Potential Trade & Credit Pvt. Ltd., , Kolkata V. ITO, Ward - 5(2), Kolkata , Kolkata

ITA 1319/KOL/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9845 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 14-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Earning of tax free income
• Section: 143(3); 14A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH : KOLKATA [BEFORE HONBLE SHRI S.S. GODARA, JM] I.T.A NO. 1319/KOL/20 18 ASSESSMENT YEAR : 2012-1 3 POTENTIAL TRADE & CREDIT PVT. LTD. -VS- ITO, WARD-5(2), KOLKATA. [PAN: AABCP 6491 L] (APPELLANT) ( RESPONDENT) FOR THE APPELLANT : SHRI MIRAJ D SHAH, AR FOR THE RESPONDENT : SHRI KAPIL MONDAL, JCIT DATE OF HEARING : 17.09.2018 DATE OF PRONOUNCEMENT : 26.09.2018 ORDER 1 . THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-1 3 IS DIRECTED AGAINST THE CIT(A)-2, KOLKATAS ORDER DATED 23.04.2018 PASSED I N CASE NO. 11037/CIT(A)- 2/15-16 UPHOLDING THE ASSESSING OFFICERS ACTION AD DING ITS SHARE CAPITAL AND PREMIUM OF RS. 12.32 LACS TO BE UNEXPLAINED U/S 68 OF THE ACT AS WELL AS DISALLOWING / ADDING EXPENDITURE OF RS. 2,65,963/- PERTAINING TO EXEMPT INCOME IN ASSESSMENT ORDER DATED 31.03.2015, INVOLVING PR OCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ). HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2 ITA NO.1319/KOL/2018 POTENTIAL TRADE & CREDIT PVT. LTD. A.YR. 2012-13 2 2. IT IS NOTICED AT THE OUTSET THAT THE CIT(A) HAS PASSED HIS LOWER APPELLATE ORDER EX PARTE AGAINST THE ASSESSEE. THERE IS NO DISCUSSI ON IN HIS ORDER AS TO WHETHER THE ASSESSEE HAD ACTUALLY BEEN SERVED THE HEARING NOTIC E OR NOT. COUPLED WITH THIS, I FIND THAT THE ASSESSING OFFICER HAD ADDED ASSESSEE S SHARE APPLICATION MONEY OF RS. 12,32,000/- OUT OF RS. 3,37,80,000/- RECEIVED DURING THE RELEVANT PREVIOUS YEAR. IT HAD ISSUED 33,780 SHARES HAVING FACE VALUE OF RS. 10 AT A PREMIUM OF RS. 990 EACH. IT EMERGES THAT THE ASSESSEE SUCCESSFULLY PROVED IDENTITY, GENUINENESS AND CREDITWORTHINESS OF ITS SHARE APPLICANTS / INVE STOR PARTIES APART FROM THE TWO ENTITIES M/S AMBITION MERCANTILE PVT. LTD. AND M/S VITAL MERCANTILE PVT. LTD. INVOLVES SUMS OF RS. 5,00,000/- AND RS. 7,32,000/-; RESPECTIVELY. LEARNED COUNSELS ONLY PLEA BEFORE US THAT THE ASSESSEES RELEVANT EVIDENCE REGARDING TWO OF ITS INVESTORS IDENTITY, GENUINENESS AND CREDITW ORTHINESS STOOD ON THE SAME FOOTING SINCE THE DIFFERENCE THEREIN WAS THAT THES E TWO ENTITIES FAILED TO APPEAR. LEARNED DEPARTMENTAL REPRESENTATIVE IS FAIR ENOUGH IS NOT DISPUTED THIS FACTUAL POSITION. I THEREFORE DEEM IT APPROPRIATE THAT LARG ER INTEREST OF JUSTICE WOULD BE SERVED IN CASE THE ASSESSING OFFICER RE-EXAMINES TH E INSTANT ISSUE OF GENUINENESS / CREDITWORTHINESS OF THE SHARE APPLICATION MONEY I N QUESTION AMOUNTING TO RS. 12.32 LACS AS PER LAW. HE SHALL ALSO MAKE INDEPENDE NT ENQUIRIES WITHIN THE PROVISIONS OF INCOME TAX ACT. THIS FORMER SUBSTANTI VE GROUND IS TAKEN AS ACCEPTED FOR STATISTICAL PURPOSES. 3. COMING TO LATTER ISSUE OF SECTION 14A READ WITH RULE 8D DISALLOWANCE OF RS. 2,65,963/-, CASE FILE SUGGESTS THAT THE ASSESSEE HA S NOT DERIVED ANY EXEMPT INCOME DURING THE RELEVANT PREVIOUS YEAR. WE QUOTE HONBLE JURISDICTIONAL HIGH COURT DECISION IN CIT VS. ASHIKA GLOBAL SECURITIES LTD. ITAT NO. 100/2014 GA NO. 2122 OF 2014 DECIDED ON 11.06.2018 TO CONCLUDE THAT IMPUGNED DISALLOWANCE 3 ITA NO.1319/KOL/2018 POTENTIAL TRADE & CREDIT PVT. LTD. A.YR. 2012-13 3 IS NOT SUSTAINABLE IN ABSENCE OF ANY EXEMPT INCOME. THE ASSESSEE SUCCEEDS IN ITS LATTER SUBSTANTIVE GROUND. 4.THIS ASSESSEES APPEAL IS PARTLY ACCEPTED IN ABOV E TERMS. ORDER PRONOUNCED IN THE COURT ON 26.09.2018 SD/- [ S.S.GODARA ] JUDICIAL MEMBER DATED : 26.09.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. POTENTIAL TRADE & CREDIT PVT. LTD., 48, JANAKI C ENTRE, 6 TH FLOOR, CANNING STREET, KOLKATA-700001. 2. ITO, WARD-5(2), KOLKATA, AAYAKAR BHAWAN , P-7, C HOWRINGHEE SQUARE, KOLKATA- 700069. 3..C.I.T(A).- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S