M/s. Aristro Fircorp Pvt. Ltd..[Formerly Sanjiban Barter P. Ltd.,], Kolkata V. DCIT, Circle - 7(1), Kolkata , Kolkata

ITA 289/KOL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9521 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 19-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI
• Assessee Lawyers: S K TULSIYAN
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 142(1); 131; 68; 263

Judgement Text

ITA NO. 289/KOL/2018 A.Y. 2009-2010 M/S. ARISTRO FINCORP PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 289/KOL/2018 ASSESSMENT YEAR: 2009-2010 M/S. ARISTRO FINCORP PVT. LIMITED,................. .............................APPELLANT 209, A.J.C. BOSE ROAD, KARNANI ESTATE, 1 ST FLOOR, KOLKATA-700 017 [PAN: AAECS 0680 H] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. .......................RESPONDENT CIRCLE-7(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI S.K. TULSIYAN, ADVOCATE, FOR THE APPELLANT SHRI P.K. SRIHARI, CIT, D.R. , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : DECEMBER 11, 2018 DATE OF PRONOUNCING THE ORDER : DECEMBER 19, 2018 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, KOLKATA DAT ED 01.12.2017 PASSED EX-PARTE DISMISSING THE APPEAL OF THE ASSESS EE. 2. THE ASSESSEE IN THE PRESENT CASE IS A NON-BANKIN G FINANCE COMPANY, WHICH FILED ITS RETURN OF INCOME FOR THE Y EAR UNDER CONSIDERATION ON 30.09.2009 DECLARING TOTAL INCOME OF RS.1,30,274/-. IN ITA NO. 289/KOL/2018 A.Y. 2009-2010 M/S. ARISTRO FINCORP PVT. LIMITED 2 THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 1 47/143(3) VIDE AN ORDER DATED 29.04.2011, THE TOTAL INCOME OF THE ASS ESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.1,85,270/-. THE SAID ASSESSMENT WAS SUBSEQUENTLY SET ASIDE BY THE CONCERNED LD. CIT VID E HIS ORDER PASSED UNDER SECTION 263 WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE THE ASSESSMENT AFRESH AFTER CONDUCTING A DETAILED AND A DEQUATE ENQUIRY ON THE ISSUE OF SHARE CAPITAL AND SHARE PREMIUM OF RS. 97,38,000/- AND RS.47,71,62,000/- RESPECTIVELY RECEIVED DURING THE YEAR UNDER CONSIDERATION. IN PURSUANCE OF THE ORDER OF LD. CIT PASSED UNDER SECTION 263, A NOTICE UNDER SECTION 142(1) WAS ISSUED BY TH E ASSESSING OFFICER, IN RESPONSE TO WHICH THE RELEVANT DETAILS AND DOCUMENT S REQUIRED BY THE ASSESSING OFFICER WERE FURNISHED BY THE ASSESSEE. O NE DEPARTMENTAL INSPECTOR WAS ALSO DEPUTED BY THE ASSESSING OFFICER TO MAKE VERIFICATION AT THE ADDRESS OF 29 SHAREHOLDERS AVAILABLE ON ROC SITE. THE INSPECTOR, HOWEVER, REPORTED THAT NEITHER THE SAID SHAREHOLDER COMPANIES NOR THEIR DIRECTORS WERE TRACEABLE AT THE ADDRESS AVAILABLE O N RECORD. THE ASSESSING OFFICER, THEREFORE, ISSUED A SUMMONS UNDE R SECTION 131 TO THE PRINCIPAL OFFICER OF THE ASSESSEE-COMPANY ASKING HI M TO PRODUCE ALL THE SHARE ALLOTEES FOR VERIFICATION. THE SAID SUMMONS, HOWEVER, WAS ONLY PARTIALLY COMPLIED WITH BY THE ASSESSEE. THE ASSESS ING OFFICER, THEREFORE, HELD THAT THE ONUS THAT LAY ON THE ASSESSEE TO EXPL AIN RELEVANT CASH CREDITS REPRESENTING SHARE CAPITAL AND SHARE PREMIU M RECEIVED DURING THE YEAR UNDER CONSIDERATION WAS NOT SATISFACTORILY DIS CHARGED BY THE ASSESSEE. KEEPING IN VIEW THE SAME AS WELL AS BY RE LYING ON THE VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS.- CIT [214 IT R 801 (SC)] AND CIT VS.- DURGA PRASAD MORE [82 ITR 540 (SC)], THE ASSES SING OFFICER TREATED THE ENTIRE AMOUNT OF SHARE CAPITAL AND SHARE PREMIU M AGGREGATING TO RS.48.69 CRORES AS UNEXPLAINED CASH CREDIT AND MADE ADDITION TO THAT EXTENT TO THE TOTAL INCOME OF THE ASSESSEE UNDER SE CTION 68 IN THE ASSESSMENT COMPLETED UNDER SECTION 147/143(3)/263 O F THE ACT VIDE AN ORDER DATED 31.03.2015. ITA NO. 289/KOL/2018 A.Y. 2009-2010 M/S. ARISTRO FINCORP PVT. LIMITED 3 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3)/147/263 OF THE ACT, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND SINCE THERE WAS NO SATISFACTORY COMPLIANCE ON THE PART OF THE ASSESSEE TO THE NOTIC ES ISSUED BY HIM FIXING THE SAID APPEAL FOR HEARING FROM TIME TO TIME, THE LD. CIT(APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE VIDE HIS APPEL LATE ORDER DATED 01.12.2017 PASSED EX-PARTE THEREBY CONFIRMING THE A DDITION OF RS.48.69 CRORES MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COU NSEL FOR THE ASSESSEE HAS RAISED A PRELIMINARY ISSUE THAT THE LD. CIT(APP EALS) HAS NOT GIVEN PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DISPOSING OF THE APPEAL OF THE ASSESSEE VIDE HIS IM PUGNED ORDER PASSED EX-PARTE. AS POINTED OUT BY HIM FROM THE RELEVANT P ORTION OF THE IMPUGNED ORDER, THE FIRST NOTICE OF HEARING SENT BY THE LD. CIT(APPEALS) TO THE ASSESSEE WAS RETURNED BY THE POSTAL AUTHORITIES UN-SERVED WITH THE REMARK THAT THE ASSESSEE-COMPANY HAD LEFT THAT ADDR ESS. HE HAS CONTENDED THAT THE LD. CIT(APPEALS), HOWEVER, SERVE D THE NOTICE OF THE SUBSEQUENT HEARING AT THE SAME OLD ADDRESS BY AFFIX TURE AND SINCE THE SAID NOTICES WERE NEVER RECEIVED BY THE ASSESSEE, N ONE APPEARED BEFORE THE LD. CIT(APPEALS) ON BEHALF OF THE ASSESSEE. HE HAS ALSO CONTENDED THAT EVEN THE ASSESSMENT ORDER UNDER SECTION 143(3)/147/ 263 WAS PASSED BY THE ASSESSING OFFICER WITHOUT COMPLYING WITH THE DI RECTIONS SPECIFICALLY GIVEN BY THE LD. CIT IN THE ORDER DATED 26.03.2014 PASSED UNDER SECTION 263. HE HAS ALSO PLACED ON RECORD A COPY OF THE SAI D ORDER PASSED BY THE LD. CIT UNDER SECTION 263 AND PERUSAL OF THE SAME S HOWS THAT THE LD. CIT HAD SET ASIDE THE ASSESSMENT ORIGINALLY PASSED BY T HE ASSESSING OFFICER ITA NO. 289/KOL/2018 A.Y. 2009-2010 M/S. ARISTRO FINCORP PVT. LIMITED 4 UNDER SECTION 143(3)/147 OF THE ACT AND DIRECTED TH E ASSESSING OFFICER TO MAKE THE ASSESSMENT AFRESH AS PER THE FOLLOWING DIR ECTIONS:- (I) THE ASSESSING OFFICER SHOULD PASS THE ASSESSMEN T ORDER AFTER CONDUCTING INDEPENDENT DETAILED AND COMPLETE ENQUIRIES INTO THE SUBSCRIPTION TO THE SHARE CAPITAL AND SHAR E PREMIUM INTRODUCED IN THE ASSESSEES CASE. (II) THE ASSESSING OFFICER SHOULD TRACE THE SOURCE OF SHARE CAPITAL BY ENQUIRING INTO THE VARIOUS LAYERS THROUG H WHICH THE MONEY WAS INTRODUCED IN THE COMPANY AS SHARE CAPITA L AND ALSO EXAMINE THE DIRECTORS OF THE SUBSCRIBER COMPAN IES BY ISSUING SUMMONS UNDER SECTION 131 OF THE ACT. (III) THE ASSESSING OFFICER SHOULD SEND INFORMATION TO THE ASSESSING OFFICERS HAVING JURISDICTION OVER THE SUB SCRIBER COMPANY TO THE SHARE CAPITAL REGARDING ITS INVESTME NT INTO SHARE CAPITAL AND SHARE PREMIUM. (IV) THE ASSESSING OFFICER SHOULD CONDUCT INDEPENDE NT ENQUIRIES TO VERIFY THE DOCUMENTS FILED BEFORE HIM IN RESPECT OF PROOF OF SUBSCRIPTION TO SHARE CAPITAL. (V) THE ASSESSING OFFICER SHOULD NOT CONFINE HIMSEL F TO CONDUCT ENQUIRIES INTO THE SUBSCRIBERS TO THE SHARE CAPITAL ONLY ON SELECTIVE BASIS. (VI) THE ASSESSING OFFICER SHOULD ALSO CALL UPON TH E ASSESSEE TO IDENTIFY THE PERSONS WHO WERE SHOWN AS DIRECTORS OF THE ASSESSEE-COMPANY AND EXAMINE THEM ON OATH TO VERIFY THEIR CREDENTIAL AS DIRECTORS. ITA NO. 289/KOL/2018 A.Y. 2009-2010 M/S. ARISTRO FINCORP PVT. LIMITED 5 (VII) THE ASSESSING OFFICER SHOULD PASS SPEAKING OR DER AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE AN D VERIFYING THE SOURCE OF SHARE CAPITAL INCLUDING THE SHARE PREMIUM OF ALL THE SUBSCRIBERS AND ROTATION OF MONE Y THROUGH VARIOUS HANDS SO AS TO ASCERTAIN THE TRUE NATURE OF TRANSACTION, WHICH WILL BRING TO THE FORE, THE REAL ITY OF THE TRANSACTIONS. 5. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE , ALL THESE DIRECTIONS GIVEN BY THE LD. CIT SPECIFICALLY IN HIS ORDER PASSED UNDER SECTION 263, HOWEVER, WERE NOT COMPLIED BY THE ASSE SSING OFFICER WHILE MAKING THE ASSESSMENT AFRESH AND THIS POSITION CLEA RLY EVIDENT FROM THE RECORD INCLUDING THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS NOT DISPUTED EVEN BY THE LD. D.R. AS FURTHER SUBMIT TED BY THE LD. COUNSEL FOR THE ASSESSEE, EVEN THE COPY OF THE INSPECTORS REPORT SUBMITTED TO THE ASSESSING OFFICER ON THE BASIS OF ENQUIRY CONDUCTED BY HIM WAS NOT MADE AVAILABLE BY THE ASSESSING OFFICER TO THE ASSESSEE. HE HAS CONTENDED THAT THIS MATTER, THEREFORE, SHOULD GO BACK TO THE ASSES SING OFFICER FOR DECIDING THE SAME AFRESH BY FOLLOWING THE SPECIFIC DIRECTIONS GIVEN BY THE LD. CIT IN HIS ORDER PASSED UNDER SECTION 263. THE LD. CIT (D.R.) HAS NOT RAISED ANY MATERIAL OBJECTION FOR SENDING THE MATTE R BACK TO THE ASSESSING OFFICER. HE, HOWEVER, HAS SUBMITTED THAT THE ASSESSEE SHOULD BE DIRECTED TO COOPERATE WITH THE ASSESSING OFFICER AN D COMPLY WITH ALL THE REQUIREMENTS OF THE ASSESSING OFFICER SO AS TO ENAB LE HIM TO COMPLETE THE ASSESSMENT AFRESH BY FOLLOWING THE DIRECTIONS GIVEN BY THE LD. CIT UNDER SECTION 263. KEEPING IN VIEW ALL THESE SUBMISSIONS MADE BY THE LD. REPRESENTATIVES OF BOTH THE SIDES, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) EX-PARTE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRE SH AS PER THE SPECIFIC DIRECTIONS GIVEN BY THE LD. CIT IN HIS ORDER DATED 26.03.2014 PASSED UNDER SECTION 263. AS UNDERTAKEN BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING, THE ASSESSEE SHALL EXTEND FULL COOPERATION TO THE ITA NO. 289/KOL/2018 A.Y. 2009-2010 M/S. ARISTRO FINCORP PVT. LIMITED 6 ASSESSING OFFICER SO AS TO ENABLE HIM DECIDE THE IS SUE AS PER THE SPECIFIC DIRECTIONS GIVEN BY THE LD. CIT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 19, 2018. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 19 TH DAY OF DECEMBER, 2018 COPIES TO : (1) M/S. ARISTRO FINCORP PVT. LIMITED, 209, A.J.C. BOSE ROAD, KARNANI ESTATE, 1 ST FLOOR, KOLKATA-700 017 (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-7(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-3, KOLKATA , (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.