M/s Chemaux Dyestuff Corporation, Kolkata V. CIT, -XX, KOLKATA, Kolkata

ITA 879/KOL/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7773 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 16-06-2015
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.879/KOL/2015 ASSESSMENT YEAR:2007-08 M/S CHEMAUX DYESTUFF CORPORATION, 34A, BRABOURNE ROAD, KOLKATA-700001 [ PAN NO. AACFS 5192 M ] / V/S . INCOME TAX OFFICER, WARD- 34(3), R.NO. 711, 7 TH FLOOR, AAYKAR POORVA, 110, SHANTIPALLY, KOLKATA- 107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI S.K.DASGUPTA, FCA /BY RESPONDENT SHRI SANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 26-06-2019 /DATE OF PRONOUNCEMENT 24-07-2019 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2007-08 , ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-XX, KOLKATAS ORDER DATED 09.12.2013 PASSED IN CASE NO.168/CIT(A)-XX/WARD 34(3)/09-10/KO L, INVOLVING PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. 2. I NOTICE AT THE OUTSET THAT THE ASSESSEES INSTA NT APPEAL SUFFERS FROM 448 DAYS DELAY IN FILING. LEARNED COUNSEL REFERS TO ASSESSEE S CONDONATION PETITION STATING THEREIN THAT IT HAD BEEN AWAITING FOR FINAL OUTCOME OF ITS RECTIFICATION PETITION DATED 31.01.2014 FILED BEFORE THE CIT(A). THE SAME IS STA TED TO BE PENDING TILL DATE. IF FURTHER EMERGES THAT THE ASSESSEES MANAGING PARTNE R HAD ALSO BEEN UNDERGOING SERIOUS PHYSICAL AILMENTS. ALL THESE SOLEMN AVERMENTS HAVE NOWHERE BEEN REBUTTED BY THE REVENUE DURING THE COURSE OF HEARING. I THUS CONCLU DE THAT THE IMPUGNED DELAY OF 448 ITA NO.879/KOL/2015 A.Y. 200 7-08 M/S CHEMAUX DYESTUFF CORPN. VS. ITO WD.34(3), KOL. PAGE 2 DAYS IS NEITHER INTENTIONAL NOR DELIBERATE BUT ON A CCOUNT OF CIRCUMSTANCES BEYOND ASSESSEES CONTROL. HON'BLE APEX COURTS LANDMARK D ECISION COLLECTOR, LAND ACQUISITION VS. MST. KATIJI (1987) 167 ITR 471 (SC) HOLDS THAT SUBSTANTIATE CAUSE IN SUCH SITUATION SUBSERVING ENDS OF JUSTICE HAS TO BE SEEN THAN GOING BY THE MERE TECHNICAL ASPECTS. THE IMPUGNED DELAY IS ACCOR DINGLY CONDONED. THE CASE IS NOW TAKEN UP FOR ADJUDICATION ON MERITS. 3. AFTER VEHEMENTLY ARGUING FOR SOMETIME, LEARNED C OUNSEL STATES THAT ASSESSEE NO MORE WISHES TO PRESS FOR ITS FORMER SUBSTANTIVE GRO UND CHALLENGING COMMISSION PAYMENTS DISALLOWANCE OF 61,778/- KEEPING IN MIND SMALLNESS OF THE ISSUE. HE HAS ALSO MADE NECESSARY ENDORSEMENT IN THE CASE FILE. T HIS FORMER SUBSTANTIVE GROUND IS ACCORDINGLY DISMISSED AS NOT PRESSED. 4. NEXT COMES SEC. 2(22)(E) OF DEEMED DIVIDEND ADDI TION 61,778/- PERTAINING TO THE ASSESSEES LOAN TAKEN OF 7.30 LAC AS ON 31.03.2007 INCLUDING SUM OF 2.05 LAKH PERTAINING TO THE RELEVANT PREVIOUS YEAR. THE ASSES SING OFFICERS ASSESSMENT ORDER IN PAGE 3 REVEALS THAT THE ASSESSEE-FIRM HAD BEEN HAVI NG TWO PARTNERS M/S DOSHI BROTHERS AND M/S SANGANERIYA WOOLEN MILLS LTD. HOLD ING MORE THAN 20% STAKE IN IT AND MORE THAN 10% SHARES OF M/S CHEMAUX DYESTUFF (T HE CREDITOR LENDER ENTITY) MEANING THEREBY THIS ASSESSEE IS NEITHER A REGISTER ED NOR BENEFICIAL SHAREHOLDER. I CONCLUDE IN THIS FACTUAL BACKDROP THAT THE TRIBUNAL S SPECIAL BENCH IN ACIT VS. BHAUMIK COLOUR PVT. LTD. 313 ITR 416 (AT) HOLDS THE FIELD TILL DATE THAT THE IMPUGNED STATUTORY PROVISION REQUIRES THE LOAN AVOI DING ENTITY TO BE BOTH REGISTERED AS WELL AS BENEFICIAL SHAREHOLDER IN CREDITOR PARTY/CO MPANY LOAN. I DRAW STRONG SUPPORT THERFROM TO DECLINE REVENUES ARGUMENT IN FAVOUR TO THE IMPUGNED ADDITION. THE ASSESSEE SUCCEEDS IN ITS LATTER SUBSTANTIVE GROUND. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOV E TERMS. ORDER PRONOUNCED IN OPEN COURT ON 24/07/2019 S D/- (S.S. GODARA) JUDICI AL MEMBER KOLKATA, *DKP/SR.PS - 24/07/2019 ITA NO.879/KOL/2015 A.Y. 200 7-08 M/S CHEMAUX DYESTUFF CORPN. VS. ITO WD.34(3), KOL. PAGE 3 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S CHEMAUX DYESTUFF CORPN. 34A, BRABOUR NE ROAD, KOLKATA-700001 2. /RESPONDENT-ITO WD-34(3), R.NO.711, 7 TH FL, AAYKAR POORVA, 110, SHANTIPALLY, KOLKATKA-107 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , /TRUE COPY/ ',