ITO, Ward-14(1), Kolkata V. M/s Om Sharda Logistics Pvt. Ltd., Kolkata

ITA 511/KOL/2020

AI Insights

The case involves the Income Tax Department (appellant) challenging the order of the CIT(A) which quashed the reassessment of M/s Om Sharda Logistics Pvt. Ltd. (respondent) for the assessment year 2011-12. The reassessment was initiated by the Assessing Officer based on information that the respondent received a sum of Rs.17,00,000 from a shell company, which allegedly escaped assessment. The CIT(A) found that this issue was already examined during the original assessment and that the reassessment was a change of opinion, not supported by new evidence. Additionally, the CIT(A) ruled the reassessment as time-barred. The tribunal, referencing decisions from the Bombay High Court and the Supreme Court, agreed with the CIT(A) and dismissed the appeal by the revenue.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128328 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 30-09-2020
• Other Referred Cases: Marico Ltd. vs. ACIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Difference of opinion; Change of opinion; Set aside
• Section: 147; 148; 143(3); 250

Judgement Text

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘सी’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Įी संजय गग[, ÛयाǓयक सदèय एवं Įी मनीष बोरड, लेखा सदèय के सम¢ Before Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member I.T.A No.511/Kol/2020 Assessment year: 2011-12 ITO, Ward-14(1), Kolkata .............................................................Appellant vs. M/s Om Sharda Logistics Pvt. Ltd...............................................Respondent Room No.28, Gopisharan Building, Dunlop Gurudwara, Kolkata-700108. [PAN: AAACO9194J] Appearances by: Shri Kapil Mondal, Addl. CIT-DR, appeared on behalf of the appellant. Shri Akshay Ringasia, CA, appeared on behalf of the Respondent. Date of concluding the hearing : July 25, 2023 Date of pronouncing the order : September 13, 2023 आदेश / ORDER संजय गग[, ÛयाǓयक सदèय ɮवारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the revenue against the order dated 22.06.2020 of the Commissioner of Income Tax (Appeals)-5, Kolkata (hereinafter referred to as the ‘CIT(A)’) passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The revenue is aggrieved by the action of the CIT(A) in quashing the reassessment order passed by the Assessing Officer in the case of the assessee u/s 147 r.w.s 148 of the Act. I.T.A No.511/Kol/2020 Assessment year: 2011-12 M/s Om Sharda Logistics Pvt. Ltd. 2 3. The brief facts of the case are that the assessee is a private limited company and is engaged in the business of transportation. The assessee filed its return of income for the year under consideration on 29.09.2011 declaring total income of Rs.14,02,470/-. The case was selected for scrutiny and the assessment order was passed u/s 143(3) of the Act assessing total income of the assessee of Rs.27,33,750/-. Thereafter, the assessment was reopened by the Assessing Officer u/s 147 r.w.s 148 of the Act by observing that information was received that the assessee as one of the beneficiaries had received a sum of Rs.17,00,000/- from M/s Naman Commotrade Pvt. Ltd. in the fund trail of shell companies which escaped assessment. That the said transaction was not examined by the Assessing Officer during the course of regular assessment u/s 143(3) of the Act. The Assessing Officer, therefore, held that the income of the assessee to the extent of Rs.17,00,000/- has escaped assessment. He, therefore, reopened the assessment u/s 148 of the Act. 4. The assessee though, contested the reopening of the assessment on the ground that the said transaction was duly examined by the Assessing Officer during the course of regular assessment and further that the Assessing Officer did not have valid reasons to believe of escapement of income. It was further explained that the said company i.e M/s Naman Commotrade Pvt. Ltd. was no more existed as the said company has been merged with the assessee company itself by virtue of order no.35 of 2013 of the Hon’ble Calcutta High Court dated 03.04.2013. All the documents to prove the genuineness of the transaction were furnished to the Assessing Officer including a copy of PAN of the creditors. Further it was submitted that the transaction was done through banking channel. The Assessing Officer however, noted I.T.A No.511/Kol/2020 Assessment year: 2011-12 M/s Om Sharda Logistics Pvt. Ltd. 3 that the actual amount of loan extended by M/s Naman Commotrade Pvt. Ltd. was Rs.4,59,40,000/- and further held that the assessee could not establish the identity and creditworthiness of the creditor and genuineness of the transaction. He accordingly made the addition of Rs.4,59,40,000/- including the income of the assessee. 5. In appeal, the ld. CIT(A) deleted the addition so made by the Assessing Officer observing that the reassessment in this case was a change of opinion. That the transaction relating to the unsecured loan taken by the assessee had already been scrutinised during the regular assessment proceedings and no adverse comments were noted by the Assessing Officer. The ld. CIT(A) further observed that the reassessment otherwise was time-barred being hit by the 1 st Proviso to section 147 of the Act. That the assessee had duly disclosed all the material facts necessary of the assessment of the assessee for the year under consideration and that the reopening of the assessment after the expiry of four years from the end of the relevant assessment year was barred by limitation being hit by the 1 st Proviso to section 147 of the Act. He, therefore, held the reopening as bad in law. On merit also, the ld. CIT(A) noted that the assessee had duly discharged its responsibilities to establish the identity and creditworthiness of the creditor and genuineness of the transaction. He observed that the assessee has provided all the necessary documents like audited balance sheet, ITR, tax audit report, ROC documents, bank statements, ledger account and court orders of merger of the creditor into the assessee company. He observed that the creditor company was the sister company of the assessee company only and it had tangible net worth of Rs.704.00 lakh as on 31.03.2011 and out of which advanced unsecured loan to its sister I.T.A No.511/Kol/2020 Assessment year: 2011-12 M/s Om Sharda Logistics Pvt. Ltd. 4 concern was of Rs.4,59,40,000/- only. The ld. CIT(A) after going through the entire facts and circumstances, deleted the addition so made by the Assessing Officer. 6. Before us, the ld. DR could not point out any such infirmity in the order of the CIT(A) warranting our interference. 7. The ld. AR, on the other hand, has relied upon the decision of the Hon’ble Bombay High Court in the case of Marico Ltd. vs. ACIT in WP No. 1917 of 2019 decided on 21.08.2019, wherein, in para 12 of the said order, the Hon’ble Bombay High Court has observed as under: “12. Thus we find that the reasons in support of the impugned notice is the very issue in respect of which the Assessing Officer has raised the query dated 25 September 2017 during the assessment proceedings and the Petitioner had responded to the same by its letters dated 10 December 2017 and 21 December 2017 justifying its stand. The non-rejection of the explanation in the Assessment Order would amount to the Assessing Officer accepting the view of the assessee, thus taking a view/forming an opinion. Therefore, in these circumstances, the reasons in support of the impugned notice proceed on a mere change of opinion and therefore would be completely without jurisdiction in the present facts. Accordingly, the impugned notice dated 27 March 2019 is quashed and set aside.” 8. The ld. Counsel for the assessee further brought our attention to the decision of the Hon’ble Supreme Court in SLP (Civil) Diary No.7367/2020 decided on 01.06.2020, wherein, the Hon’ble Supreme Court taking note of the aforesaid observation made in para 12 by the Hon’ble Bombay High Court has dismissed the SLP preferred by the revenue in the said case. 9. Considering the rival contentions, we do not find any reasons to interfere with the order of the CIT(A) and the same is upheld. The appeal of the revenue is hereby dismissed. I.T.A No.511/Kol/2020 Assessment year: 2011-12 M/s Om Sharda Logistics Pvt. Ltd. 5 10. In the result, the appeal of the revenue stands dismissed. Kolkata, the 13 th September, 2023. Sd/- Sd/- [डॉÈटर मनीष बोरड /Dr. Manish Borad] [संजय गग[ /Sanjay Garg] लेखा सदèय /Accountant Member ÛयाǓयक सदèय /Judicial Member Dated: 13.09.2023. RS Copy of the order forwarded to: 1 ITO, Ward-14(1), Kolkata 2. M/s Om Sharda Logistics Pvt. Ltd 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches