M/s. Dadheech Furniture Pvt. Ltd. , Kolkata V. ITO, Ward 7(3), Kolkata, Kolkata

ITA 1914/KOL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7293 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 28-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Unexplained cash credit; Set aside
• Section: 143(3); 201; 131; 68

Judgement Text

ITA NO. 1914/KOL/2017 ASSESSMENT YEAR: 2012-2013 M/S. DADHEECH FURNITURE PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ & HZ) AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER I.T.A. NO. 1914/KOL/2017 ASSESSMENT YEAR: 2012-2013 M/S. DADHEECH FURNITURE PVT. LIMITED,.............. ........................APPELLANT 25A, CIRCUS AVENUE, NEAR PARK CIRCUS CROSSING, KOLKATA-700 017 [PAN: AADCD3739K] -VS.- INCOME TAX OFFICER,................................ ...................................RESPONDENT WARD-7(3), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI AKSHAY RINGASIA, CA, FOR THE APPELLANT SMT. RANU BISWAS, SR. D.R , FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : SEPTEMBER 24, 201 9 DATE OF PRONOUNCING THE ORDER : OCTOBER 23, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE) :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-16, KOLKATA DA TED 02.08.2017 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS.1,26,65,000/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) BY TREATING THE SHARE CAPITAL AND SHAR E PREMIUM RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 . 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF TRADING IN FURNITURE. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 15.09.2011 D ECLARING TOTAL INCOME AT RS.1,380/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE CLAIM OF THE ASSESSEE OF HAVING RECEIVED SHARE CAPITAL AND S HARE PREMIUM AMOUNT ITA NO. 1914/KOL/2017 ASSESSMENT YEAR: 2012-2013 M/S. DADHEECH FURNITURE PVT. LIMITED 2 AGGREGATING TO RS.1,26,65,000/- WAS EXAMINED BY THE ASSESSING OFFICER. DURING THE COURSE OF THE SAID EXAMINATION, SUMMONS UNDER SECTION 131 WAS ISSUED BY THE ASSESSING OFFICER REQUIRING THE D IRECTOR OF THE ASSESSEE-COMPANY TO APPEAR BEFORE HIM IN PERSON AND ALSO TO PRODUCE ALL THE SHARE SUBSCRIBERS ALONG WITH THE RELEVANT DOCUM ENTARY EVIDENCE TO ESTABLISH THEIR IDENTITY AND CREDITWORTHINESS AS WE LL AS THE GENUINENESS OF THEIR RELEVANT TRANSACTIONS. ALTHOUGH THE DIRECT OR OF THE ASSESSEE- COMPANY APPEARED BEFORE THE ASSESSING OFFICER IN RE SPONSE TO SUMMONS UNDER SECTION 131, HE COULD NOT PRODUCE THE SHARE S UBSCRIBERS ALONG WITH THEIR RELEVANT DOCUMENTARY EVIDENCE FOR THE VERIFIC ATION OF THE ASSESSING OFFICER. KEEPING IN VIEW THIS FAILURE OF THE ASSESS EE, THE ASSESSING OFFICER TREATED THE ENTIRE SHARE CAPITAL AND SHARE PREMIUM AMOUNT AGGREGATING TO RS. 1,26,65,000/- AS UNEXPLAINED CASH CREDIT AND AD DITION TO THAT EXTENT WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 68 IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 30.03.2015. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEE DINGS, A PAPER BOOK WAS FILED BY THE ASSESSEE CONTAINING THE DOCUMENTAR Y EVIDENCE, WHICH WAS FILED BEFORE THE ASSESSING OFFICER IN ORDER TO EXPLAIN THE RELEVANT CASH CREDITS REPRESENTING RECEIPT OF SHARE CAPITAL AND SHARE PREMIUM AMOUNT IN TERMS OF SECTION 68. THE LD. CIT(APPEALS) , HOWEVER, DID NOT ACCEPT THE SAME AND PROCEEDED TO CONFIRM THE ADDITI ON MADE BY THE ASSESSING OFFICER UNDER SECTION 68 BY TREATING THE SHARE CAPITAL AND SHARE PREMIUM AMOUNT AGGREGATING TO RS. 1,26,65,000/- AS UNEXPLAINED CASH CREDIT BY RELYING ON THE DECISION OF THE HONBLE CA LCUTTA HIGH COURT IN THE CASE OF RAJMANDIR ESTATES PVT. LIMITED VS.- PCIT, KOLKATA. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. ITA NO. 1914/KOL/2017 ASSESSMENT YEAR: 2012-2013 M/S. DADHEECH FURNITURE PVT. LIMITED 3 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE PRELIMIN ARY ISSUE RAISED BY THE LD. COUNSEL FOR THE ASSESSEE IS THAT NO PROPER AND SUFFICIENT OPPORTUNITY WAS AFFORDED EITHER BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR EVEN BEFORE THE LD. CIT(A PPEALS) DURING THE APPELLATE PROCEEDINGS TO EXPLAIN THE RELEVANT CASH CREDITS REPRESENTING SHARE CAPITAL AND SHARE PREMIUM AMOUNT AGGREGATING TO RS. 1,26,65,000/- IN TERMS OF SECTION 68 BY ESTABLISHING THE IDENTITY AND CREDITWORTHINESS OF THE CONCERNED SHARE SUBSCRIBERS AS WELL AS THE G ENUINENESS OF THE RELEVANT TRANSACTIONS. HE HAS SUBMITTED THAT THE AS SESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE THE CONCERNED SHAR E SUBSCRIBERS ALONG WITH THE DOCUMENTARY EVIDENCE FOR VERIFICATION, BUT NEVER ISSUED ANY SUMMONS UNDER SECTION 131 DIRECTLY TO THE SAID SHAR E SUBSCRIBERS FOR APPEARING BEFORE HIM FOR EXAMINATION. HE SUBMITTED THAT EVEN THE LD. CIT(APPEALS) DID NOT APPRECIATE THE DOCUMENTARY EVI DENCE PLACED ON RECORD BY THE ASSESSEE TO ESTABLISH THE IDENTITY AN D CREDITWORTHINESS OF THE CONCERNED CREDITORS AS WELL AS THE GENUINENESS OF THE RELEVANT TRANSACTIONS AND PROCEEDED TO CONFIRM MADE BY THE A SSESSING OFFICER UNDER SECTION 68 BY SIMPLY RELYING ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF RAJMANDIR ESTATES PVT. LI MITED (SUPRA), WHICH WAS RENDERED IN THE CONTEXT OF THE ORDER PASSED BY THE LD. CIT UNDER SECTION 263. HE HAS SUBMITTED THAT THE ASSESSEE IS IN A POSITION TO PRODUCE THE CONCERNED SHARE SUBSCRIBERS ALONG WITH THE RELEVANT DOCUMENTARY EVIDENCE FOR VERIFICATION BEFORE THE AS SESSING OFFICER AND URGED THAT AN OPPORTUNITY MAY BE GIVEN TO THE ASSES SEE TO DO SO BY SENDING THE MATTER BACK TO ASSESSING OFFICER. KEEPI NG IN VIEW ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO A CCEPT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. EVEN THE LD. D .R. HAS NOT RAISED ANY OBJECTION FOR SENDING THE MATTER BACK TO THE ASSESS ING OFFICER. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) ON THE ISSUE UNDER CONSIDERATION AND RESTORE THE MA TTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTE R GIVING ONE MORE ITA NO. 1914/KOL/2017 ASSESSMENT YEAR: 2012-2013 M/S. DADHEECH FURNITURE PVT. LIMITED 4 OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE CONCERNE D SHARE SUBSCRIBERS ALONG WITH THE RELEVANT DOCUMENTARY EVIDENCE FOR VE RIFICATION. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 23, 2019. SD/- SD/- (SATBEER SINGH GODARA) (P.M. JAG TAP) JUDICIAL MEMBER V ICE-PRESIDENT (KZ & HZ) KOLKATA, THE 23 RD DAY OF OCTOBER, 2019 COPIES TO : (1) M/S. DADHEECH FURNITURE PVT. LIMITED, 25A, CIRCUS AVENUE, NEAR PARK CIRCUS CROSSING, KOLKATA-700 017 (2) INCOME TAX OFFICER, WARD-7(3), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-16, KOLKA TA, (4) COMMISSIONER OF INCOME TAX, KOLKATA- , KOLKATA; (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.