ITO,Ward-9(1), Kolkata, Kolkata V. M/s Accurex Traders Pvt. Ltd., New Delhi

ITA 2408/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5363 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOWDHURY
• Assessee Lawyers: MANISH TIWARI
• Keywords: Unexplained cash credit; Reassessment proceedings
• Section: 143(3); 142(1); 14A; 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SHRI A T VARKEY, JM, & SHRI M.BAL AGANESH, AM] I.T.A NO. 2408/KOL/20 17 ASSESSMENT YEAR : 2009-1 0 ITO, WARD-9(3), KOLKATA -VS- M/S ACCUREX TRADERS PVT. LTD. [PAN: AACCA 1330 J ] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI ROBIN CHOWDHU RY, ADDL. CIT SR. DR FOR THE RESPONDENT : SHRI MANISH TIWARI, AR DATE OF HEARING : 11.10.2018 DATE OF PRONOUNCEMENT : 16.10.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-3, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO. CIT(A), KOLKATA-3/10988/2016-17 DATED 09.10.2017 AGAINST T HE ORDER PASSED BY THE ITO, WARD- 9(1), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 147 / 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 30.12.2016 FOR TH E ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE HAD RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US: 1. THE LD. CIT(A) IS NOT JUSTIFIED AS WELL AS HAS E RRED IN LAW FOR DELETING THE ADDITION TO THE TUNE OF RS. 2,08,71,151/- MADE AS U NEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT. 2. THE LD. CIT(A) IS NOT JUSTIFIED AS WELL AS HAS ERRED IN LAW FOR DELETING THE DISALLOWANCE OF RS. 5,55,588/- U/S 14A OF THE ACT R EAD WITH RULE 8D. 2 ITA NO.2408/KOL/2017 M/S ACCUREX TRADERS PVT. LTD. A.YR. 2009-10 2 3. THAT THE PETITIONER CRAVES LEAVE TO ADDUCE FURTH ER GROUNDS OF APPEAL, IF NECESSARY AT THE TIME OF HEARING OF APPEAL. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE IS A DOMESTIC COMPANY AND IS A NON- BANKING FINANCE COMPANY. THE RETURN OF INCOME FOR A SSESSMENT YEAR 2009-10 WAS FILED ON 24.09.2009 DECLARING TOTAL INCOME OF RS. NIL. TH EREAFTER THE ASSESSMENT WAS SOUGHT TO BE REOPENED BY ISSUANCE OF NOTICE U/S 148 OF THE ACT ON 31.03.2016 AND DULY SERVED UPON THE ASSESSEE. IN COMPLIANCE TO THE NOTICE U/S 148 OF THE ACT, THE ASSESSEE FILED ITS RETURN OF INCOME ON 13.08.2016. SUBSEQUENTLY, NOTIC ES U/S 143(2) AND 142(1) OF THE ACT WERE DULY ISSUED AND SERVED ON THE ASSESSEE. THE LD . AO DURING THE COURSE OF REASSESSMENT PROCEEDINGS OBSERVED THAT THERE ARE TO TAL DEPOSITS OF RS. 2,08,71,151/- IN BANK A/C NO. 53205026065 MAINTAINED BY THE ASSESSEE WITH STANDARD CHARTERED BANK, FOR WHICH THE DETAILS AND EXPLANATIONS WERE SOUGHT BY THE LD. AO. THE ASSESSEE DID NOT FURNISH PROPER EXPLANATION REGARDING SOURCE OF SAID DEPOSITS AND ACCORDINGLY, THE LD. CIT(A) ADDED THE SAME AS UNEXPLAINED CASH CREDIT. THE LD. AO ALSO MADE AN ADDITION U/S 14A OF THE ACT IN THE SUM OF RS. 5,55,588/- UND ER THIRD LIMB OF RULE 8D(2) OF THE IT RULES. THE ASSESSEE CARRIED THE MATTER IN APPEAL BE FORE THE LD. CIT(A). BEFORE THE LD. CIT(A), THE ASSESSEE PLEADED THAT THE REASONS RECOR DED FOR REASSESSMENT WERE SOUGHT FOR BY THE ASSESSEE AND THE SAME WAS DULY SUBMITTED BY THE LD. AO TO THE ASSESSEE. THE ASSESSEE FILED OBJECTIONS AGAINST THE REASONS RECOR DED FOR REOPENING BEFORE THE LD. AO. THE ASSESSEE PLEADED THAT THESE OBJECTIONS WERE NOT DISPOSED OFF BY THE LD. AO BY A SEPARATE SPEAKING ORDER. ACCORDINGLY, THE ASSESSEE PLEADED THAT THE DIRECTIONS AND GUIDELINES ISSUED BY THE HONBLE APEX COURT IN THE CASE OF G.K.N DRIVESHAFTS INDIA PVT. LTD. VS. ITO REPORTED IN 259 ITR 19 (SC) WERE NOT COMPLIED WITH BY THE LD AO. THE LD. CIT(A) DULY APPRECIATED THESE SUBMISSIONS O F THE ASSESSEE AND HELD THAT THE REOPENING OF THE ASSESSMENT WAS NOT IN ACCORDANCE W ITH GUIDELINES OF THE HONBLE APEX COURT REFERRED TO SUPRA AND THEREFORE THE REASSESSM ENT FRAMED IS VOID AB INITIO. HE ALSO HELD THAT THE APPEAL OF THE ASSESSEE ON THIS ISSUE WAS THEREFORE ALLOWED.. THE LD. CIT(A) 3 ITA NO.2408/KOL/2017 M/S ACCUREX TRADERS PVT. LTD. A.YR. 2009-10 3 THEREAFTER ALSO PROCEEDED TO ADJUDICATE THE ISSUE O N MERITS AND GAVE RELIEF TO THE ASSESSEE. AGGRIEVED THE REVENUE IS IN APPEAL AGAINS T THE GROUNDS REPRODUCED SUPRA. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. AT THE OUTS ET, WE FIND THAT THE LD. CIT(A) HAD HELD THAT THE REASSESSMENT FRAMED BY THE LD. AO IS VOID AB INITIO. WE FIND THAT THE REVENUE HAD NOT RAISED ANY GROUND BEFORE US AGAINST THIS QUASHING OF REASSESSMENT BY THE LD. CIT(A). WE ALSO FIND THAT THE LD. AO HAD DU LY BROUGHT THIS FACT TO THE NOTICE OF THE LD. CIT(A) WHILE SUGGESTING THE GROUNDS FOR FIL ING OF SECOND APPEAL BEFORE THIS TRIBUNAL. IN OTHER WORDS, THE LD. AO HAD RECOMMENDE D THE SUGGESTIVE GROUNDS OF APPEAL BOTH ON CHALLENGING THE QUASHING OF REASSESSMENT BY THE LD. CIT(A) AS WELL AS THE DELETION OF ADDITION ON MERITS. HOWEVER, THE ADMINI STRATIVE CIT IN HIS WISDOM CHOSE TO APPROVE THE GROUNDS TO BE RAISED BEFORE THIS TRIBUN AL ONLY IN RESPECT OF ADDITIONS CONTESTED ON MERITS, MEANING THEREBY, NO GROUND WAS SUGGESTED / APPROVED BY THE LD. ADMINISTRATIVE CIT TO BE FILED BEFORE THIS TRIBUNAL AGAINST THE ORDER QUASHING THE REASSESSMENT BY THE LD. CIT(A). HENCE, WE FIND THAT THE ENTIRE APPEAL PREFERRED BY THE REVENUE IS NOT MAINTAINABLE AS THE ADJUDICATION OF THE ISSUE ON MERITS WOULD ONLY BECOME ACADEMIC IN NATURE WHEN THE REASSESSMENT PER SE HAD BEEN DECLARED VOID AB INITIO BY THE LD. CIT(A) WHICH REMAIN UNCHALLENGED BY THE REVENUE BEFORE US. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISM ISSED AS NOT MAINTAINABLE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 16.10.20 18 SD/- SD/- [A T VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 16.10.2018 SB, SR. PS 4 ITA NO.2408/KOL/2017 M/S ACCUREX TRADERS PVT. LTD. A.YR. 2009-10 4 COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-9(1), KOLKATA, AAYAKAR BHAWAN, P-7, CH OWRINGHEE SQUARE, KOLKATA- 700069. 2. M/S ACCUREX TRADERS PVT. LTD., UNIT NO. 250, BLO CK-3, TRIBHUWAN COMPLEX, ISWAR NAGAR, NEW DELHI-110065 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES