M/s Simplex Vinimay Pvt Ltd, Kolkata V. ITO, Ward4(2), kolkata, Kolkata

ITA 1253/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2813 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: S K TULSIYAN
• Keywords: Unexplained cash credit; Set aside
• Section: 142(1); 131; 68; 263

Judgement Text

I.T.A. NO. 1253/KOL/2017 (ASSESSMENT YEAR: 2008-2009) M/S. SIMPLEX VINIM AY PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) & SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1253/KOL/2017 ASSESSMENT YEAR: 2008-2009 M/S. SIMPLEX VINIMAY PVT. LIMITED,................. ..........................APPELLANT 16, GANESH CHANDRA AVENUE, 7 TH FLOOR, KOLKATA-700 013 [PAN: AALCS 5806 J] -VS.- INCOME TAX OFFICER,................................ ..........................RESPONDENT WARD-4(2), KOLKATA, P-7, CHOWRINGHEE SQUARE, AAYAKAR BHAWAN, KOLKATA-700 069 APPEARANCES BY: SHRI S.K. TULSIYAN, ADVOCATE, FOR THE APPELLANT SHRI A.K. NAYAK, CIT, D.R., FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JUNE 10, 2019 DATE OF PRONOUNCING THE ORDER : JUNE 10, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE) :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLKATA DAT ED 10.05.2016 PASSED EX-PARTE, WHEREBY HE DISMISSED THE APPEAL OF THE ASSESSEE FOR NON-PROSECUTION. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF SHARE TRADING. IN THE ASSESSMENT OR IGINALLY COMPLETED UNDER SECTION 143(3)/147 OF THE ACT VIDE ORDER DATE D 21.05.2010, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.66,120/-. THE SAID ORDER WAS SUBSEQUENTLY SET AS IDE BY THE CONCERNED LD. CIT VIDE HIS ORDER DATED 30.03.2013 PASSED UNDE R SECTION 263 OF THE ACT WITH A DIRECTION TO THE ASSESSING OFFICER TO MA KE THE ASSESSMENT I.T.A. NO. 1253/KOL/2017 (ASSESSMENT YEAR: 2008-2009) M/S. SIMPLEX VINIM AY PVT. LIMITED 2 AFRESH AFTER EXAMINING THE ISSUE RELATING TO THE SH ARE CAPITAL AND SHARE PREMIUM AGGREGATING TO RS.16,70,50,000/- RECEIVED D URING THE YEAR UNDER CONSIDERATION. IN PURSUANCE OF THE ORDER PASSED BY THE LD. CIT UNDER SECTION 263, NOTICES UNDER SECTION 142(1) WERE ISSU ED BY THE ASSESSING OFFICER. SUMMONS UNDER SECTION 131 WERE ALSO ISSUED BY THE ASSESSING OFFICER TO THE ERSTWHILE DIRECTORS OF THE ASSESEE-C OMPANY IN ORDER TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF THE SHAREHOLDERS. THE SAID SUMMONS, HOWEVER, REMAINED UN-COMPLIED WITH AND THE ERSTWHILE DIRECTORS OF THE ASSESSEE-COMPANY SHRI ASHIT MULLIC K AND SHRI SHYAM SUNDER AGARWAL DID NOT APPEAR BEFORE THE ASSESSING OFFICER. ON THE BASIS OF THEIR NON-APPEARANCE, THE ASSESSING OFFICER HELD THAT THE DIRECTIONS CONTAINED IN THE ORDER UNDER SECTION 263 COULD NOT BE IMPLEMENTED AND TREATING THE SHARE CAPITAL AND SHARE PREMIUM AMOUNT S AGGREGATING TO RS.16,70,50,000/- AS UNEXPLAINED CASH CREDIT, HE MA DE AN ADDITION TO THAT EXTENT TO THE TOTAL INCOME OF THE ASSESSEE UNDER SE CTION 68 IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3)/147/263/1 43(3) OF THE ACT VIDE AN ORDER DATED 28.03.2014. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3)/147/263/143(3) OF THE ACT, AN APPEAL WAS PRE FERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND SINCE THER E WAS NO SATISFACTORY COMPLIANCE ON THE PART OF THE ASSESSEE TO THE NOTIC ES ISSUED BY HIM FIXING THE SAID APPEAL FOR HEARING FROM TIME TO TIME, THE LD. CIT(APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE FOR NON-PROSEC UTION VIDE HIS APPELLATE ORDER DATED 10.05.2016 PASSED EX-PARTE. A GGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. BESIDES EXPL AINING THE NON- COMPLIANCE ON THE PART OF THE ASSESSEE BEFORE THE L D. CIT(APPEALS), THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE SPE CIFIC DIRECTIONS GIVEN BY THE LD. CIT IN THE ORDER DATED 30.03.2013 PASSED UNDER SECTION 263 OF I.T.A. NO. 1253/KOL/2017 (ASSESSMENT YEAR: 2008-2009) M/S. SIMPLEX VINIM AY PVT. LIMITED 3 THE ACT WERE NOT FOLLOWED BY THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT AFRESH UNDER SECTION 143(3)/147/263/143( 3) OF THE ACT VIDE AN ORDER DATED 28.03.2014. AS POINTED OUT BY HIM, T HE ASSESSING OFFICER WAS DIRECTED BY THE LD. CIT VIDE HIS ORDER DATED 30 .03.2013 PASSED UNDER SECTION 263 TO COMPLETE THE ASSESSMENT AFRESH AS PE R THE FOLLOWING DIRECTION:- (I) EXAMINE THE GENUINENESS AND SOURCE OF SHARE CAPITAL, NOT ON A TEST CHECK BASIS, BUT IN RESPECT OF EACH AND EVERY SHAREHOLDER BY CONDUCTING INDEPENDENT ENQUIRY NOT THROUGH THE ASSESSEE. THE BANK ACCOUNT FOR THE ENTIRE PERIOD SHOULD BE EXAMINED IN THE COURSE OF VERIFICATION TO FIND OUT THE MONEY TRAIL OF THE SHA RE CAPITAL. (II) FURTHER THE AO SHOULD EXAMINE THE DIRECTORS AS WELL AS EXAMINE THE CIRCUMSTANCES WHICH NECESSITATED THE CHANGE IN DIRECTORSHIP IF APPLICABLE. HE SHOULD EXA MINE THEM ON OATH TO VERIFY THEIR CREDENTIALS AS DIRECTO R AND REACH A LOGICAL CONCLUSION REGARDING THE CONTROLLIN G INTEREST. (III) THE AO IS DIRECTED EXAMINE THE SOURCE OF REAL IZATION FROM THE LIQUIDATION OF ASSETS SHOWN IN THE BALANCE SHEET AFTER THE CHANGE OF DIRECTORS, IF ANY. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSING OFFICER WAS DIRECTED BY THE LD. CIT TO EXAMINE THE GENUINEN ESS AND SOURCE OF SHARE CAPITAL IN RESPECT OF EACH AND EVERY SHAREHOL DER BY CONDUCTING INDEPENDENT ENQUIRY DIRECTLY AND NOT THROUGH THE AS SESSEE. HE HAS SUBMITTED THAT THE ASSESSING OFFICER WAS ALSO DIREC TED BY THE LD. CIT TO EXAMINE THE BANK ACCOUNT FOR THE ENTIRE PERIOD TO F IND OUT THE MONEY TRAIL OF THE SHARE CAPITAL AND ALSO TO EXAMINE THE SOURCE OF REALIZATION FROM THE LIQUIDATION OF ASSETS SHOWN IN THE BALANCE -SHEET AFTER THE CHANGE OF DIRECTORS, IF ANY. HE HAS CONTENDED THAT THESE S PECIFIC DIRECTIONS GIVEN BY THE LD. CIT IN THE ORDER UNDER SECTION 263, HOWE VER, WERE NOT FOLLOWED BY THE ASSESSING OFFICER WHILE MAKING THE ASSESSMEN T AFRESH VIDE HIS ORDER DATED 28.03.2014 AND THIS POSITION, WHICH IS CLEARLY EVIDENT FROM THE RECORD INCLUDING THE ORDER DATED 28.03.2014 PAS SED BY THE ASSESSING OFFICER, IS NOT DISPUTED EVEN BY THE LD. D.R. WE, T HEREFORE, SET ASIDE THE I.T.A. NO. 1253/KOL/2017 (ASSESSMENT YEAR: 2008-2009) M/S. SIMPLEX VINIM AY PVT. LIMITED 4 IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) EX-PA RTE DISMISSING THE APPEAL OF THE ASSESSEE FOR NON-PROSECUTION AND REST ORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR MAKING THE ASSESS MENT AFRESH BY COMPLYING WITH THE SPECIFIC DIRECTIONS GIVEN BY THE LD. CIT VIDE HIS ORDER DATED 30.03.2013 PASSED UNDER SECTION 263. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 10, 2019 . SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAG TAP) JUDICIAL MEMBER V ICE-PRESIDENT (KZ) KOLKATA, THE 10 TH DAY OF JUNE, 2019 COPIES TO : (1) M/S. SIMPLEX VINIMAY PVT. LIMITED, 16, GANESH CHANDRA AVENUE, 7 TH FLOOR, KOLKATA-700 013 (2) INCOME TAX OFFICER, WARD-4(2), KOLKATA, P-7, CHOWRINGHEE SQUARE, AAYAKAR BHAWAN, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLKA TA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.