Fashion Bazaar Sales Pvt. Ltd., , Kolkata V. ITO, Ward - 7(3), Kolkata , Kolkata

ITA 631/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2437 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Assessee Lawyers: MIRAZ D SHAH
• Keywords: Unexplained cash credit; Opportunity of being heard; Set aside
• Section: 131; 68; 143(3)

Judgement Text

1 ITA NO. 631/KOL/2018 FASHION BAZAR SALES PVT. LTD., AY- 2012-13 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 631/KOL/2018 ASSESSMENT YEAR: 2012-13 FASHION BAZAR SALES PVT. LTD. (PAN: AAACF8817B) VS. INCOME - TAX OFFICER, WARD - 7(3), KOLKATA APP ELLANT RESPONDENT DATE OF HEARING 1 9 .0 7 .2019 DATE OF PRONOUNCEMENT 04 .0 9 .2019 FOR THE APP ELLANT SHRI MIRAZ D. SHAH, AR FOR THE RESPONDENT SHRI ROBIN CHOUDHURY, ADDL. CIT, DR ORDER PER SHRI A. T. VARKEY, JM: THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A)- 3, KOLKATA DATED 15.05.2015 FOR AY 2012-13. 2. THE GROUNDS OF APPEAL OF ASSESSEE IS AGAINST THE ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.1,70,00,000/- MADE ON ACCOUNT OF SHARE CAPITAL ALONG WITH PREMIUM RECEIVED U/S. 68 OF THE INCOME-T AX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AND ALSO IN CONFIRMING THE ADDITION ON ACCOUNT OF SUBSCRIPTION AND DONATION CH ARGES OF RS.51,508/-. 3. THE ASSESSEE IN THE PRESENT CASE IS A PRIVATE LI MITED COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF INVESTMENT IN S HARES. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILE D BY IT ON 16.09.2012 DECLARING TOTAL INCOME OF RS.23,967/-. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CLAIM OF THE ASSESSE E OF HAVING RAISED THE SHARE CAPITAL ALONG WITH PREMIUM AMOUNTING TO R S.1.70 CRORES 2 ITA NO. 631/KOL/2018 FASHION BAZAR SALES PVT. LTD., AY- 2012-13 WAS EXAMINED BY THE ASSESSING OFFICER. DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS, HE ISSUED SUMMONS UNDER SEC TION 131OF THE ACT ON 16.02.2015 TO THE DIRECTOR OF THE ASSESSEE C OMPANY FOR PERSONAL APPEARANCE BUT, ACCORDING TO AO, NO COMPLI ANCE WAS MADE IN RESPONSE TO THE SAID SUMMONS U/S. 131 OF THE ACT . THEREAFTER, ACCORDING TO AO THE ASSESSEE FAILED TO ESTABLISH TH E IDENTITY AND CREDITWORTHINESS OF THE CONCERNED SHARE SUBSCRIBER COMPANIES AND THE GENUINENESS OF THE RELEVANT TRANSACTIONS. THE A SSESSING OFFICER, THEREFORE, TREATED THE ENTIRE SHARE CAPITAL OF RS.1 .70 CRORES RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AS UNEXPLAINED CASH CREDIT AND AN ADDITION TO THAT EXTENT WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 21.03.2015. THE AO ALSO DISALLOWED THE SUM OF RS.51,508/- ON ACCOUNT OF EXP ENSES TOWARDS SUBSCRIPTION AND DONATION CHARGES AS THE ASSESSEE FAILED TO ADDUCE ANY EVIDENCE TO SUBSTANTIATE THAT THE SAID EXPENSES CLAIMED WAS INCURRED DUE TO BUSINESS EXPEDIENCY. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO CONFI RMED THE ACTION OF AO. AGGRIEVED, ASSESSEE IS BEFORE US. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) DISMISSE D THE APPEAL ON MERITS WITHOUT CONSIDERING THE SUBMISSION MADE BY T HE ASSESSEE AND ALSO WITHOUT PROVIDING PROPER OPPORTUNITY OF HEARIN G TO THE ASSESSEE. HE ALSO POINTED OUT TO US THAT PROPER AND SUFFICIEN T OPPORTUNITY WAS NOT AFFORDED BY THE ASSESSING OFFICER DURING THE CO URSE OF ASSESSMENT PROCEEDINGS TO EXPLAIN THE RELEVANT CASH CREDITS RE PRESENTING SHARE CAPITAL AMOUNTING TO RS.1.70 CRORES IN TERMS OF SEC TION 68. THEREFORE HE HAS PLEADED THAT THE MATTER MAY, THEREFORE, BE S ENT BACK TO THE ASSESSING OFFICER FOR GIVING THE ASSESSEE A PROPER AND SUFFICIENT 3 ITA NO. 631/KOL/2018 FASHION BAZAR SALES PVT. LTD., AY- 2012-13 OPPORTUNITY TO ESTABLISH THE IDENTITY AND CREDITWOR THINESS OF THE CONCERNED SHARE SUBSCRIBERS AS WELL AS THE GENUINEN ESS OF THE RELEVANT TRANSACTIONS. THE LD. D.R. HAS ALSO NOT RA ISED ANY OBJECTION FOR SENDING THE MATTER BACK TO THE ASSESSING OFFICE R, HOWEVER, WANTED THE LD. AR TO UNDERTAKE TO EFFECTIVELY PARTICIPATE IN THE ASSESSMENT PROCEEDINGS. THEREFORE, RELYING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TIN BOX COMPANY VS. CIT (2001) 249 I TR 216 (SC), WHEREIN THE HONBLE SUPREME COURT HAS HELD AS UNDER: IT IS UNNECESSARY TO GO INTO GREAT DETAIL IN THESE MATTERS FOR THERE IS A STATEMENT IN THE ORDER OF THE TRIBUNAL, THE FACT-FI NDING AUTHORITY, THAT READS THUS : WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUB MISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PR OPER OPPORTUNITY OF BEING HEARD. THAT THE ASSESSEE COULD HAVE PLACED EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL IS REALLY OF NO CO NSEQUENCE FOR IT IS THE ASSESSMENT ORDER THAT COUNTS. THAT ORDER MUST BE MA DE AFTER THE ASSESSEE HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF SETTING OUT HIS CASE. WE, THEREFORE, DO NOT AGREE WITH THE TRIBUNAL AND THE HIGH COURT THAT IT WAS NOT NECESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSING AUTHORITY FOR FR ESH ASSESSMENT AFTER GIVING TO THE ASSESSEE A PROPER OPPORTUNITY O F BEING HEARD. TWO QUESTIONS WERE PLACED BEFORE THE HIGH COURT, OF WHICH THE SECOND QUESTION IS NOT PRESSED. THE FIRST QUESTION READS T HUS : 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN NOT SETTING ASIDE THE ASS ESSMENT ORDER IN SPITE OF A FINDING ARRIVED AT BY IT THAT THE INCOME -TAX OFFICER HAD NOT GIVEN A PROPER OPPORTUNITY OF HEARING TO THE ASSESS EE ? IN OUR OPINION, THERE CAN ONLY BE ONE ANSWER TO THI S QUESTION WHICH IS INHERENT IN THE QUESTION ITSELF : IN THE NEGATIVE A ND IN FAVOUR OF THE ASSESSEE. THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSIONER (APPEALS ) AND OF THE TRIBUNAL ARE ALSO SET ASIDE. THE MATTER SHALL NOW B E REMANDED TO THE ASSESSING AUTHORITY FOR FRESH CONSIDERATION, AS AFO RESTATED. 4 ITA NO. 631/KOL/2018 FASHION BAZAR SALES PVT. LTD., AY- 2012-13 IN THE LIGHT OF THE AFORESAID DECISION OF THE HONB LE SUPREME COURT AND THE FACTS DISCUSSED (SUPRA), WE SET ASIDE THE ORDERS OF THE L OWER AUTHORITIES AND REMAND THE MATTER BACK TO THE FILE OF AO FOR DECIDING THE SAME AFRESH AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS UNDERTAKEN BY THE LD. COUNSEL FOR THE ASSESSEE, THE ASSESSEE SHALL MAKE DUE COMPLIANCE BEFORE THE ASSESSING OFFICER AN D SHALL EXTEND ALL THE POSSIBLE COOPERATION IN ORDER TO ENABLE THE ASS ESSING OFFICER TO COMPLETE THE ASSESSMENT EXPEDITIOUSLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 4TH SEPTE MBER, 2019. SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 4TH SEPTEMBER, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. FASHION BAZAR SALES PVT. LTD., 28/2, SHAKESPEARE SARANI, KOLKATA-700 017. 2 RESPONDENT ITO, WARD - 7(3) , KOLKATA. 3. 4. CIT(A) - 3 , KOLKATA (SENT THROUGH E - MAIL) CIT - , , KOLKATA 5. DR, ITAT, KOLKATA. (SENT THROUGH E - MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR