ACIT, Circle -1, Durgapur, Durgapur V. M/s. Nirman Construction, Durgapur

ITA 1962/KOL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4776 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 04-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Unexplained cash credit; Tax effect
• Section: 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1962/KOL/2017 ( / ASSESSMENT YEAR:2007-08) ACIT, CIRCLE-1, DURGAPUR VS. M/S NIRMAN CONSTRUCTION S.B.S.T.C BUS TERMINUS COMPLEX, DURGAPUR-713216. ./ ./PAN/GIR NO.: AAEFN 8215 E (APPELLANT) .. (RESPONDENT) ./ITA NO.2067/KOL/2017 ( / ASSESSMENT YEAR: 2007-08) M/S NIRMAN CONSTRUCTION S.B.S.T.C BUS TERMINUS COMPLEX, DURGAPUR-713216. VS. ACIT, CIRCLE- 1, DURGAPUR ./ ./PAN/GIR NO.: AAEFN 8215 E (APPELLANT) .. (RESPONDENT) APPELLANT BY : SMT. RANU BISWAS, ADDL. CIT RESPONDENT BY :NONE / DATE OF HEARING : 16/12/2019 /DATE OF PRONOUNCEMENT : 21/02/2020 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED CROSS APPEALS FILED BY THE REVENUE AND ASSESSEE , PERTAINING TO ASSESSMENT YEAR 2007-08, ARE DIRECTED AGAINST TH E COMMON ORDER PASSED BY THE M/S NIRMAN CONSTRUCTION ITA NOS.1962&2067/KOL/2017 ASSESSMENT YEAR:2007-08 P PP PA AA AG GG GE EE E | || | 2 22 2 COMMISSIONER OF INCOME TAX (APPEAL)-DURGAPUR IN APP EAL NO. 54/CIT(A)/DGP/2009-10, WHICH IN TURN ARISE OUT OF C OMMON ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S143(3) OF THE IN COME TAX ACT, 1961 (IN SHORT THE ACT) DATED 31/12/2009. 2. SINCE THESE TWO APPEALS PERTAIN TO THE SAME ASSE SSEE, COMMON AND IDENTICAL ISSUES ARE INVOLVED, THEREFORE THESE HAVE BEEN CLUB BED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DIS POSED OF EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON M ERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. 4. FIRST WE SHALL TAKE REVENUES APPEAL IN ITA NO. 1962/KOL/2017, FOR A.Y. 2007- 08 WHERE WE NOTICED THAT REVENUE HAS RAISED GROUND IN RESPECT OF ADDITION DELETED BY THE LD. CIT(A) OF RS. 97,20,743/-, WHICH COMES I N THE AMBIT OF TAX EFFECT OF CBDT CIRCULAR VIDE CIRCULAR NO. 17/2019 DATED 08.08 .2019. 5. RECENTLY THE CBDT HAS ISSUED CIRCULAR NO. 17/201 9 DATED 08.08.2019, WHEREBY THE MONETARY LIMITS FOR FILING OF APPEALS BY THE D EPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT HAVE BEEN INCREASED AS MEASURE FOR REDUCING LITIGATION. THE REVISED MONETARY LIMITS LAID DOWN IN PARA-2 OF THIS CIRCULAR ARE AS FOLLOWS: 1. BEFORE APPELLATE TRIBUNAL RS. 50,00,000/- 2. BEFORE HIGH COURT RS.1,00,00,000/- 3. BEFORE SUPREME COURT RS. 2,00,00,000/- M/S NIRMAN CONSTRUCTION ITA NOS.1962&2067/KOL/2017 ASSESSMENT YEAR:2007-08 P PP PA AA AG GG GE EE E | || | 3 33 3 6. IN THE PRESENT CASE, THE TAX EFFECT BY THE REVE NUE IS LESS THAN RS.50,00,000/-. THOUGH THIS APPEAL HAD BEEN FILED BY THE REVENUE ON 04/09/2017 AND WAS WITHIN THE MONETARY LIMIT IN THE FORM OF TAX EFFECT FOR FI LING APPEALS BEFORE TRIBUNAL, IN VIEW OF THE RECENT CIRCULAR OF CBDT, EVEN SUCH APPE ALS WILL BE GOVERNED BY THE NEW MONETARY LIMITS LAID DOWN IN THE CBDT CIRCULAR NO.17/2019 REFERRED TO ABOVE. 7. IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APEX CO URT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION L TD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISI ONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID D OWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. THE APPEAL UNDER CONSIDERATION HAS CERTAINLY BEEN F ILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT CIRCULAR NO.17 DATED 08.08.2019 8. IN THE EVENT, THE REVENUE FINDS AT A LATER POINT OF TIME THAT THE TAX EFFECT IN THE APPEAL IS MORE THAN RS.50 LAKHS OR DESPITE LOW TAX EFFECT THE APPEAL OF THE REVENUE IS MAINTAINABLE, THE REVENUE IS AT LIBERTY TO MOVE THIS TRIBUNAL FOR RECALLING OF THIS ORDER. 9. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEAL FI LED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), IS CO NTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAL FILED BY THE DEPARTMENT IN ITA NO. 1962/KOL/2017 IS DISMISSED IN LIMINE . 10. NOW, WE SHALL TAKE ASSESSEES APPEAL IN ITA NO. 2067/KOL/2017 FOR A.Y. 2007-08 WHEREIN THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS), DU RGAPUR IS ERRED IN CONSIDERING THE FACTS AND CIRCUMSTANCES WHILE MAKIN G ADDITIONS OF RS. M/S NIRMAN CONSTRUCTION ITA NOS.1962&2067/KOL/2017 ASSESSMENT YEAR:2007-08 P PP PA AA AG GG GE EE E | || | 4 44 4 73,10,365/- AS BOGUS AND UNEXPLAINED CASH CREDIT WH ICH IS ARBITRARY IN NATURE AND DEVOID OF FACTS AND BASELESS. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS), DU RGAPUR IS ERRED IN CONSIDERING THE FACTS AND CIRCUMSTANCES WHILE MAKIN G ADDITIONS OF RS. 6,82,689/- AS INFLATED SUNDRY LIABILITIES MERELY RE LYING ON THIRD PARTIES CONFIRMATION WITHOUT AFFORDING ANY OPPORTUNITY TO R EBUTE IN THIS REGARD WHICH IS ARBITRARY IN NATURE AND DEVOID OF FACTS AN D BASELESS. 3. THAT THE ASSESSEE CRAVES LEAVE TO ADD OR TO MODI FY OR ALTER ANY GROUND OR GROUNDS BEFORE OR AT THE TIME OF HEARING OF APPEAL . 11. AT THE OUTSET ITSELF, HAVING GONE THROUGH THE L D. CIT(A)S ORDER WE NOTE THAT THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 73, 10,365/- WHICH HAS BEEN CONFIRMED BY THE LOWER AUTHORITIES ON ACCOUNT OF BO GUS AND UNEXPLAINED CASH CREDIT. WE NOTE THAT THE LD. CIT(A) HAS ADJUDICATED THE ISSUE BY TAKING INTO ACCOUNT THE INDIVIDUAL CREDITORS VIDE DETAILED DISCUSSION O F THE LD. CIT(A)S ORDER, PAGE 17 TO 29 OF HIS ORDER WHEREIN HE ANALYZED THE INDIVIDU AL SUNDRY CREDITORS AND REACHED ON CONCLUSION BASED ON THE FINDINGS AND DOCUMENTS S UBMITTED BY THE ASSESSEE. HAVING SCRUTINIZED THE INDIVIDUAL CREDITORS, THE LD . CIT(A) DELETED SOME OF ADDITIONS WHERE HE FOUND THAT THE ASSESSEE HAS SUBM ITTED DOCUMENTS CONFIRMATION AND PROOF IN RESPECT OF SUNDRY CREDITORS.FOR BALANC E CREDITORS WHEREIN THE LD. CIT(A) NOTICED THAT THE ASSESSEE HAS FAILED TO FILE A REQUISITE DOCUMENTS STATEMENT AND CONFIRMATION AND PROOF OF EXISTENCE OF SUNDRY C REDITORS, HE SUSTAINED THE ADDITION MADE BY ASSESSING OFFICER. WE HAVE GONE TH ROUGH THE DETAILED REASONING GIVEN IN THE APPELLATE ORDER VIDE PAGE NO. 17 TO 18 OF THE LD. CIT(A)S ORDER AND WE NOTE THAT THE CONCLUSION REACHED BY THE LD. CIT( A) NEED NOT TO BE INTERFERED THEREFORE WE CONFIRM THE ADDITION OF RS. 73,10,365/ - . 12. THE ADDITION OF RS. 6,82,689/- RELATING TO INFL ATED SUNDRY LIABILITIES WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A) AS THE ASSESSEE HA S FAILED TO FILE THE RECONCILIATION OF THE SUNDRY LIABILITIES BEFORE THE LOWER AUTHORITIES. WE HAVE GONE THROUGH THE FINDINGS OF THE ASSESSMENT ORDER AND FI NDINGS OF THE APPELLATE ORDER. THE LD. CIT(A) POINTED OUT THAT ASSESSEE HAS NOT FI LED THE RECONCILIATION AND M/S NIRMAN CONSTRUCTION ITA NOS.1962&2067/KOL/2017 ASSESSMENT YEAR:2007-08 P PP PA AA AG GG GE EE E | || | 5 55 5 CONFIRMATION OF EXCESS SUNDRY LIABILITIES. WE ARE OF THE VIEW THAT THIS ISSUE SHOULD BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFIC ER WITH THE DIRECTION TO THE ASSESSEE TO FILE THE RECONCILIATION AND CONFIRMATIO N OF EXCESS SUNDRY LIABILITIES BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO ADJUDICATE THE ISSUE IN ACCORDANCE TO LAW. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IN I TA NO. 1962/KOL/2017 IS DISMISSED AND THE APPEAL OF THE ASSESSEE IN ITA NO. 2067/KOL/2017 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 21.02.2020 SD/- ( S.S. GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 21/02/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. ACIT, CIRCLE-1, DURGAPUR 2. M/S NIRMAN CONSTRUCTION 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES