ITO, WD-5(2), KOLKATA, Kolkata V. M/s Sandeep Nirman Pvt. Ltd., Kolkata

ITA 1181/KOL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1581 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 15-09-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER
• Assessee Lawyers: MANISH TIWARI
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 142(1); 131; 68; 263

Judgement Text

1 ITA NO. 1181/KOL/2015 SANDEEP NIRMAN PVT. LTD, AY 2012-13 , 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. 1181/KOL/2015 ASSESSMENT YEAR: 2012-13 INCOME-TAX OFFICER, WD-5(2), KOLKATA VS. SANDEEP NI RMAN PVT. LTD. (PAN: AAKCS4067Q)) APPELLANT RESPONDENT DATE OF HEARING 15.11.2018 DATE OF PRONOUNCEMENT 22.11.2018 FOR THE APPELLANT SHRI SANKAR HALDER, ADDL. CIT, SR . DR FOR THE RESPONDENT SHRI MANISH TIWARI, AR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE REVENUE IS AGAINST THE ORDER OF THE LD. CIT(A)-2, KOLKATA DATED 03.06.2015 FOR AY 2012-13. 2. THE ASSESSEE IS A PVT. LTD. COMPANY AND DURING T HE PREVIOUS YEAR IT HAS RAISED SHARE CAPITAL AMOUNTING TO RS. 1,09,00,000/-, THE B REAKUP OF WHICH IS SHARE CAPITAL OF RS. 54,500/-, AND SHARE PREMIUM OF RS. 1,08,45,50 0/-. THE ASSESSING OFFICER MADE AN ADDITION U/S 68 OF THE ACT. AGGRIEVED THE ASSESS EE CARRIED THE MATTER IN APPEAL. THE LD. FIRST APPELLATE AUTHORITY GRANTED RELIEF AN D DELETED THE ADDITION. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 3. ON A CAREFUL CONSIDERATION OF THE ARGUMENTS OF BOTH SIDES, PERUSAL OF PAPERS ON RECORD, ORDERS OF THE LOWER AUTHORITIES BELOW AND C ASE LAW CITED, WE HOLD AS FOLLOWS. 2 ITA NO. 1181/KOL/2015 SANDEEP NIRMAN PVT. LTD, AY 2012-13 4. IN THE ORDER OF THE AO, IT IS STATED THAT THE SUMMONS WAS SENT TO THE DIRECTORS OF THE ASSESSEE COMPANY AS WELL AS DIRECTORS OF THE INVESTING COMPANIES BUT NONE OF THEM APPEARED. BEFORE THE LD. CIT(A), THE ASSESSEE HAS SPECIFICALLY STATED THAT NO SUMMONS U/S 131 OF THE INCOME TAX ACT, 1961 WERE R ECEIVED BY THE ASSESSEE. IT WAS ALSO ARGUED THAT THE ASSESSING OFFICER HAS NOT MADE ANY INDEPENDENT ENQUIRY AT HIS END, TO DISPROVE THE CLAIM OF THE ASSESSEE COMP ANIES. 5. IN THE CASE OF SRIRAM TIE UP PVT. LTD. SUPRA A T PARA 6 AND 7 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 AS SESSEE, A SIMILAR VIEW HAS BEEN TAKEN BY THE CO- ORDINATE BENCH OF THIS TRIBUNAL AND THE SIMILAR ISS UE RELATING TO THE ADDITION MADE UNDER SECTION 68 ON ACCOUNT OF SHARE CAPITAL CONTRIBUTION BY TREATIN G THE SAME AS UNEXPLAINED CASH CREDITS IS RESTORED BACK BY THE TRIBUNAL TO THE FILE OF THE A.O. IN ALM OST SIMILAR SITUATION AFTER RECORDING ITS OBSERVATI ONS / FINDINGS AS UNDER: WE NOTE THAT THE AO PURSUANT TO THE ORDER OF LD. CI T HAD TAKEN NOTE OF THE DIRECTIONS OF THE LD. CIT AND ISSUED NOTICE U/S. 142(1) DATED 16.08.2 013 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 INFER ENCES 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 ISSU ED 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 VI DE 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 NO T IN STATION TILL 23.03.2014, THE LD. AR HAD REQUESTED FOR ADJOURNMENT TILL THAT TIME. THOUGH TH E AO HAS STATED THAT HE HAS ISSUED SUMMONS ON 24.03.2014 TO THE ASSESSEE COMPANY TO PR ODUCE THE DIRECTORS OF THE COMPANY BEFORE HIM ON 26.03.2014, THE ASSESSEE COMPANY CONT ENDED 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 T HE DIRECTORS OF THE ASSESSEE COMPANY AND THAT OF THE SHAREHOLDER COMPANIES. WE NOTE THAT IN ITIALLY THE AO STARTED THE ENQUIRY ON 16.08.2013 WHICH WAS COMPLIED BY THE ASSESSEE BY SU BMITTING DOCUMENTS WHICH HAS BEEN ACKNOWLEDGED BY THE AO. THEREAFTER, THE ENQUIRY W AS STARTED ONLY AT THE FAG END OF FEBRUARY 2014 AND THE ASSESSEE COMPANY HAD INFORMED THE AO T HAT THEIR DIRECTORS WERE OUT OF STATION TILL 23.03.2014. IN THE LIGHT OF THE AFORESAID FAC TS, WE ARE OF THE OPINION THAT THE ASSESSEE DID NOT GET FAIR OPPORTUNITY TO PRESENT THE EVIDENCES B EFORE THE AO SO, THERE WAS A LACK OF OPPORTUNITY AS AFORESAID, THEREFORE, IT HAS TO GO B ACK TO AO. 8. WE ALSO NOTE THAT LD. CIT WHILE SETTING ASIDE TH E ORDER OF THE AO WHICH WAS PASSED U/S. 147/143(3) OF THE ACT, THE LD. CIT GAVE CERTAIN GUI DELINES TO FOLLOW FOR CONDUCTING DEEP 3 ITA NO. 1181/KOL/2015 SANDEEP NIRMAN PVT. LTD, AY 2012-13 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/K OL/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 HONBL E JURISDICTIONAL HIGH COURT AND THE SLP PREFERRED AGAINST THE DECISION OF THE HONBLE JURIS DICTIONAL 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 ADVERS E VIEW AGAINST THE ASSESSEE ON THE PLEA THAT THE DIRECTORS OF THE ASSESSEE COMPANY AND SHAR E SUBSCRIBING COMPANIES HAD NOT APPEARED BEFORE HIM ON 26.03.2014 AND T AFTER TAKIN G NOTE THAT NONE APPEARED ON 26.03.2014 CONCLUDED ON THE SAME DAY 26.03.2014 THAT ENTIRE A MOUNT 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 NO TE 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 TH E 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 EXPERI ENCE AND WISDOM HAS GIVEN CERTAIN GUIDELINES IN THE BACKDROP OF BLACK MONEY MENACE SH OULD 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 W HETHER 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 H ELD 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 A ND 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 HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING & MARKETING PVT. LTD. I N ITA NO. 525/2014 DATED 11.03.2015 WHEREIN AFTER NOTICING INADEQUATE ENQUIRY BY AUTHO RITIES 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 QUESTIO N. 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 CREDITWORTHIN ESS OF THE PARTIES OR THE GENUINENESS OF THE TRANSACTIONS IN QUESTION WOULD A LSO HAVE BEEN ESTABLISHED. 42. THE AO HERE MAY HAVE FAILED TO DISCHARGE HIS OB LIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGICAL CONCLUSION. B UT CIT(APPEALS), HAVING NOTICED WANT OF PROPER INQUIRY, COULD NOT HAVE CLOSED THE C HAPTER 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 ENS URED THAT EFFECTIVE INQUIRY WAS CARRIED OUT, PARTICULARLY IN THE FACT OF THE ALLEGA TIONS OF THE REVENUE THAT THE ACCOUNT STATEMENTS REVEAL UNIFORM PATTERN OF CASH DEPOSITS OF EQUAL AMOUNTS IN THE RESPECTIVE ACCOUNTS PRECEDING THE TRANSACTIONS IN Q UESTION. 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 MATE RIAL SUBMITTED AT THE STAGE OF APPEALS, IF DEEMED PROPER BY WAY OF MAKING OR CAUSI NG TO BE MADE A 'FURTHER INQUIRY IN EXERCISE OF THE POWER UNDER SECTION 250 (4). HIS APPROACH NOT HAVING 4 ITA NO. 1181/KOL/2015 SANDEEP NIRMAN PVT. LTD, AY 2012-13 BEEN ADOPTED, THE IMPUGNED ORDER OF ITAT, AND CONSE QUENTLY 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 T HE 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 ADVE RTISING & 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 ACCORDA NCE 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 AN D RESTORE THE MATTER TO THE FILE OF THE A.O. TO DEC IDE THE SAME AFRESH AFTER GIVING THE ASSESSEE PROPER AN D SUFFICIENT OPPORTUNITY OF BEING HEARD AND AFTER TAKING INTO CONSIDERATION THE ENTIRE EVIDENCE ALREA DY AVAILABLE ON RECORD AS WELL AS OTHER DOCUMENTARY EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE IN SUPPORT OF ITS CASE ON THE ISSUE. THE KOLKATA BENCH OF THE ITAT HAS PASSED SIMILAR OR DER IN MANY CASES ON THE SAME ISSUE AND THE CASE WAS SENT BACK TO THE AO FOR FRES H ADJUDICATION IN ACCORDANCE WITH LAW. 6. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND C IRCUMSTANCES OF THE CASE AND ALSO THE ORDERS OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN SIMILAR MATTERS, WE SET ASIDE THIS APPEAL TO THE FILE OF THE AO FOR FRESH ADJUDIC ATION AND IN ACCORDANCE WITH LAW, AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 22/11/201 8 SD/- SD/- (J. SUDHAKAR REDDY) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22ND NOVEMBER, 2018 JD.(SR.P.S.) 5 ITA NO. 1181/KOL/2015 SANDEEP NIRMAN PVT. LTD, AY 2012-13 COPY OF THE ORDER FORWARDED TO: 1 APPELLANT ITO, WARD-5(2), KOLKATA. 2 RESPONDENT SANDEEP NIRMAN PVT. LTD., 5, LUCAS LAN E, KOLKATA-700001. 3 4 5 CIT(A)-2, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY