ITO, Ward-2(4), Burdwan, Burdwan V. M/s R.J.Business Solution Pvt. Ltd., Burdwan

ITA 239/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6092 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 08-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K BANDOPADHYAY
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA [BEFORE SRI S.S. GODARA, JUDICIAL MEMBER& SRI M. BALAGANESH, ACCOUNTANT MEMBER] I.T.A. NO. 239/KOL/2017 ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER, WARD-2(4), KOLKATA........APPELLANT M/S. R.J. BUSINESS SOLUTION PVT. LTD.....................................RESPONDENT AMBAGAN, NUTUN COLONY CHOTONILPUR SRIPALLY DIST BURDWAN - 713103 [PAN AAECR 8270 J] APPEARANCES BY: NONE ,APPEARED ON BEHALF OF THE ASSESSEE. SHRI A. .K. BANDOPADHYAY, ADDL. CIT, SR.DR APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JUNE 13 TH ,2018 DATE OF PRONOUNCING THE ORDER : JULY 11 TH ,2018 ORDER PER S.S. GODARA, JM :- THIS REVENUES APPEAL FOR THE ASSESSMENT YEAR 2011-12 CHALLENGES THE CORRECTNESS OF THE COMMISSIONER OF INCOME TAX (APPEALS) BURDWANS (HEREINAFTER THE CIT(A)) ORDER DATED 29/11/2016 IN CASE NO. 39/CIT(A)/BWN/ITO/W-2(4)/015-16 REVERSING THE ACTION OF THE ASSESSING OFFICER MAKING UNEXPLAINED SHARE APPLICATION MONEY ADDITION OF RS.79,94,500/- IN ASSESSMENT ORDER DT. 31/03/2015 INVOLVING PROCEEDINGS U/S 144/147 OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). 2. LEARNED DEPARTMENTAL REPRESENTATIVE TAKES US TO THE CIT(A)S DETAILED DISCUSSION ON THE ABOVE STATED SOLE ISSUE GRANTING RELIEF TO THE ASSESSEE AS FOLLOWS:- FACTS OF THE CASE ARE THAT THE APPELLANT COMPANY HAD INTRODUCED SHARE CAPITAL TO THE TUNE OF RS 79.94 LAKHS DURING THE RELEVANT PERIOD WHICH WAS CLAIMED TO BE FROM SEVERAL SHARE APPLICANTS. THE AO, DURING ASSESSMENT PROCEEDINGS, HELD THE ENTIRE SHARE SUBSCRIPTION TO BE BOGUS AND ADDED THE AMOUNTS BACK INTO THE HANDS OF THE COMPANY AS ITS OWN INCOME FORM UNDECLARED SOURCES. U/S 68 OF THE ACT. DURING APPEAL PROCEEDINGS, THE APPELLANT HAS ATTENDED AND STATED THAT HE IS NOT PRESSING THE VARIOUS ISSUES OF THE APPEAL IN VIEW OF THE FACT THAT HE, ALONG WITH THE PROMOTERS AND THEIR GROUP FIRM HAD GONE IN FOR A SETTLEMENT IN FRONT OF THE SETTLEMENT COMMISSION, KOLKATA BENCH AND HAD OBTAINED AN ORDER FOR SUCH SETTLEMENT. IN THIS ORDER, A COPY OF WHICH HAS BEEN SUBMITTED AND PLACED ON RECORD, HE HAS SHOWN THAT THE SETTLEMENT COMMISSION HAS ACCEPTED HE DECLARATION OF THE APPELLANT THAT THE MAIN INVESTORS IN THE APPELLANT COMPANY WERE THE PROMOTERS OF THE COMPANY, SHRI JOGENDRA BURMAN AND HIS WIFE, ANITA BURMAN ALONG WITH THEIR OWN FIRM MA SARBAMANGLA QUALITY SAND, EACH SEPARATELY ASSESSED TO TAX. THE AR, IN THIS RESPECT, HAS SUBMITTED THE FOLLOWING: 2 I.T.A. NO. 239/KOL/2017 ASSESSMENT YEAR: 2011-12 M/S. R.J. BUSINESS SOLUTION PVT. LTD IN THIS CASE, THE TOTAL INVESTMENT IN SHARE CAPITAL OF THE COMPANY DURING THE AY 2011- 12 WAS RS 79,45,000/-. THE LIST OF PROMOTERS CONTAINS NAMES OF VARIOUS PEOPLE INCLUDING THE NAMES OF MAIN PROMOTERS, SHRI J. BURMAN AND HIS WIFE ANITA BURMAN. THAT SHRI JOGENDRA BURMAN HAS OBTAINED AN ORDER FROM THE SETTLEMENT COMMISSION WHEREIN HE HAS OFFERED FOR TAXATION THE SHARE APPLICATION MONEY AND PAID TAX ON THE SAME. THAT THE INVESTMENT IN THE APPELLANT COMPANY HAS BEEN MADE OUT OF THE INCOME OF THE PARTNERSHIP FIRM MA SARBAMANGALA QUALITY SAND (MSQS.), WHERE THE SHRI J BURMAN AND HIS WIFE ANITA BURMAN ARE THE ONLY PARTNERS. THAT THE INVESTMENTS WERE MADE IN THE NAMES OF VARIOUS BENAMDARS AND THE ACTUAL INVESTMENTHAS COME OUT OF THE PARTNERSHIP FIRM MSQS. THAT THE SETTLEMENT COMMISSION, AFTER NECESSARY INQUIRIES, HAS PASSED AN ORDER SAYING THAT OUT OF THE INVESTMENT OF RS 79,45,0001- DURING THE AY 2011-12, SHRI JOGENDRA BURMAN MADE 11 INVESTMENT OF RS 8 LAKH; HIS WIFE MADE AN INVESTMENT OF RS 5,5 LAKH AND THAT THESE ARE ACCEPTED AS GENUINE AND CREDITWORTHY FOR THE INVESTMENTS TO HAVE COME OUT OF THEIR OWN INDIVIDUALS AND MINING BUSINESS, REGULARLY ASSESSED TO TAX. BALANCE INVESTMENT OF RS 79.45 LAKH - RS 13,50 LAKH = 66,95 LAKH WAS NOT FOUND TO BE CREDITWORTHY. IN THE HANDS OF THE CLAIMED INVESTORS AND WAS TO BE TAXED IN THE HANDS OF THE PARTNERSHIP FIRM MSQS AS PER THE ORDER OF THE SETTLEMENT COMMISSION. THE APPELLANT HAS PROVIDED THE FOLLOWING SUMMARY: 3 I.T.A. NO. 239/KOL/2017 ASSESSMENT YEAR: 2011-12 M/S. R.J. BUSINESS SOLUTION PVT. LTD IN VIEW OF THESE DEVELOPMENTS, THE APPELLANT HAS PRAYED THAT HE BE ALLOWED RELIEF IN APPEAL. I HAVE PERUSED THE ORDER OF ITSC SUBMITTED BEFORE ME AND FIND MERIT IN WHAT THE APPELLANT HAS SAID. AN AMOUNT OF RS 79.45 LAKH HAS BEEN OFFERED FOR TAXATION FOR THE IMPUGNED ASSESSMENT YEAR AND HAS BEEN ACCEPTED BY THE ITSC AS SUCH AFTER VERIFICATION, IN ITS ORDER DATED ,29.6.2016 THIS PART OF THE ADDITION THEREFORE DOES NOT STAND IN APPEAL. THE AO HOWEVER HAS MADE AN ADDITION OF RS 79,94,500/- ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION/PREMIUM U/S 68 OF THE ACT OUT OF THIS, AN AMOUNT OF 79.45 LAKH AS SHARE APPLICATION/PREMIUM OFFERED FOR TAXATION AND ACCEPTED BY ITSC WOULD NOT STAND IN THE ASSESSMENT ORDER. HOWEVER, THE APPELLANT HAS OFFERED NO EXPLANATION FOR THE BALANCE AMOUNT OF SHARE APPLICATION/ PREMIUM MONEY RECEIVED BY THE APPELLANT AND THAT HAS BEEN ADDED TO THE APPELLANT'S INCOME AS UNEXPLAINED U/S 68 OF THE ACT THIS BALANCE, THEREFORE, OF RS 4 I.T.A. NO. 239/KOL/2017 ASSESSMENT YEAR: 2011-12 M/S. R.J. BUSINESS SOLUTION PVT. LTD 79,94,500/- - 79,45,000/- = RS 49,500/- IS CONFIRMED AS UNDISCLOSED INCOME OF THE APPELLANT U/S 68 OF THE ACT. THE REST, IN ACCORDANCE WITH THE ORDER OF THE ITSC STANDS DELETED. 3. LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN REVERSING THE ASSESSING OFFICERS ACTION MAKING THE IMPUGNED ADDITION OF UNEXPLAINED SHARE APPLICATION MONEY. WE FIND NO MERIT IN THIS INSTANT SOLE PLEA SINCE WITH THE INCOME TAX SETTLEMENT COMMISSIONS ORDER HAS ASSESSED THE VERY AMOUNT IN THE HANDS OF ASSESSEES SHARE APPLICANTS CONCERNED ( SUPRA) . WE THEREFORE CONCLUDE THAT THE CIT(A) HAS RIGHTLY GRANTED RELIEF TO THE ASSESSEE TO AVOID AN INSTANCE OF DOUBLE ADDITION QUA THE VERY ISSUE DURING THE COURSE OF LOWER APPELLATE PROCEEDINGS. REVENUES SOLE SUBSTANTIVE GROUND IS DECLINED THEREFORE. 4. THIS REVENUES APPEAL IS DISMISSED. KOLKATA, THE 11 TH DAY OF JULY, 2018. SD/- SD/- [M. BALAGANESH] [ S.S. GODARA ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATED : 11.07.2018 {SC SPS} 5 I.T.A. NO. 239/KOL/2017 ASSESSMENT YEAR: 2011-12 M/S. R.J. BUSINESS SOLUTION PVT. LTD COPY OF THE ORDER FORWARDED TO: 1. INCOME TAX OFFICER, WARD-2(4), KOLKATA 2. M/S. R.J. BUSINESS SOLUTION PVT. LTD AMBAGAN, NUTUN COLONY CHOTONILPUR SRIPALLY DIST BURDWAN - 713103 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES