ITO, Ward - 6(1), Kolkata , Kolkata V. M/s. Carelink Vyapaar Pvt. Ltd., , Kolkata

ITA 1752/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6045 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 31-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RABIN CHOWDHURY
• Keywords: Unexplained cash credit; Source of fund; Additional evidence; Onus to prove
• Section: 143(3); 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S. S. GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1752/KOL/2017 ( / ASSESSMENT YEAR: 2012-13) ITO, WARD-6(1), KOLKATA P-7, CHOWRINGHEE SQUARE, 6 TH FLOOR, KOLKATA 700 069. VS. M/S CARELINKVYAPAARPVT. LTD. 7, MANGOE LANE, 1 ST FLOOR, ROOM NO.103, KOLKATA-1. ./ ./PAN/GIR NO.: AABCC 0963 G (ASSESSEE) .. (RESPONDENT) ASSESSEE BY :SHRI RABIN CHOWDHURY, ADDL. CIT, SR. DR RESPONDENT BY : SHRI RAJEEVA KUMAR, ADVOCATE / DATE OF HEARING : 27/11/2018 /DATE OF PRONOUNCEMENT : 23 /01/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTAINI NG TO ASSESSMENT YEAR 2012-13, IS DIRECTED AGAINST AN ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-23, KOLKATA IN APPEAL NO.138/CIT(A)-2 3/WD-6(1)/16-17, DATED 05.05.2017, WHICH IN TURN ARISES OUT OF AN ASSESSME NT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 17.03.2015. 2. THE GRIEVANCES RAISED BY THE REVENUE ARE AS FOLL OWS: 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED INOVERLOOKING THE FACTS THAT THE AO DID NOT ENQUIRE INTO THE GENUINENESS OF THE TRANSACTION OF SHARECAPITAL AND SHARE PREMIUM THOROUGHLY BUT RE LIED ON EXTRANEOUS AND IRRELEVANT FACTS ANDCONSIDERATION AND FURTHER DID NOT EXAMINE MONEY TRAIL OF THE PAYMENTS MADE IN SHARE CAPITAL ANDSHARE PREMIUM. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW THE LD. CIT(A) HAS ERRED INNOT FOLLOWING THE DECISION BY THE JURISDICT IONAL HIGH COURT IN THE CASE OF RAI MANDIR ESTATE PRIVATELIMITED REPORTED IN 70 TAXMANN 124(CAL) AND APPROVED BY THE HON'BLE APEX COURT IN THE DECISION CITED AS 2017-TI OL-13-SC-IT DATED 09.01.2017. ITA NO.1752/KOL/2017 M/S CARELINKVYAPAAR PVT. LTD. ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 3. THAT THE ASSESSEE CRAVES FOR LEAVE TO ADD, DELET E AMEND OR MODIFY ANY GROUND BEFORE OR AT THETIME OF APPELLATE PROCEEDINGS.' 3. THE BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSES SEE COMPANY FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2012-13,DECLARING TOTAL INCOME AT NIL. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY U/S 143(2) OF THE AC T AND THE ASSESSING OFFICER COMPLETED ASSESSMENT ON 17.03.2015 MAKING ADDITION U/S 68 OF THE ACT TO THE TUNE OF RS.4,73,20,000/-. DURING THE ASSESSMENT PROCEEDI NGS, THE ASSESSEE SUBMITTED THE BOOKS OF ACCOUNTS INCLUDING THE RETURN OF INCOM E OF THE ASSESSEE COMPANY. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS ISSUE D SHARES TO DIFFERENT PRIVATE LIMITED COMPANIES AGAINST HIGH PREMIUM. THEREFORE, IN ORDER TO INQUIRY THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF THE S HARE APPLICANTS, THE ASSESSING OFFICER ISSUED SUMMONS TO THE DIRECTORS OF THE ASSE SSEE COMPANY AS WELL AS INVESTOR COMPANIES. IN ORDER TO CONDUCT ENQUIRY, TH E SUMMONS U/S 131OF INCOME- TAX ACT, 1961 WERE SENT TO THE DIRECTORS OF THEASSE SSEE COMPANY AS WELL AS DIRECTORS OF INVESTING COMPANIES. IN RESPONSE TO TH E SUMMONS ALL THE ADDRESSEE FILED THE SUBMISSION BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER NOTED THAT SHEAVES OF PAPER DOCUMENTS WEREREADILY PRODUCED BUT WHEN A SUMMON WAS ISSUED THE RESPONSIBLE PERSONS CONVENIENTLY DISAPPEAR. ONL Y THE ASSESSEE KNOWS THE INTRICACIES OF ITS ACCOUNTS. IT IS FOR THE ASSESSEE TO PROVE ITS CLAIM OF SHARE CAPITAL/ APPLICATION MONEY INTRODUCTION AND ITS AFFAIRS IN R ESPECT OF ITS ACCOUNTS. MERELY DUMPING PAPERS AND DOCUMENTS ON THE TABLE OF THE AS SESSING AUTHORITY DOES NOT IN ANY WAY MEAN COMPLIANCE. THE BURDEN OF PROOFCANNOT BE SHIFTED ON THE REVENUE BY CART LOADS OF DOCUMENTS. THE DOCUMENTS SUBMITTED MUST BE EXPLAINED. AS NONE APPEARED AGAINST THE SUMMONS ISSUED THEREFORE, AO W AS OF THE VIEW THAT THE ASSESSEE COMPANY WASINCORPORATED HAVING NO VISIBLE BUSINESS ACTIVITY AND RAISED SHARE CAPITAL AND / ORPREMIUM IN ORDER TO ROUTE ITS UNDISCLOSED MONEY TO THE DESIRED END OF THE BENEFICIARY TAKING RECOURSE OF T HE CORPORATE VEIL. THE ASSESSEE COMPANY ROTATED ITS UNDISCLOSEDMONEY LAYERING THROU GH DIFFERENT BODY CORPORATE IN DIFFERENT STRUCTURED WEB TOOBFUSCATE INQUIRY. ITA NO.1752/KOL/2017 M/S CARELINKVYAPAAR PVT. LTD. ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 4. THE AO FURTHER NOTED THAT A PLAIN READING OF THE RETURNS OF INCOME OF DIFFERENT COMPANIES REVEALED THE FOLLOWING, I) THEY ARE IN TH EIR INITIAL YEARS OF OPERATION, II) ARE BASICALLY INVESTMENT COMPANIES, III)INCOMETAXRE TURNS SHOWANOMINALINCOME/LOSS, IV) NO BUSINESS ACTIVITY, AND V) INVESTOR COMPANIES RECEIVED SHARE CAPITAL WITH HUGE PREMIUM WAS IN TUR N INVESTED IN THE ASSESSEE COMPANY AND SIMILAR OTHER COMPANIES AS WELL.THEREFO RE, THE AO WAS OF THE VIEW THAT IT WAS IMPORTANT TO UNDERSTAND AS TO HOW THE I NVESTMENT DECISIONS THAT TOO AT A HUGE PREMIUM WAS TAKEN, WHETHER THE APPLICANTS DID NOT HAVE THEIR OWN PROFIT MAKING APPARATUS TO INVEST. BESIDES, THE ASSESSEE A ND APPLICANT COMPANIES DID NOTAPPEAR BEFORE THE AO. THEREFORE, UNDER THE CIRC UMSTANCES AND IN THE LIGHT OF PREPONDERANCE OFPROBABILITY AND NORMAL HUMAN BEHAVI OR THE AO TREATED THE THE ENTIRE AMOUNT AS UNEXPLAINED CREDIT, AND MADE ADDIT ION U/S 68 TO THE TUNE OF RS. RS.4,73,20,000/- [SHARE CAPITAL OF RS. 47,32,000/- + PREMIUM OF RS.4,25,88,000/-]. 5. AGGRIEVED BY THE STAND SO TAKEN BY THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THE LD CIT(A), AFTER CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFICER AND REPLY OF THE ASSESSEE IN RESPECT OF THE REMAND REPORT, CAME ON THE CONCLUSION THAT IN THE ASSESSEE`S CASE, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS HAVE BEEN PROVE D BY THE ASSESSEE COMPANY. THEREFORE, LD CIT(A) DELETED THE ADDITION OF RS. 4, 73,20,000/-. 6. AGGRIEVED BY THE ORDER OF THE LD CIT(A), THE REV ENUE IS IN APPEAL BEFORE US.BEFORE US, THE LD. DR FOR THE REVENUE HAS PRIMAR ILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER, WHICH WE HAVE ALREADY NOT ED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY.ON THE O THER HAND,LD COUNSEL FOR THE ASSESSEE DEFENDED THE ORDER PASSED BY THE CIT(A). 7. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIV AL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, WE NOTE THAT IN THE Y EAR UNDERCONSIDERATION THE ASSESSEE COMPANY HAD RAISED SHARE CAPITAL OF RS.4,6 4,50,000/-FROM 14 PARTIES. ITA NO.1752/KOL/2017 M/S CARELINKVYAPAAR PVT. LTD. ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 4 44 4 SHARE APPLICATION MONEY OF RS.3,70,000/- AND RS.5,0 0,000/-WAS RECEIVED FROM TWO PARTIES IN THE FINANCIAL YEAR 2009-10 AND FINANCIAL YEAR 2010-11RESPECTIVELY: HOWEVER, THE SHARES WERE ISSUED AGAINST THE AGGREGA TE RECEIPT OF RS.4,73,20,000/- DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. WE NOTE THAT DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED BEFORE THE LD C IT(A),THE DOCUMENTS AND EVIDENCES WHICH WERE FORWARDED TO THE ASSESSING OFF ICER FOR HIS EXAMINATION AND CALLING FOR THE REMAND REPORT. THE AO FURNISHED HI S REMAND REPORT DATED 10.03.2017, WHEREIN HE STATED THATTHE ASSESSEE, DUR ING THE YEAR, ISSUED 4,73,200 NUMBER OF SHARES OF RS.10/- EACH AT THEPREMIUM OF R S.90/- PER SHARE AND THUS RAISED CAPITAL OF RS.4,73,20,000/-. IN THECOURSE OF THE REMAND PROCEEDINGS, THE AO ISSUED SUMMONS U/S.131 OF THE ACT TO THE ASSESSEE.I N RESPONSE TO SUMMONS U/S 131 OF THE ACT, SHRI BENI PRASAD LAHOTI, ONE OF THE DIRECTORS OF THE ASSESSEE,APPEARED BEFORE AO ON 09.03.2017 AND PRODU CED RELEVANT DETAILS AND DOCUMENTS INSUPPORT OF RECEIPT OF SHARE APPLICATION MONEY. THE AO FURTHER STATED THAT HEEXAMINED THOSE DETAILS/DOCUMENTS WITH THE DO CUMENTARY EVIDENCES SUBMITTED BYTHE ASSESSEE AND ALSO WITH THE REPLIES SUBMITTED BY THE SHARE APPLICANTS INRESPONSE TO THE NOTICES ISSUED TO THEM U/S 133(6) OF THE INCOME TAX ACT, 1961DURING THE ASSESSMENT PROCEEDINGS.THE AO, IN THE REMAND REPORT,ALSO STATED THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEEWERE SUBJECTED TO STATUTORY AUDIT AND ALL THE TRANSACTIONS CARRIED OU T DURING THEYEAR WERE REPORTED IN THE RETURN. IT WAS ALSO STATED THAT THE SHARE APPLI CANTS AREPAN HOLDERS, THEY FILED THE ITR FOR THE AY 2012-13 SHOWING FRESH INVESTMENT S. THE AO FURTHER STATED THAT SHARE APPLICANTS HAD SUFFICIENT FUND FOR THE PURPOS EOF INVESTMENT AND THE TRANSACTIONS WEREMADE THROUGH PROPER BANKING CHANNE L. THEAO, ULTIMATELY, CONCLUDED THAT THE RECEIPT OF CAPITAL ALONGWITH PRE MIUM DURING THEYEAR WAS LEGALLY IN ORDER AND THERE WAS NO DEFICIENCY IN EVIDENCE. 8. WE NOTE THAT SHARE APPLICATION MONEY OF RS.3,70, 000/- AND RS. 5,00,000/- WERE RECEIVED FROM TWO PARTIES IN THE FINANCIAL YEAR 20 09-10 AND FINANCIAL YEAR2010- 11, RESPECTIVELY BUT THE SHARES FOR THESE SUM WERE ALLOTTED IN THE YEAR UNDER CONSIDERATION. TO APPRECIATE THE LEGAL POSITION, SE CTION 68 OF THE ACT IS EXTRACTED BELOW: ITA NO.1752/KOL/2017 M/S CARELINKVYAPAAR PVT. LTD. ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 5 55 5 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF ON ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, I N THE OPINION OF THE [ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE C HARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR'. WE NOTE THAT SECTION 68 OF THE ACT PROVIDES FOR A D EEMING FICTION OF TREATING THE SUMFOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINT AINED FOR ANY PREVIOUS YEAR BEINGCHARGED TO INCOME-TAX AS THE INCOME OF THE ASS ESSEE OF THAT PREVIOUS YEAR,PROVIDED (I) THE ASSESSEE OFFERS NO EXPLANATIO N AS TO THE NATURE AND SOURCE OF THECREDITS, OR (II) THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT, IN THE OPINION OF THE AO, SATISFACTORY.FROM THE ABOVE PROVISIONS OF S ECTION 68 OF THE ACT, IT IS ABUNDANTLY CLEAR THAT IN THE CASES WHERE THE CREDIT DOES NOT RELATE TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THAT IS, A.Y.2012-13, AND HAVING BEENBROUGHT FORWARD FROM THE EARLIER ASSESSMENT YEARS, IT CANNOT BE ADD ED DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, EVENWHEN IT IS UNEXPLAINED. AS SUCH, THE ADDITION FOR THE SHARE APPLICATION MONEY OF RS.8,70,000/- (RS.3,70,0 00 + RS. 5,00,000) RECEIVED IN THE A.Y. 2010-11 AND 2011-12 RESPECTIVELY, CANNOT B E MADE U/S 68 OF THE ACT IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THAT IS, A .Y. 2012-13. FOR THAT, WE RELY ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN IT O VS. CH. ATCHAIAH (1996) 218 ITR 239 (SC) WHEREIN IT WAS HELD THAT THE INCOM E SHOULD BE ASSESSED ON THE RIGHT PERSON, RIGHT YEAR AND IT SHOULD BE ON THE RI GHT INCOME. FROM THE AFORESAID DECISION OF THE HONBLE SUPREME COURT ONLY THE RIGH T PERSON ALONE IS LIABLE TO BE TAXED IN THE RIGHT ASSESSMENT YEAR. THEREFORE, THE ADDITION OF RS. 8,70,000/- NEEDS TO BE DELETED. 9. WE NOTE THAT THE NOTICES U/S.133(6) ISSUED TO TH ESHAREHOLDERS WERE SERVED ON THEIR RESPECTIVE ADDRESS BY THE POSTAL AUTHORITIES ANDIN RESPONSE, THEY CONFIRMED THE TRANSACTIONS AND ALSO SUBMITTED THE DETAILS OF THESOURCE OF FUNDS FOR MAKING INVESTMENTS. HENCE, THE IDENTITY & CREDITWORTHINESS OFTHE SHAREHOLDERS ARE NOT IN DOUBT. THERE IS NO DOUBT OVER THE GENUINENESS OF TH ETRANSACTIONSAS WELL SINCE ALL THE SHARE APPLICATION MONEY WAS RECEIVED THROUGH BA NKING CHANNEL. WE NOTE THAT ITA NO.1752/KOL/2017 M/S CARELINKVYAPAAR PVT. LTD. ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 6 66 6 IN THE REMAND REPORT, THE AO ADMITTED THAT HE EXAMI NED THE DIRECTOR OF THE ASSESSEE AND THE RELEVANT DETAILS/DOCUMENTS BUT FOU ND NOTHING ADVERSE TO THE CONTENTION THAT THE SHARE APPLICATION MONEY OF RS.4 ,73,20,000/- RAISED BY THE ASSESSEE WAS GENUINE. FOR THAT WE RELY ON THE FOLLO WING JUDGMENTS: (A).IN CIT VERSUS NISHAN INDO COMMERCE LTD (2014) L 0L DTR (CAL) 0413, THECALCUTTA HIGH COURT DELETED THE ADDITION MODE U/ S.68 OF THE ACT FOR THE SHARE CAPITAL RAISED DURING THE YEAR INTER-ALIA HOLDING T HAT ONCE THE IDENTITY AND OTHERRELEVANT PARTICULARS OF SHAREHOLDERS ARE DISCL OSED, IT IS FOR THESE SHAREHOLDERS TOEXPLAIN SOURCE OF THEIR FUNDS AND NOT FOR ASSESSE E-COMPANY TO SHOW WHEREFROMTHESE SHAREHOLDERS OBTAINED FUNDS. (B) IN CIT VERSUS M/S. DATAWARE PRIVATE LIMITED [IT AT NO. 263 OF 2011], THECALCUTTA HIGH COURT DISMISSED THE APPEAL OF THE REVENUE HOLDING AS UNDER: AFTER HEARING THE LEARNED ADVOCATE FOR THE ASSESSE E AND AFTER GOING THROUGH THE MATERIALS ON RECORD, WE ARE OF THE VIEW THAT NO SUBSTANTIAL QUES TION OF LAW IS INVOLVED IN THIS APPEAL.BOTH THE COMMISSIONER OF INCOME TAX (APPEAL) AND THE TRIBUNA L BELOW HAVE IN DETAILS CONSIDERED THE FACT THAT THE SHARE APPLICATION MONEY WAS PAID BY ACCOUN T PAYEE CHEQUE, THE CREDITOR APPEARED BEFORE THE ASSESSING OFFICER, DISCLOSED ITS PAN NUMBER AND ALSO OTHER DETAILS OF THE ACCOUNTS BUT IN SPITE OF THAT THE ASSESSING OFFICER DID NOT ENQUIRE FURTH ER FROM THE ASSESSING OFFICER OF THE CREDITOR BUT INSTEAD, HIMSELF PROCEEDED TO CONSIDER THE PROFIT A ND LOSS ACCOUNT OF THE CREDITOR AND OPINED THAT HE HAD SOME DOUBT ABOUT THE GENUINENESS OF SUCH ACC OUNT. IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSIN G OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFTER GETTING TH E PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE ASSESSI NG OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINENESS OF TH E TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER OF THE CREDI TOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSESSING OFFICER HIMSELF COULD NOT ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMI TTED BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OFFICER OF THE ASS ESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND THE GENUINENE SS OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX(APPEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH ARE REQUIRED TO BE FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIND NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AU THORITIES. THE APPEAL IS THUS DEVOID OF ANY SUBSTANCE AND IS SUMMARILY DISMISSED. (C ). CIT VS. MITUL KRISHNA KAPOOR (ITA NO.333/2009) THE CALCUTTA HIGH COURT VIDE ORDER DT. 09.06.2016 DISMISSED THE APPEAL OF T HE REVENUE HOLDING AS UNDER: ITA NO.1752/KOL/2017 M/S CARELINKVYAPAAR PVT. LTD. ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 7 77 7 ADDITION OF A SUM OF RS.33.90 LAKHS WAS MADE ON T HEBASIS THAT THE ASSESSEE HAD ALLEGEDLY TAKEN LOAN FROM THE CORPUSFUND, WHICH THE ASSESSEE HAS DENIED. THE ASSESSING OFFICER P ROCEEDED TO ADD THIS SUM OFRS.33.90 UNDER SECTION 68 . C.I.T.(A) HAS CLEARLY HELD THAT THEREIS NO KNOWLE DGE AS TO WHAT THE CORPUS FUND IS. THE C.I.T. ALSOOPINED THAT THERE WAS NO M ATERIAL ON THE BASIS OF WHICH T HE AFORESAID ADDITION COULD BE MADE AND ON THAT BASIS THE C.I.T.DELETED THE ADDITION. THE LEARNED TRIBUNAL CONCURRED WITH SUCHFINDING OF THE C.I.T.(A ). AS REGARDS OTHER SUM OF RS.72,57,686/- IS CONCERNED,THE ADDITION WAS FOUND ALTOGETHER UNMERIT ORIOUS BECAUSE 'ALL THESEAMOUNTS ARE PAID BY CHEQUE OUT OF ACCOUNTED FUND IN THE REGULARBOOKS OF ACCOUNTS. A COPY OF THE CONFIRMATION ALONG WITH THE BANKSTATEMENT IN RESPECT OF THE ASSESSEE'S ACCOUNTS WITH BHARATOVERSEAS BANK IS FILED, DULY CONFIRMED BY SHR I A E MEDHORA ONBEHALF OF M/S. NOVROJEE& CO. A COPY OF THE BANK ACCOUNT DISCLOSEDAND THE REG ULAR BOOKS OF ACCOUNTS WERE FILED BEFORE THE LD.CIT(A)WHICH WERE ALSO MADE AVAILABLE BEFORE THE AO. BASED ON THESESUBMISSIONS, THE LD.CIT(A) HAS DELETED THE SAM E.' THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE SOR RYTO SAY, DEPICT CLEAR ABUSE OF POWER OF THE ASSESSING OFFICER.WE WERE INCLINED TO IMPOSE EXEMPL ARY COSTS UPON THEREVENUE BUT REFRAINED FROM DOING SO BECAUSE NOTICE OF THIS APPEALHAS NOT BEEN GIVEN TO THE RESPONDENT. NO ONE HAS APPEARED. THEQUESTION FORMULATED IN THIS CASE IS ANSWERED IN THE AFFIRMATIVE AND AGAINST THE REVENUE. ( D). IN ITO VS. M/S. CYGNUS DEVELOPERS (I) PVT. LT D. (ITA NO.282/KOL/2012) THE KOLKATA BENCH OF THE ITAT HELD AS UNDER: 8. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED DR , WHO RELIED ON THE ORDER OF AO. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDE R OF CIT(A) AND FURTHER DREW OUR ATTENTION TO THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS RAJ KUMAR AGARWAL VIDE ITA NO.179/2008 DATED 17.11.2009 WHEREIN THE HON'BLE AL LAHABAD HIGH COURT TOOK A VIEW THAT NON PRODUCTION OF THE DIRECTOR OF A PUBLIC LIMITED COMP ANY WHICH IS REGULARLY ASSESSED TO INCOME TAX HAVING PAN, ON THE GROUND THAT THE IDENTITY OF THE INVESTOR IS NOT PROVED CANNOT BE SUSTAINED. ATTENTION WAS ALSO TO THE SIMILAR RULING OF THE ITA T KOLKATA BENCH IN THE CASE OF ITO VS DEVINDER SINGH SHANT IN IT A NO.208/KOL/2009 VIDE ORDER DATED 17.04.200 9. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE ARE OF THE VIEW THAT ORDER OF CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. IT MAY BE SEEN FROM THE GROUNDS OF APPEAL RAISED BY THE REVENUE THAT THE REVENUE DISPUTED ONLY THE PROOF OF IDENTITY OF THE SHARE HOLDER. IN THIS REGARD IT IS SEEN THAT FOR A.Y.2004-05 SHREE SHYAMTREXIMPVT. LTD., WAS ASSESSE D BY ITO, WARD-9(4), KOLKATA AND THE ORDER OF ASSESSMENT U/S/143(3) DATED 25.01.2006 IS PLACED IN THE PAPER BOOK. SIMILARLY NAVALCO COMMODITIES PVT. LTD., WAS ASSESSED TO TAX U/S 143( 3) FOR A.Y.2005-06 BY ITO, WARD-9(4), KOLKATA BY ORDER DATED 20.03.2007. SIMILARLY JEWELL OCKTREXIMPVT. LTD WAS ASSESSED TO TAX FOR A.Y.2005-06 BY THE VERY SAME ITO-WARD-9(3), KOLKATA ASSESSING THE ASSESSEE. IN THE LIGHT OF THE ABOVE FACTUAL POSITION WHICH IS NOT DISPUTED BY THE REVENUE, IT CANNOT BE SAID THAT THE IDENTITY OF THE SHARE APPLICANTS REMAINED NOT PROVED BY THE ASS ESSEE. THE DECISION OF THE HON'BLE ALLAHABAD HGIH COURT AS WELL AS ITAT KOLKATA BENCH ON WHICH R ELIANCE WAS PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUPPORTS THE VIEW THAT FOR NO N PRODUCTION OF DIRECTORS OF THE INVESTOR COMPANY FOR EXAMINATION BY THE AO IT CANNOT BE HELD THAT THE IDENTITY OF A LIMITED COMPANY HAS NOT BEEN ESTABLISHED. FOR THE REASONS GIVEN ABOVE W E UPHOLD THE ORDER OF CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. ITA NO.1752/KOL/2017 M/S CARELINKVYAPAAR PVT. LTD. ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 8 88 8 10. WE ALSO RELY ON THE JUDGMENT OF THE COORDINATE BENCH KOLKATA, IN THE CASE OF M/S DELIGHT GRIHNIRMAN PVT. LTD., IN ITA NO.1755/KO L/2017, FOR A.Y.2012-13, WHEREIN ON SIMILAR AND IDENTICAL FACTS , HELD AS FOLLOWS: 34. WE NOTE THAT ASSESSEE UNDER CONSIDERATION, NOT ONLY HAS PROVED THE SOURCE, BUT HE HAS PROVED SOURCE OF SOURCE ALSO. PARA 29 OF THI S ORDER CONTAINS THE CHART, WHICH EXPLAINS THAT ASSESSEE HAS PROVED SOURCE OF S OURCE, WHICH HE NEED NOT TO PROVE. IN THIS CASE ON HAND, THE ASSESSEE HAD DISCH ARGED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE S HARE APPLICANTS, THEREAFTER THE ONUS SHIFTED TO AO TO DISPROVE THE DOCUMENTS FURNIS HED BY ASSESSEE, CANNOT BE BRUSHED ASIDE BY THE AO TO DRAW ADVERSE VIEW, CANNO T BE COUNTENANCED. IN THE ABSENCE OF ANY INVESTIGATION, MUCH LESS GATHERING O F EVIDENCE BY THE ASSESSING OFFICER, WE HOLD THAT AN ADDITION CANNOT BE SUSTAIN ED MERELY BASED ON INFERENCES DRAWN BY CIRCUMSTANCE. APPLYING THE PROPOSITIONS LA ID DOWN IN THESE CASE LAWS TO THE FACTS OF THIS CASE, WE ARE INCLINED TO UPHOLD T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 35. WE NOTE THAT BEFORE US THE DEPARTMENT HAS ALSO RAISED THE GROUND NO. 2 STATING THAT: LD. CIT(A) HAS ERRED IN NOT FOLLOWING THE DECISION BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF RAJ MANDIR ESTATE PRIVATE LIMI TED REPORTED IN 70 TAXMANN 124(CAL) WE ARE OF THE VIEW THAT JUDGMENT OF THE HON`BLE HIG H COURT OF CALCUTTA IN THE CASE OF RAJ MANDIR ESTATE PRIVATE LIMITED REPORTED IN 70 TAXMANN 124(CAL), RELATES TO SECTION 263 OF THE ACT. THAT IS, IN THIS JUDGMENT, THE ISSUE WAS THAT WHETHER LD CIT WAS RIGHT IN EXERCISING THE JURISDIC TION UNDER SECTION 263 OF THE ACT OR NOT. IN THIS CASE, THE LD CIT HAD DIRECTED T HE ASSESSING OFFICER TO EXAMINE THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF T HE SHARE SUBSCRIBERS. THE LD CIT HAD GIVEN DIRECTION TO THE ASSESSING OFFICER AND T HIS DOES NOT MEAN THAT LD CIT HAS ADJUDICATED THE ISSUE AGAINST THE ASSESSEE. IT IS J UST DIRECTION GIVEN BY THE LD CIT TO ASSESSING OFFICER AND THEREFORE, DOES NOT APPLY TO THE FACTS OF THE ASSESSEE. THEREFORE, ISSUE IN THE CASE OF RAJ MANDIR ESTATE PRIVATE LIMITED REPORTED (SUPRA) IS DISTINGUISHABLE ON FACTS, THAT IS, IT WAS ONLY T HE DIRECTION OF THE LD CIT TO THE ASSESSING OFFICER TO EXAMINE THE GENUINENESS, CREDI TWORTHINESS AND IDENTITY OF THE SHARE SUBSCRIBERS, HENCE, DOES NOT APPLY TO THE ASS ESSEE UNDER CONSIDERATION. 36. WE NOTE THAT THE DIRECTOR OF THE ASSESSEE COMPA NY, MR. SIDDHESWAR HALDER, VIDE ITS LETTER, DATED 20.03.2015, SUBMITTED IN RES PONSE TO NOTICE U/S.131OF THE ACT, THE FOLLOWING INFORMATION AND DOCUMENTS, VIZ: COPY OF PAN CARD FOR IDENTITY PROOF AND COPY OF DRIVING LICENSE AS A PROOF OF ADD RESS, COPY OF INCOME TAX RETURN FOR THE A.Y. 2010-11, 2011-12 & 2012-13, COP Y OF PROFIT & LOSS ACCOUNT AND BALANCE SHEET FOR THE F.Y. 2009-10 ONWARDS, COP Y OF BANK STATEMENT FOR THE RELEVANT PERIOD, AND OTHER DETAILS FOR HIS PERSONAL IDENTITY. THE SUBSCRIBER COMPANIES SUBMITTED EVERY DETAIL AS MENTIONED IN PA RA 27 OF THIS ORDER. WE NOTE THAT DURING THE APPELLATE PROCEEDINGS THE ASSESSEE SUBMITTED SOME ADDITIONAL EVIDENCES AND INFORMATION WHICH THE LD. CIT(A) HAS SENT FOR REMAND REPORT FOR EXAMINATION OF THE ASSESSING OFFICER. AFTER GETTING PROPER REMAND REPORT, THE LD. ITA NO.1752/KOL/2017 M/S CARELINKVYAPAAR PVT. LTD. ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 9 99 9 CIT(A) CAME TO THE CONCLUSION THAT ASSESSEE HAS PRO VED IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. WE NOTE THAT SOURCE OF FUND OF SHARE APPLICANTS VIZ. SARVOTTAM COMMERCIAL PVT. LTD., M/S . LANDMARK EXIM PVT. LTD AND M/S GANPATI HIRISE PVT. LTD, IS DIRECTLY FROM M/S. EMAMI BIOTECH LTD. (NOW M/S. EMAMIAGROTECH LTD.) AND THE SOURCE OF SOURCE OF FUN D OF THE SHARE APPLICANTS VIZ. M/S. GHAZAL TEXTILES AND FINANCE PVT. LTD AND M/S. PROCTON COMMERCE PVT. LTD, IS ALSO M/S EMAMI BIOTECH LTD. (NOW M/S. EMAMIAGROT ECH LTD.), WHICH IS A HIGHLY REPUTED COMPANY. THEREFORE, ASSESSEE HAS EVEN PROVE D THE SOURCE OF SOURCE OF SHARE APPLICANTS IN THE INSTANT CASE. WE NOTE THAT SECTION 68 OF THE ACT PROVIDES THAT IF ANY SUM FOUND CREDITED IN THE YEAR IN RESPE CT OF WHICH THE ASSESSEE FAILS TO EXPLAIN THE NATURE AND SOURCE, SHALL BE ASSESSED AS ITS UNDISCLOSED INCOME. IN THE FACTS OF THE PRESENT CASE, BOTH THE NATURE & SOURCE OF THE SHARE APPLICATION RECEIVED WAS FULLY EXPLAINED BY THE ASSESSEE. THE A SSESSEE HAD DISCHARGED ITS ONUS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINE NESS OF THE SHARE APPLICANTS. THE PAN DETAILS, BANK ACCOUNT STATEMENTS, AUDITED F INANCIAL STATEMENTS AND INCOME TAX ACKNOWLEDGMENTS WERE PLACED ON AO'S RECO RD. ACCORDINGLY ALL THE THREE CONDITIONS AS REQUIRED U/S. 68 OF THE ACT I.E . THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WAS PLACED BEFOR E THE AO AND THE ONUS SHIFTED TO AO TO DISPROVE THE MATERIALS PLACED BEFORE HIM. WITHOUT DOING SO, THE ADDITION MADE BY THE AO IS BASED ON CONJECTURES AND SURMISES CANNOT BE JUSTIFIED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED AB OVE, NO ADDITION WAS WARRANTED UNDER SECTION 68 OF THE ACT. THAT BEING S O, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD CIT(A), HIS ORDER ON THIS IS SUE IS HEREBY UPHELD AND GROUNDS OF APPEAL RAISED BY THE REVENUE IS DISMISSE D. 11. WE NOTE THAT FROM THE FACTS NARRATED ABOVE IT IS ABUNDANTLY CLEAR THAT THE NOTICES U/S.133(6) ISSUED TO THESHAREHOLDERS WERE S ERVED ON THEIR RESPECTIVE ADDRESSES BY THE POSTAL AUTHORITIES ANDIN RESPONSE, THEY CONFIRMED THE TRANSACTIONS AND ALSO SUBMITTED THE DETAILS OF THESOURCE OF FUND S FOR MAKING INVESTMENTS. HENCE, THE IDENTITY & CREDITWORTHINESS OFTHE SHAREH OLDERS ARE NOT IN DOUBT. THERE IS NO DOUBT OVER THE GENUINENESS OF THETRANSACTIONS AS WELL SINCE ALL THE SHARE APPLICATION MONEY WAS RECEIVED THROUGH BANKING CHAN NEL. WE NOTE THAT IN THE REMAND REPORT, THE AO ADMITTED THAT HE EXAMINED THE DIRECTOR OF THE ASSESSEE AND THE RELEVANT DETAILS/DOCUMENTS SUBMITTED BY THEM AN D FOUND THAT THE SHARE APPLICATION MONEY OF RS.4,73,20,000/- RAISED BY THE ASSESSEE WAS GENUINE.THAT BEING SO, WE DECLINE TO INTERFERE WITH THE ORDER OF ID. C.I T.(A) DELETING THE AFORESAID ADDITION. HIS ORDER ON THIS ADDITION IS, THEREFORE, UPHELD AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. ITA NO.1752/KOL/2017 M/S CARELINKVYAPAAR PVT. LTD. ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 12. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 23.01.2019 . SD/- ( S. S. GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 23/01/2019 ( RS, SR.PS ) / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. /THE ASSESSEE- ITO, WARD-6(1), KOLKATA 2. ! / THE RESPONDENT- M/S CARELINKVYAPAAR PVT. LTD. 3. ' ( ) / THE CIT(A), 4. ' / CIT 5. #$% &&'( , '( , / DR, ITAT, KOLKATA 6. %)*+ / GUARD FILE. !# &