DCIT, Circle - 4, Kolkata, Kolkata V. M/s. Limtex Steels Ltd., Kolkata

ITA 321/KOL/2011

• Counselvise Citation: 32123514 RSA 2011
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2011
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 26-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 22-02-2011
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: J M THARD
• Section: 68; 133(6)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , , , , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 321/KOL/2011 %& '(/ ASSESSMENT YEAR : 2005-06 (*+ / APPELLANT ) D.C.I.T., CIRCLE-4, KOLKATA - % - - VERSUS - . (-.*+/ RESPONDENT ) M/S. LIMTEX STEELS. LTD., KOLKATA (PAN: AAACL 9421 H ) *+ / 0 '/ FOR THE APPELLANT: SHRI S.K.ROY -.*+ / 0 '/ FOR THE RESPONDENT: SHRI J.M.THARD '1 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 30.12.2010 OF THE CIT(A)-XIX, KOLKATA PERTAINING TO A.YR. 2005-06. 2. THE SOLE ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS AS UNDER :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD.CIT(A)-XIX, KOLKATA HAS ERRED IN LAW IN DIRECTING THE A.O. TO DELETE TH E ADDITION OF RS.25,00,000/- MADE BY THE A.O. U/S 68 UNDER THE HEAD INCOME FROM OTHER SOURCES SINCE THE AO HAS BEEN DEPRIVED OF VERIFYING THE NEW EVIDENCE UNDER RULE 46A AND THE LD. CIT(A) DID NOT CONSIDER THE PRINCIPLE OF NATURAL JU STICE WHILE GIVING HIS DECISION. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT WHILE DO ING THE SCRUTINY ASSESSMENT AO MADE AN ADDITION OF RS.25,00,000/- BY OBSERVING AS UNDER :- 2 THE ASSESSEE FILED LIST OF PERSONS FROM WHOM IT IS STATED THAT THE ASSESSEE COMPANY SECURED SHARE CAPITAL ON ISSUE OF ITS SHARE S. TO VERIFY THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF SUCH PERSONS FR OM WHOM THE ALLEGED SHARE APPLICATION MONEY WAS RECEIVED LETTER IN TERMS OF S ECTION 133(6) WAS ISSUED TO THOSE PARTIES AT ADDRESSED PROVIDED BY THE ASSESSEE COMPANY. IT IS FOUND THAT LETTERS DATED 29/11/2007 SENT TO THE PARTIES MENTIONED BELOW REMAINED UNANSWERED/UNRESPONDED TILL THIS DAT E. 1) DEBRIWAL INVESTMENT & FINANCE (P) LTD. RS.5,00, 000/- 2) APSARA TREX (P) LTD. RS.10,00,000/- 3) VISHAV DEALERS (P) LTD. RS.10,00,000/- TOTAL RS.25,00,000/- THEREFORE THE GENUINITY OF THE TRANSACTION AND CRED ITWORTHINESS AS WELL AS IDENTITY OF SUCH ALLEGED SHARE APPLICANTS REMAIN UN SUBSTANTIATED. THEREFORE AMOUNTS CREDITED IN THE BOOKS OF THE ASSESSEE COMPA NY IS CONSIDERED AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES INTRODUCED INTO THE ACCOUNTS IN THE GARB OF SHARE APPLICATION MONEY. 3.1. ON APPEAL LD. CIT(A) HAS DELETED THE SAME BY O BSERVING AS UNDER :- 4.2. I HAVE CONSIDERED THE SUBMISSION OF THE APPE LLANT AND PERUSED THE ASSESSMENT ORDER. I HAVE ALSO GONE THROUGH THE BALA NCE-SHEET OF THE APPELLANT- COMPANY AS ON 31/3/2004 AS WELL AS THE COPIES OF DO CUMENTS SUBMITTED BY THE THREE PARTIES TO THE A.O. WHICH WERE RECEIVED BY HI M AFTER COMPLETION OF THE ASSESSMENT. ON PERUSAL OF THE ASSESSMENT ORDER, IT IS APPARENT THAT THE A.O. HAS NOT ALLOWED ANY OPPORTUNITY THE APPELLANT SO THAT T HE APPELLANT COULD HAVE MADE EFFORTS TO SUBMIT THE NECESSARY DETAILS AND DO CUMENTS BEFORE THE A.O. WITHIN THE TIME. IT IS NOT THE CASE THAT THE LETTER S U/S 133(6) WERE ISSUED BY THE A.O., BUT THEY REMAINED UN-SERVED ON THE SHARE APPL ICANTS. ON PERUSAL OF DETAILS OF SHARE APPLICATION MONEY AS ON 31/3/04, I T IS OBSERVED THAT AL THE THREE COMPANIES IN WHOSE CASES THE A.O. HAS MADE ADDITION AGGREGATING TO RS.25 LAKH HAD SUBSCRIBED TO THE SHARES OF THE APPELLANT COMPANY IN F.Y. 2003-04 RELEVANT TO A.Y. 2004-05. IN THE CASE OF THESE COMP ANIES, THE SUBSCRIPTION WAS NOT RECEIVED BY THE APPELLANT IN THE YEAR UNDER APP EAL. HENCE, NO ADDITION CAN BE MADE IN THE YEAR UNDER CONSIDERATION. OTHERWISE ALSO, ON PERUSAL OF DOCUMENTS SUBMITTED BY THESE COMPANIES, IT IS OBSER VED THAT THE SHARES ALLOTTED TO THEM ARE DULY RECORDED IN THEIR FINANCIAL STATEM ENTS AND THAT ALL THE THREE COMPANIES HAD MADE PAYMENT OF SHARE APPLICATION MON EY BY CHEQUES. ON CAREFUL CONSIDERATION OF THE TOTALITY OF THE FACTS AND DOCUMENTS, I AM OF THE OPINION THAT THE A.O. WAS NOT JUSTIFIED IN MAKING T HE ADDITION OF RS.25 LAKH. HE IS DIRECTED TO DELETE THE SAME. THE GROUND NO.1 IS ALLOWED. 3.2. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEF ORE US. 4. AT THE TIME OF HEARING THE LD. DR APPEARING ON B EHALF OF THE REVENUE SUBMITTED THAT LD. CIT(A) WITHOUT OBTAINING THE REMAND REPORT FROM AO BASED ON THE MATERIALS 3 WHICH WERE RECEIVED BY AO SUBSEQUENT TO PASSING OF THE ASSESSMENT ORDER HAS TAKEN INTO CONSIDERATION AND DELETED THE ADDITION WHICH I S NOT IN ACCORDANCE WITH LAW. HE REQUESTED TO SET ASIDE THE ORDERS OF LD. CIT(A) AND REMAND THE MATTER TO THE FILE OF AO FOR FRESH CONSIDERATION. 5. ON THE OTHER HAND, THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE HAS RELIED ON ORDERS OF LD. CIT(A) AND FURTHER CONTENDED THAT LD. CIT(A) HAS ACTED ON THE MATERIALS AVAILABLE ON RECORD WITH AO. THEREFORE HE REQUESTED TO UPHELD THE ORDER OF LD. CIT(A). 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT IN THE FACTS OF THE PRESENT CASE LD. CIT(A) IS SUPPOSED TO OBTAIN THE REMAND REPORT FROM AO BEFORE DELETING THE ADDITION MADE BY AO. THEREFORE WE SET ASIDE THE ORD ERS OF LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF AO TO DECIDE THE SAME BASED O N THE DOCUMENTS FILED BEFORE AO SUBSEQUENT TO THE ASSESSMENT ORDER WHICH ARE HAVING BEARING ON THE ISSUE. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 16.09.2011. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , ,, , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 16.09.2011. R.G.(.P.S.) 4 '1 / -2 3'2'4- COPY OF THE ORDER FORWARDED TO: 1. M/S. LIMTEX STEELS LTD., THE LEGENCY, 2 ND FLOOR, 25A, SHAKESPEARE SARANI, KOLKATA-700017. 2 THE DCIT, CIRCLE-4, KOLKATA 3. THE CIT, 4. THE CIT(A)-XIX, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA .2 -/ TRUE COPY, '1%9/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES