M/s. Cemfil Enterprises Ltd., , Kolkata V. ITO, Ward - 6(1), Kolkata , Kolkata

ITA 1743/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2787 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 28-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K TIWARI
• Assessee Lawyers: SUJAY SEN; S JHAJHORIA
• Keywords: Unexplained cash credit
• Section: 133(6); 131; 68; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.1743/KOL/2017 ASSESSMENT YEAR:2007-08 M/S CEMFIL ENTERPRISES LTD. C/O M/S SALARPURIA JAJAODIA & CO. 7, CHITTARANJAN AVENUE, KOLKATA-72 [ PAN NO.AAACV 7056 J ] / V/S . INCOME TAX OFFICER, WARD-6(1), AAYAKAR BHAWAN, 5 TH FLOOR, P- 7, CHOWRINGHEE SQUARE, KOLKATA-69 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI S. JHAJHORIA & SHRI SUJAY SEN, AR /BY RESPONDENT SHRI A.K. TIWARI, CIT-DR /DATE OF HEARING 26-07-2018 /DATE OF PRONOUNCEMENT 29-08-2018 /O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2007-08 CALLS INTO QUESTION CORRECTNESS OF THE COMMISSIONER OF INCOME TAX (APPE ALS)-23, KOLKATAS EX PARTE ORDER DATED 02.05.2017, PASSED IN CASE NO.143/CIT(A )-23/W-6(1)/16-17, UPHOLDING THE ASSESSING OFFICERS ACTION ADDING ITS SHARE CAP ITAL OF 104,31,70,000/- TO BE UNEXPLAINED U/S 68 IN ASSESSMENT ORDER DATED 20.03. 2015, INVOLVING PROCEEDINGS U/S 144/263/143(3) OF THE INCOME TAX ACT, 1961; IN SHOR T THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. NO. 1743/KOL/2017 A.Y. 2007-08 M/SS CEMFIL ENTERPRISES LTD. VS. ITO WD-6(1), KOL. PAGE 2 2. WE NOTICE AT THE OUTSET THAT BOTH THE LOWER AUTH ORITIES HAVE ADDED ASSESSEES SHARE CAPITAL OF 104,31,70,000/- RECEIVED IN THE RELEVANT PREVIOUS Y EAR TO BE UNEXPLAINED ON ACCOUNT OF ITS ALLEGED FAILURE IN P ROVING IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE INVESTORS CONCERNED. THE AS SESSING OFFICER HAD EARLIER FRAMED THE RE-ASSESSMENT IN QUESTION ON 07.05.201 ASSESSIN G ASSESSEES TOTAL TAXABLE INCOME AT 1,21,521/- AGAINST THE RETURNED INCOME OF 96,051/-. THE CIT EXERCISED HIS REVISION JURISDICTION VESTED U/S. 263 OF THE ACT TH EREAFTER AND ISSUED DIRECTIONS DATED 28.03.2013 TO THE ASSESSING OFFICER FOR FRAMING THE ABOVE ASSESSMENT AFRESH AFTER CARRYING OUT THROUGH DETAILED ENQUIRIES OF THE SHAR E APPLICATION MONEY CONCERNED. HE ACCORDINGLY TREATED THE EARLIER ASSESSMENT TO BE LA CKING NECESSARY ENQUIRIES TO BE A FIT CASE FOR EXERCISING REVISION JURISDICTION AS THE SA ME WAS ERRONEOUS CAUSING PREJUDICE TO THE INTEREST OF THE REVENUE. 3. WE NOTICE THAT THE ASSESSING OFFICER THEREAFTER TOOK UP CONSEQUENTIAL PROCEEDINGS. HE ISSUED SECTION 131 SUMMONS TO BOTH ASSESSEE AS WELL AS ALL THE INVESTOR PARTIES CONCERNED. HE ALLEGED IN ASSESSMEN T ORDER DATED 20.03.2014 THAT NONE OF THEM APPEARED SO AS TO SATISFY THE RELEVANT PARA METERS OF IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SHARE PREMIUM @ 990/- PER S HARE IN ISSUE. HE THEREFORE TREATED THE ABOVE SUM TO BE UNEXPLAINED AS WELL AS ITS OWN MONEY INTRODUCED IN THE GARB OF SHARE CAPITAL INCLUDING VERY HEFTY PREMIUM THEREUPO N. SUFFICE TO SAY, THE CIT(A) HAS UPHELD THE SAME IN HIS LOWER APPELLATE ORDER PASSED EX PARTE . 4. BOTH THE LEARNED COUNSEL REITERATE THEIR RESPECT IVE STANDS AGAINST AND IN SUPPORT OF IMPUGNED UNEXPLAINED CASH CREDITS ADDITION IN TH E NATURE OF SHARE CAPITAL / PREMIUM. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEME NTLY CONTENDS THAT ASSESSEE HAD RECEIVED THE ABOVE PREMIUM AS A DEVICE FOR PLOU GHING BACK ITS OWN MONEY THROUGH VERY EXORBITANT PREMIUM @ 990/- PER SHARE. HE HIGHLIGHTS THAT THE ASSESSING OFFICER AS WELL AS CIT(A) HAVE FINALIZED EX PARTE PROCEEDINGS IN THE EVENT OF ASSESSEE NOT FILING ANY DETAILS AT ALL IN SUPPORT. WE FIND N O REASON TO CONCUR WITH REVENUES INSTANT ARGUMENTS. IT EMERGES FIRST OF ALL FROM PAG E 1 TO 3 THAT THE ASSESSEE HAD CHANGED ITS ADDRESS AS PER THE MINISTRY OF CORPORAT E AFFAIRS DETAILS. COUPLED WITH THIS, IT EMERGES THAT ASSESSEE AS WELL ITS INVESTORS HAD VERY WELL RESPONDED TO SECTION 133(6) NOTICE BY FILING THEIR RESPECTIVE BANK STATEMENTS, BALANCE-SHEET, PROFIT AND LOSS NO. 1743/KOL/2017 A.Y. 2007-08 M/SS CEMFIL ENTERPRISES LTD. VS. ITO WD-6(1), KOL. PAGE 3 ACCOUNT, INCOME TAX RETURNS AND CONFIRMATIONS THROU GH INSPECTOR OF INCOME TAX DEPARTMENT. THE ASSESSEE HAS COMPILED ALL THESE DET AILS IN PAPER BOOK RUNNING INTO MORE THAN 180 PAGES. WE FIND THAT ALL THESE VOLUMIN OUS MATERIALS FILED BEFORE THE ASSESSING OFFICER HAVE NOWHERE BEEN CONSIDERED IN E ITHER OF THE LOWER PROCEEDINGS. WE THEREFORE CONCLUDE THAT THE ASSESSEE DESERVES ON E MORE INNINGS BEFORE THE ASSESSING OFFICER TO PROVE IDENTITY, GENUINENESS AN D CREDITWORTHINESS OF ITS SHARE APPLICATION / PREMIUM INVESTORS IN QUESTION. WE ACC ORDINGLY RESTORE THE INSTANT LIS BACK TO THE ASSESSING AUTHORITY FOR RE-EXAMINATION OF THE ENTIRE ISSUE AS PER LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE AS SESSEE. WE MAKE IT CLEAR THAT IT SHALL BE VERY MUCH OPEN TO THE ASSESSING OFFICER TO CONDUCT HIS INDEPENDENT INQUIRIES IN TUNE WITH THE CITS U/S 263 REVISION DIRECTIONS (SUPRA). 5. THIS ASSESSEES APPEAL IS ACCEPTED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 29/08/2018 SD/- SD/- ( !) (#$ !) (P.M.JAGTAP) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP-SR.PS % - 29/08/2018 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S CEMFIL ENTERPRISES LT. C/O M/S SALAR PURIA JAJODIA & CO. 7, CHITTAR ANJAN AVENUE, KOLKATA-72 2. /RESPONDENT-ITO WARD-6(1), 5 TH FLOOR,P-7 CHOWRINGHEE SQ. KOLKATA-69 3. ( + / CONCERNED CIT 4. + - / CIT (A) 5. , $$( , ( / DR, ITAT, KOLKATA 6. 0 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO (,