D.C.I.T.,Circle-6(1), Kolkata V. M/s Diwakar Commercial Pvt. Ltd., Kolkata

ITA 2397/KOL/2019

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122901 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-05-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 04-11-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: TREATING IT
• Keywords: Unexplained cash credit; Set aside
• Section: 68; 148; 143(3); 142(1); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘B’, KOLKATA [Before Dr. Manish Borad, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. No. 2397/Kol/2019 Assessment Year : 2011-12 DCIT, Circle-6(1), Kolkata Vs. M/s. Diwakar Commercial Pvt. Ltd. PAN: AABCD 0440 P Appellant Respondent Date of Hearing 15.05.2023 Date of Pronouncement 06.06.2023 For the Assessee None For the Revenue Smt. Ranu Biswas, Addl. CIT, DR ORDER Per Sonjoy Sarma, JM: The instant appeal has been filed by the revenue against the order of ld. CIT(A)-2, Kolkata dated 09.08.2019. The revenue has raised the following grounds of appeal: “1. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in law in deleting the addition of Rs. 3,98,98,500/- by not considering the merit of the case as elaborated by the AO in the assessment order. 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in law in holding that the addition made by the AO was merely based on suspicion and surmises without any cogent material to controvert the evidence filed by the assessee in support of claim. 3. That the appellant craves for leave to add, delete and modify any of the grounds of appeal before or at the time of hearing.” 2 ITA No. 2397/Kol/2019 AY: 2011-12 M/s. Diwakar Commercial Pvt. Ltd. 2. At the outset, we find that there is a delay of 1 day in filing of the appeal by the assessee. We after perusing the petition for condonation are convinced that the assessee was prevented by sufficient cause from filing the appeal in time and hence delay is condoned and appeal is admitted. 3. Brief facts of the case are that the assessee filed its return of income on 27.09.2011 for A.Y. 2011-12. The assessment of the assessee was completed on 17.02.2014 u/s 143(3) at Rs. 33,96,450/-. Subsequently, the notice u/s 148 was issued upon the assessee for reopening of the assessment by stating that M/s. Newwave Commercial Pvt. Ltd. had transferred fund of Rs. 3.97 crores to the assessee by alleging that the transaction of the loan was not genuine transaction but mere entries were made in the books of assessee and M/s. Newwave Commercial Pvt. Ltd. In response to notice u/s 148 of the Act, the assessee had filed its return of income on 07.05.2018 and notices were issued u/s 143(2) and 142(1) of the Act upon the assessee from the ends of AO. IN response to notices, the assessee filed its submission and after considering the submission made by assessee and also taking into consideration, the information received from the Investigation Wing, the ld. AO viewed that entire amount of Rs. 3.97 crores loan was not genuine transaction but it was mere entries made in the books of assessee and M/s. Newwave Commercial Pvt. Ltd. Therefore, the ld. AO added the entire amount of Rs. 3.97 crores in the hands of assessee by treating it as unexplained cash credit and added entire amount as income in the hands of assessee. 3 ITA No. 2397/Kol/2019 AY: 2011-12 M/s. Diwakar Commercial Pvt. Ltd. 4. Dissatisfied with the above order, assessee preferred an appeal before the ld. CIT(A) where the ld. CIT(A) allow the appeal of the assessee. 5. Aggrieved by the above order, revenue is in appeal before the Tribunal raising multiple grounds of appeal. However, core grievance of the revenue is that ld. CIT(A) has erred in law by deleting the addition made by the AO and allow the appeal in favour of the assessee. 6. At the time of hearing, nobody is present on behalf of the assessee nor any adjournment petition sought for. Therefore, we proceeded to decide the matter ex-parte qua. We decide the appeal on the merits of the case and on the submission made by the ld. DR before us. The ld. DR submitted that the facts of the case that the Assessing Officer had made detailed investigation by issuing notices u/s 133(6) of the Act upon the bank manager of DCB Bank in the case of assessee as well as statement of M/s. Newwave Commercial Pvt. Ltd. for the relevant assessment year and on perusal of those bank statement shows that those entries did not have any financial standing in the hands of M/s. Newwave Commercial Pvt. Ltd. to explain loan of Rs. 3.97 crores. The balance of company for the first six months was very low of Rs. 18/- and for the second half of the year was Rs. 8164/- only. Further, he contended that on the examination of the company from whom M/s. Newwave Commercial Pvt. Ltd. has received fund actually extend such facility for the purpose of provide loan 4 ITA No. 2397/Kol/2019 AY: 2011-12 M/s. Diwakar Commercial Pvt. Ltd. to the assessee, the ld. AO had duly examined the bank statement of Chandraghanta Advisory Pvt. Ltd., Chandraghanta Merchants Pvt. Ltd., Chamundaji Sales Pvt. Ltd., Chinpurni Traders Pvt. Ltd. and Bharat Finance and Industries Ltd. All these accounts shows that the concerned account holders on the relevant dates has received amounts from private limited companies which has immediately been transferred to the account of M/s. Newwave Commercial Pvt. Ltd. Moreover, the bank statements are typically matching with those of entry providing entities with insignificant low effective balance and huge deposits and immediate withdrawal of fund. Therefore, the view taken by the ld. CIT(A) need to be set aside. 7. We have heard the submission made by the ld. DR and perusal of the material available on record. We notice that the ld. CIT(A) simply allowed the appeal of the assessee only on the submission made by the assessee without taking into consideration the findings given by the AO. We also noticed that while the assessment order was framed, the assessee has completely failed to submit any material evidence or documents in support of its contention before the AO and even before the Tribunal to show the fact that view taken by the AO is not correct. The assessee has not submitted any evidences/explanation to discharge its onus u/s 68 of the I.T. Act, 1961 Act even before us. The assessee chose not to appear before us when this appeal was fixed for hearing nor adjournment application was filed. The assessee has not submitted any explanation/evidences to satisfy the mandate of 5 ITA No. 2397/Kol/2019 AY: 2011-12 M/s. Diwakar Commercial Pvt. Ltd. Section 68 of the Act. Thus, in these circumstances, adverse view is to be taken as despite several stages of litigation, and despite being given adequate and sufficient opportunities by us, the assessee failed to satisfy the mandate of Section 68 of the Act with respect to loan of Rs. 3.97 crores raised by assessee during the year under consideration from M/S Newwave commercial Pvt. Ltd.. The onus u/s 68 was on the assessee as the said sum stood credited in its books of accounts, which the assessee failed to discharge the identity, creditworthiness of the creditor and genuineness of the transaction. In such circumstances, we hold that the order passed by the ld. CIT(A) did not properly dealt with the issues involved in the appeal and accordingly, we set aside the order passed by the ld. CIT(A) and sustain the order passed by the AO. In terms of the above, we allow the appeal filed by the revenue. 8. In the result, the appeal of the revenue is hereby allowed. Order pronounced in the open court on 06.06.2023 Sd/- Sd/- (Manish Borad) (Sonjoy Sarma) Accountant Member Judicial Member Dated: 06.06.2023 Biswajit, Sr. PS 6 ITA No. 2397/Kol/2019 AY: 2011-12 M/s. Diwakar Commercial Pvt. Ltd. Copy of the order forwarded to: 1. Appellant- DCIT, Circle-6(1), Kolkata. 2. Respondent – M/s. Diwakar Commercial Pvt. Ltd., 3 rd Floor, 15, G.C. Avenue, Kolkata-700013. 3. Ld. CIT 4. Ld. CIT(A) 5. Ld. DR True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata