M/s Akshara Developers Pvt. Ltd., Kolkata V. I.T.O.,Ward-2(2), Kolkata

ITA 2073/KOL/2019

AI Insights

The case involves M/s Akshara Developers Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) -17, Kolkata, confirming the addition of Rs. 1,05,00,000 as unexplained cash credit. The addition was initially made by the AO during the assessment proceedings under section 143(3) of the Income Tax Act, 1961, on the grounds that the assessee did not comply with the summons issued under section 131. The Tribunal noted that the assessee had provided substantial documentation and that the subscribers to the share capital had responded to notices under section 133(6). The Tribunal referenced several precedents where similar issues had been resolved in favor of the assessee, leading to the decision to allow the appeal and direct the deletion of the addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127320 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-03-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 05-09-2019
• Other Referred Cases: Rajmandir Estate Pvt. Ltd. vs. PCIT, PCIT vs. NRA Iron & Steel Pvt. Ltd., ITO vs. M/s Kemex Engineering Pvt. Ltd., M/s Starland Vinimay Pvt. Ltd. vs. ITO, M/s Lucky Agencies Pvt. Ltd. vs. ITO, M/s Lalbaba Seamless Tubes Pvt. Ltd. vs. DCIT, ITO vs. M/s Coxis Finance & Investment Pvt. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Set aside
• Section: 131; 68; 139; 143(3); 133(6); 143(1)

Judgement Text

आयकर अपील य अ धकरण, कोलकाता पीठ ‘‘सी ’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA ी संजय गग या यक सद य एवं ी राजेश क ु मार, लेखा सद य के सम [Before Shri Sanjay Garg, Judicial Member & Shri Rajesh Kumar, Accountant Member] I.T.A. No. 2073/Kol/2019 Assessment Year: 2012-13 M/s Akshara Developers Pvt. Ltd. (PAN: AACCA 5550 G) Vs. ITO, Ward-2(2), Kolkata Appellant / (अपीलाथ ) Respondent / (!"यथ ) Date of Hearing / स ु नवाई क% त'थ 29.03.2022 Date of Pronouncement/ आदेश उ*घोषणा क% त'थ 22.05.2023 For the Appellant/ नधा 0रती क% ओर से Shri Sunil Surana, CA For the Respondent/ राज व क% ओर से Shri Vijay Kumar, Addl. CIT ORDER / आदेश Per Rajesh Kumar, AM: This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) -17, Kolkata (hereinafter referred to as the Ld. CIT(A)”] dated 19.07.2019 for the AY 2012-13. 2. The only issue raised by the assessee in various grounds of appeal is against the confirmation of addition of Rs. 1,05,00,000/- by the Ld. CIT(A) as made by the AO on account of unexplained cash credit u/s 68 of the Act. 3. Facts in brief are that the assessee filed return of income on 14.08.2012 which was processed u/s 143(1) of the Act on 18.05.2013. The assessee is engaged in real 2 I.T.A. No. 2073/Kol/2019 Assessment Year: 2012-13 M/s Akshara Developers Pvt. Ltd. estate business. The case was selected for scrutiny and statutory notices were duly issued and served on the assessee. The AO noticed during the course of assessment proceedings that assessee has received share application money along with premium accordingly summon u/s 131 were issued to the director of the assessee company. Before the AO the assessee did not file any information and finally the AO added entire amount of share application money of Rs. 1,05,00,000/- to the income of the assessee in the assessment framed u/s 143(3) vide order dated 10.03.2015 on the ground that the assessee has not complied with the summon. The assessee filed before the AO the letter of allotment, certificate for statutory auditor, confirmation letter, board resolution, copy of PAN Card, copy of audited financial statements for AY 2012-13, copy of assessment order. In case assessment order u/s 143(3) of the Act during the year the assessee raised share capital from two subscribers namely M/s Positive Vinimay Pvt. Ltd. and M/s Newtown Mercantile Pvt. Ltd. 4. In the appellate proceedings, the Ld. CIT(A) affirmed the order by referring to various decisions of Hon’ble Calcutta High Court in the case of Rajmandir Estate Pvt. Ltd. vs. PCIT in GA No. 509 of 2016 and decision of Hon’ble Supreme Court in the case of PCIT vs. NRA Iron & Steel Pvt. Ltd. (arising out of SLP(Civil) No. 29855 of 2018) and finally affirmed the order by giving two line findings. 5. After hearing rival contentions and perusing the material on record, we observe that the assessee has received Rs. 1,05,00,000/- as share application money from two private limited companies namely M/s Positive Vinimay Pvt. Ltd. Rs. 35,00,000/- and M/s Newtown Mercantile Pvt. Ltd. Rs. 70,00,000/- during the year. The assessee furnished before the AO as well as the Ld. CIT(A) the reply to notice u/s 133(6), letter of allotment, certificate from statutory auditor, confirmation letter, board resolution, subscriber’s name and address, audited account and also the copy of assessment framed u/s 143(3) of these subscribers before both the authorities below. We also note that the AO has issued notice u/s 133(6) to both the parties which were duly responded and the reply of the assessee were filed on records. The AO has simply added amount on the ground that summon issued u/s 139 of the Act to the director of the assessee 3 I.T.A. No. 2073/Kol/2019 Assessment Year: 2012-13 M/s Akshara Developers Pvt. Ltd. company were not complied with. In our opinion, the non-compliance to summon is not for sufficient ground for making addition especially when the assessee has furnished all evidences before the AO and even notice issued u/s 133(6) were responded by the subscriber. So much so that revenue has framed assessment u/s 143(3) in case of the both the subscribers and the copy of assessment orders are placed at page no. 41 to 45 of PB in case of Positive Vinimay Pvt. Ltd. and at page 62 to 66 in case of M/s Newtown Mercantile Pvt. Ltd. The case of the assessee find support from the following decisions: i) ITO vs. M/s Kemex Engineering Pvt. Ltd. in ITA No. 75/Kol/2021 for AY 2012-13 dated 01.02.2023 ii) M/s Starland Vinimay Pvt. Ltd. vs. ITO in ITA No. 574/Kol/2020 for AY 2012-13 dated 24.01.2023 iii) M/s Lucky Agencies Pvt. Ltd. vs. ITO in ITA No. 2501/Kol/2019 for AY 2012-13 dated 23.02.2023 iv) M/s Lalbaba Seamless Tubes Pvt. Ltd. vs. DCIT in ITA No. 2641/Kol/2019 for AY 2012-13 dated 21.10.2022 v) ITO vs. M/s Coxis Finance & Investment Pvt. Ltd. in ITA No. 649/Kol/2020 for AY 2012-13 dated 10.11.2022 Respectfully following the above decision, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to delete the addition. 6. In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 22 nd May, 2023 Sd/- Sd/- (Sanjay Garg / संजय गग ) (Rajesh Kumar/राजेश क ु मार) Judicial Member/ या यक सद य Accountant Member/लेखा सद य Dated: 22 nd May, 2023 SB, Sr. PS 4 I.T.A. No. 2073/Kol/2019 Assessment Year: 2012-13 M/s Akshara Developers Pvt. Ltd. Copy of the order forwarded to: 1. Appellant- M/s Akshara Developers Pvt. Ltd., 74, Lenin Sarani, Kolkata- 700013 2. Respondent – ITO, Ward-2(2), Kolkata 3. Ld. CIT(A)-17, Kolkata (Sent through e-mail) 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata