Bhutoria Construction Pvt. Ltd., Kolkata V. ACIT, C.C. - XXVIII, Kolkata, Kolkata

ITA 2159/KOL/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48066 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 24-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Assessee Lawyers: D S DAMLE M D SHAH
• Keywords: Opportunity of being heard
• Section: 68; 234B

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA () . . , , ! . .. .'# '#'# '#. .. . , ,, , $% , ,, , ) [BEFORE HONBLE SRI B.R.MITTAL, JM & HONBLE SRI C. D. RAO, AM] !& / I.T.A NO. 2159/KOL/2009 '( )*/ ASSESSMENT YEAR : 2006-07 BHUTORIA CONSTRUCTION PVT. LIMITED -VS.- ASSTT. COMMISSIONER OF INCOME TAX KOLKATA [PAN : AABCB 3033 G] CC-XXVIII, KOLKATA [ ,- /APPELLANT ] [ /0,-/ RESPONDENT ] ,- / FOR THE APPELLANT : S/SHRI D.S. DAMLE, M.D. SHAH /0,- / FOR THE RESPONDENT : SHRI PIYUSH KOLHE $1 /ORDER . .. .'# '#'# '#. .. . , ,, , $% PER C. D. RAO, A. M. THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2006-07 AGAINST ORDER OF LD. CIT(A), CENTRAL-I, KOLKATA DATED 03.11.2009. THE AS SESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL :- (1) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE CASE A ND THE SETTLED LAW THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE WAS R ESPONSIBLE TO PROVE THE SOURCE OF THE SOURCE. SUCH ONUS IS NOT ON THE A SSESSEE. (2) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE ONUS ON THE ASSESSEE AS PER SECTION 68 OF THE IT AC T 1961 WAS DULY DISCHARGED HENCE NO ADDITION CAN BE MADE IN THE HAN DS OF THE ASSESSEE. (3) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1 0,00,000 RECEIVED FROM MS. TYFORD DEALERS PVT. LTD. U/S 68. THE ASSES SEE HAVING DISCHARGED ITS ONUS UNDER THE LAW THE ADDITION IS N OT CALLED FOR AND THUS THE SAME BE DELETED. (4) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1 0,00,000 RECEIVED FROM MS REX MARKETING PVT. LTD. U/S 68. THE ASSESSE E HAVING DISCHARGED ITA NO. 2159/KOL/20 09 2 ITS ONUS UNDER THE LAW THE ADDITION IS NOT CALLED F OR AND THUS THE SAME BE DELETED. (5) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1 0,00,000 RECEIVED FROM MS LITIKA MARKETING PVT. LTD. U/S 68. THE ASSE SSEE HAVING DISCHARGED ITS ONUS UNDER THE LAW THE ADDITION IS N OT CALLED FOR AND THUS THE SAME BE DELETED. (6) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE CA SE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1 0,00,000.00 RECEIVED FROM MS ALORA DEAL COM PVT. LTD. U/S 68. THE ASSESS EE HAVING DISCHARGED ITS ONUS UNDER THE LAW THE ADDITION IS N OT CALLED FOR AND THUS THE SAME BE DELETED. (7) FOR THAT IN THE FACTS & CIRCUMSTANCES OF THE C ASE AND THE SETTLED LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1 0,00,000.00 RECEIVED FROM MS TIP TOP COMMERCIAL PVT. LTD. U/S 68. THE AS SESSEE HAVING DISCHARGED ITS ONUS UNDER THE LAW THE ADDITION IS N OT CALLED FOR AND THUS THE SAME BE DELETED. (8) FOR THAT THE AO BE DIRECTED TO RE-COMPUTE THE INTEREST U/S. 234B & CD AS PER LAW. (9) APPELLANT CRAVES LEAVE TO AMEND, ALTER THE ABO VE GROUNDS OR TO ADD ANY FURTHER GROUNDS AT THE TIME OF HEARING OF THE APPEA L. 2. THE ASSESSEE HAS DISPUTED REGARDING ADDITION OF RS.50.00 LAKHS U/S. 68 OF THE ACT AND THE DIRECTION OF THE LD. CIT(A) TO ASSESSING OFFICE R TO RECOMPUTE INTEREST U/S. 234B & 234D AS PER LAW. 3. BRIEF FACTS OF THE ISSUE ARE THAT WHILE DOING SC RUTINY ASSESSMENT, ASSESSING OFFICER HAS MADE ADDITION OF RS.50.00LAKHS ON ACCOUNT OF RECEIP T OF SHARE CAPITAL OF RS.10.00 LAKHS EACH BY THE FOLLOWING 5 COMPANIES - I) REX MARKETING PVT. LTD. RS.10,00,000/- II) TIP TOP COMMERCIAL PVT. LTD. RS.10,00,000/- ; III) ALORA DEALCOM PVT. LTD. RS.10,00,000/- IV) LITIKA MARKETING PVT. LTD. RS.10,00,000/- V) TYFORD DEALER PVT. LTD. RS.10,00,000/- HE FURTHER OBSERVED THAT THE ASSESSEE RECEIVED RS.1 0,00,000/- SHARE CAPITAL ON 09.11.2005 FROM REX MARKETING PVT. LTD., PATHURIAGHAT STREET, KOLKA TA. ON FURTHER ENQUIRY, IT WAS FOUND THAT ITA NO. 2159/KOL/20 09 3 REX MARKETING PVT. LTD. HAD RECEIVED RS.10,00,000/- ON CLEARING FROM M/S. TOPGRAIN MERCHANDISE PVT. LTD., KAILASH BOSE STREET, KOLKATA ON SAME DAY I.E. ON 09.11.2005. IN ANOTHER INSTANCE, ASSESSEE RECEIVED RS.10,00,000/- SHARE CA PITAL ON 09.11.2005 FROM TIP TOP COMMERCIAL PVT. LTD., 43, KAILASH BOSE STREET, KOLK ATA AND RS.10,00,000/- SHARE CAPITAL. ON FURTHER ENQUIRY, IT WAS FOUND THAT TIP TOP COMMERCI AL PVT. LTD. HAD RECEIVED RS.10,00,000/- BY CHEQUE FROM IDEAL GOODS & SERVICES PVT. LTD., 21, P RINCE ANWAR SHAH ROAD, KOLKATA ON SAME DAY I.E. ON 09.11.2005. FURTHER, ASSESSEE RECEIVED RS.10,00,000/- SHARE CAPITAL ON 09.11.2005 AS IN OTHER CASES FROM ALORA DEALCOM PVT. LTD., 265, R ABINDRA SARANI, KOLKATA. ON ENQUIRY, IT WAS FOUND THAT ALORA DEALCOM PVT. LTD. HAD RECEIVED THE SAME AMOUNT FROM AXON MERCANTILE PVT. LTD. (C.A NO. 5904 ON FEDERAL BANK, R.N. MUKHERJEE ROAD). THE SAME AMOUNT WAS RECEIVED IN THE ACCOUNT OF AXON MERCANTILE PVT. LTD. FROM TH E ACCOUNT OF IDEAL GOODS & SERVICES ON THE SAME DATE. FURTHER ENQUIRY ESTABLISHED THAT IDEAL G OODS & SERVICES HAD RECEIVED THE SAID AMOUNT FROM M/S. HIGHLIGHT SECURITIES, 66, PATHURIA GHAT STREET, KOLKATA ON 09.11.2005, IN THE ACCOUNT OF M/S. HIGHLIGHT SECURITIES CASH TOTALLING TO RS.24,00,000/- WAS DEPOSITED ON 09.11.2005. SUMMON U/S. 131 WAS ISSUED TO M/S. HIGH LIGHT SECURITIES THROUGH SPEED POST. THE SAME RETURNED UNSERVED WITH THE COMMENTS NO SUCH M /S. HIGHLIGHT SECURITIES IN THIS ADDRESS, 66, PATHURIAGHAT STREET, KOLKATA, HENCE, NOT KNOWN . SIMILARLY, THE SOURCE OF MONEY OF RS.10,00,000/- RECEIVED FROM M/S. LITIKA MARKETING PVT. LTD., 265, RABINDRA SARANI, KOLKATA WAS TRACED TO M/S. SATYAM TRADERS. THE SOURCE OF MO NEY ENQUIRED AS ABOVE, WAS TRACED TO TWO BANK ACCOUNTS IN THE NAME OF M/S. SATYAM TRADERS, 1 22, J.N. MUKHERJEE ROAD, HOWRAH, AND M/S. HIGHLIGHT SECURITIES, 66, PATHURIAGHAT STREET, KOLKATA. SUMMON U/S. 131 SEND THROUGH SPEED POST RETURNED UNSERVED IN BOTH CASES WITH OBS ERVATIONS TO THE EFFECT THAT NO SUCH PERSONS WERE EXISTING ON THE GIVEN ADDRESSES. ONLY DURING T HE MONTH OF NOVEMBER, 2005, CASH TOTALLING