Acuity Vyapaar Pvt. Ltd., Kolkata V. ITO, Ward - 6(3), Kolkata, Kolkata

ITA 1966/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2039 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 04-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R SHYAM
• Assessee Lawyers: M TIWARI
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice
• Section: 142(1); 68; 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & HONB LE SHRI A.T.VARKEY, JM ] I.T.A NO. 1966/KOL/20 17 ASSESSMENT YEAR : 2008-0 9 ACUITY VYAPAAR PVT. LTD. -VS- ITO, WARD-6(3) , KOLKATA [PAN: AAGCA 5343 P] (APPELLANT) ( RESPONDENT) FOR THE APPELLANT : SHRI M. TIWARI, FCA FOR THE REVENUE : SHRI R. SHYAM, CIT(DR) DATE OF HEARING : 08.11.2018 DATE OF PRONOUNCEMENT : 16.11.2018 ORDER PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE FOR ASSESS MENT YEAR 2008-09 DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX(APPEALS)-17, KOLKATA [ IN SHORT THE LD. CIT(A) ] PASSED U/S 144 / 263 / 14 7 OF THE INCOME TAX ACT, 1961 [IN SHORT THE ACT]. 2. AFTER HEARING RIVAL SUBMISSIONS AND ON A CAREFU L CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, A PERUSAL OF PAPERS ON R ECORD AND ORDERS OF THE LOWER AUTHORITIES BELOW, AS WELL AS CASE LAW CITED, WE HO LD AS FOLLOWS. 2 ITA NO.1966/KOL/2017 ACUITY VYAPAAR PVT. LTD. A.YR .2008-09 2 3. WE ARE CONVINCED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM APPEARING AND REPRESENTING ITS CASE BEFORE THE LD. CIT(A) . W E ALSO FIND THAT THE ASSESSING OFFICER HAS PASSED BEST JUDGMENT ORDER U/S 144 OF THE ACT. THE ASSESSING OFFICER HAS NOT FOLLOWED THE SPECIFIC DIRECTIONS GIVEN BY THE COMMI SSIONER OF INCOME TAX IN HIS ORDER U/S 263 OF THE ACT DATED 30.03.2013. THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE LD. AO FOR FRESH ADJUDICATION ON THE GROUND OF NATURAL JUSTICE. THE LD. DR NOT LEAVING HIS GROU ND SUBMITTED THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE AO FOR FRESH ADJUDICATI ON AS PRINCIPLE OF NATURAL JUSTICE HAVE NOT BEEN FOLLOWED. 4. THIS BENCH OF THE TRIBUNAL IN SIMILAR CASES AS S ET ASIDE THE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIONS TO GIVE T HE ASSESSEE ADEQUATE OPPORTUNITY AND TO FOLLOW THE DIRECTIONS GIVEN BY THE LD. CIT IN H IS ORDER U/S 263 OF THE ACT. IN THE CASE OF SRIRAM TIE UP PVT. LTD. SUPRA AT PARA 6 AND 7 H ELD AS FOLLOWS: 6. IN THE CASE OF M/S. SUKANYA MERCHANDISE PVT. LTD . VS ITO (ITA 291/KOL/2016 DATED 15.12.2017) CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE, A SIMILAR VIEW HAS BEEN TAKEN BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL AND THE SIMILAR ISSUE RELATING TO THE ADDITION MADE UNDER SECTION 68 ON ACCOUNT OF SHARE CAPITAL CONTRIBUTION BY TREATING THE SAME AS UNEXPLAINED CASH CREDITS IS RESTORED BACK B Y THE TRIBUNAL TO THE FILE OF THE A.O. IN ALMOST SIMILAR SITUATION AFTER RECORDING ITS OBS ERVATIONS / FINDINGS AS UNDER: WE NOTE THAT THE AO PURSUANT TO THE ORDER OF LD. CI T HAD TAKEN NOTE OF THE DIRECTIONS OF THE LD. CIT AND ISSUED NOTICE U/S. 14 2(1) DATED 16.08.2013 AND HAS ACKNOWLEDGED THAT THE ASSESSEE HAD FURNISHED THE CO PY OF FINAL ACCOUNT, I. T. ACKNOWLEDGEMENT, BANK STATEMENT FOR THE RELEVANT PE RIOD EVIDENCING THE RECEIPT OF SHARE APPLICATION MONEY FROM THE SHARE APPLICANT S. THEREAFTER, THE AO MAKES CERTAIN INFERENCES BASED ON THE LIST OF SHAREHOLDER S 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 ORDER , WHEREIN AO REQUIRED THE DIRECTORS OF THE ASSESSEE COMPANY TO BE PRESENT BEF ORE HIM ON 06.03.2014. HOWEVER, ACCORDING TO THE LD. AR, THE ASSESSEE RECE IVED THE NOTICE ONLY ON 07.03.2014 AND THEREAFTER, THE ASSESSEE REQUESTED T HE AO TO PROVIDE ANOTHER OPPORTUNITY OF HEARING VIDE ITS LETTER DATED 20.03. 2014. THEREAFTER, THE AO FIXED THE DATE OF HEARING ON 12.03.2014 VIDE NOTICE DATED 10.03.2014. SO, ACCORDING TO 3 ITA NO.1966/KOL/2017 ACUITY VYAPAAR PVT. LTD. A.YR .2008-09 3 THE ASSESSEE COMPANY SINCE THE DIRECTORS WERE NOT I N STATION TILL 23.03.2014, THE LD. AR HAD REQUESTED FOR ADJOURNMENT TILL THAT TIME . THOUGH THE AO HAS STATED THAT HE HAS ISSUED SUMMONS ON 24.03.2014 TO THE ASS ESSEE COMPANY TO PRODUCE THE DIRECTORS OF THE COMPANY BEFORE HIM ON 26.03.20 14, THE ASSESSEE COMPANY CONTENDED THAT IT HAS NOT RECEIVED THE SAID SUMMON AND, THEREFORE, COULD NOT MAKE THE PERSONAL APPEARANCE. THE AO HAS DRAWN ADV ERSE CONCLUSION BASICALLY BECAUSE OF NON-APPEARANCE OF THE DIRECTORS OF THE A SSESSEE COMPANY AND THAT OF THE SHAREHOLDER COMPANIES. WE NOTE THAT INITIALLY THE AO STARTED THE 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 THE ASSESSEE COMPA NY HAD INFORMED THE AO THAT THEIR DIRECTORS WERE OUT OF STATION TILL 23.03.2014 . IN THE LIGHT OF THE AFORESAID FACTS, WE ARE OF THE OPINION THAT THE ASSESSEE DID NOT GET FAIR OPPORTUNITY TO PRESENT THE EVIDENCES BEFORE THE AO SO, THERE WAS A LACK OF OPPORTUNITY AS AFORESAID, 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 INVESTIGATION. WE ALSO NOTE TH AT SIMILARLY PLACED ASSESSEES HAD CHALLENGED THE EXERCISE OF REVISIONAL JURISDICT ION U/S. 263 OF THE ACT BEFORE THIS TRIBUNAL IN THOSE CASES ONE OF IT OF SUBHA LAK SHMI VANIJYA PVT. LTD. VS. CIT IN ITA 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, WHICH WE LEARN TO HAVE BEEN CONFIRMED BY THE HONBLE JURISDICTIONA L HIGH COURT AND THE SLP PREFERRED AGAINST THE DECISION OF THE HONBLE JURIS DICTIONAL HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. THEREFORE, SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD. WE NOT E THAT THE AO WHILE GIVING EFFECT TO THE CITS 263 ORDER HAS NOTED THAT THE AS SESSEE COMPANY HAS IN FACT FURNISHED THE DOCUMENTS SOUGHT BY HIM TO HIS NOTICE U/S. 142(1) OF THE ACT. HOWEVER, THE AO TOOK THE ADVERSE VIEW AGAINST THE A SSESSEE ON THE PLEA THAT THE DIRECTORS OF THE ASSESSEE COMPANY AND SHARE SUBSCRI BING COMPANIES HAD NOT APPEARED BEFORE HIM ON 26.03.2014 AND T AFTER TAKIN G NOTE THAT NONE APPEARED ON 26.03.2014 CONCLUDED ON THE SAME DAY 26.03.2014 TH AT ENTIRE AMOUNT OF SHARE APPLICATION MONEY RECEIVED ALONG WITH PREMIUM AMOUN TING TO RS.8,06,00,000/- WHICH HAS REMAINED UNEXPLAINED AND ADDED TO THE I NCOME OF THE ASSESSEE. WE ALSO NOTE THAT THE LD. CIT AFTER LOOKING INTO THE P ERNICIOUS PRACTICE OF CONVERTING BLACK MONEY INTO WHITE MONEY HAS GIVEN THE GUIDELIN ES TO AO AS TO HOW THE INVESTIGATION SHOULD BE CONDUCTED TO FIND OUT THE S OURCE OF SOURCE. SINCE SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD BY THE TRIBUNAL AS WELL AS BY THE HONBLE CALCUTTA HIGH COURT AS WELL AS THE SLP 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. CIT. WE TAK E NOTE THAT THE LD. CIT WITH HIS EXPERIENCE AND WISDOM HAS GIVEN CERTAIN GUIDELINES IN THE BACKDROP OF BLACK MONEY MENACE SHOULD HAVE BEEN PROPERLY ENQUIRED INT O AS DIRECTED BY HIM. THE AO OUGHT TO HAVE FOLLOWED THE INVESTIGATING GUIDELI NES AND METHOD AS DIRECTED BY HIM TO UNEARTH THE FACTS TO DETERMINE WHETHER THE I DENTITY, GENUINENESS AND 4 ITA NO.1966/KOL/2017 ACUITY VYAPAAR PVT. LTD. A.YR .2008-09 4 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 REVE RSED THE HONBLE HIGH COURT, TRIBUNAL AND CIT(A)S ORDERS AND REMANDED THE MATT ER BACK TO AO FOR FRESH ASSESSMENT. SO, SINCE THERE WAS LACK OF OPPORTUNIT Y AS AFORESTATED IT HAS TO GO BACK TO AO. WE ALSO NOTE THAT THE HONBLE DELHI HI GH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING & MARKETING PVT. LTD. I N ITA NO. 525/2014 DATED 11.03.2015 WHEREIN AFTER NOTICING INADEQUATE ENQUIR Y BY AUTHORITIES BELOW HAVE HELD AS UNDER: 41. WE ARE INCLINED TO AGREE WITH THE CIT(APPEALS) , AND CONSEQUENTLY WITH ITAT, TO THE EXTENT OF THEIR CONCLUSION THAT T HE ASSESSEE HEREIN HAD COME UP WITH SOME PROOF OF IDENTITY 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 F OLLOWING THAT SATISFACTION AS TO THE CREDITWORTHINESS OF THE PART IES OR THE GENUINENESS OF THE TRANSACTIONS IN QUESTION WOULD ALSO HAVE BEE N ESTABLISHED. 42. THE AO HERE MAY HAVE FAILED TO DISCHARGE HIS OB LIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGICAL CONCLU SION. BUT CIT(APPEALS), HAVING NOTICED WANT OF PROPER INQUIRY , COULD NOT HAVE CLOSED THE CHAPTER SIMPLY BY ALLOWING THE APPEAL AN D DELETING THE ADDITIONS MADE. IT WAS ALSO THE OBLIGATION OF THE F IRST APPELLATE AUTHORITY, AS INDEED OF ITAT, TO HAVE ENSURED THAT EFFECTIVE I NQUIRY WAS CARRIED OUT, PARTICULARLY IN THE FACT OF THE ALLEGATIONS OF THE REVENUE THAT THE ACCOUNT STATEMENTS REVEAL UNIFORM PATTERN OF CASH DEPOSITS OF EQUAL AMOUNTS IN THE RESPECTIVE ACCOUNTS PRECEDING THE TRANSACTIONS IN QUESTION. THIS NECESSITATED A DETAILED SCRUTINY OF THE MATERIAL SU BMITTED BY THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION148 ISSUED B Y THE AO, AS ALSO THE MATERIAL SUBMITTED AT THE STAGE OF APPEALS, IF DEEM ED PROPER BY WAY OF MAKING OR CAUSING TO BE MADE A 'FURTHER INQUIRY IN EXERCISE OF THE POWER UNDER SECTION 250(4). HIS APPROACH NOT HAVING BEEN ADOPTED, THE IMPUGNED ORDER OF ITAT, AND CONSEQUENTLY THAT OF CI T(APPEALS), CANNOT 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 TAKING INTO CONSIDERATION THE FACT THE ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT IN SIMILAR CASES BEING UPHELD UP TO THE LEVEL OF APEX COURT, AND TAKING NOTE OF HONBLE DELHI HIGH COURTS ORDER IN JANSAMPARK ADVERTISING & MARKETING PVT. LTD. (SUPRA ), WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FI LE OF AO FOR DE NOVO ASSESSMENT AND TO DECIDE THE MATTER IN ACCORDANCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5 ITA NO.1966/KOL/2017 ACUITY VYAPAAR PVT. LTD. A.YR .2008-09 5 7. WE, THEREFORE, CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THE IS SUE IN DISPUTE AND RESTORE THE MATTER TO THE FILE OF THE A.O. TO DECIDE THE SAME AFRESH A FTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD AND AFTER TAK ING INTO CONSIDERATION THE ENTIRE EVIDENCE ALREADY AVAILABLE ON RECORD AS WELL AS OTH ER DOCUMENTARY EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE IN SUPPORT OF ITS CASE ON THE ISSUE. SIMILAR ORDERS WERE PASSED BY THIS BENCH OF THE TRI BUNAL UNDER IDENTICAL CIRCUMSTANCES IN THE FOLLOWING CASES: I) ITO, WARD-6(1), KOLKATA VS. M/S DEEPSIKHA DISTRIBUT ORS PVT. LTD. I.T.A. NO. 1240/KOL/2015 ORDER DATED 01.06.2018 II) OSWAL SERVICES PVT. LTD. VS. ITO, WARD-6(3), KOLKAT A I.T.A. NO. 2480/KOL/2017 ORDER DATED 24.10.2018 III) M/S SWARNASHATHI VYAPAAR PVT. LTD. VS. ITO, WARD-5( 1), KOLKATA I.T.A. NO. 767/KOL/2018 ORDER DATED 09.11.2018 IV) M/S AMRITLAXMI BUSINESS PVT. LTD. VS. ITO, TECH-2, KOLKATA I.T.A. NO. 766/KOL/2018 ORDER DATED 09.11.2018. CONSISTENT WITH THE VIEW TAKEN IN THE ABOVE REFERRE D CASE LAW, WE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDIC ATION IN ACCORDANCE WITH LAW. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 16.11.2018 SD/- SD/- [A.T.VARKEY ] [ J.SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED : 16.11.2018 SB, SR. PS 6 ITA NO.1966/KOL/2017 ACUITY VYAPAAR PVT. LTD. A.YR .2008-09 6 COPY OF THE ORDER FORWARDED TO: 1. ACUITY VYAPAAR PVT. LTD., 88E, BABURAM GHOSH ROA D, FLAT NO. 1B & 1C, 1 ST FLOOR, MERLIN NIKET, KOLKATA-700040. 2. ITO, WARD-6(3), KOLKATA, AAYAKAR BHAWAN, P-7, CH OWRINGHEE SQUARE, KOLKATA- 700069. 3..C.I.T.(A)- , KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER A SSISTANT REGISTRAR ITAT , KOLKATA BENCHES