M/s.Lifeline Projects Pvt. Ltd., Kolkata V. ITO, Ward - 6(2), Kolkata, Kolkata

ITA 2019/KOL/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7211 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 11-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Assessee Lawyers: S JHAJHARIA LD
• Keywords: Unexplained cash credit; Source of fund
• Section: 234B; 14A; 133(6); 131; 68; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI S.S. GODARA, JM & SHRI A.L. SAINI, AM ] I.T.A NO. 2013/KOL/20 17 ASSESSMENT YEAR : 2009-1 0 M/S ANCIENT NIRMAAN PVT. LTD. -VS- ITO,W ARD-6(2), KOLKATA [PAN: AAHCA 2016 L] (APPELLANT) (RESPOND ENT) I.T.A NO. 2014/KOL/20 17 ASSESSMENT YEAR : 2009-1 0 M/S SWIFT TRACOM PVT. LTD. -VS- ITO, WA RD-5(1), KOLKATA [PAN: AAMCS 0353 B] (APPELLANT) (RESPOND ENT) I.T.A NO. 2015/KOL/2017 ASSESSMENT YEAR : 2009-1 0 M/S DEVRAJ SALES PVT. LTD. -VS- ITO, WA RD-6(1), KOLKATA [PAN: AADCD 0233 G] (APPELLANT) (RESPOND ENT) I.T.A NO. 2016/KOL/2017 ASSESSMENT YEAR : 2009-1 0 M/S SIMPLEX COMMOTRADE PVT. LTD. -VS- IT O, WARD-5(1), KOLKATA [PAN: AAMCS 3520 J] (APPELLANT) (RESPOND ENT) I.T.A NO. 2017/KOL/2017 ASSESSMENT YEAR : 2009-1 0 M/S PROTEX COMMERCIAL PVT. LTD. -VS- ITO , WARD-5(2), KOLKATA [PAN: AAECP 6929 J] (APPELLANT) (RESPOND ENT) I.T.A NO. 2018/KOL/2017 ASSESSMENT YEAR : 2009-1 0 M/S PRABHAKAR VANIJYA PVT. LTD. -VS- ITO, WARD -5(2), KOLKATA [PAN: AAECP 76663 H] (APPELLANT) (RESPOND ENT) 2 ITA NOS.2013-2019/KOL/2017 M/S ANCIENT NIRMAAN PVT. LTD. & ORS. A.YRS. 2009-10 2 I.T.A NO. 2019/KOL/2017 ASSESSMENT YEAR : 2009-1 0 M/S LIFELINE PROJECTS PVT. LTD. -VS- ITO , WARD-6(2), KOLKATA [PAN: AABCL 5003 C] (APPELLANT) (RESPOND ENT) FOR THE APPELLANT : SHRI S. JHAJHARIA, LD. AR FOR THE RESPONDENT : SHRI G. HANGSHIN G, CIT DR DATE OF HEARING : 25.09.2018 DATE OF PRONOUNCEMENT : 28.09.2018 ORDER PER S.S. GODARA, JM 1. THESE SEVEN ASSESSES HAVE FILED THEIR INSTANT AS MANY APPEALS FOR ASSESSMENT YEAR 2009-10 AGAINST CIT(A)-2, KOLKATAS SEPARATE ORDERS , ALL DATED 29.08.2016 PASSED EX PARTE ORDER IN CASE NO. 1287/CIT(A)-2/15-16 , CASE NO. 1504/CIT(A)-2/15-16, CASE NO. 706/CIT(A)-2/15-16, 1503/CIT(A)-2/15-16, 705/CIT(A) -2/15-16,1286/CIT(A)-2/15-16, 1285/CIT(A)-2/15-16 ; RESPECTIVELY INVOLVING PROCE EDINGS U/S 144/ 263 / 143(3)/ 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT ) . HEARD ALL THESE SEVEN ASSESSEES REITERATING THEIR RESPECTIVE STAND. CASE FILE PERUSED. 2. BOTH THE LEARNED REPRESENTATIVES FAIRLY INFORM A T THE OUTSET THAT ALL THESE SEVEN APPEALS SUFFER FROM IDENTICAL DELAY OF 300 DAYS EACH IN FIL ING. THE SOLE IDENTICAL ISSUE INVOLVED THEREIN IS STATUTORY THAT OF SECTION 68 SHARE APPLI CATION/PREMIUM ADDITIONS AMOUNTING TO RS. 14.51 CRORES, 10,50,000/-, 9,56,00,000/-, 10,42 ,50,000/- 12,56,00,000/- 3 ITA NOS.2013-2019/KOL/2017 M/S ANCIENT NIRMAAN PVT. LTD. & ORS. A.YRS. 2009-10 3 10,07,50,000/- AND 12,20,00,000/-; RESPECTIVELY TRE ATED AS UNEXPLAINED IN ASSESSMENTS AS UPHELD IN THE LOWER APPELLATE PROCEEDINGS. SOME CAS ES ALSO CHALLENGE CORRECTNESS OF SECTION 14A READ WITH RULE 8D DISALLOWANCE / ADDITI ONS. WE THUS TAKE I.T.A. NO. 2013/KOL/2017 AS THE LEAD CASE FOR BOTH CONDONATION AS ON MERITS. I.T.A. NO. 2013/KOL/2017 M/S ANCIENT NIRMAN PVT. LTD. WE COME TO DELAY IN ISSUE OF 300 DAYS FIRST OF ALL. THE ASSESSEE HAS FILED ITS CONDONATION PETITION STATED THEREIN THAT ALTHOUGH IT HAD RECEIV ED THE CIT(A)S ORDER UNDER CHALLENGE DATED 29.08.2016 WELL WITHIN LIMITATION ON16.09.2 016, IT COULD NOT INSTITUTE THE INSTANT APPEAL ON ACCOUNT OF VARIOUS REASONS MAINLY OWING T O THE FACT THAT THE PERSON-IN-CHARGE IN ITS ACCOUNTANTS OFFICE MET WITH A SERIOUS ACCID ENT RESULTING IN SEVERE DISABILITY. HE IS ALSO STATED TO HAVE UNDERGONE HOSPITALIZATION FOR M ANY MONTHS. THE ASSESSEES CASE IS THAT IT HAD FILED SECTION 264 PETITION IN THE MEAN TIME WHICH WAS NOT MAINTAINABLE. WE ARE INFORMED THE SAID REVISION PETITION ALSO STOOD DISMISSED. ALL THESE SOLEMN AVERMENTS HAVE GONE UNRESULTED FROM THE REVENUES SIDE. WE TH EREFORE CONDONE THE DELAY IN QUESTION OF 300 DAYS IN FILING OF THE INSTANT APPEA L BEING NEITHER INTENTIONAL NOR DELIBERATE BECAUSE OF REASONS BEYOND THE TAX PAYER S CONTROL. LEAD CASE I.T.A. NO. 2013/KOL/2017 IS TAKEN UP FOR ADJUDICATION ON MERIT S. 3. WE NOW ADVERT TO THE RELEVANT FACTS ON RECORD. THE ASSESSEE COMPANY IS ENGAGED IN INVESTMENT BUSINESS. IT FILED ITS RETURN DECLARING LOSS OF RS. 11,545/- WHICH STOOD SUMMARILY PROCESSED. THE ASSESSING OFFICER THEREAFT ER FORMED REASONS TO BELIEVE THAT ITS INCOME LIABLE TO BE ASSESSED HAD ESCAPED ASSESS MENT ON ACCOUNT OF FACT THAT CERTAIN CLAIMS HAD BEEN OMITTED TO BE DISALLOWED. HE ACCORD INGLY FRAMED REASSESSMENT ON 01.11.2011 DETERMINING TOTAL TAXABLE INCOME AT RS. 27,416/-. 4. CASE FILE SUGGESTS THAT THE CIT INITIATED SECTI ON 263 REVISION PROCEEDINGS ALLEGING NON-APPLICATION OF MIND BY THE ASSESSING OFFICER WH ILST FRAMING THE ABOVE 4 ITA NOS.2013-2019/KOL/2017 M/S ANCIENT NIRMAAN PVT. LTD. & ORS. A.YRS. 2009-10 4 ASSESSMENT/REASSESSMENT. HE PASSED HIS ORDER DATED 11.03.2014 DIRECTING THE ASSESSING OFFICER TO EXAMINE INTER ALIA THE SOURCE AND GENUIN ENESS OF THE ASSESSEES SHARE CAPITAL/PREMIUM AMOUNTING TO RS. 14.51 CRORES NOT O N TEST CHECK BASIS BUT IN RESPECT OF EACH AND EVERY SHARE HOLDER AFTER A THOROUGH INDEP ENDENT ENQUIRY NOT THROUGH THE ASSESSE, EXAMINE BANK ACCOUNTS IN THE ENTIRE PERIOD , ITS DIRECTORS AS WELL AS THEIR CREDENTIALS AND SOURCE OF UTILIZATION THEIR LIQUIDA TION OF ASSETS SHOWN IN BALANCE SHEET AFTER CHANGE IN DIRECTORS ETC. THE CIT ABOVE SECTIO N 263 REVISION ORDER HAS ATTAINED FINALITY . 5. THE ASSESSING OFFICER TOOK UP CONSEQUENTIAL PROC EEDINGS. HE APPEARS TO HAVE ISSUED NOTICE TO THE ASSESSEE AND ALSO TOOK RECOURSE TO SE CTION 131 READ WITH SECTION 133(6) PROCESS TO CALL FOR INVESTORS. HE RECORDS IN HIS ASSESSMENT ORDER DATED 27.03.2015 THAT NONE OF THEM APPEARED IN RESPONSE TO THE SAME. THE ASSESSING OFFICER THEN FRAMED THE IMPUGNED REASSESSMENT ON 27.03.2015 TREATING THE AS SESSEES SHARE BALANCE/ PREMIUM IN ISSUE OF RS. 14,51,00,000/- TO BE UNEXPLAINED CASH CREDITS. 6. THE ASSESSEE PREFERRED APPEAL CHALLENGING CO RRECTNESS OF THE SAID SECTION 68 ADDITION. WE FIND THAT ITS AUTHORIZED REPRESENTATIV E FILED A LETTER DATED 10.08.216 THROUGH POST SEEKING TO WITHDRAW APPEAL ON THE GROUND THA T THE TAXPAYER WANTED TO EXERCISE ITS SECTION 264 REVISION SQUARELY BEFORE THE COMMI SSIONER. THE CIT(A) HAS MADE A DETAILED DISCUSSION THAT SUCH A REVISION IS NOT MAINTAINABLE. HE THEN UPHOLDS THE IMPUGNED ADDITION WITH A FOLLOWING NON-SPEAKING DI SCUSSION : THE ASSESSEE HAS NOT MADE ANY ORAL OR WRITTEN SUBMISSION IN SUPPORT OF T HE GROUNDS OF APPEAL. HENCE, THE ORDER OF THE AO IS UPHELD AND THE APPEAL OF THE ASS ESSEE IS DISMISSED. THE ASSESSEE HAS FILED THE INSTANT APPEAL IN THESE FACTS. 7. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. LEARNED CIT DR VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING TH AT BOTH THE LOWER AUTHORITIES HAVE 5 ITA NOS.2013-2019/KOL/2017 M/S ANCIENT NIRMAAN PVT. LTD. & ORS. A.YRS. 2009-10 5 RIGHTLY ADDED THE IMPUGNED SHARE APPLICATION/ PREMI UM MONEY AS IT COULD NOT SATISFY THE RELEVANT PARAMETERS OF IDENTITY, GENUINENESS AND C REDITWORTHINESS IN SUPPORT THEREOF EITHER DURING ASSESSMENT OR CIT(A)S PROCEEDINGS . HE EMPHASIZES THAT THE ASSESSEE HAS ADOPTED A DUBIOUS METHOD OF ROUTING ITS OWN UNA CCOUNTED MONEY THROUGH ENTRY OPERATORS WHICH FORMS THE SUBJECT MATTER OF THE IMP UGNED ADDITION. HE QUOTES VARIOUS CASE LAWS SUPPORTING THE ASSESSING OFFICERS ACTION HOLDING THE SHARE BALANCE/PREMIUM IN ISSUE TO BE A CASE OF UNEXPLAINED CASH CREDITS. THE ASSESSEE IS ACCUSED OF NOT APPEARING BEFORE THE ASSESSING OFFICER AND THE C IT(A). WE FIND NO MERIT IN ALL THESE ARGUMENTS. WE MAKE IT CLEAR THAT THE ASSESSEE HAD I NDEED FILED ITS LETTER BEFORE THE CIT(A) SEEKING TO AVAIL REVISION REMEDY WHICH WAS A DMITTEDLY NOT MAINTAINABLE AS PER SECTION 264(4) OF THE ACT. THE FACT ALSO REMAINS TH AT THE CIT(A) HAS NOT ADJUDICATED THE CORRECTNESS OF THE IMPUGNED SHARE BALANCE / PREMIUM ISSUE ON MERITS AT ALL. HE HAS SIMPLY CONFIRMED THE ASSESSING OFFICERS ACTION AS EXTRACTED HEREINABOVE WITHOUT EVEN DEALING OF VOLUMINOUS EVIDENCE FILED AT THE ASSESS EES BEHEST RUNNING INTO 306 PAGES BEFORE US. IT EMERGES THAT THE ASSESSEE HAD FILED V ERY MATERIAL BEFORE THE ASSESSING OFFICER AS WELL WHO SIMPLY INVOKED BEST JUDGMENT AS SESSMENT WHILE MAKING THE IMPUGNED ADDITION WITHOUT EVEN REFERRING TO A SINGL E EVIDENCE. WE MAKE IT CLEAR THAT THE ASSESSEE FILED AUDITED ACCOUNTS, BANK STATEMENT , INCOME TAX ENDORSEMENT AND SOURCE OF FUNDS AS WELL AS COPY THE CONFIRMATION (S) BEFOR E THE ASSESSING AUTHORITY IN RESPONSE TO SECTION 131 NOTICES. ALL THIS VOLUMINOUS MATERIA L STANDS BRUSHED ASIDE IN BOTH THE LOWER PROCEEDINGS WITHOUT EVEN A SLIGHT REFERENCE. WE THEREFORE DEEM IT APPROPRIATE IN THESE PECULIAR FACTS AND CIRCUMSTANCES THAT THE ASS ESSING OFFICER NEEDS TO REEXAMINE THE ENTIRE ISSUE AFRESH AS PER LAW STRICTLY IN TUNE WIT H THE CITS SECTION 263 DIRECTIONS (SUPRA). THE ASSESSEES OTHER SUBSTANTIVE GROUND CH ALLENGING SECTION 14A READ WITH RULE 8D DISALLOWANCE OF RS. 11,545/- IS ALSO SENT BACK T O THE CIT(A) TO BE DECIDED AFRESH AS PER THE SETTLED LEGAL AND FACTUAL POSITION. ALL TH E OTHER ISSUES SECTION 234B INTEREST ETC. ARE TREATED AS MERE CONSEQUENTIAL IN NATURE. LEAD C ASE APPEAL I.T.A NO. 2013/KOL/2017 IS TREATED AS PARTLY ACCEPTED FOR STATISTICAL PURPO SES IN ABOVE TERMS. 6 ITA NOS.2013-2019/KOL/2017 M/S ANCIENT NIRMAAN PVT. LTD. & ORS. A.YRS. 2009-10 6 8. SAME ORDER TO BE FOLLOWED IN REMAINING SIX APPEA LS I.T.A. NOS. 2014 TO 2019/KOL/2017 AS BOTH THE LEARNED REPRESENTATIVES A LL AD IDEM THAT THESE CASES ALSO SUFFER FROM DELAY IN FILING OF 300 DAYS AS WELL AS RAISE CHALLENGE TO SECTION 68 ADDITION(S) INVOLVING A SIMILAR BACKDROP OF THE RE LEVANT FACTS. WE PARTLY ALLOW ALL THESE REMAINING SIX CASES FOR STATISTICAL PURPOSES IN ABO VE TERMS. 10. THESE SEVEN ASSESSEES APPEALS ARE PARTLY ALLOW ED FOR STATISTICAL PURPOSES IN ABOVE TERMS. THE COPY OF THIS COMMON ORDER ARE PLACED ALL THE RESPECTIVE CASE FILE(S). ORDER PRONOUNCED IN THE COURT ON 28.09.2018 SD/- SD/- [A.L. SAINI] [ S.S.GODARA ] ACCOUNTANT MEMBER JUDICIAL MEM BER DATED : 28.09.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. I) M/S ANCIENT NIRMAN PVT. LTD, II) M/S SWIFT TRACOM PVT. LTD. III)M/S DEVRAJ SALES PVT. LTD. IV) M/S SIMPLEX COMMOTRADE PVT. LTD. V) M/S PROTEX COMMERCIAL PVT. LTD. VI) M/S PRABHAKAR VANIJYA PVT. LTD. VII) M/S LIFELINE PROJECTS PVT. LTD. HAVING ADDRESS AT SALARPURIA JAJODIA & CO., 7, C.R. AVENUE, 3 RD FLOOR, KOLKATA-700072. 2. I) ITO, WARD-6(2), KOLKATA, II) ITO, WARD-5(1), KOLKATA III) ITO, WARD-1(2), KOLKATA IV) ITO, WARD-5(2), KOLKATA 7 ITA NOS.2013-2019/KOL/2017 M/S ANCIENT NIRMAAN PVT. LTD. & ORS. A.YRS. 2009-10 7 V) ITO, WARD-6(2), KOLKATA HAVING ADDRESS AT AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069. 3..C.I.T(A).- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S