TO RS.2,28,35,000/- HAS BEEN DEPOSITED IN THE ACCOU NT OF M/S. HIGHLIGHT SECURITIES ON FEDERAL BANK, R.N. MUKHERJEE ROAD, KOLKATA. SIMILARLY, CASH TOTALLING TO ABOUT RS.1,88,00,000/- HAS BEEN DEPOSITED IN THE ACCOUNT OF M/S. SATYAM TRADER S DURING NOVEMBER, 2005 ONLY, ON FEDERAL BANK, R.N. MUKHERJEE ROAD, KOLKATA. IT IS OBSERVED THAT IN BOTH CASES AS SAND WHEN CASH IS DEPOSITED, IT IS ISSUED BY CHEQUE. THERE ARE VERY F EW DEPOSITS IN BOTH THE ACCOUNTS BY WAY OF CHEQUE. ALL TRANSACTIONS OF DEPOSITING CASH IN THE SOURCE BANK ACCOUNTS, TO ROUTING IT THROUGH A NUMBER OF BANK ACCOUNTS AND FINALLY DEPOSITING THE SAME IN THE BENEFICIARY ASSESSEES BANK ACCOUNT HAS TAKEN PLACE IN A SINGLE DAY OR TWO DAYS . ALL THE PERSONS INVOLVED IN THE CHAINS OF ITA NO. 2159/KOL/20 09 4 TRANSFERS ARE APPEARING TO BE LOCATED AT DIFFERENT ADDRESSES. ON THE OTHER HAND, NO SUCH FACT IS BROUGHT TO NOTICE THAT WHY ALL THE TRANSACTIONS TOO K PLACE IN A SINGLE DAY I.E. ON 09.11.2005. 4. ON APPEAL, LD. CIT(A) HAS CONFIRMED THE SAME BY OBSERVING THAT ASSESSEE-COMPANY HAD PRODUCED FOLLOWING DOCUMENTS TO PROVE THE IDENTITY OF THE COMPANIES :- (I) PAN CARD ISSUED BY INCOME TAX DEPARTMENT, DEPARTMEN T OF REVENUE, MINISTRY OF FINANCE. (II) CERTIFICATE OF INCORPORATION ISSUED BY REGISTRAR OF COMPANIES, DEPARTMENT OF COMPANY AFFAIRS. (III) COPIES OF BANK STATEMENT OF THE SUBSCRIBERS OF THEI R BANK ACCOUNTS. (IV) AUDITED ACCOUNTS CERTIFIED BY INDEPENDENT CHARTERED ACCOUNTANTS. 5. AGGRIEVED BY THIS, NOW THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING, LD. COUNSEL APPEARING O N BEHALF OF THE ASSESSEE HAS SUBMITTED THAT LD. CIT(A) HAS NOT DISPUTED THAT ASSESSEE HAS FILED THE FOLLOWING :- (A) SHARE APPLICATION FORM RECEIVED FROM THE APPLI CANT COMPANY. (B) COPY OF MEMORANDUM OF THE COMPANY. (C) COPIES OF THE BALANCE SHEET OF THE APPLICANT CO MPANIES TO ESTABLISH THE FACT THAT THEY ARE HAVING SUBSTANTIAL CAPITAL T O MAKE THE SHARE APPLICATION. (D) ALL PAYMENTS HAVE BEEN RECEIVED BY ACCOUNT PAYEE CH EQUES AND THE DETAILS OF THE CHEQUE AND BANK ACCOUNT OF THE APPLI CANTS ARE FILED. (E) COPIES OF I.T. RETURN OF THE SHARE APPLICANT TO PRO VE THAT THEY ARE REGULARLY ASSESSED TO TAX. (F) DETAILS OF THE SOURCE OF THE MONEY FROM WHICH THEY CONTRIBUTED THE SHARE APPLICATION MONEY. HENCE THE SOURCE OF SOURCE OF THE CREDIT IS ALSO FILED. (G) PAN CARD OF DIRECTOR OF THE COMPANIES. IN RESPECT OF ALL THE COMPANIES, HE FURTHER SUBMITT ED THAT ASSESSING OFFICER HAS NOT FIND ANY DISCREPANCY IN THE ABOVE SAID DOCUMENTS AND ASSESSE E HAS ALSO PRODUCED THE DOCUMENTS OF ITA NO. 2159/KOL/20 09 5 SHARE APPLICATION FORM, MOVEMENT OF FUNDS THROUGH A CCOUNT PAYEE CHEQUES, SOURCE OF THE SOURCE OF THE FUNDS RECEIVED BY THE ASSESSEE HAS AL SO FILED BEFORE THE ASSESSING OFFICER. PRIMARILY, THE INITIAL ONUS CAST ON THE ASSESSEE HA S DISCHARGED BY THE ASSESSEE, HENCE, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. THEREFORE, HE REQUESTED TO SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND REQUESTED TO DELETE THE ADDITIONS MADE BY THE REVENUE AUTHORITIES. 7. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HEAVILY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 8. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE MATERIAL AVAILABLE ON RECORD, IT IS OBSERVED THAT SHARE APPLICATIONS RECE IVED BY THE ASSESSEE-COMPANY AS APPEARING AT PAGES 7, 17, 26, 35 & 43 ARE AS UNDER :- (I) AT PAGE 7 OF THE PAPER BOOK THAT M/S. ALORA DE ALCOM (P) LTD. PAID RS.10,00,000/- BY CHEQUE NO.137338 DATED 09.11.2005 DRAWN ON FEDERAL BANK LIMITED. (II) AT PAGE 17 OF THE PAPER BOOK THAT M/S. TYFORD DEALER PRIVATE LIMITED PAID VIDE CHEQUE NO.377525 DATED 09.11.2005 RS.10,00,000/- DR AWN ON FEDERAL BANK LIMITED. (III) AT PAGE 26 OF THE PAPER BOOK THAT M/S. REX M ARKETING PVT. LTD. PAID RS.10,00,000/- BY CHEQUE NO.142731 DATED 09.11.2005 DRAWN ON FEDERAL BANK LIMITED. (IV) AT PAGE 35 OF THE PAPER BOOK THAT M/S. LITIKA MARKETING PVT. LTD. PAID RS.10,00,000/- BY CHEQUE NO.137371 DATED 09.11.2005 DRAWN ON FEDERAL BANK LIMITED. (V) AT PAGE 43 OF THE PAPER BOOK THAT M/S. TIP TOP COMMERCIAL PVT. LTD. PAID RS.10,00,000/- BY CHEQUE NO.377426 DATED 09.11.2005 DRAWN ON FEDERAL BANK LIMITED. 8.1 FROM THE ABOVE, IT IS OBSERVED THAT ALL THE TRA NSACTIONS HAVE BEEN TAKEN PLACE ON 09.11.2005 FROM THE SAME BANK AND THE REASONS FOR R EVENUE TO BELIEVE THAT SUCH TRANSACTIONS ARE NOT GENUINE. HOWEVER, ASSESSING OFFICER HAS NOT DISCUSSED ANYTHING IN RESPECT OF INVESTMENT OF TYFORD DEALER PVT. LTD. FURTHER, IN O UR CONSIDERED OPINION, THIS REQUIRES FURTHER VERIFICATION WHETHER THE SHARE APPLICANT COMPANIES ARE HAVING COMMON DIRECTORS AS THAT OF ASSESSEE-COMPANY, WHO ARE OTHER SHARE-HOLDERS OF TH E ASSESSEES SHARE-HOLDERS COMPANY AND WHAT IS THE PATTERN OF SHARE PREMIUM COLLECTED IN R ESPECT OF THESE COMPANIES. WITHOUT THIS, IT IS UNFAIR ON THE PART OF THE REVENUE TO SAY THAT THESE TRANSACTIONS ARE NOT GENUINE BASED ON THE ONLY ITA NO. 2159/KOL/20 09 6 FACT THAT THE TRANSACTIONS ARE TAKEN PLACE AMONG TH ESE COMPANIES ON THE SAME DATE. THEREFORE, WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DISPOSE OF THE SAME AS PER LAW AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 9. AS REGARDING LEVY OF INTEREST U/S. 234B & 234D, WE FIND NO SUCH DIRECTION AS ALLEGED BY THE ASSESSEE IN THE GROUNDS OF APPEAL, THEREFORE, W E DISMISS THE SAME. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART FOR STATISTICAL PURPOSES. $1 2 3' 4 56 ORDER PRONOUNCED IN THE COURT ON 13. 04. 2011. SD/- SD/- [ . . , ] [ . .. .'# '#'# '#. .. . , ,, , $% ] [B.R.MITTAL ] [ C . D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER (#%) DATED : 13TH APRIL, 2011. $1 7 /8 9$8)/ COPY OF THE ORDER FORWARDED TO: 1. ,- /APPELLANT- BHUTORIA CONSTRUCTION PVT. LIMITED, C /O. D.J. SHAH & CO., 2, ELGIN ROAD, K OLKATA-700020. 2 /0,- / RESPONDENT : ASSTT. COMMISSIONER OF INCOME-TAX, C C-XXVIII, KOLKATA. 3. 1'/ THE CIT, 4. 1' ()/ THE CIT(A), KOLKATA. 5. ?4 /'/ DR, KOLKATA BENCHES, KOLKATA [08 // TRUE COPY] $1'3/ BY ORDER, !A /ASSTT REGISTRAR [KKC BC 'DA E /SR.PS]