M/s. Quest Financial Services Ltd., Kolkata V. ACIT, Central Circle - 3(1), Kolkata , Kolkata

ITA 2565/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6295 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 28-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHY SHYAM
• Assessee Lawyers: N P JAIN; R K NAHAR
• Keywords: Unexplained cash credit; Bogus Share capital
• Section: 143(3); 68; 6

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.2565/KOL/2017 ASSESSMENT YEARS:2012-13 M/S QUEST FINANCIAL SERVICES LTD., 2 ND FLOOR, ROOM NO. 230, CENTRE POINT, 21, HEMANTA BASU SARANI, KOLKATA-001 [ PAN NO.AAACQ 0461 C ] / V/S . ACIT, CENTRAL CIRCLE-3(1), AAYKAR BHAWAN POORVA, 4 TH FLOOR, 110, SHANTI PALLY, KOLKATA-107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI N.P. JAIN, ADVOCATE & SHRI R.K. NAHAR, ADVOCATE /BY RESPONDENT SHRI RADHY SHYAM, CIT-DR /DATE OF HEARING 18-02-2019 /DATE OF PRONOUNCEMENT 03-05-2019 /O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-10, KOLKATAS ORDER DATED 30.10.2017 PASSED IN CASE NO.706/CIT(A)-10/WD.4(4)/12-13/17-18/KOL, I NVOLVING PROCEEDINGS 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE RAISED IN THE INSTANT APPEAL CHALLENGES CORRECTNESS OF BOTH THE LOWER AUTHORITIE S ACTION TREATING ITS SHARE CAPITAL / ITA NO.2565/KOL/2017 A.Y 2012-13 M/S QUEST FINANCIAL SERVICES LTD. VS ACIT, CC-3(1), KOL. PAGE 2 PREMIUM OF 123,331,65,000/- AS UNEXPLAINED CASH CREDITS U/S. 6 8 OF THE ACT. IT TRANSPIRES AT THE OUTSET THAT THE CIT(A) HAS PASSED HIS LOWER APPELLATE ORDER EX PARTE WHILST AFFIRMATION THE IMPUGNED ADDITION. WE NOTICE FROM PARA-3 PAGE 6 OF THE LOWER APPELLATE ORDER THAT IT WAS THE CIT(A)-2, KOLKATA H AD TAKEN UP THE ASSESSEES LOWER APPEAL FOR HEARING ON TWO OCCASIONS WHICH STOOD ADJ OURNED AT THE TAXPAYERS PETITION. THE CASE WAS THEREAFTER TRANSFERRED TO CIT(A)-10 KO LKATA. HE ISSUED NOTICE OF HEARING ON 26.01.2017. NOBODY APPEARED AT ASSESSEES BEHEST . THIS IS WHAT MADE CIT(A)S TO CONFIRM THE IMPUGNED UNEXPLAINED SHARE CAPITAL / PR EMIUM ADDITION IN ISSUE. 3. LEARNED COUNSEL VEHEMENTLY CONTENDS DURING THE C OURSE OF HEARING THAT THE ASSESSEE HAD FILED ITS VOLUMINOUS EVIDENCE IN SUPPO RT OF IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE IMPUGNED SUMS DURING THE CO URSE OF ASSESSMENT AS WELL AS IN THE LOWER APPELLATE PROCEEDINGS. COUPLED WITH THIS , IT IS STATED TO BE A CASE INVOLVING SHARE CAPITAL SEQUEL TO THE HON'BLE JURISDICTIONAL HIGH COURTS ORDER DATED 22.09.2011 APPROVING THE SCHEME OF MERGER FORMING PART CASE RE CORDS BEFORE US. MR. JAIN ACCORDINGLY PLEADS THAT BOTH THE ASSESSING OFFICER AS WELL AS CIT(A) HAVE ERRED IN LAW AS WELL AS ON FACTS IN TREATING THE SAID AMOUNT IN ISSUE AS UNEXPLAINED CASH CREDITS U/S68 OF THE ACT. COMING TO CIT(A)S FINDINGS, THE ASSESSEES CASE IS THAT LATTER CIT(A) (SUPRA) HAD NOWHERE GOT ACTUAL SERVICE OF NO TICE ON THE ASSESSEE AND PASSED HIS LOWER APPELLATE ORDER EX PARTE WITHOUT REVERTING TO ALL THE CLINCHING FACTS AS PE R DETAILED EVIDENCE FORMING PART OF RECORD. 4. THE REVENUE ON THE OTHER HAND STRONGLY SUPPORTS THE IMPUGNED ADDITION MADE IN BOTH THE LOWER PROCEEDINGS. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO R IVAL CONTENTIONS. THE REVENUE FIRST OF ALL FAILS TO DISPUTE THE CLINCHING FACT TH AT LATTER CIT(A) (SUPRA) COULD NOT SERVE THE RELEVANT HEARING NOTICE ON THE ASSESSEE BEFORE PASSING HIS IMPUGNED ORDER. THERE IS NO ADJUDICATION IN EITHER OF THE TWO LOWER PROCE EDINGS ABOUT THE SOLE ISSUE RAISED IN THE INSTANT CASE THE SEC.68 OF THE ACT DOES NOT AP PLY ITS AMALGAMATION SCHEME APPROVED BY HON'BLE JURISDICTIONAL HIGH COURTS ORD ER INCREASING ASSESSEES CAPITAL TO ITA NO.2565/KOL/2017 A.Y 2012-13 M/S QUEST FINANCIAL SERVICES LTD. VS ACIT, CC-3(1), KOL. PAGE 3 123,31,65,000/-IN CASE OF M/S REWARDS AGENCIES LTD. AS THE NECESSARY SEQUEL. WE CONCLUDE IN THESE PECULIAR FACTS THAT THE ASSESSING OFFICER NEEDS TO VERIFY ALL THESE CRUCIAL FACTS AND RE-ADJUDICATED UPON THE ENTIRE IS SUE AFRESH AS PER LAW AFTER AFFORDING ADEQUATE OPPORTUNITIES OF HEARING TO THE TAXPAYER. WE ORDER ACCORDINGLY. WE MAKE IT CLEAR THAT ASSESSEE SHALL BE ENTITLED TO FILE ALL T HE RELEVANT DETAILS IN CONSEQUENTIAL ORDER PROCEEDINGS AS WELL. 6. THIS ASSESSEES APPEAL IS ALLOWED FOR STATISTICA L PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN OPEN COURT ON 03/05/2019 SD/- SD/- ( &) (( &) (J.SUDHAKAR REDDY) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP-SR.PS ) - 03/05/2019 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S QUEST FINANCIAL SERVICES LTD., 2 ND FL, ROOM NO.230, CENTRE POINT, 21, HEMANTA BASU SARANI, KOLKATA-700001 2. /RESPONDENT-ACIT, C-C-3(1) AAYKAR BHAWAN POORVA, 4 TH FLOOR, SHANTI PALLY, KOLKA TA-107 3. , - / CONCERNED CIT 4. - - / CIT (A) 5. . ((, , , /DR, ITAT, KOLKATA 6. 2 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ ,,