ITO, Ward - 2(2), Kolkata , Kolkata V. M/s. Aryvarat Construction Pvt. Ltd., Kolkata

ITA 2203/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6712 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 17-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 131; 68; 6

Judgement Text

1 ITA NO.2203/KOL/2017 ARYVARAT CONSTR UCTION PVT. LTD., AY- 2012-13 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA ( ) . . , . . ! , ' #$ ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI A. T. VARKEY, JM] I.T.A. NO. 2203/KOL/2017 ASSESSMENT YEAR: 2012-13 INCOME-TAX OFFICER, WARD-2(2), KOLKATA VS. M/S. ARYVARAT CONSTRUCTION PVT. LTD. (PAN: AAKCA4003A) APPLICANT RESPONDENT DATE OF HEARING 07.01.2019 DATE OF PRONOUNCEMENT 23.01.2019 FOR THE APPLICANT SHRI SANKAR HALDER, JCIT, SR. DR FOR THE RESPONDENT SHRI A. K. TIBREWALA, FCA & SHRI AMIT AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. CIT(A)-9, KOLKATA DATED 11.07.2017 FOR AY 2012-13. 2. THE MAIN GRIEVANCE OF REVENUE IS AGAINST THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.85,00,000/- AS MADE BY THE AO U/S. 6 8 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON ACCOUNT O F UNEXPLAINED CASH CREDIT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF SHARE TRADING. ACCORDING TO AO, THE ASSESSEE DURING THE PREVIOUS Y EAR 2011-12 RELATING TO ASSESSMENT YEAR UNDER CONSIDERATION HAD RECEIVED SHARE APPLICATION MONEY ALONG WITH PREMIUM FROM VARIOUS RESOURCES. ACCORDING TO AO, DESPITE SUMMONS U/S. 131 OF THE ACT WAS SERVED ON THE DIRECTOR OF THE ASSESSEE COMPANY AND A FINAL SHOW CAUSE NOTICE WAS SERVED ON THE ASSESSEE, TO EXPLAIN THE NATURE AND SOURCE OF SHARE APPLICAT ION MONEY AND COMPLETE DETAILS OF SHARE PREMIUM RECEIVED, NO COMPLIANCE WAS MADE ON THE SAI D DATE BEFORE HIM. SINCE NO DETAILS 2 ITA NO.2203/KOL/2017 ARYVARAT CONSTR UCTION PVT. LTD., AY- 2012-13 HAVE BEEN SUBMITTED BY THE ASSESSEE AND SINCE NO VE RIFICATION OF SHARE CAPITAL INTRODUCED COULD NOT BE MADE DUE TO NON-COMPLIANCE ON THE PART OF THE ASSESSEE, THE AO ADDED THE SHARE APPLICATION MONEY ALONG WITH THE PREMIUM AMOU NTING TO RS. 85,00,000/- U/S. 68 OF THE ACT AS UNEXPLAINED CASH CREDIT. AGGRIEVED, ASSESSE E PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO DELETED THE ADDITION. AGGRIEVED, REVEN UE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET ITSELF, IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE AO HAS MADE THE ADDITION OF RS. 85,00,000/- U/S. 68 OF THE ACT WITH OUT TAKING INTO CONSIDERATION THE FACT THAT THE ASSESSEE HAS ALLOTTED THE SHARES OF THE COMPANY IN EXCHANGE FOR ACQUISITION OF SHARES FROM THOSE COMPANIES (SHARE APPLICANT COMPANIES) AN D THEREBY, WE NOTE THAT NO SUM OF MONEY/CASH WAS TRANSFERRED BETWEEN THE ASSESSEE AND THE SHARE SUBSCRIBERS AND THE LD. CIT(A) PASSED THE IMPUGNED ORDER TAKING NOTE OF TH E DECISIONS GIVEN BY THIS TRIBUNAL IN THE CASE OF ITO VS. ANUPAM NANDI IN ITA NO. 774/KOL /2012 AND THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF JATIA INVESTMENT CO. VS. CIT 206 ITR 718 AND OTHER CASES. WE NOTE THAT IN THIS CASE, THE SHARES SUBSCRIBERS HAVE GIVEN SHARES IN EXCHANGE OF THE SHARES OF THE ASSESSEE AND NO SUM OF MONEY HAS BEEN TRANSFERR ED TO THE ASSESSEE ON THIS SCORE. IN SIMILAR CASE, THE TRIBUNAL IN THE CASE OF ANAND ENT ERPRISES LTD. IN ITA NO.1614/KOL/2016 DATED 26.09.2018 WHEREIN IN SIMILAR ISSUE AROSE AND THE TRIBUNAL HELD AS UNDER: 4.2. IT WOULD BE PERTINENT TO NOTE THAT IN THE IN STANT CASE, THE LD. AO HAD NOT DOUBTED THE INVESTMENT MADE IN SHARES BY THE ASSESSEE COMPANY. THERE IS NO DISPUTE RAISED BY THE LD. AO WITH REGARD TO NUMBER OF SHARES; VALUE THEREON INVE STED BY THE ASSESSEE COMPANY. WE ALSO FIND THAT THE CO-ORDINATE BENCH DECISION OF PUNE TR IBUNAL IN THE CASE OF KANTILAL AND BROS. VS. ACIT REPORTED IN 52 ITD 412 (PUNE TRIB.) ALSO S UPPORTS THE CASE OF THE ASSESSEE. 4.3. IN VIEW OF THE AFORESAID OBSERVATIONS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRECE DENTS RELIED UPON HEREINABOVE, WE HOLD THAT THE LD. AO HAD ERRONEOUSLY INVOKED THE PROVISI ONS OF SECTION 68 OF THE ACT TO THE FACTS OF THE INSTANT CASE, WHICH, IN OUR CONSIDERED OPINION, ARE NOT AT ALL APPLICABLE HEREIN. THIS IS A SIMPLE CASE OF ACQUIRING SHARES OF CERTAIN COMPANIE S FROM CERTAIN SHAREHOLDERS WITHOUT PAYING ANY CASH CONSIDERATION AND INSTEAD THE CONSI DERATION WAS SETTLED THROUGH ISSUANCE OF SHARES TO THE RESPECTIVE PARTIES. MOREOVER, IN THE BALANCE SHEET OF THE ASSESSEE COMPANY IN THE SCHEDULE TO SHARE CAPITAL, IT IS VERY CLEARLY M ENTIONED BY WAY OF NOTE THAT THE FRESH SHARE CAPITAL WAS RAISED DURING THE YEAR FOR CONSIDERATIO N OTHER THAN CASH. HENCE WE HOLD THAT PROVISION OF SECTION 68 OF THE ACT ARE NOT APPLICAB LE IN THE INSTANT CASE AND ACCORDINGLY THE ENTIRE ADDITION DESERVES TO BE DELETED WHICH HAS RI GHTLY BEEN DONE BY THE LD. CIT(A) WHICH 3 ITA NO.2203/KOL/2017 ARYVARAT CONSTR UCTION PVT. LTD., AY- 2012-13 DOES NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY, GRO UNDS RAISED BY THE REVENUE ARE DISMISSED. 5. RESPECTFULLY FOLLOWING THE RATIO LAID BY THE TRI BUNAL (SUPRA), AND TAKING NOTE OF THAT FACTS AND LAW GOVERNING THE ISSUE WERE THE SAME AND THOUGH THE LD. DR VEHEMENTLY ASSAILED THE ORDER OF THE LD. CIT(A) COULD NOT POINT OUT ANY DIFFERENCE IN THE FACTS AND LAW IN THE CASE ON HAND WITH THE AFORESAID ORDER, THEREFORE, F OLLOWING THE ORDER OF THE TRIBUNAL CITED (SUPRA), WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 23RD JANUA RY, 2019. SD/- SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 23RD JANUARY, 2019 JD.(SR.P.S.)\ COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-2(2), KOLKATA 2 RESPONDENT M/S. ARYVARAT CONSTRUCTION PVT. LTD. , 56, METCALF STREET, KOLKATA-700 013 3. 4. CIT(A)-9, KOLKATA. (SENT THROUGH E-MAIL) CIT- , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR