A.C.I.T., Circle-1, Midnapore, Midnapore V. M/s Medinimata agro Products (P) Ltd., Midnapore

ITA 229/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4605 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2016
• Appeal Filed By: Department
• Bench Allotted: SMC
• Next Hearing Date: 11-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2014
• Court: TRIBUNAL
• Department Lawyers: PRABAL CHOWDHURY
• Keywords: Validity of assessment
• Section: 143(3); 147; 148

Judgement Text

I.T.A. NO. 229/KOL./2014 ASSESSMENT YEAR: 2007-2008 & C.O. NO. 25/KOL/2014 (ARISING OUT OF ITA NO. 229/KOL/2014) ASSESSMENT YEAR: 2007-2008 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 229/KOL/ 2014 ASSESSMENT YEAR: 2007-2008 ASSISTANT COMMISSIONER OF INCOME TAX,.............. .....................APPELLANT CIRCLE-1, MIDNAPORE, AMRAVATI LODGE, RAJA N.L. KHAN ROAD, KERANITALA, MIDNAPORE-721 101 -VS.- M/S. MEDINIMATA AGRO PRODUCTS (P) LIMITED,......... .................RESPONDENT BHAGWATI CHAWK, P.O. VIDYASAGAR UNIVERSITY, MIDNAPORE-721 102 [PAN : AAECM 8476 B] & C.O. NO. 25/KOL/2014 (IN I.T.A. NO. 229/KOL/ 2014) ASSESSMENT YEAR: 2007-2008 M/S. MEDINIMATA AGRO PRODUCTS (P) LIMITED,......... .................CROSS OBJECTOR BHAGWATI CHAWK, P.O. VIDYASAGAR UNIVERSITY, MIDNAPORE-721 102 [PAN : AAECM 8476 B] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ........................RESPONDENT CIRCLE-1, MIDNAPORE, AMRAVATI LODGE, RAJA N.L. KHAN ROAD, KERANITALA, MIDNAPORE-721 101 APPEARANCES BY: SHRI PRABAL CHOWDHURY, JCIT, D.R., FOR THE DEPARTMENT SHRI SOMNATH GHOSH, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : AUGUST 11, 2016 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 02, 2016 I.T.A. NO. 229/KOL./2014 ASSESSMENT YEAR: 2007-2008 & C.O. NO. 25/KOL/2014 (ARISING OUT OF ITA NO. 229/KOL/2014) ASSESSMENT YEAR: 2007-2008 PAGE 2 OF 4 O R D E R THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA DATED 26.11.2013 AND THE SAME IS BEING DISPOSED OF ALONG WITH THE CR OSS OBJECTION FILED BY THE ASSESSEE BEING C.O. NO. 25/KOL/2014. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 29.10.2007 DECLARING TOTAL INCOME AT NIL. THE SAID RETURN WA S ORIGINALLY PROCESSED BY THE ASSESSING OFFICER UNDER SECTION 143(1). SUBS EQUENTLY INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER REGARDING THE PAYMENT OF RS.40,00,000/- MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AS EXTORTION MONEY. HE, THEREFORE, REOPENED THE ASS ESSMENT BY ISSUING NOTICE UNDER SECTION 148 AND IN THE ASSESSMENT COMP LETED UNDER SECTION 143(3) READ WITH SECTION 147, AN ADDITION OF RS.40, 00,000/- WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF EXTORTION MONEY PAID BY THE ASSESSEE. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) READ WITH SECTION 147, AN APPEAL WAS PREFERR ED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE VALIDIT Y OF THE SAID ASSESSMENT AS WELL AS DISPUTING THE ADDITION OF RS. 40,00,000/- MADE THEREIN ON ACCOUNT OF DISALLOWANCE OF EXTORTION MON EY PAID. THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE CASE OF THE ASSESSEE ON THE ISSUE OF VALIDITY OF ASSESSMENT MADE BY THE ASSESSING OFFICE R UNDER SECTION 143(3) READ WITH SECTION 147 AND REJECTING THE SAME , HE PROCEEDED TO UPHOLD THE VALIDITY OF THE SAID ASSESSMENT. HE, HOW EVER, FOUND MERIT IN THE STAND OF THE ASSESSEE THAT NO DEDUCTION ON ACCO UNT OF EXTORTION MONEY HAVING BEEN CLAIMED IN THE RETURN OF INCOME, THE DI SALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUCH EXTORTION MONEY WAS NOT I.T.A. NO. 229/KOL./2014 ASSESSMENT YEAR: 2007-2008 & C.O. NO. 25/KOL/2014 (ARISING OUT OF ITA NO. 229/KOL/2014) ASSESSMENT YEAR: 2007-2008 PAGE 3 OF 4 SUSTAINABLE. ACCORDINGLY, HE DELETED THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXTORTION MONEY PAI D BY THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL CHALLENGING THE DEL ETION BY THE LD. CIT(APPEALS) OF THE ADDITION OF RS.40,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF EXTORTION MON EY PAID, WHILE THE ASSESSEE HAS FILED ITS CROSS OBJECTION RAISING A PR ELIMINARY ISSUE RELATING TO THE VALIDITY OF ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SECTION 147. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS TAKEN US THROUGH THE PROFIT & LOSS ACCOUNT OF THE A SSESSEE-COMPANY FOR THE YEAR UNDER CONSIDERATION ALONG WITH THE RELEVAN T SCHEDULES (COPIES PLACED AT PAGES 73 TO 75 OF THE PAPER BOOK) TO POIN T OUT THAT NO EXPENDITURE ON ACCOUNT OF EXTORTION MONEY PAID AMOU NTING TO RS.40,00,000/- WAS ACTUALLY CLAIMED BY THE ASSESSEE AND THIS POSITION CLEARLY EVIDENT FROM THE SAID DOCUMENTS HAS NOT BEE N DISPUTED OR CONTROVERTED EVEN BY THE LD. D.R. IT IS THUS CLEAR THAT NO DEDUCTION ON ACCOUNT OF EXTORTION MONEY PAID WAS ACTUALLY CLAIME D BY THE ASSESSEE AND THERE WAS THUS NO QUESTION OF MAKING ADDITION BY DI SALLOWANCE OF SUCH EXTORTION MONEY AS RIGHTLY HELD BY THE LD. CIT(APPE ALS). I, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(A PPEALS) DELETING THE ADDITION OF RS.40,00,000/- MADE BY THE ASSESSING OF FICER BY WAY OF DISALLOWANCE OF EXTORTION MONEY AND UPHOLDING THE S AME, I DISMISS THIS APPEAL OF THE REVENUE. 5. AS A RESULT OF OUR DECISION RENDERED WHILE DISPO SING OF THE APPEAL OF THE REVENUE, WHEREBY THE IMPUGNED ORDER OF THE L D. CIT(APPEALS) DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXTORTION MONEY IS UPHELD, THE ISSUE RAISED BY THE ASSESSEE IN ITS CROSS I.T.A. NO. 229/KOL./2014 ASSESSMENT YEAR: 2007-2008 & C.O. NO. 25/KOL/2014 (ARISING OUT OF ITA NO. 229/KOL/2014) ASSESSMENT YEAR: 2007-2008 PAGE 4 OF 4 OBJECTION CHALLENGING THE VALIDITY OF ASSESSMENT MA DE BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SECTION 147 HAS BECOME ACADEMIC OR INFRUCTUOUS. I, THEREFORE, DISMISS THE CROSS OBJ ECTION OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 02, 2016. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 2 ND DAY OF SEPTEMBER, 2016 COPIES TO : (1) ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, MIDNAPORE, AMRAVATI LODGE, RAJA N.L. KHAN ROAD, KERANITALA, MIDNAPORE-721 101 (2) M/S. MEDINIMATA AGRO PRODUCTS (P) LIMITED, BHAGWATI CHAWK, P.O. VIDYASAGAR UNIVERSITY, MIDNAPORE-721 102 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-XXXVI, KO LKATA (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.