ITO,Ward-3(4), Kolkata, Kolkata V. M/S MBK Trading Pvt.Ltd., Kolkata

ITA 516/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5631 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 03-04-2012
• Court: TRIBUNAL
• Department Lawyers: A K SINGH LD CITSR
• Assessee Lawyers: S K TULSIYAN LD
• Section: 40A(3); 143(3); 68

Judgement Text

, A , , INCOME TAX APPELLATE TRIBUNAL, BENCH- A KOLK ATA ( ) BEFORE . . , SHRI P.K.BANSAL, ACCOUNTANT MEMBER !' /AND #$#% 1 ' , SHRI GEORGE MATHAN, JUDICIAL MEMBER '( / ITA NO. 516/KOL/12 A.Y 2006-07 I.T.O WARD 3(4), KOLKATA - ! - - VERSUS - . M/S. MBK TRADING PVT. LTD PAN:AADCM8225H ( '* / APPELLANT ) ( +,'* / RESPONDENT ) '* . /FOR THE APPELLANT /SHRI A.K SINGH, LD. CIT/SR.DR +,'* . / FOR THE RESPONDENT: / SHRI S.K. TULSIYAN, ADVOCATE, LD.AR /!0 1 2 /DATE OF HEARING : 06-01-2014 34 1 2 /DATE OF PRONOUNCEMENT:15/01/2014 / ORDER #$#% 1 ' , SHRI GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), I, KOLKATA I N APPEAL NO. 375/CIT(A)-I/WD- 3(4)/08-09 DATED 09.01.2012 FOR THE ASSESSMENT YEA R 2006-07. 2. SHRI A.K SINGH, LEARNED. CIT/SR.DR REPRESENTED O N BEHALF OF THE REVENUE AND SHRI S.K. TULSIYAN, ADVOCATE , LEARNED AR REPRES ENTED ON BEHALF OF THE ASSESSEE. 3. IN THIS REVENUES APPEAL, THE REVENUE HAS RAIS ED FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) GROSSLY ERRED IN ALLOWING A SSESSEES APPEAL IN DELETING THE ADDITIONS MADE BY THE A.O. O N ASSESSMENT U/S 143(3) FOR A TOTAL AMOUNT OF RS.13,64,36,062/-. WHI CH, ON ACCOUNT OF SHARE APPLICATION MONEY OF RS.13,60,36,062/- AND UN DISCLOSED CASH DEPOSIT OF RS. 4,55,000/-, RESPECTIVELY. 2. THE LD. CIT(A) GROSSLY ERRED IN NOT CONSIDERING THE FACT THAT THE A.O. ADDED THE SHARE APPLICATION MONEY OF RS.13 ,60,36,062/- ON ITA NO. 516/KOL/12-A ITO W 3(4)KOL VS. MBK TRADING P.LTD 2 THE BASIS OF ONE OF A PRIME REASON STATED AS THE C REDITWORTHINESS OF ALL THE SHARE APPLICANTS HAVE NOT BEEN PROVED YET. 3. THE LD. CIT(A) ERRED IN ADMITTING FRESH DOCUMEN TED EVIDENCES IN COURSE OF THE APPEAL PROCEEDINGS WHICH WERE NOT PRODUCED AND FURNISHED IN COURSE OF THE ASSESSMENT PROCEEDINGS D ESPITE BEING SPECIFICALLY REQUISITIONED AND OPPORTUNITIES GIVEN. 4. THE LD. CIT(A) ERRED IN IGNORING A FACT THAT AS SESSEE DID NOT FURNISH COPY OF FORM NO.-2 (SUBMISSION BEFORE ROC I N RESPECT OF ALLOTMENT OF SHARES) AND BOOKS OF ACCOUNTS IN SUPPO RT OF CASH SALES IN COURSE OF THE ASSESSMENT PROCEEDINGS AS REPORTED BY THE A.O. THROUGH THE 1 ST SUBMISSION IN REMAND IN COURSE OF THE APPEAL PROC EEDINGS. 5. THE LD. CIT(A) GROSSLY ERRED IN ASKING FOR SUBS EQUENT 2 ND SUBMISSION FROM THE A.O. ON SUCH FRESH DOCUMENTS AD MITTED BY HIM IN VIOLATION OF RULE 46A OF THE INCOMETAX RULE, 1962. 6. THE LD. CIT(A) ERRED IN NOT REALIZING THE REMAN D REPORT OF THE A.O. THAT IT IS ONLY ABOUT THE CORRECTNESS OF THE B ANKING TRANSACTIONS IN RESPECT OF THE SHARE APPLICATION MONEY RECEIVED IS REPORTED BUT NOT THE ASPECT OF CREDITWORTHINESS AND GENUINE EXISTE NCES OF ALL THE APPLICANTS. 7. THE LD. CIT(A) ERRED IN NOT DISCUSSING AND OFFE RING HIS VALID VIEWS IN RESPECT OF THE CREDITWORTHINESS OF THE SHA RE APPLICANTS IN HIS CONCLUSIVE PARA-4.4 OF THE ORDER WHILE EMPHASIZING ONLY ON THE CORRECTNESS OF THE TRANSACTION. 8. THE LD. CIT(A) GROSSLY ERRED IN STATING THAT A. O. HAS ACCEPTED THE SHARE APPLICATION MONEY BY MERE MISINTERPRETATI ON OF THE REMAND REPORTS. 9. THE LD. CIT(A) ERRED IN NOT CONSIDERING THE FAC T THAT THE ASSESSEE DID NOT CLARIFY THE SOURCE OF THE ENTIRE C ASH DEPOSIT OF RS. 4,55,000/- IN RESPECT OF THE CASH SALES TO THE A.O. IN COURSE OF THE ASSESSMENT PROCEEDINGS. 10. LD. C1T(A) HAS ERRED ON THE FACTS & CIRCUMSTAN CES OF THE CASE IN NOT REALIZING THE FACT THAT NO CONFIRMATION AND NO VERIFICATION COULD BE MADE IN RESPECT OF ALL DISALLOWANCE MADE BY THE A.O. ON DUE OPPORTUNITIES EXTENDED TO THE ASSESSEE IN COURSE OF THE ASSESSMENT PROCEEDINGS. 11. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE O RDER OF LD CIT (A) IS PERVERSE, HENCE SAME MAY BE SET ASIDE OR ORD ER OF THE A.O BE RESTORED. 12. THE APPELLANT CRAVES LEAVE TO AMEND, MODIFY AN D ALTER ANY GROUNDS OF APPEAL DURING COURSE OF HEARING OF THE C ASE. 4. IN REGARD TO GROUND NOS. 1 TO 8 OF THE REVENUE S APPEAL, IT WAS SUBMITTED BY THE LEARNED CIT(DR) THAT THE ISSUES WERE AGAINST THE AC TION OF THE LD. CIT(A) IN DELETING THE ITA NO. 516/KOL/12-A ITO W 3(4)KOL VS. MBK TRADING P.LTD 3 ADDITIONS MADE BY THE AO OF RS.13,64,36,062/- BY IN VOKING THE PROVISIONS OF SECTION 68 OF THE I.T ACT 1961. IT WAS SUBMITTED THAT THE AMOUNT REPRESENTED THE SHARE CAPITAL AND SHARE PREMIUM RECEIVED BY THE ASSESSEE COMPANY. IT WAS THE SUBMISSION THAT AS THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF SHARE CAP ITAL AS ALSO SHARE PREMIUM, THE AO HAD MADE THE ADDITIONS. IT WAS THE SUBMISSION THAT THE LD.CIT(A HAD DELETED THE ADDITIONS WRONGLY ON THE BASIS OF REMAND REPORT O F THE AO. 5. IN REGARD TO GROUND NOS. 9 TO 11 OF THE REVENUE S APPEAL, IT WAS SUBMITTED BY THE LEARNED CIT(DR) THAT THE ISSUES WERE AGAINST THE A CTION OF THE LD.CIT(A) IN DELETING THE ADDITION TOWARDS CASH DEPOSITS IN THE ASSESSEES BA NK ACCOUNT. IT WAS THE SUBMISSION THAT AS THE ASSESSEE WAS UNABLE TO EXPLAIN THE CAS H DEPOSITS IN THE ASSESSEES BANK ACCOUNT, WHICH HAD BEEN CLAIMED AS SALES BY THE AS SESSEE THE AO HAD MADE THE ADDITIONS AS UNEXPLAINED INCOME OF THE ASSESSEE. I T WAS THE SUBMISSION THAT THE LD.CIT(A) HAD DELETED THE ADDITIONS WRONGLY BY RELY ING UPON THE REMAND REPORT OF THE AO. 6. IN REPLY, THE LEARNED AR FOR THE ASSESSEE DREW O UR ATTENTION TO THE ORDER OF THE LD.CIT(A) IN PARAS 4.3, AND 6.3 AT PAGES 8-9 AND 1 2 OF THE ORDER. IT WAS THE SUBMISSION THAT IN THE COURSE OF REMAND PROCEEDINGS, THE AO HA D ACCEPTED THE GENUINENESS OF TRANSACTIONS REPRESENTING THE SHARE CAPITAL AND SHARE PREMIUM RECEIVED BY THE ASSESSEE COMPANY. IT WAS THE SUBMISSION THAT CASH DEPOSIT IN THE ASSESSEES BANK ACCOUNT HAS ALSO BEEN ACCEPTED BY THE AO AND HAS EXPLAINED THE SAME IN HIS REMAND REPORT. IT WAS THE SUBMISSION THAT AS THE AO HAD ACCEPTED THE GENU INENESS OF TRANSACTION OF SHARE APPLICATION MONEY AS ALSO SHARE PREMIUM AND CASH D EPOSIT IN THE BANK ACCOUNT, THE APPEAL OUGHT NOT TO HAVE BEEN FILED BY THE REVENUE . IT WAS THE SUBMISSION THAT THE LD.CIT(A) HAS RIGHTLY DELETED THE ADDITIONS ON THE BASIS OF REMAND REPORT. HE DREW OUR ATTENTION TO PAGES 45-57 OF THE ASSESSEES PAPER BO OK, WHICH IS A COPY OF THE REMAND REPORT. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET ON THE FACTS OF THE PRESENT CASE, IT WOULD BE WORTHWHILE TO EXTRACT THE REMAND REPORT, WHICH HAS BEEN RELIED UPON BY THE LD.CIT(A). THE EXTRACT OF REMAND REPO RT AS FOLLOWS:- ITA NO. 516/KOL/12-A ITO W 3(4)KOL VS. MBK TRADING P.LTD 4 ITA NO. 516/KOL/12-A ITO W 3(4)KOL VS. MBK TRADING P.LTD 5 ITA NO. 516/KOL/12-A ITO W 3(4)KOL VS. MBK TRADING P.LTD 6 7.1 A PERUSAL OF ORDER OF THE LD.CIT(A) IN PARAS 4 .3 AND 4.4 CLEARLY SHOWS THAT THE LD.CIT(A) HAS SENT THE DETAILS PLACED BEFORE HIM TO THE AO FOR REMAND PROCEEDING. THE AO HAS EXAMINED THE SHARE APPLICATION MONEY RECEIV ED FROM THE SHAREHOLDERS AND FOUND IT TO BE CORRECT. THE AO HAS SUBMITTED SO I N THE REMAND REPORT. 7.2 IN REGARD TO THE ADDITIONS OF RS.4,55,000/-, IT IS NOTICED THAT THE AOS REMAND REPORT HAS ALSO BEEN EXTRACTED BY THE LD.CIT(A) IN PARA 6.3 OF HIS ORDER AND HAS DELETED THE ADDITIONS ON THE BASIS OF REMAND REPORT. THOUG H THE LEARNED CIT/DR HAS RAISED ITA NO. 516/KOL/12-A ITO W 3(4)KOL VS. MBK TRADING P.LTD 7 ARGUMENTS THAT THE LD.CIT(A) OUGHT TO HAVE NOT DELE TED THE ADDITIONS ON THE BASIS OF REMAND REPORT, THE REVENUE IS ALSO UNABLE TO POINT OUT ANY DEFECT OR ERROR IN THE REMAND REPORT FILED BY THE AO ON THE BASIS OF WHICH THE L D.CIT(A) HAS DELETED THE ADDITIONS. FURTHER, A PERUSAL OF THE ORDER OF LD. CIT(A) CLEAR LY SHOWS THAT IN REGARD TO THE ISSUE OF DISALLOWANCE UNDER SECTION 40A(3) THE SAME HAS BEE N CONFIRMED BY THE LD. CIT(A) ON THE BASIS OF REMAND REPORT ONLY. THUS, IT IS CLEA RLY EVIDENT THAT THE LD.CIT(A) HAS GIVEN THE AO OPPORTUNITY TO VERIFY THE ADDITIONS O N THE BASIS OF THE EVIDENCES PRODUCED BEFORE THE AO IN THE REMAND PROCEEDINGS. THE AO HA S VERIFIED THE SAME AND GIVEN A REMAND REPORT IN FAVOUR OF THE ASSESSEE. NO FAULT CAN BE FOUND IN THE HANDS OF THE LD.CIT(A) FOR ACCEPTING THE REMAND REPORT AS PROVI DED BY THE AO. THE REVENUE EVEN BEFORE US HAS NOT BEEN ABLE TO DISLODGE THE FINDI NGS GIVEN BY THE AO IN THE REMAND PROCEEDINGS. IN THE CIRCUMSTANCE, WE ARE OF THE VI EW THAT THE FINDING OF THE LD.CIT(A) IN DELETING THE ADDITIONS BASING HIS ORDER ON REMA ND REPORT PROVIDED BY THE AO IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENC E. THE SAME IS HEREBY UPHELD. 8.. IN THE RESULT, THE REVENUES APPEAL IN ITA NO. 516/KOL/2012 FOR THE ASSESSMENT YEAR 2006-07 STANDS DISMISSED. 5 / 6 / 7 58 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 15/01 /2014 SD/- SD/- ** PRADIP SPS 1 +..9 :94; / COPY OF THE ORDER FORWARDED TO: 1. . '* / THE APPELLANT : I.T.O WARD 3(4) 8/2 ESPLANADE EA ST, DWARLIE HOUSE, KOL-69 2 +,'* / THE RESPONDENT- M/S. MBK TRADING PVT. LTD 12 GOVT PL(E), KOL- 69. 3 4. . . / THE CIT, . ( )/ THE CIT(A) ( . . , ) ( P.K.BANSAL, ACCOUNTANT MEMBER) ( #$#% 1 ' , ) (GEORGE MATHAN, JUDICIAL MEMBER) ( (( ( 2 2 2 2 ) )) ) DATE 15/01/2014 ITA NO. 516/KOL/12-A ITO W 3(4)KOL VS. MBK TRADING P.LTD 8 5 . !<.7 +. / DR, KOLKATA BENCH 6 . GUARD FILE . ,9 +./ TRUE COPY, // BY ORDER, 5 '# /ASSTT REGISTRAR