M/s. Akshayakalpa Farms and Foods Pvt Ltd, Tiptur V. Assistant Commissioner of Income Tax Circle-1 , Tumkur

ITA 2714/BANG/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2104 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-06-2021
• Assessment Year: misc
• Appeal Filed On: 14-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL D SURANA
• Keywords: Unexplained cash credit; Principle of natural justice; Corroborative evidences
• Section: 234B; 143(1); 143(2); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER IT A NO . 27 14/BANG/2 017 ASSESSMENT YEAR : 2014 - 15 M/S. AKSHAYAKALPA FARMS AND FOODS PVT. LTD., NO.382/2, SHARDA NAGAR, TIPTUR 572 201. PAN: AAICA 4264B VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, TUMKUR. APPELLANT RESPONDENT APPELLANT BY : S HRI SUNIL D. SUR ANA, CA RESPONDENT BY : SHRI PRIYADARSHI MISHRA, ADDL. C IT(DR)(ITA T ), BENGALURU. DATE OF HEARING : 2 3. 0 6 .2021 DATE OF PRONOUNCEMENT : 23 .0 6 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(APPEALS)-7, BENGALURU DATED 24.11.2017. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT (APPEALS) HAS ERRED IN PASSING THE ORDER AS PASSED BY HIM. THE ORDER PASSED IS BAD IN LAW, A ND AGAINST THE PRINCIPLES OF NATURAL JUSTICE IS REQUIRED TO BE QUA SHED IN TOTO. 2. THE LEARNED CIT (APPEALS) HAS ERRED IN ADDING A SUM OF RS. 3,57,143/- TO THE INCOME OF THE APPELLANT U/S 6 8 OF THE I.T. ACT, SUCH ADDITIONS IS AGAINST THE AVAILABLE DOCUME NTARY EVIDENCE. ITA NO.2714/BANG/2017 PAGE 2 OF 4 3. THE LEARNED CIT (APPEALS) HAS ERRED IN NOT APPRE CIATING THE FACT THAT A SUBSCRIPTION OF SHARE AMOUNTING TO RS. 3,57,143/- FROM A TAX PAYER IS GENUINE. 4. THE APPELLANT DENIES LIABILITY TO PAY INTEREST. THE INTEREST BEING LEVIED ERRONEOUSLY IS TO BE DELETED. 5. IN VIEW OF THE ABOVE AND ON OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE IM PUGNED ORDER BE QUASHED OR ATLEAST THE ADDITION MADE TO INCOME BE D ELETED AND INTEREST LEVIED BE DELETED. 3. THE APPELLANT, A COMPANY, FILED THE RETURN OF IN COME ON 28/11/2014 DECLARING NIL INCOME AND CURRENT YEAR LOSS OF RS. 8 3,06,772/-. THE COMPANY IS ENGAGED IN BUSINESS OF PRODUCTION OF ORG ANIC MILK AND MILK PRODUCTS. THE INCOME CONSISTS OF INCOME FROM BUSINE SS. 4. THE RETURN AS FILED WAS PROCESSED U/S. 143(1) OF I.T. ACT, 1961. THEREAFTER, THE CASE WAS SELECTED UNDER CASS AND NO TICE U/S 143(2) DATED 28-08-2015 WAS ISSUED AND SERVED. 5. DURING THE YEAR THE COMPANY ISSUED 1000 COMPULSO RILY CONVERTIBLE PREFERENCE SHARES (`CCPS') HAVING FACE VALUE OF RS. 14,240/- EACH AT A PREMIUM OF RS. 10,760/-. DURING THE YEAR THE CCPS W ERE PARTLY PAID WITH FACE VALUE OF RS. 5,696/- EACH AT A PREMIUM OF RS. 4,304/-. THE AMOUNT RECEIVED ON ACCOUNT OF CCPS AND SECURITIES PREMIUM HAVE BEEN RECEIVED THROUGH NORMAL BANKING CHANNEL AND PERSONS ARE ASSE SSED TO TAX AND HAVING VALID PERMANENT ACCOUNT NUMBER [PAN]. DURIN G THE ASSESSMENT PROCEEDINGS, THE APPELLANT SUBMITTED COMPLETE POSTA L ADDRESS OF THE INVESTORS FROM WHOM THE SECURITIES PREMIUM AMOUNT W AS RECEIVED. 6. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT B Y TREATING SUBSCRIPTION AMOUNT OF RS. 3,57,143/- TOWARDS 35 CC PS FROM MR. ASHIRWAD AGARWAL AS UNEXPLAINED CREDITS UNDER SECTION 68 OF INCOME TAX ACT, 1961. THE SUBSCRIPTION FOR RS,3,57,143/- WAS MADE BY MR.A SHIRWAD AGARWAL, WHO ITA NO.2714/BANG/2017 PAGE 3 OF 4 IS ASSESSED TO TAX UNDER PAN : AAQPA0712P. TAX U/S 115BBE AND INTEREST U/S 234B ARE CALCULATED ACCORDINGLY AND A DEMAND OF RS 1,46,790/- HAS BEEN RAISED. 7. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS). THE CIT(A) CONFIRMED THE ADDITION OBSERVING THAT TH E ASSESSEE HAS NOT PROVIDED ANY SUPPORTING EVIDENCE TO THE SATISFACTIO N OF AO THAT THE TRANSACTION WAS GENUINE ONE. AGAINST THIS, THE ASS ESSEE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE LD. AR SUBMITTED THAT BEFORE THE LOWER AUTHORIT IES, THE ASSESSEE COULD NOT PRODUCE SUPPORTING DOCUMENTS TO SUBSTANTIATE TH E CAPACITY OF ASHIRWAD AGARWAL TO INVEST IN ASSESSEE COMPANY. NOW IT IS S UBMITTED THAT THE ASSESSEE IS HAVING SUPPORTING DOCUMENT TO SUBSTANTI ATE THE SAME AND PLEADED FOR AN OPPORTUNITY TO PRODUCE THE SAME BEFO RE THE AO. WE AGREE WITH THIS CONTENTION OF THE LD. AR AND ACCORDINGLY THE ISSUE IN DISPUTE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION, AFTER GIVING OPPORTUNITY TO THE ASSESSEE AND VERIFI CATION OF DOCUMENTS TO BE PRODUCED BEFORE HIM. 9. IN THE RESULT, THE ASSESSEE IS ALLOWED FOR STATI STICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF JUNE, 2021. SD/- SD/- ( BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEM BER BANGALORE, DATED, THE 23 RD JUNE, 2021. / DESAI S MURTHY / ITA NO.2714/BANG/2017 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.