Kwality Ice Creams India LLP(Erstwhile Kwality Ice Crems India Pvt. Ltd.), Kolkata V. DCIT, Circle -10, Kolkata, Kolkata

ITA 896/KOL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5054 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 14-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 11-06-2012
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU
• Assessee Lawyers: DEBABRATA KHA SNABIS
• Keywords: Opportunity of being heard; Source of fund
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI WASE EM AHMED, AM] I.T.A NO. 896/KOL/201 2 ASSESSMENT YEAR : 2005-0 6 KWALITY ICE CREAM INDIA LLP -VS.- D.C.I.T. , CIRCLE-10, (ERSTWHILE KWALITY ICE CREAMS KOLKATA INDIA PVT.LTD.)KOLKATA [PAN : AABCK1290J) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI DEBABRATA KHA SNABIS, FCA FOR THE RESPONDENT : DAVID Z.CHAWNGTHU, JCIT DATE OF HEARING : 15.03.2016. DATE OF PRONOUNCEMENT : 6.4.2016. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 28.12.2011 OF CIT(A)- XXIV, KOLKATA, RELATING TO AY 2005-06. 2. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) WHEREBY THE CIT(A) CONFIRMED THE ORDER OF AO MAKING ADDITION OF RS.79,15,669/- ON ACCOUNT OF ALLEGED UNDISCLOSED INVESTMENT IN MUTUAL FUNDS. 3. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN THE BUSINESS OF MARKETING OF FATS/OILS BESIDES MAKING INVESTMENTS. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND FROM THE INFORMATION FROM ANNUAL INFORMATION REPORT (AIR) THAT THE ASSESSEE HAD MADE INVESTMENTS IN MUTUAL FUNDS. THE ASSESSEE WAS ABLE TO EXPLAIN THE SOURCE OF FUNDS FOR MAKING INVESTMENTS IN MANY OF THE MUTUAL FUNDS. HOWEVER IN RESPECT OF INVESTMENTS IN HDFC MADE ON 01.12.2004 AND 16.12.2 004 OF RS.39,24,170/- AND 2 ITA NO.896/KOL/2012 KWALITY ICE CREAMS INDIA LLP. A.YR.2005-06 2 RS.39,91,499/-, RESPECTIVELY IN HDFC MUTUAL FUND TH E ASSESSEE COULD NOT OFFER PROPER EXPLANATION. THE AO THEREFORE MADE THE IMPUGNED ADD ITION TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE CIT(A) THE ASSESSEE FILED A LETTER DATED 07.12.2007 OF CITI BANK. THE ASSESSEE EXPLAINED BEFORE CIT(A) THAT DIVIDEND WHIC H ARE RECEIVED ON THE EXISTING INVESTMENTS OF UNITS OF MUTUAL FUNDS WERE RE-INVEST ED IN HDFC EQUITY FUND AND THIS WAS DONE BY CITI BANK AS PER THE STANDING INSTRUCTI ON GIVEN BY THE ASSESSEE. IN THE LETTER DATED 07.12.2007 OF CITI BANK THESE FACTS WE RE CLARIFIED BY THEM TO THE ASSESSEE. THE ASSESSEE THUS PLEADED BEFORE THE AO THAT THE SO URCE OF FUNDS OUT OF WHICH INVESTMENTS IN HDFC EQUITY FUND WERE MADE, WERE DUL Y EXPLAINED AS OUT OF DIVIDEND RECEIVED ON MUTUAL FUNDS WHICH WERE REINVESTED. 5. THE CIT(A) HOWEVER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE AND HE HELD AS FOLLOWS :- 2.3. I HAVE CONSIDERED THE SUBMISSION OF THE APPE LLANT AND ALSO GONE THROUGH THE OBSERVATION MADE BY THE AO IN ASSESSMENT ORDER. I A M OF THE VIEW THAT THE AMOUNT OF RS.79,15,669/- HAS BEEN CORRECTLY ADDED TO THE TOTA L INCOME OF THE APPELLANT AS THE SAID INCOME HAS ALREADY ACCRUED DURING THE F.Y. 2004-05. HENCE, THE SAID ADDITION OF RS.79,15,669/- IS UPHELD. THIS GROUND OF APPEAL IS DISMISSED. AGGRIEVED BY THE ORDER OF CIT(A) ASSESSEE HAS PREFE RRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. THE ASSESSEE HAS PAID APPEALING FEE ONLY RS.1500 /-. THE REGISTRY HAS RAISED AN OBJECTION THAT THE FEE PAYABLE IN THE APPEAL WAS RS .10,000/-. IN REPLY TO THE DEFECT MEMO ISSUED BY THE REGISTRY IN THIS REGARD THE ASSESSEE HAS POINTED OUT AS FOLLOWS :- IN THIS CONNECTION WE WOULD LIKE TO INVITE YOUR A TTENTION TO THE FACT THAT IN THE INSTANT CASE, TOTAL INCOME ASSESSED BY THE LD. ASSESSING OF FICER IS 'NIL' VIDE HIS ORDER DT.07.12.2007 PASSED UNDER SECTION 143(3) OF THE 1. TAX ACT, 1961 AS PER CERTIFIED COPY OF THE ORDER ATTACHED WITH MEMORANDUM OF APPEAL FIL ED WITH HON'BLE TRIBUNAL ON 11.06.2012 BEARING I.T.A. NO.896/KOI/20 12. 3 ITA NO.896/KOL/2012 KWALITY ICE CREAMS INDIA LLP. A.YR.2005-06 3 PLEASE ALSO NOTE THAT TOTAL INCOME ASSESSED AS CONS IDERED BY LD. C.I.T.(A) - XXIV, KOLKATA IN HIS ORDER DT.28.12.2011 IN APPEAL NO. 49 0/CIT(A)-XXIVJC-10/08-09 IS ALSO 'NIL' AND A CERTIFIED COPY OF HIS ORDER HAS ALSO BE EN ENCLOSED WITH MEMORANDUM OF APPEAL FILED WITH HON'BLE TRIBUNAL ON 11.06.2012 AS DETAILED ABOVE. THE APPELLANT HAD SUO MOTU PAID RS.1,500 TOWARDS AP PEAL FEES AS PER COUNTERFOIL OF RECEIPTED CHALLAN FILED WITH THE MEMORANDUM OF APPE AL FILED WITH HON'BLE TRIBUNAL ON 11.06.2012 ALREADY DETAILED ABOVE. YOU WOULD APPRECIATE THAT THE APPROPRIATE APPEAL FE ES PAYABLE IN THE INSTANT CASE IN TERMS OF THE PROVISIONS OF SECTION 2S3(6)(A) OF THE 1. TAX ACT, 1961 IS RS.SOO BUT THE APPELLANT HAD ALREADY DEPOSITED RS.1,SOO ALREADY DI SCUSSED ABOVE, AS SUCH THE DEFECT NOTED BE REMOVED FORTHWITH WITH INTIMATION TO THE A PPELLANT. 7. THE LEARNED COUNSEL FOR THE ASESSEE ALSO DREW OU R ATTENTION TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GILBS COMP UTER LTD. VS ITAT [2009] 317 ITR 159 WHEREIN THE HONBLE BOMBAY HIGH COURT TOOK A VIEW THAT THE FEES PAYABLE DEPENDS UPON THE TOTAL INCOME AND WHEN THE TOTAL IN COME DETERMINED IS AT A NEGATIVE FIGURE THE FEES OF RS.500/- ALONE IS PAYABLE. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D COUNSEL FOR THE ASSESSEE AND ARE OF THE VIEW THAT THE CONTENTIONS PUT FORTH BY H IM ARE CORRECT AND DESERVE TO BE ACCEPTED. ACCORDINGLY IT IS HELD THAT FEES PAID IN THE APPEAL IS PROPER. 9. AS FAR AS THE MERITS OF THE APPEAL OF THE ASSESS EE ARE CONCERNED WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS SEEN THAT THERE WAS A HEAR ING BEFORE CIT(A)13.11.2009. AND THIS LETTER DATED 07.12.2007 OF CITI BANK WAS FILED BY T HE ASSESSEE AND IT WAS CONTENDED THAT THE INVESTMENTS IN HDFC MUTUAL FUND WERE OUT OF THE DIVIDEND RECEIVED WHICH WERE AUTOMATICALLY REINVESTED IN MUTUAL FUNDS. THE HEARI NG BEFORE CIT(A) WAS THEREAFTER ADJOURNED AND TOOK PLACE ON 23.08.2008 AND ADJOURNE D TO 03.11.2011. THEREAFTER THE IMPUGNED ORDER WAS PASSED ON 28.12.2011. IT IS CLEA R FROM THE ORDER OF CIT(A) THAT CIT(A) HAS NOT GONE INTO THE SOURCE OUT OF WHICH TH E INVESTMENTS IN MUTUAL FUNDS WERE MADE AND TREATED AS UNEXPLAINED BY AO. IT CAN BE SA ID THAT BY IMPLICATION THE CIT(A) HAS ACCEPTED THE CLAIM OF THE ASSESSEE BECAUSE CIT( A) HAS TAXED THE IMPUGNED SUM AS 4 ITA NO.896/KOL/2012 KWALITY ICE CREAMS INDIA LLP. A.YR.2005-06 4 DIVIDEND THAT ACCRUED TO THE ASSESSEE DURING THE PR EVIOUS YEAR RELEVANT TO A.Y.2005-06. IN THIS REGARD THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT IN THE SUBSEQUENT ASSESSMENT YEAR THE ASSESSEE HAD OFFERED THE DIVIDE ND INCOME TO TAX. THE RELEVANT LEDGER ACCOUNT WAS FILED BEFORE US . THE SAME IS GI VEN AS ANNEXURE TO THIS ORDER. 10. WE ARE OF THE VIEW THAT IN THE LIGHT OF THE EV IDENCE NOW AVAILABLE ON RECORD THE ISSUE HAS TO BE EXAMINED AFRESH BY THE AO. WE THERE FORE SET ASIDE THE ORDER OF CIT(A) AND REMAND THE ISSUE TO THE AO FOR FRESH CONSIDERAT ION IN THE LIGHT OF THE EVIDENCE BROUGHT TO OUR NOTICE DURING THE COURSE OF HEARING. AO WILL AFFORD OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE SET ASIDE PROCEEDINGS. THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT THE APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 6.4.2016. SD/- SD/- [WASEEM AHMED] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 6.4.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.KWALITY ICE CREAMS INDIA LLP (ERSTWHILE KWALITY I CE CREAMS (INDIA)PVT. LTD., C/O TAPAS CHAKRABARTI, FCA, 121, HARISH MUKHERJEE ROAD, KOLKATA-700026. 2. D.C.I.T., CIRCLE-10, KOLKATA. 3. CIT(A)-XXIV KOLKATA 4. CIT-IV, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES 5 ITA NO.896/KOL/2012 KWALITY ICE CREAMS INDIA LLP. A.YR.2005-06 5