Gajanand Vincom Pvt Ltd, Kolkata V. I.T.O Wd - 2(3), Kolkata

ITA 2161/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9100 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-08-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 18-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit; Set aside
• Section: 143(3); 133(6); 131; 68; 263; 11

Judgement Text

ITA NO. 2161/KOL/2019 ASS ESSMENT YEAR: 2008-2009 GAJANAND VINCOM PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT & SHRI SATBEER SINGH GODARA, J.M. I.T.A. NO. 2161/KOL/2019 ASSESSMENT YEAR: 2008-2009 GAJANAND VINCOM PVT. LIMITED,...................... .............................APPELLANT 27, KALABAGAN LANE, GROUND FLOOR, KOLKATA-700033 [PAN: AACCG8088K] -VS.- INCOME TAX OFFICER,................................ .....................................RESPONDENT WARD-2(3), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 APPEARANCES BY: SHRI MIRAJ D. SHAH, ADVOCATE, FOR THE APPELLANT SHRI SUPRIYO PAL, ADDL. CIT, D.R., FOR THE RESPONDE N T DATE OF CONCLUDING THE HEARING : AUGUST 04, 2020 DATE OF PRONOUNCING THE ORDER : AUGUST 04, 2020 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-17, KOLKATA DA TED 03.09.2019 PASSED EX-PARTE, WHEREBY HE DISMISSED THE APPEAL OF THE ASSESSEE. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF SHARE TRADING AND INVESTMENT. THE R ETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 01. 01.2009 DECLARING A LOSS OF RS.35,287/-. IN THE ASSESSMENT ORIGINALLY C OMPLETED UNDER SECTION 143(3)/147 OF THE ACT VIDE AN ORDER DATED 14.09.201 0, THE TOTAL INCOME OF ITA NO. 2161/KOL/2019 ASS ESSMENT YEAR: 2008-2009 GAJANAND VINCOM PVT. LIMITED 2 THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICE R AT RS.44,400/- AFTER MAKING THE ADDITION, INTER ALIA, ON ACCOUNT OF UNDI SCLOSED INCOME FROM SERVICE CHARGES. THE RECORD OF THE SAID ASSESSMENT CAME TO BE EXAMINED BY THE CONCERNED LD. CIT AND ON SUCH EXAMINATION HE FOUND THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UN DER SECTION 143(3)/147 TO BE ERRONEOUS AS WELL AS PREJUDICIAL T O THE INTEREST OF THE REVENUE, INASMUCH AS, THE CLAIM OF THE ASSESSEE HAV ING RECEIVED THE SHARE CAPITAL AND SHARE PREMIUM AGGREGATING TO RS.3,24,00 ,000/- WAS ACCEPTED BY THE ASSESSING OFFICER WITHOUT CONDUCTING COMPLET E ENQUIRY INTO THE SUBSCRIPTION OF THE SHARE CAPITAL AND THE LARGE AMO UNT OF PREMIUM. HE ACCORDINGLY PASSED AN ORDER UNDER SECTION 263 ON 11 .03.2013 SETTING ASIDE THE ORDER PASSED BY THE ASSESSING OFFICER UND ER SECTION 143(3)/147 WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE T HE ASSESSMENT AFRESH AS PER THE FOLLOWING DIRECTIONS:- THE AO SHOULD MAKE COMPREHENSIVE AND DETAILED ENQUIRIES INTO THE SOURCE OF SUBSCRIPTION TO THE SH ARE CAPITAL. THE A.O. SHOULD PASS THE ASSESSMENT ORDER AFTER CONDUCTING INDEPENDENT DETAILS AND COMPLETE ENQUIRI ES INTO THE SUBSCRIPTION TO THE SHARE CAPITAL AND PREM IUM TO THE EXTENT OF RS.3.24 CRORES INTRODUCED IN THIS CAS E. THE A.O. SHOULD TRACE THE SOURCE OF SHARE CAPITAL BY EN QUIRING INTO THE VARIOUS LAYERS THROUGH WHICH THE MONEY HAS BEEN INTRODUCED IN THIS COMPANY BY ISSUING SUMMONS U/S.1 31 OF THE I.T. ACT. THE A.O. SHOULD NOT CONFINE HIMSEL F TO CONDUCTING ENQUIRIES INTO THE SUBSCRIBERS TO THE SH ARE CAPITAL ONLY ON SELECTIVE BASIS. THE A.O. SHOULD AL SO SEND INFORMATION TO THE A.O.S HAVING JURISDICTION OVER T HE SUBSCRIBER COMPANY TO THE SHARE CAPITAL REGARDING I TS INVESTMENT INTO SHARE CAPITAL & PREMIUM PAID. THE A .O. SHOULD CALL UPON THE ASSESSEE TO IDENTIFY THE PERSO NS WHO ARE SHOWN AS DIRECTORS OF THESE COMPANIES AND EXAMI NE THEM ON OATH TO VERIFY THEIR CREDENTIAL AS DIRECTOR S. THE A.O. SHOULD PASS A SPEAKING ORDER AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE AND VERIFYIN G THE SOURCE OF SHARE CAPITAL INCLUDING THE SHARE PREMIUM OF ALL THE SUBSCRIBERS AND ROTATION OF MONEY THROUGH VARIO US HANDS SO AS TO ASCERTAIN THE TRUE NATURE OF TRANSAC TION WHICH WILL BRING TO THE FORE, THE REALITY OF THE TRANSACTIONS. ITA NO. 2161/KOL/2019 ASS ESSMENT YEAR: 2008-2009 GAJANAND VINCOM PVT. LIMITED 3 3. AS PER THE DIRECTIONS GIVEN BY THE LD. CIT IN TH E ORDER UNDER SECTION 263, NOTICES UNDER SECTION 133(6) WERE ISSUED BY TH E ASSESSING OFFICER TO ALL THE SHAREHOLDERS. THERE WAS, HOWEVER, NO RESPON SE TO THE SAID NOTICES SENT BY THE ASSESSING OFFICER AND AS MENTIONED BY T HE ASSESSING OFFICER IN THE ASSESSMENT ORDER, SOME OF THE SAID NOTICES WERE RETURNED BACK BY THE POSTAL AUTHORITY UN-SERVED WITH THE REMARK NOT KNO WN. EVEN THE NOTICES ISSUED UNDER SECTION 131 TO THE DIRECTORS O F THE ASSESSEE- COMPANY FAILED TO INVOKE ANY RESPONSE. ACCORDING TO THE ASSESSING OFFICER, IT WAS THE RESPONSIBILITY OF THE ASSESSEE- COMPANY TO PRODUCE ALL THE DIRECTORS OF THE SHAREHOLDER COMPANIES FOR EXAM INATION IN ORDER TO PROVE THE GENUINENESS OF THE RELEVANT TRANSACTIONS AS WELL AS THE IDENTITY AND CREDITWORTHINESS OF THE SHAREHOLDERS AS PER THE ORDER OF THE LD. CIT PASSED UNDER SECTION 263. SINCE THERE WAS FAILURE O N THE PART OF THE ASSESSEE-COMPANY TO DO SO, THE ASSESSING OFFICER TR EATED THE ENTIRE AMOUNT OF SHARE CAPITAL AND SHARE PREMIUM AGGREGATI NG TO RS.3.25 CRORES AS UNEXPLAINED CASH CREDIT AND AN ADDITION TO THAT EXTENT WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 68 IN TH E ASSESSMENT COMPLETED UNDER SECTION 143(3) READ WITH SECTION 26 3 OF THE ACT VIDE AN ORDER DATED 28.03.2014. 4. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) READ WITH SECTION 263 OF THE ACT, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND SINCE THER E WAS NO COMPLIANCE ON THE PART OF THE ASSESSEE TO THE NOTICES ISSUED B Y HIM FIXING THE SAID APPEAL FOR HEARING FROM TIME TO TIME, THE LD. CIT(A PPEALS) DISMISSED THE APPEAL OF THE ASSESSEE VIDE HIS APPELLATE ORDER DAT ED 03.09.2019 PASSED EX-PARTE THEREBY CONFIRMING THE ADDITION MADE BY TH E ASSESSING OFFICER UNDER SECTION 68 BY TREATING THE SHARE CAPITAL AND PREMIUM AGGREGATING TO RS.3.24 CRORES AS UNEXPLAINED CASH CREDIT. AGGRI EVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED TH IS APPEAL BEFORE THE TRIBUNAL. ITA NO. 2161/KOL/2019 ASS ESSMENT YEAR: 2008-2009 GAJANAND VINCOM PVT. LIMITED 4 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT NONE OF THE NOTICES STATED TO BE ISS UED BY THE LD. CIT(APPEALS) FIXING THE APPEAL OF THE ASSESSEE FOR HEARING ON CERTAIN DATES WAS EVER RECEIVED BY THE ASSESSEE AND SUCH NO N-RECEIPT OF NOTICES RESULTED INTO NON-COMPLIANCE ON THE PART OF THE ASS ESSEE BEFORE THE LD. CIT(APPEALS) WHEN ITS APPEAL WAS FIXED FOR HEARING. HE HAS ALSO SUBMITTED THAT THE ASSESSEE-COMPANY COULD NOT PRODU CE THE DIRECTORS OF THE SHAREHOLDER COMPANIES BEFORE THE ASSESSING OFFI CER FOR EXAMINATION IN COMPLIANCE OF THE DIRECTION GIVEN BY THE LD. CIT UNDER SECTION 263 AS PROPER AND SUFFICIENT OPPORTUNITY WAS NOT AFFORDED TO IT TO DO SO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE HAS SUBMIT TED THAT THE ASSESSEE-COMPANY IS IN A POSITION TO PRODUCE THE CO NCERNED SHAREHOLDERS FOR EXAMINATION BEFORE THE ASSESSING OFFICER ALONG WITH THE RELEVANT SUPPORTING DOCUMENTARY EVIDENCE AND URGED THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO DO SO BY SENDING TH E MATTER BACK TO THE ASSESSING OFFICER. KEEPING IN VIEW ALL THE FACTS AN D CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO ACCEPT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. EVEN THE LD. D.R. HAS NOT RAISED ANY OBJE CTION FOR SENDING THE MATTER BACK TO THE ASSESSING OFFICER FOR PROPER VER IFICATION PROVIDED THAT THE ASSESSEE IS READY TO UNDERTAKE TO PRODUCE THE C ONCERNED SHAREHOLDERS FOR EXAMINATION BEFORE THE ASSESSING OFFICER ALONG WITH THE RELEVANT SUPPORTING DOCUMENTARY EVIDENCE. SINCE THE LD. COUN SEL FOR THE ASSESSEE HAS UNDERTAKEN TO DO SO ON BEHALF OF THE ASSESSEE, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) EX-PA RTE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DEC IDING THE SAME AFRESH AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO T HE ASSESSEE TO PRODUCE THE CONCERNED SHAREHOLDERS FOR EXAMINATION ALONG WI TH THE RELEVANT SUPPORTING DOCUMENTARY EVIDENCE. AS UNDERTAKEN BY T HE LD. COUNSEL FOR THE ASSESSEE, THE ASSESSEE SHALL MAKE DUE COMPLIANC E BEFORE THE ASSESSING OFFICER AND SHALL EXTEND ALL THE POSSIBLE COOPERATION IN ORDER TO ENABLE THE ASSESSING OFFICER TO MAKE THE ASSESSMENT AFRESH EXPEDITIOUSLY. ITA NO. 2161/KOL/2019 ASS ESSMENT YEAR: 2008-2009 GAJANAND VINCOM PVT. LIMITED 5 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 04, 20 20. SD/- SD/- (SATBEER SINGH GODARA) (P.M. JAG TAP) JUDICIAL MEMBER VICE-PRESIDENT KOLKATA, THE 4 TH DAY OF AUGUST, 2020 COPIES TO : (1) GAJANAND VINCOM PVT. LIMITED, 27, KALABAGAN LANE, GROUND FLOOR, KOLKATA-700033 (2) INCOME TAX OFFICER, WARD-2(3), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-17, KOLKATA; (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.