M/s. Expand Construction Pvt. Ltd.( Earlier known as M/s. Suraksha Vyapaar Pvt. Ltd.), Kolkata V. A.C.I.T., Central Circle-1(3), Kolkata

ITA 118/KOL/2021

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6305 (ITAT-KOLKATA)
• Duration Of Justice: 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 06-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 143(3); 143(2); 68; 148

Judgement Text

I.T.A. NO. 118/KOL/2021 A.Y. 20 12-2013 M/S.EXPAND CONSTRUCTION PVT. LIMITED (EARLI ER M/S. SURAKSHA VYAPAAR PVT. LIMITED) 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER I.T.A. NO. 118/KOL/2021 ASSESSMENT YEAR: 2012-2013 M/S. EXPAND CONSTRUCTION PVT. LIMITED,............. ...........................APPELLANT (EARLIER KNOWN AS M/S. SURAKSHA VYAPAAR PVT. LIMITE D), 13, MARQUIS STREET, 3 RD FLOOR, ROOM NO. 1C, KOLKATA-700016 [PAN: AALCS2834E] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. ........................RESPONDENT CENTRAL CIRCLE-1(3), KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, E.M. BYE, KOLKATA-700107 APPEARANCES BY: SHRI MIRAJ D. SHAH, A.R., FOR THE APPLICANT SMT; RANU BISWAS,, ADDL. CIT, D.R. , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : APRIL 16, 2021 DATE OF PRONOUNCING THE ORDER : APRIL 16, 2021 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER LD. COMMISSIONER OF INCOME TAX (APPEALS)-20, KOLKATA DA TED 25.03.2021. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF SHARE TRANSACTIONS. THE RETURN OF I NCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 27 .09.2012 DECLARING A LOSS OF RS.4,77,076/-. IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 16.03.2015, THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS DETER MINED BY THE I.T.A. NO. 118/KOL/2021 A.Y. 20 12-2013 M/S.EXPAND CONSTRUCTION PVT. LIMITED (EARLI ER M/S. SURAKSHA VYAPAAR PVT. LIMITED) 2 ASSESSING OFFICER AT RS.NIL. THEREAFTER THE ASSESSM ENT WAS REOPENED BY THE ASSESSING OFFICER AND A NOTICE UNDER SECTION 14 8 WAS ISSUED BY HIM TO THE ASSESSEE ON 15.03.2019. IN RESPONSE TO THE SAID NOTICE, THE RETURN OF INCOME WAS FINALLY FILED BY THE ASSESSEE ON 23.11.2 019 DECLARING A LOSS OF RS.4,77,076/-. SUBSEQUENTLY THE NOTICE UNDER SECTIO N 143(2) OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE ON 25.11.2019. THE SAID NOTICE AS WELL AS THE SUBSEQUENT NOTICES ISSUE D BY THE ASSESSING OFFICER UNDER SECTION 142(1), HOWEVER, REMAINED UN- COMPLIED WITH BY THE ASSESSEE. THE ASSESSING OFFICER, THEREFORE, WAS LEF T WITH NO OPTION BUT TO COMPLETE THE ASSESSMENT EX-PARTE TO THE BEST OF HIS JUDGMENT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. IN THE ASSESSMENT SO COMPLETED UNDER SECTION 143(3)/147 OF THE ACT VIDE AN ORDER DATED 2 9.11.2019, THE FOLLOWING ADDITIONS WERE MADE BY THE ASSESSING OFFI CER TO THE TOTAL INCOME OF THE ASSESSEE:- (I) AMOUNT RECEIVED FROM SHELL COMPANY TREATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 RS.10,00,000/ - (II) REVERSAL OF INVESTMENT IN UNQUOTED SHARES RS.6,92,50,000/ - (III) DISALLOWANCE OF EXPENSES RS.3,27,050/ - THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3)/147 OF THE ACT WERE CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS) AND SI NCE THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE SUBMISSIONS MADE ON BEHAL F OF THE ASSESSEE IN SUPPORT OF HIS CASE ON THE ISSUES RELATING TO THE S AID ADDITIONS, HE CONFIRMED ALL THE THREE ADDITIONS MADE BY THE ASSES SING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE AND DISMISSED THE APPE AL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. I.T.A. NO. 118/KOL/2021 A.Y. 20 12-2013 M/S.EXPAND CONSTRUCTION PVT. LIMITED (EARLI ER M/S. SURAKSHA VYAPAAR PVT. LIMITED) 3 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE MAIN ISSUE INVOLVED IN THIS APPE AL OF THE ASSESSEE RELATES TO THE ADDITION OF RS.6,92,50,000/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF SALE OF INVESTMENT IN UNQUOTED SHARES BY TREATING THE SAME AS UNEXPLAINED CASH CREDIT. HE HAS SUBMITTED THAT THE SAID INVESTMENT WAS MADE BY THE ASSESSEE OUT OF THE MONEY RECEIVED ON ACCOUNT OF SHARE CAPITAL AND SHAR E PREMIUM AGGREGATING TO RS.11.04 CRORES IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2008- 09. HE HAS SUBMITTED THAT THE ENTIRE AMOUNT OF SHAR E CAPITAL AND SHARE PREMIUM RECEIVED IN A.Y. 2008-09 WAS ADDED BY THE A SSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE BY TREATING THE SA ME AS UNEXPLAINED CASH CREDIT AND THE ASSESSEE HAS ALREADY SETTLED THE SAI D CONTROVERSY INVOLVED IN A.Y. 2008-09 BY OPTING VIVAD SE VISHWAS SCHEME. HE HAS CONTENDED THAT THE TREATMENT GIVEN BY THE DEPARTMENT TO THE S HARE CAPITAL AND SHARE PREMIUM AGGREGATING TO RS.11.04 CRORES AS INCOME OF THE ASSESSE FOR A.Y. 2008-09 THUS HAS BEEN ACCEPTED BY THE ASSESSEE AND SINCE THE SAME NOW REPRESENTS THE SOURCE OF INCOME OF THE ASSESSEE, TH E APPLICATION OF THE SAID AMOUNT FOR MAKING THE INVESTMENT AS WELL AS RE ALISATION OF SALE PROCEEDS OF SUCH INVESTMENT CANNOT AGAIN BE TREATED AS INCOME OF THE ASSESSEE UNDER SECTION 68 OR OTHERWISE SINCE THE SO URCE OF THE SAME IS ALREADY WELL ESTABLISHED. HE HAS CONTENDED THAT ANY SUCH ADDITION WOULD RESULT IN DOUBLE ADDITION AND IN ORDER TO AVOID SUC H DOUBLE ADDITION, THE MATTER MAY BE SENT BACK TO THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE THAT THE SOURCE OF THE RELEVANT INVESTMENT HAVING BEEN DULY ESTABLISHED AND ACCEPTED IN AY 2008-09 BY OPTING VI VAD SE VISHWAS SCHEME, THE PROCEEDS OF SALE OF SUCH INVESTMENT CAN NOT BE TREATED AS UNEXPLAINED AND ADDED TO THE TOTAL INCOME OF THE AS SESSEE FOR THE YEAR UNDER CONSIDERATION AS THE SAME WOULD AMOUNT OF DOU BLE ADDITION. THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT IF THE TRIBUNAL IS INCLINED TO RESTORE THIS MATTER TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED I.T.A. NO. 118/KOL/2021 A.Y. 20 12-2013 M/S.EXPAND CONSTRUCTION PVT. LIMITED (EARLI ER M/S. SURAKSHA VYAPAAR PVT. LIMITED) 4 PURPOSE OF VERIFICATION AS SOUGHT BY THE LD. COUNSE L FOR THE ASSESSEE, SHE HAS NO OBJECTION FOR THE SAME. KEEPING IN VIEW THE SUBMISSIONS MADE BY THE LD. REPRESENTATIVES OF BOTH THE SIDES AND HAVIN G REGARD ALL THE FACTS OF THE CASE, WE CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFYING THE CLAIM OF TH E ASSESSEE FROM THE RELEVANT RECORD. IF IT IS FOUND BY THE ASSESSING OF FICER ON SUCH VERIFICATION THAT THE AMOUNT IN QUESTION REPRESENTS THE SALE PRO CEEDS OF INVESTMENTS WHICH WERE MADE BY THE ASSESSEE OUT OF SHARE CAPITA L AND SHARE PREMIUM AMOUNTING TO RS.11.04 CRORES, WHICH IS ALREADY TREA TED AND ACCEPTED AS INCOME OF THE ASSESSEE BY VIRTUE OF THE SETTLEMENT OF DISPUTE UNDER VIVAD SE VISHWAS SCHEME IN A.Y. 2008-09, THE SAME CANNOT BE TREATED AS INCOME OF THE ASSESSEE AGAIN FOR THE YEAR UNDER CONSIDERAT ION AS THE SAME WOULD AMOUNT TO DOUBLE ADDITION. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 16, 202 1. SD/- SD/- (SATBEER SINGH GODARA) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 16 TH DAY OF APRIL, 2021 COPIES TO : (1) M/S. EXPAND CONSTRUCTION PVT. LIMITED, (EARLIER KNOWN AS M/S. SURAKSHA VYAPAAR PVT. LIMITE D), 13, MARQUIS STREET, 3 RD FLOOR, ROOM NO. 1C, KOLKATA-700016 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3), KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, E.M. BYE PASS, KOLKATA-700107 (3) COMMISSIONER OF INCOME TAX (APPEALS)-20, KOLK ATA, (4) COMMISSIONER OF INCOME TAX- , I.T.A. NO. 118/KOL/2021 A.Y. 20 12-2013 M/S.EXPAND CONSTRUCTION PVT. LIMITED (EARLI ER M/S. SURAKSHA VYAPAAR PVT. LIMITED) 5 (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.