M/s Esteem Tradecomm Pvt. Ltd., Kolkata V. CIT(A)-6, Kolkata, Kolkata

ITA 1991/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1824 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 07-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit
• Section: 142(1); 133(6); 147; 131; 68; 148; 263

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 1991 / KOL / 20 16 ASSESSMENT YEAR :2008-09 M/S ESTEEM TRADECOMM PVT. LTD., 90, CHAKDAH ANANDPALLY DHALIPARA, NR. ANANDPALLY, AUTOSTAND, KOLKATA-93 [ PAN NO.AAACE 5486 D ] V/S . COMMISSIONER OF INCOME TAX (A)-6, 54/1, RAFI AHMED KIDWAI ROAD, KOLKATA-16 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI MIRAJ D. SHAH, ADVOCATE /BY RESPONDENT SHRI S. DASGUPTA, ADDL. CIT-DR /DATE OF HEARING 01-08-2018 /DATE OF PRONOUNCEMENT 05-09-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-6, KOLKATAS O RDER DATED 20.07.2016, PASSED IN CASE NO.264/CIT(A)-6/KOL/2015-16, EX PART E UPHOLDING THE ASSESSING OFFICERS ACTION ADDING ITS SHARE CAPITAL / PREMIUM OF 12,68,26, 851/- IN ASSESSMENT ORDER DATED 26.03.2014, INVOLVI NG PROCEEDINGS U/S. 143(3)/263/143(3)/147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE ADVERT TO THE RELEVANT FACTS. THIS ASSESSEE I S A COMPANY DEALING WITH IN SHARES AND INVESTMENTS. IT HAD FILED ITS RE TURN ON 16.10.2008 STATING INCOME OF 13,681/-. THE SAME STOOD PROCESSED. THE ASSESSING O FFICER THEREAFTER FORMED REASONS TO BELIEVE THAT ASSESSEE S TAXABLE INCOME LIABLE TO ITA NO.1991/KOL/2016 A.Y 200 8-09 M/S ESTEEM TRADECOMM PVT. LTD. VS. CIT(A )-6, KOL. PAGE 2 BE ASSESSED HAD ESCAPED ASSESSMENT ON ACCOUNT OF T HE FACT THAT SOME OF ITS EXPENSES CLAIMED DESERVED TO BE DISALLOWED. HE THER EFORE INITIATED SECTION 148 / 147 PROCEEDINGS FINALLY CULMINATING IN THE RE -ASSESSMENT DATED 28.05.2010 ENHANCING THE ABOVE TAXABLE INCOME TO 30,680/-. CASE FILE SUGGESTS THAT ALL THIS FOLLOWED CITS REV ISION DIRECTIONS U/S. 263 OF THE ACT IN HIS ORDER DATED 28.03.2013 DIRECTING THE ASSESSING OFFICER TO CONDUCT THROUGH ENQUIRY(IES) REGARDING ASSESSEE S SHARE CAPITAL / PREMIUM HEREINABOVE. THERE IS NO DISPUTE THAT THE S AID DIRECTIONS HAVE ATTAINED FINALITY. 3. WE NOW ADVERT TO THE IMPUGNED CONSEQUENTIAL PROC EEDINGS. THE ASSESSING OFFICER ISSUED SECTION 142(1) NOTICE ALON G WITH DETAILED QUESTIONNAIRE WHICH STOOD SERVED ON 16.04.2017 ASKI NG THE ASSESSEE TO PRODUCE RELEVANT DETAILS AND DOCUMENTS PERTAINING T O SHARE CAPITAL / PREMIUM OF INVESTORS. ASSESSMENT ORDER STATES THAT ALL THI S FAILED TO EVOKE ANY RESPONSE. THE ASSESSING OFFICER SENT SECTION 131 NO TICE AS WELL TO ALL THE SHAREHOLDER COMPANIES IN SUPPORT OF INVESTMENTS IN QUESTION. THERE WAS AGAIN NO RESPONSE. THE ASSESSING OFFICER THEREFORE PRESUMED THAT THE ASSESSEE HAD NOTHING TO EXPLAIN IN SUPPORT OF IDENT ITY, GENUINENESS AND CREDITWORTHINESS OF ITS SHARE APPLICATION / PREMIUM MONEY OF 12,68,26,851/-. HE ACCORDINGLY ADDED THE SAME TO BE ITS UNACCOUNTED CASH CREDITS U/S. 68 OF THE ACT. THE CIT(A) CONFIRMS THE ASSESSING OFFICER S ACTION BY HIS EX PARTE ORDER UNDER CHALLENGE. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS AGAINST AND IN SUPPORT OF IMPUGNED ADDITION OF UNEXPLAINED CASH CREDITS IN THE NATURE OF SHARE CAPITAL / PREMIUM. SUFFICE TO SAY, IT EMER GES AT THE OUTSET THAT THE CITS SECTION 263 DIRECTIONS (SUPRA) INCORPORATED I N PAGE 5 OF THE ASSESSMENT ORDER MADE IT CLEAR TO THE ASSESSING OFFICER THAT H E SHALL EXAMINE GENUINENESS AND SOURCE OF CAPITAL NOT ON A TEST CHE CK BASIS BUT IN RESPECT OF EACH AND EVERY SHAREHOLDER BY CONDUCTING INDEPENDEN T ENQUIRY NOT THROUGH ASSESSEE. THAT IS BESIDES THE POINT THAT SIMILAR OT HER DIRECTIONS REGARDING THE PROCESS TO BE UNDERTAKEN IN CONSEQUENTIAL PROCEEDIN GS HAD ALSO BEEN ISSUED ITA NO.1991/KOL/2016 A.Y 200 8-09 M/S ESTEEM TRADECOMM PVT. LTD. VS. CIT(A )-6, KOL. PAGE 3 TO THE ASSESSING AUTHORITY. LEARNED DEPARTMENTAL RE PRESENTATIVE FAILS TO DISPUTE THE FACT THAT THE ASSESSING OFFICER NEVER C ONDUCTED ANY SUCH INDEPENDENT ENQUIRIES BUT SHIFTED THE RELEVANT ONUS ON ASSESSEES SHOULDERS. THE SAME AS ESCAPED THE CIT(A)S CONSIDERATION AS W ELL AS EVIDENT FROM LOWER APPELLATE DISCUSSION. WE THEREFORE FIND IN SI MILAR CIRCUMSTANCES THAT TRIBUNALS ORDER IN M/S CEMFIL ENTERPRISES LTD. VS. ITO ITA NO.1743/KOL/2017 DECIDED ON 29.08.2018 HAS REMITTED THE VERY ISSUE B ACK TO THE ASSESSING OFFICER AS UNDER:- 2.WE NOTICE AT THE OUTSET THAT BOTH THE LOWER AUTHO RITIES HAVE ADDED ASSESSEES SHARE CAPITAL OF 104,31,70,000/- RECEIVED IN THE RELEVANT PREVIOUS YEAR TO BE UNEXPLAINED ON ACCOUNT OF ITS ALLEGED F AILURE IN PROVING IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE INVESTORS C ONCERNED. THE ASSESSING OFFICER HAD EARLIER FRAMED THE RE-ASSESSMENT IN QU ESTION ON 07.05.201 ASSESSING ASSESSEES TOTAL TAXABLE INCOME AT 1,21,521/- AGAINST THE RETURNED INCOME OF 96,051/-. THE CIT EXERCISED HIS REVISION JURISDICTI ON VESTED U/S. 263 OF THE ACT THEREAFTER AND ISSUED DIRECTIONS DAT ED 28.03.2013 TO THE ASSESSING OFFICER FOR FRAMING THE ABOVE ASSESSMENT AFRESH AFTER CARRYING OUT THROUGH DETAILED ENQUIRIES OF THE SHARE APPLICATION MONEY CONCERNED. HE ACCORDINGLY TREATED THE EARLIER ASSESSMENT TO BE LA CKING NECESSARY ENQUIRIES TO BE A FIT CASE FOR EXERCISING REVISION JURISDICTI ON AS THE SAME WAS ERRONEOUS CAUSING PREJUDICE TO THE INTEREST OF THE REVENUE. 3.WE NOTICE THAT THE ASSESSING OFFICER THEREAFTER T OOK UP CONSEQUENTIAL PROCEEDINGS. HE ISSUED SECTION 131 SUMMONS TO BOTH ASSESSEE AS WELL AS ALL THE INVESTOR PARTIES CONCERNED. HE ALLEGED IN ASSES SMENT ORDER DATED 20.03.2014 THAT NONE OF THEM APPEARED SO AS TO SATI SFY THE RELEVANT PARAMETERS OF IDENTITY, GENUINENESS AND CREDITWORTH INESS OF THE SHARE PREMIUM @ 990/- PER SHARE IN ISSUE. HE THEREFORE TR EATED THE ABOVE SUM TO BE UNEXPLAINED AS WELL AS ITS OWN MONEY INTRODUCED IN THE GARB OF SHARE CAPITAL INCLUDING VERY HEFTY PREMIUM THEREUPON. SUF FICE TO SAY, THE CIT(A) HAS UPHELD THE SAME IN HIS LOWER APPELLATE ORDER PASSED EX PARTE. 4.BOTH THE LEARNED COUNSEL REITERATE THEIR RESPECTI VE STANDS AGAINST AND IN SUPPORT OF IMPUGNED UNEXPLAINED CASH CREDITS ADDITI ON IN THE NATURE OF SHARE CAPITAL / PREMIUM. LEARNED DEPARTMENTAL REPRESENTAT IVE VEHEMENTLY CONTENDS THAT ASSESSEE HAD RECEIVED THE ABOVE PREMI UM AS A DEVICE FOR PLOUGHING BACK ITS OWN MONEY THROUGH VERY EXORBITAN T PREMIUM @ 990/- PER SHARE. HE HIGHLIGHTS THAT THE ASSESSING OFFICER AS WELL AS CIT(A) HAVE FINALIZED EX PARTE PROCEEDINGS IN THE EVENT OF ASS ESSEE NOT FILING ANY DETAILS AT ALL IN SUPPORT. WE FIND NO REASON TO CONCUR WITH REVENUES INSTANT ARGUMENTS. IT EMERGES FIRST OF ALL FROM PAGE 1 TO 3 THAT THE ASSESSEE HAD CHANGED ITS ADDRESS AS PER THE MINISTRY OF CORPORAT E AFFAIRS DETAILS. COUPLED WITH THIS, IT EMERGES THAT ASSESSEE AS WELL ITS INV ESTORS HAD VERY WELL RESPONDED TO SECTION 133(6) NOTICE BY FILING THEIR RESPECTIVE BANK STATEMENTS, BALANCE-SHEET, PROFIT AND LOSS ACCOUNT, INCOME TAX RETURNS AND CONFIRMATIONS THROUGH INSPECTOR OF INCOME TAX DEPARTMENT. THE ASS ESSEE HAS COMPILED ALL THESE DETAILS IN PAPER BOOK RUNNING INTO MORE THAN 180 PAGES. WE FIND THAT ALL ITA NO.1991/KOL/2016 A.Y 200 8-09 M/S ESTEEM TRADECOMM PVT. LTD. VS. CIT(A )-6, KOL. PAGE 4 THESE VOLUMINOUS MATERIALS FILED BEFORE THE ASSESSI NG OFFICER HAVE NOWHERE BEEN CONSIDERED IN EITHER OF THE LOWER PROCEEDINGS. WE THEREFORE CONCLUDE THAT THE ASSESSEE DESERVES ONE MORE INNINGS BEFORE THE ASSESSING OFFICER TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF ITS SHARE APPLICATION / PREMIUM INVESTORS IN QUESTION. WE ACCORDINGLY RESTO RE THE INSTANT LIS BACK TO THE ASSESSING AUTHORITY FOR RE-EXAMINATION OF THE E NTIRE ISSUE AS PER LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE AS SESSEE. WE MAKE IT CLEAR THAT IT SHALL BE VERY MUCH OPEN TO THE ASSESSING O FFICER TO CONDUCT HIS INDEPENDENT INQUIRIES IN TUNE WITH THE CITS U/S 26 3 REVISION DIRECTIONS (SUPRA). WE ADOPT THE ABOVE REASONS REMAND DISCUSSION MUTATI S MUTANDIS HEREIN AS WELL AND RESTORE THE INSTANT SOLE ISSUE BACK TO THE ASSESSING OFFICER FOR AFRESH ADJUDICATION STRICTLY IN LIGHT OF CITS REVISION DI RECTIONS (SUPRA). 5. THIS ASSESSEES APPEAL IS ACCEPTED FOR STATISTIC AL PURPOSES.. ORDER PRONOUNCED IN THE OPEN COURT 05/09/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 05 / 09 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S ESTEEM TRADECOM PVT. LTD. 90, CHAKDA H ANANDPALLY DHALIPARA NR. ANANDPALLY AU TOSTAND, KOLKATA-93 2. /RESPONDENT-CIGTA-6, 54/RAFI AHMED KIDWAI ROAD, KOL KAGTA-16 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,