ORDER OF THE LD. CIT AND D ISMISS THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 05.01.201 8 SD/- SD/- (J. SUDHAKAR REDDY) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 5 TH JANUARY, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT R. PIYARELALL IMPORT & EXPORT LTD., 12, GOVT. PLACE (EAST), KOLKATA-69. 2 RESPONDENT CIT, KOLKATA-1, KOLKATA. 3. THE CIT(A) KOLKATA. 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. / TRUE COPY, BY ORDER, SR. PVT. SECRETARY