ACIT, CC - 4(1), Kolkata , Kolkata V. M/s. Dynamic Infrastructure Pvt. Ltd., , Kolkata

ITA 1944/KOL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5725 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHARY
• Keywords: Unexplained cash credit; Assessment record
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B, KOLKATA BEFORE SH. S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] ACIT C.C.- 4(1), 110, SHANTI PALLY, KOLKATA- 700107. VS M/S. DY NAMIC INFRASTRUCTURE PVT. LTD. 33/1, N.S. BOSE, KOLKATA-700001. PAN- AACCD3402E (APPELLANT) (RESPONDENT) APPELLANT BY SH. ROBIN CHOUDHARY, DR RESPONDENT BY NONE DATE OF HEARING 22.07.2019 DATE OF PRONOUNCEMENT 07 .08.2019 ORDER PER SH. S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2012-13, ARISES AGAINST THE ORDER DATED 24.04.2017 PASSED BY THE CIT(A)-23, KOLKATA IN APPEAL NO. 268/CIT(A)- 23/TECH-2/16-17 IN PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). 2. CASE CALLED TWICE. NONE APPEARS AT ASSESSEES BEHEST. THE REGISTRY HAS ALREADY SENT IT BY AN RPAD NOTICE. IT IS ACCORDINGLY PROCEEDED EX-PARTE . 3. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN REVERSING THE ASSESSING OFFICERS ACTION TREATING THE ASSESSEES ALLEGED SHARE APPLICATION/PREMIUM OF RS. 1,60,00,000/- RECEIVED FROM M/S. S.K. ENTERPRISE AND M/S. SWADESHI UDYOG AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. HE SUBMITS THAT THE ASSESSEE COULD NOT PROVE ALL THREE RELEVANT PARAMETERS OF IDENTITY, GENUINENESS AND CREDITWORTHINESS OF ITS TWO INVESTORS. COUPLED WITH THIS, MR. CHOUDHARYS CASE IS THAT THERE IS HARDLY ANY JUSTIFICATION FOR ASSESSEES EXTRAORDINARY HIGH PREMIUM OF RS. 1990 PER SHARE KEEPING IN MIND ITS NEGLIGIBLE BUSINESS ACTIVITY. HE QUOTES THIS TRIBUNALS DECISION IN [2018] 91 TAXMANN.COM 176 (KOLKATA-TRIB.) ITA VS. BLESSINGS COMMERCIAL (P.) LTD. , HONBLE DELHI HIGH COURTS JUDGEMENT IN [2015] 56 TAXMANN.COM 286 (DELHI) CIT VS. ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 2 JANSAMPARK ADVERTISING & MARKETING P. LTD. AS WELL AS CIT VS. DURGA PRASAD MORE 82 ITR 540 AND SUMATI DAYAL VS. CIT 214 ITR 801 IN SEEKING TO RESTORE THE ASSESSING OFFICERS ACTION TREATING ASSESSEES SHARE CAPITAL/PREMIUM AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT.. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE REVENUES INSTANT GRIEVANCE. CASE FILE PERUSED. THE CIT(A)S FINDINGS UNDER CHALLENGE DELETING THE IMPUGNED ADDITION READ AS UNDER: ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 3 ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 4 ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 5 ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 6 ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 7 ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 8 ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 9 ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 10 ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 11 5. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO THE FACTS INVOLVED AS WELL AS THE RELEVANT MATERIAL IN THE RELEVANT CASE FILE, WE SEE NO MERIT IN REVENUES ARGUMENTS. WE MAKE IT CLEAR THAT THERE IS NO DISPUTE ABOUT THE ASSESSEE HAVING RECEIVED THE IMPUGNED SHARE CAPITAL/PREMIUM FROM THE TWO ENTITIES TO THE TUNE OF RS. 50,00,000/- AND 1,10,00,000/-; RESPECTIVELY. THE CIT(A) HAS RECORDED THE CLINCHING FINDING OF FACT THAT THESE TWO INVESTOR ENTITIES ARE RELATED TO THE ASSESSEE (SUPRA) WHEREIN IT HAS PLACED ON RECORD SUPPORTIVE DOCUMENTS AS WELL AS DIRECTORS PARTICULARS/STATEMENTS IN SUPPORT OF THE GENUINENESS OF THE SHARE CAPITAL IN ISSUE. MR. CHOWDHURY FAILS TO DISPUTE THAT THE ASSESSING OFFICERS ASSESSMENT ORDER DATED 31.03.2015 NOWHERE CONSIDERED ALL THIS MATERIAL WHILST MAKING THE IMPUGNED ADDITION. THE ASSESSEE HAS THEREFORE DISCHARGED ITS ONUS OF PROVING IDENTITY, GENUINENESS AND CREDITWORTHINESS OF ITS SHARE CAPITAL/PREMIUM SUM IN ISSUE FROM THE TWO PARTIES. HONBLE GUJARAT HIGH COURTS DECISION IN TAX APPEAL NO. 1180/2018 PCIT VS. GYSCOAL ALLOYS LTD. UPHOLDS THIS TRIBUNALS ORDER DELETING AN IDENTICAL ADDITION IN CASE OF ASSOCIATE CONCERNS AS FOLLOWS: WHETHER APPELLATE TRIBUNAL HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF RS. 9,99,99,900/= AS PER THE PROVISION OF SECTION 68 OF THE INCOME-TAX ACT, WITHOUT PROPERLY APPRECIATING THE FACTS OF CASE AND THE MATERIAL BROUGHT ON RECORD ?' C/TAXAP/1180/2018 ORDER THE ISSUE PERTAINS TO THE SHARE APPLICATION MONEY RECEIVED BY THE RESPONDENT-ASSESSEE-COMPANY. THE ASSESSING OFFICER ADDED A SUM OF RS. 9.99 CRORES [ROUNDED OFF] IN THE HANDS OF THE ASSESSEE ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 12 WITH THE AID OF SECTION 68 OF THE INCOME-TAX ACT, 1961 ['THE ACT' FOR SHORT]. CIT [A] DELETED SUCH ADDITION PRIMARILY ON THE GROUND THAT THE ASSESSEE HAD ESTABLISHED THE SOURCE, GENUINENESS OF THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE INVESTORS. IN FURTHER DETAILED CONSIDERATION, THE TRIBUNAL CONFIRMED THE VIEW OF CIT [A], MAKING THE FOLLOWING OBSERVATIONS:- 'I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT. THE APPELLANT HAS RECEIVED AN AMOUNT OF RS. 9,99,99,900/- ON ACCOUNT OF SHARE CAPITAL AND SHARE PREMIUM FROM M/S. GENERAL CAPITAL AND HOLDING CO. PVT. LTD, AHMEDABAD DURING THE YEAR. THE AO HELD THAT THE CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTION WERE NOT PROVED BY THE APPELLANT AND ACCORDINGLY MADE THE ADDITION UNDER SECTION 68 OF THE ACT FOR THE ABOVE AMOUNT. THE APPELLANT HAS SUBMITTED THAT ALL THREE INGREDIENTS SUCH AS, CREDIT WORTHINESS, GENUINENESS AND THE IDENTITY OF THE SHARE APPLICANT HAVE BEEN PROVED AND THEREFORE, THE ADDITION SHOULD NOT HAVE BEEN MADE BY THE AO. C/TAXAP/1180/2018 ORDER DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSMENT RECORDS WERE ALSO OBTAINED FROM AO AND THE SAME HAVE ALSO BEEN EXAMINED BY ME TO ASCERTAIN THE FACTS CORRECTLY. THE SHARE APPLICANT COMPANY M/S. GENERAL CAPITAL HAS BEEN DULY CONFIRMED THE FACT OF MAKING INVESTMENT IN THE APPELLATE COMPANY. THE AMOUNTS HAVE BEEN RECEIVED THROUGH BANKING CHANNEL. THE SAME ARE DULY REFLECTED IN THE ANNUAL ACCOUNTS OF THAT COMPANY. THE EXTRACTS OF THE BANK STATEMENT WHICH HAVE BEEN FILED BEFORE ME DURING THE COURSE OF APPELLATE PROCEEDINGS AS WELL AS BEFORE THE AO CLEARLY SHOW THAT THERE ARE NO CASH DEPOSITS AS MENTIONED BY THE AO IN THE ASSESSMENT ORDER. THE OBSERVATION OF THE AO THAT THE CASH HAS BEEN DEPOSITED AND SUBSEQUENTLY CHEQUES WERE ISSUED IS FACTUALLY INCORRECT. THE DIRECTOR OF THE COMPANY ALSO ATTENDED BEFORE AO AND CONFIRMED THE FACT. IT IS ALSO NOTED THAT BOTH THE COMPANIES, THAT IS THE APPELLANT COMPANY AS WELL AS THE SHARE APPLICANT ARE MANAGED BY THE SAME GROUP OF PERSONS. HONOURABLE HIGH COURT OF GUJARAT HAS CONSISTENTLY HELD THAT IF THE ASSESSEE HAS GIVEN SUFFICIENT PROOF IN RESPECT OF THE SHARE APPLICATION, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. IF THE AO HAS ANY DOUBT ABOUT THE SOURCE OF THE SHARE APPLICANT FURTHER INVESTIGATION CAN BE MADE IN THE HANDS OF THE SHARE APPLICANT, BUT NOT IN THE CASE OF THE APPELLANT. .' C/TAXAP/1180/2018 ORDER IT CAN THUS BE SEEN THAT THE ENTIRE ISSUE IS BASED ON APPRECIATION OF MATERIAL ON RECORD. CIT [A] AND THE TRIBUNAL CONCURRENTLY CAME TO THE CONCLUSION THAT THE ASSESSEE HAD DISCHARGES ITS BASIC ONUS. THE INVESTORS HAVE CONFIRMED THE TRANSACTIONS. SUCH TRANSACTIONS WERE CARRIED OUT THROUGH THE BANKING CHANNEL. THE DIRECTOR OF THE INVESTING COMPANY HAD ALSO APPEARED BEFORE THE ASSESSING OFFICER AND ALSO CONFIRMED THE TRANSACTIONS. THE CIT [A] AND THE TRIBUNAL ALSO DID NOT CONFIRM THE ASSESSING OFFICER'S FINDING THAT THE ASSESSEE FAILED TO ESTABLISH THE CREDITWORTHINESS OR GENUINENESS OF THE TRANSACTIONS. 6. MR. CHOWDHURY RETREATED AT THIS STAGE THAT SECTION 68 OF THE ACT IS A SELF- EXHAUSTIVE PROVISION WHEREIN ALL THE RELEVANT FACTS HAVE TO BE EXAMINED IN LIGHT OF ASSESSEES EXPLANATION. HE THEN INVITES OUR ATTENTION ONCE AGAIN TO ASSESSEES EXORBITANT RATE OF PREMIUM (SUPRA). WE AGAIN FIND NO SUBSTANCE IN ALL THESE ARGUMENTS. HONBLE GUJARAT HIGH COURTS DECISION IN PUSHPAK BULLION PVT. LTD. VS. DCIT [2016] 71 TAXMANN.COM 326 (GUJ) HOLDS THAT THE MERE FACT OF SUCH AN SIZABLE PREMIUM DOES NOT IPSO-FACTO LEAD TO THE CONCLUSION THAT THE SAME HAS BEEN ITA NO. 1944/KOL/2017 [ASSESSMENT YEAR: 2012-13] M/S. DYNAMIC INFRASTRUCTURE PVT. LTD. PAGE | 13 ARTIFICIALLY INCREASED. KEEPING IN MIND ALL THESE RELEVANT FACTS AND CIRCUMSTANCES AND MORE SO WHEN THE ASSESSEE HEREIN HAS SUFFICIENTLY PROVED THE INVESTOR ENTITIES TO BE RELATED PARTIES (SUPRA) ALONG WITH THEIR IDENTITY, GENUINENESS AND CREDITWORTHINESS BY WAY OF SUFFICIENT DOCUMENTARY EVIDENCE PRODUCED BEFORE THE ASSESSING OFFICER, WE CONCLUDE THAT THE CASE LAW QUOTED AT THE REVENUES BEHEST DOES NOT APPLY IN PECULIAR FACTS INVOLVED IN THE INSTANT CASE. THE CIT(A)S FINDINGS UNDER CHALLENGE ARE UPHELD. DELAY OF 54 DAYS IN FILING THE INSTANT APPEAL IS CONDONED AS PER REVENUES AVERMENT IN CONDONATION PETITION. 7. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.08.2019. SD/- SD/- (A.L. SAINI) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:- 07.08.2019 BIDHAN COPY FORWARDED TO: 1. APPELLANT- ACIT, C.C.- 4(1), 110, SHANTI PALLY, KOLKATA- 700107. 2. RESPONDENT- M/S. DYNAMIC INFRASTRUCTURE PVT. LTD., 33/1, N.S. BOSE, KOLKATA-700001. 3. CIT-KOLKATA 4. CIT(APPEALS)-23, KOLKATA (SENT THROUGH MAIL) 5. DR: ITAT-KOLKATA BENCHES (SENT THROUGH MAIL) AR/H.O.O ITAT, KOLKATA