D.C.I.T.,Circle-45, Kolkata V. M/s Royal Suiting Emporium, Kolkata

ITA 154/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8624 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-01-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 28-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VINOD KUMAR JAIN
• Keywords: Unexplained investment; Income from undisclosed sources
• Section: 143(2); 69; 144

Judgement Text

ITA NO. 154/KOL/2019 ASSESSMENT YEAR: 2014-2015 CONF IDENT FINANCIAL CONSULTANCY PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT & SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 154/KOL/2019 ASSESSMENT YEAR: 2014-2015 DEPUTY COMMISSIONER OF INCOME TAX,................. .....................APPELLANT CIRCLE-45, KOLKATA, P-7, CHOWRINGHEE SQUARE, AAYAKAR BHAWAN, KOLKATA-700069 -VS.- CONFIDENT FINANCIAL CONSULTANCY PVT. LIMITED,...... ...............RESPONDENT 3, SAKLET PLACE, 2 ND FLOOR, CENTRAL AVENUE, KOLKATA-700072 [PAN: AADCC4061H] APPEARANCES BY: SHRI VIJAY SHANKAR, CIT, D.R., FOR THE APPELLANT SHRI VINOD KUMAR JAIN, FCA, FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : JULY 13, 2020 DATE OF PRONOUNCING THE ORDER : JULY 17, 2020 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT :- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-12, KOLKATA DA TED 04.10.2018 AND THE SOLITARY SUBSTANTIVE GROUND RAISED THEREIN READ S AS UNDER:- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS JUSTIFIED IN COMING TO A CONCLUSION REGARDING THE PERIOD OF INVESTMENT OR NON-INVESTMENT, WITHOUT REGARDING THE MATTER TO THE ASSESSING OFFICER OR CONSULTING THE RECORDS. 2. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY OF 17 DAYS ON THE PART OF THE REVENUE IN FILING THIS APPEAL BEFORE THE TRI BUNAL. IN THIS REGARD, ITA NO. 154/KOL/2019 ASSESSMENT YEAR: 2014-2015 CONF IDENT FINANCIAL CONSULTANCY PVT. LIMITED 2 THE REVENUE HAS MOVED AN APPLICATION SEEKING CONDON ATION OF THE SAID DELAY AND KEEPING IN VIEW THE REASONS GIVEN THEREIN , WE ARE SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR THE DELAY ON THE P ART OF THE REVENUE IN FILING THIS APPEAL BEFORE THE TRIBUNAL. EVEN THE LD . COUNSEL FOR THE ASSESSEE HAS NOT RAISED ANY OBJECTION IN THIS REGAR D. THE SAID DELAY IS ACCORDINGLY CONDONED AND THE APPEAL OF THE REVENUE IS BEING DISPOSED OF ON MERIT. 3. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 30.09.2014 DECLARING A LOSS OF RS.7,021/-. THE SAID RETURN WAS SELECTED FOR SCRUTINY AND A NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 WAS ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE. THERE WAS , HOWEVER, NO COMPLIANCE ON THE PART OF THE ASSESSEE TO THE SAID NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 143(2) OF THE ACT A S WELL AS THE SUBSEQUENT NOTICES ISSUED BY HIM UNDER SECTION 142( 1) OF THE ACT. THE ASSESSING OFFICER, THEREFORE, WAS LEFT WITH NO OPTI ON BUT TO COMPLETE THE ASSESSMENT TO THE BEST OF HIS JUDGMENT UNDER SECTIO N 144 OF THE ACT. IN THE ASSESSMENT SO COMPLETED VIDE AN ORDER DATED 06. 12.2016, THE ASSESSING OFFICER, INTER ALIA , MADE AN ADDITION OF RS.14,14,42,120/- ON ACCOUNT OF INVESTMENT MADE BY THE ASSESSEE-COMPANY IN UNLISTED EQUITY SHARES APPEARING IN THE BALANCE-SHEET AS ON 31.03.2 014 BY TREATING THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE AS THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO EXPLAIN THE SOURCE OF THE S AID INVESTMENT. 4. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 144, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. CIT(APPEALS), IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE-COMPANY THA T THE INVESTMENT IN EQUITY SHARES OF UNLISTED COMPANIES HAVING BEEN DUL Y RECORDED IN THE BOOKS OF ACCOUNT, THE SAME COULD NOT BE ADDED TO TH E TOTAL INCOME OF THE ASSESSEE UNDER SECTION 69 BY TREATING THE SAME AS U NEXPLAINED. IT WAS ITA NO. 154/KOL/2019 ASSESSMENT YEAR: 2014-2015 CONF IDENT FINANCIAL CONSULTANCY PVT. LIMITED 3 ALSO SUBMITTED ON BEHALF OF THE ASSESSEE-COMPANY BE FORE THE LD. CIT(APPEALS) THAT THE SAID INVESTMENT WAS NOT MADE IN THE YEAR UNDER CONSIDERATION AND THE SAME HAVING BEEN MADE IN THE EARLIER YEARS, NO ADDITION COULD BE MADE IN THE YEAR UNDER CONSIDERAT ION BY TREATING THE SAID INVESTMENT AS UNEXPLAINED. TO SUPPORT AND SUBS TANTIATE ITS CASE ON THIS ISSUE, THE ASSESSEE-COMPANY FILED EVIDENCE IN THE FORM OF AUDITED ANNUAL ACCOUNTS FOR THE YEARS ENDED ON 31.03.2012, 31.03.2013, 31.03.2014 AND ALSO THE DETAILS OF INVESTMENT MADE FROM THE FINANCIAL YEARS 2007-08 TO 2013-14. AFTER TAKING INTO CONSIDE RATION THE SAID EVIDENCE FILED BY THE ASSESSEE AS WELL AS THE SUBMI SSIONS MADE IN THE LIGHT OF THE SAID EVIDENCE, THE LD. CIT(APPEALS) DE LETED THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE FOR THE FOLL OWING REASONS GIVEN IN PARAGRAPH NO. 4.2 OF HIS IMPUGNED ORDER:- 4.2. I HAVE CONSIDERED THE FACTS OF THE CASE AND T HE SUBMISSIONS OF THE APPELLANT. THE AO ADDED BACK AN AMOUNT OF RS.14,14,42,120/- AS INCOME FROM UNDISCLO SED SOURCES. THE APPELLANT HAS SHOWN THIS AMOUNT AS INVESTMENT IN ITS BALANCE SHEET. THE APPELLANT ASSE SSEE HAS STATED THAT THIS AMOUNT IS BEING SHOWN IN ITS BALAN CE SHEET IN FY 2011-12. THERE IS NO INVESTMENT IN THIS RELEV ANT FY. IT IS CLEARLY ESTABLISHED FROM THE SUBMISSIONS FILE D BY THE APPELLANT THAT THE IMPUGNED AMOUNT RELATES TO PREVI OUS YEAR 2011-12 AND HENCE THE AO WAS NOT JUSTIFIED IN LAW IN BRINGING THE SAME AMOUNT TO TAX AS INCOME FROM UNDISCLOSED SOURCES IN AY 2014-15. I FIND THAT THE JUDGMENTS RELIED UPON BY THE APPELLANT ARE APPLICAB LE TO THE PRESENT CASE. THIS GROUND OF APPEAL IS ALLOWED . AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LIMITED GRIEVANCE OF THE REVENUE AS PROJECTED IN THE GROUND RAISED IN THIS A PPEAL AS WELL AS FURTHER ARGUED BY THE LD. CIT (D.R.) IS THAT THE AS SESSMENT HAVING BEEN COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 14 4 DUE TO NON- ITA NO. 154/KOL/2019 ASSESSMENT YEAR: 2014-2015 CONF IDENT FINANCIAL CONSULTANCY PVT. LIMITED 4 COMPLIANCE ON THE PART OF THE ASSESSEE, THE LD. CIT (APPEALS) OUGHT TO HAVE GIVEN AN OPPORTUNITY TO THE ASSESSING OFFICER TO VE RIFY THE CLAIM OF THE ASSESSEE MADE FOR THE FIRST TIME BEFORE HIM THAT TH E INVESTMENT IN THE UNLISTED EQUITY SHARES IN QUESTION WAS ACTUALLY MAD E BY THE ASSESSEE- COMPANY IN THE EARLIER YEARS AND NOT IN THE YEAR UN DER CONSIDERATION. KEEPING IN VIEW THE SUBMISSIONS MADE ON BEHALF OF T HE ASSESSEE BEFORE THE LD. CIT(APPEALS) AS WELL AS BEFORE US AND HAVIN G REGARD TO THE MATERIAL AVAILABLE ON RECORD, WE ARE UNABLE TO ACCE PT THIS CONTENTION OF THE REVENUE. FIRST OF ALL, IT IS OBSERVED THAT THE EVIDENCE IN THE FORM OF AUDITED ANNUAL ACCOUNTS FOR THE YEAR UNDER CONSIDER ATION AS WELL AS FOR THE IMMEDIATELY PRECEDING TWO YEARS WAS FILED BY TH E ASSESSEE-COMPANY BEFORE THE LD. CIT(APPEALS) TO ESTABLISH THAT THE I NVESTMENT IN QUESTION IN THE EQUITY SHARES OF UNLISTED COMPANIES WAS MADE BY IT IN THE EARLIER YEARS AND NOT IN THE YEAR UNDER CONSIDERATION. EVEN THE DETAILS OF INVESTMENT MADE BY THE ASSESSEE-COMPANY FROM THE FI NANCIAL YEARS 2007- 08 TO 2013-14 WERE FURNISHED BY THE ASSESSEE-COMPAN Y BEFORE THE LD. CIT(APPEALS), WHICH CLEARLY ESTABLISHED THAT THE IN VESTMENT IN QUESTION WAS NOT MADE BY THE ASSESSEE-COMPANY IN THE YEAR UN DER CONSIDERATION AND THE SAME WAS AN OLD INVESTMENT MADE BY THE ASSE SSEE-COMPANY EVEN PRIOR TO 31.03.2008. HAVING VERIFIED THE CLAIM OF T HE ASSESSEE FROM THIS COGENT DOCUMENTARY EVIDENCE, THE LD. CIT(APPEALS) H AVING POWERS, WHICH ARE CO-TERMINUS WITH THAT OF THE ASSESSING OFFICER, FOUND HIMSELF SATISFIED THAT THE INVESTMENT IN QUESTION WAS MADE BY THE ASS ESSEE IN THE EARLIER YEAR AND NOT IN THE YEAR UNDER CONSIDERATION AND CO NSEQUENTLY HE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SE CTION 69 BY TREATING THE SAME AS UNEXPLAINED BY RELYING ON THE VARIOUS J UDICIAL PRONOUNCEMENTS CITED ON BEHALF OF THE ASSESSEE IN S UPPORT OF ITS CASE. 6. AS RIGHTLY CONTENDED ON BEHALF OF THE ASSESSEE-C OMPANY BEFORE THE LD. CIT(APPEALS) AS WELL AS BEFORE US, THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT CAN BE MADE UNDER SECTION 69 OF THE ACT, WHICH ITA NO. 154/KOL/2019 ASSESSMENT YEAR: 2014-2015 CONF IDENT FINANCIAL CONSULTANCY PVT. LIMITED 5 PROVIDES THAT WHERE IN THE FINANCIAL YEAR IMMEDIAT ELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS W HICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINE D BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLAN ATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANATION OF FERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE A SSESSEE OF SUCH FINANCIAL YEAR. IN THE PRESENT CASE, IT WAS NOT ON LY ESTABLISHED BY THE ASSESSEE-COMPANY ON THE BASIS OF COGENT EVIDENCE TH AT THE INVESTMENT IN QUESTION WAS NOT MADE BY IT IN THE YEAR UNDER CONSI DERATION, BUT EVEN THE FACT THAT THE SAID INVESTMENT WAS DULY RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WAS NEVER DISPUTED EVEN BY THE ASSESSING OFFICER. WE, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED OR DER OF THE LD. CIT(APPEALS) DELETING THE ADDITION MADE BY THE ASSE SSING OFFICER ON ACCOUNT OF THE ALLEGED UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE IN THE UNLISTED EQUITY SHARES AND UPHOLDING THE SAME O N THIS ISSUE, WE DISMISS THIS APPEAL FILED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 17, 2020 . SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER VIC E-PRESIDENT) KOLKATA, THE 17 TH DAY OF JULY, 2020 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-45, KOLKATA, P-7, CHOWRINGHEE SQUARE, AAYAKAR BHAWAN, KOLKATA-700069 (2) CONFIDENT FINANCIAL CONSULTANCY PVT. LIMITED, 3, SAKLET PLACE, 2 ND FLOOR, CENTRAL AVENUE, KOLKATA-700072 (3) COMMISSIONER OF INCOME TAX (APPEALS)-12, K OLKATA; ITA NO. 154/KOL/2019 ASSESSMENT YEAR: 2014-2015 CONF IDENT FINANCIAL CONSULTANCY PVT. LIMITED 6 (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.