Aristo Infracon Pvt. Ltd., Kolkata V. ITO, Ward-9(1), Kolkata, Kolkata

ITA 1700/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6417 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 25-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Assessee Lawyers: P C NAYAK; K K KHEMKA ARS
• Section: 68; 144

Judgement Text

1 ITA NO. 1700/KOL/2016 ARISTO INFRACON (P) LTD., AY 2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VA RKEY, JM] I.T.A. NO. 1700/KOL/2016 ASSESSMENT YEAR: 2012-13 ARISTO INFRACON PVT. LTD. (PAN: AAKCA1648K) VS. INCOME-TAX OFFICER, WD-9(1), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 17.04.2018 DATE OF PRONOUNCEMENT 03.05.2018 FOR THE APPELLANT S/SHRI P. C. NAYAK & K.K. KHEMKA, ARS FOR THE RESPONDENT SHRI SAURABH KUMAR, ADDL. CIT, S R. DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF LD. CIT(A)-16, KOLKATA, DATED 09.08.2016 FOR AY 2012-13. 2. AT THE OUTSET, IT HAS BEEN BROUGHT TO OUR NOTICE BY THE LD AR OF THE ASSESSEE THAT THE LD. CIT(A) HAS NOT APPLIED HIS MIND AND HAS PASSED A CRYPTIC ORDER WITHOUT CONSIDERING THE MATERIAL PLACED ON RECORD. IT WAS BROUGHT TO OUR N OTICE THAT THE IMPUGNED ORDER OF THE LD. CIT (A) IS A NON-SPEAKING ORDER AND SINCE THE LD. C IT(A) HAS NOT DISCUSSED THE MATTER ON MERITS AND WITHOUT EVALUATING THE EVIDENCE PLACED O N RECORD MAKES THE ORDER BAD IN LAW. WE NOTE THAT THE LD. CIT(A) HAS PASSED THE ORDER AS UNDER: 5. I HAVE ALSO PERUSED THE BALANCE SHEET AND OTHER DETAILS FILED BY THE AR. IT IS PERTINENT TO NOTE THAT THERE IS NO REAL BUSINESS ACTIVITY IN THE SE COMPANIES. ALL APPEAR AS MERE PAPER COMPANIES, MADE ONLY FOR GIVING SHARE CAPITAL ON PR EMIUM. HENCE, MERE FILING OF THE DOCUMENTS DO NOT HELP THE CASE OF THE ASSESSEE COMP ANY. AFTER PERUSAL OF THESE DOCUMENTS, CREDITWORTHINESS IS NOT ESTABLISHED. EVEN IDENTITY AND GENUINENESS OF TRANSACTION HAVE NOT BEEN ESTABLISHED BEFORE THE AO. HONBLE CALCUTTA HIGH COURT IN THE RECENT JUDGMENT, PASSED DT. 13.05.2016 IN THE CASE OF RAJMANDIR ESTATES PVT. LTD. VS. DCIT-III, KOLKATA HAS CONFIRMED THE ADDITION MADE BY THE AO U/S. 68 OF THE I. T. ACT, WHEN SUBSCRIBING COMPA NIES ARE JUST PAPER COMPANIES. HONBLE CALCUTTA HIGH COURT WENT INTO ALL THE JUDGMENTS, CI TED BY THE ASSESSEE, AND CONFIRMED THE STAND OF THE DEPARTMENT THAT THESE PAPER COMPANIES JUST GIVE ENTRIES, AND THEY DO NOT DO ANY REAL BUSINESS. HONBLE CALCUTTA HIGH COURTS JUDGM ENT IS DIRECTLY APPLICABLE IN THIS CASE. 2 ITA NO. 1700/KOL/2016 ARISTO INFRACON (P) LTD., AY 2012-13 HENCE, THE ADDITION MADE BY THE AO IS CONFIRMED AND THE APPEAL OF THE ASSESSEE IS DISMISSED. 3. WE NOTE THAT THE AO HAS MADE ADDITION U/S. 144 O F THE ACT, WHICH IS THE BEST JUDGMENT ASSESSMENT SINCE ASSESSEE DID NOT PARTICIPATE DURING THE ASSE SSMENT PROCEEDINGS. ON APPEAL, THE LD. CIT(A) HAS TAKEN NOTE OF THE FAC T THAT THE ASSESSEE HAS FILED DETAILED PAPER BOOK BEFORE HIM WHICH WAS SENT TO THE AO FOR REMAND REPORT AND COMMENTS WERE SOUGHT FOR BY LD CIT(A) FROM AO VIDE LETTERS DATED 06.04.2016, 22.04.2016 AND 13.06.2016. HOWEVER, THE LD. CIT(A) NOTES THAT NO COMMENTS WERE RECEIVED FROM THE AO, THEREFORE, HE HAS EXAMINED THE DOCUMENTS SUBMITTED BY THE ASSESSE E BEFORE HIM AND HAS PASSED THE IMPUGNED ORDER. WE NOTE THAT ON 09.08.2016 (WITHIN TWO MONTHS AFTER CALLING FOR REMAND REPORT FROM AO) WITHOUT THE AID OF REMAND REPORT FR OM THE AO, THE LD. CIT (A) HAS CONCLUDED THAT ALL THE SUBSCRIBING COMPANIES FROM W HOM CAPITAL HAS BEEN TAKEN ARE PAPER COMPANIES AND THEY HARDLY DO ANY BUSINESS THROUGHOU T THE YEAR. AFTER NOTICING THAT M/S. ANJIPUTRA SALES PVT. LTD. HAS GOT TOTAL INCOME OF R S.15,081/- CALENDULA VINCON LTD. HAS GOT TOTAL INCOME OF RS.26,670/-. PPJ HEAVY GEAR PVT. LT D. HAS GOT TOTAL INCOME OF RS.40,236/-, ACCORDING TO LD. CIT(A), ALL THE SUBSCRIBING COMPAN IES ARE VIRTUALLY PAPER COMPANIES AND HAVE GOT NO CREDITWORTHINESS TO SUBSCRIBE HUGE AMOU NT AS CAPITAL. THEREAFTER THE LD. CIT(A) AFTER GOING THROUGH THE BANK STATEMENTS, WAS OF THE OPINION THAT THERE IS HARDLY ANY ACTIVITY OTHER THAN THE DEPOSIT OF CHEQUES AND FINA LLY THE SUBSCRIPTION IS MADE. AND LD. CIT (A) NOTED THAT NO BUSINESS ACTIVITY IS CARRIED OUT BY THESE SUBSCRIBING COMPANIES. AFTER HAVING MADE THE SAID OBSERVATIONS THE LD. CIT (A) H AS PASSED THE IMPUGNED ORDER, SUPRA. WE NOTE THAT THE LD. CIT (A) HAS PASSED THE IMPUGNE D ORDER, AFTER TAKING NOTE THAT ASSESSEE HAD FILED DETAILED PAPER BOOKS BEFORE HIM AND THE A O HAS NOT RENDERED THE REMAND REPORT SOUGHT BY HIM. WHEN THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO U/S. 144 OF THE ACT, AND DURING APPEAL WHEN ASSESSEE HAS FURNISHED DETAI LED PAPER BOOK TO DISCHARGE THE ONUS CASTED UPON IT, IN THE INTEREST OF JUSTICE AND FAIR PLAY, THE LD. CIT (A) OUGHT TO HAVE OBTAINED THE REMAND REPORT FROM AO BEFORE PROCEEDING TO PASS THE IMPUGNED ORDER. TAKING INTO CONSIDERATION THE FACT THAT THE ASSESSMENT ORDER WA S PASSED BY AO U/S. 144 OF THE ACT AND SINCE THE ASSESSEE HAS FILED DETAILED PAPER BOOK IN ITS DEFENCE, THE LD. CIT (A) SHOULD HAVE INSISTED THAT AO GIVE HIS REMAND REPORT BEFORE DISP OSING THE APPEAL ON MERIT. THE IMPUGNED ORDER OF THE LD. CIT(A) IS, THEREFORE, SET ASIDE AND THE APPEAL REMANDED BACK TO LD. CIT(A), TO DECIDE THE APPEAL ON MERIT AFTER CAL LING FOR REMAND REPORT FROM THE AO. NEEDLESS TO SAY THE ASSESSEE TO BE PROVIDED ADEQUAT E OPPORTUNITY TO REBUT THE REMAND REPORT 3 ITA NO. 1700/KOL/2016 ARISTO INFRACON (P) LTD., AY 2012-13 OF AO AND AFTER HEARING THE ASSESSEE, THE LD. CIT ( A) TO PASS A SPEAKING ORDER. APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 3 RD MAY, 2018. SD/- SD/- (J. SUDHAKAR REDDY) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3RD MAY, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ARISTO INFRACAON PVT. LTD., P-200, 1 ST FLOOR, SCHEME-IV, KOLKATA-700 010. 2 RESPONDENT ITO, WARD-9(1), KOLKATA. 3. THE CIT(A) , KOLKATA. 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECRETARY