M/s Prime Dealcomm Pvt. Ltd., Kolkata V. CIT, KOLKATA-II, Kolkata

ITA 353/KOL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6389 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUP CHATTERJEE CIT LD
• Section: 68; 56; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH, KOLKATA BEFORE : SHRI J. SUDHAKAR REDDY, ACCOUNTAN T MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 353/KOL/2015 A.Y 2008-09 M/S. PRIME DEALCOMM VS. C.I.T, KOLKATA-II PVT. LTD. PAN: AAECP 5048G [APPELLANT ] [RESPONDENT ] APPELLANT BY : SHRI SUJOY SEN, SHR I S. JHAJHARIA, FCA, LD.ARS. RESPONDENT BY : SHRI ARUP CHATTERJEE, ADDL. CIT, LD. SR.DR DATE OF HEARING : 08-03-2018 DATE OF PRONOUNCEMENT : 18-05-2018 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DT. 25-03- 2014 OF THE CIT, KOLKATA, II, KOLKATA FOR THE A.Y 2 008-09. 2. AT THE OUTSET, IT IS NOTICED THAT THE ABOVE APPE AL WAS FILED BY THE ASSESSEE WITH A DELAY OF THREE (03) DAYS. AFT ER HEARING BOTH THE PARTIES AND PERUSING THE PETITION TO CONDONE THE DE LAY, WE FIND THE REASONS THEREIN ARE BONA FIDE AND THE DELAY IS COND ONED. 3. BEFORE US THE LD.AR SUBMITS THAT THE ASSESSEE H AS FILED ADDITIONAL GROUNDS OF APPEAL AND PRAYED TO ADMIT TH E SAME AND TO ADJUDICATE THE SAME AS PRELIMINARY ISSUE. THE ADD ITIONAL GROUNDS READ AS UNDER:- 1. FOR THAT ON THE FACTS AND ON THE CIRCUMSTANCES O F THE CASE THE CIT HAD GROSSLY ERRED IN NOT UNDERSTANDING THAT THE AMENDED PROVISIONS TO SECTION 68, WHICH WAS INSERTED IN THE STATUTE, BY THE FINANCE ACT, 2012, WAS OPER ATIVE ON AND FROM 1.4.2013 AND ACCORDINGLY, THE AMENDED PROVISIONS OF SUCH SECTION 68 COULD NOT BE INVOKED ASSESSMENT YEAR UNDER APPEAL THAT IS ASSESSMENT YEA R 2008-09, IN ORDER TO TAX THE AMOUNT OF SHARE CAPITAL AND SHARE PREMIUM ISSUED / ALLOTTED DURING THE RELEVANT PREVIOUS YEAR, IN THE HANDS OF THE APPELLANT COMPAN Y. 2. FOR THAT ON THE FACTS AND ON THE CIRCUMSTANCES O F THE CASE THE CIT HAD GROSSLY ERRED IN NOT UNDERSTANDING THAT WHEN THE AMENDED PROVISIO NS TO SECTION 56 AND 68, WHICH WERE INSERTED IN THE STATUTE, BY THE FINANCE ACT, 2 012, WAS OPERATIVE ON AND FROM ITA NO. 353/KOL/2015 M/S.PRIME DEALCOMM P.LTD 2 1.4.2013 AND HAD PROSPECTIVE OPERATIONS, THE EXERCI SE RENDERED BY THE CIT IN THE ORDER UNDER APPEAL BECOMES REDUNDANT AND HENCE IT IS PRAY ED THE ORDER PASSED UNDER SECTION 68 OF THE ACT MAY KINDLY BE QUASHED / CANCE LLED. 4. THE LD.AR FURTHER SUBMITS THAT THE CIT U/S. 263 OF THE ACT DIRECTED THE AO TO EXAMINE THE GENUINENESS OF SOURC E OF CAPITAL, CHANGE OF DIRECTORSHIP AND SOURCE OF REALIZATION FR OM LIQUIDATION OF ASSETS SHOWN IN THE BALANCE SHEET IN TERMS OF AMEN DED PROVISIONS U/SEC. 68 OF THE ACT AND TO PASS A SPEAKING ORDER B Y PROVIDING SUFFICIENT OPPORTUNITY TO ASSESSEE. HE SUBMITS THAT THE AMENDED PROVISIONS OF SECTION 68 OF THE ACT CANNOT BE MADE APPLICABLE TO THE A.Y UNDER CONSIDERATION AS THE AMENDMENTS OF SAID S ECTION CAME INTO FORCE BY THE FINANCE ACT, 2012, W.E.F 1-4-2012 AND PRAYED TO REMAND THE MATTER TO THE FILE OF CIT IN TERMS OF ADDITIO NAL GROUNDS OF APPEAL AS RAISED BY THE ASSESSEE BEFORE US. 5. THE LD. DR SUBMITS THAT THERE WAS NO REPRESENTAT IVE ON BEHALF OF ASSESSEE BEFORE THE CIT TO PROSECUTE ITS CASE UN DER 263 PROCEEDINGS. HE DID NOT OBJECT TO SUCH PROPOSITION OF THE LD.AR IN REMANDING THE MATTER TO THE FILE OF CIT FOR HIS FRE SH ADJUDICATION. 6. HEARD BOTH THE PARTIES, PERUSED THE RECORD AND T HE MATERIAL AS AVAILABLE BEFORE ON US. WE FIND FORCE IN THE SUBMIS SIONS OF THE LD.AR THAT THE AMENDMENT TO PROVISION OF SECTION 68 OF TH E ACT IN QUESTION WAS INSERTED THROUGH THE FINANCE ACT, 2012, WHICH CAME INTO FORCE W.E.F. 1-4-2012. ADMITTEDLY, THE IMPUGNED ORDER OF THE CIT WAS PASSED U/S. 263 OF THE ACT RELATING TO A.Y 2008-09. WE FIND THAT THE CIT UNDER 263 PROCEEDINGS BY INVOKING THE AMENDED P ROVISIONS OF SECTION 68 OF THE ACT DIRECTED THE AO TO EXAMINE TH E GENUINENESS OF SOURCE OF CAPITAL, CHANGE OF DIRECTORSHIP AND SOURC E OF REALIZATION FROM LIQUIDATION OF ASSETS AS SHOWN IN THE BALANCE SHEET AND TO PASS A SPEAKING ORDER BY PROVIDING SUFFICIENT OPPORTUNITY TO ASSESSEE. THE CONTENTION OF LD. AR BEFORE US IS THAT THE AMENDED PROVISIONS OF SECTION 68 OF THE ACT CANNOT BE MADE APPLICABLE TO THE A.Y UNDER CONSIDERATION AS THE AMENDMENTS OF SAID SECTION CAM E INTO FORCE BY ITA NO. 353/KOL/2015 M/S.PRIME DEALCOMM P.LTD 3 THE FINANCE ACT, 2012, W.E.F 1-4-2012. WE FURTHER F IND THAT THERE WAS NO REPRESENTATION ON BEHALF OF ASSESSEE BEFORE THE CIT UNDER 263 PROCEEDINGS. THEREFORE, TAKING INTO CONSIDERATION T HE FACTS AND CIRCUMSTANCES OF THE CASE, ISSUES INVOLVED IN THE A PPEAL, SUBMISSIONS OF THE LD. AR AND IN THE INTEREST OF NATURAL JUSTIC E, WE DEEM IT FIT AND PROPER TO REMAND THE MATTER TO THE FILE OF CIT TO CONSIDER THE SAME AND TO PASS A FRESH ORDER AS PER LAW, AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF HEARING TO ASSESSEE. GROUND S RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 18-05-2018 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18-05-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPLICANT/ASSESSEE: M/S. PRIME DEALCOMM PVT. LTD C/O SALARPURIA JAJODIA & CO.7, C.R AVENUE, KOLKATA- 72. 2 RESPONDENT/ DEPARTMENT : THE C.I.T, KOLKATA-II, AAY KAR BHAVAN, 7 TH FLOOR, P-7 CHOWRINGHEE SQUARE, KOLKATA-700 069. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA /TRUE COPY, BY ORDER SR.P.S, HEAD OF OFFICE ITAT KOLKATA