ACIT, Cir.43, Kolkata V. M/.s Dulichand Champalal Textile, Kolkata

ITA 27/KOL/2021

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5416 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-05-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 03-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 143(3); 2(22)(e); 133(6); 250; 13; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH, KOLKATA (VIRTUAL COURT) (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI ABY T. VARKEY, JUDICIAL MEMBER) I.T.A. NO. 27/KOL/2021 ASSESSMENT YEAR: 2013-14 ACIT, CIRCLE-43, KOLKATA....................................................................................................APPELLANT VS. M/S. DULICHAND CHAMPALAL TEXTILE............................................................................RESPONDENT [PAN: AACFD 3681 J] APPEARANCES BY: SH. DHRUBAJYOTI ROY, JCIT, APPEARED ON BEHALF OF THE REVENUE. SH. SUNIL SURANA, FCA, APPEARED ON BEHALF OF THE ASSESSEE. DATE OF CONCLUDING THE HEARING : MAY 5 TH , 2021 DATE OF PRONOUNCING THE ORDER : MAY 13 TH , 2021 ORDER PER J. SUDHAKAR REDDY, AM : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-13, KOLKATA [HEREINAFTER THE CIT(A)], PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), DATED 24.09.2020 FOR THE ASSESSMENT YEAR 2013-14. 2. THERE IS A DELAY OF 52 DAYS IN FILING OF THE APPEAL. WE CONDONE THE DELAY AS THE ASSESSEE WAS PREVENTED FROM SUFFICIENT CAUSE FROM FILING OF THE APPEAL IN TIME. 3. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGED IN THE BUSINESS OF TRADING OF CLOTH AND MANUFACTURING OF COTTON PRINTED SAREES. IT FILED ITS RETURN OF INCOME FOR THE AY 2013-14 ON 30.09.2013 DECLARING TOTAL INCOME OF 81,87,050/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS FOR EXAMINING THE ISSUE OF UNSECURED LOANS, LARGE COMMISSION EXPENSES AND LOW NET PROFIT. THE AO COMPLETED ASSESSMENT U/S 143(3) OF THE ACT ON 11.03.2016 DETERMINING TOTAL INCOME AT 4,68,01,258/- INTER ALIA MAKING AN ADDITION U/S 68 OF THE ACT OF 3,49,49,302/- OF LOANS BEING UNEXPLAINED CASH CREDITS RECEIVED BY 2 I.T.A. NO. 27/KOL/2021 ASSESSMENT YEAR: 2013-14 M/S. DULICHAND CHAMPALAL TEXTILE. THE ASSESSEE AND U/S 2(22)(E) OF THE ACT OF 36,64,906/-. THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY CALLED FOR A REMAND REPORT FROM THE AO. THE AO IN HIS REMAND REPORT CONCLUDED THAT ALL THE NINETEEN LOANS FROM DIFFERENT LOAN CREDITORS WERE GIVEN TO THE ASSESSEE THROUGH BANKING CHANNELS AND THAT THEY WERE DULY CONFIRMED BY ALL THE LOAN CREDITORS. HE FURTHER STATED THAT FROM THE DOCUMENTS, ITRS, BALANCE SHEETS AND COPIES OF THE BANK PASS BOOKS, THE SOURCE FROM WHICH THE LOAN WAS GIVEN WERE FILED FROM WHICH THE CREDITWORTHINESS OF THE LOAN CREDITORS MAY BE ASCERTAINED. THE LD. CIT(A) CONSIDERED ALL THE DOCUMENTS FILED BY EACH OF THE LOAN CREDITORS AND AFTER DISCUSSING AT LENGTH, FROM PAGE 23 TO 49 OF HIS ORDER, DELETED THE ADDITIONS MADE U/S 68 OF THE ACT. HE ALSO DELETED THE ADDITIONS MADE U/S 2(22)(E) OF THE ACT BY APPLYING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF PRADIP KR. MALHOTRA VS. CIT (2011) 338 ITR 538 (CAL) , AS THE LOAN IN QUESTION CARRIED INTEREST @12% PER ANNUM. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. D/R RELIED ON THE ORDER OF THE AO AND ARGUED THAT THE LD. CIT(A) HAS NOT TAKEN A HOLISTIC VIEW OF THE MATTER AND HAS WRONGLY DELETED THE ADDITIONS MADE BY THE AO U/S 68 OF THE ACT. HE WANTED THE BENCH TO RECONSIDER THE EVIDENCES FILED BY THE ASSESSEE AND RE-ADJUDICATE THE ISSUE. ON THE ISSUE OF ADDITION MADE U/S 2(22)(E) OF THE ACT, HE RELIED ON THE ORDER OF THE AO. 5.1. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT(A). 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS. 7. THE AO IN HIS REMAND REPORT HAS NOT STATED ANYTHING ADVERSE. HE COULD NOT FIND FAULT WITH THE DOCUMENTS AND SUBMISSIONS OF THE ASSESSEE ON THE ISSUE OF ADDITION MADE U/S 68 OF THE ACT. THE ASSESSEE HAS FILED ALL THE DETAILS REQUIRED FROM THESE LOAN CREDITORS FOR PROVING THE IDENTITY AND CREDITWORTHINESS OF EACH OF THE LOAN CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. THE DOCUMENTS FILED ARE COPY OF LOAN CONFIRMATION LETTERS, COPY OF THE BANK PASS BOOKS EVIDENCING THE FACT THAT THE TRANSACTIONS ARE TAKEN PLACE THROUGH BANKING CHANNELS, COPY OF THE INCOME TAX RETURNS FILED BY EACH OF THE LOAN 3 I.T.A. NO. 27/KOL/2021 ASSESSMENT YEAR: 2013-14 M/S. DULICHAND CHAMPALAL TEXTILE. CREDITORS WHICH PROVES THAT THEY ARE ALL INCOME TAX ASSESSEES, ANNUAL ACCOUNTS INCLUDING BALANCE SHEET OF EACH OF THE LOAN CREDITORS. THE LD. CIT(A) HAS DISCUSSED EACH OF THE DOCUMENTS FILED BY THESE LOAN CREDITORS AT PARA 7.4 OF HIS ORDER FROM PAGE 23-48. HE HAS GIVEN FACTUAL FINDINGS ON EACH OF THESE CASH CREDITS. THE LD. D/R COULD NOT CONTROVERT ANY OF THESE FACTUAL FINDINGS. THE AO HAS ISSUED NOTICES U/S 133(6) OF THE ACT TO EACH OF THE LOAN CREDITORS AND ALL THESE NOTICES WERE COMPLIED WITH. IN VIEW OF THE ABOVE DISCUSSION, WE UPHOLD THE FACTUAL FINDINGS OF THE LD. CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. 7.1. COMING TO THE ADDITION MADE U/S 2(22)(E) OF THE ACT, THE FACT IS THAT THE LOAN/ADVANCE CARRIED AN INTEREST OF 12% PER ANNUM. ON THESE FACTS, THE LD. CIT(A) RELIED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF PRADIP KR. MALHOTRA (SUPRA) AS WELL AS THE DELHI HIGH COURT IN THE CASE OF CIT VS. CREATIVE DYEING & PRINTING (P.) LTD. REPORTED IN [2009] 318 ITR 476 (DELHI) AND DELETED THE ADDITION. WE FIND NO INFIRMITY IN THE SAME. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE 13 TH MAY, 2021. SD/- SD/- [ABY T. VARKEY] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13.05.2021 BIDHAN (P.S.) 4 I.T.A. NO. 27/KOL/2021 ASSESSMENT YEAR: 2013-14 M/S. DULICHAND CHAMPALAL TEXTILE. COPY OF THE ORDER FORWARDED TO: 1. ACIT, CIRCLE-43, KOLKATA. 2. M/S. DULICHAND CHAMPALAL TEXTILE, 2 ND FLOOR, BHUTORIA BHAWAN, 13, NOORMAL LOHIA LANE,BURRA BAZAR, KOLKATA-700 007. 3. CIT(A)-13, KOLKATA (SENT THROUGH MAIL) 4. CIT- 5. CIT(DR), KOLKATA BENCHES, KOLKATA. (SENT THROUGH MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES