ITO, WD-5(1), KOLKATA, Kolkata V. M/s Swastik Wholesale Traders Pvt. Ltd., Kolkata

ITA 1176/KOL/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9843 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 08-08-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 15-09-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: S M SURANA
• Keywords: Unexplained cash credit; Opportunity of being heard; Onus to prove; Set aside
• Section: 142(1); 250; 143(2); 131; 263; 144; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. GODARA, JUDICIAL MEMBER) I.T.A. NO. 1176/KOL/2015 ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER, WARD-5(1), KOLKATA..........................................................APPELLANT VS. M/S. SWASTIK WHOLESALE TRADERS PVT. LTD......RESPONDENT 21, BENTINK STREET LAL BAZAR KOLKATA 700 001 [PAN : AAQCS 4630 R] C.O. NO. 102/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. SWASTIK WHOLESALE TRADERS PVT. LTD..........APPELLANT 21, BENTINK STREET LAL BAZAR KOLKATA 700 001 [PAN : AAQCS 4630 R] VS. INCOME TAX OFFICER, WARD-5(1), KOLKATA........................................................RESPONDENT APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. DR. P.K. SRIHARI, CIT, SR. D/R APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : AUGUST 8 TH , 2019 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 20 TH , 2019 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLKATA (LD. CIT(A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961, (THE ACT), DT. 30/06/2015, FOR THE ASSESSMENT YEAR 2012-13. 2. THE LD. COUNSEL FOR THE ASSESSEE, SHRI S.M. SURANA, SUBMITTED THAT THE GROUNDS RAISED IN CROSS OBJECTION, ARE JURISDICTIONAL ISSUES WHICH GO INTO THE ROOT OF THE MATTER AND HENCE MAY BE TAKEN UP FIRST. THE LD. CIT, D/R, DR. P.K. SRIHARI, THOUGH NOT LEAVING HIS GROUND, AGREED THAT THE JURISDICTIONAL ISSUES MAY BE ALLOWED TO BE ARGUED. HENCE WE 2 I.T.A. NO. 1176/KOL/2015 ASSESSMENT YEAR: 2012-13 C.O. NO. 102/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. SWASTIK WHOLESALE TRADERS PVT. LTD TAKE UP THE CROSS OBJECTIONS FOR ADJUDICATION FIRST AND THE REVENUE APPEAL WOULD BE TAKEN UP THEREAFTER FOR ADJUDICATION ON MERITS. 3. THE GROUNDS OF CROSS-OBJECTIONS READ AS FOLLOWS:- 1. FOR THAT THE ASSESSMENT WAS BAD IN LAW SINCE THE NOTICE U/S. 143(2) REQUIRED TO BE ISSUED WAS NOT ISSUED BY THE JURISDICTIONAL I.T.O. WITHIN THE TIME PRESCRIBED UNDER THE LAW. 2. FOR THAT THE NOTICE UNDER SEC. 143(2) HAVING BEEN ISSUED WITHOUT JURISDICTION AS CONFERRED BY THE CBDT THE ENTIRE PROCEEDINGS FOR ASSESSMENT IS VOID-AB-INITIO AND THE ASSESSMENT IS LIABLE TO BE QUAHED. 3. FOR THAT THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION SINCE THE ASSESSEE DULY DISCHARGED THE ONUS TO PROVE THE CREDITS IN THE NAME OF TWO SHAREHOLDER. 4. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND BEFORE OR AT THE TIME OF HEARING. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT, THE CBDT BY VIRTUE OF A NOTIFICATION, CONFERRED JURISDICTION OF THE ASSESSEE COMPANY, WHICH IS A PRIVATE LIMITED COMPANY, ON INCOME TAX OFFICER, WARD-5(1), KOLKATA. ACCORDINGLY IT WAS SUBMITTED THAT THE RETURN OF INCOME WAS FILED. HE FURNISHED A COPY OF THE NOTICE ISSUE U/S 143(2) OF THE ACT AND SUBMITTED THAT, THIS NOTICE WAS ISSUED BY THE INCOME TAX OFFICER, WARD-21(1), KOLKATA, WHO HAD NO JURISDICTION OVER THE ASSESSEES CASE. THUS, HE SUBMITS THAT, AS THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE HAS NOT ISSUED THE NOTICE U/S 143(2) OF THE ACT, AS MANDATORILY REQUIRED UNDER THE ACT, THE ASSESSMENT FRAMED U/S 143(3)/144, ON 26/03/2015, WHICH IS BAD IN LAW. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF M/S. TIRUPATI BALAJI TRADERS V. ITO IN ITA NO. 1835/KOL/2018, ORDER DT. 22/03/2019. HE FURTHER RELIED ON THE FOLLOWING ORDER FOR THE PROPOSITION THAT A JURISDICTIONAL ISSUE CAN BE RAISED BY THE ASSESSEE, AT ANY STAGE OF THE PROCEEDINGS:- SRI BIMAL KR. SURANA VS. ITO IN ITA NO. 485/KOL/2006, ORDER DT. 24/11/2006. 4.1. THE LD. D/R, STRONGLY OBJECTED TO THE ASSESSEE RAISING THIS JURISDICTIONAL ISSUE AT THIS STAGE BEFORE THE TRIBUNAL. HE RELIED ON SECTION 124(3) OF THE ACT AND SUBMITTED THAT THE ASSESSEE IS NOT ENTITLED TO CALL IN QUESTION THE JURISDICTION OF THE ASSESSING OFFICER AFTER EXPIRY OF ONE MONTH FROM THE DATE ON WHICH HE WAS SERVED NOTICE UNDER SUB- 3 I.T.A. NO. 1176/KOL/2015 ASSESSMENT YEAR: 2012-13 C.O. NO. 102/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. SWASTIK WHOLESALE TRADERS PVT. LTD SECTION (1) OF SECTION 142 OF THE ACT OR SUB-SECTION (2) OF SECTION 143 OF THE ACT OR AFTER THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER. HE POINTED OUT THAT THE ASSESSMENT IN QUESTION WAS PASSED U/S 144 OF THE ACT AND THE ASSESSEE HAS NOT FILED ANY OBJECTION BEFORE THE ASSESSING OFFICER IN THIS REGARD. HE ARGUED THAT THE ISSUE OF CONFERRING OF JURISDICTION IS A SUBJECT MATTER OF THE CBDT AND THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX OR THE CHIEF COMMISSIONER OF INCOME TAX OR THE PRINCIPAL COMMISSIONER OF INCOME TAX AND THE ASSESSEE CANNOT QUESTION THESE POWERS. HE POINTED OUT THAT THE ASSESSEE HAD ORIGINALLY FILED HIS RETURN OF INCOME WITH ITO, WD- 21(2), KOLKATA. ON MERITS THE LD. D/R ARGUED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AS AN EX-PARTE ORDER WAS PASSED BY HIM AND THE ASSESSEE MAY BE PERMITTED TO RAISE ALL ISSUES BEFORE THE ASSESSING OFFICER. 4.2. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, REFERRED TO SECTION 120 OF THE ACT AND SUBMITTED THAT, JURISDICTIONS ARE CONFERRED BY THE CBDT AND WHEN AN OFFICER ACTS BEYOND THE JURISDICTION CONFERRED, THEN THE ACTION IS ILLEGAL AND HAS TO BE QUASHED. REFERRING TO SECTION 124(3) OF THE ACT, HE SUBMITTED THAT THE QUESTION OF THE ASSESSEE OBJECTING TO JURISDICTION OF AN ASSESSING OFFICER ARISES, ONLY IF THE ASSESSING OFFICER HAS BEEN CONFERRED JURISDICTION EITHER BY THE CBDT OR THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX OR THE CHIEF COMMISSIONER OF INCOME TAX OR THE PRINCIPAL COMMISSIONER OF INCOME TAX. WHEN A PERSON HAS NO AUTHORITY, THE QUESTION OF VALIDATING THE ACTION DOES NOT ARISE. ON MERITS, HE RELIED ON THE ORDER OF THE LD. CIT(A) AND ARGUED THAT THE SAME MAY BE UPHELD. 5. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS:- 6. WE FIND THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 IN ITR-6 BEFORE THE ITO WARD-21(1), KOLKATA ON 29/09/2012 VIDE E-FILING ACKNOWLEDGEMENT NO. 504482101290912. THE ADDRESS GIVEN BY THE ASSESSEE IS FLAT 21, BENTINCK STREET, KOLKATA 700 001. THUS, ITO, WD-21(1), KOLKATA, HAD THE ORIGINAL JURISDICTION TO ASSESS THIS ASSESSEE M/S. SWASTIK WHOLESALE TRADERS PVT. LTD. OTHERWISE THE ASSESSEE WOULD NOT HAVE FILED ITS RETURN OF INCOME WITH ITO, WARD-21(1), KOLKATA. THE FILING IS CONTROLLED ELECTRONICALLY AND IS AUTOMATICALLY FILED WITH THE OFFICER WHO HAS 4 I.T.A. NO. 1176/KOL/2015 ASSESSMENT YEAR: 2012-13 C.O. NO. 102/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. SWASTIK WHOLESALE TRADERS PVT. LTD THE JURISDICTION. THUS, THE ASSESSING OFFICER ITO, WARD-21(1) WHO WAS HAVING JURISDICTION OF THE ASSESSEE HAS ISSUE A NOTICE U/S 143(2) OF THE ACT ON 06/08/2013 TO THE ASSESSEE COMPANY. HENCE AS THE NOTICE HAS BEEN ISSUED BY THE OFFICER HAVING JURISDICTION OVER THE ASSESSEE IT IS A VALID NOTICE. THE ASSESSEE HAS NOT LED ANY EVIDENCE TO DEMONSTRATE THAT ITO,WARD-21(1), KOLKATA, HAD NO JURISDICTION OVER THE ASSESSEES CASE. THE ASSESSEE HAS NOT CHALLENGED THE JURISDICTION OF THE ASSESSING OFFICER WHO PASSED THE ASSESSMENT ORDER I.E., THE ITO, WARD-5(1), KOLKATA. THE JURISDICTION WOULD HAVE UNDERGONE CHANGE AT A LATER POINT OF TIME I.E., AFTER ISSUE OF NOTICE U/S 143(2) OF THE ACT. 7. IN VIEW OF THE ABOVE DISCUSSION, WE DISMISS THIS GROUND OF THE CROSS-OBJECTION OF THE ASSESSEE. 8. WE NOW TAKE UP THE QUANTUM APPEAL OF THE REVENUE ON MERITS. 9. THE ASSESSEE FILED A NIL- RETURN OF INCOME ON 21/09/2012. THE ASSESSING OFFICER COMPLETED ASSESSMENT AND PASSED A BEST JUDGMENT ASSESSMENT ORDER U/S 144 OF THE ACT AND DETERMINED THE TOTAL INCOME AT RS.7,93,00,000/- INTERALIA MAKING AN ADDITION OF RS. RS.7,93,00,000/- U/S 68 OF THE ACT. ON APPEAL THE LD. FIRST APPELLATE AUTHORITY, DELETED THE ADDITION FOR THE VARIOUS REASONS GIVEN IN HIS ORDER. 10. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US, ON THE FOLLOWING GROUND:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-2, KOLKATA, ERRED IN LAW AND ON FACT IN DELETING THE ADDITION MADE U/S. 68 OF THE I.T. ACT, 1961, AMOUNT TO RS.7,93,00,000/- WITHOUT OBJECTIVELY DEALING WITH THE MATERIAL, INFORMATION, EVIDENCES AVAILABLE ON RECORDS. 11. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY NOT CONSIDERING THE RECENT DECISIONS OF THE ITAT AS WELL AS SOME OF THE DECISIONS OF THE HONBLE HIGH COURTS, ON SIMILAR ISSUE. THE LD. CIT(A) DELETED THE ADDITION ON THE GROUND THAT THOUGH THE ASSESSING OFFICER ISSUED NOTICE U/S 131 OF THE ACT, BUT HE HAD NOT MADE ANY EFFORT TO PURSUE THE MATTER FURTHER BY FOLLOWING UP AND EXAMINING THE SHAREHOLDERS DESPITE THE DETAILS BEING AVAILABLE ON THE FILE. HE FURTHER OBSERVED THAT THE ASSESSING OFFICER DID NOT MAKE ANY EFFORT TO FIND OUT THE MONEY TRAIL OF THE SHARE CAPITAL BY CONDUCTING INDEPENDENT ENQUIRY OF EACH AND EVERY SHARE HOLDER. IN OUR VIEW, THE ADDITION CANNOT BE DELETED ON THESE GROUNDS. THE POWERS OF THE LD. CIT(A) 5 I.T.A. NO. 1176/KOL/2015 ASSESSMENT YEAR: 2012-13 C.O. NO. 102/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. SWASTIK WHOLESALE TRADERS PVT. LTD ARE CO-TERMINUS AND CO-EXTENSIVE AS THAT OF THE ASSESSING OFFICER. SUCH ORDER OF THE LD. CIT(A) CANNOT BE UPHELD. SIMILARLY, WE ALSO FIND THAT THE ASSESSING OFFICER HAS NOT PASSED THE ASSESSMENT ORDER BY FOLLOWING THE SPECIFIC DIRECTIONS ISSUED BY THE LD. PR. CIT IN HER ORDER PASSED U/S 263 OF THE ACT, ON SIMILAR ISSUES WHILE FRAMING THE ASSESSMENT. THIS BENCH OF THE TRIBUNAL IN SIMILAR MATTERS, HAS BEEN SETTING ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AND FOR FOLLOWING THE SPECIFIC DIRECTIONS GIVEN BY THE LD. PR. CIT IN THE ORDER PASSED U/S 263 OF THE ACT, ON SUCH MATTERS. THIS BENCH OF THE TRIBUNAL, UNDER SIMILAR CIRCUMSTANCES, IN THE CASE OF SRIRAM TIE UP PVT. LTD. VS. ITO IN I.T.A. NO. 1104/KOL/2016; ASSESSMENT YEAR 2009-10, ORDER DT. 21/03/2018, HAS HELD AS FOLLOWS:- 6. IN THE CASE OF M/S. SUKANYA MERCHANDISE PVT. LTD. VS ITO (ITA 291/KOL/2016 DATED 15.12.2017) CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE, A SIMILAR VIEW HAS BEEN TAKEN BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL AND THE SIMILAR ISSUE RELATING TO THE ADDITION MADE UNDER SECTION 68 ON ACCOUNT OF SHARE CAPITAL CONTRIBUTION BY TREATING THE SAME AS UNEXPLAINED CASH CREDITS IS RESTORED BACK BY THE TRIBUNAL TO THE FILE OF THE A.O. IN ALMOST SIMILAR SITUATION AFTER RECORDING ITS OBSERVATIONS / FINDINGS AS UNDER: WE NOTE THAT THE AO PURSUANT TO THE ORDER OF LD. CIT HAD TAKEN NOTE OF THE DIRECTIONS OF THE LD. CIT AND ISSUED NOTICE U/S. 142(1) DATED 16.08.2013 AND HAS ACKNOWLEDGED THAT THE ASSESSEE HAD FURNISHED THE COPY OF FINAL ACCOUNT, I. T. ACKNOWLEDGEMENT, BANK STATEMENT FOR THE RELEVANT PERIOD EVIDENCING THE RECEIPT OF SHARE APPLICATION MONEY FROM THE SHARE APPLICANTS. THEREAFTER, THE AO MAKES CERTAIN INFERENCES BASED ON THE LIST OF SHAREHOLDERS AND TAKING NOTE OF THE BANK STATEMENT FURNISHED BY THE ASSESSEE. WE NOTE THAT AFTER THE INITIAL NOTICE DATED 16.08.2013, THEREAFTER THE AO HAD ISSUED THE NOTICE ON 26.02.2014 WHICH HAS BEEN REPRODUCED AT PAGE 3 OF THE REASSESSMENT ORDER, WHEREIN AO REQUIRED THE DIRECTORS OF THE ASSESSEE COMPANY TO BE PRESENT BEFORE HIM ON 06.03.2014. HOWEVER, ACCORDING TO THE LD. AR, THE ASSESSEE RECEIVED THE NOTICE ONLY ON 07.03.2014 AND THEREAFTER, THE ASSESSEE REQUESTED THE AO TO PROVIDE ANOTHER OPPORTUNITY OF HEARING VIDE ITS LETTER DATED 20.03.2014. THEREAFTER, THE AO FIXED THE DATE OF HEARING ON 12.03.2014 VIDE NOTICE DATED 10.03.2014. SO, ACCORDING TO THE ASSESSEE COMPANY SINCE THE DIRECTORS WERE NOT IN STATION TILL 23.03.2014, THE LD. AR HAD REQUESTED FOR ADJOURNMENT TILL THAT TIME. THOUGH THE AO HAS STATED THAT HE HAS ISSUED SUMMONS ON 24.03.2014 TO THE ASSESSEE COMPANY TO PRODUCE THE DIRECTORS OF THE COMPANY BEFORE HIM ON 26.03.2014, THE ASSESSEE COMPANY CONTENDED THAT IT HAS NOT RECEIVED THE SAID SUMMON AND, THEREFORE, COULD NOT MAKE THE PERSONAL APPEARANCE. THE AO HAS DRAWN ADVERSE CONCLUSION BASICALLY BECAUSE OF NON-APPEARANCE OF THE DIRECTORS OF THE ASSESSEE COMPANY AND THAT OF THE SHAREHOLDER COMPANIES. WE NOTE THAT INITIALLY THE AO STARTED THE ENQUIRY ON 16.08.2013 WHICH WAS COMPLIED BY THE ASSESSEE BY SUBMITTING DOCUMENTS WHICH HAS BEEN ACKNOWLEDGED BY THE AO. THEREAFTER, THE ENQUIRY WAS STARTED ONLY AT THE FAG END OF FEBRUARY 2014 AND THE ASSESSEE COMPANY HAD INFORMED THE AO THAT THEIR DIRECTORS WERE OUT OF STATION TILL 23.03.2014. IN THE LIGHT OF THE AFORESAID 6 I.T.A. NO. 1176/KOL/2015 ASSESSMENT YEAR: 2012-13 C.O. NO. 102/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. SWASTIK WHOLESALE TRADERS PVT. LTD FACTS, WE ARE OF THE OPINION THAT THE ASSESSEE DID NOT GET FAIR OPPORTUNITY TO PRESENT THE EVIDENCES BEFORE THE AO SO, THERE WAS A LACK OF OPPORTUNITY AS AFORESAID, THEREFORE, IT HAS TO GO BACK TO AO. 8. WE ALSO NOTE THAT LD. CIT WHILE SETTING ASIDE THE ORDER OF THE AO WHICH WAS PASSED U/S. 147/143(3) OF THE ACT, THE LD. CIT GAVE CERTAIN GUIDELINES TO FOLLOW FOR CONDUCTING DEEP INVESTIGATION. WE ALSO NOTE THAT SIMILARLY PLACED ASSESSEES HAD CHALLENGED THE EXERCISE OF REVISIONAL JURISDICTION U/S. 263 OF THE ACT BEFORE THIS TRIBUNAL IN THOSE CASES ONE OF IT OF SUBHA LAKSHMI VANIJYA PVT. LTD. VS. CIT IN ITA NO. 1104/KOL/2014 DATED 30.07.2015, WHEREIN THE TRIBUNAL WAS PLEASED TO UPHOLD THE ORDER PASSED BY THE LD. CIT PASSED U/S. 263 OF THE ACT, WHICH WE LEARN TO HAVE BEEN CONFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT AND THE SLP PREFERRED AGAINST THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. THEREFORE, SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD. WE NOTE THAT THE AO WHILE GIVING EFFECT TO THE CITS 263 ORDER HAS NOTED THAT THE ASSESSEE COMPANY HAS IN FACT FURNISHED THE DOCUMENTS SOUGHT BY HIM TO HIS NOTICE U/S. 142(1) OF THE ACT. HOWEVER, THE AO TOOK THE ADVERSE VIEW AGAINST THE ASSESSEE ON THE PLEA THAT THE DIRECTORS OF THE ASSESSEE COMPANY AND SHARE SUBSCRIBING COMPANIES HAD NOT APPEARED BEFORE HIM ON 26.03.2014 AND T AFTER TAKING NOTE THAT NONE APPEARED ON 26.03.2014 CONCLUDED ON THE SAME DAY 26.03.2014 THAT ENTIRE AMOUNT OF SHARE APPLICATION MONEY RECEIVED ALONG WITH PREMIUM AMOUNTING TO RS.8,06,00,000/- WHICH HAS REMAINED UNEXPLAINED AND ADDED TO THE INCOME OF THE ASSESSEE. WE ALSO NOTE THAT THE LD. CIT AFTER LOOKING INTO THE PERNICIOUS PRACTICE OF CONVERTING BLACK MONEY INTO WHITE MONEY HAS GIVEN THE GUIDELINES TO AO AS TO HOW THE INVESTIGATION SHOULD BE CONDUCTED TO FIND OUT THE SOURCE OF SOURCE. SINCE SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD BY THE TRIBUNAL AS WELL AS BY THE HONBLE CALCUTTA HIGH COURT AS WELL AS THE SLP HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT, SIMILAR ORDER OF THE LD. CIT HAS TO BE GIVEN EFFECT TO AS DIRECTED BY THE LD. CIT. WE TAKE NOTE THAT THE LD. CIT WITH HIS EXPERIENCE AND WISDOM HAS GIVEN CERTAIN GUIDELINES IN THE BACKDROP OF BLACK MONEY MENACE SHOULD HAVE BEEN PROPERLY ENQUIRED INTO AS DIRECTED BY HIM. THE AO OUGHT TO HAVE FOLLOWED THE INVESTIGATING GUIDELINES AND METHOD AS DIRECTED BY HIM TO UNEARTH THE FACTS TO DETERMINE WHETHER THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SHARE SUBSCRIBERS. WE NOTE THAT THE HONBLE SUPREME COURT IN THREE JUDGES BENCH IN THE CASE OF TIN BOX, (SUPRA), HAS HELD THAT SINCE THERE WAS LACK OF OPPORTUNITY TO THE ASSESSEE AT THE ASSESSMENT STAGE ITSELF, THE ASSESSMENT NEEDS TO BE DONE AFRESH AND THEREBY REVERSED THE HONBLE HIGH COURT, TRIBUNAL AND CIT(A)S ORDERS AND REMANDED THE MATTER BACK TO AO FOR FRESH ASSESSMENT. SO, SINCE THERE WAS LACK OF OPPORTUNITY AS AFORESTATED IT HAS TO GO BACK TO AO. WE ALSO NOTE THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING & MARKETING PVT. LTD. IN ITA NO. 525/2014 DATED 11.03.2015 WHEREIN AFTER NOTICING INADEQUATE ENQUIRY BY AUTHORITIES BELOW HAVE HELD AS UNDER: 41. WE ARE INCLINED TO AGREE WITH THE CIT(APPEALS), AND CONSEQUENTLY WITH ITAT, TO THE EXTENT OF THEIR CONCLUSION THAT THE ASSESSEE HEREIN HAD COME UP WITH SOME PROOF OF IDENTITY OF SOME OF THE ENTRIES IN QUESTION. BUT, FROM THIS INFERENCE, OR FORM THE FACT THAT THE TRANSACTIONS WERE THROUGH BANKING CHANNELS, IT DOES NOT NECESSARILY FOLLOWING THAT SATISFACTION AS TO THE CREDITWORTHINESS OF THE PARTIES OR THE GENUINENESS OF THE TRANSACTIONS IN QUESTION WOULD ALSO HAVE BEEN ESTABLISHED. 7 I.T.A. NO. 1176/KOL/2015 ASSESSMENT YEAR: 2012-13 C.O. NO. 102/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. SWASTIK WHOLESALE TRADERS PVT. LTD 42. THE AO HERE MAY HAVE FAILED TO DISCHARGE HIS OBLIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGICAL CONCLUSION. BUT CIT(APPEALS), HAVING NOTICED WANT OF PROPER INQUIRY, COULD NOT HAVE CLOSED THE CHAPTER SIMPLY BY ALLOWING THE APPEAL AND DELETING THE ADDITIONS MADE. IT WAS ALSO THE OBLIGATION OF THE FIRST APPELLATE AUTHORITY, AS INDEED OF ITAT, TO HAVE ENSURED THAT EFFECTIVE INQUIRY WAS CARRIED OUT, PARTICULARLY IN THE FACT OF THE ALLEGATIONS OF THE REVENUE THAT THE ACCOUNT STATEMENTS REVEAL UNIFORM PATTERN OF CASH DEPOSITS OF EQUAL AMOUNTS IN THE RESPECTIVE ACCOUNTS PRECEDING THE TRANSACTIONS IN QUESTION. THIS NECESSITATED A DETAILED SCRUTINY OF THE MATERIAL SUBMITTED BY THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION148 ISSUED BY THE AO, AS ALSO THE MATERIAL SUBMITTED AT THE STAGE OF APPEALS, IF DEEMED PROPER BY WAY OF MAKING OR CAUSING TO BE MADE A 'FURTHER INQUIRY IN EXERCISE OF THE POWER UNDER SECTION 250(4). HIS APPROACH NOT HAVING BEEN ADOPTED, THE IMPUGNED ORDER OF ITAT, AND CONSEQUENTLY THAT OF CIT(APPEALS), CANNOT BE APPROVED OR UPHELD.' IN VIEW OF THE AFORESAID ORDER AND IN THE LIGHT OF THE HONBLE SUPREME COURTS DECISION IN TIN BOX COMPANY (SUPRA) AND TAKING INTO CONSIDERATION THE FACT THE ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT IN SIMILAR CASES BEING UPHELD UP TO THE LEVEL OF APEX COURT, AND TAKING NOTE OF HONBLE DELHI HIGH COURTS ORDER IN JANSAMPARK ADVERTISING & MARKETING PVT. LTD. (SUPRA), WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF AO FOR DE NOVO ASSESSMENT AND TO DECIDE THE MATTER IN ACCORDANCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. WE, THEREFORE, CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE IN DISPUTE AND RESTORE THE MATTER TO THE FILE OF THE A.O. TO DECIDE THE SAME AFRESH AFTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD AND AFTER TAKING INTO CONSIDERATION THE ENTIRE EVIDENCE ALREADY AVAILABLE ON RECORD AS WELL AS OTHER DOCUMENTARY EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE IN SUPPORT OF ITS CASE ON THE ISSUE. 12. CONSISTENT WITH THE VIEW TAKEN THEREIN, AND IN VIEW OF THE SUBMISSIONS OF BOTH THE PARTIES, WE SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 13. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS-OBJECTION OF THE ASSESSEE IS DISMISSED. KOLKATA, THE 20 TH DAY OF SEPTEMBER, 2019. SD/- SD/- [ S.S. GODARA ] [ J. SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20.09.2019 {SC SPS} 8 I.T.A. NO. 1176/KOL/2015 ASSESSMENT YEAR: 2012-13 C.O. NO. 102/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. SWASTIK WHOLESALE TRADERS PVT. LTD COPY OF THE ORDER FORWARDED TO: 1. M/S. SWASTIK WHOLESALE TRADERS PVT. LTD 21, BENTINK STREET LAL BAZAR KOLKATA 700 001 2. INCOME TAX OFFICER, WARD-5(1), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES