M/s Akashdeep Commodities Private Limited, Kolkata V. ITO, Ward-1(2), Kolkata , Kolkata

ITA 1920/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0136 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 28-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S JHAJHARIA
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3); 142(1); 147; 131; 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM &DR. A.L.SAINI, AM ./ITA NO.1920/KOL/2017 ( / ASSESSMENT YEAR: 2008-09) M/S AKASHDEEP COMMODITIES PVT. LTD. C/O SANTOSH CHOUDHURY & ASSOCIATES, COMMERCE HOUSE, 2A, GANESH CH. AVENUE, 6 TH FLOOR, ROOM NO. 3, KOLKATA-700013 VS. ITO, WARD-1(2), KOLKATA ./ ./PAN/GIR NO.: AAGCA 5951 K (ASSESSEE) .. (REVENUE) ASSESSEE BY : SHRI S. JHAJHARIA, AR RESPONDENT BY : SHRI A.K. SINGH, CIT DR / DATE OF HEARING : 30/01/2019 /DATE OF PRONOUNCEMENT : 29/03/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE ASSESSEE , PE RTAINING TO ASSESSMENT YEAR 2008-09 IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEAL)-9, KOLKATA, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 263 /144 OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT). M/S AKASHDEEP COMMODITIES PVT. LTD. ITA NO.1920/KOL/2017 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 2 22 2 2. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE AS SESSEE SUBMITTED BEFORE US THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 142(1) H AS NOT BEEN RECEIVED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE ASS ESSING OFFICER HAS MENTIONED IN PAGE NO. 7 OF THE ASSESSMENT ORDER THAT NOTICE W HICH WAS SENT BY SPEED POST RETURNED BACK WITH POSTAL COMMENT NOT KNOWN. THE ASSESSEE HAS SUBMITTED THE CORRECT COMMUNICATION ADDRESS BUT BECAUSE OF POSTAL ANOMALIES THE ASSESSEE COULD NOT RECEIVE THE NOTICE U/S 142(1) OF THE ACT AND AS A RESULT HE COULD NOT PLEAD HIS CASE PROPERLY AT THE ASSESSMENT STAGE. THEREFORE, L D. COUNSEL REQUESTED THE BENCH THAT THE MATTER SHOULD BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. APART FROM THIS, THE LD. COUNSE L FOR THE ASSESSEE ALSO SUBMITTED THAT THE ASSESSING OFFICER PASSED AN ORDER U/S 144 / 263 OF THE ACT WITHOUT TAKING INTO ACCOUNT THE DIRECTIONS GIVEN BY THE COMMISSION ER OF INCOME TAX, KOLKATA-1, U/S 263 OF THE ACT, VIDE PARA NO. 19 OF HIS ORDER W HICH IS REPRODUCED BELOW: 19. IN VIEW OF THE ABOVE, THE ORDER PASSED BY THE A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE & HENCE, THE ORDER PASSED BY THE A.O. IS SET- ASIDE WITH THE DIRECTION THAT HE/SHE SHOULD PASS TH E ASSESSMENT ORDER AFTER CONDUCTING INDEPENDENT DETAILED AND COMPLETE ENQUIR IES INTO THE SUBSCRIPTION TO THE SHARE CAPITAL AND PREMIUM TO THE EXTENT OF RS. 13,00,00,000/- INTRODUCED IN THIS CASE. THE A.O. SHOULD TRACE THE SOURCE OF SHAR E CAPITAL BY ENQUIRING INTO THE VARIOUS LAYERS THROUGH WHICH THE MONEY HAS BEEN INT RODUCED IN THIS COMPANY AS SHARE CAPITAL AND ALSO EXAMINE THE DIRECTORS OF SUB SCRIBER COMPANIES BY ISSUING SUMMONS U/S 131 OF THE I.T. ACT. THE A.O. SHOULD SE ND INFORMATION TO THE A.OS. HAVING JURISDICTION OVER THE SUBSCRIBER COMPANY TO THE SHARE CAPITAL REGARDING ITS INVESTMENT INTO SHARE CAPITAL & PREMIUM PAID. THE A .O. SHOULD CONDUCT INDEPENDENT ENQUIRES TO VERIFY THE DOCUMENTS FILED BEFORE HIM IN RESPECT OF PROOF OF SUBSCRIPTION TO SHARE CAPITAL. THE A.O. SHOULD N OT CONFINE HIMSELF TO CONDUCTING ENQUIRIES INTO THE SUBSCRIBERS TO THE SH ARE CAPITAL ONLY ON SELECTIVE BASIS. THE A.O. SHOULD ALSO CALL UPON THE ASSESSEE TO IDENTIFY THE PERSONS WHO ARE SHOWN AS DIRECTORS OF THE ASSESSEE COMPANY AND EXAM INE THEM ON OATH TO VERIFY THEIR CREDENTIAL AS DIRECTORS. THE A.O. SHOULD PASS SPEAKING ORDER AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE AND VERIFYIN G THE SOURCE OF SHARE CAPITAL INCLUDING THE SHARE PREMIUM OF ALL THE SUBSCRIBERS AND ROTATION OF MONEY THROUGH VARIOUS BANDS SO AS TO ASCERTAIN THE TRUE NATURE OF TRANSACTION WHICH WILL BRING TO THE FORE, THE REALITY OF THE TRANSACTIONS. HENCE THE ORDER PASSED BY THE A.O. U/S 143(3) R/W 1 47 FOR THE AY 2008-09 IS SET ASIDE TO BE FRAMED DE-NOVO AS PER DIRECTIONS CONTAI NED IN THE ABOVE PARTS OF THIS ORDER. THE LD. COUNSEL FURTHER POINTED OUT THAT CO-ORDINAT E BENCHES OF ITAT, KOLKATA ARE REMITTING THE CASE BACK TO THE FILE OF ASSESSIN G OFFICER, BASED ON THE SIMILAR M/S AKASHDEEP COMMODITIES PVT. LTD. ITA NO.1920/KOL/2017 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 3 33 3 IDENTICAL FACTS WHERE THE ASSESSING OFFICER FAILED TO CONDUCT INDEPENDENT ENQUIRY AS PER THE DIRECTIONS GIVEN BY THE LD. CIT U/S 263 OF THE ACT. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE ASSESSEE COULD NOT PLEAD HIS CASE AT THE ASSESSMENT STAGE BECAUSE OF NON-RECEIPT OF NOTICES U/S 142(1). WE ALSO NOTE THAT THE ASSESSING OFFICER HAS NOT FRAMED THE ASSESSMENT AS PER DIRECTION GIVEN BY THE LD. CIT U/S 263 OF THE ACT. THEREFORE, WE REMIT THE ISSUE BACK TO THE FILE OF T HE ASSESSING OFFICER FOR FRESH ADJUDICATION. FOR THAT WE RELY ON THE JUDGMENT OF T HE CO-ORDINATE BENCH IN THE CASE OF SUKANNYA MERCHANTS VS. ITO IN I.T.A. NO. 29 1/KOL/2016 DATED 15.12.2017 RESTORING THE VERY SAME ISSUE BACK TO THE ASSESSING OFFICER IN IDENTICAL CIRCUMSTANCES AS UNDER: WE NOTE THAT THE AO PURSUANT TO THE ORDER OF LD. C IT HAD TAKEN NOTE OF THE DIRECTIONS OF THE LD. CIT AND ISSUED NOTICE U/S . 142(1) DATED 16.08.2013 AND HAS ACKNOWLEDGED THAT THE ASSESSEE H AD FURNISHED THE COPY OF FINAL ACCOUNT, I. T. ACKNOWLEDGEMENT, BANK STATEMENT FOR THE RELEVANT PERIOD EVIDENCING THE RECEIPT OF SHARE APP LICATION MONEY FROM THE SHARE APPLICANTS. THEREAFTER, THE AO MAKES CER TAIN INFERENCES BASED ON THE LIST OF SHAREHOLDERS AND TAKING NOTE OF THE BANK STATEMENT FURNISHED BY THE ASSESSEE. WE NOTE THAT AFTER THE INITIAL NOTICE DATED 16.08.2013, THEREAFTER THE AO HAD ISSUED THE NOTICE ON 26.02.2014 WHICH HAS BEEN REPRODUCED AT PAGE 3 OF THE REASSESSMENT O RDER, WHEREIN AO REQUIRED THE DIRECTORS OF THE ASSESSEE COMPANY TO B E PRESENT BEFORE HIM ON 06.03.2014. HOWEVER, ACCORDING TO THE LD. AR, T HE ASSESSEE RECEIVED THE NOTICE ONLY ON 07.03.2014 AND THEREAFTER, THE A SSESSEE REQUESTED THE AO TO PROVIDE ANOTHER OPPORTUNITY OF HEARING VIDE I TS LETTER DATED 20.03.2014. THEREAFTER, THE AO FIXED THE DATE OF H EARING ON 12.03.2014 VIDE NOTICE DATED 10.03.2014. SO, ACCORDING TO THE ASSESSEE COMPANY SINCE THE DIRECTORS WERE NOT IN STATION TILL 23.03. 2014, THE LD. AR HAD REQUESTED FOR ADJOURNMENT TILL THAT TIME. THOUGH TH E AO HAS STATED THAT HE HAS ISSUED SUMMONS ON 24.03.2014 TO THE ASSESSEE COMPANY TO PRODUCE THE DIRECTORS OF THE COMPANY BEFORE HIM ON 26.03.2014, THE ASSESSEE COMPANY CONTENDED THAT IT HAS NOT RECEIVED THE SAID SUMMON AND, THEREFORE, COULD NOT MAKE THE PERSONAL APPEARA NCE. THE AO HAS DRAWN ADVERSE CONCLUSION BASICALLY BECAUSE OF NON-A PPEARANCE OF THE DIRECTORS OF THE ASSESSEE COMPANY AND THAT OF THE S HAREHOLDER COMPANIES. WE NOTE THAT INITIALLY THE AO STARTED T HE ENQUIRY ON 16.08.2013 WHICH WAS COMPLIED BY THE ASSESSEE BY SU BMITTING DOCUMENTS WHICH HAS BEEN ACKNOWLEDGED BY THE AO. THEREAFTER, THE ENQUIRY WAS STARTED ONLY AT THE FAG END OF FEBRUARY 2014 AND TH E ASSESSEE COMPANY M/S AKASHDEEP COMMODITIES PVT. LTD. ITA NO.1920/KOL/2017 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 4 44 4 HAD INFORMED THE AO THAT THEIR DIRECTORS WERE OUT O F STATION TILL 23.03.2014. IN THE LIGHT OF THE AFORESAID FACTS, W E ARE OF THE OPINION THAT THE ASSESSEE DID NOT GET FAIR OPPORTUNITY TO PRESEN T THE EVIDENCES BEFORE THE AO SO, THERE WAS A LACK OF OPPORTUNITY AS AFORE SAID, THEREFORE, IT HAS TO GO BACK TO AO. 8. WE ALSO NOTE THAT LD. CIT WHILE SETTING ASIDE TH E ORDER OF THE AO WHICH WAS PASSED U/S. 147/143(3) OF THE ACT, THE LD . CIT GAVE CERTAIN GUIDELINES TO FOLLOW FOR CONDUCTING DEEP INVESTIGAT ION. WE ALSO NOTE THAT SIMILARLY PLACED ASSESSEES HAD CHALLENGED THE EXERC ISE OF REVISIONAL JURISDICTION U/S. 263 OF THE ACT BEFORE THIS TRIBUN AL IN THOSE CASES ONE OF IT OF SUBHA LAKSHMI VANIJYA PVT. LTD. VS. CIT IN IT A NO. 1104/KOL/2014 DATED 30.07.2015, WHEREIN THE TRIBUNAL WAS PLEASED TO UPHOLD THE ORDER PASSED BY THE LD. CIT PASSED U/S. 263 OF THE ACT, W HICH WE LEARN TO HAVE BEEN CONFIRMED BY THE HONBLE JURISDICTIONAL HIGH C OURT AND THE SLP PREFERRED AGAINST THE DECISION OF THE HONBLE JURIS DICTIONAL HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. TH EREFORE, SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD. WE NOTE THAT THE AO WHILE GIVING EFFECT TO THE CITS 263 OR DER HAS NOTED THAT THE ASSESSEE COMPANY HAS IN FACT FURNISHED THE DOCUMENT S SOUGHT BY HIM TO HIS NOTICE U/S. 142(1) OF THE ACT. HOWEVER, THE AO TOOK THE ADVERSE VIEW AGAINST THE ASSESSEE ON THE PLEA THAT THE DIRECTORS OF THE ASSESSEE COMPANY AND SHARE SUBSCRIBING COMPANIES HAD NOT AP PEARED BEFORE HIM ON 26.03.2014 AND T AFTER TAKING NOTE THAT NONE APP EARED ON 26.03.2014 CONCLUDED ON THE SAME DAY 26.03.2014 THAT ENTIRE A MOUNT OF SHARE APPLICATION MONEY RECEIVED ALONG WITH PREMIUM AMOUN TING TO RS.8,06,00,000/- WHICH HAS REMAINED UNEXPLAINED A ND ADDED TO THE INCOME OF THE ASSESSEE. WE ALSO NOTE THAT THE LD. C IT AFTER LOOKING INTO THE PERNICIOUS PRACTICE OF CONVERTING BLACK MONEY I NTO WHITE MONEY HAS GIVEN THE GUIDELINES TO AO AS TO HOW THE INVESTIGAT ION SHOULD BE CONDUCTED TO FIND OUT THE SOURCE OF SOURCE. SINCE SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD BY T HE TRIBUNAL AS WELL AS BY THE HONBLE CALCUTTA HIGH COURT AS WELL AS THE S LP HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT, SIMILAR ORD ER OF THE LD. CIT HAS TO BE GIVEN EFFECT TO AS DIRECTED BY THE LD. CI T. WE TAKE NOTE THAT THE LD. CIT WITH HIS EXPERIENCE AND WISDOM HAS GIVEN CE RTAIN 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, GENUINENES S AND CREDITWORTHINESS OF THE SHARE SUBSCRIBERS. WE NOTE THAT THE HONBLE SUPREME COURT IN THREE JUDGES BENCH IN THE CASE OF TIN BOX, (SUPRA), HAS HELD THAT SINCE THERE WAS LACK OF OPPORTUNITY TO THE ASSESSEE AT TH E ASSESSMENT STAGE ITSELF, THE ASSESSMENT NEEDS TO BE DONE AFRESH AND THEREBY REVERSED THE HONBLE HIGH COURT, TRIBUNAL AND CIT(A)S ORDERS A ND REMANDED THE MATTER BACK TO AO FOR FRESH ASSESSMENT. SO, SINCE THERE WAS LACK OF OPPORTUNITY AS AFORESTATED IT HAS TO GO BACK TO AO. WE ALSO NOTE THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JA NSAMPARK M/S AKASHDEEP COMMODITIES PVT. LTD. ITA NO.1920/KOL/2017 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 5 55 5 ADVERTISING & MARKETING PVT. LTD. IN ITA NO. 525/20 14 DATED 11.03.2015 WHEREIN AFTER NOTICING INADEQUATE ENQUIRY BY AUTHO RITIES BELOW HAVE HELD AS UNDER: 41. WE ARE INCLINED TO AGREE WITH THE CIT(APPEALS) , AND CONSEQUENTLY WITH ITAT, TO THE EXTENT OF THEIR CONC LUSION THAT THE ASSESSEE HEREIN HAD COME UP WITH SOME PROOF OF IDEN TITY OF SOME OF THE ENTRIES IN QUESTION. BUT, FROM THIS INFERENCE, OR FORM THE FACT THAT THE TRANSACTIONS WERE THROUGH BANKING CHANNELS, IT DOES NOT NECESSARILY FOLLOWING THAT SATISFACTION AS TO THE C REDITWORTHINESS OF THE PARTIES OR THE GENUINENESS OF THE TRANSACTIONS IN QUESTION WOULD ALSO HAVE BEEN ESTABLISHED. 42. THE AO HERE MAY HAVE FAILED TO DISCHARGE HIS OB LIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGI CAL CONCLUSION. BUT CIT(APPEALS), HAVING NOTICED WANT OF PROPER INQ UIRY, COULD NOT HAVE CLOSED THE CHAPTER SIMPLY BY ALLOWING THE APPE AL AND DELETING THE ADDITIONS MADE. IT WAS ALSO THE OBLIGATION OF T HE FIRST APPELLATE AUTHORITY, AS INDEED OF ITAT, TO HAVE ENSURED THAT EFFECTIVE INQUIRY WAS CARRIED OUT, PARTICULARLY IN THE FACT OF THE AL LEGATIONS OF THE REVENUE THAT THE ACCOUNT STATEMENTS REVEAL UNIFORM PATTERN OF CASH DEPOSITS OF EQUAL AMOUNTS IN THE RESPECTIVE ACCOUNT S PRECEDING THE TRANSACTIONS IN QUESTION. THIS NECESSITATED A DETAI LED SCRUTINY OF THE MATERIAL SUBMITTED BY THE ASSESSEE IN RESPONSE TO T HE NOTICE UNDER SECTION148 ISSUED BY THE AO, AS ALSO THE MATERIAL S UBMITTED AT THE STAGE OF APPEALS, IF DEEMED PROPER BY WAY OF MAKING OR CAUSING TO BE MADE A 'FURTHER INQUIRY IN EXERCISE OF THE POWE R UNDER SECTION 250(4). HIS APPROACH NOT HAVING BEEN ADOPTED, THE I MPUGNED ORDER OF ITAT, AND CONSEQUENTLY THAT OF CIT(APPEALS), CAN NOT BE APPROVED OR UPHELD.' IN VIEW OF THE AFORESAID ORDER AND IN THE LIGHT OF THE HONBLE SUPREME COURTS DECISION IN TIN BOX COMPANY (SUPRA) AND TAK ING INTO CONSIDERATION THE FACT THE ORDER OF THE LD. CIT PAS SED U/S. 263 OF THE ACT IN SIMILAR CASES BEING UPHELD UP TO THE LEVEL OF AP EX COURT, AND TAKING NOTE OF HONBLE DELHI HIGH COURTS ORDER IN JANSAMP ARK ADVERTISING & MARKETING PVT. LTD. (SUPRA), WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF AO FOR DE NOV O ASSESSMENT AND TO DECIDE THE MATTER IN ACCORDANCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. THEREFORE CONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AND THE FACT THAT THE ASSESSEE COULD NOT PLEAD HIS CASE AT THE ASSESSMENT STAGE DUE TO NON-RECEIPT OF NOTICE AND THE LD. ASSESSING OFFI CER FAILED TO PASS THE ASSESSMENT ORDER AS PER THE DIRECTIONS GIVEN BY THE COMMISSION ER OF INCOME TAX U/S 263 OF M/S AKASHDEEP COMMODITIES PVT. LTD. ITA NO.1920/KOL/2017 ASSESSMENT YEAR:2008-09 P PP PA AA AG GG GE EE E | || | 6 66 6 THE ACT. HENCE WE SET ASIDE THE ORDER OF THE LD. CI T(A), AND REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO AD JUDICATION. FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 29.0 3.2019 SD/- ( A.T.VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 29/03/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. M/S AKASHDEEP COMMODITIES PVT. LTD. 2. ITO, WARD-1(2), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES