M/s. Vriddhi Power Pvt. Ltd., , Kolkata V. ITO, Ward - 2(4), Kolkata , Kolkata

ITA 570/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5858 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-07-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 02-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: M D SHAH
• Keywords: Unexplained cash credit; Assessment record; Set aside
• Section: 143(3); 131; 68

Judgement Text

ITA NO. 570/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. VRIDDHI POWER PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 570/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. VRIDDHI POWER PVT. LIMITED,................... ................................APPELLANT EN-1, 3 RD FLOOR, INSIGNIA TOWER, SECTOR-V, SALT LAKE, KOLKATA-700 091 [PAN: AAECM7218H] -VS.- INCOME TAX OFFICER,................................ ......................................RESPONDENT WARD-2(4), KOLKATA, AAYAKAR BHAWAN, 5 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI M.D. SHAH, A.R., FOR THE APPELLANT SHRI A.K. NAYAK, CIT, D.R , FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : JULY 03, 2019 DATE OF PRONOUNCING THE ORDER : AUGUST 09, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-24, KOLKATA DA TED 24.01.2018, WHEREBY HE CONFIRMED THE ADDITION OF RS.129.43 CROR ES MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHARE APPLICATION M ONEY INCLUDING PREMIUM BY TREATING THE SAME AS UNEXPLAINED CASH CR EDIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF INVESTMENT AND TRADING IN SHARES. T HE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 24.09.2012 DECLARING TOTAL INCOME OF RS.22,267/-. DURING THE YEAR UNDER CONSIDERATION, THE ITA NO. 570/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. VRIDDHI POWER PVT. LIMITED 2 ASSESSEE HAD RECEIVED A SUBSTANTIAL AMOUNT OF RS.12 9.43 CRORES ON ACCOUNT OF SHARE APPLICATION MONEY INCLUDING PREMIU M. IN ORDER TO VERIFY THE SAID AMOUNT IN TERMS OF SECTION 68, SUMMONS UND ER SECTION 131 WAS ISSUED BY THE ASSESSING OFFICER TO THE DIRECTOR OF THE ASSESSEE-COMPANY. ALTHOUGH THE DIRECTOR OF THE ASSESSEE-COMPANY APPEA RED BEFORE THE ASSESSING OFFICER IN RESPONSE TO THE SAID SUMMONS, HE FAILED TO PRODUCE THE DIRECTORS OF THE SHARE-SUBSCRIBING COMPANIES FO R THEIR EXAMINATION BY THE ASSESSING OFFICER. THE ASSESSING OFFICER, TH EREFORE, ISSUED SUMMONS TO THE DIRECTORS OF THE SHARE SUBSCRIBING C OMPANIES AND ALTHOUGH THE DIRECTORS OF THE SHARE SUBSCRIBING COM PANIES APPEARED BEFORE THE ASSESSING OFFICER IN RESPONSE TO THESE S UMMONS UNDER SECTION 131, THEY DID NOT PRODUCE FULLY THE DOCUMENTS CALLE D FOR BY THE ASSESSING OFFICER AND ALSO SOUGHT TIME TO DEPOSE BEFORE THE A SSESSING OFFICER. THE ASSESSING OFFICER ACCORDINGLY AFFORDED ONE MORE OPP ORTUNITY TO THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANIES TO DEP OSE BEFORE HIM AND FILE THE REQUIRED DOCUMENTS. THE DIRECTORS OF THE S HARE SUBSCRIBING COMPANIES, HOWEVER, FAILED TO COMPLY WITH THE SAID REQUIREMENT. KEEPING IN VIEW THIS FAILURE OF THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANIES, THE ASSESSING OFFICER HELD THAT THE RELEVANT CASH C REDITS REPRESENTING RECEIPT OF SHARE APPLICATION MONEY INCLUDING PREMIU M WERE NOT PROPERLY EXPLAINED BY THE ASSESSEE IN TERMS OF SECTION 68 AN D BY TREATING THE SAME AS UNEXPLAINED CASH CREDIT, AN ADDITION OF RS.129.4 3 CRORES WAS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE AS SESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN O RDER DATED 20.03.2015. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND DURING THE COURSE OF APPELLATE PROCEEDINGS BEFO RE THE LD. CIT(APPEALS), A DETAILED SUBMISSION WAS MADE BY TH E ASSESSEE IN SUPPORT OF ITS CASE THAT THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 68 BY TREATING THE SHARE APPLICATION MONEY INCLUDIN G PREMIUM AS ITA NO. 570/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. VRIDDHI POWER PVT. LIMITED 3 UNEXPLAINED CASH CREDITS, WAS NOT JUSTIFIED. THE LD . CIT(APPEALS) DID NOT FIND MERIT IN THE SAID SUBMISSIONS. HE FOUND FROM T HE PAPERS AND DOCUMENTS AVAILABLE ON THE ASSESSMENT RECORDS THAT THE CREDITWORTHINESS OF THE CONCERNED SHARE APPLICANT COMPANIES WAS NOT ESTABLISHED AND THE RELEVANT TRANSACTIONS INVOLVING RECEIPT OF SHARE AP PLICATION MONEY INCLUDING PREMIUM WERE NOMINAL RATHER THAN THE REAL . HE ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R UNDER SECTION 68 OF THE ACT. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPE ALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THERE WAS NO SATISFACTORY COMPLIANCE ON THE PART OF THE CONCERNED SHARE SUBSCRIBERS TO THE SUMMONS ISSUED B Y THE ASSESSING OFFICER UNDER SECTION 131 DURING THE COURSE OF ASSE SSMENT PROCEEDINGS AND SINCE THE STATEMENTS OF THE DIRECTORS OF THE SH ARE SUBSCRIBING COMPANIES COULD NOT BE RECORDED AND THEY ALSO FAILE D TO FURNISH THE RELEVANT DOCUMENTS REQUIRED BY THE ASSESSING OFFICE R, THE ASSESSING OFFICER MADE THE ADDITION UNDER SECTION 68 BY TREAT ING THE SHARE APPLICATION MONEY INCLUDING PREMIUM RECEIVED BY THE ASSEESSEE-COMPANY DURING THE YEAR UNDER CONSIDERATION AS UNEXPLAINED CASH CREDIT. HE HAS CONTENDED THAT THE RELEVANT DOCUMENTARY EVIDENCE TO EXPLAIN THE RELEVANT CASH CREDITS REPRESENTING SHARE APPLICATION MONEY I NCLUDING PREMIUM IN TERMS OF SECTION 68 WAS NOT FILED BEFORE THE ASSESS ING OFFICER BUT STILL THE LD. CIT(APPEALS) CONSIDERED THAT INSUFFICIENT EVIDE NCE AVAILABLE ON THE ASSESSMENT RECORDS AND DECIDED THE ISSUE AGAINST TH E ASSESSEE. HE HAS SUBMITTED THAT THE ASSESSEE IS NOW IN A POSITION TO PRODUCE THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANIES ALONG WITH THE R ELEVANT DOCUMENTARY EVIDENCE FOR VERIFICATION OF THE ASSESSING OFFICER AND URGED THAT THE MATTER MAY BE SENT BACK TO THE ASSESSING OFFICER FO R GIVING AN OPPORTUNITY TO DO SO. KEEPING IN VIEW ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO ITA NO. 570/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. VRIDDHI POWER PVT. LIMITED 4 GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUPPOR T AND SUBSTANTIATE ITS CASE ON THE ISSUE UNDER CONSIDERATION BY SENDING TH E MATTER BACK TO THE ASSESSING OFFICER. EVEN THE LD. D.R. HAS NOT RAISED ANY OBJECTION FOR SENDING THE MATTER BACK TO THE ASSESSING OFFICER. W E, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) AND REST ORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER GIVING ONE MORE OPPORTUNITY TO THE A SSESSEE TO SUPPORT AND SUBSTANTIATE ITS CASE. AS UNDERTAKEN BY THE LD. COU NSEL FOR THE ASSESSEE, THE ASSESSEE SHALL MAKE DUE COMPLIANCE BEFORE THE A SSESSING OFFICER AND SHALL EXTEND ALL THE POSSIBLE COOPERATION IN ORDER TO ENABLE THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT AFRESH EXPEDITIO USLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 09, 2 019. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP ) JUDICIAL MEMBER V ICE-PRESIDENT (KZ) KOLKATA, THE 9 TH DAY OF AUGUST, 2019 COPIES TO : (1) M/S. VRIDDHI POWER PVT. LIMITED, EN-1, 3 RD FLOOR, INSIGNIA TOWER, SECTOR-V, SALT LAKE, KOLKATA-700 091 (2) INCOME TAX OFFICER, WARD-2(4), KOLKATA, AAYAKAR BHAWAN, 5 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-24, KOLKA TA, (4) COMMISSIONER OF INCOME TAX, KOLKATA- , KOLKATA; (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.