M/s. Magenta Nirman Pvt. Ltd., , Kolkata V. ITO, Ward - 1(2), Kolkata , Kolkata

ITA 234/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1256 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-09-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 12-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K M ROY
• Keywords: Opportunity of being heard; Accommodation entries; Rule 8D; Set aside
• Section: 14A; 250; 201; 144

Judgement Text

I.T.A. NO 234/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. M AGENTA NIRMAN PVT. LIMITED PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZO NE) I.T.A. NO. 234/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. MAGENTA NIRMAN PVT. LIMITED,.................. ............................APPELLANT 31/1, CHHATAWALA GALI, 2 ND FLOOR, ROOM NO 211, KOLKATA-700 012 [PAN: AAFCM 8938 H] -VS.- INCOME TAX OFFICER,................................ ............................................RESPOND ENT WARD-1(2), KOLKATA, P-7, CHOWRINGHEE SQUARE, AAYAKAR BHAWAN, KOLKATA-700 069 APPEARANCES BY: SHRI K.M. ROY, FCA & SHRI RAJIV KUMAR CHOUDHURY, FO R THE APPELLANT SMT. RANU BISWAS, ADDL. CIT, SR. D.R. , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 04, 201 9 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 04, 2019 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-1, KOLKATA DAT ED 30.11.2017 PASSED EX-PARTE, WHEREBY HE DISMISSED THE APPEAL OF THE ASSESSEE FOR NON-PROSECUTION. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF INVESTMENT AND TRADING IN SHARES. T HE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 18.02.2013 DECLARING TOTAL INCOME OF RS.1,290/-. FROM THE RELEVANT ITS D ETAILS (INDIVIDUAL TRANSACTION STATEMENT) DOWNLOADED FROM THE SYSTEM, THE ASSESSING OFFICER FOUND THAT CASH DEPOSITS OF RS.10.93 CRORES WERE MADE BY THE ASSESSEE-COMPANY IN ITS BANK ACCOUNT WITH HDFC BANK LIMITED DURING THE YEAR UNDER CONSIDERATION. HE ACCORDINGLY REQUIRED T HE ASSESSEE TO EXPLAIN I.T.A. NO 234/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. M AGENTA NIRMAN PVT. LIMITED PAGE 2 OF 5 THE SOURCE OF THE SAID CASH DEPOSITS. IN REPLY, IT WAS SUBMITTED BY THE ASSESSEE THAT THERE WERE SEVERAL DOUBLE ENTREIS IN THE ITS DETAILS AND THE ACTUAL CASH DEPOSITS MADE IN THE BANK ACCOUNT WERE ONLY TO THE EXTENT OF RS.6.84 CRORES. AS REGARDS THE SOURCE OF THE SAID D EPOSITS, THE FOLLOWING EXPLANATION WAS OFFERED BY THE ASSESSEE IN WRITING: - DURING THE ASSESSMENT PROCEEDINGS FOR THE ASSESSME NT YEAR 2012-13 RELEVANT TO FINANCIAL YEAR 2011-12 WE WERE ASKED TO EXPLAIN THE CASH DEPOSIT IN OUR CURRENT ACCOUNT NO.00080340039080 WI TH HDFC BANK, STEPHEN HOUSE BRANCH. IN THIS REGARD WE WOULD LIKE TO STATE THAT DURING THE RELEVANT PERIOD THE AFORESAID CASH HAS R ECEIVED THROUGH SAFE OF INVESTMENT TO VARIOUS PARTIES, WHOSE DETAIL S HAVE BEEN NARRATED IN THE CASH BOOK. THE AFORESAID TRANSACTIO NS HAVE BEEN DULY INCORPORATED IN BOOKS OF ACCOUNTS THE ABOVE SA LE PROCEEDS HAVE BEEN DEPOSITED IN OUR BANK IN A REGULAR INTERVAL AN D THE PAYMENT MADE TO VARIOUS PARTIES THROUGH TWO TO THREE LAYERS OF TRANSACTIONS AS PER INSTRUCTION OF CASH PROVIDER WHOSE NAME & DE TAILS ARE FOLLOWING AS SUMMARIZED FROM CASH BOOK. WE FURTHER STATE THAT ALL AFORESAID TRANSACTIONS HA VE BEEN DULY INCORPORATED IN BOOKS OF ACCOUNTS BUT FOR THE PEACE OF MIND WE HEREBY OFFER @ 0.50% OF THE TOTAL CASH DEPOSIT, AS INCOME FOR THE AFORESAID ASSESSMENT YEAR. AS A RESPONSIBLE ASSESSEE WE ARE DISCLOSING THE ABO VE INCOME FOR TAXATION VOLUNTARY, WHICH I HAVE NEVER PRESENTED BE FORE THE DEPARTMENT. WE PRAY TO YOUR GOOD SELF FOR WAIVER OF PENALTY PROCEEDINGS AND BURDEN OF INTEREST ON THE ABOVE INC OME AS DISCLOSED BY ME. LIST OF BENEFICIARIES NAME ADDRESS PAN AMOUNT ORIENT COMMOTRADE PVT. LIMITED 33, BRABOURNE ROAD, 2 ND FLOOR, KOLKATA-700 001 AAACO961 8F 30573500 SAFAL AGENCIES PVT. LIMITED 1, OLD COURT HOUSE CORNER, KOLKATA-700 001 AANCS198 2R 2,0075000 ZIA DEALERS PRIVATE LIMITED 1, OLD COURT HOUSE CORNER, KOLKATA-700 001 AAACZ380 5B 178,00000 TOTAL 684,48500 KEEPING IN VIEW THE ABOVE SUBMISSION MADE BY THE AS SESSEE, THE ASSESSING OFFICER REQUIRED THE ASSESSEE-COMPANY TO PRODUCE ITS DIRECTORS I.T.A. NO 234/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. M AGENTA NIRMAN PVT. LIMITED PAGE 3 OF 5 FOR EXAMINATION BEFORE THE ASSESSING OFFICER. THE A SSESSEE WAS ALSO CALLED UPON BY THE ASSESSING OFFICER TO EXPLAIN AS TO WHY THE BOOKS OF ACCOUNT MAINTAINED BY IT SHOULD NOT BE REJECTED UNDER SECTI ON 145(3) OF THE ACT. THE ASSESSEE, HOWEVER, FAILED TO COMPLY WITH THESE REQUIREMENTS OF THE ASSESSING OFFICER. THE ASSESSING OFFICER, THEREFORE , PROCEEDED TO COMPLETE THE ASSESSMENT TO THE BEST OF HIS JUDGMENT ON THE B ASIS OF MATERIAL AVAILABLE ON RECORD. IN THE ASSESSMENT SO COMPLETED UNDER SECTION 144 VIDE AN ORDER DATED 30.03.2015, HE HELD THAT THE AS SESSEE WAS INDULGED IN GIVING ACCOMMODATION ENTRIES BY MAKING CASH DEPOSIT S IN ITS BANK ACCOUNT AND ISSUING CHEQUES INSTANTLY AFTER SUCH DE POSITS. HE ACCORDINGLY ESTIMATED THE INCOME OF THE ASSESSEE FROM THE ACTIV ITY OF GIVING ACCOMMODATION ENTRIES AT RS.13,68,970/- BEING 2% OF THE CASH DEPOSITS MADE BY THE ASSESSEE-COMPANY IN ITS BANK ACCOUNT AN D MADE ADDITION TO THAT EXTENT TO THE TOTAL INCOME OF THE ASSESSEE. HE ALSO MADE A FURTHER ADDITION OF RS.64,029/- ON ACCOUNT OF DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D AND DETERMINED THE TOTAL INCOME O F THE ASSESSEE AT RS.14,34,290/-. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 144, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING BOTH THE ADDITIONS MADE BY THE ASSESSIN G OFFICER TO ITS TOTAL INCOME. DURING THE COURSE OF APPELLATE PROCEEDINGS, THERE WAS NO COMPLIANCE ON THE PART OF THE ASSESSEE TO THE NOTIC ES ISSUED BY THE LD. CIT(APPEALS) FIXING THE APPEAL OF THE ASSESSEE FOR HEARING FROM TIME TO TIME. THE LD. CIT(APPEALS), THEREFORE, DISMISSED TH E APPEAL OF THE ASSESSEE FOR NON-PROSECUTION VIDE HIS APPELLATE ORD ER DATED 30.11.2017 PASSED EX-PARTE. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBU NAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. COUNSEL FOR THE ASSESSEE HAS MADE AN ATTEMPT TO EXPLAIN THE NON-COM PLIANCE OF THE I.T.A. NO 234/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. M AGENTA NIRMAN PVT. LIMITED PAGE 4 OF 5 ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS), I FIND THAT THE ASSESSEE IS GUILTY OF NEGLIGENCE IN MAKING THE COMPLIANCE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS BEFORE THE LD. CIT(APPEALS) DURING THE COURSE OF APPELLATE PROCEEDINGS. AT THE SAME TIME, IT IS ALS O OBSERVED THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) EX-PA RTE DISMISSING THE APPEAL OF THE ASSESSEE FOR NON-PROSECUTION IS NOT I N ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION (6) OF SECTION 250, WHERE BY IT IS INCUMBENT UPON THE LD. CIT(APPEALS) TO DISPOSE OF THE APPEAL OF THE ASSESSEE BY AN ORDER IN WRITING STATING THE POINTS FOR DETERMINATI ON, THE DECISION THEREON AND THE REASON FOR THE DECISION. KEEPING IN VIEW ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THA T THE MATTER SHOULD GO BACK TO THE LD. CIT(APPEALS) FOR DISPOSING OF THE A PPEAL OF THE ASSESSEE AFRESH ON MERIT IN ACCORDANCE WITH THE PROVISIONS O F SUB-SECTION (6) OF SECTION 250 SUBJECT TO A PAYMENT OF COST OF RS.5,00 0/- BY THE ASSESSEE TO THE DEPARTMENT. SUBJECT TO THE SAID PAYMENT, THE IM PUGNED ORDER PASSED BY THE LD. CIT(APPEALS) EX-PARTE IS SET ASIDE AND T HE MATTER IS REMITTED BACK TO HIM FOR DISPOSING OF THE APPEAL OF THE ASSE SSEE AFRESH ON MERIT IN ACCORDANCE WITH LAW AFTER GIVING PROPER AND SUFFICI ENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS UNDERTAKEN BY THE L D. COUNSEL FOR THE ASSESSEE, THE ASSESSEE SHALL MAKE DUE COMPLIANCE BE FORE THE LD. CIT(APPEALS) AND SHALL EXTEND ALL THE POSSIBLE COOP ERATION IN ORDER TO ENABLE THE LD. CIT(APPEALS) TO DISPOSE OF THE APPEA L EXPEDITIOUSLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 04, 2019. SD/- (P.M. JAGTAP) VICE-PRESIDENT (KZ) KOLKATA, THE 4 TH DAY OF SEPTEMBER, 2019 I.T.A. NO 234/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. M AGENTA NIRMAN PVT. LIMITED PAGE 5 OF 5 COPIES TO : (1) M/S. MAGENTA NIRMAN PVT. LIMITED, 31/1, CHHATAWALA GALI, 2 ND FLOOR, ROOM NO 211, KOLKATA-700 012 (2) INCOME TAX OFFICER, WARD-1(2), KOLKATA, P-7, CHOWRINGHEE SQUARE, AAYAKAR BHAWAN, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-1, KOLKA TA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.