DCIT 4(2)(2), MUMBAI V. MERCHANT AGRI INDIA P. LTD NOW MERCHANT AGRI GLOBAL P. LTD , MUMBAI

ITA 2646/MUM/2017

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9504 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JOTHILAKSHMI NAYAR
• Section: 143(3); 68; 148

Judgement Text

ITA NO . 2646/MUM/2017 C . O NO. 245/MUM/2018 ASSESSMENT YEAR: 2009 - 10 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAID BENCH, MUMBAI [CORAM: PRAMOD KUMAR (VICE PRESIDENT) AND RAVISH SOOD (JUDICIAL MEMBER) ITA NO. 2646/MUM/2017 ASSESSMENT YEAR: 2009 - 10 DEPUTY COMMISSIONER OF INCOME TAX 4(2)(2) RESPONDENT MUMBAI VS M/S. MERCHANT AGRI INDIA PVT. LTD. APPELLANT NOW MERCHANT AGRI GLOBAL P. LTD., 74, KRISHNA NIWAS, 496, KALBADEVI ROAD, KALBADEVI, MUMBAI 400002 [PAN:AAJCS5633B] CO NO. 245/MUM/2018 ITA NO. 2646/MUM/2017 ASSESSMENT YEAR: 2009 - 10 M/S. MERCHANT AGRI INDIA PVT. LTD. APPELLANT NOW MERCHANT AGRI GLOBAL P. LTD., KALBADEVI ROAD, KALBADEVI, MUMBAI 400002 [PAN:AAJCS5633B] VS DEPUTY COMMISSIONER OF INCOME TAX 4(2)(2) RESPONDENT MUMBAI APPEARANCES BY JOTHILAKSHMI NAYAR FOR THE RESPONDENT HIRO RAI FOR THE APPELLANT DATE OF CONCLUDING THE HEARING: OCTOBER 15 TH , 2019 DATE O F PRONOUNCEMENT : DECEMBER 2 6 TH , 2019 ITA NO . 2646/MUM/2017 C . O NO. 245/MUM/2018 ASSESSMENT YEAR: 2009 - 10 PAGE 2 OF 5 ORDER PER PRAMOD KUMAR, VP: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTION OF LEARNED CIT(A)S ORDER DATED 09.12.2016, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2009 - 10. 2. GRIEVANCES RAISED BY THE APPELLANT ASSESSING OFFICER ARE AS FOLLOWS: - 1. 'ON THE FAC TS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE ON ACCOUNT OF SHARE PREMIUM RECEIVED MERELY BECAUSE THE AO HAS QUOTED THE WRONG SECTION FOR ADDITION AND ALSO ESTABLISHED THE NON GENUINENESS OF THE TRANSACTIONS AND NON - CREDITWORTHINESS OF THE PARTIES.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C1T(A) HAS ERRED BY NOT FOLLOWING THE SETTLED PRINCIPLE OF LAW (STATE OF KARNATAKA VS KRISHNAJI SRINIVAS KULKARNI, 16TH DECE MBER 1993,1994 SSC(2) 558JT 1993 SUPL., 35) AT MERE WRONG QUOTING OF SECTION DOES NOT INVALIDATE THE ADDITIONS.' 3. TO ADJUDICATE ON THESE GRIEVANCES, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. IT IS A CASE OF REOPENED ASSESSMENT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER BROUGHT TO TAX AN AMOUNT OF RS. 4,50,00,000/ - UNDER SECTION 28(IV) OF THE INCOME TAX ACT 1961. WHEN MATTER TRAVELLED IN APPEAL BEFORE THE CIT(A), LEARNED CIT(A) DELETED THE SAID ADDITION BY OBSERVING, INT ER ALIA, AS FOLLOWS: - ITA NO . 2646/MUM/2017 C . O NO. 245/MUM/2018 ASSESSMENT YEAR: 2009 - 10 PAGE 3 OF 5 5.1.11 THE PRIMARY QUESTION BEING ANSWERED THE ADDITION U/S. 28(IV) HAS NO LEGS TO STAND UPON. HOWEVER, IN CONTEXT OF THE SECONDARY QUESTION, IT IS TO BE NOTED THAT THE APPELLANT HAD DULY SUBMITTED DETAILS OF COMPANIES TO WHOM SHARES WERE ALLOTTED AT A PREMIUM ALONG WITH COPIES OF FORM 2, RETURN OF ALLOTMENT FILED WITH ROC AND COMPANY MASTER DETAILS FROM WEBSITE OF MIN. OF CORPORATE AFFAIRS/ROC, WHICH INCLUDES REGISTRATION NOS., ADDRESSES, DT. OF INCORPORATION ETC. LOOKING AT AL L THE INFORMATION AVAILABLE IN THE AUDITED ACCOUNTS OF THE APPELLANT AND FILED BEFORE THE ROC, THE GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED. IN ANY CASE, THE ASSESSING OFFICER WAS NOT EXAMINING THE SHARE PREMIUM AMOUNT U/S. 68 BUT U/S. 28(IV), THER EFORE, THE QUESTIONS OF GENUINENESS DOES NOT ARISE. MOREOVER, AS SEEN, THE ORIGINAL RECEIPT DID NOT PERTAIN TO THE INSTANT FINANCIAL YEAR, THEREFORE, ITS GENUINENESS CANNOT BE EXAMINED IN THE CURRENT YEAR. 4 . THE ASSESSING OFFICER IS AGGRIEVED OF THE RELIEF SO GIVEN BY THE CIT(A) ONLY ON THE SHORT GROUND THAT THE ASSESSING OFFICER QUOTED THE WRONG SECTION. 5 . WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL IN RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL P OSITION. 6 . AS A PLAIN READING OF THE EXTRACTS FROM LEARNED CIT(A)S ORDER, AS REPRODUCED ABOVE, WOULD SHOW, LEARNED CIT(A) HAS NOT ONLY HELD THAT NO SUCH ADDITIONS COULD HAVE BEEN MADE UNDER SECTION 28(IV), BUT HE HAS ALSO HELD THAT THE RECEIPT IN QUES TION DID NOT PERTAIN TO THE RELEVANT PREVIOUS YEAR, AND, FOR THIS REASON, ITS GENUINENESS CANNOT BE EXAMINED IN THE CURRENT YEAR. THESE FINDING AND CONCLUSIONS OF THE CIT(A) REMAIN UNCONTROVERTED AND HAVE NOT BEEN CHALLENGED BY THE APPELLANT. IN THIS VIEW OF THE MATTER, THE GRIEVANCE OF THE APPELLANT IS RENDERED ACADEMIC. IN ANY CASE, LEARNED CIT(A), HAS GIVEN FINDINGS ABOUT GENUINENESS OF THE TRANSACTIONS AS ITA NO . 2646/MUM/2017 C . O NO. 245/MUM/2018 ASSESSMENT YEAR: 2009 - 10 PAGE 4 OF 5 WELL , WHICH ALSO REMAIN UNCONTROVERTED. GIVEN THE ABOVE BACKDROP, W HETHER THE SECTION IN WHICH IMPUGNED ADDITION IS MADE WAS RIGHT OR WRONG IS WHOLLY IMMATERIAL IF THE AMOUNT CANNOT BE TAXED AT ALL IN THIS ASSESSMENT YEAR AND THAT FINDING OF THE CIT(A), AS NOTED EARLIER AS WELL, HAS NOT BEEN CHALLENGED BEFORE US. GRIEVANCE RAISE D BY THE APPELLANT I S THUS DISMISSED AS INFRUCTUOUS. 7. IN THE PRESENT, APPEAL IS DISMISSED. CO NO. 245/MUM/2018 8. BY WAY OF THIS CROSS OBJECTION, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTION OF LEARNED CIT(A)S ORDER DATED 09.12.2016, IN THE MATTER OF ASSESSMENT UND ER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2009 - 10. 9. GRIEVANCES RAISED BY THE CROSS OBJECTION ARE AS FOLLOWS: - 1.(A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT NOTICE ISSUED UNDER SECTION 148 OF THE ACT IS WITHOUT JURISDICTION AND CONTRARY TO THE PROVISIONS OF SECTION 147 AND SECTION 148 OF THE ACT. (B) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FURTHER ERRED IN NOT APPRECIATING THAT ORDER MADE UNDER SECTION 143(3) RWS 147 OF THE ACT IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF THE ACT IN AS MUCH AS REASONS RECORDED BEFORE ISSUING NOTICE UNDER SECTION 148 OF THE ACT HAS NOT BEEN PROVIDED TO THE RESPONDENT COMPANY IN SPITE OF SPECIFIC REQUEST WAS MADE BY HIM. 2 . THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ADJUDICATING GROUND NUMBER 3 AND 4 AND ADDITIONAL GROUNDS OF APPEAL FILED VIDE LETTER DATED 01ST NOVEMBER, 2016. ITA NO . 2646/MUM/2017 C . O NO. 245/MUM/2018 ASSESSMENT YEAR: 2009 - 10 PAGE 5 OF 5 10. WHEN THIS C.O CAME UP FOR HEARING, LEARNED COUNSEL FOR THE ASSESSEE FAIRLY SUBMITTED THAT IN THE EVENT OF APPEAL OF THE ASSESSING OFFICER BEING DISMISSED, HE WOULD NOT WISH TO PURSUE THE GRIEVANCES RAISED IN THE CROSS OBJECTION. AS WE HAVE DISMISSED THE APPEAL FILED BY THE ASSESSING OFFICER, THEREFORE, THE GRIEVANCES RAISED IN THIS APPEAL ARE NOT REQUIRED TO BE DEAL WITH. 11. IN THE RESULT, CROSS OBJECTION IS DISMISSED FOR WANT OF PROSECUTION. TO SUM UP T HE APPEAL OF THE REVENUE AND CO FILED BY THE ASSESSEE ARE DISMISSED IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON THE 2 6 TH DAY OF DECEMBER, 2019 SD / - SD/ - RAVISH SOOD PRAMOD KUMAR ( JUDICIAL MEMBER) (VICE PRESIDENT) MUMBAI, DATED THE 2 6 TH OF DECEMBER, 2019 NISHANT VERMA SR.PS COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI