Swasata Cement Ltd., Hooghly V. ACIT, Circle - 3, Burdwan

ITA 282/KOL/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7544 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 15-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 27-02-2009
• Court: TRIBUNAL
• Department Lawyers: A S MONDAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 131; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , ! . '# . ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SHR I C. D. RAO, AM] $ $ $ $ / I.T.A NO. 282/KOL/2009 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2005-06 SWASATA CEMENT LTD. VS. ASSISTANT COMMISSIONE R OF INCOME-TAX (PAN:AAICS 5911 M) CIRCLE-3, ASANSOL. (*+ /APPELLANT ) (,-*+/ RESPONDENT ) DATE OF HEARING: 09.01.2012 DATE OF PRONOUNCEMENT: 09.01.2012 FOR THE APPELLANT: SHRI SOMNATH GHOSH FOR THE RESPONDENT: SHRI A. S. MONDAL . / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), ASANSOL IN APPEAL NO.217/CIT(A)/ASL/CIRCLE-3/2007-08 DATED 22.12.2008 . ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-3, ASANSOL U/S. 143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DATED 26 .12.2007. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT OF SU BSCRIPTION OF SHARE CAPITAL OF RS.5 LACS AND UNSECURED LOAN OF RS.53,48,447/- BY HOLDING THAT TH E CREDIT ENTRIES ARE NOT PROVED AND HENCE ADDITION U/S. 68 WAS MADE. FOR THIS, THE ASSESSEE H AS RAISED FOLLOWING TWO GROUNDS: 1 FOR THAT THE LD. CIT(A), ASANSOL ERRED IN UPHOLD ING THE IMPUGNED ADDITION OF RS.58,48,447/- INVOKING THE PROVISION OF S. 68 OF T HE INCOME TAX ACT, 1961 IN THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE INCOME T AX ACT, 1961 BY THE LD. ACIT, CIRCLE- 3, ASANSOL WITHOUT TAKING INTO CONSIDERATION THE SE TTLED POSITION IN LAW AS LAID DOWN IN CIT VS. STELLER INVESTMENT LTD. (2001) 252 ITR 263 (SC) AND THE ALLEGED FINDING IN THE APPELLATE ORDER PASSED ON THAT BEHALF IS ARBITRARY, UNJUSTIFIED AND INCONSISTENT WITH THE SETTLED POSITION IN LAW. 2.FOR THAT THE LD. CIT(A), ASANSOL ACTED ILLEGALLY AND WITH MATERIAL IRREGULARITY IN UPHOLDING THE PURPORTED ADDITION ON ACCOUNT OF THE ALLEGED SUBSCRIPTION TOWARDS SHARE CAPITAL OF RS.5,00,000/- AND UNSECURED LOAN OF RS.5 3,48,447/- MADE BY THE LD. ACIT, CIRCLE-3, ASANSOL WITHOUT TAKING INTO ACCOUNT THE I MPECCABLE EVIDENCE ON THAT BEHALF AND THE ALLEGED FINDING OF SUSTAINING THE INFIRM ADDITI ON OF RS.58,48,447/- IS WHOLLY CAPRICIOUS, ERRONEOUS, UNWARRANTED AND PERVERSE. 2 ITA 282/K/2009 SWASATA CEMENT LTD.. A.Y.05-06 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. FIRST OF ALL, WE FIND THAT THE CIT(A) PASSED EX PAR TE ORDER AND NO PROPER OPPORTUNITY OF BEING HEARD WAS PROVIDED TO THE ASSESSEE. THE CIT(A DECID ED EX PARTE BY GIVING FOLLOWING FINDING: THE ONLY GROUND OF APPEAL IS AGAINST THE UNEXPLAIN ED CASH CREDIT OF RS.58,48,447/- DISALLOWED BY A.O. U/S. 68 VIDE THIS OFFICE LETTER NO. CIT(A)/ASL./FIXATION/2008-09/773 DATED 25.11.2008, THE APPELLANT WAS CONVEYED THE OP PORTUNITIES ALLOWED BY THIS OFFICE FROM TIME TO TIME AND IN INTEREST OF NATURAL JUSTICE ONE MORE AND FINAL OPPORTUNITY WAS ALLOWED BY THE UNDERSIGNED TO THE APPELLANT FOR COMPLIANCE ON 01.12.2008 POSITIVELY. NOT ONLY THIS, BUT THE COPY OF THE SAME LETTER WAS ALSO SERVED ON SRI N. K. AGARWALA, FCA AND A/R OF THE APPELLANT. IT IS REGRET TO BRING ON RECORD NEITHER APPELLANT NOR A/R ATTENDED ON THE HEARING DATE I.E. 01.12.2008 NOR DID THEY SEND ANY SUBMISS ION IN THIS REGARD. IN THESE FACTS AND CIRCUMSTANCES, I LEFT WITH NO ALTERNATIVE BUT TO DE CIDE THE APPEAL ON THE BASIS OF MATERIAL MADE AVAILABLE BY THE APPELLANT BEFORE ME, WHICH AR E STATEMENT OF FACTS AND GROUNDS OF APPEAL. FURTHER, WE FIND THAT THE ASSESSEE RECEIVED SHARE A PPLICATION MONEY OF RS. 5 LACS AND UNSECURED LOAN OF RS.83,10,200/-. ON QUERY FROM ASSESSING OF FICER, ASSESSEE SUPPLIED LIST OF SEVEN PERSONS FROM WHOM SHARE CAPITAL IN CASH IN AGGREGA TE OF RS.5 LACS WAS RECEIVED AND BALANCE FROM 25 PERSONS UNSECURED LOAN OF RS.83,10,200/- WA S RECEIVED. SUBSEQUENTLY, ASSESSEE SUPPLIED ANOTHER LIST ALONG WITH NAMES AND ADDRESSE S OF SIXTY PERSONS FROM WHOM IT HAS RECEIVED THE UNSECURED LOAN OF RS.83,10,200/-. WHE N ASSESSING OFFICER QUERIED, ASSESSEE REPLIED THAT ACTUALLY HE HAS RECEIVED UNSECURED LOA N FROM SIXTY PERSONS BUT DUE TO INADVERTENCE WHICH HAS WRONGLY OR UNDER MISTAKEN NOTION SUPPLIED THE LIST OF TWENTY SIX PERSONS. THE ASSESSING OFFICER ISSUED SUMMONS TO 17 PERSONS OUT OF WHICH 11 PERSONS APPEARED AND THEIR STATEMENTS WERE RECORDED ON 12.10.2007. HOWEVER, S IX PERSONS THOUGH SERVED NOTICE U/S. 131 OF THE ACT DID NOT RESPOND. ALL 11 PERSONS HAD ADM ITTED GIVEN UNSECURED LOANS. THE ASSESSING OFFICER ACCEPTED THE LOANS RECEIVED THROUGH BANKING CHANNEL BUT MADE ADDITION OF THE BALANCE RECEIVED IN CASH FROM THESE 50 PERSONS AT RS.53,48, 447/-. THE ASSESSING OFFICER ALSO MADE ADDITION OF SHARE SUBSCRIPTION OF RS.5 LACS. THE A SSESSEE PRODUCED COMPLETE NAMES AND ADDRESSES OF UNSECURED LOANS BUT DUE TO SHORTAGE OF TIME, AS ASSESSMENT WAS GETTING TIME BARRED, ASSESSING OFFICER COULD NOT REQUISITION CRE DITORS BY ISSUING SUMMONS U/S. 131 OF THE ACT. EVEN THE CIT(A) HAS NOT PROVIDED OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDED THE ISSUE OF UNSECURED LOANS AND SUBSCRIPTION TO SH ARE CAPITAL BY PASSING EX PARTE ORDER. 4. WE, IN THE INTEREST OF JUSTICE AFTER GOING THROU GH THE FACTS AND CIRCUMSTANCES OF THE CASE, ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE ALLOWED REASONABLE OPPORTUNITY OF BEING HEARD. ASSESSEE IS ALSO DIRECTED TO PRODUCE NECESSARY EVID ENCE TO SUBSTANTIATE SHARE CAPITAL AND ALSO UNSECURED LOANS BY PROVING THE IDENTITY, GENUINENES S OF TRANSACTION AND CREDITWORTHINESS OR/ 3 ITA 282/K/2009 SWASATA CEMENT LTD.. A.Y.05-06 SOURCES OF TRANSACTION. THE ASSESSING OFFICER WILL DECIDE AS PER LAW. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE FILE OF ASSESSING OFFICER. APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- . '# '#'# '# . ! , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( #! #! #! #!) )) ) DATED : 9TH JANUARY, 2012 /0 %12 3 JD.(SR.P.S.) . 4 ,5 6 5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT SWASATA CEMENT LTD., C/O SHRI SOMNATH G HOSH, ADVOCATE, SEVEN BROTHERS LODGE, P.O. BUROSHIBTAA, P. S. CHINSURAH, DIST. HOOGHLY, PIN 712 105. 2 ,-*+ / RESPONDENT, ACIT, CIRCLE-3, ASANSOL 3 . .% ( )/ THE CIT(A), ASANSOL 4. .% / CIT, ASANSOL 5 . >? ,% / DR, KOLKATA BENCHES, KOLKATA -5 ,/ TRUE COPY, .%@/ BY ORDER, 2 /ASSTT. REGISTRAR .