ITO, Wd-8(4), Kolkata, Kolkata V. M/s Indraprastha Promoters Pvt. Ltd., Kolkata

ITA 2173/KOL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4821 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 10-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Assessee Lawyers: T K BANERJEE
• Keywords: Source of fund; Additional evidence; Fair market value; Set aside
• Section: 143(3); 14A; 250; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, KOLKATA BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO.2173/KOL/2016 (ASSESSMENT YEAR: 2013-14) ITO, WARD-8(4), KOLKATA......................... APPELLANT VS. M/S. INDRAPRASTHA PROMOTERS PVT. LTD. ...........................................RESPONDENT [PAN :AAACI6972J] & I.T.A. NO.52/KOL/2018 (ASSESSMENT YEAR: 2014-15) ITO, WARD-8(4), KOLKATA...................... ..APPELLANT VS. M/S. INDRAPRASTHA PROMOTERS PVT. LTD. ...........................................RESPONDENT [PAN :AAACI6972J] APPEARANCES BY: SHRI ROBIN CHOUDHURY, ADDL. CIT, SR. DR, APPEARING ON BEHALF OF THE APPELLANT. SHRI T. K. BANERJEE, FCA, APPEARING ON BEHALF OF THE RESPONDENT. DATE OF CONCLUDING THE HEARING : MAY 20 TH , 2019 DATE OF PRONOUNCING THE ORDER : MAY 31 ST ,2019 O R D E R PER J. SUDHAKAR REDDY :- THESE APPEALS BY THE REVENUE IS DIRECTED AGAINST SEPARATE AND IDENTICAL ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, KOLKATA (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DATED 24.08.2016 FOR ASSESSMENT YEAR 2013-14 & 21.11.2017 ASSESSMENT YEAR 2014-15. 2. AS ISSUES ARISING IN BOTH THESE APPEALS ARE COMMON FOR THE SAKE OF CONVENIENCE, THEY ARE HEARD AND DISPOSED OFF BY WAY OF THIS COMMON ORDER. 3. THE ASSESSEE IS A COMPANY AND IS IN THE BUSINESS OF BUILDERS AND DEVELOPERS. FOR THE ASSESSMENT YEAR 2013-14, IT FILED A RETURN OF INCOME ON 24.10.2013 DECLARING NIL INCOME. THE ASSESSING OFFICER COMPLETED ASSESSMENT U/S 143(3) DETERMINING THE TOTAL INCOME AT RS.97,16,790/-, INTER ALIA, MAKING AN ADDITION U/S 68 OF THE ACT OF RS.99,80,564/- BEING SHARE CAPITAL AND SHARE PREMIUM RECEIVED AND A DISALLOWANCE U/S 14A OF THE ACT. 2 I.T.A. NO.2173/KOL/2016 & I.T.A. NO.52/KOL/2018 M/S. INDRAPRASTHA PROMOTERS PVT. LTD 4. FOR THE ASSESSMENT YEAR 2014-15, THE ASSESSEE FILED NIL RETURN OF INCOME ON 09.10.2014 AND THE ASSESSING OFFICER COMPLETED ASSESSMENT U/S 143(3) DETERMINING TOTAL INCOME AT RS.99,34,310/- BY MAKING AN ADDITION U/S 68 OF THE ACT BEING SHARE CAPITAL AND SHARE PREMIUM RECEIVED AS UNEXPLAINED. 5. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY DELETED THE ADDITION ON THE GROUND THAT THE ASSESSEE HAS PROVED THE IDENTITY OF THE SHAREHOLDERS, THE CREDITWORTHINESS OF THE SHAREHOLDERS AND THE GENUINENESS OF THE TRANSACTIONS. HE ALSO HELD THAT THE SHARE PREMIUM COLLECTED WAS JUSTIFIED AS THE VALUATION OF THE SAME IS AS PER RULE 11UA(1)(C)(B) OF THE I.T. RULES 1962. 6. AGGRIEVED, THE REVENUE IS IN APPEAL FOR BOTH THE ASSESSMENT YEARS DISPUTING THE DELETION OF THE ADDITION MADE U/S 68 OF THE ACT AND ALSO OBJECTING TO THE ADMISSION OF ADDITIONAL EVIDENCE BY THE LD. CIT(A). THE LD. D/R SUBMITTED THAT THE LD. CIT(A) SHOULD HAVE GIVEN THE ASSESSING OFFICER AN OPPORTUNITY TO EXAMINE THE FRESH EVIDENCE PRODUCED BY THE ASSESSEE BEFORE HIM. HE SUBMITTED THAT THE ASSESSEE HAS NOT RESPONDED PROPERLY BEFORE THE ASSESSING OFFICER AND HAS NOT COOPERATED AND HENCE THE ASSESSING OFFICER WAS BOUND TO MAKE THE ADDITION. HE POINTED OUT THAT THE LD. CIT(A) HAS ACCEPTED THE FRESH EVIDENCE BY WAY OF VALUATION OF EQUITY SHARE CAPITAL RECEIVED WITH PREMIUM. UNDER THOSE CIRCUMSTANCES, HE WAS BOUND TO GIVE OPPORTUNITY TO THE ASSESSING OFFICER. HE PRAYED THAT THE MATTER BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. 7. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT EACH AND EVERY DETAIL WAS FILED BEFORE THE ASSESSING OFFICER IN RESPONSE TO THE QUERIES RAISED BY THE ASSESSING OFFICER AND THAT NO FRESH EVIDENCE WAS FILED BEFORE THE LD. CIT(A) AND THE ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS OF THE SHAREHOLDER AND THE GENUINENESS OF THE TRANSACTIONS. HE FILED COPIES OF SUMMONS ISSUED TO THE ASSESSEE COMPANY AND THE REPLY DATED 25 TH NOVEMBER 2016. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS CALLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER ON ALL THE ISSUES AND THUS AN OPPORTUNITY HAS BEEN PROVIDED TO THE ASSESSING OFFICER. UNDER THOSE CIRCUMSTANCES, HE SUBMITTED THAT THE APPEAL SHOULD NOT BE SET ASIDE ONCE AGAIN TO THE FILE OF ASSESSING OFFICER. HE SUPPORTED THE ORDER OF THE LD. CIT(A). 3 I.T.A. NO.2173/KOL/2016 & I.T.A. NO.52/KOL/2018 M/S. INDRAPRASTHA PROMOTERS PVT. LTD 8. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION ON THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAWS CITED, WE HOLD AS FOLLOWS. 9. THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY ALONG WITH SHARE PREMIUM FROM M/S. COMPACT COMPUTER CENTRE PVT. LTD. FOR THE BOTH ASSESSMENT YEARS. THIS THE ONLY SHARE APPLICANT COMPANY. THIS COMPANY HAS SUBMITTED THE FOLLOWING DOCUMENTS BEFORE THE REVENUE AUTHORITIES IN SUPPORT OF HIS CONTENTION: I. INVESTMENT LIST AS PER AUDITED BALANCE SHEET FOR THE F.Y 2012-13. II. STATEMENT SHOWING TOTAL AMOUNT OF INVESTMENT IN SHARES OF THE ASSESSEE COMPANY AND DETAILS OF PREMIUM PAID. III. COPY OF THE LEDGER A/C OF SHARE APPLICATION MONEY PAID TO THE ASSESSEE COMPANY. IV. THE SOURCE OF FUND FOR THE ABOVE INVESTMENT WHICH IS SALE OF FLAT. V. COPY OF PAN CARD VI. COPY OF ANNUAL RETURN FORM 5 AS FILED WITH THE REGISTRAR OF COMPANIES FOR THE F.Y 2- 12-13. VII. COPY OF AUDITED ACCOUNTS FOR THE F.YS 2011-12, 2012-13 & 2013-14. VIII. COPY OF BANK STATEMENTS FROM 1.4.2011 TO 31.3.2014 IX. COPY OF INCOME TAX ACKNOWLEDGMENTS FOR THE ASSESSMENT YEARS 2012-13, 2013-14 AND 2014-15. X. COPIES OF THE STATEMENT OF BANK ACCOUNT WITH HDFC BANK OF FEBRUARY 2013 AND MARCH 2013. XI. OFFICE FLAT AT 5/1A, HUNGERFORD STREET, 1 ST FLOOR, KOLKATA -700017 WHICH WAS PURCHASED BY THE COMPANY ON 28.03.198 AND SOLD ON 18.03.2013. XII. COPY OF THE SALE DEED IS ATTACHED. XIII. COPY OF STATEMENT OF INCOME AND THE STATEMENT SHOWING THE COMPUTATION OF LONG TERM CAPITAL GAINS FOR THE ASSESSMENT YEAR 2013-14. 10. THE SOURCE OF FUNDS HAS BEEN EXPLAINED BY THE ASSESSEE AS DERIVED FROM CONSIDERATION RECEIVED FROM SALE OF FLAT AT 5/1A, HUNGERFORD STREET, 1 ST FLOOR, KOLKATA - 700017. THIS FLAT WAS SOLD FOR A CONSIDERATION OF RS.3.65 CRORES WHICH WAS CREDITED TO THE HDFC BANK ACCOUNT OF COMPACT COMPUTER CENTRE PVT. LTD. FROM 15.03.2013 TO 19.03.2013. THE PAYMENTS FOR ALLOTMENT OF SHARES ALONG WITH PREMIUM WAS MADE FROM THE VERY SAME BANK ACCOUNT. THE FAIR MARKET VALUE OF EQUITY SHARES WERE VALUED AS PER 11UA(1)(C)(B) OF THE I.T. RULES 1962. HENCE THE PREMIUM PAID ON EQUITY SHARES IS AS PER LAW. ON THESE FACTS, WE FIND NO INFIRMITY IN THE FINDINGS OF THE LD. CIT(A) WHICH ARE 4 I.T.A. NO.2173/KOL/2016 & I.T.A. NO.52/KOL/2018 M/S. INDRAPRASTHA PROMOTERS PVT. LTD AT PARA 7 PAGE 21 TO 26 OF HIS ORDER FOR THE ASSESSMENT YEAR 2013-14 AND AT PARA 5 PAGE 5 TO 10 OF THE LD. CIT(A) ORDER FOR THE ASSESSMENT YEAR 2014-15. THE ASSESSEE HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF THIS SHAREHOLDER. THE GENUINENESS OF THE TRANSACTIONS IS PROVED. 11. HENCE WE UPHOLD THESE FINDINGS OF THE LD. CIT(A) AND DISMISS BOTH THESE APPEALS OF THE REVENUE AS DEVOID OF MERIT. 12. IN THE RESULT, THE BOTH THESE APPEALS OF THE REVENUE ARE DISMISSED. KOLKATA, THE 31 ST MAY, 2019. SD/- SD/- [ S.S.VISWANETHRA RAVI ] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31.05.2019 (RS, SR. PS) COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-8(4), KOLKATA. 2. . M/S. INDRAPRASTHA PROMOTERS PVT. LTD., 61B, PARK STREET, 3E, 3 RD FLOOR, NEELAM APARTMENTS, KOLKATA 700016. 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES