D.C.I.T.Cir - VII,Kol, Kolkata V. M/s Yulan Marketing Pvt Ltd, Kolkata

ITA 770/KOL/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4792 (ITAT-KOLKATA)
• Duration Of Justice: 6 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 10-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y

Judgement Text

1 ITA NO. 770/KOL/2013 YULAN MARKETING PVT. LTD., AY 2008-09 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 770/KOL/2013 ASSESSMENT YEAR: 2008-09 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-VII, KOLKATA VS. M/S. YULAN MARKETING PVT. LTD. (PAN: AAACY1811C) APPELLANT RESPONDENT DATE OF HEARING 25.02.2019 DATE OF PRONOUNCEMENT 17.05.2019 FOR THE APPELLANT SHRI ROBIN CHOUDHURY, ADDL. CIT, SR. DR FOR THE RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE REVENUE IS AGAINST THE ORDER OF THE LD. CIT(A), CENTRAL- 1, KOLKATA DATED 31.01.2013 FOR AY 2008-09. 2. AT THE OUTSET ITSELF, THE LD. DR POINTED OUT THA T IN THE GROUNDS OF APPEAL, IT IS WRONGLY MENTIONED THAT THE AO HAS MADE THE ADDITION AS PROTECTIVE ASSESSMENT ONLY. HOWEVER, IT WAS POINTED OUT THAT THE AO HAD MADE TH E ADDITION ON SUBSTANTIVE BASIS. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS. 1 CR. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO NOTED TH AT THE ASSESSEE COMPANYS DIRECTOR SHRI SHARMA SUBMITTED ON OATH ON 15.12.2006 BEFORE THE D DIT (INV.), KOLKATA THAT HE HAS GOT CASH EQUIVALENT AMOUNT FROM THE COMPANIES AGAINST W HICH THE CHEQUES HAVE BEEN ISSUED BY THE ASSESSEE COMPANY TO VARIOUS MUMBAI BASED COMPAN IES OF KETAN PAREKH GROUP. THEREAFTER, THE AO NOTES THAT SINCE THE DIRECTOR RE CEIVED CASH EQUIVALENT AMOUNT ON BEHALF OF THE ASSESSEE COMPANY HE WAS PLEASED TO ADD ON ES TIMATE BASIS THE ASSESSEES INCOME AS RS. 1 CR. TAKING NOTE THAT SHRI SHARMA HAS DEPOSITE D HUGE AMOUNT IN HIS PROPRIETARY CONCERN 2 ITA NO. 770/KOL/2013 YULAN MARKETING PVT. LTD., AY 2008-09 IN THE YEAR UNDER CONSIDERATION. AGGRIEVED, THE AS SESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO DELETE THE ADDITION. AGG RIEVED, THE REVENUE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE AO HAS MADE THE ADDITION ON LY ON THE BASIS THAT THE DIRECTOR OF THE ASSESSEE COMPANY SHRI PRAMOD SHARMA ON 15.12.2006 H AS STATED BEFORE THE DDIT (INV.) THAT IN LIEU OF CASH, THE ASSESSEE COMPANY HAD ISSU ED CHEQUES TO VARIOUS BOMBAY BASED COMPANIES OF KETAN PAREKH GROUP. EVEN THOUGH THE A O NOTES THAT THE SAID SHRI SHARMA HAD RETRACTED HIS STATEMENT BY A SWORN AFFIDAVIT BEFOR E THE NOTARY PUBLIC, STILL THE AO TAKING NOTE THAT THERE WAS HUGE AMOUNTS DEPOSITED IN MR. SHARMAS EIGHT PROPRIETORSHIP CONCERN IN THE YEAR UNDER CONSIDERATION, THE AO ESTIMATED T HE INCOME OF THE ASSESSEE COMPANY TO THE TUNE OF RS. 1 CR. ON APPEAL, WE NOTE THAT THE L D. CIT(A) HAS RIGHTLY TAKEN NOTE OF THE FACT THAT DEPOSIT OF AMOUNTS IN THE DIRECTORS PROP RIETARY CONCERN CANNOT BE TREATED AS THE INCOME OF THE ASSESSEE COMPANY. IT HAS TO BE KEPT I N MIND THAT THE ASSESSEE COMPANY IS A SEPARATE LEGAL ENTITY; AND EVEN IF ONE OF THE DIREC TORS OF THE ASSESSEE COMPANY, IE, MR. SHARMAS PROPRIETORSHIP ACCEPTS CASH DEPOSITS CANNO T BY ANY STRETCH OF IMAGINATION BE CONSIDERED AS THE INCOME OF THE ASSESSEE COMPANY WI THOUT ANY MATERIAL/EVIDENCE TO SHOW THAT ASSESSEE COMPANIES INCOME ARE DEPOSITED IN THO SE FIRMS. FURTHER, THE AO HAS NOT EVEN CARED TO MENTION THE AMOUNT DEPOSITED IN CASH IN TH E EIGHT PROPRIETARY CONCERNS OF MR. SHARMA FROM THE ASSESSEE COMPANY, WITHOUT WHICH IT IS NOT UNDERSTOOD AS TO HOW THE AO ESTIMATED THE INCOME OF ASSESSEE COMPANY AT RS 1 CR ORE. SO, THE ASSESSMENT ORDER HAS BEEN FRAMED AND INCOME ASSESSED BY AO WITHOUT APPLICATIO N OF MIND AND IS VAGUE AND IS BAD IN LAW AND PERVERSE AND, THEREFORE, CANNOT STAND THE S CRUTINY OF LAW, THEREFORE, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION WHICH REQUIRES NO INTERFERENCE FROM OUR PART AND, THEREFORE, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF REVENUE. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 17TH MAY, 2019. SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17TH MAY, 2019 JD.(SR.P.S.) 3 ITA NO. 770/KOL/2013 YULAN MARKETING PVT. LTD., AY 2008-09 COPY OF THE ORDER FORWARDED TO: 1 APPELLANT DCIT, CENTRAL CIRCLE-VII, KOLKATA. 2 RESPONDENT M/S. YULAN MARKETING PVT. LTD., 205, R ABINDRA SARANI, KOLKATA-700 007. 3 4 5 CIT (A), CENTRAL -1, KOLKATA (SENT THROUGH E-MAIL) CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR