Long View Trade & Credit Private Limited , Kolkata V. ITO, Ward - 6(2), , Kolkata

ITA 2496/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9734 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 30-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHANKAR HALDER
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Opportunity of being heard; Set aside
• Section: 131; 68

Judgement Text

1 ITA NO. 1933/KOL/2018 ASSEMBLE MARKETING PVT. LTD., AY 2013-14 ITA NO.1963/KOL/2018 APPEAR VINCOM PVT. LTD. AY: 2013-14 & ITA NO. 2496/KOL/2018 LONG VIEW TRADE & CREDIT PVT. LTD., AY. 2010-11 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1933/KOL/2018 ASSESSMENT YEAR: 2013-14 ASSEMBLE MARKETING PVT. LTD. (PAN: AAJCA2359N) 3, RATAN SARKAR GARDEN STREET, KOLKATA-700 007. VS. INCOME-TAX OFFICER, WD-9(1), KOLKATA. APPELLANT RESPONDENT & I.T.A. NO. 1963/KOL/2018 ASSESSMENT YEAR: 2013-14 APPEAR VINCOM PVT. LTD. (PAN: AAJCA2360H) 3, RATAN SARKAR GARDEN STREET, KOLKATA-700 007. VS. INCOME-TAX OFFICER, WD-9(1), KOLKATA. APPELLANT RESPONDENT & I.T.A. NO. 2496/KOL/2018 ASSESSMENT YEAR: 2010-11 LONG VIEW TRADE & CREDIT PRIVATE LTD. (PAN: AAACL8780D) 48, CANN9ING STREET, JANKI CENTER, 6 TH FLOOR, KOLKATA-700 001. VS. INCOME-TAX OFFICER, WD-6(2), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 25.04.2019 DATE OF PRONOUNCEMENT 01.07.2019 FOR THE APPELLANT SHRI MIRAJ D. SHAH, AR FOR THE RESPONDENT SHRI SHANKAR HALDER, JCIT, SR. DR ORDER 2 ITA NO. 1933/KOL/2018 ASSEMBLE MARKETING PVT. LTD., AY 2013-14 ITA NO.1963/KOL/2018 APPEAR VINCOM PVT. LTD. AY: 2013-14 & ITA NO. 2496/KOL/2018 LONG VIEW TRADE & CREDIT PVT. LTD., AY. 2010-11 PER SHRI A.T.VARKEY, JM ALL THESE APPEALS PREFERRED BY THE ASSESSEE ARE AGA INST THE SEPARATE ORDERS OF LD. CIT(A)-3 AND LD. CIT(A)-8, KOLKATA DATED 10.08.2018 , 16.08.2018 AND 20.09.2018 FOR AYS 2013-14 (FOR M/S. ASSEMBLE MARKETING PVT. LTD. AND M/S. APPEAR VINCOM PVT. LTD.) AND 2010-11 (FOR M/S. LONG VIEW TRADE & CREDIT PVT. LTD .) RESPECTIVELY. SINCE GROUNDS ARE MOSTLY IDENTICAL AND FACTS ARE COMMON, EXCEPT VARIA NCE IN AMOUNT, WE DISPOSE OF ALL THESE APPEALS BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE OUTSET ITSELF THE LD. COUNSEL FOR THE AS SESSEE DREW OUR ATTENTION TO THE FACT THAT THE ADDITIONS WERE MADE IN THE HANDS OF THE AS SESSEE BECAUSE ACCORDING TO AO, NONE APPEARED BEFORE THE AO PURSUANT TO NOTICE U/S. 131 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) SENT TO THE ASSESSEE AS WELL AS SHARE SUBSCRIBERS. ACCORDING TO LD. COUNSEL, IN ALL THE THREE APPEALS CITED ABOVE, THE NOTICES TO THE SHARE SUBSCRIBERS WERE FORWARDED WITHOUT KNOWLEDGE OF THE ASSESSEE. ACCORDING TO HIM, THE ADDRESS OF THE SHARE SUBSCRIBERS HAD CHANGED/THE DI RECTORS WERE OUT OF STATION WHICH PREVENTED THEM FROM APPEARING BEFORE THE AO. ACCOR DING TO LD. COUNSEL THE ASSESSEE DID NOT GET PROPER OPPORTUNITY BEFORE THE AO TO PROVE T HE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE CAPITAL COLLECTED ALONG WI TH THE PREMIUM. THEREFORE, CITING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC), THE LD. COUNSEL PLEADS THAT THE M ATTER TO BE REMANDED BACK TO THE AO FOR FRESH ADJUDICATION. THE CIT, DR OPPOSED THE RE MANDING OF THE PROCEEDINGS, HOWEVER, CONTENDED THAT EVEN IF THE TRIBUNAL REMANDS THE MAT TER BACK TO AO, THE LD. COUNSEL SHOULD UNDERTAKE TO PARTICIPATE IN THE PROCEEDINGS BEFORE THE AO. 3. HAVING HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, WE NOTE THAT THE AO HAS MULCT THE ADDITION OF THE ENTIRE SHARE CAPITAL AND PREMIUM IN THE HANDS OF THE RESPECTIVE ASSESSEE COMPANIES/APPELLANTS SINCE THE SHARE SUBSC RIBERS/DIRECTOR OF ASSESSEE COMPANIES 3 ITA NO. 1933/KOL/2018 ASSEMBLE MARKETING PVT. LTD., AY 2013-14 ITA NO.1963/KOL/2018 APPEAR VINCOM PVT. LTD. AY: 2013-14 & ITA NO. 2496/KOL/2018 LONG VIEW TRADE & CREDIT PVT. LTD., AY. 2010-11 DID NOT APPEAR BEFORE THE AO PURSUANT TO ISSUANCE O F NOTICE U/S. 131 OF THE ACT. ACCORDING TO LD. AR, THE TRANSACTION IN ISSUE HAPPENED IN AY 2013-14 I.E. IN THE YEAR 2013 SO THE NOTICES COULD NOT HAVE BEEN SERVED UPON THE SHARE S UBSCRIBERS FOR WANT OF CHANGE OF ADDRESS. ACCORDING TO LD. COUNSEL, THE DIRECTORS O F THE ASSESSEE COMPANY WERE OUT OF STATION AND, THEREFORE, COULD NOT PARTICIPATE IN TH E PROCEEDINGS BEFORE THE AO. GIVEN AN OPPORTUNITY THE ASSESSEE IS READY TO PARTICIPATE AN D PRODUCE ALL THE DOCUMENTS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION, THEREFORE, CITING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TIN BOX COM PANY (SUPRA), THE ASSESSEE PLEADS THAT THE MATTER MAY BE REMANDED BACK TO THE AO SINC E THERE WAS NO PROPER OPPORTUNITY TO DISCHARGE THE ONUS UPON THE ASSESSEE U/S. 68 OF THE ACT. WE NOTE THAT THE HONBLE SUPREME COURT IN TIN BOX COMPANY, SUPRA HAS HELD AS UNDER: IT IS UNNECESSARY TO GO INTO GREAT DETAIL IN THESE MATTERS FOR THERE IS A STATEMENT IN THE ORDER OF T HE TRIBUNAL, THE FACT-FINDING AUTHORITY, THAT READS TH US : WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUB MISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORTUNITY OF BEI NG HEARD. THAT THE ASSESSEE COULD HAVE PLACED EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL IS REALLY OF NO CONSEQUENCE FOR IT IS THE ASSESSMENT ORDER THAT COUNTS. THAT ORDER MUST BE MADE AFTER THE ASSESSEE HAS BEEN GIVEN A RE ASONABLE OPPORTUNITY OF SETTING OUT HIS CASE. WE, THEREFORE, DO NOT AGREE WITH THE TRIBUNAL AND THE HIGH COURT THAT IT WAS NOT NECESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSING AUTHORITY FOR FRESH ASSESSMENT AFTER GIVING TO THE ASSESSEE A PROPER OPPORTUNITY OF BEING HEARD. TWO QUESTIONS WERE PLACED BEFORE THE HIGH COURT, OF WHICH THE SECOND QUESTION IS NOT PRESSED. THE FIRST QUESTION READS THUS : 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN NOT SETTING ASIDE THE ASSESSMENT ORDER IN SPITE OF A FINDING ARRIVED AT BY IT THAT THE INCOME- TAX OFFICER HAD NOT GIVEN A PROPER OPPORTUNITY OF H EARING TO THE ASSESSEE ? IN OUR OPINION, THERE CAN ONLY BE ONE ANSWER TO THI S QUESTION WHICH IS INHERENT IN THE QUESTION ITSELF : IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSIONER (APPEALS) AND OF THE TRIBUNAL A RE ALSO SET ASIDE. THE MATTER SHALL NOW BE REMANDED TO THE ASSESSING AUTHORITY FOR FRESH CO NSIDERATION, AS AFORESTATED. 4 ITA NO. 1933/KOL/2018 ASSEMBLE MARKETING PVT. LTD., AY 2013-14 ITA NO.1963/KOL/2018 APPEAR VINCOM PVT. LTD. AY: 2013-14 & ITA NO. 2496/KOL/2018 LONG VIEW TRADE & CREDIT PVT. LTD., AY. 2010-11 4. SINCE WE NOTE THAT THE ASSESSEE COULD NOT GET PROPER OPPORTUNITY BEFORE THE AO IN THE INTEREST OF JUSTICE AND FAIR PLAY THE MATTER IS REMANDED BACK TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE TO LAW AFTER PROVIDING R EASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESSEE IS DIRECTED TO COOPER ATE AND PARTICIPATE IN THE PROCEEDINGS BEFORE THE AO WITHOUT FAIL. 5. IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 01.07.2019 SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 ST JULY, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT I) ASSEMBLE MARKETING PVT. LTD., II) AP PEAR VINCOM PVT. LTD. III) LONG VIEW TRADE & CREDIT PRIVATE LTD. 3, RATAN SARKAR GARDEN STREET, KOLKATA-700 007. 2 RESPONDENT ITO, WARD-9(1), KOLKATA. 3 4 5 CIT (A)- 3 & 8, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR