M/s Calypso Tie Up & Finco (P) Ltd., Kolkata V. ITO, Ward-7(4), Kolkata, Kolkata

ITA 1851/KOL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4222 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 16-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Opportunity of being heard; Set aside
• Section: 68; 263

Judgement Text

1 ITA NO. 1851/KOL/2017 M/S. CALYPSO TIE UP & FINCO (P) LTD., AY 2012-13 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1851/KOL/2017 ASSESSMENT YEAR: 2012-13 M/S. CALYPSO TIE UP & FINCO (P) LTD. (PAN: AABCC2133Q) VS. INCOME-TAX OFFICER, WARD-7(4), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 21.01.2019 DATE OF PRONOUNCEMENT 13.03.2019 FOR THE APPELLANT SHRI MIRAJ D. SHAH, AR FOR THE RESPONDENT SHRI ROBIN CHOUDHURY, ADDL. CIT , SR. DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A)-16, KOLKATA DATED 09.02.2017 FOR AY 2012-13. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT UNDER THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF A SUM OF RS.1,77,99,000/ - MADE BY THE AO FOR THE SHARE CAPITAL RAISED DURING THE YEAR. THE ADDITION IS UNJUSTIFIE D AND NEED TO BE DELETED. 2. THAT, THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. AT THE OUTSET ITSELF, THE LD. AR OF THE ASSESSEE CONTENDED THAT THE AO HAS MADE THE ADDITION OF THE ENTIRE SHARE SUBSCRIPTION THE ASSES SEE RECEIVED, SINCE THE ASSESSEE FAILED TO PRODUCE ITS OWN DIRECTORS; AND THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANIES. ACCORDING TO LD. AR, THE ENTIRE DETAILS OF THE SHARE SUBSCRIB ERS TO PROVE THEIR IDENTITY, CREDITWORTHINESS 2 ITA NO. 1851/KOL/2017 M/S. CALYPSO TIE UP & FINCO (P) LTD., AY 2012-13 AND GENUINENESS WERE FURNISHED BEFORE THE LD. CIT(A ). HOWEVER, FOR THE FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE DIRECTORS, THE AO HA S MADE THE ADDITION WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A) THAT TOO BY PASSING A CRYPTIC ORDER. WE NOTE THAT THE ASSESSEE IS A NON-BANKING FINANCIAL COMPANY AND SINCE IN THI S ASSESSMENT YEAR THE ASSESSEE HAS ISSUED THE SHARE CAPITAL ALONG WITH PREMIUM AND THE AO TAKING NOTE THAT THE ASSESSEE COULD NOT PRODUCE THE DIRECTORS OF THE ASSESSEE AS WELL A S THAT OF THE SHARE SUBSCRIBING COMPANIES HAS SADDLED THE ENTIRE SHARE CAPITAL RAISED ALONG W ITH PREMIUM U/S. 68 OF THE ACT. BEFORE US, THE ASSESSEE HAS FILED THE BULKY PAPER BOOK WHICH R UNS TO 476 PAGES AND THE LD. AR DREW OUR ATTENTION TO THE FACT THAT 11 SHARE SUBSCRIBERS HAD SUBSCRIBED TO THE SHARES OF THE ASSESSEE AND IN ORDER TO PROVE THE IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE TRANSACTION HAS FILED (I) INCOME TAX RETURN FOR AY 2012-13; (II) CE RTIFICATE OF INCORPORATION; (III) AUDITED ACCOUNTS FOR AY 2012-13; (IV) SHARE APPLICATION FOR M; (V) SHARE ALLOTMENT LETTER; (VI) BANK STATEMENT; (VII) ASSESSMENT ORDER PASSED U/S. 143(1 ) OF THE ACT AND (VIII) THE SOURCES OF SOURCE OF THE SHARE APPLICATION MONEY WERE FILED. HOWEVER, MERELY BECAUSE THE ASSESSEE FAILED TO PRODUCE THE DIRECTORS OF THE ASSESSEE COM PANY AS WELL AS THAT OF THE SHARE SUBSCRIBING COMPANIES, THE ENTIRE SHARE CAPITAL AND PREMIUM HAS BEEN ADDED ON THE ASSESSEE U/S. 68 OF THE ACT. ACCORDING TO LD. AR, THE DIRECT ORS OF SHARE SUBSCRIBING COMPANIES AND ITS OWN DIRECTORS WERE NOT IN KOLKATA WHEN THE AO A SKED THEM TO BE PRESENT BEFORE HIM. SO, ACCORDING TO LD. AR, NO PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE DURING ASSESSMENT PROCEEDINGS. OUR ATTENTION WAS DRAWN TO SEVERAL CAS ES IN WHICH NO PROPER OPPORTUNITY THE ASSESSEE GOT AT THE ASSESSMENT STAGE, WE HAVE REMAN DED THE MATTER BACK TO THE FILE OF THE AO RELYING THE DECISION OF THE HONBLE (THREE JUDGE BE NCH) OF THE HONBLE SUPREME COURT IN TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC), WHEREI N IT WAS HELD AS UNDER: IT IS UNNECESSARY TO GO INTO GREAT DETAIL IN THESE MATTERS FOR THERE IS A STATEMENT IN THE ORDER OF THE TRIBUNAL, THE FACT-FINDING AUTHORITY, THAT R EADS THUS : WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUB MISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORTUNITY OF BEI NG HEARD. 3 ITA NO. 1851/KOL/2017 M/S. CALYPSO TIE UP & FINCO (P) LTD., AY 2012-13 THAT THE ASSESSEE COULD HAVE PLACED EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL IS REALLY OF NO CONSEQUENCE FOR IT IS THE ASSESSMENT ORDER THAT COUNTS. THAT ORDER MUST BE MADE AFTER THE ASSESSEE HAS BEEN GIVEN A RE ASONABLE OPPORTUNITY OF SETTING OUT HIS CASE. WE, THEREFORE, DO NOT AGREE WITH THE TRIBUNAL AND THE HIGH COURT THAT IT WAS NOT NECESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSING AUTHORITY FOR FRESH ASSESSMENT AFTER GIVING TO THE ASSESSEE A PROPER OPPORTUNITY OF BEING HEARD. TWO QUESTIONS WERE PLACED BEFORE THE HIGH COURT, OF WHICH THE SECOND QUESTION IS NOT PRESSED. THE FIRST QUESTION READS THUS : 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN NOT SETTING ASIDE THE ASSESSMENT ORDER IN SPITE OF A FINDING ARRIVED AT BY IT THAT THE INCOME- TAX OFFICER HAD NOT GIVEN A PROPER OPPORTUNITY OF H EARING TO THE ASSESSEE ? IN OUR OPINION, THERE CAN ONLY BE ONE ANSWER TO THI S QUESTION WHICH IS INHERENT IN THE QUESTION ITSELF : IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSIONER (APPEALS) AND OF THE TRIBUNAL A RE ALSO SET ASIDE. THE MATTER SHALL NOW BE REMANDED TO THE ASSESSING AUTHORITY FOR FRESH CO NSIDERATION, AS AFORESTATED. 4. IN SIMILAR CASE THIS TRIBUNAL IN ITA NO.393/KOL/ 2016 IN M/S. STAR GRIHA (P) LTD. VS. ITO FOR AY 2008-09 DATED 15.12.2017 HAS OBSERVED AS UNDER:- WE ALSO NOTE THAT THE LD. CIT AFTER LOOKING INT O THE PERNICIOUS PRACTICE OF CONVERTING BLACK MONEY INTO WHITE MONEY HAS GIVEN THE GUIDELIN ES TO AO AS TO HOW THE INVESTIGATION SHOULD BE CONDUCTED TO FIND OUT THE SOURCE. SINCE SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD BY THE TRIBUNAL AS WELL AS BY THE HONBLE CALCUTTA HIGH COURT AS WELL AS THE SLP HAS BEEN DISMISSED BY THE HONBLE S UPREME COURT, SIMILAR ORDER OF THE LD. CIT HAS TO BE GIVEN EFFECT TO AS DIRECTED BY THE LD . CIT. WE TAKE NOTE THAT THE LD. CIT WITH HIS EXPERIENCE AND WISDOM HAS GIVEN CERTAIN GUIDELINES IN THE BACKDROP OF BLACK MONEY MENACE SHOULD HAVE BEEN PROPERLY ENQUIRED INTO AS DIRECTED BY HIM. THE AO OUGHT TO HAVE FOLLOWED THE INVESTIGATING GUIDELINES AND METHOD AS DIRECTED BY HIM TO UNEARTH THE FACTS TO DETERMINE WHETHER THE IDENTITY, GENUINENESS AND CREDITWORTHIN ESS OF THE SHARE SUBSCRIBERS. WE NOTE THAT THE HONBLE SUPREME COURT (THREE JUDGES BENCH) IN THE CASE OF TIN BOX, (SUPRA), HAS HELD THAT SINCE THERE WAS LACK OF OPPORTUNITY TO THE ASSESSEE AT THE ASSESSMENT STAGE ITSELF, THE ASSESSMENT NEEDS TO BE DONE AFRESH AND THEREBY REVE RSED THE HONBLE HIGH COURT, TRIBUNAL AND CIT(A)S ORDERS AND REMANDED THE MATTER BACK T O AO FOR FRESH ASSESSMENT. SO, SINCE THERE WAS LACK OF OPPORTUNITY AS AFORESTATED IT HAS TO GO BACK TO AO. 5. IN VIEW OF THE AFORESAID ORDER AND IN THE LIGHT OF THE HONBLE SUPREME COURTS DECISION IN TIN BOX COMPANY (SUPRA), SINCE ASSESSEE DID NOT GET PROPER OPPORTUNITY BEFORE THE AO, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AN D REMAND THE MATTER BACK TO THE FILE OF 4 ITA NO. 1851/KOL/2017 M/S. CALYPSO TIE UP & FINCO (P) LTD., AY 2012-13 AO FOR DE NOVO ASSESSMENT AND THE AO TO DECIDE THE MATTER IN ACCORDANCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13TH MARC H, 2019. SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13TH MARCH, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT M/S. CALYPSO TIE UP & FINCO (P) LTD., 7 7B, NIMTALA GHAT STREET, JORABAGAN, KOLKATA-700 006. 2 RESPONDENT ITO, WARD-7(4), KOLKATA. 3 4 5 CIT(A) -16, KOLKATA (SENT THROUGH E-MAIL) CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR