INDUSTRIAL PERFORATION (INDIA) PRIVATE LIMITED , KOLKATA V. DCIT, Circle-5, Kolkata, KOLKATA

ITA 1518/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8500 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-07-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 24-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MIRAJ D SHAH AR SHRI JA
• Section: 271(1)(c); 133(6); 37(1); 250; 201; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH, KOLKATA [VIRTUAL COURT HEARING] (BEFORE SRI J. SUDHAKAR REDDY, HON. ACCOUNTANT MEMBER & SRI ABY T. VARKEY, HON. JUDICIAL MEMBER) ITA NO. 1518/KOL/2019 ASSESSMENT YEAR: 2010-11 INDUSTRIAL PERFORATION (INDIA) PVT. LTD......................................................APPELLANT 327, R.N. GUHA ROAD KOLKATA 700 028 [PAN : AAACI 5550 J] VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5(1), KOLKATA.........................RESPONDENT APPEARANCES BY: SHRI MIRAJ D. SHAH, A/R, APPEARING ON BEHALF OF THE ASSESSEE SHRI JAYANTA KANRA, JCIT, D/R, APPEARED ON BEHALF OF THE REVENUE DATE OF CONCLUDING THE HEARING : JULY 7 TH , 2020 DATE OF PRONOUNCING THE ORDER : JULY 10 TH , 2020 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 21/08/2017, FOR THE ASSESSMENT YEAR 2010-11. 2. 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:- 3. GROUND NOS. 1, 4 & 5 ARE DISMISSED AS NOT PRESSED. 4. GROUND NO. 2 IS AGAINST THE ADHOC DISALLOWANCE OF 40% OF THE EXPENDITURE CLAIMED BY THE ASSESSEE AS INCURRED ON ACCOUNT OF DONATION AND SUBSCRIPTION. THE ASSESSING OFFICER AT PARA 3 PAGE 2 OBSERVED AS FOLLOWS:- 3. DONATION & SUBSCRIPTION THE ASSESSEE WAS ASKED TO PRODUCE THE DETAILS OF DONATION AND SUBSCRIPTION AMOUNTING TO RS.1,05,241/-. THE ASSESSEE PRODUCED THE DETAILS FROM WHICH IT HAS BEEN OBSERVED THAT MOST OF THE PAYMENTS ARE MADE TO THE LOCAL CLUBS/ASSOCIATION FOR PUJA OR OTHER SOCIAL PURPOSES. THE ASSESSEE FAILED TO SUBSTANTIATE THE SAID EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. IN ABSENCE OF REQUIREMENT LAID DOWN U/S 37(1) 40% OF RS.105421/- I.E. RS.42,096/- IS BEING DISALLOWED AND ADDED TO THE TOTAL INCOME. 4.1. EXPENDITURE WHICH IS OF THE WHICH IS INCURRED FOR THE PURPOSE OF BUSINESS AS HELD BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BATA INDIA LTD. WE DELETE THE DISALLOWANCE AND ALLOW THIS GROUND OF THE ASSESSEE. 5. GROUND NO. 3 IS AGAINST THE ADDITION MADE U/S 68 OF THE ACT. THE ASSESSING OFFICER MADE THE ADDITION BY OBSERVING AS FOLLOWS: 4. CASH CREDIT U/S 68: THE ASSESSEE HAS TAKEN AN UNSECURED LOAN OF RS.5,00,000/ LTD. AND PAID INTEREST OF RS.47062/ IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDIT WORTHINESS OF THE LENDER. THE LENDER HAS SENT A REPLY T SUBSEQUENTLY, A REPLY HAS ALSO BEEN RECEIVED IN WHICH IT HAS BEEN MENTIONED THAT THE AMOUNT WAS WRONGLY TRANSFERRED INTO SHARE INVESTMENT ACCOUNT AND THE SAID AMOUNT OF RS.5,00,000/ - IT HAS BEEN OBSERVED FROM T SIMILAR T THE SIGNATURE PUT ON EARLIER REPLY. THEREFORE, TH FAKE, IN GENUINE A ND HENCE NOT RELIABLE. THEREFORE, THE AMOUNT OF RS.547062 INCLUDING INTEREST PAID ON UNSECURED LOAN) ADDED TO THE TOTAL INCOME. INITIATE PENALTY U/S 271(1)(C) OF THE IT ACT 6. THE LD. CIT(A), IN HIS ORDER, RECORDED THE FACTS THAT THE LOAN WAS RECEIVED BY WAY OF A CHEQUE ON 25/03/ 2009. THUS, THE CREDIT IN QUESTION DOES NOT PERTAIN TO THE ASSESSMENT YEAR 2010-11. IT PERTAINS TO THE PREVIOUS ASSESSMENT YEAR I.E., 2009 NO ADDITION CAN BE MADE IN THIS YEAR FOR THIS CREDIT U/S. 68 OF THE ACT. DELETE THE ADDITION I N QUESTION AS BAD IN LAW AND ALLOW THIS GROUND OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. KOLKATA, THE SD/- [ABY T. VARKEY] JUDICIAL MEMBER DATED : 10.07.2020 {SC SPS} 2 INDUSTRIAL PERFORATION (INDIA) PVT. LTD EXPENDITURE WHICH IS OF THE ABOVE DESCRIBED NATURE , HAS TO BE ALLOWED AS THAT WHICH IS INCURRED FOR THE PURPOSE OF BUSINESS AS HELD BY THE HONBLE CALCUTTA HIGH CIT VS. BATA INDIA LTD. REPORTED IN [1993] 201 ITR 884 WE DELETE THE DISALLOWANCE AND ALLOW THIS GROUND OF THE ASSESSEE. GROUND NO. 3 IS AGAINST THE ADDITION MADE U/S 68 OF THE ACT. THE ASSESSING OFFICER MADE THE ADDITION BY OBSERVING AS FOLLOWS: - CASH CREDIT U/S 68: - HAS TAKEN AN UNSECURED LOAN OF RS.5,00,000/ - FROM SEPIA VENTURE PVT. LTD. AND PAID INTEREST OF RS.47062/ - A NOTICE U/S 133(6) WAS ISSUED TO ENQUIRE THE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDIT WORTHINESS OF THE LENDER. THE LENDER HAS SENT A REPLY T HE SAID LOAN TRANSACTION HAS NOT BEEN CONFIRMED. SUBSEQUENTLY, A REPLY HAS ALSO BEEN RECEIVED IN WHICH IT HAS BEEN MENTIONED THAT THE AMOUNT WAS WRONGLY TRANSFERRED INTO SHARE INVESTMENT ACCOUNT AND THE SAID AMOUNT OF RS.5,00,000/ - IS STILL LYING AS OUTSTANDING AMOUNT. IT HAS BEEN OBSERVED FROM T H E REPLY RECEIVED ON 17/01/2013 THAT SIGNATURE IS NOT SIMILAR T THE SIGNATURE PUT ON EARLIER REPLY. THEREFORE, TH E SAID REPLY APPEARS TO BE ND HENCE NOT RELIABLE. THEREFORE, THE AMOUNT OF RS.547062 INTEREST PAID ON UNSECURED LOAN) IS TREATED AS CASH CREDIT U/S 68 AND ADDED TO THE TOTAL INCOME. INITIATE PENALTY U/S 271(1)(C) OF THE IT ACT THE LD. CIT(A), IN HIS ORDER, RECORDED THE FACTS THAT THE LOAN WAS RECEIVED BY 2009. THUS, THE CREDIT IN QUESTION DOES NOT PERTAIN TO THE IT PERTAINS TO THE PREVIOUS ASSESSMENT YEAR I.E., 2009 NO ADDITION CAN BE MADE IN THIS YEAR FOR THIS CREDIT U/S. 68 OF THE ACT. N QUESTION AS BAD IN LAW AND ALLOW THIS GROUND OF THE ASSESSEE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. KOLKATA, THE 10 TH DAY OF JULY, 2020. [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER ITA NO. 1518/KOL/2019 ASSESSMENT YEAR: 2010-11 INDUSTRIAL PERFORATION (INDIA) PVT. LTD . , HAS TO BE ALLOWED AS THAT WHICH IS INCURRED FOR THE PURPOSE OF BUSINESS AS HELD BY THE HONBLE CALCUTTA HIGH ITR 884 CAL. HENCE, GROUND NO. 3 IS AGAINST THE ADDITION MADE U/S 68 OF THE ACT. THE ASSESSING FROM SEPIA VENTURE PVT. A NOTICE U/S 133(6) WAS ISSUED TO ENQUIRE THE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDIT WORTHINESS OF THE LENDER. THE HE SAID LOAN TRANSACTION HAS NOT BEEN CONFIRMED. SUBSEQUENTLY, A REPLY HAS ALSO BEEN RECEIVED IN WHICH IT HAS BEEN MENTIONED THAT THE AMOUNT WAS WRONGLY TRANSFERRED INTO SHARE INVESTMENT ACCOUNT AND THE SAID E REPLY RECEIVED ON 17/01/2013 THAT SIGNATURE IS NOT SAID REPLY APPEARS TO BE ND HENCE NOT RELIABLE. THEREFORE, THE AMOUNT OF RS.547062 /- ( IS TREATED AS CASH CREDIT U/S 68 AND THE LD. CIT(A), IN HIS ORDER, RECORDED THE FACTS THAT THE LOAN WAS RECEIVED BY 2009. THUS, THE CREDIT IN QUESTION DOES NOT PERTAIN TO THE IT PERTAINS TO THE PREVIOUS ASSESSMENT YEAR I.E., 2009 -10. NO ADDITION CAN BE MADE IN THIS YEAR FOR THIS CREDIT U/S. 68 OF THE ACT. HENCE, WE N QUESTION AS BAD IN LAW AND ALLOW THIS GROUND OF THE ASSESSEE. SD/- SUDHAKAR REDDY ] ACCOUNTANT MEMBER COPY OF THE ORDER FORWARDED TO: 1. INDUSTRIAL PERFORATION (INDIA) PVT. LTD 327, R.N. GUHA ROAD KOLKATA 700 028 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3.CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 3 INDUSTRIAL PERFORATION (INDIA) PVT. LTD INDUSTRIAL PERFORATION (INDIA) PVT. LTD COMMISSIONER OF INCOME TAX, CIRCLE -5(1), KOLKATA SENT THROUGH E-MAIL. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES ITA NO. 1518/KOL/2019 ASSESSMENT YEAR: 2010-11 INDUSTRIAL PERFORATION (INDIA) PVT. LTD . TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES