I.T.O., Ward-12(2), Kolkata, Kolkata V. M/s Multifold Agencies Pvt Ltd., Kolkata

ITA 2160/KOL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7984 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 08-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER
• Keywords: Opportunity of being heard
• Section: 133(6); 131; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA D BENCH, KOLKATA (BEFORE SRI S.S. GODARA, JUDICIAL MEMBER & SRI M. BALAGANESH, ACCOUNTANT MEMBER) ITA NO. 2160/KOL/2016 ASSESSMENT YEAR: 2008-09 INCOME TAX OFFICER, WARD-12(2), KOLKATA.................................................APPELLANT VS. M/S. MULTIFOLD AGENCIES PVT. LTD...........................................RESPONDENT 58A, RAJA BASANT ROY ROAD KOLKATA 700 029 [PAN : AAHCM 6326 M] APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE . SHRI SANKAR HALDER, CIT D/R. APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : DECEMBER 27 TH , 2018 DATE OF PRONOUNCING THE ORDER : JANUARY 1 ST , 2019 ORDER PER BENCH :- THIS IS AN APPEAL OF THE ASSESSEE DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 4, KOLKATA (IN SHORT THE LD CITA) IN APPEAL NO. 1058/CIT(A)-4/WARD-12(2)/KOL/15-16 DATED 25.8.2016 AGAINST THE ORDER OF ASSESSMENT FRAMED BY THE LEARNED INCOME TAX OFFICER, WARD-12(2), KOLKATA (IN SHORT THE LD AO) U/S 144/143(3) OF THE ACT DATED 3.3.2015 FOR THE ASST YEAR 2012-13. 2. THE ONLY TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING THE ADDITION MADE U/S 68 OF THE ACT TOWARDS SHARE CAPITAL AND SHARE PREMIUM IN THE SUM OF RS 1,80,00,000/-, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE RETURN OF INCOME FOR THE ASST YEAR 2012-13 WAS FILED ON 7.6.2013 DECLARING TOTAL INCOME OF RS 3,182/-. THE ASSESSEE COMPANY WAS INCORPORATED ON 7.5.2011. THE LD AO OBSERVED THAT THE ASSESSEE HAD RAISED SHARE CAPITAL BY ISSUING 40000 SHARES OF RS 10 EACH WITH PREMIUM OF RS 440 EACH AND THEREBY RAISED A TOTAL AMOUNT OF RS 1,80,00,000/-. IT WAS OBSERVED THAT THE ASSESSEE HAD NOT RECEIVED ANY REVENUE FROM ITS OPERATIONS DURING THE YEAR. NOTICE U/S 133(6) OF THE ACT WAS ISSUED TO VERIFY THE SHARE CAPITAL RAISED TOGETHER WITH ITS PREMIUM AND THE ALLOTMENT THEREON. NO REPLIES WERE RECEIVED IN RESPONSE TO NOTICE U/S 133(6) OF THE 2 ITA NO. 2160/KOL/2016 ASSESSMENT YEAR: 2008-09 M/S. MULTIFOLD AGENCIES PVT. LTD ACT. SUMMONS U/S 131 OF THE ACT WAS ISSUED TO THE SIGNATORY DIRECTOR SHRI VED PRAKASH MITTAL ON 6.2.2015 SEEKING HIS PERSONAL APPEARANCE ON 16.2.2015 AND TO PRODUCE THE INVESTORS BUT NONE APPEARED IN RESPONSE THERETO. THE LD AO OBSERVED THAT THE BOOKS OF ACCOUNTS AND THE BANK STATEMENTS OF THE ASSESSEE WERE ALSO NOT PRODUCED. HENCE HE CONCLUDED THAT THE SOURCE OF CAPITAL RAISED AND THE HIGH PREMIUM ON ITS ALLOTMENT REMAINED UNEXPLAINED WARRANTING ADDITION U/S 68 OF THE ACT. 4. THE LD CIT(A) OBSERVED THAT THE ASSESSEE HAD RECEIVED SHARE CAPITAL AND PREMIUM FROM 12 RELATED BODIES CORPORATE. HE OBSERVED THAT THE ASSESSEE HAD FILED VARIOUS DETAILS THAT WERE FILED BEFORE THE LD AO IN A PAPER BOOK COMPRISING OF COPIES OF SHARE APPLICATION FORMS, LETTER OF ALLOTMENT, COPIES OF RELEVANT BANK STATEMENTS IN RESPECT OF ACCOUNTS FROM WHICH SHARE APPLICATION MONIES WERE PAID, PAN AND ADDRESS OF SHARE APPLICANTS FOR THE YEAR ENDED 31.3.2012, RETURN OF ALLOTMENT OF SHARES IN FORM NO. 2 FILED WITH REGISTRAR OF COMPANIES, COPIES OF CERTIFICATE OF INCORPORATION OF SHARE APPLICANTS AND SHARE ALLOTMENT LETTERS ISSUED TO THEM. IT WAS SUBMITTED THAT ALL THE SHARE APPLICANTS WERE REGULARLY ASSESSED TO INCOME TAX AND PAYMENTS TOWARDS SHARE CAPITAL AND SHARE PREMIUM WERE MADE THROUGH THEIR RESPECTIVE BANK ACCOUNTS. ALL THE SUBSCRIBER COMPANIES WERE RELATED / SISTER CONCERNS. ALL THE NOTICES ISSUED U/S 133(6) OF THE ACT BY THE LD AO WERE DULY SERVED ON 12 SUBSCRIBING COMPANIES. ALL THE 12 SHARE SUBSCRIBERS DULY COMPLIED WITH THE NOTICES U/S 133(6) OF THE ACT AND FURNISHED THE REQUISITE DOCUMENTARY EVIDENCES AND DETAILS AS REQUISITIONED BY THE LD AO. THE SHARE APPLICANTS HAD FURNISHED THEIR AUDITED FINANCIAL STATEMENTS AND IT RETURN ACKNOWLEDGEMENTS FOR ASST YEAR 2012-13. IT WAS ALSO PLEADED THAT THE SHARE APPLICANTS HAD ALSO FURNISHED COPIES OF BANK STATEMENTS EVIDENCING THAT PAYMENTS WERE MADE THROUGH REGULAR BANKING CHANNELS AND THAT THERE WERE NO CASH DEPOSITS PRIOR TO ISSUE OF CHEQUES TO THE ASSESSEE COMPANY. ADDITIONALLY CONFIRMATIONS IN WHICH EXPLANATIONS WITH REGARD TO IMMEDIATE SOURCE OF PAYMENT OF SHARE CAPITAL AND SHARE PREMIUM WAS ALSO STATED WERE DULY FURNISHED BEFORE THE LD AO. IT WAS SUBMITTED THAT EACH OF THE SUBSCRIBING COMPANIES POSSESSED SUFFICIENT CAPITAL AND RESERVES OUT OF WHICH SHARE SUBSCRIPTION AMOUNTS WERE PAID THROUGH ACCOUNT PAYEE CHEQUES. THE NET OWNED FUNDS OF EACH SHARE APPLICANTS WERE SEVERAL TIMES MORE THAN THE INVESTMENT MADE IN EQUITY OF THE ASSESSEE. THE INVESTIBLE FUNDS AVAILABLE WITH EACH OF THE SHARE APPLICANT COMPANIES WERE TABULATED AS UNDER:- 3 ITA NO. 2160/KOL/2016 ASSESSMENT YEAR: 2008-09 M/S. MULTIFOLD AGENCIES PVT. LTD NAME OF THE COMPANY INVESTIBLE FUNDS AVAILABLE AS PER FINANCIALS AMOUNT INVESTED IN THE APPELLANT COMPANY BLUEDIAMOND SALES PVT. LTD. 678428100 1507500 DAULAT TRADECOM PVT. LTD. 402784600 1518750 DHANSAGAR VINTRADE PVT. LTD. 120300000 1498500 EVEREST TRADECOM PVT. LTD. 754555000 1498500 GOLDMINE BARTER PVT. LTD. 780570000 1498500 GOLDMOON COMMERCE PVT. LTD. 751344500 1512000 MATRIX COMMOTRADE PVT. LTD. 824310000 1498500 QUEST SALES PVT. LTD. 328189000 1485000 REGAL DEALMARK PVT. LTD. 581905000 1507500 SHUBHAM BARTER PVT. LTD. 512478400 1507500 SUBHSHREE BARTER PVT. LTD. 688905000 1485000 TRISHUL VINTRADE PVT. LTD. 707867800 482750 TOTAL 18000000 HENCE IT WAS PLEADED THAT THE CREDITWORTHINESS OF SHARE SUBSCRIBING COMPANIES WERE ALSO PROVED BEYOND DOUBT. THE ABOVE MENTIONED DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE AS WELL AS THE SHARE APPLICANTS PROVED THE IDENTITY OF THE SHARE APPLICANTS AND THE GENUINENESS OF TRANSACTIONS. IT WAS PLEADED BEFORE THE LD CITA THAT THE LD AO BEFORE PASSING THE ORDER U/S 144 OF THE ACT DID NOT PROVIDE ANY FINAL OPPORTUNITY OF BEING HEARD. 5. THE LD CITA APPRECIATED THESE EVIDENCES AND DELETED THE ADDITION MADE TOWARDS SHARE CAPITAL AND PREMIUM IN THE SUM OF RS 1,80,00,000/-. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD AR FAIRLY STATED THAT THE VARIOUS EVIDENCES SUBMITTED BY THE ASSESSEE AS DETAILED SUPRA WERE NOT EVEN CONSIDERED BY THE LD AO AS THE ASSESSMENT WAS MADE WITH A PRE-DETERMINED MINDSET THAT THE SHARE CAPITAL AND PREMIUM RECEIVED BY THE ASSESSEE WAS NOT GENUINE. HENCE HE PRAYED FOR SETTING ASIDE OF THIS ISSUE TO THE FILE OF LD AO, WHICH WAS ALSO AGREED BY THE LD DR. HENCE IN THESE PECULIAR FACTS AND CIRCUMSTANCES, WE DEEM IT FIT AND APPROPRIATE, IN THE INTEREST OF JUSTICE AND FAIRPLAY, TO REMAND THIS ISSUE TO THE FILE OF LD AO FOR DENOVO ADJUDICATION AND DECIDE THE SAME IN ACCORDANCE WITH LAW UNINFLUENCED BY EARLIER DECISION TAKEN IN THIS 4 ITA NO. 2160/KOL/2016 ASSESSMENT YEAR: 2008-09 M/S. MULTIFOLD AGENCIES PVT. LTD REGARD. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. KOLKATA, THE 1 ST DAY OF JANUARY, 2019. SD/- SD/- [S.S. GODARA] [ M. BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01.01.2019 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1 . M/S. MULTIFOLD AGENCIES PVT. LTD 58A, RAJA BASANT ROY ROAD KOLKATA 700 029 2. INCOME TAX OFFICER, WARD-12(2), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES