D.C.I.T Cir - 7,kolkata., Kolkata V. M/s Dunlop India Ltd, Kolkata

ITA 709/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4850 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 03-04-2013
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Keywords: Unexplained investment; Additional evidence
• Section: 69

Judgement Text

1 ITA NO.709/KOL/2013-M/S. DUNLOP INDIA LTD. A.Y.2008 -09 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NO.709/KOL/2013 ASSESSMENT YEAR : 2008-09 D.C.I.T., CIRCLE-7, , -VERSUS- M/S. DUNLOP INDIA LTD. KOLKATA KOLKATA (PAN:AABCD0198E) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI NIRAJ KUMAR, CIT(DR) FOR THE RESPONDENT: NONE DATE OF HEARING : 08.04.2016. DATE OF PRONOUNCEMENT : 11.05.2016. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 23.01 2013 OF CIT(A) XXXII, KOLKATA, RELATING TO AY 2008-09. 2. GROUND OF APPEAL RAISED BY THE REVENUE READS AS FOLLOWS :- THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A)-XXXII, KOLKATA, HAS ERRED IN LAW AS WELL AS IN FACTS IN DELETING TH E ADDITION OF RS.44,00,00,000/- U/S 69 AS UNDISCLOSED INVESTMENT IN IMMOVABLE PROPERTY. 3. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN TH E MANUFACTURE AND TRADING IN TYRES AND TUBES AND RUBBER PRODUCTS. IN THE COURSE OF ASS ESSMENT PROCEEDINGS FOR A.Y.2008- 09, THE AO NOTICED THAT FROM AIR (ANNUAL INFORMATIO N REPORT) THAT ASSESSEE HAD PURCHASED IMMOVABLE PROPERTY ON 12.07.2007 AT A PRI CE OF RS.44 CRORES. THIS INFORMATION EMANATED FROM THE INFORMATION UPLOADED BY THE JOINT SUB-REGISTRAR-III, MUMBAI. THE AO FURTHER FOUND THAT NO SUCH INVESTMEN TS WERE REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE. THE AO CONFRONTED THE ASSESS EE WITH REGARD TO THE AFORESAID FACTS. THE AO ALSO ADDRESSED A LETTER TO THE JOINT SUB-REGISTRAR-III, MUMBAI DATED 20.12.2010 REQUISITIONING THE RELEVANT DETAILS. THE AO PASSED ORDER OF ASSESSMENT ON 31.12.2010. TILL SUCH TIME NO INFORMATION CAME FROM JOINT SUB-REGISTRAR, MUMBAI CITY-III. IN THE CIRCUMSTANCES AO CONCLUDED THAT TH E ASSESSEE MADE AN UNDISCLOSED 2 ITA NO.709/KOL/2013-M/S. DUNLOP INDIA LTD. A.Y.2008 -09 INVESTMENT OF RS.44 CRORES IN THE IMMOVABLE PROPERT Y. ACCORDINGLY A SUM OF RS. 44 CRORES WAS ADDED U/S 69 OF THE ACT TO THE TOTAL INC OME OF THE ASSESSEE. 4. BEFORE THE CIT(A) THE ASSESSEE SUBMITTED IT COUL D NOT PRODUCE EVIDENCE BEFORE THE AO REGARDING THE AIR INFORMATION REGARDING INVE STMENT OF PROPERTIES. THE ASSESSEE POINTED OUT THAT IT HAD NO SUCH INVESTMENT S AND MADE ENQUIRIES ABOUT THE SOURCE OF INFORMATION RECEIVED BY THE AO AND ITS AU THENTICITY. THE ASSESSEE POINTED OUT THAT IT MADE EFFORTS TO GET THE DETAILS FROM TH E OFFICE OF JOINT SUB REGISTRAR BUT COULD NOT SUCCEED BY 31.12.2010 WHEN THE ASSESSMENT WAS COMPLETED BUT CONTINUED EFFORTS AND ENDEAVOURS TO OBTAIN REPLY OF ASSESSEE S LETTER. THE JOINT REGISTRAR MUMBAI VIDE THEIR LETTER DT. 4 TH SEPTEMBER, 2011 SENT FULL TEXT OF THE TRANSACTION WHICH WAS CARRIED OUT BY THE ASSESSEE. A CERTIFIED COPY OF THE REGISTERED DOCUMENT AND COPY OF CERTIFIED COPY OF RESOLUTION DT. 12 TH MAY, 2007 OF THE ASSESSEE WAS FILED. THE SAID INFORMATION FILED BY THE ASSESSEE BEFORE CIT(A ) REVEALED THAT THERE HAD BEEN NO PURCHASE OR SALE OF ANY PROPERTY OF RS.44 CRORES BU T THE ASSESSEE HAD CREATED AN ENGLISH MORTGAGE OVER PROPERTY OF THE ASSESSEE TO A VAIL LOAN FACILITY OF RS.44 CRORE FROM DEUTCHE BANK AG BY FILING FORM NO.8 WITH DEED OF MORTGAGE WITH DEUTCHE BANK AG FOR AVAILING LOAN FACILITY OF RS.44 CRORES. THE AFORESAID LOAN OF RS.44 CRORES FOR WHICH MORTGAGE OF COMPANYS PROPERTY WAS CREATED IN FAVOUR OF DEUTCHE BANK AG AS ABOVE WAS PAID BACK AND SATISFACTION OF CHARGE FOR RS.44 CRORES WAS FILED UNDER FORM NO.17 UNDER SRN A32598385 DT. 26.0 2.2008 AND CERTIFICATE OF MEMORANDUM OF SATISFACTION OF MORTGAGE/CHARGE U/S 1 40 OF THE COMPANIES ACT, 1956 WAS ALSO ISSUED BY REGISTRAR OF COMPANIES, WES T BENGAL. 5. THE AFORESAID EVIDENCE WAS CONFRONTED TO THE AO BY THE CIT(A) AND AFTER GETTING THE REMAND REPORT FROM THE AO ON THE ADDITIONAL EVI DENCE FILED BY THE ASSESSEE CIT(A) ADMITTED THE ADDITIONAL EVIDENCE UNDER RULE 46A. THEREAFTER CIT(A) HELD AS FOLLOWS :- I HAVE DULY CONSIDERED THE ASSESSMENT ORDER, SUBMI SSION OF THE AIR, ADDITIONAL EVIDENCES FILED BY THE APPELLANT AND REMAND REPORT OF THE AO AND ITS REJOINDER FILED BY THE AIR. I FOUND THAT THE A.O. MENTIONED IN THE ASS ESSMENT ORDER AND ON GOING THROUGH THE I.T.S DETAILS IN RESPECT OF ASSESSEE COMPANY, I T WAS FOUND THAT, IT HAD PURCHASED AN IMMOVABLE PROPERTY ON 12/7/2007 AT A PRICE OF RS. 4 4 CRORE AS UPLOADED BY JOINT SUB- REGISTRAR MUNICIPALITY CITY-3. THE APPELLANT STATED THAT DURING THE YEAR THE ASSESSEE 3 ITA NO.709/KOL/2013-M/S. DUNLOP INDIA LTD. A.Y.2008 -09 COMPANY DID NOT PURCHASE ANY PROPERTY SO THE A.O WR OTE A LETTER TO THE CONCERN AUTHORITY FOR VERIFICATION BUT THE A.O DID NOT RECE IVED ANY INFORMATION FROM THE ABOVE MENTIONED AUTHORITY UP TO THE PASSING OF THE ORDER AND HE MADE THE ADDITION OF RS.44,00,0001- AS UNDISCLOSED INVESTMENT IN THE SAI D PROPERTY. NOW IN THE APPELLATE PROCEEDINGS, THE A/R FILED THE DOCUMENTS WHICH WAS REGISTERED ON 12/07/2007 IN THE OFFICE OF JOINT SUB-REGISTRAR BOMBAY-3. THE COPY OF THE SAID DOCUMENT WAS SENT TO THE A.O F OR REMAND REPORT. THE A.O SEND THE REMAND REPORT AS UNDER :- IN THIS CONNECTION, THIS IS TO BRING TO YOUR KIN D NOTICE THAT THE THEN A. O. DURING THE COURSE OF HEARING SENT A LETTER TO THE JOINT SUB-REGISTRAR MUMBAI-3, REQUESTING HIM TO CONFIRM PURCHASE OF IMMOVABLE PROPERTY AT A PRICE OF RS. 44 CRORES AS UPLOADED BY THE JOINT REGISTRAR MUMBAI, IN ITS WEBSIT E. HOWEVER, TILL DATE NO REPLY HAS BEEN RECEIVED TO PROVE IT OTHERWISE. UNDER THE CIRCUMSTANCE, IT WOULD NOT BE APPRO PRIATE TO DIFFER WITH THE VIEW TAKEN BY THE A. 0 T THE TIME OF SCRUTINY ASSESSMENT IN THIS REGARD. THIS IS FOR YOUR' KIND INFORMATION AND NECESS ARY ACTION. THE ASSESSING OFFICER DID NOT SPEAK ANY SINGLE WOR D ON THE DOCUMENTS FILED BY THE A/R REGARDING THE ENGLISH MORTGAGE OF THE PROPERTY. IT PROVES THAT HE IS ACCEPTING THE SAID DOCUMENTS. THE A/R IN THE REJOINDER OF REMAND REPOR T AS WELL AS SUBMISSION IN THE ASSESSMENT PROCEEDINGS, ALSO STATED THAT THE COMPAN Y DID NOT. PURCHASE ANY IMMOVABLE PROPERTY DURING THE F.Y 2:007-08. THIS IS A DOCUMEN T OF ENGLISH MORTGAGE WHICH WAS REGISTERED ON 12/07/2007. HENCE THERE IS NO QUESTIO N TO ARISE OF THE UNEXPLAINED INVESTMENT IN IMMOVABLE PROPERTY. CONSIDERING THE ABOVE FACTS AND FINDINGS, I AM OF THE VIEW THAT THE APPELLANT DID NOT MADE ANY TRANSACTION OF IMMOVABLE PROPERTY DURI NG THE YEAR. THE ASSESSING OFFICER DID NOT BROUGHT THE CORRECT FACT PURCHASED ANY IMMO VABLE PROPERTY BUT THE COMPANY MADE THE ENGLISH MORTGAGE DEED SO THE QUESTION OF U NEXPLAINED INVESTMENT DOES NOT ARISE. CONSIDERING THE ABOVE FINDINGS AND FACTS OF THE CASE I AM OF THE VIEW THAT THE ADDITION OF RS.44,00:00,000/- IS UNWARRANTED, UNJUS TIFIED AND UNLAWFUL. HENCE, I DELETE THE ADDITION OF RS.44,00,00,000/- MADE BY THE ASSES SING OFFICER. THE GROUND IS ALLOWED. 6. AGGRIEVED BY THE ORDER OF THE CIT(A) REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LEARNED DR RELIED ON THE ORDER OF AO. DESPITE S ERVICE OF NOTICE NONE APPEARED ON BEHALF OF THE ASSESSEE. IN THE CIRCUMSTANCES WE PRO CEEDED TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL ON RECORD AND SUBMISSIONS OF THE LEARNED DR. 7. WE HAVE CONSIDERED THE MATERIAL ON RECORD AND TH E ORDER OF CIT(A). WE ARE OF THE VIEW THAT THE ORDER OF CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. IT IS CLEAR FROM THE ORDER OF CIT(A) THAT THE ASSESSEE NEVER MADE ANY IN VESTMENTS IN THE PURCHASE OF 4 ITA NO.709/KOL/2013-M/S. DUNLOP INDIA LTD. A.Y.2008 -09 IMMOVABLE PROPERTY WORTH RS.44 CRORES IN MUMBAI. TH E ASSESSEE ONLY CREATED ONLY MORTGAGE OVER AN IMMOVABLE PROPERTY FOR A SUM OF RS .44 CRORES TO AVAIL CREDIT FACILITIES FROM DEUTCHE BANK. THE NECESSARY FORM NO .8 WAS FILED BY THE ASSESSEE IN THE MINISTRY OF CORPORATE AFFAIRS ON 14.07.2007. IN CIDENTALLY THE MORTGAGE WAS ALSO CREATED ON 14.07.2007. IN THE LIGHT OF THE AFORESAI D DOCUMENT AND IN THE ABSENCE OF ANY OTHER RELIABLE EVIDENCE TO SHOW THAT THE ASSESS EE MADE ANY INVESTMENT OF RS.44 CRORES IN PURCHASE OF A PROPERTY, WE ARE OF THE VIE W THAT ADDITION MADE BY THE AO WAS RIGHTLY DELETED BY CIT(A). WE MAY ALSO ADD THAT THE I.T.S. OR (AIR INFORMATION) DETAILS RECEIVED BY THE AO WAS ONLY AN INFORMATION WHICH COULD BE THE BASIS FOR STARTING AN ENQUIRY AGAINST THE ASSESSEE. THESE DET AILS CANNOT BE CONCLUSIVE AGAINST THE ASSESSEE. FOR THE REASONS GIVEN ABOVE WE CONFIRM TH E ORDER OF CIT(A) AND DISMISS THE APPEAL OF THE REVENUE 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. O RDER PRONOUNCED IN THE COURT ON 11.05.2016. SD/- SD/- [M.BALAGANESH ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11.05.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. DUNLOP INDIA LTD., FLAT NO.1, 5 TH FLOOR, FRONT SIDE, 9, SYED AMIR ALI AVENUE, KOLKATA-700017. 2. D.C.I.T., CIRCLE-7, KOLKATA. 3. CIT(A)-XXXII, KOLKATA 4. CIT-III, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, ASST. REGISTRAR, ITAT, KOLKATA BENCHES 5 ITA NO.709/KOL/2013-M/S. DUNLOP INDIA LTD. A.Y.2008 -09