Cosmic Tracom Pvt. ltd., Kolkata V. ITO, Ward-9(3), Kolkata, Kolkata

ITA 937/KOL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6402 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE A DDL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Opportunity of being heard
• Section: 143(3); 142(1); 68; 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & HONB LE SHRI S.S. VISWANETHRA RAVI, JM ] I.T.A NO. 937/KOL/201 7 ASSESSMENT YEAR : 2009-1 0 COSMIC TRACOM PVT. LTD. -VS- ITO, WARD-9(3), K OLKATA [PAN: AADCC 5609 D] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI MIRAJ D SHAH FOR THE REVENUE : SHRI A. BHATTACHARJEE, AD DL. CIT DATE OF HEARING : 17.05.2018 DATE OF PRONOUNCEMENT : 18.05.2018 ORDER PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED A GAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 16, KOLKATA P ASSED U/S 144/263/147/143(3) OF THE INCOME TAX ACT, 1961(THE ACT). 2. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT, THE ASSESSMENT ORDER IS PASSED U/S 144 OF THE ACT AND THE LD. CIT(A) HAD ALSO PASS ED AN EX PARTE ORDER. HE SUBMITTED THAT THE ASSESSEE HAS NOT BEEN PROVIDED A DEQUATE OPPORTUNITY AND THAT THE AO WHILE PASS IN THE ORDER U/S 143(3) PURSUANT TO AN ORDER U/S 263 OF THE ACT BY THE CIT, HAS NOT FOLLOWED THE SPECIFIC DIRECTION S GIVEN BY THE CIT-2, KOLKATA IN THE SAID ORDER PASSED U/S 263 OF THE INCOME TAX ACT, 1961 DATED 11.03.2014. 2 ITA NO.937/KOL/2017 COSMIC TRACOM PVT. LTD. A.YR .2009-10 2 HE SUBMITTED THAT ON IDENTICAL FACTS THE KOLKATA A BENCH OF THE TRIBUNAL IN I.T.A NO. 1104/KOL/2016 IN THE CASE OF SRIRAM TIE UP PVT. LTD VS ITO ORDER DATED 21.03.2018 AND IN THE CASE OF M/S SKIPPER PLA STIC LTD. IN I.T.A. NO. 282/KOL/2016 ORDER DATED 21.03.2018 AND IN THE OTHE R CASES, THE IMPUGNED ORDER WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. 3. THE LD. DR DID NOT OBJECT TO THE PRAYER THAT THI S ASSESSMENT MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER BUT SUBMITTED THA T DIRECTIONS SHOULD BE GIVEN TO THE ASSESSEE TO ENSURE ATTENDANCE AND COOPERATION BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. 4. AFTER HEARING RIVAL CONTENTIONS AND PERUSING THE PAPERS ON RECORD AS WELL AS THE CASE LAW CITED WE HOLD AS FOLLOWS. 5. THE ASSESSING OFFICER HAS NOT GIVEN ADEQUATE OPP ORTUNITY TO THE ASSESSEE AND HAS PASSED AN ORDER U/S 144 WITHOUT ADEQUATE ENQUIR Y. THE DIRECTIONS GIVEN BY THE CIT IN THE SEC 263 ORDER HAVE NOT BEEN FOLLOWED BY THE AO. THE LD. CIT(A) HAS PASSED AN EX PARTE ORDER AND HAS NOT DEALT WITH THE ISSUE ON MERIT. IN THE CASE OF SRIRAM TIE UP PVT. LTD. SUPRA AT PARA 6 AN D 7 HELD AS FOLLOWS: 6. IN THE CASE OF M/S. SUKANYA MERCHANDISE PVT. LTD . VS ITO (ITA 291/KOL/2016 DATED 15.12.2017) CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE, A SIMILAR VIEW HAS BEEN TAKEN BY THE CO-ORDINATE BENC H OF THIS TRIBUNAL AND THE SIMILAR ISSUE RELATING TO THE ADDITION MADE UNDER S ECTION 68 ON ACCOUNT OF SHARE CAPITAL CONTRIBUTION BY TREATING THE SAME AS UNEXPL AINED CASH CREDITS IS RESTORED BACK BY THE TRIBUNAL TO THE FILE OF THE A.O. IN ALM OST SIMILAR SITUATION AFTER RECORDING ITS OBSERVATIONS / FINDINGS AS UNDER: WE NOTE THAT THE AO PURSUANT TO THE ORDER OF LD. CI T HAD TAKEN NOTE OF THE DIRECTIONS OF THE LD. CIT AND ISSUED NOTICE U/S. 14 2(1) DATED 16.08.2013 AND HAS ACKNOWLEDGED THAT THE ASSESSEE HAD FURNISHE D THE COPY OF FINAL 3 ITA NO.937/KOL/2017 COSMIC TRACOM PVT. LTD. A.YR .2009-10 3 ACCOUNT, I. T. ACKNOWLEDGEMENT, BANK STATEMENT FOR THE RELEVANT PERIOD EVIDENCING THE RECEIPT OF SHARE APPLICATION MONEY F ROM THE SHARE APPLICANTS. THEREAFTER, THE AO MAKES CERTAIN INFER ENCES BASED ON THE LIST OF SHAREHOLDERS AND TAKING NOTE OF THE BANK STATEMENT FURNISHED BY THE ASSESSEE. WE NOTE THAT AFTER THE INITIAL NOTICE DA TED 16.08.2013, THEREAFTER THE AO HAD ISSUED THE NOTICE ON 26.02.2014 WHICH HA S BEEN REPRODUCED AT PAGE 3 OF THE REASSESSMENT ORDER, WHEREIN AO REQUIR ED THE DIRECTORS OF THE ASSESSEE COMPANY TO BE PRESENT BEFORE HIM ON 06.03. 2014. HOWEVER, ACCORDING TO THE LD. AR, THE ASSESSEE RECEIVED THE NOTICE ONLY ON 07.03.2014 AND THEREAFTER, THE ASSESSEE REQUESTED T HE AO TO PROVIDE ANOTHER OPPORTUNITY OF HEARING VIDE ITS LETTER DATE D 20.03.2014. THEREAFTER, THE AO FIXED THE DATE OF HEARING ON 12.03.2014 VIDE NOTICE DATED 10.03.2014. SO, ACCORDING TO THE ASSESSEE COMPANY SINCE THE DIRECTORS WERE NOT IN STATION TILL 23.03.2014, THE LD. AR HAD REQUESTED FOR ADJOURNMENT TILL THAT TIME. THOUGH THE AO HAS STATE D THAT HE HAS ISSUED SUMMONS ON 24.03.2014 TO THE ASSESSEE COMPANY TO PR ODUCE THE DIRECTORS OF THE COMPANY BEFORE HIM ON 26.03.2014, THE ASSESS EE COMPANY CONTENDED THAT IT HAS NOT RECEIVED THE SAID SUMMON AND, THERE FORE, COULD NOT MAKE THE PERSONAL APPEARANCE. THE AO HAS DRAWN ADVERSE CONC LUSION BASICALLY BECAUSE OF NON-APPEARANCE OF THE DIRECTORS OF THE A SSESSEE COMPANY AND THAT OF THE SHAREHOLDER COMPANIES. WE NOTE THAT IN ITIALLY THE AO STARTED THE ENQUIRY ON 16.08.2013 WHICH WAS COMPLIED BY THE ASS ESSEE BY SUBMITTING DOCUMENTS WHICH HAS BEEN ACKNOWLEDGED BY THE AO. T HEREAFTER, THE ENQUIRY WAS STARTED ONLY AT THE FAG END OF FEBRUARY 2014 AND THE ASSESSEE COMPANY HAD INFORMED THE AO THAT THEIR DIRECTORS WE RE OUT OF STATION TILL 23.03.2014. IN THE LIGHT OF THE AFORESAID FACTS, W E ARE OF THE OPINION THAT THE ASSESSEE DID NOT GET FAIR OPPORTUNITY TO PRESEN T THE EVIDENCES BEFORE THE AO SO, THERE WAS A LACK OF OPPORTUNITY AS AFORESAID , THEREFORE, IT HAS TO GO BACK TO AO. 8. WE ALSO NOTE THAT LD. CIT WHILE SETTING ASIDE TH E ORDER OF THE AO WHICH WAS PASSED U/S. 147/143(3) OF THE ACT, THE LD . CIT GAVE CERTAIN GUIDELINES TO FOLLOW FOR CONDUCTING DEEP INVESTIGAT ION. WE ALSO NOTE THAT SIMILARLY PLACED ASSESSEES HAD CHALLENGED THE EXERC ISE OF REVISIONAL JURISDICTION U/S. 263 OF THE ACT BEFORE THIS TRIBUN AL IN THOSE CASES ONE OF IT OF SUBHA LAKSHMI VANIJYA PVT. LTD. VS. CIT IN ITA N O. 1104/KOL/2014 DATED 30.07.2015, WHEREIN THE TRIBUNAL WAS PLEASED TO UPHOLD THE ORDER PASSED BY THE LD. CIT PASSED U/S. 263 OF THE ACT, W HICH WE LEARN TO HAVE BEEN CONFIRMED BY THE HONBLE JURISDICTIONAL HIGH C OURT AND THE SLP PREFERRED AGAINST THE DECISION OF THE HONBLE JURIS DICTIONAL HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. THEREF ORE, SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPH ELD. WE NOTE THAT THE 4 ITA NO.937/KOL/2017 COSMIC TRACOM PVT. LTD. A.YR .2009-10 4 AO WHILE GIVING EFFECT TO THE CITS 263 ORDER HAS N OTED THAT THE ASSESSEE COMPANY HAS IN FACT FURNISHED THE DOCUMENTS SOUGHT BY HIM TO HIS NOTICE U/S. 142(1) OF THE ACT. HOWEVER, THE AO TOOK THE A DVERSE VIEW AGAINST THE ASSESSEE ON THE PLEA THAT THE DIRECTORS OF THE ASSE SSEE COMPANY AND SHARE SUBSCRIBING COMPANIES HAD NOT APPEARED BEFORE HIM ON 26.03.2014 AND T AFTER TAKING NOTE THAT NONE APPEARED ON 26.03.2014 CONCLUDED ON THE SAME DAY 26.03.2014 THAT ENTIRE AMOUNT OF SHARE APPLICA TION MONEY RECEIVED ALONG WITH PREMIUM AMOUNTING TO RS.8,06,00,000/- WH ICH HAS REMAINED UNEXPLAINED AND ADDED TO THE INCOME OF THE ASSESSE E. WE ALSO NOTE THAT THE LD. CIT AFTER LOOKING INTO THE PERNICIOUS PRACTICE OF CONVERTING BLACK MONEY INTO WHITE MONEY HAS GIVEN THE GUIDELINES TO AO AS TO HOW THE INVESTIGATION SHOULD BE CONDUCTED TO FIND OUT THE S OURCE OF SOURCE. SINCE SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD BY THE TRIBUNAL AS WELL AS BY THE HONBLE CALCUTTA HIG H COURT AS WELL AS THE SLP HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT , SIMILAR ORDER OF THE LD. CIT HAS TO BE GIVEN EFFECT TO AS DIRECTED BY TH E LD. CIT. WE TAKE NOTE THAT THE LD. CIT WITH HIS EXPERIENCE AND WISDOM HAS GIVEN CERTAIN GUIDELINES IN THE BACKDROP OF BLACK MONEY MENACE SH OULD HAVE BEEN PROPERLY ENQUIRED INTO AS DIRECTED BY HIM. THE AO OUGHT TO HAVE FOLLOWED THE INVESTIGATING GUIDELINES AND METHOD AS DIRECTED BY HIM TO UNEARTH THE FACTS TO DETERMINE WHETHER THE IDENTITY, GENUINENES S AND CREDITWORTHINESS OF THE SHARE SUBSCRIBERS. WE NOTE THAT THE HONBLE SU PREME COURT IN THREE JUDGES BENCH IN THE CASE OF TIN BOX, (SUPRA), HAS H ELD THAT SINCE THERE WAS LACK OF OPPORTUNITY TO THE ASSESSEE AT THE ASSESSME NT STAGE ITSELF, THE ASSESSMENT NEEDS TO BE DONE AFRESH AND THEREBY REVE RSED THE HONBLE HIGH COURT, TRIBUNAL AND CIT(A)S ORDERS AND REMANDED T HE MATTER BACK TO AO FOR FRESH ASSESSMENT. SO, SINCE THERE WAS LACK OF OPPORTUNITY AS AFORESTATED IT HAS TO GO BACK TO AO. WE ALSO NOTE THAT THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING & MARKE TING PVT. LTD. IN ITA NO. 525/2014 DATED 11.03.2015 WHEREIN AFTER NOTICIN G INADEQUATE ENQUIRY BY AUTHORITIES BELOW HAVE HELD AS UNDER: 41. WE ARE INCLINED TO AGREE WITH THE CIT(APPEALS) , AND CONSEQUENTLY WITH ITAT, TO THE EXTENT OF THEIR CONC LUSION THAT THE ASSESSEE HEREIN HAD COME UP WITH SOME PROOF OF IDEN TITY OF SOME OF THE ENTRIES IN QUESTION. BUT, FROM THIS INFERENCE, OR FORM THE FACT THAT THE TRANSACTIONS WERE THROUGH BANKING CHANNELS , IT DOES NOT NECESSARILY FOLLOWING THAT SATISFACTION AS TO THE C REDITWORTHINESS OF THE PARTIES OR THE GENUINENESS OF THE TRANSACTIONS IN QUESTION WOULD ALSO HAVE BEEN ESTABLISHED. 5 ITA NO.937/KOL/2017 COSMIC TRACOM PVT. LTD. A.YR .2009-10 5 42. THE AO HERE MAY HAVE FAILED TO DISCHARGE HIS OB LIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGI CAL CONCLUSION. BUT CIT(APPEALS), HAVING NOTICED WANT OF PROPER INQ UIRY, COULD NOT HAVE CLOSED THE CHAPTER SIMPLY BY ALLOWING THE APPE AL AND DELETING THE ADDITIONS MADE. IT WAS ALSO THE OBLIGATION OF T HE FIRST APPELLATE AUTHORITY, AS INDEED OF ITAT, TO HAVE ENSURED THAT EFFECTIVE INQUIRY WAS CARRIED OUT, PARTICULARLY IN THE FACT OF THE AL LEGATIONS OF THE REVENUE THAT THE ACCOUNT STATEMENTS REVEAL UNIFORM PATTERN OF CASH DEPOSITS OF EQUAL AMOUNTS IN THE RESPECTIVE ACCOUNT S PRECEDING THE TRANSACTIONS IN QUESTION. THIS NECESSITATED A DETAI LED SCRUTINY OF THE MATERIAL SUBMITTED BY THE ASSESSEE IN RESPONSE TO T HE NOTICE UNDER SECTION148 ISSUED BY THE AO, AS ALSO THE MATERIAL S UBMITTED AT THE STAGE OF APPEALS, IF DEEMED PROPER BY WAY OF MAKING OR CAUSING TO BE MADE A 'FURTHER INQUIRY IN EXERCISE OF THE POWE R UNDER SECTION 250(4). HIS APPROACH NOT HAVING BEEN ADOPTED, THE I MPUGNED ORDER OF ITAT, AND CONSEQUENTLY THAT OF CIT(APPEALS), CAN NOT BE APPROVED OR UPHELD.' IN VIEW OF THE AFORESAID ORDER AND IN THE LIGHT OF THE HONBLE SUPREME COURTS DECISION IN TIN BOX COMPANY (SUPRA) AND TAK ING INTO CONSIDERATION THE FACT THE ORDER OF THE LD. CIT PASSED U/S. 263 O F THE ACT IN SIMILAR CASES BEING UPHELD UP TO THE LEVEL OF APEX COURT, AND TAK ING NOTE OF HONBLE DELHI HIGH COURTS ORDER IN JANSAMPARK ADVERTISING & MARK ETING PVT. LTD. (SUPRA), WE SET ASIDE THE ORDER OF THE LD. CIT(A) A ND REMAND THE MATTER BACK TO THE FILE OF AO FOR DE NOVO ASSESSMENT AND TO DEC IDE THE MATTER IN ACCORDANCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. WE, THEREFORE, CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON TH E ISSUE IN DISPUTE AND RESTORE THE MATTER TO THE FILE OF THE A.O. TO DECIDE THE SA ME AFRESH AFTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD AND AFTER TAKING INTO CONSIDERATION THE ENTIRE EVIDENCE ALREADY AVAILABLE ON RECORD AS WELL AS OTHER DOCUMENTARY EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE IN SUPPORT OF ITS CASE ON THE ISSUE. THE KOLKATA BENCH OF THE ITAT HAS PASSED SIMILAR OR DER IN MANY CASES ON THE SAME ISSUE. 6 ITA NO.937/KOL/2017 COSMIC TRACOM PVT. LTD. A.YR .2009-10 6 5. CONSISTENT WITH THE VIEW TAKEN THEREIN WE SET AS IDE THIS ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, W ITH THE DIRECTION THAT AN ADEQUATE OPPORTUNITY SHOULD BE PROVIDED TO THE ASSESSEE AND THAT THE DIRECTION GIVEN BY THE LD. CIT IN THE ORDER PASSED U/S 263 BE FOLLOWED. T HE ASSESSEE IS DIRECTED TO APPEAR BEFORE THE ASSESSING OFFICER WITHIN 30 DAYS OF RECEIPT OF THIS ORDER TAKE NOTICE AND THEREAFTER COOPERATE IN COMPLETION OF TH E ASSESSMENT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 18.05.2018 SD/- SD/- [S.S.VISWANETHRA RAVI] [ J.SUDHAK AR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED : 18.05.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. COSMIC TRACOM PVT. LTD. C/O, D.J.SHAH & CO., KAL YAN BHAVAN, 2, ELGIN ROAD, KOLKATA-700020. 2. ITO, WARD-9(3), KOLKATA, AAYAKAR BHAWAN, P-7, CH OWRINGHEE SQUARE, KOLKATA- 700069. 3..C.I.T.(A)- , KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S 7 ITA NO.937/KOL/2017 COSMIC TRACOM PVT. LTD. A.YR .2009-10 7