M/s Eldot Commotrade (P) Ltd, Kolkata V. A.C.I.T CC - XXIV,kolkata, Kolkata

ITA 1916/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91973 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 17-06-2013
• Court: TRIBUNAL
• Department Lawyers: SANJAY SR DR
• Assessee Lawyers: S K TULSIYAN
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: KOLKATA [BEFORE HON BLE SHRI B.P.JAIN, AM] I.T.A NO.1916 /KOL/2013 ASSESSMENT YEAR: 2003 - 04 M/S.ELDOT COMMOTRADE (P) LTD. VS A.C.I.T., CENTRAL CIRCLE - XXIV, KOLKATA . KOLKATA (APPELLAN T) ( RESPONDENT) (PAN: AAACE 5350 J) FOR THE APPELLANT : SHRI S.K.TULSIYAN, FCA FOR THE RESPONDENT : SHRI SANJAY, SR.DR, ADDL. C.I.T. DATE OF HEARING : 01.06 .2015. DATE OF PRONOUNCEMENT: 01.06 .2015. ORDER PER SHRI B.P.J AIN, AM : THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LD.CIT(A) - CENTRAL - III , KOLKATA DATED 18.04.2013 FOR ASSESSMENT YEAR 2003 - 04. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. THE ORDERS PASSED BY THE LOWER AUTHORITIES ARE ARBITRARY, ERRONEOUS, WITHOUT PROPER REASONINGS, INVALID AND BAD IN LAW, TO THE EXTENT TO WHICH THEY ARE PREJUDICIAL TO THE INTERESTS OF THE APPELLANT. 2(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE AD DITION OF THE SUM OF RS.10,00,000/ - U/S 68 OF THE INCOME - TAX ACT, 1961, BY CONSIDERING THE RECEIPT OF THE SAID AMOUNT AS UNEXPLAINED IN SPITE OF THERE BEING AMPLE EVIDENCES ABOUT THE GENUINENESS OF THE SAID RECEIPT OF MONEY BY THE APPELLANT BY WAY OF SALE OF SHARES. 2(B) WITHOUT ANY PREJUDICE TO ABOVE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF THE SUM OF RS.10,00,000/ - SEPARATELY U/S 68 OF THE ACT, NEGLECTING TO TAKE INTO ACCOUNT THE FACT THAT THE AMOUNT HAD ALREADY BEEN CREDITED TO THE ACCOUNT S OF THE APPELLANT AS SALE PROCEEDS OF SHARES THUS LEADING TO A P OSITION OF DOUBLE ADDITION OF THE SAME AMOUNT. 3. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER, MODIFY, SUBSTITUTE, ADD TO, ABRIDGE AND/OR RESCIND ANY OR ALL OF THE ABOVE GROUNDS. 3. THE BRIEF FACTS OF THE CASE ARE THAT ON SCRUTINY OF THE COPY OF BANK ACCOUNTS OBTAINED FROM FEDERAL BANK LIMITED, BURRABAZAR BRANCH IT WAS OBSERVED BY THE AO ITA NO. 1916/KOL/2013 M/S. ELDOT COMMOTRADE (P)LTD A.YR. 2003 - 04 2 THAT THERE ARE TRANSFERS OF RS.6,00,000/ - & RS.4,00,000/ - TO ASSESSEE S ACCOUNT (NO.4792) ON VARIOUS DATES FROM THE ACCOUNT NOS. CA 4933 & CA 4914 MAINTAINED IN THE NAME OF SHRI SURENDRA KR.HIRAWAT AND SHRI SUNIL KR.JAIN RESPECTIVELY. ON FURTHER VERIFICATION IT WAS SEEN THAT THE SAID AMOUNTS WERE TRANSFERRED ONLY AFTER DEPOSITING CASH EITHER ON THE SAME D AY OR ONE DAY BEFORE. THE DETAILS OF CASH DEPOSITS AND TRANSFER TO ACCOUNT ARE AS UNDER : ACCOUNT NO. NAME OF THE HOLDER DATE OF CASH DEPOSIT AMOUNT OF CASH DEPOSIT (RS.) DATE OF TRANSFER AMOUNT (RS.) CA 4933 SURENDRA KR.HIRAWAT 02.04.02 5,00,000/ - 02.04 .02 6,00,000/ - CA 4914 SUNIL KUMAR JAIN 02.04.02 4,50,000/ - 02.04.02 4,00,000/ - TO VERIFY THE SOURCES OF SUCH CASH DEPOSITS AND CREDITWORTHINESS OF THE PERSONS, SUMMONS U/S 131 WERE ISSUED IN THE NAME OF ALL THE ABOVE PERSONS IN THE ADDRESSES GIVEN TO T HE BANK AUTHORITIES. BUT SUCH SUMMONS COULD NOT BE SERVED BY THE INSPECTOR SO DEPUTED. AS PER THE REPORT OF THE INSPECTOR, WHEREABOUTS OF ALL THE ABOVE PERSONS ARE NOT KNOWN. EVEN THE WATCHMAN OF THE BUILDING COULD NOT IDENTIFY THESE PERSONS. CONSIDERING THAT THE SOURCE OF CASH DEPOSITS AND CREDITWORTHINESS OF ALL THE ABOVE MENTIONED PERSONS REMAINED UNEXPLAINED, A SHOW CAUSE NOTICE WAS GIVEN TO SUBMIT EXPLANATION. 3.1. THE ASSESSEE SUBMITTED THE EXPLANATION VIDE LETTER DATED 18.03.2006 THAT THE ACCOUNT O F THE AFORESAID PERSONS MENTIONED IN THE SHOW CAUSE LETTER OF THE AO DOES NOT BELONG TO THE ASSESSEE COMPANY AND THE ASSESSEE HAS SOLD THEIR INVESTMENTS TO THE SAID PERSONS. IN CONSIDERATION THEREOF THE PAYMENT RECEIVED HAS BEEN ACCOUNTED FOR ON REVENUE AC COUNT AND SHOWN AS SALE PROCEEDS. IT IS ONLY SUBSTITUTION OF ONE ASSET FOR AN OTHER ASSET . IT IS NOT A CASE WHERE ASSESSEE HAS OBTAINED CASH CREDIT. THE ASSESSEE HAS ALREADY ACCOUNTED FOR THESE AMOUNTS AS ITS INCOME IN THE PROFIT AND LOSS ACCOUNT. THE EXPLA NATION SUBMITTED BY THE ASSESSEE WAS NOT FOUND SATISFACTORY. ACCORDINGLY ITA NO. 1916/KOL/2013 M/S. ELDOT COMMOTRADE (P)LTD A.YR. 2003 - 04 3 AO TREATED THE SAME AS UNEXPLAINED MONEY U/S 68 OF THE ACT AND ADDED TO THE INCOME OF THE ASSESSEE. 3.2. THE LD.CIT(A) CONFIRMED THE ACTION OF AO. 4. THE LD. COUNSEL FOR THE ASSESSE E STRONGLY ARGUED THAT THERE CANNOT BE ANY DOUBLE ADDITION SINCE IT IS A SUBSTITUTION OF ONE ASSET FOR ANOTHER ASSET . THE ASSESSEE HAD ALSO DECLARED THE INVESTMENT WHICH IS AN UNDISPUTED FACT. THE SAME HAS BEEN SOLD AND MONEY SO RECEIVED HAS BEEN CREDIT ED TO THE REVENUE ACCOUNT AND DECLARED AS INCOME IN THE FORM OF SALES CREDITED TO PROFIT AND LOSS ACCOUNT. THIS FACT CANNOT BE DENIED AND IN FACT HAS NEVER BEEN DENIED BY ANY OF THE AUTHORITIES BELOW . B Y MAKING THE ADDITION AGAIN U/S 68 OF THE ACT , WILL TAN TAMOUNT TO DOUBLE ADDITION WHICH IS NOT PERMISSIBLE IN THE LAW. 5. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND ARGUED THAT THE AMOUNT DEPOSITED BY SHRI SURENDRA KR.HIRAWAT AND SUNIL KR.JAIN ON THE SAME DAY FOR ONE DA Y EARLIER HAS BEEN GIVEN TO THE ASSESSEE AND THE IDENTITY OF THE SAID PERSONS HAS NOT BEEN PROVED. THEREFORE IT IS A CASE OF CASH CREDIT. 6. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I DO NOT AGREE WITH THE CONTENTI ONS MADE BY THE LD. DR THAT THE SAID AMOUNT RECEIVED IS A CASE OF CASH CREDIT U/S 68 OF THE ACT, S INCE THE ASSESSEE HAD DECLARED THE INVESTMENT IN THE FORM OF SHARES PURCHASES WHICH HAS BEEN SOLD TO THE SAID PERSONS AND IT IS A SUBSTITUTION OF ONE ASSET I N PLACE OF ANOTHER ASSET I.E. SHARE INVESTMENT HAS BEEN CONVERTED INTO BANK BALANCE WHICH ARE PART OF THE BALANCE SHEET AND SALES SO MADE HAVE BEEN CREDITED TO THE ACCOUNT OF THE REVENUE I.E. PROFIT AND LOSS ACCOUNT/INCOME ACCOUNT. THE AO BY MAKING THE ADD ITION U/S 68 OF THE ACT IS MAKING A DOUBLE ADDITION WHICH IS NOT PERMISSIBLE UNDER LAW. IN THE CIRCUMSTANCES AND FACTS OF THE CASE THE AO IS NOT JUSTIFIED IN MAKING THE DOUBLE ADDITION AND THE ORDER OF THE LD. CIT(A) IS ACCORDINGLY REVERSED. THUS ALL THE G ROUNDS OF APPEAL OF ASSESSEE ARE ALLOWED. ITA NO. 1916/KOL/2013 M/S. ELDOT COMMOTRADE (P)LTD A.YR. 2003 - 04 4 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDE R PRONOUNCED IN THE OPEN COURT ON 01.06 .2015. SD/ - [ B.P.JAIN ] ACCOUNTANT MEMBER DATE: 01.06 .2015. R.G.(.P.S.) C OPY OF THE ORDER FORWARDED TO: 1 . M/S. ELDOT COMMOTRADE (P)LTD., 133, CANNING STREET, 3 RD FLOOR, KOLKATA - 700001. 2 A.C.I.T., CENTRAL CIRCLE - XXIV, KOLKATA. 3 . CIT(A) - CENTRAL - III , KOLKATA 4. CIT - KOLKATA. 5. CIT - D R, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES