M/s. Aditi Sanchar Suvidha Pvt. Ltd., , Kolkata V. ITO, Ward - 3(3), Kolkata , Kolkata

ITA 439/KOL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9510 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 14-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BAIJNATH SINGH CIT D R RESPON
• Keywords: Unexplained investment
• Section: 143(1); 69; 132; 2

Judgement Text

ITA NO. 439/KOL/2018 A.Y. 2005-2006 M/S. ADITI SANCHAR SUVIDHA PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) I.T.A. NO. 439/KOL/2018 ASSESSMENT YEAR: 2005-2006 M/S. ADITI SANCHAR SUVIDHA PVT. LIMITED,........... ......................APPELLANT 27, BRABOURNE ROAD, ROOM NO. 401, 4 TH FLOOR, KOLKATA-700 001 [PAN: AACCA 2081 N] -VS.- INCOME TAX OFFICER,................................ ....................................RESPONDENT WARD-3(3), KOLKATA, AAYAKAR BHAWAN, 3 RD FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, FOR THE APPELLANT SHRI BAIJNATH SINGH, ADDL. CIT, D.R. , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : DECEMBER 17, 2018 DATE OF PRONOUNCING THE ORDER : DECEMBER 19, 2018 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLKATA DAT ED 05.02.2018 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS.10,00,000/- MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF UNDISCLOSED INCOME. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF TRADING IN SHARES AND SECURITIES AN D GIVING OF LOANS AND ADVANCES. THE RETURN OF INCOME FOR THE YEAR UNDER C ONSIDERATION WAS FILED BY IT ON 25.10.2005 DECLARING TOTAL INCOME OF RS.8, 840/-. THE SAID RETURN WAS INITIALLY PROCESSED BY THE ASSESSING OFFICER UN DER SECTION 143(1) OF THE ACT ON 23.08.2006. THEREAFTER A SEARCH AND SEIZ URE ACTION UNDER ITA NO. 439/KOL/2018 A.Y. 2005-2006 M/S. ADITI SANCHAR SUVIDHA PVT. LIMITED 2 SECTION 132 WAS CONDUCTED ON 06.08.2008 IN THE CASE OF M/S. SGM REAL ESTATE PRIVATE LIMITED BELONGING TO SHAKUN GROUP OF COMPANIES. DURING THE COURSE OF SAID SEARCH, A STATEMENT OF SHRI BALL AV DAS MAHESWARI, DIRECTOR OF M/S. SGM REAL ESTATE PRIVATE LIMITED WA S RECORDED WHEREIN HE ADMITTED THAT HIS COMPANY HAD MADE A PAYMENT IN CASH TO THE COMPANIES BASED IN KOLKATA IN LIEU OF SHARE APPLICA TION MONEY INTRODUCED. SINCE THE ASSESSEE-COMPANY WAS ONE OF S UCH COMPANIES, WHO HAD ALLEGEDLY GIVEN ACCOMMODATION ENTRY IN THE FORM OF SHARE APPLICATION MONEY OF RS.10,00,000/- AND HAD FAILED TO DECLARE T HE CASH OF RS.10,00,000/.- RECEIVED AGAINST SHARE APPLICATION MONEY AS ITS INCOME, THE ASSESSING OFFICER MADE AN ADDITION OF RS.10,00, 000/- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF SUCH UNDISCLOS ED INCOME IN THE ASSESSMENT COMPLETED UNDER SECTION 144/147 VIDE AN ORDER DATED 28.03.2013. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 144/147 OF THE ACT, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) DISPUTING THE ADDITION OF RS.10,00 ,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNDISCLOSED INCOME AND SINCE THE SUBMISSIONS MADE BY THE ASSESSEE IN SUPPORT OF ITS CASE ON THIS ISSUE WERE NOT FOUND ACCEPTABLE BY THE LD. CIT(APPEALS), HE PROCEEDED TO CONFIRM THE ADDITION OF RS.10,00,000/- MADE BY THE ASSESSING OFFICER FOR THE FOLLOWING REASONS GIVEN ON PAGE NOS. 3 & 4 OF H IS IMPUGNED ORDER:- I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHORIZE D REPRESENTATIVE OF THE APPELLANT AS WELL AS THE ASSE SSMENT ORDER FRAMED IN THE LIGHT OF THE MATERIALS AVAILABL E ON RECORD BEFORE THE ASSESSING OFFICER DURING THE ASSE SSMENT PROCEEDINGS. I FIND THAT A SEARCH & SEIZURE OPERATION U/S.132 OF THE I.T. ACT, 1961 WAS CONDUCTED ON 06.08.2008 IN THE CASE O F M/S. SGM REAL ESTATE (P) LTD. BELONGING TO SHAKUN GROUP OF COMPANIES. IT IS INFORMED BY THE DEPUTY COMMISSIONE R OF INCOME TAX, CENTRAL CIRCLE-3, JAIPUR THAT DURING TH E COURSE OF SEARCH STATEMENT OF SHRI BALLAV DAS MAHESWARI, D IRECTOR OF M/S.SGM REAL ESTATE (P) LTD. ADMITTED THAT EXPEN SES WERE, INFLATED IN THE RETURN OF INCOME AND THE SURP LUS GENERATED WAS USED FOR PAYMENT IN CASH TO COMPANIES BASED AT KOLKATA IN LIEU OF SHARE APPLICATION MONEY INTRO DUCED IN ITA NO. 439/KOL/2018 A.Y. 2005-2006 M/S. ADITI SANCHAR SUVIDHA PVT. LIMITED 3 THE ABOVE NAMED COMPANY OF THE GROUP. THE ASSESSEE COMPANY PROVIDED ACCOMMODATION ENTRY BY ISSUE OF CH EQUE FOR SHARE APPLICATION MONEY AND. RECEIVED CASH OF EQUIVALENT SUM. THE ASSESSEE COMPANY APPLIED FOR 10 000 SHARES OF M/S.SGM REAL ESTATE (P) LTD. FOR RS.10,00 ,OOO/- AND 10000 SHARES WERE ALLOTTED ON 31.03.2005. AS PE R INFORMATION RECEIVED ASSESSEE COMPANY RECEIVED CASH OF RS.10,00,000/- IN LIEU OF CHEQUE ISSUED FOR SHARE APPLICATION MONEY. IT WAS UNDISCLOSED RECEIPT OF RS.10,00,000/- IN THE FINANCIAL YEAR 2004-05 RELEVA NT TO THE ASSESSMENT YEAR 2005-06. DURING THE COURSE OF ASSES SMENT PROCEEDINGS COPY OF THE STATEMENT OF SRI BALLAV DAS MAHESWARI AND COPY OF PAGE-18 OF ANNEXURE A-1 SEIZE D FROM BUSINESS PREMISE OF SRI BALLAV DAS MAHESWARI A T D-28, SUHAS MARG, C SCHEME, JAIPUR WERE HANDED OVER TO TH E AUTHORIZED REPRESENTATIVE OF THE ASSESSEE COMPANY F OR REBUTTAL/EXPLANATION. NAME OF M/S. ADITI SANCHAR SU VIDHA (P) LTD. APPEARS IN PAGE-18 OF THE SEIZED DOCUMENT HAVING IDENTIFICATION MARK A-2. THE ASSESSEE COMPANY APPLI ED FOR 10000 SHARES OF M/S. SGM REAL ESTATE (P) LTD FOR RS.10,00,000/- AND 10000 SHARES WERE ALLOTTED ON 31.03.2005. AS PER PAGE NO.12 & 13 OF THE SEIZED DO CUMENT HAVING IDENTIFICATION MARK A-3 COPY OF BANK STATEME NT OF THE ASSESSEE COMPANY WITH RESPECT TO ACCOUNT-NO.CD 4263 OF PUNJAB NATIONAL BANK, M.G. ROAD BRANCH, KOLKATA WAS FOUND IN THE PREMISE OF M/S.SGM REAL ESTATE (P) LTD . WHICH WAS SEIZED DURING THE COURSE OF SEARCH & SEIZURE OP ERATION. THAT THE INFORMATION WAS SPECIFIC AND REFERRED TO TRANSACTION ENTERED INTO BY THE ASSESSEE. THAT MAIN TENANCE OF TRADE LICENSE AND FILLING OF IT RETURNS DOES NOT ADD ANY CREDIBILITY AND DOES NOT PROVE THAT THE TRANSACTION S ARE GENUINE. THAT THERE IS MATERIAL THAT CONTRADICTS AS SESSEE COMPANY'S CLAIM THAT THE DEPARTMENT HAS NOT FOUND A NY INCRIMINATING EVIDENCE SUGGESTING THAT SOME UNACCOU NTED INCOME HAS BEEN PASSED ON TO THIS ASSESSEE, AGAINST WHICH THIS SHARE APPLICATION MONEY WAS GIVEN. IN THE CONT RARY IT ESTABLISHES LINK BETWEEN THE ASSESSEE COMPANY AND S ELF- CONFESSED ACCOMMODATION ENTRY TAKER. THAT THERE IS MATERIAL SHOWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE-MEDITATED PLAN CONCEIVED AND EXECUTED. THAT THERE EXISTS MATERIAL TO IMPLICATE T HE ASSESSEE IN A COLLUSIVE ARRANGEMENT WITH THE COMPAN Y WHO IS SELF-CONFESSED ACCOMMODATION ENTRY TAKER. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COU NSEL FOR THE ASSESSEE ITA NO. 439/KOL/2018 A.Y. 2005-2006 M/S. ADITI SANCHAR SUVIDHA PVT. LIMITED 4 HAS FIRSTLY RELIED ON THE DECISION OF DIVISION BENC H OF THIS TRIBUNAL IN THE CASE OF VASUPUJYA ENTERPRISES PVT. LIMITED VS.- IN COME TAX OFFICER (ITA NO. 1881/KOL/2016 DATED 12.05.2017) TO CONTEND THAT THE SAID DECISION RENDERED BY THE TRIBUNAL ON THE SIMILAR ISSUE AND I NVOLVING IDENTICAL FACTS IS SQUARELY APPLICABLE IN THE PRESENT CASE. A PERUSAL OF THE ORDER PASSED BY THE TRIBUNAL IN THE SAID CASE SHOWS THAT THE ADDITION IN THE SAID CASE WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT O F UNDISCLOSED INVESTMENT UNDER SECTION 69 AND AFTER HAVING FOUND THAT THE CONDITIONS STIPULATED FOR INVOKING SECTION 69 WERE NOT SATISFI ED BY THE ASSESSING OFFICER IN THE SAID CASE, THE ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED BY THE TRIBUNAL. THE FACTS INVOLVED IN THE PRESENT CASE, HOWEVER, ARE DIFFERENT, INASMUCH AS, THE IMPUGNED ADDITION H AS BEEN MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME REPRESENTING CASH OF RS.10,00,000/- RECEIVED BY THE ASSESSEE FOR ALLEGED LY GIVING THE ACCOMMODATION ENTRY IN THE FORM OF SHARE APPLICATIO N MONEY. IT IS THUS NOT A CASE OF AN ADDITION UNDER SECTION 69 ON ACCOU NT OF UNEXPLAINED INVESTMENT AND THE DECISION OF THIS TRIBUNAL IN THE CASE OF VASUPUJYA ENTERPRISES PVT. LIMITED (SUPRA) CITED BY THE LD. C OUNSEL FOR THE ASSESSEE IS NOT APPLICABLE. 5. THE OTHER CONTENTION RAISED BY THE LD. COUNSEL F OR THE ASSESSEE IS THAT THE IMPUGNED ADDITION ON ACCOUNT OF UNDISCLOSE D INCOME ALLEGEDLY REPRESENTING CASH RECEIVED BY THE ASSESSEE FOR GIVI NG ACCOMMODATION ENTRY IN THE FORM OF SHARE APPLICATION MONEY HAS BE EN MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) MAINLY BY RELYING ON THE STATEMENT OF SHRI BALLAV DAS MAHESWARI, DIRE CTOR OF M/S. SGM REAL ESTATE PRIVATE LIMITED WITHOUT GIVING ANY OPPORTUNI TY TO THE ASSESSEE TO CROSS EXAMINE THE SAID DEPONENT. HE HAS CONTENDED T HAT THE MATTER SHOULD, THEREFORE, BE SENT BACK TO THE ASSESSING OF FICER FOR GIVING SUCH OPPORTUNITY TO THE ASSESSEE. SINCE THE LD. D.R. HAS ALSO NOT RAISED ANY OBJECTION IN THIS REGARD, I SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THE ISSUE UNDER CONSIDERATION AND R ESTORE THE MATTER TO ITA NO. 439/KOL/2018 A.Y. 2005-2006 M/S. ADITI SANCHAR SUVIDHA PVT. LIMITED 5 THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER GIVING THE ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE SHRI B ALLAV DAS MAHESWARI, DIRECTOR OF M/S. SGM REAL ESTATE PRIVATE LIMITED. 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/- (P.M. JAGTAP) VICE-PRESIDENT (K Z) KOLKATA, THE 19 TH DAY OF DECEMBER, 2018 COPIES TO : (1) M/S. ADITI SANCHAR SUVIDHA PVT. LIMITED, N.K. GOYAL, 16, NETAJI SUNHAS ROAD, 2 ND FLOOR, KOLKATA-700 001 (2) INCOME TAX OFFICER, WARD-3(3), KOLKATA, AAYAKAR BHAWAN, 3 RD FLOOR P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-2, 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.